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What follows is an opinion from a United States Court of Appeals. Your task is to identify the state or territory in which the case was first heard. If the case began in the federal district court, consider the state of that district court. If it is a habeas corpus case, consider the state of the state court that first heard the case. If the case originated in a federal administrative agency, answer "not applicable". Answer with the name of the state, or one of the following territories: District of Columbia, Puerto Rico, Virgin Islands, Panama Canal Zone, or "not applicable" or "not determined".
FEDERAL GLASS COMPANY, Appellant, v. Samuel LOSHIN, et al., Appellees.
No. 23226.
United States Court of Appeals, Second Circuit.
Motion Submitted Oct. 4, 1954.
Decided Dec. 3, 1954.
Clark, Chief Judge, dissented.
Irving Levine, Danbury, Conn., for the motion.
Wiggin and Dana, New Haven, Conn., and Corbett, Mahoney & Miller, Columbus, Ohio (Thew Wright, Jr., New Haven, Conn., of counsel), for appellant.
Before CLARK, Chief Judge, and L. HAND and FRANK, Circuit J udges.
L. HAND, Circuit Judge.
The defendants move to dismiss an appeal, taken by the plaintiff from an order that denied its motion for a summary judgment in an action to enjoin the defendants (a) from copying the plaintiff’s trade name and corporate title, (b) to compel them to account for any profits, and (c) to pay damages. (The complaint included a prayer both for a permanent injunction and for an injunction pen-dente lite). The plaintiff’s motion came on to be heard after answer upon numerous affidavits filed by both parties, and upon the plaintiff’s answers to interrogatories ' put by the defendants. Judge Smith denied it in a written opinion, 126 F.Supp. 737, substantially for the reason that the plaintiff had not proved that its trade name had become widely enough known in the defendants’ market before the defendants had themselves begun business. Both parties agree that the order was interlocutory; their difference is whether it is nevertheless within the meaning of § 1292(1) of Title 28 U.S.C.A., as an order “refusing” an injunction. The decisions are not uniform. We held in Raylite Electric Corp. v. Noma Electric Corporation, 2 Cir., 170 F.2d 914, that an appeal lay from such an order, and the Fifth Circuit did the same in International Forwarding Co. v. Brewer, 181 F.2d 49. On the other hand the Third Circuit in Morgenstern Chemical Co. v. Schering Corp., 181 F.2d 160, examined the question with much learning and dismissed the appeal, and it has followed that decision in a later case, Hook v. Hook & Ackerman, Inc., 213 F.2d 122; and Mr. Moore accepts their view. We agree that, as Judge Hastie said in Mor-genstern Chemical Co. v. Schering Corp., supra [181 F.2d 161], our decision was made “without analysis of the problem”; owing to the fact that we mistakenly thought that the question did not demand analysis.
Section 1291 provides for appeals from final judgments of all sorts, necessarily including an appeal from a final judgment denying a permanent injunction. Section 1292 allows appeals from four different kinds of interlocutory orders, of which the first is those “granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.” If these words be read literally, they appear to us indubitably to cover the denial of a motion for a permanent injunction, regardless of what may be the procedure or grounds of the moving party. Indeed, we do not understand that those, who deny any appeal, think otherwise; they base their interpretation upon the theory that the decision does not settle, and indeed does not even tentatively decide, anything about the merits of the claim; all it does is to hold that, upon the facts as shown, the cause must await a trial. Even were that so, it scarcely seems an adequate reason for disregarding language so unconditional as that of the section; but we do not wish to rely upon that. Under Rule 56(c), 28 U.S.C.A., to be granted a summary judgment, the moving party must show, not only that there is no “genuine issue as to any material fact,” but also that he “is entitled to a judgment as a matter of law.” If the decision is based upon these later words, it is obvious that a denial may finally settle a great deal, for usually a later judge will accept the law already laid down in the same action by an earlier judge. Moreover, to reach such a decision the “discretion of the chancellor” may be “invoked”; “equitable considerations” may be “weighed” ; or the “conclusion” may be “reached with respect to the equity of the claim that a restraint should be imposed.” But, even when the denial is because there is a “genuine issue as to any material fact,” the decision is not confined to deciding that the claim must await a trial, although that of course is one of its results. Subdivision (c) requires the judge to pass upon “the pleadings, depositions, and admissions on file, together with the affidavits” ; and subdivisions (d) and (e) not only provide that the affidavits on both sides “shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein”; but also that so far as may be possible all facts shall be decided even though the motion be denied. We cannot escape the belief that the decision involves much more than that it will be better to await' a trial; and this is borne out by a substantial body of decision that the question is the same as that raised by a motion to direct a verdict in an action tried to a jury. For example, in Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 624, 64 S.Ct. 724, 727, 88 L.Ed. 967, the Supreme Court said: “But at least a summary disposition of issues of damage should be on evidence which a jury would not be at liberty to disbelieve and which would require a directed verdict for the moving party.”
It is of course true that the motion is not a substitute for a trial, against the possibility of which courts — ourselves especially — have been solicitous to protest. There always remains the high hurdle over which the plaintiff must leap, who would secure such a judgment: i. e. the record, as it comes before the court, is of necessity limited to evidence that can be put into writing or contained in exhibits; and, as we have never tired of saying, what is left out may be, and frequently is, the most important part. Besides, at least in actions triable to a jury, the handicap is greater even than this; for the court must refuse to decide any issues whose answer admits of reasonable doubt. Therefore, to say, even though the denial has been because there was a “genuine issue of fact,” that nothing is decided, and that nothing can be settled, appears to us an untenable generalization. That everything is not decided is certainly no objection, else denials of preliminary injunctions would also be ex-eluded, and § 1292(1) would be altogether nullified.
Finally, although a preliminary injunction gives the plaintiff relief until the trial, it insures him of nothing more, and he cannot arrange his affairs upon the basis of any protection after the trial. That uncertainty, which may last over a year, may be nearly as serious as the absence of any protection at all. It appears to us therefore that the considerations that presumably moved Congress in 1895 to grant appeals from interlocutory denials of preliminary injunctions— i. e. because it was unfair to leave suitors unprotected pending trial — should be deemed to apply to denials of permanent injunctions. The original omission of any mention of these is readily accounted for by the fact that it was not until 1938, when the New Rules went into effect, that it was possible to move for summary judgment in a Federal Court. Although we are impressed by the high authority of those who take the opposite view, we are not persuaded that we should change our original ruling; and the motion will be denied.
Motion denied.
. Moore, Federal Practice, Vol. 6, pp. 2321, 2322.
. Fishman v. Teter, 7 Cir., 133 F.2d 222, 223; Madeirense Do Brasil S/A v. Stul-man-Emrick Lumber Co., 2 Cir., 147 F.2d 399, 405; Dewey v. Clark, 86 U.S. App.D.C. 137, 180 F.2d 766, 772; Hurd v. Sheffield Steel Corp., 8 Cir., 181 F.2d 269, 271.
. 28 St. at L. 666.
Question: In what state or territory was the case first heard?
01. not
02. Alabama
03. Alaska
04. Arizona
05. Arkansas
06. California
07. Colorado
08. Connecticut
09. Delaware
10. Florida
11. Georgia
12. Hawaii
13. Idaho
14. Illinois
15. Indiana
16. Iowa
17. Kansas
18. Kentucky
19. Louisiana
20. Maine
21. Maryland
22. Massachussets
23. Michigan
24. Minnesota
25. Mississippi
26. Missouri
27. Montana
28. Nebraska
29. Nevada
30. New
31. New
32. New
33. New
34. North
35. North
36. Ohio
37. Oklahoma
38. Oregon
39. Pennsylvania
40. Rhode
41. South
42. South
43. Tennessee
44. Texas
45. Utah
46. Vermont
47. Virginia
48. Washington
49. West
50. Wisconsin
51. Wyoming
52. Virgin
53. Puerto
54. District
55. Guam
56. not
57. Panama
Answer:
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songer_respond1_4_3
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H
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "sub-state government (e.g., county, local, special district)", specifically "bureaucracy providing services". Your task is to determine which specific substate government agency best describes this litigant.
DANIEL R.R., Plaintiff-Appellant, v. STATE BOARD OF EDUCATION, et al., Defendants, El Paso Independent School District, Defendant-Appellee.
No. 88-1279.
United States Court of Appeals, Fifth Circuit.
June 12, 1989.
Reed Martin, Austin, Tex., for plaintiff-appellant.
Sam Sparks, El Paso, Tex., for defendants.
Steven L. Hughes, El Paso, Tex., for El Paso Independent School Dist.
Before THORNBERRY, GEE and POLITZ, Circuit Judges.
GEE, Circuit Judge:
Plaintiffs in this action, a handicapped boy and his parents, urge that a local school district failed to comply with the Education of the Handicapped Act. Specifically, they maintain that a school district’s refusal to place the child in a class with nonhandicapped students violates the Act. The district court disagreed and, after a careful review of the record, we affirm the district court.
I. Background
A. General
In 1975, on a finding that almost half of the handicapped children in the United States were receiving an inadequate education or none at all, Congress passed the Education of the Handicapped Act (EHA or Act). See 20 U.S.C.A. § 1400(b) (West 1988 Supp.); S.Rep. No. 168, 94th Cong., 1st Sess. 8 (1975), reprinted in 1975 U.S.Code Cong. & Admin.News 1425, 1432. Before passage of the Act, as the Supreme Court has noted, many handicapped children suffered under one of two equally ineffective approaches to their educational needs: either they were excluded entirely from public education or they were deposited in regular education classrooms with no assistance, left to fend for themselves in an environment inappropriate for their needs. Hendrick Hudson District Board of Education v. Rowley, 458 U.S. 176, 191, 102 S.Ct. 3034, 3043, 73 L.Ed.2d 690, 702 (1982) (citing H.R.Rep. No. 332, 94th Cong., 1st Sess. 2 (1975); S.Rep. No. 168, 94th Cong., 1st. Sess. 8 (1975) 1975 U.S.Code Cong. & Admin.News 1432). To entice state and local school officials to improve upon these inadequate methods of educating children with special needs, Congress created the EHA, having as its purpose providing handicapped children access to public education and requiring states to adopt procedures that will result in individualized consideration of and instruction for each handicapped child. Id. at 192, 102 S.Ct. at 3043, 73 L.Ed.2d at 703.
The Act is largely procedural. It mandates a “free appropriate public education” for each handicapped child and sets forth procedures designed to ensure that each child’s education meets that requirement. 20 U.S.C.A. §§ 1412(1) and 1415(a)-{e). School officials are required to determine the appropriate placement for each child and must develop an Individualized Educational Plan (IEP) that tailors the child’s education to his individual needs. The child’s parents are involved at all stages of the process. See generally § 1415(b). In addition, the Act requires that handicapped children be educated in regular education classrooms, with nonhandicapped students —as opposed to special education classrooms with handicapped students only — to the greatest extent appropriate. § 1412(5)(B). Educating a handicapped child in a regular education classroom with nonhandicapped children is familiarly known as “mainstreaming,” and the mainstreaming requirement is the source of the controversy between the parties before us today.
B. Particular
Daniel R. is a six year old boy who was enrolled, at the time this case arose, in the El Paso Independent School District (EP-ISD). A victim of Downs Syndrome, Daniel is mentally retarded and speech impaired. By September 1987, Daniel’s developmental age was between two and three years and his communication skills were slightly less than those of a two year old.
In 1985, Daniel’s parents, Mr. and Mrs. R., enrolled him in EPISD’s Early Childhood Program, a half-day program devoted entirely to special education. Daniel completed one academic year in the Early Childhood Program. Before the 1986-87 school year began, Mrs. R. requested a new placement that would provide association with nonhandicapped children. Mrs. R. wanted EPISD to place Daniel in Pre-kin-dergarten — a half-day, regular education class. Mrs. R. conferred with Joan Norton, the Pre-kindergarten instructor, proposing that Daniel attend the half-day Pre-kinder-garten class in addition to the half-day Early Childhood class. As a result, EP-ISD s Admission, Review and Dismissal (ARD) Committee met and designated the combined regular and special education program as Daniel’s placement.
This soon proved unwise, and not long into the school year Mrs. Norton began to have reservations about Daniel’s presence in her class. Daniel did not participate without constant, individual attention from the teacher or her aide, and failed to master any of the skills Mrs. Norton was trying to teach her students. Modifying the Pre-kindergarten curriculum and her teaching methods sufficiently to reach Daniel would have required Mrs. Norton to modify the curriculum almost beyond recognition. In November 1986, the ARD Committee met again, concluded that Pre-kindergarten was inappropriate for Daniel, and decided to change Daniel’s placement. Under the new placement, Daniel would attend only the special education, Early Childhood class; would eat lunch in the school cafeteria, with nonhandicapped children, three days a week if his mother was present to supervise him; and would have contact with nonhandicapped students during recess. Believing that the ARD had improperly shut the door to regular education for Daniel, Mr. and Mrs. R. exercised their right to a review of the ARD Committee’s decision.
As the EHA requires, Mr. and Mrs. R. appealed to a hearing officer who upheld the ARD Committee’s decision. See § 1415(b)(2). After a hearing which consumed five days of testimony and produced over 2500 pages of transcript, the hearing officer concluded that Daniel could not participate in the Pre-kindergarten class without constant attention from the instructor because the curriculum was beyond his abilities. In addition, the hearing officer found, Daniel was receiving little educational benefit from Pre-kindergarten and was disrupting the class — not in the ordinary sense of the term, but in the sense that his needs absorbed most of the teacher’s time and diverted too much of her attention away from the rest of the class. Finally, the instructor would have to downgrade 90 to 100 percent of the Pre-kinder-garten curriculum to bring it to a level that Daniel could master. Thus, the hearing officer concluded, the regular education, Pre-kindergarten class was not the appropriate placement for Daniel.
Dissatisfied with the hearing officer’s decision, Mr. and Mrs. R. proceeded to the next level of review by filing this action in the district court. See § 1415(e). Although the EHA permits the parties to supplement the administrative record, Daniel’s representatives declined to do so; and the court conducted its de novo review on the basis of the administrative record alone. The district court decided the case on cross motions for summary judgment. Relying primarily on Daniel’s inability to receive an educational benefit in regular education, the district court affirmed the hearing officer’s decision.
Mr. and Mrs. R. again appeal, but before we turn to the merits of the appeal we must pause to consider an issue that neither of the parties raised but which we must consider on our own initiative.
II. Mootness
Two years passed while this case wound its way through the course of administrative and judicial review procedures. Several events that occurred during these two years might have rendered the case moot. First, the placement and IEP at issue today set forth Daniel's educational plan for the 1986-87 school year, one long past. Indeed, counsel informed us at oral argument that EPISD had reevaluated Daniel in May 1988, formulating a new IEP for the 1988-89 school year as a result. The placement and IEP upon which Daniel bases his claim have been or will, at the close of this litigation, be superseded. Second, we may hope that Daniel’s development has not entirely stagnated while these proceedings have been pending, although the record does not contain the results of the May 1988 evaluation. We therefore cannot know how much Daniel has developed over the past two years, nor can we divine whether Daniel’s development has rendered Pre-kindergarten any more or less appropriate for him now than it was when EPISD reconsidered his placement. It may well be that neither Pre-kin-dergarten, nor Early Childhood, nor any mix of the two would be appropriate for Daniel at this time. Third, EPISD informed us at oral argument that Daniel is no longer enrolled in the Texas public school system. Dissatisfied with EPISD’s 1988 evaluation and its 1988-89 IEP, Daniels’ parents chose to send Daniel to a private school, where he remained as of the time of oral argument. Although neither of the parties raised the issue, these events force us to pause momentarily to consider whether the case continues to present a live case or controversy.
A case may circumvent the mootness doctrine if the conduct about which the plaintiff originally complained is “capable of repetition, yet evading review.” Honig v. Doe, 484 U.S. 305, -, 108 S.Ct. 592, 600, 98 L.Ed.2d 686, 703 (1988) (quoting Murphy v. Hunt, 455 U.S. 478, 482, 102 S.Ct. 1181, 1183, 71 L.Ed.2d 353 (1982)); Valley Construction Co. v. Marsh, 714 F.2d 26, 28 (5th Cir.1983) (quoting Southern Pacific Terminal Co. v. I.C.C., 219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310 (1911)). Because there is a reasonable expectation that the conduct giving rise to this suit will recur every school year, yet evade review during the nine-month academic term, we conclude that the case is not moot.
Conduct is capable of repetition if there is a reasonable expectation or a demonstrated probability that the same controversy will recur. Honig, 484 U.S. at -& n. 7, 108 S.Ct. at 603 & n. 7, 98 L.Ed.2d at 704 & n. 7 (citations omitted); Valley Construction Co., 714 F.2d at 28. The conduct about which Daniel originally complained is EPISD’s refusal to “mainstream” him. EPISD is unwilling to mainstream a child who cannot enjoy an academic benefit in regular education. Daniel’s parents insist that EPISD must mainstream Daniel even if he cannot thrive academically in regular education. According to Mr. and Mrs. R. EPISD should mainstream Daniel solely to provide him with the company of nonhandi-capped students. Each side of this controversy steadfastly adheres to its perception of the EHA’s mainstreaming requirement. Given the parties’ irreconcilable views on the issue, whether and to what extent to mainstream Daniel will be an issue every time EPISD prepares a new placement or IEP or proposes to change an existing one. The parties have a reasonable expectation of confronting this controversy every year that Daniel is eligible for public education.
Neither the expiration of the 1986-87 IEP, nor Daniel’s development over the past two years, nor the new IEP change our conclusion. Certainly, the controversy whether the 1986-87 placement and IEP comply with the EHA’s mainstreaming requirement is not likely to recur. The primary controversy, however, is the extent of EPISD’s mainstreaming obligation, a controversy that is reasonably likely to recur as Daniel develops and as EPISD prepares placements and IEPs for each new school year. Nor does Mr. and Mrs. R.’s recent decision to remove Daniel from the EPISD system render the case moot. Although Daniel no longer attends public school, he remains a citizen of the State of Texas and, thus, remains entitled to a free appropriate public education in the state. Given Daniel’s continued eligibility for public educational services under the EHA, the mainstreaming controversy remains capable of repetition. See Honig, 484 U.S. at - -, 108 S.Ct. at 602-03, 98 L.Ed.2d at 703-04.
This recurring controversy will evade review during the effective period of each IEP. A placement and an IEP cover an academic year, a nine month period. The Supreme Court has observed that administrative and judicial review of an IEP is “ponderous” and usually will not be complete until a year after the IEP has expired. School Committee of the Town of Burlington v. Department of Education of the Commonwealth of Massachusetts, 471 U.S. 359, 370, 105 S.Ct. 1996, 2002, 85 L.Ed.2d 385, 395 (1985); see Rowley, 458 U.S. at 186 n. 9, 102 S.Ct. at 3041 n. 9, 73 L.Ed.2d at 699 n. 9 (noting that judicial and administrative review of an IEP “invariably” takes, more than nine months.). In Rowley, the Court held that the controversy was capable of repetition yet evading review even though the IEP should have expired two years before the case reached the court. Rowley, 458 U.S. at 186 n. 9, 102 S.Ct. at 3041 n. 9, 73 L.Ed.2d at 699 n. 9. Here, Daniel exhausted his state administrative remedies and, then, filed suit in the district court. The ponderous administrative and judicial review did, as the Court predicted, outlive Daniel’s placement and IEP, allowing them to evade review. As the case presents a live controversy, we turn to the merits of Daniel’s appeal.
III. Procedural Violations
At the heart of the EHA lie detailed procedural provisions, processes designed to guarantee that each handicapped student’s education is tailored to his unique needs and abilities. The EHA, and the regulations promulgated pursuant to it, contain procedures for determining whether the appropriate placement is regular or special education, for preparing an IEP once the child is placed, for changing the placement or the IEP, and for removing the child from regular education. 20 U.S.C.A. §§ 1412 and 1415; 34 C.F.R. §§ 300.300— 300.576 (1986). The Act’s procedural guarantees are not mere procedural hoops through which Congress wanted state and local educational agencies to jump. Rather, “the formality of the Act’s procedures is itself a safeguard against arbitrary or erroneous decisionmaking.” Jackson v. Franklin County School Board, 806 F.2d 623, 630 (5th Cir.1986). Indeed, a violation of the EHA’s procedural guarantees may be a sufficient ground for holding that a school system has failed to provide a free appropriate public education and, thus, has violated the Act. Id. at 629; Hall v. Vance County Board of Education, 774 F.2d 629, 635 (4th Cir.1985). Daniel raises five claims of procedural error, each without merit.
First, Daniel contends that EPISD failed to give proper notice of a proposed change in his IEP, an assertion that misconstrues the nature of EPISD’s proposed action. The regulations that implement the EHA require school officials to give written notice before “propos[ing] to... change the identification, evaluation or educational placement of the child...” 34 C.F.R. § 300.504(a)(1) (1986). The regulations also prescribe the content of the notice: it must include “a description of the action proposed or refused by the agency, an explanation of why the agency proposes or refuses to take the action, and a description of any options the agency considered and the reasons why those options were rejected.” Id. § 300.505(a)(1). Daniel complains that EPISD did not provide notice that it proposed to change his IEP and that the notice which EPISD did provide stated that it would not change the IEP. Although Daniel’s description of the notice is accurate, his conclusion that the notice does not conform to the EHA’s regulations is incorrect.
The notice that EPISD sent to Daniel’s parents apprised them of the precise action which EPISD proposed to take: a change in Daniel’s placement. Daniel’s placement was a mixed regular and special education program, with time allocated approximately equally between the two environments. Daniel’s IEP, in contrast, outlined his needs and goals for the academic year; simply, it was a list of what EPISD and Daniel's parents hoped Daniel would achieve. EPISD did not propose merely to alter Daniel’s IEP, scaling back its expectations or altering its objectives for Daniel’s progress. Instead, EPISD proposed the more drastic step of removing Daniel from the regular education class, thus changing his placement. The notice that EPISD provided accurately informed Mr. and Mrs. R. of EPISD’s proposal. EPISD sent Mrs. R. its form “Notice of Admission, Review and Dismissal (ARD) Committee Meeting.” On the notice form, EPISD indicated that it would review Daniel’s progress, that it would “consider the appropriate educational placement,” and that the options it was considering included a regular classroom and a self-contained classroom. Thus, EP-ISD’s notice adequately warned Mr. and Mrs. R. that the appropriate placement for their son was at issue and that EPISD was considering placing Daniel in a self-contained classroom.
EPISD did indicate, as Daniel contends, that it was not considering a change in Daniel’s IEP. EPISD’s explanation of its plans did not, however, mislead Mr. and Mrs. R. or fail to give notice of EPISD’s proposal. EPISD did not propose to change Daniel’s IEP. Indeed, an indication on the notice form that EPISD proposed to alter the IEP could have been misleading. As the notice form accurately notified Mr. and Mrs. R. of the proposed change in placement, we find no procedural defect in EPISD’s notice.
Second, ignoring the events surrounding EPISD’s decision, Daniel complains that EPISD did not evaluate him before removing him from regular education. According to Daniel, school officials must reevaluate a handicapped student before removing him from regular education. See 34 C.F.R. § 104.35(a). EP-ISD’s failure to evaluate Daniel does not constitute a reason to reverse this case. In the “Stipulations and Agreements” submitted to the hearing officer, Daniel stated that he did not contest EPISD’s current evaluation. Furthermore, Daniel’s parents refused to consent to a new evaluation because they felt it was not necessary. When a student and his parents agree with the school’s current evaluation and refuse a new evaluation, they can scarcely be heard to complain of a procedural violation based upon the school’s failure to conduct a new evaluation.
Third, Daniel asserts that EPISD failed to provide a continuum of educational services. The EHA’s regulations require school officials to “insure that a continuum of alternative placements is available to meet the needs of handicapped children for special education and related services.” 34 C.P.R. § 300.551(a). The continuum must include alternative placements and supplementary services in conjunction with regular class placement. Id. § 300.551(b). In its effort to find the appropriate placement for Daniel, EPISD experimented with a variety of alternative placements and supplementary services. First, EPISD attempted a mixed placement that allocated Daniel’s time equally between regular and special education. The regular education instructor attempted to modify and supplement the regular education curriculum to meet Daniel’s needs. When EPISD concluded that Daniel was not thriving in this environment, it proposed a different combination of educational experiences. Under the new plan, Daniel would spend all of his academic time in special education but would mix with nonhandicapped children during lunch and recess. EPISD has provided a continuum of alternative placements and has demonstrated an admirable willingness to experiment with and to adjust Daniel’s placement to arrive at the appropriate mix of educational environments.
Fourth, Daniel maintains that EP-ISD removed him from the regular classroom for disciplinary reasons but failed to follow the EHA’s procedure for removals based on disciplinary problems. Again, Daniel has misconstrued the events leading to this appeal. The hearing officer found that
[wjhile there is no evidence that Daniel’s behavior in Pre-kindergarten is disruptive in the ordinary sense of the term, it is obvious that the amount of attention he requires is, nevertheless, disruptive by so absorbing the efforts and energy of the staff as to impair the quality of the entire program for the other children.
This finding in no way reflects a disciplinary problem. Thus, EPISD’s decision to remove Daniel from regular education did not trigger the EHA’s disciplinary procedures.
Finally, Daniel suggests that EP-ISD did not follow the EHA’s procedure for removing a child from regular education. The EHA provides that a child shall be removed from a regular classroom only if education in the regular classroom, with the use of supplementary aids and services, cannot be achieved satisfactorily. § 1412(5)(B). According to Daniel, EPISD never attempted to use any supplementary aids and services in Pre-kindergarten and, thus, cannot demonstrate that education in the regular classroom cannot be achieved satisfactorily. Daniel misunderstands the nature of this issue; it relates to the substantive question whether and to what extent Daniel should be mainstreamed, not to the procedural requirements of the EHA. Moreover, even if this were a procedural question, EPISD met the requirement of providing supplementary aids and services. The record indicates that the Pre-kinder-garten teacher made genuine efforts to modify and supplement her teaching program to reach Daniel. Unfortunately, even with the teacher’s assistance, Daniel could not thrive in regular education. As we find no merit to Daniel’s claims of procedural error, we turn to his substantive claims.
IV. Substantive Violations
A. Mainstreaming Under the EHA
The cornerstone of the EHA is the “free appropriate public education.” As a condition of receiving federal funds, states must have “in effect a policy that assures all handicapped children the right to a free appropriate public education.” § 1412(1). The Act defines a free appropriate public education in broad, general terms without dictating substantive educational policy or mandating specific educational methods. In Rowley, the Supreme Court fleshed out the Act’s skeletal definition of its principal term: “a ‘free appropriate public education’ consists of educational instruction specially designed to meet the unique needs of the handicapped child, supported by such services as are necessary to permit the child ‘to benefit’ from the instruction.” Rowley, 458 U.S. at 188-89, 102 S.Ct. at 3042, 73 L.Ed.2d at 701. The Court’s interpretation of the Act’s language does not, however, add substance to the Act’s vague terms; instruction specially designed to meet each student’s unique needs is as imprecise a directive as the language actually found in the Act.
The imprecise nature of the EHA’s mandate does not reflect legislative omission. Rather, it reflects two deliberate legislative decisions. Congress chose to leave the selection of educational policy and methods where they traditionally have resided— with state and local school officials. Rowley, 458 U.S. at 207, 102 S.Ct. at 3051, 73 L.Ed.2d at 712-13. In addition, Congress’s goal was to bring handicapped children into the public school system and to provide them with an education tailored to meet their particular needs. Id. at 189, 102 S.Ct. at 3042, 73 L.Ed.2d at 701. Such needs span the spectrum of mental and physical handicaps, with no two children necessarily suffering the same condition or requiring the same services or education. Id. at 189, 102 S.Ct. at 3042, 73 L.Ed.2d at 701. Schools must retain significant flexibility in educational planning if they truly are to address each child’s needs. A congressional mandate that dictates the substance of educational programs, policies and methods would deprive school officials of the flexibility so important to their tasks. Ultimately, the Act mandates an education for each handicapped child that is responsive to his needs, but leaves the substance and the details of that education to state and local school officials.
In contrast to the EHA’s vague mandate for a free appropriate public education lies one very specific directive prescribing the educational environment for handicapped children. Each state must establish
procedures to assure that, to the maximum extent appropriate, handicapped children... are educated with children who are not handicapped, and that special education, separate schooling or other removal of handicapped children from the regular educational environment occurs only when the nature or severity of the handicap is such that education in regular classes with the use of supplementary aids and services cannot be achieved satisfactorily.
§ 1412(5)(B). With this provision, Congress created a strong preference in favor of mainstreaming. Lachman v. Illinois State Board of Education, 852 F.2d 290, 295 (7th Cir.), cert. denied, — U.S. -, 109 S.Ct. 308, 102 L.Ed.2d 327 (1988); A.W. v. Northwest R-1 School District, 813 F.2d 158, 162 (8th Cir.), cert. denied, — U.S. -, 108 S.Ct. 144, 98 L.Ed.2d 100 (1987); Roncker v. Walter, 700 F.2d 1058, 1063 (6th Cir.), cert. denied, 464 U.S. 864, 104 S.Ct. 196, 78 L.Ed.2d 171 (1983).
By creating a statutory preference for mainstreaming, Congress also created a tension between two provisions of the Act. School districts must both seek to mainstream handicapped children and, at the same time, must tailor each child's educational placement and program to his special needs. §§ 1412(1) and (5)(B). Regular classes, however, will not provide an education that accounts for each child’s particular needs in every case. The nature or severity of some children's handicaps is such that only special education can address their needs. For these children, mainstreaming does not provide an education designed to meet their unique needs and, thus, does not provide a free appropriate public education. As a result, we cannot evaluate in the abstract whether a challenged placement meets the EHA’s mainstreaming requirement. “Rather, that laudable policy objective must be weighed in tandem with the Act’s principal goal of ensuring that the public schools provide handicapped children with a free appropriate public education.” Lachman, 852 F.2d at 299; Wilson v. Marana Unified School District, 735 F.2d 1178, 1183 (9th Cir.1984) (citations omitted).
Although Congress preferred education in the regular education environment, it also recognized that regular education is not a suitable setting for educating many handicapped children. Rowley, 458 U.S. at 181 n. 4, 102 S.Ct. at 3038 n. 4, 73 L.Ed.2d at 696 n. 4; Lachman, 852 F.2d at 295. Thus, the EHA allows school officials to remove a handicapped child from regular education or to provide special education if they cannot educate the child satisfactorily in the regular classroom. § 1412(5)(B). Even when school officials can mainstream the child, they need not provide for an exclusively mainstreamed environment; the Act requires school officials to mainstream each child only to the maximum extent appropriate. Id. In short, the Act’s mandate for a free appropriate public education qualifies and limits its mandate for education in the regular classroom. Schools must provide a free appropriate public education and must do so, to the maximum extent appropriate, in regular education classrooms. But when education in a regular classroom cannot meet the handicapped child’s unique needs, the presumption in favor of mainstreaming is overcome and the school need not place the child in regular education. See Lachman, 852 F.2d at 295; A.W, 813 F.2d at 163; Roncker, 700 F.2d at 1063. The Act does not, however, provide any substantive standards for striking the proper balance between its requirement for mainstreaming and its mandate for a free appropriate public education.
B. Determining Compliance With the Mainstreaming Requirement
Determining the contours of the mainstreaming requirement is a question of first impression for us. In the seminal interpretation of the EHA, the Supreme Court posited a two-part test for determining whether a school has provided a free appropriate public education: “First, has the State complied with the procedures set forth in the Act. And second, is the individualized educational program developed through the Act’s procedures reasonably calculated to enable the child to receive educational benefits.” Rowley, 458 U.S. at 206-07, 102 S.Ct. at 3051, 73 L.Ed.2d at 712 (footnotes omitted). Despite the attractive ease of this two part inquiry, it is not the appropriate tool for determining whether a school district has met its mainstreaming obligations. In Rowley, the handicapped student was placed in a regular education class; the EHA’s mainstreaming requirement was not an issue presented for the Court’s consideration. Indeed, the Court carefully limited its decision to the facts before it, noting that it was not establishing a single test that would determine “the adequacy of educational benefits conferred upon all children covered by the Act.” Id. at 202, 102 S.Ct. at 3049, 73 L.Ed.2d at 709. Faced with the same issue we face today, both the Sixth and the Eighth Circuit concluded that the Rowley test was not intended to decide mainstreaming issues. A.W., 813 F.2d at 163; Roncker, 700 F.2d at 1063. Moreover, both Circuits noted that the Rowley Court’s analysis is ill suited for evaluating compliance with the mainstreaming requirement. A.W., 813 F.2d at 163; Roncker, 700 F.2d at 1062. As the Eighth Circuit explained, the Rowley test assumes that the state has met all of the requirements of the Act, including the mainstreaming requirement. A.W., 813 F.2d at 163 n. 7 (citations omitted). The Rowley test thus assumes the answer to the question presented in a mainstreaming case. Given the Rowley Court’s express limitation on its own opinion, we must agree with the Sixth and Eighth Circuits that the Rowley test does not advance our inquiry when the question presented is whether the Act’s mainstreaming requirement has been met.
Although we have not yet developed a standard for evaluating mainstreaming questions, we decline to adopt the approach that other circuits have taken. In Roncker, visiting the same question which we address today, the Sixth Circuit devised its own test to determine when and to what extent a handicapped child must be mainstreamed. According to the Roncker court,
[t]he proper inquiry is whether a proposed placement is appropriate under the Act.... In a case where the segregated facility is considered superior, the court should determine whether the services which make that placement superior could be feasibly provided in a non-segregated setting. If they can, the placement in the segregated school would be inappropriate under the Act.
Roncker, 700 F.2d at 1068 (citation and footnote omitted); accord, A.W., 813 F.2d at 163. We respectfully decline to follow the Sixth Circuit’s analysis. Certainly, the Roncker test accounts for factors that are important in any mainstreaming case. We believe, however, that the test necessitates too intrusive an inquiry into the educational policy choices that Congress deliberately left to state and local school officials. Whether a particular service feasibly can be provided in a regular or special education setting is an administrative determination that state and local school officials are far better qualified and situated than are we to make. Moreover, the test makes little reference to the language of the EHA. Yet, as we shall see, we believe that the language of the Act itself provides a workable test for determining whether a state has complied with the Act’s mainstreaming requirement.
Nor do we find the district court’s approach to the issue the proper tool for analyzing the mainstreaming obligation. Relying primarily on whether Daniel could receive an educational benefit from regular education, the district court held that the special education class was the appropriate placement for Daniel. According to the court, “some children, even aided by supplemental aids and services in a regular education classroom, will never receive an educational benefit that approximates the level of skill and comprehension acquisition of nonhandicapped children.” In these cases, regular education does not provide the child an appropriate education and the presumption in favor of mainstreaming is overcome. As no aspect of the Pre-kinder-garten curriculum was within Daniel’s reach, EPISD was not required to mainstream him. Given the nature and severity of Daniel’s handicap at the time EPISD placed him, we agree with the district court’s conclusion that EPISD was not required to mainstream Daniel. We disagree, however, with the court’s analysis of the mainstreaming issue, finding it troublesome for two reasons: first, as a prerequisite to mainstreaming, the court would require handicapped children to learn at approximately the same level as their nonhan-dicapped classmates. Second, the court places too much emphasis on the handicapped student’s ability to achieve an educational benefit.
First, requiring as a prerequisite to mainstreaming that the handicapped child be able to learn at approximately the same level as his nonhandicapped classmates fails to take into account the principles that the Supreme Court announced in Rowley. Our public school system tolerates a wide range of differing learning abilities; at the same time, it provides educational opportunities that do not necessarily account for all of those different capacities to learn. As the Rowley Court noted, “[t]he educational opportunities provided by our public school systems undoubtedly differ from student to student, depending upon a myriad of factors that might affect a particular student’s ability to assimilate information presented in the classroom.” Rowley, 458 U.S. at 198, 102 S.Ct. at 3047, 73 L.Ed.2d at 707.
With the EHA, Congress extended the states’ tolerance of educational differences to include tolerance of many handicapped children. States must accept in their public schools children whose abilities and needs differ from those of the average student. Moreover, some of those students’ abilities are vastly different from those of their nonhandicapped peers:
[t]he Act requires participating states to educate a wide spectrum of handicapped children, from the marginally hearing impaired to the profoundly retarded and palsied. It is clear that the benefits obtainable by children at one end of the spectrum will differ dramatically from those obtainable by children at the other end, with infinite variations in between. One child may have little difficulty competing successfully with nonhandicapped children while another child may encounter great difficulty in acquiring even the most basic of self maintenance skills.
Rowley, 458 U.S. at 202, 102 S.Ct. at 3048, 73 L.Ed.2d at 709. The Rowley court rejected the notion that the EHA requires states to provide handicapped children with educational opportunities that are equal to those provided to nonhandicapped students. Id. at 189, 102 S.Ct. at 3042, 73 L.Ed.2d at 707. Thus, the Court recognized that the Act draws handicapped children into the regular education environment but, in the nature of things, cannot always offer them the same educational opportunities that regular education offers nonhandicapped children. States must tolerate educational differences; they need not perform the impossible: erase those differences by taking steps to equalize educational opportunities. As a result, the Act accepts the notion that handicapped students will participate in regular education but that some of them will not benefit as much as nonhandicapped students will. The Act requires states to tolerate a wide range of educational abilities in their schools and,
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "sub-state government (e.g., county, local, special district)", specifically "bureaucracy providing services". Which specific substate government agency best describes this litigant?
A. Police, Sheriff
B. Fire
C. Taxation
D. Human Services/Welfare/Health Care
E. Streets and Highways
F. Transportation
G. Election Processes
H. Education - Not School Board
I. Other Service Activity
J. not ascertained
Answer:
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songer_respond1_5_3
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D
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "state government (includes territories & commonwealths)", specifically "executive/administrative". Your task is to determine which specific state government agency best describes this litigant.
FREEMAN v. SMITH.
No. 6923.
Circuit Court of Appeals, Ninth Circuit.
Dec. 12, 1932.
H. L. Faulkner, of Juneau, Alaska, and Lund & Lund, of Seattle, Wash., for appellant.
John Rustgard, Atty. Gen., of Alaska, for appellee.
Pillsbury, Madison & Sutro, F. D. Madison and L. B. Groezinger, all of San Francisco, Cal., amici curias.
Before WILBUR and SAWTELLE, Circuit Judges, and CAYANAII, District Judge.
WILBUR, Circuit Judge.
This is a second appeal in this case. The former one was from a decree of dismissal after the court had sustained a demurrer to the bill of complaint based upon the ground that the facts alleged did not state a cause of action. Freeman v. Smith, 44 F.(2d) 703, 704. After the ease had been remanded to the lower court, the defendant, Smith, treasurer of the territory of Alaska, filed an answer denying the allegation of the bill that the average catch of salmon for each year by members of the trolling fleet did not exceed $500 and alleging “that trailers who, during the entire season trolled for salmon in the territorial waters of Alaska, caught during each such seasons an average of more than $3,000 worth of salmon in such waters over and above expenses of operation,” and alleging “that an experienced trailer devoting his time to trolling for salmon within the territorial waters of Alaska, will each season earn not less than $3,000 over and above expenses of operation.” Evidence was adduced upon this issue and the trial court rendered a decree denying the plaintiff any relief. It appears from the opinion of the trial court, which is incorporated in the transcript, that the court based its conclusion upon the inability of the plaintiff to prove the average annual earnings of those fishermen who trolled in Alaskan waters. Eight or ten fishermen testified that their average net earnings as salmon trailers had been approximately $500 per annum, or less. The appellee introduced evidence that certain fishermen had made more than $500 per annum; one of the defendant’s witnesses testified “that approximately he made something like around $1,000 a year above expenses; that tjie average for the trolling fleet would be below this average.”
• It is argued .by the app ellee that the decision of this court upon the former appeal is no longer controlling in that there was a failure to prove the above mentioned allegation of the bill which had been admitted on the former appeal. The appellee, therefore, reargues the questions which were argued and submitted on the previous hearing. The basic question presented on the former appeal was the effect of the Act of Congress adopted June 6, 1924 (43 Stat. 464 [48 USCA § 221 et seq.] ).upon the power of a territorial Legislature by its act of 1929 (Session Laws of Alaska, 1929,' c. 96, p. 192), to impose a fishing license tax of $250 upon all persons resident or nonresident who had not resided in the territory of Alaska for one year previous to their application for the license to troll for fish, while at the same time imposing a tax’ of only $1 for the same fishing privilege upon residents of Alaska who had so resided in the territory for a year or more. Upon this question we held that the Act of Congress of June 6, 1924, above referred to (43 Stat. 464), granted or reserved the right to all citizens of the United States to fish within areas where such fishing was not prohibited by regulation adopted by the Secretary of Commerce. This decision was based upon the proviso contained in section 1 of the act (48 USCA § 222) which is as follows: “Provided, That every such regulation made by the Secretary of. Commerce shall be of general application within the particular area to which it applies, and that no exclusive or several right of. fishery shall be granted therein, nor shall any citizen of the United States be denied the right to take, prepare, cure, or preserve fish or shellfish in any area of the waters of Alaska where fishing is permitted by the Secretary of Commerce.”
We quote from our opinion, written by Judge Rudkin on the former appeal, as follows : “It will thus be seen that the right to take, prepare, cure, or preserve fish or shellfish in any area of the waters of Alaska, where fishing is permitted by the Secretary of Commerce, is guaranteed to every citizen of the 'United States without reservation, whether he be a resident of Alaska or not; and the right so granted cannot be impaired or destroyed by the legislative assembly of the territory. If it can, the grant is an idle and empty one at best. Nor is the right thus conferred in anywise impaired by the last section of the act, which provides in general terms that nothing therein contained shall abrogate or curtail the powers granted the territorial Legislature to impose taxes or licenses nor limit or curtail any powers granted the territorial Legislature by the Organic Act.”
Further, from our opinion: “The naked power to impose taxes and licenses, or to make reasonable discrimination between residents and nonresidents, is not involved.”
Appellee on this appeal attacks the conclusion reached on the former appeal and argues that as the territorial Legislature had power to impose the taxes, fix license fees, the question of whether or not such fees are reasonable cannot be considered by a court. This contention is based upon section 8 of the Act of June 6, 1924 (48 USCA § 228), which expressly provides that nothing contained in the act should deprive the Alaskan Legislature of power to levy taxes and license fees and that nothing in the act contained should restrict the legislative power conferred on it by the Organic Act of .1912. The Organic Act of 1912 (section 3, 37 Stat. 512 [48 USCA § 24]), as we have seen, prohibited the territorial Legislature from later altering, amending, or modifying or repealing laws relating to game and fishing in Alaska. Auk Bay Salmon Canning Co. v. U. S. (C. C. A.) 300 F. 907. This power was reserved to Congress. The exercise of that right by Congress in subsequent legislation could not have the effect of altering or modifying the Organic Act for the reason that by the terms of the Organic Act itself this power was reserved to Congress.» The exercise of that right by Congress of course would not change or modify the powers of the territorial Legislature which was denied that right by the Organic Act. Nor would the fact that the Congress granted the right to all citizens of the United States to fish in the territorial waters of Alaska where fishing was allowed by regulations of the Secretary of Commerce alter or amend the right of the territorial Legislature to levy taxes or license fees. That power when exercised by the territorial Legislature was necessarily by the Organic Act itself so limited that it could not be used to nullify an act of Congress granting fishing rights. Consequently it makes no difference whether the right of a citizen of the United States to fish in Alaskan waters was granted before or after the Organic Act. In either event the right of taxation granted to the territorial Legislature could not be so unreasonably exercised as to deprive a citizen of the United States of a right granted by Congress. Although such rights were subject to reasonable taxation the power of taxation could not he used to deprive a citizen of a right granted by Congress nor to unreasonably restrict that right. This much we held, in effect, on the former appeal where section 8, supra, was construed. In that regard we are not only bound by our previous decásion which has become the law of the case [Roberts v. Cooper, 20 How. (61 U. S.) 467, 15 L. Ed. 969; Montana Mining Co. v. St. Louis Mining Co. (C. C. A. 9), 147 F. 897, 903; United States v. Axman (C. C. A. 9) 193 F. 644, 649; Bodkin v. Edwards (C. C. A. 9) 265 F. 621], but wo reaffirm that conclusion.
The question then arises, Is the license tax in question an unreasonable tax ? On the previous appeal we concluded that the exaction of 50 per cent, of the not receipts of the average troller as a license fee was unreasonable and violative of the right granted by Congress to fish in Alaskan waters. We go a step further on the present appeal and hold that the imposition of a license fee of $250 upon all fishermen who* fish by trolling in Alaskan waters, regardless of whether they fish for one hour or one year, and regardless of the catch, is an infringement of the right to fish granted by Congress (43 Stat. 464, supra) notwithstanding the fact, if it he a fact, as alleged in the answer, that skillful fishermen who devote their entire time to fishing during the entire fishing season, can catch fish to the value of $3,000.
In our opinion on the previous appeal, wo stated that the right of the territorial Legislature to make reasonable discrimination between residents and nonresidents, was not involved in our conclusion therein which was based upon the unreasonableness of the lisenee fee. The question of the right of the territorial Legislature to discriminate between citizens of the United States who are residents and those who are nonresidents of Alaska, where Congress has expressly granted a right to all citizens of the United States to fish in Alaskan waters unless prohibited by regulations of the Secretary of Commerce, is involved in the case, but in view of our conclusion that the license tax is an unreasonable abridgement of the right of a citizen of the United States, it is unnecessary to consider the discriminatory provisions except as they tend to illustrate the unreasonableness of requiring so large an amount to be paid by nonresidents for exercising the same right afforded to residents by the payment of only one l/250th of that amount. The decision of tho Supreme Court (Haavik v. Alaska Packers’ Ass’n, 263 U. S. 510, 44 S. Ct. 177, 68 L. Ed. 414) holding that the territorial Legislature could discriminate between residents and nonresidents in fixing license fees, was rendered before the enactment of the act of Congress now under consideration granting rights to all citizens to fish in areas designated by the Secretary of Commerce for that purpose. It is, therefore, not decisive of the right of the territorial Legislature to so discriminate between citizens of the United States who are residents and those who are nonresidents of Alaska where both have been granted a right by act of Congress.
The decree is reversed and the trial court is directed to enter a decree permanently enjoining the defendant from enforcing the license fee of $250 fixed by the statute of Alaska in question.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "state government (includes territories & commonwealths)", specifically "executive/administrative". Which specific state government agency best describes this litigant?
A. Governor
B. Attorney General
C. Secretary of State
D. Other Administrative Officer NOT detailed below
E. not ascertained
Answer:
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sc_caseorigin
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073
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the court in which the case originated. Focus on the court in which the case originated, not the administrative agency. For this reason, if appropiate note the origin court to be a state or federal appellate court rather than a court of first instance (trial court). If the case originated in the United States Supreme Court (arose under its original jurisdiction or no other court was involved), note the origin as "United States Supreme Court". If the case originated in a state court, note the origin as "State Court". Do not code the name of the state. The courts in the District of Columbia present a special case in part because of their complex history. Treat local trial (including today's superior court) and appellate courts (including today's DC Court of Appeals) as state courts. Consider cases that arise on a petition of habeas corpus and those removed to the federal courts from a state court as originating in the federal, rather than a state, court system. A petition for a writ of habeas corpus begins in the federal district court, not the state trial court. Identify courts based on the naming conventions of the day. Do not differentiate among districts in a state. For example, use "New York U.S. Circuit for (all) District(s) of New York" for all the districts in New York.
UNITED STATES v. TINKLENBERG
No. 09-1498.
Argued February 22, 2011 —
Decided.May 26, 2011
Breyer, J., delivered the opinion of the Court, in which Kennedy, Ginsburg, Alito, and Sotomayor, JJ., joined, and in which Roberts, C. J., and Scalia and Thomas, JJ., joined as to Parts I and III. Scalia, J., filed an opinion concurring in part and concurring in the judgment, in which Roberts, C. J., and Thomas, J., joined, post, p. 663. Kagan, J., took no part in the consideration or decision of the case.
Matthew D. Roberts argued the cause for the United States-. With him on the briefs were Acting Solicitor General Katyal, Assistant Attorney General Breuer, Acting Deputy Solicitor General McLeese, and Joseph C. Wyderko.
Jeffrey L. Fisher argued the cause for respondent. With him on the brief were Steve S. Nolder, Kevin M. Schad, and Pamela S. Karlan.
Dennis G. Terez, Melissa M. Salinas, and David M. Porter filed a brief for the National Association of Criminal Defense Lawyers as amicus curiae urging affirmance.
Justice Breyer
delivered the opinion of the Court.
The Speedy Trial Act of 1974, 18 U. S.C. §3161 et seq;> provides that in “any case in which a plea of not guilty is entered, the trial... shall commence within seventy days” from the later of (1) the “filing date” of the information or indictment or (2) the defendant’s initial appearance before a judicial officer (i <?., the arraignment). § 3161(c)(1). The Act goes on to list a set of exclusions from the 70-day period, including “delay resulting from, any pretrial motion, from the filing of the motion through the conclusion of the hearing on, or other prompt disposition of, such motion.” § 3161(h)(1)(D) (2006 ed., Supp. Ill) (emphasis added).
The United States Court of Appeals for the Sixth Circuit held in this case that a pretrial motion falls within this exclusion only if it “actually causefs] a delay, or the expectation of a delay, of trial.” 579 F. 3d 589, 598 (2009). In our view, however, the statutory exclusion does not contain this kind of causation requirement. Rather, the filing of a pretrial motion falls within this provision irrespective of whether it actually causes, or is expected to cause, delay in starting a trial.
I
Jason Louis Tinklenberg, the respondent, was convicted of violating federal drug and gun laws. 18 U. S. C. § 922(g)(1) (felon in possession of a firearm); 21 U. S. C. § 843(a)(6) (possession of items used to manufacture a controlled substance). He made his initial appearance before a judicial officer on October 31, 2005, and the speedy trial clock then began to run. His trial began on August 14, 2006, 287 days later. Just before trial, TinHenberg asked the District Court to dismiss the indictment on the ground that the trial came too late, violating the Speedy Trial Act’s 70-day requirement. The District Court denied the motion after finding that 218 of the 287 days fell within various Speedy Trial Act exclusions, leaving 69 nonexcludable days, thereby making the trial timely.
On appeal the Sixth Circuit agreed with the District Court that many of the 287 days were excludable. But it disagreed with the District Court about the excludability of time related to three pretrial motions. The Government filed the first motion, an unopposed motion to conduct a video deposition of a witness, on August 1, 2006; the District Court disposed of the motion on August 3, 2006. The Government filed the second motion, an unopposed motion to bring seized firearms into the courtroom as evidence at trial, on August 8, 2006; the District Court disposed of the motion on August 10, 2006. TinHenberg filed the third motion, a motion to dismiss the indictment under the Speedy Trial Act, on Am gust 11, 2006; the District Court denied that motion on August 14, 2006. In the Sixth Circuit’s view, the nine days during which the three motions were pending were not excludable because the motions did not “actually cause a delay, or the expectation of delay, of trial.” 579 F. 3d, at 598. Because these 9 days were sufficient to bring the number of nonexcludable days above 70, the Court of Appeals found a violation of the Act. And given the fact that TinHenberg had already served his prison sentence, it ordered the District Court to dismiss the indictment with prejudice.
We granted certiorari at the Government’s request in order to review the Sixth Circuit’s motion-by-motion causation test. We now reverse its determination. But because we agree with the defendant about a subsidiary matter, namely, the exclusion of certain holidays and weekend days during the period in which he was transported for a competency examination, id., at 597, we affirm the Court of Appeals’ ultimate conclusion.
II
A
In relevant part the Speedy Trial Act sets forth a basic rule:
“In any case in which a plea of not guilty is entered, the trial of a defendant... shall commence within seventy days from [the later of (1)] the filing date... of the information or indictment, or... [(2)'] the date the defendant has appeared before a judicial officer of the court in which such charge is pending....” §-3161(c)(l) (2006 ed.).
The Act then says that the “following periods of delay shall be excluded in computing... the time within which the trial... must commence.” § 3161(h) (2006 ed., Supp. III). It lists seven such “periods of delay.”
It describes the first of these seven excludable periods as
“(1) Any period of delay resulting from other proceedings concerning the defendant, including but not limited to—
“(A) delay resulting from any proceeding... to determine the mental competency or physical capacity of the defendant;
“(B) delay resulting from trial with respect to other charges...;
“(C) delay resulting from any interlocutory appeal;
“(D) delay resulting from any pretrial motion, from the filing of the motion through the conclusion of the hearing on, or other prompt disposition of, such motion;
“(E) delay resulting from any proceeding relating to the transfer of a case [or defendant]... from another district... ;
“(F) delay resulting from transportation of any defendant from another district, or to and from places of examination or hospitalization, except that any time consumed in excess of ten days... shall be presumed to be unreasonable;
“(G) delay resulting from consideration by the court of a proposed plea agreement...;
“(H) delay reasonably attributable to any period, not to exceed thirty days, during which any proceeding concerning the defendant is actually under advisement by the court.” Ibid. (2006 ed. and Supp. Ill) (emphasis added).
B
The particular provision before us, subparagraph (D), excludes from the speedy trial period “delay resulting from any pretrial motion, from the filing of the motion through the conclusion of the hearing on, or other prompt disposition of, such motion.” § 3161(h)(1)(D). The question is whether this provision stops the speedy trial clock from running automatically upon the filing of a pretrial motion irrespective of whether the motion has any impact on when the trial begins. Unlike the Sixth Circuit, we believe the answer to this question is yes.
We begin with the Act’s language. The Sixth Circuit based its answer primarily upon that language. It argued that the phrase “delay resulting from,” read most naturally, requires a court to apply the exclusion provision only to those “motion[s]” that “actually cause a delay, or the expectation of a delay, of trial.” 579 F. 3d, at 598. We agree that such a reading is linguistically reasonable, but the Court of Appeals wrote that there “is no conceivable way to read this language other than to require a delay to result from any pretrial motion before excludable time occurs.” Ibid. See also ibid. (“[T]he statute is clear”). And here we disagree.
When the Court of Appeals says that its reading is the only way any reasonable person could read this language, it overstates its claim. For one thing, even though the word “delay” ordinarily indicates a postponement, it need not inevitably do so. Compare American Heritage Dictionary 480 (4th ed. 2000) (“[t]o postpone until a later time” or “[t]o cause to be later or slower than expected or desired”) with ibid. (“[t]he interval of time between two events”). In any event, terms must be read in their statutory context in order to determine how the provision in question should be applied in an individual case.
Statutory language that describes a particular circumstance, for example, might require a judge to examine each individual case to see if that circumstance is present. But, alternatively, it might ask a judge instead to look at more general matters, such as when a statute requires a judge to increase the sentence of one convicted of a “crime of violence” without requiring the judge to determine whether the particular crime at issue in a particular case was committed in a violent manner. See Taylor v. United States, 495 U. S. 575, 602 (1990) (“crime of violence” characterizes the generic crime, not the particular act committed). Similarly a statute that forbids the importation of “wild birds” need not require a court to decide whether a particular parrot is, in fact, wild or domesticated. It may intend to place the entire species within that definition without investigation of the characteristics of an individual specimen. See United States v. Fifty-Three (53) Eclectus Parrots, 685 F. 2d 1131, 1137 (CA9 1982).
More than that, statutory language can sometimes specify that a set of circumstances exhibits a certain characteristic virtually as a matter of definition and irrespective of how a court may view it in a particular case. A statute that describes “extortion” as a “crime of violence” makes that fact so by definition, without asking a court to second-guess Congress about the matter. 18 U. S. C. § 924(e)(2)(B)(ii) (2006 ed.) (defining “violent felony” to include extortion for purposes of the Armed Career Criminal Act).
The statute before us, though more complex, can be read similarly. The pretrial motion subparagraph falls within a general set of provisions introduced by the phrase: “The following periods of delay shall be excluded.” § 3161(h) (2006 ed., Supp. III). That phrase is then followed by a list that includes “[a]ny period of delay resulting from other proceedings concerning the defendant, including....” § 3161(h)(1). This latter list is followed by a sublist, each member (but one) of which is introduced by the phrase “delay resulting from...,” ibid. (2006 ed. and Supp. Ill), which words are followed by a more specific description, such as “any pretrial motion” from its “filing” “through the conclusion of the hearing on, or other prompt disposition of, such motion.” § 3161(h)(1)(D) (2006 ed., Supp. III).. The whole paragraph can be read as requiring the automatic exclusion of the members of that specific sublist, while referring to those members in general as “periods of délay” and as causing that delay, not because Congress intended the judge to determine causation, but because, in a close to definitional way, the words embody Congress’ own view of the matter.
It is not farfetched to describe the members of the specific sublist in the statute before us in this definitional sense — as “periods of delay” or as bringing about delay. After all, the exclusion of any of the specific periods described always delays the expiration of the 70-day speedy trial deadline. Or Congress might have described the specific periods listed in paragraph (1) as “periods of delay” and “delay[s] resulting from” simply because periods of the type described often do cause a delay in the start of trial. Both explanations show that, linguistically speaking, one can read the statutory exclusion as automatically applying to the specific periods described without leaving to the district court the task of determining whether the period described would or did actually cause a postponement of the trial in the particular case. Thus, language alone cannot resolve the basic question presented in this case. But when read in context and in light of the statute’s structure and purpose, we think it clear that Congress intended subparagraph (D) to apply automatically.
c
We now turn to several considerations, which, taken together, convince us that the subparagraphs that specifically list common pretrial occurrences apply automatically in the way we have just described. First, subparagraph (D) clarifies that the trial court should measure the period of excludable delay for a pretrial motion “from the filing of the motion through the conclusion of the hearing on, or other prompt disposition of, such motion,” but nowhere does it mention the date on which the trial begins or was expected to begin. § 3161(h)(1)(D) (2006 ed., Supp. III). Thus, it is best read to instruct measurement of the time actually consumed by consideration of the pretrial motion. Two other related sub-paragraphs contain clarifying language that contemplates measurement of the time actually consumed by the specified pretrial occurrence without regard to the commencement of the trial. See § 3161(h)(1)(F) (“[A]ny time consumed in excess of ten days from the date an order of removal or an order directing such transportation, and the defendant’s arrival at the destination shall be presumed to be unreasonable”); § 3161(h)(1)(H) (“delay reasonably attributable to any period, not to exceed thirty days, during which any proceeding concerning the defendant is actually under advisement by the court”). If “delay” truly referred to the postponement of trial, then presumably those subparagraphs would instruct that excludable periods should be measured from the date that trial was otherwise scheduled to begin.
Second, we are impressed that during the 37 years since Congress enacted the Speedy Trial Act, every Court of Appeals has considered the question before us now, and every Court of Appeals, implicitly or explicitly, has rejected the interpretation that the Sixth Circuit adopted in this case. See United States v. Wilson, 835 F. 2d 1440, 1443 (CADC 1987) (explicit), abrogated on other grounds by Bloate v. United States, 559 U. S. 196 (2010); United States v. Hood, 469 F. 3d 7, 10 (CA1 2006) (explicit); United States v. Cobb, 697 F. 2d 38, 42 (CA2 1982) (explicit), abrogated on other grounds by Henderson v. United States, 476 U. S. 321 (1986); United States v. Novak, 715 F. 2d 810, 813 (CA3 1983) (explicit), abrogated on other grounds by Henderson, supra; United States v. Dorlouis, 107 F. 3d 248, 253-254 (CA4 1997) (explicit); United States v. Green, 508 F. 3d 195, 200 (CA5 2007) (explicit); United States v. Montoya, 827 F. 2d 143,151 (CA7 1987) (explicit); United States v. Titlbach, 339 F. 3d 692, 698 (CA8 2003) (implicit); United States v. Van Brandy, 726 F. 2d 548, 551 (CA9 1984) (explicit); United States v. Vogl, 374 F. 3d 976, 985-986 (CA10 2004) (explicit); United States v. Stafford, 697 F. 2d 1368, 1371-1372 (CA11 1983) (explicit). This unanimity among the lower courts about the meaning of a statute of great practical administrative importance in the daily working lives of busy trial judges is itself entitled to strong consideration, particularly when those courts have maintained that interpretation consistently over a long period of time. See General Dynamics Land Systems, Inc. v. Cline, 540 U. S. 581, 593-594 (2004).
Third, the Sixth Circuit’s interpretation would make the subparagraph (D) exclusion significantly more difficult to administer. And in doing so, it would significantly hinder the Speedy Trial Act’s efforts to secure fair and efficient criminal trial proceedings. See Zedner v. United States, 547 U. S. 489, 497 (2006) (noting that the Act’s exceptions provide “necessary flexibility”); H. R. Rep. No. 93-1508, p. 15 (1974) (the Act seeks to achieve “efficiency in the processing of cases which is commensurate with due process”); S. Rep. No. 93-1021, p. 21 (1974). Trial judges may, for example, set trial dates beyond 70 days in light of other commitments. And in doing so, a trial judge may well be aware, based on his or her experience, that pretrial motions will likely consume the extra time — even though the judge may know little about which specific motions will be filed, when, and how many. How is that judge to apply the Sixth Circuit’s approach, particularly when several, including unanticipated, pretrial proceedings did consume the time in question?
Moreover, what is to happen if several excludable and several nonexcludable potential causes of delay (e. g., pretrial motions to take depositions, potential scheduling conflicts, various health examinations, etc.) coincide, particularly in multidefendant cases? Can the judge, motion by motion, decide which motions were responsible and which were not responsible for postponing what otherwise might have been an earlier trial date? And how is a defendant or his attorney to predict whether or when a judge will later find a particular motion to have caused a postponement of trial? And if the matter is difficult to predict, how is the attorney to know when or whether he or she should seek further postponement of the 70-day deadline?
With considerable time and judicial effort, perhaps through the use of various presumptions, courts could find methods for overcoming these and other administrative difficulties. In some instances, the judge may know at the time of filing that a given motion is easily resolved or that its complexity will almost certainly postpone the trial. Judges could note on the record their predictions about whether the motion will postpone trial at the time that the motion is filed. Parties could also stipulate as to whether a given motion would be excluded from the speedy trial clock. But those theoretical strategies would not prevent all or even most mistakes, needless dismissals of indictments, and potential retrials after appeal — all of which exact a toll in terms of the fairness of and confidence in the criminal justice system. And any such future strategies for administering the Sixth Circuit’s rule cannot provide a present justification for turning the federal judicial system away from the far less obstacle-strewn path that the system has long traveled.
Fourth, we are reinforced in our conclusion by the difficulty of squaring the Sixth Circuit’s interpretation with this Court’s precedent. In Henderson v. United States, supra, the Court rejected the contention that the exclusion provision for pretrial motions governs only reasonable delays. The Court there concluded (as the Court of Appeals had held) that the exclusion “was intended to be automatic.” Id., at 327 (quoting United States v. Henderson, 746 F. 2d 619, 622 (CA9 1984); internal quotation marks omitted). See also Bloate, 559 U. S. 196 (holding based in part on the view that the exclusion applies “automatically” to the specified period of delay). Henderson did not consider whether a trial court must determine whether the pretrial motion actually caused postponement of the trial in each individual case. But the Sixth Circuit’s interpretation would nonetheless significantly limit the premise of “automatic application” upon which the case rests.
Fifth, for those who find legislative history useful, it is worthwhile noting (as this Court noted in Henderson) that the Senate Report concerning the reenactment of the provision in 1979 described it, along with the other provisions in § 3161(h)(1), as referring to “specific and recurring periods of time often found in criminal cases,” and characterized them as “automatically excludable delay,” S. Rep. No. 96-212, p. 9 (1979). See H. R. Rep. No. 93-1508, at 21 (“The time limits would be tolled by hearings, proceedings and necessary delay which normally occur prior to the trial of criminal cases” (emphasis added)); S. Rep. No. 93-1021, at 21 (“[The Act] has carefully constructed exclusions and exceptions which permit normal pre-trial preparation in the ordinary noncomplex cases which represent the bulk of business in the Federal courts”). But ef. id., at 35 (paragraph (h)(1) excludes “[d]elays caused by proceedings relating to the defendant” (emphasis added)).
Sixth, because all the subparagraphs but one under paragraph (1) begin with the phrase “delay resulting from,” the Sixth Circuit’s interpretation would potentially extend well beyond pretrial motions and encompass such matters as mental and physical competency examinations, interlocutory appeals, consideration of plea agreements, and the absence of essential witnesses. See § 3161(h)(1) (2006 ed., Supp. III); § 3161(h)(3)(A) (2006 ed.). Given the administrative complexity the causation requirement would.bring about in all these areas, those Circuits that have considered a causation requirement in respect to these other matters have rejected it. See, e. g., United States v. Pete, 525 F. 3d 844, 852 (CA9 2008) (interlocutory appeal); United States v. Miles, 290 F. 3d 1341, 1350 (CA11 2002) (unavailability of essential witnesses); United States v. Robinson, 887 F. 2d 651, 656-657 (CA6 1989) (trial on other charges). That further complexity, along with these lower court holdings, reinforce our conclusion.
We consequently disagree with the Sixth Circuit that the Act’s exclusion requires a court to find that the event the exclusion specifically describes, here the filing of the pretrial motion, actually caused or was expected to cause delay of a trial. We hold that the Act contains no such requirement.
Ill
Tinklenberg also argues that the Sixth Circuit wrongly interpreted a different exclusion provision, this time the provision excluding
“delay resulting from transportation of any defendant from another district, or to and from places of examination or hospitalization, except that any time consumed in excess of ten days from the date an order of removal or an order directing such transportation, and the defendant’s arrival at the destination shall be presumed to be unreasonable.” § 3161(h)(1)(F) (2006 ed., Supp. Ill) (emphasis added).
The District Court granted Tinklenberg’s request for a competency evaluation, and he was transported to a medical facility for examination. The lower courts agreed that a total of 20 transportation days elapsed and that since the Government provided no justification, all days in excess of the 10 days specified in the statute were unreasonable. But in counting those excess days, the court exempted weekend days and holidays. Since Veterans Day, Thanksgiving Day, and three weekends all fell within the 20-day period, only 2 days, not 10 days, were considered excessive, during which the 70-day Speedy Trial Act clock continued to tick.
Tinklenberg argues that subparagraph (F) does not exempt weekend days and holidays; hence the court should have considered 10, not 2, days to be excessive. And the parties concede that those eight extra ticking days are enough to make the difference between compliance with, and violation of, the Act.
As the Solicitor General notes, we may consider, or “decline to entertain,” alternative grounds for affirmance. See United States v. Nobles, 422 U. S. 225, 242, n. 16 (1975). In this case, we believe it treats Tinklenberg, who has already served his sentence, more fairly to consider the alternative ground and thereby more fully to dispose of the case.
The Sixth Circuit exempted weekend days and holidays because it believed that subparagraph (F) incorporated Federal Rule of Criminal Procedure 45(a). At the relevant time, that Rule excluded weekend days and holidays when computing any period of time specified in the “rules,” in “any local rule,” or in “any court order” that was less than 11 days. Fed. Rule Crim. Proc. 45(a) (200
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Answer:
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songer_appel1_3_2
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E
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "federal government (including DC)". Your task is to determine which category of federal government agencies and activities best describes this litigant.
NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DOROTHY SHAMROCK COAL COMPANY, Respondent.
No. 86-2862.
United States Court of Appeals, Seventh Circuit.
Argued Oct. 2, 1987.
Decided Nov. 25, 1987.
Fred Cornnell, NLRB, Washington, D.C., for petitioner.
David L. Swider, Sommer & Barnard, Indianapolis, Ind., for respondent.
Before BAUER, Chief Judge, and FLAUM and EASTERBROOK, Circuit Judges.
BAUER, Chief Judge.
Dorothy Shamrock Coal Company (the “Company”) sells and distributes coal in Indianapolis, Indiana. The Company challenges the National Labor Relations Board’s (NLRB) findings that it violated sections 8(a)(1) and (3) of the National Labor Relations Act (“Act”), 29 U.S.C. § 151, et seq., by discouraging efforts to unionize its truck drivers and subsequently terminating all of its drivers following an unsuccessful union election.
The Company employs all nonunion drivers to operate its trucks. In 1981, however, Local 716 of the International Brotherhood of Teamsters, Chauffeurs, Ware-housemen, and Helpers of America (the “Union”) initiated efforts to organize the truck drivers. Approximately seven weeks after a representation election, that the Union lost, the Company’s president and owner, Frank Carr, ordered the termination of all employee drivers, replacing them with independent truckers and trucking firms. Subsequently, the discharged employees filed a charge with the NLRB alleging that the terminations were taken in retaliation for unionization efforts. Administrative Law Judge John West found that the Company “threatened its employees with closure or elimination of their jobs and informed an employee that it would be futile to select a union to represent employees” thereby engaging in unfair labor practices in violation of section 8(a)(1) of the Act. The ALJ also determined that the Company violated section 8(a)(3) by terminating its employees in retaliation for unionization efforts. Finally, the AU held that the Company violated sections 8(a)(1) and (4) of the Act by “informing its employees that it would not discuss reinstitution of its operations or any other matters because a charge had been filed with the Board, and by failing and refusing to recall or reinstate its employeesA three member panel of the NLRB affirmed the ALJ’s rulings that the Company violated sections 8(a)(1) and (3), but reversed the finding of a section 8(a)(4) violation. We hereby enforce the judgment of the NLRB.
I.
This action presents a close case of factual inferences and credibility determinations while raising few if any legal issues. The Board argues that statements made by Company supervisors evidence antiunion animus and its retaliatory intent in discharging its employees. The Company proffers innocent explanations for the allegedly discriminatory comments and argues that economic pressures necessitated its actions. Our task is to determine if the judgment of the NLRB is supported by substantial evidence on the record as whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951); see, e.g., Kankakee-Iroquois County Employers’ Ass’n. v. N.L.R.B., 825 F.2d 1091, 1094 (7th Cir.1987); N.L.R.B. v. American Printers and Lithographers, 820 F.2d 878, 884 (7th Cir.1987). We must defer to the expertise of the Board and will not displace its reasonable inferences even where a plenary review of the record might yield a different result. NLRB v. United Insurance Co., 390 U.S. 254, 260, 88 S.Ct. 988, 991, 19 L.Ed.2d 1083 (1968); NLRB v. Walton Mfg. Co., 369 U.S. 404, 405, 82 S.Ct. 853, 854, 7 L.Ed.2d 829 (1962). Moreover, we “must accept the Board’s credibility findings unless the party challenging [those determinations] establishes [that] ‘exceptional circumstances’ ” justify a different result. NLRB v. Del Rey Tortilleria, Inc., 787 F.2d 1118 (7th Cir.1986) (quoting NLRB v. Harrison Steel Castings Co., 728 F.2d 831, 836 n. 9 (7th Cir.1984)); NLRB v. Berger Transfer & Storage Co., 678 F.2d 679, 687 (7th Cir.1982).
II.
The Board found that statements made by Ben Henry, division manager of the Company, and William Scruggs, its truck supervisor and dispatcher, violated section 8(a)(1) of the Act. In late February or early March, 1982, a Company truck driver, Jack Wilson, asked William Scruggs for time off since Wilson was “out of hours,” a colloquialism for working more than the usual number of hours. Scruggs responded: “Sounds to me like you’re trying to run this like a union shop.” Henry, who also was present during this exchange, added that “we’re not union, we never have been, and never will be.” Before driving for Shamrock, Wilson worked as a union driver for another company, a fact well known both to Scruggs and Henry. Subsequently, Wilson contacted the Teamsters Union in an attempt to organize the Company’s drivers.
The Company argues that the statements made to Wilson reflect only the managers’ opinions and cannot be characterized as threats against unionization. The tenor and circumstances of the remarks, however, do not support such a contention. Unlike many of the cases cited by the Company, Henry’s clear and unequivocal statement to Wilson that “we’re not union, we have never been and never will be” was definitely not a “casual” comment made within the free flow of conversation between workers and supervisors. See, e.g., Gossen Co. v. NLRB, 719 F.2d 1354 (7th Cir.1983). That uncompromising retort met Wilson when he inquired about taking some time off because he worked overtime and was accused of “trying to run this like a union shop.” Nor was this the isolated sentiment of a single supervisor couched in terms of personal opinion. Both Scruggs and Henry were in clear agreement that the Company would never tolerate union organization. Moreover, Henry made the identical remark nine months earlier during Wilson’s job interview. These comments were a calculated attempt to discourage employee organization and thus violated section 8(a)(1) of the Act. See Fred Lewis Carpets, Inc., 260 NLRB 843, 846-49 (1982) (employer unlawfully told employees that he was not “going to go union”); but cf. NLRB v. Larry Faul Oldsmobile Co., 316 F.2d 595 (7th Cir.1963) (statement that employer “might as well throw business up for grabbs” after successful union election was not a threat, but merely an expression of exasperation).
Following his encounter with Henry and Scruggs, Wilson became dissatisfied with his working conditions and discussed unionization with other drivers. Wilson contacted the Teamsters Union in April, 1982, which eventually filed an election petition with the NLRB following a successful authorization-card drive. On June 11, the Union lost an NLRB election by a 5-2 margin. The NLRB certified the election results on June 21, 1982. On July 30, 1982, the Company’s President, Frank Carr, released a communique 'to the drivers announcing their immediate termination. The drivers were told that the decision was motivated by their failure to properly complete new driver forms instituted to reduce expenses. The drivers were assembled again on August 2 and read another letter prepared by Carr. This letter attributed Carr’s decision to the drivers’ failure to follow instructions, a thirty-four percent increase in insurance rates, and a “consistency [sic] of mechanical and other increases.” The ALT found that the General Counsel established a prima facie case that the Company’s decision was in retaliation for its employees’ recent pro-union activities, and rejected the Company’s economic justifications for the terminations as unsupported by the record. The NLRB adopted the ALJ’s recommended order which we now enforce.
III.
The General Counsel carries the burden of proving the elements of a section 8 unfair labor practice. See 29 CFR § 101.10(b) (1982). Thus, the Counsel must establish that the discharge or other adverse labor practice was “based in whole or in part on antiunion animus — or ... that the employee’s protected conduct was a substantial or motivating factor in the [employer’s] adverse action.” NLRB v. Transportation Management Corp., 462 U.S. 393, 401-03, 103 S.Ct. 2469, 2474-75, 76 L.Ed.2d 667 (1983). The employer, however, may avoid liability by showing that his actions would have been the same “regardless of his forbidden motive.” Wright Line, 251 N.L.R.B. 1083 (1980), enf'd., 662 F.2d 899 (1st Cir.1981), cert. denied, 455 U.S. 989, 102 S.Ct. 1612, 71 L.Ed.2d 848 (1982).
The Company contends that the General Counsel failed to establish a prima facie case of a section 8(a)(3) violation because there is no direct evidence that Frank Carr harbored antiunion animus and no evidence linking Carr with the statements of Scruggs and Henry. The Company also argues that even if such a prima facie case could be made, the record contains substantial evidence of business justification for the terminations, contrary to the AU’s determination. We deal with each of these arguments in turn.
The Board relied upon a variety of factors in determining that Shamrock was motivated by a retaliatory antiunion animus in terminating its truck drivers. We believe that determination is supported by substantial evidence in the record. The Company, through two of its supervisory personnel, articulated, on several occasions, its strong antiunion stance and its commitment to retain a nonunion workforce. The Company contends that these statements cannot be attributed to Carr and therefore are not indicative of an antiunion motive in his decision to terminate the drivers. The Board, however, is “free to rely on circumstantial as well as direct evidence” in assessing motive. NLRB v. Rich’s Precision Foundry, Inc., 667 F.2d 613, 626 (7th Cir.1981), see also NLRB v. Rain-Ware, Inc., 732 F.2d 1349, 1352-54 (7th Cir.1984) (where the president of a small company made the layoff decision, but had made no unlawful statements and had often been absent from the facility, a local manager was found to be either “speaking directly for management or ... relating his knowledge of the [president’s] position” in threatening a retaliatory plant closure).
On several occasions Supervisor Scruggs explicitly attributed the Company’s anti-union policy directly to Frank Carr. On one occasion Scruggs told employee Sharp that there “won’t be any union in here,” that “Frank [Carr] wouldn’t allow a union in the shop,” and that Carr “would close up before he had a union shop.” Wilson also testified that he overheard Scruggs tell an independent truck driver that “[b]efore Frank Carr would allow a Union to get in here, he’d shut the gate.” Despite Scruggs’s contention that Carr never expressed hostility toward unionization, the AU properly exercised his discretion and discredited those conclusory denials. See NLRB v. Thor Power Tool Co., 351 F.2d 584, 587 (7th Cir.1965) (no obligation to accept employer explanations if it is reasonable to believe it “furnished the excuse rather than the reason for [an employer’s] retaliatory action”). The Company presents no evidence justifying the disturbance of this credibility determination.
The Company argues also that because many of the threats cited by the Board were contingent upon a successful union election, they are not indicative of its motive to terminate the drivers because the union lost the election. That contention fails for several reasons. The short answer is that the comments initially made by Scruggs and Henry to Wilson regarding the Company’s intention never to become unionized were not made in contemplation of any election. Thus, those comments demonstrate a “manifest hostility” toward union activity and are relevant in determining the Company’s motive for its conduct. See NLRB v. Industrial Erectors, Inc., 712 F.2d 1131, 1137 (7th Cir.1983); Rich’s Precision Foundry, Inc., 667 F.2d at 626. Moreover, the AU credited and the Board affirmed a finding that Scruggs made a postelection comment to employees Wilson and Sharp that he “was still concerned ... about his pension” and was still concerned “that Frank might close [the facility] down, or that the arrangements had already been made for Dorothy Shamrock to go strictly owner-operator,” thereby evidencing the Company’s intent to eliminate union activists from its ranks despite the union’s recent defeat. Despite the union’s loss, it is entirely logical that the Company would attempt to purge its workforce of pro-union influences in order to preserve its avowed policy never to employ union drivers.
The close proximity of the union election and the decision to convert to independent drivers also serves as evidence of the Company’s motive. See NLRB v. Rain-Ware, Inc., 732 F.2d at 1353; NLRB v. Industrial Erectors, Inc., 712 F.2d at 1137; see also Borek Motor Sales, Inc. v. NLRB, 425 F.2d 677, 681, (7th Cir.) cert. denied, 400 U.S. 823, 91 S.Ct. 45, 27 L.Ed.2d 52 (1970) (“The timing of the [adverse action] also supports the inference that [it took place] in order to make good the threat_”). As the Petitioners noted, “not only did Scruggs make numerous threats that the Company would convert to owner-operators just before the election, he also warned just three weeks later that the Company was still contemplating a retaliatory conversion to owner-operators. By the end of the month the Company had done just that.” Thus, there is substantial evidence in the record upon which the Board could properly conclude that the Company was motivated by a continuing antiunion animus in terminating its employees. See, e.g., Behring International, Inc., 252 NLRB 354 (1980) (employer who engaged in unfair labor practice before unsuccessful union election later illegally terminated employees and subcontracted their work); Dash v. NLRB, 793 F.2d 1062 (9th Cir.1986) (union activist unlawfully discharged six months after unsuccessful union election).
Additionally, the Company’s shifting justifications for the terminations severely undermines its credibility on this appeal. See Rich’s Precision Foundry, Inc., 667 F.2d at 626 (shifting explanations constitute relevant and even compelling evidence of unlawful motive); Rain-Ware, Inc., 732 F.2d at 1354. The Company initially informed its drivers that they were being terminated for failure to properly complete driver forms intended to control costs. At the hearing before the ALJ, however, it did not contend that employee error motivated its actions. Indeed, the Company admitted that only two employees failed to properly complete the forms due primarily to a lack of proper instructions by Company supervisors. The Company’s brief does not refute the NLRB’s findings in this regard. Moreover, although the hearing transcript (Tr. 11) clearly indicates that the Company’s attorney, Donald Smith, argued that Carr’s decision was based in part on a “loss of business” and a “substantial reduction in sales,” the Company contends on this appeal that it “never attributed the layoff decision to declining sales.” The Company does not attempt to explain this obvious inconsistency, much less refute the Board’s well founded conclusion that its claim of decreased sales is unsupported by the record.
IV.
We turn now to the Board’s determination that the Company failed to establish that the terminations would have occurred notwithstanding its drivers’ organizational activities. The Company maintains that it was forced to terminate its employee truck drivers to cope with economic pressures and thus would have taken the same action regardless of its forbidden motive. See NLRB v. Transportation Management Corp., 462 U.S. at 401-03, 103 S.Ct. at 2474-75; see also Midwest Stock Exchange, Inc. v. NLRB, 635 F.2d 1255, 1265 (7th Cir.1980) (“Management can discharge for good cause, or bad cause, or no cause at all. It has, as the master of its own business affairs, complete freedom with but one specific, definite qualification: it may not discharge when the real motivating purpose is to do that which Section 8(a)(3) forbids”). The Board, however, rejected the Company’s economic justifications as unsupported by the record. As noted earlier, the Company’s initial explanation of employee misconduct was discredited by its own testimony and abandoned on this appeal. The Company’s position regarding decreasing sales also has been dropped.
In addition, we find ample support for the Board’s rejection of the contentions pursued on this appeal. We need not pass long on the Company’s suggestion that a letter from the Interstate Commerce Corn-mission (“ICC”) prompted Carr’s decision to release the drivers. There is substantial evidence in the record to support the Board’s conclusion that the ICC’s inquiry challenged the use of leased and owner-operated vehicles for the interstate transportation of coal, and therefore, could hardly prompt the discontinuation of company-owned transportation in favor of independent drivers.
The Company also cites an increase in the cost of insuring its vehicles as justification for the terminations. Although a letter introduced at the hearing tends to indicate that the Company was facing an insurance increase, no documentary evidence was ever submitted establishing the size of the increase. Nor did the Company ever introduce documentation establishing the actual cancellation of insurance covering its trucks. The Company informed its employees that it had received notice of a thirty-four percent increase in insurance cost, but suspiciously failed to introduce a copy of that notice at the hearing. The record supplies ample justification for rejecting the Company’s contention. Shamrock’s failure to produce relevant evidence particularly within its control allowed the Board to draw an adverse inference that such evidence would not be favorable to it. See UAW v. NLRB, 459 F.2d 1329, 1336 (D.C.Cir.1972); NLRB v. Treasure Lake, Inc. v. NLRB, 453 F.2d 202, 204 (3d Cir.1971). Moreover, as the AU noted, the Company did not attempt to sell its vehicles, thereby eliminating its self-professed insurance crisis. Instead, the Company upgraded and repaired its trucks with the apparent expectation of future use, thus regenerating the very need for insurance that Shamrock claims forced it to remove company-owned vehicles initially. The Board, therefore, could properly conclude that increasing insurance costs did not justify the Company’s conduct, particularly in light of its avowed antiunion stance. See Borek Motor Sales, Inc., 425 F.2d at 680.
Finally, we consider the Company’s contention that its actions were justified by rising repair and maintenance costs. The Company maintains that it expended $37,-459.00 from January to June of 1982 for the repair and maintenance of its ten trucks. It merely doubles that figure thus estimating its annual cost at $74,918.00; a figure substantially larger than previous annual expenses. The simple doubling of semiannual expenditures, however, is a bold extrapolation unsupported by the Company’s cost history. Indeed, as the Petitioner shows, comparable expenses from January to June of 1981 totaled $36,-095.00 or only $1,364 less than the same period in 1982. Furthermore, the total annual expenditure in 1981 was only $54,-683.00, thus casting significant doubt on the Company’s unsupported contention that costs would double in 1982. Our examination of the cost figures employed by the Company compared with those presented by the Petitioner convince us that rising repair costs could not justify the Company’s actions.
For the foregoing reasons the judgment of the National Labor Relations Board is
Enforced.
. Section 7 of the National Labor Relations Act guarantees employees "the right to self-organization, to form, join or assist labor organizations ... and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. 157. Section 8(a)(1) makes it an unfair labor practice for an employer to "interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7.” 29 U.S.C. 158(a)(1). Section 8(a)(3) makes it an unfair labor practice for an employer to "discriminat[e] in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization...." 29 U.S.C. 158(a)(3).
. In June, 1981, Jack Wilson inquired about a truck driving position. During the course of an interview with Henry, Wilson was asked if his current position was unionized, to which he responded that it was. Henry then replied that driving for Shamrock "is not a union job, we’ve never been union, ... and never will be.” Wilson was subsequently hired in November, 1981. Although this incident is not alleged to be a separate unfair labor practice, it is relevant in judging the impact and motive of Henry’s later comments. See J.P. Stevens & Co. v. NLRB, 461 F.2d 490, 493-94 (4th Cir.1972).
. Section 8(c) of the Act states that "[t]he expressing of any views, arguments, or opinion ... shall not constitute or be evidence of an unfair labor practice ... if such expression contains no threat of reprisal or force or promise of benefit.”
. See note 2 supra.
. In its brief to the Board, the Company also stated that Carr relied on a “decreasing volume of business” and indicated that the Company’s business volume had "plummeted” between January and July of 1982.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "federal government (including DC)". Which category of federal government agencies and activities best describes this litigant?
A. cabinet level department
B. courts or legislative
C. agency whose first word is "federal"
D. other agency, beginning with "A" thru "E"
E. other agency, beginning with "F" thru "N"
F. other agency, beginning with "O" thru "R"
G. other agency, beginning with "S" thru "Z"
H. Distric of Columbia
I. other, not listed, not able to classify
Answer:
|
songer_summary
|
D
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the court's ruling on the appropriateness of summary judgment or the denial of summary judgment favor the appellant?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
C. BREWER PUERTO RICO, INCORPORATED (Substituted for Fajardo Sugar Company), Respondent, Appellant, v. Florencio CORCHADO et al., Plaintiffs, Appellees. CENTRAL COLOSO, INC., Respondent, Appellant, v. Guillermo GABRIEL et al., Plaintiffs, Appellees. CENTRAL SOLLER, INC., Respondent, Appellant, v. Ramon COLLAZO et al., Plaintiffs, Appellees.
Nos. 5903-5905.
United States Court of Appeals First Circuit.
Submitted Feb. 6, 1962.
Decided June 11, 1962.
Gonzalo Sifre and Sifre & Ruiz-Suria, San Juan, P. R., on briefs for appellants in Nos. 5903 and 5904.
F. M. Susoni, San Juan, P. R., on brief for appellant in No. 5905.
Vincente Geigel Polanco, San Juan, P. R., on brief for appellees in Nos. 5903-5905.
Before MAGRUDER, ALDRICH and SMITH, Circuit Judges.
Sitting by designation.
MAGRUDER, Circuit Judge.
These three cases involve the same point and were heard together. They relate to claims by the plaintiff employees for the statutory overtime compensation.
Since the amount in controversy, exclusive of interest and costs, exceeds $5,000, this court has jurisdiction of the appeals. However, on such appeals we are admonished that we should not reverse the Supreme Court of Puerto Rico in a matter of local law unless that court’s determination is “inescapably wrong” or “patently erroneous.” Sancho Bonet v. Texas Co., 308 U.S. 463, 60 S.Ct. 349, 84 L.Ed. 401 (1940); De Castro v. Board of Commissioners, 322 U.S. 451, 64 S.Ct. 1121, 88 L.Ed. 1384 (1944).
There is no doubt that, as applied to the sugar industry in Puerto Rico, both the Federal Fair Labor Standards Act of 1938 and the Commonwealth laws are applicable to some extent, but the Supreme Court of Puerto Rico decided these cases solely by interpreting the provisions of the local laws. No question is raised by appellants as to the correctness of the decision of the court that these cases should be governed by the local laws, either because of 29 U.S.C.A. § 207(c),. providing that the overtime provisions of the federal statute are inapplicable to employees engaged in the processing of sugar cane into sugar, or because of the provisions of 29 U.S.C.A. § 218. At any rate the Supreme Court of Puerto Rico has held, in judgments rendered May 17, 1961, that the cases are governed by the principles laid down in Laborde v. Eastern Sugar Associates, 81 P.R.R. 468 (1959), also decided solely on the ground of the local law.
The courts of the United States have had enough trouble with the so-called Belo type of case, perhaps due to the lack of precision by the legislature in defining what is meant in § 207(a) by “regular rate” of pay. See Mitchell v. Brandtjen & Kluge, Inc., 228 F.2d 291 (C.A. 1st, 1955). We could not possibly hold that a determination by the Supreme Court of Puerto Rico on the matter of its local law is “inescapably wrong.”
Judgments will be entered affirming the judgments of the Supreme Court of Puerto Rico.
Question: Did the court's ruling on the appropriateness of summary judgment or the denial of summary judgment favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_fedlaw
|
A
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the interpretation of federal statute, and if so, whether the resolution of the issue by the court favored the appellant.
UNITED STATES of America, Plaintiff-Appellee, v. CERTAIN REAL PROPERTY AND PREMISES KNOWN AS 38 WHALERS COVE DRIVE, BABYLON, NEW YORK, Defendant, Edward J. Levin, Claimant-Appellant.
No. 981, Docket 90-6268.
United States Court of Appeals, Second Circuit.
Argued Feb. 14, 1991.
Decided Jan. 3, 1992.
Richard B. Lind, New York City, for claimant-appellant.
Stephen J. Riegel, Asst. U.S. Atty. for the Eastern District of New York (Andrew J. Maloney, U.S. Atty., Robert L. Begleiter, Asst. U.S. Atty., of Counsel), Brooklyn, N.Y., for plaintiff-appellee.
Before PIERCE, WINTER and WALKER, Circuit Judges.
WALKER, Circuit Judge:
Claimant Edward J. Levin appeals from a judgment of forfeiture entered pursuant to 21 U.S.C. § 881(a)(7) on October 4, 1990, in a civil proceeding in the Eastern District of New York (Eugene H. Nickerson, Judge). That judgment deprived Levin of his residence, which is located at 38 Whalers Cove Drive, Babylon, New York. We find that the forfeiture was authorized by the statute and not prohibited by substantive due process. Levin also argues that the forfeiture must be classified as punishment under United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989), and that as punishment, the forfeiture violates the Fifth and Eighth Amendments. While we agree that Halper appears to require us to presume the forfeiture to be punishment and to afford the government an opportunity to prove otherwise, the forfeiture, even if seen as punishment, does not violate Levin’s constitutional rights. Accordingly, we affirm the district court’s judgment of forfeiture.
BACKGROUND
This case concerns the forfeiture of Lev-in’s personal residence, a condominium located at 38 Whalers Cove Drive, Babylon, New York. The condominium, purchased in 1977, is now worth approximately $145,-000. Levin has an equity interest in the property valued at approximately $68,000; mortgages outstanding on the property total $77,000.
In July, 1988, Levin twice sold cocaine inside the condominium to a confidential informant for a total sum of $250. The quantity of the sale is disputed but in any event amounts to no more than 2V2 grams. The record indicates, and the government does not dispute, that the confidential informant requested that the first sale take place inside the condominium. The second sale, on July 20, was also made in Levin’s home — it is unclear who specified the location. (We are not here concerned with a third small sale which took place outside the condominium.) The confidential informant telephoned Levin frequently after the sales to request that Levin make further sales. Levin declined.
Levin was arrested by the Suffolk County Police on October 6, 1988 on charges of criminal sale of a controlled substance based on the above transactions. The condominium was searched. No drugs, weapons, large amounts of cash, drug paraphernalia, or drug records were discovered.
Subsequent to his arrest, Levin began cooperating with law enforcement authorities, and later pleaded guilty in the Supreme Court of the State of New York for the County of Suffolk to attempted criminal sale of a controlled substance. He received a probationary sentence and a small fine.
On November 10, 1988, the United States government instituted an in rem forfeiture action against Levin’s condominium, pursuant to 21 U.S.C. § 881(a)(7). On November 14, 1988 the government obtained an ex parte seizure warrant for the premises. Pursuant to the warrant, the United States Marshals Service seized the property, simultaneously searching it extensively. No indication of narcotics activity was found.
After timely filing a claim of ownership to the property, Levin moved to dismiss the complaint. The Government cross-moved for summary judgment of forfeiture.
In a thoughtful, well-written opinion filed September 20, 1990, reported at 747 F.Supp. 173 (E.D.N.Y.1990), Judge Nicker-son denied Levin’s motion to dismiss and granted the government’s cross-motion for summary judgment of forfeiture. The district court ruled that the property was properly subject to forfeiture pursuant to the terms of 21 U.S.C. § 881(a)(7). The district court also rejected Levin’s arguments that the application of the forfeiture provision in his case violated the Fifth and Eighth Amendments to the United States Constitution. Judgment of forfeiture was entered.
Levin then filed this appeal.
DISCUSSION
Levin raises four arguments: (1) the forfeiture is not authorized under the statute, 21 U.S.C. § 881(a)(7); (2) the forfeiture violates substantive due process; (3) the Double Jeopardy Clause of the Fifth Amendment prohibits the forfeiture; and (4) the Eighth Amendment prohibits the forfeiture.
A. Forfeiture under 21 U.S.C. § 881(a)(7)
We turn first to the statutory argument. 21 U.S.C. § 881(a)(7) provides for the forfeiture of real property “which is used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of” a violation of the narcotics laws punishable by more than one year’s imprisonment. As we observed in United States v. 141st Street Corp., 911 F.2d 870, 878 (2d Cir.1990), cert. denied, — U.S. -, 111 S.Ct. 1017, 112 L.Ed.2d 1099 (1991), “Congress intended forfeiture to be a powerful weapon in the war on drugs.” As such, the statute is broadly drafted to reach a wide array of property which may be used to accomplish illegal purposes. Levin contends, however, that the statute must be read to require the proving of a “substantial connection” between the property and the crime. We disagree.
In United States v. Premises & Real Property at 4492 S. Livonia Rd., 889 F.2d 1258, 1269 (2d Cir.1989), reh’g denied, 897 F.2d 659 (1990), we explicitly rejected this argument, stating that the statute requires only a “nexus” between the drug activity and the property. Here, the drug activity was sufficiently connected with the property to bring the property within the purview of the statute. As a situs for the sales, the property “facilitated” them by permitting them to be conducted in an atmosphere of relative privacy. See United States v. Premises Known as 3639-2nd St., N.E., 869 F.2d 1093, 1096 (8th Cir.1989), reh’g denied, 1989 WL 19595, 1989 U.S.App. LEXIS 5212 (1989). We note further that the statute permits forfeiture to be predicated upon only a small quantity of drugs. See also United States v. One 1986 Mercedes Benz, 846 F.2d 2, 5 (2d Cir.1988) (per curiam). We therefore agree with the district court that the property was subject to forfeiture under the terms of the statute.
B. Substantive Due Process
Levin next argues that the civil forfeiture of his residence violates substantive due process. Substantive due process protects the individual “against arbitrary action[s] of government,” Daniels v. Williams, 474 U.S. 327, 331, 106 S.Ct. 662, 665, 88 L.Ed.2d 662 (1986) (citation omitted). We disagree with Levin here as well. The Supreme Court has long held that a forfeiture of property used for illegal purposes may be deemed unduly oppressive only when the owner of the forfeited property is innocent of the wrongful activity, uninvolved and unaware of it, and has done “all that reasonably could be expected to prevent the proscribed use of his property.” Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 689, 94 S.Ct. 2080, 2095, 40 L.Ed.2d 452, reh’g denied, 417 U.S. 977, 94 S.Ct. 3187, 41 L.Ed.2d 1148 (1974). Similarly, in United States v. One Tintoretto Painting Entitled “The Holy Family with St. Catherine & Honored Donor”, 691 F.2d 603 (2d Cir.1982), we found that due process concerns were raised by the forfeiture of a painting only because the owner arguably acted “ ‘in good faith and without negligence.’ ” 691 F.2d at 607 (quoting United States v. One 1936 Model Ford V-8 DeLuxe Coach, 307 U.S. 219, 236, 59 S.Ct. 861, 869, 83 L.Ed. 1249 (1939)).
Here, Levin committed a crime inside the condominium. Even if the informant was responsible for suggesting the condominium as the site of the drug transaction, Levin can hardly be said to have done everything possible to prevent the property’s use for illegal purposes. Under Cale ro-Toledo, the forfeiture therefore does not offend substantive due process.
C. Other Constitutional Arguments: Fifth Amendment Double Jeopardy and Eighth Amendment
1. Classifying Civil Sanctions as Punishment
Levin’s arguments that the forfeiture violates the Double Jeopardy Clause of the Fifth Amendment and the Eighth Amendment’s bar on Cruel and Unusual Punishment and Excessive Fines are predicated upon his contention that the forfeiture is in reality a criminal penalty and, as such, is subject to constitutional limitations on punishment. See generally Pratt & Petersen, Civil Forfeiture in the Second Circuit, 65 St. John’s L.Rev. 653, 668-70 (1991) (discussing “disturbing implications” of courts’ failure to regard civil forfeiture as punishment). He argues that the forfeiture of his $68,000 interest in the condominium — and the resultant loss of his home — as a consequence of a sale of $250 worth of cocaine must be seen as punishment, since it, or at least some part of it, cannot be said to serve proper civil purposes.
Levin’s point here is not that Section 881(a)(7) is properly read as a penal, rather than civil, enactment, see generally United States v. Ward, 448 U.S. 242, 248, 100 S.Ct. 2636, 2641, 65 L.Ed.2d 742, reh’g denied, 448 U.S. 916, 101 S.Ct. 37, 65 L.Ed.2d 1179 (1980); United States v. $2500 in U.S. Currency, 689 F.2d 10, 14 (2d Cir.1982), cert. denied, 465 U.S. 1099, 104 S.Ct. 1591, 80 L.Ed.2d 123 (1984), but rather that the application of the statute in the circumstances of his case is punishment. Levin relies on United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989), in which the Supreme Court found that a civil sanction imposed following a criminal sentence for filing false claims violated the Double Jeopardy Clause’s proscription of multiple punishments.
In Halper, an employee of a medical laboratory filed sixty-five false claims for Medicare reimbursement, each of which overstated the amount reimbursable to the lab by $9, resulting ultimately in a fraud on the government of $585. Under the False Claims Act, 31 U.S.C. §§ 3729-31, the government sought a civil penalty of $2000 plus double damages for each violation of the Act. This subjected Halper to a penalty of over $130,000, “exponentially greater than the amount of the fraud, and ... also many times the amount of the Government’s total loss.” 490 U.S. at 445, 109 S.Ct. at 1900. Despite the sanction’s imposition in a civil proceeding, pursuant to a civil enactment, the Justices unanimously recognized that the sanction as applied could be “so extreme and so divorced from the Government’s damages and expenses as to constitute punishment.” 490 U.S. at 442, 109 S.Ct. at 1898.
The Court applied a “rule of reason” to the sanction. Finding it “overwhelmingly disproportionate,” and without “rational relation” to the purported goal of compensating the government, the Court presumed the sanction to be punitive. 490 U.S. at 449-50, 109 S.Ct. at 1902. It then shifted the burden to the government to prove otherwise, through an “accounting of [its] damages and costs.” 490 U.S. at 449-50, 109 S.Ct. at 1902.
The Court cautioned, however, that the burden of accounting for a civil sanction would fall on the government only in the “extreme case,” and that leeway was to be given the government’s attempt to achieve “rough remedial justice,” particularly in view of quantifying the “precise amount of the Government’s damages and costs.” Halper, 490 U.S. at 449, 109 S.Ct. at 1902; see also United States ex rel. Marcus v. Hess, 317 U.S. 537, 550-51, 63 S.Ct. 379, 387, 87 L.Ed. 443, reh’g denied, 318 U.S. 799, 63 S.Ct. 756, 87 L.Ed. 1163 (1943). As a general rule, therefore, particularly where few statutory violations are involved, the Court stated that it would not disturb a “fixed penalty plus double damages provision,” together with “reasonable liquidated damages clauses.” Halper, 490 U.S. at 449, 109 S.Ct. at 1902.
Where an accounting is appropriate, however, Halper requires a district court to compare the government’s proven damages and costs against the sanction the government seeks to impose. Following an accounting, a sanction must be classified as punitive when the size of the sanction can not fairly be attributed to remedial purposes, “but rather can only be explained as also serving either retributive or deterrent purposes.” 490 U.S. at 448, 109 S.Ct. at 1902 (emphasis added). The amount in excess must be deemed punishment.
The classification of a sanction as punitive under Halper does not automatically transform the sanction proceeding into a criminal prosecution, with all the attendant procedural safeguards required by the Constitution. For example, the applicability of Sixth Amendment protections to statutory proceedings and the standard of proof used in those proceedings are determined not with reference to the particular sanction ultimately imposed, but rather by considering the proceeding’s inherent nature, identified through recourse to “statutory language, structure, and intent.” Halper, 490 U.S. at 447, 109 S.Ct. at 1901 (citing United States v. Ward, 448 U.S. at 248-51, 100 S.Ct. at 2641-43).
Nonetheless, certain constitutional protections do attach when an individual is subjected to a “civil” sanction that in effect is punishment. Such an individual is protected against multiple punishments under the Double Jeopardy Clause, because that constitutional protection is “intrinsically personal,” serving a “humane” interest. See Halper, 490 U.S. at 447, 109 S.Ct. at 1901 (quoting United States ex rel. Marcus v. Hess, 317 U.S. at 554, 63 S.Ct. at 389 (Frankfurter, J., concurring)).
Furthermore, we agree with Levin that Eighth Amendment protections attach when an individual is subjected to a civil sanction classified as punitive under Hal-per. Like the Double Jeopardy Clause, the Eighth Amendment is a “personal” and “humane” limitation on the government’s ability to punish an individual. Although the Supreme Court did not explicitly so rule in Halper, in Browning-Ferris Industries, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989), decided shortly after Halper, the Court stated that Halper “implies that punitive damages awarded to the Government in a civil action may raise Eighth Amendment con-cerns_” 492 U.S. at 275 n. 21, 109 S.Ct. at 2920 n. 21; see also Ingraham v. Wright, 430 U.S. 651, 669 n. 37, 97 S.Ct. 1401, 1411 n. 37, 51 L.Ed.2d 711 (1977) (“Some punishments, though not labeled ‘criminal’ by the State, may be sufficiently analogous to criminal punishments in the circumstances in which they are administered to justify application of the Eighth Amendment.”); Note, Crossing the Line Between Rough Remedial Justice and Prohibited Punishment, 65 Wash.L.Rev. 437 (1990).
2. Implications of United States v. Halper for Civil Forfeitures
We read Halper to apply to civil forfeitures. Forfeitures that are overwhelmingly disproportionate to the value of the offense must be classified as punishment unless the forfeitures are shown to serve articulated, legitimate civil purposes. See 21 U.S.C. § 881 (forfeiture provisions). Among those purposes, the government may use in rem forfeiture to remove in-strumentalities of crime from general circulation and prevent further illicit use of harmful objects, a goal springing from the historic fiction underlying forfeiture that “an instrument of harm is itself culpable.” United States v. Certain Real Property and Premises Known as 38 Whalers Cove Drive, Babylon, New York, 747 F.Supp. 173, 177 (E.D.N.Y.1990) (hereinafter 38 Whalers Cove Drive); see One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 699, 85 S.Ct. 1246, 1250, 14 L.Ed.2d 170 (1965); United States v. One Assortment of 89 Firearms, 465 U.S. 354, 363, 104 S.Ct. 1099, 1105, 79 L.Ed.2d 361 (1984); Calero-Toledo v. Pearson Yacht Leasing Co., supra. We have also stated that forfeiture of an object may substitute for a civil fine, “imped[ing] the success of the criminal enterprise by eliminating its resources and instrumentalities,” United States v. $2500 in U.S. Currency, 689 F.2d at 13; see Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. at 687, 94 S.Ct. at 2094. The government may also use forfeitures to compensate the government’s investigation and enforcement expenditures, in addition to any damages the government may suffer directly as a result of criminal acts, essentially as a form of “liquidated damages” for harm caused by an individual wrong-doer. See 21 U.S.C. § 881(e); One Lot Emerald Cut Stones & One Ring v. United States, 409 U.S. 232, 237, 93 S.Ct. 489, 493, 34 L.Ed.2d 438 (1972) (per curiam); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. at 687 & n. 26, 94 S.Ct. at 2094 & n. 26.
Civil forfeitures do not retain their civil character if they are used in order to achieve deterrence or retribution, however. “Retribution and deterrence ... are not legitimate nonpunitive governmental objectives.” Bell v. Wolfish, 441 U.S. 520, 539 n. 20, 99 S.Ct. 1861, 1874 n. 20, 60 L.Ed.2d 447 (1979). We acknowledge that otherwise proper forfeiture actions may have the collateral effect of deterring future drug offenders. See 38 Whalers Cove Drive, 747 F.Supp. at 179. This fact alone will not render a particular forfeiture punitive in nature. Rather, Halper requires us to examine whether the forfeiture at hand is fully justified by the civil and remedial purposes it ostensibly serves, or whether it or a portion thereof can be explained only with reference to punitive goals.
In evaluating whether a forfeiture under § 881(a)(7) serves its ostensible goals, we focus upon the effects on the claimant who has violated the statute, despite the fact that the forfeiture actions are brought in rem. See Livonia Road, 889 F.2d at 1270. See also United States v. Huber, 603 F.2d 387, 397 (2d Cir.1979), cert. denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980) (for Eighth Amendment purposes, “there is no substantial difference between an in rem proceeding and a[n in personam criminal] forfeiture proceeding brought directly against the owner”); cf. United States v. U.S. Coin & Currency, 401 U.S. 715, 718, 91 S.Ct. 1041, 1043, 28 L.Ed.2d 434 (1971). Where an individual has suffered severe penalties in an in rem forfeiture proceeding, it is particularly appropriate to address the substance of that proceeding. See United States v. On Leong Chinese Merchants Ass’n Bldg., 918 F.2d 1289, 1299 (7th Cir.1990) (Cudahy, J., concurring); United States v. Premises Known as 3639-2nd St, N.E., 869 F.2d at 1098 (Arnold, J., concurring).
We therefore hold that a forfeiture under 21 U.S.C. § 881(a)(7) will not be presumed punitive where the seized property has been used substantially to accomplish illegal purposes, so that the property itself can be said to be “culpable” or an instrumentality of crime. See Dobbins’ Distillery v. United States, 96 U.S. 395, 401, 24 L.Ed. 637 (1878) (offense “attached primarily” to distillery). Where the seized property is not itself an instrumentality of crime, however, and its total value is overwhelmingly disproportionate to the value of controlled substances involved in the statutory violation, there is a rebuttable presumption that the forfeiture is punitive in nature. In using the value of the drugs as a rough measuring stick, we follow the Halper Court’s decision to evaluate the sanction against the value obtained by Hal-per’s criminal conduct. We also note that the Sentencing Commission, through the Guidelines, has utilized the weight of drugs and, implicitly, their value to differentiate between punishments for violations of the narcotics laws.
The government may then account under Halper in order to show that the forfeiture serves legitimate civil goals. The government may present its costs of investigation and detection, as well as other costs and damages attributable to the criminal misconduct of the claimant. See 21 U.S.C. § 881(e)(3)(A) (relating transfer of forfeited property to state agency to “total law enforcement effort with respect to the [individual] violation of law on which the forfeiture is based”). See United States v. Hall, 730 F.Supp. 646, 655 (M.D.Pa.1990); Kvitka v. Board of Registration in Medicine, 407 Mass. 140, 145, 551 N.E.2d 915 (1990) (examining governmental losses and harm to identifiable victims directly caused by physician’s fraud), cert. denied, — U.S. -, 111 S.Ct. 74, 112 L.Ed.2d 47 (1990). The assessment of costs and damages must be individualized. A reasonable allocation of more generalized enforcement costs — in the nature of overhead — may also be allowed. The allocation must not be incommensurate with the portion of the overall enforcement problem represented by the offense at hand. While we are extremely sympathetic to the need to address our nation’s serious narcotics problems, we do not believe that a disproportionately large forfeiture can be reasonably justified as a civil fine as opposed to punishment by placing full responsibility for the “war on drugs” on the shoulders of every individual claimant. This is particularly so where the individual claimant’s violations are relatively minor. See 38 Whalers Cove Drive, 747 F.Supp. at 180; see also Halper, 490 U.S. at 449, 109 S.Ct. at 1902 (compensable portion of the “costs and damages” suffered by the government was that directly caused by the defendant); United States v. Bizzell, 921 F.2d 263, 267 (10th Cir.1990); compare United States v. A Parcel of Land with a Building Located Thereon at 40 Moon Hill Road, 884 F.2d 41, 44 (1st Cir.1989). Following the accounting, the trial court may then determine whether the government has carried its burden of showing that the sanction is entirely assignable to civil purposes or whether part or all of the sanction is designed to serve punitive purposes.
3. Application of United States v. Halper to the Instant Case
With these principles in mind, we turn to the instant case. We consider first whether the forfeiture could be considered a removal of an “instrumentality of crime” from general circulation. The government apparently concedes, however, that forfeiture is not sought on this ground. See 38 Whalers Cove Drive, 747 F.Supp. at 178 (“The government makes no suggestion that Levin’s condominium was contraband or somehow itself culpable.”). We therefore do not address that argument.
Instead, the government’s sole contention here is that the sanction serves other civil goals such as compensation. Following Halper, we therefore examine whether the forfeiture is disproportionately large, relative to the value of the drug transactions which violated 21 U.S.C. § 881(a)(7). The forfeiture of Levin’s interest in the residence was close to three hundred times the total value of cocaine sold inside it. We find as a matter of law that the forefei-ture is overwhelmingly disproportionate compared to the value of the relevant drug transactions, and that therefore a rebuttal presumption that the forfeiture is punitive in nature is created.
If the resulting attachment of constitutional protections under Halper would have any effect on the result of this case, we would be inclined to vacate Judge Nicker-son’s judgment of forfeiture and remand the case to permit the government an opportunity to rebut the presumption by showing through an accounting of its costs that the forfeiture is civil in nature. However, assuming arguendo that following a government accounting the district judge would conclude that the forfeiture, even up to the full amount of Levin’s equity interest in the condominium, amounted to punishment and not a civil sanction, the judgment would still survive scrutiny. For reasons that we now turn to, the forfeiture does not violate the constitutional limits on punishment set by the Double Jeopardy Clause and the Eighth Amendment.
a. Double Jeopardy Clause
Levin maintains that because the forfeiture proceeding followed his prosecution, plea of guilty, and sentencing in state court, the forfeiture violates his Double Jeopardy Clause right to be free from multiple punishments.
We disagree. Even assuming that the forfeiture is a criminal penalty, the Double Jeopardy Clause prohibits two criminal punishments for the same offense only when they are sought by the same sovereign government. The Double Jeopardy Clause is inapplicable when separate governments prosecute the same defendant, for the defendant has offended both sovereigns. Heath v. Alabama, 474 U.S. 82, 87-89, 106 S.Ct. 433, 437, 88 L.Ed.2d 387 (1985).
Levin argues on appeal that his case falls within an exception to this “dual sovereignty” doctrine. The Double Jeopardy Clause may be violated despite single prosecutions by separate sovereigns when one “prosecuting sovereign can be said to be acting as a ‘tool’ of the other.” United States v. Aboumoussallem, 726 F.2d 906, 910 (2d Cir.1984) (quoting Bartkus v. Illinois, 359 U.S. 121, 123, 79 S.Ct. 676, 678, 3 L.Ed.2d 684 (1959)); United States v. Jordan, 870 F.2d 1310, 1312 (7th Cir.), cert. denied, 493 U.S. 831, 110 S.Ct. 101, 107 L.Ed.2d 65 (1989); United States v. Russotti, 717 F.2d 27, 31 (2d Cir.1983), cert. denied, 465 U.S. 1022, 104 S.Ct. 1273, 79 L.Ed.2d 678 (1984). This exception is not triggered simply by cooperation between the two authorities, however. The state government must have effectively manipulated the actions of the federal government, so that federal officials retained little or no independent volition. United States v. Russotti, 717 F.2d at 31; United States v. Liddy, 542 F.2d 76, 79 (D.C.Cir.1976). Levin contends only that the Suffolk County Police Department will receive a portion of the forfeiture proceeds. That distribution is apparently pursuant to statute. 21 U.S.C. § 881(e)(1)(A) authorizes the Attorney General to transfer part or all of the forfeited personal property to “any State or local law enforcement agency which participated directly in the seizure or forfeiture of the property.” But the fact that the Attorney General may choose to share the forfeited property with a local law enforcement agency is inadequate to show that the United States government, which no doubt has its own interest in the proceeds, is here acting as a “cover” for the Suffolk County Police Department. Nor does the receipt by the state enforcement agency of part of the proceeds implicate the state in any punishment by virtue of the forfeiture since the forfeiture is being effected by the United States government.
b. Eighth Amendment
Levin asserts that the forfeiture violates the Cruel and Unusual Punishment Clause of the Eighth Amendment, or its Excessive Fines Clause. We find the arguments without merit. The Eighth Amendment proscribes only extreme punishments. Even assuming that the entire amount of the forfeiture here is punishment, it does not violate the outer confines set by the Eighth Amendment.
The Cruel and Unusual Punishment Clause prevents the imposition of a punishment which is “grossly disproportionate” to the crime committed. Solem v. Helm, 463 U.S. 277, 290-92, 103 S.Ct. 3001, 3010-11, 77 L.Ed.2d 637 (1983). Three factors are relevant to this inquiry: (1) the inherent gravity of the offense; (2) the sentences imposed for similarly grave offenses in the same jurisdiction; and (3) sentences imposed for the same crime in other jurisdictions. We need not linger over the first factor. Levin does not dispute his participation in two sales of cocaine. The Supreme Court has recognized the serious threat to individuals and society posed by drug offenses in the context of an Eighth Amendment analysis. See Harmelin v. Michigan, — U.S. -, 111 S.Ct. 2680, 115 L.Ed.2d 836 (1991) (upholding mandatory life sentence for possession of 672 grams of cocaine); id. 111 S.Ct. at 2698 (Scalia, J.) (Michigan legislature may take appropriate measures to address “the situation on the streets of Detroit”); id. at 2706 (Kennedy, J.) (petitioner’s drug offense threatened “grave harm”); see also National Treasury Employees Union v. Von Raab, 489 U.S. 656, 668, 109 S.Ct. 1384, 1392, 103 L.Ed.2d 685 (1989) (drug use and distribution one of “greatest problems affecting the health and welfare of our population”).
Further, the punishments meted out by the federal government and other jurisdictions for similar crimes indicate that the forfeiture of Levin’s condominium is not aberrational. Federal law authorizes a sentence of twenty years and a fine of $1,000,000 for the distribution of cocaine in an amount less than 500 grams. 21 U.S.C. § 841. The Sentencing Guidelines assign a Base Offense Level of 12 to transactions involving less than 25 grams of cocaine. Depending upon criminal history, a defendant who had distributed the same amount of cocaine as Levin would presumptively be fined $30,000 and receive a sentence of 10 to 37 months. The state courts in this circuit authorize punishments on a similar scale. Under New York law, a defendant who had distributed the same quantity of cocaine as Levin would be exposed to 8 years and 4 months imprisonment and $50,-000 in fines. N.Y.Penal Law §§ 220.41, 70.00, 80.00. Under Vermont law, a defendant distributing 2.5 grams or more of cocaine (but less than one ounce) may receive five years of imprisonment and a fine of $100,000. Vt.Stat.Ann. tit. 18, § 4231. Connecticut law authorizes a sentence of 20 years and a fine of $10,000 for distribution of more than 0.5 grams of cocaine. Conn. GemStat. § 21a-278(b); § 53a-41. We recognize that these are merely possible sentences and are not conclusive as to what a court might do in an individual case. Nonetheless, we infer from the statutes that the imposition of the equivalent of a $68,000 fine in this case, while large, is not a grossly disproportionate punishment within the meaning of Eighth Amendment jurisprudence.
As to the Excessive Fines Clause, the Supreme Court has provided no guidance, except to observe that fines must be closely scrutinized because they benefit the government. Unlike other forms of punishment that impose costs on government, fines create revenue. Harmelin v. Michigan, 111 S.Ct. at 2693 n. 9 (Scalia, J.); cf. Browning-Ferris Industries, Inc. v. Kelco Disposal, Inc., 492 U.S. at 275, 109 S.Ct. at 2920 (Excessive Fines Clause possibly applicable to revenue-raising efforts through fines, other payments, or forfeitures). We need not decide at exactly what point a fine or forfeiture might violate the Excessive Fines Clause, for wherever such a line could be drawn, this forfeiture would be proper. Judging from the penal laws of the United States and the various states mentioned above, a fine of many thousands of dollars for a minor drug offense is not beyond the pale. Cf. Calero-Toledo v. Pearson Yacht Leasing Co., supra (upholding against due process challenge seizure of innocent owner’s $19,800 yacht upon which marijuana cigarette was discovered). We conclude that the forfeiture, if truly a punishment, does not violate the Eighth Amendment.
CONCLUSION
The judgment of forfeiture is affirmed.
. The Halper Court stated that multiple sanctions such as those imposed on Halper would not violate the Double Jeopardy Clause if they were imposed in a single proceeding. Halper, 490 U.S. at 440-41, 447, 109 S.Ct. at 1897-98, 1901; see North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 2076, 23 L.Ed.2d 656 (1969); Note, United States v. Halper, Punitive Civil Fines, and the Double Jeopardy and Excessive Fines Clauses, 66 N.Y.U.L.Rev. 112, 137-39 (1991).
. The Court concluded provisionally that the $130,000 — plus sanction was punitive, based on the district court’s estimate of the government's costs and damages at $16,000. The Court then remanded the case, however, giving the government an opportunity to prove that its costs and damages in fact exceeded the district court’s estimate.
. Levin appears to mention, but does not press, the possibility that the Excessive Fines Clause might apply to sanctions purely civil in nature. See Browning-Ferris Industries, Inc. v. Kelco Disposal, Inc., 492 U.S. at 263-64, 275, 109 S.Ct. at 2913, 2920. We accordingly decline to address the issue.
Question: Did the interpretation of federal statute by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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songer_treat
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E
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What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
VOLKSWAGEN INTERAMERICANA, S.A., Defendant, Appellant, v. Henry ROHLSEN, Plaintiff, Appellee.
No. 6634.
United States Court of Appeals First Circuit.
May 17, 1966.
Raymond J. Falls, Jr., New York City, with whom Stephen A. Greene, Cahill, Gordon, Reindel & Ohl, New York City, McConnell, Valdes & Kelley, San Juan, P. R., and Gonzalez, Gonzalez-Oliver & Novak, Santurce, P. R., were on brief, for appellant.
John D. Marsh, Christiansted, St. Croix, V. I., with whom Young, Isherwood & Marsh, Christiansted, St. Croix, V. I., and Dubon & Dubon, Santurce, P. R., were on brief, for appellee.
Before ALDRICH, Chief Judge, MARIS and COFFIN, Circuit Judges.
By designation.
. Although Congress could provide for service on an American corporation anywhere in the United States, Mississippi Publishing Corp. v. Murphree, 1946, 326 U.S. 438, 442, 66 S.Ct. 242, 90 L.Ed. 185, it is likely that federal assertion of jurisdiction over corporations organized under the laws of foreign countries is circumscribed by the due process clause of the fifth amendment. Cf. United States v. Scophony Corp. of America, 1948, 333 U.S. 795, 818, 68 S.Ct. 855, 92 L.Ed. 1091; United States v. Imperial Chemical Industries, Ltd., S.D.N.Y., 1951, 100 F.Supp. 504, 511. In any event, in federal question cases, the courts have tested the amenability of any foreign corporation to suit by reference to the standards developed under that clause. Lone Star Package Car Co., Inc. v. Baltimore & O. R. R., 5 Cir., 1954, 212 F.2d 147; Ostow & Jacobs, Inc. v. Morgan-Jones, Inc., S.D.N.Y.1959, 178 F.Supp. 150.
ALDRICH, Chief Judge.
This is an action brought under the so-called Automobile Dealers’ Day in Court Act, 15 U.S.C. §§ 1221-1225, hereinafter Dealers’ Act, by one Rohlsen, a former Volkswagen dealer in St. Croix, Virgin Islands, against the regional Volkswagen distributor, Volkswagen In-teramericana, S.A., a Mexican corporation. The suit was instituted in the United States District Court for the District of Puerto Rico. Process was served on the manager of Volkswagen de Puerto Rico, hereinafter VWPR, a local dealer franchised by defendant, as defendant’s alleged agent. The jury returned a verdict for the plaintiff in the amount of $300,000. Defendant’s appeal raises, at the outset, questions of jurisdiction.
Little time need be spent over defendant’s reliance upon a provision of the franchise agreement restricting actions to the courts of Mexico. We need not consider whether this provision is sufficiently reasonable that it should be respected in an .ordinary suit arising out of the contract. See Wm. H. Muller & Co. v. Swedish American Line Ltd., 2 Cir., 1955, 224 F.2d 806, 56 A.L.R.2d 295, cert. den. 350 U.S. 903, 76 S.Ct. 182, 100 L.Ed. 793. The Dealers’ Act contains its own venue provisions, which are very broad, and are designed to assure the dealer as accessible a forum as is reasonably possible. Cf. Snyder v. Eastern Auto Distributors, Inc., 4 Cir., 1966, 357 F.2d 552, cert. den. June 13, 1966, 86 S.Ct. 1889. The very purpose of the act is to give the dealer certain rights against a manufacturer independent of the terms of the agreement itself. Cf. Barney Motor Sales v. Cal. Sales, Inc., S.D.Cal.1959,178 F.Supp. 172,175. This protection would be of little value if a manufacturer could contractually limit jurisdiction to a forum practically inaccessible to the dealer. The act cannot so easily be thwarted. Cf. Boyd v. Grand Trunk Western R. R., 1949, 338 U.S. 263, 70 S.Ct. 26, 94 L.Ed. 55.
Defendant further alleges that it was not present in Puerto Rico so as to be amenable to suit there, and that it was not properly served with process. If defendant is subject to jurisdiction in Puerto Rico, it is only because of defendant’s relationship with its franchised Puerto Rico Volkswagen dealer, VWPR, and it is to this that we turn.
It was uncontroverted that Krause, Hennings, and Reuss, the president, finance director, and managing director of defendant, were, respectively, the president, vice-president, and a director of VWPR. Hinke, a vice-president and director of VWPR, was one of defendant’s two chief shareholders, the other one being Krause. From this, although the record is confused as to the actual ownership of VWPR, it could reasonably be concluded that defendant exercised-direct control over the Puerto Rico dealership. We do not rest on this alone. Although VWPR’s franchise agreement was not introduced into evidence, the plaintiff’s was. It was a printed form, and, in the absence of contrary evidence, we think it not unreasonable to infer that it was standard, and that VWPR’s agreement subjected it to no less control by defendant. Under the form franchise, defendant reserved the right to control, inter alia, the dealer’s automobile and spare parts inventory, its area of distribution, the number of salesmen and customers’ service personnel in its employ, and even its stationery and business forms. Defendant further reserved the right to inspect, at its will, the dealer’s premises and all of its business records.
The due process clause sets the outer limits on assertion of jurisdiction over a foreign corporation. The basic standard, enunciated in International Shoe Co. v. State of Washington, 1945, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, and developed in subsequent decisions, is that the foreign corporation must “have certain minimum contacts with [the forum] * * * such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.' ” Id. at 316, 66 S.Ct. at 158.
When jurisdiction is asserted over a foreign corporation because of its relationship with a local person or corporation, the nature and extent of this relationship, as well as the relevance of the subject-matter of the suit to defendant’s affairs within the state are of significance. Defendant’s dealers were not mere buyers, or outlets for its products, but, as we have indicated, were subject to its detailed supervision and control. Virtually indistinguishable franchises have been held sufficient to subject a foreign manufacturer or distributor to suit in the jurisdiction of its local dealer. Snyder v. Eastern Auto Distributors, Inc., supra; Delray Beach Aviation Corp. v. Mooney Aircraft, Inc., 5 Cir., 1964, 332 F.2d 135, cert. den. 379 U.S. 915, 85 S.Ct. 262, 13 L.Ed.2d 185; Fiat Motor Co. v. Alabama Imported Cars, Inc., 1961, 110 U.S.App.D.C. 252, 292 F.2d 745, cert. den. 368 U.S. 898, 82 S.Ct. 175, 7 L.Ed. 2d 94. Although interlocking ties of corporate control, such as common directors and officers, may not in themselves be sufficient to subject the foreign corporation to local jurisdiction, Cannon Mfg. Co. v. Cudahy Packing Co., 1925, 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634, they are relevant factors, and lend support to jurisdiction based on this contractual reservation of control. Boryk v. deHavilland Aircraft Co., 2 Cir., 1965, 341 F.2d 666; cf. Fooshee v. Interstate Vending Co., D.Kan., 1964, 234 F.Supp. 44.
When, as here, a foreign defendant’s contacts with a forum are substantial, a suit may be maintained though it concern a matter having no connection with the forum. Perkins v. Benguet Consol. Mining Co., 1952, 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485. In the present case, moreover, the suit is not unrelated to Puerto Rico: throughout the period of the franchise, VWPR acted as agent for defendant in relation to its business with plaintiff. Cf. Fiat Motor Co. v. Alabama Imported Cars, Inc., supra.
Defendant could not carry on substantial economic activities within this country and at the same time claim to be absent when distasteful consequences ensued. Defendant was subject to personal jurisdiction in Puerto Rico, and was properly served by service upon VWPR’s managing agent. Fed.R.Civ.P. 4(d) (3) ; Lone Star Package Car Co. v. Baltimore & O.R.R., supra, note 3.
We come next to the question whether defendant is a party who can be sued under the Dealers’ Act. Section 1222 provides only for “suit against any automobile manufacturer.” Section 1221(a) states,
“The term ‘automobile manufacturer’ shall mean any * * * business enterprise engaged in the manufacturing or assembling of [motor vehicles] * * *, including any person, partnership, or corporation which acts for and is under the control of such manufacturer or assembler in connection with the distribution of said automotive vehicles.”
Defendant’s position is that, although by section 1221(a) suit can be brought against a manufacturer for the misconduct of its distributor, the act does not authorize suit against the distributor itself. Defendant further contends that it was not a distributor acting for and under the control of a manufacturer.
We agree with defendant that the Dealers’ Act is aimed at automobile manufacturers, not at distributors, as such, and that the inclusion of certain distributors in section 1221(a) was designed only to prevent a manufacturer from circumventing its responsibilities under the act by transacting business with its dealers through alter egos. We do not conclude from this, however, that when the manufacturer has acted through a distributor over whom it exercises the requisite control, suit cannot be brought against the distributor as well. It is basic agency law that an agent who has injured a third party cannot defend on the ground that he did so at the bidding of another. Indeed, if he so acts, he must do so subject to any special liability or disability that would attach to the principal for whom he is acting. It is entirely consistent with both the purpose and language of the act to hold that “automobile manufacturer” means, inter alia, “automobile distributor,” when the distributor is subject to the manufacturer’s control. Barney Motor Sales v. Cal Sales, Inc., supra.
Defendant’s assertions that this requisite relationship was lacking, and that the court erred in excluding evidence- relating to control, are based upon a misconception of the appropriate standard. Defendant is doubtless correct in suggesting that if the distributor is but an “instrumentality” of the manufacturer, in the special sense that the term is used in corporation law, this is a sufficient basis for bringing the distributor within the act. It is not, however, the only basis. “Acts for and is under the control of * * * ” describes with equal aptness the relation between certain agents and their principals. A manufacturer can exercise the same kind of control through contractual provisions with a stranger as it can by owning and directing a subsidiary corporation, and evasion of its responsibilities by either method would equally undermine the purposes of the act. We believe the provision in question should be interpreted in the context of general agency law. It is sufficient that the distributor “is subject to the [manufacturer’s] * * * control or right to control.” Restatement (Second), Agency, § 220(1); Reconstruction Finance Corp. v. Merryfield, 1 Cir., 1943, 134 F.2d 988, 991.
Under the terms of defendant’s franchise from the automobile manufacturer, Volkswagen G.m.b.H., defendant was subject to the manufacturer’s control in much the same way and to much the same extent as defendant’s franchised dealers were subject to its control. Furthermore, the agreement obligated defendant to supervise and enforce its dealers’ compliance with the manufacturer’s regulations. It was not error to exclude defendant’s proffered evidence as to the manufacturer’s actual involvement with plaintiff’s franchise. What matters is that it had the power.
Defendant next contends that the evidence does not support a verdict in plaintiff’s favor on the merits. Before examining the record we must first inquire into the governing legal standards, which are not entirely clear from the face of the statute. Section 1222 requires the manufacturer to “act in good faith * * in terminating, canceling, or not renewing the franchise." Section 1221(e) defines “good faith" as
“the duty of each party to any franchise * * * to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation, or- threats of coercion or intimidation from the other party: Provided, That recommendation, endorsement, exposition, persuasion, urging or argument shall not be deemed to constitute a lack of good faith.”
For a manufacturer to condition continuation of a franchise upon certain conduct, even if characterizable as a threat, cannot constitute forbidden coercion per se. It must appear that the condition was unfair or inequitable. To hold otherwise would not only circumscribe the manufacturer’s freedom to do business to an extent we cannot believe contemplated by Congress, but would lead to the absurd result that a manufacturer could not insist upon the very terms of the agreement.
Initially, we think there is an important difference between two kinds of improper conditions that a manufacturer might impose and back up by threats. Particularly suspect under the act are conditions which benefit only, or primarily, the manufacturer — for example, requirements that a dealer purchase large stocks of vehicles, spare parts, special tools or advertising matter — as distinguished from requirements that would tend to work to the mutual advantage of both parties, for example, that the dealer improve its service, or managerial efficiency. The manufacturer can easily extort demands of the first sort, increasing its own profit at the expense of the dealer’s; the act’s legislative history indicates that this was of particular concern to the Congress. The latter sort, even if the demands may be thought excessive under the circumstances, should not, without more, indicate that the manufacturer is taking advantage of the dealer, or using the franchise as a weapon for extortion, since the manufacturer stands to profit from his demands only if the dealer profits as well.
The jury could have found that defendant imposed several requirements upon plaintiff which, under the above analysis, if improper, would fall into the first group — conditions directly benefiting the manufacturer, but not necessarily the dealer. Plaintiff’s 1956 franchise required it to stock spare parts equal in cost to ten per cent of the value of its automobile stockthe 1958 franchise required him to purchase from defendant a welding machine, a line of Vespa motor scooters, a tractor, advertising materials, and tools; plaintiff was forced to sign the 1960 renewal contract without being given time to read its terms. Even if it be assumed that defendant acted unreasonably and coercively, not only did none of these events occur within the three-year statutory period before the action was commenced, 15 U.S.C. § 1223, but there is no evidence that plaintiff’s unfavorable reaction, but nonetheless acceptance of them, contributed to the subsequent termination or nonrenewal of his franchise. This latter was all the complaint sought. Kotula v. Ford Motor Co., 8 Cir., 1964, 338 F.2d 732, 736.
The jury could have found, as defendant contended, that defendant’s reason for terminating the franchise was that plaintiff failed to meet defendant’s standards of service, sales, efficiency, and appearance. Reading the record most favorably to plaintiff, we believe the jury could have found that the quality of his service was good; that his sales were adequate for the St. Croix area, and that any decline in sales during 1961 was due to circumstances beyond plaintiff’s control; that the appearance of plaintiff’s place of business, and its efficiency, were reasonable for that area; and that plaintiff’s failure to meet various contractual commitments also were the result of events beyond his control. However, plaintiff’s own evidence and admissions disclose that his performance could well have been better, and that it would not have been unreasonable for the manufacturer to conclude that, even if plaintiff’s enterprise was not below par for the Virgin Islands, another, more enterprising dealer could overcome many of the difficulties encountered by the plaintiff, and better represent Volkswagen’s interests in terms of service, sales and image.
As we have indicated, a disfranchised dealer does not make a case under the statute merely by proving that his performance was not below minimum limits. Plaintiff makes a special showing, however, intending to establish that it was not really his performance with which defendant was dissatisfied. In particular, plaintiff alleges that starting in 1960, defendant determined to take a direct share of the retail profits in the St. Croix area. Had defendant merely wished to own a dealership itself, it might have terminated plaintiff’s franchise and formed its own enterprise. But plaintiff asserts that defendant wanted a direct' share of the profits without making any, or any substantial, investment; that defendant threatened plaintiff with loss of the franchise unless he agreed to admit defendant to his operation; and that when plaintiff refused, defendant made good its threat. We turn to some of the relevant evidence.
In January 1961, defendant’s manager and substantial stockholder, Hinke, proposed to two St. Croix real-estate brokers that a joint enterprise be formed in which defendant, plaintiff, and the brokers’ group would each have a one-third interest. One of the brokers testified as to Hinke’s proposal:
“They were to participate financially and supposedly to give us service help, * * * He [Hinke] would have one-third of it, but I don’t believe he was going to put in money. We rejected the idea.”
Plaintiff testified that Hinke put essentially the same offer to him:
“[H]e made a proposition in which he wanted to set up a new business for the Volkswagen franchise and offered me 1/3 participation. These people would get 1/3 and Volkswagen would get 1/3. I asked concerning the capitalization and he said it was to be capitalized for $100,000 and I said to him, Mr. Hinke, the last statement we sent you showed that we had a business worth $230,000.00. How in the world could I invest this against the capitalization for 1/3 of the $100,000.00, I said this is untenable. He said, I can see how you think about it, but I think in the long run you would be much farther ahead. * * * ”
Plaintiff rejected the offer at the time it was proposed, and Hinke left St. Croix. Immediately thereafter, Hinke wrote to plaintiff that defendant had decided “not to continue our relationship on the present basis, due to the fact that some of the essentials of the Volkswagen business in St. Croix have been overlooked. * * ” The jury could have found that when píaíntiff came to Puerto Rico upon receipt of this letter, he threatened to go to Germany to complain of the treatment he was receiving from defendant, and that Hinke immediately changed his attitude and offered to, and for a short period did in fact, lend assistance to plaintiff. In January 1962, plaintiff opened up a new showroom, which, the jury could have found, was attractive in appearance and favorably displayed Volkswagen automobiles. On September 24,1962 defendant wrote to plaintiff that all business relations between them had terminated for cause as of August 31, 1962.
To render a verdict in plaintiff’s favor, the jury would have had not only to disbelieve contradictory testimony, but also to conclude that certain of defendant’s conduct, superficially inconsistent with the motives plaintiff ascribes to defendant, was intentionally contrived to disguise defendant’s true purposes. Some of defendant’s conduct could lead a reasonable jury to that conclusion. For example, the jury might have found unconvincing and contrived Hinke’s claim that he first came to St. Croix in the fall of 1960 because he was concerned with a “strong backward trend in the sales,” in view of the fact that the sales up to his arrival in St. Croix were twice those of the previous year, and that any decline in sales from the high point of the-early months followed the usual seasonal trend of the four years in which plaintiff had been in business. The jury might further have believed that other criticisms of the plaintiff’s operation— for example, that his servicing was poor —were false, or exaggerated.
We could agree with defendant that discussions with other persons looking ‘towards their taking over a franchise, are not only not inconsistent with a claim that the dealer’s performance was inadequate, but would be only natural. The case at bar was unusual, however, in that the contemplated change-over was one in which the defendant would share. On Hinke’s own testimony, this would have been “a negative situation * * * very much contrary to our doings. We feel always that we should not enter the retail field.” The jury might well have found inadequately explained why, in the light of this protestation, defendant sought to establish a new dealership in which it was to participate. The jury could well find that the initially threatened termination was not in good faith. With this as a background, we believe that on the record as a whole there was a jury question whether defendant’s termination of the franchise related to the conduct of plaintiff’s agency, or to his rejection of the defendant as a partner upon unreasonable terms. If the latter, it was a clear violation of the Dealers’ Act.
Defendant next contends that the Dealers’ Act “is unconstitutional both by virtue of its arbitrary distinctions unrelated to the public interest and because of the vagueness of the standard of conduct which it purports to legislate.”
Defendant cites no cases in support of its first argument and we doubt that it could find substantial support in any case decided within, at least, the last quarter century. The legislation was enacted in the context of committee findings of widespread abuse by automobile manufacturers of their franchised dealers. H.R.Rep. No. 2850, 84th Cong., 2d Sess. (1956); S.Rep. No. 2073, 84th Cong., 2d Sess. (1956), U.S.Code of Congressional and Administrative News 1956, p. 4596. It is clearly responsive to this problem, and not only gives protection to the approximately 40,000 franchised automobile dealers in the United States — a sufficient “public purpose” in itself — but could be found to redound to the ultimate benefit of the public at large. See 102 Cong.Rec. 4848, 7482 (1956).
For its second point, defendant relies chiefly on General Motors Corp. v. Blevins, D.Colo., 1956, 144 F. Supp. 381, which struck down an analogous state statute. Although Blevins involved penal sanctions, and “the standards of certainty in statutes punishing for offenses is higher than in those depending primarily upon civil sanctions for enforcement,” Winters v. People of State of New York, 1948, 333 U.S. 507, 515, 68 S.Ct. 665, 670, 92 L.Ed. 840, we will not say that a civil statute could not be so vague as to offend the due process clause. Without expressing any view as to the correctness of Blevins, however, we think it is significantly different from the case at bar. The state legislation punished a manufacturer who “unfairly, without due regard to the equities of said dealer and without just provocation, can-celled the franchise of any motor vehicle dealer.” While the federal Dealers’ Act imposes a requirement of “good faith,” section 1221(e), as we discussed at some length above, narrows the meaning of that term to a considerable extent. It may be true that the statute in effect delegates some responsibility to the courts to refine and develop standards under the act on a case-by-case basis, but this is neither unusual nor unconstitional. Cf. Textile Workers Union of America v. Lincoln Mills, 1957, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972. Whatever might be said about the Dealers’ Act if it subjected a manufacturer to criminal penalties, we hold that it is sufficiently clear to withstand a constitutional challenge of vagueness. Blenke Brothers Co. v. Ford Motor Co., N.D. Ind., 1962, 203 F.Supp. 670.
Defendant raises a number of less fundamental questions, all of which we have considered, but only one of which merits comment. This relates to the alleged prejudicial behavior of the trial court. Review of the record reveals nothing of any possible moment, except ford1 some occasional sharp remarks to defendant’s counsel. The reason, and justification, for these remarks, however, is quite apparent. It is inappropriate for counsel to complain of -treatment he has invited, particularly when that treatment is well within responsive limits. We have said before, and we repeat, such claims should not be made at all unless they are very sound. The proposition that counsel can disregard the court’s instructions, obtain a rebuke, and then preserve the incident as insurance in the event the case is lost, does not sit well.
There remains the matter of damages. Perhaps the best introduction to the subject is to mention two of the more extraordinary of the arguments made in this court. Defendant contends that the plaintiff’s income tax return should not be considered because it was introduced “by the defendant” (ital. in orig.), and would not have been competent if offered by the plaintiff. It is true that this, and some other evidence in fact favorable to the plaintiff, was introduced by the defendant, but it is a novel concept that evidence is available only to the party who introduces it. Plaintiff evens the score, however, by arguing that possible errors in the court’s charge as to certain items of damages need not be noticed because the jury might have reached the equivalent monetary result by some other route. This argument is not quite so original, but no better. Neither it, nor any other argument can overcome the court’s error in permitting the jury to find that if plaintiff had received the last 117 cars he had ordered (for only 25 of which he had firm orders from customers), his profit on all 117 would have been the same as the gross mark-up. Manifestly there would have been some expense, even if all had ultimately been sold. It was likewise error, particularly when defendant had expressly offered to take useless parts and inventory off plaintiff’s hands, for the court to refuse to charge on plaintiff’s duty to mitigate the damages which plaintiff claimed for being left with this material.
These were substantial errors. The court also erred in charging the jury that the contract had never been terminated. The basic agreement may have been automatically renewed in 1961 and 1962, but defendant’s unequivocal letter of September 24, 1962 clearly operated to terminate the franchise.
Whether defendant adequately saved its rights with respect to certain other damage matters we need not determine. Since we hold there must be a new trial on this issue, we will consider them in any event. We think the court was exceptionally liberal in permitting the plaintiff to testify to figures concerning his profits and the value of the franchise off the top of his head, without reference to books and records. Possibly the defendant's only remedy was cross-examination. Possibly, too, before another trial, the defendant will want to take plaintiff’s deposition in St. Croix where the records are. Second, we find most unrealistic plaintiff’s self-evaluation of his franchise on a 6% basis in his brief before us, so that an income of $18,000 made it worth $300,000. This was surely impermissible when $18,000 was plaintiff’s best year, and in the next he lost $12,000. As we look at the record as a whole, more evidence, and a detailed explanatory charge, should have been required on any franchise valuation claim.
Finally, we find no basis in the Dealers’ Act for allowing plaintiff to recover damages for injury to his reputation caused by the termination. The parties have given us no assistance here, but we think a close analogy can be found in the rule that such damages cannot be recovered for breach of an employment contract. Mastoras v. Chicago, M. & St. P. Ry., W.D.Wash. 1914, 217 F. 153; Sinclair v. Positype Corp. of America, 1933, 237 App.Div. 525, 261 N.Y.S. 900. Plaintiff should not have been allowed to claim that the mere termination of his dealership was a personal reflection.
Judgment will be entered vacating the judgment of the District Court and the verdict of the jury insofar as it made an assessment of the damages. The finding of liability will stand and a new trial ordered on the issue of damages.
. Suit may be brought in any district in which the defendant “resides, or is found, or has an agent.” 15 U.S.C. § 1222.
. We note that standardization of franchises is common not only within the operations of a particular manufacturer or distributor, but in the automobile industry as a whole. Kessler, Automobile Dealer Franchises: Vertical Integration by Contract, 66 Tale L.J. 1135, 1138-39 (1957).
. Plaintiff’s listing these alleged losses in his brief to justify the size of the verdict was, accordingly, improper.
. Throughout the record, Hinke and defendant are referred to interchangeably. The jury could have found that the interest was to be defendant’s, and not Hinke’s personally.
. In view of plaintiff’s restatement of Hinke’s proposal in a letter of February 6, 1961, to Hinke, a jury could not have found that defendant proposed that all of the assets of plaintiff’s present dealership were to be transferred to the new enterprise. In particular, the new dealership was to have a new building at a different site. The jury could have found, however, that defendant required that plaintiff invest $37,000 in addition to whatever part of its present investment would be transferred to the new enterprise.
. They were also substantially greater than 1957, and only slightly below the sales for 1958.
. Defendant complains because plaintiff was permitted to introduce testimony, following Hinke’s above-quoted statement on direct, that defendant, after unsuccessfully attempting to buy into the business of its Puerto Rico dealer, cancelled the franchise and substituted VWPR. Defendant may be correct that this- incident would not be admissible to contradict Hinke’s statement that defendant’s “general policy” was not to terminate dealerships. But it was certainly admissible to rebut Hinke’s claim that defendant had no interest in participating in plaintiff’s business because it never entered the retail market.
. An even more pretentious argument was made to the jury.
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
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sc_adminaction_is
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A
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify whether administrative action occurred in the context of the case prior to the onset of litigation. The activity may involve an administrative official as well as that of an agency. To determine whether administration action occurred in the context of the case, consider the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations.
RUMSFELD, SECRETARY OF DEFENSE v. PADILLA et al.
No. 03-1027.
Argued April 28, 2004 —
Decided June 28, 2004
Deputy Solicitor General Clement argued the cause for petitioner. With him on the briefs were Solicitor General Olson, Sri Srinivasan, and Jonathan L. Marcus.
Jennifer S. Martinez argued the cause for respondents. With her on the brief were Donna R. Newman, Andrew G. Patel, Jonathan M. Freiman, David W. DeBruin, William M. Hohengarten, and Matthew Hersh.
Briefs of amici curiae urging reversal were filed for the Commonwealth of Virginia by Jerry W. Kilgore, Attorney General of Virginia, William H. Hurd, State Solicitor, Maureen Riley Matsen and William E. Thro, Deputy State Solicitors, Alison P. Landry, Senior Assistant Attorney General, and Courtney M. Malveaux and Russell E. McGuire, Assistant Attorneys General; for the American Center for Law & Justice by Jay Alan Sekulow, Thomas P. Monaghan, Stuart J. Roth, Colby M. May, James M. Henderson, Sr., Joel H. Thornton, and Robert W. Ash; for the Cato Institute by Timothy Lynch; for the Criminal Justice Legal Foundation by Kent S. Scheidegger; and for the Washington Legal Foundation et al. by Daniel J. Popeo and Richard A. Samp.
Briefs of amici curiae urging affirmance were filed for the American Civil Liberties Union et al. by Steven R. Shapiro, Sharon M. McGowan, Lucas Guttentag, Robin L. Goldfaden, Arthur N. Eisenberg, Arthur H. Bryant, and Rebecca E. Epstein; for the Association of the Bar of the City of New York et al. by Joseph Gerard Davis; for the Beverly Hills Bar Association et al. by Bridget Arimond, Stephen F. Rohde, and Marc J. Poster; for the Center for National Security Studies et al. by John Payton, Seth P. Waxman, Paul R. Q. Wolf son, Kate Martin, and Joseph Onek; for Global Rights by James F. Fitzpatrick, Kathleen A. Behan, and Gay J. McDougall; for Others Are Us et al. by Jonathan D. Wallace; for the Rutherford Institute et al. by Carter G. Phillips, Mark E. Haddad, Joseph R. Guerra, and Elliot M. Mincberg; for the Spartacist League et al. by Rachel H. Wolkenstein; for Bruce A. Ackerman et al. by Jules Lobel, Bar- barn Olshansky, Nancy Chang, and Shayana Kadidal; for Susan Akram et al. by Daniel Kanstroom; for Philip Alston et al. by David N Rosen, Homer E. Moyer, Jr., and Michael T. Brady; for the Honorable John Con-yers, Jr., et al. by Brian S. Koukoutchos; for Samuel R. Gross et al. by Jonathan L. Hafetz, Lawrence S. Lustberg, and Michael J. Wishnie; for Louis Henkin et al. by Donald Francis Donovan, Carl Micarelli, and J. Paul Oetken; for Fred Korematsu et al. by Arturo J. González and Jon B. Streeter; and for Janet Reno et al. by Robert S. Litt and Theodore D. Frank.
Briefs of amici curiae were filed for the National Association of Criminal Defense Lawyers et al. by Donald G. Rehkopf, Jr., and Lisa B. Kemler; for the Public Defender Service for the District of Columbia by Catharine F. Easterly, Giovanna Shay, and Timothy P. O’Toole; for William J. Aceves et al. by Linda A. Malone and Jordan J. Paust; for Payam Akhavan et al. by Allison Marston Danner; for the Honorable Shirley M. Huf-stedler et al. by Robert P. LoBue; and for David J. Scheffer et al. by Mr. Scheffer, pro se.
A brief of amici curiae urging affirmance in No. 03-6696, Hamdi et al. v. Rumsfeld, Secretary of Defense, et al., post, p. 507, and reversal in No. 03-1027 was filed for Senator John Cornyn et al. by Senator Cornyn, pro se.
Chief Justice Rehnquist
delivered the opinion of the Court.
Respondent Jose Padilla is a United States citizen detained by the Department of Defense pursuant to the President’s determination that he is an “enemy combatant” who conspired with al Qaeda to carry out terrorist attacks in the United States. We confront two questions: First, did Padilla properly file his habeas petition in the Southern District of New York; and second, did the President possess authority to detain Padilla militarily. We answer the threshold question in the negative and thus do not reach the second question presented.
Because we do not decide the merits, we only briefly recount the relevant facts. On May 8, 2002, Padilla flew, from Pakistan to Chicago’s O’Hare International Airport. As he stepped off the plane, Padilla was apprehended by federal agents executing a material witness warrant issued by the United States District Court for the Southern District of New York (Southern District) in connection with its grand jury investigation into the September 11th terrorist attacks. Padilla was then transported to New York, where he was held in federal criminal custody. On May 22, acting through appointed counsel, Padilla moved to vacate the material witness warrant.
Padilla’s motion was still pending when, on June 9, the President issued an order to Secretary of Defense Donald H. Rumsfeld designating Padilla an “enemy combatant” and directing the Secretary to detain him in military custody. App. D to Brief for Petitioner 5a (June 9 Order). In support of this action, the President invoked his authority as “Commander in Chief of the U. S. armed forces” and the Authorization for Use of Military Force Joint Resolution, Pub. L. 107-40, 115 Stat. 224 (AUMF), enacted by Congress on September 18, 2001. June.9 Order 5a. The President also made several, factual findings explaining his decision to designate Padilla an enemy combatant. Based on these findings, the President concluded that it is “consistent with U. S. law and the laws of war for the Secretary of Defense to detain Mr. Padilla as an enemy combatant.” Id., at 6a.
That same day, Padilla was taken into custody by Department of Defense officials and transported to the Consolidated Naval Brig in Charleston, South Carolina. He has been held there ever since.
On June 11, Padilla’s counsel, claiming to act as his next friend, filed in the Southern District a habeas corpus petition under 28 U. S. C. §2241. The petition, as amended, alleged that Padilla’s military detention violates the Fourth, Fifth, and Sixth Amendments and the Suspension Clause, Art. I, § 9, cl. 2, of the United States Constitution. The amended petition named as respondents President Bush, Secretary Rumsfeld, and Melanie A. Marr, Commander of the Consolidated Naval Brig.
The Government moved to dismiss, arguing that Commander Marr, as Padilla’s immediate custodian, is the only proper respondent to his habeas petition, and that the District Court lacks jurisdiction over Commander Marr because she is located outside the Southern District. On the merits, the Government contended that the President has authority to detain Padilla militarily.pursuant to the Commander in Chief Clause of the Constitution, Art. II, §2, cl. 1, the congressional AUMF, and this Court’s decision in Ex parte Quirin, 317 U. S. 1 (1942).
The District Court issued its decision in December 2002. Padilla ex rel. Newman v. Bush, 233 F. Supp. 2d 564. The court held that the Secretary’s “personal involvement” in Padilla’s military custody renders him a proper respondent to Padilla’s habeas petition, and that it can assert jurisdiction over the Secretary under New York’s long-arm statute, notwithstanding his absence from the Southern District. Id., at 581-587. On the merits, however, the court accepted the Government’s contention that the President has authority to detain as enemy combatants citizens captured on American soil during a time of war. Id., at 58T-599.
The Court of Appeals for the Second Circuit reversed. 352 F. 3d 695 (2003). The court agreed with the District Court that Secretary Rumsfeld is a proper respondent, reasoning that in cases where the habeas petitioner is detained for “other than federal criminal violations, the Supreme Court has recognized exceptions to the general practice of naming the immediate physical custodian as respondent.” Id., at 704-708. The Court of Appeals concluded that on these “unique” facts Secretary Rumsfeld is Padilla’s custodian because he exercises “the legal reality of control” over Padilla and because he was personally involved in Padilla’s military detention. Id., at 707-708. The Court of Appeals also affirmed the District Court’s holding that it has jurisdiction over the Secretary under New York’s long-arm statute. Id., at 708-710.
Reaching the merits, the Court of Appeals held that the President lacks authority to detain Padilla militarily. Id., at 710-724. The court concluded that neither the President’s Commander in Chief power nor the AUMF authorizes military detentions of American citizens captured on American soil. Id., at 712-718, 722-723. To the contrary, the Court of Appeals found in both our case law and in the Non-Detention Act, 18 U. S. C. § 4001(a), a strong presumption against domestic military detention of citizens absent explicit congressional authorization. 352 F. 3d, at 710-722. Accordingly, the court granted the writ of habeas corpus and directed the Secretary to release Padilla from military custody within 30 days. Id., at 724.
We granted the Government’s petition for certiorari to review the Court of Appeals’ rulings with respect to the jurisdictional and the merits issues, both of which raise important questions of federal law. 540 U. S. 1173 (2004).
The question whether the Southern District has jurisdiction over Padilla’s habeas petition breaks down into two related subquestions. First, who is the proper respondent to that petition? And second, does the Southern District have jurisdiction over him or her? We address these questions in turn.
I
The federal habeas statute straightforwardly provides that the proper respondent to a habeas petition is “the person who has custody over [the petitioner].” 28 U. S. C. §2242; see also §2243 (“The writ, or order to show cause shall be directed to the person having custody of the person detained”). The consistent use of the definite article in reference to the custodian indicates that there is generally only one proper respondent to a given prisoner’s habeas petition. This custodian, moreover, is “the person” with the ability to produce the prisoner’s body before the habeas court. Ibid. We summed up the plain language of the habeas statute over 100 years ago in this way: “[Tjhese provisions contemplate a proceeding against some person who has the immediate custody of the party detained, with the power to produce the. body of such party before the court or judge, that he may be liberated if no sufficient reason is shown to the contrary.” Wales v. Whitney, 114 U. S. 564, 574 (1885) (emphasis added); see also Braden v. 80th Judicial Circuit Court of Ky., 410 U. S. 484, 494-495 (1973) (“The writ of habeas corpus” acts upon “the person who holds [the detainee] in what is alleged to be unlawful custody,” citing Wales, supra, at 574); Braden, supra, at 495 (“ ‘[T]his writ... is directed to... [the] jailer,’ ” quoting In re Jackson, 15 Mich. 417, 439-440 (1867)).
In accord with the statutory language and Wales' immediate custodian rule, longstanding practice confirms that in ha-beas challenges to present physical confinement — “core challenges” — the default rule is that the proper respondent is the warden of the facility where the prisoner is being held, not the Attorney General or some other remote supervisory official. See, e. g., Hogan v. Hanks, 97 F. 3d 189, 190 (CA7 1996); Brittingham v. United States, 982 F. 2d 378, 379 (CA9 1992); Blango v. Thornburgh, 942 F. 2d 1487, 1491-1492 (CA10 1991) (per curiam); Brennan v. Cunningham, 813 F. 2d 1, 12 (CA1 1987); Guerra v. Meese, 786 F. 2d 414, 416 (CADC 1986) (per curiam); Billiteri v. United States Bd. of Parole, 541 F. 2d 938, 948 (CA2 1976); Sanders v. Bennett, 148 F. 2d 19, 20 (CADC 1945); Jones v. Biddle, 131 F. 2d 853, 854 (CA8 1942). No exceptions to this rule, either recognized or proposed, see post, at 454 (Kennedy, J., concurring), apply here.
If the Wales immediate custodian rule applies in this case, Commander Marr — the equivalent of the warden at the military brig — is the proper respondent, not Secretary Rumsfeld. See Al-Marri v. Rumsfeld, 360 F. 3d 707, 708-709 (CA7 2004) (holding in the case of an alleged enemy combatant detained at the Consolidated Naval Brig, the proper respondent is Commander Marr, not Secretary Rumsfeld); Monk v. Secretary of the Navy, 793 F. 2d 364, 369 (CADC 1986) (holding that the proper respondent in a habeas action brought by a military prisoner is the commandant of the military detention facility, not the Secretary of the Navy); cf. 10 U. S. C. § 951(c) (providing that the commanding officer of a military correctional facility “shall have custody and control” of the prisoners confined therein). Neither Padilla, nor the courts below, nor Justice Stevens’ dissent deny the general applicability of the immediate custodian rule to habeas petitions challenging physical custody. Post, at 458. They argue instead that the rule is flexible and should not apply on the “unique facts” of this case. Brief for Respondents 44. We disagree.
First, Padilla notes that the substantive holding of Wales — that a person released on his own recognizance is not “in custody” for habeas purposes — was disapproved in Hensley v. Municipal Court, San Jose-Milpitas Judicial Dist, Santa Clara Cty., 411 U. S. 345, 350, n. 8 (1973), as part of this Court’s expanding definition of “custody” under the habeas statute. Padilla seems to contend, and the dissent agrees, post, at 461-462, that because we no longer require physical detention as a prerequisite to habeas relief, the immediate custodian rule, too, must no longer bind us, even in challenges to physical custody. That argument, as the Seventh Circuit aptly concluded, is a “non sequitur.” Al-Marri, supra, at 711. That our understanding of custody has broadened' to include restraints short of physical confinement does nothing to undermine the rationale or statutory foundation of Wales’ immediate custodian rule where physical custody is at issue. Indeed, as the cases cited above attest, it has consistently been applied in this core habeas context within the United States.
The Court of Appeals’ view that we have relaxed the immediate custodian rule in cases involving prisoners detained for “other than federal criminal violations,” and that in such cases the proper respondent is the person exercising the “legal reality of control” over the petitioner, suffers from the same logical flaw. 352 F. 3d, at 705, 707. Certainly the statute itself makes no such distinction based on the source of the physical detention. Nor does our case law support a deviation from the immediate custodian rule here. Rather, the cases cited by Padilla stand for the simple proposition that the immediate physical custodian rule, by its terms, does not apply when a habeas petitioner challenges something other than his present physical confinement.
In Braden, for example, an Alabama prisoner filed a ha-beas petition in the Western District of Kentucky. He did not contest the validity of the Alabama conviction for which he was confined, but instead challenged a detainer lodged against him in Kentucky state court. Noting that petitioner sought to challenge a “confinement that would be imposed in the future,” we held that petitioner was “in custody” in Kentucky by virtue of the detainer. 410 U. S., at 488-489. In these circumstances, the Court held that the proper respondent was not the prisoner’s immediate physical custodian (the Alabama warden), but was instead the Kentucky court in which the detainer was lodged. This made sense because the Alabama warden was not “the person who [held] him in what [was] alleged to be unlawful custody.” Id., at 494-495 (citing Wales, 114 U. S., at 574); Hensley, supra, at 351, n. 9 (observing that the petitioner in Braden “was in the custody of Kentucky officials for purposes of his habeas corpus action”). Under Braden, then, a habeas petitioner who challenges a form of “custody” other than present physical confinement may name as respondent the entity or person who exercises legal control with respect to the challenged “custody.” But nothing in Braden supports departing from the immediate custodian rule in the traditional context of challenges to present physical confinement. See Al-Marri, supra, at 711-712; Monk, supra, at 369. To the contrary, Braden cited Wales favorably and reiterated the traditional rule that a prisoner seeking release from confinement must sue his “jailer.” 410 U. S., at 495 (internal quotation marks omitted).
For the same reason, Strait v. Laird, 406 U. S. 341 (1972), does not aid Padilla. Strait involved an inactive reservist domiciled in California who filed a §2241 petition seeking relief from his military obligations. We noted that the reservist’s “nominal” custodian was a commanding officer in Indiana who had charge of petitioner’s Army records. Id., at 344. As in Braden, the immediate custodian rule had no application because petitioner was not challenging any present physical confinement.
In Braden and Strait, the immediate custodian rule did not apply because there was no immediate physical custodian with respect to the “custody” being challenged. That is not the case here: Commander Marr exercises day-to-day control over Padilla’s physical custody. We have never intimated that a habeas petitioner could name someone other than his immediate physical custodian as respondent simply because the challenged physical custody does not arise out of a criminal conviction. Nor can we do so here just because Padilla’s physical confinement stems from a military order by the President.
It follows that neither Braden nor Strait supports the Court of Appeals’ conclusion that Secretary Rumsfeld is the proper respondent because he exercises the “legal reality of control” over Padilla. As we have explained, identification of the party exercising legal control only comes into play when there is no immediate physical custodian with respect to the challenged “custody.” In challenges to present physical confinement, we reaffirm that the immediate custodian, not a supervisory official who exercises legal control, is the proper respondent. If the “legal control” test applied to physical-custody challenges, a convicted prisoner would be able to name the State or the Attorney General as a respondent to a §2241 petition. As the statutory language, established practice, and our precedent demonstrate, that is not the case.
At first blush Ex parte Endo, 323 U. S. 283 (1944), might seem to lend support to Padilla’s “legal control” argument. There, a Japanese-American citizen interned in California by the War Relocation Authority (WRA) sought relief by filing a §2241 petition in the Northern District of California, naming as a respondent her immediate custodian. After she filed the petition, however, the Government moved her to Utah. Thus, the prisoner’s immediate physical custodian was no longer within the jurisdiction of the District Court. We held, nonetheless, that the Northern District “acquired jurisdiction in this case and that [Endo’s] removal... did not cause it to lose jurisdiction where a person in whose custody she is remains within the district.” Id., at 306. We held that, under these circumstances, the assistant director of the WRA, who resided in the Northern District, would be an “appropriate respondent” to whom the District Court could direct the writ. Id., at 304-305.
While Endo did involve a petitioner challenging her present physical confinement, it did not, as Padilla and Justice Stevens contend, hold that such a petitioner may properly name as respondent someone other than the immediate physical custodian. Post, at 461-462 (citing Endo as supporting a “more functional approach” that allows habeas petitioners to name as respondent an individual with “control” over the petitioner). Rather, the Court’s holding that the writ could be directed to a supervisory official came not in our holding that the District Court initially acquired jurisdiction — it did so because Endo properly named her immediate custodian and filed in the district of confinement — but in our holding that the District Court could effectively grant habeas relief despite the Government-procured absence of petitioner from the Northern District. Thus, Endo stands for the important but limited proposition that when the Government moves a habeas petitioner after she properly files a petition naming her immediate custodian, the District Court retains jurisdiction and may direct the writ to any respondent within its jurisdiction who has legal authority to effectuate the prisoner’s release.
Endo’s holding does not help respondents here. Padilla was moved from New York to South Carolina before his lawyer filed a habeas petition on his behalf. Unlike the District Court in Endo, therefore, the Southern District never acquired jurisdiction over Padilla’s petition.
Padilla’s argument reduces to a request for a new exception to the immediate custodian rule based upon the “unique facts” of this case. While Padilla’s detention is undeniably unique in many respects, it is at bottom a simple challenge to physical custody imposed by the Executive — the traditional core of the Great Writ. There is no indication that there was any attempt to manipulate behind Padilla’s transfer — he was taken to the same facility where other al Qaeda members were already being held, and the Government did not attempt to hide from Padilla’s lawyer where it had taken him. Infra, at 449-450, and n. 17; post, at 454 (Kennedy, J., concurring). His detention is thus not unique in any way that would provide arguable basis for a departure from the immediate custodian rule. Accordingly, we hold that Commander Marr, not Secretary Rumsfeld, is Padilla’s custodian and the proper respondent to his habeas petition.
II
We turn now to the second subquestion. District courts are limited to granting habeas relief “within their respective jurisdictions.” 28 U. S. C. § 2241(a). We have interpreted this language to require “nothing more than that the court issuing the writ have jurisdiction over the custodian.” Bra-den, 410 U. S., at 495. Thus, jurisdiction over Padilla’s ha-beas pétition lies in the Southern District only if it has jurisdiction over Commander Marr. We conclude it does not.
Congress added the limiting clause — “within their respective jurisdictions” — to the habeas statute in 1867 to avert the “inconvenient [and] potentially embarrassing” possibility that “every judge anywhere [could] issue the Great Writ on behalf of applicants far distantly removed from the courts whereon they sat.” Carbo v. United States, 364 U. S. 611, 617 (1961). Accordingly, with respect to habeas petitions “designed to relieve an individual from oppressive confinement,” the traditional rule has always been that the Great Writ is “issuable only in the district of confinement.” Id., at 618.
Other portions of the habeas statute support this, commonsense reading of § 2241(a). For example, if a petitioner seeks habeas relief in the court of appeals, or from this Court or a Justice thereof, the petition must “state the reasons for not making application to the district court of the district in which the applicant is held.” 28 U. S. C. §2242 (emphases added). Moreover, the court of appeals, this Court, or a Justice thereof “may decline to entertain an application for a writ of habeas corpus and may transfer the application... to the district court having jurisdiction to entertain it.” § 2241(b) (emphasis added). The Federal Rules similarly provide that an “application for a writ of habeas corpus must be made to the appropriate district court.” Fed. Rule App. Proc. 22(a) (emphasis added).
Congress has also legislated against the background of the “district of confinement” rule by fashioning explicit exceptions to the rule in certain circumstances. For instance, § 2241(d) provides that when a petitioner is serving a state criminal sentence in a State that contains more than one federal district, he may file a habeas petition not only “in the district court for the district wherein [he] is in custody,” but also “in the district court for the district within which the State court was held which convicted and sentenced him”; and “each of such district courts shall have concurrent jurisdiction to entertain the application.” Similarly, until Congress directed federal criminal prisoners to file certain post-conviction petitions in the sentencing courts by adding § 2255 to the habeas statute, federal prisoners could litigate such collateral attacks only in the district of confinement. See United States v. Hayman, 342 U. S. 205, 212-219 (1952). Both of these provisions would have been unnecessary if, as the Court of Appeals believed, § 2241’s general habeas provisions permit a prisoner to file outside the district of confinement.
The plain language of the habeas statute thus confirms the general rule that for core habeas petitions challenging present physical confinement, jurisdiction lies in only one district: the district of confinement. Despite this ample statutory and historical pedigree, Padilla contends, and the Court of Appeals held, that the district of confinement rule no longer applies to core habeas challenges. Rather, Padilla, as well as today’s dissenters, post, at 462-464, urge that our decisions in Braden and Strait stand for the proposition that jurisdiction will lie in any district in which the respondent is amenable.to service of process. We disagree.
Prior to Braden, we had held that habeas jurisdiction depended on the presence of both the petitioner and his custodian within the territorial confines of the district court. See Ahrens v. Clark, 335 U. S. 188, 190-192 (1948). By allowing an Alabama prisoner to challenge a Kentucky detainer in the Western District of Kentucky, Braden changed course and held that habeas jurisdiction requires only “that the court issuing the writ have jurisdiction over the custodian.” 410 U. S., at 495.
But we fail to see how Braden's requirement of jurisdiction over the respondent alters the district of confinement rule for challenges to present physical custody. Braden itself did not involve such a challenge; rather, Braden challenged his future confinement in Kentucky by suing his Kentucky custodian. We reasoned that “[u]nder these circumstances it would serve no useful purpose to apply the Ahrens rule and require that the action be brought in Alabama.” Id., at 499. In habeas challenges to present physical confinement, by contrast, the district of confinement is synonymous with the district court that has territorial jurisdiction over the proper respondent. This is because, as we have held, the immediate custodian rule applies to core habeas challenges to presr ent physical custody. By definition, the immediate custodian and the prisoner reside in the same district.
Rather than focusing on the holding and historical context of Braden, Justice Stevens, post, at 462, like the Court of Appeals, seizes on dicta in which we referred to “service of process” to contend that the Southern District could assert jurisdiction over Secretary Rumsfeld under New York’s long-arm statute. See Braden, 410 U. S., at 495 (“So long as the custodian can be reached by service of process, the court can issue a writ ‘within its jurisdiction’... even if the prisoner himself is confined outside the court’s territorial jurisdiction”). But that, dicta did not indicate that a custodian may be served with process outside of the district court’s territorial jurisdiction. To the contrary, the facts and holding of Braden dictate the opposite inference. Braden served his Kentucky custodian in Kentucky. Accordingly, we concluded that the Western District of Kentucky had jurisdiction over the petition “since the respondent was properly served in that district.” Id., at 500 (emphasis added); see also Endo, 323 U. S., at 304-305 (noting that the court could issue the writ to a WRA official “whose office is at San Francisco, which is in the jurisdiction of the [Northern District of California]”)- Thus, Braden in no way authorizes district courts to employ long-arm statutes to gain jurisdiction over custodians who are outside of their territorial jurisdiction. See Al-Marri, 360 F. 3d, at 711; Guerra, 786 F. 2d, at 417. Indeed, in stating its holding, Braden favorably cites Schlanger v. Seamans, 401 U. S. 487 (1971), a case squarely holding that the custodian’s absence from the territorial jurisdiction of the district court is fatal to habeas jurisdiction. 410 U. S., at 500. Thus, Braden does not derogate from the traditional district of confinement rule for core habeas petitions challenging present physical custody.
The Court of Appeals also thought Strait supported its long-arm approach to habeas jurisdiction. But Strait offers even less help than Braden. In Strait, we held that the Northern District of California had jurisdiction over Strait’s “nominal” custodian — the commanding officer of the Army records center — even though he was physically located in Indiana. We reasoned that the custodian was “present” in California “through the officers in the hierarchy of the command who processed [Strait’s] application for discharge.” 406 U. S., at 345. The Strait Court contrasted its broad view of “presence” in the case of a nominal custodian with a “ ‘commanding officer who is responsible for the day to day control of his subordinates,’ ” who would be subject to habeas jurisdiction only in the district where he physically resides. Ibid, (quoting Arlen v. Laird, 451 F. 2d 684, 687 (CA2 1971)).
The Court of Appeals, much like Justice Stevens’ dissent, reasoned that Secretary Rumsfeld, in the same way as Strait’s commanding officer, was “present” in the Southern District through his subordinates who took Padilla into military custody. 352 F. 3d, at 709-710; post, at 462. We think not.
Strait simply has no application to the present case. Strait predated Braden, so the then-applicable Ahrens rule required that both the petitioner and his custodian be present in California. Thus, the only question was whether Strait’s commanding officer was present in California notwithstanding his physical absence from the district. Distinguishing Schlanger, supra, we held that it would “exalt fiction over reality” to require Strait to sue his “nominal custodian” in Indiana when Strait had always resided in California and had his only meaningful contacts with the Army there.. 406 U. S., at 344-346. Only under these limited circumstances did we invoke concepts of personal jurisdiction to hold that the custodian was “present” in California through the actions of his agents. Id., at 345.
Here, by contrast, Padilla seeks to challenge his present physical custody in South Carolina. Because the immediate custodian rule applies to such habeas challenges, the proper respondent is Commander Marr, who is also present in South Carolina. There is thus no occasion to designate a “nominal” custodian and determine whether he or she is “present” in the same district as petitioner. Under Bra-den and the district of confinement rule, as we have explained, Padilla must file his habeas action in South Carolina. Were we to extend Strait’s limited exception to the territorial nature of habeas jurisdiction to the context of physical-custody challenges, we would undermine, if not negate, the purpose of Congress in amending the habeas statute in 1867.
The proviso that district courts may issue the writ only “within their respective jurisdictions” forms an important corollary to the immediate custodian rule in challenges to present physical custody under § 2241. Together they compose a simple rule that has been consistently applied in the lower courts, including in the context of military detentions: Whenever a §2241 habeas petitioner seeks to challenge his present physical custody within the United States, he should name his warden as respondent and file the petition in the district of confinement. See Al-Marri, supra, at 710, 712 (alleged enemy combatant detained at Consolidated Naval Brig must file petition in the District of South Carolina; collecting cases dismissing §2241 petitions filed outside the district of confinement); Monk, 793 F. 2d, at 369 (court-martial convict must file in district of confinement).
This rule, derived from the terms of the habeas statute, serves the important purpose of preventing forum shopping by habeas petitioners. Without it, a prisoner could name a high-level supervisory official as respondent and then sue that person wherever he is amenable, to long-arm jurisdiction. The result would be rampant forum shopping, district courts with overlapping jurisdiction, and the very inconvenience, expense, and embarrassment Congress sought to avoid when it added the jurisdictional limitation 137 years ago.
Ill
Justice Stevens’ dissent, not unlike the Court of Appeals’ decision, rests on the mistaken belief that we have made various exceptions to the immediate custodian and district of confinement rules whenever “exceptional,” “‘special,’ ” or “unusual” cases have arisen. Post, at 455,458,462, n. 5. We have addressed most of his contentions in the foregoing discussion, but we briefly touch on a few additional points.
Apparently drawing a loose analogy to Endo, Justice Stevens asks us to pretend that Padilla and his immediate custodian were present in the Southern District at the time counsel filed the instant habeas petition, thus rendering jurisdiction proper. Post, at 458-459. The dissent asserts that the Government “departed] from the time-honored practice of giving one’s adversary fair notice of an intent to present an important motion to the court,” when on June 9 it moved ex parte to vacate the material witness warrant and allegedly failed to immediately inform counsel of its intent to transfer Padilla to military custody in South Carolina. Post, at 459; cf. n. 3, supra. Constructing a hypothetical “scenario,” the dissent contends that if counsel had been immediately informed, she “would have filed the habeas application then and there,” while Padilla remained in the Southern District, “rather than waiting two days.” Post, at 458. Therefore, Justice Stevens concludes, the Government’s alleged misconduct “justifies treating the habeas application as the functional equivalent of one filed two days earlier.” Post, at 459 (“[W]e should not permit the Government to obtain a tactical advantage as a consequence of an ex parte proceeding”).
The dissent cites no authority whatsoever for its extraordinary proposition that a district court can exercise statutory jurisdiction based on a series of events that did not occur, or that jurisdiction might be premised on “punishing” alleged Government misconduct. The lower courts — unlike the dissent — did not perceive any hint of Government misconduct or bad faith that would warrant extending Endo to a case where both the petitioner and his immediate custodian were outside of the district at the time of filing. Not surprisingly, then, neither
Question: Did administrative action occur in the context of the case?
A. No
B. Yes
Answer:
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songer_appel1_3_2
|
I
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "federal government (including DC)". Your task is to determine which category of federal government agencies and activities best describes this litigant.
BOWLES v. STRICKLAND.
No. 11164.
Circuit Court of Appeals, Fifth Circuit.
Oct. 18, 1945.
Fleming James, Jr., Director, Litigation Division, O.P.A., David London, Chief, Appellate Branch, O.P.A., and Samuel Mermin, Sp. Appellate Atty., O.P.A., all of Washington, D. C., John D. Mosby, Regional Litigation Atty., of Atlanta, Ga., and Homer. C. Eberhardt, Enforcement Atty., O. P.A., of Valdosta, Ga., for appellant.
C. Baxter Jones, of Macon, Ga., and S. P. Cain, of Cairo, Ga., for appellee.
Before SIBLEY, HUTCHESON, and LEE, Circuit Judges.
LEE, Circuit Judge.
Acting under the authority of the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix, § 901 et seq., the Price Administrator, with the approval of the Secretary of Agriculture, issued, effective December 24, 1942, Price Regulation No. 291. It established the maximum sale price of Georgia cane syrup at 60$S per gallon. On or about February 1, 1943, appellee, a producer of Georgia cane syrup, allegedly sold 89 barrels of the syrup at 66% {S per gallon, resulting in a total charge over the maximum fixed in the regulation of $231.40.
In September, 1943, the Administrator brought this action against the appellee under Section 205(e) of the Act to recover three times the amount of the overcharge, or $694.20. On the motion of appellee the court below dismissed the suit on the ground that it was instituted without the prior approval of the Secretary of Agriculture and that the Administrator had no authority to bring the suit without such approval. This appeal followed.
When the suit was instituted, Section 3(e) of the Act read: “Notwithstanding any other provision of this or any other law, no action shall be taken under this Act by the Administrator or any other person with respect to any agricultural commodity without the prior approval of the Secretary of Agriculture; except that the Administrator may take such action as may be necessary under section 202 and section 205(a) and (b) to enforce compliance with any regulation, order, price schedule or other requirement with respect to an agricultural commodity which has been previously approved by the Secretary of Agriculture.”
The court below held that this language indicated that approval of the Secretary of Agriculture was necessary before the Administrator could bring a suit under Section 205(e). The Administrator counters by urging that the legislative history, the debates in Congress, and the reports of congressional committees show that the excepting clause was intended to make unnecessary the approval of the Secretary of Agriculture to enforce compliance with any regulation or price schedule with respect to an agricultural commodity which had been previously approved by the Secretary, and that 205(e) was within this construction of the statute; that the failure expressly to include Section 205(e) in the except-, ing clause was clearly a legislative oversight.
We find it unnecessary to pass upon the question thus presented. On June 30, 1944, Congress passed the Stabilization Extension Act, which contained an amendment to Section 3(e) of the Emergency Price Control Act. This amendment struck out the references to paragraphs (a) and (b) of Section 205, and made the excepting clause in Section 3(e) read: “* * * except that the Administrator may take such action as may be necessary under section 202 and section 205 to enforce compliance with any regulation, order, price schedule or other requirement with respect to an agricultural commodity which has been previously approved by the Secretary of Agriculture.”
As this amendment did not affect substantive rights, but related only to the procedural machinery provided to enforce such rights, it applied to pending as well as to future suits. See 50 American Jurisprudence, page 505, Section 482. A suit in process of appeal (as this one was on June 30, 1944) is a pending suit. Bowles v. Hasting, 5 Cir., 146 F.2d 94. The necessary effect of the amendment was to authorize the prosecution of future suits under Section 205(e), and to ratify and approve the prosecution of pending suits, brought without the prior authorization of the Secretary. It is now settled that Congress has such remedial power. Charlotte Harbor & N. R. Co. v. Welles, 260 U.S. 8, 43 S.Ct. 3, 67 L.Ed. 100; Graham et al. v. Goodcell, 282 U.S. 409, 51 S.Ct. 186, 75 L.Ed. 415; Downs v. Blount, 5 Cir., 170 F. 15, 31 L.R.A.,N.S., 1076. The judgment appealed from must, therefore, be reversed and the cause remanded.
The contention that the one-year period within which the Administrator, when authorized, could sue under the Emergency Price Control Act had run before Congress amended the Act, hence the liability created by the Act against appellee had ceased to exist before authority to sue was given the Administrator by the amendment, was neither presented to nor passed on by the court below. Until that is done, we may not consider it.
Reversed and remanded.
The Secretary’s functions under Section 3(e) were transferred by executive orders to the War Food Administrator in March and April of 1943; thus the functions of the Secretary under Section 3(e) had already been transferred to the War Food Administrator at the time this suit was brought, September 1, 1943. No one makes any point of this, nor shall we.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "federal government (including DC)". Which category of federal government agencies and activities best describes this litigant?
A. cabinet level department
B. courts or legislative
C. agency whose first word is "federal"
D. other agency, beginning with "A" thru "E"
E. other agency, beginning with "F" thru "N"
F. other agency, beginning with "O" thru "R"
G. other agency, beginning with "S" thru "Z"
H. Distric of Columbia
I. other, not listed, not able to classify
Answer:
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songer_respond1_1_2
|
C
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". Your task is to classify the scope of this business into one of the following categories: "local" (individual or family owned business, scope limited to single community; generally proprietors, who are not incorporated); "neither local nor national" (e.g., an electrical power company whose operations cover one-third of the state); "national or multi-national" (assume that insurance companies and railroads are national in scope); and "not ascertained".
DURA SYSTEMS, INC., A Pennsylvania Business Corporation, Appellant in 89-3005, v. ROTHBURY INVESTMENTS, LTD., A Canadian Corporation, Appellant in 89-3023.
Nos. 89-3005, 89-3023.
United States Court of Appeals, Third Circuit.
Argued July 17, 1989.
Decided Sept. 19, 1989.
Rehearing and Rehearing In Banc Denied Oct. 13, 1989.
As Amended Oct. 16, 1989.
John D. Eddy (argued), Eddy & Oster-man, Pittsburgh, Pa., for appellant-cross-appellee Dura Systems, Inc.
Hunter A. McGeary, Jr. (argued) and Charles W. Kenrick, Dickie, McCamey & Chilcote, P.C., Pittsburgh, Pa., for appellee-cross-appellant Rothbury Investments, Ltd.
Before STAPLETON, SCIRICA and ROSENN, Circuit Judges.
OPINION OF THE COURT
SCIRICA, Circuit Judge.
Plaintiff Dura Systems, Inc., the law firm of Eddy & Osterman and its members Thomas R. Eddy, John D. Eddy and Thomas G. Eddy, individually, appeal the district court’s imposition of Rule 11 sanctions. We will reverse the order of the district court.
I.
This is an appeal from an order of the United States district court awarding $12,-275.00 in attorneys fees and expenses to the defendant Rothbury Investments, Ltd. under Rule 11 of the Federal Rules of Civil Procedure.
The underlying lawsuit from which these Rule 11 proceedings developed arose from a written franchising agreement between Dura Systems and Rothbury Investments dated January 29, 1984. The franchising agreement granted Dura Systems the right to act as exclusive agent for Rothbury to sell franchises in the United States for the manufacture and distribution of certain patented concrete products developed by Rothbury, and established performance standards to be met by Dura Systems. On April 23, 1986, Rothbury attempted to terminate the franchising agreement on the grounds that Dura Systems had failed to meet the performance standards. In response, Dura Systems sued for a declaratory judgment establishing its right to act as exclusive franchising agent and to enjoin Rothbury from granting to any third party the right to manufacture, distribute, or sell the products. The district court granted summary judgment for Rothbury and this court affirmed. Dura Systems, Inc. v. Rothbury Investments Ltd,., 866 F.2d 1409 (3d Cir.1988).
Rothbury Investments, Ltd. is a Canadian corporation which owns certain United States patents and trademarks on a concrete retaining wall system invented by Angelo and Anthony Risi, Canadian citizens. These patents and trademarks were originally applied for and transferred to Rothbury by another Canadian corporation, Risi Stone, Ltd. Both Rothbury and Risi Stone are owned and managed by the Risis. Seeking to market and distribute the Risi retaining wall system in the United States, Rothbury entered into the franchising agreement described above with Thomas R. Eddy, an attorney, Kenneth Dehus, a former client of the Eddy’s law firm, Eddy & Osterman, and the Risis. Pursuant to the franchising agreement, the individuals agreed to form another corporation (Dura Systems) to act as Rothbury’s exclusive agent for franchising the right to manufacture and sell Risi products in the United States.
Dura Systems was thereafter incorporated on October 22, 1984 in Pennsylvania by Thomas R. Eddy. The shares of Dura Systems were to be owned one-third by the Risis, one-third by Dehus, and one-third by Thomas R. Eddy. On June 10, 1985, Thomas R. Eddy, as permitted by Pennsylvania business corporation law “elected” a board of directors for Dura Systems, which included himself and his two sons, John D. Eddy, and Thomas G. Eddy, all members of the law firm of Eddy & Osterman. The board then met and elected officers: Thomas R. Eddy, President; Kenneth Dehus, Vice-President; Angelo Risi, Vice-President; and John D. Eddy, Secretary.
In the meantime, differences arose between the franchisee and Rothbury Investments concerning the performance of the terms of the franchising agreement, ultimately resulting in the litigation referred to above. As a consequence, on May 13, 1987, the shareholders of Dura Systems met at the request of the Risis and Dehus. At the meeting, the shareholders voted, in this sequence, to (1) amend the by-laws; (2) dismiss the law firm of Eddy & Osterman as legal counsel to the corporation and hire Randal E. McCamey, Esq. as counsel to the corporation; (3) withdraw the lawsuit against Rothbury concerning the franchising agreement; (4) elect a new Board of Directors; (5) elect new officers; and (6) dissolve the corporation. As a result, McCamey filed his appearance as counsel for Dura Systems and moved to dismiss the lawsuit against Rothbury with prejudice. Thomas R. Eddy, as minority shareholder, objected to the May 13 shareholder resolutions on the grounds that they were ultra vires and unlawful. Despite the May 13 resolutions, Eddy & Osterman continued to prosecute the law suit against Rothbury by filing pleadings in the name of the corporation. Consequently, Rothbury has been obliged to retain and compensate counsel to defend the suit.
Rothbury filed its motion for Rule 11 sanctions the day after the May 13 shareholders’ meeting, alleging that:
(1) neither Dura Systems nor the law firm of Eddy & Osterman has “legal authority to institute and prosecute suit in the above matter;” and (2) Eddy & Osterman “knew or should have known that no valid basis existed for instituting a lawsuit, but nevertheless persisted in maintaining the above action without a well-grounded basis in law or fact.”
After considering both parties memoranda, the district court granted Rothbury’s motion for Rule 11 sanctions on October 11, 1988, pending Rothbury’s submission of an accounting of attorney’s fees and expenses. On January 3, 1989, the court amended its earlier order to include Plaintiff Dura Systems, the law firm of Eddy & Osterman, and attorneys Thomas R. Eddy, John D. Eddy, and Thomas G. Eddy as the parties subject to the order, and granted Rothbury $12,250.00 in attorney’s fees and expenses. Dura Systems appeals the award of counsel fees and expenses under Rule 11. Rothbury cross-appeals, seeking an increase in the amount of the awarded attorney’s fees and expenses to $30,325.00.
II.
Before we can address the merits of the district court’s decision to grant Rule 11 sanctions in this case, we must first determine whether Eddy & Osterman, and the Eddy brothers individually, may be considered parties to this appeal because they were not specifically named in the notice of appeal. The content of a notice of appeal is prescribed by Fed.R.App.P. 3(c) of the Federal Rules of Appellate Procedure:
(c) Content of the Notice of Appeal The notice of appeal shall specify the party or parties taking the appeal; shall designate the judgment, order or part thereof appealed from; and shall name the court to which the appeal is taken.... An appeal shall not be dismissed for informality of form or title of the notice of appeal.
Fed.R.App.P 3(c). Compliance with Fed.R. App.P. 3(c) is a jurisdictional prerequisite. Failure to file a notice of appeal in accordance with the specificity requirement of Fed.R.App.P. 3(c) presents a jurisdictional bar to the appeal. Torres v. Oakland Scavenger Co., — U.S.-, 108 S.Ct. 2405, 2409, 101 L.Ed.2d 285 (1988); Kowaleski v. Dep’t of Labor, 879 F.2d 1173, 1175 (3d Cir.1989).
Dura Systems was the only party named in the notice of appeal from the district court’s order imposing Rule 11 sanctions, an order which specifically named Dura Systems, the law firm of Eddy & Oster-man, and the Eddys individually, as the parties subject to the order to pay attorney’s fees and expenses. Appellees contend that this discrepancy violates the requirements of Fed.R.App.P. 3(c).
The Eddys and the law firm make several arguments in response. First, they contend that the requirements of Fed. R.App.P. 3(c) may be deemed satisfied by a Consent Order of January 31, 1989, entered by this court granting stay of the district court judgment pending appeal, in which the judgment was secured by the accounts receivable of the law firm of Eddy & Osterman. The Consent Order specifically names, in addition to Dura Systems, the law firm of Eddy & Osterman and Thomas R. Eddy, John D. Eddy and Thomas G. Eddy, individually, as parties against whom Rothbury may confess judgment in the event that this court affirms the award of attorney’s fees, and was entered within the period required for timely notice of appeal under Fed.R.App.P. 4(a)(1). Second, they claim that they could reasonably have read Fed.R.App.P. 3(c) to have required only that the named “party or parties” to the underlying action be included in the notice of appeal. This interpretation would have led them to conclude that only Dura Systems was properly named in the notice of appeal, since neither Eddy & Osterman nor the Eddys individually were originally named “parties” to the underlying action.
The sufficiency requirements of a notice of appeal under Fed.R.App.P. 3(c) were recently addressed by the United States Supreme Court in Torres v. Oakland Scavenger Co., — U.S.-, 108 S.Ct. 2405, 101 L.Ed.2d 285 (1988), in which the petitioner, as one of sixteen plaintiffs seeking to appeal the district court’s dismissal of the complaint, was not named in the notice of appeal because of a clerical error. The Court granted certiorari “to resolve a conflict in the Circuits over whether a failure to file a notice of appeal in accordance with the specificity requirement of Fed.R.App.P. 3(c) presents a jurisdictional bar to the appeal.”
In formulating its holding, the Court made clear that Rules 3 and 4 of the Federal Rules of Appellate Procedure create a jurisdictional threshold, and that the requirements of the two rules may not be abrogated for “good cause shown” under Fed.R.App.P. 2. Id. 108 S.Ct. at 2409. Moreover, the fact that Rule 3 excuses “informality of form or title” in a notice of appeal does not forgive compliance with the Rule’s requirements: “[permitting imperfect but substantial compliance with a technical requirement is not the same as waiving the requirement altogether as a jurisdictional threshold.” Id. at 2408; see also Kowaleski, 879 F.2d at 1176 (citing Allen Archery, Inc. v. Precision Shooting Equip., Inc., 857 F.2d 1176, 1177 (7th Cir.1988)) (court must insist on “punctilious, literal, and exact compliance with the requirement in Fed.R.App.P. 3(c) that the notice of appeal ‘shall specify the party or parties taking the appeal’ ”). Although the Torres Court mandated compliance with the specificity requirement of Fed.R.App.P. 3(c), it recognized that
the requirements of the rules of procedure should be liberally construed and that ‘mere technicalities’ should not stand in the way of consideration of a case on its merits. Thus, if a litigant files papers in a fashion that is technically at variance with the letter of a procedural rule, a court may nonetheless find that the litigant has complied with the rule if the litigant’s action is the functional equivalent of what the rule requires.
Id. at 2408-09 (citing Houston v. Lack, — U.S.-, 108 S.Ct. 2379, 101 L.Ed.2d 245 (1988)). This approach mirrors the practice sanctioned in the Advisory Committee Notes to the 1979 amendment to Fed.R. App.P. 3(c), which cites with approval cases holding that, “so long as the function of notice is met by the filing of a paper indicating an intention to appeal, the substance of the rule has been complied with.” Fed. R.App.R. 3(c) advisory committee’s note (citing Cobb v. Lewis, 488 F.2d 41 (5th Cir.1974); Holley v. Capps, 468 F.2d 1366 (5th Cir.1972)).
In this case, we hold that the Consent Order serves as the “functional equivalent” of what the rule requires. The Consent Order was filed within the time for filing an appeal under Fed.R.App.P. 4, and, by naming the law firm and the Eddys as the parties securing the district court judgment pending appeal, served to notify the court and the opposing parties of their intention to appeal. Given these factors, the Consent Order satisfies the underlying purpose of the rule of “provid[ing] notice both to the opposition and to the court of the identity of the appellant or appellants,” Torres, 108 S.Ct. at 2409, and thus serves the same function as would a notice of appeal executed in the more technically proper manner. Because the Consent Order specifies “the party or parties taking the appeal,” it conforms to this court’s requirement in Kowaleski that Fed.R.App.P. 3(c) be complied with in a “punctilious, literal, and exact” manner. Kowale-ski, 879 F.2d at 1176. Moreover, by upholding the Consent Order as sufficient notice of appeal, we follow the Court’s directive to construe the rule “liberally,” and to avoid a construction that would allow “mere technicalities” to bar consideration of a ease on the merits. Torres, 108 S.Ct. at 2408; see also Foman v. Davis, 371 U.S. 178, 181, 83 S.Ct. 227, 229, 9 L.Ed.2d 222 (1962).
Finally, because we have concluded that the Consent Order operates as an effective notice of appeal, we need not address the Eddy defendants’ additional argument that, because they were not named parties to the underlying action, they could reasonably have assumed that they did not fall within the wording of the rule requiring “the party or parties” to be named in the notice of appeal. Cf. Torres, 108 S.Ct. at 2409 (jurisdictional requirements may not be waived, even for “good cause shown” under Rule 2).
III.
We now turn to the merits of the district court’s decision to impose Rule 11 sanctions in this case. “Our review of the imposition or denial of sanctions under Rule 11 is limited to determining whether the district court has abused its discretion.” Teamsters Local Union No. 430 v. Cement Exp., Inc., 841 F.2d 66, 68 (3d Cir.1988); Gaiardo v. Ethyl Corp., 835 F.2d 479, 485 (3d Cir.1987). Our court has said that “the question is not whether the reviewing court would have applied the sanction, but whether the district court abused its discretion in doing so.” Snow Machines, Inc. v. Hedco, Inc., 838 F.2d 718, 724 (3d Cir.1988); Eavenson, Auchmuty & Greenwald v. Holtzman, 775 F.2d 535, 540 (3d Cir.1985). Under the circumstances in this case, we find an abuse of discretion.
A.
Rule 11 provides, in part:
[t]he signature of an attorney or party constitutes a certificate by the signer that the signer has read the pleading, motion, or other paper; that to the best of the signer’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.... If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee.
Fed.R.Civ.P. 11. Rule 11 sanctions may be imposed “ ‘in the exceptional circumstance’ where the claim or motion is patently un-meritorious or frivolous.” Doering v. Union County Bd. of Chosen Freeholders, 857 F.2d 191, 194 (3d Cir.1988) (citing Gaiardo v. Ethyl Corp., 835 F.2d 479, 483 (3d Cir.1987)). Although the Rule imposes a duty of reasonable inquiry as to both facts and law, it is “not intended to chill an attorney’s enthusiasm or creativity in pursuing factual or legal theories.” Fed.R. Civ.P. 11 (advisory committee notes). The standard is one of “reasonableness under the circumstances.” Id.; Gaiardo, 835 F.2d at 482. The court must evaluate the signer’s conduct “by inquiring what was reasonable to believe at the time the pleading, motion, or other paper was submitted,” an evaluation which should depend on a variety of factors, including “whether the pleading, motion, or other paper was based on a plausible view of the law.” Fed.R.Civ.P. 11 (advisory committee note). In Gaiardo, we cautioned that “[ljitigants misuse the Rule when sanctions are brought against a party whose only sin was being on the unsuccessful side of a ruling or judgment.” 835 F.2d at 483; see also Golden Eagle Distrib. Corp. v. Burroughs Corp., 801 F.2d 1531, 1540-41 (9th Cir.1986) (district court may not impose sanctions simply because party’s nonfrivo-lous argument is found by the district court to be unjustified).
Eddy & Osterman argue that their conduct is not properly subject to Rule 11 sanctions because the firm’s decision to disregard the May 13 shareholder resolutions was based on a plausible view of the law. Citing § 1401 of the Pennsylvania Business Corporation Law and In re Penn Central Securities Litigation, 367 F.Supp. 1158 (E.D.Pa.1973), the Eddy defendants claim that the May 13 shareholder resolutions were not binding on the corporation because, under Pennsylvania law, only a corporation’s board of directors may manage the affairs of the corporation. Under this view, the shareholder resolutions of May 13 dismissing former counsel, retaining new counsel, and authorizing dismissal of the suit were actions taken ultra vires, a view which the law firm claims is supported in both statutory and case law and which is not “unmeritorious or frivolous.” See Doering, 857 F.2d at 194. Because the board of directors of Dura Systems did not initiate or authorize the removal of Eddy & Osterman as counsel to the corporation, the firm claims that it had reasonable grounds to believe that it had continuing authority to pursue the law suit against Rothbury.
The district court found the firm’s legal theory “dubious.” Dura Systems v. Rothbury, No. 86-2621, mem. op. at 6 (W.D.Pa. October 11, 1988). “What concerns us, for the purposes of this motion, is the critical and indisputable fact that the shareholders, whether voting as shareholders (as they did) or as a board of directors (as Eddy & Osterman allege they should have done), decided by a two-thirds vote that this lawsuit, which was nominally brought on behalf of the corporation, should be dismissed.” Mem. op. at 5-6. Because the district court concluded that the law suit against Rothbury, initiated and maintained by Eddy & Osterman, was unauthorized and “apparently unfounded in law and fact,” the court held that “Eddy & Oster-man ... abused the litigative process to such a degree that the imposition of sanctions [was] warranted.” Id. at 24.
The district court also noted, and Roth-bury stresses in its brief, that the law firm’s decision may have been motivated by self-interest. The district court concluded that, despite the firm’s ostensible representation of Dura Systems, it pursued the law suit to protect the interests of Thomas Eddy, minority shareholder in Dura Systems, and/or of his two sons, who were members of the Dura Systems board. In addition, Rothbury accuses the law firm of exercising deliberate and intentional eon-trol over the Dura Systems Corporation to the exclusion of the majority shareholders, claiming that (1) Thomas R. Eddy incorporated Dura Systems and named himself and his two sons directors without notice to the other shareholders; (2) the Eddy family board of directors ran Dura Systems to the complete exclusion of the other shareholders; and (3) the Eddy Board filed the complaint against Rothbury with the knowledge that the majority of shareholders had neither authorized the suit nor had been notified of its filing. Based on these allegations, Rothbury submits that Rule 11 sanctions were not only justified, it cross-appeals on the grounds that sanctions should have been imposed as of the date of the filing of the complaint against Roth-bury.
B.
We cannot find that the Eddy defendants’ conduct, either in filing the original complaint against Rothbury or in pursuing that cause of action on behalf of Dura Systems after the May 13 shareholders’ meeting, justified the imposition of Rule 11 sanctions. Rather, we are constrained to conclude that the Eddy defendants’ conduct, albeit arguably self-serving, was based on a “plausible view of the law” that is not “patently unmeritorious or frivolous.”
First, with respect to the initial filing of the complaint, the Eddy-installed Board of Directors, as the lawfully appointed board under 15 Pa.Stat.Ann. § 1210 (Purdon Supp.1988), ostensibly had the authority to file suit. Indeed, under the Dura Systems By-Laws, “[t]he business and affairs of the corporations shall be managed by its Board of Directors[,]” which “may exercise all such powers of the corporation and do all such lawful acts as are not by statute or by the Articles of Incorporation, or by these By-Laws directed or required to be exercised or done by the shareholders.” App. 152a-53a. See also 15 Pa.Stat.Ann. § 1401 (Purdon Supp.1988) (“The business and affairs of every business corporation shall be managed by the board of directors_”). In contrast, Rothbury cites no authority for the proposition that the Dura Systems Board lacked the authority to institute the underlying suit. Thus, Rothbury has not demonstrated on the cross-appeal that the Eddy defendants’ initiation of suit against it, on behalf of Dura Systems, was based on an implausible view of the law or was unreasonable under the circumstances. Therefore, we find no justification for imposing Rule 11 sanctions as of the date of the filing of the complaint.
Further, we are unable to conclude that the Eddy defendants’ perpetuation of the underlying law suit after the May 13 meeting constituted conduct so lacking in legal basis as to be “patently unmeritorious or frivolous.” The Eddy defendants claim that the shareholder resolutions dismissing former counsel, retaining new counsel and authorizing dismissal of the suit were not binding on the corporation because they violated § 1401 of the Pennsylvania Business Corporation Law, which mandates that “[t]he business and affairs of the corporation shall be managed by the corporation. ...” See note 7 supra. In support, they cite In re Penn Central Securities Litigation, 367 F.Supp. 1158 (E.D.Pa.1973), for the proposition that the board of directors, rather than the shareholders, control the conduct of litigation on behalf of the corporation. While this case more generally addresses, inter alia, the requirement that a shareholder seeking to press a claim on behalf of the company must first demand that the directors take the action desired, it also contains language that the directors, and not the shareholders, ordinarily conduct litigation on the corporation’s behalf. 367 F.Supp. at 1163.
Whether we or the district court would decide in favor of the Eddy defendants is not relevant to the issue before us. Even if the Eddys’ legal arguments may be tenuous, the district court need only determine whether their positions are “patently un-meritorious or frivolous,” see Doering, 857 F.2d at 194. It appears to us that in this case, the district court evaluated the Eddy defendants’ position in terms of its potential for success on the merits. Under the circumstances in this case, we believe this constitutes an abuse of discretion.
We will reverse the judgment of the district court. Each side to bear its own costs.
. On July 11, 1989, Dura Systems, Eddy & Oster-man, and the Eddys moved this court for leave to amend the Notice of Appeal to name the omitted parties. We will deny the motion under Fed.R.App.P. 26(b), which explicitly prohibits the court from enlarging the time for filing a notice of appeal. See Carter v. Rafferty, 826 F.2d 1299, 1304 (3d Cir.1987) (quoting West v. Keve, 721 F.2d 91, 95 (3d Cir.1983)) (“Where the litigant fails to file a timely notice of appeal within the prescribed period, the litigant loses the right to an appeal on the merits of the predicate controversy."); cert. denied, 484 U.S. 1011, 108 S.Ct. 711, 98 L.Ed.2d 661 (1988).
. 108 S.Ct. at 2407 & n. 1 (comparing Farley Transportation Co. v. Santa Fe Trail Transportation Co., 778 F.2d 1365, 1368-70 (9th Cir.1985) (failure to specify party to appeal is jurisdictional bar); Covington v. Allsbrook, 636 F.2d 63, 64 (4th Cir.1980) (same); Life Time Doors, Inc. v. Walled Lake Door Co., 505 F.2d 1165, 1168 (6th Cir.1974) (same) with Ayres v. Sears, Roebuck & Co., 789 F.2d 1173, 1177 (5th Cir.1986) (appeal by party not named in notice of appeal is permitted in limited circumstances); Harrison v. United States, 715 F.2d 1311, 1312-13 (8th Cir.1983) (same); Williams v. Frey, 551 F.2d 932, 934 n. 1 (3rd Cir.1977) (same)).
.Under Fed.R.App.P. 2, for good cause shown, “a court of appeals may, except as otherwise provided in Rule 26(b), suspend the requirements or provisions of any of these rules in a particular case on application of a party or on its own motion and may order proceedings in accordance with its direction.”
. Appellees conceded at oral argument that, in light of the Consent Order, they were aware that the law firm and the Eddys intended to appeal the district court’s order.
. See Gwaltney of Smithfield v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 108 S.Ct. 376, 385, 98 L.Ed.2d 306 (1987) ("Rule 11 ..., which requires pleadings to be based on a good-faith belief, formed after reasonable inquiry, that they are well grounded in fact, adequately protects defendants from frivolous allegations.”).
. Rule 11 was amended in 1983. The “reasonableness standard” of the amended rule "is more stringent than the original good faith requirement because it represents an objective, rather than a subjective, standard.” Wright, Miller & Kane, 5 Federal Practice and Procedure § 1333 at 177 (Supp.1987).
.Section 1401 states that “[t]he business and affairs of every business corporation shall be managed by a board of directors_” 15 Pa. Stat.Ann. § 1401 (Purdon Supp.1988).
. Section 1210 of the Pennsylvania Business Corporation Law states:
§ 1210 Organization Meeting
After the filing of the articles of incorporation, an organization meeting of the board of directors named in the articles or of the incorporators if no directors are named in the articles, shall be held, either within or without this Commonwealth, at the call of a majority of directors or incorporators for the purpose of adopting by-laws, which they shall have the authority to do at such meeting, of electing directors if no directors are named in the articles, and in the case of a meeting of the board of directors, of electing officers, and of transacting such other business as may come before the meeting. The directors or incorpo-rators calling the meeting shall give at least five days notice of the time and place of the meeting.
15 Pa.Stat.Ann. § 1210 (Purdon Supp.1988) (emphasis added).
. If the Eddy family board of directors was motivated by self-interest in its management of Dura Systems, then presumably the shareholders may have a remedy.
. As we have noted, John Eddy made the same objections at the May 13, 1987 shareholders meeting. At that meeting, the newly elected directors did not vote on these matters.
.The merits of the underlying case regarding the franchising agreement have been considered by this court on appeal. Dura Systems v. Rothbury Investments Inc., 866 F.2d 1409 (3d Cir.1988). In the opinion, we assumed arguendo that the law firm had the authority to bring the lawsuit on behalf of Dura Systems.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". What is the scope of this business?
A. local
B. neither local nor national
C. national or multi-national
D. not ascertained
Answer:
|
songer_circuit
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify the circuit of the court that decided the case.
McKesson & Robbins, Inc., v. Charles H. PHILLIPS CHEMICAL CO.
No. 292.
Circuit Court of Appeals, Second Circuit.
Dec. 7, 1931.
For former opinion, see 53 F.(2d) 342.
Taylor, Durey, Pierson & Comley, of Stamford, Conn. (H. H. Ramsey and Edward S. Rogers, both of New York City, Allen M. Reed, of Chicago, Ill., and Norris E. Pierson, of Stamford, Conn., of counsel), for appellant.
Marsh, Stoddard & Day, of Bridgeport, Conn. (Harry D. Nims and Wallace H. Martin, both of New York City, and Vincent L. Keating, of Bridgeport, Conn., of counsel), for appellee.
Before MANTON, L. HAND, and AUGUST ÜS N. HAND, Circuit Judges.
AUGUSTUS N. HAND, Circuit Judge.
We have held the registered trade-mark “Milk of Magnesia” invalid because it was not in the actual and exclusive use of the defendant, or its predecessors, during ten years next preceding February 20, 1905, as required by section 5 of the Federal TradeMark Act (15 USCA § 85), and also because the defendant had abandoned the mark. But we said that this invalidity of the mark “Milk of Magnesia” did not affect the defendant’s other trade-mark “Leche de Magnesia.” In reaching this conclusion about “Leche de Magnesia,” we gave too little consideration to tho fact that the name “Leche de Magnesia” ought not to have been registered under section 5 when “Milk of Magnesia” was an invalid trade-mark because not in the exclusive use of the defendant during the ten-year period, and when “Leche dó Magnesia” might readily he taken for the English mark.
In the first place each mark employs the word “Magnesia,” and that fact when the compounds on which “Milk of Magnesia” and “Leche de Magnesia” are used are identical is likely to result in confusion. Moreover, “Leche” being the Spanish for “milk” is a word that has always been known to the many Spaniards in the United States and Porto Rico and readily beeomes understandable by others. Thus it stands on quite a different footing from words taken from the language of Hottentots or Patagonians which might be so unfamiliar as to be in effect fanciful or arbitrary terms. That “Milk of Magnesia” is sold in the United States and called for under the name “Leche de Magnesia” is apparent from the record (pages 132-136) and from the inherent probabilities of the ease. Consequently “Leche de Magnesia” is the ready equivalent of “Milk of Magnesia” to many people.
It has been the general practice of the Patent Office and of the courts to deny registration to any misleading term even where it only becomes misleading through the understanding of a foreign language. This is a sound rule which has long been followed. The words “exclusive use” in section 5 of the Trade-Mark Act have been regularly interpreted to mean exclusive use not only of the-specific mark, but also of any other confusingly similar mark or term. In re Maclin-Zimmer-McGill Tobacco Co., Inc., 49 App. D. C. 181, 262 F. 635; In re Bradford Dyeing Ass’n, 46 App. D. C. 512; Barclay v. Carter Medicine Co., 41 App. D. C. 240; Kentucky Distilleries & Warehouse Co. v. Old Lexington Club Distilling Co., 31 App. D. C. 223; Eastman P. M. Co. v. Comptroller-General, L. T. N. S. 195. See also Orange Crush Co. v. California Crushed Fruit Co., 54 App. D. C. 313, 297 F. 892; Marsh Capron Mfg. Co. v. Bates Machine & Tractor Co., 53 App. D. C. 235, 289 F. 633.
For the foregoing reasons we hold that the complainant was entitled to a decree canceling the trade-mark “Leche de Magnesia,” as well as the mark “Milk of Magnesia,” and the 'decree of the District Court is accordingly in all respects affirmed.
Question: What is the circuit of the court that decided the case?
A. First Circuit
B. Second Circuit
C. Third Circuit
D. Fourth Circuit
E. Fifth Circuit
F. Sixth Circuit
G. Seventh Circuit
H. Eighth Circuit
I. Ninth Circuit
J. Tenth Circuit
K. Eleventh Circuit
L. District of Columbia Circuit
Answer:
|
sc_decisiondirection
|
A
|
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the ideological "direction" of the decision ("liberal", "conservative", or "unspecifiable"). Use "unspecifiable" if the issue does not lend itself to a liberal or conservative description (e.g., a boundary dispute between two states, real property, wills and estates), or because no convention exists as to which is the liberal side and which is the conservative side (e.g., the legislative veto). Specification of the ideological direction comports with conventional usage. In the context of issues pertaining to criminal procedure, civil rights, First Amendment, due process, privacy, and attorneys, consider liberal to be pro-person accused or convicted of crime, or denied a jury trial, pro-civil liberties or civil rights claimant, especially those exercising less protected civil rights (e.g., homosexuality), pro-child or juvenile, pro-indigent pro-Indian, pro-affirmative action, pro-neutrality in establishment clause cases, pro-female in abortion, pro-underdog, anti-slavery, incorporation of foreign territories anti-government in the context of due process, except for takings clause cases where a pro-government, anti-owner vote is considered liberal except in criminal forfeiture cases or those where the taking is pro-business violation of due process by exercising jurisdiction over nonresident, pro-attorney or governmental official in non-liability cases, pro-accountability and/or anti-corruption in campaign spending pro-privacy vis-a-vis the 1st Amendment where the privacy invaded is that of mental incompetents, pro-disclosure in Freedom of Information Act issues except for employment and student records. In the context of issues pertaining to unions and economic activity, consider liberal to be pro-union except in union antitrust where liberal = pro-competition, pro-government, anti-business anti-employer, pro-competition, pro-injured person, pro-indigent, pro-small business vis-a-vis large business pro-state/anti-business in state tax cases, pro-debtor, pro-bankrupt, pro-Indian, pro-environmental protection, pro-economic underdog pro-consumer, pro-accountability in governmental corruption, pro-original grantee, purchaser, or occupant in state and territorial land claims anti-union member or employee vis-a-vis union, anti-union in union antitrust, anti-union in union or closed shop, pro-trial in arbitration. In the context of issues pertaining to judicial power, consider liberal to be pro-exercise of judicial power, pro-judicial "activism", pro-judicial review of administrative action. In the context of issues pertaining to federalism, consider liberal to be pro-federal power, pro-executive power in executive/congressional disputes, anti-state. In the context of issues pertaining to federal taxation, consider liberal to be pro-United States and conservative pro-taxpayer. In miscellaneous, consider conservative the incorporation of foreign territories and executive authority vis-a-vis congress or the states or judcial authority vis-a-vis state or federal legislative authority, and consider liberal legislative veto. In interstate relations and private law issues, consider unspecifiable in all cases.
UNITED STATES v. INTERNATIONAL BUILDING CO.
No. 508.
Argued April 8, 1953.
Decided May 4, 1953.
Philip Elman argued the cause for the United States. With him on the brief were Acting Solicitor General Stern, Assistant Attorney General Holland, Ellis N. Slack, Lee A. Jackson and Cecelia H. Goetz.
Malcolm I. Frank argued the cause for respondent. With him on the brief was Irl B. Rosenblum.
Mr. Justice Douglas
delivered the opinion of the Court.
Respondent, a Missouri corporation, owns a leasehold of a plot of ground together with an office building erected on it. In 1942 the Commissioner assessed deficiencies against respondent for the taxable years 1933, 1938, and 1939, determining that it had claimed an excessive value as its basis for depreciating the property. These deficiencies were predicated on a basis of $385,000 amortized over the life of the lease. Respondent, who claimed a base of $860,000 amortized over a shorter period, filed petitions for review with the Tax Court. Meanwhile respondent filed a petition under ch. X of the Bankruptcy Act which ended in a confirmed plan of reorganization. Although the Collector filed proof of claim for the deficiencies in those proceedings, he later withdrew the claim under a stipulation that the withdrawal was "without prejudice” and did not constitute a determination of or prejudice the rights of the United States to any taxes with respect to any year other than those involved in the claim. Shortly thereafter respondent and the Commissioner filed stipulations in the pending Tax Court proceedings stating that "there is no deficiency in Federal income tax due” from respondent for the taxable years in question, that the tax liability for each of the years was nil, and that the jeopardy assessment was abated. The Tax Court, pursuant to the stipulation, entered formal decisions that there were no deficiencies for the taxable years in question. The Tax Court, however, held no hearing; no stipulations of fact were entered into; no briefs were filed or argument had. The issue as to the correctness of the basis of depreciation used by respondent was, however, the basis of its appeal to the Tax Court. And so, when the Commissioner in 1948 ■ assessed deficiencies for the years 1943, 1944, and 1945, challenging once more the correctness of the basis of depreciation, respondent paid the deficiencies and brought this suit to recover, alleging inter alia that the decisions of the Tax Court for the years 1933, 1938, and 1939 were res judicata of the fact that the basis for depreciation was $860,000. The District Court held against respondent. 97 F. Supp. 595. The Court of Appeals reversed. 199 F. 2d 12'. Because of a conflict between that decision and Trapp v. United States, 177 F. 2d 1, decided by the Court of Appeals for the Tenth Circuit, we granted certiorari. 344 U. S. 927.
The governing principle is stated in Cromwell v. County of Sac, 94 U. S. 351, 352-353. A judgment is an absolute bar to a subsequent action on the same claim.
“But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action.”
And see Tait v. Western Md. R. Co., 289 U. S. 620, 623; Mercoid Corp. v. Mid-Continent Co., 320 U. S. 661, 671; Commissioner v. Sunnen, 333 U. S. 591, 597-598. Estoppel by judgment, or collateral estoppel as it is often called, is applicable in the federal income tax field. Tait v. Western Md. R. Co., supra, at 624; Commissioner v. Sunnen, supra, at 598.
We conclude that the decisions entered by the Tax Court for the years 1933, 1938, and 1939 were only a pro forma acceptance by the Tax Court of an agreement between the parties to settle their controversy for reasons undisclosed. There is no showing either in the record or by extrinsic evidence (see Russell v. Place, 94 U. S. 606, 608) that the issues raised by the pleadings were submitted to the Tax Court for determination or determined by that court. They may or may not have been agreed upon by the parties. Perhaps, as the Court of Appeals inferred, the parties did agree on the basis for depreciation. Perhaps the settlement was made for a different reason, for some exigency arising out of the bankruptcy proceeding. As the case reaches us, we are unable to tell whether the agreement of the parties was based on the merits or on some collateral consideration. Certainly the judgments entered are res judicata of the tax claims for the years 1933, 1938 and 1939, whether or not the basis of the agreements on which they rest reached the merits. But unless we can say that they were an adjudication of the merits, the doctrine of estoppel by judgment would serve an unjust cause: it would become a device by which a decision not shown to be on the merits would forever foreclose inquiry into the merits. Estoppel by judgment includes matters in a second proceeding which were actually presented and determined in an earlier suit. See Commissioner v. Sunnen, supra, at 598. A judgment entered with the consent of the parties may involve a determination of questions of fact and law by the court. But unless a showing is made that that was the case, the judgment has no greater dignity, so far as collateral estop-pel is concerned, than any judgment entered only as a compromise of the parties.
Reversed.
The stipulation for the year 1933, which is typical, reads as follows:
“It is hereby stipulated that there is no deficiency in Federal income tax due from the petitioner for the taxable year 1933 and that the following statement shows the petitioner’s Federal income tax liability for the taxable year 1933:
“Tax liability. None
“Assessment (Jeopardy):
“January 23, 1942 (not paid). $2,188.12
“Assessment to be abated. $2,188.12”
Question: What is the ideological direction of the decision?
A. Conservative
B. Liberal
C. Unspecifiable
Answer:
|
songer_treat
|
G
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
UNITED STATES of America, Plaintiff-Appellee, v. Francis E. WOLLENZIEN, Defendant-Appellant.
No. 91-1951.
United States Court of Appeals, Eighth Circuit.
Submitted Dec. 9, 1991.
Decided Aug. 12, 1992.
Mark C. Meyer, Cedar Rapids, Iowa, argued, for defendant-appellant.
Janet L. Peterson, Cedar Rapids, Iowa, argued, for plaintiff-appellee.
Before GIBSON, Circuit Judge, MAGILL, Circuit Judge, and KAUFMAN, Senior District Judge.
The HONORABLE FRANK A. KAUFMAN, Senior United States District Judge for the District of Maryland, sitting by designation.
FRANK A. KAUFMAN, Senior District Judge.
Appellant, Francis Wollenzien, was convicted upon his guilty plea of assaulting, on August 11, 1990, Daniel Holmes, an Internal Revenue Service (IRS) agent during the latter’s performance of his official duties, in violation of 18 U.S.C. § 111. The Pre-Sentence Report was prepared and made available to the district court, to appellant and to counsel on both sides in advance of the rearraignment proceeding. After rear-raignment, the sentencing hearing was immediately held, all pursuant to advance agreement of the prosecution and appellant and in accordance with Federal Criminal Rules 11 and 32. The district court conducted very thorough rearraignment and sentencing hearings, which included the taking of testimony of the probation officer, the assaulted IRS agent and appellant. Thereafter, the district court imposed a sentence of four months imprisonment, two months to be served in a confinement institution, the other two months in a community treatment center, followed by a supervised release term of one year. The court carefully explained the reasons for its sentence.
On appeal, appellant raises several issues concerning the application by the court below of the statute and of the sentencing guidelines.
I.
The base offense level applicable in this case is six, pursuant to Section 2A2.4 of the United States Sentencing Commission’s Guidelines Manual (U.S.S.G.). The Pre-Sentence Report recommended a three-level increase from six to nine under U.S.S.G. § 2A2.4(b)(l), because Wollenzien struck Holmes and subjected him to a considerable degree of violence. Wollenzien objected to that increase on several grounds. To begin with, he testified during the rearraignment-sentencing hearings that while he had grabbed Holmes’s clothing and had treated Holmes somewhat roughly, he had not struck him in the manner described by Holmes. The court below found “the revenue agent’s testimony to be far more credible than” that of defendant, that there had been “a cowardly attack upon the revenue officer, from behind,” and that defendant “struck the agent in the back of the neck from behind, a severe blow.” Accordingly, the district court concluded that the base offense level should be adjusted upward from six to nine because of the degree of physical contact. That clearly was justified by the record and the findings of the district court.
II.
Appellant contends — as he did at the time of sentencing — that he should have been granted a two level reduction for acceptance of responsibility under U.S.S.G. § 3E1.1. Whether or not to grant such a reduction is very largely within the discretion of the sentencing judge. United States v. Keene, 915 F.2d 1164, 1170 (8th Cir.1990), cert. denied, — U.S. -, 111 S.Ct. 1001, 112 L.Ed.2d 1084 (1991); United States v. Young, 875 F.2d 1357, 1361 (8th Cir.1989). The denial of the reduction by the court below was certainly well within the latter’s discretion, given the facts of this case. Wollenzien simply did not, under the district court’s view of the evidence, own up to anything close to the degree of violence which he perpetrated. See United States v. Contreras, 927 F.2d 1058, 1059 (8th Cir.), cert. denied, — U.S. -, 112 S.Ct. 349, 116 L.Ed.2d 288 (1991) (acceptance of responsibility reduction properly denied when defendant refused to admit the extensive degree of his involvement). Further, since, as the trial judge noted, he would have had the authority to impose, and would have imposed, the same sentence even if he had granted the reduction for acceptance of responsibility, this Court need not review the issue. See United States v. Riascos, 944 F.2d 442, 445 (8th Cir.1991).
III.
Wollenzien contended below and contends upon this appeal that because the conduct proscribed by 18 U.S.C. § 111 involves forcible assault, it is “double counting” to add three levels under U.S.S.G. § 2A2.4(b)(1) for “physical contact.” But “physical contact” is not an element of a crime under 18 U.S.C. § 111. The Eleventh Circuit in United States v. Hernandez, 921 F.2d 1569, 1577 (11th Cir.), cert. de nied, — U.S. -, 111 S.Ct. 2271, 114 L.Ed.2d 722 (1991), recognized that 18 U.S.C. § 111 “may be violated by minimal physical contact ... or even without the presence of any physical contact....” Id. (citations omitted). In so doing, that court catalogued a number of cases in which only minor contact or no contact at all had met the requirement for violation of the statute. See, e.g., United States v. Fernandez, 837 F.2d 1031, 1035 (11th Cir.), cert. denied, 488 U.S. 838, 109 S.Ct. 102, 102 L.Ed.2d 78 (1988) (“chasing and bumping into official”); United States v. Walker, 835 F.2d 983, 987 (2d Cir.1987) (“forcible assault may be ‘established by proof of threats rather than by proof of actual touching’ ”); United States v. Mathis, 579 F.2d 415, 418 (7th Cir.1978) (“force or threat [of] force sufficient”); United States v. Bamberger, 452 F.2d 696, 699 (2d Cir.1971), cert. denied, 405 U.S. 1043, 92 S.Ct. 1326, 31 L.Ed.2d 585 (1972) (“incidental touching or no touching”). Hernandez, 921 F.2d at 1577. Accordingly, appellant’s “double counting” position is without merit.
IV.
The Pre-Sentence Report recommended a two-level upward adjustment from nine to eleven because of obstruction of justice, i.e., provision by Wollenzien of false information regarding his financial status during the presentence investigation. See U.S.S.G. § 3C1.1, Application Note 3(h). After receiving the testimony by Wollen-zien and the probation officer and stating that “I don’t believe the Defendant approached his obligation to furnish financial information to the probation officer with the zeal that the Court would have liked to have seen,” the district court concluded: “I’m not convinced by a preponderance of the evidence that this obstruction of justice adjustment ought in fairness to be applied. ...” Accordingly, the court below determined the adjusted offense level to be nine.
V.
Since appellant has no criminal record and his Criminal History Category is I, the guideline range is four to ten months rather than eight to fourteen months which would have been the range if the adjusted offense level had been eleven. In that latter range, imprisonment was required. In the four to ten month range, probation with community confinement and without incarceration is an available sentencing tool. See U.S.S.G. § 5B1.1(a)(2). The PreSentence Report did not, however, refer to probation as a possible option apparently because the probation officer was recommending adjustments (including upward adjustment for obstruction of justice) which would have brought the offense level to eleven and the guideline range to eight to fourteen months. At sentencing, while neither Wollenzien nor his counsel specifically sought probation, each of them did ask for no incarceration. The trial court, therefore, may well have considered and rejected the possibility of using probation. While the trial court is required to consider “the kinds of sentences available,” 18 U.S.C. § 3553(a)(3), and to state its reasons for selecting the applicable range, the trial court fully satisfied that statutory command in imposing sentence below and did not need explicitly to reject the use of probation. See United States v. Georgiadis, 933 F.2d 1219, 1223 (3rd Cir.1991). Nevertheless, because, in this case, the bent of the recommendations in the PreSentence Report clearly excluded the probation option, we remand this case to the district court for specific consideration of the probation route, and for rejection or acceptance of it. In so doing, we in no way suggest, one way or the other, whether the district court should or should not use that option. That choice is entirely up to the district judge, particularly in the light of the facts in this case.
AFFIRMED IN PART; REMANDED IN PART.
. 18 U.S.C. § 111 provides in relevant part that "[w]hoever—forcibly assaults ... any person ... engaged in ... official duties” is guilty of an offense against the United States, (emphasis added).
. Rearraignment and Sentencing Transcript, at 115.
. Rearraignment and Sentencing Transcript, at 130-31.
. Rearraignment and Sentencing Transcript, at 73-74.
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
|
songer_r_fed
|
0
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "the federal government, its agencies, and officials". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Sarah S. WAGNER, Appellant v. Charles A. WAGNER, Appellee.
No. 16187.
United States Court of Appeals District of Columbia Circuit.
Argued April 12,1961.
Decided June 22, 1961.
Mr. W. Cameron Burton, Washington, D. C., with whom Mr. H. George Schweitzer, Washington, D. C., was on the brief, for appellant.
Mr. John J. Pyne, Washington, D. C., for appellee.
Before Bazelon, Washington and Burger, Circuit Judges.
WASHINGTON, Circuit Judge.
This case presents questions concerning the validity of substituted service, and questions as to jurisdiction, in a suit against a former husband to enforce support for a wife and a minor son and to subject a certain house, in which the wife asserts an interest, to such support payments.
Appellant filed her suit in the District Court. Her complaint alleges, inter alia, that she and the appellee-husband were married in 1939 and lived together in the District of Columbia until 1953, when appellee left her and moved to Ohio, where he presently resides; that he obtained an ex parte divorce decree from an Ohio court in 1958, pursuant to which the custody of their minor son was awarded to her, and appellee was ordered to pay $15.00 per week for the child’s support; that no provision was there made for her support; that she is unable to support herself and the child and is in debt; that the parties lived while married in a house at 3929 Ames St., N. E., in the District of Columbia, which is shown by the land records to be owned by appellee; that appellant assisted in the purchase of the property by making some of the payments on the trust note; and that the appellee contemplates selling the house. She prays for a judgment requiring appellee to pay reasonable support for herself and the minor son, for an injunction against a sale of the house by appellee, for a determination of her property rights in the real estate, and for an order subjecting the realty to the support payments requested.
The complaint was served personally upon appellee at his residence in Ohio. He entered a special appearance and moved to quash service of process on the ground that the action is in personam and that personal service upon him outside the District is not authorized. The District Court granted the motion to quash service, and upon its own motion, dismissed the complaint for want of jurisdiction over the subject matter. The present appeal was taken after appellant’s motion for rehearing was denied.
I.
We first turn to the jurisdictional questions raised. It is clear that exclusive jurisdiction over the subject matter of the complaint in this case, filed on April 7, 1960, was in the Domestic Relations Branch of the Municipal Court rather than in the District Court, under Section 11-762 of the D.C.Code (1960). That section specifically so provides with respect to civil actions to enforce support of minor children and of a wife and, in such actions, specifically gives the Branch the power to determine and adjudicate rights to real property. Cf. David v. Blumenthal, 110 U.S.App.D.C. 272, 292 F.2d 765, decided June 1, 1961. For purposes of jurisdiction in suits to enforce support, a divorced wife is to be deemed a wife. See Hopson v. Hopson, 1955, 95 U.S.App.D.C. 285, 292, 221 F.2d 839, 846, where we indicated that the right to support is one of the rights of the wife acquired through marriage which will survive an ex parte divorce decree. See also Vanderbilt v. Vanderbilt, 1957, 354 U.S. 416, 77 S.Ct. 1360, 1 L.Ed.2d 1456. While Hopson dealt with the powers of the District Court as they existed in 1955, such powers now have been transferred to the Domestic Relations Branch of the Municipal Court. See Thomason v. Thomason, 1959, 107 U.S. App.D.C. 27, 274 F.2d 89; David v. Blumenthal, supra.
We conclude, therefore, that this complaint should have been brought in the Domestic Relations Branch of the Municipal Court. But it does not follow that dismissal of the suit was the course which the District Court should have taken. In 1959, under very similar circumstances, we remanded a suit for divorce and division of real property to the District Court “with directions to vacate its order dismissing the cause for lack of jurisdiction and to transfer the case to the Municipal Court for trial in that tribunal.” • Harris v. Harris, 1959, 106 U.S.App.D.C. 282, 272 F.2d 511, 512. Implicit in our decision was the holding that service of process in the District Court in a domestic relations case within the exclusive jurisdiction of the Domestic Relations Branch of the Municipal Court was sufficient to commence the action, and that its transfer to the latter court would be the proper course for the District Court to follow. The reasons for this are clear. Jurisdiction over domestic relations was only recently transferred to the Branch, and all problems relating to the extent of the jurisdiction transferred have not yet been settled. At least in the transitional period, courts should not dismiss suits which can properly be transferred. There can be no valid objection to transfer of cases of this sort since the transfer will not affect any substantive right of either party but will merely alter the tribunal which will hear and adjudicate those rights. Cf. David v. Blumenthal, supra.
If, therefore, service of process was effected in the District Court, this case should be transferred to the Municipál Court.
II.
We turn to the question whether service was properly effected. We note, initially, that part of the relief sought by appellant was support for herself and the minor child, an action in personam. Since the former husband was served outside the District of Columbia, an award of support would be “void except as to property within the jurisdiction of the court which has been specifically proceeded against” in the divorce or maintenance action. Gaines v. Gaines, 1946, 81 U.S.App.D.C. 260, 262, 157 F.2d 521, 523. The suit here seeks, in addition to support, to subject the former marital home in the District to the support payments awarded, and prays for a determination of appellant’s property rights in the home and an injunction against its sale. Only by resort to this property (apparently the husband’s only known property within the jurisdiction) would a support award be immediately enforceable. Thus, the immediate object of the suit was to establish and enforce rights or claims to the real property within the jurisdiction of the court. As such, Section 13-108 of the D.C.Code (1951) authorized the use of service by publication, or service outside the District. And we deem this to mean that the service upon the appellee, as so authorized, will enable the trial court to determine not only the wife’s interest in the property but also, after hearing evidence, to provide for payment out of the real property of any support payments to which it finds the appellant and the minor son are entitled.
The appellee-husband contends, however, that something more than substituted service* is required to give the trial court the power to enforce real property rights in a suit for support, i. e., that the real property must be attached at the time of filing such a suit. He cites Buchanan v. National Savings & Trust Co., 1944, 79 U.S.App.D.C. 278, 146 F.2d 13, 15, as requiring this. That case involved a suit against a former husband to establish an interest, on behalf of the former wife and a minor child of the divorced parents, in a spendthrift trust fund of which the husband-father was beneficiary. We held that the testator-settlor of the fund intended the child to be provided for out of the income of the trust fund, that the child therefore had a property interest in the fund, which was within the District, that the trial court should determine the extent of the provision to be made for the child from the trust income and that under Section 13-108 service by publication on the defendant-father was sufficient to give it authority to do so. However, we found no intent on the part of the testator to make provision for the wife out of the trust fund, and held that she had no property interest in the fund. With respect to her claim arising from the general right to support, we said:
“While a spendthrift trust may under some circumstances be subjected to the obligation to support a wife or child, the enforcement of such an obligation would require either personal service on John Buchanan or an attachment of his equitable interest in the fund after the execution of a bond.”
We cited as authorities for this statement Section 16-301 of the D.C.Code (1940), and Pennoyer v. Neff, 1877, 95 U.S. 714, 24 L.Ed. 565.
Insofar as the appellant in this case is seeking an adjudication of her property interest in the home arising from her contributions to its purchase price, her claim is not distinguishable from the claim of the child to an interest in the trust fund in Buchanan, except that it relates to real rather than personal property, and under that decision substituted service was sufficient to give the District of Columbia courts power to adjudicate her claim in this regard.
For the following reasons we also think that substituted service permitted the adjudication and enforcement of the claims made against the former husband’s interest in the realty, as distinguished from appellant’s own personal interest in the realty.
Pennoyer v. Neff, supra, was concerned with the effect of a money judgment rendered by default in a suit on contract in a state court against Neff, a non-resident of the state, who was served by publication and entered no appearance. Subsequent to the default judgment, real estate owned by Neff within the jurisdiction was sold under an execution. The Supreme Court held that the judgment was void because the trial court lacked jurisdiction to render a personal judgment against Neff and that the execution sale made pursuant to the void judgment passed no title. The suit itself had not been in any sense a proceeding against the realty, and the Court noted that the real property sold under the invalid judgment had not been brought under the jurisdiction of the trial court by attachment, seizure, or in any other equivalent way, and that “Its first connection with the case was caused by a levy of the execution.” See 95 U.S. at page 720.
The principles stated in the Pennoyer decision have no application where the action is one proceeding directly against real estate. It has long been established that “a state has power by statute to provide for the adjudication of titles to real estate within its limits as against non-residents who are brought into court only by publication.” Arndt v. Griggs, 1890, 134 U.S. 316, at page 327, 10 S.Ct. 557, at page 561, 33 L.Ed. 918. This is because an “owner of real estate, who is a non-resident of the state within which the property lies, cannot evade the duties and obligations which the law imposes upon him in regard to such property, by his absence from the State,” and service by “publication is ‘due process of law’ as applied to this class of cases.” Huling v. Kaw Valley Railway, 1889, 130 U.S. 559, 563, 564, 9 S.Ct. 603, 605, 32 L.Ed. 1045. See also Grannis v. Ordean, 1914, 234 U.S. 385, 34 S.Ct. 779, 58 L.Ed. 1363. In Lynch v. Murphy, 1896, 161 U.S. 247, 16 S.Ct. 523, 40 L.Ed. 688, a decree rendered in the District of Columbia in a suit to cancel a deed of trust on land was held not to be void even though the defendant was not personally served, since a statute enacted by Congress for the District permitted service by publication. As already indicated, Section 13-108 of the Code, the District statute now in force, authorizes service by publication where (as here) the suit seeks to enforce claims against real property located in the District. The statute does not require that the property proceeded against be seized or attached. It is thus plain that the substituted service in this case gave the courts of the District of Columbia the power to render judgment with respect to the real estate proceeded against in the complaint.
The view just stated has long been applied throughout the country in domestic relations cases. At least when authorized by statute, substituted service upon a non-resident defendant, without attachment or seizure of property, will give jurisdiction to render a decree for alimony or maintenance which is binding upon realty (and indeed even personalty) belonging to the defendant and within the jurisdiction of the court, when the property has been specifically described and proceeded against in the complaint. Some of the cases so holding are set out in the margin. Public policy requires this result: it would be intolerable to allow a woman and minor child to become public charges simply because the man responsible for their support, though owning property within the jurisdiction, has departed and become a non-resident.
For these reasons, we hold that service of process was validly effected in this case. We will therefore follow the course we adopted in Harris v. Harris, 1959, 106 U.S.App.D.C. 282, 272 F.2d 511, of remanding to the District Court with directions (1) to vacate its order quashing the service and dismissing the cause for lack of jurisdiction, and (2) to transfer the case to the Municipal Court for trial in the Domestic Relations Branch.
So ordered.
. Por purposes of the, appeal we must of course treat the factual allegations o'f the complaint as established.
. Section 13-108 reads as follows:
“Publication may be substituted for personal service of process upon any defendant who cannot be found and who is shown by affidavit to be a nonresident, * * * in all actions at law and in equity which have for their immediate object the enforcement or establishment of any lawful right, claim, or demand to or against any real or personal property within the jurisdiction of the court.
“Personal service of process may be made by any person not a party to or otherwise interested in the subject matter in controversy on a nonresident defendant out of the District of Columbia, which service shall have the same effect and no other as an order of publication duly executed.”
. In Ulrich v. Ulrich, 1883, 3 Mackey 290, 14 D.C. 290, a predecessor appellate court in this District applied the Us pendens doctrine to a wife’s suit for divorce and alimony wherein the complaint asserted that the husband owned certain described real estate, and asked that it be subjected to her claim for alimony. Evidently the court regarded seizure, attachment, or the issuance of a restraining order, as being unnecessary to perfect the Ms pendens so created. No problem of service of process was there presented, as the husband was a resident of the District.
. Section 13-108 also authorizes service by publication where the object of the suit is to establish and enforce claims against personalty located in the District. Buchanan involved a suit of that kind. We express no views about the decision in that ease, except to note that Pennoyer v. Neff, there relied upon as requiring an attachment in addition to service by publication, did not involve a suit seeking to proceed directly against personal property in the jurisdiction. Moreover, Section 16-301 of the Code (1951), also cited as requiring an attachment, authorizes, but does not in terms require, an attachment before judgment under certain circumstances in three types of cases: actions for the recovery of specific personal property, or for a debt, or for damages for the breach of a contract, express or implied. The language of Section 16-301 suggests strongly that the actions for debt or for damages for breach of contract referred to therein are those where the debt or damages are liquidated or ascertainable in amount: viz., the plaintiff’s affidavit must state the “amount” of the debt or the “actual damage resulting” from breach of contract, and a bond must be given in twice the amount of the claim. Cf. Hoover v. Hathaway, 1892, 9 Mackey 591, 20 D.C. 591; Goldsborough v. Orr, 1823, 8 Wheat. 217, 21 U.S. 217, 5 L.Ed. 600. Appellant’s claim is for such support “as seems just and reasonable,” no specified amount being named, and we have grave doubts that an attachment before judgment would even have been authorized by Section 16-301 in her case. Cf. King v. Fay, D.C.D.C.1958, 169 F.Supp. 934, where the attachment was issued against the husband’s vested reversion in a trust fund in a suit to recover a liquidated amount of money due under a property settlement incorporated in a foreign divorce decree. As to the use of a restraining order in lieu of an attachment, see Pennington v. Fourth National Bank, 1917, 243 U.S. 269, 37 S. Ct. 282, 61 L.Ed. 713 (injunction issued at suit of wife against payment out by bank of funds of non-resident husband). Our opinion in Buchanan does not mention the Pennington case. Cf. Western Urn Mfg. Co. v. American Pipe & Steel Corp., 1960, 109 U.S.App.D.C. 145, 284 F.2d 279.
. Reed v. Reed, 1929, 121 Ohio St. 188, 167 N.E. 684, 64 A.L.R. 1384; Wilson v. Smart, 1927, 324 Ill. 276, 155 N.E. 288; Wilder v. Wilder, 1919, 93 Vt. 105, 106 A. 562; Wesner v. O’Brien, 1896, 56 Kan. 724, 44 P. 1090, 32 L.R.A. 289, and other cases collected in notes at 29 A.L.R. 1381; 64 A.L.R. 1392; and 108 A.L.R. 1302. See also, e. g., Boudwin v. Boudwin, 1936, 320 Pa. 147, 182 A. 536; Failing v. Failing, 1954, 4 Ill.2d 11, 122 N.E.2d 167; Carter v. Carter, 1960, 147 Conn. 238, 159 A.2d 173; Closson v. Closson, 1923, 30 Wyo. 1, 215 P. 485, 29 A.L.R. 1371; Dillon v. Heller, 1888, 39 Kan. 599, 18 P. 693. Some cases have treated a prayer for a'n injunction or the issuance of a preliminary injunction against sale or disposition of property as the equivalent of a seizure even though directed against a non-resident husband. See, e. g., Benner v. Benner, 1900, 63 Ohio St. 220, 58 N.E. 569.
Question: What is the total number of respondents in the case that fall into the category "the federal government, its agencies, and officialss"? Answer with a number.
Answer:
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songer_respond1_1_4
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I
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "manufacturing". Your task is to determine what subcategory of business best describes this litigant.
STEEL VALLEY AUTHORITY, Appellant, v. UNION SWITCH AND SIGNAL DIVISION, American Standard, Inc., Westinghouse Air Brake Division, American Standard, Inc.; Radice Corporation; F. Emmett Meyer, Jr.; Louis D. Kopsa Radice-East Hills, Inc., Appellees.
No. 86-3402.
United States Court of Appeals, Third Circuit.
Argued Nov. 7, 1986.
Decided Jan. 20, 1987.
Rehearing and Rehearing In Banc Denied Feb. 11, 1987.
Joseph S. Hornack (argued), Edward Jaffee Abes & Associates, P.C., Pittsburgh, Pa., for appellant.
Robert W. Hartland (argued), Reed, Smith, Shaw and McClay, Pittsburgh, Pa., for appellees — American Standard, Inc., Louis D. Kopsa and F. Emmett Meyer, Jr.
Robert W. Murdoch (argued), Vincent J. Grogan, Grogan, Graffam, McGinley & Lucchino, P.C., Pittsburgh, Pa., for appellee — Radice-East Hills, Inc.
Before SLOVITER, STAPLETON and GARTH, Circuit Judges.
OPINION OF THE COURT
GARTH, Circuit Judge:
The Steel Valley Authority (Steel Valley) has appealed from an order of the district court dismissing Steel Valley’s complaint against various named defendants for failure to state a cause of action. We do not reach the question of whether Steel Valley stated a viable cause of action because we have determined that the addition of an indispensable, nondiverse party defendant to Steel Valley’s action deprived the district ■ court of federal subject matter jurisdiction.
I.
The circumstances giving rise to this case, the migration of heavy industry from long-dependent Pennsylvania communities to new locations outside Pennsylvania, have become all too familiar in the industrial areas of that state. The players in this economic drama are by no means unique. The main defendant in this case is American Standard Corporation, the parent company of both Westinghouse Air Brake Division (WABCO), located in Wilmerding, Pennsylvania since 1889, and Union Switch and Signal Division, located in Swissvale, Pennsylvania since 1887. The plaintiff in this case is the Steel Valley Authority, an organization formed by nine Allegheny County municipalities for the purpose of, among other things, promoting industrial development projects, both new and existing.
The dispute between the parties developed after American Standard’s announcement in the latter part of 1985 that it would close down all of the Union Switch plant and most of the WABCO plant by the end of 1987. Not surprisingly, the decision was unpopular in the communities to be affected by the closings. Reaction was particularly bitter because of extensive community efforts over the past twenty years to keep the plants open.
In an effort to salvage the 2,000 jobs which would be lost as a result of this corporate migration, Steel Valley began to formulate a plan to acquire and operate the WABCO and Union Switch plants and properties as industrial development projects. Apparently, during this initial planning period, American Standard threatened the removal of various equipment and fixtures necessary to the successful operation of the plants.
Forced to take action to preserve the feasibility of its project, Steel Valley brought an action on March 24, 1986 in the Court of Common Pleas of Allegheny County, Pennsylvania against the Union Switch and Signal Division; Westinghouse Air Brake; Louis Kopsa and F. Emmett Meyer, Jr., both employees of the American Standard subsidiaries; and Radice Corporation, a Florida corporation. Steel Valley’s goal in the filing of this action was to preserve the plants in their operable form until it could formulate and implement a plan for the acquisition of the plants through an exercise of its eminent domain power.
In its complaint, Steel Valley alleged that American Standard’s removal of specialized machinery and equipment from the property constituted waste; it therefore sought an injunction prohibiting such waste of the property. Steel Valley argued that it was entitled to an injunction against waste of the property at issue because of its reversionary interest in the land arising out of its power of eminent domain. Steel Valley also alleged the need to preserve the status quo until it could formulate its plan of acquisition and development, asserting that its prospective taking would be mooted by the “destruction of the underlying res.” App. at 73a. It therefore sought, among other relief, an injunction against the destruction or razing of the buildings or fixtures forming part of the real estate. Affirmatively, it sought the protection and maintenance of the property until it could file a declaration of taking.
On March 25, 1986, American Standard filed a petition for removal in the District Court for the Western District of Pennsylvania alleging the jurisdictional ground of diversity. No hearing had yet been held in state court on the preliminary injunction sought by Steel Valley.
American Standard alleged in its petition for removal that the nondiverse individuals Meyer and Kopsa were “fraudulently and improperly joined” as defendants to Steel Valley’s action in an effort by Steel Valley to prevent removal of its case to federal court. App. at 25a. Moreover, American Standard asserted that Radice Corporation, a Florida corporation, which was a diverse defendant, was merely a “nominal party” to the action, because Steel Valley had alleged no wrongdoing by Radice, and thus had not stated any cause of action against Radice to support its claims of relief. Id.
The district court granted American Standard’s petition for removal on March 25, 1986, implicitly agreeing with American Standard’s assertion that Meyer and Kopsa were fraudulently joined and that Radice Corp. was a nominal party, and therefore need not be considered in satisfying diversity jurisdiction requirements.
Steel Valley filed an “Emergency” Motion to Remand on March 26, 1986. The following day, Steel Valley, claiming that it had been mistaken as to the identity of the record owner of the Union Switch property, amended its complaint as of right under Rule 15(a), substituting Radice-East Hills, Inc. (Radice-East), a Pennsylvania corporation, for Radice Corporation. Radice-East had been the record owner of the Union Switch site since November 4, 1985 when Radice Corporation, the original defendant, assigned its interest in the property to Radice-East. Steel Valley’s amended complaint asserted that Radice-East was the owner of the land and buildings occupied by Union Switch, and, among other relief specified, Steel Valley sought to enjoin Radice-East to maintain the property and buildings in their present condition.
Steel Valley argued at the district court hearing on the motion to remand that Rad-ice-East was an indispensable party to the action and therefore, because the addition of Radice-East, a Pennsylvania corporation, destroyed diversity, the motion to remand to the state court should have been granted. In an order filed April 11, 1986, the district court rejected this argument and denied the motion to remand, holding that Radice-East also had been fraudulently joined by Steel Valley because no colorable claim was asserted against it. App. at 130a.
After the denial of Steel Valley’s motion to remand, the defendants filed Rule 12(b)(6) motions to dismiss and Steel Valley sought a preliminary injunction prohibiting, among other things, American Standard’s removal of equipment from the property. The district court in an order dated June 17, 1986 dismissed Steel Valley’s complaint against Meyer, Kopsa, and Radice-East with prejudice. It dismissed the action against American Standard without prejudice, leaving open the option of another action if Steel Valley moved to condemn the property.
Steel Valley timely appealed from the final order of dismissal, raising before us the merits of the dismissal and the failure of subject matter jurisdiction. Our resolution of this appeal necessarily must focus on whether Radice-East was an indispensable party whose joinder would require a remand of the proceeding to state court. Although a district court’s determination of indispensability is subject only to review for abuse of discretion, see Haas v. Jefferson Nat’l Bank of Miami Beach, 442 F.2d 394, 395 (5th Cir.1971), where, as here, the district court did not make an explicit Rule 19 determination, we shall engage in an independent analysis of indispensability. See Walsh v. Centeio, 692 F.2d 1239, 1242 (9th Cir.1982).
II.
Section 1447(e) of Title 28 of the United States Code mandates that: “[i]f at any time before final judgment it appears that the case was removed [from state court] improvidently and without jurisdiction, the district court shall remand the case____” See Adorno Enter. v. Federated Dep’t Stores, 629 F.Supp. 1565 (D.R.I.1986) (accepting the plain meaning of the statute that jurisdiction must be monitored after removal). It is settled that the removal statutes are to be strictly construed against removal and all doubts should be resolved in favor of remand. Abels v. State Farm Fire & Casualty Co., 770 F.2d 26, 29 (3d Cir.1985).
Ruling on whether an action should be remanded to the state court from which it was removed, the district court must focus on the plaintiff’s complaint at the time the petition for removal was filed. Id. In so ruling the district court must assume as true all factual allegations of the complaint, Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir.1983), cert. denied, 464 U.S. 1039, 104 S.Ct. 701, 79 L.Ed.2d 166 (1984), and while nominal or fraudulently joined parties may be disregarded, indispensable parties may not. Cf. supra note 2. It remains the defendant’s burden to show the existence and continuance of federal jurisdiction. Abels, 770 F.2d at 29; see also 14 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3739. That burden continues through judgment if not beyond. Adorno Enter., 629 F.Supp. at 1567; cf. Rubin v. Buckman, 727 F.2d 71 (3d Cir.1984) (where plaintiff after trial claimed lack of diversity jurisdiction the district court was compelled to vacate the jury verdict in favor of the defendant and dismiss plaintiff’s complaint).
These principles have developed because the lack of subject matter jurisdiction voids any decree entered in a federal court and the continuation of litigation in a federal court without jurisdiction would be futile. Thus when a nondiverse party is added to a federal proceeding and that party's presence is indispensable to the furnishing of complete relief, remand is mandated where federal subject matter jurisdiction depends on diversity jurisdiction, even though removal was originally proper. Takeda v. Northwestern Nat’l Life Ins. Co., 765 F.2d 815, 819 (9th Cir.1985); Adorno Enter., 629 F.Supp. at 1573 (“It is beyond doubt that the emergence of an indispensable party, if nondiverse, should defeat subject matter (diversity) jurisdiction and require remand.”); Kaib v. Pennzoil Co., 545 F.Supp. 1267, 1269 (W.D.Pa.1982) (“The fact that plaintiff sought to add non-diverse parties following discovery does not [divest] this court of original jurisdiction and compel remand, unless they are indispensable parties.”); Lamar Haddox Contractor, Inc. v. Potashnick, 552 F.Supp. 11 (M.D.La.1982) (addition of non-diverse indispensable defendant required remand to state court); see also Field v. Volkswagenwerk AG, 626 F.2d 293, 297 (3d Cir.1980) (“Whether a party may be dropped depends upon whether the party is ‘indispensable’ to a just and meaningful litigation of the claims____”); 1A J. Moore & B. Ringle, Moore’s Federal Practice 110.161[2],
Applying these principles to Steel Valley’s complaint, Steel Valley argues that when it amended its complaint to add Rad-ice-East, a Pennsylvania corporation, the district court was divested of jurisdiction because Radice-East was an indispensable party.
III.
The outcome of this appeal thus hinges upon our resolution of Radice-East’s status as an indispensable party under Federal Rule of Civil Procedure 19. Indispensable parties, defined succinctly and clearly in the Supreme Court case of Shields v. Barrow, 58 U.S. (17 How.) 130, 15 L.Ed. 158 (1854), are “[p]ersons who not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience.” Id. at 139. “Indispensable parties are persons who, in the circumstances of the case must be before the court,” 3A J. Moore, Moore’s Federal Practice 1Í 19.02, and “[w]hether a person is ‘indispensable,’ that is, whether a particular lawsuit must be dismissed in the absence of that person, can only be determined in the context of the particular litigation.” Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118, 88 S.Ct. 733, 742, 19 L.Ed.2d 936 (1968); see also Haas, 442 F.2d at 396-97, citing Shields, 58 U.S. (17 How.) at 139.
Of necessity, an indispensability analysis is fact-specific, guided by the legal analysis outlined in Rule 19 of the Federal Rules of Civil Procedure. Therefore, “[t]he question of whether a person not joined is an indispensable party is determined on a case-by-case basis by (1) appraising his interest, and then (2) considering the equitable principles described in Rule 19.” 3A J. Moore, supra, U 19.02 n. 9. Moreover, in an action which involves real property, as is the case here, consideration must be given to the type of legal interest asserted in the property and the type of relief demanded by the plaintiff. 3A J. Moore, supra, 1119.09[1].
A.
We turn first to an examination of Steel Valley’s amended complaint. Assuming as we must that the allegations in the complaint are true, B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir.1981), Rad-ice-East has been joined as the owner of the land and buildings where Union Switch is located and operates. The deed vesting title in Radice-East was made a part of Steel Valley’s amended complaint. App. at 76a-83a. Steel Valley claimed that the status quo of the plants had to be maintained to enable its plan of acquisition and development to proceed. It asserted that any taking would be mooted by “the destruction of the underlying res.” App. at 73a.
Steel Valley’s complaint therefore sought to enjoin all defendants, including RadiceEast, from, among other things, dismantling, demolishing, destroying, or razing the buildings, machinery, equipment or fixtures forming part of the real estate of Switch Signal. ...” App. at 74a. In addition, Steel Valley asked that the court require the defendants “to take reasonable measures to maintain and protect the condition of the property identified above until such time as the SVA [Steel Valley] can file its declaration of taking.” App. at 75a.
Steel Valley’s allegation of Rad-ice-East’s interest in the Union Switch property is not disputed. This allegation, which we take as true, requires us to discern whether the property interest RadiceEast holds as the owner of the Union Switch real estate would be affected if the relief requested by Steel Valley were to be granted. If Radice-East is determined to be an indispensable party then the district court abused its discretion in (1) finding that Radice-East was fraudulently joined and (2) failing to find that Radice-East was indispensable.
Because there is no question that RadiceEast is the owner of the land and the buildings, we direct our attention to the relief sought by Steel Valley. If Steel Valley’s injunction were to be granted, it is obvious that Radice-East would be restricted to maintaining the buildings and property in their present condition and would be prevented from demolishing or altering them in any effort to utilize the Union Switch property for other purposes.
American Standard and Radice-East argue on appeal, however, that any relief given to Steel Valley by the district court would not affect Radice-East’s interest in the property, because they claim that Rad-ice-East is not entitled to possession under the terms of its sales contract with American Standard until 1988. American Standard specifically argues in its brief that “... any planned development by RadiceEast clearly does not, and never did, represent a threat to the SVA.” Appellee American Standard’s Brief at 20. American Standard asserts that because Radice-East cannot develop the property until 1988, and no court would grant a temporary injunction which would extend until 1988, Steel Valley cannot complain about Radice-East Hill’s conduct relative to the property. Consequently, American Standard contends that Radice-East is not a “factually indispensable party.”
The record, however, does not contain the American Standard — Radice-East sales contract nor does the record disclose that Radice-East’s possessory interest in the property will not vest until 1988, although that argument was made to us orally and in American Standard’s brief. In this latter respect, the record is completely silent. Even assuming, however, that the postponement of possession by Radice-East was established by the record, which it is not, it would not alter our conclusion. Any injunction against dismantling, razing, or demolishing the Union Switch buildings obviously would have a direct impact on Rad-ice-East’s interest, even if its right to possession of the buildings was delayed. Moreover, even though we cannot evaluate, let alone adjudicate, the property rights of Radice-East and American Standard, if a material breach of the sales agreement were to occur, the possibility exists that Radice-East’s right of possession might accelerate.
We also recognize that the relief sought by Steel Valley is essentially the maintenance of the status quo (i.e., the plants are to remain as industrial facilities) until its plan of acquisition and development can be implemented. The preservation of such a status quo would obviously defeat any prospects that Radice-East might have to develop the property for residential or other commercial purposes.
In sum, as we have pointed out, giving credit to Steel Valley’s allegations, there is nothing that appears in the complaint concerning Radice-East’s postponed possession. Only Radice-East’s real property and building ownership is established. The relief sought by the complaint is an injunction prohibiting all defendants at all times from disturbing the buildings and their contents. Steel Valley also sought, as an essential component of relief, an affirmative injunction to have the property owners maintain the Union Switch property in its present condition.
Thus the complaint establishes Radice-East as the owner of the Union Switch property and buildings and reveals that Steel Valley, as a part of its relief, seeks to restrict, limit, and affect RadiceEast’s rights and/or interests in the property.
B.
An “indispensability” analysis must start with Federal Rule of Ciyil Procedure 19(a), which states that:
A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party____
If a party falls into either of the above two categories, but may not be joined because jurisdiction would be destroyed, the court must determine under Rule 19(b) whether “in equity and good conscience” the action should proceed without the absent party or whether the absent party is indispensable and the action should be dismissed (or, in the case of removal, remanded).
Under the factors set out in Rule 19(a), Radice-East is clearly a party to be joined if feasible. First, Steel Valley would not be able to obtain complete relief if Radice-East were not joined. Any actions taken by Radice-East with respect to its property, particularly actions which required razing or demolition of the buildings, would undoubtedly affect the success of Steel Valley’s development plans. Conversely, any injunction requiring RadiceEast to maintain the status quo of its property as industrial property would undoubtedly affect the rights of Radice-East as a property holder, and the injunction sought by Steel Valley, if granted, would necessarily affect the alienability of Rad-ice-East’s property and its ability to improve the property in accordance with any plans it may have made. Thus, in terms of 19(a), complete relief could not be accorded to Steel Valley without Radice-East’s presence nor could Radice-East protect its very substantial real estate interest in the property if it were not a party to Steel Valley’s action.
C.
Having concluded that Radice-East had to be joined as a party to the action if feasible, we turn to the provisions of Rule 19(b) to ascertain whether the district court could have proceeded without Radice-East being joined as a party. The factors that must be considered in an analysis under Rule 19(b) are:
... first, to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.
Since Radice-East could not be made a party without destroying the district court’s subject matter jurisdiction, the district court was required to “... determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent party [Radice-East] being thus regarded as indispensable.” Fed.R.Civ.P. 19(b).
To arrive at such a determination, Rule 19(b) provides four factors to be taken into consideration. In an earlier discussion of Rule 19(a) of this opinion we touched upon considerations bearing on the first factor of 19(b), i.e., prejudice to the parties. We concluded that any judgment rendered in Radice-East’s absence would necessarily be prejudicial to Radice-East’s property interests.
The second factor of 19(b) directs the court to consider the extent to which the shaping of relief might avoid or lessen any prejudice to the parties. There has been no suggestion made that the relief which Steel Valley seeks could be decreed without significantly affecting Radice-East’s property interest. Any injunction that precluded Radice-East’s full use of its property for purposes other than for which it is presently being utilized, would of necessity prejudice Radice-East. We cannot envisage how such prejudice could be lessened or avoided if an injunction, no matter how shaped, were to issue.
The third factor requires us to consider “whether a judgment rendered in the person’s [Radiee-East’s] absence will be adequate.” Fed.R.Civ.P. 19(b). Focusing on Steel Valley, we are obliged to conclude that Steel Valley would not be able to receive full relief without the joinder of Radice-East. Because of its ownership interest and landlord status, Radice-East could readily undermine Steel Valley’s plan, and therefore the effectiveness of any injunction decreed, by entering and possessing the buildings (with or without American Standard’s permission) if it were not bound by a district court order. It is obvious to us that, in the absence of Rad-ice-East as a party, it will be impossible to resolve the controversy between Steel Valley and American Standard. Necessarily inherent in Steel Valley’s cause of action is that the buildings and property owned by Radice-East are integral to Steel Valley’s industrial development plan. Therefore, because no plan could be proposed or succeed without taking into consideration these particular buildings, a judgment rendered in Radice-East’s absence would not bind Radice-East and thus, without question, would undercut Steel Valley’s industrial development plan. Hence, in terms of Rule 19(b), a judgment, even though rendered in favor of Steel Valley, but in the absence of Radice-East, would be inadequate.
Finally, we are instructed to consider “whether the plaintiff [Steel Valley] will have an adequate remedy if the action is dismissed for nonjoinder.” Fed.R.Civ.P. 19(b). Clearly, the Pennsylvania state court is a ready forum available to all parties. This fact favors a finding of indispensability and thus would require a remand to the state court. Not only is the state court available for resolution of this controversy, but it also may be the most appropriate forum for consideration of Steel Valley’s particular cause of action, see Tick v. Cohen, 787 F.2d 1490, 1495 n. 5 (11th Cir.1986) (“presence of a state forum has been found to be particularly compelling in diversity jurisdiction cases”), which, among other features, includes real property interests — traditionally a state concern. Therefore, consideration of each of the Rule 19(b) factors leads to the conclusion urged upon us by Steel Valley that Rad-ice-East is an indispensable party to Steel Valley’s action.
As a result of our independent Rule 19 analysis, we are satisfied that Radice-East must be joined in the present action, and that the district court abused its discretion by failing to so hold. Because it improperly exercised its discretion, first in its finding of fraudulent joinder, and, second, in failing to find Radice-East to be an indispensable party pursuant to a Rule 19 analysis, the district court declined to remand Steel Valley’s action to the state court. In so doing, the district court improperly retained jurisdiction over Steel Valley’s claims and resolved the merits of Steel Valley’s action, which it should not have addressed, let alone have decided.
IV.
Having concluded that Radice-East is an indispensable and nondiverse party to Steel Valley’s action, we will reverse and direct the district court (1) to vacate its order of June 17, 1986, which granted the defendants’ motions to dismiss on the merits and (2) to remand this proceeding to the Court of Common Pleas of Allegheny County, Pennsylvania.
. At the time of the filing of the original complaint, Steel Valley alleged that Radice Corporation was the record owner of the Union Switch real estate.
. At the time the district court assumed jurisdiction, all defendants had not concurred in the petition for removal. Nonetheless, removal without the consent of Meyer, Kopsa, and Rad-ice Corp. was proper because the district court considered them fraudulently joined or nominal. "In applying this general rule, [that all parties must join in the removal petition] nominal or formal parties, unknown defendants, and defendants fraudulently joined may be disregarded.” 1A J. Moore & B. Ringle, Moore’s Federal Practice ¶ 0.168[3.-2-2]; see also 14 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3731.
. Rule 15(a) allows the amendment of a complaint as of right if the opposing party has not yet answered the complaint, as was the case here. Fed.R.Civ.P. 15(a).
. We hold that the claims against Union Switch and Westinghouse Air Brake, although dismissed without prejudice, have been finally resolved. American Standard relies on Borelli v. City of Reading, 532 F.2d 950 (3d Cir.1976), in support of its argument that the dismissal was not a final and appealable order. Unlike Borelli, however, an amendment of the complaint would not cure what the district court perceived as the fatal defect of the complaint. Indeed, the district court indicated that “should the situation change and the Authority [Steel Valley] condemn the property," app. at 162a, only then could the action proceed. In such an instance, however, the cause of action would be entirely different than the cause of action which the district court dismissed.
Here, Steel Valley chose to stand on its current cause of action (“waste"). We are satisfied that the district court order from which Steel Valley appealed is final and therefore appeal-able. See B., Inc. v. Miller Brewing Co., 663 F.2d 545, 547-48 (5th Cir.1981); Hall v. Pennsylvania State Police, 570 F.2d 86, 88-89 (3d Cir.1978).
. The federal removal statutes are found in 28 U.S.C. §§ 1441-1452.
. In refusing to remand this case to state court, the district court concluded that Radice-East was fraudulently joined. A removing defendant, in this case American Standard, who charges that the plaintiff, Steel Valley, has fraudulently joined a party (Radice-East) in order to destroy diversity jurisdiction, has a heavy burden of persuasion. B., Inc., 663 F.2d at 549. We have noted that the "[cjourts have found joinder to be fraudulent where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendant or seek a joint judgment.” Abels v. State Farm Fire & Cos. Co., 770 F.2d 26, 32 (3d Cir.1985) (quoting Goldberg v. CPC International, 495 F.Supp. 233, 239 (N.Cal.1980)); see also Nobers v. Crucible, Inc., 602 F.Supp. 703, 706 (W.D.Pa.1985). Fraudulent joinder analysis, however, is only appropriate in determining the propriety of removal. Here, Steel Valley admits that the initial removal was proper. Appellant's Brief at 11.
Where a plaintiff seeks to force remand of a properly removed case by the addition of a nondiverse defendant, the appropriate inquiry is whether that proposed defendant is indispensable under Rule 19. E.g., Takeda v. Northwestern Natl Life Ins. Co., 765 F.2d 815, 819 (9th Cir.1985); Kaib v. Pennzoil Co., 545 F.Supp. 1267, 1270 (W.D.Pa.1982). This more stringent inquiry supports "the long-settled (and salutary) policy that a plaintiff cannot artificially force a retreat to the first (state) forum by embarking purposefully on post-removal steps designed exclusively to foster remand.” Adorno Enter., 629 F.Supp. at 1570.
The district court disposed of Steel Valley's claim that Radice-East was an indispensable party without performing, a Federal Rule of Civil Procedure Rule 19 analysis. It held that Radice-East was fraudulently joined and that the claim against Radice-East was not colorable. It did so without regard to Steel Valley’s assertion that the Union Switch buildings and plants were an integral part of Steel Valley’s plan of taking and redevelopment.
. Steel Valley cites Singer v. Redevelopment Auth. of Oil City, 437 Pa. 55, 261 A.2d 594 (1970) as support for its assertion in its complaint that Radice-East Hills "is the owner of the buildings, machinery, equipment and fixtures forming part of the real estate of Switch Signal." App. at 60a (emphasis added). Under the Pennsylvania common law Assembled Industrial Plant Doctrine ”[i]f the machinery, whether fast or loose, is vital to the business operation of an 'industrial plant’ and is a permanent installation therein, it is considered to be part of the real estate." Id. at 59, 261 A.2d at 596. This doctrine apparently has been applied in the areas of industrial mortgage situations, of local real estate taxation, and eminent domain law. Id.
However, for the reasons discussed in the text, infra, we do not find it necessary to rely on Steel Valley’s theory of Assembled Industrial Plant Doctrine in our disposition of this appeal.
. We recognize that Radice-East became a party to this action after Steel Valley amended its complaint to add Radice-East, a Pennsylvania corporation, in place of Radice Corp., a Florida corporation. The district court retained jurisdiction of the proceedings only because it found that Radice-East had been fraudulently joined, and thus on that theory, its joinder did not divest the court of its jurisdiction.
. Steel Valley’s brief analyzed the 19(b) factors as follows:
With respect to the first factor, a judgment rendered in the absence of Radice-East Hills would be prejudicial to Radice-East Hills. For example, "freezing" the Switch and Signal industrial facility impairs Radice-East Hills’ right to use and enjoy that property. Such a judgment would be prejudicial to SVA as well since complete relief could not be accorded if Radice-East Hills is able to pursue its own development of the land and buildings at Switch and Signal. SVA submits, with respect to the second factor, that prejudice to RadiceEast Hills or to itself could not be avoided by the shaping of relief because SVA’s prayer is diametrically opposed to the announced interest of Radice-East Hills to change the entire character of the property. Third, and without repetition of the above stated contentions, a judgment rendered in the absence of RadiceEast Hills would be inadequate in protecting the interests of Radice-East Hills and/or SVA. With respect to the fourth factor, the fact that remand is an option in the case at bar provides SVA with an adequate, available remedy in state court.
Appellant’s Brief at 23.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "manufacturing". What subcategory of business best describes this litigant?
A. auto
B. chemical
C. drug
D. food processing
E. oil refining
F. textile
G. electronic
H. alcohol or tobacco
I. other
J. unclear
Answer:
|
songer_usc2sect
|
315
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the number of the section from the title of the second most frequently cited title of the U.S. Code in the headnotes to this case, that is, title 47. In case of ties, code the first to be cited. The section number has up to four digits and follows "USC" or "USCA".
TELECOMMUNICATIONS RESEARCH AND ACTION CENTER and Media Access Project, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and the United States of America, Respondents, National Association of Broadcasters, Public Broadcasting Service, American Newspaper Publishers Association, Intervenors.
No. 85-1160.
United States Court of Appeals, District of Columbia Circuit.
Argued Feb. 20, 1986.
Decided Sept. 19, 1986.
As Amended Sept. 19, 1986.
Rehearing En Banc Denied Dec. 16, 1986.
Robert M. Gurss, with whom Andrew Jay Schwartzman and Henry Geller, Washington, D.C., were on brief, for petitioners.
C. Grey Pash, Jr., Counsel, F.C.C., with whom Jack D. Smith, Gen. Counsel, Daniel M. Armstrong, Associate Gen. Counsel, F.C.C., John J. Powers, III and Margaret G. Halpern, Attys., Dept, of Justice, Washington, D.C., were on brief, for respondents.
Richard E. Wiley, Michael Yourshaw, William B. Baker and W. Terry Maguire, Washington, D.C., were on brief, for inter-venor, American Newspaper Publishers Assn.
Henry L. Baumann, Michael D. Berg and Steven A. Bookshester, Washington, D.C., entered appearances for intervenor, National Ass’n of Broadcasters.
Peter Tannenwald, Lawrence A. Horn and Barbara S. Wellbery, Washington, D.C., entered appearances for intervenor, Public Broadcasting Service.
Before BORK and SCALIA, Circuit Judges, and MacKINNON, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge BORK.
Opinion concurring in part and dissenting in part filed by Senior Circuit Judge Mac-KINNON.
BORK, Circuit Judge:
Petitioners challenge the Federal Communications Commission’s decision not to apply three forms of political broadcast regulation to a new technology, teletext. Teletext provides a means of transmitting textual and graphic material to the television screens of home viewers.
The Communications Act of 1934, 47 U.S.C. § 312(a)(7) (1982), requires broadcast licensees to “allow reasonable access... for the use of a broadcasting station by a legally qualified candidate for Federal elective office on behalf of his candidacy.” In addition, under 47 U.S.C. § 315(a) (1982), if the licensee “permit[s] any person who is a legally qualified candidate for any public office to use a broadcasting station,” he or she incurs the additional obligation of “afford[ing] equal opportunities to all other such candidates for that office.” Complementing these statutory.provisions, there exists a form of political broadcast regulation that the Commission created early in its history in the name of its mandate to ensure the use of the airwaves in the “public ‘convenience, interest, or necessity.’ ” See Red Lion Broadcasting v. FCC, 395 U.S. 367, 376-77, 89 S.Ct. 1794, 1799, 23 L.Ed.2d 371 (1969). The “fairness doctrine,” as this policy is known, “provides that broadcasters have certain obligations to afford reasonable opportunity for the discussion of conflicting views on issues of public importance.” 47 C.F.R. § 73.1910 (1985).
The case before us presents the question whether the Commission erred in determining that these three political broadcast provisions do not apply to teletext. Because we find that the Commission acted reasonably with respect to section 312(a)(7) and the fairness doctrine, but erroneously held section 315 not to apply to teletext, we affirm in part and reverse in part, and remand to the Commission for further proceedings.
I.
The technologically novel element of teletext service is its utilization of an otherwise unused portion of the television broadcast signal. Television signals are not continuous but are sent in pulses. The human eye retains the image from one pulse to the next so that the picture is perceived as uninterrupted. The time between the pulses of regular television broadcasting (“main signal” transmission) is known as the "vertical blanking interval,” and can be used for pulses that constitute teletext transmission. As treated by the Commission in the docket now before us, “teletext” refers exclusively to such over-the-air transmissions, and not to transmission of text and graphics by way of cable or telephone. Main signal operators now control and operate teletext, though the FCC has authorized the operation of teletext “on a franchise basis” or through the “leaspng] of space to multiple users.” See Report and Order, 53 Rad.Reg.2d (P & F) 1309, 1321 (1983). The Commission, however, admonished licensees “that they remain responsible for all broadcast related teletext provided via the station’s facilities, whether produced in-house or obtained from outside sources.” Id.
To receive teletext, the viewer must have a device to decode the signal carrying the textual information and graphics. Currently, viewers may purchase teletext decoders in retail stores selling television sets. In the future, at least some television manufacturers will build decoding equipment into selected television models. Broadcasters of teletext thus have no control over who obtains the ability to decode teletext signals.
The teletext viewer begins typically by watching the display of a table of contents, which indicates what information is available and at which pages it appears. A “page” is a screen of information. Viewers may then view the information they want by flipping to the page where the desired material appears. Present teletext programming includes data of general interest such as news, sports, weather, community events, and advertising, though nothing precludes broadcasters from displaying information that appeals to audiences with special interests. Main channel broadcasting may notify viewers of material available on teletext. While teletext can display text and high-resolution graphics, no sound accompanies the visual transmissions under teletext technology. Teletext is supported by advertiser fees and involves no charge to the public.
On November 27, 1981, the FCC released a Notice of Proposed Rulemaking to explore possible authorization for television stations to operate teletext systems. See 46 Fed.Reg. 60,851 (1981). The Commission announced its goal "to provide a regulatory environment that is conducive to the emergence and implementation of new technology and new uses of the [broadcast] spectrum.” Id. The Commission added that “[i]n the case of teletext, the available evidence appears to indicate that the forces of competition and the open market are well suited to obtaining the kinds and amounts of service that are most desirable in terms of the public interest.” Id. at 60,852. The Notice therefore proposed that “teletext... be treated as an ancial-lary [sic] service” and that “[s]tations... not be required to observe service guidelines or other performance standards.” Id. at 60,853.
In its Report and Order, 53 Rad.Reg.2d (P & F) 1309 (1983), the Commission addressed the applicability of political broadcast requirements to teletext and concluded that “as a matter of law,... sections [312(a)(7) and 315] need not be applied to teletext service,” and that applying these provisions would be “both unnecessary and unwise as a matter of policy.” Id. at 1322. Moreover, the Commission “conclude[d] that the Fairness Doctrine should not be applied to teletext services.” Id. at 1324. Thus, the Report and Order sought to adopt an approach of non-regulation of teletext under any of the political broadcasting provisions administered by the FCC.
The Commission noted that section 312(a)(7) guarantees federal candidates only “ ‘reasonable access’ ” to “a broadcasting station” and considered what access would be “reasonable” when dealing with “variant broadcast services” such as teletext. See 53 Rad.Reg.2d (P & F) at 1322. Relying on Commission Policy in Enforcing Section 312(a)(7) of the Communications Act of 1934, 68 F.C.C.2d 1079, 1093 (1983), the FCC suggested that by providing a candidate access to the broad television audience attracted to the station’s regular broadcast operation a licensee satisfied its section 312(a)(7) duties even if the broadcaster at the same time denied access to the more limited audience viewing the “ancillary or subsidiary” teletext service. See 53 Rad.Reg.2d (P & F) at 1322-23.
In contrast, the Commission found section 315 wholly inapposite to teletext. Noting that a broadcast “use” triggered section 315’s substantive obligations, that a “use” required “a personal appearance by a legally qualified candidate by voice or picture,” and that the textual and graphics nature of teletext made it “inherently not a medium by which a candidate [could] make a personal appearance,” the Commission held that teletext could not trigger the requirements of section 315. See 53 Rad. Reg.2d (P & F) at 1323. The Commission also reasoned that teletext differed from “traditional broadcast programming” because it does not have the powerful audiovisual capabilities of main-channel broadcasting, and, therefore, does not pose the danger of “abuse” of these powerful sound and image “uses” that Congress envisioned in enacting section 315. See id.
The Commission reserved its most elaborate analysis for the fairness doctrine. It began with the contention that the fairness doctrine is a Commission-made policy, and that Congress did not codify the fairness doctrine when it added language recognizing that policy in the course of a 1959 amendment to section 315. 53 Rad.Reg.2d (P & F) at 1323. Thus, the 1959 amendment does not compel extension of the fairness doctrine to “new services... which did not even exist” at the time, and applications of the doctrine to serve the public interest rests in the Commission’s “sound judgment and discretion.” See id.
The Commission then determined that it should not apply the fairness doctrine to teletext, “primarily [because of] a recognition that teletext’s unique blending of the print medium with radio technology fundamentally distinguishes it from traditional broadcast programming.” 53 Rad.Reg.2d (P & F) at 1324. Noting that “scarcity” of broadcast frequencies provided the first amendment justification of the fairness doctrine’s application to traditional broadcast media, the Commission posited an “[i]mplicit... assumption that... power to communicate ideas through sound and visual images... is significantly different from traditional avenues of communication because of the immediacy of the medium.” Id. In other words, because scarcity inheres in all provisions of goods and services, including the provision of information through print media, the lessened first amendment protection of broadcast regulation must also rely upon the powerful character of traditional broadcasting. Because teletext “more closely resembles... other print communication media such as newspapers and magazines,” the Commission found the “scarcity” rationale, as reinterpreted, insufficient to justify regulating teletext.
The Commission also reasoned that teletext, as a print medium in an “arena of competition... includpng] all other sources of print material,” would not encounter the same degree of scarcity, in the usual sense, as the sound and visual images of regular programming. See 53 Rad. Reg.2d (P & F) at 1324. Thus, the Commission felt it constitutionally suspect to apply the fairness doctrine to teletext. And, in light of its obligation to “encourage, not frustrate, the[] development” of new services like teletext, the FCC decided, therefore, to heed concerns of commenters that teletext services might not prove “viable if... burdened by Fairness Doctrine obligations” and to exempt teletext from the fairness doctrine. See id.
Two motions for reconsideration of the decision not to apply content regulation to teletext were filed. Media Access Project (“MAP”), a petitioner in this appeal, argued that “[t]eletext... is intended for the general public,” and, therefore, falls within the definition of “broadcasting” in the Communications Act of 1934 and triggers broadcast regulation. See J.A. at 111-12. MAP argued that section 312(a)(7) required a licensee “ ‘to tailor [its] responses [to requests for air time] to accommodate, as much as reasonably possible, a candidate’s stated purposes in seeking air time,' ” an individualized approach inconsistent with the sweeping holding of the Report and Order. See J.A. at 112 (citing Columbia Broadcasting System, Inc. v. FCC, 453 U.S. 367, 387, 101 S.Ct. 2813, 2825, 69 L.Ed.2d 706 (1981)). MAP generally contended that teletext had broad audience potential, a good capacity to convey political information, and that the Commission must ensure access to teletext service. See id. at 113.
With respect to section 315, MAP took issue with the FCC’s view that teletext does not meet the standards for a “use.” First, MAP argued that teletext could “produce graphic images, including... perfectly recognizable portraits of... candidates,” and, therefore, met the Commission’s prior definition of a “use” as “ ‘any broadcast or cablecast of a candidate’s voice or picture.’” See J.A. at 116, 117. But even if teletext had not possessed such visual capabilities, MAP urged that the Commission would have a duty to redefine “use” to account for this new form of broadcasting technology. See J.A. at 117.
As for the fairness doctrine, MAP contended that “[t]he standard of fairness... inheres in the public interest standard” the FCC is charged with enforcing, and that by the 1959 amendments “Congress did not merely ‘ratify’ the Commission’s fairness doctrine... [but] clearly made [it] a binding part of the statute.” J.A. at 118, 119. MAP argued, therefore, that the FCC lacked the discretion to refuse to apply the fairness doctrine to teletext broadcast operations.
The other Petition for Reconsideration, filed by Henry Geller, Donna N. Lampert, and Philip A. Rubin, made many of the same legal arguments put forward by MAP. Their petition added that the characterization of “teletext as ‘ancillary,’ ‘novel,’ or ‘a print medium’ ” could not avoid the requirements of political broadcast regulation, and that the scarcity doctrine had nothing to do with the “immediacy” of traditional broadcasting’s sounds and images. J.A. at 126-27 & n. 6. This petition also urged that the full panoply of political broadcasting regulation be applied to teletext.
On November 8, 1984, the Commission rejected these petitions in a Memorandum Opinion and Order, 101 F.C.C.2d 827 (1985). While the Memorandum Opinion and Order largely rehearsed the points made in the Commission’s earlier decision, the Commission elaborated upon the legal relevance of the differences between teletext and traditional broadcasting:
We consider teletext clearly as an ancillary service not strictly related to the traditional broadcast mode of mass communication. First, the very definition of teletext confined the service to traditional print and textual data transmission. Thus, although these data will be transmitted at some point through the use of the electromagnetic spectrum, its primary and overriding feature will be its historical and cultural connection to the print media, especially books, magazines and newspapers. Users of this medium will not be listening or viewing teletext in any traditional broadcasting sense, but instead will be reading it, and thus be able to skip, scan and select the desired material in ways that are incomparable to anything in the history of broadcasting and broadcast regulation. In this light, we believe that the content regulations created for traditional broadcast operations are simply out of place in this new print-related textual data transmission medium. We decline to attribute to Congress an intent to extend broadcast content regulation... to this new medium.
Id. at 833 (citations and footnote omitted; emphasis in original).
The Commission also provided further explanation of its first amendment theory and made clear that it meant this theory to cover the applicability of all forms of political broadcasting regulation to teletext. Relying upon Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974) (striking down a state’s newspaper right-of-reply statute as running afoul of the first amendment’s protection of editorial judgment and control), and asserting that it considered teletext a “print medium” for first amendment purposes, see 101 F.C.C.2d at 834 & n. 16, the Commission found that “neither the letter nor the purposes of the First Amendment would be served by... a ruling” that would “require[] [the Commission] to intrude into the editorial judgments of teletext editors.” 71c?. at 834. Given Tomillo’s clear refusal to allow interference with editorial judgments in the print media and “the historical sensitivity of Congress to these [first amendment] issues,” the Commission would not “construe the intent of Congress to apply Section 315 and similar statutory provisions, and... associated rules and policies, to the teletext medium.” Id. (footnote omitted). Accordingly, the Commission adhered to the results of its earlier Report and Order.
On June 3, 1985, the Telecommunications Research and Action Center and the Media Access Project (“TRAC/MAP”) filed a petition for review in this court, largely renewing the substantive legal arguments asserted in the petitions for reconsideration below. Because the Commission’s interpretation of the first amendment affects its analysis of political broadcasting regulation and teletext at several points, we discuss that interpretation first. We then address the petitioners’ contentions with respect to section 312(a)(7), section 315, and the fairness doctrine in that order.
II.
In the Commission’s view the regulation of teletext’s “unique blend of the print medium with radio technology” raises first amendment problems not associated with the regulation of traditional broadcasting. Thus, the argument goes, existing Supreme Court precedent upholding political content regulation of traditional broadcasting does not necessarily justify the application of such regulation to the new medium of teletext. While not concluding that this application to a “print medium” like teletext would violate the first amendment, the Commission suggested that its application of that regulation would be sufficiently suspect to justify not imputing to Congress an intent to apply “section 315 and similar statutory provisions, and... associated rules and policies, to the teletext medium.” 101 F.C.C.2d at 834. To appreciate the Commission’s argument, a brief discussion of the case law will be useful.
In Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969), the Supreme Court rejected a first amendment challenge to the fairness doctrine and related rules governing personal attacks and political editorials by licensees. In reasoning that applies generally to political broadcasting regulation, the Court found justification for limiting first amendment protection of broadcasting in the “scarcity doctrine.” Given the fact of a limited number of broadcast frequencies and the “massive” problem of broadcast interference, the Court remarked that “only a tiny fraction of those with resources and intelligence can hope to communicate by radio at the same time if intelligible communication is to be had, even if the entire radio spectrum is utilized in the present state of commercially acceptable technology.” Id. at 388, 89 S.Ct. at 1805. The Court observed that this necessitated the division of the radio spectrum into usable portions, the assignment of subdivisions of the frequency to individual users, and regulation under which the “Government... tell[s] some applicants that they [cannot]... broadcast at all because there [is] room for only a few.” Id. Therefore, the Court asserted, because “there are substantially more individuals who want to broadcast than there are frequencies to allocate, it is idle to posit an unabridgeable First Amendment right to broadcast comparable to the right of every individual to speak, write or publish.” Id.
Observing that licensees and those who can obtain no license have identical first amendment rights, the Court in Red Lion further concluded that
[t]here is nothing in the First Amendment which prevents the Government from requiring a licensee to share his frequency with others and to conduct himself as a proxy or fiduciary with obligations to present those views and voices which are representative of his community and which would otherwise, by necessity, be barred from the airwaves.
395 U.S. at 389, 89 S.Ct. at 1806. The Court then enunciated the classic formulation of the scarcity doctrine:
Because of the scarcity of radio frequencies, the Government is permitted to put restraints on licensees in favor of others whose views should be expressed on this unique medium. But the people as a whole retain their interest in free speech by radio and their collective right to have the medium function consistently with the ends and purposes of the First Amendment. It is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.
Id. at 390, 89 S.Ct. at 1806. It was on this principle that the Court found no first amendment infirmity in political broadcast regulation.
The Commission believes, however, that the regulation of teletext falls not within the permissive approach of Red Lion, but rather within the strict first amendment rule applied to content regulation of the print media. In Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974), the Court struck down an editorial right-of-reply statute that applied to newspapers. The content regulation in Tomillo bore a strong resemblance to that upheld in Red Lion. In Tomillo the Court held that such regulation impermissibly interfered with the newspapers’ “editorial control and judgment.” Id. at 258, 94 S.Ct. at 2840. The Court made the broad assertion that “[i]t has yet to be demonstrated how governmental regulation of this crucial [editorial] process can be exercised consistent with the First Amendment guarantees of a free press.” Id. If the Commission’s view is correct, and Tomillo rather than Red Lion applies to teletext, that service is entitled to greater first amendment protections than ordinary broadcasting and it would be proper, at a minimum, to construe political broadcasting provisions narrowly to avoid constitutionally suspect results.
The Commission has offered two grounds for its view that Tomillo rather than Red Lion is pertinent. Both reasons relate to the textual nature of teletext service. First, the Commission read an “immediacy” component into the scarcity doctrine:
Implicit in the “scarcity” rationale... is an assumption that broadcasters, through their access to the radio spectrum, possess a power to communicate ideas through sound and visual images in a manner that is significantly different from traditional avenues of communication because of the immediacy of the medium.
53 Rad.Reg.2d (P & F) at 1324. Second, the Commission held that the print nature of teletext “more closely resembles, and will largely compete with, other print communication media such as newspapers and magazines.” Id. Under this analysis, scarcity of alternative first amendment resources does not exist with respect to teletext. We address these points in turn.
With respect to the first argument, the deficiencies of the scarcity rationale as a basis for depriving broadcasting of full first amendment protection, have led some to think that it is the immediacy and the power of broadcasting that causes its differential treatment. Whether or not that is true, we are unwilling to endorse an argument that makes the very effectiveness of speech the justification for according it less first amendment protection. More important, the Supreme Court’s articulation of the scarcity doctrine contains no hint of any immediacy rationale. The Court based its reasoning entirely on the physical scarcity of broadcasting frequencies, which, it thought, permitted attaching fiduciary duties to the receipt of a license to use a frequency. This “immediacy” distinction cannot, therefore, be employed to affect the ability of the Commission to regulate public affairs broadcasting on teletext to ensure “the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences.” Red Lion, 395 U.S. at 390, 89 S.Ct. at 1807.
The Commission’s second distinction— that a textual medium is not scarce insofar as it competes with other “print media”— also fails to dislodge the hold of Red Lion. The dispositive fact is that teletext is transmitted over broadcast frequencies that the Supreme Court has ruled scarce and this makes teletext’s content regulable. We can understand, however, why the Commission thought it could reason in this fashion. The basic difficulty in this entire area is that the line drawn between the print media and the broadcast media, resting as it does on the physical scarcity of the latter, is a distinction without a difference. Employing the scarcity concept as an analytic tool, particularly with respect to new and unforeseen technologies, inevitably leads to strained reasoning and artificial results.
It is certainly true that broadcast frequencies are scarce but it is unclear why that fact justifies content regulation of broadcasting in a way that would be intolerable if applied to the editorial process of the print media. All economic goods are scarce, not least the newsprint, ink, delivery trucks, computers, and other resources that go into the production and dissemination of print journalism. Not everyone who wishes to publish a newspaper, or even a pamphlet, may do so. Since scarcity is a universal fact, it can hardly explain regulation in one context and not another. The attempt to use a universal fact as a distinguishing principle necessarily leads to analytical confusion.
Neither is content regulation explained by the fact that broadcasters face the problem of interference, so that the government must define useable frequencies and protect those frequencies from encroachment. This governmental definition of frequencies is another instance of a universal fact that does not offer an explanatory principle for differing treatment. A publisher can deliver his newspapers only because government provides streets and regulates traffic on the streets by allocating rights of way. Yet no one would contend that the necessity for these governmental functions, which are certainly analogous to the government’s function in allocating broadcast frequencies, could justify regulation of the content of a newspaper to ensure that it serves the needs of the citizens.
There may be ways to reconcile Red Lion and Tomillo but the “scarcity” of broadcast frequencies does not appear capable of doing so. Perhaps the Supreme Court will one day revisit this area of the law and either eliminate the distinction between print and broadcast media, surely by pronouncing Tomillo applicable to both, or announce a constitutional distinction that is more usable than the present one. In the meantime, neither we nor the Commission are free to seek new rationales to remedy the inadequacy of the doctrine in this area. The attempt to do that has led the Commission to find “implicit” considerations in the law that are not really there. The Supreme Court has drawn a first amendment distinction between broadcast and print media on a premise of the physical scarcity of broadcast frequencies. Teletext, whatever its similarities to print media, uses broadcast frequencies, and that, given Red Lion, would seem to be that.
The Commission, therefore, cannot on first amendment grounds refuse to apply to teletext such regulation as is constitutionally permissible when applied to other, more traditional, broadcast media. We now turn to the consideration of the particular regulation at issue in this case.
III.
Section 312(a)(7) states that “[t]he Commission may revoke any station license or construction permit... for willful or repeated failure to allow reasonable access to or to permit purchase of reasonable amounts of time for the use of a broadcasting station by a legally qualified candidate for Federal elective office on behalf of his candidacy.” 47 U.S.C. § 312(a)(7) (1982). The question here is the rationality of the Commission’s decision about the applicability of this provision to teletext.
At the outset, we state what we understand the Commission’s decision to be. In introducing its legal analysis, the Commission stated: “As discussed below, we have concluded that, as a matter of law,... sections [312(a)(7) and 315] need not be applied to teletext service.” 53 Rad.Reg.2d (P & F) at 1322. The Commission stated that “the statutory requirement of affording reasonable access is adequately satisfied by permitting federal candidates access to a licensee’s regular broadcast operation; it does not require access to ancillary or subsidiary service offerings like teletext.” Id. The Report and Order’s analysis of section 312(a)(7) concluded by stating that the Commission “perceive[d] no legal requirement that licensees grant federal candidates access to their teletext offerings.” Id. at 1323. Finally, in rejecting reconsideration of this issue in its Memorandum Opinion and Order, the FCC asserted: “Guided as we are in such matters by a reasonableness standard, we find that a broadcaster could satisfy the ‘reasonable access’ rights of a candidate without use of teletext.” 101 F.C.C.2d at 834. We find it clear, therefore, that the Commission believes that a broadcaster cannot be deemed to have acted unreasonably under the statute on the ground that he or she adopts a policy refusing to permit any access to teletext. We now turn to our analysis of the Commission’s conclusion on this point.
The scope of review in this case is quite narrow. In Columbia Broadcasting System, Inc. v. FCC, 453 U.S. 367, 386, 101 S.Ct. 2813, 2825, 69 L.Ed.2d 706 (1981) (“CBS”), the Supreme Court stated that, in enacting section 312(a)(7), Congress “[e]ssentially... adopted a ‘rule of reason’ and charged the Commission with its enforcement.” The Court also asserted that Congress “did not give guidance on how the Commission should implement the statute’s access requirement.” Id. In such a case, where Congress has left a gap in the statutory scheme, “there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843-44, 104 S.Ct. 2778, 2782-83, 81 L.Ed. 694 (1984) (footnote omitted). In the determination of whether the agency’s decision has run afoul of these standards, the parties challenging the agency action bear the burden of proof. See San Luis Obispo Mothers for Peace v. United States Nuclear Regulatory Commission, 789 F.2d 26, 37 (D.C.Cir.1986) (en banc). Thus, we approach the question of the agency’s construction of section 312(a)(7) with significant “judicial deference,” CBS, 453 U.S. at 390, 101 S.Ct. at 2827, and we must uphold that construction if it is a “reasonable” one. Chevron, 467 U.S. at 844, 104 S.Ct. 2783. We now examine whether the “Commission’s action represents a reasoned attempt to effectuate the statute’s access requirement.” CBS, 453 U.S. at 390, 101 S.Ct. at 2827.
Petitioners argue that section 312(a)(7), as interpreted by the Commission and the Supreme Court, “prohibit[s]... blanket bans on candidate advertising and require[s] broadcasters to accommodate the reasonable needs of candidates.” Brief for TRAC/MAP at 49. These standards, they contend, foreclose the Commission’s adopting a general rule allowing a broadcaster to bar candidates from access to teletext without running afoul of section 312(a)(7). If we agree with petitioners that the Commission’s decision in the teletext docket was inconsistent with the approach previously adopted by the Commission and approved by the Supreme Court, we must reverse and remand unless the agency has supplied “a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored.” Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2233, 29 L.Ed.2d 701 (1971).
Petitioners rely heavily upon CBS. The Supreme Court in CBS reviewed the FCC’s construction of section 312(a)(7) in connection with a determination that the television networks had failed to give President Carter reasonable access in order to announce his bid for reelection. In upholding the Commission’s finding of a violation, the Court also upheld the individualized, case-by-case approach that the Commission had adopted in enforcing section 312(a)(7), see, e.g., Commission Policy in Enforcing Section 312(a)(7) of the Communications Act, 68 F.C.C.2d 1079 (1978) ("1978 Policy Statement”). The Court described the Commission’s policy as follows:
[Section 312(a)(7) ] requests must be considered on an individualized basis, and broadcasters are required to tailor their responses to accommodate, as much as reasonably possible, a candidate’s stated purposes in seeking air time.... If broadcasters take the appropriate factors into account and act reasonably and in good faith, their decisions will be entitled to deference even if the Commission’s analysis would have differed in the first instance. But if broadcasters adopt “across-the-board policies” and do not attempt to respond to the individualized situation of a particular candidate, the Commission is not compelled to sustain their denial of access.
CBS, 453 U.S. at 387-88,101 S.Ct. at 2825-26 (citations omitted). The Court approved the rationality of the Commission’s standards proscribing the use of “blanket rules” to govern access and requiring that “each request... be examined on its own merits.” See id. at 389, 101 S.Ct. at 2826. Acknowledging that “the adoption of uniform policies might well prove more convenient for broadcasters,” the Court nonetheless accepted the Commission’s view that “such an approach would allow personal campaign strategies and exigencies of the political process to be ignored.” Id. Because “§ 312(a)(7) assures a right of reasonable access to individual candidates for federal elective office, and the Commission’s requirement that their requests be considered on an individualized basis is consistent with that guarantee,” the Court upheld the Commission’s approach. Id. (emphasis in original).
Contrary to petitioners’ assertions, there is, we believe, no conflict between the Commission’s section 312(a)(7) policy, as approved by the Supreme Court in CBS, and the decision made in the teletext docket. When the Supreme Court approved the Commission’s policy of proscribing “blanket rules” or “uniform policies” concerning access, this meant only that broadcasters could not adopt policies that would effectively nullify the statute’s rule of reason approach to granting access to federal candidates. This does not, and could not, suggest, however, that no rules may be applied in the determination of what access is reasonable under the statute. Reasonableness does not mean that an impressionistic judgment must be made in every case. It would be impossible to follow a consistent policy with respect to reasonableness without framing some rules to guide the decisions in particular cases. A rule of reason, as the course of antitrust law shows, implies a middle range of cases which require the individualized judgment and a nice balancing of competing factors. Within a rule of reason, however, there are also cases at the extremities of the spectrum where reasonableness or unreasonableness is clear. Thus, there are areas of per se legality and illegality within any rule of reason. In the context of section 312(a)(7), Congress has empowered the Commission to establish rules and regulations to guide broadcasters in their determination of what access is reasonable, see CBS, 453 U.S. at 386, 101 S.Ct. at 2825 (citing 47 U.S.C. § 303(r)), and, while the Commission has principally developed standards on a case-by-case basis, it has also identified some of the extreme cases in which the reasonableness or unreasonableness of a practice is clear.
The Court in fact approved the use of per se rules by assenting to the Commission’s policy limiting the applicability of section 312(a)(7) to the period after a campaign commences, a limitation nowhere found in the statute. In this respect, the Court explained: “By confining the applicability of the statute to the period after the campaign begins, the Commission has limited its impact on broadcasters and given substance to its command of reasonable access.” CBS, 453 U.S. at 388, 101 S.Ct. at 2826 (emphasis in original). This amounts to a rule of. per se reasonableness: refusing access to a qualified federal candidate before the beginning of a campaign will never be held unreasonable under section 312(a)(7). Thus, when the Court stated that “the Commission’s standards proscribe blanket rules concerning access,” see 453 U.S. at 389, 101 S.Ct. at 2826, it was necessarily referring to rules whose effect would be to eliminate the case-by-case approach in the vast middle ground where reasonableness or unreasonableness is not clear. It did not mean that the Commission had foreclosed itself from adopting any rules defining the clear cases under the statute. In the teletext decision, that is
Question: What is the number of the section from the title of the second most frequently cited title of the U.S. Code in the headnotes to this case, that is, title 47? Answer with a number.
Answer:
|
songer_counsel1
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D
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
Your task is to determine the nature of the counsel for the appellant. If name of attorney was given with no other indication of affiliation, assume it is private - unless a government agency was the party
In the Matter of PENN CENTRAL TRANSPORTATION COMPANY, Debtor. Appeal of TWENTY-ONE RETIRED EMPLOYEES, Appellants in No. 73-1081. Appeal of David C. BEVAN, Appellant in No. 73-1098. Appeal of Alfred E. PERLMAN, Appellant in No. 73-1204. Appeal of Stuart T. SAUNDERS, Appellant in No. 73-1205. Appeal of Arthur E. BAYLIS et al., Appellants in No. 73-1206. Appeal of Allen J. GREENOUGH, Appellant in Nos. 73-1207 and 73-1208.
Nos. 73-1081, 73-1098, and 73-1204 to 73-1208.
United States Court of Appeals, Third Circuit.
Argued May 14, 1973.
Decided Aug. 21, 1973.
Theodore R. Mann, Barry E. Ungar, Mann & Ungar, Philadelphia, Pa., for appellants, Twenty-one Retired Employees.
Joseph W. Swain, Jr., Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa., for appellant, James M. Symes.
James M. Marsh, LaBrum & Doak, Philadelphia, Pa., for appellant, David C. Bevan.
Thomas B. Rutter, Philadelphia, Pa., for appellant, Alfred E. Perlman.
Bennett G. Picker, Steven R. Waxman, Bolger & Picker, Philadelphia, Pa., for appellant, Stuart T. Saunders.
George M. Kevlin, Henry M. Irwin, Kevlin & Irwin, Philadelphia, Pa., for appellants, Arthur E. Baylis, and others.
Jacob I. Goodstein, Goodstein, Zamore, Mehlman & Krones, New York City, for appellant, Arthur J. Greenough.
Robert W. Blanchette, Marvin Comis-ky, Goncer M. Krestal, Blank, Rome, Klaus & Comisky, Philadelphia, Pa., for appellees, Trustees of Property of Penn Central Transportation Co., Debtor.
Before VAN DUSEN, GIBBONS and ROSENN, Circuit Judges.
OPINION OF THE COURT
GIBBONS, Circuit Judge.
We here consider consolidated appeals from two orders, Nos. 1087 and 1088 of the Penn Central reorganization court, which deal with the continuation of payments to former Penn Central executives pursuant to several retirement programs. The district court’s opinion on these orders is reported. In the Matter of Penn Central Transportation Company, Debtor, 354 F.Supp. 408 (E.D. Pa.1973). Twenty-eight retired Penn Central employees have appealed. The appeals present as issues:
(1) common to all appellants, the propriety of the district court’s conclusion that assets held in Penn Central’s Contingent Compensation Plan (CCP) became, on the filing of the petition for reorganization, property of the trustees in reorganization, leaving appellants as creditors holding unsecured claims for deferred compensation ;
(2) common to six appellants, the propriety of the district court’s ruling that the reorganization court would continue payments under the Contingent Compensation Plan as expenses of operation of the reorganization, but with a limitation that total pension payments from the Penn Central Plan for Supplemental Pensions and Penn Central unfunded retirement programs, including the Contingent Compensation Plan, would not exceed $50,000 a year to any former employee; and
(3) in the case of Symes, the application of the $50,000-a-year limitation not only to his claim under the Contingent Compensation Plan, but also to his claim under a $10,000-a-year special pension awarded to him by the Penn Central Board of Directors on October 23, 1968. Mr. Symes’ case will be dealt with separately hereinafter.
The Contingent Compensation Plan was established by the Board of Directors of the former Pennsylvania Railroad in 1952, was continued after the 1968 merger with New York Central, and was amended, unilaterally, by the Board of Directors from time to time thereafter. When cash salary increases were granted to union employees or to non-union employees not included in the CCP, the qualifying participants were awarded comparable adjustments in compensation, but not in cash. Qualifying participants included employees earning $30,000 or more a year. In its preamble the CCP contains this general description:
“As more fully described below, the Board of Directors, from time to time, may allot to any employe an amount representing contingent compensation subject to the terms and conditions set forth herein. At the discretion of the Board an amount equivalent to such allotment, or any part thereof, may be transferred to a reserve fund and invested; and to the extent of such transfer, the payments to a participant shall be measured by the value of the reserve fund. However, the assets held in the reserve fund will at all times be available for any corporate purpose.
After retirement the compensation contingently allotted to a qualifying employe will be paid to him in installments, subject to certain conditions. In the event of death, before or after retirement, payments will be made to the employe’s beneficiary.”
During the life of the CCP 164 employees were designated by a committee of the Board of Directors as qualifying participants. From 1952, when it was adopted, until June 21, 1970, when by Board action it was terminated, salary increases to the qualifying participants were made in the form of allotments to the CCP. The plan provided for periodic transfer of the allotments to a reserve fund for investment. The extent of such transfer payments to a participant would be measured by the value of the reserve fund. The participant’s allotment units would be paid out after his retirement in annual installments, the amount of an installment being determined by reference to the value of his allotment units on the valuation date preceding the date of payment. The CCP contained forfeiture provisions applicable both before and after retirement. With respect to the reserve fund the CCP provided in relevant parts:
“Section 401. The Board may authorize the establishment at any time of a Contingent Compensation Reserve Fund, hereinafter called the Fund. The Fund shall not be a trust' fund and the assets therein shall be available at all times for any corporate purpose of the Company. A participant shall have no right in or to any funds or property which may be held in the Fund.
*- * * -X- * *
Section 1201. No participant nor any other person shall have any interest in any fund or in any specific asset or assets of the Company by reason of amounts contingently allotted to him, nor any right to receive any distribution under the Plan except as and to the extent expressly provided in the Plan ....
Section 1401. . . . No consent of any participant shall be required, however, in connection with any amendment, suspension or termination of the Contingent Compensation Reserve Fund, which shall remain subject at all times to the unrestricted control of the Company.”
From time to time Penn Central distributed to qualifying employees descriptive summaries of the CCP. Typical of the relevant language of such summaries is the description from the one dated October 1, 1969:
“Either the contingent allotments or the Fund may be discontinued at any time at the discretion of the Board, however, in either instance employes’ rights remain whole for the period prior to such termination date.
* * * * -x- #
The assets of the Contingent Compensation Reserve Fund remain assets of the Penn Central Transportation Company and subject to the rights of all creditors of the Company. No participant has any right to receive payments at any other times or in any other amounts than as provided by the Plan.”
When, shortly before the filing of the petition for reorganization, the Penn Central directors terminated the CCP, the Contingent Compensation Reserve Fund contained in excess of $8.6 million. Of this sum, a substantial amount represented appreciation in the fund investments over the initial allotments made on account of the participants’ services. Further appreciation took place after the filing of the petition for reorganization, so that when the district court made the rulings appealed from the Fund was valued at over $10 million.
Originally the trustees petitioned the reorganization court for authorization to disaffirm all obligations' under the CCP and to expend the entire Contingent Compensation Reserve Fund for general railroad purposes. Thereafter, recognizing that such a result could adversely affect the morale of those qualifying participants who were still employed by the railroad, the trustees filed a revised petition seeking approval of a proposed settlement with the CCP claimants. Under this proposed settlement, $2.6 million of the Fund balance would be placed in a reserve fund managed by an independent financial advisor and would be distributed to the participants in proportion to their allotment units, but with the value fixed at the amounts actually allotted but not yet received, or at the value of the pro rata shares of the Fund as of December 31, 1970, whichever was less, and all subject to a $50,000 limitation per person per year. The proposed settlement had other features which need not be alluded to because for a number of reasons the offer was withdrawn, and the matter proceeded to hearing on a revised trustees’ proposal. That proposal was to liquidate the entire Fund, to use the entire Fund for operating expenses, but to pay the participants, as an administration expense, as cash permitted, the amounts proposed in the earlier settlement proposal. The trustees contemplated that such an undertaking by them would be conditioned upon the relinquishment by the participants of any rights to receive payments beyond their actual allotments (or their share in the Fund valued as of December 31,1970, if that was lower).
The district court did not go so far as the trustees proposed. The court’s conclusions here challenged were:
“3. Participants in the Contingent Compensation Plan have no legal or equitable interest in or claim to the assets in the Contingent Compensation Reserve Fund. Each participant in the Contingent Compensation Plan has a valid claim for the full amount to which he is entitled under the terms of the Plan, but the Trustees should be authorized and directed to recognize such claims during reorganization only to the extent represented by the formula proposed by the Trustees in settlement (i. e., reimbursement of accrued allotments, or pro rata share of the Fund as of December 31, 1970, whichever was less); and such claims should be paid during reorganization only as cash permits. Unless and until otherwise ordered by this Court, the Trustees should set aside and reserve the sum of $2.6 million in order to meet these payments.
4. During reorganization, the Trustees should make no payments from the estate of the Debtor (whether by reason of unfunded retirement programs, or the Contingent Compensation Plan) where the effect of such payment would be that the aggregate amount received by a retired employee from all sources related to the Debtor (i. e., the Plan for Supplemental Pensions, unfunded retirement programs, and the Contingent Compensation Plan) would exceed $50,000 per an-num.” 354 F.Supp. at 419.
This disposition of the Fund was implemented by Order No. 1088, and a stay was denied both by the district court and by this court. All but $2.6 million has now been expended for general railroad purposes. While Order No. 1088 provides that this sum be invested as a reserve to meet the payments to participants contemplated by the decision, it also provides:
“Said reserve shall remain the property of the Trustees; establishment and maintenance of said reserve shall not give rise to any legal or equitable interest or claim therein on behalf of any participant.”
Summarizing, then, the orders appealed from (1) relegated qualifying participants in the CCP to the status of unsecured creditors, to be dealt with in the plan of reorganization in some as yet undetermined manner, (2) authorized the trustees to treat the participants’ claims as in the nature of unfunded pension liabilities and to pay these, in reduced amounts, as current operating expenses, and (3) set aside from the $10 million Contingent Compensation Reserve Fund $2.6 million as a reserve from which to meet those operating expenses. The reserve was recognized to be a matter of grace, however, and subject to reconsideration by the reorganization court.
It is common ground between the appellants and the trustee-appellees that in a railroad reorganization, some payment on account of unfunded pension liabilities by the trustees are properly treated as necessary and usual operating expenses and as a cost of doing business. In Tate v. New York, New Haven & Hartford R. R., 332 F.2d 449 (2d Cir. 1964), the Second Circuit justified such payments as necessary to preserve the morale of present and future employees. In Bowen v. Hockley, 71 F.2d 781, 785-786 (4th Cir. 1934), the practice was justified on the ground that the pensioners’ past services helped to create and preserve the estate being administered. Apparently payment of unfunded pension liabilities during a railroad reorganization is a recognized tradition in the industry. See Myers, Financial Impact of Pension Costs on the Railroad Industry, 7 Lab.L.J. 265, 266 (1956). Compare In re Compania De Los Ferrocarriles De Puerto Rico, 76 F.Supp. 521 (D.P.R.1948); cf. Alpert v. New York, New Haven & Hartford R. R., 348 F.2d 304 (2d Cir. 1965) (distinguishing deferred compensation contracts from pensions). This court has not explicitly ruled on the practice. Since no party to this appeal challenges it, we accept it, for present purposes, as a governing rule. Nor do we reach in this case any issue as to the ultimate priority, if any, to which the CCP claimants may be entitled in a reorganization plan. This appeal deals only with the district court’s rejection of appellants’ contentions as to their present rights in the Contingent Compensation Reserve Fund. These contentions are:
(1) that the CCP should be regarded as a funded rather than as an unfunded pension plan, (or as the trustees prefer, deferred compensation plan) and that the trustees have no interest in the Fund;
(2) that at least as to those participants who retired prior to termination of the CCP, their claims should be treated as vested and secured;
(3) that the reduction in benefits resulting from the refusal of the court to give effect to appreciation in the Fund beyond the original allotments is inconsistent with the practice, referred to above, of recognizing pension liabilities during a railroad reorganization ; and
(4) that the $50,000 per annum ceiling on pension payments during reorganization is discriminatory and improper.
In support of their contention that the CCP should be regarded as a funded rather than an unfunded pension plan, appellants argue that the Contingent Compensation Reserve Fund was a trust, express, constructive, or resulting. The Plan provisions quoted above, the Plan as a whole, and all the documents in the record referring to it negate any intention on the part of the Pennsylvania or Penn Central Directors to create an express trust. See Restatement (Second) of Trusts § 2 (1959). Since there was neither an express trust which failed nor a transfer of property paid for by another, there could be no resulting trust. Restatement (Second) of Trusts, chapter 12 (1959). Had the Fund, while held by Penn Central, been held in a trust capacity, there would be room for argument that the reorganization trustees became constructive trustees. Restatement óf Restitution § 160 (1937). But where, as here, the Plan made clear that the Fund was held as a part of the company’s general assets, subject at all times to its use and disposition, and subject to the claims of its creditors, there is no basis from which a constructive trust could be implied. The CCP was, as the district court found, nothing more than an executory contract calling for compensation after retirement.
Nor can any distinction be made between those participants retired prior to termination of the CCP and those still employed thereafter. The Plan itself makes no such distinction. Even the amount to be paid remains uncertain until the valuation date immediately prior to . the payment. Moreover, the benefits remain forfeitable even after retirement if the retiree does not refrain from activities adversely affecting the company’s best interests. Compare the Plan with Retirement Board v. McGovern, 316 Pa. 161, 174 A. 400 (1934). But in any event, appellants’ argument that their rights “vested” upon retirement is entirely beside the point. Their rights may well be “vested”; they are nevertheless unsecured. The issue remains: how should “vested” ex-ecutory contract pension rights be treated during a railroad reorganization.
Accepting, as have the parties, the general principle that some payments of unfunded pension liabilities are a practical necessity if a railroad is to be successfully operated in reorganization, it does not follow that in applying the principle the reorganization court must enforce each executory pension contract exactly in accordance with its terms. We are dealing with the powers of a court of equity to deal practically with the ongoing problems of employee morale, retention and recruitment. Even looked upon as an equitable recognition of the contributions made to the creation and preservation of the estate, the practice does not necessitate confining the court to the straight jacket of the underlying contract. Indeed, one can envisage a situation where recognizing the exact terms of an unfunded pension contract might both have an adverse effect upon morale of present and future employees and be inconsistent with any contribution made to the debt- or’s estate. Accepting the principle of some payment of unfunded pension liabilities, no more is required than a responsible exercise of equitable discretion. We find no abuse of discretion in Order No. 1087.
What we have said about the court’s equitable discretion with respect to the treatment of payments based upon appreciation in the Contingent Compensation Reserve Fund applies as well to the $50,000-a-year limit. The district court found as a fact that this level of pension would afford each of the participants a decent living standard. We will not second guess his well-considered judgment that no more was appropriate during the pendency of the reorganization.
Finally, there is the separate contention of appellant Symes that the court erred in refusing to continue payment, during reorganization, of a special pension of $10,000 a year voted by the Board of Directors on October 23, 1968. Order No. 1087 makes no final disposition of Mr. Symes’ claim on this special arrangement, but it is subject to the overall limitation of $50,000 a year, and Mr. Symes’ pensions from other Penn Central sources exceed this amount. For purposes of payment during reorganization, nothing distinguishes the October 23, 1968 unfunded pension contract from the other unfunded pension contracts dealt with in Order No. 1087.
We emphasize that because the parties agree that some payments on unfunded pension liabilities during a railroad reorganization are at least proper, this opinion has not dealt definitively with questions of the extent of or the limitations upon the reorganization court’s power in this respect. We also emphasize that the orders appealed from do not determine how the appellants’ claims should be dealt with in a plan of reorganization or a liquidation.
Orders No. 1087 and 1088 will be affirmed.
. Symes, Greenough, Bevan, Saunders, Smueker and Perlman.
. The Plan for Supplemental Pensions is a funded retirement plan. Order No. .278 held that the trustees had no interest in the fund. Order No. 1087 authorizes the trustees to continue the Plan in existence, making the necessary employer contributions. There is no appeal from this feature of Order No. 1087.
. These include two supplementary benefit arrangements of the New York Central, and the New I-Iaven pension plan which Penn Central assumed in the 1968 merger, an Interim or Early Retirement Plan designed to encourage attrition of the labor force, and additional pension benefits for prior service at other railroads. Order No. 1087 authorizes the trustees to continue these plans in effect and to make all payments necessary to implement them. There is no appeal from this feature of Order No. 1087.
Question: What is the nature of the counsel for the appellant?
A. none (pro se)
B. court appointed
C. legal aid or public defender
D. private
E. government - US
F. government - state or local
G. interest group, union, professional group
H. other or not ascertained
Answer:
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songer_treat
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G
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What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
Claude E. LONG, Plaintiff-Appellee, v. FORD MOTOR COMPANY, Defendant-Appellant.
No. 73-1993.
United States Court of Appeals, Sixth Circuit.
Argued Feb. 7, 1974.
Decided April 30, 1974.
Louis F. Oberdorfer, Washington, D. C., for defendant-appellant; James Robertson, Peter A. Bell, Cary Lerman, Washington, D. C., Joseph A. O’Reilly, James R. Jackson, Ford Motor Co., Dearborn, Mich., on brief; Wilmer, Cutler & Pickering, Washington, D. C., of counsel.
William D. Haynes, Detroit, Mich., for plaintiff-appellee; Y. Paul' Donnelly, Detroit, Mich., on brief.
Before CELEBREZZE and ENGEL, Circuit Judges, and ROSENSTEIN, Senior Customs Judge.
The Honorable Samuel M. Rosenstein, Senior Judge, United States Customs Court, sitting by designation.
CELEBREZZE, Circuit Judge.
Ford Motor Company appeals from a judgment awarding Claude E. Long $10,949 on his claim that his discharge from Ford was racially discriminatory in violation of the Civil Rights Act of 1866, 42 U.S.C. § 1981. We reverse and remand for further consideration.
Claude Long, a black college graduate and former Department of Labor compliance officer, sought employment with Ford Motor Company, hoping to get into industrial management in the field of labor relations. On July 19, 1967, Long was hired as a production line foreman. After nearly two years on this job, during which time he received three satisfactory and one unsatisfactory performance evaluations, Long filed a complaint with the Michigan Civil Rights Commission, alleging that his race was the cause of harassment, an unfair performance review, and the denial of a promotion. In May 1969, Long was transferred to the Industrial Relations Department of Ford’s Frame Plant, and he withdrew his charge prior to investigation.
At the Frame Plant, Long was rotated among several positions. He began as a “wage analyst” on June 1, 1969. In January 1970 he was assigned to head the Suggestions Program, in which capacity he received an award. In April he was shifted to a position where he developed the Frame Plant’s medical leave procedures. He was returned to the wage analyst position in June 1970. On these jobs, Long received a “satisfactory plus” performance evaluation on December 1, 1969, a letter of repimand on July 24, 1970 (prompted primarily by work left on his desk when he left for vacation on June 28), and an “unsatisfactory” rating on October 26, 1970. After this final evaluation, Long submitted a letter of rebuttal to the poor rating. Following a meeting with his immediate and plant supervisors, Long resigned on November 30, 1970, after being offered the choice of discharge or resignation. On November 17, 1971, Long filed a complaint in Federal District Court, alleging violations of Title VII of the 1964 Civil Rights Act, 42 U. S.C. § 2000e et seq., and of the Civil Rights Act of 1866, 42 U.S.C. § 1981. On May 1, 1972, the District Court dismissed his claim under Title VII for failure to comply with th'e requirement of a timely filing with the Federal Equal Employment Opportunity Commission. The District Court proceeded to a hearing on the merits of the § 1981 claim.
Testimony was taken from Long, his supervisors, and his fellow workers. Long’s primary argument was that he had been treated in a dissimilar manner from other persons, that he had received outright antagonism from his plant supervisor, and that the actions which prevented him from rising to a position in labor relations were prompted by racial prejudice.
The District Court found for Long. While it made various findings and observations, the District Court’s central holding was that Ford violated Section 1981 by failing to train Long adequately for his tasks. The District Court characterized Long as a “capable man,” who because he “was not adequately trained . . . could not perform adequately.” The Court concluded:
“If [black] people are not given adequate job training and are, as a result, terminated, then unequal employment opportunity still results. This imbalance is a real factor in racial discrimination. Racial discrimination in employment will not end until such people are given thorough job training so that they can perform adequately. Inadequate job training in a situation such as this fosters racial discrimination. Thus, this court is convinced that race was a factor (possibly not the only factor) in the termination of Claude Long.”
Ford makes two basic arguments on appeal. First, it contends that Appellee’s complaint should have been dismissed because he failed to pursue his remedies under Title VII of the 1964 Civil Rights Act. Second, Ford contends that reversal on the merits is necessary because the record and findings of the District Court do not sustain a judgment for Long under the principles of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).
Ford does not contend that Section 1981 does not apply to private employment contracts. It is settled that Section 1981 prohibits racial discrimination in private employment.
Ford argues, however, that Long’s complaint should have been dismissed because he failed to file a charge with the Equal Employment Opportunity Commission within 210 days of his discharge. This was a jurisdictional prerequisite for bringing a Title VII suit under 42 U.S.C. § 2000e-5(d) (1970), and, so it is argued, impliedly a jurisdictional prerequisite to a § 1981 action.
Ford’s procedural objection is not without support in the case law. In Waters v. Wisconsin Steel Works of Int’l Harvesters Co., 427 F.2d 476 (7th Cir.), cert. denied, 400 U.S. 911, 91 S.Ct. 137, 27 L.Ed.2d 151 (1970), the Seventh Circuit held that a plaintiff in a § 1981 action must show a reasonable excuse for having bypassed his Title VII remedies. See also Kinsey v. Legg, Mason & Co., Inc., 60 F.R.D. 91 (D.D.C.1973).
This viewpoint is a minority position. The Third, Fifth, Eighth, and District of Columbia Circuits have concluded that Section 1981’s availability is not limited to those plaintiffs who have pursued their Title VII remedies or have shown a reasonable excuse for not doing so. Young v. Int’l Telephone & Telegraph Co., 438 F.2d 757 (3d Cir. 1971); Caldwell v. National Brewing Co., 5 Cir., 443 F.2d 1044 (1971); Brady v. Bristol-Meyers Co., 459 F.2d 621 (8th Cir. 1972); Macklin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69, 478 F.2d 979 (1973). Furthermore, this Court has held in another context that “ § 1981 [is] a separate and concurrent cause of action with Title VII.” Head v. Timken Roller Bearing Co., 486 F.2d 870 (6th Cir. 1973). We adopt the prevailing view that a plaintiff need not pursue his Title VII remedies before instituting a cause of action under Section 1981.
We are impelled to this conclusion by rules of statutory construction. If Congress had expressly limited Section 1981’s availability in the manner Ford urges upon us, we would, be bound by the partial repeal of the earlier statute. Here, however, the question is whether we may imply á change in Section 1981 from the silent face of Title VII of the 1964 Civil Rights Act. This task is complicated by the fact that in 1964 Congress may not have recognized that Section 1981 was available to litigants against racial discrimination in private employment.
In Posadas v. National City Bank, 296 U.S. 497, 503, 56 S.Ct. 349, 80 L.Ed. 351 (1936), the Supreme Court stated that a repeal of a statute by implication is not favored. There are two categories where repeal by implication is possible.
(1) [W]here provisions in the two acts are in irreconcilable conflict, the later act to the extent of the conflict constitutes an implied repeal of the earlier one; and (2) if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate similarly as a repeal of the earlier act. 296 U.S. at 503.
Title VII is not “in irreconcilable conflict” with Section 1981, and it does not cover the field in which Section 1981 was sown. See Sullivan v. Little Hunting Park, 396 U.S. 229, 237, 90 S.Ct. 400, 24 L.Ed.2d 386 (1969) (regarding the compatibility of § 1982 and the provisions of the Fair Housing Act of 1968). Thus, the availability of Section 1981 is not limited by the existence of remedies under Title VII. “ [Legislative enactments in [the area of racial discrimination in employment] have long evinced a general intent to accord parallel or overlapping remedies against discrimination.” Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S.Ct. 1011, 39 L.Ed.2d 147 (1974) (citingto § 1981). Thus the District Court correctly proceeded to the merits of Appellee’s claim.
We cannot affirm the District Court’s decision on the merits, however, because it rests upon an erroneous view of Section 1981. That provision, first enacted as part of the Civil Rights Act of 1966,states:
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
When a person sues under this statute to enforce his right not to be discriminated against in private employment, he must show that he was unable to make or enforce a contract that white citizens were able to make or enforce. Applied to the facts of this case, Appellee Long must show that he was forced to resign because of dissimilar treatment caused in part by his race.
As originally designed in 1866, Section 1981 was intended to uproot the institution of slavery and to eradicate its badges and incidents. See Jones v. Alfred H. Mayer Co., 392 U.S. 409, 422-437, 88 S.Ct. 2186, 20 L.Ed.2d 1189, (1968) (analysis applied to § 1981 in Tillman v. Wheaton-Haven Recreation Assn., 410 U.S. 431, 439, 93 S.Ct. 1090, 35 L.Ed.2d 403 (1973).) When an employer, public or private, places more stringent requirements on employees because of their race, Section 1981 is violated. The purpose for which the Section was enacted — to afford equal opportunities to secure the benefits of American life regardless of race — requires1 that a court adopt a broad outlook in enforcing Section 1981. Schemes of discrimination, whether blatant or subtle, are forbidden. Newbern v. Lake Lorelei, Inc., 308 F.Supp. 407, 416 (S.D.Ohio 1968). Cf. Lane v. Wilson, 307 U.S. 268, 275, 59 S.Ct. 872, 83 L.Ed. 1281 (1939).
Section 1981 is by its very terms, however, not an affirmative action program. It is an equalizing provision, seeking to ensure that rights do not vary according to race. It does not require that persons be accorded preferential treatment because of their race. On this point we view the Supreme Court’s discussion of Title VII as applicable to Section 1981:
“Congress did not intend by Title VII, however, to guarantee a job to every person regardless of qualifications. In short, the Act does not command that any person be hired simply because he was formerly the subject of discrimination, or because he is a member of a minority group. Discriminatory preference for any group, minority or majority, is precisely and only what Congress has proscribed. What is required by Congress is the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification.” Griggs v. Duke Power Co., 401 U.S. 424, 430-431, 91 S.Ct. 849, 853, 28 L.Ed.2d 158 (1971).
Thus, it was error for the District Court to hold Appellant liable for a failure to train Appellee adequately, absent a showing that this failure constituted either dissimilar treatment from the training whites receive or treatment similar on its face but dissimilar in its effects upon racial minorities and unfounded on business necessity. See Griggs v. Duke Power Co., supra; McDonnell Douglas Corp. v. Green, 411 U. S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973); Robinson v. Lorillard, 444 F.2d 791 (4th Cir. 1971).
Although the District Court made various observations and findings of fact, we cannot perceive an alternative holding sufficient in detail under Rule 52(a), Fed.Rules Civ.Proc., to permit review. Rather than specify that Appellee had received dissimilar treatment, the District Court relied on a rationale of inadequate training per se. Thus, we must remand for further proceedings to determine whether Appellee should recover on a proper ground.
The parties and the District Court did not have the benefit of McDonnell Douglas’ reasoning in the proceedings below. On remand, the District Court should apply McDonnell Douglas’ principles on the order and allocation of proof. A person alleging a § 1981 violation must first establish that his employment terms vary from those which his employer accords to similarly situated white workers. This can be shown by proof either that intentional racial prejudice entered into his treatment or that a facially neutral practice (here Appellant’s performance evaluation system) operates diseriminatorily against minority employees. In this case, Appellee may be able to establish that he was trained inadequately whereas white co-employees were trained adequately. He may be able to establish that Ford’s promotion system, which relies heavily upon the subjective evaluation of supervisors, has a discriminatory impact on minority employees, so that its use in discharging him was improper. Appellee may be able to establish that similarly situated white employees with comparable records would have been offered different positions within Ford rather than discharged, whereas he was forced to leave Ford altogether. We express no opinion as to whether the record below would support any of these possible holdings.
If Appellee establishes a prima facie case of dissimilar treatment due in part to racial discrimination, Appellant must then establish “some legitimate, nondiscriminatory reason for the employee’s rejection.” McDonnell Douglas Corp. v. Green, 411 U.S. at 802. In this case Appellant would argue that Appellee’s unsatisfactory performance review justified his termination and that its system of evaluation is grounded on business necessity.
If Appellee has established a prima facie case but Appellant’s rebuttal is sufficient to overcome Appellee’s initial showing, Appellee must then prove that his discharge was nonetheless a violation of Section 1981 because Appellant’s stated reason for the discharge was merely a pretext for a termination actually based on racial prejudice. 411 U.S. at 804. If the proofs reach this point, the District Court will have the task of evaluating the objectivity, sincerity, and honesty of the witnesses to arrive at a necessarily subjective conclusion.
Because of the new light shed on employment discrimination cases by McDonnell Douglas, we remand this case for such further proceedings as the District Court deems necessary to arrive at a just and proper conclusion. Affirmed in part and reversed in part for further proceedings in conformance with the principles enunciated herein.
. The District Court’s opinion is reported at 352 F.Supp. 135 (E.D.Mich.1972). Long’s lack of training was cited as the “fact that is controlling in this situation.” 352 F.Supp. at 139.
. Id.
. Id. at 140.
. Although the Supreme Court has not yet squarely held that this is the case, in Tillman v. Wheaton-Haven Recreation Assn., Inc., 410 U.S. 431, 439-440, 93 S.Ct. 1090, 35 L.Ed.2d 403 (1973), the Supreme Court held that § 1981 is applicable to private discriminatory acts. An employment contract is covered by § 1981, and Title YII of the 1964 Civil Rights Act has not preempted the field of employment discrimination. Johnson v. City of Cincinnati, 450 F.2d 796 (6th Cir. 1971).
Furthermore, although this Circuit has not explicitly held that § 1981 prohibits racial discrimination in private employment, this conclusion is implicit in at least two holdings. Head v. Timken Roller Bearing Co., 486 F.2d 870 (6th Cir. 1973); Marlowe v. Fisher Body, 489 F.2d 1057 (6th Cir. 1973). This conclusion is unanimous among the circuits that have decided the question. Young v. Int’l Telephone & Telegraph Co., 438 F.2d 757 (3d Cir. 1971); Brown v. Gaston County Dyeing Machine Co., 457 F.2d 1377 (4th Cir. 1972); Sanders v. Dobbs Houses, Inc., 431 F.2d 1097 (5th Cir. 1970), cert. denied, 401 F.2d 948, 91 S.Ct. 935, 28 L.Ed. 2d 231 (1971); Waters v. Wisconsin Steel Works of Int’l Harvesters Co., 427 F.2d 476 (7th Cir.), cert. denied, 400 U.S. 911, 91 S. Ct. 137, 27 L.Ed.2d 151 (1970); Brady v. Bristol-Meyers, Inc., 459 F.2d 621 (8th Cir. 1972); Macklin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69, 478 F.2d 979 (1973) .
. This requirement has been changed by recent amendments to Title VII. Pub.L. 92-261, § 4(a). See 42 U.S.C.A. § 2000e-5 (1974) .
. The 1968 decision of Jones v. Alfred H. Mayer Co., 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968), is credited with having resuscitated the Civil Rights Act of 1866, of which § 1981 was a part, as to private defendants.
. Amendments to make Title VII the exclusive remedy for employment discrimination have been defeated. 110 Cong. Record 13650-52 (1964); 118 Cong. Record, 1524-26 (daily ed. Feb. 9, 1972); 1791-97 (daily ed., Feb. 15, 1972).
Title VII and 1981 afford different tactical advantages and handicaps to aggrieved parties. The existence of § 1981 as a procedurally separate source of relief will not likely deter the use of Title VII’s conciliation procedures. See Note, “Racial Discrim¡nation in Employment under the Civil Rights Act of 1866,” 36 U.Chi.L.Rev. 615, 639-41 (1969); Comment, “Is Section 1981 Modified by Title VII of the Civil Rights Act of 1964?,” 1970 Duke L.J. 1223, 1235 (1970) ; Peck, “Remedies for Racial Discrimination in Employment: A Comparative Evaluation of Forums,” 46 Wash.L.Rev. 455, 476-79 (1971) ; Larson, “The Development of Section 1981 as a Remedy for Racial Discrimination in Private Employment,” 7 Harv.Civ.Rights — Civ.Lib.L.Rev. 56, 69-84 (1972).
. The provision was re-enacted with some changes in 1870 and codified in 1874. See Jones v. Alfred H. Mayer Co., 392 U.S. 409, 422, n. 28, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968).
. There are obligations to take affirmative action in hiring and training minority citizens as a precondition to being awarded government contracts. See Exec.Order No. 11,246, 3 C.F.R. 418 (1972). Section 1981 does not impose such an obligation on employers. Castro v. Beecher, 334 F.Supp. 930, 938 (D.Mass.1971), aff’d in part and rev’d in part, 459 F.2d 725 (1st Cir. 1972).
. Title VII of the 1964 Civil Rights Act, as amended 42 U.S.C.A. § 2000e et seq. (1972), is not before us. Except for the language quoted, we express no opinion as to the similarities between § 1981 and Title VII.
. Although McDonnell Douglas was a Title VII case, the principles governing these procedural matters apply with equal force to a § 1981 action. Cf. United States v. Chesterfield County School District, 484 F.2d 70 (4th Cir. 1973).
. Cf. E.E.O.C. No. 72-0777 (1971).
. See Rowe v. General Motors Corp., 457 F.2d 348 (5th Cir. 1972); United States v. N. L. Industries, Inc., 479 F.2d 354 (8th Cir. 1973); Brown v. Gaston County Dyeing Machine Co., 457 F.2d 1377 (4th Cir. 1972); Young v. Edgcomb Steel Co., 363 F.Supp. 961 (M.D.N.C.1973); United States v. Local 189, 301 F.Supp. 906 (E.D.La.1969), aff’d, 416 F.2d 980 (5th Cir. 1969), cert. denied, 397 U.S. 919, 90 S.Ct. 926, 25 L.Ed.2d 100 (1970); Baxter v. Savannah Sugar Refining Corp., 350 F.Supp. 139 (S.D.Ga.1972).
. See Griggs v. Duke Power Co., 401 U.S. 424, 431, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-803, 93 S.Ct. 1817, 36 L. Ed .2d 668 (1973); Robinson v. Lorillard, 444 F.2d 791, 798 (4th Cir. 1971); United States v. Bethlehem Steel Corp., 446 F.2d 652 (2d Cir. 1971); United States v. Jacksonville Terminal Co., 451 F.2d 418 (5th Cir. 1971); United States v. St. Louis-San Francisco Ry., 464 F.2d 301 (8th Cir. 1972); Brito v. Zia Co., 478 F.2d 1200 (10th Cir. 1973); Moody v. Albermarle Paper Co., 474 F.2d 134 (4th Cir. 1973); McAdory v. Scientific Research Instruments, Inc., 355 F.Supp. 468 (D.Md.1973); Note, “Fair Employment Practices: The Concept of Business Necessity,” 3 Memph.St.U.L.Rev. 76 (1972).
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
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sc_issue_1
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01
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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue of the Court's decision. Determine the issue of the case on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis.
LEGO v. TWOMEY, WARDEN
No. 70-5037.
Argued November 11, 1971
Decided January 12, 1972
Nathan Lewin, by appointment of the Court, 402 U. S. 928, argued the cause and filed a brief for petitioner.
James B. Zagel, Assistant Attorney General of Illinois, argued the cause for respondent. With him on the brief were William J. Scott, Attorney General, Joel M. Flaum, First Assistant Attorney General, and Warren K. Smoot, Assistant Attorney General.
Mr. Justice White
delivered the opinion of the Court.
In 1964 this Court held that a criminal defendant who challenges the voluntariness of a confession made to officials and sought to be used against him at his trial has a due process right to a reliable determination that the confession was in fact voluntarily given and not the outcome of coercion which the Constitution forbids. Jackson v. Denno, 378 U. S. 368. While our decision made plain that only voluntary confessions may be admitted at the trial of guilt or innocence, we did not then announce, or even suggest, that the factfinder at a coercion hearing need judge voluntariness with reference to an especially severe standard of proof. Nevertheless, since Jackson, state and federal courts have addressed themselves to the issue with a considerable variety of opinions. We granted certiorari in this case to resolve the question. 401 U. S. 992 (1971).
Petitioner Lego was convicted of armed robbery in 1961 after a jury trial in Superior Court, Cook County, Illinois. The court sentenced him to prison for 25 to 50 years. The evidence introduced against Lego at trial included a confession he had made to police after arrest and while in custody at the station house. Prior to trial Lego sought to have the confession suppressed. He did not deny making it but did challenge that he had done so voluntarily. The trial judge conducted a hearing, out of the presence of the jury, at which Lego testified that police had beaten him about the head and neck with a gun butt. His explanation of this treatment was that the local police chief, a neighbor and former classmate of the robbery victim, had sought revenge upon him. Lego introduced into evidence a photograph that had been taken of him at the county jail on the day after his arrest. The photograph showed that petitioner’s face had been swollen and had traces of blood on it. Lego admitted that his face had been scratched in a scuffle with the robbery victim but maintained that the encounter did not explain the condition shown in the photograph. The police chief and four officers also testified. They denied either beating or threatening petitioner and disclaimed knowledge that any other officer had done so. The trial judge resolved this credibility problem in favor of the police and ruled the confession admissible. At trial, Lego testified in his own behalf. Although he did not dispute the truth of the confession directly, he did tell his version of the events that had transpired at the police station. The trial judge instructed the jury as to the prosecution’s burden of proving guilt. He did not instruct that the jury was required to find the confession voluntary before it could be used in judging guilt or innocence. On direct appeal the Illinois Supreme Court affirmed the conviction. People v. Lego, 32 Ill. 2d 76, 203 N. E. 2d 875 (1965).
Four years later petitioner challenged his conviction by seeking a writ of habeas corpus in the United States District Court for the Northern District of Illinois. He maintained that the trial judge should have found the confession voluntary beyond a reasonable doubt before admitting it into evidence. Although the judge had made no mention of the standard he used, Illinois law provided that a confession challenged as involuntary could be admitted into evidence if, at a hearing outside the presence of the jury, the judge found it voluntary by a preponderance of the evidence. In the alternative petitioner argued that the voluntariness question should also have been submitted to the jury for its separate consideration. After first denying the writ for failure to exhaust state remedies, the District Court granted a rehearing motion, concluded that Lego had no state remedy then available to him and denied relief on the merits. United States ex rel. Lego v. Pate, 308 F. Supp. 38 (1970). The Court of Appeals for the Seventh Circuit affirmed.
I
Petitioner challenges the judgment of the Court of Appeals on three grounds. The first is that he was not proved guilty beyond a reasonable doubt as required by In re Winship, 397 U. S. 358 (1970), because the confession used against him at his trial had been proved voluntary only by a preponderance of the evidence. Implicit in the claim is an assumption that a voluntariness hearing is designed to enhance the reliability of jury verdicts. To judge whether that is so we must return to Jackson v. Denno, 378 U. S. 368 (1964).
In New York prior to Jackson, juries most often determined the voluntariness of confessions and hence whether confessions could be used in deciding guilt or innocence. Trial judges were required to make an initial determination and could exclude a confession, but only if it could not under any circumstances be deemed voluntary. When voluntariness was fairly debatable, either because a dispute of fact existed or because reasonable men could have drawn differing inferences from undisputed facts, the question whether the confession violated due process was for the jury. This meant the confession was introduced at the trial itself. If evidence challenging its voluntariness were adduced, the jury was instructed first to pass upon voluntariness and, if it found the confession involuntary, ignore it in determining guilt. If, on the other hand, the confession were found to be voluntary, the jury was then free to consider its truth or falsity and give the confession an appropriate weight in judging guilt or innocence.
We concluded that the New York procedure was constitutionally defective because at no point along the way did a criminal defendant receive a clear-cut determination that the confession used against him was in fact voluntary. The trial judge was not entitled to exclude a confession merely because he himself would have found it involuntary, and, while we recpgnized that the jury was empowered to perform that function, we doubted it could do so reliably. Precisely because confessions of guilt, whether coerced or freely given, may be truthful and potent evidence, we did not believe a jury could be called upon to ignore the probative value of a truthful but coerced confession; it was also likely, we thought, that in judging voluntariness itself the jury would be influenced by the reliability of a confession it considered an accurate account of the facts. “It is now axiomatic,” we said,
“that a defendant in a criminal case is deprived of due process of law if his conviction is founded, in whole or in part, upon an involuntary confession, without regard for the truth or falsity of the confession, Rogers v. Richmond, 365 U. S. 534, and even though there is ample evidence aside from the confession to support the conviction. Malinski v. New York, 324 U. S. 401; Stroble v. California, 343 U. S. 181; Payne v. Arkansas, 356 U. S. 560. Equally clear is the defendant’s constitutional right at some stage in the proceedings to object to the use of the confession and to have a fair hearing and a reliable determination on the issue of voluntariness, a determination uninfluenced by the truth or falsity of the confession. Rogers v. Richmond, supra.”
We did not think it necessary, or even appropriate, in Jackson to announce that prosecutors would be required to meet a particular burden of proof in a Jackson hearing held before the trial judge. Indeed, the then-established duty to determine voluntariness had not been framed in terms of a burden of proof, nor has it been since Jackson was decided. We could fairly assume then, as we can now, that a judge would admit into evidence only those confessions that he reliably found, at least by a preponderance of the evidence, had been made voluntarily.
We noted in Jackson that there may be a relationship between the involuntariness of a confession and its unreliability. But our decision was not based in the slightest on the fear that juries might misjudge the accuracy of confessions and arrive at erroneous determinations of guilt or innocence. That case was not aimed at reducing the possibility of convicting innocent men.
Quite the contrary, we feared that the reliability and truthfulness of even coerced confessions could impermis-sibly influence a jury’s judgment as to voluntariness. The use of coerced confessions, whether true or false, is forbidden because the method used to extract them offends constitutional principles. Rogers v. Richmond, 365 U. S. 534, 540-541 (1961). The procedure we established in Jackson was designed to safeguard the right of an individual, entirely apart from his guilt or innocence, not to be compelled to condemn himself by his own utterances. Nothing in Jackson questioned the province or capacity of juries to assess the truthfulness of confessions. Nothing in that opinion took from the jury any evidence relating to the accuracy or weight of confessions admitted into evidence. A defendant has been as free since Jackson as he was before to familiarize a jury with circumstances that attend the taking of his confession, including facts bearing upon its weight and voluntariness. In like measure, of course, juries have been at liberty to disregard confessions that are insufficiently corroborated or otherwise deemed unworthy of belief.
Since the purpose that a voluntariness hearing is designed to serve has nothing whatever to do with improving the reliability of jury verdicts, we cannot accept the charge that judging the admissibility of a confession by a preponderance of the evidence undermines the mandate of In re Winship, 397 U. S. 358 (1970). Our decision in Winship was not concerned with standards for determining the admissibility of evidence or with the prosecution’s burden of proof at a suppression hearing when evidence is challenged on constitutional grounds. Win-ship went no further than to confirm the fundamental right that protects “the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged.” Id., at 364. A high standard of proof is necessary, we said, to ensure against unjust convictions by giving substance to the presumption of innocence. Id., at 363. A guilty verdict is not rendered less reliable or less consonant with Winship simply because the admissibility of a confession is determined by a less stringent standard. Petitioner does not maintain that either his confession or its voluntariness is an element of the crime with which he was charged. He does not challenge the constitutionality of the standard by which the jury was instructed to decide his guilt or innocence; nor does he question the sufficiency of the evidence that reached the jury to satisfy the proper standard of proof. Petitioner’s rights under Winship have not been violated.
II
Even conceding that Winship is inapplicable because the purpose of a voluntariness hearing is not to implement the presumption of innocence, petitioner presses for reversal on the alternative ground that evidence offered against a defendant at a criminal trial and challenged on constitutional grounds must be determined admissible beyond a reasonable doubt in order to give adequate protection to those values that exclusionary rules are designed to serve. Jackson v. Denno, supra, an offspring of Brown v. Mississippi, 297 U. S. 278 (1936), requires judicial rulings on voluntariness prior to admitting confessions. Miranda v. Arizona, 384 U. S. 436 (1966), excludes confessions flowing from custodial interrogations unless adequate warnings were administered and a waiver was obtained. Weeks v. United States, 232 U. S. 383 (1914), and Mapp v. Ohio, 367 U. S. 643 (1961), make impermissible the introduction of evidence obtained in violation of a defendant’s Fourth Amendment rights. In each instance, and without regard to its probative value, evidence is kept from the trier of guilt or innocence for reasons wholly apart from enhancing the reliability of verdicts. These independent values, it is urged, themselves require a stricter standard of proof in judging admissibility.
The argument is straightforward and has appeal. But we are unconvinced that merely emphasizing the importance of the values served by exclusionary rules is itself sufficient demonstration that the Constitution also requires admissibility to be proved beyond reasonable doubt. Evidence obtained in violation of the Fourth Amendment has been excluded from federal criminal trials for many years. Weeks v. United States, supra. The same is true of coerced confessions offered in either federal or state trials. Bram v. United States, 168 U. S. 532 (1897); Brown v. Mississippi, supra. But, from our experience over this period of time no substantial evidence has accumulated that federal rights have suffered from determining admissibility by a preponderance of the evidence.. Petitioner offers nothing to suggest that admissibility rulings have been unreliable or otherwise wanting in quality because not based on some higher standard. Without good cause, we are unwilling to expand currently applicable exclusionary rules by erecting additional barriers to placing truthful and probative evidence before state juries and by revising the standards applicable in collateral proceedings. Sound reason for moving further in this direction has not been offered here nor do we discern any at the present time. This is particularly true since the exclusionary rules are very much aimed at deterring lawless conduct by police and prosecution and it is very doubtful that escalating the prosecution’s burden of proof in Fourth and Fifth Amendment suppression hearings would be sufficiently productive in this respect to outweigh the public interest in placing probative evidence before juries for the purpose of arriving at truthful decisions about guilt or innocence.
To reiterate what we said in Jackson: when a confession challenged as involuntary is sought to be used against a criminal defendant at his trial, he is entitled to a reliable and clear-cut determination that the confession was in fact voluntarily rendered. Thus, the prosecution must prove at least by a preponderance of the evidence that the confession was voluntary. Of course, the States are free, pursuant to their own law, to adopt a higher standard. They may indeed differ as to the appropriate resolution of the values they find at stake.
III
We also reject petitioner’s final contention that, even though the trial judge ruled on his coercion claim, he was entitled to have the jury decide the claim anew. To the extent this argument asserts that the judge’s determination was insufficiently reliable, it is no more persuasive than petitioner’s other contentions. To the extent the position assumes that a jury is better suited than a judge to determine voluntariness, it questions the basic assumptions of Jackson v. Denno; it also ignores that Jackson neither raised any question about the constitutional validity of the so-called orthodox rule for judging the admissibility of confessions nor even suggested that the Constitution requires submission of voluntariness claims to a jury as well as a judge. Finally, Duncan v. Louisiana, 391 U. S. 145 (1968), which made the Sixth Amendment right to trial by jury applicable to the States, did not purport to change the normal rule that the admissibility of evidence is a question for the court rather than the jury. Nor did that decision require that both judge and jury pass upon the admissibility of evidence when constitutional grounds are asserted for excluding it. We are not disposed to impose as a constitutional requirement a procedure we have found wanting merely to afford petitioner a second forum for litigating his claim.
The decision of the Court of Appeals is
Affirmed.
MR. Justice Powell and Mr. Justice Rehnquist took no part in the consideration or decision of this case.
State courts that have considered the question since Jackson have adopted a variety of standards, most of them founded upon state law. Many have sanctioned a standard of proof less strict than beyond a reasonable doubt, including proof of voluntariness by a preponderance of the evidence or to the satisfaction of the court or proof of voluntariness in fact. E. g., Duncan v. State, 278 Ala. 145, 176 So. 2d 840 (1965); State v. Dillon, 93 Idaho 698, 471 P. 2d 553 (1970), cert. denied, 401 U. S. 942 (1971); People v. Harper, 36 Ill. 2d 398, 223 N. E. 2d 841 (1967); State v. Milow, 199 Kan. 576, 433 P. 2d 538 (1967); Barnhart v. State, 5 Md. App. 222, 246 A. 2d 280 (1968); Commonwealth v. White, 353 Mass. 409, 232 N. E. 2d 335 (1967); State v. Nolan, 423 S.W.2d 815 (Mo. 1968); State v. White, 146 Mont. 226, 405 P. 2d 761 (1965), cert. denied, 384 U. S. 1023 (1966); State v. Brewton, 238 Or. 590, 395 P. 2d 874 (1964); Commonwealth ex rel. Butler v. Rundle, 429 Pa. 141, 239 A. 2d 426 (1968); Monts v. State, 218 Tenn. 31, 400 S.W.2d 722 (1966); State v. Davis, 73 Wash. 2d 271, 438 P. 2d 185 (1968).
Other States, using state law or not specifying a basis, require proof beyond a reasonable doubt. E. g., State v. Ragsdale, 249 La. 420, 187 So. 2d 427 (1966), cert. denied, 385 U. S. 1029 (1967); State v. Keiser, 274 Minn. 265, 143 N. W. 2d 75 (1966); State v. Yough, 49 N. J. 587, 231 A. 2d 598 (1967); People v. Huntley, 15 N. Y. 2d 72, 204 N. E. 2d 179 (1965); State v. Thundershield, 83 S. D. 414, 160 N. W. 2d 408 (1968); State ex rel. Goodchild v. Burke, 27 Wis. 2d 244, 133 N. W. 2d 753 (1965), cert. denied, 384 U. S. 1017 (1966).
Two federal courts have held as an exercise of supervisory power that voluntariness must be proved beyond a reasonable doubt. Ralph v. Warden, 438 F. 2d 786, 793 (CA4 1970), clarifying United States v. Inman, 352 F. 2d 954 (CA4 1965); Pea v. United States, 130 U. S. App. D. C. 66, 397 F. 2d 627 (1967); cf. United States v. Schipani, 289 F. Supp. 43 (EDNY 1968), aff’d, 414 F. 2d 1262 (CA2 1969), cert. denied, 397 U. S. 922 (1970), requiring the Government to prove beyond a reasonable doubt that certain evidence was not tainted by violation of the Fourth Amendment.
In ruling the confession admissible, the judge stated:
“The petitioner has admitted under oath he had a struggle with the complaining witness over the gun; he was wounded, obtained a facial wound. The Officers testified he was bloody at the time he was arrested.
“I don’t believe the defendant’s testimony at all that he was beaten up by the Police. The condition he is in is well explained by the defendant himself.”
Illinois followed what we described in Jackson v. Denno, 378 U. S. 368 (1964), as “the orthodox rule, under which the judge himself solely and finally determines the voluntariness of the confession . . . .” Id., at 378. While the procedures of all the States could not be neatly classified, we noted that some followed the Massachusetts procedure whereby the judge himself first resolves evidentiary conflicts and determines whether a confession is in fact voluntary. If he is unable so to conclude, the confession may not be admitted into evidence. If judged voluntary and therefore admissible, the jury must also determine the coercion issue and is instructed to ignore a confession it finds involuntary. Id., at 378 n. 8. Other States had adopted the New York procedure at issue in Jackson. Our decision in Jackson cast no doubt upon the orthodox and Massachusetts procedures but did call into question the practice of every State that did not clearly follow one of these procedures. A thorough tabulation of what States did in the wake of Jackson appears in 3 J. Wigmore, Evidence 585-593 (J. Chadbourn rev. 1970).
People v. Wagoner, 8 Ill. 2d 188, 133 N. E. 2d 24 (1956); People v. Thomlison, 400 Ill. 555, 81 N. E. 2d 434 (1948).
Respondent makes no contention here that petitioner either waived the right to adjudicate his federal claims or deliberately bypassed state procedures for testing those claims. Cf. Fay v. Noia, 372 U. S. 391, 439 (1963).
The Seventh Circuit’s affirmance is unreported. United States ex rel. Lego v. Pate, No. 18313 (CA7 Oct. 8, 1970).
A more thorough description of the New York procedure is found in Jackson v. Denno, 378 U. S., at 377-391.
Jackson v. Denno, 378 U. S., at 376-377.
“Judge” is used here and throughout the opinion to mean a factfinder, whether trial judge or jury, at a voluntariness hearing. The proscription against permitting the jury that passes upon guilt or innocence to judge voluntariness in the same proceeding does not preclude the States from impaneling a separate jury to determine voluntariness. Jackson v. Denno, 378 U. S., at 391 n. 19.
See, e. g., Haynes v. Washington, 373 U. S. 503 (1963); Spano v. New York, 360 U. S. 315 (1959); Payne v. Arkansas, 356 U. S. 560 (1958).
See, e. g., Frazier v. Cupp, 394 U. S. 731 (1969); Boulden v. Holman, 394 U. S. 478 (1969); Harrison v. United States, 392 U. S. 219 (1968); Greenwald v. Wisconsin, 390 U. S. 519 (1968); Clewis v. Texas, 386 U. S. 707 (1967); Davis v. North Carolina, 384 U. S. 737 (1966); cf. Procunier v. Atchley, 400 U. S. 446 (1971).
We noted that coerced confessions are forbidden in part because of their “probable unreliability.” Jackson v. Denno, 378 U. S., at 385-386. However, it had been settled when this Court decided Jackson that the exclusion of unreliable confessions is not the purpose that a voluntariness hearing is designed to serve. Rogers v. Richmond, 365 U. S. 534 (1961). The sole issue in such a hearing is whether a confession was coerced. Whether it be true or false is irrelevant; indeed, such an inquiry is forbidden. The judge may not take into consideration evidence that would indicate that the confession, though compelled, is reliable, even highly so. Id., at 545. As difficult as such tasks may be to accomplish, the judge is also duty-bound to ignore implications of reliability in facts relevant to coercion and to shut from his mind any internal evidence of authenticity that a confession itself may bear.
In Jackson, 378 U. S., at 377-391, we traced the genesis of the view that due process forbids the use of coerced confessions, whether or not reliable. The Court had departed from that view in Stein v. New York, 346 U. S. 156 (1953), whose premise was that a confession is excludable because of its inherent untrustworthiness. The Stein premise was repudiated in Rogers v. Richmond and Rogers was reaffirmed in Davis v. North Carolina, 384 U. S., at 739, and Johnson v. New Jersey, 384 U. S. 719, 729 n. 9 (1966). That case continues to serve as the basis for evaluating coercion claims. See cases cited in n. 11, supra.
This is the course that petitioner pursued. Cf. Jackson v. Denno, 378 U. S., at 386 n. 13. Although 18 U. S. C. §3501 (a) is inapplicable here, it is relevant to note the provisions of that section:
“(a) In any criminal prosecution brought by the United States or by the District of Columbia, a confession, as defined in subsection (e) hereof, shall be admissible in evidence if it is voluntarily given. Before such confession is received in evidence, the trial judge shall, out of the presence of the jury, determine any issue as to voluntariness. If the trial judge determines that the confession was voluntarily made it shall be admitted in evidence and the trial judge shall permit the jury to hear relevant evidence on the issue of voluntariness and shall instruct the jury to give such weight to the confession as the jury feels it deserves under all the circumstances.”
Nothing is to be gained from restating the constitutional rule as requiring proof of guilt beyond a reasonable doubt on the basis of constitutionally obtained evidence and then arguing that rights under Winship are diluted unless admissibility is governed by a high standard. Transparently, this assumes the question at issue, which is whether a confession is admissible if found voluntary by a preponderance of the evidence. United States v. Schipani, supra, n. 1, followed this unsatisfactory course in a Fourth Amendment case but stopped short of basing the decision on the Constitution.
It is no more persuasive to impose the stricter standard of proof as an exercise of supervisory power than as a constitutional rule. Cf. Ralph v. Warden, supra, n. 1, clarifying United States v. Inman, supra, n. 1; Pea v. United States, supra, n. 1.
See cases cited in n. 1, supra.
Question: What is the issue of the decision?
01. involuntary confession
02. habeas corpus
03. plea bargaining: the constitutionality of and/or the circumstances of its exercise
04. retroactivity (of newly announced or newly enacted constitutional or statutory rights)
05. search and seizure (other than as pertains to vehicles or Crime Control Act)
06. search and seizure, vehicles
07. search and seizure, Crime Control Act
08. contempt of court or congress
09. self-incrimination (other than as pertains to Miranda or immunity from prosecution)
10. Miranda warnings
11. self-incrimination, immunity from prosecution
12. right to counsel (cf. indigents appointment of counsel or inadequate representation)
13. cruel and unusual punishment, death penalty (cf. extra legal jury influence, death penalty)
14. cruel and unusual punishment, non-death penalty (cf. liability, civil rights acts)
15. line-up
16. discovery and inspection (in the context of criminal litigation only, otherwise Freedom of Information Act and related federal or state statutes or regulations)
17. double jeopardy
18. ex post facto (state)
19. extra-legal jury influences: miscellaneous
20. extra-legal jury influences: prejudicial statements or evidence
21. extra-legal jury influences: contact with jurors outside courtroom
22. extra-legal jury influences: jury instructions (not necessarily in criminal cases)
23. extra-legal jury influences: voir dire (not necessarily a criminal case)
24. extra-legal jury influences: prison garb or appearance
25. extra-legal jury influences: jurors and death penalty (cf. cruel and unusual punishment)
26. extra-legal jury influences: pretrial publicity
27. confrontation (right to confront accuser, call and cross-examine witnesses)
28. subconstitutional fair procedure: confession of error
29. subconstitutional fair procedure: conspiracy (cf. Federal Rules of Criminal Procedure: conspiracy)
30. subconstitutional fair procedure: entrapment
31. subconstitutional fair procedure: exhaustion of remedies
32. subconstitutional fair procedure: fugitive from justice
33. subconstitutional fair procedure: presentation, admissibility, or sufficiency of evidence (not necessarily a criminal case)
34. subconstitutional fair procedure: stay of execution
35. subconstitutional fair procedure: timeliness
36. subconstitutional fair procedure: miscellaneous
37. Federal Rules of Criminal Procedure
38. statutory construction of criminal laws: assault
39. statutory construction of criminal laws: bank robbery
40. statutory construction of criminal laws: conspiracy (cf. subconstitutional fair procedure: conspiracy)
41. statutory construction of criminal laws: escape from custody
42. statutory construction of criminal laws: false statements (cf. statutory construction of criminal laws: perjury)
43. statutory construction of criminal laws: financial (other than in fraud or internal revenue)
44. statutory construction of criminal laws: firearms
45. statutory construction of criminal laws: fraud
46. statutory construction of criminal laws: gambling
47. statutory construction of criminal laws: Hobbs Act; i.e., 18 USC 1951
48. statutory construction of criminal laws: immigration (cf. immigration and naturalization)
49. statutory construction of criminal laws: internal revenue (cf. Federal Taxation)
50. statutory construction of criminal laws: Mann Act and related statutes
51. statutory construction of criminal laws: narcotics includes regulation and prohibition of alcohol
52. statutory construction of criminal laws: obstruction of justice
53. statutory construction of criminal laws: perjury (other than as pertains to statutory construction of criminal laws: false statements)
54. statutory construction of criminal laws: Travel Act, 18 USC 1952
55. statutory construction of criminal laws: war crimes
56. statutory construction of criminal laws: sentencing guidelines
57. statutory construction of criminal laws: miscellaneous
58. jury trial (right to, as distinct from extra-legal jury influences)
59. speedy trial
60. miscellaneous criminal procedure (cf. due process, prisoners' rights, comity: criminal procedure)
Answer:
|
sc_lcdisposition
|
B
|
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the treatment the court whose decision the Supreme Court reviewed accorded the decision of the court it reviewed, that is, whether the court below the Supreme Court (typically a federal court of appeals or a state supreme court) affirmed, reversed, remanded, denied or dismissed the decision of the court it reviewed (typically a trial court). Adhere to the language used in the "holding" in the summary of the case on the title page or prior to Part I of the Court's opinion. Exceptions to the literal language are the following: where the Court overrules the lower court, treat this a petition or motion granted; where the court whose decision the Supreme Court is reviewing refuses to enforce or enjoins the decision of the court, tribunal, or agency which it reviewed, treat this as reversed; where the court whose decision the Supreme Court is reviewing enforces the decision of the court, tribunal, or agency which it reviewed, treat this as affirmed; where the court whose decision the Supreme Court is reviewing sets aside the decision of the court, tribunal, or agency which it reviewed, treat this as vacated; if the decision is set aside and remanded, treat it as vacated and remanded.
CAMPBELL et al. v. UNITED STATES.
No. 53.
Argued December 6, 1960.
Decided January 23, 1961.
Melvin S. Louison and Lawrence F. O’Donnell argued the cause for petitioners. With them on the brief was Leonard Louison.
Roger G. Connor argued the cause for the United States. On the brief were Solicitor General Rankin, Assistant Attorney General Wilkey, Beatrice Rosenberg and Kirby W. Patterson.
Mr. Justice Brennan
delivered the opinion of the Court.
After a government witness testifies on direct examination in a federal criminal prosecution the trial court is required, under the so-called Jencks Act, on motion of the defendant, to order the United States to produce, for impeachment purposes, defined pretrial statements of the witness, or parts of such statements as determined under subsection (c), which relate to the subject matter of his trial testimony and are in the possession of the United States. The conviction of the petitioners in the District Court for the District of Massachusetts for bank robbery in violation of 18 U. S. C. § 2113 was sustained by the Court of Appeals for the First Circuit. 269 F. 2d 688. During the trial the court ordered the Government to produce a document described on cross-examination by one of its witnesses in terms which satisfy the definition of a “statement” under the Act. The Government denied having possession of such a document. It did, however, admit possession of an Interview Report of an interview by an FBI agent with that witness, but contended that this report fell outside the statute. The trial judge held an inquiry without the jury present, at the conclusion of which he refused to order the United States to deliver the Interview Report to the petitioners, and also denied their motion to strike the testimony of the witness. The procedure at that inquiry raises questions important in the administration of the Jencks Act, and we granted certio-rari limited to the review of those questions. 362 U. S. 909.
The government witness was Dominic Staula, a depositor who was in the bank at the time of the robbery. On direct examination he identified the petitioner Lester as one of the robbers. When asked on cross-examination whether he made any statements to government agents before the trial, he said that an agent of the Federal Bureau of Investigation who interviewed him during the week following the robbery wrote down such a statement. His recollection of what occurred at the interview was not entirely clear, but the trial judge ruled that he had made a statement satisfying the requirements of the Jencks Act and ordered the United States to produce it. The Assistant United States Attorney presenting the Government’s case stated that he had no such paper as the witness described. He stated further that the only document in the possession of the prosecution was not a "statement” within the statute, but a typed Interview Report of FBI Special Agent Toomey prepared and transcribed after the interview at a time unknown to the Assistant. The Assistant refused to deliver the report to petitioners’ counsel but delivered it to the judge for his inspection. To the court’s question whether the Government possessed “any statement that was copied by an FBI Agent which in any way would reflect a statement that this witness made and which he substantially adopted as the statement,” the Assistant replied “No, your Honor, we don’t.” To the further question whether “the United States [has] in its possession any notes that were taken down by the FBI Agent at the time this witness was interviewed,” the Assistant answered, “I do not have them in my possession and I do not know whether they ever existed.”
The Jencks Act limits access by defendants to such government papers as fit the Act’s definition of “statements” which relate to the subject matter as to which the witness has testified, Palermo v. United States, 360 U. S. 343. However, the statute requires that the judge shall, on motion of the defendant, after a witness called by the United States has testified on direct examination, order the United States, for impeachment purposes, to produce any such “statements.” To that extent, as the legislative history makes clear, the Jencks Act “reaffirms” our holding in Jencks v. United States, 353 U. S. 657, that the defendant on trial in a federal criminal prosecution is entitled, for impeachment purposes, to relevant and competent statements of a government witness in possession of the Government touching the events or activities as to which the witness has testified at the trial.. S. Rep. No. 981, 85th Cong., 1st Sess., p. 3. And see H. R. Rep. No. 700, 85th Cong., 1st Sess., pp. 3-4. The command of the statute is thus designed to further the fair and just administration of criminal justice, a goal of which the judiciary is the special guardian.
After an overnight recess the trial judge conducted an inquiry without the jury present to take testimony and hear argument of counsel. Plainly enough this was a proper, even a required, proceeding in the circumstances. Determination of the question whether the Government should be ordered to produce government papers could not be made from a mere inspection of the Interview Report, but only with the help of extrinsic evidence. The situation was different from that governed by subsection (c), in which the Government admits that a document in its possession is a “statement” but submits the paper for the judge’s in camera inspection to delete matter which the Government contends does not relate to the subject matter of the testimony of the witness. The situation was similar to that in Palermo, where the Government also contended that a paper in its possession was not a “statement.” We there approved the procedure of taking extrinsic testimony out of the presence of the jury to assist the judge in reaching his determination whether to order production of the paper. We said, at 354-355, “It is also the function of the trial judge to decide, in light of the circumstances of each case, what, if any, evidence extrinsic to the statement itself may or must be offered to prove the nature of the statement.”
In this case the aid of extrinsic evidence was required to answer the following questions bearing on the petitioners’ motions:
Did Toomey write down what Staula told him at the interview? If so, did Toomey give Staula the paper “to read over, to make sure that it was right,” and did Staula sign it?
Was the Interview Report the paper Staula described, or a copy of that paper? In either case, as the trial judge ruled, the Interview Report would be a producible “statement” under subsection (e) (1). “Statements” under that subsection are not limited to such as the witness has himself set down on paper. They include also a statement written down by another which the witness • “signed or otherwise adopted or approved” as a statement “made by said witness.” True, the report does not bear Staula’s signature and the witness testified “I think I had to sign” the original paper. Hbwever, if the paper was otherwise adopted or approved by the witness, his signature was not essential. See Bergman v. United States, 253 F. 2d 933, 935, note 1; United States v. Tomaiolo, 280 F. 2d 411, 413.
If the Interview Report was not the original or a copy of the paper Staula described, what became of the paper?
In any event, even if the Interview Report was not the original or a copy of the paper Staula described, had Staula read over and approved the Interview Report? In such case the report would be producible under subsection (e)(1) although not related to the paper Staula described. Or was the Interview Report a substantially verbatim recital of an oral statement which the agent had recorded contemporaneously? If extrinsic evidence established this, the report would be producible under subsection (e)(2). Palermo v. United States, at 351-352.
The obvious witness to call was Special Agent Toomey who, the parties agreed, was readily available. Defense counsel suggested that the agent be called “to explain where he got the . . . [Interview Report],” and also because “Mr. Toomey could easily say what he has done with the original writing.” Defense counsel were not in a position also to appreciate the significance of Toomey’s testimony to the possible producibility of the Interview Report itself. Consistent with our admonition in Palermo, 360 U. S., at 354, that “It would indeed defeat this design [to limit defense access to government papers] to hold that the defense may see statements in order to argue whether it should be allowed to see them,” neither the Government nor the judge permitted them to inspect it. From his own inspection, however, the judge was aware of the significance which Toomey’s evidence might have on the judge’s determination whether he should order the Government to turn over the Interview Report to the defense. The Interview Report resembles the statement Staula described and the judge indicated that he would order its production if it was that statement or a copy of it, or although not the original or a copy, if Staula had read and approved it, or if it was a contemporaneously recorded substantially verbatim recital of Staula’s oral statement. Nevertheless, the judge ruled that it was for the petitioners to subpoena Toomey as “their witness” if they believed his testimony would support their motions, and that he would not of his own motion summon Toomey to testify, or require the Government to produce him. We think that this ruling was erroneous.
The inquiry being conducted by the judge was not an adversary proceeding in the nature of a trial controlled by rules governing the allocation between the parties of the burdens of proof or persuasion. The inquiry was simply a proceeding necessary to aid the judge to discharge the responsibility laid upon him to enforce the statute. The function of prosecution and defense at the inquiry was not so much a function of their adversary positions in the trial proper, as it was a function of their duty to come forward with relevant evidence which might assist the judge in the making of his determination. These considerations standing alone suggest that the emphasis on the petitioners' burden to produce the evidence was misplaced. The statute says nothing of burdens of producing evidence. Rather it implies the duty in the trial judge affirmatively to administer the statute in such way as can best secure relevant and available evidence necessary to decide between the directly opposed interests protected by the statute — the interest of the Government in safeguarding government papers from disclosure, and the interest of the accused in having the Government produce “statements” which the statute requires to be produced.
The circumstances of this case clearly required that the judge call Toomey of his own motion or require the Government to produce him. Not only did the Government have the advantage over the defense of knowing the contents of the Interview Report but it also had the advantage of having Toomey in its employ and presumably knew, or could readily ascertain from him, the facts about the interview. In addition to the consideration that the interest of the United States in a criminal prosecution “. . . is not that it shall win a case, but that justice shall be done, . . .” Berger v. United States, 295 U. S. 78, 88, the ordinary rule, based on considerations of fairness, does not place the burden upon a litigant of establishing facts peculiarly within the knowledge of his adversary. United States v. New York, N. H. & H. R. Co., 355 U. S. 253, 256, note 5. Moreover, the petitioners’ cross-examination of Staula had shown a prima jade case of their entitlement to a statement, and, at the least, the judge should have required the Government to come forward with evidence to answer that case. Cf. United States v. Costello, 145 F. Supp. 892, 894-895, note 13. Since the Interview Report was not, and under Palermo could not be, made available to the petitioners, and they thus had no way of knowing the significance of its contents to the question the judge was to determine, it saddled an unfairly severe burden on them to require them to subpoena Toomey as “their witness.” In the role of petitioners’ witness, they would be groping in the dark in questioning him, and they might be bound by his answers. As a witness called by the Government or even as the court’s witness, they would have a latitude in cross-examination to which the circumstances entitled them.
Instead of calling Toomey or having the Government call him, the trial judge fell into further error by relying upon Staula to supply the information he sought. Over the objection of government counsel that the Interview Report had not been “recorded contemporaneously with the making of such oral statement,” and over the objection of the petitioners that “If this man now reads that statement it loses its effect for purposes of impeachment,” the judge directed Staula to read the Interview Report and say whether he was familiar with it. The witness said that he had never seen the report. The judge then asked Staula “. . . is that a substantially verbatim recital of what you told Agent Toomey?” The witness replied, “That’s not written up just the way the story is.” “There are things in there turned around.” It was after this testimony was elicited from Staula that the judge ruled he would not order the delivery of the Interview Report to the petitioners, and denied their motion to strike the witness’ testimony.
Reliance upon the testimony of the witness based upon his inspection of the controverted document must be improper in almost any circumstances. The very question being determined was whether the defense should have the document for use in cross-examining the witness. Under Palermo, the trial judge was not to allow the defense to inspect the Interview Report “in order to argue whether it should be allowed to see” it, since to do so would be inconsistent with the congressional purpose to limit access to government papers. Similarly, Staula should not have been allowed to inspect the Interview Report, since there necessarily inhered in the witness’ inspection of the paper the obvious hazard that his self-interest might defeat the statutory design of requiring the Government to produce papers which are “statements” within the statute. For example, the Interview Report states that Staula was unable to give any description of one of the robbers. This is in sharp contrast to his positive identification of Lester made on direct examination. Experienced trial judges and lawyers will readily understand the value of the use of the report on cross-examination of the witness. But the petitioners were deprived of the opportunity to make use of the report by the obviously self-serving declarations of the witness that it did not accurately record what he told the agent.
Moreover, failure of the judge to call for Toomey’s testimony foreclosed a proper determination of the petitioners’ motion to strike the witness’ testimony. If the Interview Report was not the original or a copy of the paper Staula described, and that paper was destroyed, the petitioners might have been denied a statement to which they were entitled under the statute. Thus, even if the Interview Report itself were producible, a situation might have arisen calling for decision whether subsection (d) of the statute required the striking of the testimony of the witness. The parties argue whether destruction may be regarded as the equivalent of noncompliance with an order to produce under that subsection. The Government contends that only destruction for improper motives or in bad faith should be so regarded. The petitioners contend that destruction without regard to the circumstances should be so regarded. However, this record affords us no opportunity to decide this important question of the construction of subsection (d). We do not yet know that such a paper existed, and was destroyed, or the circumstances of its destruction, nor can we know without the benefit at least of Toomey’s testimony.
We conclude that because of these errors in the conduct of the inquiry the petitioners are entitled to a redeter-mination of their motion for the production of Staula’s pretrial statements, and of their motion to strike his testimony. However, we do not think that this Court should vacate their conviction and order a new trial. The petitioners’ rights can be fully protected by a remand to the trial court with direction to hold a new inquiry consistent with this opinion. See United States v. Shotwell Mfg. Co., 355 U. S. 233. The District Court will supplement the record with new findings and enter a new final judgment of conviction if the court concludes upon the new inquiry to reaffirm its former rulings. This will preserve to the petitioners the right to seek further appellate review on the augmented record. On the other hand, if the court concludes that the Government should have been required to deliver the Interview Report or other statement to the petitioners, or that it should have granted their motion to strike Staula’s testimony, the court will vacate the judgment of conviction and accord the petitioners a new trial.
The judgment of the Court of Appeals is therefore vacated and the case is remanded to the District Court for further proceedings consistent with this opinion.
It is so ordered.
18 U. S. C. § 3500. Demands for production of statements and reports of witnesses.
“(a) In any criminal prosecution brought by the United States, no statement or report in the possession of the United States which was made by a Government witness or prospective Government witness (other than the defendant) to an agent of the Government shall be the subject of subpena, discovery, or inspection until said witness has testified on direct examination in the trial of the case.
“(b) After a witness called by the United 'States has testified on direct examination, the court shall, on motion of the defendant, order the United States to produce any statement (as hereinafter defined) of the witness in the possession of the United States which relates to the subject matter as to which the witness has testified. If the entire contents of any such statement relate to the subject matter of the testimony of the witness, the court shall order it to be delivered directly to the defendant for his examination and use.
“(c) If the United States claims that any statement ordered to be produced under this section contains matter which does not relate to the subject matter of the testimony of the witness, the court shall order the United States to deliver such statement for the inspection of the court in camera. Upon such delivery the court shall excise the portions of such statement which do not relate to the subject matter of the testimony of the witness. With such material excised, the court shall then direct delivery of such statement to the defendant for his use. If, pursuant to such procedure, any portion of such statement is withheld from the defendant and the defendant objects to such withholding, and the trial is continued to an adjudication of the guilt of the defendant, the entire text of such statement shall be preserved by the United States and, in the event the defendant appeals, shall be made available to the appellate court for the purpose of determining the correctness of the ruling of the trial judge. Whenever any statement is delivered to a defendant pursuant to this section, the court in its discretion, upon application of said defendant, may recess proceedings in the trial for such time as it may determine to be reasonably required for the examination of such statement by said defendant and his preparation for its use in the trial.
“ (d) If the United States elects not to comply with an order of the court under paragraph (b) or (c) hereof to deliver to the defendant any such statement, or such portion thereof as the court may direct, the court shall strike from the record the testimony of the witness, and the trial shall proceed unless the court in its discretion shall determine that the interests of justice require that a mistrial be declared.
“(e) The term ‘statement,’ as used in subsections (b), (c), and (d) of this section in relation to any witness called by the United States, means—
“(1) a written statement made by said witness and signed or otherwise adopted or approved by him; or
“(2) a stenographic, mechanical, electrical, or other recording, or a transcription thereof, which is a substantially verbatim recital of an oral statement made by said witness to an agent of the Government and recorded contemporaneously with the making of such oral statement.” Added by Pub. L. 85-269, Sept. 2, 1957, 71 Stat. 595.
The pertinent parts of his testimony are as follows:
“XQ. Now, Mr. Witness, when you said you had a conversation with the FBI some time less than a week after July 18, 1957, did they write down what you had to say to them?
“The Court: If you know.
“The Witness: Yes.
“XQ. And did they read it back to you, sir? A. Yes.
“XQ. And did they ask you if that was essentially what you had just related to them? A. Yes.
“XQ. And did you tell them yes? A. Yes.
“The Court: I will order it produced. There is a foundation laid for it.
“The Witness: ... He didn’t actually ask me questions. I mean, at first I told him the story, and then when I got through he asked me a few questions.
“The Court: Well, did he read it back to you?
“The Witness: I believe he did.
“The Court: What is your best memory of it?
“The Witness: I am pretty sure he did.
“The Court: Is your memory such as to enable you to say that what was read back to you was an accurate statement of what you told him?
“The Witness: Yes.
“The Witness: If you will excuse me, I am trying to rack my brain to think about what happened. I think they wrote down what I said, and then I think they gave it back to me to read over, to make sure that it was right. And I think I had to sign it. Now, I am not Sure. I couldn’t remember before — ”
The District Court sealed the Interview Report for the Court of Appeals. The Court of Appeals released it and it is in the record here. The full text is as follows:
“Federal Bureau of Investigation Interview Report
“Mr. Dominic Staula, home address 259 Island Street, Stoughton, Massachusetts, a customer at the victim bank, advised that he arrived at the Norfolk County Trust Company in Canton, Massachusetts, to' transact some business at approximately 10:15 A. M., July 18, 1957. Mr. Staula stated that he was driving a truck and parked it beside the Canton Depot in the parking area located between the railroad depot and the bank. He stated that he noted nothing unusual when he entered this parking area nor did he notice anything unusual in walking from where he parked his vehicle to the bank.
“It was stated by Mr. Staula that he went to the teller’s window which is served by Mr. Kennedy and while standing in line at this window, but before being waited upon by Mr. Kennedy, he heard somebody state from behind him ‘Over against the wall.’
“Mr. Staula stated that he looked around and observed a man whom he described as being a negro, wearing gray chino pants, standing in the center of the lobby and holding a gun. Staula stated that he immediately realized that the bank was being held up and at once took his deposits which consisted of cash and slid them into his side trouser pocket.
“Mr. Staula went on to state that he only observed the man standing in the center of the lobby for an instant and could give no further description of him because he turned toward the front of the bank and observed another man standing there holding a gun. Staula stated that he looked at this man for a short period of time and described him as follows: [Footnote 3 continued on p. 91.1
“Property of FBI. — This report is loaned to you by the FBI, and neither it nor its contents are to be distributed outside the agency to which loaned.
Sex . Male.
Race . Negro.
Age . Approximately 30 years.
Height . 5' 10".
Weight . 165 pounds.
Complexion . Very dark.
Build . Slender.
Face . Round.
Clothing . Dark blue suit. Blue snap brim hat. White shirt.
“Mr. Staula stated that he did not observe a third man in the bank—
“It was stated by Mr. Staula that he did not know what type of gun was carried by these two individuals whom he observed but believed that they could have been 45 caliber automatics.
“Mr. Staula stated that after taking a look at the individual wearing the blue suit he faced the wall as previously ordered and observed these individuals no further.
“He stated that after he stood with his face to the wall for approximately 10 minutes one of the robbers ordered him and the other people who were standing on either side of him to walk into the vault. He stated that he does not recall which of the robbers issued this order but that he did enter the vault as directed and observed these individuals no further.
“Mr. Staula stated that one of the robbers, closed the door of the vault he issued some order to the effect that the people locked inside should not leave and that they stayed there for 5 or 10 minutes until the vault door was opened by Sergeant Ruane of the Canton, Massachusetts, Police Department.”
“Interview with Dominic Staula, File # 91-952, on July 19, 1957, at Canton, Massachusetts, by Special Agent John F. Toomey, Jr., bjp.”
Question: What treatment did the court whose decision the Supreme Court reviewed accorded the decision of the court it reviewed?
A. stay, petition, or motion granted
B. affirmed
C. reversed
D. reversed and remanded
E. vacated and remanded
F. affirmed and reversed (or vacated) in part
G. affirmed and reversed (or vacated) in part and remanded
H. vacated
I. petition denied or appeal dismissed
J. modify
K. remand
L. unusual disposition
Answer:
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songer_respond1_1_2
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D
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". Your task is to classify the scope of this business into one of the following categories: "local" (individual or family owned business, scope limited to single community; generally proprietors, who are not incorporated); "neither local nor national" (e.g., an electrical power company whose operations cover one-third of the state); "national or multi-national" (assume that insurance companies and railroads are national in scope); and "not ascertained".
ASSOCIATED STATIONS, INC., a Virginia corporation, and USCO, Inc., a Virginia corporation, Appellees, v. CEDARS REALTY AND DEVELOPMENT CORPORATION, a Mississippi corporation, and Magnolia Homes Manufacturing Corporation, a Mississippi corporation, Appellants.
No. 71-1476.
United States Court of Appeals, Fourth Circuit.
Argued Nov. 2, 1971.
Decided Jan. 17, 1972.
Thomas H. Atkins, Richmond, Va. (G. Kenneth Miller, and May, Garrett & Miller, Richmond, Va., on brief), for appellants.
George C. Rawlings, Jr., Fredericks-burg, Va., for appellees.
Before HAYNSWORTH, Chief Judge, and WINTER and RUSSELL, Circuit Judges.
WINTER, Circuit Judge:
Associated Stations, Inc. (Associated), a Virginia corporation, leased certain property to Cedars Realty and Development Corporation (Cedars), a Mississippi corporation engaged in the manufacturing of mobile homes. After the lease expired, Associated sued to recover for damages to its property. Finding Cedars liable, the district court gave judgment in the amount of $42,858.00. We agree with the district court’s conclusion that Cedars was liable to Associated for damages to the leasehold; however, we conclude that the district court erred in using the “cost of restoration” standard in assessing damages. Therefore, we vacate the judgment and remand the case to the district court for a redetermination of damages.
I
In the fall of 1964, Associated leased to Cedars 32.46 acres, improved by two large quonset type buildings suitable for manufacturing as well as offices and storage areas, located at Doswell, Virginia. The term of the lease was from November 30, 1964 to November 30, 1967, with rent payable in monthly installments of $1,150.00. The lease provided, inter alia, that Cedars was to maintain the premises in good repair and upon termination of the lease to leave the premises in good repair, to remove all rubbish, and to return the keys to Associated.
In the latter months of 1966, Cedars decided to move its operations to Georgia and to discontinue all business at the Doswell site. This fact was known in the community because of its effect on jobs and because of two auctions held by Cedars to sell certain property. Although Cedars never formally communicated to Associated its intention to vacate the premises, Associated was aware of Cedars’ plans to discontinue its operations in Virginia.
Cedars’ closing operations occurred over a number of months. Regular production personnel were still on the site two days before Christmas, in 1966, and various supplies and materials, including a forklift truck, were still on the property in the early months of 1967. Despite the fact that Cedars claims that it intended to cease all operations, no effort was made to clear the property of rubbish, return the keys to Associated, or to restore the buildings which had been modified for Cedars’ operations to their former condition. Additionally, Cedars continued to pay the monthly rent, the checks being sent to Associated from Cedars’ office in Georgia.
Sometime around the end of January or the beginning of February, 1967, an employee of Cedars returned to the Dos-well property to retrieve the forklift truck. He noticed that an air-conditioning unit was missing from one of the buildings. He reported this fact to his superior, but this information was never conveyed to Associated. In March, of 1967, Mr. George Thomas, the president of Associated, visited the property and found that a considerable amount of vandalism had occurred. Windows, doors, and wiring, as well as plumbing and electrical fixtures, had been damaged. Holes were found in the roof and several of the heating motors and electrical switches required replacement. In addition, the special heavy-duty wiring which had been used by a previous tenant in the midfifties had been torn out and removed. Mr. Thomas made several more visits to the property and on each successive occasion he found more damage, but this damage was minor in comparison to what was originally found. The district court found that the bulk of the damage had occurred prior to Thomas’ March, 1967 visit.
After Associated regained possession of the property, it repaired some of the damage and made certain modifications of the facilities to accommodate a new tenant, Fiberlay Corporation, to which the property was let in May, 1968. Thereafter, Associated instituted this suit in the district court to recover $47,620.00 which it alleged would be the aggregate cost of restoring the property to its former condition. Of this sum, $11,900.00 was actually expended by Associated, including $2,800.00 for modifications for the new tenant. The remaining $35,720.00 was never spent. This figure included $27,500.00 to replace and repair the special heavy-duty electrical wiring required by Cedars’ predecessor. In 1970, Fiberlay Corporation purchased the property for $152,-000.00.
The district court found that Cedars was liable for the damage caused by the vandalism and awarded Associated '$43,858.00. It arrived at this sum by taking Associated’s estimated cost of repairs ($47,620.00) and reducing it by 10%. Cedars thereupon appealed.
II
Cedars contends that Associated, knowing that the property had been vacated and that vandalism was occurring, had a duty to protect the property from further damage and that having failed to do so, is barred from holding Cedars responsible for damages. Cedars’ argument need not detain us long. The district court found that Associated had not accepted a surrender of the property and that the property had not been abandoned. Even after all manufacturing had ceased, Cedars continued to use the property for storage in the early part of 1967. Cedars made no effort to comply with the provisions in the lease with respect to surrender and, throughout the period in question, it continued to pay the monthly rental. Manifestly, the district court was not clearly erroneous in finding neither an abandonment nor a surrender. It follows that Cedars was not relieved of its responsibility to protect the property.
Nor do we think that under the facts of this case Associated was required to reenter the property in order to prevent further vandalism. Where an injured party is in a position to prevent further loss to himself by a reasonable expenditure of money or effort, he is required to do so. Haywood v. Massie, 188 Va. 176, 49 S.E.2d 281 (1948); Stonega Coke & Coal Co. v. Addington, 112 Va. 807, 73 S.E. 257 (1912). But, in determining what is reasonable, regard must be had for all the circumstances. In the present case, Cedars concedes that the property was difficult to secure. Presumably, this difficulty was as great for Associated as Cedars. In any event, there is nothing to suggest that by a “trifling inconvenience,” or even a reasonable effort, Associated could have prevented the damages. See Haywood v. Massie, supra, 49 S.E.2d at 284. Moreover, it was not until the great majority of the damage had been done that Associated was aware of the situation. We agree with the district court that Cedars has failed to demonstrate that by a reasonable effort Associated could have prevented the loss.
Ill
In assessing damages, the district court used the “cost of restoration” standard. Damages were based on the amount it would have cost to restore the property to the condition it had been in when the property was leased to Cedars. This is the general rule for determining damages to leasehold property in Virginia. See Sharlin v. Neighborhood Theatre, Inc., 209 Va. 718, 167 S.E.2d 334 (1969); Vaughan v. Mayo Milling Co., 127 Va. 148, 102 S.E. 597 (1920); Moses v. Old Dominion Iron and Nail Works Co., 75 Va. 95 (1880). In none of these cases, however, was there any contention that the cost of restoring the property to its former condition greatly exceeded any benefit to the market value of the property. Cedars has made this very assertion — that the cost of repair does exceed any benefit to the value of the property — and thus we have no controlling Virginia ruling on this point.®
The object of damages in a contract case is to restore the plaintiff to the position he would have been in had the contract not been breached. The “cost of restoration” method is one convenient way of determining the amount of damages to be awarded the plaintiff where a breach had occurred. There are, however, certain situations where this method of computing damages does not restore the plaintiff to the position he would have been in had the contract not been breached, but rather places him in a better position, thus providing him with a windfall. In those cases, courts have resorted to alternative methods of computing damages in order to insure that, as far as possible, the plaintiff neither loses nor benefits from the breach. As the court in Crystal Concrete Corp. v. Town of Braintree, 309 Mass. 463, 35 N.E.2d 672 (1941), stated:
[T]he plaintiff is not to be put in a better position than it would have been if the defendant had performed the terms of the lease. The location and character of the demised premises must be considered; and the reasonable cost of repairs, in some instances, would furnish the proper measure of damages while, in other instances, the value of the premises may be such that the incurrence of the expense for repairs would not be a reasonable, practical or economical method of dealing with the property. Such expense might greatly exceed any diminution of the fair market value of the land that was caused by the defendant’s nonperformance of the provisions of the lease.
Id. at 675.
We think the present case is similar to Bowes v. Saks & Company, 397 F.2d 113 (7 Cir. 1968). In Bowes, the lease provided that on its termination the property was to be returned to the landlords in the same condition that it had been when it was let to the lessees. The tenants in that case altered the property by building a bridge across an alley; and, at the expiration of the lease, the landlords sought to recover $115,000.00, which they claimed was the cost of removing the bridge and restoring the wall in the building where the bridge had been connected. During the term of the lease, the landlords sold the property, with settlement to be made two days after the expiration of the lease. Prior to the expiration of the lease, the tenant entered into a three-year lease with the new purchaser and thus its interest in the building continued. No effort was made by the new purchaser either to have the building restored or to recover part of the purchase price from the original landlords because of the lack of restoration. In a suit by the original landlords to recover damages for breach of the covenant to restore the premises, the court declined to permit the landlord to recover the cost of restoration because the value of the building was not diminished by the tenant’s failure to restore it, and, therefore, the landlords suffered no loss from the breach. Bowes v. Saks & Company, supra, 397 F.2d at 117; accord Dodge Street Building Corp. v. United States, 341 F.2d 641, 169 Ct.Cl. 496 (1965); Crystal Concrete Corp. v. Town of Braintree, supra.
In the absence of any controlling Virginia precedent, we think that the rule set forth in Bowes and the cases cited therein is the most appropriate for application in the present case. Included in Associated’s estimate for the cost of repairing the property was $27,500.00 to replace special heavy-duty electrical wiring which had been used last by a former tenant in the fifties. Expert testimony was to the effect that the value of the property at the expiration of the lease in 1967, assuming no vandalism, was $116,945.00, and that in 1970 when the property was sold it was valued at $134,700.00. The expert testimony was also that had the special heavy-duty wiring been replaced, its replacement would not have affected the market value of the property either in 1967 or in 1970. Thus, Associated expended $9,665.00 and was successful in selling property worth $134,700.00 for $152,-000.00, realizing thereby a profit of $7,635.00. If Associated were to recover also $27,500.00 as the estimated cost of replacement of the electrical wiring which Associated has no intention of replacing and which would have no effect on the market value of the property, Associated would realize a windfall of $27,500.00. Since, in this case, the use of the “cost of restoration” method of determining damages would probably do more than place Associated in the position it would have been in had Cedars not breached its agreement, we think the use of this method inappropriate. Rather, Associated should be permitted to recover the cost of restoration or the diminution in market value, whichever is less. In the event that diminution in market value is less, and so becomes the measure of recovery, Associated should also be permitted to recover the salvage value, if any, of the property removed by Cedars or others and not replaced by Cedars. Under this formula, Associated will not realize unjust enrichment, but it will be fully protected from any actual loss.
We have referred to the expert testimony with regard to the market value of the subject property in 1967 and in 1970. And, at one stage of the proceedings, the district court purportedly found the market value to be $131,950.00 as of an undisclosed date. But our study of the record discloses that the case was tried as to damages on the basis that Virginia law required damages to be assessed by the “cost of restoration” standard in all events without recognition of the exceptional case in which slavish devotion to the doctrine will result in unjust enrichment. Although we have concluded this case is in the latter category, we recognize that the evidence as to market value may not have been as fully developed, nor the finding of the district court as fully considered, had the relevance of market value been recognized at the outset. In remanding to the district court for reassessment of damages in the light of this opinion, we direct that the parties be given a reasonable opportunity to present additional evidence of market value, the district court being free to make findings in this regard anew.
Vacated and remanded.
. The original lessors were USCO, Inc. and Dixie Trailer Equipment Manufacturing. The name of USCO, Inc. has been changed to Usry Investment Corporation and Associated Stations, Ine. has succeeded to Dixie’s interest. Magnolia Homes Manufacturing Corporation, the parent of Cedars, was also joined as a defendant.
. The term was later amended to run from January 1, 1965 to December 30, 1967.
. Paragraphs 5 and 6 of the lease provide as follows:
5. Lessee will comply with all lawful requirements of local and state health boards, police and fire departments, County, Municipal, State and Federal authorities, and the Board of Fire Underwriters respecting the use of the premises and will make any improvements not of a structural nature required by said authorities.
Lessee will keep and maintain the premises in good condition and repair; keej) in good running order all heating and air conditioning systems, electric wiring, toilets, water pipes, water, gas and electric fixtures; replace all locks, trimmings, glass and plate glass broken during the term of this lease; unstop all water fixtures that may become choked and repair all water pipes and plumbing that may burst. Lessee will not make any alterations of, additions to or changes in the premises, except after first obtaining the written consent of Lessors, and all alterations of, additions to or changes in the premises, except after first obtaining the written consent of Lessors, and all alterations, changes and improvements, by whomsoever made, shall be the property of Lessors. The foregoing shall not apply to any equipment used in Lessee’s business which may be attached to the premises and Lessee may remove such equipment at the termination of this lease. It shall, however, repair and replace any and all damage done to the premises by such removal.
6. Lessee covenants to leave the premises in good repair, damages by fire, act of God, or other casualty excepted, and upon surrender of possession will have all rubbish removed, the premises thoroughly cleaned, and will deliver to Lessors all keys to the premises.
. The president had made an earlier visit to the property. On that occasion lie found that all operations had ceased, but that Cedars’ materials -were still on the property,
. Under Virginia law, mitigation of damages is an affirmative defense, and the burden of proof rests entirely on the party breaching the contract. See Foreman v. E. Caligari and Company, Inc., 204 Va. 284, 130 S.E.2d 447 (1903).
6. Green v. Burkholder, 208 Va. 708, 160 S.E.2d 765 (1968), cited by Associated for the proposition that the “cost of restoration” standard still applies, is distinguishable.
In Green, the parties assumed that damages were to be determined by the cost of restoration method and thus all the evidence went to the issue of how much it would cost the plaintiff to perform the breached contract. No evidence was submitted to show the present market value of the property or the effect the restoration might have on that market value. Nevertheless, the trial judge refused to permit the issue of damages to go to the jury because the plaintiff had not demonstrated that defendant’s breach adversely affected the value of his property.
The Supreme Court of Appeals reversed the trial court, holding that since the case was tried on the cost of repair theory and not the market value theory, “it [was too] late for the defendants to say that the proper measure of damages was the difference between the before and after value of the property.” Id. at 767. Although the court did apply the cost of restoration rule, nothing in the opinion suggests that this rule should be applied exclusively in all situations. Indeed, the court indicated that its application in that case was proper because the damages to be awarded under the rule would not be grossly disproportionate to the harm suffered and would not involve economic waste. The view we take of the instant case is consistent with the latter statement.
. Although the instrument in this case is a lease, the lease itself contains mutual covenants which are subject to contract principles. See generally, 3A Corbin, Corbin on Contracts, § 686 (1960).
. This sum was part of a larger sum of $35,720.00 which Associated never spent. By referring only to the $27,500.00 we do not mean to imply that Associated can recover the balance of the larger sum. Indeed, we do not decide what damages are to be recovered. We refer to the electrical wiring and its costs only by way of example since it was an item of considerable cost but having little or no relation to market value of the property.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". What is the scope of this business?
A. local
B. neither local nor national
C. national or multi-national
D. not ascertained
Answer:
|
songer_genresp1
|
C
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed respondent.
UNITED STATES of America, Appellee, v. Dale R. JAVINO, Defendant-Appellant.
No. 773, Docket 91-1490.
United States Court of Appeals, Second Circuit.
Argued Jan. 22, 1992.
Decided April 6, 1992.
Barbara D. Cottrell, Asst. U.S. Atty., Albany, N.Y. (Frederick J. Scullin, Jr., U.S. Atty. for the Northern District of New York, Bernard J. Malone, Jr., Asst. U.S. Atty., on the brief), for appellee.
Adrian L. DiLuzio, Mineóla, N.Y, (Laurie S. Hershey, on the brief), for defendant-appellant.
Before: NEWMAN and KEARSE, Circuit Judges, and CEDARBAUM, District Judge .
Honorable Miriam Goldman Cedarbaum, of the United States District Court for the Southern District of New York, sitting by designation.
KEARSE, Circuit Judge:
Defendant Dale R. Javino appeals from a final judgment of the United States District Court for the Northern District of New York, Thomas J. McAvoy, Judge, convicting him on three counts of possession of a destructive device, to wit, an incendiary bomb, in violation of various provisions of chapter 53 of Title 26 of the United States Code, 26 U.S.C. §§ 5801-5872 (1988). He was convicted of knowing receipt and possession of a destructive device made in violation of chapter 53, in violation of 26 U.S.C. §§ 5822, 5861(c), and 5871 (count 1); knowing receipt and possession of a destructive device that was unregistered, in violation of 26 U.S.C. §§ 5841, 5861(d), and 5871 (count 2); and knowing receipt and possession of a destructive device not identified by a serial number, in violation of 26 U.S.C. §§ 5861(f) and 5871 (count 3). He was sentenced principally to serve three concurrent 21-month terms of imprisonment. On appeal, Javino challenges the sufficiency of the evidence, the instructions to the jury, and the performance of his trial counsel. For the reasons below, we conclude that Javino’s conviction on count 1 must be reversed for lack of evidence as to one element of the offense charged in that count; we affirm the convictions on counts 2 and 3.
I. BACKGROUND
Taken in the light most favorable to the government, the evidence at trial showed the following. In August 1990, Javino had been involved in a dispute with Michael Constantino and Lynn Fitzgerald, residents of Amsterdam, New York, and had threatened to kill them. Just after midnight on August 3, Constantino and/or Fitzgerald observed Javino in an automobile lurking near their home, at times driving slowly by, and for a time parked nearby with its lights off. Fitzgerald reported to Amsterdam police that as the car drove by she had seen a gun sticking out of the window. Shortly thereafter, the police stopped the car, which was owned and driven by Milton Block and in which Javino was a passenger.
In plain view on the back seat of the car was an incendiary bomb consisting, in part, of a 40-ounce Dole glass juice bottle nearly filled with clear liquid; attached to the bottle with electrical tape was a large explosive and detonation device with a wick. Javino and Block were arrested for possession of the bomb. Block testified at trial that he had not known the bomb was in his car until after the arresting officers seized it. In a postarrest interview, Javino stated that the bomb belonged to him and that he had planned to use it to burn brush on property located in another town. He declined to reveal the name of the person who had made the bomb, stating that he did not want to get that person in trouble.
Laboratory analysis at the federal Bureau of Alcohol, Tobacco and Firearms (“BATF”) revealed that the bottle contained a highly inflammable mixture. The detonation device contained 239.2 grains of an explosive powder, more than 100 times the amount that would be used in the largest firecracker permissible under BATF regulations. Detonation of the incendiary bomb would have had a “blast effect,” spraying glass and generating heat in the range of 4,500 degrees Fahrenheit.
A search of BATF files revealed that neither Javino nor Block had registered the bomb. Indeed, no one had ever obtained a permit or license from BATF to manufacture such a device.
Chapter 53 of 26 U.S.C., also known as the National Firearms Act (the “Act”), governs, inter alia, the making, importation, registration, and possession of “firearms,” a term that is defined to include “destructive device[s],” including devices in the nature of explosive or incendiary bombs, see 26 U.S.C. §§ 5845(a), (f). Javino was indicted on three counts relating to the bomb found in the car: knowingly receiving and possessing a device that (1) was made in violation of the Act, in violation of 26 U.S.C. §§ 5822, 5861(c), and 5871 (count 1); (2) was unregistered, in violation of 26 U.S.C. §§ 5841, 5861(d), and 5871 (count 2); and (3) was not identified by a serial number, in violation of 26 U.S.C. §§ 5861(i) and 5871 (count 3).
Javino’s defense at trial was principally that, as the bomb had been found in a car owned and driven by Block, Javino had not possessed the bomb. In support of that contention, Javino relied on the testimony of Block (a) that Javino did not put the bomb in the car and (b) that prior to trial, Block had told Javino’s attorney that Block had constructed the bomb. Javino also presented evidence as to an innocent explanation for his being in the neighborhood of the Constantino-Fitzgerald home. The jury convicted Javino on all counts, and he was sentenced as indicated above.
Following the imposition of sentence, Javino moved in the district court for bail pending appeal, contending that there were several grounds for reversal of his convictions. He argued principally that as to each count the government had failed to prove an essential element of the offense, and that he had been denied the effective assistance of counsel by reason of, inter alia, his attorney’s failure to request that the jury be instructed that it was required to acquit if it found those elements unproven. As to count 1 of the indictment, Javino argued that a destructive device made outside of the United States would not have been made in violation of chapter 53, and that the government had not proven that the bomb he possessed was made in the United States.
In a Memorandum-Opinion and Order dated November 20, 1991 (“Decision”), the district court denied Javino’s motion. The court rejected Javino’s claim of ineffective assistance of counsel on the ground that counsel’s performance fell within the range of reasonable professional assistance. With respect to the sufficiency challenge on count 1, the court found that there was no requirement that the government prove that the incendiary bomb had been made in the United States. Noting that § 5801(a) imposes a tax on “every importer, manufacturer, and dealer in firearms,” and that § 5802 “addresses ‘registration of importers, manufacturers, and dealers,’ ” Decision at 8 (emphasis therein), the court concluded that the Act governed any making of a device defined in the Act, wherever the making occurred:
Section 5845(m) defines “manufacturer” as “any person engaged in the business of manufacturing firearms.” 26 U.S.C. § 5845(m). Congress has not limited any of these sections to only products made in the United States nor is such an intent apparent from a fair reading of the statute.
Further, the purpose of the chapter (which was enacted as part of Congress’ omnibus crime bill) was to strengthen firearm provisions and to curb the transfer of converted military and homemade weapons. U.S. [v.] Greer, 588 F.2d 1151 (6th Cir.1978) cert. denied 440 U.S. 983, 99 S.Ct. 1794, 60 L.Ed.2d 244. It is only logical that the provisions thereof would apply to both foreign and domestically produced weapons. Without such an application, foreign weapons would be less controlled than domestic and the purpose of the chapter would be frustrated.
Decision at 8-9 (emphasis therein).
II. DISCUSSION
On appeal, Javino pursues his challenges to the sufficiency of the evidence and the adequacy of the trial court’s instructions to the jury, and he contends that in various respects he received ineffective assistance of counsel. For the reasons below, we find merit only in his challenge to his conviction on count 1.
A. Essential Elements of the Offenses
Javino contends that the government failed to prove an essential element of the offense in each count. As to count 1, he claims that the government was required to prove that the incendiary bomb he possessed had been made in the United States. As to count 2, he claims that the government was required to prove he knew (a) that registration of the device was required, and (b) that there had been no registration. As to count 3, he claims that the government was required to prove that the bomb failed to comply with a regulation concerning identification of such devices. Javino argues that none of these elements was proven and that the court failed to instruct the jury that it should find him innocent in the absence of their proof. Though he concedes that he did not seek such instructions at trial, he contends that the failure to instruct on the missing elements was plain error.
It is axiomatic that in a criminal prosecution, the government bears the burden of proving beyond a reasonable doubt every fact necessary to constitute the crime with which the defendant is charged. Davis v. United States, 160 U.S. 469, 487, 16 S.Ct. 353, 358, 40 L.Ed. 499 (1895) (burden of proof “is on the prosecution from the beginning to the end of the trial and applies to every element necessary to constitute the crime”); In re Winship, 397 U.S. 358, 364, 90 S.Ct. 1068, 1072, 25 L.Ed.2d 368 (1970); United States v. Gjurashaj, 706 F.2d 395, 398 (2d Cir.1983). The failure to instruct on an essential element of the offense generally constitutes plain error, permitting appellate review even if the defendant has failed to object to the instruction at trial. See, e.g., United States v. Mazzei, 700 F.2d 85, 87-88 (2d Cir.), cert. denied, 461 U.S. 945, 103 S.Ct. 2124, 77 L.Ed.2d 1304 (1983); United States v. De Marco, 488 F.2d 828, 832 (2d Cir.1973). If there was such a failure to instruct, but there was sufficient evidence in the record to permit the jury to find the element proven beyond a reasonable doubt, the appropriate remedy is vacation of the conviction and remand for a new trial. See, e.g., United States v. Londono-Villa, 930 F.2d 994, 1001 (2d Cir.1991). If the evidence at trial was insufficient to prove that element, we must reverse and order dismissal of that count. See Burks v. United States, 437 U.S. 1, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978).
Applying these principles to the present case, we conclude that though Javino’s arguments with respect to counts 2 and 3 lack merit, his conviction on count 1 must be reversed and that count dismissed.
1. Count 1
Count 1 of the indictment charged Javino with receipt and possession of a destructive device “made” in violation of the Act, in violation of 26 U.S.C. §§ 5822 and 5861(c). The latter section provides that “It shall be unlawful for any person ... to receive or possess a firearm made in violation of the provisions of this chapter.” This provision does not prohibit the mere possession of an incendiary bomb, but only possession of one that was “made” in violation of some other section of the Act. See, e.g., United States v. Combs, 762 F.2d 1343, 1346 (9th Cir.1985). Section 5822, the provision of chapter 53 that governs the “making” of firearms, provides as follows:
No person shall make a firearm unless he has (a) filed with the Secretary [of the Treasury] a written application, in duplicate, to make and register the firearm on the form prescribed by the Secretary; (b) paid any tax payable on the making and such payment is evidenced by the proper stamp affixed to the original application form; (c) identified the firearm to be made in the application form in such manner as the Secretary may by regulations prescribe; (d) identified himself in the application form in such manner as the Secretary may by regulations prescribe, except that, if such person is an individual, the identification must include his fingerprints and his photograph; and (e) obtained the approval of the Secretary to make and register the firearm and the application form shows such approval. Applications shall be denied if the making or possession of the firearm would place the person making the firearm in violation of law.
26 U.S.C. § 5822. The government contends that this provision applies even to firearms made outside the United States, and that, in any event, the evidence at trial was sufficient to establish that the bomb possessed by Javino had been made in the United States. We reject both contentions.
It is a “long-standing principle of American law ‘that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.’ ” EEOC v. Arabian American Oil Co., — U.S. -, -, 111 S.Ct. 1227, 1230, 113 L.Ed.2d 274 (1991) (quoting Foley Bros. v. Filardo, 336 U.S. 281, 285, 69 S.Ct. 575, 577, 93 L.Ed. 680 (1949)); see also Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 440-41, 109 S.Ct. 683, 690-91, 102 L.Ed.2d 818 (1989); Stowe v. Devoy, 588 F.2d 336, 341 (2d Cir.1978), cert. denied, 442 U.S. 931, 99 S.Ct. 2862, 61 L.Ed.2d 299 (1979); United States v. Cotroni, 527 F.2d 708, 711 (2d Cir.1975), cert. denied, 426 U.S. 906, 96 S.Ct. 2226, 48 L.Ed.2d 830 (1976). This canon of construction “assume[s] that Congress legislates against the backdrop of the presumption against extraterritoriality.” EEOC v. Arabian American Oil Co., 111 S.Ct. at 1230. Thus, “unless there is ‘the affirmative intention of the Congress clearly expressed,’ [Benz v. Compania Naviera Hidalgo, S.A., 353 U.S. 138, 147, 77 S.Ct. 699, 704, 1 L.Ed.2d 709 (1957) ], we must presume it ‘is primarily concerned with domestic conditions.’ ” EEOC v. Arabian American Oil Co., 111 S.Ct. at 1230 (quoting Foley Bros, v. Filardo, 336 U.S. at 285, 69 S.Ct. at 577).
There is no language in the National Firearms Act, nor have we seen any in the legislative history, that would suggest that Congress intended § 5822 to have extraterritorial effect. In contrast, with respect to substances such as narcotics, Congress has expressly sought to give extraterritorial effect to some of its prohibitions. For example, in 21 U.S.C. § 959(c) (1988), Congress prohibited the manufacture or distribution of controlled substances with intent to import into the United States, and stated “[t]his section is intended to reach acts of manufacture or distribution committed outside the territorial jurisdiction of the United States.” No such language appears in the National Firearms Act. In the absence of any language clearly expressing an intent to legislate with respect to firearms made outside of the United States, we decline to impute to Congress the intent that nowhere in the world may a person, without violating § 5822, make a “firearm” without, inter alia, providing his photograph and fingerprints to the United States Secretary of the Treasury, obtaining the approval of the Secretary, and paying a tax to the United States.
Even had Congress intended all foreign manufacturers of firearms to comply with the requirements set out in § 5822, there is substantial question as to whether it could lawfully have done so. Though Congress may prescribe laws concerning conduct outside of the territorial boundaries of the United States “that has or is intended to have substantial effect” within the United States, Restatement (Third) of Foreign Relations Law § 402(l)(c) (1987) (“Restatement”); see, e.g., In re Marc Rich & Co., A.G., 707 F.2d 663, 666 (2d Cir.), cert. denied, 463 U.S. 1215, 103 S.Ct. 3555, 77 L.Ed.2d 1400 (1983); see also Restatement § 402(l)(a), (b), (2), and (3) (setting forth additional accepted bases for extraterritorial application of legislation), it may not regulate such conduct “when the exercise of ... jurisdiction is unreasonable,” Restatement § 403(1); see, e.g., United States v. Davis, 767 F.2d 1025, 1036-37 & n. 22 (2d Cir.1985). The reasonableness of an attempt to exercise extraterritorial control depends on such factors as the extent to which the conduct “has substantial, direct, and foreseeable effect” in the legislating country, and the extent to which other states “may have an interest in regulating the activity.” Restatement §§ 403(2)(a), (g). In light of the substantial interests that other countries have in regulating the manufacture of firearms within their own borders, and the attenuated impact that a foreign-made firearm is likely to have within this country—unless the firearm is imported into the United States—application of § 5822 to all foreign manufacturers would likely be ruled unreasonable.
Nor is the fact that a foreign-made device may gain contact with the United States by entering this country a basis for inferring that Congress intended the “making” section to apply to manufacture outside of the United States, for the Act deals specifically with both the importation of such devices and with the possession of imported devices. Thus, in a different subsection of § 5861 Congress has provided that it is unlawful “to receive or possess a firearm which has been imported or brought into the United States in violation of section 5844,” 26 U.S.C. § 5861(k) (emphasis added); and in § 5844, it has sharply limited the legality of such importation, see 26 U.S.C. § 5844 (permitting importation of firearms for use by the United States or any State, for scientific or research purposes, or for use as a sample by a registered importer or dealer). Further, without any proof of where a firearm was made, the government may prosecute a person who possesses such a device in the United States if it has not been registered with the appropriate United States agency or that is not identified in accordance with federal regulation.
In sum, in light of (1) the traditional presumption against extraterritorial effect discussed above, (2) the absence of any statement by Congress contrary to that presumption in connection with the National Firearms Act, and (3) the presence in the Act of other provisions that expressly reach (a) foreign-made devices that are imported into the United States, or (b) the possession of devices that have not been registered or properly identified regardless of where they were made, we conclude that § 5822 itself governs only devices made in the United States. Accord United States v. Goodson, 439 F.2d 1056, 1059 (5th Cir.1971) (construing essentially same regulatory scheme in Act’s predecessor). Accordingly, in order to establish a violation of §§ 5822 and 5861(c), the government must prove beyond a reasonable doubt that the device in question was made in the United States.
Such proof may, of course, be circumstantial, accord United States v. Goodson, 439 F.2d at 1059 (“a ‘making in the United States’ like any other fact, is provable by direct or circumstantial evidence and the permissible inferences drawn therefrom”), and the government argues in the present case that its proof of manufacture in the United States was sufficient:
The jury had before it the Dole fruit juice jar which had been filled with the flammable liquid, it’s [sic] label still attached. (GA 323—Government Exhibit ID). This one piece of physical evidence alone would have been a sufficient basis from which the jury could conclude (had it been so charged) that the device was made in the United States. Any error, therefore, is harmless.
(Government’s brief on appeal at 21 n. 15.) We disagree. At oral argument of this appeal, the government conceded that it had made no explicit effort to prove where the incendiary device was made, and it acknowledged that the Dole bottle, despite its label, did not bear any indication of its own provenance. Further, even if there had been an indication as to where the bottle itself was made or where it had originally been filled with fruit juice, those facts would have little probative effect as to where the highly combustible liquid had been put into the bottle after its juice contents were gone, or where the detonating device and wick had been added. Since the government has not called to our attention any other evidence in the record as to where the incendiary bomb was made, and our own review persuades us that the government has not overlooked any such evidence, we conclude that, even viewed in the light most favorable to the government, the evidence failed to establish beyond a reasonable doubt that the incendiary bomb possessed by Javino was made in the United States.
Accordingly, proof of an essential element of count 1 was lacking, and Javino’s conviction on that count must be reversed.
2. Counts 2 and 3
Javino’s challenges to the sufficiency of the evidence and instructions on counts 2 and 3 of the indictment do not require extended discussion. Count 2 charged Javino with violation of § 5861(d) of the Act, which makes it unlawful for any person “to receive or possess a firearm which is not registered to him.” 26 U.S.C. § 5861(d). The government is not required to prove that the defendant knew that the incendiary bomb he possessed was not registered. See United States v. Freed, 401 U.S. 601, 91 S.Ct. 1112, 28 L.Ed.2d 356 (1971):
The Act requires no specific intent or knowledge that the [destructive devices] were unregistered.... [T]he only knowledge required to be proved [is] knowledge that the instrument possessed was a firearm.
Id. at 607, 91 S.Ct. at 1117. Dealing with hand grenades, the Freed Court noted that regulations of firearms are adopted in the interest of public safety, and “one would hardly be surprised to learn that possession of hand grenades is not an innocent act.” Id. at 609, 91 S.Ct. at 1118. Likewise, crude varieties of incendiary bombs are well known to be within the scope of the Act. United States v. Cruz, 492 F.2d 217, 219 (2d Cir.) (Molotov cocktail), cert. denied, 417 U.S. 935, 94 S.Ct. 2649, 41 L.Ed.2d 239 (1974). Given the nature of the device possessed by Javino&emdash;a container filled with combustible liquid and having attached to it a large explosive device with a wick, it was not error for the trial court not to instruct the jury that in order to find him guilty on count 2 it must find that he knew the incendiary bomb he possessed was unregistered.
Count 3 charged Javino with receipt and possession of a destructive device not identified by a serial number, in violation of 26 U.S.C. §§ 5861(i) and 5871. Section 5842(c) of the Act states that destructive devices such as bombs are to be identified “in such manner as the Secretary [of the Treasury] may by regulations prescribe,” 26 U.S.C. § 5842(c), and one such regulation permits the maker or importer of such a destructive device to apply to the BATF by letter for authorization to use an identification other than a serial number if imprinting, stamping, or engraving, etc., would be dangerous, see 27 C.F.R. § 179.102 (1991). The court instructed the jury that with respect to count 3 the government was required to prove beyond a reasonable doubt to secure a conviction that “the destructive device was not identified by a serial number as required by the National Firearms Act.” (Trial Transcript p. 229.) Javino challenges this instruction because it did not advise the jury that the bomb could permissibly, under the above regulation, have borne some other form of identification. For a number of reasons, his challenge is meritless.
First, the failure to mention that identification other than by serial number could have been authorized under 27 C.F.R. § 179.102 was an omission as to potentially applicable law, not an omission as to an element of the offense. Since Javino did not request that the court instruct the jury with respect to this regulation, his present challenge is waived. Moreover, even had he requested such a charge, its omission would not have been error, since the court is not required to give an instruction for which there is no evidentiary basis in the record. See, e.g., United States v. Paccione, 949 F.2d 1183, 1200 (2d Cir.1991); United States v. Leonard, 524 F.2d 1076, 1084 (2d Cir.1975), cert. denied, 425 U.S. 958, 96 S.Ct. 1737, 48 L.Ed.2d 202 (1976). Here, the only evidence on the subject was the government’s proof that there had been no application by Javino or Block with respect to the incendiary bomb found in their possession.
B. The Claim of Ineffective Assistance of Counsel
Javino’s claim of ineffective assistance of counsel is principally that his trial attorney (1) failed to request instructions on offense elements as discussed above, (2) failed to request an instruction that Block’s testimony should be “carefully scrutinized,” (3) failed to pursue an available statutory defense, and (4) failed to request a downward departure from the imprisonment range specified in the federal Sentencing Guidelines (“Guidelines”). None of these contentions has merit.
In order to prevail on a claim of ineffective assistance of counsel, a defendant must show both (1) that his attorney’s representation was unreasonable under the “prevailing professional norms,” Strickland v. Washington, 466 U.S. 668, 688, 104 S.Ct. 2052, 2065, 80 L.Ed.2d 674 (1984), and (2) that, but for the deficiency, there is a reasonable probability that “the result of the proceeding would have been different,” id. at 694, 104 S.Ct. at 2068. See, e.g., United States v. Simmons, 923 F.2d 934, 956 (2d Cir.), cert. denied, — U.S. -, 111 S.Ct. 2018, 114 L.Ed.2d 104 (1991); United States v. Matos, 905 F.2d 30, 32 (2d Cir.1990). In assessing reasonableness of performance, we must view the defendant’s claim through the eyes of trial counsel, not through “the distorting effects of hindsight.” Strickland v. Washington, 466 U.S. at 689, 104 S.Ct. at 2065. Actions or omissions by counsel that “ ‘might be considered sound trial strategy’ ” do not constitute ineffective assistance. Id. (quoting Michel v. Louisiana, 350 U.S. 91, 101, 76 S.Ct. 158, 164, 100 L.Ed. 83 (1955)). The merits of Javino’s claims do not pass the Strickland test.
Javino’s first claim, that counsel failed to request instructions to the jury with respect to missing elements of the government’s proof, need not detain us long. To the extent that this claim focuses on counts 2 and 3, it must fail since, as discussed in Part II.A.2. above, the court’s instructions on those counts were correct as given. To the extent that Javino focuses instead on count 1, his ineffectiveness claim is at best superfluous, since we have concluded that the flawed proof requires a reversal of Javino’s conviction on that count.
Javino’s claim that he was denied effective assistance by counsel’s failure to request an instruction that Block’s testimony should be “carefully scrutinized” is frivolous. Javino relied on Block’s testimony as support for his defense that he did not possess the bomb. Thus, Javino’s attorney brought out testimony by Block that Javino had not put the bomb in Block’s car, and that Block had previously told Javino’s attorney that Block himself had constructed the bomb. Javino’s defense rested heavily on Block’s statements, and the allegedly desirable instruction that Block’s testimony should be carefully scrutinized would surely have been counterproductive.
Javino also argues that, instead of attempting to show that Javino had not been in possession of the bomb, counsel should have pursued a technical defense based on a section stating that “[t]he term ‘destructive device’ shall not include any device which is neither designed nor redesigned for use as a weapon,” 26 U.S.C. § 5845(f). This Court has noted that “a device which otherwise appeared to fall within the statute would be exempted from its requirements if it could be shown that it was not designed as a weapon.” United States v. Posnjak, 457 F.2d 1110, 1116 (2d Cir.1972); see United States v. Reindeau, 947 F.2d 32 (2d Cir.1991). Whatever the availability of such reasoning in the present case, we decline to second-guess counsel’s strategic decision to pursue the lack-of-possession defense in preference to attempting to persuade the jury, in the face of, inter alia, the evidence as to Javino’s suspicious prearrest behavior and his death threats to Constantino and Fitzgerald, that the highly explosive bomb was not designed as a weapon.
Finally, there is no merit in Javi-no’s contention that counsel’s performance was constitutionally defective because of his failure to request a downward departure from the 21-27-month imprisonment range prescribed by the Guidelines on account of the fact that his wife was expecting twins or the fact that Block, who pleaded guilty to a state-court misdemeanor charge related to these events, received only a six-month sentence. “Family ties and responsibilities ... are not ordinarily relevant in determining whether a sentence should be outside the applicable guideline range.” Guidelines § 5H1.6. And the fact that a coparticipant in the offense has received a lower sentence is not a basis for a downward departure even if the lower sentence is imposed in the federal proceeding, see, e.g., United States v. Joyner, 924 F.2d 454, 459-61 (2d Cir.1991), much less in a state proceeding.
CONCLUSION
We have considered all of Javino’s arguments on this appeal and, except as indicated above, have found them to be without merit. The judgment of conviction on counts 2 and 3 is affirmed; as to count 1, the judgment is reversed, and the matter is remanded for dismissal of that count.
Question: What is the nature of the first listed respondent?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
sc_threejudgefdc
|
B
|
What follows is an opinion from the Supreme Court of the United States. Your task is to determine whether the case was heard by a three-judge federal district court. Beginning in the early 1900s, Congress required three-judge district courts to hear certain kinds of cases. More modern-day legislation has reduced the kinds of lawsuits that must be heard by such a court. As a result, the frequency is less for the Burger Court than for the Warren Court, and all but nonexistent for the Rehnquist and Roberts Courts.
ILLINOIS v. ABBOTT & ASSOCIATES, INC., et al.
No. 81-1114.
Argued November 29, 1982
Decided March 29, 1983
Stevens, J., delivered the opinion for a unanimous Court. Brennan, J., filed a concurring opinion, in which O’Connor, J., joined., post, p. 573.
Thomas M. Genovese, Assistant Attorney General of Illinois, argued the cause for petitioner. With him on the briefs were Tyrone C. Fahner, Attorney General, and Thomas J. DeMay and Thomas S. Malciauskas, Assistant Attorneys General. Richard G. Wilkins argued the cause pro hac vice for the United States, respondent under this Court’s Rule 19.6, in support of petitioner. With him on the briefs were Solicitor General Lee, Assistant Attorney General Baxter, Deputy Solicitor General Wallace, and Robert B. Nicholson.
Michael B. Nash argued the cause for respondents and filed a brief for respondents Climatemp, Inc., et al. Jerold S. Solovy, Barry Sullivan, and Thomas E. Bindley filed a brief for respondents Abbott & Associates, Inc., et al. Mark Crane and Wm. Carlisle Herbert filed a brief for respondents Inland Heating & Air Conditioning Co. et al. Arthur C. Chapman filed a brief for undisclosed respondents.
A brief of amici curiae urging reversal was filed for the State of Alabama et al. by Stephen H. Sachs, Attorney General of Maryland, and Charles 0. Monk II and Robert W. Hesselbacher, Jr., Assistant Attorneys General; Charles A. Graddick, Attorney General of Alabama, and Susan Beth Farmer, Assistant Attorney General; Wilson L. Condon, Attorney General of Alaska, and Louise E. Ma, Assistant Attorney General; Robert K. Corbin, Attorney General of Arizona; Steve Clark, Attorney General of Arkansas, and David L. Williams, Deputy Attorney General; George Deukmejian, Attorney General of California, Sanford N. Gruskin, Assistant Attorney General, and Linda L. Tedeschi, Deputy Attorney General; J. D. MacFarlane, Attorney General of Colorado, and Thomas P. McMahon, Assistant Attorney General; Carl R. Ajello, Attorney General of Connecticut, and Robert M. hanger and Steven M. Rutstein, Assistant Attorneys General; Richard S. Gebelein, Attorney General of Delaware, and Vincent M. Amberly, Deputy Attorney General; Judith Rogers, Corporation Counsel of the District of Columbia, Charles Reischel, Deputy Corporation Counsel, and Timothy J. Shearer, Assistant Corporation Counsel; Jim Smith, Attorney General of Florida, and Bill L. Bryant, Jr., Assistant Attorney General; Tany S. Hong, Attorney General of Hawaii, and Sonia Faust, Deputy Attorney General; Linley E. Pearson, Attorney General of Indiana, and Frank A. Baldwin, Assistant Attorney General; Thomas J. Miller, Attorney General of Iowa, and JohnR. Perkins, Assistant Attorney General; Robert T. Stephan, Attorney General of Kansas, and Wayne E. Hundley, Deputy Attorney General; Steven L. Beshear, Attorney General of Kentucky, and James M. Ringo, Assistant Attorney General; William J. Guste, Jr., Attorney General of Louisiana, and John R. Flowers, Jr., Assistant Attorney General; James E. Tierney, Attorney General of Maine, and Cheryl Harrington, Senior Assistant Attorney General; Francis X. Bellotti, Attorney General of Massachusetts, and Alan L. Kovacs, Assistant Attorney General; Frank J. Kelley, Attorney General of Michigan, and Edwin M. Bladen, Assistant Attorney General; Warren Spannaus, Attorney General of Minnesota, and Stephen P. Kilgriff, Special Assistant Attorney General; Bill Allain, Attorney General of Mississippi, and Robert E. Sanders, Special Assistant Attorney General; John Ashcroft, Attorney General of Missouri, and William Newcomb, Assistant Attorney General; Mike Greely, Attorney General of Montana, and Jerome J. Cate; Paul L. Douglas, Attorney General of Nebraska, and Dale A. Comer, Assistant Attorney General; Richard H. Bryan, Attorney General of Nevada, and Don Christensen, Deputy Attorney General; Gregory H. Smith, Attorney General of New Hampshire, and Edward E. Lawson; James R. Zazzali, Attorney General of New Jersey, Charles D. Sapienza, and Laurel A. Price, Deputy Attorney General; Jeff Bingaman, Attorney General of New Mexico, and James J. Wechsler, Assistant Attorney General; Rufus L. Edmisten, Attorney General of North Carolina, H. A. Cole, Jr., Special Deputy Attorney General, and Fred R. Gamin, Assistant Attorney General; Robert 0. Wefald, Attorney General of North Dakota, and Gary Lee, Assistant Attorney General; William J. Brown, Attorney General of Ohio, and Eugene F. McShane; Jan Eric Cartwright, Attorney General of Oklahoma, and Gary Gardenhire, Assistant Attorney General; Dave Frohnmayer, Attorney General of Oregon, and William F. Gary, Solicitor General; Dennis J. Roberts II, Attorney General of Rhode Island, and Patrick J. Quinlan, Assistant Attorney General; Daniel R. McLeod, Attorney General of South Carolina, and John M. Cox, Assistant Attorney General; Mark V. Meierhenry, Attorney General of South Dakota, and Dennis R. Holmes, Assistant Attorney General; William M. Leech, Jr., Attorney General of Tennessee, and William J. Haynes, Jr., Deputy Attorney General; Mark White, Attorney General of Texas, and Katie Bond, Assistant Attorney General; David L. Wilkinson, Attorney General of Utah, and Mark K. Buchi, Assistant Attorney General; John J. Easton, Jr., Attorney General of Vermont, and Glenn A. Jarrett, Assistant Attorney General; Gerald L. Baliles, Attorney General of Virginia, Elizabeth B. Lacy, Deputy Attorney General, and Bertram M. Long and Craig T. Merritt, Assistant Attorneys General; Kenneth 0. Eikenberry, Attorney General of Washington, and John R. Ellis, Senior Assistant Attorney General; Chauncey H. Browning, Attorney General of West Virginia, and Charles G. Brown, Deputy Attorney General; Bronson C. La Follette, Attorney General of Wisconsin, and Michael L. Zaleski, Assistant Attorney General; and Steven F. Freudenthal, Attorney General of Wyoming, and Gay Vanderpoel, Assistant Attorney General.
Arthur M. Handler filed a brief for Cuisinarts, Inc., as amicus curiae urging affirmance.
Dee J. Kelly, Reese Harrison, Robert Travis, Frank McCown, Stanley E. Neely, Wilson W. Herndon, Timothy R. McCormick, and Michael P. Carnes filed a brief for certain appellants in In re Grand Jury Proceedings as amici curiae.
Justice Stevens
delivered the opinion of the Court.
The Attorney General of Illinois asserts a statutory right of access to transcripts, documents, and other materials gathered or generated by two federal grand juries during their investigations of alleged violations of the federal antitrust laws. He contends that § 4F(b) of the Clayton Act, 90 Stat. 1395, 15 U. S. C. § 15f(b), enacted as part of Title III of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Act), makes it unnecessary for him to meet the “particularized need” standard generally required under Rule 6(e) of the Federal Rules of Criminal Procedure in order to obtain access to grand jury materials. Disagreeing with two other Courts of Appeals, the Seventh Circuit rejected this contention. We granted certiorari to resolve the conflict, 455 U. S. 1015 (1982), and now affirm.
I
On January 31, 1980, the State of Illinois filed a petition in the United States District Court for the Northern District of Illinois seeking disclosure of transcripts and documents generated during two federal grand jury investigations of alleged bid-rigging in the construction trades in Illinois. These investigations had resulted in the return of three separate indictments naming 59 defendants. At the time the State filed its petition, most of the defendants had entered pleas of nolo contendere to the federal charges and one had been found guilty by a jury, but eight defendants were still awaiting trial. The Justice Department had refused the State’s request for the grand jury materials, explaining that they could not be disclosed without a court order under Rule 6(e) of the Federal Rules of Criminal Procedure.
The State advised the District Court that it had already initiated civil class actions against 86 defendants, charged in the indictments or identified as unindicted co-conspirators, to recover damages based on federal antitrust violations. The State’s petition invoked § 4F(b) and Rule 6(e) in support of disclosure. It further stated that “the materials requested are extremely relevant and material to Plaintiff’s causes; their disclosure will insure and promote efficient and economical utilization of scarce judicial and taxpayers resources, and will also obviate the need for duplicative and redundant discovery... App. 13. The Department of Justice supported the State’s petition. Certain defendants in the civil suits and others who had testified before the grand juries intervened to oppose disclosure.
The District Court first considered the State’s claim that it had a statutory right of access under § 4F(b) without making any showing of compelling or particularized need. The court concluded that, in response to a § 4F(b) request, the Justice Department was free to disclose documents that were independently acquired by the Executive Branch and voluntarily presented to the grand jury. But it held that transcripts of grand jury testimony and other materials acquired by the grand jury through the use of its subpoena power were not part of the “investigative files” of the Attorney General of the United States within the meaning of the Act. Moreover, the court found nothing in the legislative history of the Act to suggest that Congress intended either to authorize “unmonitored disclosure of purely grand jury materials” without a court order under Rule 6(e), or to modify the standard traditionally applied under Rule 6(e) itself.
The District Court then explained why the record as then developed would not justify disclosure under Rule 6(e) without reference to §4F(b). Noting the absence of any special showing of need for access to the grand jury materials, the scope of the material otherwise available to the plaintiffs, and the interests in grand jury secrecy that survived the termination of criminal proceedings, the District Court denied all of the petitions for disclosure. The denial, however, was without prejudice to renewed requests under Rule 6(e) after discovery efforts created a basis for more narrowly focused requests showing “particularized needs.”
The State of Illinois filed a timely appeal to the United States Court of Appeals for the Seventh Circuit. On appeal the State did not contend that its petition had satisfied the showing of particularized need normally required under Rule 6(e). Instead, it presented the issue that had been finally resolved by the District Court’s order: whether § 4F(b) gives the state attorney general a special right of access to grand jury materials that is independent of or that modifies the limitations that were imposed by Rule 6(e) in 1976 when the Act became law. Noting that the plain language of the Act authorizes disclosure only “to the extent permitted by law,” and that the legislative history affirmatively indicates Congress’ intent to preserve then-existing limitations on access to grand jury materials, the Court of Appeals affirmed. In re Illinois Petition to Inspect and Copy Grand Jury Materials, 659 F. 2d 800 (1981).
II
Section 4F(a) of the Clayton Act, 15 U. S. C. § 15f(a), provides that, whenever the Attorney General of the United States has brought an action under the antitrust laws, and he has reason to believe that any state attorney general would be entitled to bring a federal action based substantially on the same alleged violation, he shall promptly give written notification to that official. Under §4F(b), 15 U. S. C. § 15f(b), in order to assist a state attorney general in evaluating this notice or in bringing an action, the Attorney General of the United States “shall, upon request by such State attorney general, make available to him, to the extent permitted by law, any investigative files or other materials which are or may be relevant or material to the actual or potential cause of action under this Act.”
The plain language of §4F(b) requires us to evaluate the legal context in which Congress legislated in 1976. The statute expressly mandates disclosure of investigative files and other materials only “to the extent permitted by law.” It is therefore appropriate to examine the extent to which, at the time the Act was passed, federal law permitted the Attorney General of the United States to disclose matters occurring before a federal grand jury to a state attorney general.
Since 1946 the disclosure of grand jury minutes has been governed by Rule 6(e) of the Federal Rules of Criminal Procedure. In so many words, the Rule establishes a “General Rule of Secrecy,” a knowing violation of which “may be punished as a contempt of court.” The Rule provides that grand jury transcripts shall remain in the custody of the attorney for the Government “unless otherwise ordered by the court in a particular case.” There is only one exception to the general prohibition against disclosure without prior court approval, but that exception is limited to Federal Government personnel performing a specified federal law enforcement function. Plainly Rule 6(e) does not permit the Attorney General of the United States to disclose any grand jury proceedings to a state attorney general unless he is directed to do so by a court.
The court, however, is authorized by Rule 6(e)(3)(C) to permit certain disclosures that are otherwise prohibited by the “General Rule of Secrecy.” The scope of that authority has been delineated in a series of cases setting forth the standard of “particularized need.” We need not delineate the precise contours of that standard in this case, because the State made no attempt to make any such showing in the District Court, see n. 8, swpra, and has consistently maintained that it need not shoulder that burden.
Thus, under the law as it existed in 1976, two propositions were clear: (1) a state attorney general could not obtain access to federal grand jury proceedings without federal court approval; and (2) the State could not secure such approval merely by alleging that the materials were relevant to an actual or potential civil antitrust action. At the time the Act was passed in 1976, a blanket disclosure request comparable to the one at issue in this case would have been denied because it was not permitted by law. The State does not suggest that there has been any change in the law since 1976 that affects its right to disclosure. It therefore follows from the plain language of the Act that the State Attorney General is not entitled to the disclosure he seeks in this case.
I — I HH h — i
If the text of §4F(b) left any doubt concerning its recognition of the “General Rule of Secrecy” for grand jury mater i-als, that doubt would be removed by its legislative history. First, Congress considered and rejected a proposed section that would have specifically granted civil antitrust plaintiffs a right of access to grand jury materials after completion of federal civil or criminal proceedings. As reported by the Senate Judiciary Committee, the provision eliminated the particularized-need requirement and permitted disclosure, subject to court-imposed conditions, upon payment of reasonable costs. The proposed sweeping invasion of grand jury secrecy drew substantial criticism from a number of Senators. A floor amendment limited the section’s scope, and as amended it was adopted by the Senate, but at the informal House-Senate conference the House conferees objected and the Senate’s provision was dropped. The net effect of these deliberations was to leave the law applicable to grand jury-materials unchanged.
Second, a specific explanation of §4F(b) by Senator Ab-ourezk, the floor manager of the legislation, confirms the conclusion that Congress did not intend to change existing law concerning grand jury materials. The section was included in the compromise bill accepted by an informal House-Senate conference. After Senator Hruska expressed his concern that § 4F(b) might require the Department of Justice to act as “a massive document distribution center for the benefit of State officials,” Senator Abourezk explained:
“The section specifically limits the Attorney General’s power to release documents to whatever his powers are under existing law. Under existing law, he cannot turn over materials given in response to a grand jury demand or to a civil investigative demand. Therefore, the section is limited by existing law to cases where materials were turned over voluntarily.” 122 Cong. Rec. 29160 (1976).
Senator Abourezk’s interpretation of this provision was not questioned.
Third, the Act’s treatment of material obtained by the Government in response to Civil Investigative Demands (CID’s) supports our interpretation of §4F(b). The Act increases the Attorney General’s CID powers, but mandates that materials obtained in this manner be kept strictly confidential. CID materials may not be disclosed to persons outside the Federal Government without the consent of the provider. 15 U. S. C. § 1313 (1976 ed. and Supp. V). This requirement was imposed to safeguard the rights of individuals under investigation and to protect witnesses from retaliation. Since those reasons also underlie the traditional secrecy accorded to the grand jury, it would be anomalous for the same Congress that placed stringent limits on CID materials silently to have abrogated grand jury secrecy by permitting wholesale disclosure.
HH C
Finally, the State argues that the Act implements a general policy of encouraging federal/state cooperation and giving state attorneys general an important role in the enforcement of the antitrust laws. According to the State, this broad legislative goal would be served by facilitating the State’s access to grand jury materials. The State contends that virtually all of the Federal Government’s investigations of core Sherman Act violations — such as price fixing and bid rigging — are conducted from the outset by means of grand juries. Therefore, as in this case, a narrow reading of § 4F(b) would severely limit the amount of additional disclosure to state attorneys general. Further, the State asserts, a “particularized need” standard would be difficult to satisfy before a State has filed a civil action and attempted civil discovery — a stage when §4F(b) is intended to provide assistance to the State.
However correct these assertions may be, they do not authorize us to add specific language that Congress did not include in a carefully considered statute. Congress, of course, has the power to modify the rule of secrecy by changing the showing of need required for particular categories of litigants. But the rule is so important, and so deeply rooted in our traditions, that we will not infer that Congress has exercised such a power without affirmatively expressing its intent to do so. The general goals of enhancing federal-state cooperation in antitrust enforcement, and encouraging more state lawsuits against price fixers, are not sufficient. The statute as enacted by Congress simply does not authorize the Attorney General to turn over the entire investigative record of a federal antitrust grand jury to a state attorney general who has not complied with the judicially developed standards implementing Rule 6(e). Because the disclosure requested by the State in this case is not permitted by Rule 6(e) on the basis of the showing it made to the District Court, the judgment of the Court of Appeals is affirmed.
It is so ordered.
United States v. Colonial Chevrolet Corp., 629 F. 2d 948 (CA4 1980) (placing the burden of justifying nondisclosure on the opposing party), cert, denied, 450 U. S. 913 (1981); and United States v. B. F. Goodrich Co., 619 F. 2d 798 (CA9 1980) (allowing disclosure on a showing of “relevance”). Contra, In re Grand Jury Investigation of Cuisinarts, Inc., 665 F. 2d 24 (CA2 1981) (§ 4F(b) did not change the standard of “particularized need” for state attorneys general), cert, pending, No. 81-1595.
In June 1978, 18 corporations, 13 individuals, and a labor union were charged with conspiring to rig bids on public sheet metal projects in the Chicago area. United States v. Climatemp, Inc., 78 CR 388 (ND Ill.) On January 31, 1979, 21 corporations and 6 individuals were indicted for conspiring to rig bids on piping construction projects in the same area. United States v. Borg, Inc., 79 CR 67 (ND Ill.) (felony); United States v. S. J. Reynolds Co., Inc., 79 CR 66 (ND Ill.) (misdemeanor).
The State’s memorandum in support of its petition, filed on January 31, 1980, advised the court that eight defendants were scheduled to begin trial on February 4,1980. Four of these were subsequently acquitted. On request of the Justice Department, the State held its petition in abeyance pending completion of the trial.
App. 4 (Justice Department notice to the Attorney General of Illinois that indictments had been returned); id., at 5, 7 (state requests for investigative materials relating to the indictments). In response, the Justice Department furnished 19 pages of staff memoranda. It advised the State that, with respect to other materials within the scope of the State’s request, the Department would support the State’s request for court-ordered disclosure. Id., at 9-10.
Rule 6(e) provides, in part:
“Rule 6. The Grand Jury
“(e) Recording and Disclosure of Proceedings.
“(1) Recording of proceedings.... The recording or reporter’s notes or any transcript prepared therefrom shall remain in the custody or control of the attorney for the government unless otherwise ordered by the court in a particular case.
“(2) General rule of secrecy. A grand juror, an interpreter, a stenographer, an operator of a recording device, a typist who transcribes recorded testimony, an attorney for the government, or any person to whom disclosure is made under paragraph (3)(A)(ii) of this subdivision shall not disclose matters occurring before the grand jury, except as otherwise provided for in these rules.... A knowing violation of Rule 6 may be punished as a contempt of court.
“(3) Exceptions.
“(C) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury may also be made—
“(i) when so directed by a court preliminarily to or in connection with a judicial proceeding; or
“(ii) when permitted by a court at the request of the defendant, upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury.
“If the court orders disclosure of matters occurring before the grand jury, the disclosure shall be made in such manner, at such time, and under such conditions as the court may direct.”
Section 4F of the Clayton Act, as added, 90 Stat. 1395, 15 U. S. C. § 15f, provides:
“(a) Whenever the Attorney General of the United States has brought an action under the antitrust laws, and he has reason to believe that any State attorney general would be entitled to bring an action under this Act based substantially on the same alleged violation of the antitrust laws, he shall promptly give written notification thereof to such State attorney general.
“(b) To assist a State attorney general in evaluating the notice or in bringing any action under this Act, the Attorney General of the United States shall, upon request by such State attorney general, make available to him, to the extent permitted by law, any investigative files or other materials which are or may be relevant or material to the actual or potential cause of action under this Act.”
Similar petitions were filed on behalf of other parties, including local governmental entities and private persons, who had also filed treble-damages actions against the defendants. The Justice Department took no position with regard to these petitions. The District Court consolidated the various petitions for purposes of argument and decision.
“Petitioners have simply requested the release to them of all of the grand jury material. In their quest for information grand juries often acquire reams of documents and hours of testimony later to be found irrelevant to the investigation or the final charge. Its wholesale disclosure could be embarrassing, if not destructive of third parties or of unindicted individuals and corporations concerned when witnesses are called upon to testify or furnish evidence which involves them. This is one of the principal reasons why grand jurors are sworn to secrecy. It is the duty of the court in following 6(e) to protect from public scrutiny and injury such individuals and corporations. Petitioners after having done little more than filing a suit, seek an all-encompassing, unparticularized general type of full disclosure which by the very nature of the request would defeat the spirit and rule of Procter & Gamble and Douglas Oil [United States v. Procter & Gamble Co., 356 U. S. 677 (1958); Douglas Oil Co. v. Petrol Stops Northwest, 441 U. S. 211 (1979)]. Their request offends the common-law concern for the traditional protection of the innocent that has been built into our grand jury system from its earliest conception.” App. to Pet. for Cert. 37a-38a.
These comments carry special weight because they were made by the Chief Judge of a large metropolitan District, who had acquired a unique familiarity with the problems associated with the supervision of the conduct of grand juries.
Because the District Court’s order finally disposed of the State Attorney General’s claim of a statutory right of access to grand jury materials without a showing of particularized need, we are satisfied that the order was appealable under 28 U. S. C. § 1291. The court’s acknowledgment that the State might subsequently seek disclosure of particular materials under a “particularized need” standard does not deprive the order of finality. The ruling at issue in this case was made by the Chief Judge of the Northern District of Illinois in a separately docketed proceeding, see App. to Pet. for Cert. 40a; the opinion contemplates that further disclosure requests would be filed with the District Judges presiding over the State’s civil antitrust actions, id., at 39a. See Illinois v. Sarbaugh, 552 F. 2d 768, 773-774 (CA7 1977); cf. Douglas Oil Co. v. Petrol Stops Northwest, supra, at 231-233 (Rehnquist, J., concurring) (the District Court’s order granting access to grand jury minutes “disposes of all of the contentions of the parties and terminates a separate proceeding pending before the grand jury court” and is therefore appealable as a “final decisio[n]” under 28 U. S. C. § 1291).
The parties have briefed and argued, as a separate question, whether grand jury files are included in the “investigative files or other materials” covered by § 4F(b). Respondents suggest that, because the section imposes upon the Attorney General an automatic and mandatory obligation to disclose the materials to which it does apply, it simply does not apply to grand jury materials — which can be disclosed only if authorized by a court. Given our reading of the statute’s proviso that disclosure shall be made “to the extent permitted by law,” we do not need to address this question separately.
See Rule 6(e)(2), quoted in n. 5, supra. The General Rule of Secrecy codifies a longstanding rule of common law which we have recognized as “an integral part of our criminal justice system.” Douglas Oil Co. v. Petrol Stops Northwest, supra, at 218, n. 9. Several distinct interests are served by safeguarding the confidentiality of grand jury proceedings. See 441U. S., at 219, and n. 10. Even after the conclusion of a particular grand jury’s investigation, continued secrecy protects the reputations of the innocent and safeguards witnesses from possible retaliation. In addition, stringent protection of the secrecy of completed grand jury investigations may be necessary to encourage persons to testify fully and freely before future grand juries. Id., at 222. More generally, grand jury secrecy has traditionally been invoked to justify the limited procedural safeguards available to witnesses and persons under investigation.
Rule 6(e)(1).
Rule 6(e)(3)(A)-(B).
See Douglas Oil Co., 441 U. S., at 221-224. “Parties seeking grand jury transcripts under Rule 6(e) must show that the material they seek is needed to avoid a possible injustice in another judicial proceeding, that the need for disclosure is greater than the need for continued secrecy, and that their request is structured to cover only material so needed.” Id., at 222 (footnote omitted); see also United States v. Procter & Gamble Co., 356 U. S., at 682; Pittsburgh Plate Glass Co. v. United States, 360 U. S. 395, 398-399 (1959); cf. Dennis v. United States, 384 U. S. 855 (1966).
The State’s petition sought all materials gathered or generated by the grand jury investigations. In this Court, the State concedes that the district court may properly exercise its discretion to determine whether to disclose the requested materials, but it proposes “a standard less restrictive than particularized need.” See Brief for Petitioner 30-33, 42-43. Under this standard the district court would determine whether disclosure would undermine an ongoing or potential federal enforcement proceeding and whether countervailing interests require secrecy, and it could impose appropriate protective limitations upon disclosure. Ibid. The United States, as respondent under this Court’s Rule 19.6, in support of petitioner proposes a similar test. See Brief for United States 24-28. However such a standard might be formulated, it differs from the “particularized need” standard, which is expressly preserved by § 4F(b). But in rejecting such a rule, we stress that under the particularized-need standard, the district court may weigh the public interest, if any, served by disclosure to a governmental body — along with the requisite particularized need — in determining whether “the need for disclosure is greater than the need for continued secrecy.” Douglas Oil Co., supra, at 222.
The State does not directly argue that, apart from § 4F(b), the law permits it to obtain grand jury materials without a showing of particularized need. At oral argument the Assistant Attorney General expressed uncertainty regarding the legal standard that would apply in the absence of § 4F(b). Tr. of Oral Arg. 10. Cf. Brief for United States 15, n. 10 (expressing no opinion on the standard applicable to State requests for grand jury materials in the absence of § 4F(b)).
Although we examine the law in 1976 as an aid to interpreting the intent of the Congress that enacted § 4F(b), the terms of the Act would, of course, be satisfied if a requested disclosure is “permitted by law” at the time the request is made.
See S. Rep. No. 94-803, pp. 4, 33-35, 128, 152 (1976) (§202(0 of S. 1284). The Senate Judiciary Committee bill also authorized the Attorney General to give the Federal Trade Commission access to these grand jury materials. Id., at 31-32 (§202(k)).
See, e. g., id., at 203-204 (minority views of five members of Judiciary Committee); 122 Cong. Rec. 15318 (1976) (Sen. Thurmond); id., at 15835 (Sen. Allen); id., at 17428-17431 (Sen. Tower). The proposal was also opposed by the administration. Id., at 17038.
One of the leading opponents of § 212(1), Senator Allen, introduced a substitute amendment, defeated by the Senate, which was virtually identical in wording to the section in the House bill that was later enacted into law as § 4F(b). See id., at 15852-15853,16824-16825,17194. Senator Allen’s support of this provision, coupled with his strong opposition to § 212(1), indicates that § 4F(b) was not intended to abrogate traditional protections of grand jury secrecy.
The amendment limited disclosure to cases in which a defendant had entered a plea of guilty or nolo contendere, and permitted only the disclosure of material provided by that defendant, not by third parties. Id., at 15917-15918, 16922-16923. Amended § 202(1) was part of the bill adopted by the Senate on June 10, 1976. Id., at 17572.
Id., at 29147. After the conference, Senator Abourezk, the Senate floor manager of the bill, prepared a chart comparing the Senate and House versions. The chart showed that S. 1284 gave private plaintiffs and the FTC access to grand jury materials, and that the House version had no comparable provisions. In another section it stated that the House bill provided that state attorneys general may obtain investigative files or other materials from the United States Attorney General “to the extent permitted by law,” and noted that the Senate bill had no such provision. See id,., at 29151-29152. The chart’s structure and wording strongly suggest that § 4F(b) did not contemplate disclosure of grand jury materials to state attorneys general.
Id., at 29144.
This statement in floor debate is consistent with language in a House Committee Report on an earlier version of the statute, which explains that the Justice Department’s investigative files “are to be made available except where specifically prohibited.” H. R. Rep. No. 94-499, p. 17 (1975). This language merely paraphrases the plain language of the statute; Rule 6(e) quite specifically prohibits disclosure of grand jury documents save under specified conditions.
Limited CID authority was conferred upon the Attorney General by the Antitrust Civil Process Act of 1962, Pub. L. 87-664, 76 Stat. 548. The Attorney General’s powers were considerably expanded by Title I of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, codified at 15 U. S. C. § 1311 et seq. (1976 ed. and Supp. V).
See H. R. Rep. No. 94-1343, pp. 3, 8, 18 (1976); S. Rep. No. 94-803, supra n. 18, at 30-31; 122 Cong. Rec. 29341 (1976) (explanation of House-Senate compromise bill by Sen. Hart).
Indeed, the House Report explains the Justice Department’s need for increased CID powers by canvassing the inadequacy of each alternative, including grand jury investigations, for civil enforcement purposes.
“The Division might try to empanel a grand jury, as it currently does in criminal antitrust investigations, and use the sweeping, compulsory powers of that investigative body to unearth evidence of civil violations. But the U. S. Supreme Court has virtually eliminated the Antitrust Division’s power to utilize the grand jury as a civil investigative tool. In United States v. Procter & Gamble, 356 U. S. 677 (1958), Justice Douglas concluded that ‘if the prosecution were using... criminal procedures to elicit evidence in a civil case, it would be flouting the policy of the law.’ That is because such a use of the grand jury would subvert the Division’s policy of proceeding criminally only against flagrant, willful offenses, and would debase the law ‘by tarring respectable citizens with the brush of crime when their deeds involve no criminality.’ ” H. R. Rep. No. 94-1343, supra, at 5.
Brief for Petitioner 14-15.
Although the State cites passages from hearings to show that Congress was aware of the Justice Department’s use of the grand jury, id., at 16, n. 4, these passages stressed that grand jury investigations were of limited usefulness in civil enforcement and urged the adoption of strengthened CID powers.
Congress has, on occasion, done precisely that. In 1966 it approved amendments to Rule 16 that gave defendants a right to obtain copies of their prior statements before grand juries; Fed. Rule Crim. Proc. 16(a)(1)(A). In 1977, it amended Rule 6(e) to permit disclosure of grand jury materials to personnel assisting United States Government attorneys in the enforcement of federal criminal law. Fed. Rule Crim. Proc. 6(e)(3)(A). See also 18 U. S. C. § 3500(e)(3) (Jencks Act).
The 1976 legislation was designed to enhance the effectiveness of antitrust enforcement on behalf of small consumers. The availability of information to antitrust plaintiffs, however, was not at the forefront of legislative deliberations. Congress focused on the difficulty of achieving class certification of consumer actions under Rule 23 of the Federal Rules of Civil Procedure and the complexity of measuring and distributing damages in such cases. See generally H. R. Rep. No. 94-499, supra n. 23, at 3-8; S. Rep. No. 94-803, supra n. 18, at 6-7, 39-40. To remedy these problems, the 1976 statute permits state attorneys general the right to institute parens patriae suits on behalf of state residents, 15 U. S. C. § 15c; exempts such suits from the class-action requirements of Rule 23, § 15c(a); and allows damages in these suits to be computed through aggregation techniques, § 15d. Therefore the State exaggerates when it asserts that the 1976 Act’s purposes would be frustrated if Rule 6(e) continued to be
Question: Was the case heard by a three-judge federal district court?
A. Yes
B. No
Answer:
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sc_casedisposition
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C
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the disposition of the case, that is, the treatment the Supreme Court accorded the court whose decision it reviewed. The information relevant to this variable may be found near the end of the summary that begins on the title page of each case, or preferably at the very end of the opinion of the Court. For cases in which the Court granted a motion to dismiss, consider "petition denied or appeal dismissed". There is "no disposition" if the Court denied a motion to dismiss.
NATIONAL LABOR RELATIONS BOARD v. SERYETTE, INC.
No. 111.
Argued February 19, 1964.
Decided April 20, 1964.
Solicitor General Cox argued the cause for petitioner. With him on the brief were Philip B, Heymann, Arnold Ordman, Dominick L. Manoli and Norton J. Come.
Stanley E. Tobin argued the cause for respondent. With him on the briefs was Carl M. Gould.
Duane B. Beeson filed a brief for the American Federation of Television and Radio Artists et al., as amici curiae, urging reversal.
Mr. Justice Brennan
delivered the opinion of the Court.
Respondent Servette, Inc., is a wholesale distributor of specialty merchandise stocked by retail food chains in Los Angeles, California. In 1960, during a strike which Local 848 of the Wholesale Delivery Drivers and Salesmen’s Union was conducting against Servette, the Local’s representatives sought to support the strike by asking managers of supermarkets of the food chains to discontinue handling merchandise supplied by Servette. In most instances the representatives warned that handbills asking the public not to buy named items distributed by Servette would be passed out in front of stores which refused to cooperate, and in a few cases handbills were in fact passed out. A complaint was issued on charges by Servette that this conduct violated subsections (i) and (ii) of § 8 (b) (4) of the National Labor Relations Act, as amended, which, in relevant part, provide that it is an unfair labor practice for a union
“(i) ... to induce or encourage any individual employed by any person ... to engage in ... a refusal in the course of his employment to . . . handle . . . commodities or to perform any services; or”
“(ii) to threaten, coerce, or restrain any person . . . where in either case an object thereof is—
“(B) forcing or requiring any person to cease . . . dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person . . .
Provided further, That for the purposes of this paragraph (4) only, nothing contained in such paragraph shall be construed to prohibit publicity, other than picketing, for the purpose of truthfully advising the public . . . that a product or products are produced by an employer with whom the labor organization has a primary dispute and are distributed by another employer . . . .”
The National Labor Relations Board dismissed the complaint. The Board adopted the finding of the Trial Examiner that “the managers of McDaniels Markets were authorized to decide as they best could whether to continue doing business with Servette in the face of threatened or actual handbilling. This, a policy decision, was one for them to make. The evidence is persuasive that the same authority was vested in the managers of Kory.” 133 N. L. R. B. 1506. The Board held that on these facts the Local’s efforts to enlist the cooperation of the supermarket managers did not constitute inducement of an “individual” within the meaning of that term in subsection (i); the Board held further that the handbilling, even if constituting conduct which “threaten [s], coerce [s], or restraints] any person” under subsection (ii), was protected by the quoted proviso to amended § 8 (b) (4). 133 N. L. R. B. 1501. The Court of Appeals set aside the Board’s order, holding that the term “individual” in subsection (i) was to be read literally, thus including the supermarket managers, and that the distributed products were not “produced” by Servette within the meaning of the proviso, thus rendering its protection unavailable. 310 F. 2d 659. We granted certiorari, 374 U. S. 805. We reverse the judgment of the Court of Appeals.
The Court of Appeals correctly read the term “individual” in subsection (i) as including the supermarket managers, but it erred in holding that the Local’s attempts to enlist the aid of the managers constituted inducement of the managers in violation of the subsection. The 1959 statute amended §8 (b)(4)(A) of the National Labor Relations Act, which made it unlawful to induce or encourage “the employees of any employer” to strike or engage in a “concerted” refusal to work. We defined the central thrust of that statute to be to forbid “a union to induce employees to strike against or to refuse to handle goods for their employer when an object is to force him or another person to cease doing business with some third party.” Local 1976, Carpenters’ Union v. Labor Board, 357 U. S. 93, 98. In the instant case, however, the Local, in asking the managers not to handle Servette items, was not attempting to induce or encourage them to cease performing their managerial duties in order to force their employers to cease doing business with Servette. Rather, the managers were asked to make a managerial decision which the Board found was within their authority to make. Such an appeal would not have been a violation of § 8 (b) (4) (A) before 1959, and we think that the legislative history of the 1959 amendments makes it clear that the amendments were not meant to render such an appeal an unfair labor practice.
The 1959 amendments were designed to close certain loopholes in the application of § 8 (b)(4)(A) which had been exposed in Board and court decisions. Thus, it had been held that the term “the employees of any employer” limited the application of the statute to those within the statutory definitions of “employees” and “employer.” Section 2 (2) of the National Labor Relations Act defines “employer” to exclude the federal and state governments and their agencies or subdivisions, nonprofit hospitals, and employers subject to the Railway Labor Act. 29 U. S. C. § 152 (2). The definition of “employee” in § 2 (3) excludes agricultural laborers, supervisors, and employees of an employer subject to the Railway Labor Act. 29 U. S. C. § 152 (3). Furthermore, since the section proscribed only inducement to engage in a strike or “concerted” refusal to perform services, it had been held that it was violated only if the inducement was directed at two or more employees. To close these loopholes, subsection (i) substituted the phrase “any individual employed by any person” for “the employees of any employer,” and deleted the word “concerted.” The first change was designed to make the provision applicable to refusals by employees who were not technically “employees” within the statutory definitions, and the second change was intended to make clear that inducement directed to only one individual was proscribed. But these changes did not expand the type of conduct which §8 (b)(4) (A) condemned, that is, union pressures calculated to induce the employees of a secondary employer to withhold their services in order to force their employer to cease dealing with the primary employer.
Moreover, the division of § 8 (b)(4) into subsections (i) and (ii) by the 1959 amendments has direct relevance to the issue presented by this case. It had been held that § 8 (b) (4) (A) did not reach threats of labor trouble made to the secondary employer himself. Congress decided that such conduct should be made unlawful, but only when it amounted to conduct which “threaten [s], coerce[s] or restraints] any person”; hence the addition of subsection (ii). The careful creation of separate standards differentiating the treatment of appeals to the employees of the secondary employer not to perform their employment services, from appeals for other ends which are attended by threats, coercion or restraint, argues conclusively against the interpretation of subsection (i) as reaching the Local's appeals to the supermarket managers in this case. If subsection (i), in addition to prohibiting inducement of employees to withhold employment services, also reaches an appeal that the managers exercise their delegated authority by making a business judgment to cease dealing with the primary employer, subsection (ii) would be almost superfluous. Harmony between (i) and (ii) is best achieved by construing subsection (i) to prohibit inducement of the managers to withhold their services from their employer, and subsection (ii) to condemn an attempt to induce the exercise of discretion only if the inducement would “threaten, coerce, or restrain” that exercise.
We turn finally to the question whether the proviso to amended §8 (b)(4) protected the Local’s handbilling. The Court of Appeals, following its decision in Great Western Broadcasting Corp. v. Labor Board, 310 F. 2d 591 (C. A. 9th Cir.), held that the proviso did not protect the Local’s conduct because, as a distributor, Servette was not directly involved in the physical process of creating the products, and thus “does not produce any products.” The Board on the other hand followed its ruling in Lohman Sales Co., 132 N. L. R. B. 901, that products “produced by an employer” included products distributed, as here, by a wholesaler with whom the primary dispute exists. We agree with the Board. The proviso was the outgrowth of a profound Senate concern that the unions’ freedom to appeal to the public for support of their case be adequately safeguarded. We elaborated the history of the proviso in Labor Board v. Fruit & Vegetable Packers, Local 760, post, p. 58, decided today. It would fall far short of achieving this basic purpose if the proviso applied only in situations where the union’s labor dispute is with the manufacturer or processor. Moreover, a primary target of the 1959 amendments was the secondary boycotts conducted by the Teamsters Union, which ordinarily represents employees not of manufacturers, but of motor carriers. There is nothing in the legislative history which suggests that the protection of the proviso was intended to be any narrower in coverage than the prohibition to which it is an exception, and we see no basis for attributing such an incongruous purpose to Congress.
The term “produced” in other labor laws was not unfamiliar to Congress. Under the Fair Labor Standards Act, the term is defined as “produced, manufactured, mined, handled, or in any other manner worked on . . . ,” 29 U. S. C. § 203 (j), and has always been held to apply to the wholesale distribution of goods. The term “production” in the War Labor Disputes Act has been similarly applied to a general retail department and mail-order business. The Court of Appeals’ restrictive reading of “producer” was prompted in part by the language of § 8 (b)(4)(B), which names as a proscribed object of the conduct defined in subsections (i) and (ii) “forcing or requiring any person to cease . . . dealing in the products of any other producer, processor, or manufacturer.” (Italics supplied.) In its decision in Great Western Broadcasting Corp. v. Labor Board, supra, the Court of Appeals reasoned that since a “processor” and a “manufacturer” are engaged in the physical creation of goods, the word “producer” must be read as limited to one who performs similar functions. On the contrary, we think that “producer” must be given a broader reach, else it is rendered virtually superfluous.
Finally, the warnings that handbills would be distributed in front of noncooperating stores are not prohibited as “threats” within subsection (ii). The statutory protection for the distribution of handbills would be undermined if a threat to engage in protected conduct were not itself protected.
Reversed.
The supermarket chains principally involved were Kory’s Markets, Inc., and McDaniels Markets. The testimony mentioned only one other chain, Daylight Markets, one of whose store managers made an unsworn statement that he was interviewed on one occasion, and that although he refused to cooperate, the Local did not handbill at his store. Servette’s products are primarily candy, liquor, holiday supplies and specialty articles.
The handbill was as follows:
“To the Patrons of This Store
“Wholesale Delivery Drivers & Salesmen’s Local No. 848 urgently requests that you do not buy the following products distributed by Servette, Inc.:
“Brach’s Candy
“Servette Candy
“Good Season Salad Dressing
“Old London Products
“The Servette Company which distributes these products refuses to negotiate with the Union that represents its drivers. The Company is attempting to force the drivers to sign individual ‘'Yellow Dog’ contracts.
“These contracts will destroy the wages and working conditions that the drivers now enjoy, and will set them back 20 years in their struggle for decent wages and working conditions.
“The drivers of Servette appreciate your cooperation in this fight.”
As amended by the Labor-Management Reporting and Disclosure Act of 1959 (Landrum-Griffin Act) § 704 (a), 73 Stat. 542-543, 29 U. S. C. (Supp. IV, 1963) §158 (b)(4).
The Board reached a contrary conclusion on the authority of its decision in Carolina Lumber Co., 130 N. L. R. B. 1438, 1443, which viewed the statute as distinguishing “low level” supervisors from “high level” supervisors, holding that inducement of “low level” supervisors is impermissible but inducement of “high level” supervisors is permitted. We hold today that this is not the distinction drawn by the statute; rather, the question of the applicability of subsection (i) turns upon whether the union’s appeal is to cease performing employment services, or is an appeal for the exercise of managerial discretion.
Section 8 (b) (4) of the National Labor Relations Act, 61 Stat. 140, 141, 29 U. S. C. § 158 (b) (4), read as follows:
“Sec. 8 (b). It shall be an unfair labor practice for a labor organization or its agents—
“(4) to engage in, or to induce or encourage the employees of any employer to engage in, a strike or a concerted refusal in the course of their employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services, where an object thereof is: (A) forcing or requiring any employer or self-employed person to join any labor or employer organization or any employer or other person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person.”
In view of these definitions, it was permissible for a union to induce work stoppages by minor supervisors, and farm, railway or public employees. See Ferro-Co Corp., 102 N. L. R. B. 1660 (supervisors) ; Arkansas Express, Inc., 92 N. L. R. B. 255 (supervisors); Conway’s Express, 87 N. L. R. B. 972, 980, aff’d, 195 F. 2d 906, 911 (C. A. 2d Cir.) (supervisors); Great Northern R. Co., 122 N. L. R. B. 1403, enforcement denied, 272 F. 2d 741 (C. A. 9th Cir.), and supplemental Board decision, 126 N. L. R. B. 57 (railroad employees); Smith Lumber Co., 116 N. L. R. B. 1756, enforcement denied, 246 F. 2d 129, 132 (C. A. 5th Cir.) (railroad employees); Paper Makers Importing Co., Inc., 116 N. L. R. B. 267 (municipal employees). Compare Di Giorgio Fruit Corp., 87 N. L. R. B. 720, 721, enforced, 89 U. S. App. D. C. 155, 191 F. 2d 642, cert. denied, 342 U. S. 869 (agricultural labor organization).
See Joliet Contractors Assn. v. Labor Board, 202 F. 2d 606, 612 (C. A. 7th Cir.), cert. denied, 346 U. S. 824; cf. Labor Board v. International Rice Milling Co., 341 U. S. 665, 671.
The changes made in § 8 (b) (4) (A) by subsection (i) first appeared in the Administration bill, which was introduced by Senator Goldwater. See § 503 (a) of S. 748,1 Legislative History of the Labor-Management Reporting and Disclosure Act of 1959, 142. The Secretary of Labor testified that the change would cure the situation whereby unions could “avoid the existing provisions by inducing individual employees, or workers not defined as employees by the act such as railroad and agricultural workers — to refuse to handle the products of the person with whom they want the employer to cease doing business,” Hearings before the Senate Subcommittee on Labor and Public Welfare on S. 505, etc., 86th Cong., 1st Sess., p. 265. The Lan-drum-Griffin bill introduced in the House contained a subsection (i) similar to that of the Administration bill. Section 705 (a) of H. R. 8400,1 Leg. Hist. 680. An analysis submitted by its sponsors explained the purpose of the amendment as had the Secretary of Labor, and added that the omission of the word “concerted” was to prevent the unions from inducing employees one at a time to engage in secondary boycotts. 105 Cong. Rec. 14347, II Leg. Hist. 1522-1523. See also 105 Cong. Rec. 15531-15532 (Congressman Griffin), II Leg. Hist. 1568.-
Thus, the following colloquy occurred between Secretary of Labor Mitchell and Senator Kennedy with respect to the provision of the Administration bill analogous to § 8 (b) (4) (ii):
“Senator Kennedy. Mr. Secretary . . .
“I would like to ask you a question regarding section 503 (a) of your bill: There is a manufacturer of clothing ‘A.’ He begins to purchase the products of a plant which is under the domination of racketeers .... Would it be a violation of section 503 of your bill if the business agent of the Clothing Workers Union at company A spoke to the plant manager and requested him not to order materials— nonunion materials — from the racketeer plant in Pennsylvania?
“Secretary Mitchell. We don’t think it would be, Senator.
“Senator Kennedy. Now, supposing the plant in Pennsylvania was a nonunion plant, would it be a violation under your bill for union leaders in another company to go to his plant manager and ask him not to buy goods from the nonunion plant?
“Secretary Mitchell. Request him not to buy? No.
“Senator Kennedy. Now, if the representative of the union at plant A told the manufacturer that the members of the union would not continue to work on goods which were secured from the racketeer’s shop?
“Secretary Mitchell. In that case, it is my interpretation of our proposal that that would be coercion. And our proposal prohibits coercion for the purpose of bringing pressure on an employer not to buy merchandise from a neutral third party.” Hearings before the Senate Subcommittee on Labor and Public Welfare on S. 505, etc., 86th Cong., 1st Sess., pp. 304^305.
See Sealright Pacific, Ltd., 82 N. L. R. B. 271, 272, n. 4; Rabouin v. Labor Board, 195 F. 2d 906, 911-912 (C. A. 2d Cir.); Labor Board v. International Union of Brewery Workers, 272 F. 2d 817, 819 (C. A. 10th Cir.).
Accord, Labor Board v. Local 294, Teamsters, 298 F. 2d 105 (C. A. 2d Cir.); and see Alpert v. Local 379, Teamsters, 184 F. Supp. 558 (D. C. D. Mass.).
The Conference Committee in adopting subsection (ii) understood that the subsection would reach only threats, restraints or coercion of the secondary employer and not a mere request to him for voluntary cooperation. Senator Dirksen, one of the conferees, stated that the new amendment “makes it an unfair labor practice for a union to try to coerce or threaten an employer directly (but not to persuade or ask him) in order — • ... To get him to stop doing business with another firm or handling its goods.” 105 Cong. Rec. 19849, II Leg. Hist. 1823. (Italics supplied.)
See, e. g., 105 Cong. Rec. 1730, II Leg. Hist. 993-994; 105 Cong. Rec. 6105, II Leg. Hist. 1028; 105 Cong. Rec. 6669, II Leg. Hist. 1196; 105 Cong. Rec. 3926-3927, II Leg. Hist. 1469-1470; 105 Cong. Rec. 15544, II Leg. Hist. 1580.
See, e. g., Mitchell v. Pidcock, 299 F. 2d 281 (C. A. 5th Cir.); McComb v. Wyandotte Furniture Co., 169 F. 2d 766 (C. A. 8th Cir.); McComb v. Blue Star Auto Stores, 164 F. 2d 329 (C. A. 7th Cir.) ; Walling v. Friend, 156 F. 2d 429 (C. A. 8th Cir.); Walling v. Mutual Wholesale Food Co., 141 F. 2d 331, 340 (C. A. 8th Cir.).
United States v. Montgomery Ward & Co., 150 F. 2d 369 (C. A. 7th Cir.).
We attach no significance to the fact that another version of the proviso read:
“Provided, That nothing contained in this subsection (b) shall be construed ... to prohibit publicity for the purpose of truthfully advising the public (including consumers) that an establishment is operated, or goods are produced or distributed, by an employer engaged in a labor dispute . . . .” 105 Cong. Ree. 17333, II Leg. Hist. 1383.
This version was in a request by the Senate conferees for instructions but was not made the subject of debate or vote because Senate and House conferees reached agreement on the proviso.
Question: What is the disposition of the case, that is, the treatment the Supreme Court accorded the court whose decision it reviewed?
A. stay, petition, or motion granted
B. affirmed (includes modified)
C. reversed
D. reversed and remanded
E. vacated and remanded
F. affirmed and reversed (or vacated) in part
G. affirmed and reversed (or vacated) in part and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to or from a lower court
K. no disposition
Answer:
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songer_origin
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A
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What follows is an opinion from a United States Court of Appeals. Your task is to identify the type of court which made the original decision. Code cases removed from a state court as originating in federal district court. For "State court", include habeas corpus petitions after conviction in state court and petitions from courts of territories other than the U.S. District Courts. For "Special DC court", include courts other than the US District Court for DC. For "Other", include courts such as the Tax Court and a court martial.
PRIESTER et al. v. SOUTHERN RY. CO.
(Circuit Court of Appeals, Fourth Circuit.
June 15, 1925.)
No. 2344.
Appeal and error <©=31213 — Verdict properly directed, where testimony at second trial not materially different from that of first one.
, Where judgment for plaintiffs was reversed because evidence was not legally sufficient to support verdict for them, on retrial verdict was properly directed for defendant, where testimony did not differ materially from that of first trial.
In Error to the District Court of the Unitgd States for the Eastern District of South Carolina, at Charleston; Ernest P. Cochran, Judge.
Action at law by Mrs. M. A. Priester and her husband against the Southern Railway Company. Judgment for defendant, and plaintiffs bring error.
Affirmed.
T. M. Boulware, of Barnwell, S. C., and George Warren, of Hampton, S. C., for plaintiffs in error.
Prank G. Tompkins, of Columbia, S. C., and J. W. Manuel, of Hampton, S. C., for defendant in error.
Before WOODS, WADDILL, and ROSE, Circuit Judges.
ROSE, Circuit Judge.
This case has been here before. 289 F. 945. At that time, after full consideration, a judgment below for the plaintiffs was reversed, on the ground that they had offered no evidence legally sufficient to support a verdict in their favor. The ease was then remanded for a new trial. That has been now held, and under the direction of the learned District Judge a verdict was returned for the defendant. The- plaintiffs assign error.
It goes without saying that, if the testimony offered at the second trial did not differ in any material respect from that which was presented when the ease was first heard, the District Court had no choice other than to give the direction it did. Thompson v. Maxwell Land Grant & R. Co., 168 U. S. 456, 18 S. Ct. 121, 42 L. Ed. 539. We have carefully examined the present record, and fail to find any substantial distinction between the evidence in it and that which we considered some two years ago.
Affirmed.
Question: What type of court made the original decision?
A. Federal district court (single judge)
B. 3 judge district court
C. State court
D. Bankruptcy court, referee in bankruptcy, special master
E. Federal magistrate
F. Federal administrative agency
G. Special DC court
H. Other
I. Not ascertained
Answer:
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sc_issuearea
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G
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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
BAY RIDGE OPERATING CO., INC. v. AARON et al.
NO. 366.
Argued January 12,1948.
Decided June 7, 1948.
Assistant to the Attorney General Ford and Marvin C. Taylor argued the cause for petitioners. With them on the brief were Solicitor General Perlman, Herbert A. Bergson, Paul A. Sweeney and Harry I. Rand.
Monroe Goldwater argued the cause for respondents. With him on the brief were Max R. Simon and James L. Goldwater.
Nathan Baker filed a brief for Frank Adams, as amicus curiae, urging affirmance.
Briefs of amici curiae urging reversal were filed by Raymond S. Smethurst and Lambert H. Miller for the National Association of Manufacturers; Louis Waldman for the International Longshoremens Association; and Gregory A. Harrison, William Radner and Mary L. Schleifer for the Waterfront Employers Association.
Mr. Justice Reed
delivered the opinion of the Court.
These cases present another aspect of the perplexing problem of what constitutes the regular rate of pay which the Fair Labor Standards Act requires to be used in computing the proper payment for work in excess of forty hours. The applicable provisions read as follows:
“Sec. 7. (a) No employer shall, except as otherwise provided in this section, employ any of his employees who is engaged in commerce or in the production of goods for commerce—
(3) for a workweek longer than forty hours after the expiration of the second year from such date,
unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.”
The problem posed is the method of computing the regular rate of pay for longshoremen who work in foreign and interstate commérce varying and irregular hours throughout the workweek under a collective bargaining agreement for handling cargo which provides contract straight time hourly rates for work done within a prescribed 44-hour time schedule and contract overtime rates for all work done outside the straight time hours.
These two suits were brought as class actions on behalf of all longshoremen employed by two stevedoring companies, Bay Ridge Operating Co., and Huron Stevedoring Corp., to recover unpaid statutory excess compensation in accordance with § 16 (b) of the Fair Labor Standards Act. By stipulation the claims of ten specific longshoremen in each case were severed and the two suits were consolidated for trial, leaving the claims of the other plaintiffs pending on the docket. The claims of the plaintiffs here are for the period October 1, 1943, to September 30,1945.
The terms of employment for the respondents, longshoremen working in the Port of New York, were fixed for the period in question by the collective bargaining agreement between the International Longshoremens Association and the New York Shipping Association together with certain steamship and stevedore companies. It was applicable to the two petitioners. The agreement established a “basic working day” of eight hours and a “basic working week,” that is, workweek, of forty-four hours; hourly rates for different types of cargo were specified for work between 8 a. m. and 12 noon and between 1 p. m. and 5 p. m. during five working days of the week, Monday through Friday, and from 8 a. m. to 12 noon on Saturday, and a different schedule of rates for work during all other hours in the workweek. The first schedule was called “straight time” rates, and the second schedule was entitled “overtime” rates. This opinion designates these rates as contract straight time and contract overtime. For four types of cargo the overtime rates were exactly one and a half times the straight time rates; for four other types the overtime rates were slightly less than one and a half times the straight time rates. The contract straight time rates ranged from $1.25 to $2.50 an hour. The contract overtime rates were paid for all work on Sundays and legal holidays. The contract provided for no differential for work in excess of forty hours in a week.
Respondents claim that their regular rate of pay under the contract for any workweek, within the meaning of § 7 (a), is the average hourly rate computed by dividing the total number of hours worked in any workweek for any single employer into the total compensation received from that employer during that week; and that in those workweeks in which they worked more than forty hours for any one employer they were entitled by § 7 (a) to statutory excess compensation for all such excess hours computed on the basis of that rate. The petitioners claim that the straight time rates are the regular rates, and that they have, therefore, with minor exceptions not presented by this review, complied with the requirements of § 7 (a). That is, no rates except straight time rates are to be taken into consideration in computing the regular rate. The petitioners contend that the contract overtime rates were intended to cover any earned statutory excess compensation and did cover it because they were substantially in an amount of one and one-half times the straight tinle rates. The District Court held that the contract straight time rates were the regular rates but the Circuit Court of Appeals for the Second Circuit held otherwise.
Throughout all these proceedings the petitioners have been represented by the Department of Justice, since the United States under its cost-plus contracts with the petitioners is the real party in interest. Substantially all stevedoring during the war years was performed for the account of the United States. The Solicitor General notes that prior to the decision in the Circuit Court of Appeals, 118 suits had been instituted on behalf of longshoremen, and since that time approximately 100 new complaints have been filed. Contracts of the same general type are said to have been in effect in all our maritime areas. Witnesses testifying before the Wages and Hours Subcommittee of the House Committee on Education and Labor stated that liability of the Government under such suits would be large. The Wage and Hour Administrator has not filed a brief in the proceedings, but the Solicitor General has advised us that the Administrator of the Wage and Hour Division of the Department of Labor “believes that proper consideration was given by the court below to his interpretation of Section 7 of the Fair Labor Standards Act and that the decision below is correct.” The Administrator and the Solicitor of the Department of Labor testified at length before the House committee as to their views on the issues presented by these cases. Amicus briefs have been filed by the International Longshoremens Association, the National Association of Manufacturers, and the Waterfront Employers Association of the Pacific Coast, all urging that the decision below be reversed.
In order to fix the legal issues in their factual setting, we summarize the findings of fact made by the District Court which were accepted by the Circuit Court of Appeals and are not challenged here. ■ Most of these findings referred to in this opinion will be found in the Appendix at 162 F. 2d 670. Employment in the longshore industry has always been casual in nature. The amount of work available depends on the number of ships in port and their length of stay and is consequently highly variable and unpredictable, from day to day, week to week, and season to season. Longshoremen are hired for a specific job at the “shape,” which is normally held three times a day at each pier where work is available. The hiring stevedore selects the men he desires from the longshoremen who are present at the “shape”; in some instances a group of longshoremen are hired together as a gang. The work may last only for a few hours or for as long as a week. Although some work is carried on at all hours, the stevedoring companies, since operations are then carried on at less cost, attempt to do as much work as possible during the straight time hours.
The court further found that the rate for night work and holiday work had been higher than the rate for day work since at least as far back as 1887, and that since 1916, when the first agreement was made with the International Longshoremens Association, the differential had been approximately 50%. Joseph B. Ryan, President of the Association, testified that the differential was designed to shorten the total number of hours worked and to confine the work as far as possible within the scheduled forty-four hours. Despite the differential, many longshoremen were unwilling to work at night. Although some longshore work was required at all hours, except Saturday night, the District Court found that the differential had been responsible for the high degree of concentration of longshore work to the contract straight time hours.
The government introduced elaborate statistical studies to show the distribution of work as between the contract straight time and contract overtime hours. From 1932 to 1937, 80% of the total hours worked were within the contract straight time hours and only 2%% of the total manhours were performed by men working between 5 p. m. and 8 a. m. (exclusive of Sundays and holidays) who had worked no straight time hours earlier that day. During the war, the proportion of work in contract overtime hours was considerably higher because of the greater volume of cargo handled; 55% of the total hours fell within the contract straight time hours, and the ratio of work in contract overtime hours by men who had not previously worked in the contract straight time hours was correspondingly higher. The respondents’ employment was highly irregular; in many weeks the respondents did not work at all, and in weeks in which they did work their hours of employment varied over a wide range. The trial court concluded that the “basic working day” and “basic working week,” meaning by these phrases the contract straight time hours, were not the periods “normally, regularly or usually” worked by the respondents. Finding 45.
In giving judgment for the petitioners, the trial court placed emphasis on the fact that the rates in question were arrived at through bona fide collective bargaining, and were more favorable to the longshoremen than the statutory mandate required. That is, that rates as high as contract straight time rates plus statutory excess compensation were paid to all workers for all work in contract overtime hours whether required by § 7 (a) or not. The District Court opinion referred to Joseph B. Ryan’s statement that the International Longshoremens Association was opposed to the suit “as it might wipe out all of the gains we had made for our men over a period of 25 years.” It rejected respondents’ alternative contentions that the regular rate was to be determined by the average rate during the first forty hours or by the average rate for all hours worked. It noted that shift differentials were usually five or ten cents an hour and seldom exceeded fifteen cents and were not designed to deter the employer from working employees during the period for which the differential was paid; in the present case the trial judge found that the 50% differential was designed to deter and actually did deter work outside contract straight time hours. Accordingly the trial court concluded that the “collectively bargained agreement established a regular rate” under the Fair Labor Standards Act — -the contract straight time rate. 69 F. Supp. 956, 961.
The Circuit Court of Appeals held that the regular rate must be determined as an “actual fact” and could not be arranged through a collective bargaining agreement, citing 149 Madison Ave. Corp. v. Asselta, 331 U. S. 199. That court therefore concluded that on the basis of the findings below the regular rate must be computed by dividing the total number of hours worked into the total compensation received. The court rejected the contention that the regular rate was the average rate for the first forty hours of work, citing Walling v. Halliburton Oil Well Cementing Co., 331 U. S. 17. The judgment of the District Court was reversed with directions to determine the amounts due plaintiffs in the light of the Portal-to-Portal Act of 1947, 61 Stat. 84. No determination of the scope or validity of that act was attempted as those matters had not been argued. 162 F. 2d 665, 673.
On account of the importance of the method of computing the regular rate of pay in employment contracts providing for extra pay, we granted certiorari. 332 U. S. 814.
The government adopts the view of the District Court that the contract straight time rates constituted the regular rates within the meaning of § 7 (a) of the Fair Labor Standards Act. The government accepts, too, the reasoning of the District Court that the contract overtime rates, as they were coercive in the sense that they were intended to exert pressure on employers to carry on their activities in the straight time hours, were not regular rates and could be credited against required statutory excess compensation in the amount that the contract overtime rates exceeded the contract straight time rates. The government argues in the alternative that the “normal, non-overtime workweek,” said to be the hours controlling the regular rate of pay, is to be determined by reference to peacetime conditions, rather than the abnormal wartime conditions, and that the statistical studies show that the work of longshoremen is sufficiently concentrated within the scheduled hours to compel the finding that the contract straight time hours are the regular working hours. The government urges also that the contract, as thus interpreted, accords with congressional purposes in enacting the Fair Labor Standards Act. It is said to reduce working hours and spread employment and to preserve the integrity of collective bargaining.
We agree with the conclusion reached by the Circuit Court of Appeals. Later in this opinion, pp. 465-471, we set out our reasons for concluding that the extra pay for contract overtime hours is not an overtime premium. Where there are no overtime premium payments the rule for determining the regular rate of pay is to divide the wages actually paid by the hours actually worked in any workweek and adjudge additional payment to each individual on that basis for time in excess of forty hours worked for a single employer. Any statutory excess compensation so found is of course subject to enlargement under the provisions of § 16 (b). Compare § 11 of Portal-to-Portal Act of 1947. This determination, we think, accords with the statute and the terms of the contract.
(1) The statute, § 7 (a), expresses the intention of Congress “to require extra pay for overtime work by those covered by the Act even though their hourly wages exceeded the statutory minimum.” The purpose was to compensate those who labored in excess of the statutory maximum number of hours for the wear and tear of extra work and to spread employment through inducing employers to shorten hours because of the pressure of extra cost. The statute by its terms protects the group of employees by protecting each individual employee from overly long hours. So although only one of a thousand works more than forty hours, that one is entitled to statutory excess compensation. That excess compensation is fixed by § 7 (a) “at one and one-half times the regular rate at which he is employed.” The regular rate of pay of the respondents under this contract must therefore be found.
The statute contains no definition of regular rate of pay and no rule for its determination. Contracts for pay take many forms. The rate of pay may be by the hour, by piecework, by the week, month or year, and with or without a guarantee that earnings for a period of time shall be at least a stated sum. The regular rate may vary from week to week. Overnight Motor Co. v. Missel, 316 U. S. 572, 580; Walling v. Belo Corp., 316 U. S. 624, 632. The employee’s hours may be regular or irregular. From all such wages the regular hourly rate must be extracted. As no authority was given any agency to establish regulations, courts must apply the statute to this situation without the benefit of binding interpretations within the scope of the Act by an administrative agency.
Every contract of employment, written or oral, explicitly or implicitly includes a regular rate of pay for the person employed. Walling v. Belo Corp., supra, 631; Walling v. Halliburton Oil Well Cementing Co., supra. We have said that “the words ‘regular rate’... obviously mean the hourly rate actually paid for the normal, non-overtime workweek.” Walling v. Helmerich & Payne, 323 U. S. 37, 40. See United States v. Rosenwasser, 323 U. S. 360, 363. “Wage divided by hours equals regular rate.” Overnight Motor Co. v. Missel, supra, 580. “The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments. It is not an arbitrary label chosen by the parties; it is an actual fact. Once the parties have decided upon the amount of wages and the mode of payment the determination of the regular rate becomes a matter of mathematical computation, the result of which is unaffected by any designation of a contrary ‘regular rate’ in the wage contracts.” Walling v. Youngerman-Reynolds Hardwood Co., 325 U. S. 419, 424-25. The result is an “actual fact.” 149 Madison Ave. Corp. v. Asselta, supra, 204.
In dealing with such a complex situation as wages throughout national industry, Congress necessarily had to rely upon judicial or administrative application of its standards in applying sanctions to individual situations. These standards had to be expressed in words of generality. The possible contract variations were unforeseeable. In Walling v. Belo Corp., supra, 634, this Court refrained from rigidly defining “regular rate” in a guaranteed weekly wage contract that met the statutory requirements of § 7 (a) for minimum compensation. In the Belo case the contract called for a regular or basic rate of pay above the statutory minimum and a guaranteed weekly wage of 60 times that amount. As the hourly rate was kept low in relation to the guaranteed wage, statutory overtime plus the contract hourly rate did not amount to the guaranteed weekly wage until after 54% hours were worked. P. 628. We refused to require division of the weekly wage actually paid by the hours actually worked to find the “regular rate” of pay and left its determination to agreement of the parties. Where the same type of guaranteed weekly wages were involved, we have reaffirmed that decision as a narrow precedent principally because of public reliance upon and congressional acceptance of the rule there announced. Walling v. Halliburton Co., supra. Aside from this limitation of Belo, the case itself is not a precedent for these cases as in Belo the statutory requirements of minimum wages and statutory excess compensation were provided by the Belo contract. In these present cases no provision has been made for any statutory excess compensation and none can be earned by any respondent based on the contract overtime pay. Our assent to the Belo decision, moreover, does not imply that mere words in a contract can fix the regular rate. That would not be the maintenance of a flexible definition of regular rate but a refusal to apply a statutory requirement for protecting workers against excessive hours. The results on the individual of the operations under the contract must be tested by the statute. As Congress left the regular rate of pay undefined, we feel sure the purpose was to require judicial determination as to whether in fact an employee receives the full statutory excess compensation, rather than to impose a rule that in the absence of fraud or clear evasion employers and employees might fix a regular rate without regard to hours worked or sums actually received as pay.
Further, we reject the argument that under the statute an agreement reached or administered through collective bargaining is more persuasive in defining regular rate than individual contracts. Although our public policy recognizes the effectiveness of collective bargaining and encourages its use, nothing to our knowledge in any act authorizes us to give decisive weight to contract declarations as to the regular rate because they are the result of collective bargaining. 149 Madison Aye. Corp. v. Asselta, supra, 202 and 204; Walling v. Harnischfeger Corp., 325 U. S. 427, 432. A vigorous argument is presented for petitioners by the International Longshoremens Association that a collectively obtained and administered agreement should be effective in determining the regular rate of pay but we think the words of and practices under the contract are the determinative factors in finding the regular rate for each individual.
As the regular rate of pay cannot be left to a declaration by the parties as to what is to be treated as the regular rate for an employee, it must be drawn from what happens under the employment contract. We think the most reasonable conclusion is that Congress intended the regular rate of pay to be found by dividing the weekly compensation by the hours worked unless the compensation paid to the employee contains some amount that represents an overtime premium. If such overtime premium is included in the weekly pay check that must be deducted before the division. This deduction of overtime premium from the pay for the workweek results from the language of the statute. When the statute says that the employee shall receive for his excess hours one and one-half times the regular rate at which he is employed, it is clear to us that Congress intended to exclude overtime premium payments from the computation of the regular rate of pay. To permit overtime premium to enter into the computation of the regular rate would be to allow overtime premium on overtime premium — a pyramiding that Congress could not have intended. In order to avoid a similar double payment, we think that any overtime premium paid, even if for work during the first forty hours of the workweek, may be credited against any obligation to pay statutory excess compensation. These conclusions accord with those of the Administrator.
The definition of overtime premium thus becomes crucial in determining the regular rate of pay. We need not pause to differentiate the situations that have been described by the word “overtime.” Sometimes it is used to denote work after regular hours, sometimes work after hours fixed by contract at less than the statutory maximum hours and sometimes hours outside of a specified clock pattern without regard to whether previous work has been done, e. g., work on Sundays or holidays. It is not a word of art. See Premium Pay Provisions in Selected Union Agreements, Monthly Labor Review, U. S. Department of Labor, October 1947, Vol. 65, No. 4. Overtime premium has been used in this opinion as defined in note 3. It is that extra pay for work because of previous work for a specified number of hours in the workweek or workday. It is extra pay of that kind which we think that Congress intended should be excluded from computation of regular pay. Otherwise the purpose of the statute to require payment to an employee for excess hours is expanded extravagantly by computing regular rate of pay upon a payment already made for the same purpose for which § 7 (a) requires extra pay, to wit, extra pay because of excess working hours. Accordingly, statutory excess compensation paid for work in excess of forty hours should not be used to figure the regular rate. Neither should similar contract excess compensation for work because of prior work be used in such a calculation. Extra pay by contract because of longer hours than the standard fixed by the contract for the day or week has the same purpose as statutory excess compensation and must likewise be excluded. Under the definition, a mere higher rate paid as a job differential or as a shift differential, or for Sunday or holiday work, is not an overtime premium. It is immaterial in determining the character of the extra pay that an employee actually has worked at a lower rate earlier in the workweek prior to the receipt of the higher rate. The higher rate must be paid because of the hours previously worked for the extra pay to be an overtime premium.
The trial court refused to accept the respondents’ contention that the contract overtime rate was a shift differential, partly because it was felt that such a holding would have a disruptive effect on national economy. 69 F. Supp. 958-59. We use as examples three illustrations employed by the District Court to illustrate its understanding of the effect of respondents’ contentions to employment situations. That court thought these illustrations indicated additional liability from the employer under § 7 (a). We do not agree. Our conclusions as to the trial court’s illustrations vary from those of the trial court because that court did not deduct overtime premiums, as we have defined them, actually paid from the weekly wage before dividing by the hours worked. See quotation from Walling v. Youngerman-Reynolds Hardwood Co., supra, at p. 461 of this opinion. (1) The employment contract calls for an overtime premium for work beyond thirty-six hours. Such extra pay should not be included as weekly wages in any computation of the regular rate at which a man works. (2) A contract provides for payment of time and a half for work in excess of eight hours in a single workday. An employee who works five ten-hour days would have no claim for statutory excess compensation if paid the amount due by the contract. Or (3) a contract provides for a rate of $1 an hour for the first 40 hours and $1.50 for all excess hours; an employee works 48 hours and receives $52. To find his regular rate of pay, the overtime premium of $4 should be deducted and the resulting sum divided by 48 hours. On the other hand, a man might be employed as a night watchman on an eight-hour shift at time and a half the wage rate of day watchmen. This would be extra pay for undesirable hours. It is a shift differential. It would not be overtime premium pay but would be included in the computation for determining overtime premium for any excess hours.
Where an employee receives a higher wage or rate because of undesirable hours or disagreeable work, such wage represents a shift differential or higher wages because of the character of work done or the time at which he is required to labor rather than an overtime premium. Such payments enter into the determination of the regular rate of pay. See Cabunac v. National Terminals Corp., 139 F. 2d 853.
The trial court seemed to assume that if the contract overtime rate were a shift differential, the employee who worked on a higher paid shift would be entitled to have his higher shift rates enter into the computation of regular rate of pay. One of the reasons for not allowing the contract overtime rates in the computation of regular rate of pay was that it thought the great difference between the contract straight time and contract overtime rates showed that the premium paid by contract was not a shift differential but a true overtime premium. In this we think the trial court erred. The size of the shift differential cannot change the fact that large wages were paid for work in undesirable hours. It is like a differential for dangerous work. This contract called for $2.50 straight time hourly rate for handling explosives. The statutory excess compensation would, of course, be $3.75 per hour. If an employee receives from his employer a high hourly rate of pay for hard or disagreeable duty, he is entitled to the statutory excess compensation figured on his actual pay.
Nor do we find the District Court’s reliance upon the fact that the overtime rates were employed in order to concentrate the work of the longshoremen in the straight time hours relevant to a determination of the respondents’ rate of pay. The District Court thought the concentration was significant. It did not test whether the contract overtime rates contained overtime premium payments by considering whether the employee actually received extra compensation for excess hours. We accept the District Court’s holding that this concentration was an intended effect of the overtime rates and that the higher rates did contribute to the concentration of the work in the straight time hours as set out in a preceding paragraph of this opinion. P. 456 supra. Such a concentration tends, in some respects, to the employment of more men, as there is pressure for more work to be done in the straight time hours. Overnight Motor Co. v. Missel, supra, 578. However, the pressure of the contract overtime wages is not solely toward a spread of employment. Since work is in fact done outside straight time hours, the employer can use men who have previously worked in straight time hours in contract overtime hours without additional cost.
But spread of employment is not the sole purpose of the forty-hour maximum provision of § 7 (a). Its purpose is also to compensate an employee in a specific manner for the strain of working longer than forty hours. Overnight Motor Co. v. Missel, supra, 578. The statute commands that an employee receive time and one-half his regular rate of pay for statutory excess compensation. The contract here in question fails to give that compensation to an employee who works all or part of his time in the less desirable contract overtime hours. Looked at from the individual standpoint of respondents, the concentration of work does not have any effect upon their regular rate of pay. Because of this defect, the concentration of work brought about by the contract has no effect in the determination of the regular rate of pay. As we indicated at the beginning of this subdivision (1), a major purpose of the statute was to compensate an employee by extra pay for work done in excess of the statutory maximum hours. Thus the burdens of overly long hours are balanced by the pay of time and a half for the excess hours.
We therefore hold that overtime premium, deductible from extra pay to find the regular rate of pay, is any additional sum received by an employee for work because of previous work for a specified number of hours in the workweek or workday whether the hours are specified by contract or statute.
(2) Since under Interpretative Bulletin No. 4, § 69, the Administrator refers to regular working hours as important in calculating the regular rate of pay under § 7 (a) of the Act, a word must be said as to regular working hours in this case. “Regular working hours” apparently has not been defined by the Administrator. He could hardly have intended in § 69 to employ the statutory maximum hours as synonomous with regular working hours as there is no prohibition on regular working hours that are longer than the statutory maximum. His illustrations, numbers 2 and 3, show that overtime premiums may be earned within the first 40 hours of a workweek. The statutory maximum hours are significant only as requiring overtime premium pay. An employer may increase pay or decrease hours free as to those steps from statutory regulation. See article in Monthly Labor Review, supra. The trial court pointed out that “The identifying mark of the case at bar is the absence of any norm, any regularity. Both parties have emphasized the casual, irregular character of the employment.” 69 F. Supp. 959-60. The trial court, as we have heretofore stated, pp. 456-457, also found that the “basic working day,” defined by § 2 (a) of the agreement set forth in note 5, supra, was not the day normally, regularly or usually worked by respondents. Indeed the contract, § 1, required these round-the-clock irregular hours from some individuals. We call attention to the problem only to lay it aside as inapplicable in this case.
However, the government contends in this case that regular working hours are important, that the contract fixed regular working hours as the straight time hours and that as an actual fact as shown by the statistics of concentration of work in straight time hours, p. 456, supra, the straight time hours were the regular working hours of all longshoremen. The government concludes from this that the contract straight time pay is the regular rate of pay and the contract overtime pay includes a true overtime premium. We may be mistaken in thus limiting the government’s argument on this point. If the government means that any extra pay to an employee for work outside regular working hours of the group of employees is to be excluded from the computation of the regular rate, we do not think that contention sound. The defect in this argument, however the government’s position is construed, is that it treats of the entire group of longshoremen instead of the individual workmen, respondents here. The straight time hours can be the regular working hours only to those who work in those hours. The work schedule of other individuals in the same general employment is of no importance in determining regular working hours of a single individual. As a matter of fact, regular working hours under a contract, even for an individual, has no significance in determining the rate of pay under the statute. It is not important whether pay is earned for work outside of regular working hours. The time when work is done does not control whether or not all or a part of the pay for that work is to be considered as a part of the regular pay.
We think, therefore, that this case presents no problems that involve determination of the regular hours of work. As an employment contract for irregular hours the rule of dividing the weekly wage by the number of hours worked to find the regular rate of pay would apply. Cf. Overnight Motor Co. v. Missel, supra, at 580.
(3) The contract was interpreted by the Shipping Association and the Longshoremens Association as providing that the contract straight time was the regular rate. The parties to the contract indicated by their conduct that the contract overtime was the statutory excess compensation or an overtime premium. Finding 43,162 F. 2d at 672; see note 33, m/ra. Apparently no dispute or controversy arose over this interpretation although the contract, § 19, made provision for the resolution of such disagreements. The trial court determined that the straight time hourly rate was the regular rate at which respondents were employed. This construction by the parties and the court’s conclusion, supported by evidence, leads us to consider this agreement as though there was a paragraph which read to the effect that the straight time rate is the regular rate of pay. We should also consider that the contract provided that the contract overtime rates were intended to provide any statutory excess compensation, when men worked more than forty hours except in those situations where the entire time, including the excess, was in the straight time hours. This of course does not mean that respondents here were familiar with these purposes of the agreement. So far as the record shows, they worked for the pay promised under the words of the contract. It shows nothing more on this point.
Under the contract we are examining, the respondents’ work in overtime hours was performed without any relation as to whether they had or had not worked before. Under our view of §.7 (a)’s requirements their high pay was not because they had previously worked but because of the disagreeable hours they were called to labor or because the contracting parties wished to compress the regular working days into the straight time hours as much as possible. As heretofore pointed out, we need not determine what were the regular working hours of these respondents. If it were important, the trial court determined that their regular working hours were not the straight time hours. They worked at irregular times. Finding 45, 162 F. 2d at 673. The record shows that all respondents worked 5,201 straight time hours and 20,771 overtime hours. Four of the twenty respondents worked no straight time hours. Five others worked less than 100 straight time hours. Three worked more straight time than overtime. The record does not show the hours these respondents worked for other employers. That fact is immaterial in this case as respondents seek recovery only from petitioner employers. These round-the-clock hours were in strict accordance with the contract which allowed the Longshoremens Association to furnish all men needed and called for the men to “work any night of thé week, or on Sundays, Holidays, or Saturday afternoons, when required.” §§ 1 and 2; see note 5. Men who worked contract overtime hours were entitled to contract overtime pay. They were given no overtime premium pay because of long hours. It is immaterial that his regular rate may greatly exceed the statutory minimum rate. This contract overtime rate, therefore, did not meet the excess pay requirements of § 7.
In finding the statutory excess compensation due respondents, the trial court must determine the method of computation. Each respondent is entitled to receive compensation for his hours worked in excess of forty at one and a half times his regular rate, computed as the weighted average of the rates worked during the week. In computing the amount to be paid, the petitioners may credit against the obligation to pay statutory excess compensation the amount already paid to each respondent which is allocable to work in those excess hours. The precise method for computing this credit presents the difficulty. According to the Administrator’s interpretation, an employer may credit himself with an amount equal to the number of hours worked in excess of forty multiplied by the regular rate of pay for the entire week rather than an amount equal to the number of hours worked in excess of forty multiplied by the average
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer:
|
songer_genapel1
|
G
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed appellant.
MEYER v. COMMISSIONER OF INTERNAL REVENUE.
No. 9039.
Circuit Court of Appeals, Third Circuit.
Argued Feb. 4, 1946.
Decided Feb. 27, 1946.
Sydner A. Gutkin, of Newark, N. J. (David Beck, of Newark, N. J., on the brief), for petitioner.
S. Dee Hanson, of Washington, D. C. (Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key and J. Louis Monarch, Sp. Assts. to Atty. Gen., on the brief), for respondent.
Before MARIS, McLAUGHLIN and O’CONNELL, Circuit Judges.
MARIS, Circuit Judge.
The taxpayer asks this court to review a finding by tlie Tax Court that the redemption by Bersel Realty Company during the years 1938, 1939, 1940 and 1941 for $125,-000 of 1,250 shares of its 5% noncumulative preferred stock which he owned was accomplished at such times and in such manner as to be essentially equivalent to distributions of taxable dividends to him within the meaning of Sectioin 115(g) of the Revenue Act of 1938 and the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 115(g). This was a conclusion which ordinarily would not be reviewable here. Dobson v. Commissioner, 1943, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248; John Kelley Co. v. Commissioner, 1946, 66 S.Ct. 299.
In the present case, however, this conclusion was based tipon a finding that in the years in question the company had undistributed surplus earnings in excess of the amounts distributed in redemption of the stock. That finding in turn depended in part upon a further finding that on December 31, 1937 the earned surplus of the company was $374,433.37. This represented the earned surplus as shown by the company’s hooks of account on that date. The Tax Court also found, however, that in the years 1931, 1934 and 1935 the company had redeemed 5,500 shares of the taxpayer’s preferred stock for $550,-000.
While the Tax Court found that these redemptions were all charged against the capital account it did not find, and the present record does not disclose any basis for finding, that the redemptions made in 1931, 1934 and 1935 were accomplished at a time and in a manner so different from those made in 1938, 1939, 1940 and 1941 as not to be also essentially equivalent to distributions of taxable dividends. On the contrary every factor upon which the court relied in concluding that the later redemptions were of this character would seem, so far as appears from the record now before us, equally applicable to the earlier ones.
If, however, the earlier redemptions which totalled $550,000 are also to be treated as essentially equivalent to distributions of taxable dividends, it is obvious that, looked at from the tax standpoint, they must have operated to distribute so much of the earned surplus of $374,433.-37 shown by the company’s books at the end of 1937 as had accumulated up to the time of the last of these earlier redemptions in 1935. In that case only the earnings accumulated since that last redemption would, for tax purposes, have remained available for distribution in 1938 and later years. The Tax Court made no finding as to the amount of the earnings accumulated in 1936 and 1937 and there is no evidence in the record upon which such a finding could be based.
The Tax Court, as we have said, concluded that the entire sum of $125,000 distributed by Bersel Realty Company to the taxpayer in 1938, 1939, 1940 and 1941 in redemption of preferred stock was taxable as dividends. From what has been said it will be seen that this conclusion required for its support a finding either (a) that the redemptions of 1931, 1934 and 1935 were not essentially equivalent to the distribution of taxable dividends and therefore did not for tax purposes operate to distribute the earnings of that period, or (b) that the earnings accumulated after the last of those earlier redemptions together with the earnings of the years 1938, 1939, 1940 and 1941 were at least equal to the amounts distributed in redemption of preferred stock in the latter years. Since the Tax Court made neither finding its decision must be vacated and the case remanded for appropriate findings and decision.
The decision of the Tax Court is vacated and the case is remanded for further proceedings in accord with this opinion.
Question: What is the nature of the first listed appellant?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_district
|
F
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify which district in the state the case came from. If the case did not come from a federal district court, answer "not applicable".
Irvan MULLINS, Appellant, v. UNIROYAL, INC. and Tim Neville, as Manager, Appellees.
No. 86-1117.
United States Court of Appeals, Eighth Circuit.
Submitted Oct. 13, 1986.
Decided Nov. 13, 1986.
Walter M. Calinger, Red Oak, Iowa, for appellant.
Soren S. Jensen, Omaha, Neb., for appel-lees.
Before LAY, Chief Judge, FAGG, Circuit Judge, and LARSON, Senior District Judge.
The HONORABLE EARL R. LARSON, Senior United States District Judge for the District of Minnesota, sitting by designation.
FAGG, Circuit Judge.
Irvan Mullins brought this action against his former employer and its manager, Uniroyal, Inc. and Tim Neville, claiming he was discharged in violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634. The district court found Mullins ultimately failed to prove he had been discharged because of his age. We affirm.
Mullins worked at the Uniroyal plant in Red Oak, Iowa, for ten years. The plant manufactured hoses. Mullins began there as the distribution/scheduling supervisor and traffic manager. Uniroyal later promoted him to other management positions. In early 1982 Uniroyal eliminated Mullins’ position at the plant. The company then offered him a choice between severance pay and returning to the position he originally held with Uniroyal.
Mullins chose to stay with Uniroyal. In once again serving as distribution/scheduling supervisor, Mullins was responsible for scheduling production in the plant and maintaining sufficient raw materials for that production. Since he had last held this position, however, the plant’s production levels and overall operations intensified, making the position more demanding. In June 1982, Uniroyal notified Mullins that he was being terminated due to poor performance. Although the company relieved Mullins of his supervisory responsibilities, it permitted him to work in a different capacity for seven more months to vest his pension. Mullins was fifty-eight years old at the time he was discharged.
Mullins then filed this age discrimination action. At trial he made a prima facie showing of discrimination. Uniroyal responded by producing evidence that it had discharged Mullins for legitimate, nondiscriminatory reasons. Based upon the record as a whole, the district court found Mullins failed to carry his ultimate burden of proving he had been discriminated against because of his age. On appeal Mullins challenges the district court’s findings.
In reviewing the district court’s determinations made after trial, we focus upon the question whether Uniroyal’s actions were discriminatory. See Holley v. Sanyo Mfg., Inc., 771 F.2d 1161, 1168 (8th Cir.1985); see also United States Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 714-15, 103 S.Ct. 1478, 1481-82, 75 L.Ed.2d 403 (1983). The district court’s determination that Mullins failed to show Uniroyal’s actions were discriminatory is a finding of fact. We cannot reverse the district court’s factual determination unless we conclude it is clearly erroneous. See Fed. R.Civ.P. 52(a). ‘“[A] finding is “clearly erroneous” when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’ ” Anderson v. City of 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)); see Garlington v. St. Anthony’s Hosp. Ass’n, 792 F.2d 752, 754 (8th Cir.1986). It is not sufficient that we may have decided the case differently were we to review the evidence de novo. See Anderson, 470 U.S. at 573-74, 105 S.Ct. at 1511-12.
Here, several years had passed since Mullins first held the distribution/scheduling supervisor position. The responsibilities and pressures of this position had vastly increased. Mullins’ difficulty in handling this position during his second tenure is evidenced by the numerous “incident reports” that were filed by Mullins’ supervisors. The reports detail his errors over the months before Uniroyal decided to terminate him. For example, Mullins issued an incorrect order for cutting hose, submitted an incorrect production schedule to the secretary for processing, exceeded expectations for overtime, and most importantly, failed to obtain adequate supplies for a scheduled Saturday work detail and Uniroyal management was forced to cancel the extra work day.
To support his claim of age discrimination, Mullins points to a reference to his “relatively advanced working age” made by Uniroyal’s Board of Benefits and Awards. Mullins takes the statement out of context. As the district court noted, the Board was expressing its concern that Mullins have a vested pension with some employer. Thus, rather than making his termination immediate, Uniroyal permitted Mullins to work seven more months in order to obtain a vested pension with the company.
Mullins argues we should remand this case to the district court with instructions to apply the principles stated in Bibbs v. Block, 778 F.2d 1318 (8th Cir.1985) (en banc). Mullins essentially contends he established that age was a “discernible factor” in Uniroyal’s decision to terminate him when he made a prima facie showing of discrimination under the pattern of proof set out in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). Therefore, he asserts that the company’s decision was based on a “mixed motive.” Mullins maintains that under Bibbs and Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977), the district court should have required the employer to show by a preponderance of the evidence that, notwithstanding age as a factor in the employment decision, Mullins was discharged for a nondiseriminatory reason.
Mullins’ reliance on Bibbs is misplaced. If we were to accept Mullins’ argument, we in effect would overrule the well-established principles set out in Burdine. As stated in Burdine, when a prima facie case is shown by the employee, the employer’s burden is only to come forward with evidence of a nondiseriminatory reason for the employment decision. The burden of persuasion always remains on the employee to show the reason given by the employer is pretextual. See Burdine, 450 U.S. at 252-53, 101 S.Ct. at 1093. Here, Mullins suggests that once a plaintiff-employee proves a Burdine prima facie case the court is faced with a mixed motive situation and the burden of persuasion shifts to the employer. Under his argument, every pri-ma facie case would become a mixed motive case. That position is clearly incorrect.
Bibbs applies only when the employee establishes that the employment decision was based on a mixed motive. For example, a mixed motive case under Bibbs exists when the defendant-employer concedes that age was a discernible factor, but not a motivating one, for the employment decision. Bibbs would also apply absent an employer’s concession when the trial court finds that a discriminatory reason was a discernible factor in the employer’s decision-making process. Nevertheless, a mixed motive case does not exist simply because a discriminatory reason might be inferred when the employee establishes a prima facie case.
In the present case, the district court determined Uniroyal fired Mullins as a purely business decision. Age was not a factor, and thus, Bibbs was not applicable. Further, we do not inquire into the soundness of an employer’s business decision. The ADEA is not intended for that purpose. See Bell v. Gas Serv. Co., 778 F.2d 512, 515 (8th Cir.1985); Jorgensen v. Modern Woodmen of Am., 761 F.2d 502, 505 (8th Cir.1985); see also O’Connor v. Peru State College, 781 F.2d 632, 638 (8th Cir.1986).
After thoroughly reviewing the record, we conclude the district court’s finding of no discrimination is not clearly erroneous. Accordingly, the district court’s judgment is affirmed.
Affirmed.
Question: From which district in the state was this case appealed?
A. Not applicable
B. Eastern
C. Western
D. Central
E. Middle
F. Southern
G. Northern
H. Whole state is one judicial district
I. Not ascertained
Answer:
|
songer_casetyp1_7-2
|
B
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation".
LAND O’LAKES CREAMERIES, INC., a Corporation, Appellant, v. La Vern HUNGERHOLT, Appellee.
No. 17209.
United States Court of Appeals Eighth Circuit.
June 27, 1963.
Charles A. Bassford, Minneapolis, Minn., Nathan A. Cobb and Charles A. Bassford, of Richards, Montgomery, Cobb & Bassford, Minneapolis, Minn., on the brief, for appellant.
Walter E. Riordan, Minneapolis, Minn., William E. Kalar and Robert M. Austin, Minneapolis, Minn., on the brief, for appellee.
Before VOGEL, VAN OOSTERHOUT and RIDGE, Circuit Judges.
VOGEL, Circuit Judge.
This action was commenced by La Vern Hungerholt, plaintiff-appellee, against Land O’Lakes Creameries, Inc., defendant-appellant, to recover money damages for injuries allegedly caused by appellant’s negligence in manufacturing and bagging commercial fertilizer. The jury returned a verdict in favor of the plaintiff in the sum of $90,400. Land O’Lakes thereafter moved for judgment notwithstanding the verdict or in the alternative for a new trial. From judgment in favor of Hungerholt which followed the denial of both motions, appeal was taken to this court. Diversity of citizenship and amount involved satisfy federal jurisdictional requirements.
Appellant is a Minnesota corporation and is engaged in the manufacture, distribution and sale of commercial fertilizer, feeds, dairy products and poultry, together with bags and containers therefor which it places on the market to be purchased and used by the general public. Among other products manufactured, distributed and sold by the appellant is a fertilizer known as 5-20-20, an inorganic chemical compound derived from a manufacturing process described as the TVA ammoniating process which was developed in 1952 or 1958 by the Tennessee Valley Authority. Appellant acquired the right to use the system of manufacture in November or December 1955.
It was and is the appellee’s contention that the appellant knew or should have known that its 5-20-20 fertilizer contained á number of ingredients that were caustic and corrosive and extremely harsh to human tissue and that some of the ingredients were primary irritants which would cause dermatitis on a normal skin; that the appellant negligently and carelessly packaged and handled its fertilizer so as to deliver bags thereof to the appellee which were torn and defective and which allowed the contents to spill out on the appellee; that the appellant negligently failed to warn appellee by means of a label on its bag or to warn by other reasonable means of the danger and harm to which the appellee was exposed while lifting, loading and transporting the appellant’s fertilizer; and that while handling the fertilizer and without knowledge as to its dangers, he sustained injuries and damages which have totally and permanently incapacitated him and have caused him great pain, suffering and expense.
Land O’Lakes claimed it had no duty to warn and premised its defense on its evidence that its fertilizer product is not dangerous or injurious to human health or life; that it is not a new or experimental product; that the industry has been established for many years; that standard raw materials and processes are used without variation or deviation from those used in the industry and that experience itself has provided more than adequate “testing” or “research”. The defense further contended that even if some negligence could be attributed to Land O’Lakes, the appellee should be barred from recovery by reason of his own contributory negligence.
The appeal here from the judgment entered in the District Court is predicated upon alleged error in denying appellant’s motion for judgment notwithstanding the verdict and denying appellant’s motion for a new trial and, additionally, on alleged misconduct of appellee’s counsel.
A fairly comprehensive recitation of the facts as disclosed by the record seems to be required. In considering such facts, we do so in light of the rule expressed in Ford Motor Co. v. Zahn, 8 Cir., 1959, 265 F.2d 729, 730:
“Since defendant’s contention is that, under all the facts and circumstances of record, no submissible case was made, it is well to bear in mind the general rules governing any plea to displace a jury verdict: (1) All disputed fact questions and permissible inferences must be viewed in the light most favorable to plaintiff; (2) The question of negligence is usually for jury determination and it is only in rare situations, where there is no occasion for reasonable men to differ, that the question becomes one of law for the court; and (3) It is only where all or substantially all of the evidence is on one side, that a directed verdict should be entered. See Coca Cola Bottling Co. of Black Hills v. Hubbard, 8 Cir., 203 F.2d 859, 860, 861, and cases cited.”
The record establishes the following: LaVern Hungerholt was employed by his brother in 1958 as a truck driver. He had been so employed for some ten or eleven months prior to the incident which gave rise to this cause of action. Hungerholt’s duties included picking up fertilizer at appellant’s plant in St. Paul and delivering it to various points in southern Minnesota. Most of the fertilizer carried by Hungerholt was of the type known as 5-20-20. At the Land O’Lakes plant he would load his truck by placing bags of fertilizer upon a conveyor belt running into his vehicle, picking the bags off the conveyor and piling them inside his truck. He had nothing to do with the raw materials that went into the fertilizer but handled only the finished product. During the course of the loading process, Hungerholt found that occasionally he would come upon a bag that had a puncture hole in it or was torn so that the contents of the bag would spill out on him when he handled it. If the tear were apparent, Hungerholt could set the bag aside, but when the defect was on the underside he would not be aware of it until he picked up the bag.
On September 8, 1958, Hungerholt was engaged in loading 5-20-20 fertilizer. One of the bags had been torn open on the underside and as he handled it, it spilled and a considerable amount of the fertilizer poured into one of his boots. On that particularly warm day Hungerholt was wearing a different type of shoe apparel. While in the past he had always worn oxfords, he had this time changed to an engineer’s boot which fit more loosely and had an opening at the top. This was also the first time that the entire contents of a bag had spilled on him.
Hungerholt completed his loading duties, which took about an hour and a half. During that time he noticed a “burning” around his right ankle but did not stop loading. When he had completed his work, signed his orders, etc., he then emptied the fertilizer from his boot. Upon arriving at his home that evening, he, on taking a bath, discovered a red spot on his right ankle about the size of a 50-eent piece. The next day the redness started spreading up his leg. Hungerholt kept working for about five weeks, during which time the inflamed area spread over his entire body. After consultation with a clinic at Rochester, Minnesota, on October 11, 1958, Hungerholt was given a prescription and sent home for therapeutic baths. This treatment was continued for about four to five weeks. His condition improved. He then returned to work, again hauling fertilizer as part of his duties. During the period that he resumed his occupation as a truck driver he did not seek any further medical attention. His condition became worse, however, and in March of 1959 he consulted Dr. Seven-ants, a specialist in dermatology, at LaCrosse, Wisconsin. At that time he had developed large blisters on his hands and feet. Dr. Sevenants hospitalized Hungerholt and treated him for a period of about three weeks. When he was discharged he was told not to return to work as a truck driver. As a result, he had no further contact with the 5-20-20 fertilizer. The condition subsequently flared up repeatedly and he was re-hospitalized on a number of occasions. In his present condition any pressure, excitement, work or heat will cause him to break out and even the simple effort of picking up one of his children will cause a reflaring of the inflammation. As no challenge is made here with reference to the seriousness of Hungerholt’s condition, we omit further details.
Hungerholt testified, and his attending physician’s examination and investigation bore him out, that neither he nor members of his family had any history of allergic reactions. Without objection, Hungerholt testified that others who handled the fertilizer had suffered skin irritation and “breaking out”.
Philip F. Stocker, who supervised the production of fertilizer at the appellant’s plant, was called by the appellee for cross-examination and testified to the process used in the manufacture of 5-20-20 fertilizer. Either anhydrous ammonia or Solution 490 was included in the process. Solution 490 consists of 34% ammonia, 60%' ammonium nitrate and 6% water. Sulfuric acid, phosphates and potash were added to one of these materials. The end product, however, did not include any free acid or ammonia. According to Stocker, the 5-20-20 fertilizer could be made many different ways but the raw materials and the end product would be basically the same. Stocker testified that none of the materials in the finished product could be considered as primary irritants; that several of them were comparable to ordinary table salt; that he had personally handled them with no adverse effects; and, finally, that there had been no experience in the plant of employees being harmed by the ingredients of the fertilizer. He did admit that new employees got nosebleeds from working with the raw materials but that after a day or two the nosebleeds disappeared. He testified that some employees sustained inflamed areas or areas of irritation around the collar, but attributed this to perspiration. Stocker also testified that up until 1958 the appellant did not conduct any formal test to determine possible harmful effects the fertilizer might have on human tissue. He also stated that vast numbers of tons of fertilizer were sold each month and that he had never before heard of anyone alleging that he had been injured by the product.
Stocker explained that the fertilizer bags were placed on pallets for their transportation to storage bins awaiting loading operations. He said that the bags could easily become torn on nails protruding from the boards of these pallets, and also from being punctured or ruptured by a fork lift operator. The pallets were inspected and repaired twice a year. The total tearage of fertilizer bags amounted to 1%.
During the course of the cross-examination of Stocker there was received in evidence a booklet in which the State of Minnesota recommended the placing of notices on bags of fertilizer carrying the warning “injurious to livestock”. Stock-er also admitted that a number of times the 5-20-20 fertilizer was declared illegal by the State of Minnesota for failure to meet the standard of guaranteed analysis.
An analysis by W. C. McCrone and Associates of a bag of 5-20-20 manufactured in March 1962 by the appellant with anhydrous ammonia was introduced in evidence and showed the following ingredients to be present:
Compound Percent
Apatite 1.6
Dicalcium phosphate dihydrate 8.6
Monocalcium phosphate mono-hydrate 5.5
Monopotassium phosphate 2.5
Monoammonium phosphate 19.1
Calcium sulfate 7.4
Calcium sulfate hemihydrate 6.8
Potassium sulfate 4.5
Ammonium sulfate 4.8
Potassium chloride 25.5
Ammonium chloride 6.2
Calcium carbonate 1.5
Calcium silicate 3.0
Quartz sand 2.0
Moisture 1.7
Free acid none
If Solution 490 had been used instead of anhydrous ammonia the additional two compounds of potassium nitrate and ammonium nitrate would have also been present. There was no way of knowing which material was used in the manufacture of the fertilizer spilled into the appellee’s boot.
Jose B. Calva, a consulting and research engineer registered in chemical, mechanical and electrical engineering, testified in behalf of the appellee. He had examined the manufacture of the fertilizer and had analyzed the contents of five of the bags. He testified that some of the ingredients found in the analysis are harmful to tissues. He stated that ammonium chloride is a corrosive substance because it is a combination of hydrochloric or muriatic acid and ammonia or ammonium hydroxide. The latter is an extremely weak base, while the former is a strong acid and Calva stated that the disparity in strength causes the corrosive effect. In addition to ammonium chloride, Calva specifically named ammonium sulfate, monoammonium phosphate and monopotassium phosphate as being harmful to the human skin. While these substances did not occur in the bags he analyzed (they are listed in the analysis, Exhibit 15, introduced at the trial), this was not important since the contents of the bag in coming into contact with the skin absorb moisture and generate heat. This gives rise to a chemical reaction known as metathesis (exchanging of values) between the various ingredients and creates the substances named. According to Calva all ammonium salts, including ammonium nitrate, have a harmful peptizing effect on the tissues by breaking them down and dissolving them. He stated that ammonium chloride in particular is extremely harsh because the skin, upon contact with it, becomes highly absorbent of moisture and tends to burst. He explained that the length of time that the skin was exposed to the materials in the fertilizer and the presence of any abrasion inside the boot would also affect the reaction upon the skin.
Calva additionally testified that the appellant could have reduced the hazard from torn bags by placing screws in the boards of the pallets rather than nails.
Dr. Sevenants, Hungerholt’s attending physician, also testified in his behalf. He first diagnosed the appellee’s condition as an acute dermatitis, later denominating it as atopic eczema or dermatitis. He stated:
“Q. Yes. Could you tell us what your diagnosis was originally and what it is at this time ?
“A. On the first four admissions the hospital diagnosis on discharge was acute dermatitis legs and ankles, thighs, entire upper extremities from contact with feed and fertilizer. That diagnosis was the same on the first four admissions. On the fifth admission and when he was discharged the diagnosis of atopic eczema was made.”
Dr. Sevenants stated that Hungerholt had periodic improvement but that on February 20, 1962, his skin began to flare up again and has continued to do so until the present time. During the course of the treatment, Dr. Sevenants investigated as to whether or not any allergies were present in the family history of the patient and determined that there were none. He stated that based upon the history as given to him by Hungerholt, upon his knowledge of the contents of fertilizers, upon his training and upon the examination of this patient that the cause of his ailment was the spilling of the fertilizer inside the boot on September 8, 1958. He stated that some of the substances in the fertilizer are primary irritants that result in an ulcer and dermatitis through the action upon the skin and that Hungerholt later became sensitized or developed an allergic response to these chemicals or to the products which were formed in the tissues. He defined a primary irritant as something that will produce an adverse reaction or irritation upon the skin of any normal person; that is, it is not an allergic reaction. Friction and a small abrasion help in causing a reaction from a primary irritant and the primary irritant acts in a physical way as an acid would in burning the skin. In so burning the skin it destroys the upper layer of cells so that it then has entrance into the lower portions of the skin. Once this reaction has taken place, and the eruption spreads, the skin becomes sensitized and is no longer normal skin and may develop many and different sensitivities. The witness explained that once the skin has become sensitized, the toxic substances are absorbed in the blood vessels and thereby transmitted to other parts of the body, sensitizing skin over a wide area.
Dr. Sevenants stated that he had encountered other conditions of dermatitis that he had related to the use of fertilizer. In his practice he sees many farmers who have incidents of dermatitis about their wrists and ankles caused by handling fertilizer. He did not know of any case caused by this particular fertilizer. He stated that contact dermatitis or atopic eczema may be caused or aggravated by' emotional disturbance but that in Hungerholt’s case this did not appear to him to be the cause. The fact that Hungerholt had experienced no difficulty with the fertilizer in the previous ten or eleven months he had been handling the substance was considered by the doctor in determining the cause of the irritation, but since the conditions of friction' and perspiration were not formerly present in the same degree he felt that this did not indicate a different causative agent.
Dr. Isadore Fisher, who examined Hungerholt at the appellant’s request prior to trial, testified in the appellant’s behalf. He agreed that a primary irritant is one that will react on persons who have normal skin but said that if the fertilizer had contained such primary irritant the appellee would have had a reaction earlier than he did and it should not have been confined to the ankle in the first manifestation. In his opinion, the product could not possibly contain a primary irritant; hence, he concluded that the appellee must be suffering from an allergic reaction to fertilizer. Such a reaction could manifest itself at any time. He felt that the conditions present in the situation on September 8, 1958, were not basically different from exposure on the wrist or face or around the belt line or in the shoulder strap area. He testified that while contact dermatitis due to sensitization and allergy is known to occur in the fertilizer industry and in many other industries, he did not know of any case referring to primary irritation from fertilizers per se.
Fisher disagreed with Calva as to the primary irritant properties of the various chemical ingredients of 5-20-20 fertilizer. He stated that such chemicals at the concentrations found in the fertilizer could not be considered as primary irritants. Ordinary table salt could cause a burning sensation if applied to a previously damaged area. In testifying as to whether or not a substance is considered a primary irritant, Dr. Fisher admitted:
“There might be individual ones that one person might agree about and another would disagree.”
When Hungerholt was examined by Dr. Fisher, he refused upon advice to submit to a patch test because of the danger of further injury to him in his acute condition.
Dr. Ramon M. Fusaro was called as a witness for the appellant. He described making “patch tests” in which the suspect material was applied directly to the skin and held there by use of a protective gauze. 5-20-20 fertilizer made from both anhydrous ammonia and Solution 490 applied to the skin of the subjects was negative at 16 and 48 hours.
Dr. Sevenants and Mr. Calva explained that they did not make such tests on the appellee since their training and experience taught them that certain ingredients in the fertilizer were primary irritants without the necessity of such tests. Dr. Sevenants additionally stated that in Hungerholt’s condition such a test would be contraindicated because of the strong possibility of aggravating the irritation. He testified:
“Q. Now, Doctor, did you at any time from the time you first saw Mr. Hungerholt until now run any patch tests ?
“A. No, sir, I didn’t.
“Q. Could you tell the jury why?
“A. I think there were two reasons, two good reasons why: One was the history as he gave it to me and the appearance of the lesions, that is, the worst ones being on his legs and on his right ankle — they were the worst ones, the primary ones. The diagnosis seemed obvious to me. And the second reason, probably more important, is that his skin has never cleared completely so it is normal, and to do a patch test on that skin would risk blowing him up again so that a positive patch test could have relighted the dermatitis and made him much worse.
“Q. For medical reasons then you felt it was neither indicated nor necessary?
“A. That is right.”
Three chemists who worked in the fertilizer field were called by the appellant. They testified that the process used by Land O’Lakes was similar to the processes used elsewhere in the industry; that they had considerable contact with and had suffered no personal reaction from fertilizer thus produced and had heard of no case in which others working in the industry had been so affected. They expressed an opinion that in their concentration and condition none of the ingredients produced by either the use of anhydrous ammonia or Solution 490 would cause an injurious reaction when applied to the human skin. Their testimony generally negatived that of Mr, Calva and Dr. Sevenants. Other witnesses for the appellant testified to having had considerable contact with the fertilizer with no ill effects.
This being a diversity case, we look to the law of Minnesota as controlling. The duty or responsibility of the manufacturer or compounder of products containing harmful ingredients and which are offered for sale to the public has been expressed by the Supreme Court of Minnesota in McCrossin v. Noyes Bros. & Cutler, 1919, 143 Minn. 181, 173 N.W. 566, at page 567, where that court stated:
“* * * Substances or compounds imminently dangerous, no matter for what use intended, may not be placed before the public without due care to warn against the inherent dangers.
“ * * * as a general rule, the manufacturer or compounder of articles for the market, containing deadly ingredients or qualities, owes a duty to those into whose hands the articles may come to suitably convey notice of the danger, so that proper precautions may be taken to prevent a wrongful use and consequent injury. This is generally done by naming or properly labeling the package in which the articles are marketed. In Hasbrouck v. Armour & Co., 139 Wis. 357, 121 N.W. 157, 23 L.R.A.(N.S.) 876, the law is stated thus:
“ ‘A manufacturer or vendor, putting out and selling articles inherently dangerous, such as explosives or poisons, without notice to others of their dangerous nature and qualities, or with a misleading notice, or negligently in any other way, is liable for any injury to any third person which might have been reasonably foreseen by the manufacturer or dealer in the exercise of ordinary care.’ ” (Emphasis supplied.)
In the more recent case of Atkins v. Jones & Laughlin Steel Corp., 1960, 258 Minn. 571, 104 N.W.2d 888, the complaint alleged that on or about May 18, 1958, the plaintiff, a truck driver, while hauling and unloading a certain product distributed by the defendant, Montanin Company, Inc., known as “Montanin”, had been injured as the result of negligent, careless and unlawful acts of the defendant. While that case, in its then posture, was primarily concerned with the Minnesota court’s jurisdiction over a foreign corporation, Mr. Justice Gallagher stated the applicable Minnesota law at page 892 of 104 N.W.2d as follows:
“It is well settled that a manufacturer, regardless of privity of contract, is liable to an ultimate user of his product or to others who may reasonably be expected to be in the vicinity of its probable use for injuries arising from his negligence in the manufacture or containment of the product.”
Citing Lovejoy v. Minneapolis-Moline Power Implement Co., 1956, 248 Minn. 319, 79 N.W.2d 688; Heise v. J. R. Clark Co., 1955, 245 Minn. 179, 71 N.W.2d 818; Wright v. Holland Furnace Co., 1932, 186 Minn. 265, 243 N.W. 387; Ellis v. Lindmark, 1929, 177 Minn. 390, 225 N.W. 395; Smith v. Peerless Glass Co., 1932, 259 N.Y. 292, 181 N.E. 576; Prosser, Torts (2 ed.) § 84.
See also Krueger v. Knutson, 1961, 261 Minn. 144, 111 N.W.2d 526, and Ford Motor Co. v. Zahn, 8 Cir., 1959, 265 F.2d 729, at page 731, which case also involved the law of Minnesota, where Judge Matthes, speaking for this court, said-:
“By force of law there is imposed upon the manufacturer of an article for sale or use the duty to exercise reasonable care to prevent defective conditions caused by a miscarriage in the manufacturing process. This duty requires reasonable skill and care in the process of manufacture and for reasonable inspection or tests to discover defects. Harper & James, Law of Torts, Vol. 2, § 28.11; Restatement of Torts § 395; and see, Egan Chevrolet Co. v. Bruner, 8 Cir., 102 F.2d 373, 122 A.L.R. 987; MacPherson v. Buick Motor Co., supra [217 N.Y. 382, 111 N.E. 1050, L.R.A.1916F, 696], and cf. Ellis v. Lindmark, 177 Minn. 390, 225 N.W. 395; Lovejoy v. Minneapolis-Moline Power Implement Co., 248 Minn. 319, 79 N.W.2d 688.”
Frumer & Freidman’s Products Liability states the general rule at § 8.01 as follows:
Ҥ 8. Duty to Warn
“§ 8.01 In General. The manufacturer’s duty is not just to use reasonable care in designing or manufacturing his product. There may be a duty to warn even though the product is perfectly made. Many cases apply the rule that the manufacturer is under the duty to adequately warn of foreseeable and latent dangers attendant upon proper and intended use of his product. In fact, in some failure-to-warn cases no contention is made that there was any defect in the product. And more often than not, proof of negligence as to defective construction or improper design presents more difficulties than proof of negligence in failing to warn.
“It is clear that this area of products liability- — duty to warn- — is one which is rapidly expanding. Lawyers in recent years have become more aware of this duty. There has perhaps been greater judicial recognition of the fact that the manufacturer must keep abreast of scientific advances and is under the duty to make tests to ascertain the nature of his product. In this scientific age the manufacturer undoubtedly has or should have superior knowledge of his product. More and more complicated products with potentiality for harm if not properly used are being sold to relatively inexperienced laymen. But the manufacturer may hesitate to warn, for fear of scaring the customer away. * * * ”
See also Restatement of Torts, §§ 388 and 395, and 1948 Supplement thereto.
Obviously the jury found the appellant was negligent; that its negligence consisted in failure to warn and also in careless bagging and handling of the fertilizer; and that such negligence was a proximate cause of appellee’s injury. The question before the trial court on the motion for judgment notwithstanding the verdict and before this court on appeal is, then, whether the evidence is sufficient to permit or sustain such findings. The appellant argues elaborately and at length that the ingredients found in 5-20-20 fertilizer could not possibly be harmful to human skin in the proportions therein contained. Nevertheless, we may not go outside the record to which this review is confined. That we might draw different inferences or arrive at a different conclusion is immaterial, since we may not substitute our judgment for that of the jury on disputed issues where substantial testimony supports either of two conclusions. See Lavender v. Kurn, 1946, 327 U.S. 645, 66 S.Ct. 740, 90 L.Ed. 916; Tennant v. Peoria & P. U. Ry. Co., 1944, 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520, rehearing denied, 321 U.S. 802, 64 S.Ct. 610, 88 L.Ed. 1089; and Ahmann v. United Air Lines, Inc., 8 Cir., 1963, 313 F.2d 274. The evidence of witnesses Sevenants and Calva, experts in their field, permits the jury’s conclusion that the fertilizer contained primary irritants when applied to human tissue with heat, irritation and moisture present and that Hungerholt’s injuries were a direct and proximate result of the fertilizer falling into his boot, and that the appellant was guilty of negligence in failing to warn by label or otherwise of the possibility of injury. A fertilizer product is, of course, not intended to be applied to the human skin but it is obviously foreseeable that skin contact would be a common incident to the use and handling of any such granulated material. Furthermore, the torn condition of some of the bags would add to the frequency and extent of such contact. The basic question is simply this: Did the fertilizer contain chemicals which could be harmful to the human skin? The appellee’s experts gave it as their opinion that it did. Appellant’s experts testified to the contrary. The jury accepted the opinion of appellee’s experts and did so on evidence sufficient to support such a conclusion. We accordingly find the District Court properly applied the law of the State of Minnesota and committed no error in denying appellant’s motions.
As an additional defense, appellant claims that if Hungerholt in fact sustained any injury or illness or suffered any damage whatsoever it was proximately caused or contributed to by his own negligence and carelessness and that it should be so held as a matter of law. The determination of whether contributory negligence exists is a matter coming clearly within the province of the jury. It is only where the evidence is such that the minds of reasonable persons could come to but one conclusion that a court may withdraw the question from the jury’s consideration. The evidence here with reference to contributory negligence would most certainly not justify a court in making that determination as a matter of law. Krueger v. Knutson, 1961, 261 Minn. 144, 111 N.W.2d 526, 531. See also United States v. Stoppelmann, 8 Cir., 1959, 266 F.2d 13, 18-20, and Farmers Union Federated Coop. Ship. Ass’n v. McChesney, 8 Cir., 1958, 251 F.2d 441, 447. Hungerholt is a truck driver who was completely unfamiliar with the chemical properties of 5-20-20 fertilizer and of any danger or harm that might come to him through contact with it under the circumstances as they existed on September 8, 1958. He had handled the appellant’s products for some months without any indication to him of any danger therein. He obviously was unaware of the cause of his condition until he went to Dr. Sevenants in March of 1959. Certainly, it could not be held as a matter of law that he was guilty of contributory negligence for returning to work after the first difficulty following the September 8, 1958, infection. He did not know and he had had no warning. In Wright v. Carter Products, 2 Cir., 1957, 244 F.2d 53, the court had before it a case in which the plaintiff had become infected through the use of Arrid. Subsequently she renewed its use and there resulted another infection. What was said by the United States Court of Appeals for the Second Circuit seems particularly applicable here on the question of contributory negligence. 244 F.2d page 60:
“Again, we believe the trial court misapplied the concepts of contributory negligence and of assumption of risk to the facts of this case. As has been pointed out by two discerning commentators, ‘Though these time-honored defenses are frequently invoked to defeat recovery, they are theoretically inapplicable when the defendant’s breach of duty is based on failure to warn. To allow these defenses is to indulge in circular reasoning, since usually the plaintiff cannot be said to have assumed a risk of which he was ignorant or to have contributed to his own injury when he had no way of reasonably ascertaining that the danger of injury existed.’ In the case at bar, Mrs. Wright had used Arrid regularly for five years without mishap. Then after one particular application she noticed a slight rash under her arms. She discontinued the use of this deodorant for several months, but on resuming its use she at first suffered no ill effect. A second application several days later precipitated the serious injury for which she now seeks recovery. In view of (1) her long and satisfactory experience with Arrid before the occurrence of the first rash, (2) her apparently harmless use of Arrid on the first application subsequent to contracting the rash, (3) her justifiable reliance on the defendant’s well publicized assertions of the ‘harmless’ nature of its product, and (4) the relative unfamiliarity of the average housewife with the chemical mysteries of the cosmetics applied periodically to her person, we do not agree with the finding that Mrs. Wright assumed the risk of her injury or contributed negligently to its occurrence.”
We conclude here that there is room for honest difference of opinion among reasonable men and accordingly the jury’s determination that Hungerholt was not guilty of contributory negligence must stand.
In connection with the charge that the trial court erred in refusing to grant a mistrial on account of the misconduct of appellee’s counsel, appellant contends:
“Throughout the trial, the defense was forced to object repeatedly to plaintiff’s counsel's use of textbooks in cross examination. Each objection was sustained. So far as these rulings went, they were correct and in accord with Farmers Union Federated Coop. Ship. Ass’n v. McChesney (C. A. 8th), 251 F.2d 441,*»
It is appellant’s contention that each time one of the questions was asked appellee’s counsel would display a book to the witness and that:
“ * * * the making of the necessary objection had the effect of emphasizing to the jury that there was a book on the subject, that it seemed — to plaintiff’s counsel at least —to be an authority, and that the defense had the temerity to object and keep the knowledge in the book from the jury. The effect was obviously prejudicial to the defense.”
An examination of the record indicates that appellee’s counsel, in conducting his cross-examination of appellant’s expert witnesses, was attempting to lay a foundation for the introduction of certain textbooks and other publications dealing with the subject about which the experts were in disagreement. As a part of the laying of the foundation for the introduction of the textbooks, etc., it was necessary, of course, to ask the witness if he was familiar with the text and if he recognized it as an authority on the subject. Upon being unable to lay a foundation necessary for admission, the court sustained each of the appellant’s objections. Accordingly, there can be no claim of error insofar as the court’s rulings were concerned. The record does not indicate to us that the exhibition of the books to the witnesses or the questioning with reference thereto in attempting to lay a foundation for their admission was done in any such manner as to be prejudicial to the appellant. The determination of that question was, of course, within the sound discretion of the trial judge. The record discloses no abuse of such discretion. Judge Donovan’s rulings were eminently correct in each instance and his conduct and control of the case exemplary.
All claims of error raised by the appellant have been considered and have been found to be without substantial merit
This case is affirmed.
. The trial court’s opinion denying the ¡ lotions wiU be found at 209 F.Supp. 177.
. Other testimony in the record was to the effect that in the manufacturing process these materials react with each other to produce a granulated and neutral finished product
. However, Stocker’s testimony and the tests of the State of Minnesota indicate that there were considerable variances in the manufacturing process in 1958 and the jury could reasonably conclude that this would substantially affect the proportions of all ingredients found in the 5-20-20 fertilizer during that year.
Question: What is the specific issue in the case within the general category of "economic activity and regulation"?
A. taxes, patents, copyright
B. torts
C. commercial disputes
D. bankruptcy, antitrust, securities
E. misc economic regulation and benefits
F. property disputes
G. other
Answer:
|
songer_appbus
|
0
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "private business and its executives". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
In re UNITED STATES of America, Petitioner.
No. 81-1517.
United States Court of Appeals, First Circuit.
Argued Oct. 7, 1981.
Decided Dec. 7, 1981.
Douglas P. Woodlock, Asst. U.S. Atty., Boston, Mass., with whom Edward F. Harrington, U.S. Atty., Boston, Mass., was on brief, for petitioner.
Gael Mahony, with whom Robert G. Dreher, and Hill & Barlow, Boston, Mass., were on brief, for respondent.
John S. Leonard and The McLaughlin Brothers, Boston, Mass., on brief, for James A. Kelly, Jr.
Before COFFIN, Chief Judge, BOWNES and BREYER, Circuit Judges.
COFFIN, Chief Judge.
This petition for mandamus is brought by a United States Attorney and seeks the enforced recusal of a United States district judge from further proceedings in a federal criminal prosecution.
During the spring of 1981, former Massachusetts state Senator James A. Kelly, Jr., was tried in Boston for extortion in violation of federal law. 18 U.S.C. § 1951. The government charged that he had wielded his power as a state senator and Chairman of the Senate Ways and Means Committee to exact $34,000 from an architectural firm, promising to influence the award of architectural contracts. United States District Judge Joseph L. Tauro, assigned by random draw, conducted the 25-day trial which ended on April 29 in the declaration of a mistrial when the jury reached an eleven-to-one deadlock after approximately thirteen hours of deliberation.
On June 16, in the course of proceedings preparatory to a retrial, the United States Attorney responsible for the prosecution filed a motion for disqualification of the judge under 28 U.S.C. § 455(a). The judge, on July 9, issued a lengthy memorandum discussing the sufficiency of the allegations justifying recusal and denied the motion. He further suggested that this court in the exercise of its supervisory powers give prompt consideration to the propriety of his action. We declined to take this approach. Subsequently the prosecutor brought this petition.
The Facts
The essence of the prosecution’s motion for disqualification and this petition is that the combination of (1) the judge’s past and present close professional and personal relationship with former Massachusetts Governor John Volpe, (2) defendant Kelly’s reported helpfulness to the governor during a 1966 legislative investigation chaired by Kelly, and (3) the judge’s own reported involvement in that proceeding as the governor’s legal counsel would compel a reasonable observer to doubt that the judge would be impartial in any future proceeding or retrial connected with this prosecution. The prosecutor makes a subsidiary argument: because of the appearance of bias arising from these factors, several rulings during the trial lend themselves to the interpretation that they were the result of the bias.
We discuss the relevant facts in several time frames — what the prosecutor was aware of before the case went to trial, what was reported by newspaper columnists soon after the mistrial was declared, and what was revealed by an FBI investigation spurred by one of the newspaper accounts. Before the case went to trial, the U.S. Attorney was aware that the judge, before ascending to the bench, had been chief legal counsel for Governor Volpe in 1966 when Senator Kelly, a Democrat, had chaired a legislative investigation of the Republican Volpe administration; that the investigation focussed on the way in which the administration awarded architectural contracts; that Kelly had supposedly handled the matter in a manner favorable to the administration; and that there were vague rumors to the effect that the judge and Kelly had known each other during that period.
Early in January, 1981, the U.S. Attorney approached the judge about the possibility that he should disqualify himself from another case. In the course of discussing this matter, the judge brought up the fact that a reporter had just told him he should not sit on the Kelly case. He went on to say that the only role he had played in the administration’s defense during the 1966 investigation was to consult with attorney Walter McLaughlin who represented Governor Volpe’s brother, also under investigation. At this point, the U.S. Attorney felt that he had no specific, reliable information about the roles of the judge and Kelly in the investigation or the degree of the judge’s relationship with Volpe.
Subsequently, during the trial, the prosecutor received queries “from a variety of sources, including members of the bar, the judiciary, the press and politicians” about the propriety of the judge presiding over this particular trial. The issue came into public view when two articles appeared in the Boston papers. On May 20, three weeks after the declaration of mistrial, Boston Herald American columnist, Peter Lucas, wrote that “Tauro knew Kelly. State House observers believed that Kelly went in the tank to Volpe on that investigation.” While publicly questioning the propriety of the judge continuing to preside over the case, the columnist did not supply the prosecutor with any new information.
Shortly thereafter another columnist, David Wilson, writing for the Boston Globe, brought the issue to a head. In a June 1 column he noted that in 1966 the judge had been in the inner circle of Governor Volpe’s Republican campaign forces, that the judge owed his appointment as a judge to Volpe, that Volpe’s campaign had been threatened by the investigation, and that Kelly was the chairman of the investigatory committee. “[W]hen the Volpe organization communicated its wishes to Chairman Kelly, the communicator, so far as anyone in Kelly’s hearing room could tell, was Atty. Joseph L. Tauro. Frequent Tauro-Kelly conferences had Democratic members seething.” Wilson stated that Kelly had wanted to withhold publication of the committee’s report until after the election. The impression conveyed was that the judge appeared to have reason for gratitude for favors rendered to him as the result of his personal communications with Kelly.
The Wilson article caused the prosecutor to instigate an FBI investigation to probe the facts of the reported relationships. He felt that inaction was no longer appropriate: specific allegations — in particular the labelling of the judge as “communicator”— created a previously unknown cause for concern. The FBI investigation, which involved interviews with some fifteen persons who had been involved in or close to the 1966 hearings, turned up no evidence whatsoever that the judge had ever communicated with Kelly concerning the investigation or had ever had any conferences with him. Although the investigation provided no support for the triggering allegation that the judge was “the communicator”, it did reveal in detail the roles of various individuals in the 1966 hearings.
One focus of the investigation was the nature of the judge’s involvement in the 1966 hearings. He did not directly participate, there being other attorneys representing the specific targets of the contract award inquiry, but he did play a substantial role by preparing witnesses, planning strategy, consulting closely with Walter McLaughlin, the attorney representing the governor’s brother, attending hearings as an observer, and reporting to the governor. There was no evidence that he ever conferred with any of the committee members.
A second focus of the FBI investigation was the issue of bias in favor of the Volpe administration on the part of Senator Kelly. The principal source of information tending to show such bias was a conversation between FBI agents and one Beryl W. Cohen, in 1966 a senator and member of Kelly’s committee and also a Democratic candidate for the office of lieutenant governor. Cohen recalled that Kelly had initially tried to control the hearings, not allowing others to ask questions and not asking probing questions himself, but soon lost this control when others gained the right to ask questions. After the hearings were over, Cohen, feeling that Kelly was not going to submit a written report, found someone to prepare a report. Cohen felt there had to be some arrangement between Kelly and the Volpe administration but never learned what it was. In addition to Cohen’s views, the investigation revealed that Kelly had characterized the investigation as “political”, adding that “everything is political”, had leaked a copy of the report to the governor’s office, and, though a Democrat, had supported the governor’s sales tax proposal.
Factors in the report tending to contradict or minimize Kelly’s bias include Cohen’s posture as a candidate for top office in an election year who had an incentive to exploit to the maximum any legislative inquiry into an opposing administration; the fact that the committee had neither staff nor funding for help in preparing a report; and the fact that in any event Kelly not only signed the report but presented it at a press conference. The report did contain damaging material but had little impact, Volpe winning reelection overwhelmingly. One conclusion emerges clearly. Whether or not Kelly was a biased chairman, by conviction or prearrangement, he does not seem to have had much influence on the outcome of his committee’s work.
A third area of information in the FBI report was the close personal and professional relationship between the judge and Governor Volpe. Professionally, the judge, when serving as legal counsel, was also part of Volpe’s “kitchen cabinet” and, indeed, was the only person apart from the chief secretary to have direct access to the governor. The ties of personal friendship were close and longstanding. Volpe’s wife was the attending nurse at the judge’s birth. The judge’s father previously had served as Volpe’s legal counsel until Volpe appointed him to the Massachusetts Superior Court, and, reportedly, the judge owed his nomination for the position of district court judge to Volpe’s efforts. The judge’s personal regard for Volpe continues to this day.
In addition to the FBI report, the prosecutor was influenced by what he called the “parallelism” of the 1966 investigation and the Kelly trial. The subject matter at issue — extortion in the granting of architectural contracts — was the same. The cast of characters was similar, although their positions had changed. The judge had been legal counsel in 1966. Kelly, then “prosecutor”, was now defendant. Moreover, Kelly was represented at trial by George A. McLaughlin, nephew and then-partner of the Walter McLaughlin who has represented Peter Volpe in the 1966 investigation, although now engaged in a separate practice. Finally, two key government witnesses against Kelly, Frank and William Masiello of the firm from which Kelly allegedly extorted money, had recently testified before an investigating commission that people formerly associated with the Volpe administration, including members of the “kitchen cabinet”, were involved in arranging awards of architectural contracts in exchange for political contributions.
In sum, the prosecutor feared that the judge’s involvement in the 1966 investigation would have made him aware of Kelly’s apparently favorable actions in a proceeding potentially damaging to his close personal, political, and professional associate, Volpe, and that this incentive to return a favor, together with the “parallelisms”, could give the public reason to believe that the judge might favor Kelly in the present proceeding whenever possible. In addition, there was the possibility that the Masiellos’ previous tarnishing of the Volpe reputation might create the suspicion that the judge would be unduly harsh upon the Masiellos when appearing as witnesses in this case. The government points to rulings made during Kelly’s trial that it says substantiate the appearance of partiality. All of this evidence the government found sufficient to justify the filing of a motion for disqualification.
Before beginning our analysis of the propriety of the judge’s denial of that motion, we note that these relationships and parallelisms were in large outline obvious long before the Kelly trial began. Some of the information provided by the FBI investigation may have given the prosecutor new detail, but much duplicated what had already been known. These circumstances illustrate the problem that arises when a litigant files a motion for recusal after the trial is concluded. He may have proceeded with the first trial to test the court’s reaction only later to marshal previously known information in an attempt to get the proverbial second bite at the apple. Even if a litigant were not consciously attempting to manipulate the circumstances to his benefit, the potential waste of judicial resources alone requires that a motion for disqualification be timely filed. See generally In re International Business Machines Corp., 618 F.2d 923, 932-34 (2d Cir. 1980). While we accept the prosecutor’s position that he had not felt that an earlier motion to disqualify would have been justified by the facts then available to him and do not find this motion to be untimely, the issue as to timeliness is close. A ruling that the motion to disqualify was not timely might arguably have been sustainable.
Our Standard of Review
Although we maintain a standing watch over attempted piecemeal review, whether by interlocutory appeal or petitions for writs of mandamus, see In re Continental Investment Corp., 637 F.2d 1 (1st Cir. 1980), the issue of judicial disqualification presents an extraordinary situation suitable for the exercise of our mandamus jurisdiction. See, e.g., In re International Business Machines Corp., supra, 618 F.2d at 927; In re Corrugated Container Antitrust Litigation, 614 F.2d 958, 961 n.4 (5th Cir.), cert. denied, 449 U.S. 888, 101 S.Ct. 244, 66 L.Ed.2d 114 (1980); SCA Services, Inc. v. Morgan, 557 F.2d 110, 117 (7th Cir. 1977) (per curiam); In re Rodgers, 537 F.2d 1196, 1197 n.1 (4th Cir. 1976) (per curiam); cf. Pfizer, Inc. v. Lord, 456 F.2d 532, 536 (8th Cir. 1972) (per curiam). A case involving a motion for disqualification is clearly distinguishable from those where a party alleges an error of law that, despite the hardship of delay, may be fully addressed and remedied on appeal. See United States v. Kane, 646 F.2d 4, 9-10 (1st Cir. 1981). In the case at bar, the issue of partiality has been broadly publicized, and the claim of bias cannot be labelled as frivolous and deferred until final appeal. “[Pjublic confidence in the courts [requires] that such a question be disposed of at the earliest possible opportunity.” In re Union Leader Corp., 292 F.2d 381, 384 (1st Cir.), cert. denied, 368 U.S. 927, 82 S.Ct. 361, 7 L.Ed.2d 190 (1961).
Turning now to the question of the standard governing our decision, we start with the statutory provision that a judge “shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned”. 28 U.S.C. § 455(a). We deem it of first importance to recognize at the outset the twin — and sometimes competing — policies that bear on the application of this standard. The first and most obvious policy is that courts must not only be, but must seem to be, free of bias or prejudice. To ensure that the proceedings appear to the public to be impartial and hence worthy of their confidence, the situation must be viewed through the eyes of the objective, person. See H.Rep.No. 1453, 93d Cong., 2d Sess., 1974 U.S.Code Cong. & Admin.News 6351, 6355.
A second and less obvious policy is that a judge once having drawn a case should not recuse himself on a unsupported, irrational, or highly tenuous speculation; were he or she to do so, the price of maintaining the purity of appearance would be the power of litigants or third parties to exercise a negative veto over the assignment of judges. Because there exists this second policy, our inquiry cannot stop with the questions: have a number of people thought or said that a judge should not preside over a given case? has the judge’s failure to recuse himself been a subject of unfavorable comment in the media? or, would the judge have avoided controversy and the need for appellate review if he had stepped aside? Instead, we must conduct our review in accordance with ground rules designed to determine when the fear of partiality is real and strong enough to require disqualification.
First, a charge of partiality must be supported by a factual basis. See, e.g., United States v. Mirkin, 649 F.2d 78, 82 (1st Cir. 1981); United States v. Cowden, 545 F.2d 257, 265 (1st Cir. 1976), cert. denied, 430 U.S. 909, 97 S.Ct. 1181, 51 L.Ed.2d 585 (1977); accord, H.Rep.No. 1453, 1974 U.S. Code Cong. & Admin.News, supra, at 6355. Although public confidence may be as much shaken by publicized inferences of bias that are false as by those that are true, a judge considering whether to disqualify himself must ignore rumors, innuendos, and erroneous information published as fact in the newspapers. Compare United States v. Cepeda Penes, 577 F.2d 754, 758 (1st Cir. 1978) with Spires v. Hearst Corp., 420 F.Supp. 304, 307 (D.C.Cal.1976). To find otherwise would allow an irresponsible, vindictive or self-interested press informant and/or an irresponsible, misinformed or careless reporter to control the choice of judge. Second, disqualification is appropriate only if the facts provide what an objective, knowledgeable member of the public would find to be a reasonable basis for doubting the judge’s impartiality. Were less required, a judge could abdicate in difficult cases at the mere sound of controversy or a litigant could avoid adverse decisions by alleging the slightest of factual bases for bias. See H.Rep.No. 1453, 1974 U.S.Code Cong. & Admin.News, supra, at 6355. This restricted mandate to disqualify is calculated to induce a judge to tread the narrow path between timidity and tenacity.
We recognize that the analysis of allegations, the balancing of policies, and the resulting decision whether to disqualify are in the first instance committed to the district judge. And, since in many cases reasonable deciders may disagree, the district judge is allowed a range of discretion. The appellate court, therefore, must ask itself not whether it would have decided as did the trial court, but whether that decision cannot be defended as a rational conclusion supported by reasonable reading of the record. Moreover, in this case, which comes to us by a petition for mandamus, the party seeking the writ of mandamus must show a “clear and indisputable” right to relief. Kerr v. United States District Court, 426 U.S. 394, 403, 96 S.Ct. 2119, 2124, 48 L.Ed.2d 725 (1976); In re International Business Machines Corp., supra, 618 F.2d at 926; In re Corrugated Container Antitrust Litigation, supra, 614 F.2d at 962.
Applying the Standard
We now turn to consideration of whether on the facts before us a reasonable person would clearly have doubted the judge’s impartiality. Certainly some of the public and press did question his impartiality, but to the extent that the doubts were created by representations of the press shown to be not grounded in fact, they cannot require disqualification. What we have referred to as the event triggering the FBI investigation, the Wilson article, aroused fears by publishing the claim that Tauro has been “the communicator” with Kelly, holding frequent conferences with Kelly that caused resentment. This centerpiece claim never having been supported in the slightest degree, we must disregard it and any impressions of partiality it may have created. Attempting to exorcise this factor from our analysis is difficult, but our analysis must be limited to more indirect relationships and potentials for bias.
Basic to our analysis is the undisputed conclusion that the judge did in fact have a close relationship with Governor Volpe. It is from this relationship that the government infers two different causes for an appearance of partiality: it reasons that the judge’s allegiance to Volpe would appear to cause him to reward Kelly for handling the 1966 investigation in a manner favorable to Volpe, and that his allegiance to Volpe might make the public doubt his ability to respond impartially to the Masiellos when they appear as witnesses at Kelly’s trial. The success of the argument that the judge’s gratitude to Kelly will cause an appearance of impartiality depends upon finding that a reasonable person would conclude (1) that Kelly actually did act in a manner favorable to Volpe during the 1966 investigation, (2) that the judge was aware of Kelly’s actions, and (3) that the feeling of gratitude was so deep and enduring as to cause him to act in a biased manner today.
Addressing the second factor first, we think it clear that the judge would have been aware of the manner in which Kelly conducted the hearings and sensitive to any favorable treatment given the administration. The first query — whether Kelly actually did favor the administration — is more difficult. As our earlier discussion of the investigation indicates, Kelly’s actions can be interpreted either as very partial toward the administration if viewed in light of then-Senator Cohen’s comments, or as fair in that Kelly asked some pointed, factual questions incriminating the administration and publicly stood behind the report when it was written. Given this contradictory evidence, the linchpin of the government’s case is weak. Kelly may have been no more than a chairman interested in a fair hearing. Even indulging inferences favorable to the prosecutor, we conclude that at most Kelly’s actions portray someone with less than a killer instinct or someone in the circumstances unable to give effective voice to such an instinct, or both. This perception, however, might well have provided a basis for the judge and others in Volpe’s camp to be thankful, at least until Kelly lost control of the committee.
The remaining factor — whether the judge’s awareness of Kelly’s favorable conduct fifteen years ago would prompt a reasonable observer to believe that the judge would be partial toward Kelly in a current criminal trial — is critical. As we have observed, even if Kelly’s motivation may have been to give the strongest help to the Volpe administration, his actual performance provided little assistance. Whether or not this was enough to generate a reasonable expectation of gratitude in the months immediately following the hearing, it surely lacks the significance to endure a decade and a half. Even, however, if one may assume the survival of some residue of gratitude after such a period, it is beyond contemplation that such gratitude would be of the weight necessary to cause a judge to jettison his impartiality and, in open court day after day, to violate his deepest professional and ethical commitments as a judge.
We turn to the second alleged reason for disqualification, that the Masiellos’ impugning of the Volpe administration during a recent investigation might give rise to suspicions that the judge would mistreat them during trial. While the Masiellos’ testimony before the commission may have made the judge feel uncomfortable by reason of his association with the incriminated kitchen cabinet members and defensive out of loyalty to Volpe, we do not think it clear enough that an objective person would find either his discomfort or loyalty sufficient to cause a reasonable doubt about his ability to deal with the Masiellos today in an impartial manner. Moreover, because the Masiellos are not repeating their previous testimony at the present trial and are not a party to the trial with any stake in the evidentiary rulings, it would seem to us that both the motive and opportunity for significant reprisal would be slim.
Our conclusions with respect to both of the possible causes of bias — gratitude to Kelly for his effort to help an old friend and hostility to the Masiellos for their damaging testimony — are strengthened by the implications of an opposite outcome. If the receipt by a judge’s friend of a favor long ago from one who is a present litigant should disqualify the judge, judges could hope to preside without challenge solely in communities in- which they are strangers. For when a judge presides in an area where he and his family have lived for one or more generations, the numbers of people who have, directly or indirectly, helped family members, relatives, close friends, and friends of friends would form a large and indeterminate community. So also are there bound to be indefinite numbers of people who have been critical of or been on opposite sides of controversies with families, relatives, and friends. Not only would the role of judges be severely constricted by requiring disqualification under these circumstances but the result would reflect a more jaundiced view as to when there should be a reasonable doubt about a judge’s impartiality than accords with the public perception.
We freely recognize that there are many instances when past associations may require disqualification and we do not lightly deny relief in this instance. We are constrained, however, by our standard of review, requiring (1) that the government show that the judge has violated his considerable discretion to balance the need to disqualify himself to preserve public faith in impartiality against the reasons for sitting when there is not sufficient reason for disqualification and (2) that this showing be strong enough to establish a “clear and indisputable” right to a writ of mandamus. Even viewing all of the facts and inferences in a manner most favorable to the government, we cannot say that the only conclusion on this record as a matter of law is that the judge should have disqualified himself. Such a ruling would go far to establish the precedent that any suspicion of partiality, though tenuous and remote in origin, would suffice to compel disqualification.
Despite our conclusion that the factual basis is not sufficient to persuade a reasonable observer of an appearance of partiality, we take one additional step and look at the judge’s conduct at trial to see whether it reveals any grounds that might cause an observer to doubt his impartiality. It may well be that our inquiry should end before taking this step. See Brody v. President & Fellows of Harvard College, 664 F.2d 10 at 12 (1st Cir. Nov. 16, 1981). The government has stated that the judge’s conduct at trial is significant only in the context of the appearance of bias arising from the relationships discussed above, a context already demonstrated not to support such an appearance. Recognizing, however, that this case is largely a product of interest generated by the press and that the interest continues to be widespread, and wishing to avoid the impression that we have not examined all claims that have been made, we proceed to examine the judge’s challenged trial conduct. We have reviewed in detail the government’s claims that certain rulings evidence an appearance of partiality and report our findings very summarily. More detail would dignify a kind of attack that should be reserved for only the most egregious rulings, the danger being that to give more detailed answers would allow the government an appeal on trial rulings to which it is not now entitled.
In the course of a twenty-five day trial we can assume that there must have been at least several hundred rulings. Of these, the government has objected primarily to only a handful of evidentiary rulings on the testimony of five witnesses and the admission of one exhibit. In addition, it cites the judge’s jury instructions and his declaration of a mistrial as evidence of an appearance of bias. None of these objections, as illustrated below, have substance enough to fill the gap we have already found to exist in the government’s case.
The government objects to a ruling that prevented examination of one of the witnesses’ state of mind about the purpose of the “retainer” he paid to Kelly’s firm when, regardless of the correctness of that ruling, the witness was still allowed to testify over Kelly’s objection to a similar end that he had told another person that Kelly was trying to extort money from the corporation. Another objection is that the government was not allowed for technical reasons to rehabilitate one of its witnesses, a ruling which, again, whether correct or not, was counterbalanced by the fact that the same witness testified that his purpose in authorizing the retainer to the Kelly firm was to obtain new business. This was a basis, if believed, for finding Kelly guilty. Another example is the government’s complaint about the exclusion of a prior inconsistent statement, an objection that ignores the fact that such statements are admissible only if made when the witness had no reason to testify falsely and that the witness had already been promised immunity. Still another is the objection to the exclusion of the testimony that allegedly would have affected the running of the limitations period by clearly establishing when the most recent payments had occurred. Our reading of the records, however, has revealed no specific exclusions of specific dates.
One last contention that we note is the argument that the judge appeared to be biased when he declared a mistrial after the jurors had reached an eleven-to-one deadlock following approximately thirteen hours of deliberation. The government thinks the time for deliberation too short to declare a mistrial, given a twenty-five day trial, but it had agreed to the volley of notes to the jury that probed the issue of deadlock and precipitated the declaration of mistrial. We emphasize in passing the salient fact that the division in the jury was eleven for conviction to one for acquittal. An objective observer, we think, would conclude that this result hardly points to a twenty-five day effort by an able judge to favor the defendant.
In sum, we might, if forced to make rulings now — a result that should be avoided to prevent the inevitable distortion of an appeal — find that some of the judge’s rulings were indisputably correct, some marginal, and some in error, though whether reversible or not would, without more specific research, be impossible to say. This is not the kind of record in light of the total context that would compel us to require that the judge not conduct any further proceedings in this matter.
The petition for writ of mandamus is denied.
In this respect, the standard for judicial disqualification is not quite on the same plane as the standard for judging Caesar’s wife. It will be recalled that Caesar dismissed his wife Pompeia for having supposedly been the object of an amorous house breaking committed by Clodius even though he had nothing to charge Clodius with when he was summoned as a witness. Caesar dealt with the paradox by saying, “I wish my wife to be not so much as suspected.” Plutarch, The Lives of the Noble Grecians and Romans 860 (Modem Library, N.Y.). In other words, Caesar was willing to base the decision as to spousal removal on suspicion alone, whether reasonable or not.
Question: What is the total number of appellants in the case that fall into the category "private business and its executives"? Answer with a number.
Answer:
|
songer_r_fed
|
1
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "the federal government, its agencies, and officials". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Vern U. AYRES, Appellant, v. UNITED STATES of America, Appellee.
No. 10853.
Circuit Court of Appeals, Ninth Circuit.
Nov. 10, 1944.
Morris Lavine, of Los Angeles, Cal., for appellant.
Charles H. Carr, U. S. Atty., and Ray H. Kinnison, Asst. U. S. Atty., both of Los Angeles, Cal., for appellee.
Before WILBUR, GARRECHT, and MATHEWS, Circuit Judges.
PER CURIAM.
Upon consideration of the stipulation of counsel for respective parties for dismissal of appeal herein and good cause therefor appearing, it is ordered that the appeal herein be dismissed, that a judgment be filed and entered accordingly and that the mandate of this court in this cause issue forthwith.
Question: What is the total number of respondents in the case that fall into the category "the federal government, its agencies, and officialss"? Answer with a number.
Answer:
|
songer_appbus
|
0
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "private business and its executives". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Robert F. ZEDDIES, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE Respondent.
No. 12433.
United States Court of Appeals Seventh Circuit.
Feb. 20, 1959.
Rehearing Denied March 30, 1959.
G. Kent Yowell, John J. Yowell, Chicago, 111., for petitioner.
Charles K. Rice, Asst. Atty. Gen., James P. Turner, Atty., Tax Division, U. S. Dept, of Justice, Washington, D. C., Lee A. Jackson, Robert N. Anderson, Attys., Dept, of Justice, Washington, D. C., for respondent.
Before DUFFY, Chief Judge, and MAJOR and HASTINGS, Circuit Judges.
HASTINGS, Circuit Judge.
Petitioner, Robert F. Zeddies (taxpayer), sought, in this action, to set aside deficiencies in federal income tax and fraud penalties determined by respondent, Commissioner of Internal Revenue (Commissioner), for the tax years 1942 through 1947, as follows;
Year Deficiency Addition to Tax § 293(b)
1942 .........$ 1,358.65 674.33
1943 ......... 7,120.66 4,537.48
1944 ......... 13,696.59 7,798.77
1945 ......... 71,006.44 35,724.67
1946 ......... 137,212.93 68,606.47
1947 ......... 41,301.98 20,650.99
Total ......$271,697.25 $137,992.71 $409,689.96
At the hearing before the Tax Court of the United States, it was conceded by the Commissioner that the deficiencies for 1942 and 1943 were not due to fraud and that such assessments were accordingly barred by the statute of limitations. As to the other years the Tax Court made specific findings based upon the evidence submitted at the trial and redetermined the deficiencies and penalties as follows:
Addition to Tax
Year Deficiency § 293(b)
1944 .........$ 10,762.41 $ 6,331.68
1945 ......... 50,983.70 25,713.30
1946 ......... 99,982.40 49,991.20
1947 ......... 32,679.83 16,339.92
Total......$194,408.34 $98,376.10 $292,784.44
The Tax Court found that at least part of the deficiency for each of the taxable years, 1944 through 1947, was due to fraud with intent to evade payment of tax. Taxpayer’s motion for reconsideration was denied and this petition for review followed. Taxpayer contends that the determination of the deficiencies and the findings of fraud are not supported by substantial evidence and are clearly erroneous and that the decision is contrary to law. Since the findings of fact resulting in the Tax Court’s determination of the deficiencies and fraud penalties are under direct attack, we shall first summarize them as follows:
Taxpayer’s Business
For many years taxpayer was a food broker and salesman in the Chicago area. Most of the time he represented a number of candy manufacturers who sold their products to retail grocery stores, paying his own expenses and receiving commissions for his services. This representation of candy manufacturers continued throughout the taxable period.
During World War II, candy and the ingredients used to manufacture it, primarily sugar and corn syrup, were in short supply. The Office of Price Administration placed ceiling prices on the sale of candy, and sugar and corn syrup were rationed. The maximum ceiling on candy sold by manufacturers was based on the manufacturer’s pre-war price. Retailer’s ceiling prices were based on the cost of the candy to the retailer plus a certain percentage of mark-up over cost. Because of these restrictions, some manufacturers of candy established quotas for their customers under which they sold candy to former customers on a percentage of purchases made before the war.
By 1942, Kroger Grocery & Baking Company (Kroger), a retail grocery chain, was one of taxpayer’s customers. Kroger had formerly manufactured its own candy for sale in its stores, but the rationing of sugar sharply curtailed this activity; and it was unable to adequately supply its stores. Because it had done little business with candy manufacturers before the war, Kroger had few sources of supply. Kroger employed taxpayer to procure candy for its stores, paying him a commission of five percent on all candy he purchased for them. Kroger furnished him a desk and stenographer in its Chicago office. Otherwise, taxpayer bore his own expenses in procuring candy.
After discussing his sources of supply with Kroger, taxpayer then bought the candy and arranged to have it sold to Kroger in retail units. The price to Kroger included packaging costs and a profit to the packaging company. When taxpayer bought in bulk lots he frequently sold it to East India Nut Company (East India), a packaging concern, which would then pack it in retail units, resell it to Kroger, and pay taxpayer a five percent commission on such sales.
Commissions
The Tax Court’s findings with respect to commissions received by taxpayer during the taxable period were as follows :
Year Commissions Received Commissions Reported Commissions Unreported
1944 .........$41,061.17 ,422.70 $ 638.47
1945 ......... 45,856.36 43,792.08 2,064.28
1946 ......... 79,811.97 57,161.89 22,650.08
1947 ......... 48,431.44 38,960.22 9,471.22
Included in the above were commissions from East India of $331.80 in 1944; $1,196.25 in 1945; $10,393.01 in 1946; and $323.23 in 1947. A part of the commissions received in 1946 was the sum of $5,479.82 which had been billed to East India by taxpayer on invoices of Zerna Products Company as sales of chocolate peanuts.
Taxpayer also did business with Kroger through Carol Lynn Products Company (Carol Lynn), a candy packaging partnership in which he owned a one-half interest. Carol Lynn received candy obtained by taxpayer, packaged it, sold it and paid taxpayer commissions of $17,-591.76 in 1946 and $9,167.51 in 1947, which are included in the foregoing summary.
Petitioner did not report the commissions received from East India and Carol Lynn on his tax returns, and neither East India nor Carol Lynn reported them by filing Form 1099 with the Commissioner.
Profits from Sales
During the taxable period taxpayer bought bulk candy at wholesale prices from various manufacturers in his own name and as Zerna Products Company, storing it either at East India or in a Chicago warehouse. Taxpayer used his own funds for this purpose and received the proceeds from the sales. He received the invoices from such supplies and issued invoices covering the sales. In conducting this part of the business, taxpayer used an office furnished him free of charge by East India.
Taxpayer kept no formal books and records of the kinds, quantities or costs of candy. He had no bookkeeper to record his business transactions and did not maintain a journal or ledger to record purchases and sales during the taxable years. Part of this candy was spoiled or unsaleable candy, including some he repurchased from Kroger under agreement. Whenever possible, he sold or traded the spoiled and inferior candy, principally to a William Schmeckebier, and sometimes at a profit.
The Tax Court’s findings with respect to taxpayer’s purchases of candy from suppliers at ceiling prices and his sales of candy to customers during the taxable period (omitting the names of the suppliers and customers) were as follows:
1944 1945 1946 1947
Purchases......$ 7,731.73 $ 97,955.81 $244,905.54 $224,973.94
Sales.......... 13,654.20 155,843.73 363,959.95 265,015.80
In addition to paying the invoice price of candy he purchased, taxpayer made “overceiling” payments to manufacturers and brokers. These payments were “bonuses” in excess of the ceiling price and were made in cash or in ingredients for use in candy manufacturing. The invoices of candy purchased in this manner did not reflect the “bonus” payment but included only the manufacturer’s ceiling price. Taxpayer included the “bonus” payment in the price he quoted to his customers for the candy. Kroger, his principal customer, knew that the cost of certain candy to them included overceiling payments but paid the cost without objection in order to get this merchandise.
The Tax Court found that taxpayer made overeeiling payments of $2,000 in 1944; $20,000 in 1945; $40,000 in 1946; and $10,000 in 1947, and properly allowed these as part of the cost of goods sold. It then found and determined taxpayer’s unreported income from profits from sales of candy during the taxable period to be as follows:
1944 $ 3,992.47
1945 37,887.92
1946 79,054.41
1947 30,041.86
Partnership Income
On November 1, 1944, taxpayer and Frank W. Brinkman formed a partnership to conduct a candy brokerage business in Chicago which operated under both the names of Frank W. Brinkman & Associates and Carol Lynn Products Company. Taxpayer advanced initial capital of $5,000, and Brinkman devoted full time to the business. The two partners agreed to share the partnership profits equally.
The partnership tax returns for the taxable years 1945 and 1946 showed taxpayer’s share of the net income to be $1,096.30 and $1,433.79, respectively, and in 1947 reflected a loss to taxpayer of $1,945.87. Taxpayer did not report any of this partnership income or loss for any of the years 1945, 1946 or 1947. The Tax Court sustained the Commissioner’s redetermination of taxpayer’s distributive share of partnership income to be $12,936.08 in 1945 and $6,644.91 in 1946, and his share of partnership loss in 1947 to be $173.97.
Business Expenses
In conducting his business of buying and selling candy, taxpayer incurred losses during the taxable years. These resulted from “slow-moving” and spoiled candy, pilferage and shrinkage reflected in inventory loss, prizes for sales promotions to induce sales by Kroger employees, sales promotions, entertainment of buyers and purchasing agents, traveling expense, and auto expenses. The Tax Court detailed as to each of these items the deductions claimed by taxpayer, the amounts allowed and disallowed by the Commissioner, and the determination it made of the correct amount of each of these expenses for each of the taxable years. Without setting out the various items, the following summary will reflect the totals as determined by the parties and as redetermined by the Tax Court:
Expenses 1944 1945 1946 1947
Claimed by taxpayer $29,650 $31,980 $37,850 $23,745
Allowed by Commissioner 10,450 9,550 9,150 6,025
Allowed by Tax Court 10,550 10,650 10,250 7,125
Fraud
Taxpayer’s income tax returns for the years 1944, 1945 and 1946 were prepared by Lampert, taxpayer’s lawyer, on the basis of information furnished by taxpayer. Taxpayer did not furnish Lam-pert with complete documentary evidence to support the claimed business deductions, did not inform him of the amounts of his distributive share of net income of Frank W. Brinkman & Associates for 1945 and 1946, or of the amount of commissions he received in 1946 from the Carol Lynn partnership. Lampert did not sign the returns he prepared because he did not believe there was sufficient substantiating evidence to support the information contained in them.
Taxpayer’s income tax return for 1947 was prepared by Weber, an accountant, on the basis of information supplied by taxpayer. Taxpayer did not furnish Weber any records to support the claimed business deductions, nor did taxpayer inform him of any income from the Carol Lynn partnership in the form of commissions, profits from sales or partnership income.
In 1947, a revenue agent conducted an examination of taxpayer’s income tax returns for the years 1944 and 1945. Taxpayer and Lampert were asked to produce petitioner’s books and records including bank statements, canceled checks and other documents relating to the years under examination. Taxpayer and Lampert produced no records other than a list of companies that paid taxpayer commissions during the years under investigation. The total commissions listed were the same as the totals listed on the tax returns for 1944 and 1945. Taxpayer informed the agent that he had no income in addition to the commissions reported and that he was not engaged in any business other than as a candy broker.
In 1948, revenue agents made a reexamination of taxpayer’s income tax returns for 1944 and 1945 and an original examination of his returns for the years 1946 and 1947. This examination began after leads were obtained during an investigation of Schmeckebier. Taxpayer was again asked to produce the books and records for the years under examination. The only records produced were records and canceled checks of the partnership, Frank W. Brinkman & Associates, and some of taxpayer’s own canceled cheeks. Taxpayer produced no substantiating evidence to show the purpose for which the checks were issued. Taxpayer did not produce the names of any of his candy suppliers or customers nor did he produce any purchase and sales invoices showing procurement and disposition of candy. Taxpayer did not maintain complete records of all of his sales of candy and did not furnish the agents with documentary evidence substantiating the deductions claimed on his returns. The agents obtained their information as to taxpayer’s purchases and sales of candy from the books and records of suppliers and customers of taxpayer, trucking companies and warehouses. From these records, the agents traced shipments of candy from the supplier to taxpayer and then to the ultimate customer. Taxpayer did not furnish the agents with a “workbook” showing all of his purchases and sales of candy during the taxable years.
The Tax Court then found that at least part of the deficiency for each of the taxable years involved here was due to fraud with intent to evade tax.
Taxpayer testified that his initial capital investment of $5,000 to the Brinkman partnership (Carol Lynn) represented money that belonged to his children and thereby sought to establish that they were the owners of the one-half interest, attributed to him, claiming in his petition that he held such interest as trustee for their benefit. There is nothing in the record to substantiate this claim except his own unexplained bare assertion. He admitted that his children did not report any gain or loss from the partnership. Brinkman referred only to taxpayer in his testimony. The Tax Court properly sustained the Commissioner on this point.
Taxpayer contends that the Tax Court erroneously determined the nature of his business in finding that he was in the business of buying and selling candy for his own account. He claims the evidence shows that his buying and selling activities were in connection with the procurement of candy for Kroger, and that he was a candy “broker.” There is substantial evidence in the record to support the Tax Court on this issue and such findings are not clearly erroneous.
Taxpayer challenges many of the other findings as not being supported by substantial evidence, as clearly erroneous, and made in disregard of the evidence and absent proof of fraud by clear and convincing evidence. We have carefully examined all of these contentions and have considered the record as a whole, and have concluded that taxpayer’s contentions are not well founded. It would serve no good purpose to burden this opinion with a detailed statement of these charges. The Tax Court has treated this matter rather fully in its Memorandum filed January 31, 1958, Docket No. 57280, its final decision being entered March 27, 1958.
As was stated by the late Judge Lindley of this court in Pleason v. Commissioner of Internal Revenue, 7 Cir., 1955, 226 F.2d 732, 733, it is for the trial court “to weigh the evidence, draw inferences and declare the result * * [and] our only function is to determine whether the findings are clearly erroneous, that is whether upon the whole record, there is substantial evidence to support them and whether the court erred as to the law.” See also, Wisconsin Memorial Park Co. v. Commissioner of Internal Revenue, 7 Cir., 1958, 255 F.2d 751, 753, and Rule 52(a), Federal Rules of Civil Procedure, 28 U.S.C.A.
We reject taxpayer’s contention that he has established that the Commissioner’s determination of deficiencies in his taxes were arbitrary and excessive or based on a formula which could not produce the correct amount of tax due so as to bring this case within the rule laid down in Helvering v. Taylor, 1934, 293 U.S. 507, 55 S.Ct. 287, 79 L.Ed. 623. Absent such showing, the Commissioner’s determination “has the support of a presumption of correctness, and the petitioner [taxpayer] has the burden of proving it to be wrong.” Welch v. Helvering, 1953, 290 U.S. Ill, 115, 54 S.Ct. 8, 78 L.Ed. 212; Wisconsin Memorial Park Co. v. Commissioner of Internal Revenue, supra, 255 F.2d at page 753. This does not mean that the Tax Court must agree with the Commissioner in all respects, and, in the instant case the Tax Court, under the evidence presented, did not feel bound to accept completely the Commissioner’s determination and was not precluded from reducing the deficiencies as it did in a substantial amount. Rogers v. Commissioner of Internal Revenue, 7 Cir., 1957, 248 F.2d 452, 453. The rule in Helvering v. Taylor, supra, does not prevent the Tax Court from exercising its function, in a proper case, of redetermining the deficiencies assessed by the Commissioner.
The Tax Court properly held that whatever overceiling payments had been made should be included in cost of goods sold in computing taxpayer’s profits from sales, and credit was given accordingly. See Sullenger v. Commissioner, 11 T.C. 1076, 1077.
In determining the several categories of taxpayer’s expenses or costs of sales, the Tax Court found that taxpayer failed to substantiate his claims beyond the point of proving their existence in part; and, consequently it properly made the best estimate it could from the evidence at hand in reliance upon the rule in Cohan v. Commissioner, 2 Cir., 1930, 39 F.2d 540, as approved by us in Pleason v. Commissioner of Internal Revenue, 7 Cir., 1955, 226 F.2d 732, 734. Deductions are a matter of legislative grace and “the burden is upon the taxpayer to establish the amount of a deduction claimed,” Helvering v. Taylor, 1934, 293 U.S. 507, 514, 55 S.Ct. 287, 290, 79 L.Ed. 623. This he failed to do.
There is no presumption of fraud and the Commissioner has the burden of proof with clear and convincing evidence. We have set out in some detail the Tax Court’s findings on this issue. “Fraud is a question of fact, and the Tax Court finding is binding if it is supported by substantial evidence.” Bender v. Commissioner of Internal Revenue, 7 Cir., 1958, 256 F.2d 771, 774-775, and cases cited therein. We think there is substantial evidence in this record to support these findings of fraud by the Tax Court.
Finding no error in the disposition of this case by the Tax Court, the decision is
Affirmed.
. 26U.S.C.A. § 293(b) (19391.R.C.). Additions for fraud.
Question: What is the total number of appellants in the case that fall into the category "private business and its executives"? Answer with a number.
Answer:
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sc_adminactionstate
|
37
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the state of the state agency associated with the administrative action that occurred prior to the onset of litigation.
MONELL et al. v. DEPARTMENT OF SOCIAL SERVICES OF THE CITY OF NEW YORK et al.
No. 75-1914.
Argued November 2, 1977
Decided June 6, 1978
BrennaN, J., delivered the opinion of the Court, in which Stewart, White, Marshall, Blackmun, and Powell, JJ., joined, and in Parts I, III, and Y of which SteveNS, J., joined. Powell, J., filed a concurring opinion, •post, p. 704. SteveNS, J., filed a statement concurring in part, post, p. 714. RehNQUist, J., filed a dissenting opinion, in which Burger, C. J., joined, post, p. 714.
Oscar Chase argued the cause for petitioners. With him on the briefs were Nancy Stearns, Jack Greenberg, and Eric Schnapper.
L. Kevin Sheridan argued the cause for respondents. With him on the brief was W. Bernard Richland.
Michael H. Gottesman, Robert M. Weinberg, David Rubin, Albert E. Jenner, Jr., Robert A. Murphy, and William E. Caldwell filed a brief for the National Education Assn, et al. as amici curiae urging reversal.
Mr. Justice Brennan
delivered the opinion of the Court.
Petitioners, a class of female employees of the Department of Social Services and of the Board of Education of the city of New York, commenced this action under 42 U. S. C. § 1983 in July 1971. The gravamen of the complaint was that the Board and the Department had as a matter of official policy compelled pregnant employees to take unpaid leaves of absence before such leaves were required for medical reasons. Cf. Cleveland Board of Education v. LaFleur, 414 U. S. 632 (1974). The suit sought injunctive relief and backpay for periods of unlawful forced leave. Named as defendants in the action were the Department and its Commissioner, the Board and its Chancellor, and the city of New York and its Mayor. In each case, the individual defendants were sued solely in their official capacities.
On cross-motions for summary judgment, the District Court for the Southern District of New York held moot petitioners’ claims for injunctive and declaratory relief since the city of New York and the Board, after the filing of the complaint, had changed their policies relating to maternity leaves so that no pregnant employee would have to take leave unless she was medically unable to continue to perform her job. 394 F. Supp. 853, 855 (1975). No one now challenges this conelusion. The court did conclude, however, that the acts complained of were unconstitutional under LaFleur, supra. 394 F. Supp., at 855. Nonetheless plaintiffs’ prayers for backpay were denied because any such damages would come ultimately from the city of New York and, therefore, to hold otherwise would be to “circumvenft]” the immunity conferred on municipalities by Monroe v. Pape, 365 U. S. 167 (1961). See 394 F. Supp., at 855.
On appeal, petitioners renewed their arguments that the Board of Education was not a “municipality” within the meaning of Monroe v. Pape, supra, and that, in any event, the District Court had erred in barring a damages award against the individual defendants. The Court of Appeals for the Second Circuit rejected both contentions. The court first held that the Board of Education was not a “person” under § 1983 because “it performs a vital governmental function..., and, significantly, while it has the right to determine how the funds appropriated to it shall be spent..., it has no final say in deciding what its appropriations shall be.” 532 F. 2d 259, 263 (1976). The individual defendants, however, were “persons” under § 1983, even when sued solely in their official capacities. 532 F. 2d, at 264. Yet, because a damages award would “have to be paid by a city that was held not to be amenable to such an action in Monroe v. Pape," a damages action against officials sued in their official capacities could not proceed. Id., at 265.
We granted certiorari in this case, 429 U. S. 1071, to consider
“Whether local governmental officials and/or local independent school boards are 'persons’ within the meaning of 42 U. S. C. § 1983 when equitable relief in the nature of back pay is sought against them in their official capacities?” Pet. for Cert. 8.
Although, after plenary consideration, we have decided the merits of over a score of cases brought under § 1983 in which the principal defendant was a school board — and, indeed, in some of which § 1983 and its jurisdictional counterpart, 28 U. S. C. § 1343, provided the only basis for jurisdiction — we indicated in Mt. Healthy City Board of Education v. Doyle, 429 U. S. 274, 279 (1977), last Term that the question presented here was open and would be decided “another day.” That other day has come and we now overrule Monroe v. Pape, supra, insofar as it holds that local governments are wholly immune from suit under § 1983.
I
In Monroe v. Pape, we held that “Congress did not undertake to bring municipal corporations within the ambit of [§ 1983].” 365 U. S., at 187. The sole basis for this conclusion was an inference drawn from Congress’ rejection of the “Sherman amendment” to the bill which became the Civil Rights Act of 1871, 17 Stat. 13, the precursor of § 1983. The amendment would have held a municipal corporation liable for damage done to the person or property of its inhabitants by private persons “riotously and tumultuously assembled.” Cong. Globe, 42d Cong., 1st Sess., 749 (1871) (hereinafter Globe). Although the Sherman amendment did not seek to amend § 1 of the Act, which is now § 1983, and although the nature of the obligation created by that amendment was vastly different from that created by § 1, the Court nonetheless concluded in Monroe that Congress must have meant to exclude municipal corporations from the coverage of § 1 because “ 'the House [in voting against the Sherman amendment] had solemnly decided that in their judgment Congress had no constitutional power to impose any obligation upon county and town organizations, the mere instrumentality for the administration of state law.’ ” 365 U. S., at 190 (emphasis added), quoting Globe 804 (Rep. Poland). This statement, we thought, showed that Congress doubted its “constitutional power... to impose civil liability on municipalities,” 365 U. S., at 190 (emphasis added), and that such doubt would have extended to any type of civil liability.
A fresh analysis of the debate on the Civil Rights Act of 1871, and particularly of the case law which each side mustered in its support, shows, however, that Monroe incorrectly equated the “obligation” of which Representative Poland spoke with “civil liability.”
A. An Overview
There are three distinct stages in the legislative consideration of the bill which became the Civil Rights Act of 1871. On March 28, 1871, Representative Shellabarger, acting for a House select committee, reported H. R. 320, a bill “to enforce the provisions of the fourteenth amendment to the Constitution of the United States, and for other purposes.” H. R. 320 contained four sections. Section 1, now codified as 42 U. S. C. § 1983, was the subject of only limited debate and was passed without amendment. Sections 2 through 4 dealt primarily with the “other purpose” of suppressing Ku Klux Klan violence in the Southern States. The wisdom and constitutionality of these sections — not § 1, now § 1983 — were the subject of almost all congressional debate and each of these sections was amended. The House finished its initial debates on H. R. 320 on April 7, 1871, and one week later the Senate also voted out a bill. Again, debate on § 1 of the bill was limited and that section was passed as introduced.
Immediately prior to the vote on H. R. 320 in the Senate, Senator Sherman introduced his amendment. This was not an amendment to § 1 of the bill, but was to be added as § 7 at the end of the bill. Under the Senate rules, no discussion of the amendment was allowed and, although attempts were made to amend the amendment, it was passed as introduced. In this form, the amendment did not place liability on municipal corporations, but made any inhabitant of a municipality liable for damage inflicted by persons “riotously and tumultuously assembled.”
The House refused to acquiesce in a number of amendments made by the Senate, including the Sherman amendment, and the respective versions of H. R. 320 were therefore sent to a conference committee. Section 1 of the bill, however, was not a subject of this conference since, as noted, it was passed verbatim as introduced in both Houses of Congress.
On April 18, 1871, the first conference committee completed its work on H. R. 320. The main features of the conference committee draft of the Sherman amendment were these: First, a cause of action was given to persons injured by
“any persons riotously and tumultuously assembled together... with intent to deprive any person of any right conferred upon him by the Constitution and laws of the United States, or to deter him or punish him for exercising such right, or by reason of his race, color, or previous condition of servitude....”
Second, the bill provided that the action would, be against the county, city, or parish in which the riot had occurred and that it could be maintained by either the person injured or his legal representative. Third, unlike the amendment as proposed, the conference substitute made the government defendant liable on the judgment if it was not satisfied against individual defendants who had committed the violence. If a municipality were liable, the judgment against it could be collected
“by execution, attachment, mandamus, garnishment, or any other proceeding in aid of execution or applicable to the enforcement of judgments against municipal corporations; and such judgment [would become] a lien as well upon all moneys in the treasury of such county, city, or parish, as upon the other property thereof.”
In the ensuing debate on the first conference report, which was the first debate of any kind on the Sherman amendment, Senator Sherman explained that the purpose of his amendment was to enlist the aid of persons of property in the enforcement of the civil rights laws by making their property “responsible” for Ku Klux Klan damage. Statutes drafted on a similar theory, he stated, had long been in force in England and were in force in 1871 in a number of States. Nonetheless there were critical differences between the conference substitute and extant state and English statutes: The conference substitute, unlike most state riot statutes, lacked a short statute of limitations and imposed liability on the government defendant whether or not it had notice of the impending riot, whether or not the municipality was authorized to exercise a police power, whether or not it exerted all reasonable efforts to stop the riot, and whether or not the rioters were caught and punished.
The first conference substitute passed the Senate but was rejected by the House. House opponents, within whose ranks were some who had supported § 1, thought the Federal Government could not, consistent with the Constitution, obligate municipal corporations to keep the peace if those corporations were neither so obligated nor so authorized by their state charters. And, because of this constitutional objection, opponents of the Sherman amendment were unwilling to impose damages liability for nonperformance of a duty which Congress could not require municipalities to perform. This position is reflected in Representative Poland's statement that is quoted in Monroe.
Because the House rejected the first conference report a second conference was called and it duly issued its report. The second conference substitute for the Sherman amendment abandoned municipal liability and, instead, made “any person or persons having knowledge [that a conspiracy to violate civil rights was afoot], and having power to prevent or aid in preventing the same,” who did not attempt to stop the same, liable to any person injured by the conspiracy. The amendment in this form was adopted by both Houses of Congress and is now codified as 42 U. S. C. § 1986.
The meaning of the legislative history sketched above can most readily be developed by first considering the debate on the report of the first conference committee. This debate shows conclusively that the constitutional objections raised against the Sherman amendment — on which our holding in Monroe was based, see supra, at 664 — would not have prohibited congressional creation of a civil remedy against state municipal corporations that infringed federal rights. Because § 1 of the Civil Rights Act does not state expressly that municipal corporations come within its ambit, it is finally necessary to interpret § 1 to confirm that such corporations were indeed intended to be included within the “persons” to whom that section applies.
B. Debate on the First Conference Report
The style of argument adopted by both proponents and opponents of the Sherman amendment in both Houses of Congress was largely legal, with frequent references to cases decided by this Court and the Supreme Courts of the several States. Proponents of the Sherman amendment did not, however, discuss in detail the argument in favor of its constitutionality. Nonetheless, it is possible to piece together such an argument from the debates on the first conference report and those on § 2 of the civil rights bill, which, because it allowed the Federal Government to prosecute crimes “in the States,” had also raised questions of federal power. The account of Representative Shellabarger, the House sponsor of H. R. 320, is the most complete.
Shellabarger began his discussion of H. R. 320 by stating that “there is a domain of constitutional law involved in the right consideration of this measure which is wholly unexplored.” Globe App. 67. There were analogies, however. With respect to the meaning of § 1 of the Fourteenth Amendment, and particularly its Privileges or Immunities Clause, Shellabarger relied on the statement of Mr. Justice Washington in Corfield v. Coryell, 4 Wash. C. C. 371 (CC ED Pa. 1825), which defined the privileges protected by Art. IV:
“ What these fundamental privileges are[,] it would perhaps be more tedious than difficult to enumerate. They may, however, be all comprehended under the following general heads: protection by the Government;’ — •
“Mark that—
“ ‘protection by the Government; the enjoyment of life and liberty, with the right to acquire and possess property of every kind, and to pursue and obtain happiness and safety....’” Globe App. 69 (emphasis added), quoting 4 Wash. C. C., at 380-381.
Building on his conclusion that citizens were owed protection — a conclusion not disputed by opponents of the Sherman amendment — Shellabarger then considered Congress’ role in providing that protection. Here again there were precedents:
“[Congress has always] assumed to enforce, as against the States, and also persons, every one of the provisions of the Constitution. Most of the provisions of the Constitution which restrain and directly relate to the States, such as those in [Art. I, § 10,] relate to the divisions of the political powers of the State and General Governments.... These prohibitions upon political powers of the States are all of such nature that they can be, and even have been,... enforced by the courts of the United States declaring void all State acts of encroachment on Federal powers. Thus, and thus sufficiently, has the United States 'enforced’ these provisions of the Constitution. But there are some that are not of this class. These are where the court secures the rights or the liabilities of persons within the States, as between such persons and the States.
"These three are: first, that as to fugitives from justice; [] second, that as to fugitives from service, (or slaves;) [] third, that declaring that the 'citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States.’[ ]
“And, sir, every one of these' — the only provisions where it was deemed that legislation was required to enforce the constitutional provisions — -the only three where the rights or liabilities of persons in the States, as between these persons and the States, are directly provided for, Congress has by legislation affirmatively interfered to protect... such persons.” Globe App. 69-70.
Of legislation mentioned by Shellabarger, the closest analog of the Sherman amendment, ironically, was the statute implementing the fugitives from justice and fugitive slave provisions of Art. IV — the Act of Feb. 12, 1793, 1 Stat. 302 — the constitutionality of which had been sustained in 1842, in Prigg v. Pennsylvania, 16 Pet. 539. There, Mr. Justice Story, writing for the Court, held that Art. IV gave slaveowners a federal right to the unhindered possession of their slaves in whatever State such slaves might be found. 16 Pet., at 612. Because state process for recovering runaway slaves might be inadequate or even hostile to the rights of the slaveowner, the right intended to be conferred could be negated if left to state implementation. Id., at 614. Thus, since the Constitution guaranteed the right and this in turn required a remedy, Story held it to be a “natural inference” that Congress had the power itself to ensure an appropriate (in the Necessary and Proper Clause sense) remedy for the right. Id., at 615.
Building on Prigg, Shellabarger argued that a remedy against municipalities and counties was an appropriate — and hence constitutional — method for ensuring the protection which the Fourteenth Amendment made every citizen’s federal right. This much was clear from the adoption of such statutes by the several States as devices for suppressing riot. Thus, said Shellabarger, the only serious question remaining was “whether, since a county is an integer or part of a State, the United States can impose upon it, as such, any obligations to keep the peace in obedience to United States laws.” This he answered affirmatively, citing Board of Comm’rs v. Aspinwall, 24 How. 376 (1861), the first of many cases upholding the power of federal courts to enforce the Contract Clause against municipalities.
House opponents of the Sherman amendment — whose views are particularly important since only the House voted down the amendment — did not dispute Shellabarger’s claim that the Fourteenth Amendment created a federal right to protection, see n. 21, supra, but they argued that the local units of government upon which the amendment fastened liability were not obligated to keep the peace at state law and further that the Federal Government could not constitutionally require local governments to create police forces, whether this requirement was levied directly, or indirectly by imposing damages for breach of the peace on municipalities. The most complete statement of this position is that of Representative Blair:
“The proposition known as the Sherman amendment... is entirely new. It is altogether without a precedent in this country.... That amendment claims the power in the General Government to go into the States of this Union and lay such obligations as it may please upon the municipalities, which are the creations of the States alone....
“... [H]ere it is proposed, not to carry into effect an obligation which rests upon the municipality, but to create that obligation, and that is the provision I am unable to assent to. The parallel of the hundred does not in the least meet the case. The power that laid the obligation upon the hundred first put the duty upon the hundred that it should perform in that regard, and failing to meet the obligation which had been laid upon it, it was very proper that it should suffer damage for its neglect....
.. [Tjhere are certain rights and duties that belong to the States,... there are certain powers that inhere in the State governments. They create these municipalities, they say what their powers shall be and what their obligations shall be. If the Government of the United States can step in and add to those obligations, may it not utterly destroy the municipality? If it can say that it shall be liable for damages occurring from a riot,... where [will] its power... stop and what obligations... might [it] not lay upon a municipality....
“Now, only the other day, the Supreme Court... decided [in Collector v. Day, 11 Wall. 113 (1871)] that there is no power in the Government of the United States, under its authority to tax, to tax the salary of a State officer. Why? Simply because the power to tax involves the power to destroy, and it was not the intent to give the Government of the United States power to destroy the government of the States in any respect. It was held also in the case of Prigg vs. Pennsylvania [16 Pet. 539 (1842)] that it is not within the power of the Congress of the United States to lay duties upon a State officer; that we cannot command a State officer to do any duty whatever, as such; and I ask... the difference between that and commanding a municipality, which is equally the creature of the State, to perform a duty.” Globe 795.
Any attempt to impute a unitary constitutional theory to opponents of the Sherman amendment is, of course, fraught with difficulties, not the least of which is that most Members of Congress did not speak to the issue of the constitutionality of the amendment. Nonetheless, two considerations lead us to conclude that opponents of the Sherman amendment found it unconstitutional substantially because of the reasons stated by Representative Blair: First, Blair’s analysis is precisely that of Poland, whose views were quoted as authoritative in Monroe, see supra, at 664, and that analysis was shared in large part by all House opponents who addressed the constitutionality of the Sherman amendment. Second, Blair’s exegesis of the reigning constitutional theory of his day, as we shall explain, was clearly supported by precedent — albeit precedent that has not survived, see Ex parte Virginia, 100 U. S. 339, 347-348 (1880); Graves v. New York ex rel. O’Keefe, 306 U. S. 466, 486 (1939) — and no other constitutional formula was advanced by participants in the House debates.
Collector v. Day, cited by Blair, was the clearest and, at the time of the debates, the most recent pronouncement of a doctrine of coordinate sovereignty that, as Blair stated, placed limits on even the enumerated powers of the National Government in favor of protecting state prerogatives. There, the Court held that the United States could not tax the income of Day, a Massachusetts state judge, because the independence of the States within their legitimate spheres would be imperiled if the instrumentalities through which States executed their powers were "subject to the control of another and distinct government.” 11 Wall., at 127. Although the Court in Day apparently rested this holding in part on the proposition that the taxing "power acknowledges no limits but the will of the legislative body imposing the tax,” id., at 125-126; cf. McCulloch v. Maryland, 4 Wheat. 316 (1819), the Court had in other cases limited other national powers in order to avoid interference with the States.
In Prigg v. Pennsylvania, for example, Mr. Justice Story, in addition to confirming a broad national power to legislate under the Fugitive Slave Clause, see supra, at 672, held that Congress could not “insist that states... provide means to carry into effect the duties of the national government.” 16 Pet., at 615-616. And Mr. Justice McLean agreed that, “[a]s a general principle,” it was true “that Congress had no power to impose duties on state officers, as provided in the [Act of Feb. 12, 1793].” Nonetheless he wondered whether Congress might not impose “positive” duties on state officers where a clause of the Constitution, like the Fugitive Slave Clause, seemed to require affirmative government assistance, rather than restraint of government, to secure federal rights. See id., at 664-665.
Had Mr. Justice McLean been correct in his suggestion that, where the Constitution envisioned affirmative government assistance, the States or their officers or instrumentalities could be required to provide it, there would have been little doubt that Congress could have insisted that municipalities afford by “positive” action the protection owed individuals under § 1 of the Fourteenth Amendment whether or not municipalities were obligated by state law to keep' the peace. However, any such argument, largely foreclosed by Prigg, was made impossible by the Court’s holding in Kentucky v. Dennison, 24 How. 66 (1861). There, the Court was asked to require Dennison, the Governor of Ohio, to hand over Lago, a fugitive from justice wanted in Kentucky, as required by § 1 of the Act of Feb. 12, 1793, which implemented Art. IV, § 2, cl. 2, of the Constitution. Mr. Chief Justice Taney, writing for a unanimous Court, refused to enforce that section of the Act:
“[W]e think it clear, that the Federal Government, under the Constitution, has no power to impose on a State officer, as such, any duty whatever, and compel him to perform it; for if it possessed this power, it might overload the officer with duties which would fill up' all his time, and disable him from performing his obligations to the State, and might impose on him duties of a character incompatible with the rank and dignity to which he was elevated by the State.” 24 How., at 107-108.
The rationale of Dennison — that the Nation could not impose duties on state officers since that might impede States in their legitimate activities — is obviously identical to that which animated the decision in Collector v. Day. See supra, at 676. And, as Blair indicated, municipalities as instrumen-talities through which States executed their policies could be equally disabled from carrying out state policies if they were also obligated to carry out federally imposed duties. Although no one cited Dennison by name, the principle for which it stands was well known to Members of Congress, many of whom discussed Day as well as a series of State Supreme Court cases in the mid-1860’s which had invalidated a federal tax on the process of state courts on the ground that the tax threatened the independence of a vital state function. Thus, there was ample support for Blair’s view that the Sherman amendment, by putting municipalities to the Hobson’s choice of keeping the peace or paying civil damages, attempted to impose obligations on municipalities by indirection that could not be imposed directly, thereby threatening to “destroy the government of the States.” Globe 795.
If municipal liability under § 1 of the Civil Rights Act of 1871 created a similar Hobson’s choice, we might conclude, as Monroe did, that Congress could not have intended municipalities to be among the “persons” to which that section applied. But this is not the case.
Hirst, opponents expressly distinguished between imposing an obligation to keep the peace and merely imposing civil liability for damages on a municipality that was obligated by state law to keep the peace, but which had not in violation of the Fourteenth Amendment. Representative Poland, for example, reasoning from Contract Clause precedents, indicated that Congress could constitutionally confer jurisdiction on the federal courts to entertain suits seeking to hold municipalities liable for using their authorized powers in violation of the Constitution — which is as far as § 1 of the Civil Nights Act went:
“I presume... that where a State had imposed a duty [to keep the peace] upon [a] municipality... an action would be allowed to be maintained against them in the courts of the United States under the ordinary restrictions as to jurisdiction. But the enforcing a liability, existing by their own contract, or by a State law, in the courts, is a very widely different thing from devolving a new duty or liability upon them by the national Government, which has no power either to create or destroy them, and no power or control over them whatever.” Globe 794.
Representative Burchard agreed:
“[Tjhere is no duty imposed by the Constitution of the United States, or usually by State laws, upon a county to protect the people of that county against the commission of the offenses herein enumerated, such as the burning of buildings or any other injury to property or injury to person. Police powers are not conferred upon counties as corporations; they are conferred upon cities that have qualified legislative power. And so far as cities are concerned, where the equal protection required to be afforded by a State is imposed upon a city by State laws, perhaps the United States courts could enforce its performance. But counties... do not have any control of the police....” Id., at 795.
See also the views of Rep. Willard, discussed at n. 30, supra.
Second, the doctrine of dual sovereignty apparently put no limit on the power of federal courts to enforce the Constitution against municipalities that violated it. Under the theory of dual sovereignty set out in Prigg, this is quite understandable. So long as federal courts were vindicating the Federal Constitution, they were providing the “positive” government action required to protect federal constitutional rights and no question was raised of enlisting the States in “positive” action. The limits of the principles announced in Dennison and Day are not so well defined in logic, but are clear as a matter of history. It must be remembered that the same Court which rendered Day also vigorously enforced the Contract Clause against municipalities — an enforcement effort which included various forms of “positive” relief, such as ordering that taxes be levied and collected to discharge federal-court judgments, once a constitutional infraction was found. Thus, federal judicial enforcement of the Constitution's express limits on state power, since it was done so frequently, must, notwithstanding anything said in Dennison or Day, have been permissible, at least so long as the interpretation of the Constitution was left in the hands of the judiciary. Since § 1 of the Civil Rights Act simply conferred jurisdiction on the federal courts to enforce § 1 of the Fourteenth Amendment — a situation precisely analogous to the grant of diversity jurisdiction under which the Contract Clause was enforced against municipalities — there is no reason to suppose that opponents of the Sherman amendment would have found any constitutional barrier to § 1 suits against municipalities.
Finally, the very votes of those Members of Congress, who opposed the Sherman amendment but who had voted for § 1, confirm that the liability imposed by § 1 was something very different from that imposed by the amendment. Section 1 without question could be used to obtain a damages judgment against state or municipal officials who violated federal constitutional rights while acting under color of law. However, for Prigg-Dennison-Day purposes, as Blair and others recognized, there was no distinction of constitutional magnitude between officers and agents — including corporate agents — of the State: Both were state instrumentalities and the State could be impeded no matter over which sort of instrumentality the Federal Government sought to assert its power. Dennison and Day, after all, were not suits against municipalities but against officers, and Blair was quite conscious that he was extending these cases by applying them to municipal corporations. Nonetheless, Senator Thurman, who gave the most exhaustive critique of § 1 — inter alia, complaining that it would be applied to state officers, see Globe App. 217 — and who opposed both § 1 and the Sherman amendment, the latter on Prigg grounds, agreed unequivocally that § 1 was constitutional. Those who voted for § 1 must similarly have believed in its constitutionality despite Prigg, Dennison, and Day.
C. Debate on § 1 of the Civil Rights Bill
From the foregoing discussion, it is readily apparent that nothing said in debate on the Sherman amendment would have prevented holding a municipality liable under § 1 of the Civil Rights Act for its own violations of the Fourteenth Amendment. The question remains, however, whether the general language describing those to be liable under § 1 — “any person” — covers more than natural persons. An examination of the debate on § 1 and application of appropriate rules of construction show unequivocally that § 1 was intended to cover legal as well as natural persons.
Representative Shellabarger was the first to explain the function of § 1:
“[Section 1] not only provides a civil remedy for persons whose former condition may have been that of slaves, but also to all people where, under color of State law, they or any of them may be deprived of rights to which they are entitled under the Constitution by reason and virtue of their national citizenship.” Globe App. 68.
By extending a remedy to all people, including whites, § 1 went beyond the mischief to which the remaining sections of the 1871 Act were addressed. Representative Shellabarger also stated without reservation that the constitutionality of § 2 of the Civil Rights Act of 1866 controlled the constitutionality of § 1 of the 1871 Act, and that the former had been approved by “the supreme courts of at least three States of this Union” and by Mr. Justice Swayne, sitting on circuit, who had concluded: “'We have no doubt of the constitutionality of every provision of this act/ ” Globe App. 68. Representative Shellabarger then went on to describe how the courts would and should interpret § 1:
“This act is remedial, and in aid of the preservation of human liberty and human rights. All statutes and constitutional provisions authorizing such statutes are liberally and beneficently construed. It would be most strange and, in civilized law, monstrous were this not the rule of interpretation. As has been again and again decided by your own Supreme Court of the United States, and everywhere else where there is wise judicial interpretation, the largest latitude consistent with the words employed is uniformly given in construing such statutes and constitutional provisions as are meant to protect and defend and give remedies for their wrongs to all the people.... Chief Justice Jay and also Story say:
“ 'Where a power is remedial in its nature there is much reason to contend that it ought to be construed liberally, and it is generally adopted in the interpretation of laws.’ — 1 Story on Constitution, sec. 429.” Globe App., at 68.
The sentiments expressed in Representative Shellabarger’s opening speech were echoed by Senator Edmunds, the manager of H. R. 320 in the Senate:
“The first section is one that I believe nobody objects to, as defining the rights secured by the Constitution of the United States when they are assailed by any State law or under color of any State law, and it is merely carrying out the principles of the civil rights bill [of 1866], which have since become a part of the Constitution.” Globe 568.
“[Section 1 is] so very simple and really reenact[s] the Constitution.” Id., at 569.
And he agreed that the bill “secure[d] the rights of white men as much as of colored men.” Id., at 696.
In both Houses, statements of the supporters of § 1 corroborated that Congress, in enacting § 1, intended to give a broad remedy for violations of federally protected civil rights. Moreover, since municipalities through their official acts could, equally with natural persons, create the harms intended to be remedied by § 1, and, further, since Congress intended § 1 to be broadly construed, there is no reason to suppose that municipal corporations would have been excluded from the sweep of § 1. Cf., e. g., Ex parte Virginia, 100 U. S. 339, 346-347 (1880); Home Tel. & Tel. Co. v. Los Angeles, 227 U. S. 278, 286-287, 294-296 (1913). One need not rely on this inference alone, however, for the debates show that Members of Congress understood “persons” to include municipal corporations.
Representative Bingham, for example, in discussing § 1 of the bill, explained that he had drafted § 1 of the Fourteenth Amendment with the case of Barron v. Mayor of Baltimore, 7 Pet. 243 (1833), especially in mind. “In [that] case the city had taken private property for public use, without compensation..., and there was no redress for the wrong Globe App. 84 (emphasis added). Bingham’s further remarks clearly indicate his view that such takings by cities, as had occurred in Barron, would be redressable under § 1 of the bill. See Globe App. 85. More generally, and as Bingham’s remarks confirm, § 1 of the bill would logically be the vehicle by which Congress provided redress for takings, since that section provided the only civil remedy for Fourteenth Amendment violations and that Amendment unequivocally prohibited uncompensated takings. Given this purpose, it beg
Question: What is the state of the state agency associated with the administrative action?
01. Alabama
02. Alaska
03. American Samoa
04. Arizona
05. Arkansas
06. California
07. Colorado
08. Connecticut
09. Delaware
10. District of Columbia
11. Federated States of Micronesia
12. Florida
13. Georgia
14. Guam
15. Hawaii
16. Idaho
17. Illinois
18. Indiana
19. Iowa
20. Kansas
21. Kentucky
22. Louisiana
23. Maine
24. Marshall Islands
25. Maryland
26. Massachusetts
27. Michigan
28. Minnesota
29. Mississippi
30. Missouri
31. Montana
32. Nebraska
33. Nevada
34. New Hampshire
35. New Jersey
36. New Mexico
37. New York
38. North Carolina
39. North Dakota
40. Northern Mariana Islands
41. Ohio
42. Oklahoma
43. Oregon
44. Palau
45. Pennsylvania
46. Puerto Rico
47. Rhode Island
48. South Carolina
49. South Dakota
50. Tennessee
51. Texas
52. Utah
53. Vermont
54. Virgin Islands
55. Virginia
56. Washington
57. West Virginia
58. Wisconsin
59. Wyoming
60. United States
61. Interstate Compact
62. Philippines
63. Indian
64. Dakota
Answer:
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songer_civproc1
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0
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the most frequently cited federal rule of civil procedure in the headnotes to this case. Answer "0" if no federal rules of civil procedure are cited. For ties, code the first rule cited.
Joseph E. SHEARER and Georgia P. Shearer, Appellants, v. James G. SMYTH, United States Collector of Internal Revenue, Appellee.
No. 14228.
United States Court of Appeals Ninth Circuit.
April 22, 1955.
Willard C. Mills, Washington, D. C., Charles J. Leighton, Jr., San Francisco, Cal., for appellants.
H. Brian Holland, Asst. Atty. Gen., Grant W. Wiprud, Ellis N. Slack, A. F. Prescott, Dudley J. Godfrey, Sp. Assts. to Atty. Gen., Lloyd H. Burke, U. S. Atty., G eorge A. Blackstone, Asst. U. S. Atty., £an Francisco, Cal., for appellee.
Before MATHEWS and ORR, Circuit Judges, and BYRNE, District Judge.
PER CURIAM.
On the grounds and for the reasons stated in its opinion, Shearer v. Smyth, D.C.N.D.Cal., 116 F.Supp..230, the judgment of the District Court is affirmed.
Question: What is the most frequently cited federal rule of civil procedure in the headnotes to this case? Answer with a number.
Answer:
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songer_respond1_3_2
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I
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Your task is to determine which category of federal government agencies and activities best describes this litigant.
Isadore BLUMENFIELD, Appellant, v. UNITED STATES of America, Appellee. Edward BERMAN, Appellant, v. UNITED STATES of America, Appellee. Abe BROWNSTEIN, Appellant, v. UNITED STATES of America, Appellee. Harry BLOOM, Appellant, v. UNITED STATES of America, Appellee. Yiddy BLOOM, Appellant, v. UNITED STATES of America, Appellee.
Nos. 16830-16834.
United States Court of Appeals Eighth Circuit.
Aug. 1, 1962.
Rehearing Denied Sept. 6, 1962.
Ray M. Foreman, Danville, 111., for appellant; E. David Rosen, Miami, Fla., with him on the brief.
Hyam Segell, Sp. Asst, to the Atty. Gen., St. Paul, Minn., for appellee; Miles W. Lord, U. S. Atty., Minneapolis, Minn., and counsel, William S. Fallon, Kelley, Segell & Fallon, St. Paul, Minn.,, with him on the brief.
Before VAN OOSTERHOUT and BLACKMUN, Circuit Judges, and HENLEY, District Judge.
VAN OOSTERHOUT, Circuit Judge.
This is an appeal by the defendants,. Isadore Blumenfield, Edward Berman, Abe Brownstein, Harry Bloom and Yiddy Bloom, hereinafter jointly called appellants, from the final judgment and sentence imposed upon their conviction by a jury upon counts 1, 3, 13 and 15 of an indictment charging them with the of-ense of willfully and knowingly aiding, assisting, counselling, procuring and advising Ruth Cook and Ann Albrecht to prepare and present to the District Director of Internal Revenue, for the District of Minnesota, a special tax return on U. S. Treasury Department Form 11, under the penalties of perjury, containing the false and fraudulent representation that Ruth Cook was the owner and the sole owner of Addison’s Bar and that Ann Albrecht was the owner and sole owner of the Kenesaw Bar and Cafe for the fiscal years beginning July 1, 1957 and July 1, 1958, all in violation of § 7206(2), Title 26 U.S.C.A.
The indictment contains 32 counts charging substantive offenses and one conspiracy count. The indictment grew out of the filing of special tax returns on Forms 11 relative to the liquor stamp tax imposed by § 5121(a) (1) with the District Director of Internal Revenue by persons purporting to be the owners of 7 liquor establishments in Minneapolis during the period from 1955 to 1959. The indictment alleges that all such applications contained false statements as to the ownership, knowingly and willfully made. The parties making the .statements are charged with violation of ■§ 7206(1), and the 5 appellants are, in separate counts, charged with aiding and abetting the making of the false returns in violation of § 7206(2).
Ann Albrecht was convicted of making a false return for the year 1958 as charged in count 2 and for the year 1957 as charged in count 14. Ruth Cook was convicted of making a false return for the year 1958 as charged in count 4 and for the year 1957 as charged in count 16. Neither Ann Albrecht nor Ruth Cook has appealed from her conviction.
The conviction of appellants on count 1 is based on the return filed by Ann Albrecht involved in count 2. Their conviction on count 13 is based on the Albrecht return involved in count 14. Appellants’ conviction on count 3 is based upon the return filed by Ruth Cook involved in count 4, and the conviction on count 15 is based upon the return filed by Ruth Cook involved in count 16.
Not guilty verdicts were returned upon all other counts of the indictment.
Each of the appellants was given a general sentence of 3 years imprisonment and a committed fine of $10,000 on counts 1 and 13, and on counts 3 and 15 each was fined $10,000 and given a 3 year suspended sentence with 5 years probation to commence upon the completion of the sentence imposed on counts 1 and 13.
Appellants are all represented by the same counsel and raise the same points upon this appeal. The evidence relating to the various appellants differs in no material respect. Appellants attack the validity of their conviction upon the following basic grounds:
I. Error in denial of motion to dismiss the indictment.
II. Error in denial of motion for acquittal.
III. Prejudicial error in instructions and in rulings upon evidence.
The asserted errors will be discussed in the order stated.
I. Sufficiency of the indictment.
Count I of the indictment is typical of the counts upon which the appellants were convicted. It reads:
“That on or about the 9th day of June, 1958, at the City of Minneapolis, County of Hennepin, State and District of Minnesota,
ISADORE BLUMENFIELD, HARRY BLOOM,
YIDDY BLOOM,
ABE BROWNSTEIN, and EDWARD BERMAN
did wilfully and knowingly aid and assist in, and counsel, procure, and advise the preparation and presentation to the District Director of Internal Revenue for the Internal Revenue District of Minnesota, at St. Paul, Minnesota, of a false and fraudulent special tax return on United States Treasury Department Form 11, in which said special tax return it was represented that Ann Albrecht was the owner and the sole owner of the Kenesaw Bar and Cafe, whereas, as the said defendants then and there well knew, said Ann Al-brecht was not the owner and sole owner of the Kenesaw Bar and Cafe.
“In violation of Section 7206(2), Title 26 United States Code.”
Section 7206(2) provides:
“Any person who— ******
“(2) * * * Willfully aids or assists in, or procures, counsels, or advises the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person au-orized or required to present such return, affidavit, claim, or document; * * *» gha]! he punished.
Appellants filed a motion to dismiss the indictment upon the following among other grounds:
(1) The indictment does not state the nature and cause of the offense in that the allegations are so vague, indefinite and ambiguous that the Defendants are unable to plead thereto, prepare for trial thereon and avail themselves of a plea of former jeopardy if acquitted or convicted thereon.
(2) That the Regulations and the special tax return form promulgated by the Secretary and his delegate are contrary to the United States Code.
Such motion was denied.
The attack on the indictment here is limited to the two grounds just quoted. We find no merit in ground (2). Section 6001 requires a person liable for a tax imposed to make such returns and comply with such rules and regulations as the Secretary may prescribe. Section 6061 requires returns to be signed in accordance with the forms or regulations prescribed by the Secretary.
It is clear that a stamp tax in the amount of $50 was due from each of the various retail liquor establishments here involved. We believe that the Commissioner was authorized to prescribe reasonable forms and regulations to facilitate the collection of the liquor stamp tax. We cannot say that the Commissioner, in prescribing the forms and regulations, exceeded his statutory authority.
A more difficult problem is presented by appellants’ contention that the indictment is void because it is too vague, indefinite and ambiguous. The standards for determining the sufficiency of an indictment have been liberalized in recent years. The test to be applied in determining the sufficiency of an indictment now appears to be well-established. In Hagner v. United States, 285 U.S. 427, 431, 52 S.Ct. 417, 76 L.Ed. 861, the Supreme Court states:
“The rigor of old common law rules of criminal pleading has yielded, in modem practice, to the general principle that formal defects, not prejudicial, will be disregarded. The true test of the sufficiency of an indictment is not whether it could have been made more definite and certain, but whether it contains the elements of the offense intended to be charged, ‘and sufficiently apprises the defendant of what he must be prepared to meet, and, in case any other proceedings are taken against him for a similar offence, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction.’ ”
To like effect, see Smith v. United States, 360 U.S. 1, 9, 79 S.Ct. 991, 3 L.Ed.2d 1041; Hayes v. United States, 8 Cir., 296 F.2d 657, 667; Harris v. United States, 8 Cir., 288 F.2d 790, 793; Anderson v. United States, 8 Cir., 262 F.2d 764, 770; Hewitt v. United States, 8 Cir., 110 F.2d 1, 5.
Count I has heretofore been set out and as stated is typical of the other counts under which the appellants were convicted. Judged by the legal tests and standards just stated, we do not believe the indictment is vulnerable to the attack made upon it. The indictment sets forth the essential elements of the offense and is without doubt sufficiently definite to protect the appellants’ rights to assert former jeopardy in any subsequent proceeding.
The words, charging that the false representation was that Ann Albrecht was “the owner and sole owner” and that she in fact was not “the owner and sole owner”, are somewhat indefinite, in that the words “owner and sole owner” are used in the conjunctive form and that said word “owner” and the words “sole owner” may have different meanings. Neither of said words are defined in the statute or regulations. As stated by the trial court in its instructions, the word “owner” has no exact meaning. Moreover, the Government does not point out the specific portion of the return which they claim constitutes the false statement.
It would seem that if more specific information was needed as to the nature of the charge, this should have been obtained by a bill of particulars. Appellants did request a bill of particulars, including a request that the Government define and give the meaning of the non-statutory language “owner and sole owner”. Such relief was denied. Appellants here predicate no error upon the court’s failure to require such information.
While the indictment does not set out the false statement the Government relies upon as specifically as it might, we are inclined to believe that appellants were ■sufficiently apprised of the nature of the charge they were required to meet. The •Government in its brief states:
“The basis for each of the charges and convictions herein is the statement made by the licensee on the face of the Treasury Form 11 following her signature and inserted by her that her title was that of ‘owner.’
* ***** “The four Forms 11 which served as the basis for the convictions in the Court below do not on their face require any information concerning ownership; they merely provide a space for a signature and the title of the person signing. The false statements on those four forms were made by Ann Albrecht and Ruth Cook when they volunteered in their own handwriting the false information that they were the owners of the Kenesaw Bar and Addison’s Bar respectively.”
While the Government’s position on this appeal as just stated was not clearly made apparent in the trial court, we believe it fair to say that appellants were sufficiently apprised of the Government’s contention that the false representation consisted of placing the word “owner” following the signature upon Form 11 returns. While the issue of the sufficiency of the indictment presents a rather close question, we are inclined to hold that the court committed no error in denying defendants’ motion to dismiss, but we feel that the scope of the false statement should be limited to the position taken by the Government in its brief, as above set out.
II. Motion for Acquittal.
Appellants, at the close of the Government’s case and again at the close of all of the evidence, made a motion for acquittal in substance urging the Government had failed to prove the essential elements of the offense charged.
The essential elements of the offense here charged, each of which must be proved to convict these appellants, are:
(1) that Ruth Cook and Ann Albrecht stated that they were the owners of the bars involved;
(2) that they were not in fact the owners of the bars;
(3) that the representation related to a material matter;
(4) that appellants aided, assisted, counselled, procured, and advised Ruth Cook and Ann Albrecht in the preparation and presentation of the Forms 11 involved;
(5) that the appellants knew Ann Al-brecht and Ruth Cook were not the owners of the bars involved; and
(6) that the appellants acted willfully, i. e., with an evil intent.
The appellants have made a broad attack on the sufficiency of the evidence to sustain their convictions. The statement of points is as follows:
“(1) There was no evidence that appellants aided, assisted, counselled, procured and advised Ruth Cook or Ann Albrecht to prepare and file false and fraudulent returns.
“(2) The returns, as filed, were not false and fraudulent as to a material matter.”
Point (1) can be rapidly disposed of. We are satisfied in the event the ownership statements made in the pertinent Forms 11 are false that there is substantial evidence to establish that appellants aided, counselled, procured and advised the filing of such statements.
Point (2) raises a rather close and difficult problem. It is perfectly clear that a false statement is an essential element of the offense here charged. The charge here is of the perjury type. A person cannot be convicted of perjury if his answers are legally truthful. United States v. Slutzky, 3 Cir., 79 F.2d 504, 505; Hart v. United States, 9 Cir., 131 F.2d 59, 61; Smith v. United States, 6 Cir., 169 F.2d 118, 121. In the latter case the rule is stated:
“Appellant is right in his contention that there can be no lawful conviction in a perjury case when an answer of the defendant, under oath, to a question propounded to him is ‘literally accurate, technically responsive, or legally truthful.’ ”
See also Segal v. United States, 8 Cir., 246 F.2d 814, 816.
It is obvious that if no false statement was made on the Forms 11, appellants could not possibly be guilty of aiding and abetting the presentation and filing of false returns. In determining the sufficiency of the evidence to support the conviction, the evidence must be viewed in the light most favorable to the Government.
In a prosecution for perjury the government is required to prove each element by substantial evidence excluding every other hypothesis than that of guilt. Brown v. United States, 8 Cir., 245 F.2d 549, 556; Beckanstin v. United States, 5 Cir., 232 F.2d 1, 4; United States v. Rose, 3 Cir., 215 F.2d 617; Fotie v. United States, 8 Cir., 137 F.2d 831, 840; Danaher v. United States, 8 Cir., 39 F.2d 325, 332. As stated in Brown v. United States, supra:
“To sustain a conviction of perjury it must be shown by clear, convincing and direct evidence to a moral certainty and beyond a reasonable doubt that the defendant committed wilful and corrupt perjury, and the burden is on the government to prove the essential elements of the crime by substantial evidence excluding every other hypothesis than that of defendant’s guilt. Probable or credible evidence is not enough. * * * ”
The Government in its brief states:
“The basis for each of the charges and convictions herein is the statement made by the licensee on the face of the Treasury Form 11 following her signature and inserted by her that her title was that of ‘owner.’ ”
It is undisputed that Ruth Cook and Ann Albrecht executed the pertinent Forms 11 by placing their signatures on the lines marked “signature” and by writing in the word “owner” on the line immediately following, marked “title”. While the indictment as shown in Division I also charges a false statement of sole ownership, we do not understand that the Government makes the claim that either licensee specifically represented on Forms 11 any sole ownership. Moreover, there is no proof of any representation of sole ownership unless the words “owner” and “sole owner” can be said to have the same meaning. Thus, the statement to be tested for truth or falsity is the statement to the effect “my title is owner”.
Appellants have conceded that they have at all times had a substantial financial interest in each of the bar operations here involved. The appellants or some of them had been engaged in the liquor business during the prohibition era and had found such business to be profitable. Upon the repeal of the prohibition amendment, they desired to invest their funds in certain liquor stores in Minneapolis. Minnesota laws and Minneapolis ordinances presented some obstacles which prevented them from engaging in such business in their own names. Such obstacles were in the form of provisions that one person was not permitted to have an interest in more than one bar at the same time, and that persons who had been convicted of a felony were not eligible for licenses. To circumvent these state laws and city ordinances, the appellants, except Yiddy Bloom, who came into the syndicate later, utilized corporations as the entity to whom necessary licenses were issued. Disclosure of corporate ownership was required, and hence the stock was issued in the names of outsiders, the appellants retaining possession of the stock. Later, because income tax complications arose, the stock was issued in the name of the store operator and held by such operator, the beneficial interest in such stock in all probability remaining in appellants. Prior to 1944 and subsequent thereto, the Internal Revenue Service made numerous investigations of the tax liability of the appellants arising out of the store operations.
Ann Albrecht’s Exhibit No. 1016, a memorandum dated January 22, 1944, by Rodney Hanson, Internal Revenue Agent, and Arthur A. Stone, acting special agent in charge, shows that Harry Bloom, upon assurance given that the information would be used for tax purposes only, frankly disclosed the method of operation of the liquor stores and expressed a desire that some setup be devised so that the liquor business could be conducted in a legitimate manner. Appellants’ counsel (Mr. Robert Levitt) and accountant participated in this conference. The report states, in part:
“To this end then, Mr. Levitt insisted that each of the individuals above-named give or abandon any claim to any interest they might have in stocks of the various corporations, but that the four individuals continue to manage and direct the various businesses and to finance such businesses with their capital in the form of loans, buying connections, etc., they to receive reasonable individual salaries for services rendered and to receive the extra profits after providing a reasonable return on capital stock to the corporation, in the guise of rentals on business properties occupied by the various businesses, same being in effect, however, both rents and profit on use of capital, no interest being charged the corporations.
*#****•
“This plan of operations was explained to Special Agent Stone and to Rodney Hanson, Internal Revenue Agent, and their approval sought. They stated that while they could see nothing wrong with the set-up, yet they were in no position to pass upon a case which would perhaps be assigned to some other agents for subsequent years and suggested that same be submitted to Group Chief Barber for his criticism or approval.
“Accordingly, an informal discussion was had between Mr. C. H. Barber, Rodney Hanson, Robert Levitt and Harry Bloom wherein the set-up was discussed pro and con, and representative of taxpayer was given reasonable assurances that the plan would stand up if followed in actual operations.
******
“In any event, the upshot of the plan is that the four partners are in fact conducting a liquor sales business under the guise of a real estate business, which appears to be the only way they can operate in as near a legitimate manner because of harshness of local state law which denies a license to conduct a legitimate business to any person who has been previously convicted on a felony count.
“To so operate, then, the partners are in effect forced to pay out a profit to a corporation which is in effect merely a trustee of a license held to permit the partnership to do business.
“In view, then, of the fact that stockholdings of the corporations have been divorced from actual ownership of the partners, it appears that there can be no charge made that rental is used to siphon out corporate profits.”
This appeal is here upon the original record consisting of 956 pages of proceedings, plus 17 volumes of testimony, and what has been aptly described as a room full of exhibits. While counsel have in their briefs set out some record citations, many of their statements and contentions are not supported by record citations. This has made it extremely difficult for us to locate the pertinent evidence. It is impossible within the proper limits of this opinion to malee any attempt to summarize the great mass of evidence before us in the form of testimony and exhibits. We have, however, endeavored to examine all portions of the record relevant to the issues presented.
In order to determine whether the representation of ownei-ship made by the bar licensees is false, it is necessary to ascertain the meaning of the word “ownership”. 73 C.J.S. Property § 13(c), p. 187 states:
“As applied to personal property the term ‘owner’ has a variety of meanings, and includes persons whose interests range from exclusive or absolute ownership to equitable ownership or a mere right of possession.”
and at pp. 190-191:
“The word ‘ownership’ varies in its significance according to the context and the subject matter with which it is used. * * * However, ownership does not always mean absolute ownership, but covers different estates in property. Ownership may be absolute or conditional, or, stated otherwise, it may be absolute or it may be limited and qualified; or it may be qualified or unqualified. Too, ownership may be complete or incomplete, special, general and special, reputed, legal or equitable, legal and nominal, or equitable and beneficial, perfect or imperfect, and there may be quasi ownership.
“There may be two distinct properties held by several persons in the same thing, or the ownership or legal title may be in one person and the right of possession in another.”
For other statements and supporting authorities showing the meaning of the word “owner” to be varied and flexible and to depend in a great measure on the manner of its use, see 43 Am.Jur., Property, § 37; Annot. 2 A.L.R. 778, 95 A.L.R. 1085.
The word “own” as used in statutes has been given the widest variety of construction, usually guided in some measure by the objects sought to be accomplished in the particular instance. Peterson v. Johnson, 132 Wis. 280, 111 N.W. 659; Merrill Ry. etc., v. Merrill, 119 Wis. 249, 96 N.W. 686.
The word “owner” as used in various statutes is one of flexible meaning, depending on language and purpose of the particular statute in which employed, and it varies from an absolute proprietary interest to a mere possessory right. Animal Rescue League v. Bourne’s Assessors, 310 Mass. 330, 37 N.E.2d 1019, 138 A.L.R. 110.
Our examination of the authorities just cited persuades us that the word “owner” has no precise or definite meaning and that the ¡word must be examined in its context and setting to determine the meaning intended. Moreover, it would appear that a representation that “my title is owner” would be something less strong than a statement that a person is in fact an owner. Title is defined as a descriptive name, an appellation or designation. Webster’s New International Dictionary.
It is apparent that appellants and all concerned intended the operators of the respective bars to have the title of owner.
Since as we have found the word “owner” has a flexible meaning which is in large measure dependent upon its setting and use, we look to the background provided by the statutes and regulations, pursuant to which Forms 11 were filed. It is undisputed that the establishments operated by Ann Albrecht and Ruth Cook are retail liquor stores. Section 5121(a) (1) imposes a $50 annual stamp tax upon each i*etail liquor store. Section 7011 requires every one engaged in such business to register. There is no specific provision in either statute that the required action be taken by the owner. Section 194.106 (Title 26, 1954) Code of Federal Regulations, provides :
“The return of an individual proprietor shall be signed by the proprietor; the return of a partnership shall be signed by a member of the firm; and the return of a corporation shall be signed by an officer thereof. In each ease, the person signing the return shall designate his capacity as ‘individual owner’, ‘member of firm’, or, in the ease of a corporation, the title of the officer.”
The word “owner” is not mentioned in the statutes. “Owner” is not defined in either the statutes or the regulations. No cases have been cited or discovered covering the issue of who should file and sign the returns or the proper meaning of the word “owner” in the situation such as that confronting us.
The regulation above set out requires the person signing the return to designate his capacity to be in one of three categories: (1) individual owner; (2) member of the firm; (3) by title of office in case of corporate ownership. The corporate organizations previously operating some of the stores had been dissolved before the date of the returns here in question. The licensees at the time they filed the returns were not members of any of the partnerships existing between the appellants. Thus if licensees were qualified to sign the return in any respect, such signing would be in the capacity of owner.
The statutes are in the revenue section of the Code. The primary purpose of the revenue statutes is to obtain revenue. See and compare Wisniewski v. United States, 8 Cir., 247 F.2d 292, 298.
The number of owners of a single retail establishment at a specified address has no effect upon the amount of tax due. See § 5143(a).
Donald Hasselberg, a Government witness who had served as an inspector for the alcohol unit, testified that the words “licensee”, “owner” and “proprietor” were used interchangeably and by owner he means the person who held the federal stamp and the city license. Inspector McNitt, who made some of the inspections on the bars here involved, testified inspections usually consisted of comparing ownership as stated in the license with the stamp to be sure there was no change of ownership since the stamp was issued. He stated that he had heard rumors that ownership was in others than those named in the stamps and licenses, which rumors had persisted since 1941, but that he never wrote down any violations by reason thereof. He says this is because he never had evidence to prove the licensees were not owners. However, it is apparent that this information should have been sufficient to put him on inquiry, which in all probability would have led him to the complete information on ownership in the files of the Income Tax Division of the Internal Revenue Department. There is reason to believe that he did not pursue these rumors because he deemed them of no significance taxwise.
Retail dealers do not have to secure permits. There appears to be no discretion involved in issuing stamps to retail dealers. All that is involved is signing and filing the Forms 11 and paying the stamp tax.
Under the circumstances heretofore related, we see no occasion to give the word “owner” as used in the Forms 11 here in controversy any narrow or restricted meaning, such as complete or absolute ownership. We believe that the falsity of the ownership statement should be tested by the broad and flexible definitions of ownership that generally prevail. Such interpretation is in accord with the principle of strict interpretation of statutes against the Government which generally prevails in criminal cases. See Wisniewski v. United States, supra; United States v. Resnick, 299 U.S. 207, 57 S.Ct. 126, 81 L.Ed. 127.
This brings us to the point of determining whether upon this record the Government has produced substantial evidence to support a finding that the statements of Ann Albrecht and Ruth Cook that they are owners are false. It is established beyond dispute that Ann Albrecht and Ruth Cook applied for and obtained retail liquor licenses for the establishments they operated from the City of Minneapolis, and that they were at least holders of legal title to such licenses. No other licenses were in effect at the - addresses where they operated. The possession of licenses was a prerequisite to the lawful operation of the businesses. The evidence is overwhelming to the effect that it was the intention of the appellants, as well as that of the operators, that the licenses be obtained in the name of the operators and that the respective liquor businesses be run in their names. This alone would go a long way toward negating any falsity in the statement of ownership.
There is considerable additional evidence supporting ownership in the licensees. The licensees were in possession of their respective premises. They paid the ordinary rental for the use of their premises and an additional charge in the form of rent to the appellants, which appears to be a means of transferring to the appellants their interest in the profits of the business. Books of the establishments which were kept by the appellants’ accountants showed the licensees as owners of the businesses. It is undisputed that in 1957 Ann Albrecht received profits from the business in the amount of $1564 and that her profits in 1958 amounted to $1781; and that Ruth Cook’s profits for 1957 were $1359 and for 1958, $1732. The Government, in its brief, concedes such profits were received but contends that cannot be any evidence of ownership as they amounted to only 3% to 5% of the net profits. We cannot escape the conclusion that the receipt of profits constitutes evidence of some degree of ownership. The evidence also discloses that Ann Albrecht relinquished her interest in the bar on December 31, 1959, and that at that time her books reflected a net worth of $52,370 with an indebtedness to the appellants of $44,081. Her interest was purchased by the wife of Yiddy Bloom at its book value, being the net difference between the above figures in the amount of $8,289.
The licensees were billed for the merchandise furnished their establishments and paid the bills and operating expenses. They filed income tax returns including therein the liquor operations.
What is here described as Addison’s Bar, operated by Ruth Cook, was prior to 1955 operated by Ramona Bar and Cafe, Inc. All shares of that corporation were held by and in the name of Ruth Cook. Upon liquidation of the corporation, the assets of the corporation were distributed to Ruth Cook, its sole stockholder, pursuant to resolution of liquidation.
We are inclined to believe that under the evidence legal ownership of the stores as well as the licenses rested in Ann Albrecht and Ruth Cook, with substantial equitable or beneficial interests in the appellants. Such it appears was the view of the revenue agents as set out in the excerpt from the Ann Albrecht exhibit hereinabove. In any event, regardless of what the precise nature of the interest of the operators might have been, we are satisfied that the evidence before us compels a conclusion that Ruth Cook and Ann Albrecht at least had partial ownership in the establishments which they operated, and the existence of such partial ownership compels a determination that the statements made in the Forms 11 are not false.
Our decision is limited to the specific issues before us. There is no doubt that appellants had a substantial financial interest in the liquor stores here involved and that they had a large voice in the management of such concerns. This, however, does not negate a partial ownership of the liquor stores in the licensees.
Unlike the Minneapolis license application form, Form 11 does not contain specific questions eliciting detailed information as to the nature and extent of ownership. The issue of whether appellants made false statements in their Minneapolis license applications is not before us. We are not here concerned with the income tax consequences of appellants’ method of operation. It is quite true that the appellants have handled their interests in the liquor stores in a complicated and confusing manner and that the books and records of such stores depart from usual and normal accounting procedures. There is much in the record to indicate that appellants may not have led an exemplary life and we in no way approve the method in which the appellants operated. We are here compelled to determine this case upon the issues properly before us.
Upon the basis of our determination that the Government has not produced substantial evidence to establish that the representations made by Ann Albrecht and Ruth Cook on the Forms 11 that their title is owner is false, we are compelled to conclude that the trial court committed error in overruling appellants’ motion for acquittal on the charges involved in this appeal.
III. Prejudicial error in instructions and in rulings upon evidence.
Appellants have in their last seven points urged that the trial court has committed prejudicial errors in its instructions, its rulings upon the admission of evidence, and in other respects. Some of such points raise very substantial questions but because of our determination in Division II that a reversal is required, no purpose will be served by a consideration of such asserted errors.
The judgments entered in each of the cases are reversed for error in overruling the motion for acquittal and these cases are remanded to the trial court with direction to enter judgment of acquittal as to each of the appellants.
. Statutory references, unless otherwise indicated, are to the Internal Revenue Code of 1954, 26 U.S.C.A.
. Ruth Cook and Ann Albrecht were placed on probation for two years, the imposition of their sentences having been suspended.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Which category of federal government agencies and activities best describes this litigant?
A. cabinet level department
B. courts or legislative
C. agency whose first word is "federal"
D. other agency, beginning with "A" thru "E"
E. other agency, beginning with "F" thru "N"
F. other agency, beginning with "O" thru "R"
G. other agency, beginning with "S" thru "Z"
H. Distric of Columbia
I. other, not listed, not able to classify
Answer:
|
songer_crossapp
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
HIRAM WALKER & SONS, INC., Plaintiff-Appellee, v. KIRK LINE, et al., Defendants, Indian River Transport, Inc., Defendant-Appellant. HIRAM WALKER & SONS, INC., Plaintiff-Appellee, v. KIRK LINE, et al., Defendants, Eller & Company, Inc., Defendant-Appellant, Indian River Transport, Inc., Defendant-Appellee. HIRAM WALKER & SONS, INC., Plaintiff-Appellee, v. KIRK LINE, R.B. Kirkconnell & Bro. Ltd., et al., Defendants, Indian River Transport, Inc., Defendant-Appellant. HIRAM WALKER & SONS, INC., Plaintiff-Appellee, Cross-Appellant, v. KIRK LINE, R.B. Kirkconnell & Bro., Ltd., Jamaica Merchant Marine Atlantic Line Ltd., Indian River Transport, Inc., SS MORANT BAY, its engines, boilers, etc., Defendants, Eller & Company, Inc., Indian River Transport, Inc., Defendants-Appellants, Cross-Appellees.
Nos. 87-5048, 87-5094, 87-5111 and 88-5180.
United States Court of Appeals, Eleventh Circuit.
July 21, 1989.
Mark A. Leibowitz, Jay M. Levy, Her-shoff & Levy, John D. Kehoe, David F. McIntosh, Corfett, Killian, Hardeman, McIntosh & Levi, Miami, Fla., for Indian River Transport, Inc.
John P. D’Ambrosio, Elmsfore, N.Y., for Hiram Walker & Sons, Inc.
Christian D. Keedy, Smathers & Thompson, Kelley, Drye & Warren, Craig Drake Olmstead, Miami, Fla., for Eller & Co., Inc.
Before KRAVITCH and HATCHETT, Circuit Judges, and MARKEY, Chief Circuit Judge.
Honorable Howard T. Markey, Chief U.S. Circuit Judge for the Federal Circuit, sitting by designation.
KRAVITCH, Circuit Judge:
The plaintiff Hiram Walker & Sons, Inc. (Hiram Walker), filed this action in the Southern District of New York against defendants Indian River Transport, Inc. (Indian River), Eller & Company, Inc. (Eller), R.B. Kirkconnell & Bro., Ltd. (Kirk Line), and Jamaica Merchant Marine Atlantic Line, Ltd. (Jamaica Line), seeking damages for the loss of several thousand gallons of the liqueur Tia Maria. Upon Eller’s motion, the case was subsequently transferred to the Southern District of Florida. After all parties moved for summary judgment, the district court dismissed Kirk Line and Jamaica Line from the action, and granted Hiram Walker’s motion against Eller and Indian River on the question of liability. Indian River and Eller each filed an interlocutory appeal in this court, but because of a jurisdictional problem those appeals were never decided on the merits. The district court subsequently held a bench trial to determine the amount of damages due Hiram Walker. Following the trial, the district court quantified Hiram Walker’s damages, for which it adjudged Eller and Indian River each fifty percent liable. Eller and Indian River appealed; Hiram Walker cross-appealed against those two defendants but did not appeal the district court’s dismissal of the actions against Kirk Line and Jamaica Line. We consolidated all appeals from the earlier summary-judgment order and the order following trial; we now reverse and remand.
I. BACKGROUND
Hiram Walker purchased five thousand gallons of Tia Maria from Estate Industries in Jamaica on March 15, 1985. On March 26, a twenty-three ton tank containing the liqueur was loaded aboard the M/V Mov-ant Bay in Kingston, apparently in good order. Kirk Line had chartered the Mov-ant Bay from its proprietor, Jamaica Line, for a shipment of cargo including Hiram Walker’s liqueur, which was shipped under a Kirk Line-Hiram Walker bill of lading. The tank arrived in Miami three days later. Kirk Line hired Eller, a stevedore, to unload the tank from the Morant Bay and store it at the dock.
Hiram Walker contracted with Indian River to transport the liqueur overland to New Jersey; Hiram Walker and Indian River agreed that Indian River was to pump the liqueur from the tank into its freight trailer. On April 1, Jones, an employee of Indian River, arrived at the port to effect the pumping transfer. An Eller employee removed the tank from storage and aligned it with the trailer. Jones attempted to connect the tank and the trailer, but realized that a fitting needed to connect the hoses was missing. Even though another fitting on the back of the tank might have been used to pump the liqueur into the trailer, Jones decided that pumping the liqueur would be impossible; therefore, he asked Marshall, an Eller employee, to help him accomplish a “gravity feed” — essentially, Jones wanted to pour the liqueur from the tank to the trailer. To effect a gravity feed, the tank had to be elevated higher than the trailer. Marshall directed another Eller employee, Wright, to assist Jones. Wright lifted the tank on a large forklift; Wright, however, was not licensed to operate forklifts of this capacity.
Wright and Marshall neglected to put straw mats or other dunnage between the metal forks and the metal container. Fifteen minutes into the operation, the tank apparently began to slide off the forks because of the lack of dunnage. Deciding that the tank was not properly balanced, Marshall instructed Wright to find another forklift. Wright did not lower the tank, but left the forklift holding the tank suspended eight feet off the ground for ten minutes; leaving a load suspended was a violation of standard company procedure. As Wright returned, the tank fell off the forklift. The tank ruptured, and eighty-five percent of the Tia Maria in the tank spilled out. The liqueur remaining in the tank was contaminated during the clean-up, in which several fire-engine companies covered the area with anti-explosive foam.
II. BASIS OF FEDERAL JURISDICTION
The claim against Indian River was pleaded as a federal question; and against Eller, in diversity. The district court analyzed the cases against Eller and Indian River under maritime tort law; because the accident in question did not occur at a maritime situs, however, admiralty jurisdiction would not support the claims against these two defendants. Harville v. Johns-Manville Products Corp., 731 F.2d 775, 782 (11th Cir.1984); Boudloche v. Conoco Oil Corp., 615 F.2d 687, 688 (5th Cir.1980). On appeal, Indian River argues that the district court lacked subject-matter jurisdiction over the claim asserted against it. We of course may consider the question of Article III subject-matter jurisdiction for the first time on appeal; additionally, an explanation of the basis of federal jurisdiction over each defendant will point out the source of law applicable to each claim.
A. Federal subject-matter jurisdiction
Hiram Walker urges that its claim against Indian River arises under the Car-mack Amendment, 49 U.S.C. § 11707, which provides in relevant part:
A common carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission... shall issue a receipt or bill of lading for property it receives for transportation under this subtitle. That carrier... [is] liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (1) the receiving carrier.... Failure to issue a receipt or bill of lading does not affect the liability of a carrier....
49 U.S.C.A. § 11707(a)(1) (1988). In its complaint, Hiram Walker alleged that Indian River “totally breached, failed and violated its duties as an interstate common carrier in receiving, tending, caring for and delivering the [shipment of Tia Maria] in good condition, but on the contrary, so seriously [damaged] the same while in its possession that it was rendered a total loss.” Section 1337 of Title 28 imposes an amount-in-controversy requirement over suits brought under the Carmack Amendment; that requirement is satisfied by the allegations in the complaint. The complaint sufficiently pleaded a federal claim against Indian River.
Because the Carmack Amendment would not support the claim against Eller, Hiram Walker alleged that this claim was properly within the court’s diversity jurisdiction. 28 U.S.C. § 1332. In the complaint, Hiram Walker conspicuously failed to allege that it and Indian River were of diverse citizenship. Diversity jurisdiction ordinarily is not available “when any plaintiff is a citizen of the same State as any defendant.” Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 2403, 57 L.Ed.2d 274 (1978). An exception to the general rule exists, however, when the plaintiff joins a non-diverse defendant sued under federal law with a diverse defendant sued in diversity. Romero v. Int’l Terminal Operating Co., 358 U.S. 354, 381, 79 S.Ct. 468, 485, 3 L.Ed.2d 368 (1959) (“Since the Jones Act provides an independent basis of federal jurisdiction over the non-diverse respondent,... the rule of Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435, does not require dismissal of the claims against the diverse respondents.”); Kauth v. Hartford Ins. Co., 852 F.2d 951, 958-59 (7th Cir.1988); Baker v. J.C. Penney Co., 496 F.Supp. 922 (N.D.Ga.1980). In Baker, Judge Vining observed that an anomaly would be created by “not allowing a plaintiff to do in one federal suit what he would be entitled to do in two separate federal suits.” 496 F.Supp. at 924.
Alternatively, the claim against Eller was properly within the pendent-party jurisdiction of the district court. We recently held that district courts have
the power to hear the state claim against the second party if (1) the federal claim against the first party is substantial, meaning not “inescapably” frivolous, Jackson v. Stinchcomb, 635 F.2d 462, 471 (5th Cir.1981), (2) the statute conferring jurisdiction over the federal claim does not “expressly or by implication negate[ ]” the existence of pendent jurisdiction, Aldinger v. Howard, 427 U.S. 1, 18, 96 S.Ct. 2413, 2422, 49 L.Ed.2d 276 (1976), and (3) the state claim arises out of a “common nucleus of operative fact,” such that the plaintiff would be expected to try the federal and state claims together. [United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966)].
Giardiello v. Balboa Ins. Co., 837 F.2d 1566, 1570 (11th Cir.1988) (emphasis in original). Here, the federal claim is substantial and the claims against Eller and Indian River, as joint tortfeasors, arise out of a “common nucleus of operative fact.” With regard to the second prong, even though claims under the Carmack Amendment may be brought in state court, 49 U.S.C. 11707(d)(1), Congress has neither expressly nor impliedly foreclosed the possibility of pendent-party jurisdiction under the Carmack Amendment. Boudreaux v. Puckett, 611 F.2d 1028, 1031 (5th Cir.1980) (no negation of pendent-party jurisdiction under 15 U.S.C. § 1981 even though such claims may be brought in state court); compare Aldinger, 427 U.S. at 19, 96 S.Ct. at 2422 (Congress impliedly negated pendent-party jurisdiction over counties in suits predicated on 28 U.S.C. § 1343(3), which provides jurisdiction for suits brought under 42 U.S.C. § 1983, because counties were not “persons” covered by § 1983 under the then-extant construction) with Giardiello, 837 F.2d at 1571 (no negation of pendent-party jurisdiction under ERISA); First Alabama Bank v. Parsons Steel, Inc., 747 F.2d 1367, 1377 (11th Cir.1984) (no negation of pendent-party jurisdiction under Bank Holding Company Act), rev’d on other grounds, 474 U.S. 518, 106 S.Ct. 768, 88 L.Ed.2d 877 (1986); and Lykins v. Pointer Inc., 725 F.2d 645, 647 (11th Cir.1984) (no negation of pendent-party jurisdiction under 28 U.S.C. § 1346(b)).
B. Source of the rule of law
For Indian River, federal law governs the determination of liability and the measure of damages under the Carmack Amendment, and common-law principles give content to the federal rule. Hector Martinez & Co. v. Southern Pacific Transportation Co., 606 F.2d 106, 108 n. 1 (5th Cir.1979), cert. denied, 446 U.S. 982, 100 S.Ct. 2962, 64 L.Ed.2d 838 (1980); Dublin Co. v. Ryder Truck Lines, Inc., 417 F.2d 777, 778 (5th Cir.1969).
Analysis of the source of law for the claim against Eller is a bit more complicated. This action originally was filed in the Southern District of New York, and Eller moved that court, pursuant to 28 U.S.C. § 1404(a), to transfer the case to the Southern District of Florida. The Florida federal court, therefore, must apply the rule that would have been applied by the transferor New York federal court. Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 821, 11 L.Ed.2d 945 (1964). The New York federal court would have applied the New York choice-of-law rule in determining whether to apply Florida tort law or New York tort law to this claim. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941).
Over twenty-five years ago the New York Court of Appeals abandoned the strict lex loci delicti rule in favor of interest analysis for choice-of-law in torts cases. Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963). Interest analysis would in any event lead a New York court to apply Florida law in judging Eller’s conduct, even were Florida law inconsistent with the law in New York. See Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 480 N.E.2d 679, 491 N.Y.S.2d 90 (1985) (“when the conflicting rules involve the appropriate standards of conduct, rules of the road, for example, the law of the place of the tort ‘will usually have a predominant, if not exclusive concern’ ”); Hacohen v. Bolliger Ltd., 108 A.D.2d 357, 489 N.Y.S.2d 75 (1985) (where defendant’s standard of conduct is judged, court should look to the place of the tort in order to give effect to that jurisdiction’s interest in regulating conduct within its borders). Eller’s conduct is therefore to be measured under Florida law.
III. LIABILITY OF INDIAN RIVER AND ELLER
A. Indian River
We review the disposition of a motion for summary judgment de novo, applying the same standards that should have been applied by the district court. Eastern Air Lines v. Air Line Pilots Assoc. Int’l, 861 F.2d 1546, 1549 (11th Cir.1988). The district court drew the following inferences from the papers the parties submitted in support of their cross-motions for summary judgment:
A gravity feed, unlike a pumping transfer, required that the tank containing the liqueur be elevated to a height sufficient to allow sheer gravitational force to impel the liqueur in the tank to drain downward to the [Indian River] trailer. This operation, of course, was intrinsically and conspicuously fraught with dangers which would not have been present in a pumping transfer. It therefore seems plain that had Jones brought a cam-lock, the instrumentality needed to perform the transfer of the liqueur properly, the accident resulting in [Hiram Walker’s] tank of liqueur being dropped and spilled, would never have occurred.
On the basis of these observations, the district court adjudged Indian River liable for the damage to the Tia Maria. The trial court disregarded contradictory evidence and plainly drew inferences against Indian River, the non-movant. In the procedural posture of this case, the district court’s exercise of its fact-finding powers constituted reversible error.
The claim against Indian River appears to based on both a theory of tort and a theory of contract: Indian River behaved negligently in failing to bring the required fitting and then requesting a gravity transfer; alternatively, Indian River breached an express term of its contract with Hiram Walker by failing to perform a pump transfer. At least two questions are presented under a theory of tort that were not susceptible of resolution against Indian River on a motion for summary judgment. First, drawing inferences in favor of the non-movant, the district court should have concluded that it was “highly extraordinary” that Indian River’s failure to bring the proper fitting “should have brought about the harm.” Restatement (Second) of Torts § 435(2). The court may yet draw that conclusion after a full airing of the facts at trial, a conclusion that would absolve Indian River of liability for the lost liqueur.
Second, Indian River has demonstrated a very substantial question whether Eller’s behavior should be considered a superseding cause of the accident, another finding that would preclude Indian River’s liability. Restatement (Second) of Torts §§ 440-453. It is beyond dispute that Eller’s conduct “actively operate[d] in producing harm to [Hiram Walker] after [Indian River’s] negligent act or omission ha[d] been committed.” Restatement (Second) of Torts § 441(1). Eller’s conduct was thus an “intervening force” causing the spill; again drawing all inferences in favor of Indian River, the court should have determined that the intervening force was a superseding cause. Among other considerations, Eller's negligence brought about “harm different in kind from that which would otherwise have resulted from [Indian River’s] negligence;” Eller’s negligence was not “a normal result” of Indian River’s negligence; the intervening force was due to Eller’s action; and “the intervening force [was] due to an act of [Eller] which [was] wrongful toward [Hiram Walker] and as such subjected] [Eller] to liability.” See Restatement (Second) of Torts § 442. Evidence before the district court established the foregoing for summary judgment purposes; the court had before it proof that gravity transfers are common and usual, and that Eller had previously performed gravity feeds for Indian River’s drivers who had arrived without the proper pumping equipment.
As a matter of law, Indian River’s conduct in ordering a gravity feed cannot be characterized as negligent on the basis of the facts before the district court. The district court had before it no evidence tending to show that gravity feeds are inherently and unreasonably dangerous; to the contrary, the court was presented with evidence that dockworkers often perform gravity feeds. It may be that gravity feeds are more difficult than pump transfers, but that alone would not render one who requests a gravity feed liable for any damage that arises from a botched execution. We are presented with no substantial evidence that a competently executed gravity feed is an unreasonable solution to the problem of transferring a liquid from one tank to another; indeed, a gravity feed may under some circumstances be more efficient than pumping transfers. We cannot write a rule of law which would prevent prudent persons from requesting gravity feeds.
Nor was summary judgment against Indian River proper under a theory of contract. Assuming Indian River did breach its contract with Hiram Walker, it would be liable only for those damages which it had “reason to foresee as a probable result of the breach when the contract was made.” Restatement (Second) of Contracts § 351(1); see Hadley v. Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 (1854). We certainly cannot say as a matter of law that Indian River had “reason to foresee” that its failure to perform a pump transfer and its request that Eller undertake a gravity feed would result in the loss of nearly all of the Tia Maria. Whether framed as a tort or a breach of contract, summary judgment should not have been entered against Indian River on the question of liability.
B. Eller
We agree that the undisputed facts surrounding the loss of the Tia Maria established Eller’s negligence as a matter of Florida law. See Russ v. State, 140 Fla. 217, 191 So. 296 (1939); Seaboard Coast Line R.R. Co. v. Griffis, 381 So.2d 1063, 1065 (Fla.App.) (“Negligence is the failure to observe, for the protection of another’s interest, such care and precaution as the circumstances demand, or the failure to do what a reasonable and prudent person would ordinarily have done under the circumstances.”), cert. denied, 376 So.2d 72 (Fla.1979); Stirling v. Sapp, 229 So.2d 850, 853 (Fla.1969) (“Where the facts are undisputed and the evidence is reasonably susceptible of but a single inference, the question of defendant’s negligence... becomes one of law for the court.”). An Eller employee not licensed to operate the particular forklift raised the twenty-three ton tank containing Tia Maria without placing dun-nage between the tank and the blades of the forklift. When his supervisor noticed that the tank was slipping, the employee left the tank suspended above the ground for several minutes while searching for another forklift. The tank fell and ruptured; the Tia Maria was lost to the happy wharf rats. Hiram Walker satisfied its burden of producing enough undisputed evidence to make out a prima facie case for negligence under the Russ standard. The burden shifted to Eller to show that, notwithstanding these facts, its employees’ behavior was reasonable under the circumstances. Eller argues that the trial court incorrectly presumed that the Eller forklift operator should have complied with standard operating procedures and “lowered the tank when the tilt was first noticed to save the day.” Eller, who had the burden of showing that this direct inference from the undisputed facts was at least questionable, points to no proffer that calls the inference into doubt. Even assuming that the tank could not have been lowered, Eller does not proffer evidence suggesting why it should not be held negligent for allowing an unlicensed forklift operator to lift the tank without proper dunnage. Accordingly, Eller has raised only a “metaphysical doubt” as to the material facts and its claim must fail. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (when moving party has satisfied its burden, non-movant must come forward with “specific facts showing that there is a genuine issue for trial ” (quoting Fed.R.Civ.P. 56(c)) (emphasis in original)).
Hiram Walker and Eller also join issue on the effect of a “Himalaya” clause in Kirk Line’s bill of lading, which provides that the “limitation of liability [in the Carriage of Goods by Sea Act (COGSA) ] shall inure... to the benefit of any independent contractors performing services hereunder including stevedoring in connection with the goods covered hereunder.” COGSA limits liability to $500 for damage to the tank, a “customary freight unit.” E.g., Caterpillar Americas Co. v. S.S. Sea Roads, 231 F.Supp. 647 (S.D.Fla.1964), aff'd, 364 F.2d 829 (5th Cir.1966). Kirk Line hired Eller, a stevedore, to complete its delivery obligation; Eller was an independent contractor. On summary judgment, however, the trial court concluded as a matter of law that “Eller was a volunteer and acted only when [Indian River] failed to provide the necessary equipment for the pumping operation.” Accordingly, the court found that Eller was not acting within the scope of its stevedoring responsibilities to Kirk Line, and was not entitled to the limitation-of-liability provision of COG-SA. We review this determination de novo, applying the law of COGSA which the parties to the bill of lading made applicable beyond the Act’s legal scope. Assicurazioni Generali v. D’Amico, 766 F.2d 485, 488 (11th Cir.1985); Triple E Development Co. v. Floridagold Citrus Corp., 51 So.2d 435, 438 (Fla.1951) (intent of parties governs construction of contract).
Although Himalaya clauses must be “strictly construed and limited to intended beneficiaries,” Robert C. Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 305, 79 S.Ct. 766, 771, 3 L.Ed.2d 820 (1959); Certain Underwriters at Lloyds v. Barber Blue Sea Line, 675 F.2d 266, 269 (11th Cir.1982), “[w]hen a bill of lading refers to a class of persons such as ‘agents’ or ‘independent contractors' it is clear that the contract includes all those persons engaged by the carrier within the scope of the carriage contract.” Id. at 270. Kirk Line was responsible under the bill of lading for delivering the Tia Maria to Hiram Walker’s agent Indian River; Eller would be an intended beneficiary of the Himalaya clause as long as Kirk Line had not completely discharged its responsibility by the time of the spill. Assicurazioni Generali, 766 F.2d at 489. The question thus presented is whether Kirk Line’s duty was fulfilled when Eller aligned the tank with Indian River’s truck; if so, Kirk Line had completed its responsibilities under the bill of lading before the spill occurred, and Eller could not be said to have been an “independent contractor performing services” under the bill of lading at the time of the accident. If, however, because of Indian River’s failure to secure the proper fitting, delivery was not completed by the mere alignment of the tank with the trailer, then Kirk Line’s duty of delivery would have continued and Eller would have been “an independent contractor performing services” under the bill of lading at the time of the spill, entitled to the $500 limitation.
Hiram Walker proffered the following evidence on this narrow question. First, it offered the deposition testimony of Eller’s director of safety, in which he stated that Eller employees had performed the gravity transfer for the convenience of Indian River and agreed that “doing the gravity transfer bit was over and above the normal expected activities of Eller in transferring products.” Second, this witness testified that during a pumping transfer, Eller had the duty to align the tank and the trailer, but Indian River had the duty to effect the transfer. (Another deposition witness, El-ler’s employee Marshall, confirmed that Indian River bore responsibility for the mechanics of a pump transfer once Eller aligned the tank and the trailer.) Finally, Hiram Walker offered the affidavit of its traffic manager, who stated that “[i]t was HIRAM WALKER’S understanding with INDIAN RIVER that it was the latter’s sole responsibility to transfer the bulk products from the ocean tanks to its tankers. It was not part of HIRAM WALKER’S agreement with KIRK LINE that KIRK LINE would bear that responsibility.”
Eller for its part proffered the affidavit of its local Miami manager, who stated that Eller’s responsibility as an independent contractor for Kirk Line was to “physically move the cargo from ELLER’s lot and deliver the cargo to the consignee by transferring physical possession of the cargo to the consignee.” Of course, Eller’s local manager is probably in a better position than its safety director to know the stevedore’s responsibilities.
Neither party’s proffer demonstrates as a matter of law or undisputed fact at what point discharge of Kirk Line’s responsibility under the bill of lading occurred. The affidavit of Hiram Walker’s safety manager is the only direct evidence that the agreement between Hiram Walker and Kirk Line did not contemplate Kirk Line having any responsibility for the actual transfer of the Tia Maria, but this evidence has substantial weaknesses: it is a conclu-sory statement of an interested party and makes no reference to the actual written agreement between Kirk Line and Hiram Walker; further, it may be predicated upon the incorrect assumption that only a pump transfer would occur.
Inferences from the statements of Eller’s director of safety and its Miami manager lead in opposite directions; a reasonable inference from the statement proffered by Hiram Walker is that Eller — and therefore presumably Kirk Line — had no responsibility for the actual transfer of the liquid cargo whether the transfer was effected by a gravity feed or by pumping. On the other hand, one could reasonably infer from the statement proffered by Eller that the stevedore — and thus presumably Kirk Line — remained responsible under the bill of lading until the last of the liquid cargo was transferred to the care of Hiram Walker’s agent Indian River. Moreover, there are good reasons why a consignee such as Indian River may be responsible for a pumping transfer but not a gravity feed: the pump itself is apparently attached to the consignee’s trailer, but as gravity feeds require the use of a forklift, a stevedore may have primary responsibility for that kind of operation. When a pumping transfer is effected, delivery may occur when the tank and the trailer are aligned — but it does not necessarily follow that delivery in the case of a gravity feed can finally occur before the last of the liquid is drained into the trailer; the scope of Kirk Line’s duty under the bill of lading may thus depend upon the type of transfer that actually is performed. The district court should determine after trial whether Kirk Line’s obligations had completely terminated by the time of the spill, but its conclusion on summary judgment was in error.
REVERSED and REMANDED.
. Aetna, Hiram Walker’s insuror, paid the entire loss and thus Hiram Walker no longer has an interest in the case. Under the normal rules of subrogation, Aetna was the real party in interest and should have sued in its own name. Frank Briscoe Co. v. Georgia Sprinkler Co., 713 F.2d 1500, 1502 n. 1 (11th Cir.1983). The district court stated that Aetna should have filed an appearance, but held that the defect did not warrant dismissal of the claim because counsel for plaintiff advised on the record that he was bringing the claim for the use and benefit of Aetna. This was a bench trial, the fact finder knew that Aetna was the real party in interest, and no defendant has shown any prejudice. The district court did not abuse its discretion by constructively joining Aetna as a party plaintiff and refusing to dismiss the claim.
. See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (in banc). The Eleventh Circuit adopted as binding precedent all decisions rendered by the former Fifth Circuit prior to October 1, 1981.
. Venue may have been incorrect in the New York district court. See 49 U.S.C. § 11707(d)(2)(A)(iii). No party raised this objection, however, and the error was probably cured by the subsequent transfer to the Southern District of Florida.
. Hiram Walker argues that because this case was to be tried without a jury, we should apply the clearly erroneous test of Rule 52 to the findings made by the district judge on summary judgment. Cf. Nunez v. Superior Oil Co., 572 F.2d 1119, 1123-25 & n. 6 (5th Cir.1978) (“If decision is to be reached by the court, and there are no issues of witness credibility, the court may conclude on the basis of the affidavits, depositions, and stipulations before it, that there are no genuine issues of material fact, even though decision may depend on inferences to be drawn from what has been incontrovertibly proved.’’) Assuming that the pleadings incontrovertibly proved all material facts such that only inferences remained to be drawn, we would be left with a definite and firm conviction that the district court erred in holding Indian River liable. Moreover, the trial judge may have incorrectly assumed that no facts were in dispute, for the judge noted that "all the parties to this action have moved for summary judgment, thereby clearly indicating their accord that no genuine issue of fact remains to be resolved.” This is not a correct statement of the law; a movant may be correct in stating that the facts relevant to his theory of the case are not in dispute, yet contest the relevant issues of fact under his opponent’s theory. Walling v. Richmond Screw Anchor Co., 154 F.2d 780, 784 (2d Cir.), cert. denied, 328 U.S. 870, 66 S.Ct. 1383, 90 L.Ed. 1640 (1946). For this reason we think it prudent not to accord a presumption of correctness to the district judge’s fact-finding.
. It is irrelevant that Hiram Walker may have agreed to waive a substantial portion of Eller’s liability; Eller's conduct nonetheless subjected it to liability to Hiram Walker.
. Hiram Walker quotes three Restatement (Second) of Torts provisions, arguing that they prove that Indian River’s negligence in failing to bring the correct fitting was not superseded by Eller’s negligence. None of these sections indicates as a matter of law that Eller’s conduct is not a superseding cause:
(1) Where the negligent conduct of the actor creates or increases the foreseeable risk of harm through the intervention of another force, and is a substantial factor in causing the harm, such intervention is not a superseding cause.
Restatement (Second) of Torts § 442A. Although failing to bring the proper fitting may have increased the risk that the tank would fall (because that danger inheres in a gravity transfer), Indian River’s failure to bring the proper fitting was not indisputably a substantial factor causing the tank to fall.
(2) Where the negligent conduct of the actor creates or increases the risk of a particular harm and is a substantial factor in causing that harm, the fact that the harm is brought about through the intervention of another force does not relieve the actor of liability....
Restatement (Second) of Torts § 442B. Again, Indian River's failure to bring the proper fitting was not necessarily a substantial factor causing the tank to fall.
(3)The intervention of a force which is a normal consequence of a situation created by the actor’s negligent conduct is not a superseding cause of harm which such conduct has been a substantial factor in bringing about.
Restatement (Second) of Torts § 443. Negligent execution of a gravity feed is by no means a "normal consequence” of attempting a gravity feed.
.The colloquy between counsel for Indian River and the safety director for Eller, proffered by Hiram Walker in an attempt to show that gravity feeds are inherently and unreasonably dangerous, merely suggests that gravity feeds are more difficult than pumping transfers.
. There is some confusion in the briefs concerning Indian River’s liability for Eller’s conduct. We do not read the district court’s order on summary judgment to impose liability on Indian River under a theory of agency; the court held Indian River liable for its own acts and omissions.
. So named after the vessel in an English case. See the exegesis in Brown & Root, Inc. v. M/V Peisander, 648 F.2d 415, 417 n. 5 (5th Cir.1981).
. Indian River argues that delivery had already been completed under clause 12 of the bill of lading, which provides that delivery is complete when goods are taken "into the custody of customs or other authorities." Acknowledging that no record evidence suggests that "customs or other authorities” took possession of the liqueur, Indian River argues that "it is a more than reasonable inference that inspection had occurred within the meaning of the bill of lading prior to" Indian River’s arrival. Indian River cannot base its case on a provable fact it never attempted to establish below.
. Because we have reversed the district court's determination of liability as to both Indian River and Eller, we need not address the parties’ arguments about the quantification of damages and the district court’s decision not to award
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
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songer_district
|
C
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What follows is an opinion from a United States Court of Appeals. Your task is to identify which district in the state the case came from. If the case did not come from a federal district court, answer "not applicable".
Billy D. BLUE, Billy Ed Blue, Appellees, v. Don ROSE, Phillip Rose, Mike Rose, Lynn Rose, d/b/a Rose Bros., Donna Sue Rose, Patti R. Rose, Appellants, and Rose Cattle Company.
No. 85-1579.
United States Court of Appeals, Eighth Circuit.
Submitted Nov. 15, 1985.
Decided March 12, 1986.
Rehearings Denied April 22, 1986.
Mark E. Fitzsimmons, Springfield, Mo., for appellants.
Gerard D. Eftink, Kansas City, Mo., for appellees.
Before ARNOLD and WOLLMAN, Circuit Judges, and GUNN, District Judge.
The Honorable George F. Gunn, Jr., United States District Judge for the Eastern District of Missouri, sitting by designation.
GUNN, District Judge.
Don Rose, Donna Sue Rose, Phillip Rose, Lynn Rose, Mike Rose, and Patti R. Rose appeal from a final judgment in the amount of $18,800 actual damages and $150,000 punitive damages entered against them in the District'Court for the Western District of Missouri. Judgment was entered upon a jury verdict in favor of Billy D. Blue and Billy Ed Blue, breeders of registered Holstein cattle, for fraud incident to the sale of cattle to them by appellants doing business as a partnership or joint enterprise. For reversal, appellants argue that the district court erred in: (1) failing to grant a directed verdict in favor of the three women appellants; (2) giving the jury an instruction on the issue of joint venture; (3) refusing to allow a witness to testify; (4) misstating the measure of damages in the jury instructions; and (5) entering judgment for a single amount of punitive damages against all defendants. For the reasons discussed below, we affirm the judgment of the district court.
The six defendants in this case are all related: Don and Donna Sue Rose are the parents of Phillip and Mike Rose who are married to Lynn and Patti respectively. Together they operate a dairy farm in Missouri. In October 1981 appellees, Texas cattlemen, saw an advertisement in The Holstein World, a trade journal, announcing an auction of Holstein cattle at the Rose farm. Appellees sent an agent to Missouri with instructions to buy registered Holstein cows at the auction. On October 17, 1981, appellees’ agent purchased thirty-four (34) head of cattle from the Roses at the auction. Each cow was represented in the auction sale catalog and by the auctioneer as being of certain lineage and as being registered or capable of being registered in the Holstein-Friesian Association of America (HFAA). The agent paid a total purchase price of $33,-340.00 and was told that certificates of registry would be furnished. The money from the sale was deposited into an account of the Rose Cattle Co., and the cattle were transported to appellees’ farm in Texas.
Several weeks later, concerned that the registration papers had not arrived, appellees telephoned appellant Don Rose to inquire about the papers and told Mr. Rose that if the cows were not registered Holsteins, the sale was rescinded.
Appellees were subsequently notified by the HFAA that the accuracy of the Rose farm’s registration records was under investigation. An examination of the records and blood-typing tests revealed that the lineage of all but one of the cows purchased by appellees was not as represented, and the registration of these cows was expunged by the HFAA. Appellees resold all thirty-four cows purchased at the auction.
By special interrogatory the jury found that the six appellants were members of a partnership or joint venture which was responsible for the October 17, 1981 auction. The jury found in favor of appellees on the issue of fraud and awarded $18,800 in actual damages and $150,000 in punitive damages against all appellants jointly. Judgment was entered accordingly and this appeal taken.
SUFFICIENCY OF EVIDENCE
Appellants do not challenge the sufficiency of the evidence to support the jury finding of fraud. Rather, the three women appellants argue that the trial court committed reversible error in overruling their motion for a directed verdict at the close of plaintiffs’ case for the reason that the evidence was insufficient to support a finding that they were members of the partnership or joint venture which committed the fraud.
Under Missouri law, a partnership is “a relationship arising out of contract express or implied whereby two or more parties agree to engage in a common enterprise, each contributing capital or services and each sharing in the profits and losses.” Troy Grain & Fuel Co. v. Rolston, 227 S.W.2d 66, 68 (Mo.Ct.App.1950). A partnership agreement may be implied from conduct and circumstances. Id. There is no essential difference between a partnership and a joint venture; they are factual relationships between two or more persons who conduct a business enterprise together. Grissum v. Reesman, 505 S.W.2d 81, 86 (Mo.1974). The parties to a partnership are not required to know and fully understand all of the legal incidents of the relationship. “Parties ‘entering into agreements and transactions which, by the law of the land, constitute them partners, whatever they may please to say or think about it, or by whatever name they may choose to call it’ will be held to be partners.” Troy Grain & Fuel Co. v. Rolston, 227 S.W.2d at 68, quoting Meyers v. Field, 37 Mo. 434, 439 (1866).
In the present case appellant Don Rose testified that the six appellants were authorized to draw checks on the Rose Cattle Co. bank account. Testimony of Donna Rose, given at another hearing and admitted in evidence at the behest of appellants’ counsel, was that the six appellants operated the farm together as a partnership and that each member performed services for the enterprise. Donna Rose testified directly that these statements were true. She also testified that she and her two daughters-in-law “ran the tickets” at the October 17, 1981 auction. It was stipulated that the gross receipts for all livestock sales in 1981 by any member of the Rose family were divided three ways among the three families.
It is obvious, then, that the evidence supports a jury question on the issue of whether all six appellants were members of a partnership or joint venture. The district court therefore did not err in denying appellants’ motion for a directed verdict. We further hold that the district court properly instructed the jury on this issue and that the special interrogatory was a fair and accurate statement of the law.
EXCLUSION OF WITNESS
Appellants next argue that the district court erred in refusing to allow the testimony of an individual whom appellants had not listed as a witness. In appellees’ case-in-chief, evidence was presented that a certain registered Holstein bull owned by the Roses and listed as the sire of several of the cattle purchased by appellees was in fact impotent. Appellants sought to present the testimony of the former owner of the bull that it had sired several calves. The district court ruled that the witness would not be permitted to testify as he had not been listed by the defendants as required by the court’s pretrial order and local court rule. Appellants now argue that this ruling was reversible error.
It is fundamental that it is within the trial court’s discretionary power whether to allow the testimony of witnesses not listed prior to trial. Admiral Theatre Corp. v. Douglas Theatre Co., 585 F.2d 877, 897-98 (8th Cir.1978); United States v. Pirnie, 472 F.2d 712, 713 (8th Cir.1973) (per curiam); see also Rule 37(b)(2)(B), Fed.R.Civ.P. A ruling by the district court pertaining to this matter will be overturned only if there is a clear abuse of discretion. Id.
In the present case, there was no credible support for appellants’ contention that they were “surprised” by appellees’ evidence on the bull’s physical condition. No reason is offered and none appears why appellants could not have timely identified their witness. It is clear that the district court did not abuse its discretion in excluding the witness in question.
MEASURE OF DAMAGES
Appellants contend that the damages instruction did not correctly set forth the measure of damages. In the damages instruction, the jury was told that if it found for the plaintiffs it should award them the difference between the fair market value of the cattle and the fair market value of the cattle if they had been as represented, plus such sum as would compensate for any other damages plaintiffs sustained as a direct result of the misrepresentation. Appellants argue that this instruction erroneously permitted the jury to award both “benefit-of-the bargain” and “out-of-pocket” damages.
Under Missouri law, a defrauded party may recover the difference between the actual value of the purchased property and its value had it been as represented, as well as special damages, incurred solely by reason-of the fraud. Fong v. Town & Country Estates, Inc., 600 F.2d 179, 182 n. 3 (8th Cir.), cert. denied, 444 U.S. 942, 100 S.Ct. 298, 62 L.Ed.2d 309 (1979); Miller v. Higgins, 452 S.W.2d 121, 125 (Mo.1970).
In this case plaintiffs introduced evidence that the difference between the real and represented value of the cattle purchased from defendants was between $11,-000 and $15,000. In addition, plaintiffs introduced evidence of the following expenditures incident to the fraudulently induced transaction:
$600.00 —cost of having their agent attend the auction
$850.00 —the commission paid for the purchase of the cattle
$7,917.00 — cost of feeding and caring for the cattle from the time of purchase until time of resale
Under the facts and circumstances of this case, these expenditures were proper items of special damages, and the district court properly instructed the jury as to the measure of actual damages applicable to the issues and the evidence of the case. We also hold that the verdict of actual damages returned was fully supported by the evidence.
PUNITIVE DAMAGES
Appellants’ final point on appeal is that the district court erred in authorizing the jury to award punitive damages in one sum against all defendants, rather than in different amounts against each defendant.
In Smith v. Counter, 575 S.W.2d 199, 209-10 (Mo.Ct.App.1979), the Missouri Court of Appeals held that where two partners’ liability for punitive damages was entirely vicarious, based upon the tortious acts of an employee of the partnership, a verdict form which did not allow the jury to find different amounts of punitive damages against each partner was proper. The court, however, did not reach the question presented here as to whether such a verdict form is appropriate where liability for punitive damage is based upon one or more partners’ own conduct.
Under Missouri law, members of a partnership are liable for torts committed by any member acting in the scope of the partnership’s business, even if they do not participate in or have knowledge of the tort. Mo.Ann.Stat. § 358.130 (Vernon 1968); Martin v. Yeoham, 419 S.W.2d 937, 951 (Mo.Ct.App.1967).
Specifically, Martin v. Yeoham states: A necessary foundation for the liability of partners * * * for the tortious act of a copartner is that the act shall be performed in the line of the copartnership business, and if the injury results from a wanton or wilful act of one of the parties committed outside the agency or common business, then the person doing the act and causing the injury is alone responsible, unless the act which constituted the tort was authorized by the members of the partnership or subsequently ratified by them, the act itself having been done in their behalf and interest. * * * [T]he true test is not the illegality or the malicious and willful character of the wrong, but whether it was done within the scope of the wrongdoing partner’s authority; and such determination must necessarily rest on the facts of the particular case.
419 S.W.2d at 951.
Accordingly, the verdict and judgment for compensatory damages against partners liable for the wilful torts of copartners must be in one amount against all jointly sued partners. State v. Cook, 400 S.W.2d 39, 40 (Mo.1966) (en banc).
The above principles are applicable where an award of punitive damages is based upon actions by one or more partners acting within the scope of authority and in furtherance of the partnership business, as in the present case. In such a situation, under the general principles of agency and partnership law, all the partners could be held jointly liable for the punitive damages, and a single sum verdict is warranted. We recognize that in some cases the evidence might support separate findings of punitive damages in varying amounts against partners jointly sued and that the jury should be instructed accordingly. See State v. Cook, 400 S.W.2d at 42 (where evidence supports such a procedure, individual wealth of each defendant is admissible).
We conclude that the evidence in this case does not support such a submission, because, as stated above, the tortious acts were clearly performed within the scope of partnership authority and business. Thus, the single sum verdict and judgment as to punitive and compensatory damages was proper. It is appropriate to note that there was no evidence at trial of the individual wealth of the separate defendants. Such evidence is, of course, inadmissible when a single submission as to punitive damages is made, as is the circumstance here.
The judgment is affirmed.
. The Honorable Russell G. Clark, United States District Judge for the Western District of Missouri.
Question: From which district in the state was this case appealed?
A. Not applicable
B. Eastern
C. Western
D. Central
E. Middle
F. Southern
G. Northern
H. Whole state is one judicial district
I. Not ascertained
Answer:
|
songer_counsel2
|
D
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
Your task is to determine the nature of the counsel for the respondent. If name of attorney was given with no other indication of affiliation, assume it is private - unless a government agency was the party
James P. PASQUALE, Plaintiff, Appellee, v. Robert H. FINCH, Secretary of Health, Education and Welfare, Defendant, Appellant.
No. 7371.
United States Court of Appeals First Circuit.
Dec. 2, 1969.
Morton Hollander, Atty., Department of Justice, with whom William D. Ruckelshaus, Asst. Atty. Gen., Lincoln C. Almond, U. S. Atty., and Robert V. Zener, and Judith S. Seplowitz, Attys., Department of Justice, were on brief, for appellant.
Frank R. Mazzeo, Providence, R. I., for appellee.
Before ALDRICH, Chief Judge, WOODBURY, Senior Circuit Judge, and COFFIN, Circuit Judge.
By designation.
COFFIN, Circuit Judge.
The government has appealed from a final judgment by the district court, Pasquale v. Cohen, 296 F.Supp. 1088 (D.R.I.1969), granting the plaintiff Pasquale’s motion for summary judgment and denying the defendant government’s similar motion. While resisting the government’s appeal on the merits, Pasquale also contends that the government lost its right to appeal by waiting 103 days before noticing its appeal. We consider the plaintiff’s procedural objections first.
The district court entered its final judgment on March 11, 1969, remanding the case to the Secretary of Health, Education and Welfare for a computation of the disability benefits to which the court had found Pasquale entitled. Rule 4(a) of the Federal Rules of Appellate Procedure provides that in all cases in which the United States or its agencies or officers are a party, all parties shall have 60 days in which to notice their appeal. That 60-day period expired on May 12, the 60th day — May 10 — being a Saturday. See Rule 6, F.R.Civ.P. The government did not appeal. However, Rule 4(a) also provides that the district court may extend the original appeal period for a period not to exceed thirty days “upon a showing of excusable neglect”. Due to a mistake in the handling of the mail within the Justice Department, government counsel there first learned about the March 11 judgment on June 4. Seven days later, on June 11 — the 30th day after May 12 — the government filed a motion pursuant to Rule 4(a) to extend the time period for filing the Notice of Appeal, based on an allegation and affidavit of the requisite “excusable neglect”. On June 23, the district court granted the government’s motion and extended the filing time until the next day, June 24. The government filed its formal Notice of Appeal on June 24, the 43rd day after May 12.
Three issues are presented. First, we agree with the view of the government, the district court, and the Second, Fourth, and Sixth Circuits that the district court was not required to make its ruling on the government’s motion within the 30-day period after May 12. C-Thru Products, Inc. v. Uniflex, Inc., 397 F.2d 952, 954-955 (2d Cir. 1968); Evans v. Jones, 366 F.2d 772, 773 (4th Cir. 1966); Reed v. People of the State of Michigan, 398 F.2d 800, 801 (6th Cir. 1968); see Reconstruction Finance Corp, v, Prudence Group, 311 U.S. 579, 582, 61 S.Ci. 331, 85 L.Ed. 364 (1941). To accept Pasquale’s reading of Rule 4(a) might require the court to make a hasty and unconsidered decision, as in a case such as ours where the motion was filed on the 30th day. But see Plant Economy, Inc. v. Mirror Insulation Co., 308 F.2d 275 (3rd Cir. 1962); 9 Moore’s Federal Practice, ¶ 204.13 [2] at pp. 974-978.
Second, although the government’s actual Notice of Appeal was filed on June 24 — the 43rd day after May 12— rather than on June 11, the 30th day, we are willing to assume, for purposes of this case only, that its motion to extend on June 11 served as a notice of appeal for purposes of Rule 4(a). See Fitzsimmons v. Yeager, 391 F.2d 849, 853 (3d Cir. 1968) (en banc), cert, denied 393 U.S. 868, 89 S.Ct. 154, 21 L.Ed.2d 137 (1968); Carter v. Campbell, 285 F.2d 68, 71-72 (5th Cir. 1960); 9 Moore’s Federal Practice, If 203.09, ff 204.13 [3] at p. 979. Obviously the proper procedure is to file the formal Notice of Appeal contemporaneously with the motion to extend — or at least within the 30-day extension period— and we look with disfavor on the government’s inexcusable failure to comply with the clear mandate of Rule 4(a).
What troubles us even more, however, is the district court’s holding that there was “excusable neglect” on the part of the government which justified this 30 day extension. The only excuse offered by the government for the fact that the March 11 judgment was not discovered until June 4 was that the notification was mislaid due to a mistake in the handling of the mail after it was received by the Justice Department. While we accord “great deference” to the district court’s ruling on “excusable neglect”, Harris Truck Lines, Inc. v. Cherry Meat Packers, Inc., 371 U.S. 215, 217, 83 S.Ct. 283, 9 L.Ed.2d 261 (1962), we believe that the excuse offered, without further justification and in light of other factors indicated below, suggests that the 90 day delay here was indeed inexcusable and not the result of the type of inadvertence which Rule 4(a) was intended to rectify.
Rule 73(a), F.R.Civ.P., was amended in 1966 and recodified in 1968 as Rule 4(a), F.R.App.P. Concerning that amendment, which deleted the words “based upon a failure of a party to learn of the entry of the judgment” which had previously followed the words “excusable neglect”, the Advisory Committee stated:
“In view of the ease with which an appeal may be perfected, no reason other . than failure to learn of the entry of judgment should ordinarily excuse a party from the requirement that the notice be timely filed. But the district court should have authority to permit the notice to be filed out of time in extraordinary cases where injustice would otherwise result.” 9 Moore’s Federal Practice, ¶ 73.01 [22] at p. 3126.
In our case, counsel of record who had argued the case in the district court— the Rhode Island U. S. Attorney and his Assistant — received proper notice of judgment in early March. They conveyed such notice to the Justice Department and did no more; counsel at oral argument indicated that the supplementary procedure designed to prevent such inadvertent inaction, by the automatic filing of a protective appeal if nothing is heard from the Justice Department after a certain number of days, was inexplicably not carried out. See Department of Justice Order No. 207-60, § 6. The government is given a 60-day appeal period under Rule 4(a) — rather than the 30-day period normally afforded private parties and state governments and agencies — in order to accommodate interoffice routing procedures. 9 Moore’s Federal Practice, fl 204.10 at pp. 923-924. Yet even though proper notice reached the Justice Department soon after March 11, it was apparently more than two months before the internal routing procedure finally brought such' notice to the attention of the responsible government attorney; indeed, it appeared from oral argument that it was Pasquale’s own inquiry about his benefits, rather than the routing procedure, which finally rendered notice to the responsible attorney. Even then, seven days passed before a Rule 4(a) motion to extend was filed, and even that may have been procedurally inadequate because the formal Notice of Appeal was not filed within the 30-day period which Rule 4(a) clearly requires. See discussion swpra.
We cannot say that such mishandling within the Justice Department after authorized counsel of record receives actual notice, particularly when combined with the other indicia of carelessness indicated above, justifies a court in extending the time for appeal. See Brahms v. Moore-McCormack Lines, Inc., 18 F.R.D. 502 (S.D.N.Y.1955); Lowry v. Long Island Rail Road Co., 370 F.2d 911 (2d Cir. 1966) ; Long v. Emery, 383 F.2d 392 (10th Cir. 1967); but see Resnick v. Lehigh Valley RR, 11 F.R.D. 76 (S.D.N.Y.1951). To say otherwise is so to enlarge a remedial power devised for the exceptional ease as to cover any kind of garden-variety oversight.
Nor does injustice result from our denial of an extension. A man who has erroneously — by the hearing examiner’s own statement — been denied disability benefits in his first effort to obtain them should not be denied those benefits because his second effort is begun one month too late (see infra), when such denial now depends on the government’s obtaining a one month extension for itself under the circumstances we have noted. It does not shock us that depriving the careless government of a month to which it is not entitled, see supra, may result in giving a deserving claimant a month to which he would otherwise, see infra, not be entitled. Accordingly, we hold that the district court erred in granting an extension to the government in the aforementioned circumstances, so that the government’s appeal is precluded.
This disposition would of course normally make unnecessary any consideration of the merits of the government’s appeal. However, we feel compelled to discuss the merits simply because we believe that the district court has rendered a mistaken interpretation of the relevant regulations which could misguide future claimants. Our discussion of this point requires a brief review of the facts in this case.
In August 1961 Pasquale applied to the Social Security Administration for disability insurance benefits, alleging that he had become disabled as a result of a back injury some two years earlier. This application was denied on January 10, 1962. Further adminstrative appeals followed, culminating in a denial of benefits at the highest administrative level— the Appeals Council — on July 5, 1963. Pasquale was notified that he could commence an action in the federal district court within 60 days but no appeal was taken.
On February 10, 1966, Pasquale applied a second time for disability insurance benefits for the same back injury. On May 3, 1967, a hearing examiner found that Pasquale was indeed entitled to benefits for his disability which began at least as early as November 30, 1961, but that such benefits could only be awarded from February 1965, one year before the filing of the second application. Social Security Act, § 223(a) (b), 42 U.S.C. § 423(a) (b) (1964). Pasquale concedes the validity of that holding, but contends that the hearing examiner should have reopened his initial application of August 1961, which reopening would probably have entitled Pasquale to benefits for the full period of his disablement. The hearing examiner's refusal to reopen was sustained by the Appeals Council, which reasoned that 20 C.F.R. § 404.957 — which provides for the reopening of a prior application, for good cause, within four years after its “initial determination”— did not apply to Pasquale because his first application had had its “initial determination” on January 10, 1962, four years and one month prior to the second application. Pasquale appealed this decision to the district court, which held that Pasquale could avail himself of that regulation since the “initial determination”, as those words were intended by § 404.957, had occurred on July 5, 1963, the day the January 1962 determination had become final. Pasquale v. Cohen, 296 F.Supp. at 1093. Thus, we are confronted with the issue whether the words “initial determination” as they appear in 20 C.F.R. § 404.957 refer to the first determination by the Social Security Administration or to the Administration’s final resolution of the first determination.
The reopening provision, 20 C.F.R. § 404.957, provides, in relevant part, that
“An initial or reconsidered determination of the Administration or a decision of a hearing examiner or of the Appeals Council which is otherwise final * * * may be reopened: ******
(b) * * * within 4 years after the date of the notice of the initial determination (see § JfOJf.907) to the party to such determination, upon a finding of good cause. * * * [Emphasis added.]
The reference to § 404.907 which immediately follows the critical words clearly indicates that the words “notice of initial determination” refer to the notice concerning the first determination by the Administration regarding a given application, for that section requires the Secretary to send notice to a claimant when the initial decision is made on his application and, if the application has been denied, to inform the claimant of his right to reconsideration. Pasquale’s § 404.907 “notice of initial determination” was sent on January 10, 1962, more than four years before his effort to reopen for “good cause” was commenced.
Moreover, the repeated use of the phrase “initial determination” throughout these regulations — e. g., 20 C.F.R. §§ 404.902, 404.905-404.914, 404.917, 404.-953, 404.954, and 404.956 — clearly indicates that the words refer to the first step in a four-step administrative appeals system: initial determination, §§ 404.905-404.908; reconsideration, §§ 404.909-404.916; hearing, §§ 404.917-404.940; and Appeals Council, §§ 404.-941-404.955. We have found no indication whatever that the phrase was used or intended in other parts of these regulations to mean anything but the first determination in the administrative scheme; the explicit reference to § 404.907 in the reopening provision itself is overwhelming evidence .that “initial determination” was intended to have the same meaning there that it clearly has in § 404.907 and throughout these regulations. That the determination must be final before it can be reopened, as § 404.957 itself requires, is in no way inconsistent with our interpretation of § 404.957 that the reopening period begins with the notice of initial determination.
The district court concluded that the reopening provision’s reference to “initial determination” was intended to mean the day on which the “initial determination” became final, here July 5, 1963. As we have indicated above, we can find nothing in the- regulations to suggest that those words were intended to have that meaning; sections 404.947 and 404.950 relate to the notice of the Appeals Council’s resolution of an application and had it been that determination which was intended by § 404.957, the reference there would have been to those sections, not to § 404.907.
The district court was concerned by the fact that the claimant who utilized all three administrative appeals might find that his four year “reopening” period had been substantially exhausted by his appeals, so that he would only have a short period in which to seek reopening rather than the full four years that one who made no appeals would have. We think this reasoning faulty for two reasons. First, to read the regulations as to the district court has would afford a much longer reopening period to the claimant who appealed than to the claimant who did not, thereby prejudicing the latter group. In other words, had Pasquaje not appealed, he would only have until January 10, 1966, but since he did take an appeal within the Administration, he would, under the district court’s interpretation, have until July 5, 1967 to seek reopening. More importantly, however, the district court overlooked .the fact that a claimant has a right to introduce new evidence at each level of his administrative appeal. See 20 C.F.R. §§ 404.914, 404.925-404.930, and 404.949. Thus, while he may be using up some of his time for reopening, he has a continuing opportunity to have all his evidence heard whenever he produces it. We think that it would be inequitable to afford an appealing claimant an additional four years for reopening after he has already had additional hearings before the administration.
Thus, we conclude that the clear meaning of § 404.957 also produces a more equal treatment of all claimants. We can conceive of circumstances where these regulations might be administered in such a manner as to prejudice an appealing claimant, i. e., by deliberately delaying a determination on appeal so as to preclude reopening. We cannot believe that a court would be powerless in such exceptional circumstances to allow a reopening to one who sought it promptly. It should be remembered, however, that the regulation in question only bears on a claimant’s right to reopen his application within the Administration; his right to appeal to the federal district court within 60 days of the Administration’s final decision exists in any event. 42 U.S.C. § 405(g) (1964); 20 C.F.R. § 404.951.
Appeal dismissed.
. In both Evans and Reed, the Notice of Appeal was filed within the 30-day extension period but no motion to extend was ever filed. Both Circuit Courts remanded to the district court for a determination of whether there was “excusable neglect” for the late filing of the Notice of Appeal. Without necessarily approving the court’s rule which disregards any need for the timely filing of a motion to extend — with its supporting affidavits — -we do agree with their rule that the district court’s decision on whether to extend for “excusable neglect” need not be made within the 30-day extension period.
Question: What is the nature of the counsel for the respondent?
A. none (pro se)
B. court appointed
C. legal aid or public defender
D. private
E. government - US
F. government - state or local
G. interest group, union, professional group
H. other or not ascertained
Answer:
|
songer_genresp1
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed respondent.
John F. KEALY and Robert M. Snell, Doing Business as Partners under the partnership name of Mid-Plains Development Company, Appellants, v. Roger L. HARTER, Appellee.
No. 81-2404.
United States Court of Appeals, Eighth Circuit.
Submitted June 15, 1982.
Decided July 6, 1982.
Whelan, Foote & Scherr, P. C., Gene C. Foote, II, Stephen A. Scherr, Dale A. Norris, Hastings, Neb., for appellants.
Before LAY, Chief Judge, FAIRCHILD, Senior Circuit Judge, and JOHN R. GIBSON, Circuit Judge.
Thomas E. Fairchild, Senior Circuit Judge, United States Court of Appeals for the Seventh Circuit, sitting by designation.
PER CURIAM.
This case involves a determination of whether a provision in a contract for the sale of land provides for liquidated damages or creates an illegal penalty. The district court found that the provision created a penalty and refused to enforce it. John Kealy and Robert Snell appeal, arguing the district court misconstrued Nebraska law as well as one of the stipulated facts.
Kealy and Snell brought an action in federal district court to enforce two promissory notes executed by Roger Harter in the amount of $15,000 and $50,000. The parties stipulated to the following facts. Kealy and Snell are partners in Mid-Plains Development Co. On February 20, 1980, Mid-Plains contracted to sell the Van Dorn Plaza Shopping Center in Lincoln, Nebraska, for $4,200,000 to Harter, Inc., a corporation owned and controlled by Roger Harter. Section 2 of the contract provided that Har-ter, Inc. should execute a bank draft for $25,000 as “earnest money” to be applied to the purchase price on the closing date.
On April 28, 1980, the parties orally agreed to delay the closing date until May 19, 1980. Harter, Inc. agreed to pay $250 per day as an extension fee. A written agreement on May 19 postponed closing until June 19. Another agreement on May 19 provided that the bank draft would be delivered on or before June 19. On June 15, Roger Harter executed and tendered to Kealy and Snell the notes at issue in this case. On June 19, the parties, by written agreement, postponed the closing date to June 30. The June 19 agreement labels the notes “liquidated damages.”
The parties agreed to another delay on June 30. They agreed that closing would occur when Harter paid $500,000 and that he would have 24 hours to make such payment after he received written notice of Mid-Plains’ termination of the agreement. On July 1, Mid-Plains demanded payment and gave notice of termination. Harter did not tender payment.
Harter never made payment under the promissory notes. Harter did pay $250 per day from April 25 to July 21, 1980.
While these transactions were occurring, on June 3, 1980, Mid-Plains executed a real estate purchase agreement for the sale of the Van Dorn Plaza to Bernie and Bonnie Goler and Ben and Francine Wixen. On August 19, 1980, the Plaza was sold according to this contract.
On November 12, 1980, Kealy and Snell filed a complaint in federal district court demanding payment on two promissory notes executed by Harter in the amount of $50,000 and $15,000. Harter asserted several affirmative defenses. The parties stipulated the facts. On October 20, 1981, Chief Judge Warren K. Urbom held for Harter, finding the agreement to execute the notes created an unenforceable penalty rather than providing for liquidated damages. Kealy and Snell appeal, challenging the district court’s conclusion of law and construction of the facts.
The parties agree that a contractual provision providing for liquidated damages is enforceable while a provision creating a penalty for nonperformance is invalid. The determinative question in this case is whether the notes represent liquidated damages or a penalty. In distinguishing these two types of provisions, the district court cited the test stated in Growney v. C M H Real Estate Co., 195 Neb. 398, 399, 238 N.W.2d 240 (1976):
As a general rule: “The question of whether a stipulated sum is for a penalty or for liquidated damages is answered by the application of one or more aspects of the following rule: a stipulated sum is for liquidated damages only (1) where the damages which the parties might reasonably anticipate are difficult to ascertain because of their indefiniteness or uncertainty and (2) where the amount stipulated is either a reasonable estimate of the damages which would probably be caused by a breach or is reasonably proportionate to the damages which have actually been caused by the breach.” 22 Am. Jur.2d, Damages, s. 214, p. 299. See, also, Abel Constr. Co. v. School Dist. of Seward, 188 Neb. 166, 195 N.W.2d 744.
Id. at 242-43.
Cf. Restatement (Second) of Contracts § 356 (1981); S. Williston, A Treatise on the Law of Contracts §§ 783, 784, at 719-33 (W. Jaeger 3d ed. 1961); A. Corbin, Corbin on Contracts §§ 1058-1060, at 337-53 (1964). The district court found that the promissory notes represented a penalty under the Growney test because the execution of a contract on June 3 to sell the property to third parties rendered the damages from breach of the original contract ascertainable. This is a factual conclusion which we cannot overturn unless we find it clearly erroneous.
The contract to sell the property to the third parties was executed on June 3, two weeks before the June 19 agreement labeling notes executed on June 15 “liquidated damages.” Kealy and Snell argue the second contract did not render all the potential damages ascertainable. They assert that the district court did not find the damages were “absolutely ascertainable.” But damages are never certain and Nebraska courts merely inquire whether the parties can “reasonably anticipate” the damages.
Kealy and Snell also assert that there is a difference between a contract to sell and actual sale. They assert there may be delay between execution of a contract and closing and that a buyer may fail to perform. We need not determine whether damages created by these variables would be chargeable to the original buyer because we believe a degree of contingency, particularly in relation to collateral sources of damage, does not necessarily render damages indefinite.
The district court also concluded that the notes represented a penalty under the second prong of the Growney test. The court found that, at the time the notes were executed, Kealy and Snell knew they would suffer only minimal damage. Thus the amount of the notes was not a reasonable estimate of the potential damages. The court also stated that Kealy and Snell offered no proof that they had, in fact, suffered any damage.
Kealy and Snell also challenge the district court’s construction of paragraph 14 of the stipulated facts. Paragraph 14 reads in part, “On June 3, 1980, the Plaintiff executed a Real Estate Purchase Agreement for the sale of said property to Bernie Goler and Bonnie Goler, husband and wife, and Ben Wixen and Francine Wixen, husband and wife.” Kealy and Snell allege that the executed contract was dated June 3 because it was drafted on that date, but, they assert, the contract was not executed until after the liquidated damage clause was inserted in the original contract.
The stipulation of facts clearly states that the contract was executed on June 3. By contrast, the stipulation clearly differentiates between offer and execution of the contract in describing the agreement between Harter and Kealy and Snell. Voluntary stipulations of fact are conclusive and can be controverted on appeal only under exceptional circumstances. Fenix v. Finch, 436 F.2d 831, 837 (8th Cir. 1971); Hoffman v. Celebrezze, 405 F.2d 833, 836 (8th Cir. 1969). The stipulation of facts in this case was only four pages long. Kealy and Snell do not explain why they agreed to paragraph 14 if it is inaccurate. We thus find no extraordinary circumstances or excuse of any kind. We find the district court’s reliance on the stipulation was appropriate.
We affirm the judgment of the district court.
. Although plaintiffs cite a number of authorities to illustrate the general trend away from disfavoring provision for liquidated damages, they cite no Nebraska case reversing the rule articulated in Sunderland Bros. Co. v. Chicago, B. & Q. R., 104 Neb. 319, 179 N.W. 546, 546 (1920), that if construction is doubtful, a provision will be considered a penalty.
. Courts and commentators have construed the reasonable estimation criteria to require that the parties make a good faith attempt to predict damages. Sun Printing & Publishing Ass’n v. Moore, 183 U.S. 642, 662, 22 S.Ct. 240, 248, 46 L.Ed. 366 (1902); S. Williston, A Treatise on the Law of Contracts § 778, at 693-95 (W. Jaeger 3d ed. 1961); A. Corbin, Corbin on Contracts § 1059, at 345 (1964).
. We note that Harter paid $250 per day from April 25, 1980 to July 21, 1980 as an extension fee.
. We are not told whether the contract executed with the Golers and Wixens on June 3 was contingent on breach by Harter, Inc. If it was contingent, there was no inconsistency in the two contracts being outstanding at the same time.
Question: What is the nature of the first listed respondent?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
|
songer_method
|
A
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine the nature of the proceeding in the court of appeals for the case, that is, the legal history of the case, indicating whether there had been prior appellate court proceeding on the same case prior to the decision currently coded. Assume that the case had been decided by the panel for the first time if there was no indication to the contrary in the opinion. The opinion usually, but not always, explicitly indicates when a decision was made "en banc" (though the spelling of "en banc" varies). However, if more than 3 judges were listed as participating in the decision, code the decision as enbanc even if there was no explicit description of the proceeding as en banc.
McGOWAN v. J. H. WINCHESTER & CO., Inc. BURO v. AMERICAN PETROLEUM TRANSPORT CORPORATION.
Nos. 255, 265, Dockets 20966, 20986.
Circuit Court of Appeals, Second Circuit.
June 24, 1948.
Action by Pasquale Buro against American Petroleum Transport Corp., brought in the Supreme Court of the State of New York and removed by the defendant to the District Court of the United States for the Eastern District of New York. From a summary judgment for defendant dismissing the complaint, 75 F.Supp. 371, plaintiff appeals.
Affirmed.
Jacob Rassner, of New York City (Nathan Baker, Jack Steinman, and Robert Klonslcy, all of New York City, on the brief), for plaintiff-appellant Joseph McGowan.
Jacob Rassner, of New York City (Thomas O’Rourke Gallagher, of Brooklyn, N. Y., and Jack Steinman and Robert Klonsky, both of New York City, on the brief), for plaintiff-appellant Pasquale Buro.
Michael E. Hanrahan, of New York City (Gerard A. Connolly, Franklin Square, L. I., N. Y., on the brief), for defendantappellee J. H. Winchester & Co., Inc.
John L. Quinlan, of New York City (Bigham, Englar, Jones & Houston and John M. Aheuae, all of New York City, on the brief), for defendant-appellee American Petroleum Transport Corporation.
Leavenworth Colby, Sp. Asst, to Atty. Gen., Admiralty and Shipping Sec., Dept, of Justice (H. G. Morison, Asst. Atty. Gen., Edward L. Smith, Sp. Asst, to Atty. Gen., Admiralty and Shipping Sec., Dept, of Justice, and Martin J. Norris, Atty., U. S. Maritime Com’n, of New York City, on the brief), for the United States as amicus curiae.
Before SWAN, CLARK, and FRANK, Circuit Judges.
CLARK, Circuit Judge.
These appeals were argued at the same time; and since each presents the same question, they may be disposed of in one opinion. The question is whether the general agent operating for the United States vessel owned by the latter is responsible for an injury to a third party caused by the negligence of the ship’s crew. There is no dispute as to the facts in either case, and they may be briefly stated.
Both plaintiffs were employees of contractors engaged on behalf of the United States to repair vessels owned and operated by the Government. The defendants, by virtue of contracts with the United States acting by and through the War Shipping" Administration, were the general agents-for the vessels involved. McGowan, a rigger employed by the Seaboard Marine Co., Inc., was engaged in operating a winch on the S.S. “William A. Graham,” while Buro was a scaler employed by Tollefsen Brothers aboard the S.S. “William Penn.” The injury to McGowan occurred in the course of his work aboard the “Graham” when, as a result of negligence on the part of the ship’s crew, a metal shackle attached to a gantline struck him, causing the injury of which he complains. Buro, on the other hand, was injured as a consequence of the negligence of the “Penn’s” owner in failing to fit a proper platform at the point where the latter from a manhole on deck ended in the curved top of a shaft alley. It appears that he was descending into a tank when he slipped and fell because of this described negligence. Although it is conceded that upon proof of negligence each could have recovered from the United States as operating owner in possession of the vessels, each, instead, sued the general agent which the United States had employed under a standard form of agreement to manage and conduct the accounting and certain other shoreside business operations of the vessels. The claim is made that the defendants were in fact in possession and control of the vessels, and hence liable for the negligence that caused the injuries suffered.
The McGowan case proceeded to trial before a jury. The district judge expressly reserved decision on the question of the possession and control of the vessel as a matter of law for his determination. He therefore instructed the jury that, if it found that negligence on the part of the crew had caused the injury, then it should return a verdict for the plaintiff. The jury so found and returned a verdict for the plaintiff for $13,000. Thereafter the district judge granted the defendant’s motion to set aside the verdict and dismiss the complaint. In his memorandum of opinion, 78 F.Supp. 507, he concluded that the members of the crew were exclusively the agents and employees of the United States, and not of the defendant. In reaching this result he relied on the holding in Caldarola v. Thor Eckert & Co., 332 U.S. 155, 67 S.Ct. 1569, 91 L.Ed. 1968.
The Buro case never reached the jury. Buro began his suit in the Supreme Court of the State of New York, and the defendant removed it to the District Court of the United States for the Eastern District of New York. There the judge granted a motion for summary judgment made by the defendant on the basis of the plaintiff’s deposition and the terms of the general agency agreement entered into by the ■ defendant with the United States through the War Shipping Administration. The plaintiff failed to challenge an affidavit of the defendant’s treasurer to the effect that his company managed the “William Penn” “in accordance with the terms of the aforementioned General Agency Agreement, and not otherwise.” As in the McGowan case, the opinion of the district court, D.C.E.D.N.Y., 75 F.Supp. 371, relied on the Caldarola case, supra, as establishing that the agent was not liable for the negligence of the personnel employed by the Government to operate the vessel.
We agree with the result in each case. Indeed, the situations here in their major outlines are the same as those which confronted the Supreme Court in the Caldarola case. There the defendant was the general agent for a vessel owned by the United States under an agreement substantially the same as the ones here involved. There, too, the plaintiff was the employee of a firm engaged to work on the vessel. In the course of his work he was injured by the negligent operation and maintenance of the vessel. The Supreme Court concluded that such general agency agreements should not be read “so as to find the Agents to be owners pro hac vice in possession and control of the vessel.” 332 U.S. 155, at page 159, 67 S.Ct. 1571, 91 L.Ed. 1968. Moreover, .that Court particularly noted the contention urged by the Government as amicus curiae, namely, that, if a contrary result obtained, issues affecting the immunity of such vessels in foreign ports, as well as questions of local taxation, would plague the operation of Government-owned vessels. Indeed, these very considerations in a large measure accounted for the result there reached. They are equally applicable here. The facts before us fall within the 'holding in the Caldarola case.
The plaintiffs argue, however, that, where the general agent is in fact in possession and control of the vessel, it is liable for negligence resulting from its conduct. They say, further, that in such a situation the agency contract with the Government will not relieve it of responsibility for its torts. We need not consider the validity of this assumption, for the plaintiffs have failed to make any showing of such control and possession on the part of the defendants. The evidence relied on by McGowan no more than demonstrates that the defendant’s acts were consistent with the contractual provisions entered into with the Government, while in the Buro case, the defendant’s affidavit that it managed the “William Penn” “in accordance with the terms of the aforementioned General Agency Agreement, and not otherwise,” was not denied. It is settled that the general agency agreement does not make the agent the owner pro hac vice of the vessel so as to impose liability on the agent for injuries such as we have here. It would be an absurdity in such circumstances to impose liability on the agent where its acts have been in accordance with the provisions of the agreement and consistent therewith. That is the situation we have here.
Nor does Hust v. Moore-McCormack Lines, 328 U.S. 707, 66 S.Ct. 1218, 90 L.Ed. 1534, aid the plaintiffs. The Caldarola decision has narrowed the holding in the Hust case to such an extent that the general agent is liable only as “employer” to those seamen on the vessel who are injured as a result of negligence in connection with its operation. The case goes no further than that. Shilman v. United States, 2 Cir., 164 F.2d 649, certiorari denied 333 U.S. 837, 68 S.Ct. 608; Dichmann, Wright & Pugh, Inc. v. Weade, 4 Cir., 168 F.2d 914; Publicker Commercial Alcohol Co. v. Independent Towing Co., 3 Cir., 165 F. 2d 1002. Indeed, in Shilman v. United States, supra, this court held that the agent was not even the “employer” so as to be liable to the seamen for their wages or other contractual obligations.
Accordingly we affirm the judgment in each case.
Question: What is the nature of the proceeding in the court of appeals for this case?
A. decided by panel for first time (no indication of re-hearing or remand)
B. decided by panel after re-hearing (second time this case has been heard by this same panel)
C. decided by panel after remand from Supreme Court
D. decided by court en banc, after single panel decision
E. decided by court en banc, after multiple panel decisions
F. decided by court en banc, no prior panel decisions
G. decided by panel after remand to lower court
H. other
I. not ascertained
Answer:
|
songer_r_fiduc
|
99
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "fiduciaries". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
William DUFFY, Jr., Trustee in Bankruptcy of the Petroleum Conversion Corporation, Appellant, v. James A. VAUGHAN, Appellee.
No. 12762.
United States Court of Appeals Sixth Circuit.
June 25, 1956.
Rosemary Scott, Grand Rapids, Mich., Thomas Cooch, Wilmington, Del., for appellant.
James A. Vaughan, New York City,«for appellee.
Before MARTIN, MILLER and STEWART, Circuit Judges.
PER CURIAM.
This is an appeal from an order of the district court denying the petition of the appellant trustee in bankruptcy to intervene as of right in an action pending in that court. Despite the ingenious arguments of able counsel for the appellant, we are of the opinion that the court was not in error in denying the petition. Upon the reasoning of Judge Starr’s thoroughly considered opinion and the authorities cited therein, the order of the district court is affirmed. Vaughan v. Dickinson, D.C. 19 F.R.D. 323.
Question: What is the total number of respondents in the case that fall into the category "fiduciaries"? Answer with a number.
Answer:
|
songer_appel1_7_2
|
B
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine the gender of this litigant. Use names to classify the party's sex only if there is little ambiguity (e.g., the sex of "Chris" should be coded as "not ascertained").
UNITED STATES of America, Plaintiff-Appellee, v. Stan SMITH, Defendant-Appellant.
No. 88-2817.
United States Court of Appeals, Tenth Circuit.
Nov. 3, 1989.
Steve Kotz, Asst. U.S. Atty., (William L. Lutz, U.S. Atty., and Paula G. Burnett, Asst. U.S. Atty., with him on the brief) Albuquerque, N.M., for plaintiff-appellee.
William D. Fry, Asst. Federal Defender, Las Cruces, N.M., for defendant-appellant.
Before McKAY, SEYMOUR, and MOORE, Circuit Judges.
JOHN P. MOORE, Circuit Judge.
Petitioner Stan Smith appeals from his conviction of bank robbery in violation of 18 U.S.C. § 2113. Mr. Smith contends that the trial court erred by not giving a cautionary jury instruction regarding the testimony of John Heller, a paid informant and rebuttal witness. After reviewing the trial record, we conclude that even if rejection of the defendant’s instruction was erroneous, any error was harmless beyond a reasonable doubt because of the substantial evidence identifying Mr. Smith as the bank robber. Therefore, we affirm Mr. Smith’s conviction. Mr. Smith also appeals the sentence imposed by the lower court which departed upward from the Federal Sentencing Guidelines. Because the trial judge did not give adequate reasons on the record for departing from the Guidelines, we vacate and remand for resentencing.
I.
On March 14, 1988, a man robbed the First National Bank in Las Cruces, New Mexico. After stealing a car from a nearby parking lot one-half hour prior to the robbery, the robber, dressed in a coat and tie and disguised by a hat covering most of his forehead, dark glasses, and a mous-tache, entered the bank and held a pellet gun to a customer’s head. He ordered the tellers to put their money in a bag that he was carrying, then left the bank, went into the parking lot, and drove off in the stolen car. The only issue in dispute at trial was the identity of the man who robbed the bank.
At trial, two of the tellers present in the bank lobby identified Mr. Smith as the robber. In a bandit identification form, one teller described the bank robber as a man of Mr. Smith’s age. She also picked out Mr. Smith in a photo array provided by the police and identified Mr. Smith in court as the robber. Another teller provided a computer sketch of the robber, picked out Mr. Smith from the photo array, and identified Mr. Smith in court. The bank customer who was threatened by the robber, but did not see his face, testified about his general appearance; however, she was unable to identify Mr. Smith. The woman whose car was stolen and used in the bank robbery provided a computer sketch of the man who stole the ear, picked out Mr. Smith from the photo array, and identified Mr. Smith in court as the man who stole her car. In addition, a police officer who was acquainted with Mr. Smith identified him from the photo array and as the man in surveillance photos taken during the bank robbery. A tool salesperson, who had known Mr. Smith for three years, also testified that Mr. Smith was the man in the bank surveillance photos and described the appearance of Mr. Smith on the day of the bank robbery.
For the defense, two other bank tellers who were present in the bank lobby submitted bandit identification forms with descriptions that varied from those given by the prosecution witnesses. In addition, one of these tellers testified that she was unable to identify the robber from the photo array. A teller, who was in the bank vault and not present in the bank lobby during the robbery, identified Mr. Smith because he had been in the bank on several occasions prior to the robbery. Another person also said Mr. Smith had been in the bank on prior occasions with his son. Mr. Smith’s former wife testified that although there was a strong resemblance, Mr. Smith was not the man in the bank surveillance photo.
As a rebuttal witness, the government called John Heller, Mr. Smith’s next door neighbor, who provided information during the police investigation as a paid informant under the Crime Stoppers program. Mr. Heller testified that on the day before the robbery Mr. Smith told him he intended to rob a bank and his plan included stealing a car, dressing up, wearing a fake moustache or mask, using a pellet gun, and leaving town. On surrebuttal, Mr. Smith’s former wife testified that Mr. Smith and Mr. Heller did not have an amiable relationship, and two weeks before the robbery the two men engaged in a pushing match lasting two or three minutes.
During the instructions conference, defense counsel requested that the court give a cautionary instruction for the evaluation of testimony of paid informants. Although the government did not object and the trial judge indicated that he would give the instruction, the “paid informer instruction” was not given. Instead, the court gave another proposed defense instruction which concerned identification testimony.
Mr. Smith filed a motion for a new trial on the ground that the court’s failure to give a paid informer instruction deprived him of a fair trial. The court denied the motion, finding that the paid informer instruction was “clearly duplicative” and counsel’s request for the paid informer instruction was correctly denied because of its untimely submission and because the jury had been properly and adequately instructed.
At the sentencing hearing, the court departed upward from the Sentencing Guidelines and sentenced Mr. Smith to eighty-four months imprisonment followed by three years of supervised release. The district court explained its decision to depart from the Sentencing Guidelines recommended sentence by stating: “The Court in arriving at an appropriate sentence takes judicial notice of the force and violence used by the defendant in committing the offense, which justifies an upward departure from the guidelines.” No other explanation or justification was given for departure from the Guidelines.
II.
A harmless error analysis is the threshold standard for evaluation of the district court’s failure to give the cautionary jury instruction requested by Mr. Smith. Chap man v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967); Rose v. Clark, 478 U.S. 570, 106 S.Ct. 3101, 92 L.Ed.2d 460 (1986). “It is the duty of a reviewing court to consider the trial record as a whole and to ignore errors that are harmless, including most constitutional violations.” United States v. Hasting, 461 U.S. 499, 510, 103 S.Ct. 1974, 1981, 76 L.Ed.2d 96 (1983).
In assessing whether the failure to give the jury instruction was harmless error, this court must look at the whole record. Coleman v. Saffle, 869 F.2d 1377, 1389 (10th Cir.1989). In doing so, we must determine whether we can “declare a belief that [failure to give an informer instruction] was harmless beyond a reasonable doubt.” Coleman, 869 F.2d at 1389 (citing Chapman, 386 U.S. at 24, 87 S.Ct. at 828).
Based upon a review of the entire record, we conclude that the district court’s failure to give the informer instruction was harmless error beyond a reasonable doubt. At trial, there was substantial evidence other than the testimony of Mr. Heller which identified Mr. Smith as the robber. Three witnesses provided descriptions, picked out Mr. Smith from a photo array, and identified him in court. In addition, two witnesses identified Mr. Smith as the man in bank surveillance photographs taken during the robbery. Although defense witnesses created doubt about the identification of Mr. Smith, the government’s case was so strong that the verdict could not have been affected by the trial court’s failure to give the defendant’s requested instruction.
III.
This court reviews sentences imposed under the Sentencing Guidelines according to the statutory standard provided by the Sentencing Reform Act of 1984 and codified at 18 U.S.C. § 3742. Section 3742(e) provides, in relevant part:
(e) Consideration. — Upon review of the record, the court of appeals shall determine whether the sentence—
(1) was imposed in violation of law;
(2) was imposed as a result of an incorrect application of the sentencing guidelines;
(3) is outside the applicable guideline range, and is unreasonable, having regard for—
(A) the factors to be considered in imposing a sentence, as set forth in chapter 227 of this title; and
(B) the reasons for the imposition of the particular sentence, as stated by the district court pursuant to the provisions of section 3553(c); or
(4) was imposed for an offense for which there is no applicable sentencing guideline and is plainly unreasonable.
While we must give “due deference to the district court’s application of the guidelines to the facts,” 18 U.S.C. § 3742(e), we review the application of the guidelines fully for errors of law. United States v. Otero, 868 F.2d 1412, 1414 (5th Cir.1989).
This case presents the question of what findings are required when a district judge decides to depart from the sentencing range provided by the Sentencing Guidelines. Departure is allowed when “the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines_” 18 U.S.C. § 3553(b). The statute sets out specific procedures that the sentencing court must follow when it departs from range. The appropriate part of the statute requires:
The court, at the time of sentencing, shall state in open court the reasons for its imposition of the particular sentence, and, if the sentence—
(2) is not of the kind, or is outside the range, described in subsection (a)(4), the specific reason for the imposition of a sentence different from that described.
18 U.S.C. § 3553(c) (emphasis added). In this case, the brief statement made by the district court at sentencing does not satisfy this requirement.
A general recitation is an insufficient statement of the reasons required by § 3553(c). See United States v. Wells, 878 F.2d 1232 (9th Cir.1989). Specificity of reason is mandated by the statute; therefore, the sentencing court’s statement that it took “judicial notice of the force and violence used by the defendant” adds nothing for review because the offense of which the defendant was convicted subsumes acts of “force and violence.” More importantly, the guidelines themselves assess additional points for possession or use of a weapon, physical injury, and unlawful restraint. United States Sentencing Comm’n, Federal Sentencing Manual § 2B3.1 (1988). Thus, although we assume the court believed the defendant’s acts were beyond the norm for the offense as set out in the guidelines, without the court’s enumeration of the factors upon which that belief was predicated, we simply are left to speculation.
Additionally, the district court failed to indicate whether it found the Sentencing Commission inadequately considered those factors in formulating the guidelines. Such a finding is a condition precedent to imposition of a sentence above the guideline range. See United States v. Michel, 876 F.2d 784 (9th Cir.1989).
Without particularization by the trial court of its reasons for an enhanced sentence, this court cannot engage in the kind of meaningful review intended by § 3742 of the Sentencing Reform Act, which provides that a sentence should be set aside by this court if it departs unreasonably from the Guidelines’ recommended sentence. 18 U.S.C. § 3742(e). The requirement that the district judge articulate specific reasons for any departure from the recommended sentence reflects the intent of Congress to do away with the uncertainties and the disparities in sentencing which resulted from earlier systems where judges had broad discretion. See Mistretta v. United States, — U.S. -, 109 S.Ct. 647, 651, 102 L.Ed.2d 714 (1989). To permit review in the context of this purpose, trial courts must set forth those incidents or circumstances which prompt them to impose greater punishment than the standards contemplate. See Wells, 878 F.2d at 1233.
Accordingly, the sentence is VACATED and the case is REMANDED for resentenc-ing of the defendant in accordance with the principles set forth in this opinion.
. Mr. Smith appeals the sentence imposed by the district court because he did not receive notice of the grounds for departure and the departure was unreasonable. Because the trial court did not provide an adequate explanation on the record for its departure from the Guidelines, we remand for resentencing and do not reach the notice or reasonableness issues.
. This sentence was imposed as an alternative sentence by the trial court which reiterated its holding that the Sentencing Guidelines were unconstitutional and sentenced Smith to 15 years of imprisonment under the law prior to the effective date of the Sentencing Reform Act. Subsequent to the court's pronouncement of Mr. Smith’s sentence, the United States Supreme Court found the Sentencing Guidelines to be constitutional. Mistretta v. United States, - U.S. -, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989). Therefore, Mr. Smith’s alternative sentence imposed under the Sentencing Guidelines is operative.
. Because the lack of an informer instruction was harmless error, we do not need to reach whether the trial court abused its discretion in failing to give the proposed informer instruction.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". What is the gender of this litigant?Use names to classify the party's sex only if there is little ambiguity.
A. not ascertained
B. male - indication in opinion (e.g., use of masculine pronoun)
C. male - assumed because of name
D. female - indication in opinion of gender
E. female - assumed because of name
Answer:
|
songer_genresp1
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the first listed respondent.
Richard DRAYTON, John R. Sauerteig, and Sydney G. Stevens, as escrow agents of the Delaware & Bound Brook Railroad Company, Appellees, v. UNITED STATES of America, Appellant.
No. 85-5432.
United States Court of Appeals, Third Circuit.
Argued April 14, 1986.
Decided Sept. 11, 1986.
Rehearing and Rehearing In Banc Denied Oct. 7, 1986.
John N. Malyska (argued), Henry T. Be-nedetto, Kathryn M. Schatz-Koles, Meyner & Landis, Newark, N.J., for appellees.
Glenn L. Archer, Jr., Asst. Atty. Gen., Michael L. Paup, Jonathan S. Cohen, John A. Dudeck, Jr. (argued), Attys. Tax Div., U.S. Dept, of Justice, Washington, D.C., (Thomas W. Greelish, U.S. Atty., of counsel), for appellant.
OPINION OF THE COURT
BECKER, Circuit Judge.
This income tax case arises in the aftermath of the Rail Reorganization Act. Before us on an appeal from the judgment of the district court in a tax refund suit, it requires us to determine the proper income tax treatment of the interest component of certificates of value delivered to the shareholders of the transferor railroads as compensation for their properties. The district court ruled that the interest component was non-taxable pursuant to 26 U.S.C. § 374(c) (1982). We disagree, however, and hold that the income is fully taxable as ordinary income. Hence, we shall reverse the district court’s grant of summary judgment and instruct the court to enter a summary judgment for the government.
I. THE STATUTORY FRAMEWORK
A. The Rail Act through Blanchette
By the late 1960’s and early 1970’s eight railroads in the northeast and midwest sections of the country had fallen on hard times. Experiencing both physical and financial deterioration, they filed petitions for bankruptcy and began to undergo reorganizations in the bankruptcy courts. However, Congress superseded the reorganization process when it passed the Regional Rail Reorganization Act of 1973, Pub.L. No. 93-236, 87 Stat. 985 (1974), 45 U.S.C. § 701 et seq. (the Rail Act) {amended, 1976, 1981) a comprehensive effort to save the nation’s railway system through a combination of public agencies and private initiative.
The Rail Act established a government corporation, the United States Railway Association (USRA), 45 U.S.C. § 711(a) (1982), which was to develop a Final System Plan for restructuring the railroads into a “financially self-sustaining rail service system.” 45 U.S.C. § 716(a)(1) (1982). The Final System Plan was to provide for the transfer of certain of the properties of the bankrupt railroads to a private railroad incorporated by the federal government, the Consolidated Rail Corporation (Conrail). Pub.L. 93-236, Title III § 301, 87 Stat. 1004 (1974), codified at 45 U.S.C. § 741 (1982). In exchange, the railroads whose properties were taken were to receive common and preferred Conrail stock, plus up to $500 million of USRA obligations guaranteed by the United States. Pub.L. 93-236, Title II, § 206(d)(1), 87 Stat. 994 (1974), codified at 45 U.S.C. § 716(d)(1) (1982); see also Pub.L. No. 93-236, Title II § 210, 87 Stat. 1000 (1974), codified at 45 U.S.C. § 720 (1982) (amended 1980).
In July, 1975, the USRA duly submitted its Final System Plan to Congress, which acquiesced to the plan by not disapproving it within sixty days of its submission. Pub.L. No. 93-236, Title II, § 208, 87 Stat. 999 (1974) codified at 45 U.S.C. § 718 (1982). USRA then submitted all of the Conrail securities and the requisite number of USRA obligations to a Special Court created by the Rail Act, Pub.L. No. 93-236, Title II, § 209, 87 Stat. 999 (1974), codified at 45 U.S.C. § 719(b) (1982).
The Special Court was assigned two primary tasks. First, it was to “order the trustee or trustees of each railroad in reorganization... to convey forthwith [to Conrail]... all right title and interest in the rail properties of such railroad in reorganization [as designated in the Final System Plan],” Pub.L. 93-236, Title III, § 303, 87 Stat. 1005 (1974), codified at 45 U.S.C. § 743(b) (1982). Second, railroads whose assets were transferred to Conrail and which were dissatisfied with the compensation allotted to them by USRA could file complaints before the Special Court, which had the power to determine whether the Conrail securities and the USRA bonds that the railways were to receive as compensation for their properties that had been taken by the government satisfied the constitutional minimum. The Special Court was to adjust the compensation if it determined that it was either too high or too low. See 45 U.S.C. § 743(c) (Special Court to assure that transferor railroads receive “fair and equitable” value for their rail properties and that they receive no less than the constitutional minimum).
The bankrupt railroads’ major creditors challenged the constitutionality of the Rail Act almost immediately. They argued inter alia that the act was an unjustifiable taking without just compensation. In the compendious Blanchette v. Connecticut General Insurance Corps., 419 U.S. 102, 95 S.Ct. 335, 42 L.Ed.2d 320 (1974), the Supreme Court upheld the constitutionality of the Rail Act against a variety of constitutional challenges. In responding to the just compensation challenge, the Court stated that because the Tucker Act, 28 U.S.C. § 1491 (1982), was available to aggrieved transferors, enabling them to challenge their allotted compensation in the United States Claims Court, there was no unjust compensation problem. Id. 419 U.S. at 148-49, 95 S.Ct. at 361.
B. Congressional Response to Blan-chette
In the wake of Blanchette, Congress was faced with the spectre of Tucker Act suits by virtually every creditor of the defunct railroads whose properties were to become part of the Conrail system. To avoid the confusion and uncertainty that would ensue if such suits were allowed, Congress amended the Rail Act in the Railroad Revitalization and Regulatory Reform Act of 1976, Pub.L. No. 94-210, 90 Stat. 31 (1976), (the Reform Act), codified in 45 U.S.C. § 801 et seq. (1982), which changéd the manner of compensating the transferor railways. Instead of simply putting Conrail securities into the Special Court’s coffers, the Reform Act required Conrail to deposit with the Special Court securities and Certificates of Value (CVs), issued by the USRA. Pub.L. No. 94-210, Title VI, § 610(b), 90 Stat. 101, 104 (1976), codified at 45 U.S.C. § 746 (1986). The CVs, which are debt instruments, were designed to give the Special Court some flexibility in compensating the transferors, so that the Tucker Act suits could be avoided. Because CVs are at the heart of this case, it is necessary to discuss them in some detail.
According to the Reform Act, each trans-feror of rail properties was to receive a separate “series” of CVs. Each transferor would get as many CVs as it did shares of series B preferred Conrail stock in exchange for its properties. 45 U.S.C. § 746(b). Although the CVs paid no interest or dividend, they were guaranteed by the USRA and redeemable by the USRA on December 31, 1987, or at such earlier time as the USRA might determine. 45 U.S.C. § 746(c). Each CV had a base value that was determined as follows:
(A) take the net liquidation value of a transferor’s assets, as calculated by the Special Court;
(B) subtract the value of other benefits already provided to the transferor under the Rail Act;
(C) add any amount required to compensate for “unconstitutional erosion” that had occurred during the bankruptcy proceedings;
(D) add 8% interest from the date the assets were transferred to ConRail to the date the CV is redeemed; and,
(E) divide the resultant value by the number of CV’s distributed to the trans-feror.
45 U.S.C. § 746(c)(4). Base value is important because it is used to determine redemption value: redemption value of a CV equals its base value on the redemption date; minus (A) the sum of the fair market value of the series B preferred stock and common stock and all dividends paid on that stock, and; (B) any other sums paid the transferor for its assets; divided by the number of CVs distributed to the transfer- or. 45 U.S.C. § 764(c)(2). See also In the Matter of Valuation Proceedings Under Sections 303(c) and 306 of the Regional Rail Reorganization Act, 425 F.Supp. 266, 276 (Special Court, 1976).
As a result of this formula, the CVs were “adjusters,” for their redemption price was, by definition, the difference between liquidation value of the transferor’s assets and the value of any other compensation given to the transferor. The CVs were intended to fill any gap in compensation caused by the low value of Conrail stock and USRA bonds. They were designed to ensure that all transferors received their constitutional due, so that there would be no Tucker Act suits against the United States.
At the same time that Congress passed the Reform Act, it also passed the Act of March 31,1976, Pub.L. No. 94-253, 90 Stat. 295 (1976), which added 26 U.S.C. § 374(c) to the Internal Revenue Code. Section 374(c)(1) provides:
No gain or loss shall be recognized if, in order to carry out the final system plan, rail properties of a transferor railroad corporation are transferred to the Consolidated Rail Corporation (or any subsidiary thereof) pursuant to an order of the special court... in exchange solely for stock of [Conrail], certificates of value of the [USRA], or any combination thereof.
C. Conrail’s Performance from 1976 through 1981
Conrail’s performance in the second half of the decade of its birth did not meet expectations. Instead of gradually decreasing its reliance on federal assistance and loans, Conrail grew ever more dependent on federal help, and its stock remained virtually valueless. In August, 1981, in response to this poor performance, Congress amended the Rail Act for the second time relevant to this suit. This amendment, Omnibus Budget Reconciliation Act of 1981, Pub.L. No. 97-35, 95 Stat. 357, 643 (1981) (Omnibus Reconciliation Act), codified at 45 U.S.C. § 1115 (1982), stated that “[f]or the purpose of computing the amount for which certificates of value shall be redeemable under § 746” all series B preferred and common stock that had been intended as consideration for the transfer-ors’ property was to be deemed to be without fair market value. As a result of the Omnibus Reconciliation Act, CVs, which had originally been intended as “gap fillers” between the value of the Conrail stock and the liquidated value of the transferred property, became the sole source of payment from Conrail to the transferor railroads.
II. HISTORY OF THIS CASE
The factual background of this case stems from the time when railroads were in their heyday and faith in their future was unbounded. Plaintiffs-appellees are escrow agents for Delaware and Bound Brook Railway Company (“D & BB”) which, in 1879, leased all of its rail properties to the Reading Company for 990 years. Almost 100 years later, in 1973, the Reading Company was one of the major northeast railroads that went into bankruptcy. Although D & BB was solvent, the Final System Plan adopted by USRA encompassed its property too, because of D & BB's long-term lease with the bankrupt Reading Company. Pursuant to the Final System Plan, D & BB’s property was transferred to Conrail on April 1, 1976. Conrail stock and CVs were deposited with the Special Court until the value of D & BB’s assets could be calculated.
USRA assessed the value of D & BB’s contribution as approximately $1,150,000. App. at 10 (Malyska affidavit). Arguing that this figure was too low, D & BB filed a complaint with the Special Court, as was its right. In August, 1981, shortly after the Omnibus Reconciliation Act was passed, and while the suit was still before the Special Court, D & BB and USRA entered into a settlement agreement, a condition of which was that D & BB’s stockholders adopt a complete plan of liquidation pursuant to 26 U.S.C. § 337. The shareholders adopted a satisfactory plan in September, 1981.
In accordance with the settlement agreement, D & BB received CVs worth $6,802,-660. This figure was arrived at by following the procedure prescribed in 45 U.S.C. § 746(c)(4), see supra at 6 (outlining procedure) and n. 1 (text of § 746(c)(4)). Specifically, the figure was arrived at as follows: the parties agreed that the net liquidation value of D & BB’s rail properties on April 1, 1976 was $4,408,417, see 45 U.S.C. § 746(c)(4)(A); they agreed that there had been no other benefits conferred, and that there was no compensation necessary for “unconstitutional erosion,” see 45 U.S.C. 746(c)(4)(B), (C); they computed 8% annual interest on the net liquidation figure from April 1, 1976, the date the assets were transferred to Conrail, see 45 U.S.C. § 746(c)(4)(D); and, finally, they calculated the sum of the net liquidation value and the interest, id. Because the interest figure was $2,394,243, the sum of the interest and the liquidation value was $6,802,660.
USRA redeemed the CVs almost immediately for the full $6,802,660. D & BB thereupon liquidated pursuant to 26 U.S.C. § 337, its shareholders receiving pro rata shares of the proceeds. D & BB dissolved on December 31, 1981. A reasonable amount was left in a liquidation trust for payment of contingent obligations.
Thereupon, D & BB sought a private letter ruling from the IRS concerning the tax treatment of the interest component of the CVs. D & BB submitted that the interest component was a return on capital and therefore should be taxed as a capital gain. The IRS disagreed, however, and stated that the interest was not from the sale of assets but was ordinary income whose tax treatment was governed by 26 U.S.C. § 61(a) (1982). See Appellant's Appendix at 31-32 (IRS letter ruling of May 14, 1982).
D & BB then sought a second letter ruling, this time arguing that since the redemption was a sale pursuant to a § 337 liquidation, there should be no recognition of the gain and no taxation. See supra n. 2. Once again, however, the IRS ruled against D & BB, stating that although the liquidation had followed all the requirements of § 337, the non-recognition treatment would not be extended to the 8% increment because that increment “did not constitute proceeds from the sale or exchange of a capital asset,” but was simply interest income, which is taxed even if received during the course of a § 337 liquidation. See Appellant’s Appendix at 33-36 (IRS letter ruling of July 13, 1982).
On September 9, 1982, D & BB filed its federal corporate income tax form for 1981. In compliance with the letter rulings, D & BB reported interest income of $1,195,728, on which it paid a tax of $545,153. On December 9, 1983, however, D & BB filed an amended return, claiming that the interest component should not have been taxed at all. Unmoved, the IRS continued to treat the interest as ordinary income.
D & BB thereupon filed a suit in the federal district court for the District of New Jersey seeking a refund. The government moved to dismiss and D & BB filed a cross-motion for summary judgment. As explained by the district court, the cross-motions focused on a single issue:
whether the interest received by D & BB represents an amount in excess of the value of its assets, or whether the interest is, pursuant to 45 U.S.C. § 746(c)(4), a component of the actual value of the assets, and therefore not interest at all.
App. at 125.
After hearing argument, the district court denied the government’s motion to dismiss and granted summary judgment for D & BB, 632 F.Supp. 95. According to the court’s analysis, the critical question was whether the interest was intended as (i) an element of base value, or (ii) an excess over value, payable presumably for the period between the seizure of the rail property on April 1, 1976 and the redemption of the CYs. If the interest were an element of base value, then, the district court felt, § 374(c) protected it from taxation; if the interest were an excess over base value, then it would be taxed as ordinary income. See App. at 127-28.
After describing the issue in these terms, the court decided that the interest provided for by statute was “a component of the base value of the certificates of value.... The interest component is thus an integral part of the redemption, or base, value for rail properties, and is not an amount in excess of the value of such properties.” Id. at 130. Thus, it concluded, “[u]nder the express provisions of § 374(c) the aggregate sum received should result in no tax consequences to D & BB.” Id. The court thus ordered the IRS to refund the full amount of the $545,153 to D & BB.
The government appealed. Because the case involves solely questions of law, our scope of review is plenary.
III. DISCUSSION
Although the papers are not entirely clear on the point, it appears that D & BB has essentially two theories according to which it should not be taxed on the 8% interest component. The first theory is simply that § 374(c) in terms proscribes taxation of any income received upon the redemption of the CVs. The second theory is that the 8% interest component is capital gain that by virtue of § 337 is non-taxable. Although the district court relied on the former theory, D & BB presents both here, and we consider them both. We then address two arguments presented by D & BB for limited taxation.
A. The Relevance of Section 37h(c)
D & BB argues that 26 U.S.C. § 374(c) (1982) controls this case because of its instruction that the exchange of rail properties for Conrail securities and CVs is not a recognition event. Since non-recognition events cannot give rise to taxation, D & BB argues, the clear import of § 374(c) is that there can be no taxation on any part of the CVs received from Conrail, even on interest. Appellee’s Br. at 13-14. The district court also relied on this statutory provision in finding for D & BB. See supra at 13.
Despite the district court’s reliance on it, we believe that § 374(c) is not relevant to the issue in this case. Section 374(c) provides non-recognition treatment for the exchange of the railway property for the Conrail securities and CVs. However, we are concerned here not with the exchange of D & BB’s assets for CVs but with the subsequent redemption of the CVs by the USRS. The exchange in this case which took place before the redemption, was not taxed. Redemption is a wholly different transaction from the initial exchange of property for securities, and § 374(c) does not pertain to it. Section 374(c) rendered only the exchange non-taxable, and cannot help taxpayer any more.
B. Characterization of the 8% Interest Component
The parties agree that if the 8% interest component is treated as capital gain, it is not taxable on account of § 337. Their disagreement centers on whether the component is ordinary income or capital gain. We believe that the interest is ordinary income for two principal reasons. The first involves literal statutory construction. Section 61(a)(4) of the Internal Revenue Code, 26 U.S.C. § 61(a)(4) (1982), states that interest income is taxable as ordinary income. The Supreme Court has stated that that section is to be broadly construed, and all exemptions from it construed narrowly. Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 429-30, 75 S.Ct. 473, 475-76, 99 L.Ed. 483 (1955). The plain language of 45 U.S.C. § 746(c)(4) (quoted supra n. 1), which defines the value of CVs, expressly uses the term “interest” without qualification. On account of the express terms of 26 U.S.C. § 61(a)(4) and 45 U.S.C. § 746(c)(4), and the pertinent rules of statutory construction, the interest component of CVs must be treated as ordinary income and are fully taxable.
The second reason for treating the interest component as ordinary income is more analytic, but it is closely related to the first reason. This argument takes as its starting point the definition of interest: “compensation allowed by law or fixed by the parties for use, or forbearance, or detention, or money.” Fall River Electric Light Co. v. Commissioner, 23 B.T.A. 168, 171 (1931) (emphasis added). It is clear that if Conrail had issued the CVs and redeemed them on April 1, 1976, the day it took control of the rail property, there would be no payment based on the 8% interest calculation for the interest was to be calculated from the date on which the assets were transferred to the date on which the CVs were redeemed. Thus the “interest income” in this case is simply payment for the detention of money and falls squarely within the standard definition of interest. Because all other interest is taxed as ordinary income, this interest should be, too.
Strong support for this line of reasoning is found in Kieselbach v. Commissioner, 317 U.S. 399, 63 S.Ct. 303, 87 L.Ed. 358 (1943). Kieselbach involved a New York law that granted property owners whose property had been condemned interest from the date the city took title to the date of payment “as part of the compensation to which such owners are entitled.” The Supreme Court held that the interest was ordinary income under the predecessor of § 61(a):
[T]hese [interest] payments are indemnification for delay, not a part of the sale price. While without their payment just compensation would not be received by the vendor, it does not follow that the additional payments are a part of the sale price under § 117(a). The just compensation constitutionally required is not the same thing as the sale price of a capital asset.
317 U.S. at 404, 63 S.Ct. 305. The point of Kieselbach is that even though it was constitutionally required (“[wjhile without their payment, just compensation would not be received by the vendor”), the interest was not part of the sale price of the capital asset, but was fully taxable as ordinary income. That is exactly the case here: although the interest may have been constitutionally required, as the district court found, see supra at 13-14 & n. 4, it is nonetheless interest income that must be taxed as ordinary income.
D & BB offers several arguments against this position. Although some of them are strong, we find none of them sufficient to overcome the weight of the arguments just considered.
First, D & BB notes that it is entitled to 8% interest on the net liquidation value of the assets it gave to Conrail, compounded annually. It further notes that the 8% is calculated from that net liquidation value, regardless of what other payments taxpayer may get from Conrail. See supra at 6 (paraphrasing 45 U.S.C. § 746(c)(4)). Thus, it concludes, the interest cannot represent payment for the detention of money, for it is calculated without regard to the precise amount of money D &, BB has in fact “lent” the government. Therefore, says D & BB, the term “interest” income is a misnomer for this component of the CVs, for the 8% is in fact a measure of the appreciation of the capital seized by the government. Appellee’s Br. at 22. Hence, D & BB argues, the 8% falls under the § 337 prohibition against taxation.
D & BB’s initial observation is correct: if the interest figure is intended to be payment for the detention of the transferor railroads’ money, then it is incorrectly calculated because it does not take into account all transfers from Conrail to the transferors that might occur between the date the transferor gets its CVs and the redemption date. Despite the technical correctness of this point, we are not persuaded that it is sufficient to overcome the arguments in favor of taxing the interest components of the CVs as ordinary income. In the first place, taxpayer’s alternative explanation for the 8% payment has a fatal flaw. The transferred rail property presumably depreciated, rather than appreciated, between the time it was transferred and the redemption date. It thus makes little sense to speak of capital appreciation in this context.
Moreover, even a sympathetic reinterpretation of D & BB’s argument does not lead to the conclusion urged upon us by D & BB. One might interpret D & BB’s reference to the 8% component as “capital appreciation” to mean that the 8% payment was intended as a substitute for the estimated profit that D & BB would have realized had the property remained in the hands of the Reading Company, D & BB’s lessee. The 8% would not then represent “capital appreciation,” as that term is generally used, but would represent a substitute for the profit that the capital would have created. Although this interpretation avoids the problem of the depreciation of capital assets that we have just noted, it still does not lead to the conclusion that the 8% payment should be treated as other than ordinary income. The actual profits that D & BB would have made had its property not been transferred would be taxed as ordinary income, and it stands to reason that the substitutes for those profits should be taxed in the same way. Thus, even under this interpretation, we do not reach the conclusion that the 8% payment should be treated as a return on capital.
We are thus left with an 8% figure that does not fit neatly into any category of income. Given this imprecision, we are inclined to think that, despite the problem correctly noted by taxpayer, the 8% figure is best treated as ordinary interest. The statute consistently referred to it as such, and that seems to be persuasive evidence that Congress intended it to be treated as ordinary interest. Most likely, Congress simply wanted to keep the calculations simple, and thus ignored the complications that would have arisen if it had insisted that the interest figure take into account the putative payments from Conrail to the trans-feror railroad during the period between distribution of CVs and the redemption date. The mere fact that the interest component was not computed with scientific precision does not outweigh the strong evidence in favor of treating this amount as ordinary interest.
D & BB’s second argument is that although Kieselbach would control if the Rail Act and the subsequent statutes that amended it were condemnation statutes— ones under which the government seizes property for a public use and is required to pay just compensation — the Rail Act was not a condemnation statute but a reorganization (bankruptcy) statute, promulgated pursuant to the Congress’ bankruptcy power, rather than its condemnation power, and therefore that an entirely different analysis applies. See Appellee’s Br. at 33-39. According to D & BB, because the Rail Act is a reorganization statute, the interest component of the CYs is “boot” which is taxed only to the extent of gain realized, and the nature of the gain — ordinary income or capital gain — is determined by the nature of the assets for which the boot was received. Because in this case the transferred assets were capital goods, D & BB argues, the interest is a capital asset, and the gain attributable to the interest is can-celled by the § 337 distribution, see supra n. 2 (discussing § 337).
D & BB relies on Blanchette v. Connecticut General Insurance Corps., 419 U.S. 102, 95 S.Ct. 335, 42 L.Ed.2d 320 (1974), for the proposition that the Rail Act is not a condemnation statute but a reorganization statute. In Blanchette, the Court was presented with the question whether the Rail Act worked an unjustifiable taking without just compensation. Although the Court engaged in a careful discussion suggesting that the Rail Act’s scheme of compensation satisfied the requirements of the eminent domain power, see id. at 149-51, 95 S.Ct. at 361-62, it did not rest on that line of reasoning. Instead, the Court concluded that the question was merely academic, for “the arguments in favor of [characterizing the Rail Act as an eminent domain statute] have no merit,” id. at 152, 95 S.Ct. at 363. Instead, the Court found that the Rail Act was an exercise of Congress’ powers under the bankruptcy clause, U.S. Const. Art. I. § 8, cl. 4.
While Blanchette would appear at first blush to be dispositive in D & BB’s favor, a closer look at the Court’s analysis of the issue suggests that this is not so. The Court gave three reasons for its determination that the Rail Act was a reorganization rather than a condemnation statute: (1) Conrail was to be “basically a private, not a governmental, enterprise,” id. at 152, 95 S.Ct. at 363; (2) that the Rail Act compelled the exchange of property did not disqualify it from being a reorganization statute, for cram-downs are forced exchanges, and they are authorized by the bankruptcy statute which is, clearly, an instance of Congress’ powers under the bankruptcy clause, id. at 152-53, 95 S.Ct. at 363; and, (3) there were ample safeguards of judicial review to make this a reorganization statute, id. at 154, 95 S.Ct. at 364. Only the first of the Blanchette Court’s reasons explains why the Rail Act must be a reorganization statute and cannot be a condemnation statute. The second and third parts are simply reasons that the Rail Act is not disqualified from being a reorganization statute; obviously, they do not disqualify the Rail Act from also being a condemnation statute. The controlling power of the Blanchette Court’s characterization of the Rail Act therefore depends upon the first part of the explanation. However, the first part of the explanation is no longer true: as noted above, the plans for a private Conrail failed. In response to that failure, Congress passed the Omnibus Reconciliation Act, under which Conrail is, and has been at least since that act, primarily a governmental enterprise. It is thus open to doubt that Blanchette controls on this point today.
We need not decide this question, for even assuming that the Rail Act is indeed a reorganization statute rather than a condemnation statute, we are not persuaded that the treatment of the interest should be any different under the one than under the other. Kieselbach’s holding that any money paid for delay on payment — even money that is constitutionally required — is fully taxable as interest did not depend upon the nature of the underlying statute as a condemnation statute. Kieselbach is thus on all fours with this case, and controls it, regardless of whether the Rail Act is characterized as a condemnation statute or a reorganization statute.
D & BB’s third argument proceeds from an observation about the allocation of basis between Conrail securities and CVs, and the alleged inequities that might result from that allocation if D & BB cannot treat the 8% interest component as capital income. Basis is allocated between the CVs and the Conrail stock in direct proportion to their fair market values. Treas.Reg. 1.358-5. The fair market value of the CVs includes the value of the CVs attributable to the 8% interest. D & BB notes that because the 8% interest figure is included in the basis calculations the CVs will have a relatively larger basis attributed to them than will the Conrail stock. So long as that interest component is treated as ordinary income, D & BB warns, D & BB might realize (1) an excessive capital loss on the CVs, (2) an excessive capital gain on the stock, and (3) a large measure of ordinary income on the interest component. If the sale of the CVs and stock were sufficiently far apart, D & BB continues, the capital loss on the CVs could not be offset against the gain on the stock and could be offset only to a limited extent against the ordinary interest income. Appellee’s Br. at 46-47. See also 26 U.S.C. §§ 1211, 1212 (1982) (governing treatment of capital losses). The net result could be a transaction in which D & BB loses money, and yet on which it is (a) taxed on ordinary income, and (b) it is left with a large, unuseable, capital loss. Only if the interest
Question: What is the nature of the first listed respondent?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
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songer_sentence
|
D
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What follows is an opinion from a United States Court of Appeals. The issue is: "Did the court conclude that some penalty, excluding the death penalty, was improperly imposed?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed". If the court answered the question in the affirmative, but the error articulated by the court was judged to be harmless, answer "Yes, but error was harmless".
UNITED STATES of America, Appellee, v. John M. CRONIN, Defendant, Appellant. UNITED STATES of America, Appellee, v. Robert E. STARCK, Defendant, Appellant. UNITED STATES of America, Appellee, v. Nathaniel M. MENDELL, Defendant, Appellant.
Nos. 92-1790, 92-1791 and 92-1792.
United States Court of Appeals, First Circuit.
Heard Jan. 4, 1993.
Decided March 30, 1993.
Annemarie Hassett with whom Federal Defender Office was on brief for defendant, appellant John M. Cronin.
Richard C. Driscoll, Jr., with whom Dris-coll and Mattingly, P.C. was on brief for defendants, appellants Robert E. Starck and Nathaniel M. Mendell.
Mark J. Balthazard, Sp. Asst. U.S. Atty., with whom A. John Pappalardo, U.S. Atty., was on brief, for appellee.
Before BREYER, Chief Judge, ALDRICH, Senior Circuit Judge, and SELYA, Circuit Judge.
BAILEY ALDRICH, Senior Circuit Judge.
Defendants Cronin, Starck and Mendell were variously convicted on some 15 of a 20 count indictment for mail fraud and inducing interstate transportation to obtain property by fraud, 18 U.S.C. §§ 1341 and 2314. Cronin was sentenced as an organizer or leader; Starck and Mendell as managers or supervisors. They appeal, claiming that the evidence did not warrant findings of guilt, or, in any event, justify these added characterizations, and that the orders for restitution were excessive. We affirm, except as to the last.
The fraud involved sales of time shares in a proposed Cape Cod resort, Village Green. Although there were many subsidiary misrepresentations of consequence, the basic ones were that Village Green was a sound long-term investment; that its property, then a motel, would be renovated for the 1989 season; and that it was a member of RCI, Resort Condominium International, Inc. Membership in RCI would permit exchanging time at Village Green for other resorts, and was a. most attractive inducement. In point of fact Village Green had no financing even sufficient to get off the ground; initial obligations were not met, and, not long after the start, foreclosure and bankruptcy were not only inevitable, but imminent. Second, with respect to renovation, there was no bona fide prospect of financial ability to accomplish it. Third, the sales pitch was larded with RCI posters; brochures were offered many customers (contrary to RCI’s instructions), and the sales agreements recited membership, whereas, in fact, the membership application was never completed, and was rejected. In sum total, some $272,000 was collected of which little was returned, with sales continuing while other protests were ignored.
Each defendant denies guilt, or, at the least, says that the others were more responsible. According to Cronin, “[T]he prosecution’s evidence amounted to nothing more than mere association between defendant and the sales people (sic) who made the misrepresentations_ The prosecution presented no substantial evidence that defendant had, or, more importantly, exercised control over the manner in which the time shares were sold ... There was no evidence that defendant read, reviewed, discussed, or otherwise knew the contents of the sales documents ... The evidence was that the salespeople ... not defendant, told prospective purchasers that Village Green was a member of RCI ... These salespeople were under the direct and constant supervision of Hart, the Project Director.”
In point of fact Cronin was the originator of the development. He had made contact with one Hatfield, who led him to Starck and Mendell to provide financing. The financing was never completed, as he knew, and Hatfield told him it was essential. Cronin obtained a sizeable six month loan at 24% interest annually, subject to endorsement by Starck and Mendell. He was to receive $400,000 for his contribution to the development, and was said not to share with Starck and Mendell as owners because he had had some difficulty at the Registry of Deeds. He took a note and third mortgage, which, surely, maintained his interest.
As to Cronin’s innocence of what was going on, Hart, the Project Director, was partly hired by him, and reported to him. Cronin, in fact, was in charge of marketing, and was said to be present every day. He had been in charge of marketing at an earlier development, and was no amateur. He could not help but see the RCI posters and brochures having, in fact, directed the installation of an RCI room, and he told at least one salesman they were already a member. (Others said he said it was going through as a matter of course, which was equally untrue.) The rosy view painted in his brief is not what we consider. The most that might be said is that the enterprise may have started on good intentions, but when that paving ran out it proceeded on the backs of prone customers.
We mention briefly Cronin’s objection to testimony that he instructed the contract secretary to place the name Bernard Cohen on the weekly payroll request at $1,500, at the same time telling her that Cohen was a dead friend of his. Cronin asserts this to have been irrelevant and highly prejudicial. Rather, it was highly relevant. In addition to showing that Cronin was improperly milking the scheme, contrary to his denial “that money was paid [him]” (payroll distributions were in cash), it showed the degree to which he was in charge. The court’s finding that relevancy prevailed over prejudice was well warranted.
We pause here to say that enough has been shown to justify the court’s finding, with reference to sentence, that Cronin was an organizer or leader. U.S.S.G. § 3Bl.l(a).
Turning to Starck and Mendell, they, as trustees, were the title owners, and had personally endorsed the purchase note. The jury found in their favor on some early counts. They contend, for this and other reasons, that they did not “devise the scheme.” Passing the fact that defendants can take no comfort from inconsistent verdicts, Harris v. Rivera, 454 U.S. 339, 345, 102 S.Ct. 460, 464, 70 L.Ed.2d 530 (1981), it is not necessary that a defendant be an original organizer. United States v. Serrano, 870 F.2d 1, 6 (1st Cir.1989). On the issue of the RCI alone there were ample incidents to warrant conscious deceit. On top of this, these defendants could not have been ignorant of the many financial difficulties that, in due course, presaged ruin.
As to the sentencing increase because these defendants were found to be managers or supervisors, U.S.S.G. § 3Bl.l(b), Starck and Mendell were, after all, the owners. We review only for clear error, United States v. Panet-Collazo, 960 F.2d 256, 261 (1st Cir.), cert. denied sub nom., Diaz v. United States, — U.S.-, 113 S.Ct. 220, 121 L.Ed.2d 158 (1992), and we see none. Manifestly they cannot deny responsibility for deliberate misrepresentation by salesmen of which they were aware, even to the point of receiving complaints, simply on the ground that they were not the ones who devised the procedure. This would be a happy day for vendors with loose consciences. The record is replete with misrepresentations, and of defendants’, at least occasional, awareness and lack of concern.
With reference to sentences, Starck and Mendell complain that the court charged them with points for obstructing justice by committing perjury. Our prior rejection of this contention, United States v. Batista-Polanco, 927 F.2d 14, 21-22 (1st Cir.1991), has since been confirmed. United States v. Dunnigan, — U.S.-, 113 S.Ct. 1111, 122 L.Ed.2d 445 (1993).
Next, defendants complain that their scheme had commenced prior to the Guidelines. As to the prison sentences, they were concurrent, and even though mail fraud counts are separate offenses, see United States v. Lilly, 983 F.2d 300 (1st Cir.1992), there can be no possible constitutional question. There is a problem, though, with regard to restitution. Although Starck and Mendell state in their brief that the court ordered restitution for the full amount obtained, this was not so individually. No defendant was convicted on all counts, and as to each defendant the court ordered deducted from the full amount the counts as to which he had been acquitted. This, however, still charged him for more than the counts on which he was convicted — there had been much more collected than was named in the indictment’s 20 counts. The government argued that in determining the length of sentence it was proper to look at the entire picture. This is correct, United States v. Fox, 889 F.2d 357 (1st Cir.1989); indeed, even to considering offenses found by the court though there had been a jury acquittal. United States v. Mocciola, 891 F.2d 13, 17 (1st Cir.1989). This, however, is for enhancement of prison terms within the guidelines. Restitution is a separate matter. 18 U.S.C. § 3663. In Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990), the defendant, charged, in several counts, with the use of stolen credit cards, pled guilty to the fraudulent use of one. The order for restitution included use of others. The Court reversed, saying the outer limit was “the loss caused by the conduct underlying the offense of conviction.” Id. at 420, 110 S.Ct. at 1984. This decision, however, did not entirely clear the air, and the circuits have split as to its application in mail fraud cases.
As of the moment, five circuits have answered, or appear disposed to answer, that the “offense of conviction” is the particular mailing charged. See United States v. Pivorotto, 986 F.2d 669, 673 n. 5 (3d Cir.1993); United States v. Seligsohn, 981 F.2d 1418, 1421 (3d Cir.1992); United States v. Jewett, 978 F.2d 248, 252 (6th Cir.1992); United States v. Streebing, 987 F.2d 368, 374-376 (6th Cir.1993); United States v. Gravatt, 1991 WL 278979 at *4-*5, 1991 U.S.App. LEXIS 30671, at *10-*14 (6th Cir. Dec. 27, 1991) (rep’d mem. 951 F.2d 350); United States v. Sharp, 941 F.2d 811, 814-15 (9th Cir.1991); United States v. Angelica, 951 F.2d 1007, 1009 (9th Cir.1991); United States v. Wainwright, 938 F.2d 1096, 1097-98 (10th Cir.1991); United States v. Stone, 948 F.2d 700, 703-04 (11th Cir.1991); see also United States v. Marsh, 932 F.2d 710, 712-13 (8th Cir.1991) (Heaney, J., with the other two judges concurring in the result). Two circuits have, however, answered that the offense includes the scheme as a whole. See United States v. Stouffer, 986 F.2d 916, 928 (5th Cir.1993) (Garza, J., with whom Smith, J. concurred; Reavley, J. dissented on this issue); United States v. Bennett, 943 F.2d 738, 740 (7th Cir.1991), cert. denied, — U.S. -, 112 S.Ct. 2970, 119 L.Ed.2d 590 (1992); United States v. Brothers, 955 F.2d 493, 497 (7th Cir.), cert. denied, — U.S. -, 113 S.Ct. 142, 121 L.Ed.2d 94 (1992); United States v. Longer, 962 F.2d 592, 600-01 (7th Cir.1992); United States v. Turino, 978 F.2d 315, 317-19 (7th Cir.1992).
This is a difficult question, and we well understand the split. Congress, meanwhile, since defendants’ offenses, has amended the statute in fa.vor of broad restitution. Under these circumstances we forego total analysis, and for the brief pre-amendment period covered by the present case are content to accept the lenient majority view. The sentence with respect to restitution must be limited to the amounts in the counts on which the particular defendant was found guilty.
Affirmed, except remanded for correction of orders for restitution in accordance with this opinion.
. (2) For the purposes of restitution, a victim of an offense that involves as an element a scheme, a conspiracy, or a pattern of criminal activity means any person directly harmed by the defendant’s criminal conduct in the course of the scheme, conspiracy, or pattern. § 3663(a)(2). Added by Pub.L. No. 101-647, § 2509, 104 Stat. 4789, 4863 (Crime Control Act of 1990).
Question: Did the court conclude that some penalty, excluding the death penalty, was improperly imposed?
A. No
B. Yes
C. Yes, but error was harmless
D. Mixed answer
E. Issue not discussed
Answer:
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songer_appel2_7_2
|
B
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the second listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine the gender of this litigant. Use names to classify the party's sex only if there is little ambiguity (e.g., the sex of "Chris" should be coded as "not ascertained").
Mrs. Charlotte L. WORLEY, Adm’x, and C. H. Worley, Jr., a Minor, Appellants, v. Ross V. DUNN, Trustee, et al., Appellees (three cases). Mrs. Charlotte L. WORLEY, Adm’x, and C. H. Worley, Jr., a Minor, Appellants, v. FIRST AMERICAN NATIONAL BANK et al., Appellees. Mrs. Charlotte L. WORLEY, Adm’x, and C. H. Worley, Jr., a Minor, Appellants, v. Robert W. STURDIVANT et al., Appellees.
Nos. 13271-13273,13301,13302.
United States Court of Appeals Sixth Circuit.
March 3, 1958.
Charlotte L. Worley, per se.
Robert W. Sturdivant, Elkin Garfinkle and Bass, Berry & Sims, Nashville, Tenn., for First American Nat. Bank et al.
Robert W. Sturdivant and Elkin Gar-finkle, Nashville, Tenn., for Sturdivant et al.
Robert W. Sturdivant, Fred Elledge, Jr., Andrew M. Gant, Jr., J. O. Bass, Elkin Garfinkle, William Berry, Nashville, Tenn., for Dunn et al.
Before ALLEN and MILLER, Circuit Judges, and JONES, District Judge.
SHACKELFORD MILLER, Jr., Circuit Judge.
The several proceedings in the District Court, in which these five appeals were taken, arise out of the bankruptcy of the National Specialty Company. These bankruptcy proceedings, which started in 1951, have had our consideration in three prior appeals. United States v. Worley, 6 Cir., 213 F.2d 509, certiorari denied, 348 U.S. 917, 75 S.Ct. 301, 99 L.Ed. 719, rehearing denied, 1955, 348 U.S. 940, 75 S.Ct. 361, 99 L.Ed. 736; Worley v. Elliott, 6 Cir., 231 F.2d 526, certiorari denied, 352 U.S. 855, 77 S.Ct. 82, 1 L.Ed.2d 66, rehearing denied, 1956, 352 U.S. 937, 77 S.Ct. 229, 1 L.Ed.2d 170; Worley v. National Specialty Co., 6 Cir., 243 F.2d 165. The factual situation is set out in those opinions and need not be repeated here. The present five appeals, prosecuted in forma pauperis, have been heard and considered together by the Court upon the records and briefs and arguments of appellant, Mrs. Charlotte Worley, individually, and as Admin-istratrix of the estate of Claude Henry Worley, deceased, pro se, and the attorneys for the appellees. The voluminous records, in the form presented to us, are very unsatisfactory. The numerous motions, briefs and reply briefs filed by the appellants, obviously drafted and written without the assistance of an attorney, largely fail to clearly present and meet the real issues involved. Our consideration of the records and briefs, however, results in the following conclusions.
Following the denial of petition for certiorari in United States v. Worley, supra, the appellants filed in the District Court on April 21, 1955, a petition for a new trial in said cause, which motion the Trustee in Bankruptcy moved to strike. Following a hearing before Judge Martin, a member of this Court, sitting as a District Judge by designation, an order was entered on May 6, 1957, denying the motion for a new trial and sustaining the motion to strike. An order was also entered directing the Referee to schedule a final meeting of creditors and report his actions therein to the District Court. Appeals No. 13,301 and No. 13,302 complain of these orders. Favorable consideration by this Court of these appeals is foreclosed by our previous rulings in United States v. Worley, supra, Worley v. Elliott, supra, and Worley v. National Specialty Co., supra, which has become the law of the case. We expressly stated in Worley v. Elliott, supra, 231 F.2d 526, 527, referring to our ruling in United States v. Worley, supra, 213 F.2d 509, “Our decision has become the law of the case in this respect and will not be reconsidered by us nor relitigated in the District Court.” We closed the opinion in that case with the statement, “The decrees of the bankruptcy court are affirmed and it is directed to proceed as expeditiously as possible with the final liquidation of the estate.” Appellants’ motion for a new trial filed in the District Court after denial of certiorari by the Supreme Court was properly overruled by the District Judge. In addition to the lack of merit in the motion, obviously, it was not timely. The order directing a final meeting of creditors looking to the closing of the bankruptcy proceedings was clearly proper and in keeping with the directive of this Court in Worley v. Elliott, supra. We now repeat that directive and call appellants’ attention to the fact that there should be an end to a case in litigation, and that when litigants have had their day in court and a final judgment rendered, the successful party and the court should not be burdened with successive efforts thereafter to relitigate the same issues. Baldwin v. Iowa State Traveling Men’s Association, 283 U.S. 522, 525-526, 51 S.Ct. 517, 75 L.Ed. 1244. See also our previous opinion in Worley v. National Specialty Co., 243 F.2d 165, 166.
Appeals Nos. 13,271, 13,272 and 13,273 arise out of actions filed by the appellants in the District Court. Motions to dismiss on behalf of the appellees in each case were sustained by the District Judge, who filed a written explanation of the ruling.
The claim in No. 13,271 was for salary alleged by Mrs. Worley to be due and owing her by the bankrupt corporation. The District Judge ruled that the exclusive remedy was to file the claim with the Referee in the bankruptcy proceeding; that the United States had not given its consent to the type of action being asserted against it, Dalehite v. United States, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427; United States v. Worley, supra; and that the allegations were insufficient to establish liability against the other individual appellees.
The claim in No. 13,272 was for recovery by appellants personally of corporate funds of the bankrupt alleged to have been misappropriated. The District Judge ruled that a stockholder has no personal cause of action against an officer of the corporation for misappropriation of assets, which right of action accrues to the trustee in bankruptcy, and that the proper procedure for the assertion of an unliquidated claim against a bankrupt estate was to file the claim with Referee in Bankruptcy.
The claim in No. 13,273 was the alleged improper settlement of claims by the Trustee in Bankruptcy. The District Judge ruled that the settlements complained of had been expressly approved by the Court in other proceedings after examination of the facts pertaining thereto.
Orders of dismissal were entered on March 4, 1957, in the two cases first above referred to, and on February 26, 1957, in the third case above referred to. Notice of appeal was filed in each case on March 8, 1957. On March 18, 1957, appellants filed in the District Court in each case a motion to dismiss the appeal and that the Court alter and amend its judgment. These motions were also argued before Judge Martin who on May 6, 1957, entered an order in each case which stated that upon consideration of the entire record in the cause and the arguments of the attorneys appointed by the Court to represent the appellants, it appeared that insofar as the motion sought to alter and amend the judgment previously entered, it raised matters that had previously been adjudicated adversely to the appellants, and no error appearing in the judgment, the motion was denied. The present appeals were taken on June 6, 1957, from these orders of May 6, 1957.
In our opinion, the three actions were properly dismissed by the District Judge in the orders of February 26, 1957, and March 4, 1957, and there was no error in the entry of the subsequent orders on May 6, 1957, denying the appellants’ motion to alter and amend the judgment in each ease.
The judgment in each of the five appeals is affirmed.
Question: This question concerns the second listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". What is the gender of this litigant?Use names to classify the party's sex only if there is little ambiguity.
A. not ascertained
B. male - indication in opinion (e.g., use of masculine pronoun)
C. male - assumed because of name
D. female - indication in opinion of gender
E. female - assumed because of name
Answer:
|
songer_respond1_1_4
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "financial institution". Your task is to determine what subcategory of business best describes this litigant.
In re TENNESSEE PUB. CO. TENNESSEE PUB. CO. v. AMERICAN NAT. BANK et al. CARPENTER v. TENNESSEE PUB. CO.
Nos. 7266, 7267.
Circuit Court of Appeals, Sixth Circuit.
Feb. 13, 1936.
ALLEN, Circuit Judge, dissenting in part.
Lewis S. Pope and Albert Roberts, both of Nashville, Tenn. (Lewis S. Pope, White & Howard, and Roberts & Roberts, all of Nashville, Tenn., on the brief), for Tennessee Pub. Co.
Cecil Sims, of Nashville, Tenn. (Bass, Berry & Sims, of Nashville, Tenn., on the brief), for American Nat. Bank and Paul M. Davis.
H. G. Fowler, of Knoxville, Tenn. (J. A. Fowler and S. F. Fowler, both of Knoxville, Tenn., on the brief), for receiver C. O. Carpenter.
Charles C. Trabue and Thomas H. Malone, both of Nashville, Tenn., for M. & O. Paper Co.
Pitts, McConnico, Hatcher & Waller, of Nashville, Tenn., for Ingram and Bradford.
W. E. Norvell, of Nashville, Tenn., for American Union Bank and others.
Before MOORMAN, STMONS, and ALLEN, Circuit Judges.
SIMONS, Circuit Judge.
The main appeal is from a final order and decree dismissing the debtor’s petition and plan for corporate reorganization under the provisions of section 7713 of the Bankruptcy Act, as amended (11 U.S.C.A. § 207). The appeal was allowed by the District Judge, but the debtor later, conceiving the appeal to be governed by section 24b, as amended (11 U.S.C.A. § 47 (b), filed a petition with this court for leave. It appearing that the petition was timely, we treat the appeal as having been allowed, and an order to that effect may be entered. The cross-appeal is from a final order incorporated in the decree overruling a motion to dismiss the debtor’s petition on the ground that it was not filed in good faith as provided by the statute. The cross-appeal was likewise allowed by the District Judge, but no petition, timely or otherwise, for its allowance here was presented. A motion to dismiss the cross-appeal is before us. Regarding the main appeal as properly allowed under section 24b, Vitagraph, Inc., v. St. Louis Properties Corp., 77 F.(2d) 590 (C.C.A.8); Credit Alliance Corp. v. Atlantic, Pacific & Gulf Refining Co., 77 F.(2d) 595 (C.C.A.8); Campbell v. Alleghany Corp., 75 F.(2d) 947, 955 (C.C.A.4); Humber v. Bankers’ Trust Co., 70 F.(2d) 265 (C.C.A.6), and regarding it also, as will later appear, as raising, the question generally of the validity of the decree, whether based upon valid or invalid grounds, we give no consideration to the cross-appeal, and it may be dismissed.
The Tennessee Publishing Company, designated as the debtor, according to the statute, had for many years published both a morning and an evening newspaper in Nashville, Tenn. On March 3, 1933, by general creditors’ bill, its affairs were placed in charge of a receiver appointed by the District Court. The proceedings were filed by appellee Carpenter, receiver ofoa closed bank, which held $28,-000 of the debtor’s bonds, which were part of an issue of $750,000 dated November 1, 1928. The rate of interest borne by the bonds and their maturity dates nowhere appear, but they were secured by a deed of trust executed by the debt- or, which provided that upon default in the payment of interest or principal the security might be foreclosed and sold at public auction, either through proceedings in equity or by advertisement.
The equity bill averred operating losses sustained by the debtor during the years 1929 to 1932. Losses continued during the receivership, but at a reduced rate. The usual reference to a master for consideration of claims followed, with the result that claims were filed in the total amount - of approximately $1,500,000. A final hearing was set for June 6, 1935, and it was then the reasonable expectation of all parties m interest that a sale of assets would be ordered and the receivership terminated.
On June 5, 1935, Carfnack, son of a former editor of the debtor’s papers, acquired from the Leas, then its owners, all of the debtor’s common stock. He immediately had himself elected president, and instituted the debtor proceedings here involved under section 77B. His first reorganization plan being objected to by the various classes of creditors, a second and a third plan of reorganization with modifications thereof followed. All were vigorously opposed by each interest concerned save for approval by a relatively small number of unsecured creditors. Not any of the bondholders gave assent to the plans proposed, and about 50 per cent, of the unsecured creditors have affirmatively opposed all reorganization plans.
Section 77B provides for a scheme of corporate reorganization similar in many of its aspects to that provided for the reorganization of railroads engaged in interstate commerce by section 77 (11 U.S.C.A. § .205), discussed and held constitutionally valid in general scope and application in Continental Illinois Nat. Bank & Trust Co. v. Chicago, Rock Island & Pacific Railway Co., 294 U.S. 648, 55 S.Ct. 595, 79 L.Ed. 1110. It provides that .upon the filing of a petition for reorganization the court shall enter an order approving its filing if satisfied that the petition complies with the section and has been filed in good faith. The plan of reorganization shall- include provisions modifying or altering the rights of creditors generally, or any class of them, either through the issuance of new securities or otherwise. Subsection (e), of section 77B, 11 U.S.C.A. § 207 (c), in so far as pertinent, is as follows:
“A plan of reorganization shall not be confirmed until it has been accepted in writing, * * * and such acceptance shall have been filed in the proceeding by or on behalf of creditors holding two thirds in amount of the claims of each class whose claims have been allowed and would be affected by the plan: * * * Provided, however, That such acceptance shall not be requisite to the confirmation of the plan by any creditor or class of creditors (a) whose claims are not affected by the plan, or (b) if the plan makes provision for the payment of their claims in cash in full, or (c) if provision is made in the plan for the protection of the interests, claims, or liens of such creditor or class of creditors in the manner provided, in subdivision (b), clause (5), of this section.”
In so far as the reorganization permitted by section 77B requires approval by two-thirds of the creditors of each class and in so far as such approval is not requisite to confirmation from creditors whose claims are not affected or for the payment of which cash is provided, 77B follows substantially the provisions of section 77. It departs from that section in clause (c) of the proviso, which makes approval of creditors unnecessary “if provision is made in the plan for the protection of the interests, claims, or liens of such creditor or class of creditors in the manner provided in subdivision (b), clause (5), of this section.” 11 U.S.C.A. § 207 (e) (1) (c).
It therefore becomes necessary to consider subsection (b), clause (5), 11 U.S.C.A. § 207 (b) (5), which provides that the plan of reorganization “shall provide in respect of each class of creditors of which less than two thirds in amount shall accept such plan (unless the claims of such class of creditors will not be affected by the plan, or the plan makes provision for the payment of their claims in cash in full), provide adequate protection for the realization by them of the value of their interests, claims, or liens, if the property affected by such interests, claims, or liens is dealt with by the plan, either as provided in the plan (a) by the transfer or sale of such property subject to such interests, claims, or liens, or by the retention of such property by the debtor subject to such interests, claims, or liens, or (b) by a sale free of such interests, claims, or liens at not less than a fair upset price and the transfer of such interests, claims, or liens to the proceeds of such sale; or (c) by appraisal and payment either in cash of the value either of such interests, claims, or liens, or, at the objecting creditors’ election, of the securities allotted to such interests, claims, or liens under the plan, if any shall be so allotted; or (d) by such method as will in the opinion of the judge, under and consistent with the circumstances of the particular case, equitably and fairly provide such protection.”
It will be observed that section 77B, unlike section 77, furnishes a method by which a reorganization plan may be put into effect in the event that the debtor is unable to secure consent to its plan of two-thirds of each class of creditors to be affected thereby, not only without their approval, but, by necessary implication, despite their opposition. The plan may provide under subsection (b) (S) for the sale of the property subject to lien, for its sale free of liens and the transfer of the liens to the proceeds, or for the method recited in clauses (c) and (d). With the first two of the methods incorporated in the subsection, we are not concerned, because - the debtor does not desire to have the property sold either free from or subject to liens. It wishes to secure possession of the property and to resume its operation. We are concerned, therefore, only with the methods provided by which the debtor may regain its property without consent of creditors, have it appraised, and then relieve itself of obligation by paying each of them in cash, either (1) of the value of their interests, claims, or liens; or (2) at the creditors’ election (of the value) of the securities allotted to such interests, claims, or liens, if any shall be so allotted; or (3) by such method as will in the opinion of the judge equitably and fairly provide such protection.
The present debtor’s several plans of reorganization, particularly the third, arc in recognition of the futility under existing circumstances of securing the consent of two-thirds of its creditors of each class. It proceeds upon the assumption that such consent is not necessary by framing its reorganization plans under the alternative method provided by subsection (b) (5). We assume it to be unnecessary to give detailed consideration to the first or second plan, for, faced with a contention that neither is feasible, and that each would invade vested constitutional rights, it presented its third plan and modifications thereof, and we may assume that this represents up to the time of the decree its ultimate effort to repel attack upon the feasibility of reorganization, and upon asserted invalidity in the application of the statute.
We confess our inability to understand the debtor’s proposed reorganization plan in all of its phases, even after diligent study, effort to separate argument from concrete proposals, and an earnest attempt to reconcile apparently conflicting clauses. This much, however, seems reasonably clear: The debtor desires to have all the property which for two years has been in the possession of the equity receiver, including unmortgaged property, returned to it, subject to such liens as the court shall determine. It proposes that the bondholders shall have their securities scaled down to 80 per cent, of their face value, and that the court shall fix a reasonable rate of interest in place of the agreed interest. Nonassenting bondholders are to have the value of their securities fixed by the court, and to have a lien on the mortgaged property for such value, though it is also proposed to pay non-assenting' bondholders such ascertained value in cash.. The debtor proposes to pay for the unmortgaged property in the hands of the receiver the sum of $40,000 in cash at a time to be fixed by the court. For the further purpose of protecting bondholders, the debtor proposes to deposit $10,-000 to pay interest in advance upon the bonds for a three months’ period, but nothing is provided in the plan with respect to the defaulted interest upon the bonds during the two years that the debt- or’s properties have been in the hands of the receiver. Then follow provisions for a bond issue and for class A and class B preferred stock, out of the proceeds of which present unsecured creditors and preferred stockhdders are to be compensated. We make no effort to state them, for they are wholly incomprehensible. The court is also asked to reascertain the present holders of the debtor s mortgage bonds, and the amount due each bondholder although a judicial determination as to these matters has already been had m the equity proceedings by a master, with his report presumably confirmed by the court without objection thereto by the debtor, though a party to the receivership proceedings. From the argument, interwoven with the proposals of the submitted plan, it appears that the debtor is informed that 1 , .. . ,, ,, . some of the present bondholders have paid , . , j . , A . for their bonds an amount less than their , . , ., . , . „ face value, and it appears, mferentially . , . A' ’. at least, that the debtor desires the court , „ , ^ , i, ,, , to fix the amount due bondholders who , r . ., , have paid for their holdings since the be- ■ . , ?. . ginmng of the receivership an amount f , , 1 .1 •. less than their face value,- the amount ., , ^ , , so paid, and then have such amount scaled j ! on ^ „ ur down to 80 cents upon the dollar. We .,,, ^ . . are pointed to-no provision of the stat-t , • 1 ^ , . . ute which permits this to be done, and . , . . . - £ -1 , ,. , ’ mdependent inquiry fails to disclose any. 1 ^ J J
The reorganization plan is opposed on the ground that it is not presented in good faith, and that any scaling down of secured indebtedness or of agreed interest or denial of the right of lienholders to have the mortgaged property sold at public sale in accordance with the terms of the trust deed, is taking the property of the bondholders without due process in violation of the Fifth Amendment to the Constitution of the United States. While the court found the plan to have been presented in good faith, it is urged that the court erroneously applied the law; that good faith is not a question of honest motive or intention, but is to be determined by the feasibility of the plan and a reasonable expectation that it will be successful, in reliance upon Manati Sugar Company v. Mock et al., 75 F.(2d) 284 (C.C.A.2), and In re 235 West 46th Street Company, Inc., 74 F.(2d) 700 (C.C.A.2). The District Judge rejected the contention as to absence of good faith, but declared subsection (b) (5), in so far as it permits adjustment of liens without the consent of creditors, Constitutionally invalid, and dismissed the petition,
We have first t0 consider whether the tion of the debtor,s d faith in submitti its proposed plan of organization is j before this court the ma¡n L This involves a con_ sideration as t0 whether the decision be_ low that question involves ^ issue of Iaw izable n al under sec_ üon 24b_ It ig dear from tbe court>s memoranda that in decidi the issue of d faith it was gu¡ded mainl b a con_ sideration of the honesty of purpose on ^ of the debtor in submitting its ^ Section 77B does not undertake t0 define d faitbL We think it clea bowever5 in agreement with the Second drcuit that something more than sincerity , . . • , j j intention was intended. The purpose f ...... ... A f, , of the statute is to relieve distressed debt- ,- , . . < ., or corporations and to provide the me- , . ¿ , chames for reorganization where reason- ,, , .. , ,. , , , able expectation of continued useful ex- . . 1.^-1 . •. • , rr,, . istence may be fairly entertained. This , . J . . , being so, something more must be demon- . ® , (. ,, , , . 1. strated by the debtor than mere honesty r, x TJ. , ,, or sincerity of purpose. If not, then the . . ., way is open to the exploitation of every - . r . . -. , J involved corporation by visionaries whose , ...... - ,- illusory and optimistic imaginations out- . 1 . , .a , ., . run their business judgments, and the 111- . , r , J... . ’ ... . , terest of every legitimate creditor is at the mercy of debtors whose sole hope of financial salvation is an abiding faith in miracles. If we are right in this, there was erroneous application of the law in the finding of good faith, and the decree dismissing the petition should upon familiar principles governing appeals in equity be affirmed if right, however erroneous may be any given conclusion of law.
It appears from the record that the total assets of the debtor upon fair appraisal are worth less than $300,000. The bonded indebtedness exceeds $900,000, and the unsecured indebtedness is more than $300,000. To this must now be added the cost and expenses of the receivership. Moreover, the receiver has been operating at a loss, and the debtor concedes that it also will for a time operate at a loss; its most optimistic undertaking being, if the property is restored to it, to reduce current losses 25 per cent. When these figures are considered together with the vagueness of detail in the proposed plan, the doubt that exists as to whether under section 77B there may now be a reopening of the adjudication of the claims against the debtor in the equity proceeding, it seems clear to us that the proposed plan is not a workable plan, offers no reasonable prospect for successful rehabilitation of the debtor, and is in consequence not, in the sense the phrase is used in the section, presented in good faith.
Having concluded that the plan fails to meet the statutory test, it may appear that discussion should end here with mandate for affirmance of the decree, and that upon familiar principles no holding as to constitutionality of the assailed subsection is required. As was said by the Supreme Court in Howat v. Kansas, 258 U.S. 181, 184, 42 S.Ct. 277, 279, 66 L.Ed. 550, “Obviously we should not pass upon the constitutional validity of an act * * * unless the case before us requires it,” and in Euclid v. Ambler Realty Co., 272 U.S. 365, 397, 47 S.Ct. 114, 121, 71 L.Ed. 303, 54 A.L.R. 1016, “In the realm of constitutional law, especially, this court has perceived the embarrassment which is likely to result from an attempt to formulate rules or decide questions beyond the necessities of the immediate issue.” With profound deference to the canons of self-restraint to which courts subordinate their high power to inquire into the constitutional validity of acts of Congress, we have carefully explored the possibility of avoiding the constitutional question here presented. We are confronted with difficulty.
Faced with attack upon the feasibility of its plan of reorganization, the debt- or has repeatedly presented alternatives and modifications. This is its right, not only by virtue of the liberal spirit of the statute, but by the express language of subsection (f) (7) of section 77B (11 U.S.C.A. § 207 (f) (7), which provides that before or after a plan is confirmed changes -and modifications may be proposed therein by any party in interest. The debtor, having finally received approval of the court upon the good faith of its latest plan, proceeded no further in its efforts to comply with the statutory requirement in that respect. Were we now to rest - decision solely upon lack of good faith, it would seem appropriate to permit further proposals, for the debt- or, having been misled by the court, should not be precluded from further effort to meet statutory requirements. Moreover, we see no legal impediment to submission by the debtor, or at least by a group of friendly creditors, of an entirely new plan of reorganization not heretofore considered and adjudicated. In either event the constitutional question would remain open for ultimate decision upon perhaps no better presentation than at present, and the submission of amendments to more fully demonstrate good faith, purely academic and fruitless. In the meanwhile the property of the debtor and the security of the lienholders will be further depleted by operating losses of the receiver. We see no escape therefore from present decision upon the validity of subsection (b) (5).
The constitutionality of section 77B in its general scope and application is not here assailed, and, in view of the decision in Continental Illinois Nat. Bank & Trust Co. v. Chicago, Rock Island & Pac. Railway, supra, is perhaps not open to successful assault. That case, however, goes no farther in its consideration of the due process clause of the Fifth- Amendment than to hold that statutory provisions permitting delay in the enforcement of contracts affect only the remedy, and deals with a statute which does not permit adjustments of liens without lienholders’ consent. Such delay in the application of remedies impairs no vested right, and this was also the rationale of the decision in Home Building & Loan Association v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413, 89 A.L.R. 1481, in consideration of the due process clause of the Fourteenth Amendment. We are here concerned only with the validity of a clause which provides for adjustment of debts without the consent of creditors. It has long been settled that provisions in bankruptcy statutes authorizing compositions have never been held to invalidate them. This is because a composition is a matter of agreement between the bankrupt and his creditors as a class, with the will of the majority imposed upon the minority. In re Lane (D.C.) 125 F. 772, 773; Cumberland Glass Mfg. Co. v. DeWitt, 237 U.S. 447, 452, 35 S.Ct. 636, 59 L.Ed. 1042.
We confine ourselves to the provisions of subsection (b) (5), which outline a method for adjustment of claims of nonassenting creditors, and inquire as to their validity in the light of the due process clause. Upon this issue we view' the decision of the Supreme Court in Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 55 S.Ct. 854, 79 L.Ed. 1593, 97 A.L.R. 1106, controlling. Here, under Tennessee law, as there under Kentucky law, the lien holders had the .right under their contract to retain the lien until the indebtedness secured was paid, the right to realize upon the security by a judicial public sale, the right to determine when such sale should be held, subject' only to the discretion of the court, the right to protect their interest in the property by bidding at such sale, the right to have the mortgaged property devoted primarily to the satisfaction of the debt; and the right to control the property meanwhile during the period of default, subject only to the discretion of the court, and to have the rents and profits during such period applied to the satisfaction of the debt. These rights are substantive property rights, and any invasion of them under the authority of the present statute is as clearly violative of the due process clause of the Fifth Amendment as it was in the Radford Case. We have no occasion to renew our excursion into the history of bankruptcy legislation or to again undertake that realistic approach to the problem that we ventured upon in the Rad-ford Case when ito was considered by us (74 F.(2d) 576). That manner of approach was rejected by the Supreme Court as an aid to solution, and so must we now reject it when it is again urged upon us.
We hold subsection (b) (5) of section 77B (11 U.S.C.A. § 207 (b) (5) of the Bankruptcy Act unconstitutional and invalid in the respects indicated. Stripped of invalidity, the section is still an operable statute, and as to validity in its general scope and application there is no occasion for comment other than has been indicated.
The decree below is affirmed.
ALLEN, Circuit Judge (concurring).
I concur in the conclusion and in that part of the decision which relates to the unconstitutionality of the statute. The decision in Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 55 S.Ct. 854, 79 L.Ed. 1593, 97 A.L.R. 1106, compels this result. I dissent, however, from that part of. the opinion which defines “good faith” as requiring’ feasibility of the plan proposed. Congress, in enacting the statute, required simply that the District Judge should be satisfied of “good faith.” In so doing, it doubtless bore in mind the fact that in innumerable cases covering every kind of legal situation, the courts of this country, from the highest to the lowest, have defined good faith as meaning honesty of purpose. It is an unfortunate circumstance that integrity and business acumen are not always united. In this statute the Congress required integrity, and the District Judge correctly found that good faith was shown in the submission of this plan.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "financial institution". What subcategory of business best describes this litigant?
A. bank
B. insurance
C. savings and loan
D. credit union
E. other pension fund
F. other financial institution or investment company
G. unclear
Answer:
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songer_respond1_1_4
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I
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "manufacturing". Your task is to determine what subcategory of business best describes this litigant.
The TILLOTSON MANUFACTURING COMPANY, Plaintiff-Appellant, v. TEXTRON, INC., HOMELITE, a Division of Textron, Inc., Defendant-Appellee. The TILLOTSON MANUFACTURING COMPANY, Plaintiff-Appellee, v. TEXTRON, INC., HOMELITE, a Division of Textron, Inc., Defendant-Appellant.
Nos. 15439, 15440.
United States Court of Appeals Sixth Circuit.
Nov. 6, 1964.
Clarence B. Zewadski, Detroit, Mich., Harry O. Ernsberger, Toledo, Ohio, Whittemore, Hulbert & Belknap, Detroit, Mich., Henry W. Seney, Wilson W. Snyder, Fuller, Seney, Henry & Hodge, Toledo, Ohio, on brief, for Tillotson Mfg. Co.
W. Brown Morton, Jr., New York City, Carl F. Schaffer, Owen & Owen, Toledo, Ohio, on brief; Robert McKay, Charles J. Brown, Pennie, Edmonds, Morton, Taylor & Adams, New York City, of counsel, for Textron.
Before WEICK, Chief Judge, and O’SULLIVAN and PHILLIPS, Circuit Judges.
WEICK, Chief Judge.
These appeals arise out of patent infringement actions between the same parties, involving two patents for improvements of diaphragm type carburetors of different design and construction. They were argued together.
The District Court referred both actions to a Special Master who heard the evidence, considered them separately, wrote opinions and made findings of fact and conclusions of law in each case. These findings of fact and conclusions of law were approved and confirmed by the District Court.
In Appeal No. 15,439, the District Court held that Claims 1 and 2 of Phillips Patent No. 2,733,902 were invalid and not infringed by the accused carburetors of defendant. Plaintiff appealed only from the judgment declaring the patent invalid.
In Appeal No. 15,440, the District Court held that Claims 4 to 7, 9 to 12: and 14 to 17 of Phillips Patent No. 2,-841,372 were valid and infringed. Defendant appealed.
Phillips, the inventor of both patented carburetors, assigned the patents to the plaintiff.
APPEAL No. 15,439
PHILLIPS PATENT 2,733,902
Diaphragm carburetors were developed to permit the operation of small two-cycle combustion engines at extreme angles from vertical or inverted positions without leakage of the fuel. This could not be accomplished with the float type carburetor. The development extended over a period of many years. Phillips was not the first to design such a carburetor although he unquestionably contributed significant engineering advances in the field. The carburetors were used primarily for the operation of chain saws although they could be used to power lawn mowers and boats.
Carburetors of the general type disclosed in Claims 1 and 2 of the patent were not new. These claims define an improvement, namely, the combination of valve means (shown in the specification as a mechanical check'valve) in the main fuel orifice of the carburetor to prevent or interrupt, when the engine is idling, the back flow of air from the mixing passage of the carburetor through the main fuel orifice into the idling chamber. This flow of air is called back-bleeding.
The problem of back-bleeding or reverse flowing of air does not arise when the engine is operating at high speed with the throttle valve open. It occurs when the throttle valve is closed and the engine is idling and supplied with fuel through an idling orifice which is separated from and located some distance away from the main fuel orifice. The air pressure at the main fuel orifice is greater than at the idling orifice and the air flows back from the mixing passage through the main fuel orifice into passage ways leading to the idling orifice. This mixes too much air with the idling fuel making the mixture so lean that the engine will stall. To stop or interrupt this reverse flow of air Phillips provides valve means. The patent drawing (Fig. 4) discloses a ball check valve located in the main fuel orifice.
When the engine is operating with the throttle open, fuel is sucked from the fuel chamber through the main fuel nozzle. This suction lifts the ball valve off its seat and permits the free flow of fuel through the main fuel nozzle into the mixing passage. When the throttle is closed and the engine is idling, there is a suction in the reverse direction through the main fuel nozzle into the fuel chamber. The ball cheek valve is sucked onto its seat thus preventing the back flow of air into the fuel chamber.
Phillips’ application for patent had “rough going” in the Patent Office. In the first action, the Examiner cited the following references against it:
Wirth et al 2,345,168 (1944)
Wirth 2,445,097 (1948)
Brunner 2,568,987 (1951)
Sloane 2,569,782 (1951)
Carlson et al 2,339,320 (1944)
The Examiner rejected all the claims of the patent as unpatentable over Wirth et al “which shows the diaphragm actuated fuel inlet valve for the chamber 11, the air chamber 75, and the main and idling fuel systems.” The Examiner was of the view that the arrangement of Wirth for controlling the inlet valve is the full equivalent of Phillips’ arrangement and it “teaches the use of a check valve in the idling system to prevent back flow there-through.” He noted that Brunner and Sloane also teach the same.
Phillips filed an amendment. The Examiner again rejected all of his claims as unpatentable combinations citing as additional references:
Rubatto (Italy) 311,708 (1933)
Gistucci et al 2,156,115 (1939)
Clesse (France) 985,460 (1951)
The Examiner thought that Gistucci showed a fuel regulator structure similar to Phillips’ while Rubatto showed the main and idling fuel system together with a throttle check valve for closing the main discharge nozzle while the idling parts are discharging. Gistucci et al provided a spring that opened the fuel inlet valve that is biased to closed position by another spring. The Examiner stated it would not be invention to add the fuel systems of Rubatto to the regulator of Gistucci et al. He was of the opinion that the lever and the diaphragm arrangement of Gistucci et al was the full equivalent of Phillips. In view of the teachings of Wirth et al, the combination of Rubatto and Gistucci et al was considered obvious to one skilled in the art.
Clesse taught the use of a spring acting on a lever and diaphragm for controlling a fuel inlet valve biased to open position in a carburetor.
Phillips filed a second amendment and the Examiner for the third time rejected all of the claims.
A third amendment was filed which finally resulted in an allowance of six claims.
The Special Master considered references which were not cited by the Examiner, namely, Braeke 2,680,605 and the McCulloch 3-25 chain saw.
BRACKE PRIOR ART PATENT 2,680,605
The application for the Braeke patent was filed on October 20, 1950 and it is undisputed that the patent is a valid reference. The Braeke application for patent was pending in the Patent Office at the same time of Phillips’ application which resulted in ’902. No interference proceeding was instituted. The Patent Examiner apparently did not know of the Braeke patent as he most certainly would have cited it as a reference.
Braeke is similar in many respects to Phillips ’902 as defined in Claims 1 and 2. Braeke asserts that his carburetor operates in all positions and that one of its objects was to provide new and improved means for preventing back-bleeding. The Special Master found that Braeke has the same general arrangement of parts as specified in these claims and employs a mechanical check valve to prevent back-bleeding which is a full equivalent of the check valve used by Phillips in his main fuel orifice. He compared the disclosure in Braeke with Claim 1 of Phillips and with one exception found that they both provided for substantially the same elements. The exception was that in Phillips the fuel inlet valve operates to close the supply duct against pressure of the fuel while in Braeke the fuel valve operates in the direction of fuel to close the duct. He stated that both types of valves were old, well known in the prior art and are considered as equivalents. Mr. Phillips, in his testimony, admitted that the use of a needle valve with the point of the needle opposed to the delivery of fuel is conventional. Valves moving against pressure to close an inlet were shown in Armstrong Patent 2,724,584, Conover 2,-713,854, Ensign 2,653,228 and Phillips earlier Patent 2,387,676. Claim 2 of ’902 provided for a lever pivotally supported in the chamber and in constant engagement with the diaphragm. The use of levers of different types to transmit force is old. A pivoted lever was shown in Armstrong, Ensign above-mentioned and Ensign Reissue 22,151. None of these references were cited by the Patent Office.
Braeke used a spring biased stem connected with the valve which provided the force of a lever although it was not pivoted. Nor do we think that patentable invention was shown by Phillips locating his inlet valve duct at the side of the structure instead of in the center of the diaphragm as provided by Braeke.
The Special Master was of the view that Braeke anticipated Phillips. In our judgment, Phillips was obvious in view of Bracke to a person skilled in the art. There is no invention.
Tillotson claims that the Special Master and District Court erred in holding that the check valve to prevent back-bleeding was the crux of Phillips’ invention. We find no error in this conclusion. In our judgment, the device to prevent back-bleeding was the principal part of the invention without which it would never have been successful.
Tillotson claims that Bracke was a paper patent and that carburetors embodying its features were never manufactured and sold. This contention is irrelevant on the question whether its disclosures constituted anticipation. Coats Loaders & Stackers, Inc. v. Henderson, 233 F.2d 915 (CA6, 1956). Such a patent does not indicate lack of invention. Edward Valves, Inc. v. Cameron Iron Works, Inc., 286 F.2d 933 (CA5, 1961). Failure to use a patent does not affect its validity. Special Equipment Co. v. Coe, 324 U.S. 370, 65 S.Ct. 741, 89 L.Ed. 1006 (1945).
McCulloch prior art CHAIN SAW
70,777 of McCulloch chain saws, equipped with his carburetors, were sold prior to May 1, 1952. It was conceded that the McCulloch carburetor was prior art.
The Special Master compared Phillips’ construction with McCulloch and found that many similarities existed in the elements of the two carburetors. Tillotson contended that the McCulloch check valve was introduced to prevent dribbling of fuel, whereas Phillips was to prevent back-bleeding of air.
Demonstrations were conducted in Court which revealed that the McCulloch check valve did in fact interrupt the flow of air through the main fuel orifice from the mixing passage into the idling passage when the idling orifice was delivering fuel into the mixing passage.
It was not material what purpose motivated McCulloch in using the check valve so long as it operated as it did to prevent back-bleeding.
McCulloch had a hook instead of a lever which engaged the fuel control valve. Bracke used a stem. We have shown, in considering Bracke, that the use of a lever was well known in the art.
McCulloch had no spring engaging the hook in a direction to close the fuel valve as provided in Phillips. It certainly does not constitute invention to install a spring which was also known in the art and is shown in Ensign, Armstrong and Bracke patents.
The Special Master found that in the McCulloch carburetor the elements were so arranged that the ball was held in its seat by forces exerted by the resilience of the diaphragm calibrated with relation to the length of the hook and the hydrostatic pressure of the fuel on the diaphragm. The spring used by Phillips was not necessary in McCulloch.
With the prior art cited by the Patent Examiner against the Phillips application for patent, it barely passed muster in the Patent Office.
If the Examiner had known of Bracke and McCulloch, it is doubtful that the Patent would have been issued.
The presumption of validity which attends the issuance of a patent is weakened where relevant prior art was not considered by the Patent Office. Kennatrack Corp. v. Stanley Works, 314 F.2d 164 (CA7, 1963); Aluminum Company of America v. Sperry Products, Inc., 285 F.2d 911 (CA6, 1960); Gibson-Stewart Co. v. Wm. Bros. Boiler & Mfg. Co., 264 F.2d 776 (CA6, 1959).
We see no invention in Phillips ’902 over the disclosures in McCulloch.
We find no basis for overturning the findings of fact adopted by the Special Master, which were approved and confirmed by the District Court.
INFRINGEMENT
The accused carburetors did not use a mechanical valve in the main fuel orifice to interrupt the flow of air, but provide a capillary seal that was covered by Phillips Patent ’372 that we hold is valid and infringed in Appeal No. 15,440.
Textron claims that its capillary fuel carburetors did not infringe Phillips ’902 patent. Tillotson, the owner of Phillips ’902 patent contends that there was infringement.
Claim 2 of Phillips ’902 patent provided in part:
“ * * * Valve means arranged to interrupt air flow through the main orifice from the mixing passage into said channel, when said secondary orifices are delivering fuel into the mixing passage.”
The specification and drawings of ’902 provided mechanical means, namely, a ball check valve in the main fuel orifice. They did not disclose a capillary fuel plug or valve.
Claim 2 must be read in the light of the specification and drawings. It may not be given a construction broader than the teachings of the patent. Cincinnati Milling Machine Co. v. Turchan, 208 F.2d 222 (CA6, 1953); Blanc v. Curtis, 119 F.2d 395 (CA6, 1941). In view of the crowded art, the patent must be limited to the precise structure disclosed and claimed. Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1, 67 S.Ct. 6, 91 L.Ed. 3 (1946); Kennatrack Corp. v. Stanley Works, supra. Adopting this construction, valve means in Claim 2 included only mechanical valves.
The capillary seal concept is not an equivalent of the valve means provided for in Phillips ’902 patent, but is a new element. The accused carburetors did not infringe ’902 patent.
MISMARKING OF CARBURETORS
Tillotson marked all of the carburetors which it manufactured and sold “Patent No. 2,733,902,” whether the valve means was mechanical or capillary.
The District Court held that there was a mismarking insofar as the capillary valve carburetors were concerned, but that it was unintentional. An injunction was issued restraining Tillotson from so marking its capillary valve carburetors in the future. We think this was proper.
APPEAL No. 15,440
PHILLIPS PATENT No. 2,841,372
This patent is related to a diaphragm carburetor adaptable for internal combustion engines of the two-cycle type used to furnish power for chain saws, lawnmowers, small boats and other similar contrivances where the engine is sometimes tilted to extreme angles. It will operate in all positions and at all speeds.
The basic concept of this carburetor was disclosed in ’902 where a ball check valve or other mechanical means was provided to eliminate back-bleeding of air from the mixing passage into the fuel chamber when the engine idled or was running slowly. This so-called back-bleeding causes the engine to run lean or to stall.
’372 introduced for the first time a significant improvement over ’902 by rearranging and reconstructing the parts of the carburetor so that capillary action and surface tension of the fuel in the passages were utilized to establish an effective liquid seal which operated as a check valve and prevented the back-bleeding of air from the mixing passage into the fuel chamber. This eliminated the necessity of a ball check valve.
Appellant’s statement as to the phenomena involved appears in part in footnote .
The capillary seal concept had many advantages over the ball type check valve. There was no wear or need for replacement. There was no difficulty caused by dirt getting under the ball and holding it from its seat. The need for a conventional nozzle or outlet extending into the venturi, which was required with a ball type valve, was eliminated.
This was a new carburetor. There was nothing like it in the prior art. The invention was accompanied by commercial success. A total of 1,899,352 of the capillary seal type carburetors had been sold up to the time the present patent litigation was commenced.
The claim of appellant was not that ’372 carburetor lacked invention, novelty or utility. Rather, it contended that “the essence of the invention is recited in a vague and confusing passage setting forth a distance in terms of a force in a manner which is unintelligible without resort to explanations not embodied in the specification and beyond the knowledge of those skilled in the art at the time the application was filed,” that the claims call for a certain desirable result without recitation of sufficient structure to produce the result; that the diaphragm cannot be located except by independent experiments and that the distance factor stated in the claims was irrelevant.
The alleged vague and confusing passage of which appellant complains appears in italics in Claim 6 of the patent which is a representative claim and is set forth at length in footnote
Appellant relies on 35 U.S.C. § 112 (1952)
There is nothing vague or confusing about this claim to a person skilled in the carburetor art. It must be interpreted in the light of the specification and drawings. The test is whether the disclosures make the invention clear to a mechanic skilled in the art so that he could construct the carburetor and use it. Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211, 61 S.Ct. 235, 85 L.Ed. 132 (1940).
Whether the patent properly describes the invention so as to enable any person skilled in the art to make and use it must be determined by consideration of the specification, drawings, claims and the other evidence in the case.
The Special Master appointed by the Court heard the evidence. It consisted of oral testimony, written documents and demonstrations of physical models. Phillips, the inventor, who was a mechanical engineer, testified in behalf of plaintiff. Kenneth Charles Schneider, who was also an engineer, testified for the defendant. Mr. Schneider was Vice President of Brown Engine Products, Inc. This company made the accused carburetors and sold them to the defendant.
The Special Master, in his decision, had this to say with respect to defendant’s evidence:
“Defendant has not offered any significant evidence that a person skilled in the carburetor art could not, from the data given in the patent, construct a carburetor having the seal strength greater than the suction required to aspirate fuel out of the idling orifice, nor that he could not construct a carburetor from this data having a seal (32) strength sufficient to support a column of water of approximately 1" in height.
“Defendant failed to adduce evidence or testimony that with the information given in the patent it would be impossible to make a carburetor wherein the capillary effect of the fuel would not maintain the fuel in the passage against a pressure differential equivalent to that pressure required to support a column of water about 1" in height.”
In his findings of fact Nos. 39 to 54, the Special Master considered in great detail the specification, drawings and the evidence. He found that the design, dimensions and proportions of the fuel passages and the location of the diaphragm with reference to the fuel delivery orifice are proportioned so that a capillary plug of liquid is rendered available as a seal to prevent back-bleeding; that the patent illustrates in the drawings and the specification describes a construction whereby the seal is obtained; that the patent teaches the proportioning of the constructional elements and the positioning of the fuel discharge system and that the patent adequately teaches one skilled in the carburetor art how to make a carburetor embodying the features of the invention.
These findings of fact of the Special Master, adopted by the District Judge, are entitled to great weight and may not be disturbed unless clearly wrong. Patrol Valve Co. v. Robertshaw-Fulton Controls Co., 210 F.2d 146 (CA6, 1954); Research Products Co., et al. v. Tretolite Co., 106 F.2d 530 (CA9, 1939).
The patent was presumed valid. The burden of proof to establish invalidity was on the party asserting it. 35 U.S.C. § 282 (1952)
The findings of fact of the Special Master, confirmed by the District Judge, are not clearly wrong. We find no basis for holding that the invention was inadequately or improperly described. Aluminum Co. of America v. Sperry Products, Inc., 285 F.2d 911, 915 (CA6, 1960).
We think the claims define a structural limitation and not merely a result. The structural limitation was ascertainable by manometer measurements, which are familiar to a person skilled in the art.
Nor do we believe that the location of the diaphragm in the carburetor requires experimentation of the type condemned by the patent law. A specific example of the carburetor was given in the specification. The fact that some testing may be required in calibrating carburetors for different engines does not render the claims indefinite where adequate guideposts were furnished as here. Minerals Separation Limited v. Hyde, 242 U.S. 261, 37 S.Ct. 82, 61 L.Ed. 286 (1916); Toledo Rex Spray Co. v. California Spray Chemical Co., 268 F. 201 (CA6, 1920). It was not claimed by the appellee that the capillary seal carburetor will work on all engines. It has worked on engines of the type described in the patent.
It is further contended that the distance factor is irrelevant in achieving the object of the invention. The patent specifications provide otherwise. Plaintiff’s expert, Phillips, in his testimony established relevancy. Mr. Phillips testified that the capillary seal may form at any one of three different places in the carburetor, the uppermost being the main fuel orifice. This was the starting point of the measurement. The other places were in the metering passage. The Special Master determined this factual issue adversely to appellant. We see no reason to disturb the finding.
Claims 4 to 7 of the patent are valid. Claims 9 to 12 and 14 to 17 were dependent upon the validity of Claims 4 to 7 and are, therefore, valid.
The findings of the Special Master with respect to infringement are not seriously questioned by appellant. The accused carburetors were of the capillary seal type embodied in Phillips’ patent '372. In its brief filed in Appeal No. 15,439, Textron stated that it “takes issue with that judgment (in Appeal No. 15,440) only on the ground that the capillary seal claims of the ’372 patent are invalid under 35 U.S.C. § 112.” id. p. 29.
The judgment of the District Court is affirmed in each appeal.
. Claim 1 is as follows:
“1. In combination with a charge forming device having a body formed with a mixing passage and a fuel receiving chamber having a single flexible diaphragm defining one wall thereof and a main orifice arranged to deliver liquid fuel from the chamber into the mixing passage and a secondary orifice formed in the wall of the mixing passage, a fuel inlet duct in the body, a fuel inlet control valve having a needle portion extending into the duct and operative to close said duet against fuel pressure in the duct, a fuel well formed in the body, a passage connecting the fuel receiving chamber with the fuel well, means for metering the flow of liquid fuel from said chamber through said passage into the fuel well, a member movably supported in said chamber in constant engagement with the diaphragm, said member having a portion engaging the fuel inlet control valve, a spring engaging said member and normally biasing the member in a direction to close said fuel inlet control valve, said diaphragm being actuated solely by sub-atmospheric pressure in the mixing passage to move the member in a direction to change the position of the fuel inlet control valve to admit fuel through the duct into the fuel receiving chamber, a channel for supplying fuel from the fuel receiving chamber to the secondary orifice, and valve means arranged to interrupt air flow through the main orifice from the mixing passage into said channel when said secondary orifice is delivering fuel into the mixing passage.”
Textron, Inc. is referred to as appellant or Textron. The Tillotson Manufacturing Co. is referred to as appellee.
. “Diaphragm carburetors are devices that mix liquid fuel with air for combustion in the cylinder of an engine. In such carburetors, the liquid fuel is forced into a ‘chamber’ and is sucked from that chamber on demand by aspiration into a ‘mixing passage’ where the necessary mixture of fuel and air is created. There are two routes from the chamber to the mixing passage which the liquid fuel may take. One is the idle fuel passage which alone delivers fuel when the throttle is closed and the engine is idling. The other route is the so-called main fuel ‘metering passage’ which delivers a relatively larger amount of fuel into the mixing passage when the throttle is open and the engine is running at high speed, and as the main fuel metering passage thus delivers fuel so too does the idling fuel passage. A so-called main fuel adjustment needle valve is located in this main fuel metering passage to control the rate of flow therethrough.
“A sufficient quantity of fuel must be maintained in the chamber to meet the demands of either or both of the idling and main fuel metering passages and this is the function of the ‘diaphragm’ which is a circular rubber disc defining the bottom wall of the chamber. This diaphragm is flexible and can ‘breathe’ into or out of the chamber in response to small increases or decreases in the pressure of the fuel in the chamber. By means of spring-biased lever-type linkage, such flexure of the diaphragm operates a ‘fuel control valve,’ usually of the needle type, which controls flow of pressurized fuel from a fuel tank or fuel pump associated with the carburetor. When fuel is aspirated out of the idle or main fuel metering passage to meet the demands of the engine, the diaphragm flexes inwardly to open the fuel control valve and admit sufficient fuel to maintain the desired fuel level in the chamber. When the fuel level is thus restored and the pressure on the diaphragm is brought back to its nominal level, the diaphragm flexes out of the chamber to effect closure of the fuel control valve. Thus, the diaphragm, the spring-biased lever, and the fuel control valve regulate fuel flow into the chamber to maintain a sufficient quantity of fuel for aspiration into the mixing passage.
“During idling, which is when the idling passage alone is delivering fuel into the mixing passage, a problem of so-called ‘back-bleeding’ exists at the main fuel metering passage. At the ‘opening in the mixing passage’ where the metering passage communicates with it, the metering passage is exposed to atmospheric pressure through the air-intake of the carburetor, and in the chamber at the other end of the metering passage it is exposed to suction due to aspiration of fuel out of the idle fuel passage. Since nature abhors a vacuum, the air at atmospheric pressure in the mixing passage tends to force its way down the main fuel metering passage and into the chamber under these idling conditions. This is ‘back-bleeding.’ It is undesirable because it leads to the collection of air in the chamber which eventually may be aspirated through the idle fuel passage and into the engine instead of liquid fuel. That causes the engine to ‘run lean’ or even fail.
“If a diaphragm carburetor is so designed (a) that under idling conditions the diaphragm can flex inwardly to open the fuel control valve in response to suction at the idling passage (69a), and (b) at the same time that suction is not so great as to break the capillary seal in the main fuel metering passage and pull air into the chamber (72a), while (c) the main passage remains open enough to deliver fuel from the reservoir under open-throttle conditions (71a), then that carburetor is an operative embodiment of a so-called ‘capillary seal’ device.” Appellant’s brief, pp. 4-6.
. “6. In combination, a charge forming device for an internal combustion engine including a body formed with a mixing passage, a shallow fuel receiving chamber formed in the body, a flexible diaphragm forming a wall of the chamber, a channel formed in said body having an orifice in the form of an opening in the wall of the mixing passage arranged to deliver liquid fuel from the chamber into the mixing passage under the influence of subatmospheric pressure in the mixing passage, said fuel chamber being unvented, a fuel inlet duct formed in the body, a fuel control valve cooperating with the duet effective upon an increase in pressure in the chamber to close the duct, a lever fulcrumed within the chamber and having portions engaging the fuel inlet valve and the diaphragm, spring means normally biasing said inlet valve toward closed position, a restricted fuel metering passage establishing communication between the fuel chamber and the orifice in the mixing passage, said diaphragm being disposed, relative to said opening in said mixing passage within a maximum distance as determined by the capillary effect of the fuel in said metering passage, said maximum distance being that distance at which the capillary effect of said fuel in said metering passage will maintain said fuel in said passage against a pressure differential equivalent to that pressure required to support a column of water about one inch in height." (Italics ours)
. “Specification.
“The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
“The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.
“An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.”
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)", specifically "manufacturing". What subcategory of business best describes this litigant?
A. auto
B. chemical
C. drug
D. food processing
E. oil refining
F. textile
G. electronic
H. alcohol or tobacco
I. other
J. unclear
Answer:
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songer_stpolicy
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D
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What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the interpretation of state or local law, executive order, administrative regulation, doctrine, or rule of procedure by the court favor the appellant?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
CINCINNATI GAS & ELECTRIC CO., Columbus & Southern Ohio Electric Co., Dayton Power & Light Co., Ohio Edison Co., Ohio Power Co., Shell Oil Co., Austin Powder Co., E. I. du Pont de Nemours & Co., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY and Douglas M. Costle, Administrator of the Environmental Protection Agency, Respondents.
Nos. 76-2090, 77-1367, 76-2232, 77-1361, 76-2241, 77-1357, and 76-2278.
United States Court of Appeals, Sixth Circuit.
Argued Oct. 21, 1977.
Decided June 29, 1978.
See also, 6 Cir., 578 F.2d 666.
Louis E. Tosí, C. Randolph Light, Fuller, Henry, Hodge & Snyder, Toledo, Ohio, Daniel W. Kemp, Cincinnati, Ohio, for Cincinnati Gas & Elec. Co., Shell Oil Co., et al.
James Van Carson, Squire, Sanders & Dempsey, Cleveland, Ohio, for Austin Powder Co.
Carl B. Everett, Legal Dept., E. I. du Pont de Nemours & Co., Wilmington, Del., for E. I. du Pont de Nemours & Co.
Ronald C. Hausmann, E.P.A., Paul M. Kaplow, Dept, of Justice, Washington, D. C., Mary Ann Muirhead, Region V, E.P.A., Chicago., 111., Ned Williams, Director, Ohio E.P.A., Columbus, Ohio, for respondents.
Before PHILLIPS, Chief Judge, and EDWARDS and PECK, Circuit Judges.
EDWARDS, Circuit Judge.
This opinion deals with certain additional issues presented in 23 industry petitions covering 32 major power and industrial companies in Ohio objecting to the United States EPA’s plan for control of SO2 pollution in Ohio. These additional issues concern only point sources of SO2 pollution in Ohio’s rural areas or areas with complex terrain. This opinion should be read as supplementary to the opinion of this court dated February 13,1978, Cleveland Electric Illuminating Co., et al. v. Environmental Protection Agency, et al., 572 F.2d 1150 (6th Cir. 1978).
Our focus herein is upon the following petitioners and the designated facilities belonging to them. These petitioners protest certain features of the United States EPA model (MAXT-24) employed for predicting plant pollution in rural and complex terrain areas:
Nos. 76-2090, 77-1367:
Cincinnati Gas & Electric Co., all facilities (Hamilton & Clermont Counties). Columbus & Southern Ohio Electric Co., all facilities (Athens, Coshocton, Picka-way Counties).
Dayton Power & Light Co., all facilities not covered by opinion dated February 13, 1978 (Adams County).
Ohio Edison Co. (Jefferson County) Sam-mis Plant only.
Ohio Power Co., all facilities (Washington and Morgan Counties).
No. 76-2278:
E. I. du Pont de Nemours & Co., all facilities (Hamilton County).
Nos. 76-2232, 77-1361:
Shell Oil Co., all facilities (Washington County).
Nos. 76-2241, 77-1357:
Austin Powder Co., all facilities (Vinton County).
The MAXT-24 model (Second Maximum 24-Hour Dispersion Model with Terrain Adjustments) is designed for use in predicting SO2 pollution resulting from single sources located in rural areas; Unlike the RAM model employed in urban areas, which we dealt with in Cleveland Electric Illuminating Co., supra, MAXT-24 does not provide estimates of comparative contributions to total SO2 pollution from a number of point sources. The MAXT-24 model treats each point source as an isolated problem, and only general background SO2 pollution data are added into the formula.
In other respects the MAXT-24 model strongly resembles the RAM model. Thus, like RAM, MAXT-24 starts with a solid ascertainable data base, namely, the established design capacity of the power or steam generating plants in question related to the sulfur content of the fuel used by such plants. Emissions data are developed from these factors. Subsequently, stack height, wind, weather, and terrain data are added. Like RAM, MAXT-24 employs a Gaussian plume formula and assumes vertical and horizontal dispersion of the pollution plume. It employs the Pasquill-Gifford stability classifications and coefficients.
Like RAM, the MAXT-24 model was designed by United States EPA largely as a result of industry criticism of the use of rollback modeling. As was true in relation to the RAM results, the results of use of MAXT-24 were generally less strict than those contemplated by the 1972 and 1974 Ohio EPA SO2 regulations.
Indeed, the comments this court made in Cleveland Electric Illuminating Co., supra, in Section 3 of the opinion are largely applicable to EPA’s adoption of MAXT-24 and we cite and rely on said Section 3 in holding that in general (and with one exception noted below) the EPA’s adoption and use of the MAXT-24 model is not arbitrary or capricious and, like the use of the RAM model, must be affirmed by this court.
Despite the discussion above, we are not certain that any of the petitions we deal with in this opinion seriously disputes the general validity of the MAXT-24 model. What these petitioners clearly do contend is that the MAXT-24 model results are badly skewed to their great economic disadvantage by 1) the Class A assumption employed to estimate pollution dispersion in the least stable wind condition, and 2) the failure of EPA to employ the half ground displacement theory in estimating pollution impact on hilly terrain.
I THE CLASS A ASSUMPTION ISSUE
The MAXT-24 model makes use of a set of six coefficients for determining plume dispersal. The classes of coefficients employed were based upon six different weather conditions. The term Class A is employed to describe both the least stable weather condition and the set of assumptions which is based on the most direct and quickest impact of the pollution plume upon ground level with the least prior dispersal.
The six Pasquill-Gifford coefficients employed in MAXT-24 are derived from a Nebraska study made in the 1950’s and are referred to by United States EPA as “time-tested.” What this defense appears to ignore, however, is that petitioners in this instance (contrary to the general attack upon the six coefficients employed in RAM) are not objecting to the use of the coefficients; they are attacking the accuracy of one set of them — the Class A set associated with “gusty winds.” Specifically they claim that the Class A assumption is fallacious in that it assumes a longer period of downward draft than occurs in fact and fails to make allowance for the lateral dispersal which would accompany such a vertical wind at the point of impact.
The lead brief for the utilities presents the case thus:
In all modeling of rural power plants, EPA utilized dispersion coefficients under Class A stability conditions which have no support in data, which have been repudiated by most modelers and which are demonstrated inaccurate by this record. As applied to this rulemaking, this seemingly simple assumption is exceedingly important because, for almost Vs of the power plants in Ohio, it was the determining factor in establishing emission limits.
The meaning of “Class A. ”
Diffusion models can account for thousands of bits of data. Most important are meteorological data of which stability classes are an aspect.
Specifically, stability classes are categorizations of the atmosphere’s ability to disperse plumes. These classes are divided into six categories ranging from extreme dispersion of plumes (Class A) to minimum dispersion (Class F). Under Class A, a plume is assumed to disperse very rapidly to the ground level before there is any substantial dilution. This, in turn, leads to predictions of high ground level concentrations. The fundamental issue, therefore, is whether the Class A assumption describes the manner in which plumes disperse at rural power plants and whether the phenomena it depicts really occur.
Brief of Utility Petitioners at 31-32 (emphasis in original).
Petitioners then detail the results of three separate studies which they claim attack and undermine the validity of the Class A coefficients, and generally urge substitution of Class B coefficients. These studies are the privately financed study by Enviroplan, Inc., a similarly produced study by Smith-Singer Meteorologists, and a strongly critical report resulting from the Specialists’ Conference of February 22-24, 1977, sponsored by United States EPA itself through the Argonne National Laboratory.
To this argument the EPA’s response is as follows:
EPA properly determined that the “Class A” stability factors should continue to be used until new field data proved them incorrect.
Petitioners argue that EPA should have changed the dispersion coefficients used in the rural MAX (CRSTER) model for analyzing ground level concentrations caused by a source in very unstable weather, known as “Class A” conditions. In the remand comment period, the utility petitioners presented various theories that the model did not accurately reflect the way wind patterns in such weather conditions affect dispersion patterns and that therefore the model might be overestimating ground level concentrations for a 3-hour analysis. Petitioners argue that it was arbitrary or capricious for EPA not to accept theories presented in their comments.
EPA recognized in the STSD [Supplemental Technical Support Document] at 55 that there was a growing concern among atmospheric modeling scientists about the issue. EPA determined, however, that until further studies could be done to substantiate the theories, there was no experimental or field data to justify changing the dispersion curves or to determine how the dispersion equations should be changed. And since petitioners did not submit any data, no change could be made in the equations used. Id. EPA Brief at 48-49.
We are, of course, aware that decision-making (particularly in this highly technical area) is the primary responsibility of the agency and not the responsibility of this court. See Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978). As we said in Cleveland Electric Illuminating Co., supra:
Our standard of review of the actions of United States EPA is whether or not the action of the agency is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Clean Air Act Amendments of 1977, Pub.L.No.95-95, § 305(a), 91 Stat. 775 (to be codified as 42 U.S.C. § 7607(d)(9)(A)). Thus, we are required to affirm if there is a rational basis for the agency action and we are not “empowered to substitute [our] judgment for that of the agency.” Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, [91 S.Ct. 814, 28 L.Ed.2d 136] (1971). 572 F.2d at 1161.
On this present record we conclude that United States EPA’s employment of the Class A assumption in determining pollution dispersion under “least stable” wind conditions in rural areas and areas of complex terrain is not a rational decision and is arbitrary and capricious.
As we read EPA’s position on this point, it is that no better solution has been proposed. This answer, however, ignores the Enviroplan and Smith-Singer studies. More importantly, it ignores the conclusions of the experts’ conference convened by Argonne National Laboratory at United States EPA’s own request. The report of that conference suggested “elimination of the A curve and the use of the B curve for both A and B stability categories.” See Report of the Specialists’ Conference on the EPA Modeling Guideline, Feb. 22-24, 1977, Chicago, Illinois, at § 2.7.5: “Vertical Dispersion Estimates.”
By pointing out this proposed solution, we do not mandate its acceptance by United States EPA. Our ultimate action on this score is simply to remand this issue to United States EPA for further study. This might result in the writing of a new record which supplies the now missing support for the use of Class A coefficients for the least stable wind condition in rural counties, or it might result in United States EPA’s adoption of use of the Class B coefficients for the two least stable wind conditions, or it might result in a new record which supports a wholly new solution.
II THE TERRAIN ADJUSTMENT PROBLEM
The original MAXT-24 model assumed that the pollution plume moves downwind in a straight line from a point determined by the height of the smoke stack plus plume rise (“effective stack height”). Under that assumption, if effective stack height is 600 feet and there is a hill 800 feet high downwind, a receptor site located 600 feet up that hill will therefore in theory receive the full impact of the pollutants in the center of the plume. Petitioners’ attack upon this set of assumptions is, we believe, best stated by the Shell Oil Co. brief:
The reference to “the effect of the terrain on the plume” is an easily understood concept. Since the wind which blows the plume toward a hill (terrain) cannot blow through the hill, it must blow up and over the hill. This effect causes all the layers of air above the wind at ground level, and hence the plume itself, to be carried up and over the hill rather than hitting directly into its side. A widely recognized means of accounting for such a situation, and one which EPA has used, is to incorporate mathematical changes in the model which reduce the receptor height by the one-half difference between stack base and receptor elevation and limit the approach of the center line of the plume to ten meters above the receptor.
Shell and its consultant, Enviroplan, recommended this change to U.S. EPA. Moreover, this change was supported in the modeling literature by two other independent experts — Briggs and Egan. Also, another consultant, Environmental Research & Technology, Inc. (“ERT”), recommended the same adjustment in a report submitted to EPA during the comment period for Columbus & Southern Ohio Electric Co. See “A Technical Review of the U.S. EPA Ohio State Implementation Plan for Sulfur Dioxide,” January 1977, prepared for C&SOE. (App. 210-213.) Indeed, this approach is so well recognized that EPA, Region II, approved its use in sustaining a revision of the implementation plan for Puerto Rico. See 40 Fed.Reg. 52410 (1975).
Brief of Shell Oil Co., at 19-20.
As to this argument, the EPA brief contains this comment and admission:
Contrary to petitioners’ claims, EPA utilized available monitoring data wherever possible. As set forth in detail in both the Final and the Supplemental Technical Support Documents, EPA conducted validation studies of the dispersion model used to set emission limitations for isolated, rural power plants. See STSD at 53-55, and the FTSD at 27-34. The validation studies compared model predictions of SO2 ground level concentrations to actual air quality monitor data. These comparisons indicated that for sources located on flat terrain, the correlation between monitor data and predictions was quite good with the model tending to underpredict, but that for power plants located on hilly terrain, the comparisons showed consistent overpredictions.
EPA Brief at 45-46 (footnote omitted). The EPA brief then goes on to assert that certain adjustments have been made in the model “so that it could handle dispersion in hilly terrain more accurately,” and then cited the Supplemental Technical Support Document at page 55. The STSD material referred to follows:
The validation studies which compared model predictions of SO2 ground level concentrations to actual air quality monitor data indicated that in certain situations the model overpredicted and needed modification. The problem usually occurred when air quality monitors were at elevations higher than the top of the stack. To correct this, terrain data used in the model was limited in such a way that terrain features were always assumed to be no higher than the stack height of the source stack in question. This was deemed to be an appropriate adjustment because the validation study showed a high degree of correlation between model predictions and sample readouts from monitors positioned on terrain lower than stack height in elevation. When this assumption was mathematically incorporated into the model, the validation studies showed that the model accurately predicted the ground level concentrations observed by the monitors.
Petitioners proposed a different method for modifying the model to account for complex terrain situations, but the proposal is not based on any validation studies of the CRSTER model. The Agency has no way of determining if the proposal is a better modification to the model than the modification made by the Agency after the validation studies. The Agency, therefore, has determined that the model does not need further modifications because of any information presented by the petitioners.
EPA Brief at 54-55.
While the record does not establish conclusively that this adjustment made by United States EPA in the remand period will prove a satisfactory solution to the problem posed, neither does the record offer evidence to the contrary. We note, of course, that United States EPA has disowned the apparent implication in its brief that it had made validation studies of this latest adjustment for hilly terrain. And, in fact, our holding on this issue should not be read as this court’s rejection of petitioners’ half ground displacement theory in favor of the United States EPA adjustment outlined above. There may well be occasion for the agency to continue to review this issue. All we hold is that on the present record, we cannot find that United States EPA’s present terrain adjustment in MAXT-24 is “arbitrary or capricious.”
For the reasons indicated above, the petitions of Dayton Power & Light Co. (Adams County facilities only), Ohio Power Co. (all facilities), Columbus & Southern Ohio Electric Co. (Coshocton County facility only), and Austin Powder Co. (all facilities) are remanded to the United States EPA for reconsideration of the employment of Class A coefficients in least stable wind conditions in rural counties.
All petitions referred to at the beginning of this opinion are denied to the extent that they attack the MAXT-24 model as to the terrain adjustment feature.
Ill OTHER ISSUES
We also hold that there is no merit to objections based on failure to calibrate the MAXT-24 model (or failure to reject its results because of claims of overprediction as demonstrated by some monitor readings). See Cleveland Electric Illuminating Co., supra, 572 F.2d at. 1163-64, numbered paragraph 7.
Shell contends that its emission limitation should be expressed in terms of pounds S02 per hour rather than pounds S02 per million British Thermal Units. The Shell proposal would require the EPA either to assume that stack gas temperature and exit velocity (the important factors bearing on plume rise and thus ultimately on ground level SO2 concentration) are relatively constant, or alternatively to monitor stack gas temperature and exit velocity. Clearly, EPA considers policing such a system to be an impossible task. EPA’s formula, by contrast, requires only the use of fixed, easily ascertainable date — the plant’s design-rated capacity. We regard EPA’s choice of formula, which minimizes administrative costs while obeying the Clean Air Act’s command to “insure attainment and maintenance” of national ambient air standards, 42 U.S.C. § 1857c-5(a)(2)(B) (1970), to be within the range of the agency’s discretion.
We have considered the other issues raised by Shell and find them to be without merit.
Disputes between petitioners and EPA concerning appropriate SO2 background levels, emission data, or other fact issues will not be decided by this court until completion of the administrative review of such issues which was suggested by this court and agreed upon by the parties.
Based upon what has been said by this court in Cleveland Electric Illuminating Co. v. EPA, supra, and in this opinion, and finding no other material issues, we dismiss the following petitions in toto: Cincinnati Gas & Electric Co., Shell Oil Co.
Final dispositions in the petitions of Columbus & Southern Ohio Electric Co., Ohio Edison Co., and E. I. du Pont de Nemours & Co. will be entered on resolution of the remaining issues therein.
. See Cleveland Electric Illuminating Co., supra, Section 3, 572 F.2d at 1160-64.
. The following summary is drawn from Cleveland Electric Illuminating Co., supra, Appendix A, 572 F.2d at 1165-74:
US EPA 1976-77 Ohio EPA Ohio EPA MAX regs are: 1972 1974 regs for: regs for:
1. less strict than 19 16 of petitioners’ facilities a
stricter than 1 5
ambiguous b
compared with 3 2
2. less strict than 31 27 of Ohio counties modeled entirely with MAX
stricter than 3 6
ambiguous b
compared with 5 6
3. less strict than 38 32 of Ohio counties in which MAX was employed
stricter than 3 6
ambiguous b
compared with 12 15
a Including facilities to the regulation of which petitioners do not object.
b l.e., stricter for some stacks or facilities and less strict for others; or employing different units of measurement, rendering comparison impossible.
The 1972 Ohio EPA plan was submitted to United States EPA on January 30, 1972, but was “withdrawn” by the Governor of Ohio on August 27, 1972. The 1974 Ohio EPA plan was submitted to United States EPA on September 22, 1974, and was withdrawn on July 16, 1975. See Cleveland Electric Illuminating Co., supra, 572 F.2d at 1156.
. This conference was initiated by United States EPA and one of the participants was the Director of EPA Region V, which Region includes Ohio. The conference occurred during the remand period of this litigation, and three months before the finally amended regulations were promulgated. We consider the Conference Report to be properly a part of the appellate record.
. Newly recodified as 42 U.S.C.A. § 7410(a)(2)(B) (1977 Pamphlet).
Question: Did the interpretation of state or local law, executive order, administrative regulation, doctrine, or rule of procedure by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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sc_casesourcestate
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28
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the state or territory of the court whose decision the Supreme Court reviewed.
MINNESOTA v. CLOVER LEAF CREAMERY CO. et al.
No. 79-1171.
Argued November 3, 1980
Decided January 21, 1981
BrenNAN, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, White, Marshall, and Blackmun, JJ., joined. Powell, J., filed an opinion concurring in part and dissenting in part, post, p. 474. Stevens, J., filed a dissenting opinion, post, p. 477. Rehnquist, J., took no part in the consideration or decision of the case.
Kenneth E. Raschke, Jr., Assistant Attorney General of Minnesota, argued the cause for petitioner. With him on the briefs were Warren Spannaus, Attorney General, Richard B. Allyn, Chief Deputy Attorney General, and D. Douglas Blanke, Special Assistant Attorney General.
Leonard J. Keyes argued the cause for respondents. With him on the brief were Douglas L. Skor and Andrea M. Bond.
Harlon L. Dalton argued the cause for the United States as amicus curiae urging reversal. On the brief were Solicitor General McCree, Assistant Attorney General Moorman, Deputy Solicitor General Claiborne, Harriet S. Shapiro, Jacques B. Gelin, and Anne H. Shields.
Stephen J. Snyder filed a brief for the Sierra Club as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed by C. Lee Cook, Jr., John C. Berghoff, Jr., and Stephanie W. Kanwit for the Can Manufacturers Institute et al.; by John M. Cannon for the Mid-America Legal Foundation; and by Michael L. Flanagan for the Minnesota Dairies Federation.
Justice Brennan
delivered the opinion of the Court:
In 1977, the Minnesota Legislature enacted a statute banning the retail sale of milk in plastic nonreturnable, nonrefillable containers, but permitting such sale in other nonreturnable, nonrefillable containers, such as paperboard milk cartons. 1977 Minn. Laws, ch. 268, Minn. Stat. § 116F.21 (1978). Respondents contend that the statute violates the Equal Protection and Commerce Clauses of the Constitution.
I
The purpose of the Minnesota statute is set out as § 1:
“The legislature finds that the use of nonreturnable, nonrefillable containers for the packaging of milk and other milk products presents a solid waste management problem for the state, promotes energy waste, and depletes natural resources. The legislature therefore, in furtherance of the policies stated in Minnesota Statutes, Section 116F.01,[] determines that the use of nonreturnable, nonrefillable containers for packaging milk and other milk products should be discouraged and that the use of returnable and reusable packaging for these products is preferred and should be encouraged.” 1977 Minn. Laws, ch. 268, § 1, codified as Minn. Stat. § 116F.21 (1978).
Section 2 of the Act forbids the retail sale of milk and fluid milk products, other than sour cream, cottage cheese, and yogurt, in nonreturnable, nonrefillable rigid or semirigid containers composed at least 50% of plastic.
The Act was introduced with the support of the state Pollution Control Agency, Department of Natural Resources, Department of Agriculture, Consumer Services Division, and Energy Agency, and debated vigorously in both houses of the state legislature. Proponents of the legislation argued that it would promote resource conservation, ease solid waste disposal problems, and conserve energy. Relying on the results of studies and other information, they stressed the need to stop introduction of the plastic nonreturnable container before it became entrenched in the market. Opponents of the Act, also presenting empirical evidence, argued that the Act would not promote the goals asserted by the proponents, but would merely increase costs of retail milk products and prolong the use of ecologically undesirable paperboard milk cartons.
After the Act was passed, respondents filed suit in Minnesota District Court, seeking to enjoin its enforcement. The court conducted extensive evidentiary hearings into the Act’s probable consequences, and found the evidence “in sharp conflict.” App. A-25. Nevertheless, finding itself “as fact-finder . . . obliged to weigh and evaluate this evidence,” ibid., the court resolved the evidentiary conflicts in favor of respondents, and concluded that the Act “will not succeed in effecting the Legislature’s published policy goals . . . .” Id., at A-21. The court further found that, contrary to the statement of purpose in § 1, the “actual basis” for the Act “was to promote the economic interests of certain segments of the' local dairy and pulpwood industries at the expense of the economic interests of other segments of the dairy industry and the plastics industry.” Id., at A-19. The court therefore declared the Act “null, void, and unenforceable” and enjoined its enforcement, basing the judgment on substantive due process under the Fourteenth Amendment to the United States Constitution and Art. 1, § 7, of the Minnesota Constitution; equal protection under the Fourteenth Amendment; and prohibition of unreasonable burdens on interstate commerce under Art. I, § 8, of the United States Constitution. App. A-23.
The State appealed to the Supreme Court of Minnesota, which affirmed the District Court on the federal equal protection and due process grounds, without reaching the Commerce Clause or state-law issues. 289 N. W. 2d 79 (1979). Unlike the District Court, the State Supreme Court found that the purpose of the Act was “to promote the state in terests of encouraging the reuse and. recycling of materials and reducing the amount and type of material entering the solid waste stream,” and acknowledged the legitimacy of this purpose. Id., at 82. Nevertheless, relying on the District Court’s findings of fact, the full record, and an independent review of documentary sources, the State Supreme Court held that “the evidence conclusively demonstrates that the discrimination against plastic nonrefillables is not rationally related to the Act’s objectives.” Ibid. We granted certiorari, 445 U. S. 949, and now reverse.
II
The parties agree that the standard of review applicable to this case under the Equal Protection Clause is the familiar “rational basis” test. See Vance v. Bradley, 440 U. S. 93, 97 (1979); New Orleans v. Dukes, 427 U. S. 297, 303 (1976). Moreover, they agree that the purposes of the Act cited by the legislature — promoting resource conservation, easing solid waste disposal problems, and conserving energy— are legitimate state purposes. Thus, the controversy in this case centers on the narrow issue whether the legislative classification between plastic and nonplastic nonreturnable milk containers is rationally related to achievement of the statutory purposes.
A
Respondents apparently have not challenged the theoretical connection between a ban on plastic nonreturnables and the purposes articulated by the legislature; instead, they have argued that there is no empirical connection between the two. They produced impressive supporting evidence at trial to prove that the probable consequences of the ban on plastic nonreturnable milk containers will be to deplete natural resources, exacerbate solid waste disposal problems, and waste energy, because consumers unable to purchase milk in plastic containers will turn to paperboard milk cartons, allegedly a more environmentally harmful product.
But' States are not required to convince the courts of the correctness of their legislative judgments. Rather, “those challenging the legislative judgment must convince the court that the legislative facts on which the classification is apparently based could not reasonably be conceived to be true by the governmental decisionmaker.” Vance v. Bradley, 440 U. S., at 111. See also Day-Brite Lighting, Inc. v. Missouri, 342 U. S. 421, 425 (1952); Henderson Co. v. Thompson, 300 U. S. 258, 264-265 (1937).
Although parties challenging legislation under the Equal Protection Clause may introduce evidence supporting their claim that it is irrational, United States v. Carolene Products Co., 304 U. S. 144, 153-154 (1938), they cannot prevail so long as “it is evident from all the considerations presented to [the legislature], and those of which we may take judicial notice, that the question is at least debatable.” Id., at 154. Where there was evidence before the legislature reasonably supporting the classification, litigants may not procure invalidation of the legislation merely by tendering evidence in court that the legislature was mistaken.
The District Court candidly admitted that the evidence was “in sharp conflict,” App. A-25, but resolved the conflict in favor of respondents and struck down the statute. The Supreme Court of Minnesota, however, did not reverse on the basis of this patent violation of the principles governing rationality analysis under the Equal Protection Clause. Rather, the court analyzed the statute afresh under the Equal Protection Clause, and reached the conclusion that the statute is constitutionally invalid. The State contends that in this analysis the court impermissibly substituted its judgment for that of the legislature. We turn now to that argument.
B
The State identifies four reasons why the classification between plastic and nonplastic nonreturnables is rationally related to the articulated statutory purposes. If any one of the four substantiates the State’s claim, we must reverse the Minnesota Supreme Court and sustain the Act.
First, the State argues that elimination of the popular plastic milk jug will encourage the use of environmentally superior containers. There is no serious doubt that the plastic containers consume energy resources and require solid waste disposal, nor that refillable bottles and plastic pouches are environmentally superior. Citing evidence that the plastic jug is the most popular, and the gallon paperboard carton the most cumbersome and least well regarded package in the industry, the State argues that the ban on plastic nonreturnables will buy time during which environmentally preferable alternatives may be further developed and promoted.
As Senator Spear argued during the Senate debate:
“[T]his bill is designed to prevent the beginning of another system of non-returnables that is going to be very, very difficult [to stop] once it begins. It is true that our alternative now is not a returnable system in terms of milk bottles. Hopefully we are eventually going to be able to move to that kind of a system, but we are never going to move to a returnable system so long as we allow another non-returnable system with all the investment and all of the vested interest that that is going to involve to begin.” Transcript of the Full Senate Floor Discussion of H. F. 45, p. 6 (May 20, 1977), reprinted as Plaintiffs’ Exhibit J.
Accord, id., at 1-2 (statement of Sen. Luther).
The Minnesota Supreme Court dismissed this asserted state interest as “speculative and illusory.” 289 N. W. 2d, at 86. The court expressed doubt that the Minnesota Legislature or Pollution Control Agency would take any further steps to promote environmentally sound milk packaging, and stated that there is no evidence that paperboard cartons will cease to be used in Minnesota. Ibid.
We find the State’s approach fully supportable under our precedents. This Court has made clear that a legislature need not “strike at all evils at the same time or in the same way,” Semler v. Oregon State Board of Dental Examiners, 294 U. S. 608, 610 (1935), and that a legislature “may implement [its] program step by step, . . . adopting regulations that only partially ameliorate a perceived evil and deferring complete elimination of the evil to future regulations.” New Orleans v. Dukes, 427 U. S., at 303. See also Katzenbach v. Morgan, 384 U. S. 641, 657 (1966); Williamson v. Lee Optical Co., 348 U. S. 483, 489 (1955); Railway Express Agency, Inc. v. New York, 336 U. S. 106, 110 (1949). The Equal Protection Clause does not deny the State of Minnesota the authority to ban one type of milk container conceded to cause environmental problems, merely because another type, already established in the market, is permitted to continue in use. Whether in fact the Act will promote more environmentally desirable milk packaging is not the question: the Equal Protection Clause is satisfied by our conclusion that the Minnesota Legislature could rationally have decided that its ban on plastic nonreturnable milk jugs might foster greater use of environmentally desirable alternatives.
Second, the State argues that its ban on plastic nonreturnable milk containers will reduce the economic dislocation foreseen from the movement toward greater use of environmentally superior containers. The State notes that plastic nonreturnables have only recently been introduced on a wide scale in Minnesota, and that, at the time the legislature was considering the Act, many Minnesota dairies were preparing to invest large amounts of capital in plastic container production. As Representative Munger, chief sponsor of the bill in the House of Representatives, explained:
“Minnesota’s dairy market is on the verge of making a major change over from essentially a paperboard container system to a system of primarily single use, throwaway plastic bottles. The major dairies in our state have ordered the blow-mold equipment to manufacture in plant the non-returnable plastic milk bottle. Members of the House, I feel now is an ideal time for this legislation when only one dairy in our state is firmly established in manufacturing and marketing the throwaway plastic milk bottle.” Transcript of the Debate of the Minnesota House of Representatives on H. F. 45, p. 2 (Mar. 10, 1977), reprinted as Plaintiffs’ Exhibit J.
See also Transcript of the Full Senate Floor Discussion on H. F. 45, p. 6 (May 20, 1977), reprinted as Plaintiffs’ Exhibit J (statement of Sen. Milton); id., at 9 (statement of Sen. Schaaf); id., at 10-11 (statement of Sen. Perpich).
Moreover, the State explains, to ban both the plastic and the paperboard nonreturnable milk container at once would cause an enormous disruption in the milk industry because few dairies are now able to package their products in refillable bottles or plastic pouches. Thus, by banning the plastic container while continuing to permit the paperboard container, the State was able to prevent the industry from becoming reliant on the new container, while avoiding severe economic dislocation.
The Minnesota Supreme Court did not directly address this justification, but we find it supported by our precedents as well. In New Orleans v. Dukes, supra, we upheld a city regulation banning pushcart food vendors, but exempting from the ban two vendors who had operated in the city for over eight years. Noting that the “city could reasonably decide that newer businesses were less likely to have built up substantial reliance interests in continued operation,” we held that the city “could rationally choose initially to eliminate vendors of more recent vintage.” Id., at 305. Accord, United States v. Maryland Savings-Share Ins. Cory., 400 U. S. 4, 6 (1970). This case is not significantly different. The state legislature concluded that nonreturnable, nonrefillable milk containers pose environmental hazards, and decided to ban the most recent entry into the field. The fact that the legislature in effect “grandfathered” paperboard containers, at least temporarily, does not make the Act’s ban on plastic nonreturnables arbitrary or irrational.
Third, the State argues that the Act will help to conserve energy. It points out that plastic milk jugs are made from plastic resin, an oil and natural gas derivative, whereas paperboard milk cartons are primarily composed of pulpwood, which is a renewable resource. This point was stressed by the Act’s proponents in the legislature. Senator Luther commented: “We have been through an energy crisis in Minnesota. We know what it is like to go without and what we are looking at here is a total blatant waste of petroleum and natural gas . . . .” Transcript of the Pull Senate Floor Discussion on H. F. 45, p. 12 (May 20, 1977), reprinted as Plaintiffs’ Exhibit J. Representative Munger said in a similar vein:
“A sweep to the plastic throwaway bottle in the gallon size container alone would use enough additional natural gas and petroleum to heat 3,100 homes each year in Minnesota when compared to a refillable system and 1,400 compared to the present paperboard system. Plastic containers are made from a non-renewable resource while the paperboard is made from Minnesota’s forest products.” Transcript of the Debate of the Minnesota House of Representatives on H. F. 45, p. 2 (Mar. 10, 1977), reprinted as Plaintiffs’ Exhibit J.
The Minnesota Supreme Court held, in effect, that the legislature misunderstood the facts. The court admitted that the results of a reliable study support the legislature’s conclusion that less energy is consumed in the production of paperboard containers than in the production of plastic nonreturnables, but, after crediting the contrary testimony of respondents’ expert witness and altering certain factual assumptions, the court concluded that “production of plastic nonrefillables requires less energy than production of paper containers.” 289 N. W. 2d, at 85.
The Minnesota Supreme Court may be correct that the Act is not a sensible means of conserving energy. But we reiterate that “it is up to legislatures, not courts, to decide on the wisdom and utility of legislation.” Ferguson v. Skrupa, 372 U. S. 726, 729 (1963). Since in view of the evidence before the legislature, the question clearly is “at least debatable,” United States v. Carotene Products Co., 304 U. S., at 154, the Minnesota Supreme Court erred in substituting its judgment for that of the legislature.
Fourth, the State argues that the Act will ease the State’s solid waste disposal problem. Most solid consumer wastes in Minnesota are disposed of in landfills. A reputable study before the Minnesota Legislature indicated that plastic milk jugs occupy a greater volume in landfills than other nonreturnable milk containers. This was one of the legislature’s major concerns. For example, in introducing the bill to the House of Representatives, Representative Munger asked rhe-torieally: “Why do we need this legislation?” Part of his answer to the query was that “the plastic non-refillable containers will increase the problems of solid waste in our state.” Transcript of the Debate of the Minnesota House of Representatives on H. F. 45, p. 1 (Mar. 10, 1977), reprinted as Plaintiffs’ Exhibit J.
The Minnesota Supreme Court found that plastic milk jugs in fact take up less space in landfills and present fewer solid waste disposal problems than do paperboard containers. 289 N. W. 2d, at 82-85. But its ruling on this point must be rejected for the same reason we rejected its ruling concerning energy conservation: it is not the function of the courts to substitute their evaluation of legislative facts for that of the legislature.
We therefore conclude that the ban on plastic nonreturnable milk containers bears a rational relation to the State’s objectives, and must be sustained under the Equal Protection Clause.
Ill
The District Court also held that the Minnesota statute is unconstitutional under the Commerce Clause because it imposes an unreasonable burden on interstate commerce. We cannot agree.
When legislating in areas of legitimate local concern, such as environmental protection and resource conservation, States are nonetheless limited by the Commerce Clause. See Lewis v. BT Investment Managers, Inc., 447 U. S. 27, 36 (1980); Hunt v. Washington Apple Advertising Comm’n, 432 U. S. 333, 350 (1977); Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 767 (1945). If a state law purporting to promote environmental purposes is in reality “simple economic protectionism,” we have applied a “virtually per se rule of invalidity.” Philadelphia v. New Jersey, 437 U. S. 617, 624 (1978). Even if a statute regulates “evenhandedly,” and imposes only “incidental” burdens on interstate commerce, the courts must nevertheless strike it down if “the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Pike v. Bruce Church, Inc., 397 U. S. 137, 142 (1970). Moreover, “the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.” Ibid.
Minnesota’s statute does not effect “simple protectionism,” but “regulates evenhandedly” by prohibiting all milk retailers from selling their products in plastic, nonreturnable milk containers, without regard to whether the milk, the containers, or the sellers are from outside the State. This statute is therefore unlike statutes discriminating against interstate commerce, which we have consistently struck down. E. g., Lewis v. BT Investment Managers, Inc., supra (Florida statutory scheme prohibiting investment advisory services by bank holding companies with principal offices out of the State); Hughes v. Oklahoma, 441 U. S. 322 (1979) (Oklahoma statute prohibiting the export of natural minnows from the State); Philadelphia v. New Jersey, supra (New Jersey statute prohibiting importation of solid and liquid wastes into the State); Hunt v. Washington Apple Advertising Gomm’n, supra (North Carolina statute imposing additional costs on Washington, but not on North Carolina, apple shippers).
Since the statute does not discriminate between interstate and intrastate commerce, the controlling question is whether the incidental burden imposed on interstate commerce by the Minnesota Act is “clearly excessive in relation to the putative local benefits.” Pike v. Bruce Church, Inc., supra, at 142. We conclude that it is not.
The burden imposed on interstate commerce by the statute is relatively minor. Milk products may continue to move freely across the Minnesota border, and since most dairies package their products in more than one type of containers, the inconvenience of having to conform to different packaging requirements in Minnesota and the surrounding States should be slight. See Pacific States Box & Basket Co. v. White, 296 U. S. 176, 184 (1935). Within Minnesota, business will presumably shift from manufacturers of plastic nonreturnable containers to producers of paperboard cartons, refillable bot-ties, and plastic pouches, but there is no reason to suspect that the gainers will be Minnesota firms, or the losers out-of-state firms. Indeed, two of the three dairies, the sole milk retailer, and the sole milk container producer challenging the statute in this litigation are Minnesota firms.
Pulpwood producers are the only Minnesota industry likely to benefit significantly from the Act at the expense of out-of-state firms. Respondents point out that plastic resin, the raw material used for making plastic nonreturnable milk jugs, is produced entirely by non-Minnesota firms, while pulpwood, used for making paperboard, is a major Minnesota product. Nevertheless, it is clear that respondents exaggerate the degree of burden on out-of-state interests, both because plastics will continue to be used in the production of plastic pouches, plastic returnable bottles, and paperboard itself, and because out-of-state pulpwood producers will presumably absorb some of the business generated by the Act.
Even granting that the out-of-state plastics industry is burdened relatively more heavily than the Minnesota pulpwood industry, we find that this burden is not “clearly excessive” in light of the substantial state interest in promoting conservation of energy and other natural resources and easing solid waste disposal problems, which we have already reviewed in the context of equal protection analysis. See supra, at 465-470. We find these local benefits ample to support Minnesota’s decision under the Commerce Clause. Moreover, we find that no approach with “a lesser impact on interstate activities,” Pike v. Bruce Church, Inc., supra, at 142, is available. Respondents have suggested several alternative statutory schemes, but these alternatives are either more burdensome on commerce than the Act (as, for example, banning all nonreturnables) or less likely to be effective (as, for example, providing incentives for recycling). See Brief for Respondents 32-33.
In Exxon Corp. v. Governor of Maryland, 437 U. S. 117 (1978), we upheld a Maryland statute barring producers and refiners of petroleum products — all of which were out-of-state businesses — from retailing gasoline in the State. We stressed that the Commerce Clause “protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations.” Id., at 127-128. A nondiscriminatory regulation serving substantial state purposes is not invalid simply because it causes some business to shift from a predominantly out-of-state industry to a predominantly in-state industry. Only if the burden on interstate commerce clearly outweighs the State’s legitimate purposes does such a regulation violate the Commerce Clause.
The judgment of the Minnesota Supreme Court is
Reversed.
Justice Rehnquist took no part in the consideration or decision of this case.
Respondents, plaintiffs below, are a Minnesota dairy that owns equipment for producing plastic nonreturnable milk jugs, a Minnesota dairy' that leases such equipment, a non-Minnesota company that manufactures such equipment, a Minnesota company that produces plastic nonreturnable milk jugs, a non-Minnesota dairy that sells milk products in Minnesota in plastic nonreturnable milk jugs, a Minnesota milk retailer, a non-Minnesota manufacturer of polyethylene resin that sells such resin in many States, including Minnesota, and a plastics industry trade association.
Minnesota Stat. § 116F.01 (1978) provides in relevant part:
“Statement of policy. The legislature seeks to encourage both the reduction of the amount and type of material entering the solid waste stream and the reuse and recycling of materials. Solid waste represents discarded materials and energy resources, and it also represents an economic burden to the people of the state. The recycling of solid waste materials is one alternative for the conservation of material and energy resources, but it is also in the public interest to reduce the amount of materials requiring recycling or disposal.”
Minnesota is apparently the first State so to regulate milk containers. 289 N. W. 2d 79, 81, n. 6 (1979).
Transcript of the Debate of the Minnesota House of Representatives on H. F. 45, p. 1 (Mar. 10, 1977), reprinted as Plaintiffs’ Exhibit J.
The principal empirical study cited in legislative debate, see, e. g., Transcript of the Full Senate Floor Discussion on H. F. 45, p. 12 (May 20, 1977), reprinted as Plaintiffs’ Exhibit J (statement of Sen. Luther), is Midwest Research Institute, Resource and Environmental Profile Analysis of Five Milk Container Systems, admitted into evidence as Plaintiffs’ Exhibit I.
Justice Stevens’ dissenting opinion argues that the Minnesota Supreme Court when reviewing a challenge to a Minnesota statute on equal protection grounds is not bound by the limits applicable to federal courts, but may independently reach conclusions contrary to those of the legislature concerning legislative facts bearing on the wisdom or utility of the legislation. This argument, though novel, is without merit. A state court may, of course, apply a more stringent standard of review as a matter of state law under the State’s equivalent to the Equal Protection or Due Process Clauses. E. g., Baker v. City of Fairbanks, 471 P. 2d 386, 401-402 (Alaska 1970); Serrano v. Priest, 18 Cal. 3d 728, 76A-765, 557 P. 2d 929, 950-951 (1976), cert. denied, 432 U. S. 907 (1977); State v. Kaluna, 55 Haw. 361, 368-369, 520 P. 2d 51, 58-59 (1974); see Brennan, State Constitutions and the Protection of Individual Rights, 90 Harv. L. Rev. 489 (1977). And as the dissent correctly notes, post, at 479-481, the States are free to allocate the lawmaking function to whatever branch of state government they may choose. Uphaus v. Wyman, 360 U. S. 72, 77 (1959); Sweezy v. New Hampshire, 354 U. S. 234, 256-257 (1957) (Frankfurter, J., concurring in result); Dreyer v. Illinois, 187 U. S. 71, 83-84 (1902). But when a state court reviews state legislation challenged as violative of the Fourteenth Amendment, it is not free to impose greater restrictions as a matter of federal constitutional law than this Court has imposed. Oregon v. Hass, 420 U S. 714, 719 (1975).
The standard of review under equal protection rationality analysis— without regard to which branch of the state government has made the legislative judgment — is governed by federal constitutional law, and a state court’s application of that standard is fully reviewable in this Court on writ of certiorari. 28 U. S. C. § 1257 (3). Justice SteveNS concedes the flaw in his argument when he admits that “a state court’s decision invalidating state legislation on federal constitutional grounds may be reversed by this Court if the state court misinterpreted the relevant federal constitutional standard.” Post, at 489. And contrary to his argument that today’s judgment finds “no precedent in this Court’s decisions,” post, at 482, we have frequently reversed State Supreme Court decisions invalidating state statutes or local ordinances on the basis of equal protection analysis more stringent than that sanctioned by this Court. E. g., Idaho Dept. of Employment v. Smith, 434 U. S. 100 (1977); Arlington County Board v. Richards, 434 U. S. 5 (1977); Richardson v. Ramirez, 418 U. S. 24 (1974); Lehnhausen v. Lake Shore Auto Parts Co., 410 U. S. 356 (1973). See also North Dakota Pharmacy Board v. Snyder’s Drug Stores, Inc., 414 U. S. 156 (1973); Dean v. Gadsen Times Publishing Corp., 412 U. S. 543 (1973); McDaniel v. Barresi, 402 U. S. 39 (1971). Never have we suggested that our review of the judgments in such cases differs in any relevant respect because they were reached by state courts rather than federal courts.
Indeed, Justice SteveNS has changed his own view. Previously he has stated that state-court decisions under the Fourteenth Amendment granting litigants “more protection than the Federal Constitution requires,” are in error. Idaho Dept. of Employment v. Smith, supra, at 104 (Stevens, J., dissenting in part). This is in agreement with the conclusion of one commentator:
“In reviewing state court resolutions of federal constitutional issues, the Supreme Court has not differentiated between those decisions which sustain and those which reject claims of federal constitutional right. In both instances, once having granted review, the Court has simply determined whether the state court’s federal constitutional decision is 'correct/ meaning, in this context, whether it is the decision that the Supreme Court would independently reach.” Sager, Fair Measure: The Legal Status of Underenforced Constitutional Norms, 91 Harv. L. Bev. 1212, 1243 (1978) (footnote omitted).
Thus, Justice SteveNs’ argument in the dissenting opinion that today’s treatment of the instant case is extraordinary and unprecedented, see post, at 482, and n. 7, is simply wrong.
Respondents, citing the District Court’s Finding of Fact No. 12, App. A-19, also assert that the actual purpose for the Act was illegitimate: to “isolate from interstate competition the interests of certain segments of the local dairy and pulpwood industries.” Brief for Respondents 23. We accept the contrary holding of the Minnesota Supreme Court that the articulated purpose of the Act is its actual purpose. See 289 N. W. 2d, at 82. In equal protection analysis, this Court will assume that the objectives articulated by the legislature are actual purposes of the statute, unless an examination of the circumstances forces us to conclude that they “could not have been a goal of the legislation.” See Weinberger v. Wiesenfeld, 420 U. S. 636, 648, n. 16 (1975); Here, a review of the legislative history supports the Minnesota Supreme Court’s conclusion that the principal purposes of the Act were to promote conservation and ease solid waste disposal problems. The contrary evidence cited by respondents, see Brief for Respondents 29-31, is easily understood, in context, as economic defense of an Act genuinely proposed for environmental reasons. We will not invalidate a state statute under the Equal Protection Clause merely because some legislators sought to obtain votes for the measure on the basis of its beneficial side effects on state industry.
We express no view whether the District Court could have dismissed this case on the pleadings or granted summary judgment for the State on the basis of the legislative history, without hearing respondents’ evidence. See Vance v. Bradley, 440 U. S. 93, 109-112 (1979); Baydde Fish Flour Co. v. Gentry, 297 U. S. 422 (1936).
See n. 5, supra.
The court adopted the higher of two possible measurements of energy consumption from paperboard production, apparently because the lower figure contemplated the use of waste products, such as sawdust, for energy production. In addition, the court substituted a lower measurement of the energy consumption from plastic nonretumable production for that used in the study. 289 N. W. 2d, at 84-85.
This was the conclusion of the Midwest Research Institute study, see n. 5, supra. Brief for Petitioner 21.
The District Court also held that the Act violated substantive due process, and was apparently affirmed by the State Supreme Court on this ground. Conclusion of Law No. 1, App. A-23; 289 N. W. 2d, at 87, n. 20. From our conclusion under equal protection, however, it follows a fortiori that the Act does not violate the Fourteenth Amendment’s Due Process Clause. See Exxon Corp. v. Governor of Maryland, 437 U. S. 117, 124-125 (1978); Ferguson v. Skrupa, 372 U. S. 726 (1963).
“The Congress shall have Power ... To regulate Commerce . . . among the several States . . . .” U. S. Const., Art. I, § 8, cl. 3.
The Minnesota Supreme Court did not reach the Commerce Clause issue. 289 N. W. 2d, at 87, n. 20. The parties and amici have fully briefed and argued the question, and because of the obvious factual connection between the rationality analysis under the Equal Protection Clause and the balancing of interests under the Commerce Clause, we will reach and decide the question. See New York City Transit Authority v. Beazer, 440 U. S. 568, 583, n. 24 (1979).
A court may find that a state law constitutes “economic protectionism” on proof either of discriminatory effect, see Philadelphia v. New Jersey, or of discriminatory purpose, see Hunt v. Washington Apple Advertising Comm’n, 432 U. S., at 352-353. Respondents advance a “discriminatory purpose” argument, relying on a finding by the District Court that the Act’s “actual basis was to promote the economic interests of certain segments of the local dairy and pulpwood industries at the expense of the economic interests of other segments of the dairy industry and the plasties industry.” App. A-19. We have already considered and rejected this argument in the equal protection context, see n. 7, supra, and do so in this context as well.
Respondent Wells Dairy, an Iowa firm, sells 60% of its milk in plastic nonreturnable containers, and the remainder in other types of packages, including paperboard cartons. Tr. 419, 426, 439. The Chairman of the Board of respondent Marigold Foods, Inc., a Minnesota dairy, admitted at trial that his firm would continue to sell milk in plastic nonreturnable containers in other States, despite the passage of the Act. Id., at 474.
See n. 1, supra. The existence of major in-state interests adversely affected by the Act is a powerful safeguard against legislative abuse. South Carolina State Highway Dept. v. Barnwell Bros., Inc., 303 U. S. 177, 187 (1938).
Question: What is the state of the court whose decision the Supreme Court reviewed?
01. Alabama
02. Alaska
03. American Samoa
04. Arizona
05. Arkansas
06. California
07. Colorado
08. Connecticut
09. Delaware
10. District of Columbia
11. Federated States of Micronesia
12. Florida
13. Georgia
14. Guam
15. Hawaii
16. Idaho
17. Illinois
18. Indiana
19. Iowa
20. Kansas
21. Kentucky
22. Louisiana
23. Maine
24. Marshall Islands
25. Maryland
26. Massachusetts
27. Michigan
28. Minnesota
29. Mississippi
30. Missouri
31. Montana
32. Nebraska
33. Nevada
34. New Hampshire
35. New Jersey
36. New Mexico
37. New York
38. North Carolina
39. North Dakota
40. Northern Mariana Islands
41. Ohio
42. Oklahoma
43. Oregon
44. Palau
45. Pennsylvania
46. Puerto Rico
47. Rhode Island
48. South Carolina
49. South Dakota
50. Tennessee
51. Texas
52. Utah
53. Vermont
54. Virgin Islands
55. Virginia
56. Washington
57. West Virginia
58. Wisconsin
59. Wyoming
60. United States
61. Interstate Compact
62. Philippines
63. Indian
64. Dakota
Answer:
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songer_casetyp1_7-3-1
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B
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation - taxes, patents, copyright".
UNITED STATES of America, Appellant, v. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, Appellee. UNITED STATES of America, Appellant, v. SECURITY-FIRST NATIONAL BANK, Appellee.
Nos. 16104, 16165.
United States Court of Appeals Ninth Circuit.
Dec. 28, 1959.
See also 265 F.2<j 862.
George C. Doub, Asst. Atty. Gen., Samuel D. Slade, Peter H. Schiif, Attorneys, Department of Justice, Washington, D. C., Laughlin E. Waters, U. S. Atty., Richard A. Lavine, Burton C. Jacobson, Asst. U. S. Attys., Los Angeles, Cal., for appellant.
Hugo A. Steinmeyer, George L. Beck-with, Los Angeles, Cal., Samuel B. Stewart, San Francisco, Cal., for appellee Bank of America Nat. Trust & Savings Ass’n.
Farrand, Fisher & Farrand, Ross C. Fisher, Knox Farrand and Stephen Far-rand, Los Angeles, Cal., for appellee Security-First Nat. Bank.
Before STEPHENS, CHAMBERS and BARNES, Circuit Judges.
CHAMBERS, Circuit Judge.
In a certain sense, all forgers are impostors and, similarly, impostors in connection with commercial paper in a broad sense are usually forgers. But in the law merchant they are supposed to be separate people. Thus, if the payee is an impostor, a drawer-drawee (probably more properly considered as a maker) who pays a holder has no recourse on an endorser. If, however, he who signs the name of a payee may be classified as a forger, the drawer-drawee, after paying a subsequent endorser, may still recover his unfortunate payment from the endorser.
Of course, it is settled that Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, does not apply to government commercial paper — it is purely federal business. But this is not to say that the federal law turns its back on the law merchant.
And we yet find no evidence in the cases that the Supreme Court has rejected the rule of impostors on government checks as it is generally applied in most states on private checks. The lower federal courts have usually held the impost or rule applicable on government checks. As in the decisions on forgers vis-a-vis impostors in private commercial papers, there may be some inconsistencies between the lower federal courts as to who classifies as a forger and who as an impostor.
The facts of these two cases are very similar to Atlantic National Bank of Jacksonville v. United States, 5 Cir., 250 F.2d 114. Obviously following that case, the district court here rendered judgment for the defendant banks, denying recovery by the United States of its lost money. The government, on appeal, as it did in the trial court, contends that Atlantic National is contrary to National Metropolitan Bank v. United States, 323 U.S. 454, 65 S.Ct. 354, 89 L.Ed. 383. The latter case, it says, dictates that we reverse the trial court. If this last premise is correct, naturally a reversal is required. However, we deem National Metropolitan a true forger case and Atlantic National and our two cases true impostor situations. And we fail to find in National Metropolitan the overtones which would require us to apply it on the facts of these cases.
Here the government’s Internal Revenue Service was swindled, no doubt about it. The scheme involved refund checks fraudulently obtained for pretended over-payments of federal income tax. The facts were all stipulated. The only difference in the Security Bank and the Bank of America cases is that the swindlers, after the loss, were identified in the Security case and never identified in the Bank of America cases. Indeed, the true names of the swindlers appear as endorsers on some of the checks involving Security. But no one has suggested the variations in any of the endorsements require different legal results on different checks.
On the Security group of 58 checks involving amounts from $101.40 to $290.47 for a total of $9,715.15, the facts were these. Aline Lange Lee was a real estate broker in Los Angeles. She and members of her family prepared fictitious income tax withholding (W-2) forms. These purported to be the employees’ copies received from employers. The forms listed fictitious employees, and if the employers listed on the forms existed, they had no connection with the forms. Then “phony” income tax returns were prepared for the fictitious employees and submitted along with the corresponding W-2 forms. These were all sent to the district director of Internal Revenue at Los Angeles. Without any checking for verity, in due time one or another disbursing officer of the Treasury Department issued treasury checks for the amounts requested on the income tax returns and mailed the checks to the addressees and addresses shown on the returns. Members of the Lee family (who were waiting for the checks) endorsed thereon the identical signatures appearing on the returns showing (and requesting) a refund. Usually some subsequent endorsement also appeared thereon. The bank, after endorsing “all prior endorsements guaranteed,” collected each check through the Federal Reserve Bank at Los Angeles.
When the fraud was discovered, the government demanded of the bank repayment in full with interest. The demand being rejected, an action in the district court followed.
Inasmuch as no reason for a different result in Bank of America has been suggested or suggests itself, we do not recite the special facts thereof other than the one mentioned that the swindler or swindlers have not been identified. The crucial facts were the same. (The Bank of America case involved seven checks for a total of $1,341.08.)
It would appear that the impostor rule in the law merchant first began in face to face dealings and later was extended to swindles in the mail having-the same essential characteristics. Inherent in the impostor rule is the concept that as between the impostor and the rest of the world, the impostor payee acquires title to the piece of commercial paper issued by the drawer; therefore,, the drawer-maker’s only recourse is-against the impostor, subsequent unconditional endorsements (without notice) notwithstanding.
Of course, what makes the difference between the impostor in law and the forger in law is the intent of the maker, something not to be found on the face or back of the instrument. And it may be argued that something so amorphous as a great and complicated government cannot have intent. But we think it has not been adjudicated that its agents cannot and do not have intent. We think we find it here. We think those in the government chain responsible for-issuing the check, while they had no man or woman in the flesh standing before them or even a mental picture of his or her dimensions, did have an intent to issue the check to the person who wrote-the name on the spurious return and who eventually endorsed the check. What they would have thought had they known the facts, to us is immaterial.. We believe the government cannot cancel every check and get recourse on every endorser because of fraud in the inception. If Aline Lee, identifying herself as Aline Lee, had sent in an income tax return and attached it to a spurious W-2 form showing the payment of wages never paid by an existent or non-existent employer and upon the basis thereof had obtained a refund on a government check, we assume that short shrift would be made of any suit against the successive endorsers. A court would hold the issue was only between the government and the payee.
Also, we state this case. Suppose Aline Lee had in her business dealings regularly assumed another name. If she filed her returns under that name (and if it was unknown to the director that her true name was different), we do not perceive how a refund check issued to her could later cause legitimate grief to successive endorsers. Indeed, as we see it, the impostors who signed the return existed and were the persons who first endorsed the checks, even though they did not usually operate under such names. The essence of legal forgery is that the maker-drawer intended to obligate himself to a definite living person called A. The title of the instrument belongs to A or the drawer. Instead B gets the check and writes A’s name thereon. In such cases, whose who endorse do so at their peril, guaranteeing in law that the payee was he whom the maker-drawer intended to pay. But, “no title in the forger” is the foundation of the rule.
As above indicated, we think we have here true impostor cases. If the law for federal commercial paper is to be fashioned differently than the usual law merchant, it will have to be on a basis of a judicial rule that a government agent acting for his government cannot pass title to the paper he issues in line with his accustomed authority, if in the transaction the government has been defrauded, even when the government agent, as here, is wholly innocent of the fraud and deals with an impostor. That the Supreme Court will so rule we have been unable to find a harbinger thereof in its cases. Such an idea, perhaps less broadly stated, we think may underlie the dissent in the Atlantic National case, supra.
Although we still remain unpersuaded, it should be noted that counsel for the government have here presented a brief reflecting both industry and excellence.
The judgments in the two cases are severally affirmed.
. Security-First National Bank of Los Angeles v. United States, 9 Cir., 103 F.2d 188, a case based on the California imposter rule.
. Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838.
. United States v. Continental-Ameriean Bank & Trust Co., 5 Cir., 175 F.2d 271, certiorari denied 338 U.S. 870, 70 S.Ct. 148, 94 L.Ed. 584; United States v. First National Bank of Albuquerque, 10 Cir., 131 F.2d 985.
. See discussion, Britton on Bills and Notes, § 151, page 715.
. Voidable title, of course, as between the drawer and the impostor, and voidable against one with notice.
. See Cohen v. Lincoln Savings Bank of Brooklyn, 275 N.Y. 399, 10 N.E.2d 457.
Question: What is the specific issue in the case within the general category of "economic activity and regulation - taxes, patents, copyright"?
A. state or local tax
B. federal taxation - individual income tax (includes taxes of individuals, fiduciaries, & estates)
C. federal tax - business income tax (includes corporate and parnership)
D. federal tax - excess profits
E. federal estate and gift tax
F. federal tax - other
G. patents
H. copyrights
I. trademarks
J. trade secrets, personal intellectual property
Answer:
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songer_genresp2
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task is to determine the nature of the second listed respondent. If there are more than two respondents and at least one of the additional respondents has a different general category from the first respondent, then consider the first respondent with a different general category to be the second respondent.
Clark NOE, Appellant, v. W. D. SMITH et al., Appellees.
No. 18867.
United States Court of Appeals Fifth Circuit.
March 30, 1962.
Geo. W. Provost, Pompano Beach, Fla., for appellant.
Robert B. Cochran, Pompano Beach, Fla., William A. Morse, Eugene L. Heinrich, Fort Lauderdale, Fla., Norman S. Pallot, Miami, Fla., Arnold F. Kurzinger, Boca Raton, Fla., for appellees.
McCune, Hiaasen, Crum & Ferris, Fort Lauderdale, Fla., for appellees Eugene L. Heinrich and James M. Crum, Fort Lauderdale, Fla., of counsel.
Before HUTCHESON, WISDOM, and BELL, Circuit Judges.
PER CURIAM.
This is an appeal from a final judgment entered in the United States District Court for the Southern District of Florida, dismissing with prejudice appellant’s complaint of infringement of his patent on an underground drainage and disposal system.
Holding appellant’s device unpatentable and the patent invalid by reason of lack of novelty and invention, the trial court entered findings of fact to the effect that the drainage and disposal system on which the patent had been issued had no new, different, or inventive principle, function, or advantage over the prior art and use in the field, in that all of its features were found to be mere mechanical equivalents of the prior art and use. It was found that the basic features of the patented device, its method of operation, and its appearance were substantially identical to various known drainage devices in use for many years prior to the application for the patent, with the only differences being those of form or shape, without differences in theory, structure, function, or purpose. See 35 U.S.C. §§ 101, 102. In addition, the court found that the device described in the patent was merely the adaptation of the teachings of the prior art and public use, with the addition of no more than the ordinary mechanical skill reasonably to be expected in the field, all of which would be obvious to persons of ordinary skill in the art pertaining to the subject matter of the patent. See 35 U.S.C. § 103.
Findings of fact by the trial court in patent cases are conclusive upon appeal, unless they are found to be clearly erroneous. Fed.R.Civ.P. rule 52(a), 28 U.S.C.; Fairchild v. Poe, 259 F.2d 329 (5th Cir. 1958). Our examination of the record reveals that the findings of the trial court were supported by substantial evidence, and were not erroneous.
The finding that the device was unpatentable and the patent invalid is a fully reviewable question of law. Smith v. Nichols, 88 U.S. 112, 118, 22 L.Ed. 566 (1874); Little Mule Corp. v. The Lug All Co., 254 F.2d 268, 275 (5th Cir. 1958); Fritz W. Glitsch & Sons, Inc. v. Wyatt Metal and Boiler Works, 224 F.2d 331, 335 (5th Cir. 1955). Upon the facts found, we are of the opinion that the court was correct in concluding that appellant’s device was unpatentable, and that the claims for relief because of infringement were therefore without merit. Because we affirm the findings of the trial court that the device did not meet the requisite standard of invention and was anticipated by the prior art, we find it unnecessary to pass upon appellant’s strongly urged contention that the court erred in the admission of evidence of prior public use.
The judgment is
Affirmed.
Question: What is the nature of the second listed respondent whose detailed code is not identical to the code for the first listed respondent?
A. private business (including criminal enterprises)
B. private organization or association
C. federal government (including DC)
D. sub-state government (e.g., county, local, special district)
E. state government (includes territories & commonwealths)
F. government - level not ascertained
G. natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)
H. miscellaneous
I. not ascertained
Answer:
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songer_bank_app2
|
B
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
Your task is to determine whether or not the second listed appellant is bankrupt. If there is no indication of whether or not the appellant is bankrupt, the appellant is presumed to be not bankrupt.
MINTER et al. v. FEDERAL TRADE COMMISSION.
No. 6795.
Circuit Court of Appeals, Third Circuit.
Feb. 14, 1939.
David H. Kinley, of Philadelphia, Pa., for petitioners.
W. T. Kelley, Chief Counsel, Federal Trade Commission, Martin A. Morrison, Ass’t. Chief Counsel, and James W. Nichol, Sp. Atty., all of Washington, D. C., for respondent.
Before BIGGS, CLARK, and BUF-FINGTON, Circuit Judges.
CLARK, Circuit Judge.
This case seems to us a futile continuation of earlier litigation. The trade practices of these petitioners have already been expressly condemned in a unanimous opinion of the United States Supreme Court, Federal Trade Commission v. Keppel & Bro., 291 U.S. 304, 54 S.Ct. 423, 78 L.Ed. 814, February 5, 1934. As the high court there adopted, or rather amplified, the view of the then minority of this court, we can be supposed to be thoroughly familiar with the holding.
The particular practice whose ceasing and desisting was there and here ordered is known in the marts of commerce as selling by “break and take” (pick and take, draw deals, punch cards and punch boards) rather than by “straight goods” packages. The nomenclature furnishes a clue to the disapproval both of the judicial bodies and encouragingly, of the “better element” in the trade itself.
The “break and take” method is the sale of merchandise (or amusement as in the case of motion picture bank nights, 12 Wisconsin Law Review 251, 17 Boston University Law Review 238), by the inducement of a lottery. The customer does not buy only a chance represented by a ticket, he pays for a chattel and a chance for another unpaid chattel, the ticket being the opportunity for fortuitous selection of a differentiated article. It is, so to speak, a lottery with trimmings, and one might observe that a lottery by any other name will smell as bad.
This selling by lottery seems to have prevailed largely where it least should have prevailed, namely, in the sale of penny candy to little children. The Federal Trade Commission’s brief cites eighteen of these candy cases initiated by it and sustained by the Circuit Courts of Appeal and the United States Supreme Court since the decision of the Keppel case above cited. These cases are collected in the notes to Section 45 of Title 15, U.S.C.A. on pages 66-75 of the supplement, and see note 5 of 43 Yale Law Journal 1339. See also In the matter of Boyd Houser Candy Company and In the matter of The Newton Products Company, Vol. 4 Federal Register, No. 27, p. 607. It has not always been so limited. As long ago as 1918 we find the Federal Trade Commission prohibiting the sale of tea and coffee with coupons for prizes concealed in certain packages, Federal Trade Comm. v. Brumage-Loeb Co., Successor to Buddha Tea Co., 1918, 1 F.T.C. 159, Federal Trade Comm. v. Everybody’s Mercantile Co., 1920, 3 F.T.C. 60, and only recently the commission was sustained in its objection to the sale of silk stockings by punch cards, Chicago Silk Co. v. Federal Trade Commission, 7 Cir.1937, 90 F.2d 689, certiorari denied, 1938, 302 U.S. 753, 58 S.Ct. 281, 82 L.Ed. 582. And see also as to the sale of gas and oil an injunction by competitor, Jones v. Smith Oil & Refining Co., 1938, 295 Ill. App. 519,15 N.E.2d 42; 29 Journal of Criminal Law and Criminology 598.
The petitioners and the other practitioners of this type of merchandising have followed that ancient precept of the sea, “women and children first”, except that they pervert instead of protect weakness. Taking candy from children has never been highly regarded. Forcing it upon them through their possession of an instinct that the adult world recognizes and has always recognized as at the bottom of many of its troubles, seems to us shameful. We have rarely seen of a more unpleasant example of commercial cynicism than is disclosed by the testimony of the petitioners’ president, Ira W. Minter:
“Q. In your opinion, Mr. Minter, is this form of advertising injurious to the public? A. The public benefits by it.
“Q. In what way would you say the public benefits by it ? A. By getting additional value for the purchase of the particular goods that it is being offered with”. Record, p. 148.
The “benefit”' and “additional value” so euphemistically referred to, is our old friend “something for nothing”, the consequences of too enthusiastic pursuit of which are known to judges in their official capacities.
In view of the controlling decision of the Supreme Court in Federal Trade Commission v. Keppel & Bro., above cited, any extended discussion of the law is inappropriate. Petitioners attempt three distinctions. Two of them touch upon the judicial history of its iñterpretation. They say, first, that the Federal Trade Commission has no statutory power because the whole candy manufacturing business is infectéd with the “break and take” virus. In the light of the sentiments we have just expressed, we should be loath to believe this of any body of business men. Happily we do not have to. First, the witnesses making this depressing assertion, Minter and Coughlin, the president and candy broker of the petitioners, are somewhat interested. Second, it is flatly contradicted by two other candy manufacturers called by the Commission, Voneiff, p. 39, and Roskamm, p. 102. Although the latter’s business reformation was not altogether voluntary (cease and desist order), he did not limit himself to his own business but referred to earlier and, to him, more Halcyon days in the trade generally, saying: “In the days when break and take were so actively sold in a much larger volume than they are today,- we used to receive constant requests from our salesmen, wanting to know why, if other firms could make these packages, we would not make them, and advised us that in many instances their customers were buying a general line of merchandise such as ours, from sources who could supply them with break and take, and vigorously demanded therefore that we also give them a similar assortment to do business with so that they can get their normal share of the distribution and earn their pro rata commission”. Record, p. 102.
The Commission’s finding, paragraph 6, Record pp. 200-201 is supported by evidence and is by well-settled law conclusive, Federal Trade Commission v. Algoma Lumber Co., 291 U.S. 67, 73, 54 S.Ct. 315, 78 L. Ed, 655, January 8, 1934, Federal Trade Commission v. Standard Education Society, 302 U.S. 112, 117, 58 S.Ct. 113, 82 L.Ed. 141, November 8, 1937.
Even if this had not been so and if the entire penny candy trade had indulged in the practice alleged to be obnoxious, we believe the present trend of decision under section 45, Title 15, U.S.C.A., supports the order. That trend is away from the requirement of injury to a particular competitor and toward the protection of- the general consumer.
The direction of that judicial current depends, of course, upon the construction of a very general word “competition”. The issue is whether it may be construed to include situations where the practices to be struck down are rife in an entire industry, Jurisdiction of Federal Trade Commission Over False Advertising, 31 Col.Law Rev. 527, or whether the Commission can only intervene when one honest competitor enters the field, Scope of the Jurisdiction of the Federal Trade Commission over False and Misleading Advertising, 40 Yale Law Journal 617 (comment), The Meaning of Methods of Competition in Commerce, 31 Michigan Law Review 808.
Light has, very properly, been sought in the halls of Congress. An entire article has been devoted to a collection of excerpts from the Debates in the Senate, Unfair Methods of Competition, 25 Yale Law Journal 20, and further references to the Congressional Debates are collected in note 18 on page 532 of Mr. Handler’s (a leading authority on the subject) article in 31 Col. Law Review 534, above cited. A perusal of these debates leaves us with the impression that general words were employed to make possible the meeting of future contingencies. We say this although we recognize the danger voiced by Mr. Justice Cardozo in repeating the words of Professor Gray in his lectures on the Nature and Sources of the Law: “ ‘that the difficulties of so-called interpretation arise when the legislature has had no meaning at all; when the question which is raised on the statute never occurred to it; when what the judges have to do is, not to determine what the legislature did mean on a point which was present to its mind, but to guess what it would have intended on a point not present to its mind, if the point had been present’-”. Cardozo, The Nature of the Judicial Process, p. 15.
Surely emasculation of the Commission in proportion to the prevalence of the roguery involved would be a failure to recognize such contingency. The contrary or strict construction by some of the courts arises, as we think, from too long judicial considerations of the technical difficulties in the enforcement of common law private and public sanctions against dishonest trade practices, Handler, False and Misleading Advertising, 39 Yale Law Journal 22, The Meaning of Methods of Competition in Commerce, 31 Michigan Law Review 808, above cited, Handler, Jurisdiction of Federal Trade Commission over False Advertising, 31 Col.Law Review 527, above cited, Scope of the Jurisdiction of the Federal Trade Commission over False and Misleading Advertising, 40 Yale Law Journal 617 (comment), above cited.
It is not unreasonable to suppose that the very purpose of the legislative body, here as often, was to stop the gaps of judge made law. If we can indulge in a priori reasoning, we might note the addition by Congress on June 23, 1938 of the phrase “unfair or deceptive acts or practices in commerce” to the former “unfair methods of competition in commerce”, 52 Stat. 1028, 15 U.S.C.A. § 45.
Petitioners’ second ground for distinguishing the Keppel case opens up another vista of interpretation as to the meaning of another general word — this time the word “unfair”. Here again and again naturally the effort is toward limitation. The rugged individual wishes to continue in his ruggedness and wishes to correspondingly narrow the scope of interference by a bureaucratic and possibly slightly more ethical government. The courts have not agreed with their rugged view, however, and have gradually widened that scope. They have brought their standard of fairness even closer to an ever, we think, higher conception of business ethics. That process of widening is discussed in the law review articles above cited, 39 Yale Law Journal 22, 31 Michigan Law Review 808, 31 Col.Law Review 527, 40 Yale Law Journal 617. See also The Legal Phases of Advertising by Francis Finkelhor, 1938.
The distinction attempted is based on a difference of fact. In the Keppel case the candy of the break and take package was of inferior quality to that of the straight goods. Here it is not. The argument seems to be derived from the attempt of the dissenting opinion of this court, Keppel & Bro. v. Federal Trade Commission, 3 Cir,, 63 F.2d 81, 85, to bring the practice within the conception of “deception”.
The learned judge of this Court writing that opinion concludes that driving the non-gambling packages from the shelves forced cheating of the consuming children. This stretching of logic was, we surmise, occasioned by a desire to bring the case within the established precedents which stressed deception.
The Supreme Court, as is its special privilege, rejected this, shall we say, rather tortured construction of the practice and placed its decision on a more satisfactory legal and a more fundamental ethical ground. If you cheat people, you affect their pocketbook; if you encourage them to gamble, you affect their character. Mr. Justice Stone said: “But here the competitive method is shown to exploit consumers, children, who are unable to protect themselves. It employs a device whereby the amount of the return they receive from the expenditure of money is made to depend upon chance. Such devices have met with condemnation throughout the community. Without inquiring whether, as respondent contends, the criminal statutes imposing penalties on gambling, lotteries and the like, fail to reach this particular practice in most or any of the states, it is clear that the practice is of the sort which the common law and criminal statutes have long deemed contrary to public policy. For these reasons a large share of the industry holds out against the device, despite ensuing loss in trade, or bows reluctantly to what it brands unscrupulous. It would seem a gross perversion of the normal meaning of the word, which is the first criterion of statutory construction, to hold that the method is not ‘unfair.’” Federal Trade Commission v. Keppel & Bro., 291 U.S. 304, 313, 54 S.Ct. 423, 426, 78 L.Ed. 814.
The writer of a note in the Yale Law Journal has commented on this opinion, saying: “Granting that those practices which business men ‘should not adopt’ constitute unfair methods of competition, the question still remains as to why, in the face of a diversion of trade which might otherwise be retained, they should refuse to use the method involved in the principal case. The reason is found in the injury which its use will entail to the public. In the advertising cases, that injury consists of deception with the resultant purchase of a different and usually inferior article than is represented. In the case under consideration, while the deception element was lacking, still the consumers of the product were induced by the gaming device to purchase a product inferior to that which they might otherwise procure for the same price. But in the eyes of the Court the financial injury was subordinate to the moral one, which consisted of a tendency to encourage gambling, a form of conduct that it deemed subversive of general morality and so contrary to public policy as frequently to have been an object of statutory prohibition”. Powers of the Federal Trade Commission in Prohibiting Unfair Methods of Competition, 43 Yale Law Journal 1338, 1340 (note). See also 10 N.Y.U.Law Quarterly Rev. 11, 82 U.Pa. Law Rev. 664, 665.
It is interesting to record that the business men responsible -for the publication of that most excellent book, Public Regulation of Competitive Practices, had anticipated the sentiments of the learned Justice and the learned author. We quote:
“As a method of sales promotion, lotteries are so unusual as to warrant but passing notice. They are unusual because they were well known to be opposed to public policy even prior to the enactment of the regulatory legislation of 1914, and in some states they have been made penal offenses by statute. The reasons for this general condemnation of lotteries are primarily ethical and not economic. It is regarded as contrary to sound morality that men should be encouraged to seek ‘something for nothing’ — or for a trifle. At the same time it is recognized that there are economic objections to a scheme which extracts small contributions from many, without compensation, for the benefit of the chance recipient of an unearned prize”. Pages 138-139.
“In other words an honest lottery as a method of promoting sales was held to constitute an unfair method of competition. This appears to be sound doctrine. If it is unfair competition to tempt buyers by misrepresentations of the quality of goods, it may be regarded as likewise unfair to tempt them to buy goods not upon their merits but upon the chance of securing something for nothing”. Page 140.
As the United States Supreme Court in. the Keppel case has rejected the petitioners’ officers’ tolerance toward children’s lotteries, it is perhaps impertinent to indulge in any homily on the economics and ethics of gambling. The temptation and its cause have been eloquently described by Lecky: “The foregoing remarks will show the great difficulty and complexity of these questions about the connection between legislation and morals. Perhaps the most important and most difficult is the attitude the law should assume towards voluntary habits which are the cause of great and widespread misery in the community. One of the most conspicua ous of these is gambling. * * * Yet no one will doubt that gambling may easily become a passion scarcely less irresistible and less injurious than drink, and it is a passion which is common to all latitudes and to all stages of civilisation. Probably its chief root is that craving for excitement to which I have just referred as one of the deepest and strongest springs of human action. Man is so constituted that tranquil pleasure rarely suffices him. There are chords in his being which must be touched in another way, and he imperiously needs the thrill of intense emotion, even when that emotion is far from being exclusively pleasurable.” Democracy and Liberty, Vol. 2, Page 107. See also Hastings, Encyclopedia of Religion and Ethics, Vol. 3, p. 584, Encyclopedia of the Social Sciences, Vol. 6, p. 555, Keynes, Treatise on Probability, p. 20, p. 320.
The particular form of gambling in question here, the lottery, has come in for particular attention. Because of the ease of and profit in its operation, the lottery has had a long and international history and has been utilized for the support of the revenue and other beneficent purposes, Channing, History of the United States, Vol. 4, pp. 24— 27, Vol. 5, pp. 197-200, The Reference Shelf, Muller, Lotteries, Vol. 10, No. 2. Its evil has been thus described: “The real objection to lotteries is that most of their patrons are poor people, who can ill afford the sums they spend. Their dreams of success, of sudden unearned riches, are the unhealthy dreams of the escapist who finds the burden of his normal existence almost insupportable. The lottery, in short, has the same weakness as the sales tax; it is a levy on those who can least afford it: it reduces the purchasing power of the poor, and the revenues that might be derived from it by the government would help reduce the tax burden on the rich”. The Reference Shelf, Muller, Lotteries, Vol. 10, No. 2, pp. 103— 104. And it is accurate, we think, to say that the number of lotteries and of those approving them in the world are on the decline. The Reference Shelf, Muller, Lotteries, Vol. 2, No. 2, Negative Discussion, p. 103.
However that may be, there is no doubt about the current attitude of our people, at least so far as it is reflected in their institutions, if not in their habits. By constitutional mandate four states forbid all forms of gambling, Index Digest of State Constitutions, The New York State Constitutional Convention Commission, 1915, p. 702, and thirty-three states forbid it in the form of lotteries, Index Digest of State Constitutions, above cited, p. 977. All attempts to repeal these provisions have failed, Proceedings of the New York State Constitutional Convention, 1938, Vol. 6, p. 200. The United States (Sections 191, 336, 387, Title 18, U.S.C.A., Sections 135, 136, Title 19, U.S.C.A.) and all forty-eight states have signified their legislative abhorrence of gambling by lottery, 38 C.J. 303.
More germane to the principal case is the position of our courts. We say more germane because we cannot overlook (as some people did in 1919) the difficulties inherent in the enforcement of sumptuary legislation. “It is necessary to lay the foundation of the public administration in the affections of the people”. George Washington, Richardson, Messages and Papers of the Presidents (1789-1897) Vol. VI, p. 10; and see Lecky, above cited, pp. 106, 107. There is no such difficulty in the negative act of failing to give effect to transactions deemed to be contrary to public policy. Although wagering contracts were valid at common law, in modern times, in both England and most of the states of the United States, gambling transactions are “unenforceable” and only the loser has recourse to the courts) 27 C.J. 1048, 1080.
In our opinion, the requirement that the trader cease and desist from making a profit out of a lottery is more analogous to this abstention of the courts than it is to positive punishment of the habits of a people. As a matter- of fact, even a nation of adult bingo players (cf. testimony of petitioners’ candy broker, Record p. 179) would acquiesce in the prevention of pandering to the same instinct in their young.
Such, at any rate, has been the attitude of the law makers from earliest times. So we find the Pandect providing: “It is determined that no one that has given money on loan to a filiusfamilias, to be paid even after the death of the parent in whose power he is, shall be given any action or claim, that so these money-lenders of the worst sort may know that no filiusfamilias can contract a debt that will be good in the event of his father’s death”. D. 14, 6, 1. This enactment “derived its name either from Macedo, a well-known usurer; or from Macedo, a young debauchee, whose crimes had drawn the attention of the Senate to the perils arising from spendthrift children”, Tacitus, Ann. 11, 13, Suetonius, Vesp. 11. In England in 1541 an act prohibited lotteries because the young men spent their time gambling instead of prac-tising archery, 29 Journal of Criminal Law and Criminology 598, above cited. Many states attach special criminal significance to the encouragement of gambling by minors, 21 Cent., Gaming, sec. 203, 20 Cyc., 909. This ancient and modern legislation is but the reflection of a general opinion. The editors of The School Review related it to the particular practices of the case at bar:
“Children as well as adults are today constantly being exposed to the lure of various types of gambling schemes. These are rapidly increasing in number. One can hardly drop into the corner store or stop on the road while driving without running into slot machines, punchboards, and pin-ball games. And how appealing to the eye and imagination the manufacturers have made these devices!
“The situation has reached such proportions that serious consideration must be given to an intelligent attack on the problem. The soundest protection of the individual against the gambling evil would seem to be found in an intelligent understanding of the truth. Children cannot be protected from the various gambling schemes so common today by merely allowing them to grow up in ignorance of the facts, in the hope that they will never come into contact with them. The truth of the matter is that they come into contact with them at an early age and learn about them through very undesirable experiences. Various gambling schemes are used at American Legion carnivals and even church bazaars. As if the end justified the means!
“In order to find out what proportion of our children had some experience with slot machines and punchboards, we checked the children in the eighth grade. We found that 93 pupils or 78 per cent of the class had played slot machines and 64 pupils or 52 per cent had played punchboards. With such proportions at the elementary-school level, what can we expect later on?
“The experiences of children with such devices are usually very inadequate and misleading. The unfortunate thing about gambling is the fact that people tend to forget their losses but always remember their ‘winnings’. The thrill of winning makes a strong impression on the individual, and it remains in his memory. Then too it inflates his ‘ego’ to win, and he constantly reminds others of his ‘good judgment’. The losses are not as clearly appreciated because usually no account is kept of the nickels or quarters squandered on the machines from time to time. The ‘winnings’, however, always come in one larger payment and greatly impress the individual. Have you ever heard people tell about their great losses? But you have heard them tell about their ‘winnings’. As a result the impression grows that certain people are always lucky. Individuals themselves develop the attitude that they are just naturally lucky and can get something for nothing. This impression is particularly effective with children”. An Instance of Realistic Civil Education, The School Review, February 1938, pp. 92, 93. See also Evans, Are We Teaching Our Children To Gamble?, Parents Magazine, March 1937, p. 24; Hauser, A Short. Course in Gambling, Parents Magazine, June 1938, p. 31.
Petitioners seem to have had some realization of the reaction we have just been discussing. Their third ground of distinction from Federal Trade Commission v. Keppel & Bro. above cited, is the pretense that the candy does not reach the mouths of children. This assertion almost calls for the application of the Physical Facts Rule discussed in two recent opinions of this court. “The manufacturer puts up candy for sale to jobbers who sell to small neighborhood stores particularly those adjacent to schools”, Witness, Roskamm, p. 98. Does petitioners’ president envisage many of his grown-up friends and acquaintances gorging themselves on penny candy ? If he does, we do not.
The petition for review is dismissed.
Question: Is the second listed appellant bankrupt?
A. Yes
B. No
Answer:
|
songer_direct1
|
B
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the ideological directionality of the court of appeals decision, coded as "liberal" or "conservative". Consider liberal to be for government tax claim; for person claiming patent or copyright infringement; for the plaintiff alleging the injury; for economic underdog if one party is clearly an underdog in comparison to the other, neither party is clearly an economic underdog; in cases pitting an individual against a business, the individual is presumed to be the economic underdog unless there is a clear indication in the opinion to the contrary; for debtor or bankrupt; for government or private party raising claim of violation of antitrust laws, or party opposing merger; for the economic underdog in private conflict over securities; for individual claiming a benefit from government; for government in disputes over government contracts and government seizure of property; for government regulation in government regulation of business; for greater protection of the environment or greater consumer protection (even if anti-government); for the injured party in admiralty - personal injury; for economic underdog in admiralty and miscellaneous economic cases. Consider the directionality to be "mixed" if the directionality of the decision was intermediate to the extremes defined above or if the decision was mixed (e.g., the conviction of defendant in a criminal trial was affirmed on one count but reversed on a second count or if the conviction was afirmed but the sentence was reduced). Consider "not ascertained" if the directionality could not be determined or if the outcome could not be classified according to any conventional outcome standards.
WESTMORELAND SPECIALTY CO. v. BURNET, Commissioner of Internal Revenue.
No. 5345.
Court of Appeals of the District of Columbia.
March 14, 1932.
Geo. E. H. Goodner, of Washington, D. C., for appellant.
G. A. Youngquist, Asst. Atty. Gen., and Sewall Key, Wm. Cutler Thompson, C. M. Gharest, and Stanley Suydam, all of Washington, D. C., for appellee.
Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, and GRONER, Associate Justices.
GRONER, Associate Justice.
This is a tax case and involves the question whether petitioner is entitled- to deduct from gross income for the calendar year 3921 the sum of $30,800, representing the par value of 308 shares of its capital stock, which were issued to its president in January, 1922, in accordance with an agreement claimed to,have been made Juno, 1921.
The appropriate statute is 234 (a) of Revenue Aet 1921 (c. 136, 42 Stat. 227, 254). The statute provides: “That in computing the net income * * * there shall be allowed as deductions: (1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation Eor personal services actually rendered. * * ¡F »
Article 107 of regulations 62 provides: “Bonuses to employees will constitute allowable deductions from gross income when such payments are made in good faith and as additional compensation for the services actually rendered by the employees, provided such payments, when added to the stipulated salaries, do not exceed a reasonable compensation for the services rendered.”
Petitioner was a Pennsylvania corporation engaged in the manufacture of glass specialties, and had an authorized capital stock of one thousand shares of the par value of $100 each. Until 1922 only 850 shares were issued, and these were divided as follows: George R. West, who was president, 327 shares; Charles II. West, secretary treasurer, 192 shares; Ira F. Brainard, 331 shares. Dissatisfaction arose over the conduct of the business, as a result of which George R. West resigned as president in May, 1921, and Charles H. West was elected Ms successor, and Brainard, who had not hitherto been connected with the corporation in an active way, though at all times a director, was elected secretary treasurer for the balance of the year. As a result of George West’s resignation, the principal responsibility of management fell on his brother, Charles West, and the latter expressed a disinclination to discharge this responsibility on the same basis of compensation as formerly. Brainard, recognizing the necessity of meeting this objection, agréed with Charles West that the corporation would acquire the 327 shares of stock belonging to George West for the sum of $60,000, and that the unissued 150 shares of authorized stock would be issued, and the aggregate of these two blocks of stock divided in such way as to give Charles H. West and Brainard each a half ownership in the stock of the corporation.'
. Charles West, in his testimony, describes the transaction as follows: The substance of the agreement entered into at the time his brother retired from the presidency was that witness - and Mr. Brainard would issue stock so as to equalize the ownership of the company between them, so that from that time on they would be equal partners, so to speak, in the business, although in corporate form.
The plan was consummated by the purchase by the corporation of George West’s shares of stock for $60,000, of which 308 shares were later issued to Charles West and 19 to Brainard, who also received the 150 shares of newly issued stock. Petitioner claims- the right to deduct the par value of the shares transferred to Charles West, in other words, the sum of $30,800, as compensation for services for the year 1921. The Board held against the claim, and we think correctly.
We start, of course, with the presumption that the Commissioner’s determination was correct and that the findings of fact by the Board of Tax Appeals are not the subject of review if based upon substantial evidence. The question then is, Was the payment or transfer of stock made' as compensation for personal services, and were such personal services actually rendered ?
The board determined that the treasury stock was transferred for the purpose of effecting an equal distribution of appellant’s authorized capital between Charles H. West and Brainard, and, inf eren tially at least, that this was done to retain Charles West’s services to the corporation indefinitely and in effect to make him an equal partner in the business. If the Board'» conclusion in this respect is correct, it forecloses the question, for the reason that, if the motive of the payment was as found by the Board, the claim now made is untenable. We have, therefore, been at some pains to examine the evidence. Petitioner’s books show that Charles West, first as secretary treasurer and later as president, received in the year in question salary of $9,000 and a cash bonus of $3,000, and that Brainard, as secretary and treasurer for the last seven months- of the' year, received salary of $5,250 and a cash bonus of $3,000. There is nothing else on the books of the corporation to show ’either by resolution or payment any further compensation to Charles H. West. The $60,000 transaction resulting in the acquisition of the stock, the most of which Charles West received, was recorded in the books of the corporation as a capital transaction. The entries in relation to the purchase of the stock and the proper accounting method to balance the books was the subject of a. correction in the accounts made by an expert called in specifically for that purpose, and there is nothing either in the original entry or in the subsequent correction which- indicates that the purchased and reissued capital stock was in compensation of the officers, or any of them, unless the resolution directing the issuance of the stock to Charles West in consideration of “one dollar and other valuable consideration” may be so called; but when it is considered that at the same meeting Brainard, who admittedly performed no special services, was voted 169 shares, likewise in consideration of $1, and when the evidence of the parties themselves, all of which supports rather than refutes the Board’s theory, is also considered, the conclusion is inevitable that the transaction is precisely as found by the Board, and that the present 'claim is purely an afterthought, which it would be grotesque to adopt.
Affirmed.
Question: What is the ideological directionality of the court of appeals decision?
A. conservative
B. liberal
C. mixed
D. not ascertained
Answer:
|
sc_issue_9
|
32
|
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue of the Court's decision. Determine the issue of the case on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis.
FREEPORT-McMoRAN INC. v. K N ENERGY, INC.
No. 90-655.
Decided February 19, 1991
Per Curiam.
Petitioners seek review of a decision of the United States Court of Appeals for the Tenth Circuit, holding that a Federal District Court lacked jurisdiction to entertain their diversity action because they added a nondiverse party after filing their complaint. We grant certiorari and reverse the decision of the Court of Appeals.
Petitioners, McMoRan Oil and Gas Company (McMoRan) and its parent company, Freeport-McMoRan Inc. (Freeport), sued respondent K N Energy, Inc. (K N) for breach of contract in the United States District Court for the District of Colorado. Petitioners claimed that respondent had failed to pay the price for natural gas agreed upon in their contract, and sought both declaratory relief to establish the contract price and damages for past underpayments. Petitioners based federal jurisdiction upon diversity of citizenship. At all times up to and including the filing of the complaint, Free-port and McMoRan were Delaware corporations with their principal places of business in Louisiana. K N was and is a Kansas corporation with its principal place of business in Colorado.
After suit was filed, petitioner McMoRan transferred its interest in the contract with respondent to a limited partnership, FMP Operating Company (FMPO), for business reasons unrelated to the instant litigation. FMPO’s limited partners included citizens of Kansas and Colorado. Accordingly, before trial commenced, petitioners sought leave to amend their complaint to substitute FMPO as a plaintiff under Rule 25(c) of the Federal Rules of Civil Procedure. The District Court permitted petitioners to add FMPO as a party but did not remove McMoRan as a party. After a bench trial, the District Court held in favor of petitioners, and respondent appealed. The Court of Appeals reversed and directed that the suit be dismissed for want of jurisdiction. The court held that “although complete diversity was present when the complaint was filed,” the addition of FMPO as a plaintiff destroyed jurisdiction. 907 F. 2d 1022, 1024 (1990). The court based its holding upon our decision in Carden v. Arkoma Associates, 494 U. S. 185 (1990). The court explained that “Carden establishes that [FMPO’s] addition as the real party in interest destroys the district court’s diversity jurisdiction.” 907 F. 2d, at 1025.
Our decision last Term in Carden considered whether the citizenship of limited partners must be taken into account in determining whether diversity jurisdiction exists in an action brought by a limited partnership. The original plaintiff in Carden was the limited partnership; diversity jurisdiction, then, depended upon whether complete diversity of citizenship existed at the time the action was commenced. But nothing in Carden suggests any change in the well-established rule that diversity of citizenship is assessed at the time the action is filed. We have consistently held that if jurisdiction exists at the time an action is commenced, such jurisdiction may not be divested by subsequent events. Mollan v. Torrance, 9 Wheat. 537 (1824); Clarke v. Mathewson, 12 Pet. 164, 171 (1838); Wichita Railroad & Light Co. v. Public Util. Comm’n of Kansas, 260 U. S. 48, 54 (1922) (“Jurisdiction once acquired ... is not divested by a subsequent change in the citizenship of the parties. Much less is such jurisdiction defeated by the intervention, by leave of the court, of a party whose presence is not essential to a decision of the controversy between the original parties” (citations omitted)).
The opinions of the District Court and the Court of Appeals establish that the plaintiffs and defendant were diverse at the time the breach-of-contract action arose and at the time that federal proceedings commenced. The opinions also confirm that FMPO was not an “indispensable” party at the time the complaint was filed; in fact, it had no interest whatsoever in the outcome of the litigation until sometime after suit was commenced. Our cases require no more than this. Diversity jurisdiction, once established, is not defeated by the addition of a nondiverse party to the action. A contrary rule could well have the effect of deterring normal business transactions during the pendency of what might be lengthy litigation. Such a rule is not in any way required to accomplish the purposes of diversity jurisdiction.
Respondent relies on our decision in Owen Equipment & Erection Co. v. Kroger, 437 U. S. 365 (1978), to support the result reached by the Court of Appeals. There we held that the ancillary jurisdiction of a District Court did not extend to the entertaining of a claim by an original plaintiff in a diversity action against a nondiverse third-party defendant im-pleaded by the original defendant pursuant to Federal Rule of Civil Procedure 14(a). Owen casts no doubt on the principle established by the cases previously cited that diversity jurisdiction is to be assessed at the time the lawsuit is commenced.
The motion of American Mining Congress for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is granted, and the judgment of the Court of Appeals is
Reversed.
Justice Souter took no part in the consideration or decision of this motion and case.
Question: What is the issue of the decision?
01. comity: civil rights
02. comity: criminal procedure
03. comity: First Amendment
04. comity: habeas corpus
05. comity: military
06. comity: obscenity
07. comity: privacy
08. comity: miscellaneous
09. comity primarily removal cases, civil procedure (cf. comity, criminal and First Amendment); deference to foreign judicial tribunals
10. assessment of costs or damages: as part of a court order
11. Federal Rules of Civil Procedure including Supreme Court Rules, application of the Federal Rules of Evidence, Federal Rules of Appellate Procedure in civil litigation, Circuit Court Rules, and state rules and admiralty rules
12. judicial review of administrative agency's or administrative official's actions and procedures
13. mootness (cf. standing to sue: live dispute)
14. venue
15. no merits: writ improvidently granted
16. no merits: dismissed or affirmed for want of a substantial or properly presented federal question, or a nonsuit
17. no merits: dismissed or affirmed for want of jurisdiction (cf. judicial administration: Supreme Court jurisdiction or authority on appeal from federal district courts or courts of appeals)
18. no merits: adequate non-federal grounds for decision
19. no merits: remand to determine basis of state or federal court decision (cf. judicial administration: state law)
20. no merits: miscellaneous
21. standing to sue: adversary parties
22. standing to sue: direct injury
23. standing to sue: legal injury
24. standing to sue: personal injury
25. standing to sue: justiciable question
26. standing to sue: live dispute
27. standing to sue: parens patriae standing
28. standing to sue: statutory standing
29. standing to sue: private or implied cause of action
30. standing to sue: taxpayer's suit
31. standing to sue: miscellaneous
32. judicial administration: jurisdiction or authority of federal district courts or territorial courts
33. judicial administration: jurisdiction or authority of federal courts of appeals
34. judicial administration: Supreme Court jurisdiction or authority on appeal or writ of error, from federal district courts or courts of appeals (cf. 753)
35. judicial administration: Supreme Court jurisdiction or authority on appeal or writ of error, from highest state court
36. judicial administration: jurisdiction or authority of the Court of Claims
37. judicial administration: Supreme Court's original jurisdiction
38. judicial administration: review of non-final order
39. judicial administration: change in state law (cf. no merits: remand to determine basis of state court decision)
40. judicial administration: federal question (cf. no merits: dismissed for want of a substantial or properly presented federal question)
41. judicial administration: ancillary or pendent jurisdiction
42. judicial administration: extraordinary relief (e.g., mandamus, injunction)
43. judicial administration: certification (cf. objection to reason for denial of certiorari or appeal)
44. judicial administration: resolution of circuit conflict, or conflict between or among other courts
45. judicial administration: objection to reason for denial of certiorari or appeal
46. judicial administration: collateral estoppel or res judicata
47. judicial administration: interpleader
48. judicial administration: untimely filing
49. judicial administration: Act of State doctrine
50. judicial administration: miscellaneous
51. Supreme Court's certiorari, writ of error, or appeals jurisdiction
52. miscellaneous judicial power, especially diversity jurisdiction
Answer:
|
songer_respond1_7_2
|
B
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine the gender of this litigant. Use names to classify the party's sex only if there is little ambiguity (e.g., the sex of "Chris" should be coded as "not ascertained").
James Franklin REEVES, Appellee, v. Amos E. REED, Appellant.
No. 78-6278.
United States Court of Appeals, Fourth Circuit.
Argued Jan. 11, 1979.
Decided April 19, 1979.
Joan H. Byers, Associate Atty. Gen. (Rufus L. Edmisten, Atty. Gen. of North Carolina, Richard N. League, Asst. Atty. Gen., Raleigh, N. C., on brief), for appellant.
Norman B. Smith, Greensboro, N. C. (Smith, Patterson, Follín, Curtis, James & Harkavy, Greensboro, N. C., on brief), for appellee.
Before HAYNSWORTH, Chief Judge, and WIDENER and HALL, Circuit Judges.
PER CURIAM:
Reeves successfully attacked his 1976 conviction for voluntary manslaughter in a ha-beas corpus proceeding before the district court. The court found that defective jury instructions at trial improperly placed the burden of proof upon Reeves, depriving him of due process. 452 F.Supp. 783 (W.D.N.C. 1978). The court granted relief and ordered a new trial. We reverse, for we think the jury charge, when viewed in its entirety, correctly and adequately placed the burden of proof upon the state and not upon defendant Reeves.
I.
Reeves shot and killed Billy Edward Chasteen during the early morning hours of December 3, 1974. The two men, with several other friends, were playing cards at a home owned by Reeves. Chasteen was apparently in an unusually combative and disagreeable mood that night, although there was no evidence of ill feelings between Reeves and Chasteen prior to the shooting. Chasteen argued with Robert Johnson early in the evening, and later assaulted Johnson, cutting him on the neck with a razor.
In addition to his razor, Chasteen had a loaded shotgun at the party. He had brought the weapon inside the house because he could not lock it in his car. For no apparent reason, at around 3:00 a. m., Chasteen seized the shotgun and ordered the people present to lie upon the floor. Chasteen told his companion, Warren, to hold the gun on the group because he intended to cut their throats with the razor. Johnson immediately charged Chasteen with a chair, hitting him in the chest with its legs. Chasteen retaliated by clubbing Johnson over the head with the shotgun barrel, inflicting a large wound and dazing Johnson. After fighting Johnson, Chasteen was shot by Reeves with a .38 caliber pistol from close range. According to the state’s evidence, Chasteen dropped his shotgun during, or immediately after, the fight with Johnson, and was unarmed when killed by Reeves. According to Reeves, Chasteen turned the gun on him after beating off Johnson and started to attack when he fired in self-defense. Police officers found Chasteen holding the shotgun.
In 1976 the state brought Reeves to trial on charges of second degree murder. N.C. Gen.Stat. § 14-17. At the conclusion of the trial, the judge charged the jury concerning both second-degree murder and voluntary manslaughter. The jury convicted Reeves of the lesser offense of voluntary manslaughter, N.C.Gen.Stat. § 14-18, and he received the maximum sentence of twenty years imprisonment. In defining the two crimes for the jury, the judge gave the following instruction:
If the State proves beyond a reasonable doubt or it is admitted that the defendant intentionally killed Billy Edward Chasteen with a deadly weapon, or intentionally inflicted a wound upon Billy Edward Chasteen with a deadly weapon, which proximately caused his death, then if no other evidence is presented, the law implies first, that the killing was unlawful and second, that it was done with malice and if nothing else appears, the defendant would be guilty of second degree murder.
Reeves gained habeas relief based upon this instruction. Reeves argued the charge denied him due process because it told the jury that despite the evidence of self-defense, an implication or presumption arose from the shooting of Chasteen that the killing was unlawful, thus placing the burden of proof upon him to negate the presumption and prove self-defense. Because unlawfulness is a necessary ingredient of voluntary manslaughter under North Carolina law, Reeves claimed the charge and its presumption violated the rule of Mullaney v. Wilbur, 421 U.S. 684, 95 S.Ct. 1881, 44 L.Ed.2d 508 (1975), that the state must prove every fact necessary to constitute the crime. Reeves also claimed the presumption violated due process and that a presumed legal fact, here unlawfulness, must be proved beyond a reasonable doubt to follow from an admitted fact, here the intentional wounding of Chasteen with a deadly weapon, to withstand constitutional analysis. The district court agreed with Reeves that the charge placed an illegal burden upon him to disprove unlawfulness, and granted a new trial based upon both grounds.
II.
In reviewing the charge given at Reeves’ trial, we must apply the settled rule “[that] ‘a single instruction to a jury may not be judged in artificial isolation, but must be viewed in the context of the overall charge.’ ” United States v. Park, 421 U.S. 658, 674, 95 S.Ct. 1903, 1912, 44 L.Ed.2d 489 (1975); Cupp v. Naughten, 414 U.S. 141, 147, 94 S.Ct. 396, 400, 38 L.Ed.2d 368 (1973); see Henderson v. Kibbe, 431 U.S. 145,152 & n. 10, 97 S.Ct. 1730, 52 L.Ed.2d 203 (1977); Boyd v. United States, 271 U.S. 104, 107, 46 S.Ct. 442, 70 L.Ed. 857 (1926). Thus we must evaluate the charge in its entirety to determine if an error is present. The issue for determination on habeas is “whether the ailing instruction by itself so infected the entire trial that the resulting conviction violates due process.” Cupp v. Naughten, supra; see Chance v. Garrison, 537 F.2d 1212, 1215 (4th Cir. 1976); Grundler v. North Carolina, 283 F.2d 798, 802 (4th Cir. 1960). These tests apply with equal force to Mullaney challenges such as Reeves’, where the inmate seeks to overturn his conviction by claiming the jury instructions improperly shifted the state’s burden of proof in violation of due process. E. g., Berrier v. Egeler, 583 F.2d 515, 518 (6th Cir. 1978); Halloweli v. Keve, 555 F.2d 103, 109-11 (3d Cir. 1977); United States ex rel. Castro v. Regan, 525 F.2d 1157, 1159 (3d Cir. 1975); Gagne v. Meachum, 460 F.Supp. 1213, 1217-18 (D.Mass.1978); Warlitner v. Weatherholtz, 447 F.Supp. 82, 86 (W.D.Va. 1977); see Porter v. Leeke, 457 F.Supp. 253, 258 (D.S.C.1978).
After careful review of the complete charge, we conclude that the trial judge’s instructions adequately explained the law of voluntary manslaughter and did not violate Reeves’ rights. The judge began by stating the function of the jury in the case and by defining the reasonable doubt standard. After summarizing the evidence, the judge defined the elements of second-degree murder and voluntary manslaughter. This discussion contains the challenged part of the charge. But the charge did not end there, and the judge proceeded to explain the defenses of provocation and self-defense. Regarding self-defense, the judge stated that “the burden, members of the jury, is on the State to prove beyond a reasonable doubt that the defendant did not act in self-defense.” (A. 19). In subsequent portions of the charge, the judge instructed that the state had to prove beyond a reasonable doubt the lack of justification or excuse to gain a conviction for voluntary manslaughter. (A. 20), In a supplemental charge delivered after the jury had started deliberation, the court again explained that self-defense would completely excuse Chasteen’s killing and that the state had to prove lack of self-defense to convict Reeves of voluntary manslaughter. (A. 22, 23, 24, 25).
The constitutional issues addressed below are not presented for adjudication in this case, because the charge as a whole was fair. The instructions repeatedly informed the jurors that to convict, the state must prove beyond a reasonable doubt that the killing of Chasteen was unlawful, meaning that Reeves did not kill in self-defense. Although the challenged portion of the charge might have been more precise, we do not think it placed the burden of proof upon Reeves to dispel a presumption of unlawfulness. The complete instruction adequately stated the applicable law, informed the jurors of the elements North Carolina had to establish to convict Reeves and placed no burden of persuasion on the defendant.
Because we find no constitutional infirmity in the charge, the judgment of the district court is reversed.
REVERSED.
. This segment of the charge is reprinted in 452 F.Supp. at 785.
. “Under our system of justice, when a defendant pleads not guilty he is not required to prove his innocence. He is presumed to be innocent. The State must prove to you, the Jury, that the defendant is guilty beyond a reasonable doubt. A reasonable doubt is a doubt based on reason and common sense arising out of some or all of the evidence that has been presented or a lack or insufficiency of the evidence as the case may be. Proof beyond a reasonable doubt is proof that fully satisfies or entirely convinces you, the Jury, of the defendant’s guilt.”
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". What is the gender of this litigant?Use names to classify the party's sex only if there is little ambiguity.
A. not ascertained
B. male - indication in opinion (e.g., use of masculine pronoun)
C. male - assumed because of name
D. female - indication in opinion of gender
E. female - assumed because of name
Answer:
|
songer_district
|
G
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify which district in the state the case came from. If the case did not come from a federal district court, answer "not applicable".
McWHORTER v. UNITED STATES.
No. 13693.
United States Court of Appeals Fifth Circuit.
Jan. 31, 1952.
W. L. Longshore, Birmingham, Ala., for appellant.
George Huddleston, Jr., Asst. U. S. Atty., John D. Hill, U. S. Atty., Birmingham Ala., for appellee.
Before HOLMES, BORAH, and STRUM, Circuit Judges.
BORAH, Circuit Judge.
This Í9 an appeal from a conviction for perjury. The indictment charged that on or about October 12, 1950, the defendant, Lola Mildred McWhorter, was duly sworn as a witness before the United States 'Commissioner for the Northern District of Alabama in a case involving a violation of Title 18, Section 2421, United States Code, and willfully, falsely and knowingly gave testimony material to the issues involved therein, namely, whether one Joseph Ralph Morrow had transported the defendant in interstate commerce for the purpose of prostitution. The indictment set forth that in the course of her testimony before the Commissioner she swore that she had entered into an agreement with Morrow to travel with him from Arab, Alabama to Chattanooga, Tennessee for the purpose of engaging in prostitution in Tennessee; that upon their arrival in Tennessee Morrow made arrangements for her to practice prostitution; and that she did so on one occasion. The indictment further charged that at the time the defendant gave this testimony before the United States Commissioner she knew it was false and perjurious and did not believe it to be true.
At the trial L. D. Redden, an Assistant United States Attorney, testified that he was present at the preliminary hearing before the 'Commissioner when the defendant was sworn as a witness and that she gave testimony on that occasion as set forth in the indictment. Redden further stated that tlie defendant appeared as a witness before the United States Grand Jury in April 1951, which was then inquiring into a complaint which charged Morrow with transporting the defendant in interstate commerce for the purpose of prostitution, and that she then swore that she had travelled from Alabama to Tennessee with Morrow on one occasion but that it was not the understanding or agreement between them that she would engage in acts of prostitution and that she did not practice prostitution on this trip. Whereupon she was asked whether she recalled giving testimony to the contrary before the United States Commissioner and she answered that she did recall her previous testimony under oath but that it was false and untrue. A special agent of the Federal Bureau of Investigation was called as a government witness at the perjury trial and swore that he was also present at the preliminary hearing before the United States Commissioner. In so far as here material, this witness merely corroborated Redden as to the defendant’s testimony before the 'Commissioner. The only other witness offered by the prosecution was a member of the Grand Jury who corroborated Redden as to the statements made by defendant at its investigation.
At the close of the government’s case the defendant moved for a judgment of acquittal. The motion was overruled and defendant declined to offer any evidence.
The important question presented by this appeal is whether the trial judge erred in overruling the motion for judgment of acquittal.
It is the general rule that to authorize a conviction for perjury the falsity of the statement alleged to have been made by the defendant must be established eithex by the testimony of two independent witnesses, or by one witness and independexit corroborating evidence which is inconsistent with the innocence of the accused. United States v. Wood, 14 Pet. 430, 39 U.S. 430, 10 L.Ed. 527; Hammer v. United States, 271 U.S. 620, 46 S.Ct. 603, 70 L.Ed. 1118; Weiler v. United States, 323 U.S. 606, 65 S.Ct. 548, 89 L.Ed. 495; Cook v. United States, 26 App.D.C. 427; Allen v. United States, 4 Cir., 194 F. 664, 39 L.R.A.,N.S., 385; United States v. Buckner, 2 Cir., 118 F.2d 468.
It is also generally held by the courts, in cases where the defendant has by opposite oaths affirmed and denied the same fact, that mere proof of the defendant’s contradictory sworn statements without more is not sufficient to sustain a conviction for perjury. United States v. Wood, supra, 14 Pet. at pages 438, 441-442, 10 L.Ed. 527; Weiler v. United States, supra; United States v. Mayer, Fed.Cas.No. 15753; Phair v. United States, 3 Cir., 60 F.2d 953; Schwartz v. Commonwealth, 1876, 27 Grat., Va., 1025; State v. Burns, 120 S.C. 523, 113 S.E. 351, 25 A.L.R. 414; Williams v. State, 34 Ala.App. 462, 41 So.2d 605; Shoemaker v. State, 29 Okl.Cr. 184, 233 P. 489; Billingsley v. State, 49 Tex.Cr.R. 620, 95 S.W. 520; Smith v. Commonwealth, 180 Ky. 240, 202 S.W. 635, L.R.A.1918E, 927.
A third situation which has given the courts some concern is- where, as here, the subsequent inconsistent or contradictory testimony is accompanied by an admission that the testimony previously given was false. In People v. Burden, 1850, 9 Barb., N.Y., 467, the defendant had made two contradictory statements under oath and in the second he had expressly acknowledged the intentional falsity of the first, and it was held that this acknowledgment was sufficient to establish the perjury of the first without further evidence. However, practically all of the authorities which have had occasion to consider the question have refused to follow People v. Burden, and have held that an admission in the second statement of the falsity of the first will not take the case out of the general rule that a conviction for perjury cannot rest upon the defendant’s contradictory statements alone. Schwartz v. Commonwealth, 27 Grat., Va., 1025; State v. Burns, 120 S.C. 523, 113 S.E. 351, 25 A.L.R. 414; Williams v. State, 34 Ala.App. 462, 41 So.2d 605; Blakemore v. State, 39 Okl.Cr. 355, 265 P. 152.
What we have just said is not to be confused with the situation which arises where the defendant takes the stand in the perjury trial and formally recants and asserts under oath the falsity of his prior testimony. In this factual situation the defendant’s acts and testimony are to all intents and purposes the same as a plea of guilty to the indictment. United States v. Buckner, 2 Cir., 118 F.2d 468, 469. In the Buckner case the defendant gave testimony before the grand jury that she observed two officers enter certain premises and did not see them leave. As a result of this testimony the police officers were indicted and at their trial the defendant testified that she did not see the officers enter the house and that her testimony before the grand jury was false. Thereafter she was indicted for perjury and at the trial she took the stand in her own behalf and admitted that her testimony before the grand jury had been absolutely false. In its consideration of the case, the court said, “It may be that the proof at the close of the government’s case would have been insufficient to justify the verdict of guilty, for the reason that defendant’s admission of guilt was given in another action but when she took the stand at the trial for perjury formally recanted and asserted under oath the falsity of her prior testimony, any further proof was surely unnecessary. Her acts and testimony had become the practical equivalent of a plea of guilty.”
We are squarely presented with the fact situation which the court in the Buckner case indicated might not be sufficient to sustain a conviction for, here the defendant’s admission of the falsity of her prior statement before the Commissioner was made before the Grand Jury and she did not testify at the perjury trail. After mature consideration we have reached the conclusion that the weight of authority and good reasoning support the view that an admission in the second statement of the falsity of the first does not serve to take the case out of the general rule that a conviction for perjury cannot rest merely upon the defendant’s contradictory statements under oath. The reason being that it is impossible to tell which statement is true and which statement is false. Certain it is that the confirmatory evidence may not be supplied by the defendant’s admission of the falsity of the first oath for the obvious reason that the admission itself may be false. Whenever a witness deliberately asserts a ' fact to be true to his knowledge and thereafter deliberately asserts the opposite of the fact as true to his knowledge, assuming that there is no question of innocent mistake, the witness thereby indirectly but unequivocally affirms the falsity of the prior statement. The admission, therefore, adds little if anything to the sum total of evidence that is present in any case where a witness makes two contradictory statements under oath. And as we have pointed out it is the general rule in both the State and federal courts that a conviction for perjury cannot be sustained merely on the contradictory sworn statements of the defendant.
Nor does it matter how many witnesses testified at the perjury trial that, they heard the defendant make the contradictory statements for such testimony could not be the equivalent of corroborative proof of the corpus delicti of the offense charged. When the courts speak of corroborative evidence they mean evidence aliunde — evidence which tends to show the perjury independently. Here, there is nothing to establish which statement is true and which is the false, and it is a clear rule of criminal law that if the evidence on the part of the prosecution leaves it wholly uncertain whether the crime charged has been committed or not, the defendant must be acquitted. Accordingly, we are of opinion that the trial court should have granted the motion for judgment of acquittal as requested.
The judgment of conviction may not stand and is reversed.
. In the early English cases it was held that where the defendant had by opposite oaths affirmed and denied the same fact, mere proof of the defendant’s eontradictory statements was sufficient. Rex v. Knill, 5 B. & Ald. 928. But later English cases established the rule that there must ’ be such confirmatory evidence as proved the falsity of the statement alleged to have been perjured. Regina v. Wheatland, 8 Car. & P. 239, 173 English Reports (Full Reprint) 476; Regina v. Mary Hughes, 1 Car. & K. 519, 174 English Reports (Full Reprint) 919; see 2 Russell on Crimes, p. 651 et seq.
Question: From which district in the state was this case appealed?
A. Not applicable
B. Eastern
C. Western
D. Central
E. Middle
F. Southern
G. Northern
H. Whole state is one judicial district
I. Not ascertained
Answer:
|
sc_petitioner
|
021
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the petitioner of the case. The petitioner is the party who petitioned the Supreme Court to review the case. This party is variously known as the petitioner or the appellant. Characterize the petitioner as the Court's opinion identifies them.
Identify the petitioner by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the petitioner is actually single entity or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single petitioner, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
EAST CARROLL PARISH SCHOOL BOARD et al. v. MARSHALL
No. 73-861.
Argued January 21, 1976
Decided March 8, 1976
John F. Ward, Jr., argued the cause and filed a brief for petitioners.
Stanley A. Hatpin, Jr., argued the cause for respondent. With him on the brief were Jack Greenberg and Eric Schnapper.
Brian K. Landsberg argued the cause for the United States as amicus curiae. With him on the brief were Solicitor General Bork, Assistant Attorney General Pottinger, John C. Hoyle, and Jessica Dunsay Silver.
Paul R. Dimond and William E. Caldwell filed a brief for the Lawyers’ Committee for Civil Rights Under Law as amicus curiae.
Per Curiam.
The sole issue raised by this case is how compliance with the one-man, one-vote principle should be achieved in a parish (county) that is admittedly malapportioned.
Plaintiff Zimmer, a white resident of East Carroll Parish, La., brought suit in 1968 alleging that population disparities among the wards of the parish had unconstitutionally denied him the right to cast an effective vote in elections for members of the police jury and the school board. See Avery v. Midland County, 390 U. S. 474 (1968). After a hearing the District Court agreed that the wards were unevenly apportioned and adopted a reapportionment plan suggested by the East Carroll police jury calling for the at-large election of members of both the police jury and the school board. The 1969 and 1970 elections were held under this plan.
The proceedings were renewed in 1971 after the District Court, apparently sua sponte, instructed the East Carroll police jury and school board to file reapportionment plans revised in accordance with the 1970 census. In response, the jury and board resubmitted the at-large plan. Respondent Marshall was permitted to intervene on behalf of himself and all other black voters in East Carroll. Following a hearing the District Court again approved the multimember arrangement. The inter-venor appealed, contending that at-large elections would tend to dilute the black vote in violation of the Fourteenth and Fifteenth Amendments and the Voting Rights Act of 1965.
Over a dissent, a panel of the Court of Appeals affirmed, but on rehearing en banc, the court reversed. It found clearly erroneous the District Court’s ruling that at-large elections would not diminish the black voting strength of East Carroll Parish. Relying upon White v. Regester, 412 U. S. 755 (1973), it seemingly held that multimember districts were unconstitutional, unless their use would afford a minority greater opportunity for political participation, or unless the use of single-member districts would infringe protected rights.
We granted certiorari, 422 U. S. 1055 (1975), and now affirm the judgment below, but without approval of the constitutional views expressed by the Court of Appeals. See Ashwander v. TVA, 297 U. S. 288, 346-347 (1936) (Brandeis, J., concurring).
The District Court, in adopting the multimember, at-large reapportionment plan, was silent as to the relative merits of a single-member arrangement. And the Court of Appeals, inexplicably in our view, declined to consider whether the District Court erred under Connor v. Johnson, 402 U. S. 690 (1971), in endorsing a multimember plan, resting, its decision instead upon constitutional grounds. We have frequently reaffirmed the rule that when United States district courts are put to the task of fashioning reapportionment plans to supplant con-cededly invalid state legislation, single-member districts are to be preferred absent unusual circumstances. Chapman v. Meier, 420 U. S. 1, 17-19 (1976); Mahan v. Howell, 410 U. S. 315, 333 (1973); Connor v. Williams, 404 U. S. 549, 551 (1972); Connor v. Johnson, supra, at 692. As the en banc opinion of the Court of Appeals amply demonstrates, no special circumstances here dictate the use of multimember districts. Thus, we hold that in shaping remedial relief the District Court abused its discretion in not initially ordering a single-member reapportionment plan.
On this basis, the judgment is
Affirmed.
In Louisiana, the police jury is the governing body of the parish. Its authority includes construction and repair of roads, levying taxes to defray parish expenses, providing for the public health, and performing other duties related to public health and welfare. La. Rev. Stat. Ann. §33:1236 (1950 and Supp. 1975).
Prior to 1968, Louisiana law prohibited at-large elections of members of police juries and school boards. In July 1968, the Governor of Louisiana approved enabling legislation permitting the at-large election of parish police juries and school boards. La. Laws 1968, Act No. 445, codified at La. Rev. Stat. Ann. §§33:1221, 33:1224 (Supp. 1975); La. Laws 1968, Act No. 561, codified at La. Rev. Stat. Ann. §§17:71.1-17:71.6 (Supp. 1975).
Both Acts were submitted to the United States Attorney General pursuant to § 5 of the Voting Rights Act of 1965, 79 Stat. 439, as amended, 42 U. S. C. § 1973c, and both were rejected because of their discriminatory effect on Negro voters. See letters, June 26, 1969, and Sept. 10, 1969, from Jerris Leonard, Assistant Attorney General, Civil Rights Division, to Jack P. F. Gremillion, Attorney General of Louisiana. Indeed, East Carroll Parish was cited as exemplifying the dilution in black ballot strength that at-large voting may cause. Letter of Sept. 10, 1969.
The original plaintiff, Zimmer, was allowed to withdraw from the case.
Zimmer v. McKeithen, 467 F. 2d 1381 (CA5 1972).
During pendency of the appeal in the court below, the District Court purported to withdraw its order approving the at-large plan and to substitute in its stead a complex redistricting plan submitted by intervenor Marshall. The Court of Appeals vacated the order on the ground that when the appeal was filed, the District Court lost jurisdiction over the case. Id., at 1382.
Zimmer v. McKeithen, 485 F. 2d 1297 (CA5 1973).
The Government has filed an amicus brief, in which it argues that the preclearance procedures of § 5 of the Voting Rights Act of 1965, must be complied with prior to adoption by a federal district court of a reapportionment plan submitted to it on behalf of a local legislative body that is covered by the Act. This issue was not raised by the petitioners nor did respondent file a cross-petition. In any event, we agree with the Court of Appeals, Zimmer v. McKeithen, 467 F. 2d, at 1383; Zimmer v. McKeithen, 485 F. 2d, at 1302 n. 9, that court-ordered plans resulting from equitable jurisdiction over adversary proceedings are not controlled by § 5. Had the East Carroll police jury reapportioned itself on its own authority, clearance under § 5 of the Voting Rights Act would clearly have been required. Connor v. Waller, 421 U. S. 656 (1975). However, in submitting the plan to the District Court, the jury did not purport to reapportion itself in accordance with the 1968 enabling legislation, see n. 2, supra, and statutes cited therein, which permitted police juries and school boards to adopt at-large elections. App. 56. Moreover, since the Louisiana enabling legislation was opposed by the Attorney General of the United States under § 5 of the Voting Rights Act, the jury did not have the authority to reapportion itself. See n. 2, supra; Tr. of Oral Arg. 13-14, 31-32, 43-44. Since the reapportionment scheme was submitted and adopted pursuant to court order, the preclearance procedures of § 5 do not apply. Connor v. Johnson, 402 U. S. 690, 691 (1971).
Question: Who is the petitioner of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
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songer_respond1_3_2
|
I
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Your task is to determine which category of federal government agencies and activities best describes this litigant.
MATTOX et al. v. UNITED STATES.
No. 12558.
United States Court of Appeals Ninth Circuit.
Feb. 15, 1951.
Reed M. Clarke, San Francisco, Cal., for .•appellant Mattox.
Ed Dupree, Gen. Counsel, Leon J. Li-"beu, Asst. Gen. Counsel, Francis X. Riley, Sp. Litigation Atty., Office of Housing Expediter, Washington, D. C., for appellant United States.
Before STEPHENS,' HEALY, and RONE, Circuit Judges.
HEALY, Circuit Judge.
This is a suit by the United States for an •'injunction and restitution and for treble •damages under § 205 of the Housing and Rent Act of 1947, as amended, 50 U.S.C.A. Appendix, § 1895. It was filed May 9, 1949, and with the court’s permission' an ¡amended complaint was filed September 6 thereafter. Upon .trial the court found that the defendants had demanded and received from tenants amounts in the total sum of $6,761.80 in excess of the legal maximum rents. It granted an injunction and decreed restitution to tenants of the excess rentals collected, but did not award judgment for damages, single or treble, as prayed by the United States.
Both parties appealed. The defendants failed to present a' brief in support of their appeal as required by our rules, and did not participate in the oral argument, but they have since filed a belated brief setting out their contentions. We have examined it and are of opinion that none of the several points argueid has merit sufficient to justify discussion.
The cross-appeal of the United States challenges the court’s failure to award damages, single or treble, for the whole or any part of the period falling within the one year statute of limitations. The government contends (1) that allowance of damages is mandatory under ■§ 205 as amended April 1, 1949, and that recovery should have been allowed at least as to overcharges which occurred subsequent to that date; (2) that the 1949 amendment retroactively permits the United States to recover damages in the amount (or treble the amount) of the overcharges occurring prior to the effective date of the amendment and within the one year limitation period where, as here, the tenant fails to institute action; and (3) that the court was in error in finding that the violations committed by the defendants were neither willful nor the result of failure on their part to take practicable precautions.
A glance at the statutory history will be helpful. During the period beginning July 1, 1947, the effective date of the Housing and Rent Act of 1947, through March 31, 1949, it was exclusively the right of the tenant to sue under § 205 for damages for rent overcharges. The Expediter was limited to actions for injunction and restitution as his sole means of enforcing compliance. The amendment of April 1, 1949, restored the right of the United States to sue for damages. The relevant portions of § 205, as it has since existed, are shown on the margin.
From the early years of rent control this court, and the courts generally, have held that the district court upon a finding of violation must grant a judgment in damages in an amount at least equal to the amount of the overcharges. In Fontes v. Porter, 9 Cir., 156 F.2d 956, 958, we said: “Lack of willfullness, coupled with the taking of practicable precautions against the occurrence of a violation, operates only to reduce damages to the amount of the overcharge.” Consult also Woods v. Haydell, 5 Cir., 178 F.2d 914, 915. This mandatory principle is in nowise affected by a grant of restitution to the tenant. Restitution is an equitable remedy resorted to under § 206(b), independently of the award of damages. Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332; Woods v. Richman, 9 Cir., 174 F.2d 614, 616. Accordingly we are of opinion that the trial court erred in denying damages at least in the amount of the overcharges.
Two of the circuits have now held that the 1949 amendment, restoring to the United States the right to damages, is retroactive. United States v. Gianoulis, 3 Cir., 183 F.2d 378, 380; Miller v. United States, 5 Cir., 186 F.2d 937. In the first of these cases the court observed that prior to the 1949 amendment the tenant had a right of action to recover damages in treble' the amount of the overcharges, and' that after the amendment the landlord was liable to the tenant or to the United States, but not to both. “The amendment,” said the court, “created no new cause of action albeit it provided the machinery whereby, a new plaintiff, the United States, could assert the same cause of action and collect the same damages from the landlord when the tenant, within the time specified, had failed to take steps to enforce the landlord’s liability.” The amendment was thought to 'improve the legal techniques for enforcing an existing statutory remedy, this enlargement of the means of enforcement having been found necessary because the tenant, through fear of reprisal, had generally failed to bring suits to recover excess rentals. The Fifth Circuit in the case cited thought this reasoning valid and adopted it. Believing that these decisions are sound we are content to go along with them. We hold, therefore, thac the amendment should have. been applied retrospectively in this case.
The government contends that there is no evidentiary support for the finding that the violations committed were not willful nor the result of the failure to take practicable precautions. The evidence bearing on the point is certainly not strong, but we are unable to say that the finding is clearly erroneous. This being true the liquidated damages recoverable are the amount of the overcharges.
The judgment insofar as it grants restitution and injunctive relief is affirmed. Otherwise it is set aside and the cause is remanded for further proceedings Hot inconsistent with this opinion.
. “See. 205. Any person who demands, accepts, or receives any payment of rent in excess of the maximum rent prescribed under section 204 shall be liable to the person from whom he demands, accepts, or receives such payment (or shall be liable to the United States as hereinafter provided), for reasonable attorney’s fees and costs as determined by the court, plus liquidated damages in the amount of (1) $50, or (2) three times the amount by which the_ payment or payments demanded, accepted, or received exceed the maximum rent which could lawfully be demanded, accepted, or - received, whichever in either case may be the greater amount: Provided, That the amount of such liquidated damages shall be the amount of the overcharge or overcharges if the defendant proves that the violation was neither willful nor the result of failure to take practicable precautions against the occurrence of the violation. Suit to recover such amount may be brought * * * within one year after the date of such violation: Provided, That if the person from whom • such payment is demanded, accepted, or received either fails to institute an action under this section within thirty days from the date of the occurrence of the violation or is not entitled for any reason to bring the action, the United! States may institute such action within such one-year period. * * * ”
, Where restitution is decreed and statutory damages awarded, the treble damage award appears sometimes to have been reduced by the amount of the restitution required, and this seems to have been done at the instance of the rent control authorities. -See United States v. Gianoulis, 3 Cir., 183 F.2d 378; Miller v. United States, 5 Cir., 183 F.2d 937.. While this practice may be thought to-have statutory justification, we can see no possible basis in the law for deducting the restitution award where the damages found allowable are the amount of.' the overcharges, only.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "federal government (including DC)". Which category of federal government agencies and activities best describes this litigant?
A. cabinet level department
B. courts or legislative
C. agency whose first word is "federal"
D. other agency, beginning with "A" thru "E"
E. other agency, beginning with "F" thru "N"
F. other agency, beginning with "O" thru "R"
G. other agency, beginning with "S" thru "Z"
H. Distric of Columbia
I. other, not listed, not able to classify
Answer:
|
songer_r_state
|
2
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of respondents in the case that fall into the category "state governments, their agencies, and officials". If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Burns TRUSTY, Jr., Appellant, v. The STATE OF OKLAHOMA and Ray Page, Warden, State Penitentiary, Appellee.
No. 8594.
United States Court of Appeals Tenth Circuit.
May 5, 1966.
Arthur J. Movius, Denver, Colo., for appellant.
Charles L. Owens, Asst. Atty. Gen. (Charles Nesbitt, Atty. Gen., on the brief), for appellee.
Before PICKETT, HILL and SETH, Circuit Judges.
HILL, Circuit Judge.
Appellant, an inmate of the Oklahoma State Penitentiary, appeals from a denial of his petition for a writ of habeas corpus without an evidentiary hearing. There is no question about exhaustion of state remedies.
Trusty was tried and convicted, after a jury trial, in the District Court of Tulsa County, Oklahoma, for the crime of burglary in the second degree. He is now confined and serving a sentence pursuant to that conviction. Following the conviction and sentence he appealed to the Oklahoma Court of Criminal Appeals and the case was affirmed. *There he raised the same question later raised by his petition for habeas corpus in the court below. The sole question presented by the petition is the admission, during his state court trial, of certain evidence allegedly obtained by an unlawful search and seizure. The federal trial court had before it, the petition, together with an official transcript of the state court trial proceedings which was attached to the petition as an exhibit. In addition, it properly considered the reported opinion of the Oklahoma Court of Criminal Appeals in the case. Thus the admonition of this court, as to the duty of a federal court under such circumstances, was adhered to.
The facts as recited in Trusty v. State of Oklahoma, supra, are in substance as follows: Because of numerous recent burglaries in the vicinity of the 4400 block of East 38th Place in Tulsa, Oklahoma, Officer Burris was assigned to patrol the area. After dark, on the night in question, while driving his patrol car in the area, he observed Trusty walking west on East 38th Place carrying an object which resembled a crowbar. Burris recognized Trusty as an ex-convict and knew that he did not live in that part of the city. At the same time, Burris observed two other men whom he recognized as “police characters”, walking in the same direction as Trusty but on the opposite side of the street. Burris also noticed a vehicle parked at the curb about one-half block away. He drove his car to a point beyond this car and parked to observe the three men. They walked to the car, got into it and drove toward Burris. Because of his knowledge about the three men, Burris decided to stop the car and question tfie occupants. He did stop them as the ear approached and asked them to get out of the car. Trusty got out from the driver’s seat but the other two remained in the car. He asked the two again to get out and he noticed, as they did, one of them stoop down on the side of the car away from where Burris was standing. A second patrol car then arrived and the three men were searched for weapons. Burris then proceeded around the ear to examine the place where the man stooped down. There he found a credit card in the name of Frank Newell, 3504 South Toledo Place, bank identification papers belonging to the same man and a gold watch. The officers then radioed their dispatcher this information, another patrol car was dispatched to the Newell address and it was discovered that the home had been burglarized. After receiving this information the officers placed the three men under arrest and searched the car, finding a crowbar, two pairs of gloves, a flashlight and a ring of keys. The three men were taken to the police station and the prosecution followed. After reading the transcript from the state court, we agree that the findings of the Oklahoma Court of Criminal Appeals are supported by that record.
The Oklahoma Court of Criminal Appeals on the basis of the foregoing facts and the law of Oklahoma, concluded that at the time of the arrest, the arresting officers had reasonable grounds to believe a felony had been committed, that Trusty had committed the felony and that the search of the ear, as incident to the arrest, was a lawful one., It is the law of Oklahoma that a peace officer may stop any person at night for the purpose of making reasonable inquiry when from his observation or otherwise gained knowledge, circumstances are created which reasonably suggest that a crime has been or is about to be committed.
Appellant urges that the court below should have granted him an evidentiary hearing and then granted the writ. The question raised by the petition for the writ is certainly one cognizable by a federal court, but that does not necessarily mean the petitioner is entitled to an evidentiary hearing. In Townsend v. Sain, 372 U.S. 293, 83 S.Ct. 745, 9 L.Ed.2d 770, the Court, in considering the necessity for an evidentiary hearing upon a state prisoner’s petition for a writ of habeas corpus, said, “Where the facts are in dispute, the federal court in habeas corpus must hold an evidentiary hearing if the habeas applicant did not receive a full and fair evidentiary hearing in a state court, either at the time of the trial or in a collateral proceeding. In other words a federal evidentiary hearing is required unless the state-court trier of fact has after a full hearing reliably found the relevant facts.”
In this case, at the state court trial level, the accused prior to trial, filed his motion to suppress evidence and an evi-dentiary hearing was had before the trial judge and the motion to suppress was denied. After the conviction and sentence a direct appeal was taken to the highest court of the state with jurisdiction of the subject matter. That court, the Oklahoma Court of Criminal Appeals, with a transcript of the entire record from the trial court, including the evidence adduced at the hearing on the motion to suppress, wrote a formal opinion containing a recitation of the facts as revealed by the record and affirmed the trial court in all respects.
It is significant that in the state court hearing upon the motion to suppress that the movant used only the testimony of the arresting officer, therefore, there is no conflict in the trial record as to the facts and circumstances of the arrest and search. The Oklahoma Court of Criminal Appeals was not put in the position of weighing the evidence in its recitation of the facts, it obtained those facts from an uncontradicted source.
We must conclude that none of the circumstances enumerated in Townsend v. Sain, supra, requiring a federal court evidentiary hearing are present in this case. In addition we believe the court below acted judiciously in considering the petition, the state trial court transcript, and the reported opinion of the Oklahoma Court of Criminal Appeals, which is the highest state court with jurisdiction, and thereafter denied the writ. As was the trial court, we are convinced the state process gave appellant’s contentions and evidence fair consideration and resulted in a satisfactory result.
Affirmed.
. Trusty v. State of Oklahoma, 395 P.2d 350.
. See Sobota v. Cox, 10th Cir., 355 F.2d 368; Hurt v. Page, 10th Cir., 355 F.2d 169; Cordova v. Cox, 10th Cir., 351 F. 2d 269.
. 22 O.S.1961, § 196, § 198; State v. Chronister, Okl.Cr., 353 P.2d 493.
. State v. Chronister, supra.
. The Court in that case set out particular circumstances requiring a federal court evidentiary hearing as follows:
“If (1) the merits of the factual dispute were not resolved in the state hearing; (2) the state factual determination is not fairly supported by the record as a whole; (3) the fact-finding procedure employed by the state court was not adequate to afford a full and fair hearing; (4) there is a substantial allegation of newly discovered evidence; (5) the material facts were not adequately developed at the state-court hearing; or (6) for any reason it appears that the state trier of fact did not afford the habeas applicant a full and fair fact hearing.”
Question: What is the total number of respondents in the case that fall into the category "state governments, their agencies, and officials"? Answer with a number.
Answer:
|
songer_adminrev
|
J
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify the federal agency (if any) whose decision was reviewed by the court of appeals. If there was no prior agency action, choose "not applicable".
NATIONAL LABOR RELATIONS BOARD, Petitioner, v. ADVANCED BUSINESS FORMS CORPORATION, Respondent.
No. 145, Docket 72-1332.
United States Court of Appeals, Second Circuit.
Argued Nov. 9, 1972.
Decided Jan. 3, 1973.
Bertram T. Kupsinel, Atty., NLRB, Washington, D. C. (Peter G. Nash, Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Robert A. Giannasi and Alan D. Cirker, Attys., NLRB, Washington, D. C., on the brief), for petitioner.
Alfred T. DeMaria, New York City (Kirlin, Campbell & Keating, -New York City, on the brief), for respondent.
Before FRIENDLY; Chief Judge, MANSFIELD and TIMBERS, Circuit Judges.
TIMBERS, Circuit Judge:
This petition to enforce an order of the National Labor Relations Board, 194 N.L.R.B. No. 52 (1971), is another instance where the Board’s order in large measure is not challenged. Of the numerous provisions of the trial examiner’s recommended order of August 17, 1971, adopted by the Board on November 24. 1971, less than 20% are challenged by the Company in the proceedings on the instant petition by the Board to enforce its order.
The petition before us presents only-two essential issues by virtue of the Company’s limited challenge of the Board’s order:
(1) Whether there was substantial evidence to support the Board’s determination that the Company violated Section 8(a)(3) of the Act in discharging employee Barbara Fasano because of her union activities.
(2) Whether there was substantial evidence to support the Board’s determination that the Company violated Section 8(a)(5) of the Act in failing to bargain collectively in good faith with the Union.
For the reasons stated below, we hold that there was substantial evidence to support the Board’s determination on issue (1), but not on issue (2). We enforce the Board’s order in all respects, except that we deny enforcement as to those provisions of the order dependent upon the Board’s finding of a violation of Section 8(a) (5).
I.
The essential facts as found by the trial examiner may be summarized as follows.
The Company, a New York corporation, operates a small printing plant at Ronkonkoma, New York. It is engaged in the printing, sale and distribution of business forms and related products. Prior to early February 1971, its president was James Orrach. It is a wholly owned subsidiary of Retrieval Control Systems, the president of which is John Montague.
One department of the Company — the pressroom and preparatory department (referred to together as the prep department) — is at the center of this controversy. This department does the art work and photography for the Company, and makes the plates that are run on the presses. The size of the department fluctuates between 11 and 14 employees.
Prior to September 1970, the prep department did not have union representation. Two department employees, who apparently were angry with management, arranged for a meeting on September 12 with Julius Seide, a business representative of the Union. Nine prep department employees attended the meeting. Some of them signed union bargaining authorization cards.
On September 16, Seide filed with the Board’s regional office a petition for certification as the bargaining representative of the employees of the Company’s prep department. A copy of the petition was served on the Company on September 18. That same day, four pressmen — Walter Yarosz, Eugene Sannuto, Joseph Kirklewski, and Carl Pis-cani — were laid off. All four had attended the September 12 meeting and had signed union authorization cards. Arthur Kunzweiler, supervisor of the prep department, participated in the decision to lay off the men. At the hearing he admitted being aware at the time of the discharge that the four men were union sympathizers.
On October 13, Seide and President Orrach entered into an Agreement for Consent Election which provided that the Board’s regional director would conduct an election on November 4 among the prep department employees. In the afternoon of October 13, Orrach called a meeting of all prep department employees. At the meeting, he stated that the Company did not really want the Union, “that he thought they had a pretty good company, they had pretty good benefits, and if anybody had any gripes they should have come to him and discussed them.” Similar statements were made at another meeting called by Orrach on October 30, five days before the election.
As the election approached, the Company’s tactics in opposition to the Union became more questionable. On November 2, Orrach and Kunzweiler threatened employee George Najdek as he was operating one of the presses. While checking the operation of Najdek’s press, which apparently was not functioning properly, Orrach told Najdek that “[i]f the Union gets in, I will have to lay you off.” Orrach also reminded Najdek to attend a Union meeting scheduled for that evening. Seide conducted the scheduled Union meeting that evening at a local tavern. While it was in progress, Or-rach entered and sat at the bar. After a short while, Seide approached Orrach and spoke to him briefly. Shortly thereafter Orrach left the premises. The next day, Orrach talked with Kunzweiler on the plant floor in the prep department within the hearing of Najdek and another employee, Barbara Fasano. In the course of the conversation, Orrach stated that “[ajnyone seen at the meeting last night won’t be here for long.” After making the statement, Orrach turned and grinned in Fasano’s direction, indicating that the remark applied to her.
The election was held as scheduled on November 4. It resulted in 7 votes for the Union, 3 against, and 1 challenged ballot. That evening after work several employees celebrated the Union victory at a local bar. Orrach entered the bar and insulted the celebrants. He then approached Fasano and asked her why she had voted for the Union. When Fasano replied that she believed that it was right, Orrach argued with her, asking, “What did you think you would benefit out of it?” and, “If you want more pay, why didn’t you ask me ? How much do you want? Fifty dollars?” At a later date; November 16, Orrach remarked to two other employees that he would “get rid of the people one by one, all the people that try to hurt him and all the people that voted for the Union.”
On November 6, the Company instituted several changes which adversely affected the working conditions of the employees. These changes were made without notification to or bargaining with the Union. On the same day, Naj-dek was laid off. On November 11, eight employees, including Fasano, called in sick to protest Naj dek’s discharge. When Fasano returned to work the next day, Kunzweiler made sarcastic comments about her absence. On November 20, Fasano was discharged. The circumstances surrounding her discharge will be discussed more fully below.
On November 19, the Company and the Union began negotiations for a collective bargaining agreement. At the outset, Company negotiators Orrach and Ralph Bartell informed Union negotiator Seide that any agreements reached would have to be ratified by John Montague, president of the parent company. A form of association contract used by Printing Industries of Metropolitan New York, Inc. served as the basic framework from which the parties negotiated. At bargaining sessions held on December 2, 22 and 28, and January 28, 1971, the parties discussed and reached tentative agreement on most of the economic terms such as wage increases. At the December 28 meeting, the Company requested a maintenance-of-membership clause in lieu of the union security clause contained in the standard association contract. This became the main point in dispute between the parties; the Union insisted on the union security clause and the Company was firmly opposed to it.
Prior to the next bargaining session on March 12, 1971, Orrach was relieved of his duties as president of the Company. Montague replaced him in the negotiations. Montague apparently had been kept informed of the progress of the negotiations. The parties met again on April 8 and 16. At the April 16 meeting, Seide proposed a compromise union security plan. Montague wanted to reject the compromise immediately. At Bartell’s suggestion, however, they requested time to consider the compromise plan.
On April 21, Bartell called Seide and told him, “We have a contract. We got to get together and work out all of the details.” Seide and Bartell met on April 23 and drew up a handwritten document setting forth all the tentative agreements theretofore reached, as well as the compromise union security provision as proposed by the Union. They arranged to meet with Montague on April 27 to review and to sign the contract. When Seide arrived at Bartell’s office on April 27 for the scheduled meeting, Bartell informed him that he had just received a telephone call from Montague who had stated that he would not sign “any contract”.
On April 30, Seide informed several employees that Montague had refused to sign a contract. Seide concluded that they had no alternative but to strike. On May 3, an undisclosed number of employees did go on strike. On May 14, while the strike was in progress, the parties, at the request of the Suffolk County Labor Commissioner, met at the Commissioner’s office for further negotiations. After some persuading by the Commissioner, Seide renewed the compromise union security proposal in order to get a signed contract. Montague consulted with his employees and informed the Union that he would not agree to the compromise proposal. For aught that appears in the record before us, no collective bargaining agreement was ever signed.
An evidentiary hearing was held before a trial examiner at Brooklyn, New York, on May 17 and 18,1971. The hearing resulted from various charges filed by the Union and certain employees against the Company during the period from November 23, 1970 to February 22, 1971, followed by the filing of various pleadings which in turn were consolidated and amended from time to time through the hearing itself.
On August 17,1971, the examiner filed his decision which included findings of fact, conclusions of law and a recommended order. He found that the Company had violated § 8(a)(1) of the Act by threatening employees with discharge or other reprisals because of their union activities, coercively questioning employees concerning their union sympathies, and engaging in surveillance of employee union activity; that the Company had violated § 8(a)(3) and (1) of the Act by discharging employees Yarosz, Kirklewski and Sannuto on September 18, Najdek on November 6, and Fasano on November 20 because of their union activities, and by instituting adverse changes in working conditions after the union election in retaliation against the employees voting for the Union; that the Company had violated § 8(a) (5) and (1) of the Act by unilaterally instituting adverse changes in employment conditions and by its conduct in the collective bargaining process of repudiating on April 27 all agreements reached by the parties through several months of bargaining; and, finally, that the May 3 strike was caused by the Company’s refusal to bargain in good faith and its other unfair labor practices.
On November 24, 1971, the Board filed its decision and order, 194 N.L.R.B. No. 52, which affirmed the rulings, findings and conclusions of the trial examiner and adopted his recommended order. The order required the Company to cease and desist from the unlawful conduct found and from in any other manner discriminating against employees or interfering with, restraining or coercing them in the exercise of their statutorily protected rights. The order affirmatively required the Company to offer reinstatement to the discriminatorily discharged employees and to make them whole; upon application, to offer full reinstatement to the employees who struck on May 3, 1971, and to make them whole; upon request, to bargain collectively with the Union in good faith; to restore any of the employment conditions which were unlawfully changed after the election; and to post appropriate notices.
In view of the substantiality of the supporting evidence, the Company understandably did not take exceptions to the examiner’s findings, and of course does not challenge the Board’s determinations, that the Company violated § 8(a)(1) by threatening and coercively questioning employees, and by surveilling their union activity; that it violated § 8(a) (3) and (1) by discharging ■ employees Yarosz, Kirklewski, Sannuto and Najdek, and by making adverse changes in working conditions after the election; or that it violated § 8(a)(5) by making adverse changes in the employee’s working conditions without consulting the Union.
The Company’s efforts coercively to discourage its employees from voting for the Union were numerous and flagrant, and were amply supported by the proof before, the examiner. It is equally clear that the discharge of the employees named above, without apparent lawful reason, shortly after they had performed acts in support of the Union, and following threats of discharge for Union activity, constituted violations of § 8(a) (3). NLRB v. Scoler’s Inc., 466 F.2d 1289, 1291-92 (2 Cir. 1972). And there can be no doubt that the changes made by the Company in employee working conditions were made without Union participation in violation of § 8(a)(5).
The Company does challenge, however, the Board’s determinations that Barbara Fasano was discriminatorily discharged in violation of § 8(a) (3), and that the Company failed to negotiate in good faith on the collective bargaining agreement in violation of § 8(a) (5). To these provisions of the Board’s order, we now turn.
II.
Section 8(a)(3) of the Act makes it unlawful for an employer to discourage or to encourage membership in any labor organization by discrimination in regard to hire or tenure of employment, or any term or condition of employment. The critical question under this provision is what motivated the employer to discharge or otherwise change the employment conditions of the employee. NLRB v. Melrose Processing Co., 351 F.2d 693, 697-700 (8 Cir. 1965). Section 8(a)(3) does not deny an employer the right to discharge an employee for genuine economic reasons or for unsatisfactory work performance. NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45-46 (1937). The existence of a valid ground for discharge is not sufficient, however, if it was merely a pretext or if the discharge was based in part on an unlawful ground. NLRB v. Dorn’s Transportation Co., 405 F.2d 706, 713 (2 Cir. 1969); NLRB v. Pembeek Oil Corp., 404 F.2d 105, 109-10 (2 Cir. 1968), vacated on other grounds and remanded sub nom. Atlas Engine Works, Inc. v. NLRB, 395 U.S. 828 (1969).
The issue here is whether there was substantial evidence to support the Board’s conclusion that Fasano’s discharge was motivated at least in part by the Company’s discrimination because of her union activities. See Universal Camera Corp. v. NLRB, 340 U.S. 474, particularly at 476, 491-92 (1951); NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34-35 (1967). In reviewing a decision of the Board on this issue, we have said that its ruling on motivation “cannot lightly be overturned”. United Aircraft Corp. v. NLRB, 440 F.2d 85, 91-92 (2 Cir. 1971); NLRB v. Gladding Keystone Corp., 435 F.2d 129, 131-32 (2 Cir. 1970). We hold that the Board’s decision here was based on substantial evidence.
The Company introduced at the hearing some evidence which indicates that Fasano was an inefficient and insolent employee. She was hired on September 29, 1970, shortly after the Union established its first foothold in the Company. She was hired to make plates and to operate the cameras. Although she performed well during the first few weeks of employment, her performance deteriorated thereafter. She spoiled an unusually high percentage of the plates on which she worked. She required more supervision than an average employee. While she never actually refused to work, she, unlike other employees, often had to be ordered to perform her work. We believe that Fasano’s conduct, while an adequate ground for discharge, was not so intolerable as to demand it. NLRB v. Park Edge Sheridan Meats, Inc., 341 F.2d 725, 728 (2 Cir. 1965). Moreover, there was sufficient evidence to provide a reasonable basis for inferring that in fact this ground alone did not lead to her discharge.
Fasano was actively involved in promoting the Union. She attended the November 2 organizational meeting of the Union which was interrupted by the appearance of Orrach. She voted for the Union on November 4. When Orrach asked her at the victory celebration that night why she did so, she explained that she felt that it was “right”. On November 11, she and seven other employees called in sick to protest the discharge of Najdek. Her supervisor, Kunzweiler, knew of her participation in the “sickout”. The Company certainly was aware of her strong support of the Union. NLRB v. Pembeek Oil Corp., supra, 404 F.2d at 110.
Several facts disclosed by the record support the Board’s conclusion that the Company was motivated by antiunion considerations in discharging Fasano. On November 3, within her hearing and presence, Orrach threatened to discharge employees who had attended the Union meeting the previous evening. His glance toward Fasano and “little grin” indicated that she in particular was to be a target of the Company. Following the Union election on November 4, Orrach questioned and argued with her about her support of the Union. On November 12, the day after the sick-out, Kunzweiler made sarcastic remarks about her participation in that protest. For example, he instructed her to perform her job if she was not “too sick today”. We believe this indicated that the Company intended to watch Fasano’s work extra-carefully in order to find a pretext on which to discharge her. On November 16, Orrach warned two other employees that he would “get rid of” Union supporters. Four days later Fasano was discharged. “The abruptness of a discharge and its timing are persuasive evidence as to motivation.” NLRB v. Montgomery Ward & Co., 242 F.2d 497, 502 (2 Cir.), cert. denied, 355 U.S. 829 (1957). The closeness in time of Orraeh’s threat and Fasano’s discharge strongly suggests that the latter was the effectuation of the former. Finally, the Company’s numerous other unfair labor practices designed to defeat unionism support the inference that Fasano’s discharge was for union activity. NLRB v. Midtown Service Co., 425 F.2d 665, 671 (2 Cir. 1970).
We hold that there was substantial evidence to support the Board’s determination that the valid grounds for discharge asserted by the Company were not alone the cause of Fasano’s discharge, and that her discharge was motivated at least in part by unlawful discrimination on the part of the Company.
III.
Section 8(a)(5) of the Act makes it unlawful for an employer “to refuse to bargain collectively with the representatives of his employees.” Collective bargaining is defined in § 8(d) as “the mutual obligation ... to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession : .” The Act does not require that an employer yield a position fairly maintained, NLRB v. Herman Sausage Co., 275 F.2d 229, 231 (5 Cir. 1960), or that the parties actually reach an agreement. NLRB v. Israel Putnam Mills, 197 F.2d 116 (2 Cir. 1952).
The issue before us is whether there was substantial evidence to support a conclusion either that the Company in its collective bargaining negotiations engaged in a specific practice which constitutes a per se violation of § 8(a)(5) or that the Company’s entire course of conduct in the negotiations clearly shows a lack of good faith. We hold that there was not sufficient evidence to support either conclusion.
A per se violation of § 8(a)(5) may occur when a company misleads the union into believing that an agreement has been reached as to the terms of a collective bargaining contract and only formal execution remains, NLRB v. Mayes Bros. Inc., 383 F.2d 242 (5 Cir. 1967); or when an employer has reached a complete agreement with the union and its refusal to sign frustrates the whole concept of collective bargaining, H. J. Heinz Co. v. NLRB, 311 U.S. 514, 523-26 (1941). The Board here determined that the Company violated § 8(a)(5) when on April 27, Montague, acting for the Company, refused to sign a written contract embodying the tentative agreements reached over six months of negotiations and thereby indicated a refusal to enter into any agreement at all with the Union. In support of this conclusion, the Board relied primarily upon evidence that on April 27 Montague said he would not sign “any contract”.
In our view, the Board attributes unjustifiable significance to this vague and ambiguous statement by Montague. Moreover, the events which occurred before and after this statement indicate that the reasonable interpretation of it is that the Company was refusing to sign the proposed agreement merely because it contained the union security clause. Montague refused to sign “any contract” V with a union security clause. The Company had bargained in apparent good faith for months before this statement. It had reached agreement with the Union on most of the economic issues. At the I same time, the Company consistently had I opposed the union security clause. This lends support to the conclusion that it was this clause that caused Montague to reject the specific contract proposed by the Union. Indeed, when the parties continued negotiations after April 27, the only provision in dispute was the union security clause. Seide’s testimony also severely undermines the Board’s conclusion. He testified at one point that Montague had merely refused to sign the particular contract that had been prepared. He also testified that he understood that Montague had refused to sign the contract because one of his employees refused to join the Union under any circumstances. We fail to find substantial evidence to support the Board’s decision that this statement was a repudiation of six months of bargaining and an absolute refusal to sign any contract.
There was some testimony that^ the Company had reached an oral agreement with the Union on the union security clause ■ issue, and then repudiated its agreement. The courts have not yet established whether such conduct alone is sufficient to support a finding that a company has refused to bargain in good . faith. This is not a situation such asj that in NLRB v. Industrial Wire Products Corp., 455 F.2d 673 (9 Cir. 1972), where the company repeatedly changed its mind on various provisions that had been agreed on. We believe that repudiation of an agreement on a single issue, without more, does not under the circumstances presented here manifest a lack of good faith. In any event, the record here does not show that the Company reached an agreement, oral or otherwise, on the union security clause issue. Bartell was the only negotiator for the Company to indicate agreement on that issue. But he did not have the authority to bind the Company. We do not agree with the Board that Montague must have approved the compromise proposed before Bartell would tell Seide that they had “a contract”. Bartell may well have acted on his own or misunderstood Montague. We find insufficient evidence to support the Board’s conclusion that the Company reached an agreement with the Union on the security clause issue.
We recognize of course that a company’s “entire course of conduct” or “the totality of the circumstances” may show a lack of good faith in violation of § 8(a)(5), although none of its specific acts amounted to proscribed conduct. NLRB v. Fitzgerald Mills Corp., 313 F.2d 260, 264-67 (2 Cir.), cert. denied, 375 U.S. 834 (1963); NLRB v. Industrial Wire Products Corp., supra, 455 F.2d at 677-78. The appropriate standard is whether the circumstances clearly indicate “a desire not to reach an agreement with the union”. NLRB v. Reed & Prince Mfg. Co., 205 F.2d 131, 134 (1 Cir. 1953), cert. denied, 346 U.S. 887 (1953). Here there was not sufficient evidence from which it fairly could be concluded that the Company had no intention of reaching an accord with the Union.
The Company’s unfair labor practices did show resentment and hostility toward the Union. We have held that evidence of general antiunion animus is admissible to prove lack of good faith in the collective bargaining process. NLRB v. Patent Trader, Inc., 415 F.2d 190, 197 (2 Cir. 1969). But here the Company’s apparent' cooperation and sincere efforts in the contract negotiations demonstrated that the Company did not allow its dislike for the Union to affect its conduct at the bargaining table. Accordingly, we believe that its unfair labor practices carry little, if any, weight in proving a violation of § 8(a) (5).
The Company was represented in the negotiations by a person who did not have authority to enter into a binding agreement. While a company has the right to conduct negotiations in this way, the use of a negotiator without authority to bind the company is some evidence of a lack of good faith. NLRB v. Coletti Color Prints, Inc., 387 F.2d 298, 304 (2 Cir. 196V). We have held, however, that it requires more than proof that the bargaining representative of the company was not empowered to enter into a binding agreement to support a determination that the Company violated § 8(a)(5). NLRB v. Fitzgerald Mills Corp., supra, 313 F.2d at 267.
Finally, the Company adamantly refused to agree to the union security clause despite the Union’s willingness to compromise on that provision. It sometimes may be necessary for the Board or a court to examine the reasonableness of the parties’ positions on specific issues to determine whether, under all the circumstances, a particular bargaining position was taken to frustrate negotiation generally and thus to prevent agreement. NLRB v. Reed & Prince Mfg. Co., supra, 205 F.2d at 134. By the express terms of § 8(d) of the Act, the obligation to bargain “does not compel either party to agree to a proposal or require the making of a concession”. NLRB v. American Nat’l Ins. Co., 343 U.S. 395, 402-04 (1952). A party thus is entitled to stand firm on a position if he reasonably believes that it is fair and proper or that he has sufficient bargaining strength to force agreement by the other party. See NLRB v. General Electric Co., 418 F.2d 736, 766-70 (2 Cir. 1969) (Friendly, J., dissenting), cert. denied, 397 U.S. 965 (1970). The Board of course cannot ignore a patently unreasonable position. Moreover, if other circumstances indicate that a party was determined not to reach an agreement, the Board may consider the reasonableness of his positions on particular issues to determine whether he was attempting to frustrate negotiation. Neither of these situations, however, is present here. We find insufficient evidence to establish lack of good faith bargaining by the Company, as indicated by the totality of the circumstances.
We hold that there was not sufficient substantial evidence to support the Board’s determination that the Company failed to bargain collectively in good faith with the Union.
We enforce the Board’s order in all respects, except that we deny enforcement of paragraphs 1(b), 2(b) and 2(e) of the order.
. This case is a striking illustration of the desirability of amending Section 10(e) of the National Labor Relations Act, 29 U.S.C. § 160(e) (1970), to provide that an order of the Board shall become effective within a reasonable period after it is issued unless a petition to review is filed by an aggrieved person pursuant to Section 10(f) of the Act. See Friendly, Federal Jurisdiction: A General View, Part IX (Carpentier Lectures, Columbia University School of Law, November 13-16, 1972, to be published by the Columbia University Press in January 1973) ; and see 1 Recommendations and Reports of the Administrative Conference of the United States, Recommendation No. 10 and pp. 238-67 (1970).
In the instant case, the violations to which the Board’s order is directed occurred during a period of 17 to 27 months ago. Aside from the fact that approximately 80% of the Board’s order is not challenged, the Company informs us in its brief that “ [bargaining with the Union has resumed and numerous negotiating sessions have taken place”, and that “[d]uring the pendency of this appeal . the Company has ceased operations due to its financial inability to continue operations and, therefore, no longer operates the business corporation involved in this appeal.” This does not render the case moot, however, because the Company’s liability for back pay for Fasano and the replaced strikers is dependent upon our decision.
In connection with the Company’s statement that it has gone out of business, the record shows that the Company (Advanced Business Forms Corporation) was a wholly owned subsidiary of Retrieval Control Systems, a publicly held company whose president, John Montague, participated actively on behalf of Advanced Business Forms Corporation in the collective bargaining negotiations referred to in this opinion below.
. Advanced Business Forms Corporation (the Company).
. National Labor Relations Act, 29 U.S.C. § 151 et seq. (1970) (the Act).
. New York Printing Pressmen & Offset Workers Union No. 51, International Printing Pressmen and Assistants’ Union of North America, AFL-CIO (the Union).
. A summary of the provisions of the Board’s order and the Board’s determinations, including those not challenged by the Company, are set forth below at pp. 462-463.
. The termination of Piscani was never involved in this case.
. Two of the employees — Kirklewski and Sannuto — were reinstated on November 16 and 30, respectively.
. Thereafter, on November 18, the Board’s regional director certified the Union as the bargaining representative for the prep department employees.
. Among other insults, Orrach shouted to the bartender, “Don’t serve these queers.”
. Employees lost the privilege of listening to the radio in the darkroom; the lunch period was moved to an inconvenient time; outside telephone calls no longer could be made from the plant telephone, nor could incoming calls be received on the plant telephone; and strippers in the prep department for the first time were required to maintain time sheets for every job performed. The Board found that each of these changes in working conditions were in violation of § 8(a) (3) and (1), including the last item as to which the Board reversed the trial examiner. See note 14 infra.
. Bartell was employed by the Printing Industries of Metropolitan New York, Inc., an association of employers that negotiates an association-wide contract on behalf of its members. In the instant negotiations, however, Bartell acted solely as a negotiator for the Company and not for the association.
. Under a maintenance-of-membership clause, all employees who are members of the union at the time the bargaining agreement is entered into, and those who of their own volition thereafter become members, are required, as a condition of employment, to maintain their union membership for the duration of the agreement. Employees are not required, however, to join the union. On the other hand, the union security clause contained in the standard association contract made union membership compulsory.
. We discuss below in more detail the question whether there was substantial evidence to support the Board’s determination that this statement by Montague indicated a refusal to enter into any agreement or a refusal to sign the particular contract with the union security clause in it.
. The Board reversed only the examiner’s determination that the Company had not violated § 8(a)(3) and (1) by requiring after the election that prep department strippers keep time sheets for every job performed. See note 10 stipra.
. The consequences to an employee of being discharged under the pretext of poor work performance are too serious to allow the discharge to stand when an improper motive entered into the employer’s decision to discharge. Moreover, other employees —particularly those barely holding their jobs — are likely to be discouraged from supporting a union if they reasonably believe that it will cost them their jobs.
. In operating a platemaker, which burns a negative onto a plate, it is possible to “spoil” a plate so that it cannot be used in the presses. Bach spoiled plate cost the Company between $3.20 and $5.50.
. The Company cites several decisions for the proposition that evidence of an employer’s general hostility to a union does not support a finding that an individual discharge was in violation of § 8(a)(1) and (3) of the Act. NLRB v. Shepherd Laundries Co., 440 F.2d 856 (5 Cir. 1971); NLRB v. Monroe Auto Equipment Co., 368 F.2d 975 (8 Cir. 1966). The thrust of such decisions is that an employer’s general antiunion policy, without more, does not prove an unlawful motive as to a specific discharge. It is clear in the instant case that the Company’s general antiunion animus was only one of several facts which indicate an improper motive for the discharge of Fasano.
. Other examples of proscribed tactics that constitute a per se violation of § 8(a) (5) are set forth by Judge Friendly in NLRB v. General Electric Company, 418 F.2d 736, 767 (2 Cir. 1969) (dissenting opinion), cert. denied, 397 U.S. 965 (1970).
. The Board concluded that the strike beginning May 3, 1971 was an unfair labor practice strike caused by the Company’s refusal to bargain collectively in good faith and the Company’s other unfair labor practices. We disagree. Since we have held that there was insufficient evidence to support the Board’s determination that the Company refused to bargain collectively in good faith, the only possible remaining peg for the Board’s finding of an unfair labor practice strike were the Company’s “other unfair labor practices”. We find no evidence which indicates that the unfair labor practices six months before the strike played any part whatsoever in the decision to strike. We hold that the Board’s finding of an unfair labor practice strike is not supported by substantial evidence and we decline to enforce that part of the Board’s order based upon such finding.
Question: What federal agency's decision was reviewed by the court of appeals?
A. Benefits Review Board
B. Civil Aeronautics Board
C. Civil Service Commission
D. Federal Communications Commission
E. Federal Energy Regulatory Commission
F. Federal Power Commission
G. Federal Maritime Commission
H. Federal Trade Commission
I. Interstate Commerce Commission
J. National Labor Relations Board
K. Atomic Energy Commission
L. Nuclear Regulatory Commission
M. Securities & Exchange Commission
N. Other federal agency
O. Not ascertained or not applicable
Answer:
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songer_initiate
|
A
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What follows is an opinion from a United States Court of Appeals. Your task is to identify what party initiated the appeal. For cases with cross appeals or multiple docket numbers, if the opinion does not explicitly indicate which appeal was filed first, assumes that the first litigant listed as the "appellant" or "petitioner" was the first to file the appeal. In federal habeas corpus petitions, consider the prisoner to be the plaintiff.
CANADIAN-AMERICAN PHARMACEUTICAL CO. v. COE, Com’r of Patents.
No. 7893.
United States Court of Appeals for the District of Columbia.
Argued Feb. 17, 1942.
Decided March 30, 1942.
Messrs. Arthur G. Connolly, of Wilmington, Del., and James P. Burns, of Washington, D. C., for appellant.
Mr. H. S. Mackey, of Washington, D. C., with whom Mr. W. W. Cochran, of Washington, D. C., Solicitor, United States Patent Office, was on the brief, for appellee.
Before STEPHENS, EDGERTON, and RUTLEDGE, Associate Justices.
EDGERTON, Associate Justice.
This is a suit to obtain a patent on En-sol, a medicine for reducing the pain of cancer, and on processes for its manufacture. The District Court dismissed the complaint on the ground that the disclosures lacked utility.
There was testimony to the following effect. Dr. Hendry C. Connell, the physician who originated Ensol, has supervised its use in 800 to 1000 painful cancer cases. In over 90 per cent of these cases, pain was reduced; less sedative was required. Pain was reduced in 279 of 289 painful cancer cases which were studied by his father, Dr. James C. Connell, a former dean of the Medical Faculty of Queen’s University. In many of these cases relief was immediate and complete. Another physician testified that he had treated eighteen cancer patients with Ensol; pain was “definitely a symptom” in fourteen, and was definitely reduced by Ensol in twelve. Over one thousand physicians have administered Ensol in cancer cases. Their “almost unanimous opinion” is said to be that it alleviated pain. Two independent physicians investigated Ensol for the Ontario government. They testified that it reduces the pain of cancer in the very great majority of cases. The Ontario government’s Commission for the Investigation of Cancer Remedies reported that “In the great majority of cases treated there appears to be relief of pain. * * * It seems clear from the evidence of case histories, physicians’ reports and the examination of patients that Ensol * * * used according to directions, is harmless and that it produces no undesirable immediate or remote effects. Improvement is manifested by lessening of pain and tension.” Since January, 1940, the expenses of Ensol research, manufacture and distribution have been borne by the Ontario Government.
Dr. James C. Connell conceded that En-sol often caused “transient pain.” Otherwise, testimony to an absence of bad results was unanimous. The Commissioner relies on a series of experiments which indicate that Ensol does not check the growth of cancer tumors in mice and rabbits. We think this throws no substantial doubt on the proposition that it usually reduces the pain of cancer in man.
It may be that some medical scientists would discourage the use of En-sol pending further tests. It is not within our function to decide, and we do not assume to decide, whether its use should be encouraged or discouraged. But we do have to decide whether under the evidence in the record in this case it has been clearly shown to have utility within the meaning of the patent law. And the evidence seems to us to make it clear that Ensol does, in many cases, reduce the pain of cancer, and that it causes no serious harm. There is no finding, and no evidence, to the contrary. It follows that Ensol has an “important function” and “works.” In our opinion, the District Court’s finding that the invention is not sufficiently reliable, useful and important to warrant the grant of a patent is incorrect.
Reversed.
Under R.S. § 4915, 35 U.S.C.A. § 63.
R.S. § 4893, 35 U.S.C.A. § 36.
Cf. Hildreth v. Mastoras, 257 U.S. 27, 34, 42 S.Ct. 20, 66 L.Ed. 112.
Question: What party initiated the appeal?
A. Original plaintiff
B. Original defendant
C. Federal agency representing plaintiff
D. Federal agency representing defendant
E. Intervenor
F. Not applicable
G. Not ascertained
Answer:
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songer_casetyp1_7-3-1
|
B
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What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation - taxes, patents, copyright".
Guy T. HELVERING, Commissioner of Internal Revenue, Petitioner, v. W. H. T. FOSTER.
No. 11746.
Circuit Court of Appeals, Eighth Circuit.'
June 6, 1941.
Samuel O. Clark, Jr., Asst. Atty. Gen., Sewall Key, S. Dee Hanson, and F. E. Youngman, Sp. Assts. to Atty. Gen., and J. P. Wenchel, Chief Counsel, Bureau of Internal Revenue, and C. E. Lowery, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for petitioner.
Herbert A. Friedlich, Harry Thom, and Benjamin A. Ragir, all of Chicago, 111., for respondent.
PER CURIAM.
Decision of Board of Tax Appeals reversed on authority of certain decisions of the Supreme Court of the United States, pursuant to motion of counsel for petitioner and concurrence of counsel for respondent, and cause remanded for proceedings in accordance with law.
Question: What is the specific issue in the case within the general category of "economic activity and regulation - taxes, patents, copyright"?
A. state or local tax
B. federal taxation - individual income tax (includes taxes of individuals, fiduciaries, & estates)
C. federal tax - business income tax (includes corporate and parnership)
D. federal tax - excess profits
E. federal estate and gift tax
F. federal tax - other
G. patents
H. copyrights
I. trademarks
J. trade secrets, personal intellectual property
Answer:
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songer_direct1
|
A
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the ideological directionality of the court of appeals decision, coded as "liberal" or "conservative". Consider liberal to be for government tax claim; for person claiming patent or copyright infringement; for the plaintiff alleging the injury; for economic underdog if one party is clearly an underdog in comparison to the other, neither party is clearly an economic underdog; in cases pitting an individual against a business, the individual is presumed to be the economic underdog unless there is a clear indication in the opinion to the contrary; for debtor or bankrupt; for government or private party raising claim of violation of antitrust laws, or party opposing merger; for the economic underdog in private conflict over securities; for individual claiming a benefit from government; for government in disputes over government contracts and government seizure of property; for government regulation in government regulation of business; for greater protection of the environment or greater consumer protection (even if anti-government); for the injured party in admiralty - personal injury; for economic underdog in admiralty and miscellaneous economic cases. Consider the directionality to be "mixed" if the directionality of the decision was intermediate to the extremes defined above or if the decision was mixed (e.g., the conviction of defendant in a criminal trial was affirmed on one count but reversed on a second count or if the conviction was afirmed but the sentence was reduced). Consider "not ascertained" if the directionality could not be determined or if the outcome could not be classified according to any conventional outcome standards.
GANNAWAY v. STANDARD ACC. INS. CO. OF DETROIT, MICH.
No. 1409.
Circuit Court of Appeals, Tenth Circuit.
July 27, 1936.
Wade H. Loofbourrow, of Oklahoma City, Okl., and Meacham, Meacham & Meacham, of Clinton, Okl., for appellant.
M. U. Hayden, of Detroit, Mich., and Ned Looney and Edgar Fenton, both of Oklahoma City, Okl., for appellee.
Before PHILLIPS, McDERMOTT, and BRATTON, Circuit Judges.
BRATTON, Circuit Judge.
This action presents for determination the liability of the insurance company on its accident policy insuring Clarence Gannaway with double indemnity in the event death should result from bodily injuries effected through accidental means while the insured was driving or riding in an automobile.
Plaintiff is the nominated beneficiary in the policy and the surviving widow of the insured. She instituted the suit in the state court alleging that the policy was dated January 17, 1928, and provided-for an annual premium of $27.50; that F. H. Palmer was the agent of the company at Clinton, Old.; that it was agreed between the insured and the company through Palmer that the policy should not lapse without notice thereof in advance; that it would be renewed from year to year and kept in force unless the .insured notified the company otherwise and that he would pay the premium; that the insured depended upon the company to keep the policy in force and to send him a statement for the premium as it became due; that annual premiums were paid to the agent on February 1, 1929, March 1, 1930, and February 6, 1931; that they were paid and accepted and the insurance continued in force in accordance with such agreement, custom and practice; that the company held Palmer out to the insured and others a-s its agent clothed with full apparent power to enter into the agreement and do the things set forth; and that on January 27, 1932, while the insured was depending upon such understanding and agreement that the policy was in force and without any notice from the company that it had lapsed, the insured sustained bodily injuries through accidental means while riding in an automobile from which he died the following day. Subsequent to removal of the case to the United States court and more than three years after the death of the insured, a supplement to the petition was filed in which it was alleged that some time in January, 1932, the company issued its usual and customary certificate of renewal at its office in Oklahoma City and forwarded it to Palmer; that Palmer displayed it to the insured and advised him that the policy was renewed and in force for another year; and that if the insured did not actually pay the premium for such renewal at the time the certificate was issued, the company extended him credit for the amount in accordance with the custom and practice between them.
A demurrer on the ground that the alleged facts failed to state a cause of action and that the action was barred by the statute of limitation and by the limitation fixed in the policy was sustained. Plaintiff appealed.
It is contended that the amendment introduced a new cause .of action which had become barred, but the conclusion which we have reached respecting the basic question of liability upon the policy renders it unnecessary to consider that point. The policy was an annual contract which expired upon failure to pay the renewal premium on the due date. It provided that, subject to its conditions and limitations, it might be renewed with the consent of the company and by payment of the premium; that if default should be made in the payment of the premium, the subsequent acceptance of such premium should reinstate the insurance, but only to cover accidental injury thereafter sustained; that no change in its terms should be valid unless approved by an executive officer of the company and indorsed thereon; and that no agent should have authority to change the policy or to waive any of its provisions. Manifestly, there were two plainly provided requisites for renewal. They were payment of the premium and assent of the company. And by the clear terms of the reinstatement clause, acceptance of an overdue premium merely reinstated the contract to cover injury thereafter sustained and did not extend the coverage to the period intervening between the termination and the subsequent payment. Further, it was unconditionally provided that a change in the contract could be effected only with approval of an executive officer of the company. Palmer was not such an officer. He was a soliciting agent without the powers of a general agent. The policy expressly withheld authority for him to waive any of its provisions. It clearly denied authority in him to waive termination of the contract on January 17, 1932, upon failure to pay the premium due at that time or to agree with binding effect upon the company that the insurance should continue in force without payment of such premium. A provision of that kind is valid and binding; and where it is expressed in the contract, the insured is presumed to be aware of it. And one who enters into an agreement with such an agent, knowing that his act exceeds his authority, cannot have recourse against the principal, absent ratification. Northern Assurance Co. v. Grand View Building Association, 183 U.S. 308, 22 S.Ct. 133, 46 L.Ed. 213; Slocum v. New York Life Ins. Co., 228 U.S. 364, 33 S.Ct. 523, 57 L.Ed. 879, Ann.Cas.l914D, 1029; Exchange Trust Co. v. Capitol Life Ins. Co. (C.C.A.) 49 F.(2d) 133; Lamar v. Aetna Life Ins. Co. (C.C.A.) 85 F.(2d) 141; Hill v. Philadelphia Life Ins. Co. (C.C.A.) 35 F.(2d) 132; Massachusetts Protective Ass’n v. Turner, 171 Okl. 14, 41 P.(2d) 689; Collins v. Metropolitan Life Ins. Co., 32 Mont. 329, 80 P. 609, 1092, 108 Am.St.Rep. 578; Tuttle v. Pacific Mut. Life Ins. Co., 58 Mont. 121, 190 P. 993, 16 A.L.R. 601; Travelers’ Ins. Co. v. Myers, 62 Ohio St. 529, 57 N.E. 458, 49 L.R.A. 760.
The petition contains general allegations that the company held Palmer out as its agent clothed with apparent authority to make the agreement; that the insured depended upon such agreement; and that the company acted accordingly and ratified and acquiesced in it. The demurrer admitted all matters well pleaded, but these allegations are in conflict with the clear provision in the policy expressly denying authority to an agent to make an, agreement of that kind. It is well settled in Oklahoma and elsewhere that where a written instrument is the foundation of a civil action and a copy of it is attached to the pleading, it controls over the pleading in respect of any conflict between the two. Hyde v. City of Altus, 92 Okl. 170, 218 P. 1081; Mason v. Slonecker, 92 Okl. 227, 219 P. 357; Forry v. Brophy, 116 Okl. 99, 243 P. 506; Home Ins. Co. v. Whitchurch, 139 Okl. 1, 281 P. 234; School District. No. 60 v. Crabtree, 146 Okl. 197, 294 P. 171; Deere v. Gypsy Oil Co., 160 Okl. 237, 15 P.(2d) 1086; Devine v. Pyanhunkah, 170 Okl. 178, 39 P.(2d) 132; Maxwell-Chamberlain Motor Co. v. Piatt, 65 Colo. 140, 173 P. 867; Stillwell Hotel Co. v. Anderson (Cal.App.) 42 P.(2d) 720; Aetna Ins. Co. v. Long (Tex.Civ.App.) 47 S.W.(2d) 854; Rounds v. Owensboro Ferry Co., 253 Ky. 301, 69 S.W.(2d) 350; Frigorifico Wilson De La Argentina v. Weirton Steel Co. (C.C.A.) 62 F.(2d) 677.
Plaintiff’s alleged cause of action has its genesis in covenants which the agent lacked authority to make.
Accordingly, the judgment of dismissal is affirmed.
Question: What is the ideological directionality of the court of appeals decision?
A. conservative
B. liberal
C. mixed
D. not ascertained
Answer:
|
songer_improper
|
E
|
What follows is an opinion from a United States Court of Appeals. The issue is: "Did the court conclude that there was improper influence on the jury? For example, include jury tampering or failure to shield jury from prejudicial media accounts. Exclude prejudicial conduct by the prosecutor." Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed". If the court answered the question in the affirmative, but the error articulated by the court was judged to be harmless, answer "Yes, but error was harmless".
INTERNATIONAL TERMINAL OPERATING COMPANY, Inc., Appellant, v. SS VALMAS, her engines, boilers, etc., Appellee.
No. 10779.
United States Court of Appeals Fourth Circuit.
Argued Jan. 11, 1967.
Decided March 13, 1967.
. Edward B. Hayes, Chicago, 111. (Rob-bert W. Williams, Baltimore, Md., Lord, Bissell & Brook, Chicago, 111., and Ober, Williams & Grimes, Baltimore, Md,, on brief), for appellant.
Robert D. Klages, New York City (John G. Poles, Poles, Tublin & Pates-tides, New York City, and Weinberg & Green, Baltimore, Md., on brief), for ap-pellee.
Before HAYNSWORTH, Chief Judge, SOBELOFF, Circuit Judge, and RUSSELL, District Judge.
SOBELOFF, Circuit Judge:
On this appeal we are called upon to decide whether libelant, International Terminal Operating Co., Inc., supplier of stevedoring services to the Greek vessel S.S. YALMAS, which was under sub-charter to Enterprise Marine Co., is entitled to a maritime lien. The answer turns on a construction of certain provisions in the time charter party, dated June 23, 1964, between Compagne Nav-iere, the owner, and Alltransport, Inc., as charterer, and in the subcharter party, dated August 10, 1964, between Alltrans-port and Enterprise.
International Terminal Operating Co., Inc., was employed by Enterprise, under a contract executed on May 27, 1964, to perform general stevedoring services on vessels owned, operated, controlled or chartered by Enterprise. Pursuant to this contract, the stevedore unloaded cargo from the S.S. VALMAS when she was in Chicago under the management of Enterprise. In order to recover unpaid charges of $25,959 plus interest for the services supplied, the stevedore filed a libel in rem against the vessel. Both the owner and the time charterer claimed the vessel, and moved for summary judgment on the ground that by virtue of paragraph 18 of the time charter party and paragraph 17 of the subcharter party, Enterprise had no authority — and in fact was forbidden— to incur a maritime lien. The libelant also moved for summary judgment, on the ground that nothing in either of the charters, correctly interpreted, prohibited Enterprise from incúrring a lien on the vessel.
It is beyond dispute that absent the clauses in question, a lien would arise, since the Federal Maritime Lien Act, pertinent portions of which are set out in the margin, provides that the supplier of “necessaries” shall be entitled to a lien on the vessel to which the “necessaries” are furnished.
If inspection of a charter party would have shown that the charterer had no authority to bind the ship, a supplier of “necessaries” is charged by section 973 with knowledge of the provisions of the charter party forbidding the creation of a lien. In the present ease it is agreed that the stevedore did not seek to inspect the ship’s papers, although they were readily available upon request, and thus failed to exercise the “reasonable diligence” required by section 973. Despite this failure, however, if the questioned documents do not deprive Enterprise of authority to permit a lien on the vessel, the stevedore is still entitled to a lien.
The District Court ruled that paragraph 18 of the time charter party prevented Alltransport from incurring a lien, but that the prohibition did not extend to Enterprise as the subcharterer. The court nevertheless dismissed the libel on the theory that paragraph 17 of the subcharter party prevented the creation of a lien by Enterprise. From the summary judgment libelant appeals.
We agree with the District Court’s holding that the stevedore is not entitled to a lien, although we reach this result by a somewhat different route.
The case principally relied upon by the vessel to prevent the attachment of a maritime lien, Dampskibsselskabet Dan-nebrog v. Signal Oil & Gas Co., 310 U.S. 268, 280, 60 S.Ct. 937, 943, 84 L.Ed. 1197, (1940), held that to have this effect, the charter party must “provide therein that the creation of maritime liens is prohibited.” In Signal Oil, the time charterers had agreed to “provide and pay for” fuel oil supplies. The Supreme Court held that this phrase was not adequate to prevent the creation of a lien for necessaries ordered by the charterer. The Court implied that to bar a lien, it would be necessary to include a provision similar to that considered in United States v. Carver, 260 U.S. 482, 43 S.Ct. 181, 67 L.Ed. 361 (1923): that charterers “will not suffer nor permit to be continued any lien * *
The clause in Carver is substantially identical with paragraph 18 of the time charter party in the case before us, except that the latter includes the phrase “incurred by them or their agents.” Although the District Court held that paragraph 18 barred the creation of a lien by the charterers, it declared that because of this phrase, the provision was sufficient only to prohibit liens incurred by the time charterers “or their agents,” and that the prohibition did not extend to the subcharterer. We find this view unpersuasive; we read the words “or their agents” as words of emphasis, not of limitation. They imply no narrowing, but instead underscore the broad generality of the prohibition against liens.
Although the time charter contains a clause permitting the charterer to sublet the vessel during the life of the time charter party, it explicitly provides that the charterers are to remain “responsible for the fulfillment of this Charter Party.” The charterer could not “grant to the sub-charterer rights beyond those which he has under his original charter from the owner * * Poor, Charter Parties & Ocean Bills of Lading § 20 (4th ed. 1954). Thus the subcharterer stands in the shoes of the charterer, and a subcharter party between Alltransport and Enterprise would incorporate by implication the terms of the time charter. It is difficult to square the exaction from the original charterer of the agreement prohibiting the creation of a lien with the notion that it was a matter of indifference if the subcharter should create a lien exposing the vessel to the very risk stipulated against. It would take very compelling language indeed to justify reading the time charter party as forbidding the chárterer to suffer a lien against the vessel, yet tolerating its creation by any unknown subcharterer. The prohibition against permitting a lien is aimed not only at the charterer and his agents, but against permitting a lien by a subcharterer.
Alltransport, in accordance with maritime practice, is described in the sub-charter party as the “Time-chartered Owner of the motor-vessel VALMAS.” Had the stevedore complied with the command of section 973 and inspected the ship’s papers, it would have been put on notice of the existence of a prior charter party. Inspection of that document would have disclosed that Alltransport could not permit a lien to be created, and therefore could not grant Enterprise authority to do so. If Alltransport had purported to confer such authority, it clearly would have breached the terms of the time charter party. The stevedore, or other supplier of the vessel, reading the subcharter party and the time charter party to which attention was thereby directed, could hardly be misled into thinking that these documents left it the' protection of a lien.
We find support for this view in Ocean Cargo Lines, Ltd. v. North Atlantic Marine Co., 227 F.Supp. 872 (S.D.N.Y. 1964), where a supplier of fuel oil sought to avoid the effect of a prohibition of lien clause in a time charter by arguing that since the voyage charter between charterer and subcharterer contained no prohibition of lien clause, the supplier was not barred from enforcing its lien. The District Court pointed out, however, that section 973 of the Federal Maritime Lien Act refers to a prohibition of lien by “the terms of a charter party.” (Emphasis in Judge Feinberg’s opinion.) The court therefore declared that
so long as a prohibition of lien is contained in any charter under which a vessel is operated at the time supplies are furnished to the vessel, a would be lienor is bound to exercise “reasonable diligence” in inquiring whether the supplies are ordered by the owner or by one having authority to bind the vessel.
227 F.Supp. at 878. (Emphasis in original.)
We leave open, as unnecessary to a decision here, the question whether, standing alone, the language of section 17 of the subchárter party, providing that cargo was to be loaded “free of risk and expense to the vessel” constitutes a sufficient bar to the creation of a lien, as our District Court thought, or is insufficient, as Judge Wisdom thought in addressing himself to identical language in Cooper Stevedoring of Louisiana, Inc. v. Pappadakis, 363 F.2d 352 (5th Cir. July 18, 1966). For the disposition of the present case, it is enough that the charter party and the subcharter party together, which were available on board the vessel and knowledge of the contents of which is attributable to the stevedore, conveyed ample notice that the lien was unauthorized.
The judgment of the District Court is
Affirmed.
. Appellees — the owner and the time charterer — argue that this prior, general contract indicates that the stevedore did not rely on the credit of the vessel, since at the time the contract was made, the S. S. YALMAS had not yet been sub-chartered to Enterprise. We find no merit in this contention, however. In Dampskibsselskabet Dannebrog v. Signal Oil & Gas Co., 310 U.S. 268, 60 S.Ct. 937, 84 L.Ed. 1197 (1940), the libelant was under a general contract to supply “the fuel' oil requirements of any and all vessels ■owned, chartered, or operated by W. L. Comyn & Sons.” Subsequent to the contract’s execution, vessels were chartered to W. L. Gomyn & Sons to which libelant furnished fuel. The Court held that this did not prevent the creation of maritime liens for supplies actually furnished the vessels. See also Point Landing, Inc. v. Alabama Dry Dock & Shipbuilding Co., 261 F.2d 861, 867 (5th Cir. 1958), which held that
since the furnishing of the supply, repair or necessary to the vessel was presumptively on the credit of the ship, a maritime lien arises unless it is affirmatively established that it was done solely on personal credit.
Moreover, the Federal Maritime Lien Act, 46 U.S.C. § 971 (1958), expressly states that it is not necessary to prove that credit was extended to the vessel.
See note 3, infra.
. Para. 18 of the time charter party reads:
18. * * * Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the owners in the vessel.
Para. 17 of the subcharter party reads:
17. Cargo is to be loaded, stowed, and discharged by the Charterers, free of risk and expense to the vessel.
. 46 U.S.C. §§ 971-974 (1958).
§ 971. Any person furnishing * * necessaries, to any vessel * * * upon the order of * * * a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.
§ 972. The following persons shall be presumed to have authority from the owner to procure * * * necessaries for the vessel: * * * any person to whom the management of the vessel at the port of supply is intrusted. * * *
§ 973. The officers and agents of a vessel specified in section 972 of this title shall be taken to include such officers and agents when appointed by a charterer, [or] by an owner pro hac vice * * * ; but nothing in this chapter shall be construed to confer a lien when the furnisher knew, or by exercise of reasonable diligence could have ascertained, that because of the terms of a charter party * * * the person ordering the * * * necessaries was without authority to bind the vessel therefor. (Emphasis supplied.)
§ 974. Nothing in this chapter shall be construed to prevent the furnisher of * * * necessaries * * * from waiving his right to a lien * * * by agreement or otherwise * * *.
. “Necessaries” include stevedoring services. In re North Atlantic & Gulf S. S. Co., 204 F.Supp. 899 (S.D.N.Y.1962), aff’d sub nom. Schilling v. A/S D/S DANNEBROG, 320 F.2d 628 (2d Cir. 1963) ; The Little Charley, 31 F. 120 (D.Md.1929); The Henry S. Grove, 285 F. 60 (W.D.Wash.1922).
. Dampskibsselskabet Dannebrog v. Signal Oil & Gas Co., 310 U.S. 268, 60 S.Ct. 937, 84 L.Ed. 1197 (1940); United States v. Carver, 260 U.S. 482, 43 S.Ct. 181, 67 L.Ed. 361 (1923); S. S. Omnium Freighter v. Northwest Marine Ironworks, Inc., 341 F.2d 420 (8th Cir. 1965); Bimini Run Ltd. v. Belcher Oil Co., 336 F.2d 184 (5th Cir. 1964); Ocean Cargo Lines, Ltd. v. North Atlantic Marine Co., 227 F.Supp. 872 (S.D.N.Y.1964); Gilmore & Black, Admiralty, § 9-46, at 566 (1957).
. Colonial Press of Miami, Inc. v. The Allen’s Cay, 277 F.2d 540 (5th Cir. 1960); The Golden Gate, 52 F.2d 397 (9th Cir. 1931), cert. denied, 284 U.S. 682, 52 S.Ct. 199, 76 L.Ed. 576 (1932); Gilmore & Black, Admiralty, § 9-46, at 568 (1957).
. In Carver, the charterer was to pay all costs and expenses incident to the operation of the vessels, and agreed “not [to] suffer nor permit to be continued any lien, encumbrance, or charge which has or might have priority over the title and interest of the owner in said vessel.” 260 U.S. at 487-488, 43 S.Ct. at 181. Compare para. 18, in which the time charterers agree “not [to] suffer, nor permit to be continued, any lien or encumbrance incurren by them or their agents, which might have priority over the title, and interest of the owners in the vessel.” (Emphasis supplied.)
. Although appellants stated in oral argument that the words “incurred by them or their agents” were deliberately inserted to forbid application of the prohibition to anyone but Alltransport, several cases which have involved prohibition of lien clauses identical with para. 18 have expressly stated that such a provision is a standard clause incorporated in the usual printed form. E. g., Walsh Stevedoring Co. v. M/S SLAGEN, 361 F.2d 478 (5th Cir. 1966); United States v. S. S. LUCIE SCHULTE, 343 F.2d 897 (2d Cir. 1965); Ocean Cargo Lines, Ltd. v. North Atlantic Marine Co., 227 F.Supp. 872 (S.D.N.Y. 1964); Gilmore & Black, Admiralty, § 4-14, at 204 (1957). The time charter in the present case, Libelant’s Exhibit A, is a standard form (designated “Form 138, Government Form, Approved by the New York Produce Exchange”) and the words “incurred by them or their agents” were not inserted by the parties, but are part of the printed document.
; See Ocean Cargo Lines, Ltd. v. North Atlantic Marine Co., 227 F.Supp. 872, 877 (S.D.N.Y.1964) and authorities cited •therein.
. In Cooper Stevedoring, the Fifth Circuit was confronted with only a single charter party, which contained a clause identical with para. 17 of the subcharter party in our case. It was there held that such a clause did not explicitly deny the authority of the charterer to incur a lien against the vessel, and thus would not of itself be sufficient to prevent a lien from arising.
Question: Did the court conclude that there was improper influence on the jury? For example, include jury tampering or failure to shield jury from prejudicial media accounts. Exclude prejudicial conduct by the prosecutor.
A. No
B. Yes
C. Yes, but error was harmless
D. Mixed answer
E. Issue not discussed
Answer:
|
songer_respond1_1_2
|
D
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". Your task is to classify the scope of this business into one of the following categories: "local" (individual or family owned business, scope limited to single community; generally proprietors, who are not incorporated); "neither local nor national" (e.g., an electrical power company whose operations cover one-third of the state); "national or multi-national" (assume that insurance companies and railroads are national in scope); and "not ascertained".
Helen J. RADOS, as Administratrix of the Goods, Chattels and Credits which were of Stanley A. Rados, Deceased, and Helen J. Rados, Individually, Plaintiff-Appellant, v. The CELOTEX CORPORATION, Johns-Manville Sales Corporation, Unarco Industries, Inc., Armstrong Cork Company and Nicolet Industries, Defendants-Appellees.
No. 351, Docket 86-7477.
United States Court of Appeals, Second Circuit.
Argued Nov. 21, 1986.
Decided Nov. 21, 1986.
Opinion Jan. 12, 1987.
Richard P. Weisbeck, Jr., Buffalo, N.Y. (Lipsitz, Green, Fahringer, Roll, Schuller & James, Buffalo, N.Y., of counsel), for plaintiff-appellant.
Roy Babbit, New York City (Anderson Russell Kill & Olick, P.C., Marcy L. Kahn and Eugene Killian, Jr., New York City, of counsel), for defendants-appellees The Celotex Corporation and Armstrong Cork Company.
Andrew Feldman, Damon & Morey, Buffalo, N.Y., of counsel, for defendant-appellee Nicolet Industries.
Before TIMBERS, VAN GRAAFEILAND and PIERCE, Circuit Judges.
VAN GRAAFEILAND, Circuit Judge:
Helen J. Rados appeals from a judgment of the United States District Court for the Western District of New York (Curtin, C.J.), dismissing her wrongful death action pursuant to Fed.R.Civ.P. 41(b) for failure to prosecute. Although the jurisdiction of this Court was not challenged by any of the parties, we raised the question of jurisdiction sua sponte at oral argument. See Matarese v. LeFevre, 801 F.2d 98, 104 (2d Cir.1986). After hearing argument, we dismissed the appeal by summary order, indicating that this opinion would follow.
Following Chief Judge Curtin’s order of dismissal, judgment was entered by the Clerk of the District Court on May 15, 1986. On May 29, 1986, Rados moved for reconsideration pursuant to Fed.R.Civ.P. 60(b). Before Judge Curtin decided that motion, Rados filed a notice of appeal. Since that time, Judge Curtin has requested and obtained additional briefs from the parties on the issue of whether a sanction less severe than dismissal might have been more appropriate. That matter is still under advisement by the district judge.
Excluding weekends and Memorial Day, see Fed.R.Civ.P. 6(a), appellant’s motion for reconsideration was served within the ten-day period allowed for a motion to alter or amend a judgment under Fed.R.Civ.P. 59(e). Since the motion was served within ten days of the judgment and placed the correctness of the judgment in question, it was the functional equivalent of a motion to amend under Fed.R.Civ.P. 59(e), and should be treated as if it were a 59(e) motion for purposes of determining appellate jurisdiction. Lyell Theatre Corp. v. Loews Corp., 682 F.2d 37, 41 (2d Cir.1982); Charles v. Daley, 799 F.2d 343, 347 (7th Cir.1986); Skagerberg v. State of Oklahoma, 797 F.2d 881 (10th Cir.1986) (per curiam); Harcon Barge Co., Inc. v. D & G Boat Rentals, Inc., 784 F.2d 665, 669-70 (5th Cir.) (en banc), cert. denied, — U.S. -, 107 S.Ct. 398, 93 L.Ed.2d 351 (1986); Schaurer v. Coombe, 108 F.R.D. 180, 182 (W.D.N.Y.1985); 9 Moore’s Federal Practice If 204.12[1], at 4-67 (1985). Because Rados’ motion, construed as a Rule 59(e) motion to amend, has not yet been decided by the district court, her notice of appeal filed during the pendency of the motion was a nullity under Fed.R.App.P. 4(a)(4), and did not confer jurisdiction on this Court. Acosta v. Louisiana Dep’t of Health & Human Resources, — U.S. -, 106 S.Ct. 2876, 92 L.Ed.2d 192 (1986) (per curiam); Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 103 S.Ct. 400, 74 L.Ed.2d 225 (1982) (per curiam).
It was for the above reasons that we dismissed this appeal in our summary order of November 21, 1986. If the motion now pending in the district court ultimately is denied, Rados may, of course, file a new notice of appeal.
Question: This question concerns the first listed respondent. The nature of this litigant falls into the category "private business (including criminal enterprises)". What is the scope of this business?
A. local
B. neither local nor national
C. national or multi-national
D. not ascertained
Answer:
|
songer_appel1_7_5
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine which of these categories best describes the income of the litigant. Consider the following categories: "not ascertained", "poor + wards of state" (e.g., patients at state mental hospital; not prisoner unless specific indication that poor), "presumed poor" (e.g., migrant farm worker), "presumed wealthy" (e.g., high status job - like medical doctors, executives of corporations that are national in scope, professional athletes in the NBA or NFL; upper 1/5 of income bracket), "clear indication of wealth in opinion", "other - above poverty line but not clearly wealthy" (e.g., public school teachers, federal government employees)." Note that "poor" means below the federal poverty line; e.g., welfare or food stamp recipients. There must be some specific indication in the opinion that you can point to before anyone is classified anything other than "not ascertained". Prisoners filing "pro se" were classified as poor, but litigants in civil cases who proceed pro se were not presumed to be poor. Wealth obtained from the crime at issue in a criminal case was not counted when determining the wealth of the criminal defendant (e.g., drug dealers).
Benjamin Frederick MEYERS, Appellant, v. UNITED STATES of America, Appellee.
No. 19484.
United States Court of Appeals Fifth Circuit.
Dec. 11, 1962.
Bernard A. Golding, Houston, Tex., for appellant.
William A. Jackson, Asst. U. S. Atty., Woodrow Seals, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., for appellee.
Before TUTTLE, Chief Judge, and HUTCHESON and BROWN, Circuit Judges.
JOSEPH C. HUTCHESON, Jr., Circuit Judge.
This is an appeal from a conviction on charges of a conspiracy in violation of Sec. 176a Title 21 U.S.C.A. and the smuggling of narcotics. Appellant was indicted with his wife, who jumped bail and did not stand trial when he did. He was acquitted on count three of the indictment and convicted on counts one and two.
The evidence taken most favorably to the verdict showed that Mrs. Meyers came driving over the bridge from Nuevo Laredo about 8:30 P.M. on July 29, 1961, in a rented Chevrolet car and that on search of the vehicle cellophane packages containing marihuana were found stuffed in the far side of the door panel, and because the inspector’s arms were not long enough to reach the packages, another inspector was called who rolled up his sleeves and reached in and recovered the packages, receiving scratches on his arm while doing so.
The witness further testified: that the motor vehicle was heavily perfumed and there was no odor of marihuana; that he placed Mrs. Meyers under arrest and escorted her to the baggage inspection room where she was searched by a customs inspector and a search sheet was made on her personal history; that on the same evening about 10:15 P.M., he saw the appellant, after Inspector Pearson had called his attention to appellant’s presence on the bridge, and appellant was questioned and gave his address and his occupation; that a search of his baggage disclosed that he had a metal cologne bottle, a pair of gloves and a note book; that in the opinion of the witness the odor from the cologne bottle taken from appellant’s baggage was similar to that discovered in the car driven by Mrs. Meyers. He also testified that appellant had scratches on his arms similar to those he and Inspector Munoz had received in their search for the marihuana. He stated further that appellant advised him that he and his wife were separated and he explained to the inspector that the scratches on his forearm were received by him while engaging in a romantic embrace; and that he explained his possession of the gloves by saying that he did yard work at home and that was the reason for their presence.
It was testified by Witness Cavazos that Mrs. Meyers had rented a car from him in Laredo in September, 1960, and that appellant was not present at any time during the transaction. After Mrs. Meyers was placed in jail, appellant advised the agent that he was married to the female who drove the car across the bridge and who was later placed in jail. Later appellant was placed in jail. It was testified to by persons employed at Hotel Jar din in Monterrey, Mexico, that appellant and his wife occupied a room at that hotel from about July 20 to July 25, 1961. It was also testified by a travel agency employee at Brownsville that he rented a car to appellant’s wife but appellant was not present.
As appellant recapitulates and weighs this evidence, he insists that it shows that appellant had no contraband on his person, that he was not seen in, nor did he occupy, the motor vehicle with his wife, but that he merely appeared walking across the bridge at a later time that night after she had driven onto the bridge.
The appellant is here urging as his main position that the evidence as to the defendant, being circumstantial, was wholly insufficient to support the conviction within the rule governing a conviction on circumstantial evidence and that a verdict should have been instructed for the defendant. In addition to this point, the appellant urges that the court erred in overruling appellant’s motion for new trial based on evidence discovered after the jury verdict was returned.
Another point is made that there was no evidence to show that defendant was in a conspiracy with anybody and that there was no proof that he was a party to the smuggling of the contraband found in his wife’s car. In addition, he claims error in the refusal of requested charges.
Taking up these points in turn, we think it clear, as to the claim that the evidence was insufficient to support the verdict, that this is just another case where the appellant, convicted on circumstantial evidence, seeks to have the Court of Appeals take over the function of the jury and retry the case, and that there is no merit whatever in this contention and argument. We think the circumstances taken together as a whole completely foreclose any other conclusion than that the wife and husband had made what they thought was a shrewd plan to have her smuggle the stuff in and, after it had been safely smuggled in, the defendant was to rejoin her in Laredo. Unfortunately for the planners their whole scheme blew up when the defendant came onto the bridge while his wife was still there under an examination and search, followed by an arrest.
The motion for new trial is equally without merit. During the trial the Government, as a circumstance showing that the defendant and wife had made arrangements to meet after the narcotics had been smuggled in, noted that there was found in her possession or on her person only a very small amount of money and that the meeting must have been prearranged so as to provide her with sufficient money. In the motion for new trial the defendant offered to prove by an officer who was not put on the stand that the wife had considerably more money than was testified to, and, in further support of the motion, the appellant points out that the district judge had commented to the jury on this item of the small amount of money in Mrs. Meyers’ possession. Error was not assigned on the comment nor could it have been, and there is nothing more in the point on the motion for new trial than there is in any such motion on the ground of newly discovered evidence, as to which it is uniformly held that action on it is in the sound discretion of the district judge.
Of the other ground for reversal, the failure to give the requested charges, it is sufficient, without setting any of them out, to say that none of them present reversible error and that the judgment is therefore affirmed.
Affirmed.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Which of these categories best describes the income of the litigant?
A. not ascertained
B. poor + wards of state
C. presumed poor
D. presumed wealthy
E. clear indication of wealth in opinion
F. other - above poverty line but not clearly wealthy
Answer:
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sc_respondent
|
028
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the respondent of the case. The respondent is the party being sued or tried and is also known as the appellee. Characterize the respondent as the Court's opinion identifies them.
Identify the respondent by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the respondent is actually single entitiy or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single respondent, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
AKE v. OKLAHOMA
No. 83-5424.
Argued November 7, 1984
Decided February 26, 1985
Marshall, J., delivered the opinion of the Court, in which Brennan, White, Blackmun, Powell, Stevens, and O’Connor, JJ., joined. Burger, C. J., filed an opinion concurring in the judgment, post, p. 87. Rehnquist, J., filed a dissenting opinion, post, p. 87.
Arthur B. Spitzer argued the cause for petitioner. With him on the briefs were Elizabeth Symonds, Charles S. Sims, Burt Neubome, and William B. Rogers.
Michael C. Turpén, Attorney General of Oklahoma, argued the cause for respondent. With him on the brief was David W. Lee, Assistant Attorney General.
Briefs of amici curiae urging reversal were filed for the New Jersey Department of the Public Advocate by Joseph H. Rodriguez and Michael L. Perlin; for the American Psychiatric Association by Joel I. Klein; and for the American Psychological Association et al. by Margaret Farrell Ewing, Donald N. Bersoff, and Bruce J. Ennis. Briefs of amici curiae also supporting petitioner were filed for the Public Defender of Oklahoma et al. by Robert A. Ravitz, Frank McCarthy, and Thomas J. Ray, Jr.; and for the National Legal Aid and Defender Association et al. by Richard J. Wilson and James M. Doyle.
Justice Marshall
delivered the opinion of the Court.
The issue in this case is whether the Constitution requires that an indigent defendant have access to the psychiatric examination and assistance necessary to prepare an effective defense based on his mental condition, when his sanity at the time of the offense is seriously in question.
I
Late in 1979, Glen Burton Ake was arrested and charged with murdering a couple and wounding their two children. He was arraigned in the District Court for Canadian County, Okla., in February 1980. His behavior at arraignment, and in other prearraignment incidents at the jail, was so bizarre that the trial judge, sua sponte, ordered him to be examined by a psychiatrist “for the purpose of advising with the Court as to his impressions of whether the Defendant may need an extended period of mental observation.” App. 2. The examining psychiatrist reported: “At times [Ake] appears to be frankly delusional.... He claims to be the ‘sword of vengeance’ of the Lord and that he will sit at the left hand of God in heaven.” Id., at 8. He diagnosed Ake as a probable paranoid schizophrenic and recommended a prolonged psychiatric evaluation to determine whether Ake was competent to stand trial.
In March, Ake was committed to a state hospital to be examined with respect to his “present sanity,” i. e., his competency to stand trial. On April 10, less than six months after the incidents for which Ake was indicted, the chief forensic psychiatrist at the state hospital informed the court that Ake was not competent to stand trial. The court then held a competency hearing, at which a psychiatrist testified:
“[Ake] is a psychotic... his psychiatric diagnosis was that of paranoid schizophrenia — chronic, with exacerbation, that is with current upset, and that in addition... he is dangerous.... [B]ecause of the severity of his mental illness and because of the intensities of his rage, his poor control, his delusions, he requires a maximum security facility within — I believe — the State Psychiatric Hospital system.” Id., at 11-12.
The court found Ake to be a “mentally ill person in need of care and treatment” and incompetent to stand trial, and ordered him committed to the state mental hospital.
Six weeks later, the chief forensic psychiatrist informed the court that Ake had become competent to stand trial. At the time, Ake was receiving 200 milligrams of Thorazine, an antipsychotic drug, three times daily, and the psychiatrist indicated that, if Ake continued to receive that dosage, his condition would remain stable. The State then resumed proceedings against Ake.
At a pretrial conference in June, Ake’s attorney informed the court that his client would raise an insanity defense. To enable him to prepare and present such a defense adequately, the attorney stated, a psychiatrist would have to examine Ake with respect to his mental condition at the time of the offense. During Ake’s 3-month stay at the state hospital, no inquiry had been made into his sanity at the time of the offense, and, as an indigent, Ake could not afford to pay for a psychiatrist. Counsel asked the court either to arrange to have a psychiatrist perform the examination, or to provide funds to allow the defense to arrange one. The trial judge rejected counsel’s argument that the Federal Constitution requires that an indigent defendant receive the assistance of a psychiatrist when that assistance is necessary to the defense, and he denied the motion for a psychiatric evaluation at state expense on the basis of this Court’s decision in United States ex rel. Smith v. Baldi, 344 U. S. 561 (1953).
Ake was tried for two counts of murder in the first degree, a crime punishable by death in Oklahoma, and for two counts of shooting with intent to kill. At the guilt phase of trial, his sole defense was insanity. Although defense counsel called to the stand and questioned each of the psychiatrists who had examined Ake at the state hospital, none testified about his mental state at the time of the offense because none had examined him on that point. The prosecution,- in turn, asked each of these psychiatrists whether he had performed or seen the results of any examination diagnosing Ake’s mental state at the time of the offense, and each doctor replied that he had not. As a result, there was no expert testimony for either side on Ake’s sanity at the time of the offense. The jurors were then instructed that Ake could be found not guilty by reason of insanity if he did not have the ability to distinguish right from wrong at the time of the alleged offense. They were farther told that Ake was to be presumed sane at the time of the crime unless he presented evidence sufficient to raise a reasonable doubt about his sanity at that time. If he raised such a doubt in their minds, the jurors were informed, the burden of proof shifted to the State to prove sanity beyond a reasonable doubt. The jury rejected Ake’s insanity defense and returned a verdict of guilty on all counts.
At the sentencing proceeding, the State asked for the death penalty. No new evidence was presented. The prosecutor relied significantly on the testimony of the state psychiatrists who had examined Ake, and who had testified at the guilt phase that Ake was dangerous to society, to establish the likelihood of his future dangerous behavior. Ake had no expert witness to rebut this testimony or to introduce on his behalf evidence in mitigation of his punishment. The jury sentenced Ake to death on each of the two murder counts, and to 500 years’ imprisonment on each of the two counts of shooting with intent to kill.
On appeal to the Oklahoma Court of Criminal Appeals, Ake argued that, as an indigent defendant, he should have been provided the services of a court-appointed psychiatrist. The court rejected this argument, observing: “We have held numerous times that, the unique nature of capital cases notwithstanding, the State does not have the responsibility of providing such services to indigents charged with capital crimes.” 663 P. 2d 1, 6 (1983). Finding no error in Ake’s other claims, the court affirmed the convictions and sentences. We granted certiorari. 465 U. S. 1099 (1984).
We hold that when a defendant has made a preliminary-showing that his sanity at the time of the offense is likely to be a significant factor at trial, the Constitution requires that a State provide access to a psychiatrist’s assistance on this issue if the defendant cannot otherwise afford one. Accordingly, we reverse.
II
Initially, we must address our jurisdiction to review this case. After ruling on the merits of Ake’s claim, the Oklahoma court observed that in his motion for a new trial Ake had not repeated his request for a psychiatrist and that the claim was thereby waived. 663 P. 2d, at 6. The court cited Hawkins v. State, 569 P. 2d 490 (Okla. Crim. App. 1977), for this proposition. The State argued in its brief to this Court that the court’s holding on this issue therefore rested on an adequate and independent state ground and ought not be reviewed. Despite the court’s state-law ruling, we conclude that the state court’s judgment does not rest on an independent state ground and that our jurisdiction is therefore properly exercised.
The Oklahoma waiver rule does not apply to fundamental trial error. See Hawkins v. State, supra, at 493; Gaddis v. State, 447 P. 2d 42, 45-46 (Okla. Crim. App. 1968). Under Oklahoma law, and as the State conceded at oral argument, federal constitutional errors are “fundamental.” Tr. of Oral Arg. 51-52; see Buchanan v. State, 523 P. 2d 1134, 1137 (Okla. Crim. App. 1974) (violation of constitutional right constitutes fundamental error); see also Williams v. State, 658 P. 2d 499 (Okla. Crim. App. 1983). Thus, the State has made application of the procedural bar depend on an antecedent ruling on federal law, that is, on the determination of whether federal constitutional error has been committed. Before applying the waiver doctrine to a constitutional question, the state court must rule, either explicitly or implicitly, on the merits of the constitutional question.
As we have indicated in the past, when resolution of the state procedural law question depends on a federal constitutional ruling, the state-law prong of the court’s holding is not independent of federal law, and our jurisdiction is not precluded. See Herb v. Pitcairn, 324 U. S. 117, 126 (1945) (“We are not permitted to render an advisory opinion, and if the same judgment would be rendered by the state court after we corrected its views of Federal laws, our review could amount to nothing more than an advisory opinion”); Enterprise Irrigation District v. Farmers Mutual Canal Co., 243 U. S. 157, 164 (1917) (“But where the non-Federal ground is so interwoven with the other as not to be an independent matter, or is not of sufficient breadth to sustain the judgment without any decision of the other, our jurisdiction is plain”). In such a case, the federal-law holding is integral to the state court’s disposition of the matter, and our ruling on the issue is in no respect advisory. In this case, the additional holding of the state court — that the constitutional challenge presented here was waived — depends on the court’s federal-law ruling and consequently does not present an independent state ground for the decision rendered. We therefore turn to a consideration of the merits of Ake’s claim.
This Court has long recognized that when a State brings its judicial power to bear on an indigent defendant in a criminal proceeding, it must take steps to assure that the defendant has a fair opportunity to present his defense. This elementary principle, grounded in significant part on the Fourteenth Amendment’s due process guarantee of fundamental fairness, derives from the belief that justice cannot be equal where, simply as a result of his poverty, a defendant is denied the opportunity to participate meaningfully in a judicial proceeding in which his liberty is at stake. In recognition of this right, this Court held almost 30 years ago that once a State offers to criminal defendants the opportunity to appeal their cases, it must provide a trial transcript to an indigent defendant if the transcript is necessary to a decision on the merits of the appeal. Griffin v. Illinois, 351 U. S. 12 (1956). Since then, this Court has held that an indigent defendant may not be required to pay a fee before filing a notice of appeal of his conviction, Burns v. Ohio, 360 U. S. 252 (1959), that an indigent defendant is entitled to the assistance of counsel at trial, Gideon v. Wainwright, 372 U. S. 335 (1963), and on his first direct appeal as of right, Douglas v. California, 372 U. S. 353 (1963), and that such assistance must be effective. See Evitts v. Lucey, 469 U. S. 387 (1985); Strickland v. Washington, 466 U. S. 668 (1984); McMann v. Richardson, 397 U. S. 759, 771, n. 14 (1970). Indeed, in. Little v. Streater, 452 U. S. 1 (1981), we extended this principle of meaningful participation to a “quasi-criminal” proceeding and held that, in a paternity action, the State cannot deny the putative father blood grouping tests, if he cannot otherwise afford them.
h-H hH I — I
Meaningful access to justice has been the consistent theme of these cases. We recognized long ago that mere access to the courthouse doors does not by itself assure a proper functioning of the adversary process, and that a criminal trial is fundamentally unfair if the State proceeds against an indigent defendant without making certain that he has access to the raw materials integral to the building of an effective defense. Thus, while the Court has not held that a State must purchase for the indigent defendant all the assistance that his wealthier counterpart might buy, see Ross v. Moffitt, 417 U. S. 600 (1974), it has often reaffirmed that fundamental fairness entitles indigent defendants to “an adequate opportunity to present their claims fairly within the adversary system,” id., at 612. To implement this principle, we have focused on identifying the “basic tools of an adequate defense or appeal,” Britt v. North Carolina, 404 U. S. 226, 227 (1971), and we have required that such tools be provided to those defendants who cannot afford to pay for them.
To say that these basic tools must be provided is, of course, merely to begin our inquiry. In this case we must decide whether, and under what conditions, the participation of a psychiatrist is important enough to preparation of a defense to require the State to provide an indigent defendant with access to competent psychiatric assistance in preparing the defense. Three factors are relevant to this determination. The first is the private interest that will be affected by the action of the State. The second is the governmental interest that will be affected if the safeguard is to be provided. The third is the probable value of the additional or substitute procedural safeguards that are sought, and the risk of an erroneous deprivation of the affected interest if those safeguards are not provided. See Little v. Streater, supra, at 6; Mathews v. Eldridge, 424 U. S. 319, 335 (1976). We turn, then, to apply this standard to the issue before us.
A
The private interest in the accuracy of a criminal proceeding that places an individual’s life or liberty at risk is almost uniquely compelling. Indeed, the host of safeguards fashioned by this Court over the years to diminish the risk of erroneous conviction stands as a testament to that concern. The interest of the individual in the outcome of the State’s effort to overcome the presumption of innocence is obvious and weighs heavily in our analysis.
We consider, next, the interest of the State. Oklahoma asserts that to provide Ake with psychiatric assistance on the record before us would result in a staggering burden to the State. Brief for Respondent 46-47. We are unpersuaded by this assertion. Many States, as well as the Federal Government, currently make psychiatric assistance available to indigent defendants, and they have not found the financial burden so great as to preclude this assistance. This is especially so when the obligation of the State is limited to provision of one competent psychiatrist, as it is in many States, and as we limit the right we recognize today. At the same time, it is difficult to identify any interest of the State, other than that in its economy, that weighs against recognition of this right. The State’s interest in prevailing at trial— unlike that of a private litigant — is necessarily tempered by its interest in the fair and accurate adjudication of criminal cases. Thus, also unlike a private litigant, a State may not legitimately assert an interest in maintenance of a strategic advantage over the defense, if the result of that advantage is to cast a pall on the accuracy of the verdict obtained. We therefore conclude that the governmental interest in denying Ake the assistance of a psychiatrist is not substantial, in light of the compelling interest of both the State and the individual in accurate dispositions.
Last, we inquire into the probable value of the psychiatric assistance sought, and the risk of error in the proceeding if such assistance is not offered. We begin by considering the pivotal role that psychiatry has come to play in criminal proceedings. More than 40 States, as well as the Federal Government, have decided either through legislation or judicial decision that indigent defendants are entitled, under certain circumstances, to the assistance of a psychiatrist’s expertise. For example, in subsection (e) of the Criminal Justice Act, 18 U. S. C. § 3006A, Congress has provided that indigent defendants shall receive the assistance of all experts “necessary for an adequate defense.” Numerous state statutes guarantee reimbursement for expert services under a like standard. And in many States that have not assured access to psychiatrists through the legislative process, state courts have interpreted the State or Federal Constitution to require that psychiatric assistance be provided to indigent defendants when necessary for an adequate defense, or when insanity is at issue.
These statutes and court decisions reflect a reality that we recognize today, namely, that when the State has made the defendant’s mental condition relevant to his criminal culpability and to the punishment he might suffer, the assistance of a psychiatrist may well be crucial to the defendant’s ability to marshal his defense. In this role, psychiatrists gather facts, through professional examination, interviews, and elsewhere, that they will share with the judge or jury; they analyze the information gathered and from it draw plausible conclusions about the defendant’s mental condition, and about the effects of any disorder on behavior; and they offer opinions about how the defendant’s mental condition might have affected his behavior at the time in question. They know the probative questions to ask of the opposing party’s psychiatrists and how to interpret their answers. Unlike lay witnesses, who can merely describe symptoms they believe might be relevant to the defendant’s mental state, psychiatrists can identify the “elusive and often deceptive” symptoms of insanity, Solesbee v. Balkcom, 339 U. S. 9, 12 (1950), and tell the jury why their observations are relevant. Further, where permitted by evidentiary rules, psychiatrists can translate a medical diagnosis into language that will assist the trier of fact, and therefore offer evidence in a form that has meaning for the task at hand. Through this process of investigation, interpretation, and testimony, psychiatrists ideally assist lay jurors, who generally have no training in psychiatric matters, to make a sensible and educated determination about the mental condition of the defendant at the time of the offense.
Psychiatry is not, however, an exact science, and psychiatrists disagree widely and frequently on what constitutes mental illness, on the appropriate diagnosis to be attached to given behavior and symptoms, on cure and treatment, and on likelihood of future dangerousness. Perhaps because there often is no single, accurate psychiatric conclusion on legal insanity in a given case, juries remain the primary factfinders on this issue, and they must resolve differences in opinion within the psychiatric profession on the basis of the evidence offered by each party. When jurors make this determination about issues that inevitably are complex and foreign, the testimony of psychiatrists can be crucial and “a virtual necessity if an insanity plea is to have any chance of success.” By organizing a defendant’s mental history, examination results and behavior, and other information, interpreting it in light of their expertise, and then laying out their investigative and analytic process to the jury, the psychiatrists for each party enable the jury to make its most accurate determination of the truth on the issue before them. It is for this reason that States rely on psychiatrists as examiners, consultants, and witnesses, and that private individuals do as well, when they can afford to do so. In so saying, we neither approve nor disapprove the widespread reliance on psychiatrists but instead recognize the unfairness of a contrary holding in light of the evolving practice.
The foregoing leads inexorably to the conclusion that, without the assistance of a psychiatrist to conduct a professional examination on issues relevant to the defense, to help determine whether the insanity defense is viable, to present testimony, and to assist in preparing the cross-examination of a State’s psychiatric witnesses, the risk of an inaccurate resolution of sanity issues is extremely high. With such assistance, the defendant is fairly able to present at least enough information to the jury, in a meaningful manner, as to permit it to make a sensible determination.
A defendant’s mental condition is not necessarily at issue in every criminal proceeding, however, and it is unlikely that psychiatric assistance of the kind we have described would be of probable value in cases where it is not. The risk of error from denial of such assistance, as well as its probable value, is most predictably at its height when the defendant’s mental condition is seriously in question. When the defendant is able to make an ex parte threshold showing to the trial court that his sanity is likely to be a significant factor in his defense, the need for the assistance of a psychiatrist is readily apparent. It is in such cases that a defense may be devastated by the absence of a psychiatric examination and testimony; with such assistance, the defendant might have a reasonable chance of success. In such a circumstance, where the potential accuracy of the jury’s determination is so dramatically enhanced, and where the interests of the individual and the State in an accurate proceeding are substantial, the State’s interest in its fisc must yield.
We therefore hold that when a defendant demonstrates to the trial judge that his sanity at the time of the offense is to be a significant factor at trial, the State must, at a minimum, assure the defendant access to a competent psychiatrist who will conduct an appropriate examination and assist in evaluation, preparation, and presentation of the defense. This is not to say, of course, that the indigent defendant has a constitutional right to choose a psychiatrist of his personal liking or to receive funds to hire his own. Our concern is that the indigent defendant have access to a competent psychiatrist for the purpose we have discussed, and as in the case of the provision of counsel we leave to the States the decision on how to implement this right.
B
Ake also was denied the means of presenting evidence to rebut the State’s evidence of his future dangerousness. The foregoing discussion compels a similar conclusion in the context of a capital sentencing proceeding, when the State presents psychiatric evidence of the defendant’s future, dangerousness. We have repeatedly recognized the defendant’s compelling interest in fair adjudication at the sentencing phase of a capital case. The State, too, has a profound interest in assuring that its ultimate sanction is not erroneously imposed, and we do not see why monetary considerations should be more persuasive in this context than at trial. The variable on which we must focus is, therefore, the probable value that the assistance of a psychiatrist will have
Question: Who is the respondent of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
|
songer_state
|
11
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify the state or territory in which the case was first heard. If the case began in the federal district court, consider the state of that district court. If it is a habeas corpus case, consider the state of the state court that first heard the case. If the case originated in a federal administrative agency, answer "not applicable". Answer with the name of the state, or one of the following territories: District of Columbia, Puerto Rico, Virgin Islands, Panama Canal Zone, or "not applicable" or "not determined".
RAMBO et al. v. UNITED STATES.
No. 9361.
Circuit Court of Appeals, Fifth Circuit.
Feb. 19, 1941.
George C. Spence, of Atlanta, Ga., for appellants.
Francis Hoague, Atty., Dept. of Justice, and Norman M. Littell, Asst. Atty. Gen., both of Washington, D. C., Lawrence S. Camp, U. S. Atty., and Harvey H. Tysinger, Asst. U. S. Atty., both of Atlanta, Ga., and Erwin Sibley, Sp. Atty., Dept. of Justice, of Milledgeville, Ga., for appellee.
Before FOSTER, HOLMES, and Mc-CORD, Circuit Judges.
McCORD, Circuit Judge.
Suit was originally brought by the United States to condemn eight parcels of land in Cobb County, Georgia, for a National Memorial Military Park under the provisions of Sec. 2 of the Act of June 26, 1935, c. 315, 49 Stat. 423, 16 U.S.C.A. § 430u. The petition of the government named as defendants Kennesaw Mountain Battlefield Association, a corporation whose charter had been forfeited for nonpayment of taxes; the receivers of the corporation appointed by the Superior Court of Cobb County, Georgia; the former president of the corporation, certain named bondholders, the trustee for all bondholders, and many other persons. The court ordered that a copy of the petition be served upon the defendants and that notice of the proceeding be published in the Marietta Journal, a newspaper published in Cobb County, Georgia. After a trial before a jury, judgment for $16,000 was entered as an award of just compensation for the lands condemned. On appeal this court affirmed the judgment of the District Court, United States v. Kennesaw Mountain Battlefield Ass’n, 5 Cir., 99 F.2d 830, and the Supreme Court denied certiorari, 306 U.S. 646, 59 S.Ct. 587, 83 L.Ed. 1045.
After the mandate went down the $16,000 award was paid into the registry of the court, and on May 19, 1939, final judgment was entered vesting title to the property in the United States. After the money had been paid into court, but before it had been distributed, these appellants sought to come into the case by intervention. They claimed to own the fee-simple title to the property and sought to have the judgment and orders of the court set aside and to obtain a trial de novo to determine the value of the condemned lands. After a hearing the court declined to permit the intervention and dismissed the petition “on the grounds that it sets out no cause of action in law or equity, for relief sought”.
The appellants claim that they were the true owners of the fee-simple title to the lands because they had been stockholders and bondholders of Kennesaw Mountain Battlefield Association^ that the corporation’s charter had been forfeited and that they, as stockholders, became the owners of the assets of the corporation; that as bondholders they had acquired fee-simple title to the lands under what they term to be a decree of “strict foreclosure” in the state court; that they were never served with process or notice and were not represented in the proceedings; and that, therefore, the judgment condemning the property should be set aside.
In seeking to intervene the appellants do not allege or contend that they did not have knowledge of the condemnation proceedings when the government brought suit to condemn the land on May 26, 1936, and when it was seeking out the owners of the property. Although two of the interveners gave their addresses as Marietta, Georgia, where notice of the proceedings was published; and although they appear to be closely identified with the former president of the corporation, who appeared and took an active part in the proceedings, it appears that they sat by during the trial and waited until two appeals had been taken and judgment had been entered, and the award paid into court before they sought to assert their alleged rights. Petition for intervention was not filed until June, 1939.
We do not decide, but we are impressed with the argument that the interveners here were fully and fairly represented in the original suit filed by the government to condemn the lands in question. The state court receivers, who represented the Kennesaw Mountain Battlefield Association corporation, its stockholders, and its creditors, by direction of the court of .their appointment, participated in the condemnation case and there sought by every fair means to inform the court and jury of the value of the property. The receivers presented the' same evidence then that the interveners suggest now as to the valuation of the lands. Furthermore, the interveners were represented in the proceedings by the trustee for the bondholders, who held a deed of trust to the lands, and who was the party named in the state court decree which is now relied upon by the appellants as a decree of “strict foreclosure”. Not only were they represented but every right they claim and the relief they now seek was then litigated. They would relitigate issues which have already been settled. If, as they contend, the fee-simple title to the lands was in them, they may come in and share in the condemnation award which has been paid into the registry of the court and which now stands in the place of the lands. Cf. Cobo v. United States, 6 Cir., 94 F.2d 351; Coggleshall v. United States, 4 Cir., 95 F.2d 986; Credits Commutation Co. v. United States, 8 Cir., 91 F. 570; Id., 177 U.S. 311, 20 S.Ct. 636, 44 L.Ed. 782.
We do not pass upon the merits. We prefer to rest decision upon the proposition that the order denying appellants the right to intervene and dismissing their petition was within the sound discretion of the trial court. If we assume, as appellants contend, that they were the owners of the land and not represented in the suit, they have not been deprived of any rights they possess for the judgment in the condemnation case would not be binding as to them. Credits Commutation Co. v. United States, 177 U.S. 311, 20 S.Ct. 636, 44 L.Ed. 782; Lupfer v. Carlton, 5 Cir., 64 F.2d 272; Burrow v. Citizen’s State Bank, 5 Cir., 74 F.2d 929; Stallings v. Conn, 5 Cir., 74 F.2d 189.
The order denying and dismissing the petition to intervene is affirmed.
Question: In what state or territory was the case first heard?
01. not
02. Alabama
03. Alaska
04. Arizona
05. Arkansas
06. California
07. Colorado
08. Connecticut
09. Delaware
10. Florida
11. Georgia
12. Hawaii
13. Idaho
14. Illinois
15. Indiana
16. Iowa
17. Kansas
18. Kentucky
19. Louisiana
20. Maine
21. Maryland
22. Massachussets
23. Michigan
24. Minnesota
25. Mississippi
26. Missouri
27. Montana
28. Nebraska
29. Nevada
30. New
31. New
32. New
33. New
34. North
35. North
36. Ohio
37. Oklahoma
38. Oregon
39. Pennsylvania
40. Rhode
41. South
42. South
43. Tennessee
44. Texas
45. Utah
46. Vermont
47. Virginia
48. Washington
49. West
50. Wisconsin
51. Wyoming
52. Virgin
53. Puerto
54. District
55. Guam
56. not
57. Panama
Answer:
|
sc_lcdispositiondirection
|
B
|
What follows is an opinion from the Supreme Court of the United States. Your task is to determine whether the decision of the court whose decision the Supreme Court reviewed was itself liberal or conservative. In the context of issues pertaining to criminal procedure, civil rights, First Amendment, due process, privacy, and attorneys, consider liberal to be pro-person accused or convicted of crime, or denied a jury trial, pro-civil liberties or civil rights claimant, especially those exercising less protected civil rights (e.g., homosexuality), pro-child or juvenile, pro-indigent pro-Indian, pro-affirmative action, pro-neutrality in establishment clause cases, pro-female in abortion, pro-underdog, anti-slavery, incorporation of foreign territories anti-government in the context of due process, except for takings clause cases where a pro-government, anti-owner vote is considered liberal except in criminal forfeiture cases or those where the taking is pro-business violation of due process by exercising jurisdiction over nonresident, pro-attorney or governmental official in non-liability cases, pro-accountability and/or anti-corruption in campaign spending pro-privacy vis-a-vis the 1st Amendment where the privacy invaded is that of mental incompetents, pro-disclosure in Freedom of Information Act issues except for employment and student records. In the context of issues pertaining to unions and economic activity, consider liberal to be pro-union except in union antitrust where liberal = pro-competition, pro-government, anti-business anti-employer, pro-competition, pro-injured person, pro-indigent, pro-small business vis-a-vis large business pro-state/anti-business in state tax cases, pro-debtor, pro-bankrupt, pro-Indian, pro-environmental protection, pro-economic underdog pro-consumer, pro-accountability in governmental corruption, pro-original grantee, purchaser, or occupant in state and territorial land claims anti-union member or employee vis-a-vis union, anti-union in union antitrust, anti-union in union or closed shop, pro-trial in arbitration. In the context of issues pertaining to judicial power, consider liberal to be pro-exercise of judicial power, pro-judicial "activism", pro-judicial review of administrative action. In the context of issues pertaining to federalism, consider liberal to be pro-federal power, pro-executive power in executive/congressional disputes, anti-state. In the context of issues pertaining to federal taxation, consider liberal to be pro-United States and conservative pro-taxpayer. In miscellaneous, consider conservative the incorporation of foreign territories and executive authority vis-a-vis congress or the states or judcial authority vis-a-vis state or federal legislative authority, and consider liberal legislative veto. The lower court's decision direction is unspecifiable if the manner in which the Supreme Court took jurisdiction is original or certification; or if the direction of the Supreme Court's decision is unspecifiable and the main issue pertains to private law or interstate relations
ENGINE MANUFACTURERS ASSOCIATION et al. v. SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT et al.
No. 02-1343.
Argued January 14, 2004
Decided April 28, 2004
Carter G. Phillips argued the cause for petitioners. With him on the briefs were Jed R. Mandel, Timothy A. French, Jeffrey T. Green, Eric A. Shumsky, Kenneth S. Getter, Andrew J. Pincus, and John J. Sullivan.
Solicitor General Olson argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Assistant Attorney General Sansonetti, Deputy Solicitor General Hurgar, Deputy Assistant Attorney General Clark, Jeffrey P. Minear, Greer S. Goldman, John A. Bryson, and R. Justin Smith.
Seth P. Waxman argued the cause for respondents. With him on the brief for respondent South Coast Air Quality Management District were C. Boyden Gray, Jonathan E. Nuechterlein, Luke A. Sobota, Daniel P. Selmi, Fran M. Layton, and Barbara Baird. Gail Ruderman Feuer and Christopher J. Wright filed a brief for respondents Natural Resources Defense Council, Inc., et al.
Briefs of amici curiae urging reversal were filed for the Chamber of Commerce of the United States of America by Catherine E. Stetson, Christopher T. Hardman, and Robin S. Conrad; for the Alliance of Automobile Manufacturers et al. by Arnold W. Reitze, Jr., Stuart A. C. Drake, Eric B. Wolff, Julie C. Becker, Charles H. Lockwood II, Jan S. Amundson, Quentin Riegel, G. William Frick, Ralph Colleli, Jr., Janice K. Raburn, and Douglas I. Greenhaus; and for the American Automotive Leasing Association et al. by Kipp A Coddington.
Briefs of amici curiae urging affirmance were filed for the State of California et al. by Bill Lockyer, Attorney General of California, Manuel M. Madeiros, Solicitor General, Richard M. Frank, Chief Assistant Attorney General, Theodora Berger, Senior Assistant Attorney General, Craig C. Thompson, Supervising Deputy Attorney General, Susan L. Durbin, Deputy Attorney General, and Kristen M. Campfield, by Anabelle Rodriguez, Secretary of Justice of Puerto Rico, and by the Attorneys General for their respective States as follows: Terry Goddard of Arizona, Thurbert E. Baker of Georgia, Lisa Madigan of Illinois, G. Steven Rowe of Maine, Tom Reilly of Massachusetts, Brian Sandoval of Nevada, Peter D. Smith of New Hampshire, Peter C. Harvey of New Jersey, Eliot Spitzer of New York, W. A Drew Edmondson of Oklahoma, Hardy Myers of Oregon, Greg Abbott of Texas, William H. Sorrell of Vermont, Christine O. Gregoire of Washington, and Peggy A Lautenschlager of Wisconsin; for the American Academy of Pediatrics (California District) et al. by David M. Driesen; for the National League of Cities et al. by Richard Ruda and Timothy J. Dowling; for the Natural Gas Vehicle Coalition et al. by Gary S. Guzy; and for the Sunline Transit Agency by Lisa Garvin Copeland.
A brief of amici curiae was filed for the American Road & Transportation Builders Association et al. by Lawrence J. Joseph, Robert Digges, Jr., and Mary Lynn Picket.
Justice Scalia
delivered the opinion of the Court.
Respondent South Coast Air Quality Management District (District) is a political subdivision of California responsible for air pollution control in the Los Angeles metropolitan area. and parts of surrounding counties that make up the South Coast Air Basin. It enacted six Fleet Rules that generally prohibit the purchase or lease by various public and private fleet operators of vehicles that do not comply with stringent emission requirements. The question in this case is whether these local Fleet Rules escape pre-emption under § 209(a) of the Clean Air Act (CAA), 81 Stat. 502, as renumbered and amended, 42 U. S. C. § 7543(a), because they address the purchase of vehicles, rather than their manufacture or sale.
I
The District is responsible under state law for developing and implementing a “comprehensive basinwide air quality management plan” to reduce emission levels and thereby achieve and maintain “state and federal ambient air quality standards.” Cal. Health & Safety Code Ann. § 40402(e) (West 1996). Between June and October 2000, the District adopted six Fleet Rules. The Rules govern operators of fleets of street sweepers (Rule 1186.1), of passenger cars, light-duty trucks, and medium-duty vehicles (Rule 1191), of public transit vehicles and urban buses (Rule 1192), of solid waste collection vehicles (Rule 1193), of airport passenger transportation vehicles, including shuttles and taxicabs picking up airline passengers (Rule 1194), and of heavy-duty on-road vehicles (Rule 1196). All six Rules apply to public operators; three apply to private operators as well (Rules 1186.1, 1193, and 1194).
The Fleet Rules contain detailed prescriptions regarding the types of vehicles that fleet operators must purchase or lease when adding or replacing fleet vehicles. Four of the Rules (1186.1, 1192, 1193, and 1196) require the purchase or lease of “alternative-fuel vehicles,” and the other two (1191 and 1194) require the purchase or lease of either “alternative-fueled vehicles” or vehicles that meet certain emission specifications established by the California Air Resources Board (CARB). CARB is a statewide regulatory body that California law designates as “the air pollution control agency for all purposes set forth in federal law.” Cal. Health & Safety Code Ann. § 39602 (West 1996). The Rules require operators to keep records of their purchases and leases and provide access to them upon request. See, e. g., Rule 1186.1(g)(1), App. 23. Violations expose fleet operators to fines and other sanctions. See Cal. Health & Safety Code Ann. §§42400-42410, 40447.5 (West 1996 and Supp. 2004).
In August 2000, petitioner Engine Manufacturers Association sued the District and its officials, also respondents, claiming that the Fleet Rules are pre-empted by §209 of the CAA, which prohibits the adoption or attempted enforcement of any state or local “standard relating to the control of emissions from new motor vehicles or new motor vehicle engines.” 42 U. S. C. § 7543(a). The District Court granted summary judgment to respondents, upholding the Rules in their entirety. It held that the Rules were not “standard[s]” under § 209(a) because they regulate only the purchase of vehicles that are otherwise certified for sale in California. The District Court recognized that the Courts of Appeals for the First and Second Circuits had previously held that CAA § 209(a) pre-empted state laws mandating that a specified percentage of a manufacturer’s in-state sales be of “zero-emission vehicles.” See Association of Int’l Automobile Mfrs., Inc. v. Commissioner, Mass. Dept. of Environmental Protection, 208 F. 3d 1, 6-7 (CA1 2000); American Automobile Mfrs. Assn. v. Cahill, 152 F. 3d 196, 200 (CA2 1998). It did not express disagreement with these rulings, but distinguished them as involving a restriction on vehicle sales rather than vehicle purchases: “Where a state regulation does not compel manufacturers to meet a new emissions limit, but rather affects the purchase of vehicles, as the Fleet Rules do, that regulation is not a standard.” 158 F. Supp. 2d 1107, 1118 (CD Cal. 2001).
The Ninth Circuit affirmed on the reasoning of the District Court. 309 F. 3d 550 (2002). We granted certiorari. 539 U. S. 914 (2003).
II
Section 209(a) of the CAA states:
“No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part. No State shall require certification, inspection, or any other approval relating to the control of emissions ... as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment.” 42 U. S. C. § 7543(a).
The District Court’s determination that this express preemption provision did not invalidate the Fleet Rules hinged on its interpretation of the word “standard” to include only regulations that compel manufacturers to meet specified emission limits. This interpretation of “standard” in turn caused the court to draw a distinction between purchase restrictions (not pre-empted) and sale restrictions (preempted). Neither the manufacturer-specific interpretation of “standard” nor the resulting distinction between purchase and sale restrictions finds support in the text of § 209(a) or the structure of the CAA.
“Statutory construction must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.” Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U. S. 189, 194 (1985). Today, as in 1967 when § 209(a) became law, “standard” is defined as that which “is established by authority, custom, or general consent, as a model or example; criterion; test.” Webster’s Second New International Dictionary 2455 (1945). The criteria referred to in § 209(a) relate to the emission characteristics of a vehicle or engine. To meet them the vehicle or engine must not emit more than a certain amount of a given pollutant, must be equipped with a certain type of pollution-control device, or must have some other design feature related to the control of emissions. This interpretation is consistent with the use of “standard” throughout Title II of the CAA (which governs emissions from moving sources) to denote requirements such as numerical emission levels with which vehicles or engines must comply, e. g., 42 U. S. C. § 7521(a)(3)(B)(ii), or emission-control technology with which they must be equipped, e. g., § 7521(a)(6).
Respondents, like the courts below, engraft onto this meaning of “standard” a limiting component, defining it as only “[a] production mandat[e] that require[s] manufacturers to ensure that the vehicles they produce have particular emissions characteristics, whether individually or in the aggregate.” Brief for Respondent South Coast Air Quality Management District 13 (emphases added). This confuses standards with the means of enforcing standards. Manufacturers (or purchasers) can be made responsible for ensuring that vehicles comply with emission standards, but the standards themselves are separate from those enforcement techniques. While standards target vehicles or engines, standard-enforcement efforts that are proscribed by §209 can be directed to manufacturers or purchasers.
The distinction between “standards,” on the one hand, and methods of standard enforcement, on the other, is borne out in the provisions immediately following § 202. These separate provisions enforce the emission criteria — i. e., the §202 standards. Section 203 prohibits manufacturers from selling any new motor vehicle that is not covered by a “certificate of conformity.” 42 U. S. C. § 7522(a). Section 206 enables manufacturers to obtain such a certificate by demonstrating to the Environmental Protection Agency that their vehicles or engines conform to the §202 standards. §7525. Sections 204 and 205 subject manufacturers, dealers, and others who violate the CAA to fines imposed in civil or administrative enforcement actions. §§7523-7524. By defining “standard” as a “production mandate directed toward manufacturers,” respondents lump together §202 and these other distinct statutory provisions, acknowledging a standard to be such only when it is combined with a mandate that prevents manufacturers from selling noncomplying vehicles.
That a standard is a standard even when not enforced through manufacturer-directed regulation can be seen in Congress’s use of the term in another portion of the CAA. As the District Court recognized, CAA § 246 (in conjunction with its accompanying provisions) requires state-adopted and federally approved “restrictions on the purchase of fleet vehicles to meet clean-air standards” 158 F. Supp. 2d, at 1118 (emphasis added); see also 42 U. S. C. §§7581-7590. (Respondents do not defend the District’s Fleet Rules as authorized by this provision; the Rules do not comply with all of the requirements that it contains.) Clearly, Congress contemplated the enforcement of emission standards through purchase requirements.
Respondents contend that their qualified meaning of “standard” is necessary to prevent § 209(a) from pre-empting “far too much” by “encompass[ing] a broad range of state-level clean-air initiatives” such as voluntary incentive programs. Brief for Respondent South Coast Air Quality Management District 29; id., at 29-30. But it is hard to see why limitation to mandates on manufacturers is necessary for this purpose; limitation to mandates on manufacturers and purchasers, or to mandates on anyone, would have the same salvific effect. We need not resolve application of § 209(a) to voluntary incentive programs in this case, since all the Fleet Rules are mandates.
In addition to having no basis in the text of the statute, treating sales restrictions and purchase restrictions differently for pre-emption purposes would make no sense. The manufacturer’s right to sell federally approved vehicles is meaningless in the absence of a purchaser’s right to buy them. It is true that the Fleet Rules at issue here cover only certain purchasers and certain federally certified vehicles, and thus do not eliminate all demand for covered vehicles. But if one State or political subdivision may enact such rules, then so may any other; and the end result would undo Congress’s carefully calibrated regulatory scheme.
A command, accompanied by sanctions, that certain purchasers may buy only vehicles with particular emission characteristics is as much an “attempt to enforce” a “standard” as a command, accompanied by sanctions, that a certain percentage of a manufacturer’s sales volume must consist of such vehicles. We decline to read into § 209(a) a purchase/ sale distinction that is not to be found in the text of § 209(a) or the structure of the CAA.
Ill
The dissent expresses many areas of disagreement with our interpretation, but this should not obscure its agreement with our answer to the question “whether these local Fleet Rules escape pre-emption ... because they address the purchase of vehicles, rather than their manufacture or sale.” Supra, at 249. The dissent joins us in answering “no.” See post, at 262-263 (opinion of Souter, J.). It reaches a different outcome in the case because (1) it feels free to read into the unconditional words of the statute a requirement for the courts to determine which purchase restrictions in fact coerce manufacture and which do not; and (2) because it believes that Fleet Rules containing a “commercial availability” proviso do not coerce manufacture.
As to the first point: The language of § 209(a) is categorical. It is (as we have discussed) impossible to find in it an exception for standards imposed through purchase restrictions rather than directly upon manufacturers; it is even more inventive to discover an exception for only that sw&category of standards-imposed-through-purchase-restrictions that does hot coerce manufacture. But even if one accepts that invention, one cannot conclude that these “provisos” save the day. For if a vehicle of the mandated type were commercially available, thus eliminating application of the proviso, the need to sell vehicles to persons governed by the Rule would effectively coerce manufacturers into meeting the artificially created demand. To say, as the dissent does, that this would be merely the consequence of “market demand and free competition,” post, at 263, is fanciful. The demand is a demand, not generated by the market but compelled by the Rules, which in turn effectively compels production. To think that the Rules are invalid until such time as one manufacturer makes a compliant vehicle available, whereupon they become binding, seems to us quite bizarre.
The dissent objects to our interpretive method, which neither invokes the “presumption against preemption” to determine the scope of pre-emption nor delves into legislative history. Post, at 260-261. Application of those methods, on which not all Members of this Court agree, demonstrably makes no difference to resolution of the principal question, which the dissent (after applying them) answers the same as we. As for the additional question that the dissent reaches, we think the same is true: The textual obstacles to the strained interpretation that would validate the Rules by reason of the “commercial availability” provisos are insurmountable — principally, the categorical words of § 209(a). The dissent contends that giving these words their natural meaning of barring implementation of standards at the purchase and sale stage renders superfluous the second sentence of § 209(a), which provides: “No State shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment.” 42 U. S. C. § 7543(a). We think it not superfluous, since it makes clear that the term “attempt to enforce” in the first sentence is not limited to the actual imposition of penalties for violation, but includes steps preliminary to that action. Ibid. The sentence is, however, fatal to the dissent’s interpretation of the statute. It categorically prohibits “certification, inspection, or any other approval” as conditions precedent to sale. Why in the world would it do that if it had no categorical objection to standards imposed at the sale stage? Why disable the States from assuring compliance with requirements that they are authorized to impose?
The dissent next charges that our interpretation attributes carelessness to Congress because §246 mandates fleet purchasing restrictions, but does so without specifying “notwithstanding” § 209(a). Post, at 264. That addition might have been nice, but hardly seems necessary. It is obvious, after all, that the principal sales restrictions against which § 209(a) is directed are those requiring compliance with state-imposed standards. What §246 mandates are fleet purchase restrictions under federal standards designed precisely for federally required clean-fuel fleet vehicle programs — which programs, in turn, must be federally approved as meeting detailed federal specifications. It is not surprising that a “notwithstanding” § 209(a) did not come to mind. Far from easting doubt upon our interpretation, § 246 is impossible to reconcile with the dissent’s interpretation. The fleet purchase standards it mandates must comply strictly with federal specifications, being neither more lenient nor more demanding. But what is the use of imposing such a limitation if the States are entirely free to impose their own fleet purchase standards with entirely different specifications?
Finally, the dissent says that we should “admit” that our opinion pre-empts voluntary incentive programs. Post, at 265-266. Voluntary programs are not at issue in this case, and are significantly different from eommand-and-control regulation. Suffice it to say that nothing in the present opinion necessarily entails pre-emption of voluntary programs. It is at least arguable that the phrase “adopt or attempt to enforce any standard” refers only to standards that are enforceable — a possibility reinforced by the fact that the prohibition is imposed only on entities (States and political subdivisions) that have power to enforce.
IV
The courts below held all six of the Fleet Rules to be entirely outside the pre-emptive reach of § 209(a) based on reasoning that does not withstand scrutiny. In light of the principles articulated above, it appears likely that at least certain aspects of the Fleet Rules are pre-empted. For example, the District may have attempted to enforce CARB’s ULEV, SULEV, and ZEV standards when, in Rule 1194, it required 50% of new passenger-car and medium-duty-vehicle purchases by private airport-shuttle van operators to “meet ULEV, SULEV, or ZEV emission standards” after July 1, 2001, and 100% to meet those standards after July 1, 2002. See Rules 1194(d)(2)(A)-(B), App. 62.
It does not necessarily follow, however, that the Fleet Rules are pre-empted in toto. -We have not addressed a number of issues that may affect the ultimate disposition of petitioners’ suit, including the scope of petitioners’ challenge, whether some of the Fleet Rules (or some applications of them) can be characterized as internal state purchase decisions (and, if so, whether a different standard for preemption applies), and whether § 209(a) pre-empts the Fleet Rules even as applied beyond the purchase of new vehicles (e. g., to lease arrangements or to the purchase of used vehicles). These questions were neither passed on below nor presented in the petition for certiorari. They are best addressed in the first instance by the lower courts in light of the principles articulated above.
The judgment is vacated, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
These Rules define “alternative-fuel vehicles” in varying ways, but all exclude vehicles that run on diesel. See Rule 1186.1(c)(2), App. 17 (a vehicle with an engine that “use[s] compressed or liquefied natural gas, liquefied petroleum gas (propane), methanol, electricity, or fuel cells. Hybrid-electric and dual-fuel technologies that use diesel fuel are not considered alternative-fuel technologies for the purposes of this rule”); Rule 1192(c)(1), id., at 47 (same definition as Rule 1186.1 for the most part, but also adds that the vehicle must “mee[t] the emission requirements of Title 13, Section 1956.1 of the California Code of Regulations”); Rule 1193(c)(1), id., at 52 (a vehicle that “uses compressed or liquefied natural gas, liquefied petroleum gas, methanol, electricity, fuel cells, or other advanced technologies that do not rely on diesel fuel”); Rule 1196(c)(1), id., at 66-67 (same definition as Rule 1193 for the most part, but also adds that the vehicle must be “certified by the California Air Resources Board”).
Rule 1191(c)(1), id., at 24-25, defines “alternative-fueled vehicle” as a vehicle that “is not powered by gasoline or diesel fuel and emits hydrocarbon, carbon monoxide, or nitrogen oxides, on an individual basis at least equivalent to or lower than a ULEV [acronym described in n. 3, infra].” Rule 1194(c)(2), App. 59, defines “alternative-fueled vehicle”, as a vehicle that “is not powered by gasoline or diesel fuel.”
More specifically, Rules 1191(d), (e)(1), id., at 27-28, require that these vehicles comply with CARB’s Low-Emission Vehicle (LEV), Ultra-Low-Emission Vehicle (ULEV), Super-Ultra-Low-Emission Vehicle (SULEV), or Zero-Emission Vehicle (ZEV) standards. Rule 1194(d), id., at 61-63, requires that the vehicles comply with the ULEV, SULEV, or ZEV standards. LEV, ULEV, SULEV, and ZEV are acronyms adopted by CARB as part of a federally approved emission reduction program. This program establishes five tiers of vehicles based on their emission characteristics: Transitional Low-Emission Vehicles (TLEVs); LEVs; ULEVs; SULEVs; and ZEVs. The tiers are subject to varying emission limitations for carbon monoxide, formaldehyde, nonmethane organic gases,' oxides of nitrogen, and particulate matter. See Cal. Code Regs., tit. 13, §§ 1960.1(e)(3), (g), (h)(2), (p), § 1961(a) (2004). No vehicle may be sold in California unless it meets the TLEV, LEV, ULEV, SULEV, or ZEV requirements. See Cal. Health & Safety Code Ann. §§43009, 43016-43017, 43102, 43105, 43150-43156 (West 1996). Additionally, manufacturers are obligated to meet overall “fleet average” emission requirements. The fleet average emission requirements decrease over time, requiring manufacturers to sell progressively cleaner mixes of vehicles. See Cal. Code Regs., tit. 13, §§ 1960.1(g)(2), 1961(b) (2004). Manufacturers retain flexibility to decide how many vehicles in each emission tier to sell in order to meet the fleet average. See 158 F. Supp. 2d 1107,1113-1114 (CD Cal. 2001).
Petitioner Western States Petroleum Association intervened as a plaintiff. Respondents Coalition for Clean Air, Inc., Natural Resources Defense Council, Inc., Communities for a Better Environment, Inc., Planning and Conservation League, and Sierra Club intervened as defendants.
The ZEV requirements at issue in these cases were virtually identical to those previously promulgated by CARB. See Association of Int’l Automobile Mfrs., Inc. v. Commissioner, Mass. Dept. of Environmental Protection, 208 F. 3d, at 1, 3; American Automobile Mfrs. Assn. v. Cahill, 152 F. 3d, at 199.
The District Court reasoned that “[i]t is not rational to conclude that the CAA would authorize purchasing restrictions on the one hand, and prohibit them, as a prohibited adoption of a ‘standard,’ on the other.” 158 F. Supp. 2d, at 1118. This reasoning is flawed; it is not irrational to view Congress’s prescription of numerous detailed requirements for such programs as inconsistent with unconstrained state authority to enact programs that ignore those requirements.
For a description of the ULEV, SULEV, and ZEV standards, see n. 3, supra.
Question: What is the ideological direction of the decision reviewed by the Supreme Court?
A. Conservative
B. Liberal
C. Unspecifiable
Answer:
|
songer_appel1_7_5
|
B
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine which of these categories best describes the income of the litigant. Consider the following categories: "not ascertained", "poor + wards of state" (e.g., patients at state mental hospital; not prisoner unless specific indication that poor), "presumed poor" (e.g., migrant farm worker), "presumed wealthy" (e.g., high status job - like medical doctors, executives of corporations that are national in scope, professional athletes in the NBA or NFL; upper 1/5 of income bracket), "clear indication of wealth in opinion", "other - above poverty line but not clearly wealthy" (e.g., public school teachers, federal government employees)." Note that "poor" means below the federal poverty line; e.g., welfare or food stamp recipients. There must be some specific indication in the opinion that you can point to before anyone is classified anything other than "not ascertained". Prisoners filing "pro se" were classified as poor, but litigants in civil cases who proceed pro se were not presumed to be poor. Wealth obtained from the crime at issue in a criminal case was not counted when determining the wealth of the criminal defendant (e.g., drug dealers).
Frank SHAPIRO, Plaintiff-Appellant, v. Abraham RIBICOFF as Secretary of Health, Education & Welfare of the United States of America, Defendant-Appellee.
No. 319, Docket 28093.
United States Court of Appeals Second Circuit.
Submitted March 11, 1963.
Decided April 17, 1963.
Frank Shapiro, plaintiff-appellant, appearing pro se.
Arthur S. Olick, Asst. U. S. Atty., Southern District of New York (Robert M. Morgenthau, U. S. Atty., on the brief), for defendant-appellee.
Before MOORE, FRIENDLY and SMITH, Circuit Judges.
MOORE, Circuit Judge.
This case came before us on a motion to dismiss the appeal because of the appellant’s failure to prosecute the same. We denied the motion and, with the approval of both parties, decided to hear the appeal on the basis of the record in the district court. The appeal is taken by the plaintiff below from a judgment on the pleadings in defendant’s favor entered in the United States District Court for the Southern District of New York on April 10, 1962.
Plaintiff, suing pro se and as a poor person, brought the action under Section 205(g) of the Social Security Act, as amended, 42 U.S.C. § 405(g), to review a final decision of the Secretary of Health, Education and Welfare which denied the plaintiff old-age insurance benefits for any period prior to November, 1953, because it was not until that month that plaintiff earned his sixth and qualifying quarter of coverage requisite to statutory status as a “fully insured” person. 42 U.S.C. § 414(a) (2). The amount in question is $360 plus interest, representing $30 a month from April 10, 1954 to April 10, 1955. Plaintiff claims he is entitled to this amount because he should have been credited with “wages” earned in May or June 1953 in connection with his alleged employment by a Madame Duprey, the proprietress of a dress shop. The hearing examiner found that the services performed for Madame Du-prey were not performed in the course of an employer-employee relationship but were those of an independent contractor and did not constitute wages (42 U.S.C. §§ 409, 410(a), 410 (k) (2)), and that, in any event, actual payments for such services were not received until November 1955 so that such remuneration could not be allocated to the quarters in which appellant claims it should have been paid.
In determining whether services are rendered as an employee or as an independent contractor, the factor of the right to control not only the result, but also the details of performance, is of considerable importance. Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Higgins, 189 F.2d 865 (2d Cir. 1951); Zipser v. Ewing, 197 F.2d 728 (2d Cir. 1952); Cody v. Ribicoff, 289 F.2d 394 (8th Cir. 1961); 20 C.F.R. No. 404.1004 (c). Also of importance are such factors as to the right to discharge, the furnishing of tools and work and the permanency of the relation. Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Higgins, supra; Cody v. Ribicoff, supra; 20 C.F.R. No. 404.1004(c).
The record of the proceedings before the hearing examiner indicates that appellant operated his own business as a dress contractor and pattern-maker in the ladies clothing industry and maintained a small factory employing between two and five people for that purpose. He met Duprey, a custom dressmaker, as the result of an advertisement in a trade publication and the two explored the possibility of becoming partners in the manufacture of ladies dresses. The partnership never materialized but when Duprey opened her own dressmaking shop she engaged the plaintiff to make some patterns for her. Plaintiff contended before the examiner that he was to be paid for this work on an hourly basis but in subsequent litigation over payment for these services he claimed that Duprey agreed to pay him $150 for this pattern work.
The services were performed at Du-prey’s place of business but appellant supplied his own tools and equipment. These services were supplied only as Du-prey required them for particular dresses and were performed only in appellant’s “off” hours and at his own convenience. At the time he performed these services for Duprey, appellant performed the same and similar services for other customers, both at his factory and the customer’s place of business. As to the nature of his services, Duprey would show him a picture or drawing of a dress and provide him the measurements and material but exercised no control over the work performed by appellant. From this brief review of the record and the applicable standards, it is clear that the Secretary’s determination is based on substantial evidence and is therefore conclusive. 42 U.S.C. § 405(g); Dondero v. Celebreeze, 2d Cir., 312 F.2d 677; Newman v. Celebreeze, 2d Cir., 310 F.2d 780; Poss v. Ribicoff, 289 F.2d 10 (2d Cir., 1961), cert. denied, 368 U.S. 902, 82 S.Ct. 178, 7 L.Ed.2d 96 (1962).
Affirmed.
. This litigation terminated in a settlement whereby appellant received $125 ($50 of this to his attorney) on November 14, 1955. This is the amount appellant contends should have been credited to him for the year 1953.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Which of these categories best describes the income of the litigant?
A. not ascertained
B. poor + wards of state
C. presumed poor
D. presumed wealthy
E. clear indication of wealth in opinion
F. other - above poverty line but not clearly wealthy
Answer:
|
songer_numresp
|
1
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Your specific task is to determine the total number of respondents in the case. If the total number cannot be determined (e.g., if the respondent is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Marilyn WHEELER, Plaintiff-Appellee, v. Main HURDMAN, Defendant-Appellant.
No. 85-2601.
United States Court of Appeals, Tenth Circuit.
July 27, 1987.
Tim Correll (Mark P. Field, with him, on brief), The Correll Law Offices, P.C., Denver, Colo., for plaintiff-appellee.
Jacques M. Wood, Berkman Ruslander Pohl Lieber & Engel (Jim Clark, Baker & Hostetler, George W. Mueller, Burns, Wall, Smith & Mueller, with him, on briefs), Denver, Colo., for defendant-appellant.
Vella M. Fink (Johnny J. Butler and Gwendolyn Young Reams, with her on briefs), Washington, D.C., for amicus curiae E.E.O.C.
Before BARRETT, LOGAN and ANDERSON, Circuit Judges.
STEPHEN H. ANDERSON, Circuit Judge.
This appeal pursuant to 28 U.S.C. § 1292(b) presents a single substantive issue: whether federal antidiscrimination laws protecting employees applied to the plaintiff, Marilyn Wheeler, during the time she was a general partner of the accounting firm of Main Hurdman, a general partnership.
Marilyn Wheeler, a certified public accountant, was employed as an accountant by Main Hurdman, in progressively responsible positions, for nine years, following which she was made a partner in the firm. Seventeen months later, at age forty-seven, she was expelled from the firm. She sued Main Hurdman alleging that the partnership discriminated against her in compensation and work assignments, and expelled her because of her age or sex, in violation of: Title VII of the Civil Rights Act of 1964, (“Title VII”) 42 U.S.C. §§ 2000e to 2000e-17; the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. §§ 621-634; and the Equal Pay Act of 1963, 29 U.S.C. §§ 206(d), a subpart of the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201-219.
Main Hurdman moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b) and 12(h)(3), for want of subject matter jurisdiction. It alleged that Wheeler’s complaint did not state a claim under Title VII, the ADEA, or the Equal Pay Act “because as a partner of the Firm she was not an employee” within the definitions of those Acts. The motion was treated as one for summary judgment by the district court because affidavits were submitted, and was denied. In its order denying the motion the district court concluded that although a partner, Wheeler was also an employee for purposes of each of the Acts. It stated that it was bound by Goldberg v. Whitaker House Coop., 366 U.S. 28, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961), to apply an “economic realities” test which, in turn, dictated the conclusion reached. The court then certified the question of coverage of the Acts for immediate appeal pursuant to 28 U.S.C. § 1292(b), as a controlling question of law as to which there is substantial ground for difference of opinion. We reverse.
NATURE OF THE MOTION UNDER REVIEW
As a preliminary matter, this court must decide whether it was appropriate for the district court to “convert” the defendant’s motion to dismiss into a motion for summary judgment. Main Hurdman asserts that its motion was a Fed.R.Civ.P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction and that it was inappropriate to convert it into a motion for summary judgment absent notice to the parties.
The appellant’s motion does appear to be a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. As a general rule, a 12(b)(1) motion cannot be converted into a motion for summary judgment under Rule 56. Nichols v. United States, 796 F.2d 361, 366 (10th Cir.1986) (quoting 5 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1366 (Supp. 1986)). See also Crawford v. United States, 796 F.2d 924 (7th Cir.1986); Stanley v. CIA, 639 F.2d 1146, 1157-58 (5th Cir. Unit B Mar. 1981). There is, however, a widely recognized exception to this rule. If the jurisdictional question is intertwined with the merits of the case, the issue should be resolved under 12(b)(6) or Rule 56. Timberlane v. Bank of America, 749 F.2d 1378 (9th Cir.1984) (“Timberlane //”); Sun Valley Gas, 711 F.2d at 139; Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982); Eaton v. Dorchester Development, Inc., 692 F.2d 727, 733 (11th Cir.1982); Black v. Payne, 591 F.2d 83, 86 n. 1 (9th Cir.1979); see also J. Moore & J. Lucas, Moore’s Federal Practice ¶ 12.07[2.-1] at 12-51 (1986).
When subject matter jurisdiction is dependent upon the same statute which provides the substantive claim in the case, the jurisdictional claim and the merits are considered to be intertwined. Clark v. Tarrant County, 798 F.2d 736, 742 (5th Cir.1986) (Title VII) (determination of whether defendant was an “employer”); Timberlane II, 749 F.2d at 1381-82; Sun Valley Gas, 711 F.2d at 139; Timberlane I, 549 F.2d at 602; McConnell v. Frank Howard Allen & Co., 574 F.Supp. 781, 783-84 (N.D.Cal.1983). Courts have invoked this rule when subject matter jurisdiction has turned on whether a particular investment was a “security” under the federal securities statutes. Odom v. Slavik, 703 F.2d 212, 215-16 (6th Cir.1983); Mason v. Unkeless, 618 F.2d 597, 598 (9th Cir.1980); Smith v. Gross, 604 F.2d 639, 641 (9th Cir.1979); Black v. Payne, 591 F.2d 83 (9th Cir.1979); Roark v. Belvedere, Ltd., 633 F.Supp. 765, 770 (S.D.Ohio 1985); McConnell, 574 F.Supp. at 783-84.
We find that the determination of whether Wheeler qualifies as an employee under the federal discrimination statutes is both a jurisdictional question and an aspect of the substantive claim in her discrimination action. Since both parties have submitted additional evidence beyond the pleadings, and since the district court relied on this information, the motion was appropriately characterized as a motion for summary judgment.
Main Hurdman argues that it was not given the notice to which it was entitled prior to the court converting and ruling on the motion as a motion for summary judgment. The Tenth Circuit does require notice under such circumstances to prevent “unfair surprise.” Nichols, 796 F.2d at 364. In this case, however, there is no unfair surprise. Both parties submitted material beyond the pleadings. We have previously held that when a party submits material beyond the pleadings in support of or opposing a motion to dismiss, the prior action on the part of the parties puts them on notice that the judge may treat the motion as a Rule 56 motion. Id. The fact that Main Hurdman characterizes its motion as a Rule 12(b)(1) motion does not change our analysis. Main Hurdman identified its motion only as a 12(b) motion without specifying a particular subsection. Although the motion was made on the ground that there was a lack of subject matter jurisdiction, it was also based on the ground that Wheeler “does not and cannot state a claim” upon which relief could be granted. Main Hurdman’s Motion to Dismiss at 11118, 10, 12. Under these circumstances, it was appropriate for the court to consider the motion as a motion in the alternative under 12(b)(1) and 12(b)(6) and to convert the motion to a Rule 56 motion when extraneous evidence was submitted in the form of affidavits by both parties. We find that it was not error for the district court to convert the motion and we will review it as a motion for summary judgment.
STANDARD OF REVIEW
In reviewing a district court’s grant or denial of summary judgment, we apply a de novo standard of review to legal determinations. See Carey v. United States Postal Serv., 812 F.2d 621, 623 (10th Cir.1987); see also Hydro Conduit Corp. v. American-First Title & Trust Co., 808 F.2d 712, 714 (10th Cir.1986) (“When a district court has granted, summary judgment, the court of appeals applies a de novo standard of review.”); Baker v. Penn Mutual Life Ins. Co., 788 F.2d 650, 653 (10th Cir.1986); Morgan v. Mobil Oil Corp., 726 F.2d 1474, 1477 (10th Cir.1984). As for allegations of fact by the parties, the general rule is that our view of the facts must indulge all reasonable inferences in favor of the party opposing a motion for summary judgment. Franks v. Nimmo, 796 F.2d 1230, 1235 (10th Cir.1986); Baker, 788 F.2d at 653; Bindley v. Amoco Prod. Co., 639 F.2d 671, 672 (10th Cir.1981). In this case, the essential facts governing our disposition on appeal (as opposed to how those facts are characterized or legal conclusions argued from them by the parties) are uncontested. j
BACKGROUND
Wheeler’s credentials, including professional activities and affiliations, are substantial. Her employment experience with Main Hurdman was characterized by steady advancement as an employee-accountant. She was made a partner of Main Hurdman in April 1982. At that time approximately 14%, or 502 of Main Hurd-man’s 3570 personnel were partners.
Partnership consisted at least of the following: election to the partnership and execution of the Firm’s partnership agreement; change in compensation from salary to a share of the Firm’s profits, paid by draw and an allocation of profits based on points; a contribution to capital; establishment of a capital account; unlimited personal liability for the debts and obligations of the partnership; rights under the partnership agreement to vote on such matters as amendments of the partnership agreement, approval of mergers with other accounting firms of a certain size, admission of new partners, termination of a partner’s interest, approval of draws, shares of net profits, special distributions, and any other income to be allocated to any partners, and dissolution of the firm. In addition, Wheeler became eligible for certain rights and privileges which were enjoyed only by partners of the firm, such as the right to sign audit reports and tax returns and the right to be reimbursed for membership dues in certain clubs; and, she was subject to involuntary termination of her interest in the partnership only by either: (1) a unanimous vote of the firm’s policy board, or (2) an affirmative vote of no less than 75% of the members of the firm’s advisory board, or (3) an affirmative vote of no less than 75% of all partners casting votes. Furthermore, by becoming a partner Wheeler surrendered certain employee benefits including prepaid health insurance and life insurance.
Wheeler and the EEOC effectively concede that under laws governing partnerships Wheeler was a bona fide and general partner of Main Hurdman. They similarly concede that Main Hurdman is a bona fide general partnership. It is undisputed that the foregoing facts relating to Wheeler’s admission to partnership are not a sham, and have legal substance. Consonant with those facts, there is no allegation that Wheeler was made a partner, or denominated as such and was continued in that status, as a device for avoiding the Acts in question.
However, Wheeler and the EEOC, while not contesting Wheeler’s partnership status, point to other facts which they contend portray the economic reality of employee status co-existing with partner status. After being made a partner Wheeler’s work remained unchanged. She had the same client load, same duties and responsibilities, same support staff, and was supervised in her work and work assignments, by the same department head. A personnel file was maintained with respect to her and all other personnel, including partners. The amounts charged for her services were established by managing partners. The number of partnership points allocated to her for income purposes was, as a practical matter, determined by the managing partner of her office. Also as a practical matter, a recommendation by the same managing partner that she or any other partner of that office be expelled from the partnership was the final word, since such recommendations, according to Wheeler, were routinely adopted and appeals of such decisions pursuant to terms of the partnership agreement were unavailing. Wheeler Aff. para. 14.
Wheeler and the EEOC also emphasize that Main Hurdman is a large firm, with eighty offices nationwide. They portray it as a highly organized, centrally managed, business institution of indefinite and ongoing duration; in other words, it looks like a corporation. The operating structure of the partnership, within which Wheeler functioned, is set forth on an exhibit to Wheeler’s affidavit in the district court. That exhibit shows the partners of Main Hurdman as the governing body, below which is a policy board and an advisory board to which partners are elected. Below those two boards there is a managing partner/CEO and a chairman who, presumably, are responsible for the day-to-day operations of the partnership. Thereafter, there appear on the organizational chart a myriad of assignments, including international, marketing, human resources, management consulting, professional standards, tax services, finance, and so on. The chart also shows a partner in charge of operations and under that partner six geographical regions with a partner in charge of each. Within each region the location of Main Hurdman offices is identified, with a local “partner in charge” of each office. The local partner in charge oversees assignment of department heads, allocation of partner credit for client hours managed, the establishment of performance goals for all personnel, assignment of CPAs to clients, the amount to be charged for services, and the hours, dates and places when and where work is to be performed. It is contended that although each partner is entitled to vote at annual or special meetings, the votes are primarily for the purpose of ratifying decisions made by the managing partner, policy board or “nominating” committee.
Finally, Wheeler and the EEOC make much of the fact that as a partner Wheeler’s initial contribution to capital was just $4,000, representing only a.000058 share of the firm’s total capital account. It is also a fact, however, that thirteen months later Wheeler signed a letter of “withdrawal” from the partnership in which reference was made to her capital account containing a minimum of $15,000 plus an unspecified additional balance, plus additional profit allocations to be determined twelve months from the date of termination — all of which was to be paid to Wheeler as a terminating general partner. West Aff., Ex. B. Thus, whatever the true percentage of Wheeler’s partnership interest, it translated into sums of money which were not insignificant.
In April 1983, one year after being made a partner, Wheeler was informed by Richard West, Manager of the Denver office, that she would be severed from the Firm as of September 30 of that year. A letter of “withdrawal” signed by West and Wheeler set forth certain financial and other terms relating to the severance, all of which apparently were honored by the parties. Official severance occurred on September 30, 1983. Following expulsion, Wheeler filed, in January 1984, a charge of discrimination with the EEOC. On October 22, 1984, the EEOC issued to Wheeler a Notice of Right to Sue. This suit, filed on January 22, 1985, followed.
I.
GENERAL STANDARDS GOVERNING REVIEW OF ANTIDISCRIM-INATION ACTS
In our review of the antidiscrim-ination laws we must be mindful of their remedial purposes, and liberally interpret their provisions to that end. Martinez v. Orr, 738 F.2d 1107, 1110 (10th Cir.1984) (Title VII) (quoting Davis v. Valley Distributing Co., 522 F.2d 827, 832 (9th Cir.1975), cert. denied, 429 U.S. 1090, 97 S.Ct. 1099, 51 L.Ed.2d 535 (1977)); see also Owens v. Rush, 636 F.2d 283, 287 (10th Cir.1980) (Title VII). Such interpretation, however, cannot be used as a justification for rewriting the statutes. Legislative ends are circumscribed by statutory means. Thus, while the case before us deals with a charge of discrimination, the root of our inquiry is one of statutory interpretation.
II.
PARTNER AS COVERED EMPLOYEE UNDER THE ANTIDISCRIM-INATION ACTS
A. The Controlling Statutory Language. Title VII provides:
(a) It shall be an unlawful employment practice for an employer—
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.
42 U.S.C. § 2000e-2(a). The language of the ADEA is nearly identical. The Equal
Pay Act of the FLSA, 29 U.S.C. § 206(d)(1) provides:
No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.
The statutory definition of employee under each of these Acts is virtually identical, and circular in its description. Title YII defines employee as “an individual employed by an employer.” It defines employer as “a person engaged in an industry affecting commerce who has fifteen or more employees.” 42 U.S.C. § 2000e(b). The ADEA definition is identical except that it requires an employer to employ twenty or more employees. See 29 U.S.C. § 630(b). The definition of employer under the FLSA is equally circular: “ ‘Employer’ includes any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d), Under each act, a “person” is defined to include partnerships. 29 U.S.C. § 203(a); 29 U.S.C. § 630(a); 42 U.S.C. § 2000e(a).
All parties acknowledge that nothing in the legislative history of these Acts explicitly addresses the definition of employee. In general, cases construing definitions of one of the Acts are to be viewed as persuasive authority when interpreting the others. See Lorillard v. Pons, 434 U.S. 575, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978); Hyland v. New Haven Radiology Assocs., 794 F.2d 793 (2nd Cir.1986).
B. Judicial and Agency Postures.
1. Judicial Interpretation.
To date, courts have shown no disposition to extend these statutory employee protections to general partners. The most widely recognized recent case is Hishon v. King & Spaulding, 678 F.2d 1022 (11th Cir.1982), rev’d on other grounds, 467 U.S. 69, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). That case involved a Title VII claim asserted by a female lawyer-associate with respect to her firm’s alleged refusal to consider her for partnership. In reversing the Eleventh Circuit the Supreme Court concluded “that in appropriate circumstances partnership consideration may qualify as a term, condition, or privilege of a person’s employment” for purposes of Title VII coverage. Hishon, 467 U.S. at 78 n. 10, 104 S.Ct. at 2235 n. 10. However, the Court did not reach the question of application of Title VII to partners themselves. Thus, the views of the Eleventh Circuit on that subject remain as stated in its opinion in Hishon. There, the circuit court expressed reluctance to equate partners with employees, stating “the partners own the partnership; they are not its ‘employees’ under Title VII. We find a clear distinction between employees of a corporation and partners of a law firm.” Hishon, 678 F.2d at 1028.
The Seventh Circuit expressed similar views in Burke v. Friedman, 556 F.2d 867 (7th Cir.1977), which involved an accounting firm. The question in Burke was whether individual partners of the partnership could be counted as employees for purposes of the fifteen-employee minimum for Title VII coverage. The Seventh Circuit held they could not, under the facts of that case. In reaching its holding, the court said:
Partners manage and control the business and share in the profits and losses. See Commissioner of Internal Revenue v. Tower, 327 U.S. 280, 66 S.Ct. 532, 90 L.Ed. 670 (1946); Wilson v. Commissioner of Internal Revenue, 161 F.2d 661, 664 (7th Cir.1947). In light of the foregoing, we do not see how partners can be regarded as employees rather than as employers who own and manage the operation of the business.
* H» # # * *
[Section] 2000e(f) does not expand the definition of employee to include a partner.
Id. at 869-70 (footnote omitted).
The reasoning in Burke was reconfirmed by an en banc panel of the Seventh Circuit in 1984 in EEOC v. Dowd & Dowd, Ltd., 736 F.2d 1177 (7th Cir.1984). In Dowd, it was held that lawyer/shareholders of a professional corporation were not employees for purposes of Title VII coverage because they were, in essence, partners in a partnership. Within the past year the Second Circuit has taken an opposite view with respect to professional corporations, holding that radiologist/shareholders in a professional corporation were employees of the corporation, rather than partners, for purposes of ADEA coverage. Hyland v. New Haven Radiology Assocs., 794 F.2d 793 (2nd Cir.1986). See also Reiver v. Murdoch & Walsh, 625 F.Supp. 998 (D.Del.1985). But the Second Circuit stressed the importance of the chosen form of business entity, stating: “While those who own shares in a corporation may or may not be employees, they cannot under any circumstances be partners in the same enterprise because the roles are mutually exclusive.” Id. at 798. As to partnerships themselves the court stated:
It is generally accepted that the benefits of the antidiscrimination statutes... do not extend to those who properly are classified as partners.
# * * * * #
The fact that certain modern partnerships and corporations are practically indistinguishable in structure and operation, however, is no reason for ignoring a form of business organization freely chosen and established.
Id. at 797-98.
Two federal district courts have recently held that partners are not employees for purposes of the ADEA. Maher v. Price Waterhouse, Civ. No. 84-1522 C (2) (E.D.Mo. April 8, 1985) [Available on Westlaw, DCT database]; Holland v. Ernst & Whinney, 35 Empl.Prac.Dec. (CCH) ¶ 34,-653 (N.D.Ala. August 17,1984). Both cases involved partners in “Big Eight” accounting firms.
Finally, in his much-quoted concurring opinion in Hishon, Justice Powell stated:
I write to make clear my understanding that the Court’s opinion should not be read as extending Title VII to the management of a law firm by its partners. The reasoning of the Court’s opinion does not require that the relationship among partners be characterized as an ‘employment’ relationship to which Title VII would apply.
467 U.S. at 79, 104 S.Ct. at 2236. The significance of Justice Powell’s observation must, of course, be tempered by the fact that no other justice joined the concurring opinion, and by allusions to a highly interactive partnership characterized by common agreement or consent among the partners.
2. Agency Interpretation.
Turning from cases to the question of relevant agency interpretation of these Acts we are aided but little. The EEOC refers us to no directly relevant published agency positions regarding the ADEA and FLSA. Two references, twenty years apart, are cited pertaining to Title VII coverage of partners. Both sides rely on them. The first is a 1965 General Counsel opinion letter, which the Commission apparently cannot find, Brief of EEOC at 24 n. 20, but which is asserted by Main Hurdman to rule that partners of a law firm may not be employees. In support of its view, Main Hurdman refers to a listing of the opinion published in a quarterly digest, “Digest of Legal Interpretations Issued or Adopted by the Commission,” October 9, 1965 through December 31, 1965, § 1(B)(6) at 2-3. In contrast, the EEOC refers to the annual Digest listing of the same opinion, which states that although the specific ruling found that partners were not employees, “the determination of whether partners of the [law] firm are ‘employees’ within the meaning of Title VII must be determined on a case-by-case basis.” EEOC, First Annual Digest of Legal Interpretations, July 2, 1965 through July 1, 1966, § 1(B)(5) at 6. Neither reference is sufficiently explanatory to be helpful; they are so scanty and open to argument in almost every respect that they fall short of agency interpretation which guides us.
The second and only other reference on point given to us by the EEOC is a 1985 EEOC decision that partners in an eight-partner, twelve-employee law firm were not employees for Title VII purposes. EEOC Decision No. 85-4, 2 Empl.Prac. Guide (CCH) 11 6846 at 7040-41 (1985). The EEOC contends the decision is not inconsistent with its position that partners can be employees under Title VII, and that a case-by-case determination is required. Such argument is based on two considerations. First, a footnote in the decision refers to factors to be considered in determining whether an individual is a partner or an employee in a particular case. Second, the decision itself was based on its own facts. We do not view the decision, however, as squarely supporting the present EEOC position. The decision displays no agency inclination whatsoever to pursue an aggressive inquiry into whether or not, as a matter of economic reality, any of the partners involved in that case were dominated in their work, in management or control of partnership affairs, in decisions on sharing profits, or in any other respect. Yet that is the approach urged upon us by the EEOC in this case. In the 1985 decision all such factors were essentially decided by the Commission by reference to the written terms of the partnership agreement, with only a passing reference to an absence of evidence that the “business is carried out in any other way than as indicated in the partnership agreement.” Id. at 7040. The accompanying footnote, emphasized here by the EEOC, refers first to Justice Powell’s language in Hishon that “an employer may not evade the strictures of Title VII simply by labeling its employees as ‘partners.’ ” Id. at 7041 n. 4 (emphasis added). Following that quote the Commission states: “The Commission recognizes that there may be a case where an individual is called a partner, but who may really be an employee.” Id. (emphasis added). Only then is there reference to factors which may be relevant in making such a determination. It is evident from both the language and tone of that footnote that even as recently as 1985 the Commission did not envision the wholesale inquiries proposed here.
It is apparent that the EEOC has not historically espoused the stand it takes here. To the contrary, for many years following its creation under Title VII in 1964, the Commission by its relative silence and inaction, and its approach to the issue when raised, made it seem likely that it doubted any general coverage of partners by Title VII, excluding obvious sham situations. Thus, we accord less weight to the arguments of the EEOC in this case than if the Agency’s position had been clearly developed proximate in time to passage of Title VII or to the transfer of responsibility for the ADEA and the Equal Pay Act from the Department of Labor to the EEOC in 1979, and consistently applied thereafter.
Although not one court has applied the Acts to a bona fide general partner against his or her partners or partnership, it is not surprising that Wheeler and the EEOC press the issue now. In recent years, literally dozens of articles touching on the reach of the antidiscrimination statutes have been solidly in favor of definitions which would be broad enough to include general partners. Peripherally relevant extensions of coverage by the courts have occurred, Hishon being the most visible. See Lucido v. Cravath, Swaine & Moore, 425 F.Supp. 123 (S.D.N.Y.1977); EEOC v. Rinella & Rinella, 401 F.Supp. 175 (N.D.Ill.1975). See also EEOC v. Peat, Marwick, Mitchell & Co., 775 F.2d 928 (8th Cir.1985), aff'g, 589 F.Supp. 534 (E.D.Mo.1984), cert. denied, — U.S. -, 106 S.Ct. 1263, 89 L.Ed.2d 572 (1986).
Furthermore, there are so many partnerships engaged in day to day commerce in this country in ever expanding numbers that the statistical chance of discrimination claims has increased as a result of growth alone. Then too, the changing status of women and minorities figures significantly in the equation. While partnerships of professionals have been common throughout the history of this country, as recently as twenty years ago relatively few women and minorities were represented, which may account for the early absence of discrimination suits against partnerships. Over the past two decades ever increasing numbers of women and minorities have been admitted into professional schools, thence into the professions. Additional years have been required for their advancement to partnership status. Finally, growing experience under and familiarity with these Acts is producing an increase in discrimination claims against partnerships.
These facts may provide a better or more complete explanation for the history of judicial and agency actions, omissions, or silence since 1964 concerning the merits of the issue of partners as employees under the Antidiscrimination Acts. Therefore, absence of a long-standing and reliable EEOC position is no surprise. Nonetheless, a disposition on the merits is made more difficult by its absence.
C. Partnership Attributes and Proposed Tests for Determining Employee Status.
Predictably both sides attempt to control the focus of our inquiry. Main Hurdman dwells largely on characteristics of partnerships, while Wheeler and the EEOC concentrate on traits associated with employment. With respect to employment, various tests and factors which have been judicially created and applied in other situations are proposed. The remedial nature of the Acts is stressed both in conjunction with tests for employee status, and as a justification of its own.
We address the parties’ positions first by reviewing aspects of partnerships generally, then by reviewing the proposed employee tests, then by analyzing them together.
1. Partnership Status Generally.
While there may be no federal partnership law, as Wheeler argues, partnerships are firmly embedded in our jurisprudence and commonly referred to in universally understood ways by Congress and the courts without the necessity of dissecting the partnership law of each state in order to derive meaning. By the time the FLSA was first enacted in 1938, the Uniform Partnership Act (“UPA”) had been adopted by eighteen states. When Title VII was enacted in 1964 and the ADEA in 1967, forty states had adopted the UPA as the governing body of partnership law. As of 1984, forty-eight states, several territories, and the District of Columbia had adopted the UPA. Only Georgia and Louisiana have not adopted the uniform act. 6 Unif. Laws Ann. 1 (Supp.1984) (table). Despite some differences in partnership law between states, the general indicia of partners and partnership are very similar across state lines. The UPA sets forth, among others, the following characteristics of a partner: (1) unlimited liability (§ 16); (2) the right to share in profits and participate in management subject to agreement between partners (§ 18(a), (e)); (3) the right and duty to act as an agent of the other partners (§ 9); and (4) shared ownership (§ 6). In Freese v. United States, 455 F.2d 1146, 1150-51 (10th Cir.1972), cert. denied, 409 U.S. 879, 93 S.Ct. 85, 34 L.Ed.2d 134 (1972), we stated that the parties’ intent was the touchstone for finding a partnership relationship.
Citing those indicia of partnership, Main Hurdman contends that a partner by definition is not an employee under traditional common law principles. Status as a co-owner precludes simultaneous status as an employee.
Multiple rebuttals are offered to that argument. Owners in other contexts can be employees. See Goldberg v. Whitaker House Coop., 366 U.S. 28, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961) (members/owners of a knitting cooperative considered employees); Zimmerman v. North American Signal Co.,
Question: What is the total number of respondents in the case? Answer with a number.
Answer:
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songer_source
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J
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What follows is an opinion from a United States Court of Appeals. Your task is to identify the forum that heard this case immediately before the case came to the court of appeals.
BALLWOOD CO. v. COMMISSIONER OF INTERNAL REVENUE.
No. 5674.
Circuit Court of Appeals, Third Circuit.
June 3, 1936.
Morgan S. Kaufman, of Scranton, Pa., and S. Leo Ruslander, R. J. Cleary, and Wm. A. Seifert, all of Pittsburgh, Pa., for petitioner.
Frank J. Wideman, Asst. Atty. Gen., Sewall Key and Lucius A. Buck, Sp. Assts. to Atty. Gen., and Morton K. Rothschild, of Washington, D. C., for respondent.
Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.
THOMPSON, Circuit Judge.
This is a petition for rehearing of a decision of this court in Ballwood Company v. Commissioner, filed July 16, 1935, in which in a per curiam opinion we affirmed a decision of the Board of Tax Appeals.
The petitioner, in accordance with an agreement made with the Midwest Pipe & Supply Company, hereinafter called Midwest, conveyed its pipe fabricating assets representing approximately 29 per cent, of its total assets to the Ballwood Pipe Fabricating Corporation, a newly organized corporation. The petitioner received all of the new corporation’s capital stock and conveyed the same to Midwest in exchange
for approximately 18 per cent, of Midwest capital stock. Midwest transacted the pipe-fitting business, theretofore transacted by the petitioner, through its so-called “Ball-wood Division, Midwest Piping -Supply Company.” The petitioner’s sole stockholder served as manager for the Ballwood Division. The Ballwood Pipe Fabricating Corporation continued in existence as a holding company for the assets transferred to it by the petitioner. The Commissioner ruled that the difference between the cost to the petitioner of the Ballwood Pipe Fabricating stock and the market value of the Midwest stock was taxable. The petitioner contended that the gain was nontaxabl'e because derived from a tax-free reorganization. The pertinent statutory provisions and Treasury Regulations are set out in the margin.
As a result of the various transfers outlined above, the petitioner had an 18 per cent, interest in Midwest, which in turn owned all the stock of the Ballwood Pipe Fabricating Corporation. It is apparent that the same results might have been achieved by an outright sale. The petitioner could have transferred directly to Midwest all of its assets involved in the pipe-fitting business and received in payment therefor 18 per cent, of Midwest stock. Nevertheless, what was done amounted to a reorganization, for as a result of the somewhat complicated transfers, Midwest acquired not merely, a majority, but all of the stock of the B.allwood Pipe Fabricating Corporation. Section 112 (i) (1) (A) of the Revenue Act of 1928 (26 U.S.C.A. § 112 note) gives one definition for the term “reorganization” as a “merger or consolidation (including the acquisition by one corporation of at least a majority of the voting stock and at least a majority of the total number of shares of all other classes of stock of another corporation. * * *).” This definition obviously enlarges the usual meaning of the words “merger or consolidation.” Giving the words of the statute their plain and unambiguous meaning, we must reach the conclusion that what took place in the instant case amounted to a statutory reorganization in which there was no gain or loss under the provisions of section 112 (b) (3) and (4) of the statute (26 U.S.C.A. § 112 (b) (3, 4) and note), for the stock of the Ballwood Pipe Fabricating Corporation was property in the hands of the taxpayer. It may also be pointed out that the petitioner’s 18 per cent, stockholdings in Midwest give it an interest in the affairs of that company fairly representing the value of the assets transferred by it to the newly organized corporation in accordance with the agreement between it and Midwest. Pinellas Ice Co. v. Commissioner, 287 U.S. 462, 53 S.Ct. 257, 77 L.Ed. 428.
The Board of Tax Appeals, relying upon its own prior decisions in Watts v. Commissioner of Internal Revenue, 28 B.T.A. 1056 and Minnesota Tea Company v. Commissioner of Internal Revenue, 28 B.T.A. 591, held that the gain resulting from the transaction was taxable. The Board’s ruling in the Watts Case was reversed by the Second Circuit Court of Appeals in 75 F.(2d) 981, and in the Minnesota Tea Case by the Eighth Circuit Court of Appeals in 76 F.(2d) 797. The Supreme Court affirmed in opinions filed December 16, 1935. The final decisions in those cases, therefore, are favorable to the taxpayer. We note that neither this court nor the Board of Tax Appeals had the benefit of the Supreme Court decisions in those cases at the time of the original argument.
In the Watts Case three taxpayers were the sole stockholders of the United States Ferro Alloys Corporation. They exchanged all their stock for shares of the Vanadium Corporation of America and mortgage bonds of Ferro, guaranteed by Vanadium. The Supreme Court held that the gain derived from this exchange was nontaxable because of the acquisition by Ferro of the majority of the total number of shares of all classes of Vanadium stock. In the Minnesota Tea Case the taxpayer, pursuant to a plan previously agreed upon, transferred all its assets and business to the Grand Union Company and received in exchange certificates of the common stock of that company and $426,842.56 in cash. The taxpayer retained the certificates and distributed the cash to its stockholders who assumed to pay $106,471.73 of the .taxpayer’s outstanding debts. The Supreme Court held that the acquisition by one corporation of substantially all the properties of another corporation amounted to a tax-free reorganization under section 112 (i) (1) (A) of the Revenue Act of 1928. It ruled that the decision in Gregory v. Helvering, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596, 97 A.L.R. 1355, was inapplicable, since nothing in the Minnesota Tea Company Case suggested other than a bona fide business transaction.
We therefore conclude, upon a literal construction of the Revenue Act of 1928 and by analogy to the decisions in Watts v. Commissioner, supra, Helvering v. Minnesota Tea Company, 296 U.S. 378, 56 S.Ct. 269, 80 L.Ed. 284, and G & K Manufacturing Company v. Helvering, 296 U.S. 389, 56 S.Ct. 276, 80 L.Ed. 291, opinion filed December 16, 1935, that no taxable gain arises by reason of the described transaction.
Our decision, as set forth in the per curiam opinion filed July 16, 1935, is vacated and set aside, and the decision of the Board of Tax Appeals is reversed.
Section 112 of Revenue Act of 1928, 45 Stat. 816 (26 Ü.S.C.A. § 112 and note):
Recognition of Gain or Loss
(a) General rule. Upon the sale or exchange of property the entire amount of the gain or loss determined under section 111, shall be recognized, except as hereinafter provided in this section.
(b) Exchanges solely in kind — * * *
(3) Stock for stock on reorganization. No gain or loss shall be recognized if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan of reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization.
(4) Same — Gain of corporation. No gain or loss shall be recognized if a corporation a party to a reorganization exchanges property, in pursuance of the plan of reorganization, solely for stock or securities in another corporation a party to the reorganization. * * *
(i) Definition of reorganization. As used in this section and sections 113 and 115—
(1) The term “reorganization” means (A) a merger or consolidation (including the acquisition by one corporation of at least a majority of the voting stock and at least a majority of the total number of shares of all other classes of stock of another corporation, or substantially all the properties of another corporation), or (B) a transfer by a corporation of all or a part of its assets to another corporation if immediately after the transfer the transferor or its stockholders or both are in control of the corporation to which the assets are transferred, or (C) a recapitalization, or (D) a mere change in identity, form, or place of organization, however effected.
(2) The term “a party to a reorganization” includes a corporation resulting from a reorganization and includes both corporations in the case of an acquisition by one corporation of at least a majority of the voting stock and at least a majority of the total number of shares of all other classes of stock of another corporation.
(j) Definition of control. As used in this section the term “control” means the ownership of at least 80 per centum of the voting stock and at least 80 per centum of the total number of shares of all other classes of stock of the corporation.
Article 574 of Treasury Regulations 74:
Exchanges in connection with corporate reorganizations. — The Act provides that no gain or loss shall be recognized if, in pursuance of a plan of reorganization, stock or securities in a corporation a party to a reorganization are exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization, or if, in pursuance of a reorganization plan, a corporation a party to a reorganization exchanges property solely for stock or securities ■■in another corporation a party to the reorganization. If two or more corporations reorganize, for example, by—
(1) The merger of the X Corporation into the Y Corporation,
(2) The consolidation of the X Corporation and the Z Corporation into the Y Corporation, a new corporation,
(3) The acquisition by the Y Corporation of a majority of the voting stock and a majority of the total number of shares of all other classes of stock of the X Corporation or of substantially all of the properties of the X Corporation, or
(4) The transfer by the X Corporation of a part of its assets to the Y Corporation where immediately after the transfer the X Corporation or its shareholders or both are in control of the Y Corporation—
then no taxable income is received from the transaction by the X Corporation or the Z Corporation if the sole consideration received by the corporations is stock or securities of the Y Corporation; and no taxable income is received from the transaction by the shareholders of either the X Corporation or the Z Corporation if the sole consideration received by the shareholders is stock or securities of the Y Corporation.
Question: What forum heard this case immediately before the case came to the court of appeals?
A. Federal district court (single judge)
B. 3 judge district court
C. State court
D. Bankruptcy court, referee in bankruptcy, special master
E. Federal magistrate
F. Federal administrative agency
G. Court of Customs & Patent Appeals
H. Court of Claims
I. Court of Military Appeals
J. Tax Court or Tax Board
K. Administrative law judge
L. U.S. Supreme Court (remand)
M. Special DC court (not the US District Court for DC)
N. Earlier appeals court panel
O. Other
P. Not ascertained
Answer:
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songer_treat
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D
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What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
Robert HARRIS, Plaintiff-Appellant, v. Frank J. PATE, Warden, Defendant-Appellee.
No. 18718.
United States Court of Appeals, Seventh Circuit.
March 12, 1971.
Hastings, Senior Circuit Judge, dissented and filed opinion.
Robert Harris, pro se.
William J. Scott, Chicago, Ill., Joel Flaum, Warren K. Smoot, Asst. Attys. Gen., Kerry R. Cordis, Asst. Atty. Gen., of counsel, for appellee.
Before HASTINGS, Senior Circuit Judge, and KERNER and STEVENS, Circuit Judges.
STEVENS, Circuit Judge.
This appeal raises three questions: (1) whether the complaint states a cause of action; (2) whether the district court properly refused to lend its assistance to plaintiff, a prison inmate, in obtaining affidavits in opposition to defendant’s motion for summary judgment; and (3) whether the court erred in refusing to grant plaintiff additional time which he required to obtain such affidavits before ruling on the motion. We think appellant’s first and third contentions have merit, but reject the second.
I.
Appellant is a prison inmate without funds to employ counsel. Accordingly, as we have consistently held, his complaint should be accorded a liberal construction. Sigafus v. Brown, 416 F.2d 105, 106 (7th Cir. 1969); United States ex rel. Campbell v. Pate, 401 F.2d 55, 57 (7th Cir. 1968).
Construing the complaint liberally, and accepting its allegations as true for the purpose of testing its sufficiency, it alleges that defendant’s interference with his mail and visiting rights prevented him from preparing an adequate defense to a state criminal charge to which, as a result, he pleaded guilty on December 8, 1969; and, further, that the continued interference with plaintiff’s access to outsiders has impeded his ability to prosecute an appeal in the state courts. This court has recognized that the judgment of prison administrators with regard to prison practices, including limitations on mail and visiting privileges, is entitled to deference. Cooper v. Pate, 382 F.2d 518, 521-522 (7th Cir. 1967). However, we have also held that a prisoner’s complaint based on interference with his access to the courts states a claim for relief under the Civil Rights Act. Sigafus v. Brown, 416 F.2d 105 (7th Cir. 1969); Spires v. Bottorff, 317 F.2d 273 (7th Cir. 1963). It may be that Harris will not be able to prove his allegations, but his pleading is sufficient.
II.
Plaintiff’s complaint was filed on April 8, 1970. On May 28, 1970, defendant filed a motion to dismiss or for summary judgment, with a supporting memorandum, exhibits, and affidavits executed by defendant and other prison officers. On June 18, 1970, plaintiff filed a “cross-motion to dismiss defendant’s motion,” in which he asserted that he had been unable to obtain affidavits to support his allegations because of his difficulty in communicating with outsiders. On July 2, 1970, plaintiff filed a second motion in response to the motion for summary judgment. This motion called attention to the fact that Harris is without legal counsel and reiterated his claim that he cannot effectively communicate with outsiders. It indicated that, after filing his cross-motion, Harris had unsuccessfully attempted to mail affidavit forms to a friend, Maggie Byndum, and to certain other persons. The forms which are appended to the motion and, therefore, a part of the record on appeal, call for affirmative or negative responses to various statements which tend to substantiate Harris’s allegations concerning interference with his mail, receipt of funds, and visitors privileges. The prayer of the motion was that the trial court grant Harris a continuance and allow time for the forms to be executed and returned for consideration on the motion for summary judgment. Additionally, the motion asked the court’s assistance to ensure that the forms are mailed to the persons designated by plaintiff. There is nothing in the record to indicate that defendant ever responded to this motion.
By an order dated July 10, 1970, the trial court denied plaintiff’s motion concerning the affidavit forms. On the same day the court granted defendant’s motion and dismissed the complaint.
On the record before us, we are satisfied that it was not an abuse of discretion for the court to decline to lend its assistance to plaintiff in trying to obtain affidavits in support of his allegations. Relevant portions of plaintiff’s motion papers were unsworn. With one exception, as far as we can .determine from the record, his proposed affiants were unidentified. The record demonstrates that plaintiff was, in fact, able to communicate with the court through the mails; accordingly, the court could consider the improbability of the unsworn charges that he was unable to communicate with others in exercising its discretion not to interfere with the institutional procedures for processing plaintiff’s mail. The district court did not err in denying this aspect of plaintiff’s second motion.
III.
The denial of plaintiff’s request for a continuance to enable him to obtain affidavits in opposition to defendant’s motion presents a different question. Rule 12(b) of the Federal Rules of Civil Procedure provides, in part:
“If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.”
The drafters of Rule 56 anticipated the possibility that an opposing party might require additional time in order to obtain counteraffidavits and expressly provided for the granting of a continuance upon a proper showing. Of course, in the first instance the decision to permit a continuance is within the sound discretion of the trial court. Given the circumstances of this case, however, the trial court’s refusal to grant a continuance was an abuse of its discretion. Plaintiff was not represented by counsel and, because of his incarceration, he was less able than an ordinary party to obtain affidavits effectively and expeditiously. Furthermore, the pleadings which he sought to support complained of special disabilities affecting his communication with outsiders. The failure to grant Harris’s motion deprived him of a “reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” In effect, it deprived him of an adequate opportunity to be heard. Cf., Georgia Southern & F. Ry. Co. v. Atlantic Coast Line R. Co., 373 F.2d 493, 497-498 (5th Cir. 1967) cert. denied 389 U.S. 851, 88 S.Ct. 69, 19 L.Ed.2d 120.
The Federal Rules are explicit in their requirement that a party opposing a motion to dismiss for failure to state a claim for relief, accompanied by exhibits and affidavits, must be afforded a full opportunity to respond pursuant to Rule 56. The right to respond by affidavit or otherwise cannot be denied merely because the trial judge believes that plaintiff’s claim is insubstantial or frivolous. Cohen v. Cahill, 281 F.2d 879 (9th Cir. 1960); see, also, Bane v. Spencer, 393 F.2d 108 (1st Cir. 1968) (per curiam), cert. denied 400 U.S. 866, 91 S.Ct. 108, 27 L.Ed.2d 105. We hold that the denial of a continuance improperly deprived plaintiff of an important procedural right.
The judgment is reversed and the cause is remanded for further proceedings consistent with this opinion.
. Of course, defendant’s affaidavits and exhibits cannot be considered on this question.
. Plaintiff sought injunctive relief and damages against Warden Pate and other unnamed officials of the Joliet state prison, where he was incarcerated at the time. Harris purported to allege a conspiracy to deny him due process and equal protection of the law in violation of the Fourteenth Amendment and the Federal Civil Rights Act. He further alleged that the purpose of the conspiracy was to injure him legally and personally. The misconduct charged in the complaint can be summarized as follows: (1) at various times in 1968, 1969, and continuing to the time of the filing of the complaint in 1970, defendant interfered with or stopped Harris’s legal and personal mail and denied him the use of funds sent by friends; (2) on or after April 11, 1968, defendant stopped visitors and advised them not to assist Harris ; (3) at various times certain prison officers made the contents of Harris’s personal letters available to other inmates; (4) one Bernyce Paschal was permitted access to Harris’s legal and personal letters and allowed and encouraged to use information in those letters to injure and ridicule him; (5) defendant caused a false report concerning Harris to be prepared by the Behavioral Clinic of the Circuit Court of Cook County; and (6) defendant spread a false rumor that Harris was a police informer.
Certain letters which are part of the record on appeal suggest that Harris was attempting to obtain a transfer from Joliet to the Menard state prison while this action was pending in the district court. However, even if plaintiff is no longer incarcerated at Joliet, his claim for damages is not moot, nor is his claim for injunctive relief necessarily moot. Pierce v. LaVallee, 293 F.2d 233, 234 (2d Cir. 1961).
. In Sigafus we determined that a claim for damages was stated under 42 U.S.C. § 1983 when plaintiff alleged destruction by jail guards of legal papers necessary for his appeal of a state conviction. We do not deem plaintiff’s imperfect attempt to plead a conspiracy to preclude a determination that a § 1983 claim has been stated. See Jennings v. Nester, 217 F.2d 153, 154 (7th Cir. 1954) ; Huey v. Barloga, 277 F.Supp. 864, 873 (N.D.Ill.1967).
. We shall refer to only one defendant, Warden Pate. He is the only party identified by name in the complaint and, according to the record, the only party served. Plaintiff, however, consistently refers in his complaint to “defendants” and to a “conspiracy among defendants.” The other defendants are alleged to be prison officials at Joliet.
. While plaintiff’s cross-motion, like his complaint, lacks the precise attention to legal requirements that one would expect from a lawyer, it does clarify allegations in the complaint, including the identity of at least some of the prison officials who allegedly participated in the conspiracy and who presumably are the unnamed defendants. Furthermore, the cross-motion to some extent controverts defendant’s affidavits in their denial of interference with Harris’s mail, and his use of funds.
. The court’s reason for denying the motion was:
“ * * * this court will not interfere with the administration of internal affairs of a penal institution, unless there is an abuse of discretion in the administration of such affairs.”
. Fed.R.Civ.P. 56(f). The Advisory Committee Note accompanying the 1963 amendment to Rule 56 re-emphasizes the force of subdivision (f) :
“ * * * Where the evidentiary matter in support of the motion does not establish the absence of a genuine issue, summary judgment must be denied even if no opposing evidentiary matter is presented. And summary judgment may be inappropriate where the party opposing it shows under subdivision (£) that he cannot at the time present facts essential to justify his opposition.”
. Local rules for the Northern District of Illinois provide for oral argument on a motion only when requested and then in the court’s discretion. Local Rule 13(d). This rule may have the salutary effect of expediting the business of the court and conserving in-court time for more serious matters. However, its existence requires that the parties be afforded every reasonable opportunity to submit written argument and supporting material to the court prior to a decision.
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
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songer_direct1
|
A
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the ideological directionality of the court of appeals decision, coded as "liberal" or "conservative". Consider liberal to be for government tax claim; for person claiming patent or copyright infringement; for the plaintiff alleging the injury; for economic underdog if one party is clearly an underdog in comparison to the other, neither party is clearly an economic underdog; in cases pitting an individual against a business, the individual is presumed to be the economic underdog unless there is a clear indication in the opinion to the contrary; for debtor or bankrupt; for government or private party raising claim of violation of antitrust laws, or party opposing merger; for the economic underdog in private conflict over securities; for individual claiming a benefit from government; for government in disputes over government contracts and government seizure of property; for government regulation in government regulation of business; for greater protection of the environment or greater consumer protection (even if anti-government); for the injured party in admiralty - personal injury; for economic underdog in admiralty and miscellaneous economic cases. Consider the directionality to be "mixed" if the directionality of the decision was intermediate to the extremes defined above or if the decision was mixed (e.g., the conviction of defendant in a criminal trial was affirmed on one count but reversed on a second count or if the conviction was afirmed but the sentence was reduced). Consider "not ascertained" if the directionality could not be determined or if the outcome could not be classified according to any conventional outcome standards.
Florence SHAW, Administratrix of the Estate of Charles Edward Gilbert, Deceased, Appellant, v. Gary F. BOTENS, by his Guardian ad litem, Donald Botens, Defendant, and Nationwide Mutual Insurance Company, Garnishee-Appellee.
No. 17185.
United States Court of Appeals Third Circuit.
Argued Oct. 11, 1968.
Decided Nov. 19, 1968.
Milford J. Meyer, Meyer, Lasch, Hankin & Poul, Philadelphia, Pa. (Louis A. Fine, Honesdale, Pa., on the brief), for appellant.
Hugh J. McMenamin, Warren, Hill, Henkelman & McMenamin, Scranton, Pa. (Walter L. Hill, Jr., Scranton, Pa., on the brief), for appellee.
Before McLAUGHLIN, STALEY and VAN DUSEN, Circuit Judges.
OPINION OF THE COURT
VAN DUSEN, Circuit Judge.
This appeal seeks reversal of a District Court (1) judgment dated January 16, 1968, for plaintiff against the garnishee (Nationwide Mutual Insurance Company) in the amount of $731.09 (representing interest on $25,000. previously paid by the garnishee on account of plaintiff’s June 30, 1966, judgment against defendant of $33,485.08), and (2) order dated December 19, 1967, sustaining objections of the garnishee to most of plaintiff’s garnishment claim. Plaintiff contends that she was entitled to proceed in the garnishment action to recover $8,485.08, with interest thereon, in addition to the above $731.09.
After trial of this automobile accident persona] injury action, claiming damages under the Pennsylvania Wrongful Death and Survival Acts for the death of a passenger, the judgment of June 30, 1966, for plaintiff was entered. The garnishment proceedings were instituted on December 12, 1966. The background facts and the conclusion of the District Court are summarized in the able District Court opinion, Shaw v. Botens, 278 F.Supp. 226 (M.D.Pa.1968), where the following language appears;
“Pursuant to the insurance contract, defendant was represented by counsel of Nationwide’s choice who was entrusted with all phases of the case from investigation through the post trial motions. Defendant did not have private counsel. Plaintiff offered to settle for the policy limits of $25,000, but Nationwide refused. After denial of the post trial motions, Nationwide paid plaintiff the $25,000.
“Plaintiff then filed a praecipe for writ of execution against defendant. The writ directed the Marshal to attach the property of the defendant in the possession of Nationwide as garnishee. * * *
“Plaintiff contends that Nationwide breached its duty of fair representation by rejecting plaintiff’s offer of settlement thereby subjecting defendant to liability for the deficiency between the judgment and the policy limits; that a claim for the breach lies against an insurer; that the claim is assignable and that the attachment worked an assignment; and that the garnishment and interrogatories under Pennsylvania procedure constitute a pleading which states the cause of action of breach of duty of fair representation. Nationwide contends that there is no debt in the present posture of this lawsuit which is attachable through garnishment; and that in effect plaintiff is attempting to set herself up as a third party beneficiary under the insurance contract, which was not intended by either Nationwide or defendant.
“In Gray v. Nationwide Mut. Ins. Co., 1966, 422 Pa. 500, 223 A.2d 8, the Pennsylvania Supreme Court clearly held that an insured has a cause of action in assumpsit against an insurer which subjects the former to liability by virtue of a breach of the fiduciary duty of good faith representation. In Gray, there was an actual assignment to the injured party of the insured’s rights against the insurer, which the court held to be a proper assignment. The question presented here is whether under the doctrine of equitable assignment and by means of garnishment proceedings, plaintiff is permitted to pursue the same course without an actual assignment.
“Plaintiff has cited no Pennsylvania authorities for her contention and this court has found none. The question which is basic to all others is whether there existed, either actually or potentially, a right or debt of defendant capable of being enforced by plaintiff. This court believes the answer must be that the claim, if it exists, has not matured to the point where it is enforceable through garnishment proceedings.” (278 F.Supp. 227-28)
This is not a case where the plaintiff is making a mere general contention that the insurer has not acted in good faith and with due care, since the record contains, in affidavit form, the following detailed statement of the plaintiff’s principal claim in the execution proceeding:
“4. Upon institution of this action said Insurance Company retained Hugh J. McMenamin, Esquire, to represent both it and the defendant in the action and said attorney did in fact so represent both in the defense of this action;
“5. During the pendency of the primary action and prior to and during the trial thereof offers were made by plaintiff’s attorneys to Mr. Mc-Menamin to compromise and settle the same for an amount within the coverage of the said policy;
“6. At all times aforesaid Mr. McMenamin refused said offers and failed or refused to disclose the amount of insurance coverage under the said policy;
“7. On June 30, 1966, after the trial of the primary action, judgment was entered in favor of the plaintiff and against the defendant in the sum of $33,485.08;
“8. An attachment execution naming the said Insurance Company as garnishee has been issued on the said judgment and served upon it;
“9. By reason of the failure of garnishee to act in good faith in the defense and settlement of the primary action, the defendant therein has incurred a judgment which is in excess of the limits of coverage in the said policy and a cause of action has accrued to the defendant against the garnishee for the amount in which the judgment exceeds the policy coverage;
“10. Plaintiff’s attachment has effected an assignment of the said cause of action from defendant to plaintiff;”
The Pennsylvania Supreme Court has held that the failure of an insurer to comply with its obligation to act in good faith and with due care in representing the interests of the insured constitutes a breach of a contractual obligation “for which an action in assumpsit will lie.” See Gray v. Nationwide Mutual Insurance Company, 422 Pa. 500, 223 A.2d 8, 11 (1966). The Gray case held, further, that this contractual obligation was assignable by the insured to a plaintiff having secured a judgment in a personal injury action against the insured.
The Pennsylvania Procedural Rules provide that a writ of execution is available to attach a debt owed by the garnishee to the defendant. See Rules 3101(b) (1) and 3102, 12 P.S.Appendix. As stated in paragraph 6 of the comments to these execution rules, they “provide a method for the attachment of the debt itself” and “The scope of attachment is also enlarged to include tangible or intangible property of the defendant in the custody, possession or control of a garnishee.” Rule 3148(a) provides: “A judgment entered against the garnishee * * * shall (1) be in the form of a money judgment if the garnishee owes a debt to the defendant.”
The Pennsylvania Supreme Court has held that attachment works “an assignment to the plaintiff of the debt due to the defendant from the garnishee.” See In re Boyd’s Estate, 394 Pa. 225, 242-243, 146 A.2d 816, 825 (1958), and cases there cited. The Supreme Court of Pennsylvania has permitted attachment of amounts due under the terms of an insurance policy to a judgment debtor by the plaintiff who holds such judgment. See Boyle v. Franklin Fire Insurance Company, 7 W. & S. 76 (1844); Girard Fire & Marine Insurance Co. v. Field, 45 Pa. 129 (1863) ; Fritchie v. Miller’s Pa. Extract Co., 197 Pa. 401, 47 A. 351 (1900). In the Fritchie case, judgment was recovered by the representative of a minor child of a decedent against his employer. An attachment execution was issued against an insurance company which had insured the employer against all liability for damages on account of injuries suffered by its employees up to the amount of $1500. and which had contested its liability under the policy. The court used this language at page 404 of 197 Pa., 47 A. at page 351, in affirming judgment of liability against the insurance company garnishee:
“The only defense of the insurance company to the case at bar is, (1) that it has not consented to an assignment of any interests of the insured to the plaintiff, and (2) that the insured has not suffered any loss, and therefore cannot give to the plaintiff any better right against the insurer than it would have. The defense, however, is not an answer to the judgment against the insured, nor an obstruction to the issuance of an attachment execution, and a service of the same upon the insurer as garnishee. There is nothing in the policy which would justify a denial to the plaintiff of any rights secured to her, for the use of Maria Fritchie, or in the judgment entered by the court below; nor is there anything in the attachment execution and the service thereof upon the insurer as garnishee, which furnishes any just cause for complaint.”
The District Court’s conclusion that the claim had not matured sufficiently to make garnishment proceedings available because the insured defendant had not taken any steps to assert a claim and the garnishee insurance company had not conceded that it had violated its obligation to act in good faith and with due care in representing the interests of the insured does not appear to be consistent with the foregoing decision in the Fritchie case. The claim became definite and liquidated by the refusal of the insurer to settle prior to the entry of the June 30, 1966, judgment and the entry of that judgment in a definite amount, provided that plaintiff can establish its allegations that such insurer-garnishee failed “to act in good faith in the defense and settlement of the primary action” (par. 9, supra, at page 152).
Furthermore, the Pennsylvania appellate courts have consistently determined the validity of alleged claims against an insurer-garnishee in garnishment proceedings in which such a garnishee has contested (as does the garnishee in this case) its liability under the policy. See, e. g., Paul v. Dwyer, 410 Pa. 229, 188 A.2d 753 (1963); Dariano v. Blacksom, 389 Pa. 96, 132 A.2d 186 (1957) ; Vrabel v. Scholler, 369 Pa. 235, 85 A.2d 858 (1952).
In making the difficult determination of what ruling the Pennsylvania appellate courts would make in this situation (where there are no cases precisely in point), we agree with appellant that the use of garnishment proceedings in this case is consistent with this language in the Gray case, supra, at page 12 of 223 A.2d:
“If we permit the assignment in eases such as the one at bar, bankruptcy proceedings would be unnecessary; the insured, after a judgment has been rendered against him, can follow the more simple and less expensive procedure of assigning the cause of action against the insurer, directly, to his judgment creditor.”
Also, the following language from the Gray case (page 13 of 223 A.2d) negatives appellee’s contention that the use of the garnishee process to determine the validity of this alleged claim under the policy would defeat “the express purposes of Gray” (page 9 of appellee’s brief):
“As Judge Hoffman so ably reasoned in his dissenting opinion: ‘The fears of the lower court are unwarranted. The possibility of collusion between a judgment holder and an insured is no way increased by an assignment. If the insured’s liability on the judgment is not affected by the assignment, the interests of the parties are similarly unaffected. Whether the action would be brought in the name of the policyholder or in the name of the assignee, the policyholder would be intent upon relieving himself of the excess judgment, and the assignee would be seeking to secure the balance due him. If the insured’s liability is terminated by the assignment, as in the present case, the possibility of collusion is more remote. Having been relieved of the judgment, the insured no longer has any pecuniary interest in the outcome of the litigation.’ Gray v. Nationwide Mutual Insurance Co., 207 Pa.Super. at 10, 11, 214 A.2d at 639. (Dissenting opinion by Hoffman, J., in which Ervin, P. J., and Watkins, J., joined.)
“Permitting an insured to assign his claim to the injured claimant would put the claimant on more of an equal footing with the insured’s insurance company in settlement negotiations without tipping the balance against an insurer who could still refuse to settle in good faith. ‘This result may seem anomalous in that the plaintiff, who previously offered to settle his claim for $5,000, has now acquired the right to maintain against defendant insurer an action which arose by reason of that offer to settle. But it must be borne in mind that plaintiff merely stands in the shoes of the insured; it is the insured who has allegedly suffered the wrong at the hands of the insurer. It might be said that the result reached herein will cause more injured claimants to propose settlement for the policy limit when the insurance company is defending the action against an insured who is apparently judgment-proof. Yet the insurer has nothing to fear so long as its refusal to settle is made in good faith. And it is fundamental that the law favors settlements’. Brown v. Guarantee Insurance Company, [155 Cal.App.2d 679] 319 P.2d 69, 79, [66 A.L.R.2d 1202] (Emphasis added.)”
We conclude that the Pennsylvania garnishment proceeding is available to determine the validity of the alleged claim of the judgment debtor against the garnishee-insurer. The judgment of January 16, 1968, and the order of December 19, 1967, will be vacated and the case remanded to the District Court for further proceedings consistent with this opinion.
. The insurance policy issued by the insurer-garnishee includes virtually identical language to that in the policy before the court in Gray supra (see footnote 2 at 223 A.2d 9), as follows (V (2) at pp. 4-5 of policy attached to Document 27):
“ * * * the Company shall:
“(a) defend with counsel of its choice any suit against a person entitled to protection alleging such injury, sickness, disease or destruction and seeking damages on account thereof. Such suit shall be defended even if groundless, false or fraudulent. The Company may make any investigation, negotiation and settlement of any claim or suit as it deems expedient; sis * * * *
“(d) pay all interest on the entire judgment accruing after entry of judgment until the Company has paid, tendered or deposited in court such part of such judgment as does not exceed the limit of the Company’s liability thereon; * * * * *
“Payments under this insuring agreement, except settlement of claims and suits, are in addition to the applicable policy limits.”
. Rules 3144 and 3145 of the Pennsylvania Rules of Civil Procedure make clear that the Interrogatories filed by plaintiff, together with the Answers to them, if ordered by the District Court, will constitute the pleadings in the contract action between plaintiff and the garnishee-insurer. The Pennsylvania Rules give ample protection to the defendant as well as the garnishee (Rules 3119, 3121, 3123, 3140, 3143(f), 3147, and 3149) and the Pennsylvania cases make clear that the judgment of June 30, 1966, against the defendant will be satisfied if the garnishee pays the balance due or settles the claim with the plaintiff. See Gretz v. Esslingers, Inc., 428 Pa. 90, 236 A.2d 508 (1967).
. In this case the court used this language at pp. 131-133:
“The same question is presented in each of these cases, and it is whether an unadjusted and unliquidated claim for a loss upon a policy of insurance against fire, is subject to attachment in the hands of the insurance company. * * * The District Court held the claim attachable, and the company brought these writs of error.
“The objection to a recovery for such a reason seems technical in these cases, for there was no difference or dispute about the amount of the loss. It was settled on the proofs presented by the insured, without reference to the arbitrament provided for in the regulations attached to the policy in the case of dispute, or to the jury at the trial. It was settled by calculation, but notwithstanding this, it was insisted here that the claim was in the class of unliquidated damages when the writ was issued, and being so, was not subject to be attached.
“We agree with the District Court in their judgment on the point that it was attachable.
$ * * $ $
“When a loss by fire has taken place, can we doubt but that the sum agreed to be paid by the insurers, in consideration of the premium paid, is prima facie ‘goods and effects,’ and is parcel of the ‘personal estate’ of the defendant? Because it is a chose in action, it is not therefore outside of the meaning of these terms. * * * But the difficulty is not this under the attachment process. It is that the amount is unliquidated, and for this reason it is supposed not to be within the meaning of the act. But this will not hold; otherwise debts due for goods sold and delivered, or work, labour, and services done and performed without the price being fixed, might not be attachable. Barge debts on book-account might escape the process, which I do not believe has ever been considered to be the law.
“ * * * but I think what was said in Fisher v. Consequa, 2 W.C.C.Rep. 382, in defining the foundation of the process, very well defines also to what it may be applied; that is, to ‘a demand arising ex contractu, the amount of which was ascertained, or which was susceptible of ascertainment by some standard referrable to the contract itself, sufficiently certain to enable the plaintiff by affidavit to aver, or a jury to find it, might be the foundation of a proceeding by way of foreign attachment, without reference to the form of action, or the technical definition of debt, the expression used in the law.’ ”
. Neither the District Court nor appellee has referred to any provision in the policy precluding garnishment of this alleged claim. In Gray v. Nationwide Mutual Insurance Company, 207 Pa.Super. 1, 214 A.2d 634, 639 (1965), the Pennsylvania Superior Court cited in its dissenting opinion, which was approved by the Pennsylvania Supreme Court, the many Pennsylvania cases holding that policy provisions against its transfer without the insurer’s consent do not preclude assignment of claims for damages after the loss has occurred and rights under the policy have accrued.
. Estate of Warren L. Loose, Opinion of 1/29/68 (#51,115, O. C. Berks, Pa.), reaches this conclusion. Cases from other jurisdictions on this issue, which have differed in their results, are cited in Meyer, “Gray v. Nationwide and Beyond,” 71 Dick.L.Rev. 257, 260-65 (1967); see, also, Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966); General Guaranty Insurance Co. of Fla. v. DaCosta, Fla.App., 190 So.2d 211 (1966). It is noted that the Pennsylvania Supreme Court has not been impressed by decisions from other states on the subject of attachment. See Girard Fire & Marine Insurance Co. v. Field, supra, where the court said at page 134:
“Authorities in other states were cited on argument, but we derive little light from them, as the attachment laws of the several states differ essentially amongst themselves and from, ours, # * $ ff
Question: What is the ideological directionality of the court of appeals decision?
A. conservative
B. liberal
C. mixed
D. not ascertained
Answer:
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songer_stpolicy
|
D
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the interpretation of state or local law, executive order, administrative regulation, doctrine, or rule of procedure by the court favor the appellant?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
Walter J. TROTTER and George D. Slabaugh for Themselves and for and in Behalf of Eugene Zynda, et al., Plaintiffs-Appellants, v. AMALGAMATED ASSOCIATION OF STREET ELECTRIC RAILWAY and MOTOR COACH EMPLOYEES OF AMERICA, DIVISION 1303; Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, AFL-CIO, Defendants-Appellees.
No. 14770.
United States Court of Appeals Sixth Circuit.
Nov. 9, 1962.
Dee Edwards, Detroit, Mich., for appellants.
Argued by and on brief Ralph W. Cole, Detroit, Mich., for Division 1303.
Thomas F. Chawke, Detroit, Mich., for Amalgamated Assn, of Street Electric Railway and Motor Coach Employees of America, AFL-CIO.
Before MILLER, Circuit Judge, and BOYD and McNAMEE, District Judges.
SHACKELFORD MILLER, Jr., Circuit Judge.
Central Greyhound Lines, hereinafter referred to as Greyhound, owned and operated three suburban bus lines or divisions in the Detroit, Michigan, area and also an interstate highway division out of Detroit. Each of these four divisions constituted a separate seniority district. Prior to May 1, 1953, its bus drivers had seniority only in the district where they worked, with no right of interchange of seniority between the suburban districts or between a suburban district and the highway district. If a driver wanted to work in another district, suburban or highway, he started in as a new man at the bottom of the seniority roster in that district.
The defendant union, as bargaining agent for the Greyhound employees, included in the collective bargaining agreement of May 1, 1953, an interchange of seniority provision, which provided that highway drivers hired prior to that date, transferring to a suburban division, would have a seniority date as of May 1, 1953, on the suburban seniority roster, and suburban drivers hired prior to that date would have a seniority date of May 1, 1953, on the highway roster and on each of the other suburban seniority rosters. This seniority provision was continued in each subsequent collective bargaining agreement between the union and Greyhound and was in effect on March 1, 1958.
On March 1, 1958, Greyhound sold its suburban lines to Great Lakes Transit Company, hereinafter referred to as Great Lakes. While negotiations for the sale were pending the union officers became concerned about the job rights of its members and the possibility that Great Lakes would not hire the Greyhound suburban drivers, and entered into negotiations for the purpose of safeguarding the rights of these employees. As a result of its efforts, Great Lakes agreed to hire all or any of the suburban drivers who elected to become its employees and assumed the contractual obligations of the employer under the collective bargaining agreement then in force. Greyhound and Great Lakes granted the drivers a period of 90 days in which to decide, each for himself, whether he wanted to continue on the suburban work as an employee of Great Lakes with his existing seniority rights or whether to transfer to the highway district of Greyhound with seniority rights in that district as provided by the collective bargaining agreement of May 1, 1953.
Of approximately 190 suburban drivers at the time of sale, approximately 61 of them elected to transfer to the Greyhound highway district. They obtained seniority in the highway operation as of May 1, 1953, in accordance with the May 1,1953, bargaining agreement. The remaining suburban drivers elected to remain on the suburban districts as employees of Great Lakes. They have had steady employment since then with the seniority which they had as employees of Greyhound.
This action was filed as a class action by two of the suburban drivers who transferred to the Greyhound highway district. The complaint alleges that as a result of the sale, the number of bus drivers employed and to be employed by Greyhound had been reduced and that it was incumbent upon the union to negotiate an agreement with Greyhound which would fairly apportion the remaining jobs among all the employees of Greyhound, but that the union, notwithstanding its duties to fairly and indiscriminately represent all the Greyhound employees, had failed to do so and had arbitrarily agreed with Greyhound that the plaintiffs shall not be permitted to exercise seniority rights on the remaining jobs based on a seniority date earlier than May 1, 1953. The complaint alleges that this agreement did not reflect relevant factors such as total seniority, safety records, employment history and other pertinent matters, and thus unjustly discriminated against the plaintiffs with-reference to seniority and other job rights in favor of the highway drivers. The complaint asks that the union be enjoined from causing Greyhound to discriminate against them in their employment, and that Greyhound be enjoined from giving any force and effect whatsoever to any agreement limiting the seniority of plaintiffs, or any of them, to May 1, 1953, in assignment of work, leaves of absence or any other incidents of their employment based on seniority.
The District Judge held that the seniority. rights of the plaintiffs were derived from and controlled by the provision of the collective bargaining agreement of May 1, 1953, Aeronautical Lodge v. Campbell, 337 U.S. 521, 526, 69 S.Ct. 1287, 93 L.Ed. 1513, and that there was no competent proof of a breach of the duty of fair representation of the membership of the union in connection with the sale of March 1, 1958. He entered judgment dismissing the complaint.
Appellants rely strongly upon Steele v. L. & N. R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173, Tunstall v. Brotherhood, 323 U.S. 210, 65 S.Ct. 235, 89 L.Ed. 187, Mount v. Grand International Brotherhood of Loc. Eng., 226 F.2d 604, C.A. 6th, cert. denied, 350 U.S. 967, 76 S.Ct. 436, 100 L.Ed. 839 and Hargrove v. Brotherhood of Locomotive Engineers, 116 F.Supp. 3, D.C. These cases are examples of the now well settled rule that the bargaining representative of employees has the duty to exercise fairly the power conferred upon it in behalf of all those for whom it acts, without hostile discrimination against any employee or group of employees. Whether the bargaining representative has acted fairly and impartially and without hostile discrimination depends upon the facts of each case. As was said in Ford Motor Co. v. Huffman, 345 U.S. 330, 338, 73 S.Ct. 681, 686, 97 L.Ed. 1048 :
“Inevitably differences arise in the manner and- degree to which the terms of any negotiated agreement affect individual employees and classes of employees. The mere existence of such differences does not make them invalid. The complete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion.”
In the present case the suburban drivers acquired certain seniority rights in the highway district by the collective bargaining agreement of May 1, 1953, which they did not have before. The sale <of the suburban operations in 1958 did not destroy those rights. The suburban drivers who elected to transfer to the highway district did so with seniority rights as provided by the bargaining agreement of May 1, 1953. They were not required to transfer and those who did not elect to transfer retained their existing seniority rights as suburban drivers and have had steady employment with Great Lakes since then. Appellants’ real complaint appears to be, not that any existing seniority rights were taken from them or that other suburban drivers acquired rights which were not available to them, but that in connection with the sale they did not acquire better seniority rights than they already had under the May 1,1953, bargaining agreement. We do not think that this constituted discrimination against them within the meaning of Steele v. L. & N. R. Co., supra, and Ford Motor Co. v. Huffman, supra.
Appellants also contend that under the provisions of Section 163 of the Constitution of the union they are entitled to greater seniority rights than they now have under the bargaining agreement of May 1,1953. This section reads in part as follows:
“In case of a reduction in the forces of labor on any street railway or bus system affecting the employes who are members of this Association, the rules of reduction shall be as follows: * *
The claim is made that the sale of the suburban lines constituted “a reduction in the forces of labor” and that their rights are those provided by the provisions of that section instead of by the bargaining agreement of May 1, 1953. We are of the opinion that the sale of the suburban lines did not constitute “a reduction in the forces of labor” within the meaning of that section.
The judgment is affirmed.
Question: Did the interpretation of state or local law, executive order, administrative regulation, doctrine, or rule of procedure by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_trialpro
|
B
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the court's ruling on procedure at trial favor the appellant?" This includes jury instructions and motions for directed verdicts made during trial. Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
NATIONAL LABOR RELATIONS BOARD, Petitioner, v. ARKANSAS-LOUISIANA GAS COMPANY, Respondent.
No. 17535.
United States Court of Appeals Eighth Circuit.
June 30, 1964.
Anthony J. Obadal, Attorney, N. L. R. B., Washington, D. C., Arnold Ordman, General Counsel, N. L. R. B., Washington, D. C., Dominick L. Manoli, Associate General Counsel, N. L. R. B., Washington, D. C., Marcel Mallet-Prevost, Asst. General Counsel, N. L. R. B., Washington, D. C., and Allison W. Brown, Jr., Attorney, N. L. R. B., Washington, D. C., for petitioner.
Tom Gentry, of Gentry & Dabbs, Little Rock, Ark., Ray Thornton, Jr., Little Rock, Ark., for respondent.
Before VOGEL, MATTHES and RIDGE, Circuit Judges.
VOGEL, Circuit Judge.
The National Labor Relations Board has petitioned this court pursuant to § 10(e) of the National Labor Relations Act, as amended, 61 Stat. 136, 73 Stat. 519, 29 U.S.C.A. § 151 et seq., for enforcement of its order of June 13, 1963, against Arkansas-Louisiana Gas Company, respondent. The Board’s decision and order are reported at 142 N.L.R.B. No. 117.- The Board, adopting its Trial Examiner’s findings and recommended order, found that respondent had violated §§ 8(a) (3) and (1) of the Act by discharging eleven employees for engaging in union activities. It also found that respondent had violated § 8(a) (1) of the Act by interrogating and threatening its employees with respect to union activity. The Board’s order, of which enforcement is requested, requires respondent to cease and desist from the unfair practices found and from in any other manner interfering with the rights of its employees under the Act. Affirmatively, the order requires reinstatement of the employees named in the complaint, the restoration of seniority and all other rights and privileges to those already re-employed, the reimbursement of back pay plus interest at the rate of 6% per annum, and the posting of appropriate notices.
Respondent objects to the petition for an enforcement order on the grounds that there is no substantial evidence in the record justifying it and further asks that it be denied because of claimed prejudicial errors committed by the Trial Examiner and approved by the Board whereby respondent was denied due process of law.
The record indicates that respondent is a Delaware corporation conducting an interstate utility business in Louisiana, Arkansas, Texas, Oklahoma, Kansas and other locations where it is engaged in the sale and distribution of natural gas. It also owns and operates non-utility enterprises through wholly owned subsidiaries. During the year preceding the issuance of the complaint herein respondent received gross revenue of more than $100,-000,000. No jurisdictional issues are present.
As part of its business operations respondent maintains a trucking terminal on 15th Street in Little Rock, Arkansas. In May 1962 there were 17 truck drivers employed at such terminal. As early as March of 1962 the drivers at the 15th Street terminal learned of management’s plan to change the method by which wages were computed. After several attempts to meet and persuade management not to effect this change, the employees sought to form a union. Between April 20th and May 8th ten of the 17 drivers signed application cards with Local 878 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Between May 11 and May 14, 1962, respondent discharged all but four of its truck drivers working at the 15th Street terminal, doing so suddenly and without warning. None of the four retained drivers had signed a union card. Circumstances surrounding the various discharges are fairly summarized from the record as follows:
On May 11th, Jenkins, the dispatcher who ran the trucking terminal and who was held by the Board to be a company supervisor, came into the yard at the trucking terminal and stopped Creed, who was about to take a truck to St. Louis. Jenkins said, “They have just fired the whole bunch. * * * They have just fired every truck driver down here.” Jenkins and Creed spoke to Garage Foreman Lafferty, who told them that he had received instructions by telephone from Lindsey Hatchett, respondent’s vice president, to lay off each driver as he arrived at the terminal. Upon Jenkins’ protest that he had several runs scheduled at that time, Lafferty stated that Hat-chett had told him to keep drivers Ford, Younts, Ware and Roberts. None of these four had signed union cards. Laf-ferty explained that he was instructed by Hatchett that this was an “economic layoff, and we were just going to have to tighten our belts.” Jenkins told Creed and another driver, Lowery, that he had so many trips scheduled he did not know what he was going to do for men to drive the trucks.
Later that afternoon in Jenkins’ office driver McEuen, who was among those discharged, remarked to Creed, who was the leader in union activity, that, “ * * it looks like I cut my own throat. I did not want to sign one of these cards because I thought I was going to the office, * * * and I would not be allowed to vote when the Union voted. * * * Now, I have messed around and I have no protection at all. I did not sign a card and you boys did, and you have protection, and I haven’t.” Jenkins broke in and asked, “You did not sign a card?” McEuen turned to Creed for confirmation of this fact, and Creed agreed that Mc-Euen had not signed a card. The next day McEuen was rehired by respondent.
That evening Jenkins informed driver Ballard that the latter was among those discharged. Jenkins asked Ballard whether he had joined the union. Ballard replied that he was not a member and Jenkins said, “Well, Creed and some of the guys seem to think that is the reason for the lay off, and if it was, I think I can get you back on.” Ballard was rehired by the respondent on September 3, 1962, but with loss of vacation pay and with no seniority.
On May 14th Ballard and three other «drivers went to Jenkins’ office. Jenkins "told then that a new driver, Jones, had "been hired that morning and that the ■company was transferring in extra driv■ers from its home office at Shreveport.
With reference to interference, re;straint and coercion, it is established in •the record that W. K. Stephens is pres.ident of the respondent corporation, and that Albert Stephens, a stockholder and brother of respondent’s president, had "been instrumental in the original hiring •of a number of respondent’s drivers. Drivers Harper and Lowery had obtained •employment applications from Albert Stephens and after filling them out returned them to him. During the course •of an interview with Lowery, Albert Stephens questioned Lowery about his feelings toward the union. Lowery re■plied that unions were all right in their place, that he had worked on jobs that •were union and ones that were not. At the end of the interview, Stephens told "him that respondent would hire him. 'Three weeks later respondent notified Lowery to report to. work. Albert Stephens also offered to hire driver Kauffman for a job with respondent, Kauffman filled out and returned the application blank given to him by Albert ^Stephens and thereafter was interviewed •at the latter’s home. Stephens told him that he had put his “o. k.” on the appli•cation and that Kauffman would hear from respondent in a few days. Albert 'Stephens said “When I put my O. K. on things, they generally stay fixed.” He -also asked Kauffman, “You know what to •do about the union?” Kauffman said, “Yes, I do.” About three weeks thereafter Kauffman began working for the ■company.
Driver Newsom filled out an application for employment which he took to Albert ^Stephens, who put his “o. k.” on it. Sub:sequently, at Albert Stephens’ request, Newsom interviewed him at the Stephens Lome. Albert Stephens told him that Le had his application and asked if he wanted to go to work for the gas company. Albert Stephens then said, “You know how the Gas Company operates. It is against the Union.” Stephens asked him if he was for the union and was told that Newsom wasn’t. Later Albert Stephens called him and told him to report to the 15th Street office.
Driver Harrington, who was a second cousin of the Stephens brothers, filed his application directly with respondent, About two months later Albert Stephens called him out to his home and told him, “ * * * that he had a job for me if Jack York did not take the job.” Albert Stephens also asked how Harrington felt about the union and Harrington replied that he did not like the union. The next day Albert Stephens told him to report to Vice President Hatchett. Harrington did so and began working the following day. Without more, this is an indication of the activities of Albert Stephens insofar as employment of the truck drivers and inquiries as to their union sympathies is concerned,
A few days'after the May 11th discharges, Albert Stephens went to driver Kauffman’s home, where he questioned him concerning the dismissals and the union activity of the drivers. Later four of the discharged drivers went to Albert Stephens’ home at his request. Albert Stephens told them he wanted “straight” answers to his questions and demanded that they tell him “who started this Union activity”. Albert Stephens said he was not a representative of the company but that if they gave him the information he wanted, he would guarantee their jobs back. Creed questioned Stephens about the validity of any guarantee he could give if he did not represent the company and Stephens replied, “How did you get your jobs to start with?” He then told the men to talk it over among themselves and then come back and give ^im some “straight answers”.
It is the Board’s contention that (1) substantial evidence, considering the record as a whole, supports its finding that respondent violated §§ 8(a) (3) and 8(a) (1) of the Act by discriminatorily discharging employees to discourage membership and activity in the union; (2) substantial evidence supports its findings that Albert Stephens was an agent of the respondent and that through, him respondent violated § 8(a) (1) of the Act by interrogating and coercing employees concerning their union activity; and (3) its order directing back pay with interest is valid and proper.
Respondent contends, first, that the Board failed to establish that it, respondent, had any knowledge of any union activity by the employees before the layoff. However, an examination of the record as a whole discloses substantial evidence of knowledge. In March preceding the May 1962 discharges the drivers indicated their dissatisfaction with the company’s proposed change of its wage structure, arranged meetings with Transportation Superintendent Crawford, with Virgil Creed acting as their spokesman. Superintendent Crawford was subsequently relieved of his duties and replaced by Lindsey Hatchett, a vice president. A meeting was requested with Hatchett, who said he would “look into it”. Subsequently, about April 15th, Lowery and some of the other drivers were talking with Jenkins. Lowery testified •
“Q. Tell us what was said ?
“A. ^ We were talking about our conditions and it seemed like something had to be done, and we could not talk to anybody. I said that it seemed like the Union was our answer, and some were inclined to agree, and Mr. Jenkins said 'yes, it looked like something had to be done,
“Q. Mr. Lowery, how did you apply for your job with the Gas Company?
“A. Through Mr. Albert Stephens.
“Q. When was this, approximate-jy?
... . _ _ f ,, ., „ . A. Along about the middle of
August, 1961.”
Albert Stephens stated he had heard about “the union” on the streets in Sheridan. (Sheridan is the county seat of Grant County wherein both Albert, Stephens and his brother W. R. Stephens, president of the company, reside.) We believe it would take a considerable amount of naivete to conclude-from this record that the respondent, had no knowledge of the union activity of its drivers before their discharge im Ma^ 1962' We find tbe Board’s concluS10n tbereon to be amPfr supported,
It is next contended by the respondent that the Board failed to establish that W. R. Stephens, Albert Stephens^ his brother, or Royce Jenkins did, as-agents and supervisors of the respondent, interrogate the employees concerning' their union membership activities or desires. By 29 U.S.C.A. § 160(e) Congress; provided that in a petition to this court, for an enforcement order
«-» * * The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as ai whole shall be conclusive.”
,In afsessmg the flndmgs’ we are &uidedl by the Monition of the Supreme Court in Universal Camera Corp. v. N. L. R. B., 1951, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456:
“ * * * The substantiality of evidence must take into account. whatever in the record fairly de— tracts from its weight. This is clearly the significance of the requirement in both statutes that courts; consider the whole record. * * *'
. „ , ., , “ * * * Nor does it mean that even as to matters not requiring expertise the court may displace the-Board’s choice between two fairly conflicting views, even though the-court would justifiably have made a different choice had the matter been before it de novo. Congress has-merely made it clear that a reviewing court is not barred from setting-aside a Board deciaion when it can_ not conscientiously find that the evidence supporting that decision is substantial, when viewed in the light ■that the record in its entirety furnishes, including the body of evidence opposed to the Board’s view.”
As to dispatcher Jenkins, the Board .•stated in its Decision and Order:
“ * * * In addition to the evidence as to supervisory duties mar-shalled by the Examiner in support • of his finding, the undisputed testimony of the General Counsel’s witnesses shows that Jenkins in assigning drivers to their runs used his in- • dependent judgment to equalize their •earnings. He also served as a link between management and the drivers, arranging meetings for them 'with the Company officials. In the • administrative hierarchy at the time •of the layoff, 17 employee drivers .reported directly to him, and he him■self reported to a vice president in •charge of the entire transportation • department of the Company. And it 'was Jenkins, again on his own initiative, who was at least instrumental in securing the reinstatement of McEuen. Under these circumstanc- • es, with no evidence adduced to the ■ contrary by the Respondent, we hold, • as did the Trial Examiner, that Jenkins was a supervisor within the meaning of Section 2(11) of the Act.”
With reference to Albert Stephens, the 'Board, after referring to the testimony •as summarized supra, stated:
“ -* * * These incidents, together with those cited by the Trial Examiner, convince us that Albert •Stephens was an agent of the Respondent and that, because of his interrogation of the employees regarding their union sympathies and the leadership of the organizational movement, the Respondent violated Section 8(a) (1) of the Act.”
In determining responsibility for union activities, the principles of agency and its establishment are to be ■construed liberally. The Supreme Court •made reference thereto in International Ass’n of Machinists, etc. v. Labor Board, 1940, 311 U.S. 72, 80, 61 S.Ct. 83, 85 L.Ed. 50, wherein, speaking through Mr. Justice Douglas, it said:
“The employer, however, may be held to have assisted the formation of a union even though the acts of the so-called agents were not expressly authorized or might not be attributable to him on strict application of the rules of respondeat superior. We are dealing here not with private rights (Amalgamated Utility Workers v. Consolidated Edison Co., 309 U.S. 261 [60 S.Ct. 561, 84 L.Ed. 738]) nor with technical concepts pertinent to an employer’s legal responsibility to third persons for acts of his servants, but with a clear legislative policy to free the collective bargaining process from all taint of an employer’s compulsion, domination, or influence. The existence of that' interference must.' be determined by careful scrutiny of all the factors, often subtle, which restrain the employees’ choice and for which the employer may fairly be said to be responsible.”
See, also, H. J. Heinz Co. v. Labor Board, 1941, 311 U.S. 514, 520, 521, 61 S.Ct. 320, 85 L.Ed. 309, and N. L. R. B. v. Link-Belt Co., 1941, 311 U.S. 584, 599, 61 S.Ct. 358, 85 L.Ed. 368. It is the respondent’s contention that the Supreme Court’s holdings in the cases supra are no longer authority, having been announced prior to the amendment of the present Act. Nevertheless, the present Act, 29 U.S.C.A. § 152(13) provides:
“In determining whether any person is acting as an ‘agent’ of another person so as to make such other person responsible for his acts, the question of whether the specific acts performed were actually authorized or subsequently ratified shall not be controlling.” (61 Stat. 139)
Subsequent holdings of this and other courts indicate clearly that the doctrine announced by the Supreme Court in International Ass’n of Machinists, etc. v. Labor Board, supra, continues to be followed. N. L. R. B. v. Champa Linen Service Co., 10 Cir., 1963, 324 F.2d 28, 30; N. L. R. B. v. Des Moines Foods, Inc., 8 Cir., 1961, 296 F.2d 285, 287; N. L. R. B. v. Birmingham Publishing Co., 5 Cir., 1959, 262 F.2d 2, 8; N. L. R. B. v. Solo Cup Co., 8 Cir., 1956, 237 F.2d 521, 523-524; N. L. R. B. v. Mississippi Products, Inc., 5 Cir., 1954, 213 F.2d 670, 672-673; N. L. R. B. v. Geigy Co., 9 Cir., 1954, 211 F.2d 553, 557; N. L. R. B. v. Howell Chevrolet Co., 9 Cir., 1953, 204 F.2d 79, 84, aff’d on other grounds 346 U.S. 482, 74 S.Ct. 214, 98 L.Ed. 215 (1953). In discussing this same question, the court in Local 636, etc., Plumbing & Pipe Fit. Ind. of United States v. N. L. R. B., 1961, 109 U.S.App.D.C. 315, 287 F.2d 354, 359, said:
“We know of nothing in the Act of 1947 or in the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C.A. § 401 et seq., which affects the vitality of * * * [the doctrine embodied in I. A. of M.].”
In interpreting 29 U.S.C.A. § 152(13), quoted supra, the courts have held that strict principles of agency are not required to be applied in determining an employer’s responsibility for the union activities of its supervisory employees. See, e. g., Local 636, etc., Plumbing & Pipe Fit. Ind. of United States v. N. L. R. B., supra, and cases cited therein.
We think the record justified the Board’s conclusion that respondent knew of, approved and ratified the actions of Albert Stephens in connection with the employment, in the first instance, of a number of respondent’s drivers and in, subsequent to the discharge, interrogating them with reference to union activity. Albert Stephens, the brother of respondent’s president, distributed respondent’s blank employment application forms, received back the forms after they were filled out by applicants for employment, interviewed prospective employees, reported the results of those interviews to respondent, informed applicants whether they could work for respondent and informed them when, where and to whom to report for work. Applicants approved by Albert Stephens who reported at the appointed time and place were given work by the respondent. In one instance an applicant who had applied for a position directly with the company was subsequently called by Albert Stephens and told to see him for an interview. Upon receiving Albert Stephens’ approval, this applicant was given work by respondent.
We conclude from the foregoing and without further reference to detailed evidence in the record that the Board’s, findings that Jenkins was a supervisor and Albert Stephens was an agent of the respondent for whose activities respondent became responsible are supported by substantial evidence in the record considered as a whole and may not be set aside here.
We further hold that there is substantial evidence in the record from which the Board was fully justified in finding that the drivers herein were discharged because of their union activity and that such discharges were in violation of § 8(a) (3) of the Act. The timing and manner of discharges were compellingly significant. Following unsatisfactory and inconclusive meetings with respondent’s executives over wage computation methods, the drivers began union organizational activities. Between April 20 and May 8, 1962, ten drivers of the 17 employed at this terminal signed union application cards. Between May 11 and May 14, 1962, all drivers who had thus signed cards were, without previous warning, laid off and terminated. Only four drivers of the 17 were retained. None of the four had signed a union card. Another driver, upon telling Jenkins that he had not signed a union card, was promptly rehired. These discharges were made in the face of apparent driver shortage, were accompanied by efforts to get replacements from the respondent’s plants elsewhere and were made without regard to seniority ratings or consideration of accident records and efficiency classifications based thereon. The common factor among the discharged drivers was the signing or carrying of a union application card.
It may also be noted that the employees were told in the first instance that this was an “economic layoff and we were just going to have to tighten our belts”. Respondent’s utter failure to introduce any evidence to justify such a conclusion plus the fact that the discharges left them shorthanded is a complete and sufficient refutation of respondent’s contention that the discharges were for economic reasons and because of lack of work.
We find the Board’s conclusions are fully justified by the record considered as a whole, including that which “fairly detracts from its weight”.
Respondent contends that certain prejudicial errors were committed by the Trial Examiner and adopted by the Board. Among other things, it claims that it was not permitted by the Examiner to show when it hired driver William Jones that it intended for him to work as a pipeline spacer on construction work, a job which, at the time of Jones’ hire, was not yet in existence. The ruling of which respondent complains is not before us in the printed record. Respondent has accordingly failed to comply v/ith our Rule 10(b) which provides, inter alia, “If the appellant or petitioner in his brief challenges rulings upon evidence, such evidence, the objections interposed thereto, and the rulings questioned shall be quoted in the printed record, * * Failure to comply with Rule 10(b) would justify this court in refusing to consider respondent’s contention. Zitserman v. F. T. C., 8 Cir., 1952, 200 F.2d 519, 521. The Board has, however, seen fit to attempt to refute respondent’s contention in its brief. It points out, and we agree, that the evidence fully supports the conclusion that respondent hired Jones to work as a truck driver. Supervisor Jenkins advised the discharged drivers that Jones had been hired for that purpose and it is undisputed that'before coming to work for respondent Jones took a physical examination to qualify him as a truck driver pursuant to the requirements of the Interstate Commerce Commission. Supervisor Jenkins told the discharged drivers he had gotten some help from Shreveport and that as to Jones, “Yes, we hired him this morning, [shortly after the discharges] and he is going to take his physical now. If he passes, he will go out on a trip this evening.” If. any error was committed in connection with refusing respondent’s attempt to make a further showing, if it did so attempt, then we find the error to be without prejudice.
We likewise hold that the Trial Examiner’s exclusion of respondent’s proffered evidence that it had amicable relations with other unions to be without prejudice. Cf. Pittsburgh Plate Glass Co. v. N. L. R. B., 1941, 313 U.S. 146, 158, 61 S.Ct. 908, 85 L.Ed. 1251; National Airlines, Inc. v. C. A. B., 1963, 116 U.S.App.D.C. 114, 321 F.2d 380, 383.
Respondent’s further claim is that it was improperly denied the right to inspect pre-trial statements of the general counsel’s witnesses. A number of witnesses had been called by the general counsel, examined, cross-examined and excused. The witness Marvin Younts (one of the retained drivers who had not signed a union card) was then called. During the direct examination of Younts it appeared that he had given a written statement during the investigation but on the witness stand claimed that he had been drinking during that time and could not remember what had been said. Counsel for the respondent then stated:
“Now, Mr. Examiner, at this time, I would like to ask that Counsel for the General Counsel furnish us with a copy of that statement and all other statements which he has taken from his witnesses, which he has used or may use hereafter.”
Further examination of the witness Younts failed to identify the statement, whereupon the general counsel asked that the witness be declared hostile. The request was not granted but the Trial Examiner suggested that the witness be withdrawn. This was done and all of his testimony was stricken. Counsel for respondent renewed his request for a copy of the statements “that Counsel has used in examining other witnesses he has put on the stand.” The Examiner ruled:
“I just have this to say, that you are untimely in your request for statements of previous witnesses. The witnesses have been excused, and the request is untimely.”
The Board’s rules promulgated after Jencks v. United States, 1957, 353 U.S. 657, 77 S.Ct. 1007, 1 L.Ed.2d 1103, provide in pertinent part as follows: 29 U.S.C.A.App.
Ҥ 102.118 Same; Board employees prohibited from producing files, records, etc., pursuant to subpena ad testificandum or subpena duces tecum, prohibited from testifying in regard thereto
* * * * *
“ * * * Provided, After a witness called by the general counsel has testified in a hearing upon a complaint under section 10 (c) of the act, the respondent may move for the production of any statement of such witness in possession of the general ■counsel, if such statement has been reduced to writing and signed or ■otherwise approved or adopted by the witness. Such motion shall be granted by the trial examiner. If the general counsel declines to furnish the statement, the testimony of the witness shall be stricken: * * *»
Under the foregoing rule, it is perfectly clear that the statement of the witness Younts need not have been produced after his testimony had been stricken. We further conclude that the Trial Examiner’s ruling that the request as to the other statements of witnesses who had been excused was untimely is likewise correct.
As to the respondent’s contention that the Board is without authority to award interest on back pay, this court has previously approved the Board’s practice of adding 6% interest to back pay awards. See Marshfield Steel Co. v. N. L. R. B., 8 Cir., 1963, 324 F.2d 333, 337-339; N. L. R. B. v. Byrds Mfg. Co., 8 Cir., 1963, 324 F.2d 329, 333.
We have examined all of the respondent’s claimed errors and find none of them to be of substantial merit.
An order of enforcement will be granted.
Question: Did the court's ruling on procedure at trial favor the appellant? This includes jury instructions and motions for directed verdicts made during trial.
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_procedur
|
A
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the interpretation of federal rule of procedures, judicial doctrine, or case law, and if so, whether the resolution of the issue by the court favored the appellant.
TEMPCO ELECTRIC HEATER CORPORATION, Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.
Nos. 92-3050 and 92-3249.
United States Court of Appeals, Seventh Circuit.
Argued March 30, 1993.
Decided July 19, 1993.
Robert P. Casey, Charles E. Murphy, Richard L. Samson (argued), David B. Montgomery, Murphy, Smith & Polk, Chicago, IL, for petitioner.
Elizabeth Kinney, Denise R. Jackson, N.L.R.B., Chicago, IL, Aileen A. Armstrong, Nancy J. Gottfried (argued), Appellate Court, Enforcement Litigation, Paul J. Spielberg, Washington, DC, for respondent.
Before CUMMINGS and RIPPLE, Circuit Judges, and TIMBERS, Senior Circuit Judge.
The Honorable William H. Timbers, Senior Circuit Judge of the United States Court of Appeals for the Second Circuit, is sitting by designation.
CUMMINGS, Circuit Judge.
Tempco Electric Heater Corp. seeks review of an order of the National Labor Relations Board (“Board”) requiring it to bargain with Local 1031, International Brotherhood of Electrical Workers, AFL-CIO, as the collective bargaining representative of Tempco’s full-time and regular part-time production and maintenance employees at Tempco’s facility in Wood Dale, Illinois. In turn, the Board has applied for enforcement of its order.
Tempco manufactures heating elements for the package and plastic processing industry. In March 1991, the Union filed a petition with the Board seeking to represent Temp-co’s production and maintenance employees. An election with secret ballots was held on May 17, 1991; eighty-one workers voted for the Union and sixty-five against. Although seven ballots were challenged, that would have been an insufficient number to alter the outcome of the election even if the challenges were valid. Nevertheless, Tempco raised several objections to the way the election was conducted. The company complained that workers were intimidated, coerced and misled into voting for union representation.
The company took its objections to an NLRB hearing officer who sided with the Union after listening to testimony for four days. The hearing officer recommended to the Board that a Certificate of Representative issue, meaning that the Union would be approved to represent the employees in collective bargaining. On February 26, 1992, a three-member panel of the Board adopted the hearing officer’s findings and certified the Union, but Tempco still refused to bargain with it. This led the Board’s general counsel in April 1992 to issue a complaint against Tempco for engaging in unfair labor practices. The ease went before the Board again, which found that Tempco violated 29 U.S.C. §§ 158(a)(5) and (1) by refusing to bargain with the Union and by withholding critical information from the Union. The Board castigated Tempco because all of the evidence it claimed infected the election had been or should have been raised in the earlier proceedings before the hearing officer and the Board.
Tempco remains persistent. The company appealed the Board’s cease and desist order to this Court, and we conclude its claims that the election was unfair are no more compelling than did the NLRB hearing officer or the Board on two occasions. We have jurisdiction to entertain direct appeals of Board decisions under 29 U.S.C. §§ 160(e) and (f).
Tempco argues that at a mass meeting (eighty-six workers attended) held on the eve of the election at a local VFW hall, an agent of the Union threatened the job of one employee who challenged the Union’s promises about better wages and benefits. The company also claims that the Union conducted an improper poll to gauge its support among the workers present. The meeting was conducted by the Union’s assistant business manager and recording secretary, Roy Cortes. A number of other Union officials were there as well including the president of the local. Cortes spoke at some length about the Union’s representation of other companies including Zenith Electronics Corp. and A.R.I. Okasaki, a competitor of Tempco’s. Cortes promised that workers’ wages would go “higher and higher.” At one point Cortes’ assertions of better wages and benefits were challenged by an employee named Orlando Monte, who had been hired only the month before. Monte said that his father had worked at Zenith and that Cortes’ rosy picture of life in a Union was misleading. Monte also said that the Union representatives were liars and that he would rather leave the company than pay union dues. A number of employees starting yelling at Monte; they questioned his authority to speak since he had only been at Tempco for a few weeks. Cortes picked up the theme and claimed that Monte had been sent as an infiltrator by Fermín Adames, Tempco’s president, to disrupt the meeting. Then, according to the testimony of Monte and others before the hearing officer, Cortes said to Monte something like, “Yourself, the one next to you, and those others who are nonunion supporters, I will promise you that from a week to a month’s time you will not be employed; you will not be working” (Monte’s version); or “Once he performs his dirty work, he is going to go somewhere else and perform the same dirty work for another employer” (Cortes’ version); or “His job was finished, he wasn’t going to work anymore for Tempco” (another worker’s version) (plaintiffs app. at 18).
The question we must answer is whether the union representative’s statements to Monte were a threat which poisoned the election and coerced other workers into voting for the Union. Since the results of a Board-supervised and certified election are presumptively valid, NLRB v. Browning-Ferris Ind. of Louisville, Inc., 803 F.2d 345, 347 (7th Cir.1986), and the objecting party bears the burden of proof, NLRB v. Mattison Machine Works, 365 U.S. 123, 124, 81 S.Ct. 434, 435, 5 L.Ed.2d 455, Tempco must show that Cortes’ conduct “so influenced potential voters that free choice was impossible.” NLRB v. Chicago Marine Containers, Inc., 745 F.2d 493, 500 (7th Cir.1984), quoting NLRB v. Advanced Systems, Inc., 681 F.2d 570, 575 (9th Cir.1982). Tempco has not even come close to this showing. First, there is an innocent interpretation to Cortes’ remarks. If he genuinely believed that Monte was a company shill sent to break up the meeting, statements that his employment at Tempco would be short-lived might have merely been a prediction that Monte would move on to perform the same anti-union function at another company after the election. This interpretation of Cortes’ statements is hardly implausible since Monte, the most outspoken opponent of the Union, had been employed for just a month. More to the point, even if Cortes’ remarks were a threat to Monte, most of the workers would have thought it was an idle threat — i.e., that the Union would be unable actually to fire a worker who spoke against collective bargaining. If a reasonable employee would not think that a threat was within the Union’s power to achieve, it is not sufficiently coercive to taint an election. NLRB v. Sumter Plywood Corporation, 535 F.2d 917, 924 (5th Cir.1976), certiorari denied, 429 U.S. 1092, 97 S.Ct. 1105, 51 L.Ed.2d 538.
Tempco’s next argument is that the Union conducted an improper poll. The danger of a poll is that it forces undecided workers to express public support or opposition. We have held that employers may not conduct a poll under any circumstances, but that a Union may unless the polling “in fact was coercive and in fact influenced the result of the election.” Kusan Mfg. Co. v. NLRB, 749 F.2d 362, 365 (6th Cir.1984). Tempco cannot meet that test because there was no poll taken at the May 16 meeting. All that Cortes said was, “See you at the election, we will win. Show your pride,” to which a number of employees shouted “yes!” This was nothing more than a rallying cry to vote. Cortes did not even ask those present to express a preference — that undecided workers might have felt pressured to state an opinion in these circumstances is far-fetched.
The Board’s order will be enforced in full.
. The bargaining unit excludes office clericals, sales persons, employees of independent contractors, professional employees, temporary summer help, guards and supervisors.
Question: Did the interpretation of federal rule of procedures, judicial doctrine, or case law by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_appel1_7_2
|
D
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine the gender of this litigant. Use names to classify the party's sex only if there is little ambiguity (e.g., the sex of "Chris" should be coded as "not ascertained").
UNITED STATES of America, Appellee, v. Cynthia BAKER, Appellant.
No. 89-2827.
United States Court of Appeals, Eighth Circuit.
Submitted June 12, 1990.
Decided June 20, 1990.
Rehearing Denied July 23, 1990.
Joseph V. Neill, St. Louis, Mo., for appellant.
Mitchell Stevens, St. Louis, Mo., for ap-pellee.
Before McMILLIAN and BOWMAN, Circuit Judges, and HENLEY, Senior Circuit Judge.
PER CURIAM.
Cynthia Baker appeals from a judgment of the district court finding her guilty of possession with the intent to distribute cocaine in violation of 21 U.S.C. § 841(a)(1). We affirm.
On April 20, 1989 Detective Samuel Zouglas of the St. Louis, Missouri Police Department applied for a search warrant for 4606 Shenandoah. In his affidavit in support of the application, Zouglas stated that a confidential informant had been inside the residence during the previous twenty-four hours and had observed a woman named “Cynthia” in possession of cocaine and that she had sold cocaine to numerous persons who had come to the residence. Zouglas stated that in the past the informant had supplied information that resulted in three arrests. Zouglas also stated that he had conducted surveillance of the residence on April 19 between 7:00 p.m. and 9:00 p.m. and had observed a large number of persons entering and leaving the residence.
On April 21 Zouglas and four other police officers executed the warrant. On entering the home, Zouglas saw Baker coming out of a bathroom and heard a toilet flushing. He went to the bathroom and retrieved a brick of cocaine from the commode. In addition, he seized three bags of cocaine lying on the bed, packaging material, two scales, $654.00 in cash, and a loaded revolver in a metal box underneath a bed.
Zouglas placed Baker under arrest and advised her of her Miranda rights. He then asked if she had any more drugs. She responded that there were more drugs in her automobile, from which Zouglas seized three bags of cocaine. Baker also told Zouglas that the drugs belonged to a Colombian named “Mike” and that she had broken down large pieces of cocaine and repackaged them about three times. The total weight of the cocaine seized was approximately 585 grams with a street value estimated at $60,000.00.
On appeal, Baker first argues that the district court erred in denying her motion for a hearing under Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978). “To receive a Franks hearing[,] the defendant ... must make a substantial preliminary showing of an intentional or reckless falsehood made in the [search warrant] affidavit ... The sub-stantiality requirement is not lightly met.” United States v. Wajda, 810 F.2d 754, 759 (8th Cir.), cert. denied, 481 U.S. 1040, 107 S.Ct. 1981, 95 L.Ed.2d 821 (1987). In addition, “[t]he deliberate falsity or reckless disregard whose impeachment is permitted ... is only that of the affiant, not of any nongovernmental informant.” Franks v. Delaware, 438 U.S. at 171, 98 S.Ct. at 2684.
In support of her motion, Baker submitted an affidavit in which she stated that no one was in her home during the twenty-four hours preceding the warrant application, and that a large number of people did not enter or leave her home on April 19 between 7:00 and 9:00 p.m. She also submitted the affidavit of LaShonda Murray, a thirteen-year old girl who stated that Baker had taken her shopping at the time of the surveillance, and cash register receipts for purchases made at that time. In addition, at the suppression hearing before the magistrate, Baker’s upstairs neighbors, Thomas and Joanne Foster testified. However, Thomas testified he could not recall what he was doing on April 19 between 7:00 and 9:00 p.m., and Joanne testified she probably was not home.
In her recommendation, the magistrate found that Baker had failed to make the necessary preliminary showing to justify a Franks hearing. At the bench trial, the district court, over the government’s objection, allowed Baker’s counsel to cross-examine Zouglas concerning the search warrant affidavit and allowed counsel to submit the affidavits in support of Baker’s contention that she was shopping at the time of the surveillance. The district court asked counsel what additional evidence he would submit at a Franks hearing. Counsel replied he wanted to investigate whether the surveillance location had a view of the residence. The court asked Zouglas if he had had a good view and he replied that he did. The court then stated it was adopting the magistrate’s recommendation.
While we are inclined to agree with the government that Baker’s request for a Franks hearing is moot, we believe that the magistrate was correct in ruling that Baker failed to make a preliminary showing to justify a Franks hearing. As the magistrate noted, Baker’s alleged absence at the time of surveillance did not contradict Zouglas’s statement concerning the surveillance, and the neighbors’ testimony was of no value. In addition, although Baker contended that the confidential informant gave false information to Zouglas, she made no showing that Zouglas intentionally repeated the allegedly false information in the affidavit.
We also agree with the magistrate and district court that, based on the totality of the circumstances, the search warrant was supported by probable cause. See Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). The affidavit sets forth the informant’s record of reliability and basis of knowledge, and the information was partially corroborated by the surveillance. See United States v. Bourbon, 819 F.2d 856, 858-59 (8th Cir.1987) (probable cause supported search warrant where affidavit stated informant had supplied reliable information in past and had personal knowledge of drug activity).
Baker also challenges the district court’s application of the Sentencing Guidelines. Specifically, she alleges that the district court erred in applying an upward adjustment under Guidelines § 3C1.1 for obstruction of justice based on her attempt to destroy the cocaine, in applying an upward adjustment under § 2D 1.1(b)(1) for possession of a firearm during commission of the offense, and refusing to grant a downward adjustment under § 3E1.1 for acceptance of responsibility. All of her arguments are without merit. See, e.g., United States v. Patterson, 890 F.2d 69, 71-73 (8th Cir.1989) (pre-arrest actions support adjustment for obstruction of justice); United State v. Green, 889 F.2d 187, 188 (8th Cir.1989) (unloaded handgun discovered in headboard of bed justified adjustment for possession of weapon during commission of offense); and United States v. Grimes, 899 F.2d 731, 732 (8th Cir.1989) (affirmance of denial of adjustment for acceptance of responsibility even though defendant supplied information about drug supplier).
Accordingly, the judgment of the district court is affirmed.
. The Honorable George F. Gunn, Jr., United States District Judge for the Eastern District of Missouri.
. In United States v. Holland, 884 F.2d 354, 359-60 (8th Cir.), cert. denied, — U.S. -, 110 S.Ct. 552, 107 L.Ed.2d 549 (1989), this court stated that "[b]ecause the trial court’s upward adjustment for obstruction of justice was proper, the refusal to make a downward adjustment for acceptance of responsibility was correspondingly correct.” We note that effective November 1, 1989, the commentary to Guidelines § 3E1.1 provides that "[cjonduct resulting in an enhancement under § 3C1.1 (Willfully Obstructing or Impeding Proceedings) ordinarily indicates that the defendant has not accepted responsibility for his criminal conduct. There may, however, be extraordinary cases in which adjustments under both §§ 3C1.1 and 3E1.1 may apply.” Even if the commentary were applicable, this would not be an "extraordinary case” warranting a downward adjustment for acceptance of responsibility.
Nor do we believe a remand is warranted under United States v. Knight, 905 F.2d 189 (8th Cir.1990). In Knight, this court held that a "district court retained discretion to grant the two-level reduction for acceptance of responsibility pursuant to section 3E1.1 if it believed that [a defendant] 'demonstrate])!] a recognition and affirmative responsibility’ and 'sincere remorse' for the offense that he committed." (At 192.) The court remanded for resentencing because the record was unclear whether the district court applied the proper standard. Our review of the record in this case convinces us that the district court believed it retained the discretion to grant a downward adjustment, but refused to do so on the facts of the case, which included Baker’s refusal to supply information about others and failure to acknowledge the sizeable quantity of drugs. We also note that at sentencing Baker justified her dealing in drugs by informing the court it was the only way she could support her children. Such a statement may not have demonstrated "sincere remorse” for her actions.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". What is the gender of this litigant?Use names to classify the party's sex only if there is little ambiguity.
A. not ascertained
B. male - indication in opinion (e.g., use of masculine pronoun)
C. male - assumed because of name
D. female - indication in opinion of gender
E. female - assumed because of name
Answer:
|
songer_treat
|
B
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
DONNELLY v. CONSOLIDATED INV. TRUST et al.
No. 3322.
Circuit Court of Appeals, First Circuit.
Sept. 27, 1938.
Edward C. Park, of Boston, Mass. (Lothrop Withington, of Boston, Mass., on the brief), for appellant.
William T. Snow, of Boston, Mass, ficharles S. Maddock and Gaston, Snow, Hunt, Rice & Boyd, all of Boston, Mass., on the brief), for appellee Consolidated Inv. Trust.
Charles P. Curtis,’Jr., of Boston, Mass. (John L. Hall, Philip H. Rhinelander, Rodgers Donaldson, and Choate, Hall & Stewart, all of Boston, Mass., on the brief), for appellee Dumaines.
Before WILSON and MORTON, Circuit Judges, and MAHONEY, District Judge.
MORTON, Circuit Judge.
This is an appeal in a bankruptcy case. The principal question presented concerns the right of Dumaine and Winsor to purchase and hold shares of the Amoskeag Company and the Amoskeag Manufacturing Company and to receive certain liquidating dividends on ■ the Manufacturing Company stock. There is also a question as to the appellant’s standing to appeal. The facts are stated in very condensed form in the Referee’s certificate.
The'Amoskeag Company was a holding company in the form of a Massachusetts trust. It rested on an agreement or declaration of trust, and the beneficial interests were represented by transferable shares,— a common form of business organization,. Such organizations are for purposes of taxation regarded as corporations which they much resemble, the trustees being analogous to directors and the shareholders to corporate stockholders. The shares of the Amoskeag Company were listed and dealt in on the Boston Stock Exchange. Both Dumaine and Winsor were trustees of it. The trust instrument is not before us nor is there any finding as to their duties under it. Presumably they were to hold and manage the property of the trust for the benefit of the certificate holders. The property consisted of all the shares of the Amoskeag Manufacturing Company, which was also a Massachusetts trust of similar character. It operated large textile and finishing mills in Manchester, New Hampshire, and had substantial assets.
In the summer of 1927 an offer was made by outside parties to purchase the assets of the Amoskeag Company, i. e., the shares of the Amoskeag Manufacturing Company at a price which would realize for the common shares of the holding company $90 each. This was substantially more than they were then selling for in the market. The avowed purpose of the buyers was complete liquidation of the properties. Dumaine, who was a trustee of the Manufacturing Company and treasurer of it, opposed the sale. Winsor, who was also one of the trustees and was a partner in the bankifig house of Kidder, Peabody & Co., caused letters to be sent by his firm to all shareholders in the Amoskeag Company, saying that Kidder, Peabody & Co. regarded the shares as worth more than the then market-value and advised shareholders not to sell. About this time, — the date is not stated, — what may be regarded as^ a counter-plan was formulated by Dumaine and Winsor and other trustees acting with them. It contemplated partial, not- complete, liquidation of the property. If adopted it would make the shares worth substantially more than the existing ’market price of them. After this counter-plan was formulated but before any public announcement of it, Dumaine and Winsor begqn purchasing in the open market enough shares of the Amoskeag Company to secure voting control and the adoption of their own plan. Their purpose, as found by the Referee, in formulating their counter-plan and in endeavoring to put it through, was “First, to give timid stockholders a chance to get their money out of the textile business. Second, to avoid the possibility of control by an outside group whose sole purpose was to liquidate.” (Referee’s Certificate.) The Kidder, Peabody letter to shareholders was sent before any of the Dumaine and Winsor purchases were made. Some of their purchases were made before and some after the counter-plan had been formulated and made public. Dumaine and Winsor bought “all the stock they wanted at figures well below the $90 offered by the outsiders and well below the figures which they knew the stock would command in their own plan of liquidation. They obtained all the stock they needed to secure the adoption of the trustees’ plan and assured themselves a substantial profit at the same time.” (Referee’s Certificate.) Soon after the purchases in question were completed the trustees’ plan for partial liquidation was adopted and each shareholder was offered $42 in cash, a bond of the Manufacturing Company “worth $40.-00”, and a share of the latter, stock for each share in the holding company. Dumaine and Winsor accepted this offer as did many other shareholders. They real7 ized enough in cash and on the sale of the bonds to cover all expenses of the purchase of the stock. “They gained at least the value of the stock in the operating trust. (Referee’s Certificate.) The stock in the operating trust so acquired by Dumaine and Winsor was in turn passed on by them to Consolidated Investment Trust, the appellee in this case, and to “Dumaines,” a similar trust. These trusts are subject to any disability which affected Winsor and Dumaine personally.
The Manufacturing Company petitioned for reorganization under section 77B, Bankr.Act, 11 U.S.C.A. § 207. After all direct claims had been paid a surplus remained distributable to its shareholders, and the Referee made the order which is appealed from. It is called “a first dividend in liquidation” “at the rate of $2.00 per share.” The trustees in liquidation are directed to pay a stated sum to the debtor to be distributed by it through its agent, the Old Colony Trust Co. Detailed provisions are made with respect to the presentation and endorsement of certificates and other formal matters. Under this order the shares purchased by Dumaine and Winsor as above stated are entitled to participate.
It is the contention of the appellant, Donnelly, that by reason of Dumaine’s and Winsor’s positions as trustees they could not rightfully purchase stock of the Amoskeag Company, nor receive any distributions or dividends upon it. Donnelly’s only interest in the matter is as one of the shareholders in the original trust who, by exchange of shares under the trustees’ plan, received stock in the debtor. He contends that the Dumaine and Winsor shares should be regarded as cancelled, and that the amounts payable upon them in the liquidation, at least to the extent to which they represented profits, should be apportioned among the other shareholders. Both the Referee and the District Judge rejected the contention. The District Judge permitted an appeal in the name of the trustees; otherwise it is quite clear” that Donnelly would have no standing either on a direct appeal under section 25, 11 U.S. C.A. § 48, or on an appeal by allowance under section 24(a), 11 U.S.C.A. § 47(a). There is doubt as to the effect- of the District Judge’s order allowing him to appeal in the name of the trustees. We pass by these questions because we think it easier and more satisfactory to dispose of the case on the merits.
A trustee may not legally take or hold any interest or position in conflict with the trusts which he has undertaken, nor may he make a personal profit out of transactions made on account of the trust. Familiar examples of this are buying from or selling to the trust by a trustee in such a way that he makes a profit directly or indirectly. Jackson v. Smith, 254 U.S. 586, 41 S.Ct. 200, 65 L.Ed. 418. This principle, on which the appellant relies, has no application in the present case. The trust was not a party to the contracts by which Dumaine and Winsor acquired their stock; nor was it affected by these transactions except that one shareholder was substituted for another. The only persons affected by such contracts were the parties to them. Dumaine’s and Winsor’s purchases of Amoskeag shares did not in the least affect Donnelly’s interest as a shareholder; the number of shares was not altered nor the amount payable on each share, and it did not matter to him who the other owners of shares were. The purchases were not as he contends utterly illegal and void; no authority is cited in support of this position, and we are aware of none. The disability of a trustee is against profiting personally at the expense of his trust; and this disability will be rigidly enforced. Nothing of that sort occurred here as to Donnelly. Whether there was improper profiting on the part of Dumaine and Winsor at the expense of the shareholders who sold to them is a distinctly different question, not presented by this appeal, on which the complete facts are not before us, and on which we express no opinion.
The order appealed from is affirmed with costs in both courts.
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
|
songer_appnatpr
|
0
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "natural persons". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
JEFFERSON NATIONAL BANK OF MIAMI BEACH, as the Personal Representative of the Estate of Philip Litner, Deceased, Plaintiff-Appellee, v. CENTRAL NATIONAL BANK IN CHICAGO, Defendant and Third-Party Plaintiff-Appellant, v. Jerry LITNER, Third-Party Defendant-Appellee.
No. 82-1427.
United States Court of Appeals, Seventh Circuit.
Argued Sept. 29, 1982.
Decided Feb. 25, 1983.
Francis J. Higgins, Bell, Boyd & Lloyd, Chicago, Ill., for defendant and third-party plaintiff-appellant.
Morris J. Coff, Holleb & Coff, Ltd., Chicago, Ill., for plaintiff-appellee.
Before CUMMINGS, Chief Judge, COFFEY, Circuit Judge, and HILL, Senior District Judge.
The Honorable Irving Hill, Senior District Judge of the Central District of California, is sitting by designation.
COFFEY, Circuit Judge.
This diversity action was brought by the corporate Personal Representative of the Estate of Philip Litner, Jefferson National Bank of Miami Beach, for the benefit of the beneficiaries under the decedent’s will. The Personal Representative claims that the defendant corporate Trustee, “Central National Bank in Chicago,” breached the fiduciary duty it owed to Mr. Philip Litner by failing to act prudently and conscientiously with the best interest of Philip paramount during the entire period the defendant acted as Trustee of the decedent’s revocable inter vivos trust. The Trustee filed a third-party complaint against the decedent’s son, Jerry Litner, seeking indemnification from any losses that it might suffer as a result of the Personal Representative’s lawsuit. The Trustee maintains that the son wrongfully represented that he had the authority to act as the decedent’s agent. Following a jury trial in the district court, verdicts were returned in favor of the Personal Representative and the decedent’s son. Actual damages were assessed against the Trustee in the amount of $394,475.40, while punitive damages were denied. We Affirm.
FACTS
On August 2, 1968, Philip Litner retired from his post as Chief Executive Officer of a subsidiary of Curtis Electro Corporation (“Curtis”), resigned as an officer of Curtis and sold all of his Curtis stock to the corporation. Although its common stock was publicly traded, the Curtis Electro Corporation was controlled by members of the Litner family. Philip’s brothers and son were not only directors of the corporation but also occupied senior management positions.
Curtis agreed to purchase the stock of Philip Litner for $511,560. At the time of sale, Philip Litner received a cash down payment of $148,352.40 and an unsecured promissory note of $363,207.60 for the remaining balance bearing interest at 5 percent and calling for payment of the principal in three installments: one payment due on January 2,1969; one on January 2,1971; and the last payment due January 2, 1972. Curtis made the first installment to Philip Litner, but failed to make the two remaining payments of $127,890 each.
William Purcell, a vice president of plaintiff-appellant “Central National Bank in Chicago” (“Central”), called on Philip Litner shortly after he sold his Curtis stock. At this time, Mr. Purcell, responsible for the development of new trust business for Central, suggested to Philip that he consider establishing a “revocable living trust” for estate planning purposes. Philip Litner expressed concerns regarding the administration of the trust and Purcell agreed that the Trustee would consult him (Philip) before making any investment decisions. Mr. Purcell supported this agreement with a statement that the bank would not exercise investment control without Mr. Litner’s permission.
Philip requested that Central supply Eli Fink (Philip’s attorney) with a proposed trust agreement. Mr. Fink and an attorney for Central negotiated the language to be contained in the agreement creating the inter vivos trust and on September 25,1969, Philip Litner and a representative of Central signed the agreement designating Central as the Trustee of “Philip Litner Trust Ño. 1.” (“Trust”). During his lifetime, Philip was to be the sole beneficiary of the Trust and upon his death new trusts were to be established for the benefit of his wife and children. The initial Trust corpus consisted of Curtis Electro’s promissory note of $255,780 and, in addition, other securities valued at approximately $220,000.
From September of 1969 until January of 1971, Central communicated with Philip Litner concerning Trust investments and on one occasion Mr. Litner gave Central written approval of an investment change. Pri- or to January 17, 1971, there was limited discussion between Central and Philip Litner regarding the Curtis promissory note.
On January 17, 1971, Philip Litner suffered a severe stroke, was hospitalized for several weeks and thereafter was confined to a nursing home for temporary care. The residuals of this stroke were rather severe in that Philip Litner was left partially paralyzed and no longer able to speak. On or about January 25, 1971, Jerry Litner (Philip’s son) contacted Central and informed the bank that his father had suffered a stroke and was in a coma. The following month, Jerry Litner met with various officers of Central and advised them of his father’s disability, reciting that his father could comprehend what was going on about him but was only able to communicate through physical gestures. At this time, Jerry Litner expressed concern about how his father’s increased medical, personal and living expenses would be paid. After discussion, an agreement was reached whereby the Trustee would make monthly disbursements to Betty (Philip’s wife) and she, in turn, would take care of the expenses.
Because Curtis Electro suffered economic difficulties they were unable to make the January 2, 1971 note payment due to cash flow problems. In lieu thereof, Curtis executed a new two-year promissory note in the amount of $127,890 bearing interest at the prime rate. On or about March 15, 1971, Central, as Trustee, agreed to the substitution of a replacement note for the then due cash payment.
Subsequent to Jerry Litner’s advising the Trustee of his father’s condition, Central took no action to ascertain on its own the mental condition or competency of Philip Litner. Even though Philip was the sole beneficiary of the Trust, Central never communicated, or attempted to communicate, directly with him about the Trust for several years after his stroke. Instead of consulting with Philip, Trust matters were communicated to Jerry and Betty Litner. Monthly Trust statements were forwarded to Betty Litner and monthly Trust income payments were deposited in her bank account without obtaining Philip’s approval. On several occasions between 1971 and 1973, investment recommendations for the Trust were also forwarded to Betty Litner and she indicated her approval of the same on Central’s written consent forms.
As Curtis Electro’s principal lender, Central entered into a commercial loan agreement which provided Curtis with an unsecured revolving line of credit in the amount of $1,500,000 for general business purposes. It should be noted that Philip Litner was personally aware of the Curtis loan agreement and of Central’s position as principal commercial banker of Curtis at the time he designated the bank as Trustee. During the late 1960s and prior to August of 1972, pursuant to the revolving credit agreement, Central made unsecured loans to Curtis, the parent company, without taking collateral or obligating the subsidiaries in any way. The loan agreement with Central prohibited Curtis from pledging, mortgaging, encumbering or otherwise granting any security interest in any of Curtis’ properties without the prior written approval of Central.
In 1970, Curtis lost in excess of $700,000 and, thereafter, was unable to meet its financial obligations as its economic well-being continued to deteriorate. At the September, 1971, meeting of the Curtis Board, attended by Jerry Litner and Michael Gaffigan, Curtis director and Central commercial loan officer, the payment of the third installment obligation on the Philip Litner note was discussed. The Curtis directors determined that due to the corporation’s severe financial problems the payment could not be made and the Trustees should be contacted to negotiate a modification of the note obligation. Subsequently, Jerry Litner informed Bruce Duff, Central National’s account administrator for the Trust, that Central would be contacted by Curtis concerning the company’s cash flow problem vis-a-vis the January, 1972 note payment and urged him to “work out an arrangement” with the company.
Prior to being contacted by Curtis, Mr. Duff questioned Mr. Gaffigan regarding Curtis Electro Corporation’s relationship with Central’s Commercial Lending Department. Duff, the Litner Trust officer, was informed by Gaffigan that Curtis was a “good customer” of the bank and had been since 1968. On or about March 15, 1972, Central, acting as Trustee of the Litner Trust, and Curtis entered into a new repayment agreement and canceled the Curtis notes then held by the Trustee. The new repayment agreement provided for a five-year $255,780 unsecured note bearing an increased interest rate of seven and one-half percent. As a concession to Curtis, the monthly payments on the note were initially set at $2,000 per month and were to be increased during the term of the note.
On August 18,1972, Central, again acting as Curtis’ commercial lender, and Curtis Electro entered into an additional commercial loan agreement whereby, in contrast to the earlier agreements, each of the Curtis subsidiaries gave notes to Central for the entire amount then owed by Curtis, $1,900,-000, and the bank obtained a security interest in the equipment of the subsidiaries. To further protect themselves as Curtis’ banker, Central obtained a security interest in one hundred percent (100%) of the stock of the Curtis subsidiaries.
Late in June of 1973, Mr. Duff discovered that Curtis was in default on the March 15, 1972 promissory note. On several occasions Mr. Duff contacted Curtis regarding the default and Mr. William Robinson, Curtis’ Chief Financial Officer, informed Duff that the company was in a “very deep cash crisis” and would be unable to make the regular monthly payments on the Trust’s note. Two months later, in August of 1973, Duff received two checks from Curtis making the interest payments current on the note’s then outstanding principal balance.
As Central was aware of Curtis’ continuing severe financial problems, it now saw fit to protect itself as commercial banker by acquiring and perfecting security interests in additional collateral in conjunction with a September, 1973 business loan to one of Curtis’ subsidiaries. Although this loan was repaid shortly thereafter, the additional collateral was retained and continued to secure loans Central had previously made to Curtis.
During December of 1973, Bruce Duff and members of the Special Assets Committee of Central’s Trust Department discussed the advisability of retaining an attorney to initiate collection of the Curtis promissory note. Toward the end of that month, Mr. Duff contacted Attorney Fink (Philip’s lawyer) and discussed with him the problems the Trust was having obtaining payment of the promissory note from Curtis.
The next month, on January 7,1974, Duff informed Curtis that the Trust was considering retaining an attorney to commence litigation to collect the Curtis debt. Curtis management informed Duff that if a lawsuit were filed it would force Curtis into bankruptcy and, furthermore, all of Curtis’ assets had previously been pledged to Central to secure its commercial loans. Based on this information, Duff and Curtis then agreed the Trust would not file suit and Curtis would bring the interest payments up to a current status. Attorney Fink was advised by letter to take no legal action.
Three months later, on April 29, 1974, Curtis filed a Chapter 11 bankruptcy petition for reorganization. After the filing of the petition, Mr. Duff concluded that Central was facing a “potential conflict of interest” dilemma as Trustee, due to the problem existing between Curtis’ secured and unsecured creditors. Mr. Duff informed the Litner family by letter of May 24,1974 that it was the opinion of Central’s top management that independent counsel should now be obtained by the Litner family to seek collection of the note as “vigorously as possible.” Central stated that it did not recommend attempting the appointment of a successor trustee for the Litner Trust in view of the “questionable competency” of Philip Litner.
In the summer of 1974, Jerry Litner informed Bruce Duff that it was the opinion of the Litner family that Central should absorb any loss inuring to the Trust as a result of Curtis’ insolvency. Mr. Duff replied that Central had not acted improperly and had only relied on his (Jerry Litner’s) advice. In early August 1974, the Litner family contemplated filing an action on behalf of Philip Litner against Central as Trustee of the Litner Trust.
Prior to his death on September 5, 1976, Philip Litner revoked the Trust and ordered the Trust assets transferred to Jefferson National Bank of Miami (“Jefferson National”), the plaintiff-appellee herein. On May 1, 1978, Jefferson National, as Personal Representative of the Estate of Philip Litner, instituted the instant action and alleged, as noted above, that Central had breached the fiduciary relationship owed to Philip Litner while it acted as Trustee of the Litner Trust and sought recovery of actual and punitive damages. As referred to above, Central subsequently answered and filed a third-party complaint against Jerry Litner for reimbursement of any damages that might be recovered by Jefferson National. After a lengthy jury trial, judgment was entered in favor of Jefferson National in the amount of $394,475.40. The jury further determined there was no liability on the part of Jerry Litner and the trial court entered judgment accordingly. This appeal followed.
ISSUES
Issue 1: Did the district court commit error in determining that Jefferson National’s action was of a legal nature and properly triable to a jury?
Issue 2: Did the district court commit error in determining that Jefferson National’s action was not barred by the doctrine of laches or the applicable statute of limitations?
Issue 3: Did the district court improperly instruct the jury as to the standard of care expected of Central while acting as Trustee of the Philip Litner Trust? Issue 4: Did the district court improperly instruct the jury on the issue of the proper measure of damages recoverable by Jefferson National?
Issue 5: Did the district court commit error in directing a verdict in favor of third-party defendant Jerry Litner after the jury had found in his favor?
RIGHT TO JURY TRIAL
The complaint of Jefferson National included a request for a trial by jury. Central challenged the request and filed a motion to strike the jury demand based on Central’s contention that the action was inherently and exclusively of an equitable nature and properly tried to a court. Chief Judge McGarr determined that since the Personal Representative was seeking immediate and unconditional payment of damages, they (Jefferson National) were entitled to maintain an action at law against the Trustee. We agree with Jefferson National and hold that Central’s motion to strike the jury demand was properly denied by the trial court.
The right to a jury trial in federal diversity.actions is to be determined as a matter of federal law. Simler v. Conner, 372 U.S. 221, 222, 83 S.Ct. 609, 610, 9 L.Ed.2d 691 (1963). The United States Constitution, Article III, Section 2, provides: “The judicial Power shall extend to all Cases, in Law and Equity.” The constitutional basis for the right to a jury trial is set forth in the Seventh Amendment:
“In Suits at common law, where the value in controversy shall exceed twenty-dollars, the right of trial by jury shall be preserved.”
The Federal Rules of Civil Procedure safeguard the constitutional right to a jury trial of legal issues. Fed.R.Civ.P. 38 and 39.
The merger of the federal courts of law and equity has caused some uncertainty in the determination of jury trial rights. In Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970), the Supreme Court outlined a test to be used to define the scope of Seventh Amendment rights. The Ross Court identified three criteria that should be considered in determining the “legal” nature of an action: (1) the historical characterization of the claim; (2) the remedy sought; and, (3) the practical abilities and limitations of juries. Indeed, not only did the Court identify the second and third criteria; it also implied, without expressly stating, that history may be a less reliable guide than the other two. See Rogers v. Loether, 467 F.2d 1110, 1118 (7th Cir.1972), aff’d sub nom., Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974).
Traditionally, the remedies of the beneficiary of a trust against the trustee have been almost exclusively within the jurisdiction of equity. Restatement (Second) of Trusts § 197 (1959). However, we hold there are limited instances in which the beneficiary may maintain an action at law against the trustee as in the instant case. Restatement (Second) of Trusts § 198(1) (1959) reads in pertinent part:
“If a trustee is under a duty to pay money immediately to the beneficiary, the beneficiary can maintain an action at law against the trustee to enforce payment.”
Comment (d) to Section 198 is relevant to our determination of whether the district court properly concluded that Jefferson National’s complaint was subject to jury consideration. This comment states:
“If the trustee misappropriates money which it is his duty to continue to hold in trust, the beneficiary, not being entitled to immediate payment, cannot maintain an action at law against the trustee. His remedy is a suit in equity to compel the trustee to restore the money misappropriated and to hold it in trust or to pay it to a new trustee. If, however, the trustee is first removed and a new trustee is appointed, the new trustee can maintain an action at law against him to recover the amount misappropriated, since he is under a duty to pay the money immediately and unconditionally to the new trustee.”
(emphasis added).
Analogously, we believe the instant action is of the type that a beneficiary may maintain at law against a trustee. This is not a suit in equity to compel the trustee to redress a breach of trust by placing a certain amount of money back into the trust corpus but rather a suit for immediate payment on an indebtedness arising out of a breach of trust.
In his memorandum opinion denying Central’s motion, Judge McGarr cited the Dixon v. Northwestern National Bank, 297 F.Supp. 485 (D.Minn.1969), decision extensively. In particular, the district court found the following analysis to be persuasive:
“It also may be said in this case that there exists an adequate remedy at law. A jury hearing all the evidence may or may not as the case may be return a monetary judgment in favor of the plaintiffs. If plaintiffs are successful, the trustee is under a duty to pay the beneficiaries immediately and unconditionally. This case is thus distinguishable from the more normal situation where the beneficiaries are suing in equity to compel the trustee to redress a breach of trust by refunding to the trust estate and where there is no right to a jury trial. In the latter situation, a jury cannot award monetary relief, or any other relief, because the trustee is under no obligation to make immediate payment. Rather equitable relief compelling the trustee to restore the corpus must be decreed. However, once the beneficiaries have a vested right to payment or when the trustee is obligated under the terms of the trust to make a distribution to the beneficiaries, then the beneficiaries are entitled to immediate payment and may maintain an action of law against the trustee. In close cases where there is a doubt, it is the court’s reading of the teachings in Dairy Queen, Inc. [v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962)], supra, and other cases that the court should favor of the granting of a jury trial to insure constitutional rights.”
Id. at 489.
The issue in this case does not involve the administration of an existing and continuing trust. Philip Litner Trust No. 1 was validly revoked in July of 1975 and Central was obligated at that time to deliver all of the Trust assets to Jefferson National. Jefferson National seeks recovery on behalf of Philip Litner’s estate of an indebtedness that arose as a result of Central’s actions while acting as Trustee of the Litner Trust. In its complaint, Jefferson National contended that Central is presently and unconditionally obligated to pay the Personal Representative a determinable sum of money to which the beneficiaries under the will of Philip Litner are immediately entitled. We agree with the trial court that these issues were properly triable before the jury as Jefferson’s claim was an action at law. The controlling issues herein — whether Central was guilty of wrongful conduct by breaching the trust reposed in it by Philip Litner, whether such conduct was the proximate cause of injury to Philip Litner, and the amount of the injury — are issues which are properly within the province of a jury to determine.
The second part of the Ross test requires an inquiry into the nature of the remedy sought to ascertain whether a plaintiff seeks legal or equitable relief. The remedy sought by Jefferson National, in essence, is the immediate payment of money damages to the estate of a beneficiary of a previously revoked trust. The court is not called upon to invoke powers of an equitable nature such as demanding an accounting, enjoining future action or maintaining jurisdiction to supervise the future administration of the trust for the Trust was legally.revoked in July of 1975.
Consideration of the practical limitations of a jury trial, required by the third part of the Ross test, does not preclude a jury trial in this case. As noted above, the issues considered by the jury are of a type commonly delegated to a jury for determination. The “practical abilities and limitations of juries” present no obstacle to the determination of the issues presented in a breach of duty case such as this. The issues considered by the jury in this case involved the. standard of care expected of a trustee, whether it was breached by Central and what, if any, damages were suffered by the Estate of Philip Litner.
Under the three prong test of Ross, both the character of the issues involved and the relief sought compel this court to conclude that Jefferson National was entitled to a trial by jury. Additionally, there is a clear federal policy in light of the Seventh Amendment favoring jury trials and in doubtful cases jury trials should be favored. 9 C. Wright & A. Miller, Federal Practice and Procedure § 2302 at 21 (1971).
TIMELINESS OF ACTION
Central maintains the claim brought on behalf of the Estate of Philip Litner by Jefferson National was time-barred either under the equitable doctrine of laches or the applicable Illinois statute of limitations. As we have previously discussed, Jefferson National’s claim is of a legal nature and not an action in equity, thus, Central cannot invoke the defense of laches. In re O’Donnell’s Estate, 8 Ill. App.2d 348, 132 N.E.2d 74, 77 (1956). As Central did not clearly repudiate its trusteeship of the Philip Litner Trust until early 1974, the claim was not barred by the Illinois Limitations Act.
The rule in Illinois with respect to the statute of limitations and express trusts was clearly stated in Kay v. Village of Mundelein, 36 Ill.App.3d 433, 344 N.E.2d 29, 33 (1975), as follows:
“[Djuring performance of the express trust there is no cause of action for breach and so the statute of limitations has no bearing on the rights of the beneficiary; but if the trustee violates the trust and the beneficiary knows of such conduct, or could have learned of it by the use of reasonable diligence, the court will apply the statute of limitations. To cause the statute to begin running during the life of the trust there must be some act of repudiation of the trust by the trustee... He must in some way notify the beneficiary of his treachery. Concealed repudiation does not count.”
(citations omitted).
Central seeks to use Ill.Rev.Stat. ch. 83, § 16, as a shield by asserting that Jefferson National’s lawsuit was filed more than five years after the occurrence of numerous instances of alleged wrongful conduct. Central correctly points out that some of the challenged actions, including acceptance of the two replacement notes (renegotiated while Curtis was in financial difficulty) and the securing of Central’s commercial loans, occurred prior to 1973. However, in a case such as this where Central’s activities were unknown to the beneficiary of the Trust, Philip Litner, and he was not aware of facts which would reasonably put him on notice of Central’s direct conflict of interest, to now allow Central to hide behind the statute of limitations would reward it for the secrecy of its unfaithfulness.
It is significant that Bruce Duff, Central’s trust officer handling the Litner Trust, was not aware of Central’s secured status as Curtis’ commercial lender until early 1974. After discovering the conflict of interest of Central as secured commercial lender of Curtis and also as an unsecured Trustee creditor of Curtis, Duff promptly and properly informed the Litner family of the bank’s unfaithfulness, conflict of interest and lack of ability to vigorously pursue the collection of the Trust’s note. We agree with Judge McGarr’s finding that “the full awareness of the rights of [Philip Litner] came to [the Litner family], at the earliest, some time in early or mid-1974.” T.R. 2608. As a matter of law, Philip Litner or the representative of his estate had at least five years from this date, the date of Central’s repudiation, within which to file suit.
Until Central repudiated the trust placed in it in 1974, Philip Litner had a right to rely upon the integrity and faithfulness of his trustee. See Reynolds v. Sumner, 126 Ill. 58,18 N.E. 334, 337 (1888). Until it was brought to the attention of the beneficiary, Philip Litner, that Central’s fiduciary duty of trust had been breached, he could safely continue to rely on that duty without forfeiting his rights under the law. We know of no affirmative duty placed upon the beneficiary of a trust to actively investigate or oversee the conduct of his trustee.
STANDARD OF CONDUCT
By statute, Illinois has outlined a so-called “Prudent Person Standard” against which the activities of trustees are generally measured. Trustees are expected to exercise the judgment and care which persons of prudence, discretion and intelligence would exercise in the management of their own personal affairs and under the circumstances then prevailing. Based on the voluminous record in this case, it is clear to this court that the jury had ample evidence to hold that Central failed to properly discharge its fiduciary obligations during its tenure as Trustee of the Philip Litner Trust.
Trustees are held to a high standard of conduct and must exercise the highest degree of fidelity and the utmost good faith in the administration of the trust. The trustee’s primary responsibility is. to the beneficiary. Especially where their individual interests are concerned, trustees’ actions are governed by rules which exact of them the utmost good faith, honesty, integrity, faithfulness and fair dealing. The interests of the beneficiary must at all times remain paramount to the personal interests of the trustee. See In Re Hartzell’s Will, 43 Ill. App.2d 118,192 N.E.2d 697, 706 (1963). See also Scott, Trustee’s Duty of Loyalty, 49 Harv.L.Rev. 521 (1936).
The language of Central’s trust agreement with Philip Litner provided that the Trustee would have discretionary powers which were to be exercised “in the best interests of the beneficiaries.” Central maintains that this provision of the trust agreement dictates some lesser standard of conduct than that normally required of a trustee and that the district court committed error in instructing the jury to judge Central’s conduct against the “Prudent Person Standard.” To substantiate this proposition, Central cites this court’s opinion in Childs v. National Bank of Austin, 658 F.2d 487 (7th Cir.1982). We disagree with the Trustee’s position and fail to recognize how Childs in any way modifies or diminishes the fiduciary duty Central National Bank owed to Philip Litner.
In Childs this court stated:
“Under Illinois law, discretionary decisions by trustees are not to be overturned in the absence of extenuating circumstances such as bad faith, fraud or an abuse of discretion.”
Id. at 494. The court also noted that “unquestionably, trustees are obligated to act with the highest degree of fidelity and utmost good faith toward the beneficiaries.” Id. Failure to exercise absolute fidelity to the interests of the beneficiary by the trustee constitutes an abuse of discretion.
It is clear that Central, as Trustee of the Litner Trust, did not discharge its fiduciary duties as prudent individuals would manage their own affairs. On the other hand, Central, where its own dollars were involved as commercial banker of Curtis, did exactly what an astute investor holding an unsecured note of Curtis would do to protect their individual interest faced with the corporation’s dismal financial situation. That prudent and intelligent individual would collateralize the debt just as Central did with their own commercial loan. If subsequently that collateral appeared to be insufficient, the self-interested creditor would demand additional security. This is the course of conduct Central followed in order to safeguard its financial interests vis-a-vis Curtis Electro Corporation. After Central had protected its own interests securing its commercial loans with all of the available assets of Curtis, Central (as Trustee) finally turned its attention to the best interest of the cestui que trust.
In its dealings with Curtis it is clear that Central at all times subordinated the interest of Philip Litner, the beneficiary, to that of its own commercial banking division. By the time Central clearly and unequivocally demonstrated to Eli Fink (Philip Litner’s legal counsel) the need to take action to protect the Trust’s interests regarding the Curtis notes, the hour was too late for the bank as Trustee to, at last, attempt to properly protect the beneficiary. We agree with the jury and affirm their verdict that Central is liable to the Estate of Philip Litner for the damages proximately caused by its significant breach of his trust.
DAMAGES
Central contends that Judge McGarr improperly instructed the jury regarding two aspects of the damage issue: (A) the burden of proving the amount of damages proximately caused by Central’s breach of trust; and (B) the imposition of pre-judgment interest.
A.
Central maintains that the trial court’s jury instruction regarding the burden of proof of damages was erroneous and requires this court to reverse the judgment in favor of Jefferson National. The instruction complained of recited:
“Plaintiff has the burden of proof on the issues of damages except that Central National Bank has the burden of proving that any part of the loss would have been incurred even if there had been no breach of trust.”
Relying on Elmhurst National Bank v. Glos, 99 Ill.App.2d 74, 241 N.E.2d 121, 124 (1968), Central correctly contends that it is “fundamental that the burden of proof rests upon the one who claims that a trustee had imprudently retained or invested trust funds, for a trustee is presumed to have acted in good faith and to have performed his duties under the trust.” Additionally, Central argues that:
“Evidence which merely shows, a decrease in value of the trust property, without showing that the trustee wrongfully caused the shrinkage, does not make a case.”
G. Bogert & G. Bogert, The Law of Trusts and Trustees, § 871 (2d ed. 1982).
We agree with Central that the burden of proof was on Jefferson National to show that Central wrongfully caused the loss to the Trust but find Central’s objection to Judge McGarr’s jury instruction to be without merit. The judge correctly instructed the jury as to the plaintiff’s burden of proof and a review of the record establishes without doubt that Jefferson National has met that burden. There is more than substantial and overwhelming evidence in the record to support Jefferson National’s allegations that Central’s conflict of interest, manifesting itself in the Trustee’s failure to secure the payment of the Trust’s promissory note, while encumbering the assets of Curtis as its commercial lender, was a proximate cause of the financial loss suffered by Philip Litner due to the unenforceability of the promissory note. A “proximate cause” need not be the only cause or the last or nearest cause of a loss. I.P.I.2d § 15.01 (1971).
The record clearly demonstrates that Central imprudently and improperly failed to perform its duties as Trustee of the Litner Trust. The wealth of such evidence easily overcomes any presumption that might have existed that Central had properly performed its duties while acting as the Trustee of the Philip Litner Trust. Central’s actions in this case are replete with examples of the causal connection between Central’s conflicting roles as Trustee and commercial lender and the unenforceability of the Curtis note. There is no doubt that at the time Curtis filed its bankruptcy petition the promissory note was virtually uncollectible.
We agree with the trial judge that once Jefferson National clearly demonstrated the breach of Central’s duty and the resultant damage, the burden of proof switched to Central to prove in its defense that throughout the period of time involved the note was uncollectible or “worthless” through no fault of their own. The burden was on Central to prove that any attempt by the bank to collect or secure the Curtis’ note during the time it was concurrently acting as Central’s commercial lender would have been fruitless. See Estate of Stetson, 463 Pa. 64
Question: What is the total number of appellants in the case that fall into the category "natural persons"? Answer with a number.
Answer:
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sc_decisiondirection
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A
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What follows is an opinion from the Supreme Court of the United States. Your task is to determine the ideological "direction" of the decision ("liberal", "conservative", or "unspecifiable"). Use "unspecifiable" if the issue does not lend itself to a liberal or conservative description (e.g., a boundary dispute between two states, real property, wills and estates), or because no convention exists as to which is the liberal side and which is the conservative side (e.g., the legislative veto). Specification of the ideological direction comports with conventional usage. In the context of issues pertaining to criminal procedure, civil rights, First Amendment, due process, privacy, and attorneys, consider liberal to be pro-person accused or convicted of crime, or denied a jury trial, pro-civil liberties or civil rights claimant, especially those exercising less protected civil rights (e.g., homosexuality), pro-child or juvenile, pro-indigent pro-Indian, pro-affirmative action, pro-neutrality in establishment clause cases, pro-female in abortion, pro-underdog, anti-slavery, incorporation of foreign territories anti-government in the context of due process, except for takings clause cases where a pro-government, anti-owner vote is considered liberal except in criminal forfeiture cases or those where the taking is pro-business violation of due process by exercising jurisdiction over nonresident, pro-attorney or governmental official in non-liability cases, pro-accountability and/or anti-corruption in campaign spending pro-privacy vis-a-vis the 1st Amendment where the privacy invaded is that of mental incompetents, pro-disclosure in Freedom of Information Act issues except for employment and student records. In the context of issues pertaining to unions and economic activity, consider liberal to be pro-union except in union antitrust where liberal = pro-competition, pro-government, anti-business anti-employer, pro-competition, pro-injured person, pro-indigent, pro-small business vis-a-vis large business pro-state/anti-business in state tax cases, pro-debtor, pro-bankrupt, pro-Indian, pro-environmental protection, pro-economic underdog pro-consumer, pro-accountability in governmental corruption, pro-original grantee, purchaser, or occupant in state and territorial land claims anti-union member or employee vis-a-vis union, anti-union in union antitrust, anti-union in union or closed shop, pro-trial in arbitration. In the context of issues pertaining to judicial power, consider liberal to be pro-exercise of judicial power, pro-judicial "activism", pro-judicial review of administrative action. In the context of issues pertaining to federalism, consider liberal to be pro-federal power, pro-executive power in executive/congressional disputes, anti-state. In the context of issues pertaining to federal taxation, consider liberal to be pro-United States and conservative pro-taxpayer. In miscellaneous, consider conservative the incorporation of foreign territories and executive authority vis-a-vis congress or the states or judcial authority vis-a-vis state or federal legislative authority, and consider liberal legislative veto. In interstate relations and private law issues, consider unspecifiable in all cases.
UNITED STATES v. WHITE
No. 13.
Argued November 10, 1969
Reargued October 20, 1970
Decided April 5, 1971
White, J., announced the Court’s judgment, and delivered an opinion in which Burger, C. J., and Stewart and Blackmun, JJ., joined. Black, J., filed a statement concurring in the judgment, post, p. 754. BreNNAN, J., filed an opinion concurring in the result, post, p. 755. Douglas, J., post, p. 756, HarlaN, J., post, p. 768, and Marshall, J., post, p. 795, filed dissenting opinions.
Assistant Attorney General Wilson reargued the cause for the United States. With him on the briefs were Solicitor General Griswold, Joseph J. Connolly, John S. Martin, Jr., Jerome M. Feit, Beatrice Rosenberg, and Sidney M. Glaser.
John L. Boeger reargued the cause for respondent. With him on the brief were Morris A. Shenker and Chauncey Eskridge.
Abraham Glosser and Maurice Edelbaum filed a brief for John G. Broady et al. as amici curiae urging affirmance.
Mr. Justice White
announced the judgment of the Court and an opinion in which The Chief Justice, Mr. Justice Stewart, and Mr. Justice Blackmun join.
In 1966, respondent James A. White was tried and convicted under two consolidated indictments charging various illegal transactions in narcotics violative of 26 U. S. C. § 4705 (a) and 21 U. S. C. § 174. He was fined and sentenced as a second offender to 25-year concurrent sentences. The issue before us is whether the Fourth Amendment bars from evidence the testimony of governmental agents who related certain conversations which had occurred between defendant White and a government informant, Harvey Jackson, and which the agents overheard by monitoring the frequency of a radio transmitter carried by Jackson and concealed on his person. On four occasions the conversations took place in Jackson’s home; each of these conversations was overheard by an agent concealed in a kitchen closet with Jackson’s consent and by a second agent outside the house using a radio receiver. Four other conversations — one in respondent’s home, one in a restaurant, and two in Jackson’s car — were overheard by the use of radio equipment. The prosecution was unable to locate and produce Jackson at the trial and the trial court overruled objections to the testimony of the agents who conducted the electronic surveillance. The jury returned a guilty verdict and defendant appealed.
The Court of Appeals read Katz v. United States, 389 U. S. 347 (1967), as overruling On Lee v. United States, 343 U. S. 747 (1952), and interpreting the Fourth Amendment to forbid the introduction of the agents’ testimony in the circumstances of this case. Accordingly, the court reversed but without adverting to the fact that the transactions at issue here had occurred before Katz was decided in this Court. In our view, the Court of Appeals misinterpreted both the Katz case and the Fourth Amendment and in any event erred in applying the Katz case to events that occurred before that decision was rendered by this Court.
I
Until Katz v. United States, neither wiretapping nor electronic eavesdropping violated a defendant's Fourth Amendment rights “unless there has been an official search and seizure of his person, or such a seizure of his papers or his tangible material effects, or an actual physical invasion of his house 'or curtilage’ for the purpose of making a seizure.” Olmstead v. United States, 277 U. S. 438, 466 (1928); Goldman v. United States, 316 U. S. 129, 135-136 (1942). But where “eavesdropping was accomplished by means of an unauthorized physical penetration into the premises occupied” by the defendant, although falling short of a “technical trespass under the local property law,” the Fourth Amendment was violated and any evidence of what was seen and heard, as well as tangible objects seized, was considered the inadmissible fruit of an unlawful invasion. Silverman v. United States, 365 U. S. 505, 509, 511 (1961); see also Wong Sun v. United States, 371 U. S. 471 (1963); Berger v. New York, 388 U. S. 41, 52 (1967); Alderman v. United States, 394 U. S. 165, 177-178 (1969).
Katz v. United States, however, finally swept away doctrines that electronic eavesdropping is permissible under the Fourth Amendment unless physical invasion of a constitutionally protected area produced the challenged evidence. In that case government agents, without petitioner’s consent or knowledge, attached a listening device to the outside of a public telephone booth and recorded the defendant’s end of his telephone conversations. In declaring the recordings inadmissible in evidence in the absence of a warrant authorizing the surveillance, the Court overruled Olmstead and Goldman and held that the absence of physical intrusion into the telephone booth did not-justify using electronic devices in listening to and recording Katz’ words, thereby violating the privacy on which he justifiably relied while using the telephone in those circumstances.
The Court of Appeals understood Katz to render inadmissible against White the agents’ testimony concerning conversations that Jackson broadcast to them. We cannot agree. Katz involved no revelation to the Government by a party to conversations with the defendant nor did the Court indicate in any way that a defendant has a justifiable and constitutionally protected expectation that a person with whom he is conversing will not then or later reveal the conversation to the police.
Hoffa v. United States, 385 U. S. 293 (1966), which was left undisturbed by Katz, held that however strongly a defendant may trust an apparent colleague, his expectations in this respect are not protected by the Fourth Amendment when it turns out that the colleague is a government agent regularly communicating with the authorities. In these circumstances, “no interest legitimately protected by the Fourth Amendment is involved,” for that amendment affords no protection to “a wrongdoer’s misplaced belief that a person to whom he voluntarily confides his wrongdoing will not reveal it.” Hoffa v. United States, at 302. No warrant to “search and seize” is required in such circumstances, nor is it when the Government sends to defendant’s home a secret agent who conceals his identity and makes a purchase of narcotics from the accused, Lewis v. United States, 385 U. S. 206 (1966), or when the same agent, unbeknown to the defendant, carries electronic equipment to record the defendant’s words and the evidence so gathered is later offered in evidence. Lopez v. United States, 373 U. S. 427 (1963).
Conceding that Hoffa, Lewis, and Lopez remained unaffected by Katz, the Court of Appeals nevertheless read both Katz and the Fourth Amendment to require a different result if the agent not only records his conversations with the defendant but instantaneously transmits them electronically to other agents equipped with radio receivers. Where this occurs, the Court of Appeals held, the Fourth Amendment is violated and the testimony of the listening agents must be excluded from evidence.
To reach this result it was necessary for the Court of Appeals to hold that On Lee v. United States was no longer good law. In that case, which involved facts very similar to the case before us, the Court first rejected claims of a Fourth Amendment violation because the informer had not trespassed when he entered the defendant's premises and conversed with him. To this extent the Court’s rationale cannot survive Katz. See 389 U. S., at 352-353. But the Court announced a second and independent ground for its decision; for it went on to say that overruling Olmstead and Goldman would be of no aid to On Lee since he “was talking confidentially and indiscreetly with one he trusted, and he was overheard. ... It would be a dubious service to the genuine liberties protected by the Fourth Amendment to make them bedfellows with spurious liberties improvised by farfetched analogies which would liken eavesdropping on a conversation, with the connivance of one of the parties, to an unreasonable search or seizure. We find no violation of the Fourth Amendment here.” 343 U. S., at 753-754. We see no indication in Katz that the Court meant to disturb that understanding of the Fourth Amendment or to disturb the result reached in the On Lee case, nor are we now inclined to overturn this view of the Fourth Amendment.
Concededly a police agent who conceals his police connections may write down for official use his conversations with a defendant and testify concerning them, without a warrant authorizing his encounters with the defendant and without otherwise violating the latter’s Fourth Amendment rights. Hoffa v. United States, 385 U. S., at 300-303. For constitutional purposes, no' different result is required if the agent instead of immediately reporting and transcribing his conversations with defendant, either (1) simultaneously records them with electronic equipment which he is carrying on his person, Lopez v. United States, supra; (2) or carries radio equipment which simultaneously transmits the conversations either to recording equipment located elsewhere or to other agents monitoring the transmitting frequency. On Lee v. United States, supra. If the conduct and revelations of an agent operating without electronic equipment do not invade the defendant’s constitutionally justifiable expectations of privacy, neither does a simultaneous recording of the same conversations made by the agent or by others from transmissions received from the agent to whom the defendant is talking and whose trustworthiness the defendant necessarily risks.
Our problem is not what the privacy expectations of particular defendants in particular situations may be or the extent to which they may in fact have relied on the discretion of their companions. Very probably, individual defendants neither know nor suspect that their colleagues have gone or will go to the police or are carrying recorders or transmitters. Otherwise, conversation would cease and our problem with these encounters would be nonexistent or far different from those now before us. Our problem, in terms of the principles announced in Katz, is what expectations of privacy are constitutionally “justifiable”' — what expectations the Fourth Amendment will protect in the absence of a warrant. So far, the law permits the frustration of actual expectations of privacy by permitting authorities to use the testimony of those associates who for one reason or another have determined to turn to the police, as well as by authorizing the use of informants in the manner exemplified by Hoff a and Lewis. If the law gives no protection to the wrongdoer whose trusted accomplice is or becomes a police agent, neither should it protect him when that same agent has recorded or transmitted the conversations which are later offered in evidence to prove the State’s case. See Lopez v. United States, 373 U. S. 427 (1963).
Inescapably, one contemplating illegal activities must realize and risk that his companions may be reporting to the police. If he sufficiently doubts their trustworthiness, the association will very probably end or never materialize. But if he has no doubts, or allays them, or risks what doubt he has, the risk is his. In terms of what his course will be, what he will or will not do or say, we are unpersuaded that he would distinguish between probable informers on the one hand and probable informers with transmitters on the other. Given the possibility or probability that one of his colleagues is cooperating with the police, it is only speculation to assert that the defendant’s utterances would be substantially different or his sense of security any less if he also thought it possible that the suspected colleague is wired for sound. At least there is no persuasive evidence that the difference in this respect between the electronically equipped and the unequipped agent is substantial enough to require discrete constitutional recog-ration, particularly under the Fourth Amendment which is ruled by fluid concepts of “reasonableness.”
Nor should we be too ready to erect constitutional barriers to relevant and probative evidence which is also accurate and reliable. An electronic recording will many times produce a more reliable rendition of what a defendant has said than will the unaided memory of a police agent. It may also be that with the recording in existence it is less likely that the informant will change his mind, less chance that threat or injury will suppress unfavorable evidence and less chance that cross-examination will confound the testimony. Considerations like these obviously do not favor the defendant, but we are not prepared to hold that a defendant who has no constitutional right to exclude the informer’s unaided testimony nevertheless has a Fourth Amendment privilege against a more accurate version of the events in question.
It is thus untenable to consider the activities and reports of the police agent himself, though acting without a warrant, to be a “reasonable” investigative effort and lawful under the Fourth Amendment but to view the same agent with a recorder or transmitter as conducting an “unreasonable” and unconstitutional search and seizure. Our opinion is currently shared by Congress and the Executive Branch, Title III, Omnibus Crime Control and Safe Streets Act of 1968, 82 Stat. 212, 18 U. S. C. §2510 et seq. (1964 ed., Supp. V), and the American Bar Association. Project on Standards for Criminal Justice, Electronic Surveillance § 4.1 (Approved Draft 1971). It is also the result reached by prior cases in this Court. On Lee, supra; Lopez v. United States, supra.
No different result should obtain where, as in On Lee and the instant case, the informer disappears and is unavailable at trial; for the issue of whether specified events on a certain day violate the Fourth Amendment should not be determined by what later happens to the informer. His unavailability at trial and proffering the testimony of other agents may raise evidentiary problems or pose issues of prosecutorial misconduct with respect to the informer’s disappearance, but they do not appear critical to deciding whether prior events invaded the defendant’s Fourth Amendment rights.
II
The Court of Appeals was in error for another reason. In Desist v. United States, 394 U. S. 244 (1969), we held that our decision in Katz v. United States applied only to those electronic surveillances that occurred subsequent to the date of that decision. Here the events in question took place in late 1965 and early 1966, long prior to Katz. We adhere to the rationale of Desist, see Williams v. United States, ante, p. 646. It was error for the Court of Appeals to dispose of this case based on its understanding of the principles announced in the Katz case. The court should have judged this case by the pr e-Katz law and under that law, as On Lee clearly holds, the electronic surveillance here involved did not violate White’s rights to be free from unreasonable searches and seizures.
The judgment of the Court of Appeals is reversed.
It is so ordered.
Mr. Justice Black, while adhering to his views expressed in Linkletter v. Walker, 381 U. S. 618, 640 (1965), concurs in the judgment of the Court for the reasons set forth in his dissent in Katz v. United States, 389 U. S. 347, 364 (1967).
White argues that Jackson, though admittedly “cognizant” of the presence of transmitting devices on his person, did not voluntarily consent thereto. Because the court below did not reach the issue of Jackson’s consent, we decline to do so. Similarly, we do not consider White’s claim that the Government’s actions violated state law.
A panel of three judges on March 18, 1968, reversed the conviction, one judge dissenting. A rehearing en banc was granted, and on January 7, 1969, the full court followed the panel’s decision, three judges dissenting. 405 F. 2d 838.
It follows from our opinion that we reject respondent’s contentions that Lopez should be overruled.
Other courts of appeals have considered On Lee viable despite Katz. Dancy v. United States, 390 F. 2d 370 (CA5 1968); Long v. United States, 387 F. 2d 377 (CA5 1967); Koran v. United States, 408 F. 2d 1321 (CA5 1969). See also United States v. Kaufer, 406 F. 2d 550 (CA2), aff’d per curiam, 394 U. S. 458 (1969); United States v. Jackson, 390 F. 2d 317 (CA2 1968); Doty v. United States, 416 F. 2d 887 (CA10 1968), id., at 893 (rehearing 1969).
Question: What is the ideological direction of the decision?
A. Conservative
B. Liberal
C. Unspecifiable
Answer:
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What follows is an opinion from the Supreme Court of the United States. Your task is to identify the court whose decision the Supreme Court reviewed. If the case arose under the Supreme Court's original jurisdiction, note the source as "United States Supreme Court". If the case arose in a state court, note the source as "State Supreme Court", "State Appellate Court", or "State Trial Court". Do not code the name of the state.
UNITED STATES v. NAVAJO NATION
No. 07-1410.
Argued February 23, 2009
Decided April 6, 2009
Then-Acting Solicitor General Kneedler argued the cause for the United States. With him on the briefs were former Solicitor General Garre, Assistant Attorney General Tencas, Anthony A. Yang, and Elizabeth A. Peterson.
Carter G. Phillips argued the cause for respondent. With him on the brief were Virginia A. Seitz, Robert A. Parker, Paul E. Frye, Lisa M. Enfield, and Louis Denetsosie
A brief of amici curiae urging reversal was filed for Peabody Western Coal Co. et al. by Charles G. Cole, Antonia B. lanniello, Shannen W. Coffin, Paul R. Hurst, G. Michael Halfenger, and Lawrence G. McBride.
Briefs of amici curiae urging affirmance were filed for the State of New Mexico et al. by Gary King, Attorney General of New Mexico, and David Thomson, Deputy Attorney General, and by the Attorneys General for their respective States as follows: Terry Goddard of Arizona and Mark Shurtleff of Utah; for Law Professors by Richard B. Collins and Carole E. Goldberg, both pro se; for the National Congress of American Indians et al. by Reid Peyton Chambers, Douglas B. L. Endreson, William R. Perry, and John T. Harrison; and for former Secretary of the Interior Cecil D. Andrus et al. by Kathleen M. Sullivan, Daniel H. Bromberg, and Margret M. Caruso.
Justice Scalia
delivered the opinion of the Court.
For over 15 years, the Indian Tribe known as the Navajo Nation has been pursuing a claim for money damages against the Federal Government based on an asserted breach of trust by the Secretary of the Interior in connection with his approval of amendments to a coal lease executed by the Tribe. The original lease took effect in 1964. The amendments were approved in 1987. The litigation was initiated in 1993. Six years ago, we held that “the Tribe’s claim for compensation... fails,” United States v. Navajo Nation, 537 U. S. 488, 493 (2003) (Navajo I), but after further proceedings on remand the United States Court of Appeals for the Federal Circuit resuscitated it. 501 F. 3d 1327 (2007). Today we hold, once again, that the Tribe’s claim for compensation fails. This matter should now be regarded as closed.
I. Legal Background
The Federal Government cannot be sued without its consent. FDIC v. Meyer, 510 U. S. 471, 475 (1994). Limited consent has been granted through a variety of statutes, including one colloquially referred to as the Indian Tucker Act:
“The United States Court of Federal Claims shall have jurisdiction of any claim against the United States accruing after August 13, 1946, in favor of any tribe... whenever such claim is one arising under the Constitution, laws or treaties of the United States, or Executive orders of the President, or is one which otherwise would be cognizable in the Court of Federal Claims if the claimant were not an Indian tribe, band or group.” 28 U. S. C. § 1505.
The last clause refers to the (ordinary) Tucker Act, which waives immunity with respect to any claim “founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” § 1491(a)(1).
Neither the Tucker Act nor the Indian Tucker Act creates substantive rights; they are simply jurisdictional provisions that operate to waive sovereign immunity for claims premised on other sources of law (e. g., statutes or contracts). United States v. Testan, 424 U. S. 392, 400 (1976); United States v. Mitchell, 445 U. S. 535, 538 (1980) (Mitchell I). The other source of law need not explicitly provide that the right or duty it creates is enforceable through a suit for damages, but it triggers liability only if it “ ‘can fairly be interpreted as mandating compensation by the Federal Government.’” Testan, supra, at 400 (quoting Eastport S. S. Corp. v. United States, 178 Ct. Cl. 599, 607, 372 F. 2d 1002, 1009 (1967)); see also United States v. Mitchell, 463 U. S. 206, 218 (1983) (Mitchell II); Navajo I, 537 U. S., at 503.
As we explained in Navajo I, there are thus two hurdles that must be cleared before a tribe can invoke jurisdiction under the Indian Tucker Act. First, the tribe “must identify a substantive source of law that establishes specific fiduciary or other duties, and allege that the Government has failed faithfully to perform those duties.” Id., at 506. “If that threshold is passed, the court must then determine whether the relevant source of substantive law ‘can fairly be interpreted as mandating compensation for damages sustained as a result of a breach of the duties [the governing law] impose[s].’” Ibid, (alteration in original). At the second stage, principles of trust law might be relevant “in drawing the inference that Congress intended damages to remedy a breach.” United States v. White Mountain Apache Tribe, 537 U. S. 465, 477 (2003).
II. History of the Present Case
A. The Facts
A comprehensive recitation of the facts can be found in Navajo I, supra, at 495-502. By way of executive summary: The Tribe occupies a large Indian reservation in the American Southwest, on which there are significant coal deposits. In 1964 the Secretary of the Interior approved a lease (Lease 8580), executed by the Tribe and the predecessor of Peabody Coal Company, allowing the company to engage in coal mining on a tract of the reservation in exchange for royalty payments to the Tribe. The term of the lease was set at “ten (10) years from the date hereof, and for so long thereafter as the substances produced are being mined by the Lessee in accordance with its terms, in paying quantities,” App. 189; it is still in effect today. The royalty rates were originally set at a maximum of 37.5 cents per ton of coal, but the lease also said that the rates were “subject to reasonable adjustment by the Secretary of the Interior” after 20 years and again “at the end of each successive ten-year period thereafter.” Id., at 194.
The dispute in this case concerns the Tribe’s attempt to secure such an adjustment to the royalty rate after the initial 20-year period elapsed in 1984. At that point, the Tribe requested that the Secretary exercise his power to increase the royalty rate, and the Director of the Bureau of Indian Affairs for the Navajo Area issued an opinion letter imposing a new rate of 20 percent of gross proceeds. Id., at 8-9. But Peabody filed an administrative appeal, and while it was pending the Tribe and the company reached a negotiated agreement to set a rate of 12.5 percent of gross proceeds instead. As a result, the Area Director’s decision was vacated, the administrative appeal was dismissed, and the Secretary approved the amendments to the lease.
B. This Litigation Through Navajo I
The Tribe launched the present lawsuit in 1993, claiming that the Secretary’s actions in connection with the approval of the lease amendments constituted a breach of trust. In particular, the Tribe alleged that the Secretary, following upon improper ex parte contacts with Peabody, had delayed action on Peabody’s administrative appeal in order to pressure the economically desperate Tribe to return to the bargaining table. This, the complaint charged, was in violation of the United States’ fiduciary duty to act in the Indians’ best interests. The Tribe sought $600 million in damages, invoking the Indian Tucker Act to bypass sovereign immunity.
The Court of Federal Claims granted summary judgment to the United States, concluding that “the Navajo Nation has failed to present statutory authority which can be fairly interpreted as mandating compensation for the government’s fiduciary wrongs,” Navajo Nation v. United States, 46 Fed. Cl. 217, 236 (2000), and therefore could not sue under the Indian Tucker Act. The Federal Circuit reversed that ruling and held that the Indian Mineral Leasing Act of 1938 (IMLA), Ch. 198, 52 Stat. 347, 25 U. S. C. §396a et seq., among other statutes, gave the Government broad control over mineral leasing on Indian lands, thus creating a fiduciary duty enforceable through suits for monetary damages. Navajo Nation v. United States, 263 F. 3d 1325, 1330-1332 (2001). Finding that the Government had in fact violated its obligations, the Court of Appeals reinstated the suit.
We granted certiorari, United States v. Navajo Nation, 535 U. S. 1111 (2002), and (as described by the author of the ensuing opinion, concurring in a companion case) considered “the threshold question” presented by the Tribe’s attempt to invoke the Indian Tucker Act: “whether the IMLA and its regulations impose any concrete substantive obligations, fiduciary or otherwise, on the Government,” White Mountain, supra, at 480 (Ginsburg, J., concurring). The answer was an unequivocal no.
The relevant provision of the IMLA provided as follows:
“[U]nallotted lands within any Indian reservation or lands owned by any tribe... may, with the approval of the Secretary of the Interior, be leased for mining purposes, by authority of the tribal council or other authorized spokesmen for such Indians, for terms not to exceed ten years and as long thereafter as minerals are produced in paying quantities.” 25 U. S. C. § 396a.
Another provision of the IMLA authorized the Secretary to promulgate regulations governing operations under such leases, § 396d, but during the relevant period the regulations applicable to coal leases, beyond setting a minimum royalty rate of 10 cents per ton, 25 CFR § 211.15(c) (1985), did not limit the Secretary’s approval authority.
We construed the IMLA in light of its purpose: to “enhance tribal self-determination by giving Tribes, not the Government, the lead role in negotiating mining leases with third parties.” Navajo I, 537 U. S., at 508. Consistent with that goal, the IMLA gave the Secretary not a “comprehensive managerial role,” id., at 507, but only the power to approve coal leases already negotiated by Tribes. That authority did not create, expressly or otherwise, a trust duty with respect to coal leasing and so there existed no enforceable fiduciary obligations that the Tribe could sue the Government for having neglected. Id., at 507-508.
We distinguished Mitchell II, which involved a series of statutes and regulations that gave the Federal Government “full responsibility to manage Indian resources and land for the benefit of the Indians.” 463 U. S., at 224. Title 25 U. S. C. § 406(a) permitted Indians to sell timber with the consent of the Secretary of the Interior, but directed the Secretary to base his decisions on “a consideration of the needs and best interests of the Indian owner and his heirs” and enumerated specific factors to guide that decision-making. We understood that statute — in combination with several other provisions and the applicable regulations — to create a fiduciary duty with respect to Indian timber. Mitchell II, supra, at 219-224. But neither the IMLA nor its regulations established any analogous duties or obligations in the coal context. Navajo I, supra, at 507-508.
Nor did the other statutes cited by the Tribe — 25 U. S. C. §399 and the Indian Mineral Development Act of 1982 (IMDA), 96 Stat. 1938, 25 U. S. C. §2101 et seq. — help its case. Section 399 “is not part of the IMLA and [did] not govern Lease 8580,” Navajo I, 537 U. S., at 509; rather, it granted to the Secretary the power to lease Indian land on his own say-so. We therefore found it irrelevant to the question whether “the Secretary’s more limited approval role under the IMLA” created any enforceable duties. Ibid. And while the IMDA did set standards to govern the Secretary’s approval of other mining-related agreements, Lease 8580 “falls outside the IMDA’s domain,” ibid.; that law was accordingly beside the point.
Having resolved that “we ha[d] no warrant from any relevant statute or regulation to conclude that [the Secretary’s] conduct implicated a duty enforceable in an action for damages under the Indian Tucker Act,” this Court reversed the Federal Circuit’s judgment in favor of the Tribe and “remanded for further proceedings consistent with this opinion.” Id., at 514.
C. Proceedings on Remand
On remand, the Tribe argued that even if its suit could not be maintained on the basis of the IMLA, the IMDA, or § 399, a “network” of other statutes, treaties, and regulations could provide the basis for its claims. The Government objected that our opinion foreclosed that possibility, but the Federal Circuit disagreed and remanded for consideration of the argument in the first instance. 347 F. 3d 1327 (2003). The Court of Federal Claims, however, persisted in its original decision to dismiss the Tribe’s claim, explaining that nothing in the suggested “network” succeeded in tying “specific laws or regulatory provisions to the issue at hand,” namely, the Secretary’s approval of royalty rates in coal leases negotiated by tribes. 68 Fed. Cl. 805, 811 (2005).
Once again the Federal Circuit reversed, this time relying primarily on three statutory provisions — two sections of the Navajo-Hopi Rehabilitation Act of 1950, §§5,8,64 Stat. 46,25 U. S. C. §§ 635(a), 638; and one section of the Surface Mining Control and Reclamation Act of 1977, 30 U. S. C. § 1300(e)— to allow the Tribe’s claim to proceed. The court held that the Government had violated the specific duties created by those statutes, as well as “common law trust duties of care, candor, and loyalty” that arise from the comprehensive control over tribal coal that is exercised by the Government. 501 F. 3d 1327, 1346 (2007).
Once again we granted the Government’s petition for a writ of certiorari. 554 U. S. 944 (2008).
III. Analysis
A. Threshold Matter
The Government points to our categorical concluding language in Navajo I: “[W]e have no warrant from any relevant statute or regulation to conclude that [the Secretary’s] conduct implicated a duty enforceable in an action for damages under the Indian Tucker Act,” 537 U. S., at 514. This proves, the Government claims, that this Court definitively terminated the Tribe’s claim last time around, so that the lower court’s later resurrection of the suit was flatly inconsistent with our mandate. But, to be fair, our opinion (like the Court of Appeals decision we were reviewing, Navajo Nation, 263 F. 3d, at 1327, 1330-1331) did not analyze any statutes beyond the IMLA, the IMDA, and § 399. It is thus conceivable, albeit unlikely, that some other relevant statute, though invoked by the Tribe at the outset of the litigation, might have gone unmentioned by the Federal Circuit and unanalyzed by this Court.
So we cannot say that our mandate completely foreclosed the possibility that such a statute might allow for the Tribe to succeed on remand. What we can say, however, is that our reasoning in Navajo I — in particular, our emphasis on the need for courts to “train on specific rights-creating or duty-imposing statutory or regulatory prescriptions,” 537 U. S., at 506 — left no room for that result based on the sources of law that the Court of Appeals relied upon.
B. 25U.S.C. § 635(a)
The first of the two discussed provisions of the Navajo-Hopi Rehabilitation Act of 1950 — like the IMLA — permits Indians to lease reservation lands if the Secretary approves of the deal:
“Any restricted Indian lands owned by the Navajo Tribe, members thereof, or associations of such members... may be leased by the Indian owners, with the approval of the Secretary of the Interior, for public, religious, educational, recreational, or business purposes, including the development or utilization of natural resources in connection with operations under such leases. All leases so granted shall be for a term of not to exceed twenty-five years, but may include provisions authorizing their renewal for an additional term of not to exceed twenty-five years, and shall be made under such regulations as may be prescribed by the Secretary.... Nothing contained in this section shall be construed to repeal or affect any authority to lease restricted Indian lands conferred by or pursuant to any other provision of law.” 25 U. S. C. § 635(a).
The Tribe contends that this section renders the Government liable for any breach of trust in connection with the approval of leases executed pursuant to the authority it grants. Whether or not that is so, the provision only even arguably matters if Lease 8580 was issued under its authority.
In Navajo I we presumed, as did the parties, that the lease had been issued pursuant to the IMLA. 537 U. S., at 495. But now the Tribe has changed its tune, and contends that Lease 8580 was approved under § 635(a), not under the IMLA at all. Brief for Respondent 39. The Government says otherwise. Section 635(a) permits leasing only for “public, religious, educational, recreational, or business purposes,” and the Government contends that mining is not embraced by those terms. While leases under § 635(a) may provide for “the development or utilization of natural resources,” they may do so only “in connection with operations under such leases,” i. e., in connection with operations for the enumerated purposes. By contrast, mining leases were permitted and governed by the IMLA even before the Navajo-Hopi Rehabilitation Act was enacted in 1950.
We need not decide whether the Government is correct on that point, or whether mining could ever qualify as a “business purpos[e]” under the statute, because the Tribe’s argument suffers from a more fundamental problem. Section 635(a) authorizes leases only for terms of up to 25 years, renewable for up to another 25 years. In contrast, the IMLA allows “for terms not to exceed ten years and as long thereafter as minerals are produced in paying quantities.” 25 U. S. C. § 396a. Lease 8580, mirroring the latter language, sets a term of “ten (10) years from the date hereof, and for so long thereafter as the substances produced are being mined by the Lessee in accordance with its terms, in paying quantities.” App. 189. That indefinite lease term strongly suggests that it was negotiated by the Tribe and approved by the Secretary under the powers authorized by the IMLA, not the Rehabilitation Act.
The Tribe’s only responses to this apparently fatal defect in its argument are (1) that § 635(a) expressly leaves unaffected “any authority to lease restricted Indian lands conferred by or pursuant to any other provision of law,” including the authority to lease for indefinite terms; and (2) that Stewart Udall, who served as Secretary of the Interior during the 1960’s, recently testified that “coal leasing and related development was the centerpiece of the resources development program” under the Rehabilitation Act, id., ¶3, at 569.
As to the former: That is precisely the point. Section 635(a) creates a supplemental authority for leasing Indian land; it does not displace authority granted elsewhere. But in light of the different conditions attached to the different grants, it is apparent that a particular lease must be executed and approved pursuant to a particular authorization. The saving clause in § 635(a) does not allow the Tribe to mix-and-match, to combine the (allegedly) duty-creating mechanism of the Rehabilitation Act with the indefinite lease term of the IMLA. It must be one or the other, and the record persuasively demonstrates that Lease 8580 is an IMLA lease.
As to Secretary Udall’s testimony: That is not inconsistent with our conclusion. The Interior Department may have viewed coal leasing as an important part of the program to rehabilitate the Navajo Tribe but that does not prove that Lease 8580 was issued pursuant to the supplemental leasing authority granted by the Rehabilitation Act, rather than the pre-existing leasing authority of the IMLA preserved by the Rehabilitation Act. The latter, perhaps because of its longer lease terms, was evidently preferable to the Tribe or the coal company or both.
Because the lease in this case “falls outside” § 635(a)’s “domain,” Navajo I, supra, at 509, the Tribe cannot invoke it as a source of money-mandating rights or duties.
C. 25 U. S. C. §638
Next, the Tribe points to a second provision in the Navajo-Hopi Rehabilitation Act:
“The Tribal Councils of the Navajo and Hopi Tribes and the Indian communities affected shall be kept informed and afforded opportunity to consider from their inception plans pertaining to the program authorized by this subchapter. In the administration of the program, the Secretary of the Interior shall consider the recommendations of the tribal councils and shall follow such recommendations whenever he deems them feasible and consistent with the objectives of this subchapter.” 25 U.S. C. §638.
In the Tribe’s view, the Secretary violated this provision by failing promptly to abide by its wishes to affirm the Area Director’s order increasing the royalty rate under Lease 8580 to a full 20 percent of gross proceeds.
We cannot agree. The “program” twice mentioned in §638 refers back to the Act’s opening provision, which directs the Secretary to undertake “a program of basic improvements for the conservation and development of the resources of the Navajo and Hopi Indians, the more productive employment of their manpower, and the supplying of means to be used in their rehabilitation.” § 631. The statute then enumerates various projects to be included in that program, and authorizes appropriation of funds (in specific amounts) for each. E. g., “Soil and water conservation and range improvement work, $10,000,000.” §631(1).
The only listed project even remotely related to this case is “[s]urveys and studies of timber, coal, mineral, and other physical and human resources.” § 631(3). Of course a lease is neither a survey nor a study. To read §688 as imposing a money-mandating duty on the Secretary to follow recommendations of the Tribe as to royalty rates under coal leases executed pursuant to another Act, and to allow for the enforcement of that duty through the Indian Tucker Act, would simply be too far a stretch.
D. 30 U.S.C. §1201 etseq.
The final statute invoked by the Tribe is the most easily dispensed with. The Surface Mining Control and Reclamation Act of 1977 (SMCRA), 91 Stat. 445, 30 U. S. C. § 1201 et seq., is a comprehensive statute that regulates all surface coal mining operations. See generally § 1202; Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U. S. 264, 268-272 (1981). One section of the Act, §1300, deals with coal mining specifically on Indian lands, and the Tribe cites subsection (e): “With respect to leases issued after [the date of enactment of this Act], the Secretary shall include and enforce terms and conditions in addition to those required by subsections (c) and (d) of this section as may be requested by the Indian tribe in such leases.”
According to the Tribe, this provision requires the Secretary to enforce whatever terms the Indians request with respect to coal leases. In light of the fact that the referenced subsections (c) and (d) refer exclusively to environmental protection standards, that interpretation is highly suspect. In any event, because Lease 8580 was issued in 1964 — some 13 years before the date of enactment of the SMCRA — the provision is categorically inapplicable. The Federal Circuit concluded otherwise on the theory that the amendments to the lease were approved after 1977. But § 1300(e) is limited to leases “issued” after that date; and even the Tribe does not contend that a lease is “issued” whenever it is amended. The SMCRA is irrelevant here.
E. Government’s “Comprehensive Control” Over Coal
The Federal Circuit’s opinion also suggested that the Government’s “comprehensive control” over coal on Indian land gives rise to fiduciary duties based on common-law trust principles. It noted that the Government had conducted surveys and studies of the Tribe’s coal resources, 501 F. 3d, at 1341; that the Interior Department imposed various requirements on coal mining operations on Indian land — regulating, for example, “signs and markers, postmining use of land, backfilling and grading, waste disposal, topsoil handling, protection of hydrologic systems, revegetation, and steep-slope mining,” id., at 1342; and that the Government in practice exercised control over the calculation of coal values and quantities for royalty purposes, even though such control was codified by regulation only after the events at issue here, id., at 1342-1343.
The Federal Government’s liability cannot be premised on control alone. The text of the Indian Tucker Act makes clear that only claims arising under “the Constitution, laws or treaties of the United States, or Executive orders of the President” are cognizable (unless the claim could be brought by a non-Indian plaintiff under the ordinary Tucker Act). 28 U. S. C. § 1505. In Navajo I we reiterated that the analysis must begin with “specific rights-creating or duty-imposing statutory or regulatory prescriptions.” 537
Question: What is the court whose decision the Supreme Court reviewed?
001. U.S. Court of Customs and Patent Appeals
002. U.S. Court of International Trade
003. U.S. Court of Claims, Court of Federal Claims
004. U.S. Court of Military Appeals, renamed as Court of Appeals for the Armed Forces
005. U.S. Court of Military Review
006. U.S. Court of Veterans Appeals
007. U.S. Customs Court
008. U.S. Court of Appeals, Federal Circuit
009. U.S. Tax Court
010. Temporary Emergency U.S. Court of Appeals
011. U.S. Court for China
012. U.S. Consular Courts
013. U.S. Commerce Court
014. Territorial Supreme Court
015. Territorial Appellate Court
016. Territorial Trial Court
017. Emergency Court of Appeals
018. Supreme Court of the District of Columbia
019. Bankruptcy Court
020. U.S. Court of Appeals, First Circuit
021. U.S. Court of Appeals, Second Circuit
022. U.S. Court of Appeals, Third Circuit
023. U.S. Court of Appeals, Fourth Circuit
024. U.S. Court of Appeals, Fifth Circuit
025. U.S. Court of Appeals, Sixth Circuit
026. U.S. Court of Appeals, Seventh Circuit
027. U.S. Court of Appeals, Eighth Circuit
028. U.S. Court of Appeals, Ninth Circuit
029. U.S. Court of Appeals, Tenth Circuit
030. U.S. Court of Appeals, Eleventh Circuit
031. U.S. Court of Appeals, District of Columbia Circuit (includes the Court of Appeals for the District of Columbia but not the District of Columbia Court of Appeals, which has local jurisdiction)
032. Alabama Middle U.S. District Court
033. Alabama Northern U.S. District Court
034. Alabama Southern U.S. District Court
035. Alaska U.S. District Court
036. Arizona U.S. District Court
037. Arkansas Eastern U.S. District Court
038. Arkansas Western U.S. District Court
039. California Central U.S. District Court
040. California Eastern U.S. District Court
041. California Northern U.S. District Court
042. California Southern U.S. District Court
043. Colorado U.S. District Court
044. Connecticut U.S. District Court
045. Delaware U.S. District Court
046. District Of Columbia U.S. District Court
047. Florida Middle U.S. District Court
048. Florida Northern U.S. District Court
049. Florida Southern U.S. District Court
050. Georgia Middle U.S. District Court
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055. Idaho U.S. District Court
056. Illinois Central U.S. District Court
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071. Massachusetts U.S. District Court
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079. Montana U.S. District Court
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081. Nevada U.S. District Court
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083. New Jersey U.S. District Court
084. New Mexico U.S. District Court
085. New York Eastern U.S. District Court
086. New York Northern U.S. District Court
087. New York Southern U.S. District Court
088. New York Western U.S. District Court
089. North Carolina Eastern U.S. District Court
090. North Carolina Middle U.S. District Court
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092. North Dakota U.S. District Court
093. Northern Mariana Islands U.S. District Court
094. Ohio Northern U.S. District Court
095. Ohio Southern U.S. District Court
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100. Pennsylvania Eastern U.S. District Court
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102. Pennsylvania Western U.S. District Court
103. Puerto Rico U.S. District Court
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105. South Carolina U.S. District Court
106. South Dakota U.S. District Court
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140. Missouri U.S. District Court
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142. New Jersey Western U.S. District Court (West Jersey U.S. District Court)
143. New York U.S. District Court
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148. Texas U.S. District Court
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150. Norfolk U.S. District Court
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152. Kentucky U.S. Distrcrict Court
153. New Jersey U.S. District Court
154. California U.S. District Court
155. Florida U.S. District Court
156. Arkansas U.S. District Court
157. District of Orleans U.S. District Court
158. State Supreme Court
159. State Appellate Court
160. State Trial Court
161. Eastern Circuit (of the United States)
162. Middle Circuit (of the United States)
163. Southern Circuit (of the United States)
164. Alabama U.S. Circuit Court for (all) District(s) of Alabama
165. Arkansas U.S. Circuit Court for (all) District(s) of Arkansas
166. California U.S. Circuit for (all) District(s) of California
167. Connecticut U.S. Circuit for the District of Connecticut
168. Delaware U.S. Circuit for the District of Delaware
169. Florida U.S. Circuit for (all) District(s) of Florida
170. Georgia U.S. Circuit for (all) District(s) of Georgia
171. Illinois U.S. Circuit for (all) District(s) of Illinois
172. Indiana U.S. Circuit for (all) District(s) of Indiana
173. Iowa U.S. Circuit for (all) District(s) of Iowa
174. Kansas U.S. Circuit for the District of Kansas
175. Kentucky U.S. Circuit for (all) District(s) of Kentucky
176. Louisiana U.S. Circuit for (all) District(s) of Louisiana
177. Maine U.S. Circuit for the District of Maine
178. Maryland U.S. Circuit for the District of Maryland
179. Massachusetts U.S. Circuit for the District of Massachusetts
180. Michigan U.S. Circuit for (all) District(s) of Michigan
181. Minnesota U.S. Circuit for the District of Minnesota
182. Mississippi U.S. Circuit for (all) District(s) of Mississippi
183. Missouri U.S. Circuit for (all) District(s) of Missouri
184. Nevada U.S. Circuit for the District of Nevada
185. New Hampshire U.S. Circuit for the District of New Hampshire
186. New Jersey U.S. Circuit for (all) District(s) of New Jersey
187. New York U.S. Circuit for (all) District(s) of New York
188. North Carolina U.S. Circuit for (all) District(s) of North Carolina
189. Ohio U.S. Circuit for (all) District(s) of Ohio
190. Oregon U.S. Circuit for the District of Oregon
191. Pennsylvania U.S. Circuit for (all) District(s) of Pennsylvania
192. Rhode Island U.S. Circuit for the District of Rhode Island
193. South Carolina U.S. Circuit for the District of South Carolina
194. Tennessee U.S. Circuit for (all) District(s) of Tennessee
195. Texas U.S. Circuit for (all) District(s) of Texas
196. Vermont U.S. Circuit for the District of Vermont
197. Virginia U.S. Circuit for (all) District(s) of Virginia
198. West Virginia U.S. Circuit for (all) District(s) of West Virginia
199. Wisconsin U.S. Circuit for (all) District(s) of Wisconsin
200. Wyoming U.S. Circuit for the District of Wyoming
201. Circuit Court of the District of Columbia
202. Nebraska U.S. Circuit for the District of Nebraska
203. Colorado U.S. Circuit for the District of Colorado
204. Washington U.S. Circuit for (all) District(s) of Washington
205. Idaho U.S. Circuit Court for (all) District(s) of Idaho
206. Montana U.S. Circuit Court for (all) District(s) of Montana
207. Utah U.S. Circuit Court for (all) District(s) of Utah
208. South Dakota U.S. Circuit Court for (all) District(s) of South Dakota
209. North Dakota U.S. Circuit Court for (all) District(s) of North Dakota
210. Oklahoma U.S. Circuit Court for (all) District(s) of Oklahoma
211. Court of Private Land Claims
Answer:
|
songer_stpolicy
|
A
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the interpretation of state or local law, executive order, administrative regulation, doctrine, or rule of procedure by the court favor the appellant?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
ESSEX INTERNATIONAL, INC., a Michigan corporation, Plaintiff-Appellee, v. Earl A. CLAMAGE, Defendant-Appellant.
No. 18528.
United States Court of Appeals, Seventh Circuit.
March 22, 1971.
Morrie Much, Chicago, Ill., for defendant-appellant; Much & Shelist, Chicago, Ill., of counsel.
Samuel A. Haubold, Chicago, Ill., for plaintiff-appellee; Kirkland, Ellis, Hodson, Chaffetz & Masters, Chicago, Ill., of counsel.
Before SWYGERT, Chief Judge, and KERNER and PELL, Circuit Judges.
SWYGERT, Chief Judge.
This diversity action was brought by Essex International, Inc., against Earl A. Clamage on a written guaranty which personally obligated Clamage to pay any overdue balance for materials ordered by Monarch Products Corporation from a predecessor of Essex. Clamage appeals from an order entering summary judgment against him for $40,983.67, Monarch’s current open account indebtedness to Essex. He raises only legal defenses to his liability and does not contend that there are any unresolved factual issues.
Essex is the successor corporation to greater Louisville Industries, Inc., having purchased Greater Louisville’s assets in September 1967. Greater Louisville supplied Monarch with basic raw materials on open account from some time prior to 1963 until shortly before Monarch executed an assignment for the benefit of creditors in February 1969. By early 1963 Monarch’s purchases of materials had resulted in a substantial open account balance owed to Greater Louisville. At that time, Charles and Paul Fetters, the owners and managers of Greater Louisville, requested that Clamage, the sole shareholder and chief executive officer of Monarch, personally guarantee that Monarch’s open account indebtedness would be paid. Whatever his motivation, Clamage agreed to this request; and on March 13, 1963 he executed a written guaranty which provided in part:
In consideration of Greater Louisville Industries having extended credit for materials that have been sold to or hereafter may be sold to Monarch * * * I do hereby agree to personally guarantee and to pay on demand any sum or sums due or to become due Greater Louisville Industries, which remain unpaid after the due date thereof.
As we have noted, in September 1967, Essex purchased substantially all the assets of Greater Louisville pursuant , to a corporate reorganization under section 368(a) (1) (C) of the Internal Revenue Code of 1954, 26 U.S.C. § 368(a) (1) (C). This change in corporate ownership had no substantial effect on the business operations of Greater Louisville. The Fetters continued to manage Greater Louisville as officers of Essex; and Clamage continued to deal personally with them and to address his orders to “Greater Louisville.” Although Clamage concedes that the basic terms of the business relationship between the parties were not affected by the corporate reorganization, he attempts to avoid his obligation by relying on the rule that a special guaranty, addressed to a particular person or firm, is not enforceable by an assignee of that person or firm as to debts incurred after the date of the assignment. Clamage argues that under Illinois law the guaranty’s having been assigned to Essex as part of the sale of assets is sufficient in itself to discharge him.
The rationale for the rule that a special guaranty is not assignable without the consent of the guarantor stems from the general contract principle that a man may be held only to the precise obligation he undertook. Variation between the terms of the guarantor’s undertaking and the dealings between the debtor and creditor-guarantee generally results in the discharge of the guarantor’s obligation. Thus, in Lee v. Rubin, 117 So.2d 230 (Fla.Dist.Ct.App. 1960), where the plaintiff acquired a guaranty as part of an accounts receivable assignment pursuant to the dissolution of the creditor corporation, the Florida court affirmed a directed verdict in favor of the defendant-guarantor because the assignment from the creditor corporation was outside the terms of the guarantor’s undertaking.
Illinois recognizes the general rule of nonassignability of guaranties. Second National Bank of Peoria v. Diefendorf, 90 Ill. 396, 407 (1878). However, the Illinois courts have refused to apply the rule mechanically; rather they examine the factual setting of each case to determine whether the policy underlying the rule is applicable. The result is that the guarantor is not discharged unless the “essentials of the original contract have * * * been changed and the performance required of the principal is * * * materially different from that first contemplated.” Claude Southern Corporation v. Henry’s Drive-In, Inc., 51 Ill.App.2d 289, 301-302, 201 N.E.2d 127, 133 (1964). An obvious example is presented where the only variation from the terms of the guaranty contract is a change in the name of the debtor corporation. Scovill Manufacturing Company v. Cassidy, 275 Ill. 462, 114 N.E. 181 (1916), held that such a change was not sufficient to release the guarantor in the absence of a showing that the underlying obligations of the parties had been materially altered. We think the same result would clearly be reached if the creditor corporation changed its name. Cf. Glassine Paper Company v. Shannon, 238 F.2d 765 (2d Cir. 1956), where the suit was not brought in the name of the person or firm to whom the guaranty was addressed.
A potentially more substantial variation from the precise terms of a guaranty is presented when the creditor-guarantee named in the instrument is involved in a merger or consolidation under statute. In that event the surviving corporation takes over the rights and obligations of the merging corporations by operation of law. But a merger or consolidation involving the creditor corporation does not necessarily discharge a guarantor any more than a mere change in corporate name does. Unless there is some material change in the business dealings between the debtor and the creditor-guarantee and some increase in the risk undertaken by the guarantor, the obligation of the guarantor is not discharged. See Albers v. McNichols, 301 Ill.App. 551, 23 N.E.2d 220 (1939); Metro Corrugated Containers v. Owens-Illinois Glass Company, 185 F.Supp. 359 (E.D.N.Y.1960); cf. Pantex Pressing Machine, Inc. v. United States, 71 F.Supp. 859, 108 Ct.Cl. 735 (1947).
A more difficult problem is presented where, as here, the transfer of the guaranty results from a sale of a business’ assets rather than from a merger or consolidation. In the sale of assets, the transfer does not result by operation of statute but by force of contract. The court in Albers v. McNichols, supra, indicated that this distinction between assignment by the act of the parties and succession by operation of law under the consolidation statute might be important. We agree that a simple assignment of a guaranty pursuant to a contract between a creditor-guarantee and a third party is more likely to cause a material alteration in the guarantor’s obligation than an assignment pursuant to a merger; but Claude Southern, supra, teaches that in either case we must determine whether the guarantor's obligation has been materially altered. The manner in which an assignment takes place should not be determinative. The decision to effect a consolidation of two businesses by way of a sale of assets rather than a statutory merger is ordinarily based on business and tax considerations which are irrelevant to the question whether a guaranty issued to one of the predecessor businesses should survive. Under Claude Southern, swpra, the critical issue which must be determined in every ease, regardless of the manner in which the assignment of the guaranty was effected, is whether the creditor-guarantee has attempted to impose on the guarantor an obligation which differs materially from that which he undertook to perform. If the undertaking of the guarantor is not materially altered by a transfer of the guarantee’s assets, there is no reason to discharge him.
Applying the foregoing principles to the facts before us, we conclude that the purchase of Greater Louisville’s assets by Essex in no way altered the obligation which damage had undertaken. Greater Louisville remained a distinct business entity after the sale and carried on its business in substantially the same manner. The Fetters remained in charge of Greater Louisville and damage continued to deal with them personally. In fact, damage even continued to use the name “Greater Louisville” in his purchase orders, damage was aware of the sale of Greater Louisville’s assets shortly after it took place and he admits that he did not notice any change in Greater Louisville’s business dealings with him.
In addition to his argument that the assignment of the guaranty terminated his obligation as a matter of law, damage argues that Essex did not rely on his guaranty and did not believe that it was enforceable after it was assigned. This contention is based on Essex’s having requested damage to execute a new guaranty in its favor sometime in 1968. This request for additional security does not necessarily imply that Essex believed the existing guaranty was ineffective and had ceased to rely on it. In fact, Essex continued to extend credit to the financially failing Monarch Products Corporation even though damage did not execute an additional guaranty. We believe that Essex’s request for further security is irrelevant to the issue of the enforceability of the guaranty after its assignment, damage’s present attempt to repudiate his guaranty indicates that Essex was prudent in seeking additional security. However, Essex’s unsuccessful efforts should not preclude it from enforcing an otherwise valid security it already possessed.
The judgment is affirmed.
. damage is an Illinois resident; Essex is a Michigan corporation which maintains its principal place of business in Port Wayne, Indiana. Jurisdiction was based on 28 Ü.S.C. § 1332.
. The complaint was actually in two counts: count I relying on the guaranty; count II relying on a promissory note which was drawn by Glamage to the order of a predecessor of Essex, Greater Louisville Industries, Inc., and which allegedly secured the same open account indebtedness covered by the guaranty. The district court, finding that material issues of fact relevant to count II remained unresolved, denied the parties’ cross-motions for summary judgment on that count. Since we rule that the district court was correct in entering judgment on the written guaranty, we need, not consider the issues raised concerning the promissory note.
. damage’s deposition testimony indicates that his willingness to sign the guaranty derived from his personal friendship with the Fetters and he characterizes the guaranty as a personal favor to enable a friend to obtain financing. The implication seems clear, however, that Greater Louisville’s continuing willingness to extend credit to Monarch was in part attributable to damage’s guaranty.
. damage testified that he signed the guaranty at his office in Chicago. The district court assumed that Illinois law applied and Clamage has not argued that this assumption was erroneous.
Question: Did the interpretation of state or local law, executive order, administrative regulation, doctrine, or rule of procedure by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_procedur
|
B
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there was an issue discussed in the opinion of the court about the interpretation of federal rule of procedures, judicial doctrine, or case law, and if so, whether the resolution of the issue by the court favored the appellant.
UNITED STATES of America ex rel. Terry BETTS, Petitioner-Appellee, v. COUNTY COURT FOR LaCROSSE COUNTY, BRANCH II, et al., Respondents-Appellants.
No. 73-1668.
United States Court of Appeals, Seventh Circuit.
Heard Feb. 20, 1974.
Decided May 13, 1974.
Robert W. Warren, Atty. Gen., Robert D. Repasky, Asst. Atty. Gen., Madison, Wis., for respondents-appellants.
Patrick R. Doyle, La Crosse, Wis., for petitioner-appellee.
Before CUMMINGS and STEVENS, Circuit Judges, and GRANT, Senior District Judge.
Senior District Judge Robert A. Grant of the Northern District of Indiana is sitting by designation.
PER CURIAM.
In this habeas corpus proceeding, it was shown that petitioner was convicted upon a plea of guilty to the charge of burglary in the County Court of La Crosse County, Wisconsin. Although the maximum sentence provided by Section 943.10 of the Wisconsin Statutes was ten years, petitioner was sentenced to an indeterminate term of two years in the Wisconsin State Reformatory. On April 13, 1972, his two-year sentence of imprisonment expired. On June 5, 1972, following a confession of error by the State, the Wisconsin Supreme Court allowed withdrawal of petitioner’s guilty plea and remanded the case to the County Court. On September 28, 1972, that court entered an order allowing withdrawal of the guilty plea and called for a new arraignment upon the burglary charge. Thereafter petitioner entered an appearance and filed a motion to dismiss further proceedings, alleging they would violate the double jeopardy clause. After failing to receive relief from the trial court or the Wisconsin Supreme Court, petitioner sought a writ of habeas corpus in the district court.
On May 25, 1973, the district court granted the petition for a writ of habeas corpus. Its opinion relied particularly upon Ex parte Lange, 18 Wall. 163, 85 U.S. 163, 21 L.Ed. 872; the court refused to apply North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656. We conclude that Pearce permits a retrial of the burglary charge and accordingly reverse.
Because petitioner had already served a complete sentence, the district court held that Ex parte Lange, supra, barred his retrial under the principle of double jeopardy. However, that case did not involve a retrial, but rather the validity of a second sentence imposed by the trial court on the original conviction after a maximum sentence had already been served. The original conviction was never questioned there. Here, by contrast, the original conviction has been set aside, and if there is a second sentence, it will be imposed on a second conviction. Lange expressly held that a second trial may be had without violating the double jeopardy clause when the accused has prosecuted a writ of error. 85 U.S. at 174. Lange is further distinguishable because the first sentence imposed here was less than the statutory maximum.
We conclude that this case is controlled by North Carolina v. Pearce, supra, which dealt with “the imposition of wholly new sentences after wholly new trials.” 395 U.S. at 722. There the Supreme Court held that “the guarantee against double jeopardy imposes no restrictions upon the length of a sentence imposed upon reconviction.” Id. at 719. Under Pearce, a trial court has power to impose punishment following retrial, although the prior sentence must be credited.
Pearce also holds that the due process clause provides some protection. If the judge imposes a more severe sentence upon petitioner’s retrial, Pearce requires an affirmative showing of reasons for doing so. As Justice Stewart stated (at p. 726):
“Those reasons must be based upon objective information concerning identifiable conduct on the part of the defendant occurring after the time of the original sentencing proceeding. And the factual data upon which the increased sentence is based must be made part of the record, so that the constitutional legitimacy of the increased sentence may be fully reviewed on appeal.”
The fact that petitioner took an appeal would be an impermissible reason for increasing his sentence. Id. at 724.
In the present case where the first sentence has already been completed, Pearce requires a particularly strong showing by .the State to justify an increased sentence because completion of the first sentence raises the presumption that its purposes have been fulfilled.
At common law, the issue before us could not arise since “the right of appeal was gone when the punishment had once been suffered.” Lange, supra, at 169. Petitioner could have obviated any retrial by withdrawing his then pending appeal after completing his sentence. Since the collateral consequences of his conviction are apparently important to petitioner, it is not so unfair for the State also to consider them important. A retrial will serve to determine petitioner’s guilt or innocence for collateral purposes; Pearce will protect him against additional punishment unless justified.
The order of the district court is reversed with directions to dismiss the petition.
Question: Did the interpretation of federal rule of procedures, judicial doctrine, or case law by the court favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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songer_appel2_1_2
|
C
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the second listed appellant. The nature of this litigant falls into the category "private business (including criminal enterprises)". Your task is to classify the scope of this business into one of the following categories: "local" (individual or family owned business, scope limited to single community; generally proprietors, who are not incorporated); "neither local nor national" (e.g., an electrical power company whose operations cover one-third of the state); "national or multi-national" (assume that insurance companies and railroads are national in scope); and "not ascertained".
HIRAM WALKER & SONS, INC., Plaintiff-Appellee, v. KIRK LINE, et al., Defendants, Indian River Transport, Inc., Defendant-Appellant. HIRAM WALKER & SONS, INC., Plaintiff-Appellee, v. KIRK LINE, et al., Defendants, Eller & Company, Inc., Defendant-Appellant, Indian River Transport, Inc., Defendant-Appellee. HIRAM WALKER & SONS, INC., Plaintiff-Appellee, v. KIRK LINE, R.B. Kirkconnell & Bro. Ltd., et al., Defendants, Indian River Transport, Inc., Defendant-Appellant. HIRAM WALKER & SONS, INC., Plaintiff-Appellee, Cross-Appellant, v. KIRK LINE, R.B. Kirkconnell & Bro., Ltd., Jamaica Merchant Marine Atlantic Line Ltd., Indian River Transport, Inc., SS MORANT BAY, its engines, boilers, etc., Defendants, Eller & Company, Inc., Indian River Transport, Inc., Defendants-Appellants, Cross-Appellees.
Nos. 87-5048, 87-5094, 87-5111 and 88-5180.
United States Court of Appeals, Eleventh Circuit.
July 21, 1989.
Mark A. Leibowitz, Jay M. Levy, Her-shoff & Levy, John D. Kehoe, David F. McIntosh, Corfett, Killian, Hardeman, McIntosh & Levi, Miami, Fla., for Indian River Transport, Inc.
John P. D’Ambrosio, Elmsfore, N.Y., for Hiram Walker & Sons, Inc.
Christian D. Keedy, Smathers & Thompson, Kelley, Drye & Warren, Craig Drake Olmstead, Miami, Fla., for Eller & Co., Inc.
Before KRAVITCH and HATCHETT, Circuit Judges, and MARKEY, Chief Circuit Judge.
Honorable Howard T. Markey, Chief U.S. Circuit Judge for the Federal Circuit, sitting by designation.
KRAVITCH, Circuit Judge:
The plaintiff Hiram Walker & Sons, Inc. (Hiram Walker), filed this action in the Southern District of New York against defendants Indian River Transport, Inc. (Indian River), Eller & Company, Inc. (Eller), R.B. Kirkconnell & Bro., Ltd. (Kirk Line), and Jamaica Merchant Marine Atlantic Line, Ltd. (Jamaica Line), seeking damages for the loss of several thousand gallons of the liqueur Tia Maria. Upon Eller’s motion, the case was subsequently transferred to the Southern District of Florida. After all parties moved for summary judgment, the district court dismissed Kirk Line and Jamaica Line from the action, and granted Hiram Walker’s motion against Eller and Indian River on the question of liability. Indian River and Eller each filed an interlocutory appeal in this court, but because of a jurisdictional problem those appeals were never decided on the merits. The district court subsequently held a bench trial to determine the amount of damages due Hiram Walker. Following the trial, the district court quantified Hiram Walker’s damages, for which it adjudged Eller and Indian River each fifty percent liable. Eller and Indian River appealed; Hiram Walker cross-appealed against those two defendants but did not appeal the district court’s dismissal of the actions against Kirk Line and Jamaica Line. We consolidated all appeals from the earlier summary-judgment order and the order following trial; we now reverse and remand.
I. BACKGROUND
Hiram Walker purchased five thousand gallons of Tia Maria from Estate Industries in Jamaica on March 15, 1985. On March 26, a twenty-three ton tank containing the liqueur was loaded aboard the M/V Mov-ant Bay in Kingston, apparently in good order. Kirk Line had chartered the Mov-ant Bay from its proprietor, Jamaica Line, for a shipment of cargo including Hiram Walker’s liqueur, which was shipped under a Kirk Line-Hiram Walker bill of lading. The tank arrived in Miami three days later. Kirk Line hired Eller, a stevedore, to unload the tank from the Morant Bay and store it at the dock.
Hiram Walker contracted with Indian River to transport the liqueur overland to New Jersey; Hiram Walker and Indian River agreed that Indian River was to pump the liqueur from the tank into its freight trailer. On April 1, Jones, an employee of Indian River, arrived at the port to effect the pumping transfer. An Eller employee removed the tank from storage and aligned it with the trailer. Jones attempted to connect the tank and the trailer, but realized that a fitting needed to connect the hoses was missing. Even though another fitting on the back of the tank might have been used to pump the liqueur into the trailer, Jones decided that pumping the liqueur would be impossible; therefore, he asked Marshall, an Eller employee, to help him accomplish a “gravity feed” — essentially, Jones wanted to pour the liqueur from the tank to the trailer. To effect a gravity feed, the tank had to be elevated higher than the trailer. Marshall directed another Eller employee, Wright, to assist Jones. Wright lifted the tank on a large forklift; Wright, however, was not licensed to operate forklifts of this capacity.
Wright and Marshall neglected to put straw mats or other dunnage between the metal forks and the metal container. Fifteen minutes into the operation, the tank apparently began to slide off the forks because of the lack of dunnage. Deciding that the tank was not properly balanced, Marshall instructed Wright to find another forklift. Wright did not lower the tank, but left the forklift holding the tank suspended eight feet off the ground for ten minutes; leaving a load suspended was a violation of standard company procedure. As Wright returned, the tank fell off the forklift. The tank ruptured, and eighty-five percent of the Tia Maria in the tank spilled out. The liqueur remaining in the tank was contaminated during the clean-up, in which several fire-engine companies covered the area with anti-explosive foam.
II. BASIS OF FEDERAL JURISDICTION
The claim against Indian River was pleaded as a federal question; and against Eller, in diversity. The district court analyzed the cases against Eller and Indian River under maritime tort law; because the accident in question did not occur at a maritime situs, however, admiralty jurisdiction would not support the claims against these two defendants. Harville v. Johns-Manville Products Corp., 731 F.2d 775, 782 (11th Cir.1984); Boudloche v. Conoco Oil Corp., 615 F.2d 687, 688 (5th Cir.1980). On appeal, Indian River argues that the district court lacked subject-matter jurisdiction over the claim asserted against it. We of course may consider the question of Article III subject-matter jurisdiction for the first time on appeal; additionally, an explanation of the basis of federal jurisdiction over each defendant will point out the source of law applicable to each claim.
A. Federal subject-matter jurisdiction
Hiram Walker urges that its claim against Indian River arises under the Car-mack Amendment, 49 U.S.C. § 11707, which provides in relevant part:
A common carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission... shall issue a receipt or bill of lading for property it receives for transportation under this subtitle. That carrier... [is] liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this paragraph is for the actual loss or injury to the property caused by (1) the receiving carrier.... Failure to issue a receipt or bill of lading does not affect the liability of a carrier....
49 U.S.C.A. § 11707(a)(1) (1988). In its complaint, Hiram Walker alleged that Indian River “totally breached, failed and violated its duties as an interstate common carrier in receiving, tending, caring for and delivering the [shipment of Tia Maria] in good condition, but on the contrary, so seriously [damaged] the same while in its possession that it was rendered a total loss.” Section 1337 of Title 28 imposes an amount-in-controversy requirement over suits brought under the Carmack Amendment; that requirement is satisfied by the allegations in the complaint. The complaint sufficiently pleaded a federal claim against Indian River.
Because the Carmack Amendment would not support the claim against Eller, Hiram Walker alleged that this claim was properly within the court’s diversity jurisdiction. 28 U.S.C. § 1332. In the complaint, Hiram Walker conspicuously failed to allege that it and Indian River were of diverse citizenship. Diversity jurisdiction ordinarily is not available “when any plaintiff is a citizen of the same State as any defendant.” Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 2403, 57 L.Ed.2d 274 (1978). An exception to the general rule exists, however, when the plaintiff joins a non-diverse defendant sued under federal law with a diverse defendant sued in diversity. Romero v. Int’l Terminal Operating Co., 358 U.S. 354, 381, 79 S.Ct. 468, 485, 3 L.Ed.2d 368 (1959) (“Since the Jones Act provides an independent basis of federal jurisdiction over the non-diverse respondent,... the rule of Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435, does not require dismissal of the claims against the diverse respondents.”); Kauth v. Hartford Ins. Co., 852 F.2d 951, 958-59 (7th Cir.1988); Baker v. J.C. Penney Co., 496 F.Supp. 922 (N.D.Ga.1980). In Baker, Judge Vining observed that an anomaly would be created by “not allowing a plaintiff to do in one federal suit what he would be entitled to do in two separate federal suits.” 496 F.Supp. at 924.
Alternatively, the claim against Eller was properly within the pendent-party jurisdiction of the district court. We recently held that district courts have
the power to hear the state claim against the second party if (1) the federal claim against the first party is substantial, meaning not “inescapably” frivolous, Jackson v. Stinchcomb, 635 F.2d 462, 471 (5th Cir.1981), (2) the statute conferring jurisdiction over the federal claim does not “expressly or by implication negate[ ]” the existence of pendent jurisdiction, Aldinger v. Howard, 427 U.S. 1, 18, 96 S.Ct. 2413, 2422, 49 L.Ed.2d 276 (1976), and (3) the state claim arises out of a “common nucleus of operative fact,” such that the plaintiff would be expected to try the federal and state claims together. [United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966)].
Giardiello v. Balboa Ins. Co., 837 F.2d 1566, 1570 (11th Cir.1988) (emphasis in original). Here, the federal claim is substantial and the claims against Eller and Indian River, as joint tortfeasors, arise out of a “common nucleus of operative fact.” With regard to the second prong, even though claims under the Carmack Amendment may be brought in state court, 49 U.S.C. 11707(d)(1), Congress has neither expressly nor impliedly foreclosed the possibility of pendent-party jurisdiction under the Carmack Amendment. Boudreaux v. Puckett, 611 F.2d 1028, 1031 (5th Cir.1980) (no negation of pendent-party jurisdiction under 15 U.S.C. § 1981 even though such claims may be brought in state court); compare Aldinger, 427 U.S. at 19, 96 S.Ct. at 2422 (Congress impliedly negated pendent-party jurisdiction over counties in suits predicated on 28 U.S.C. § 1343(3), which provides jurisdiction for suits brought under 42 U.S.C. § 1983, because counties were not “persons” covered by § 1983 under the then-extant construction) with Giardiello, 837 F.2d at 1571 (no negation of pendent-party jurisdiction under ERISA); First Alabama Bank v. Parsons Steel, Inc., 747 F.2d 1367, 1377 (11th Cir.1984) (no negation of pendent-party jurisdiction under Bank Holding Company Act), rev’d on other grounds, 474 U.S. 518, 106 S.Ct. 768, 88 L.Ed.2d 877 (1986); and Lykins v. Pointer Inc., 725 F.2d 645, 647 (11th Cir.1984) (no negation of pendent-party jurisdiction under 28 U.S.C. § 1346(b)).
B. Source of the rule of law
For Indian River, federal law governs the determination of liability and the measure of damages under the Carmack Amendment, and common-law principles give content to the federal rule. Hector Martinez & Co. v. Southern Pacific Transportation Co., 606 F.2d 106, 108 n. 1 (5th Cir.1979), cert. denied, 446 U.S. 982, 100 S.Ct. 2962, 64 L.Ed.2d 838 (1980); Dublin Co. v. Ryder Truck Lines, Inc., 417 F.2d 777, 778 (5th Cir.1969).
Analysis of the source of law for the claim against Eller is a bit more complicated. This action originally was filed in the Southern District of New York, and Eller moved that court, pursuant to 28 U.S.C. § 1404(a), to transfer the case to the Southern District of Florida. The Florida federal court, therefore, must apply the rule that would have been applied by the transferor New York federal court. Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 821, 11 L.Ed.2d 945 (1964). The New York federal court would have applied the New York choice-of-law rule in determining whether to apply Florida tort law or New York tort law to this claim. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941).
Over twenty-five years ago the New York Court of Appeals abandoned the strict lex loci delicti rule in favor of interest analysis for choice-of-law in torts cases. Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963). Interest analysis would in any event lead a New York court to apply Florida law in judging Eller’s conduct, even were Florida law inconsistent with the law in New York. See Schultz v. Boy Scouts of America, Inc., 65 N.Y.2d 189, 480 N.E.2d 679, 491 N.Y.S.2d 90 (1985) (“when the conflicting rules involve the appropriate standards of conduct, rules of the road, for example, the law of the place of the tort ‘will usually have a predominant, if not exclusive concern’ ”); Hacohen v. Bolliger Ltd., 108 A.D.2d 357, 489 N.Y.S.2d 75 (1985) (where defendant’s standard of conduct is judged, court should look to the place of the tort in order to give effect to that jurisdiction’s interest in regulating conduct within its borders). Eller’s conduct is therefore to be measured under Florida law.
III. LIABILITY OF INDIAN RIVER AND ELLER
A. Indian River
We review the disposition of a motion for summary judgment de novo, applying the same standards that should have been applied by the district court. Eastern Air Lines v. Air Line Pilots Assoc. Int’l, 861 F.2d 1546, 1549 (11th Cir.1988). The district court drew the following inferences from the papers the parties submitted in support of their cross-motions for summary judgment:
A gravity feed, unlike a pumping transfer, required that the tank containing the liqueur be elevated to a height sufficient to allow sheer gravitational force to impel the liqueur in the tank to drain downward to the [Indian River] trailer. This operation, of course, was intrinsically and conspicuously fraught with dangers which would not have been present in a pumping transfer. It therefore seems plain that had Jones brought a cam-lock, the instrumentality needed to perform the transfer of the liqueur properly, the accident resulting in [Hiram Walker’s] tank of liqueur being dropped and spilled, would never have occurred.
On the basis of these observations, the district court adjudged Indian River liable for the damage to the Tia Maria. The trial court disregarded contradictory evidence and plainly drew inferences against Indian River, the non-movant. In the procedural posture of this case, the district court’s exercise of its fact-finding powers constituted reversible error.
The claim against Indian River appears to based on both a theory of tort and a theory of contract: Indian River behaved negligently in failing to bring the required fitting and then requesting a gravity transfer; alternatively, Indian River breached an express term of its contract with Hiram Walker by failing to perform a pump transfer. At least two questions are presented under a theory of tort that were not susceptible of resolution against Indian River on a motion for summary judgment. First, drawing inferences in favor of the non-movant, the district court should have concluded that it was “highly extraordinary” that Indian River’s failure to bring the proper fitting “should have brought about the harm.” Restatement (Second) of Torts § 435(2). The court may yet draw that conclusion after a full airing of the facts at trial, a conclusion that would absolve Indian River of liability for the lost liqueur.
Second, Indian River has demonstrated a very substantial question whether Eller’s behavior should be considered a superseding cause of the accident, another finding that would preclude Indian River’s liability. Restatement (Second) of Torts §§ 440-453. It is beyond dispute that Eller’s conduct “actively operate[d] in producing harm to [Hiram Walker] after [Indian River’s] negligent act or omission ha[d] been committed.” Restatement (Second) of Torts § 441(1). Eller’s conduct was thus an “intervening force” causing the spill; again drawing all inferences in favor of Indian River, the court should have determined that the intervening force was a superseding cause. Among other considerations, Eller's negligence brought about “harm different in kind from that which would otherwise have resulted from [Indian River’s] negligence;” Eller’s negligence was not “a normal result” of Indian River’s negligence; the intervening force was due to Eller’s action; and “the intervening force [was] due to an act of [Eller] which [was] wrongful toward [Hiram Walker] and as such subjected] [Eller] to liability.” See Restatement (Second) of Torts § 442. Evidence before the district court established the foregoing for summary judgment purposes; the court had before it proof that gravity transfers are common and usual, and that Eller had previously performed gravity feeds for Indian River’s drivers who had arrived without the proper pumping equipment.
As a matter of law, Indian River’s conduct in ordering a gravity feed cannot be characterized as negligent on the basis of the facts before the district court. The district court had before it no evidence tending to show that gravity feeds are inherently and unreasonably dangerous; to the contrary, the court was presented with evidence that dockworkers often perform gravity feeds. It may be that gravity feeds are more difficult than pump transfers, but that alone would not render one who requests a gravity feed liable for any damage that arises from a botched execution. We are presented with no substantial evidence that a competently executed gravity feed is an unreasonable solution to the problem of transferring a liquid from one tank to another; indeed, a gravity feed may under some circumstances be more efficient than pumping transfers. We cannot write a rule of law which would prevent prudent persons from requesting gravity feeds.
Nor was summary judgment against Indian River proper under a theory of contract. Assuming Indian River did breach its contract with Hiram Walker, it would be liable only for those damages which it had “reason to foresee as a probable result of the breach when the contract was made.” Restatement (Second) of Contracts § 351(1); see Hadley v. Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 (1854). We certainly cannot say as a matter of law that Indian River had “reason to foresee” that its failure to perform a pump transfer and its request that Eller undertake a gravity feed would result in the loss of nearly all of the Tia Maria. Whether framed as a tort or a breach of contract, summary judgment should not have been entered against Indian River on the question of liability.
B. Eller
We agree that the undisputed facts surrounding the loss of the Tia Maria established Eller’s negligence as a matter of Florida law. See Russ v. State, 140 Fla. 217, 191 So. 296 (1939); Seaboard Coast Line R.R. Co. v. Griffis, 381 So.2d 1063, 1065 (Fla.App.) (“Negligence is the failure to observe, for the protection of another’s interest, such care and precaution as the circumstances demand, or the failure to do what a reasonable and prudent person would ordinarily have done under the circumstances.”), cert. denied, 376 So.2d 72 (Fla.1979); Stirling v. Sapp, 229 So.2d 850, 853 (Fla.1969) (“Where the facts are undisputed and the evidence is reasonably susceptible of but a single inference, the question of defendant’s negligence... becomes one of law for the court.”). An Eller employee not licensed to operate the particular forklift raised the twenty-three ton tank containing Tia Maria without placing dun-nage between the tank and the blades of the forklift. When his supervisor noticed that the tank was slipping, the employee left the tank suspended above the ground for several minutes while searching for another forklift. The tank fell and ruptured; the Tia Maria was lost to the happy wharf rats. Hiram Walker satisfied its burden of producing enough undisputed evidence to make out a prima facie case for negligence under the Russ standard. The burden shifted to Eller to show that, notwithstanding these facts, its employees’ behavior was reasonable under the circumstances. Eller argues that the trial court incorrectly presumed that the Eller forklift operator should have complied with standard operating procedures and “lowered the tank when the tilt was first noticed to save the day.” Eller, who had the burden of showing that this direct inference from the undisputed facts was at least questionable, points to no proffer that calls the inference into doubt. Even assuming that the tank could not have been lowered, Eller does not proffer evidence suggesting why it should not be held negligent for allowing an unlicensed forklift operator to lift the tank without proper dunnage. Accordingly, Eller has raised only a “metaphysical doubt” as to the material facts and its claim must fail. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (when moving party has satisfied its burden, non-movant must come forward with “specific facts showing that there is a genuine issue for trial ” (quoting Fed.R.Civ.P. 56(c)) (emphasis in original)).
Hiram Walker and Eller also join issue on the effect of a “Himalaya” clause in Kirk Line’s bill of lading, which provides that the “limitation of liability [in the Carriage of Goods by Sea Act (COGSA) ] shall inure... to the benefit of any independent contractors performing services hereunder including stevedoring in connection with the goods covered hereunder.” COGSA limits liability to $500 for damage to the tank, a “customary freight unit.” E.g., Caterpillar Americas Co. v. S.S. Sea Roads, 231 F.Supp. 647 (S.D.Fla.1964), aff'd, 364 F.2d 829 (5th Cir.1966). Kirk Line hired Eller, a stevedore, to complete its delivery obligation; Eller was an independent contractor. On summary judgment, however, the trial court concluded as a matter of law that “Eller was a volunteer and acted only when [Indian River] failed to provide the necessary equipment for the pumping operation.” Accordingly, the court found that Eller was not acting within the scope of its stevedoring responsibilities to Kirk Line, and was not entitled to the limitation-of-liability provision of COG-SA. We review this determination de novo, applying the law of COGSA which the parties to the bill of lading made applicable beyond the Act’s legal scope. Assicurazioni Generali v. D’Amico, 766 F.2d 485, 488 (11th Cir.1985); Triple E Development Co. v. Floridagold Citrus Corp., 51 So.2d 435, 438 (Fla.1951) (intent of parties governs construction of contract).
Although Himalaya clauses must be “strictly construed and limited to intended beneficiaries,” Robert C. Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 305, 79 S.Ct. 766, 771, 3 L.Ed.2d 820 (1959); Certain Underwriters at Lloyds v. Barber Blue Sea Line, 675 F.2d 266, 269 (11th Cir.1982), “[w]hen a bill of lading refers to a class of persons such as ‘agents’ or ‘independent contractors' it is clear that the contract includes all those persons engaged by the carrier within the scope of the carriage contract.” Id. at 270. Kirk Line was responsible under the bill of lading for delivering the Tia Maria to Hiram Walker’s agent Indian River; Eller would be an intended beneficiary of the Himalaya clause as long as Kirk Line had not completely discharged its responsibility by the time of the spill. Assicurazioni Generali, 766 F.2d at 489. The question thus presented is whether Kirk Line’s duty was fulfilled when Eller aligned the tank with Indian River’s truck; if so, Kirk Line had completed its responsibilities under the bill of lading before the spill occurred, and Eller could not be said to have been an “independent contractor performing services” under the bill of lading at the time of the accident. If, however, because of Indian River’s failure to secure the proper fitting, delivery was not completed by the mere alignment of the tank with the trailer, then Kirk Line’s duty of delivery would have continued and Eller would have been “an independent contractor performing services” under the bill of lading at the time of the spill, entitled to the $500 limitation.
Hiram Walker proffered the following evidence on this narrow question. First, it offered the deposition testimony of Eller’s director of safety, in which he stated that Eller employees had performed the gravity transfer for the convenience of Indian River and agreed that “doing the gravity transfer bit was over and above the normal expected activities of Eller in transferring products.” Second, this witness testified that during a pumping transfer, Eller had the duty to align the tank and the trailer, but Indian River had the duty to effect the transfer. (Another deposition witness, El-ler’s employee Marshall, confirmed that Indian River bore responsibility for the mechanics of a pump transfer once Eller aligned the tank and the trailer.) Finally, Hiram Walker offered the affidavit of its traffic manager, who stated that “[i]t was HIRAM WALKER’S understanding with INDIAN RIVER that it was the latter’s sole responsibility to transfer the bulk products from the ocean tanks to its tankers. It was not part of HIRAM WALKER’S agreement with KIRK LINE that KIRK LINE would bear that responsibility.”
Eller for its part proffered the affidavit of its local Miami manager, who stated that Eller’s responsibility as an independent contractor for Kirk Line was to “physically move the cargo from ELLER’s lot and deliver the cargo to the consignee by transferring physical possession of the cargo to the consignee.” Of course, Eller’s local manager is probably in a better position than its safety director to know the stevedore’s responsibilities.
Neither party’s proffer demonstrates as a matter of law or undisputed fact at what point discharge of Kirk Line’s responsibility under the bill of lading occurred. The affidavit of Hiram Walker’s safety manager is the only direct evidence that the agreement between Hiram Walker and Kirk Line did not contemplate Kirk Line having any responsibility for the actual transfer of the Tia Maria, but this evidence has substantial weaknesses: it is a conclu-sory statement of an interested party and makes no reference to the actual written agreement between Kirk Line and Hiram Walker; further, it may be predicated upon the incorrect assumption that only a pump transfer would occur.
Inferences from the statements of Eller’s director of safety and its Miami manager lead in opposite directions; a reasonable inference from the statement proffered by Hiram Walker is that Eller — and therefore presumably Kirk Line — had no responsibility for the actual transfer of the liquid cargo whether the transfer was effected by a gravity feed or by pumping. On the other hand, one could reasonably infer from the statement proffered by Eller that the stevedore — and thus presumably Kirk Line — remained responsible under the bill of lading until the last of the liquid cargo was transferred to the care of Hiram Walker’s agent Indian River. Moreover, there are good reasons why a consignee such as Indian River may be responsible for a pumping transfer but not a gravity feed: the pump itself is apparently attached to the consignee’s trailer, but as gravity feeds require the use of a forklift, a stevedore may have primary responsibility for that kind of operation. When a pumping transfer is effected, delivery may occur when the tank and the trailer are aligned — but it does not necessarily follow that delivery in the case of a gravity feed can finally occur before the last of the liquid is drained into the trailer; the scope of Kirk Line’s duty under the bill of lading may thus depend upon the type of transfer that actually is performed. The district court should determine after trial whether Kirk Line’s obligations had completely terminated by the time of the spill, but its conclusion on summary judgment was in error.
REVERSED and REMANDED.
. Aetna, Hiram Walker’s insuror, paid the entire loss and thus Hiram Walker no longer has an interest in the case. Under the normal rules of subrogation, Aetna was the real party in interest and should have sued in its own name. Frank Briscoe Co. v. Georgia Sprinkler Co., 713 F.2d 1500, 1502 n. 1 (11th Cir.1983). The district court stated that Aetna should have filed an appearance, but held that the defect did not warrant dismissal of the claim because counsel for plaintiff advised on the record that he was bringing the claim for the use and benefit of Aetna. This was a bench trial, the fact finder knew that Aetna was the real party in interest, and no defendant has shown any prejudice. The district court did not abuse its discretion by constructively joining Aetna as a party plaintiff and refusing to dismiss the claim.
. See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (in banc). The Eleventh Circuit adopted as binding precedent all decisions rendered by the former Fifth Circuit prior to October 1, 1981.
. Venue may have been incorrect in the New York district court. See 49 U.S.C. § 11707(d)(2)(A)(iii). No party raised this objection, however, and the error was probably cured by the subsequent transfer to the Southern District of Florida.
. Hiram Walker argues that because this case was to be tried without a jury, we should apply the clearly erroneous test of Rule 52 to the findings made by the district judge on summary judgment. Cf. Nunez v. Superior Oil Co., 572 F.2d 1119, 1123-25 & n. 6 (5th Cir.1978) (“If decision is to be reached by the court, and there are no issues of witness credibility, the court may conclude on the basis of the affidavits, depositions, and stipulations before it, that there are no genuine issues of material fact, even though decision may depend on inferences to be drawn from what has been incontrovertibly proved.’’) Assuming that the pleadings incontrovertibly proved all material facts such that only inferences remained to be drawn, we would be left with a definite and firm conviction that the district court erred in holding Indian River liable. Moreover, the trial judge may have incorrectly assumed that no facts were in dispute, for the judge noted that "all the parties to this action have moved for summary judgment, thereby clearly indicating their accord that no genuine issue of fact remains to be resolved.” This is not a correct statement of the law; a movant may be correct in stating that the facts relevant to his theory of the case are not in dispute, yet contest the relevant issues of fact under his opponent’s theory. Walling v. Richmond Screw Anchor Co., 154 F.2d 780, 784 (2d Cir.), cert. denied, 328 U.S. 870, 66 S.Ct. 1383, 90 L.Ed. 1640 (1946). For this reason we think it prudent not to accord a presumption of correctness to the district judge’s fact-finding.
. It is irrelevant that Hiram Walker may have agreed to waive a substantial portion of Eller’s liability; Eller's conduct nonetheless subjected it to liability to Hiram Walker.
. Hiram Walker quotes three Restatement (Second) of Torts provisions, arguing that they prove that Indian River’s negligence in failing to bring the correct fitting was not superseded by Eller’s negligence. None of these sections indicates as a matter of law that Eller’s conduct is not a superseding cause:
(1) Where the negligent conduct of the actor creates or increases the foreseeable risk of harm through the intervention of another force, and is a substantial factor in causing the harm, such intervention is not a superseding cause.
Restatement (Second) of Torts § 442A. Although failing to bring the proper fitting may have increased the risk that the tank would fall (because that danger inheres in a gravity transfer), Indian River’s failure to bring the proper fitting was not indisputably a substantial factor causing the tank to fall.
(2) Where the negligent conduct of the actor creates or increases the risk of a particular harm and is a substantial factor in causing that harm, the fact that the harm is brought about through the intervention of another force does not relieve the actor of liability....
Restatement (Second) of Torts § 442B. Again, Indian River's failure to bring the proper fitting was not necessarily a substantial factor causing the tank to fall.
(3)The intervention of a force which is a normal consequence of a situation created by the actor’s negligent conduct is not a superseding cause of harm which such conduct has been a substantial factor in bringing about.
Restatement (Second) of Torts § 443. Negligent execution of a gravity feed is by no means a "normal consequence” of attempting a gravity feed.
.The colloquy between counsel for Indian River and the safety director for Eller, proffered by Hiram Walker in an attempt to show that gravity feeds are inherently and unreasonably dangerous, merely suggests that gravity feeds are more difficult than
Question: This question concerns the second listed appellant. The nature of this litigant falls into the category "private business (including criminal enterprises)". What is the scope of this business?
A. local
B. neither local nor national
C. national or multi-national
D. not ascertained
Answer:
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songer_appnatpr
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1
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What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
In some cases there is some confusion over who should be listed as the appellant and who as the respondent. This confusion is primarily the result of the presence of multiple docket numbers consolidated into a single appeal that is disposed of by a single opinion. Most frequently, this occurs when there are cross appeals and/or when one litigant sued (or was sued by) multiple litigants that were originally filed in district court as separate actions. The coding rule followed in such cases should be to go strictly by the designation provided in the title of the case. The first person listed in the title as the appellant should be coded as the appellant even if they subsequently appeared in a second docket number as the respondent and regardless of who was characterized as the appellant in the opinion.
To clarify the coding conventions, consider the following hypothetical case in which the US Justice Department sues a labor union to strike down a racially discriminatory seniority system and the corporation (siding with the position of its union) simultaneously sues the government to get an injunction to block enforcement of the relevant civil rights law. From a district court decision that consolidated the two suits and declared the seniority system illegal but refused to impose financial penalties on the union, the corporation appeals and the government and union file cross appeals from the decision in the suit brought by the government. Assume the case was listed in the Federal Reporter as follows:
United States of America,
Plaintiff, Appellant
v
International Brotherhood of Widget Workers,AFL-CIO
Defendant, Appellee.
International Brotherhood of Widget Workers,AFL-CIO
Defendants, Cross-appellants
v
United States of America.
Widgets, Inc. & Susan Kuersten Sheehan, President & Chairman
of the Board
Plaintiff, Appellants,
v
United States of America,
Defendant, Appellee.
This case should be coded as follows:Appellant = United States, Respondents = International Brotherhood of Widget Workers Widgets, Inc., Total number of appellants = 1, Number of appellants that fall into the category "the federal government, its agencies, and officials" = 1, Total number of respondents = 3, Number of respondents that fall into the category "private business and its executives" = 2, Number of respondents that fall into the category "groups and associations" = 1.
Note that if an individual is listed by name, but their appearance in the case is as a government official, then they should be counted as a government rather than as a private person. For example, in the case "Billy Jones & Alfredo Ruiz v Joe Smith" where Smith is a state prisoner who brought a civil rights suit against two of the wardens in the prison (Jones & Ruiz), the following values should be coded: number of appellants that fall into the category "natural persons" =0 and number that fall into the category "state governments, their agencies, and officials" =2. A similar logic should be applied to businesses and associations. Officers of a company or association whose role in the case is as a representative of their company or association should be coded as being a business or association rather than as a natural person. However, employees of a business or a government who are suing their employer should be coded as natural persons. Likewise, employees who are charged with criminal conduct for action that was contrary to the company policies should be considered natural persons.
If the title of a case listed a corporation by name and then listed the names of two individuals that the opinion indicated were top officers of the same corporation as the appellants, then the number of appellants should be coded as three and all three were coded as a business (with the identical detailed code). Similar logic should be applied when government officials or officers of an association were listed by name.
Your specific task is to determine the total number of appellants in the case that fall into the category "natural persons". If the total number cannot be determined (e.g., if the appellant is listed as "Smith, et. al." and the opinion does not specify who is included in the "et.al."), then answer 99.
Steven Lynn RAMSEY, Petitioner-Appellant, v. Edward BRENNAN, Respondent-Appellee.
No. 88-1145.
United States Court of Appeals, Seventh Circuit.
Submitted April 26, 1989.
Decided June 29, 1989.
Steven Lynn Ramsey, Oxford, Wis., pro se.
Sheree L. Gowey, Asst. U.S. Atty., Madison, Wis., for respondent-appellee.
Before CUMMINGS, CUDAHY, and POSNER, Circuit Judges.
POSNER, Circuit Judge.
Steven Lynn Ramsey, a federal prison inmate, claims that he should have received credit toward his prison sentence for the 96 days that he served in a halfway house before his criminal trial. Arrested by agents of the FBI for bank robbery and related crimes, Ramsey was released on bail on various conditions, including that he remain in St. Andrews Halfway House in Lexington, Kentucky until trial. He was later convicted and sentenced to 9 years in prison. He asked the warden of the prison in Wisconsin where he is confined to credit his time in the halfway house toward his prison sentence. The warden refused, and after exhausting his administrative remedies Ramsey brought this action under the habeas corpus statute, 28 U.S.C. §§ 2241 et seq.] cf. United States v. Hornick, 815 F.2d 1156, 1160 (7th Cir.1987).
Federal law provides that the “Attorney General shall give any [person sentenced to prison] credit toward service of his sentence for any days spent in custody in connection with the offense or acts for which sentence was imposed.” 18 U.S.C. § 3568. To a normal English speaker, even to a legal English speaker, being forced to live in a halfway house is to be held “in custody”; and the requirement of connection is satisfied here. Just the other day we affirmed in an unpublished order a judgment of conviction for escaping from a halfway house, under a statute which makes it a crime for anyone to escape or try to escape “from the custody of the Attorney General or his authorized representative, or from any institution or facility in which he is confined by direction of the Attorney General.” 18 U.S.C. § 751(a); United States v. Corcoran, 876 F.2d 106 (7th Cir.1989). Finally, in Johnson v. Smith, 696 F.2d 1334 (11th Cir.1983), on which Ramsey relies heavily, the Eleventh Circuit held that it is a violation of equal protection (the principle of equal protection of the laws was held in Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 884 (1954), to be an implied term of the Fifth Amendment’s due process clause) to deny credit for time spent in a halfway house before trial, since confinement in a halfway house after sentencing does not toll the period of one’s sentence.
Despite all this, we agree with the government and the Fifth Circuit, see United States v. Smith, 869 F.2d 835 (5th Cir.1989), that “custody” in section 3568 does not include time spent in a halfway house awaiting trial. The word is a chameleon. In the habeas corpus statute itself “custody” includes being out on bail, see Hensley v. Municipal Court, 411 U.S. 345, 348-49, 93 S.Ct. 1571, 1573, 36 L.Ed.2d 294 (1973); see generally Maleng v. Cook, — U.S. -, 109 S.Ct. 1923, 1925-26, 104 L.Ed.2d 540 (1989), and Ramsey does not argue that the Attorney General is required to give jail credit for bail time. See United States v. Robles, 563 F.2d 1308 (9th Cir.1977) (per curiam); Sica v. United States, 454 F.2d 281 (9th Cir.1971) (per curiam). The wording of the escape statute actually supports the government’s argument here, since it distinguishes between “custody” on the one hand and confinement in any facility pursuant to an order of the Attorney General on the other. Ramsey was confined in the halfway house by direction of the Attorney General, but the escape statute implies that this may not have been custody.
In a halfway house (“residential community center” in bureaucratese) the inmate or resident is confined only at night, placing him in a twilight zone between prison and freedom. Whether such confinement should count as time served toward his prison sentence — whether the deprivation of liberty by confinement in a halfway house is sufficiently like prison to be treated the same in deciding how long the convicted criminal should serve — is not a question susceptible of rational determination, at least by tools of inquiry available to judges. It is a matter of judgment, or policy, or discretion, and we are fortunate in having a policy statement by the Bureau of Prisons which opines unequivocally that “Time spent in residence in a residential community center ... as a condition of bail or bond ... is not creditable as jail time since the degree of restraint provided by residence in a community center is not sufficient restraint to constitute custody within the meaning or intent of 18 U.S.C. 3568.” BOP Policy Statement No. 5880.24(5)(b)(5). This is a reasonable opinion by officials having greater knowledge of federal penal policy than we judges have, so we are inclined to defer to it.
We are unpersuaded by the Eleventh Circuit’s equal-protection analysis. Criminals sentenced to serve a part of their term in a halfway house rather than in a prison are not given credit for time served in the same sense in which Ramsey is seeking credit. They are merely beneficiaries of the Attorney General’s discretionary authority to “designate as a place of confinement any available, suitable, and appropriate institution or facility,” 18 U.S.C. § 4082(b) (since repealed), expressly including a halfway house, see § 4082(g). The legislative history of section 4082(g) indicates that Congress wanted to facilitate the re-entry of convicts into society by making the last stage of their confinement transitional— hence the apt name “halfway house.” See S.Rep. No. 613, 89th Cong., 1st Sess. 2 (1965), U.S.Code Cong. & Admin.News 1965, p. 3076; Brown v. Rison, 673 F.Supp. 1505, 1510 (C.D.Cal.1987). That policy has no application to a prisoner moving in the opposite direction, like Ramsey.
We affirm the dismissal of Ramsey’s action for habeas corpus. Since our decision creates a conflict with the Eleventh Circuit we have circulated the opinion in advance of publication to all the active circuit judges, none of whom has voted to hear the case en banc. See 7th Cir.R. 40(f).
Affirmed.
Question: What is the total number of appellants in the case that fall into the category "natural persons"? Answer with a number.
Answer:
|
sc_issuearea
|
H
|
What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue area of the Court's decision. Determine the issue area on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis. In specifying the issue in a legacy case, choose the one that best accords with what today's Court would consider it to be. Choose among the following issue areas: "Criminal Procedure" encompasses the rights of persons accused of crime, except for the due process rights of prisoners. "Civil rights" includes non-First Amendment freedom cases which pertain to classifications based on race (including American Indians), age, indigency, voting, residency, military or handicapped status, gender, and alienage. "First Amendment encompasses the scope of this constitutional provision, but do note that it need not involve the interpretation and application of a provision of the First Amendment. For example, if the case only construe a precedent, or the reviewability of a claim based on the First Amendment, or the scope of an administrative rule or regulation that impacts the exercise of First Amendment freedoms. "Due process" is limited to non-criminal guarantees. "Privacy" concerns libel, comity, abortion, contraceptives, right to die, and Freedom of Information Act and related federal or state statutes or regulations. "Attorneys" includes attorneys' compensation and licenses, along with trhose of governmental officials and employees. "Unions" encompass those issues involving labor union activity. "Economic activity" is largely commercial and business related; it includes tort actions and employee actions vis-a-vis employers. "Judicial power" concerns the exercise of the judiciary's own power. "Federalism" pertains to conflicts and other relationships between the federal government and the states, except for those between the federal and state courts. "Federal taxation" concerns the Internal Revenue Code and related statutes. "Private law" relates to disputes between private persons involving real and personal property, contracts, evidence, civil procedure, torts, wills and trusts, and commercial transactions. Prior to the passage of the Judges' Bill of 1925 much of the Court's cases concerned such issues. Use "Miscellaneous" for legislative veto and executive authority vis-a-vis congress or the states.
SECURITIES AND EXCHANGE COMMISSION v. CAPITAL GAINS RESEARCH BUREAU, INC., et al.
No. 42.
Argued October 21, 1963.
Decided December 9, 1963.
David Ferber argued the cause for petitioner. With him on the brief were Solicitor General Cox, Daniel M. Friedman and Philip A. Loomis, Jr.
Leo C. Fennelly argued the cause and filed a brief for respondents.
Mr. Justice Goldberg
delivered the opinion of the Court.
We are called upon in this case to decide whether under the Investment Advisers Act of 1940 the Securities and Exchange Commission may obtain an injunction compelling a registered investment adviser to disclose to his clients a practice of purchasing shares of a security for his own account shortly before recommending that security for long-term investment and then immediately selling the shares at a profit upon the rise in the market price following the recommendation. The answer to this question turns on whether the practice — known in the trade as “scalping” — “operates as a fraud or deceit upon any client or prospective client” within the meaning of the Act. We hold that it does and that the Commission may “enforce compliance” with the Act by obtaining an injunction requiring the adviser to make full disclosure of the practice to his clients.
The Commission brought this action against respondents in the United States District Court for the Southern District of New York. At the hearing on the application for a preliminary injunction, the following facts were established. Respondents publish two investment advisory services, one of which — “A Capital Gains Report” — is the subject of this proceeding. The Report is mailed monthly to approximately 5,000 subscribers who each pay an annual subscription price of $18. It carries the following description:
“An Investment Service devoted exclusively to (1) The protection of investment capital. (2) The realization of a steady and attractive income therefrom. (3) The accumulation of CAPITAL GAINS thru the timely purchase of corporate equities that are proved to be undervalued.”
Between March 15, 1960, and November 7, 1960, respondents, on six different occasions, purchased shares of a particular security shortly before recommending it in the Report for long-term investment. On each occasion, there was an increase in the market price and the volume of trading of the recommended security within a few days after the distribution of the Report. Immediately thereafter, respondents sold their shares of these securities at a profit. They did not disclose any aspect of these transactions to their clients or prospective clients.
On the basis of the above facts, the Commission requested a preliminary injunction as necessary to effectuate the purposes of the Investment Advisers Act of 1940. The injunction would have required respondents, in any future Report, to disclose the material facts concerning, inter alia, any purchase of recommended securities “within a very short period prior to the distribution of a recommendation...,” and “[t]he intent to sell and the sale of said securities... within a very short period after distribution of said recommendation....”
The District Court denied the request for a preliminary injunction, holding that the words “fraud” and “deceit” are used in the Investment Advisers Act of 1940 “in their technical sense” and that the Commission had failed to show an intent to injure clients or an actual loss of money to clients. 191 F. Supp. 897. The Court of Appeals for the Second Circuit, sitting en banc, by a 5-to-4 vote accepted the District Court’s limited construction of “fraud” and “deceit” and affirmed the denial of injunctive relief. 306 F. 2d 606. The majority concluded that no violation of the Act could be found absent proof that “any misstatements or false figures were contained in any of the bulletins”; or that “the investment advice was unsound”; or that “defendants were being bribed or paid to tout a stock contrary to their own beliefs”; or that “these bulletins were a scheme to get rid of worthless stock”; or that the recommendations were made “for the purpose of endeavoring artificially to raise the market so that [respondents] might unload [their] holdings at a profit.” Id., at 608-609. The four dissenting judges pointed out that “[t]he common-law doctrines of fraud and deceit grew up in a business climate very different from that involved in the sale of securities,” and urged a broad remedial construction of the statute which would encompass respondents’ conduct. Id., at 614. We granted certiorari to consider the question of statutory construction because of its importance to the investing public and the financial community. 371 U. S. 967.
The decision in this case turns on whether Congress, in empowering the courts to enjoin any practice which operates “as a fraud or deceit upon any client or prospective client,” intended to require the Commission to establish fraud and deceit “in their technical sense,” including intent to injure and actual injury to clients, or whether Congress intended a broad remedial construction of the Act which would encompass nondisclosure of material facts. For resolution of this issue we consider the history and purpose of the Investment Advisers Act of 1940.
I.
The Investment Advisers Act of 1940 was the last in a series of Acts designed to eliminate certain abuses in the securities industry, abuses which were found to have contributed to the stock market crash of 1929 and the depression of the 1930’s. It was preceded by the Securities Act of 1933, the Securities Exchange Act of 1934, the Public Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, and the Investment Company Act of 1940. A fundamental purpose, common to these statutes, was to substitute a philosophy of full disclosure for the philosophy of caveat emptor and thus to achieve a high standard of business ethics in the securities industry. As we recently said in a related context, “It requires but little appreciation... of what happened in this country during the 1920’s and 1930’s to realize how essential it is that the highest ethical standards prevail” in every facet of the securities industry. Silver v. New York Stock Exchange, 373 U. S. 341, 366.
The Public Utility Holding Company Act of 1935 “authorized and directed” the Securities and Exchange Commission “to make a study of the functions and activities of investment trusts and investment companies....” Pursuant to this mandate, the Commission made an exhaustive study and report which included consideration of investment counsel and investment advisory services. This aspect of the study and report culminated in the Investment Advisers Act of 1940.
The report reflects the attitude — shared by investment advisers and the Commission — that investment advisers could not “completely perform their basic function — furnishing to clients on a personal basis competent, unbiased, and continuous advice regarding the sound management of their investments — unless all conflicts of interest between the investment counsel and the client were removed.” The report stressed that affiliations by investment advisers with investment bankers, or corporations might be "an impediment to a disinterested, objective, or critical attitude toward an investment by clients....”
This concern was not limited to deliberate or conscious impediments to objectivity. Both the advisers and the Commission were well aware that whenever advice to a client might result in financial benefit to the adviser — ■ other than the fee for his advice — “that advice to a client might in some way be tinged with that pecuniary interest [whether consciously or] subconsciously motivated....” The report quoted one leading investment adviser who said that he “would put the emphasis... on subconscious” motivation in such situations. It quoted a member of the Commission staff who suggested that a significant part of the problem was not the existence of a “deliberate intent” to obtain a financial advantage, but rather the existence “subconsciously [of] a prejudice” in favor of one’s own financial interests. The report incorporated the Code of Ethics and Standards of Practice of one of the leading investment counsel associations, which contained the following canon:
“[An investment adviser] should continuously occupy an impartial and disinterested position, as free as humanly possible from the subtle influence of prejudice, conscious or unconscious; he should scrupulously avoid any affiliation, or any act, which subjects his position to challenge in this respect.” (Emphasis added.)
Other canons appended to the report announced the following guiding principles: that compensation for investment advice “should consist exclusively of direct charges to clients for services rendered”; that the adviser should devote his time "exclusively to the performance” of his advisory function; that he should not “share in profits” of his clients; and that he should not “directly or indirectly engage in any activity which may jeopardize [his] ability to render unbiased investment advice.” These canons were adopted “to the end that the quality of services to be rendered by investment counselors may measure up to the high standards which the public has a right to expect and to demand.”
One activity specifically mentioned and condemned by investment advisers who testified before the Commission was “trading by investment counselors for their own account in securities in which their clients were interested....”
This study and report — authorized and directed by statute — culminated in the preparation and introduction by Senator Wagner of the bill which, with some changes, became the Investment Advisers Act of 1940. In its “declaration of policy” the original bill stated that
“Upon the basis of facts disclosed by the record and report of the Securities and Exchange Commission... it is hereby declared that the national public interest and the interest of investors are adversely affected- — -... (4) when the business of investment advisers is so conductéd as to defraud or mislead investors, or to enable such advisers to relieve themselves of their fiduciary obligations to their clients. “It is hereby declared that the policy and purposes of this title, in accordance with which the provisions of this title shall be interpreted, are to mitigate and, so far as is presently practicable to eliminate the abuses enumerated in this section.” S. 3580, 76th Cong., 3d Sess., § 202.
Hearings were then held before Committees of both Houses of Congress. In describing their profession, leading investment advisers emphasized their relationship of “trust and confidence” with their clients and the importance of “strict limitation of [their right] to buy and sell securities in the normal way if there is any chance at all that to do so might seem to operate against the interests of clients and the public.” The president of the Investment Counsel Association of America, the leading investment counsel association, testified that the
“two fundamental principles upon which the pioneers in this new profession undertook to meet the growing need for unbiased investment information and guidance were, first, that they would limit their efforts and activities to the study of investment problems from the investor’s standpoint, not engaging in any other activity, such as security selling or brokerage, which might directly or indirectly bias their investment judgment; and, second, that their remuneration for this work would consist solely of definite, professional fees fully disclosed in advance.”
Although certain changes were made in the bill following the hearings, there is nothing to indicate an intent to alter the fundamental purposes of the legislation. The broad proscription against “any... practice... which operates... as a fraud or deceit upon any client or prospective client” remained in the bill from beginning to end. And the Committee Reports indicate a desire to preserve “the personalized character of the services of investment advisers,” and to eliminate conflicts of interest between the investment adviser and the clients as safeguards both to “unsophisticated investors” and to “bona fide investment counsel.” The Investment Advisers Act of 1940 thus reflects a congressional recognition “of the delicate fiduciary nature of an investment advisory relationship,” as well as a congressional intent to eliminate, or at least to expose, all conflicts of interest which might incline an investment adviser— consciously or unconsciously — ;to render advice which was not disinterested. It would defeat the manifest purpose of the Investment Advisers Act of 1940 for us to hold, therefore, that Congress, in empowering the courts to enjoin any practice which operates “as a fraud or deceit,” intended to require proof of intent to injure and actual injury to clients.
This conclusion moreover, is not in derogation of the common law of fraud, as the District Court and the majority of the Court of Appeals suggested. To the contrary, it finds support in the process by which the courts have adapted the common law of fraud to the commercial transactions of our society. It is true that at common law intent and injury have been deemed essential elements in a damage suit between parties to an arm’s-length transaction. But this is not such an action. This is a suit for a preliminary injunction in which the relief sought is, as the dissenting judges below characterized it, the “mild prophylactic,” 306 F. 2d, at 613, of requiring a fiduciary to disclose to his clients, not all his security holdings, but only his dealings in recommended securities just before and after the issuance of his recommendations.
The content of common-law fraud has not remained static as the courts below seem to have assumed. It has varied, for example, with the nature of the relief sought, the relationship between the parties, and the merchandise in issue. It is not necessary in a suit for equitable or prophylactic relief to establish all the elements required in a suit for monetary damages.
“Law had come to regard fraud... as primarily a tort, and hedged about with stringent requirements, the chief of which was a strong moral, or rather immoral element, while equity regarded it, as it had all along regarded it, as a conveniently comprehensive word for the expression of a lapse from the high standard of conscientiousness that it exacted from any party occupying a certain contractual or fiduciary relation towards another party.”
“Fraud has a broader meaning in equity [than at law] and intention to defraud or to misrepresent is not a necessary element.”
“Fraud, indeed, in the sense of a court of equity properly includes all acts, omissions and conceal-ments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another.”
Nor is it necessary in a suit against a fiduciary, which Congress recognized the investment adviser to be, to establish all the elements required in a suit against a party to an arm’s-length transaction. Courts have imposed on a fiduciary an affirmative duty of “utmost good faith, and full and fair disclosure of all material facts,” as well as an affirmative obligation “to employ reasonable care to avoid misleading” his clients. There has also been a growing recognition by common-law courts that the doctrines of fraud and deceit which developed around transactions involving land and other tangible items of wealth are ill-suited to the sale of such intangibles as advice and securities, and that, accordingly, the doctrines must be adapted to the merchandise in issue. The 1909 New York case of Ridgely v. Keene, 134 App. Div. 647, 119 N. Y. Supp. 451, illustrates this continuing development. An investment adviser who, like respondents, published an investment advisory service, agreed, for compensation, to influence his clients to buy shares in a certain security. He did not disclose the agreement to his client but sought “to excuse his conduct by asserting that... he honestly believed, that his subscribers would profit by his advice....” The court, holding that “his belief in the soundness of his advice is wholly immaterial,” declared the act in question “a palpable fraud.”
We cannot assume that Congress, in enacting legislation to prevent fraudulent practices by investment advisers, was unaware of these developments in the common law of fraud. Thus, even if we were to agree with the courts below that Congress had intended, in effect, to codify the common law of fraud in the Investment Advisers. Act of 1940, it would be logical to conclude that Congress codified the common law “remedially” as the courts had adapted it to the prevention of fraudulent securities transactions by fiduciaries, not “technically” as it has traditionally been applied in damage suits between parties to arm’s-length transactions involving land and ordinary chattels.
The foregoing analysis of the judicial treatment of common-law fraud reinforces our conclusion that Congress, in empowering the courts to enjoin any practice which operates “as a fraud or deceit” upon a client, did not intend to require proof of intent to injure and actual injury to the client. Congress intended the Investment Advisers Act of 1940 to be construed like other securities legislation “enacted for the purpose of avoiding frauds,” not technically and restrictively, but flexibly to effectuate its remedial purposes.
II.
We turn now to a consideration of whether the specific conduct here in issue was the type which Congress intended to reach in the Investment Advisers Act of 1940. It is arguable — indeed it was argued by “some investment counsel representatives” who testified before the Commission — that any “trading by investment counselors for their own account in securities in which their clients were interested...” creates a potential conflict of interest which must be eliminated. We need not go that far in this case, since here the Commission seeks only disclosure of a conflict of interests with significantly greater potential for abuse than in the situation described above. An adviser who, like respondents, secretly trades on the market effect of his own recommendation may be motivated — consciously or unconsciously — to recommend a given security not because of its potential for long-run price increase (which would profit the client), but because of its potential for short-run price increase in response to anticipated activity from the recommendation (which would profit the adviser). An investor seeking the advice of a registered investment adviser must, if the legislative purpose is to be served, be permitted to evaluate such overlapping motivations, through appropriate disclosure, in deciding whether an adviser is serving “two masters” or only one, “especially... if one of the masters happens to be economic self-interest.” United States v. Mississippi Valley Co., 364 U. S. 520, 549. Accordingly, we hold that the Investment Advisers Act of 1940 empowers the courts, upon a showing such as that made here, to require an adviser to make full and frank disclosure of his practice of trading on the effect of his recommendations.
III.
Respondents offer three basic arguments against this conclusion. They argue first that Congress could have made, but did not make, failure to disclose material facts unlawful in the Investment Advisers Act of 1940, as it did in the Securities Act of 1933, and that absent specific language, it should not be.assumed that Congress intended to include failure to disclose in its general proscription of any practice which operates as a fraud or deceit. But considering the history and chronology of the statutes, this omission does not seem significant. The Securities Act of 1933 was the first experiment in federal regulation of the securities industry. It was understandable, therefore, for Congress, in declaring certain practices unlawful, to include both a general proscription against fraudulent and deceptive practices and, out of an abundance of caution, a specific proscription against nondisclosure. It soon became clear, however, that the courts, aware of the previously outlined developments in the common law of fraud, were merging the proscription against nondisclosure into the general proscription against fraud, treating the former, in effect, as one variety of the latter. For example, in Securities & Exchange Comm’n v. Torr, 15 F. Supp. 315 (D. C. S. D. N. Y. 1936), rev’d on other grounds, 87 F. 2d 446, Judge Patterson held that suppression of information material to an evaluation of the disinterestedness of investment advice “operated as a deceit on purchasers,” 15 F. Supp., at 317. Later cases also treated nondisclosure as one variety of fraud or deceit. In light of this, and in light of the evident purpose of the Investment Advisers Act of 1940 to substitute a philosophy of disclosure for the philosophy of caveat emptor, we cannot assume that the omission in the 1940 Act of a specific proscription against nondisclosure was intended to limit the application of the antifraud and anti-deceit provisions of the Act so as to render the Commission impotent to enjoin suppression of material facts. The more reasonable assumption, considering what had transpired between 1933 and 1940, is that Congress, in enacting the Investment Advisers Act of 1940 and proscribing any practice which operates “as a fraud or deceit,” deemed a specific proscription against nondisclosure surplusage.
Respondents also argue that the 1960 amendment to the Investment Advisers Act of 1940 justifies a narrow interpretation of the original enactment. The amendment made two significant changes which are relevant here. “Manipulative” practices were added to the list of those specifically proscribed. There is nothing to suggest, however, that with respect to a requirement of disclosure, “manipulative” is any broader than fraudulent or deceptive. Nor is there any indication that by adding the new proscription Congress intended to narrow the scope of the original proscription. The new amendment also authorizes the Commission “by rules and regulations [to] define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.” The legislative history offers no indication, however, that Congress intended such rules to substitute for the “general and flexible” antifraud provisions which have long been considered necessary to control “the versatile inventions of fraud-doers.” Moreover, the intent of Congress must be culled from the events surrounding the passage of the 1940 legislation. “[0] pinions attributed to a Congress twenty years after the event cannot be considered evidence of the intent of the Congress of 1940.” Securities & Exchange Comm’n v. Capital Gains Research Bureau, Inc., 306 F. 2d 606, 615 (dissenting opinion). See United States v. Philadelphia Nat. Bank, 374 U. S. 321, 348-349.
Respondents argue, finally, that their advice was “honest” in the sense that they believed it was sound and did not offer it for the purpose of furthering personal pecuniary objectives. This, of course, is but another way of putting the rejected argument that the elements of technical common-law fraud — particularly intent — must be established before an injunction requiring disclosure may be ordered. It is the practice itself, however, with its potential for abuse, which “operates as a fraud or deceit” within the meaning of the Act when relevant information is suppressed. The Investment Advisers Act of 1940 was “directed not only at dishonor, but also at conduct that tempts dishonor.” United States v. Mississippi Valley Co., 364 U. S. 520, 549. Failure to disclose material facts must be deemed fraud or deceit within its intended meaning, for, as the experience of the 1920’s and 1930’s amply reveals, the darkness and ignorance of commercial secrecy are the conditions upon which predatory practices best thrive. To impose upon the Securities and Exchange Commission the burden of showing deliberate dishonesty as a condition precedent to protecting investors through the prophylaxis of disclosure would effectively nullify the protective purposes of the statute. Reading the Act in light of its background we find no such requirement commanded. Neither the Commission nor the courts should be required “to separate the mental urges,” Peterson v. Greenville, 373 U. S. 244, 248, of an investment adviser, for “[t]he motives of man are too complex... to separate....” Mosser v. Darrow, 341 U. S. 267, 271. The statute, in recognition of the adviser's fiduciary relationship to his clients, requires that his advice be disinterested. To insure this it empowers the courts to require disclosure of material facts. It misconceives the purpose of the statute tó confine its application to “dishonest” as opposed to “honest” motives. As Dean Shul-man said in discussing the nature of securities transactions, what is required is “a picture not simply of the show window, but of the entire store... not simply truth in the statements volunteered, but disclosure.” The high standards of business morality exacted by our laws regulating the securities industry do not permit an investment adviser to trade on the market effect of his own recommendations without fully and fairly revealing his personal interests in these recommendations to his clients.
Experience has shown that disclosure in such situations, while not onerous to the adviser, is needed to preserve the climate of fair dealing which is so essential to maintain public confidence in the securities industry and to preserve the economic health of the country.
The judgment of the Court of Appeals is reversed and the case is remanded to the District Court for proceedings consistent with this opinion.
Reversed and remanded.
Me. Justice Douglas took no part in the consideration or decision of this case.
54 Stat. 847, as amended, 15 U. S. C. § 80b-1 et seq.
54 Stat. 852, as amended, 15 U. S. C. (Supp. IV) § 80b-6, provides in relevant part that:
“It shall be unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly—
“(1) to employ any device, scheme, or artifice to defraud any client or prospective client;
“(2) to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;
“(3) acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this paragraph shall not apply to any transaction with a customer of a broker or dealer if such broker or dealer is not acting as an investment adviser in relation to such transaction....”
54 Stat. 853, as amended, 15 U. S. C. (Supp. IV) § 80b-9, provides in relevant part that:
" (e) Whenever it shall appear to the Commission that any person has engaged, is engaged, or is about to engage in any act or practice constituting a violation of any provision of this subchapter, or of any rule, regulation, or order hereunder, or that any person has aided, abetted, counseled, commanded, induced, or procured, is aiding, abetting, counseling, commanding, inducing, or procuring, or is about to aid, abet, counsel, command, induce, or procure such a violation, it may in its discretion bring ah action in the proper district court of the United States, or the proper United States court of any Territory or other place subject to the jurisdiction of the United States, to enjoin such acts or practices and to enforce compliance with this sub-chapter or any rule, regulation, or order hereunder. Upon a showing that such person has engaged, is engaged, or is about to engage in any such act or practice, or in aiding, abetting, counseling, commanding, inducing, or procuring any such act or practice, a permanent or temporary injunction or decree or restraining order shall be granted without bond.”
See Appendix, infra, p. 202.
The requested injunction reads in full as follows:
“Wherefore the plaintiff demands a temporary restraining order, preliminary injunction and final injunction:
“1. Enjoining the defendants Capital Gains Research Bureau, Inc. and Harry P. Schwarzmann, their agents, servants, employees, attorneys and assigns, and each of them, while the said Capital Gains Research Bureau, Inc. is an investment adviser, directly and indirectly, by the use of the mails or any means or instrumentalities of interstate commerce from:
“(a) Employing any device, scheme or artifice to defraud any client or prospective client by failing to disclose the material facts concerning
“(1) The purchase by defendant, Capital Gains Research Bureau, Inc., of securities within a very short period prior to the distribution of a recommendation by said defendant to its clients and prospective clients for purchase of said securities;
“(2) The intent to sell and the sale of said securities by said defendant so recommended to be purchased within a very short period after distribution of said recommendation to its clients and prospective clients;
“(3) Effecting of short sales by said defendant within a very short period prior to the distribution of a recommendation by said defendant to its clients and prospective clients to dispose of said securities;
"(4) The intent of said defendant to purchase and the purchase of said securities to cover its short sales;
“(5) The purchase by said defendant for its own account of puts and calls for securities within a very short period prior to the distribution of a recommendation to its clients and prospective clients for purchase or disposition of said securities.
“(b) Engaging in any transaction, practice and course of business which operates as a fraud or deceit upon any client or prospective client by failing to disclose the material facts concerning the matters set forth in demand 1 (a) hereof.”
The case was originally heard before a panel of the Court of Appeals, which, with one judge dissenting, affirmed the District Court. 300 F. 2d 745. Rehearing en banc was then ordered.
The Court of Appeals purported to recognize that “federal securities laws are to be construed broadly to effectuate their remedial purpose.” 306 F. 2d 606, 608. But by affirming the District Court’s “technical” construction of the Investment Advisers Act of 1940 and by requiring proof of “misstatements,” unsound advice, bribery, or intent to unload “worthless stock,” the court read the statute, in effect, as confined by traditional common-law concepts of fraud and deceit.
See generally Douglas and Bates, The Federal Securities Act of 1933, 43 Yale L. J. 171 (1933); Loomis, The Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, 28 Geo. Wash. L. Rev. 214 (1959); Shulman, Civil Liability and the Securities Act, 43 Yale L. J. 227 (1933). Cf. Galbraith, The Great Crash (1955).
48 Stat. 74, as amended, 15 U. S. C. § 77a et seq.
48 Stat. 881, as amended, 15 U. S. C. § 78a et seq.
49 Stat. 838, as amended, 15 U. S. C. § 79 et seq.
53 Stat. 1149, as amended, 15 U. S. C. § 77aaa et seq.
54 Stat. 789, as amended, 15 U. S. C. § 80a-1 et seq.
See H. R. Rep. No. 85, 73d Cong., 1st Sess. 2, quoted in Wilko v. Swan, 346 U. S. 427, 430.
49 Stat. 837, 15 U. S. C. §79z-4.
While the study concentrated on investment advisory services which provide personalized counseling to investors, see Investment Trusts and Investment Companies, Report of the Securities and Exchange Commission, Pursuant to Section 30 of the Public Utility Holding Company Act of 1935, on Investment Counsel, Investment Management, Investment Supervisory, and Investment Advisory Services, H. R. Doc. No. 477, 76th Cong., 2d Sess., 1 (hereinafter cited as SEC Report) the Senate Committee on Banking and Currency did receive communications from publishers of investment advisory services, see, e. g., Hearings on S. 3580 before Subcommittee of the Senate Committee on Banking and Currency, 76th Cong., 3d Sess., pt. 3 (Exhibits), 1063, and the Act specifically covers “any person who, for compensation, engages in the business of advising others, either directly or through publication or writings... 54 Stat. 847, 15 U. S. C. § 80b-2.
SEC Report, at 28.
Id., at 29.
Id., at 24.
Ibid.
Ibid.
Id., at 66-67.
Id., at 66.
Id., at 65.
Id., at 67.
Id., at 29.
Id., at 66.
Id., at 29-30. (Emphasis added.)
See text accompanying note 14, supra.
S. 3580, 76th Cong., 3d Sess.
Hearings on S. 3580 before Subcommittee of the Senate Committee on Banking and Currency, 76th Cong., 3d Sess. (hereinafter cited as Senate Hearings). Hearings on H. R. 10065 before Subcommittee of the House Committee on Interstate and Foreign Commerce, 76th Cong., 3d Sess. (hereinafter cited as House Hearings).
Senate Hearings, at 719.
Id., at 716.
Id., at 724.
The bill as enacted did not contain a section attributing specific abuses to the investment adviser profession. This section was eliminated apparently at the urging of the investment advisers who, while not denying that abuses had occurred, attributed them to certain fringe elements in the profession. They feared that a public and general indictment of all investment advisers by Congress would do irreparable harm to their fledgling profession. See, e. g., Senate Hearings, at 715-716. It cannot be inferred, therefore, that the section was eliminated because Congress had concluded that the abuses had not occurred, or because Congress did not desire to prevent their repetition in the future. The more logical inference, considering the legislative background of the Act, is that the section was omitted to avoid condemning an entire profession (which depends for its success on continued public confidence) for the acts of a few.
H. R. Rep. No. 2639, 76th Cong., 3d Sess. 28 (hereinafter cited as House Report). See also S. Rep. No. 1775, 76th Cong., 3d Sess. 22 (hereinafter cited as Senate Report).
See Senate Report, at 22.
Id., at 21.
2 Loss, Securities Regulation (2d ed. 1961), 1412.
See cases cited in 37 C. J. S., Fraud (1943), 210.
Even in a damage suit between parties to an arm’s-length transaction, the intent which must be established need not be an intent to cause injury to the client, as the courts below seem to have assumed. “It is to be noted that it is not necessary that the person making the misrepresentations intend to cause loss to thé other or gain a profit for himself; it is only necessary that he intend action in reliance on the truth of his misrepresentations.” 1 Harper and James, The Law of Torts (1956), 531. “[T]he fact that the defendant was disinterested, that he had the best of motives, and that he thought he was doing the plaintiff a kindness, will not absolve him from liability so long as he did in fact intend to mislead." Prosser, Law of Torts (1955), 538. See 3 Restatement, Torts (1938), §531, Comment b, illustration 3. It is clear that respondents' failure to disclose the practice here in issue was purposeful, and that they intended that action be taken in reliance on the claimed disinterestedness of the service and its exclusive concern for the clients’ interests.
Neither is this a criminal proceeding for “willfully” violating the Act, 54 Stat.
Question: What is the issue area of the decision?
A. Criminal Procedure
B. Civil Rights
C. First Amendment
D. Due Process
E. Privacy
F. Attorneys
G. Unions
H. Economic Activity
I. Judicial Power
J. Federalism
K. Interstate Relations
L. Federal Taxation
M. Miscellaneous
N. Private Action
Answer:
|
songer_weightev
|
D
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?" This includes discussions of whether the litigant met the burden of proof. Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
Dino IACAPONI, Appellant, v. NEW AMSTERDAM CASUALTY COMPANY, a Corporation.
No. 16259.
United States Court of Appeals Third Circuit.
Submitted March 29, 1967.
Decided June 23, 1967.
Harry Alan Sherman, Pittsburgh, Pa., for appellant.
William C. Walker, Pittsburgh, Pa. (Dickie, McCamey & Chilcote, Pittsburgh, Pa., on the brief), for appellee.
Before HASTIE and SEITZ, Circuit Judges and BODY, District Judge.
OPINION OF THE COURT
PER CURIAM.
The appellant, plaintiff below, was seriously injured in an industrial accident. The appellee, as insurer of the appellant’s purported employer, induced the appellant to sign a “workmen’s compensation agreement” which subsequently defeated appellant’s effort to recover as an “independent contractor” in a negligence action he brought against his purported employer in a state court. Alleging that the insurance company induced him to sign the “workmen’s compensation agreement” by fraud, the appellant has brought this diversity action against the insurance company for damages.
The present complaint asserts, among other things, that in the state negligence action the plaintiff raised the issue of fraud in obtaining the “workmen’s compensation agreement”, but was ultimately denied recovery. Indeed, the present complaint alleges that he “has exhausted the state judicial remedies to set aside the default judgment based upon the fraudulent ‘workmen’s compensation agreement’, without relief therefrom”.
The appellee moved to dismiss the present complaint upon several grounds, among them that the state court’s rejection of the claim of fraud made the matter res judicata. Under Rule 8(c), Federal Rules of Civil Procedure, res judicata is an affirmative defense, to be pleaded as such. However, in this case the fact that the fraud upon which this suit is based had been litigated in the state court appears on the face of the complaint. Moreover, neither in the state court nor in the court below does it appear that the plaintiff made an issue of the manner in which the res judicata issue had been raised. Rather, he undertook to contest it on its merits and lost.
The court below took judicial notice of the state proceedings and stated that its “examination of the Opinion of that [Common Pleas] Court shows that the Court considered these allegations and the evidence in support of them thoroughly and found that there was * * * no evidence that he was the victim of fraud.” Similarly, in affirming that judgment the Supreme Court of Pennsylvania said that the court below had “found, in essence, that there was no clear evidence that appellant was * * * the victim of fraud”. Iacoponi v. Plisko, 1965, 419 Pa. 398, 399, 214 A.2d 504, 505. We are satisfied, as was the district court, that the merits of the fraud claim were fully presented before the state courts and resulted in an adverse decision.
It is true that the defendant in the state court was not the present defendant, but its insured. However, as the court below properly pointed out:
“ * * * The present defendant is the insurer for the defendant in the State Court action, both for liability and for Workmen’s Compensation coverage. Its agents secured the execution of the Workmen’s Compensation Agreement on behalf of the employer, the defendant in the Court below. Its counsel appeared for the defendants in the trespass action in the State Court. All of these facts are alleged in plaintiff’s present complaint.”
We agree with the district court that these circumstances show such privity between the present defendant and the state court defendant that the litigated issue of fraud is res judicata as to both. The insurance company would have been liable for any sum recovered in the state action and its counsel actually defended the action.
In the circumstances of this case we are satisfied that it was not reversible error to decide the question of res judi-cata on motion to dismiss and that on its merits the decision was correct.
The judgment will be affirmed.
Question: Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
sc_respondent
|
040
|
What follows is an opinion from the Supreme Court of the United States. Your task is to identify the respondent of the case. The respondent is the party being sued or tried and is also known as the appellee. Characterize the respondent as the Court's opinion identifies them.
Identify the respondent by the label given to the party in the opinion or judgment of the Court except where the Reports title a party as the "United States" or as a named state. Textual identification of parties is typically provided prior to Part I of the Court's opinion. The official syllabus, the summary that appears on the title page of the case, may be consulted as well. In describing the parties, the Court employs terminology that places them in the context of the specific lawsuit in which they are involved. For example, "employer" rather than "business" in a suit by an employee; as a "minority," "female," or "minority female" employee rather than "employee" in a suit alleging discrimination by an employer.
Also note that the Court's characterization of the parties applies whether the respondent is actually single entitiy or whether many other persons or legal entities have associated themselves with the lawsuit. That is, the presence of the phrase, et al., following the name of a party does not preclude the Court from characterizing that party as though it were a single entity. Thus, identify a single respondent, regardless of how many legal entities were actually involved. If a state (or one of its subdivisions) is a party, note only that a state is a party, not the state's name.
UNITED STATES v. KNIGHT.
No. 406.
Argued March 4, 1949.
Decided April 4, 1949.
Philip R. Monahan argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney General Campbell and Robert S. Erdahl.
Robert T. McCracken argued the cause for respondent. With him on the brief were George G. Chandler and J. Julius Levy.
Mr. Justice Douglas
delivered the opinion of the Court.
Robert Michael was trustee in bankruptcy of the Central Forging Co. and Donald Reifsnyder was his counsel. Maxi Manufacturing Co. was a competitor of Central and one of its creditors. George Fenner and respondent Harry S. Knight were attorneys for Maxi. After negotiations which it is unnecessary to relate here, a plan of reorganization under ch. X of the Bankruptcy Act, 52 Stat. 883, 11 U. S. C. § 501 et seq., was approved by the court and accepted by more than two-thirds of the creditors. Under this plan Maxi was to acquire all the assets of Central; the stockholders of Central were to receive nothing; the secured creditors of Central were to receive 20 per cent and its unsecured creditors 5 per cent of their claims in bonds of Maxi; and all taxes, costs, and expenses of the reorganization were to be paid in full in cash by the trustee. The cash requirements of the plan were to be furnished by Maxi.
The amount of those requirements and the nature of Maxi’s commitment are sources of the present controversy. Michael and Reifsnyder concededly obtained funds in connection with the reorganization for which they did not account. It is the theory of the prosecution that those funds were part of the bankruptcy estate. It is the theory of the defense that they were gifts by Maxi of its own property.
There was evidence (including Michael’s testimony in this case and one construction of respondent’s testimony concerning the same transactions in an earlier contempt case against Michael) that Maxi agreed to pay $26,404.33 in cash for Central’s net current assets in addition to the $17,000 in bonds. If this version of the transaction were believed, there was a scheme to value the assets of Central at $3,000 less than $26,404.33 and to divert the $3,000 to Michael’s and Reifsnyder’s own ends.
There was another version of this phase of the plan which is also supported by evidence, viz. that Maxi was to pay in cash all expenses of the reorganization provided they did not exceed $26,404.33. In this view the difference between $26,404.33 and the expenses allowed by the Court, $23,404.33, was Maxi’s to do with as it pleased.
The court confirmed the plan and ordered the transfer of all of Central’s assets to Maxi on receipt of the bonds and on payment of the costs and expenses as allowed by the court, “within the limits of the funds as set forth in the Trustee’s report filed April 15, 1942.” That report listed the net current assets of Central at $23,404.33. There was some evidence that the value of those assets had been falsified in the report by deducting $3,000 from the accounts receivable.
The expenses approved by the court and paid by Maxi included allowances for the fees and expenses of Michael and Reifsnyder. Knight arranged for Maxi also to draw a check for $3,000 to Fenner which Fenner cashed and, after deducting $500 for income tax, paid over to Michael and Reifsnyder who never accounted to the court for it.
Knight and Fenner were indicted for aiding and abetting Michael to appropriate property of the bankruptcy estate in violation of the Bankruptcy Act, 30 Stat. 554, as amended, 11 U. S. C. § 52 (a), and for conspiring with Michael and others to do the same. Knight and Fenner were found guilty by a jury on all counts. Knight was fined $1,000. The Court of Appeals reversed his conviction and directed entry of a judgment of acquittal, one judge dissenting. 169 F. 2d 1001. The case is here on a petition for certiorari which we granted because of the importance of the ruling in the administration of the Bankruptcy Act.
There was substantial evidence that Maxi agreed to pay $26,404.33 for the net current assets of Central and that Knight was party to a scheme to divert $3,000 of that consideration to the personal ends of Michael and Reifsnyder. It was therefore an improper interference with the jury’s function for the Court of Appeals to reject that theory of the case and to accept one which to it seemed more credible. See Glasser v. United States, 315 U. S. 60, 80; Kotteakos v. United States, 328 U. S. 750, 763-764.
But even if, as the defense urges, Maxi only agreed to pay expenses up to $26,404.33, the result is the same. Maxi in fact paid that amount. It was paid in connection with the reorganization. It was paid for services allegedly rendered by Michael and Reifsnyder in the proceedings. It was paid secretly and in a devious way. The assets of the estate which were transferred to Maxi were worth $26,404.33. This is a substantial showing that $26,404.33 was in fact paid for the assets and that the form of the arrangement served only to syphon a part of the consideration to Michael and Reifsnyder without court approval.
All the consideration which is paid for a bankrupt’s assets becomes part of the estate. No device or arrangement, however subtle, can subtract or divert any of it. It is the substance of the transaction, not its form, which controls. If that requirement were not rigidly enforced, control of the plan of reorganization and control of allowances would pass from the court to the parties. That would subvert the statutory scheme.
This consequence is sought to be avoided here by the argument that when the $3,000 was diverted to Michael and Reifsnyder, the rights of creditors and stockholders in the estate had been fixed and all the allowances had been determined. It is therefore said that there would have been no rightful claimants to the money had it been paid into court. By that procedure parties would arrogate to themselves the control over the estate which Congress has entrusted to the bankruptcy judge.
Reversed.
Mr. Justice Murphy, Mr. Justice Jackson, and Mr. Justice Rutledge took no part in the consideration or decision of this case.
“A person shall be punished by imprisonment for a period of not to exceed five years or by a fine of not more than $5,000, or both, upon conviction of the offense of having knowingly and fraudulently appropriated to his own use, embezzled, spent, or unlawfully transferred any property or secreted or destroyed any document belonging to the estate of a bankrupt which came into his charge as trustee, receiver, custodian, marshal, or other officer of the court.”
Even after confirmation of the plan of reorganization under § 221 of ch. X, it may be altered or modified pursuant to the procedure prescribed in § 222.
See §§ 241-244 of ch. X; Leiman v. Guttman, 336 U. S. 1.
See note 2, supra.
Question: Who is the respondent of the case?
001. attorney general of the United States, or his office
002. specified state board or department of education
003. city, town, township, village, or borough government or governmental unit
004. state commission, board, committee, or authority
005. county government or county governmental unit, except school district
006. court or judicial district
007. state department or agency
008. governmental employee or job applicant
009. female governmental employee or job applicant
010. minority governmental employee or job applicant
011. minority female governmental employee or job applicant
012. not listed among agencies in the first Administrative Action variable
013. retired or former governmental employee
014. U.S. House of Representatives
015. interstate compact
016. judge
017. state legislature, house, or committee
018. local governmental unit other than a county, city, town, township, village, or borough
019. governmental official, or an official of an agency established under an interstate compact
020. state or U.S. supreme court
021. local school district or board of education
022. U.S. Senate
023. U.S. senator
024. foreign nation or instrumentality
025. state or local governmental taxpayer, or executor of the estate of
026. state college or university
027. United States
028. State
029. person accused, indicted, or suspected of crime
030. advertising business or agency
031. agent, fiduciary, trustee, or executor
032. airplane manufacturer, or manufacturer of parts of airplanes
033. airline
034. distributor, importer, or exporter of alcoholic beverages
035. alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked
036. American Medical Association
037. National Railroad Passenger Corp.
038. amusement establishment, or recreational facility
039. arrested person, or pretrial detainee
040. attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association
041. author, copyright holder
042. bank, savings and loan, credit union, investment company
043. bankrupt person or business, or business in reorganization
044. establishment serving liquor by the glass, or package liquor store
045. water transportation, stevedore
046. bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines
047. brewery, distillery
048. broker, stock exchange, investment or securities firm
049. construction industry
050. bus or motorized passenger transportation vehicle
051. business, corporation
052. buyer, purchaser
053. cable TV
054. car dealer
055. person convicted of crime
056. tangible property, other than real estate, including contraband
057. chemical company
058. child, children, including adopted or illegitimate
059. religious organization, institution, or person
060. private club or facility
061. coal company or coal mine operator
062. computer business or manufacturer, hardware or software
063. consumer, consumer organization
064. creditor, including institution appearing as such; e.g., a finance company
065. person allegedly criminally insane or mentally incompetent to stand trial
066. defendant
067. debtor
068. real estate developer
069. disabled person or disability benefit claimant
070. distributor
071. person subject to selective service, including conscientious objector
072. drug manufacturer
073. druggist, pharmacist, pharmacy
074. employee, or job applicant, including beneficiaries of
075. employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan
076. electric equipment manufacturer
077. electric or hydroelectric power utility, power cooperative, or gas and electric company
078. eleemosynary institution or person
079. environmental organization
080. employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer.
081. farmer, farm worker, or farm organization
082. father
083. female employee or job applicant
084. female
085. movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of
086. fisherman or fishing company
087. food, meat packing, or processing company, stockyard
088. foreign (non-American) nongovernmental entity
089. franchiser
090. franchisee
091. lesbian, gay, bisexual, transexual person or organization
092. person who guarantees another's obligations
093. handicapped individual, or organization of devoted to
094. health organization or person, nursing home, medical clinic or laboratory, chiropractor
095. heir, or beneficiary, or person so claiming to be
096. hospital, medical center
097. husband, or ex-husband
098. involuntarily committed mental patient
099. Indian, including Indian tribe or nation
100. insurance company, or surety
101. inventor, patent assigner, trademark owner or holder
102. investor
103. injured person or legal entity, nonphysically and non-employment related
104. juvenile
105. government contractor
106. holder of a license or permit, or applicant therefor
107. magazine
108. male
109. medical or Medicaid claimant
110. medical supply or manufacturing co.
111. racial or ethnic minority employee or job applicant
112. minority female employee or job applicant
113. manufacturer
114. management, executive officer, or director, of business entity
115. military personnel, or dependent of, including reservist
116. mining company or miner, excluding coal, oil, or pipeline company
117. mother
118. auto manufacturer
119. newspaper, newsletter, journal of opinion, news service
120. radio and television network, except cable tv
121. nonprofit organization or business
122. nonresident
123. nuclear power plant or facility
124. owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels
125. shareholders to whom a tender offer is made
126. tender offer
127. oil company, or natural gas producer
128. elderly person, or organization dedicated to the elderly
129. out of state noncriminal defendant
130. political action committee
131. parent or parents
132. parking lot or service
133. patient of a health professional
134. telephone, telecommunications, or telegraph company
135. physician, MD or DO, dentist, or medical society
136. public interest organization
137. physically injured person, including wrongful death, who is not an employee
138. pipe line company
139. package, luggage, container
140. political candidate, activist, committee, party, party member, organization, or elected official
141. indigent, needy, welfare recipient
142. indigent defendant
143. private person
144. prisoner, inmate of penal institution
145. professional organization, business, or person
146. probationer, or parolee
147. protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer
148. public utility
149. publisher, publishing company
150. radio station
151. racial or ethnic minority
152. person or organization protesting racial or ethnic segregation or discrimination
153. racial or ethnic minority student or applicant for admission to an educational institution
154. realtor
155. journalist, columnist, member of the news media
156. resident
157. restaurant, food vendor
158. retarded person, or mental incompetent
159. retired or former employee
160. railroad
161. private school, college, or university
162. seller or vendor
163. shipper, including importer and exporter
164. shopping center, mall
165. spouse, or former spouse
166. stockholder, shareholder, or bondholder
167. retail business or outlet
168. student, or applicant for admission to an educational institution
169. taxpayer or executor of taxpayer's estate, federal only
170. tenant or lessee
171. theater, studio
172. forest products, lumber, or logging company
173. person traveling or wishing to travel abroad, or overseas travel agent
174. trucking company, or motor carrier
175. television station
176. union member
177. unemployed person or unemployment compensation applicant or claimant
178. union, labor organization, or official of
179. veteran
180. voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL)
181. wholesale trade
182. wife, or ex-wife
183. witness, or person under subpoena
184. network
185. slave
186. slave-owner
187. bank of the united states
188. timber company
189. u.s. job applicants or employees
190. Army and Air Force Exchange Service
191. Atomic Energy Commission
192. Secretary or administrative unit or personnel of the U.S. Air Force
193. Department or Secretary of Agriculture
194. Alien Property Custodian
195. Secretary or administrative unit or personnel of the U.S. Army
196. Board of Immigration Appeals
197. Bureau of Indian Affairs
198. Bonneville Power Administration
199. Benefits Review Board
200. Civil Aeronautics Board
201. Bureau of the Census
202. Central Intelligence Agency
203. Commodity Futures Trading Commission
204. Department or Secretary of Commerce
205. Comptroller of Currency
206. Consumer Product Safety Commission
207. Civil Rights Commission
208. Civil Service Commission, U.S.
209. Customs Service or Commissioner of Customs
210. Defense Base Closure and REalignment Commission
211. Drug Enforcement Agency
212. Department or Secretary of Defense (and Department or Secretary of War)
213. Department or Secretary of Energy
214. Department or Secretary of the Interior
215. Department of Justice or Attorney General
216. Department or Secretary of State
217. Department or Secretary of Transportation
218. Department or Secretary of Education
219. U.S. Employees' Compensation Commission, or Commissioner
220. Equal Employment Opportunity Commission
221. Environmental Protection Agency or Administrator
222. Federal Aviation Agency or Administration
223. Federal Bureau of Investigation or Director
224. Federal Bureau of Prisons
225. Farm Credit Administration
226. Federal Communications Commission (including a predecessor, Federal Radio Commission)
227. Federal Credit Union Administration
228. Food and Drug Administration
229. Federal Deposit Insurance Corporation
230. Federal Energy Administration
231. Federal Election Commission
232. Federal Energy Regulatory Commission
233. Federal Housing Administration
234. Federal Home Loan Bank Board
235. Federal Labor Relations Authority
236. Federal Maritime Board
237. Federal Maritime Commission
238. Farmers Home Administration
239. Federal Parole Board
240. Federal Power Commission
241. Federal Railroad Administration
242. Federal Reserve Board of Governors
243. Federal Reserve System
244. Federal Savings and Loan Insurance Corporation
245. Federal Trade Commission
246. Federal Works Administration, or Administrator
247. General Accounting Office
248. Comptroller General
249. General Services Administration
250. Department or Secretary of Health, Education and Welfare
251. Department or Secretary of Health and Human Services
252. Department or Secretary of Housing and Urban Development
253. Interstate Commerce Commission
254. Indian Claims Commission
255. Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement
256. Internal Revenue Service, Collector, Commissioner, or District Director of
257. Information Security Oversight Office
258. Department or Secretary of Labor
259. Loyalty Review Board
260. Legal Services Corporation
261. Merit Systems Protection Board
262. Multistate Tax Commission
263. National Aeronautics and Space Administration
264. Secretary or administrative unit of the U.S. Navy
265. National Credit Union Administration
266. National Endowment for the Arts
267. National Enforcement Commission
268. National Highway Traffic Safety Administration
269. National Labor Relations Board, or regional office or officer
270. National Mediation Board
271. National Railroad Adjustment Board
272. Nuclear Regulatory Commission
273. National Security Agency
274. Office of Economic Opportunity
275. Office of Management and Budget
276. Office of Price Administration, or Price Administrator
277. Office of Personnel Management
278. Occupational Safety and Health Administration
279. Occupational Safety and Health Review Commission
280. Office of Workers' Compensation Programs
281. Patent Office, or Commissioner of, or Board of Appeals of
282. Pay Board (established under the Economic Stabilization Act of 1970)
283. Pension Benefit Guaranty Corporation
284. U.S. Public Health Service
285. Postal Rate Commission
286. Provider Reimbursement Review Board
287. Renegotiation Board
288. Railroad Adjustment Board
289. Railroad Retirement Board
290. Subversive Activities Control Board
291. Small Business Administration
292. Securities and Exchange Commission
293. Social Security Administration or Commissioner
294. Selective Service System
295. Department or Secretary of the Treasury
296. Tennessee Valley Authority
297. United States Forest Service
298. United States Parole Commission
299. Postal Service and Post Office, or Postmaster General, or Postmaster
300. United States Sentencing Commission
301. Veterans' Administration
302. War Production Board
303. Wage Stabilization Board
304. General Land Office of Commissioners
305. Transportation Security Administration
306. Surface Transportation Board
307. U.S. Shipping Board Emergency Fleet Corp.
308. Reconstruction Finance Corp.
309. Department or Secretary of Homeland Security
310. Unidentifiable
311. International Entity
Answer:
|
songer_summary
|
D
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the court's ruling on the appropriateness of summary judgment or the denial of summary judgment favor the appellant?" Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
In re McMILLAN, RAPP & CO.
Nos. 7720-7723.
Circuit Court of Appeals, Third Circuit
Nov. 3, 1941.
David F. Maxwell, of Philadelphia, Pa. (George B. Clothier, Leon J. Obermayer, and Edmonds, Obermayer & Rebmann, all of Philadelphia, Pa., on the brief), for appellant.
Roland C. Heisler, of Philadelphia, Pa. (Drinker, Biddle & Reath, of Philadelphia, Pa., on the brief), for appellees Leaver and Weiss.
Francis F. Burch, of Philadelphia, Pa. (George O. Philips, of Philadelphia, Pa., on. the brief), for appellee Thomas.
Paul Freeman, of Philadelphia, Pa. (Freeman, Fox & Steeble, of Philadelphia, Pa., on the brief), for appellee Freeman.
Before CLARK, JONES, and GOODRICH, Circuit Judges.
JONES, Circuit Judge.
The trustee of McMillan, Rapp & Company, bankrupt, appeals from four separate decrees of the District Court awarding to each of four customers of the bankrupt reclamation of securities which they had severally purchased through the bankrupt but which remained in the bankrupt’s possession at the date of bankruptcy.
In so far as the facts are legally significant, they are substantially the same with respect to the claims of three of the customers, viz., Leaver (No. 7720), Weiss (No. 7721) and Thomas (No. 7722). Moreover, the factual differences, which will be noted, with respect to the claim of the fourth customer, Freeman (No. 7723), do not seem to distinguish his claim from the others.
McMillan, Rapp & Company, a corporation, was adjudicated bankrupt on February 20, 1940, upon a voluntary petition. The company had been engaged in the investment business in Philadelphia and in some instances had acted as a stockbroker. Among the assets found by the trustee in the bankrupt’s possession were various certificates, in the name of one or another of the four claimants, for stock which they had severally purchased through the bankrupt, and had paid for in full, either with stock subscription warrants and cash or entirely with cash, all within four months of the date of bankruptcy and while the bankrupt was insolvent.
In the cases of Leaver, Weiss and Thomas, the stock certificates in their respective names were in separate envelopes each bearing the name of the particular owner of the enclosed shares and were so deposited in the bankrupt’s safe deposit box, where they remained until the date of bankruptcy. None of these certificates, nor the certificates in Freeman’s name which also remained in the bankrupt’s possession, had been endorsed nor were they accompanied by any stock transfer power. In each instance (except for some bank stock purchased by Weiss) the bankrupt first accepted delivery of the purchased stock in a street name and thereafter sent the certificates in the street name to the transfer agent for transfer to the particular customers. In the case of Freeman, his purchase of the stock to which he lays claim was begun on margin but, prior to the bankruptcy, he had paid his debit balance in full and had demanded the certificates for his stock which were transferred to his name but were not delivered by the bankrupt which retained possession thereof. None of the claimants was indebted to the bankrupt.
The principal question here involved is whether the claimants made out a case for reclamation within the requirements of Section 60, sub. e of the Bankruptcy Act, as amended.
There is an incidental question which was raised below as to whether the bankrupt was a stockbroker. The referee found that it was. Upon that finding depends the applicability of Section 60, sub. e. The District Court, upon a review, approved the referee’s finding in such regard and, in so doing, we think acted properly. Notwithstanding the bankrupt had generally conducted an investment business and, consequently, had ordinarily acted as principal and not as agent, it is plain that, in respect of the stock purchases involved in the present appeals, the bankrupt acted as broker or agent for these claimants. It follows, as a matter of law, that the instant claims are subject to the provisions of Section 60, sub. e. Do they satisfy the statutory requirements ?
Paragraph (2) of Section 60, sub. e provides that “All property at any time received, acquired, or held by a stockbroker from or for the account of customers, except cash customers who ar,e able to identify specifically their property in the manner prescribed, in paragraph (4) of this subdivision and the proceeds of all customers’ property rightfully transferred or unlawfully converted by the stockbroker, shall constitute a single and separate fund; and all customers except such cash customers shall constitute a single and separate class of creditors, entitled to share ratably in such fund on the basis of their respective net equities as of the date of bankruptcy: * * (Emphasis supplied.)
“Cash customers” are defined by paragraph (1) of Section 60, sub. e as being “customers entitled to immediate possession of such securities without the payment of any sum to the stockbroker.” Under this definition the present claimants were cash customers. They had fully paid for their stock purchases and were not otherwise indebted to the bankrupt.
As to the manner of identifying specifically the property of cash customers, paragraph (4) of Section 60, sub. e, stripped of ' matter not presently applicable, provides that “ * * * no securities * * * received by a stockbroker * * * for the account of a cash customer * * * pursuant to purchase * * * shall * * * be deemed to be specifically identified, unless such property remained in its identical form in the stockbroker’s possession until the date of bankruptcy, * * (Emphasis supplied.) An alternate means of identifying property is also prescribed but is not presently important; as it is unavailable to these claimants under the attending circumstances. All of the stock involved in the pending cases was purchased by the stockbroker for the claimants’ accounts within four months of the bankruptcy and while the stockbroker was insolvent.
The question, therefore, is whether . the stock received by the stockbroker for the respective accounts of these ,cqsh customers pursuant to purchase- remained “in its identical form in the stockbroker’s possession until the date of bankruptcy.” The learned court below held that it did and, with that conclusion, we agree. The referee, who had held to the contrary, treated the cash and stock subscription warrants which the customers had transferred to the stockbroker in payment of their purchases as being the property which had to remain in its identical form in order that the customers might be able to reclaim it after bankruptcy under the relevant clause of paragraph (4). Such a construction ignores the provision of paragraph (4) which makes it applicable to “securities * * * received by a stockbroker * * * for the account of a cash customer * * * pursuant to purchase.” Patently, this does not contemplate that the securities so received by the stockbroker shall be the property which the purchasers deposited or paid for their purchases. In the very nature of the transaction, a customer’s ownership of the new securities does not arise until they are received by the stockbroker for the customer’s account pursuant to the authorized purchase. The trustee, presumably perceiving the evident error in the referee’s construction, now argues that the securities which the stockbroker received for the accounts of the present claimants pursuant to purchase were the certificates in street name, whereof the stockbroker first accepted delivery, and which, admittedly, did not remain in their identical form in the stockbroker’s possession until the date of bankruptcy. But, the transfer of the certificates out of street name into the names of the purchasers was but a step in the purchase pursuant to which the stockbroker ultimately received the certificates in the purchasers’ names for their accounts.
We conclude therefore that where, prior to a stockbroker’s bankruptcy, a customer purchases securities through the broker for cash or its equivalent in the ordinary course of business and the broker receives, pursuant to the purchase for the customer’s account, stock certificates in the name of the purchaser which remain in their identical form in the broker’s possession until the date of bankruptcy, the customer, if he is not indebted to the broker, may thereafter claim the stock as his own free and unencumbered property. This rule obtains regardless of how long before the stockbroker’s bankruptcy the transaction took place and regardless oí the broker’s current insolvency so long as there is no question of the creation of a preference which is otherwise taken care of by Section 60, sub. e and as to which both the period before bankruptcy and the broker’s insolvency are material. We believe that the construction which we thus place upon paragraph (4) is what the plain words of the statute reasonably require and that, so construed, the provision effectuates the evident intent of Congress.
Section 60, sub. e is new, having been introduced into the bankruptcy law by the Chandler Act. So far as we are advised, paragraph (4) has not heretofore been judicially construed except by the District Court in the instant cases. Clearly, the purpose of the provision was to correct a very definite and well-recognized situation. Prior to the enactment of Section 60, sub. e, inequalities had developed in the distribution of a stockbroker’s estate in bankruptcy due to the fact that some purchasers of stock on margin or depositors of stock or other property were able to lift their stocks or property from the possession of the bankrupt’s estate upon paying any debit balances due by them, while others were left with nothing more than claims as general creditors of the bankrupt because there was insufficient stock of a particular kind in the estate or none at all to allocate to their accounts. So that, although two customers stood in the same relation to the stockbroker as the owners of stock acquired or held for them subject to debit balances, one was able, upon the stockbroker's bankruptcy, to obtain preferential treatment over the other depending upon the mere accident of circumstance.
This inequality among claimants of the same status had long been noted and the need for its correction had been the subject of considered comment. It was to remedy this inequity that Congress inserted Section 60, sub. e into the bankruptcy law with the enactment of the Chandler Act. The effect of Section 60, sub. e was to place all margin customers of a stockbroker in a single and separate class whose participation in the distribution of the stockbroker’s estate in bankruptcy is limited to the single and separate fund composed of the proceeds of such customer’s property, rightfully transferred or unlawfully converted by the stockbroker, and in which fund such customers share ratably according to their respective net equities as of the date of bankruptcy. Cash customers whose property had likewise been transferred or converted by the stockbroker are subject to the same provision unless the property (received by the stockbroker from them for sale, etc., or for them pursuant to purchase) remains in its identical form, as so received, until the date of bankruptcy or unless such property or any substitutes therefor or proceeds thereof were, more than four months prior to bankruptcy or while the stockbroker was solvent, allocated to or physically set aside for such customers and so remained to the date of bankruptcy.
The differentiation in the instances above noted between cash customers owning property identifiable in the broker’s hands and margin customers is "quite understandable. It is one thing for Congress in the exercise of its constitutional power respecting bankruptcies to promote equality among claimants of the same standing, but it would be quite a different thing for Congress to defeat arbitrarily an independent property right by appropriating the ascertainable and unpledged property of one person for the augmentation of the bankrupt estate of another, merely because the former’s property happened to be found in the possession of the latter. Cf. Gorman v. Littlefield, 229 U.S. 19, 25, 33 S.Ct. 690, 57 L.Ed. 1047. But this, Congress has neither done nor attempted when Section 60, sub. e is construed as we have hereinbefore construed it.
What we have already said applies equally to the claim of Freeman. He was likewise a cash customer prior to the broker’s bankruptcy. Whether the transfer to Freeman of the shares which he had purchased and had fully paid for was the creation of an intended preference is a matter to be raised under other relevant provisions of the Bankruptcy Act as allowed for by paragraph (5) of Section 60, sub. e. As in the case of the other three claimants, Freeman is also entitled to reclaim.
The decrees of the District Court at Nos. 7720, 7721, 7722 and 7723 are affirmed at the costs of the bankrupt estate.
Act of June 22, 1938, c. 575 § 1, 52 Stat. 869, 11 TJ.S.C.A. § 96, Pht.Supp. pp. 168, 169.
Stocks being considered fungible property, a customer’s claim against a bankrupt stockbroker for a certain number of shares of a particular stock has been traceable merely from the fact that the broker had in Ms possession at the time of bankruptcy a sufficient number of shares of the same kind of stock even though the certificates for the stock acquired or held by the broker for the customer’s account had been otherwise disposed of or pledged by the broker. Gorman v. Littlefield, 229 U.S 19, 24, 25, 33 S.Ct. 690, 57 L.Ed. 1047; Richardson v. Shaw, 209 U.S. 365, 379, 28 S.Ct. 512, 52 L.Ed. 835, 14 Ann.Cas. 981; Lavien v. Norman, 1 Cir., 55 F.2d 91, 96. This rule was the the consequence of the generally prevailing rule of property that title to stocks purchased or held by a broker for the account of a customer is in the customer, the broker being merely a pledgee thereof as security for the payment of the customer’s debt to the broker. Richardson v. Shaw, supra. And in Massachusetts, where it has been held that title to such stock remains in the broker subject to Ms executory contract to deliver the stock to the customer upon the latter’s payment of the purchase price in full (Wood v. Hayes, 15 Gray 375), the bankruptcy of the broker has been deemed to work a demand and tender by the customer wherefore title to the stock so acquired or held by the broker vests in the customer who can then obtain possession thereof from the trustee in bankruptcy by paying his debit balance. Leonard v. Hunt, 1 Cir., 36 F.2d 13, 15; In re Swift, 1 Cir., 112 F. 315, 318, 319.
E. g., Margin Stocks, 35 Harvard Law Review (1922) 485, 489; The Rights of a Customer in Collateral Security Given a Stockbroker, 22 Columbia Law Review (1922) 155, 158; Rights and Obligations of Customers in Stockbrokerago Bankruptcies, 37 Harvard Law Review (1924) 860, 879.
See Report of House Judiciary Committee, 75th Congress, 1st Sess.Rep. No. 1409 at p. 31.
Question: Did the court's ruling on the appropriateness of summary judgment or the denial of summary judgment favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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songer_appel1_7_5
|
A
|
What follows is an opinion from a United States Court of Appeals.
Intervenors who participated as parties at the courts of appeals should be counted as either appellants or respondents when it can be determined whose position they supported. For example, if there were two plaintiffs who lost in district court, appealed, and were joined by four intervenors who also asked the court of appeals to reverse the district court, the number of appellants should be coded as six.
When coding the detailed nature of participants, use your personal knowledge about the participants, if you are completely confident of the accuracy of your knowledge, even if the specific information is not in the opinion. For example, if "IBM" is listed as the appellant it could be classified as "clearly national or international in scope" even if the opinion did not indicate the scope of the business.
Your task concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Your task is to determine which of these categories best describes the income of the litigant. Consider the following categories: "not ascertained", "poor + wards of state" (e.g., patients at state mental hospital; not prisoner unless specific indication that poor), "presumed poor" (e.g., migrant farm worker), "presumed wealthy" (e.g., high status job - like medical doctors, executives of corporations that are national in scope, professional athletes in the NBA or NFL; upper 1/5 of income bracket), "clear indication of wealth in opinion", "other - above poverty line but not clearly wealthy" (e.g., public school teachers, federal government employees)." Note that "poor" means below the federal poverty line; e.g., welfare or food stamp recipients. There must be some specific indication in the opinion that you can point to before anyone is classified anything other than "not ascertained". Prisoners filing "pro se" were classified as poor, but litigants in civil cases who proceed pro se were not presumed to be poor. Wealth obtained from the crime at issue in a criminal case was not counted when determining the wealth of the criminal defendant (e.g., drug dealers).
UNITED STATES of America, Plaintiff-Appellee, v. Edgar P. BUCHANAN, Defendant-Appellant.
No. 78-5243
Summary Calendar.
United States Court of Appeals, Fifth Circuit.
Nov. 27, 1978.
Michael P. Fox, Fortson, Ga., for defendant-appellant.
D. L. Rampey, Jr., U. S. Atty., Charles T. Erion, Asst. U. S. Atty., Macon Ga., for plaintiff-appellee.
Before GOLDBERG, AINSWORTH and HILL, Circuit Judges.
Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I.
AINSWORTH, Circuit Judge:
Edgar P. Buchanan was convicted of participating in a conspiracy to steal United States Treasury checks from the mail and then cash them under forged endorsements in violation of 18 U.S.C. § 371 (conspiracy to defraud the United States), 18 U.S.C. § 495 (forgery relating to United States Treasury checks), and 18 U.S.C. § 1708 (possession of stolen mail). On appeal, Buchanan contends that the prosecuting attorney failed to comply with Rule 16(a)(1)(C), Fed.R. Crim.P., by failing to turn over certain specimens of his handwriting prior to trial and that such failure was prejudicial to his substantial rights. He also contends that the trial judge improperly commented on the evidence in a supplemental charge to the jury and thereby denied him a fair trial. We find both contentions meritless.
Buchanan’s Rule 16 contention relates to the Government’s admitted failure to turn over to defense counsel certain specimens of the defendant’s handwriting obtained by government investigators prior to trial. In a written report and in testimony at Buchanan’s trial, a handwriting analyst produced by the Government stated unequivocally that the handwriting of the signatures on two stolen checks was the same as the handwriting of the specimens obtained from Buchanan. Defense counsel repeatedly objected to any reference to the handwriting specimens and to their introduction into evidence on the ground that the Government failed to turn them over to him in advance of the trial as required by Rule 16. Buchanan’s counsel contended that he needed the specimens of his client’s handwriting in order to utilize the testimony of a handwriting analyst of his own choosing to contradict the testimony of the Government’s expert.
Rule 16 requires the Government, upon request of the defendant and without the necessity of a court order, to furnish to the defendant or to permit him to inspect and copy or photograph certain statements made by the defendant, 16(a)(1)(A), the defendant’s prior criminal record, 16(a)(1)(B), certain documents and tangible objects, 16(a)(1)(C), and reports of certain examinations or tests, 16(a)(1)(D). In this case, the handwriting specimens are properly characterized as “tangible objects” subject to disclosure pursuant to Rule 16(a)(1)(C). Pursuant to that section, Buchanan’s counsel requested the Government “[t]o produce any books, papers, documents, photographs or tangible objects which the prosecution intends to use against the defendant or which were obtained from or belong to the defendant.” In response to that request, and to a further request for any reports of experts, the Government turned over to defense counsel, inter alia, a copy of the report of its handwriting analyst and photocopies of the stolen checks showing the forged signatures.
We conclude that, by furnishing defense counsel a copy of the handwriting analyst’s report, which revealed the existence of the handwriting specimens, and by pointedly making himself available for further inquiry, the prosecuting attorney effectively “produce[d]” the specimens and “permitted] the defendant to inspect and copy” them within the meaning of the defendant’s disclosure request and Rule 16(a)(1)(C). Thus, in the absence of a specific demand for the specimens themselves, the failure to furnish them did not constitute a failure to comply with Rule 16.
Our holding conforms to our prior decision in United States v. O’Shea, 5 Cir., 1971, 450 F.2d 298. In that case we found no Rule 16 violation when, in response to a court order to provide “results and reports of scientific tests” and “documents [and] tangible objects . . . which may be introduced into evidence,” the Government provided the written report of a fingerprint expert without also providing photocopies of palm prints found on a note given by a hold-up man to a bank teller. In finding no Rule 16 violation in O’Shea, this court stated:
It is clear from this record that appellant’s counsel, even after the existence of the palm prints was made known to him, neither requested that the Government make these items available nor asked the Court to order the Government to produce them. . . . Under Rule 16, the word “disclosure” encompasses the steps taken by the Government in this case. Defense counsel was made aware of the items of physical and documentary evidence which were or would be in the possession of the Government. Neither Rule 16 nor the pre-trial order requires more.
Id. at 300. O’Shea is therefore dispositive of the Rule 16 issue posed here. Indeed, if Rule 16 does not obligate the Government to provide, without a specific request, copies of fingerprints obtained at the scene of the crime, to which the defense otherwise has no access, it does not require the provision of handwriting specimens which could easily have been duplicated at any time by the defendant himself.
Even if the Government technically failed to comply with Rule 16, Buchanan would still merit no relief from this court, since i,t is well established that an error by the trial court in the administration of the discovery rules is not reversible absent a showing that the error was prejudicial to the substantial rights of the defendant. United States v. Valdes, 5 Cir., 1977, 545 F.2d 957; United States v. Arcentales, 5 Cir., 1976, 532 F.2d 1046; United States v. Saitta, 5 Cir., 1971, 443 F.2d 830. Here, no such prejudice has been shown.
Buchanan also contends that the trial judge improperly commented on the evidence in a supplemental charge to the jury. The trial judge delivered the charge in response to notes from the jury during their deliberations which revealed confusion regarding the two counts of the indictment which involved the possession and forged endorsement of a specific check. The jury was primarily concerned with the effect of the Government’s failure to produce as a witness Orlando M. Jones, the intended payee. In his closing argument Buchanan’s counsel commented on that failure. After carefully emphasizing that he could not answer questions of fact, the trial judge suggested various reasons why Jones might have been unable to testify. Buchanan’s counsel objected to those statements and contends that they denied his client a fair trial.
It is well settled that a trial judge may comment upon the evidence as long as he instructs the jury that it is the sole judge of the facts and is not bound by his comments and as long as the comments are not so highly prejudicial that an instruction to that effect cannot cure the error. United States v. Musgrave, 5 Cir., 1971, 444 F.2d 755; Bursten v. United States, 5 Cir., 1968, 395 F.2d 976; Moody v. United States, 5 Cir., 1967, 377 F.2d 175. In this case, the trial court properly and repeatedly emphasized in the supplemental charge that the jury was the sole trier of fact. Furthermore, the court’s comments were not prejudicial. The trial judge’s comments in the supplemental charge, viewed in context, were therefore proper.
AFFIRMED.
. Rule 16(a)(1)(C) provides:
(C) Upon request of the defendant the government shall permit the defendant to inspect and copy or photograph books, papers, documents, photographs, tangible objects, buildings or places, or copies or portions thereof, which are within the possession, custody or control of the government, and which are material to the preparation of his defense or are intended for use by the government as evidence in chief at trial, or were obtained from or belong to the defendant.
. Although O’Shea was decided prior to the 1975 amendments to Rule 16, it still provides precedent for our holding since the amendments were not addressed to the question raised in O’Shea and in this case regarding the manner of “disclosure” required by the Rule.
. The third count is the general conspiracy count in regard to which evidence relating to several other individual checks was offered.
Question: This question concerns the first listed appellant. The nature of this litigant falls into the category "natural person (excludes persons named in their official capacity or who appear because of a role in a private organization)". Which of these categories best describes the income of the litigant?
A. not ascertained
B. poor + wards of state
C. presumed poor
D. presumed wealthy
E. clear indication of wealth in opinion
F. other - above poverty line but not clearly wealthy
Answer:
|
songer_district
|
A
|
What follows is an opinion from a United States Court of Appeals. Your task is to identify which district in the state the case came from. If the case did not come from a federal district court, answer "not applicable".
YUENGLING v. COMMISSIONER OF INTERNAL REVENUE.
No. 5246.
Circuit Court of Appeals, Third Circuit.
March 20, 1934.
John J. Sullivan, of Philadelphia, Pa., for petitioner.
Pat Malloy, Asst. Atty. Gen., and Walter L. Barlow and John H. McEvers, Sp. Assts. to Atty. Gen., for respondent.
Before WOOLLEY, DAYIS, and THOMPSON, Circuit Judges.
DAVIS, Circuit Judge.
This petition involves the income tax liability of Frank D. Yuengling for the year 1928.
He executed an irrevocable trust agreement. It provided that the trustee would use the income of the res to pay premiums on policies of insurance upon the petitioner’s life and designated his wife and children as the beneficiaries ox the trust.
The question here is whether or not that portion of the income of the res which was applied to the payment of premiums on the insurance policies on the petitioner’s life for his family’s benefit is taxable to him. The facts here are substantially the same as those considered by the Supreme Court when it decided this question in Burnet v. Wells, 289 U. S. 670, 53 S. Ct. 761, 77 L. Ed. 1439. Accordingly, upon the authority of that case, we hold that sueh income is taxable to the petitioner.
The second question is determined also by the broad principle that income may include not only ownership but rights or privileges that are merely indicia of ownership. Certain corporations, in which the petitioner owned all 'the capital stock, paid premiums on policies of insurance on the life of the petitioner. The proceeds of the policies were to be paid to the petitioner’s wife and children. The corporations'did not benefit from the policies.
These facts are sufficient to sustain the determination of the Board of Tax Appeals that the petitioner received the benefit of the payments, and they were income to him.
It is the settled administrative practice to regard premiums paid by a corporation on an individual insurance policy on the life of an officer as income to the officer if he is permitted to designate the beneficiary and if the corporation is not directly or indirectly benefited thereby. George M. Adams, 18 B. T. A. 381; N. Boring Danforth, 18 B. T. A. 1221 The payment of sueh premiums by the corporation must be presumed as compensation for services, rather than gifts as the petitioner contends, since a corporation cannot lawfully give away its assets. Noel v. Parrott, 15 F.(2d) 669, 671 (C. C. A. 4), certiorari denied, 273 U. S. 754, 47 S. Ct. 457, 71 L. Ed. 875.
The order of redetermination of the Board of Tax Appeals is affirmed.
Question: From which district in the state was this case appealed?
A. Not applicable
B. Eastern
C. Western
D. Central
E. Middle
F. Southern
G. Northern
H. Whole state is one judicial district
I. Not ascertained
Answer:
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songer_casetyp1_7-3-3
|
J
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the issue in the case, that is, the social and/or political context of the litigation in which more purely legal issues are argued. Put somewhat differently, this field identifies the nature of the conflict between the litigants. The focus here is on the subject matter of the controversy rather than its legal basis.
Your task is to determine the specific issue in the case within the broad category of "economic activity and regulation - commercial disputes".
LOUISVILLE TRUST COMPANY, and Citizens Fidelity Bank and Trust Company, Joint Administrators with the Will Annexed of the Estate of John A. O’Brien, Deceased, Plaintiffs-Appellees, v. Patricia R. SMITH, Defendant-Appellant.
No. 14628.
United States Court of Appeals Sixth Circuit.
Oct. 13, 1961.
Walter B. Smith, Louisville, Ky., for defendant-appellant, Patricia R. Smith.
Irvin Marcus, R. Lee Blackwell, Bullitt, Dawson & Tarrant, Louisville, Ky., for plaintiff-appellees, Louisville Trust Co. and Citizens Fidelity Bank & Trust Co., joint administrators with the will annexed of the estate of John A. O’Brien, deceased.
Before CECIL, WEICK and O’SULLIVAN, Circuit Judges.
PER CURIAM.
The order of the District Court, from which this appeal was taken, granted plaintiffs’ motion for leave to file an amended reply to defendant’s counterclaim; granted plaintiffs’ motion for summary judgment on defendant’s counterclaim and denied defendant’s motion for leave to file an amended counterclaim.
The District Court has not yet made any disposition of plaintiffs’ claim for relief set forth in their complaint which is still pending in that court.
Rule 54(b) of the Federal Rules of Civil Procedure, 28 U.S.C. provides the only manner in which the court may direct the entry of a final judgment upon one or more, but less than all claims for relief in an action, namely, upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. The District Court made no such express determination and direction. Without such determination and direction the action was not terminated as to any of the claims for relief and the order appealed from is subject to revision at any time before the entry of judgment adjudicating all of the claims. The order was not, therefore, a final order, but is interlocutory in nature. New Amsterdam Casualty Co. v. United States, 5 Cir., 272 F.2d 754; Gilbertson v. City of Fairbanks, 9 Cir., 253 F.2d 231, 10 Alaska 458. No appeal may be prosecuted from the order until it has become final. 28 U.S.C. § 1291.
The motion to dismiss is granted and the appeal is dismissed for lack of jurisdiction.
Question: What is the specific issue in the case within the general category of "economic activity and regulation - commercial disputes"?
A. contract disputes-general (private parties) (includes breach of contract, disputes over meaning of contracts, suits for specific performance, disputes over whether contract fulfilled, claims that money owed on contract) (Note: this category is not used when the dispute fits one of the more specific categories below)
B. disputes over government contracts
C. insurance disputes
D. debt collection, disputes over loans
E. consumer disputes with retail business or providers of services
F. breach of fiduciary duty; disputes over franchise agreements
G. contract disputes - was there a contract, was it a valid contract ?
H. commerce clause challenges to state or local government action
I. other contract disputes- (includes misrepresentation or deception in contract, disputes among contractors or contractors and subcontractors, indemnification claims)
J. private economic disputes (other than contract disputes)
Answer:
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songer_usc1sect
|
1001
|
What follows is an opinion from a United States Court of Appeals.
Your task is to identify the number of the section from the title of the most frequently cited title of the U.S. Code in the headnotes to this case, that is, title 29. In case of ties, code the first to be cited. The section number has up to four digits and follows "USC" or "USCA".
INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA AND ITS LOCALS 656 AND 985, et al., Plaintiffs-Appellees, v. GREYHOUND LINES, INC., et al., Defendants-Appellants.
No. 81-1377.
United States Court of Appeals, Sixth Circuit.
Argued Aug. 3, 1982.
Decided March 11, 1983.
Rehearing Denied June 8,1983.
Ronald G. Acho, Livonia, Mich., for defendants-appellants.
M. Jay Whitman, Michael B. Nicholson, Detroit, Mich., for plaintiffs-appellees.
Before ENGEL and JONES, Circuit Judges, and NEESE, Senior District Judge.
The Honorable C.G. Neese, Senior United States District Judge, Eastern District of Tennessee, sitting by designation.
NATHANIEL R. JONES, Circuit Judge.
Defendants, Greyhound Lines, Inc. appeal from a district court judgment enforcing an arbitration award which required them to implement certain benefit increases in the employees’ pension and benefit fund. Greyhound seeks to have the lower court’s judgment vacated upon its contention that the arbitrator is a fiduciary under the Employees’ Retirement Income Security Act of 1974 (ERISA) and that, as such, he acted unlawfully because he failed to satisfy the bonding requirements under the Act. Since we conclude that ERISA was not intended to subject arbitrators to civil liability, we affirm the judgment below.
I
On March 25, 1956, the International United Auto Workers (UAW) and the UAW Locals, the collective bargaining representatives of certain hourly employees at Greyhound’s Detroit Garage and Terminal, entered into an agreement with Greyhound Lines, Inc. This agreement, “Greyhound Pension Trust Plan A,” provided for retirement benefits under a plan which was to be jointly administered by a board of trustees comprised of three Greyhound trustees and three Union trustees. In the event that a board vote should result in a deadlock, Article III — 5 of the agreement provided for the selection of an arbitrator to resolve the dispute.
The dispute that gave rise to this law suit arose at a board meeting on April 13, 1978 when the Union trustees presented a proposal to increase the benefit level for members of the retirement plan. The increases were proposed in three areas:
1. Raise the benefit level from $9.25 to $11.60.
2. Increase the pension for all retirees at the terminal who retired prior to December 16, 1976 and for the garage retirees who retired prior to May 1, 1977 by 3%.
3. Pension plan to pay an additional $25 per month to all retirees from the period of their 62nd birthday through their 65th birthday.
This proposal was based upon an actuarial evaluation submitted by the Wyatt Company which was also presented to the board. The Company trustees, however, did not agree to the proposed benefit increases and decided to take the matter under advisement. At a subsequent board meeting on July 20,1978, the Company trustees refused to implement the Union proposal and, instead, proposed a smaller increase in benefits. The Union trustees would not agree to the counter-proposal and, consequently, the trustees deadlocked.
Pursuant to Article III — 5 of the trust agreement, the deadlocked issue was submitted for arbitration to George Bowles. Arbitrator Bowles conducted hearings at which the Company trustees argued that the provisions of ERISA, 29 U.S.C. § 1001, et seq., supersede any contrary language in the trust agreement and that arbitration was inappropriate for the settlement of ER-ISA rights and obligations. Moreover, they asserted that under ERISA, the arbitrator was acting as a fiduciary and, therefore, he should be bonded as required by 29 U.S.C. § 1112. The arbitrator issued an opinion and award in which he determined that he had the authority to decide the dispute by virtue of the trust agreement and found in favor of the Union, thereby implementing their proposal: (1) raising the benefit level, (2) increasing the pension, and (3) increasing pension payouts additionally for retirees from their 62nd through their 65th birthday.
Greyhound and its trustees refused to implement the pension increase provisions of the arbitrator’s award; rather, they filed a motion for reconsideration wherein they raised, for the first time, the assertion that a preamble to the agreement barred any increase in benefits to pre-January 1, 1976 retirees. The arbitrator recognized that the issue raised by Greyhound had not been raised previously and concluded that he was without jurisdiction to amend, clarify or otherwise interpret his award. The UAW instituted this action in federal district court seeking enforcement of paragraphs two and three of the arbitrator’s award. The Company cross-claimed against the UAW and added arbitrator Bowles as a cross-defendant, alleging that they had failed to comply with the provisions of ERI-SA by implementing the increase in pension benefits. The district court held that the arbitrator was not a fiduciary nor had he exceeded his authority in issuing the award. Moreover, the court concluded that even if he were a fiduciary, he had not breached his fiduciary duty because it was not necessary that he be bonded.
The appellant contends that this appeal turns on the conflict that exists between the policy favoring arbitration of labor disputes (Taft-Hartley Act) and that of protecting employee pension and benefit plans (ERISA). Our view of the issue, however, is whether the duties and liabilities that arise under ERISA are enforceable against an arbitrator who is acting in his official capacity and, as such, entitled to arbitral immunity. Accordingly, we shall examine the doctrine of immunity and analyze it in conjunction with the applicable ERISA provisions.
II
The common law doctrine of judicial immunity was first recognized by the Supreme Court in 1872 when it decided Bradley v. Fisher, 80 U.S. (13 Wall.) 335, 20 L.Ed. 646 (1872). This concept was deemed necessary in order to facilitate the proper administration of justice so that a judicial officer is “ ‘free to act upon his own convictions, without apprehension of personal consequences to himself.’ ” Stump v. Sparkman, 435 U.S. 349, 355, 98 S.Ct. 1099, 1104, 55 L.Ed.2d 331 (1978), quoting Bradley v. Fisher, 80 U.S. at 347 (1872). The Court has explained the underlying rationale for the principle of judicial immunity as follows:
It is a judge’s duty to decide all cases within his jurisdiction that are brought before him, including controversial cases that arouse the most intense feelings in the litigants. His errors may be correct- ’ ed on appeal, but he should not have to fear that unsatisfied litigants may hound him with litigation charging malice or corruption. Imposing such a burden on judges would contribute not to principled and fearless decision-making but to intimidation.
Pierson v. Ray, 386 U.S. 547, 554, 87 S.Ct. 1213, 1217, 18 L.Ed.2d 288 (1967). Accordingly, judicial immunity applies even when a judge is accused of acting maliciously or corruptly and, such immunity is forfeited only when a judge acts in “the clear abuse of all jurisdiction over the subject-matter.” Bradley v. Fisher, 80 U.S. at 351. Accord Jones v. Brown, 54 Iowa 74, 78, 6 N.W. 140, 142-43 (1880).
Originally, absolute immunity extended only to judges to assure their liberty to exercise their tasks with independence and without fear of consequences. See Bradley v. Fisher, 80 U.S. at 349-50. However, the federal courts have accorded quasi-immunity to various other public officials who are entitled to the same type of immunity from liability for those acts performed while acting in their official capacities. In Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1977), the Court held absolute immunity extended to the performance of quasi-judicial functions or to those whose powers and purpose are “ ‘functionally comparable’ to that of a judge.” Id. at 513, 98 S.Ct. at 2914.
The role of an arbitrator has traditionally been construed to be quasi-judicial in nature. See, e.g., Cahn v. International Union Ladies’ Garment Workers Union, 311 F.2d 113, 114 — 15 (3rd Cir.1962) (per curiam). Traditionally, an arbitrator is one who has no interest in the outcome of the matters under his or her consideration. I. & F. Corp. v. International Ass’n. of Heat and Frost and Asbestos Workers, Local No. 8, 493 F.Supp. 147, 149 (S.D.Ohio 1980). As such, his purpose is “functionally comparable” to a judge and, consequently, he is clothed with an immunity that is analogous to judicial immunity. DeVries v. Interstate Motor Freight System, ¶ 11,333 L.C. at p. 20, 586 (N.D.Ohio 1976), affirmed, 620 F.2d 302 (6th Cir.1980), quoting Cahn v. International Ladies’ Garment Workers Union, 311 F.2d at 114-15. Accord Corey v. New York Stock Exchange, 493 F.Supp. 51, 56 (W.D. Mich.1980). Therefore, arbitrators have been deemed proteéted from civil suit under the doctrine of “arbitral immunity.” Id. at 55. Accord Raitport v. Provident National Bank, 451 F.Supp. 522, 527 (E.D.Pa.1978).
One of the policies underlying the doctrine of “arbitral immunity” is that of protecting the integrity of the arbitration or decision-making process from reprisals by dissatisfied parties. Corey v. International Ladies’ Garment Workers Union, 493 F.2d at 56. The Seventh Circuit Court of Appeals emphasized this point in Tamari v. Conrad, 552 F.2d 778 (7th Cir.1977), when it reviewed the authority of a panel of arbitrators chosen by the Chicago Board of Trade. In regard to insulating the arbitrator from reprisals, the Court reasoned:
We hold that arbitral immunity should be extended to cases where the authority of an arbitrator to resolve a dispute is challenged. ... [Individuals cannot be expected to volunteer to arbitrate disputes if they can be caught up in the struggle between the litigants and saddled with the burdens of defending a lawsuit.
552 F.2d at 780-81. This pronouncement had been previously made by a New York Superior Court in Babylon Milk & Cream Co. v. Horvitz, 151 N.Y.S.2d 221 (Sup.Ct.1956), affirmed, 4 A.D.2d 777, 165 N.Y.S.2d 717 (1957), where the court stated:
Arbitrators exercise judicial functions and while not eo nomine judges they are judicial officers and bound by the same rules as govern those officers. Considerations of public policy are the reasons for the rule and like other judicial officers, arbitrators must be free from the fear of reprisals by an unsuccessful litigant. They must of necessity be uninfluenced by any fear of consequences for their acts.
151 N.Y.S.2d at 224 (citations omitted) (emphasis supplied).
Another policy underlying arbitral immunity stems from the national policy favoring the settlement of labor disputes by arbitration. I. & F. Corp. v. Local No. 8, 493 F.Supp. at 150. In light of the encouragement of arbitration and the necessity for arbitrators to facilitate this policy, “it follows that the common law rule protecting arbitrators from suit ought not only be affirmed, but, if need be expanded.” Hill v. ARO Corp., 263 F.Supp. 324, 326 (N.D. Ohio 1967). Moreover, the public policy considerations of protecting a judge’s or a juror’s impartiality, independence, and freedom from undue influences apply with equal force as to arbitrators. Hoosac Tunnel Duck & Elevator Co. v. O’Brien, 137 Mass. 424, 426 (1884). Finally, and most important, this Circuit has recently held that arbitrators are immune from civil liability in Corey v. New York Stock Exchange, 691 F.2d 1205 (6th Cir.1982). See also DeVries v. Interstate Motor Freight System, ¶ 11,333 L.C., p. 20,586 (N.D.Ohio 1976), aff’d, 620 F.2d 302 (6th Cir.1980). The Court employed the test of “functional comparability” as enunciated by the Supreme Court in Butz, supra, and concluded that such immunity should not only be extended to arbitrators, but should also extend to the boards which sponsor arbitration. 691 F.2d at 1208-11.
By breaking the deadlock at issue here, Arbitrator Bowles had no interest in the outcome of the employees’ benefit plan and, consequently, his purpose was “functionally comparable” to that of a judge. In light of these well-established principles immunizing arbitrators from civil liability, we conclude that arbitral immunity extends to insulate Arbitrator Bowles from liability for acts committed while serving in his official capacity to break the deadlock between the trustees in the instant case. Upon reaching this conclusion, the issue now becomes whether ERISA was intended to abolish this immunity by subjecting every person who performs fiduciary functions to liability pursuant to 29 U.S.C. § 1004(a)(1)(D).
29 U.S.C. § 1002(21)(A) provides that: a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such a plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan.
Various courts have determined that Congress purposefully defined “fiduciary”. broadly in order to effectuate the ERISA policy by providing comprehensive protection for employees’ benefit plans. See, e.g. Connolly v. Pension Benefit Guaranty Corp., 581 F.2d 729, 732 (9th Cir.1978), cert. denied, 440 U.S. 935, 99 S.Ct. 1278, 59 L.Ed.2d 492 (1979); Freund v. Marshall & Isley Bank, 485 F.Supp. 629, 634 (W.D.Wis.1979); Marshall v. Kelly, 465 F.Supp. 341, 349 (W.D.Okl.1979). Upon applying this definition to the instant case, we believe that by determining which benefit level increase and which pension increase should be implemented, Arbitrator Bowles could be construed to have exercised “control respecting [the] management or disposition of [fund] assets.” By merely breaking the deadlock, the arbitrator was directing that assets from the fund pass from the control of the trustees to the beneficiaries. As such, his actions would seem to come within the purview of a fiduciary, as defined by ERISA. Because of our disposition of the arbitral immunity issue, however, we need not decide whether an arbitrator is a fiduciary.
Our construction of the principle of arbi-tral immunity leads us to conclude that ERISA was not intended to abrogate this common law immunity. In Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967), the Supreme Court stated:
We do not believe that [the settled principal of judicial immunity] was abolished by § 1983, which makes liable “every person” who under color of law deprives another person of his civil rights. The legislative records gives no clear indication that Congress meant to abolish wholesale all common-law immunities. Accordingly, this Court held in Penny v. Brandhove, 341 U.S. 367 [71 S.Ct. 783, 95 L.Ed. 1019] (1951), that the immunity of legislators for acts within the legislative role was not abolished. The immunity of judges for acts within the judicial role is equally well-established, and we presume that Congress would have specifically so provided had it wished to abolish the doctrine.
386 U.S. at 554-55, 87 S.Ct. at 1217-18 (footnotes omitted). Similarly, we do not believe that ERISA was intended to abolish arbitral immunity in the absence of Congress having specifically so provided such an abrogation in the legislative record. Accord Raitport v. Provident National Bank, 451 F.Supp. 522, 526-27 (E.D.Pa.1978). Although Arbitrator Bowles performed functions that arguably eome within the definition of a fiduciary, we conclude that he would be entitled to immunity from liability for damages, in any event, for those acts committed while performing in his official capacity as an arbitrator. Accord Morales v. Vega, 110 LRRM 2770, 2774 (D.P.R.1979). However, the arbitrator’s immunity does not deprive injured employees and/or their beneficiaries of a remedy for any wrong they may suffer as a result of the benefit increase; it simply requires them to pursue their remedies against those trustee-fiduciaries who breached their duties and against whom personal liability attaches to make good any losses resulting from such breach. 29 U.S.C. § 1109. Accord Rait-port v. Provident National Bank; 451 F.Supp. at 527.
The conclusion that ERISA does not abolish arbitral immunity is further buttressed by the Act’s requirement that “[ejvery fiduciary of an employee benefit plan ... shall be bonded.” 29 U.S.C. § 1112(a). Both Congress and the Department of Labor have emphasized that the policy underlying the bonding requirement is that of protecting the employees and their beneficiaries from losses occasioned by fraud or dishonesty on the part of fiduciaries. See 29 U.S.C. §§ 1001(a) and (b) and 29 C.F.R. § 464.9. The Department of Labor has further explained that the bonding requirements apply only to those who “handle” the funds or other plan property. 29 C.F.R. § 464.1. “Handling” of funds encompasses physical contact with the funds, the power to secure possession of cash or checks from the fund, the power to transfer to oneself or a third party title to fund property, the actual disbursement of funds by the signing or endorsing of checks, or the supervisory power to order that such disbursements be made. 29 C.F.R. § 464.-7(b). None of these acts, however, extend to the functions performed by Arbitrator Bowles in breaking the deadlock. Therefore, since bonding is required to assure the employees’ right to damages as against those who “handle” fund assets and, since the arbitrator is immune from such liability, the purposes for having a fiduciary bonded would not be served when applied to arbitrators.
Accordingly, we conclude that Arbitrator Bowles is immune from liability for damages which may result from breaking the deadlock below and, consequently, the bonding requirements that apply to fiduciaries are inapplicable as to him.
III
Appellants also contend that paragraph two of the Union trustees’ proposal contravenes the basic governing document of the Retirement Plan and, as such, it violates 29 U.S.C. § 1104(a)(1)(D). The governing document, the Greyhound Lines UAW Retirement Plan Preamble, provides that:
None of the provisions of the Plan as so amended shall have any application to any employee who retired or terminated employment prior to January 1,1976; the benefits, if any, of any such person shall be determined only in accordance with the provisions of the Plan as heretofore in effect. (Emphasis supplied.)
Since the preamble precludes pre-January 1, 1976 retirees from receiving benefits under the Plan and since the Union trustees’ proposal provides for benefit increases to these same retirees, appellants contend that the arbitrator’s award, which encompasses these changes, should be vacated. They further submit that the Union trustees’ proposal of this increase is a breach of their fiduciary duties which requires them to administer the fund in the interests of the employees and in accordance with the Plan’s governing documents.
In Cutaiar v. Marshall, 590 F.2d 523 (3rd Cir.1979), the Third Circuit examined a purported conflict between the Taft-Hartley Act and ERISA and concluded that an arbitrator can break a deadlock between trustees, but he cannot insulate the trustees from their illegal acts. 590 F.2d at 530. The court further explained that the Taft-Hartley Act contemplates “the resolution of deadlocks over two permissible administrative courses of action.” Id. Thus, when the dispute encompasses a transaction that is prohibited by statute or otherwise, the arbitrator has no power to approve it.
While we recognize the potential for fraudulent proposals in regard to the administration of employee funds, we feel that objections to such proposals are waived when they are not raised at the arbitration hearing. The appellants’ assertion that the Union trustees’ proposal was in conflict with the governing document should have been raised before the arbitrator so that he could have taken it into consideration when breaking the deadlock. As stated in Newspaper Guild Local 35 v. Washington Post Co., 367 F.Supp. 917 (D.C.Cir.1973):
the policy of the law, both in litigation and in arbitration, is to resolve the entire matter involving one claim and defenses thereto in one proceeding, with later appellate review of the entire case. Acceptance of Defendant’s argument would provide a party the option of piecemeal proceedings, and asserting a new “fall-back” position only after rejection of its initial arguments. To allow this “would undercut the entire usefulness of arbitration as an expeditious and generally fair method of settling disputes.”
367 F.Supp. at 919 (citations omitted). Accord Newspaper Guild Local 35 v. Washington Post Co., 442 F.2d 1234, 1238 (D.C.Cir.1971). This policy of binding the parties to the record made before an arbitrator is necessary in order to assure the effectiveness of the arbitration awards.
We conclude, therefore, that the appellants have waived their right to assert that the Union trustees’ proposal contravenes the governing documents since this claim was not presented to the arbitrator. This holding, however, does not preclude the appellants from bringing a separate action against the appellees for breach of their fiduciary duties under ERISA provision 29 U.S.C. § 1109. Cf. Challenger v. Local No. 1, International Ironworkers, 619 F.2d 645, 648 (7th Cir.1980).
The judgment of the district court enforcing the arbitration award is accordingly Affirmed.
. This is the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (hereinafter referred to as UAW International).
. Locals 656 and 985 of the UAW International are the certified collective bargaining representatives of certain hourly employees at Greyhound’s Detroit, Michigan garage and terminal facilities, respectively. Russell Nolan is the President of Local 656 and John Ellis is the President of Local 985.
. Article III — 5 of the trust agreement provides: Settlement of Differences. If, by unit vote, the trustees deadlock on any matter arising in connection with this trust agreement or the plan, they shall agree upon a neutral person to serve as an impartial arbitrator to decide the dispute .... The decision of the impartial arbitrator shall be final and binding upon the trustees, the parties to this trust agreement, and the beneficiaries of the trust, but the impartial arbitrator shall not have the power to vary any of the terms of this trust agreement, any collective bargaining agreement, or the plan. Any matters in dispute shall be submitted to the impartial arbitrator in writing. If the trustees cannot jointly agree upon a statement submitting the matter to arbitration, the employer trustees and the UAW trustees shall each prepare and forward in writing their version of the dispute and the question or questions involved.
. The trust agreement empowers the board of trustees to revise benefit levels after taking into account the amount of the increase and the amount of funds available. Article VI-l(d) provides:
It is contemplated that one or more collective bargaining agreements may provide for the payment of funds by one or more employers to the trustee in excess of the amounts required to fund or finance the benefits then specified by the plan, or that excess funds may otherwise become available, or that it may be desirable to change, increase, decrease, supplement or modify one or more benefits from time to time specified by the plan. Subject always to the foregoing provisions of this article, the trustees shall have exclusive power to amend the plan from time to time in any or all such particulars, except that no benefit may be provided by the trustees under the plan at any time if because of such benefit the actuarial soundness of the trust fund would be impaired (that is to say, the payments to be made by the employers to the trustees pursuant to the terms of collective bargaining agreements between UAW and the employers then in force, plus the then market value of the trust fund, shall be estimated to be inadequate to provide such benefit along with the other benefits specified by the plan) as determined by an actuary selected by the trustees who is not a member of any local of the UAW, is not an employee of any employer and is a Fellow of the Society of Actuaries, or as determined by an a [sic] firm of actuaries selected by the trustees at least one of whose members or officers is a Fellow of the Society of Actuaries, in accordance with sound actuarial practices, assumptions and procedures.
. The Union trustees used an evaluation by Wyatt Company while the Company trustees sought an evaluation from Towers, Perrin, Forster and Crosby (TPF & C). The differences in the proposed benefit increases resulted from the different figures used by the actuarial firms. Wyatt used a retirement age of 63 while TPF & C used 62 as the retirement age. Based on Wyatt’s analysis of the benefit improvement, the total cost to the Plan would be 87.8 cents while contributions would be at a rate of 86.863 cents per hour, resulting in a shortfall of 0.87 cents. TPF & C evaluations indicated, however, that a shortfall of 8.95 cents would result from Wyatt’s proposed benefit improvements.
. The bonding requirement is set forth in 29 U.S.C. § 1112:
(a) Every fiduciary of an employee benefit plan and every person who handles funds or other property of such a plan (hereafter in this section referred to as “plan official”) shall be bonded as provided in this section; ... the amount of such bond shall be fixed at the beginning of each fiscal year of the plan. Such amount shall not be less than ten per-centum of the amount of the funds handled. In no case shall such bond be less than One Hundred Thousand Dollars nor more than Five Hundred Thousand Dollars, except that the Secretary after due notice and opportunity for hearing to all the interested parties, and after consideration of the record may prescribe an amount in excess of Five Hundred Thousand Dollars subject to the ten percentum limitation of the preceding sentence.
. When an arbitrator renders his decision, he has fulfilled the obligations of his office and relinquished all power to issue awards binding on the parties. In the absence of a contractual basis for reconsideration of a decision, the arbitrator’s decision must stand and a motion for reconsideration must be denied. In Re Kohn Beverage Co., 78 L.A. 1156, 1157 (1982). Accord Expedient Services, Inc., 68 L.A. 1082, 1083-84 (1977).
. Procunier v. Navarette, 434 U.S. 555, 98 S.Ct. 855, 55 L.Ed.2d 24 (1978) (prison administrators entitled to qualified immunity); Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976) (prosecutors entitled to quasi-immunity); O’Connor v. Donaldson, 422 U.S. 563, 95 S.Ct. 2486, 45 L.Ed.2d 396 (1975) (hospital superintendent entitled to qualified immunity); Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975) (school administrators entitled to qualified immunity); Scheur v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) (state executive officials entitled to qualified immunity).
. The Department of-Labor has taken the position that an arbitrator would be a plan fiduciary if he performed any of the functions described in the statute which defines the term fiduciary. The Department has issued two advisory opinions which provide us further assistance in our determination of this issue. In Advisory Opinion No. 79-66A, the Department advised the parties that when an arbitrator resolves a dispute regarding whether a plan participant is entitled to pension benefits, he is acting as a fiduciary because a fiduciary’s duties include the payment of valid benefit claims and the disallowance of invalid claims. However, in Advisory Opinion No. 78-14, the Department advised that an arbitrator is not a fiduciary when he resolves an issue concerning the employer’s monthly contributions to the fund and has the authority to decide on a contribution rate. In the latter opinion, the Department reasoned that the arbitrator did not perform any of the functions described in § 3(21)(A) of ERISA, viz., he had no authority to manage or dispose of plan assets, to render investment advice or to assist in the administration of the plan.
. We intimate no viewpoint, however, as to whether the doctrine of arbitral immunity would bar an action for equitable relief as well. Compare Briggs v. Goodwin, 569 F.2d 10, 15 n. 4 (D.C.Cir.1977) (immunity from damages does not bar equitable relief) with Conover v. Mon-temuro, 477 F.2d 1073, 1094 (3rd Cir.1973) (en banc) (court reserved the question of whether judicial immunity bars injunctive relief).
. Appellants have not raised in their briefs the question of whether arbitral immunity confers a defense to a trustee-fiduciary for actions taken pursuant to an arbitrator’s decision. Similarly, we do not address that question in this case.
. This section requires a fiduciary to:
discharge his duties with respect to a plan solely in the interests of the participants and beneficiaries and
iH * * ifs *
(D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter.
Question: What is the number of the section from the title of the most frequently cited title of the U.S. Code in the headnotes to this case, that is, title 29? Answer with a number.
Answer:
|
songer_diverse
|
D
|
What follows is an opinion from a United States Court of Appeals. The issue is: "Did the court conclude that the parties were truly diverse? Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
Laurie W. TOMLINSON, District Director of Internal Revenue for the District of Florida, Appellant, v. The 1661 CORPORATION, Appellee.
No. 23246.
United States Court of Appeals Fifth Circuit.
May 9, 1967.
Mitchell Rogovin, Asst. Atty. Gen., Richard M. Roberts, C. Moxley Featherston, Acting Asst. Attys. Gen., Lee A. Jackson, Harry Marselli, Meyer Rothwacks, Gilbert E. Andrews, Solomon L. Warhaftig, Attys., Dept, of Justice, Washington, D. C., Edward F. Boardman, U. S. Atty., Tampa, Fla., Virginia Q. Beverly, Asst. U. S. Atty., Jacksonville, Fla., for appellant.
William T. Rogers, Judson Freeman, Jacksonville, Fla., for appellee.
Before MARIS, BROWN and THORNBERRY, Circuit Judges.
Of the Third Circuit, sitting by designation.
JOHN R. BROWN, Circuit Judge:
The only question presented on this appeal is whether certain advances of funds to the Taxpayer Corporation by its sole shareholders constitutes indebtedness within the meaning of § 163 of the Internal Revenue Code of 1954, 26 U.S.C.A. § 163, or contributions to capital. The Commissioner determined that the advances fell into the capital category and disallowed the claimed deduction for interest accrued on the Corporation’s books for the years 1960 through 1962. Upon trial of the tax refund suit, the District Court held for the Taxpayer. The 1661 Corporation v. Tomlinson, M.D.Fla., 1965, 247 F.Supp. 936. We affirm.
The pertinent facts were stipulated by the parties. The Corporation was organized in 1955 for the purpose of constructing, owning and operating a professional office building in Jacksonville, Florida. The charter, as amended, authorized the issuance of 560 shares of stock with a par value of $100 per share. At the organizational meeting, subscriptions were submitted, all by medical doctors, for 180 shares of stock, along with an agreement to advance to the Corporation $400 for each share of stock subscribed. These advances were represented by promissory notes bearing interest at 7% per annum, and payable on or before 15 years after date of issue. The Corporation, while it could have obtained the funds from outsiders, found that the interest rates demanded were prohibitive, and therefore turned to the stockholders for loans on more favorable terms.
On August 23, 1957, a resolution was adopted by the Board authorizing replacement of the 15-year notes by corporate debentures bearing the same interest rate but payable on or before 19 years after date. To assure continuity in the debt and to preclude the loss of any interest accrued on the notes during the interim between their issuance and exchange, the debentures as actually issued reflected that they were issued as of the same date as each original stockholder loan to the Corporation. Interest, payable in semi-annual installments, was cumulative, and accumulated interest had to be paid before any common stock dividends could be declared. Maturity could be accelerated for any default other than the failure to pay interest. Unlike the stock whose transfer was somewhat restricted, the debentures were freely transferable and were secured by a pledge of the full faith and credit of the issuer, by a lien upon all excess lease rentals received by the Corporation, and the proceeds, if any, of a “stockholder’s loan sinking fund” to which no deposits had been made. By a provision incorporating the terms and conditions of the enabling resolution, the debentures were subordinated to the mortgage indebtedness against the corporate property.
During the years 1960 through 1962, the Corporation had issued and outstanding 346 shares of capital stock for a total capitalization of $34,600. The related stockholder advances totaled $138,-400, and the interest on these advances, accrued but unpaid, is the subject of the present dispute.
The question whether an advance of money by persons who are the sole stockholders of a corporation to their wholly owned corporation in return for a promise to repay such advances creates an “indebtedness” within the meaning of the statute (note 2, supra) or amounts to a contribution to capital, has often been considered by this Court. Rowan v. United States, 5 Cir., 1955, 219 F.2d 51; Campbell v. Carter Foundation Production Co., 5 Cir., 1963, 322 F.2d 827; Montclair, Inc. v. Commissioner of Internal Revenue, 5 Cir., 1963, 318 F.2d 38; Aronov Constr. Co. v. United States, M.D.Ala., N.D., 1963, 223 F.Supp. 175, aff’d per curiam, 5 Cir., 1964, 338 F.2d 337; United States v. Snyder Brothers Co., 5 Cir., 1966, 367 F.2d 980 [1966]. Although the results are diverse, sometimes favoring the taxpayer, sometimes the Government, the cases are in accord in applying with an even hand the controlling legal principles for determining the outcome of the present litigation.
Because of the many variables involved in financing transactions such as the one presented here, it is clear that each case must be judged on its own unique fact situation. The Code requires three things before interest can be deducted: (1) an indebtedness, (2) interest on the indebtedness, (3) which has been paid or accrued within the tax year. 4A Mertens, Federal Income Taxation § 26.-01 at p. 3 (1966 Revision); Campbell v. Carter Foundation Production Co., supra, 322 F.2d at 831. That the accrual requirement is satisfied is not here questioned. Nor is there any dispute that if — and the if is the big if of the case— the debentures constituted “indebtedness” the second requirement will be satisfied. Therefore the sole issue to be resolved on this appeal is whether the District Court correctly determined that the debentures constituted an “indebtedness” within the statutory meaning.
The term “indebtedness” implies an existing unconditional and legally enforceable obligation to pay. 4A Mertens, Federal Income Taxation § 26.04 (1966 Revision). In the course of determining whether a particular transaction creates a valid and subsisting “indebtedness” within the statutory meaning, this Court has in the past analyzed the pertinent facts of the transaction in connection with certain criteria considered to be controlling. Generally, these criteria are designed to disclose the real nature of the transaction in question — that is whether it exhibits the characteristics of a bona-fide loan to the corporation which is expected, indeed, may be compelled, to be repaid in full at some future date, or whether as a formalized attempt to achieve the desired tax result while lacking in necessary substance, it merely parades under the false colors of such a transaction. The District Court, utilizing the criteria set out by the Court in Montclair Inc. v. Commissioner of Internal Revenue, supra, followed this procedure in this case, and its analysis tracks it item by item, (1) through (11). The 1661 Corporation v. Tomlinson, supra, 247 F.Supp. at 938.
The Government, offering no contest that these are the pertinent criteria for consideration, asserts only that the District Court failed correctly to apply these criteria to what was actually done by the Corporation as distinguished from appearances thereby exalting formalities over the substance of the transaction.
More concretely, the Government levelled its attack on the District Court’s determinations with respect to four of the criteria.
The Government first attacks the conclusion that “[5] the debenture holders as such have no right to participate in management.” Again, the Government does not challenge this directly. Rather, obliquely it urges that since the debentures were issued to the stockholders in the same proportions as their stock holdings, there was no need for debenture provision stipulating participation in control because the debenture holder already has a pro rata part of the voting control through his stock ownership. Consequently, the argument runs, the Court erred by restricting its consideration solely to the debt instrument itself to the exclusion of the surrounding facts and circumstances. The contention, of course, is grounded on the identity of ownership between the stockholders and their wholly owned corporation, but more than that, on its concomitant equal ratio of debt-equity making additional control safeguards in the debentures superfluous.
Identity of ownership does not, of itself, prevent the advance from being treated as indebtedness. United States v. Snyder Brothers Co. supra, 367 F.2d 980 [1966]. It is only one of the factors to be considered in assessing the true nature of the transaction. Where the creditors as stockholders have a proprietary interest in proportion to their loans, this may subject the transaction to “close scrutiny” but does not necessarily preclude treating the transaction as a valid indebtedness. Wilshire & Western Sandwiches, Inc. v. Commissioner of Internal Revenue, 9 Cir., 1959, 175 F.2d 718, 721; Earle v. W. J. Jones & Son, 9 Cir., 1952, 200 F.2d 846, 850. We think the Government’s argument fails to take in to account the fact that, while there is a restriction placed on the sale of the stock, no similar restriction is found in the debentures which therefore are freely transferable. Such a transfer would remove the proportional participation and control. It is no answer to point out that no such transfers have occurred or even are contemplated — this may be the result of a variety of factors, not the least of which could be the belief of the doctors that the investment is a good one which will be repaid, both principal and interest, at the appointed date. It is enough to say that the existence of the right of free transferability substantially dispells the element of proportional control, leaving the mere identity of ownership- as only one factor to be weighed in reaching the appropriate result.
Another attack centers on the relationship of the debenture holders to the creditors of the Corporation. As previously stated, by a provision incorporating the Board resolution, the debentures were subordinated to the “mortgage indebtedness against said property” (note 8, supra). But this hardly means that the District Court erred in concluding that the “[6] rights of the debenture holders are equal to those of the general creditors” (emphasis added). Here again, subordination is but one of the factors for consideration, and one which this Court, in Aronov Constr. Co. v. United States, supra, considered along with six other factors — all adverse to the taxpayer — in holding that the payments were not deductible as interest but rather constituted dividends. Where, however, the decided weight of the findings favor the taxpayer, we are unable to say that the District Court’s determination that the mere subordination to outstanding mortgage indebtedness would not disqualify the interest deduction is clearly erroneous.
The factor of subordination also serves to distinguish this Court’s recent holding in United States v. Snyder Brothers Co., supra. There it was expressly provided that the debentures would “be subordinated to all indebtedness of the corporation, whether already incurred or to be incurred at any time in the future”, (emphasis added) with no limit on the amount of such indebtedness. 367 F.2d at 981. Clearly such a provision weighs heavily toward an equity participation and against the existence of a bona-fide debtor-creditor relationship. In our case, however, the debenture holders possess rights equal to those of the general creditors of the corporation, since their debt is subordinated only to the outstanding mortgage indebtedness of Aetna. This does, to be sure, give an apparent theoretical preference to the mortgage debt. But in reality this priority is built in by the lien and enforcement provisions of the mortgage. There are other distinquishing factors. Thus in Snyder, the Court found that no limit was placed on the payment of dividends to stockholders [here, no dividends may be paid so long as any interest is in arrears], and that debentures could be transferred only on the books of the company by proper written assignment [here, no such restriction exists].
The Government’s assertion that Taxpayer is a “thin corporation” warrants only brief mention. Assuming, without deciding, whether or to what extent this criterion remains a pertinent consideration in this Circuit, we conclude that the District Court on the facts of this case could find that the “[8] ratio of debt to capital was not excessive.”
Nor is there any merit to the argument that while the debenture holders had the [4] “right to enforce payment” of interest, no payments were in fact made, notwithstanding that funds were available. Here again, it is not for this Court to speculate on the business reasons for the Corporation’s action. The statute allows a deduction for accruals as much as for payments. And there is no evidence in the record to support the Government’s assertion that an understanding existed between the Corporation and debenture holders that interest would be withheld till the mortgage debt was discharged. We are thus unable to say that the District Court’s finding in this regard is clearly erroneous.
Having disposed of the Commissioner’s contentions, two further matters warrant comment.
Pressing heavily extravagant statements found in many judicial opinions, the Taxpayer continually emphasizes in its brief that intent of the parties is the ultimate consideration before the Court, and that it is manifest that here the parties intended the transaction to be treated for tax purposes as a valid “indebtedness.” Were intent the sole consideration, we would have to agree that the parties here intended, both subjectively and objectively, to create an indebtedness. But the question is not so simple. Despite what many decisions state or imply, the issue is not so much what the parties intended, but whether for tax purposes the transaction will be so recognized. As we recently stated, where "the instruments involved are entirely conventional in form and contain no ambiguity on their face * * * the problem is not one of ascertaining ‘intent,’ since the parties have objectively manifested their intent. It is a problem of whether the intent and acts of these parties should be disregarded in characterizing the transaction for federal tax purposes.” United States v. Snyder Brothers Co., supra, 367 F.2d at 982.
Finally, the Court was considerably troubled at first by the Government’s assertions that the stockholder loans were necessary in order to obtain the required initial funds to begin the corporate project, as the Corporation was unable to obtain these funds through commercial loans from outside sources. Especially was this so in view of the Judge’s findings. We are now convinced that this was not the case. The Government in its brief makes footnote reference to the testimony of one of the Corporation’s original directors and its treasurer during the formative years, noting that “taxpayer’s incorporators had originally sought to obtain from outsiders the financing that taxpayer would require in addition to the proceeds from the sale of stock and the first mortgage loan on its property, the latter of which would provide only slightly in excess of one half of the almost $500,000 that was to be invested in the property. The rate of return that outsiders were demanding with respect to such financing was found, however, to be prohibitive. Accordingly, it was determined that the necessary funds would come from the stockholders.” (Emphasis added.) Inability to obtain outside financing is not the same as, and cannot be equated with, the ability to obtain outside financing but at a cost which to the businessman is economically unwise. That outsiders offer credit only on prohibitive terms does not transmute a stockholder loan into equity capital. The Code does not specify from what source needed investment funds must be derived. We cannot, by manipulation of tax law, preclude the parties from exercising sound business judgment in obtaining needed investment funds at the most favorable rate possible, whether it be a commercial loan, or, more likely and as is the case here, a loan from private interested sources with sufficient faith in the success of the venture and their ultimate repayment to delete or minimize the “risk factor” in their rate of return. We must not forget that while the principles articulated in Montclair continue to furnish helpful guidelines, application of these so-called factors, or any one of them, must be tempered by an awareness that from our Commission, as Judges we are not qualified, or certainly not the best qualified persons, to determine the many intricacies of transactions in the business world. Our guidance in making fact decisions and in declaring or applying legal principles must come from the enlightenment afforded by an evidentiary record reflecting the facts the business world regards as significant. This record amply supported the Judge’s conclusion that the loans from insider-stockholders constituted for tax purposes indebtedness, not capital contributions.
Affirmed.
. The 1661 Corporation, incorporated in Florida.
. “(a) General Rule. — There shall be allowed as a deduction all interest paid or accrued within the taxable year on indebtedness.”
. It is helpful to set out the bond substantially in full:
“KNOW ALL MEN BY THESE PRESENTS, that THE 1661 CORPORATION * * * for value received, promises to pay to .................. •on or before nineteen (19) years from the date hereof, the principal sum of........ Hollars ($........), with interest thereon at the rate of seven per cent (7%) per annum, payable semi-annually on the fifth day of January and the fifth day of July of each year. Both principal of and interest on this Debenture are payable * * * at the principal office of the Corporation * * *.
“If for any reason any interest payment is not made as above provided, such interest shall be cumulative. The amount of any interest so accumulated shall be paid before any dividends may be declared and paid on the common stock of the Corporation.
“This Debenture and the interest thereon is payable from and secured by a lien -upon and a pledge of the excess rentals received, by said Corporation under leases covering the building owned by said Corporation, and by the proceeds of the Stockholders’ Loan Sinking Eund of said Corporation, and to the extent necessary, the full faith and credit of said Corporation is also pledged for the payment of the principal of and interest on said Debenture as the same shall become due; all in the manner provided in that certain Resolution adopted by the Directors of said Corporation on August 23, 1957, the terms and conditions of which are incorporated herein by reference and are made a part of this instrument.
“If default be made in the performance of any agreement contained herein, other than the payment of any interest installment, then at the option of the holder of same, the principal sum then remaining unpaid, together with accrued interest, shall immediately become due and collectible, without notice, time being of the essence of this contract, said principal sum and said accrued interest shall both bear interest at the rate of ten per centum (10%) per annum from such time until paid.”
. This is covered by counsel’s post-argument stipulation.
. Taxpayer’s by-laws provide that “The holder of shares of stock desiring to sell or otherwise transfer or dispose of such shares shall make formal application to the Board of Directors for so doing, and thereafter the Corporation shall have the exclusive option, for a period of thirty (30) days within which to purchase such shares of stock at the current book value thereof. If this option is not exercised within such period, the holder may then sell or otherwise transfer or dispose of his shares of stock as he may see fit.”
. This included all rentals not pledged or assigned as security for mortgage loans made or to be made upon the Corporate property.
. The resolution adopted by the board of directors on August 23, 1957, included a provision that “the principal of [the] loans shall be repayable after the corporation had discharged the mortgage indebtedness against said property; * * * »
. In this context, “interest” is given its ordinary meaning, Campbell v. Carter Foundation Production Co., supra, 322 F.2d at 831, that is “compensation for the use or forebearance of money” or the “amount which one has contracted to pay for the use of borrowed money.” Deputy v. DuPont, 1940, 308 U.S. 488, 497-498, 60 S.Ct. 363, 368, 84 L.Ed. 416, 424.
. “ ‘There are at least eleven separate determining factors generally used by the courts in determining whether amounts advanced to a corporation constitute equity capital or indebtedness. They are (1) the names given to the certificates evidencing the indebtedness; (2) the presence or absence of a maturity date; (3) the source of the payments; (4) the right to enforce the payment of principal and interest; (5) participation in management; (6) a status equal to or inferior to that of regular corporate creditors ; (7) the intent of the parties; (8) “thin” or adequate capitalization; (9) identity of interest between creditor and stockholder; (10) payment of interest only out of “dividend” money; (11) the ability of the corporation to obtain loans from outside lending institutions.” O. H. Kruse Grain & Milling Co. v. Commissioner [of Internal Revenue,] 9 Cir. 1960, 279 F.2d 123, 125. See Mertens Federal Income Taxation, § 26.10c.” Montclair, Inc. v. Commissioner of Internal Revenue, supra, 318 F.2d at 40.
To this might be added other criteria, for example, “that the initial payments, both capital and advances, were all made for acquisition of capital assets, as in Commissioner of Internal Revenue v. Meridian & Thirteenth Realty Co., 7 Cir., 132 F.2d 182, and Matthiessen v. Commissioner [of Internal Revenue,] 2 Cir., 194 F.2d 659; or the issuance of certificates of stock, such as Meridian & Thirteenth Realty Co., supra; * * * inordinately postponed due date; * * * or payment of advances as initial funds to start the corporate life, as in Janeway v. Commissioner [of Internal Revenue,] 2 Cir., 147 F.2d 602; * * *.” Rowan v. United States, supra, 219 F.2d 51, 55.
. For ease of reference, the numbers are enclosed in brackets, e. g. [3].
“[1] Name. The instruments evidencing the indebtedness are called ‘debentures’, and are in form and substance debentures. All references in the corporations’ minutes and books of account are to loans.’
“[2] Maturity Date. The debentures have a definite maturity date, to-wit, 19 years after date.
“[3] Source of Payment. Payment is required to be paid from corporate funds, not necessarily from earnings and profits.
“ [4] Right to Enforce Payment. There is a definite right to enforce payment upon default or at maturity.
“[5] Participation in Management. The debenture holders as such have no right to participate in management.
“[6] Relationship to General Creditors. The rights of the debenture holders are equal to those of general creditors.
“[7] Intent of Parties. The form of the instrument itself, as well as corporate ' minutes authorizing it, plainly show that both the corporation and the lenders intended to create an unconditional and legally enforceable obligation for the payment of money.
“[8] ‘Thin’ or Adequate Capitalization. The ratio of debt to capital was not excessive. The ratio of debentures to stock was 4 to 1.
“[9] Identity Between Creditor and Stochholder. >The stockholders and debenture holders were one and the same. “[10] Source of Interest Payment. Interest was payable out of general corporate funds with no obligation to pay the same out of ‘dividend’ money.
“[11] Ability of Corporation to Obtain Loans Elsewhere. The Corporation was unable to make adequate loans from outside sources, although it was able to obtain a substantial loan.”
. In its brief, the Government states that the Court “confined its inquiry solely to the form of the ‘debentures’ and of the corporate minutes authorizing their issuance, using the criteria as a check list to determine whether the formalities, which it mistakenly believed to be controlling, had been complied with.”
. Specifically, the controverted conclusions are those regarding [4] “right to enforce payment,” [5] “participation in management” (which derivatively involved [9] . “identity between creditor and stockholder”), [6] “relationship to general creditors,” and [8] “ ‘thin’ or ‘adequate’ capitalization” (see note 10, supra).
. See note 5, supra. So far as this record reveals, this stock restriction was in no way tied into this financing problem or stockholder loans. With stock transfer limited by the 30-day option, but with no such limitation on the debentures ownership, and hence potential control, could part at the sole discretion of the stocks holder lender. Neither the Corporation nor its remaining stockholder owners could prevent the debentures getting into the market at any time or any place.
. This included a permanent first mortgage loan from Aetna Life Ins. Co. for $275,000, with interest at 5%% over an 18-year period, and a second mortgage loan from Foremost Properties, Inc. for $40,000 at 6% payable in 10 years. Additional financing included unsecured loans in the amounts of $9,000 from Atlantic National Bank and an equal amount from two of the stockholders. The only loan remaining outstanding at the date of the trial was the first mortgage loan to Aetna. There was an interim financing construction loan for $250,000.
. The District Court found that
“(1) the payment schedule to the transferring shareholders was ignored, (2) the sole source of the scheduled payments was to have come from the rents under a one-year lease; (3) the Aronov’s had complete control and management of the corporation; (4) the stockholders agreed that their ‘debt’ be subordinated to those of other creditors; (5) the capitalization of the corporation was inadequate; (6) there was complete identity between the ‘creditors’ and stockholders, and (7) no dividends were declared by the taxpayer.”
Aronov Constr. Co. v. United States, supra, 223 F.Supp. 175, 177.
. The Government correctly observes that the “willingness to subject his investment to the primary risks of the enterprise is what distinguishes the stockholder from the creditor.” 4A Mertens, Federal Income Taxation § 26.06, at 35 (1966 Revision). Thus, a creditor ordinarily will insist on sharing with other creditors in the assets of the business in the event of liquidation or dissolution. This was precluded by the subordination provision in Snyder Brothers.
. “It would obviously work an unwarranted inference by the courts in ordinary and perfectly proper business procedures for us to say that there can be established, as a matter of hindsight, a ratio of stockholder owned debt to the capital of the debtor corporation. * * * It is entirely within the competence of Congress to provide by statute for such ratio if it deems it advisable or necessary within the scheme of Federal taxation. It is not within our province to do so. Nor would it further the desirable end of certainty in taxes for us to do so.” Rowan v. United States, supra, 219 F.2d 51, 55. See also Sun Properties v. United States, 5 Cir., 1955, 220 F.2d 171, 175.
Undoubtedly the Court has since receded from this absolute.
“This Circuit has rejected the notion that thin capitalization alone will justify the Commissioner in designating an indebtedness as capital, but recognizes that this factor need not be ignored in determining whether all of the facts authorize the inference of an intent to make a contribution to capital. Rowan v. United States, 5 Cir., 1955, 219 F.2d 51.”
Montclair, Inc. v. Commissioner of Internal Revenue, supra, 318 F.2d at 40. See also United States v. Henderson, Cir., 1967, 375 F.2d 36, 40 [No. 22152, Mar. 23, 1967].
. The additional statement by the Court that the “ratio of debentures to stock was 4 to 1” appears gratuitous and erroneous as well. Clearly proper application of this criterion would require consideration of the total outstanding corporate debt in relation to the corporate equity. On the basis of the Government’s computations, the latter method would reflect, as of December 31, 1957, a debt-equity ratio of 14.6 to 1. There is nothing, however, to compel us to hold that that this ratio is excessive. Cf. Aronov Constr. Co. v. United States, supra ($1000 paid-in capital, $150,000 mortgage debt). Rowan is still very much alive in denying to Judges the prescience to determine as a legal matter a thing as vital as this to businessmen without an adequate factual basis for the asserted unreasonableness of the ratio. Leverage is the aim of many entrepreneurs, many of whom are quite successful in securing financing on high ratios.
. Neither this nor any other part of our holding here is contrary to our very recent decision in United States v. Henderson, 5 Cir., 1967, 375 F.2d 36 [No. 22152, Mar. 23, 1957]. Although the Court there noted that while “the majority of the ‘notes’ evincing the advances became due during these years no part of the ‘interest’ or ‘principal’ was ever paid,” this did not stand alone. Rather, the Court went on, “In fact, it was generally understood that repayment was contingent upon the success of the business and that repayment was to be made only out of profits.” In addition, “taxpayer’s advances were * * * subordinated to [the Corporation’s] indebtedness to its other creditors”, whose obligations were being paid while taxpayer’s obligations were not even though interest and principal on a majority of the notes was past due. Finally, “thin capitalization” was there a factor which, along with those mentioned above, made the “conclusion inescapable” that the transactions resulted in a contribution to capital, not indebtedness.
. [11] “The Corporation was unable to make adequate loans from outside sources, although it was able to obtain a substantial loan.”
Question: Did the court conclude that the parties were truly diverse?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
|
songer_majvotes
|
4
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the number of judges who voted in favor of the disposition favored by the majority. Judges who concurred in the outcome but wrote a separate concurring opinion are counted as part of the majority. For most cases this variable takes the value "2" or "3." However, for cases decided en banc the value may be as high as 15. Note: in the typical case, a list of the judges who heard the case is printed immediately before the opinion. If there is no indication that any of the judges dissented and no indication that one or more of the judges did not participate in the final decision, then all of the judges listed as participating in the decision are assumed to have cast votes with the majority. The number of majority votes recorded includes district judges or other judges sitting by designation who participated on the appeals court panel. If there is an indication that a judge heard argument in the case but did not participate in the final opinion (e.g., the judge died before the decision was reached), that judge is not counted in the number of majority votes.
WESTMORELAND SPECIALTY CO. v. BURNET, Commissioner of Internal Revenue.
No. 5345.
Court of Appeals of the District of Columbia.
March 14, 1932.
Geo. E. H. Goodner, of Washington, D. C., for appellant.
G. A. Youngquist, Asst. Atty. Gen., and Sewall Key, Wm. Cutler Thompson, C. M. Gharest, and Stanley Suydam, all of Washington, D. C., for appellee.
Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, and GRONER, Associate Justices.
GRONER, Associate Justice.
This is a tax case and involves the question whether petitioner is entitled- to deduct from gross income for the calendar year 3921 the sum of $30,800, representing the par value of 308 shares of its capital stock, which were issued to its president in January, 1922, in accordance with an agreement claimed to,have been made Juno, 1921.
The appropriate statute is 234 (a) of Revenue Aet 1921 (c. 136, 42 Stat. 227, 254). The statute provides: “That in computing the net income * * * there shall be allowed as deductions: (1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation Eor personal services actually rendered. * * ¡F »
Article 107 of regulations 62 provides: “Bonuses to employees will constitute allowable deductions from gross income when such payments are made in good faith and as additional compensation for the services actually rendered by the employees, provided such payments, when added to the stipulated salaries, do not exceed a reasonable compensation for the services rendered.”
Petitioner was a Pennsylvania corporation engaged in the manufacture of glass specialties, and had an authorized capital stock of one thousand shares of the par value of $100 each. Until 1922 only 850 shares were issued, and these were divided as follows: George R. West, who was president, 327 shares; Charles II. West, secretary treasurer, 192 shares; Ira F. Brainard, 331 shares. Dissatisfaction arose over the conduct of the business, as a result of which George R. West resigned as president in May, 1921, and Charles H. West was elected Ms successor, and Brainard, who had not hitherto been connected with the corporation in an active way, though at all times a director, was elected secretary treasurer for the balance of the year. As a result of George West’s resignation, the principal responsibility of management fell on his brother, Charles West, and the latter expressed a disinclination to discharge this responsibility on the same basis of compensation as formerly. Brainard, recognizing the necessity of meeting this objection, agréed with Charles West that the corporation would acquire the 327 shares of stock belonging to George West for the sum of $60,000, and that the unissued 150 shares of authorized stock would be issued, and the aggregate of these two blocks of stock divided in such way as to give Charles H. West and Brainard each a half ownership in the stock of the corporation.'
. Charles West, in his testimony, describes the transaction as follows: The substance of the agreement entered into at the time his brother retired from the presidency was that witness - and Mr. Brainard would issue stock so as to equalize the ownership of the company between them, so that from that time on they would be equal partners, so to speak, in the business, although in corporate form.
The plan was consummated by the purchase by the corporation of George West’s shares of stock for $60,000, of which 308 shares were later issued to Charles West and 19 to Brainard, who also received the 150 shares of newly issued stock. Petitioner claims- the right to deduct the par value of the shares transferred to Charles West, in other words, the sum of $30,800, as compensation for services for the year 1921. The Board held against the claim, and we think correctly.
We start, of course, with the presumption that the Commissioner’s determination was correct and that the findings of fact by the Board of Tax Appeals are not the subject of review if based upon substantial evidence. The question then is, Was the payment or transfer of stock made' as compensation for personal services, and were such personal services actually rendered ?
The board determined that the treasury stock was transferred for the purpose of effecting an equal distribution of appellant’s authorized capital between Charles H. West and Brainard, and, inf eren tially at least, that this was done to retain Charles West’s services to the corporation indefinitely and in effect to make him an equal partner in the business. If the Board'» conclusion in this respect is correct, it forecloses the question, for the reason that, if the motive of the payment was as found by the Board, the claim now made is untenable. We have, therefore, been at some pains to examine the evidence. Petitioner’s books show that Charles West, first as secretary treasurer and later as president, received in the year in question salary of $9,000 and a cash bonus of $3,000, and that Brainard, as secretary and treasurer for the last seven months- of the' year, received salary of $5,250 and a cash bonus of $3,000. There is nothing else on the books of the corporation to show ’either by resolution or payment any further compensation to Charles H. West. The $60,000 transaction resulting in the acquisition of the stock, the most of which Charles West received, was recorded in the books of the corporation as a capital transaction. The entries in relation to the purchase of the stock and the proper accounting method to balance the books was the subject of a. correction in the accounts made by an expert called in specifically for that purpose, and there is nothing either in the original entry or in the subsequent correction which- indicates that the purchased and reissued capital stock was in compensation of the officers, or any of them, unless the resolution directing the issuance of the stock to Charles West in consideration of “one dollar and other valuable consideration” may be so called; but when it is considered that at the same meeting Brainard, who admittedly performed no special services, was voted 169 shares, likewise in consideration of $1, and when the evidence of the parties themselves, all of which supports rather than refutes the Board’s theory, is also considered, the conclusion is inevitable that the transaction is precisely as found by the Board, and that the present 'claim is purely an afterthought, which it would be grotesque to adopt.
Affirmed.
Question: What is the number of judges who voted in favor of the disposition favored by the majority?
Answer:
|
songer_treat
|
B
|
What follows is an opinion from a United States Court of Appeals.
Your task is to determine the disposition by the court of appeals of the decision of the court or agency below; i.e., how the decision below is "treated" by the appeals court. That is, the basic outcome of the case for the litigants, indicating whether the appellant or respondent "won" in the court of appeals.
INTERNATIONAL CO. OF ST. LOUIS v. SLOAN et al.
No. 2006.
Circuit Court of Appeals, Tenth Circuit.
July 12, 1940.
Rehearing Denied Aug. 19, 1940.
Writ of Certiorari Denied Nov. 12, 1940.
See 61 S.Ct. 142, 85 L.Ed.-.
William L. Mason, of St. Louis, Mo. (Mason & Flynn, of St. Louis, Mo., on the brief), for appellant.
T. M. Lillard, of Topeka, Kan. (Lillard, Eidson & Lewis, of Topeka, Kan., on the brief), for appellee E. R. Sloan, receiver.
George E. Brammer, of Des Moines, Iowa (Joseph I. Brody, Clyde B. Charlton and Louis A. Parker, all of Des Moines, Iowa, on the brief), for appellee Occidental Life Ins. Co.
Before BRATTON, HUXMAN, and WILLIAMS, Circuit Judges.
BRATTON, Circuit Judge.
International Company of St. Louis, hereinafter called claimant, feels aggrieved at the action taken on its claim filed in this proceeding in receivership. The material facts are not in controversy. The Federal Reserve Life Insurance Company, organized under the laws of Kansas, hereinafter called Federal Reserve, was engaged in the life insurance business in Kansas, Missouri, and Indiana; Insurance Investment Corporation, having its principal place of business in Saint Louis, Missouri, was engaged in the business of buying and selling and otherwise dealing in stocks of insurance companies; and Reserve Company, with its principal place of business in Kansas City, Missouri, was likewise engaged in the business of buying and selling and otherwise dealing in stocks of insurance companies. In 1929 Federal Reserve had outstanding 30,000 shares of capital stock of the par value of $10 each, of which Insurance Investment Corporation and Reserve Company owned 5,683 and 8,800 shares, respectively. During that year the Insurance Commissioner of Kansas examined the affairs of Federal Reserve and made a report in which its financial condition was criticized and an impairment of capital and reserves was asserted. To meet that situation, Insurance Investment Corporation made an agreement with Fire Insurance Company of Chicago to advance to Federal Reserve, on behalf of Fire Insurance Company, $300,000 and to take therefor a participating certificate, and to sell to Fire Insurance Company a majority of the outstanding shares of 'stock of the Federal Reserve. Pursuant to such agreement, Insurance Investment Corporation, on November 18, 1929, advanced to Federal Reserve $300,000 and received therefor the participating certificate which contained these provisions:
“For Value Received, The Federal Reserve Life Insurance Company, a Kansas Corporation (hereinafter called the ‘Company’) hereby promises to pay to Insurance Investment Corporation, a Delaware corporation, or its assigns, the sum of Three Hundred Thousand Dollars ($300,-000.00) together with interest thereon from the date hereof at the rate of six per cent (6%) per annum, payable semi-annually, out of a fund to be created by the company setting aside semi-annually on the 30th day of June and the 31st day of December, all net surplus gains in excess of Fifty Thousand Dollars ($50,000.00) until all principal and interest due under this obligation is fully paid. Net surplus gains in excess of Fifty Thousand Dollars ($50,000.00) shall mean that if at any time the Company has a net free surplus of Fifty Thousand Dollars ($50,000.00) that all moneys in excess of that sum shall be paid into the fund above specified.
“The obligation of the Company hereunder is a contingent liability, not an absolute promise to pay, but is limited to its firm obligation and covenant to apply the said surplus gains to the making of the payments herein provided for and is not an obligation to be paid out of the general assets of the Company. other than the fund mentioned in this certificate.”
“In the event of a reinsurance of the business of The Federal Life Insurance Company the reinsuring company shall be bound each six (6) months to pay the savings and profits arising out of the rein-sured business (less such part of such savings and profits as may be payable under prior contracts to other persons or corporations) to the then holder or holders of this certificate or any certificate or certificates issued in lieu of this certificate until the full balance of interest and principal due thereon shall have been paid.” .
On the same day, and for a valuable consideration, Insurance Investment Corporation assigned and delivered such certificate to Fire Insurance Company, and also assigned and delivered, or caused to be assigned and delivered, to Fire Insurance Company, 15,100 shares of the capital stock of Federal Reserve, including its own shares and those held by Reserve 'Company. Claimant subsequently acquired and owns the certificate, on which no part of the principal or interest has been paid.
In 1935, a stockholder and policyholder of Federal Reserve instituted this proceeding in equity in the United States Court for Kansas and prayed for the appointment of a liquidating receiver. The receiver and Occidental Life Insurance Company, hereinafter called Occidental, entered into a contract dated June 13, 1936, which provided among other things that, subject to the terms and conditions therein specified, and not otherwise, Occidental should reinsure and assume the liability of Federal Reserve under its contracts of insurance which were in force and effect on May 22; that coincident with the approval of the contract, title to all of the assets of Federal Reserve should vest in Occidental; that since such assets at their then value were insufficient in amount to cover the reserve liabilities, a lien of fifty per cent of the net equity should be placed against each policy thus reinsured, with provision that the lien should be adjusted at the times and in the manner therein specified, but in no event should it exceed fifty per cent of such net equity; that all assets conveyed, together with all net gains and profits from the business reinsured and from the assets administered by Occidental, should be covered into a separate fund called Federal Reserve Fund; that such fund should be kept in a separate bank account or accounts and that no investment should be acquired with such fund except with the consent and approval of the court ; and that Occidental should furnish the court an annual accounting of such fund as long as the lien should exist against the policies, but in no event after June ,30, 1951. At no time subsequent to the execution and delivery of the certificate did the books and records of Federal Reserve, or reports or statements published or filed with the insurance department of any state in which it was licensed to do business, show or include such certificate as a liability. Occidental had knowledge at the time of the execution of the contract of the existence of such certificate and of claimant’s asserted ownership of it. The court approved the contract and authorized its consummation. Occidental assumed its liability under the contracts of insurance; the receiver transferred, conveyed and delivered the assets to Occidental; the special fund was created; and the contract has been carried out according to its terms. With the money advanced by Insurance Investment Corporation, in the manner outlined, Federal Reserve purchased from a bank a certificate of deposit which was deposited with the Commissioner of Insurance of Indiana as a part of its reserve supporting its' outstanding policies of insurance in that state. A substantial part of the money was subsequently loanedj the notes and mortgages received therefor were deposited with the Commissioner of Insurance of Indiana, and they subsequently became a part of Federal Reserve Fund. On May 22, 1936, the total amount of required reserve on all policies issued or assumed by Federal Reserve exceeded $7,-500,000, and according to an appraisement made after the approval of the contract, the value of all its assets as of that date was $5,115,738.68. The lien imposed against the net equities of the policies assumed by Occidental, as of such date, amounted to $2,718,120.72; after the application of such lien, the surplus funds amounted to $172,511.67; by order of the court such surplus, or such part of it as might be necessary, was reserved for the payment of receivership expenses; and the expenses of the receivership to December 31, 1938, amounting to $157,896.55, were paid by the receiver with funds furnished to him from the Federal Reserve Fund.
Claimant pleaded upon information and belief that profits arising out of the rein-sured business of Federal Reserve in excess of $200,000 had accrued and that profits were constantly and continuously accruing; and it prayed that it be adjudged entitled to a lien upon all such profits superior to that of the policyholders or other parties to the suit. The court disallowed the claim, and the appeal is from that judgment.
The parties discuss at length many questions, but it is unnecessary to consider all of them. It was held on a prior appeal in this case that upon the adjudication of insolvency and the appointment of a receiver, the outstanding policies of Federal Reserve were terminated as enforceable obligations for their respective face amounts; that the holders became creditors with the right to participate pro rata in the assets in receivership, but had no other right; and that the effect of the reinsurance agreement was that with the assets in the hands of the receiver, the policyholders acquired new insurance protection which came from Occidental. Hobbs v. Occidental Life Ins. Co., 10 Cir., 87 F.2d 380. In other words, Occidental acquired from the receiver only the assets in his hands, not the policies as binding obligations of insurance for their respective face amounts.
Claimant does not assert a lien upon all of the assets which the receiver transferred and conveyed to Occidental. It merely contends that it is entitled to a lien upon the gains'and profits of the reinsured business which have accrued under the management of Occidental. It is a rule of universal acceptation that where a contract is ambiguous or doubtful the intention of the parties is of primary importance in determining their rights. And in the ascertainment of such intention the language of the contract, the background against which it was entered into, and the interpretation which the parties placed upon it’ should be taken into account and given great weight. Federal Reserve was in serious financial difficulty. An examination of its affairs resulted in an official report which asserted impairment of its capital and reserve. The situation was critical. Correction was imperative. The condition could not be corrected by borrowing money if it immediately became a liability. To make the essential repair in the capital and reserve structure it was necessary to have new money in the business without a corresponding liability. There was cause for concern on the part of the stockholders.,, There was motive for them to lend aid. Insurance Investment Corporation, a stockholder, made arrangement to secure $300,000 in money which was to be used and was immediately used to increase the reserve for outstanding policies. But no reference to the certificate, as a liability was made on the books and records or in any subsequent report or publication of Federal Reserve, and it is not suggested that the owner of the certificate objected to such omission at any time during the seven years intermediate the date of the certificate and receivership. The facts and circumstances leading up to and attending the transaction, and the omission of reference to the certificate in the books, records, reports and publications, show clearly and convincingly that it was the intention of the parties that the money should go into the capital and surplus structure of the company, should become subject to the risks and hazards of the business, and should be repaid only in the event there were net gains and profits. The effect of the transaction was to create a relationship between the owner of the certificate and the holders of policies and other creditors substantially analogous to that ordinarily existing between a preferred stockholder and creditors. Hamlin v. Toledo, St. L. & K. C. R. Co., 6 Cir., 78 F. 664, 36 L.R.A. 826; In re Lathrap, 9 Cir., 61 F.2d 37.
But claimant'relies strongly upon the language contained in the certificate. It insists that the instrument textually gives it a lien upon the gains and profits which have accrued to the business since Occidental assumed its management. The certificate was addressed to the rights of the parties in three separate and distinct factual situations. The first contemplated a continuation of business on the part of the obligor, and provided that all surplus gains in excess of $50,000 should be paid semi-annually to the holder until the obligation was liquidated in its entirety. That provision indicates a clear purpose to provide that the certificate should constitute a special obligation payable only in the event the company should continue the business and net surplus should accrue. The second contemplated financial difficulty on the part of the obligor, but it’s continuation of the business. It provided that the liability was contingent, not an absolute promise to pay, and was limited to the application of the surplus gains from the special fund referred to, and that the general, assets should not be liable. The third contemplated a discontinuance of the business of the obli-gor, and is the provision to which claimant points with- emphasis. It contemplated a reinsurance of the business, and provided that the reinsuring company should be bound to pay to the holder of the certificate, or any certificate or certificates issued in lieu thereof, the savings and profits arising from the reinsured business, less such part thereof as might be payable under prior contracts to other persons or corporations. It is stipulated that the “prior contracts to other persons or corporations” referred to a participating certificate which Federal Reserve issued to Farmers National Insurance Company of America, of Huntington, Indiana, in 1928, on which the unpaid balance as of May 22, 1936, was in excess of $200,000. But the entire instrument, the purpose for which it was executed, the circumstances attending, surrounding and following its execution, all considered in composite and each given due weight, are strongly indicative of an intent and purpose that this provision should have reference to a voluntary reinsurance of the business. This particular provision, as well as the entire instrument, was silent in respect of the reinsurance of the business in connection with a transfer and conveyance of the assets of Federal Reserve by judicial proceedings. Here the assets passed to Occidental by operation of law, not by mutual consent of the two insurance companies. Gazlay v. Williams, 210 U.S. 41, 28 S.Ct. 687, 52 L.Ed. 950. We think it is clear that the provision has no application whatever to a so-called reinsurance made in such circumstances.
The sale and transfer of the assets under order of the court in the receivership proceeding was equivalent in law to a foreclosure of the paramount lien or interest of the policyholders. Since the only right which claimant had was analogous or akin to that of a preferred stockholder, such foreclosure extinguished any claim on its part to the gains and profits thereafter accruing to the business under the ownership and operation of Occidental.
The judgment is affirmed.
Question: What is the disposition by the court of appeals of the decision of the court or agency below?
A. stay, petition, or motion granted
B. affirmed; or affirmed and petition denied
C. reversed (include reversed & vacated)
D. reversed and remanded (or just remanded)
E. vacated and remanded (also set aside & remanded; modified and remanded)
F. affirmed in part and reversed in part (or modified or affirmed and modified)
G. affirmed in part, reversed in part, and remanded; affirmed in part, vacated in part, and remanded
H. vacated
I. petition denied or appeal dismissed
J. certification to another court
K. not ascertained
Answer:
|
sc_declarationuncon
|
A
|
What follows is an opinion from the Supreme Court of the United States. Your task is to indentify whether the Court declared unconstitutional an act of Congress; a state or territorial statute, regulation, or constitutional provision; or a municipal or other local ordinance. Note that the Court need not necessarily specify in many words that a law has been declared unconstitutional. Where federal law pre-empts a state statute or a local ordinance, unconstitutionality does not result unless the Court's opinion so states. Nor are administrative regulations the subject of declarations of unconstitutionality unless the declaration also applies to the law on which it is based. Also excluded are federal or state court-made rules.
ROGERS v. UNITED STATES
No. 73-6336.
Argued April 14, 1975 —
Decided June 17, 1975
Ralph W. Parnell, Jr., by appointment of the Court, 420 U. S. 943, argued the cause and filed briefs for petitioner.
Allan A. Tuttle argued the cause for the United States. On the brief were Solicitor General Bork, Acting Assistant Attorney General Keeney, Deputy Solicitor General Randolph, William L. Patton, and Marshall Tamor Golding.
Osmond K. Fraenkel and Melvin L. Wulf filed a brief for the American Civil Liberties Union as amicus curiae urging reversal. tioner was arrested on a mandatory release violation warrant (18 U. S. C. § 4164) and was incarcerated pending a revocation hearing.
Mr. Chief Justice Burger
delivered the opinion of the Court.
Petitioner was convicted by a jury on five counts of an indictment charging him with knowingly and willfully making oral threats “to take the life of or to inflict bodily harm upon the President of the United States,” in violation of 18 U. S. C. § 871 (a). The Court of Appeals affirmed, 488 F. 2d 512 (CA5 1974), and we granted certiorari to resolve an apparent conflict among the Courts of Appeals concerning the elements of the offense proscribed by §871 (a). 419 U. S. 824 (1974). After full briefing and argument, however, we find it unnecessary to reach that question, since certain circumstances of petitioner’s trial satisfy us that the conviction must be reversed.
The record reveals that the jury retired for deliberation at 3 p. m. on the second day of petitioner’s trial. Approximately two hours later, at 4:55 p. m., the jury sent a note, signed by the foreman, to the trial judge, inquiring whether the court would “accept the Verdict — 'Guilty as charged with extreme mercy of the Court.’ ” Without notifying petitioner or his counsel, the court instructed the marshal who delivered the note “to advise the jury that the Court’s answer was in the affirmative.” Five minutes later, at 5 p. m., the jury returned, and the record contains the following account of the acceptance of its verdict:
“THE COURT: We understand from a note you sent to the Court the verdict finds him guilty on all five counts but that you wish to recommend extreme mercy; is that correct?
“THE FOREMAN: Yes, Your Honor.
“THE COURT: Will you please poll the jury. (Whereupon the jury was polled and all jurors answered in the affirmative.)
“THE COURT: Let the verdict be entered as the judgment of the Court. Certainly the Court will take into consideration your recommendation of mercy, but before we can act upon the case, we will have the Probation Officer make a pre-sentence investigation report. We do not know whether the man has a prior criminal record or not and we will certainly take into account what you have recommended.” 2 Tr. 192-193.
Generally, a recommendation of leniency made by a jury without statutory authorization does not affect the validity of the verdict and may be disregarded by the sentencing judge. See Cook v. United States, 379 F. 2d 966, 970 (CA5 1967), and cases cited. However, in Cook, the Court of Appeals held that an exception to this general rule, requiring further inquiry by the trial court, arises where the circumstances of the recommendation cast doubt upon the unqualified nature of the verdict. Assuming the validity of the exception, we need not decide whether either the factual differences between the recommendation in Cook and that in the instant case, or petitioner’s failure to request further inquiry prior to the recording of the verdict, see Fed. Rule Crim. Proc. 31 (d), would suffice to distinguish the cases for purposes of appropriate appellate relief. See 8 J. Moore, Federal Practice ¶ 31.07 (2d ed. 1975). We deal here not merely with a potential defect in the verdict.
In Fillippon v. Albion Vein Slate Co., 250 U. S. 76 (1919), the Court observed “that the orderly conduct of a trial by jury, essential to the proper protection of the right to be heard, entitles the parties who attend for the purpose to be present in person or by counsel at all proceedings from the time the jury is impaneled until it is discharged after rendering the verdict.” Id., at 81. In applying that principle, the Court held that the trial judge in a civil case had “erred in giving a supplementary instruction to the jury in the absence of the parties and without affording them an opportunity either to be present or to make timely objection to the instruction.” Ibid.
In Shields v. United States, 273 U. S. 583 (1927), the Court had occasion to consider the implications of the “orderly conduct of a trial by jury” in a criminal case. The trial judge had replied to a written communication from the jury, indicating its inability to agree as to the guilt or innocence of the defendant, by sending a written direction that it must find the defendant “guilty or not guilty.” The communications were not made in open court while the defendant and his counsel were present nor were they advised of them. The jury thereupon found Shields guilty of one count with a recommendation of mercy. This Court held that a previous request by counsel for Shields and the Government that the trial judge hold the jury in deliberation until they had agreed upon a verdict “did not justify exception to the rule of orderly conduct of jury trial entitling the defendant, especially in a criminal case, to be present from the time the jury is impaneled until its discharge after rendering the verdict.” Id., at 588-589.
As in Shields, the communication from the jury in this case was tantamount to a request for further instructions. However, we need not look solely to our prior decisions for guidance as to the appropriate procedure in such a situation. Federal Rule Crim. Proc. 43 guarantees to a defendant in a criminal trial the right to be present “at every stage of the trial including the impaneling of the jury and the return of the verdict.” Cases interpreting the Rule make it clear, if our decisions prior to the promulgation of the Rule left any doubt, that the jury’s message should have been answered in open court and that petitioner’s counsel should have been given an opportunity to be heard before the trial judge responded. See, e. g., United States v. Schor, 418 F. 2d 26, 29-30 (CA2 1969); United States v. Glick, 463 F. 2d 491, 493 (CA2 1972).
Although a violation of Rule 43 may in some circumstances be harmless error, see Fed. Rule Crim. Proc. 52 (a); United States v. Schor, supra, the nature of the information conveyed to the jury, in addition to the manner in which it was conveyed, does not permit that conclusion in this case. The trial judge should not have confined his response to the jury’s inquiry to an indication of willingness to accept a verdict with a recommendation of “extreme mercy.” At the very least, the court should have reminded the jury that the recommendation would not be binding in any way. But see United States v. Davidson, 367 F. 2d 60 (CA6 1966). In addition, the response should have included the admonition that the jury had no sentencing function and should reach its verdict without regard to what sentence might be imposed. See United States v. Louie Gim Hall, 245 F. 2d 338 (CA2 1957); United States v. Glick, supra, at 494. Cf. United States v. Patrick, 161 U. S. App. D. C. 231, 494 F. 2d 1150 (1974).
The fact that the jury, which had been deliberating for almost two hours without reaching a verdict, returned a verdict of “guilty with extreme mercy” within five minutes “after being told unconditionally and unequivocally that it could recommend leniency,” United States v. Glick, supra, at 495, strongly suggests that the trial judge’s response may have induced unanimity by giving members of the jury who had previously hesitated about reaching a guilty verdict the impression that the recommendation might be an acceptable compromise. We acknowledge that the comments of the trial judge upon receiving the verdict may be said to have put petitioner’s counsel on notice that the jury had communicated with the court, but the only indication that the court had unilaterally communicated with the jury comes from the note itself, which the court correctly ordered to be filed in the record, with a notation as to the time of receipt and the court’s response. It appears, however, that petitioner’s counsel was not aware of the court’s communication until after we granted the petition for certiorari. In such circumstances, and particularly in light of the difficult task of the factfinder in a prosecution under § 871 (a), see Watts v. United States, 394 U. S. 705 (1969), we conclude that the combined effect of the District Court’s errors was so fraught with potential prejudice as to require us to notice them notwithstanding petitioner’s failure to raise the issue in the Court of Appeals or in this Court. Silber v. United States, 370 U. S. 717 (1962); Brotherhood of Carpenters v. United States, 330 U. S. 395, 411-412 (1947). Cf. United States v. Davidson, 367 F. 2d, at 63.
The judgment of the Court of Appeals is accordingly reversed, and the case is remanded for further proceedings consistent with this opinion.
Reversed and remanded.
Petitioner was originally sentenced to five years’ imprisonment on each count, subject to the early parole eligibility provisions of 18 U. S. C. § 4208 (a) (2), to be followed by five years’- supervised probation on the condition that he join Alcoholics Anonymous. The sentence on the last four counts was to run concurrently and to be suspended during good behavior. Cf. United States v. Davidson, 367 F. 2d 60, 63 (CA6 1966). It appears from the record that the District Judge sought to use the confinement to afford petitioner an opportunity to be cured of his alcoholism.
At the suggestion of the Court of Appeals, petitioner moved for, and the Government did not oppose, “a reduction of the stringent sentences imposed in the District Court” under Fed. Rule Crim. Proc. 35. The motion was granted, and petitioner’s sentence was reduced to three years’ imprisonment on each count. Petitioner was released from confinement on December 24, 1974. He remains subject to five years’ supervised probation. After argument we were advised by the Solicitor General that on April 7, 1975, peti-
As in Davidson, 367 F. 2d, at 63, the trial court’s response was inconsistent with the instruction in the general charge that “punishment ... is a matter exclusively within the province of the Court and is not to be considered by the jury in arriving at an impartial verdict. . . .” 2 Tr. 190.
Question: Did the Court declare unconstitutional an act of Congress; a state or territorial statute, regulation, or constitutional provision; or a municipal or other local ordinance?
A. No declaration of unconstitutionality
B. Act of Congress declared unconstitutional
C. State or territorial law, regulation, or constitutional provision unconstitutional
D. Municipal or other local ordinance unconstitutional
Answer:
|
songer_judgdisc
|
D
|
What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the court's ruling on the abuse of discretion by the trial judge favor the appellant?" This includes the issue of whether the judge actually had the authority for the action taken, but does not include questions of discretion of administrative law judges. Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".
Ulpiano VARELA CARTAGENA, Defendant, Appellant, v. UNITED STATES of America, Appellee. Ramon LOPEZ ROSA, Defendant, Appellant, v. UNITED STATES of America, Appellee.
Nos. 7066, 7067.
United States Court of Appeals First Circuit.
June 28, 1968.
Manuel Nelson Zapata, New York City, with whom Santos P. Amadeo and Gerardo Ortiz Del Rivero, San Juan, P. R., were on brief, for appellants.
Charles E. Figueroa, Asst. U. S. Atty., with whom Francisco A. Gil, Jr., U. S. Atty., and Blas C. Herrero, Jr., Asst. U. S. Atty., were on brief, for appellee.
Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.
PER CURIAM.
Appellants Cartagena and Rosa are two of three defendants tried under 18 U.S.C. §§ 371 and 472 for conspiracy to pass and for passing counterfeit money. Both were convicted. The third defendant, Rodriguez, was acquitted. Error is principally alleged in the district court’s refusal to grant written and oral motions to sever trial of appellants and Rodriguez on the ground of conflicting defenses and the disclosure by counsel for the latter that his client’s testimony could be substantially damaging to codefendants.
Where, as here, the joinder requirements of Fed.R.Crim.P. 8(b) are satisfied, relief in this court is available only upon a showing of abuse of discretion by the trial court in refusing severance under Fed.R.Crim.P. 14. Sagansky v. United States, 358 F.2d 195, 199-200 (1st Cir.), cert, denied, 385 U.S. 816, 87 S.Ct. 36, 17 L.Ed.2d 55 (1966). We find none on the facts of this case. To be sure, the effect of Rodriguez’ testimony was to exculpate himself and to inculpate appellants. His defense was not that none of the alleged acts occurred or that he did not himself pass counterfeit money but that, having had no knowledge that it was counterfeit, he lacked the requisite mens rea for conviction. His testimony was that he was walking outside his home, was given a ride to town by appellants, and was persuaded to go to the patron saint’s festivities in another town. In the course of an evening of drinking, he and appellant Rosa each made several separate purchases of rum with a twenty dollar bill received from appellant Cartagena on each occasion. At the last stop, when a bill was discovered as counterfeit, appellants left precipitately by car, leaving Rodriguez behind to face the music.
This testimony contained no admissions attributable to appellants. It was unlike the testimony in many conspiracy cases in which incriminating statements by a non-testifying co-conspirator are admissible from the lips of a testifying co-conspirator in a joint trial or not at all. Rodriguez’ testimony in this case would have been competent at appellants’ separate trial had one been granted. Whether Rodriguez were to be tried before or after Cartagena and Rosa, whether at the time of such trial he had been convicted, acquitted or were still an accused, he would in all probability still have been a witness for the government and could have as effectively damaged appellants. We see no prejudice here, to say nothing of a strong showing of prejudice. Sagansky v. United States, supra at 199.
Three other points are raised for the first time in this appeal, without objection having been taken below or noted in the statement of points on appeal as required by our rule 23(2). Neither singly nor in combination do they rise to the level of plain error noticeable under Fed.R.Crim.P. 52(b).
The first of these asserted errors is that counsel for Rodriguez, in the course of a lengthy summation stressing credibility, twice mentioned that his client had testified and subjected himself to cross-examination. The record is bereft of any mention of appellants’ silence or any guile or innuendo. It is in sharp contrast to the situation in either Desmond v. United States, 345 F.2d 225 (1st Cir. 1965), or De Luna v. United States, 308 F.2d 140 (5th Cir. 1962). The privilege against self-incrimination of a co-defendant who does not choose to testify does not go so far as to deprive one who does so choose of effective argument in his behalf, so long as it is, as it was here, sensitive to the rights of others. Cf. United States v. Knox Coal Co., 347 F.2d 33 (3d Cir.), cert, denied, 382 U.S. 904, 86 S.Ct. 239, 15 L.Ed.2d 157 (1965); United States v. Parness, 331 F.2d 703 (3d Cir.), cert, denied, 379 U.S. 801, 85 S.Ct. 10, 13 L.Ed.2d 20 (1964).
A second alleged error is that the court charged that all witnesses are presumed to speak the truth and that a presumption “is a deduction or a conclusion which the law requires you to make under certain circumstances. * * * ” Appellants cite our disapproval of such an instruction in McMillen v. United States, 386 F.2d (1st Cir. 1967). But unlike the situation in McMillen where we found plain error, the court below did not fail to give an appropriate instruction as to accomplice testimony, there was no other error interacting with the presumption instruction to elevate it to plain error, and there was adequate corroborating evidence apart from Rodriguez’ testimony.
Finally, appellants charge error in the closing argument of Rodriguez’ counsel who, referring to the evidence that Rodriguez had given a statement to the police, argued that had his testimony varied from the statement, there would have been an attempt to impeach him. Appellants seek to equate this with an improper use of a prior consistent statement. To assert such a ground as plain error indicates only that our strictures in Dichner v. United States, 348 F.2d 167 (1st Cir. 1965), have not yet reached all of their intended audience.
Affirmed.
Question: Did the court's ruling on the abuse of discretion by the trial judge favor the appellant? This includes the issue of whether the judge actually had the authority for the action taken, but does not include questions of discretion of administrative law judges.
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:
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