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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America v. Esau WASHINGTON, Appellant. No. 72-1203. United States Court of Appeals, District of Columbia Circuit. Jan. 31, 1973. Lois R. Goodman, Washington, D.C. (appointed by this Court), was on the brief for appellant. Harold H. Titus Jr., U. S. Atty., John A. Terry, Lester B. Seidel, and Joseph F. McSorley, Asst. U. S. Attys., were on the brief for appellee. Before BAZELON, Chief Judge, ELBERT P. TUTTLE, United States Senior Circuit Judge for the Fifth Circuit, and WRIGHT, Circuit Judge. Sitting by designation pursuant to Title 28, U.S.C. § 294(d). BAZELON, Chief Judge: Esau Washington was convicted of armed robbery, assault with a dangerous weapon, and carrying a pistol without a license, and sentenced to prison terms on these charges. Eleven months later, he filed a pro se notice of appeal and a motion to proceed in forma pauperis. The motion was denied because the appeal had been untimely filed. Subsequently, Washington filed a motion to vacate sentence under 28 U.S.C. § 2255 on grounds that his appointed trial counsel had not informed him of the ten-day time limit for filing criminal appeals. At the hearing on the motion, Washington was the only witness and his credibility was the only issue. The District Judge decided that Washington’s testimony was not credible and denied the motion. Washington now appeals that denial, arguing (a) that the decision was tainted by the admission of prejudicial, harassing, and diversionary evidence, and (b) that it was contrary to the weight of the evidence. We find these points to be without merit. The evidence complained of — dealing with Washington’s relations with his lawyers and his vacillation over pleading guilty —was put directly in issue by the nature of his claim and his statements at the hearing. The credibility of the witness and the weight of the evidence are issues to be determined by the trial court, and the record does not indicate that the judge’s findings in this case are clearly erroneous. Accordingly, we affirm the denial of Washington’s motion. There is, however, a further matter which makes us uncomfortable about this case. The record before us, although incomplete, gives rise to a lingering doubt as to whether Washington received the meaningful advice and assistance of counsel to which he is entitled under the 6th Amendment. A brief review of the facts presently available will demonstrate the basis for our concern. A lawyer in private practice was appointed to represent Washington at the time of the arraignment. This attorney apparently urged Washington to plead guilty, and Washington entered a plea of guilty to robbery and carrying a deadly weapon. Within a few weeks, however, Washington withdrew his plea and elected to go to trial. At that point his attorney moved to withdraw from the case, citing “disputes” between himself and Washington concerning the withdrawal of the plea. A new lawyer was appointed. There is little evidence as to the extent of the second lawyer’s work on the case. He did not testify at the § 2255 hearing, because neither the government nor Washington could find him (according to the government's brief, the lawyer has left the District to avoid a jail sentence for contempt of court in an unrelated matter). From the few records available, it appears that he interviewed no witnesses in the case. After Washington wrote a letter from jail asking the District Court to “send him over here so I can meet him”, the attorney interviewed Washington. Based on the interview, the lawyer opined that “there is only one approach to this case and that is that we try to arrange for a plead (sic) of guilty to one or more of the charges. . . . My feeling with regard to the foregoing is final and I do not feel I can be persuaded to feel otherwise.” Washington still insisted on going to trial. Possibly because of this disagreement, or perhaps because of his inexperience in criminal law, the attorney decided to withdraw from the case; not until the day of the trial, however, did he move for leave to withdraw. The motion was denied. The judge did direct a lawyer from the Legal Aid Agency to “act as advisor” to the defense. It is not clear how much this advisor contributed; it is obvious, however, that he had no chance whatsoever for preparation of the case. While these facts sow the seed of doubt, we cannot say at this point whether or not Washington received effective assistance of counsel. The lawyers’ insistence on a guilty plea may have been the result of careful and informed analysis of the situation. The presence of the Legal Aid advisor may have made up for trial counsel’s inexperience and apparent lack of preparation. If so, Washington could not say that his rights under the 6th Amendment were denied. However, if a review by competent counsel of all pertinent information, including the trial transcript (not before us on this appeal) and matters outside the trial record, indicates that Washington has a meritorious Constitutional claim — that the legal assistance rendered him prior to or during the trial was inadequate — our action today would not preclude a new motion under 28 U.S.C. § 2255. Sanders v. United States, 373 U.S. 1, 83 S.Ct. 1068, 10 L.Ed.2d 148 (1963); 2 Wright, Federal Practice and Procedure, § 602. . D.C.Code § 22-2901. . D.C.Code § 22-502. . D.C.Code § 22-3204. . His trial counsel was not available, for reasons explained below. . The attorney’s voucher for compensation under the Criminal Justice Act indicates that no time was spent interviewing witnesses. Although this is not irrefutable evidence, this particular attorney was apparently not inclined to understate the hours he spent on the case; see note 6, infra. . Although the point is not clear, the record seems to indicate that the attorney interviewed Washington only once. Yet he billed the government for compensation for eight hours of time spent in “interviews with client”. The available evidence does not explain this apparent inconsistency,

f2d_475/html/0359-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America v. Lewis HARRIS, Appellant. No. 71-1481. United States Court of Appeals, District of Columbia Circuit. Argued May 24, 1972. Decided Feb. 5, 1973. Robert G. Hardy, Washington, D. C., with whom Christopher T. Boland, Washington, D. C. (both appointed by this court), was on the brief, for appellant. Percy H. Russell, Jr., Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., John A. Terry, Asst. U. S. Atty., and David C. Woll, Asst. U. S. Atty. at the time the brief was filed, were on the brief, for appellee. Before BAZELON, Chief Judge, WRIGHT, Circuit Judge, and WYZANSKI, Senior United States District Judge for the District of Massachusetts. Sitting by designation pursuant to 28 U.S.C. § 294(d) (1970). PER CURIAM: Appellant Harris was convicted of robbery and assault with a dangerous weapon on the basis of wholly uncorroborated in and out of court identification evidence provided by two of his alleged victims, Miller and Carter. Appellant raises several issues, including identification. There are numerous facts in the record which cast substantial doubt on the validity of the identification evidence and raise the possibility of mistake. These include: 1. The poor lighting conditions and extremely short period of observation during the crime. 2. The inability of the victims to provide an accurate description of appellant to the police. 3. The failure of Carter to identify appellant from 10 black and white photographs. 4. The fact that Carter initially made an erroneous lineup identification. 5. The fact that Carter failed to identify appellant at the suppression hearing. 6. The fact that appellant’s photograph happened, by pure coincidence, to appear among 10 randomly selected pictures picked from the thousands on file for showing to Miller and Carter. 7. The fact that appellant was arrested when he appeared, of his own volition, at the police station in order to secure a “job clearance.” In the recent case of United States v. Caldwell, 151 U.S.App.D.C. 84, 87, 465 F.2d 669, 672 (1972) (per curiam), a panel of this court refused to affirm a conviction based upon similarly dubious identification testimony. Instead, the court remanded the record with the following observation: “The District Court has authority to grant a new trial, even when there is enough evidence to go to the jury. Since the ease is close on the issue identified, and the overall context has elements of doubt, we think it warrants a hard look by the District Court, and a fresh determination as to what action should be taken in the interest of justice.” (Footnotes omitted.) In accordance with Caldwell, and acknowledging the broad discretion of the District Court, we remand the record in this case so that the District Court can make a fresh determination as to what action should be taken in the interest of justice. Remanded.

f2d_475/html/0360-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Asa H. ASHER, Jr., et al., Appellants, v. Melvin LAIRD, Secretary of Defense. No. 71-1617. United States Court of Appeals, District of Columbia Circuit. Argued Oct. 26, 1972. Decided Feb. 5, 1973. Mattaniah Eytan, Washington, D. C., for appellants. Julius Kaplan, Washington, D. C., also entered an appearance for appellants. Anthony J. Steinmeyer, Atty., Department of Justice, with whom L. Patrick Gray, III, Asst. Atty. Gen., at the time the brief was filed, Harold H. Titus, Jr., U. S. Atty., and Alan S. Rosenthal, Atty., Department of Justice, were on the brief, for appellee. Before DANAHER, Senior Circuit Judge, and MacKINNON and ROBB, Circuit Judges. PER CURIAM: The appellants in this action are thirteen United States civilians formerly employed in South Vietnam by a U.S. Army contractor. The United States Military Assistance Command, Vietnam (MACV) determined that each employee, while in Vietnam, had violated certain regulations restricting the use of personal checks payable in U.S. dollars. Following an administrative hearing, MACV declared the employees unacceptable for employment in South Vietnam by the United States Government or under Government-financed contracts. In addition, MACV withdrew the employees’ military-related privileges. Appellants in this action are seeking to set aside the MACV order after exhausting MACV appeal procedures. The Secretary of Defense, the Secretaries of the Army, Navy and Air Force, and three U.S. military officers are named as parties defendant. The District Court denied the employees’ motion for a preliminary injunction which would have restored them to an acceptable employment status while this litigation is pending. The District Court seemed to rest its decision principally on the failure of the appellants to demonstrate a substantial likelihood of succeeding on the merits. It is from this denial of a preliminary injunction that this appeal is taken. The granting of such extraordinary relief is a matter of the trial court’s discretion as guided by a standard consisting of the following familiar factors: (1) Has the plaintiff made a strong showing that it is likely to prevail on the merits of its appeal?; (2) Has the plaintiff shown that without such relief it will be irreparably injured?; (3) Would the issuance of the injunction substantially harm other parties interested in the proceedings?; (4) Where lies the public interest? Virginia Petroleum Jobbers Ass’n v. F.P.C., 104 U.S.App.D.C. 106, 110, 259 F.2d 921 (1958). We find no error in Judge Hart’s denial of the appellants’ motion for preliminary injunction. His July 28, 1971 order recites his determination that the appellants had “failed to demonstrate the likelihood of success on the merits of this litigation.” His order was supported by explicit findings of fact which we have appended to this opinion for a more complete understanding of the nature of the appellants’ claims. Specifically let it be noted that each employee had agreed in his employment contract to abide by the MACV directive and the Government’s agreement with the contractor-employer required dismissal of any employee found to be engaging in currency violations. While appellants raise many objections to this analysis and other aspects of the MACV’s actions, we express no opinion on the merits of this dispute other than to conclude that the trial court did not abuse its discretion in determining that appellants did not adequately demonstrate a substantial likelihood of success for purposes of an inquiry into the propriety of a preliminary injunction. Even had appellants demonstrated such a likelihood, there has been no showing on the other three elements of the above test. There is no irreparable harm threatened here since appellants can receive full redress in the action for back pay and reinstatement of- their prior employment status. There also seems to be little point in granting a preliminary injunction which could possibly be interpreted as casting doubts upon the integrity of the MACV’s regulations. Finally, the valid public interest in a policy of strict governmental regulation of currency and international black marketeering appears to be overwhelming. For the foregoing reasons, the decision of the District Court denying the preliminary injunction is Affirmed. APPENDIX Asa H. Asher, et al., Plaintiffs, v. Melvin Laird, et al., Defendants. Civil Action No. 538-71 FINDINGS OF FACT 1. Plaintiffs are thirteen civilians who at all revelant times were employed by a government contractor, Pacific Architects and Engineers (PA&E), to work on a government contract in South Vietnam. 2. Each of the plaintiffs signed an employment contract with PA&E in which he agreed, inter alia, that his employment could be terminated for cause if he violated certain applicable regulations issued by the United States Military Assistance Command, Vietnam, (MACV), specifically including MACV Directive 37-6, regarding Financial Administration — Regulation of Currency. 3. An investigation conducted by military authorities revealed that during the period from June 15, 1970, through August 19, 1970, the plaintiffs drew and delivered in Vietnam to one James Edwards, then an employee of PA&E in Vietnam, their personal checks totaling nineteen in number and in the approximate amount of $4,341.00. 4. These checks drawn by plaintiffs were made payable either to the Crocker Citizens National Bank or to Mr. Edwards and thereafter were deposited in Mr. Edwards’ bank account maintained in the Crocker Citizens National Bank, Carmichael, California. 5. MACV Directive 37-6 provides in Paragraph 7a: Except as provided in this section or otherwise authorized in writing by COMUSMACV, the possession, delivery and/or use of US currency and/or dollar instruments in the RVN is expressly prohibited. 6. Paragraph 9c of MACV Directive 37-6 provides in pertinent part that: Personnel authorized MPC, official agencies and instrumentalities and US Government contractors are prohibited from delivering US currency or dollar instruments to any individual in the RVN, regardless of the individual's status, except as specifically authorized by this or other MACV directives. 7. A dollar instrument is defined in Paragraph 4f of MACV Directive 37-6 so as to include “signed personal checks and other signed checks or drafts which are negotiable in US dollars.” 8. In accoz-dance with applicable procedures set forth in MACV Directive 190-13, also applicable to plaintiffs, the plaintiffs were notified on January 30, 1971, that the issuance of their personal checks to Mr. Edwards constituted apparent violations of the provisions of MACV Directive 37-6 and could result in the withdrawal of military sponsored privileges including a declaration that plaintiffs would be unacceptable for employment on government contracts in Vietnam. Each plaintiff was afforded the opportunity to present information to military officials for their consideration. 9. All of the plaintiffs submitted affidavits in which they admitted drawing checks while in Vietnam in favor of Mr. Edwards. 10. On May 16, 1971, it was determined by appropriate officials of MACV that on the basis of the violation of MACV Directive 37-6 the military sponsored privileges would be withdrawn from plaintiffs and that they would be determined to be ineligible for employment in the Republic of Vietnam under U.S. Government financed contracts. Plaintiffs were notified to this effect and were also notified they could appeal the determination under the provisions of MACV Directive 190-13. 11. At the request of plaintiffs’ attorney, a consolidated appeal hearing for all the plaintiffs was held on June 21, 1971, before the MACV Appeals Board in Saigon. Plaintiffs were represented by their attorney and documentary evidence was submitted by plaintiffs’ attorney and by the Recorder of the Board. None of plaintiffs appeared at the hearing although opportunity was given to them to do so. 12. No live testimony was presented to the Board which was composed of military officers and officials of the American Embassy and the Agency for International Development. 13. After considering all of the evidence and the arguments presented, the Board made a unanimous recommendation that the appeals be denied. That recommendation was approved on June 27, 1971, by General Cowles, Chief of Staff, United States Military Assistance Command, Vietnam. 14. The evidence before the Appeals Board establishes that plaintiffs wrote checks and delivered them in violation of specific provisions of MACV regulations, which regulations were applicable to the plaintiffs. CONCLUSIONS OF LAW 1. MACV has authority to promulgate and administer MACV Directive 37-6. This directive is a reasonable regulation of currency matters under the circumstances existing in Vietnam and can properly be applied to United States civilians who are in Vietnam and are working on U.S. Government financed contracts. 2. Military officials have accorded the plaintiffs the full procedural rights provided for in MACV Directive 190-13. 3. Plaintiffs have failed to demonstrate the likelihood of success on the merits of this litigation. July 28, 1971 s/ George L. Hart, Jr. United States District Judge . Specifically, appellants were found to have violated MACV Directive 37-6 which provides in pertinent part: Except as provided in this section or otherwise authorized in writing by COMUSMACV, the possession, delivery and/or use of TJS Currency and/or dollar instruments in the RVN is expressly prohibited. Personnel authorized MPC, official agencies and instrumentalities and US Government contractors are prohibited from delivering US currency or dollar instruments to any individual in the RVN, regardless of the individual’s status, except as specifically authorized by this or other MACV directives. Defendant’s Exhibit G; App. 7. Appellants were found to have issued dollar instruments to one Edwards inside the Republic of Vietnam. . Plaintiffs’ Exhibit G; App. 40-42. . Appellants sought a temporary restraining order and preliminary injunction which Judge Hart, after a hearing in the District Court, denied on March 12, 1971. . The reason for the denial of the relief first sought in the District Court (see note 3, supra) was that MACV administrative remedies had not been exhausted. . Asher v. Laird, Civil No. 538-71 (D.D.C. filed July 28, 1971). {See the District Court’s Findings of Fact and Conclusions of Law appended to this opinion.)

f2d_475/html/0364-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Mary BURKE et al., Appellants, v. WASHINGTON HOSPITAL CENTER et al. No. 71-1452. United States Court of Appeals, District of Columbia Circuit. Feb. 9, 1973. A. Lillian C. Kennedy and Mabel D. Haden, Washington, D. C., were on the brief for appellants. John L. Ridge, Jr., Washington, D. C., was on the brief for appellee. Before ELBERT P. TUTTLE, United States Senior Circuit Judge for the Fifth Circuit, and TAMM and WILKEY, Circuit Judges. Sitting by designation pursuant to 28 U.S.O. § 294(d). PER CURIAM: Plaintiffs-appellants, husband and wife, brought this action seeking damages for failure to remove a surgical sponge from Mary Burke’s abdomen during an operation performed by Dr. Ernest W. Lowe. Washington Hospital Center, as codefendant and employer of the nurses who attended at the operation, reached a settlement with plaintiffs shortly before trial. After trial below on the remaining claim against Dr. Lowe (who was not an employee of the Hospital), the jury returned verdicts in favor of appellants. However, the trial court subsequently granted a judgment notwithstanding the verdict on the ground that plaintiffs had not introduced “any evidence from which the jury could properly find the defendant Lowe liable.” We conclude that the grant of judgment n. o. v. was in error. Plaintiffs’ evidence that a surgical sponge was left inside Mrs. Burke during the operation performed by Dr. Lowe establishes a prima facie case of negligence. The jury could infer negligence without any further showing, under the doctrine of res ipsa loquitur, because the event complained of is clearly one which “ordinarily would not happen in the absence of negligence.” Raza v. Sullivan, 139 U.S.App.D.C. 184, 432 F.2d 617, 620 (1970); Quick v. Thurston, 110 U.S.App.D.C. 169, 290 F.2d 360 (1961). Appellee’s brief virtually admits the application of the doctrine of res ipsa loquitur, but contends that there was defense evidence adequate to overcome any inference from that doctrine alone. We disagree. The defense consisted primarily of Dr. Lowe’s testimony that he carefully searched the abdominal cavity. However, since the jury was free to disbelieve his testimony, it does not necessarily refute the inference from res ipsa. “Defense testimony that due care was used will not in itself eliminate the inference rooted in the probabilities of human experience.” Raza v. Sullivan, supra, 432 F.2d at p. 621, n. 7. Appellee attempted to shift responsibility for the injury by asserting-that the nurse’s sponge count was reported (obviously erroneously) as in order. While this may be enough to support shared liability on the part of the nurse’s employer, Washington Hospital Center, it does not relieve the operating and supervising surgeon of his responsibility. The proper procedure to be followed by the doctor after receiving notice of á “correct” sponge count ultimately relates to the required professional standard of care. Appellee contends that the evidence before the jury did not adequately establish what that standard requires. However, this appears to be that rare sort of case in which the type of harm itself raises so strong an inference of negligence, and the physician’s duty to prevent the harm is so clear, that expert testimony is not required to establish the prevailing standard of care. Raza v. Sullivan, supra, 432 F.2d at p. 619, n. 3; Young v. Fishback, 104 U.S.App.D.C. 372, 262 F.2d 469 (1959). Even if expert testimony were required to establish that standard, it was provided by Dr. Lowe himself when he testified that “the ultimate responsibility is the doctor’s, he is always responsible for the patient.” (Tr. 60). See 12 A.L.R.3d 1017, 1021. A “correct” sponge count may reduce the scope of further inspection required of the doctor; but, as previously noted, the jury was free to disbelieve Dr. Lowe’s version of events and to infer that not even a cursory cheek was conducted. There was a jury issue presented in this case. The jury found against the defendant. Since the trial judge cannot be permitted to substitute his own view of the evidence, the grant of judgment n. o. v. must be reversed. On 10 March 1971 the District Court entered an order providing that any jury verdict returned against Dr. Lowe would be reduced to 50%. In light of the settlement with Washington Hospital Center, counsel for both sides had agreed to such a reduction. There has been no appeal from that order. Accordingly, this case is remanded to the District Court for entry of a judgment reinstating the jury’s verdict and reducing it in conformity with the order of 10 March 1971. So ordered.

f2d_475/html/0366-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

In re D. C. HUMAN RELATIONS COMMISSION v. NATIONAL GEOGRAPHIC SOCIETY, Appellant. No. 71-1248. United States Court of Appeals, District of Columbia Circuit. Argued Oct. 30, 1972. Decided Feb. 13, 1973. Arthur B. Hanson, Washington, D. C., with whom W. Frank Stickle, Jr., and Ralph N. Albright, Jr., Washington, D. C., were on the brief, for appellant. Ted D. Kuemmerling, Asst. Corp. Counsel for the District of Columbia, with whom C. Francis Murphy, Corp. Counsel, and Richard W. Barton, Asst. Corp. Counsel, were on the brief, for appellee. Before McGOWAN and MacKINNON, Circuit Judges, and WYZANSKI, Senior United States District Judge for the District of Massachusetts. Sitting by designation pursuant to 28 U.S.C. § 294(d). WYZANSKI, District Judge: December 27, 1968 the District of Columbia Human Relations Commission served upon the National Geographic Society a complaint alleging that the Commission had reasonable cause to believe that the Society was “discriminating against minority groups in its recruiting and hiring methods in ways which tend to deprive them of equal employment opportunities and such methods are in violation of Article 47 of the Police Regulations of the District of Columbia.” September 4, 1970 the Commission, by amendment to the complaint, particularized the alleged violation. November 24, 1970 the Commission served upon the Society a subpena duces tecum to produce twelve categories of information as follows: 1. All employment applications received in the last six months, including, but not limited to, those for applicants hired, rejected or pending. 2. A payroll list or printout of all employees on staff as of the first pay period in October, including, but not limited to, record of gross salary earned by each employee. 3. Job descriptions for all jobs, including, but not limited to, salary levels for each job. 4. Description of qualifications required for all jobs, including, but not limited to, educational requirements. 5. Copies of all employment tests administered, test manuals and copies of any validation studies made in connection therewith. 6. Copies of all correspondence with any recruitment sources utilized during the past year. 7. A copy of each employment application form used. 8. A copy of all personnel policies promulgated or circulated to employees. 9. An organization chart indicating number of employees in each organizational unit. 10. A copy of any affirmative action plan, filed with any governmental agency. 11. All records relative to the establishment, scheduling and routing of the employees’ bus service to the Gaithersburg facility. 12. Copies of any and all union contracts affecting employees. The Society moved the District Court to quash the subpena. February 22, 1971 the District Court, without opinion, entered an order denying the motion to quash. The Society appealed. Appellant’s argument has five points. 1. The Society contends that Article 47 of the Police Regulations of the District of Columbia, pursuant to which the Commission acted, was not published in the compilation allegedly required by the District of Columbia Administrative Procedure Act, and for that reason was not in effect at the time the subpena was issued. There is no merit to the point. In the July 27, 1970 Special Edition of the District of Columbia Register the District Government incorporated in the District of Columbia Register the District of Columbia Police Regulations. Such regulations were and are available for purchase at the District of Columbia Publications Office. The Register thus adequately informed its readers of the full text. Congress never contemplated more, for D.C.Code, § 1-1504(a) (Supp. IV, 1971) provides that although in general the Register shall set forth the full text, “the Commissioner may in his discretion omit from the District of Columbia Register rules the publication of which would be unduly cumbersome, expensive, or otherwise inexpedient, if, in lieu of such publication, there is included in the Register a notice stating the general subject matter of any rule so omitted and stating the manner in which a copy of such rule may be obtained.” Full compliance with the conditions of this exception is not doubtful. But it is implausibly argued that the exception does not apply to regulations, such as these, which antedated the October 21, 1969 effective date of D.C.Code § 1-1507 (Supp. IV, 1971). There is nothing in the language or policy of the act to support such an argument, which seems to us frivolous, especially since the Society admits that without difficulty or delay it immediately procured the relevant regulations when it wanted them. 2. Next, the Society argues that the complaint, the amendment, and the subpena are invalid because the Commission failed to promulgate rules of procedure as required by the District of Columbia Administrative Procedure Act. However, April 15, 1971 the Commission promulgated and published rules of procedure. See 8 D.C.R.R. 1.1 et seq. The Society has not been prejudiced by the delay. It now knows all that it needs to learn of the procedure in order to answer the subpena. Even if we assume that such knowledge was a prerequisite to the enforcement, by a contempt proceeding, of the District Court’s order, it certainly was not a prerequisite to the issuance of the subpena or to the entry of the District Court’s order. 3. Then, the Society claims that neither the complaint nor the amendment validly alleges a violation of Article 47 of the Police Regulations because the pleadings are not sufficiently specific. As Justice Frankfurter would have said, we have outgrown the formalism of Baron Parke. Modern cases fully support the sketchy nature of the instant complaint and amendment. Graniteville Co. (Sibley Div.) v. Equal Employ. Op. Com’n, 438 F.2d 32 (4th Cir., 1971); Sanchez v. Standard Brands, Inc., 431 F.2d 455 (5th Cir., 1970); Bowaters Southern Paper Corp. v. Equal Employ. Op. Com’n, 428 F.2d 799 (6th Cir., 1970); United States v. Gustin-Bacon Div. Certain-Teed Prod., 426 F.2d 539 (10th Cir., 1970). 4. Penultimately, the Society contends that the subpena is invalid because it was issued by the Executive Director of the Commission to whom the issuing power was not validly delegated. Here again the appellant has presented a sleeveless argument. The subpena states that it was issued under the authority granted by D.C.Code, § 1-237 (1967). That statute authorized the former District of Columbia Board of Commissioners to issue subpenas. As of June 10, 1965, when the Board of Commissioners enacted Article 47 of the D.C. Police Regulations, heretofore mentioned, they specifically provided that defendant (then operating under the name of “Commissioners Council on Human Relations”) “and its Executive Director shall possess the powers vested in the Commissioners by that Act.” Authorization for the aforesaid delegation is conferred by Reorganization Plan 5 of 1952. (66 Stat. 824, D.C.Code, Title I, Appendix, 1967 ed.). 5. The Society’s final point is that the District Court should have quashed the subpena because it is overly broad and oppressive, requires the Society to prepare and compile information, and demands items irrelevant to the complaint. We agree that on the record as it stands there is some merit to this point. We have no indication that either of the parties offered detailed argument to the District Court on any of the twelve categories of items to be produced, nor attempted to assess the relevance or the burden of the items. So far as appears, the parties treated the Court like the daysman on the shield of Achilles in the Iliad, that is, as an arbitrator limited to choosing between either one of two extreme positions but not free to form a wholly informed and truly independent judgment of the relevance of the items to the controversy and of the burdensomeness of compliance with the subpena. We do not suggest, that the District Court should be placed in the laborious position of ruling, unasked, upon each detail of the subpena as it would rule upon a question to which objection was taken at a trial. Yet the procedure here followed in the District Court seems to us inconsistent with the brooding omnipresence of the Fourth Amendment and with the growing recognition of the wisdom of Justice Brandeis’ remark that the Constitution “conferred, as against the government, the right to be let alone — the most comprehensive of rights and the right most valued by civilized men.” Olmstead v. United States, 277 U.S. 438, 478, 48 S.Ct. 564, 572, 72 L.Ed. 944 (1928). Without suggesting that the Commission here was engaged in a fishing expedition or in a search pursuant to an ulterior, unacknowledged purpose, and while recognizing how much need there is in a matter of this kind for background and statistical data and how thorough must be the scrutiny of many items which in their individual aspect seem insignificant but which in their totality reveal a pattern, we are concerned lest the judiciary lend itself to rubber-stamping the demands of administrative agencies which naturally enough have a zeal and sense of righteousness commensurate with the importance of their mission and the difficulties of its accomplishment. What we deem appropriate is for the Commission, when challenged, to prove to the trial court by argument, not necessarily nor usually by evidence, that its demands are proper and necessary. The burden of persuasion rests upon it. And the trial court has the duty, in a contested case, of making explicit its rulings, though, of course they may have an orotund generality, as is usual in discovery proceedings. We conclude that in this case a remand to permit this procedure is required because at our bar the Corporation Counsel representing the Commission admitted that paragraph 11 of the subpena should be struck, and that the subpena does not make it clear that it is limited, as apparently intended, to positions within the District of Columbia. Furthermore, we are not clear, and our confusion seemed to be shared by counsel, as to what is the starting date of the information sought. In the event the parties are unable to agree on a reasonable starting date for the information sought, the court shall fix the date. Whatever shape the subpena may have after it has been suitably tailored, it ought to bear the date of the final version. Reversed and remanded.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

In re ESTATE of Dorothy H. BURROUGHS, Deceased. Ann Burrough (Donovan) CENNAMO, Appellant, v. AMERICAN SECURITY & TRUST COMPANY et al., Appellees. No. 71-1538. United States Court of Appeals, District of Columbia Circuit. Feb. 23, 1973. Anthony D. Cennamo, Columbus, Ohio, George R. Douglas, Jr., Washington, D. C. , were on the brief for appellant. John L. Laskey, Washington, D. C., was on the brief for appellee Cynthia D. Reiche and Dean S. Reiche, Guardian ad Litem. Arthur C. Elgin, Washington, D. C., was on the brief for Janet T. Reiche. Benton C. Tolley, Washington, D. C., was on the brief for American Security & Trust Co. Before SOBELOFF, United States Senior Circuit Judge for the Fourth Circuit, and TAMM and LEVENTHAL, Circuit Judges. Sitting by designation pursuant to 28 U.S.C. § 294(d). LEYENTHAL, Circuit Judge: On November 14, 1969, appellant filed a caveat contesting the validity of the will executed by her mother on March 5, 1969, some two months prior to death and a codicil thereto, executed on April 24, 1969. The caveat alleged fraud, undue influence and lack of testamentary capacity, and, after amendment, further alleged that a testamentary trust violated the rule against perpetuities. Appellant is the sole heir at law of the testatrix. She is also the beneficiary under a 1966 will under which she would obtain substantially all of her mother’s property, though full enjoyment would be postponed until she became 35. The 1969 will and codicil would, if effective, operate to reduce appellant’s interest substantially. Appellant consented to admission to probate of the 1969 testamentary documents but specifically reserved her right to file a caveat thereto. The appellant accepted distributions made to her pursuant to the will, both prior to and subsequent to her filing of the caveat, amounting to $17,000 as of September 3, 1970. The trustee bank, and the guardians ad litem of those who are residuary beneficiaries under the trust established by the 1969 will, sought summary judgment. The District Court, 318 F.Supp. 366, granted summary judgment on the ground that the acceptance of benefits under a will estops the recipient from contesting the validity of a will. The court relied on Utermehle v. Norment, 22 App.D.C. 31 (1903), aff’d 197 U.S. 40, 25 S.Ct. 291, 49 L.Ed. 655 (1905), and found that there was no supported contention of any fraud or misrepresentation which might operate to avoid the rule of estoppel. Appellant relied in the District Court on the undisputed fact that the amounts she received under the 1969 will were less than the amounts she would have received under either intestacy or the# prior will and emphasized (1) that there are no other beneficiaries who have received distributions under the will who would be affected by the challenge, (2) that under the traditional estoppel analysis, in order for a party to be estopped (here from objecting to the will’s validity), there must be not only acquiescence in validity on his part, but also a change in position on the part of others, a condition which both existed in Utermehle and was relied on in the Utermehle opinion. The District Court quoted language from Utermehle which it considered to shed light on its rationale, and concluded that “the above quotation indicates that the Court found that these additional elements support estoppel, but that they are not necessary elements.” However, the District Court did not take note of subsequent passages in Utermehle, both one which emphasized — with italics— that in a Massachusetts precedent relied on by the caveator, the legatee had returned the legacy before the executor had settled the account “or the position of any other person had been changed,” and the concluding paragraph of TJtermehle, set forth in our footnote, that emphatically stressed the change-of-position factor. We turn to Bowen v. Howenstein, 39 App.D.C. 585 (1913). The court there considered whether there was an estoppel on the sister of the testatrix by virtue of her having consented to probate, and thereafter accepted, and receipted, certain items of jewelry. Justice Robb’s analysis ran as follows: a. “The doctrine of estoppel in pais is founded upon principles of morality, and is intended to subserve the ends of justice.” b. It is the general rule that a party is not estopped by an act unless it operates to the prejudice of him who relies on it as estoppel. c. The statute provides for caveat by an interested person, within specified time periods, after admission to probate. d. “[It] must be presumed that Congress, in the enactment of this provision, was cognizant of the general rule deductible from the foregoing cases, that a party will not be estopped unless the act relied upon has resulted in the prejudice of him who relies upon it as an estoppel.” This reasoning is clear and authoritative. Congress has provided in D.C. Code § 18-509 (1967): After a will has been admitted to probate, a person in interest may, within six months from the date of the order of probate, file a verified caveat to the will, praying that the probate thereof be revoked. The only doctrine that Congress may fairly be said to. have contemplated as a limitation by way of estoppel on the statutory right of caveat, which is set forth without qualification for all parties in interest, is that provided by the general law of estoppel; and that requires that the party relying on an act as an estoppel shoe prejudice therefrom. There is requisite prejudice and estoppel when a party makes a claim outside the will after taking property under a will to which he would not otherwise have been entitled. And so in Gibson v. Gibson, 53 App.D.C. 380, 292 F. 657 (1923), the court held, in another opinion by Justice Robb, that the principle of UtermeMe prevented a husband from both claiming curtesy and at the same time taking an interest under the will that was given to him in lieu of curtesy. This was held to be inequitable, and the husband was required to elect one or the other. But there is no comparable problem of equity and election when the claimant, as here, is entitled to the property taken under the will even if he succeeds in the claim outside and against the will. It cannot be said that there is any inherent inequity in a relative’s seeking to break a will when she has taken under the will. Her claim is that the deceased intended to provide amply for her and that this was thwarted by the intervention of say, undue influence or failure of capacity. This brings us, finally, to appellee’s claim that estoppel may be avoided only if there has been a prior proffer of the item received. The requirement of proffer is not unqualified but calls for application in the interest of justice. In Maryland, whose rulings are paid particular heed in trust and estate questions, the court put it that it is “only in the event that his contemplated attack upon the will would be successful that there would be any occasion for him to refund the legacy paid to him by the executor.” There may be other considerations of justice bearing on the tender problem. We do not pursue the problem. It suffices that the lack of proffer prior to suit is not an absolute bar, and that whether and on what terms a proffer should be required was not in this case considered by the District Court. The voice of our dissenting colleague prompts us to ponder further on this case. We are not troubled by the accusation that stare decisis has been scuttled. Our opinion reflects an attentive regard to precedent — appreciative of statements in estoppel opinions that focus on inconsistency, but appreciative, too, that these cannot be taken broadside without regard to accompanying facts and statements, reflecting the settled principle that estoppel requires prejudice wrought by detrimental reliance. What we are concerned with in this epilogue is whether some sensitive nerve of justice would be rightly pained by reversal in this case. Is the “inconsistency” of a beneficiary in and of itself an affront to Justice? Should this court go beyond the actual decisis of precedent, and fashion estoppel in law out of inconsistency even in the absence of detrimental reliance or like prejudice? On occasion we have scrapped an historic rule that appears inadequate to modern conditions. E.g., Hatch v. Riggs National Bank, 124 U.S.App.D.C. 105, 361 F.2d 559 (1966). Here, however, it would run contrary to the needs of today to scrap the historic requirement of prejudice so as to make inconsistency alone a legal barrier. The rule that once prohibited a litigating party from asserting inconsistent claims in the same pleading has been relegated to the dustbin of legal history, along with the nice distinctions of the common law forms of action. The Supreme Court has brushed aside those doctrines in which inconsistency of position had come to be viewed as a bar. See Lear, Inc. v. Adkins, 395 U.S. 653, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969). In the case before us, there is no shred of waiver, all rights having been painstakingly preserved, nor is there pursuit of relief and remedies that are inconsistent. In this case the interest of justice is furthered by our attentive regard to precedent, and to principle both settled and sound; and these may not rightly be subordinated to symmetry simpliciter. Our ruling retains estoppel in case of detrimental reliance or like injustice. We are confident that the District Court on remand will be fully alert to the principle of justice reflected in the settled doctrine applied in our ruling. Reversed and remanded for further proceedings not inconsistent with this opinion. TAMM, Circuit Judge (dissenting): I cannot concur in an opinion that elevates to the dignity of legal dogma the facetious vaunt, “Heads I win — Tails you lose.” Again the majority flouts what was known among the ancients as “stare decisis” (the nature of that doctrine is now imperfectly understood and possibly incapable of definition with the vocabulary that remains to us). Craftily recognizing which side her bread is caviared on, our appellant skillfully acclaims by seizure those provisions of the now challenged will which provided largess to her and having exhausted available advantages and benefits she now brazenly challenges the validity of the very document whose terms she utilized to her own benefit. This subordination of veracity is, or course, carried out without any distasteful return to the estate of the assets she has received and utilized. My brethren, whose sincerity I do not question (to the pure all things are pure), with more feeling for a piquant image than for objective facts see in this situation the conduct of a dove rather than an albatross. To make a paradigm of appellant’s greed, at the possible expense of other named beneficiaries of testator’s declared intentions, is for me the jettisoning of virtually all the historically proven cases teaching that the seeker of justice must be a doer of justice. Our opinions through this century, presumably at least, recount a record of in justices put right by our - legal objectivity but my brethren’s majority opinion causes my admiration of our accomplishments to melt into suspicion. Current popular recognition of a code of mini-morals is strengthened by today’s ruling, since the court vaults the bounds of fairness principles and will undoubtedly shock the conscience of legal scholars. To validate appellant’s unconscionable chicanery upon the basis assigned by the majority certainly requires the most novel reasoning since Lewis Carroll. More distressing than the immediate impact of this majority opinion on the fortunes of those immediately involved herein, however, is the ease with which the court again narcotizes the earlier opinions which I naively thought had established and defined the law governing factual situations akin to our present record. Perhaps by today’s and tomorrow’s standards these are normal times and the majesty of the law is to be built upon an ever-changing proliferation of untested and unproved panaceas. The stream of time has washed away the dissoluble fabric of many other disciplines, but if it is to flood away from the courts the integrity of the law as a science producing certain rules of decision, then appellate courts will be reviewing by ambush. No doubt respect for the established tenets of the law is regarded as an idolizing of meaningless ancient landmarks by those who in their search for utopia cultivate the preposterous. It is a tired truth that courts’ opinions seriatim and subjectively working towards the “GREAT WHEN” end not on a note of exhaustion but of exasperation. Such brave but legally limpid judicial excursions are alternately blessed, then tarnished, then cursed. Although change is today’s great constant, legal wanderings far from the solid foundations of objective interpretations of governing case law edge precariously close to an outright abandonment of the basic principle that ours is a government of laws and not of men. Although the belief that the basic provisions of our law established a predictable cornerstone upon which is built the judicial machinery apparently went out with McGuffey’s readers, the hard fact remains that this so-called creative law has not established a track record for lasting solutions of mankind’s day-to-day legal problems. Undiscouraged, however, my brethren bravely pursue their uncharted voyage into THE LAND OF TRY AGAIN. I write these words, not as a jeremiad, but in the belief that unless the courts adhere to the guidance of fixed principles, we will soon bring objective law to its sepulcher. . Both in the Supreme Court, as appears below, and in this court, see 22 App.D.C. at 48-49, 53-54. . After some bequests not here relevant, the residuum of the mother’s estate was to be placed in trust. Appellant was the sole income beneficiary of this trust, and the trustee was empowered to invade the principal in his discretion for her use and benefit. Upon reaching the age of 35, the trust was to terminate; and appellant was to succeed to the entire corpus. . Appellant was to receive a cash bequest of $5,000 and title in fee to certain realty. The residue of the estate was again placed in trust, with appellant the only income beneficiary. The trustee was directed to apply the sum of $10,000 from the principal for appellant’s benefit (should she remarry and desire to purchase a home) and was vested with discretion to invade the corpus in her favor. The 1969 testamentary trust was to terminate upon the appellant’s death; she was given no interest in the remainder. Under the codicil, appellant’s cash bequest was reduced to $3,000, and the trustee was directed to set aside only $5,000 from the principal in the event appellant wished to purchase a residence. The codicil also gave the trustee a discretionary power to invade principal for appellant’s benefit. . The District Court quoted the following paragraphs: As to what is the law relating to a party taking the benefit of a provision in his favor under a will, there is really no foundation to dispute the proposition that he thereby is precluded from at the same time attacking the validity of the very instrument under which he received the benefit. 197 U.S. at 57, 25 S.Ct. at 296. When in addition to the fact that he took a benefit under the will, a party has acquiesced in its validity for many years, and the opposing party in interest has acted upon such consent and acquiescence, and has so changed his position on that account that he cannot be restored to it, and where witnesses have in the meantime died, the reason for the rule upon which an estoppel is founded is thereby greatly strengthened. 197 U.S. at 58, 25 S.Ct. at 297 (emphasis added). . See 197 U.S. at 60, 25 S.Ct. at 297: “In this case the position of other parties to this litigation has most materially changed, as has already been shown . . . while the plaintiff in error has been also guilty of extreme negligence even in attempting to discover what he alleges are facts. We are satisfied that the plaintiff in error is estopped from now contesting the will, and that great injustice would result from the overturning of the principle adjudged in so many cases.” . Thus the court quoted from Reynolds v. Adden, 136 U.S. 348, 352, 10 S.Ct. 843, 845, 34 L.Ed. 360 (1890): “[The acts] induced no conduct on the part of the appellant, or of any of the creditors of John II. Adden, which operated to their prejudice. They contained no element of estoppel.” And from Smith’s Ex’r v. Powell, 98 Va. 431, 36 S.E. 522, 524 (1900): “It is of the essence of estoppel that the act relied upon as such should have been injurious, and to the prejudice of him who relies upon it as estoppel.” And to like effect the court quoted from Brady v. Elliott, 181 Pa. 259, 37 A. 343 (1897), and cited Lincoln v. Gay, 164 Mass. 537, 42 N.E. 95 (1895); Drouin v. Boston & M. R. Co., 74 Vt. 343, 355, 52 A. 957, 960 (1902). . We expressly do not consider the situation of a will that provides a legacy given on condition that no attempt be made to declare the will invalid. Cf. Smithsonian Institution v. Meech, 169 U.S. 398, 18 S.Ct. 396, 42 L.Ed. 793 (1898). . Schmidt v. Johnston, 154 Md. 125, 133, 140 A. 87, 90 (1928). See Kelley v. Hazzard, 96 Oh.St. 19, 117 N.E. 182, 184 (1917): “There is, however, another well-settled exception to the tender back, and that is where the party chargeable with the tender would, in the event of his prevailing in the suit, receive at least as much as he now has in his possession; for, in such an event, no tender is necessary, as no harm can come either to the estate or to any interested party.” . E. g., whether the legacy is needed by the beneficiary for a reasonable standard of living; whether the legacy is being used to finance litigation of minimum substance that will put heavy costs on the estate and other beneficiaries or that will irreparably prejudice them; whether the legacy was of property of a unique and irreplaceable nature, to which the caveator would not be entitled if the will were set aside. . See Bowen v. Howenstein, 39 App.D.C. 585, 590 (1913): While it is undoubtedly the rule that a person who takes property under a will must be presumed to have elected to abide by the will in preference to his rights as an heir at law, in the absence, of course, of fraud, imposition, or misrepresentation, we have found no case holding that the temporary acceptance of such a benefit, resulting in no disadvantage to other parties, amounts to an estoppel. On the contrary, it has been held that the return of a legacy, the condition of the parties not having been changed, — that is, no prejudice having resulted from the temporary accept anee of the legacy, — leaves no room for an estoppel. (Emphasis supplied and citations omitted.) Sec also Utermehle v. Norment, 197 U.S. 40, 57, 25 S.Ct. 291, 296, 49 L.Ed. 655 (1905) and cases cited therein: As to what is the law relating to a party taking the benefit of a provision in his favor under a will, there is really no foundation to dispute the proposition that he thereby is precluded from, at the same time, attacking the validity of the very instrument under which he received the benefit. See also Cennamo v. American Security & Trust Co., 318 F.Supp. 366 (D.D.C.1970). The wealth of state cases holding as we have held in the past is so great as to negate citation. . See, e. g., L. Carroll, Alice’s Adventures in Wonderland (Orig. pub. 1865), and L. Carroll, Through the Looking Glass (Orig. pub. 1872). . An account of our confused and confusing roaming through the labyrinth of the insanity defense in criminal cases is a record of eighteen years from Durham v. United States, 94 U.S.App.D.C. 228, 214 F.2d 862 (1954), to United States v. Brawner, 153 U.S.App.D.C. 1, 471 F.2d 969 (1972), in which we unwaiveringly in each successive case abandoned an earlier profound declaration of what we had (temporarily as it turned out) declared would be the governing law. For trial courts and the bar, the law was recognized as being whatever we would declare it to be in our next opinion.

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UNITED STATES of America v. Leonard T. ROBINSON, Appellant. UNITED STATES of America v. James E. McCAFFITY, Appellant. UNITED STATES of America v. Louis JOHNSON, Appellant. Nos. 24809-24811. United States Court of Appeals, District of Columbia Circuit. Argued Oct. 22, 1971. Decided March 7, 1973. Louis P. Robbins, Washington, D. C., with whom Nathan H. Wasser, Washington, D. C. (both appointed by this Court) was on the brief, for appellant. Julius A. Johnson, Asst. U. S. Atty., with whom Thomas A. Flannery, U. S. Atty. at the time the brief was filed, and John A. Terry and William H. Collins, Jr., Asst. U. S. Attys., were on the brief, for appellee. Before BAZELON, Chief Judge, and LEVENTHAL and ROBINSON, Circuit Judges. LEVENTHAL, Circuit Judge: Appellants were found guilty of second-degree murder, submitted under a revised indictment as a lesser included offense to a felony-murder charge, and of armed robbery. This appeal, from judgments sentencing each appellant to concurrent terms of six to twenty years' imprisonment, raises questions as to (1) the trial judge’s refusal to permit the veniremen’s attitudes toward self-defense to be explored on voir dire; (2) the court’s instructions as to (a) aiding and abetting, (b) lesser included homicide offenses, and (c) evidence of flight; and (3) the court’s refusal to require amendment of the robbery count to set forth the requisite intent. Finding no prejudicial error, we affirm. I. BACKGROUND This case arose from the shooting of, and taking money from, one Alvin Robinson (hereinafter the deceased). The highlights of the prosecution and defense cases will suffice. 1. The Government’s case. Appellants, all residents of Baltimore, came to Washington on Sunday afternoon, February 8, 1970. They had previously been unacquainted with the decedent and met him under entirely innocent circumstances in the company of mutual friends, seven women from New York. An impromptu party developed at a house on Blaine Street. The appellants, the deceased, his girl friend Catherine Gross, and others spent a convivial evening together in casual conversation, drinking and dancing. In jovial spirits, deceased boastfully flashed a large roll of money (“teasing the girls”), with at least a couple of hundred dollar bills. The roll bulged noticeably in his trousers pocket. Mc-Caffity may have had an opportunity to see the money at close range when he and the deceased left to buy something to drink. Appellant Johnson remarked to Rhetta Wright, “You see this fellow over there? .... He has a roll and I’m going to get it.” But he pointed to a group of men and she could not swear the statement referred to the decedent. McCaffity asked for and received the decedent’s home address and telephone number. Toward midnight, Miss Gross felt decedent was “kind of high” and they should leave. William T. McDowell, Jr., an off-duty D.C. policeman and friend of the decedent, offered to drive them home. McCaffity asked for directions to the Baltimore-Washington Parkway, and McDowell said that he would show him the way. Three cars left the Blaine Street house. Deceased and Miss Gross were in the first car, driven by McDowell. In the second auto were appellant McCaffity and Miss Wright. In the third were appellants Robinson and Johnson. After McDowell led the appellants to the entrance ramp and waved them on to the Parkway, he drove to the deceased’s home on Jay Street, and escorted deceased and Miss Gross inside. Leaving the house, he was surprised to see appellants’ cars parked outside. McCaffity told McDowell that they had decided to take Miss Wright to her sister’s home on Spring Place and got lost. McDowell gave appellants directions to that address and returned to Blaine Street. Appellants then drove Miss Wright to the Spring Place home; on letting her off, they announced they were returning to Baltimore; instead they drove back to decedent’s home on Jay Street. Miss Gross testified that after Officer McDowell dropped them off, she helped the deceased remove his trousers (containing the money), placed them on the living room sofa and took deceased to an upstairs bedroom where deceased went to bed. Soon after, she heard a persistent knock at the front door. She opened it, and the three appellants “pushed their way in.” At this point deceased, in his underwear, came downstairs, asked Miss Gross where his trousers were, and told her to go back upstairs. A few moments later, she heard him cry out for her to “Get the police!” She ran down the stairs toward the front door. In the vestibule, she was shoved to the floor by appellant Johnson, who ran out the door with deceased’s trousers. She looked up and saw appellants McCaffity and Robinson confronting the deceased. McCaffity was pointing a revolver at the decedent, unarmed, about six feet away. “[I]f you are not going to use the gun, I will.” Saying that, Robinson “took the pistol out of [McCaffity’s] hand” and shot deceased. Miss Gross ran across the street to the home of a neighbor and telephoned the police. During their investigation, the police obtained a .32 calibre pistol from Mc-Caffity’s wife. Miss Gross testified it resembled the gun from which the fatal shot had been fired. McCaffity later admitted the weapon belonged to him. Three days later, all three appellants were arrested at a motel in New York City. Robinson was carrying about $200 in cash, including a $100 bill. 2. The defense. Each of the appellants took the stand. According to their version, which contradicted the account of the prosecution’s witnesses, deceased had boasted at the Blaine Street party of his abilities as a dice shooter and suggested they come to his home for a crap game after the party. When they arrived, he invited them in and, after sending Miss Gross upstairs picked up his trousers from the sofa. He said the other players would arrive shortly. Appellant Robinson began to “warm up” by rolling a pair of dice. Deceased accused him of using loaded dice. McCaffity stated that he observed deceased take a gun from-a desk in the next room, and put it in the pants pocket. The deceased then confronted McCaffity, reiterated his accusation, and, without provocation, struck him in the face. A struggle ensued. Fearing that deceased would use the pistol, and remembering having heard deceased say that he had once shot a woman, McCaffity grabbed the pants and ran for the door. He heard deceased shouting for Miss Gross to “Get the .45 [and] shoot the s. o. b.” He collided with Miss Gross on his way to the door, knocking her down, ran outside, and threw the trousers into his car. The fight between - Robinson and deceased continued, and Robinson fell against some furniture and was knocked unconscious. Appellants testified that, prior to the Blaine Street party, McCaffity had removed the .32 calibre revolver from the glove compartment of his ear to avoid exciting the apprehensions of his lady passengers and had given it to Johnson, who carried it all day in the pocket of his trench coat. Johnson asserts that as the fight went on he ran outside, saw that McCaffity had already left the house, reasoned that Robinson must still be inside, and turned back toward the house. He saw the deceased by the front door, holding what he believed to be a gun in his hand, drew MeCaffity’s pistol from his pocket, fired a blind shot at the deceased, and ran to his car. Robinson stated that, when he regained consciousness, he left the house. On his way out, he saw deceased lying face down, and six inches away a .38 calibre revolver, which he picked up as he ran to the car. He reassured Johnson that deceased was still moving, and was probably only shot in the leg. Appellants drove back to Baltimore. McCaffity, who was alone in one car, testified he had no idea deceased had been shot until the next morning when Robinson and Johnson met him, returned his own pistol, and gave him the gun Robinson purportedly took from the deceased’s porch. He admitted discovering on his way home that the trousers he took from the deceased did not contain a pistol, but instead about a thousand dollars. He never told the others of this, and gave the money to his wife. Appellants were afraid to check out in Washington what happened to deceased and went to New York, where Miss Wright lived, to find out. Their testimony tended to account for the money in their possession at arrest. II. ISSUES RAISED ON THIS APPEAL A. Conduct of voir dire. Appellants’ counsel submitted to the court a list of proposed questions to be put to veniremen during voir dire examination. The the trial court refused to include two questions, proposed by Mc-Caffity’s counsel, relating to self-defense. Pursuant to Rule 24(a), Fed.R. Crim.P., the trial judge is vested with “broad discretion” in the conduct of voir dire — both as to the mode and manner of proceeding, United States v. Bryant, 153 U.S.App.D.C. 72, 471 F.2d 1040 (1972), cert. denied, 409 U.S. 1112, 93 S.Ct. 923, 34 L.Ed.2d 693 (1973), and as to the range of questions put to the prospective jurors, Ham v. South Carolina, 409 U.S. 524, 93 S.Ct. 848, 35 L.Ed.2d 46,(1973); Grogan v. United States, 394 F.2d 287 (5th Cir., 1967), cert. denied, 393 U.S. 830, 89 S.Ct. 97, 21 L.Ed.2d 100 (1968). The exercise of this discretion is “subject to the essential demands of fairness.” Aldridge v. United States, 283 U.S. 308, 310, 51 S.Ct. 470, 471, 75 L.Ed. 1054 (1931); Brown v. United States, 119 U.S.App.D.C. 203, 338 F.2d 543 (1964); Sellers v. United States, 106 U.S.App.D.C. 209, 271 F.2d 475 (1959). But absent abuse of his broad discretion, and a showing that the rights of the accused have been substantially prejudiced thereby, the trial judge’s rulings as to the scope and content of voir dire will not be disturbed on appeal. Yarborough v. United States, 230 F.2d 56, 63 (4th Cir.), cert. denied, 351 U.S. 969, 76 S.Ct. 1034, 100 L.Ed. 1487 (1956); Haslam v. United States, 431 F.2d 362 (9th Cir., 1970), aff’d on rhg., 437 F.2d 955, cert. denied, 402 U.S. 976, 91 S.Ct. 1860, 29 L.Ed.2d 142 (1971). In refusing to question jurors regarding self-defense, the District Judge stated, “I don’t want to inject any legal defenses into a case before the jury has heard any evidence.” The Government argues, in support of this ruling, that at this point of the case appellants’ defense was no more than a theory, and conceivably the evidence actually offered might not have sufficed to justify an instruction on self-defense. And, it might be argued, the suggestion of the issue on voir dire might lead the jury to speculate along impermissible lines during their deliberations and influence their perception of the evidence as it unfolds at trial. This approach does not, on balance, commend itself to the court. If the issue is one on which jury attitudes should be probed on voir dire to assure a fair trial by an impartial jury, this strength of our system should not be scuttled merely because, on relatively infrequent occasions, a planned defense is unexpectedly foreclosed or abandoned. And the problem can be contained by accompanying the voir dire with a cautionary instruction explaining the purpose of the questioning and informing the jurors that the matters discussed are not in evidence and are not to be considered during their deliberations. This approach is fortified by the right of the defense counsel to present his approach to the jury before trial, in the opening statement. Nevertheless, we do not discern prejudice to substantial rights from the denial of these questions. The defense must be given a full and fair opportunity to expose bias or prejudice on the part of the veniremen. Morford v. United States, 339 U.S. 258, 70 S.Ct. 586, 94 L.Ed. 815 (1950). The possibility of prejudice is real, and there is consequent need for a searching voir dire examination, in situations where, for example, the case carries racial overtones, or involves other matters concerning which either the local community or the population at large is commonly known to harbor strong feelings that may stop short of presumptive bias in law yet significantly skew deliberations in fact. In a case involving such sentiment, the trial court must take it into account and govern the voir dire accordingly. Still other forms of bias and distorting influence have become evident, through experience with juries, and have come to be recognized as a proper subject for the voir dire. An example is the problem that jurors tend to attach disproportionate weight to the testimony of police offieers. See Brown v. United States, supra; Sellers v. United States, supra. When the matter sought to be explored on voir dire does not relate to one of those recognized classes, it is incumbent upon the proponent to lay a foundation for his question by showing that it is reasonably calculated to discover an actual and likely source of prejudice, rather than pursue a speculative will-o-the-wisp. The appellants made no such effort at the time the question wás submitted to the trial judge; nor did they present before this court any material tending to show that prejudice against a claim of self-defense was likely to be encountered in the community from which the veniremen were drawn. Absent such a showing, we find no prejudice to the rights of the accused. The court’s instructions as to the law of self-defense were clear and complete. We have no basis for supposing that jurors might in any way be hestiant to abide by their instructions. The trial court’s conduct of voir dire presents no reversible error. B. The Instruction as to Aiding and Abetting. The instruction given on aiding and abetting was that generally used in this District and informed the jury that the two non-shooting defendants should not be found guilty unless their individual participation in the offense was found. Appellants now argue that the charge was inadequate in the setting of this case. They say that the evidence only showed complicity in the robbery, and when the jury acquitted of felony-murder they necessarily found the homicide did not take place during the commission of the robbery. The jury should have been instructed, say appellants, that in making such a determination they should acquit unless the Government proved aiding and abetting in the homicide as a specific crime, separate and apart from the robbery. The issue cannot be addressed, as appellants’ counsel do, solely in terms of logic. The only evidence linking the non-shooters to the homicide was that which linked them to the robbery. Yet all three defendants requested that the issue of second degree murder be put to the jury as a lesser included offense of felony-murder. Although the rationale of lesser included offenses is a developing one, its application to the homicide offenses was thoroughly explored in Fuller v. United States and requires no further elaboration. Under Fuller, the appellants were entitled to their motion that the jury be instructed to consider second degree murder as a lesser included offense, and the trial court acted properly in acceding to their request. We need not now concern ourselves with a question of prejudice that might arise in a case where defendant resisted a lesser-included offense instruction as incompatible with the evidence. Certainly the evidence adduced at trial was sufficient to support a second-degree verdict, as appears from the so-called “Sheriff Road Robbery cases.” There five men stole a car and parked it next to a store near closing time. When the owner and his wife left their store, three of the defendants left the car and confronted them, one grabbing the wife’s purse. At this point another defendant, carrying a pistol, became involved in a scuffle with the store owners; the pistol discharged, fatally wounding the store proprietor. The jury acquitted of felony-murder, but convicted of robbery and second degree murder. This court held that the non-shooting accomplices could properly be convicted of second degree murder, observing “The jury could reasonably regard the shooting as incidental to the common design of robbery.” As to appellants’ contention that the acquittal of felony-murder necessarily and logically establishes that the robbery and the homicide were severable events, so that complicity in the robbery could not support responsibility for the homicide, we must advert not only to the precedent just discussed, but to the rule that requires affirmance of a conviction of a charge supported by the evidence even where that is logically inconsistent with the same jury’s acquittal of another charge. E. g., Dunn v, United States, 284 U.S. 390, 52 S.Ct. 189, 76 L.Ed. 356 (1932); United States v. Fox, 140 U.S.App.D.C. 129, 433 F.2d 1235 (1970), and cases cited therein at n. 21. The jury may have merely exercised a clemency that is its prerogative without regard to logic. Appeal to such clemency may, indeed, well have accounted for the request by each defendant for an instruction that the jury was entitled to bring in a verdict of second degree murder as a lesser included offense. The trial judge’s instruction on aiding and abetting was in accord with precedent, and stressed the core element of the need to apply the principles of aiding and abetting separately as to each defendant and each offense. We discern no reversible error. C. The Flight Instruction. The trial court instructed the jury, in part, “Flight or running away does not prove guilt . . (Tr. VII: 216). Appellants protest the failure to give their requested instruction, which used the phrase, “Flight or concealment by the defendants does not create a presumption that they are guilty of any crime.” The wording used by the trial judge was readily, perhaps more readily, understood by laymen. Even when the court’s statement is considered on its face and wrenched out of context, this semantic distinction produced no practical or discernible difference in impact that could reasonably be expected to affect the minds of the jurors. Considering the language complained of in the context in which it was used, it is even more apparent that the appellants’ claim of error — let alone prejudice —borders on the frivolous. The lack of prejudice is even more clear when the instruction is taken as a whole. It adequately explains the conflicting motives that may lead an innocent man to flight, and highlights the danger of drawing an adverse inference from such evidence. We find it entirely consonant with the guidelines of Austin v. United States, 134 U.S.App.D.C. 259, 414 F.2d 1155 (1969). As we have recently noted, evidence of flight tends to be only marginally probative as to the ultimate issue of guilt or innocence. The interest of justice is perhaps best served if this matter is reserved for counsel’s argument, with little if any comment by the bench. All of this evidence was properly before the jury, and much of it came in the form of testimony by the appellants themselves. Here, the appellants’ testimony explained why they went to New York, pointed out that they not only gave their names and addresses at the hotel, but actively put their identity forward in an effort to obtain compensation for a collision sustained en route. Both counsel in summation explored at length the various inferences that might be drawn from this evidence. D. The Robbery Indictment. The robbery counts tracked the statutory language describing the offense but did not expressly allege a specific intent on the part of the appellants to steal the property in question. Specific intent to steal is, of course, a material element necessary to constitute the offense of robbery. See (F. H.) Jackson v. United States, 121 U.S.App.D.C. 160, 348 F.2d 772 (1965). When trial began, appellants filed a “Motion to Clarify Indictment,” requesting that the trial court amend the robbery count by adding “with specific intent at the time of the taking to wrongfully convert the $1,000.00 of [the decedent] to their own use.” The trial court denied this motion as not timely filed, and the appellants argue that to do so amounted to prejudicial error. In both (F. H.) Jackson, supra, and Austin v. United States, supra, indictments identical in form to the present one were held legally sufficient, albeit in a form that “leaves much to be desired both in completeness and in clarity.” The wording was held sufficient to charge the offense of robbery and give adequate notice of the charge defendant was held to answer. Appellants complain that the jury was permitted to take the indictment into the jury room, and rely upon (F. H.) Jackson v. United States, in which we adverted, in reversal, to the possibility of jury reference to an indictment drafted in this manner. But Jackson was based on the failure of the trial court to apprise the jury in any manner of the necessity to find an intent to steal. In Austin, where specific intent had been amply covered in the trial court’s instructions, we distinguished Jackson and affirmed. Here, as in Austin, clear, detailed and thorough instructions amply impressed upon the jury that, in order properly to convict of robbery, a specific intent to steal the property in question must be found. This disposition makes it unnecessary to discuss precedents on the issue of whether, and when, courts may permit indictments to be amended. While we affirm, for the reasons stated, we urge that pertinent indictment forms be promptly updated and refined, and toward that end are directing the Clerk to bring this opinion to the personal attention of the United States Attorney. The appellants’ convictions are supported by the evidence and not impaired by prejudicial error, and are accordingly Affirmed. . The indictment charged : count 1 — first degree, felony murder (D.C.Code § 22-2401) ; count 2 — second degree murder (D.C.Code § 22-2403) ; count 3 — armed robbery (D.C.Code § 22-3202) ; count 4 — robbery (D.C.Code § 22-2901). Prior to submission to the jury, the indictment was retyped to omit count 2. See note 14, infra, and accompanying text. Count 5, which charged Robinson, individually with carrying a concealed weapon (D.C. Code § 22-3204) was dismissed on the Government’s motion at the close of the prosecution’s case in chief. . Oral argument was heard on October 22, 1971. A sua sponte order was issued on November 29, 1971, holding this case in abeyance pending en bamo decisions in United States v. Heinlein, No. 23,226; United States v. Walker, No. 23,227; and United States v. Walker, No. 23,228. Subsequent reflection convinced us that the questions raised in the instructions as to aiding and abetting in the context of a felony-murder conviction present an issue distinct from that raised in HeinleinWallcer. On September 13, 1972, we vacated our order of November 29, 1971. . Use of the term “deceased” or “decedent” for Alvin Robinson will avoid confusion with appellant Leonard T. Robinson. . McDowell was accompanied by a Miss Kennedo. . Mrs. McCaffity also surrendered a .38 calibre pistol. The Government’s evidence did not connect the .38 with the crime. But appellant Robinson testified he had found it lying next to the body of deceased and had given it to McCaffity the morning after the shooting. . The slug removed from the body of the decedent was too mutilated to permit positive identification by microscope comparison, but in all gross physical characteristics it was like the five live cartridges found in MeCaffity’s .32 pistol. It could not have been fired from a .38 calibre weapon. . The proposed questions were (R. at 16) : Do any members of the prospective jury panel feel that self-defense does not justify the wilful taking of a human life? Do any members of the prospective jury panel feel that they would be unable to follow the Court’s instructions on self-defense because of their personal views on the subject? Possible objections going to the form of the questions were not the basis of the trial judge’s ruling, nor were they raised on this appeal. . Aldridge v. United States, supra; King v. United States, 124 U.S.App.D.C. 138, 362 F.2d 968 (1966). In Ham v. South Carolina, 409 U.S. 524, 93 S.Ct. 848, 35 L.Ed.2d 46, the Supreme Court recently noted the special constitutional status of voir dire questions designed to ferret out racial bias. Reversing the petitioner’s conviction, the Court held refusal to permit interrogation on the specific issue of racial bias violated the accused’s Fourteenth Amendment rights to due process. It went on to uphold, however, the trial court’s exclusion of questions concerning possible prejudice against persons who wore beards, as did the accused. In explicating this distinction, the Court stated: While we cannot say that prejudice against people with beards might not have been harbored by one or more of the potential jurors in this case, this is the beginning and not the end of the inquiry as to whether the Fourteenth Amendment required the trial judge to interrogate the prospective jurors about such possible prejudice. Given the traditionally broad discretion accorded to the trial judge in conducting voir dire and our inability to constitutionally distinguish possible prejudice against beards from a host of other possible similar prejudices, we do not believe the petitioner’s constitutional rights were violated when the trial judge refused to put this question. 409 U.S. 524, 527, 93 S.Ct. 848, 851, 35 L.Ed.2d 46 (citation omitted, emphasis supplied). . These would, for example, include prejudice against: wagering, Lurding v. United States, 179 F.2d 419 (6th Cir., 1950); see United States v. Clancy, 276 F.2d 617, 632 (7th Cir., 1960), rev’d on other grounds, 365 U.S. 312, 81 S.Ct. 645, 5 L.Ed.2d 574 (1961); the use of intoxicants, State v. Miller, 60 Idaho 79, 88 P.2d 526 (1939); see Gonzales v. State, 169 Tex.Cr.R. 49, 331 S.W.2d 748 (1960); one who intends to testify that he had lied to another, United States v. Napoleone, 349 F.2d 350 (3d Cir. 1965); a member of a religious minority, United States v. Daily, 139 F.2d 7 (7th Cir., 1943). . Indeed, the pioneering social research into the ethos and behavior of jurors shows that, in many situations, the typical jury take a rather charitable view toward a plea of self-defense, tending to interpret the evidence adduced in a manner distinctly favorable to the accused. H. Kalven & H. Zeisel, The American Jury, 221-241, 407-408 (1966). . Although voir dire as to self-defense was referred to as a defense right in Webb v. Commonwealth, 314 S.W.2d 543 (Ky., 1958), the setting was one of patricide, which obviously makes a profound difference in terms of jury sentiment. Also, the court reversed a manslaughter conviction for erroneous admission of evidence, and the opinion identified its statements as to voir dire as dictum. . In all other respects, the trial judge’s questions to discover possible prejudice on the part of the veniremen were thorough and searching. Thus, for example, the court inquired whether any of the prospective jurors or any of their close relatives had ever been victims of violent crime, whether any of them worked in an establishment that had been robbed, and whether any of them would be prejudiced against an individual merely because he had been shown to have owned or carried fire arms (Tr. A-1: 20-79). . District of Columbia Bar Ass’n, Young Lawyer’s Section, Criminal Jury Instructions for the District of Columbia, Instruction 4.02 at 82 (2d ed., 1972). See id., Instruction 47 at 27 (1st ed., 1966). . (Leon) Jackson v. United States, 114 U.S.App.D.C. 181, 313 F.2d 572 (1962); Kitchen v. United States, 95 U.S.App.D.C. 277, 221 F.2d 832 (1955); cert. denied, 357 U.S. 928, 78 S.Ct. 1378, 2 L.Ed.2d 1374 (1958). See Fuller v. United States, 132 U.S.App.D.C. 264, 294, 407 F.2d 1199, 1229 (1968), cert. denied, 393 U.S. 1120, 89 S.Ct. 999, 22 L.Ed.2d 125 (1969). . Compare (Wm.) Coleman v. United States, 111 U.S.App.D.C. 210, 295 F.2d 555 (1961) (en banc), cert. denied, 369 U.S. 813, 82 S.Ct. 689, 7 L.Ed.2d 613 (1962), with United States v. Huff, 143 U.S.App.D.C. 163, 442 F.2d 885 (1971) and United States v. Whitaker, 144 U.S.App.D.C. 344, 447 F.2d 314 (1971). . 132 U.S.App.D.C. 264, 407 F.2d 1199 (1968), cert. denied, 393 U.S. 1120, 89 S.Ct. 999, 22 L.Ed.2d 125 (1969). . Compare Green v. United States, 95 U.S.App.D.C. 45, 218 F.2d 856 (1955); (Wm.) Coleman v. United States, supra. Nor need we concern ourselves at this juncture with the vitality of Coleman in the light of Fuller (en banc) and other-subsequent decisions, see fn. 15, supra. . (Leon) Jackson, (Chas.) Coleman, Tatum & Dykes v. United States, reported seriatim, at 114 U.S.App.D.C. 181-189, 313 F.2d 572-580 (1962). . (Chas.) Coleman v. United States, id. at 187, 313 F.2d at 578. Although the evidence submitted is the gauge against which the propriety of lesser included offense instructions must be measured, United States v. Comer, 137 U.S.App.D.C. 214, 218, 421 F.2d 1149, 1153 (1970), the quantum of proof needed to justify giving the instruction is but slight, Stevenson v. United States, 162 U.S. 313, 16 S.Ct. 839, 40 L.Ed. 980 (1896); United States v. Huff, 143 U.S.App.D.C. 163, 442 F.2d 885 (1971). In addition, [t] he jury is not confined in its findings to matters that are directly set forth in testimony but may base an inference of lesser offense on a “reconstruction that is fairly inferable” from the evidence, gleaned perhaps by putting together some items from one witness, some from another, and some from the jury’s own experience and sense of probabilities. Id. at 168, 442 F.2d at 890, quoting Belton v. United States, 127 U.S.App.D.C. 201, 207, 382 F.2d 150, 156 (1967). . See United States v. Lumpkin, 145 U.S.App.D.C. 162, 167, 448 F.2d 1085, 1090 (1971) and cases therein cited. . When two or more persons are alleged to be involved in the commission of a crime, there are certain principles of law which should apply and which you should keep in mind in determining the guilt in innocence of each of the particular defendants on trial before you. (Tr. VII: 197-98) Now, these instructions that I have just given you as to aiding and abetting and acting in concert apply to each and every one of the counts in this indictment which you are going to consider, and you should keep the principles of aiding and abetting in your minds as you consider each individual count. (Tr. VII: 199) The impact of these instructions was heightened by the trial court’s charge as to the manner of deliberation: You should give separate consideration and render separate verdicts with respect to each defendant as to each count. Each defendant is entitled to have his guilt or innocence as to each of the crimes charged determined from the evidence which applies to him as if he were being tried alone. (Tr. VII: 220-21) . See United States v. Honesty, 148 U.S.App.D.C. 255, 459 F.2d 1279 (1971); Miller v. United States, 116 U.S.App.D.C. 45, 51, 320 F.2d 767, 773 (1963) (Bazelon, J., concurring); Criminal Jury Instructions, supra note 13, Instruction 2.44 at 48 (2d ed., 1972). . We dismiss out of hand appellants’ suggestion that by instructing the jury that “flight does not prove guilt” the trial court thereby invited them to treat flight as a presumption of guilt (see Br. at 18). Such an argument stands both language and logic on its head and can only be supported by carrying the expressio unius principle to the nth degree. . See also Wong Sun v. United States, 371 U.S. 471, 483, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963); United States v. Honesty, supra. . United States v. Telfaire, 152 U.S.App.D.C. 146, 151-152, 469 F.2d 552, 557-558 (1972). . In general, the Federal Courts have been extremely reluctant to amend an indictment once it has been endorsed a “true hill” by the grand jury. See Russell v. United States, 369 U.S. 749, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962); Stirone v. United States, 361 U.S. 212, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960); Ex parte McBain, 121 U.S. 1 (1887); 1 C. Wright, Federal Practice & Procedure § 127. In other circumstances the fact that the accused may waive indictment altogether and elect to be prosecuted by information would strongly militate toward permitting the indictment to be amended at the request of the defendant or if the defendant consented thereto. And this is especially true when, as here, the indictment as originally drafted is clearly sufficient in law. Different considerations may apply, however, when the specification sought to be amended relates, albeit indirectly, to a charge of felony-murder that is being tried as a capital offense. There also may be some question whether all three of the appellants joined in the defense “Motion to Clarify Indictment.” Although it is phrased on behalf of the defendants jointly and carries at its foot the typewritten names of each appellant’s counsel, only the attorney for Robinson signed the document. The signature lines for the other attorneys are blank, and none of the defendants’ signatures appear. Although we allude to these matters, we do not purport to decide them. Since we conclude that no prejudice resulted from the trial court’s refusal to amend the indictment, it is unnecessary to determine whether there was nevertheless a technical error. . The remaining contentions are without merit.

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Ennis L. MAZZA, Executrix of the Estate of Raymond J. Mazza, Deceased, Appellant, v. Olga M. MAZZA. No. 72-1279. United States Court of Appeals, District of Columbia Circuit. March 7, 1973. Mattaniah Eytan, Washington, D. C., was on the brief for appellant. Leonard C. Collins and Herman Miller, Washington, D. C., were on the brief for appellee. Before McGOWAN, TAMM, and WILKEY, Circuit Judges. McGOWAN, Circuit Judge: R. J. Mazza died a resident of Maryland, leaving a will which named appellant — his wife, Ennis Mazza — executrix and sole beneficiary, and which made no provision for the payment of the federal estate tax. The decedent and appellee —his sister, Olga Mazza — held real property in the District of Columbia as joint tenants with rights of survivorship. That property passed to appellee by operation of District of Columbia law, and was included in R. J. Mazza’s taxable estate under § 2040 of the Internal Revenue Code of 1954. Appellant paid the entire federal estate tax, and sought to compel contribution from appellee for that portion of the tax attributable to the real estate in the District of Columbia. The District Court granted appellee’s motion for summary judgment on the grounds that the question of apportionment was governed by the local law of the District of Columbia, and that under that law estate taxes are to be paid out of the residuary estate. Appellant argues that (1) the court should have looked to the law of Maryland for the rule governing apportionment and (2) even if the law of the District of Columbia applies, the court misconstrued that law. We reverse on the basis of the choice of law issue and do not reach the question of interpretation. Congress expressly provided for apportionment of the federal estate tax in certain situations not relevant to this case. In all other instances the decedent’s personal representative is responsible for actual payment, but state law determines the impact of the tax upon those receiving property includible in the taxable estate. Riggs v. Del Drago, 317 U.S. 95, 63 S.Ct. 109, 87 L.Ed. 106 (1942). Maryland has a statute requiring pro rata apportionment of the tax unless the testator makes specific provision for its payment. The law in the District of Columbia is somewhat less clear, but the District Court concluded that apportionment is not required and that taxes are to be paid from the residuary estate. Inasmuch as it is unnecessary to reach appellant’s challenge to this interpretation, we assume for the purposes of this discussion that the District Court accurately ascertained the local law. I The conflict of laws problem arises because both Maryland and the District of Columbia have significant contacts with this controversy and their rules of law differ. The separate interests and policies of the two jurisdictions have been drawn together by the broad cast of the federal estate tax net, which assesses a single lump sum liability for all assets within the taxable estate regardless of location. Our task is to sort out these diverse elements in an attempt to determine the relationship of each jurisdiction to the controversy, and to evaluate the interest of each in the application of its own rule of law. The foregoing statement of the problem indicates that we adopt in this case the “interest analysis” approach initially employed by this court in the area of tort law in Tramontana v. S. A. Empressa De Viacao Aerea Rio Grandense, 121 U.S.App.D.C. 338, 350 F.2d 468, 471-473 (1965), and extended to the area of contracts by cases such as Fox-Greenwald Sheet Metal Co. v. Markowitz Bros. Inc., 147 U.S.App.D.C. 14, 452 F.2d 1346, 1353-1354 (1971). Although the subject of this controversy is somewhat different, the reasoning of those cases seems equally applicable here. Although the general approach to be employed is thus established, its application to the issue of whether the situs should adopt the domicile’s apportionment statute is a question of first impression in this jurisdiction. Only a few other courts have considered the problem, and those that have are evenly divided between the law of the situs and that of the domicile. The two cases which best illustrate the opposing views are Isaacson v. Boston Safe Deposit & Trust Co., 325 Mass. 469, 91 N.E.2d 334 (1950), and Doetsch v. Doetsch, 312 F.2d 323 (7th Cir. 1963). For reasons developed hereinafter, we find the reasoning of the Seventh Circuit in Doetsch persuasive in principle, and also consistent with the choice of law principles of this jurisdiction. II In Doetsch the decedent died domiciled in Arizona, leaving his widow as income beneficiary of an inter vivos trust of property located in Illinois. The corpus of the trust was included in the taxable estate, and since the will was silent on this point, the tax was paid from the income of the trust; subsequently, the widow sought to charge the remaindermen with a pro rata share of the tax. Neither state had an apportionment statute, and there were no Illinois decisions on the conflicts question. The jurisdiction of the federal courts was based on diversity of citizenship, and Chief Judge Hastings, writing for the court, decided that an Illinois court would apply the local law of Arizona. He then observed that Arizona had not decided the question and concluded that Arizona would adopt apportionment as the better rule of law. The court made three points in its discussion of the choice of law question. First, reference by all jurisdictions in which the decedent left property to the law of the decedent’s domicile insures uniform treatment of all those receiving property from the decedent’s taxable estate. Second, this question is similar to other problems relating to the administration of estates and to determination of intent which are governed by the law of the domicile. Finally, the decedent’s domicile is usually the jurisdiction concerned with the protection of the decedent’s widow and children, and deference to that state’s policy in such matters is appropriate. In determining Arizona’s interest in protection of the residuary beneficiaries, the Doetseh court was without the benefit of any pronouncement of Arizona policy. Our case is much easier because enactment of the apportionment statute is a clear expression of Maryland’s approach to the question. Although the statute does not explain its purpose, it seems intended to protect residuary beneficiaries’ from the untoward effects of unforeseen taxes. This decision may well be premised on the conclusion that residuary beneficiaries are likely to be intended principal beneficiaries, and that a failure to provide for payment of taxes will almost certainly be an oversight. Since the residence of the decedent will commonly be the residence of the spouse and dependent children, and since such family members are usually the principal beneficiaries, Maryland, as the decedent's residence, has a dominant interest in protection of the principal beneficiary. Further, the approach adopted by Maryland seems clearly suited to serve that purpose. As the federal estate tax has become more substantial, methods of disposing of property outside of the testamentary estate have become more sophisticated, and the definition of taxable estate has consequently been expanded to include many types of property not subject to administration by the decedent’s personal representative. These changes increase the probability that property will be included in the taxable estate unexpectedly, and that the testamentary scheme will be thereby distorted. Unlike pro rata apportionment, which can at worst reduce by a percentage some assets which the testator expected would be transferred in their entirety, payment of the taxes from the residuary estate can consume that estate entirely, perhaps leaving an intended principal beneficiary with nothing at all. In addition to this local concern with the residuary beneficiaries, the Doetseh opinion identified an interest in uniformity of treatment of beneficiaries within a single estate. If a decedent leaves property in several states, and if each situs applies its own law, some of the recipients may be required to contribute to payment of the federal estate taxes while others are not. Different treatment for persons similarly situated with respect to the estate is an anomalous result which can be avoided if all jurisdictions refer to the law of the domicile. III Against these interests in the application of Maryland’s apportionment statute, we must balance the interests of the District of Columbia in the application of its own law. The District Court seems to have based its opinion primarily on considerations of extraterritoriality. The court issued no opinion in this case, but its fifth Conclusion of Law reads as follows: 5. Under the District of Columbia law, an apportionment statute in the place of the decedent’s domicile has no extra territorial [sic] effect against the surviving joint tenant of real estate located in the District of Columbia. In following this approach the District Court seems to adopt the rationale of Isaacson v. Boston Safe Deposit & Trust Co., 325 Mass. 469, 91 N.E.2d 334 (1950), the leading case for application of the law of. the situs in cases of this sort. Isaacson was a suit by the executor of a will against the trustee of a trust to charge the trustee with a pro rata share of the federal estate tax. The decedent died domiciled in Maine, and the situs of the trust was in Massachusetts. Maine had an apportionment statute, but Massachusetts, the forum, did not. The court noted that the trust was created under Massachusetts law while the decedent was domiciled in Massachusetts, and the trust property was in the state. The trustee was a Massachusetts corporation, and the persons who succeeded to the decedent’s interest in the trust did so by the terms of the trust and not under the will probated in Maine. For these reasons, the court concluded “that to apply the Maine statute in this case would be to give to that statute extraterritorial effect contrary to first principles.” The court then cited without explanation a long series of cases, most of which deal with attempts by forum states to apply the local law of the forum to controversies in which the forum had no interest. The reasoning of Isaacson and the District Court is correct when applied to the question of whether an apportionment statute in the domiciliary state must be applied by a forum which has jurisdiction as the situs of real property. The Maryland statute does not, however, apply to this controversy by force of Maryland law. As situs of the property, the District of Columbia could apply its local law without running afoul of the constitutional strictures of Due Process or Full Faith and Credit. This conclusion is, however, only the first step and does not reach the choice of law question at all. To the extent that the District Court felt compelled by territorial considerations to .apply the law of the District of Columbia, the court failed to distinguish between an attempt by a domiciliary state to apply its local law regarding tax apportionment to land located in another jurisdiction, on the one hand, and the decision of a situs forum to defer to the local law of the domicile, on the other. The former would be an attempt to extend the effect of the forum’s own local law to property not present in the jurisdiction and would arguably give unjustifiable extraterritorial effect to the law of the forum. The decision of a situs to apply the law of the domicile is, however, simply a determination that the forum’s own choice of law policies are best served by reference to foreign law. Whenever a forum under no compulsion to do so elects as a matter of conflicts policy to apply the law of another jurisdiction, that law is given “extraterritorial effect” in the sense that such effect is present here. But since there are no incursions upon sovereignty in the application of foreign law, this “effect” is in no sense a barrier to such deference. The relevant inquiry focuses on the relationships of the two jurisdictions to the controversy, the interests involved, and whether application of foreign law would offend a strong and clearly defined local policy. Objections to application of foreign law would be justified if this analysis were to disclose that important interests of the forum would be sacrificed to advance equal or lesser interests of another jurisdiction, but resolution of that question is not advanced by reference to extraterritoriality. IV Although we do not attempt to resolve our choice of law problem simply by casting it within the mold of one or another of the traditional conflicts categories, it is still appropriate to determine whether the principles and policies which forged those rules are applicable to our situation. Concerns with the stability of use of, and marketability of title to, land were bases of the traditional conflicts rule that the law of the situs governs questions of succession to land, and allocation of the federal estate taxes is at least a related issue. In respect of such considerations, however, it is possible to distinguish between questions of succession to land and those concerning apportionment of estate taxes against the land. The question of apportionment could affect title to the land only indirectly at best, and would in any event affect only a portion of the value. Unlike questions relating to the validity of title, the issue of tax liability is one of short duration. The attenuation of this relationship suggests that a principal reason for the concern with stability of title — the danger of third-party reliance on the law of the situs — is insubstantial with regard to the responsibility for estate taxes. Since it seems that the interests underlying the traditional rule are not involved in this case, that rule casts no weight into the balance. We must further determine whether the assumed District of Columbia rule of nonapportionment reflects some strong policy or protects a significant interest. Initially it should be noted that there has been no clear explication of the law of the District of Columbia on this point. If the law is nonapportionment, it is by virtue of the common law rule that taxes are expenses to be paid out of the residuary estate. That rule developed on the basis of the presumed intent of the testator. However, as noted previously, the entire area of estate planning and estate taxation has undergone substantial change in recent years, in the midst of that change the District of Columbia has at most retained the old rule with no apparent reexamination of the rule’s relationship to the policies which originally justified its adoption. Nor has any new justification for the rule been suggested in other cases or by the parties in this proceeding. Although we do not decide that there is no longer any basis for the rule of nonapportionment in the District of Columbia,. neither do we discern a strong local poli- ,. ,. . ,, cy requiring application of the rule to the facts before us. V On balance we conclude that Maryland is the jurisdiction with the most significant interest in this controversy, and that application of the Maryland statute would best serve the various policies to be considered. The statute is a clear expression of a state policy to protect persons such as appellant. The law, and consequently its basis, are much less clear in the District of Columbia. Further, reference to the law of the domicile will result in uniform treatment of all beneficiaries of an estate. Absent an identifiable interest in the application of the substantive law of the District of Columbia, it is unimportant that this decision gives the Maryland statute effect where not constitutionally compelled. Within our federal system deference to the law of the jurisdiction of dominant interest should not be viewed as a threat to the sovereignty of the forum. Such action should promote a spirit of cooperation and should help insure that other jurisdictions will be sensitive to the forum’s policies, Accordingly, we reverse and remand f0r further proceedings consistent with this opinion. . It is so ordered, . R. J. Mazza owned two properties in the District of Columbia as joint tenant with Olga Mazza, and was joint tenant of a third property in the District with both Olga and a second sister, Dorothy Ridenour. Both sisters survived R. J. Mazza, but Dorothy Ridenour is since deceased ; and Olga Mazza is the sole survivor of the joint tenants. This opinion draws no distinction between the three properties, and, for convenience, the discussion treats Olga and R. J. Mazza as the only joint tenants. . The estate prior to inclusion of the D. C. property was $110,196.62, while the value of that property was $81,250.00. Appellant demanded that appellee pay $17,987.07 as her share of the estate tax apportioned on a pro rata basis. . Int.Rev.Code of 1954 §§ 2206, 2207. These sections deal -with insurance includible in the gross estate and with property subject to a power of appointment within § 2041. . Under 93 Md.Code § 11-109 (b) (1970), the federal estate tax is to be apportioned among all persons interested in the estate. The apportionment shall be made in the proportion that the value of the interest of each person interested in the estate bears to the total value of the interests of all persons interested in the estate. The definition of “persons interested in the estate” is any person, including a personal representative, guardian, or trustee, entitled to receive, or who has received, from a decedent while alive or by reason of the death of a decedent, any property or interest therein included in the decedent’s taxable estate. 93 Md.Code § 11-109 (a) (4). . The cases cited by the District Court support its conclusion, but they are not directly controlling. Hepburn v. Winthrop, 65 App.D.C. 309, 83 F.2d 566 (1936), concerned only apportionment among probate assets, and the question is somewhat different where nonprobate assets are involved. See Ritchie, Alford and Effland, Decedents’ Estate and Trusts 818 (3d Ed. 1967). Further, the Hepburn court felt compelled to reject apportionment on the basis of its interpretation of the Internal Revenue Code, a ground now foreclosed by Riggs v. Del Drago, 317 U.S. 95, 63 S.Ct. 109, 87 L.Ed. 106 (1942). The issue in Del Mar v. United States, 129 U.S.App.D.C. 51, 390 F.2d 466 (1968), was whether the statutory share of one third of the estate available to the widow under 18 D.C.Code § 211 (1961) was to be computed before or after payment of the federal estate tax. In the course of its treatment of that question, the court stated the rule to be nonapportionment, but again apparently only probate assets were involved. In District of Columbia v. Payne, 126 U.S.App.D.C. 47, 374 F.2d 261 (1966), the question of apportionment was again tangential to the principal issue and again only probate assets were involved, but the opinion contains a flat statement that nonapportionment is the law of this jurisdiction on the basis of Hepburn. . This conclusion is supported by the difficulty of categorizing this issue in traditional conflicts terms. Questions of succession to land have traditionally been referred to the law of the situs. Restatement (Second), Conflict of Laws §§ 236-239 (1971); Ehrenzweig, Conflict of Laws § 247 (1962). Some problems concerning administration of the estate and determination of the testator’s intent are commonly governed by the law of the decedent’s domicile. See Doetsch v. Doetsch, 312 F.2d 323, 328 (7th Cir. 1963), and the authority cited therein. Proper allocation of the federal estate tax does not seem to fit neatly within either category and I lie policies behind belli rules may arguably have some application here. In (his situation a solution purport in/; to rest simply on classification /night well /// fact bo an interest analysis approach. See Hancock, Conceptual Devices for Avoiding the Land Taboo in Conflict of Laws: The Disadvantages of Disingenuousness, 20 Stan.L.Rev. 1 (1967). Resort to such an artificial device would only cloud the issue and increase the clanger that “situs” or “domicile” would be accorded deference in a situation where the original policy basis for .such treatment is inoperative. . Massachusetts, Minnesota and Michigan apply the law of the situs of the land. Isaacson v. Boston Safe Deposit & Trust Co., 325 Mass. 469, 91 N.E.2d 334 (1950); First National Bank of Miami v. First Trust Co. of St. Paul, 242 Minn. 226, 64 N.W.2d 524 (1954); Knowles v. National Bank of Detroit, 345 Mich. 671, 76 N.W.2d 813 (1956). Michigan’s position is not entirely clear because the court in Knowles relied partially on interpretation of the testator’s intent. New York, New Jersey, and Illinois (as interpreted by the Seventh Circuit) all apply the law of the decedent’s domicile. In re Gato’s Estate, 276 App.Div. 651, 97 N.Y.S.2d 171 (1950), aff’d 301 N.Y. 653, 93 N.E.2d 924; Trust Co. of Morris County v. Nichols, 62 N.J.Super. 495, 163 A.2d 205 (1960); Doetsch v. Doetsch, 312 F.2d 323 (7th Cir. 1963). . See Combined Reports of the Decedents Estate Commission Doc.No.69 at 197 (1930); Fleming, Apportionment of Federal Estate Taxes, 43 Ill.L.Rev. 153, 159 (1948); Gump, Apportionment of the Federal Estate Tax, 6 Ma.L.Rev. 195 (1942); Mitnick, State Legislative Apportionment of the Federal Estate Tax, 10 Ma.L.Rev. 289, 290 (1949); Note, Statutory Apportionment of Federal Estate Taxes, 61 Harv.L.Rev. 850, 852 (1948). . Scoles, Apportionment of Federal Estate Taxes and Conflict of Laws, 55 Colum.L.Rev. 261, 262 (1955). . E. g., In re Gato’s Estate, 276 App.Div. 651, 97 N.Y.S.2d 171, aff’d, 301 N.Y. 653, 93 N.E.2d 924 (1950). . For a discussion of uniformity as a conflict of laws policy, see Scoles, supra note 9, at 266-267. In addition to that generalized interest, uniformity of treatment seems best calculated to effectuate the testator’s intent. A testator might have desired either pro rata apportionment or payment from the residuary estate, but only the most whimsical testator would have elected different treatments dependent upon differing and changeable state laws. . 91 N.E.2d at 336. . Restatement (Second), Conflict of Laws § 59 (1971) ; Ehrenzweig, Conflict of Laws § 40 (1962). . The court in Isaacson appears to have failed to take into account this distinction, since it cited these two different types of cases as opposing treatments of the same question. 91 N.E.2d at 336-337. Similarly, none of the other cases applying the law of the situs (see note 7 supra) discuss these questions. All seem to rest solely on extraterritoriality. . See Scoles, supra note 9, at 283. But some New York cases assert the power of the forum to apply its own law in this situation. Cronise’s Estate, 167 Misc. 310, 6 N.Y.S.2d 392 (Sur.Ct.1937); Matter of Adams, 37 N.Y.S.2d 587 (Sur.Ct.1940). . Ehrenzweig, Conflicts of Laws § 247 (1962). . Cf. Cronise’s Estate, 167 Misc. 310, 6 N.Y.S.2d 392 (Sur.Ct.1937); Matter of Adams, 37 N.Y.S.2d 587 (Sur.Ct.1940). . Cf. Hancock, supra note 6, at 19. . See note 5 supra. . Hepburn v. Winthrop, 65 App.D.C. 309, 83 F.2d 566 (1936); see Note, supra note 8, at 852; see also Scoles, supra note 9 at 262. . Appellee also contends on the basis of general equitable principles that she should not now be charged with a pro rata share of the estate tax because she did not have the benefit of a deduction for such tax in computing her District of Columbia inheritance tax. The District Court’s findings disclose the following sequence of events. On February 27,-1967, appellee filed a District of Columbia inheritance tax return and paid the tax. Appellant filed the federal estate tax return on July 15, 1967, reporting an estate of $110,196.62 without including the D.C. properties, and paid a tax of $23,035.84. An audit and subsequent proceedings resulted in inclusion of those properties in the taxable estate and, consequently, payment of an additional federal estate tax of $23,647.44 on November 29, 1969. Shortly after the additional tax was finally assessed, the three year period within which appellee could have filed for a refund on her District of Columbia inheritance taxes had expired. 47 D.C. Code § 2413 (1967). It is unclear, however, at what point appellant first requested contribution. If that was within the three year period, appellee could have preserved her claim to a refund by filing a claim at that time even though the final liability was not yet determined. Neither the failure so to file nor an incorrect guess about the ultimate allocation of the estate tax burden would automatically entitle appellee to relief from what is otherwise determined to be her pro rata share. We do not foreclose the possibility that further development of the facts will indicate that some adjustment to reflect these events may be appropriate, but we do not conclude that general equitable principles justify a general refusal to apportion.

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Gilbert C. WAITE, Appellant, v. Louis JACOBS. No. 24183. United States Court of Appeals, District of Columbia Circuit. Argued Nov. 1, 1971. Decided March 8, 1973. Milton A. Kallis, Washington, D. C., for appellant. Charles H. Roistacher, Asst. U. S. Atty., with whom Thomas A. Flannery, U. S. Atty. at the time the brief was filed, John A. Terry and John T. Kotelly, Asst. U. S. Attys., were on the brief, for appellee. Before BAZELON, Chief Judge, and McGOWAN and WILKEY, Circuit Judges. McGOWAN, Circuit Judge: Appellant was civilly committed to Saint Elizabeths Hospital, an institution for the mentally ill, in 1952. He eloped in 1953, and, according to the Government’s brief, was thereafter “discharged from the rolls” of the hospital. In September, 1958, however, appellant was again committed to Saint Elizabeths, having been found incompetent to stand trial on a charge of assault with a dangerous weapon. He was subsequently certified to be competent and, in February of 1961, was tried by the court without a jury and found not guilty by reason of insanity. Under the procedures in force at that time, his insanity acquittal resulted in automatic commitment to Saint Elizabeths; and he has been confined there ever since. This appeal concerns his petition for habeas corpus, which was instituted in October, 1969, and denied in March, 1970, by the District Court, which found that “petitioner has not carried his burden of proof and that he continues to have a mental illness and that if released he would be a danger to himself and others.” (Emphasis added.) Appellant advances numerous arguments on this appeal, some of which have become moot, and others with which we do not agree. He does, however, raise the question of which side should bear the burden of proof in cases of this nature, contending that the Government should be made to justify his continued confinement, rather than his being made to prove eligibility for release. Although we find no occasion to question the long-standing rule that the burden of proof is on the petitioner in habeas corpus proceedings, see Bolton v. Harris, 130 U.S.App.D.C. 1, 395 F.2d 642, 653 (1968), we conclude that, in the special circumstances of this case, appellant’s claim may have merit; and we remand so that the District Court may consider the problem. Two facts are central to this result. First, appellant’s 1961 trial occurred prior to our decision in Bolton v. Harris, which held that persons acquitted by reason of insanity (hereinafter “acquitees”) must, prior to indeterminate commitment, be given a judicial hearing “substantially similar” to the one afforded persons who are civilly committed (hereinafter “commitees”). Since Bolton was applied only prospectively, we must assume that appellant was subject to pre-Bolton procedures, whereby acquitees were automatically confined for an indefinite term, i. e., until they could obtain a court order for their release, based on either the certification of the hospital superintendent that they no longer required treatment or on a successful habeas petition. Second, the maximum sentence which might have been imposed had appellant been convicted was ten years. 22 D.C.Code § 502. Thus, as of the date of the hearing on his habeas petition, appellant had been confined for over nine of the ten years for which he might have been sentenced criminally, and his maximum sentence period had ended long before this appeal was taken under submission. In addition to these two facts, our view that the Government may perhaps be required to bear the burden of justifying appellant’s continued commitment rests on the assumption that the sole legal basis for his confinement over the past twelve years has been his 1961 insanity acquittal. It is possible, however, that the 1952 civil commitment order retains vitality, and could support appellant’s confinement even in the absence of the insanity acquittal. Given the statement in the Government’s brief that appellant was “discharged from the rolls” of Saint Elizabeths after his 1953 escape, that possibility seems remote in the light of Gillis v. Cameron, 116 U.S.App.D.C. 387, 324 F.2d 419 (1963); and the discussion below therefore assumes that the 1952 order has no present effect, that is to say, appellant is no different from other pre-Boíícm acquitees. We do not, however, preclude the possibility that there are facts which would render Gillis distinguishable; and upon remand the Government is free to develop them, or to otherwise argue that appellant’s 1952 civil commitment removes his case from the scope of the rule of law which may be found to be operative. I On these facts and assumptions, we are faced with a man who has been deprived of his liberty for well over a decade by virtue of the fact that a court, sitting without a jury in 1961, had a reasonable doubt about his sanity at the time in 1958 when he committed an act prohibited by the criminal law. At no time since has the Government had to bear the burden of proving, even by a preponderance of the evidence, that he is mentally ill and dangerous. It is true that appellant has had the opportunity, in hearings on habeas petitions, to affirmatively prove that he is neither. But, especially in cases concerning psychiatric testimony, which is “often unclear, sometimes woefully muddled,” United States v. Leazer, 148 U.S.App.D.C. 356, 460 F.2d 864, 866 (1972), the allocation of the burden of proof can be outcome determinative. Our concern, however, is not with any procedural defect which might be found when a pre-Bolton acquitee’s commitment is viewed in isolation. The crucial fact is that other persons confined in mental hospitals — namely, commitees — have been given the benefit of more stringent procedural safeguards. This difference in the treatment of two classes of mental patients has led us to scrutinize appellant's claim under the Equal Protection Clause, as interpreted in several recent Supreme Court decisions. It seems to us that, after the expiration of the period for which an acquitee might have been incarcerated had he been convicted, it may be irrational, within the meaning of equal protection doctrine, to distinguish between an acquitee and a commitee. Acquitees who have been confined for that period, therefore, may be entitled to treatment no different from that afforded commitees. Such a constitutional entitlement would necessitate that appellant be given a hearing at which the Government, in order to justify his continued confinement, would have to bear the burden of proof on the issues of mental illness and dangerousness. II There are two differences between acquitees and commitees, both relating to the fact that the former have committed the physical elements of a crime, which might be thought to justify treating them differently for purposes of initial commitment. Neither distinction, however, would seem to have force after the expiration of the maximum sentence period. First, as Judge Leventhal noted in his concurrence in Dixon v. Jacobs, 138 U.S.App.D.C. 319, 427 F.2d 589, 603-604 (1970), a person who is acquitted by reason of insanity may “have meaningful elements of responsibility for the offense, even though there is enough doubt to obviate a verdict of guilty.” Such an acquittal means only that there was a reasonable doubt concerning the defendant’s sanity at the time he committed a prohibited act. It is possible that he was sufficiently sane to have criminal responsibility; indeed, under the applicable standard, it may be more likely than not. Moreover, “meaningful elements of responsibility” may exist even in those cases in which the jury is certain that the defendant was not “sufficiently responsible.” The insanity defense is not a matter of black and white — there is not a precise psychological line separating absolute free will from absolute uncontrollability. Rather, the defense is based on a balance between mental disease and self-control, the law having determined that a person should not be found guilty when the former is such that the latter becomes, not non-existent, but merely “substantially impaired.” McDonald v. United States, 114 U.S.App.D.C. 120, 312 F.2d 847, 851 (1962). Even those defendants who are “legally insane” to a “certainty,” in other words, may have some control over their behavior, and therefore may possess some “meaningful elements of responsibility for the offense.” While that possibility might have relevance for purposes of initial commitment procedures, it would seem to have none after the maximum sentence period. See Dixon, supra, at 604 (Leventhal, J., concurring). After confinement for that term, and in most cases much earlier, even a person who was fully accountable for a crime is free to rejoin the community. It follows, therefore, that the acquitee’s substantially lesser responsibility should have no bearing on his continued confinement after the maximum sentence period. That is not to say that the acquitee must be released even if he is mentally ill and dangerous, but rather that his continued confinement, and the procedures governing it, cannot be justified by reference to his partial responsibility for a prohibited act. The second difference between acquitees and commitees, which might be thought to justify different treatment of the two classes, is that the former have “already unhappily manifested the reality of anti-social conduct,” Dixon, supra at 604, and might therefore be considered demonstrably more dangerous than the latter. See Overholser v. O’Beirne, 112 U.S.App.D.C. 267, 302 F.2d 852, 859 (1962). An analysis of several recent Supreme Court opinions, however, suggests that that difference may not justify discrimination against an acquitee who has been confined for the maximum sentence period. The first in this line of cases is Baxstrom v. Herold, 383 U.S. 107, 86 S.Ct. 760, 15 L.Ed.2d 620 (1966), which concerned a New York statute providing that a state prisoner could, at the end of his sentence, be civilly committed without the jury trial afforded all other commitees, and could thereafter be sent to a special hospital for the dangerously insane without the hearing normally prerequisite to such confinement. The state argued “that it is reasonable to classify persons in Baxstrom’s class together with those found to be dangerously insane since such persons are not only insane but have proven criminal tendencies as shown by their past criminal records.” Id. at 114, 86 S.Ct. at 764. The Supreme Court found that contention to be “untenable,” id., noting: Classification of mentally ill persons as either insane or dangerously insane of course may be a reasonable distinction for purposes of determining the type of custodial or medical care to be given, but it has no relevance whatever in the context of the opportunity to show whether a person is mentally ill at all. For purposes of granting judicial review before a jury of the question whether a person is mentally ill and in need of institutionalization, there is no conceivable basis for distinguishing the commitment of a person who is nearing the end of a penal term from all other civil commitments. Id. at 111-112, 86 S.Ct. at 763. (Emphasis in original.) In light of this language, this court has read Baxstrom as turning, not on the fact that Baxstrom was nearing the end of his sentence, but on the assumption that “dangerousness is not relevant to the procedures for determining whether a ‘person is mentally ill at all.’ Baxstrom thus might be said to require the conclusion that, while prior criminal conduct is relevant to the determination whether a person is mentally ill and dangerous, it cannot justify denial of procedural safeguards for that determination.” Cameron v. Mullen, 128 U.S.App.D.C. 235, 387 F.2d 193, 201 (1967). (Emphasis in original.) Read in this manner, Baxstrom would seem to indicate that no procedural discrimination against acquitees can be justified on the ground that they have “already unhappily manifested the reality of antisocial conduct.” A second Supreme Court case, decided as recently as the 1972 Term, appears to point in the same direction. Humphrey v. Cady, 405 U.S. 504, 92 S.Ct. 1048, 31 L.Ed.2d 394 (1972). Humphrey had been convicted in a Wisconsin state court of contributing to the delinquency of a minor, a misdemeanor entailing a one-year maximum sentence. In lieu of sentence, he was committed to a “sex deviate facility” in the state prison, pursuant to the Wisconsin Sex Crimes Act. Wis.Stat.Ann. § 959.15 (1958), as amended, Wis.Stat.Ann. § 975 (1971). Under that statute, commitment to the sex deviate facility can be authorized for an initial term equal to the maximum sentence which might be imposed for the defendant’s crime. After the maximum sentence period, the state can obtain five-year renewals, on the basis of a showing of dangerousness, made before a judge sitting without a jury. Humphrey challenged such a renewal order, obtained at the expiration of his one-year maximum sentence period. In remanding the case for the evidentiary hearing which had been denied by the District Court, the Supreme Court noted (at pp. 510-511, 92 S.Ct. at p. 1052, footnotes omitted) that “[c]ommitment for compulsory treatment under the Wisconsin Sex Crimes Act appears to require precisely the same kind of determination” as compulsory civil commitment under the state’s Mental Health Act (which provides for a jury determination of the conditions for commitment), and “inquire[d] what justification exists for depriving persons committed under the Sex Crimes Act of the jury determination afforded to persons committed under the Mental Health Act.” Citing Baxstrom, the Court indicated that Humphrey’s dangerous conduct could not justify such procedural discrimination after the maximum sentence period had expired: [The State] seeks to justify the discrimination on the ground that commitment under the Sex Crimes Act is triggered by a criminal conviction; that such commitment is merely an alternative to penal sentencing; and consequently that it does not require the same procedural safeguards afforded in a civil commitment proceeding. That argument arguably has force with respect to an initial commitment under the Sex Crimes Act, which is imposed in lieu of sentence, and is limited in duration to the maximum permissible sentence. The argument can carry little weight, however, with respect to the subsequent renewal proceedings, which result in five-year commitment orders based on new findings of fact, and are in no way limited by the nature of the defendant’s crime or the maximum sentence authorized for that crime. Humphrey clearly indicates that Baxstrom, which concerned a prisoner, applies fully to the situation of an acquitee who has been confined for the maximum sentence period. Insofar as the initial commitment is concerned, we can perceive little difference between Humphrey and an acquitee. Humphrey was found to have performed an anti-social act and was given compulsory treatment in lieu of sentence, after a determination apparently identical in nature with that required under a civil commitment statute. An acquitee, similarly, has been found to have performed an anti-social act and is given compulsory treatment after a proceeding “substantially similar” (Bolton) to the one afforded commitees. The circumstance that Humphrey was committed in lieu of sentence, while an acquitee is committed “in lieu of conviction,” does not detract from the essential similarity of the two commitments. Thus, Humphrey may well be viewed as embracing the proposition that procedural discrimination against acquitees because of their demonstrated dangerous propensities is prohibited in recommitment proceedings. See also Matthews v. Hardy, 137 U.S.App.D.C. 39, 420 F.2d 607 (1969), cert. denied, 397 U.S. 1010, 90 S.Ct. 1231, 25 L.Ed.2d 423 (1970). Appellant, however, is not the subject of re-commitment proceedings as such. His 1961 commitment, unlike Baxstrom’s and Humphrey’s, was for an indefinite term. A question arises, therefore, as to the reach of Baxstrom and Humphrey to the situation of continued, as opposed to renewed, confinement. It might be argued, initially, that Humphrey is directly applicable to the issue of indefinite commitment itself, and that it requires that the initial confinement be limited to the maximum sentence period. Thus, it might seem that the result in that case would have been no different if the Wisconsin statute, instead of authorizing a fixed initial term with renewals, had provided that the initial commitment be indefinite. Renewal proceedings with inadequate safeguards are surely better than no renewal proceedings at all; and, since the Court found constitutional fault in the former, a similar holding as to the latter may be implicit. Such a conclusion is not ineluctable, however, as the Court has occasionally invalidated discriminations operative in a procedural context without reaching the question of whether the procedure We itself is constitutionally required. therefore intimate no view on the constitutionality per se of an acquitee’s indeterminate commitment, either under Humphrey or under traditional due process concepts. Whether or not Humphrey is directly applicable to the issue of indefinite commitment of acquitees, however, a subsequent Supreme Court decision, Jackson v. Indiana, 406 U.S. 715, 92 S.Ct. 1845, 32 L.Ed.2d 435 (1972), suggests that the Baxstrom rationale applies to appellant, even though his case concerns continued, rather than renewed, commitment. Jackson, a mentally defective deaf mute, was committed to a mental hospital as incompetent to stand trial on a charge of robbery. Noting that “[t]here is nothing in the record that even points to any possibility that Jackson’s present condition can be remedied at any future time,” the Court concluded that Jackson’s commitment was “permanent in practical effect.” Although the procedural safeguards at Jackson’s commitment hearing were “substantially similar” to those available under state statutes providing for indeterminate civil commitment, the Court found a violation of equal protection in the fact that, under the terms of Jackson’s commitment, he could obtain release only by meeting a standard more stringent than those applicable to persons not charged with criminal offenses: Baxstrom did not deal with the standard for release, but its rationale is applicable here. The harm to the individual is just as great if the State, without reasonable justification, can apply standards making his commitment a permanent one when standards generally applicable to all others afford him a substantial opportunity for early release. 406 U.S. at 729, 92 S.Ct. at 1853. Thus, Jackson expressly holds that Baxstrom is applicable to the problem of release from indefinite confinement, even though re-commitment proceedings are not contemplated by statute. Read together, then, Humphrey and Jackson indicate that, once the maximum sentence period has expired, it is unconstitutional to discriminate against an acquitee, as compared with a commitee, for purposes of release from indefinite commitment. From that moment on, acquitees and commitees appear, in the Court’s contemplation, to be on the same footing. Assuming the correctness of this analysis, the issue is whether appellant, in seeking release from confinement, is on an equal footing with a commitee. It is not dispositive to point to the fact that the relevant statutory provisions, as judicially construed, provide that both acquitees and commitees can obtain release through petitions for habeas corpus, and that the burden of proof on the issues of mental illness and dangerousness is, in either ease, on the petitioner. The reason that equal protection may be violated despite such apparent similarity of treatment is that placement of the burden of proof on the habeas petitioner, while rationally justifiable in the case of a commitee, may be irrational with respect to appellant for the reason that just as it is unconstitutional to place a burden on only one of two similarly situated persons, so also may it be irrational to place similar burdens on persons situated differently. The rational justification for placing the burden of proof on a commitee is that his mental illness and dangerousness have previously been convincingly established. In light of those established facts, the law gives effect to a presumption of continuity of status. It comports with normal perceptions of reality — and hence is rational — to assume that, once a given status is proven to exist, it continues to do so in the absence of evidence showing the contrary to be more likely than not. The presumption of continuity of status, however, cannot operate with respect to a pre-Bolton acquitee, because he has not been proven to be mentally ill and dangerous. He and a commitee are, in that respect, differently situated; and it would seem to offend equal protection to place upon him a burden which can justifiably be placed on a commitee only by reference to the differentiating characteristic. III If appellant is constitutionally entitled to be put on an equal footing with commitees, as the foregoing considerations suggest, then it would seem that he has a right to a hearing, with all the procedural safeguards available in civil eommitment proceedings, at which the Government must bear the burden of proof on the issues of his mental illness and dangerousness. The fact that appellant committed the physical elements of a crime in 1958 would, of course, be relevant evidence admissible at the hearing. The time seems past, however, when that act can be accorded more than evidentiary significance. While it appears that strong constitutional arguments can be made in support of the granting of the above-mentioned relief to appellant, we do not now so hold. Since the arguments were not made in appellant’s brief or at oral argument (indeed, both Humphrey and Jackson were decided subsequent to oral argument), the Government has had no opportunity to respond to them. Therefore, we limit ourselves to the suggestion that, for the reasons developed above, appellant may be entitled to have the Government bear the burden of proof on the issues of mental illness and dangerousness; and we remand for a full consideration of the problem, including, if necessary, additional evidentiary inquiries. The District Court should initially resolve the question of the continued vitality of appellant’s 1952 civil commitment order. If it determines that the answer is as we have assumed it to be, it should then address the constitutional issues posed above, allowing counsel for both parties to address themselves to them. The case is remanded to the District Court for further proceedings in the light of this opinion. It is so ordered. . Appellant eloped from the hospital and was absent for several days in 1962. At oral argument, counsel informed us that appellant now spends much time away from the hospital grounds under a conditional release. Appellant remains on the rolls of Saint Elizabeths, however, and, according to the Assistant United States Attorney who appeared before us, returns to John Howard Pavilion each night to sleep. The issue of the validity of appellant’s continued confinement, therefore, has not been mooted. . Appellant’s conditional release, see note 1, supra, has mooted his claim that he was improperly confined in the hospital’s maximum security facility, as well as his contention that he was receiving inadequate treatment. . Appellant attacks the Government’s psychiatric testimony on a variety of grounds. He asserts that much of it was based on unverified reports from nurses and ward attendants, or on hospital records which were unauthenticated, inadmissible, and incomplete. Reliance by a doctor on reports from his staff was, however, approved by this court in Brown v. United States, 126 U.S.App.D.C. 134, 375 F.2d 310, 318 (1967) ; and the admissibility of hospital records is settled in this jurisdiction by Covington v. Harris, 136 U.S.App.D.C. 35, 419 F.2d 617, 626 (1969). As for the alleged incompleteness of those records, that is something which we cannot consider without being able to examine the records themselves. Although he could have done so under Covington v. Harris, supra at 626, appellant’s counsel chose not to introduce those documents into evidence, reasoning, as he explained at oral argument, that the trial court should not be burdened with “a lot of anonymous hearsay.” The hospital documents are therefore not part of the record on appeal; and, while we reiterate the importance of detailed record-keeping, id. at 627, we hold that the issue of tKeir completeness is not properly before us. Appellant also urges that the Government’s psychiatric testimony was conclusory, and that it was based on inadequate diagnoses and examinations. We have found nothing in the record, however, which would require reversal on either of those grounds. . As noted above, appellant’s arrest in 1958 occurred while he was at large subsequent to his 1953 elopement. . The Government does not argue that the 1952 order retains vitality; and the District Court clearly assumed that the insanity acquittal was the basis for appellant’s commitment. . The recent amendment to the D.C.Code which purports to require that insanity be established by a preponderance of the evidence, 24 D.C.Code § 301 (j) (1967 ed., Supp. V, 1972), is not applicable to this case; and we express no views with respect to it. . Of course, post-Bolton acquitees have also been given the benefit of more stringent procedural safeguards; but the discrimination between pre- and post-Bolton acquitees is sanctioned by the prospectivity holding of Bolton itself. . In alluding to these possible distinctions, we are not called upon in this case to express any opinion as to what, if any, discriminations in the initial commitment decision, between commitees and acquitees, are permitted or required by the Constitution. On the record before us we deal only with a pre-Bolton acquitee whose commitment to a mental institution has now lasted longer than the maximum sentence which could have been imposed had he been found guilty. Compare United States v. Brown 155 U.S.App.D.C. -, 478 F.2d 606 (1973). . The Second Circuit, quoting from Cameron, rendered a similar interpretation of Baxstrom in United States ex rel. Schuster v. Herold, 410 F.2d 1071 (2d Cir. 1969). . It should be noted, moreover, that the Court, in discussing the state’s asserted justification in the passage excerpted above, granted its “arguable force” only “with respect to an initial commitment . . . limited in duration to the maximum permissible sentence.” . See, e. g., Griffin v. Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891 (1956). . See Ragsdale v. Overholser, 108 U.S.App.D.C. 308, 281 F.2d 943, 950 (1960) (Fahy, J., concurring). In McNeil v. Director, Patuxent Institution, 407 U.S. 245, 92 S.Ct. 2083, 32 L.Ed.2d 719 (1972), the Supreme Court noted that “lesser [procedural] safeguards may be appropriate” when commitment is for “a limited purpose”; but indicated that “by the same token, the duration of the confinement must be strictly limited [by reference to the purpose].” Id. at 249-250, 92 S.Ct. at 2087. . 24 D.C.Code § 301, as construed in Bolton v. Harris, supra, at p. 653 of 395 F.2d. . The practical importance of this concept can perhaps be illustrated by assuming the cases of two persons about whom the evidence as to mental illness is, always has been, and always will be, inconclusive — it cannot be., said with reasonable certainty that either is, or is not, mentally ill. Person number one is a pre-Bolton acquitee. Because there was reasonable doubt about his sanity, he was acquitted of a criminal charge and automatically committed for an indefinite term. Because he cannot establish his sanity, he will never obtain his release under the present rule. Person number two is walking the streets. The Government once attempted to commit him civilly; because the evidence was inconclusive, however, that attempt failed. Clearly, Baxstrom, Humphrey, and Jackson mean that both persons must be treated equally after the expiration of number one’s maximum sentence period. Under present procedures, however, that will not be the case: Number two will never see the inside of a mental hospital, and number one will never see the outside. . This would leave undisturbed the traditional rule that the burden of proof is on the petitioner in habeas corpus proceedings, and the application of that rule by Bolton, supra, at 653, to habeas petitions brought by commitees and post-Bolton acquitees. So long as the status of mental illness has previously been proven to exist, the presumption of its continuity can, as noted above, rationally justify the traditional rule. Thus, once an acquitee is proven to possess the prerequisites for commitment, the burden of proof will be on him in any subsequent habeas proceedings. . To the extent that statements in Ragsdale v. Overholser, 108 U.S.App.D.C. 308, 281 F.2d 943 (1960), and Overholser v. O’Beirne, 112 U.S.App.D.C. 267, 302 F.2d 852 (1961), are inconsistent with this theory, we must again recognize, as we did in Bolton, supra, at 653 of 395 F.2d, that modification of those decisions may be required by supervening Supreme Court authority. . We have couched our discussion largely in terms of the allocation of the burden of proof for the reason that that is the issue raised by appellant on this appeal. On remand it will be open to him to make such contentions as he sees fit with respect to the precise scope of the procedural rights, including the availability of jury trial, which he may believe to be required. If a jury trial is mandated by the Constitution, the habeas procedure should be adaptable enough to be conformed to that need. Our so-called Bolton hearing, for example, fits no exact statutory or common law pattern, and demonstrates that, in this field at any rate, the forms of action are flexible. . Since appellant is a pre-Bolton acquitee, the District Court will not be faced with the question of whether the considerations we have adverted to apply to post-Bolton acquitees whose maximum sentence periods have expired.

f2d_475/html/0401-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

STANDARD EDUCATORS, INC. and James A. Melley, Sr., Petitioners v. FEDERAL TRADE COMMISSION, Respondent. No. 72-1164. United States Court of Appeals, District of Columbia Circuit. Argued Dec. 6, 1972. Decided March 9, 1973. Ronald J. Wilson, Washington, D. C., for petitioners. Nicholas S. Reynolds, Atty., Federal Trade Commission, with whom Harold D. Rhynedance, Jr., Asst. Gen. Counsel, Federal Trade Commission, was on the brief, for respondent. Before WRIGHT and WILKEY, Circuit Judges, and RICHEY, District Judge. Of the United States District Court for the District of Columbia, sitting by designation pursuant to 28 U.S.C. § 292(a) (1970). PER CURIAM: This case is here on a petition to review an order of the Federal Trade Commission. The Commission directed its order against James A. Melley, Sr. in his individual capacity, as well as against the company, because it found that Melley knew of and approved many of the false and deceptive practices. Testimony before a hearing examiner showed that Melley was the organizer of the company, served as its president and treasurer, and owned 51 per cent of its stock. In the company’s infancy he did much of the selling himself, and although at the time in question Melley no longer engaged in any selling himself, he still, in the words of the trial examiner, “spends his time in the office supervising the over-all operations * * *.” In addition, he devised the form contract used by the company’s salesmen, a contract whose provisions were an integral part of the deceptive scheme. All of these factors, combined with the uncontradicted proof of widespread instances of deceptive practices by company salesmen, support the Commission’s finding that Melley knew of and approved the deceptive practices. See Fred Meyer, Inc. v. F.T.C., 9 Cir., 359 F.2d 351, 368 (1966). The Commission introduced testimonial evidence as to 12 typical sales, dating from February 1965 to May 1968, taking place at sites as widespread as Oahu, Hawaii, Colorado Springs, Colorado, Groton, Connecticut, Portsmouth, New Hampshire, and Havre de Grace, Maryland. The same oral misrepresentations were made in every one of these cases, and in each the pattern of deception was facilitated by the contract written by Mr. Melley. The Commission does not engage in speculation when it rejects the conclusion that these similarities occurred purely by coincidence and instead infers that they were the result of direction from above. In drawing inferences about the knowledge of corporate officers in cases such as this, the Commission properly draws upon its expertise. And where it does so, our guiding principle in reviewing the Commission’s findings of fact is Mr. Justice Black’s statement for a unanimous Court in F.T.C. v. Standard Education Society, 302 U.S. 112, 117, 58 S.Ct. 113, 116, 82 L.Ed. 141 (1937): “The courts do not have a right to ignore the plain mandate of the statute which makes the findings of the Commission conclusive as to the facts if supported by testimony. The courts cannot pick and choose bits of evidence to make findings of fact contrary to the findings of the Commission. * * * ” (Footnote omitted.) In this case, the conclusion that Melley knew of and authorized the deceptive practices was amply supported by evidence of record. A heavy burden of exculpation rests on the chief executive and primary shareholder of a closely held corporation whose stock-in-trade is overreaching and deception. The other issues raised by petitioners are without merit, and were dealt with at length in the Commission’s careful, well reasoned opinion. Accordingly, the order of the Commission is Affirmed. WILKEY, Circuit Judge (dissenting): The illegal practices alleged in this case were false and deceptive statements made by individual salesmen of Standard Educators, Inc., in connection with door-to-door sales of encyclopedias. I agree with the majority that substantial evidence supports the FTC’s findings that such statements were made. I agree that the corporation, acting through its salesmen, violated the Federal Trade Commission Act. I cannot agree with the majority’s affirmance of the Commission’s decision to direct its cease and desist order against James A. Melley, Sr., in his individual capacity. The FTC and the majority repeatedly stress the existence of admitted violations by salesmen. That simply gets them nowhere on the issue of Mr. Melley’s personal involvement, although it does, of course, support the FTC’s decision against the corporation, with which I agree. As regards Mr. Melley, I find the Commission’s opinion neither “careful” nor “well reasoned.” To the contrary, it is unsupported and cavalier. As the Commission itself notes in its opinion here, “[t]he rationale for subjecting respondents in their individual capacities to Commission orders is to assure that such orders will be fully effective in preventing the unlawful activities.” This rationale necessarily implies that some connection must be established between the individual respondent and the alleged unlawful practices. If a proven connection' were unnecessary, the Commission could conceivably proceed to order each and every U.S. citizen or resident to cease all imaginable illegal practices within the FTC jurisdiction. The very nature as a “cease and desist” order implies that the named individual was at least indirectly involved in the past, or is likely to participate in the future, in the activities which the Commission wants stopped. In short, naming individual respondents in a case like this “is tantamount to a finding on the evidence that they have personally violated, or can be expected to violate . . ." the relevant statute. Flotill Products, Inc. v. FPC. Although the degree of personal involvement in the alleged violations which justifies individual direction of a cease and desist order has been variously articulated, mere ownership and control of an offending corporation, whose employees have committed the charged violations, is not enough. Mr. Melley was in fact the majority shareholder, President, Treasurer, and Chairman of the Board of Standard Educators. However, a more specific and substantial connection with the violations must be (but was not) shown to justify the order issued against him here. Rather than establishing such a connection, the FTC’s opinion, as it relates to Melley individually, ignores a highly experienced hearing examiner’s findings, goes far beyond proper inference, engages in cynical and unwarranted speculation, and finds no support in the record. This is not a case in which a likelihood of future violations has been shown, for example, by evidence that the corporation involved was formed for the purpose of evading FTC orders. Compare FTC v. Standard Education Society et al. Hardly a “fly by night” operation, Standard Educators, Inc., enjoyed a stable corporate existence since its founding in 1957. There is absolutely no evidence in the record to support a finding that Mr. Melley would attempt to play the “shell game.” This is not a case in which the deceptive practices were so intertwined with company policy that the responsible corporate officers could be fairly deemed to have known of and approved the violations. Compare FTC v. Standard Education Society et al. and Benrus Watch Company v. FTC. To the contrary, the Commission proved only scattered misrepresentations perpetrated by individual salesmen. The only evidence of central corporate policy came from Melley himself and was apparently credited by the hearing examiner. Mr. Melley testified that the company had a strong policy against misrepresentations and fired salesmen who were found to have engaged in deceptive practices. This is not a case in which widespread knowledge of the offenses in the community justified an inference that the corporate officers closely involved must also know of and approve the violations. Compare Fred Meyer, Inc., et al. v. FTC. Mr. Melley did admit that he knew the company was receiving a “very minimum” number of customer complaints, “maybe one a month.” For a company doing over $2,000,000 in sales to individual customers (in 1969), that level of customer dissatisfaction was hardly high enough to support an inference of knowledge of pervasive deceptive practices. Since Melley went on to explain how he sought to discipline salesmen and satisfy the complaining customers, an inference of approval of these abuses is even more far-fetched. Even assuming that the illegal practices could or should have been known to those directing the company on a day-to-day basis, .this is not a case in which personal knowledge could be fairly attributed to the individual officer actually named. Compare Coro, Inc. v. FTC. While Melley was deeply involved in the corporation’s early beginnings, he had almost completely withdrawn from routine supervision of its affairs at the time when the violations charged here occurred. The only evidence concerning his actual degree of involvement indicates that, while some important matters were occasionally brought to his attention, he didn’t “seem to have too many duties any more,” didn’t “watch sales that closely,” no longer hired or trained salesmen, and in fact was so removed from the business that he did not even really know how many salesmen were actually employed This is not a case in which documents distributed by the company, and used by salesmen, were themselves found to be deceptive. Compare Consumer Sales Corp. v. FTC and Steelco Stainless Steel v. FTC. There is absolutely no finding, nor could there be a reasonable one, that the contract used was on its face in any way misleading. This last point is highly significant because, when stripped of merely eonclusory language, the Commission's opinion finding personal involvement appears to be based solely on the fact that Mr. Melley helped to draft the sales contract. Although not finding the contract itself deceptive, the FTC and the majority here describe that document as “an integral part” of the deceptive sales practices challenged in the complaint. The Commission concludes that it is “unlikely” that the form used could have been “supplied for any other purpose” than that of enabling and authorizing salesmen to “sell encyclopedias in the deceptive manner charged.” No direct evidence supports such a view. Indeed, Melley testified that the operative reason for the selection of the actual contract format was a perhaps lazy, but otherwise blameless, decision to copy the clauses used by the competition. The Commission’s findings rest on the inference that a deceptive use was intended to be made of concededly nondeceptive language. If it were the case that the language of the contract had no other reasonable and commercially proper use, such a gossamer inference just might withstand scrutiny. However, all of the contract clauses singled out by the Commission do have legitimate and nondeceptive functions. The FTC suggests that the spaces provided for filling in military service information were designed to facilitate salesmen’s claims that, as a member of the military, the customer was getting a special price. Yet, at another place in the very same opinion, the Commission mentions the more obvious, legitimate, and I submit the actual, purpose for collecting this data: the customer location “problem . . . created by . [the] business policy of directing sales to military personnel.” Since that group is extremely mobile, detailed and accurate military service information was essential to keep track of people who had installment obligations to fulfill. The FTC notes that the contract mentions a charge of $3.95 “for delivery” of an extension service and binder. Their contention is that this language was intended to buttress the salesmen’s fiendishly deceptive claim that the additional cost was merely for “postage and handling charges.” Given the fact that $3.95 was indeed the total price, I find it difficult to share the Commission’s grave concern about the misleading effect of this oral representation. Even if I did share that concern, I would still be persuaded that a contract drafted with intent to support the “postage and handling” characterization would use that precise language rather than the more ambiguous “for delivery” term. The FTC further argues that this scheme of deception was writ large in the contract’s reference to the “National Combination Offer.” Whatever the salesmen may have said, falsely, about lower prices for larger purchases, the fact remains that this phrase refers to a perfectly legitimate method by which Standard Educators sold its books. By assigning point values, rather than dollar values, to additional books sold in $50 increments above the basic encyclopedia, the company offered flexibility and benefited from simplified accounting. Since the Commission has not characterized this as an illegal “tie in,” how the mere reference to this legitimate marketing system shows the contract authors’ purpose to deceive remains a mystery to me. Finally, the FTC claims that the contract provision calling for the customer’s agreement to give his opinion on the New Standard Encyclopedia demonstrates an intention to bolster the salesmen’s suggestion of a special price offered in exchange for an endorsement. Apparently, the Commission completely overlooked the more obvious possible purpose for this contract clause: an actual desire to obtain testimonials for use in advertising the product. The technique of advertising by testimonials has not, so far, been ruled illegal. As with the previously cited inferences, the Commission has chosen the one explanation of the contract drafters’ purpose, in preference to the many possible legitimate ones, which leads to a finding of intent to deceive; and it has made its choice for no other reason, from all that appears in the record, than that the desired result of holding Mr. Melley individually responsible could thereby be reached. What the Commission has done in its analysis of the contract is subtly to shift the burden of proof. For example, with regard to the testimonials, the Commission apparently felt that, once there was a showing that the contract clause actually corresponded to salesmen’s misrepresentations, Melley bore the burden of demonstrating a legitimate purpose for the language. This approach no longer requires the complaint counsel to make a substantial showing that the prohibited purpose existed. It clearly conflicts with accepted notions of where the burden falls in such a proceeding. In addition, it is most unfair, since the Commission drew its inferences about intent after the hearing at which Melley could have presented rebuttal evidence. Once Mr. Melley’s counsel had established that the contract itself was not deceptive, he might well have reasonably concluded that his need to present further evidence on the language used had ended. Given the extremely tenuous nature of the FTC’s further inferences from the contract’s language to its drafters’ purpose, I for one cannot blame Melley’s counsel for failing to anticipate and rebut them. This case comes down, in the end, to questions of Mr. Melley’s state of mind his purpose in drafting the contracts and his knowledge of the detailed practices of salesmen in the field. That question necessarily turns to a large degree on the credibility of Melley’s testimony; and the hearing examiner, who had the best opportunity to assess Melley’s credibility, believed him. The Commission obviously wanted very badly to overturn the hearing examiner’s ruling. It took an unlikely end run via inferences that contract language, innocent on its face and serving other legitimate purposes, was intended to be used for deception merely because it was actually so used by some salesmen. That sort of analysis would justify an inference that a company officer who authorized door-to-door sales must have intended to foster misrepresentation because that method of sale may provide the personal contact necessary for an unscrupulous and talented salesman to convince the customer that he is getting a special price because he lives at that address, came to the door within one minute, or has a nice face. Everything that facilitates a sale could be la-belled “an integral part” of the salesman’s deceptive scheme; but, when a possible proper use appears, and absent additional evidence, the intent of the supplier that it be used deceptively should not be so lightly inferred. Though this court normally gives deference to administrative agency decisions, if supported by testimony, I am not aware of any “expertise” in the Federal Trade Commission which permits it to find an individual responsible for deceptive conduct, and to issue a cease and desist order against that individual, when no evidence in the record makes the inference it draws any more likely than an inference clearing him of personal responsibility. That this court need not respect a greater aptitude in the FTC for drawing deductive logical conclusions is amply demonstrated by the outrageous manner in which the Commission has constructed its “chain” of “reasoning” in this case. It seems to me that affirmance here either changes the law by holding corporate officers individually liable to cease and desist orders with regard to acts with which they had no connection, save their “mere ownership and control,” or it gives the FTC a mandate to exercise no less than mystical powers. The Commission may, under the sort of reasoning approved here, act not on the basis of the record created by its complaint counsel but on sheer instinct. Heretofore such a modus operandi has been more common in the sensational press than in quasi-judicial proceedings. Since Melley has not been shown ever personally to have participated in any deceptive practice, he is not even being given the dubious benefits of the “bad man” theory. This record would not even support a high-handed attempt to enjoin, and therefore brand as a likely offender, one with a proven “predilection” to violate the law. Rather, it appears that the FTC and the majority have carved a new niche in the law for “guilt by office” and “guilt by association.” Mr. Melley is saddled with a “heavy burden of exculpation” even though no inculpating evidence (beyond mere ownership and control-— which is not enough) has been introduced! The majority seems to find that “we know your type” is acceptable logic — at least when applied to a corporation executive rather than a common criminal. I recognize that there are in fact different standards of proof in criminal trials and civil cease-and-desist order proceedings. But the lower standard in this kind of ease surely cannot be so low that it amounts to no standard of proof or indeed, as here, actually shifts the burden once complaint counsel has rested on a wink or a leer. Nor can the absence of criminal penalties support an argument that Melley is not harmed by being individually named in the cease and desist order. The upright man need not fear the direct impact of an injunction commanding him to remain honest. But the very existence of the order tells the whole world, unless it too is enjoined, that he alone has been found likely to transgress. By its unfounded order, the FTC has filched Melley’s reputation — a crime more serious than the one alleged, for it enriches the Commission not and makes Melley poor indeed. I respectfully dissent. . We might add, in response to the dissent’s unwarranted characterization of these instances as “scattered misrepresentations,” that petitioners’ own counsel sought to limit the number of customer-witnesses that could be called by the Commission in order “to reduce the case to manageable and realistic proportions” and to avoid burdening petitioners. . It is interesting to note that, although the Standard Education Society is apparently not related to Standard Educators, Inc., the record does indicate that when he incorporated Standard Educators, Inc. Mr. Melley made arrangements with Standard Education Society to purchase its line of encyclopedias for resale to the public. Standard Education Society also provides the broadsides used by Standard Educators’ salesmen in their sales presentations. In addition, the false and deceptive practices of Standard Educators, Inc. parallel in many respects the false and deceptive practices condemned in Standard Education Society, including: representing that encyclopedias are given away free or sold at a specially reduced price to selected persons in return for use of the purchaser’s name for advertising; representing that the recipient pays only for purchase of a 10-year annual yearbook extension service; and representing that the recipient was getting a special combination offer not generally available. . 15 U.S.C. § 45 (1964). . Appendix (hereafter “App.”) at p. 200. . 358 F.2d 224, 233 (9th Cir. 1966). . See Flotill Products, Inc. v. FTC where reliance, in naming individuals in the order there, “on no other fact than that the three individuals owned and controlled the corporation” was accurately described as “rather cavalier.” 358 F.2d 224, 233. . The hearing examiner specifically noted that “Complaint counsel did not point to any evidence — and there is none in the record — that Mr. Melley committed any illegal act in his individual capacity, or that Mr. Melley is likely to violate the act in the future in his individual capacity, or that he will attempt to evade any order which may be issued against the corporate respondent.” App. at pp. 181-182 (emphasis added). . 302 U.S. 112, 58 S.Ct. 113, 82 L.Ed. 141 (1937). . The hearing examiner specifically noted that “[t]here is no evidence of record to indicate that the corporate entity is a sham or that Mr. Melley organized the corporation in an attempt to evade any order which may he issued . . . . ” App. at p. 183. . The offense charged there involved a “well-matured” “general sales plan” “outlined in letters going directly from the companies.” 302 U.S. 112, 115-117, 58 S.Ct. 113, 115, 82 L.Ed. 141 (1937). . 352 F.2d 313 (8th Cir. 1965). The violation charged concerned preticketing of merchandise. That practice was of the sort necessarily planned and supervised as a matter of company policy, and could hardly have originated with a frolic and detour by individual non-policymaking employees. Therefore, the fact that the officers involved “formulated, directed and controlled the policies and practices of the corporate respondents” was enough to justify individual direction of the cease and desist order. 352 F.2d 313, 324. See also Pati-Port, Inc. v. FTC, 313 F.2d 103 (4th Cir. 1963), where the individuals named had, on request from a subordinate, specifically approved the illegal practices. . Testimony was introduced concerning twelve sales at scattered sites during a period from February 1965 to May 1968. A dispersed pattern of abuse might well merely suggest that dishonest salesmen get around and pick up the tricks of their trade from each other. Even if central control is inferable, who sent directives from above would still not have been shown. Indeed, their widely scattered character could increase the chances that company headquarters would not learn of violations. . Mr. Melley testified that if salesmen “are caught in misrepresentation, they, are fired.” App. at p. 404. . 359 F.2d 351 (9th Cir. 1966), cert. denied, 386 U.S. 908, 87 S.Ct. 851, 17 L.Ed.2d 782 (1967). In that case, the court noted that “despite Meyer’s denials of knowledge of the operations of his business, the Commission was justified in concluding that ‘if “a majority of Portland’s 120,000 families” were apprised of the details of these [deceptive] programs, we think it is a fair inference that the Chairman of the Board also knew about them.’ ” 359 F.2d 351, 368. . App. at p. 380. . 338 F.2d 149 (1st Cir. 1964). “In the absence of evidence of personal involvement in Coro’s [the company’s] unlawful conduct,” a showing of “overall corporate responsibility” was held not enough to support direction of the cease and desist order against an individual who was the largest corporate shareholder, President, and Chairman of the Board. . App. at p. 362. . App. at p. 351. . App. at p. 198. . App. at p. 351. . 198 F.2d 404 (2nd Cir. 1952). In this case, deceptive order forms furnished by tlie company supported an inference that the corporate officers “actively encouraged and participated in making the said false representations.” 198 F.2d 404, 407. . 187 F.2d 693 (7th Cir. 1951). Since the literature provided by the company, in this case, was held to be deceptive in its own right, the corporate officers could not escape responsibility just because even more misleading statements were made by salesmen. . App. at p. 198. . App. at p. 199 (emphasis added). . App. at p. 365. . App. at p. 217. . Presumably, Melley might have met this novel burden by showing that an ad campaign based on testimonials was in fact conducted. However, even if the contract clause had been inserted with a bona fide intent to collect endorsements, there are many possible reasons wby an ad campaign might not in fact have resulted. In that event, the difficulties of showing a proper purpose merely highlight the need for scrupulous care whenever guilty intent is presumed and the accused must prove the negative, . This approach is highlighted by the elaborate but irrelevant exposition by the majority, in footnote 2, attempting to link this case to Standard Education Society. Mr. Melley’s former legitimate business dealing with that firm, of course, have no probative value. The similarity of the conduct of salesmen in both cases may testify to the endurance of the confidence game — but it simply cannot show Mr. Melley’s personal involvement in their violations. Recognizing this, the majority is reduced to listing these facts as merely “interesting to note” — exactly the sort of improper “raised eyebrow” technique in which the commission was engaged.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

DAN-AIR SERVICES, LTD., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent. BRITISH MIDLAND AIRWAYS, LTD., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent. BRITISH MIDLAND AIRWAYS, LTD., Appellant, v. CIVIL AERONAUTICS BOARD. Nos. 72-1666, 72-1786, 72-1770. United States Court of Appeals, District of Columbia Circuit. Argued Oct. 10, 1972. Decided March 15, 1973. Lester M. Bridgeman, Washington, D. C., with whom Jeffrey M. Lang, Washington, D. C., was on the brief for petitioner in No. 72-1666. Paul Reiber, Washington, D. C., with whom Herbert A. Rosenthal, Washington, D. C., was on the brief, for appellant in No. 72-1770 and petitioner in No. 72-1786. Warren Sharfman, Associate General Counsel, Civil Aeronautics Board, with whom R. Tenney Johnson, General Counsel, O. D. Ozment, Deputy General Counsel, Robert L. Toomey, Atty., Civil Aeronautics Board, and Howard E. Shapiro, Atty., Department of Justice, were on the brief for respondent in No. 72-1666 and 72-1786 and appellee in No. 72-1770. Before McGOWAN and MacKINNON, Circuit Judges, and WYZANSKI Senior United States District Judge for the District of Massachusetts. Sitting by designation pursuant to 28 XJ.S. O. § 294(d) (1970). PER CURIAM: Dan-Air Services, Ltd. (Dan-Air) and British Midland Airways, Ltd. (BMA) are foreign air carriers authorized to engage in charter operations between the United States and England. They seek review of Civil Aeronautics Board Order 72-6-59 which implements a condition in their operating authority by requiring that they (and another carrier) file for advance approval of all passenger charter flights at least 25 days prior to flight date, and forbidding the operation of a charter flight for which such approval has not been obtained. The case also involves an appeal by BMA from the District Court’s denial of BMA’s motion for preliminary injunction seeking to restrain enforcement of the same Board order pending final disposition of a complaint for a permanent injunction filed in that court by BMA more than a month prior to its petition for statutory review. The authority of Dan-Air and BMA to operate into and out of the United States is derived from foreign air carrier permits issued pursuant to orders of the Board entered under section 402 of the Federal Aviation Act (49 U.S.C. § 1372) after approval by the President under section 801 (49 U.S.C. § 1461). These permits authorize the carriers to conduct operations between points in the United States and the United Kingdom, limited exclusively to charter flights as defined in Part 214 of the Board’s Economic Regulations. Condition (4) of appellants’ operating permits provides as follows: (4) The exercise of the privileges granted by this permit, except with respect to inclusive tour charters, shall be subject to the provisions of Part 214 of the Board’s Economic Regulations, and all amendments and revisions thereof as the Board, by order or regulation and without hearing, may adopt. (J.A. 23, 60.) Part 214 contains the definitions and regulations governing operations by the holders of all foreign air carrier permits which authorize charter transportation only. The regulations applicable to pro rata charters embody the concept of “affinity” of the passengers which the Board has applied for years in drawing the line between bona fide charters and individually ticketed service offered to the public at large. To aid in effectuating this concept, the regulations require the carriers to obtain from the chartering organization “statements of supporting information” in the form prescribed by the appendix to Part 214, designed to demonstrate to the carriers’ satisfaction that the charter participants are indeed eligible for charter transportation. The carriers must obtain this information “at such time as required by the carrier to afford it due time for review thereof” (14 C.F.R. 214.22 and 214.37), and as a general rule the regulations require that the carrier obtain it 30 days prior to departure of the flight in question (14 C.F.R. 214.12(a)). These regulations are designed to maintain the “affinity” concept which has proven to be inherently difficult to enforce and administer, both for the Board and for the individual carriers. In further seeking to prevent the formation of spurious organizations solely for the purpose of obtaining individual transportation in the guise of affinity charters, the Board has inserted in the operating authority of all foreign air carriers engaging in charter operations the following condition: (5) The Board, by order or regulation and without hearing, may require advance approval of individual charter trips conducted by the holder pursuant to the authority granted by this permit, if it finds such action to be required in the public interest. (J.A. 23, 60.) This condition was contained in the petitioners’ permits at the time of their issuance and received their unqualified acceptance. On June 14, 1972, the Board determined (as it had three months earlier in the case of two other carriers) that it was indeed in the public interest to invoke the advance approval condition in the petitioners’ permits as well as that of a third foreign air carrier. The Board stated that it had substantial reason to believe that BMA [and] Dan-Air . . . may be regularly engaging in foreign air transportation under terms and conditions not in conformity with Part 214 in that, inter alia, persons are being transported who do not qualify for charter transportation authorized under Part 214. For example, several of the Board’s own employees, responding to public solicitation and mass media advertising, recently bought passage at a fixed price and participated in a number of charter flights operated by those carriers even though those employees did not meet any of the charter eligibility requirements of Part 214. None of the employees who sought the transportation were refused it. (Order 72-6-59.) While the Board expressly disclaimed any accusation or determination that petitioners (or the other carrier involved) had knowingly violated the terms of their permit, it was the Board’s judgment that “the circumstances are such that the public interest in protecting the integrity of the Board’s regulations which were adopted pursuant to law and in assuring that the carriers’ future operations comply with the permits the Board has granted them” required petitioners (and the other carrier) to obtain advance approval for all passenger charters to be operated into, or out of this country on and after July 15, 1972. The order requires that petitioners submit a request for advance approval to the Board’s Bureau of Operating Rights at least 25 days (reducible to 10 days upon a showing of good cause) prior to the proposed operation of the particular flight for which approval is requested. Dan-Air did not seek reconsideration, however BMA did. The Board denied BMA’s petition for reconsideration (Order 72-7-44), finding BMA’s contentions unsupportable and unconvincing. It found, among other things, that the requirement would not be burdensome assuming, as BMA assured the Board was the case, that the carrier was complying with the regulations, because “all of the information which they are being required to submit to the Board is being prepared by them in any event” in accordance with the regulations. The Board also concluded that there was no reason for the market to avoid carriers subject to prior approval because there was no reason to fear disapproval of valid charters. In reviewing the Board’s actions, we note preliminarily that the specific terms of condition (5) are beyond the jurisdiction of this court to review, since section 1006(a) of the Federal Aviation Act (49 U.S.C. § 1486(a)) explicitly excepts from this court’s review “any order in respect of any foreign air carrier subject to the approval of the President as provided in section 801 of this Act,” Indeed Dan-Air expressly concedes the validity of condition (5). The permits issued to petitioners were such orders under section 801 and were duly approved by the President. Accordingly, review of such orders in respect of foreign air carriers is clearly precluded by statute. Pan American World Airways v. C.A.B., 129 U.S.App.D.C. 159, 169, 392 F.2d 483, 493 (1968); British Overseas Airways Corp. v. C.A. B., 113 U.S.App.D.C. 76, 304 F.2d 952 (1962); see also C.A.B. v. Donaldson Lines, 343 F.Supp. 1059 (S.D.N.Y.1972) (appeal pending). Moreover, under traditional equity principles, review is inappropriate. Petitioners accepted their permits containing condition (5) without objection and have enjoyed the benefits conferred by those permits for approximately two years. In these circumstances petitioners should not now be heard to complain of the terms and conditions upon which they were granted the right to operate. F.P.C. v. Colorado Interstate Gas Co., 348 U.S. 492, 502, 75 S.Ct. 467, 90 L.Ed. 583 (1955); see also Callanan Road Improvement Co. v. United States, 345 U.S. 507, 513, 73 S.Ct. 803, 97 L.Ed. 1206 (1953). Distinct from the nonreviewable order originally granting petitioners’ permits is the order in question here invoking condition (5) which all parties concede is reviewable. Petitioners assert the invalidity of this order on the ground that it constituted an “amendment, cancellation, suspension, or revocation” of their certificate and therefore, under section 801, required prior Presidential approval. There is no merit to this contention since the implementation of condition (5) in no way could modify- or diminish the scope of an operating permit which at all times was subject to that condition. Moreover, the President previously had expressly approved the permits containing condition (5) which by its terms cannot be read to contemplate another Presidential approval of its invocation. Petitioners also contend that the Board’s order constituted a de facto rev-oeation, modification or suspension and is invalid since it was issued without the notice and hearing required by section 402(f) of the Act (49 U.S.C. § 1372(f)). This is similar to the first claim. Again, the simple answer is that the invocation of condition (5) was not in any realistic sense a revocation, modification or suspension of permits which were issued subject to this express condition enabling the Board to take this very action. This order is in complete accordance with the provisions of these permits and in no way diminishes their operating authority. Petitioners argue further that the Board, in entering its order failed to comply with the literal terms of condition (5). They claim that the phrase “ . . . if it finds such action to be in the public interest” requires a formal finding made on an evidentiary record. This, however, does not comport with a common sense reading of the provision especially in light of its essential purposes. Condition (4) made these permits subject to the Board’s affinity regulations. Condition (5) merely allowed the Board, in those cases where it had some reason to believe that its regulations were being violated, to require that proof of compliance be submitted in advance of the particular flight. Since condition (5) contemplates a decision without a hearing, the term “finds” is better interpreted not as the legal term of art encompassing a formal evidentiary hearing, but rather as a broad determination or conclusion that there is a rational basis to believe that violations of the Board’s regulations are in fact occurring. Here the order of the Board indicates that it had made such a determination and proceeded to act in strict compliance with the terms of condition (5). No further finding is required. There is also a lack of substance to the argument that the order is invalid since condition (5) dispenses only with the need of a hearing but says nothing about notice. Clearly notice would serve little purpose where the Board is under no compulsion to consider the arguments and objections of the parties affected. We find that condition (5) in providing for summary Board action without hearing impliedly dispenses with any formal notice requirements. Lastly, BMA alleges discriminatory enforcement in the Board’s implementation of this condition only with respect to certain British air carriers (BMA br. at 50). It must be emphasized, however, that the Board consistently has disclaimed any punitive design in the issuance of this order. As the Board stated in its order dismissing BMA’s petition for reconsideration, the order is designed to aid the carriers in complying with regulations they have admittedly found difficult to enforce on their own and, if the carriers are in fact complying with Board regulations, there is no reason to withhold approval for proposed charters. Moreover, the Board indicated that it was proceeding on an ad hoc basis as efficiently as practicalities would permit. Even had this order been issued in a punitive context, BMA has failed to show the “patent abuse of discretion” necessary to establish a case of discriminatory enforcement. F.T.C. v. Universal-Rundle Corp., 387 U.S. 244, 87 S.Ct. 1622, 18 L.Ed.2d 749 (1967). The Board’s actions are accordingly-affirmed and therefore we need not consider the propriety of the District Court’s denial of the preliminary injunction. Affirmed. . The Board’s order was issued on June 14, 1972, and became effective the next day. BMA’s complaint in the District Court was filed July 6 and on the same day that court issued a temporary restraining order. On July 18 the District Court denied BMA’s motion for preliminary injunction, but on July 20 it granted a 30-day injunction pending appeal. BMA perfected its appeal on August 11 and on the same day moved this court for a further injunction pending disposition of the appeal and on August 18 we granted the requested stay. The petition for statutory review of the Board’s order was filed August 16. . Dan-Air’s permit was issued pursuant to Order 70-10-137 which was approved by the President on October 27, 1970. BMA’s was issued pursuant to Order 70-6-3, approved by the President on May 28, 1970. . 14 C.F.R. 214. . “Charter” is a term denoting a fundamental distinction between group travel and individually ticketed travel by passengers drawn from the general public. It is not defined by the Act and is thus subject to refined definition and regulation by the Board. Trans International Airlines v. C. A. B., 139 U.S.App.D.C. 174, 432 F.2d 607 (1970); American Airlines v. C. A. B., 125 U.S.App.D.C. 6, 365 F.2d 939 (1966); American Airlines v. C. A. B., 121 U.S.App.D.C. 120, 348 F.2d 349 (1965). . To this end, the regulations require that the “charter group” i. e., “that body of individuals who shall actually participate in the charter flight” (14 C.F.R. 214.2 (h)) be derived from the membership (or immediate families of members) of an organization, club or other entity. Persons who have joined the organization “merely to participate in the charters” are not deemed to be bona fide members of the chartering organization (14 C.F.R. 214.30(b)(1)) and persons who have not been members of the organization for six months prior to the charter flights are not bona fide members (14 C.F.R. 214.30(b) (2)). Moreover, the regulations provide that the organization must maintain a central membership list available for inspection by the carrier to insure that the participants in the flight are limited to actual members of the organization and their immediate families and to insure that they have been members for the requisite period of time (14 C.F.R. 214.31). Finally, carriers such as petitioners are forbidden to carry persons solicited “under circumstances in which the services are advertised in mass media, whether or not the advertisement is addressed to members of a specific organization, and regardless of who places or pay for the advertising.” (14 C.F.R. 214.30(a)(1)). . The order was not applicable to “inclusive tour charters” since prior affinity is not required for such charters. It may also be noted that the Board has recently provided for a new kind of charters, “travel group charters,” which, like inclusive tour charters, do not require that the participants have prior affinity. See SPB.-61, September 27, 1972. . Section 1006(a) provides in full: Any order, affirmative or negative, issued by the Board or Administrator under this chapter, except any order in respect of any foreign air carrier subject to the approval of the President as provided in section 801 of this Act, shall be subject to review by the courts of appeals of the United States or the United States Court of Appeals for the District of Columbia upon petition, filed within sixty days after the entry of such order, by any person disclosing a substantial interest in such order. After the expiration of said sixty days a petition may be filed only by leave of court upon a showing of reasonable grounds for failure to file the petition theretofore. (Emphasis added.) . Dan-Air br. at 14; reply br. at 1. . Section 801 (49 U.S.C. § 1461) provides in full: The issuance, denial, transfer, amendment, cancellation, suspension, or revoeation of, and the terms, conditions, and limitations contained in, any certificate authorizing an air carrier to engage in overseas or foreign air transportation, or air transportation between places in the same Territory or possession, or any permit issuable to any foreign air carrier under section 402, shall be subject to the approval of the President. Copies of all applications in respect of such certificates and permits shall be transmitted to the President by the Board before hearing thereon, and all decisions thereon by the Board shall be submitted to the President before publication thereof. . See note 2, supra. . See note 9, supra. . Section 402(f) provides as follows: Any permit issued under the provisions of this section may, after notice and hearing, be altered, modified, amended, suspended, canceled, or revoked by the Board whenever it finds such action to be in the public interest. Any interested person may file with the Board a protest or memorandum in support of or in opposition to the alteration, modification, amendment, suspension, cancelation, or revocation of a permit. . Arguments and objections of the parties may be heard on petition for reconsideration of the Board’s order as BMA in fact did in this case. . Order 72-7-44 denying BMA’s petition for reconsideration expressly adopts the reasoning of Order 72-5-35 dealing with Donaldson International Airways in an identical case. . . . it is apparent that the Board cannot and need not investigate everything at the same time. The Board must necessarily deal with some things first and its power to investigate and deal with emergent matters of greatest seriousness at the outset cannot be defeated because other matters of a similar nature remain for investigation at a later date.” C.A.B. Order 72-5-35 incorporated by reference in Order 72-7-44.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

SOUTHLAND MANUFACTURING CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. No. 71-2059. United States Court of Appeals, District of Columbia Circuit. March 16, 1973. L. Wayne Townsend, Richmond, Va., was on the brief for petitioner. Peter G. Nash, Gen. Counsel, Mar-eel Mallet-Prevost, Asst. Gen. Counsel, Baruch A. Fellner and John M. Flynn, Attys., for the N. L. R. B., were on the brief for respondent. Before FAHY, Senior Circuit Judge, and McGOWAN and LEVENTHAL, Circuit Judges. PER CURIAM: In 1966 the National Labor Relations Board issued its decision that Southland Manufacturing Corporation had violated Sections 8(a)(1), (3), and (5) by wrongfully discharging an employee, refusing to reinstate striking employees, and shutting down its plant. The Board ordered the company to pay back pay and reinstate the discriminatees. That decision was affirmed by this court in United Hatters, Cap & Millinery Workers, International Union v. NLRB, 126 U.S.App.D.C. 149, 375 F.2d 325 (1967). In 1971 the Board issued a Supplemental Decision and Order determining the amount of backpay for which Southland is liable, and this case is before us on a petition to review and set aside that determination. Southland raises four objections to the Board’s Supplemental Decision: The backpay liability was contingent upon resumption of business operations; the Board was guilty of laches in instituting the proceedings; the Board failed to show compensable loss by the discriminatees; and the Board failed to follow its own guidelines for investigating backpay losses. We find none of these warrants reversal. 1. The portion of the Board’s order relevant to Southland’s contingency argument reads as follows: We shall order the Respondent, in the event it resumes its operations, to offer Crimilda Acosta and to those striking employees, who were diseriminatorily discharged or denied reinstatement immediate and full reinstatement to their former or substantially equivalent positions and make all such employees whole for any loss of earnings they may have suffered by reason of the unlawful discrimination against them; backpay to run only to the date in February 1965 when the Respondent shut down its plant, the exact date to be determined at the compliance stage. We shall also require the Respondent to make whole those nonstriking employees who were unlawfully locked out from December 7, 1964 to January 11, 1965. Southland has not resumed its operations, and it contends that the above passage makes its liability for backpay, in respect of periods both before and after its shutdown in February, 1965, contingent upon such resumption. It further notes that this court affirmed the above order, and concludes that the Board cannot now assess backpay without the occurrence of the contingency. Each party asserts that a strict grammatical construction of the order supports its reading of the modifying clause “in the event it resumes its operations.” Neither argument is compelling, although Southland’s reading has some advantage insofar as purely grammatical indications of meaning are thought to be determinative. The modifying clause precedes both dependent clauses. Were it intended to modify only the “reinstatement” clause, proper placement would be within the clause. Nevertheless, this argument is not conclusive. The court’s previous reference to the order sheds little light on the contingency issue: The remedial order, in addition to cease and desist provisions, called affirmatively for reinstatement of certain named employees in the event the company, which at the time of the order had ceased operations, resumed operations, with reimbursement for any loss of earnings suffered as a result of the discrimination against them. . 375 F.2d at 326. We did, however, note with approval the Board’s reservation of the right to modify the backpay provisions as required in the future. Thus we showed no purpose in affirming the order to confine the Board to the terms of this alleged contingency in the supplemental proceedings. It does not seem rational to suppose that either the court or the Board contemplated that Southland could escape liability for backpay in respect of periods prior to its going out of business. 2. Southland’s second argument is that the Board was guilty of laches in instituting the backpay proceeding. The initial order was entered on April 1, 1966, and this court issued an enforcement order on February 23, 1967. The backpay proceedings began January 21, 1971. Petitioner claims prejudice because, in the meanwhile, records were allegedly lost by petitioner, possible witnesses moved away, and the memories of former employees faded. It cites no specific examples of any of these disadvantages. It called no witnesses other than its president; therefore, the claim concerning the faded memories of former employees is questionable. The Board answers that laches may not defeat a suit brought by the Government to enforce a public right. In any event, the Board points out that the delay is largely attributable to the intervening proceedings held to determine whether it was Southland or its alleged successor (Propper International, Inc.) which was to be held accountable for the back pay. Affirmance as to this point can rest comfortably on this last-mentioned circumstance. 3. The problem of the adequacy of the Government’s proof is complicated by the sketchy nature of the hearing. Prior to the hearing the Board had, in accordance with its usual practice, filed a detailed specification of the back pay which it had found to be due each individual employee. This specification lists the employees by name and sets forth other relevant information, including the amounts of interim earnings, if any, which are deducted from the amount owing by Southland. These interim earnings are obtained by the Board from the Social Security records. In its amended answer, Southland stated first that it could not admit or deny the accuracy of the specifications for lack of knowledge as to how the Board formulated them. It did go on to say, however, that its President, Mr. Milstein, “has knowledge of interim earnings and compensation by some of the employees named in the schedules of the specifications which are not reflected in those specifications”; and it went on to say that it expected to be able to produce records as to those alleged interim earnings and compensations at the hearing. It is to be noted that these allegations in the amended answer relate to interim earnings. There is no suggestion whatsoever by the defense of willful loss of earnings, which is the shorthand way of referring to the fact that an employee makes no effort to find other employment. At the hearing Mr. Milstein was the only witness for Southland. He testified about the vacation pay and December wages refered to in Note 1. He also testified that he had talked to some of the employees, and had ascertained from them that they did nothing more about seeking employment than to register with the United States Employment Service. Although the Examiner let this in over the General Counsel’s objection, it obviously was improper testimony since it went to a defense not even hinted at in the amended answer. Mr. Milstein further testified that he had asked these 30-odd employees whether they had been approached by the Board for information in connection with the ascertainment of interim earnings, and that they had indicated they had not been. It is this testimony on which Southland relies in urging that the Board did not follow its own prescribed procedures, This was the sum of Southland’s challenge to the specifications at the hearing, and it was not of such a nature to warrant upsetting the Board’s order in this case. The Board proceeded in a proper fashion, and, by means of the specifications, put Southland clearly on notice of what the Board’s investigation showed to be due to each employee in respect of back pay, taking account of interim earnings known to the Board. If Southland had any reason to challenge any one of these computations, it should have done so with a statement of why it thought it was incorrect; and, in that event, it is entirely possible that the Board might have been under the necessity of producing the employee in question or otherwise sustaining its burden of proof. See NLRB v. Rice Lake Creamery Co., 124 U.S.App.D.C. 355, 365 F.2d 888 (1966); NLRB v. Mastro Plastics Corp., 354 F.2d 170 (2d Cir. 1965). In the circumstances of this record, however, the Board was not required to have every employee present personally at the hearing to testify. 4. On the basis of Milstein’s testimony that a few of the employees had indicated to him that the Board had not approached them directly about interim earnings, Southland alleges that the Board failed to follow its own investigatory procedures in this case. That evidence standing alone is insufficient to require disturbance of the Board’s order. The Petition for Review is Denied. . It is also alleged that many of the employees had received vacation pay, and that some had received wages during the period from December 7 through December 21, 1964, and that, as to these matters, Southland expected to be able to produce probative records at the hearing. The Board found ultimately — and we agree— that, as to these particular claims, South-land did not carry its burden of proof. See footnote 4 of the Board’s Supplemental Decision and Order. . Rice Lake and Mastro Plastics involved the issue of willful loss of earnings, a defense not raised in the pleadings in this ease. Although the reasoning of those decisions may apply to the question of interim earnings as well, we reserve that question for consideration in a case where the defense of interim earnings has been asserted with the requisite specificity.

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2024-08-24T03:29:51.129235

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UNITED STATES of America, Plaintiff-Appellee, v. Jerry Mack MALCOLM, Defendant-Appellant. No. 72-2183. United States Court of Appeals, Ninth Circuit. March 8, 1973. John K. Van de Kamp, Federal Public Defender, Alan L. Issacman, Deputy Federal Public Defender, San Diego, Cal., for defendant-appellant. William D. Keller, U. S. Atty., Stanley I. Greenberg, Earl E. Boyd, Eric A. Nobles, Asst. U. S. Attys., Los Angeles, Cal., for plaintiff-appellee. Before HUFSTEDLER and GOODWIN, Circuit Judges, and SKOPIL, District Judge. Honorable Otto R. Skopil, United States Judge for the District of Oregon, sitting by designation. OPINION HUFSTEDLER, Circuit Judge: Malcolm appeals from his conviction for armed bank robbery. (18 U.S.C. § 2113(a) (d).) The only contested factual issue at trial was his sanity at the time of the offense. Over his objection, the district court admitted the testimony of a psychiatrist who had examined him pursuant to a pretrial order compelling him to submit to an examination to ascertain his sanity at the time of the offense. Malcolm contends that the court erred in admitting the testimony because the pretrial order was invalid on statutory and constitutional grounds and that, even if the order were authorized by 18 U.S.C. § 4244, the testimony exceeded the statutory restrictions imposed by the section upon the use of such testimony. He further argues that the court erred in repeatedly interrupting defense counsel’s examination of witnesses and his closing argument and in instructing the jury, on intent and motive. When Malcolm first appeared in court, the judge observed that something was seriously wrong with him. Malcolm was dazed and almost stuporous. He could not stand up without support. The public defender told the court that he had been unable to communicate with his client. The marshal reported that Malcolm did not seem to know what was going on around him. The district court tried to address Malcolm personally and was unable to elicit any response. Defense counsel asked the court to appoint a psychiatrist under section 4244 to examine his client and to give his opinion on his competence to stand trial. The district court agreed and promptly signed a form order appointing Dr. Abe. Unknown to defense counsel, the form required Malcolm to submit to a dual purpose psychiatric examination to ascertain not only his competence to stand trial but also his sanity at the time of the offense. The district court did not attempt to inform Malcolm of the contents of the order, and, under the circumstances, any effort to have done so would then have been futile. Dr. Abe examined Malcolm nine days later. From the face of Dr. Abe’s report, dated September 30, 1971, the examination consisted primarily of a personal interview with Malcolm. Almost all of the report, which is slightly longer than two letter-sized pages, is a recitation of Malcolm’s life history. It narrates his chaotic youth, his mother’s murder of his stepfather, his education, his medical discharge from the Marine Corps for mental disability, his grand mal epileptic seizures, and his brief arrest record. The remainder of the report follows: “PRESENT ARREST: Defendant states he was arrested for ‘bank robbery.’ He admits holding up with a gun the United California Bank in Pomona. He states further ‘it was an emotional thing.’ By this he means he robbed the bank to get back at a girl friend who works in the bank. ‘Also to go to jail because no where to go.’ Initially, defendant thought he would be shot and killed while robbing the bank. He then found himself walking toward the police station. Someone yelled at him, so he shot at him. He kept walking and also ran at times. Defendant states he will repeat the offense, which he knows is wrong, if placed on the street because T have no place to go.’ He apparently doesn’t mind being in jail. "MENTAL STATUS EVALUATION: Defendant was a cooperative individual, who manifested no odd or bizarre mannerisms. His speech was relevant and coherent. His affect varied appropriately. No delusions, hallucinations or disordered thinking was apparent. Defendant believes he will be going to prison because of the offense which he has committed. Defendant’s mental grasp and capacity indicate about average intelligence. “OPINION: Defendant is presently sane. -Defendant is presently able to understand the proceedings against him, is able to assist in his own defense and does not present mental incompeteney. “Defendant does not have a mental disease or defect causing him to lack substantial capacity either to appreciate the wrongfulness of his conduct or conform his conduct to the requirements of the law.” The competency issue was submitted to the court solely on Dr. Abe’s report. The court found him competent and arraigned him. Malcolm pleaded not guilty. Defense counsel told the court that the defense would be insanity, and he moved for the appointment of an independent psychiatrist to examine Malcolm, pursuant to section 3006A(e)(1) of the Criminal Justice Act (18 U.S.C. § 3006A(e)(1)). The district court denied the motion. The motion was renewed before trial, and the court granted it. The government relied exclusively on lay testimony in presenting its case in chief. Malcolm took the stand and admitted the bank robbery. He described his despondency over a broken love affair and said that his motive in robbing the bank was to get himself killed. The defense psychiatrist gave his opinion which, if credited, would have supported a finding of insanity. On rebuttal, the Government called Dr. Abe. Defense counsel objected to the admission of any testimony by Dr. Abe based on or related to statements Malcolm had made to Dr. Abe during his September 29 examination on the ground that section 4244 forbade its use. The court gave two reasons for overruling the objection: (1) The restrictions in section 4244 do not apply when the only question before the court is sanity of the defendant at the time of the offense, and (2) a waiver of the section 4244 restrictions results when defense counsel has obtained a psychiatric examination of a defendant to ascertain sanity. Dr. Abe testified, in substance, that in his opinion Malcolm was sane when he robbed the bank. He did not quote to the jury any statements that Malcolm made to him, but, as we earlier observed, the foundation for his opinion was Malcolm’s recitation of his whole history, including the bank robbery episode. I. Malcolm argues that the order initially appointing Dr. Abe was invalid to the extent that it compelled Malcolm to submit to an examination to ascertain his sanity at the time of the offense because there is no statutory authorization for the order. The statute upon which the court relied in issuing the order is 18 U.S.C. § 4244 which, in pertinent part, provides: “Whenever after arrest and prior to the imposition of sentence . . the United States Attorney has reasonable cause to believe that a person charged with an offense against the United States may be presently insane or otherwise so mentally incompetent as to be unable to understand the proceedings against him or properly to assist in his own defense, he shall file a motion for a judicial determination of such mental competency of the accused, setting forth the ground for such belief with the trial court in which proceedings are pending. Upon such a motion or upon a similar motion in behalf of the accused, or upon its own motion, the court shall cause the accused, whether or not previously admitted to bail, to be examined as to his mental condition by at least one qualified psychiatrist, who shall report to the court. . . .No statement made by the accused in the course of any examination into his sanity or mental competency provided for by this section, whether the examination shall be with or without the consent of the accused, shall be admitted in evidence against the accused on the issue of guilt in any criminal proceeding. A finding by the judge that the accused is mentally competent to stand trial shall in no way prejudice the accused in a plea of insanity as a defense to the crime charged; such finding shall not be introduced in evidence on that issue nor otherwise be brought to the notice of the jury.” Because nothing on the face of section 4244 or in its legislative history purports to authorize an order to appoint a psychiatrist to examine a defendant to ascertain his sanity at the time of an offense, the great weight of circuit opinion is that section 4244 cannot be expanded to encompass such an examination and that the source of authority to issue an order of that type is the inherent power of the court. (E.g., United States v. Driscoll (2d Cir. 1968), 399 F.2d 135, 137-138, 139; United States v. Albright (4th Cir. 1968), 388 F.2d 719, 722; Featherstone v. Mitchell (5th Cir. 1969), 418 F.2d 582, 584; United States v. Bohle (7th Cir. 1971), 445 F.2d 54; United States v. Maret (8th Cir. 1970), 433 F.2d 1064, 1067.) The Ninth Circuit’s views are not crystalline. In Wade v. United States (9th Cir. 1970), 426 F.2d 64, 74, our court, sitting en banc, recognized that both the source of power to compel a defendant to submit to a psychiatric examination and the mode of its exercise raised serious statutory and constitutional questions. We expressly refused to decide the questions because it was not strictly necessary to reach them in disposing of the case. A panel in United States v. Handy (9th Cir. 1971), 454 F.2d 885, 889, briefly discussed these issues and inconclusively observed that the foundation for the questioned order could be section 4244 or inherent power of the court. A different panel writing United States v. Mattson (9th Cir. 1972) 469 F.2d 1234 assumed, without analysis, that section 4244 authorizes a dual purpose examination. The questions are squarely presented in Malcolm’s ease, and we think they should be squarely answered. Accordingly, we bring the Ninth Circuit into line with the Second, Fourth, Fifth, Seventh, and Eighth Circuits by holding that section 4244 does not authorize an order compelling a defendant to submit to a psychiatric examination to determine his sanity at the time of the offense and that the source of power to order such an examination is the inherent power of the court. Our holding does not automatically invalidate the order questioned in this case or an order in any other case erroneously based on section 4244. Such orders are valid if, under the particular facts and circumstances of the ease, the order did not impermissibly infringe the defendant’s constitutional guaranties and if it did not exceed the bounds of discretion committed to the district court in exercising its inherent powers. The constitutional guaranty of the right not to incriminate oneself is a limitation on the inherent power of the court to compel a defendant to submit to a psychiatric interview to ascertain his sanity at the time of the offense. Unlike an examination to ascertain competence to stand trial, the purpose of an interview to probe sanity at the time of the offense is to obtain information from the accused bearing directly on his guilt. If the defendant has knowingly and voluntarily requested such an examination, the Fifth Amendment presents no problem. (Cf. McCarthy v. United States (1969), 394 U.S. 459, 466, 89 S.Ct. 1166, 22 L.Ed.2d 418.) The Fifth Amendment right looms as soon as the court, on its own motion or the prosecutor’s, orders the defendant to submit to the examination. Courts have regularly surmounted this hurdle when the Government has asked for such an examination after the defendant has raised the insanity defense and has introduced or has indicated that he will introduce, the testimony of his examining psychiatrist directed to the sanity issue. The rationale for the result is not always clear; the recurring themes are estoppel, waiver, and fairness. When a defendant, personally or through his counsel, raises his privilege in opposition to an order compelling him to submit to a sanity examination before he has indicated his intent to rely on insanity as a defense and before he has shown his intent to rely on an examining psychiatrist’s testimony to support it, his objection cannot be defeated by using the estoppel, waiver, or fairness theories. Under such circumstances, he has done nothing upon which to predicate an estoppel or from which to find any waiver. Invocation of a fairness doctrine to overcome a properly invoked Fifth Amendment right, absent any foundation for waiver or estoppel, would erode and could potentially destroy the right. When the court ordered the psychiatric examination to ascertain sanity at the time of the offense, no steps had been taken by Malcolm to invoke the insanity defense. If an objection to the order had been then interposed, the district court would have been obliged to confront the constitutional issue, and, if the objection were overruled, we too would have had to reach the question. However, the constitutional objection was never raised before the district court; accordingly, we decline to reach it. Malcolm urges that the order was invalid to the extent that it went beyond an examination to determine his competency to stand trial because neither he nor his lawyer had notice of the dual nature of the order. There is force in the argument, but our court in United States v. Mattson, supra, 469 F.2d 1234 rejected the Second Circuit’s decision of the point in his favor and accepted the views of the dissenter in United States v. Driscoll, supra, 399 F.2d 135. Unless Mattson is overturned by our court en banc or by contrary Supreme Court authority, Mattson binds this circuit on the issue. We conclude that the validity of the initial order authorizing the psychiatric examination to determine competency, pursuant to section 4244, and to ascertain sanity at the time of the offense, pursuant to inherent court power, cannot be successfully challenged on this appeal on constitutional grounds. II We turn to the questions raised by the admission, over objection, of Dr. Abe’s testimony on the sanity issue. Because Dr. Abe was appointed pursuant to section 4244 to examine Malcolm upon his competency to stand trial, the statutory restrictions upon the use of information obtained from such examinations apply to the reception of Dr. Abe’s testimony, even though the second aspect of the examination was not bounded upon the statute. The first limitation is that “[n]o statement made by the accused in the course of any examination into his sanity or mental competency provided for by this section, whether the examination shall be with or without the consent of the accused, shall be admitted in evidence against the accused on the issue of guilt in any criminal proceeding.” Malcolm contends that permitting a psychiatrist who conducted a section 4244 examination to testify for the Government on the sanity issue violates that restriction because the psychiatrist’s opinion rests primarily on his statements to Dr. Abe and that no effective cross-examination can be conducted without probing what Malcolm had told him. Congress could have resolved the matter by forbidding the examining psychiatrist from testifying at the trial on the merits, but it did not do so. (United States v. Mattson, supra, 469 F.2d 1234.) It chose instead to frame the limitation in terms of statements made by the accused. If the examining psychiatrist does not testify to the statements of the accused, his testimony is not foreclosed by section 4244. Moreover, the section does not prevent defense counsel from bringing out statements of the accused on cross-examination. Since the exclusion is for a defendant’s benefit, he can waive it. Defense counsel may decide to forgo exploration of the statements because he believes that the disclosures would hurt his case, but that election is a matter of trial tactics, not a matter of statutory command. However, we agree with Malcolm that the section 4244 limitation upon the use of an accused’s statements to the examining psychiatrist is not eliminated when the only factual issue in the trial on the merits is defendant’s sanity at the time of the offense. Competence to stand trial does not go to the guilt of an accused, but sanity at the time of the offense is one of the components of guilt when it involves a particular state of mind which is an essential element of the offense charged or when, under the applicable test for mental responsibility, insanity provides exoneration from the crime charged. When a psychiatrist, who conducted a section 4244 examination, testifies for the Government on the sanity issue at trial on the merits, he is testifying “against the accused on the issue of guilt in any criminal proceeding”; accordingly, he cannot testify on direct examination to statements that the accused made to him during the course of his psychiatric examination. We also agree with Malcolm that the section 4244 restrictions do not evaporate when a defendant has requested such an examination or when he has received an independent psychiatric examination on the insanity issue. The statute expressly states that the restrictions apply even though the accused consented to the examination. The receipt of an independent psychiatric examination on the sanity question may provide the foundation for a claim of waiver of his right against self-incrimination, asserted to thwart a Government motion that he submit himself to its expert to examine him on the sanity issue. It has no effect, however, upon the congressional directive in section 4244. A waiver of the exclusionary rule of section 4244 cannot be based solely on the act of an accused in obtaining a psychiatric examination for a very different purpose (sanity at the time of the offense) than that encompassed by section 4244 (competency to stand trial). An appropriate basis for finding a valid waiver is here presented. By the time Dr. Abe testified on rebuttal, Malcolm himself had testified and had introduced the testimony of his examining psychiatrist on the sanity issue. Dr. Abe did not testify to anything that Malcolm told him during the examination. Under these circumstances, the section 4244 exclusionary rule was not infringed and no basis exists for challenging the district court’s ruling as an abuse of the court’s inherent discretionary power. III. Defense counsel was understandably disturbed by the district court’s frequent interruptions of his interrogation of witnesses and of his interruption of his closing argument. The court often intervened in the prosecution’s case as well. The trial court is, of course, more than an umpire. It properly participates in the examining of witnesses for the purpose, among others, of clarifying the evidence, controlling the orderly presentation of the evidence, confining counsel to evidentiary rulings, and preventing undue repetition of testimony. The trial court’s role is especially sensitive in a jury trial. It must be ever mindful to eschew advocacy or the appearance of advocacy. (E.g., Blunt v. United States (1957), 100 U.S.App.D. C. 266, 244 F.2d 355, 363-366.) We have examined the entire record to determine whether, as Malcolm claims, the district court overstepped the bounds of acceptable trial conduct. Although from our vantage point of hindsight we can see that a greater reluctance quickly to intervene at times may have been warranted, we conclude that the conduct of the district court fell short of Malcolm’s appellate mark. We decline to reach the claimed error in instructing the jury. Defense counsel initially acquiesced in the instruction. His protest after the jury was instructed came too late. Rule 30, Fed.R.Crim.Proc., applies. Affirmed. . Exercise of the court’s discretion in favor of granting the motion under the circumstances of this case was well advised. United States v. Schultz (8th Cir. 1970). 431 F.2d 907. . The House Report, echoing the Senate Report, explained that “[t]he bill provides for a uniform procedure for delinquents suffering from mental disorders which exist ... at the time of trial.” (H.R.Rep. No. 1309, 81st Cong., 1st Sess. (1949) ; 2 U.S. Code Cong.Serv. 1928 (1949).) Section 4244 was enacted because “[e]xisting Federal statutes prescribe no procedure whatever for determination of an accused person’s mental competence to stand trial and there are but few judicial questions on the question.” Id. . The view of the District of Columbia Circuit is different, but not necessarily to the contrary. The circuit is firmly committed to the practice of dual purpose pretrial psychiatric examinations when there is anything in the accused’s history that casts doubt either on his competence to stand trial or on his sanity at the time of the offense. But its opinions do not reveal the path of logic from the federal or district statutes to its conclusion. The opinions can be read as finding authority in inherent court power as well as in § 4244 or in its District counterpart. E. g., Mitchell v. United States (1963), 114 U.S.App.D.C. 353, 316 F.2d 354; Edmonds v. United States (1959), 106 U.S.App.D.C. 373, 273 F.2d 108; Winn v. United States (1959), 106 U.S.App.D.C. 133, 270 F.2d 326. . The reasoning is cloudy in United States v. Handy, supra, 454 F.2d at 888-889, the only Ninth Circuit case that considered the problem; the discussion shuttles between a largely unarticulated concept of fairness and an oblique mention of the Schmerber line of cases (Schmerber v. California (1966) 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908). A sampling of circuit views includes: United States v. Baird (2d Cir. 1969), 414 F.2d 700, 707 (estoppel); United States v. Albright, supra, 388 F.2d at 723, 724 (truth and fairness). . “There is a vast difference between that mental state which permits an accused to be tried and that which permits him to be held responsible for a crime. ‘ [E] xaminations, made for the purpose of determining his competency to stand trial . . . require less than examinations designed to determine sanity for the purpose of criminal responsibility.’ It is not to be assumed, therefore, that a psychiatrist who has been ordered to prepare an opinion as to a man’s trial competency will conduct the type of examination which is necessary to provide the trier of the facts with the information essential for a proper determination of criminal responsibility. In addition to the psychological and neurological tests which may be indicated, that determination requires adequate knowledge and a proper expert evaluation of the accused’s personal history and the circumstances surrounding the crime.” Winn v. United States, supra., 270 F.2d at 328 (citations omitted). This segment of Winn was quoted with approval in Driscoll, supra., 399 F.2d at 138, with which observations the dissenter in Driscoll agreed, id. at 140. . We do not reach the question whether the court’s sua sponte exercise of its inherent power to issue a pretrial order compelling a defendant to submit to a psychiatric examination to ascertain sanity at the time of the offense is an abuse of discretion because the point was not raised below, and it is raised only tangentially on appeal. . Other alternatives founder on the impracticability of fragmenting a dual purpose interview or the impropriety of our ignoring manifest congressional intent. . The second limitation of § 4244 is not in issue here: “A finding by the judge that the accused is mentally competent to stand trial shall in no way prejudice the accused in a plea of insanity as a defense to the crime charged; such finding shall not be introduced in evidence on that issue nor otherwise be brought to the notice of the jury.” . Canon 15 of the American Bar Association’s Canons of Judicial Ethics provides that: “A judge may properly intervene in a trial of a case to promote expedition, and prevent unnecessary waste of time, or to clear up some obscurity, but he should bear in mind that his undue interference, impatience, or participation in the examination of witnesses, or a severe attitude on his part toward witnesses, especially those who are excited or terrified by the unusual circumstances of a trial, may tend to prevent the proper presentation of the cause, or the ascertainment of the truth in respect thereto. “Conversation between the judge and counsel in court is often necessary, but the judge should be studious to avoid controversies which are apt to obscure the merits of the dispute between litigants and lead to its unjust disposition. In addressing counsel, litigants, or witnesses, he should avoid a controversial manner or tone. “lie should avoid interruptions of counsel in their arguments except to clarify his mind as to their positions, and he should not be tempted to the unnecessary display of learning or a premature judgment.”

f2d_475/html/0428-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

In the Matter of the Petition of O. L. SCHMIDT BARGE LINES, INC., as owner of the MOTOR VESSEL MARY R, for exoneration from or limitation of liability. Nos. 71-1498 to 71-1500. United States Court of Appeals, Seventh Circuit. Argued Nov. 27, 1972. Decided March 7, 1973. Rehearing Denied April 9, 1973. Paul McCambridge, Philip H. Corboy, Chicago, Ill., for appellant. Joseph V. McGovern, Michael A. Snyder, Chicago, Ill., for appellee. Before KILEY and STEVENS, Circuit Judges, and ESCHBACH, District Judge. District Judge Jesse E. Eschbach of the Northern District of Indiana is sitting by designation. ESCHBACH, District Judge. A petition was brought in the district court by O. L. Schmidt Barge Lines, Inc. (“Schmidt”), as owner of the tugboat M/V MARY R, for exoneration from or limitation of liability for loss, damage and injury arising out of a collision on the Little Calumet River between the barge in tow of the MARY R and a motorboat owned and operated by Joseph Moss. Claims for damages for personal injuries were filed in limitation proceedings by Moss and the other occupants of the motorboat who survived the collision (Dean Steglieh, Peter O’Malley and Lawrence Regan). Claims for wrongful death were filed by the Administrator of the Estate of George O’Donnell, Jr., an occupant of the motorboat who was drowned in the accident, against both Schmidt and Moss. After a trial on the issue of liability before the district court sitting in admiralty, a decree was entered exonerating Schmidt from liability for the casualty. Judgment was also entered granting recovery for the decedent’s estate on the issue of liability on its cross-claim against Joseph Moss. Moss appeals in No. 71-1499 from the judgment of the trial court finding him liable for the collision and, in No. 71-1500, from the decree exonerating Schmidt. The latter appeal originally included claimants Steglieh, O’Malley and Regan, but was later dismissed as to them pursuant to their motion. O’Donnell’s estate appeals only from the decree of exoneration in favor of Schmidt. (No. 71-1498). We affirm. The collision occurred at about 9:00 P.M. on August 19, 1968, immediately west of the Indiana Avenue Bridge over the Little Calumet River at Chicago, Illinois. The MARY R was proceeding down the river in a westerly direction pushing in front of it Barge No. 26, a 254-foot tank barge which was empty at the time. As the MARY R approached the Indiana Avenue Bridge, its speed was slowed to enable passage of the 50-foot wide barge through the south draw of the bridge, a passage having a width of about 62 feet. The towboat maintained a speed of about three miles per hour until the time of the collision. The pilot of the MARY R used a searchlight to illuminate the banks of the river and the pilings protecting the south draw of the bridge. Gerald Toomey, a deckhand who was acting as lookout, stood on the forward end of the barge with his back to the pilot and gave flashlight signals to guide the barge through the opening. As the head of Barge 26 cleared the east pile clusters of the south draw, Toomey turned and walked aft on the barge to take down a warning flag so that it would not hit the underside of the bridge as the barge passed through the draw. As the MARY R was descending the river toward the Indiana Avenue Bridge, the 16-foot outboard motorboat which Moss had purchased only two days earlier was docked at the Seaways Marina gas dock which was located on the north bank of the river approximately 130 feet west of the Indiana Avenue Bridge. Moss and his companions had stopped there shortly after 8:00 P.M. to purchase some beer in a tavern at the marina. Moss had never owned a boat prior to August 17, 1968, and had no significant experience operating a boat. He had taken the new boat out on only one prior occasion, on August 18, the day before the accident, and had been through the Indiana Avenue Bridge on one round trip. The boat contained no life preservers or buoyant apparatus of any kind. Moss and Steglich remained in the boat while O’Malley, Regan and O’Donnell went up to the tavern at Seaways Marina. When the three young men returned some time later, Moss departed from the gas dock and proceeded toward the south draw of the bridge on a course roughly parallel to Indiana Avenue. Prior to the collision, a witness on the north shore near the marina observed the starboard and bow running lights of the barge as it began emerging from the draw of the bridge. The small boat collided with the front of the barge just as the latter was clearing the protective pile cluster at the northwest corner of the bridge draw. The occupants of the motorboat jumped out just prior to contact and all but O’Donnell reached safety. The trial court found that Moss was guilty of a number of violations of the Rules of the Road for Western Rivers, 33 U.S.C. § 301 et seq., and the Pilot Rules for Western Rivers, 33 C.F.R. § 95.01 et seq. The court found that these violations eonstitituted gross fault in the aggregate and were sufficient in themselves to account for the collision. As to the conduct of the MARY R, the court found no violation of Rule 24(b) of the Rules of the Road, 33 U.S.C. § 349(b), which provides that when a vessel is approaching a blind bend and has a tow ahead of her, “[W]hen the head of such tow is within six hundred yards of the bend . . . [she] shall give a signal by three distinct blasts of her whistle.” It was further found that even if Toomey had been positioned in the most favorable possible place to observe approaching craft as the barge emerged from under the bridge, he could not have seen or warned Moss in time to prevent the collision. In an admiralty case, as in the ordinary civil case under Rule 52(a) of the Federal Rules of Civil Procedure, the findings of the trial court may not be set aside unless they are clearly erroneous. Commercial Transport Corp. v. Martin Oil Service, Inc., 374 F.2d 813, 817 (7th Cir. 1967); In re Rapp’s Petition, 255 F.2d 628, 632 (7th Cir. 1958). Although appellants challenge a number of the court’s conclusions of law, the main thrust of their argument on appeal is that the evidence at trial did not support the court’s decision as a factual matter. We find nothing in this record to indicate clear error in the findings of the experienced trial judge who heard the evidence and observed the witnesses in this case. An examination of the record shows that the pilings and center pier of the bridge effectively obstructed the view which a lookout stationed at the head of the barge would have had of the Moss boat until seconds before the collision. The precise amount of time can be estimated at somewhere from one to five seconds on the basis of evidence as to the location at which the collision occurred (five to twenty feet west of the northwest pile cluster) and the testimony of the occupants of the motorboat that they did not see the barge until two to five seconds before the collision. Under these circumstances, the finding that Toomey’s absence from the head of the barge was immaterial and could not have been a contributing cause of the collision is substantially supported by the evidence. Therefore, even if there was a breach of the duty to keep a proper lookout, the fact that a lookout could not have prevented the collision precludes a finding of liability on that basis. Tidewater Associated Oil Co. v. United States, 60 F.Supp. 376 (S.D.Calif.1945); The Bouker No. 2, 254 F. 579 (2d Cir. 1918); The Transfer No. 21, 248 F. 459 (5th Cir. 1918). Appellants contend that a failure to keep a proper lookout is a statutory fault which casts upon Schmidt the burden, under the rule of The Pennsylvania, 19 Wall. 125, 86 U.S. 125, 22 L.Ed. 148 (1874), of showing “not merely that her fault might not have been one of the causes, or that it probably was not, but that it could not have been.” See Ulster Oil Transport Corp. v. The Matton No. 20, 210 F.2d 106 (2d Cir. 1954); Gulf Oil Corp. v. The Socony No. 16, 162 F.2d 869 (2d Cir. 1947). Compare Anthony v. International Paper Company, 289 F.2d 574 (4th Cir. 1961). As indicated above, however, the court specifically found that such a showing had been made by stating that “[e]ven if a lookout were required on the starboard forward corner, he could not have seen or warned Moss in time to prevent the collision.” Appellants attempt to attribute fault to the MARY R for not sounding a danger signal as required by Rule 24(a) of the Rules of the Road for Western Rivers, 33 U.S.C. § 349(a), or otherwise warning Moss prior to the collision. Rule 24(a) provides as follows: If, when steam vessels are approaching each other either vessel for any reason fails to understand, or regards as unsafe, the course or intention of the other, the vessel in doubt shall immediately so signify by giving several short and rapid blasts of her whistle, at least four, the danger signal. We agree with Schmidt that the rule applies only to those situations where a vessel is aware of “the course or intention of the other vessel”. In light of the inability of the MARY R to see the Moss boat until it was too late to avoid the collision, any warning would have been futile and the rule requiring a danger signal is inapplicable. The trial court found that the MARY R did not violate Rule 24(b), 33 U.S.C. § 349(b), which requires a bend signal to be sounded “within 600 yards” of a blind bend in the river. The court interpreted the rule as not prescribing a minimum distance within which such a signal must be sounded and that the practice of the pilot of the MARY R to sound a bend signal as soon as he cleared the Indiana Avenue Bridge was “both reasonable and prudent”. It is unnecessary, however, to decide whether the trial court’s interpretation of the language “within 600 yards” was correct or whether, given that interpretation, the finding of reasonableness was erroneous. The court in its conclusions of law stated as follows: There are many cases where the vessels failed to blow a bend signal at all and were found at fault for colliding with vessels rounding bends, but none of these eases is analogous, because this collision did not happen at a bend, and Moss was never around the bend at any time when the Mary R was within 600 yards of the bend. The law did not contemplate the sounding of a signal for the benefit of Moss, only for the benefit of vessels below the bend. (Emphasis supplied.) We agree that the bend signal rule imposed no duty upon the MARY R with respect to Moss. The question of the applicability of the bend signal rule to the facts of this case is controlled by principles recently stated by the Supreme Court in Union Oil Company of California v. The Tugboat San Jacinto, 409 U.S. 140, 93 S.Ct. 368, 34 L.Ed.2d 365 (1972). In that case, the SS SANTA MARIA and the tugboat SAN JACINTO were approaching on opposite sides of a well-defined and relatively narrow channel. Although the visibility in the direction in which the SANTA MARIA was headed was almost two miles, there was heavy fog to the left. The SAN JACINTO emerged from the fog bank only 900 feet away; executing a U-turn in front of the SANTA MARIA which caused a barge in the tow of the SAN JACINTO to crash into the bow of the SANTA MARIA. The Court of Appeals held that the SANTA MARIA violated Rule 16 of the Inland Rules of Navigation, 33 U.S.C. § 192, “the half-distance rule” which requires a vessel to travel in conditions of fog at a speed which will enable it to come to a standstill before it would collide with a vessel it could see through the fog. The Supreme Court reversed the judgment for half-damages against the SANTA MARIA which the Ninth Circuit had based on such statutory fault. The Court found implicit in the rule the assumption that vessels can reasonably be expected to be traveling on intersecting courses, and went on to state that: “There is no evidence in the record suggesting that the speed of the tanker would have prevented her from coming to a complete halt within half the distance of sighting a vessel that was either proceeding on a remotely foreseeable intersecting course or else being overtaken by her. The tug emerged from a fog bank only 900 feet from the tanker on a course and for reasons that no seaman could, under the circumstances, have anticipated.” 93 S.Ct. at 372. The Court held that “fault based on the half-distance rule must have some relationship to the dangers against which that rule was designed to protect”. Therefore, liability rested on the SAN JACINTO alone. Likewise, in the instant case, fault based upon the bend signal rule must have some relationship to the dangers against which that rule was designed to protect. The rule clearly applies only to situations in which a steam vessel “is nearing a bend in a channel where, from the height of the banks or other cause, a steam vessel approaching from the other direction cannot be seen for a distance of six hundred yards. . . . ” 33 U.S.C. § 349(b). The rule was designed to protect against the danger of collision- between vessels whose vision of each other is obscured by a bend in the channel. There was no bend in the Little Calumet River which obscured the Moss boat from the view of the MARY R. The obstruction was the Indiana Avenue Bridge. Appellants do not contend that the bend signal rule should be interpreted to require such a signal six hundred yards from every obstruction to a full view of the channel ahead. They assert merely that the signal should have been sounded above the Indiana Avenue Bridge for the bend in the river some 400 yards downstream from the bridge. However, we cannot agree that the failure to timely sound such a signal to warn vessels on the other side of the bend results in fault for collisions with vessels hidden from view by a bridge which is fortuitously situated within 60 yards of the bend. If any duty is owed to approaching vessels which may be hidden by a bridge, the requirement of a signal should not be determined by whether there happens to be a bend in the river nearby. Therefore, the district court was correct in holding that the MARY R was not at fault for not sounding a bend signal before passing under the Indiana Avenue Bridge. Under Union Oil, supra, the collision between the Moss boat and the MARY R had no relationship to the dangers against which the bend signal rule was designed to protect. Appellants urge that the MARY R should not he exonerated from liability-on the basis of the rule that “where the active fault of one vessel so flagrantly and heavily outweighs the passive faults of omission of the other vessel, the interests of justice are best served by condemning the more culpable vessel completely”. Cia. Maderas, etc. v. The Queenston Heights, 220 F.2d 120, 123 (5th Cir. 1955), cert. denied, 350 U.S. 824, 76 S.Ct. 52, 100 L.Ed. 736 (1955). Accepting appellants’ contention that such a rule, though well-established, must be carefully applied, we find that the evidence supports the trial court’s finding that the fault of Moss was “glaring” and was sufficient in itself to account for the collision. Discussion of the so-called “major-minor fault rule”, however, is unnecessary because there is ample evidence in the record to support the exoneration of Schmidt even under the strictest standards required by the rule of The Pennsylvania, supra. Since there was no fault on the part of the MARY R for not sounding a bend signal, Schmidt was not required to make a showing that such a fault could not have been a cause of the collision. The only remaining faults urged by appellants arise out of the alleged failure of the MARY R to keep a proper lookout. Although the trial court cited the Cia. Maderas case, supra, Judge Marovitz specifically found, on the basis of substantial evidence, that a properly stationed lookout “could not have seen or warned Moss in time to prevent the collision”. Thus, we need not consider whether the lookout was inadequate, or whether an inadequate lookout would constitute a “major” or “minor” fault. Further inquiry is foreclosed by the finding that no causal connection existed between any such fault and the collision. That finding, not being clearly erroneous, satisfies the strict requirements of The Pennsylvania. The judgments appealed from are affirmed. Affirmed. See also Note, The United States Courts of Appeals: 1971-1972 Term Criminal Law and Procedure, 61 Geo.L.J. 275, 379-81 (1972).

f2d_475/html/0433-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

LOCAL 336, AMERICAN FEDERATION OF MUSICIANS, AFL-CIO, and Diane Martin, Appellants, v. Augustus BONATZ, t/a Aiebon Inn, Appellee. No. 72-1057. United States Court of Appeals, Third Circuit. Argued Feb. 9, 1973. Decided March 9, 1973. Bernard N. Katz, Warren J. Borish, Meranze, Katz, Spear & Bielitsky, Philadelphia, Pa., Philip G. Steel, Steel & Steel, Camden, N. J., for appellants. Jack W. Tapper, Dimon, Haines & Bunting, Mt. Holly, N. J., for appellee. Before McLAUGHLIN, and GIBBONS, Circuit Judges, and WEIS, District Judge. OPINION OF THE COURT GIBBONS, Circuit Judge. This is an appeal by the plaintiffs, Local 336, American Federation of Musicians, AFL-CIO, (the local union) and Diane Martin (the leader) from an order dismissing their complaint in the district court for want of jurisdiction. The defendant Augustus Bonatz t/a Aiebon Inn, (the employer) is the proprietor of a cocktail lounge in Florence, New Jersey where occasionally he provides musical entertainment for his customers. The local union is an unincorporated association functioning as a labor union of musicians, with its principal office in Burlington, New Jersey. The leader is a member of the local union who resides in Willingboro, New Jersey. In the complaint the local union and the leader assert federal jurisdiction solely by virtue of Section 301 of the Labor-Management Relations Act of 1947. 29 U.S.C. § 185. They allege that on December 15, 1967, they and the employer entered into a labor contract, a copy of which is attached to the complaint as Exhibit A, pursuant to which the employer engaged the musical services of the leader and two other undesignated members of the local union for two evenings a week for thirteen weeks beginning January 5, 1968; that the labor contract contained a clause providing for binding arbitration of disputes before the International Executive Board of the American Federation of Musicians; that a dispute arose and was submitted to arbitration by the local union and the leader; and that an award was made by the arbitrators in favor of the local union and the leader, to which award the employer refuses to abide. They seek a judgment enforcing the award, with interest and counsel fees. The employer filed an answer which admits the jurisdictional allegation, admits the execution of “a labor contract . . Exhibit A” and asserts four separate defenses: “FIRST DEFENSE The complaint fails to state a claim against defendant upon which relief can be granted. SECOND DEFENSE Plaintiff breached the contract and thereby waived any rights under the contract which she may have had. THIRD DEFENSE Defendant is riot bound by the arbitration agreement of the American Federation of Musicians in that there was no appearance by defendant. FOURTH DEFENSE The arbitration agreement is void as being against public policy in that there is a clear conflict-of-interest in having the defendant judged by that organization of which the plaintiff is a member.” (footnote added). It is clear that the pleadings do not traverse federal jurisdiction. The plaintiffs moved, pursuant to rule 56, Fed.R.Civ.P., for summary judgment. In support of this motion they established by affidavit the execution of Exhibit A, the existence of a dispute, the submission of that dispute to the designated arbitrators, notice to the employer that the arbitration panel would proceed, the default by the employer after such notice and opportunity to participate, the impartiality of the arbitration panel and the award. No answering affidavits were filed. When the motion for summary judgment came on for argument the district court, sua sponte, raised the issue of the court’s jurisdiction under § 301, After a brief colloquy, the court ruled that Exhibit A was a simple contract between an employer and an employee, that no labor organization was a party to the agreement, and that the federal court lacked jurisdiction to enforce the arbitration award resulting from such a contract. No opportunity was afforded the local union or the leader to establish any further jurisdictional facts. We reverse. The federal district courts have jurisdiction under Section 301 of the Labor-Management Relations Act of 1947 not only to compel contract arbitration of labor contracts but also to enforce arbitration awards made pursuant to such contracts. 9 U.S.C. § 9; General Drivers Local 89 v. Riss & Co., 372 U.S. 517, 83 S.Ct. 789, 9 L.Ed.2d 918 (1963) (per curiam); Philadelphia Marine Trade Association v. Longshoremen’s Local 1291, 365 F.2d 295 (3rd Cir. 1966). Thus, dismissal sua sponte pursuant to rule 12(b), Fed.R.Civ.P., may be sustained here only if no facts which the local union and the leader might prove would bring Exhibit A within the coverage of § 301 as an agreement between a labor organization and an employer. Exhibit A is the standard so-called Form B contract used by locals of the American Federation of Musicians, AFL-CIO, for many years throughout the country for musical engagements of a transitory nature. It covers employment in what the musicians refer to as the club date field, as distinguished from employment by the few regular and long term purchasers of music such as symphonic orchestras, network broadcasters, opera societies and theatres. The appellants contend that had they been given the opportunity, in support of the pleaded jurisdictional allegation they would have been able to establish: (1) The greatest number of musical engagements are in the club date field, and that orchestra leaders, sub-leaders and sidemen perform in that field and elsewhere interchangeably wherever work is available. (2) Musician union members agree not to accept employment except pursuant to a contract in a form issued by the American Federation of Musicians, and that Exhibit A is one such form contract. (3) There is no arrangement in the club date field, which includes thousands of occasional employers of musicians, for prehire contracts (Cf. 29 U.S.C. § 158(f), applicable to the construction industry), but a separate contract is entered into for each engagement. (4) An orchestra leader negotiating with a club date employer for a musical engagement has authority to act on behalf of the local union of which he is a member and on behalf of the sidemen who will participate in the engagement with him in the making of a Form B contract, and the leader in this case was so authorized. The nature of the music industry and the operation of the Form B contract are set forth in considerable detail in American Federation of Musicians v. Carroll, 391 U.S. 99, 88 S.Ct. 1562, 20 L.Ed.2d 460 (1968). That case holds that the Federation’s enforcement of the requirement that its member-leaders use the Form B contract for club dates fell within the protection of the Norris-LaGuardia Act, 29 U.S.C. §§ 101-15, and outside the reach of the Sherman Act, 15 U.S.C. §§ 1-7. Since the exemption in the Norris-LaGuardia Act for allowable union activity probably is broader than the district court jurisdiction conferred in § 301, Carroll is not dispositive of the ultimate issue whether a Form B agreement is covered by that section. But Carroll clearly belies the assumption of the district court that Form B (Exhibit A) is a mere employment contract in which the local union has no interest. If the local union establishes the facts which it has represented (which, the briefs suggest, probably will not be seriously disputed) a § 301 jurisdictional finding seems highly likely. For example, the local union proposes to establish that its leader-member had actual and apparent authority to bind it when she executed a Form B contract with the employer. Her authority to so act is determined, under the Labor-Management Relations Act, by ordinary agency principles. 29 U.S.C. § 185(b), (e). See e. g., Barefoot v. International Brotherhood of Teamsters, 424 F.2d 1001, 1004 (10th Cir.), cert. denied, 400 U.S. 950, 91 S.Ct. 239, 27 L.Ed.2d 257 (1970); Teamsters Local 524 v. Billington, 402 F.2d 510, 513 (9th Cir. 1968). The local union, then, would be a labor organization suing for violation of its contract with the employer. See 29 U.S.C. § 185(a). The local union’s agency position is consistent with the text of Exhibit A. The Exhibit captioned: “CONTRACT BLANK AMERICAN FEDERATION OF MUSICIANS OF THE UNITED STATES AND CANADA (HEREIN CALLED ‘FEDERATION’) BURLINGTON MUSICAL SOCIETY LOCAL NO. 336, A. F. of M. BURLINGTON, NEW JERSEY” The employer makes several direct undertakings with the union. The contract is signed by the leader, but with the local number of the local union inserted immediately following her name. Moreover, the labor organization and the leader urge that the latter signed the Form B contract in a representational capacity on behalf of the sidemen as well as on behalf of the local. A § 301 contract must be between an employer and a labor organization representing employees. Labor organizations are broadly defined elsewhere in the Labor-Management Relations Act: “The term ‘labor organization’ means any organization of any kind, or any agency or employee representation committee or plan . . . which exists for the purpose ... of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.” 29 U.S.C. § 152(5) (emphasis added.) Even accepting the proposition that the leader did not, when signing Form B, have authority to bind the local union to a labor contract with the employer, as appears on its face, she purported to act on behalf of two other union members, the sidemen, with respect to many of the subjects listed in 29 U.S.C. § 152(5). If an issue is actually framed by the pleadings and tried as to the existence of a § 301 contract, in this case the leader may well qualify as an agency, representation committee, or plan, and hence as a labor organization. The jurisdictional issue having been raised at this juncture we cannot say that as a matter of law Exhibit A is a § 301 contract. We hold only that it was error for the district court to decide that issue with this record on a sua sponte rule 12(b)(1) motion. We recognize that the district courts have more latitude as to modes of proof in the disposition of issues of jurisdictional fact. E. g., Tanzymore v. Bethlehem Steel Corp., 457 F.2d 1320 (3d Cir. 1972); Nelson v. Keefer, 451 F.2d 289 (3d Cir. 1971). But we have never departed from the rule that even on such an issue the record must clearly establish that after jurisdiction was challenged the plaintiff had an opportunity to present facts by affidavit or by deposition, or in an evidentiary hearing, in support of his jurisdictional contention. E. g., Groh v. Brooks, 421 F.2d 589, 594 (3d Cir. 1970); Shahmoon Industries, Inc. v. Imperato, 338 F.2d 449 (3d Cir. 1964). The existence of an agreement between a labor organization and an employer is, for § 301 purposes, a jurisdictional fact. For the determination of that fact, no doubt, those more liberal modes of proof apply which the Supreme Court has approved for jurisdictional determinations. Whether the court proceeds by considering affidavits or depositions, or by an evidentiary hearing, however, something must appear of record to contradict the pleaded and uncontroverted jurisdictional allegation that there was a § 301 contract and to support the district court’s determination. The judgment of the district court will be reversed and the case remanded for further proceedings consistent with this opinion. . On appeal the employer claims this defense traversed federal jurisdiction. Obviously it did not, since a dismissal on this ground would be on the merits. Obviously, also, it was not so intended, since the jurisdictional allegations were admitting in the same pleading. . “Representatives of the Federation local in whose jurisdiction the musicians shall perform hereunder shall have access to the place of performance (except to private residences) for the purpose of conferring with the musicians. No performance on the engagement shall be recorded, reproduced or transmitted from the place of performance, in any manner or by any means whatsoever, in the absence of specific written agreement with the Federation relating to and permitting such recording, reproduction or transmission. The Employer represents that there does not exist against him, in favor of any member of the Federation, any claim of any kind arising out of musical services rendered for such Employer. No musician will be required to perform any provisions of this contract or to render any services for said Employer as long as any such claim is unsatisfied or unpaid, in whole or in part. . Rules and Regulations of the Federation and of any local thereof applicable to this engagement (not in conflict with those of the Federation) will be adhered to and the parties acknowledge that they are and each has the obligation to be fully acquainted therewith.” . See Land v. Dollar, 330 U.S. 731, 735, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947); Gibbs v. Buck, 307 U.S. 66, 71-72, 59 S.Ct. 725, 83 L.Ed. 1111 (1939); KVOS, Inc. v. Associated Press, 299 U.S. 269, 57 S.Ct. 197, 81 L.Ed. 183 (1936); MeNutt v. General Motors Acceptance Corp., 298 U.S. 178, 184-190, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Wetmore v. Rymer, 169 U.S. 115, 120, 18 S.Ct. 293, 42 L.Ed. 682 (1898).

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Elaine ROSENTHAL, as executrix of the estate of Martin C. Rosenthal, Deceased, Plaintiff-Appellee, v. Kenneth W. WARREN, and New England Baptist Hospital, Defendants-Appellants. No. 128, Docket 72-1658. United States Court of Appeals, Second Circuit. Argued Oct. 31, 1972. Decided Feb. 13, 1973. Solomon M. Cheser, New York City, for defendant-appellant Warren. Douglas A. Boeckmann, New York City, for defendant-appellant New England Baptist Hospital. Melvin I, Friedman, New York City (Kreindler & Kreindler, Gerald A. Robbie and Alan J. Konigsberg, New York City, of counsel), for plaintiff-appellee. Before LUMBARD, FEINBERG and OAKES, Circuit Judges. OAKES, Circuit Judge: This appeal in a diversity case raises the. question whether New York would apply a Massachusetts damage limitation to the death of a New York domiciliary occurring in Massachusetts. The appeal, taken before final judgment pursuant to 28 U.S.C. § 1.292(b), is from an order of the district court granting partial summary judgment in favor of the plaintiff in an action for wrongful death, 342 F. Supp. 246. The partial summary judgment struck the affirmative defense based upon the Massachusetts wrongful death statute limiting recoverable damages to “ . . . not less than five thousand nor more than fifty thousand dollars, to be assessed with reference to the degree of [the tortfeasor’s] culpability . . . . ” The district court held that New York law was applicable. That law places no fixed value on wrongful death or limitation upon the damages in a wrongful death action. N.Y.Estates, Powers & Trust Law, McKinney’s Consol.Laws, c. 17-b, § 5-4.3; N.Y.Const. art. 1, sec. 16. We affirm. The relevant facts are simple, the legal issue difficult. The decedent, Dr. Martin C. Rosenthal, was a citizen of New York. Decedent and his wife, who as executrix is plaintiff here, went to Boston where he was examined and diagnosed by Dr. Warren, whom the plaintiff describes as a world-renowned physician and surgeon treating patients from all over the world. On March 27, 1969, eight days after an operation performed by Dr. Warren at the New England Baptist Hospital, decedent died in the hospital while under the care of the defendant Warren. Suit, alleging malpractice and asking for $1,250,000 in damages, was brought in New York state court. Jurisdiction of Dr. Warren to the extent of his insurance coverage was obtained by attachment levied on the St. Paul Fire & Marine Insurance Company, a Minnesota corporation doing business in New York, the malpractice insurer of a clinic where Dr. Warren is employed. Jurisdiction of New England Baptist Hospital, of which Dr. Warren is surgeon in chief, a trustee, a member of the planning committee and an officer of the corporation, was obtained by service upon another officer of the hospital while soliciting funds in New York City. Defendants removed the suit to the federal district court on the basis of diversity of citizenship. It is undisputed that although the hospital is a Massachusetts corporation, approximately one-third of its patients in 1969 came from outside Massachusetts and approximately 8 per cent of its patients in the same year were from New York. Indeed, the hospital claimed in its 1969 annual report that it was “not a local or community hospital in the usual sense because its patients come from literally everywhere.” An affidavit of the head of the casualty underwriting department of the Boston office of St. Paul Fire & Marine, which issued the liability policy under which defendant Warren was covered, indicates that a general surgeon’s liability policy in Massachusetts has a basic limit premium of $192, while a New York City surgeon pays a basic limit premium of $1,139, and that one factor contributing to the difference is the “dollar exposure” in New York, which has no wrongful death limitation. Dr. Warren’s policy, however, makes no reference to coverage limitation in wrongful death cases. This being a diversity case, it is, of course, elemental that we must look to the choice of law rules of the forum state, that is, to New York law. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Patch v. Stanley Works, 448 F.2d 483, 487 (2d Cir. 1971). Formerly New York probably would have applied the law of Massachusetts under the simplistic rule of lex loci delicti. Baldwin v. Powell, 294 N.Y. 130, 61 N.E.2d 412 (1945); Whitford v. Panama Railroad Co., 23 N.Y. 465 (1861). But cf. Conklin v. Canadian-Colonial Airways, Inc., 266 N.Y. 244, 194 N.E. 692, Id., 242 App.Div. 625, 271 N.Y.S. 1107 (1935) (New Jersey death limitation inapplicable to a New Jersey plane crash because the validity of a ticket stipulation for limiting the airline’s damages is to be determined by New York law, where the ticket was purchased). In Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34, 172 N.E.2d 526, 211 N.Y.S.2d 133 (1961), however, the New York Court of Appeals characterized the Massachusetts wrongful death limitation as “procedural” and refused to apply it in a suit brought in New York by a New York decedent’s estate arising from the crash of an airplane flight originating in New York but fatally ending at Nantucket, Massachusetts. The court said that “[m]odern conditions make it unjust and anomalous to subject the traveling citizen of this State to the varying laws of other States through and over which they move,” and pointed out that there were only 14 states limiting death case damages as of that time. 9 N.Y.2d at 39, 211 N.Y.S.2d at 135, 172 N.E.2d at 527. The court also characterized wrongful death recovery limitations as “absurb and unjust” and emphasized the strong New York policy against such limitations, at least as to its domieiliaries, enshrined in a constitutional prohibition against them. Said the court, “The absurdity and injustice have become increasingly apparent in the six decades that have followed [the adoption of the New York constitutional prohibition], For our courts to be limited by [the Massachusetts] damage ceiling (at least as to our own domiciliaries) is so completely contrary to our public policy that we should refuse to apply that part of the Massachusetts law . . . . ” 9 N.Y.2d at 40, 211 N.Y.S.2d at 136, 172 N.E.2d at 528. Kilberg foreshadowed New York’s total break with the wooden rule that the law of the place of the tort inevitably governed. The break became complete in the landmark Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E. 2d 279 (1963), where the Court of Appeals chose to apply New York law even though a statute of the place of the tort foreclosed rather than merely limited liability. Babcock refused to apply an Ontario statute barring recovery by an automobile guest in the case of an automobile accident in Ontario in which the driver and passenger were New Yorkers. The opinion laid the foundation for an “interest analysis” approach to choice of law problems, looking to “the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties has the greatest concern with the specific issue raised in the litigation.” 12 N.Y.2d at 481, 240 N.Y.S.2d at 749, 191 N.E.2d at 283. Carefully distinguishing what the court then considered was Ontario’s legislative concern over guest-driver collusion against insurers from its interest in regulating the manner in which a driver operates his car, 12 N.Y.2d at 482-483, 240 N.Y.S.2d 750, 751, 191 N.E.2d at 284, and examining the relative importance of the relationships and contacts of the respective jurisdictions in light of “ ‘the relevant purposes of the tort rules involved,’ ” 12 N.Y.2d at 482, 240 N.Y.S.2d at 750, 191 N.E.2d at 284, the Babcock court concluded that application of the inflexible rule of lex loci delicti could lead to “unjust and anomalous results.” 12 N.Y.2d at 484, 240 N.Y.S.2d at 751, 191 N.E.2d at 285. Analysis of the respective interests underlying the choice of law applicable in tort cases was soon explicitly extended to actions for wrongful death. See Long v. Pan American World Airways, Inc., 16 N.Y.2d 337, 266 N.Y.S.2d 513, 213 N.E.2d 796 (1965) (applying Pennsylvania law to an air crash where decedents were Pennsylvania residents but wreckage landed in Maryland). In Miller v. Miller, 22 N.Y.2d 12, 290 N.Y.S.2d 734, 237 N.E.2d 877 (1968), the New York Court of Appeals faced the question whether to apply a Maine $20,000 limit on wrongful death recovery in the case of a New York resident killed in Maine while a passenger in an automobile driven by a Maine resident. Again the court emphasized the strong New York policy against wrongful death limitations and saw “no substantial countervailing considerations” which would warrant the rejection of New York law, pointing out that the Maine statute did not “regulate conduct” and that “the only justifiable reliance which could be present here would involve the purchase of liability insurance in light of the remedies available to an injured person.” 22 N.Y.2d at 19, 290 N.Y.S.2d at 740, 237 N.E.2d at 881. But the court pointed out that standard automobile liability policies issued in Maine drew no distinction between liability coverage for wrongful death and personal injuries, 22 N.Y.2d at 20, 290 N.Y.S.2d at 740, 237 N.E.2d at 881, so that it could not have been purchased in reliance on the Maine wrongful death limitation. Similarly, in Tooker v. Lopez, 24 N.Y.2d 569, 301 N.Y.S.2d 519, 249 N.E.2d 394 (1969), the New York Court of Appeals refused to apply a Michigan guest statute in the case of an automobile accident which occurred on an intra-Michigan trip taken by two New York coeds at Michigan State, one the driver and the other the decedent passenger. Relying upon Miller v. Miller, supra, the court “rejected unequivocally” “[t]he argument that the choice of law in tort cases should be governed by the fictional expectation of the parties.” 24 N.Y.2d at 577, 301 N.Y.S.2d at 526, 249 N.E.2d at 399. Tooker not merely questioned, it for all practical purposes overruled, Dym v. Gordon, 16 N.Y.2d 120, 125, 262 N.Y.S.2d 463, 467, 209 N.E.2d 792, 794 (1965), insofar as Dym (purporting to rely on Babcock) had held that the law of the state with the “most significant relationship to the parties” was to govern. Tooker rather looked to the law of the state with the “superior interest” in having its policy or law applied. See 24 N.Y.2d at 574, 301 N.Y.S.2d at 523, 194 N.E.2d at 397. Tooker also criticized Macey v. Rozbicki, 18 N.Y.2d 289, 274 N.Y.S.2d 591, 221 N.E.2d 380 (1966), which, relying on other language of Babcock, had seemingly adopted a “contact counting” rather than an “interest analysis” approach to choice of law problems. 24 N.Y.2d at 575, 301 N.Y.S.2d at 524, 194 N.E.2d at 398. The most recent conflict of laws tort case to reach the New York Court of Appeals, Neumeier v. Keuhner, 31 N.Y.2d 121, 335 N.Y.S.2d 64, 286 N.E.2d 454, (1972), did hold the Ontario guest law applicable in a suit by an Ontario decedent’s executrix against a New York driver’s estate arising from an accident in Ontario, the court saying that New York has “no legitimate interest in ignoring the public policy of [the] foreign jurisdiction . . . and in protecting the plaintiff guest domiciled and injured there from legislation obviously addressed, at the very least, to a resident riding in a vehicle traveling within its borders.” 31 N.Y.2d at 125-126, 335 N.Y.S.2d at 68, 286 N.E.2d at 456. In no .way, however, did the court retreat from fthe position it had staked out in Kilberg and Miller, refusing to apply other states’ wrongful death limitations in the case of the death of a New York domiciliary. Seeking to divine New York conflicts law, the federal courts of New York have not always been totally consistent in refusing to apply damage limitations of other states against New York decedents. Two federal cases which did refuse to do so arose out of the same Nantucket crash involved in Kilberg. Pearson v. Northeast Airlines, Inc., 309 F.2d 553 (2d Cir. 1962) (en banc), cert. denied, 372 U.S. 912, 83 S.Ct. 726, 9 L.Ed.2d 720 (1963), held that the Kilberg rule was “a proper exercise of [New York’s] power to develop conflict of laws doctrine” and not contrary to the full faith and credit clause, U.S.Const. art. IV, § 1, or the due process clause. Gore v. Northeast Airlines, Inc., 373 F.2d 717 (2d Cir. 1967), followed the Kilberg holding even though the widow and infant children survivors of a New York decedent moved to Maryland a month after the accident and the decedent’s adult children lived at all times in California. In Ciprari v. Servicos Aereos Cruzeiro, 245 F.Supp. 819 (S.D.N.Y.1965), aff’d per curiam, 359 F.2d 855 (2d Cir. 1966), however, a Brazilian limitation of damages for personal injuries was held to control in the case of a New York domiciliary who bought his ticket in Brazil for an intra-Brazilian trip in a Brazilian airliner. Both the district court, 245 F.Supp. at 824-825, and the court of appeals, which affirmed on the district court’s opinion, see also 359 F.2d at 856 (Waterman, J., concurring), relied heavily on Dym v. Gordon, supra, since questioned and in substance overruled in Tooker v. Lopez, supra, and held Brazil to be the jurisdiction most significantly concerned with the law suit. This review of the relevant case law leaves us with the overwhelming eonclusion that, except for a federal case which relied heavily on a discredited state case, the strong New York public policy against damage limitations has triumphed over the contrary policies of sister states in every case where a New York domiciliary has brought suit. This conclusion is particularly striking in wrongful death actions where the New York policy, embedded in a state constitutional prohibition against damage limitations, has without exception been applied in suits brought for New York decedents since Kilberg. One might well inquire whether it would be anomalous to permit Dr. Rosenthal’s heirs to recover without damage limitation if he died in a plane crash en route to Boston’s Logan International Airport (Kilberg) or in a taxicab from Logan to New England Baptist (Miller) but not once he stepped into the hospital itself. But to do so would substitute “a domiciliary conceptualism that rested on a vested right accruing from the fact of domicile,” Miller v. Miller, supra, 22 N.Y.2d at 29, 290 N.Y.S.2d at 748, 237 N.E.2d at 887 (dissenting opinion), for New York’s sophisticated “interest analysis” approach to choice of law problems. The New York precedents require more. Appellants contend that Massachusetts is the situs of the events leading to this law suit and, in effect, that the intent, either actual or constructive, of the parties was for the Massachusetts limitation on damages to govern in the event of a malpractice claim. This argument fails for many reasons. Quite probably it never occurred to Dr. Rosenthal, Dr. Warren or to the New England Baptist Hospital that a choice of law problem would arise; at least one does not ordinarily think of wrongful death limitations even when undertaking surgery. This is not a case where the conduct of the Massachusetts doctor or hospital vis a vis the decedent was patterned upon the Massachusetts death limitation. It is therefore not unfair to apply New York’s compensatory policy to them. Cf. Babcock v. Jackson, supra, 12 N.Y.2d at 483, 240 N.Y.S.2d at 750-751, 191 N.E.2d at 284. Additionally, it cannot be said that the defendants purchased insurance with the expectation Massachusetts law would govern damage recovery in this case. As in Miller v. Miller, supra, the specific insurance policy here does not distinguish between liability coverage for wrongful death and personal injuries, nor does it distinguish between medical practice on Massachusetts and out of state citizens. Finally, neither the hospital not the doctor named here as defendants operate provincially; the doctor has a world-wide following and the hospital actively solicits funds from outside the Commonwealth of Massachusetts (including New York) and treats patients from “literally everywhere.” It is thus impossible to say with any certainty what the parties’ actual “expectations” as to choice of law were. Even if expectations, real or constructive, could be hypothesized, they would be legally irrelevant. Despite the argument that looking to the expectations of the parties to solve choice of law problems promotes “ ‘an unconscious acceptance of legality and [the] legal order,’ ” Miller v. Miller, supra, 22 N.Y.2d at 28, 290 N.Y.S.2d at 747, 237 N.E.2d at 886 (dissenting opinion), this contractual type of approach to multistate tort problems has been “summarily rejected” by the New York Court of Appeals. Tooker v. Lopez, supra, 24 N.Y.2d at 577, 301 N.Y.S.2d at 526, 249 N.E.2d at 399; Miller v. Miller, supra, 22 N.Y.2d at 20, 290 N.Y.S.2d at 741, 237 N.E.2d at 881; see also D. Cavers, The Choice of Law Process 119, 302 (1965); Traynor, Conflicts of Law in Time, 1967 Duke L.J. 713, 715. It is not without significance in this regard that the “adventitious” element in airline crash cases, mentioned in Kilberg and other New York airline crash cases, was given little or no weight in Miller and Tooker. Looking to the supposed expectations of the parties smacks heavily of the “counting of contacts” approach to conflicts applied in Macey v. Rozbicki, supra, but disavowed in Tooker. Rather, as we view it, the New York courts would balance against the New York interest in protecting its domiciliaries against wrongful death limitations the interests of Massachusetts in limiting damages for wrongful deaths allegedly caused by Massachusetts citizens or occurring in Massachusetts. Consideration of Massachusetts’ interests in this case should, however, be from the perspective that the damage limitation is not confined to wrongful deaths resulting from medical malpractice but applies to all wrongful deaths however caused. Thus, any interest Massachusetts has in keeping medical liability insurance premiums down so as to avoid passing the increased costs on to Massachusetts citizens in the form of higher medical fees is simply one facet of whatever larger interest it may have in limiting in death as distinguished from personal injury cases the size of damage recovery against its citizens generally. See Tiernan v. Westext Transport, Inc., 295 F.Supp. 1256, 1264 (D.R.I.1969). That interest we think the New York courts would say is one not based upon logic, reason or social policy, but is really the vestigial remains of the mistaken view that there was no common law action for wrongful death. We say “mistaken,” for Massachusetts has only recently held precisely that, as of now, “the right to recovery for wrongful death is of common law origin .,” Gaudette v. Webb, Mass., 284 N.E.2d 222, 229 (1972), relying upon the late Mr. Justice Harlan’s landmark opinion in Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S.Ct. 1772, 26 L.Ed.2d 339 (1970) (wrongful death action lies under general maritime law for death caused by violation of maritime duties). In any event, it is our considered view that the New York Court of Appeals would view the Massachusetts limitation, in the words of Justice Hatch (note 3 supra), as so “absurd and unjust” that the New York policy of fully compensating the harm from wrongful death would outweigh any interest Massachusetts has in keeping down in this limited type of situation the size of verdicts (and in some cases insurance premiums). If as Kilberg pointed out, “The absurdity and injustice [of wrongful death recovery limitations] have become increasingly apparent [since 1894] . . . 9 N.Y.2d at 40, 211 N.Y.S.2d at 136, 172 N.E.2d at 528, since Kilberg they have become even more so. Since Kilberg, a number of states have repealed their wrongful death limitations or increased the amounts so that at the present time there are only seven which have an outright limit, although some jurisdictions place a limit on a component of the damages and various states impose a limit in suits against certain governmental bodies. Indeed, Massachusetts itself recently increased its limits. Our examination indicates that Massachusetts is unique, moreover, in both imposing minimum and maximum damage limitations and assessing damages in proportion to the degree of the wrongdoer’s culpability. Thus, the “absurdity and injustice” of death recovery limitations in general is heightened insofar as Massachusetts is concerned, because it relates damages recoverable not to the damages sustained, but to the degree of culpability, however that can be measured, on the part of the defendant. A respected, famous surgeon like Dr. Warren might well be held liable, were the Massachusetts statute applicable, for only $5,000 in damages, regardless of the damages sustained by the decedent’s survivors. Thus the anachronistic concept embodied in the Massachusetts act is hardly one that the New York courts can be expected to embrace in the case of the death of a New York domiciliary with whose wife and children New York is “vitally concerned.” Miller v. Miller, supra, 22 N.Y.2d at 18, 290 N.Y.S.2d at 739, 237 N.E.2d at 880. The New York policy favors “a just recovery” and “principles of fair play,” MacKendriek v. Newport News Shipbuilding & Dry Dock Co., 59 Misc.2d 994, 1011, 302 N.Y.S.2d 124, 140-141 (S.Ct.1969), that is to say, the “just, fair and practical result.” Neumeier v. Kuehner, supra, 31 N.Y.2d at 127, 335 N.Y.S.2d at 69, 286 N.E.2d at 457, which would not be furthered by applying the idiosyncratic Massachusetts law here. Our educated guess as to what the New York courts would do is to follow Kilberg and Miller and the teachings of Long, and apply the New York law of damages. The constitutional argument, skillfully set forth in the dissent, was not raised by the parties below or on this appeal. We believe that in this case, like Pearson v. Northeast Airlines, Inc., 309 F.2d 553 (2d Cir. 1962) (en banc), cert. denied, 372 U.S. 912, 83 S.Ct. 726, 9 L.Ed.2d 720 (1963), New York has a significant interest — its domiciliary is the one who died and his next of kin are New York’s charges — and the “incident” in Massachusetts is not purely “a local one,” id. at 561, since the decedent was from out of state, and the defendant hospital is a national one in terms of its patients, its staff, its reputation and its efforts to obtain out-of-state contributions. In these circumstances, the refusal by New York to apply the Massachusetts death act’s qualitative and quantitative limitations, even as it applies the remainder of the death act, is not so unreasonable as to violate the full faith and credit clause, 309 F.2d at 561; see Currie, The Constitution and the Choice of Law: Governmental Interests and the Judicial Function, 26 U.Chi.L.Rev. 9, 13-15, 75 (1958); 63 Colum.L.Rev. 133, 141-44 (1963). Compare Home Insurance Co. v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926 (1930). The fact that Massachusetts was the situs of the tort and the residence of the defendant would not be sufficient to require as a matter of full faith and credit that the limitations in the Massachusetts law control, in light of the very strong New York policy against wrongful death limitations in connection with its citizens and next of kin and in light of the interstate aspects of the transaction. Pearson established that the Massachusetts death statute could be constitutionally sued upon in New York absent its penal quality and its damage limitations. Given a legitimate forum state interest —as is here present — we see no constitutional difference between death on the Pearson airplane, death in a taxicab on the way from the airport and death on the operating table. We agree with the court below and affirm the judgment. LUMBARD, Circuit Judge (dissenting): The majority has concluded that the New York courts, on the facts of this case, would refuse to apply the Massachusetts wrongful death damage limitation. Accordingly, it has held that the federal district court, sitting in diversity, correctly refused to apply the Massachusetts damage limitation. From this holding I must dissent both because I do not agree that this a proper appraisal of applicable New York law and because I believe that the full faith and credit clause of the United States Constitution bars the New York courts, and federal district courts sitting in diversity, from refusing to apply the Massachusetts limitation on the fajits of this case. In effect, the majority has concluded that, as a matter of policy, the New York courts would decline to apply such a damage limitation when the plaintiff, or the decedent, is a New York resident. Although such a per se rule would be consistent with the dictum of the New York Court of Appeals in Kilberg v. Northeast Airlines, 9 N.Y.2d 34, 211 N.Y.S.2d 133, 172 N.E.2d 526 (1961), it flies in the face of the interest-analysis approach to conflict of laws issues later embraced by that court in Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1966), and subsequent decisions. As this court noted in Gore v. Northeast Airlines, 373 F.2d 717, 723 (1967), these later decisions “have created doubts as to the continued validity of the Kilberg doctrine in New York despite citations approving its vitality in the opinions in these cases.” Indeed, these subsequent eases have sought to cast Kilberg in an interest-analysis light, and have cited the minimal interest that Massachusetts, in that case, had in the application of its law, in light of the mere fortuity that the airplane there happened to crash in Massachusetts, in 'contrast with the more substantial New York interest based on the facts that the journey during which the mishap occurred began in New York, the ticket was purchased in New York, and plaintiff and decedent were both New York residents. The majority purports to decide this case on interest-analysis grounds. However, the sole interest that it has found in New York emanates from the facts of plaintiff’s and decedent’s New York residence. Such an analysis simply proves too much; for it is tantamount to a per se rule that the courts will not apply such foreign damage limitations when the plaintiff is a resident of the forum state. Thus, I believe the majority’s approach amounts to an insupportable abandonment of interest-analysis principles with regard to foreign damage limitations. Appellee has correctly noted that the New York courts have never honored a foreign damage limitation such as that in issue. However, it is also true that the New York courts have never considered a case in which the interests of New York, in relation to those of the foreign state, were as minimal as they are here. The incident at the root of this litigation, the alleged malpractice of Dr. Warren, does not have the inter-state flavor of the Kilberg facts — death caused while in transit from one state to another. Here the decedent made a deliberate choice to undergo the operation in Massachusetts at defendant hospital. Hence, he journeyed into Massachusetts and registered in defendant hospital where he was under the care of defendant, Dr. Warren. The alleged negligence that resulted in decedent’s death, the operation by Dr. Warren, occurred wholly within Massachusetts under the care of Massachusetts residents and in a Massachusetts institution. New York’s only connection with this occurrence was the patient’s permanent residence in New York. I do not see that New York’s interest in this occurrence is enhanced by the fact that this Massachusetts physician and Massachusetts institution have such an eminent reputation that a substantial number of their patients, many from New York, are not Massachusetts residents and choose to come into Massachusetts and undergo treatment there; for there is no evidence that either defendant solicited patients from outside Massachusetts— their popularity is due solely to their reputation and the choice of the individual patients. In my opinion the Massachusetts interests and contacts with the occurrence underlying this litigation should predominate. In addition to its interest in protecting its citizens and institutions from excessive recoveries, an important consideration behind the Massachusetts limitation is its policy of keeping liability premiums as low as possible for its residents. The significant differential that the majority has noted between malpractice insurance premiums in New York and those in Massachusetts is some testimony to the success of this policy. This interest of Massachusetts is fortified by the fact that the insurance policy from which any recovery will be paid was issued in Massachusetts. The fact that the policy has no coverage limitation in wrongful death cases, as noted by the majority, is irrelevant; for the difference in premiums makes it clear that the Massachusetts damage limitation is considered by insurance companies in calculating premiums for liability insurance issued in Massachusetts. Therefore, if we are to take the New York courts at their word that they follow an interest-analysis approach to torts conflict of laws problems, I can see no escape from the conclusion that Massachusetts interests predominate here and that the New York Court would on these facts be impelled to apply the Massachusetts damage limitation. This court, in Ciprari v. Servicos Aereos Cruzeiro, affirming 359 F.2d 855 (1966), 245 F.Supp. 819 (S.D.N.Y., 1965), had occasion to consider whether the New York courts would apply a foreign damage limitation in a case in which the interests of the foreign state were substantial. We held that the damage limitation was applicable. The majority, however, suggests that Ciprari is no longer correct because that case relied on Dym v. Gordon, 16 N.Y.2d 120, 262 N.Y.S.2d 463, 209 N.E.2d 792 (1965), which has since been substantially discredited. See Tooker v. Lopez, 24 N.Y.2d 569, 301 N.Y.S.2d 519, 249 N.E.2d 394 (1969). But a reading of Ciprari reveals that the court there relied on the entire line of cases developing the interest-analysis approach in New York, and that Dym, as then the most recent case in that line, was only one of many cases cited. And, in fact, the interests of the foreign state relative to those of New York were even greater in Ciprari than in Dym. Therefore, in the absence of any criticism of our Ciprari holding by the New York Court of Appeals, I would not abandon our analysis in that case, as the majority appears to do, and would reach the same conclusion we reached in Ciprari —that the New York Court would apply the foreign damage limitation. In any event, even if the majority were correct that the New York courts would refuse to apply the Massachusetts damage limitation against a New York plaintiff, I would hold that such an approach, when applied to a case in which the contacts with Massachusetts are as great as they are here, violates the full faith and credit clause of the United States Constitution. In Pearson v. Northeast Airlines, 309 F.2d 553 (en banc) (1962), cert. den. 372 U.S. 912, 83 S.Ct. 726, 9 L.Ed.2d 720 (1962), this circuit held that “the ruling of the New York Court of Appeals in Kilberg was a proper exercise of the state’s power to develop conflict of laws doctrine.” (p. 556). Thus, there was no breach of the full faith and credit clause when the New York Court ignored the Massachusetts damage limitation on the Kilberg facts. However, the majority in Pearson explicitly recognized that, in a case in which the Massachusetts interests were greater relative to the New York interests, it would be a constitutional violation for the New York courts to refuse to honor the foreign damage limitation. In this regard, Judge Kaufman wrote for the majority: We may concede that the Wrongful Death Statute of Massachusetts, almost certainly designed with an eye toward the regulation of occurrences transpiring wholly within Massachusetts, should be honored fully and completely when the incident under litigation is a local one. Such, we take it, is the import of Home Insurance Co. v. Dick (citation omitted). But we cannot concede that Massachusetts has a constitutionally protected claim to the unqualified application of its statute in cases where there is an overwhelmingly interstate flavor, (p. 561). I cannot see how the alleged malpractice and subsequent death of plaintiff’s decedent can be classified as anything other than a local incident. Therefore, it appears to me that the clear import of this court’s language in Pearson is that, in a case such as that presently before us, the full faith and credit clause would mandate the New York courts to apply the Massachusetts Wrongful Death Statute in its entirety, including the damage limitation. Hence, even if the majority and the district court are correct in their appraisal of New York law, the district court was nevertheless in error in refusing to apply the Massachusetts damage limitation to this case. Accordingly, I would reverse the order of the district court. . Mass.Gen.L. ch. 229, § 2 (1959). . Jurisdiction was obtained under Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966). . See Justice Hatch in Medinger v. Brooklyn Heights R. R., 6 A.D. 42, 46, 39 N.Y.S. 613, 616 (1896), quoted in Kilberg v. Northeast Airlines, Inc., 9 N.Y.2d 34, 40, 211 N.Y.S.2d 133, 136, 172 N.E.2d 526, 528 (1966). New York, it may be noted, was the first state in this country to enact a statute permitting recovery for wrongful death; it did so in 1847, one year before England adopted Lord Campbell’s Act. See Salsedo v. Palmer, 278 F. 92, 94 (2d Cir. 1921). Ironically, Massachusetts has recently become the first state to hold that there was a common law right of recovery for wrongful death and that Lord Ellenborough’s famous dictum to the contrary in Baker v. Bolton, 1 Campb. 493, 170 Eng.Rep. 1033 (1808), was erroneous. Gaudette v. Webb, Mass., 284 N.E.2d 222, 226-229 (1972). . The Babcock “interest analysis” approach has been adopted by other state courts in tort cases. E. g., Beaulieu v. Beaulieu, 265 A.2d 610 (Me.1970); see Note, Beaulieu v. Beaulieu: An Obituary for Lex Loci and an Approach to Interest Analysis, 23 Me.L.Rev. 239 (1971). Babcock was the first and is the leading case in the tort field. See Cavers, Cheatham, Currie, Ehrenzweig, Leflar & Reese, Comments on Babcock v. Jackson, A Recent Development in Conflict of Laws, 63 Colum.L.Rev. 1212 (1963). The New York courts have not followed, or at least have not articulated that they were following, the “Better Rule of Law” approach, first candidly advanced in Clark v. Clark, 107 N.H. 351, 355, 222 A.2d 205, 209 (1966), and used in Tiernan v. Westext Transp., Inc., 295 F.Supp. 1256, 1264 (D.R.I.1969); Conklin v. Horner, 38 Wis. 2d 468, 483-484, 157 N.W.2d 579, 586-587 (1968); and Zelinger v. State Sand & Gravel Co., 38 Wis.2d 98, 110-113. 156 N.W.2d 466, 471-473 (1968). The Neumeier court did not fail to note that if it had been a New York domiciliary who was injured, “New York has a deep interest in protecting Us own residents, injured in a foreign state, against unfair or anachronistic statutes of that state . . . .” 31 N.Y.2d at 125, 335 N.Y.S. 2d at 68, 286 N.E.2d at 456 (emphasis added). In fact, when serving as forum for tort litigation in which it is not the domicile of the decedent or his benefiiciaries, New York has still generally applied the law of the decedent’s domicile on the issue of the extent of liability. See Thomas v. United Airlines, Inc., 24 N.Y.2d 714, 301 N.Y.S.2d 973, 249 N.E.2d 755, cert. denied, 396 U.S. 991, 90 S.Ct. 484, 24 L.Ed. 453 (1969) (Illinois death action limitation held not to apply to New Jersey, Connecticut and Iowa domiciliarios killed in an Illinois plane crash). Cf. Long v. Pan American World Airways, Inc., 16 N.Y.2d 337, 266 N.Y.S.2d 513, 213 N.E.2d 796 (1965) (Pennsylvania wrongful death statute applied on behalf of a Pennsylvania decedent not survived by spouse, parent, child or dependent even though Maryland was situs of fatal plane crash and its law barred recovery). See also Manos v. Trans World Airlines, Inc., 295 F.Supp. 1170, 1173 (N.D.Ill.1969) (“The predominant interests to be served on the issue of damages are those of the states containing the people or estates which will receive the recoverable damages, if any, for their injuries or their decedent’s death”), quoted with approval, Thomas v. United Airlines, Inc., supra, 24 N.Y.2d at 724, 301 N.Y.S.2d at 979, 249 N.E.2d at 759-760. . Ciprari is also factually distinguishable from this case for, as the district court noted: This is not a wrongful death case; the public policy of New York to which the majority in Kilberg referred was a public policy applicable to wrongful death cases. 245 F.Supp. at 824. Furthermore, New York’s interest in assuring adequate compensation to the Oiprari plaintiff was somewhat minimized as he had some recovery for his injuries under New York workmen’s compensation law, 245 F.Supp. at 825. . New York lower courts have similarly refused to apply out of state limitations to limit recovery for the wrongful deaths of New York domiciliarles. See Mac-Kendrick v. Newport News Shipbuilding & Dry Dock Co., 59 Misc.2d 994, 302 N.Y.S.2d 124 (Sup.Ct.1969) (New York domiciliary resident in Virginia three months killed in a Virginia industrial accident). Accord, Palmer v. Hertz Corp., 36 A.D.2d 252, 319 N.Y.S.2d 949 (1971); Tjepkema v. Kenney, 31 A.D.2d 908, 298 N.Y.S.2d 175, appeal denied, 24 N.Y.2d 942, 302 N.Y.S.2d 580, 250 N.E.2d 68 (1969); Tickel v. Oddo, 66 Misc.2d 386, 320 N.Y.S.2d 268 (Sup.Ct.1971). . If this case presented the converse fact situation where the decedent was a Massachusetts domiciliary and defendant doctor and hospital New York based, it is by no means clear a New York court would apply the Massachusetts wrongful death limitation. For, in addition to its interest in providing adequate compensation to those New York domiciliarles who suffer a wrongful demise, the unlimited nature of the possible recovery in New York can be said to deter resident doctors and medical facilities from acts of malpractice. Thus, New York would have an interest in regulating the conduct of the tortfeasors and “it would be almost unthinkable to seek the applicable rule in the law of some other place.” Babcock v. Jackson, 13 N.Y.2d 473, 483, 240 N.Y.S.2d 743, 751, 191 N.E.2d 279, 284 (1962). . See Colo.Rev.Stat. Ch. 41, art. 1 § 3 (1963) ($45,000 limit if decedent left no dependent relative; otherwise unlimited recovery); Kan.Stat.Anno., ch. 60, § 1903 (1970) ($50,000 limit); Mo.Rev.Stat. § 537.090 (1966) ($50,000 limit); N.H. Rev.Stat.Anno., ch. 556, § 13 (1971) ($30,000 unless decedent left a relative in which case the limit is $120,000); Va. Code, § 8-636 (1968) ($25,000 limit if no evidence of pecuniary loss to the survivors; $75,000 limit if there is such evidence plus funeral and medical expenses of deceased); Michie’s West Va. Code, ch. 55, art. 7 § 6 (1965) ($10,000 limit if no evidence of pecuniary loss to the dependent survivors; $110,000 limit if there is such evidence). . E. g., Michie’s Md.Code, art. 93 § 4-401 (n) (1971) ($2,000 limit on recovery for funeral expenses); Wis.Stat. § 895.04 (1971) ($5,000 limit on recovery for loss of consortium). . E. g., S.C.Code of Laws, tit. 33, § 926 (1962) ($5,000 limit for wrongful death action against a county based on defectively maintained roads). . See 7A Mass.Anno.Laws ch. 229, § 2 (Supp.1971) ($5,000 to $100,000 limits depending on tortfeasor’s degree of culpability). . Alabama assesses damages in proportion to the culpability of the tortfeasor but has no limit on maximum recovery. See S. Speiser, Recovery for Wrongful Death 71 (1966). . After all, as Mr. Justice Reed said in American Stevedores, Inc. v. Porello, 330 U.S. 446, 460, 67 S.Ct. 847, 854, 91 L.Ed. 1011 (1947), “Death is the supreme personal injury.” Nevertheless, in Massachusetts, Whatever [the] variances now are or in the past have been, all the [Massachusetts] death statutes have this common, uniform and unaltered characteristic that the amount recoverable is fixed, not on the theory of compensating the surviving relatives of the deceased, but solely on the basis of the quantity of guilt of the defendant under the circumstances of the killing. Porter v. Sorell, 280 Mass. 457, 460, 182 N.E. 837, 838 (1932). . “If a man destroy the eye of another man, they shall destroy his eye.” R. P. Harper, The Code of Hammurabi, King of Babylon § 196 (2d ed. 1904).

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2024-08-24T03:29:51.129683

GRINNELL CORPORATION, Plaintiff-Appellant, v. Mary C. HACKETT, Director of the Department of Employment Security of the State of Rhode Island and John J. Affleck, Director of the Department of Social and Rehabilitation Services of the State of Rhode Island, Defendants-Appellees, The Chamber of Commerce of the United States of America and The Greater Providence Chamber of Commerce, Intervenors, Appellants. Nos. 72-1275, 72-1276. United States Court of Appeals, First Circuit. Heard Nov. 9, 1972. Decided March 15, 1973. George M. Vetter, Jr., Providence, R. 1., with whom William R. Powers III, Providence, R. I., David D. MeKenney, West Barrington, R. I., and Hinckley, Allen, Salisbury & Parsons, Providence, R. 1., were on brief, for Grinnell Corporation. Lawrence M. Cohen, Chicago, 111., with whom Milton Smith, Denver, Colo., O. F. Wenzler, Washington, D. C., Jeffrey S. Goldman, Chicago, 111., Guy J. Wells, Providence, R. I., Gerard C. Smetana, Chicago, 111., Lederer, Fox & Grove, Chicago, 111., and Gunning, LaFazia, Gnys & Seyla, Inc., Providence, R. I., were on brief, for The Chamber of Commerce of The United States of America and The Greater Providence Chamber of Commerce. Warren H. Pyle, Boston, Mass., with whom Angoff, Goldman, Manning, Pyle & Wanger, Boston, Mass., were on brief, for intervenor, United Steelworkers of America, AFL-CIO. W. Slater Allen, Jr., Asst. Atty. Gen., with whom Richard J. Israel, Atty. Gen., was on brief, for defendants-appellees. Before COFFIN, Chief Judge, ALD-RICH and MeENTEE, Circuit Judges. COFFIN, Chief Judge. This case brings before us again the complex question whether state financial aid to striking workers, here unemployment compensation benefits, is preempted by the federal labor statutes and policy. We initially wrestled with that preemption question in a ease involving state and federal welfare benefits made available to strikers. ITT v. Minter, 435 F.2d 989 (1st Cir. 1970), cert. denied, 402 U.S. 933, 91 S.Ct. 1526, 28 L.Ed.2d 868, reh. den., 404 U.S. 874, 92 S.Ct. 27, 30 L.Ed.2d 120 (1971). See Note, Welfare for Strikers: ITT v. Minter, 39 U.Chi.L.Rev. 79 (1971). On March 20, 1972, after unsuccessful negotiations for a new collective bargaining agreement between the plaintiff and Local 4756 of the United Steelworkers of America, all 585 of the plaintiff’s employees went on strike. Some of them applied for and received welfare assistance, both state General Assistance, § 40-6-8 General Laws of Rhode Island (R.I.G.L.) (1971 Pocket Supp.), and federally assisted AFDC-U benefits (aid to families with unemployed fathers), R.I.G.L. § 40-6-7, 42 U.S.C. § 607; and food stamps, 7 U.S.C. §§ 2011-25. As of the week ending May 13, 1972, 404 of the plaintiff’s employees received unemployment compensation benefits, R.I.G.L. § 28-44-1 et seq., under a special provision which permits payments of such benefits, after the general one-week waiting period (§ 28-44-14) and a special additional six-week period, to individuals “unemployed because of a strike”, R.I.G.L. § 28-44-16. On May 15, plaintiff filed the complaint in this case, seeking a preliminary and permanent injunction against the defendants Hackett and Affleck, who are the directors, respectively, of the Departments of Employment Security and Social and Rehabilitation Services of the State of Rhode Island. The defendants moved to dismiss for failure to state a claim upon which relief could be granted and subsequently filed an answer alleging failure to state a claim, lack of conflict between the federal and state statutes, and failure to join an indispensable party, the local union. The United Steelworkers of America, AFL-CIO, and the Chambers of Commerce of the United States and Greater Providence sought and were granted leave to intervene. On May 30 and 31, the district court held a hearing on the motion for preliminary injunction at which the plaintiff presented three witnesses, two of whom, Armand Thieblot and Ronald Cowin, were co-authors of a study entitled “Welfare and Strikes: The Use of Public Funds to Support Strikers”. The book, which was also introduced as an exhibit, was explicitly an attempt to answer some of the empirical questions which we indicated in Minter a court would have to consider in deciding the preemption issue. An affidavit by Herbert Northrup, the supervisor of the project at the University of Pennsylvania School of Finance which led to the book, was also introduced as an exhibit. Defendants presented two brief witnesses, one of whom was the defendant Haekett, and one exhibit, “Handbook of Labor Statistics 1971” published by the United States Department of Labor. In its opinion, issued on June 15, the district court attempted to discern whether under Minter it could consider evidence as to the impact of unemployment benefits on federal labor policy and, if so, whether such evidence could overcome the state interest supporting the unemployment compensation scheme. It initially quoted at length the relevant portions of our opinion in Minter, which had come to us on a denial of a preliminary injunction on the pleadings. We there first noted that in labor preemption eases involving an alleged tangential frustration of national labor policy, rather than a direct overlap of state and federal regulations of labor activities as in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), “a balancing process seems called for ... in which both the degree of conflict and the relative importance of the federal and state interests are assessed.” 435 F.2d at 992. After noting our hesitance at making any a priori judgments regarding either the extent of conflict or the relative strengths of the federal and state interests, we described some of the questions of general scope which a court would have to consider, as to both issues, if a case went beyond the pleadings. We then stated that “This very catalogue of data relevant to a macrocosmic weighing, which a court, if called upon would have to undertake, indicates the preferable forum to be the Congress.” 435 F.2d at 993-994, and noted the strong likelihood that Congress was aware of this problem. We concluded: “In sum, wholly apart from the inadquacy of the evidence before the district court, we have substantial doubt that a significant frustration of federal collective bargaining policy is effected by the granting of welfare benefits to indigent strikers or that, even so, the state interest is so insubstantial compared to the federal interest that Congress must be supposed to have deprived the state of such power to serve that interest.” 435 F.2d at 994. The district court here, after quoting these and other passages, found “no distinctive difference” between the Rhode Island unemployment scheme and the Massachusetts welfare scheme upheld in Minter; ruled that the former’s purpose was “to protect citizens against economic vicissitudes” and was “hardly abandoned” by the six-week waiting period; noted that “[i]t also appears that many of the Grinnell strikers would be receiving welfare were they not receiving unemployment compensation”, that Congress was not unaware of the problem, and that the state interest in “the well-being of its unemployed and ultimately for the health of the local community” was substantial. The court then held that the preemption issue was not justiciable but that in any case “The state’s interest is so substantial that this Court will not conclude that Congress has excluded such state action.” Grinnell Corp. v. Hackett, 344 F.Supp. 749, 753-754 (D.R.I.1972). For these reasons, it denied the preliminary injunction, granted the motion to dismiss and made no findings on the issue of infringement of the federal collective bargaining process. The plaintiff and the two Chambers of Commerce appealed from the subsequent order to that effect. We are unable to affirm the district court on either ground of decision. First, we continue to believe, as we indicated in Minter, that the preemption issue is justiciable, albeit complex. Moreover, for reasons that we will develop more fully later, on the present record we are not able to determine whether the state interest in unemployment compensation is the same, or as substantial, as the state interest in welfare, as the district court seemed to believe, and we have substantial doubts whether that issue need even be reached. At the same time, we have serious doubts whether the existing record is sufficient to meet the plaintiff’s burden of showing the probability of establishing that the Rhode Island unemployment compensation program substantially disturbs the collective bargaining process. Since, however, it is not for us to make findings of fact, we vacate the denial of a preliminary injunction. We also reverse the dismissal of the complaint for failure to state a cause of action, being unable to rule categorically that no evidence could be presented which would support the claim, see Dow Chemical Co. v. Taylor, supra, n. 3 (refusing to dismiss complaint alleging federal preemption of unemployment benefits to strikers). Since a remand is necessary, and further evidence may be presented, we will discuss the issues in the order that we believe a court should generally follow when faced with this question. After considering justiciability, we will examine whether “Congress has unmistakably ordained” that states not exercise power in this area. Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963); Armour & Co. v. Ball, 468 F.2d 76 (6th Cir. 1972). Finding no such clear manifestation, we will then comment on the nature of the infringement issue, the inadequacy of the present record and suggest possible other evidence that might be more relevant and persuasive. Finally we will consider the state interests and the factual inquiries that might be material in that regard. JUSTICIABILITY Justiciability is, of course, as Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962), taught, distinguishable from subject matter jurisdiction, which was here properly not disputed, a civil action wherein the matter in controversy exceeds $10,000 arising under the Constitution and laws of the United States, 28 U.S.C. § 1331, in particular an Act of Congress regulating commerce, 28 U.S.C. § 1337. Justiciability concerns the propriety of judicial decision in light of the posture of the controversy or, as here, the distribution of functions among the coordinate branches of the federal government. Two formulations of nonjustieiability arguably applicable here are “a lack of judicially discoverable and manageable standards for resolving [the case]; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion”, 369 U.S. at 217, 82 S.Ct. at 710. The district court interpreted Minter as saying that “the issue is one for decision by the Congress, not the Courts.” 344 F.Supp. at 754. Although we did indicate there and still believe that the complexity and generality of the issue made Congress “the preferable forum”, 435 F.2d at 994 [emphasis added], we did not say that the questions were therefore beyond the ken of the courts. Indeed, we spoke frequently of what “a court would” or “must” do “if called upon” by appropriate evidence. Id. at 993. Moreover, our sketching of the appropriate analysis, with relevant citations to other preemption cases, suggested that judicially manageable standards have been discovered by the Supreme Court and that courts are competent to determine, solely by the exercise of judicial judgment upon relevant evidence, whether Congress’ initial policy determinations or the nature and effect of the federal and state policies at issue require a finding of preemption. Finally the very fact of our decision on the merits, and the Supreme Court’s many decisions on the merits in labor preemption cases, even of the non-Garmon variety, see e.g., Teamsters Local 20 v. Morton, 377 U.S. 252, 84 S.Ct. 1253, 12 L.Ed.2d 280 (1964), indicate that the issues are justiciable. Although it is possible that a complete evidentiary record, along the lines suggested herein, might ultimately convince us that judicial fact-finding and decision-making are unmanageable or impossible in unusual preemption cases, such as this, see discussion infra, we cannot, on the present record and the present state of our knowledge, say that as to the issues here, unlike all other preemption issues, Congress is not just the preferable, but the only forum. Before leaving justiciability, we feel compelled, in light of the position taken by appellee’s counsel at argument, to reaffirm our holding in Minter that a case such as this is not moot, although the particular strike which prompted the suit and the payment of benefits challenged have, as here, terminated by the time of appeal. We are unable to say that the issue will not recur with regard to this very plaintiff — one strike of the length requisite to raise the issue has now taken place at its plant and nothing in the record suggests the unlikelihood of future repetition. See General Dynamics Corp. v. Local 5, Industrial Union of Marine and Shipbuilding Workers of America, AFL-CIO, 469 F.2d 848 (1st Cir. 1972). Moreover, the intervening Chambers of Commerce, who have filed their own complaint for declaratory and injunctive relief, represent many other employers in Rhode Island, as to at least some of whom the issue is certain to recur. CONGRESSIONAL INTENT If Congress has made clear its intent, either to preempt or not to preempt, no further inquiry is required. Yet, if the intent is not unmistakable, and evidence and legal analysis must be undertaken, Congressional awareness of the problem and its ability to resolve it finally and specifically, may, as we said in Minter, in a closely balanced situation, be sufficient justification for upholding the state action. We find that although the existing legislative record is not sufficiently clear to establish Congressional intent either way, it strongly indicates. Congressional awareness, the availability of opportunities to act, and Congressional action in closely related matters which would prove relevant should the evidence on infringement and state interest be closely balanced. In July 1933, the Federal Emergency Relief Administration (FERA) ruled that it would not “attempt to judge the merits of labor disputes” but would treat unemployed strikers like all other unemployed persons for purposes of relief. Brown, Public Relief 1929-39, 270 (1940). This policy became a bone of contention during the textile strike of September 1934. Bernstein, The Turbulent Years: A History of the American Worker 1933-41, 307 (1971). Congress could hardly have been unaware of this policy when in 1935 it passed in close succession both the National Labor Relations Act, 49 Stat. 449, and the Social Security Act, 49 Stat. 620, Title IX of which, 49 Stat. 639-645, is now the Federal Unemployment Tax Act, 26 U.S.C. §§ 3301-09. Indeed, in detailing the requirements for state laws that would exempt employers from the federal unemployment tax, Congress specifically established three conditions to insure the compatibility of state unemployment compensation laws with the then brand-new labor statute — unemployment compensation could not be denied to an otherwise eligible individual for refusing to accept new work (1) if the position offered was vacant due directly to a labor dispute, (2) if the wages for the offered job were substantially less favorable than those prevailing locally for comparable work or (3) if a condition of the offered employment was membership in a company union or resignation from a bona fide union. § 903(a)(5), 49 Stat. 640, 26 U.S.C. § 3304(a) (5). Certainly, had it thought it necessary to preserve its labor policy, Congress could also have required state laws to bar payment of benefits to strikers. Moreover, pursuant to § 3304(a) the Social Security Board, presumably aware of the Congressional intent, approved, within the next few years, four state laws which allowed payments to strikers. Ch. 468, § 504(2) (b), 1-1935 N.Y.Laws 1033, as amended N.Y.Labor Law § 592(1) (McKinney’s Consol.Laws, c. 31, 1965); 1935-36 R.I.Pub.Laws 848 (1936), as amended R.I.G.L. § 28-44-16; Act No. 1, § 401(e), 2-1937 Pa.Laws 2914 (2d Extra Sess.1936) (repealed 1947), see 43 Pa.Stat.Ann. § 802(d); No. 164, § 4(d), 1938 La.Acts 394 (repealed 1946), see 23 La.Rev.Stat.Ann. § 1601(4). In 1947, the Hartley bill, passed by the House, provided that a striker who accepted unemployment compensation benefits would no longer be considered an “employee” under the National Labor Relations Act, § 2(3), H.R. 3020, 80th Cong., 1st Sess. (1947), and thus would lose all rights under the Act, because, as the committee report indicated, such benefits were “a perversion of the purposes of the social security laws”. H.R.Rep.No.353, 80th Cong., 1st Sess. 12 (1947). In conference, however, the provision was dropped without explanation. Conf.Rep.No.510, 80th Cong., 1st Sess. (1947), 1947 U.S.Cong.Service 1135, 1137-39. Given this silence, the enormous political controversy surrounding the Taft-Hartley Act, and the consequent need for compromises, perhaps unreasoned or hasty, we cannot read this deletion and the subsequent approval of the conference bill as specific congressional resolution of the problem. More recently, in 1969, President Nixon, in a message to Congress, specifically proposed a requirement that states deny unemployment benefits to strikers. Message from President Nixon, Hearings Before the House Committee on Ways and Means on H.R.12625, 91st Cong., 1st Sess., at 12 (1969). The Committee, however, deleted the provision in creating a substitute bill (H.R. 14705), H.R.Rep. No. 612, 91st Cong., 1st Sess. (1969), because, as Chairman Mills explained briefly on the floor of the House in the course of discussing other aspects of the bill: “We have tried to keep from prohibiting the States from doing the things the States believe are in the best interest of their people. . . . For example, there are two States which will pay unemployment benefits when employees are on strike. . . . [I]f the State wants to do it we believe they ought to be given latitude to enable them to write the program they want.” 115 Cong.Rec. 34106 (1969). The House passed the substitute bill without amendment or- further discussion of this deletion, 337 to 8, 115 Cong. Rec. 34110-11(1969). The following year, the Senate considered the House bill which made, of course, no mention of the striker benefits issue. In the course of explaining a provision preventing states from cancelling an individual’s benefit credits because of an act which disqualified him under state law from receipt of benefits for the subsequent period of unemployment, the Senate Finance Committee Report stated: “It would not prevent a State from specifying the conditions for disqualification such as, for refusing suitable work, for voluntary quitting, for unemployment due to a labor jdispute in the worker’s plant, etc. It would not preclude disqualifications which only postpone the receipt of benefits for a specified or flexible number of weeks.” S.Re'p.No.752, 91st Cong.2d Sess. (1970); 1970 U.S. Code Cong. & Admin.News, pp. 3606, 3627. Although during the course of the Senate debate, 116 Cong.Rec. 10573-90 (1970), this provision preventing cancellation of credits was described, id. at 10575, no mention was made of either the state disqualifications for labor disputes or of the striker benefits issue. Neither the Conference Report, Conf. Rep.No.1037, 91st Cong. 2d Sess. (1970), 1970 U.S.Code Cong. & Admin.News, p. 3646, nor the subsequent floor debates —116 Cong.Rec. 25608-17 (House), 27305-23 (Senate) (1970) — made any mention of the issue. We are aware of the importance and power of the House Ways and Means Committee and of the significance of its Chairman’s statements on bills within its jurisdiction. Yet, in the absence of any floor amendment or debate related to that particular change in either house, and of any real consideration of the issue at any level in the Senate, we cannot take the House Committee’s deletion, and Congress’ subsequent approval of the substitute bill, as a clear indication of the intent of the entire Congress not to preempt unemployment payments to strikers. Congress has, on the other hand, shown its ability to act specifically and directly in other, closely related areas. In the Railroad Unemployment Insurance Act, 52 Stat. 1094 (1938), as amended 45 U.S.C. §§ 351-367, Congress explicitly provided that only those engaged in unlawful strikes were disqualified from unemployment benefits. 45 U.S.C. § 354 (a-2) (iii). A recent Administration bill to repeal this provision, S. 560, 92nd Cong., 1st Sess. (1971), did not pass. Similarly, in 1971, Congress amended its original scheme in which the states were allowed to set eligibility standards for the Food Stamp Act, § 5(b), 78 Stat. 703, 704 (1964), and required the Secretary of Agriculture to set “uniform national standards of eligibility.” 7 U.S.C. § 2014(b) (1972 Supp.) Although it specifically required a national standard disqualifying households with able-bodied adults who refuse to register or accept employment, Congress added a proviso: “Refusal to work at a plant or site subject to a strike or a lockout for the duration of such strike or lockout shall not be deemed to be a refusal to accept employment.” 7 U.S.C. § 2014(c) (1972 Supp.). The stated reason for this provision and rejection of a provision disqualifying strikers was Congress’ determination not “to take sides in labor disputes”, H.R.Rep.No. 1402, 91st Cong., 2d Sess. (1970), 1970 U.S.Code Cong. & Admin. News, pp. 6025, 6035, a phrase reminiscent of the FERA policy. Likewise, in the AFDC-U program, Congress, after initially leaving the determination of standards to the state, § 407, 75 Stat. 75, insisted in 1967 that the Secretary of Health, Education and Welfare determine the standard of unemployment, 42 U.S.C. § 607(a), (b)(1)(A). In Davidson v. Francis, 409 U.S. 904, 93 S.Ct. 223, 34 L.Ed.2d 168 (1972), the Supreme Court affirmed the judgment of a three-judge court, 340 F.Supp. 351 (D.Md.1972), which construed literally the language of the subsequent regulation, 45 C.F.R. § 233.100, holding that “any father” included one working less than the requisite hours because of a strike and finding no preemption problem with such aid, citing Minter. Thus, presently federal law also requires payment of AFDC-U benefits to strikers in the 24 states participating in that program. The existence and interpretation of these provisions in analogous programs might be read as indicating a broad Congressional intent not to preempt payments to strikers under public assistance statutes. Yet, given the ability of Congress to articulate that intent in other programs, one might also infer that its silence in the unemployment compensation statute Was indicative of a contrary intent. That, too, however, is not a reasonable inference, given the pre-1935 policy, the 1935 Acts and the rejection of explicitly prohibitory legislation in both 1947 and 1969. The most that can fairly be said, in the face of this legislative record, is that Congress has been and presently is aware of the problem, has had' the opportunity to resolve it, and has acted in closely analogous circumstances. Since unambiguous Congressional intent in lacking, a court must consider the following questions: does the payment of unemployment compensation benefits to strikers “palpably infringe” upon federal labor policy? Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U.S. 761, 766, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945), and is the state interest in cushioning the impact of unemployment stronger than the federal interest in untrammelled collective bargaining? Although a negative answer to the first question or an affirmative answer to the- second would, strictly, dispose of the case, a district court would be well advised to consider both issues, as it considers both patent validity and infringement in a patent case. Naturally, if palpable infringement is found, the strength of the state interest must be explored; and if the state interest is first approached and found not more compelling than the federal interest in free collective bargaining, then the issue of palpable infringement must be inquired into. Should a court, however, find infringement but also that the state and federal interests are closely balanced it could properly decline to find preemption because of the historical and continuing Congressional, awareness, opportunity, and demonstrated willingness to act in this field. INTERFERENCE WITH LABOR POLICY Since the district court has explicitly declined to make any findings on the issue of infringement, and in any event on remand this issue remains open, we think it well to alert court and counsel to critical problems of relevance posed by the study and testimony thus far put into evidence. We note initially the need to define precisely the infringement question relevant to unemployment benefits. The Rhode Island unemployment compensation for strikers statute under attack here, like its sole companion in the state of New York, does not provide strikers with benefits from the start. Rather it imposes, in addition to the general waiting period for all unemployed claimants, § 28-44-14, an additional six-week waiting period for striking claimants, § 28-44-16. It is thus fundamentally different from state welfare programs and the federal food stamp program which provide for payments immediately upon a showing of need. The relevant question then in determining this statute’s impact upon the federal collective bargaining policy is whether the receipt or expectation of receipt of unemployment compensation benefits after seven weeks of a strike causes workers to stiffen bargaining demands beyond those they would have made without such benefits, to strike in the first instance when they would otherwise have settled, or to continue a strike for a longer period than they otherwise would. To date, plaintiff has not addressed this question directly. Rather it has relied on an extensive empirical study of the payment of welfare benefits and food stamps, available from the moment of need, to strikers in thirteen strikes. In only four were any unemployment benefits paid, in each case in New York state. Whatever support this massive body of data would provide for a finding regarding the impact of receipt of welfare and food stamps on strike length, and as we note below that would seem minimal at best, it cannot support any finding regarding the impact of unemployment benefits not received until after seven weeks, in the absence of some effort to differentiate the separate impacts of the different forms of aid. Only a small proportion (17 per cent) of strikers in all strikes studied received welfare aid roughly equivalent to unemployment benefits. Our computations indicate that an even smaller proportion (7 and 13 per cent in the only two strikes for which relevant figures were provided) received unemployment benefits. It would not seem to us tenable to assume, a priori, that such a small percentage of the total strike force would have a determinative impact on a strike-related decision of a majority of workers. Moreover, as the study itself admits, the exceedingly long strikes used in the study, during which strikers in relevant states could qualify for unemployment benefits, are highly atypical. As tables in the defendant’s Handbook establish, the national average duration of work stoppages between 1936 and 1969, when unemployment benefits were available to strikers in Rhode Island and New York, ranged from a low of 5 days (in 1943) to a high of 25.6 days (in 1947). In the period from 1959-69, the percentage of work stoppages nationwide lasting 60 days or more never exceeded 11.7 per cent. Aside from the irrelevance of welfare figures and the small proportion of persons and strikes affected, the present record suffers from a fundamental defect. It provides no support for a causal relationship between the receipt of benefits, which unions obviously desire and often actively seek, and longer, costlier strikes. It may be, as the senior author of the study testified, that “there is no way of really determining whether welfare use makes a strike longer or costlier”. Yet the record lacks even a crude form of what we assume would be the most relevant and probative type of evidence — statistical comparisons of the length and cost of strikes in states granting unemployment benefits (Rhode Island and New York) and the length and cost of strikes of similar size in similar industries in other states not granting such benefits. Such general statistical data would at least provide some hard primary evidence on which to start analysis and base broad opinion surveys or other particularistic empirical approaches. Their weight would depend on the extent to which they considered and controlled for other factors potentially responsible for any disparities —such as the size and nature of the industry, the length and strength of union representation, past labor-management relations and prior strike history, the relative wage and benefit structure under the expiring agreement, and local cost-of-living or other economic or structural peculiarities. The only attempt to provide the missing causal link is the transcription, presumably partial, of six interviews with labor, management and welfare representatives in two particular strikes (out of a total of 60 interviews said to have been conducted). While we find these interviews oversimplistic and conclusory, and the answers accordingly wholly ex-pectable, a more representative and sophisticated sampling of experience and attitudes directed at the effect of the actual or expected receipt of delayed unemployment benefits might be helpful to a court seeking to decide the relevant question of infringement. STATE INTEREST If a court were to find, based on relevant and persuasive evidence, that payment of unemployment benefits significantly frustrated the federal policy of collective bargaining, it would then have to consider whether the unemployment scheme represented a compelling state interest “so deeply rooted in local feeling and responsibility that ... we could not infer that Congress had deprived the States of the power to act.” Garmon, supra, 359 U.S. at 244, 79 S.Ct. at 779. Here the district court found the interest so substantial as to override any frustration of labor policy, however significant. We are not prepared to so hold, on the present record, especially given our doubts that the issue need be reached. First, as we noted in Minter, the state interests in unemployment compensation and welfare do not appear on their face identical. Welfare payments, premised on a finding of need, are directed at alleviating real hardship — serious threats to the physical well-being, indeed in some cases survival, of individuals. Unemployment benefits, in contrast, are conditioned on a certain minimal amount of prior employment and earnings in a specified period, R.I.G.L. § 28-44-11, computed as a percentage of past earnings, within fixed outer limits, § 28-44-6 (additional amounts of $5.00 per week are paid for each dependent child under 18, up to a maximum of four dependents), and limited in duration to a certain percentage of prior weeks worked, again with a fixed maximum (26 weeks), § 28-44-9. The amount of assets on hand or the nature of individual or family need are irrelevant. The state interest would then appear to be, as the statute’s declaration of policy, § 28-42-2, indicates, the avoidance of “economic insecurity”, or put another way, insurance against the temporary disruption of a flow of income. Indeed, as to unemployment compensation for strikers, the state interest would appear somewhat narrower. The provision for such payments, § 28-44-16, by imposing an extra six-week waiting period in addition to the generally applicable one-week period, obviously does not insure an uninterrupted flow of income. Rather it seems aimed at preserving the standard of living and meeting the obligations previously undertaken with the reasonable expectation that the prior flow of income would continue. It is common knowledge (perhaps even judicially noticeable, if that were necessary) that consumer payment obligations in our increasingly credit-dependent society are monthly. See Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969); Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). One month’s bills can usually be met from cash on hand (frequently derived from the last pay-check which is often distributed after the commencement of the strike) or delayed by discussions with understanding and rational creditors. A second flood will, however, often breach the dike. Indeed, although probably not essential to decision, evidence might establish that more than two months’ interruption of income — and hence credit payments— would produce substantial defaults, with consequent foreclosures, repossessions (garnishment, of course, being a worthless remedy when no income exists) and even bankruptcies. The state certainly has an interest, the quantum of which we need not now decide, in avoiding such economic and social dislocations. Nevertheless, although purely statutory analysis suggests differences in the state’s interest in welfare and in unemployment compensation, we are not certain that in practice the interests do in fact diverge. The district court stated, in its discussion under the heading “Conclusions of Law” that “It also appears that many of the Grinnell strikers would be receiving welfare were they not receiving unemployment compensation.” 344 F.Supp. at 753. The record before the court indicated that no persons received both unemployment compensation and AFDC-U, see also 42 U. S.C. § 607(b) (2) (C) (ii) ; 45 C.F.R. § 233.100(c) (1) (v) (b), and that although 69 strikers were initially found eligible for public assistance, only 16 were still receiving such aid as of the date of the hearing because “the remainder were found ineligible because of increased income due to receipt of Unemployment Compensation benefits.” Had there been a finding of fact that a substantial percentage of striking workers in Rhode Island would, if denied unemployment compensation, qualify for public assistance, this would constitute a ground for concluding that in fact the state interest in unemployment compensation is substantially the same as its interest in welfare, the quantum of which we again need not decide now. Finally, whether or not the evidence permitted a conclusion that the state interest served by welfare and unemployment was at bottom the same, a court could consider the secondary economic and social effects of unemployment payments or their absence. In Minter, we suggested at least two possible effects of financial aid — minimization of violence in labor disputes, insofar as caused by the bitterness attendant upon the hardships normally suffered by strikers, and avoidance of economic stagnation in local communities, by which we primarily meant the effect on local businesses of the sudden drop in consumer demand resulting from the abrupt and total termination of income for a substantial part of the community’s families. The book, one author, and the project supervisor all indicate that the study, although showing incidents of violence in strikes where state aid was made available, did not provide any basis for a conclusion either way. The author and supervisor both stated, however, as a matter of common sense, that strikes in which assistance was provided to strikers might produce higher settlements with their generally attendant inflationary effects. The latter also suggested that longer strikes with costlier outcomes could make some employers non-competitive, thus forcing them to close, with the resulting long-term unemployment and local economic stagnation. Again, the complex nature of the issues suggests that empirical evidence and expert economic testimony as to the nature and scope of both the long-term impact on industry pricing and competitiveness and the short-term impact on consumer demand and the relationship between the two could assist courts in evaluating the substantiality of the state interest. We are not unaware of the unusual nature of our insistence on an appropriate and detailed evidentiary basis for deciding the preemption issue, and in particular the issue of infringement of federal policy. We believe, however, that this is the unusual preemption case. For unlike Garmon labor preemption cases or non-labor preemption cases like Florida Lime, one cannot ascertain from the face of the statutes whether they affect the same activity. Similarly, although our statute, like that in UAW v. Russell, 356 U.S. 634, 78 S.Ct. 932, 2 L.Ed.2d 1030 (1958), unambiguously announces the state interest promoted, the practical overlapping of parallel statutes and the complex and uncertain effects of the state action suggest that we cannot simply apply the relevant legal test to the statutes on their face. Our efforts to create an adequate evidentiary record should not, then, be taken in any sense as a departure from, or attempt to distinguish, the governing law of preemption; they are merely attempts to apply that law to a most unusual circumstance. For the reasons already described, we vacate the district court’s denial of the preliminary injunction, reverse its grant of the defendants’ motion to dismiss for failure to state a claim, and remand the case for further proceedings consistent with this opinion. . See also Note, Congressional Preemption in Labor Relations, 6 Suffolk U.L.Rev. 263 (1972); Note, Welfare Assistance to Strikers in Need: The Protestant Ethic Revisited, 67 Nw.U.L.Rev. 245 (1972); Lascaris v. Wyman, 340 N.Y.S.2d, 292 N.E.2d 667 (1972). . No questions regarding the welfare payments or food stamps are before us. . In addition to the briefs of the parties, the court made use, after providing the parties with notice and an opportunity to respond, see Code of Judicial Ethics Canon 3A (4), of the briefs of the student contestants in the Harvard moot court finals competition. Although the case used there, entitled Agar Chemical Corp. v. Taylor, was fictitious, it was patterned roughly after Dow Chemical Co. v. Taylor, 57 F.R.D. 105 (E.D.Mich.1972), and contained many of the issues involved in this case. . The Rhode Island statute contains, of course, these necessary provisions, R.I. G.L. § 28-44-20, as well as the provision for payment to strikers, § 28-44-16. . The Secretary of Health, Education and Welfare is presently in the process of revising the definition. Also, a bill introduced in the last Congress, as an amend-meat to Administration’s Family Assistance Plan, would liave denied strikers such assistance. H.R. 6004, 92nd Cong., 1st Sess. (1971). . N.Y. Labor Law § 592(1) (McKinney 1965). . New York law imposes effectively an eight-week waiting period — a general “four effective days” period, N.Y. Labor Law § 590(9) (McKinney 1965), and a special additional seven-week period for strikers. Id. § 592(1). In Michigan, strikers can apparently claim unemployment compensation benefits after obtaining, and being laid off from, interim employment. See Dow Chemical, supra n. 3. . General Assistance — R.I.G.L. §§ 40-6-5, 8, 22, § 40-5-1 (1971 Pocket Supp.); N.Y. Social Services Law §§ 131, 158 (McKinney 1972-73 Pocket Part), Lasearis, supra n. 1; see also Mass.Gen. Laws Annot. ch. 117, § 1 (1973 Pocket Part). Food Stamps — 7 U.S.O. § 2014 (b); 7 C.F.R. §§ 271.1 (s), 271.3. The study introduced in this case notes the availability of General Assistance from the date of demonstrated need but adds that most states attempt, after the federally mandated 30-day waiting period for AFDC-U, 42 U.S.C. § 607(b)(1)(A), to transfer individuals to that federally assisted program. Such a transfer is advantageous to the individual involved because, among other reasons, it automatically includes his family in the state’s Medicaid program, 42 U.S.C. § 1396a (a) (10). . AVe have phrased these questions in general terms, although we are only dealing directly with the Rhode Island statute, because, as we noted in Minter, preemption decisions are to be made via macro-cosmic rather than particularistic inquiries. Thus evidence as to the New York experience, with the questions rephrased to reflect the longer waiting period, and the Michigan experience, if sufficiently widespread, would be both relevant and significant. In addition, we are fully aware that the impact of subjective expectations is less susceptible to proof. We include reference to expectations not to indicate that adequate proof regarding actual receipts would be insufficient to establish infringement — which would not be correct — but rather to suggest that proof of infringement need not be limited to cases of actual receipt. . Although 60% of the strikers received food stamps, that form of aid is not comparable in value and hence in impact to unemployment benefits, as the stipulations in this case and the tables on national averages in the book’s Appendix indicate. Here the average striker received $44.00 per month in food stamp values while the average unemployment benefit was $77.20 per week. That food stamps are complementary to, rather than competitive with, unemployment benefits is also suggested by the fact that the two benefits may be received at the same time. In contrast, the statutory prohibition against joint receipt of AFDC-U and unemployment benefits, 42 U.S.C. § 607(b) (2) (C) (ii), and the similar amounts provided — in this case AFDC-U benefits were $280 per month — strongly suggest their comparability in value. . Courts generally determine state interests from unchallenged state assertions, e. g., one-year residency requirements decrease the amount of welfare payments, or irrefutable policy concerns, e. g., the state has an interest in preventing voting frauds, rather than from evidence. Although we are not requiring evidence with regard to the state interests, we are not prepared to say that in this unusual kind of preemption case, see discussion infra, evidence might not be properly introduced and considered with regard to the substantiality, if not the very existence, of the state interests. . We do not mean to intimate that we have found specific evidence in the legislative record or elsewhere that Rhode Island legislators had precisely these consumer problems in mind when, in 1936, they imposed this seven-week waiting period. Nor do we mean to exclude the possibility that the legislators specifically intended to force management to capitulate after seven weeks by aiding strikers. Bad motivation, however, will not vitiate otherwise sound legislation. Palmer v. Thompson, 403 U.S. 217, 91 S.Ct. 1940, 29 L.Ed.2d 438 (1971). Moreover, since the state interest in such legislation may change over time, McGowan v. Maryland, 366 U.S. 420, 81 S.Ct. 1101, 6 L.Ed.2d 393 (1961), and since the object of this inquiry is the present effect on both federal labor policy and a state’s interests, a court is obliged to consider possible present, as well as historical, rationales. . We are, however, aware of and impressed with the suggestions of Professor Cox for expanding the currently existing rule for non Garmon labor preemption cases, which he suggests was enunciated in Morton, supra, into a single rule for all labor preemption cases. Cox, Labor Law Preemption Revisited, 85 Harv.L.Rev. 1337 (1972). We are, of course, not in a position to adopt or reject such a test, In any case, although he does not discuss the kind of preemption case we are here faced with, we believe that his formulation is similar to our own statement of the existing- rule for non-G-armon preemption cases and that it would, in our unusual case, probably still require the kind of evidence we have called for.

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AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE et al., Plaintiffs-Appellees, v. Newell J. PAIRE, as Commissioner of Education of the State of New Hampshire, et al., Defendants-Appellants. No. 72-1353. United States Court of Appeals, First Circuit. Argued Jan. 5, 1973. Decided March 16, 1973. Howard B. Myers, Asst. Atty. Gen., with whom Warren B. Rudman, Atty. Gen., was on brief, for appellants. Walter C. Wright, with» whom Kenneth E. Scott, Washington, D.C., was on brief, for appellees. Before ALDRICH, McENTEE and CAMPBELL, Circuit Judges. CAMPBELL, Circuit Judge. This is an appeal from a district court decision, 348 F.Supp. 506, that a lease and so-called dual enrollment agreement between the Holy Infant Jesus School of the Roman Catholic Bishop of Manchester (“Holy Infant”) and the Nashua School District No. 42 (the “Nashua School District”) violate the Establishment Clause of the First Amendment. Because we conclude that a single district judge was without jurisdiction to decide the matter, we do not reach the merits but remand for further proceedings. The plaintiffs-appellees (hereinafter “plaintiffs”) are a non-profit corporation chartered in the District of Columbia (with many of its members residing in New Hampshire), and twelve individuals who are New Hampshire citizens, residents and taxpayers. Seven of the latter are Nashua residents; five reside in other New Hampshire cities and towns. All allege that they regularly pay “local and state taxes, which in turn support public school districts throughout the state.” They purport to sue not only individually but as class representatives for all citizens, residents and taxpayers similarly situated who are interested in or affected by the subject matter. The defendants-appellants (hereinafter “defendants”) are the New Hampshire Commissioner of Education, the State Treasurer, and the Chairman of the Board of Education of Nashua School District No. 42. All three defendants are represented by an assistant attorney general of the State of New Hampshire. The Roman Catholic Bishop of Manchester, New Hampshire, was permitted to intervene. The complaint, a stipulation, and the district court’s opinion show a full-scale assault, on constitutional grounds, upon a form of school aid extended by the State of New Hampshire pursuant to statutory enactments and regulations of its Department of Education. Specifically challenged are a lease and written agreement relating to the 1971-72 school year under which the Nashua School District rents from Holy Infant five contiguous classrooms and an office on the second floor of the building of the Holy Infant Jesus School. Therein, through teachers in its exclusive employ, the Nashua School District conducts classes in secular subjects for the benefit of students enrolled at the Holy Infant. Funds for rental of the rooms and for the cost of teachers’ salaries, textbooks, and other costs are provided by the state. The plaintiffs in substance allege, and it was stipulated, that the contractual relations between Holy Infant and the Nashua School District are “typical of contracts entered into between other church schools and other school districts in the State of New Hampshire.” The Nashua lease and contract are drawn in strict and obvious compliance with detailed regulations promulgated by the New Hampshire State Department of Education (“Guidelines for Applying for Dual Enrollment and Child Benefit Services Grants.” 6/12/70; “Added Guidelines,” 1/26/71; “Additional Guidelines,” 5/10/71; and “Dual Enrollment Program Instructions, 1971-72,” 8/13/71). These latter were, in turn, promulgated under authority of two New Hampshire statutes. The Nashua School District has applied to the New Hampshire Department of Education, on forms prepared by the state, for a Dual Enrollment grant to cover the costs made reimbursable under the statute and implementing regulations. It is both apparent and undisputed that the Nashua agreement and lease were prepared to take advantage of the statewide grant program, the latter having been established and funded by the legislature and implemented by regulations of general application put out by the state Board of Education. Thus the question of the constitutionality of the Nashua agreement and lease cannot be separated from the question of the constitutionality of New Hampshire’s statutory and regulatory scheme. If the former are unconstitutional, so are the latter, at least as applied to church schools. Given these facts, and the further fact that the plaintiffs pray for broad, permanent injunctive relief against the two state defendants which would prevent them from any further expenditure of funds under dual enrollment agreements and from further performance either under the Nashua agreement or similar agreements, we are faced with a jurisdictional problem under 28 U.S.C. § 2281, providing: “An interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such State in the enforcement or execution of such statute or of an order made by an administrative board or commission acting under State statutes, shall not be granted by any district court or judge thereof upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges. . . .” The district court recognized the problem, stating in an opinion footnote, “Neither party requested the convening of a three-judge court. At the preliminary pretrial conference, the plaintiffs waived their request for a temporary restraining order.” However, the three-judge requirement is jurisdictional; jurisdiction of a ease otherwise within § 2281 may not be conferred upon a single judge by consent or waiver. Stratton v. St. Louis S. W. Ry., 282 U.S. 10, 18, 51 S.Ct. 8, 75 L.Ed. 135 (1930); United States v. Griffin, 303 U.S. 226, 229, 58 S.Ct. 601, 82 L.Ed. 764 (1938); United Low Income, Inc. v. Fisher, MD., 470 F.2d 1074 (1st Cir. 1972); Borden Company v. Liddy, 309 F.2d 871, 876 (8th Cir. 1962). See Goosby v. Osser, 409 U.S. 512, 522, footnote 8, 93 S.Ct. 854, 861, 35 L.Ed.2d 36 (1973). A better argument against three-judge jurisdiction might exist were it true that plaintiffs had entirely withdrawn all claim for injunctive relief, leaving only a request for declaratory judgment. Kennedy v. Mendoza-Martinez, 372 U.S. 144, 153, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963); Flemming v. Nestor, 363 U.S. 603, 607,'80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960). At least if the relief sought, by whatever name denominated, merely called into question the constitutionality of a state statute or regulation but “did not seek affirmatively to interdict the operation of a statutory scheme” (Flemming v. Nestor, supra at 607, 80 S.Ct. at 1371), our analysis would be different. Here, however, we are faced precisely with an attempt to interdict a statewide statutory scheme. While the plaintiffs waived their request for preliminary injunctive relief, they have not waived their request for permanent injunctive relief against both the Nashua program and other similar ones. In its opinion, the district court said: “Although the plaintiffs originally asked for a preliminary injunction, they agree that if this opinion were not issued prior to the start of the school year, they would not seek an immediate injunction but would wait for the case to run its appellate course. No injunction will issue, therefore, pending appeal. If no appeal is taken, the Clerk is directed to schedule an early conference of counsel so that the judgment of this court can be put into effect without jeopardizing unduly the education of the children already involved in the dual enrollment agreement for the current school year.” [Emphasis supplied.] In due course, we may assume that the district court, if its decision were to be affirmed, would issue an injunction, at least in the absence of a suitable stipulation of voluntary compliance. We see no way to avoid the conclusion that the object of the lawsuit remains the effective disruption of the enforcement by a state of its statutes and of regulations promulgated thereunder. See Spencer v. Kugler, 454 F.2d 839, 844 (3rd Cir. 1972). In Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), three-judge jurisdiction was sustained in a case involving attack upon federal funding of instruction and educational materials for use in religious and sectarian schools. The argument against three-judge jurisdiction was that appellants wished to forbid only specific local programs in New York City religious schools, not to enjoin the operation of the broad range of programs available under the federal statutory scheme. The Court held, however, that allegations in the complaint making specific reference to New York City schools were to impart “specificity and focus to the issues in the lawsuit”, not to limit the impact of the constitutional challenge. Id. at 89, 88 S.Ct. at 1947. “The injunctive relief sought by appellants is not limited to programs in operation in New York City but extends to any program that would have the unconstitutional features alleged in the complaint. Congress enacted § 2282 [the federal counterpart of § 2281] ‘to prevent a single federal judge from being able to paralyze totally the operation of an entire regulatory scheme ... by issuance of a broad injunctive order’. . . . If the District Court in this case were to rule for appellants on the merits of their constitutional attack on New York City’s federally funded programs, that decision would cast sufficient doubt on similar programs elsewhere as to cause confusion approaching paralysis to surround the challenged statute. Therefore, even if the injunction which might issue in this case were narrower than that sought by appellants, we are satisfied that the legislative policy underlying § 2282 was served. . . .” Id. at 89-90, 88 S.Ct. at 1947. The district court states, it is true, that the plaintiffs do not challenge the constitutionality of the New Hampshire statutes but “have concentrated their attack on the lease and dual enrollment agreement.” (A similar distinction could have been drawn between Titles I and II of the Elementary and Secondary Education Act of 1965 considered in Flast, supra, and the limited program there attacked.) The New Hampshire statutes must be read, however, with the regulations of the Department of Education and the Nashua lease and agreement (which are stipulated to be typical of contracts entered into by other church schools and school districts and which are plainly drawn in compliance with the statutes and regulations). So read, they delineate a specific state policy; it is against the enforcement of that policy, not merely against a locally-drawn contract, that the plaintiffs seek to interpose the Constitution. See Phillips v. United States, 312 U.S. 246, 251, 61 S.Ct. 480, 85 L.Ed. 800 (1941). We would be fooling no one, not even ourselves, were we to pretend otherwise. The possibility of so attempting is furthermore removed by the breadth of the plaintiffs’ allegations and prayers, by the stipulation, and by the obvious fact, appearing from every page of the lease and dual-enrollment agreement, that what is sought to be prevented is a major state program, authorized and funded by the legislature, and executed by state officers, two of whom are defendants. We conclude that the district court, consisting of a single judge, was without jurisdiction to hear and resolve the issue before it. Since it was without jurisdiction, we are without jurisdiction to resolve the substantive issues on appeal.. The judgment of the district court is vacated, and the ease remanded for reference to a district court of three judges. So ordered. . Holy Infant JeSus School is a Roman Catholic parochial elementary school. Its students attending the classes conducted by the Nashua School District also spend part of the day attending classes in other subjects given by the nine nuns who make up Holy Infant’s own faculty. The courses given by the Nashua School District at Holy Infant are Language Arts, Science, Math, Music and Physical Education. All students enrolled in the program attend Holy Infant. . The Nashua dual enrollment agreement and lease both recite that they are authorized by NI-I RSA 193 :l-2 (supp). . NH RSA 193:1-a (supp) Dual Enrollment. Notwithstanding any other provision of the law, the full-time attendance requirement may be met by attendance at more than one school provided the total time spent in the schools is equivalent to full-time attendance and further that the attendance .at more than one school may include attendance at a nonpublic school provided that the school district and the state board of education have given prior approval to the detailed dual enrollment agreement, which is to be effectuated for this purpose. NH RSA 198:21 (supp) Grants. I. Any school district which has in operation an approved dual enrollment agreement under the provisions of RSA 193:l-a shall be granted for the first school year that such agreement is in operation the full operational costs of implementing such agreement, exclusive of any part of the cost and carrying charges of any capital improvements; and for the next succeeding school year, if such operation is then continued, one half of such costs. II. Application for any such grant shall be submitted by a district to the state board of education no later than the July first preceding the start of the school year for which it shall be applicable, provided that the board may, for good cause shown, accept any such application up to but not later than the start of the applicable school year. III. The board shall determine what costs shall be allowed in computing the amount of any grant, and shall make payments of such grants from the funds appropriated therefor. IV. In the event that for any year insufficient sums are available to pay grants in full as provided by this section to all qualified applying school districts the state board of education shall prorate such grants so that all such districts receive the same proportion. V. No pupil counted by any school district for the purpose of calculating the amount of a grant to be paid pursuant to this section shall for the same school year by the same district be included in average daily membership for the purposes of foundation aid or counted for the purposes of grants pursuant to USA 198:22. . The district court stated: “Although the stipulation does not expressly so state, Roman Catholic schools are the only churcli schools in the state to enter into such agreements with the school districts.” The court further stated that the “dual enrollment statute, the guidelines promulgated pursuant to it . . are the direct result of the current financial crisis in Roman Catholic grammar and high school education . . .” . While we accept the district court’s statement that no request was made, we note that the plaintiffs refer in their complaint to § 2281 as being one of the statutes under which jurisdiction is claimed. 6. The commendable restraint of the district court, in the present case, in withholding relief until after appeal, while removing the paralysis-by-one-judge worry, does not cure the jurisdictional problem. Moreover, § 2281, of course, affords not only a three-judge district court but a direct appeal therefrom to the Supreme Court. . For purposes of § 2281, the regulations of the Department of Education are the “delegated legislation of an ‘administrative board or commission’.” See Phillips v. United States, supra at 251, 61 S.Ct. 480.

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Ana Lillian TORRES, Representing Luis A. Dávila, Plaintiff, Appellant, v. SECRETARY OF HEALTH, EDUCATION, AND WELFARE, Defendant, Appellee. No. 72-1073. United States Court of Appeals, First Circuit. Heard Feb. 5, 1973. Decided March 23, 1973. Luis F. Abreu Elias, Rio Piedras, P. R., for appellant. James C. Hair, Jr., Atty., Dept, of Justice, with whom Harlington Wood, Jr., Asst. Atty. Gen., Julio Morales-Sanchez, U. S. Atty., Kathryn H. Baldwin, and Jean A. Staudt, Attys., Dept, of Justice, were on brief, for appellee. Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges. CAMPBELL, Circuit Judge. Appellant’s husband (hereinafter “claimant”) was recently found by the appellee to be entitled to disability insurance benefits under Section 223 of the Social Security Act, 42 U.S.C. § 423 (the “Act”). She now seeks, on his behalf, to recover benefits retroactively under a previous claim of his which had been denied. The Secretary has ruled, under his regulations, that reopening is time-barred; and the sole question is whether claimant’s alleged mental disability should relieve him of the time limitations in the regulations. The district court, reviewing the Secretary’s determination under § 205(g) of the Act, 42 U.S.C. § 405(g), affirmed the Secretary and dismissed the complaint. Without expressing any opinion on the merits of claimant’s contention, we remand to the Secretary for further proceedings. On July 9, 1963, claimant applied for benefits, asserting disability from February, 1963, because of asthma. The original application and a requested reconsideration were both denied on the ground that he was insufficiently disabled. Although notified of his right to request a hearing, he pursued the matter no further. Not until October of 1968 did he file another such application, resulting in the present proceedings. Besides asth-. ma, claimant this time asserted “nerves” as a disabling factor. His claim was first denied; but he requested and was granted, on October 14, 1969, a hearing before a Hearing Examiner. Appearing without counsel, he testified that he had not worked since February, 1963; that besides the asthma he could not sleep “even for one hour” and was always bursting into tears. The hearing was terminated when he began to weep. Doctors’ certificates and records of outpatient treatment at a Veterans Administration facility were received. Based on the October, 1968, application, the Examiner found him to be entitled to a period of disability commencing on February 28, 1963, and to disability benefits. In December, 1969, claimant was sent a Certificate of Social Insurance Award showing entitlement to benefits as of October, 1967. He sought review by the Appeals Council of the Social Security Administration, asserting a right to recover benefits from February 28, 1963, and when this was denied, commenced an action in the district court. The Secretary’s position, which correctly interprets § 223(b) of the Act and his own regulations, is that retroactive recovery under the 1968 claim is limited by § 223(b) to a period of one year before the filing of that claim. To the contention that the favorable second determination (finding a period of disability going back to early 1963) should be viewed as reopening the unsuccessful 1963 determination, the Secretary responds that the time limitations set forth in his regulations are a bar. The determination denying benefits under the 1963 claim became final in 1964. 20 C.F.R. 404.916. It could be reopened as of right only within one year, and for cause only within four years, after the date of the notice of the initial determination. 20 C.F.R. 404.957. Claimant’s second claim was filed more than four years after the date of such notice. Claimant contends, however, that the time limitations for reopening should not apply to a mentally incapacitated person. The Secretary’s regulations make no exception for individuals who may be prevented from pursuing their rights by mental disability. We are not now prepared to decide whether and when a person suffering from major mental disability may be entitled to relief from the four-year limitation. The Secretary’s regulations must be consistent with the Act, necessary or appropriate to carry out its provisions, and reasonable. 42 U.S.C. § 405(a). Statutes of limitations have “generally” exempted from their operation plaintiffs who are subject to legal disability such as insanity. Developments in the Law — Statutes of Limitations, 63 Harv.L.Rev. 1177, 1229 (1950). The policy, however, has not been uniform, and may depend upon the nature of the rights affected. The Secretary may be able to persuade us, even if this claimant could establish long-standing incompetency of requisite degree, that an exception therefor would be administratively unsound given the peculiar features and requirements of the Act. Yet, we think claimant’s contention cannot be rejected out of hand and without further consideration. Further weighing in his favor is the line of authority holding that one insured against accident or ill-health may be excused from giving notice and proof within the period stipulated in the policy if he is prevented from so doing by reason of his insanity or other mental condition rendering the giving of notice and proof impossible. Annot., 142 A.L.R. 852 (1943). See Couch on Insurance 2d § 32:42; J. A. Appleman, Insurance Law and Practice, § 11632 (1963). While abstractly the question raised by claimant is not insubstantial, we are unable to resolve it on the record before us. No specific findings were made by the Secretary showing the effect, if any, of claimant’s mental condition from 1963 to 1968 on his ability to understand and pursue his remedies. As the district court correctly noted, the general finding of disability made on evidence of both asthma and nerves, tells us merely that he was occupationally disabled within the meaning of the Act; one may be so disabled and yet retain the awareness and mental capacity to understand and pursue one’s right. See Couch on Insurance, 2d § 32:42 at p. 257. The district court undertook to remedy the silent record by reviewing the raw medical data and making its own determination — which was that the claimant had not been shown during the “critical period of 1963-67” to have been unable to comprehend rights which he was otherwise bound to know. In so doing, the court erred. A district court may not, under the Act, make findings of fact to supplement those of the Secretary. 42 U.S.C. § 405(g). See Snyder v. Ribicoff, 307 F.2d 518, 520 (4th Cir. 1962). Its function is to review the Secretary’s findings, which must stand if supported by substantial evidence and if not contrary to law. Where, as here, the Secretary did not receive evidence or make findings on a material issue, the remedy is to return to the Secretary. Both the Secretary’s failure to make findings and the district court’s attempt to make its own are understandable given the novelty of the question. It is this very novelty, and the potential impact of a final resolution on the Secretary’s regulatory scheme, which leads us to withhold judgment on the ultimate legal issue until the facts are adequately developed. It may yet be, as the district court believed, that claimant will not be shown to have suffered from mental impairment so serious as even to present the difficult legal question of to what extent, if any, the Secretary’s regulations must be relaxed. But we think the claimant must be given full opportunity to present the issue administratively. It must be remanded to the Secretary for a further hearing, at which evidence may be received, and findings made, on the extent of claimant’s mental impairment at relevant times in each of the years 1963-68, and on whether or not such impairment prevented the timely pursuit of his remedies. In light of such findings, the Secretary may render such conclusions as he believes appropriate on the issue of claimant’s right to reopen the 1963 claim. The Secretary’s findings and conclusions will be subject to further review in the district court at which time, if the findings and conclusions so necessitate, the broad issue of whether and to what extent claimant’s mental condition may entitle him to relief from the regulatory time limitations can be further considered. The case is remanded to the district court, with directions to remand to the Secretary for further action consistent herewith. , On the issue of “nerves”, one physician certified to having rendered ambulatory psychiatric treatment to claimant as early as 1954 and 1955. A Veteran’s Administration physician, in 1966, noted insomnia, the hearing of voices, fits of depression and crying, and recommended hospitalization (which apparently never occurred). From May 27, 1969, to June 18, 1969, claimant was hospitalized at the Hato Rey Psychiatric Hospital. He was diagnosed by his physician as having “Anxiety reaction, chronic, severe, with marked depression and bronchial asthma” and by another physician (in 1969) as “Psychotic, depressive reaction, chronic, severe. . . . ” . They do, however, afford such a person a measure of protection by permitting an application for benefits to be made by another on his behalf. 20 C.F.R. 404.603 (e). The present court proceeding, we note, was instituted by claimant’s wife, whom he married in 1968. The 1963 claim was brought directly by claimant at a time when a divorce was pending between his first wife and himself. . In so defining the findings to be made, we should not be understood as precluding the Secretary from making any other findings of fact which he believes to be germane to the issue of reopening the 1963 claim.

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UNITED STATES of America, Appellee, v. Harold Edward BURTON, Appellant. No. 72-1412. United States Court of Appeals, Eighth Circuit. Submitted Jan. 11, 1973. Decided March 19, 1973. Edward W. Mullen and Deacy & Deacy, Kansas City, Mo., for appellant. J. Whitfield Moody, Asst. U. S. Atty., Kansas City, Mo., for appellee. Before MATTHES, Chief Judge, BRIGHT, Circuit Judge, and TALBOT SMITH, Senior District Judge. Hon. Talbot Smith, Senior United States District Judge, Eastern District of Michigan, sitting by designation. TALBOT SMITH, District Judge. The appellant before us was tried by jury and convicted of the offense of possession of firearm traveling in and affecting interstate commerce in violation of 18 U.S.C.A. App. § 1202(a)(1). The facts of this ease are not in dispute. Briefly, what happened was that the appellant purchased a ticket at the Kansas City Municipal Air Terminal for Minneapolis. At the same time he checked two bags for the flight. The Braniff ticket agent became suspicious. Not only did the appellant fit what is called the “highjacker’s profile” but the weight distribution of one of his bags seemed unusual. Obtaining a skeleton key, the agent opened the bag and found therein a loaded .357 magnum Smith & Wesson revolver. The U. S. Marshal on duty at the terminal was notified and when the appellant presented himself for the flight he was taken into custody and the weapon and ammunition seized. The District Court’s exhaustive opinion, 351 F.Supp. 1372, sets out the facts in more detail. Pre-trial motion was made for the suppression of the gun, its ammunition, and certain other evidentiary exhibits, on the ground that they were the products of an unlawful search. The denial of such motion, D.C., 341 F.Supp. 302, is one of the grounds for appeal. In this aspect of the case it is appellant’s theory that the actions of the Braniff agent amounted, in legal effect, to an illegal search by an agent of the Government. “By virtue,” be asserts, “of the broad authorities and powers of the F.A.A. [Federal Aviation Administration] over air lines, the resultant searches, including the one in question here, are inextricably intertwined with Governmental action and the directives of the F.A.A. disseminated to the air lines as shown by the evidence.” The directives relied upon are not cited to us and our independent research has disclosed none warranting the conclusion asserted. Appellant urges that Corngold v. United States, 367 F.2d 1 (9th Cir. 1966), is applicable precedent. Corngold, however, involved a situation in which the carrier’s agent opened a package only because the government agent asked him to do so and, indeed, participated in the search. United States v. Lopez, 328 F. Supp. 1077 (E.D.N.Y.1971), also relied upon by appellant, is even more remote from our facts. There the search was conducted by Federal agents. Here the Braniff agent conducted the search entirely on his own, no government agent so requesting or even being involved in the matter until after the carrier’s agent discovered that appellant had delivered a loaded gun to the carrier for transportation. Gold v. United States, 378 F.2d 588 (9th Cir. 1967), is more in point, confirming the essentially private character of the carrier’s search. The issue of governmental search here is without merit. Appellant also complains that the act violates his rights under the Fifth Amendment to the Constitution and Article 4, Section 2 thereof. He bases this argument, without case support, upon the theory that the act denies those purportedly subject to it of the equal protection of the laws, in that state laws differ in their punishments for prescribed offenses, an act possibly being a felony in one state, though only a misdemeanor in another. The argument lacks merit. We have held heretofore that the Congress had a rational basis for finding that the receipt, possession or transportation of a firearm by felons affected commerce. United States v. Synnes, 438 F.2d 764 (8th Cir. 1971), vacated on other grounds; United States v. Bass, 404 U.S. 336, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971). See, also Cody v. United States, 460 F.2d 34 (8th Cir. 1972). In this situation, with an established nexus under the Commerce Clause, there is no requirement of national uniformity, Schneider v. United States, 459 F.2d 540 (8th Cir. 1972), citing Clark Distilling Co. v. Western Md. Ry. Co., 242 U.S. 311, 327, 37 S.Ct. 180, 61 L.Ed. 326 (1917). Currin v. Wallace, 306 U.S. 1, 14, 59 S.Ct. 379, 83 L.Ed. 441 (1939); Secretary of Agri. v. Cent. Roig Refining Co., 338 U.S. 604, 616, 70 S.Ct. 403, 94 L.Ed. 381 (1950). The Supreme Court has also approved, in a variety of contexts, the incorporation of state laws into federal statutes. Schneider v. United States, supra, and cases therein cited. These considerations dispose, as well, of appellant’s Article 4 argument, that the statute inhibits his right to travel from one state to another. The citizen’s right to travel is subordinate to the Congressional right to regulate interstate commerce when the travel involves the use of an interstate facility for illicit purposes. Hoke v. United States, 227 U.S. 308, 33 S.Ct. 281, 57 L.Ed. 523 (1913). We note, also, that the conviction here was on the basis of the use of an interstate facility, rather than concerning interstate travel as such. There is no question that Congress may proscribe the use of an interstate facility for illicit purposes. Turf Center, Inc. v. United States, 325 F.2d 793 (9th Cir. 1963); United States v. Gerhart, 275 F.Supp. 443 (S.D.W.Va.1967). Finally, appellant complains of the indictment. The Count before us states: COUNT 1 “That on or about the 11th day of January, 1972, at Kansas City, Missouri, in the Western District of Missouri, HAROLD EDWARD BURTON, having been previously convicted of a felony, an offense punishable by imprisonment exceeding one year, to wit, assault with intent to kill, in the Circuit Court of Jackson County, State of Missouri, did wilfully and knowingly possess and transport in interstate commerce from Kansas City, Missouri, to Minneapolis, Minnesota, a certain firearm, to wit: a loaded .357 magnum Smith & Wesson Revolver, Serial No. S-283727, all in violation of Title 18 Appendix, Section 1202(a)(1) United States Code.” The appellant asserts that there was no evidence to support the transportation alleged, and also that preamble of the count reciting the Kansas City venue is contradictory to the charge made. It is well established, however, that an article delivered to a common carrier for shipment to another state is in interstate commerce from the time of its delivery to the carrier until it reaches the consignee. United States v. May, 419 F.2d 553 (8th Cir. 1969); United States v. Jones, 446 F.2d 48 (4th Cir. 1971). See, also, United States v. Yellow Cab Co., 332 U.S. 218, 67 S.Ct. 1560, 91 L.Ed. 2010 (1947). Such was the showing here and the jury was properly instructed thereon. We find no contradiction between the allegation in the indictment that the offense occurred at Kansas City and the allegation that appellant did possess and transport a firearm in interstate commerce. There was, moreover, no possibility that the appellant was misled in any way as to the charge brought against him by the indictment. The conviction is affirmed.

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James EASTMAN, Plaintiff-Appellant, v. Elliot L. RICHARDSON, Secretary of Health, Education and Welfare, Defendant-Appellee. No. 72-1412. United States Court of Appeals, Sixth Circuit. Argued Dec. 4, 1972. Decided March 20, 1973. N. C. Syracopoulos, Akron, Ohio, for plaintiff-appellant; Cherpas, Manos & Syracopoulos, Akron, Ohio, on brief. Thomas G. Wilson, Atty., Dept, of Justice, Washington, D. C., for defendant-appellee; Harlington Wood, Jr., Asst. Atty. Gen., Frederick M. Coleman, U. S. Atty., Kathryn H. Baldwin, Atty., Dept, of Justice, Washington, D. C., on brief. Before PECK, Circuit Judge, and CECIL and O’SULLIVAN, Senior Circuit Judges. PER CURIAM. This is an appeal from a summary judgment entered in the appellant’s action brought pursuant to Section 205(g) of the Social Security Act to review a decision of the Secretary of Health, Education and Welfare, in which the Secretary declined to reopen a claim for old age benefits. The facts concerning the appellant’s claim are fully reported in Eastman v. Celebrezze, 240 F.Supp. 142 (N. D.Ohio 1965), and Eastman v. Gardner, 373 F.2d 481 (6th Cir. 1967). Since the merits of the appellant’s claim are not directly relevant to this proceeding, it is sufficient to observe that this Court found in the prior litigation that substantial evidence supported the Secretary’s finding that the case presented a collusive family arrangement whereby “a paper facade of ‘wages’ ” was paid to the appellant which, in reality, was an indirect return to him of portions of rentals from his own property to permit him to obtain Social Security benefits. In February of 1971, the appellant’s petition to reopen the case to present new material was denied on the grounds that the request was untimely since it was made more than four years from the date of the initial determination and because nothing could be found which would otherwise permit a reopening of the case. The appellant then sought a review of this determination in the District Court pursuant to 42 U.S.C. § 405(g). In his complaint, he alleged that the hearing examiner placed evidence in the record bearing on an issue which the parties agreed not to present in the prior litigation. The District Court held that regardless of what may or may not have been understood by the parties during the prior litigation up to and including the District Court level, the appellant certainly was aware that this issue was in this case when it was previously considered by this Court in 1967; accordingly, the Secretary’s motion for summary judgment was granted. At the outset, we note that the threshold issue of whether or not the Secretary’s determination not to reopen a claimant’s application for benefits is subject to judicial review has recently been determined by this Court in Maddox v. Richardson, 464 F.2d 617 (6th Cir. 1972). In that case, which was decided subsequent to the briefing of this case, this Court held that the Secretary’s decision not to reopen a claim is subject to judicial review. Accord: Cappadora v. Celebrezze, 356 F.2d 1 (2d Cir. 1966); Davis v. Richardson, 460 F.2d 772 (3d Cir. 1972); contra: Filice v. Celebrezze, 319 F.2d 443 (9th Cir. 1963). Accordingly, the only issue for our determination is whether the refusal to reopen was an abuse of the Secretary’s discretion. The appellant asserts that his case should be reopened for the presentation of new evidence. The regulations of the Secretary provide that a party may have his case reopened before the Secretary within one year from the date of the notice of the initial determination for the presentation of new evidence or within four years from that date if the claimant can show good cause for such a reopening. 20 C.F.R. 404.957(a) and (b). Since the claimant’s motion for reopening for good cause was filed almost ten years from the notice of the initial determination on March 16, 1961, the request was properly denied under this section. The appellant’s contention that the four year period ran from February 13, 1967, the date of this Court’s affirmance of the Secretary’s initial determination, is without merit, Pasquale v. Finch, 418 F.2d 627 (1st Cir. 1969). There is nothing in the facts of this case or in 20 C.F.R. § 404.957(b) which would justify a departure from the rule that the period of the statute of limitations begins to run from the date of the notice of the initial determination. In the alternative, the appellant contends that he may reopen the case under 20 C.F.R. § 404.957(c) which provides that an initial determination may be reopened at any time when that determination was procured by fraud. The alleged acts of fraud by the Secretary include the general contention that the appellant was fraudulently prevented by the Secretary from presenting evidence on the issue of whether or not the money he received during the years in question constituted wages. This contention is based on the fact that the hearing examiner on April 5, 1963, set out three issues which were to constitute the case to be heard, the third of which was “whether and in what amounts such remuneration constituted ‘wages’ for employment.” The appellant now contends that the Examiner eliminated this issue from the case in his opening statement, and that he did not present evidence on this issue because he thought that the issue had been “dropped” or “removed.” H$ contends that the examiner inserted evidence into the record pertaining to this issue which he was not allowed to rebut. We cannot agree with this contention. The issue of whether the remuneration received by the appellant constituted wages could never have been removed from the proceeding because that issue was necessarily contained in the other two issues agreed to by the appellant. Those two issues were whether the appellant rendered services as an employee for his stepsons and whether the appellant received remuneration from his stepsons. The record shows that the third issue as expressed by the hearing examiner was not “removed,” but was recognized by all parties at the time as merely expressing the application of the statutory definitions to the two factual determinations to be made at the hearing. In addition, even if the appellant and his counsel were under a misimpression in this regard at the time of the hearing, the record indicates that the appellant was fully aware that this issue was still in the case when the matter was before this Court on the previous appeal, where these contentions were not raised. In fact, the appellant conceded in the District Court that the issue of fact upon which he seeks to reopen his claim was encompassed within this Court’s previous ruling. Since the appellant had an opportunity to raise the issue of fraud before this Court and did not do so, and failed to raise it for almost four years from the date of this Court’s decision and almost ten years from the date of the initial determination, we cannot say that the Secretary’s decision not to reopen the case for further determinations was an abuse of discretion. The decision of the District Court is affirmed.

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Fred Arispe CRUZ et al., Plaintiffs-Appellants, v. W. B. (Bill) HAUCK, Sheriff of Bexar County and Jesse Dobbs, Chief Jailer, Bexar County Jail, Defendants-Appellees. No. 72-2878 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 8, 1973. Rehearing Denied April 24, 1973. Frances T. F. Cruz, Houston, Tex., for plaintiffs-appellants. Ted Butler, Cr. Dist. Atty., Lucien B. Campbell, Asst. Cr. Dist. Atty., Bexar County, Crawford Martin, Atty. Gen., Austin, Tex., for defendants-appellees. Before JOHN R. BROWN, Chief Judge, and GOLDBERG and MORGAN, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. JOHN R. BROWN, Chief Judge: This Section 1983 suit involves the constitutional propriety of restrictions on prisoners’ access to legal materials. Acting upon the clear mandate of the United States Supreme Court, Cruz v. Hauck, 1971, 404 U.S. 59, 92 S.Ct. 313, 30 L.Ed.2d 217, we previously remanded petitioners’ case to the District Court for reconsideration in light of the principles enunciated in Younger v. Gilmore, 1971, 404 U.S. 15, 92 S.Ct. 250, 30 L.Ed.2d 142, affirming Gilmore v. Lynch, N.D.Calif., 1970, 319 F.Supp. 105. On remand the District Court, 345 F.Supp. 189, adopted, over the objection of and without hearing from the petitioners, three broad-brush regulations offered by the Government. The petitioners strenuously object to the implementation of these regulations and urge that they will still serve to curtail petitioners’ rights to equal access to the courts. Federal courts are not prison managers. Ordinarily we accord great deference to the internal administrative decisions of prison officials. Royal v. Clark, 5 Cir., 1971, 447 F.2d 501; Krist v. Smith, 5 Cir., 1971, 439 F.2d 146; Haggerty v. Wainwright, 5 Cir., 1970, 427 F.2d 1137; Granville v. Hunt, 5 Cir., 1969, 411 F.2d 9. But where, as here, a prisoner alleges that a particular restriction imposed upon him by the prison officials impinges upon his exercise of constitutionally guaranteed rights, it is incumbent upon us to carefully scrutinize the effect of the restrictions. Haines v. Kerner, 1972, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652; Williams v. Wainwright, 5 Cir., 1972, 461 F.2d 1080; Campbell v. Beto, 5 Cir., 1972, 460 F.2d 765; Neal v. Georgia, 5 Cir., 1972, 469 F.2d 446 [1972], It is clear that ready access to the courts is one of, perhaps the, fundamental constitutional right. While the petitioners here have no right to usurp the regulatory powers of the prison officials, they certainly have standing to interpose objections to the promulgation of rules which will stifle the exercise of their constitutional rights. The court below failed to address itself to the specific objections offered by petitioners to the new regulations. Clearly it is not our function to formulate proper rules for the prisons. But in view of the fact that the trial court failed, as far as we can tell from the record, to confront the objections, we must reverse and remand for an evidentiary hearing to be followed by specific findings of fact and conclusions of law on the merits of petitioners’ objections and the Government’s justifications for the rules. In order to guide the trial court in its inquiry — and hopefully bring an end to this chronicle without need for further proceedings— we make several very general comments regarding the nature of petitioners’ claims. Respondents’ first proposed rule prohibits the prisoners from possessing or using books with hard-bound covers. Two justifications are offered for this restriction: (i) the possibility that the hard-cover books could be used as weapons, and (ii) the fear that the importation of the books will be used as a method for smuggling contraband into the prison. Many common household items may be conceivably improvised for use as a weapon, e.g., a fork. But the possibility that a fork could be used as a weapon would not justify prison officials in forcing prisoners to eat with their fingers. “The prisoner is no longer regarded as a temporary ‘slave of the State’, and prison officials are not now such masters of their own domain as to be free of the restraints of constitutional reasonability.” Gilmore v. Lynch, supra 319 F.Supp. at 108. The Government’s contention that items of contraband could be secreted within the covers of the book is seemingly answered by Seale v. Manson, D.Conn., 1971, 326 F.Supp. 1375, cited in the Government’s brief: “The inmate’s possession of reading materials may, of course, be preceded by a careful examination to detect contraband, and considerations of space, sanitation and orderliness may require certain limitations.” Id. at 1382. Rules II and III should also be the subjects of the Court’s scrutiny on remand. They suggest that every prisoner will have access to legal materials —and thus, vicariously to the courts— via their attorneys. But this presupposes representation by counsel. Irrespective of the retention, appointment, or availability of counsel, it is clear that a prisoner’s free access to the Courts is a constitutional imperative. Younger v. Gilmore, supra; Johnson v. Avery, 1969, 393 U.S. 483, 89 S.Ct. 747, 21 L.Ed.2d 718. Indeed, the waning altruism of a public defender representing a client with an apparently frivolous appeal may not be used to limit the petitioner’s good faith prosecution of an appeal. See Lane v. Brown, 1963, 372 U.S. 477, 83 S.Ct. 768, 9 L.Ed.2d 892; Ellis v. United States, 1958, 356 U.S. 674, 78 S.Ct. 974, 2 L.Ed.2d 1060; Macon v. Lash, 7 Cir., 1972, 458 F.2d 942; Harders v. California, 9 Cir., 1967, 373 F.2d 839. Petitioners have alleged and offered to prove that by tying access to legal materials to the prisoner’s relationship with his attorney and the availability of materials from the Bexar County Law Library, Rules II and III will unreasonably impair their access to the Courts. We believe that they should be given the opportunity to make this proof. While our disposition of this case requires further consideration by the district court, we re iterate that we do not deprive the prison officials of their prerogatives. Nor do we invest the prisoners with any special right to veto proposed prison regulations. All we hold is that prison regulations must not unreasonably invade the relationship of the prisoner to the courts, without some persuasive governmental justification. Reversed and remanded. . The rules which were offered by the Government and accepted by the trial court are as follows: I That legal materials and law books are available to prisoners if they have their own material or if their attorneys supply said materials or if said treatises or texts are ordered from any publishing company by the United States mail; provided that said legal materials do not have hard-bound covers, and provided further that the storage and maintenance of said materials do not unreasonably restrict and limit floor or wall space dimensional of the jail cell block. II That whereas every prisoner in the Bexar County Jail has access to retain their court-appointed counsel and whereas every attorney has access to the Bexar County Law Library, it is proposed that every prisoner has and will have access to the Law Library through his attorney and may receive through his attorney any photostatic materials that he and his legal counsel deem necessary for the prisoner to seek his judicial remedies. Ill That the censors of the Bexar County Jail do not censor any correspondence between prisoners and their attorneys and based upon said premise such privileged communications including receipt of legal materials will be expedited through the use of the United States Mail. . For an example of how a fork may be used as a weapon see Perkins v. Mississippi, 5 Cir., 1972, 455 F.2d 7, 19 n. 18 (Brown, C. J., dissenting).

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Caselaw Access Project

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UNITED PHILIPPINE LINES, INC. as owner of the M/V PHILIPPINE PRESIDENT QUEZON, Appellee, v. The SUBMARINE USS DANIEL BOONE (SSBN629), her engines, apparel, etc., in rem, and the United States of America in personam, Appellants. No. 72-2083. United States Court of Appeals, Fourth Circuit. Argued Feb. 5, 1973. Decided March 21, 1973. Robert E. Kopp, Atty., United States Department of Justice (Harlington Wood, Jr., Asst. Atty. Gen., Brian P. Gettings, U. S. Atty., on brief), for appellants. R. Arthur Jett, Jr., Norfolk, Va. (Waverley L. Berkley, III, and Jett, Berkley, Furr & Heilig, Norfolk, Va., on brief), for appellee. Before CRAVEN, BUTZNER and WIDENER, Circuit Judges. CRAVEN, Circuit Judge: Near high noon on a bright day, with visibility unlimited, the United States’ nuclear-powered submarine Daniel Boone (SSBN629) turned into collision course with M/V Philippine President Quezon. Immediately prior to collision, the submarine was proceeding at flank speed (15-16 knots) in usually congested waters (just out of Thimble Shoals Channel) and the Quezon was engaged in picking up a pilot off Cape Henry, Virginia, and was highly unmaneuverable. So found the district court, and his findings are not attacked on appeal. Rightly the district judge concluded that the negligence of the submarine was the sole cause of the collision. Appellant United States presents us with only one issue: whether the United States in its actions below so far took the position of a private suitor as to waive any defense of sovereign immunity regardless of the reciprocity requirements of Section 5 of the Public Vessels Act, 46 U.S.C.A. § 785. We hold that the United States did waive its sovereign immunity and affirm the decision of the district court. United Philippine Lines, Inc., the owner of the Quezon, began the litigation by filing suit in the district court. The suit filed by United Philippine Lines, Inc., a Philippine corporation, was against the USS Daniel Boone, in rem, and against the United States, in personam. Damages of $450,000.00 were sought. Jurisdiction was founded under the Public Vessels Act, 46 U.S.C. A. § 781 et seq., and alternatively under the Suits in Admiralty Act, 46 U.S.C.A. § 741 et seq. In its answer, the United States set up as a defense the lack of the reciprocity required by Section 5 of the Public Vessels Act, 46 U.S.C.A. § 785. Section 5 of the Public Vessels Act provides: No suit may be brought under sections 781-790 of this title by a national of any foreign government unless it shall appear to the satisfaction of the court in which suit is brought that said government under similar circumstances, allows nationals of the United States to sue in its courts. 46 U.S.C.A. § 785 (1970). After raising the reciprocity defense, however, the United States sought the joinder of the vessel M./V Philippine President Quezon as a defendant in rem. The government also filed a counterclaim reciting the collision, laying the liability therefor to the Quezon, and seeking damages of $600,000.00. To secure its counterclaim, the United States sought: the arrest of the Quezon, and if that vessel, itself, be not amenable to such attachment, then other property belonging to United Philippine Lines, Inc. be attached; that the claim of the plaintiff be dismissed; and, that judgment be entered for the United States. The district court concluded that these actions by the United States constituted a waiver of sovereign immunity making it unnecessary to reach the question of reciprocity under Section 5 of the Public Vessels Act. We agree. When the United States comes into an admiralty court and asks the “court to complete the adjudication of a cause which was rightfully begun in that jurisdiction, we think the government is bound by the submission .” United States v. The Steamer Nuestra Senora de Regla, 108 U.S. 92, 103, 2 S.Ct. 287, 293, 27 L.Ed. 662 (1883). By asking that justice be done with regard to a maritime collision, the United States becomes subject to the rule set forth in Luckenbach Steamship Co. v. The Thelka, 266 U.S. 328, 45 S.Ct. 112, 69 L.Ed. 313 (1924) In The Thelka a libel was filed against the Thelka by the Luckenbach Steamship Company for damages to one of its ships caused by a collision with the Thelka. The ship of the Luckenbach Company involved in the collision was under requisition to and being used by the United States at the time of the collision. Upon its own motion the United States became a party to the pending suit and stood on the libel of the steamship company. In upholding an affirmative judgment against the United States, the Supreme Court stated: When the United States comes into court to assert a claim, it so far takes the position of a private suitor as to agree by implication that justice may be done with regard to the subject matter. The reasons that have prevailed against creating a government liability in tort do not apply to a case like this, and, on the other hand, the reasons are strong for not obstructing the application of natural justice against the Government by technical formulas when justice can be done without endangering any public interest. As has been said in other cases, the question of damages to the colliding vessel necessarily arose, and it is reasonable for the Court to proceed to the determination of all the questions legitimately involved, even when it results in a judgment for damages against the United States. It is said that there is no statute by which the Government accepted this liability. It joined in the suit, and that carried with it the acceptance of whatever liability the courts may decide to be reasonably incident to that act. 266 U.S. at 339-341, 45 S.Ct. at 113. The United States is in the same position here as it was in The Thelka. In seeking dismissal of the plaintiff’s claim, an affirmative judgment on its counterclaim, and the arrest of the Quezon, the government has so far taken the position of a private suitor as to waive its sovereign immunity. This results from the peculiar “relationship characteristic of claims for collision in admiralty but entirely absent in claims and cross-claims” in other civil cases. In view of our holding that the United States has waived sovereign immunity we need not consider whether there is reciprocity sufficient to satisfy Section 5 of the Public Vessels Act. There was, however, strong evidence presented below that the Philippine courts provide United States nationals with the reciprocity required by that section. Nor do we decide whether without a waiver and without reciprocity an action such as this may be brought under the Suits in Admiralty Act, 46 U.S.C.A. § 741 et seq. Accordingly, for the reasons stated, the decision of the district court is Affirmed. . Perhaps because, curiously, the Mate of the Quezon happened to photograph the approach of the submarine in 8 milimeter color film beginning 45 seconds before impact. . United States v. The Australia Star, 172 F.2d 472 (2d Cir. 1949), cert. denied, 338 U.S. 823, 70 S.Ct. 69, 94 L.Ed. 499 (1949). . United States v. Shaw, 309 U.S. 495, 502, 60 S.Ct. 659, 662, 81 L.Ed. 888 (1940). . 3 Moore’s Federal Practice ¶ 13.27 (2d ed. 1972). . Section 2 of the Suits in Admiralty Act, 46 U.S.C.A. § 742, as amended in 1960, would apparently allow such a suit if the section is given a literal interpretation. A literal interpretation of a statute waiving sovereign immunity is generally required. Gulf Oil Corp. v. Panama Canal Co., 407 F.2d 24, 28 (5th Cir. 1969).

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Caselaw Access Project

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2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Alex HARDING, a/k/a Mark Harding, Defendant-Appellant. No. 72-1648. United States Court of Appeals, Tenth Circuit. Argued and Submitted Feb. 21, 1973. Decided March 16, 1973. Rehearing Denied April 6, 1973. William K. Hickey, First Asst. U. S. Atty. (James L. Treece, U. S. Atty., on the brief), for plaintiff-appellee. Edward H. Sherman, Sherman & Sherman, P. C., Denver, Colo., for defendant-appellant. Before HILL and DOYLE, Circuit Judges, and BRATTON, District Judge. DOYLE, Circuit Judge. This is an appeal from a conviction by a jury on a charge of importation of obscene matter. The indictment which was returned on August 25, 1971, charged the defendant with the offense of knowingly and unlawfully taking and receiving from an express company one twelve pound carton containing 41 obscene books and five reels of obscene or filthy motion picture films which were then being transported in commerce from Los Angeles, California to Denver, Colorado, all in violation of 18 U.S.C. § 1462. There is little evidentiary dispute in the case, and the main issues are first, whether a search by a private person violated the defendant’s Fourth Amendment rights and, secondly, whether the element of criminal intent was adequately submitted to the jury, and also whether the evidence was sufficient to establish the defendant’s knowledge of the nature and character of the obscene materials which were transported. We have examined the several points raised by the defendant, and we conclude that the appeal is lacking in merit and that the judgment must be affirmed. The evidence established that on January 14, 1971, the Realher Corporation delivered a twelve pound carton to Emery Air Freight in Los Angeles, California, addressed to Ace Books, 3220 Wyandot Street, Denver. It was to have been sent COD and the charges amounted to $425.00. The bill had a request “Please call this number on arrival” and gave the telephone listing for Alex Harding, a/k/a Mark Harding. The address was 3220 Wyandot. The Emery agent became suspicious that the package which showed that it contained printed matter might, in view of the $425.00 in charges, be pornography and pursuant to permission granted in the CAB Tariff examined the same. Once it was discovered that the contents consisted of what were apparently obscene materials, the FBI was notified and an agent Phinney came out. He also inspected the contents. Phinney conducted a local investigation and ascertained that a Charles A. Keller had delivered the package for shipment. After the inspection had been made the package was resealed and shipped. It was received in Denver by the Emery Company from Continental Airlines and the consignee was notified of its arrival. Meanwhile, Emery had received several calls inquiring as to whether the package had arrived. On January 19 one Valeria Stewart, who did occasional work for the defendant, according to her testimony, went to pick up the package at his instruction. The defendant had given her the money to pay for the COD. She made the trip to Emery in defendant’s automobile. When Valeria Stewart sought to pick up the package the officers who were waiting for her intercepted her effort and thereupon she, together with the package, proceeded to U. S. District Court for a hearing. An order to show cause as to why the described package should not be delivered to the government as evidence had been issued in a separate civil proceeding. The initial ex parte order was based on an affidavit submitted by the FBI agent who had made the initial inspection in Los Angeles. A hearing was not held on the day in question. A postponement was granted at the request of the attorney who appeared. At the hearing the contention was raised that the search was unlawful; however, it was ordered that the package and contents be delivered to the government. At the subsequent trial in May 1972, the defendant, together with his attorney, entered into a stipulation that the materials in the carton were obscene. The guilty verdict was entered on May 24, 1972. I. SUFFICIENCY OF THE INDICTMENT We see no merit whatsoever in the defendant’s contention that the indictment was inadequate. This was a detailed statement of the offense charged which contained all of the elements required by 18 U.S.C. § 1462. This section prohibits knowingly taking from an express company or other common carrier “any matter or thing the carriage of which is herein made unlawful.” The statute refers to obscene, lewd, lascivious or filthy book, pamphlet, picture, motion picture film, etc. The indictment charges that the defendant did knowingly and unlawfully take and receive from an express company or a common carrier “one twelve pound carton containing 41 obscene, lewd, lascivious, or filthy books, pamphlets, or pictures, to wit. . . .” The indictment then describes in detail the material in question and continues “which were then being transported and carried in interstate commerce from Los Angeles, California to Denver, Colorado, all in violation of Title 18, United States Code, Sections 1462 and 2.” Defendant maintains that the indictment does not aver that the defendant had knowledge that the carton contained material that was of obscene character. We disagree. The words “knowingly” and “unlawfully” refer to and modify the words describing the nature and character of the material, and so it clearly requires that the defendant know the nature of the contents. Moreover, the evidence establishing this knowledge was quite adequate. The testimony of Valeria Stewart and the circumstances as a whole were amply sufficient to convince the trier of the facts and the jury that the defendant was the individual involved. Ordinarily an indictment which follows the statute and sets forth the elements contained therein is sufficient to apprise the accused of the nature of the charge and to allow him to plead and defend. This is all that is needed. See United States v. Kimball, 441 F.2d 505, 507 (10th Cir. 1971). See also Mims v. United States, 332 F.2d 944 (10th Cir.), cert. denied, 379 U.S. 888, 85 S.Ct. 158, 13 L.Ed.2d 92 (1964). II. WHETHER THERE WAS INVALIDITY IN CONNECTION WITH THE SEIZURE OF THE MATERIALS BY THE GOVERNMENT Defendant contends that there was no lawful authority for the procedure used; that the search was illegal and that the obscene matter was seized without prior adversary hearing on obscenity. There is no showing whatever that the employees of Emery were working in conjunction with the FBI. Moreover, Emery had a valid interest in checking the contents of the package and so this particular search was not carried out pursuant to any direction by the government. A search and seizure by a private person not acting in collusion with federal officers does not render the subsequently seized material inadmissible in evidence. 5 Orfield, Criminal Procedure under the Federal Rules § 41:25, at 709-10. For a discussion of the admissibility in criminal cases of evidence obtained by searches by private individuals, see 36 A.L.R.3d 553 (1971). See Burdeau v. McDowell, 256 U.S. 465, 474, 41 S.Ct. 574, 65 L.Ed. 1048 (1921), an early Supreme Court decision wherein business associates of the accused actually stole certain incriminating documents. Notwithstanding the theft aspect, a majority of the Supreme Court held that it was valid for the government to introduce this illegally obtained evidence. Other decisions have gone a long way, perhaps too far, in allowing the government to use evidence obtained by private individuals. Thus, in Cohen v. United States, 36 F.2d 461, 462 (3rd Cir. 1929), cert. denied, 281 U.S. 742, 50 S.Ct. 348, 74 L.Ed. 1156 (1930), it was held that notwithstanding the existence of an illegal search and seizure, the testimony of a stranger entering the premises during the search at the invitation of the occupant was admissible. In United States v. Ashby, 245 F.2d 684, 686 (5th Cir. 1957), joint income tax returns voluntarily turned over by a wife were admitted over the objection of the husband, the spouses being separated. See United States v. Winfree, 170 F.Supp. 659 (E.D.Pa.1959). In United States v. Goldberg, 330 F.2d 30 (3rd Cir. 1964), cert. denied, 377 U.S. 953, 84 S.Ct. 1630, 12 L.Ed.2d 497 (1964), documents and records of a corporation of which the taxpayer was president were taken without his knowledge by former employees, but were nevertheless held to be admissible. It has been argued that Elkins v. United States, 364 U.S. 206, 80 S.Ct. 1437, 4 L.Ed.2d 1669 (1960) has generally condemned receipt of tainted evidence and has thus undermined the authority of the cases holding that evidence obtained by private persons is admissible. However, the tendencies have been to narrowly construe Elkins and to limit its effect to seizures by state officers. Appellant places reliance on Corngold v. United States, 367 F.2d 1 (9th Cir. 1966). It is true that in the Corngold case the airline transportation agent participated in the search and was advancing the interests of his employer in doing so. The court held that the evidence was inadmissible, but carefully pointed out that the search was a joint operation of the customs agent and the TWA employee. The court said: When a federal agent participates in such a joint endeavor, “the effect is the same as though he had engaged in the undertaking as one exclusively his own.” Byars v. United States, supra, 273 U.S. 28, at 33, 47 S.Ct. 248 at 250, 71 L.Ed. 520. 367 F.2d at 6 (footnote omitted). The court went on to quote Justice Frankfurter in Lustig v. United States, 338 U.S. 74, 78-79, 69 S.Ct. 1372, 1374, 93 L.Ed. 1819 (1949) as follows: [A] search is a search by a federal official if he had a hand in it x- -x- The decisive factor in determining the applicability of the Byars case is the actuality of a share by a federal official in the total enterprise of securing and selecting evidence by other than sanctioned means. 367 F.2d at 6. No such federal participation, direct or indirect, in the initial search is present in our case. Consequently, the initial search was a private one and therefore there is no room for a claim that the evidence here was inadmissible. It is true that following the encounter with Mrs. Stewart at the airport the officers had a practical control over the material. At that point, however, the court had issued its initial orders, and there was probable cause growing out of the search in Los Angeles for the issuance of the search warrant and the order to show cause. The officers promptly caused the carton to be taken before the United States District Court Judge and an adversary hearing followed. After hearing the evidence that judge made extensive findings and conclusions that the material was obscene. While it is true that expert testimony was not presented, the judge did not believe that this was necessary. He concluded that the material spoke for itself. We see no merit in the defendant’s contentions as to the manner of obtaining possession of the material and validity of the procedure followed. III. WHETHER THE DEFENDANT CAN REPUDIATE THE STIPULATION Defendant joined in a written stipulation that the material in question was obscene. He now raises a question as to whether this was proper, arguing that the issue is one of law. Undoubtedly the defendant so stipulated in order to avoid submission of the material to the jury. He wished to avoid the prejudice which would flow from the jury’s examination of the written and pictorial material which was described by the trial judge as hard core. To allow the defendant to reconsider this stipulation on appeal would be indeed bad practice, for his decision to enter into the stipulation and avoid the public prejudice was undoubtedly a considered judgment. To allow him to change his mind following a verdict of guilty would be unjust to the government. It is not accurate to say that the question is a matter of pure law. It is true that the judge must consider whether the constitutional issues enunciated in Roth v. United States, 354 U.S. 476, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957) are satisfied. Thereafter, however, the question is one of fact for the jury. It is also clear that stipulations of fact made by the government and the defendant are binding. See Spillman v. United States, 413 F.2d 527 (9 Cir.), cert. denied, 396 U.S. 930, 90 S.Ct. 265, 24 L.Ed.2d 228 (1969) (“The appellant cannot stipulate to obscenity in order to avoid having the jury view the films and then claim they are not really obscene within the definition or meaning of the statute.”); United States v. Rodriguez, 241 F.2d 463 (7th Cir. 1957) (A stipulation pertained to identity of the substance as marijuana and eliminated the necessity of evidence.); cf. Tomlinson v. Lefkowitz, 334 F.2d 262 (5 Cir. 1964), cert. denied, 379 U.S. 962, 85 S.Ct. 650, 13 L.Ed.2d 556 (1965). We are convinced that the defendant is bound by the stipulation which he entered. IV. The final point is whether the court erred in ruling that the government could, if the defendant testified in his own defense, ask him whether he had been convicted of a morals charge in 1953. As we view it, this matter rested in the sound discretion of the trial court. There was no apparent abuse of discretion. We have examined carefully the defendant’s points and authorities and are of the opinion that the judgment must be affirmed. . Secondary questions involve legality of a stipulation as to obscenity and possible error in ruling that a prior conviction could be shown.

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Caselaw Access Project

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BELL AEROSPACE COMPANY DIVISION OF TEXTRON INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. Nos. 351, 352, Docket 72-1703—72-1860. United States Court of Appeals, Second Circuit. Argued Jan. 17, 1973. Decided Feb. 28, 1973. Richard E. Moot, Buffalo, N. Y. (Ohlin, Damon, Morey, Sawyer & Moot, Buffalo, N. Y., of counsel), for petitioner. Jonathan G. Axelrod, Atty., N. L. R. B. (Peter G. Nash, General Counsel, Patrick Hardin, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Leonard M. Wagman, Atty., N. L. R. B., of counsel), for respondent. Before FRIENDLY, Chief Judge, and OAKES and TIMBERS, Circuit Judges. FRIENDLY, Chief Judge: I. A petition by the Bell Aerospace Company Division of Textron Inc. (Bell) to review and a cross-petition by the National Labor Relations Board to enforce a bargaining order, 187 N.L.R.B. No. 30 (1972), put in question the Board’s earlier order in a representation case, 190 N.L.R.B. No. 66 (1971), adhered to on a denial of reconsideration, 196 N.L.R.B. No. 127 (1972). The representation order found that 25 buyers in Bell’s Department 121 constituted an appropriate unit and directed an election, which was won by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Amalgamated Local 1286 (the Union). Bell refused to recognize the Union on the ground that the buyers were managerial employees and, as such, were not employees protected by §§ 7 and 8(a) of the National Labor Relations Act. There is not much dispute about the facts: The buyers have full discretion, without limit in dollar amount, in selecting prospective vendors, preparing invitations to bid, evaluating bids, negotiating prices and terms, and preparing purchase orders. They execute all purchase orders up to $50,000, although they must obtain the approval of a superior for any commitment exceeding $5,000. Many purchases are “off the shelf” items, which are made in quantity for the general public and can be purchased from a number of distributors or sources; many are not. In some instances other Bell employees (many of them organized) or a subcontractor will have tentatively selected a vendor, and the buyer must get approval before seeking a different one. For the Minute Man project, which represents about 70% of Bell’s sales, major decisions are made by a team consisting of supervisory type personnel from the engineering, quality assurance, manufacturing and finance departments; the buyer is team chairman and signs the purchase forms but a supervisor from pricing and negotiations participates in working out the terms. Once agreement is reached, the buyer is responsible for seeing that contracts are complied with and adjusting disputes. Where the amount is less than $5,000, the buyer has authority to cancel a contract and place the order with an alternate vendor. The case first came before the Board by transfer from the Regional Director in October, 1970. On May 20, 1971, a unanimous Board issued a direction of election, 190 N.L.R.B. No. 66, relying heavily on its recent decision in North Arkansas Electric Cooperative, Inc., 185 N.L.R.B. No. 83 (1970). North Arkansas concerned the discharge of one Len-ox, an “electrification advisor,” who had been discharged for failing to remain neutral during a union organizational campaign. On the Board’s application for enforcement of an earlier order requiring reinstatement, 168 N.L.R.B. 921 (1967), the Eighth Circuit held that the Board’s determination that Lenox was not a “managerial employee” was in error but remanded for determination whether his discharge was nevertheless in violation of the National Labor Relations Act, NLRB v. North Arkansas Electric Cooperative, Inc., 412 F.2d 324 (8 Cir. 1969). The Board, on remand, held that the Act’s protections extended to most managerial employees in general and to Lenox in particular, North Arkansas Electric Cooperative, Inc., supra, 185 N.L.R.B. No. 83. This disposed, as far as- the Board was concerned, of what had been Bell’s prime contention in the instant case, namely, that the buyers did not constitute an appropriate unit for collective bargaining within § 9(b) since they were managerial employees; the Board proceeded to reject the alternative contention “that buyers, whether considered managerial or not, are to be denied representation because there would exist a potential conflict of interest between the buyers as union members and the Employer” — notably by preferring unionized vendors and influencing ‘(make or buy” decisions in favor of “make,” thus creating additional work for sister unions in the plant. On the very day on which the Board certified the Union, the Eighth Circuit denied enforcement of the Board’s second order in NLRB v. North Arkansas Electric, 446 F.2d 602 (8 Cir. 1971). On the basis of a review of the legislative history of the Taft-Hartley Act, 446 F.2d at 605-608, and of court decisions with respect to application of the Act to “managerial employees,” the court held that Congress did not intend the word “employee” to embrace them. No application was made for certiorari. Predictably Bell moved for reconsideration, which the Board denied in another opinion, 196 N.L.R.B. No. 127 (1972). Disagreeing with the breadth of the Eighth Circuit’s opinion, the Board restated the position it had taken in North Arkansas. See fn.4 supra. It held that managerial employees were excluded from coverage only if they make “determinations which should be made free of any conflict of interest which could arise if the person involved was a participating member of a labor organization.” This category included not only “those concerned with management policies in the labor relations area,” but also those having “responsibility with respect to policies which are inextricably intertwined and of necessity affect or infringe upon the labor relations area.” It gave as an example “a corporate representative, charged with the duty of determining where an employer’s plants should be located or what capital expenditures a corporation ought to make” if he had “broad managerial discretion.” The same might be true of “those bearing primary responsibility for determination of- financial policies, or even those charged with the direction of basic policies in the field of research and development.” The Board emphasized that the question whether “the probabilities of such conflict are sufficiently minimal” was to be determined on the facts of each case. II. The issue here tendered must be considered in light of the confusing pattern of Board decisions before and after enactment of the Taft-Hartley Act in 1947, 61 Stat. 136 et seq., and the less than pellucid legislative history of the provision of that statute that is here relevant. The concept of the “managerial employee” seems to have first arisen in National Labor Relations Act cases in which either employers or unions argued for the exclusion from proposed larger bargaining units of certain employees with a close relationship to management. In Julian P. Friez & Sons, 47 N.L.R.B. 43, 47 (1943), the Board ruled that employees, who were charged with expediting the completion of orders and assuring adherence to production time schedules, were “closely related to the management,” and therefore should be excluded from a unit of production and maintenance employees. Expediters, who contacted vendors, placed orders, kept records of the progress of deliveries and had authority to reassign orders, were excluded from a unit of office, clerical, technical and professional employees in Spicer Manufacturing Corp., 55 N.L.R.B. 1491, 1498 (1944), because “the authority possessed by these employees to exercise their discretion in making commitments on behalf of the Company stamps them as managerial.” See also Rex Manufacturing Co., Inc., 7 N.L.R.B. 95, 99 (1938); Westinghouse Air Brake Co., 64 N.L.R.B. 547, 553 (1945); Electric Controller & Manufacturing Co., 69 N.L.R.B. 1242, 1245-1246 (1946). In a number of cases this principle was applied to buyers. See, e. g., Hudson Motor Car Co., 55 N.L.R.B. 509, 512 (1944); Vulcan Corp., 58 N.L.R.B. 733, 736 (1944); Barrett Division Allied Chem. & Dye Corp., 65 N.L.R.B. 903, 905 (1946). Shortly before enactment of the Taft-Hartley amendments, the Board summed up its position as regards “managerial employees” in Ford Motor Co., 66 N.L.R.B. 1317, 1322 (1946) (footnote omitted): We have customarily excluded from bargaining units of rank and file workers executive employees who are in a position to formulate, determine, and effectuate management policies. These employees we have considered and still deem to be “managerial,” in that they express and make operative the decisions of management. While the Board’s policy was clearly not to permit managerial employees to join units of rank and file personnel, the Board nonetheless viewed at least minor managerial employees as within the Act’s definition of “employee.” In an early decision, the NLRB, holding that a dispatcher was an “employee” and therefore protected by the Act against his employer’s unfair labor practices, said: [The employee’s] position as dispatcher . . was of a minor supervisory character. Although antiunion conduct of managerial or supervisory employees has been repeatedly held to be proof that the employer has engaged in unfair labor practices, it does not follow that managerial or supervisory employees are not employees within the meaning of Section 2(3) of the Act. The statutory definition is of wide comprehension. Atlantic Greyhound Corp., 7 N.L.R.B. 1189, 1196 (1938) (footnote omitted). And in Dravo Corp., 54 N.L.R.B. 1174 (1944), a case in which the Board excluded buyers and expediters from . a unit of office and clerical workers, it stated: Since the work of both buyers and expediters requires much greater initiative and more direct contact with outsiders, and is of a much more responsible nature than that of employees in categories which the parties would include in the unit, we are of the opinion that it would best serve the policies and purposes of the Act to exclude the buyers and expediters from the . . . unit. This is not to say, however that buyers and expediters are to be denied the right to self-organization and to collective bargaining under the Act. The precise relationship of the buyers and expediters to management here is not now being determined by us. Id. at 1177 (emphasis added). The Board took a somewhat different tack in Maryland Drydock Co., 49 N.L.R.B. 733 (1943), where it found that a separate union of supervisory personnel would not constitute an appropriate unit for collective bargaining, although still insisting that a supervisor was an “employee” as defined by the Act, id. 737-738. See Packard Motor Co., 64 N.L.R.B. 1212, 1214 (1945) (Herzog, Chairman, concurring); Packard Motor Co. v. NLRB, 330 U.S. 485, 492 n.3 (1947). Similarly, in Yale & Towne Manufacturing Co., 60 N.L.R.B. 626 (1945), overruled in other respects, Ford Motor Co., supra, 66 N.L.R.B. at 1322 n.12, the Board found the interests of certain time-study employees were sufficiently akin to those of management that the employees “should neither be included in a unit with other employees, nor established as a separate unit.” Id. at 628-629. Maryland Drydock was overruled in Packard Motor Co., 61 N.L.R.B. 4, 64 N.L.R.B. 1212 (1945), and the Board’s decision that foremen were “employees” whom the Act entitled to form their own union was approved by the Supreme Court, Packard Motor Co. v. NLRB, supra, 330 U.S. 485, 67 S.Ct. 789, 91 L.Ed. 1040, aff’g 157 F.2d 80 (6 Cir. 1946). Since an important purpose of Congress in passing the Taft-Hartley amendments was to overturn that decision, see H.R. Rep.No.245, 80th Cong., 1st Sess. 13-14, 17 (1947) and S.Rep.No.105, 80th Cong., 1st Sess. 3-5 (1947), the dissenting opinion in Packard is more than ordinarily important. Mr. Justice Douglas, joined by Chief Justice Vinson and Justice Burton, there wrote, 330 U.S. at 494, 67 S.Ct. at 794: For if foremen are “employees” within the meaning of the National Labor Relations Act, so are vice-presidents, managers, assistant managers, superintendents, assistant superintendents —indeed, all who are on the payroll of the company, including the president; all who are commonly referred to as the management, with the exception of the directors. If a union of vice-presidents applied for recognition as a collective bargaining agency, I do not see how we could deny it and yet allow the present application. Arguing that, when Congress desired to include supervisory personnel in a category of employees, it knew how to do so, he called attention to other statutes in pari materia which, unlike the National Labor Relations Act, defined “employee” to include a “subordinate official,” Railway Labor Act of 1926, 44 Stat. 577; Merchant Marine Act of 1936, 52 Stat. 953, 966. As indicated, the introduction of H.R.3020 in 1947 represented, in part, a reaction to the holdings in the Packard Motor Co. decisions that supervisory personnel constituted an appropriate unit for collective bargaining. The Bill excluded from the definition of employees not only those traditionally defined by the Board as supervisors, namely, those employees with power to hire, transfer, promote, discharge, reward, or discipline other employees, or to effectively recommend such action, see Ford Motor Co., 66 N.L.R.B; 1317, 1325 (1946) and S.Rep.No.105, supra, at 4, but also (1) personnel who fix or make effective recommendations with respect to the amount of wages earned by other employees, and those who make effective recommendations with respect to the application of factors upon which wages are determined, (2) labor relations, time-study, police and guard personnel, and (3) confidential employees. The Bill defined the latter as any employee “who by the nature of his duties is given by the employer information that is of a confidential nature, and that is not available to the public, to competitors, or to employees generally, for use in the interest of the employer.” The Committee Report accompanying the bill expressed concern over evidence that in those plants where foremen had been permitted to organize, more work stoppages occurred and productivity dropped. H.R.Rep.No.245, supra, at 14-15. The definition of supervisor contained in the Senate bill, S.1126, was more narrowly drawn, paralleling that which had been established by the Board: The term “supervisor” means any individual having authority, in the interest of the employer to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or to adjust their grievances, or effectively to recommend such action if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment. But while the Senate Committee was concerned with distinguishing between supervisors vested with “genuine management prerogatives,” such as the power to hire, fire, or discipline other employees, and minor supervisors such as “straw bosses, leadmen, [and] set-up men,” it expressed the same concerns that had been voiced by the House Committee over the granting of the Act’s protections to supervisory personnel. S.Rep.No.105, supra, at 4-5. The Senate Committee felt that the organization of supervisors had upset the balance of power between labor and management, id. at 3, and it wished to prevent conflicts of interest, resulting in lower productivity, less discipline, and a correspondingly higher industrial accident rate, id. at 4-5. The Committee’s Report, S.Rep.No.105, supra, at 4, also reflected a desire to prevent the possibility, mentioned in Justice Douglas’ dissent in Packard Motor Co. v. NLRB, supra, 330 U.S. at 494, 67 S.Ct. 789, 91 L.Ed. 1040, that the Supreme Court’s reasoning in that ease could be used to justify the unionization of vice-presidents. The Conference Committee agreed to accept the Senate’s definition of supervisors. With reference to those additional employees who had been included within the House but not within the Senate definition, the Report stated: In the case of persons working in the labor relations, personnel and employment departments, it was not thought necessary to make specific provision, as was done in the House bill, since the Board has treated, and presumably will continue to treat, such persons as outside the scope of the act. This is the prevailing Board practice with respect to such people as confidential secretaries as well, and it was not the intention of the conferees to alter this practice in any respect. The conference agreement does not treat time-study personnel or guards as supervisors, as did the House bill. Since, however, time-study employees may qualify as professional personnel, the special provisions of the Senate amendment (hereafter discussed) applicable with respect to professional employees will cover many in this category. In the case of guards, the conference agreement does not permit the certification of a labor organization as the bargaining representative of guards if it admits to membership, or is affiliated with any organization that admits to membership, employees other than guards. H.R.Conf.Rep.No.510, 80th Cong., 1st Sess. 35-36 (1947). The best we can make of this history is as follows: The Senate had been persuaded that the House definition would have barred from the protection of the Act too many people who should be within it. But neither the Senate, nor the House in yielding to it, thought the exclusion would be limited to persons precisely fitting the Act’s definition of “supervisor.” It is quite clear — and the Board does not challenge this — that Congress believed “persons working in the labor relations, personnel and employment departments” would be excluded. However, our sense of the situation is that Congress recognized there were other persons so much more clearly “managerial” that it was inconceivable that the Board would treat them as employees. Surely Congress could not have supposed that, while “confidential secretaries” could not be organized, their bosses could be. In other words, Congress failed to enact the portion of Mr. Justice Douglas’ Packard dissent relating to the organization of executives, not because it disagreed but because it deemed this unnecessary. After passage of the Taft-Hartley amendments, the Board at first continued its previous practice of simply excluding “managerial employees” from units of rank and file employees. For example, in Denver Dry Goods Co., 74 N.L.R.B. 1167 (1947), assistant buyers, who were required to set good sales records as examples to other employees, assist buyers in various matters such as the selection of merchandise, and take over the buyers’ duties when the latter were absent, were excluded from a unit of sales, clerical and office employees, because their interests were “more closely identified with those of management.” The Board stated its policy in Palace Laundry Dry Cleaning Corp., 75 N.L.R.B. 320, 323 n.4 (1947), a case in which the Board refused to exclude store managers from a store-wide bargaining unit because they were neither managerial nor supervisory employees: We have in the past, and before the passage of the recent amendments to the Act, recognized and defined as “managerial” employees, executives who formulate and effectuate management policies by expressing and making operative the decisions of their employer, and have excluded such managerial employees from bargaining units. . . . We believe the Act, as amended, contemplates the continuance of this practice. The same policy was followed with respect to buyers in Denton’s Inc., 83 N. L.R.B. 35, 37 (1949). In the 1950’s the Board went further. In American Locomotive Co., 92 N.L.R. B. 115 (1950), a case in which buyers were excluded from an office and clerical unit because they were authorized to negotiate for credit and to make substantial purchases for their employer, the Board said that, since they were managerial employees, the buyers could “not be accorded bargaining rights under the Act.” Id. at 117. Then in 1956, the Board, finding a separate unit of procurement drivers, who kept supplies of produce coming into their employer’s plant and exercised discretion in meeting competitors’ prices, to be an inappropriate unit for collective bargaining because their interests were “allied with management,” Swift & Co., 115 N.L.R.B. 752, stated: It was the clear intent of Congress to exclude from the coverage of the Act all individuals allied with management. Such individuals cannot be deemed to be employees for the purposes of the Act. Id. at 753-754 (footnote omitted). Such was the Board’s announced understanding with respect not only to “managerial employees” generally but also to buyers specifically when Congress again extensively amended the National Labor Relations Act in 1959, 73 Stat. 519 et seq. The effect to be given such a history is a delicate and difficult question. Cf. Francis v. Southern Pacific Co., 333 U.S. 445, 450, 68 S.Ct. 611, 92 L.Ed. 798 (1948). Viewing more than thirty years of failure by the Federal Trade Commission to assert power over intrastate acts of unfair competition because of their adverse effect on interstate commerce, the Court refused, in FTC v. Bunte Brothers, Inc., 312 U.S. 349, 61 S.Ct. 580, 85 L.Ed. 881 (1941), to sanction any such power, despite the famous contrary precedent with respect to the Interstate Commerce Commission in the Shreveport Case, [Houston East and West Texas R. Co. v. United States], 234 U.S. 342, 58 L.Ed. 1341 (1914). Mr. Justice Frankfurter wrote, 312 U.S. at 352, 61 S.Ct. at 582: Authority actually granted by Congress of course cannot evaporate through lack of administrative exercise. But just as established practice may shed light on the extent of power conveyed by general statutory language, so the want of assertion of power by those who presumably would be alert to exercise it, is equally significant in determining whether such power was actually conferred. On the other hand, again speaking for the Court, the same Justice said, in NLRB v. Seven-Up Bottling Co. of Miami, Inc., 344 U.S. 344, 351-352, 73 S.Ct. 287, 291, 97 L.Ed. 377 (1953), with respect to a post-Taft-Hartley change, in F. W. Woolworth Co., 90 N.L.R.B. 289 (1950), in the method of computing back pay: Assuming Congress was aware of the Board’s pre-Woolworth practice of calculating back pay on the basis of the entire period from discharge to offer of reinstatement, we could say here, as we did in Gullett Gin Co. v. N.L.R.B., [340 U.S. 361, 366, 71 S.Ct. 337, 95 L.Ed. 337 (1951)] that Congress by its reenactment indicated its agreement that the Board’s practice was authorized. That leads us nowhere on the present issue, though it is only this far that what we said in Gullett Gin can lead us. In that case as here, again assuming notice, if Congress was satisfied that the Board was acting within its powers, the thing for it to do was what it did — reenact without change. In that case as here— though, of course, we had no occasion to say so in that case — if Congress had been more than satisfied with the Board’s practice, if it had wanted to be certain that the Board would not in future profit by its experience, it would have had to do more than it did; it would have had to change the language of the statute, so as to take from the Board the discretionary power to mould remedies suited to practical needs which we had declared the Board to have and which the Board was asserting and exercising. We cannot infer an intent to withdraw the grant of such power from what is at most a silent approval of specific exercises of it. Perhaps the best reconciliation of these eminently sensible although seemingly contrary approaches is that when an administrative construction has been long in effect, the agency cannot make a big change, especially after a reenactment or substantial amendment, but can make smaller ones. The conclusion we reach from all of the foregoing is this: The 1947 Congress clearly believed that at least some “managerial employees” other than “supervisors” were excluded from the protections of the Act. In 1956 the Board concluded that the Congress had meant to exclude all true “managerial . employees.” This exclusion embraced not only an employee “so closely related to or aligned with management as to place the employee in a position of conflict of interest between his employer on the one hand and his fellow workers on the other” but also one who is “formulating, determining and effectuating his employer’s policies or has discretion, independent of an employer’s established policy, in the performance of his duties,” Illinois State Journal-Register, Inc. v. NLRB, 412 F.2d 37, 41 (7 Cir. 1969). Both because of what we believe to have been the understanding of the 1947 Congress and because the Board’s interpretation of it had been so clearly defined for the 1959 Congress, the Board is not now free to decide the contrary. In this respect we follow the illuminating opinion of Judge Craven, dealing with a confidential secretary, in NLRB v. Wheeling Electric Co., 444 F.2d 783 (4 Cir. 1971), and the Eighth Circuit’s decision in North Arkansas Electric, supra, 446 F.2d 602, although we do not agree with everything said in the latter case. On the other hand, despite the series of decisions, see fn.11, typified by Swift & Co., supra, 115 N.L.R.B. 752, we do not think the Board would be precluded, on proper proceedings, from determining that buyers, or some types of buyers, are not true “managerial employees” and consequently come within the protection of § 8(a)(5) and (1). III. It might seem that this conclusion would lead to the grant of enforcement here, since there was substantial evidence that Bell’s buyers were not sufficiently high in the hierarchy to constitute “managerial employees,” as that term has been defined not only in Illinois State Journal-Register v. NLRB, supra, but also in such other cases as International Ladies’ Garment Workers’ Union v. NLRB, 339 F.2d 116, 123 (2 Cir. 1964) (Marshall, J.); Retail Clerks International Association v. NLRB, 125 U.S.App.D.C. 63, 366 F.2d 642, 644-645 (1966), cert. denied, 386 U.S. 1017, 87 S.Ct. 1373, 18 L.Ed.2d 455 (1967) (Burger, J.); and Westinghouse Electric Corp. v. NLRB, 424 F.2d 1151, 1158 (7 Cir.), cert. denied, 400 U.S. 831, 91 S.Ct. 63, 27 L.Ed.2d 62 (1970) (Fairchild, J.). See also Continental Ins. Co. v. NLRB, 409 F.2d 727, 730 (2 Cir.), cert. denied, 396 U.S. 902, 90 S.Ct. 215, 24 L.Ed.2d 178 (1969). It does not, for two reasons: The first is that we cannot be sure that the Board’s decision rested on such a factual determination rather than on its new and, in our view, erroneous holding that it was free to regard all managerial employees as covered by the Act unless their duties met the “fundamental touchstone" of including “determinations which should be made free of any conflict of interest which could arise if the person involved was a participating member of a labor organization,” see fn.6 supra. This requires reversal and remand under the first decision in SEC v. Chenery Corp., 318 U.S. 80, 95, 63 S.Ct. 454, 87 L.Ed. 626 (1943), recently reaffirmed in FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 249, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972). The second is that, while the Board was not precluded from reversing itself on the position that buyers, or some buyers, were not “managerial employees,” we hold that, particularly in light of the justified contrary belief the Board had engendered, it could not do this in the manner that was done here. This is an appropriate case in which to give effect to the Supreme Court’s observation in the second Chenery decision, 332 U.S. 194, 202, 67 S.Ct. 1575, 1580, 91 L.Ed. 1995 (1947), largely disregarded by the Board for a quarter century: The function of filling in the interstices of the Act should be performed, as must as possible, through this quasi-legislative promulgation of rules to be applied in the future. Such a holding is also in line with the considered dicta in NLRB v. Wyman-Gordon Co., 394 U.S. 759, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969). Although the precise issues in Wyman-Gordon were whether a direction made in a previous decision, Excelsior Underwear Inc., 156 N.L.R.B. 1236 (1966), that was to apply prospectively only, in fact constituted rule-making, which, if such, clearly had not been accomplished as provided in section 4 of the APA, and, if so, whether this invalidated an order, based on the prior decision, in a subsequent adjudicative proceeding, expressions by a majority of the Justices point against the procedure the Board followed here. The plurality opinion of Mr. Justice Fortas, joined by the Chief Justice, Mr. Justice Stewart and Mr. Justice White, emphasized, 394 U.S. at 764, 89 S.Ct. at 1429: The rule-making provisions of that Act, which the Board would avoid, were designed to assure fairness and mature consideration of rules of general application. . . . They may not be avoided by the process of making rules in the course of adjudicatory proceedings. Mr. Justice Douglas, dissenting from the holding that the Board’s violation in Excelsior had been cured in Wyman-Gordon because the rule adopted in Excelsior was being applied as part of a later adjudicative order, said this, 394 U.S. at 777-779, 89 S.Ct. at 1435 (footnote omitted): A rule like the one in Excelsior is designed to fit all cases at all times. It is not particularized to special facts. It is a statement of far-reaching policy covering all future representation elections. It should therefore have been put down for the public hearing prescribed by the Act. The rule-making procedure performs important functions. It gives notice to an entire segment of society of those controls or regimentation that is forthcoming. It gives an opportunity for persons affected to be heard. . Agencies discover [through rule-making proceedings] that they are not always repositories of ultimate wisdom; they learn from the suggestions of outsiders and often benefit from that advice. I would hold the agencies governed by the rule-making procedure strictly to its requirements and not allow them to play fast and loose as the National Labor Relations Board apparently likes to do. Mr. Justice Harlan, likewise dissenting, after pointing to the Board’s decision to apply the Excelsior rule only prospectively as implying that it was “such a departure from pre-existing understandings that it would be unfair to impose the rule upon the parties in pending matters,” 394 U.S. at 780-781, 89 S.Ct. at 1437, continued: [I]t is precisely in these situations, in which established patterns of conduct are revolutionized, that rule-making procedures perform the vital functions that my Brother Douglas describes so well in a dissenting opinion with which I basically agree. Either the rule-making provisions are to be enforced or they are not. Before the Board may be permitted to adopt a rule that so significantly alters pre-existing labor-management understandings, it must be required to conduct a satisfactory rule-making proceeding, so that it will have the benefit of wide-ranging argument before it enacts its proposed solution to an important problem. Despite all this, Wyman-Gordon does not supply a bright line for determining just when the Board, or other agencies, must proceed by rule-making. See Bernstein, The NLRB’s Adjudication-Rule Making Dilemma Under the Administrative Procedure Act, 79 Yale L.J. 571 (1970). Certainly the decision does not proscribe the use of adjudication as a vehicle for the formulation of new agency policies, which “are applied and announced therein” and “generally provide a guide to action that the agency may be expected to take in future cases.” 394 U.S. at 765-766, 89 S.Ct. at 1429 (Fortas, J.). But if the statements quoted from the opinions of six Justices in Wyman-Gordon are to mean anything, they must be read as demanding rule-making here, and given the Board’s long-standing negative attitude, as requiring a court to order it. The Board was prescribing a new policy, not just with respect to 25 buyers in Wheatfield, N. Y., but in substance, to use Mr. Justice Douglas’ phrase, “to fit all cases at all times.” 394 U.S. at 777, 89 S.Ct. at 1435. There must be tens of thousands of manufacturing, wholesale and retail units which employ buyers, and hundreds of thousands of the latter. Yet the Board did not even attempt to inform industry and labor organizations, by means providing some notice though not in conformity with section 4, of its proposed new policy and to invite comment thereon, as it has sometimes done in the past, see Peck, The Atrophied Rule-Making Powers of the National Labor Relations Board, 70 Yale L.J. 729, 756-757 (1961) and did in Excelsior, 156 N.L.R.B. at 1238, without thereby satisfying the Supreme Court, 394 U.S. at 764, 89 S.Ct. 1426. Although policy-making by adjudication often cannot be avoided in unfair labor practice cases, since the parties have already acted and the Board must decide one way or the other, there is no such problem in a representation case. Finally, the argument for rule-making is especially strong when the Board is proposing to reverse a long-standing and oft-repeated policy on which industry and labor have relied. To be sure, the change of policy here in question did not expose an employer to new and unexpected liability, as it would have done in NLRB v. Majestic Weaving Co., Inc., 355 F.2d 854, 859-861 (2 Cir. 1966). The point rather is that when the Board has so long been committed to a position, it should be particularly sure that it has all available information before adopting another, in a setting where nothing stands in the way of a rule-making proceeding except the Board’s congenital disinclination to follow a procedure which, as said in Texaco, Inc. v. FPC, 412 F.2d 740, 744 (3 Cir. 1969), “enables the agency promulgating the rule to educate itself before establishing rules and procedures which have a substantial impact on those regulated,” despite the Court’s pointed admonitions. The petition to review is granted and enforcement is denied to the extent that the cause is remanded to the Board for further proceedings consistent with this opinion. No costs. . Despite this limitation, the amount of company credit which a buyer can commit on his own authority is very substantial. For one buyer this was $1,351,983 in a 19-month period; during the same period, the aggregate amount of credit committed by the buyers without higher approval was $7,671,172. . Supervisors are excluded from the National Labor Relations Act’s definition of employee. See 29 U.S.C. § 152(3). Supervisors are defined as “having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” Id. § 152(11). . The court, convinced that had the question of Lenox’s managerial status arisen in the context of a representation proceeding, the Board, in accordance with its prior decisions, would have excluded him from the bargaining unit as a “managerial employee,” said that t;he Board could not “irrespective of the illegality or unfairness of the discharge, be permitted to reach a different result because the question is presented in the context of unfair labor practice.” 412 F.2d at 328. However, in remanding to the Board, the court left open the question whether a “managerial employee,” while normally excluded from bargaining units of rank and file employees, might under some circumstances be protected from his employer’s unfair labor practices. Id. at 325. . The Board’s rationale was that an employee might be “managerial” insofar as he did not have “the requisite community of interest” with other employees to be included with them in a proposed unit, yet might still fall within the Act’s definition of employee and therefore be entitled to its protections. At the same time, however, the Board indicated that certain categories of managerial personnel would not be considered within the definition of employee and therefore not receive any of the Act’s protections — namely, those employees who participated in formulating, determining or effectuating policy with respect to employee relation matters, who had apparent authority in that area, or who had a conflict of interest between proper performance of their jobs and their right to engage in concerted activity. The Board found that Lenox did not fit into any of these categories. In footnote 8 of its decision, the Board overruled Swift & Co., 115 N.L.R.B. 752 (1956), to the extent that it was inconsistent with its views. See discussion, infra. . Although the Board in North Arkansas Electric Cooperative, Inc., supra, 185 N.L.R.B. No. 83, had indicated a continued adherence to its policy of excluding managerial employees from bargaining units of rank and file personnel because of a lack of “community of interest,” the Board, in the instant case, apparently felt that no such consideration opposed formation of a separate unit of buyers. . The decision does not make clear whether the Board regarded the buyers as managerial employees. Footnote 2 shows that Member Jenkins thought they weren’t but Member Kennedy thought they were. Footnote 3 indicates that the three other members also thought the latter. . The court rejected the Board’s attempt to reformulate the definition of “managerial employee,” and decried any notion that an employee could be considered within the Act’s definition of “employee” for the purpose of being protected from firing by his employer for participating in union activity but not for the purpose of organization in a proper bargaining unit. 446 F.2d at 609-610; see n. 4 supra. . The definition contained in S. 1126 had been modified slightly by the Senate. The Senate agreed to an amendment proposed by Senator Flanders which added the phrase “or responsibly to direct them.” See 93 Cong.Rec. 4677-4678 (1947) ; n. 2 supra. The Senate had rejected an amendment to S. 1126, proposed by Senator Langer, that would have replaced the “supervisor” exclusion with an exclusion for “an assistant superintendent or superintendent, or any individual occupying a higher supervisory status than assistant superintendent.” 93 Cong.Rec. 5117 (1947). A superintendent would have been defined as “any individual who, within power directly delegated by an owner, president, or board of directors, directs, controls, and administers a specific institution, plant, or function and is responsible for the successful outcome of the undertaking, and who works through assistants or subordinate foremen,” and “assistant superintendent” as “any individual having authority to regularly assist a superintendent by performing essentially the same duties as the superintendent.” Id. Although this definition of superintendent bears some resemblance to the definition of “managerial employee” that has been developed by the Board, the Senate’s rejection of this amendment should not be viewed as a rejection of the managerial employee exception. Since the effect of this amendment would have been to permit employees of supervisory status lower than assistant superintendents, such as foremen, to organize, rejection of this amendment is more easily explained by a desire to expand the definition of supervisor to include employees such as foremen than by a desire to treat superintendents and their assistants as employees. See 93 Cong.Rec. 5116 (remarks of Sen. Taft opposing the proposed amendment). . The report was submitted to both houses. 93 Cong.Rec. 6361, 6434 (1947). . We think that when the Conference Report referred to “confidential secretaries,” it used that term with the same meaning which I-I.R. 3020, as reported, had spelled out for “confidential employees,” even though in 1946, the Board had narrowed its definition of confidential employees to those “who exercise ‘managerial’ functions in the field of labor ralations.” Ford Motor Co., 66 N.L.R.B. 1317, 1322. . In many other cases the Board excluded buyers from units of rank-and-file employees on the ground that they were “managerial” since they could effectively commit their employer’s credit. For example: The duties of the assistant purchasing agent and the buyer include, among others, the placing of orders for various items of supplies and equipment. It appears that they effectively bind the Employer’s credit in the regular course of their work. In accordance with established Board practice, we find these employees are managerial employees, and we shall therefore exclude them from the unit. Florence Stove Co., 98 N.L.R.B. 16, 17 (1952) (footnote omitted). See also Howard-Cooper Corp., 105 N.L.R.B. 753, 754 (1953); American Lithofold Corp., 107 N.L.R.B. 1061, 1063 (1954); Temco Aircraft Corp., 121 N.L.R.B. 1085, 1089 (1958); Weaver Motors, 123 N.L.R.B. 209, 215-216 (1959); Ed’s Foodland of Springfield, Inc., 159 N.L.R.B. 1256, 1260 (1966). In other cases, the Board has done this on the basis of more specific findings about the buyer’s powers. See Mack Trucks, Inc., 116 N.L.R.B. 1576, 1577-1578 (1956); Kearney & Trecker Corp., 121 N.L.R.B. 817, 822 (1958); Federal Tel. and Radio Co., 120 N.L.R.B. 1652, 1653-1654 (1958); Albuquerque Division, ACF Industries, Inc., 145 N.L.R.B. 403, 414-415 (1963). . We are also not unmindful that it “is at best treacherous to find in Congressional silence alone the adoption of a controlling rule of law.” Girouard v. United States, 328 U.S. 61, 69, 66 S.Ct. 826, 830, 90 L.Ed. 1084 (1946) (emphasis supplied), quoted in Boys Markets, Inc. v. Local 770, Retail Clerks Union, 398 U.S. 235, 241-242, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970). . Congress may have misapprehended the Board’s pre-1947 practice with regard to confidential employees. As indicated in the case cited in fn. 10, the Board had apparently excluded such employees from bargaining units of rank and file personnel but had not ruled that they were unprotected by the Act. Thus, when the Conference Committee stated that the Board had treated these employees “as outside the scope of the act,” it may have been in error. Nevertheless, since Congress’ reason for not expanding the definition of supervisor was its belief that existing Board practices made this unnecessary, that intent should be given effect. See NLRB v. Wheeling Elec. Co., 444 F.2d 783 (4 Cir. 1971). . At argument we asked counsel for the Board to advise us in writing whether it had ever engaged in the rule-making on substantive matters contemplated by § 4 of the Administrative Procedure Act, 5 U.S.C. § 553. In a memorandum dated February 12, 1973, counsel advised us that the Board has recently concluded one such proceeding by promulgating a standard for the exercise of jurisdiction over private colleges and universities, 35 Fed. Beg. 18370 (1970) and 29 C.F.B. § 103.1. Also in the summer of 1972 the Board published notices of proposed rule-making on the questions whether to assert jurisdiction over the horseracing and dogracing industries and over symphony orchestras and, if so, what the standard should be. 37 Fed.Beg. 14242, 16813. , While nominally this comes before us as an unfair labor practice case, in substance the attack is on the Board’s decision, unreviewable at the time, in the representation proceeding. . Although Swift & Co., 115 N.L.R.B. 752 (1956), may be the only case in which the Board had squarely held that buyers were not entitled to organize in a union separate from rank-and-file employees, the reasoning of the many decisions in fn. 11 necessarily led to that result so long as the Board classified almost all buyers ns “managerial employees.” A number of the decisions that have upheld the Board’s reversing prior decisions in adjudicative proceedings have been in situations where the Board has merely prescribed a stricter remedy. See, e. g., NLRB v. A.P.W. Products Co., 316 F.2d 899, 905 (2 Cir. 1963) (retroactively overruling decisions that back pay awards are tolled by examiner’s finding of non-violation); cf. International Union of Elec., Radio and Mach. Workers, 138 U.S.App.D.C. 249, 426 F.2d 1243, cert. denied, Tiidee Products Inc. v. International Union of Elec., Radio and Mach. Workers, 400 U.S. 950, 91 S.Ct. 239, 27 L.Ed.2d 256 (1970); H. & F. Binch Co. Plant of Native Laces v. NLRB, 456 F.2d 357, 364-365 (2 Cir. 1972) (enlarging reinstatement rights of economic strikers). . In the Binch case, supra note 16, we sustained retroactive application of the Board’s decision in The Laidlaw Corporation, 171 N.L.R.B. No. 172 (1968), enforced, 414 F.2d 99 (7 Cir. 1969), cert. denied, 397 U.S. 920, 90 S.Ct. 928, 25 L.Ed.2d 100 (1970), mainly because it had been presaged by an earlier Supreme Court decision. . In March 1970 Professor Bernstein proposed “a two-year moratorium on APA rule-making requirements, during which the Board and its special public canvass their alternatives and seek suitable adjustments.” Supra, 79 Yale L.J. at 620-21. Nearly three years have passed, without significant result.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Alfred WILSON et al., Plaintiffs, Appellees, v. NOOTER CORPORATION, Defendant and Third-Party Plaintiff, Appellant, v. The H. K. FERGUSON COMPANY, Third-Party Defendant, Appellee. No. 72-1308. United States Court of Appeals, First Circuit. Heard Dec. 6, 1972. Decided March 13, 1973. Martin L. Gross and John C. Ransmeier, Concord, N. H., with whom Sulloway, Hollis, Godfrey & Soden, Concord, N. H., was on brief, for appellant. Kurt M. Swenson and Dort Bigg, Manchester, N. H., with whom Wiggin, Nourie, Sundeen, Pingree & Bigg, Manchester, N. H., was on brief, for Alfred Wilson and Robertina Wilson, appellees. Joseph F. Devan, Manchester, N. H., with whom Sheehan, Phinney, Bass & Green, Manchester, N. H., was on brief, for The H. K. Ferguson Company, appellee. Before ALDRICH, McENTEE and CAMPBELL, Circuit Judges. . Cf. Nepstad v. Lambert, 235 Minn. 1, 50 N.W.2d 614 (1951); Kessler v. Bates & Rogers Construction Co., 155 Neb. 40, 50 N.W.2d 553 (1951). CAMPBELL, Circuit Judge. Appellee Ferguson was the general contractor for the construction of a brewery in Merrimack, New Hampshire. Appellant Nooter, a boilermaker, was the sub-contractor in charge of erecting a large vat. Appellee Wilson, a brick mason and Ferguson employee, was injured when Ferguson’s crane, operated by a Ferguson employee, snagged a cable holding up ' the scaffold upon which Wilson worked. Nooter had called in the crane to lift a heavy beam from the building which housed the vat. Wilson and his wife sued Nooter in the district court; Nooter brought a third-party complaint against Ferguson for indemnity. Trial was before a jury of six, as required for civil cases by the district court’s local rule 30. At the close of all the evidence on liability, the court directed verdicts for Wilson and his wife against Nooter, and for Ferguson against Nooter. The jury then assessed damages. Nooter has appealed. The principal issue is whether the district court erred in withholding from the jury the question whether Ferguson’s employees operating the crane had become Nooter’s borrowed servants, such that Nooter was liable for their negligence, if any, as well as for any negligence on the part of its own employees. On this question, New Hampshire law applies. Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). We hold that the question should have been submitted to the jury, and accordingly remand for a new trial on liability. Nooter, which owned cranes but had no crane at the job site, at times used a Ferguson crane, paying therefor by accepting a back charge from Ferguson. The crane operator and the oiler (who cleaned the machine and assisted the operator) were both Ferguson employees, subject to discharge and paid by Ferguson. Nooter could, however, reject an operator if not satisfied with him. On the present occasion, Nelson, an assistant foreman for Nooter, had asked Hall, a licensed crane operator in Ferguson’s employ, to bring the crane at his convenience to lift the heavy steel beam. One or two days thereafter, Hall, accompanied by his oiler, Bugay, appeared at the site in the crane, valued at $65,000, with a 100-foot boom and a 50-ton lifting capacity. The boom could be raised or lowered and moved laterally. The beam was lying on the third floor near the easterly side of the building. The east wall was in the process of completion, and the beam had to be removed while access remained. Wilson was working on the east wall from a scaffold suspended by vertical cables fastened to the beams of the roof of the building. The cables were hung in pairs, the cable nearer the wall supporting the inner edge of the platform, the outer cable supporting the outer edge. The pairs were spaced five to eight feet apart along the scaffold. The space between the pairs of cables was called a “bay”. Nelson pointed out to Hall where the boom had to go to make the hoist. Its tip had to be inserted through a bay. Hall decided where to place the crane, positioning it as close to the building as possible. The oiler, Bugay, directed Hall as he swung the boom down to clear the overhang of the roof. (Bu-gay’s attention thereafter was distracted, and he did not see the events following.) Then Hall, following signals from Nelson, who was on the third floor, lowered the boom so that its tip was in the bay. Hall could not see the beam from the cab, although it could be inferred that he could see Wilson, the scaffold, and its supporting cables. About 2Vá feet separated the boom from the cables on either side of it. Hall did not lock the boom to prevent sideways motion, although he could have done so. Nelson signaled Hall to lower the hoisting cable, and, with another Nooter employee, Beatty, attached the hook on the cable to the beam. Nelson then signaled for short hoists so that the beam could be properly positioned to be lifted from the building. Finally, Nelson signaled Hall to raise the boom to lift the beam out. He gave no signal for lateral motion of the boom. As the tip of the boom came put of the bay, a protruding pin on the side of the boom snagged one of the scaffold support cables, pulling the scaffold away from the building. Wilson, standing on the scaffold, hung onto the wall. The cable came free of the boom, the scaffold swung back, and struck and injured Wilson. The entire operation had consumed about two hours. The district court, in directing a verdict for Wilson and for Ferguson, ruled as a matter of law that at the time of the accident, Hall and the oiler were borrowed servants of Nooter, making Nooter responsible for any negligence, in whole or in part, that may have contributed to the accident. It emphasized that “as a matter of law” they were acting under Nooter’s direction and control, so that even if one or both were found wholly responsible for the accident, Nooter would still be liable. Borrowed servant law is extraordinarily troublesome. See generally T. Smith, “Scope of the Business: The Borrowed Servant Problem,” 38 Mich.L.Rev. 1222 (1940). In New Hampshire, the “fundamental test” for determining liability for the negligence of a general employer’s servant doing work for another is “who exercised the ‘right of control over the performance of that work to the extent of prescribing the manner in which it is to be executed.’ ” Currier v. Abbott, 104 N.H. 299, 304, 185 A.2d 263, 267 (1962), citing Restatement of Agency 2d §§ 220(1), 227. See also Hunter v. R. G. Watkins & Son, Inc., 110 N.H. 243, 246, 265 A.2d 15, 17 (1970) (dictum). Right of control is determined, according both to the New Hampshire cases and to the Restatement, which they cite, as a “question of fact” (Restatement, § 227) by marshalling and weighing a variety of factors, no one of which is controlling and all of which are to be considered. Several of the factors recognized in the New Hampshire cases, and in the Restatement, could lead a jury to conclude that the right to control remained in Ferguson. Hall operated a machine of considerable value and complexity; where, during the job, the interests of Nooter conflicted with those of Ferguson, it might be expected that Hall would protect Ferguson’s interests in the use of the machine. Hall and Bugay remained subject to discharge only by Ferguson, and only Ferguson could substitute other operators for them. The period of hire was brief. Hall decided where to place the crane, and Hall and Bugay on their own lowered the boom under the roof overhang. Hall, a licensed operator, had the skill of a specialist, making decisions such as whether to lock the boom to prevent sideways motion. See generally Golding-Keene Co. v. Fidelity-Phenix Fire Insurance Co., 96 N.H. 64, 70, 69 A.2d 856, 860 (1949); Restatement of Agency 2d § 227, comment c. Other, admittedly not inconsiderable, factors suggest a shift of the right to control to Nooter. Thus, Nooter’s man, Nelson, told Hall where to place the boom, and directed Hall in the lifting of the beam. During the part of the job most directly connected with the accident, Hall, unable to see the beam, acted in response to Nelson’s signals. That Ferguson was not in the business of renting cranes but merely permitted (though not gratuitously) Nooter to use the crane would support an inference that Ferguson intended to surrender control. See generally Currier v. Abbott, supra, 104 N.H. at 303-304, 185 A. 2d at 266-267; Restatement of Agency 2d § 227, comments c and d. The balance of factors is further complicated by the rule, “There is no inference that because the general employer has permitted a division of control, he has surrendered, it.” Restatement of Agency 2d § 227, comment b. See Cardozo, J., in Charles v. Barrett, 233 N.Y. 127, 129, 135 N.E. 199, 200 (1922). In New Hampshire law it is for the jury to weigh the factors and decide which employer exercised the right to control. The borrowed servant question “[is] a question of fact . upon which the finding of the Trial Court cannot be disturbed if there is evidence to sustain it.” Indemnity Insurance Co. of North America v. Cannon, 94 N.H. 319, 321, 52 A.2d 855, 856 (1947). See also Restatement of Agency 2d § 227, comment a. Proponents’ verdicts are rarely directed in New Hampshire and in the federal courts; they are not directed, even on undisputed evidence, if the evidence gives rise to conflicting inferences. Boothby v. Prescott, 97 N.H. 504, 505, 92 A.2d 661, 662 (1952); Federal Insurance Company v. Summers, 403 F.2d 971, 975-976 (1st Cir. 1968). Here, although there is much support for the district court’s conclusion, we think a jury could, by attaching different weight to certain factors, have permissibly reached a different result. Like the court in Dickerson v. American Sugar Refining Co., 211 F.2d 200, 202 (3rd Cir. 1954), construing Pennsylvania borrowed servant law, we think that the evidence, taken as a whole, is subject to inconsistent inferences, and that, under New Hampshire law, these must be resolved by the jury. We are aware of no New Hampshire case in which a directed verdict on this question was sustained. In Currier v. Abbott, supra, a case relied on by appellees, the court, although affirming a jury verdict holding liable the temporary employer, Abbott, said: “Upon the evidence in this case it could not be said that whatever Pratt did while hired out to Abbott ‘must’ as a matter of law be considered done in the service of Abbott.” 104 N.H. at 303, 185 A.2d at 266. Golding-Keene Co. v. Fidelity-Phenix Insurance Co., 96 N.H. 64, 69 A.2d 856 (1949), and Mead v. Travelers Insurance Co., 111 N.H. 27, 274 A.2d 792 (1971), involved affirmation of findings by a master and a trial court, respectively, and do not stand for the proposition that such findings were required as a matter of law. Doubtless there may be a case where, notwithstanding the existence of a few factors looking the other way, the bulk of the evidence is so strong in one direction as to permit but one inference. But we cannot say this is that case. The tortuous history of “borrowed servant” reflects different emphases by different courts and commentators on the weight to be given different factors. The variety of emphases stems from conflicting judgments of policy: is it reasonable most often to impose liability upon the general employer, who hired and selected the man? Should it rather be placed upon the one whose immediate interests were being served at the time of the accident? New Hampshire, like some but not all jurisdictions, has decided to leave the marshalling and weighing of the factors, and the unavoidable policy judgments lurking beneath the surface of the amorphous “control” test, to a properly instructed jury. We think we must leave them there. Since we remand for a new trial, we shall deal briefly with two other issues raised by Nooter, finding merit in neither. We agree with the district court that any liability of Nooter attributable solely to its “borrowed servant” responsibility for the Ferguson employees’ negligence cannot be recovered back from Ferguson on a theory of implied warranty of workmanlike performance. It would be odd indeed for the law, having under one of its principles shifted responsibility for their negligence to Nooter, to shift it back to Ferguson by an implication. Nooter relies on cases that one who entrusts a nondelegable duty with respect to his premises to a third person, usually an independent contractor, and is held liable for a breach thereof, may recover from the third party for any breach of an implied obligation to perform the job with care and in a workmanlike manner. Wentworth Hotel, Inc. v. F. A. Gray, Inc., 110 N.H. 458, 272 A.2d 583 (1970); Sears, Roebuck & Company v. Philip, N.H., 294 A.2d 211 (1972); Westchester Lighting Co. v. Westchester County Small Estates Corp., 278 N.Y. 175, 15 N.E.2d 567 (1938); Ryan Stevedoring Company v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). See Restatement of Restitution § 95. But a necessary aspect of the cited cases is that the third-party contractor, or his employee, remains independent of the man for whom he is performing the job. Liability of Nooter for Hall’s negligence, on the other hand, would rest on the finding that Hall lost his independence and, coming under the control of Nooter, became its servant. Finally, we deal with Nooter’s contention that the United States and the New Hampshire constitutions, 28 U.S.C. § 2072, and Federal Rules of Civil Procedure 38, 48 (see F.R.C.P. 83), all prohibit a district court’s unilateral reduction in the size of the 12-man jury. Nooter mounts this argument in the face of strong authority against it. If, as the United States Supreme Court held in Williams v. Florida, 399 U.S. 78, 90 S.Ct. 1893, 26 L.Ed.2d 446 (1970), the Sixth Amendment guarantee of jury trial in criminal cases did not freeze for all time the number of jurors at twelve, we see no reason, in history or policy, for holding that that number is frozen into the civil jury requirement of the Seventh Amendment. As Judge Wisdom said in Cooley v. Strickland Transportation Company, 459 F.2d 779, 781 (5th Cir. 1972), petition for rehearing and petition for rehearing en banc denied, “no one has ever contended that the function of the civil jury is more important than that of the criminal jury. ... It would be anomalous to the point of irrationality to construe the Constitution as sanctioning a six-member criminal jury but not sanctioning a six-member civil jury.” Accord, Colgrove v. Battin, 456 F.2d 1379 (9th Cir. 1972), cert. granted, 409 U.S. 841, 93 S.Ct. 44, 34 L.Ed.2d 80 (1972). We further agree with Judge Wisdom that the use of “at common law” in the Seventh Amendment merely distinguishes common law from equity and admiralty cases for purposes of the jury trial requirement, and does not imply a requirement that the jurors number 12. See 459 F.2d at 781-782. Neither do we think that the enabling act, 28 U.S.C. § 2072, commits the Supreme Court, in promulgating the Federal Rules, to the preservation of 12-man juries. We agree with the Fifth and Ninth Circuits that this language was meant merely to preserve jury trials in common law cases upon the merger of law and equity. See Colgrove v. Battin, supra, 456 F.2d at 1380-1381; Cooley v. Strickland Transportation Company, 459 F.2d at 785-786. We see nothing in rule 30 inconsistent with Federal Rules 38(a) and 48. See Colgrove, 456 F.2d at 1381; Cooley, 459 F.2d at 783-785. Alternatively, appellant argues that under Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), the size of the jury is a state law question, and that the New Hampshire Constitution requires a 12-man jury, citing such ancient cases as Opinion of the Justices, 41 N.H. 550 (1860), and Copp v. Henniker, 55 N.H. 179 (1875). These cases, it is true, refer to the view, doubtless then well-nigh universal, that juries consist of 12 men. They do not, however, focus on all the issues raised in Williams, and do not leave us convinced that New Hampshire, should the question arise today, would not rethink the matter. See Opinion of the Justices, 1971 Mass.A.S. 1169, 271 N.E.2d 335 (1971). Thus, we do not accept the premise that a 12-man jury (as distinct from a jury) is today an “integral” part of the state-created right. See Byrd v. Blue Ridge Electric Cooperative, Inc., 356 U.S. 525, 536, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958). Further, even the so-called outcome-determinative test would not lead to application of state law, since, as the Supreme Court said in Williams, 399 U.S. at 101, 90 S.Ct. at 1906, there is “no discernible difference between the results reached by the two different-sized juries.” See Byrd, supra, 356 U.S. at 356-357, 539-540, 78 S.Ct. 893. Finally, even if outcomes might be different, we reject appellant’s argument that, upon a balancing of state and federal interest, the federal policy favoring the six-member jury is not “strong.” See Byrd, supra, 356 U.S. at 537-539, 78 S.Ct. 893. Apart from the not insignificant issues of expense and inconvenience given today’s crowded dockets, we think that it would appear fortuitous and arbitrary for civil litigants in the same federal court to be confronted with different sized juries depending on whether their cause of action is denominated federal or state. There must be a new trial on the issue of Nooter’s liability; and we remand for that purpose. If Nooter is found to be liable to the plaintiffs, the original jury verdicts on damages shall stand. Damages need not be reassessed. We intimate no position on whether, under certain circumstances, Nooter may be able to make out any claim against Ferguson for contribution or indemnity should Ferguson’s employees be found not to be borrowed servants but nonetheless negligent. Reversed and remanded for proceedings consistent herewith. . It has been said, however, that a signalman’s giving of signals to a winch operator “was not the giving of orders, but of information, and [that] the obedience to those signals showed co-operation rather than subordination. . . .” Standard Oil Co. v. Anderson, 212 U.S. 215, 226, 29 S.Ct. 252, 256, 53 L.Ed. 480 (1909). . The court also said, 104 N.H. at 305, 185 A.2d at 268, “. . . the evidence plainly presented issues for the jury, .” and cited Balcus v. Sterling Express Company, 93 N.H. 428, 43 A.2d 155 (1945), where, on conflicting testimony as to the terms of an agreement concerning a borrowed servant, the trial court was held to have erroneously directed a verdict against the general employer. . The Supreme Court has, however, yet to rule directly. Colgrove v. Battin, infra, cert. granted 409 U.S. 841, 93 S.Ct. 44, 34 L.Ed.2d 80 (1972). . The act says, in part: “Such rules shall not abridge, enlarge or modify any substantive right and shall preserve the right of trial by jury as at common law and as declared by the Seventh Amendment to the Constitution.” . “[Art.] 20th. [Jury Trial in Civil Causes.] In all controversies concerning property — and in all suits between two or more persons, except in cases in which it has been heretofore otherwise used and practiced, and except in cases in which the value in controversy does not exceed five hundred dollars, and title of real estate is not concerned the parties have a right to a trial by jury and this method of procedure shall be held sacred,

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

NAT G. HARRISON OVERSEAS CORP., Plaintiff, v. AMERICAN BARGE SUN COASTER, and her appurtenances, in rem, Defendant, Thurston Crawford, Defendant-Appellant, Litton Industries Credit Corporation, Intervening Plaintiff-Appellee. No. 71-2663. United States Court of Appeals, Fifth Circuit. March 8, 1973. William H. Maness, Jacksonville, Fla., for appellant. George E. Patterson, Jr., Miami, Fla., Sirius C. Cook, New York City, for appellee. Before JOHN R. BROWN, Chief Judge, and GOLDBERG and MORGAN, Circuit Judges. JOHN R. BROWN, Chief Judge: Appellant Crawford, the borrower, challenges the imposition of a $300,000 plus personal judgment for the deficiency after the sale of the barge Sun Coaster. Crawford contends that (i) the District Court erred in finding that the mortgage in question was a “Preferred Ship Mortgage,” (ii) that the judgment should be purged of interest, because it was usurious under the laws of the state of Georgia, (iii) that because the interest rate is usurious under the controlling state law no personal deficiency judgment can be entered under the federal law, and (iv) that the Court incorrectly computed the application of payments on the mortgage to principal and interest, thereby charging Appellant with a higher than proper deficiency- Concluding that (i) under the intervening decision en banc in J. Ray McDermott & Co., Inc. v. M/V Morning Star, 5 Cir., 1972, 457 F.2d 815, 72 A.M.C. 907 (reversing the panel decision, 431 F.2d 714, 70 A.M.C. 2228) the law of the state of Georgia is irrelevant, (ii) the Preferred Mortgage Act does not recognize usury when an agreement pledges a vessel as security and comes within the terms of the Act, but (iii) that the District Court’s computation of the amounts allocable to interest and principal was incorrect, we affirm in part and modify in part. The barge Sun Coaster was built in 1963 and financed by Plaintiff-Appellee Litton Industries. The financing was secured by the first preferred ship mortgage on the barge and by a preferred ship mortgage on another vessel, the “Scintilla”. Appellant Crawford defaulted on the three promissory notes which formed the initial 1963 financing arrangement. In January of 1967 refinancing arrangements were made between Crawford and Litton Industries in order to avoid foreclosure. The new arrangement contemplated consolidation of the notes in default and the posting of additional security by the Appellant Crawford. The original financing had stated the amount of the debt in a lump sum with both interest and principal (equaling the amount of debt) stated in a lump sum dollar figure, and providing that payments would be applied to interest and principal in a level amount. The 1967 refinancing note likewise stated interest and principal in lump sum dollar amounts which totaled the amount of the debt. It was, however, silent as to the manner in which payments were to be allocated between principal and interest. The non-appealing Plaintiff Nat G. Harrison Overseas Corp., owned a cargo aboard the Sun Coaster when she was bound for Guantanamo Bay, Cuba from Miami, Florida on what would prove to be her last voyage. She capsized and was towed back to Florida bottom side up. Harrison Overseas libeled her and Litton Industries as the preferred ship mortgage holder intervened in the in rem proceedings and by process in rem instituted a foreclosure of the mortgage. Appellant Crawford contends that the mortgage fails to satisfy the criteria necessary for preferred status because it violates 46 U.S.C.A. § 922(e) which provides: “A mortgage which includes property other than a vessel shall not be held a preferred mortgage unless the mortgage provides for the separate discharge of such property by the payment of a specified portion of the mortgage indebtedness. If a preferred mortgage so provides for the separate discharge, the amount of the portion of such payment shall be indorsed upon the documents of the vessel.” The Appellees secured their loan with non-maritime property, as well as the preferred ship mortgage. However, the other items of collateral — which included real property, and hypothecated stock— were each treated in separate security instruments. In short, this “mortgage [— was not one which — ] includes property other than a vessel * * * ” § 922(e). The case at hand does not even approach the factual threshold where a Court would hold that § 922(e) was breached. In the present case the ship mortgage covered a single piece of property, namely, the ship. The rational of the District Court in Emma Giles, D.Md., 1936, 15 F.Supp. 502, 36 A.M.C. 1146, depends on the fact that the mortgage instrument by its terms and within the corners of a single document, purported to create a mortgage lien on both maritime and non-maritime property. The Bay Belle, D.Md., 1963, 215 F.Supp. 72, 64 A.M.C. 2674, aff’d, 4 Cir., 1963, 324 F.2d 954. In the Emma Giles the different items securing the debt were not severable. In the case at hand the collateral is dealt with by separate instruments and there is no need for severance. See, Pascagoula Dock Station v. Merchants and Marine Bank, 5 Cir., 1959, 271 F.2d 53, 55, 59 A.M.C. 2207. Section 46 U.S.C.A. § 954(a) permits the mortgagee to bring suit in personam against the mortgagor before the Admiralty for any deficiency that the sale price of the vessel bears to the indebtedness which it secures. 46 U.S.C.A. § 926(d) specifies that: “A preferred mortgage may bear such rate of interest as is agreed by the parties thereto.” Like the en banc court in J. Ray McDermott & Co., Inc. v. M/V Morning Star, 5 Cir., 1972, 457 F.2d 815, 72 A.M.C. 907, we perceive no void in the statutory scheme here. And since as Morning Star makes clear that the Ship Mortgage Act provides a comprehensive scheme for the foreclosure of preferred ship’s mortgages and any remaining deficiency judgments against the debtor personally, there is no room for the operation of state law. Any adoption of state law would not only — as the court feared would occur in the Morning Star, supra — “introduce an undesirable lack of uniformity” in the Act, but in the present case it would flatly conflict with Section 926(d), supra. The remaining issue, whether the interest and principal payments were correctly computed, is only slightly more difficult. Appellant asserts that by the structure of the underlying 1967 note monthly payments were to be applied ratably to principal and interest, and therefore the method of allocation or computation of principal and interest used by the District Court was erroneous. This was especially true, he claims, since the 1963 agreements contemplated pro rata application of payments to principal and interest and therefore a “course of dealings” has been established to which the Court must look to illuminate the intent of the parties to the note. Appellee counters with a citation to the “United States Rule” as stated in Story v. Livingston, 1837, 38 U.S. (13 Peters) 359, 10 L.Ed. 200 where the Court said: “The correct rule in general is that the creditor shall calculate interest whenever a payment is made. To this interest the payment is first to be applied and if it exceed the interest due, the balance is to be applied to diminish the principal. If the payment fall short of the interest, the balance of interest is not to be added to the principal so as to produce interest. This rule is equally applicable, whether the debt be one which expressly draws interest, or on which interest is given in the name of damages.” Appellee also points to the fact that among the 1963 agreements were two smaller notes upon which the interest was stated in percentage and to which the “United States Rule” the Appellant Crawford concedes would apply. The “United States Rule” has been with us almost since the founding of our federal system and it is an ideal source where Federal, not state, law is controlling, M/V Morning Star, supra. It has been applied to cases where interest is stated as a lump sum, as here, as well as cases where interest is stated in a percentage. But it is a rule to apply in the absence of a clearly expressed intention to handle allocation in some other way. Here four things were done in the note: (i) a lump sum of principal was precisely stated, (ii) a lump sum of total interest was precisely stated, (iii) these were to be paid in 72 installments all but the last of which were in equal specified amounts of $6,356.39, and (iv) such an installment computation reflects that necessarily the stated sums were aggregated. Each monthly payment was to be 1/71st of the stated principal and stated interest. It is the provision for equal monthly payments for the stated period, not the fact that total interest is stated in a lump sum, cf., United States v. McLemore, supra n. 7, which reflects a purpose to apply current payments ratably to interest and principal. Consequently, the “United States Rule” does not control and the correct amount of principal and interest must be recomputed on remand in the light of this holding. But in all other respects we fully approve the District Court’s action. Affirmed in part: modified in part and remanded. . 46 U.S.C.A. § 922 et seq. . The Hull insurance proceeds, of which mortgagee was the loss payee, from the capsizing were sufficient to pay the Distriet Court’s judgment in full. This litigation really concerns lvow much, if any, Appellant Crawford is to receive from the insurance fund. . Cf. Gilmore and Black, The Law of Admiralty (1957) at 580-82. . The Note recites the debt and interest to be paid as follows: “FOR VALUE RECEIVED, I promise to pay to the order of THE IN-GALLS SHIPBUILDING CORPORATION the amount of THREE HUNDRED THIRTY-SIX THOUSAND FIVE HUNDRED FOURTEEN and 93/100 DOLLARS ($336,514.93) with interest in the total amount of One Hundred Twenty-One Thousand One Hundred Forty-Five and 37/100 Dollars ($121,145.37), payable with each installment of principal, payable in seventy-one (71) equal monthly installments of Six Thousand Three Hundred Fifty-Six and 39/100 Dollars ($6,356.39) and one (1) final installment of Six Thousand Three Hundred Fifty-Six and 61/100 Dollars ($6,356.-61), beginning on January 14, 1967, and on such date of each month thereafter until such sums are paid in full.” . See, e. g., Uniform Commercial Code, § 1-205 which makes a “course of dealing” part of the bargain in a sales contract. We do not mean to hold or even 'imply that the UCC would have any application to the case at hand, but only mention it by way of illustration. . Whiteside v. Washington Loan & Trust Co., 1937, 68 App.D.C. 172, 95 F.2d 83, followed Story, supra. . United States v. McLemore, 1846, 45 U.S. (4 Howard) 286, 11 L.Ed. 977.

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George C. STAFFORD, Plaintiff, Appellee, v. PERINI CORPORATION, Defendant, Appellant. No. 71-1221. United States Court of Appeals, First Circuit. Heard Dec. 7, 1972. Decided March 20, 1973. James C. Gahan, Jr., Boston, Mass., for defendant, appellant. David B. Kaplan, Boston, Mass., with whom Robert S. Wolfe, Boston, Mass., was on brief, for plaintiff, appellee.- Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges. McENTEE, Circuit Judge. Plaintiff, George C. Stafford, brought this action under the Jones Act, 46 U.S. C. § 688, for negligence and under the general maritime law for unseaworthiness to recover for personal injuries sustained while working on a barge owned by his employer, Perini Corporation. Following a jury trial, judgment was entered in plaintiff’s favor in the amount of $64,140. Arguing that the evidence was insufficient to support the jury verdict, both as to liability and damages, and that the verdict was excessive in amount, Perini appeals from the denial of its motions for a directed verdict and a new trial. For the reasons stated below, we affirm. Construing the evidence most favorably to the plaintiff, the facts are as follows. At the time of the accident, Stafford was employed as a dockbuilder by Perini Corporation, which was then engaged in the construction of the Newport Bridge in Rhode Island. One of Stafford’s principal duties in this capacity was to build and repair certain “forms,” which were used for the pouring of concrete in erecting the piers of the bridge. This work was generally done on the deck of a barge owned by Perini (Scow 101), which was located about two miles offshore in Narragansett Bay. The barge also served as a storage area for various materials and carried a large crane which was used for the purpose of lifting the forms back and forth from the deck to the piers. In addition to building and repairing the forms, Stafford did various construction work on the piers themselves and also assisted in moving the barge from one site to another by handling its mooring and towing lines. The crane on board Scow 101 was supported by 16 x 16 timbers which ran across the surface of the barge in such a manner as to leave only a narrow unobstructed walkway along the edge of the deck. On May 15, 1969, Stafford and a co-worker were ordered to carry a four hundred pound channel iron across the barge, although it was the usual practice to assign three or four men to this task. While carrying the channel iron across the obstructed area, Stafford slipped on some dunnage and injured his back. A myelogram taken shortly after this incident revealed that Stafford had sustained a herniated cervical disc between his fifth and sixth cervical vertebrates. As a result of this injury, he was required to undergo surgery and did not resume work of any kind until December 14, 1969, at which time he started a new job as an automobile mechanic performing light servicing work only. Stafford was cleared by his physician for a return to his former employment on March 1, 1970, but continued to complain of headaches, difficulty in swallowing and a weakness in his arms. He testified that as a result of these symptoms, he was unable to perform heavy labor of any kind. Prior to his employment with Perini in 1966, Stafford had worked mostly as a mechanic and a truck driver, earning less than $7,000 a year. While working as a dockbuilder, however, his average annual earnings exceeded $12,000. During a period in 1968 when work on the Newport Bridge had been temporarily suspended, plaintiff was variously employed as a mechanic, a construction worker, and a millwright. His weekly earnings in these latter two capacities were $180 and $190 respectively. Following his return to work after the accident, Stafford earned $120 per week as a light mechanic. On the issue of damages, the district court instructed the jury that it could award plaintiff a sum which would reasonably compensate him for his past and future pain and suffering and loss of earning capacity. Under these instructions, the jury returned a $60,000 verdict in plaintiff’s favor. Appellant’s basic argument on the issue of liability is that plaintiff did not qualify as a “member of a crew of any vessel” and was therefore not entitled to recover under the Jones Act or the general maritime law. See Swanson v. Marra Brothers, Inc., 328 U.S. 1, 66 S.Ct. 869 90 L.Ed. 1045 (1946). In support of this contention, appellant argues that plaintiff failed to meet the test for crew-member status laid down in Offshore Company v. Robison, 266 F.2d 769, 779 (5th Cir. 1959) since the evidence was insufficient to establish (1) that he performed a substantial part of his work on board Scow 101 and (2) that the duties which he performed contributed to the function of the vessel or the accomplishment of its mission. We cannot agree with this assessment of the evidence. Contrary to appellant’s assertion that plaintiff’s work was done almost exclusively on the piers, the record clearly indicates that a significant part of his job was to build and renovate the forms used in connection with the piers’ construction. According to appellant’s own witness, this work was done on the deck of Scow 101. There was also testimony that on the day of the accident, Stafford spent at least four hours on board the barge. In light of this evidence, we cannot say, as a matter of law, that plaintiff did not perform a substantial part of his work on Scow 101. Moreover, since one of the primary functions of the vessel was apparently to provide a work area for the construction of the forms, it is clear that Stafford’s duties directly related to the performance of its mission. The question as to plaintiff’s crew-member status, therefore, was for the jury. Compare Grimes v. Raymond Concrete Pile Co., 356 U.S. 252, 78 S.Ct. 687, 2 L.Ed. 737 (1958); Butler v. Whiteman, 356 U.S. 271, 78 S.Ct. 734, 2 L.Ed.2d 754 (1958); Biggs v. Norfolk Dredging Co., 360 F.2d 360 (4th Cir. 1966). Appellant also objects to the district court’s instructions to the jury on this issue, arguing that insufficient emphasis was placed on the “substantial work” requirement. The court quite clearly instructed the jury, however, that plaintiff must have had more than an irregular connection with a vessel in order to be found a member of a crew, and that this issue could be framed in terms of whether he performed a substantial part of his work on the barge. While this instruction was perhaps something less than ideal from appellant’s viewpoint, we think it was an adequate statement of the law as set forth in Offshore Company v. Robison, supra. Appellant next argues that the evidence did not warrant a finding that it was negligent as alleged under the Jones Act claim, and that the court committed prejudicial error in its instructions to the jury on that issue. We find these arguments to be without merit. First, Perini made no objection to the court’s instructions on this aspect of the case and we therefore decline to consider its contentions on appeal. Secondly, there was ample evidence to support a finding of negligence on appellant’s part. Expert testimony established that working conditions on board Scow 101 were unsafe on the day of the accident. Moreover, plaintiff testified that the unsafe condition had existed on the deck of the barge for approximately three months before the accident, and that it was contrary to custom and practice to require only two men to carry a four hundred pound channel iron. Under these circumstances, it certainly was not error to submit the negligence claim to the jury. Appellant’s remaining contentions relate to the issue of damages. First, Perini argues that the evidence was insufficient to establish a causal connection between the accident and plaintiff’s alleged disability at the time of the trial. When plaintiff’s expert medical witness was questioned as to whether Stafford's symptoms were reasonable in view of his original injury and the surgery which he subsequently underwent, he replied “Yes. He could have a disability related to this.” Appellant argues, however, that since this testimony only expressed an opinion as to the possibility of a causal relationship between the accident and the alleged disability, the jury was improperly permitted to include future loss of earning capacity and pain and suffering in its calculation of damages. We agree with the district court that “the combined testimony of the plaintiff and his orthopedic surgeon could fairly have been construed . . . as supporting” such an award. In Sentilles v. Inter-Caribbean Corp., 361 U.S. 107, 80 S.Ct. 173, 4 L.Ed.2d 142 (1959), the Court considered a similar challenge to the sufficiency of the medical evidence to support a finding of causality. In that case, the plaintiff claimed that his pre-existing tubercular condition had been aggravated as a result of the accident in question. While none of the three medical witnesses was willing to definitely attribute the aggravation of plaintiff’s illness to the accident, they each indicated that it was a possible or probable cause. In upholding the jury’s verdict the Court stated that: “The jury’s power to draw the inference that the aggravation of petitioner’s tubercular condition, evident so shortly after the accident, was in fact caused by that accident, was not impaired by the failure of any medical witness to testify that it was in fact the cause .... The matter does not turn on the use of a particular form of words by the physicians in giving their testimony. The members of the jury, not the medical witnesses, were sworn to make a legal determination of the question of causation. They were entitled to take all circumstances, including the medical testimony, into consideration” (footnote omitted). Id. at 109, 80 S.Ct. at 175. See also Brett v. J. M. Carras, Inc., 203 F.2d 451 (3d Cir. 1953). The medical evidence in this case, when taken together with plaintiff’s testimony concerning his symptoms and the time of their onset, was sufficient to warrant the jury in finding a causal connection between the accident and plaintiff’s disability. Appellant also argues that the district court erred in failing to grant its motion for a new trial on the grounds that the jury’s verdict was excessive. According to appellant, the size of the jury’s verdict was in large part attributable to its use of a temporary period of abnormally high wages as a standard for determining plaintiff’s future loss of earning capacity. Perini argues that prior to his employment as a dockbuilder in 1966, plaintiff had worked mostly as a mechanic and truck driver earning less than $7,000 a year; that plaintiff’s job with Perini would have ended about one month after the accident; and that no evidence was introduced as to the availability of similar jobs in the Newport area. A motion for a new trial on the grounds of inadequate or excessive damages is addressed to the discretion of the trial court, and its decision may be reversed only for an abuse of that discretion. See Boston & Maine Railroad v. Talbert, 360 F.2d 286 (1st Cir. 1966); New York, N. H. & H. R. Co. v. Zermani, 200 F.2d 240 (1st Cir. 1952), cert. denied, 345 U.S. 917, 73 S.Ct. 729, 97 L.Ed. 1351 (1953). The evidence at trial showed that plaintiff had demonstrated an earning capacity of over $12,000 a year as a dockbuilder prior to the accident, and that subsequent to his injury he was unable to perform heavy labor of any kind. Plaintiff also testified that there were dockbuilding jobs available in the Boston area after his return to work in December of 1969, and that several of his former co-workers on the Perini job were commuting from Newport to Boston on a daily basis to work on these projects. Moreover, there was evidence that during part of 1968, plaintiff worked both as a millwright and construction worker, earning between $180 and $190 per week on these jobs, both of which required heavy physical labor. At the time of the trial, plaintiff was employed as a light mechanic earning $120 per week, and had a working life expectancy of 15.2 years. There was also considerable testimony as to the pain and suffering which he underwent as a result of his accident and the subsequent surgery. Considering all of the above circumstances, we do not believe that the jury’s verdict was excessive, and hold that the trial court was within its discretion in denying appellant’s motion for a new trial. Finally, appellant contends that the evidence was insufficient to warrant the court’s instruction as to the aggravation of a pre-existing medical condition. In view of our holding above that the evidence adequately established a causal relationship between plaintiff’s accident and his subsequent disability, we find that this instruction was not prejudicial. Affirmed. . A third count for maintenance and cure was decided by the district court in favor of the defendant. No appeal was taken from this decision. . For the same reason, we need not consider appellant’s argument that the district court improperly instructed the jury on the issue of proximate cause in relation to the unseaworthiness claim,

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Norman Lee HAMILTON, Defendant-Appellant, v. UNITED STATES of America, Plaintiff-Appellee. No. 72-1501. United States Court of Appeals, Sixth Circuit. Argued Feb. 6, 1973. Decided March 29, 1973. Rollie L. Woodall (Court Appointed), Nashville, Tenn., on brief for appellant. Joe B. Brown, Asst. U. S. Atty., for appellee; Charles H. Anderson, U. S. Atty., M. D. Tennessee, Nashville, Tenn., on brief. Before PHILLIPS, Chief Judge, LIVELY, Circuit Judge, and YOUNG, District Judge. The Honorable Don J. Young, District Judge of the United States District Court for the Northern District of Ohio, sitting by designation. LIVELY, Circuit Judge. The appellant robbed a branch of First American National Bank in Nashville, Tennessee shortly after noon on September 16,1971. An off-duty policeman who was in the bank on personal business arrested appellant as he was getting into a taxi cab in front of the bank immediately after the robbery. Although appellant had told the teller from whom he took $744 that he had a gun in his pocket, when arrested he was unarmed and did not resist. While being searched for a gun appellant told the arresting officer that the money was in his pocket and indicated which pocket. The money was recovered and appellant was taken to a room in the back of the bank and held until an FBI agent could be summoned. After explaining his rights and obtaining a written waiver from appellant, the agent took a statement which appellant signed. In this statement the robbery was admitted and the reason given was that appellant needed money. The teller who was robbed stated that she thought that appellant might be drunk because he asked her name when it was in plain view on her cage and furthermore he had no deposit slip or check in his hand when he approached her. However, she testified that appellant had no odor of alcohol about him and did not stagger. Neither the patrolman who made the arrest nor the FBI agent who took the statement thought that appellant was intoxicated, though both agreed that he showed signs of stress. In his statement to the FBI agent the appellant said that he had had six or eight beers during the morning while he was in a bar some two miles away and it was there that he had devised the plan of robbing this particular bank. The taxi driver who took appellant from the hotel to the bank stated that he might have been drinking but that he was not drunk. Appellant rode in the front seat next to the driver. Witnesses for the government and appellant agreed that he was a chronic alcoholic and that his problem had existed for about 25 years. A psychiatric social worker from Central State Hospital testified that Mr. Hamilton had been a patient at that hospital on four occasions and that she was familiar with his case. She testified that he was a chronic alcoholic and that he had been released from the hospital on August 30 and placed in a Salvation Army rehabilitation center. However, appellant called her the night before the robbery and told her that he was drinking again and asked to be readmitted to the hospital. There was no space available at the time and the social worker told him that she would place him as soon as possible. This witness testified that Hamilton was impulsive, particularly under the influence of alcohol and would do things on the spur of the moment. She testified further that he was impaired in terms of picking out a goal and being able to obtain that goal. Appellant testified that his primary purpose in robbing the bank was to get caught and get some help. A staff psychiatrist from the Medical Center for Federal Prisoners at Springfield, Missouri, testified that he conducted both a medical examination and psychiatric evaluation on appellant one month after the robbery. While he noted signs of chronic alcoholism, this witness testified that in his opinion appellant was competent at the time he committed the robbery. He did not believe that the evidence indicated that Hamilton was intoxicated at the time of the robbery and it was his opinion that his cerebral abilities were not so impaired by alcohol as to keep him from forming a goal-directed action and carrying it out. The witness did not believe that appellant was suffering from chronic brain syndrome or that he was so intoxicated at the time of the rob? bery as to indicate that he did not know what he was doing or was unable to resist an impulse to carry out his scheme. In a trial by jury appellant was convicted of unarmed robbery of an insured bank. A number of grounds are urged for reversal. Appellant questions the sufficiency of the evidence on the question of whether the bank was insured by the Federal Deposit Insurance Corporation. The prosecution introduced a 1969 certificate from the F.D.I.C., and the manager of the branch where the robbery took place, who was also an assistant vice president of the banking corporation, testified that the bank which was robbed was insured. This was sufficient to establish jurisdiction of the District Court. United States v. Riley, 435 F.2d 725 (6th Cir. 1970). Appellant’s motion to suppress the statement he gave the FBI agent was overruled after a hearing. On appeal he contends the government failed to prove that he was competent to waive his constitutional rights and give an incriminating statement. In a similar vein he maintains that his motion for acquittal should have been granted because the prosecution failed to prove that he was responsible for his conduct during the commission of the offense. No witness who observed appellant immediately after the robbery occurred thought that he was drunk. This included a policeman, an FBI agent and a taxi driver, all of whom have had ample opportunities to observe intoxicated people. Furthermore, the FBI agent described appellant’s actions and appearance and concluded that he appeared normal under the circumstances. The evidence fully supports the finding of the trial judge that appellant gave the incriminating statement voluntarily. Jackson v. Denno, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908 (1964); 18 U.S.C. § 3501. In support of his argument that he was entitled to a directed verdict of acquittal appellant relies upon United States v. Smith, 437 F.2d 538 (6th Cir. 1970). There we held that the prosecution must prove sanity of a criminal defendant beyond a reasonable doubt once a prima facie case of insanity has been established. In Smith the government relied on lay witnesses to rebut the evidence of insanity. That was not the case here. Dr. Rochman, staff psychiatrist from the Medical Center for Federal Prisoners, testified unequivocally that in his opinion appellant was competent at the time he robbed the bank. The trial court properly overruled the motion and submitted this issue to the jury. Appellant offered a proposed instruction on “irresistible impulse,” using language from Pollard v. United States, 282 F.2d 450 (6th Cir. 1960). In Pollard, Chief Judge McAllister (now Senior Judge) wrote an exhaustive and scholarly opinion on the subject of the defense of irresistible impulse. It was pointed out that the irresistible impulse which constitutes a legal defense differs from uncontrollable desire and “emotional insanity.” The difference is that to constitute a defense to a criminal charge, the impulse must arise from a mental defect or mental disease. 282 F.2d at 462. In refusing to give the requested instruction the trial judge stated that the appellant could argue the theory of irresistible impulse to the jury, but that he felt it was included in his proposed charge to the jury and should not be singled out for special comment. The court then instructed the jury on the defense of insanity using the three questions set forth in United States v. Smith, 404 F.2d 720, 727 (6th Cir. 1968). In addition, the jury was told that if it had a reasonable doubt as to whether, by reason of intoxication, the defendant was able to form a specific intent to commit the crime charged, it should find him not guilty. These instructions fully presented the defenses of insanity and intoxication. In United States v. Smith, supra, this court substantially adopted the test of criminal responsibility formulated by the American Law Institute in its Model Penal Code. While recognizing that Pollard v. United States, supra, added a major new dimension to the insanity test to be applied by the courts of this circuit, the court pointed out the serious deficiencies of the traditional irresistible impulse definition. By requiring the acquittal of a defendant suffering from a mental illness which renders him substantially incapable of conforming his conduct to the requirements of the law he is charged with violating, the ALI test has preserved the essential elements of “irresistible impulse” without these limitations. The general test encompasses insanity in its various manifestations, and therefore, no additional instruction on a particular theory or classification is required. The judgment of the District Court is affirmed.

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Knute SWANSON, on behalf of Peoria Service Company, and on behalf of all shareholders of Peoria Service Company similarly situated, Plaintiff-Appellant, v. AMERICAN CONSUMERS INDUSTRIES, INC., a New Jersey corporation, et al., Defendants-Appellees. No. 71-1639. United States Court of Appeals, Seventh Circuit. Argued Oct 24, 1972. Decided March 6, 1973. Rehearing Denied April 16, 1973. Richard Orlikoff, Arthur T. Susman, Thomas D. Hanson, Chicago, Ill., Thomas Y. Cassidy, Peoria, Ill., for plaintiff-appellant; Orlikoff, Prins, Flamm & Susman, Chicago, Ill., of counsel. Frank O. Wetmore, II, Edward J. Wendrow, John W. Stack, Chicago, Ill., Eugene L. White, Peoria, Ill., for defendants-appellees. Before CUMMINGS and SPRECHER, Circuit Judges, and KILKENNY, Senior Circuit Judge. . Senior Circuit Judge John F. Kilkenny of the Ninth Circuit is sitting by designation. CUMMINGS, Circuit Judge. Plaintiff is a stockholder of defendant Peoria Service Company (Peoria), a dissolved Illinois corporation that formerly operated two cold storage warehouse facilities in Peoria, Illinois. The complaint was brought derivative!y on behalf of Peoria and also on behalf of plaintiff and all other similarly situated stockholders. In addition to the nominal defendant, Peoria, the complaint named as defendants United States Cold Storage Corporation (U.S. Cold), which owns 87 per cent of Peoria stock, and American Consumer Industries, Inc. (ACI), which owns 90 per cent of U.S. Cold stock. Plaintiff sought to rescind a 1965 reorganization agreement between Peoria and ACI which provided for the transfer of substantially all of Peoria’s assets to ACI, an exchange of Peoria stock for ACI stock, and the liquidation of Peoria and to recover damages allegedly sustained by Peoria. The complaint asserted that the reorganization plan and related activities involved manipulative and deceptive devices and that the proxy materials were misleading and omitted to state material facts, in violation of Section 10(b) of the Securities Exchange Act (15 U.S.C. § 78j(b)) and Rule 10b-5 thereunder (17 C.F.R. § 240.-10b-5). Liability was also asserted under Illinois common law. In August 1968, the trial court entered summary judgment for defendants. 288 F.Supp. 60. We reversed and remanded for trial, Judge Swygert dissenting. 415 F.2d 1326. After trial, the district court again rendered judgment for defendants. 328 F.Supp. 797. After setting forth 52 findings of fact, the court held that plaintiff must prove a causal relationship between the deceptive material and the Peoria sale, or that there was reliance upon the deceptive material and that the corporation or its shareholders were injured as a proximate result of the material. The court concluded that plaintiff had failed “to prove the fact of reliance by anyone, any causal relationship between any defects in the proxy material and the Peoria sale, or that either Peoria or its shareholders sustained any injury.” 328 F.Supp. at 807. In urging reversal, plaintiff first asserts that proof of a materially defective proxy statement used in connection with a transaction is sufficient to show a causal relationship between the violation and the transaction. Plaintiff also urges that he is entitled to relief under the common law of Illinois. Accordingly, plaintiff insists upon rescission, restitution, or other suitable relief, plus an award of attorneys’ fees. Since the facts are fully stated in our prior opinion and in the two opinions below, they will not be restated herein. Subsequent to our first opinion in the case, the Supreme Court rendered its opinion in Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593, reversing 403 F.2d 429 (7th Cir. 1968). In that case the plaintiffs complained that the wrong accomplished through the use of a materially false or misleading proxy statement was the effectuation of a corporation merger. The Court held that if the proxy solicitation was an essential link in the accomplishment of the transaction, a showing of materiality in the misstatement or omission of that proxy was sufficient to establish a causal relationship between, the proxy statement and the merger. 396 U.S. at 384-385, 90 S.Ct. 616. However, in Mills approval of a substantial number of minority shareholders was essential to the accomplishment of the merger. 396 U.S. at 379, 90 S.Ct. 616. In this case, ACI through U.S. Cold controlled a sufficient number of shares to approve the transaction without any votes from the minority. It was precisely in such a case that the Supreme Court refrained from deciding whether merely by demonstrating materiality, causation would be shown between the false or misleading proxy statement and the accomplishment of the merger. 396 U.S. at 385 n. 7, 90 S.Ct. 616. Insofar as plaintiff claims the merger itself was the injury, it may be that since ACI controlled a sufficient amount of shares to approve the merger regardless of the minority vote, causation between the deception and the injury has not been established. Laufer v. Stranahan, Jr., CCH Fed.Sec.L.Rep. ¶ 92,617 (S.D.N.Y.1970). Nevertheless, assuming (without deciding) causation is ipso facto established by a showing of materiality even in this situation, unscrambling the merger would be an in-. appropriate remedy in this case. The Supreme Court expressly reiterated this Court’s statement in our decision in Mills that “nothing in the statutory policy ‘requires the court to unscramble a corporate transaction merely because a violation occurred.’ ” 396 U.S. at 386, 90 S.Ct. at 622, quoting from 403 F.2d at 436. Further, the Supreme Court directed that in fashioning retrospective relief, “the federal courts should consider the same factors that would govern the relief granted for any similar illegality or fraud” and that “[o]ne important factor may be the fairness of the terms of the merger.” 396 U.S. at 386, 90 S.Ct. at 622. Here the lower court found that “the exchange ratio of five shares of Peoria stock for one share of ACI stock, which was established in the plan, was fair and reasonable to Peoria, to ACI, and to the shareholders of both.” 328 F.Supp. at 807. We cannot say that this finding, supported by particularized factual findings largely based on credibility determinations, was “clearly erroneous” within the meaning of Rule 52(a) of the Federal Rules of Civil Procedure. Moreover, the lower court concluded that to require unscrambling “would be a grave injustice to the other shareholders of ACI.” Id. Insofar as plaintiff shareholders seek relief in their derivative status, “while they do have a derivative right to invoke [Peoria’s] status as a party to the agreement, a determination of what relief should be granted in [Peoria’s] name must hinge on whether setting aside the merger would be in the best interests of the shareholders as a whole.” Mills, supra, 396 U.S. at 388, 90 S.Ct. at 623. The district court, exercising “the sound discretion which guides the determinations of courts of equity,” (id. at 386, 90 S.Ct. at 622), made the foregoing finding that setting aside the merger would not be in the best interests of all shareholders, and we are not inclined to find an abuse of that discretion. With respect to any monetary recovery to the plaintiff shareholders predicated on the terms of the merger, we will again assume that a causal connection is established between the false or misleading proxy statements and accomplishment of the merger. But as in Dasho v. Susquehanna Corp., 461 F.2d 11, 30 (7th Cir.), certiorari denied, 408 U.S. 925, 92 S.Ct. 2496, 33 L.Ed.2d 336 (1972), although this “would seem to require a finding of ‘legal injury’ caused by the violation, in this case that injury may not include any pecuniary loss.” Applying the analysis of Dasho, approval of the sale of assets and reorganization caused plaintiff shareholders “monetary injury only if (a) [Peoria] would have been better off with no merger at all; or (b) a more favorable exchange ratio would have been available if there had been full disclosure.” Id. at 31. The district court found that “Peoria, during and prior to ACI control, was not a viable entity; that Peoria was unable, financially, to exploit the market available to it and unable to obtain such financing as was necessary for conversion of the corporation into a viable entity.” 328 F.Supp. at 806. This finding is supported by ample evidence, and hence it is clear Peoria would not have been better off with no merger at all. As to the availability of a more favorable exchange ratio upon full disclosure, there was simply a failure of evidence to support a monetary recovery. What suffices to show causation of a legal injury — the merger- — does not automatically show plaintiffs suffered compensable monetary injury. “[D]amages should be recoverable only to the extent that they can be shown.” Mills, supra, 396 U.S. at 389, 90 S.Ct. at 624. When this case was before us previously, the defendants contended that no injury could be shown because any corporate opportunities or going concern value of which Peoria shareholders might have been deprived are retained by them by virtue of their continuing equity position in ACI. We responded that “if the allegations of the complaint are proved, the Peoria shareholders were entitled to a more favorable exchange ratio than they were granted and may have had their equity position unfairly diluted.” 415 F.2d at 1332. But the allegations of unfairness in the complaint were not proved. The district court found that ACI paid full reasonable value for Peoria’s assets and that the exchange ratio of five shares of Peoria stock for one share of ACI stock was fair and reasonable to Peoria and its shareholders. 328 F.Supp. at 807. This is a case where monetary relief is appropriately “predicated on a determination of the fairness of the terms of the merger at the time it was approved.” Mills, supra, 396 U.S. at 389, 90 S.Ct. at 624. The lower court having concluded that the terms of the merger were fair and reasonable at the time of the transaction, and we having concurred with that conclusion, the plaintiffs are not entitled to a retrospective revision of the merger terms. Whether or not causation should be taken as established between the deceptive proxy statement and consummation of the merger, causation between the proxy statement and other injury claimed to have been suffered stands on an entirely different footing. As we said in our prior opinion, “The power to effect a given result certainly does not negative all possibility of injury resulting from the fraudulent or manipulative use of that power.” 415 F.2d at 1331-1332. Particularizing the possibility of injury, we stated “[i]t may well be that the misstatements and omissions contained in the proxy statements caused some Peoria shareholders to approve the sale, thus losing their statutory appraisal remedies.” 415 F.2d 1332. See 111. Rev.Stat.1971, Ch. 32, § 157.73. Operating under this Court’s decision in Mills v. Electric Auto-Lite Co., 403 F.2d 429 (7th Cir. 1968), we remanded the ease for a factual determination of whether a causal relationship existed between the deficiency in the proxy statement and the loss of statutory appraisal rights. Under the Supreme Court’s decision in Mills, causation and reliance are no longer factually-to-be-proven predicates to recovery. As most recently stated by a unanimous Supreme Court in Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-154, 92 S.Ct. 1456, 1472, 31 L.Ed.2d 741: “Under the circumstances of this case, involving primarily a failure to disclose, positive proof of reliance is not a prerequisite to recovery. All that is necessary is that the facts withheld be material in the sense that a reasonable investor might have considered them important in the making of this decision. See Mills v. Electric Auto-Lite Co., 396 U.S. 375, 384 [90 S.Ct. 616, 621, 24 L.Ed.2d 593] (1970); SEC v. Texas Gulf Sulphur Co., 401 F.2d 833, 849 (C.A.2 1968), cert. denied sub nom. Coates v. SEC, 394 U.S. 976 [89 S.Ct. 1454, 22 L.Ed.2d 756] (1969); L. Loss, Securities Regulation, 3876-3880 (1969 Supp. to 2d ed. of Vol. 3); A. Bromberg, Securities Law, Fraud—SEC Rule 10b-5, pts. 2.6 and 8.6 (1967). This obligation to disclose and this withholding of a material fact establish the requisite element of causation in fact.” Thus the plaintiff sellers who were defrauded in that case were entitled to damages measured by the difference between the fair value of what they received and the fair value of what they would have received had there been no fraudulent conduct. 406 U.S. at 155, 92 S.Ct. 1456. Consequently, it is inescapable that plaintiff shareholders have proven all the elements required to impress liability on defendants under Section 10(b) of the Securities and Exchange Act and the Commission’s Rule 10b-5 for loss of their informed ability to exercise their statutory appraisal rights. In such a posture the appropriate remedy is to restore to the plaintiff shareholders the opportunity to receive cash rather than ACI shares. Therefore, ACI must offer to each Peoria shareholder $3.55, the market value attributed to Peoria stock in the reorganization plan, for each share of Peoria stock held by such shareholder on March 31, 1965, together with legal interest from that date to the date judgment is entered by the district court. Any minority shareholders who exchanged Peoria shares must, of course, return an equivalent number of ACI shares exchanged in order to receive the cash. Plaintiff is also entitled to reimbursement of reasonable attorneys’ fees in an amount to be fixed by the district court, of course taking into consideration the modest recovery achieved, but cognizant that pecuniary benefit is not the sole criterion for the award of attorneys’ fees. See Mills v. Electric Auto-Lite Co., supra, 396 U.S. at 389-397, 90 S.Ct. 616; Dillon v. Berg, 351 F.Supp. 584 (D.Del.1972). With respect to plaintiff shareholders’ claim that they are entitled to recover under the common law of Illinois for defendants’ purported breach of their fiduciary duties, the lower court concluded that the defendants “sustained their burden of proving that the transaction was a good faith and entirely fair effort by defendants and their officers and directors to relieve all the shareholders of Peoria from the consequences of its impending failure and to enable all such shareholders to participate equitably and ratably in the exploitation of the cold storage market available in the area.” 328 F.Supp. at 807. Because we find no adequate reason to set aside the factual findings underpinning the conclusion that defendants have not breached their fiduciary duties under Illinois laws, we affirm that conclusion,. Since a further trial of this action is not required, Rule 23 of this Court is inoperative, and the case will therefore not be reassigned to another judge. Finally, it is ordered that (1) costs in this Court are taxable against the defendants; (2) the trial court’s order allowing costs against plaintiff is reversed; and (3) costs in the trial court should be awarded to the plaintiff in an amount to be determined by that court. Reversed and remanded for further proceedings not inconsistent herewith. SPRECHER, Circuit Judge, concurring in the result of reversal but dissenting from the remedy upon remand. The district court originally dismissed the class action aspects of the case and then rendered summary judgment for the defendants. 288 F.Supp. 60 (S.D.Ill.1968). This court reversed the class dismissal and the summary judgment and remanded for trial. We concluded that “these proxy statements were misleading in material respects and were deceptive as a matter of law.” 415 F.2d 1326, 1331 (1969).' After a trial, the district court concluded that the plaintiff was required to prove “a causal relationship between the deceptive material and the [Peoria] sale, or that there was reliance upon the deceptive material . . . and . that the corporation and/or its shareholders were injured as a proximate result of the material.” The court then found and concluded that plaintiff had failed “to prove the fact of reliance by anyone, any causal relationship between any defects in the proxy material and the Peoria sale, or that either Peoria or its shareholders sustained any injury.” 328 F.Supp. 797 at 807. Under the circumstances of this case, the court was erroneous as a matter of law in regard to reliance and causal relationship, and was clearly erroneous as a matter of fact in regard to the injury sustained by the corporation and its shareholders. The court set up a series of unnecessary and unjustified roadblocks for the plaintiff. Congress has provided that the securities laws, as well as the antitrust laws, may be enforced by private litigation. “In the face of such a policy this Court should not add requirements to burden the private litigant beyond what is specifically set forth by Congress in those laws.” Radovich v. National Football League, 352 U.S. 445, 454, 77 S.Ct. 390, 395, 1 L.Ed.2d 456 (1957). In fact, Congress intended fewer burdens for the private litigant in securities law cases than in anti-trust litigation. First, the district court erred as a matter of law in requiring proof of reliance under the circumstances of this case. This has been made crystal clear in two Supreme Court decisions, one prior and the other subsequent to the district court’s judgment. In Mills v. Electric Auto-Lite Co., 396 U.S. 375, 384, 90 S.Ct. 616, 621, 24 L.Ed.2d 593 (1970), the Court said: “Where the misstatement or omission in a proxy statement has been shown to be ‘material,’ as it was found to be here, that determination itself indubitably embodies a conclusion that the defect was of such a character that it might have been considered important by a, reasonable shareholder who was in the process of deciding how to vote.” In Affiliated Ute Citizens v. United States, 406 U.S. 128 (1972), the Court said at 153-154, 92 S.Ct. at 1472: “Under the circumstances of this case, involving primarily a failure to disclose, positive proof of reliance is not a prerequisite to recovery. All that is necessary is that the facts withheld be material in the sense that a reasonable investor might have considered them important in the making of this decision.” Second, the district court erred as a matter of law in requiring proof of causal connection under the circumstances of this case. In Affiliated Ute Citizens, the Court said at 406 U.S. 154, 92 S.Ct. at 1472: “This obligation to disclose and this withholding of a material fact establish the requisite element of causation of fact.” The “circumstances” of Ute establishing an “obligation to disclose” were that the defendants were market makers who “possessed the affirmative duty under the Rule to disclose this fact” to persons who were selling stock to or through them. 406 U.S. at 153, 92 S.Ct. at 1472. The circumstances of the present case were that the dominant and controlling shareholder was a fiduciary with an affirmative duty and obligation under Rule 10b-5 to disclose to the minority shareholders the facts which it omitted to disclose in the proxy materials. Lebold v. Inland Steel Co., 82 F.2d 351 (7th Cir. 1936) and 125 F.2d 369 (7th Cir. 1942). The fiduciary relation exists whether the dominant and controlling shareholder controls through a 5% stock interest or a 95% interest. In Lebold, the governing West Virginia statute provided that a corporation could be dissolved upon a 60% vote “regardless of motive and expediency” and the defendant parent corporation there owned 80% of the shares of the corporation sought to be dissolved. 82 F.2d at 352, 353. Nevertheless, this Court said at 125 F.2d at 373: “By its strategic position, by its dominant situation, . . . [the parent corporation] could and did force a sale, bid in the property itself and thereafter continue to operate the business as before . “ . . . The business was never, interrupted, never curtailed, never modified but continued without interruption. “ . . . The socalled dissolution was a mere device by means of which defendant appropriated for itself the transportation business of the Steamship Company to the detriment of plaintiffs. That the source of this power is found in a statute, supplies no reason for clothing it with a superior sanctity, or vesting it with the attributes of tryanny.” Under the “obligation to disclose” standard of Affiliated Ute Citizens, the withholding of a material fact or facts, as here, established the requisite element of causation in fact. Although it is unnecessary to proceed further, I also am of the opinion that the question left open in footnote 7 of Mills at 396 U.S. 385, 90 S.Ct. 616 should be answered affirmatively — that is, that causation should be conclusively established by the mere solicitation of votes whether or not management controls a sufficient number of shares to approve the transaction without any votes from the minority. To hold otherwise makes a mockery of the securities acts. The prime and obvious purpose of the disclosure provisions of the acts is to protect the investor from nondisclosure. To find that a certain kind of declarant, such as one who owns more than a specified percentage of the corporate shares, is exempt from full disclosure, is utterly self-defeating. Actually if there is any such quantitative test, it would be running in the opposite direction- — that is, the greater the percentage of control by the controlling shareholder, the greater the protection required for the minority shareholders. Subsequent to the Supreme Court decision in Mills, the Second Circuit concluded that the fortuitous circumstance that the majority shareholder has sufficient control to cause a statutory change cannot determine liability under Rule 10b-5. In Laurenzano v. Einbender, 448 F.2d 1, 5 (2d Cir. 1971), the court, affirming the district judge’s finding that no material misrepresentations had been made, stated: “The further argument, that Bargain Town shareholder approval was meaningless because National was now the majority shareholder, is irrelevant to the question of whether or not the existence of the option agreement had to be revealed in the proxy statement. And, of course, approval was not meaningless; minority shareholder approval has value whether or not it is strictly essential to the power to act.” The court in its earlier opinion in this case noted the importance of state or federal regulations requiring that proposals for change in a corporate entity be submitted to a vote of the shareholders, regardless of the number of votes controlled by management. We stated at 415 F.2d 1332: “Confronted by the objections and potentially expensive appraisal rights of minority shareholders, the directors of Peoria and their alter egos, ACI and U.S. Cold, might well have chosen to alter the plan of reorganization or abandon it entirely. ‘The vote is not legally predetermined simply because it seems practically predictable. * * * it is not legally possible to decide what legal consequences flow from the informational defects in the meeting by asserting that the meeting would have ended in the same resolutions no matter what the views or votes of the minority.’ Laurenzano v. Einbender, 264 F.Supp. 356, 362 (E.D.N.Y.1966).” Legal commentators agree with this analysis. See Note, “Causation and Liability in Private Actions For Proxy Violations,” 80 Yale L.J. 107 (1970); Comment, “Shareholders’ Derivative Suit to Enforce a Corporate Right of Action Against Directors Under SEC Rule 10b-5,” 114 U.Pa.L.Rev. 578, 582-83 (1966); Kaplan, “Shareholder Attacks on Mergers and Acquisitions Under Federal Securities Laws,” 50 Chicago Bar Rec. 441, 443-44 (1969). Neither Section 10(b) of the 1934 Act nor Rule 10b-5 by their terms require any showing of a causal connection between misleading statements or omissions and resulting injury. The Supreme Court has cautioned repeatedly, most recently in Affiliated Ute Citizens, that the statute and the rule are to be construed flexibly to achieve their broad remedial purposes “to substitute a philosphy of full disclosure for the philosophy of caveat emptor.” 406 U.S. at 151, 92 S.Ct. at 1471. Over thirty years ago in Lebold this Court pioneered a path out of the thicket of caveat investor and we should not be retrogressing this late in the day. Thus I would hold under both Affiliated Ute Citizens and under the open question in Mills, that if the dominant party, with sufficient voting power to cause a corporate change is guilty of a material misrepresentation or nondisclosure and seeks shareholder approval, it is conclusively presumed that the misrepresentation or nondisclosure caused both the corporate change (merger, consolidation, sale of assets, liquidation or reorganization) and any resulting monetary damages. In order to place the district court’s judgment in proper perspective, it is necessary to consider some of its other findings and conclusions. It concluded that “Defendants and their officers and directors stood in a fiduciary relationship to Peoria and its shareholders as a matter of law” and that the burden rested on the defendants to prove that they acted in good faith. The court then found and concluded that the “Defendants did act in utmost good faith toward Peoria and its minority shareholders.” I believe that the court was clearly erroneous in finding that the defendants acted in good faith, that the record supports only the conclusion that they did not act in good faith, and that in any event it is immaterial whether they acted in good faith or not if the minority shareholders were in fact deprived of a going business through a fiduciary breach. In this circuit, if not universally, scienter is not an element of proof in a Rule 10b-5 case. In S.E.C. v. Capital Gains Research Bureau, 375 U.S. 180, 195, 84 S.Ct. 275, 11 L.Ed.2d 237 (1963), the Supreme Court, in a government enforcement case, held that Congress “did not intend to require proof of intent to injure” in the securities laws. It would be anomalous to hold the plaintiff in a private enforcement case to a higher standard of proof. In Ellis v. Carter, 291 F.2d 270, 274 (9th Cir. 1961), the court refused to restrict Section 10(b) to common law fraud and rejected a scienter requirement in view of the broad Congressional purpose revealed in the words “any manipulative or deceptive contrivance.” In Affiliated Ute Citizens, the Supreme Court emphasized the repeated use of the word “any” in the section and in Rule 10b-5 to apply a broad interpretation of the securities acts. We have repeatedly evidenced our adherence to the conclusions reached in Ellis. Kohler v. Kohler Co., 319 F.2d 634, 637 (7th Cir. 1963); Jordan Bldg. Corp. v. Doyle, O’Connor & Co., 401 F.2d 47, 50 (7th Cir. 1968). Cf. Parrent v. Midwest Rug Mills, Inc., 455 F.2d 123, 126 (7th Cir. 1972) (statute of limitations under Section 10(b) determined partially on basis that scienter need not be proved). In Kohler, Judge Swygert said at 319 F.2d 637: “It is clear from such examination that the statute [Section 10(b) of the 1934 Act] was meant to cover more than deliberately and dishonestly misrepresenting or omitting material facts which ordinarily are badges of fraud and deceit.” Although scienter or lack of good faith is not required to prove a Rule 10b-5 case, the establishment of bad faith by the record in this case certainly affects the remedy to be applied for the injuries sustained. The findings of the district court repeatedly emphasize that Peoria would have experienced no difficulty whatever in continuing as a going business if ACI or U.S. Cold would have been willing to guarantee the loan needed to construct a new cold storage warehouse (Findings 19, 20, 21, 22, 27; 328 F.Supp. at 801, 802). The court found that ACI had a “general policy” not to guarantee the credit of its subsidiaries other than in “exceptional situations” (801-802) and concluded that “a parent corporation has no legal duty to guarantee the credit of any subsidiary” (807). Both New Jersey law under which ACI was incorporated and Delaware law under which U.S. Cold was incorporated permitted such guarantee, this was the exceptional case within the ACI general policy, and as a matter of both ACI internal benefit and ACI fiduciary duty to Peoria, ACI should have guaranteed Peoria credit. Since presumably the new cold storage warehouse would have been available to secure the loan, the risk on the guarantee would have been minimal. The ACI directors placed themselves in the dual capacity of owing fiduciary duties to both ACI and Peoria. The fiduciary duty to Peoria required the guarantee and the fiduciary duty to ACI did not require the alternative which was actually followed of ACI wrongfully taking over the going business of Peoria. The conflicting interests of ACI manifested themselves throughout the transaction. The district court found that ACI's chief executive officer, Robinson, “required, as a condition to the control acquisition agreement [to acquire control of Peoria], that Peoria exercise an option which it then held to purchase the Wilton Mortuary property” for $48,000. When ACI refused to guarantee Peoria's credit, it became expedient (in the judgment of the dual directors and officers) to sell the Wilton property for $33,500, a loss to Peoria of $14,500 because of “Robinson’s requirement.” No appraisal of Peoria’s assets was obtained prior to the adoption of the plan of reorganization or prior to the special meeting of shareholders on March 31, 1965. Instead, Robinson, the chief executive officer of both ACI and U.S. Cold, and the board of directors of ACI determined that the “fair market value” of all “the assets, property, rights and business” of Peoria was $285,582.50. It has become an almost routine procedure in mergers, recapitalizations and other corporate transactions, which may present a conflict of interest for insiders, to obtain an independent appraisal of values. To accept the uneorroborated opinions of the very persons with the conflicts of interest, whose best interests were to value the Peoria business as low as possible, is like commissioning the fox to devise a survival plan for the chicken. When, having taken the Peoria corporate opportunity of building a profitable cold storage building, ACI constructed it for $1,318,581 and sold it to U. S. Cold for $1,586,405, a profit of $267,824, an appraisal was obtained. In other words, the dual officers employed a double standard — when ACI’s assets were at stake, they used appraisals to obtain every cent of value for ACI but when Peoria’s assets were involved, appraisals were eschewed and rough guesses by biased participants were deemed appropriate. The ACI and U.S. Cold officers and directors did not observe the punctilio of an honor the most sensitive. There insensitivity led to injury by Peoria and its minority shareholders. The options open to the defendants on March 11, 1965, were three: (1) they could sell Peoria as a going business to disinterested third persons, which they refused to do because it was too valuable a prospective business; (2) they could continue to operate it as a going business, which they refused to do because they felt that the obsolescence of its facilities reduced its ability to compete in the market place; or (3) they could reorganize or merge it on the basis of a going business. What they did and could not legally do was to buy out the business on a liquidation basis and then continue the going business for their own benefit with the minority holders participating as shareholders of ACI but on a diluted basis as the result of the inadequate consideration paid for the assets. Peoria was a prosperous business. Its net-after-taxes profits after the ACI acquisition of control were (as taken from defendants’ own records): 1961 $ 3,061 (P. Ex. 113) 1962 2,916 (P. Ex. 243) 1963 15,430 (P. Ex. 116) 1964 13,931 (P. Ex. 117) 1965 27,863 (D. Ex. 1) Peoria had a net worth of $478,169.59 and $87,598.25 in cash on hand on March 31, 1965 (P. Ex. 118). Demands for its services exceeded its capabilities (Tr. 362-63). ACI paid $285,582.50 for Peoria’s assets (P. Ex. 122). This was less than the defendants’ own computation of liquidation value or value of physical assets only, which was $307,407.97 (328 F.Supp. at 805). In Lebold v. Inland S.S. Co., 125 F.2d 369, 374 (7th Cir. 1942), we said: “Furthermore it seems to us that defendant may not be permitted to say that there were no values other than those of physical assets. By taking over the assets and by continuing the prosperous business of its former cestui trust defendant has removed itself from the place where it is permissible for it to contend that there is no prosperous business. That there was value over and above physical assets is perfectly obvious from the fact that a prosperous business existed and is still being conducted; that plaintiffs, if they had not been deprived of their interest, would be still sharing in the returns from that business and that at the present time all the profits of such are being enjoyed by defendant to the total exclusion of plaintiffs. “It follows that the true rule for determination of the value of plaintiffs’ interest must be based upon the value not of the physical assets alone but upon all the elements mentioned in our former opinion [82 F.2d 351] and in arriving at such value, all those elments, including value as a going concern, must be taken into consideration.” The elements of value were set forth in Lebold v. Inland Steel Co., 82 F.2d 351, 356 (7th Cir. 1936): “The determination of value entails necessarily consideration of all elements that enter into value — cost of physical assets, additions, depreciation and appreciation, market price, earnings, the chances of future successful operation, and prospects of continued earnings.” The parties differed in their evaluation of the physical assets. Whereas the defendants argued that the value was $307,407.97, the plaintiff contended that it was $392,107.00. From the standpoint of a going business, the plaintiff’s figure is correct: it includes $15,000 charged Peoria for liquidation expenses and the defendants’ own computations (P.Ex. 119) of the going business value of equipment ($71,448.43) instead of a forced sale value ($3,000). The only expert witness, William E. Stiegelmeier, a specialist in the valuation of closely-held companies, testified that the going concern value of Peoria at the date of sale was $473,000 or $5.80 per share. In arriving at this figure, he added the lower of the 20-25% value which he determined proper to ascribe to going concern value. This compares to the net worth or book value of $478,169.-59, the “National Monthly Stock Summary” for March, 1965, indicating bids on the over-the-counter market for Peoria stock ranging from 4to 5%, and the profit situation cited above. The only contrary evidence on behalf of the defendants was the liquidation figure of $307,407.97, The $285,582.50 payment for the assets amounted to $3.-55 per share of Peoria stock (328 F. Supp. at 803). On the record before us Peoria’s assets were undervalued by about 65% and each minority shareholder was injured to the extent of receiving ACI stock worth at least 65% less than his Peoria stock. Peoria was a relatively small company but the inadequacy of consideration is relatively great. In my opinion this case comes very close to that equitable borderline where the relief to be fashioned should be rescission and an unscrambling of the merger. J. I. Case v. Borak, 377 U.S. 426, 433-434, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). In S.E.C. v. National Securities, Inc., 393 U.S. 453, 89 S.Ct. 564, 21 L.Ed.2d 668 (1969), the Supreme Court permitted to stand an amended complaint by the Securities and Exchange Commission which sought “unwinding the merger and returning the situation to the status quo ante, requiring [the defendants] to make an accounting of their unlawful gains, and readjusting the equities of the various [defendants] in whatever companies survived the decree” because of misrepresentations of, and omissions to state, material facts in the proxy statement soliciting the merger of two insurance companies, despite the approval of the merger (and presumably of the fairness of its terms) by the State Director of Insurance. The Court emphasized that “the Federal Government is attempting to protect security holders from fraudulent misrepresentations” and “is asking . . . that companies speak the truth when talking to their shareholders.” In this context, “no question of the legality or illegality of the merger, standing alone, was raised”, “the gravamen of the complaint was the misrepresentation, not the merger”, and “the merger became relevant only insofar as it was necessary to attack it in order to undo the harm caused by the' alleged deception.” The Court concluded that “in these circumstances, there is no reason to emasculate the securities laws by forbidding remedies which might prove to be essential” and that “on remand, the trial court may order a return to the status quo ante if it finds that course of action desirable, necessary, and otherwise lawful.” In any event, if this transaction is not unscrambled, I would agree with Judge Cummings’ conclusion of reversal, but I would assess damages on the basis that each Peoria shareholder is entitled to $5.80 per share together with legal interest from March 11, 1965 to the date that judgment is entered by the district court, or the equivalent in ACI stock, plus suitable attorneys’ fees and costs. . Compare the dictum in Laurenzano v. Einbender, 448 F.2d 1, 5 (2d Cir. 1971) and see the Supreme Court’s discussion in Mills, 396 U.S. at 385 n. 7, 90 S.Ct. 616. Our prior opinion cannot be taken as intimating any view on this question. We were careful to distinguish between the situation where the merger itself was the alleged injury and the situation where other injury to the shareholders or the corporation is claimed to have resulted from the use of deceptive devices proscribed by Rule 10b-5. 415 F.2d at 1331. One rationale for finding causation in a control situation would appear to be that if the majority finds it necessary for legal or practical reasons to solicit proxies from minority shareholders, it is possible that a full and accurate proxy statement disclosure could have enabled minority shareholders to take some action prompting the controlling shareholders to abandon the merger plan or alter its terms. Whether this possibility should per se be enough to support a finding of causation as a matter of law is questionable. In some cases this possibility will have little or no foundation in reality. While a determination that a misstatement or omission in a proxy statement is material “indubitably embodies a conclusion that the defect was of such a character that it might have been considered important by a reasonable shareholder who was in the process of deciding how to vote” (Mills, supra at 384, 90 S.Ct. at 621), it hardly embodies a conclusion that the non-controlling minority might have somehow, apart from their voting power, prevented the merger from taking place on the terms proposed. Even if it is salutary to presume they could, it is further questionable whether such a presumption would be justified in the face of proof by the defendants that the merger was fair and meritorious. While it may be “a dubious behavioral assumption * * * that the shareholders of every corporation are willing to accept any and every fair merger offer put before them” (id. at 382 n. 3, 90 S.Ct. at 620), it may be more dubious to assume that minority shareholders whose votes are unnecessary to the effectuation of a merger would have some extra-proxy power to prevent or alter the terms of a merger which the majority has proven was fair and had merit. Another rationale would be to posit that statutory purpose requires that the orthodox standard of causation in tort law should be cast aside entirely. While this position may have merit, it requires a court to go so far as to ignore the corporate power structure and the fairness and merit of a transaction effectuated by those in control whenever a defective proxy statement is used, and it is not so clear that these factors are undeserving of consideration on the causation issue. . We also stated that the presence of a controlling shareholder does not “negative as a matter of law the possibility of injury to the corporation, which may be remedied by means of a derivative action”, and we noted plaintiff’s allegations that Peoria was being raided and its assets squandered while its principal shareholder usurped Peoria’s corporate opportunities. 415 F.2d at 1332. But the district court justifiably concluded these allegations were not sustained. The trial judge found Peoria incapable of embracing the corporate opportunities alleged to have been usurped and specifically found no evidence was adduced to substantiate the allegations of raiding and squandering Peoria’s assets. Indeed, he found quite the contrary of the allegations to be fact. . Mr. Justice Douglas joined in this part of the opinion, although he dissented from the holding that there was no liability on the part of the United States. . J. I. Case Company v. Borak, 377 U.S. 426, 431-432, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). . Bruce’s Juices, Inc. v. American Can Co., 330 U.S. 743, 751-752, 67 S.Ct. 1015, 91 L.Ed. 1219 (1947) (Robinson-Patman Act); Radovich v. National Football League, 352 U.S. 445, 453-454, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957) (Sherman Act); Minnesota Mining & Manufacturing Co. v. New Jersey. Wood Finishing C.o., 381 U.S. 311, 318-319, 85 S.Ct. 1473, 14 L.Ed.2d 405 (1965) (Clayton Act). . Section 16 of the Clayton Act (15 U. S.C. § 26) provides that “any person . shall be entitled to sue for and have injunctive relief, ...” and Section 15 (15 U.S.C. § 25) which covers equitable actions by the United States provides that “proceedings may be by way of petition . . . prayjng that such violation shall be enjoined or otherwise prohibited.” Judge Learned Hand held in Graves v. Cambria Steel Co., 298 F. 761 (S.D.N.Y.1924) that the difference in language permitted dissolution or divestiture in a government action but not in a private action. On the other hand, Section 27 of the Securities Exchange Act of 1934, under which the present cause of action is brought (15 U.S.C. § 78aa) provides in part that “the district courts shall have exclusive jurisdiction of all suits in equity and actions at law brought to enforce any liability or duty created by this title. . . . ” A broader grant of jurisdiction cannot be conceived. . Prior to the district court judgment in the present case, we had held that in government prosecutions under Section 17(a) of the Securities Act of 1933 “it is unnecessary to prove that a victim parted with money or property in reliance upon misrepresentations.” United States v. Amick, 439 F.2d 351, 366 (7th Cir.), cert. denied, Irving v. United States, 403 U.S. 918, 91 S.Ct. 2227, 29 L.Ed.2d 694 (1971), Vollmer v. United States, 403 U.S. 932, 91 S.Ct. 2255, 29 L.Ed.2d 710 (1971), 404 U.S. 823, 92 S.Ct. 48, 30 L.Ed.2d 51 (1971). Earlier, in Kohler v. Kohler Co., 319 F.2d 634 (7th Cir. 1963), we affirmed 208 F.Supp. 808, at 824 (E.D.Wis.1962), where the court said in a Rule 10b-5 ease under the Securities Exchange Act of 1934, that “it is not necessary that plaintiff have relied exclusively upon the defendants. ...” . “Even when it has control, management may, for legal or practical reasons, solicit proxies. A solicitation requirement may be imposed by stock exchange rule or by federal statute. Furthermore, many corporations, acting under state corporation laws, may set up additional solicitation requirements in their certificates of incorporation or by-laws. Once management does solicit proxies, further rules apply. Moreover, as a strategic matter, management may wish to solicit proxies to give shareholders a sense of participation and thereby forestall litigation over projected corporate action. It may also wish to prevent the exercise of appraisal rights (which might drain the corporation’s liquid assets) by securing shareholder approval in order to retain sufficient cash to make the merger desirable to the other corporation.” Note, “Causation and Liability in Private Actions For Proxy Violations,” 80 Vale L.X 107, 114 (1970). . We held in another government enforcement case that “under Sec. 17 (a) (2) and (3) proof of scienter or fraudulent intent is not essential in a suit for injunctive relief.” S. E. C. v. Van Horn, 371 F.2d 181, 186 (7th Cir. 1966). . Jesselsohn v. Boorstein, 111 N.J.Eq. 310, 162 A. 254 (1932); Hall v. Pauser, 128 N.J.L. 211, 24 A.2d 575 (1942); N.J.Stat.Ann., § 14A:3-1 (f) and (g). . Del.Code Ann., Title 8, § 123. See also, 6 Fletcher Cyc. Corp. (1968 Rev.Ed.) § 2593, p. 670: “It would seem that where one corporation owns and controls another corporation, the former may guarantee the debts of the latter when the purpose is to protect its own interest.” . The guarantee would only be required, of course, if the ACI directors opted to continue the going business with a new warehouse and, as here, the only way to obtain it was through a guarantee; the alternatives were to sell Peoria as a going business in an arms-length transaction to third persons or to continue the going business without the new warehouse. . Findings 13, 37; 328 F.Supp. at 800, 804. Due to depreciation, there was a bookkeeping and tax gain on the sale of the Wilton property, but this was also detrimental to Peoria since while the depreciation reduced current taxes slightly, it also operated to reduce Peoria’s profits, which were one measure of its value as a going business. . Mills v. Electric Auto-Lite Co., 403 F.2d 429, 435-436 (7th Cir. 1968) (“research consultants made an independent study” of relative values); Richland v. Crandall, 262 F.Supp. 538, 554-555 (S.D.N.Y.1967) (retention of First Boston Corporation to make study of fair price of assets as a going concern as well as appraisals); Miller v. Steinbach, 268 F.Supp. 255, 261 (S.D.N.Y.1967) (opinion of Goldman, Sachs & Co. as to fairness of merger terms) ; 2 Bromberg, Securities Law, § 12.10(4), p. 288.2. . “We would be more favorably impressed by the protestations of good faith of appellee’s officers had they in their capacity of representatives of the dominant company shown a willingness to submit to arbitration the value of appellants’ minority stock. The majority stockholder may believe that it is entirely fair, but its position renders impartiality difficult, for it is compelled to say, ‘Let not thy right hand know what thy left hand doth.’ ” Lebold v. Inland Steel Co., 82 F.2d 351, 355 (7th Cir. 1936). . In order to avoid the $473,000 going-concern-value figure, the district court found that “Peoria was a losing venture,” which was belied by defendants’ own books and records. The qualified expert’s testimony was discredited whereas Mc-Oausland, ACI’s man, who was originally responsible for most of the Peoria decisions in an inherent conflict-of-interest situation, was credited when he testified in support of his own decisions. In fact the record could support only the going business valuation and MeCausland, regardless of his credibility, did not purport to give such a valuation.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

GOVERNMENT OF the VIRGIN ISLANDS, Appellant, v. William HAMILTON, Appellee. No. 72-1123. United States Court of Appeals, Third Circuit. Argued Jan. 29, 1973. Decided March 8, 1973. Ronald H. Tonkin, Atty. Gen., St. Thomas, V.I., for appellant. Edward J. Ocean, Christiansted, St. Croix, V.I., for appellee. OPINION OF THE COURT Before MARIS, VAN DUSEN and ROSENN, Circuit Judges. MARIS, Circuit Judge. The Government of the Virgin Islands appeals from a judgment entered in the District Court of the Virgin Islands, 334 F.Supp. 1382, reversing the judgments of the Municipal Court of the Virgin Islands on which the defendant, William Hamilton, was convicted of three charges, namely, brandishing and exhibiting a deadly weapon, aggravated assault and battery, and possessing an unlicensed firearm, and sentenced to terms of imprisonment of one year on each of the first two charges and to 90 days on the third charge. The Government contends on this appeal that the district court, sitting as an appellate court on appeal from the municipal court, erred in holding that the evidence was insufficient to support the charges and erred in failing to remand the case to the municipal court for further proceedings to determine whether the defendant was guilty of the lesser offense of simple assault. In limine, the defendant has moved for dismissal of the appeal for lack of jurisdiction, urging that the Government of the Virgin Islands has no right to appeal from a decision of the district court adverse to it on the defendant’s appeal from a criminal judgment in the municipal court. The existence of appellate jurisdiction in a specific federal court over a given type of case is dependent upon authority expressly conferred by statute. Carroll v. United States, 1957, 354 U.S. 394, 399, 77 S.Ct. 1332, 1 L.Ed.2d 1442. In the case of this court, its statutory appellate jurisdiction over decisions of the District Court of the Virgin Islands is of “Appeals from reviewable decisions” of that court, 28 U.S.C. § 1294. The Virgin Islands Government argues that it is authorized to take this appeal under the provision of section 1291 of title 28, U.S.C., that the court of appeals shall have jurisdiction of “appeals from all final decisions of the . . . District Court of the Virgin Islands.” The Government asserts that it has been aggrieved by a decision of that court which is unquestionably “final,” and, therefore, is authorized by section 1291 to appeal from that decision to this court. In considering the question which the Virgin Islands Government thus raises, we must keep in mind the well-settled rule that an appeal by the prosecution in a criminal case is not favored and must be based upon express statutory authority. Will v. United States, 1967, 389 U.S. 90, 96, 88 S.Ct. 269, 19 L.Ed.2d 305; Di Bella v. United States, 1962, 369 U.S. 121, 130, 82 S.Ct. 654, 7 L.Ed.2d 614; United States v. Burroughs, 1933, 289 U.S. 159, 161, 53 S.Ct. 574, 77 L.Ed. 1096; United States v. Sanges, 1892, 144 U.S. 310, 12 S.Ct. 609, 36 L.Ed. 445; United States v. Janitz, 3 Cir. 1947, 161 F.2d 19, 21; United States v. Pack, 3 Cir. 1957, 247 F.2d 168, 172; United States v. Koenig, 5 Cir. 1961, 290 F.2d 166. Thus in Will v. United States, 1967, 389 U.S. 90, 96, 88 S.Ct. 269, 274, 19 L.Ed.2d 305, the Supreme Court said that “. . . ‘in the federal jurisprudence, at least, appeals by the Government in criminal cases are something unusual, exceptional, not favored,’ Carroll v. United States, 354 U.S. 394, 400, 77 S.Ct. 1332, 1336, 1 L.Ed.2d 1442, (1957), at least in part because they always threaten to offend the policies behind the double-jeopardy prohibition, cf. Fong Foo v. United States, 369 U.S. 141, 82 S.Ct. 671, 7 L.Ed.2d 629 (1962). Government appeal in the federal courts has thus been limited by Congress to narrow categories of orders terminating the prosecution, see 18 U.S.C. § 3731, and the Criminal Appeals Act is strictly construed against the Government’s right of appeal . . .” and in Di Bella v. United States, 1962, 369 U.S. 121, 130, 82 S.Ct. 654, 660, 7 L.Ed.2d 614, the Court stated: . . What disadvantage there be springs from the historic policy, over and above the constitutional protection against double jeopardy, that denies the Government the right of appeal in criminal cases save as expressly authorized by statute . No such expression appears in 28 U.S.C. § 1291, and the Government’s only right to appeal, given by the Criminal Appeals Act of 1907 . . . now 18 U.S.C. § 3731, is confined to narrowly defined situations not relevant to our problem. Allowance of any further right must be sought from Congress and not this Court . . . ” In Umbriaco v. United States, 9 Cir. 1958, 258 F.2d 625, 626, the contention that an appeal by the prosecution in a criminal case is authorized by 28 U.S.C. § 1291 was expressly rejected. We are in accord with the views of the court of appeals in that case and hold that Section 1291 of title 28, U.S.C., does not give the Virgin Islands Government authority to appeal in criminal cases. The Government nonetheless argues that in Southerland v. St. Croix Taxicab Association, 3 Cir. 1963, 315 F.2d 364, 367, this court passed on the very question here involved when we stated that 28 U.S.C. § 1291 was not intended to limit our jurisdiction to appeals from those decisions only of the District Court of the Virgin Islands which it had entered in the exercise of its original jurisdiction but rather to “all final decisions of the court in every type of case” including those entered in appeals from the municipal court. We need only point out, however, that the question here is not whether this court may entertain an appeal from a final decision in which the district court had sat as an appellate court but whether the Government is specifically authorized to appeal in such a case if it is a criminal case. The Southerland case, which was a civil case, is not authority for the Government’s proposition here. It has been expressly held in Illinois that the right of the prosecution to secure the review of a decision of an intermediate appellate court in a criminal case must rest upon statutory authority. People v. Ritchie, 1966, 36 Ill.2d 392, 222 N.E.2d 479. And see 24 C.J.S. Criminal Law § 1665. This ruling by the Illinois Supreme Court confirms our view that the right of the Government of the Virgin Islands to appeal from a final decision of the district court on appeal from the municipal court in a criminal case must likewise have express statutory authority. The Government, however, does not contend that it has any specific authorization to appeal in such a case, its sole reliance being upon 28 U.S.C. § 1291, which, as we have seen, does not provide the statutory authority which the decisions require. Our conclusion in this case is reinforced by the fact that under the local law of the Virgin Islands the defendant alone has the right in a criminal case to appeal to the district court from a judgment of the municipal court. 4 V.I.C. § 33. This court being without jurisdiction to entertain the present appeal an order dismissing it will be entered. . Section 22 of the Revised Organic Act of 1954, 48 U.S.C.A. § 1612, provides that “The district court shall also have appellate jurisdiction to review the judgments and orders of the inferior courts of the Virgin Islands to the extent now or hereafter prescribed by local law.”

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Jack ANDO, Plaintiff-Appellant, v. The GREAT WESTERN SUGAR COMPANY, Defendant-Appellee. No. 72-1224. United States Court of Appeals, Tenth Circuit. Argued and Submitted Sept. 21, 1972. Decided March 20, 1973. J. D. Fitzstephens, Cody, Wyo., for plaintiff-appellant. Jay H. Topkis, New York City (Paul B. Godfrey, Cheyenne, Wyo., Paul, Weiss, Rifkind, Wharton & Garrison, Baer & McGoldrick, Max Gitter and Thomas Baer, New York City, of counsel, on the brief), for defendant-appellee. Before LEWIS, Chief Judge, and JONES and McWILLIAMS, Circuit Judges. Of the Fifth Circuit, sitting by designation. McWILLIAMS, Circuit Judge. Jack Ando, a citizen of the State of Wyoming, brought an action in the United States District Court for the District of Wyoming against the Great Western Sugar Company, a Delaware corporation with its principal place of business in the State of Colorado. The complaint presented three separate claims for relief. The first two were based on diversity jurisdiction and alleged libel and slander, and the third claim was for an alleged violation of federal antitrust laws. Both parties to the controversy engaged in extensive pre-trial discovery. Based, then, on various answers to interrogatories, admissions and depositional proof, including the depositions of Jack Ando himself, Great Western moved for summary judgment under Fed.R.Civ.P. 56. After extended argument and briefing of the matter, the trial court granted the motion and entered judgment for Great Western. Ando now appeals. We affirm on the ground that based on the record before it, the trial court was justified in concluding that there was no genuine issue of a material fact and that summary judgment was proper. Background information which is not really in dispute must be fully developed in order to demonstrate the propriety of the trial court’s action. Ando is a grower of sugar beets and in the past, at least, has sold his beets, under contract, to Great Western, the latter being a processor of sugar beets and in connection therewith maintaining several processing plants in the Rocky Mountain West. In 1968, Ando, in addition to his farming activities, entered into a contract with Zwaanesse Ltd., a Dutch concern, to become its franchised dealer to sell in the western part of the United States its sugar beet seed, known as “Zwaanpoly.” Ando had earlier contacted Great Western and inquired as to whether Great Western would be interested in assisting him in marketing the Zwaanpoly beet seed. Great Western declined, but informed Ando that he was free to attempt to sell the Dutch seed to growers under contract to Great Western. In this regard it should be mentioned that Great Western had its own sugar beet seed which it sold to its growers, and others, but it nonetheless gave permission to Ando to sell his Dutch seed to Great Western growers. And this Ando did during the 1968 season. During the latter part of 1968 a dispute, or at least a difference of opinion, arose between Ando and Great Western, and others, concerning the general adaptability of Zwaanpoly seed to the Rocky Mountain West, the discussion centering on the disease resistance qualities of Zwaanpoly, as well as its relative sugar content and processed juice purity as opposed to beets grown from other seeds, including Great Western’s own commercial beet seed strains. After considerable discussion, it was agreed that for the 1969 season, at least, Great Western would continue to buy beets grown from Zwaanpoly seed, and that for that year, at least, Ando could continue to sell his seeds to Great Western growers who chose to buy it. The question as to whether Zwaanpoly would be used in 1970, and thereafter, was thereupon referred to a so-called “Joint Research Committee,” which was charged with the responsibility of conducting tests of Zwaanpoly seed, as compared with other beet seed, for disease resistance, sugar content, purity, and other significant characteristics. The Joint Research Committee was composed’ of thirteen elected representatives of the growers and three representatives of Great Western. Beginning in the spring of 1969, the Joint Research Committee, hereinafter referred to as JRC, caused to be conducted extensive testing of the Zwaanpoly seed, as well as other sugar beet seeds, such tests being conducted at different locations by various branches of the United States Department of Agriculture, by a number of universities, as well as through the facilities of Great Western. Additionally, Ando made available to JRC his views on the matter, both orally and in writing, as did Dr. Zwaan himself, Dr. Zwaan being the developer of the Dutch seed, who visited the United States in the fall of 1969. Similarly, Great Western, mainly through one of its employees, a Dr. Oldemeyer, who was himself a member of the JRC, made its views and test results available to JRC. On December 17, 1969, the JRC met to analyze the results of the various tests and after deliberation voted unanimously that Zwaanpoly seed would not be used in the 1970 season by any grower under contract to Great Western and that in 1970 and all succeeding years no grower would use any seed except seed approved by it. About a week after this action by JRC, Great Western and the elected officials of the beet growers association caused several press releases to be issued, setting forth the action taken by JRC, and it is these press releases which form the basis for Ando’s libel claim against Great Western. Specifically, Ando complains about the press releases which, in addition to announcing the action taken by JRC, contained the following statements: (1) Beets grown from Zwaanpoly seed are consistently lower in sugar content and purity than beets grown from Great Western’s seed; (2) Zwaanpoly beets are especially susceptible to the diseases of leaf spot, curly top, nematodes and Rhizoetonia; (3) Zwaanpoly beets are more susceptible to freezing; and (4) that “extensive scientific investigations proved conclusively” that the “best interests” of a vast majority of beet growers in Great Western districts would be served by not using Zwaanpoly seed. As indicated, the press releases form the basis for Ando’s first claim. Ando’s second claim is grounded on the statements made by Dr. Oldemeyer to the JRC, said statements being along the same general lines as the various written statements appearing in the subsequent press releases. The third claim was an alleged antitrust violation grounded on what was said to be Great Western’s efforts to create a monopoly in the sale of its sugar beet seed in this geographical area. The propriety of the trial court’s action in entering summary judgment on the third claim is not challenged in this court. Rather, counsel confines his argument here to the propriety of the trial court’s action in entering summary judgment on the libel and slander claims. We will accordingly confine our comment to the libel and slander aspects of the case, which is the heart of the controversy. Initially we note .that it is agreed that it is the substantive law of Wyoming which must be applied with respect to the merits of the libel and slander claims presented here in this diversity action. It is further agreed, however, that it is not Wyoming law which controls the handling of the motion for summary judgment, such being a matter of federal procedural law. In this context, then, the trial court granted Great Western’s motion for summary judgment and in so doing determined that on the basis of the record then before it the allegedly defamatory statements made by Great Western, both written and oral, were in fact true statements and that accordingly there remained no genuine issue as to any material fact. The trial court proceeded on the premise that the truth of a defamatory statement is a “complete” defense to an action for libel, citing in support of this proposition Article I, § 20 of the Wyoming Constitution, about which more will be said, and the Restatement of Torts, § 582 (1938). Fed.R.Civ.P. 56(c) provides in pertinent part that a motion for summary judgment should be granted “if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” In applying this rule, it has been declared that a trial court is under a duty to grant a motion for summary judgment in an appropriate case, bearing in mind that the relief contemplated is drastic and the rule should be applied with caution to the end that litigants will have a trial on bona fide disputes. Under the rule no margin exists for the disposition of material factual issues, and the rule neither serves as a substitute for trial of the ease nor requires the parties to dispose of litigation by use of affidavits. The pleadings are to be construed liberally in favor of the party against whom the motion is made, but the trial court may pierce the pleadings by determining from the depositional proof, admissions and affidavits in the record whether any material issues of fact exist. If, after such scrutiny, any issue as to a material fact dispositive of right or duty remains, the case is not ripe for disposition by nummary judgment, and the parties are entitled to a trial. However, if no such fact issue remains, a motion for summary judgment should be granted. In his resolution of the matter, the trial judge relied to a considerable extent upon Article I, § 20 of the Wyoming Constitution. That section provides as follows: “Freedom of speech and press; libel; truth a defense. — Every person may freely speak, write and publish on all subjects, being responsible for the abuse of that right; and in all trials for libel, both civil and criminal, the truth, when published with a good intent and [for] justifiable ends, shall be a sufficient defense, the jury having the right to determine the facts and the law, under direction of the court.” Under the aforesaid provisions of the Wyoming Constitution, then, the truth, under certain conditions which will be discussed later, is a “sufficient defense” to a libel action. On the record before it, we conclude that the trial court was justified in holding that the statements complained about were in fact true, leaving no genuine issue of material fact remaining. In reaching its determination that the statements relied on by Ando were true statements, the trial court took into consideration the results of the various tests conducted on behalf of the JRC. Additionally, the trial court also took into consideration, as evidence that the statements complained about were true, the various admissions made by Ando in his depositions, along with the declarations against interest made by Dr. Zwaan in his several writings which were before the JRC. In this regard Dr. Zwaan, who was, as above indicated, the head of the Dutch firm which granted Ando a franchise to market its seed, expressed “surprise” that tests were being conducted on “Zwaanpoly’s resistance to cercospora [leaf spot], curly top and nematodes” and in connection therewith wrote to Great Western as follows: “As all other principal varieties on the western European continent . Zwaanpoly has no resistance to these diseases. We have never claimed resistance to these diseases and have recommended to our distributor that our seed be distributed in areas where there is no curly top and to stay away from areas where leaf spot is a problem.” Concerning the proposed testing of Zwaanpoly seed for sugar content and purity, Dr. Zwaan wrote Ando as follows: “All this testing by Great Western on yield and juice purity will in our opinion only confirm what we already know. The tests may reveal how great the differences are. Prior to the publication of the statements here complained about, Ando himself wrote Great Western and conceded that “in most cases” the sugar content and purity of Zwaanpoly seed was lower than Great Western’s beet seed. And in his deposition Ando gave answers to the same general effect. After the JRC had announced its decision, Ando wrote the Zwaanesse firm as follows: “. . . When Great Western personnel read the letter you wrote to the Editor of Thru the Leaves stating that Zwaanpoly didn’t have any resistance to Leaf Spot, Curly Top and Nematodes to the growers research committee that finished it as far as Zwaanpoly seed is concerned.” As indicated, the trial court concluded that there was no genuine issue of material fact since the record showed the truth of the statements complained about by Ando. This the trial court determined was the situation, not only as to statements made by Great Western concerning sugar content, purity, and the disease resistant qualities (or lack of them) of Zwaanpoly, but also as to the statements of Great Western to the effect that Zwaanpoly beets were more susceptible to freezing than other beets. In this regard, Ando in his deposition conceded that Zwaanpoly beets grew “out of ground” more than other beets, and therefor were necessarily more exposed to cold weather. The trial court held that the last matter complained about by Ando, i. e., Great Western’s statement that the “best interests” of beet growers were not served by using Zwaanpoly, was an honest expression of opinion based on Great Western’s other statements which the trial court concluded were in fact the truth. Counsel for Ando, in his brief, attempts to create what he deems to be disputed issues of fact, pointing out, for example, that Great Western in its testing compared its experimental seed with Zwaanpoly commercial seed. Such, argues counsel, is like comparing a new Volkswagen to a used Chrysler, or oranges to apples. This is not the complete picture. The fact is that Great Western’s testing included various kinds of seed, including its commercial seed, as well as certain experimental seed, along with the beet seed of other companies, including that of Zwaanpoly, of course. In short, we are not impressed with the various matters which counsel suggests pose genuine issues of material facts. See, in this regard, Bolack v. Underwood, 340 F.2d 816 (10th Cir. 1965), where we held that a motion for summary judgment should be granted in situations where the factual issues sought to be raised are either “irrelevant” or “spurious.” We were at one point at least mildly concerned with that portion of the Wyoming Constitution set forth above which at first blush would appear to say that the truth is a defense only “when published with good intent and [for] justifiable ends,” and further that the jury shall have the right to determine “the facts and the law.” Because of our concern, we ordered counsel to file supplemental briefs as to the meaning and effect of such language. As concerns the latter statement that the jury shall determine the facts and the law, counsel for Ando with commendable candor concedes in his supplemental brief that in spite of this language there is “no doubt” but that a trial court in a libel action may in a proper ease grant a summary judgment. We, of course, agree that a motion for summary judgment is a matter involving federal procedural law. Counsel’s position, then, is, as it has been, that this is simply not a proper case for summary judgment. As concerns the constitutional language that the truth is a defense when published with “good intent” and for “justifiable ends,” certainly on the record there can be no serious contention that Great Western in its several statements was acting with anything other than “a good intent” and for a “justifiable end.” See Spriggs v. Cheyenne Newspapers, Inc., 63 Wyo. 416, 182 P.2d 801 (1947). Ando himself agreed in his own deposition that Great Western had a legitimate interest in the beet seed used by its contract growers, and further conceded that Great Western in all of its actions had never acted out of malice toward him. Accordingly, we take no issue with the interpretation given Article I, § 20 of the Wyoming Constitution by the trial court. It would appear proper and we accept the construction thus given it. Binkley v. Manufacturers Life Ins., 471 F.2d 889 (10th Cir. 1973). Judgment affirmed. . Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Guaranty Trust Co. of New York v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945). . See Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). . Byrd v. Blue Ridge Rural Electrical Cooperative, Inc., 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958). . Frey v. Frankel, 361 F.2d 437 (10th Cir. 1966). . Nafco Oil & Gas Inc. v. Appleman, 380 F.2d 323 (10th Cir. 1967). . Hanley v. Chrysler Motors Corporation, 433 F.2d 708 (10th Cir. 1970). . United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). . Smoot v. Chicago, Rock Island & Pacific R. R. Co., 378 F.2d 879 (10th Cir. 1967). . Fischer Construction Company v. Fireman’s Fund Insurance Company, 420 F.2d 271 (10th Cir. 1969). . Alt v. American Income Life Insurance Co., 337 F.2d 472 (10th Cir. 1964).

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Caselaw Access Project

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2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Antonio LOPEZ, Defendant-Appellant. No. 72-1544. United States Court of Appeals, Seventh Circuit. Argued Feb. 14, 1973. Decided March 26, 1973. Rehearing Denied April 11, 1973. Ronald Lev, Chicago, Ill., for defendant-appellant. James R. Thompson, U. S. Atty., William T. Huyck, Asst. U. S. Atty., Chicago, Ill., for plaintiff-appellee. Before SWYGERT, Chief Judge, HASTINGS, Senior Circuit Judge, and KILEY, Circuit Judge. HASTINGS, Senior Circuit Judge. Defendant Antonio Lopez was charged in a two-count indictment with violations of Title 21, U.S.C.A. § 174. A conspiracy was charged in Count One and a substantive violation in Count Two. In essence, the subject of both counts was the offense of fraudulently and knowingly receiving, concealing, buying, selling and facilitating the transportation, concealment and sale of approximately 474 grams of a mixture containing heroin, and conspiring to do so. The conspiracy count named as defendant’s co-conspirators defendants Pablo Troche, Robert Warren and Antonio Gobel. The substantive count named the same three persons as defendants with Lopez. Defendant Lopez was tried with Troche, and a jury found each of them guilty on both counts. Gobel was dismissed from the case. Warren was a fugitive from justice at the time of the trial. Lopez and Troche were each sentenced by the trial court to serve a total term of five years in a federal penitentiary. Defendant Lopez alone has appealed. A brief statement of the facts, considered in the light most favorable to the Government, will furnish the setting necessary to consider the issues raised on appeal. Agents of the Federal Bureau of Narcotics and Dangerous Drugs conducted an investigation leading to the arrest of defendant; Agent Vinsik supervised. The agents had heard that Robert Warren was in Chicago to sell narcotics. Warren and Antonio Gobel were both residing in Room 1207 at the Holiday Inn, 644 North Lake Shore Drive, Chicago, Illinois, on June 20, 1969. Agent Vinsik, with other agents, heard voices coming out of 1207. The next day Agent Vinsik rented Room 1209, which was to the north of, adjacent to and shared a common wall with 1207. The agents commenced a 24-hour surveillance of the defendants. Both Warren and Gobel were known to have dealt in narcotics. The agents testified that while in 1209 they could hear conversations and other recognizable voices in 1207 through the common wall, using only the naked ear. The agents were able to tell whether someone was going in and out of 1207 by the sound of the door and the rush of air from the door. No electronic devices were use by the agents. On June 22, 1969, at about 2:30 P.M., Agent Vinsik heard the telephone ring in 1207 and Warren’s voice answer, “Hello,” “It will be here either tonight or tomorrow morning,” followed by, “Paul sent the 150; the other guy sent the 100, 150. We have the 100, all we have to do is sit and wait for the stuff now.” Later that evening, someone knocked on the door of 1207 and identified himself as “It’s Buddy,” from Indiana, and asked, “Do you have anything yet?” Warren responded, “No, not yet.” At 10:30 A.M., June 23, 1969, defendant Lopez was first seen leaving a Flash cab in front of the Holiday Inn, where he was met by Warren. Lopez was staying in Room 1220, down the hall from 1207. Room 1220 was obtained by Warren, registered in the name of A. Vitali and paid for by Lopez. Later that day, Lopez and Warren were seen together in the lobby of the Holiday Inn. About 12:40 P.M. Agent Vinsik heard the telephone ring in 1207 and Warren’s voice say, “American Airlines Flight 249 arriving at 10:00 o’clock Chicago time, A. Vitali,” and, after a pause, “I’ll pick you up.” About 1:00 P.M., there was a knock on the door of 1207, and Warren’s voice asked, “Who is it?” The answer was, “It’s me, the devil.” Warren then said he didn’t have anything yet, but it would cost a thousand dollars an ounce and it would be good stuff. Later, at about 8:30 P.M., Warren was observed going to the American Airlines terminal, O’Hare International Airport. He asked about Flight 249 and was informed it had been cancelled. During the next day, June 24, 1969, Agent Cruz, who speaks Spanish, overheard Lopez and Gobel discuss how much money they were going to make. Agents heard numerous telephone calls and people going and coming from 1207 during the evening hours. About 6:30 P.M., Troche was seen leaving a cab, carrying a black attache case, getting a room assignment and then going up to 1207. After Troche entered the room Warren asked, “Where is it?” Troche answered. “Here it is.” Warren stated, “The stuff looks good. Let’s weigh it and get out of here. We will hold the customers downstairs and I’ll tell them the price.” Agents heard a set of scales banging up and down. Later, Lopez was heard to say, “Let’s get going. Let’s get out of here.” Agent Vinsik then stood by the door of 1209 and waited for the door to 1207 to open. When Lopez opened the door of 1207 about ten agents, led by Vinsik, immediately entered the room and without delay arrested Lopez, Warren and Gobel. The arrest occurred about 7:45 P.M. on June 24, 1969. The agents did not use a passkey but, after hearing that Lopez was ready to leave, waited outside in the hallway for someone inside Room 1207 to open the door. On a desk located adjacent to the common wall in 1207 were several bags of a white powder, a scale, some strainers and a can of dextrose anhydrous Merck. There was testimony that dextrose anhydrous Merck is frequently used to cut and mix a stronger quality of heroin to a lesser quality for use. It was shown that the 474 grams of heroin seized from the desk in 1207 were 100 per cent pure heroin. Agent Vinsik testified that “[a]s soon as the door was opened, I went right in” and that Lopez “never got outside the room.” The agents had neither an arrest warrant nor a search warrant. Prior to their entry they made no announcement of their identity or purpose. As soon as they entered the room, they arrested and handcuffed Lopez and gave him Miranda warnings, as they also did to Warren and Gobel. At a pre-trial hearing on February 29, 1972, a motion to suppress the evidence seized in Room 1207 was denied, as was a motion requesting the trial judge to inspect the scene of the arrest. A motion to have the jury view Rooms 1207 and 1209 was made during trial and denied. I Citing Title 18, U.S.C.A. § 3109, defendant first argues that the trial court erred in admitting into evidence the 474 grams of pure heroin because the arresting officers failed to announce their authority and purpose before entering Room 1207. No claim is made that the agents needed either a search warrant or an arrest warrant. It is conceded that § 3109 applies where an entry is made to effect an arrest without a warrant. Sabbath v. United States, 391 U.S. 585, 588-589, 88 S.Ct. 1755, 20 L.Ed.2d 828 (1968); Miller v. United States, 357 U.S. 301, 306, 78 S.Ct. 1190, 2 L.Ed.2d 1332 (1958). Relying upon Sabbath and Miller, defendant argues that § 3109 requires that prior to entering a dwelling, officers must make (1) an announcement of their authority to make the arrest, and (2) an announcement of their purpose to make an arrest, and that failure to do so vitiates an otherwise valid arrest and search and seizure incidental to such an arrest. Defendant reads the evidence at the pre-trial suppression hearing as showing that the agents failed to comply with the requirements of § 3109. We do not agree. In the first place, we find Sabbath and Miller distinguishable on their facts from the case at bar. In Sabbath, federal officers opened a closed but unlocked door without announcing their authority or purpose. In Miller, the door was locked with a door chain, and the arresting officers put their hands inside the door, ripped the chain off and then entered without demanding admission or stating the purpose of their presence or placing the occupant under arrest until after they had entered his apartment. Mr. Justice Brennan, speaking for the majority in Miller, analogized the requirements of § 3109 with the requirements of local District of Columbia law and found them substantially identical. 357 U.S. at 306, 78 S.Ct. 1190. The majority finally stated: “Every householder, the good and the bad, the guilty and the innocent, is entitled to the protection designed to secure the common interest against unlawful invasion of the house. The petitioner could not be lawfully arrested in his home by officers breaking in without first giving him notice of their authority and purpose. Because the petitioner did not receive that notice before the officers broke the door to invade his home, the arrest was unlawful, and the evidence seized should have been suppressed.” (Emphasis added.) Id. at 313-314, 78 S.Ct. at 1198. In Sabbath, Mr. Justice Marshall took note of the various means of entry found violative of § 3109, and said: “And it has been held that § 3109 applies to entries effected by the use of a passkey, which requires no more force than does the turning of a doorknob. An unannounced intrusion into a dwelling — what § 3109 basically proscribes — is no less an unannounced intrusion whether officers break down a door, force open a chain lock on a partially open door, open a locked door by use of a passkey, or as here, open a closed but unlocked door. The protection afforded by, and the values inherent in, § 3109 must be ‘governed by something more than the fortuitous circumstance of an unlocked door.’ ” (Citations and footnotes omitted; emphasis added.) 391 U.S. at 590, 88 S.Ct. at 1758. Further, in reference to whether “exigent circumstances” mentioned in Miller might excuse compliance with § 3109, the Court noted that the agents did not “make any independent investigation of petitioner prior to setting the stage for his arrest with the narcotics in his possession.” Id. at 591, 88 S.Ct. at 1759. In the case now before us we find that none of the situations outlined in either Miller or Sabbath exist here. The agents had kept a constant surveillance of the premises and the four defendants for several days. There was probable cause to believe that heroin was unlawfully brought into Room 1207, that defendant Lopez was a party to the crime and was about to leave the room. Lopez voluntarily opened the door in the act of leaving the room. As Agent Vinsik testified on cross-examination: “* * * We had planned and heard conversations which told us the narcotics were in the room at that time. We could hear them talking, Mr. Lopez was going to leave the room, and we could then go in and make the arrest at the time he opened the door.” This is exactly what the agents did. Under the facts of this case, we have found no authority, and none has been cited, which would justify our finding that the agents were required to comply with the provisions of § 3109. Defendant cites United States v. Likas, 7 Cir., 448 F.2d 607 (1971), where the agents entered defendant’s apartment to execute a search warrant without first announcing their authority and purpose. That case should afford defendant cold comfort here. In Likas, the agents first broke down the apartment door with a sledge hammer and, of course, we upheld the suppression of the seized evidence. We have considered other eases cited by defendant but are not persuaded that they either justify or dictate a result contrary to the one we have reached on this issue. Cf. United States v. Vargas, 9 Cir., 436 F.2d 1280 (1971). We hold that the trial court did not err in admitting into evidence the 474 grams of heroin seized incidental to a lawful arrest of defendant. II Defendant charges that the trial court abused its discretion in refusing his counsel’s request to view the scene of the arrest at the time of the pre-trial suppression hearing on February 29, 1972, and in denying defendant’s motion to have the jury view the scene during the trial the next week. We find no merit in these contentions. The commission of the charged offenses occurred on June 24, 1969, or about two years and eight months before the requests were made. At no time did defendant offer any proof to sustain his motion, other than his counsel’s statements. Many variables enter into such a “view,” including the surrounding physical condition of the premises and the many personal factors involving the several persons concerned. It is well established that the granting or denying of such a motion rests within the discretion of the trial court and is reviewable only for abuse. In United States v. Pinna, 7 Cir., 229 F.2d 216, 219 (1956), we said: “It seems to us that too many uncertain factors were involved to have made such view or inspection of any value.” This was reaffirmed in Hughes v. United States, 9 Cir., 377 F.2d 515, 516 (1967). We hold that the trial court did not abuse its discretion in denying defendant’s motion to view the scene of the arrest. III Finally, defendant suggests that, in any event, this case should be remanded to the district court so that he may be afforded a hearing to determine whether this is an appropriate case for the sentence to be suspended and defendant to be placed on probation. Defendant was tried during the first few days of March 1972. He was sentenced on March 7, 1972, to serve five years in a federal penitentiary pursuant to 21 U.S.C.A. § 174. The conspiracy and substantive counts charged violations on or about June 24, 1969. At that time he was subject to a mandatory-minimum sentence of five years, which could not be suspended, nor could probation be granted. These provisions were repealed by the Comprehensive Drug Abuse Prevention and Control Act of 1970, Pub.L. 91-513, 84 Stat. 1236, 21 U.S.C.A. § 801 et seg., effective May 1, 1971. Defendant relies upon United States v. Robinson, 7 Cir., 466 F.2d 780 (1972), and United States v. McGarr, 7 Cir., 461 F.2d 1 (1972). Insofar as these two cases relate to suspension of sentence and probation, they were in effect overruled by the recent decision of the Supreme Court in Bradley v. United States, 410 U.S. 605, 93 S.Ct. 1151, 35 L.Ed.2d 528 (1973). In Bradley, the Court held: “The District Judge had no power to consider suspending petitioners’ sentences or placing them on probation.” Id., 93 S.Ct. at 1155. In view of Bradley, there is no occasion to remand this matter to the district court for reconsideration. Consistent with this opinion, the judgment of the district court is in all respects affirmed. Affirmed. . Miranda v. Arizona, 384 U.S. 436, 36 S.Ct. 1602, 16 L.Ed.2d 694 (1966). . After leaving 1207 certain agents went to Room 3105, where Troche was the registered occupant. Without warning and by use of the pass hey, they entered the room, arrested Troche and seized a packet of heroin. This evidence was ordered suppressed on March 1, 1972, following the pre-trial hearing the previous day. . “The officer may break open any outer or inner door or window of a house, or any part of a house, or anything therein, to execute a search warrant, if, after notice of his authority and purpose, he is refused admittance or when necessary to liberate himself or a person aiding him in the execution of the warrant.”

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2024-08-24T03:29:51.129235

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UNITED STATES of America, Appellee, v. Fernando Luis RODRIGUEZ-SANDOVAL, Defendant, Appellant. No. 72-1003. United States Court of Appeals, First Circuit. Argued Feb. 5, 1973. Decided March 23, 1973. Gerardo Ortiz Del Rivero, San Juan, P. R., by appointment of the Court, for appellant. Jorge Rios Torres, Asst. U. S. Atty., with whom Julio Morales Sanchez, U. S. Atty., was on brief, for appellee. Before COFFIN, Chief Judge, MeENTEE and CAMPBELL, Circuit Judges. . “Indeed the better practice would be to instruct the jurors that they may draw the inference unless the evidence in the case provides a satisfactory explanation for the rproved fact], omitting any explicit reference to the statute itself in the charge.” United States v. Gainey, supra at 71 n. 7, 85 S.Ct. at 759. McENTEE, Circuit Judge. Fernando Luis Rodriguez Sandoval was tried and convicted for the purchase, sale, concealment and transportation of heroin in violation of 26 U.S.C. §§ 4704 (a), 4705(a), 21 U.S.C. § 174, and was sentenced to concurrent terms of fifteen years imprisonment. He appeals from this conviction as well as from the district court’s denial of his motion for a reduction of sentence. We affirm. Sandoval’s primary contention on appeal relates to the prosecution’s alleged misuse of the evidentiary presumptions written into 26 U.S.C. § 4704(a) and 21 U.S.C. § 174. The latter section authorizes conviction upon evidence that the defendant had possession of a narcotic drug “unless the defendant explains the possession to the satisfaction of the jury.” Similarly, § 4704(a) provides that “the absence of appropriate taxpaid stamps from narcotic drugs shall be prima facie evidence of a violation of this subsection by the person in whose possession the same may be found.” In making his opening statement, the United States Attorney informed the jury that the government would rely on these presumptions, which he said would “authorize conviction unless the possession [of heroin] is explained to you by the defendant to your satisfaction.” In addition to these comments, the prosecutor made several similar references to the presumptions, both in his opening statement and in his summation. Appellant contends that these statements necessarily and impermissibly drew the jury’s attention to the defendant’s failure to testify, and that his conviction must therefore be reversed under our decision in United States v. Flannery, 451 F.2d 880 (1st Cir. 1971). This argument is without merit. When read in context, it is clear that the prosecutor’s remarks were intended only to explain to the jury what the government’s evidence would be and the theory under which it would press for conviction. Such an explanation could hardly have been made without some reference to the presumptions on which the government intended to rely. While the avoidance of any language having even a slight tendency to highlight the defendant’s failure to testify or produce evidence would have been preferable, cf. United States v. Gainey, 380 U.S. 63, 71 n. 7, 85 S.Ct. 754, 13 L.Ed.2d 658 (1965), we do not believe that the prosecutor’s statements caused appellant to suffer any substantial prejudice. The district court took great pains to instruct the jury that the defendant did not have to testify or call witnesses and that the “explanation” of his possession of narcotics could come from any of the facts and circumstances revealed by the evidence. In view of these instructions, the prosecutor’s accurate explanation of the statutory presumptions involved in this case does not warrant reversal. Appellant also objects to the court’s instructions to the jury on the ground that they made explicit reference to the statutory presumptions in issue, contrary to the “better practice” suggested by the Supreme Court in United States v. Gainey, supra, at 71, n. 7, 85 S.Ct. 754. While the “better practice” was admittedly not followed, Gainey does not require reversal if the “overall reference [of the charge] was carefully directed to the evidence as a whole, with neither allusion nor innuendo based on defendant’s decision not to take the stand.”. Id. at 71, 85 S.Ct. at 759. As noted above, the court carefully instructed the jury that the statutory presumptions did not have to be rebutted by the defendant’s own testimony or evidence in his behalf, but could be overcome by any evidence in the case. These instructions amply met the standard set forth in Gainey, supra. See United States v. Armone, 363 F.2d 385 (2d Cir.), cert. denied, 385 U.S. 957, 87 S.Ct. 391, 17 L.Ed.2d 303 (1966). The only other matter which warrants our consideration is the question of whether the court contravened the holdings of North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969) and Marano v. United States, 374 F.2d 583 (1st Cir. 1967) in sentencing appellant to a term of fifteen years imprisonment when he had received only a ten year sentence following his first conviction of the charges involved in this case. In Maraño, supra, we set forth the general principle that a defendant may not be given a more severe sentence upon retrial than he received following his original conviction. We recognized, however, that a trial judge may properly consider the defendant’s conduct subsequent to the reversal of his first conviction in deciding what sentence to impose after retrial. In the present case, the relevant facts are as follows. Following appellant’s conviction below, a sentencing hearing was held on November 26, 1971, at which time the United States Attorney informed the court that Sandoval had been twice arrested in New York for narcotics violations while on bail pending retrial. The court specifically stated, however, that it would not consider this information in imposing sentence, adding somewhat cryptically that “what I have before me is enough.” The court then proceeded to sentence appellant to six concurrent terms of fifteen years imprisonment. After the appeal in this case had been filed, defendant made a motion in the district court for a reduction of sentence. In response, the trial judge issued a certificate to this court requesting that the case be remanded for resentencing, on the grounds that the sentence of November 26 might have been illegal under North Carolina v. Pearce, supra and Marano v. United States, supra. We remanded the ease for the limited purpose of considering the motion to reduce sentence, without prejudice to the government’s arguing that the court could consider subsequent conduct as defined in Maraño although it had declined to consider it at the time of the original re-sentencing. At a subsequent hearing, the district court clearly indicated that it was now considering a portion of the pre-sentence report which related subsequent circumstances concerning Sandoval’s New York drug arrests and two forfeitures of bail for his failure to appear as ordered, and proceeded to deny the motion on the basis of appellant’s conduct while free on bail pending retrial. Appellant appears to argue that the court’s initial failure to consider his subsequent conduct irretrievably tainted any increase in his sentence. We do not agree. The record clearly indicates that on remand the court reconsidered the November 26 sentence in light of Maraño and Pearce, read the presentence report it relied on, gave appellant an opportunity to respond, and affirmatively stated its reliance on subsequent conduct in reaffirming the increased sentence. Although this decision was made on a motion to reduce, the nature of the district court’s certificate and our remand make it perfectly clear that the decision was equivalent to a full reconsideration and resentencing. Since the court applied the proper standard on remand, we will not disturb on appeal its decision as to appellant’s sentence. Affirmed. . Repealed, Act of Oct. 27, 1970, Pub.L. No. 91-513, title III, § 1101(b)(3)(A), 84 Stat. 1292, effective date of repeal being May 1, 1971, Pub.L. 91-513, § 1105(a). The subsection provided in relevant part: “It shall bo unlawful for any person to purchase, sell, dispense, or distribute narcotic drugs except in the original stamped package or from the original stamped package; . . . . ” . Repealed, Act of Oct. 27, 1970, Pub.L. No. 91-513, title III, § 1101(b)(3)(A), 84 Stat. 1292, effective date of repeal being May 1, 1971, Pub.L. 91-513, § 1105 (a). The subsection provided in relevant part: “It shall be unlawful for any person to sell, barter, exchange, or give away narcotic drugs except in pursuance of a written order of the person to whom such article is sold, bartered, exchanged, or given, on a form to be issued in blank for that purpose by the Secretary or his delegate.” . Repealed, Act of Oct. 27, 1970, Pub.L. No. 91-513, title III, § 1101(a)(2), (4), 84 Stat. 1291, effective date of repeal being May 1, 1971, Pub.L. 91-513, § 1105 (a). The section provided as follows: “Whoever fraudulently or knowingly imports or brings any narcotic drug into the United States or any territory under its control or jurisdiction, contrary to law, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of any such narcotic drug after being imported or brought in, knowing the same to have been imported or brought into the United States contrary to law, or conspires to commit any of such acts in violation of the laws of the United States, shall be imprisoned not less than five or more than twenty years and, in addition, may be fined not more than 820,000.” . Even if we were to accept appellant’s analogy between the circumstances of this case and Flannery, that decision would not be relevant in the present context. Flannery is applicable only to cases going to trial after November 12, 1971; trial in the instant case began on September 20, 1971. . Appellant’s original conviction was reversed by this court in Rodriguez-Sandoval v. United States, 409 F.2d 529 (1st Cir. 1969).

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2024-08-24T03:29:51.129235

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Geneva GRAY, Administratrix of the Estate of Roy A. Gray, Deceased, Plaintiff-Appellant, v. L. J. NAVY TRUCKING COMPANY, INC., Defendant-Appellee. No. 72-1522. United States Court of Appeals, Sixth Circuit. Argued Nov. 29, 1972. Decided March 28, 1973. Charles E. Brant, Columbus, Ohio, for plaintiff-appellant; John Wolfe, Moore, Wolfe & Boll, Ironton, Ohio, Glander, Brant, Ledman & Newman, Columbus, Ohio, on brief. Robert L. Summers, Hamilton, Kramer, Myers & Summers, Columbus, Ohio, on brief, for defendant-appellee. Before PHILLIPS, Chief Judge, and PECK and LIVELY, Circuit Judges. PECK, Circuit Judge. This is an appeal from a jury verdict in a wrongful death action. The uncontested facts show that the appellant’s husband, Roy Gray, was killed when his automobile struck the appellee’s tractor-semitrailer in June of 1966. As Gray was proceeding south on the west side of U.S. Route 23, Rufus Sifford drove the appellee’s truck out of a restaurant parking area and across the two northbound lanes and into the southbound lanes. It was at this point that Gray’s Volkswagen struck the front of the right rear set of wheels of the trailer; Sifford and his helper in the cab were uninjured, and Gray died instantly. The appellant then brought this wrongful death action, to which the defendant trucking company interposed a contributory negligence defense, alleging and attempting to prove that the accident was Gray’s fault because he was driving without headlights and because he was driving while intoxicated. In support of its contention that Gray was driving while intoxicated, the appellee offered three documentary exhibits, each of which was admitted into evidence under the Federal Business Records Act, 28 U.S.C. § 1732(a), “for all purposes," and the plaintiff has appealed from that order. Appeal is also taken from the ruling of the District Court allowing the introduction of a deposition in which the investigating officer stated his opinion that the cause of the accident was Mr. Gray’s driving while intoxicated. The first contested document is a laboratory report from Mercy Hospital which states that the blood alcohol content of the tested blood was 459 mg. per 100 cc’s of blood. The appellant contends that this report is inadmissible under the Federal Business Records Act because the defense did not show that the blood tested was Gray’s, the procedure used in taking the blood sample, the manner of making the test, nor the chain of custody of the sample. Common law provided that out of court statements contained in business records would be inadmissible over a hearsay objection. However, it was soon recognized that records kept in the ordinary course of business are usually accurate and reliable, and an exception to the hearsay rule was developed, the most burdensome feature of which was the requirement that each participant in the making of the record, whether entrant or informant, be produced or at least be identified as unavailable to verify the records. McCormick, Evidence, § 289. This aspect of the exception was dealt with by the adoption of what is now the Federal Business Records Act, which eliminated the requirement that the maker of the record verify its authenticity. Schmeller v. United States, 143 F.2d 544, 550 (6th Cir. 1944). The legislative history of the Act .indicates that the intention of the drafters was not to make admissible otherwise incompetent or irrelevant evidence merely because such evidence appeared in a record made in the regular course of business, Gordon v. Robinson, 210 F.2d 192, 196 (3d Cir. 1954), but only to “facilitate admission of records which experience has shown to be quite trustworthy.” Palmer v. Hoffman, 318 U.S. 109, 113, 63 S.Ct. 477, 480, 87 L.Ed. 645 (1943). Since the Act is an exception to the hearsay rule, it would seem that it should not serve to cure any nonhearsay defects, such as relevancy or competency. However, an examination of the leading cases indicates that the courts are in irreconcilable conflict over the issue of whether the Act serves to cure more than mere hearsay defects related to the making of the business entry. For example, Thomas v. Hogan, 308 F.2d 355 (4th Cir. 1962) held that the Act presumes that diagnoses and scientific tests have been properly made by qualified personnel, and that the qualifications of the diagnostician and the procedures involved in running the test and the chain of custody of the samples need not be established. Schmeller v. United States, supra, held that the competency of records admitted under this Act must be otherwise established. The conclusion of the major commentators is in accord with prior holdings of this Court that the Act should be interpreted as abolishing only the requirement that the one who records the entry on the reports of others need have knowledge of the facts himself. E. g., McCormick, Evidence, § 286 (1954); 5 Wigmore, Evidence, § 1424 (3d Ed. 1940); Jones, Evidence, § 12:11 (6th Ed. 1972). The appellee relies upon Thomas v. Hogan, supra, which held that the results of a blood test were admissible under the Act. While we note that the Fourth Circuit observed that the Sixth Circuit had already reached a contrary result in Baltimore & Ohio R. R. v. O’Neill, 211 F.2d 190 (6th Cir.), reversed on other grounds, 348 U.S. 956, 75 S.Ct. 447, 99 L.Ed. 747 (1954), we think that the facts of Thomas differ substantially from those of this ease. In Thomas, the attending physician, having been qualified as an expert witness, identified the test as a relatively simple, commonly performed scientific procedure. He testified concerning the extraction of the blood sample and the required laboratory procedures, and that he himself had made the final determination concerning the blood alcohol ratio. Similar facts are notably lacking in this case. For example, there is no evidence to qualify the test as scientifically acceptable or validly performed; nor was this an entry taken from the regular records of the hospital concerning a patient. The test was not performed in the regular course of patient treatment, but on a specimen of blood brought into the hospital under circumstances which were not established. The consequent report of the results of this test simply do not rise to the level of a business record. In Taylor v. B. Heller & Co., 364 F.2d 608 (6th Cir. 1966), this Court held that records sought to be admitted under this Act must be shown to be the product of the ordinary routine of business. Since the exception to the hearsay rule is predicated upon the reliability of such routine, this showing is critical and indispensible. The appellee contends that the Act eliminates the necessity of establishing the propriety of the test, since the Act presumes the laboratory procedure to be competent. Such a presumption is not consistent with the purposes of the Act. In Wheeler v. United States, 93 U.S.App.D.C. 159, 211 F.2d 19 (1953), certain slides used in a laboratory analysis were held to have been properly received only after a showing that they were of the type normally used in a procedure regularly followed by the hospital, and that proper methods of analysis were used which were free from error. Entries made as regular routine matters in laboratory notebooks cannot act to prove themselves merely upon a showing by the recorder that he made the entry. Teter v. Kearby, 169 F.2d 808, 816-817, 36 CCPA 706 (1948). In this case, not only was no showing made concerning the testing procedures, but no showing has been made concerning the precautions, if any, taken between the taking of the blood sample at the scene of the accident and its course of travel to the hospital laboratory. The regularity of the making of the entry of the results of the blood test cannot in bootstrap manner serve as a presumption that the blood was properly taken from the decedent and properly transferred to the hospital. “The legislative history of the Business Records Act clearly shows that it was not the intent of the draftsmen to make admissible all evidence, no matter how incompetent or irrelevant, merely by virtue of the fact that it appeared in a record made in the regular course of business.” Gordon v. Robinson, 210 F.2d at 196. In admitting the hospital report, the District Court failed to insist upon a showing of relevance and competence, and the obvious prejudicial effect of this ruling alone would require reversal, even if the error had not been compounded by the admission of this report in two different forms, as hereinafter discussed. The District Court’s order also admitted a coroner’s report which contained the following entry: “16 June 66-Report received from Mercy Hospital Portsmouth, Clinical Lab on specimen of blood of Mr. Gray sent by me by State Patrolman Baughman. Test requested-Blood alcohol. Result: 459 mg ethyl alchol [sic] per 100 cc blood. Paul Jones, M.D.” This entry incorporates the blood test report discussed above, and is as inadmissible as is the original report. If we must reject the report itself as incompetent, we cannot permit its admission because it is contained in another report. This coroner’s report also contains statements from the truck operator and the relief driver concerning their observations just prior to the accident. These witnesses testified at trial, and there appears to be no reason why these statements should have been admitted in hearsay form. A misplaced reliance on the Federal Business Records Act does not serve as a substitute for essential elements of competency. The District Court’s order also admitted the report of the investigating Highway Patrolman. This report also contained a hearsay reference to the blood test; as noted above, a reference to the Federal Business Records Act does not serve to make such hearsay evidence admissible. The report also contained the entry: “Coroner Jones stated this test indicated intoxication.” The obvious problems created by this kind of triple hearsay do not require further discussion in light of our conclusions concerning the other two documents. The testimony of the Patrolman which would be admissible would in-elude only his personal observations from his arrival on the scene of the accident about forty minutes thereafter, and the conclusions which, as an expert in the field of accident investigation, he might draw therefrom. Such observations could not, of course, include the amount of alcohol in the decedent’s blood. In summary, the contents of the three reports under consideration constitute opinions, conclusions and conjecture which would only be admissible directly from a witness after a proper foundation has been laid; they do not become automatically admissible simply because they have been written down in an official report. In 1944, this Court held that the “Shop Book Act,” the precursor of the present Act, was enacted for the purpose of eliminating the technical requirement of proving the authenticity of business records and memoranda by the testimony of the maker. “The mere fact that the page offered in evidence is taken from a business file and is otherwise proved in compliance with § 695 does not establish its competency. . . . Section 695 in no way repealed the ordinary requirements of relevancy and competency. The District Court . . . should have excluded the hearsay and other incompetent evidence.” Schmeller v. United States, 143 F.2d at 550. The hearsay portions of these exhibits can easily be deleted by the District Court; the ruling that these exhibits should be admitted in full and for all purposes was unnecessarily inclusive. An appeal is also taken from the admission over objection of the patrolman’s opinion as to the cause of the accident. When asked on deposition as to his opinion as to the cause of the accident, based upon his observations of the scene of the accident and the facts uncovered during his investigation, the patrolman stated that the main cause of the accident was that the decedent was driving without his headlights and while under the influence of alcohol. The law of Ohio is that an expert witness is permitted to express his opinion as to the ultimate fact in issue only when the fact to be determined by the jury depends upon the interpretation of scientific facts which are beyond the experience, knowledge or comprehension of the jury. McKay Machine Co. v. Rodman, 11 Ohio St.2d 77, 228 N.E.2d 304 (1967); Dickerson v. Shepard Warner Elevator Co., 287 F.2d 255 (6th Cir. 1961); Shepherd v. Midland, 152 Ohio St. 6, 87 N.E.2d 156 (1949). In addition, Ohio law does not permit an expert opinion to be based upon the opinion of others, either in evidence or not in evidence. Zelenka v. Industrial Comm’n., 165 Ohio St. 587, 138 N.E.2d 667 (1956); see also: Taylor v. B. Heller & Co., supra. This opinion, based upon the hearsay opinion of intoxication of the coroner’s, which itself was based upon the results of a blood test which was not properly admitted should have been excluded from the patrolman’s deposition when it was read to the jury. The judgment of the District Court is reversed, and the cause is remanded for further proceedings consistent with this opinion.

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Caselaw Access Project

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UNITED STATES of America, Plaintiff-Appellee, v. William GRONER, d/b/a Lucky Distributors, Defendant-Appellant. No. 71-1091. United States Court of Appeals, Fifth Circuit. Jan. 11, 1972. Rehearing En Banc Granted March 28, 1972. Mel S. Friedman, W. B. (Bennie) Housen, Jr., of Maley & Friedman, Will Gray, Houston, Tex., for defendant-appellant. Eldon B. Mahon, U. S. Atty., Wm. F. Sanderson, Jr., Asst. U. S. Atty., Dallas, Tex., Frank D. McCown, Asst. U. S. Atty., Fort Worth, Tex., for plaintiffappellee; Henry E. Petersen, Asst. Atty. Gen., Larry E. Butcher, Atty. Dept, of Justice, Washington, D. C., of counsel. Before THORNBERRY, MORGAN and CLARK, Circuit Judges. THORNBERRY, Circuit Judge: This is an appeal from the conviction of William Groner on an indictment charging him with two counts of knowingly using a common carrier in interstate commerce to transport a quantity of obscene books, in violation of Title 18, U.S.C.A., Section 1462. Groner alleges numerous errors in the district court’s judgment. We find it necessary to discuss only two of these allegations and to render a decision on only one. The government at trial introduced evidence that Groner caused the books in question to be shipped in interstate commerce from North Hollywood, California to Dallas, Texas. At the close of its case, the government presented four of the books — Oral Orgies, Eager Mouths, First in Line, and Blood Orgy — to the jury for their perusal. No expert testimony or other evidence was presented to show that the books were themed to appeal predominately to the prurient interests of its readers, went substantially beyond the community limits of candor in their description of sex and nudity, or were devoid of all redeeming social value. Although Groner presented testimony of experts in the fields of literature and psychology to the effect that none of these characteristics could be applied to the books, the jury nevertheless chose to convict him. Groner contends that (1) the books are not obscene as a matter of law, and (2) the books themselves did not provide sufficient evidence of obscenity to sustain the jury verdict. There remains little doubt that this Court is obligated to make an independent evaluation on the issue of whether the material in question is obscene. The issue of obscenity involves the application of first amendment rights to the printed word. The courts, not the reasonable jury or even the majority of reasonable men, are responsible for the protection of freedom of speech. The substantial evidence test, usually employed to reinforce jury verdicts, thus cannot be utilized to apply these constitutional doctrines. We have little trouble in finding the books involved in the instant case to be vile, filthy, disgusting, vulgar, and, on the whole, quite uninteresting. We do, however, have difficulty in equating these adjectives with the constitutional definition of obscenity. Recent Supreme Court opinions furnish little guidance in this area. There exists between Redrup v. New York, 386 U.S. 767, 87 S.Ct. 1414, 18 L.Ed.2d 515 (1967), and United States v. Reidel, 402 U.S. 351, 91 S.Ct. 1410, 28 L.Ed.2d 813 (1971), a wide chasm of confusion, which is accentuated by frequent Supreme Court reversals in obscenity cases, citing only Redrup. Much of the material in these cases appears to be more disgusting than that involved in the instant case; some of the material found in the past to be obscene appears infinitely more tasteful, if such an adjective can be allowed in this area of the law. There remains, however, this Court’s determination of whether the particular material involved in the instant case is obscene and hence constitutionally unprotectible, as that term is interpreted by the Supreme Court. We are fully aware of the test enunciated in Roth v. United States, 354 U.S. 476, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957): 1. Whether the materials, taken as a whole, appeal primarily to the prurient interests of the average adult; 2. Whether the materials are patently offensive because they go substantially beyond the customary limits of candor in their description of sex and nudity; and 3. Whether the materials are utterly without redeeming social value. In spite of indications to the contrary in Redrup, we believe this test was clearly sustained in the Supreme Court’s most recent pronouncement in United States v. Reidel, supra, wherein the Court stated, “Roth has not been overruled. It remains the law in this Court and governs this case.” 402 U.S. at 354, 91 S.Ct. at 1412. Knowing the legal test for obscenity and applying the same in light of recent Supreme Court decisions, however, are two entirely different matters. We are completely incapable of applying the test in the instant case. Without some guidance, from experts or otherwise, we find ourselves unable to apply the Roth standard with anything more definite or objective than our own personal standards of prudence and decency, standards which should not and cannot serve as a basis for either denying or granting first amendment protection to this or any other literature. The necessity for expert testimony to establish the Roth elements was first explored in United States v. Klaw, 2d Cir. 1965, 350 F.2d 155. In Klaw, involving books and pictures much more graphically depraved than the books involved in the instant case, the government chose to rest its case largely on a showing of the material itself insofar as proof of their obscene nature was concerned. The Second Circuit, recognizing that the defendant out of apparent necessity had made no claim that the material in question had any redeeming social, artistic or literary value whatsoever, nevertheless held that the lack of expert testimony on the issues of prurient appeal and community standards was fatal to the prosecution. In so doing, the Court reasoned as follows: In this case, however, the only predicate for any conclusion about prurient appeal was the material itself, as if res ipsa loquitur. The jurors were, therefore, left to speculate. They were invited to behold the accused material and, in effect, conclude simply that it is undesirable, it is distasteful, it is disgusting. Knowing perhaps that they would not be interested in obtaining more of the material they might wonder why anyone else would, and conclude that the only answer is “prurient appeal.” Because the jury was given no basis for understanding exactly how and why the material appeals to its audience, whether deviate or average person, it may too readily supply an explanation — “prurient appeal.” Even if the jury did not consist of twelve carefully selected Anthony Comstocks, it might well believe that the predominant appeal of certain acknowledged works of art, sculpture and literature found in all our well-known museums and libraries would be to the prurient interest of the average person, or perhaps someone else. But if that be so, can we allow the censor’s stamp to be affixed on the basis of an uninformed jury’s misconceptions ? 350 F.2d at 167. Even with adequate proof under the average man test, there might still be problems, for the jury was charged to consider the material from the standpoint of the average man in the nation as a whole. We very much doubt whether twelve random New Yorkers can make such a judgment without being further informed about the “common conscience of the nation,” if there be such a thing. 350 F.2d at 168 n. 14. Although there is much conflict on this issue, the Second Circuit’s view has been followed by some courts. For example, in In re Giannini, 69 Cal.2d 563, 72 Cal.Rptr. 655, 446 P.2d 535 (1968), the California Supreme Court, finding expert testimony to be required on the issue of community standards, reasoned as follows: Finally, even if the jury should be deemed to be a metaphysical embodiment of the “community,” and therefore intrinsically cognizant of community standards, proof of community standards would nevertheless be indispensable to effective appellate review. An appellate court must reach an independent decision as to the obscenity of a material. . . . Since an appellate court certainly does not in any sense compose a cross-section of the community, it cannot effectively carry out this function in the absence of evidence in the record directed toward proof of the community standard. We cannot assume that jurors in themselves necessarily express or reflect community standards; we must achieve so far as possible the application of an objective, rather than a subjective, determination of community standards. An even-handed application of the criminal law, even with evidentiary guidance . . ., is sufficiently difficult in an area so confusing and intricate as obscenity. To sanction convictions without expert evidence of community standards encourages the jury to condemn as obscene such conduct or material as is personally distasteful or offensive to the particular juror. . . . “[C]ommunity standards . . . can . . . hardly be established except through experts. . . . There is no external measuring rod for obscenity. Neither, on the other hand, is its ascertainment a merely subjective reflection of the taste or moral outlook of individual jurors or individual judges. . . . Their interpretation ought not to depend solely on the necessarily limited, hit- or-miss, subjective view of what they are believed to be by the individual juror or judge. It bears repetition that the determination of obscenity is for juror or judge not on the basis of his personal upbringing or restricted reflection or particular experience of life, but on the basis of ‘contemporary community standards.’ ” See also Luros v. United States, 8th Cir. 1968, 389 F.2d 200. The government contends this position ignores this Circuit’s holding in Kahm v. United States, 5th Cir. 1962, 300 F.2d 78. There the Court stated: It is plain to us that when the jury was instructed by the trial court in language such as that approved by the Supreme Court in the Roth case, it was fully capable of applying those standards and that charge to the materials shown to have been mailed here. Nothing is more common than for a jury in a case involving charges of negligence, as for example negligent homicide, to determine whether the proven conduct measures up to the standards of a reasonably prudent man. We think it may fairly be said that no amount of testimony by anthropologists, sociologists, psychologists or psychiatrists could add much to the ability of the jury to apply those tests of obscenity to the materials here present. The Court in Kahm, however, was dealing with a circular composed entirely of isolated seedy excerpts from numerous racy novels, many of which had been found not to be obscene by the courts. The material there was graced with no plot, no character development, and no exemplification of independent literary efforts. Involved in the instant case are entire books endowed, albeit tenuously, with all the above-mentioned elements. The Court expressly excepted such a case from the principles enunciated there: It must be recalled that we are not dealing here with the problem of what happens when a defendant is charged with improper mailing of an entire book in which the literary, artistic or social values of the work must be considered and weighed against certain off-color passages to determine whether the latter are so dominant as to outweigh the other features of the work as a whole. In a case of that kind expert testimony could well be of some value to the jury. . 300 F.2d at 84 (emphasis added). The logic of this position is compelling. It becomes even more so when the possibility is considered that national, rather than state, community standards will be utilized to apply the Roth test. Jurors in an obscenity case are called upon to determine contemporary community standards and must then compare the materials in question to determine whether they go “substantially beyond the limits of candor” in describing sex or nudity. Each juror is an individual —separate in his morals, experience and taste. The only standards which govern his conduct and his judgment are his own, not those of the community as a whole, whether state-wide or national. Although such unfettered discretion is acceptable in determining questions of negligence, probable cause and intent, it has no place in determining whether material is to be armed with first amendment protection. We can come to no other conclusion under the circumstances. This Court finds itself in the same position as that of the jury in such a case. We cannot take judicial notice, without even a scintilla of evidence, of what constitutes the community standard of decency at this or any other time. If such a standard exists at all, we would expect that it would be in a constant evolutionary and even revolutionary flux, the fact of which militates against our exercising uninformed judgment at any particular point in time. At best it would be a matter of pure chance as to whether we as a Court, or as individuals left to our own devices and without the aid of evidence, could determine the correct standard. We confess that our reading is confined to books not at all analogous to the material involved in the instant case. Although we have always recognized the existence of such material, we have not in the past had occasion to examine it closely. This is, however, not to say that such literature has not found a certain modicum of acceptance in the community as a whole. We have only to peruse casually the titles and subject matter of many of the works found not to be obscene by the courts in recent years to see that standards of decency, or indecency, have passed us by. Feeling as we do that we cannot determine in a vacuum what the people of Dallas, Texas, the State, or the Nation consider as their limit of candor and their capacity for trash, we find ourselves completely incapable of ruling on this issue. Moreover, we think evidence of the materials’ prurient appeal was necessary. The material in the instant case does not appeal to the prurient interests of this Court. Indeed, we have trouble imagining its appealing to the prurient interests of any normal, sane, healthy individual. It is just too disgusting and revolting to be so classified. To allow a case to go to a jury of laymen under such circumstances is to invite the jurors’ equating patent offensiveness with prurient appeal and aiding suppression simply on the basis of speculation and suspicion about the prurient appeal of material to some known, undefined person whose psyche is not known. The possibility, even the probability, that jurors would be uncommonly sanctimonious or Puritanical in such a state of affairs should be obvious to anyone who has noted the numerous defeats of jury censors at the hands of the appellate courts. In short, we believe, as stated by the Second Circuit in Klaw: The courts may have opened the floodgates for horror and filth, but if they are to be closed it should be done by the careful drafting of proper laws by our duly elected representatives, and not by a combination of zealous governmental inspectors, prosecutors, and uninformed juries. Then the potential contributors to our culture may have some slight notion of the guidelines and the risks. Unless there be this protection, a witch hunt might well come to pass which would make the Salem tragedy fade into obscurity. Having in mind the alternatives of jail or freedom, courts must be aware of the facts of the “held-not-to-be-obscene” or “approved” Cases, and ensure that the proof is sufficient to allow a fact finder to set this case apart from them. Otherwise it would be altogether too easy for any prosecutor to stand before a jury, display the exhibits involved, and merely ask in summation: “Would you want your son or daughter to see or read this stuff?” A conviction in every instance would be virtually assured. 350 F.2d at 170. We do not view our failure to determine whether this material is obscene in the absence of expert testimony as an abdication of our judicial responsibility in this area of the law. Rather, it is the result of our realization that under the first amendment majority censors of one branch of our government should not and cannot be replaced by the minority suppressors of another branch, limited in their discretion only by their personal concepts of morality and taste. We wish to make it perfectly clear what we hold, and what we fail to hold today in the instant case. We have expressed no opinion on the issue of whether the material involved here is or is not obscene. In fact, our inability to do so is the basis for our holding that expert testimony is required on the elements of obscenity in order to furnish juries and this Court with an objective basis for deciding on the issue of first amendment rights. We are not prepared to go so far as to say that introduction of such evidence is necessary on all the elements of obscenity in all such cases. In some circumstances, the questioned material might be so terribly depraved and so lacking in candor that anyone would know without question that the community norm had been forsaken in the writer’s quest for sexual sensationalism. Moreover, under some circumstances, the appeal of the material could only be to the prurient interests of its readers, such as that found in Kahm v. United States, supra. We hold only that the material involved in the instant case does not reach this “plateau” of degradation. Thus, until the Supreme Court is able to formulate objective standards in this subjective area of the law, this Court will at least seek to base its judgment as much as possible on objective facts. The government’s burden of proof in these prosecutions necessitates its furnishing these facts to the Court. Because of our holding that the government has failed to carry its burden on the three elements of obscenity enunciated by the Supreme Court in Roth, we reverse the judgment of conviction and remand the cause for a new trial. CLARK, Circuit Judge (concurring): Judge Thornberry’s opinion is an excellent and absolutely accurate summation of the law as announced by present federal court decisions fixing (or more aptly, failing to fix) the respective limits of “free press” rights under the First Amendment and unprotected publications which exploit sexuality. However, as his opinion convincingly demonstrates, the judiciary has created a quagmire. Our recognition that a jury must have the opinion evidence of obscenity “experts” may very well compound, rather than aiding in solving, the dilemma. If I were not bound by these mutable precedents, I would unhesitatingly abandon the “national standard” concept and return the problem of what is unprotected hard-core prurience to the fifty individual laboratories — the States— which make up our united republic, with every confidence that they will protect federal Constitutional guarantees better than we. The chance that the traditional blue-nosed, puritanical Boston censor will ban a publication that ought to be protected, is far outweighed in my mind by the potential harm of the progeny which may follow a judicial foisting of the permissive licentiousness thought by some “expert” to be the majority standard elsewhere upon the citizens of that city. One more observation and I am done. I understand that the First Amendment protects publications and talk and only limited forms of action. But, I cannot fathom the logic of a legalism that asserts that this Amendment, which became a part of our Constitution in 1790, was ever intended, then or now, to mean that the several States may punish a nude female dancer in a private club who climaxes her performance by exposing her sex organs for indecent exposure while at the same time protecting an entrepreneur who films the illegal scene and sells it to the adult public at the same club. If reason is really the life of the law, as I conceive it to be, both classes of action ought to be State responsibilities. That is one function the simultaneously proposed and ratified Tenth Amendment would perform if we would but let it. Reluctantly, I concur. ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC Before JOHN R. BROWN, Chief Judge, and WISDOM, GEWIN, BELL, THORNBERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, IN-GRAHAM and RONEY, Circuit Judges. BY THE COURT: A member of the Court in active service having requested a poll on the application for rehearing en banc and a majority of the judges in active service having voted in favor of granting a rehearing en banc. It is ordered that the cause shall be reheard by the Court en banc on briefs without oral argument. The Clerk shall set a briefing schedule for the filing of supplemental briefs. Judge GOLDBERG dissents to submission on briefs without oral argument. . The statute provides in pertinent part: Whoever brings into the United States, or any place subject to the jurisdiction thereof, or knowingly uses any express company or other common carrier, for carriage in interstate or foreign commerce— (a) any obscene, lewd, lascivious, or filthy book, pamphlet, picture, motion-picture film, paper, letter, writing, print, or other matter of indecent character; or (b) any obscene, lewd, lascivious, or filthy phonograph recording, electrical transcription, or other article or tiling capable of producing sound Shall be fined not more than $5,000 or imprisoned not more than five years, or both, for the first such offense and shall be fined not more than $10,000 or imprisoned not more than ten years, or both, for each such offense thereafter. 38 U.S.C.A. § 3402. . Jacobellis v. Ohio, 378 U.S. 184, 84 S.Ct. 1676, 12 L.Ed.2d 793 (1964); Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959); Haldeman v. United States, 10th Cir. 1965, 340 F.2d 59; Kahm v. United States, 5th Cir. 1962, 300 F.2d 78; In re Giannini, 69 Cal.2d 563, 72 Cal.Rptr. 655, 446 P.2d 535 (1968); Hudson v. United States, 234 A.2d 903 (D.C.Ct.App.1967). . Burgin v. South Carolina, 404 U.S. 806, 92 S.Ct. 46, 30 L.Ed.2d 39 (1971); Bloss v. Michigan, 402 U.S. 938, 91 S.Ct. 1615, 29 L.Ed.2d 106 (1971); Childs v. Oregon, 401 U.S. 1006, 91 S.Ct. 1248, 28 L.Ed.2d 542 (1970); Hoyt v. Minnesota, 399 U.S. 524, 90 S.Ct. 2241, 26 L.Ed.2d 782 (1970); Walker v. Ohio, 398 U.S. 434, 90 S.Ct. 1884, 26 L.Ed.2d 385 (1970); Bloss v. Dykema, 398 U.S. 278, 90 S.Ct. 1727, 26 L.Ed.2d 230 (1970); Cain v. Kentucky. 397 U.S. 319, 90 S.Ct. 1110, 25 L.Ed.2d 334 (1970); Carlos v. New York, 396 U.S. 119, 90 S.Ct. 395, 24 L.Ed.2d 303 (1969); Henry v. Louisiana, 392 U.S. 655, 88 S.Ct. 2274, 20 L.Ed.2d 1343 (1968); Felton v. City of Pensacola, 390 U.S. 340, 88 S.Ct. 1098, 19 L.Ed.2d 1220 (1968); Robert-Arthur Management Corp. v. Tennessee ex rel. Canale, 389 U.S. 578, 88 S.Ct. 691, 19 L.Ed.2d 777 (1968); I. M. Amusement Corp. v. Ohio, 389 U.S. 573, 88 S.Ct. 690, 19 L.Ed.2d 776 (1968); Chance v. California, 389 U.S. 89, 88 S.Ct. 253, 19 L.Ed.2d 250 (1967); Central Magazine Sales, Ltd. v. United States, 389 U.S. 50, 88 S.Ct. 235, 19 L.Ed.2d 49 (1967); Conner v. City of Hammond, 389 U.S. 48, 88 S.Ct. 234, 19 L.Ed.2d 47 (1967); Potomac News Co. v. United States, 389 U.S. 47, 88 S.Ct. 233, 19 L.Ed.2d 46 (1967); Schackman v. California, 388 U.S. 454, 87 S.Ct. 2107, 18 L.Ed.2d 1316 (1967); Mazes v. Ohio, 388 U.S. 453, 87 S.Ct. 2105, 18 L.Ed.2d 1315 (1967); A Quantity of Copies of Books v. Kansas, 388 U.S. 452, 87 S.Ct. 2104, 18 L.Ed.2d 1314 (1967); Books, Inc. v. United States, 388 U.S. 449, 87 S.Ct. 2098, 18 L.Ed.2d 1311 (1967); Aday v. United States, 388 U.S. 447, 87 S.Ct. 2095, 18 L.Ed.2d 1309 (1967); Avansino v. New York, 388 U.S. 446, 87 S.Ct. 2093, 18 L.Ed.2d 1308 (1907); Sheperd v. New York, 388 U.S. 444, 87 S.Ct. 2093, 18 L.Ed.2d 1306 (1967); Cobert v. New York, 388 U.S. 443, 87 S.Ct. 2092, 18 L.Ed.2d 1305 (1967); Ratner v. California, 388 U.S. 442, 87 S.Ct. 2092, 18 L.Ed.2d 1304 (1967); Friedman v. New York, 388 U.S. 441, 87 S.Ct. 2091, 18 L.Ed.2d 1303 (1967); Keney v. New York, 388 U.S. 440, 87 S.Ct. 2091, 18 L.Ed.2d 1302 (1967). . In Redrup, the Supreme Court stressed: In none of the cases was there a claim that the statute in question reflected a specific and limited state concern for juveniles .... In none was there any suggestion of an assault upon individual privacy by publication in a manner so obtrusive as to make it impossible for an unwilling individual to .avoid exposure to it . . . . And in none was there evidence of the sort of “pandering” which the Court found significant in Ginzburg [v. United States, 383 U.S. 463, 86 S.Ct. 942, 16 L.Ed.2d 31]..... 386 U.S. at 769, 87 S.Ct. at 1415. Appellant would have us infer from this language that there can be no conviction on the basis of obscenity without the presence of one of these elements — danger to juveniles, force upon unwilling adults, or pandering. No such holding can be gleaned from Redrup. Careful analysis of the Court’s enumeration of the Justice’s individual views on the standard reveals that the lowest common denominator for reversal of obscenity convictions remains the Roih standard, despite its minority status. . Recent court opinions have adhered to this position. E. g., Huffman v. United States, D.C.Cir. 1971, 470 F.2d 386 [10 Cr.L.Rptr. 2076, October 7, 1971]; Hoffman v. Carson, 250 So.2d 891 (Fla.1971); Hoffman v. Dickinson Operating Co., 468 S.W.2d 26 (Mo.1971); Court v. Wisconsin, 51 Wis.2d 683, 188 N.W.2d 475 (1971). . In Klaw, the court described the material as follows: These “bondage” booklets usually contain some twenty to twenty-five photographs or crude drawings of females— some scantily clad, some tightly trussed, and all voluptuous — subjecting other women and men to various tortures and indignities, including violent and forcible deformation of the body, while being gagged, fettered and bound in bizarre postures. The booklets bore such titles as “Sorority Girls Stringent Initiation,” “Female Doctor Forced into Bondage,” “Girls Concentration Camp Ordeals,” “Dominating Woman Turns Man into Girl,” “Men in the Ladies Room,” and the like. A text in each booklet described in a puerile and asinine fashion the activity depicted in the drawings. One booklet entitled “The Devil of Yocherwalden” pictures female “Gazi” guards subjecting female prisoners to brutal tortures at the direction of the “Gazi” commandment “Elsi Aehstunk.” The captives and tormentors are drawn with exaggerated female physical characteristics, clothed in tight-fitting garments, wearing black leather shoes with very high heels, and posed in unreal positions. There were also photographs of “Fighting Girls,” corset and high heel shoe scenes, and girls in rubber apparel. Photographs offered for sale were in many instances taken from motion pictures said to have been recently released, such as “Blood of the Vampire,” “Slaves of Carthage,” and “The Mystery of the Black Whip.” Amateur “bondage” photographs were often solicited. Bulletins published by Nutrix advertised its publications in various bondage series. All these materials are described to us as being “sado-masochistic,” and we are referred to Krafft-Ebing’s Psychopathia Sexualis for further elucidation. 350 F.2d at 157. . Compare City of Newark v. Humphres, 94 N.J.Super. 384, 228 A.2d 550 (1967) and City of Chicago v. Kimmel, 31 Ill.2d 202, 201 N.E.2d 386 (1964) with Dunn v. Maryland State Bd. of Censors, 240 Md. 249, 213 A.2d 751 (1965). The government contends that the Second Circuit has since refused to follow the principles in Klaw. In United States v. Wild, 2d Cir. 1969, 422 F.2d 34, the Second Circuit did affirm a conviction based only on the introduction of the material itself. The material involved there, however, was composed of color slides depicting numerous erotic acts. The court, in its citation of and quotation from appellate and Supreme Court opinions, emphasized that they were not dealing with textual matter in which the meaning and effect of the whole would be relevant. The ease can thus be compared with this Circuit’s opinion in Kahm v. United States, 5th Cir. 1962, 300 F.2d 78. See infra note 8 & accompanying text. . The Court described the material involved there as follows: Included under the heading of “Sack’s Book Reviews” are a number of brief extracts purportedly taken and quoted from books by named authors. These are not book reviews in the ordinary sense but merely quotations of particularly salacious passages in the books. One is a passage purportedly lifted from tlie book “Peyton Place” by Grace Metalious. Here are the passages containing a vivid description of the accomplishment of sexual intercourse between a boy and a girl: (Both were lying naked on the ground near his automobile. At first she teases him by running away and getting into the automobile, and laughing at him when she turns the car light on him to outline his nakedness. He pulls on his trousers, climbs into the car and starts the car engine when the girl turns off the ignition and immediately changes her mood to one of endearment and seduction, running her hands over his body and seeking his kisses. She then leads Mm down to the beach where he followed with the car robe on which they fall and embrace. What then happens is described by the author in words of impatient urging of immediate ravishment;— words which vividly portray a breathless, panting, concupiscent, cacoethes for consummation on the part of the girl, and savage eagerness on the part of the boy. Their lustful words, their sensuous body embrace are told with realistic and dramatic vividness to the point of passionate ecstasy that immediately precedes coitus.) Wo take it for granted that a motion picture which portrayed the consummation of a sexual act would be obscene. This mailed portion of an extract from Peyton Place is no less obscene in the sense of the definition of the Roth case. The extract from Peyton Place was accompanied by other so-called “book reviews” which were merely salacious extracts from other named books. One of these salacious extracts was taken from a book entitled “Out For Kicks.” Our description of the obscene passages from Peyton Place fits this one precisely, as it does one from a book entitled “The Immortal” and still another from a purported “Nine Days to Mukalla.” Other material enclosed in the envelopes described in counts 8 and 9 may well be classified as hard-core pornography, a term we discuss hereafter. Among the so-called book reviews is a purported extract from a book entitled “The Tribe That Lost Its Head.” This is a description of a savage tribal rite which the extract characterizes as loathsome and degraded. Another purported extract is from a book called “Intimacy” ; it describes with unblushing detail both homosexual activity and masturbation. From “The Bitter Weed Path” and “Shadows of Shame” are taken descriptions of homosexual embraces. Enclosed in the same parcel of material is a discussion of “Six Tortures,” including, with numerous other' descriptions of revolting procedures, an account of “punitive masturbation” and “gang rape.” Also in the mailed material is a copy of what was referred to in the advertisement as “Formula 14.” This is an extended description of how a man may go about meeting a woman, gradually awakening her interest, and finally seducing her. 300 F.2d at 82-83. Without going into equal detail, we deem it sufficient to point out that the material involved in the instant case is not even remotely analogous. . See Jacobellis v. Ohio, 378 U.S. 184, 84 S.Ct. 1676, 12 L.Ed.2d 793 (1964); United States v. Klaw, 2d Cir. 1965, 350 F.2d 155 (good discussion of possibility that national standard is required). Contra Miller v. United States, 9th Cir. 1970, 431 F.2d 655; California v. Luros, 4 Cal.3d 84, 92 Cal.Rptr. 833, 480 P.2d 633 (Cal.1971); Mitchum v. Tennessee, 10 Crim.L.Rptr. 2079 (Tenn.Crim.App. 1971); Court v. Wisconsin, 51 Wis.2d 683, 188 N.W.2d 475 (Wis.1971). . We find ourselves in much the same position as that of the trial judge in United States v. Reidol, D.Cal., No. 5845 Crim., October 7, 1971, as he stated: 1 haven’t even seen an “X” rated movie. I occasionally may look at a Playboy magazine, hut it might be in a barbershop, and that’s a rare situation. So though I personally would find that pamphlet to be obscene, my personal feelings are not to govern in this area which is an important area, because we are running into the Bill of Rights, the First Amendment, freedom of expression. It is a very, very difficult area, and I know today that you can walk down the street into one of these adult hook stores and buy all kinds of publications that are being sold. íáo I don’t feel that I am any judge of what is acceptable in the community today. . . . Pinkus v. Pitchess, 9th Cir. 1970, 429 F.2d 416, aff’d 400 U.S. 922, 91 S.Ct. 185, 27 L.Ed.2d 183 (1970) (film depicting woman in act of masturbation); Walker v. Ohio, 398 U.S. 434, 90 S.Ct. 1884, 26 L.Ed.2d 385 (1970) (Lurid Sinner; Sin Crop; Nifties; Peek-A-Boo, Number 4); Hoyt v. Minnesota, 399 U.S. 524, 90 S.Ct. 2241, 26 L.Ed.2d 782 (1970) (Business as Usual, Lady Susan’s Cruel Lover, The Way of a Man With a Maid); Mazes v. Ohio, 388 U.S. 453, 87 S.Ct. 2105 18 L.Ed.2d 1315 (1967) (Orgy Club); A Quantity of Copies of Books v. Kansas, 388 U.S. 452, 87 S.Ct. 2104, 18 L.Ed.2d 1314 (1967) (Sin Hooked, Bayou Sinners, Lust Hungry, Shame Shop, Fleshpot, Sinners Seance, Passion Priestess, Penthouse Pagans, Shame Market, Sin Warden, Flesh Avenger); Books, Inc. v. United States, 3SS U.S. 449, 87 S.Ct. 2098, 18 L.Ed.2d 1311 (1967) (Lust Job); Friedman v. New York, 388 U.S. 441, 87 S.Ct. 2091, 18 L.Ed.2d 1303 (1967) (Bondage Boarding School, English Spanking School, Bound and Spanked, Travelling Saleslady Gets Spanked, Bound to Please, Heat Wave); Redrup v. New York, 386 U.S. 767, 87 S.Ct. 1414, 18 L.Ed.2d 515 (1967) (Lust Pool, Shame Agent). . Many believe that there can be no objectivity in the obscenity area. One commentator has thus stated: There is no definition of the term [obscenity]. There is no basis of identification. There is no unity in describing what is obscene, or in prosecuting it. There is little more than the ability to smell it. Albert, Judicial Censorship of Obscene Literature, 52 Harv.L.Rev. 40, 47 (1938). This Court, however, will continue to search for an objective criterion for determining what is obscene and refuse to depend on its nose for judgment. . See our divided opinion in United States v. Williams, 447 F.2d 1285 (5th Cir. en banc 1971). . See Hoffman v. Carson, 250 So.2d 891 (Fla.); Appeal dismissed for want of a substantial federal question, 404 U.S. 981, 92 S.Ct. 453, 30 L.Ed.2d 365 (1971).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

In the Matter of CHARMAR INVESTMENT CO., Alleged Bankrupt. CITY NATIONAL BANK & TRUST CO. et al., Petitioners-Appellees, v. CHARMAR INVESTMENT CO., Alleged Bankrupt-Appellant. No. 72-1503. United States Court of Appeals, Sixth Circuit. Argued Nov. 28, 1972. Decided and Filed March 22, 1973. John E. Palcich, Columbus, Ohio, for alleged bankrupt-appellant. Bradley Hummel, Columbus, Ohio, for petitioners-appellees; R. T. O’Brien, Folkerth, Calhoun, Webster, Maurer & O’Brien, Columbus, Ohio, on brief, for Charles L. Adrian; Gingher & Christensen, Columbus, Ohio, on brief, for Marlen Radbill; David H. Putnam, Columbus, Ohio, on brief, for City National Bank & Trust Co. Before PHILLIPS, Chief Judge, and CELEBREZZE and PECK, Circuit Judges. PECK, Circuit Judge. On May 3, 1971, a creditors’ petition for the involuntary bankruptcy of Char-mar Investment Company, a small closely-held corporation, was filed in the District Court. It was contended that appellant conveyed its major asset to two shareholders and officers of appellant for insufficient consideration, thereby constituting a preference to the grantees. On June 25, 1971, the Referee granted a motion to dismiss the petition for failure to sufficiently allege an act of bankruptcy. On July 6, 1971, the Referee ordered the dismissal set aside and permitted the filing of an amended petition. At the same time, the Referee denied a motion to dismiss the amended petition on the grounds that it merely paraphrased Section 60 of the Bankruptcy Act (11 U.S.C. § 96), which defines a preferential transfer. Jurisdictional questions subsequently developed and, in April 1972, the District Court conducted a jurisdictional hearing and found the appellees qualified as creditors. This appeal followed. Charmar Investment Company was started by appellees Adrian and Radbill to operate car washes. Later, realizing the business was in trouble, they sold their shares of stock to a Mr. Zingarelli for one dollar in accordance with the terms of a written agreement of October 1969. .A provision of that agreement required Charmar to issue non-interest bearing promissory notes to appellees Adrian and Radbill in the sum of $14,802.48, payable at stated amounts and times over the next four years. After execution of the agreement, Zingarelli became President of Charmar and in that capacity he issued notes to Adrian and Radbill. Adrian and Radbill now claim that consideration for these notes was the deferment of their claims on Charmar for unpaid services, e. g., salary and expenses, and their oral agreement to remain personally liable on company debts for one year after the sale. These notes, they contend, give them creditor status to place Charmar in bankruptcy. It also appears that Adrian and Rad-bill had obtained a $60,000 loan in May 1968 from City National Bank & Trust Co. of Columbus, Ohio. Although the original note is not in the record, it allegedly, without challenge, was signed by the corporation and by Adrian and Rad-bill individually, and within a year, all of the loan except for $9,000 was repaid and the bank agreed to extend the loan balance through a series of ninety-day notes. When the September 1970 note came up for renewal in December 1970, appellees Adrian and Radbill were apparently mindful that their obligation of October 1969 to guarantee the notes for a one-year period expired in October 1970 and refused to guarantee the proposed renewal note. The Bank then declined to renew the note without the guarantees. Thereupon in May 1971, the petition in bankruptcy was filed. Section 24 of the Bankruptcy Act (11 U.S.C. § 47) provides that interlocutory orders in proceeding's in bankruptcy are appealable. The Act makes the distinction between “proceedings” and “controversies”, the latter being non-appealable. However, the distinction has always been obscure. In re Imperial “400” National, Inc., 391 F.2d 163, 168 (3rd Cir. 1968). Generally, in this context “controversies” involve disputes between trustees and third parties over title to the bankrupt estate’s property. 2 Collier on Bankruptcy § 24.28 (14th ed. 1971) (and cases cited therein). The order here concerns a question between the bankrupt and a creditor in the ordinary course of the administration of the bankrupt’s estate and therefore constitutes a “proceeding in bankruptcy.” However, not every interlocutory order entered in a “proceeding in bankruptcy” is automatically appealable. The order must dispose of some asserted right. Therefore, an order which is not “a formal exercise of judicial power affecting the asserted rights of a party” is not appealable. 2 Collier on Bankruptcy § 24.39 (14th ed. 1971); see, also, Cope v. Aetna Finance Company of Maine, 412 F.2d 635, 639 (1st Cir. 1969). Here the District Court has exercised such power regarding an issue in dispute between the parties, i. e., qualification as creditors, and thus the order may be considered appealable. A question also arises as to whether the District Court has jurisdiction to consider a proposed amendment to the involuntary petition after a motion to dismiss that petition has been granted. The original petition was filed on May 3, 1971, and was dismissed on June 25, 1971, for insufficient allegations to justify bankruptcy. In the order of dismissal, the Referee noted that a motion to amend the petition had been presented and filed, and ordered a hearing on the motion for July 1, 1971. On July 6, 1971, the Referee granted a motion to amend the petition. Kroell v. New York Ambassador, 108 F.2d 294 (2nd Cir. 1939), held that omitting leave to amend from an order which dismissed an original involuntary bankruptcy petition for insufficiency did not deprive the bankruptcy court of its jurisdiction to allow a later amendment. Even assuming but without deciding that the notation in the brder does not constitute leave to amend, it is clear that the bankruptcy court has jurisdiction in view of its general equity powers to set aside an order dismissing the petition for defects in the pleading and later to reinstate the proceedings to permit an amendment of the pleadings. 2 Collier on Bankruptcy § 18.24 (14th ed. 1971). Appellant first claims that (1) it was improper for the Court to admit the amended petition more than four months after the alleged act of bankruptcy and (2) the amended petition contained insufficient facts to allege a bankruptcy. We find that Section 39(c) of the Bankruptcy Act disposes of these claims. Amended in 1960, the Act provides that a petition for review, or a petition to extend the time for filing a petition for review, must be filed within ten days after entry of a referee’s order. The 1960 amendment provided a clarification and made compulsory the ten-day limitation. It is clear that the intent was to provide finality to a referee’s order unless there was timely direct attack. Since the amendment was enacted, courts have required strict compliance. Appellant has failed to file such a petition for review within the time specified. In fact, the record does not reveal that any petition for review has ever been filed. An appeal to this Court cannot be substituted for a petition for review, and consequently, appellant’s claims must be rejected. Appellant also contends that the admission of certain evidence constituted error. Four days after the close of the jurisdictional hearing, the District Judge advised counsel that he proposed to admit the $9,000 ninety-day notes which were executed in November 1969, March 1970 and June 1970. Appellant requested a hearing on the matter and on April 19, 1972, a second hearing was held. At the hearing appellant objected to the admission of the notes based on the absence of the original $60,000 note which it felt was necessary to fully understand the entire transaction. It asked for, and was refused, additional time to subpoena the original note. The Court then issued its findings that same day. On April 24, 1972, the Court issued an order stating that its opinion was not dependent upon the evidence in question but offered appellant the opportunity to challenge the evidence prior to trial. Appellant now complains that the notes were produced without sworn testimony and thus their admission constituted a denial of due process. We agree with appellee that the evidence in question was not necessary in order for the District Court to reach its conclusion. It is clear that both Radbill and Adrian obligated themselves personally for a period in excess of one year after the October 1969 purchase agreement for the obligation of appellant, and thus may in fact be required to pay such obligation in the event the alleged bankrupt is unable to do so. The September 1970 note and the proffered December 1970 note establish that fact. Testimony by an employee of the Bank indicates that the December 1970 note was rejected “primarily because Messrs. Adrian and Radbill had refused to sign individually on our new note which was the way it was set up, so consequently, we wouldn’t accept.” Both Exhibit B, entitled Schedule of Debts, and Exhibit C, entitled Schedule of Payments, to the October 1969 purchase agreement list a $9,000 note outstanding to City National Bank. Although it would be expected that admission of the original note would clarify the situation with reference to the $9,000 note, we do not find its admission as necessary to the determination of the status of Adrian and Radbill as creditors. We also find that the admission of the November 1969, March 1970 and June 1970 notes, without the laying of a proper foundation, is error. However, we do not conclude the admission had prejudicial effect. Appellant also disputes the District Court’s findings that appellees Adrian and Radbill qualify as creditors under Section 59(b) of the Bankruptcy Act (11 U.S.C. § 95(b)). That section provides as follows: “(b) Three or more creditors who have provable claims not contingent as to liability against a person, amounting in the aggregate to $500 in excess of the value of any securities held by them, or, if all of the creditors of the person are less than twelve in number, then one or more of the creditors whose claim or claims equal that amount, may file a petition to have him adjudged a bankrupt; but the claim or claims, if unliquidated, shall not be counted in computing the number and the aggregate amount of the claims of the creditors joining in the petition, if the court determines that the claim or claims cannot be readily determined or estimated to be sufficient, together with the claims of the other creditors, to aggregate $500, without unduly delaying the decision upon the adjudication.” The question before us then is whether the October 1969 notes of the appellant, arising from the October 1969 purchase agreement and made payable to Adrian and Radbill, qualify them as “creditors who have provable claims not contingent as to liability. . . .” It is clear that the ninety-day notes will not support a finding of creditor qualification under Section 59(b). The September 1970 note remains outstanding and, as co-signers, Adrian and Radbill are liable to the Bank for the note. They are considered sureties and their claims would be considered contingent. 3 Collier on Bankruptcy § 59.09 [2] (14th ed. 1971). As regards the October 1969 notes, however, the agreement of Radbill and Adrian to remain personally liable on the ninety-day notes for one year after the October 1969 purchase agreement would appear to constitute adequate consideration for those October notes. The agreement provides for a benefit to Charmar in exchange for Charmar’s promise to provide and pay on the notes it had issued to the parties and thus comports with the traditional concept of consideration. See, Irwin v. Lombard University, 56 O.S. 9 (1887). Thus, appellant’s contention that the October notes lacked consideration must fail and, accordingly, appellees Adrian and Rad-bill qualify as creditors within Section 59(b). The judgment of the District Court is affirmed. . The corporation owned and operated a car wash in Westerville, Ohio. The record does not disclose any other operation or asset. . The apparent effect of this arrangement is that Zingarelli avoided personal liability since the shares were transferred to Zingarelli and the notes came from Char-mar. . 11 U.S.C. § 67 (c) provides as follows: “(c) A person aggrieved by an order of a referee may, within ten days after the entry thereof or within such extended time as the court upon petition filed within such ten-day period may for cause shown allow, file with the referee a petition for review of such order by a judge and serve a copy of such petition upon the adverse parties who were represented at the hearing. Such petition shall set forth the order complained of and the alleged errors in respect thereto. Unless the person aggrieved shall petition for review of such order within such ten-day period, or any extension thereof, the order of the referee shall become final. Upon application of any party in interest, the execution or enforcement of the order complained of may be suspended by the court upon such terms as will protect the rights of all parties in interest.” . S.Rep.No.1689, 86th Cong., 2d Sess.; 1960 U.S.Code Congressional and Administrative News, Vol. 2, pp. 3194-3195. . In re Imperial “400” National, Inc., 391 F.2d 163 (3rd Cir. 1968); St. Regis Paper Co. v. Jackson, 369 F.2d 136 (5th Cir. 1966); In re Acme Furnace Fitting Co., 302 F.2d 318 (7th Cir.), cert. denied, Biggs v. Acme Furnace Fitting Co., 371 U.S. 853, 83 S.Ct. 89, 9 L.Ed.2d 88, reh. denied, 371 U.S. 906, 83 S.Ct. 209, 9 L.Ed.2d 168 (1962); Goff v. Pfau, 418 F.2d 649 (8th Cir. 1969), cert. denied, 398 U.S. 931, 90 S.Ct. 1830, 26 L.Ed.2d 97, reh. denied, 399 U.S. 917, 90 S.Ct. 2212, 26 L.Ed.2d 577 (1970); In re Abilene Flour Mills Co., 439 F.2d 937 (10th Cir. 1971). . The September 1970 and proposed December 1970 notes were already part of the record. . It seems clear that the real purpose of the notes issued by Charmar was to reimburse Adrian and Radbill for the sale of the stock to Zingarelli; however, we do not find it necessary to further consider this aspect. . There is no contention that appellee Bank is not a creditor within Section 59(b).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Sidney R. LIPMAN et al., Plaintiffs-Appellants, v. COMMONWEALTH OF MASSACHUSETTS et al., DefendantsAppellees. No. 72-1315. United States Court of Appeals, First Circuit. Heard Dec. 5, 1972. Decided Feb. 2, 1973. On Motion for Rehearing Feb. 14, 1973. Jerome P. Faeher, Boston, Mass., with whom Harry T. Daniels and Hale & Dorr, Boston, Mass., were on brief, for appellants. Walter H. Mayo III, Asst. Atty. Gen., with whom Robert H. Quinn, Atty. Gen., was on brief, for appellee, Commonwealth of Massachusetts. Kevin M. Keating, Boston, Mass., with whom Charlotte Anne Perretta and Crane, Inker & Oteri, Boston, Mass., were on brief, for appellee, Edward V. Keating. Before COFFIN, Chief Judge, ALD-RICH and McENTEE, Circuit Judges. ALDRICH, Senior Judge. On the night of July 18, 1969, Mary Jo Kopechne was accidentally drowned at Chappaquiddick Island, Massachusetts, under circumstances which attracted national, and, indeed, international attention. Because of the possibility of criminal activity in connection therewith a district court inquest was ordered. Massachusetts district courts having no official or regular reporters, plaintiff Lipman, an experienced freelance court stenographer, was engaged by the County District Attorney, one Dinis, to record and transcribe the testimony. Recognizing the marketable value to wire services, newspapers and magazines, of copies of the transcript, plaintiff prepared to make daily copy in substantial quantity, and incurred various expenses in connection therewith. There is no suggestion that this was other than for his personal benefit, or that the expenditure presently affords him any claim. At the same time it seems apparent, in view of the physical preparations in the courthouse, that the district judge knew and had no objection to the procedure. In the light of certain additional evidence, we will assume, for the purposes of this case, that the judge affirmatively assented. Senator Edward M. Kennedy, however, who had been driving the car in which Kopeehne met her death, became apprehensive that the publicity attending the inquest would be detrimental to him in connection with subsequent criminal proceedings, if such should eventuate. He instituted proceedings in the Massachusetts Supreme Judicial Court. The court agreed with him, and ordered the inquest held in camera and the transcript impounded until certain conditions were met. Kennedy v. Justice of the District Court of Dukes County, 1969, 356 Mass. 367, 252 N.E.2d 201. The inquest was rescheduled and plaintiff was rehired, this time by the district judge, who designated plaintiff the official reporter. The judge requested two copies of the transcript on a daily basis, and each day plaintiff turned these over, together with his notes, keeping nothing himself. Nothing was said about further copies. The impounding order meant, of course, that daily copy could not be sold to the media. When the inquest was completed, the Chief Justice of the Superior Court, pursuant to the Kennedy opinion, ordered the transcript impounded and transferred to the office of the Superior Court Clerk for Suffolk County. Thereafter it came to plaintiff’s attention that defendant Keating, Clerk of the Massachusetts Superior Court, was planning to have the Xerox Corporation make a large number of copies of the transcript. Keating, in his capacity as clerk, would then sell the copies to the public when the impounding order was lifted. Keating proposed to require a deposit of $75. per copy, a portion to be refunded if unnecessary to defray copying costs. Plaintiff’s charge for the 794 page transcript would have been much higher: approximately $560. per copy at customary freelance rates, or $320. per copy at rates charged by official Superi- or Court reporters. Since plaintiff had many contracts to sell copies, there followed a flurry of activity to prevent what he feared might be an irretrievable loss, because of judicial immunity and other impediments, if sales should be made at $75. by the Clerk. He applied to the Superior Court and the Supreme Judicial Court of Massachusetts, asking permission to sell the transcript. He also applied to the United States District Court, and ultimately to this court, for an injunction against what he termed defendant Keating’s unconstitutional taking of his property without due process. When the dust, we might almost say smoke, had cleared, plaintiff found himself with a state court order authorizing Keating to carry out his announced intention of selling to all comers at a deposit of $75, but to retain in escrow any balance of receipts over expenses pending the outcome of this litigation, and with no counter-order from the federal court. On the release day the Superior Court sold, simultaneously, 111 copies of the transcript, and thereafter placed in the escrow account the sum of $3,225, as profit over expenses. The notes were subsequently-returned to plaintiff. They were of no use to him — he has sold nothing further. The district court, in addition to denying plaintiff’s claim for a preliminary injunction of the sale, had treated defendants’ motion to dismiss as one for summary judgment and had granted it. Lipman v. Commonwealth, D.Mass., 1970, 311 F.Supp. 593. In an order issued after the sale had taken place we vacated this judgment and ordered a full trial. The district court, 345 F.Supp. 523, following that trial, dismissed as against Keating on the ground that he was protected as an officer of the court entitled to judicial immunity. It also dismissed as against the Commonwealth, rejecting plaintiff’s claim on the merits and also finding the Commonwealth protected by sovereign immunity. Since it is unnecessary to reach the formidable immunity defenses raised by defendants if we find plaintiff not entitled to relief on the merits we turn to the question of what rights plaintiff had in the reproduction and sale of the transcript. Plaintiff claims both a property right and a common law copyright in the transcript. With respect to the latter he cites an English case, Walter v. Lane, [1900] A.C. 539, but no other authority. Without deprecating the mechanical skill necessary to become a stenotypist, we can recognize no ownership for that reason in a transcription of a judicial hearing. Since transcription is by definition a verbatim recording of other persons’ statements, there can be no originality in the reporter’s product. See Nimmer on Copyright, §§ 10, 66. We move to plaintiff’s more substantial claim of a property right, which might also be thought of as a contract right. See note 7, ante. Having no express agreement, plaintiff points to a custom, which he says is universal, to permit a court reporter to sell transcript copies to all who desire them. The district court rejected this claim in its first proceeding, but we vacated those findings, believing the court had taken too narrow a view of the relevant custom. We ordered the court on remand to consider “custom and usage in the reporters’ trade generally.” We did this in part because of a substantial showing made by plaintiff, starting with the fact that official Massachusetts court reporters are by statute permitted to charge for copies to the parties even though they receive a basic salary. Mass.G.L. c. 221, § 88. Freelance reporters, having no salary, would seem, prima facie, even more in need of the additional remuneration. The evidence developed on remand showed, without contradition, that in respect to other judicial proceedings freelance reporters regularly had this opportunity. The district court nevertheless held this irrelevant because plaintiff could show no custom with respect to “[sale] to non-parties [of] plural copies of an official inquest.” While the court was free to reject any implication in our remand which ordered it to consider custom and usage in the reporters’ trade generally, it suggested no reason for distinguishing inquests from other judicial proceedings, but assumed it without discussion. In the absence of any affirmative reason, we are unable to think that a custom permitting reporters to sell transcripts of judicial proceedings generally ceases in some particular instance merely because the purpose of the proceeding varies. The Commonwealth asserts that a reason is to be found in the standards announced in the Kennedy opinion. Since the court said nothing on the subject of reproduction and sale of copies, whatever changes it made in that connection should be those which naturally followed from its rulings. The significant rulings were that the inquest was to be secret and the transcript impounded until it was apparent that no prosecution would ensue. While manifestly this prevented sale of copies before then, we find no implication of any new principle as to sale once the public release date occurred. No doubt counsel felt obliged to make the argument he did, but we consider it groundless. Indeed, each time that we pressed him, counsel retreated to the broad position that the district courts have, generally, no official reporters. Why this circumstance should permit freelance reporters to sell transcripts when hired in superior court proceedings, but not when they are officially hired, on occasion, in the district court, counsel did not say, nor could we. Clearly there was a general custom of some sort with respect to sale of copies of judicial transcripts. We see no basis for a finding that, other than as to the release date, inquest proceedings were an exception. Plaintiff’s difficulties, however, are not over; it is necessary to pinpoint the custom. One of plaintiff’s witnesses, an official Massachusetts reporter of many years experience, testified that before sale of copies of a trial transcript to non-parties she sought the court’s permission. No substantial persuasive evidence contradicted that testimony. Apart from the technical possibility that plaintiff may be bound by his own witness in such circumstances, we find this testimony both significant and appealing. We ourselves, although we would want our reporters adequately paid, would not have been happy with the prospect of compelling a large number of anxious, to the point of captive, buyers, to pay $35,000 or more for what cost but $5,000 to reproduce. We would fully accept the proposition that freelance reporters count on the sales of copies of transcripts for their normal living wage, but this fact is hardly sufficient to explain to the public such a bonanza at its expense. A custom which, through the necessity of obtaining its consent, would permit the court to regulate the conditions of public sales seems quite understandable. We instinctively rebel at the notion that a court should be entirely without control over the reporter’s use of an official transcript. Plaintiff points to the conceded fact that the court had never before engaged in reproducing and selling transcript copies. Granting this, it is apparent, also, that this is the only case where so many members of the public wanted copies, and found themselves, by reason of competitive pressure, in the position of having to pay almost whatever was asked. The fact that reporters hitherto sold transcripts to non-parties is not determinative. This was not an ordinary case. A general policy of non-intervention cannot mean that a court is stripped of its authority to act when it sees a need to do so. Having identified the custom, we consider whether plaintiff states a claim under it. We have found, ante, that prior to the injunction of the first inquest plaintiff had obtained at least implicit consent from the presiding judge to furnish daily copy to the press. When the inquest was aborted, however, and the proceedings ordered secreted, plaintiff dismantled his extensive daily-copying operation. While he states he was “reengaged” by the presiding judge for the inquest, he concedes that he did not discuss with the judge the matter of post-impounding transcript sales, and since, after the Kennedy order, there were no external manifestations of reproduction at the courthouse, there is nothing to support a claim of implicit consent. Nor, of course, did he obtain consent from the Superior Court, which was responsible for release of the transcript, or from any other court. Although plaintiff has not made the separate point, what we have been saying applies only to sales to third persons; the question of sales to the parties remains. By statute, Mass.G.L. c. 221 § 88, official Superior Court reporters are entitled to sell copies to the parties at an established rate. Though plaintiff is a freelance reporter, we have noted previously that this difference should not affect his rights. Moreover, after the Kennedy opinion, plaintiff, for the first time, was hired as the “official” reporter. See Mass.G.L. c. 221 § 83. The evidence on custom and usage does not support a holding that reporters must seek court permission before selling transcripts to the parties, and the rationale behind the consent requirement does not apply to such sales. When sales are limited to those formally associated with the litigation, at an established rate, the potential of abuse by the reporter — at the expense of the public and to the. embarrassment of the court — is eliminated. We can think of no reason why, when a reduced rate is established for the benefit of the public, it should accrue to relieve the parties of the customary charge, or, when it was made ex post facto, deprive plaintiff of the benefits rightly expected at the time of his hiring. It is, of course, true that the parties might not have ordered as many copies had they been required to pay the going per-copy rate. It is late, however, to engage in such speculation. The fact is, they did order them. The further fact is that the money is available. It would seem prima facie unfair to no one to deduct from the escrow account, as a cost of the Superior Court operation whereby plaintiff was deprived of his legitimate expectations, the going official reporter rate for the parties’ copies, and to order judgment in favor of the plaintiff in that amount. As to this amount, chargeable against the fund, we see no immunity problems. Cf. Alcoa Steamship Co. v. Perez, 1 Cir., 1970, 424 F.2d 433. In the case at bar there was not, as in Perez, bad faith, but the contrary. However, placing the fund in a special count in the name of the clerk, see n.4, ante, avoids the need of a judgment against the Commonwealth treasury. We accordingly direct that judgment against defendant Keating, in his official capacity as Superior Court Clerk, be entered by the district court in the amount determined. The judgment of the district court is vacated and the case remanded for further proceedings consistent herewith. MEMORANDUM ON MOTION FOR REHEARING PER CURIAM. Plaintiffs, by motion for rehearing, assert that the matter of a custom requiring the court’s permission for the sale of transcripts to non-parties was not adequately developed at argument, and that they wish to pursue it further. We question the premise. Assuming, however, it to be true, the petition is nonetheless denied. We would consider that a court has inherent power to prevent the sale of transcripts at an exorbitant profit — public confidence in administration of the courts demands no less. The fact — if it be the fact— that the Dukes County District Court originally consented to an exorbitant profit does not prevent the Supreme Judicial Court from taking a second look. . There is a second plaintiff, but for purposes of convenience he may. be disregarded. . The court did not limit its ruling to the Kopeehne inquest, but laid down general rules for all inquests thereafter to be held in the Commonwealth. . The daily rate was even higher. At this rate, which is what the media had contracted for before the impounding order, a single copy might have cost over $800. Certainly this figure could not have been thought involved after the inquest was closed to the public. . We declined to consider the merits at that time since we believed that the interest of the state court in controlling its transcript was more important than plaintiff’s rights, assuming he could establish any. Noting the possibility that immunity might unfairly affect plaintiff's claim, we made certain suggestions, one of which was an escrow account. . The court below assumed, as we do, that this retained “profit” will be refunded pro rata to the transcript purchasers. We might well have approached the matter of the escrow fund in a different manner had we been led to believe that the Commonwealth was being enriched at the expense of plaintiff. See post. . Once the content was out, no more copies were sought. It is apparent that the large number of initial buyers was due to a widespread fear among the media of being scooped. . In the numerous times this case has been before us, no serious question of subject matter jurisdiction has been raised. We note first that plaintiff asserts a claim in excess of $10,000. See 28 U.S.C. § 1331 (a). The bases of his claim are a property right in his notes that were withheld from him until they were no longer useful, a common law copyright, and a custom which permits court reporters to sell transcript copies. The first two are clearly traditional property interests and the third, while in some respects analogous to a contract right, can certainly be thought of as a “legitimate claim of entitlement.” Board of Regents v. Roth, 1972, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548. Thus the complaint states property rights protected by 42 U.S.C. § 1983 and 28 U.S.C. § 1343(3) against state deprivation. See Lynch v. Household Finance Corp., 1972, 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424. Cf. Goldberg v. Kelly, 1970, 397 U.S. 254, 261, 263, n. 8, 90 S.Ct. 1011, 25 L.Ed.2d 287. . Defendant Keating points out that the English court in the Lane ease was dealing with a copyright statute that did not require “originality either in thought or in language.” [1900] A.C. at 548. . Plaintiff does suggest that the district attorney made such an agreement, but if only for reasons we are about to come to, we recognize in Dinis no authority to do so. . Cf. 28 U.S.C. § 753. . It may be contended that no one has raised the matter of public relations until this moment. While no extensive discussion of the point occurred, the Superior Court’s Memorandum of April 27, 1970 did allude to the plaintiff’s intention of selling copies at $800. per copy and went on to state that sale by the Superior Court “seemed to be the fairest and most efficient way of making public the inquest documents, bearing in mind the great public interest and the volume of requests for copies from the press and radio and television stations all over the country.” Moreover, it is our duty to consider all possible grounds upon which the court might have acted. This one readily occurs to us; indeed, it did so from the beginning. . Plaintiff seems to represent that defendant Keating was acting totally without court direction in devising, in early April, the plan for distribution of the transcript. This would not only be irrelevant; for reasons not worth detailing it is contrary to our reading of the record. . Indeed, we interpret plaintiff’s petition to the Supreme Judicial Court as an administrative appeal from the Superior Court’s denial of consent. Plaintiff is correct in stating that the Supreme Judicial Court did not adjudicate his rights; it was, however, the last chance for plaintiff to perfect his rights, if formal consent was necessary. . It is true that the potential refundees are hereby having their repayments reduced without an opportunity to be individually heard. However, the amount is small (“deminimis and only a trifel,” to quote from a current brief in another case), especially so in the light of what they would have had to pay if plaintiff had been allowed to sell copies at the full rate. It is also to be borne in mind that without this deduction plaintiff will not receive even a modest copy profit.

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UNITED STATES of America, Plaintiff-Appellee, v. Jack L. LEWIS and Edward E. Lane, Defendants-Appellants. No. 71-1422. United States Court of Appeals, Fifth Circuit. Sept. 7, 1972. Rehearing and Rehearing En Banc Denied Feb. 27, 1973. Virgil M. Wheeler, Jr., Albert B. Koorie, New Orleans, La., for defendants-appellants. Gerald J. Gallinghouse, U. S. Atty., Mary Williams Cazalas, Asst. U. S. Atty., New Orleans, La., for plaintiff-appellee. Before WISDOM, GODBOLD and RONEY, Circuit Judges. RONEY, Circuit Judge: Jack L. Lewis and Edward E. Lane were engaged in the business of accepting wagers. They were each convicted on two counts of criminal violations which resulted from their filing tax returns pursuant to the Federal wagering excise tax laws. Under Marchetti and Grosso they could not now be punished if they had not filed the returns at all, but having filed the returns they were indicted (1) in separate counts for willfully and knowingly making and subscribing false returns in that they did not correctly show their business addresses, and (2) in a single count against both for attempting to evade the excise tax by filing returns understating their gross wagers. As to the first, we find that our decision in Kolaski v. United States, 362 F.2d 847 (5th Cir. 1966), requires reversal, and as to the second, Marchetti and Grosso effectively bar prosecution. We therefore reverse the convictions of both defendants. I. In separate counts it was charged that each defendant did willfully and knowingly make and subscribe a Special Tax Return and Application for Registry-Wagering, Form 11-C, for the fiscal period ending June 30, 1967, which he did not believe to be true and correct in that the return incorrectly showed his business address, to be the same as his residence address. It was proved that both were engaged in wagering at a different address, which the government charged should have been listed as their business address. The Internal Revenue Code, 26 U.S.C. § 7206(1) makes it a felony for any person to willfully make and subscribe any return under penalties of perjury which he does not believe to be true and correct as to every material matter. Form 11-C is the return required to be filed by one who is subject to the annual occupational tax of $50 imposed by 26 U.S.C. § 4411 on any person who is engaged in receiving wagers, or who is liable for the 10% excise tax imposed on wagers under 26 U.S.C. § 4401. Lewis filed his return on June 28, 1966, for the period commencing July 1, 1966. Lane filed his return on June 29 for the same period. This was consistent with the registration sections of the wagering tax statutes and the regulations, which are prospective in nature and apply before any wagering has taken place. 26 C.F.R. § 44:6071-1(b). This ease falls squarely within the perimeters of the decision of this Circuit in Kolaski v. United States, supra, which involved this same occupational tax registration form. Kolaski was charged with filing a Form 11-C in which he stated that between the dates of October 26, 1964 and June 30, 1965, he had no agents or employees engaged in taking wagers, when in fact he had such employees. The Form 11-C itself was filed on October 26, 1964. He pled guilty to an indictment charging that he willfully and knowingly made the return which he did not believe was true and correct in this regard. He thereafter sought relief under § 2255. We set aside his judgment of conviction and sentence on the ground that the false statement, being prospective, was nothing more than a statement of intent. He was not charged with a false statement of intent. We said: “The statute here involved is a perjury statute. As in the general statute on perjury, 18 U.S.C.A. § 1621, the gist of the offense is a false statement, willfully made, of a material matter. The statement must be with respect to a fact or facts. United States v. Debrow, 346 U.S. 374, 74 S.Ct. 113, 98 L.Ed. 92. See Williams v. United States, 5th Cir. 1957, 239 F.2d 748. The statement must be such that the truth or falsity of it is susceptible of proof. United States v. Slutzky, 3rd Cir. 1935, 79 F.2d 504. The truth or falsity of the statement is to be related to the time the statement is made. Smith v. United States, 6th Cir. 1948, 169 F.2d 118. It may be noted that the information does not charge a false statement of an intent to have employees in the future engaged in gambling. It charges that, on October 26, 1964, he stated that he had no employees engaged in gambling for the period October 26, 1964, to June 30, 1965, and that he then and there well knew that he did in fact have employees engaged in gambling for the period of October 26, 1964, to June 30, 1965. Since it would have been impossible for the appellant, on October 26, 1964, to have then and there, in fact, had employees for a more than eight months period then beginning, the statement made in the information could not be true and the truth of such statement was not susceptible of proof. The information does not state an offense.” (362 F.2d at p. 848) After Marchetti and Grosso the defendants could not be charged with failing to file a complete return. Assuming that wagering at different addresses would constitute separate offenses under state law, see LSA-R.S. 14:90, the rationale of Marchetti and Grosso would prevent criminal proceedings against defendants for failure to register any address where they were conducting wagering operations, even though they may have waived their right against self-incrimination as to other addresses by registration. Prior to Marchetti and Grosso, the government would normally have proceeded against persons in defendants’ position by prosecution for failure to file a return or an amended return showing the address where wagering was known to have been conducted. However, Marchetti and Grosso now foreclose such a course of action. The government would have us follow the holding of the Sixth Circuit in United States v. Carabbia, 381 F.2d 133 (6th Cir. 1967) and the reasoning of the dissenting opinion in Kolaski. However, a panel of this Court cannot overrule a prior decision of the Circuit, en banc consideration being required. See F.R.A.P. Rule 35. In any event, Carabbia, like Kolaski, involved a listing of employees and would not dictate the same result in a case involving addresses of places of business subsequent to Marchetti and Grosso. II. The second charge upon which Lewis and Lane were convicted alleged that they jointly attempted to evade the 10% excise tax imposed against the gross amount of wagers. The exact charge is important to their argument that it failed to allege facts constituting an offense under 26 U.S.C. § 7201 which provides : “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall ... be guilty of a felony . . . .” The indictment charged that Lewis and Lane were jointly engaged in the wagering business and that they attempted to evade the wagering excise tax by filing separate returns, Form 730, which, when combined, understated their gross partnership wagers. When no wagering excise tax return has been filed, an individual cannot be criminally prosecuted under 26 U.S.C. § 7201 for willfully attempting to evade or defeat the tax imposed by the provisions of 26 U.S.C. § 4401 notwithstanding the fact that wagering excise taxes may be due and owing. Marchetti v. United States, supra, and Grosso v. United States, supra. The government contended that during the month of February, 1967, the partnership had accepted wagers of $41,329.00. No partnership return was filed. The two partners filed individual returns which reported wagers totaling $33,447.00. They did this, the government charged, as an attempt to evade a portion of the partnership tax. This count did not charge the defendants with failure to file a partnership return, nor did it accuse them of filing false individual returns. It charged evasion of the partnership tax. Lewis and Lane argue that this charge does nothing more than indirectly attempt to punish them for failure to file a partnership return, when Marchetti and Grosso forbid direct punishment for such failure. We agree. Implicit in this charge is the assumption that defendants can operate a partnership and the government will approve a discharge of their partnership tax liability if they file and pay on individual returns reporting the partnership wagers. If this were not so then understatement of one’s personal return could not constitute an attempt to evade partnership taxes. Yet nothing in the statute or regulations indicates that an individual must report partnership wagers on his personal return, or that he can fulfill the partnership’s duty to report wagers by filing as an individual. The wagering tax laws recognize a partnership as a distinct entity. It is issued but one tax stamp regardless of the number of partners it has. See 26 C.F. R. § 44:4902, Liability of Partners. (“Any number of persons doing business in co-partnership at any one place shall be required to pay but one special tax.”). Prior to Marchetti and Grosso it would be possible, in a case such as this one, to consider that the filing of an individual return was merely an attempt to mask, or cover up, the taxpayer’s true partnership liability which would have been disclosed on a proper partnership return. In United States v. Shaffer, 291 F.2d 689 (7th Cir. 1961), six persons were indicted for conspiracy to evade wagering taxes. The six operated a gambling business as partners, but filed no partnership return. Only one defendant, named Wyatt, filed an individual return, and this return substantially understated the amount of tax due from the partnership. The court held that the jury could properly conclude that the six defendants conspired to use Wyatt’s return to mask the magnitude of the gambling enterprise, and thus evade taxes. While the rationale of the Shaffer decision is undeniably applicable to the set of facts before us, we think that the result cannot stand in the light of the Supreme Court’s decision in Grosso v. United States, supra. The defendant in Grosso was convicted of failure to pay the wagering excise and occupational taxes, and of conspiracy to evade payment of these taxes. After holding that payment of the wagering excise tax would have compelled Grosso to incriminate himself, the Court reversed the conviction for conspiracy to evade the excise tax, stating, “a taxpayer may not be convicted of conspiracy to evade payment of the tax, if the constitutional privilege would properly prevent his conviction for willful failure to pay it.” 390 U.S. at p. 70, 88 S.Ct. at p. 715. In the case of Mackey v. United States, 401 U.S. 667, 91 S.Ct. 1160, 28 L.Ed.2d 404 (1971), Mr. Justice White commented on the Marchetti and Grosso decisions as follows: “The gambling registration and tax requirements were held [in those cases) to present substantial risks of self-incrimination and therefore to be unenforceable; imposition of criminal penalties for non-compliance was an impermissible burden on the exercise of the privilege.” 401 U.S. at p. 672, 91 S.Ct. at p. 1163. We take these statements to mean, as applied to the present case, that Lewis and Lane may not be convicted of attempting to evade the wagering excise tax if, in attempting to evade it, they have done nothing more than fail to take actions which cannot be required because they fall within the scope of the Fifth Amendment privilege. Lewis and Lane have done nothing more, in a joint capacity, than fail to file a partnership return and pay the partnership tax. The indictment seeks to punish them for an attempt to evade doing just that. Since they cannot be punished for failure to pay the wagering tax, proper assertion of the Fifth Amendment privilege under the rule of Marchetti and Grosso protects them from prosecution for an attempt to evade such payment. This charge should have been dismissed. Both convictions of each defendant are reversed and the indictments should be dismissed. Reversed. GODBOLD, Circuit Judge (specially concurring): As to part II, I concur in the result that reversal is required but on grounds different from those given by Judge Roney. The offense charged is that the defendants jointly engaged in the business of accepting wagers and attempted to evade and defeat wagering excise tax due and owing by their partnership by filing false and fraudulent (individual) returns on which their combined gross wagers were less than in fact they were. Defendants did not file partnership returns, were not charged with failure to do so and, under Marchetti and Grosso could not be so charged. But those cases do not forgive a taxpayer (partnership or individual) who accepts wagers from liability for the tax. Nor do those cases insulate partners from criminal responsibility for efforts to evade the tax so long as the effort which is the basis for criminal responsibility is not a mere failure to file a partnership return. In this instance the charge is that the effort to evade partnership tax took the form of understatement of partnership wagers on the individual returns voluntarily filed. The offense thus charged is no less an offense than to charge perjury committed before a grand jury by a witness who could not be required to testify but elected voluntarily to do so, and no less an offense than voluntarily sending to IRS, in an attempt to evade partnership taxes, a false affidavit stating, “We swear that we have ceased our partnership wagering operations, so please don’t bother us any more about partnership taxes.” To sustain its theory the government was required to come forward with proof (1) that the individual returns included some partnership wagers, or, conversely, that the individuals did not do as much individual wagering as the returns said, leading to an inference that the excess was composed of partnership wagers, and (2), that partnership wagers included in the total of wagers reported were less than all the partnership wagers. The government did not come forward with evidence required of it. The record shows that the defendants accepted $41,329 of partnership wagers .and that the combined amount of the individual returns was $33,447. But for all we know, the returns included only individual wagers and no partnership wagers. The government cannot, as it attempts to do, shift to defendants the obligation to prove the correctness of the returns or face conviction. In this criminal case there is no presumption of governmental correctness as with a civil assessment. The convictions must be reversed, not . for failure to charge an offense but for failure to prove the offense charged, and the case should be remanded for further proceedings. . Those who properly assert the constitutional privilege against self-incrimination may not be criminally prosecuted for failure to comply with the Federal wagering occupational tax statutes, either as to registration, or payment. Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968). . A person cannot be convicted for willful failure to pay the Federal excise tax on wagering because the payment would provide incriminating information in violation of his Fifth Amendment privilege against self-incrimination. Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968). . 26 U.S.C. § 4411. Imposition of Taw. “There shall be imposed a special tax of $50 per year to be paid by each person who is liable for tax under section 4401 or who is engaged in receiving wagers for or on behalf of any person so liable.” . 26 U.S.C. § 4401. § 4401. Imposition of taw (a) Wagers. — There shall be imposed on wagers, as defined in section 4421, an excise tax equal to 10 percent’ of the amount thereof. (b) Amount of wager. — In determining' the amount of any wager for the purposes of this subchapter, all charges incident to the placing of such wager shall be included; except that if the taxpayer establishes, in accordance with regulations prescribed by the Secretary or his delegate, that an amount equal to the tax imposed by this subchapter has been collected as a separate charge from the person placing such wager, the amount so collected shall be excluded. (c) Persons liable for taw. — Each person who is engaged in the business of accepting wagers shall be liable for and shall pay the tax under this sub-chapter on all wagers placed with him. Each person who conducts any wagering pool or lottery shall be liable for and shall pay the tax under this sub-chapter on all wagers placed in such pool or lottery. Any person required to register under section 4412 who receives wagers for or on behalf of another person without having registered under section 4412 the name and place of residence of such other person shall be liable for and shall pay the tax under this subchapter on all such wagers received by him. . “Count VIII of the Indictment. Count VIII. That on or about April 3, 1967, and May 5, 1967, at New Orleans, Louisiana, in the Eastern District of Louisiana, EDWARD E. LANE, a resident of the City of Metairie, State of Louisiana, and JACK L. LEWIS, a resident of the City of Metairie, State of Louisiana, wlio jointly engaged in the business of accepting wagers on sporting events during the month of February 1967, did knowingly and wilfully attempt to evade and defeat a substantial amount of the wagering excise tax due and owing by them to the United States of America for the montli of February 1967, by filing and causing to be filed with the District Director of Internal Revenue for the Internal Revenue District of New Orleans, at New Orleans, Louisiana, separate false and fraudulent wagering excise tax returns, Forms 730, wherein they showed that their gross wagers when combined for said month were the sum of $33,447.00 and that the amount of wagering tax due thereon was the sum of $3,344.70, whereas, as they then and there well knew, their gross wagers including lay-off wagers accepted were the sum of $41,329.00, upon which said gross wagers they owed to the United States of America a wagering excise tax of $4,132.90. In violation of Section 7201, Internal Revenue Code 26 U.S.C., § 7201.” . Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968). . Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968). . AYe need not face the question of whether (1) alone would constitute an offense— that is, arguably misleading the government by reporting partnership wagers on an individual return without regard to whether such misreporting is of all partnership wagers or less than all. The indictment here charges an underreporting. Also it seems to me that evidence of (1) alone is not sufficient to shift to the • taxpayer the burden of coming forward with evidence either that no partnership wagers are included in the return, or that some are included and that those so included are all of the partnership wagers. The burden remains on the government to prove what it alleged, which is understatement of partnership wagers, and the taxpayer, whether he reported only partnership bets or mingled partnership and individual bets, cannot be required to adduce evidence that he did not understate. Thus, until the government had come forward with evidence on (1) and (2), the defendants were not required to rebut.

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Fred M. ESHERICK, Jr., Petitioner-Appellant, v. E. P. PERINI, Superintendent, Respondent-Appellee, No. 72-1797. United States Court of Appeals, Sixth Circuit. Argued Feb. 1, 1973. Decided March 22, 1973. Harry E. Youtt, Cleveland, Ohio, for petitioner-appellant; Bernard A. Berk-man, Cleveland, Ohio, on brief. Leo J. Conway, Asst. Atty. Gen., Columbus, Ohio, for respondent-appellee; William J. Brown, Atty. Gen., Columbus, Ohio, on brief. Before CELEBREZZE and MILLER, Circuit Judges, and KENNEDY, District Judge. The Honorable Cornelia G. Kennedy, United States District Judge for the Eastern District of Michigan, sitting- by designation. PER CURIAM. This is an appeal from the District Court’s denial of Appellant’s petition for a writ of habeas corpus. In 1967, Appellant, then 16 years of age, was convicted in the Court of Common Pleas for Lake County, Ohio, for the first degree murder of his father. Appellant took a direct appeal to the Court of Appeals for Lake County,, which affirmed the judgment but modified the death sentence imposed by the trial court and sentenced Appellant for second degree murder. Appellant’s subsequent motion for leave to appeal to the Supreme Court of Ohio was denied. Appellant then filed the present petition for a writ of habeas corpus in the District Court, claiming that he was denied the effective assistance of counsel at his state trial through his attorney’s “position of divided loyalty.” His court-appointed defense counsel at that trial also served as attorney for the estate of Appellant’s father. Moreover, Appellant’s mother, who served as executrix for the father’s estate, was the only eyewitness for the prosecutipn. Concluding that Appellant had failed to exhaust his state remedies with respect to this claim, the District Court denied the petition. We affirm. The issue of whether Appellant was denied effective assistance of counsel was first raised on direct appeal be-for the Court of Appeals of Lake County by amicus curiae, who was granted leave by that court to file an amicus brief and actively argued the issue before that court. This claim, however, was not included in Appellant’s assignment of errors (see, O.R.C. § 2505.21) before that court, and that court’s opinion affirming Appellant’s conviction mentions neither the appearance of amicus curiae nor the ineffective assistance of counsel issue. See State v. Esherick, 19 Ohio App.2d 40, 249 N.E.2d 78 (Lake Co.Ct.Apps. 1969). We therefore conclude — as the District Court apparently did — that the presentation of this issue before the court of appeals by amicus curiae does not constitute an exhaustion of state remedies by Appellant. Although Ohio’s postconviction relief statute, O.R.C. § 2953.21 et seq., has been narrowly construed by the state’s Supreme Court [see State v. Perry, 10 Ohio St.2d 175, 226 N.E.2d 104 (1967); Coley v. Alvis, 381 F.2d 870 (6th Cir. 1967)], it appears that a claim of ineffective assistance of counsel, “which is tantamount to a denial of [one’s] right to counsel,” is clearly cognizable under the statute. State v. Juliano, 24 Ohio St.2d 117, 120, 265 N.E.2d 290, 293 (1970). See also Coley v. Alvis, supra, 381 F.2d at 872. We therefore affirm the District Court denial of the petition due to Appellant’s failure to exhaust the state remedies which are available to him. . It is noteworthy that Appellant was represented before the Court of Appeals by the same attorney who had served as his defense counsel at trial and who is now the subject of Appellant’s claim for habeas corpus relief.

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EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee, v. LIBERTY MUTUAL INSURANCE COMPANY, Defendant-Appellant. No. 72-2834. United States Court of Appeals, Fifth Circuit. March 27, 1973. Kalvin M. Grove, S. Richard Pincus, Chicago, Ill., Melbourne D. McLendon, Atlanta, Ga., Robert A. Penney, Boston, Mass., for defendant-appellant. John deJ. Pemberton, Jr., Acting Gen. Counsel, E. E. O. C., Washington, D. C., Joseph Ray Terry, Jr., Regional Atty., E. E. O. C., Atlanta, Ga., Julia P. Cooper, Beth Don, E. E. O. C., Washington, D. C., for plaintiff-appellee. Before WISDOM, GEWIN and COLEMAN, Circuit Judges. PER CURIAM: This appeal arises out of an action brought by the Equal Employment Opportunity Commission under Title VII, Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended by the Equal Employment Opportunity Act of 1972 P.L. 92-261,. 86 Stat. 103 (March 24, 1972), seeking reinstatement and back pay for the allegedly aggrieved party, Sandra Drew, pending final disposition of her charge before the Commission. The Appellant, Liberty Mutual Insurance Company (Liberty), complains of an order issued by the District Court, 346 F.Supp. 675, requiring it to reinstate Mrs. Drew to her former position and directing that she be given back pay with interest from the date of her discharge. We are unable to agree with the contention of Liberty that the record fails to support the action taken by the District Court. Our review of the record fails to convince us that the District Court abused its discretion in issuing the order. However, we take note of the fact that the order of the District Court has provided Mrs. Drew with full pay for a period of almost one full year. In addition, she was allowed interest on the back pay awarded to her during the period of her discharge before reinstatement. Pursuant to inquiry by this Court on oral argument, counsel for both parties informed the Court that nothing substantial has been accomplished by the Commission with respect to Mrs. Drew’s complaint since the District Court entered its order. This ease should receive immediate attention and the controversy should be brought to a proper conclusion. We do not approve the delay by the Commission which is evident in this case, especially in circumstances in which the relationship between employer and employee is seriously affected by the terms of an injunctive order. We remand the case to the District Court with Directions to institute appropriate procedures to require the Commission to proceed with the investigation and possible disposition of the complaint involved in accordance with the duties imposed upon it by the applicable statutes and that this litigation be brought to a conclusion without further undue delay. Affirmed and remanded.

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UNITED STATES of America, Appellee, v. James Earl GRANT, Jr. No. 72-1700. United States Court of Appeals, Fourth Circuit. March 2, 1973. Before WINTER, CRAVEN and FIELD, Circuit Judges. ORDER Upon careful consideration of the petition for rehearing, with the concurrence of Circuit Judge CRAVEN, the. petition is denied. Circuit Judge WINTER would grant the petition to rehear for the reasons stated in his dissent. WINTER, Circuit Judge (dissenting): Further study of this case, occasioned by Grant’s petition for rehearing with a suggestion for rehearing in banc, persuades me that we should grant rehearing. I therefore dissent from denial of the petition. The point warranting further consideration is the racial composition of the panels from which the district-wide grand jury, which indicted, and the Raleigh Division petit jury, which convicted, were chosen. Both exhibited substantial discrepancies from the black population in the communities from which they were drawn and both appear to have been chosen in violation of The Jury Selection and Service Act of 1968, 28 U.S.C.A. §§ 1861 et seq. It is true that Grant, himself black, was indicted by a grand jury and convicted by a petit jury on which there was black representation roughly comparable to the black representation of the communities from which they were drawn, but Peters v. Kiff, 407 U.S. 493, 92 S.Ct. 2163, 33 L.Ed.2d 83 (1972) would seem to stand for the proposition that standing to challenge jury selection procedures does not require a showing of particular prejudice to the defendant. The jury plan for the Eastern District of North Carolina provides that grand juries shall be chosen from the lists of actual voters of the political subdivisions within the district and petit juries from the lists of actual voters of the political subdivisions within the division. The plan contains no provision for access to secondary sources “in addition to voter lists where necessary to foster the policy and protect the rights secured by sections 1861 and 1862 [the right to juries selected at random from a fair cross section of the community and the right not to be excluded from jury service on account of race, color, religion, sex, national origin, or economic status] . . .” § 1863(b)(2). Statistics are available to show the 1960 and 1970 census figures for population, by race, in the district and in the division, and statistics are available to show registered voters, by race, in both. These figures demonstrate that, in the district, blacks represented from 31.9% to 34.8% of the population but only 20.9% of the registered voters. In the division, blacks represented from 27 % to 23.8% of the population and only 17.2% of the registered voters. Of course the jury plan depended not on registered voters, but on actual voters for the selection of jurors, and no statistics are available to show actual voters by race. However, certain substitutes are available, and they unfortunately demonstrate that the discrepancies between the percentages of blacks of the total population and the percentages of blacks among registered voters were extended and magnified. With regard to the district, a 1969 sample of 20% of the list from which grand jurors were chosen showed only 14.5% black representation and a 1971 report to the Administrative Office showed only 21.89% non-white names selected and only 18.-23% non-white potential grand jurors actually reporting, from which the grand jury was selected. This, in a district where the black population was from 31.9% to 34.8%. With regard to the division, where blacks represented from 27% to 23.8% of the population, a 1971 sample from the jury wheel showed only 12.94% nonwhites with only 12.90% non-whites reporting for selection. A,n actual count of potential jurors for the period 1/26/71 to 2/14/72 shows that of those actually reporting, only 14.41% were non-white and of those completing their questionnaires and eligible to serve, only 11.22% were non-white. It seems to me that when, as these figures would indicate, the black under-representation on the list from which the grand jury was drawn was between one-third and one-half of the total black population, and the black underrepresentation on the list from which the petit jury was drawn was approximately one-half of the total black population, it can hardly be said that these juries were drawn from a fair cross section of the community in the district or division as § 1861 guarantees. I would grant rehearing and proceed not only to consideration of the specific relief to which defendant was entitled, but also to what modifications to the jury plan should be required to make it accomplish the objectives of the Act.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

KENNETH REED CONSTRUCTION CORPORATION v. The UNITED STATES. No. 144-70. United States Court of Claims. March 16, 1973. V. Keith Young, Orlando, Fla., Atty. of record, for plaintiff. Michael J. Rubin, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. ON PLAINTIFF’S MOTION AND DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT PER CURIAM: This ease was referred to Trial Commissioner H. D. Cooper with directions to prepare and file his opinion on the issues of plaintiff’s motion and defendant’s cross-motion for summary judgment under Rule 166(c). The commissioner has done so in an opinion and report filed on December 4, 1972, wherein such facts as are necessary to the opinion are set forth. On February 16, 1973, the parties hereto filed a joint motion requesting that the court adopt the report of the commissioner and enter judgment in accordance therewith. Since the court agrees with the opinion and recommended conclusion of the trial commissioner, it hereby adopts the same as the basis for its judgment in this case, as hereinafter set forth, without oral argument. Therefore, plaintiff’s motion for summary judgment is granted as to Count I and denied as to Count III, and that part of the petition is dismissed. Defendant’s cross-motion for summary judgment is denied as to Count I and is granted as to Count III. The case is remanded to the Corps of Engineers Board of Contract Appeals pursuant to Public Law 92-415 and General Order No. 3 for a period not to exceed 6 months, to afford the parties an opportunity to obtain an administrative resolution of the equitable adjustment to which plaintiff is entitled under Count I of its petition. OPINION OF COMMISSIONER COOPER, Commissioner: This action, in three counts, seeks review, in accordance with the standards prescribed in the Wunderlich Act, of a decision of the Corps of E of the Corps of Engineers Board of Contract Appeals (hereinafter referred to as ENG BCA) denying plaintiff’s claims for an equitable adjustment. The case is before the court on cross-motions for summary judgment pursuant to Rule 163(b). The subject contract (No. DA-08-123-CIVENG-63-57) was for the construction of a four-bay reinforced concrete spillway structure with four vertical steel lift gates, and other work. The structure, designated 65C, was tó be constructed on Canal 38 (Kissimmee River), a phase of the central and southern Florida flood control project. Count I of the petition seeks an equitable adjustment for additional work performed in constructing certain wooden forms used in pouring concrete under the subject contract. Count II is presented as an alternative to Count I and seeks further discovery and a de novo proceeding either in this court or on remand to the ENG BCA as to plaintiff’s entitlement to an equitable adjustment for the additional work performed on the wooden forms. In Count III, plaintiff seeks an equitable adjustment for additional work required to repair admittedly defective vertical steel lift gates. For the reasons stated hereinafter, plaintiff’s motion as to Count I is granted and defendant’s cross-motion is denied; and plaintiff’s motion as to Count III is denied and defendant’s cross-motion is granted. Since Count I is disposed of favorably to plaintiff, it is unnecessary to rule on the motions as to Count II. Count I Much of the work under this contract involved the construction of forms and the pouring of mass concrete. It is with respect to the construction of the forms that plaintiff seeks an equitable adjustment. The essence of the claim under Count I is plaintiff’s contention that it was required to construct the forms to tolerances that were not set out in the contract specifications and that were more restrictive than necessary to meet specified tolerances for the finished concrete. Paragraph 4-16 of the specifications is entitled “Forms and Formed Surfaces.” Subparagraph 4-16(a) provides : a. General: Forms shall be true to line and grade, mortar-tight and sufficiently rigid to prevent objectionable deformation under load. That portion of the form in contact with the concrete shall not be of a material which interferes with the setting of the concrete., Where forms for continuous surfaces are placed in successive units, care shall be taken to fit the forms over the completed surface so as to obtain accurate alinement of the surface and to prevent leakage of mortar. Responsibility for their adequacy shall rest with the Contractor; however, the type, shape, size, quality, and strength of all materials of which the forms are made shall be subject to specific approval. Bolts and rods used for internal ties shall be so arranged, that when the forms are removed, metal will be not less than 2 inches from any concrete surface. Wire ties will not be permitted. All forms shall be so constructed that they can be removed without damaging the concrete. All exposed joints, edges, and external corners shall be chamfered and dummy chamfers and false joints shall be used to provide a neat and uniform appearance, unless otherwise directed or indicated on the drawings. The issue presented is whether the statement that “forms shall be true to line and grade” was intended to establish a standard of no deviations or zero tolerances for the forms. If not, a second issue is what tolerances for the forms were to be allowed under the specifications ? The facts relevant to this count are undisputed. According to the testimony of plaintiff’s president, prior to bidding on this project, he read the specifications, including ¶ 4-16(a), and was aware of the statement that the forms were to be “true to line and grade.” But, according to his testimony, since “you cannot build anything in construction to a true line and grade,” he considered that statement only from the standpoint of reading on to see what the rest of the paragraph specified. Finding no stated tolerances in the specifications for the wooden forms, but noting the tolerances in subparagraphs 4-16 (b) and (c) for the finished concrete, plaintiff’s president testified that he selected tolerances for the forms that would “meet comfortably and flexibly the end products requirements” and priced the contract on that basis. The tolerances selected were plus or minus one-eighth of an inch or a maximum of one-fourth inch. According to the uncontroverted testimony in this record, these tolerances for the forms would have enabled plaintiff to produce finished mass concrete within the specified tolerances. Plaintiff undertook construction of forms within the tolerances it had unilaterally selected. However, prior even to the first pour, the Government resident engineer inspected the forms and required plaintiff to make further adjustments in their plumbness and alignment. This practice continued throughout the entire contract, with the resident engineer inspecting each form prior to each pour and, in the vast majority of cases, requiring further adjustments in the forms. Although plaintiff contends that the resident engineer required the forms to be built to a tolerance of one-sixteenth of an inch, or closer, the ENG BCA found that plaintiff was never required to build its forms to any specific tolerance. The ENG BCA accepted the testimony of the resident engineer who testified that he accepted each form only when, in his judgment, it was “on the money” or when it appeared to him “that the contractor had exercised reasonable effort to get the form plumb and straight and further effort by him would damage the form rather than further improve it.” The resident engineer’s assistant testified he was not aware of any permissible tolerances for the forms and, when asked what standard he used to accept or reject the forms, he replied that he “used the line and grade standard of plumb.” At no time was plaintiff allowed to pour concrete with forms constructed to its own selected tolerances. Plaintiff contends that the statement “forms shall be true to line and grade” was not intended to be taken literally and did not purport to establish the tolerances for the forms. Plaintiff further argues that since f 4-16 (a) did not establish tolerances for the forms, it was reasonable to look to subparagraphs 4-16(b) and (c) in which the tolerances for the finished concrete were set forth to establish reasonable tolerances for the forms. In opposition to this interpretation, defendant asserts that jf 4-16 (a) calls out a specific unambiguous technical requirement, viz, “forms shall be true to line and grade” and that the mandatory nature of this requirement did not permit the contractor to look to any other portion of the specifications to establish tolerances for the forms. In resolving this conflict in interpretation, it is a “fundamental precept of common law that the intention of the parties to a contract control its interpretation.” Firestone Tire & Rubber Co. v. United States, 444 F.2d 547, 551, 195 Ct.Cl. 21, 30 (1971). The parties’ intent must be gathered from the instrument as a whole. AMP Inc. v. United States, 389 F.2d 448, 182 Ct.Cl. 86 (1968), cert. denied, 391 U.S. 964, 88 S.Ct. 2033, 20 L.Ed.2d 878; International Arms & Fuze Co. v. United States, 73 Ct.Cl. 231 (1931). To arrive at the meaning to be attributed to a provision, the language of a contract must be given that meaning that would be derived from the contract by a reasonably intelligent person acquainted with the contemporaneous circumstances. Firestone Tire & Rubber Co., supra; Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 169 Ct.Cl. 384 (1965). Trade usage and custom in the business community within which the agreement was framed is a factor to be considered in ascertaining the meaning intended for a contractual provision. Gholson, Byars & Holmes Constr. Co. v. United States, 351 F.2d 987, 173 Ct.Cl. 374 (1965); W. H. Edwards Eng’r Corp. v. United States, 161 Ct.Cl. 322 (1963). If the meaning to be attributed to the provision in question is ambiguous or is not manifest from the four corners of the contract and if a reasonable man could reasonably interpret the contract in different ways, that interpretation will be given the document which is more favorable to the party who did not draw it. WPC Enterprises, Inc. v. United States, 323 F.2d 874, 163 Ct.Cl. 1 (1963); Peter Kiewit Sons’ Co. v. United States, 109 Ct.Cl. 390 (1947). These well-settled principles, when applied to the facts, lead to the conclusion that plaintiff’s interpretation not only is a reasonable one but also coincides with the apparent intent of the parties. The end product contemplated by the contract was a specified mass concrete structure with the wooden forms being but the means to be employed in achieving that end product. As to the end product itself, the specifications expressly permitted deviations in the line and grade, and specified tolerances for those deviations. Moreover, the specifications expressly permitted deviations in the surface finish of the concrete structure and specified tolerances for those deviations. In such circumstances, it would be unreasonable to assume that the parties intended to contract for a less-than-perfect end product but, at the same time, intended that the forms would be built with mathematical exactitude (a standard found by the ENG BCA impossible to achieve). Nor does the language of ¶[ 4-16(a) compel such an unreasonable interpretation of the specifications. Paragraph 4-16 (a) is entitled “General,” a title which implies that the statements contained therein are but statements of a general nature and are not necessarily, intended to be taken in a strict or absolute sense. The relative, rather than absolute, nature of the statements in ¶[ 4-16(a) is illustrated by the requirement that the forms be “sufficiently” rigid to prevent “objectionable” deformation. Statements such as these, coupled with the delegation of responsibility for the forms to the contractor, indicate that |j 4-16 (a) was intended merely to set standards of a generalized nature, with the contractor having responsibility for building the forms to meet the specific standards established for the finished concrete in the succeeding paragraphs. This interpretation not only gives a reasonable meaning to all parts of the instrument, but also is in keeping with the rule that where general and specific provisions are in any respect inconsistent, the provision that is specific controls over the provision which is general. Hoi-Gar Mfg. Corp. v. United States, supra. The evidence in the record, which stands uncontroverted, as to the trade practice in the construction industry further supports this interpretation. According to that evidence, it is not normal practice for contract specifications to set forth separate, specific tolerances for the forms. Nor are there tolerance “standards” for wooden forms, the usual practice being for the contractor to be guided in the construction of the forms by the tolerance limits set forth for the finished concrete. It further appears from the record that the range of acceptable tolerances on finished concrete varies widely, with the tolerances on certain types of concrete structures, e. g., buildings, being more restrictive than the tolerances normally permitted on mass concrete structures such as that which is the subject of this contract. Based on the foregoing, it is concluded that a reasonable reading of the specifications as a whole, in light of prevailing trade practices, is that the parties did contemplate reasonable deviations in the line and grade of the forms, and that, in exercising its responsibility, the contractor was to be guided in the construction of the forms by the tolerances set forth for the finished concrete structure. Even were the specifications reasonably susceptible of another interpretation, plaintiff’s interpretation, being a reasonable one, would be controlling in this case. WPC Enterprises, Inc. v. United States, supra; Peter Kiewit Sons’ Co. v. United States, supra. This is particularly so where defendant’s interpretation seeks to impose a standard impossible to achieve. Owens-Corning Fiberglas Corp. v. United States, 419 F.2d 439, 459, 190 Ct.Cl. 211, 245 (1969). Defendant argues that this interpretation of the contract is directly contrary to what was expressly intended by the specifications. At the hearing, defendant adduced testimony which established that in previous contracts of a similar nature, the specifications provided that “forms shall be true to line and grade, within allowable tolerances for concrete surfaces.” According to defendant’s witness, the phrase “within allowable tolerances for concrete surfaces” was deleted in the subject contract to avoid difficulties experienced on other construction projects in which tolerances for the forms had been based on those specified for the finished concrete. However, there is no evidence in the record that plaintiff was aware of the previous problems encountered by defendant. Nor is there any evidence that plaintiff was aware either that its contract represented a departure from earlier contracts or that defendant intended, by the noted deletion, to impose a tolerance standard higher than was customary. It is, of course, well-settled that the subjective, unexpressed intentions of one party are not binding on the other. Firestone Tire & Rubber Co., supra; Singer-General Precision, Inc. v. United States, 427 F.2d 1187, 1193, 192 Ct.Cl. 435, 446-447 (1970). If it was the intention of defendant to alter existing trade practices and require that the wooden forms be constructed to tolerances more restrictive than customary, it had the obligation to so state in clear and unambiguous language. Tufano Contracting Corp. v. United States, 356 F.2d 535, 174 Ct.Cl. 398 (1966). It did not do so in this case. This leaves then the question of whether plaintiff is entitled to recover compensation for the work required to adjust the forms to the standards imposed by the resident engineer. From a review of the record and the briefs, it appears that defendant does not challenge plaintiff’s assertion that its proposed tolerances for the forms would have produced an acceptable finished concrete structure. Nor is there any dispute that the resident engineer, by holding plaintiff to a standard of “on the money,” employed a standard more restrictive than was customary. This court has previously held that the imposition on a contractor of tolerances not set forth in the contract and in excess of those normally employed on jobs of a similar character is an unwarranted interference in the performance of the contract and the contractor is entitled to be compensated for the extra costs in endeavoring to comply with the standards imposed. WRB Corp. v. United States, 183 Ct.Cl. 409, 445, 487, 490 (1968). So also here, plaintiff is entitled to compensation for the extra costs it incurred in adjusting its forms to comply with the standards imposed by the resident engineer. Count III The question presented under this count is whether the cost of repairing admitted defects in three of the spillway-lift gates is chargeable to defendant. The facts pertinent to this count are also undisputed. Plaintiff subcontracted the work for fabrication of the lift gates to the Florida Steel Corporation and defendant was so advised. Government inspectors visited the plant where the gates were being fabricated and advised the supplier of what the Government expected in the way of a finished product. The inspectors visited the plant on several different occasions, but remained only a few minutes on each occasion. Prior to shipment of the gates to the jobsite, the inspectors visited the plant and inspected the gates after they had been completely assembled. The inspector who testified at the hearing said he found no deformity in the two assembled gates he inspected. The parties have stipulated that no Government inspectors, or other personnel, were in the supplier’s plant at any time during assembly or disassembly of the gates and it is undisputed that plaintiff did not notify the Government when the gates were ready to be assembled and inspected. The gates were delivered to the job-site in a disassembled condition, having been hauled there by truck and unloaded by crane. Plaintiff’s superintendent apparently casually inspected the gates during unloading but did not observe any obvious defects. The gates remained at the jobsite at least 4 months before they were assembled. When the gates were bolted together for the first time, defects in three of the gates were readily discernible. There is no dispute concerning the extent of the defects, the only argument being as to who should bear the expense of repairing the defects. The ENG BCA rejected plaintiff’s claim, concluding that, under the contract, responsibility for the gates rested on plaintiff and that the cost of repairing the gates was to be borne by plaintiff. We agree with the Board’s conclusion. Plaintiff agreed to furnish and install vertical lift gates, a responsibility which it could not escape merely because it subcontracted part of the work. The contract expressly states that, unless otherwise provided, acceptance was to be made “after completion and inspection of all work required by this contract.” All inspections, except shop inspections, were to be made at the site of the work. As to shop inspections, the technical specifications provided that “the acceptance of any material or finished member by an inspector shall not prevent subsequent rejection if such material or finished member is later found to be defective” and that “the Government reserves the right to reject any material at any time before final acceptance of the structure.” There is no dispute that the defective gates were rejected before final acceptance of the structure. Plaintiff argues, however, that ¶ 7-14 of the technical specifications required defendant to make an assembly inspection, and that defendant’s failure to inspect resulted in patent defects passing undetected. Plaintiff further argues that if defendant had met its contractual obligation, these defects would have been discovered and corrected at the plant instead of at the jobsite, where the corrections were more costly. The provision providing for assembly and disassembly work to be performed in the presence of a Government inspector simply gave the Government the right to be present when this work was being performed and, hence, was for the benefit of the Government and could be waived by the contracting officer. While it is true that the Government did neither in this case, the failure of defendant to exercise its contract rights does not relieve plaintiff of its responsibilities under the contract. Red Circle Corp. v. United States, 398 F.2d 836, 185 Ct.Cl. 1 (1968); cf. Russell R. Gannon Co. v. United States, 417 F.2d 1356, 189 Ct.Cl. 328 (1969). Nor is plaintiff in any position to complain about the absence of inspectors during the assembly work. Under the terms of the contract, plaintiff was required to “keep the Contracting Officer informed as to the commencement and progress of the work.” The president of plaintiff admitted that he did not inform defendant when the assembly and disassembly of the gates would take place. Nor, so far as it can be determined from the record, did plaintiff make any effort to comply with General Provision 31 and maintain inspection procedures of its own at the subcontractor’s plant. Under these circumstances, there is no basis whatever for plaintiff asserting it was damaged by the defendant’s failure to dispatch an inspector to view the assembly and disassembly. Plaintiff places heavy reliance on Southwest Welding & Mfg. Co. v. United States, 413 F.2d 1167, 188 Ct.Cl. 925 (1969). The only common factor between this case and the Southwest Welding case is that, in both cases, defects were discovered after offsite inspections had been conducted. However, in the Southwest Welding case, offsite inspections were specifically authorized and such inspections were, under the terms of the contract, to be final and conclusive. In the present case, the inspections of the gates did not occur “during” assembly and disassembly and, hence, were not covered by |f 7-14. The inspections that were made were either shop inspections under ff 7-12, or an inspection not authorized in writing under |f 10(a). In either case, the contract expressly disclaims any finality for such inspections. The ENG BCA was correct as a matter of law in interpreting the contract provisions applicable to plaintiff’s claim in Count III of its petition, and plaintiff has failed to demonstrate that the Board’s findings of fact are arbitrary, capricious or not supported by substantial evidence. For the reasons stated, plaintiff is not entitled to recover on Count III of its petition. CONCLUSION For the foregoing reasons and upon the law and the evidence in the administrative record, plaintiff’s motion for summary judgment is granted as to Count I and denied as to Count III, and that part of the petition is dismissed. Defendant’s cross-motion for summary judgment is denied as to Count I and is granted as to Count III. The case is remanded to the Corps of Engineers Board of Contract Appeals pursuant to Public Law 92-415 and General Order No. 3 for a period not to exceed 6 months, to afford the parties an opportunity to obtain an administrative resolution of the equitable adjustment to which plaintiff is entitled under Count I of its petition. . 68 Stat. 81, 41 U.S.C. §§ 321-322 (1970). . Kenneth Reed Constr. Corp., ENG BOA Nos. 2706 and 2707, 67-2 BOA ¶ 6556 and 68-2 BOA ¶ 7302. . The ENG BOA adopted this view, holding that “it could simply mean, as we think it does, that deviations from ‘true’ would not be permitted.” This conclusion, involving an interpretation of the contract, is neither final nor binding on this court. Jack Stone Co. v. United States, 344 F.2d 370, 170 Ct.Cl. 281 (1965). . Subparagraph 4-16 (b) of the specifications sets forth classes of surface finishes for the finished concrete and specifies acceptable tolerances for each class of finish. Subparagraph 4r-16(c), entitled “Construction Tolerances,” specifies the acceptable tolerances for variations in the line and grade of the concrete structure. . The resident engineer did permit some deviations in some of the forms and, on a few occasions, permitted concrete to be poured with forms as much as one-eighth of an inch out of plumb and alignment. As to those forms, there is no evidence that the resultant concrete structure was anything other than entirely satisfactory. . This delegation of responsibility did not extend to the form materials. As to these, specific approval was required. . The General Services Administration Board of Contract Appeals reached a similar conclusion in interpreting specifications which required “all standing marble shall be set straight and true in a verticle plain [sic] of perfect alignment.” Norair Engr. Corp., GSBCA No. 1098, 65-2 BCA ¶ 5057. For a similar interpretation of tlie word “exact” in a contract where no tolerances were set out, see Roscoe Engr. Corp. & Associates, AS-BCA No. 5743, 61-1 BOA ¶ 3063. . The recitation of facts is drawn from the opinion of the EXG BCA. . General Provision 10(f). . General Provision 10(a). . Part III, Technical Provisions, Section 7, ¶ 7-12. . This paragraph provides as follows: “SHOP ASSEMBLY: Unless otherwise specified, each machinery and structural unit furnished shall be assembled in the shop to determine the correctness of the fabrication and matching of the component parts. The tolerances shall not exceed those shown on the drawings and each unit assembled shall be closely checked to insure that all necessary clearances have been provided and that binding does not occur in any moving part. Assembly and disassembly work shall be performed in the presence of a Government inspector, unless waived in writing by the Contracting Officer, and any errors or defects disclosed shall be immediately remedied by the Contractor, without cost to the Government. Before disassembly for shipment, each piece of a machine or structure shall be match-marked to facilitate erection in the field. The location of matcli-marks shall be indicated by circling with a ring of white paint after the shop coat of paint has been applied, or as otherwise directed.” • . Technical Provisions, ¶ 7-12. . “31. CONTRACTOR INSPECTION SYSTEM (NOV. 1961) The Contractor shall (i) maintain an adequate inspection system and perform such inspections as will assure that the work performed under the contract conforms to contract requirements, and (ii) maintain and make available to the Government adequate records of such inspections.”

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Hal Joseph ROTHGERY, Executor of the Estate of Bernard Anthony Rothgery, Deceased, v. The UNITED STATES. No. 63-69. United States Court of Claims. March 16, 1973. Harlan Pomeroy, Cleveland, Ohio, attorney of record, for plaintiff. Baker, Hostetler & Patterson, Cleveland, Ohio, of counsel. Jane C. Bergner, Washington, D. C., with whom was Asst. Atty. Gen. Scott P. Cramp ton, for defendant. Theodore D. Peyser, Washington, D. C., of counsel. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. OPINION PER CURIAM: This case was referred to Trial Commissioner Mastin G. White with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 134(h). The commissioner has done so in an opinion and report filed on May 8, 1972. Exceptions to the commissioner’s opinion, findings of fact and recommended conclusion of law were filed by plaintiff, and defendant requested that the court adopt the commissioner’s findings but urged that the court adopt a different conclusion of law to give effect to an agreement of the parties made at trial. The case has been submitted to the court on oral argument of counsel and the briefs of the parties. Since the court agrees with the commissioner’s opinion, findings of fact and recommended conclusion of law, with a modification in the conclusion of law, it hereby adopts the same, as modified, as the basis for its judgment in this case as hereinafter set forth. Therefore, it is concluded (1) that the plaintiff is not entitled to recover on its claim that the Commissioner of Internal Revenue erroneously valued the decedent’s stock in Rothgery Motors, Inc., and (2) that the plaintiff is entitled to recover such amount as results from allowing a deduction for reasonable fees and expenses incurred in connection with the prosecution of this case, together with interest as provided by law, and judgment is entered to that effect. The amount of recovery will be determined in accordance with Rule 131(e). OPINION OF COMMISSIONER WHITE, Commissioner: Hal Joseph Rothgery, the plaintiff, is the son and executor of the estate of Bernard Anthony Rothgery, deceased (“the decedent”). In the present action, the plaintiff seeks to recover federal estate taxes which he paid to the Internal Revenue Service because of deficiencies assessed by that agency in 1965 and 1966. It is my opinion that the plaintiff is not entitled to recover. The decedent, a resident of Grafton, in Lorain County, Ohio, died on May 16, 1962. Prior to and at the time of his death, the decedent owned 125 shares, or 50 percent, of the outstanding stock in Rothgery Motors, Inc. (“the corporation”), an Ohio corporation and automobile dealer founded by the decedent and located in Grafton, Ohio. The 125 shares of stock in the corporation owned by the decedent were bequeathed by him in his will to his son, the plaintiff, who already held 124 shares of the corporation’s stock. The remaining share of stock in the corporation was held by Jeanne Rothgery, the plaintiff’s wife and the decedent’s daughter-in-law. In the federal estate tax return which the plaintiff filed for the decedent’s estate, the value of the decedent’s 125 shares of stock in the corporation was reported as $7,590, or $60.72 per share. This valuation was reflected in the amount of the estate tax which the plaintiff paid in connection with the return. The valuation of the corporation’s stock at $60.72 per share for federal estate tax purposes was arrived at by using a price-earnings ratio of 12 times the average annual earnings of the corporation for the 4 years immediately preceding the decedent’s death, and allocating the resulting amount among the 250 shares of outstanding stock. After administrative proceedings that will be discussed more fully in another part of this opinion, the Internal Revenue Service assessed and collected from the plaintiff in 1965 and 1966 estate tax deficiencies that were ultimately based upon a valuation of $72,750, or $582 per share, which the IRS placed on the decedent’s 125 shares of stock in the corporation. Therefore, the principal issue before the court in the present case involves a determination of the fair market value of the decedent’s 125 shares of stock in the corporation at the time of the decedent’s death. Value That the value of $60.72 per share which the plaintiff placed upon the decedent’s 125 shares of the corporation’s stock in preparing the federal estate tax return was grossly inadequate becomes readily apparent when it is noted that the corporation, at the time of the decedent’s death, had on hand cash in the amount of $44,661 and marketable securities having a value of $23,247, and that the corporation’s liabilities at the time amounted only to $3,223. Thus, if all other assets of the corporation are excluded and consideration is given only to the liquid assets, the corporation’s actual net worth at the time of the decedent’s death was $64,685. When this amount is allocated among the 250 shares of stock outstanding at the time of the decedent’s death, the resulting figure per share of stock, based on the corporation’s liquid assets alone, is $258.71 per share, rather than the $60.-72 per share stated in the federal estate tax return that was filed for the decedent’s estate. Perhaps it should be stated in this connection that the evidence in the record warrants the inference that the corporation’s cash and marketable securities on hand at the time of the decedent’s death were not being held by the corporation for any business need. It is true that, prior to the decedent’s death, the Chevrolet Motor Division of General Motors Corporation (the corporation was a Chevrolet dealer) had expressed to the decedent its dissatisfaction with the location of the corporation’s place of business at the time on Mechanic Street in Grafton, and had suggested to the decedent that he relocate the business. This dissatisfaction was also expressed by the Chevrolet Motor Division to the plaintiff following the decedent’s death. Despite pressure from the Chevrolet Motor Division, however, the corporation did not move its place of business until 1965, when the building on Mechanic Street was damaged by a tornado. Furthermore, the land and building on Mechanic Street used by the corporation prior to 1965 did not belong to the corporation, but to a trust which had been established by the decedent and which leased the premises to the corporation. Also, it is pertinent to note that the new premises to which the corporation moved in 1965 were not purchased by the corporation, but by the plaintiff and his wife, who leased such premises to the corporation. Thus, it is fair to infer that the corporation’s cash and marketable securities on hand at the time of the decedent’s death had not been assembled, and were not being held, for use in connection with any anticipated purchase by the corporation of a new place of business. In addition to the cash and marketable securities previously mentioned, the corporation at the time of the decedent’s death had other assets that exceeded the cash and securities in value. Findings 37-49, which are based upon a careful consideration of the sometimes conflicting evidence in the record respecting the value of the corporation’s assets, show that such assets had a total value of $149,111 at the time of the decedent’s death on May 16, 1962. This represents the amount that could have been realized from the corporation’s assets if the corporation had been liquidated upon the decedent’s death. If the corporation’s liabilities at the time, in the amount of $3,223, are deducted from the total value of the assets, the result is an actual net worth of $145,878 for the corporation at the time of the decedent’s death on May 16, 1962. When the net worth is allocated among the 250 shares of stock outstanding at the time of the decedent’s death, the amount per share is $583.51 and the total amount allocable to the decedent’s 125 shares of stock is $72,939. In this connection, the evidence in the record shows that the value of an automobile dealership, such as the corporation, is closely related — and generally corresponds — to the value of its underlying assets. Market The plaintiff contends, however, that there was no market for the decedent’s stock interest in the corporation after his death on May 16, 1962. This contention is based upon an inference that the acquisition of the decedent’s interest in the corporation would have been unattractive to a possible purchaser in view of the circumstances that a purchaser of the decedent’s 125 shares would have acquired only a 50 percent interest, and not a controlling interest, in the corporation, that the other 125 shares of the corporation’s stock were owned by the plaintiff (124 shares) and his wife (1 share), and that the plaintiff was unwilling to share the management and operation of the corporation with an outsider. With respect to the plaintiff’s contention, it is necessary to begin the resolution of any valuation problem by presupposing a “willing seller.” In the present case, therefore, we must begin with the assumption that the decedent’s 125 shares of stock in the corporation were not bequeathed by the decedent to his son, the plaintiff, and that such shares were available for sale by the decedent’s estate as a “willing seller.” If we begin with such an assumption, it is apparent at once' that the plaintiff himself would be a “willing buyer” of the decedent’s 125 shares of stock in the corporation. The evidence in the record shows that the plaintiff intended to continue the business of the 'corporation after his father’s death, and that he wished to have control of the corporation in order that his son might have a place in the business. This objective required the acquisition of the decedent’s stock interest in the corporation. The evidence warrants the inference that the plaintiff would have been willing to pay — and from a business standpoint would have been justified in paying — for the decedent’s half-interest in the corporation an amount equal to half the value of the corporation’s assets, or $72,939, if the decedent’s half-interest had been on the market for sale. Although income from the corporation in the form of dividends may have been modest and sometimes nonexistent, the corporation for years had provided the Rothgery family with a good living in the form of salaries, rents, expense accounts, and the use of automobiles; and there was every reason to anticipate that it would continue to do so in the future. In any event, the plaintiff could have recouped his investment by liquidating the corporation, as he would have been empowered to do. Furthermore, as indicated in findings 53 and 54, the evidence justifies the conclusion that there would have been other potential buyers for the decedent’s 125 shares of stock in the corporation at a price of $72,939 if the decedent’s estate, as a “willing seller,” had made the shares of stock available for sale to persons outside the Rothgery family. It seems unnecessary to extend the present discussion by summarizing findings 53 and 54 in the opinion. Fair Market Value For the reasons set out in the preceding portions of the opinion and outlined more fully in the findings of fact, it is concluded that the decedent’s 125 shares of stock in the corporation had a fair market value of $72,939, or $583.51 per share, at the time of the decedent’s death. Consequently, the figure of $72,750, or $582 per share, which the Internal Revenue Service ultimately used as the value of the decedent’s 125 shares of stock in the corporation was not excessive. Administrative Proceedings It now becomes necessary to consider an argument made by the plaintiff to the effect that, irrespective of the fair market value of the decedent’s 125 .shares of stock in the corporation, the 1966 estate tax deficiency assessed by the Internal Revenue Service was improper. As stated in an earlier portion of the opinion, the value of the decedent’s 125 shares of stock in the corporation was reported on the federal estate tax return as $7,590, or $60.72 per share. Following the filing of the estate tax return, the Internal Revenue Service caused an audit of such return to be made. The estate tax examiner who conducted, the audit proposed to fix the value of the stock in the corporation owned by the decedent’s estate at the book value ($625 per share) shown by the corporation’s balance sheet. The estate tax examiner prepared a formal report, which was transmitted to the plaintiff with a covering letter dated June 18, 1964, from the conference coordinator in the office of the District Director, Internal Revenue Service, Cleveland, Ohio. The transmittal letter stated in part as follows: In the event you still do not agree to the adjustments, we would like to arrange an informal conference to give you an opportunity to discuss these adjustments further and to submit additional or supporting information. A member of our staff would represent this office at such a conference and he will have full authority to modify the proposed adjustments to the extent warranted by law and regulations on the basis of the information submitted. Pursuant to the invitation contained in the letter of June 18, 1964, the plaintiff requested a conference with a member of the staff of the conference coordinator. Such a conference was held on August 12, 1964, in accordance with the procedure prescribed in paragraph (c) of Section 601.105 of 26 C.F.R. (Supp. 1964). The only disputed issue raised or discussed at the conference was the proper basis for valuing the estate’s stock interest in the corporation. The plaintiff (acting through his counsel) suggested that the adjustment which the estate tax examiner had proposed be modified on the basis óf an agreement under which the estate’s stock in the corporation would be valued at $132 per share. The conferee representing the Internal Revenue Service requested that the plaintiff submit certain additional supporting information; and stated that he would review the matter and thereafter advise the plaintiff. At the request of the conferee who represented the Internal Revenue Service at the conference on August 12, 1964, the plaintiff submitted in affidavit form certain additional information on August 13, 1964, in support of the plaintiff’s contention concerning the value of the estate’s stock in the corporation. Thereafter, the estate tax examiner wrote a letter to the plaintiff’s counsel, stating in part as follows: Just a note to say that I am enclosing a waiver Form 890 in the amount of $2,854.08, and Affidavit forms on the Attorney Fees and the Accountant’s fees. After the forms are completed, they can be returned back to me at this office. Two adjustments were made. 1) The Closely held stock was adjusted to a total value of $16,500.00 and 2) the Ford Motor Stock was adjusted to $2,309.37. In the event the Accountants and Attorney fees will [be] different than estimated on the Form 706, please let me know so that I can re-compute the tax. The plaintiff’s counsel replied on January 4, 1965, returning the waiver form “for recomputation, because of the change in the amount of attorney fees to be paid to me for the handling of this estate.” Subsequently, the estate tax examiner sent to the plaintiff’s counsel a corrected waiver form and a recomputation of the tax. These papers showed (among other things) that the value of the estate’s stock in the corporation had been increased from $7,590 (as shown on the estate tax return) to $16,500, and that there was an estate tax deficiency in the amount of $3,923.15. On January 12, 1965, by an executed Form 890, Estate Tax Waiver of Restrictions on Assessment and Collection of Deficiency and Acceptance of Over assessment, the plaintiff consented to the assessment of an estate tax deficiency in the amount of $3,923.15; and the plaintiff remitted his check for $4,256.62 in full payment of the deficiency and accrued interest thereon. Thereafter, such deficiency was assessed and the amount of the plaintiff’s remittance was credited thereon in full payment of such deficiency. On July 6, 1965, the plaintiff filed the final account for the decedent’s estate with the Probate Court for Lorain County, Ohio. The account was subsequently approved on August 14, 1965, and the estate was closed. On January 26, 1966 — which was more than a year after the plaintiff had paid the 1965 estate tax deficiency — the District Director of Internal Revenue advised the plaintiff that there was a further (or second) deficiency in estate tax based upon a redetermination of the value of the estate’s stock interest in the corporation. This time, it was proposed to raise the value of such stock interest to $72,750, or $582 per share. Such action was the result of a review of the estate tax return for the decedent’s estate in the office of the Regional Commissioner of Internal Revenue. The resulting deficiency in the amount of $16,200, together with interest thereon in the amount of $3,091.31, was thereafter assessed on October 21, 1966, and paid by the plaintiff on November 2,1966. In contending that the assessment of the second estate tax deficiency in 1966 was improper, the plaintiff relies upon the language of paragraphs (c) and (i) of Section 601.105 of 26 C.F.R. (Supp. 1964), particularly the following portions of those paragraphs: (c) Informal conference procedure. * * * (3) Rules governing informal conferences. The objective of the informal • conference procedure is to give taxpayers greater opportunity to reach an early agreement with respect to disputed items arising from examinations made by internal revenue agents. * * * It is the responsibility of the conference coordinator or other designated officer to prepare a conference report with respect to each case on which an informal conference is held. This report, which will set forth briefly and concisely the facts and conclusions reached with respect to each issue, will be made available to the. examining officer. In preparing his report the examining officer will give effect to the conference decisions. The examination report and the conference report are subject to review in the Audit Division of the district director’s office. The purpose of this review is to insure uniformity in the application of the provisions of the Code, the regulations, and rulings, as well as the general policy of the Service. Occasionally, however, review of a case discloses that the conferee’s decision was based on a clearly defined error having a substantial effect on the tax liability. In such an instance, if the change necessary to correct the error is adverse to the taxpayer, he will be offered another informal conference in the matter with the conference coordinator. In the event that an agreement with the taxpayer is reached at the informal conference, the taxpayer will be requested to execute Form 870 or other appropriate agreement form. Any deficiency in tax or additional tax proposed will then be assessed, or any overpayment will be credited or refunded. (i) Regional post review of examined cases. Regional commissioners review samples of the examined cases closed in their district offices to assure uniformity throughout their districts in the application of the provisions of the Code, regulations, and rulings, as well as the general policies of the Service. In certain circumstances, such as where substantial errors are found or where there is evidence of fraud or collusion, the regional commissioner has authority to reopen the case. * * * It is the position of the plaintiff that the assessment in 1966 of the second estate tax deficiency against the decedent’s estate was in violation of the provisions of Sec. 601.105 of 26 C.F.R. previously quoted, because the Regional Commissioner did not find “substantial errors” or “evidence of fraud or collusion” in connection with the assessment of the first estate tax deficiency following the conference of August 12, 1964. There is certainly no evidence in the record indicating “fraud or collusion,” and it is true that the Internal Revenue Service, in connection with the assessment of the second tax deficiency in 1966, did not expressly inform the plaintiff that “substantial errors” had been found in connection with the assessment of the first estate tax deficiency. On the other hand, the notice to the plaintiff by the IRS that the value of the estate’s stock in the corporation would be increased to $72,750 involved by necessary implication a determination that “substantial errors” had been found in the earlier valuation of $16,500 upon which the first estate tax deficiency was based. Furthermore,- the facts before the court show that the valuation of $16,500 involved substantial errors. It appears, therefore, that the Internal Revenue Service did not violate the pertinent provisions of the agency’s regulations in assessing the second estate tax deficiency against the decedent’s estate, and that such deficiency was not improper. Conclusion For the reasons stated in the preceding portions of the opinion, it is concluded that the fair market value of the decedent’s 50 percent stock interest in the corporation on May 16, 1962, was $72,939, that the figure of $72,750 which the Internal Revenue Service ultimately used as the value of such stock interest was not excessive, and that the second estate tax deficiency which the Internal Revenue Service assessed against the decedent’s estate in 1966 was not improper. It necessarily follows that plaintiff is not entitled to recover with respect to the value of the decedent’s stock interest and that the petition should be dismissed in that respect. . The parties have stipulated that plaintiff is entitled to recover such amount as results from allowing a deduction for reasonable fees and expenses incurred in connection with the prosecution of this case, together with interest as provided by law.

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MERANDO, INC. v. The UNITED STATES. No. 779-71. United States Court of Claims. March 16, 1973. Maurice A. Guervitz, Washington, D. C., attorney of record for plaintiff. Francis H. Clabaugh, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. KUNZIG, Judge. This is a contract action wherein this court, by cross motions for summary judgment, has been asked to review two decisions of the Armed Services Board of Contract Appeals (the Board) in accordance with standards established by the Wunderlich Act, 41 U.S.C. §§ 321-22 (1970). In issue is the reasonableness of the contractor’s conduct regarding items to be painted when faced with discrepancies between Painting Schedules and Finish Schedules. Only the question of entitlement is presently before this court, the parties having stipulated to leave the question of quantum for further proceedings. We hold that the Board’s conclusion, that Painting Schedules alone designate areas to be painted, is correct as a matter of law, notwithstanding inconsistencies with the Finish Schedules. Accordingly, plaintiff’s petition must be dismissed. This case encompasses two separate contracts. The first, No. DA44-110ENG-6020, entered into on April 20, 1966, was for construction at a barracks complex at Fort Myer, Virginia. The second, No. DACA31-67-C-0055, entered into on March 7, 1967, was for similar work at the United States Soldiers' Home, Washington, D.C. In both instances, during the course of performance, a dispute arose as to the painting requirements under the respective contracts. Plaintiff refused to paint the concrete ceilings. Despite the fact that the Painting Schedules did not include the ceilings in the category of “SURFACES NOT TO BE PAINTED”, plaintiff interpreted “exposed concrete” in the Finish Schedules as meaning unpainted concrete. The government rejected this interpretation and ordered plaintiff in both contracts to paint the ceilings. Timely appeals were filed and denied by the Board. Plaintiff then filed this case on October 20, 1971, consolidating the two contracts for purposes of this suit. Plaintiff contends that in light of the discrepancies between the Painting Schedules and the Finish Schedules, its interpretation (that the contract did not require that ceilings be painted) was reasonable. Plaintiff contends it is accordingly entitled to damages resulting from the government’s decision that the ceilings had to be painted. This court is not bound by the Board’s interpretation of the contract provisions, since such is a matter of law which the court is free to answer independently of the Board’s decision. International Telephone and Telegraph v. United States, 453 F.2d 1283, 1288, 197 Ct.Cl. 11, 20 (1972); HRH Constr. Corp. v. United States, 428 F.2d 1267, 1271, 192 Ct.Cl. 912, 918 (1970); Paschen Contractors, Inc. v. United States, 418 F.2d 1360, 1361, 190 Ct.Cl. 177, 180 (1969). This court continues to acknowledge the general rule that where ambiguous contract language could result in two or more reasonable interpretations the language will be construed against the author. Gorn Corp. v. United States, 424 F.2d 588, 592, 191 Ct.Cl. 560, 567 (1970); WPC Enterprises, Inc. v. United States, 323 F.2d 874, 876, 163 Ct.Cl. 1, 6 (1963); Peter Kiewit Sons’ Co. v. United States, 109 Ct.Cl. 390, 418 (1947). However, where the ambiguity or discrepancy is patently obvious, the contractor is then obligated to consult the government’s representative prior to bidding if he intends to rely upon his interpretation in the future. Space Corp. v. United States, 470 F.2d 536, 539, 200 Ct.Cl. -, - (1972); Allied Contractors, Inc. v. United States, 381 F.2d 995, 1000, 180 Ct.Cl. 1057, 1064 (1967); Beacon Constr. Co. v. United States, 314 F.2d 501, 504, 161 Ct.Cl. 1, 7 (1963). In the instant case the admitted discrepancy involved Painting Schedules versus Finish Schedules. The Painting Schedules clearly listed certain parts of the construction jobs to be left unpwint ed. Ceilings were not listed therein. However, on the drawings, the Finish Schedules described the ceilings as “exposed concrete”. Plaintiff contends that it was reasonable to assume that “exposed concrete” was the equivalent of unpainted concrete. However, in HRH Constr. Corp. v. United States, supra, the contractor similarly argued that certain areas were not required to be painted under the terms of the contract. These included “exposed concrete ceilings in stairwells, exposed concrete ceiling in the rubbish vestibule, and exposed concrete masonry unit walls in the mechanical equipment room and the -trash room”. Id. 428 F.2d at 1269, 192 Ct.Cl. at 915. As in the instant case, the section of the Painting Schedule entitled “SURFACES NOT TO BE PAINTED” did not include the disputed surfaces. This court held that despite the potential' discrepancy, the Finish Schedule did not change the language of the Painting Schedule. See also Champion, Inc., 69-2 BCA ¶ 7979, and Eslin Co., 68-1 BCA 6904. Plaintiff is also barred from arguing that this was a subtle discrepancy not imposing a duty to inquire. This court in HRH Constr. Corp., supra, stated clearly that: [T]he absence from the Finish Schedule of directions to paint the disputed surfaces should have put plaintiff on notice as to the existence of a discrepancy between the Finish Schedule and the painting schedule. Reading the contract as a whole, as one must, the omission was not obscure or subtle but “obvious”. Id., 428 F.2d at 1272, 192 Ct.Cl. at 920. Thus, the instant discrepancy is not subtle, but obvious. The only reasonable conduct for the contractor would have been an inquiry prior to submission of the bid. This the contractor did not do. Finally, the issue of this case can be resolved by referring to the contract itself. Section 2 of Standard Form 23-A (which was part of this contract) clearly states: In case of differences between drawings and specifications, the specifications shall govern. In the instant case, the Painting Schedules were clearly a part of the specifications, whereas the Finish Schedules were merely parts of the drawings. Thus, the section of the Painting Schedules which explicitly list those surfaces not be painted must govern. Plaintiff was therefore required to paint the concrete ceilings pursuant to the terms of the contracts. In light of the above, we find that the Board’s opinions withstand a Wunderlich Act review. Accordingly, the plaintiff’s motion for summary judgment is denied; the defendant’s cross motion for summary judgment is granted; and the petition is hereby dismissed. . Merando, Inc., 70-1 BCA ¶ 8311. . The specifications in contract DACA 31-67-C-0055 read in pertinent part: 9 SURFACES NOT TO BE PAINTED: The following items will not require painting: walls of elevator shaft, acoustical treatment, aluminum, copper, prefinished paneling and concrete floors. The specifications in contract DA-44-110-ENG — 6020 read in pertinent part: 27-08. SURFACES NOT TO BE PAINTED: The following listed items: concrete floors; aluminum ; copper; acoustical tile; sprinkler heads ,- hardware except bolts on steel doors.

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MERANDO, INC. v. The UNITED STATES. No. 780-71. United States Court of Claims. March 16, 1973. Maurice A. Guervitz, Washington, D. C. , attorney of record for plaintiff. Francis H. Clabaugh, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. KUNZIG, Judge. In this government contract case, the court is being asked by cross motions for summary judgment to review a decision of the Armed Services Board of Contract Appeals (the Board) pursuant to the Wunderlich Act, 41 U.S.C. §§ 321-22 (1970). The issue for consideration is whether the contractor is entitled to damages for work done outside of an admittedly misdrawn “contract limit line”. For the reasons that follow, we hold that the plaintiff-contractor is not entitled to recover as a matter of law. The contract in issue, No. DA 44-110-ENG-6020, was for the construction of an “E. W. Barracks” Complex at Fort Myer, Virginia. The Invitation for Bids (IFB) was issued on December 3, 1965. Since the drawings accompanying the IFB package displayed areas outside the contract work zone, the drawings contained the usual “contract limit line” within which the contract work was to be performed. Prior to bid opening, on February 16, 1966, the original IFB package was amended seven times. Amendments Nos. 2 and 4 cover the work which is the subject of this appeal. No. 2 revised certain drawings which depicted the Water and Sanitary Sewer Plan and the Steam Distribution Plan. This was designated on the drawings as Revision “b”. Inside of the contract limit line was a boiler building, Building No. 66, which was to be demolished pursuant to the contract. It supplied heat to buildings shown on the drawings, but which were outside of the work zone. The revisions encompassed in Amendment No. 2 incorporated changes necessary to supply heat to these other buildings once No. 66 was demolished. Some of the changes required pipe work outside of the contract limit line. On the revised drawings, an irregular circle (not a contract limit line) had been specially drawn outlining and calling attention to all of the new work to be done. This new line clearly showed that some of the work was outside of the contract limit line. Ideally, the limit line should have been moved by the defendant to include this new work. Such was not done. Amendment No. 4 similarly modified earlier plans and also referred to items both inside and outside of the contract limit line. Plaintiff then submitted a bid including estimated costs for the new work but ignoring costs for work outside of the limit line, and was awarded the contract. Sometime thereafter plaintiff inquired with reference to the additional work 'outside of the contract limit line. The Contracting Officer’s Representative replied that this work had been added to the contract prior to bidding by Revision “b” under Amendment No. 2. Plaintiff sought additional compensation for the disputed work. The claim was denied by the Contracting Officer’s Representative. A timely appeal was made to the Board which held that the additional work outside of the contract limit line as depicted in Revision “b” of Amendment No. 2 was part of the contract, and plaintiff was not entitled to additional compensation. Plaintiff accordingly filed a petition in this court on October 20, 1971. Plaintiff contends that the Board erred as a matter of law in finding that the additional work (outside of the contract limit line) was to be included under the contract as executed by the parties. It is undisputed that the Board’s conclusion is not final and binding on this court since it involves contract interpretation which is a question of law, International Telephone and Telegraph v. United States, 453 F.2d 1283, 1288, 197 Ct.Cl. 11, 20 (1972); HRH Constr. Corp. v. United States, 428 F.2d 1267, 1271, 192 Ct.Cl. 912, 918 (1970); Paschen Contractors, Inc. v. United States, 418 F.2d 1360, 1361, 190 Ct.Cl. 177, 180 (1969). Plaintiff interpreted the notations on the drawings concerning the additional work as merely “informational”, i. e. the notations were for coordination purposes between the plaintiff and the other contractors who plaintiff thought would be doing the additional work. Plaintiff, feeling that this was a reasonable interpretation, would have this court invoke the contra, proferentem rule. Whether or not this was a reasonable interpretation is not material, because the discrepancy in this case created more than a mere ambiguity; it evidenced an obvious omission on the part of the government. This imposed upon the contractor a duty to inquire if he intended to benefit from his interpretation in the future. Space Corp. v. United States, 470 F.2d 536, 539, 200 Ct.Cl. -, - (1972); Allied Contractors, Inc. v. United States, 381 F.2d 995, 1000, 180 Ct.Cl. 1057, 1064 (1967); Beacon Constr. Co. v. United States, 314 F.2d 501, 504, 161 Ct.Cl. 1, 7 (1963). Prior to submission of its bid, plaintiff received the revised drawings which reflected the new work without altering the contract limit line. Plaintiff also received additional detailed drawings which described only the work outside of the limit line. There would have been no reason for the government to send these detailed drawings if the contractor was not meant to include this additional work when submitting its bid. This knowledgeable and experienced contractor should also have known that it was unlikely that the government specifications would have required laying pipe to an imaginary point without any instructions as to capping or connections. This would have been the result if plaintiff's interpretation were accepted. Faced with the patently obvious discrepancy between the placement of the contract limit line and the additional work, plaintiff should have inquired. This pre-bid inquiry would have clarified the situation and allowed the contractor to bid in accordance with the requirements of the contract. In light of the above, the plaintiff is not entitled to recover damages from the government for work which was outside of the contract limit line. Although it was the government’s error in not altering the limit line, the error was or should have been obvious to the contractor thus necessitating pre-bid inquiry to clarify the discrepancy. Having failed to seek clarification, the plaintiff is now barred from recovering on its claim. Accordingly, we find that the Board’s opinion withstands a Wunderlich Act review. The plaintiff’s motion for summary judgment is denied; the defendant’s cross motion for summary judgment is granted; and the petition is hereby dismissed. . Merando, Inc., 69-2 BCA ¶ 7946. . Only the question of entitlement is before the court, the parties having stipulated to leave the question of quantum for further proceedings. It was also agreed that the contractor’s claim for damages due to delays is properly pertinent to the question of quantum and would therefore be postponed until that matter should be reached. . As this court has mentioned often, if a discrepancy in contract language creates an ambiguity, and if the contractor’s interpretation falls within the zone of reasonableness, the ambiguity will be construed against the government as the author of the ambiguous document. Brezina Constr. Co., Inc. v. United States, 449 F.2d 372, 375, 196 Ct.Cl. 29, 33 (1971); Gorn Corp. v. United States, 424 F.2d 588, 592, 191 Ct.Cl. 560, 567 (1970); Peter Kiewit Sons’ Co. v. United States, 109 Ct.Cl. 390, 418 (1947).

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MERANDO, INC. v. The UNITED STATES. No. 807-71. United States Court of Claims. March 16, 1973. Maurice A. Guervitz, Washington, D. C., attorney of record for plaintiff. Francis H. Clabaugh, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. KUNZIG, Judge. In this government contract case, the court is being asked by cross motions for summary judgment to review a decision of the Armed Services Board of Contract Appeals (the Board) pursuant to the Wunderlich Act, 41 U.S.C. §§ 321-22 (1970). In issue is whether the contract language was clear enough to give the eon-tractor an unambiguous representation of the method of pouring concrete. Only the question of entitlement is presently before this court, the parties having stipulated to leave the question of quantum for further proceedings. . We hold that the Board was correct as a matter of law when it concluded that the plaintiff’s strained interpretation of the specifications would render the specifications as a whole meaningless. Accordingly, plaintiff’s petition must be dismissed. On April 20, 1966 plaintiff was awarded a contract. No. DA44-110-ENG6020, for the construction of a reinforced concrete frame building at Fort Myer, Virginia. The building contained a basement plus four elevated levels. The wings of the building varied from 114 to 122 feet. The dispute arose when the resident engineer realized that the plaintiff intended to pour concrete for each wing in one continuous operation. This he argued was in violation of the sixty foot limitation for any concrete pouring. Paragraph 2-15 of Section 2 of the specifications provides in pertinent part: 2-15. CONSTRUCTION JOINTS: The unit of operation shall not exceed 60 feet in any horizontal direction, unless approved by the Contracting Officer. Concrete shall be placed continuously so that the unit will be monolithic in construction. At least 48 hours shall elapse between the casting of adjoining units. . While the resident engineer interpreted the sixty foot limitation on the “unit of operation” as referring to a pour of concrete, the contractor interpreted it as referring to construction joints. The plaintiff reluctantly adhered to the resident engineer’s interpretation and filed a claim for the additional work which was subsequently required. The claim was denied by the Contracting Officer and the Board. Plaintiff then filed its petition in this court on November 4, 1971. Although this court is not bound by the Board’s interpretation of the contract provisions, since such is a matter of law, (International Telephone and Telegraph v. United States, 453 F.2d 1283, 1288, 197 Ct.Cl. 11, 20 (1972); HRH Constr. Corp. v. United States, 428 F.2d 1267, 1271, 192 Ct.Cl. 912, 918 (1970); Paschen Contractors, Inc. v. United States, 418 F.2d 1360, 1361, 190 Ct.Cl. 177, 180 (1969)) we find that the Board’s conclusion in favor of the defendant in this case is correct. To adopt plaintiff’s interpretation of the first sentence of paragraph 2-15 would render the rest of that paragraph and other paragraphs of the specifications totally meaningless. This would be violative of a well established principle that the provisions of a contract must be read as a whole. Northwestern Industrial Piping, Inc. v. United States, 467 F.2d 1308, 1312, 199 Ct.Cl. 540, 547 (1972); Embassy Moving & Storage Co. v. United States, 424 F.2d 602, 606, 191 Ct.Cl. 537, 543 (1970). The second sentence of paragraph 2-15, “[c]oncrete shall be placed continuously so that the unit will be monolithic in construction", leaves no doubt that the “unit of operation” in the first sentence must refer to concrete and not to construction joints. It is not conceivable that a construction joint can be “monolithic in construction”. Similarly, the third sentence, “[a]t least 48 hours shall elapse between the casting of adjoining units”, would be absurd. Contractors do not “cast” construction joints. Plaintiff’s strained interpretation of “unit of operation” would also be inconsistent with the.use of the same phrase in subparagraph b of paragraph 2-23 of the specifications which reads in pertinent part: b. Concrete shall have a slump of no more than 2 inches. Concrete shall be compacted, screeded to grade, and prepared for the specified finish. Concrete shall be placed so that each unit of operation will be monolithic in construction and terminate at an expansion or construction joint. [emphasis added] The law does not intend that ordinary language' should be interpreted to absurdity. Restatement of Contracts § 235 (1932). Reading the contract as a whole, we find that the specifications were clear and unambiguous in requiring that the concrete pours should be monolithic in construction and not exceed 60 feet in any horizontal direction. Plaintiff finally argued that the 60 foot limitation upon concrete pouring was 'not in accord with trade practice and therefore it was reasonable to interpret the 60 foot restriction as applying to something else. Recently, in Northwestern Industrial Piping, Inc. v. United States, supra, Judge Skelton of this court refuted this argument by stating: . since we have decided that the contract specifications were clear and unambiguous, and since trade practice cannot override unambiguous contract provisions (S. S. Silberblatt, Inc. v. United States, 433 F.2d 1314, 1323, 193 Ct.Cl. 269, 288 (1970)), we do not have to consider the question of what was required by trade practice in the industry. Id., 467 F.2d at 1314, 199 Ct.Cl. at 550-551. In light of the foregoing, we find that the contract as a whole was clear and unambiguous and that the Board’s decision withstands a Wunderlich Act review. Accordingly, the plaintiff’s motion for summary judgment is denied; the defendant’s cross motion for summary judgment is granted; and the petition is hereby dismissed. . Merando, Inc., 69-2 BCA ¶ 7946. . A construction joint is the junction of two separate pours of concrete.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

RAWLEIGH, MOSES & CO., INC. v. The UNITED STATES. No. 375-70. United States Court of Claims. Decided March 16, 1973. Edwin J. McDermott, Philadelphia, Pa., of record, for plaintiff. Raymond B. Benzinger, Washington, D. C., with whom was Asst. Atty. Gen., Harlington Wood, Jr., for defendant. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, JJ.- OPINION PER CURIAM: This case was referred to Trial Commissioner Louis Spector with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 134(h). The commissioner has done so in an opinion and report filed on November 10, 1972. Plaintiff filed no notice of intention to except. On December 22, 1972, defendant duly filed a notice of intention to except. However, on February 7, 1973, defendant filed a request to withdraw its notice of intention to except which has been granted by the court. On February 12, 1973, plaintiff filed a motion under Rule 141(b) moving that the court adopt the commissioner’s opinion, findings of fact and recommended conclusion of law as the basis for its judgment in the case. Since the court agrees with the commissioner’s opinion, findings of fact and recommended conclusion of law, as hereinafter set forth, it hereby grants plaintiff’s motion and adopts the same as the basis for its judgment in this case without oral argument. Therefore, plaintiff is entitled to recover in accordance therewith and judgment is entered for plaintiff in the total sum of $55,300.40. OPINION OF COMMISSIONER SPECTOR, Commissioner: Plaintiff, a manufacturer of garments, was low bidder in response to an invitation for bids (IFB) published by defendant acting through the Defense Personnel Support Center (DPSC), a unit of the Defense Supply Agency (DSA). Its offer was to supply 57,570 high temperature resistant flying shirts at a unit price of $15.84 (f.o.b. destination) and 56,070 pairs of high temperature resistent flying trousers at a unit price of $25.70 (f.o.b. origin) or $25.84 (f.o.b. destination). The IFB contained the following information. NOTICE TO ALL OFFERORS The following press release was issued 4 December 1968: “Brigadier General W. M. Mantz, Commander, Defense Personnel Support Center, announced today that effective 18 December 1968, DPSC was instructing its buyers to include a discount limitation clause in those solicitations where excessive discounts are being encountered and are anticipated. The clause has been in use by other DSA Centers since 1966. “(For text of clause, see page 56 herein.)” This case hinges on the proper interpretation of the mentioned “discount limitation clause,” which appeared on page 56, as follows: 170.7 DISCOUNT LIMITATION (DPSC 1969 MAY) It is understood and agreed that, for the purpose of payments under this contract, an offer of prompt payment discount in excess of two percent shall be considered as a trade or special discount which shall be available to the Government as a reduction from the prices quoted, without regard to whether invoices are actually paid within the designated discount period. Offerors who desire to do so may quote customary terms of discount (not in excess of two percent), for prompt payment in addition to any trade or special discount available to the Government, provided such discounts are stated separately in their offers. Unless such trade or special discounts are separately stated, the offeror agrees that, when the discount offered exceeds two percent, the entire discount will be considered as a trade or special discount and will not be treated as a discount for prompt payment. [Emphasis supplied.] • In the blanks provided therefor, plaintiff had offered the following prompt payment discount: DISCOUNT FOR PROMPT PAYMENT: 2Vio% 10 calendar days; 2% — 30 calendar days; Net% 30 calendar days Defendant considered that portion of plaintiffs prompt payment discount offer reading “2Wo% 10 calendar days” to be a trade or special discount, to be taken immediately from the prices bid, thereby reducing them by 2.1 percent to $15.50736 for each shirt, and $25.16030 for each pair of trousers. It awarded the contract at those reduced prices. Also, the award was made f.o.b. destination, and defendant now acknowledges that it incorrectly computed the price for the trousers on the f. o. b. origin bid, thus understating the contract price by $7,733.12 Plaintiffs reaction to the award was a letter of protest to the contracting officer stating: We have received the Notice of Award dated October 30, 1969 stating the unit price for the Man’s Flying Shirt to be $15.50786, and for the Man’s Flying Trousers to be $25.-16080 [] Our unit price bid for the shirt was $15.84 and for the trousers was $25.84. This constitutes our protest. We will consult our attorney for the proper legal steps to take. In the meantime, and without prejudice, we will perform under the contract. The protest was denied, the contracting officer relying on a decision of the Comptroller General for his interpretation of the discount limitation clause. Plaintiff timely performed under the contract, delivering a total of 58,146 shirts and 56,628 pairs of trousers to DPSC’s facility at Ogden, Utah. Deliveries were made over a period of several months, and plaintiff received 22 partial payments during the course of performance. Upon each delivery, plaintiff submitted an invoice to the Atlanta Regional Office of the Defense Contract Administration Services, which invoices contained the prompt payment discount terms that appeared on plaintiff’s original bid, i. e., 2.1 percent 10 days; 2 percent 20 days; net percent 30 days. This phrase was required to be included by the authorized Government inspector, who would not sign the invoices unless they were presented in a form consistent with the contracting officer’s interpretation of the contract, namely, that the 2.1 percent discount taken at the time of award, was still available to be taken again at time of payment. In accordance with this interpretation, defendant took an additional prompt payment discount of 2.1 percent on 19 of a total of 22 invoices paid within 10 days, and a discount of 2 percent on one invoice paid within 20 days. In summary, plaintiff’s basic price was reduced by 2.1 percent, or $49,923.84 by way of a trade discount. Furthermore, defendant deducted an additional $47,567.28 from partial payments in the form of prompt payment discounts, as above-described. Shortly after completion of its contractual obligation, plaintiff filed a petition in this court seeking reformation of the contract to reflect an award computed according to its bid. In an amendment to its petition, plaintiff also alleged that defendant, having availed itself of the trade or special discount at time of award, breached the contract by also deducting prompt payment discounts from plaintiff’s invoices. Defendant’s answer avers, inter alia that: For the purpose of expediting proceedings herein, to the extent it may be concluded that plaintiff had an administrative remedy under the disputes procedure of the cited contract, any necessity that such procedure be exhausted as a prerequisite to a decision on the merits by this Court is hereby waived. The Government also pleads by way of an affirmative defense or set-off that: * * * [Wjere it to be ruled that the prior reduction (trade discount) of 2Vio% upon which the contract was awarded eliminated the 2Vio% for consideration as a prompt payment discount when defendant paid invoices within 10 days, than [sic] in any event defendant would be entitled to the remaining 2% prompt payment discount when it made payments on plaintiff’s invoices at the awarded price within 20 days. All invoices upon which 2Vio% prompt payment discounts were taken * * * were paid within 20 days. Accordingly, were the 2Vio% prompt payment discount held not available to defendant at the awarded price, plaintiff would be entitled to a refund of no more than Vw% of the invoices on which the 21Ao% was taken, which amounts to a total sum of $2,078.05. It appears that the above-quoted discount limitation clause developed out of the following circumstances. During the 1960’s, partly as a result of the Vietnam buildup, Defense Department agencies were relatively slow in paying vouchers. Contractors, aware of the fact that prompt payment discounts are taken into consideration in bid evaluation, frequently offered large prompt payment discounts (for example, 5.1 percent 10 days; 5 percent 20 days) with the realization that the 20-day discount would be taken into consideration in bid evaluation, but would rarely be earned by the Government because of slow payments. DSA had hoped to have the discount limitation clause it developed included in the Armed Services Procurement Regulations (ASPR), but its request was rejected. It was permitted to use the clause as a “deviation” from ASPR for a period of 1 year. The 1-year authorization was subsequently extended several times until May, 1971, when a new clause was adopted. The new clause contains the following additional language: NOTE: If an offeror submits discounts in excess of 2%, the highest of such discounts offered will be treated as a trade discount regardless of any time period attached to such discount. If the same offer also contains a prompt payment discount not in excess of 2%, this will be construed as an intent to offer trade and prompt payment discounts cumulatively. In such case, the trade discount will be deducted from the contract price upon award and the prompt payment discount will be taken, if earned. (For example: k% — 10 calendar days, 3% — 20 calendar days, 2% — SO calendar days. The U% — 10 calendar days (being the largest of those in excess of 2%) will be taken as a trade discount and the bid price reduced U% in determining the contract price. The 2% — 30 days will be taken as a prompt payment discount, if earned.) The new language set forth above was added to the discount limitation clause at the suggestion of the Defense Supply Agency Headquarters to resolve a “dichotomy between the Comptroller General’s decisions and the ASBCA case.” Mr. Rose, plaintiff’s president, testified that he had interpreted the original discount limitation clause (the one appearing in his contract) to mean that “the Government ha[d] to make up their [sic] mind to either take the 21/io per cent as a trade discount, or take it as a prompt payment discount, but they [could not] take both.” The testimony of one of the defendant’s principal witnesses is not inconsistent with this interpretation of plaintiff. In contrast, the contracting officer testified that it was his interpretation that trade discounts “would be taken off the top.” He acknowledged, however, that the term “ ‘trade discount’ is foreign to our bidding in clothing and textiles.” It was first introduced, he explained, in the wording of the discount limitation clause. That the DSA did not always take a prompt payment discount “off the top” at time of award, is illustrated by the following example. On May 8, 1969, plaintiff and others were notified by the Defense Supply Agency that Mason & Hughes, Inc., was the successful offeror on a solicitation for 70,461 intermediate cold weather jackets at a unit price of $9.8675 and award was made at that same price. The information to bidders/offerors portion of the IFB on that solicitation contained the identical notice to all offerors concerning the inclusion of the discount limitation clause, and the identical discount limitation clause found in the invitation portion of plaintiff’s contract. Discount terms offered by the successful offeror (Mason & Hughes, Inc.) were 2.05 percent — 10 days; 2 percent — 20 days; 1.95 percent —30 days. It also should be observed that the discount limitation clause does not appear to have served the historical purpose intended (as above-outlined) in the case of this particular solicitation. The 2.1 percent 10-day prompt payment discount, twice taken under the contracting officer’s interpretation, was not a large discount of the type to be taken into consideration in bid evaluation, and then not earned because of slow payments. That is because this contract further provided that: * * * Notwithstanding the fact that a blank is provided for a ten (10) day discount, prompt payment discounts offered for payment within less than twenty (20) calendar days will not be considered in evaluating offers for award * * *. However, offered discounts of less than 20 days will be taken if payment is made within the discount period, even though not considered in the evaluation of offers. [Emphasis supplied.] On this latter point, plaintiff’s president testified that he considered the above-quoted bid evaluation clause along with the discount limitation clause when they first appeared in IFB’s issued by the DSA. He testified that he did not wish “to take any chances on how [the discount limitation clause] would be interpreted,” and therefore sometimes bid 2 percent, 10 days, 1.9 percent, 20 days. Other bids were submitted, however, as in this case, with prompt payment discounts of 2.1 percent, 10 days, 2 percent, 20 days. The witness felt that the Government might take the discount in excess of 2 percent as a trade discount, and then pay in 20, 30, or even 60 days. Mr. Rose also felt that the 0.1 percent was such a very small amount over 2 percent that it would not cause the discount limitation clause to be invoked. It is apparent that from the foregoing that if defendant’s representatives intended to convey the meaning ultimately expressed in the “NOTE” appended in 1971 to the discount limitation clause, that meaning was inadequately conveyed in the contract clause as it appeared in plaintiff’s contract. The first sentence of the latter clause suggests, upon a reasonable reading, that a prompt payment discount in excess of 2 percent will be taken at the time of payment “without regard to whether invoices are actually paid within the designated discount period.” It does not infer a discount taken “off the top.” The second sentence of that clause reasonably suggests that a prompt payment discount may also be taken, but only if separately stated. Plaintiff’s single stated “Discount for Prompt Payment” for 10 and 20 days does not convey an intent to offer such a “separately stated” discount. The last sentence reiterates the meaning conveyed by the first two sentences and, in addition, strongly infers that only one discount will be taken if, as in this case, it is taken “as a trade or special discount.” In summary, a reasonable reading of the clause strongly supports the interpretation placed upon it by the contractor, rather than that urged by the contracting officer. Even were that not so, plaintiff would be entitled to prevail in its interpretation because it is a reasonable one. As stated by the court in WPC Enterprises, Inc. v. United States: * * * It is precisely to this type of contract that this court has applied the rule that if some substantive provision of a government-drawn agreement is fairly susceptible of a certain construction and the contractor actually and reasonably so construes it, in the course of bidding or performance, that is the interpretation which will be adopted — unless the parties’ intention is otherwise affirmatively revealed. [Citing cases.] This rule is fair both to the drafters and to those who are required to accept or reject the contract as proffered, without haggling. * * * That plaintiff’s interpretation of the discount limitation clause is a reasonable one, is perhaps best illustrated by the fact that the ASBCA has also placed the same interpretation upon it. In both So-Sew Styles, Inc., ASBCA No. 15467, 71-1 BCA ¶[ 8844, and Chic de Paris Handbag Co., ASBCA No. 14622, 70-1 BCA ¶ 8160; it was concluded that a discount limitation clause in the form contained in this contract, does not change the normal practice of regarding discounts expressed as these were, as being in the alternative', and not cumulative. Furthermore, the contracting officer acknowledged that the term “trade discount” is “foreign to our bidding in clothing and textiles.” So unusual is the offer of a trade discount by contractors regularly supplying clothing and textiles to defendant, that in 1966 the ASBCA held a contracting officer to be on notice of a possible bidding error, when a contractor’s bid appeared to offer a trade discount, in addition to the offer of a prompt payment discount. All of the foregoing considered, it is concluded that the bid and resultant contract documents, construed as a whole, manifested an intent on the part of plaintiff to offer a prompt payment discount of 2.1 percent for payment within 10 calendar days; that the discount limitation clause probably contemplated the taking of that discount at time of payment “without regard to whether invoices [were] actually paid within the designated discount period”; that the taking of the discount immediately upon award as a reduction in contract price nevertheless amounted to the same thing, and was reasonably within the contemplation of the clause; but that defendant was not thereafter entitled to take the discount again at time of payment. The latter intent is adequately expressed in the “NOTE” added to the discount limitation clause in 1971, but it was not so expressed in this contract, nor in the other cases earlier cited in this opinion. Having immediately availed itself of the 2.1 percent prompt payment discount (considered as a trade or special discount), defendant improperly deducted further discounts from the invoices submitted by plaintiff during the course of the contract. Plaintiff is therefore entitled to judgment in the amount of $55,300.40, that being the sum of $47,567.28 in prompt payment discounts erroneously deducted; and $7,733.12 resulting from the contracting officer’s admitted error in computing the' award for the trousers on an f.o.b. origin basis, rather than on an f. o.b. destination basis as the contract prescribed. The petition was filed by the E.C.T. Corporation as plaintiff. On February 2, 1973, an order was entered allowing plaintiff’s motion to substitute Rawleigh, Moses & Co., Inc., as plaintiff in the case. . See findings 5 and 6 -infra. . See finding 21 infra. . In the Notice of Award, the unit price for the shirts was $15.50736, and for the trousers $25.16030. . B-167984, December 3, 1969. . The final two invoices were not eligible for prompt payment discount, and were paid net. . These last quoted words are from the testimony of Grover Dean Fogle, Chief, Policy Branch, Procurement Division, DSA. The “ASBCA case” referred to is So-Sew Styles, Inc., ASBCA No. 15467, 71-1 BCA ¶ 8844, which bears a date approximately 1 month prior to the addition of the above-quoted “NOTE” to the discount limitation clause. . The Mr. Fogle mentioned in the preceding footnote. . See finding 24 infra. . See finding 22 infra. . Under the long established rule, contra proferentem, as enunciated, for example, in United States v. Seckinger, 397 U.S. 203, 216, 90 S.Ct. 880, 25 L.Ed.2d 224 (1970); J. W. Bateson Co. v. United States, 450 F.2d 896, 196 Ct.Cl. 531 (1971); Leavell-Morrison-Knudsen-Hardeman v. United States, 436 F.2d 451, 193 Ct.Cl. 949 (1971); Sherwin v. United States, 436 F.2d 992, 193 Ct.Cl. 962 (1971); Max Drill, Inc. v. United States, 427 F.2d 1233, 192 Ct.Cl. 608 (1970); Gorn Corp. v. United States, 424 F.2d 588, 592, 191 Ct.Cl. 560, 567 (1970); Paschen Contractors, Inc. v. United States, 418 F.2d 1360, 190 Ct.Cl. 177, (1969); Tecon Corp. v. United States, 411 F.2d 1262, 188 Ct.Cl. 15 (1969); D & L Constr. Co. v. United States, 402 F.2d 990, 185 Ct.Cl. 736 (1968); Sundstrand Turbo v. United States, 389 F.2d 406, 182 Ct.Cl. 31 (1968); Southern Constr. Co. v. United States, 364 F.2d 439, 453, 176 Ct.Cl. 1339, 1362 (1966); WPC Enterprises, Inc. v. United States, 323 F.2d 874, 876-877, 163 Ct.Cl. 1, 6 (1963), and Peter Kiewit Sons’ Co. v. United States, 109 Ct.Cl. 890 (1947). . Note 10 supra. . Although not in this particular case. (See finding 17 infra, and note 6 supra.) . As observed in So-Sew Styles, Inc., 71-1 BCA ¶ 8844 at 41,119: “ * * * When treated as prompt payment discounts, the discounts inserted in the ‘Discount For Prompt Payment’ block have always been interpreted as alternative rather than cumulative. “ # * * Whereas the IFB required that the 2.05% discount be treated as a trade discount and therefore deductible regardless of when payment is made such discount did not lose its identity as an offer of a prompt payment discount. It remained in the ‘Discount For Prompt Payment’ block. Under the circumstances, appellant’s offers of discounts in the customary form for offering alternative prompt payment discounts cannot be reasonably interpreted as manifesting an unexpressed intent to offer cumulative discounts.” . Southern Athletic Co., ASBCA No. 10674, 66-1 BCA ¶ 5655 (aff’d on reconsideration, 66-2 BCA ¶ 5777). . See finding 22 infra. . Clarification of the clause was also apparently prompted in part by letter from the General Accounting Office to the DSA, advising: “While our decisions support the DPSC interpretation [permitting a deduction of both a prompt payment discount for one period in excess of 2 percent, after conversion to a trade discount, and a prompt payment discount of 2 percent or less for another period], in view of the number of apparent misinterpretations by bidders we recommend that the clause (as well as any similar clause which may now be in use by any other Defense Supply Agency procuring activity) be reworded so as to more clearly state the Government’s intention, in order to minimize further questions by bidders as to the effect of the clause. * * * ” [Unpublished Opinion, B-171731, April 6, 1971.]

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED AMERICAN INSURANCE COMPANY v. The UNITED STATES. No. 510-69. United States Court of Claims. Decided March 16, 1973. As Amended on Rehearing June 1, 1973. Vester T. Hughes, Jr., Dallas, Tex., of record, for plaintiff; Larry L. Bean, and W. John Glancy, Dallas, Tex., of counsel. Theodore D. Peyser, Jr., Washington, D. C., with whom was Asst. Atty. Gen., Scott P. Crampton, for defendant; Michael H. Singer, Washington, D. C., of counsel. Edward J. Schmuck, Bethesda, Md., for Lincoln National Life Ins. Co., amicus curiae; Willis B. Snell, James V. Heffernan, Francis M. Gregory, Jr., Washington, D. C., and Thomas G. Thornbury, Fort Wayne, Ind., of counsel. Before CO WEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. OPINION KASHIWA, Judge, delivered the opinion of the court: This is a suit for the recovery of $209,827.83 which represents additional income taxes and interest paid for the 1961 through 1966 period pursuant to deficiencies that were assessed against the plaintiff by the Internal Revenue Service. We hold that the plaintiff is entitled to recover. The plaintiff is a life insurance company organized under the laws of the State of Texas, with its principal place of business located in Dallas, Texas. The plaintiff is qualified and licensed to do business in 49 states in Puerto Rico, in the District of Columbia, and in Canada. This case involves nonparticipating insurance in the form of guaranteed renewal policies issued by the plaintiff. Such a policy is a health and accident insurance contract, or a health and accident insurance contract combined with a life insurance or annuity contract, which the plaintiff enters into with a policyholder and which cannot be canceled by the plaintiff during the life of the insured for any reason except the nonpayment of premiums but under which the plaintiff reserves the right under certain circumstances to adjust premium rates by class. A class of insureds may be defined as insureds having the same policy form, being of the same age, sex, and occupational risk classification, and sometimes also being located in a particular territorial region. In other words, so long as an insured pays the premiums when they become due under a guaranteed renewable insurance policy, the plaintiff is obligated to continue the policy in force during the life of the insured. The level premium stated in the policy will also continue subject to the proviso that it can be raised if the premium for the whole class can be raised. The statute involved is the Life Insurance Company Income Tax Act of 1959, 73 Stat. 112, Internal Revenue Code of 1954, §§ 801-820, as amended. Among other deductions which a life insurance company is allowed to take in determining its gain or loss for income tax purposes is that provided for by section 809(d)(5): An amount equal to 10 percent of the increase for the taxable year in the reserves for nonparticipating contracts or (if greater) an amount equal to S percent of the premiums for the taxable year * * * attributable to nonparticipating contracts /' * * * which are issued or renewed for periods of 5 years or more. * * * [Emphasis supplied.] In preparing its income tax returns for the several years during the 1961-66 period, the plaintiff claimed deductions based on 3 percent of the premiums attributable to its nonparticipating insurance contracts, including its guaranteed renewable health and accident contracts. However, upon auditing the plaintiff’s returns, the Internal Revenue Service determined that the plaintiff was entitled to a deduction with respect to its guaranteed renewable policies only on the basis of 10 percent of the increase in reserves and could not properly utilize 3 percent of premiums for this purpose. The IRS thereupon assessed against the plaintiff the deficiencies and interest which provided the basis for the present litigation. The Government has admitted that if the policies are noncancellable (i. e., the premiums cannot be changed, even by class) and have five years or more to run to age 60, or a higher specified age, they are entitled to the 3 percent of premiums deduction. Rev.Rul. 65-237, 1965-2 Cum.Bull. 231. In view of the Government’s foregoing admission regarding noncancellable policies and since section 801(e) provides as follows: Sec. 801. Definition of life insurance company. (e) Guaranteed renewable contracts. For purposes of this part, guaranteed renewable life, health, and accident insurance shall be treated in the same manner as noncancellable life, health, and accident insurance. it would seem that there should not be any serious question that guaranteed renewable insurance policies should also be entitled to the 3 percent of premiums deduction. In spite of the compelling language of section 801(e), the Government maintains that since the guaranteed renewable policies were not issued “for periods of 5 years or more,” as the Government interprets the phrase, they may not be treated in the same manner as noncancellable policies for purposes of the 3 percent of premiums deduction. We must resolve this question by an analysis of the precise language of section 809(d)(5) and the regulations thereunder, a review of the types of policies involved, an investigation of the legislative history in granting the alternative 3 percent of premiums deduction, and, finally, an examination of the effect of section 801(e) which we have set out above. The Government’s position is that if an insurer can change the premium rates during a five-year period, even if those rates can only be changed by class, then such a contract cannot be considered as issued or renewed for five years or more. The Government seizes upon certain language of the Senate Finance Committee Report, S.Rep.No.291, 86th Cong., 1st Sess., p. 55, U.S.Code & Admin.News p. 1575. (1959-2 Cum.Bull., p. 810), which was adopted by the following Treasury Regulation, as authority for its position: * * * The determination of whether a contract meets the 5-year requirement shall be made as of the date the contract is issued, or as of the date it is renewed, whichever is applicable. Thus, a 20-year nonparticipating endowment policy shall qualify for the deduction under section 809(d)(5), even though the insured subsequently dies at the end of the second year, since the policy is issued for a period of 5 years or more. However, a 1-year renewable term contract shall not qualify, since as of the date it is issued (or of any renewal date) it is not issued (or renewed) for a period of 5 years or more. In like manner, a policy originally issued for a 3-year period and subsequently renewed for an additional 3-year period shall not qualify. However, if this policy is renewed for a period of 5 years or more, the policy shall qualify for the deduction under section 809(d)(5) from the date it is renewed. Treas.Reg. § 1.809-5(a).(5) (iv) (1969) [Emphasis supplied]. The Government urges that the taxpayer’s guaranteed renewable accident and health policies are too closely akin to one-year renewable term contracts, which are specifically precluded by the Regulation from the section 809(d)(5) alternative 3 percent deduction, to qualify for such a deduction. The Government has published this position in Rev. Rul. 65-237, 1965-2 Cum.Bull. 231. For all practical purposes, the Government’s position rests on the argument that the statement in the Senate Report that “1-year renewable term” contracts do not qualify for the 3 percent deduction has the effect of disqualifying for the deduction all contracts, such as guaranteed renewable contracts, which do not guarantee a premium rate for the full duration of the policy. It is our view that the Government misinterprets the Senate Committee Report. There is not a single word in that Report to explain what policies, or types of policies, were intended to be covered by the words “1-year renewable term” contract. There is no suggestion whatever that the term was meant to encompass all policies on which the premium rate is not guaranteed. In the trial of this case, an expert witness testified on the issue of what was meant by the words “1-year renewable term.” We think that his uncontradicted testimony is very material. John H. Miller, an actuary with 32 years of experience in the insurance field, having done much work in the health and accident area, and a member of the Society of Actuaries, the Casualty Actuarial Society, and the American Academy of Actuaries, was the only expert witness called. The plaintiff put him on, his qualifications were not challenged, and defendant did not produce any witness to rebut his testimony. Mr. Miller testified that on the basis of his knowledge of the industry the phrase “1-year renewable term” contract is used only with reference to life insurance, but for the purpose of the issue herein, the rules are the same. Mr. Miller then explained two varieties of one-year renewable term life insurance contracts of which he was aware. In one form (form A for discussion herein) the company guarantees that it will continue the coverage in force upon timely payment of premiums, and the precise amount of premiums for each age is specified in the policy; in the other form (form B for discussion herein) the company guarantees that it will continue the coverage in force upon timely payment of premiums, and the amount of premiums will be determined by reference to the company’s then current rate for the insured’s age and class at each policy anniversary date. Taking Mr. Miller’s definitions and applying the Government’s argument that contracts which guarantee a premium rate for the full duration of the policy qualify for the 3 percent deduction, we are faced with the result of form A, one-year renewables qualifying. Such a contract is issued for five years or more as renewability is at the option of the insured. It even meets the test defendant is seeking to impose here in that it has stated, guaranteed rates. It is proper, then, to ask what was intended by the insertion of the “issued or renewed for * * * 5 years or more” requirement in section 809(d)(5) and what-was intended to be covered by the phrase “1-year renewable term,” as used in the Senate Report. As we have noted above, there is no explanation in the Senate Report as to'the meaning of the latter phrase. There are such a variety of “1-year renewable term” policies, certain of which resemble non-cancellable policies, that the only reasonable definition is one which looks to duration of risk. This court takes the view that the primary reason for inserting the “issued or renewed for * * * 5 years or more” requirement in section 809(d)(5) was to prohibit from qualification those contracts under which the insurer has the right to terminate or cancel the insurance risk within the five-year period. Cancellable accident and health insurance policies are issued for a relatively short term, usually no more than one year. Typically, such contracts are renewable by the insured unless the company gives the insured advance notice in writing that it will not renew the policy at the contract anniversary date. Thus, a cancellable accident and health insurance policy issued for a period of one year may be described accurately as a “1-year renewable term” policy which, as to each insured, is subject to cancellation by the company. The insurer is not free to cancel or refuse to renew a guaranteed renewable contract of the type we have before us. We deem it of crucial significance that the Government, in its own Revenue Ruling, has indicated that a proscribed aspect of the one-year renewable term policies is the ability of the insurer to cancel: A “1-year renewable term contract” is ordinarily a contract which does not guarantee the rate of premium to be charged each year [this language of the Government does not disqualify form A “1-year renewable term” contracts, only the form B type], or a contract which requires some sort of annual application by the insured for renewal (which is subject to rejection by the insurer), so that, in effect, a new contract is entered into upon each renewal. The noncancellable health and accident contracts issued by X [the insurer] continue to force automatically to age 60 or over so long as the renewal premium set forth in the policy is paid when due. At age 60 (or later age stipulated for termination) these policies revert to yearly renewable term contracts where consent of X is necessary to keep the policy in force. Rev.Rul. 65-237, 1965-2 Cum.Bull., p. 232. [Emphasis supplied.] It is clear that the reference in the Senate Report to a “1-year renewable term contract” as one which does not qualify for the 3 percent' deduction was not intended to preclude the allowance of the 3 percent deduction for guaranteed renewable contracts. Under the provisions of the latter policies, one term of which is a stated level premium, the insured may unilaterally renew each year and thereby, on his own volition, keep the insurance in force for a period of five years or more. In addition, there are substantial restrictions on the raising of rates. The Government next argues, as a theoretical foundation for its position that the legislative history of the Life Insurance Company Income Tax Act of 1959 reveals that the reason for the 3 percent deduction was to provide a “cushion” for inflated costs or increased morbidity. Thus, since the rates of the policies in issue can conceivably be raised by class, the reason for granting the normally more favorable 3 percent deduction disappears. We cannot agree with either the Government’s reading of the legislative history or, for that matter, its reading of its own regulations. The legislative history makes clear that Congress enacted section 809(d)(5) to eliminate what otherwise would be an inequality of tax treatment between stock and mutual insurance companies. In the case of mutual insurance companies, premiums are higher and include an amount normally returned to policyholders as dividends. Amounts of premiums normally returned to policyholders give a mutual insurance company an additional “cushion” with which to meet unexpectedly heavy claims or other contingencies. Stock insurance companies do not have this cushion available and hence must maintain relatively larger surplus and capital accounts. Therefore, to enable stock insurance companies to build up and maintain adequate surplus, a special deduction is allowed with respect to nonparticipating policies. The Senate Finance Committee Report gave the following explanation of this deduction: Policyholder dividends in part reflect the fact that mutual insurance is usually - written on a higher initial premium basis than nonpartieipating insurance, and thus the premiums returned as policyholder dividends, in part, can be viewed as a return of redundant premium charges. However, such amounts provide a “cushion” for mutual insurance companies which can be used to meet various contingencies. To have funds equivalent to a mutual company’s redundant premiums, stock companies must maintain relatively larger surplus and capital accounts, and in their case the surplus generally must be provided out of taxable income. To compensate for this, the House bill allows a deduction for nonparticipating insurance equal to 10 percent of the increase in life insurance reserves attributable to nonparticipating life insurance (not including annuities). Your committee has recognized the validity of the reasons for providing such a deduction and has therefore continued it in your committee’s version of the bill. However, basing this addition, as does the House bill, only upon additions to life insurance reserves does not take account of the mortality risk factor present in policies involving only small reserves. To overcome this deficiency, your committee’s amendments provide that a special 3 percent deduction based on premiums is to apply, instead of the 10 percent deduction, where it results in a larger deduction. This is a deduction equal to 3 percent of the premiums for the current year attributable to nonparticipating policies (other than group or annuity contracts) issued or renewed for a period of 5 years or more. Senate Comm, on Finance, Life Insurance Company Income Tax Act of 1959, S.Rep.No.291, 86th Cong., 1st Sess. 22 U.S.Code Cong. & Admin.News, p. 159 (1959) (reprinted at 1959-2 Cum.Bull. 770, 786). The Senate Finance Committee Report went on to describe the five-year requirement, and this description was adopted by Treas.Reg. § 1.809-5(a) (5) (iv), supra. While it is true that the legislative purpose involved allowing a “cushion” when the insurer undertook a long-term risk, there is nothing in the above-quoted legislative history to indicate that the scope of the phrase “1-year renewable term” was thought to encompass guaranteed renewable policies merely because there was not a fixed premium also guaranteed by the latter policy. The Report merely states that “1-year renewable term” policies cannot qualify since they are not issued for a period of five years or more. It is significant that the report looks to duration of risk and not to the insurer’s limited ability to alter one aspect of the policy. The guaranteed renewable policies in issue clearly involve long-term risks. They are issued for life and the insurer is required to keep the policy in force, save for the failure to pay premiums. Both noneancellable insurance (under which the premium cannot be changed and which the Government concedes is-subject to the 3 percent deduction) and guaranteed renewable insurance do require the creation of reserves from premiums to cover the higher risks of later years. Guaranteed renewable policies prescribe a level premium and there are substantial limitations on the ability of the insurer to increase these rates. Any change in the premiums of the guaranteed renewable policies is prospective and cannot be accomplisehd without some difficulty. In at least 27 states, guaranteed renewable policies must be renewed without a rate increase unless a proposed increase is approved by the state insurance authorities. This process, which we find to be difficult in some states and time consuming in most of the others, was required with respect to 80 percent of the guaranteed renewable policies which plaintiff had in force. In other states, business, economic, and other pressures, especially competition, may substantially restrain any rate change. Indeed, the Government has recognized, albeit in another context, that there is a virtual identity between the noneancellable and the guaranteed renewable policies: Generally, the reserve in addition to the unearned premiums is necessary in the area of noneancellable health and accident policies because the policy is renewable at the sole option of the insured. If, in such a situation, the premium called for by the policy is at a level rate, it would have to be greater in the early years of the policy than the pure cost of insurance so that the excess may be accumulated, with interest, to offset the increase in mortality risks as the insureds get older. United Benefit Life Insurance Co. v. McCrory, [D.C.] 242 F.Supp. 845, at 849 (1965). Because hospital and medical expense benefit policies, renewable solely at the option of the insureds, involve not only increasing mortality risks as the insureds get older but also the uncertainty of the costs of medical care, the premiums for such policies do not necessarily remain level but may be increased at renewal. However, such increase in premium cannot be made with respect to an individual insured but only with respect to the class of which he is a part. This affords a certain stability to the premium that, together with the security of the coverage, necessitates a reserve in addition to the unearned premiums similar to that required under the noneancellable level premium contracts. For this reason guaranteed renewable health and accident policies, not cancellable by the insurance company and with respect to which a reserve in addition to the unearned premiums must be carried, is treated in the same manner as a noncancellable health and accident policy. See section 1.801-3 (d) of the regulations. Rev.Rul. 71-367, 1971-2 Cum. Bull., p. 259. [Emphasis supplied.] The case of Commissioner v. Pacific Mutual Life Ins. Co., 413 F.2d 55 (9th Cir. 1969), rev’g 48 T.C. 118 (1967), three judges dissenting, was decided favorably to the Government on this very issue. The Tax Court had held for the plaintiff, stressing, as we do, both the guaranteed renewability of the contracts as well as the very qualified nature of the right to change rates, and then only by class. The Tax Court made the following observation: While we do not question the fact that petitioner retained the right to alter renewal premiums on the contracts in question, we note, as set forth in our findings, supra, that those contracts imposed substantial limitations on such premium changes. In addition and of greater significance in distinguishing petitioner’s guaranteed renewable contracts from the 1-year renewable term contracts referred to in the above-quoted Senate committee report, is the fact that, under the former contracts, petitioner guaranteed the renewal of the policies and all their provisions for a period of 5 years or more. Thus, the only way the term of petitioner’s guaranteed renewable contracts could have been shortened to less than 5 years was for an insured to either voluntarily cancel his policy or fail to make timely premium payments thereon. Since these possibilities are within the exclusive control of the insured and exist not only with regard to petitioner’s guaranteed renewable contracts but with virtually all insurance contracts “issued or renewed for a period of 5 years or more,” we think the insurance contracts in question satisfy the statutory definition of section 809(d)(5) in that they are, in essence, “issued * * * for periods of 5 years or more.” * * * 48 T.C. 118, 143-144. [Emphasis supplied.] The plaintiff’s position is further supported by a structural analysis of the Life Insurance Act of 1959 as a whole. Specifically the language of section 801(e) is clear authority for the plaintiff’s view that guaranteed renewable policies are, along with noncaneellable policies, entitled to the 3 percent of premiums alternative deduction. Section 801(e) reads as follows: Guaranteed Renewable Contracts.— For purposes of this part, guaranteed renewable life, health, and accident insurance shall be treated in the same manner as noncaneellable life, health, and accident insurance. It must initially be noted that section 801(e) is made applicable to all the provisions of Part I of Subchapter L of the Code. Part I consists of sections 801 through 820 and is entitled “Life Insurance companies.” Part I, by definition, includes section 809(d)(5). Statutory drafters very frequently are called upon to expand or contract definitional sections; and the calibration, in the context of these sections relating to life insurance companies, is very keen. We cull the following examples to illustrate this calibration: 1. The definition of a life insurance company in section 801(a) is to apply “[f]or purposes of this subtitle,” i. e., Code sections 1 through 1564. 2. Numerous sections and subsections in Part I of Subchapter L are introduced with the phrase “for purposes of this part.” See, for example, the definition of “investment yield” under section 804(c). See also section 804(b) defining “gross investment income,” and section 806(a) relating to certain changes in life insurance reserves. 3. Section 806(b) is applicable solely “for purposes of this subpart * * Section 810(d)(1) is also applicable solely “for purposes of this subpart * * 4. The term “distribution” is defined in section 815(f) solely “[f]or purposes of this section * * 5. Section 801(e) defines the term “total reserves” “[f]or purposes of subsection (a) * * 6. Section 804(a)(1) refers to a rule solely “[f]or purposes of the preceding sentence * * The legislative drafters of Subpart L also used the technique of specifying exceptions to the broad sweep of expansive language. This is demonstrated by section 818(c) which, in general, allows a life insurance company to elect to recompute its reserves for certain purposes. Section 818(c) specifically provides that it is to apply “[f]or purposes of this part (other than section 801) * * Congress obviously drafted this provision in this way because Congress intended that a company’s life insurance reserves would be taken into account for purposes of section 801 without regard to a section 818(c) election. In the context of the income taxation of underwriting profits of life insurance companies, it should be kept in mind that we are dealing with relatively recent legislation, the Life Insurance Company Income Tax Act of 1959, P.L. 86-69, 73 Stat. 112, Section 2. We are not dealing with those areas of the Code in which legislation by one Congress is layered upon legislation of another Congress. Rather, our attention is directed to two sections, 801(e) and 809(d)(5), which came into the Code at precisely the same time. If, as the Government contends, it was really the purpose of Congress to deny the favorable treatment to guaranteed renewable policies which was granted to noneaneellable policies issued for five years or more, it would have been most logical for Congress to exclude section 809(d)(5) from the scope of section 801(e). This could easily have been accomplished by inserting the words “except for section 809(d)(5)” immediately after the word “part” in section 801(e). To leave the broad scope of section 801(e) while at the same time evolving the pattern of specificity which we have outlined, supra, leads us to the inescapable conclusion that Congress intended precisely what it said: guaranteed renewable policies should be treated in the same manner as noneaneellable policies for the purposes of sections 801 through 820. The Government, however, argues that sections 801(e) and 809(d)(5) are not harmonious and urges that we adopt the following solution: * * * Congress impliedly adopted as part of Sec. 801(e) the requirement contained in the alternative deduction provision of Sec. 809(d)(5) that the contracts mentioned in Sec. 801(e) be issued or renewed for periods of five years or more. * *. * Commissioner v. Pacific Mutual Ins. Co., 413 F.2d 55, 60 (9th Cir. 1969), rev’g 48 T.C. 118 (1967). We disagree with the Government on this point. There is no real indication that section 801(e) was merely meant to insure that reserves for guaranteed renewable policies would be treated in the same manner as reserves for noncancellable policies, i. e., as life insurance reserves. While one effect of section 801(e) certainly requires that reserves for guaranteed renewable policies be treated as life insurance reserves, we find nothing at all to indicate that this was the only effect of section 801(e). In fact, the broad brush wording of section 801(e) requires a conclusion precisely the opposite of the Government’s. We note that the Treasury’s own regulations confirm that reserves were not at all the exclusive area in which guaranteed renewable and noncancellable policies were to be treated in the same manner. Treas.Reg. § 1.801-3(d) provides, in part, that: (d) Guaranteed renewable life, health, and accident insurance policy. The term “guaranteed renewable life, health, and accident insurance policy” means a health and accident contract, or a health and accident contract combined with a life insurance or annunity contract, which is not cancellable by the company but under which the company reserves the right to adjust premium rates by classes in accordance with its experience under the type of policy involved, and with respect to which a reserve in addition to the unearned premiums (as defined in paragraph (e) of this section) must be carried to cover that obligation. Section 801(e) provides that such policies shall be treated in the same manner as noncancellable life, health, and accident insurance policies. For example, the age termination date requirements applicable to noncancellable health and accident insurance policies shall also apply to guaranteed renewable life, health, and accident insurance policies. * * * No inconsistency between section 801(e) and section 809(d)(5) will arise unless the Government’s inferences with respect to what Congress meant by “issued * * * for 5 years or more” are adopted. Since we have chosen to view Congressional intent with respect to this phrase in terms of duration of risk, there is no necessity to adopt the Government’s strained reading of section 801(e). The alternative 3 percent of premiums deduction was granted because the 10 percent of reserve increase deduction was not deemed to provide a sufficient “cushion.” To receive this potential benefit, Congress required that only life, health, and accident policies involving a relatively long-term undertaking could qualify. It is clear, for instance, that if the plaintiff were to offer either noncancellable or guaranteed renewable policies issued for periods of less than five years, neither would qualify for the 3 percent deduction. We do not decide whether Congress has made a wise decision; nor do we decide whether Congress has been too munificent in qualifying guaranteed renewable policies issued for five years or more for the 3 percent of premiums deduction. That is not our function. We are concerned here only with what Congress’ intent was, not what it, perhaps, should have been. By this standard, we hold that the plaintiff is entitled to recover and judgment is entered accordingly with the amount thereof to be determined pursuant to Rule 131(c). DAVIS, Judge (dissenting). In this very close case, I would follow the Ninth Circuit (Commissioner v. Pacific Mutual Life Ins Co., 413 F.2d 55 (C.A.9, 1969)), the dissenting judges in the Tax Court (Pacific Mutual Life Ins. Co., 48 T.C. 118, 144-145 (1967)), Trial Commissioner White, and the Internal Revenue Service’s ruling. In my view there “are ambiguities in the legislative language that must be resolved”, and accordingly we should consider “arguments of policy” revealed in the search for the dominant Congressional purpose. See Unexcelled Chemical Corp. v. United States, 345 U.S. 59, 64, 73 S.Ct. 580, 97 L.Ed. 821 (1953). Neither section 809(d)(5) nor section 801(e) is absolutely clear by itself, and in combination they present substantial textual difficulties. We must look to the legislative history to construe and harmonize the provisions. I read that source, not as concentrating on the five-year period, but as attempting to help only those companies which cannot change their rates to build up additional surplus to protect against unexpected bad experience. As the dissenters in the Tax Court put it (48 T.C. at 144-145): “Although the legislative history fails to explain the reason for the requirement that the policy be issued for 5 years, it seems clear that the accumulation of increased surplus was necessary only when the insurance company was committed for a 5-year or longer period. If the company is free to adjust its rates at any time when its experience proves to be more unfavorable than expected, there is no need for allowing the tax-free build-up of increased surplus. In the case of noncancellable accident and health policies, the company cannot adjust its rates notwithstanding unfavorable experience. However, in the case of the guaranteed renewable policies involved herein, petitioner could alter its rate schedule. It could not increase the rates of an individual policyholder merely because he became an increased risk, but it could increase the rates for the class of policies if it became apparent that the risks for the whole class were greater than expected. * * * [S]ince the company is free to adjust its rate schedule, there is no reason to permit the tax-free accumulation of additional surplus to protect against unanticipated risks in connection with these guaranteed renewable policies * * On the same basis, Trial Commissioner White concluded that “there was a logical reason for Congress to give insurers the benefit of the Section 809(d)(5) alternative deduction based on 3 percent of the premiums received under noncancellable contracts, while withholding such benefit with respect to guaranteed renewable contracts” like those involved here. From this standpoint, section 801(e) does not have to be construed as mandating inclusion of taxpayer’s contracts under section 809(d)(5) even though they fail to meet the dominant purpose Congress had in mind. The language of section 801(e) is not so demanding. For one thing, we do not really know what Congress meant by “guaranteed renewable life, health, and accident insurance”, or whether plaintiff’s insurance agreements fall within the category Congress wanted to cover. And even if they are included, this would not be the first definitional section found to contain an implied exception to words which may appear all-embracing. On balance, I agree with the Ninth Circuit (413 F.2d at 60) and Commissioner White that, to avoid conflict between the specific purpose of section 809(d)(5) and the general words of section 801(e), the latter should not be understood as a wooden directive compelling treatment of these renewable policies “in the same manner” as noncancellable agreements in every instance, regardless of differentiating legislative policies. Another factor influencing me is that this seems the type of narrow and close tax issue which can properly be left to resolution by Congress (in the previous Congress, one house did pass an alleviating measure), and particularly in that light I see insufficient basis for disagreeing with the court of appeals which has already spoken. KUNZIG, Judge, concurs in the foregoing dissenting opinion. We have used material from the opinion of Trial Commissioner Mastín G. White, though we reach a contrary result. . The amount of the claim, the amount allowed, and the amount disallowed, by years, are as follows: . See United States v. Atlas Ins. Co., 381 U.S. 233, 85 S.Ct. 1379, 14 L.Ed.2d 358 (1965), for a discussion of the 1959 Act. . While the Government has not, in so many words, conceded that the form A “1-year renewable term” policy qualifies for the 3 percent of premiums deduction, the following language of its brief suggests that such a policy meets all the criteria under its test: “A nonparticipating, noncancellable policy, including that form of yearly renewable term policy which guarantees the premium rate at specified ages or ~intervals, creates a greater loss potential to the insurer than a nonparticipating, guaranteed renewable policy. * * * The reason for this is that the guaranteed renewable policy permits the insurer to increase its rates by class, whereas noncancellable policies provide for a guaranteed premium.” [Emphasis supplied.] . We note that at oral argument before this court, there was confusion on the part of both parties as to what a “1-year renewable term policy” was, in addition to the greater question of whether a guaranteed renewable policy is sufficiently “akin” to it to require similar treatment. This is undoubtedly due to the variety of policies, having a wide range of terms, which could be categorized under the general phrase “1-year renewable.” . We say “primary” because policies are written in a great variety of forms; and we do not intend that the successful passing of this test will automatically guarantee qualification for the 3 percent of premiums deduction. Guaranteed renewables, as will be shown infra, have other characteristics which confirm our conclusion that they were meant to be treated as “noncancellable” policies, and thereby to qualify. . “Noncancellable Disability Insurance, as Related to the Federal Taxation of Life Insurance Companies,” a memorandum prepared by the Massachusetts Indemnity Insurance Co., Hearings Before a Sub- committee of the House Ways and Means Committee, “Taxation of Life Insurance Companies,” 83rd Cong., 2d Sess., 403-404 (1954). Thus, for example, a typical cancellable accident and health insurance policy issued by the Lincoln National Life Insurance Company between 1951 and 1962 provides as follows : “PRIVILEGE OF RENEWAL “Unless the Company shall have delivered to the Insured or shall have mailed to his last address as shown by the records of the Company written notice of its decision not to renew the policy at least fifteen days prior to the expiration of the then current period for which the premium has been paid, this policy may be renewed for a further term equal to the Amount of Premium. This privilege of renewal shall cease upon payment of the premium for the Premium Period which will expire next preceding the insured’s 65th birthday.” . It should be noted that during all the years in issue, plaintiff did not increase the premiums on its guaranteed renewable policies. . It is a cardinal rule of statutory construction that “ * * * [t]o the extent possible, violence should not ordinarily be done to the words chosen by the Congress. * * * ” Crawford v. United States, 376 F.2d 266, 272, 179 Ct.Cl. 128, 138 (1967), cert. denied, 389 U.S. 1041, 88 S.Ct. 781, 19 L.Ed.2d 831 (1968). See also Flora v. United States, 357 U.S. 63, 65, 78 S.Ct. 1079, 2 L.Ed.2d 1165 (1958), aff’d on rehearing, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960). . The House Report language, upon which the Government bases its view, reads, in pertinent part: “5. Guaranteed renewable contracts.— The bill provides that guaranteed renewable life, health, and accident insurance will be treated in the same manner as noncancelable life, health, and accident insurance. Reserves with respect to such insurance will, therefore, be treated in the same manner as life insurance reserves for purposes of computing taxable investment income and gains from operations. * * * By including such contracts specifically within life insurance reserves for the future, your committee intends no inferences to be drawn as to their tax treatment under prior law. H.Rep.No. 34, 86th Cong., 1st Sess., p. 18 (1959-2 Cum.Bull., p.' 748).” . It is a cardinal principle of statutory construction that a statute clear on its face must be interpreted as it is written. The United States Supreme Court in Unexcelled Chemical Corp. v. United States, 345 U.S. 59, 64, 73 S.Ct. 580, 583, 97 L.Ed. 821 (1953), stated the rule as follows: “ * * * Arguments of policy are relevant when for example a statute has an hiatus that must be filled or there are ambiguities in the legislative language that must be resolved. But when Congress, though perhaps mistakenly or inadvertently, has used language which plainly brings a subject matter into a statute, its word is final — save for questions of constitutional power which have not even been intimated here.”

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2024-08-24T03:29:51.129683

HARRISON PROPERTY MANAGEMENT CO., INC., et al. v. The UNITED STATES. No. 280-69. United States Court of Claims. March 16, 1973. C. Ellis Henican, New Orleans, La., of record, for plaintiffs; Henican, James & Cleveland, New Orleans, La., of counsel. Thomas Smidt II, Arlington, Va., with whom was Asst. Atty. Gen. Scott P. Crampton, for defendant; Gilbert E. Andrews, Joseph Kovner, and Philip R. Miller, Washington, D. C., of counsel. Before CO WEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. We borrow our statement of facts from tlie opinion of Trial Commissioner O. Murray Bernhardt but we come to the opposite conclusion on the principal question. . There is a dispute whether tire corporation liad valid record title, under the peculiarities of Louisiana law, to the property transferred to it. We are not impressed with plaintiffs’ state law argument that it did not — a current contention which is at war with the consistent conduct of the company’s business on the understanding that it did have record title (including a statement to that effect in the side agreement between the company and its owners). Furthermore, in Carver v. United States, supra, 412 F.2d at 238, 239, 188 Ct.Cl. at 210-211, 212-213, this court expressly held taxable a corporation which was assumed not to have legal or equitable title, under the intricacies of state law, to the property transferred to it by its stockholders. See also National Carbide Corp. v. Commissioner, supra, 336 U.S. at 434-435, 438, 69 S.Ct. 726. . In addition, it is noteworthy that the agreement between the company and the owners does not even make clear that the conventional incidents of agency were intended to be created. For instance, it is far from plain whether the corporation purported to bind the individual Harrisons in leasing, etc.; the contract does not so state explicitly and its terms do not implicitly require that result. (Some of the leases were signed by the company alone and some by both the company and the Harrisons.) Also, the plaintiffs argue that the contract waived the individuals’ limited liability, but we agree with defendant that all that was provided was that the Harrisons would be chargeable for costs and expenses before receiving distributions ; nothing was said as to liability to outsiders. These and like factors are not dispositive considerations, one way or the other, but National Carlide suggests that they are relevant. On the whole, as our text indicates, we are satisfied that a “true agency” relationship, under the National Carlide standards, was not established. OPINION DAVIS, Judge, delivered the opinion of the court: The central issue turns on whether profits in the tax years 1960-63 derived principally from oil leases to property, the record title to which is in the name of a management corporation, are properly taxable to the corporation, as the defendant maintains or, as the plaintiffs contend, they are taxable solely to the individuals who, while retaining beneficial ownership of the property, transferred title to the corporation of which they were the sole incorporators, stockholders, officers, and directors. A subordinate issue is whether minor amounts paid by such corporation to two of its three shareholders as wages are properly classified as wages and are taxable accordingly under the Federal Insurance Contribution Act. The Government prevails on both issues. Walter J. Harrison, William H. Harrison, and Mrs. Lydia Harrison Couturie Ryan, brothers and sister, owned extensive oil-bearing acreage and a headquarters building in Louisiana which, prior to April 14, 1960, they had operated through Crescent Commercial Company, their family partnership. On April 14, 1960, the three individuals formed the plaintiff corporation, Harrison Property Management Co., Inc., to which they transferred title to the property in question, without warranty or consideration, reserving to themselves beneficial title to the property and all rights to proceeds of existing leases thereon for mineral rights and rights-of-way. The corporation replaced the partnership, and was formed primarily for the stated purpose of providing for efficient management in the event of the death of one of the individuals. There is no hint that tax evasion or avoidance motivated the transaction. The corporate charter tightly limited the rights, power, and authority of the corporation to conduct its business with particular reference to such transactions as acquisition of real property, investment of funds, fixing of officers’ salaries, employment of personnel, adoption or repeal of by-laws, borrowing or lending of money, and sale or encumbrance of property, all of which transactions required unanimous approval of the shareholder directors. The transferors, who were the incorporators and became the sole stockholders of the corporation in equal proportions, as well as its sole officers and directors, retained full control of corporate decisions as to the matters specified. The charter required approval of a majority of the directors for the granting of leases, rights-of-way, licenses, or permits regarding the property transferred to the corporation “for administration and management purposes”, and prohibited transfers of such rights so as to favor one officer or shareholder over another, directly or indirectly. Contemporaneously with the incorporation the individuals and the corporation entered into an agreement which specified that the transfer of property to the corporation was made “solely and only as a matter of convenience and accommodation and without consideration whatsoever” having been paid by the corporation to the individuals, who were expressly identified as the “beneficial owners” and “true owners” of the property transferred, with the corporation disclaiming “any right, title, or interest” in and to the property other than the right to manage and administer it. By the agreement the corporation’s expenses were to be charged against the three individuals in equal amounts by means of deductions from proceeds of operations distributable periodically to the individuals. The agreement also provided for the retransfer without consideration of any part of the corporate property to the individuals on a proportionate basis, required the corporation in the event of its breach of the agreement to retransfer all of the property proportionately to the individuals without consideration on due notice and demand by them, and required the retransfer of the property to the individuals after 50 years. Throughout the taxable years in issue the corporation complied in all respects with the agreement’s terms. It deducted from corporate revenues all expenses and credited the balance in proportionate amounts to accounts of the individuals, who received such earnings directly. The individuals were obligated to replenish the corporation’s funds for costs and expenses, as needed, again on a proportionate basis. Besides payments for leases (the major source of income), receipts included cash contributions from shareholders, building demolition proceeds, profits from land sales, camp rentals, and pecan sale proceeds. Disbursements included salaries, payments to shareholders, taxes, cost of litigation and professional services, supplies, travel expenses, utilities, maintenance costs, commissions, insurance premiums, land care expense, contributions, and petty cash. The corporation maintained a checking account and recorded all receipts and disbursements on its books and records. No loans were made by or to the corporation. The members at the first meeting of the board of directors of the corporation on April 15, 1960, specified that it was to be regarded purely as a “management instrument only” without change from the Crescent Commercial Company partnership which it succeeded, and stated the purpose of forming the corporation to be “solely to provide for efficient management in the event of the death of one of the Harrisons.” Each of the incorporators contributed $5,000 to the authorized capital of $15,000, and received in exchange 50 of the 150 authorized and issued shares of capital stock. The corporation and the individuals joined in suits. Some leases were signed by the corporation alone and some by it and the individuals. The corporate accounts reflected the three individuals as joint owners of the properties whose nominal title had vested in the corporation. The company maintained capital accounts in the names of the three individuals and generally speaking kept its financial and accounting records in much the same way as Crescent Commercial Company, the family partnership which it succeeded. For calendar year 1960 the corporation filed a United States Fiduciary Income Tax Return on Form 1041, showing a distribution of net income proportionately to the three individuals. In 1961, 1962 and 1963 the corporation filed returns on Form 1120, reporting no income or expenses but accompanying each return with a schedule showing the proportionate distribution of income and expenses to the three individuals. In each of the calendar years 1960 through 1963 the individual plaintiffs filed separate Federal tax returns reporting the income and expenses allocated to them by the corporation. The taxes were paid accordingly. On February 9, 1968, the Internal Revenue Service made timely assessments of taxes and interest against the corporation as shown in the findings. The assessments against the corporation were paid by the three individual plaintiffs on a proportionate basis. Claims for refund were duly filed by the corporation, and disallowed on March 28, 1969, resulting in this suit. On the major issue of whether the management corporation is itself taxable on its income, there are well-established standards which confine and guide our ruling. The Supreme Court has spoken twice, in Moline Properties, Inc. v. Commissioner, 319 U.S. 436, 63 S.Ct. 1132, 87 L.Ed. 1499 (1943), and National Carbide Corp. v. Commissioner, 336 U.S. 422, 69 S.Ct. 726, 93 L.Ed. 779 (1949). The precedents in this court are Carver v. United States, 412 F.2d 233, 188 Ct.Cl. 202 (1969), and Love v. United States, 119 Ct.Cl. 384, 96 F.Supp. 919 (1951). A leading case in the courts of appeals is Tomlinson v. Miles, 316 F.2d 710 (C.A. 5), cert. denied, 375 U.S. 828, 84 S.Ct. 71, 11 L.Ed.2d 60 (1963). Under the principles declared and applied in those decisions, it is very clear that —putting aside for the moment the contract (which plaintiffs call an agreement of agency) made by the individuals with the corporation at the time it was set up —the corporation was taxable. The paramount principle is that stockholders of a closely held corporation cannot demand (Subchapter S aside) that it be ignored for federal income tax purposes — at least if it is more than a pure sham and was created or acts for some business end. “The doctrine of corporate entity fills a useful purpose in business life. Whether the purpose be to gain an advantage under the law of the state of incorporation or to avoid or to comply with the demands of creditors or to serve the creator’s personal or undisclosed convenience, so long as that purpose is the equivalent of business activity or is followed by the carrying on of business by the corporation, the corporation remains a separate taxable entity.” Moline Properties, Inc. v. Commissioner, supra, 319 U.S. at 438-439, 63 S.Ct. at 1134 (footnotes omitted). Where individuals adopt the corporate form for purposes of their own, the choice of the advantages of incorporation to do business requires “the acceptance of the tax disadvantages.” Ibid. It is immaterial that the shareholders remain the beneficial owners of the property transferred to the company, or that the latter’s policies and day-today activities are determined, not as decisions of the corporation, but by the owners acting individually. National Carbide Corp. v. Commissioner, supra, 336 U.S. at 433-434, 69 S.Ct. 71; Tomlinson v. Miles, supra, 316 F.2d at 714; Carver v. United States, supra, 412 F.2d at 239, 188 Ct.Cl. at 212-213. By the same token, it does not matter that the corporation is regarded by its owners as a simple “dummy”. National Carbide Corp. v. Commissioner, supra, 336 U.S. at 433, 69 S.Ct. 726; Love v. United States, supra, 96 F.Supp. at 922, 119 Ct.Cl. at 405. The controlling tests, ignoring the fact that the corporation is substantially the alter ego of the stockholders, concentrate on the reasons why the “dummy” was created, and what it actually does. Harrison Property Management Co. Inc. was formed for the three Harrisons’ own “convenience”, in that its primary purpose was to provide for efficient management if one of them died, and a lesser aim apparently was to decrease the need for the signatures of all three owners in routine operations. Those are, of course, business goals — perfectly acceptable business purposes — deliberately sought by the Harrisons for their own ease and advantage. Other benefits of the corporate form would also accrue to the shareholders, as the Fifth Circuit pointed out in the similar case of Tomlinson v. Miles, supra, 316 F.2d at 713. Moreover, this corporation was actually used, and performed business functions. It authorized and executed leases for mineral rights, granted several rights-of-way, sold some produce, acted as a party in litigation, hired executive officers, paid local taxes, maintained its building, kept a checking account, recorded its receipts and disbursements, held meetings of stockholders and directors, and followed the formalities of corporate operation. It was by no means dormant or inert. On the contrary, its business activity was fully comparable to that found in Tomlinson v. Miles, supra, and more than in Carver — both of which held the corporation a taxable entity. We know of no case which, on similar facts, has disregarded the corporation, at the instance of the shareholders, as not engaging in enough business activity. In Paymer v. Commissioner, 150 F.2d 334 (C.A. 2, 1945), the court of appeals upheld the taxability of one corporation which carried on somewhat less activity than Harrison Property Management Co., Inc., but disregarded as sham a sister company which did nothing but take and hold title to some real estate as a blind to deter the creditors of one of the shareholders. Plaintiffs, however, do not put their major emphasis on the status of the corporation apart from the side agreement. Fundamentally, they rest on this contract between the Harrisons and the Management Company which, in their view, brings this case within the exception recognized by the Supreme Court in National Carbide Corp. v. Commissioner, supra, 336 U.S. at 437, 69 S.Ct. at 734: “What we have said does not foreclose a true corporate agent or trustee from handling the property and income of its owner-principal without being taxable therefor.” The claim is that by this pact, made contemporaneously with the birth of the corporation, the company was made, and continued to act as, such a “true corporate agent.” National Carbide makes it clear that the formal designation of “agency agreement” is not conclusive; the significant criteria, as we understand them, are whether the so-called “agent” would have made the agreement if the so-called “principals” were not its owners, and conversely whether the “principals” would have undertaken the arrangement if the “agent” were not their corporate creature. The Court put it thus: “If the corporation is a true agent, its relations with its principal must not be dependent upon the fact that it is owned by the principal * * * ” (336 U.S. at 437, 69 S.Ct. at 734), and the opinion illustrated that premise by saying of the corporate parent in that case (Airco, the alleged “principal”): “The entire earnings of petitioners [Airco’s subsidiaries, the alleged “agents”], except for trifling amounts, are turned over to Aireo not because the latter could command this income if petitioners were owned by third persons, but because it owns, and thus completely dominates the subsidiaries. Aireo, for sufficient reasons of its own, wished to avoid the burdens of principalship. * * * It cannot now escape the tax consequences of that choice, no matter how bona fide its motives or longstanding its arrangements. When we referred to the ‘usual incidents of an agency relationship’ in the Moline Properties case, we meant just that — not the identity of ownership and control disclosed by the facts of this case” (336 U.S. at 438-439, 69 S.Ct. at 734-735). An example of a “true” agency (or “true” trusteeship) under this standard was found by this court in Carver v. United States, supra, 412 F.2d at 239-240, 188 Ct.Cl. at 213-214, where the wholly-owned corporation acted on behalf of a non-owner independent third-party in the same way as it did for its individual owner. The relationship to this third-party, an outsider, demonstrated that, with respect to that transaction, the company’s agency connection with its owner was not dependent on the fact of ownership. Unlike this aspect of Carver, we do not doubt that the present plaintiffs fail the test. It is inconceivable that Harrison Property Management Co., Inc. would have made its alleged “agency” contract with property owners other than its own shareholders, the Harrisons, or that the latter would have agreed to such an arrangement with the corporation if they did not own and control it. Obviously the agreement was deliberately drawn, in conjunction with the special provisions of the corporate charter, so that the company would service its owners alone, and was made solely because they were its owners. The entire operating arrangement was custom-made for that very purpose. The total arrangement assured, for instance, that each of the three Harrisons (or a representative) would be one of the three directors of the corporation; that sales of property would have to have the approval of all three but that two would be enough for future leases; that certain activities (including acquisition of land and making investments) would also require the unanimous consent of all three; that expenses were to be charged equally against the three; and that the property transferred to the corporation would be transferred (before the end of the corporate life in 50 years) only if all three should so demand (except in case of breach by the company or failure to manage part of the property). Thus, many of the important activities of the company required consent of all three Harrisons (or their designees), while the rest called for approval of two of them. In other words, all of the corporation’s relations with the beneficial owners of the managed property were wholly dependent on the fact that they were the sole shareholders. Several of the points made to support a “true agency” here seem to assume that the Moline Properties-National Carbide-Love-Tomlinson-Carver rule for the taxability of close corporations, discussed earlier in this opinion, can be avoided by the simple device of having the company and its owners execute an “agreement” designating the former as “agent” and the latter as “principal”, regardless of the actual relationships and the realistic operations of the corporation. We have already pointed out that the National Carbide opinion, which rejected such an agreement (comparable to the one we have before us) as establishing a “true agency”, squarely disposes of that postulate, and on the contrary calls for a more substantial showing that the connection between the self-designated “principal” and “agent” is independent of the “principal’s” ownership of and control over the “agent”. National Carbide also answers- other contentions raised on behalf of plaintiffs. One is that the “principals” (here, the Harrisons) received all the profits directly. As to this, the Supreme Court said (336 U.S. at 436, 69 S.Ct. at 733): The Tax Court felt that the fact that Aireo [the “principal” and owner in that case] was entitled to the profits by contract shows that the income “belonged to Aireo” and should not, for that reason, be taxed to petitioners [the “agents”, wholly-owned corporations] . Our decisions requiring that income be taxed to those who earn it, despite anticipatory agreements designed to prevent vesting of the income in the earners, foreclose this result. [Citing cases]. Of course one of the duties of a collection agent is to transmit the money he receives to his principal according to their agreement. But the fact that petitioners were required by contract to turn over the money received by them to Airco, after deducting expenses and nominal profits, is no sure indication that they were mere collection agents. Such an agreement is entirely consistent with the corporation-sole stockholder relationship whether or not any agency exists, and with other relationships as well. Another circumstance negatived by the National Carbide opinion as showing “true agency” is that the “agent’s” assets all came from the owner-“principal”, without real consideration in return. 336 U.S. at 434-435, 438, 69 S.Ct. 726. The Court thought it irrelevant on the agency issue whether the funds supplied by the owner were capital contributions or loans; in either ease the parent was not a true principal. Similarly in our case the fact that the Harrisons supplied the Management Company’s assets and its operating capital is ineffective to create a “true agency”. In National Carbide the purported “agents” (subsidiary corporations) carried on more extensive activities than Property Management did here but each of those subsidiaries was limited in its functioning (336 U.S. at 424-425, 69 S.Ct. 726), just as the Harrisons’ company was restricted to the management of certain real estate. In neither instance was the “agent” permitted to perform all the functions of the “principal”. And we have held in the first part of this opinion that the limited activity carried on by Harrison Property Management, which clearly resulted in income from leasing and otherwise, was enough for taxability under the Moline Properties principle. We close on this issue by noting that it is especially important to adhere to the National Carbide tests in cases, such as this, of closely-held small corporations. In Subchapter S, sections 1371-1379 of the 1954 Code, Congress has provided, in defined circumstances, for the treatment of such companies as partnerships, with the stockholders rather than the corporation paying the income tax on the profits. It appears highly probable that Harrison Property Management Company, though a small business corporation, could not qualify for Subchapter S benefits because more than 20 percent of its receipts in the taxable years was “passive investment income" from rents — a specific exception contained in Section 1372(e)(5). This limitation is still an integral part of the Congressional design for lifting the tax from the corporation — an existing legislative restriction which would be thwarted if non-eligible companies could attain the same result by the simple procedure of a surfacial “principal”“agent” agreement which is not in essence divorced from the owner-corporation relationship. On the subsidiary issue the trial commissioner wrote as follows: “The remaining issue relates to the assessment against the corporation in 1968 of $647.33 in Federal Insurance Compensation Act taxes, penalties and interest for salaries of $3,200 each paid in 1960 by the corporation to Walter J. and William H. Harrison for services rendered by them to the corporation in that year while they were corporate officers, directors, and shareholders. The assessment was paid in equal shares by the three Harrisons. The plaintiff contends that, rather than being remuneration paid by the corporation to Walter J. and William H. Harrison for services rendered, and thus subject to FICA taxes, the sums paid were in reality extra distributions to them as partners. If so, the plaintiffs concede that the sums would be subject to the self-employment tax under section 1402 of the Internal Revenue Code, but it is not clear that such self-employment taxes were ever paid by the recipients. Since Article XV of the corporation charter authorizes the payment of ceiling salaries to the two individuals as corporate officers, which salaries were subsequently waived by formal authorization of the board of directors^ and the account books of the corporation reflect that the sums received by the two individuals were paid them as salaries, it is presumed that the sums paid were salaries to corporate officers rather than distributions to partners, and the corporation was liable to pay FICA taxes thereon. United States v. Griswold, 124 F.2d 599 (1st Cir. 1941), cited by plaintiff is not controlling. There it was simply held that trustees in an investment trust who were not subject to shareholder control are not employees whose compensation was subject to the payment of Social Security taxes. The individuals in the case under consideration rendered services to the corporation for which the corporation was authorized to pay — and did pay — salaries. Thus, the assessment of FICA taxes, along with penalties and interest, was proper.” Plaintiffs have not excepted to this part of the trial commissioner’s opinion or to his conclusion on this issue, and we adopt the quoted paragraph as our ground for rejecting this part of the claim. The plaintiffs are not entitled to recover on any aspect of the case, and their petition is dismissed. • . Plaintiffs seem to argue that when the Supreme Court said, “If the corporation is a true agent, its relations with its principal must not be dependent upon the fact that it is owned by the principal”, the Court implied that the formal existence of a bare “agency agreement” would show ipso faoto that these relations were not, and could not be, “dependent” upon ownership (as they would be in the absence of some paper contract), but rather upon the technical wording of the agreement (regardless of its content and operation). The whole of the last section of the National Carbide opinion, 336 U.S. at 437-439, 69 S.Ct. 726, with its analysis of the “agency agreement” in that case, refutes this semantic suggestion. . Proposals have been made to remove the particular limitation, but they have not yet been adopted.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

LING-TEMCO-VOUGHT, INC. v. The UNITED STATES. No. 417-69. United States Court of Claims. March 16, 1973. Harold Hoffman, Dallas, Tex., of record, for plaintiff; Wynne Jaffe & Tinsley, Washington, D. C., of counsel. Thomas W. Petersen, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges. OPINION DAVIS, Judge Plaintiff Ling-Temco-Vought, Inc. (“LTV”), sues the defendant in this action for $1,022,973.27, representing the amount which the plaintiff expended out of its own funds in completing a project that was originally undertaken by a corporation known as Frederick Fenski & Miller Electronics, Inc. (“FF & M”), under a 1961 contract between that corporation and the defendant, acting though the Bureau of Ships (“BuShips”), Department of the Navy. The suit is for breach not “under the contract.” In the early 1960’s, the Navy had a need for a large-screen display system on which could be displayed, for the benefit of the personnel in the Combat Information Center (“CIC”) of a warship, data revealed by the ship’s radar concerning changes in the location of moving targets (such as aircraft, missiles, and vessels on the surface of the sea). FF & M’s business included the manufacture and sale of large-screen display systems for commercial applications. One of FF & M’s large-screen display systems employed an electro-mechanical technique and was sold under the trade name of Ieonorama. Of all the workable large-screen display systems that were in existence during the early 1960’s, FF & M’s Ieonorama was the only one that was available for shipboard use. However, the Navy regarded the commercial-type Ieonorama as incapable of keeping track adequately of the movement of the large number of high-speed targets (jet aircraft and missiles) involved in an anti-air warfare environment. In order to study FF & M’s Iconorama in a shipboard environment, and, if possible, to develop it into a satisfactory large-screen display system for CIC use aboard warships, the Navy Department (acting through BuShips): (1) purchased a commercial-type Iconorama “off the shelf” and installed it aboard the U.S.S. Randolph for experimentation and observation; and (2) entered into a 1961 contract with FF & M, which basically required FF & M to adapt its Iconorama to military standards and requirements, and to produce two prototypes of the system thus revised. The device which FF & M contracted to produce was to be called a Taetical/Navigational Display System (“Tae/Nav”). At the time when the contract was entered into, both contracting parties knew that the two Tac/Nav’s were being purchased by the Navy for evaluation purposes. After the contract was entered into, FF & M was acquired by and merged into LTV; and LTV, the plaintiff in the present case, was substituted for FF & M as the contractor under the contract. The effective date of this substitution was December 31, 1961. The contract required the plaintiff to design, fabricate, test, and furnish two Tac/Nav’s to the Navy, together with preliminary drawings, working drawings, preliminary technical manuals, final technical manuals, various reports, and 60 man-days of engineering services to assist in the installation and checkout of the devices. The work was to be done on a cost-plus-a-fixed-fee basis; and all work (except the furnishing of the reports and the engineering services) was to be completed by June 30, 1962. The contract contained an estimated cost schedule in the amount of $464,753, and the fixed fee was to be $27,097. Thus, the estimated cost and the fixed fee totaled $491,850. With respect to the estimated cost schedule, the contract contained a provision under the heading of “Limitation of Cost” which stated in part as follows: (b) The Government shall not be obligated to reimburse the Contractor for costs incurred in excess of the estimated cost set forth in the Schedule, and the Contractor shall not be obligated to continue performance under the contract or to incur costs in excess of the estimated cost set forth in the Schedule, unless and until the Contracting Officer shall have notified the Contractor in writing that such estimated cost has been increased and shall have specified in such notice a revised estimated cost which shall thereupon constitute the estimated cost of performance of this contract. At a conference between the plaintiff and BuShips that was held on March 28, 1962, the plaintiff asked that the estimated cost figure in the contract be increased by $590,000. BuShips told the plaintiff that it had not budgeted for or anticipated any cost overrun of such magnitude, and that it was not prepared to fund such an overrun. BuShips also stated that it would like to continue the contract, but not at the cost indicated, and asked what changes could be made to reduce the projected expenses. Possible areas of cost reduction were discussed. The conference was then recessed until the next day, so that the plaintiff could recompute the estimated overrun. On March 29, 1962, the parties conferred again. At this conference, the plaintiff made a written submission listing certain changes that could be made to reduce the proposed increase in the estimated cost of the contract from $590,000 (the figure proposed by the plaintiff on March 28, 1962) to $358,-028. By means of a telegram dated March 30, 1962, BuShips notified the plaintiff that “the contract is hereby modified to increase the total estimated cost * * * by $358,028 * * Modification No. 3 was signed by the contracting officer on April 18, 1962, and by the plaintiff on April 24, 1962. It increased the estimated cost of the contract by $358,028 to a new total of $822,781, and it extended the completion date (except for the furnishing of the reports and the engineering services) to August 15, 1962. During April of 1962, the plaintiff concluded that the cost of completing the contract would exceed by some $250,000 the then-current estimated cost of $822,781. At about the end of April 1962, the plaintiff asked for a conference with BuShips; and it was held on May 3, 1962. The plaintiff’s purpose in asking for a conference was to request a further increase of $250,000 in the estimated cost of the contract. At the conference, however, the conferees did not discuss the dollar amount of any additional increase in the estimated cost of the contract. Instead, the plaintiff was given what it characterized as a “stern lecture” by BuShips on overruns, and was told that BuShips would terminate the contract rather than fund or accept an overrun. On the other hand, Bu-Ships pointed oui to the plaintiff various factors which indicated that it would be a good business risk on the part of the plaintiff if the plaintiff would complete the performance of the contract at its own expense. The principal spokesman for BuShips at the conference on May 3, 1962, was Captain Francis H. Cunnare, the head of Code 665 in BuShips. Code 665 had entered into and was administering the contract for BuShips and the Navy Department. It was Captain Cunnare who pointed out the factors which indicated that it would be a good business risk on the part of the plaintiff if the plaintiff would complete the performance of the contract at its own expense. Captain Cunnare’s representations in this respect are detailed in the findings. From the standpoint of the present litigation, the most significant of these representations will be outlined in the next two paragraphs. Captain Cunnare told the plaintiff at the conference on May 3, 1962, that the Navy was not then considering any technique or concept other than Tac/Nav for accomplishing the large-screen display of information for CIC purposes. Captain Cunnare also told the plaintiff that there was a “fantastic” market potential for the large-screen display system, which would justify the plaintiff in investing its own funds for the completion of the performance of the contract. In this connection, Captain Cunnare stated that the Navy had firm requirements for production quantities of a large-screen display system similar to the Tac/Nav system that was being developed by the plaintiff under the contract, that these requirements were already programmed by the Navy, and that the Navy planned to put large-screen display systems on a large number of ships. Captain Cunnare’s presentation showed a requirement for the installation of large-screen display systems aboard 14 aircraft carriers over a period of approximately 5 or 6 years, an immediate requirement for 74 large-screen display systems aboard destroyers, and a total requirement for 350 large-screen display systems aboard destroyers over a period of from 5 to 8 years. Promptly after the conference on May 3, 1962, the plaintiff’s personnel who had participated in the conference outlined Captain Cunnare’s presentation to the plaintiff’s top management. One of the persons who participated in the conference with BuShips and also in the conference with the plaintiff’s top management was the assistant comptroller of the plaintiff. He estimated for the benefit of the plaintiff’s top management, on the basis of an anticipated selling price of $150,000 per Tac/Nav per destroyer and $250,000 per Tac/Nav per aircraft carrier, that the Navy’s requirements indicated sales in the amount of approximately $56,000,000 and, before taxes, a profit of approximately $5,600,-000. Another conference between the plaintiff and BuShips was held on May 8, 1962. The plaintiff’s vice-president in charge of the military electronics division was in the plaintiff’s group on that occasion. BuShips again told the plaintiff that it would not fund or accept an overrun; and that if overrun funds were requested, it would terminate the contract. However, BuShips also pointed out again the factors which indicated that it would be a good business risk on the part of the plaintiff if it would complete the performance of the contract at its own expense. After these conferences, the plaintiff agreed to complete the performance of the contract with its own funds, and signed a letter to that effect under the date of May 8, 1962. This letter stated in part as follows: * * -a [T]he contractor agrees to complete the program * * * without requesting additional overrun relief above and beyond the anticipated overrun funds of $358,028 included in * * * Modification Number 3. The plaintiff thereafter completed the performance of the contract. BuShips reimbursed the plaintiff for its expenditures in performing the contract, up to the amount specified in the estimated cost schedule of the contract, as revised, and paid the plaintiff the amount of the fixed fee specified in the contract, as revised. These payments fully discharged the financial obligation of BuShips to the plaintiff under the “Limitation of Cost” provision of the contract. However, the plaintiff, in completing the performance of the contract after May 8, 1962, expended $1,022,973.27 of its own funds, over and above the amount for which it received reimbursement from the Navy under the estimated cost schedule of the contract. The Navy accepted the two Tac/Nav’s that were delivered under the contract and evaluated them in a shipboard environment. In 1963, the Tac/Nav system was subjected to an evaluation testing program aboard the U.S.S. Essex-, and the report issued subsequent to this evaluation indicated that Tac/Nav was unable to keep up satisfactorily with the large number of high-speed targets involved in an anti-air warfare (“AAW”) environment. Thereafter, in order to determine whether Tac/Nav could perform satisfactorily in an anti-submarine warfare (“ASW”) environment- — which involves slower targets than those involved in the AAW situation — another evaluation testing program for the Tac/Nav system was performed in 1964, this one aboard the U.S.S. Wasp. Subsequent to the 1964 evaluation test, which was critical of the Tac/Nav system and indicated that it did not perform satisfactorily in an ASW environment, the Chief of Naval Material issued an order that no further procurements of the Tac/Nav system would be undertaken by the Navy. Therefore, the plaintiff never made any of the Tac/Nav sales which it anticipated at the time when it agreed in May 1962 to complete the performance of the contract at its own expense. The plaintiff contends that it should be reimbursed for the $1,022,973.27 which it expended out of its own funds in completing the performance of the contract, because it was misled by misrepresentations which were made by Captain Cunnare at the conferences on May 3 and 8, 1962. The evidence shows that Captain Cunnare made an incorrect statement at the conferences on May 3 and 8, 1962, when he said that the Navy was not then considering any technique or concept other than Tac/Nav for accomplishing the large-screen display of information for CIC purposes. It is true that Tac/Nav was the only such system that the Navy had contracted to purchase as of May 1962. However, the record shows that Code 685 — which was an organization in BuShips separate and apart from Code 665, which Captain Cunnare headed and with which the plaintiff was working under its Tac/Nav contract — had begun work in early January of 1962 on the development of a performance-type specification for a large-screen display system which would be designed for use in the CIC’s of warships and which would utilize an electronic or photochromic technique, as distinguished from the scribing concept used by the plaintiff’s equipment. By May 8, 1962 — the date on which the plaintiff agreed to complete the performance of the Tac/Nav contract at its own expense — a substantial amount of the work on Code 685’s proposed specification had been completed. Later, in April of 1963, BuShips awarded a contract to the Budd Company for the development of a large-screen display system in accordance with Code 685’s specification, which had been completed in the meantime. As of February 1971, the large-screen display system developed by the Budd Company had been placed in the characteristics of two amphibious command ships by the Navy. The evidence also shows that none of the plaintiff’s personnel was aware as of May 1962 that the Navy was considering a technique different from Tac/Nav for large-screen displays to be used in CIC’s aboard warships. In addition, the trial commissioner found that “the evidence warrants the inference that if the plaintiff had known as of May 8, 1962, that another group in Bu-Ships, not under the supervision of Captain Cunnare, was working on a specification for a large-screen display system using a technique different from the scribing technique (on which the plaintiff held the necessary patents), the plaintiff would not have agreed to fund, and would not have funded, the completion of the project under the contract.” The plaintiff invokes these findings of reliance and misrepresentation as the foundation of its claim that the Government improperly interfered, by misrepresenting the existing facts, with LTV’s privilege under the “Limitation of Cost” clause, supra, to discontinue its performance when the United States refused to fund the work any further. The contention, in legal phrasing, is that the United States breached the contract by wrongfully inducing the plaintiff, through these misrepresentations, to give up an important contract right. Defendant attacks the finding of reliance as unwarranted, and also challenges the characterization of defendant’s conduct as “misrepresentation.” However, for the purposes of the case, and without determining these issues one way or the other, we accept arguendo the commissioner’s conclusion that plaintiff relied on Captain Cunnare’s erroneous statements when it agreed to fund by itself the completion of the project. We also assume arguendo that these statements constituted affirmative and actionable misrepresentation. The court makes these hypothetical assumptions because we are persuaded that, even on those premises, plaintiff is barred from recovery by its own conduct after it discovered, in September 1962, the competing project which had been undertaken by Code 685. On September 6, 1962, Code 685 published an advertisement in the Commerce Business Daily which plainly revealed the existence of this other project and called upon firms interested in research and development connected with such a project'to make themselves and their experience known to the Navy. It was indicated that formal proposals might be requested later. The record shows that at that time — just four months after plaintiff had agreed to continue its own project with its own funds — plaintiff became quite aware that Code 685 was interested in procuring a large-screen display system utilizing an electronic or photochromic technique, and also that work along those lines was going forward. Nevertheless, LTV did not stop work, nor did it protest to the Navy that the latter had misled plaintiff into issuing the letter of May 8, supra. Neither did the contractor reserve its right to bring suit or to file a claim. Apparently without any intimation to the Navy of dissatisfaction or unhappiness, LTV simply continued to the end to perform its contract and to spend its own funds on the overrun portion of the contract, knowing all the time that the Navy did not intend to reimburse it for such expenses and that the Navy thought and continued to think that the plaintiff fully agreed to that course. More than that, plaintiff permitted the Government, after September 6th, to spend considerable federal money on this Tac/Nav contract. After May 8, both parties proceeded on the understanding that the plaintiff’s undertaking to complete the agreement at its own expense extended only to the in-scope work (as modified before May 8th). Both understood that LTV’s promise did not cover the contract as it might thereafter be changed. Therefore, after May 8th, whenever BuShips changed the contract by exercising options, adding out-of-scope work, or making changes in the in-scope work, it provided increased federal funds to cover the additional costs of such changes. This post-September 6th increase amounted to over $312,000, and added $2,205 to plaintiff’s fixed fee. (The contract continued into 1963 and 1964, the last modification being in August 1964.) Moreover, LTV, without any suggestion that its rights had been invaded, permitted the Navy to undertake field evaluations of plaintiff’s Tac/Nav system in both 1963 and 1964. We have been given no adequate justification or explanation for this total silence, during the performance of the contract, by LTV after it learned about Code 685’s project in September 1962, and knew that the representations on which it says it relies were incorrect. The stark fact is that nothing was said until well after it became clear that the Navy would not purchase LTV’s product, and no cue was given at any prior time that plaintiff thought the Government had breached its obligation under the contract. Not only was performance continued normally, but no reservation of rights was made known and the defendant was permitted to incur some $315,000 in additional costs of its own, and to pursue evaluation tests, though it might well have terminated the contract at once and stopped all performance if it had been told that plaintiff was thinking of holding it liable for all expenses after May 8. With respect to this very type of situation we recently said: “There is, of course, venerable authority that, wherever a contract not already fully performed is continued in spite of a known breach, the wronged party cannot avail himself of that excuse * * *. As a general proposition, one side cannot continue after a material breach by the other * * *, act as if the, contract remains fully in force (although stopping performance would be fair and convenient), run up damages, and then go suddenly to court.” Northern Helex Co. v. United States, 455 F.2d 546, 551, 197 Ct.Cl. 118, 125-126 (1972). In Northern Helex we found “particular circumstances [centering on the need to prevent wastage of helium] justifying further performance in the specific case” 455 F.2d at 551-552, 553, 197 Ct.Cl. at 125-127, 129, but even then we rested, equally, on the significant facts that that contractor had made an express reservation of its rights when it continued performance, 455 F.2d at 552-553, 197 Ct.Cl. at 128-130, and that the “Government was not hurt and it did not change its position.” 455 F.2d at 554, 197 Ct.Cl. at 130-137. The court was at pains to spell out the “special aspect” and the “special facts” of that case, 455 F.2d at 551, 553, 197 Ct.Cl. at 126, 130, which permitted the contractor to continue performance while at the same time claiming total breach. Analogous facts are not present here, as we have already pointed out and discuss again below. An earlier decision in which a contracting party was held barred from enforcing a material breach it had for too long allowed to go unprotested is Acme Process Equip. Co. v. United States, 347 F.2d 509, 515-518, 171 Ct.Cl. 324, 334-339 (1965), rev’d on other grounds, 385 U.S. 138, 87 S.Ct. 350, 17 L.Ed.2d 249 (1966). The contractor had breached its covenant-against-contingent-fees but, said the court, “the crucial point is that the defendant, after obtaining knowledge of the facts, waited until over a year later before canceling the agreement. Could an election to cancel be delayed for such a time? We hold not. In our view, an election to annul the contract had to be made with reasonable promptness after the Government gained knowledge of the facts; by putting off its decision for an inordinately long period, the defendant lost the right it earlier had to terminate the contract without incurring any cost. * * * The sanction of contract cancellation is too drastic to permit a long delay. Beyond the time reasonably necessary to determine if there has been a misrepresentation or a violation of the covenant, the defendant cannot allow an unwary contractor to continue performance and thus incur large expenses, all of which the Government will refuse to reimburse if and when it decides to cancel the contract on the ground of the violation.” 347 F.2d at 515-516, 171 Ct.Cl. at 335-336 (footnotes omitted). The same over-all principle was applied in DeVito v. United States, 413 F.2d 1147, 1151-1154, 188 Ct.Cl. 979, 986-991 (1969), in which the Government, without any reservation of rights, permitted a defaulting contractor to continue performance for a considerable time before issuing a notice of default termination. “Where the Government elects to permit a delinquent contractor to continue performance past a due date, it surrenders its alternative and inconsistent right under the Default clause to terminate, assuming the contractor has not abandoned performance and a reasonable time has expired for a termination notice to be given. * * * The election is sometimes express, but more often is to be inferred from the conduct of the non-defaulting party. * * * The necessary elements of an election by the non-defaulting party to waive default in delivery under a contract are (1) failure to terminate within a reasonable time after the default under circumstances indicating forbearance, and (2) reliance by the contractor on the failure to terminate and continued performance by him under the contract, with the Government’s knowledge and implied or express consent.” 413 F.2d at 1153-1154, 188 Ct.Cl. at 990-991. Acme and DeVito cannot rightly be distinguished as involving an effort by the non-defaulting party to cancel, annul, or terminate the whole contract, while LTV merely seeks damages for a breach. Even on that technical formulation, this case is fully comparable. Since plaintiff seeks all of its unreimbursed costs after May 8, its claim is the exact equivalent of a demand that the contract be deemed ended as of that date. LTV wishes to be placed in the same position as if it had terminated all performance and all obligations at that time — just as the defendant unsuccessfully sought to do in Acme and DeVito. More fundamentally, we think that plaintiff does not meet the general standard which the law has been developing for a non-defaulting party, aware of a material breach, who desires to maintain the contract alive and functioning. Acme, DeVito, Northern Helex, and the provisions of the Uniform Commercial Code discussed in the Helex opinion, are but illustrations of the basic principle calling for fair treatment of both parties — weighing the advantages to the injured side of continuing performance (with or without reservation of rights) against the disadvantages to the defaulter, and requiring that due opportunity be given the latter to make use of the options then lawfully available to him. However the legal conclusion be framed, in terms of “waiver” or “election” or “estoppel”, that is the core concept. In this instance, LTV made its calculation entirely in its own favor, without proper consideration of the defendant’s position. If plaintiff had stopped performance in September claiming a breach, the Navy would then know that the United States might be liable for plaintiff’s costs from May 8 to that time, but it would also be free of any costs from September forward (including the $315,000 the Government itself expended thereafter). If plaintiff had continued performance but at the same time reserved its right to claim a breach, the defendant would have had the choice whether to terminate the contract entirely at that time (which it still had the right to do, cf. Nolan Bros., Inc. v. United States, 405 F.2d 1250, 1253-1255, 186 Ct.Cl. 602, 606-610 (1969)) or to continue at the risk of having to pay greater damages and incurring additional costs. The record suggests the probability that, if plaintiff had then uttered such a reservation, this government right to terminate would have been exercised since the Navy was adamant against funding an overrun. In any event, if the United States had been timely warned, it would have been able to make its own choice whether or not to end performance at once, and it is this choice of which the defendant was deprived. By omitting both of these steps, the contractor in effect retained all options for itself. Not aware of the undisclosed claim of a breach, the defendant allowed the contract to continue to completion (under the arrangement the Navy thought it had) and did not terminate. Thus, if LTV’s Tae/Nav system survived the Navy’s tests and the contractor sold enough of the product to the Government, plaintiff would be reimbursed for all its expenses and make a profit. It could then forget about the breach claim which would be mooted for practical purposes. On the other hand, if the product failed (as it did), the contractor would be in a position to seek reimbursement through a breach suit. The result would be to protect LTV in all eventualities, at the expense of the Government’s rightful interests. It makes no difference that plaintiff may not actually have had this conscious design from September 1962 on. The patent inequity to defendant flows from LTV’s overt conduct in the way it shaped events, not from any subjective bad faith. The short of it is that, whatever its intentions, plaintiff did not act reasonably and fairly toward the Government when it continued performance after early September, without giving any indication of its misrepresentation claim. For that reason we hold it precluded from recovering on that demand. There is an alternative claim of mutual mistake, on which little need be added. Though we assume arguendo a mutual mistake in May 1962 that plaintiff’s Tac/Nav system was the only available and viable one, we cannot read the record as showing that, if the truth had then been known, the Navy would have agreed at the time to pay for the over-run. Government resistance to further federal funding was too strong to permit any such inference nunc pro tunc; the more likely result would have been termination by mutual consent in May. Cf. Evans Reamer & Machine Co. v. United States, 886 F.2d 873, 879-881, 81 Ct.Cl. 539, 550-553 (1967), cert. denied, 390 U.S. 982, 88 S.Ct. 1102, 19 L.Ed.2d 1279 (1968); Southwest Welding & Mfg. Co. v. United States, 373 F.2d 982, 989-991, 179 Ct.Cl. 39, 51-54 (1967); Chernick v. United States, 372 F.2d 492, 496-497, 178 Ct.Cl. 498, 506-507 (1967). Furthermore, plaintiff’s silence after September 6 militates against this reformation-rescission claim, as well as against the breach count. If the defendant had then been told that the contract was bottomed on a mistake and that LTV wished reformation or rescission, the option of immediate termination (or of rescission) would have been available to the Government and probably would have been exercised. A very large amount of government money and effort would have been saved. “We are rightly admonished, in the region of mutual mistake, to seek just solutions.” National Presto Industries, Inc. v. United States, 338 F.2d 99, 111, 167 Ct.Cl. 749, 768 (1964), cert. denied, 380 U.S. 962, 85 S.Ct. 1105, 14 L.Ed.2d 153 (1965) (emphasis added). It is plainly inequitable to reform or rescind the agreement in 1973 at defendant’s expense when plaintiff foreclosed the Navy in 1962 from freeing itself at that time from the mistaken bargain. The same reasons doom LTV’s suggestion that it be at least awarded a quantum meruit recovery; there is no way to balance the detriment to the Government occasioned by plaintiff’s silence after September 6th against any benefit the Navy may have obtained from plaintiff’s development work under the contract. In addition, the trial commissioner found, and we agree, that' this record “does not contain any evidence on the basis of which the value which the Navy derived from the plaintiff’s developmental work under the contract could be expressed in financial terms.” Cf. Boyajian v. United States, 423 F.2d 1231, 1244, 191 Ct.Cl. 233, 254 (1970). The plaintiff is not entitled to recover and its petition is dismissed. We are indebted to Trial Commissioner Mastín G. White for his opinion, the first section of which we incorporate. We reach the same port through a different channel. . The petition asked for a recovery in the amount of $1,110,900, but the claim was later reduced by the plaintiff to $1,022,973.27. . Unknown to plaintiff, one of the Navy participants (other than Captain Cunnare) at the conferences on May 3 and 8, 1962, was aware at the time that Code 685 was working on the development of a specification of a display system with an electronic or photochromic technique. . Plaintiff’s main argument on this aspect of the case is that there is no evidence that, when the plaintiff learned about the Code 685 program on September 6, it also knew (or learned) that that information had been withheld from it early in May 1962 — it says that, for all it knew, Code 685’s project might not have been in existence in May — and therefore that plaintiff did not know in September that the Navy had made a misrepresentation four months earlier. However, Code 685’s September advertisement shows on its face that the Navy had obviously been thinking for some time about that project, and we cannot believe that an easy inquiry by LTV, a very knowledgeable Navy contractor, would have failed to disclose that the other project was underway in May. If plaintiff did not actually learn this fact in September, it could and should have done so, and cannot now make a virtue of the blinders it chose to don. Plaintiff’s only other excuse for not ceasing performance in September is that, if it had done so, that would have been in breach of the post-May 8th modifications to the contract. Even if this were so, it would not excuse LTV’s failure to protest and make overt reservation of its rights. But, in any event, plaintiff’s legal position is incorrect; the Government’s material breach would have relieved the contractor of all its obligations under the contract and permitted it to elect to claim a total breach and to end all performance. Cf. Northern Helex Co. v. United States, 455 F.2d 546, 550-551, 197 Ct.Cl. 118, 124-125 (1972). . There may be exceptions or qualifications for such situations, governed by countervailing factors, as payments illegally made by the Government. See Acme Process Equip. Co. v. United States, supra, 347 F.2d at 516, 171 Ct.Cl. at 336; Acme Process Equip. Co. v. United States, 347 F.2d 538, 551-553, 171 Ct.Cl. 251, 272-275 (1965). . In the circumstances it would not be proper to allow plaintiff’s claim even if shaved down to the costs incurred between May 8, and September 6, 1962. Because of the contractor’s conduct, the defendant incurred very substantial expenses after the latter date and undertook the test evaluations. If plaintiff had alerted the Navy on time, the Government might have chosen to expend that money and effort in other, more productive, ways. There is no practicable method of assessing the net gains and losses. See also infra. . See note 5, supra.

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Arthur R. GUARRIELLO v. The UNITED STATES. No. 738-71. United States Court of Claims. March 16, 1973. Roger P. Kaplan, Washington, D. C., of record, for plaintiff. Karen A. Berndt, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, JJ. ON DEFENDANT’S MOTION AND PLAINTIFF’S CROSS MOTION FOR SUMMARY JUDGMENT KUNZIG, Judge. This is a civilian pay case in which plaintiff claims entitlement to environmental differential pay for hazardous duty, over and above a 12% annual premium already being received. Jurisdiction is conferred upon this court pursuant to 28 U.S.C. § 1491 (1970). Whether plaintiff is entitled to the additional differential pay is the issue. We hold he is not so entitled. The facts in this case are quite simple. Plaintiff, a Wage Grade-12 (WG-12) National Guard Technician employed at a NIKE missile site, already receives 12% premium pay per year. On December 7, 1970, he performed work while exposed to adverse high winds and chilling conditions for 5 and % hours. Claiming that this duty must be compensated in excess of the 12% premium pay, plaintiff now seeks environmental differential pay. This claim was returned by the Adjutant General without action as a result of an opinion by the Comptroller General of the United States adverse to such recovery. Plaintiff now comes before this court with the same claim, praying that we enter judgment in his behalf in the total amount of $5.98. Motions for summary judgment have been filed by both parties, there being no genuine issues of material fact. We hold for the defendant. Unfortunately for plaintiff in this case, he is beset by unanswerable, statutory problems which surround him on all sides like rocks surrounding a ship in distress. Any way he turns, he can advance his argument just a short distance before it founders. Upon careful screening, the statutes on which he must rely just do not support his position. In 1968 the National Guard Technicians Act was enacted into law. 32 U.S.C. § 709 (1970). The overall purpose of the statute was to give “federal employee” status to National Guard Technicians. It authorized the appropriate Secretary to prescribe the hours of duty and rates of pay. The statute provides in pertinent part: (g)(1) Notwithstanding sections 5544(a) and 6102 of title 5, United States Code, or any other provision of law, the Secretary concerned may, in the case of technicians assigned to perform operational duties at air defense sites— (A) prescribe the hours of duties; (B) fix the rates of basic compensation; and (C) fix the rates of additional compensation ; to reflect unusual tours of duty, irregular additional duty, and work on days that are ordinarily nonworkdays. Additional compensation under this subsection may be fixed on an annual basis and is determined as an appropriate percentage, not in excess of 12 percent, of such part of the rate of basic pay for the position as does not exceed the minimum rate of basic pay for GS-10 of the General Schedule under section 5332 of title 5, United States Code. Notwithstanding the above quoted statute, plaintiff contends that pursuant to Federal Personnel Manual Supplement 532-1, Appendix J, he is entitled to an additional hazardous duty pay above the 12% premium. Appendix J of the Federal Personnel Manual Supplement 532-1 was promulgated by the Civil Service Commission pursuant to the Coordinated Federal Wage System. This system was created to coordinate the pay schedules of all wage grade employees of the federal government. This section of the Personnel Manual sets out environmental differential rates that would be paid to wage grade employees performing hazardous duty. On the face of this regulation it would appear that plaintiff would be entitled to the environmental differential for the undisputed hazardous work that he performed. However, 32 U.S.C. § 709 (g)(1) supersedes this provision. Although the Federal Personnel Manual does provide additional pay for hazardous duty, Congress clearly intended that this should be included in the 12% premium stated in § 709(g)(1). The plain language, “notwithstanding . any other provision of law”, leaves no doubt that this statute is intended to be the controlling factor regarding pay schedules of National Guard Technicians. Assuming, arguendo, that § 709(g)(1) may be controlling as far as it goes, plaintiff argues that hazardous duty is not to be included under the 12% maximum because it was not intended to be included in the category of “additional compensation” as it is used in § 709(g) (1). “Additional compensation” is an all comprehensive term. Yet plaintiff argues that the words should be narrowly defined as to mean only compensation for overtime. This court has long recognized that judicial tribunals must be careful in departing from statutory terms. As far as possible, violence should not ordinarily be done to the words chosen by the Congress. Crawford v. United States, 376 F.2d 266, 272, 179 Ct.Cl. 128, 138 (1967), cert. denied, 389 U.S. 1041, 88 S.Ct. 781, 19 L.Ed.2d 831 (1968). Plaintiff’s attempt to deviate from the normal meaning of “additional compensation” would do just that. It would seem that when a statute provides for basic compensation, then separately provides for additional compensation, notwithstanding any provision of law, it has, so to speak, “covered the waterfront” in re compensation. And to make plaintiff’s position even more untenable, 32 U.S.C. § 709(g)(1) even goes so far as to single out technicians assigned to perform operational duties at air defense sites. Plaintiff argues further that, should defendant’s position be successful, discrimination and gross inequities would result. He points out that a technician on hazardous duty would get a 12% premium and a technician performing normal, non-hazardous duty would also receive 12%. This, he claims, is unfair and inequitable. We concede that plaintiff may well be right. There may be inequities in the rates of pay for hazardous versus nonhazardous duty for air defense technicians. But under 32 U.S.C. § 709(g) (1) the remedy, correctly, does not lie within the power of the judiciary; it lies with Congress. To achieve what he desires, plaintiff must obtain appropriate statutory amendments from the only body so empowered .... Congress. As an additional argument plaintiff contends that since hazardous duty is not specifically listed in the statute as are unusual tours of duty, irregular additional duty, and work on the days that are ordinarily nonworkdays, it is not intended to be included in the term “additional compensation”. The mentioning of a few specific examples of types of duty cannot be read to preclude additional specific types of duty. Indeed, the very words “additional compensation” in the same sentence are clearly so broad as to encompass other types of duties. Similarly when plaintiff argues that 32 U.S.C. § 709(g)(1) does not specify that environmental differential pay is included in the 12% premium, he ignores the normal meaning of the words of the statute. Plaintiff has the burden of persuading the court that the language means something other than what normal usage gives it. Williams v. United States, 117 F.Supp. 189, 127 Ct.Cl. 167, 168 (1953). Finally, plaintiff urges that the legislative history of 32 U.S.C. § 709(g) (1) in no way discusses “hazardous duty”. He infers that if the 12%- annual premium pay were meant to cover hazardous duty, it somehow had to be discussed in the legislative history. Clearly, this argument is untenable. This court has held that it is “the statutes themselves which must be construed, and legislative materials are important only to the extent that they shed light on ambiguities in the statutes”. Merrill v. United States, 105 F.Supp. 379, 382, 122 Ct.Cl. 566, 577 (1952). In summary, plaintiff may receive up to a 12% annual premium, but not in excess of 12%. Defendant’s interpretation is clear and unambiguous. Section 709 (g)(1) is the controlling statute; it totally governs plaintiff’s pay; there is no possible way he can receive, under the statute, more than the 12% premium he now receives. Accordingly, defendant’s motion for summary judgment is granted; plaintiff’s cross motion for summary judgment is denied; and the petition is hereby dismissed. . New Jersey Air National Guard. . 50 Comp.Gen. 847 (1971). . As of December 31, 1972, there were 2,682 air defense technicians in the United States. . 3 U.S.Code Cong. & Admin.News, p. 3318 (1968).

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CONWOOD CORPORATION by change of name from Hot Shot Quality Products, Inc., Appellant, v. The J. B. WILLIAMS COMPANY, INC., Appellee. Patent Appeal No. 8929. United States Court of Customs and Patent Appeals. March 29, 1973. Lewis S. Garner, Washington, D. C., attorney of record, for appellant. Edward G. Fenwick, Jr. (Mason, Fen-wick & Lawrence), Washington, D. C., attorneys of record, for appellee, Before MARKEY, Chief Judge, RICH, BALDWIN, and LANE, Judges, and ALMOND Senior Judge, BALDWIN, Judge. This appeal is from the decision of the Trademark Trial and Appeal Board dismissing an opposition to the registration of the mark HOT SHOT by appellee, J. B. Williams Co., for shave cream. The opposition was based on the use and registration of the mark HOT SHOT for a liquid insecticide. The sole issue is whether the use of the mark on the respective products of the parties would be likely to cause confusion, mistake or deception. The board adequately described and dealt with appellant’s main contention as follows: Opposer contends that the products of the parties are well-known household products which are normally advertised, displayed and sold in the same type stores; that the products of the parties “are normally often sold in containers of similar shape and size, often of the aerosol type”; that “the public well knows that companies that market household articles like insecticides, and companies that market toilet articles like shaving cream are the type of company that usually puts out a wide variety of differing household consumer goods”; and that “consumers are aware that diversified companies sometimes use the same trademark for the different items in their line”. Applicant points out that opposer has not taken any testimony and that opposer’s assumptions have not been established. There can be little doubt that the products of the parties would be available for sale to the general public, and it appears from some of the advertisements that shaving cream and insecticides are advertised for sale by a single entity. The opposer’s affidavit indicates that shaving cream and an insecticide were purchased in a single store. The other assumptions made by opposer concerning knowledge by consumers of marketing practices of companies are without foundation in the record and do not constitute matters of which judicial notice may be taken. Opposer has shown that the same company puts out an insecticide and a shaving cream but under entirely different trademarks. If any assumptions can be made on the basis of the proofs presented, then the obvious assumption is that albeit a manufacturer may well be the source of insecticides and shaving cream, such goods are ordinarily sold under different trademarks and that the public is aware of such practice. The last quoted parargraph refers to an affidavit by appellant’s attorney that he purchased AERO SHAVE shaving cream and BLACK FLAG insecticide in the same drugstore. The board also found HOT SHOT to be suggestive, stating that it is “a slang term, connoting a skilled performer; a highly skilled, fast working or showy person.” Appellant cites Eastern Industries, Inc. v. Waterous Co., 289 F.2d 952, 954, 49 CCPA 701, 703 (1961), as support for the contention that we can take judicial notice that “many companies put out a wide variety of products, often under the same trademark.” Accepting that broad proposition for the sake of argument, it does not convince us of reversible error in the decision below. Considering the differences in the products and the somewhat laudatory nature of the mark, we are of the opinion that one familiar with HOT SHOT insecticide would not be likely to attribute HOT SHOT shaving cream to the same manufacturer. The decision of the board is affirmed. Affirmed. . Abstracted at 168 USPQ 122 (1970). . Application Serial No. 290,793, filed February 9, 1968. . Registration No. 619,268, issued January-17, 1956.

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Application of Adrien J. HOTTE. Patent Appeal No. 8852. United States Court of Customs and Patent Appeals. March 29, 1973. Walter S. Zebrowski, Big Flats, N. Y., attorney of record, for appellant. S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents; Jere W. Sears, Washington, D. C., of counsel. Before MARKEY, Chief Judge, RICH, BALDWIN arid LANE, Judges, and WATSON, Judge, United States Customs Court, sitting by designation. MARKEY, Chief Judge. This appeal is from the decision of the Patent Office Board of Appeals affirming the rejection of claims 1-7 of appellant’s application entitled “Electrical Capacitor and Method,” Serial No. 688,556, filed December 6, 1967, as unpatentable over the prior art (35 U.S.C. § 103). THE INVENTION Appellant’s invention relates to a method of simultaneously manufacturing a plurality of electrical capacitors and to the capacitors produced thereby. Figs. l and 5 illustrate the method and the product: In Fig. 1, a glass film 10 separates a plurality of electrically conductive plate elements which comprise end portions of the teeth 16 and 18 of comb-like structures 12 and 14. Glass covers 20 and 22 complete the stacked unit. The unit is subjected to heat and pressure to form an integral mass. Portions of the teeth 16 and 18 forming the capacitor plates are embedded in the fused block portion 24 and the remainder extends from the block a distance at least twice the plate length to form leads. The illustrated unit is separated into individual capacitors by removing the transverse or “back” portion of each comb member and severing the individual capacitors from the unit as shown in Figure 5. By reducing the amount of overlap of an aligned pair of plates, capacitors may be produced with a capacitance value of 30 picofarads or less. Claim 1 is directed to the capacitor and defines the plate and lead as “integral.” Claim 5 is drawn to the method just described and specifies each comb-like structure as formed of a single metallic sheet. Claims 2 and 3 are dependent on claim 1 and claims 6 and 7 are dependent on claim 5 and include limitations to teeth that are in overlapping and non-overlapping relationship, respectively. Claim 4 is directed to the intermediate product existing just prior to removal of the “back” portion of the comb and separation into individual capacitors. Nine references were relied upon by the examiner and board in various alternative combinations. However, we find five, the patents to Rhodes, Bair, Delloye, Freeburg, and Bareiss sufficient to determine the appeal and limit our discussion thereto. Rhodes relates to a method of simultaneously manufacturing a plurality of capacitors of a type he describes as shown in prior patents and consisting of: * -» * a plurality of thin glass sheets separated by thin metal foils which either alternately project beyond two opposite edges of the glass sheets and are embedded therebetween or have separate thin metallic ribbons or lead wires attached to said thin metal foils, which ribbons or wires project beyond said opposite edges while the metal foils are wholly embedded between said glass sheets. In Rhodes’ illustrated example, separate metal foil plate elements with wire leads spot welded thereto are disposed on each side of an intermediate glass strip. Additional outer strips of glass and glass covers complete the assembly. The stacked elements are then subjected to heat 'and pressure to fuse them into an integral block with the two leads for each capacitor extending from opposite sides of the block. The block is then separated into individual capacitors. Bair is one of the prior patents referred to by Rhodes in the passage quoted above. Bair employs metallic foil plate elements and teaches that the capacitance varies with the extension of those elements inwardly from the edge of the glass block. Delloye discloses a condenser which includes overlapping plate forming sheets that are fused within a mass of glass. Delloye states that “[t]he metallic sheets, networks, or conducting deposits are provided with terminal lugs,” which lugs extend out of the mass and serve as leads. Freeburg discloses a method of manufacturing a plurality of wafer-like capacitors wherein leads are attached to a carrier wire in spaced relationship to form an integral comb-like structure and the carrier wire is later severed from the leads. Bareiss relates to forming grid assemblies for thermionic tubes. Thin metallic sheets are stamped to provide a plurality of spaced parallel grid elements held together by uncut back portions at both ends. A number of the sheets are then mounted in alignment in spaced parallel relationship and the elements are secured together by fusing spaced support sheets of glass to their respective ends. The back portions of the sheets are then sheared off to leave an integral grid assembly of spaced and aligned elements. OPINION Appellant argues that the requirement that the leads be “integral” with the plate elements distinguishes from any structure requiring the attachment of leads. We do not agree. Appellant’s specification does not expressly restrict the meaning of “integral” to “one piece” and such a meaning is wholly irreconcilable with the recitation in claim 1 of “a vitreous case surrounding and integrally united with the capacitor unit so formed” (emphasis added). As indicated by the board, “integral” is sufficiently broad to embrace constructions united by such means as fastening and welding. See Henderson v. Grable, 339 F.2d 465, 52 C.C.P.A. 920 (1964). Turning to Delloye, we think that a person skilled in the art would interpret that reference as disclosing that each plate and its lead is made from a single sheet. Moreover, that the art makes no such distinction as appellant urges is apparent from the above quote from Rhodes referring to “thin metal foils which project beyond the glass sheets” as an alternative to “separate thin metallic ribbons or lead wires attached to thin metal foils.” Appellant further relies on his variance of overlap of the capacitor plates, including zero overlap, the provision of a lead portion twice the length of the plate portion, and the use of a comb-like structure with later removal of the “back” of the comb. However, the disclosure in Bair of the effect of varying the positioning of plate elements on capacitance clearly suggests that the overlap be varied to adjust the capacitance. Appellant cites no different or unexpected result in the selection of a particular length for the leads which thus appears to be no more than an obvious matter of choice. Freeburg and Bareiss disclose the employment of a transverse carrier or “back” as a common expedient to insure maintenance of spaced relationships. While Bareiss discloses a grid rather than a capacitor, its intermediate product (Fig. 14) includes one-piece metallic sheets, which in effect are “comb-like” with the addition of a second back portion at the ends of the teeth, mounted for subsequent severance of the “back” portions. For the foregoing reasons, we affirm the decision of the board. Affirmed. . Patent No. 3,310,392, issued March 21, 1967. . Patent No. 2,526,704, issued October 24, 1950. . Patent No. 887,598, issued May 13, 1908. . Patent No. 2,953,840, issued September 27, 1960. . Patent No. 2,395,835, issued March 5, 1946. . Appellant introduced affidavits of two experts in the employ of Corning Glass Works, the apparent assignee of the present application, interpreting the Bair patent and urging that plate elements described as of “metal foil” in that patent would be only 250 micro-inches thick and extend from the block only %2 of an inch in actual practice. Neither Bair’s disclosure nor appellant’s claims, however, are limited to any particular thickness for the plates or leads.

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60 CCPA NORTHAM WARREN CORP., Alltransport, Inc., et al., Appellants, v. The UNITED STATES, Appellee. Customs Appeal No. 5455. United States Court of Customs and Patent Appeals. March 22, 1973. Barnes, Richardson & Colburn, New York City, Attys. of Record, for appellants. E. Thomas Honey, David O. Elliott, New York City, of counsel. Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Herbert P. Larsen, New York City, for United States. Before MARKEY, Chief Judge, RICH, BALDWIN, and LANE, Associate Judges, and CLARK, Justice, (Ret.), sitting by designation. RICH, Judge. This appeal is from the decision and judgment of the United States Customs Court, First Div., 65 Cust. Ct. 584, C.D. 4142 (1970), overruling a protest against the classification of certain importations from the Netherlands of “pearl essence” pigment, containing 0.15 percent of a coal tar derivative known as “Tinopal PCRP,” pursuant to paragraph 27(a)(4), (5) of the Tariff Act of 1930, as modified by T.D. 52739, which provides for mixtures in part of any of the coal tar products provided for in paragraph 27(a). We affirm. The importation consists primarily of “pearl essence,” a pigment which has been extracted from fish and fish scales and is used to give opacity and brightness to certain types of paint, varnish, lacquer, and cosmetics. The imported merchandise was used in making nail polish. Appellants concede that Tinopal is a coal tar derivative useful as an optical brightener. Tinopal, in the form used in the importation here, Tinopal PCRP, contains a phthalic ester derived from the coal tar derivative “phthalic acid” identified in paragraph 27(a)(1) of the Tariff Act of 1930. Paragraph 27(a)(4), (5), as modified by T.D. 52739, reads: All mixtures, including solutions, consisting in whole or in part of any of the products provided for in subdivision (1), (2), or (3) of paragraph 27(a), Tariff Act of 1930 (except sheep dip and medicinal soaps, and except products chiefly used as assistants in preparing or finishing textiles) . . . 3%^ per lb. and 25% ad val. Paragraph 28(i) reads: Any article or product which is within the terms of paragraph 1, 5, 37, 39, 60, 66, 82, or 1687, as well as within the terms of paragraph 27, 28, or 1651, shall be assessed for duty or exempted from duty, as the ease may be, under paragraph 27, 28, or 1651. Appellants claim that the small amount of Tinopal in the importations ought not to require classification of the goods within paragraph 27(a)(4), (5), basing their argument upon the maxim de minimis non curat lex. Without this small amount of Tinopal the classification would be provided for eo nomine as “pearl essence” under paragraph 66 of the Tariff Act of 1930, as follows: Paragraph 66, as modified by T.D. 54108: Pigments, colors, stains, and paints, including enamel paints, whether dry, mixed, or ground in or mixed with water, oil or solutions other than oil, not specially provided for: •» a * * * -x- Pearl essence . . . 11% ad val. Appellants contend that the importations should be as “pearl essence” within paragraph 66 despite the small amount of the coal tar derivative therein. Appellants summarize their argument by stating the issue narrowly as follows: Did the very small amount of a coal tar derivative present in the imported mixture, in the quantity of a fraction of a percent, fulfilling no commercial function, not affecting the character or use of the mixture, not detected by the importer, and not called for by the importers’ specifications, operate to affect the tariff classification of the imported merchandise? The Customs Court held that the de minimis doctrine did not operate to take the importations out of the strict wording of paragraph 27(a)(4), (5) because the amount of Tinopal present in the imported merchandise, albeit very small, was shown by the evidence to be “sufficient to perform a function as an optical brightener” in the pearl essence and the evidence “does not permit any conclusion other than that its introduction in the importation was deliberate.” As the Customs Court saw it, the cases which deal with the de minimus rule provide that these factors are determinative of the legal issue. Appellants quarrel not so much with the legal basis for the Customs Court decision as with the question whether there is substantial evidence to support the findings that Tinopal performs a functional role as an optical brightener and was present in the importation in a quantity sufficient to perform a useful function. We find that the evidence fully supports these findings by the Customs Court, which are not clearly contrary to the weight of the evidence. United States v. F. W. Myers & Co., Inc., 45 CCPA 48, C.A.D. 671 (1958). Appellants rely upon the following testimony of one Dr. Lauffer, a retired cosmetic chemist then serving as a consultant (emphasis ours): Q. In your opinion, Doctor, could that have added any desirable property to the pearl essence that Bonda sold to Northam? A. No. Q. Would it contribute to the product, or in any way improve the product that it ultimately was used in? — namely, the nail polish. A. No. Q. Doesn’t that addition enhance the commercial quality of a product? A. No, not in our application, in my opinion. We didn’t ask for Tinopal to be used, and we never saw the need of it in the nail polish. Q. Was not this particular merchandise ordered pursuant to specific specifications? A. Yes, there were specifications, but none of them called for addition of any optical brightener. •x- -x- -x- -x- -x- * Q. What function, if any, would it have performed in the nail polish? A. I assume from information I have on Tinopal that it would increase the whiteness of the film produced by the lacquer. Q. In the product, in the final product? — I am speaking now of the product that you made: the nail polish. A. Yes, Yes. If it had any effect whatever, it would be a brightening of the, of the white appearance of the lacquer — but that was not an effect that we were particularly desirous of producing. We were buying the pearl for its scintillation, not for its whiteness. If we wanted to make a white lacquer we would have used an opaque white pigment. Dr. Lauffer also testified, in reviewing his earlier testimony when recalled for redirect, that the small quantity of Tinopal “would be functioning for its purpose of being an “optical brightener” and stated (emphasis ours): A. * * * I didn’t intend to say that it couldn’t act as an optical brightener. What I did say, I believe, was that we did not ask to have an optical brightener included, and we didn’t especially want that effect in our lacquer. Q. Isn’t it possible, sir that that is what you got? A. Oh, it may be, but I don’t know why it was added', I don’t know why it would have been added for any other reason, but we did not ask for it to be added for that reason. We find the evidence supports the Customs Court’s findings that Tinopal functioned as an optical brightener and was present in a quantity sufficient to perform a useful function. The testimony is replete with assertions that the Tinopal was neither requested as an addition to the imported pearl essence nor needed to produce the particular nail polish product which was made using the imported material, but customs duty is assessed upon ingredients of the goods imported, not according to the motives of the originators of the merchandise abroad or the usefulness of the properties imparted by those ingredients to the importer. In the Customs Court, as well as here, appellants alleged that E. Fougera & Co. v. United States, 49 Treas. Dec. 986, C.D. 41632 (1926) is support for their proposition that the language “in part of” in paragraph 27(a)(4), (5) is not intended to encompass so insubstantial an ingredient as the 0.15 percent Tinopal. The Customs Court accepted “that case as authority for excluding from consideration minute quantities of coal tar derivative ingredients which do not participate in the primary functional role of the mixture” but distinguished the case on its facts because in Fougera the coal tar derivative ingredient present as 0.07 or 0.44 percent of the imported medicinal preparations did not perform a medicinal function, whereas in “the instant case * * * the coal tar derivative ingredient performed a function affecting the appearance of a product whose appearance is part of its functional role and in which said ingredient is present in a quantity sufficient to do its work.” We agree with this distinction. Appellants argue before this court that the language of Fougera that the phrase “in part of” means “to a substantial part in a commercial sense” (emphasis ours) requires a different result when the commercial quality of the ultimate nail polish produced from the pearl essence is not enhanced by the Tinopal. We do not find this argument persuasive. The decision and judgment of the Customs Court is affirmed. Affirmed.

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In re Dale M. KOHLER and Martin F. Littmann. Patent Appeal No. 8871. United States Court of Customs and Patent Appeals. April 12, 1973. Rehearing Denied July 26, 1973. John W. Melville, Charles H. Melville, Gibson R. Yungblut, Cincinnati, Ohio, Melville, Strasser, Foster & Hoffman, Cincinnati, Ohio, of record, for appellant. S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents; Raymond E. Martin, Washington, D. C., of counsel. Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges. MARKEY, Chief Judge. This appeal is from the decision of the Board of Appeals, adhered to on reconsideration, affirming the rejection of all the claims of appellants’ application, serial No. 583,459, filed September 30, 1966, for “Production of Cube-on-Edge Oriented Silicon-Iron,” as unpatentable under 35 ILS.C. § 103. We reverse. THE INVENTION The invention relates to a method of producing cube-on-edge oriented silicon-iron sheet or strip for magnetic purposes. Claim 1 is illustrative: 1. In a method for producing cube-on-edge silicon-iron having a silicon content of from about 1.8% to about 4% and processed by steps including hot rolling to intermediate gauge, cold rolling to final gauge, decarburizing and annealing whereby to effect secondary recrystallization favoring growth of cube-on-edge nuclei by grain boundary energy, the improvement comprising in combination therewith the step of heating said silicon-iron having an oxygen content no greater than .0045% to a temperature of from 2100° F. to not more than 2400° F. immediately prior to said hot rolling step. At the time of this invention, use of the well-known procedure outlined in the preamble of claim 1 entailed heating the slab or ingot of silicon-iron to temperatures as high as 2550° F. prior to the hot rolling step. It was disclosed by Littmann (co-inventor here) and Heck in U. S. Patent 2,559,340 that improved magnetic properties resulted from heating at this point to the highest temperature possible without “burning,” i. e. from 2300° to 2550° F. Use of these extremely high temperatures, however, was attended by serious disadvantages. As pointed out in appellants’ specification, the most significant was slag formation at temperatures above about 2400° F., requiring periodic shutdown of the furnace for slag removal. Appellants’ contribution lies in the discovery of a relationship between the initial oxygen content of the silicon-iron and the requisite temperature in this heating step prior to hot rolling. They have found that if the oxygen content is no greater than .0045% (preferably .0030%), the heat treatment can be conducted at a temperature of from 2100° to 2400° F. (preferably 2300° to 2400° F.) and result in an end product having magnetic properties equivalent to those previously attained by the use of the highest possible temperatures. Appellants have agreed that all of the claims must stand or fall with claim 1, wherein this basic concept is set forth. Accordingly, we confine our review to the rejection of claim 1. THE DECISION BELOW The prior art relied upon consists of Littmann et al. (Littmann) and Boni et al. (Boni) . Both patents are the property of the assignee of the present application. As mentioned, Littmann is directed to processes for producing cube-on-edge oriented silicon steel wherein heating prior to hot rolling involves the use of temperatures up to 2550° F. The various processes to which this preliminary treatment is said to be applicable include those having the present combination of hot rolling, cold rolling, decarburizing and annealing steps. Appropriate starting materials are described simply as “silicon steel in general having a silicon content of about 2.5 to 4.0%.” No particular oxygen content is disclosed. The key to the patentees’ invention is stated thusly: * * yye have found that excellent results may be attained by heating the slabs to temperatures lying substantially between 2300° F. and about 2550° F. with the emphasis on the higher temperatures for better results. Those results are specified as an “enhancement of the perfection of the preferred orientation and hence a higher permeability in the rolling direction.” Permeability is a measure of effectiveness as a path for magnetic lines of force. Boni discloses a method for the production of silicon-iron having a low oxygen content, i. e., .0040% or less. It is further taught that said silicon-iron can “by known rolling and annealing steps” be converted into cube-on-edge oriented stock with “improved magnetic properties.” The present specification readily acknowledges the Boni process as a means for obtaining the required starting material. Claim 1 was rejected as unpatentable under 35 U.S.C. § 103 over Littmann in view of Boni. From the combined teachings of the references, the examiner considered it “ * * * obvious to one of ordinary skill in the art to process the silicon steel of Boni et al. according to the process of Littman et al. * * Appellants’ use of temperatures of 2100° to 2400° F. was not found to be “patentably inventive” because of the explicit teaching of Littmann that temperatures in the range of 2300° to 2400° F. were operable, although higher temperatures were preferred. The absence of a teaching of any relationship between oxygen content and heating temperature was considered “not relevant to the issue of obviousness.” Nor was the case for patentability found to be given any support “where the new or improved results clearly appear to be due solely to the quality of the material used.” In sustaining the rejection, the board stressed that: * * * The fact that commercial use of the Littmann et al. process has been carried out at the upper end of the 2300-2550° F. range in no way affects the disclosure of this reference * * *. OPINION We find it appropriate to combine the teachings of Littmann and Boni, in view of the specific statement in the latter that this low oxygen content material could be processed by known methods for producing cube-on-edge oriented stock. Hence it would be at least prima facie obvious to subject such a starting material to a heat treatment employing temperatures of 2300° to 2550° F. prior to hot rolling. Anticipated advantages inherent in the use of this particular silicon steel in the Littmann process would not suffice to overcome the oN viousness of the combination. But we cannot adopt the position taken by the Patent Office that treatment of the Boni product by the Littmann process is all that is involved in the present invention. Due consideration must be given to the relationship set forth in claim 1 between the oxygen content of the starting material and the temperature required in the heat treatment prior to hot rolling. Appellants have presented objective evidence in the specification (Table 1) indicating that products having substantially equivalent permeability values can be obtained whether the heat treatment is carried out at 2100° F., 2400° F. or 2500° F., provided the oxygen content is very low. This evidence cannot be ignored. There is nothing in the record before us to contradict it. The possibility of avoiding slag formation without affecting the quality of the final product is indeed significant and makes the present invention more than merely a treatment of the Boni product by the Littmann process. The only question remaining is whether such a relationship would have been obvious to one of ordinary skill in view of the teachings in the cited prior art. All the disclosure in a reference must be evaluated for what it fairly teaches, not just the preferred embodiments. See In re Snow, 471 F.2d 1400 (CCPA 1973); In re Boe, 355 F.2d 961, 53 CCPA 1079 (1966). Yet we find no suggestion in either Littmann or Boni of appellants’ invention. The entire Littmann disclosure is directed toward the correlation of improved permeability with the highest possible temperature prior to hot rolling. No teaching in Boni has been pointed out by the Patent Office which would cause one to question the applicability of this correlation to a low oxygen content material. We agree with appellants that the obvious treatment of the Boni material would be at the highest possible temperature without burning according to the Littmann process. Accordingly, it was error to hold the claimed subject matter obvious in view of the prior art. The decision of the board is reversed. Reversed. . “Burning” is defined in the patent as “a progressive intergranular disintegration probably due to oxidation or to the migration of intergranular substances or both, and usually occurs in the neighborhood of 2600° F. in an oxidizing atmosphere.” . U.S. 2,599,340, issued June 3, 1952. . U.S. 3,305,354, issued February 21, 1967 (filed December 17, 1964).

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60 CCPA ASSOCIATED HOBBY MFRS., INC., Appellant, v. The UNITED STATES, Appellee. Customs Appeal No. 5500. United States Court of Customs and Patent Appeals. April 5, 1973. Allerton deC. Tompkins, New York City, of record, for appellant. Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Joseph I. Liebman, New York City, for the United States. Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Associate Judges, and CLARK, Justice, retired, sitting by designation. BALDWIN, Judge. This appeal is from the decision and judgment of the United States Customs Court, dismissing appellant’s protest concerning the classification of imported sets containing miniature plastic figures and certain accompanying items. The court’s description of appellant’s Exhibit 1 sufficiently conveys the nature of the merchandise: Exhibit 1, identified as the “Guards Band,” has on the front of the cardboard box an illustration of five marching bandsmen of the British Guard’s Band dressed in ceremonial uniform. On the back of the box is an illustration of the band leader, and next to that a statement that “[t]his set consists of 44 [¶] and OO scale figures, suitable for use with the Air-fix [¶] & OO Trackside series, and are completely finished with the exception of painting.” The contents of the box consist of 44 miniature figures of uniformed musicians playing various * * * musical instruments.2 These figures are complete except for the drummers for whom eight miniature drums are included — each of which can be snapped into place on the appropriate drummer figure. The court’s footnote 2 pointed out that “[a]s imported, the individual pieces contained in each set are attached in groups of 9 to 13 to a plastic bar called a ‘sprue’!” The merchandise was classified as other toy figures of animate objects (except dolls), not having a spring mechanism, and not stuffed, under item 737.40, TSUS, as modified, T.D. 68-9. Appellant contends that the proper classification of the merchandise should have been as “ [construction kits or sets with construction units prefabricated to precise scale of the actual article,” under item 737.09, or as articles of plastic, not specially provided for, under item 774.60. Upon consideration of the record in this ease and appellant’s arguments, we are in complete agreement with every aspect of the Customs Court’s opinion save one. The court pointed out that appellant’s witness testified that “the sets are made as precisely to [¶] scale, which is in the ratio of 87 to 1, as present-day technology makes possible.” After determining that the merchandise did not fit within the meaning of the term “construction kits or sets" as it is used in item 737.09, the court stated: Also militating against classification of the imports as “construction kits or sets with construction units prefabricated to precise scale of the actual article” is that plaintiff failed to establish that the imported articles were, in fact, made to the “precise scale” of the actual articles. Indeed, examination of the samples indicates to the contrary. For example, checking a few of the samples, the Japanese infantrymen in plaintiff’s exhibit 6 measure approximately Nieth of an inch — which would mean that at the [¶] scale of 87:1 the actual Japanese infantrymen so depicted would be 6’9y%" tall! And although plaintiff’s witness testified that the Japanese figures were slightly smaller than the American figures, many of the American paratroop figures in plaintiff’s exhibit 8, as illustrated, likewise measure %th of an inch, thus depicting American paratroopers of the same heights as the Japanese infantrymen, i.e., 6'9%". It may well be that the actual scale of the figures is significantly different from 87 to 1. But considering the fact that an error in measurement of the figures of i/leth of an inch would result in a calculated error of the height of the original subject of well over 5 inches, we are not convinced that the figures are not made on some “precise scale” within the meaning of the statute. As appellant points out, “[u]nder TSUS 737.09 there is no specific scale required for classification thereunder — [¶] or otherwise — so long as it is made to a ‘precise scale.’ ” In our view, the remaining findings of the Customs Court are fully supported by the record, and its conclusion that appellant had failed to establish the correctness of either of its claimed classifications is clearly correct. Accordingly, the decision and judgment are affirmed. Affirmed. . 67 Cust.Ct. 391, C.D. 4302 (1971).

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INCOME TAX SERVICE COMPANY, Appellant, v. E. Bruce FOUNTAIN, dba Income Tax Services Company, Appellee. Patent Appeal No. 8863. United States Court of Customs and Patent Appeals. April 5, 1973. Ronald A. Jacks, Washington, D. C., attorney of record, for appellant. Harris Zimmerman, Oakland, Cal., attorney of record, for appellee. Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge. RICH, Judge. This appeal is from the decision of the Patent Office Trademark Trial and Appeal Board, abstracted at 166 USPQ 285 (1970), granting appellee’s petition to cancel appellant’s registration No. 848,369, issued April 30, 1968, for the service of preparing income tax statements. Appellant’s registered mark consists of “ITS” on a green oval background and claims a date of first use of December 1, 1965. The petition to cancel under 15 U.S.C. § 1064, filed Dec. 16, 1968, was predicated upon the damage to appellee as prior user of the mark “ITS” and a design for income tax accounting services. We affirm. Facts Appellee, E. Bruce Fountain, has himself been in the business of preparing income tax returns in California and Oregon under the name of Income Tax Services Company since January 1, 1964, when he acquired the business from one Ziegelhofer. Ziegelhofer acquired the business from MacNeil in 1950. Mae-Neil had a registration of a dissimilar mark containing the “ITS” logo, No. 534,122, issued November 28, 1950, which was allegedly conveyed to Zigelhofer with the business, although no reference was made to the mark in the bill of sale, nor any assignment recorded under the provisions of 15 U.S.C. § 1060. In 1956, MacNeil’s registration was can-celled for failure to file an affidavit of continuing use under 15 U.S.C. § 1058. Appellant, Income Tax Service Company, a Michigan corporation, in the business of preparing income tax returns throughout several states, obtained the registration of the trademark “ITS” which is the subject of this appeal, claiming first use of the mark Dec. 1, 1965. Appellant’s witness, Rizik, who signed the application for registration as president of appellant, testified that he had been using the mark for “at least another five or seven, ten years before that” date of claimed first use, but no evidence was proffered to establish such earlier use. The Board’s Decision The board granted the petition to cancel appellant’s registration, noting that The testimony for the petitioner is clear, documented and convincing of the fact that, through a predecessor-in-title, petitioner has used the “ITS” logo since as early as 1950. On the other hand, respondent’s testimony is vague and lacking in conviction and on the basis thereof, respondent is entitled, at best, to a date of December 1, 1965, as the earliest use of its mark. The board then answered appellant’s contention that appellee “has been derelict because he failed to file a notice of opposition after publication” of appellant’s mark, waiting instead until seven and one half months after the registration issued, noting that giving effect to any such waiver would be inconsistent with the specific statutory provision that a petition to cancel may be filed within five years from the date of registration of the mark. (15 U.S.C. § 1064). In answer to appellant’s assertion that it was “now the owner of a registered mark in which it has made a substantial investment” and it would be unjust to cancel the registration, the board expressed the opinion that any such investment was made after appellant had notice of appellee’s assertion of prior rights in the mark and was thus made at its peril. Appellant’s Arguments Here Appellant’s arguments before this court are more equitable than legal. (See 15 U.S.C. § 1069). No challenge is made to the facts found by the board, such as appellant’s right to rely, at best, upon the date of first use alleged in his application, or the legal conclusion that there is a likelihood of confusion when the marks are applied to income tax services. Appellant tells us in its brief that the “ultimate issue” is whether appellee’s petition for cancellation “is barred by the equitable defenses of estoppel or abandonment.” Abandonment came about, appellant asserts, because, among other things, appellee Fountain acquired from his predecessor, Zigelhofer, only the common law right in the mark because no assignment of MacNeil’s original registration was ever recorded and the registration was later cancelled for failure to file an affidavit of continuing use, thus at least implying appellee’s intent to abandon the mark. Estoppel, appellant claims, bars appellee’s petition to cancel because, coupled with the alleged abandonment stemming from the above facts, appellee or his predecessor failed to protect the common law right they acquired, neither applying for a new registration nor taking other affirmative action within a reasonable time, whereas, appellant took “every measure required of a reasonable man, including a diligent search for similar marks and ultimate registration” and “expended substantial sums to expand the' business throughout the country.” Appellant complains that business dealings between the parties, shown by Rizik’s testimony, were such that appellee first “deluded appellant into thinking that he was interested in becoming a franchisee” of appellant, “then offered to sell its mark and business name” to appellant, and only instituted the cancellation action “after appellant refused to ‘bargain’ by paying tribute in this manner * * OPINION We must disagree with appellant’s arguments insofar as they ask us to apply the equitable factors of abandonment and estoppel. Apart therefrom, there is an unchallenged legal basis for the board’s decision. It is unchallenged that appellant is entitled at best to a date of December 1, 1965, as the earliest date of use of the mark “ITS” and also unchallenged is the board’s finding that since 1964 Fountain “actively engaged in the business of tax consultant services under the ‘ITS’ logo * * * ” This prior use of the mark “ITS” is sufficient basis for the granting of the petition to cancel, such use being almost two years prior to the earliest use of the mark proved by appellant. As to the equitable considerations, we do not find appellant’s argument based upon abandonment to be appropriate since all of the facts which allegedly resulted in appellee’s having abandoned the mark took place prior to the earliest date of use relied upon by appellant and there is no question that appellee was continuously using the mark from a time at least two years before the filing of the petition to cancel. Appellant’s estoppel argument is based in part upon the conduct of appellee’s predecessor in title with respect to the prior mark and in part on the allegedly unfair business treatment it received from appellee who dickered with appellant in September, 1968, without telling appellee about his right to seek cancellation of appellant’s trademark, coupled with appellant’s alleged reliance thereon, to its detriment, in having “expended substantial sums to expand the business throughout the country.” With respect to the latter, the board pointed out that insofar as the record shows, any investment which appellant may have made was after it had notice of appellee’s assertion of prior rights in its mark. Appellant has pointed to no testimony or evidence in the record which would controvert this finding by the board and we have been unable to find any. Accordingly, the appellant has not proved any reliance which would support the application of the principles of estoppel. See Ralston Purina Co. v. Midwest Cordage Co., Inc., 373 F.2d 1015, 54 CCPA 1213 (1967). The judgment of the Trademark Trial and Appeal Board is affirmed. Affirmed.

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Application of Guenter M. KUEHL. Patent Appeal No. 8815. United States Court of Customs and Patent Appeals. March 22, 1973. James F. Woods, New York City, attorney of record for appellant. Oswald G. Hayes, Raymond W. Barclay, New York City, John F. Witherspoon, Arlington, Ya. (Stevens, Davis, Miller & Mosh-er), Arlington, Va., of counsel. S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. Joseph F. Nakamura, Washington, D. C., of counsel. Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges. RICH, Judge. This appeal is from the decision of the Patent Office Board of Appeals affirming the examiner’s rejection for obviousness under 35 U.S.C. § 103 of claims 11, 12, and 13 in appellant’s application serial No. 651,108, filed July 5, 1967, entitled “Crystalline Aluminosilicate and Method of Preparing the Same.” We reverse. The Invention Appellant describes his. contribution to the “Useful Arts.” as a single invention or discovery having three aspects: (1) Appellant has discovered and synthesized a novel zeolite identified by the symbol ZK-22 and described more fully by the following allowed claims of appellant’s application: 1. A solid crystalline aluminosilicate having the composition, in its dehydrated form, expressed in terms of approximate mol ratios of oxides as follows: 1. 0±0.2 [(1-x) [ca>)4 N]2 0:xM2 0]:A12 02:YSi02:ZP2 05 wherein M is selected from metal cations and positive ions and n is the valence thereof, Y is between about 2 and 7 and Z is between about .0.01 and Y + 2, said crystalline aluminosilicate 48 being capable of selectively sorbing straight chain hydrocarbons if the number of thermally stable cations per unit cell is 10 or less from admixture of the same with non-straight chain hydrocarbons. 6. A solid crystalline aluminosilicate according to claim 1, wherein the tetramethylammonium ion is substantially replaced by hydrogen. Claims 1-4, 6, and 7 directed specifically to the zeolite composition stand allowed. (2) The second aspect of appellant’s invention is the method for making ZK-22, and the Patent Office has also allowed claims in this application directed thereto. (3) What appellant describes as the third aspect of his discovery is the subject matter of this appeal: claims 11, 12, and 13, directed to a hydrocarbon conversion process which involves the use of appellant’s novel zeolite as a catalyst to crack hydrocarbons. Appealed claim 11 reads: 11. A hydrocarbon conversion process which comprises contacting a hydrocarbon charge under catalytic cracking conditions with the composition of claim 6. Claims 12 and 13 also call for cracking of hydrocarbons with the new zeolite catalyst material, differing only in the specific form of the zeolite catalyst employed. Instead of cracking being performed with the catalyst in a hydrogen form pursuant to claim 11, cracking according to claims 12 and 13 is performed with the catalyst in the rare earth metal form. Claims 12 and 13 are also both dependent upon allowed claims to the zeolite composition in this application. Appellant concedes that claims 12 and 13 stand or fall with our disposition of claim 11. The Rejection and the Issues The sole rejection of the appealed claims is for obviousness under 35 U.S.C. § 103 in view of a single reference, Frilette patent No. 3,033,778, issued May 8, 1962, which discloses the cracking of hydrocarbons using crystalline aluminosilicate zeolite catalysts which are similar to but patentably different from ZK-22 zeolite. Appellant admits that his zeolite is “useful in the cracking of hydrocarbons employing generally the same temperatures, liquid hourly space velocity and ratio of catalyst to hydrocarbon charge” taught by Frilette. The examiner rejected the appealed claims “as the obvious use of the catalyst for the conversion of hydrocarbons.” In his Answer, the examiner further stated that “Applicant has not shown by comparative results with such crystalline alumino silicate that he obtains unexpected results and it is in [the?] view of the Examiner that in the absence of such a showing applicant is not entitled to the use claims for the cracking of hydrocarbons.” (Emphasis ours.) The board noted that the examiner’s rejection of the claims as being directed to the obvious use of the claimed aluminosilicate was “necessarily under 35 U. S.C. § 103” and agreed with the examiner that to be unobvious there would have to be a showing by appellant that the use of his admittedly novel catalyst in the hydrocarbon cracking process of Frilette gave unexpected results. The board found there was “no evidence that anything other than the usual results will be obtained when the claimed zeolites are used to crack hydrocarbons” and therefore held the appealed process claims obvious under § 103. Appellant's position is that the process is unobvious, that the contention that appellant must show unexpected results “is based upon the premise that the use claims need be patentable over the composition claims,” and that the board’s approach necessarily treats appellant’s own disclosure as “prior art” under 35 U.S.C. § 103, which it is not. Appellant contends further that he is entitled to claims directed to the process of using his ZK-22 zeolite, because the Patent Office found that zeolite to be new and unobvious, the hydrocarbon conversion process claims being just another method of expressing, with reasonable latitude, what appellant regards as his invention. Appellant’s position here is that the claims to the process of using the new and unobvious catalyst are necessarily directed to unobvious subject matter under 35 U.S.C. § 103 and therefore allowable. Appellant’s brief states: Where, as here, the crystalline aluminosilicate is itself unobvious, its use in catalysis is likewise unobvious. The Board’of Appeals has not in this case asserted obviousness of the catalyst recited in the claims, although this constitutes the sole novelty of the claimed process. Allowance by the Patent Office of all claims in this application to the crystalline aluminosilicate as a new composition of matter is tantamount to a finding [that] the catalyst is unobvious. The solicitor supports the view that the process invention is obvious in view of the teachings of Frilette since appellant has shown no unexpected result with the use of ZK-22 to crack hydrocarbons. He reasons as follows: Appellant’s allowed claims 6 and 7 specify a shape-selective zeolite catalyst. His specification describes a zeolite having a three-dimensional network structure and states that it has a crystal structure similar .to zeolite A. The A zeolites are pointed out by Frilette as members of the class of zeolites which, by virtue of their crystalline structure, are useful as catalysts for cracking hydrocarbons. In the light of what is disclosed by Frilette, appellant’s zeolite obviously is analogous to the known zeolites of that class. One skilled in the art therefore would expect it to have the same catalytic effect that the known zeolites have. Further, as pointed out by the Board * * * there is no evidence of any unobvious result obtained by using the zeolites of the allowed claims in the claimed process. With respect to appellant’s argument that the board’s decision, in treating the process claims, necessarily considers appellant’s composition as though it were old and thus prior art under 35 U.S.C. § 103, the solicitor focuses upon the language of 35 U.S.C. § 103 which speaks of “the invention as a whole.” He states that “Here, the ‘invention as a whole’ is a process. All of the evidence bearing on the obviousness of the process under section 103 must be considered.” (Emphasis supplied.) The solicitor argues that the patentability of each statutory class of invention must be independently considered on its own merits in applying the test of § 103. The solicitor continues with an explanation of the way he believes the obviousness of the appealed claims must be determined in view of several decisions of this court: Whether or not the composition of matter used as the catalyst in the claimed process is new or old is not necessarily controlling. In re Saunders et al, 33 C.C.P.A. 1001, 154 F.2d 693 [(1946)]. In Saunders, claims to a hormone pellet had been allowed in the appealed application, and this Court affirmed a rejection of claims to a method of administering the hormones by subcutaneous implantation. The Court pointed out that: Obviously, this invention was complete when the pellet was made and, given such a pellet, it could not require invention to implant it in the old manner (Emphasis * * * [by the solicitor]). A similar rationale in analogous circumstances has been sanctioned by this Court in decisions rendered after the passage of the 1952 Patent Act. See, e. g., In re Hoeksema, 51 C.C.P.A. 1474, 332 F.2d 374; In re Albertson, supra [332 F.2d 379, 51 C.C.P.A. 1377]; In re Larsen, 49 C.C.P.A. 711, 292 F.2d 531. In Larsen this Court held a process to be obvious even though it produced an unobvious product. In Albertson, this Court, citing Larsen, held a process to be obvious even though both the final product and the starting material were unobvious. Finally, the solicitor takes issue with appellant's contention that “appellant’s process-of-use claims should be allowed because he is entitled to ‘reasonable latitude’ in claiming what he regards as his invention.” The solicitor states that the reasonableness of claiming latitude was properly determined by the board’s finding that process of use claims are a “reasonable restatement of the invention if the process of use reflects an unexpected utility of the allowed composition.” OPINION The arguments of both appellant and the solicitor make much of the facts that there are allowed claims in the application to the zeolite and that the appealed claims represent the method of using the zeolite, a different statutory class of invention. Appellant states as a broad proposition that the allowance of the composition claims here necessarily entitles him to claims in the same application directed to the method of using the zeolite, which the Patent Office found to be a new and unobvious composition of matter. We think this proposition is too broadly stated. See In re Albertson, 332 F.2d 379, 51 C.C.P.A. 1377 (1964). The unobviousness of the herein claimed method of cracking hydrocarbons using ZK-22 must be judged by applying to the facts of this case the statutory standard for unobviousness of § 103. In Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S.Ct. 684, 694, 15 L.Ed.2d 545 (1966), the Supreme Court construed the § 103 standard of obviousness as follows: Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. The issue here concerns primarily the meaning of the terms “prior art” and “subject matter as a whole” in § 103, and specifically whether appellant’s zeolite composition is in any way to be considered as “prior art” for the purposes of applying the statute. Appellant says that the board’s decision holding the claims to the method of using the zeolite obvious in view of Frilette “necessarily utilizes as ‘prior art’ appellant’s own disclosure” of the zeolite. To the extent that the board may have affirmed the examiner’s view that the process claims represented “the obvious use of the [ZK-22] catalyst for the conversion of hydrocarbons,” this appears to be the case. The examiner’s language does appear to treat incorrectly the ZK-22 zeolite as part of the prior art. The correct application of the test of § 103 requires that the claims on appeal not be judged against any prior art other than Frilette., In In re Prater, 415 F.2d 1393, 56 C.C.P.A. 1381 (1969), we considered the meaning of the “subject matter as a whole” as well as the fact that § 103 requires consideration of obviousness “at the time the invention was made.” Discussing the invention, we said “The invention includes both a method and apparatus.” In considering the obviousness of apparatus claim 10, we said: Appellants’ discovery, discussed in the second paragraph under the heading “THE INVENTION,” supra, is, it seems to us, part of their contribution to the art. On that basis, appellants’ discovery should be considered as part of “the subject matter as a whole’’ and not part of the prior art. It is conceded by the Patent Office that that discovery is both new and unobvious. Thus, based on the record before us, we do not perceive any reasonable basis for concluding that “the subject matter as a whole,” as defined by apparatus claim 10, would have been obvious at the time of appellants’ invention. We have carefully considered the basic position of the Patent Office that it would be obvious to program a general-purpose digital computer to practice appellants’ invention and that apparatus claim 10 reads on such a computer, as well as the disclosed analog device. We find that position fatally defective in that it, in effect, assumes the existence as prior art of appellants’ discovery * * *. Perhaps today, after reading appellants’ disclosure, the public dissemination of which the patent system fosters and encourages, it might be obvious to program a general-purpose digital computer to practice the invention. But 35 U.S.C. 103 requires an analysis of the prior art at the time the invention was made to determine whether the invention was obvious. Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Assuming the existence, at the time of the invention, of general-purpose digital computers as well as typical programming techniques therefor, it is nevertheless plain that appellants’ invention, as defined in apparatus claim 10, was not obvious under 35 U.S.C. 103 because one not having knowledge of appellants’ discovery simply would not know what to program the computer to do. See Ex parte King, 146 USPQ 590 (Pat.Off.Bd.App.1964). [415 F.2d at 1405, 56 C.C.P.A. at 1397-1398.] Similarly here, the process “invention as a whole” includes the use of the ZK-22 zeolite and one having no knowledge thereof would not find it obvious to crack hydrocarbons using it as a catalyst. To the extent, therefore, that the examiner and the board held appellant’s process-of-use invention to a more stringent standard of unobviousness by requiring appellant to show unexpected results in the use of ZK-22, as compared to the use of other zeolites in cracking hydrocarbons, in order to be “entitled to the use claims,” we consider that they erred. The only prior art of record is Frilette and we must therefore determine the obviousness or unobviousness of the process invention in view of the disclosure of this reference. Unobviousness in View of Frilette Frilette discloses a class of crystalline zeolites useful as catalysts for cracking hydrocarbons, and described as crystalline metal aluminosilicates, known as molecular sieves, which have catalytic capabilities by virtue of their three-dimensional network structure made up of unit cells and a “geometric selectivity” dependent upon the relationship between the diameter of ports in the zeolite’s crystal structure and the diameters of the reactant and product molecules. Frilette specifically teaches molecular sieves of the “A” series as being members of the class of zeolites which are useful as catalysts for cracking hydrocarbons. ZK-22 is not so similar to the zeolites of the “A” series identified by Frilette as to render the use of ZK-22 to crack hydrocarbons, albeit in the manner used by Frilette, obvious to one of ordinary skill in the art. ZK-22 is not a homologue, isomer, or chemical analogue of series “A” zeolites. Nor do Frilette’s teachings of zeolites broadly define a class, the knowledge of which would render ZK-22 or its use as a catalyst obvious. Furthermore, the differences therebetween appear significant. As appellant’s specification correctly notes, ZK-22 has a higher “silica to alumina mol ratio,” and “contains intercalated phosphate when crystallized from its reaction mixture.” All of these differences are uncontradieted by the Patent Office, the solicitor maintaining only generally that: The A zeolites are pointed out by Frilette as members of the class of zeolites which, by virtue of their crystalline structure, are useful as catalysts for cracking hydrocarbons. In light of what is disclosed by Frilette, appellant’s zeolite obviously is analogous to the known zeolites of that class. One skilled in the art therefore would expect it to have the same catalytic effect that the known zeolites have. Not only are the zeolites of series “A” structurally different from appellant’s ZK-22, but the test is not whether one “would expect it to have the same catalytic effect that the known [series “A”] zeolites have,” but whether it would have been obvious to one skilled in the art to use ZK-22 to crack hydrocarbons. The Prior Cases As noted earlier, the solicitor contends that prior decisions of this court are controlling on the facts here. He maintains that In re Saunders, 154 F.2d 693, 33 C.C.P.A. 1001 (1946), and In re Albertson, 332 F.2d 379, 51 C.C.P.A. 1377 (1964), mandate affirmance. Saunders was decided prior to the 1952 Act, which inserted § 103 into the statutory law for the first time and made it clear that the test is obviousness of the invention as a whole to a person of ordinary skill in the art at the time the invention was made. Saunders, moreover, does not rest upon the firmest foundation. Of the six cases cited therein for the broad proposition relied on that “where an old method or process is used by an applicant in the administration of a new and analogous material, and the improved result is due solely to the quality of the material used, no inventive or patentable process is involved in what the applicant has done,” four of these eases dealt with a situation where the claimed process was a method of making, not using, the allegedly new material: In re Williams, 87 F.2d 499, 24 C.C.P.A. 861 (1937); In re Dreyfus, 65 F.2d 472, 20 C.C.P.A. 1204 (1933); In re Truslow, 104 F.2d 203, 26 C.C.P.A. 1292 (1939); and In re Williams, 89 F.2d 674, 24 C.C.P.A. 1175 (1937). The other two cases are In re Laughlin, 48 F.2d 921, 18 C.C.P.A. 1239 (1931) and In re Haller, 87 F.2d 520, 24 C.C.P.A. 887 (1937). Laughlin was a double patenting case, not an obviousness case. Haller involved a rejection for “lack of patentability in view of the patent to Baekeland.” This case does seem to support the broad proposition of Saunders as argued here. However , it should be noted that Haller et al.’s novel resin composition, which was used in the impregnation process claimed, was not claimed in the application on appeal but had been patented previously. Today in that situation we too would have problems with that case, but from a double patenting standpoint — giving Haller et al. a patent on a method of using their patented composition without a terminal disclaimer to prevent extension of the monopoly of the patent on the composition. The case here is different, however, since the method-of-use claims are in the same application with the composition claims and they will all expire together. Returning to Saunders itself, we think the case no longer represents viable law to the extent that it supports the broad proposition that the obviousness of process claims drawn to a method of using a composition is determined by asking, in the fashion of the court in Saunders, whether “given” the composition the claimed process of use would be obvious. The test under § 103 is whether in view of the prior art the invention as a whole would have been obvious at the time it was made, and the prior art here does not include the zeolite, ZK-22. The obviousness of the process of cracking hydrocarbons with ZK-22 as a catalyst must be determined without reference to knowledge of ZK-22 and its properties. So judged, the process of the appealed claims would not have been obvious. The solicitor also asserts that a rationale similar to that he finds in Saunders has been sanctioned by this court in decisions rendered after the effective date of the 1952 Act in “analogous circumstances.” The alleged analogous circumstance is where the court or the Patent Office has found that a composition or product is new and unobvious but has refused to allow claims to the process for making the unobvious product. The cases are In re Larsen, 292 F.2d 531, 49 C.C.P.A. 711 (1961); In re Hoeksema, 332 F.2d 374, 51 C.C.P.A. 1474 (1964); and In re Albertson, supra. The solicitor maintains by this reasoning that the claims calling for a process using an unobvious composition ought to be treated identically with claims calling for the process of making an unobvious composition. We disagree. The test of unobviousness is a statutory test and requires comparison of the invention with the prior art in each case, whether the invention be a process for making or a process of using, or some other process. We fully agree with the solicitor that “each statutory class of claims must be considered independently on its own merits” and likewise feel that each category of process claims must be similarly considered. No one rule controls them all. While there may be some distinction between the Larsen line of cases which deal with the obviousness of a process of making a composition and the Saunders ease, the principal opinion in Larsen also appears to have erroneously approached the § 103 obviousness question by asking whether “given the idea of the compound” (our emphasis) the process for making it is obvious (see MPEP § 706.-03 (q)). To this extent, at least, Larsen and its progeny, Hoeksema and Albert-son, are inconsistent with the statutory standards of § 103. Secondly, we do not read Larsen as ruling that an applicant cannot have claims to the method of making an admittedly novel product, but only that such an applicant does not get such claims just because the product is new and unobvious. In In re Neugebauer, 330 F.2d 353, 51 C.C.P.A. 1138 (1964), we considered the obviousness of claims for a method of making an electrophotographic material by a single step coating process, where claims were allowed to the electrophotographic material. The court considered the claimed invention in view of the’prior art cited and held the invention obvious. In Neugebauer, Larsen was relied upon to controvert an allegation of the appellant there that the fact that he had allowed claims to the electrophotographic material entitled him to claims to the method of making it. We said: We agree with the board. Appellants’ coating process appears to be conventional and therefore obvious. The fact that the final product is novel is not controlling of obviousness of the method. In re Larsen * * *. We say the same thing here, noting that allowability of the composition claims does not mandate reversal of the § 103 rejection. In re Albertson, supra, is not inconsistent, that case stating the general proposition that “We must consider ‘the differences between the subject matter sought to be patented and the prior art’ under 35 U.S.C. 103.” The solicitor correctly states that “In Albertson, this Court, citing Larsen, held a process to be obvious even though both the final product and the starting material were unobvious.” The process invention there, however, was characterized as reducing the new starting material, A, with a well-known agent for reducing any compound having the characteristic reducible group, which the starting material had. The Albertson holding does not imply that all such processes are necessarily obvious, only that on the facts there and in view of the prior art of record the invention was obvious. The opinion says: Even though no one ever produced A before, we are not satisfied that it is unobvious to reduce A with a standard reducing agent to produce reduced A. No reaction conditions are recited in the claims. No manipulative steps are claimed other than what is embodied in the word “reacting,” which is used in all of the claims. The results obtained by reacting with alkali metal aluminum hydride are entirely expected and obvious. Only the predicted reduction takes place. We do not agree with appellant’s proposition that the “use of an unobvious starting material renders a process unobvious.” Were this true, every step, for example, dissolving or heating, when performed on a new compound would result in a patentable process. We reiterate that all of the evidence must be considered on the “subject matter as a whole,” from the viewpoint of one skilled in the art, in the determination of obviousness, and not simply the patentability of one of the starting reactants in a process. In view of the prior art, we see nothing unobvious in reacting the compounds of the allowed claims with a reducing agent to produce the reduced derivatives. [332 F.2d at 381, 51 C.C.P.A. at 1381.] We note that in the present ease the novel catalyst, ZK-22, is not merely itself reduced by a well-known reducing agent but itself catalyzes the hydrocarbon charge in the claimed process, a result that was not predictable until appellant had made his invention. Finally, the solicitor takes issue with appellant’s contention “that his process-of-use claims should be allowed because he is entitled to ‘reasonable latitude’ in claiming what he regards as his invention.” Appellant maintains that “hydrocarbon conversion” is “the very purpose behind research directed to the synthesis of novel catalyst substances” and that the method-of-use claims represent part of what “applicant regards as his invention.” (See 35 U.S.C. § 112, second paragraph.) The solicitor says the question here “is what is a reasonable restatement of the invention” and he concludes, with the board, that the proeess-of-use claims are a reasonable restatement only “if the process of use reflects an unexpected utility of the allowed composition.” We disagree with both premise and conclusion. The rejection here is under § 103 and the obviousness of the claimed process does not depend upon whether the claims are “a reasonable restatement of the invention.” We have concluded, for reasons stated above, that the process-of-use claims are patentable and that it was not necessary to show unexpected utility in order to show unobviousness. We would add, moreover, that in our view it is in the public interest to permit appellant to claim the process as well as the product. The result is to encourage a more detailed disclosure of the specific methods of using the novel composition he has invented in order to have support for the process claims. We believe the constitutional purpose of the patent system is promoted by encouraging applicants to claim, and therefore to describe in the manner required by 35 U.S.C. § 112, all aspects of what they regard as their inventions, regardless of the number of statutory classes involved. The dependent claims on appeal to the use of the new zeolite in the same application with the composition claims do not materially increase the scope of protection of his inchoate patent property under 35 U.S.C. § 154, which already includes the right to exclude others from making, using, or selling the composition by allowance of claims thereon, but they do tend to increase the wealth of technical knowledge disclosed in the patent by encouraging description of the use aspects of his invention in the manner required by 35 U.S.C. § 112, paragraph 1. For the foregoing reasons, the rejection of claims 11, 12, and 13 is reversed. Reversed. . The application states that it is a “continuation-in-part of copending application Serial No. 523,936, filed February 1,1966, which is in turn a continuation-in-part of Serial No. 294,229, filed July 11, 1963, and now abandoned.” . U.S.Const. art. I, § 8, clause 8. . This statute reads as follows: § 103. Conditions for patentability; non-obvious subject matter A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made. . Further, the claims at issue covered a method for treating metal castings and the appellant had a patent on a method of treating car wheel metal castings. . The court in JIaller said : It appears to us that appellants have merely used a product invented by them, and for which they have received a patent, and have impregnated material with such a product, followed by steps of elimination of acid, washing and drying disclosed by Baekeland. We can see nothing inventive in merely bringing material to be impregnated into contact with appellants’ new product. While the decisions of the Patent Office tribunals are not very clear upon this point, we construe them to mean that, regardless of any differences between appellants’ process and that of the reference Baekeland, there was no invention involved in the use of appellants’ novel product, followed by conventional steps to eliminate the mineral acid, washing, and drying. (Emphasis ours.) . In re Saunders has been cited by this court five times, all prior to the 1952 Act, but we do not believe any of the cases citing it support the solicitor’s position on the facts here. In re Haney, 158 F.2d 296, 34 CCPA 767 (1946); In re Teter, 158 F.2d 1007, 34 CCPA 797 (1947); In re Gardner, 164 F.2d 363, 35 CCPA 753 (1947); In re Freedlander, 168 F.2d 535, 35 CCPA 1209 (1948); and In re Craige, 189 F.2d 620, 38 CCPA 1114 (1951). In Craige, for example, this court quoted what it referred to later as the “rule of the Saunders case” as follows: It is further well settled that the substitution of a new and analogous material in an old method or process does not render the process patentable where the improved result is due solely to the quality of the material used. In re Saunders et al. * * *. The court then went on to do exactly what we do here, that is, apply the art cited to determine if the method claim was obvious thereover. In doing so, even without the guidance of § 103 of the 1952 Act, the court found that the compositions used in the method of the claim were not only homologues and analogues of prior art compounds, and themselves unpatentable where separately claimed, but that the method of use invention was obvious. The converse is true here where the Frilette reference does not teach a homologous or analogous relationship of ZK-22 to the prior art such as might make the composition, let alone the method, obvious to one skilled in the art.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Application of Thomas Ellis DAVIES and Hubert Brian Hopkins. Patent Appeal No. 8836. United States Court of Customs and Patent Appeals. April 5, 1973. Bernd W. Sandt, Midland, Mich., attorney of record, for appellants. S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. Fred E. McKelvey, Washington, D. C., of counsel. Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN, and LANE, Judges. ALMOND, Senior Judge. This is an appeal from the decision of the Patent Office Board of Appeals sustaining the examiner’s rejection of claims 1-11 and 13-23, all the claims in appellants’ application entitled “Improved Polystyrene.” In their brief before this court, appellants “abandoned” their appeal insofar as it concerns claims 1-6, 8-11 and 14-18. Accordingly, the appeal is dismissed as to those claims. Claims 7, 13 and 19-23 remaining in the case stand rejected as unpatentable under 35 U.S.C. § 103. For reasons appearing hereinafter, we affirm. Appellants’ invention relates to so-called “toughened styrene polymers.” According to their specification, such polymers are made by polymerizing styrene with a comonomer, if desired, in the presence of a suitable toughening agent. This agent, a preformed rubbery polymer, is dissolved in the monomeric styrene and comonomer, if used, and the resulting solution is polymerized by a suitably initiated free radical process. The process is carried out in such a way that the bulk of the styrene and comonomer are polymerized to form a solid matrix of either a homopolymer or co-polymer of styrene in which discrete particles of the rubber employed as a toughening agent are dispersed. A minor portion of the styrene is said to react with the rubber in a manner which cross-links the latter. The appealed claims are limited to compositions in which the toughening agent is a rubbery copolymer of styrene and butadiene wherein at least 30 percent of the butadiene portion is in the “cis” configuration. Claim 7 is representative : 7. A composition comprising a major proportion of a styrene polymer selected from the group consisting of homopolymers and copolymers of styrene and copolymers of the nuclear methyl substituted styrenes having a softening point greater than 70°C., and as a toughening agent a minor proportion of a butadiene/styrene copolymer containing a major proportion by weight of polymerized butadiene units in which at least 30% of the polymerized butadiene units have the formula: the stereo configuration about the double bond is cis. The repeating polymer unit derived from butadiene is in the cis configuration as shown in the claim, frozen there by the carbon-carbon double bond. Butadiene can polymerize in two other possible configurations, shown below, designated “trans” and “vinyl.” The other appealed claims are in dependent form, all but one of which ultimately depends from an abandoned claim. The limitations added by them are not relevant to our discussion of this case. The examiner and board relied upon six references in reaching their conclusion that the invention was obvious. They are: Appellants concede that the references make out a prima facie case of obviousness with regard to employing the co-polymer toughening agent defined by the claims. Nevertheless, they urge that the claims are patentable in view of alleged unexpected properties found for the new compositions. These include improved mechanical properties such as tensile strength, impact strength, elongation and the like, as well as improved gloss, transparency and processability. It is further alleged that improvement in mechanical properties is normally at the expense of gloss, transparency and processability and vice versa. Therefore, to achieve improvements in both sets of properties is unexpected. Amos discloses that homopolymers and copolymers of styrene can be toughened by polymerizing the corresponding monomer (s) in the presence of any rubber soluble in the monomer(s) chosen. Enumerated toughening agents include copolymers of butadiene and styrene but there is no mention of a butadiene polymer having a specific cis content. Greene describes polymers of butadiene and similar monomers which contain a “predominant” portion of polymerize monomers in the cis form. An example is directed to the preparation of a copolymer of butadiene and styrene, but the cis content of the polymer is not given. The reference does not disclose that these polymers can be used as toughening agents. Baum discloses that styrene can be polymerized in the presence of rubbery polymers, including butadiene-styrene copolymers, but attributes improved clarity of the product to the specific mode of polymerization employed. This reference does not indicate that the butadiene rubbers used should have a specific cis content. Lunk discloses that toughened styrene polymers have improved properties if the toughening agent is a butadiene rubber in which the cis content is at least about 90%. He does not disclose that butadiene copolymers of high cis content can be employed as toughening agents. The Schramm patent suggests that butadiene rubbers of high cis content (75% or more) can be used to strengthen products of a graft polymerization. According to appellants’ specification, a graft polymerization is similar to the process described for toughening styrene. Foster discloses rubbery butadienestyrene copolymers having a cis content of at least about 29% which appellants concede would include the toughening agents of their invention. However, their use in this manner is not suggested by the reference. Claim 7 was rejected as obvious over the combination of Lunk with Schramm and Foster. All the claims were rejected in view of the six references relied upon. The board summarized these rejections in this way: In essence, the Examiner holds that it would be obvious (35 U.S.C. § 103) to use the polybutadienes of Foster or Greene as the rubbery modifiers in the styrene compositions of Baum or Amos et al. This holding does not require reliance on Schramm or Lunk. However, the Examiner further holds that the latter patents suggest improvements in properties if butadienes of higher cis-1,4 content are used as modifiers. We agree, and appellants concede, that a prima facie case of obviousness has been established which must stand unless sufficient rebuttal evidence is offered. From the references cited, it is clear that a process for toughening polystyrene employing a butadiene-styrene copolymer was known to the prior art. It was also known that a homopolymer of butadiene having a high cis content could be used to achieve improved properties. Therefore, if there were no evidence to the contrary, we are of the opinion that it would be proper to conclude that it would have been obvious to employ a butadiene-styrene copolymer of the type claimed as a toughening agent for polystyrene. Because the prior art suggests that the improved properties obtained using polybutadienes of high cis content as a toughening agent are attributed to that content, appellants assert that one skilled in the art might conclude that improved properties could also be achieved using the copolymers claimed by them. Presumably it is their view that this artisan would expect a lesser improvement because the styrene content would dilute the effect of the butadiene portion of the toughening agent in a degree proportional to the relative amount of each. The ultimate conclusion appellants would have us reach is that the improvements in properties alluded to above, i. e., the combination of improved mechanical properties plus improved gloss, transparency, and processability, are unexpected ones and are sufficient to rebut the prima facie obviousness established by the prior art. Appellants are correct in their belief that prima facie obviousness can be rebutted by evidence of unexpected properties. In re Papesch, 50 CCPA 1084, 315 F.2d 381, 137 USPQ 43 (1963). In this case, much of appellants’ evidence of unexpected properties, and particularly that relating to improvements in gloss, transparency and processability, was presented to the Patent Office in the form of affidavits summarizing tests made after the application was filed. The board objected to much of this evidence on technical grounds. However, it refused to consider that portion of those affidavits showing improved gloss, etc., for the reason that these advantages were not disclosed in the application as originally filed. The board’s authority for this was this court’s decision in In re Herr, 50 CCPA 705, 304 F.2d 906, 134 USPQ 176 (1962). We believe the board’s decision is well founded. In reaching this conclusion, we note that appellants’ speification indicates that mechanical properties of the toughened polymer are improved whenever a rubber containing butadiene of high cis content is used. The specification makes no attempt to indicate that the copolymers as now claimed are preferred over homopolymers of butadiene. In fact, the claims eventually abandoned were directed to polystyrene toughened by butadiene homopolymers. These claims were abandoned in the face of the prior art cited by the examiner. Apparently it was only in the face of the rejections based on this art that appellants were moved to attempt to distinguish the properties obtained using the copolymer as a toughening agent versus using a homopolymer of butadiene. Appellants urge that their affidavits should be considered notwithstanding the fact that the properties in question were not disclosed in their original application. They correctly point out that the opinion in Herr does not say that evidence of undisclosed properties cannot be offered. Instead it quotes In re Lundberg, 45 CCPA 838, 253 F.2d 244, 117 USPQ 190 (1958), for the proposition that in such a case if “that advantage is not disclosed in appellant’s application” he is “not in a favorable position to urge it as a basis for the allowance of claims.” Appellants find support for the proposition that Herr does not absolutely preclude introduction of undisclosed properties as evidence of unobviousness in the decisions of this court in In re Zenitz, 52 CCPA 746, 333 F.2d 924, 142 USPQ 158 (1964) and In re Khelghatian, 53 CCPA 1441, 364 F.2d 870, 150 USPQ 661 (1966). However, we think their reliance upon those cases is misplaced. In Zenitz and Khelghatian the court accepted evidence of undisclosed advantages that “would inherently flow” from what was disclosed in the specification. We do not feel a similar situation exists here as we are of the view that the basic property or utility must be disclosed in order for affidavit evidence of unexpected properties to be offered. See In re Lorenz, 51 CCPA 1522, 333 F.2d 908, 142 USPQ 101 (1964). It is difficult to see how one skilled in the art could conclude that the unexpected properties of improved gloss, transparency and processability find a basis in or inherently flow from the disclosure in the application that the toughened polystyrene has improved mechanical properties such as impact strength and the like. In the first place, the specification equates the effect of the homo-polymers and copolymers of butadiene having a high eis content as toughening agents, where as appellants now attempt to point out their differences. In the second place, appellants’ own argument in support of patentability is that it is unexpected to achieve both improved mechanical properties and improved gloss, etc., since it is the prior art experience that improving one set of properties came at the expense of the other. Therefore, it can hardly be said that there is a disclosure of the basic properties of gloss, transparency or ease of processability in the disclosure that the compositions have improved mechanical properties. The specification discloses that the toughened polystyrene, whether the toughening agent is a homopolymer or copolymer of butadiene, can be used wherever “moldings are required to bear loads, e. g., refrigeration liners.” Particularly in view of the fact that the specification equates the homopolymers and copolymers as toughening agents, we do not consider this to be a statement of utility sufficiently clear to insure that others would be led to observe the improved properties which appellants now urge in support of their claims. We think it necessary to note that there is no specific statutory requirement that compels an applicant to disclose all properties of chemical compounds or compositions in his application. Insofar as the statute is concerned, the only disclosure requirements are defined in the first paragraph of 35 U.S.C. § 112. There is no § 112 rejection in this case and, therefore, we assume that the specification satisfies the requirement that it describe the invention adequately to enable one skilled in the art to make and use it. In effect, the holding of the board is an evidentiary ruling which must be supported, if at all, on considerations other than statutory requirements. Therefore, to be valid such a ruling must be supported by an interest strong enough to compel a recognition that, in at least certain cases, the disclosure requirements of § 112 are not the maximum that can be demanded in an application. The solicitor, in his brief, suggests that the reason evidence of undisclosed properties should be excluded can be grounded upon public policy. In his view, if evidence such as that presented by appellants were allowed, patents would be granted without the necessary quid pro quo of disseminating the knowledge in that essential evidence to the public. That argument is weakened, however, by the fact that the evidence upon which nonobviousness is based does become public as a part of the available file history when the patent issues. Nevertheless, the public will derive the most benefit from a patent when it discloses on its face those properties or utilitarian advantages which were ultimately persuasive on the question of nonobviousness. However, when, as here, an applicant has satisfied the requirements of § 112, we would be reluctant to require him to disclose more unless it could be done without prejudice to him. But if the applicant can be required to include the properties in his specification without prejudice to him, a compromise is reached upon which the evidentiary ruling can be based. We think such a compromise is possible as we see no impediment to the present appellants’ refiling their application and incorporating a discussion of the allegedly unobvious properties while retaining the effective date of the application involved here through § 120. That section requires that the prior application comply with the conditions set forth in the first paragraph of § 112 as regards the invention claimed in the later application. See Martin v. Johnson, 59 CCPA 769, 454 F.2d 746, 172 USPQ 391 (1972). As we have already-noted, appellants’ application has ostentibly met the requirements of § 112 as no rejection has been made based upon that section. Since the subject matter to be claimed in a subsequently filed application would be identical to that claimed here, the later application would be entitled to the benefit of the filing date of the application we now consider. See In re Kirchner, 49 CCPA 1234, 305 F.2d 897, 134 USPQ 324 (1962). We certainly do not think the newly disclosed properties alter the subject matter sought to be patented. In view of the fact that we agree with the board that the affidavit evidence relating to the after-discovered properties should not be considered in this case, the case of prima facie obviousness established by the references is not rebutted. Accordingly, the decision of the board is affirmed. Affirmed. . Serial No. 851,660, filed July 7, 1967 as a continuation-in-part of application serial No. 89,-938 filed February 17, 1961. . Typically a polymer of butadiene -will contain at least some of each of the three types of repeating units. By varying the method of polymerization, one can be caused to predominate over the others.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

ESTATE of Mary F. Colton PARK, Detroit Bank and Trust Company, Administrator with Will Annexed, Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. No. 72-1710. United States Court of Appeals, Sixth Circuit. Argued Dec. 14, 1972. Decided March 21, 1973. James E. Beall, Detroit, Mich., on brief, for appellant. Charles Anderson, Washington, D. C., for appellee; Scott P. Crampton, Asst. Atty. Gen., Tax Div., Dept, of Justice, Washington, D. C., on brief. Before WEICK, PECK and MILLER, Circuit Judges. WILLIAM E. MILLER, Circuit Judge. This is an estate tax case in which the petitioner, the Detroit Bank and Trust Company, as administrator with will annexed, of the Estate of Mary F. Colton Park, challenges the Internal Revenue Commissioner’s determination, as affirmed by the Tax Court, that certain expenses incurred in the administration of the estate are not deductible under 26 U.S.C. § 2053(a) (1971). The petitioner challenges the Commissioner’s determination on the grounds that the regulations issued under 2053(a) (on the basis of which the claimed deductions were disallowed) are invalid, and that in any event the petitioner properly complied with them. For reasons set out below we hold that the Commissioner was in error and that the decision of the Tax Court must be reversed. The basic facts are not in dispute. The Detroit Bank and Trust Company is the duly appointed administrator with will annexed of the estate of Mary F. Colton Park. The decedent died testate on March 1, 1968, and her will was admitted to probate on March 8, 1968. At the time of her death she owned two houses, one a residence located in Grosse Pointe Farms, Michigan (the residence), and the other a cottage located in Sanilac County, Michigan (the cottage). Her probate estate consisted of: The residence and the cottage passed to the decedent’s four surviving sons under the residuary clause of her will. The four sons determined that they were not interested in retaining these properties and requested the administrator to sell them. The administrator was given the full power in the will to sell real estate. The cottage was sold on August 1, 1968, for $25,000. A $10,000 down payment was made and the remainder was to be paid in monthly installments of $150. In connection with this sale, $1,935 in expenses were incurred. The residence was sold on March 24, 1969, for $53,000. $50,000 was paid in cash, with the balance to be paid directly to the heirs. The petitioner incurred $2,350.30 in expenses in connection with this transaction. On September 16, 1968, the petitioner made a partial distribution from the estate to the four sons of $14,000. On April 7, 1969, the petitioner made another partial distribution to the sons of $40,000. As of the date of decedent’s death the following were the claims against the estate: The probate court in the annual accountings filed on March 1, 1969, and March 1, 1970, approved the deductions from principal of the estate for the following : The administrative expenses listed in the probate accountings included the expenses incurred for property taxes and maintenance costs for the two properties, aggregating $2,237.88. Other items approved by the Probate Court as administrative expenses consisted of the amounts incurred in selling the properties, principally brokerage fees. These expenses, aggregating $4,285.30, were disallowed by the Commissioner and this ruling, challenged here, was affirmed by the Tax Court. Section 2053(a) provides that “administration expenses” are deductible “as allowable by the laws of the jurisdiction, whether within or without the United States, under which the estate is -being administered.” Treasury Regulation 26 C.F.R. § 20.2053-3(a) provides: (a) In general. The amounts deductible from a decedent’s gross estate as “administration expenses” of the first category (see paragraphs (a) and (c) of § 20.2053-1) are limited to such expenses as are actually and necessarily incurred in the administration of the decedent’s estate; that is. in the collection of assets, payment of debts, and distribution of property to the persons entitled to it. The expenses contemplated in the law are such only as attend the settlement of an estate and transfer of the property of the estate to individual beneficiaries or to a trustee, whether the trusted is the executor or some other person. Expenditures not essential to the proper settlement of the estate, but incurred for the individual benefit of the heirs, legatees, or devisees, may not be taken as deductions. Administration expenses include (1) executor’s commissions; (2) attorney’s fees; and (3) miscellaneous expenses. Each of these classes is considered separately in paragraphs (b) through (d) of this section. Treasury Regulation, 26 C.F.R. § 20.-2053-3(d)(2) provides in part: (2) Expenses for selling property of the estate are deductible if the sale is necessary in order to pay the decedent’s debts, expenses of administration, or taxes, to preserve the estate, or to effect distribution. The phrase “expenses for selling property” include brokerage fees and other expenses attending the sale, such as the fees of an auctioneer if it is reasonably necessary to employ one. The Tax Court concluded that the petitioner failed to carry its burden of proof that the expenses incurred in the sale of the property were “necessary” for the administration of the estate, to pay debts or taxes, to preserve the estate, or to effect distribution, relying upon the regulations quoted above. It reasoned that the sale of the real estate was for the sole benefit of the beneficiaries and not deductible. Although the Tax Court did not pass directly on the validity of the regulations here involved, it had previously sustained their validity in Estate of David Smith v. Commissioner, 57 T.C. 650 (1972). On appeal the petitioner relies primarily on the dissent expressed in the Smith ease. The petitioner argues that the regulations impose an invalid and impermissible restriction on the availability of a deduction provided in the Internal Revenue Code. Because Michigan law allows these expenses to be charged against the probate assets, Congress, it is argued, has determined under § 2053(a) that they should be deductible for federal estate tax purposes as well. The respondent relies on the majority approach expressed in Smith, to the effect that the provisions of § 2053(a) establish only a threshold consideration. When state law fails adequately to coincide with federal estate tax policies, as reflected in the Treasury Regulations, then the deduction should not be allowed. Cf. Pitner v. United States, 388 F.2d 651 (5th Cir. 1967). Consequently, the regulations are valid and must be complied with in order for the expenses to be deductible. In Estate of David Smith v. Commissioner, supra, a sculptor died possessing various art works, valued in excess of four million dollars. Some of these art works were sold in order to satisfy claims against the estate, while others were sold in order to fund certain trusts established for the artist’s daughters. The Tax Court disallowed the expenses for the sale of the art works whose proceeds were used to fund the trusts. The court reasoned: The clause “as are allowable by the laws of the jurisdiction * * * under which the estate is being administered,” contained in section 2053(a), establishes a threshold and not an exclusive condition; the requirements of respondent’s regulations must also be satisfied. Pitner v. United States, 388 F.2d 651, 659-660 (C.A.5, 1967); Estate of Christine Swayne, supra [43 T.C. 190]. Compare Estate of James S. Todd, Jr., 57 T.C. 288 (1971), where we held that the claimed expense had both been allowed by the Probate Court and was necessarily incurred to preserve the estate. Compare also Dauphin Deposit Trust Co. v. McGinnes, 208 F.Supp. 228, 237-238 (M.D.Pa.1962), affirmed on another issue 324 F.2d 458 (C.A.3, 1963), and In re Bartlett’s Estate, 153 F.Supp. 674, 678 (E.D.Pa.1957), both of which rested on a presumption of “necessity” under Pennsylvania law. Clearly, there was no necessity under the will to sell the sculptures beyond the point necessary to discharge funeral and administration expenses and claims. Indeed, the will itself contemplated a distribution of the sculptures in kind to the trusts for the benefit of Smith’s daughters. Smith was under no obligation to support his daughters after his death nor were his executors under any such obligation. In re Garcy’s Trust, 19 A.D.2d 811, 243 N.Y.S.2d 464 (1st Dept. 1963). The trust was the vehicle for support and, if cash were necessary for that purpose, the trustees, not the executors, were the ones required to make the decision to sell and it is they who would have incurred the concomitant obligation to pay [the broker] its commission. To the extent that the executors made decisions to sell in order to provide support money, they were acting on behalf of the trust and not on behalf of the estate. Cf. Sharpe’s Estate v. Commissioner, 148 F.2d 179, 181 (C.A.3, 1945). 57 T.C. at 661. We find this reasoning unpersuasive. First, it appears to have been recognized in this Circuit that the deductibility of an expense under 2053(a) (or its predecessor) is governed by state law alone. Union Commerce Bank v. Commissioner, 339 F.2d 163 (6th Cir. 1964); Goodwin’s Estate v. Commissioner, 201 F.2d 576 (6th Cir. 1953). Second, the law of Michigan has elaborate statutory provisions for the administration of estates and the responsibilities of fiduciaries. These duties include the responsibility to defend and preserve the estate's assets. See, e. g., Mich. Com piled Laws Ann. § 704.1 et seq. (1968). Michigan statutes also establish that certain specific expenses are allowable as charges against the probate assets, an example being attorney’s fees for the administrator. Mich. Compiled Laws Ann. § 704.33 (1968). The estate is under the supervision of the probate court during the probate period and annual accounting are required. Mich. Compiled Laws Ann. § 704.38 (1968). By the literal language of § 2053(a), Congress has left the deductibility of administrative expenses to be governed by their chargeability against the assets of the estate under state law. As otherwise stated, Congress has committed to the considered judgment of the states whether a particular expense is allowable as a proper or necessary charge against estate assets. In the situation before us, the expenses were admittedly allowable under Michigan law. They were paid out of probate assets and they were approved in two different accountings filed with the probate court. Hence they are deductible under § 2053(a). The respondent would have us distinguish between what is necessary for the estate and what is for the individual benefit of the beneficiaries. We decline to draw such a distinction, primarily because it is not warranted by the wording of § 2053(a). Also the distinction is untenable because any action that benefits the estate will also in effect benefit the beneficiaries. The real estate was non-income producing property. It represented a drain on the estate’s other assets. A prudent fiduciary should be and perhaps is required to prevent the loss of probate assets when it may safely be avoided. If the fiduciary on the basis of his sound judgment, as approved by the probate court, feels that the estate would benefit by the sale of the real estate (regardless of the wishes of the beneficiaries) the availability of the deductions under § 2053(a) should not be denied because the respondent does not deem the sale to have been necessary. In view of our disposition of the case, we do not reach the petitioner’s argument that the regulations were complied with. Accordingly, the judgment of the Tax Court is reversed, and the action is remanded to that court with instructions to enter an order allowing the deduction for the claimed expenses under § 2053(a). . The Tax Court’s opinion is reported at 57 T.C. 705 (1972). . The respondent does not question that these expenses are proper claims to be paid out of estate assets under Michigan law. . The respondent also relies on the fact that the regulations have remained substantially unchallenged since they were promulgated in 1919. Congress has reenacted § 2053(a) a number of times since 1919 in substantially the same form. The reasons that the regulations have been infrequently challenged appears to us to be speculative at best, and their longevity is not a persuasive factor where the statutory language is clear and unambiguous as we deem it to be in this case. . The respondent’s reliance on Pitner v. United States, 388 F.2d 651 (5th Cir. 1967), appears to ns to be misplaced.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellant, v. Ralph G. HERSHBERGER et al., Defendants-Appellees. No. 72-1416. United States Court of Appeals, Tenth Circuit. March 13, 1973. William S. Estabrook, III, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen.; Meyer Rothwacks and Richard W. Perkins, Attorneys, Tax Div., Dept, of Justice), Washington D. C., for plaintiff-appellant. Thomas A. Wood, Wichita, Kan., for defendants-appellees Hershberger. Before HILL, McWILLIAMS and BARRETT, Circuit Judges. HILL, Circuit Judge. The United States of America appeals from a summary judgment dismissing its suit to foreclose federal tax liens against the interest of Ralph G. Hershberger in homestead property owned by him and his wife, Esther. The United States District Court for the District of Kansas, 338 F.Supp. 804, held that Esther’s homestead exemption under the laws of the State of Kansas prevented the United States from enforcing its tax lien against the homestead property. We agree. Ralph and Esther jointly own real property of less than one acre in the city of Wichita, Kansas, which they occupy as their residence. After the United States obtained judgment against Ralph on August 3, 1970, for $28,778.48 in unpaid taxes for the years 1946 through 1967, the government undertook to satisfy its tax lien by selling this homestead property. Esther asserted her ownership of the property and her occupancy of the property as a homestead, claiming that the property and her interest therein were not subject to foreclosure and sale. Esther declares she is entitled to the peaceable possession of the property so long as she occupies it as a homestead. Appellant expounds three arguments in support of reversal. First, §§ 6321 and 7403 of the Internal Revenue Code allow the government to foreclose its tax lien on all real and personal property belonging to the delinquent taxpayer. Second, under Kansas law Esther Hershberger does- not have an undivided one-half interest in the homestead property, and therefore cannot object to the tax foreclosure sale. Finally, although state law is applied in determining the property interest, state law cannot operate to bar the enforcement of federal tax liens. The government first argues that federal law authorizes tax liens and tax foreclosure sales. Appellant contends that 26 U.S.C. § 6321 allows the government a lien on all real and personal property. Once this lien is established, 26 U.S.C. § 7403 authorizes a sale of the property to satisfy the delinquent taxpayer’s debt; We agree that § 6321 imposes a lien upon delinquent taxpayer’s real and personal property, but it does not necessarily follow' that § 7403 requires the courts to satisfy this lien via a tax foreclosure sale. Section 7403(c) states in part that courts “may decree a sale of such property.” As the court emphasized in United States v. Boyd, 246 F.2d 477 (5th Cir. 1957), cert. denied, 355 U.S. 889, 78 S.Ct. 261, 2 L.Ed.2d 188, it is up to the courts to decide whether to foreclose a tax lien; Indeed, broader language could hardly be suggested since the Court, Section 7403(e), is required to “ . proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property. . . .” As though this were not enough, Congress, presumably conscious of the purpose of the change, amended the Act, 49 Stat. 1648, Sec. 802, to substitute the word “may" for “shall” in the predecessor to Section 7403, so that it now reads “. . . in all cases where a claim or interest of the United States therein is established, [the Court] may decree a sale of such property . . . and a distribution of the proceeds. . . . ” Emphasized another way, when the matter is before the court, Congress intends the court to exercise equitable powers in rendering its decision. United States v. Morrison, 247 F.2d 285 (5th Cir. 1957); United States v. Boyd, supra. Having determined that § 7403 does not compel us to automatically decree a foreclosure sale, we must turn to Kansas law to determine what property rights Esther has in the homestead property. It is appellant’s contention that Esther does not enjoy a vested property right in the homestead property, and therefore cannot object to the tax foreclosure sale. To determine whether Kansas grants the wife an undivided one-half interest in homestead property, we must look to the laws of that state. The Kansas Constitution, Article 15, § 9, allows a homestead of one acre within the city limits if occupied as a family residence. The property shall not be alienated without husband’s and wife’s joint consent. Kansas Statutes Annotated § 60-2301 (1964) is essentially a reiteration of Article 15, § 9. Kansas case law sheds light on what rights are granted under the homestead law. As emphasized in Helm v. Helm, 11 Kan. 19 (1873), the wife has an existing estate in the homestead. She therefore has a right to immediate enjoyment in the homestead property. Another case supporting this conclusion is State ex rel. v. Mitchell, 194 Kan. 463, 399 P.2d 556, 558 (1965): It suffices to say that Kansas has zealously protected the family rights in homestead property by liberally construing the homestead provision in order to safeguard its humanitarian and soundly social and economic purposes; and nothing less than the free consent of the resident owner of the homestead, and joint consent of husband and wife where the relation exists, will suffice to alienate the homestead, except under the specified exceptions provided in the constitution. A case analyzing the purpose behind adopting the homestead provision in the Kansas Constitution is West v. Grove, 139 Kan. 361, 31 P.2d 10 (1934): the manner and form in which the proposition was submitted to the electorate, warrants the conclusion that, although the provision itself uses the word “exempt,” it was intended to create and more was created than a simple exemption statute. The manner in which the homestead may be alienated is expressly stated, as are the circumstances against which the homestead right shall not prevail. It has been the settled course of the decisions of this court to construe liberally the homestead provision and not to restrict it. Accord: Iowa Mutual Ins. Co. v. Parr, 189 Kan. 475, 370 P.2d 400 (1962). The government nevertheless argues the Kansas Homestead Law does not provide Esther with a vested, undivided one-half interest in the property. The government insists there can be no vested property right in the wife because a court can divest either spouse of his or her homestead right in a divorce action. Supporting this argument the government cites Hamm v. Hamm, 98 Kan. 360, 158 P. 22 (1916). In Hamm the husband was granted a divorce from his wife. The wife was awarded the homestead subject to a lien in favor of the husband for $700. When the lien was not satisfied within the time prescribed, the court ordered the homestead property sold. We are convinced, however, that allowing one spouse to take the homestead property in a divorce action is not intended by Kansas law to imply the homestead prior to divorce was not a vested property right. As stated in Brandon v. Brandon, 14 Kan. 342 (1875): The homestead of the plaintiff is not given to a stranger, destitute of all interests and rights therein, but the homestead of the husband and wife (for it is equally the homestead of each) is, upon their separation, assigned to one of them. There would be manifest impropriety in attempting to continue it as the homestead of each after the divorce; and in awarding it to the wife the court is but choosing between conflicting interests. The next argument proffered by the government is that Esther cannot possess an undivided one-half interest because a homestead in Kansas may be sold to pay delinquent taxes. Constitution of the State of Kansas, Article 15, § 9; K.S.A. § 60-2301 (1964). Apparently there is little Kansas case law on this subject. The Kansas Supreme Court has emphasized that homestead property will be subject to tax foreclosure if the taxpayer fails to pay his taxes on the homestead property. In Re Estate of Dahn, 204 Kan. 535, 464 P.2d 238 (1970). There appears to be no case law, however, answering the question of whether a homestead can be sold to pay taxes not directly related to the homestead property. When the state law appears to be unsettled, the Court of Appeals will give great weight and credence to the federal district court’s interpretation. Binkley v. Manufacturers Life Ins. Co., 471 F.2d 889 (10th Cir. 1973); Sta-Rite Indus. Inc. v. Johnson, 453 F.2d 1192 (10th Cir. 1971), cert. denied, 406 U.S. 958, 92 S.Ct. 2062, 32 L.Ed.2d 344; Sutton v. Anderson, Clayton & Co., 448 F.2d 293 (10th Cir. 1971); Traders State Bank v. Continental Ins. Co., 448 F.2d 280 (10th Cir. 1971); Brennan v. Univ. of Kansas, 451 F.2d 1287 (10th Cir. 1971). The trial court in the instant case stated: The taxes covered by the Kansas exception must relate only to taxes arising against the property involved. At the time the term was used in the Kansas Constitution there was no such thing as income, sales, etc. type of tax by the Federal Government or the State Government. Not only that, but in addition, the tax on the homestead property was not severable against any individual homesteader. United States v. Hershberger, 338 F.Supp. 804, 808 (D.C.Kan.1972). Unquestionably the wife’s interest in the property is not subject to alienation without her consent, subject to several exceptions. Besides the tax exception, homestead property is not exempt from the payment of obligations contracted for the purchase of said premises, for the erection of improvements thereon, or for a lien given by the consent of both husband and wife. Upon analyzing the reasons for the provision granting property as a homestead, it can be determined that exceptions in the homestead law are the result of unjust enrichment to the homesteaders or voluntary alienation by the homesteaders. Logically, this philosophy would carry over into payment of taxes. Only when the homestead property does not pay its share for state protection should the court hold the homesteaders to have waived their right to constitutional protection. Otherwise the homestead law’s intent, as expounded in Morris v. Ward, 5 Kan. 239, 244 (1869), would not be effected: It [the homestead] was not established for the benefit of the husband alone, but for the benefit of the family and of society — to protect the family from destitution, and society from the danger of her citizens becoming paupers. Appellant’s final argument is that although state law is applied in determining the property interest, state law cannot operate to bar the enforcement of federal tax liens. United States v. Kocher, 468 F.2d 503 (2d Cir. 1972); United States v. Overman, 424 F.2d 1142 (9th Cir. 1970); In Re Ackerman, 424 F.2d 1148 (9th Cir. 1970); United States v. Trilling, 328 F.2d 699 (7th Cir. 1964); United States v. Heffron, 158 F.2d 657 (9th Cir. 1947), cert. denied, 331 U.S. 831, 67 S.Ct. 1510, 91 L.Ed. 1845. We do not disagree with the rule stated in the above cases; our disagreement arises in the application of the rule. As the Supreme Court emphasized in Aquilino v. United States, 363 U.S. 509, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960): [B]oth federal and state courts must look to state law [in determining to what extent the taxpayer had “property” or “rights to property” to which the tax lien could attach] for it has long been the rule that “in the application of a federal revenue act, state law controls in determining the nature of the legal interest which the taxpayer had in the property sought to be reached by the statute.” However, once the tax lien has attached to the taxpayer’s state-created interests, we enter the province of federal law, which we have consistently held determines the priority of competing liens asserted against the taxpayer’s “property” or “rights to property.” Although Aquilino dealt solely with claims of competing lienors, the rule of law therein expounded applies to our case. We have two competing claims, one by the federal government for delinquent income taxes and one by Esther for peaceful possession of the property so long as she occupies it as a homestead. Although there is an apparent conflict of authority as to whether a federal tax lien is valid upon a homestead interest, we believe resolution of the issue turns upon the nature of the interest created by state homestead laws. Homestead laws not creating a present property interest but rather conferring privileges and exemptions are subordinate to the federal tax liens. Shaw v. United States, 331 F.2d 493 (9th Cir. 1964); Weitzner v. United States, 309 F.2d 45 (5th Cir. 1962), cert. denied, 372 U.S. 913, 83 S.Ct. 727, 9 L.Ed.2d 720. But when the homestead laws expressly provide for a present property interest and confer more than merely an exemption, such as is found under Kansas law, the homestead interest is good against the federal tax lien. As our court emphasized in Jones v. Kemp, 144 F.2d 478 (10th Cir. 1944): “A wife is granted an indivisible and vested interest in homestead property, and one which cannot be subjected to levy and sale for the satisfaction of the Federal tax liability of her husband.” See also 9 Mertens Law of Federal Income Taxation, Ch. 54, at 205-207, § 54.52 (1971). Appellee owned an undivided one-half interest in the property. This interest was separate and apart from her husband and therefore precluded the homestead from being part of the husband’s estate. The undivided one-half interest is immune from seizure and sale by the government. Carter v. United States ex rel. D. I. R., 399 F.2d 340 (5th Cir. 1968). Because Esther’s homestead interest is indivisible and extends to every part of the property, she is entitled to use it as a home as long as she meets the requirements of the Kansas homestead law. While Esther is living on the property, the government may not enforce its tax lien against the homestead. Morgan v. Moynahan, 86 F.Supp. 522 (S.D.Tex.1949). Affirmed. . 26 U.S.C. § 6321 Lien for taxes. If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person. . 26 U.S.C. § 7403 Action to enforce lien or to subject property to payment of tax. (a) Filing. — In any case where there has been a refusal or neglect to pay any tax, or to discharge any liability in respect thereof, whether or not levy has been made, the Attorney General or his delegate, at the request of the Secretary or his delegate, may direct a civil action to be filed in a district court of the United States to enforce the lien of the United States under this title with respect to such tax or liability or to subject any property, of whatever nature, of the delinquent, or in which he has an'/ right, title or interest, to the payment of such tax or liability. (b) Parties. — All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto. (c) Adjudication and Decree. — The court shall, after the parties have been duly notified of the action, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court in respect to the interest of the parties and of the United States. . Constitution of the State of Kansas, Article 15, section 9. Homestead exemption. A homestead to the extent of one hundred and sixty acres of farming land, or of one acre within the limits of an incorporated town or city, occupied as a residence by the family of the owner, together with all the improvements on the same, shall be exempted from forced sale under any process of law, and shall not be alienated without the joint consent of husband and wife, when that relation exists; but no property shall be exempt from sale for taxes, or for the payment of obligations contracted for the purchase of said premises, or for the erection of improvements thereon. Provided, the provisions of this section shall not apply to any process of law obtained by virtue of a lien given by the consent of both husband and wife. . . . . For a more thorough analysis into the purpose behind adopting the homestead provision in the Kansas Constitution, see West v. Grove, 139 Kan. 361, 31 P.2d 10, at 11-12 (1934).

f2d_475/html/0682-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) and its Local 174, Plaintiffs-Appellees, v. ANACONDA AMERICAN BRASS COMPANY, Defendant-Appellant. INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) and its Local 174, Plaintiffs-Cross-Appellants, v. ANACONDA AMERICAN BRASS COMPANY, Defendant-Cross-Appellee. Nos. 72-1818, 72-1819. United States Court of Appeals, Sixth Circuit. Argued Feb. 5, 1973. Decided March 28, 1973. Timothy D. Wittlinger, Detroit, Mich., for appellant; Thomas E. Coulter, Hill, Lewis, Adams, Goodrich & Tait, Detroit, Mich., on brief. M. Jay Whitman, Detroit, Mich., for appellees; Stephen I. Schlossberg, John A. Fillion, Detroit, Mich., on brief. Before PHILLIPS, Chief Judge, and PECK and MILLER, Circuit Judges. PHILLIPS, Chief Judge. This litigation under § 301 of the Labor-Management Relations Act arose out of the permanent shutdown of two departments of the Anaconda Brass Co., Inc., at Detroit on August 30, 1971. Anaconda had a pension plan agreement which had been executed in addition to its collective bargaining agreement with the appellee labor, union. The pension plan agreement provided that any employee under age 65 who shall have been “laid off because of a permanent shutdown of any operation, department or subdivision thereof may elect to retire . . . and receive a ‘75/80’ pension” if the employee had reached his 55th birthday with a stipulated minimum of continuous service with the company. The agreement also provides for “75/80” pension benefits to certain employees under 55 years of age with a stipulated minimum of continuous service. The text of the language in controversy is quoted in the opinion of District Judge John Feikens reported at 340 F.Supp. 651. His findings of facts and conclusions of law are made an appendix to this opinion. Reference is made to the reported opinion of the District Judge and to his findings of fact and conclusions of law (appendix hereto), for a more complete recitation of facts. Thirty-two employees affected by the permanent shutdown met the qualifications for the 75/80 pension and requested early retirement. The company contended that they could not retire under the early retirement plan, and had only two choices: (1) to quit; or (2) to use their seniority to “bump” other employees with less seniority in other departments which had not been shut down. Faced with these alternatives, the thirty-two employees “bumped” other employees under protest, and this litigation followed. Also involved in the suit are the rights of a number of other employees affected by the shutdown, in addition to the thirty-two employees referred to above. Reference is made to the reported opinion and findings of the District Court (Appendix hereto) for details. Judge Feikens decided practically all issues in favor of the Union. He held that the thirty-two employees had the right to elect early retirement; that “bumped” employees who are now retired on the “75/80” plan may elect to return to work or remain retired under the plan; and that employees “bumped” out of a job have a right to reinstatement with back pay. The company appeals. The Union cross-appeals on two issues: (1) the basis of computation of the pensions of the thirty-two employees found entitled to retire; and (2) the basis of computation of back pay of employees whose jobs are to be restored. We agree with the Union on the first ground of its cross appeal and modify the judgment of the District Court accordingly. In all other respects we affirm the judgment of the District Court. Anaconda contends that the interpretation of the pension plan by the District Court is contrary to the interpretation which the parties have placed upon the disputed language. It is asserted that “there never has been a situation in Detroit, or even corporate-wide, of an employee being granted 75/80 pension benefits in a situation where he could bump, but refused to do so.” This assertion is supported by an affidavit. However, the record also contains the following letter written to the District Judge: “Hon. John Feikens March 8, 1972 Judge, U. S. District Court Eastern District 851 Federal Building Detroit, Michigan 48226 Re: United Automobile Workers v. Anaconda American Brass Company Federal District Court Eastern District of Michigan Southern Division Civil Action No. 37289 “Dear Sir: “At the hearing on the Motion for Summary Judgment in the above matter, held on Monday, March 6, 1972, you requested that I check with the several Divisions of the Defendant to determine if there had existed a situation involving the permanent closing of a department which was similar to the factual situation in the issue being litigated. “Such a check has been made, and I will inform you that we have been unable to determine the existence of any such similar incident.” Anaconda further contends that at a negotiating session prior to the institution of this litigation, the Union requested a change in the language of the pension plan to make employees in the situation herein involved eligible for 75/80 pensions. We hold that this effort by the Union to effect a clarification of the disputed language is not a waiver of its position as to the meaning of the language in dispute. All other contentions of Anaconda have been considered and found to be without merit. We now come to the cross appeal of the Union. The Union’s first contention is directed to the effective date as of which the 75/80 pension benefits for the thirty-two employees in question is to be calculated. In finding of fact No. 7 (Appendix hereto), the District Court held that “the pension rate which such employees receive will be the rate in effect on August 27, 1971.” The Union contends that the applicable pension rate should be that in effect on the date of their actual retirement. We agree with the Union. The judgment of the District Court is modified accordingly. The Union further contends that the rate of backpay set forth in finding of fact No. 9 (Appendix hereto) should include a “reasonable estimate of incentive pay, overtime pay and other negotiated premiums.” We disagree and affirm finding of fact No. 9. Modified and affirmed. Costs are taxed against Anaconda. APPENDIX OPINION, FINDINGS OF FACT AND CONCLUSIONS OF LAW U. S. District Court — Eastern District of Michigan — (Southern Division) This opinion supplements the Memorandum Opinion issued by this Court on March 17, 1972, and disposes of all issues raised by the pleadings. It also sets forth Findings of Fact and Conclusions of Law as required by Rule 56 and is a final order of Summary Judgment. As noted in this Court's Memorandum Opinion issued on March 17, 1972, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and Local 174 brings this action against Anaconda American Brass Company, Inc., under Section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185, and this Court has jurisdiction under that section to determine liability and to award actual and consequential damages and other appropriate relief in this dispute. The original Memorandum Opinion sets forth the undisputed facts leading to this litigation. It is to be noted that the parties have negotiated amendments to said pension plan since the date of the departmental shutdown, granting increased 75/80 pension benefits to all such pensioners, but smaller increases to those employees who retired under the provision prior to October 1,1971. For purposes of clarification, the following definitions are used: Group I A — Employees in shutdown departments presently working in other departments and who Union claims should have been given an election to take 75/80 pensions. Group I B — Employees still working whose jobs were amalgamated or job descriptions changed (primarily skilled trades). Group II — Employees laid off and presently collecting 75/80 pensions. Group III — Employees laid off. Group IV — Employees laid off but later recalled to work. No facts being in dispute, this Court finds the facts to be as outlined in its original Memorandum opinion. Conclusions of Law 1. Group I-A employees are entitled to elect to retire and receive 75/80 pensions. 2. Group I-B employees are not entitled to elect to retire and receive 75/80 pensions. 3. Employees who did not sign the protest forming the basis of this lawsuit cannot now protest and be entitled to an election with Group I-A employees for 75/80 pensions. 4. Deceased employees have no further rights under the contract or pension agreement and will not be considered. Sick employees in Group I-A have an election now to retire on 75/80 pensions upon termination of sick leave or have a job available on return from sick leave (seniority permitting). Employees retired on 60/30 pensions must remain on those pensions and will not be given an election to return to work. 5. If any jobs are open due to Group I-A employees electing 75/80 pensions, then Group II and Group III employees will be called in (in seniority order from a combined seniority list of Group II and Group III) to fill said jobs. If any employees in Group II presently on 75/80 pensions, elect not to return to work, they will remain on said pensions. 6. The three Plate Mill employees, in Group II, who were bumped by Group I employees and who retired on 75/80 pensions, may, if reached in any recall procedure, elect either to return to work or to continue to receive 75/80 pension benefits if they do not elect to return to work. 7. Employees in Group I-A who elect to retire, will be deemed to have retired, for purposes of Section 2.4 of the Pension Plan, on August 27, 1971. Such employees will receive said 75/80 pension benefits on the first day of the month next following the month in which they actually terminate active employment with the company. The pension rate which such employees receive will be the rate in effect on August 27, 1971, provided that such employees shall also be entitled to receive any increases negotiated subsequent to such date, which are applicable to employees retiring on such date. 8. Jobs will be filled in accordance with established past practice, based on the determination of the Company as to the open job for which the returning employee is most qualified. There shall be no preference of job assignments by reason of seniority. If any employee is refused a job solely because of physical infirmity based on a report from the Company clinic, and said employee obtains a letter from his doctor stating that the employee is physically capable of performing the job, the question of employee’s physical competence shall be submitted to an impartial medical arbitrator appointed by the Company clinic and the employee’s doctor. Expenses of the independent physician shall be shared equally by the Company and the Union. 9. Employees in Group II, presently receiving 75/80 pensions, will not be entitled to any back pay if they elect to return to work. Employees in Group III eligible to receive back pay pursuant to paragraphs 5 and 12 hereof, will receive back pay at the average base rate of all jobs which Group I-A employees leave or which become available due to the retirement of Group I-A employees, and which are not filled by returning Group II employees. It is the order of this Court that such back pay be determined by 40 hours straight time, excluding any incentive pay, overtime or other premium, for each week laid off, provided that any increase in the applicable base rate occurring subsequent to August 27, 1971 shall be included in the computation of such damages, such increase being effective for the purposes of computing damages on the date it becomes effective as to all employees in the bargaining unit. Subtracted from this amount will be all outside earnings, Workmen’s Compensation, unemployment compensation and sick and accident benefits actually received by that employee eligible to receive back pay. If the State of Michigan recovers unemployment compensation or makes a demand on any employee for repayment thereof, the Company shall reimburse the employee for all such sums collected or pay the employee all sums for which demand for repayment has been made. Such payments shall occur within two (2) weeks after the Company has received notice from the employee that such recovery has occurred or that such demand has been made. The Company may require the employee to submit reasonable proof of such recovery or such demand. 10. Employees in Group III returning to jobs after having been laid off will be credited with service for the entire period of their absence both for purposes of pension and for purposes of all other contractual benefits including but not limited to vacation benefits. Regarding vacation benefits, said employees will receive their guaranteed vacation benefits in the calendar year u which they return to work. Such employees will retain their established seniority date. Employees in Group II returning to jobs after having been pensioned will be credited with service for the entire period of their absence for purposes of pension benefits, but for no other purposes. Said employees will retain their established seniority date. 11. Only those jobs still remaining on the date that all appeals from this order are exhausted are to be considered. No employees have recall rights or back pay rights to jobs eliminated after September 1, 1971 and before the date that all appeals from this order are exhausted. 12. This is a final order determining the rights of all parties on the question of liability. Defendant may have a stay of execution during exhaustion of all appeals. After said exhaustion of appeals, Group I-A employees shall be given 48 hours to elect to receive a 75/80 pension or to continue working. If no election is made, the employee will be deemed to have elected to remain working. All vacant jobs will be posted within the plant pursuant to the Collective Bargaining Contract and remaining working employees shall have 48 hours. to bid on these jobs. Registered letters, return receipt requested, shall be sent to the senior people in Group II and Group III for filling vacancies created. Said employees shall have five working days to respond to said letters and if no response is received, the employee shall be deemed to have elected to not return to work. If such an employee contacts the Company and expresses his intention to return to work, but indicates that it is impossible for him to report to the Company within the five day period, he shall be given a reasonable period of time within which to report. His failure to report within this extended time shall be deemed to be a waiver of his right to return. As soon as an election is made by any of these employees not to return to work, other registered letters will be sent out to the next senior employees in Group II and Group III and the above same procedure will be followed. Returning employees will be trained and placed as fast as possible, and employees in Group I electing to receive pensions will be retired as soon as their job has been filled with a trained man, but in no case later than the first day of the third month following the exhaustion of all appeals. If there are no jobs which a returning employee can perform, that employee must remain on layoff or pension, subject to the stipulated provisions regarding physical infirmity and disability set forth in the physical infirmity and disability provision of paragraph 5. The Findings of Fact and Conclusions of Law of this Court on issues numbered 2, 3, 4, 5, 8, 11 and 12 are wholly based on the stipulation which the parties have made as to those issues to facilitate this litigation, and this Court, therefore, incorporates the same herein. Wherefore, it is ordered by this Court that: 1. The parties shall comply with the provisions of paragraphs 1-12 of this opinion. 2. The Defendant shall pay damages to Plaintiff in the amount to be determined under the provisions of Paragraph 9. 3. The Defendant shall pay Plaintiff’s costs, but not attorney fees. 4. The Defendant shall have a stay of execution of this order pending exhaustion of all appeals, as provided in Paragraph 12 hereof. /s,/ John Feikens United States District Judge Dated: June 9, 1972. . 29 U.S.C. § 185. . The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and Local 174.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Leon Dudley NOAH, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Richard R. STUART, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Willie WILLINGHAM and Abraham Griffin, Defendants-Appellants. UNITED STATES of America, Plaintiff-Appellee, v. Virgil METCALF, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Humphrey ROSS, Defendant-Appellant. Nos. 72-1807 to 72-1810, 72-1865. United States Court of Appeals, Ninth Circuit. March 2, 1973. Rehearing Denied April 25, 1973. Wesley G. Hohlbein (argued), Seattle, Wash., Jack Steinberg (argued), Seattle, Wash., Murray Guterson (argued), Seattle, Wash., Robert C. Mussehl (argued), Seattle, Wash., Arthur Sherman (argued), Marks, Sherman & Schwartz, Beverly Hills, Cal., B. Gray Warner, Warner, Pierce & Peden, Seattle, Wash., for defendants-appellants. Charles Pinnell, Asst. U. S. Atty. (argued), Tom Russell, Asst. U. S. Atty., Stan Pitkin, U. S. Atty., Seattle, Wash., for plaintiff-appellee. Before BARNES and CHOY, Circuit Judges, and JAMESON, District Judge. Honorable William J. Jameson, Senior United States District Judge, District of Montana, sitting by designation. CHOY, Circuit Judge: Appellants were indicted on 18 counts for trafficking in heroin and cocaine and conspiring to do so. Two of the counts were for possession of narcotics with intent to distribute, based on the seizure of narcotics from the residence of two of the appellants. The other fourteen substantive counts were for twelve sales by various members of the conspiracy to a government undercover agent. These sales took place between March 5, 1971 and July 28, 1971. Two separate counts of conspiracy were charged. All six appellants were tried jointly by a jury and found guilty on all counts as charged. All six have filed timely appeals. We affirm as to all with directions and one of Ross’s $7,500 fines is stricken. We consider each appeal separately. LEON DUDLEY NOAH 1. Missing witness instruction. Noah asked that the court give an instruction to the effect that since the government did not produce a certain witness there is a presumption that her testimony would have been unfavorable to the government's case. The court refused to give the instruction and Noah appeals that ruling. The failure of a party to produce a material witness who could elucidate matters under investigation gives rise to a presumption that the testimony of that witness would be unfavorable to that party if ‘the witness is peculiarly within the party’s control. World Wide Automatic Archery, Inc. v. United States, 356 F.2d 834, 837 (9th Cir. 1966). Here the government did not call as a witness a paid informer who was instrumental in the government’s investigation. Noah asserted that the government entrapped him and the missing witness could have elucidated this aspect of the case. We do not think that the trial court erred in not giving the instruction. The record does not indicate that this witness was peculiarly within the power of the government. The issue of her availability was a question of fact for the trial court to decide. While the informer was at one time associated with the government, there was a break in the relationship. The witness left the state about three months before appellant’s indictment and five months before trial and no one knew of her whereabouts. She was equally unavailable to both Noah and the government. The instruction was properly rejected as not warranted by the facts of this case. United States v. Makekau, 429 F.2d 1403 (9th Cir.), cert.. denied 400 U.S. 904, 91 S.Ct. 143, 27 L.Ed.2d 141 (1970). 2. Entrapment instructions. Noah claims that the court erred by instructing the jury that the defense of entrapment is applicable only when a person has no previous intent or purpose to violate the law and has a readiness and willingness to break the law. Noah maintains that since he was a drug addict he should be entitled to a special entrapment instruction. The law is clear that if a predisposition to break the law exists before the government makes any offer, the entrapment defense does not apply. United States v. Griffin, 434 F.2d 978 (9th Cir. 1970), cert. denied 402 U.S. 995, 91 S.Ct. 2170, 29 L.Ed.2d 160 (1971). 3. Dismissal of part of the indictment. Noah contends that his Fifth Amendment rights were violated when the court, pursuant to F.R.Crim.P. 48(a) dismissed five substantive counts from the indictment. Noah claims that by eliminating the substantive counts the theory of the original indictment was changed without the indictment being resubmitted to the grand jury. We see no merit in Noah’s contention. He was in no way prejudiced by the elimination of part of the indictment. An indictment may not be broadened except by the grand jury. Stirone v. United States, 361 U.S. 212, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960). Here the indictment was not expanded, but consolidated and some of the charges were eliminated. There is no Fifth Amendment prohibition against this. 4. Prejudicial publicity. The day after the prosecution rested, a newspaper article appeared in a local paper. The headline read, “Dope Case Witness Refuses to Testify.” The article referred to a government witness who the government claimed was too sick to testify. The court asked the jurors whether any of them had either read the article or seen the headline. Only one juror admitted that he had read the headline. This juror was examined at length to determine if he had been influenced by the article. The court decided that the juror could still remain fair and impartial. During the examination, however, this juror said that probably half a dozen other jurors also saw the headline. The defense was given an opportunity to question the other jurors, but declined to do so and moved for a mistrial instead. That motion was denied. We affirm the ruling. “The trial judge has a large discretion in ruling on the issue of prejudice resulting from the reading by jurors of news articles concerning the trial. Holt v. United States, 218 U.S. 245, 251 [, 31 S.Ct. 2, 6, 54 L.Ed. 1021], Generalizations beyond that statement are not profitable, because each case must turn on its special facts.” Marshall v. United States, 360 U.S. 310, 312, 79 S.Ct. 1171, 1173, 3 L.Ed.2d 1250 (1959). Here, all that was established was that one juror admitted reading the headline and he thought that others had also seen the headline. The headline itself was not prejudicial. It simply stated that a witness had refused to testify. The jury was already aware that the witness had not appeared after she was called as a witness. While the article itself was potentially prejudicial, there is no evidence that anyone read it. The defense was given an opportunity to question the jury. Unless we assume that each juror purposely lied to the court, we cannot find that the publicity prejudiced the jury against the appellants. The burden to show that a defendant had been unfairly treated is on the defendant. Marshall v. United States, 355 F.2d 999, 1007 (9th Cir.), cert. denied 385 U.S. 815, 87 S.Ct. 34, 17 L.Ed.2d 54 (1966). Here that burden has not been met. 5. Habeas corpus petition. Pending this appeal, Noah filed a motion for a writ of habeas corpus. He contends that the method used to select the jury violated the Fifth and Sixth Amendments. Noah notes that of the approximately 200 odd veniremen only two were non-whites and that nonwhites constitute 5.9% of the population of the Western District of Washington. Since an appellate proceeding is pending, we have the power to issue a writ of habeas corpus. Adams v. United States ex rel. McCann, 317 U.S. 269, 63 S.Ct. 236, 87 L.Ed. 268 (1942). But Noah has failed to sustain the burden of proof of showing a systematic exclusion of non-whites. Swain v. Alabama, 380 U.S. 202, 85 S.Ct. 824, 13 L.Ed.2d 759 (1965); United States v. Parker, 428 F.2d 488 (9th Cir.), cert. denied 400 U.S. 910, 91 S.Ct. 155, 27 L.Ed.2d 150 (1970). “The use of voter registration lists as the sole source of the names of potential jurors is not constitutionally invalid, absent a showing of discrimination in the compiling of such voter registration lists.” Parker, supra at 489. Noah concedes that there was no conscious effort to exclude non-whites, but he argues that discrimination is inherent in the use of voter lists. Noah, however, has failed to present sufficient evidence to prove that there is in fact a sufficiently large under-representation of non-whites. Bloomer v. United States, 409 F.2d 869 (9th Cir. 1969). The motion for a writ of habeas corpus is denied. EICHAED STUAET 1. Improper counts. Stuart contends that one of his two conspiracy convictions should be reversed. The indictment contained two conspiracy counts. The first one charged a conspiracy to violate 21 U.S.C. § 174 between March 1, 1971 and April 30, 1971; the second charged conspiracy to violate 21 U.S.C. § 841(a) between May 1, 1971 and July 28, 1971. Two conspiracy counts were charged because of the conspiracy statutes themselves although there was but one continuing conspiracy. On May 1, 1971, a new statute, the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. §§ 801-966, took effect, replacing other federal narcotics laws. For activities preceding May 1, appellant was charged under the old statute, and for activities after May 1, he was charged with conspiring under the new statute. Presenting evidence of violations of different statutes does mot create separate conspiracies out of one conspiracy. The gist of the crime of conspiracy is an agreement to commit unlawful acts. “The one agreement cannot be taken to be several agreements and hence several conspiracies because it envisages the violation of several statutes rather than one.” Braverman v. United States, 317 U.S. 49, 53, 63 S.Ct. 99, 102, 87 L.Ed. 23 (1942). No evidence was advanced at the trial to suggest that the defendant and his co-conspirators formed a new agreement, made new plans, or developed a new purpose after the new federal law went into effect. Since there was only one agreement there could be only one conspiracy conviction. Therefore, we vacate Stuart’s conviction of the first count and order that it be dismissed. Even though we vacate one of the conspiracy convictions, this does not alter Stuart’s sentence. Stuart received a thirty-year sentence on the first conspiracy count and a fifteen-year sentence on the second conspiracy count. In addition, he received five other thirty-year sentences and five other fifteen-year sentences for participating in ten illegal narcotics sales. All of the sentences are concurrent. We can say with fair assurance that the improper conspiracy conviction did not in any way influence the other convictions. Kotteakos v. United States, 328 U.S. 750, 764-765, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946). There was clear evidence that Stuart had participated in several sales. Stuart also maintains that two of the substantive convictions were improper. He contends that it was improper to charge a separate count for the sale of heroin and cocaine. We need not reach the merits of this issue because even if we reversed these two convictions, the validity of the other concurrent sentences would not be affected. Hirabayashi v. United States, 320 U.S. 81, 63 S.Ct. 1375, 87 L.Ed. 1774 (1943); United States v. Munns, 457 F.2d 271, 274 (9th Cir. 1972). 2. Improperly admitted evidence. Stuart contends that he should be acquitted on all counts because the government failed to prove that the heroin tested by its chemists was the same substance sold to the government. This contention has no merit. First, no objection was made at the time the evidence was admitted. On this fact alone we could affirm. Scott v. United States, 115 U.S.App.D.C. 208, 317 F.2d 908 (1963). Second, ample evidence was adduced during the trial to enable the jury to conclude that the narcotics purchased from Stuart were the same as the exhibits admitted into evidence. Barquera v. California, 374 F.2d 177 (9th Cir. 1967); United States v. Baca, 444 F.2d 1292 (10th Cir.), cert. denied 404 U.S. 979, 92 S.Ct. 347, 30 L.Ed.2d 294 (1971). 3. Entrapment instructions. Stuart maintains that the court’s instructions on entrapment were erroneous because they were ambiguous and they did not clearly explain who had the burden of proof. If the instructions were vague or ambiguous that would be grounds for reversal. Notaro v. United States, 363 F.2d 169 (9th Cir. 1966). But the instructions in the case at bar were not defective. In United States v. Griffin, 434 F.2d 978, 981 (9th Cir. 1970), cert. denied 402 U.S. 995, 91 S.Ct. 2170, 29 L.Ed.2d 160 (1971), we approved exactly the same instructions. WILLIE WILLINGHAM and ABRAHAM GRIFFIN 1. Conspiracy conviction. Willingham and Griffin contend that their convictions for conspiring with Ross and Stuart after May 1 must be reversed because there was no evidence that two conspiracies existed. Griffin also contends that there was insufficient evidence to support his conviction. Willingham and Griffin were named in but one conspiracy count, unlike Stuart and Ross. The government concedes that the evidence showed only one pattern of conspiratorial activity by the appellants from March through July 1971, but because of the changes in the law they elected to prosecute Willingham and Griffin under the new law. The evidence of their participation in the conspiracy surfaced after the change in the law. They were indicted and convicted on only one conspiracy charge. Under these circumstances, and in light of the fact that the penalties under the new statute are smaller, we see nothing improper or prejudicial to them in the government’s separation of the illegal activities. We also affirm Griffin’s conspiracy conviction. On appeal the evidence is viewed in the light most favorable to the government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942); United States v. Magana, 453 F.2d 414 (9th Cir. 1972). While there was no evidence that Griffin directly participated in any of the illegal sales, there was sufficient evidence to sustain a finding by the jury that Griffin was a member of the conspiracy. Griffin’s home was used as a stash for the drugs and the site where the drugs were cut into retail quantities. Moreover, when Griffin was arrested 16 balloons of heroin were discovered in his bedroom. Paraphernalia for both diluting and packaging heroin was found in various common areas of the house. The jury rejected Griffin’s defense that he was a mere bystander. Testimonial evidence also supports the conviction. United States v. Stanley, 427 F.2d 1066, 1070 (9th Cir. 1970), cert. denied 404 U.S. 996, 92 S.Ct. 542, 30 L.Ed.2d 548 (1971). VIRGIL METCALF 1. Challenge to the jury. Metcalf contends that the Jury Selection Plan for the Western District of Washington adopted pursuant to the Jury Selection and Service Act of 1968, 28 U.S.C. §§ 1861-1871 does not comply with the policies set forth in sections 1861-1863. We do not reach the merits of this objection because Metcalf failed to make a timely challenge as required by 28 U.S.C. § 1867. 2. Fifth amendment privilege. During his closing argument, the prosecutor commented: “In my opinion what has happened is that the defense has collapsed, because of all the six defendants before you not one of them has brought one witness in to deny that anything that we have alleged happened in terms of the substantive sales that we have told you about. Mr. Noah brought in no witnesses to deny that he participated in the sales. Mr. Stuart brought in no witnesses to deny that he participated in the sales.” At this point the court interrupted the prosecutor and admonished the jury that the burden of proof was on the prosecution to establish guilt, not on the defendants to prove innocence, and that the defendants had no burden to prove anything. Later the court instructed the jury that the prosecutor’s comments were improper and they should not be considered. Metcalf contends that the prosecutor’s comments infringed his Fifth Amendment privilege and violated the doctrine of Griffin v. California, 380 U.S. 609, 85 S.Ct. 1229, 14 L.Ed.2d 106 (1965), and that neither the court’s admonition nor the later instruction rendered the error harmless. The comments in this case are quite different from a specific comment on the defendant’s failure to take the stand. “[W]here the prosecutor confines himself to arguing the strength of his case by stressing the credibility and lack of contradiction of his witnesses, we will not be astute to find in this a veiled comment on the defendant’s failure to testify even if in practical fact, although not in theory, no one else could controvert them.” United States ex rel. Leak v. Follette, 418 F.2d 1266, 1270 (2nd Cir. 1969), cert. denied 397 U.S. 1050, 90 S.Ct. 1388, 25 L.Ed.2d 665 (1970); accord, United States v. Lepiscopo, 458 F.2d 977 (10th Cir. 1972). Here the disputed comments were specifically directed to the lack of contradictory witnesses and contained no explicit reference to the failure of the appellants to testify. We do not think that it focused attention on their failure to testify. The trial judge understood the comment to be directed at the weight of the evidence because in his correction he instructed the jury as to the burden of proof, not the Fifth Amendment rights of the appellants. Even if we found the comment impermissible, it was harmless error. The comment by the prosecutor was brief, composed of only three sentences. The silence of the appellants was not mentioned to the jury. The trial judge immediately interrupted and properly instructed the jury as to the burden of proof. Any impropriety was harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967); Milton v. Wainwright, 407 U.S. 371, 92 S.Ct. 2174, 33 L.Ed.2d 1 (1972). HUMPHREY ROSS I. Insufficiency of the evidence. On appeal the evidence is viewed in the light most favorable to the government. Glasser, supra; Magana, supra. Ample evidence sustains Ross’s conviction. Although Ross never directly sold any narcotics, there was sufficient evidence that he actively assisted in the completion of two illegal sales. Ross drove Stuart to the place where the sales were completed and there was evidence that Ross supplied Stuart with the heroin used in the sales. 2. Denial of the motion for severance. Ross moved for a separate trial pursuant to Rule 14, F.R.Crim.P., on the ground that if tried with his co-defendants he would be denied supposedly exculpatory testimony from two of them. The trial judge ruled that Ross failed to show the prejudice required by Rule 14 for a severance. The ruling will not be reversed absent a clear abuse of discretion. United States v. Figueroa-Paz, 468 F.2d 1055 (9th Cir. 1972); Daut v. United States, 405 F.2d 312, 314 (9th Cir. 1968), cert. denied 402 U.S. 945, 91 S.Ct. 1624, 29 L.Ed.2d 114 (1971). Ross made no affirmative showing that the two co-defendants would be willing to testify for him in a separate trial. When there has been an insufficient showing that a co-defendant would actually testify at a severed trial, the district court has not abused its discretion by refusing to grant a motion to sever. United States v. Thomas, 453 F.2d 141 (9th Cir. 1971), cert. denied 405 U.S. 975, 92 S.Ct. 1195, 31 L.Ed.2d 249 (1972); Fields v. United States, 408 F.2d 885 (5th Cir. 1969). Ross also asserts that his defense was prejudiced by his joinder with others who had sold narcotics directly to government agents. The burden of proving prejudice is a difficult one, and the ruling of the trial judge will rarely be disturbed on review. United States v. DeSapio, 435 F.2d 272, 280 (2nd Cir. 1970), cert. denied 402 U.S. 999, 91 S.Ct. 2170, 29 L.Ed.2d 166 (1971). Again, we find no abuse of discretion. 3. Prejudicial publicity. This argument has already been considered and rejected. See part 4 of the Noah opinion, supra. 4. Fifth amendment privilege. This argument has already been considered and rejected. See part 2 of the Metcalf opinion, supra. 5. Instructions. Ross asserts that the court erred when it refused to give the jury his requested instruction on conspiracy. There is no requirement that any specific instruction must be accepted. It is, however, reversible error not to instruct as to defendants’ theory of the case if the record contains evidentiary support for the theory and the theory is supported by law. Perkins v. United States, 315 F.2d 120, 124 (9th Cir.), cert. denied 375 U.S. 916, 84 S.Ct. 201, 11 L.Ed.2d 155 (1963). Ross contends that the instructions given failed to allow for the possibility that Ross might be acquainted with the members of the conspiracy and still not be a co-conspirator because he had no financial stake in the success of the conspiracy. Ross is incorrect in his assumption that each conspirator must have a financial stake in the venture. All that is required is that he not be indifferent to its outcome. United States v. McKnight, 253 F.2d 817 (2nd Cir. 1958). The instructions actually given state that the defendant must have willfully participated with the intent to advance some object of the conspiracy, and that mere similarity of conduct or association does not establish a conspiracy. These instructions adequately presented defendant’s theory of the case. 6. Peremptory challenge. During the selection of the jury the government excused the only black member of the jury panel. Ross, a black, contends that this prejudiced his case. Since there is no evidence of any purposeful discrimination, there is no basis for Ross’s objection. Swain, supra 380 U.S. at 221, 85 S.Ct. 824. A criminal defendant has no constitutional right to a proportionate number of his race or ethnic group on the jury that tries him. United States v. Gonzalez, 456 F.2d 1067, 1068 (9th Cir. 1972). 7. Conspiracy conviction. Ross does not raise this issue, but we note that like Stuart he was also convicted on two conspiracy convictions. As in Stuart’s case we vacate the conviction on the first conspiracy count and order that it be dismissed. Like Stuart this does not affect Ross’s sentence since he also received other similar concurrent sentences. These other convictions are not tainted by the improper conspiracy conviction. However, in addition to receiving terms of imprisonment, Ross was also fined $7,500 for each of his four convictions. Since one of the convictions is invalid, one $7,500 fine is dismissed. The judgments of conviction, and sentences of all appellants are affirmed, except that the convictions of Stuart and Ross on the first conspiracy count for violation of 21 U.S.C. § 841(a) are vacated and ordered dismissed, and one of the $7,500 fines levied on Ross is stricken. . The original indictment filed on July 2S, 1971 contained 26 counts. A trial was conducted, but because of the prejudicial testimony of a government witness a mistrial was declared. The case was consolidated and 8 substantive counts were dropped by the government before the commencement of the second trial. . Two of the sales involved both heroin and cocaine and for these sales there are four instead of two counts. All of the other sales involved only heroin. . Two conspiracies were charged instead of one because pending the investigation a new federal narcotics statute went into effect. . We note that there is an additional aspect to the problem of the witness’s unavailability. The government helped her leave the jurisdiction since they provided her with a train ticket. The government should not cause a prospective witness to leave the jurisdiction so that he would not be available to testify. In this ease, however, we find nothing improper since there was no evidence of such sinister motivation on the part of the government. The witness departed five months before the trial (three months before the end of the investigation) and it appears that the witness herself wanted to leave so that she could start a new life in another city. . We also note that the defense of entrapment is not available to either Noah or Stuart. The rule in this circuit requires that the defendant admit the criminal act before he can successfully assert that he was entrapped. United States v. Azadian, 436 F.2d 81, 83 (9th Cir. 1971). Although this rule has been criticized, it is still the law in this circuit. Moreover, the instant case does not present such an intolerable degree of government participation in the criminal enterprise, to come within the limited exception to the prevailing rule. See United States v. Granger, 475 F.2d 1022 (9th Cir. 1973). . The gist of the article was that the witness had refused to testify not because she was sick but because she was afraid she would be harmed if she did testify. . In the light of our disposition of the case we need not reach this issue, but we uphold the least severe of the convictions. Brown v. United States, 112 U.S.App.D.C. 57, 299 F.2d 438, 440 (1962). . See note 5, supra. . Although we have not reached the merits, we note that objections similar to those raised in this case have been rejected by this court. United States v. Ross, 468 F.2d 1213 (9th Cir. 1972); United States v. Ware, 473 F.2d 530 (9th Cir. 1973). . 28 U.S.C. § 1867 reads in part: (a) In criminal cases, before the voir dire examination begins, or within seven days after the defendant discovered or could have discovered, by the exercise of diligence, the grounds therefor, whichever is earlier, the defendant may move to dismiss the indictment or stay the proceedings against him on the ground of substantial failure to comply with the provisions of this title in selecting the grand or petit jury. (e) The procedures prescribed by this section shall be the exclusive means by which a person accused of a Federal Crime, the Attorney General of the United States or a party in a civil ease may challenge any jury on the ground that such jury was not selected in conformity with the provisions of this title. . While we think the comment was ill-advised, it was not of such a character that the jury would naturally and necessarily take it to refer to the appellant’s failure to testify. United States v. Hawk Wing, 459 F.2d 428, 430 (8th Cir. 1972). . The rejected instruction read: “The mere knowledge, approval or acquiescence in the object or purpose of a conspiracy by the defendant is insufficient to convict inasmuch as the accused must in some sense promote the venture himself, make it his own, or have a stake in its outcome, before he is guilty as a ‘conspirator’ and/or ‘abettor’.”

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Howard J. CONTE, Petitioner-Appellant, v. Harold J. CARDWELL, Warden Ohio State Penitentiary, Respondent-Appellee. No. 71-1745. United States Court of Appeals, Sixth Circuit. June 29, 1972. Rehearing Denied March 2, 1973. Richard F. Swope, Thompson, Swope & Burns, Reynoldsburg, Ohio, for petitioner-appellant. Leo J. Conway, Asst. Atty. Gen., William J. Brown, Atty. Gen. of Ohio, Columbus, Ohio, for respondent-appellee. Before PHILLIPS, Chief Judge, WEICK, Circuit Judge, and WILSON, District Judge. The Honorable Frank W. Wilson, Chief Judge, United States District Court for the Eastern District of Tennessee sitting by designation. FRANK W. WILSON, District Judge. This is appeal from the order of the District Court denying a state prisoner’s petition for federal habeas corpus relief. The record upon this appeal reflects that the petitioner was convicted upon four counts of participating in two successive prison riots that occurred upon June 24 and August 20, 1968, at the Ohio State Penitentiary. As grounds for seeking federal habeas corpus relief the petitioner contends (1) that the prison riot statute upon which he was convicted was discriminatory in its terms and application, thereby denying him equal protection of the law; (2) that he was denied due process by the refusal of the state trial court (a) to sever the counts in the indictment and grant a trial upon the two June riot counts separate from a trial upon the two August riot counts, (b) to admit evidence of justification or self-defense upon the August riot counts, and (c) to com pel the testimony of witnesses; and (3) that he was denied the effective assistance of counsel. It is conceded that no issue was raised by the petitioner in the state court with regard to the constitutionality of the Ohio Prison Riot Statute (Section 2921.18, Ohio Revised Code). The petitioner contends, however, that to have raised the issue in the Ohio courts would have been a futile gesture in that the constitutionality of the statute has been upheld in certain unreported cases in the lower appellate courts in that jurisdiction. The existence of such unreported decisions is not sufficient to excuse the petitioner from the obligation of testing the constitutionality of the state statute in the state courts before resort may be had to federal habeas corpus relief. Anderson v. Johnson, 371 F.2d 84 (6th Cir., 1966); Wilson v. Dixon, 256 F.2d 536 (9th Cir., 1958); 28 U.S.C. § 2254. Regarding the remaining issues, the District Court held an evidentiary hearing at which the transcript of the evidence upon the criminal trial was filed and at which testimony was received from the petitioner and from his state court trial attorney upon the issue of the alleged denial of effective assistance of counsel. Upon the record thus established, the District Court found the petitioner’s federal habeas corpus contentions to be without merit. We affirm. The record upon the trial reflects that two successive prison riots occurred at the Ohio State Penitentiary during the summer of 1968. The first riot occurred upon June 24 and the second upon August 20 and 21, Extensive property and fire damage was caused in the first riot. Hostages were seized in the second riot and they had to be forcibly rescued before order was restored. With regard to the June riot the state introduced evidence that shortly after the riot began the petitioner was seen armed with a knife and a club and was observed breaking windows and clubbing furniture in the prison auditorium. Later on that date he was observed urging other prisoners not to return to their cells as ordered. By way of defense, and in addition to denying participation in the riot, evidence was introduced that during the June riot the petitioner had rescued a number of patients and other personnel who were trapped by a fire started in the prison hospital. With regard to the August riot the evidence was undisputed that the petitioner participated in seizing hostages and in threatening their lives and that he was the spokesman for the prison inmates who were rioting. In defense of his participation in the August riot, the petitioner sought to offer evidence of inmate mistreatment and of general prison conditions and grievances as justification for his participation, but the trial court declined to permit this evidence to be presented to the jury. It is upon this trial record that the petitioner contends that he was denied due process by failure of the trial court to sever the June and August riot counts, by failure of the court to compel testimony and by refusal of the court to admit evidence of justification or “self-defense” as regards the petitioner’s participation in the August riot. It is upon both the state court trial record and the testimony of the petitioner and his attorney at the evidentiary hearing held before the District Court that the petitioner bases his claim of denial of effective assistance of counsel. The matter of granting separate' trials upon the various counts within the indictment was within the sound discretion of the trial court in the context of this case. The offenses charged in each of the four counts of the indictment were sufficiently related both in time and in character to permit their joinder in the indictment and upon the trial. Allegations of participation by the petitioner in successive prison riots in the same institution separated in time by less then two months are sufficient circumstances to permit their joinder in an indictment and in a trial without violation of due process. See Williams v. United States, 168 U.S. 382, 18 S.Ct. 92, 42 L.Ed. 509 (1897); Beckett v. United States, 84 F.2d 731 (6th Cir., 1937); Williams v. United States, 115 U.S.App.D.C. 134, 317 F.2d 545 (1963); Bradley v. United States, 140 U.S.App.D.C. 7, 433 F.2d 1113 (1969). See also Rules 8, 13 and 14, Federal Rules of Criminal Procedure. That the joinder of two riots in one trial may have confronted the petitioner with an election as to whether he should testify or exercise his right to refrain from testifying does not constitute a constitutionally impermissible infringement of his right to refrain from self-incrimination. See Kirk v. United States, 457 F.2d 400 (6th Cir., 1972); United States v. Lee, 428 F.2d 917 (6th Cir., 1970). Moreover, .the trial court avoided possible prejudice to the petitioner by permitting him to testify regarding the June riot but to decline to testify regarding the August riot, a privilege the Court was not legally impelled to grant. See Crampton v. Ohio, 402 U.S. 183, 91 S.Ct. 1454, 28 L.Ed.2d 711 (1971); Brown v. United States, 356 U.S. 148, 78 S.Ct. 622, 2 L.Ed.2d 589 (1958). A principal contention advanced by the petitioner is that constitutional error was committed when the trial court declined to admit proffered defense testimony regarding prison conditions and inmate abuses in justification of the offenses charged, and in particular in justification of the August riot counts. There was no error on the part of the trial court in excluding this evidence. Prison abuses, whether real or fancied, form no justification for prison riots. Other lawful remedies exist for correction of such abuses. The petitioner seeks to draw an analogy between the motives prompting his participation in the August riot and the legal defense of self-defense to a charge of assault or homicide. No such analogy exists. See Miller, Criminal Law, pp. 189-224; Prosser, Law of Torts, 4th Ed., pp. 108-117; 40 Am.Jur.2d, “Homicide” § 140. The petitioner’s contention regarding self-defense or justification being without merit, much of the basis for his other contentions is removed from the case. His contentions regarding both the failure of his counsel to subpoena witnesses and the failure of the Court to compel witnesses to testify appear to relate only to witnesses who were proffered in support of his erroneous contention of justification or who he anticipated might, if called, have supported that contention. The record is devoid of any showing that the petitioner was denied the testimony of any witness who had relevant and admissible testimony. To the extent that the petitioner sought to subpoena some 80 inmates, in addition to the 23 witnesses that were subpoenaed or proffered by his attorney, merely to discover whether they might have information helpful to him, his request was properly denied as an abuse of process. Finally, the petitioner contends that he was denied the effective assistance of counsel. It is apparent that this contention is in fact largely predicated upon the petitioner’s dissatisfaction with the action of the trial court in refusing to sever counts in the indictment, in refusing to subpoena witnesses for discovery, and in refusing the defense of self-defense, all as noted above. No error having been found in these rulings, they certainly could form no basis for a charge of ineffective assistance of counsel. Upon the record before us we are of the opinion that the District Court properly found no denial of effective assistance of counsel. The judgment of the District Court is affirmed. ON PETITION FOR REHEARING PER CURIAM. This is an appeal from an order of the District Court denying a state prisoner’s petition for habeas corpus relief. This Court affirmed that decision in a memorandum opinion entered upon June 29, 1972. The case is presently before the Court upon a motion for leave to file an untimely petition for rehearing and a suggestion of rehearing en banc. Two affidavits accompany the motion. In each the affiant states that due to an error by a law student with regard to the date of the opinion, the ninety-day period for petitioning for certiorari to the Supreme Court expired. Having considered the motion and the affidavits filed in support thereof, the Court is of the opinion that the affidavits are insufficient to support a delayed filing of the motion to reconsider. In denying the said motion to file a petition for rehearing, the Court has carefully reviewed the petition, the authorities cited therein, the bill of exceptions and the entire record made on this appeal. The single matter now complained of is the failure of the trial court to compel the testimony of Ellie Davis, Jr., and Richard Armstrong, two prison inmates called as witnesses by the defense. A careful reading of the trial record clearly reflects that the testimony of Ellie Davis was proffered in support of the defense that prison conditions justified the riot. The testimony was excluded by the trial judge as irrelevant, and properly so. No error would lie for failure to compel incompetent and irrelevant testimony. The testimony of the witness Richard Armstrong was likewise proffered in the absence of the jury. While the record does not reflect the purpose for which the testimony was proffered, the record reveals no refusal on the part of the Court to compel the witness to testify. While it is true that the trial court did erroneously instruct the witness when it advised him that he would not be compelled to answer questions that might “incriminate or degrade” him, the witness neither requested nor was he granted this privilege. Rather, he expressed an unwillingness to testify unless given assurance against reprisals by prison staff personnel. At this point the examination of the witness ceased without any ruling by the Court or any request for a ruling by the Court. Reluctance of a witness to testify, when it is acceded to by counsel, does not rise to the level of a judicial failure to compel testimony. The petition to rehear will be denied for untimely filing.

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Robbie Mae HATHAWAY, Plaintiff, Appellant, v. WORCESTER CITY HOSPITAL et al., Defendants, Appellees. No. 72-1114. United States Court of Appeals, First Circuit. Heard Jan. 3, 1973. Decided March 22, 1973. Mel L. Greenberg, Worcester, Mass., with whom Teshoian, Greenberg & Drapos, Worcester, Mass., and Matthew Feinberg, Boston, Mass., were on brief, for appellant. Bennett S. Gordon, Asst. City Sol., for appellees. Roger P. Stokey and Goodwin, Procter & Hoar, Boston, Mass., on brief for Planned Parenthood League of Massachusetts, amici curiae. Before COFFIN, Chief Judge, ALD-RICH and McENTEE, Circuit Judges. COFFIN, Chief Judge. Appellant, who has had twelve pregnancies resulting in eight live offspring, and whose life would be jeopardized by future pregnancies, challenges as unconstitutional the policy of the Worcester City Hospital barring the use of its facilities in connection with any consensual sterilization. The following facts are established by the record. Appellant, married and 36 years old at the time of the complaint, suffers from high blood pressure and an umbilical hernia which, in addition to the sheer number of past pregnancies, render future pregnancies a risk to her life. Her blood pressure and heavy, irregular menstrual flow render birth control bills, intrauterine devices and other generally reliable contraceptive means either dangerous or ineffective. A therapeutic sterilization has therefore been recommended by her physician. The correctness of this advice is not disputed. In addition, a psychological ÍCite ivealed that “further preglt represent a sufficiently ¡umstance to result in her deterioration.” Finally, husband, who both work, lined yearly income of ap$7500, which is below the federally defined poverty level for a non-farm family of 10. Although they are insured, through her husband’s employment, by Blue Cross and Blue Shield, their policy, while covering the expenses of childbirth, does not cover the expenses of the recommended' tubal ligation. The hospital is a municipal hospital established pursuant to state law, Mass. Gen.Laws Ann. ch. 40, § 5(20), ch. 266, Mass.Acts of 1953, and city ordinance, ch. 4, § 1, Revised Ordinances of Worcester (1951 ed.), “for the reception of persons requiring relief during temporary sickness.” Being an “acute short term general hospital”, it does not provide indefinite or custodial treatment. The hospital recognizes the right of the appellant, as a resident of Worcester, to in-patient admission for any surgical or other procedure, such as childbirth, which it permits and for the performance of which it has the proper facilities. Although the hospital does not recognize a right of the appellant to have any in-patient procedure done free of its ordinary charges, it would admit her regardless of her financial condition for the performance of any permitted in-patient procedure. The hospital does provide free of charge, through its clinics, both pre-natal and post-partem care for Worcester residents who meet the hospital’s income standards. The cost of a tubal ligation, whether performed in conjunction with a childbirth (in which case it is less expensive, painful, and disruptive of the patient’s life) or separately, is significantly less at the Worcester C|ty Hospital than at nearby private hospitals. In June, 1970, the Board of Trustees, following reijfeipt of an opinion by the Assistant City Solicitor of Worcester, formally adopted its pre-existing policy barring physicians from utilizing operating room facilities or staff personnel employed in support of those facilities, for the purpose of sterilization. Appellee administrator specifically refused appellant’s request that the hospital permit her doctors to perform a tubal ligation at the time of the delivery of her eighth child in April, 1971. Nor was the operation performed after the delivery, despite apparent further requests. In the interim, the instant suit was filed in the district court, pursuant to 42 U.S.C. § 1983, seeking declaratory and injunctive relief and damages. The district court originally dismissed the complaint against the hospital because it was not a body corporate and thus not a proper party; and against the three named doctors, the chief of the surgical division, who is also president of the Board of Trustees, the chief of obstetrics and the administrator, for failure to state a claim. Uncertain of the state law and finding the record inadequate, we remanded the ease for further findings and certification to the Massachusetts Supreme Judicial Court. After several evidentiary hearings, the district court again dismissed the complaint, this time solely on the ground “that plaintiff’s substantive federal claim under 42 U.S. C. § 1983 is without merit”, after concluding that the state law could not reasonably be construed to require the hospital to perform this type of operation. Hathaway v. Worcester City Hospital, 341 F.Supp. 1385, 1387 (D.Mass.1972). After a further remand to determine other facts, this appeal is now ripe for adjudication. The Assistant Solicitor’s opinion, on which the hospital’s policy is based, was that the legality of sterilization operations was “highly doubtful”, in the light of Massachusetts statutes concerning birth control assistance, Mass.Gen.Laws Ann. ch. 272, §§ 19, 20, 21 A, and in any event, at least non-therapeutic sterilizations were beyond the hospital’s charter authority. Whatever merit his conclusion as to the illegality of such operations may have had at the time, subsequent authority makes it clear that the Commonwealth no longer has, or could have, such an all-encompassing anti-birth control policy as he took the cited statutes to describe. Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972); Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973); Doe v. Bolton, 410 U.S. 179, 93 S.Ct. 739, 35 L.Ed.2d 201 (1973). As to the issue of authority, we conclude that the hospital is neither required nor forbidden to perform such operations. Section 2 of chapter 266 of the Mass.Acts of 1953, which re-enacted and modified the provisions of the earlier law establishing the Worcester City Hospital, ch. 339, Mass.Acts of 1871, states: “The Worcester City Hospital is established for the reception of persons requiring relief during temporary sickness, including paying patients, and of such persons settled in the City of Worcester who by misfortune or poverty may require such relief.” Section 4 merely provides that the Board of Trustees has the power to make rules and regulations as are deemed expedient and not inconsistent with law. The city ordinance similarly states the hospital’s purpose and the power of the Trustees to ipake rules and regulations. §§ 1, 5, ch. 4, Revised Ordinances of Worcester. The general statute concerning city hospitals, ch. 40 § 5(20), and the specific authorizing statutes for other city hospitals use the identical language in stating the purpose of their establishment. Neither we nor the parties have found any state interpretation of the key words “relief during temporary sickness” or of the nature of a city hospital’s obligations to perform procedures arguably or indisputably covered by that phrase. By stipulation, however, it appears that at the appellee hospital, “[t]he range of surgical problems and services includes, but may not be limited to” appendectomies, varicose veins, pilonidial cystectomies, hemorrhoidectomies, circumcisions, “andMther less complicated prophylactic surMfal procedures, such as removal of wth stones”. In addition, “the Board of tees has permitted surgeons who spe|HK' in the field of plastic or cosmetiij|PB|;ery to perform certain types of procedures, including but not limited to rhinoplasty, [known colloquially as plastic n<f)se surgery] [and] skin graph's [sic]!” The Assistant Solicitor concedes that many of these procedures do not fall within the narrow reading of “temporary sickness” which he would apply to sterilizations. We also know through evidence that tubal ligations are regularly performed at both Boston and Cambridge City Hospitals, in the former “almost on demand”, both hospitals being subject to the same general authorizing statute. The differing hospital practices suggest to us the most obvious and reasonable interpretation of the authorizing statutes and ordinance: that the range of services to be provided by the hospital is to be determined by the hospital’s board of trustees, limited only by inconsistent provisions of law and the hospital’s broad general mandate. Thus, for example, we think it clear that the hospital could not, until recent times, have liberally permitted abortions or prescribed contraceptives. Similarly, it could not restrict itself to the indefinite care of mentally retarded children or bar poor residents of Worcester. Yet, within that broad area, the board may set policies commensurate with its budget, facilities, the ability of its staff, its role as an educational hospital for young interns and residents, the needs of the community, and other similar relevant factors. Probably the most significant factor dictating such an open-ended definition is the anticipation of change in medical science. Freezing the hospital’s services at those common in 1871; f|s the Assistant Solicitor suggested, even those common in 1953 would dátate obsolescence. Moreover, whatever the definition of “sickness” may have been in ear-Her epochs, it now encompasses “ [a] condition or an episode marked by pronounced deviation from the normal healthy state”, Borland’s Illustrated Medical Dictionary, 24th ed., or “a disordered, weakened, or unsound condition”, Webster’s New International Dictionary, 3d ed. Removal of tonsils or an appendix highly susceptible to infection or, as the stipulation describing the appellee’s services notes, “excisions of benign tumors which could cause subsequent neurological problems”, would seem not only required by sound medical practice but consistent with a more expansive reading of “sickness”. The same could be said of termination of appellant’s capacity for childbearing. On the other hand, requiring the performance of every new available procedure which could help remedy anything encompassed by a modern delineation of “sickness”, would impose vast budgetary, administrative and physical re-ordering without regard to community or hospital needs. We thus do not believe that, in the absence of constitutional considerations, the Massachusetts Supreme Judicial Court would require a city hospital to perform a specific surgical procedure if its general operations were sufficiently broad-based to satisfy the statutory purpose or that it would bar any specific operation absent a clear statutory prohibition, not present here. Although we realize that the state statute might fairly have been interpreted differently by the Massachusetts court, we now believe it imperative not to further delay decision of this controversy which vitally affects the appellant’s very life, Zwickler v. Koota, 389 U.S. 241, 252, 88 S.Ct. 391, 19 L.Ed.2d 444 (1967); Harman v. Forssenius, 380 U.S. 528, 537, 85 S.Ct. 1177, 14 L.Ed.2d 50 (1965); Baggett v. Bullitt, 377 U.S. 360, 379, 84 S.Ct. 1316, 12 L.Ed.2d 377 (1964). We therefore decline to exercise our discretionary power to abstain or certify the question. Baggett, 377 U.S. at 375, 84 S.Ct. 1316. Appellee’s principal present argument is that even if it is not in any way impermissible to perform this procedure, the Trustees are free to decide what they will and will not do. Even under the “rational relationship” test applied in Eisenstadt v. Baird, supra, 405 U.S. at 447, 92 S.Ct. 1029, we might have had difficulty in upholding the policy of a complete ban on sterilizations. For here the evidence shows that tubal ligations involve no greater risk than appendectomies, which the hospital regularly performs, and by inference, than the other listed procedures of like complexity which are also performed. In addition, elective surgery, of unspecified risk, is permitted, though not in any sense therapeutic. No special facilities, equipment or staff are required for a ligation. But it seems clear, after Roe and Doe, that a fundamental interest is involved, requiring a compelling rationale to justify permitting some hospital surgical procedures and banning another involving no greater risk or demand on staff and facilities. While Roe and Doe dealt with a woman’s decision whether or not to terminate a particular pregnancy, a decision to terminate the possibility of any future pregnancy would seem to embrace all of the factors deemed important by the Court in Roej in finding a fundamental interest, 410 U.S. at 155, 93 S.Ct. 705, but in magJ nified form, particularly so in this casá given the demonstrated danger to appellant’s life and the eight existing children. The state interests, recognized by Roe as legitimate, are far less compelling in this context. Whatever interest the state might assert in preserving the possibility of future fetuses cannot rival its interest in preserving an actual fetus, which was found sufficiently compelling to outweigh the woman’s interest only at the point of viability. The state maintains of course a significant interest in protecting the health and life of the mother who, as here, cares for others whom the state might otherwise be compelled to provide for. Yet whatever health regulations might be appropriate to vindicate that’ interest, and on the present record we need not decide the issue, it is clear under Roe and Doe that a complete ban on a surgical procedure relating to the fundamental interest in the pregnancy decision is far too broad when other comparable surgical procedures are performed. Doe is particularly apposite' in this regard. The Court there struck down the Georgia requirements of advance approval of an abortion by a hospital committee of three staff members and the additional concurrence of two doctors other than the patient’s attending physician, primarily on the ground that “We are not cited to any other surgical procedure made subject to committee approval” and “no other voluntary medical or surgical procedure for which Georgia requires confirmation by two other physicians has been cited to us.” 410 U.S. at 199, 93 S.Ct. at 751. Here we are cited to no other surgical procedure which is prohibited outright and are told that other procedures of equal risk are performed and that non-therapeutic procedures are also permitted. Doe therefore requires that we hold the hospital’s unique ban on sterilization operations violative of the Equal Protection Clause of the Fourteenth Amendment. In so holding, we are not mandating the city or state to maintain this hospital, or to retain its present size, staff or facilities. The hospital is not required to perform all kinds of non-therapeutic or even all therapeutic surgical procedures. We are merely saying, consistent with the Supreme Court’s reasoning in Shapiro with regard to welfare payments, that once the state has undertaken to provide general short-term hospital care, as here, it may not constitutionally draw the line at medically indistinguishable surgical procedures that impinge on fundamental rights. See Klein v. Nassau County Medical Center, 347 F.Supp. 496 (E.D.N.Y.1972), appeals pending, 410 U.S. 922, 93 S.Ct. 1361, 35 L.Ed. 584 (1973) (New York’s refusal of Medicaid assistance for performance of other than “medically indicated” abortions denies equal protection to indigent pregnant women seeking abortions for other reasons). Accordingly, we reverse and remand for entry of an order declaring the Worcester City Hospital’s policy against the use of its facilities in conjunction with sterilization operations unconstitutional and enjoining the individual appellees from enforcing the policy in the future. Since we are uncertain whether the appellant will press her claim for damages, and since there is no record relating to damages, we intimate presently no views in that regard. Reversed and remanded for further proceedings consistent with this opinion. . Although sterilization of her husband would be an equally effective means of insuring against all future pregnancies, the hospital’s ban applies to sterilization of both males and females. Thus even were such a course recommended or considered, the status of this ease would not change. . Although in a strict sense, Roe and Doe could be said only to establish that the sterilization decision may not be made subject to criminal sancmns, fundamental interests are not protected only against affirmative state impositions. Rather, as the many voting, see, e. g., Carrington v. Rash, 380 U.S. 89, 85 S.Ct. 775, 13 L.Ed.2d 675 (1965), Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972), and welfare cases, see, e. g., Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), indicate, any infringement of a fundamental interest, including a simple denial of a benefit must be carefully scrutinized. . We note that one medical witness testified that a ligation at the time of childbirth would not be considered as “any hazard to the patient”. Moreover, the comparability of risk between an independent ligation and an appendectomy suggest that the restrictions on the former should be no greater than those imposed on the latter. Finally, health regulations would have to account for cases such as the appellant’s in which the operation’s value in preserving life and health might •be said to outweigh the health dangers involved in the operation itself. . In the course of discussing the committee requirement, the Court mentioned that the hospital there was in any case protected by a statutory provision leaving it free not to admit a patient for an abortion. The Court, however, promptly .noted that this provision was “obviously” designed to provide protection to “the denominational hospital”. Id., 410 U.S. at 198, 93 S.Ct. 739. The Court’s use of this provision as partial explanation of the invalidity of the committee requirement cannot, of course, be taken as approving a similar ban in a state or state-supported hospital, like the appellee, which is subject to the First and Fourteenth Amendments of the Constitution. . Although we fr^sse our holding in equal protection terms, we note that Roe and Doe establish that the samé compelling interest analysis applies when fundamental rights are adjudicated in due process terms. . Since we believe that Roe and Doe require that we strike down the hospital policy, we have no occasion to consider the constitutional significance of the fact that this policy’s primary impact is upon the indigent, that the ban is consonant with the views of a certain religious group, or that the general state authorizing statute, as applied in the various municipal hospitals of the Commonwealth, discriminates on the basis of the geographic residence of its citizenry. . In its motion to dismiss and here on appeal the hospital claimed that it was not liable because it was not a “person” within the meaning of § 1983, citing Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961). Since it is clear from the record that the hospital is a department of the city of Worcester, it is not subject to damages. Henschel v. Worcester Police Dept., 445 F.2d 624 (1st Cir. 1971). The circuits are split, however, on whether Monroe also means that municipalities are immune from equitable relief. Compare, e. g., Harkless v. Sweeny Independent School District, 427 F.2d 31 (5th Cir. 1970) with Deane Hill Countr., Club, Inc. v. City of Knoxville, 379 F.2d 321 (6th Cir. 1967). We need not decide this complex issue here since a declaration and injunction against the relevant supervising hospital officials will fully satisfy appellant’s claim.

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Ruth ROBINSON, Plaintiff-Appellant, v. The BOARD OF REGENTS OF EASTERN KENTUCKY UNIVERSITY, a Body Corporate, and Robert R. Martin, President of Eastern Kentucky University, Defendants-Appellees. No. 72-1867. United States Court of Appeals, Sixth Circuit. March 28, 1973. Robert Allen Sedler, Lexington, Ky., for plaintiff-appellant. Bert T. Combs, Louisville, Ky., for defendants-appellees; Charles R. Simons, Louisville, Ky. (Tarrant, Combs, Blackwell & Bullitt, Louisville, Ky., of counsel), John W, Palmore, Richmond, Ky., on brief. Before PHILLIPS, Chief Judge, KENT, Circuit Judge, and McALLISTER, Senior Circuit Judge. PHILLIPS, Chief Judge. This is another case in which this Court is urged to assume the prerogatives of a super Board of Regents and make a decision concerning the internal administrative affairs of a university involving no violation of any constitutional right of any student. This we decline to do. Like many universities and colleges, Eastern Kentucky University promulgated dormitory hour regulations for women students during the 1971-72 academic year. During their freshman year, women students were required to be in their dormitories by 10:30 p. m. Monday through Thursday. The curfew hour on Friday and Saturday nights was 1 a.'m. and 12:00 midnight was the Sunday curfew. Beginning with the second year of study, the women students could have the privilege of unrestricted hours with no curfew requiring their presence in their dormitory by a certain hour. Three conditions had to be met, however, to qualify for this privilege: 1) the student was required to have a C average in her academic work and not be on academic or social probation; 2) she was required to pay a $15 fee' per semester; 3) if under 21, the student was required to gain her parents’ written consent to the exercise of self-regulated hours. Those sophomore, junior and ior women failing to qualify for unrestricted hours were required to be in their dormitories by midnight Sunday through Thursday and by 2 a. m. on Friday and Saturday nights. The "regulations were issued by the Board of Regents of the University, an agency of the Commonwealth of Kentucky, K.R.S. § 164.310. These regulations were clearly those of the State. During the pendency of this action, the University announced new regulations in this area. First semester freshman women, under the new regulations, are required to be in their dormitory by midnight Sunday through Thursday and by 2 a. m. on Friday and Saturday nights. All other women students in the University can have self-regulated hours by paying a $10 fee per semester and gaining permission of their parents if they are under 21. All women who do not have self-regulated hours are subject to the same curfews as the first-semester freshmen. It should be noted that at no” time relevant to this action, either under the ojd or new regulations, have there been any curfew restrictions on male students at; Eastern Kentucky. Appellant^ class action was filed in the District Court for the Eastern District of Kentucky during the 1971-72 school year when she was a freshman at Eastern Kentucky. She claims that the University, by imposing dormitory hours for women, while granting self-regulated hours to all male students, regardless of age or permission from their parents, has violated her Fourteenth Amendment right to the equal protection of the law. Appellant appeals from the dismissal of her suit by the District Court. We affirm. Appellant was a sophomore at the University at the time of the District Court’s dismissal of her suit. She claims that even though under the presently applicable dormitory regulations she can, and does, have self-regulated hours with her parents’ permission, the fact that she must get her parents’ permission for unrestricted hours while male students need not get such permission results in a continuing denial of her equal protection rights. In view of our disposition of this case we need not decide this issue. At the outset, we point out that students, no less than any other citizens of the United States, are protected by the Constitution of the United States. For a general discussion, see Wright, The Constitution on the Campus, 22 Vand.L.Rev. 1027 (1969). As the Supreme Court stated, in Tinker v. Des Moines School District, 393 U.S. 503, 506, 89 S.Ct. 733, 736, 21 L.Ed.2d 731 (1969): “It can hardly be argued that either students or teachers shed their constitutional rights ... at the schoolhouse gate.” See also Healy v. James, 408 U.S. 169, 180, 92 S.Ct. 2338, 33 L.Ed.2d 266 (1972). Although Tinker concentrated on the First Amendment rights of students, we construe it as equally applicable to all constitutional protections. It also is clear that the state, in operating a public system of higher education, cannot condition attendance at one of its schools on the student’s renunciation of his constitutional rights. West Virginia v. Barnette, 319 U.S. 624, 63 S.Ct. 1178, 87 L.Ed. 1628 (1943); Dixon v. Alabama State Board of Education, 294 F.2d 150 (5th Cir. 1961); Knight v. State Board of Education, 200 F.Supp. 174 (M.D.Tenn.1961). However, the Supreme Court has recognized repeatedly that the campus presents a unique situation which imposes special considerations in the application of Constitutional protections and “judicial interposition in the operation of the public school system of the Nation raises problems requiring care and restraint Epperson v. Arkansas, 393 U.S. 97, 104, 89 S.Ct. 266, 270, 21 L.Ed.2d 228 (1968). See also Tinker, supra, 393 U.S. at 507, 89 S.Ct. 733; Bright v. Nunn, 448 F.2d 245 (6th Cir. 1971); Norton v. Discipline Committee of East Tennessee State University, 419 F.2d 195 (6th Cir. 1969). The equal protection clause does not require identical treatment for all people. The states retain, under the Fourteenth Amendment, the power to treat different classes of persons in different ways. Reed v. Reed, 404 U.S. 71, 75-76, 92 S.Ct. 251, 30 L.Ed.2d 225 (1971); McDonald v. Board of Election Commissioners, 394 U.S. 802, 89 S.Ct. 1404, 22 L.Ed.2d 739 (1969); Barbier v. Connolly, 113 U.S. 27, 5 S.Ct. 357, 28 L.Ed. 923 (1885). This is a well-established doctrine, dating from soon after the ratification of the Fourteenth Amendment. Courts often have upheld state classifications based on sex. Hoyt v. Florida, 368 U.S. 57, 82 S.Ct. 159, 7 L.Ed.2d 118 (1961); Schattman v. Texas Employment Commission, 459 F.2d 32 (5th Cir. 1972), cert. denied, - U.S. -, 93 S.Ct. 901, 34 L.Ed.2d 688 (1973); Gruenwald v. Gardner, 390 F.2d 591 (2d Cir.), cert. denied, 393 U.S. 982, 89 S.Ct. 456, 21 L.Ed.2d 445 (1968). Therefore, the appellant has not overcome the presumptive validity of the state regulations involved, McDonald, supra, merely by showing that one set of rules applied to men and another to women students at Eastern Kentucky. Before addressing the question of whether there has been a deprivation of the right of appellant to equal protection of the law, we must determine which standard of review will be applicable. Two separate and distinct standards of review under the equal protection clause have emerged. The first, which has a much longer history, is the traditional or rational basis test. It requires that a state classification be upheld unless there is' no rational relationship between the classification imposed by the state and the state’s reasonable goals. Under this standard, “[a] statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it.” McGowan v. Maryland, 366 U.S. 420, 426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393 (1961). See also Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S.Ct. 337, 55 L.Ed. 369 (1911). The second alternative standard, the compelling state interest test, is relatively recent in formulation and provides a greater burden for the state to meet in justifying a classification in its statutes or regulations. This test, which becomes applicable when a fundamental right of the aggrieved party is at issue or a suspect classification, such as race, is used, requires that to justify the classification, the state must demonstrate a compelling state interest. Fundamental interests which have triggered the application of the compelling state interest test have included the right to vote, Dunn v. Blumstein, 405 U.S. 330, 337, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); Evans v. Cornman, 398 U.S. 419, 422, 90 S.Ct. 1752, 26 L.Ed.2d 370 (1970); the right to interstate travel, Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969); the right to procreate, Skinner v. Oklahoma ex rel. Williamson, 316 U.S. 535, 541, 62 S.Ct. 1110, 86 L.Ed. 1655 (1942); and the right to fair treatment in criminal appeals, Griffin v. Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891 (1956). At least one commentator has observed that the Supreme Court seems to be very reluctant to extend the scope of the so-called “new equal protection” and declined to insert its application into new areas last Term. Gunther, The Supreme Court 1971 Term: Foreword, 86 Harv.L.Rev. 1, 12-13 (1972). In its most recent case involving discrimination on the basis of sex, the Supreme Court, although striking down the Idaho statute in question, did not apply the compelling state interest standard. Instead, in Reed, supra, 404 U.S. at 76, 92 S.Ct. at 254, the Court carefully framed the issue as “whether a difference in the sex of competing applicants for letters of administration bears a rational relationship to a state objective . . . .” (emphasis added). By the holding, the Court impliedly denied the contention of the appellant in that case that sex is a “suspect classification,” capable of triggering the application of the compelling state interest standard. The most recent case in this circuit concerning discrimination on the basis of sex also imposed the rational relationship test and refused to find that discrimination by sex was a suspect classification. Morris v. Michigan State Board of Education, 472 F.2d 1207 (6th Cir. 1973). Likewise, in this case we can find neither a fundamental right at issue nor_ja. suspect classification being applied. yThe right which is the subject of regulation here is the right to have self-regulated hours without parental permission. This is not fundamental. We reaffirm that classification on the basis of sex is not a suspect classification. "^Therefore, we conclude that the rational relationship or traditional standard of equal protection review is applicable here. The State’s basic justification for the classification system is that of safety. It asserts that women are more likely to be criminally attacked later at night and are physically less capable of defending themselves than men. It concludes that the safety of women will be protected by having them in their dormitories at certain hours of the night. The goal of safety is a legitimate concern of the Board of Regents and this court cannot say that the regulations in question are not rationally related to the effectuation of this reasonable goal. The appellant claims that the safety justification is undermined by the shifting curfew for different nights of the week asserting that the streets are no safer at 12:30 a. m. on Saturday than they are at 12:30 a. m. on Wednesday. We hold, however, that the State could properly take into consideration the fact that on weekend nights many coeds have dates and ought to be permitted _tp_.stay out — later than on weekday nights. A" classification having some reasonable basis does not offend the equal protection clause merely because it is not drawn with mathematical nicety. Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970); Lindsley, supra. We are mindful of this court’s recent decision in LaFleur v. Cleveland Board of Education, 465 F.2d 1185 (6th Cir. 1972), petition for cert. granted, 41 U.S.L.W. 3565 (April 23, 1973). We conclude that our affirmance of the District Court in the present case is not inconsist with the majority opinion in LaFleur, in which this court held that a rule requiring pregnant teachers to take a 5-month pre-delivery leave was unconstitutionally discriminatory. The core of that opinion was that men, as well as women, are subject to “illnesses and disabilities,” while only pregnant women were required to take leave. The LaFleur regulation was struck down for overbreadth. We do not read LaFleur or any other ease as holding or implying that discrimination based on sex is unconstitutional per se. We hold that the Board of Regents of Eastern Kentucky, an agency of the Commonwealth, has promulgated a reasonable regulation to promote the legitimate aims of the state. Affirmed. . The District Court found that the $10 fee per semester under the new regulations charged to those women with unrestricted or self-regulated hours is “to defray the cost of security guards and additional monitoring services necessary for those dormitories which remain open all night.” The men’s dormitories on the campus do not have such service. Presumably, the same justification was present for the $15 fee under the original regulations. No contention is made by the appellant that the fee is improper or in any way restrictive of her rights.

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Paul J. BORDALLO, Plaintiff-Appellant, v. Carlos G. CAMACHO, Defendant-Appellee. No. 72-2259. United States Court of Appeals, Ninth Circuit. March 9, 1973. Howard G. Trapp, of Trapp, Gayle & Co., Agana, Guam, for plaintiff-appellant. Vincent T. Perez, Atty. Gen., Richard D. Magee, Deputy Atty. Gen., William S. Amsbarg, Asst. Atty. Gen., Agana, Guam; Stuart R. Foutz, San Bruno, Cal., John Peter Saul, San Francisco, Cal., for defendant-appellee. Kent Frizzell, Asst. Atty. Gen., Jacques B. Gelin, Henry J. Bourguinon, Attys., Dept, of Justice, Washington, D. C., amicus curiae. Before CHAMBERS, ELY and WALLACE, Circuit Judges. PER CURIAM: On behalf of the Government of Guam, Governor Carlos G. Camacho executed a land exchange agreement with the United States of America on April 26, 1972. It called for the exchange of Guamanian public land in the area of Sella Bay for certain land on Guam owned by the United States. Paul Bordallo, a Guam senator, taxpayer and owner of land in the vicinity of Sella Bay, sued to enjoin the exchange until approval by the Guam legislature. The trial court denied the request for preliminary and permanent injunctions and dismissed the action. We reverse. The land in question was transferred by the United States to Guam in 1952. The transfer document stipulated: [I]f the Government of Guam, without the prior approval of the Secretary of the Interior, sells, leases or otherwise disposes of said lands . . . title to such . land shall automatically revert to the United States. (Emphasis added.) The Governor contended, and the district judge agreed, that the legislature cannot restrict the Governor in making his proposal to the Secretary of the Interior and disposing of the land. This overlooks the fact that the Guam legislature is a part of the “government of Guam,” Organic Act of 1950, 48 U.S.C. § 1421a, and as such can put appropriate conditions on any request to the Secretary of the Interior which the law allows. Clearly, the Organic Act allows the legislature to act in reference to this land so long as it does not do so inconsistently with acts of Congress. In response to this mandate, the legislature has passed two statutes which require interpretation. In 1953, Guam Government Code § 13524 was adopted; it provides in part: [T]he Governor of Guam may transfer, with the recommendation of the Land Transfer Board, any interest in the land of the government of Guam which he deems necessary for the functions of the United States of America .... (Emphasis added.) In 1970, Guam Government Code § 13525(c) was adopted: Whenever lands owned by the United States of America are required by the government of Guam for a program or project specifically authorized by law, the Director of Land Management, with the approval of the Governor and the concurrence of the Legislature by resolution, may exchange such lands with lands owned by the government of Guam and cash as to equalize respective values of such properties. (Emphasis added.) The only logical interpretation is that the legislature intended in 1970 to carve out of the general transfer authorization granted to the governor in 1953 those land exchanges specified in § 13525(c). This proposed exchange falls within the ambit of § 13525(c). Evidence indicated that the lands to be exchanged by the United States were required by Guam for a program or project authorized by law. Therefore, § 13525(c) applies, and the exchange must be made by the Director of Land Management subsequent to the approval of the Governor and the concurrence of Guam’s legislature. This matter is reversed and remanded to the district court for further proceedings consistent with this opinion. CHAMBERS, Circuit Judge (concurring) : I concur in the decision. However, I read Section 13525(c) of the Guam Government Code as requiring the concurrence of the Legislature only when the Government of Guam initiates a land exchange and not, as here, where the impetus came from the United States. To some degree I think my view is confirmed by the Guam Legislature’s action in 1972 in amending § 13524. (Guam Public Law 11-213 (1972)). . We do not deem the United States to he an indispensable party to this litigation. Indeed, the amicus curiae brief filed by the United States in reponse to our request states at page 3: The Navy considers the present disagree-Legislature of Guam concerning the aument between the Governor and the thority to transfer these lands, to be a question internal to the affairs of Guam in which the United States should not intervene. . Transfer of Land to the Government of Guam, Department of Land Management Document No. 25219. . 48 U.S.O. § 1421f provides in part: (a) The title to all property, real and personal, owned by the United States and employed by the naval government of Guam in the administration of the civil affairs of the inhabitants of Guam, including automotive and other equipment, tools and machinery, water and sewerage facilities, bus lines and other utilities, hospitals, schools, and other builldings, shall he transferred to the government of Guam within ninety days after August 1, 1950. (b) All other property, real and personal, owned by the United States in Guam, not reserved by the President of the United States within ninety days after August 1, 1950, is placed under the control of the government of Guam, to he administered for the benefit of the people of Guam, and the legislature shall have authority, subject to such limitations as may be imposed upon its acts by this chapter or subsequent Act of the Congress, to legislate with respéot to such property, real and personal, in such manner as it may deem desirable. (Emphasis added.) . § 13524 was amended in 1972 to read as follows: Section 13524. United States agencies. Upon receipt of a request from an authorized representative of an agency of the government of the United States of America, the Governor of Guam may transfer, with the recommendation of the Land Transfer Board, and with the concurrence of the Guam Legislature by a resolution duly adopted by a majority of its members, any interest in land of the government of Guam which he deems necessary for the function of the United States of America and its agency. (Emphasis added.) Guam Pub.L.No.11-213, § 1 (Dec. 29, 1972). . The district judge made the following findings: [T]hat the Government of Guam also has need for certain land and interests in land owned by the United States in Guam. In consideration of the agreement by the Government of Guam to convey lands and interests in land in the Sella Bay area to the United States, the United States will execute a Joint Use Agreement for the use of certain facilities at the United States Naval Air Station, Agana, Guam, and a lease of certain non-excess lands in the Masso Reservoir area. The United States of America and the Government of Guam under the Agreement have also agreed to enter into a joint use conservation plan for the Susa River area, including public use consistent therewith. The United States of America has also agreed to relinquish control to the Government of Guam of the Island-Wide Power System, a successful commercial operation. Included in the Joint Use Agreement executed between the United States of America and the Government of Guam is the use of certain facilities at the United States Naval Air Station which are necessary to the efficient and safe operation of the Guam International Airport. The airport terminal and other facilities connected therewith are owned by the Government of Guam, but its operation must comply with certain basic standards necessary for efficiency and safety. The Federal Aviation Administration is charged by law for seeing that basic standards are complied with. The Guam International Airport is within the cognizance of the Federal Aviation Administration. At the request of the Government of Guam, the Honolulu Regional Office of the Federal Aviation Administration has undertaken studies, inspection and examination of the existing facilities at the Guam International Airport for the purpose of enabling Guam to be eligible for a grant from the United States, i. e., federal grant for airport facilities. As a result of the studies, it is discovered that the apron and ramp areas utilized by commercial airlines are in very bad shape, fast approaching the unsafe standard, thus necessitating a daily inspection by the local agency of the Federal Aviation Administration. By virtue of the Joint Use Agreement, the Government of Guam has obtained from the United States of America the necessary facilities and area space required to make Guam eligible under the federal airport grant. The immediate effect is that a little over one million dollars of federal grant on a matching basis is now available to Guam to develop the existing facilities at the Guam International Airport to meet the basic needs and standards of a sound and safe airport operation. The Guam International Airport is the only access to Guam via commercial aircraft. It is the main traffic channel of tourists coming to Guam.

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UNITED STATES of America, Appellee, v. George F. CABRAL, Defendant, Appellant. No. 72-1336. United States Court of Appeals, First Circuit. Heard Jan. 3, 1973. Decided March 23, 1973. Wayne P. Libhart, Brewer, Me., by appointment of the Court, with whom Joseph L. Ferris and Libhart & Ferris, Brewer, Me., were on brief, for appellant. John B. Wlodkowski, Asst. U. S. Atty., with whom Peter Mills, U. S. Atty., was on brief, for appellee. Before COFFIN, Chief Judge, ALD-RICH and McENTEE, Circuit Judges. McENTEE’, Circuit Judge. After trial by jury appellant, George F. Cabral, was convicted on a one count indictment for possession of a firearm which was not identified by a serial number in violation of 26 U.S.C. § 5861 (i) (1970). On appeal he urges that this conviction may not stand because he was denied a speedy trial and also because of an alleged deficiency in the government’s proof. For the reasons set forth below, we find appellant’s contentions to be without merit and affirm the conviction. In order to evaluate appellant's speedy trial claim the underlying facts must be set forth in some detail. On October 4, 1970, State Police Sergeant Graves and Deputy Sheriff Goggin drove to a cabin located in a remote section of the Schoodic Lake region of Brownville, Maine, to investigate a report that parts from a stolen vehicle were being sold there. When the officers, who were dressed in plain-clothes and were driving an unmarked car, arrived at the camp, they approached appellant and one Martin Chase and asked them if they had any mag wheels for sale. After showing the officers some automobile parts inside the cabin, appellant said that he had some additional ones stored in the woods behind the camp. Before leaving the cabin, however, he pulled out the firearm in question, a shotgun which had both the barrel and butt sawed off, and announced that he was taking it along just “to keep things honest.” The foursome then proceeded down a woods road which ran alongside the camp. About seventy-five yards down the road a Chevrolet Corvette came into view. Before they reached the car, however, Sergeant Graves ordered appellant to freeze, identified himself as a police officer, and, after a brief struggle, placed him under arrest. When appellant asked why he had been arrested, Graves said for possession of the sawed-off shotgun “as openers.” After the officers checked the engine number on the Corvette, they arrested appellant and Chase for possession of stolen property. Thereafter appellant was transported to a local jail and eventually he was arraigned in state court on a charge of grand larceny. Approximately one month later he was transferred to a Connecticut state prison where he was held for past parole violations. In the meantime, on October 7, 1970, the weapon in question was turned over to federal authorities. On January 18, 1972, some fifteen months later, appellant was indicted for possession of this weapon and in February 1972 a detainer warrant was served on prison officials in Connecticut. After being released on April 15, 1972, appellant was arraigned in Maine on this charge on May 3 and on May 18, through counsel, he moved to dismiss the indictment pursuant to Rule 48(b), Fed.R.Crim.P., on the basis of the pre-indictment delay. This motion was denied and in September trial and conviction followed. In Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), the Supreme Court considered the sixth amendment speedy trial guarantee and refused to adopt an inflexible standard when dealing with claims based upon this provision. Rather, the Court mandated the use of an ad hoe balancing test in which the length of delay, the reason for the delay, the accused’s assertion of his right, and the prejudice to the accused resulting from the delay, along with other relevant circumstances, were to be taken into consideration in analyzing speedy trial claims. No single factor was to be regarded “as either a necessary or sufficient condition to the finding of a deprivation of the right of speedy trial .... [T]hese factors have no talismanic qualities; courts must . . . engage in a difficult and sensitive balancing process. [Footnote omitted.]” Id. at 533, 92 S.Ct. at 2193. In applying this standard in the instant case, the first question which must necessarily be faced' is the extent of the delay. As appellant points out, fifteen months elapsed between his arrest and the return of the indictment and an additional eight months passed between indictment and trial. The government contends, however, that the fifteen month period should not be counted since the arrest for possession of the shotgun was a mere “temporary device” used to restrain appellant until the Corvette’s engine number could be checked and he could be arrested for possession of stolen property. This argument is not persuasive. In United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971), the Court held: “it is either a formal indictment or information or else the actual restraints imposed by arrest and holding to answer a criminal charge that engage the particular protections of the speedy trial provision of the Sixth Amendment.” Id. at 320, 92 S.Ct. at 463. In the instant case the testimony of Sergeant Graves unequivocally demonstrates that he arrested appellant for possession of the illegal firearm. The government’s prosecution of this charge was initiated only three days later when, on October 7, 1970, state authorities turned over this weapon to a federal officer. Under these circumstances, regardless of the almost simultaneous arrest for possession of stolen goods, it is clear that appellant’s right to a speedy trial crystallized at the time of his initial arrest. On the other hand, appellant’s attempt to include the eight month period which passed between the return of the indictment and the time of his trial as a part of the claimed delay is equally impermissible. As the pretrial memorandum and the September 7, 1972, motion which he filed indicate, the basis for his attack on the indictment in the district court was that “there was unnecessary delay in presenting the charge against [him] to the grand jury from the time of the arrest ... to the return of the bill.” When appellant’s initial motion to this effect was presented at the pretrial hearing in May 1972, he made no demand for an immediate trial and did not object to having his case continued until September. Under these circumstances, appellant may not complain about any post-indictment delay. His claim is thus limited to the fifteen month period which passed between the time of his arrest and the return of the indictment. Turning next to the reasons for this delay, we note initially that since we consider only pre-indictment delay this is obviously not a case in which some portion of the delay may be attributed to appellant either as the result of difficulties he had .in managing his defense or because he purposely chose to employ a dilatory tactic in meeting this charge. See United States v. Daley, 454 F.2d 505, 508-509 (1st Cir. 1972). On the other hand, as appellant recognizes, there is no evidence which indicates that the prosecution acted in any improper manner in order to hamper the preparation of his defense. In the absence of any plausible explanation by the government for its sloth in obtaining this indictment, however, we conclude that this delay probably resulted from neglect. Delays of this sort, like those caused by over-crowded courts, although “more neutral” than intentional delays, are, of course, still viewed with disfavor. Barker, supra, 407 U.S. at 531, 92 S.Ct. 2182. Cf. Uviller, Barker v. Wingo: Speedy Trial Gets A Fast Shuffle, 72 Colum.L.Rev. 1376, 1386-87 (1972). With regard to appellant’s obligation to assert his right, it is undisputed that he did not waive his claim as to the pre-indictment delay by his failure to move for the dismissal of the indictment until May 1972. Until he was indicted, he could not have known with certainty that he was going to be prosecuted for this offense. Thereafter, as soon as he had been released from prison, he retained counsel and, having been apprised of the possibility of a speedy trial defense, moved to quash the indictment on that basis. In so doing, appellant acted with sufficient haste to preclude the possibility of waiver. See United States v. Butler, 426 F.2d 1275, 1278 (1st Cir. 1968). A fourth factor to consider is the extent to which appellant has been prejudiced by this delay. In evaluating this indicium, reference must be made to the purposes which underlie the speedy trial provision which the Court in Barker, supra, 407 U.S. at 532, 92 S.Ct. at 2193 identified as the following: “(i) to prevent oppressive pretrial incarceration; (ii) to minimize anxiety and concern of the accused; and (iii) to limit the possibility that the defense will be impaired. [Footnote omitted.]” In Smith v. Hooey, 393 U.S. 374, 89 S.Ct. 575, 21 L.Ed.2d 607 (1969), the Court fleshed out the meaning of these factors as they apply to individuals who are incarcerated in one jurisdiction while charges are pending against them in another. With regard to factor (i), the Court noted that prejudice might result from the loss of the possibility of receiving “a sentence at least partially concurrent with the one [being served.]” In addition, the pendency of another charge might also cause an increase in the duration of the present imprisonment and a worsening of the conditions under which that sentence must be served. Id. at 378, 89 S.Ct. at 577. As to factor (ii), the Court recognized that a pending charge “can have fully as depressive an effect upon a prisoner as upon a person who is at large.” Id. at 379, 89 S.Ct. at 577. Finally, as to factor (iii), the difficulties one faces in preparing his defense are obvious. “Confined in a prison, perhaps far from the place where the offense covered by the outstanding charge allegedly took place, [one’s] ability to confer with potential defense witnesses, or even to keep track of their whereabouts, is obviously impaired.” Id. at 379-380, 89 S.Ct. at 578. When appellant’s claim is analyzed under these criteria, however, he fares none too well. In the first place, with regard to the possibility that this charge increased the duration or exacerbated the conditions of appellant’s prison stay, we note that here the detainer was not served on Connecticut prison officials until sometime after February 3, 1972, no more than two months before appellant was released. Given this circumstance, as well as the fact that appellant has not alleged that he suffered any privation in this regard, we may assume that the effects of this charge on the term and conditions of his imprisonment were minimal. Much the same may be said for any “anxiety or concern” which he may have suffered. Again he has not alleged nor is there any evidence in the record which indicates that he suffered any anxiety or public embarrassment as a result of this charge. As we observed in Daley, supra, 454 F.2d at 509, “While at least some such adverse effects would appear inherent in every trial delay, where . . . there has been no allegation or evidence of any inconvenience, public embarrassment, or manifestation of prejudice the overall adverse effect can be assumed to be insubstantial.” Further, this has not been a case where pretrial delay has impaired the ability of the accused to defend himself. Appellant has not alleged that the delay in question caused him to lose contact with any potential defense witnesses. Also, unlike Butler, supra, the prosecution’s ease did not rest upon the testimony of, lay eyewitnesses “which necessarily [becomes] less reliable with the passage of t time.” Id. 426 F.2d at 1277. The only witnesses who testified at trial were either state or federal officers and the underlying factual situation was both simple and straightforward. Finally, appellant’s sole allegation of prejudice, that he lost a possible opportunity of receiving a sentence which would run concurrently with the term he was serving in Connecticut, is highly speculative and falls far short of a demonstration of actual prejudice. See McCrory v. Cook, 329 F.Supp. 83, 89 (N.D.Miss.1971), aff’d, 454 F.2d 1173 (5th Cir. 1972). The court in the instant case could have suspended sentence if it deemed appellant to have already served enough time. While such a decision is conceivably less likely than making a sentence concurrent with the one already being served, this possibility of prejudice alone cannot weigh heavily in the scales. In balancing all of the factors discussed above in this ease, we conclude that the trial court did not err in denying appellant’s motion to quash the indictment. We are seriously disturbed by the government’s delay in obtaining this indictment but, in the absence of a demonstration of any actual prejudice, we do not feel that the encroachment upon appellant’s right to a speedy trial has been so egregious as to warrant the exercise^ of “the severe remedy of dismissal.”^ Barker, supra, 407 U.S. at 522, 92 S.Ct. 2182. Our holding to this effect, however, should not be taken as an indication of any willingness on our part to condone delays of this sort. Were it not for the minuscule quantum of prejudice which we find in the instant record, our result might well be to the contrary. Appellant’s additional argument that the government was required, under the indictment, to prove that the weapon in issue was a sawed-off shotgun “intended to be fired from the shoulder” merits little discussion. The short answer to this contention is that Title 26 of the United States Code, under which he was indicted, does not contain any definition of “sawed-off shotgun,” let alone a definition which would require that such a weapon be designed to be fired in a particular manner. 26 U.S.C. § 5845(d), which defines “shotgun,” does contain a provision that such weapons, as originally manufactured, must be designed to be fired from the shoulder and it is undisputed that the firearm which was taken from appellant fell within this definition before it was altered. Subsection (a) (2) of the same provision defines the word “firearm” as used in the indictment as follows: “a weapon made from a shotgun if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 18 inches in length.” Since appellant concedes that the weapon in question falls within this definition, the frivolity of his argument on this issue is clear. Affirmed. . Sometime after this transfer the grand larceny charge against appellant was dismissed. . The government’s attempt to explain the pre-indictment delay fell short when the Assistant United States Attorney, in explaining that there was no grand jury sitting in the Northern Division of Maine from April 1971 to January 1972, admitted that an indictment could have been obtained from the grand jury sitting in Portland during this period. . Cf. 18 U.S.C. § 921(a)(6), which provides : “The term ‘short-barreled shotgun’ means a shotgun having one or more barrels less than eighteen inches in length and any weapon made from a shotgun (whether by alteration, modification, or otherwise) if such a weapon as modified has an overall length of less than twenty-six inches.”

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2024-08-24T03:29:51.129235

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Robert H. NORTHINGTON, Trustee and the First National Bank of Midland, Texas, Plaintiffs-Appellants, v. The UNITED STATES of America et al., Defendants-Appellees. No. 72-2702. United States Court of Appeals, Fifth Circuit. March 26, 1973. Reagan H. Legg, Midland, Tex., for Northington. Wm. Monroe Kerr, Midland, Tex., for First Nat’l Bank. Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Gary R. Allen, Park T. Zimmerman, Gray Allen, Attys., Tax Div., Dept, of Justice, Washington, D. C., William S. Sessions, U. S. Atty., San Antonio, Tex., for defendants-appellees. Before BELL and THORNBERRY, Circuit Judges, and GROOMS, District Judge. BELL, Circuit Judge: Section 6324(a)(1) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 6324(a)(1), imposes a pre-assessment tax lien on the gross estate of any decedent whose property is subject to estate tax. The lien attaches at death. This appeal presents questions concerning the circumstances in which property, otherwise subject to the lien of § 6324(a)(1), may be divested of the lien prior to the assessment and payment of estate tax. The decedent died testate on October 31, 1964. His will was admitted to probate in Midland County, Texas, and letters testamentary were issued to his son, who was named in the will as the independent executor of the estate, pursuant to § 145 of the Texas Probate Code. 17A Vernon’s Texas Civil Stat.Ann. § 145. Under the Texas system of independent administration an executor may proceed with the administration of an estate, without seeking court approval of specific dispositions, once the will has been probated and the inventory, appraisement, and list of claims of the estate have been approved by the court. 17A Vernon’s Texas Civil Stat.Ann. § 145. In the present case the executor proceeded in this fashion. On August 24, 1965, he sold, to himself, a building which was formerly owned by his father and now was in his father’s gross estate. The sale price was $50,000.00. To finance the purchase, he borrowed $50,000.00 from the First Savings and Loan Association of Midland. This loan was secured by his personal note and by a deed of trust. As executor, he received a net consideration from the closing agent of $49,100.92 and this was deposited in the bank account of the decedent’s estate on August 26,1965. The executor filed a federal estate tax return on January 24, 1966. The return reflected a tax liability of $392,347.81. The executor elected to discharge this liability in ten annual installments pursuant to § 6166 of the Code. After receiving partial payment, the Service assessed a small deficiency on May 19, 1967. Additional partial payments followed. At the time this action was brought, $205,445.48 remained unpaid, and payment was due. On July 16, 1971, the son conveyed the property which he had purchased from the estate to Robert H. Northington, trustee. The consideration given by Northington was, in part, the assumption by him of the note and deed of trust which the son had given to the First Savings and Loan Association. The note and deed of trust were then renewed and purchased by the First National Bank of Midland. At that point the Service took steps to insure the payment of the unpaid tax. On September 21, 1971, a revenue officer served Northington with notice of a levy on the property which Northington, as stated, had purchased from the son. Northington and the First National Bank of Midland then brought this action to enjoin the levy. Because the property did not belong to the estate at the time the estate tax return was filed, the government could not rely with assurance on the general tax lien that attached against property in the estate at the time the executor failed to pay the tax, after it was assessed and due. See 26 U.S.C.A. § 6321. Thus the suit to enjoin the levy presented the question: Was the contested property subject to the special estate tax lien, which under § 6324(a)(1) attached to all property in the gross estate at the time of the decedent's death? The district court held that the special estate tax lien did attach to the property levied upon here; that the property has not been divested of the lien; and that the lien continues in force. We agree. The appellants contend that the lien has been divested by operation of law. They rely on the express language of § 6324(a)(1): Unless the estate tax imposed by chapter 11 is sooner paid in full, or becomes unenforceable by reason of lapse of time, it shall be a lien upon the gross estate of the decedent for 10 years from the date of death, except that such part of the gross estate as is used for the payment of charges against the estate and expenses of its administration, allowed by any court having jurisdiction thereof, shall be divested of such lien. (Emphasis added) The appellants argue that their property was divested of the lien because it was used by the executor for the payment of “charges against the estate”, within the meaning of § 6324(a) (1). We must reject this argument. The district court held that the property had not been divested of the lien because it found that the proceeds of the sale of the property were not used to discharge any obligation of the estate. We cannot say, on our reading of the record, that this finding was clearly erroneous. The proceeds of the sale were paid to an account maintained for the benefit of the estate. Two days later the executor drew a check upon that account in the amount of $50,000.00. This amount was equivalent to the amount of the proceeds of the sale. The check was paid to the Jones Exploration Company, an individual proprietorship operated by the executor, but formerly a partnership operated by decedent and his son, the executor. The estate was under no net obligation to the Jones Exploration Company, and the payment to the Company was not itself in satisfaction of an obligation of the estate. The fact was that the estate was indebted to Jones Exploration Company but, on the other hand, Jones Exploration owed a larger amount to the estate. But the appellants contend, nevertheless, that the company was simply a conduit through which other debts and obligations of the estate were ultimately discharged. They contend that all of the $50,000.00 was in fact used by the company for that purpose. This may well have been true but the record does not so reflect. The showing they made in this regard in the district court fell short of the careful tracing which is necessary to persuade a court that the proceeds of a sale of estate property were actually used to satisfy the obligations of an estate. Cf. United States v. Security-First National Bank, 30 F.Supp. 113 (S.D.Cal., 1939), appeal dismissed, 113 F.2d 491 (9th Cir., 1940). The sole justification for divestment of a tax lien under § -6324(a)(1) is the purpose for which the divested property is used; namely, the payment of the charges against the estate and the expenses of administration. The appellants have not shown that this justification is present in this case. Affirmed. . Because we decide the case on this ground, we find it unnecessary to determine (1) whether the obligations which were allegedly satisfied by the proceeds of the sale were in themselves “charges against the estate” within the meaning of § 6324 (a)(1), or (2) whether the obligations which were allegedly satisfied by the proceeds of the sale were, in the context of the Texas system of independent administration, “allowed by any court having jurisdiction thereof” within the meaning of § 6324(a)(1).

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UNITED STATES of America, Plaintiff-Appellee, v. Lloyd Nelson JONES, Defendant-Appellant. No. 72-2261. United States Court of Appeals, Fifth Circuit. March 20, 1973. Rehearing Denied April 12, 1973. Robert Glass, New Orleans, La., (court appointed) for defendant-appellant. Gerald J. Gallinghouse, U. S. Atty., Harry R. Hull, Jr., Mary Williams Cazalas, Asst. U. S. Attys., New Orleans, La., for plaintiff-appellee. Before MORGAN, CLARK and IN-GRAHAM, Circuit Judges. INGRAHAM, Circuit Judge: Lloyd Nelson Jones appeals from his conviction by a jury of robbing a federally insured bank. 18 U.S.C. § 2113. We affirm. On January 9, 1970, the National American Bank in New Orleans was robbed by three men. After two of the alleged robbers had been arrested and were in custody, FBI agents investigating the case concluded that Lloyd Nelson Jones was the third member of the robbery team. A warrant for his arrest was accordingly obtained by the FBI office in New Orleans. Jones was subsequently traced to Cleveland, Ohio. The agents in New Orleans then notified the FBI office in Cleveland that Jones was probably at his wife’s residence in Cleveland. Agent Thomas H. Kirk appeared before a United States Magistrate in Cleveland on January 19, 1970, and on the basis of his affidavit was issued a warrant authorizing the search of the residence in which Jones was supposedly located. The following morning at 8 A. M. approximately ten FBI agents went to 11506 Whitmore Street in Cleveland to search the residence and to arrest Jones if he were there. Mrs. Jones answered the agents’ knock at the door and was told that they had a search warrant authorizing a search of her home and were going to arrest Jones. She replied that her husband was not there. The agents entered the apartment, and while Agent Kirk talked with Mrs. Jones the other agents looked for the defendant and found him asleep in a back bedroom. The agents recovered a pistol from beneath his pillow, told him he was under arrest for the New Orleans bank robbery, gave him Miranda warnings, and placed him in handcuffs. By the time Agent Kirk reached the bedroom, Jones had already been given his warnings, was under arrest and in handcuffs. Agent Don Gordon then asked Jones where the money was, and Jones answered that it was in the suitcase, indicating a suitcase located about a foot and one-half away from the head of the bed. When the agents opened the suitcase, they found $1,190 in a cigarette carton. The serial numbers of three $20 bills matched those of the stolen money. A used airline ticket bearing the name of I. Levy and showing that it was purchased in Houston for a flight to Cleveland was also found in the suitcase. At the trial the money recovered from the suitcase, including the marked $20 bills and the airline ticket, were admitted into evidence over defendant’s objections. Jones’s signed confession, as well as diagrams of the robbery and several oral statements not reduced to writing, were also admitted. As usual, the issues on appeal turn on the legality of the search and seizure of the physical evidence and on the admissibility of defendant’s statements, which allegedly flowed from the illegal search. Jones contends: (1) that the search warrant was invalid; (2) that the search of the suitcase was not incident to his arrest; (3) that he did not consent to the search; and (4) that his statements were fruits of the illegal search and thus inadmissible. I. We turn first to the validity of the search warrant, because if it is good then we do not need to consider defendant’s other allegations of error. The warrant was issued on the basis of an affidavit prepared by Thomas H. Kirk, an FBI agent in Cleveland. The entirety of Kirk’s affidavit is as follows: BEFORE CLIFFORD E. BRUCE, 223 U.S. Court House, Cleveland, O. The undersigned being duly sworn deposes and says: That he has reason to believe that on the premises known as 11506 Whit-more, Cleveland, Ohio, a second and third floor apartment in a white 3 story frame 2 family dwelling located on the south side of the street in the northern District of Ohio there is now being concealed certain property, namely U.S. currency, weapons, or other fruits and instrumentalities which are in violation of T. 18, Sec. 2113(a) (d). And that the facts tending to establish the foregoing grounds for issuance of a Search Warrant are as follows: that on 1/9/70 Lloyd Nelson Jones accompanied by Calvin E. Williams and Pleasant Jones, Jr., robbed the National American Bank, Parkchester Branch, 4764 Paris Avenue, New Orleans, Louisiana. All subjects were subsequently identified by bank employees and Calvin E. Williams & Pleasant Jones Jr. were arrested and some bank loot money was recovered. Investigation by FBI, New Orleans, Louisiana, indicates Lloyd Nelson Jones fled to Louisiana to visit his wife, Alice Jones McDade and 3 children who reside at 11506 Whitmore, Cleveland, Ohio. Thomas H. Kirk Signature of Affiant, S/A FBI Official Title, if any. On its face this affidavit appears to support the issuance of the warrant. The problem is that testimony developed at the suppression hearing conclusively established that Lloyd Nelson Jones was not identified by bank employees as the affidavit states. On the contrary, no one at the bank was able to identify defendant Jones as one of the robbers immediately after the robbery. The government’s brief is devoted almost exclusively to arguments in support of the warrant. It is unnecessary for us to comment on them because of this court’s holding in United States v. Upshaw, 448 F.2d 1218 (5th Cir., 1971). Faced with the question of the validity of a search warrant procured under circumstances almost identical to those, present in the instant case, the court held the warrant invalid. Judge God-bold’s opinion in Upshaw more than adequately disposed of the validity issue, and it is therefore appropriate to quote at length from his opinion. “Purged of its erroneous statements, the affidavit was wholly lacking in facts tending to show that Davis was printing checks or identification documents or that any of the documents were on the premises of the print shop. Stripped of its incorrect assertions, the affidavit became like that in Nathanson v. United States, 290 U.S. 41, 54 S.Ct. 11, 78 L.Ed. 159 (1933), consisting of nothing more than the bare statement of affiant’s belief and cause to suspect that items were in a specified location. Mere affirmance of belief or suspicion is not enough. Id. at 47, 54 S.Ct. at 13, 78 L.Ed. at 162. See also Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964). “It is not necessary in this case for us to reach the question of whether a defendant is entitled to a hearing to test the underlying factual validity of the affidavit on the basis of which a warrant has been issued (as opposed to the affidavit’s sufficiency if taken as true). And, it is equally unnecessary to decide what preliminary requirements, if any, a defendant must meet after he requests a hearing in order to demonstrate that there is an authentic issue of fact which will justify such a hearing. These questions have been neither considered by the District Court nor briefed to us on appeal. In this instance the court held a hearing, appropriately convened, on the issue of probable cause. We are called upon to review the consequences of that hearing, after the facts have come out. The evidence, fully explored at the hearing, revealed that what was said in the affidavit was in vital respects erroneous, and that the facts, when truly and correctly stated, would not support the issuance of a warrant. * * * the warrant must contain allegations that go beyond the affiant's mere suspicion or his repetition of another’s mere suspicion. The warrant is a check upon the officer’s zeal in ‘the often competitive enterprise of ferreting out crime,’ and hence it must be tested against objective facts presented to a detached magistrate. Gonzales v. Beto, 425 F.2d 963 (5th Cir. 1970). “Once it came to the attention of the court, from the testimony at the motion to suppress hearing, that evidence had been seized on the basis of statements of facts erroneously made by the affiant which struck at the heart of the affidavit’s showing of probable cause, the court was required to grant the motion. The judicial system cannot be a party to the use of tainted evidence on the basis that, arguably, the defendant was not entitled to bring to the attention of the court what the court has come to know anyhow.” As in Upshaw, when the affidavit in question here is purged of its erroneous statement, it consists of nothing more than Agent Kirk’s bare statements of belief and cause to suspect that the fruits of the bank robbery were in the residence at 11506 Whitmore Street. “Mere affirmance of belief or suspicion is not enough.” Nathanson v. United States, supra, 290 U.S. at 47, 54 S.Ct. at 13. We hold that the search warrant issued to Agent Kirk was invalid. Therefore, it cannot be used to justify the search and seizure of the evidence introduced at defendant’s trial. Having concluded that the search and seizure here cannot be sustained on the basis of a search warrant, we must determine if there is another theory upon which to uphold the search. II. Because .the search here must now be characterized as warrantless, the government must establish that it is within one of the exceptions to the warrant requirement. Defendant concedes that his arrest was lawful. The issue then is whether the search of the suitcase located a foot and one-half away from the head of his bed was incident thereto. Both the government and the defendant recognize that Chimel v. California, 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969) is dispositive of this issue. In Chimel the Supreme Court clarified the standard applicable in the “search incident to arrest” situation. “ * * * When an arrest is made, it is reasonable for the arresting officer to search the person arrested in order to remove any weapons that the latter might seek to use in order to resist arrest or effect his escape. Otherwise, the officer’s safety might well be endangered, and the arrest itself frustrated. In addition, it is entirely reasonable for the arresting officer to search for and seize any evidence on the arrestee’s person in order to prevent its concealment or destruction. And the area into which an arrestee might reach in order to grab a weapon or evidentiary items must, of course, be governed by a like rule. A gun on a table or in a drawer in front of one who is arrested can be as dangerous to the arresting officer as one concealed in the clothing of the person arrested. There is ample justification, therefore, for a search of the arrestee’s person and the area ‘within his immediate control’ — construing that phrase to mean the area from within which he might gain possession ' of a weapon or destructible evidence.” Under these principles the question whether the search here was incident to defendant’s arrest is narrowly drawn. Was the suitcase within the area of Jones’s immediate control such that he reasonably could have been expected to have gained possession of a weapon or destructible evidence from inside the suitcase? The answer to this question is obviously dependent on the factual setting at the time of the search. Jones was in handcuffs when the agents opened the suitcase. The record is unclear whether his hands were cuffed in front or behind his back and does not reveal the defendant’s location in relation to the suitcase at the time of the search. Both of these facts are relevant to a determination of access to weapons or destructible evidence which is the crucial factor in the Chimel analysis. For example, if defendant’s hands were cuffed in front and he were in close proximity to the suitcase, then the search here could probably be justified under Chimel. Even with the presence of numerous FBI agents in the room, we cannot say that it would be unreasonable to believe that Jones might attempt to lay his hands on a weapon located inside the suitcase. But if defendant’s hands were cuffed behind him in such a manner that he was denied access to the suitcase, then the search could not be upheld under Chimel because the suitcase would not be within his immediate control or within an area from which he might gain possession of a weapon or destructible evidence. It might seem anomalous for the validity of a search to depend on the position of a defendant’s hands. Nonetheless, the Chimel analysis requires just this sort of an examination of the facts. In essence, the approach to a claim that a search was incident to an arrest is for the court to examine the facts and make an objective determination of a rather subjective question: could the law enforcement officials on the scene reasonably expect the arrested person to gain hold of a weapon or evidence in the area searched? For, as the Chimel Court stated: “There is no comparable justification, however, for routinely searching any room other than that in which an arrest occurs — or, for that matter, for searching through all the desk drawers or other closed or concealed areas in that room itself. Such searches, in the absence of well-recognized exceptions, may be made only under the authority of a search warrant. The ‘adherence to judicial processes’ mandated by the Fourth Amendment requires no less.” If the legality of the search here rested on a resolution if the search incident question, we would, therefore, have to remand for additional evidence. The district court concluded, however, that Jones consented to the search of his suitcase. We agree and uphold the search here on that basis alone. III. “The line between an accused’s voluntary consent and his involuntary submission to police authority is often difficult to draw.” United States v. Como, 340 F.2d 891 (2nd Cir., 1965). And, “when a prosecutor seeks to rely upon consent to justify the lawfulness of a search, he has the burden of proving that the consent was, in fact, freely and voluntarily given.” Bumper v. North Carolina, 391 U.S. 543, 548-550, 88 S.Ct. 1788, 1792, 20 L.Ed.2d 797 (1968). Consent to search cannot be lightly inferred; the government must establish by clear and convincing evidence that the consent was voluntarily given and was not coerced, either physically or psychologically. Phelper v. Decker, 401 F.2d 232 (5th Cir., 1968). The trial court found that Jones’s statement concerning the location of the money was voluntarily given. Implicit in this finding is the conclusion that Jones consented to the search. Once the trial court determines that the prosecutor has met his burden of showing that a defendant’s consent was freely and voluntarily given, we cannot overturn that finding unless it is clearly erroneous. United States v. Resniek, 455 F.2d 1127, 1133 (5th Cir., 1972). This is because “whether consent to search has been given is a question of fact.” Hoover v. Beto, 467 F.2d 516 (5th Cir., 1972) [en banc]; United States v. Mather, 465 F.2d 1035 (5th Cir., 1972); Landsdown v. United States, 348 F.2d 405 (5th Cir., 1965). We are not persuaded that the trial court’s finding of voluntary consent was clearly erroneous. Jones relies on Bumper v. North Carolina, supra, as primary support for his position that he did not voluntarily consent to the search. In Bumper the police gained entrance to the premises by announcing that they had a search warrant. To the state’s argument that defendant’s grandmother consented to the search, the Supreme Court replied: “When a law enforcement officer claims authority to search a home under a warrant, he announces in effect that the occupant has no right to resist the search. The situation is instinct with coercion — albeit colorably lawful coercion. Where there is coercion there cannot be consent.” Defendant contends his statement that the money was in the suitcase “was a product of resigned inevitability,” because he knew that “he had no right to resist the search.” Bumper, supra. Defendant’s reliance on Bumper is misplaced. First, even though the FBI agents here told Mrs. Jones they had a warrant to search the residence, they also told her that they were going to arrest Jones if he were present there. It is not disputed that at the time the agents went to the residence in Cleveland there was a valid outstanding arrest warrant for Jones. The agents’ entry into the premises was therefore justified for the. purpose of arresting Jones. Conversely, in Bumper the police officer’s entry into the grandmother’s home was an unjustified intrusion, gained only by reliance on an invalid or non-existent search warrant. Secondly, the agents did not tell Jones that they had a search warrant. For this reason Jones cannot claim that his consent was “no more than acquiescence to a claim of lawful authority.” Bumper, supra, 391 U.S. at 549, 88 S.Ct. at 1792. There had been no claim of lawful authority under the search warrant. Hence, Bumper does not furnish a basis for holding that Jones’s consent to the search of the suitcase was involuntary, Jones also asserts that the circumstances under which he made the statement preclude the conclusion that he voluntarily consented to the search. He points out that at the time he made the consensual statement there were at least five to seven FBI' agents present in his room, that he was under arrest and in handcuffs, and that he was awakened by the agents and thus not fully aware of what was happening. We agree that under these circumstances consent to search should not be easily assumed. We cannot agree, however, that the existence of these facts precludes as a matter of law the conclusion that Jones consented to the search. It is significant that we are not faced with an illegal entry by the agents, nor with consent given after an illegal arrest. See Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963). In short, the government does not have the even heavier burden of proving that the consent to search was voluntary, notwithstanding the taint of an illegal arrest. See, e. g., Phelper v. Decker, supra, Bretti v. Wainwright, 439 F.2d 1042 (5th Cir., 1971). See generally, Coolidge v. New Hampshire, 403 U.S. 443, 473-490, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971). The fact that Jones was under arrest is indeed a factor militating against a finding of consent because after arrest a subject is more susceptible to possible duress or coercion. United States v. Richardson, 388 F.2d 842 (6th Cir., 1968). We have previously recognized, however, that even though consent obtained after arrest may be suspect, the fact of arrest does not necessarily vitiate what otherwise appears to be a valid consent. The question of consent remains one of fact for the trial court in the first instance. United States v. Elrod, 441 F.2d 353 (5th Cir., 1971). See also United States v. Mitchell, 322 U.S. 65, 69-70, 64 S.Ct. 896, 88 L.Ed. 1140 (1944). In any arrest there is present a degree of duress. The question is whether the officers used coercive tactics or took unlawful advantage of the arrest situation to obtain the consent. In other words, was there a use of coercive tactics by the arresting officers such that the duress present in a particular case exceeds the normal duress inherent in any arrest? Bretti v. Wainwright, supra. There is no claim of coercion by the FBI agents, and the record here contains no evidence of such coercion. Moreover, the absence of intimidation, threats, abuse (physical or psychological), or other coercion is a circumstance weighing in favor of upholding what appears to be a voluntary consent. E. g. Cockerham v. Wainwright, 444 F.2d 438 (5th Cir., 1971); Bretti v. Wainwright, supra, United States v. Thompson, 421 F.2d 373 (5th Cir., 1970); United States v. Boukater, 409 F.2d 537 (5th Cir., 1969); United States ex rel Harris v. Hendricks, 423 F.2d 1096 (3rd Cir., 1970). Additionally, we are not convinced that defendant’s will was overborne by the number of FBI agents present when the arrest was made and the statement given. United States v. Thompson, supra. See United States v. Savage, 459 F.2d 60 (5th Cir., 1970); United States v. Alexander, 431 F.2d 83 (5th Cir., 1970). Thus, a defendant under arrest or in custody may voluntarily consent to a search, and a finding of its voluntariness by the trial court will not be disturbed on appeal as clearly erroneous unless it appears that the defendant’s consent was physically or mentally coerced by actions of the arresting officers which went beyond the normal duress inherent in any arrest. Another factor which weighs in favor of sustaining the trial court’s conclusion as to voluntariness is that Jones was given his Miranda warnings prior to the time his statement was made. Although the giving of Miranda warnings will not insulate the government from claims that consent was coercively obtained, it is a circumstance properly considered in determining whether consent was freely given. See Bradford v. United States, 413 F.2d 467 (5th Cir., 1969); United States v. Boukater, supra, United States v. Noa, 443 F.2d 144 (9th Cir., 1971). Jones had been told that he did not have to speak and that anything he said could be used against him. Absent a showing of coercive activity on the part of the agents, we are not persuaded, as he argues, that his answer to the question concerning the location of the money was given because he knew that a search would be conducted no matter what he said. Finally, after Miranda warnings have been given, it is not necessary for a law enforcement officer to affirmatively state that he will not search if permission is refused. United States v. Resnick, supra, 455 F.2d at 1133. It follows that the officer does not have to ask permission to conduct a search, although if he does ask and receive permission this is another circumstance bearing on the voluntariness of the consent. See, e. g., Cockerham v. Wainwright, supra, Bretti v. Wainwright, supra, United States v. White, 431 F.2d 84 (5th Cir., 1970); cert. den. 400 U.S. 998, 91 S.Ct. 476, 27 L.Ed.2d 448. If Miranda warnings have been given, specific warnings of Fourth Amendment rights are not necessary to validate a search conducted after an otherwise voluntary consent. United States v. Canseco, 465 F.2d 383 (5th Cir., 1972); White v. United States, 444 F.2d. 724 (10th Cir., 1971); United States v. Goosbey, 419 F.2d 818 (6th Cir., 1970); Government of Virgin Islands v. Berne, 412 F.2d 1055 (3rd Cir., 1969); cert. den. 396 U.S. 837, 90 S.Ct. 96, 24 L.Ed.2d 87; Gorman v. United States, 380 F.2d 158 (1st Cir., 1967). See also, United States v. Resnick, supra, Hoover v. Beto, supra. We hold that the district court was not clearly erroneous in its conclusion that Jones voluntarily made the statement telling the agents where the stolen money was located, thereby consenting to the search of the suitcase. Our conclusion that the trial court’s finding was not clearly erroneous is bolstered by recent decisions from other circuits finding consent to search in circumstances almost identical to those present in the case at bar. See United States v. Candella, 469 F.2d 173 (2nd Cir., 1972); United States v. Rothberg, 460 F.2d 223 (2nd Cir., 1972); United States v. Wheeler, 148 U.S.App.D.C. 204, 459 F.2d 1228 (D.C.Cir., 1972); United States v. Jiminez-Badilla, 434 F.2d 170 (9th Cir., 1970). Because we have concluded that Jones consented to the search of the suitcase, the money and the airline ticket taken from his suitcase, as well as his written confession, oral confession and diagrams of the robbery, cannot be characterized as fruits of illegal police activity. The trial court did not err therefore in failing to suppress this evidence. We have considered appellant’s other allegations of error and find them without merit. The conviction is therefore Affirmed. . The pertinent portion of Agent Kirk’s testimony from the suppression hearing is as follows: “Q And, when you set forth this information that all the subjects were subsequently identified by the bank employees, who gave you that information? “A At the time I thought I had obtained it from Mr. Hensel. We had talked on the telephone following receipt of a teletype from his office and it was him giving me some background information as to the case. “Q Did Mr. Hensel tell you that they were identified by the bank employees? “A No, he did not. “Q Well, did you receive that information from any other source other than Mr. Hensel? “A Well, Mr. Hensel was discussing the background with me and he mentioned that he had been identified by one of the other subjects in the case when he was arrested. I said how about the bank employees, and he said no, they had masks on. “Q So, when you submitted this information as contained in this affidavit that certain individuals were identified by the bank employees, that was incorrect? “A That’s correct, X didn’t realize it at the time it was being incorporated.” . A situation could develop, of course, in which a defendant with his hands cuffed behind him would nevertheless have access to weapons or evidence. . It would have been better practice for the court to enter findings of fact and conclusions of law after the suppression hearing. United States v. Montos, 421 F.2d 215 (5th Cir., 1970). If such findings had been made, we would be required to accept them unless they were clearly erroneous. See 3 C. Wright, Federal Practice and Procedure, § 675 at 130 (1969). Rule 41(e) of the Federal Rules of Criminal Procedure contemplates a pretrial hearing on suppression questions in order to avoid the delay resulting from such questions being raised at the trial. The trial court allowed a partial rehash of the pretrial suppression hearing to be conducted at the trial. While this is clearly within the court’s discretion, findings of fact and conclusions of law entered prior to trial would have precluded this waste of time unless the defendant developed additional evidence between pretrial and trial; this was not the case here as a comparison of the trial record, made out of the presence of the jury, closely parallels that made at the suppression hearing and discloses no new facts. At any rate, the court ruled at the trial that Jones’s statement was freely and voluntarily given. We believe that this finding is entitled to be reviewed under the clearly erroneous standard, but even if it were not an independent review of the record discloses clear and convincing evidence of voluntary consent. . Appellant’s brief at 12. . We note that defendant does not claim that his statement was the product of trick or deception practiced by the FBI agents. Compare United States v. Bailey, 447 F.2d 735 (5th Cir., 1971), with Alexander v. United States, 390 F.2d 101 (5th Cir., 1968), and United States v. Payne, 429 F.2d 169 (9th Cir., 1970).

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Caselaw Access Project

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Ascension VIALPANDO for herself and her minor child, Sabrina Vialpando, and both on behalf of all others similarly situated, Plaintiff-Appellee, v. Con F. SHEA, Individually and as Executive Director of the Department of Social Services, State of Colorado, et al., Defendants-Appellants. Nos. 72-1218, 72-1345. United States Court of Appeals, Tenth Circuit. Argued Sept. 18, 1972. Decided March 22, 1973. Charles B. Lennahan, Sp. Asst. Atty. Gen., Denver, Colo. (Duke W. Dunbar, Atty. Gen., John P. Moore, Deputy Atty. Gen., and Douglas D. Doane, Sp. Asst. Atty. Gen., Denver, Colo., with him on the brief), for defendants-appellants, except Melvin Pobanz. James W. Kin, El Paso County Legal Services Office, Colorado Springs, Colo. (Tom W. Armour, El Paso County Legal Services Office, Colorado Springs, Colo., and Kenneth Neiman, Steven J. Cole, and Henry A. Freedman, N.L.S.P., Center on Social Welfare Policy and Law, New York City, of counsel, with him on the brief), for plaintiff-appellee. Before LEWIS, Chief Judge, and PICKETT and McWILLIAMS, Circuit Judges. LEWIS, Chief Judge. In its present posture, this is a private action brought by appellees, Colorado welfare recipients, against state officials administering the Colorado welfare program. The appeal is from a judgment requiring appellants to implement a modification of the Colorado Division of Public Welfare Manual, § 4313.13 to comply with 42 U.S.C. § 602(a)(7) in determining a family’s need under the Aid to Families with Dependent Children (AFDC) program. No party raises any question concerning the nature of the relief granted below. The AFDC program is financed largely by the federal government on a matching fund basis and is administered by the states. An AFDC grant is computed by comparing a family’s income and resources to a standard of need statistically determined by the state. The family income used in this comparison is gross family income less certain exclusions mandated by 42 U.S.C. § 602(a)(7), an employment expense provision, and 42 U.S.C. § 602(a)(8), an income disregard provision. On July 1, 1970 the Colorado Board of Social Services promulgated section 4313.13 of the Colorado Division of Public Welfare Manual. This regulation limits employment expenses under 42 U.S.C. § 602(a)(7) to a standardized $30.00 figure plus mandatory payroll deductions and child care expenses. The $30.00 standardized figure is an average based on a statistical survey and is meant to cover “employment expenses such as transportation, special clothing, union dues, special education or training costs, telephone, additional food or personal needs . . . .” The Colorado method of treating employment expenses embodied in section 4313.13 was approved by the Department of Health, Education and Welfare. Prior to the effective date of section 4313.13, Colorado excluded from family income all expenses reasonably attributable to the earning of such income. The effect of the new regulation which allows only a standardized exclusion for employment expenses other than mandatory payroll deductions and child care expenses was to reduce appellees’ excludible employment expenses to such an extent that their net income after the exclusions was greater than Colorado’s standard of need. As a consequence, appellees were ineligible for AFDC grants and they initiated this action seeking damages and declaratory and injunctive relief. The district court held that the standardization of employment expenses in the new Colorado regulation did not comply with 42 U.S.C. § 602(a)(7) and granted the relief sought. 42 U.S.C. § 602(a)(7) requires that a state AFDC plan must “provide that the State agency shall, in determining need, take into consideration any other income and resources of any child or relative claiming aid to families with dependent children . . . as well as any expenses reasonably attributable to the earning of any such income.” (Emphasis added.) We interpret the words “any expenses” to mean all actual expenses. Thus 42 U.S. C. § 602(a)(7) requires the states to consider all actual expenses reasonably attributable to the earning of income in determining need. See Amos v. Engelman, D.N.J., 333 F.Supp. 1109, 1119 (three-judge court), modified on other grounds, 404 U.S. 23, 92 S.Ct. 181, 30 L.Ed.2d 143. This interpretation is consistent with the congressional intent that the states should “take these [employment] expenses fully into account.” S.Rep.No. 1589, 87 Cong., 2d Sess., 1962 U.S.Code Cong. & Admin.News, pp. 1943, 1960 (emphasis added). The use of a standardized employment expense exclusion does not take into consideration all actual expenses when a family’s expenses exceed the standardized allowance. Cf. Amos v. Engelman, supra. In the instant case the appellees’ actual employment expenses consistently exceeded the $30.00 standard exclusion. Consequently, Colorado’s application of the standardized allowance in determining the appellees’ needs does not comply with 42 U.S.C. § 602(a)(7). Campagnuolo v. White, D.Conn., Civil No. 13968; Adams v. Parham, N.D.Ga., Civil No. 16041. The appellants maintain that the words “take into consideration” in 42 U.S.C. § 602(a)(7) sanction the use of a standardized employment expense exclusion in determining need in all cases. Their reasoning is that these words do not dictate a specified method for treating employment expenses and that the use of a standardized allowance is one acceptable way of taking into consideration expenses of employment. The phrase “take into consideration” is flexible and by itself does not require a particular treatment of employment expenses. However, when considered in the statutory framework of 42 U.S.C. § 602(a)(7), these words assume a particular meaning. It should be noted that the phrase “take into consideration” modifies both “income” and “expenses”. Consequently, Congress intended employment expenses to be treated in the same manner as income. Since consideration of each family’s income must necessarily be based on actual rather than average figures, expenses attributable to the earning of such income must be taken into consideration in the same manner. Appellants also contend that the Supreme Court in Rosado v. Wyman, 397 U.S. 397, 90 S.Ct. 1057, 25 L.Ed.2d 353, approved the principle underlying the use of a standardized employment expense allowance. The Rosado case involved 42 U.S.C. § 602(a) (23) and sanctioned the use of statistical averages in computing a standard of need to be applied in the states’ administration of their AFDC programs. The Supreme Court has continually stressed the states’ “undisputed power” to determine this standard of need. King v. Smith, 392 U.S. 309, 334, 88 S.Ct. 2128, 20 L.Ed.2d 1118; Dandridge v. Williams, 397 U.S. 471, 478, 90 S.Ct. 1153, 25 L.Ed.2d 491. Congress itself did not encroach upon this undisputed power until the passage of 42 U.S.C. § 602(a) (23) in 1967. Nevertheless, 42 U.S.C. § 602(a)(7) is indicative of congressional reluctance to give the states the same unfettered discretion to determine the needs of a particular family. Thus, Supreme Court approval of the use of statistical averages in determining the standard of need is not a mandate for judicial approval of such averaging in determining the needs of a particular family under 42 U.S.C. § 602(a)(7). But see Amos v. Engelman, D.N.J., 333 F.Supp. 1109, 1119 (three-judge court), modified on other grounds, 404 U.S. 23, 92 S.Ct. 181, 30 L.Ed.2d 143. Additionally, an understanding of the manner in which a state’s standard of need and the computation of a particular family’s available income and resources under 42 U.S.C. § 602(a)(7) complement each other illustrates the incongruity of Colorado’s standardized employment expenses allowance in the instant case. The standard of need is a dollar amount representing the costs of those items which a state has determined to be necessary to maintain a hypothetical family at a subsistence level. Such an estimate by its nature is susceptible to computation through the use of statistical averages and it was thus fitting for the Supreme Court to approve the use of an averaging system in Rosado. A state must compare its standard of need to the income and resources actually available to the particular family in order to establish financial eligibility and the amount of an AFDC grant. 45 C.F.R. § 233.20(a) (3) (ii) (a) and (c). 42 U.S.C. § 602(a) (7) requires that the computation of income and resources available to the particular family must take into consideration any expenses reasonably attributable to the earning of income. To uniformly apply a standardized employment expense allowance rather than consider actual expenses in this computation would render meaningless the process of comparing a particular family’s available income and resources with a hypothetical family’s standard of need. The problem with the Colorado system is not its use of a standardized allowance but the intransigent adherence to this standard when a particular family’s expenses of employment exceed the allowance. In such cases, Colorado’s standard allowance operates as a maximum allowance which we also consider to be inconsistent with 42 U.S.C. § 602(a)(7). Williford v. Laupheimer, E.D.Pa., 311 F.Supp. 720 (three-judge court). Nevertheless, a reasonable interpretation of the statute permits “a state to use a standard deduction for [employment] expenses in the interest of efficient administration of the [AFDC] program, provided the allowance is adequate to cover all actual expenses.” Amos v. Engelman, D.N.J., 333 F.Supp. 1109, 1119 (three-judge court), modified on other grounds, 404 U.S. 23, 92 S.Ct. 181, 30 L.Ed.2d 143. (Emphasis added.) Our interpretation of 42 U.S.C. § 602(a) (7) is consistent with the statutory history and the explicit congressional purpose of providing AFDC families with an incentive to seek employment. S.Rep.No. 1589, 87 Cong.2d Sess., 1962 U.S.Code Cong. & Admin.News, pp. 1943, 1960. Although appellants present numerous policy reasons for a different result, it is not within our realm to legislate social policy. Jefferson v. Hackney, 406 U.S. 535, 541, 92 S.Ct. 1724, 32 L.Ed.2d 285; Dandridge v. Williams, 397 U.S. 471, 487, 90 S.Ct. 1153, 25 L.Ed.2d 491; Rosado v. Wyman, 397 U.S. 397, 422, 90 S.Ct. 1057, 25 L.Ed.2d 353. One specific policy argument deserving comment even in the context of our limited role is the appellants’ contention that our decision will compel states to consider unnecessary expenditures. Such fears should be allayed by the statute itself which requires that the subject expenses be reasonably attributable to the earning of income. Appellants emphasize the approval of section 4313.13 of the Colorado Division of Public Welfare Manual by the Department of Health, Education and Welfare and maintain that this approval should be accorded substantial weight as a statutory interpretation by the department responsible for the administration of the Social Security Act. This principle, however, is inapplicable when a departmental interpretation is inconsistent with the controlling statute. Townsend v. Swank, 404 U.S. 282, 286, 92 S.Ct. 502, 30 L.Ed.2d 448. Equally without merit is appellants’ contention that under 42 U.S.C. § 604(a)(2) states need only substantially comply with federal statutory requirements. See Rosado v. Wyman, 397 U.S. 397, 408, 90 S.Ct. 1057, 25 L.Ed.2d 353; King v. Smith, 392 U.S. 309, 316-317, 88 S.Ct. 2128, 20 L.Ed.2d 1118. 42 U.S.C. § 604(a)(2) provides an administrative procedure whereby the Secretary of Health, Education and Welfare may cease funding state programs in order to compel substantial compliance with federal statutory requirements. This statute is inapposite in suits by prospective recipients against state agencies responsible for the administration of the AFDC program. Affirmed. . When considering the 1962 amendment which added the employment expense provision, Congress specifically recognized that ‘‘all income of recipients is taken into .acepunt ... in determining need.” S.Rep.No.1589, 87 Cong., 2d Sess., 1962 U.S.Code Cong. & Admin. News, pp. 1943, 1959. (Emphasis added.) Thus Congress intended that all employment expenses also be considered. See 45 O.F.R. § 233.20(a) (7) (i). . In Rosado the Court said: “We do not, of course, hold that New York may not, consistently with the federal statutes, consolidate items on the basis of statistical averages. . . . Providing all factors . . . are accounted for and fairly priced and providing the consolidation on a statistical basis reflects a fair averaging, a State may, of course, consistently with [42 U.S.C. § 602(a) (23)] redefine its method for determining need. . New York is not foreclosed from accounting for basic and recurring items of need . by an averaging system.” Rosado v. Wyman, 397 U.S. 397, 419-420, 90 S.Ct. 1207, 1221, 25 L.Ed.2d 442. . 42 U.S.C. § 602(a) (23) required the states to adjust their standards of need by July 1, 1969 in order to reflect cost of living increases.

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Caselaw Access Project

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2024-08-24T03:29:51.129683

Debra MILLENSON, on behalf of herself and all others similarly situated, Plaintiff-Appellant, v. The NEW HOTEL MONTELEONE, INC., Defendant-Appellee. No. 72-3131 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 23, 1973. Rehearing and Rehearing En Banc Denied May 9, 1973. Arthur Scheuermann, New Orleans, La., for plaintiff-appellant. Arthur L. Ballin, Frank C. Dudenhefer, New Orleans, La., for defendantappellee. Before GEWIN, COLEMAN and MORGAN, Circuit Judges. Rule 18, 5th Cir. See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5th Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: On May 18, 1972, Ms. Debra Millenson filed the present action seeking declaratory and injunctive relief against the New Hotel Monteleone (hotel) to enjoin its operation of a restaurant, “The Men’s Grill”, and declaring its “males only” admission policy unconstitutional. On August 23, 1972, the district court denied Millenson’s motion for summary judgment and granted the hotel’s motion to dismiss. Millenson appeals from the judgment of the district court. We affirm. Taking the allegations contained within the complaint as true, the following fact situation is established. On May 18, 1972, Ms. Millenson and several companions, men and women, sought service at the Men’s Grill of the Hotel. Although there were vacant tables and other parties without reservations were seated, Millenson and her party were denied service because of the presence of women in her party. Ms. Millenson contends that the admission policies of the grill are unconstitutional because they violate the equal protection clause of the fourteenth amendment. Of course for such a claim to withstand close judicial scrutiny, it is incumbent on the aggrieved party to prove that the actions complained of were taken under color of state law. To fulfill this assigned task Millenson contends that the various licenses issued to the hotel by Louisiana so intertwine the policies of the hotel with state authority that impermissible state action is present. Accordingly, the dispositive issue in the instant case is whether the issuance of regulatory licenses to a public accommodation by a state will suffice to color the admission policies of the former with the authority and involvement of the latter. For Millenson to succeed it is necessary for her to show that the state licensing system encourages, mandates, or affirmatively authorizes the admission policies of the grill. A cursory examination of these state licensing statutes manifestly leads one to the conclusion that they are completely unrelated to the admission policies of the licensees. The impetus for the grill’s admission policies originated with the hotel and not with the state. Justice Rehnquist’s observations in Moose Lodge, are equally applicable and decisive of Millenson’s contentions. Justice Rehnquist stated: There is no suggestion in this record that the Pennsylvania Act, either as written or as applied, discriminates against minority groups either in their right to apply for club licenses themselves or in their right to purchase and be served liquor in places of public accommodation. However detailed this type of regulation may be in some particulars, it cannot be said to in any way foster or encourage racial discrimination. Nor can it be said to make the State in any realistic sense a partner or even a joint venturer in the club’s enterprise. The judgment of the district court is affirmed. . Ms. Millenson based her right to relief on 42 U.S.C. § 1983. Jurisdiction was asserted under 28 U.S.C. §§ 1331, 1343 (3) and 1343(4). . The hotel does not deny to women access to all its facilities. The coffee shop, the main dining room, and room service are made available to women on the same basis as m.en. The food and drink served in various parts of the hotel are all prepared in a centralized kitchen. The motivation for the grill’s admission policies is clearly and chauvinistically established by a hotel advertisement which reads: Lunch for the liberated male Women. Bless them. They’re the most delightful creatures on earth. But there are times when a man prefers the company of other men. To discuss business for instance, politics, sports, or, of, course . . . women. . “ . . . § 1 of the Fourteenth Amendment does not forbid a private party, not acting against a backdrop of state compulsion or involvement, to discriminate on the basis of race in his personal affairs as an expression of his. own personal predilections. As was said in Shelley v. Kraemer, supra [334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161], § 1 of ‘[t]hat Amendment erects no shield against merely private conduct, however discriminatory or wrongful.’ ” Adickes v. S. H. Kress & Co., 398 U.S. 144, 169, 90 S.Ct. 1598, 1614, 26 L.Ed.2d 142 (1970) (citations omitted). . Paragraph six of Millenson’s complaint alleged: “The Men’s Grill has a liquor license as required by Title 26 of the Louisiana Revised Statutes. The Hotel collects sales tax on transactions in the Grill as an agent of the State of Louisiana: as provided in Louisiana Revised Statutes, Title 47, Section 306 and receives a rebate on such taxes pursuant to Section 56-43 of the New Orleans City Code.” Paragraph eight concluded: “All acts alleged in this complaint to have been done or omitted by defendants or their agents were done or omitted under color of law of the State of Louisiana and under color of defendant's position as an agent of the State under Revised Statutes 47:306 and Title 26.” It is apparent that Millenson’s state action argument must stand or fall under these allegations. . Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972). . Id. at 1972-1973.

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Caselaw Access Project

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Serafin CARMONA and Manuel Venegas, Individually, and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Gilbert L. SHEFFIELD, Director of the California Department of Human Resources Development, et al., Defendants-Appellees. No. 71-1575. United States Court of Appeals, Ninth Circuit. April 2, 1973. Edward Newman (argued), Stephen Manley, Grace M. Kubota, Joel G. Schwartz, Robert A. Baines, San Jose, Cal., for plaintiffs-appellants. Richard L. Mayers, Atty. (argued), Evelle J. Younger, Atty. Gen., San Francisco, Cal., for defendants-appellees. Ricardo A. Callejo, San Francisco, Cal., for amicus curiae. Before CHAMBERS and CHOY, Circuit Judges, and JAMESON, District Judge. The Honorable William J. Jameson, Senior United States District Judge for the District of Montana, sitting by designation. CHAMBERS, Circuit Judge. Carmona and Venegas seek to represent a class of persons who speak, read and write only Spanish and who reside in Santa Clara County, California. They were denied unemployment benefits by the California Department of Human Resources Development. According to the complaint, “The denial of unemployment insurance benefits to plaintiffs, and the subsequent dismissal of plaintiff CARMONA’S administrative appeal, were a direct result of the failure of the San Jose office of HRD to make available Spanish-speaking employees to determine the validity of their claims, and the further failure of the defendants to send all written notices in Spanish to applicants who have evidenced an ability to understand only the Spanish language.” They sought declaratory and injunctive relief based on constitutional claims under 42 U.S.C. § 1983 and 28 U.S.C. § 2201. They also asserted a pendant claim of violation of a California statute, and they purported to raise a claim under 42 U.S.C. § 503(a)(1) (The Social Security Act). The district court granted the state of California’s motion to dismiss the action for failure to state a claim upon which relief can be granted. Carmona and Venegas have appealed. The district court dismissed the action because of the burden plaintiffs’ desired result would impose on administration of the California system of unemployment insurance compensation. The due process claim is that even though notices of rights under the unemployment laws are adequate for those who speak English, the notices are no notice at all to plaintiffs. We cannot say, as a constitutional matter, that there is a relatively easy means of providing a more adequate form of notice, and we conclude that California’s approach is a reasonable one. Walker v. City of Hutchinson, 352 U.S. 112, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956). Giving notice in English to these appellants is not a denial of equal protection. Even if we assume that this case involves some classification by the state, the choice of California to deal only in English has a reasonable basis. Cf. Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970). The federal statutory claim is two-fold. First, appellants assert that the California system is not “reasonably calculated to insure full payment of unemployment compensation when due.” 42 U.S.C. § 503(a)(1). The Secretary of Labor has certified that the California system is so reasonably calculated. California Department of Human Resources Development v. Java, 402 U.S. 121, 125, 91 S.Ct. 1347, 28 L.Ed.2d 666 (1971). We believe that the additional burdens imposed on California’s finite resources and California’s interest in having to deal in only one language with all its citizens support the conclusion of reasonableness. The other portion of the federal statutory claim rests on the incorporation by the regulations issued under § 503 of the requirements of the due process and equal protection clauses. We have already decided these claims against appellants. We do not reach the pendant state claims. The judgment is affirmed.

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Rufus Lee SMITH, Plaintiff-Appellant, v. The CINCINNATI POST & TIMES-STAR et al., Defendants-Appellees. No. 72-1883. United States Court of Appeals, Sixth Circuit. Argued Feb. 9, 1973. Decided March 21, 1973. Harvey B. Woods, Cincinnati, Ohio, for plaintiff-appellant. Harry M. Hoffheimer, Cincinnati, Ohio, for defendants-appellees. Before PECK and KENT, Circuit Judges, and YOUNG, District Judge. Honorable Don J. Young, Judge, United States District Court for the Northern District of Ohio, sitting by designation. PER CURIAM. This is an appeal from a summary judgment, D.C., 353 F.Supp. 1126, entered against the plaintiff-appellant in his suit brought under 18 U.S.C. § 2520, which authorizes a civil action by any person whose wire or oral communication is intercepted, disclosed or used in violation of the Federal Wiretap Laws. The appellant was a party to a telephone conversation with one Howard Wunker in which the appellant allegedly indicated that he could arrange a “fix” in a divorce case then pending in the Domestic Relations Court for Hamilton County, Ohio, where the appellant was then employed. Wunker caused this conversation to be recorded, and released this recording to the appellee newspaper, which then published its contents. As a result of this action, the appellant brought two suits in the District Court, one against Wunker for damages allegedly arising from recording and disclosing the phone conversation, and the other against the newspaper for damages allegedly resulting from publishing the contents of that conversation. The suit against Wunker was dismissed for failure to state a claim upon which relief could be granted because the Federal Wiretap Laws do not make it a crime for a person to record a telephone conversation to which he is a party. Smith v. Wunker, 356 F.Supp. 44 (S.D.Ohio 1972). No appeal was taken from that decision, and the appellant concedes that the recording of the conversation by Wunker was not illegal. In this suit, the appellant claimed that although the conversation was legally obtained, it was improperly disclosed to the newspaper and therefore its publication therein was improper. We cannot agree with this contention. Since the recording was not obtained in violation of the Federal Wiretap Laws, the appellant cannot seek damages from the newspaper for publishing the conversation in violation of that section. There is no authority for disregarding the language of the statute which provides that “It shall not be unlawful under this chapter for a person not acting under color of law to intercept a wire or oral communication where such person is a party to the communication.” 18 U.S. C. § 2511(2) (d). A party to a conversation is privileged to record it. United States v. DiLorenzo, 429 F.2d 216, 219, n. 1 (2d Cir. 1970), cert. denied, 402 U.S. 950, 91 S.Ct. 1609, 29 L.Ed.2d 120; United States v. Viviano, 437 F.2d 295, 300 (2d Cir. 1971), cert. denied, 402 U.S. 983, 91 S.Ct. 1659, 29 L.Ed.2d 149. The appellant’s contention that the recording and subsequent newspaper publication of this conversation violated his right of privacy is not well taken. Since there is no “interception” or “eavesdropping” when a party to a conversation, or a third person acting with the consent of one of the parties to the conversation, records that conversation, (e. g., Flanders v. United States, 222 F.2d 163 (6th Cir. 1955)), and since the appellant has conceded that the recording of the conversation was not unlawful in that the recorder was a participant to the conversation, it follows that it could not in any way be wrongful for that person to later disclose the contents of that conversation. Each party to a conversation, telephonic or otherwise, takes the risk that the other party may divulge the contents of that conversation, and should that happen, there has been no violation of the right of privacy. Rathburn v. United States, 355 U.S. 107, 111, 78 S.Ct. 161, 2 L.Ed.2d 134 (1957). The appellant’s reliance upon 47 U.S.C. § 605 is similarly misplaced, since that section is violated only when a person both intercepts and divulges a communication, which is not the case in regard to this defendant. Bufalino v. Michigan Bell Telephone Co., 404 F.2d 1023, 1027 (6th Cir. 1968), cert. denied, 394 U.S. 987, 89 S.Ct. 1468, 22 L.Ed.2d 763 (1969). The judgment of the District Court is affirmed.

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Richard P. DORAN, Plaintiff, Appellee, v. UNITED STATES of America, Defendant, Appellant. No. 72-1330. United States Court of Appeals, First Circuit. Argued Feb. 8, 1973. Decided March 22, 1973. Morton Hollander, Atty., Dept. of Justice, with whom Harlington Wood, Jr., Asst. Atty. Gen., Julio Morales Sanchez, U. S. Atty., and Michael Kimmel, Atty., Dept, of Justice, were on brief, for defendant, appellant. Juan R. Torruella, Hato Rey, P. R., with whom Pieras & Torruella, Hato Rey, P. R., was on brief, for plaintiff, appellee. Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges. PER CURIAM. The government, successful in defending an admiralty suit, filed a substantial bill of costs three months after judgment. The plaintiff objected, in part because the bill was not filed within ten days of judgment as required by a rule of the district court dated July 9, 1952. The government claimed that it had relied on a 1946 edition of the district court rules, which contained no time limitation, that the U. S. Attorney’s office had no knowledge of the later rule, and that the order had not been published in a manner reasonably designed to put attorneys on notice. The district court held that the rule “has been a well known and established practice” and denied the bill of costs as untimely filed. It appears from the government’s affidavits and brief that the 1952 rule was furnished to the Supreme Court in accordance with Rule 83 F.R.Civ.P., but that neither the current United States Attorney taking office since the filing of the bill of costs nor his office, since he assumed his duties, was aware of the 1952 rule; and that, according to the affidavit of a long-time employee of the office, a copy of the 1952 rule was never received by the office. We note that this affidavit did not aver the absence of knowledge by that office over the years. Taking these sparse allegations as true, the government must lose. There was no evidence that the office of the U. S. Attorney prior to the present occupant had no knowledge of the rule over the past twenty years, or that the United States Attorney at the time of filing the bill had no knowledge, or that former occupants of the position generally had no such knowledge. There was no evidence, which might have been ascertained from case records, that the rule was more honored in the breach than in the observance. The government at argument sought remand for a full hearing, but that opportunity has long since passed. Even such evidence would not advance the government’s case. Its argument is based on the presence of the word “promulgation” in the second sentence of Rule 83, F.R.Civ.P. which directs that copies of the rules and their amendments “shall upon their promulgation be furnished to the Supreme Court.” It claims that “The promulgation must be reasonably designed to put all practicing attorneys on actual or constructive notice.” Even accepting this interpretation, we fail to see how proof that a particular individual or office, however important or frequent a litigant, did not receive written or acquire actual notice of the rule would establish the unreasonableness of the promulgation. The government has not shown that the means of promulgation did not meet its own proposed standard. It has not shown that the common understanding of practitioners was contrary to that which the court stated. The government points out the need for “uniform, systematic and periodic publication of . rules affecting the rights of litigants.” We agree with that broad principle and even with the government’s suggestion that district courts should publish either a complete compilation of their rules or cumulative supplements, at least more often than every twenty-five years. It would indeed seem to us to be both a sound and efficient practice for the district courts to re-compile their rules whenever exhaustion of the existing stock of copies requires re-ordering, or when substantial revisions are effected. Moreover, it is incumbent upon those courts, both under Rule 83 and their obligation to act fairly towards all those affected by their actions, to develop effective means of promulgation and distribution. Whether promulgation be effected by a general mailing of all new editions and additions to all those admitted to the bar of the court or by distribution of a copy at the commencement of each suit or by other, similarly effective means, we need not now decide either as a matter of law or under our supervisory power. For here, the U. S. Attorney’s office, no tyro itself, has come forward with no evidence that the means of making known the 1952 rule was deficient. The government also argues that denial of its costs under the circumstances was an abuse of discretion, since it had no actual knowledge of the rule, its bill was filed within a reasonable time, and plaintiff had shown no prejudice. Rules of the nature of that involved here serve the purpose of permitting a losing party to know the extent of his obligations and decide whether or not to appeal, either to secure reversal or a settlement. Woods Construction Co., Inc. v. Atlas Chemical Industries, Inc., 337 F.2d 888 (10th Cir. 1964). The court was well within its discretion in refraining from probing into plaintiff’s decision-making processes. Affirmed. While appellee contends that these affidavits were not received in evidence, we have assumed for purposes of decision that they were. Conversely, we have not relied on a post-judgment affidavit of the district court clerk as to the established practice of mailing copies of new rules to frequently appearing practitioners and to the Department of Justice.

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Gregory L. PORTER, Appellant, v. GUAM PUBLICATIONS, INC., et al., Appellees. No. 72-1514. United States Court of Appeals, Ninth Circuit. March 15, 1973. Douglas F. Cushnie (argued), of Arriola, Bohn, Cushnie & Stevens, Agana, Guam, for appellant. Thomas J. Nolan (argued), Walter S. Ferenz, of Barrett, Ferenz, Bramhall & Klemm, Agana, Guam, for appellees. Before CHAMBERS, ELY and WALLACE, Circuit Judges. . The names of two others, originally designated as appellees, have, by this court’s Order of November 14, 1972, been removed from the caption. ELY, Circuit Judge: This libel action arises out of a newspaper article published by appellees describing appellant’s arrest for the theft of a cash box. In factual contrast, the warrantless arrest stemmed from an unsworn and assertedly false complaint that appellant had stolen an automobile. The District Court concluded that the publication was privileged and granted appellees’ motion for summary judgment. To overcome the traditional defense of newspaper privilege, appellant cites Guam Civil Code § 47, which provides in relevant part: “A privileged communication is one made . . . [b]y a fair and true report, without malice, in a public journal, of ... a verified charge or complaint made by any person to a public official, upon which complaint a warrant shall have been issued.” Appellant argues under this statutory authority that the publication was not privileged because (1) the report was unfair and untrue, (2) the complaint leading to his arrest was not verified, (3) a warrant had not been issued, and (4) the newspaper had been motivated by malice. It is axiomatic that although a statute may bestow a privilege not otherwise available, a statute cannot constrict a privilege that is constitutionally conferred. Since Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971), St. Amant v. Thompson, 390 U.S. 727, 88 S.Ct. 1323, 20 L.Ed.2d 262 (1968), and New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) demonstrate that the newspaper account in this case was constitutionally privileged, we reject appellant’s argument that the Guam statute delimits the entire scope of privileged publications of police arrests. Rosenbloom, St. Amant and Sullivan establish that in the absence of reckless or calculated falsehood, damages are not available for a newspapér’s defamatory publication of an individual’s involvement in events of public or general interest. Appellant’s arrest was an event touching the community’s “vital interest in the proper enforcement of its criminal laws.” See Rosenbloom, supra at 43, 91 S.Ct. at 1819. The constitutional protection afforded the report of such an event must necessarily, although perhaps unfortunately, extend to “some erroneous publications as well as true ones.” St. Amant, supra at 732, 88 S.Ct. at 1326. That the arrest was warrantless and predicated upon an unverified complaint is irrelevant to the compass of this privilege. Damages would be available against the appellees only if the falsity of the news report were attributable to reckless or calculated conduct. As manifest in St. Amant v. Thompson, supra at 731, 88 S.Ct. at 1325, this standard of malice would be satisfied only if the publisher “in fact entertained serious doubts as to the truth of his publication.” There is nothing in the appellant’s allegations that raises, with adequate factual specificity, a genuine, triable issue in this respect. Accordingly, the judgment of the District Court is Affirmed.

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Faye Baggett JACKSON, Administratrix of the Estate of Edwin Baggett, Plaintiff-Appellant, v. Charles CROCKARELL et al., Defendants-Appellees. No. 72-1884. United States Court of Appeals, Sixth Circuit. Argued Jan. 29, 1973. Decided March 28, 1973. Tyree B. Harris, Nashville, Tenn., James C. Cunningham, Clarksville, Tenn., Hooker, Keeble, Dodson & Harris, Nashville, Tenn., on brief, for plaintiff-appellant. R. Price Nimmo, Nashville, Tenn., Dale Quillen, Nashville, Tenn., on brief, for defendants-appellees. Before WEICK, PECK and MILLER, Circuit Judges. PER CURIAM. The appellant, as administratrix of the estate of her deceased husband, brought this action in the District Court against the Sheriff of Stewart County, Tennessee, his deputy and the sureties on his official bond, pursuant to 42 U.S. C. § 1983, to recover damages for his alleged wrongful killing by the Sheriff. The undisputed facts show that the deceased Edwin Baggett, while under the influence of alcohol or an unidentified drug, knocked on the door of a private home and asked to be admitted. The lady of the house refused to admit him, and he returned to his car which was parked by the curb. Ten minutes later, she sent her son next door to call the police and summon them to the scene. When the Sheriff arrived, he attempted to awaken Baggett and remove him from the car. An altercation ensued, and when the Sheriff became wedged between the automobile and its open door, he shot and killed Baggett. The appellant brought this action in the District Court alleging that the Sheriff deprived her deceased, husband of his rights in violation of 42 U.S.C. § 1983. The case was tried to a jury, which found for the Sheriff, and this appeal followed. The appellant’s single contention on this appeal is that the District Court instructed the jury on a theory of defense which was not set out in the answer of the defendant, or in the pre-trial order, and upon which no evidence was introduced. The answer of the defendant admitted that he shot the plaintiff’s decedent, but alleged: “that he drew his pistol and fired into the body of the said Edwin Baggett in order to protect his own life, after the said Baggett drew a large knife and cornered the defendant, Charles Crockarell, and put him in fear for his life, whereupon Charles Crockarell, in order to protect his own life, fired into the body of the said Edwin Baggett, who died a short time later.” Under the practice of the District Court for the Middle District of Tennessee, a pre-trial order is entered in all civil cases setting forth the issues to be tried and the theories of the parties, and providing that all pleadings in the case are treated as being amended to comply with the pre-trial order. An order was entered in this case which set out, in accordance with the defendants’ pleadings, the defense that the Sheriff shot the deceased in self-defense. At trial, upon the conclusion of final argument of counsel for the parties, the District Judge began his instruction of the jury, but then interrupted his charge and asked the attorneys if they would state to the jury their theories of the case. Counsel for the appellant declined this unusual invitation; counsel for the appellee accepted and stated to the jury that the defense theory was first, that the shooting was a necessary incident to making an arrest of Edwin Baggett for the commission of a felony and, second, that' the shooting was in self-defense and therefore justified. In accordance with this first stated theory, the Court then instructed the jury concerning the circumstances under which an officer may make an arrest for the alleged commission of a felony, gave a definition of burglary, charged that burglary and attempted burglary constitute felonies, and outlined the circumstances under which an officer might kill in making an arrest of a felon. A review of the record of this case indicates that the statements of counsel in setting out his theory of defense and the charge of the Court to the jury on these points goes well beyond the theory of defense as set out in the pleadings and the pre-trial order. The pleadings under which this ease was tried did not raise the defense of the right to kill to prevent the escape of a felón. Since the practice deprives the opposing party of an opportunity to present evidence to counter the new theory, it is reversible error for a court to give instructions concerning an issue not raised by the pleadings. Carpenter v. Baltimore & Ohio R.R., 109 F.2d 375 (6th Cir. 1940); Black, Sivalls & Bryson, Inc. v. Shondell, 174 F.2d 587 (8th Cir. 1949). The appellees’ reliance upon Federal Rule of Civil Procedure 15(b) is misplaced. That rule provides that when issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings, and that the failure to amend a pleading to conform to the evidence does not affect the result of the trial on these issues. This rule is, by its terms, not applicable where the evidence does not support the theory upon which the Court charged the' jury. In this ease, although' there was inconclusive evidence concerning a broken door latch, there was no direct evidence that the decedent had committed a felony, or that he was attempting to escape. (To the contrary, the evidence showed that the decedent pursued the Sheriff, rather than fled from him.) It is reversible error for the court to give instructions which leave the way open for a jury to consider a question that has been suggested or mentioned during the trial which is not at issue or is not supported by the evidence. Fleming v. Husted, 164 F.2d 65 (8th Cir. 1947). The judgment of the District Court is reversed and the cause is remanded for a new trial consistent with this opinion.

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Anthony T. LEE et al., Plaintiffs, United States of America, Plaintiff-Intervenor and Amicus Curiae-Appellant, National Education Association, Inc., Plaintiff-Intervener, v. MACON COUNTY BOARD OF EDUCATION et al., Defendants, Troy City Board of Education et al., Defendants-Appellees. No. 72-1040. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Ira DeMent, U. S. Atty., Montgomery, Ala., David L. Norman, Acting Asst. Atty. Gen., Solomon S. Seay, Montgomery, Ala., John Scott, Brian K. Lands-berg, U. S. Dept, of Justice, Washington, D. C., for appellant. Oliver Brantley, Troy, Ala., for appellees. Before JOHN R. BROWN, Chief Judge, and INGRAHAM and RONEY, Circuit Judges. PER CURIAM: A desegregation plan for the public school system in the City of Troy, Alabama, was approved by a three judge district court on June 12, 1970, and affirmed on appeal to this court. Lee v. City of Troy Board of Education, 5 Cir., 1970, 432 F.2d 819. Under the provisions of this plan, there were to be three elementary schools: (i) Troy Elementary with grades 1-4; (ii) the Laboratory School, formerly an appendage of Troy State University, with grades 1-4; and (iii) Oakland Heights, an all-black elementary school located “deep in the heart of a predominantly Negro residential area” for grades 1-3. At the time of our first decision in this case we were aware of the fact that the city’s use of the Laboratory School facility was only temporary. See 432 F.2d 821 n. 7. When Troy State University reclaimed its facilities at the end of the 1970-71 school year, it became necessary for the school to be housed in the Old Troy Junior High building, which happened to be within the attendance zone for Oakland Heights. Because of this overlapping of schools, the United States moved the district court for supplemental modification of the plan. Due to the temporary nature of the use of this building, the district court below declined to further modify the plan. The United States appealed. We affirm. Our review of the case convinces us that the City of Troy Board of Education is moving expeditiously to relocate the Laboratory School within its original attendance zone under the requirements of the plan which we previously approved. It also plans to raze the current Troy Elementary school building and rebuild a new facility on the same site. Construction of these new facilities has been too long delayed by this impending litigation. By affirming the order of the court below, which merely declined to tamper with a plan which had already survived the rigors of an industrious three judge district court and a panel of this court on review, we express our hopes that the progress of education in the City of Troy will hereafter be swift and unimpeded. With a fair and viable unitary school system functioning, perhaps the people of Troy can now be free to focus on the salutary and unitary duty of providing a quality education for all of their children. Affirmed. . AH three of the contingent sites for the school are adjacent to the campus of Troy State University and clearly within the attendance zones established by the plan. . Most — if not all — of the costs of these new facilities are to be defrayed by a generous grant from the estate of former Alabama Governor Charles Henderson. Haste is required in the disposition of the matter, however, since the funds must — according to the terms of the will— be utiHzed in calendar 1973 or forfeited. We lament our overly-long delay in handling the case. We hope that the new educational facilities can now be constructed without further delay or complications.

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NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HOOKER CHEMICAL CORPORATION, Respondent. No. 72-1736. United States Court of Appeals, Sixth Circuit. Argued Feb. 13, 1973. Decided March 15, 1973. R. Bruce McLean, N. L. R. B., for petitioner-appellant; Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Robert A. Giannasi, Atty., N. L. R. B., Washington, D. C., on brief. Robert A. Kennedy, Garden City, N. Y., for respondent-appellee; Doran, Colleran, O’Hara & Dunne, Garden City, N. Y., on brief. Before PHILLIPS, Chief Judge, KENT, Circuit Judge, and MCALLISTER, Senior Circuit Judge. ORDER. This is a petition for enforcement of an order of the National Labor Relations Board which should never have been brought to the attention of this Court. We are at a loss to conceive of any reason why the time of this Court and, in fact, the time of the Board should have been required to accomplish a result which the Respondent accomplished before the exceptions to the Trial Examiner’s decision were filed with the Board. The facts are simple. By unilateral action the Respondent eliminated the 1969 Christmas bonus at six units in five of its plants. An unfair labor practice complaint was filed. On June 10, 1970, a Trial Examiner for the NLRB found that Respondent had violated Sections 8(a)(5) and (1) of the Act, 29 U. S.C. §§ 158(a)(5) and (1). It is undisputed that after the decision and before exceptions were filed Respondent paid the 1969 Christmas bonus, and even before the decision of the Trial Examiner it had, during the course of contract negotiations, bargained with the appropriate representatives and eliminated the Christmas bonus as a subject of future bargaining at all except one of the plants. There were other reasons for exceptions to the Trial Examiner’s decision since that decision required the payment of the Christmas bonus to pensioners, retirees and employees in the Armed Services. The Board’s order was modified subsequent to the decision of the United States Supreme Court in Chemical Workers v. Pittsburgh Plate Glass, 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971), and those issues are not now before us. The only issue before us and the only reason why this petition for enforcement was filed is because the Board’s order required the posting of a Notice to Employees couched in the future tense although the bonus had already been paid and the Company had negotiated or was negotiating the issue. The Respondent now agrees that it will comply with an order to post appropriate notices and in its brief has set forth what this Court considers to be appropriate notices. Although we still consider that this matter could well be resolved without an order for enforcement since the Respondent agrees to post modified notices it is ordered that the order of the Board be modified to require the posting of notices in the form described, and as modified the order is enforced. . The Board’s decision and order is reported at 186 NLRB No. 49. . WE DID, pursuant to an order of the NATIONAL LABOR RELATIONS BOARD, restore to our employees in the bargaining unit described below, the bonus program we had before 1969; WE HAVE, pursuant to an order of the NATIONAL LABOR RELATIONS BOARD, paid to our employees in the bargaining unit described below the 1969 Christmas bonus, plus six (6) per cent interest; WE HAVE, in accordance with an order of the NATIONAL LABOR RELATIONS BOARD, bargained with (indicating name of appropriate bargaining unit for employees in each of the aforementioned plants) regarding the elimination of such Christmas bonus, and, as a result of such negotiations, the Christmas bonus has been eliminated as part of the compensation of the employees in this bargaining unit. WE HAVE, pursuant to an order of the NATIONAL LABOR RELATIONS BOARD, restored to our employees in the Niagara Hooker Employees Union, the bonus program we had before 1969; WE HAVE, pursuant to an order of the NATIONAL LABOR RELATIONS BOARD, paid to all eligible employees in such unit the 1969 Christmas bonus, plus six (6) per cent interest; WE WILL NOT refuse to bargain with the Niagara Hooker Employees Union by changing or eliminating the Christmas bonus unilaterally in the future.

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Jesse ROOTS, Plaintiff-Appellant, v. J. A. CALLAHAN, Inspector in Charge Of Post Office Department, Defendant-Appellee. No. 72-3589 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 20, 1973. Jesse Roots, pro se. John L. Briggs, John D. Roberts, Asst. U. S. Attys., Jacksonville, Fla., j. A. Callahan, Postal Inspector in Charge, Atlanta, Ga., for defendant-appellee. Before BELL, GODBOLD and IN-GRAHAM, 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. PER CURIAM: Jesse Roots, a prisoner of the State of Florida, filed a pro se complaint in the district court seeking a declaratory judgment against J. A. Callahan, Inspector in Charge, United States Postal Service. Roots sought an order to compel Callahan to investigate interference with his postal service. The district court, construing the complaint as an action under 42 U.S.C. § 1983, felt that the alleged interferences were within the institution and that therefore an action against the Inspector would not lie since he relinquished custody and control of the mail when delivered to the prison. Roots filed a pro se petition for rehearing, in which he reemphasized his contention that the abuses were being committed outside the confines of the institution in which he was incarcerated. The district court denied the petition for failure to establish grounds for recovery. A pro se petition should not be dismissed unless it appears beyond a reasonable doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972). We are of the opinion that the district court erred in construing the complaint as a civil rights action. The gravamen of the complaint was the refusal of the postal inspector to conduct an investigation into alleged mail obstructions occurring outside the prison walls, not a claimed abuse of censorship by the prison officials. Nonetheless the dismissal must be affirmed. While jurisdiction could be grounded on 28 U.S.C. § 1339 and 39 U.S.C. § 409, a writ of mandamus would not lie to compel the postal inspector to perform a discretionary duty of investigation. The judgment of the district court is affirmed. . It is settled that a suit will not lie under 42 U.S.C.A. § 1983 against a federal official acting under color of federal law. See Norton v. McShane, 332 F.2d 855, 862 (5th Cir., 1964); Betha v. Reid, 445 F.2d 1163, 1164 (3rd Cir., 1971); Williams v. Rogers, 449 F.2d 513, 517 (8th Cir., 1971). . The record indicates that the inspector exercised his initial nondiscretionary duty by notifying Roots of his decision not to investigate.

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UNITED STATES of America, Plaintiff-Appellee, v. James Dale PATMORE, Defendant-Appellant. No. 72-1402. United States Court of Appeals, Tenth Circuit. Argued and Submitted Nov. 15, 1972. Decided March 26, 1973. Edward H. Funston, Asst. U. S. Atty., Topeka, Kan. (Robert J. Roth, U. S. Atty., and Richard L. Meyer, Asst. U, S. Atty., Topeka, Kan., on the brief), for plaintiff-appellee. Thomas M. Dawson, Leavenworth, Kan., for defendant-appellant. Before LEWIS, Chief Judge, and PICKETT and MCWILLIAMS, Circuit Judges. PICKETT, Circuit Judge. While imprisoned at the Leavenworth, Kansas, federal penitentiary, Patmore was accused of stabbing another inmate. He was indicted in federal court for aggravated battery in violation of Kan. Stat.Ann.1971 Supp. 21-3414(c), a class C felony, through the Assimilative Crimes Act, 18 U.S.C. § 13, (1970). During the course of the trial Patmore entered a plea of guilty to aggravated assault, a lesser included offense and a violation of Kan.Stat.Ann.1971 Supp. 21-3410(a). He was sentenced to serve a three to ten year sentence under Kan. Stat.Ann.1971 Supp. 21-4501 (d). Patmore’s only contention on appeal is that there is a federal assault statute, 18 U.S.C. § 113(c) (1970), that defines the same offense as the Kansas statute to which he pleaded guilty, and that he should have been sentenced under the federal statute, which provides for a maximum penalty of five years. Patmore’s “Motion to Correct Excessive Sentence” was overruled. The trial court held that the state and federal statutes were not identical since the federal statute required proof of specific intent to do bodily harm, whereas the Kansas statute made no mention of specific intent. We hold that the precise acts to which Patmore pleaded guilty were made penal by the federal statute defining assault, 18 U.S.C. § 113(c) (1970), and cannot be redefined by application of the Assimilative Crimes Act. The crime of assault is defined in Kan.Stat.Ann.1971 Supp. 21-3408 as “an intentional threat or attempt to do bodily harm to another. . . .” This language, when read in conjunction with Kan.Stat.Ann.1971 Supp. 21-3410(a), is the equivalent'of 18 U.S.C. § 113(c) (1970) . The purpose of the Assimilative Crimes Act, 18 U.S.C; § 13 (1970), is to supplement the Criminal Code of the United States by adopting state criminal statutes relating to acts or omissions committed within areas over which the federal government has exclusive jurisdiction and which are “not made punishable by any enactment of Congress.” The Act has no application if such acts or omissions are made penal by federal statute. United States v. Sharpnack, 355 U.S. 286, 78 S.Ct. 291, 2 L.Ed.2d 282 (1958); Williams v. United States, 327 U.S. 711, 66 S.Ct. 778, 90 L.Ed. 962 (1946); Dunaway v. United States, 170 F.2d 11 (10th Cir. 1948); Fields v. United States, 438 F.2d 205 (2d Cir. 1970), cert. denied, 403 U.S. 907, 91 S.Ct. 2214, 29 L.Ed.2d 684 (1971) . In the instant case, Patmore pleaded guilty to unlawfully assaulting or striking at another with a deadly weapon, which is a class D felony under the Kansas statute. AÍthoügh the crime may be within the definition of the Kansas statute, it is punishable under the provisions qf 18 U.S.C. § 113(c) (1970), which prevail. Hockenberry v. United States, 422 F.2d 171 (9th Cir. 1970). A federal criminal statute -may not be enlárged or diminished by a state statute. Williams v. United States, 327 U.S. 711, 718, 66 S.Ct. 778, 90 L.Ed. 962 (1946). The judgment and sentence is set aside, and the cause remanded for sentencing under 18 U.S.C. § 113(c) (1970). LEWIS, Chief Judge (concurring in the result). I concur in the result reached by the majority opinion but only because the penalty for assault under 18 U.S.C. § 113(c) is less severe than the penalty under Kan.Stat.Ann. §§ 21-3410(a), 21-4501 (d). The relief given is appropriate under the posture of the case as presented to us and consistent with fundamental fairness. However the rationale of the main opinion would appear to require imposition of the federal sentence in any case where a plea (as here) or a conviction occurs for a state defined included offense that falls within the bounds of a federal statutory offense. I would hold open for future consideration the nature of appropriate relief or sentence when and if a case arises where the federal sentence is more severe. . The charging language of the indictment is that Patmore “wilfully, unlawfully and feloniously committed an act of aggravated battery against and upon John Wesley Fuller by means of a deadly weapon, to-wit: a knife, in violation of 18 U.S.C. §§ 7, 13, and K.S.A. 21-3414 (c).” . 18 U.S.C. § 113(c) (1970) : “Whoever ... is guilty of an assault shall be punished as follows : (c) Assault with a dangerous weapon, with intent to do bodily harm, and without just cause or excuse, by imprisonment for not more than five years. Kan.Stat.Ann.1971 Supp. 21-3410 (a) : “Aggravated assault is: (a) Unlawfully assaulting or striking at another with a deadly weapon. . . .” . This analysis does not consider the possible imposition of a fine up to $1,000.00 under 18 U.S.C. § 113(c).

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WESTERN COACH CORPORATION, an Arizona corporation, Plaintiff-Appellee, v. Leroy SHREVE, dba Lee’s Refrigeration, and Wilson D. Palmer, Clerk of the Superior Court of the State of Arizona, in and for the County of Maricopa, Defendants, Leroy Shreve, dba Lee’s Refrigeration, Defendant-Appellant. No. 72-2534. United States Court of Appeals, Ninth Circuit. March 6, 1973. Edward Crehan Rapp, of Tupper, Rapp, Salcito & Schlosser, Phoenix, Ariz., for defendant-appellant. Henry Jacobowitz, Phoenix, Ariz., for plaintiff-appellee. Before DUNIWAY, HUFSTEDLER and CHOY, Circuit Judges. CHOY, Circuit Judge: Shreve brought a civil action against the Western Coach Corp. (Western) and sought to attach Western’s bank account under Arizona’s garnishment laws. Western thereafter instigated a declaratory judgment action asking that the garnishment laws of the State of Arizona, A.R.S. §§ 12-1571 to 12-1595, be declared unconstitutional insofar as they permit pre judgment garnishment without providing adequate notice and an opportunity for a hearing. The district court, 344 F.Supp. 1136, relying on Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969) and Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) ruled that the statutes were unconstitutional in that they violated the due process clause of the Fourteenth Amendment of the United States Constitution. We affirm. In Sniadach the Supreme Court decided that a Wisconsin prejudgment wage garnishment statute violated a debtor’s right to procedural due process by sanctioning the taking of his property without affording him prior notice and a hearing. Since that decision the validity of various summary pre judgment remedies has been questioned. Some courts have construed Sniadach as setting forth general principles of procedural due process and have struck down such remedies. See Fuentes, supra at 72, Fn. 5, 92 S.Ct. 1983. “Other courts, however, have construed Sniadach as closely confined to its own facts and have upheld such summary pre judgment remedies, [citations omitted]” Fuentes, supra at 73, Fn. 5, 92 S.Ct. at 1990. But any doubts about the reach of Sniadach have been eliminated by the decision in Fuentes, in which the Court held that Florida and Pennsylvania prejudgment replevin statutes were invalid because they did not provide for a hearing prior to the deprivation. The Court made it clear that Sniadach stood for a general principle that the right to notice and a hearing must be granted at a time when the deprivation can still be prevented. Fuentes, supra at 81, 92 S.Ct. 1983. Moreover, the fact that the state provided remedies that permitted a later recovery of seized property or damages for wrongful deprivation does not eliminate the need for a prejudgment hearing. Fuentes, supra at 81-2, 92 S.Ct. 1983. The Court also noted that while its prior rulings involved necessities such as wages and welfare benefits, “[i]n none of those cases did the Court hold that this most basic due process requirement is limited to the protection of only a few types of property interests.” Fuentes, supra at 89, 92 S.Ct. at 1998. While there are some extraordinary situations that justify postponing notice and an opportunity for a hearing, the instant case does not present such an unusual situation. See generally, Fuentes, supra part VI. The Arizona garnishment laws do not comply with the constitutional due process requirement. Affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Helen CRABTREE, et al., Defendants-Appellants. No. 71-2809. United States Court of Appeals, Fifth Circuit. March 7, 1973. Nicholas J. Capuano, Miami, Fla., for Crabtree. Max Lurie, Miami, Fla., for Laff. E. David Rosen, Miami, Fla., for Yunes. Louis Vernell, Miami Beach, Fla., for Nardone. Robert W. Rust, U. S. Atty., Gary L. Betz, Atty., U. S. Dept, of Justice, Miami, Fla., John Robinson, Dept, of Justice, Washington, D. C., for plaintiffappellee. Before PHILLIPS, THORNBERRY and RONEY, Circuit Judges. Hon. Orie L. Phillips, of the Tenth Circuit, sitting by designation. BY THE COURT: This cause is hereby remanded to the District Court for an expedited evidentiary hearing to determine whether the wiretap applications in this case were properly authorized under 18 U.S.C.A. §§ 2510-2520. Although appellants’ previous motion to remand was denied by a panel of this Court, we think that the renewed motion must be granted on the authority of United States of America v. Robinson, 472 F.2d 973 (5th Cir. 1973). As we understand the en banc decision of this Court in Robinson, where there is an issue of fact as to the procedure followed in a wiretap authorization, that issue must first be resolved by the District Court, and this Court will not attempt to determine the facts on affidavits. Such an issue is present in this case. As in Robinson, the regularity of the procedure for authorization of the interception applications within the Department of Justice was not challenged by appellants until this appeal was pending. The Government argues that this case differs from Robinson because here, the affidavits of John N. Mitchell and Sol Lindenbaum filed with this Court establish the fact that the application for the wire interceptions in this case had been personally approved by then Attorney General John N. Mitchell. Our difficulty, however, stems from the response filed by appellants which challenges the factual accuracy and interpretation of the affidavits. We understand Robinson to control this exact situation. Where the resolution of the legal sufficiency of a wiretap authorization depends upon a court determination of the facts which support the application, those facts cannot be proved by an affidavit filed for the first time with the appellate court, where the issue has not been raised, litigated or decided in the trial court. We need not determine the disposition that we would give to the case were the facts before us stipulated or unchallenged. We understand that as a result of Robinson, the trial court in that case and in other pending cases which involve similar and related issues has issued subpoenae for former Attorney General John N. Mitchell, and Executive Assistant Attorney General Sol Lindenbaum, both of whose affidavits have been filed with us in this case, and for former Assistant Attorney General Will Wilson, and Assistant Attorney General Henry E. Petersen, all returnable on March 19, 1973. We agree with appellants that judicial economy and the convenience of these witnesses importune a remand of this case so that the parties may be permitted to participate in the evidentiary hearings scheduled for the other cases. As reflected in Robinson, the unusual importance of the issue compels us to follow this procedure, although normally litigants would be expected to raise factual issues in the trial court prior to appeal or run the risk that they would be foreclosed from attacking the factual basis of a wiretap interception at the appellate level. The District Court will make findings of fact and conclusions of law which, with the complete record, will be forthwith transmitted to this Court. All other issues raised by either party are reserved. Remanded with directions.

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UNITED STATES of America, Plaintiff-Appellee, v. Joseph Stanley TODD, Defendant-Appellant. No. 72-3234 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 19, 1973. Edward J. Winter, Jr., Miami, Fla. (Court-Appointed, but not under Act), for defendant-appellant. Robert W. Rust, U. S. Atty., Charles Farrar, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee. Before JOHN R. BROWN, Chief Judge and DYER and SIMPSON, Circuit Judges. Rule 18, 5 Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: The appellant with two other persons was charged by a three count indictment with three offenses involving a Schedule II controlled substance, approximately 3970 amphetamine tablets, under Title 21, U.S.Code, Sections 846 and 841(a)(1), such sections being embodied in Public Law 91-513, October 27, 1970, 84 Stat. 1242, known as the Controlled Substances Act. One defendant plead guilty prior to trial and Todd went to trial before a jury with the other of his codefendants. After several witnesses had testified the two defendants on trial were permitted by the court to withdraw their pleas of not guilty and to enter pleas of guilty to Count III of the indictment, the count charging knowing and intentional distribution of the Schedule II controlled substance. After receiving the guilty pleas to Count III the trial judge deferred sentence pending pre-sentence investigation and report. Todd’s sentence, imposed some weeks later, was to confinement in the custody of the Attorney General for two years, plus a special parole term of two years. The sole issues raised by appellant which are even arguably appealable are concerned with the sentence imposed by the trial court and with whether or not appellant's motions for post-trial relief and for medical rehabilitation and treatment at a federal treatment center should have been granted. We hold that these questions were addressed to. the trial court’s discretion and will not be disturbed by us on appeal. Withrow v. United States, 5 Cir. 1969, 420 F.2d 1220; Sullivan v. United States, 5 Cir. 1963, 317 F.2d 101; Beitel v. United States, 5 Cir. 1962, 306 F.2d 665. In addition, we note with approval the trial court’s patient attempts — by setting further hearings and by reserving further rulings — to give full opportunity for appellant’s counsel to develop facts warranting a commitment or a recommendation for treatment at Lexington, Kentucky, or a similar center for the treatment of drug addiction. Defense counsel simply never furnished any testimony, affidavits, or any indication of the defendant’s addiction other than counsel’s hearsay statements to the court, despite the trial court’s repeated offer to hear further testimony in this respect. We view this appeal as bordering on the frivolous. The judgment appealed from is in all respects Affirmed. . Count I of the indictment charged conspiracy under Title 21 U.S.C., § 846 to violate Section 841(a)(1): Count II charged knowing and intentional possession of a Schedule II controlled substance, 3970 amphetamine tablets, with intent to distribute, in violation of Title 21, U.S.C., § 841(a)(1) and Title 18, U.S.C., § 2; and Count III charged knowingly and intentionally distributing the same Schedule II controlled substance, 3970 amphetamine tablets, in violation of Title 21, U.S.C., § 841(a) (1) and Title 18, U.S.C., §2. Since the contentions on appeal are addressed to the trial court’s sentencing discretion we cite from Title 21, U.S.C., § 841(b)(1)(B), the penalty provisions of the Controlled Substances Act in the case of a controlled substance which is not a narcotic drug. Under the conspiracy charge, Count I, as well as under each of the substantive offenses, Counts II and III, since the appellant was not shown to have a similar prior conviction, the maximum punishment for each count was a term of imprisonment of not more than five years, a fine of not more than $15,000, or both. The statute also requires as an adjunct of any sentence imposing a term of imprisonment a special parole term of at least two years in addition to the term of imprisonment. Thus at the time of the change of plea, Todd’s possible exposure in the event of conviction under Counts I, II and III was to 15 years imprisonment, $45,000 in fines, with at least six years' of special parole time to follow. . Counts I and II of the indictment were dismissed on the date of sentence as to Todd. . An additional question raised which we decline to consider, is the adequacy of the fee allowed appellant’s counsel as court-appointed attorney by the trial judge as compensation under Title 18, U.S.C., § 3006A(b), Criminal Justice Act. This appeal is not the appropriate vehicle for consideration of appointed counsel’s financial complaints. See United States v. Sullivan, 5 Cir. 1972, 456 F.2d 1273, 1275.

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UNITED STATES of America, Plaintiff-Appellee, v. Curtis Leroy OWENS, Defendant-Appellant. No. 72-2567. United States Court of Appeals, Fifth Circuit. March 30, 1973. John B. McAdams, Dallas,'Tex., court appointed, for defendant-appellant. William S. Sessions, U. S. Atty., Joel D. Conant, Asst. U. S. Atty., San Antonio, Tex., Ronald F. Ederer, Asst. U. S. Atty., El Paso, Tex., for plaintiff-appellee. Before WISDOM, GEWIN and COLEMAN, Circuit Judges. PER CURIAM: The defendant, Owens, appeals from his non-jury conviction for possession of heroin in violation of 21 U.S.C. § 844(a). There is no reason to explore the dimensions of “probable cause” in airport, arrests and searches. Here Owens voluntarily agreed to accompany Customs Security Officer Harris to the office of Customs Patrol Officer Castro. Apparently Owens panicked, knocked down Castro, put a cellophane package in his mouth, and began to run away. At this point there was probable cause to arrest Owens and remove the package from his mouth. It was heroin. Owens cannot complain that his rights were violated by his being taken to a hospital where a stomach pump was used to extract heroin. At the time he appeared to be unconscious or semi-conscious and the officers acted in good faith to prevent further harm to him. This case bears no resemblance to Rochin v, California, 1952, 342 U.S. 165, 72 S.Ct. 205, 96 L.Ed. 183. We hold, therefore, that the district court did not err in overruling the defendant’s motion to suppress the evidence. See Rener v. Beto, 5 Cir. 1971, 447 F.2d 20. The judgment is affirmed.

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Ottis Mayo JONES, Petitioner-Appellant, v. J. D. RIGGSBY, Associate Warden, United States Penitentiary, Atlanta, Ga. Respondent-Appellee. No. 73-1180. Summary Calendar United States Court of Appeals, Fifth Circuit. March 20, 1973. Ottis Mayo Jones, pro se. John W. Stokes, Jr., U. S. Atty., Beverly B. Bates, Asst. U. S. Atty., Atlanta, Ga., for respondent-appellee. Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges. PER CURIAM: Appellant is a federal prisoner who has complained, inter alia, that prison officials in the United States Penitentiary at Atlanta have prevented his free exercise of religion in connection with a group which he founded, styled the Equity Counselling Services, also known as the Church of Equity. The district court denied relief relative to this claim; but deferred ruling on certain other claims set out in the appellant’s complaint. The court did not, however, make the certification authorized by Rule 54(b), F.R.Civ.P., that the ruling on the religious issue was final and appealable. Such a certificate is “a jurisdictional prerequisite for an appeal of less than all of the claims in an action.” United States v. Crow, Pope and Land Enterprises, Inc., 5th Cir. 1973, 474 F.2d 200; Fallis v. United States, 5th Cir. 1973, 476 F.2d 619. For lack of a final appealable order this appeal must be and is hereby dismissed. Appeal dismissed. . It is appropriate to dispose of this pro se case summarily, pursuant to this Court’s local Rule 9(c) (2), appellant having failed to file a brief within the time fixed by Rule 31, Federal Rules of Appellate Procedure. Kimbrough v. Beto, Director, 5th Cir. 1969, 412 F.2d 981.

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Anthony D. DUKE, Plaintiff-Appellant, v. Joel HOCH et al., Defendants, Home Indemnity Company, Garnishee-Appellee. No. 71-2223. United States Court of Appeals, Fifth Circuit. Feb. 20, 1972. Marvin H. Gillman, Miami, Fla., for plaintiff-appellant. William M. Hoeveler, Miami, Fla., for garnishee-appellee. Before BELL, AINSWORTH and GODBOLD, Circuit Judges. . PER CURIAM. By our decision in Duke v. Hoch, et al., 468 F.2d 973 (5th Cir., 1972) we reversed a judgment entered for the insurer-garnishee and remanded for further proceedings. Counsel for the appellant has filed a motion for allowance of attorney fees for his services on appeal, pursuant to Florida Statute 627.428, F.S.A. The motion is denied without prejudice to application in the trial court for fees allowable under § 627.428, for services on appeal, should the appellant ultimately “prevail.” “While he has won a round in this bout, the cause is not yet concluded in his favor, and we think that he has not yet ‘prevailed’ in the statutory sense.” Segelstrom v. Blue Shield of Florida, Inc., 233 So.2d 645, 646 (Fla.App.1970). As in Segelstrom, “should final judgment be entered for [appellant] the trial judge may then evaluate the briefs filed in aid of this appeal and determine appropriate compensation.” Id. at 646. . Formerly § 627.0127.

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Willie Lee JOHNSON, alias Will Johnson, No. 18914-149, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee. No. 72-3669 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 23, 1973. Bishop W. J. Johnson, pro se. Donald E. Walter, U. S. Atty., Shreveport, La., for respondent-appellee. Before WISDOM, AINSWORTH and CLARK, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: Willie Lee Johnson appeals from the district court’s denial of his motion under 28 U.S.C. § 2255 to vacate his conviction and sentence. We dismiss the appeal as not timely filed. On July 24, 1972, the district court denied Johnson’s motion for relief under § 2255. The appellant did not file a notice of appeal or similar document until October 24, 1972, when this Court received his “petition of appeal.” This petition was later filed in the district court on November 3, 1972, as a notice of appeal. The appeal proceeded forthwith without further authorization. See Rule 24(a), F.R.A.P. Rule 4(a), F.R.A.P., requires that notice of appeal in a case in which the United States is a party be filed within 60 days after the date of entry of the judgment or order sought to be appealed. The Rule further provides, in part, that “Upon a showing of excusable neglect, the district court may extend the time for filing the notice of appeal by any party for a period not to exceed 30 days from the expiration of the time otherwise prescribed by this subdivision.” Johnson’s “petition for appeal” was not received by this Court until two days after the 90-day maximum period for filing a notice of appeal had elapsed. This Coiirt, therefore, has no jurisdiction to entertain Johnson’s appeal, and it must be dismissed. Tribbitt v. Wainwright, 5 Cir. 1972, 462 F.2d 600; Dunn v. Henderson, 5 Cir. 1971, 446 F.2d 1398; Bean v. Wainwright, 5 Cir. 1971, 437 F.2d 112. Appeal dismissed. . The appellant has not alleged, nor does the record suggest, that his delay resulted from his “excusable neglect” or from any cause beyond his control. Cf. Tribbitt v. Wainwright, 5 Cir. 1972, 462 F.2d 600.

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UNITED STATES of America, Plaintiff-Appellee, v. Richard Herman LORD, Defendant-Appellant. No. 72-2914. United States Court of Appeals, Ninth Circuit. March 19, 1973. Robert I. Deutscher (argued), Tacoma, Wash., for defendant-appellant. Irwin Schwartz, Asst. U. S. Atty. (argued), Thomas P. Giere, Asst. U. S. Atty., Stan Pitkin, U. S. Atty., Seattle, Wash., for plaintiff-appellee. Before CHAMBERS and TRASK, Circuit Judges, and SCHNACKE, District Judge. Honorable Robert H. Scbnaeke, United States District Judge for the Northern District of California, sitting by designation. PER CURIAM: Defendant was convicted of narcotics violations. We affirm. The evidence on entrapment being in conflict, the issue was properly submitted to the jury. United States v. Griffin, 434 F.2d 978 (9th Cir., 1970), certiorari denied sub nom. Andrews v. United States, 402 U.S. 995, 91 S.Ct. 2170, 29 L.Ed.2d 160 (1971). We decline to add to the prosecution’s burden by holding that absence of entrapment is an element of the offense charged, rather than a defense to be overcome by the prosecution like other defenses, once it is established as a legitimate issue. Cf. Pulido v. United States, 425 F.2d 1391 (9th Cir., 1970). The trial judge’s comments to the jury, while not a model, did not, when taken as a whole constitute reversible error. Defendant’s remaining point, pre-indictment delay, is equally without merit, United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971), even if preserved for appeal, United States v. Garcia, 422 F.2d 1301 (9th Cir., 1970). Affirmed. . We cannot approve, for example, the judge’s statement, that he found defendant’s story incredible and did not believe it.

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William J. LYNCH, Plaintiff-Appellant, v. PAN AMERICAN WORLD AIRWAYS, INC., Defendant-Appellee. No. 72-3782 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 22, 1973. Arthur Massey, Miami, Fla., Jon D. Caminez, Tallahassee, Fla., for plaintiff-appellant. Hervey Yancey, Miami, Fla., Smathers & Thompson, Miami, Fla., for defendant-appellee. Before JOHN R. BROWN, Chief Judge and DYER and SIMPSON, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: The sole issue presented by Plaintiff-Appellant in this appeal is that the trial court erred in granting the Defendant’s motion to strike Plaintiff’s motion for a jury trial. Plaintiff contended that he was discriminatorily discharged by his employer because of his race. Shunning the support of Title VII, 42 U.S.C.A. § 2000e, Plaintiff cast his complaint under 42 U.S.C.A. § 1981. He sought essentially reinstatement with backpay plus compensatory and punitive damages. The trial court found that the gist of the complaint was equitable, and, accordingly, denied Plaintiff’s request for a jury trial. We affirm. A claim for reinstatement is equitable in nature. The imposition of monetary damages to make the employee whole for lost backpay does not change the character of the proceeding and thereby mandate a jury trial. Harkless v. Sweeny Independent School District, 5 Cir., 1970, 427 F.2d 319; Johnson v. Georgia Highway Express, Inc., 5 Cir., 1969, 417 F.2d 1122; Smith v. Hampton Training School for Nurses, 4 Cir., 1966, 360 F.2d 577; Williams v. Travenol Laboratories, Inc., N.D.Miss., 1972, 344 F.Supp. 163. Neither may the Plaintiff —by framing his prayer under § 1981 or by making unsupported allegations for compensatory and punitive damages —unilaterally alter the genre of the proceeding. Affirmed.

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NATIONAL LABOR RELATIONS BOARD, Petitioner, v. NASHUA PRE-CAST CORPORATION, Respondent. No. 72-1339. United States Court of Appeals, First Circuit. Argued March 6, 1973. Decided March 16, 1973. Edward N. Bomsey, Attorney, Washington, D. C., with whom Peter G. Nash, General Counsel, Patrick Hardin, Associate General Counsel, Marcel MalletPrevost, Asst. General Counsel, and Leonard M. Wagman, Attorney, Los Angeles, Cal., were on brief, for petitioner. Julius Kirie, Boston, Mass., for respondent. Before COFFIN, Chief Judge, AlDRICH and McENTEE, Circuit Judges. PER CURIAM. The basic question presented on this petition for enforcement is whether there was substantial evidence to support the Board’s findings. Without in any way departing from our rule that the burden of producing evidence, as distinguished from speculation, is on the Board, e. g., NLRB v. Millard Metal Service Center, Inc., 1 Cir., 1973, 472 F.2d 647; Cross Baking Co. v. NLRB, 1 Cir., 1971, 453 F.2d 1346, respondent’s criticism of the Board’s decision, 198 N.L.R.B. No. 30 (1972), cannot be viewed as of that nature. Respondent’s over-extensive briefing recites evidence which might have warranted a different result, but it does not require us to reject the evidence on which the Board relied, or the inferences it reasonably drew therefrom. The order will be enforced.

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R. L. RENKEN et al., Plaintiffs-Appellees, v. HARVEY ALUMINUM (INCORPORATED), Defendant-Appellant. No. 72-2564. United States Court of Appeals, Ninth Circuit. March 27, 1973. See also D.C., 347 F.Supp. 55. Arden E. Shenker (argued), Lamar Tooze, Jr., Robert M. Kerr, Portland, Ore., for defendant-appellant. Douglas M. Ragen (argued), Frederic A. Yerke, of Miller, Anderson, Nash, Yerke & Wiener, Portland, Ore., for plaintiff s-appellees. Before BARNES, MERRILL, and HUFSTEDLER, Circuit Judges. PER CURIAM. This is an appeal by the defendant from an Order of the United States District Court for the District of Oregon, confirming the arbitrator’s award for the plaintiffs, after the entry of a consent decree. Error is charged against the District Court’s Order confirming the award, made on June 14, 1972, in two respects: (a) respondent’s alleged error in failure to give adequate notice; and (b) an alleged fraud in presentation of an earlier claim by a respondent. We find no merit in this appeal, and we find it a frivolous appeal. Rule 38, Federal Rules of Appellate Procedure. While the factual basis is not as flagrant as that in Lowe v. Willacy, 239 F.2d 179 (9th Cir. 1956), and Furbee v. Vantage Press, Inc., 150 U.S.App.D.C. 326, 464 F.2d 835, 837-838 (1972), we hold a penalty is proper against appellant. The District Court’s Order is affirmed and the case is remanded to the District Court for the assessment of double costs to the appellees.

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Glen GAFFORD, Plaintiff-Appellant, v. STAR FISH & OYSTER COMPANY, Defendant-Appellee. No. 72-3638 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 22, 1973. R. C. Edwins, Baton Rouge, La., for plaintiff-appellant. Robert H. Smith, Mobile, Ala., for defendant-appellee. Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: Plaintiff challenges the manner in which trial court required him to exercise his peremptory challenges in this civil suit. The crux of his argument is that he was forced to exercise his challenges first, and that the Defendant was allowed to exercise his challenges thereafter with full knowledge of the Plaintiff’s choices. The manner in which peremptory challenges are to be exercised is committed to the sound discretion of the trial Judge. 28 U.S.C.A. § 1870. See Nehring v. Empresa Lineas Maritimas Argentinas, 5 Cir., 1968, 401 F.2d 767; Carey v. Lykes Brothers Steamship Company, Inc., 5 Cir., 1972, 455 F.2d 1192; Moore v. South African Marine Corporation, Ltd., 5 Cir., 1972, 469 F.2d 280. Cf. United States v. Franklin, 5 Cir., [1973], 471 F.2d 1299; United States v. Williams, 5 Cir., 1971, 447 F.2d 894, 896-897; United States v. Sams, 5 Cir., 1972, 470 F.2d 751 [1972]. Upon an examination of the record in this case we find that it does not support a conclusion that the trial court’s practice was an abuse of that discretion or resulted in any harm. We would think it better practice to require a simultaneous or alternating exercise of peremptory challenges, but we cannot say that the practice here resulted in any substantial prejudice. Of course United States v. Sams reflects that there are situations in which the procedure is wrong and merits reversal. This is not one of those situations. Affirmed.

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Mrs. Linda NEWMON, Plaintiff-Appellant, v. DELTA AIR LINES, INC., Defendant-Appellee. No. 72-2966. United States Court of Appeals, Fifth Circuit. March 5, 1973. Howard Moore, Jr., Elizabeth R. Rindskopf, Atlanta, Ga., Jack Greenberg, New York City, for plaintiff-appellant. Dean Booth, Michael C. Murphy, Atlanta, Ga., Sidney F. Davis, Legal Div. Delta Air Lines, Inc., Atlanta, Ga., for defendant-appellee. Rita Page Reuss, Cleveland, Ohio, Vivian T. Kelsey, Berea, Ohio, for Women’s Law Fund, Inc., amicus curiae.. Before JOHN R. BROWN, Chief Judge, and WISDOM and AINSWORTH, Circuit Judges. PER CURIAM: This is an appeal from the denial of a preliminary injunction in which Mrs. Newmon alleges that Delta Air Lines’ maternity leave policy violates Title VII of the Civil Rights Act of 1964 [42 U.S. C.A. § 2000e], and that as a result of that policy she suffered a loss of employee benefits including the right to reinstatement in her job at the end of the prescribed period subsequent to the birth of her child. The record reflects that the trial court considered the importance of this question in light of the medical and industrial factors involved and concluded that the relief should await hearing on the merits. Upon applying the usual standard, we find no abuse of discretion. Johnson v. Radford, 5 Cir., 1971, 449 F.2d 115; Southern Petroleum Corp. v. Harper, 5 Cir., 1960, 73 F.2d 715. As this is a recurring problem of great importance, we feel that the case should be remanded forthwith for trial without delay under a high priority. Affirmed.

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Herbert J. TURNER, Plaintiff-Appellant, v. Walter E. CRAVEN, Warden, Defendant-Appellee. No. 72-2691. United States Court of Appeals, Ninth Circuit. March 12, 1973. Marvin W. Friedman, San Francisco, Cal., Lonnie R. Springer, Santa Barbara, Cal., for plaintiff-appellant. Evelle J. Younger, Atty. Gen., Edward A. Hinz, Jr., Chief Asst. Atty. Gen., Doris H. Maier, Asst. Atty. Gen., Mark L. Christiansen, Joseph M. Cavanagh, Deputy Attys. Gen., San Diego, Cal., for defendant-appellee. Before CHAMBERS, HAMLEY and MERRILL, Circuit Judges. PER CURIAM: Turner is a California state prisoner. He was convicted by a California state jury of felonious assault, robbery and burglary. The district court denied Turner’s petition for a writ of habeas corpus, and Turner appeals. The victim of Turner’s crime was an elderly woman. She testified at the preliminary hearing and was subject to cross-examination. By the time of trial, however, her doctor testified and the court found that her mental and physical state made her unavailable as a witness. The transcript of her testimony at the preliminary hearing was introduced to fill the gap of her absence. We have approved such a practice in properly limited circumstances. United States v. Harless, 464 F.2d 953 (9th Cir. 1972). Here, Turner challenges the unavailability of the witness. The finding of the state court on this issue is presumptively correct. 28 U.S.C. § 2254(d). We agree with the district court that for all practical purposes the witness was unavailable. See United States v. Allen, 409 F.2d 611 (10th Cir. 1969). The state court made a careful inquiry on this issue, and we find no reason to upset its determination. The order appealed from is affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Anthony Nicholas CARRION, Defendant-Appellant. No. 73-1171. United States Court of Appeals, Ninth Circuit. March 9, 1973. Victor Sherman, Beverly Hills, Cal., pro se. Jan Lawrence Handzlik, Asst. U. S. Atty., for William D. Keller, U. S. Atty. The Honorable William G. East, Senior United States District Judge for the District of Oregon, sitting by designation. ORDER ASSESSING PENALTY Before CHAMBERS and WRIGHT, Circuit Judges, and EAST, District Judge. PER CURIAM: For failure to prosecute the appeal with due diligence, Victor Sherman, counsel for appellant, is assessed a penalty of Two Hundred Dollars under Rule 46(e), Federal Rules of Appellate Procedure. The sum is to be paid into the registry of the Clerk of the United States District Court for the Central District of California within 14 days from the date of this order.

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James T. SHIOSAKI, Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Appellee. No. 71-1909. United States Court of Appeals, Ninth Circuit. March 14, 1973. James T. Shiosaki, in pro per. Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Stephen Schwartz, William M. Brown, Attys., Dept, of Justice, Washington, D.C., K. ' Martin Worthy, Chief Counsel, I.R.S., Washington, D.C., for appellee. Before CHAMBERS, HAMLEY and MERRILL, Circuit Judges. RICHARD H. CHAMBERS, Circuit J udge: Shiosaki is an electrical engineer in Southern California. He has had and still has an urge to shoot craps at the Sands Hotel and other places in Las Vegas, Nevada. He seems to have had the same employer of his engineering talents for a good many years. Obviously he knows more of electricity than he knows of craps. He had large winnings in 1959, so he started to make a study of craps so that he might be more proficient and win more. But his studies have produced no apparent good results. Since 1959 he has lost usually each year at the crap table. Doggedly he pursues this sideline, only eating up his savings, which are a fair portion of his earnings as an engineer. He has become no burden to his friends, family or banker. In 1967, he reported winnings from some 12 trips to Las Vegas in the amount of $1300. Then he deducted $1300 as losses at the crap table, although his losses were substantially higher, in fact, $6,700 higher. The law is clear that $1300 would be all he could deduct from losses at the table. 26 U.S.C. § 165(d). But Shiosaki spent $1230 on travel and hotel expense, which for 1967 he took as a deduction. The commissioner and the tax court have disallowed this, resulting in a tax deficiency of about $400. Shiosaki is obviously very serious and sincere. His testimony was uncontradicted. It reads as that of a gentleman. But the tax court has held that the $1230 could not be deducted as an ordinary and necessary expense paid for the production of income. It said it does not qualify under § 212(1) of the Internal Revenue Code of 1954. There is no aspect of illegal gambling whatsoever in this case. (Even in legal gambling the normal rule is that losses are not deductible to a greater extent than profits.) Were the amount of $1230 to be found under § 212(1), the government would still disallow it because it would call it a gambling loss against the winnings, in this case already used up by losses at the table. We need not reach the latter question because we affirm the holding that the expense was not a “business” expense. The tax court listened to Shiosaki testify at length. It obviously concluded that the true motive of the trips was not predominantly to make a profit, despite Shiosaki’s positive attestation that it was. We are in an area where we cannot revise the fact finder’s finding. Decision affirmed.

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Robert W. HANSON, Appellant, v. UNITED STATES of America, Appellee. No. 71-3024. United States Court of Appeals, Ninth Circuit. March 12, 1973. Lyle C. Cavin, Jr., of Sullivan, Johnson, Graham & Cavin, San Francisco, Cal., for appellant. James L. Browning, Jr., U. S. Atty., San Francisco, Cal., Lawrence F. Ledebur, Chief, Admiralty and Shipping Section, U. S. Dept, of Justice, Washington, D. C., Charles Craycroft, Norman B. Richards, of McCutchen, Doyle, Brown & Enersen, San Francisco, Cal., for appellee. Before CHAMBERS, HAMLEY, and BROWNING, Circuit Judges. PER CURIAM: Hanson sued the United States for injuries sustained when he fell through a temporarily uncovered deck opening on the S.S. St. Anyuskinu Victory, a vessel owned by the government. Hanson was a crewman at the time of the incident. This case presents issues of seaworthiness of the vessel, negligence of the crew, and Hanson’s contributory negligence. All these issues involve questions of fact which, in this case, could have been decided either way. The district court found for the government, however, and we are not to upset its findings unless we find that they are clearly erroneous. Gertz v. McCarty, 450 F.2d 1104 (9th Cir. 1971). The judge could reasonably infer that a “comealong” remained in place while a ship’s engineer made a brief trip to the machine shop to get some tools. The judge could also have found, as he did, that the crew was not negligent, and that Hanson was negligent in stepping backward into the opening of which he was aware. The judgment is affirmed.

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Martha J. COPLEY, Plaintiff-Appellant, v. Elliot RICHARDSON, Secretary, Health, Education and Welfare, Defendant-Appellee. No. 72-1704. United States Court of Appeals, Sixth Circuit. Argued Jan. 30, 1973. Decided March 20, 1973. Richard Carter Irvin, Columbus, Ohio, for plaintiff-appellant; Roy F. Martin, Donna Christy Baker, Legal Aid & Defender Society, Columbus, Ohio, on brief. Grayce Ruehlman, Asst. U. S. Atty., Cincinnati, Ohio, for defendant-appellee; William W. Milligan, U. S. Atty., W. Robinson Watters, Asst. U. S. Atty., Columbus, Ohio, on brief. Before EDWARDS, KENT and LIVELY, Circuit Judges. PER CURIAM. Plaintiff-appellant appeals from an order entered by a District Judge affirming the Secretary of Health, Education and Welfare’s denial of child benefits under § 202(d)(1)(B) of the Social Security Act, 42 U.S.C. § 402(d) (1)(B) (1970), which provides benefits for a child (of an insured person) who is under a disability which began before the child attained the age of 18. The Hearing Examiner, whose findings of fact were accepted by the appeals counsel and by the District Judge, summarized the disability record as follows: The record shows that this claimant has had at least eight periods of hospitalization. She was first hospitalized for a period of six months in 1941, and, thereafter, was hospitalized from January to June 1942; for a period of time in 1947; for some time in 1956; from May to August 1959; from December 1960 to April 1963; from August to December 1968; and from May to October 1969. The diagnosis submitted by the Columbus State Hospital in December 1969 was chronic brain syndrome, non psychotic organic brain syndrome with epilepsy. The hospital record shows that she was subject to depression and suicidal ideas, and that she was prone to outbursts of temper and hostility. The Hearing Examiner wishes to state, at this point, that this claimant has a significant problem, which had its onset prior to age 18. Subsequent thereto, however, the Hearing Examiner found that over a period of seven years appellant had demonstrated “an ability to perform substantial gainful activity” by working part-time at a restaurant and by working as a part-time maid at the home of her employer “for all of which she is paid at the rate of $1.25 an hour and earns approximately $30 a week.” These findings we hold to be unsupported by substantial evidence in this record. We note that appellant appeared alone before the Hearing Examiner, without benefit of legal counsel, and responded to questions which called for a description of the sorts of work she performed and the hourly rate she was paid therefor. The Hearing Examiner, however, made no inquiry as to her weekly, monthly, or yearly earnings, or the impact upon her earnings of the repeated periods of hospitalization, or the impact upon her employment of her seizures, depression, suicidal ideas and attempts, and outbursts of temper and hostility. The concepts of justice and equality upon which this nation is founded do not suggest that a quasi-judicial officer of this government should undertake to employ expert questioning to write a record exclusively favorable to the government’s side of the case when he is on notice that the claimant for social security benefits is totally alone, mentally ill, and unrepresented by legal counsel. Particularly is this true when, as here, the hearing officer is also on notice that there are facts strongly favorable to her claim which he has not seen fit fully to explore. The employment relied upon by the Hearing Examiner as evidence of claimant’s capacity for substantial gainful activity is clearly one where the employer would be required to file Social Security earning reports. Under these circumstances, we believe that Exhibit 9, which the Hearing Examiner had introduced in this record, takes on added significance. This Social Security “earnings certificate” shows that appellant earned a total of $1,943.58 between the years 1936 and 1969. In many of these years the report shows no earnings at all. It shows 1967 to have been claimant’s highest year of earnings, with $822. The next highest year was 16 years earlier, in the year 1951, when she earned $296.77. Section 6403 of the Claims Manual of the Social Security Administration deals with substantial gainful activity (SGA). Subsection 6403(c), entitled “earnings of less than $90 per month,” reads: Where average monthly earnings arc less than $90 a month, an assumption may be made that the work is not SGA in the absence of evidence to the contrary. This assumption may be made for both sheltered and nonsheltered employment. We believe that the administrative record in this case, taken as a whole, demonstrates a lack of substantial evidence to support the findings of fact of the Secretary and impels a reversal and remand for the award of disability benefits. Although not essential to that conclusion, the following questions and answers between the Hearing Examiner and the claimant help to illustrate the nature and extent of the underlying disability: Q: Well now, Miss Copley, assume that you were offered full time employment as a domestic instead of working part time, what would be your difficulty? A: Well, my main difficulty is my education in getting any regular work. Q: I’m talking about work as a domestic employee like your’re doing now, except on a full time basis. A: Well, people won’t hire me when they find out I’m an epileptic. You mention epileptic and they won’t hire you ’cause they are afraid of you, ’cause I have a grand-mal kind of epilepsy and I pass out and foam at the mouth and jerk, and I don’t remember. I sometimes come out fighting. Q: Do you still have these epileptic seizures ? A: Oh yes. Q: How often do you have them? A: Now, I’ve only had two in four years, but that's because the state hospital changed my medicine. Q: So it’s pretty well controlled ? A: It’s getting that way but the doctor thinks that I'm in the change of life, but they think that I might go mentally insane by the time I go through the change of life. Q: Is this what they told you? A: Uh huh, if I didn’t keep active, and since my family won’t have nothing to do with me, I raise birds. Q: Why won’t your family have anything to do with you? A: Well, they have been ashamed of me all my life. I’ve had one brother tried to choke me twice. Q: What kind of birds do you raise ? A: I’ve got a canary, paul parrot, finch, and a parakeet. Q: You like raising birds? A: Yes. Q: Do you train them? A: No, I just feed them and just love to hear them holler, because I don’t have anyone to talk to, and in the summer I’d take out walks in the woods, just to see the animals because people won’t have nothing to do with me. The judgment of the District Court is reversed. The case is remanded to the District Court for the entry of an order awarding disability benefits claimed in this proceeding.