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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellee, v. Daniel Dee VEON, Appellant. No. 72-1889. United States Court of Appeals, Ninth Circuit. Feb. 12, 1973. Claude 0. Allen, Oakland, Cal., for appellant. James L. Browning, Jr., U. S. Atty., F. Steele Langford and Jerry K. Cimmet, Asst. U. S. Attys., San Francisco, Cal., for appellee. Before TRASK, GOODWIN and WALLACE, Circuit Judges. PER CURIAM: Daniel Dee Veon appeals from convictions of violations of 21 U.S.C. § 841 (a) (1) (possession of marijuana with intent to distribute); two counts of 21 U.S.C. § 843(b) (use of telephone to commit or to facilitate commission of felonies under Title 21); 21 U.S.C. § 846 (conspiracy to distribute and to possess with intent to distribute marijuana). Defendant contends the district court erred: (1) in restricting the reeross-examination of a government witness; (2) in receiving into evidence a tape recording and a written transcript of the tape; and (3) in submitting the case to the jury, upon evidence which he asserts was insufficient to support the verdict. Customs agents observed a load of 400 kilograms of marijuana being brought in from Mexico. The agents arrested the smugglers and had them make a “controlled delivery” to Donald Lynch, their employer. Lynch was arrested and agreed to cooperate with police. With police listening and taping the call, Lynch phoned Veon and told him that the “stuff” was in for “Gary.” Veon said, “Yeah, okay, uh?” Lynch replied, “Same old thing.” Veon signified assent. This call is the basis for the second count of the indictment. At trial, Lynch testified that the call was made pursuant to a pattern he had prearranged with Veon. When Lynch’s employees would arrive with a shipment, Lynch would telephone Veon and Veon would send Geary Willingham, an employee of Veon, to pick up the contraband and pay Lynch at a pre-arranged location. Lynch testified that he disposed of all his marijuana through Veon. Lynch, carrying a tape recorder, met Willingham, and in a brief conversation the name “Danny” was mentioned twice. This tape recording became the disputed exhibit. Willingham picked up the marijuana and was arrested. He testified that he was employed by Veon and acted at his request. The same night that Lynch was. arrested, he received another call from Veon in which Veon stated that he could get only $9,000 that night, and that he would deliver it later. This call is the basis for count three of the indictment. Still later, Lynch received a call from Veon in which Veon told Lynch that “Gary” had been “busted” and that he (Veon) was going to a motel. The alleged restriction on cross-examination occurred when defense counsel attempted to re-examine a prosecution witness for the fifth time. The curtailment of repetitious examination on a marginally relevant point was a legitimate exercise of the court’s discretion. United States v. Haili, 443 F.2d 1295, 1299 (9th Cir. 1971). The objection to the use of the tape recording is equally without merit. The defense had obtained a discovery order to furnish copies of any statements obtained through “electronic surveillance.” The government furnished a copy of the tape of the Veon-Lynch conversation, and said that it had another tape in which Yeon’s voice was not heard, but which would be furnished upon request. No request was made. The tape was nonetheless made available to the defense before Willingham testified and before the defense had relinquished its right to recall Lynch for further cross-examination. The Jenks Act, 18 U.S.C. § 3500, gives the defense the right to have copies of statements of witnesses to government agents only after they have testified. In this ease, the defense had possession of the tape before cross-examination was concluded. But even if the defense was entitled under the discovery order to have the tape before trial, a point we need not decide, the defense was not prejudiced by the late receipt. Veon knew that both Lynch and Willingham had agreed to testify for the prosecution. The tape added little to the testimony; all mentions of “Danny” in the tape came from Lynch, so the tape did not detract from Veon’s argument that Lynch was implicating him (Veon) in an attempt to reduce his own guilt. There was no error in receiving the tape. The government argues that the suffieiency-of-the-evidence point is not available on appeal because no objection was made on this basis at the close of the trial. Enriquez v. United States, 338 F.2d 165 (9th Cir.), cert. denied, Cura v. United States, 380 U.S. 957, 85 S.Ct. 1095, 13 L.Ed.2d 973 (1964); Lucas v. United States, 325 F.2d 867 (9th Cir. 1963). We agree with the government. But in any event we are satisfied that there was abundant evidence to support the verdict. We notice the point only because it became necessary to examine the record in order to deal with the other points urged. Affirmed.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

John OTERO and Grace Otero, his wife, Appellants, v. INTERNATIONAL UNION OF ELECTRICAL, RADIO AND MACHINE WORKERS (IUE) an association, Ap-pellee. No. 71-1716. United States Court of Appeals, Ninth Circuit. Feb. 9, 1973. W. Roy Tribble (argued), Chandler, Ariz., for appellants. Melvin Warshaw, Asst. Gen. Counsel ' (argued), Ruth Weyand, Richard Seupi, International Union of Electrical, Radio, & Machine Workers, Washington, D.C., Herbert B. Finn, of Finn & Van Baalen, Phoenix, Ariz., for appellee. Before BARNES, KILKENNY and GOODWIN, Circuit Judges. PER CURIAM: The district court had jurisdiction of this action, though not by reason of diversity, which does not here exist. 28 U.S.C. § 1332; United Steel Workers of America v. Bouligny, Inc., 382 U.S. 145, 150-151, 86 S.Ct. 272 (1965). Jurisdiction depends on the existence herein of a collective bargaining contract between an employer (itself a union) and a “labor organization” representing the employer’s employees. (See. 301, Labor Management Relations Act of 1947, 29 U.S. C., Sec. 185). The undisputed facts presented by affidavits on the motion heard indicate a settlement was arrived at after proceedings were instituted by the union representing the employee (herein Council of Industrial Organizers, or “Council”) on Otero’s behalf. These proceedings were but partially completed; and had proceeded to, but not through, available arbitration proceedings (Motion for Summary Judgment, Exhibit A, Contract; Article VII, Sec. 2). At that point, a complete and final settlement was agreed upon between the Union employer (IUE) and the employee’s designated representative (Council), which involved a change of position on each side and the delivery of two substantial sums of money to Otero. While Otero refused to sign certain releases, he cashed the checks amounting to $5,380.64. No failure on the part of the Council of Industrial Organizers to act, and no unfairness on its part in acting for the plaintiff, was charged by Otero, either at the time of settlement, or in his complaint, or on the hearing of the motion for summary judgment. “The parties herein agreed upon a method for final adjustment of all grievances. They further agreed that this would be final and binding upon the parties involved . . . (between the two unions). . . . This clearly was a matter subject to the contractual requirement. ... A party is entitled to no more than he bargained for and received under the contract. Chambers v. Beaunit Corporation, 404 F.2d 128 (6th Cir. 1968).” Alonso v. Kaiser Aluminum & Chemical Corporation, D.C., 345 F.Supp. 1356, 1360 (1971), affirmed per curiam (4th Cir. 1972), 69 L.C. ¶ 13001. The grievance and arbitration procedure contained in the Council — IUE’s collective agreement is plaintiff’s sole and exclusive remedy. Republic Steel v. Maddox, 379 U.S. 650, 652-659, 85 S.Ct. 614, 13 L.Ed.2d 580 (1964). We agree with the district court that no claim is stated. See: Baca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967); Woody v. Sterling Aluminum Products, Inc., 365 F.2d 448 (8th Cir. 1966), cert. denied 386 U.S. 957, 87 S.Ct. 1026, 18 L.Ed.2d 105 (1967); Dessert Coca Cola v. General Sales Drivers, 335 F.2d 198 (9th Cir. 1964); C.C.H. (L.L.R.) 3255.55 (p. 8240); Andrews v. Louisville & Nashville R. Co., 406 U.S. 320, 92 S.Ct. 1562, 32 L.Ed.2d 95 (1972). The summary judgment granted appel-lee is affirmed. . This was also an action by an employee against an employer alleging wilful and malicious charges of stealing property, re-suiting in the discharge of the employee. It was also based on the granting of a motion for summary judgment.

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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. Richard Donald GILLIS, Defendant-Appellant. No. 72-1687. United States Court of Appeals, Ninth Circuit. Feb. 14, 1973. Taylor J. Daigneault (argued), of Daigneault, Abel & Daigneault, Torrance, Cal., for defendant-appellant. John M. Newman, Asst. U. S. Atty. (argued), Eric A. Nobles, Asst. U. S. Atty., William D. Keller, U. S. Atty., Los Angeles, Cal., for plaintiff-appellee. Before MERRILL, KOELSCH, and KILKENNY, Circuit Judges. PER CURIAM: Appellant Gillis was convicted by a jury on both counts of a two-count indictment charging possession of an unregistered machine gun [26 U.S.C. § 5861 (d) ], and the sale of said gun without paying the transfer tax required by 26 U.S.C. § 5811 [26 U.S.C. § 5861(e)]. On this appeal he urges three points: (1) that the sale was to a government agent and therefore exempted from the transfer tax; (2) that the jury was improperly instructed on possession; and (3) that the prosecutor’s comments in closing argument constituted prejudicial misconduct. None has merit. 26 U.S.C. § 5811 levies a $200 per weapon tax on the transfer of firearms, the tax to be paid by the transferor. Appellant sold a Beretta 9mm machine gun to an undercover agent of the Alcohol, Tobacco, and Firearms Division of the Treasury Department, but paid no tax. He contends that the sale to such an agent is exempted from the transfer tax requirements of § 5811 by the provisions of 26 U.S.C. § 5852(a), which provides: “Any firearm may be transferred to the United States or any department, independent establishment, or agency thereof, without payment of the transfer tax imposed by section 5811.” However, the exemption statute itself provides that a transfer is not tax-exempt “. . . unless the transfer ... is performed pursuant to an application in such form and manner as the Secretary or his delegate may by regulations prescribe.” 26 U.S.C. § 5852(f). The Secretary has issued specific regulations controlling the manner in which a tax-exempt transfer to the government may be effectuated. 26 C.F.R. § 179.89 provides that, while a transfer to the government may be made without payment of the tax, “ . . the procedures for the transfer of a firearm as provided in § 179.90 shall be followed in a tax-exempt transfer. . . . ” 26 C.F.R. § 179.90(c) expressly provides that, “The transferor shall be responsible for establishing the exempt status of the transferee before making a transfer under the provisions of this section. Therefore, before engaging in transfer negotiations with the transferee, the transferor should satisfy himself of the claimed exempt status of the transferee and the bona fides of the transaction. . . . An unapproved transfer or a transfer to an unauthorized person may subject the transferor to civil and criminal penalties. (See sections 5852, 5861, and 5871, I.R.C.).” Cf. United States v. Freed, 401 U.S. 601, 605, 91 S.Ct. 1112, 28 L.Ed.2d 356 (1971). Thus, even if appellant might have invoked the exemption provisions of § 5852(a) he failed to fulfill the necessary conditions precedent to their application. In its instructions, the court not only defined possession, but also explained what constituted termination of possession in line with appellant’s defense that he had abandoned the gun and was later entrapped by the government agent into retaking possession. These instructions were correct and germane to the issues. Finally, with respect to the matter of the prosecutor’s comments, the record shows that defense counsel vigorously appealed to the jury to acquit because the particular acts were trivial and innocuous. The District Attorney, in rebuttal, pointed out several potentially unlawful uses to which an illicitly purchased weapon of this type might be put. We have examined the transcript of the arguments, and we agree with the trial court that the comments were invited and not improper. See Tenorio v. United States, 390 F.2d 96 (9th Cir. 1968), cert. denied, 393 U.S. 874, 89 S.Ct. 169, 21 L.Ed.2d 145; Chatman v. United States, 411 F.2d 1139 (9th Cir. 1969). The judgment is affirmed.

f2d_474/html/0006-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Gordon Fred JOHNSON, Defendant-Appellant. No. 72-2601. United States Court of Appeals, Ninth Circuit. Feb. 20, 1973. Keith C. Monroe, Santa Ana, Cal., for defendant-appellant. William D. Keller, U. S. Atty., Barry Russell, Eric A. Nobles, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-appellee. Before ELY and GOODWIN, Circuit Judges, and SCHWARTZ, District Judge. Honorable Edward J. Schwartz, Chief Judge, United States District Court for the Southern District of California, sitting by designation. PER CURIAM: Johnson was convicted of aiding and abetting the distribution of LSD, a Schedule I controlled substance, in violation of 21 U.S.C. § 841(a)(1) and 18 U.S. C. § 2. In urging reversal, he claims that the trial court erred in determining that the defendant’s extra-judicial statements were made freely and voluntarily, and in admitting the statements in evidence at the trial. He alleges, further, that the court failed to find that defendant had waived his Miranda rights, and, absent such a finding, deprived him of a fair trial by admitting the statements in evidence. We conclude that the trial court’s determinations were supported by the evidence. A hearing on the issue of voluntariness was held out of the jury’s presence as required by Jackson v. Denno, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed. 2d 908 (1964). Upon hearing the conflicting testimony concerning the events surrounding the statements of March 7 and March 9, the court stated that it believed the testimony of the agents that the defendant had been advised of his rights on both occasions, and that it disbelieved the defendant’s testimony. The court found that the defendant’s decision to make the statements “constituted a reasoned choice,” and that he made the statements freely and voluntarily. It is also apparent from the trial court’s statement that defendant’s decision “constituted a reasoned choice” that the court found defendant to have waived his Miranda rights. A Miranda waiver may be implied where warranted from the facts and circumstances of the particular case. United States v. Hilliker, 436 F.2d 101 (9th Cir., 1970). Though the court must find that a defendant waived his rights knowingly before it admits his statements in evidence, it is not required to express such finding in the exact same words in every case. After first denying any knowledge of drug activities, the defendant told one of the government agents that he wished to make a statement and wanted to cooperate with the government. He thereupon made two statements to the agents and offered to lead them to an LSD manufacturing operation on the island of Maui, Hawaii. The trial court properly inferred a waiver under the circumstances of this case. Affirmed.

f2d_474/html/0008-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

YORK-SHIPLEY, INC., Plaintiff-Appellee, v. ATLANTIC MUTUAL INSURANCE COMPANY et al., Defendants-Appellants. No. 72-2361. United States Court of Appeals, Fifth Circuit. Feb. 23, 1973. Roland R. Parent, Miami, Fla., Joseph J. Magrath, New York City, for defendants-appellants. Adams, George & Wood, Miami, Fla., for Atlantic Mut. Ins. Co. Thomas J. Schulte, Suarez, Carricarte & Freire, Miami, Fla., for Int’l Fwdrs. Before BELL and THORNBERRY, Circuit Judges, and GROOMS, District Judge. PER CURIAM: In this cargo insurance case, the district court found that at the time of the damage, the plaintiff-appellee, YorkShipley, Inc., was the owner of the boiler in question. This was clearly erroneous since the cargo was shipped C.I.F. port of destination. Title to the boiler passed to the consignee when it was shipped from Miami in accordance with the terms of the contract. York-Shipley had no property rights in the boiler at the time it was damaged, and therefore had no insurable interest. Because York-Shipley, Inc. lacks standing to bring this suit, we need not reach the other errors assigned. We reverse. York-Shipley held an ocean marine open cargo policy issued to it by the appellant, Atlantic Mutual Insurance Co., covering all of York-Shipley’s international shipments of “lawful goods and merchandise consisting principally of heating equipment and parts.” The policy contained a provision reading in pertinent part, as follows: “Authority is hereby given to the assured to issue this company’s special policies of insurance which will be supplied on request. Such special policies are to be issued only in accordance with the terms and conditions of the policy, and are not transferable unless countersigned by the assured.” Such special policies are used when an assured sells on terms (e. g., C.I.F.) which require it to obtain insurance for the benefit of its customers abroad. The special policy takes the place of the open policy with respect to the particular shipment for which it is issued and contains, in full or by reference, all of the provisions necessary to single shipment insurance. In the instant case, such a special policy was issued covering two boilers while in transit from Miami to Guatemala, and the policy was forwarded, along with the bill of lading and freight receipt, to York-Shipley’s consignee in South America. In effect, then, as regards the insurance, York-Shipley was merely the agent of its foreign customer for obtaining insurance on the goods sold. Article 2, § 320 of the Uniform Commercial Code defines the term “C.I.F.” to mean “that the price includes in a lump sum the cost of goods and the insurance and freight to the named destination. . . . ” Section 320 also spells out the duties of the seller under a C.I.F. destination contract: (1) he must put the goods into the possession of a carrier at the port of shipment and obtain a bill of lading, (2) load the goods and obtain a receipt from the carrier showing that the freight has been paid, (3) obtain a policy of insurance covering the goods while in transit,’ (4) prepare an invoice of the goods and procure any other documents required to offset shipment or comply with the contract, and (5) forward and tender with commercial promptness all the documents in due form and with any indorsement necessary to perfect the buyer’s rights. Section 320 concludes that “[u]nder the term C.I.F. . . . unless otherwise agreed the buyer must make payment against tender of the required documents and the seller may not tender nor the buyer demand, delivery of the goods in substitution for the documents.” (Emphasis supplied). Under the UCC, as well as at common law, title to goods shipped C.I.F. passes upon their delivery to the carrier. UCC Art. 2, § 401; see id. art. 2, § 509; Smith Co. v. Marano, 1920, 267 Pa. 107, 110 A. 94. See generally Bender’s U.C.C. Service, Dursenberg & King, Sales and Bulk Transfers § 8.02[2] [b] at 8-17 (1968). Accordingly, once York-Shipley put the boilers in the possession of the carrier in Miami, it no longer had any interest in them. Indeed, it was prohibited from tendering the goods instead of the appropriate documents. YorkShipley therefore has' no insurable interest in the cargo and, consequently, has no standing to sue. Standing depends upon whether the party has such a “personal stake in the outcome of the controversy as to assure . . . concrete adverseness. . . .” Baker v. Carr, 1962, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663; See Sierra Club v. Morton, 1971, 405 U.S. 727, 732, 92 S.Ct. 1361, 31 L.Ed.2d 636; Flast v. Cohen, 1968, 392 U.S. 83, 101, 88 S.Ct. 1942, 20 L.Ed.2d 947. York-Shipley has no interest in the outcome of this suit, other than that of an unsecured creditor of its foreign customer. Such an interest is insufficient to meet the requisites of standing. Reversed.

f2d_474/html/0009-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. Im HATTON, Individually and doing business as Air Control Engineering Company, Defendant-Appellee. No. 72-2703. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Richard F. Schubert, Sol. of Labor, U. S. Dept, of Labor, Washington, D. C. , M. J. Parmenter, Regional Sol., William E. Everheart, Carin Ann Clauss, Donald S. Shire, Attys., U. S. Dept, of Labor, Dallas, Tex., Jacob I. Karro, Atty., U. S. Dept, of Labor, Washington, D. C., for plaintiff-appellant. L. H. Warburton, Jr., Alice, Tex., for defendant-appellee. Before ALDRICH SIMPSON and CLARK, Circuit Judges. Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation. PER CURIAM: The Secretary of Labor sought to enjoin defendant-appellee, individually and as a commercial employer, from violating the minimum wage and overtime provisions of the Fair Labor Standards Act, Title 29 U.S.C. Section 201 et seq. The district court held the defendant was not within coverage of the Act and denied the requested relief. We reverse. Defendant-appellee Hatton is a sole proprietorship located in Alice, Texas. The business has three employees. It installs, repairs and maintains air conditioning and heating systems, including duct work, in residential properties. Approximately ninety per cent (90%) of Hatton’s purchases were manufactured in Texas. The Secretary claims Hatton is an “enterprise engaged in commerce” as required by Sec. 3(s) of the Act, Title 29 U.S.C. Section 203 (s), and therefore subject to the minimum wage and overtime standards of Sections 6 and 7 of the Act, Title 29 U.S.C. Sections 206 and 207. The theory of “enterprise coverage” by which the Secretary hopes to apply the Act to defendant-appellee was introduced into the law by amendment in 1961. We stated the purpose of “enterprise coverage” in Montalvo v. Tower Life Building, 5 Cir. 1970, 426 F.2d 1135, 1139. Limiting coverage of the Act to enterprises which are in more than one business would frustrate that purpose of eliminating fragmentation of the Act’s application. Accordingly, defendant-appellee is not exempt from the Act’s requirements solely because it is engaged in only one business. See Schultz v. W. R. Hartin & Son, Inc., 4 Cir. 1970, 428 F.2d 186; Wirtz v. Melos Construction Corp., 2 Cir. 1969, 408 F.2d 626; the textual references to a single establishment in Sections 3(r) and (s) of the Act, Title 29 U.S.C. Section 203(r) and (s); H.Rept.No.75, Fair Labor Standards Amendments of 1961, 87th Cong., 1st Sess., p. 7; S.Rept.No.145, Fair Labor Standards Act of 1961, 87th Cong., 1st Sess., p. 41, U.S.Code Cong. & Admin. News 1961, p. 1620; and S.Rept.No.1487, Fair Labor Standards Amendments of 1966, 89th Cong., 2d Sess., p. 7, U.S. Code Cong. & Admin.News 1966, p. 3002. The 1961 and subsequent amendments further expanded coverage of the Act by introducing a sweeping definition of “enterprise engaged in commerce or in the production of goods for commerce”: “(s) ‘Enterprise engaged in commerce or in the production of goods for commerce’ means an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person, and which— (1) during the period February 1, 1967, through January 31, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level which are separately stated) or is a gasoline service establishment whose annual gross volume of sales is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated), and beginning February 1, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated); (2) is engaged in laundering, cleaning, or repairing clothing or fabrics; (3) is engaged in the business of construction or reconstruction, or both; or (4) is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises of such institution, a school for mentally or physically handicapped or gifted children, a preschool [an] elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit). Any establishment which has as its only regular employees the owner thereof or the parent, spouse, child, or other member of the immediate family of such owner shall not be considered to be an enterprise engaged in commerce or in the production of goods for commerce or a part of such an enterprise, and the sales of such establishment shall not be included for the purpose of determining the annual gross volume of sales of any enterprise for the purpose of this subsection.” Title 29 U.S.C. Section 203 (s). Defendant appellee is within that definition because it met the two requirements necessary for inclusion: (1) the court below found as a fact that most of the parts used by the employees in their work “were manufactured outside of and had moved in commerce getting to Texas” and this, we hold, is the same thing as saying the defendantappellee’s employees were “handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person”; and (2) the business of installing, repairing and maintaining air conditioning and heating systems, including duct work, in residential properties is an enterprise “engaged in the business of construction or reconstruction or both”. Holding that no other requirement exists, we find defendant-appellee is covered by the Fair Labor Standards Act. Reversed and remanded.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Martha A. WILLGING, Individually and as executrix of the estate of John Z. Willging, Appellee, v. UNITED STATES of America, Appellant. No. 26618. United States Court of Appeals, Ninth Circuit. Feb. 5, 1973. Paul M. Ginsberg, Atty. (argued), Meyer Rothwacks, Elmer J. Kelsey, Attys., Johnnie Walters, Asst. Atty. Gen., Dept, of Justice, Washington, D. C., Dean C. Smith, U. S. Atty., Spokane, Wash., for appellant. Gary C. Randall (argued), Scott B. Lukins, of Lukins, Seelye & Randall, P. S., Spokane, Wash., for appellee. Before ELY and GOODWIN, Circuit Judges, and FERGUSON, District Judge. The Honorable Warren J. Ferguson, United States District Judge for the Central District of California, sitting by designation. ALFRED T. GOODWIN, Circuit Judge: The government appeals a district court judgment, 313 F.Supp. 297, granting the taxpayer a refund of part of the income taxes she paid in 1966. Mrs. Willging and her husband were wheat farmers, owning community property, and reporting their income on the accrual basis. To determine their income for each year, they would add to the sales price of products sold during the year the value of their closing inventory and would subtract from this figure the value of their opening inventory. Treas.Reg. § 1-61-4. Inventories were valued under the “farm price” method (market price less direct costs of disposition), Treas.Reg. § 1.471-6; expenses were deducted in the year in which they were incurred. Treas.Reg. § 1.162-12. The value of the Willging’s opening grain inventory for 1966 was $1,195. On November 15, 1966, Mr. Willging died. At that time the value of the grain inventory was $37,953.98. The grain had the same value at the end of the year. Mrs. Willging contends that the entire increase in the value of the 1966 crop inventories between the first of the year and November 15 escapes taxation because Int.Rev.Code of 1954, § 1014, stepped up the basis of the grain to its market value on the death of her husband. In the alternative, she argues that the half of the crop which vested in her on November 15 by virtue of the community-property laws escapes taxation. The basic thrust of Mrs. Willging’s first argument is that accrual-basis farmers should be treated the same as cash-basis farmers. A cash-basis farmer who dies owning an appreciated inventory is not taxable on the unrealized appreciation. Nor does his spouse take over a potential tax liability, for she receives upon his death a stepped-up basis under § 1014(b)(1). Rev.Rul. 58-436, 1958-2 Cum.Bull. 366. If the property is owned by the community (in a community-property state) there is still no realization upon the death of one spouse. The surviving spouse is entitled to a stepped-up basis under § 1014(b)(6) if at least one half of the whole of the community interest in such property was includable in determining the value of the decedent’s gross estate. However, because Mr. Willging elected to be taxed under the accrual method of accounting, the value of the grain was “realized” when it increased his inventory value. No sale was necessary for realization. Mr. Willging’s death did not have the effect of accruing items which would not otherwise have been accrued, § 451(b), but it did serve as an occasion (the closing of his tax year) foru taxing the income he had received during his last taxable year. Section 1014 does not affect the imposition of this fax. The distinction between the taxation of cash and accrual-basis farmers on death is not fortuitous, but follows directly from the method of accounting used by the respective taxpayers. We see no reason to force the Commissioner to permit all accrual-basis farmers effectively to switch to the cash basis in the year of death. Cf. United States v. Catto, 384 U.S. 102, 113-117, 86 S.Ct. 1311, 16 L.Ed.2d 398 (1966). Only half of the accrued increase in value of the inventories was taxed on the death of Mr. Willging because the other half vested in Mrs. Willging by' virtue of the community property laws. Mrs. Willging contends that, even if her husband was properly taxable on his half on the inventory, she is not taxable on her half because the stepped-up basis provided by § 1014(b)(6) for community property is substituted for the beginning-of-the-year inventory value which she would normally use. Mrs. Willging points out that § 1014 applies “except as otherwise provided in this section,” § 1014(a), and that the Commissioner makes no contention that the crops represent “income in respect of a decedent,” which is excepted from the application of § 1014, §§ 691, 1014(c). She contends that § 1014(b)(6) entitles her to the benefit of a stepped-up basis without the disadvantage of current taxation on the increase in value, although for a noncommunity spouse of an accrual taxpayer this would be impossible. (For § 1014 to apply to a noncommunity spouse, the property is required to have been held by the decedent, and the decedent would have been taxable on the accrued increase.) Mrs. Willging claims more for § 1014 than Congress intended. We do not rely ' on the failure of the regulations under which the taxpayer computed her income to refer to the “basis” of the crops involved. “Basis” is a general tax accounting term whose use cannot be so tightly circumscribed. See 85 Harv.L. Rev. 880, 884 (1972). Moreover, the Code recognizes that “basis” is a concept relevant to the computation of inventories, § 1013, and the Commissioner allows cash-basis farmers the step-up denied here although the regulations under which they compute their income make no use of the term “basis.” Treas.Reg. § 1.61-4(a). The real issue in this case is one of realization. Section 1014 operates to exempt unrealized property income from tax on the death of the owner of the property; it does not reach back to income realized before death. Income is realized under an accrual method of accounting “when all the events have occurred which fix the right to receive such income and the amount thereof can be determined with reasonable accuracy.” Treas.Reg. § 1.451-1 (a). Because of the nature of the market for farm produce, the Commissioner allows farmers to use the increase in inventories as a realizing event. This was the method of accounting chosen by the taxpayer. It follows that § 1014 does not help Mrs. Willging, for, although it may increase her basis, it does so after the income from her crops has been realized. The time of the mechanical computation of income, at the end of the year, is irrelevant. To hold otherwise would be to make the sale of crops the determining event although the taxpayer had adopted a system of accounting which did not distinguish between sale and increase in inventory value. This would constitute a change of accounting method without the consent of the Secretary, proscribed by § 446(e). We are reinforced in our conclusion by a consideration of the purpose of § 1014(b)(6). Given our holding that tax was due on the income accrued by Mr. Willging in the year of his death, the benefit for which Mrs. Willging contends would be peculiar to community-property taxpayers. Section 1014(b)(6) was designed to equalize the incidence of taxation between community-property and common-law states, not to provide a special benefit to community-property taxpayers. Stanley v. C. I. R., 338 F.2d 434 (9th Cir. 1964); Bath v. United States, 211 F.Supp. 368, 370 (S.D.Tex. 1962), aff’d per curiam, 323 F.2d 980 (5th Cir. 1963). Reversed.

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In the Matter of GREEN MILL INN, INC., a California corporation, Bankrupt 117739. Kal W. LINES, Trustee in Bankruptcy, Appellant, v. The NATIONAL CASH REGISTER COMPANY, Appellee. No. 26658. United States Court of Appeals, Ninth Circuit. Feb. 2, 1973. Raymond L. Mushrush (argued), of Jacobs & Mushrush, James M. Conners, Trustee, San Francisco, Cal., for appellant. Merrill J. Schwartz (argued), George F. Dunker, of Stark, Stewart, Simon & Sparrowe, Oakland, Cal., for appellee. Before TRASK, CHOY, and GOODWIN, Circuit Judges. PER CURIAM: The district court overruled its bankruptcy referee, and allowed The National Cash Register Company to repossess property sold to a bankrupt under a title-retaining contract. The trustee in bankruptcy appeals. We affirm. The thrust of the appeal is that National Cash Register’s financing statement as filed did not comply with California’s version of the Uniform Commercial Code. Cal. Commercial Code § 9402(1) requires such a financing statement to show, inter alia, the name and mailing address of the debtor and to bear the signature of the debtor. Section 9402(5) saves a filing that is in “substantial compliance” with § 9402(1). The financing statement here in question gave the name of the debtor on line one as “Taylor, Máxime.” The form carried the signature of the debtor on line nine as “Green Mill’Inn, Inc., by Máxime Taylor, President.” In fact, Green Mill Inn, Inc., was the entity purchasing the property. Because the office of the Secretary of State of California was able, through cross-indexing, to locate the filing in both the corporate and individual names, actual notice was thus available to anyone interested in the filing. The district court held that the defective, or ambiguous, filing, aided by the probability of actual notice, substantially complied with the statutory requirements, and thus preserved the security interest of the seller against rival creditors. The district judge who decided this case also decided In re Thomas, 310 F.Supp. 338 (N.D.Cal.1970), aff’d 466 F.2d 51 (9th Cir. 1972). There, an individual (Thomas), doing business under a fictitious name (West Coast Avionics), bought goods under a conditional-sale contract for which the seller filed the security statement listing the debtor’s name as West Coast Avionics. The district judge noted that the Secretary of State did not cross-index unincorporated names in the situation there presented. Since there was no means by which creditors of Thomas could learn from the Secretary’s records that Thomas was buying property on credit under the name of West Coast Avionics, a financing statement showing West Coast Avionics as debtor did not substantially comply with Cal. Commercial Code § 9402(1). We believe that the difference between the two cases perceived by the district judge is a valid one. No creditor was misled or prejudiced by the ambiguity in the document filed by National Cash Register. Anyone seeking to determine if the bankrupt had any outstanding security interests on its property would have been given notice of National Cash Register’s claim. There was therefore no error in treating the ambiguous document as one filed in substantial compliance with Cal. Commercial Code § 9402(1). Affirmed.

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Jerry WHITE, Petitioner-Appellant, v. L. B. SULLIVAN, Commissioner of Alabama Prison System, et al., Respondents-Appellees. No. 73-1385. United States Court of Appeals, Fifth Circuit. Feb. 22, 1973. Jerry White, pro se. Arthur K. Bolton, Atty. Gen., Atlanta, Ga., for respondents-appellees. Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges. PER CURIAM: Jerry White, an Alabama State prisoner incarcerated in the Mt. Meigs Medical and Diagnostic Center, has applied to this Court for leave to appeal in forma pauperis from the district court’s summary dismissal of a Civil Rights complaint filed by him. We grant the motion and summarily affirm in part and summarily vacate and remand in part. In the action filed below, White sought damages and relief in the nature of injunction on behalf of himself and twenty-six prisoners in solitary confinement arising out of the prison officials’ refusal to allow the solitarily confined prisoners to communicate with the courts and their attorneys. Although White failed to allege that he was in solitary confinement and was then being denied access to the courts, he stated that “he is a part of an institutional population which must live from day to day under constant threats of [such] misconduct.” He further argued that “[i]t seems therefore that Plaintiff is injured, is a member of a class which is injured and is thus competent to maintain a class action for himself and others similarly situated.” The district court peremptorily dismissed the complaint on grounds that White could not properly maintain an action complaining of the conditions of solitary confinement on behalf of those so confined, if he himself was not presently subjected to those conditions. We agree with the court below insofar as it concluded that White was not a member of the class of twenty-six prisoners for which damages and injunctive relief was sought; and that ruling is affirmed. We do not, however, agree with the court’s conclusion that White did not present a justiciable controversy on behalf of himself and the other prisoners of Mt. Meigs who face the daily threat of suffering from the denial of access to court while in solitary confinement. A similar situation was presented to this Court in Massimo v. Henderson, 5th Cir. 1972, 468 F.2d 1209. In that case the appellant, who was incarcerated in the United States Penitentiary at Atlanta, filed a petition for mandamus and for in-junctive relief seeking the release of two fellow inmates from solitary confinement, and enjoining the further use of the solitary cells due to the allegedly subhuman conditions therein. Although the appellant himself was no longer confined in solitary, this Court held that the district court was clearly erroneous in dismissing the appellant’s action for injunctive relief on grounds that he was not involved in the action. The district court’s dismissal of that part of the action seeking the release of the two other inmates was affirmed since the appellant was not an attorney and not qualified to file on their behalf. On the basis of Massimo, swpra, we hold that Petitioner White has the requisite standing to maintain this action on his own behalf and on behalf of those not presently confined in solitary, but who face threatened imposition of alleged unconstitutional conditions of imprisonment when placed in solitary confinement. Therefore, the district court’s dismissal of the class action on behalf of the twenty-six prisoners in solitary confinement is affirmed; and the dismissal of the class action on behalf of the general prison population threatened with being placed in solitary is vacated and remanded for consideration on the merits of the allegations. Affirmed in part; vacated and remanded in part. . 28 U.S.C. § 1915. . 42 U.S.C. § 1981 et seq.; 28 U.S.C. §§ 2201 and 2202. . It is appropriate to dispose of this case summarily. See Groendyke Transportation, Inc. v. Davis, 5th Cir. 1969, 406 F.2d 1158. . See Andrade v. Hauck, 5th Cir. 1971, 452 F.2d 1071.

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Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. SIX FLAGS OVER GEORGIA, LTD., and Great Southwest Atlanta Corp., Defendants-Appellants. No. 72-2990. United States Court of Appeals, Fifth Circuit. Argued Feb. 7, 1973. Decided Feb. 22, 1973. Rehearing and Rehearing En Banc Denied April 10, 1973. Arthur J. Riggs, Dallas, Tex., Charles Kelso, Atlanta, Ga., for defendants-appellants. Richard F. Schubert, Sol. of Labor, Jacob I. Karro, Atty., U. S. Dept, of Labor, Washington, D. C., Beverley R. Worrell, Regional Sol., James H. Wood-son, Atty., Atlanta, Ga., Carin Ann Clauss, Donald S. Shire, U. S. Dept, of Labor, Office of Sol., Washington, D. C., for plaintiff-appellee. Before ALDRICH SIMPSON and CLARK, Circuit Judges. Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation. PER CURIAM: The Secretary of Labor brought this action against Six Flags over Georgia, Ltd., and Great Southwest Atlanta Corp., hereinafter, collectively, GSA, to enjoin alleged violations of the Fair Labor Standards Act and to compel the payment of overtime to certain employees. On a stipulated record both parties moved for summary judgment. The court ruled in favor of the Secretary and GSA appeals. GSA operates an amusement park at Atlanta, Georgia of very substantial size. During the season it has over 1600 employees, sharply reduced during the off-season, of which some 100 are engaged in maintenance and repairs. From year to year the park remodels, and erects new structures, new buildings, and new places of entertainment, in order to maintain public interest. This new construction is mostly done during the off-season, much of the work being contracted out. During the off-season GSA pays all of its employees wages within the act, but during the season it does not, by virtue of the exemption afforded by 29 U.S.C. § 213(a)(3) to amusement and recreational establishments. During the season a small amount of new work is done by what are normally maintenance employees. It is for this that the Secretary asserts liability. GSA concedes, as it must, that a general contractor employed by it to do this construction work would not be conducting a recreational establishment. GSA is in no better position. It is the character of the work, not the source of the remuneration, that controls. Cf. Hodgson v. Colonnades, Inc., 5 Cir., 472 F.2d 42 (1973) (fact employees “changing the premises” are on hotel pay-roll irrelevant). The nature of the work is what gives rise to the need for an exemption ; the exemption is not a subsidy accorded to an employer because of his principal activities. Nor does it make any difference that the employee is doing mixed work. In any week that any particular employee does some non-exempt work he is covered fully, not pro rata. Hodgson v. Wittenburg Livestock Co., 5 Cir., 1972, 464 F.2d 1219; Mitchell v. Hunt, 5 Cir., 1959, 263 F.2d 913. GSA says that this makes an accounting problem for it. With the. legislation on the books, the problem is of its own making. Affirmed.

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Gregorio P. VALDEZ, Petitioner-Appellant, v. E. P. PERINI, Superintendent Marion Correctional Institution, Respondent-Appellee. No. 72-2141. United States Court of Appeals, Sixth Circuit. Feb. 21, 1973. Gregorio P. Valdez, pro se. William J. Brown, Atty. Gen. of Ohio, Leo J. Conway, Asst. Atty. Gen., Columbus, Ohio, for respondent-appellee. Before WEICK, EDWARDS and CELEBREZZE, Circuit Judges. PER CURIAM. Petitioner was convicted of second degree murder in 1958, and was sentenced from ten years to life imprisonment. Subsequently he was released on parole. In July, 1970, his parole was revoked without a hearing (a hearing was not required under Ohio law) and petitioner was returned to the state correctional institution. In October, 1971, petitioner filed in the District Court an application for a writ of habeas corpus, alleging that he had been denied constitutional rights in that his parole was revoked summarily. The District Court held that there was no constitutional right to a hearing prior to a parole revocation, relying on our decision in Rose v. Haskins, 388 F.2d 91 (6th Cir.), cert. denied, 392 U.S. 946, 88 S.Ct. 2300, 20 L.Ed.2d 1408 (1968). Petitioner then appealed to this Court. Pursuant to Rule 9 of the Rules of this Circuit, we ordered that the judgment below be vacated and that the case be remanded for reconsideration in light of the decision of the Supreme Court in Morrissey v. Brewer, 408 U.S. 471, 92 S. Ct. 2593, 33 L.Ed.2d 484 (1972). Morris-sey held that the due process clause of the Fourteenth Amendment requires that a reasonably prompt informal inquiry be conducted by an impartial hearing officer prior to the revocation of parole. Our remand to the District Court would necessarily require that Court to consider and determine whether Morris-sey was retrospective in application. The District Court quoted a portion of the opinion in Morrissey to the effect that it was to apply “ . . .to future revocations of parole . . . . ” (408 U.S. at 490, 92 S.Ct. 2593). The District Court then expressed confusion over the fact that while the Supreme Court had instructed that that decision be prospective in application, the decision was retrospective with respect to Morrissey himself since his parole revocation obviously had occurred prior to the date of the decision. Nevertheless, the District Court held that Mor-rissey was not to be applied retroactively- Petitioner has moved this Court for appointment of counsel to represent him in his appeal. We deny his motion and we dismiss the appeal pursuant to Rule 9 of the Rules of this Circuit. If it were necessary for this Court to make an independent determination as to the retroactive application of Morrissey, which is the sole issue in petitioner’s appeal, the assistance of counsel would indeed be warranted. However, as the District Court noted, specific instructions on the prospective effect of Mor-rissey were given in the body of that opinion. In our opinion, the fact that Mor-rissey was applied retroactively to Morrissey himself, creates no confusion. The reason for such a result was explained in Desist v. United States, 394 U.S. 244, 89 S.Ct. 1030, 22 L.Ed.2d 248 (1969), wherein Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967), was held to be prospective in application. The Court stated: “Of course, Katz himself benefited from the new principle announced on that date, and, as our Brother Douglas observes, to that extent the decision has not technically been given wholly prospective application. But, as we recently explained in Stovall v. Denno, 388 U.S. 293, 301, 87 S.Ct. 1967, 1972, 18 L.Ed.2d 1199, the fact that the parties involved in the decision are the only litigants so situated who receive the benefit of the new rule is ‘an unavoidable consequence of the necessity that constitutional adjudications not stand as mere dictum.’ Whatever inequity may arguably result from applying the new rule to those ‘chance beneficiaries’ is ‘an insignificant cost for adherence to sound principles of decision-making.’ Ibid.” (394 U.S. at 254, 255, n. 24, 89 S.Ct. at 1036.). The petitioner’s appeal is without merit and it is therefore dismissed. Rule 9, Sixth Circuit. . Such a determination would require consideration of the fact that the rule of Morrissey goes to the reliability of the evidence upon which revocation is based, and the fact that the retroactive application of Morrissey would place an overwhelming burden on the states. Desist v. United States, 394 U.S. 244, 249, 89 S.Ct. 1030, 22 L.Ed.2d 248 (1969). Compare United States v. White, 401 U.S. 745, 91 S.Ct. 1122, 28 L.Ed.2d 453 (1971), and Stovall v. Denno, 388 U.S. 293, 87 S.Ct. 1967, 18 L.Ed.2d 1199 (1967) with Williams v. United States, 401 U.S. 646, 91 S.Ct. 1148, 28 L.Ed.2d 388 (1971) and United States v. United States Coin & Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971).

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Robert Edward LEHMAN, Appellant, v. The CITY OF PITTSBURGH, et al. No. 72-1949. United States Court of Appeals, Third Circuit. Submitted on Briefs Jan. 19,1973. Decided Feb. 21, 1973. John H. Bingler, Thorp, Reed & Armstrong, Pittsburgh, Pa., for appellant. Daniel M. Curtin, Asst. City Sol., Ralph Lynch, Jr., City Sol., Pittsburgh, Pa., for appellees. Before VAN DUSEN and ADAMS, Circuit Judges and BARLOW, District Judge. OPINION OF THE COURT PER CURIAM: This is an action by Robert E. Lehman against the City of Pittsburgh, the Mayor of Pittsburgh, the Assistant Executive Secretary for Personnel of Pittsburgh, the Civil Service Commission of Pittsburgh, the President and Commissioner of the Civil Service Commission, and a second Commissioner of the Civil Service Commission. The plaintiff, who was born and raised in Pittsburgh and who since May 24, 1971 has again resided in that city, complains that he was deprived of the opportunity to apply for a Civil Service job as a result of Pittsburgh’s durational residency ordinance, which requires that applicants for city employment must reside in the city for two years immediately preceding such application. Claiming that this ordinance violates his rights to equal protection of the law and deprives him of privileges and immunities secured by the Constitution and laws of the United States, plaintiff invoked the district court’s jurisdiction under 28 U.S.C. § 1343 and sought both injunctive relief and damages under 42 U.S.C. § 1983. The district court dismissed the complaint on the grounds that (1) the court lacked subject matter jurisdiction, because the complaint failed to raise a substantial federal question; and (2) the complaint failed to state a claim upon which relief could be granted. We affirm that portion of the district court’s order dismissing the complaint as to the City of Pittsburgh and the Civil Service Commission of Pittsburgh. Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), held that a municipality is not a “person” for the purpose of § 1983 suits for damages and is not, therefore, subject to suit. This holding has been extended to bar such suits against city agencies, United States ex rel. Gittlemacker v. County of Philadelphia, 413 F.2d 84 (3d Cir. 1969); see Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967). It has also been applied by this Court to § 1983 suits for injunctive relief. Educational Equality League v. Tate, 472 F.2d 612, n. 1 (3d Cir., filed Jan 11, 1973). As to the individual defendants, we reverse and remand since it is clear that such officials and employees of cities and municipal agencies are “persons” for the purpose of § 1983 suits. E. g., Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967); Monroe v. Pape, supra; Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908); Lewis v. Kugler, 446 F.2d 1343 (3d Cir. 1971). On the claim that Pittsburgh’s dura-tional residency ordinance denies the plaintiff the equal protection of the laws, the district court, on remand, should consider the applicability of e. g., Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969); Walker v. Yucht, 352 F.Supp. 85 (D.Dela., filed Dec. 6, 1972) (3-judge court) (Adams, Circuit Judge); Wellford v. Battaglia, 343 F.Supp. 143 (D.Dela.1972) (Stapleton, J.); Krzewinski v. Kugler, 338 F.Supp. 492 (D.N.J.1972) (3-judge court)

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James Hugh RIDGEWAY, Appellant, v. Terrell Don HUTTO, Commissioner of Correction, State of Arkansas, Appellee. No. 72-1637. United States Court of Appeals, Eighth Circuit. Feb. 20, 1973. Kenneth Coffelt, Little Rock, Ark., filed brief for appellant. Ray Thornton (former Atty. Gen.) and Henry Ginger, Deputy Atty. Gen., Little Rock, Ark., filed brief for appel-lee. Before HEANEY, BRIGHT and ROSS, Circuit Judges. PER CURIAM. The petitioner appeals from the denial of his habeas corpus petition in federal District Court. The facts are not in dispute and have been agreed upon by the parties in a stipulation filed in this Court on November 30, 1972: “Appellant was charged in the Circuit Court of Pulaski County, Arkansas, under information, filed by the Prosecuting Attorney with the crime of assault with intent to kill one Gene Ray Cannon. The information alleged that appellant did unlawfully, feloniously, wilfully and with malice aforethought make an assault upon Gene Ray Cannon with a deadly weapon, to-wit: a knife, then and there cutting him, the said Gene Ray Cannon with said knife then and there held in the hands of him, the said James Hugh Ridge-way.— “In the trial of the case the prosecuting witness, Cannon, testified, and there was no other proof to the contrary on the part of the State, that appellant Ridgeway shot him with a gun, and did not cut him with a knife; that another person, Butch Vaughn, cut him with a knife. The three were on the river bank when the assault occurred.” The appellant’s conviction was affirmed by the Arkansas Supreme Court in Ridgeway v. State, 472 S.W.2d 108 (1971). The appellant’s sole contention on this appeal is that his right to be “informed of the nature and the cause of the accusation” as guaranteed by the Sixth and Fourteenth Amendments was violated at trial due to a fatal variance between the allegations in the information and the proof at trial. We believe the appellant waived any objection he might otherwise have had because he failed to object to the variance at trial. It is clear that the appellant did not object at trial to the introduction of the variant evidence. See, Jackson v. United States, 123 U.S.App.D.C. 276, 359 F.2d 260, 264 & n.3, cert. denied, 385 U.S. 877, 87 S.Ct. 157, 17 L.Ed.2d 104 (1966). Furthermore, even though the appellant did move for a directed verdict at the close of the state’s case and at the close of all the evidence, there is no indication that these motions were based on the variant proof submitted by the state so as to preserve this question for appeal. 2 Wright, Federal Practice and Procedure, § 516 at 378-379 (1969); cf., McIntyre v. United States, 380 F.2d 822, 826 (8th Cir.), cert. denied, 389 U.S. 992, 88 S.Ct. 493, 19 L.Ed.2d 487 (1967). In any event, a careful examination of the record reveals that the appellant was not prejudiced by the fact that the proof varied from the allegations in the information. The appellant’s theory at trial was that although he was in the immediate vicinity of the crime, another person committed both the shooting and knifing. Thus, the variant proof did not prejudice the defendant’s defense. See, United States v. Covington, 411 F.2d 1087, 1089 (4th Cir. 1969). In addition, there is no indication that the appellant was surprised by the variant proof and no motion was made to the court for a continuance for the purpose of preparing a new defense. See, United States v. Covington, supra; United States v. Costello, 381 F.2d 698, 701 (2nd Cir. 1967). Affirmed.

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Gene Patrick GAREAU, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee. No. 72-1546. United States Court of Appeals, Sixth Circuit. Submitted Jan. 29, 1973. Decided Feb. 15, 1973. Gene Patrick Gareau, in pro. per. Frederick M. Coleman, U. S. Atty., Edward S. Molnar, Asst. U. S. Atty., Cleveland, Ohio, for respondent-appellee. Before PHILLIPS, Chief Judge, and CELEBREZZE and McCREE, Circuit Judges. PER CURIAM. This is an appeal from the dismissal of a petition for a writ of habeas corpus and the denial of a motion to reconsider the petition. Because the United States Attorney has not favored this court with a brief in response to the brief- of appellant as required by Fed.R.App.P. 31(a), this appeal has been heard and decided upon the brief of appellant and the record. Appellant is presently serving concurrent sentences in Ohio state prison as a result of a 1968 conviction for armed robbery and shooting with intent to kill. In 1965, appellant pled guilty in federal court to violation of 26 U.S.C. § 5851 (1964), for which he received, and has served, a sentence of three years’ imprisonment. After he completed serving his federal sentence, the Supreme Court held that assertion of the Fifth Amendment’s privilege against self-incrimination provided a complete defense to prosecutions'under the provisions of the National Firearms Act to the violation of which appellant had pled guilty, Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968), and that this ruling was to be given retroactive application. See United States v. United States Coin & Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971); Decker v. United States, 402 U.S. 937, 91 S.Ct. 1604, 29 L.Ed.2d 106 (1971), vacating and remanding 423 F.2d 726 (6th Cir. 1970). On the authority of these decisions, appellant filed a petition for a writ of habeas corpus, alleging that he was in custody in violation of the Constitution because his federal conviction had the effect of increasing the time that he must serve in state prison before he will be eligible for parole. The District Court dismissed the petition initially because of the decision of this court in Decker, supra, that Haynes v. United States, supra, was not to be accorded retrospective effect. Following the vacation of Decker by the Supreme Court, appellant moved for reconsideration of the dismissal of his petition. The District Court denied his motion because it regarded appellant’s petition as a motion to vacate sentence under 28 U.S.C. § 2255 and, since appellant was not serving his federal sentence when the petition was filed, the attack on his federal conviction was “moot.” Consistent with the teaching of the Supreme Court in United States v. Morgan, 346 U.S. 502, 505, 74 S.Ct. 247, 249, 98 L.Ed. 248 (1954), that “in behalf of the unfortunates, federal courts should act in doing justice if the record makes plain a right to relief,” we determine that the District Court should have treated “the record as adequately presenting a motion in the nature of a writ of error coram nobis enabling the trial court to properly exercise its jurisdiction.” And the collateral consequences of appellant’s federal conviction demonstrate that his claim is not moot. See Carafas v. LaVallee, 391 U.S. 234, 88 S.Ct. 1556, 20 L.Ed.2d 554 (1968); United States v. Morgan, supra, 346 U.S. at 512-513, 74 S.Ct. 247, 98 L.Ed. 248; cf. United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972). Moreover, it is clear from the authorities cited above that appellant’s 1965 federal conviction is constitutionally infirm. Accordingly, we reverse and remand with instructions to vacate the 1965 federal judgment of conviction and the sentence imposed pursuant thereto. See United States v. Morgan, supra, 346 U.S. at 513, 74 S.Ct. 247, 98 L.Ed. 248. Reversed and remanded.

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UNITED STATES of America, Plaintiff-Appellee, v. Jo Anna Newby CARAWAY a/k/a Jo Newby and Daniel Elden Scales, Defendants-Appellants. No. 72-2198. United States Court of Appeals, Fifth Circuit. Jan. 15, 1973. As Amended Feb. 14, 1973. Rehearing En Banc Granted April 4, 1973. Melvyn Kessler, Miami, Fla. (Court-appointed), for Caraway. Sky E. Smith, Miami, Fla. (Court-appointed), for Scales. Robert W. Rust, U. S. Atty., Lawrance B. Craig, II, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee. Before RIVES, THORNBERRY and GOLDBERG, Circuit Judges. RIVES, Circuit Judge: Defendants, Jo Anna Newby Caraway and Daniel Elden Scales, were charged in a two-count indictment with (1) conspiracy to violate 21 U.S.C. § 952(a), and (2) intentionally and knowingly violating § 952(a) by importing six pounds of marijuana. Initially, each defendant pleaded not guilty to both counts. After denial of their joint motion to suppress “all evidence seized,” both defendants asked and were granted permission to withdraw the plea of not guilty as to Count II and to plead nolo contendere to that count. The district judge, upon accepting their pleas of no contest, admonished defendants in the following exchange: “THE COURT: .... Have each of you had an opportunity to discuss with your lawyers the entry of a plea of nolo contendere as to Count II? “THE DEFENDANTS: Yes, sir. “THE COURT: Have your lawyers advised you that there has been an agreement between the Government and defense counsel that should you plead nolo contendere and be found guilty the Court would put Miss Caraway or Miss Newby on probation and would sentence Mr. Scales to six months ? “Have both of you understood that? “THE DEFENDANTS: Yes, sir. “THE COURT:' Do each of you agree to that? “THE DEFENDANTS: Yes, sir. “THE COURT: Do you both understand that a plea of nolo contendere is tantamount, in effect, to a plea of guilty. “THE DEFENDANTS: Yes, sir.” [Tr. pp. 68, 69.] “THE COURT: Has anyone, other than what I have said with respect to the agreement with the Government, exercised any force, interrogation or duress of any kind or made any promises to you, other than what I have said, in order to induce you to plead nolo contendere to this charge ? “THE DEFENDANTS: No, sir. “MR. SMITH [Attorney for Scales]: The only other statements which were made to the defendants was concerning their right to appeal, and the Court advised them that Mr. Scales would be allowed the same condition of release pending appeal? “THE COURT: Yes, sir.” [Emphasis added.] [Tr. pp. 69, 70.] On imposition of sentence, the Court further informed defendants that: “ . . . . It is the further order of the Court that each of you shall continue to remain at liberty pending appeal upon bond under the same terms and conditions heretofore set. it “Now, it is my duty to advise each of you that you have an absolute right to appeal from this judgment and sentence and that you are entitled to be represented by an attorney at all times. . . . ” [Emphasis added.] [Tr. p. 74.] Defendants, through this appeal, contest the validity of the warrantless search by Customs Agents of Scales’ boat and allege trial court error in denying their motion to suppress the fruits of that search. Since their nolo con-tendere plea precluded the necessity of introducing evidence, defendants attack a search whose constitutional stature is not a jurisdictional issue. Under normal circumstances, a plea of nolo contendere is the legal equivalent of a guilty plea and a waiver of all non jurisdictional defects. Lott v. United States, 1961, 367 U.S. 421, 81 S.Ct. 1563, 6 L.Ed.2d 940; Zebelman v. United States, 10 Cir. 1964, 339 F.2d 484, 485; United States v. Moretti, 2 Cir. 1965, 353 F.2d 672, 673; 3 Wright, Federal Practice & Procedure § 678, p. 140 n. 28. However, when the trial court and defendant enter an explicit agreement that a no contest plea preserves objections to the evidence found admissible by denial of the motion to suppress, this Court has felt constrained to honor such an agreement. United States v. Rosenberg, 5 Cir. 1972, 458 F.2d 1183; United States v. Kelehar, 5 Cir. 1972, 470 F.2d 176. Cf., United States v. Wysocki, 1972, 457 F.2d 1155, 1162. See also Jaben v. United States, 8 Cir. 1964, 333 F.2d 535, 538, aff’d, 381 U.S. 214, 85 S.Ct. 1365, 14 L.Ed.2d 345. In United States v. Doyle, 2 Cir. 1965, 348 F.2d 715, 719, cert. denied, 382 U.S. 843, 86 S.Ct. 89, 15 L.Ed.2d 84, Judge Friendly recognized that, “There are a number of ways to deal sensibly with such a ease without departing from the principle of Parrino, [United States v. Parrino, 2 Cir. 1953, 203 F.2d 284, 286-287], A plea expressly reserving the point accepted, by the court with the Government’s consent or a stipulation that the facts are as charged in the indictment are two; failing either of these, the defendant can simply stand on his not guilty plea and put the Government to its proof without developing a case of his own.” (Emphasis added.) (Footnote omitted.) Continuing, Judge Friendly discussed Jaben and quoted from his examination of the record in Jaben “not brought to our attention by counsel for either side” that “* * * this [the record] shows that Jaben pleaded nolo on the express condition ‘that the defendant will then have an opportunity to have the question as to whether the said count is barred by the statute of limitations decided upon by the Eighth Circuit Court of Appeals or by the Supreme Court, and that the plea of nolo conten-dere is not to preclude the defendant from taking an appeal on the issue at that time.’ ” 348 F.2d at 719. Our rationale for recognizing this type of express agreement is twofold. First, we are reluctant to establish a rigid rule requiring a defendant to undergo the costly and futile ordeal of a complete trial, when the State could easily prove its case by the evidence claimed to b.e illegally obtained and by no other evidence, and the defendant merely seeks to preserve a single, nonjurisdictional issue. See United States v. Warden of Attica State Prison, 2 Cir. 1967, 381 F.2d 209. Second, of the combined requisites, “voluntariness” and “intelligence” (see Brady v. United States, 1970, 397 U.S. 742, 747 n. 4, 90 S.Ct. 1463, 25 L.Ed.2d 747), for equivalence to a valid guilty plea, a nolo plea, conditioned on right to appellate review of a motion to suppress evidence, might now (since McMann v. Richardson, 1970, 397 U.S. 759, 768-771, 90 S.Ct. 1441, 25 L.Ed.2d 763) meet the test of being “voluntary,” but the conditioning of the plea on a right to appellate review demonstrates that it was not so “intelligently” entered as to waive deprivation of the non jurisdictional defect sought to be reviewed; and more especially so, where, at the time of pleading, the practice of the reviewing court is to honor such a condition allowed by the trial court. The pivotal marijuana, which defendants are charged with importing, arrived at Miami International Airport, from Jamaica, concealed in a steamer trunk. The trunk was addressed to Jo Anna Caraway, 1555 Griffin Road, Miami, Florida (the Marina address), Customs officials, suspicious of the trunk’s contents, placed it in the Cus-'Mpms Seizure Room where it lay unclaimed for three days. On the third day, Mr. Cole, a resident of the Marina where Scales’ houseboat was docked, arrived to claim the trunk. Customs officials opened the trunk at the airport in Cole’s presence, discovered the marijuana, and immediately arrested Cole. Under interrogation, Cole professed his innocence, implicated the defendants in the importation plot and claimed to have seen defendants smoking marijuana on Scales’ boat. Customs agents, evidently convinced that Cole was blameless, enlisted his aid in conducting a “controlled delivery.” The trunk was secured; Cole was instructed to return to the Marina as planned, and Customs officials secretly closed in on the rendezvous. At the Marina entrance, Scales stopped Cole and apprehensively asked him why he was delayed. Cole panicked and said, “There’s marijuana in the trunk and we are all going to get busted.” [Tr., p. 26.] Scales then turned to Miss Caraway, who was seated in a nearby car, and said, “Get out of here.” Both Scales and Miss Caraway were immediately arrested. The trunk never left Cole’s truck. Yet, Customs officials proceeded to thoroughly search Scales’ unoccupied houseboat moored some distance away. This critical search turned up no additional contraband, but did expose letters addressed to Miss Caraway which referred to the marijuana shipment. [This fact does not appear in the record, but on oral argument counsel for Miss Caraway admitted that the letters contained references to the marijuana.] Not only was Scales’ boat unoccupied, but also one of its engines was dismantled on the dock [Tr., p. 49], suggesting that the boat might have been inoperative. Nevertheless, Customs officials proceeded to make a warrantless, exploratory search of the boat. Customs Agent Larry Morphis, attempting to justify the boat search, testified that, “The way I figured, if a person is involved in smuggling with airline cargo and he has a boat and he has been known to smoke marijuana and all the other things we had, I figured it indicated a search of the boat, as far as my occupation is concerned.” [Tr., pp. 36, 37.] In answer to later questions by defense counsel, Mr. Morphis elaborated on his reasons for conducting the boat search: “Q. Agent Morphis, you made the statement that for many reasons you intended to search the vessel. Those were your words, I believe? “A. Yes. “Q. Can you list those reasons that you intended to search the vessel? U “A. . . . and that would be that here were the people who lived on the boat who, to the best of ray knowledge, appeared to be involved in the smuggling of marijuana via Pan American Airlines Cargo. “Now, regardless of whether they were innocent or guilty, that along with the fact that they had been known to smoke marijuana and they had a boat, I thought that indicated that this boat should be searched . . . . ” [Tr., pp. 41, 42.] Confronted with these feeble justifications for the boat search, the district judge initially granted defendants’ motion to suppress, stating that, “ . . . There is no evidence that Customs ever knew this boat was out of the country. I can’t go with you at all on the theory that this is a border search. “I know of no case in the entire case history which permits as a border search a search, for example, of a home or a permanent place of residence or a boat unless there is some knowledge that that boat has been outside the territorial waters of the United States.” [Tr., p. 53.] After reasoning that Scales’ boat was not within the ambit of a border search, the district judge went on to puncture the Government’s claim of probable cause. “I could see their interest in it [the boat], for example, if that steamer trunk had been delivered and taken on board that boat. But here you have a situation where it never did get on board that boat. I don’t see how Customs could have any right to search that boat at all without a search warrant, and I don’t think they have probable cause, really, to even get a search warrant. “I am going to grant the motion to suppress, gentlemen.” [Tr., p. 55.] After a short recess and consultation with government attorneys, the district judge abruptly overturned his prior ruling and denied defendants’ motion to suppress. He based his sudden reversal solely on 19 U.S.C. § 1581(a), which he had not previously considered. The pertinent portions of 19 U.S.C. § 1581(a) provide that, “Any officer of the customs may at any time go on board of any vessel or vehicle at any place in the United States or within the customs waters . . . and examine the manifest and other documents and papers and examine, inspect, and search the vessel or vehicle and every part thereof and any person, trunk, package, or cargo on board, and to this end may hail and stop such vessel or vehicle, and use all necessary force to impel compliance.” The district judge, in his initial ruling, expressly held that the Customs’ boat search was not prompted by probable cause, nor was it within the scope of a legitimate border search. Although he ultimately denied defendants’ motion to suppress, the district judge never abandoned that earlier holding. Since the probable cause and border search issues are mixed questions of law and fact, this Court must give strong credence to the district court’s ruling on those issues. 19 U.S.C. § 1581(a), admittedly the sole basis for denial of defendants’ motion to suppress, does not vitiate the basic protection from unreasonable government intrusions provided by the fourth amendment. That statute, while literally broad enough to support any vessel search, may sweep only as widely as the fourth amendment permits. All searches must conform to the fundamental constitutional test of reasonableness. The warrantless search of Scales’ boat was manifestly unreasonable notwithstanding section 1581(a). I. The Border Search Justification Customs officials conducting' border searches have the exceptional power to search without probable cause. Carroll v. United States, 1925, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543; Cervantes v. United States, 9 Cir. 1959, 263 F.2d 800, 803; King v. United States, 9 Cir. 1965, 348 F.2d 814, 817. That power, although enabling “mere suspicion”based searches, does not obviate the necessity of compliance with the constitutional standard of reasonableness. Boyd v. United States, 1886, 116 U.S. 616, 623, 6 S.Ct. 524, 29 L.Ed. 746; Morales v. United States, 5 Cir. 1967, 378 F.2d 187. Border search principles apply to an extended area radiating from the border, but broader than the immediate border area. Government officials may delay the search of a suspect vehicle entering the Country in order to trace the vehicle to its destination and sweep the guilty parties in with the contraband. See Rodriguez-Gonzales v. United States 9 Cir. 1967, 378 F.2d 256; Thomas v. United States, 5 Cir. 1967, 372 F.2d 252; United States v. Henderson, 5 Cir. 1972. 469 F.2d 1074. Customs officials cannot, however, give unreasonable elasticity to the border concept. In outlining the limits of an extended border search, the court in Alexander v. United States, 9 Cir. 1966, 362 F.2d 379, 382, suggested that the government action be tested by “ . . .a determination whether the totality of the surrounding circumstances, including the time and distance elapsed as well as the manner and extent of surveillance, are such as to convince the fact finder with reasonable certainty that any contraband which might be found in or on the vehicle at the time of search was aboard the vehicle at the time of entry into the jurisdiction of the United States.” Applying the Alexander standard, the Customs search of Scales’ boat cannot conceivably fall within the ambit of an extended border search. The contraband was never placed on the boat. The boat did not cross any border. The district court ruling simply reinforces that conclusion. II. The Probable Cause Justification If the Customs officials were outside the bounds of a border search when they entered Scales’ boat, their actions cannot be justified unless based on probable cause. But no facts were known which, together with rational inferences from those facts, could have warranted this intrusion. The district judge, when confronted with the evidence, ruled that no probable cause existed. In light of the record before this Court, that decision appears irrefutable. Searches conducted outside the judicial process are per se unreasonable subject to a few well-established exceptions. Katz v. United States, 1967, 389 U.S. 347, 356, 88 S.Ct. 507, 19 L.Ed.2d 576. Accord, Coolidge v. New Hampshire, 1971, 403 U.S. 443, 454-455, 91 S. Ct. 2022, 29 L.Ed.2d 564. Customs officials made a full exploratory search of Scales’ boat without a warrant. Yet, there was no danger that the suspect vehicle would escape from the jurisdiction. Chambers v. Maroney, 1970, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419. Nor did Customs agents possess any reliable information suggesting the necessity of an immediate search. Cole’s tale of nocturnal pot parties was unsubstantiated, and he was personally involved in the importation as well as previously unknown to law enforcement authorities. III. Application of 19 U.S.C. § 1581(a) The trial judge reversed his ruling on the motion to suppress solely on the basis of section 1581(a). Section 1581(a) has never been interpreted to grant the sweeping power which its language implies. In Fish v. Brophy, S.D.N.Y.1931, 52 F.2d 198, a New York district court held invalid a warrantless Customs search of defendant’s pleasure boat, allegedly authorized by section 581 of the Tariff Act of 1922 (the identically worded predecessor of 19 U.S.C. § 1581(a)). The Brophy court ruled that section 581 authorized searches only where the detained boat was required to carry a manifest, and manifests are required only in the case of vessels arriving in the United States with cargo from foreign ports. The Brophy court emphatically stated that, “It is hard to believe that the Legislature intended, in section 581, to place private pleasure boats in the same position as vessels importing cargo into the United States.” 52 F.2d at 201. In a later case involving the Customs’ search of a fishing boat, United States v. Coppolo, D.N.J.1932, 2 F.Supp. 115, Judge Avis, in interpreting the exact statute at issue here, rejected the Bro-phy holding that the Tariff Act applied only to vessels carrying cargo from a foreign port. Instead, he found the search illegal under the theory that a government officer has the right to board a vessel to inspect the manifest and observe the cargo, but cannot conduct an exploratory search unless the initial boarding reveals “apparent violation of the navigation or revenue laws.” The Customs’ search of Scales’ boat was illegal under the rationale of either the Brophy or Coppolo cases. Scales’ boat was apparently inoperable, utilized as a stationary home, and clearly incapable of transporting cargo. To apply section 1581(a) to such a case would impart to that statute unconstitutional scope. Reversed and remanded. Granting Motion for Rehearing En Banc Before JOHN R. BROWN, Chief Judge, and WISDOM, GEWIN, BELL, THORNBERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, INGRAHAM and RONEY, Circuit Judges. BY THE COURT: A majority of the Judges in active service, on the Court’s own motion, having determined to have this case reheard en banc, It is ordered that this cause shall be reheard by the Court en banc on briefs without oral argument. The Clerk will specify a briefing schedule for the filing of supplemental briefs. . 21 U.S.C. § 952(a) : “It shall be unlawful ... to import into the United States from any place outside thereof, any controlled substance in schedule I or II of sub-chapter I of this chapter . . . , except that . . . [such substance] may be so imported under such regulations as the Attorney General shall prescribe . . . .”

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Richard J. SENNOTT and Joan Sennott, Plaintiffs-Appellees, v. RODMAN & RENSHAW, Defendant-Appellant. No. 71-1201. United States Court of Appeals, Seventh Circuit. Argued April 24,1972. Decided Jan. 18, 1973. Rehearing En Banc Denied March 28, 1973. Howard Lewis Fink, Robert Dunn Glick, Ira S. Kolb, Chicago, Ill., for defendant-appellant. Patrick W. O’Brien, James W. Gladden, Jr., Chicago, Ill., for plaintiffs-appellees. Before SWYGERT, Chief Judge, PELL, Circuit Judge, and LARAMORE, Senior Judge Senior Judge Don N. Laramore is sitting by designation from the United States Court of Claims. PELL, Circuit Judge. . Appellant Rodman & Renshaw, a securities brokerage house and member of the New York Stock Exchange, appeals from an adverse judgment in the district court awarding appellees Richard and Joan Sennott damages of $99,600 plus prejudgment interest. Appellant was found vicariously liable for the damage caused Sennott and his wife by the fraudulent securities manipulations of Jordan Rothbart, a former associate of Rodman & Renshaw and son of a partner in the firm. Judgments were also entered against Jordan Rothbart and his father, William Rothbart. Only Rodman & Renshaw (Rodman) appealed. Jordan Rothbart, a commodities speculator and securities dealer apparently possessed of persuasive sales ability but a lesser standard of integrity, had at one time but not subsequent to 1958, been an employee of Rodman. No express authority to act on behalf of that firm existed subsequent to 1958; indeed it fairly appears that he was at the times here involved persona non grata to Rodman notwithstanding his father’s status as a partner therein. In 1962, the Securities and Exchange Commission in an order had held that Jordan had between 1955 and 1957, while employed by another broker-dealer, violated certain anti-fraud provisions of the Securities Act. In 1958, his registration as a representative of a member of the National Association of Securities Dealers, Inc. had been revoked because of deceptive practices in the sale of securities. The Sennotts were unacquainted with this background at any material time here involved. Jordan became a member of the Chicago Board of Trade in 1960 and engaged thereafter as a trader for his own account in commodities. Through his dealings at the Board of Trade, Jordan became acquainted with Richard Sennott who was also an active trader. Sennott traded both for himself and for the Hon-eymead Trading Corporation of which he was an officer. As their relationship developed, Sen-nott, a more experienced commodities trader, recommended various transactions to Jordan who reciprocated by encouraging Sennott to take advantage of Jordan's father’s expertise in the securities market. Specifically, Jordan told Sennott that his father had made money in the stock market for several members of the Board of Trade and that if Sen-nott ever wished to open a stock trading account Jordan would have one opened for him at Rodman & Renshaw. Initially Sennott declined to act on Jordan’s recommendations, but in January 1964, in response to Jordan’s assertion that his father thought a particular stock was a good buy, Sennott asked Jordan to purchase a limited number of shares for him. Jordan immediately went to the special Rodman telephone located on the floor of the Board of Trade and arranged for the purchase of Sennott’s order through Rodman. In the same month Jordan arranged for Sennott to open a trading account with Rodman in the name of his, Sen-nott’s, wife. Trading through that account and six others which he subsequently opened, Sennott’s trading volume with Rodman for the two-year period between 1964 and 1966 totalled more than $2,000,000. Approximately seventy per cent of this trading was done through accounts opened by Jordan Rothbart, and much of it was done on the recommendation of Jordan or his father. A typical transaction involved Jordan advising Sennott that his father believed a particular stock should be bought or sold, Sennott indicating a desire to purchase, and Jordan going to the Rodman phone on the Board of Trade floor and calling in the order. Shortly thereafter Sennott would receive a mailed confirmation slip from Rodman. Sennott, of course, paid brokerage fees on all of these transactions. In February, 1964, Jordan and Sen-nott had a conversation on the floor of the Board of Trade during which Jordan told him that Skyline Homes, Inc. (Skyline) was about to be listed on the New York Stock Exchange but that the company needed more shares to be eligible. In an effort to meet the requirement, Skyline stock was made a secondary offering through Rodman & Renshaw at approximately $40 per share. Jordan’s offer to procure a portion of this offering for Sennott was accepted, and it was agreed that Jordan would place an order with Rodman for 2,000 shares of Skyline. Sennott received the shares in April and went immediately to the offices of Rodman & Renshaw to deliver a check for the shares. It was on this occasion that Sennott first met William Rothbart. While there was nothing fraudulent or improper about this or the previous sales, it was the precursor for the deception which followed. In March 1964, shortly after the order for 2,000 shares of Skyline was placed but before Sennott met William Rothbart, Jordan approached Sennott with respect to the purchase of additional shares of Skyline stock, this time through stock options which allegedly had been made available to Jordan through his father’s dealings with Skyline. The district court’s Finding of Fact Number 9 correctly sets forth the representations made by Jordan Rothbart: “. . . Rothbart told Sennott that a number of options for the purchase of Skyline Homes, Inc. stock had been made available to him, that the options had initially been offered to his father William Rothbart, a partner in Rodman & Renshaw, in return for services his father had rendered Skyline Homes, Inc. in the secondary public offering referred to above and also for helping Skyline Homes, Inc. become listed on the American Stock Exchange, but that, when Rothbart^ father turned down the offer because SEC regulations forbid such transactions on the part of broker-dealers, the options had been made available to him. Jordan Rothbart said that he was willing to exercise some of the options on behalf of Sennott. Jordan Rothbart also told Sennott that he was going to exercise some of the options for himself and that all the money for the options would be held in escrow in New York City until the time came for the exercise of the option rights. He told Sennott that the options would be exercised for shares of Skyline Homes, Inc. stock within seven months and that he would then deliver shares of said stock to Sennott at a price of $26.50 per share.” At the time these representations were made, Skyline was selling for approximately $40 per share. Lured by a discount of that magnitude, Sennott agreed to purchase Skyline stock through the option plan. On seven separate occasions between March 18 and October 2, 1964, Sennott placed orders and delivered checks to Jordan Rothbart for Skyline stock at the option price. Payments for these orders totalled approximately $142,000. No stock options of the type described by Jordan ever existed and the representations were obviously designed to defraud Sennott. Instead of depositing the payments in an escrow account in New York, Jordan placed each check in his wife’s personal checking account at the First National Bank of Highland Park and subsequently used the money to pay his own substantial trading losses. When Jordan Rothbart first proposed the purchase of Skyline stock through the option arrangement, it was agreed that neither party would divulge the nature of their dealings. In accordance with that agreement each of the seven payments was recorded only by handwritten cash receipts prepared by Sen-nott and signed by Jordan Rothbart. When the stock which had been set for delivery on October 18, 1964, did not materialize, Sennott inquired as to the reason for the delay. He was told by Jordan that there was no reason for concern, that the temporary delay was caused by the S.E.C.’s refusal to list Skyline on the New York Stock Exchange until the company had more shareholders. Satisfied with this explanation and with Jordan’s assurance that the stock would be forthcoming soon, Sennott took no further action with respect to the Skyline options until early November 1964 when he was summoned to a meeting with the managing partner of Rodman & Renshaw, Vernon Carroll. The circumstances of this meeting warrant detailed scrutiny. In October or early November, Jordan Rothbart approached Sennott on the floor of the Board of Trade and asked him to accompany him to a public phone to speak with William Rothbart. In the course of their conversation, William Rothbart told Sennott that Mr. Carroll wanted to meet with him to discuss the Skyline options but that the matters which Mr. Carroll wished to discuss were none of his business. Sennott was then advised not to cooperate with Carroll. Accompanied by Jordan, Sennott went to the offices of Rodman & Renshaw that afternoon to meet with Carroll. Jordan’s father met them at the door and again told Sennott the option transactions were none of Carroll’s business. At this time, he also added that Sennott should not worry, he would get his stock options. All three men then went to Carroll’s office where Carroll produced several of the checks Sennott had given Jordan Rothbart for the options. Carroll then sought to question Sennott with respect to how the cheeks happened to have been endorsed by Dolores Rothbart (Jordan’s wife) and deposited in her account in the First National Bank of Highland Park. Sennott, while admittedly shocked by this revelation, told Carroll it was none of his business and refused to disclose the nature of his dealings with Jordan. Immediately after the conference, Sennott asked Jordan Rothbart about the checks and was told that they were deposited in the Rothbart account so Jordan, who asserted he was purchasing equal amounts of Skyline stock, could pay for the total stock purchase with a single check. Apparently this explanation satisfied Sennott since he made no further inquiries on the matter. Indeed, when again summoned to Carroll’s office a few weeks later, he voluntarily signed a letter of indemnity protecting Rodman & Renshaw from liability for any failure on their part to investigate fully the signatures on the checks. However, when several months had passed without delivery, Sennott again pressed Jordan for an explanation. On February 26, 1965, as a result of this inquiry, Jordan delivered 1,000 shares of Skyline common stock in street name to Sennott. This stock was purchased through Jordan’s own broker, not Rod-man & Renshaw, on the open market and merely signed over to Sennott in an effort to deceive him into believing he was receiving part of his “stock options.” The deception was effective for, although Sennott continued his requests for the balance of the stock, he made no further inquiry into the actual facts surrounding the late options. Between February 26, 1965, and January 20, 1966, Jordan delivered an additional 2,200 shares of Skyline common stock to Sennott. Delivery of this stock was made in six installments. As before, each delivery consisted of stock purchased on the open market for the market price. As set forth in detail below, the value of the shares at the time received totalled $82,600. In the spring of 1966, Sennott, who apparently had been oblivious to the waving banners of suspect practices of which he was the victim, learned that another member of the Board of Trade had filed a $75,000 claim against Jordan Rothbart with the Board of Directors alleging a fraudulent scheme remarkably similar to the circumstances of Sennott’s own transactions with Jordan. At approximately the same time, Sennott also learned that Jordan Rothbart had previously been expelled from the securities market. Until that time, Sennott had been unaware of Jordan’s prior fraudulent practices or his dismissal from Rod-man. In spite of these revelations, however, Sennott clung to the hope that the stock would be delivered, and, in an effort to facilitate that vain hope, when summoned before the Business Conduct Committee investigating Jordan Roth-bart, he refused to cooperate or disclose his dealings. Indeed, not until May 1966, after numerous delivery dates had passed without receipt of further shares of stock, did Sennott go to William Rothbart to inquire about the stock options. Sennott described his meeting with William Rothbart at the Rodman office. “I let Bill know exactly what was going on as far as no delivery of the Skyline Homes, that he [Jordan] was probably going to be expelled from the Chicago Board of Trade, at which time Bill Rothbart told me there was nothing he could do about it.” Jordan was expelled from the Board of Trade in June 1966 for refusing to turn his financial records over to the Business Conduct Committee. At that point he ceased coming to the floor of the Board of Trade and Sennott discontinued his unsuccessful efforts to procure delivery of the stock by telephone. Only after all else had failed did Sennott approach Rodman with evidence of the scheme. At the conclusion of a bench trial on the merits, the trial judge found Rod-man vicariously liable for the losses caused the Sennotts. Liability was based upon several theories set forth in the court’s conclusions of law. First, the court concluded that William Roth-bart “knowingly assisted and participated in the efforts of Jordan Rothbart to defraud plaintiffs,” in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 adopted by the Securities and Exchange Commission thereunder, Section 9(a)(4) of the Securities Exchange Act of 1934, and Section 17(a) of the Securities Act of 1933. The court then held that not only William Rothbart’s knowledge of the solicitation of stock business by Jordan at the Board of Trade but also his knowledge of the false representations to Sennott regarding Skyline was acquired within the scope of the Rodman partnership business and therefore was imputed to and binding upon Rodman. In addition, the judge concluded that because Rodman “knew or should have known” of the illegal conduct of William and Jordan Rothbart, it was equally liable with them for the false representations. The trial judge also held Rodman accountable for Jordan Rothbart’s action because it “aided and abetted” in the fraud in that, in breach of its broker-agent fiduciary duty, it failed to inform Sennott of Jordan’s background. Finally, the trial court imposed liability on Rodman on the ground that Rodman failed to act in good faith with respect to its duties as a “controlling person” over William and Jordan Rothbart, Section 20(a) of the 1934 Act, 15 U.S.C. § 78t(a). The ground rules for our review are well-established and need not be repeated here. The applicable standards are collected and summarizd by Judge Hastings in Prince v. Packer Manufacturing Company, 419 F.2d 34, 36-37 (7th Cir. 1969). Assigning the matter of credibility to the district court we turn therefore to a determination of whether there is substantial evidence to support the findings of fact and whether the court erred as to the applicable law. Taking the agency questions first, it is clear that Rodman must be deemed to have had knowledge of all of the securities transactions which Jordan solicited for his father prior to the inception of the fraudulent stock option scheme. In that situation, the knowledge of William Rothbart is, under general principles of agency, imputed to the partnership. Had plaintiff been defrauded in one of those transactions, Rodman’s liability would seem to be unquestionable. Those transactions, however, do not comprise the substance of this lawsuit. On the contrary, the facts upon which liability must be established in this case, if at all, are critically different. While the evidence leaves no doubt that William Rothbart, having processed the orders and his firm having received a broker’s fee, had knowledge of the solicitations of Jordan in the prior transactions, the record is silent as to a basis upon which the district court could properly have inferred that William had knowledge at any pertinent time of his son’s stock option deception. We are at a loss as to the basis in the record for the district court’s conclusion that William Rothbart “knowingly assisted and participated” in the fraud. Indeed, the first contact the plaintiff had with William respecting the options took place in November 1964, after all of the payments for the stock had been made. This is not a pertinent time. There is no evidence that prior to the Carroll meeting William Rothbart did anything to induce Sennott to subject himself to Jordan’s defalcations, nor that he had any knowledge of what was transpiring until after the fact. Further, we find no reason to belive that Sennott considered William Roth-bart to be any part of the transaction other than that he had been the original offeree of the mythical options. In fact, Sennott himself indicated that his understanding of Jordan’s stricture of confidentiality to be he should not say a word about the transaction to anybody including William Rothbart. Sennott also testified that it was never his understanding that the option shares were coming from or through Rodman but he imagined they would be coming from the Skyline corporation itself. Finally, Sen-nott admitted on cross-examination that he had testified in his deposition that when asked by investigators for the Illinois Securities Commission, which was looking into his complaint against Jordan, whether William Rothbart had ever participated or conspired with Jordan to perpetrate the option fraud, he had replied, “[N]o, not to my knowledge.” Citing Crittendon v. State Oil Company, 78 Ill.App.2d 112, 115, 222 N.E.2d 561, 563-564 (1966), Sennott contends on this appeal that Rodman & Renshaw is estopped by its conduct from claiming that Jordan was not its representative. Again, we do not disagree as to the transactions handled through that firm, but those are not the ones with which we are now concerned. Sennott also speaks of “apparent agency” established by Rodman. Without becoming involved in the semantic niceties of distinctions, if any, between ostensible agency, apparent agency, and agency by estoppel, we note that Crittendon (78 Ill.App.2d at 116, 222 N.E.2d at 564) states that “[i]t is essential to the application of the doctrine of estoppel that such conduct or representations be relied and acted upon Under Sennott’s theory of apparent authority or estoppel, therefore, plaintiff would be required to prove that he was relying upon Jordan’s apparent authority, and hence on Rodman, when he decided to purchase the Skyline options. Reliance is not evident from the record before us. Indeed, the converse is clearly demonstrated, for not only did the fraudulent representations never involve Rodman but both Sennott and Jordan Rothbart actively sought to prevent Rod-man from discovering the option transactions. Sennott agreed to keep the option plan secret, including from Rodman, and intentionally used personal payment receipts to record Sennott’s payments. The strongest evidence of the plaintiffs’ lack of reliance upon Rodman, however, is seen in Sennott’s refusal to cooperate with Carroll’s inquiry into the endorsements on Sennott’s checks. Had Sennott been relying on Rodman’s participation in the option plan, it is unlikely that he would have refused even to discuss the matter with a representative of Rodman. On the contrary, Sennott’s own statements belie such reliance. Responding to an inquiry by defendant’s attorney, Sennott observed, “[W]ith regard to this money that had been invested, I really felt that this thing would have completely gone undetected by Rodman & Renshaw had not that check been made out of the profit sharing.” The Sennotts also place considerable reliance on Blackburn v. Dean Witter, 201 Cal.App.2d 518, 19 Cal.Rptr. 842 (5th Dist.Ct.App.1962), a case which they assert is “squarely in point.” There, a registered representative of the defendant brokerage house persuaded the plaintiff to invest in stock of a nonexistent company. The plaintiff then, as Sennott did here, sold some stock through the brokerage house to finance the purchase of the nonexistent stock. The brokerage house was subsequently found liable for the fraudulent acts of its representative. While Blackburn is factually similar to this case, a major distinction exists. The plaintiff in the Blackburn case was a customer who believed that he was purchasing stock through the brokerage house in the same manner as he had previously made purchases, and, as such, was relying on the expertise and integrity of the brokerage. Both the agency and the reliance elements were unquestionably present. Here, however, while some type of implied agency may well have existed as to other transactions, there was no reliance upon this agency in the transactions in question. Simply stated, the damage Jordan Rothbart inflicted upon the plaintiffs was a result of Sennott’s misplaced reliance upon Jordan Rothbart and not upon Rodman & Renshaw. Having reviewed the record at length and found that the evidence supports neither plaintiffs’ theory that William Rothbart had knowledge of his son’s, reprehensible scheme which was imputable to Rodman nor their theory of apparent authority, we are forced to reject the trial court’s factual findings and legal conclusions with respect to these issues. Our findings on these issues are also dispositive of plaintiffs’ other theories of liability. As to their position that Rodman was guilty of “aiding and abetting” in the option scheme, our conclusion that the evidence does not support the trial judge’s finding that William Rothbart had knowledge of the fraudulent scheme precludes imposition of liability on this basis. Without a showing that a Rodman partner or agent had knowledge of the fraudulent acts, and in the absence of a showing that here Jordan was purporting to act for Rodman, there is no basis for holding Rodman liable for acts of third parties. Similarly, plaintiffs’ theory and the trial court’s finding that Rodman is liable under Section 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78t(a) as a “controlling person” over William and Jordan Rothbart is without merit. The trial judge found that Rod-man was in a position to control both men and that the partnership “did not act in good faith in exercising such control.” That finding, while sufficient to impose liability on Rodman for any of the pre-option scheme stock solicitations in which Sennott actually relied upon Rodman’s involvement in deciding whether to act, is not an adequate foundation upon which to base liability where Rodman was admittedly not considered to be involved in the transaction. Rodman’s duty to control its partners and agents, as well as its past employees, in situations such as this extends only to transactions with or by these parties where Rodman is itself involved. To extend it further would be to impose liability upon Rodman for virtually any act of its past or present employees and partners regardless of how remote and unrelated that act might be to Rodman & Renshaw. We are not inclined to read Section 78t so expansively. For these reasons the judgment below is reversed as to Rodman & Renshaw, and the cause is remanded with instructions to dismiss the complaint as to Rod-man & Renshaw and to enter judgment for said defendant. Reversed and remanded. . The district court made the additional finding that Jordan Rothbart solicited orders for Rodman & Renshaw from at least five other members of the Board of Trade. These orders and sales were accomplished by the use of the Rodmau telephone, and in each instance the member placing the order dealt exclusively with Jordan Rothbart. . $10,000 of the amount was paid by Honeymead and is not involved in this appeal. . Amounts Number of Closing Received Date Shares Price by Sennott 2/26/65 1,000 $27.25 $27,250.00 3/ 3/65 600 27.625 16,575.00 5/ 4/65 200 29.50 5,900.00 8/ 3/65 400 24.375 9,750.00 8/ 5/65 300 24.00 7,200.00 12/13/65 200 22.75 4,550.00 1/20/66 500 22.75 11,375.00 $82,600.00 3,200 . This would seem consistent with Sen-nott’s description of his May 1966 meeting with William Rothbart at which he “let Bill know exactly what was going on as far as no delivery of the Skyline Homes. . . . ” When questioned about that meeting, Sennott stated in deposition: “And at this particular time is when I said, ‘Well, you know, Bill, whether you realize it or not, it was supposedly offered to you and that because you were a senior partner in Rodman & Renshaw, Jordie told me, under the 8EC rules you couldn’t accept it.’ “He said, ‘Well, that’s not true.’ He said, T knew nothing of the stock options in Skyline.’ “And again I asked him, ‘Why did you tell me before going to Carroll’s office not to worry? I’d get my stock options in Skyline.’ “He said, ‘Because Jordie had assured me that you would.’ ” . In addition, Section 78t governing the liabilities of “controlling persons” provides in part: “(a) Every person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.” Liability is not imposed where the controlling person exercises good faith or does not induce the act which gives rise to the cause of action. Here, Rodman may not have acted in good faith with respect to the legitimate stock solicitation by Jordan Rothbart of which William Rothbart had knowledge but Rodman’s lack of knowledge of the fraudulent stock option scheme creates an entirely different situation. We do not see how Rodman can be found to have exercised bad faith with respect to a transaction of which it had no knowledge. It is equally clear that Rodman did not “induce” the acts of Jordan Roth-bart, and without bad faith or inducement there can be no liability under this section.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellant, v. Frank GERVATO, Appellee. No. 72-1334. United States Court of Appeals, Third Circuit. Argued Nov. 14, 1972. Decided Jan. 26, 1973. Carl L. Melone, U. S. Atty., James J. Tansey, Criminal Division, Department of Justice, Washington, D. C., for appellant. Stanford Shmukler, Philadelphia, Pa., Richard P. Abraham, Philadelphia, Pa., of counsel, for appellee. Before ALDISERT, GIBBONS and HUNTER, Circuit Judges. OPINION OF THE COURT JAMES HUNTER, III, Circuit Judge. We review in this case the validity of a district court decision that a warrant to search a private dwelling cannot constitutionally be executed in the known absence of the occupant unless exigent circumstances exist. As far as we know, this question has not been decided by either the Supreme Court or any federal court of appeals. On March 24, 1971, agent Glanz of the Federal Bureau of Narcotics and Dangerous Drugs (BNDD) obtained a warrant authorizing him to search appellee Frank Gervato’s apartment in the daytime for Dimethyltryptamine, a controlled dangerous drug, and chemicals and equipment used in its manufacture. About 5:30 p. m., Glanz and two BNDD chemists drove to appellee’s apartment which had been under surveillance by BNDD agents since approximately 12:30 p. m. that day. These agents had seen Gervato leave the premises sometime after 1:00 p. m. and not return, and Glanz was so informed by radio when he arrived around 6:00 p. an. Glanz then proceeded to appellee’s door, knocked, and announced his official identity and his reason for wanting to enter the apartment. When he received no reply he knocked again and then forced open the door. Once inside the apartment, Glanz and the other agents were met by the owner of the building and two young men, who had entered through a door connecting the apartment with a delicatessen. Glanz showed the owner a copy of the search warrant and agreed to the owner’s request to be present while the apartment was searched. The warrant was then executed with 78 items being seized. The agents departed about 9:00 p. m., leaving behind a copy of the search warrant and a list of the items seized. Ger-vato, who apparently knew nothing about the search, returned home a few minutes later. On July 15, 1971, a two count indictment was returned charging appellee with illegally manufacturing and possessing lysergic acid amide, in violation of the Federal Food and Drug Act. On November 29, 1971, appellee filed a pretrial motion to suppress the evidence uncovered by the March 24 search. This motion was sustained by the district court on March 1, 1972 on the ground that the known absence of appellee made the search unreasonable and therefore in violation of the Fourth Amendment. United States v. Gervato, 340 F.Supp. 454 (E.D.Pa.1972). Specifically, the district court said that “[a] man’s home should not be forcibly entered in his absence to serve a search warrant, absent some exigent circumstance which it is up to the Government to show, especially in a case such as this where the house was under surveillance and the agents knew before going to the door that no one was home.” Id. at 463. The government has appealed this decision pursuant to 18 U.S.C. § 3731. We reverse because we do not believe that the Fourth Amendment requires the occupant to be present before his home can be searched under- a valid search warrant and because we do not think that the present search was unreasonable. The Supreme Court has examined on many occasions the history and purposes of the Fourth Amendment. E. g., Warden v. Hayden, 387 U.S. 294, 301, 87 S.Ct. 1642, 18 L.Ed.2d 782 (1967); Stanford v. Texas, 379 U.S. 476, 481-485, 85 S.Ct. 506, 13 L.Ed.2d 431 (1965); Marcus v. Search Warrant, 367 U.S. 717, 724-729, 81 S.Ct. 1708, 6 L.Ed.2d 1178 (1961); Frank v. Maryland, 359 U.S. 360, 363-366, 79 S.Ct. 804, 3 L.Ed.2d 877 (1959); Boyd v. United States, 116 U.S. 616, 624-629, 6 S.Ct. 524, 29 L.Ed. 746 (1874). This history shows that the primary purpose of the Amendment was to put an end to the general warrants and writs of assistance under which officers of the Crown had been empowered to conduct general searches and seizures. James Otis denounced these writs as “ ‘the worst instrument of arbitrary power, the most destructive of English liberty, and the fundamental principles of law, that ever was found in an English law book’ since they placed ‘the liberty of every man in the hands of every petty officer.’ ” The historic occasion of that denunciation, at a famous 1761 debate in Boston, has been characterized as “perhaps the most prominent event which inaugurated the resistance of the colonies to the oppressions of the mother country. ‘Then and there,’ said John Adams, ‘then and there was the first scene of the first act of opposition to the arbitrary claims of Great Britain. Then and there the child Independence was born.’ ” Boyd v. United States, supra at 625, at 529 of 6 S.Ct. In order to understand the Founding Fathers’ perspective on writs of assistance, it is instructive to consider the history of the controversial general warrant in England. As Stanford v. Texas, supra at 482-483 of 379 U.S., at 510 of 85 S.Ct. points out: “What is significant to note is that the history is largely a history of conflict between the Crown and the press. It was in enforcing the laws licensing the publication of literature and, later, in prosecutions for seditious libel that general warrants were systematically used in the sixteenth, seventeenth, and eighteenth centuries. ... In later years warrants were sometimes more specific in content, but they typically authorized the arrest and search of the ¿remises of all persons connected with the publication of a particular libel, or the arrest and seizure of all the papers of a named person thought to be connected with a libel.” In the Colonies, the hated writs of assistance were also frequently used to search for evidence of crime or of illegally imported goods. A few years prior to the outbreak of the American Revolution, the use of general warrants to aid in prosecutions for seditious libel was judicially condemned in England in two landmark cases, Wilkes v. Wood, 19 How.St.Tr. 1153 (1763) and Entick v. Carrington, 19 How.St.Tr. 1029 (1765). In the former case, John Wilkes had boldly denounced the English government in issue No. 45 of the North Briton. By authority of a warrant issued by the Secretary of State, Wilkes was carried away, and his house was then searched and his papers indiscriminately seized. Wilkes sued and obtained a verdict of one thousand pounds against one of the perpetrators of the search and four thousand pounds against the Secretary of State. In his opinion, Lord Camden condemned the “general warrant, where no inventory is made of the things thus taken away, and where no offenders’ names are specified in the warrant, and therefore a discretionary power given to messengers to search wherever their suspicions may chance to fall.” 19 How.St.Tr. at 1167. However, while Lord Camden was obviously distraught at what he viewed as a “ridiculous warrant against the whole English nation,” there is no indication that he believed the warrant could not be executed in Wilkes’ absence. In Entick v. Carrington, supra, a warrant based on a charge of seditious libel issued for the arrest of Entick, the author of a publication called Monitor or British Freeholder, and for the seizure of all his papers. The King’s messengers executing the warrant ransacked Entick’s home for four hours and carted away great quantities of books and papers. In an opinion which the Supreme Court has recognized as a wellspring of the rights now protected by the Fourth Amendment, Lord Camden declared the general warrant for the seizure of papers contrary to the common law, despite its long history. “This power,” he said, “so assumed by the secretary of state is an execution upon all the party’s papers, in the first instance. His house is rifled; his most valuable secrets are taken out of his possession, before the paper for which he is charged is found to be criminal by any competent jurisdiction, and before he is convicted either of writing, publishing, or being concerned in the paper.” 19 How.St.Tr. at 1064. The district court in the present case placed great emphasis on one passage in Entick from which it concluded that the common law prohibited the execution of a search warrant if no one was on the premises. Upon examination of that passage in the context of the entire opinion, however, we do not believe that such a conclusion is justified. Lord Camden’s concern in both Wilkes and Entick was with the unrestricted discretion of those who executed the warrants and not with the presence or absence of either plaintiff. Consequently, after reviewing these two cases along with the other authorities cited by the district court, we do not think that the common law prohibited searches in the absence of the occupant at the time the Fourth Amendment was adopted. Entick and Wilkes, when considered with the Supreme Court eases already discussed, show that the search and seizure provision of the Fourth Amendment was primarily designed to protect against warrantless searches and seizures and those conducted under an indiscriminate general authority. There is no indication that the Founding Fathers were also concerned that the power to search should be dependent on the presence of the occupant. In light of this history, it is significant to note that neither the Supreme Court nor any court of appeals has ever hinted or suggested, despite many opportunities to do so, that a search warrant should be executed only in the presence of the possessor or occupant of the property searched. See, e. g., Stoner v. California, 376 U.S. 483, 84 S.Ct. 889, 11 L.Ed.2d 856 (1964); Chapman v. United States, 365 U.S. 610, 81 S.Ct. 776, 5 L.Ed.2d 828 (1961); Agnello v. United States, 269 U.S. 20, 46 S.Ct. 4, 70 L.Ed. 145 (1925); Spinelli v. United States, 382 F.2d 871 (8th Cir. 1971), rev’d on other grounds, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637 (1969); United States v. Ravich, 421 F.2d 1196 (2d Cir. 1970), cert. denied, 400 U.S. 834, 91 S.Ct. 69, 27 L.Ed.2d 66 (1970); United States v. Maroney, 339 F.2d 710 (3d Cir. 1965). In addition, Rule 41, F.R.Cr.P. 18 U.S.C., does not provide, among its mandatory requirements, that a search warrant should be executed only in the presence of the occupant. Since this Rule was promulgated by the Supreme Court, it appears likely that the Court did not consider the presence of the occupant to be a common law or constitutional requirement. Rule 41(d) provides in part that an inventory “shall be made in the presence of the applicant for the warrant and the person from whose possession or premises the property was taken, if they are present. . . .” (Emphasis added). This “if” phrase also suggests that the Court did not believe that the Fourth Amendment requires presence. Cf. United States v. Scolnick, 392 F.2d 320 (3d Cir. 1968), cert. denied, 392 U.S. 931, 88 S.Ct. 2283, 20 L.Ed.2d 1389 (1968). Parenthetically, we agree with the district court and appellee that 18 U.S.C. § 3109 has no bearing on the present case, either as an authorization justifying agent Glanz’s conduct or as an authority forbidding that conduct. United States v. Gervato, supra at 457, of 340 F.Supp. However, when the search is authorized as it was here, then the procedural requirements of § 3109, which are directed at avoiding breaches of the peace, must be followed. Those requirements were followed in this ease. Having decided that the Fourth Amendment does not prohibit per se searches conducted in the absence of the occupant, we now hold that the present search was reasonable under the circumstances. In order to obtain a search warrant today, the government must show that it has probable cause for its issuance, and the warrant must identify the property to be seized and name or describe the person or place to be searched. Rule 41(c), F.R.Cr.P. 18 U. S.C. This provides an individual with considerably more protection than did the general warrant of the sixteenth, seventeenth and eighteenth centuries which permitted unrestricted searches and seizures. Rule 41(d) also requires that a person be given an inventory of goods seized or that it be left at the place where the property was taken, something which was not necessary with the general warrant. Despite this, the district court indicated that a search warrant executed in the absence of the occupant constitutes an unreasonable search because there exists the possibility of a general search and “pilferage by officers of the law.” It is, of course, true that either or both of these abuses could occur. However, we agree with the government that the requirement for judicial supervision prior to issuance provides adequate protection against the general warrant. Rule 41(e), F.R.Cr.P. 18 U.S.C. With respect to pilferage, Rule 41(c) and 18 U.S.C. § 3105 restrict the execution of search warrants to certain civil officers of the United States. In addition, Rule 41(d) mandates that an inventory be made of items seized, and it requires that this inventory be made in the presence of the person from whose possession of premises the property was taken or in the presence of at least one credible person other than the applicant for the warrant. In addition to the above considerations, it is unlikely that the presence of the occupant at the beginning of a search would significantly reduce the possibility of pilferage or a general search. Frequently he would be placed under arrest, handcuffed, and sometimes removed from the premises before the search is completed. Even if this does not happen, when the executing party involves several officers, a number of areas can be searched at once making it impossible for the occupant to observe everything that happens. The district court has not suggested that these procedures are impermissible, but only states that the occupant must be present before a search can begin. This requirement will not avoid the possibility of pilferage or a general search, however, since in most instances these abuses could just as easily occur whether or not the occupant is present when the search commences. Consequently, for this reason as well as for those stated in the above paragraph, we reject the district court’s finding that the execution of a search warrant in the absence of the occupant significantly increases the likelihood of a general search or pilferage and is therefore unreasonable. The district court also indicated that a search begun in the absence of the occupant is unreasonable because of the possibility of unnecessary property damage in a broken lock and door. However, we do not believe that this alone is a sufficient detriment to make a search unreasonable where a warrant based on probable cause has been obtained. There is also a second issue in this case which must be discussed. A few days after the search, a BNDD agent told appellee’s attorney that he would like to interview appellee. The attorney agreed, and on April 2, 1971, appellee went to the Philadelphia Regional Office with his attorney. While there, he made an unsigned statement which the district court ordered suppressed as the fruit of an illegal search. Since we have found that the search in this case was constitutional, however, there is no reason to suppress this statement. For the foregoing reasons, the order of the district court sustaining the motion to suppress evidence will be vacated and the cause remanded for further consideration. . See Stanford v. Texas, supra at 484 of 379 U.S., 85 S.Ct. 506, and Boyd v. United States, supra at 626-627 of 116 U.S., 6 S.Ct. 524. . The district court refers to a passage in a different version of Entick v. Carring-ton, 95 Eng.Rep.R. 807, 817 (1765). This passage reads: “The warrant in our case was an execution in the first instance, without any previous summons, examination, hearing the plaintiff, or proof that he was the author of the supposed libels; a power claimed by no other magistrate whatever (Scroggs C. J. always excepted) ; it was left to the discretion of these defendants to execute the warrant in the absence or presence of the plaintiff, when he might have no witness present to see what they did; for they were to seize all papers, bank bills, or any other valuable papers they might take away if they were so disposed; there might be nobody to detect them.” . If anything, the Supreme Court has indicated in dictum that a search is permissible in the absence of the occupant. Alderman v. United States, 394 U.S. 165, 178, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969). See also Blakey, Aspects of the Evidence Gathering Process in Organized Crime Cases: A Preliminary Analysis, in The President’s Commission on Law Enforcement and Administration of Justice, Task Force Report: Organized Crime 80, 97 (1967). . This position is supported by the American Law Institute Official Draft No. 1, Model Code of Pre-Arraignment Procedure (July 15, 1972), Part II, Search and Seizure, §§ 220.3(4) and (6), which provide : “(4) Service of Warrant. In the' course of any search or seizure pursuant to the warrant, the executing officer shall read and give a copy of the warrant to the person to be searched, or the person in apparent control of the premises to be searched, as the case may be. The copy shall be read and furnished before undertaking the search or seizure unless the officer has reasonable cause to believe that such action would endanger the successful execution of the warrant with all practicable safety, in which case it shall be read and furnished as soon as is practicable. If the premises are unoccupied by anyone in apparent and responsible control, the officer shall leave a copy of the warrant suitably affixed to the premises. (Emphasis added.) “(6) List of Things Seized. Upon completion of the search, the officer shall make a list of the things seized, and shall deliver a receipt embodying the list to the person from whose possession they are taken, or the person in apparent control of the premises from which they are taken, as the ease may be. The list shall be prepared in the presence of the person to whom the receipt is to be delivered. If the premises are unoccupied by anyone in apparent and responsible control, the executing officer shall, if practicable, secure the presence of one or more apparently credible persons to witness the preparation of the list, and shall leave the receipt suitably affixed to the premises." (Emphasis added.) . 18 U.S.C. § 3109 provides: “The officer may break open any outer or inner door or window 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.” . See Miller v. United States, 357 U.S. 301, 313, 78 S.Ct. 1190, 2 L.Ed.2d 1332 (1958); see also Wong Sun v. United States, 371 U.S. 474, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963). . Rule 41 (c) provides in pertinent part: “The warrant shall be directed to a civil officer of the United States authorized to enforce or assist in enforcing any law thereof or to a person so authorized by the President of the United States.” 18 U.S.C. § 3105 provides: “A search warrant may in all cases be served by any of the officers mentioned in its direction or by an officer authorized by law to serve such warrant, but by no other person, except in aid of the officer on his requiring it, he being present and acting in its execution.”

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Donald DAVIS, Jr., a minor by His mother and next friend, Mrs. Sadie Davis, et al., Plaintiffs-Appellees, v. SCHOOL DISTRICT OF the CITY OF PONTIAC, INC., et al., Defendants-Appellants. No. 71-1868. United States Court of Appeals, Sixth Circuit. Argued Oct. 10, 1972. Decided Feb. 13, 1973. Kent,' Circuit Judge, dissented and filed opinion. Robert E. Manley, Cincinnati, Ohio, on brief, for appellants; Dudley & Patterson by Harold W. Dudley and William R. Lightbody, Pontiac, Mich., of counsel. William Waterman, Elbert L. Hatch-ett, Pontiac, Mich., on brief, for appel-lees. Before EDWARDS, McCREE, and KENT, Circuit Judges. PER CURIAM. Defendant School District appeals from an order requiring it to create a position for a third Assistant Superintendent and to hire a Negro to fill the position. Appellant contends that this order interferes with the pedagogical discretion of its officials and that the district does not require a third Assistant Superintendent and, indeed, cannot afford to hire one. The order appealed from is supplementary to a comprehensive desegregation order entered by the District Court upon a finding of purposeful segregation of the school system. See Davis v. School District of City of Pontiac, 309 F.Supp. 734 (E.D.Mich.1970), aff’d, 443 F.2d 573 (6th Cir. 1971), cert. denied, 404 U.S. 913, 92 S.Ct. 233, 30 L.Ed.2d 186 (1971). In affirming this earlier order, we remanded the case to the District Court for continuing supervision of the desegregation of the system. In July 1971, the District Court conducted a hearing on motions for modification of the desegregation plan initially approved, and at the conclusion of that hearing, the court entered its order containing the provision attacked in this appeal. It is clear that, when there has been segregation produced by government action, the power of district courts to shape appropriate remedies is broad, and if the creation of a particular administrative position appears to a district court to be useful in carrying out the constitutional mandate to desegregate a school system, appellate courts should not interfere with this discretionary exercise. Accordingly, because the order in question in this appeal merely recited that the position was to be created by defendant and filled by a black person, we would have ordinarily assumed that it was made in the exercise of the discretion and for the purpose referred to above. However, in colloquy, the transcription of which was furnished the court, the District Judge gave some indication that he entered this part of the supplemental order either because he believed that the board had promised to make such an appointment earlier and had not kept its word with him or because some particular racial balance at the administrative level was desirable for reasons other than to accomplish the desegregation of the school system. Because we are unable to determine the basis for the entry of the court’s order regarding the creation of this administrative position, we vacate this provision of the order to permit him to consider whether the creation of such a position and its filling by a black person in the light of current conditions within the school system is indicated to dismantle the unconstitutional condition that he found to exist. Vacated and remanded for proceedings not inconsistent with this opinion. No costs will be allowed because a public question is involved. KENT, Circuit Judge (dissenting). I find myself unable to join in the opinion of the majority. I recognize that the power of District Courts to shape appropriate remedies to eliminate school segregation deliberately imposed by Government action is broad, and if the record demonstrates a need for a particular administrative position to assist in carrying out the constitutional mandate to desegregate such school system, then the appellate court should not interfere if the trial judge in the exercise of his discretion orders the creation of such an administrative position. However, I cannot agree that an appellate court should ever “assume” that any portion of a broad desegregation order was necessarily made by the trial judge in the exercise of discretion and for the purpose of eliminating unconstitutional segregation of the races within the school without appropriate findings of fact and conclusions of law to support the exercise of such broad discretion. The record in this case does not reflect any facts which would justify the conclusion that the composition of the administrative staff at the level concerned resulted from any unconstitutional segregation or that the desegregation of such staff or the creation of any new position on such staff would make any substantial contribution to the desegregation of the Pontiac schools. In fact, the undisputed record demonstrates that the school board determined a third assistant superintendent position to be unnecessary, particularly in the light of the financial straits in which the school district found itself. The district judge not only did not find any constitutional violation on the part of the school board because of its failure to have a black assistant superintendent, neither did he find that the creation of such a position was necessary to accomplish the desegregation of the schools. Rather, as stated by the district judge, prior to the entry of the order from which this appeal is taken, as the basis for the entry of the order, “and I don’t see how you can have integration at every other level and still not have it at the assistant superintendent level. I think it is good for the black children out there in terms of image. I think it is good for the white children out in Pontiac to see a black assistant superintendent of schools. I think it is good for people at the policy level to have a black person in there, sitting in, knowing precisely what is happening in that school system. I think it is healthy for the entire community.” (Supp.App., pp. 136-7). (Emphasis added). As previously stated, the determination of the appropriate remedies to eliminate past wrongs is necessarily broad, but in the absence of a finding that specific steps are necessary to accomplish the elimination of such wrongs there is no authority in a court of equity to impose upon parties to the action remedies which the trial judge may think would be good policy. Policy is for the school authorities, except as and unless such policy creates a condition which offends the Constitution. As pointed out in Swann v. Board of Education, 402 U.S. 1, 15-16, 91 S.Ct. 1267, 1276, 28 L.Ed.2d 554 (1971): “However, a school desegregation case does not differ fundamentally from other eases involving the framing of equitable remedies to repair the denial of a constitutional right. The task is to correct, by a balancing of the individual and collective interests, the condition that offends the Constitution. “In seeking to define even in broad and general terms how far this remedial power extends it is important to remember that judicial powers may be exercised only on the basis of a constitutional violation. Remedial judicial authority does not put judges automatically in the shoes of school authorities whose powers are plenary. Judicial authority enters only when local authority defaults. “School authorities are traditionally charged with broad power to formulate and implement educational policy and might well conclude, for example, that in order to prepare students to live in a pluralistic society each school should have a prescribed ratio of Negro to white students reflecting the proportion for the district as a whole. To do this as an educational policy is within the broad discretionary powers of school authorities; absent a finding of a constitutional violation,' however, that would not be within the authority of a federal court. As with any equity case, the nature of the violation determines the scope, of the remedy. In default by the school authorities of their obligation to proffer acceptable remedies, a district court has broad power to fashion a remedy that will assure a unitary school system.” At the time of the oral argument in this court counsel informed the court that one of the [two] assistant superintendents had resigned and that there was a vacancy at this level of the administrative staff of the School District of the City of Pontiac. It may be that on remand, as ordered by the majority, the school board will consider the appointment of a black assistant superintendent not because the district judge thinks it would be good for the black children but rather because an honest, sincere effort to locate a competent black person qualified to be assistant superintendent of the Pontiac schools would clearly demonstrate that the defendant school board recognizes its obligation to desegregate the Pontiac schools and staff at all levels. On this record, however, absent findings by the district judge that the failure to create a position for a third assistant superintendent to be filled by a black person was necessary to complete the elimination of segregation within the Pontiac schools, I cannot concur in the opinion of the majority. I would reverse.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

BASTIAN-BLESSING, DIVISION OF GOLCONDA CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. No. 72-1456. United States Court of Appeals, Sixth Circuit. Feb. 21, 1973. Paul F. Gleeson, Chicago, Ill., Arthur B. Smith, Jr., Van H. Yiot, Chicago, Ill., on brief; Vedder, Price, Kaufman & Kammholz, Chicago, Ill., of counsel, for petitioner-appellant. Allison W. Brown, Jr., N.L.R.B., Mar-eel Mallet-Prevost, Asst. General Counsel, Steven C. Kahn, Atty., N.L.R.B., Washington, D. C., Jerome H. Brooks, Director, Region 7, N.L.R.B., Detroit, Mich., on brief, for respondent-appellee. Before EDWARDS and CELE-BREZZE, Circuit Judges, and HAST-IE, Senior Circuit Judge. Honorable William H. Hastie, Senior Judge, U. S. Court of Appeals for the Third Circuit sitting by designation. EDWARDS, Circuit Judge. Bastian-Blessing petitions to set aside and the Board seeks enforcement of an order of the National Labor Relations Board finding the employer guilty of 8(a)(5) and 8(a)(1) violations of the National Labor Relations Act, 29 U.S.C. § 158(a)(5) and (1) (1970), by unilaterally terminating an employee health insurance plan which had previously been in force through insurance with Aetna Life Insurance Company. The employer, purporting to maintain the same benefits, undertook self-insurance. Subsequent to the termination of the Aetna coverage, it informed the union as to what it had done and discussed the reasons for the change, but declined to go back to the Aetna insurance contract when requested to do so. The Board found that the Aetna termination materially affected mandatory subjects of bargaining in relation to health insurance in that two material changes were made in benefits under the company self-insurance program and in that, in addition, the enforceability, administration and funding of the plan were affected. The Board’s order required Bastian-Blessing to restore the status quo by reinstating the contract with Aetna. The Board Decision and Order of December 16, 1971, is reported at 194 N.L.R.B. 95 (1971), and its Supplemental Decision of March 30, 1972, is reported at 195 N.L.R.B. 167 (1972). The material facts of this case do not appear to this court to be in dispute. Petitioner does dispute the inferences which the Trial Examiner and the Board drew from those facts, along with the legal conclusions drawn therefrom. Specifically, Bastian-Blessing claims that after termination of the Aetna insurance contract, it engaged in good faith negotiations with the union concerning its health insurance program, which served to satisfy the bargaining obligation under the Act. It also claims that the Board was without authority to order it to reinstate the insurance contract between it and Aetna Life, since it claims that the identity of the insurance carrier is not a mandatory subject for bargaining. Petitioner, Bastian-Blessing, is a division of a conglomerate, Golconda Corporation, which merged with Astro Controls, Inc., the previous parent corporation of Bastian-Blessing, while this controversy was going on. Local 893 of the Brotherhood of Carpenters has been bargaining agent since 1953 only for 165 employees of the Bastian-Blessing Division. Aetna Life Insurance Company had been the Bastian-Blessing group insurance carrier since World War II. It issued a group insurance policy containing the benefits negotiated between Local 893 and Bastian-Blessing in 1959. This policy was continued in effect, with some changes resulting from collective bargaining, up until August 1, 1970, when the company canceled the contract unilaterally, without prior notice to the union. The group health insurance plan was a contributory plan. Each employee paid $1.00 per week toward its cost and the employee contributions represented approximately 40% of the premium cost, with the employer paying the rest. The Trial Examiner found a relationship between increasing benefit costs and the sudden termination of the Aetna contract: In the fiscal year ending April 20, 1967 (as reported on Form D-2 to the Department of Labor), the total premiums paid Aetna (for over 1,500 employees) amounted to $395,318. Aetna paid out benefits, and put in reserves, a total of $312,696, and refunded over $56,000 to the Company. By fiscal 1969, with somewhat fewer employees, the total premiums had increased almost $100,000, to $493,372, and the total benefit charges had increased over $229,000 (73 percent) to $541,852. Instead of a cash rebate as in 1967, there was a deficit in 1969 of $92,883. (The 1969 Form D-2 shows that Aet-na retained $30,053 for expenses, as compared to fiscal 1968 expenses of $28,765 — an increase of less than $1,500. In fiscal 1967, which included a period of time when the Company’s own employees were processing claims for Aetna, the Aetna expenses were $15,559. The amount of commissions decreased from $3,756 in 1967 to $2,625 in 1969, whereas taxes increased from $6,776 to $11,725.) Despite the increased costs, the Union negotiated further health benefits in its new 3-year collective-bargaining agreement, effective from December 1, 1969, through November 30, 1972. Nothing was said in the negotiatioñs about canceling the Aetna policy or changing carriers. * * * Thus, I find that although the reference to the old Aetna employee booklet was' deleted, the Company and the Union still bargained for a continuation of the Aetna plan. (Following these 1969 negotiations, the Company contracted with Aetna to amend Group Policy GC-40,636 to provide the increased benefits.) The Trial Examiner and the Board found also that when Bastian-Blessing instituted its self-insurance plan as described in its “Company Insurance Certificate,” it omitted entirely two significant employee benefits: a conversion privilege without evidence of insurability, and the certainty of coverage of new-born babies under the $20,000 major medical benefit. The Board further found that Bas-tain-Blessing’s cancellation of the Aetna contract deprived its employees of enforceability of the prior master contract and of Aetna’s administration of that contract: In the negotiations for the current 1969-1972 collective-bargaining agreement, as previously found, the Company and the Union bargained for a continuation of the Aetna plan, with various increased benefits which the Company thereupon contracted with Aetna to provide. Under this union-negotiated plan, not only was the payment of the employees’ health benefits ensured in writing by the 56-page Aetna Group Policy GC-40,636 (the master contract), but also the interpretation and application of the group policy was placed in the hands of the well-known group insurance carrier, Aetna. The Company’s unilateral and irrevocable August 1 cancellation of the Aetna group policy, and the January 7 issuance of its “Company Insurance Certificate,” deprived the employees of both the protection of the enforceable master contract, and (as discussed later) Aetna’s interpretation and application of it. The January 7 “Certificate” did not contain all the pertinent provisions governing the payment of benefits. It was a modified copy of the most recent Aetna “Group Insurance Certificate” (employee booklet), and was thus only a “summary of the essential features” of the previous Aetna insurance coverage. It failed to set out such provisions in the Aetna master contract as (a) what employees are eligible (permitting coverage of full-time employees working temporarily on a part-time basis), (b) eligibility after 3 months of continuous service, (c) requirement of written request, etc., for coverage of dependents, (d) effective date for dependent’s coverage if application is made within 31 days, and if made thereafter, (e) the specific amount of nonoccupational disability weekly benefit ($52, as set out in bargaining agreement), (f) method of computing “average weekly earnings” for determining 70 percent limitation on weekly benefit, (g) exclusions and limitations applied in the event a family member is disabled when the maximum benefit is increased, (h) no benefits if prohibited in jurisdiction of residence, and (i) employer shall not “discriminate unfairly between individuals in similar situations” in administration of the provisions. In many places where the January 7 Certificate is copied from the Aetna employee booklet, the Company has substituted the words, “the Plan,” for the words, “the group policy.” For example, on the cover page of the Certificate, the sentence from the Aetna employee booklet containing the words, “certain terms of the Group Policy,” was changed to read, “The kinds of coverage and certain terms of the Plan applicable thereto are described on this and the following pages of this Certificate.” (Emphasis supplied.) In other places in the Certificate, there still remain repeated references to “the group policy.” Thus former references in the Aetna “employee [booklet”] sic to “the group policy” now appear in the January 7 Certificate in such phrases as: “subject to the terms of the Plan,” “payable under the Plan,” “subject to the terms of the group policy,” “if included in the Plan,” “benefits provided under the Plan,” “coverage under the Plan,” “subject to the limits provided in the Plan,” “Employee’s insurance under the group policy,” and “coverage under the group policy.” These references in the Certificate to “the Plan” and “the group policy” are evidently made (as were the references in the Aetna employee booklet) to the detailed provisions in the now-canceled Aetna Group Policy GC-40,636. Therefore the Certificate issued on January 7 is not a self-contained document setting out all the provisions of the self-insured health program. Furthermore, there appears not to be in existence any such document, which would be enforceable as the Aetna group policy was. Finally, the Board noted that Bas-tian-Blessing’s witnesses left unanswered questions concerning funding of the self-insurance program. The Board considered this uncertainty over funding an adverse impact on the employees’ previously-negotiated benefits. HOLDING We believe that the history of collective bargaining between these parties, including the negotiations which resulted in the level of benefits under the insurance plan which was in effect prior to August 1, 1970, indicates clearly that there was substantial evidence on this record taken as a whole to support the finding of the Board as described in its Supplemental Decision of March 30, 1972: In our Decision and Order herein, we found that the Aetna insurance plan for active employees was a provision of the contract between the Union and Respondent, and we therefore held that Respondent’s mid-term unilateral change to a self-insured plan for its active employees was a violation of Section 8(a)(5). Benefits for retired employees were not involved. Health insurance benefits clearly represent mandatory subjects for bargaining. NLRB v. Scam Instrument Corp., 394 F.2d 884 (7th Cir. 1968); McLean v. NLRB, 333 F.2d 84 (6th Cir. 1964); Inland Steel Co. v. N.L.R.B., 170 F.2d 247 (7th Cir.), cert. denied, 336 U.S. 960, 69 S.Ct. 887, 93 L.Ed. 1112 (1948). Where, as here, these benefits have been determined by an existing collective bargaining agreement, a unilateral change violates the express language of both Section 8(d) and Section 8(a)(5). We believe the controlling case on this issue, is NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), wherein the Supreme Court said: The duty “to bargain collectively” enjoined by § 8(a)(5) is defined by § 8(d) as the duty to “meet and confer in good faith with respect to wages, hours, and other terms and conditions of employment.” Clearly, the duty thus defined may be violated without a general failure of subjective good faith; for there is no occasion to consider the issue of good faith if a party has refused even to negotiate in fact — “to meet . . . and confer” —about any of the mandatory subjects. A refusal to negotiate in fact as to any subject which is within § 8(d), and about which the union seeks to negotiate, violates § 8(a)(5) though the employer has every desire to reach agreement with the union upon an over-all collective agreement and earnestly and in all good faith bargains to that end. We hold that an employer’s unilateral change in conditions of employment under negotiation is similarly a violation of § 8(a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) much as does a flat refusal. * * * Unilateral action by an employer without prior discussion with the union does amount to a refusal to negotiate about the affected conditions of employment under negotiation, and must of necessity obstruct bargaining, contrary to the congressional policy. It will often disclose an unwillingness to agree with the union. It will rarely be justified by any reason of substance. It follows that the Board may hold such unilateral action to be an unfair labor practice in violation of § 8(a)(5), without also finding the employer guilty of over-all subjective bad faith. NLRB v. Katz, supra at 742-743, 747, 82 S.Ct. at 1111, 1114. (Footnotes omitted.) In McLean v. N.L.R.B., 333 F.2d 84 (6th Cir. 1964), this court relied upon the Katz case in upholding a finding of a Section 8(a)(5) violation by an employer’s unilateral change of a health insurance plan: In our opinion, Katz compels a finding of an § 8(a)(5) violation here. Blue Cross insurance was an alternative plan, as opposed to the union’s health insurance plan, which should have been negotiated with it. This is part of the statutory duty to bargain collectively. McLean v. NLRB, supra at 87. We do not think that BastianBlessing’s meetings with the union after it had, without notice, effected the unilateral changes described above served to excuse its violations of its duty to bargain. This record contains substantial evidence to support the Trial Examiner and the Board’s rejection of the petitioner’s good faith argument based on subsequent bargaining and over-all conduct. In addition, there is clearly no union acquiescence in or failure to protest the unilaterally wrought changes here as is found in the cases relied upon by petitioner. Cf. Georgia Pacific Corporation, 150 N.L.R.B. 885 (1965); Hartman Luggage Co, 145 N.L.R.B. 1572 (1964); NLRB v. Cone Mills Corp., 373 F.2d 595 (4th Cir. 1967). To this court, however, the most difficult question pertains to the explicit order of the Board to reinstate “the Aetna Life Insurance Company group health insurance which was terminated August 1, 1970.” Both parties seem to interpret this order as requiring not just the identical contract with its identical benefits, administration, and funding, but the identical company as well. We have found, however, no case law which squarely supports the proposition that the specific insurance carrier for a group health plan is a mandatory subject for bargaining. This identical issue was the subject of a motion for rehearing of the instant case before the NLRB after the Supreme Court decided Allied Chemical Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971). The Board analyzed petitioner’s argument relying on Chemical Workers as follows: In Pittsburgh Plate Glass, the Supreme Court held that retired employees are not “employees” within the meaning of the Act, and are not included in the “bargaining unit,” and therefore that the employee group health insurance plan negotiated by the Company and the Union was only a permissive and not a mandatory subject for bargaining with respect to the Company’s retired employees. For these reasons, the Court concluded that the Company’s unilateral midterm modification “ . . . of a permissive term such as retirees’ benefits . . . ” did not violate the Act. On the other hand, the Court affirmed well established prior holdings of the Board and the Courts that “ . . . mandatory subjects of collective bargaining include pension and insurance benefits for active employees, and an employer’s mid-term unilateral modification of such benefits constitutes an unfair labor practice.” In our Decision and Order herein, we found that the Aetna insurance plan for active employees was a provision of the contract between the Union and Respondent, and we therefore held that Respondent’s mid-term unilateral change to a self-insured plan for its active employees was a violation of Section 8(a)(5). Benefits for retired employees were not involved. It may be that, as respondent attempts to demonstrate by analogy, benefit levels are in some circumstances severable from their source of “brand name.” We need not decide that broad question here. In our previous decision in this case, we found that Respondent’s change from Aetna involved a substantive loss, at least in terms of Aetna’s administration and funding. Thus, under the facts of this case, the identity of the carrier was a mandatory subject of bargaining, and the benefit to be restored is a single “ball of wax” — the preexisting Aetna plan. (Footnote omitted.) We have sought to find a way to separate the carrier from the benefits in this case, and we have failed. The peculiar terms of the bargaining contract here obviously incorporate by reference or necessary implication important sections of the Aetna contract. The history of this bargaining relationship shows that bargaining on health insurance historically was related to the Aetna contract. The employees, by terms of the labor-management contract, were made major contributors to the costs of the Aetna contract. Under these facts, the Board’s remedy that the benefits be restored by restoring “the preexisting Aetna plan” as a single “ball of wax” appears justified. We emphasize that the conclusion reached herein is governed by the facts of this case and is not to be interpreted as a ruling by this Court that the naming of an insurance carrier for an employee group benefit plan, in the absence of other considerations, is a mandatory subject for bargaining. Enforcement is granted. . Local 893, United Brotherhood of Carpenters & Joiners of America, AFL-CIO.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellee, v. John MACKEY, Appellant. UNITED STATES of America, Appellee, v. James KING, Appellant. Nos. 72-1749, 72-1925. United States Court of Appeals, Fourth Circuit. Feb. 26, 1973. Certiorari Denied June 11, 1973. See 93 S.Ct. 2782. George Beall, and Paul M. Rosenberg, Baltimore, Md., on brief for appellees. Robert B. Bamhouse, and Jonathan A. Azrael, Baltimore, Md., for appellants. Before BOREMAN, Senior Circuit Judge, WINTER and CRAVEN, Circuit Judges. PER CURIAM: John Mackey and James King appeal from their convictions by a jury, on pleas of not guilty, of robbery of a federally insured federal savings and loan association by intimidation, larceny from said association and assault committed during the commission of the robbery, in violation of 18 U.S.C. § 2113(a), (b), and (d), respectively. They complain that (1) their constitutional rights were denied when the Government showed photographs to certain witnesses without the attendance of counsel; (2) the trial court denied their motion to compel a preliminary hearing; (3) sentences were imposed on all three counts of the indictment; (4) there were no blacks on the jury which convicted them; (5) a prosecution witness was permitted to testify as to his reasons for not attempting to prevent the robbers from taking the money; and (6) the evidence was insufficient to support their convictions. Except as to (3) above, we find no merit in these assignments of error and therefore affirm the judgments of conviction and remand the case for imposition of a single sentence. Mackey and King were charged with being two of four persons involved in the armed robbery on November 5, 1971, of the National Permanent Federal Savings and Loan Association in Langley Park, Maryland. They were arrested in the vicinity of the loan association’s parking lot within minutes of the robbery and at that time each was carrying a pillowcase full of money. The serial numbers of some of the stolen currency had been prerecorded, and the money recovered from one of the pillowcases was shown to include this “bait money.” The loan association was equipped with movie cameras which operated during the robbery. None of the perpetrators wore masks. The developed film and sets of photographic prints were subsequently introduced into evidence. Certain of these prints were also shown to government witnesses prior to trial. It is this showing which Mackey and King allege violated their constitutional rights. It is not disputed that defense counsel were not present when these prints were shown to the prosecution witnesses. Mackey and King argue that the rule of United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967) requiring the presence of counsel at post-indictment lineups, should be extended to include postindictment photographic identification procedures. This precise issue was argued before the Supreme Court on January 10, 1973, in United States v. Ash, 149 U.S.App.D.C. 1, 461 F.2d 92 (1972), cert. granted, 407 U.S. 909, 92 S.Ct. 2436, 32 L.Ed.2d 682. But that issue is not pertinent in the instant case since the use of photographs here did not result in identification. The pictures were not shown to the witnesses in an attempt to have them identify someone from a number of choices. Rather, pictures of the robbery itself, depicting scenes which the witnesses had actually observed, were used to clarify, explain and demonstrate the events as they occurred, and to refresh the witnesses’ recollections thereof. There was no possibility of impermissibly suggestive procedures being used to influence any identifications by the witnesses, for they were not making identifications. Therefore no right to counsel existed during this procedure. Cf. United States v. Hines, 147 U.S.App.D.C. 249, 455 F.2d 1317 (1971), cert. denied, 406 U.S. 975, 92 S.Ct. 2427, 32 L.Ed.2d 675 (1972); United States v. Ware, 147 U.S.App.D.C. 249, 455 F.2d 1317 (1971), cert. denied, 406 U.S. 969, 92 S.Ct. 2427, 32 L.Ed.2d 669 (1972) (no right to counsel when pictures of a lineup, at which counsel was present, were used only to refresh witnesses’ memories.) Mackey and King have failed to advance any arguments which persuade us to reconsider our long-standing rule that the return of an indictment by the grand jury eliminates the requirement of holding a preliminary hearing. The purpose of both is to insure the existence of probable cause before an accused is brought to trial. That purpose is fully effectuated by either. United States v. Chase, 372 F.2d 453 (4 Cir. 1957), cert. denied, 387 U.S. 907, 87 S.Ct. 1688, 18 L.Ed.2d 626; Barber v. United States, 142 F.2d 805 (4 Cir. 1944), cert. denied, 322 U.S. 741, 64 S.Ct. 1054, 88 L.Ed. 1574. Mackey and King, both black, claim that their constitutional rights were violated since there were no blacks on the petit jury. It is true, of course, that the Government may not purposefully or deliberately deny-to Negroes participation as jurors in the administration of justice due to racial prejudice and discrimination. Alexander v. Louisiana, 405 U.S. 625, 92 S.Ct. 1221, 31 L.Ed.2d 536 (1972); Swain v. Alabama, 380 U.S. 202, 85 S.Ct. 824, 13 L.Ed.2d 759 (1965). However, the mere fact that a defendant in a particular case is tried by an all-white jury is not sufficient to establish a denial of his constitutional rights. Swain v. Alabama, supra; United States v. Canty, 422 F.2d 358 (4 Cir. 1970). No fact tending to show racial discrimination other than the absence of blacks on the jury has been alleged or shown. Mackey and King-are correct in their claim that the sentences on two counts of the three-count indictment under 18 U.S.C. § 2113 must be vacated, since all counts stem from the same oc-, currence. The case is therefore remanded to the district court for vacating the sentences on two counts once the judgments of conviction have become final. United States v. Spears, 442 F.2d 424 (4 Cir. 1971). We have carefully considered the additional claims advanced by Mackey and King and have found them to be without merit. Affirmed and remanded. . 41 U.S.L.W. 3335 (Jan. 16, 1973).

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2024-08-24T03:29:51.129235

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UNITED STATES of America, Plaintiff-Appellant, v. Arnold F. HABIG and Jerome M. Schroering, Defendants-Appellees. No. 71-1654. United States Court of Appeals, Seventh Circuit. Argued Sept. 14, 1972. Decided Jan. 24, 1973. Certiorari Denied May 7, 1973. See 93 S.Ct. 2145. Stanley B. Miller, U. S. Atty., Indianapolis, Ind., Fred B. Ugast, Tax Division, John P. Burke, Atty., U. S. Department of Justice, Washington, D. C., for plaintiff-appellant. Fred P. Bamberger, Evansville, Ind.; John W. Houghton, Indianapolis, Ind., for defendants-appellees. Before SWYGERT, Chief Judge, and KILEY and FAIRCHILD, Circuit Judges. SWYGERT, Chief Judge. This appeal is from an order by the district court suppressing the use of certain evidence in a criminal tax evasion prosecution. The evidence was obtained by Government agents during the prein-dictment investigation. Entered pursuant to a motion under Fed.R.Crim.P. 41(e), the order followed an evidentiary hearing and was based on findings of fact and conclusions of law made by the district judge. The hearing was conducted in conformity with the remand ordered by this court in an earlier appeal. United States v. Habig, 413. F.2d 1108 (7th Cir., 1969). The issues in this appeal differ materially from those presented when the case was before us initially. The Government now contends that the decision in United States v. Dickerson, 413 F.2d 1111 (7th Cir., 1969), does not control the disposition of the issues here despite its earlier concession to the contrary. This shift of position requires that we first decide a corollary issue: whether the “law of the case” doctrine precludes our resolution of the main issue. A separate question relates to whether any fourth amendment violations occurred during the Government’s investigation which would require suppression of the questioned evidence. It was not necessary for us to reach this last issue in the earlier appeal because we were of the view that an application of the Dickerson rule was sufficient to resolve the question. Briefly, the relevant facts developed at the hearing are as follows. On February 15, 1963 Charles E. Lawrence, an agent of the Internal Revenue Service, was assigned the routine civil audit of a consolidated income tax return filed by the Jasper Corporation for the year ending June 30, 1961. The consolidated return covered eleven corporations, ten of them subsidiaries of the Jasper company. The agent was also assigned the civil audit of the separate tax returns of three of the subsidiary companies for the year ending June 30, 1960. During its progress, the audit was expanded to include other fiscal years. On the recommendation of a firm of independent certified public accountants which had prepared the returns, Seid-man & Seidman, the agent in February 1963 visited Jerome M. Schroering, the comptroller of the Jasper company and each of its subsidiaries. After identifying himself and stating his assignment, Lawrence secured Sehroering’s cooperation for an examination of the records of Jasper and its subsidiaries at their respective offices. Lawrence spent from March to July of 1963 examining the records of Jasper and four subsidiary companies. As a result of his examination, Lawrence discovered certain discrepancies which led to his belief that a tax fraud had been perpetrated through records of fictitious intercompany sales of lumber. Lawrence thereupon submitted a referral report “for potential fraud cases” to his group supervisor, and at the end of March, 1964 the ease was accepted by the Intelligence Division of the_ Internal Revenue Service for a full-scale investigation. Special Agent Russell C. Hicks was assigned to conduct the investigation with the aid of agent Lawrence. The district judge found that the investigation “from its inception was upon Arnold F. Habig and Jerome M. Schroering.” Habig was the largest single stockholder of the corporations and their chief executive officer. After Hicks’ assignment, Lawrence at Hicks’ direction obtained and examined numerous corporate records. On September 21, 1964 Hicks and Lawrence met by appointment with Schroering at the Jasper corporation offices. Hicks, upon being introduced to Schroering, stated: “I am a Special Agent with the Intelligence Division; Mr. Kelly [of Seidman] knows what my job is. I am here to determine if there is [sic], any criminal aspects involved in the case.” Hicks then requested and received permission from Schroering to examine additional books and records of the corporations, which the agents subsequently spent considerable time examining. They also copied some of the documents being examined. The investigation continued into 1965, when Hicks requested that Schroering provide him with additional documents. Schroering complied, and had the assembled records delivered to the offices of the Evansville company where Hicks and Lawrence examined them. During September 1965 the two agents met with Schroering and Habig in the offices of the Intelligence Division of the IRS. At the meeting, which was Habig’s first personal contact with either of the agents, both Habig and Schroering were interrogated regarding the affairs under investigation. The district court found that no warnings of constitutional rights were given nor was either defendant advised that he was the subject of a criminal investigation. Subsequently, between November 1965 and February 1966, the agents copied numerous documents and records of the corporations. The district court found that this copying was undertaken in a secretive manner and without the consent of either Sehroering or Habig. In August an indictment was returned against these two defendants. The district judge found that the agents had acted improperly in their conduct of the investigation after January, 1964: The plaintiff’s agents after February 11, 1964 had the duty upon the first contact with defendants to advise them of their constitutional rights and advise them that they were the subject of a criminal investigation. The statements, information and leads to evidence obtained by the plaintiff’s agents from the defendants after February 11, 1964 were illegally obtained by reason of the failure of the plaintiff’s agents to fulfill such duty as the criminal investigation was focused on the two (2) defendants from and after February 11, 1964. Moreover, the district judge inferred “that the corporations and the defendants would not have consented to the criminal investigation had they known of the deceit practiced by plaintiff’s agents prior to September 21, 1964,” in failing to warn the defendants of the changed nature of the ongoing investigation. I The “law of the ease” doctrine comes typically to bear when an appellate court has before it for a second time a controversy in which it has previously made a ruling of law. Strictly applied, the doctrine serves to bar an attack on the prior ruling by either party to the suit, much like the doctrine of res judicata. This court, however, has not adhered to a rigid application of the doctrine. Many years ago, Judge Evans wrote: [T]he view that appeals to us, and which we adopt, merely recognizes the law of the case as one of public policy and private peace, and one to be followed generally, and departed from rarely. It is, however, not an inexorable rule, and should not be applied where the law as announced is clearly erroneous; and establishes a practice which is contrary to the best interests of society, and works a manifest injustice in the particular case. Luminous Unit Co. v. Freeman-Sweet Co., 3 F.2d 577, 580 (7th Cir., 1924). See also Kaku Nagano v. Brownell, 212 F.2d 262 (7th Cir., 1954); Bowles v. Good Luck Glove Co., 150 F.2d 853 (7th Cir.), cert. denied, 326 U.S. 794, 66 S.Ct. 484, 90 L.Ed. 483 (1945); LeBold v. Inland Steel Co., 136 F.2d 876 (7th Cir.), cert. denied, 320 U.S. 787, 64 S.Ct. 196, 88 L.Ed. 473 (1943). This view is peculiarly appropriate here. The Government in the first appeal conceded that the rule we would fashion in Dickerson should apply to the instant prosecution. The concession was improvident and led us to imply that the rule announced in Dickerson controlled this case. As we shall demonstrate, that implication was erroneous. II In Dickerson we held that “Miranda warnings must be given to the taxpayer by either the revenue agent or the special agent at the inception of the first contact with the taxpayer after the case has been transferred to the Intelligence Division.” 413 F.2d at 1116-1117. The question before us here is whether the rule announced in Dickerson applies to corporate records and leads obtained by internal revenue agents for use as evidence in a criminal prosecution. We hold that it does not. It is well established that a corporate officer or other custodian of corporate books has no constitutional right to refuse production of corporate records in response to a lawful request therefor even though the records may incriminate him personally. Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771 (1911). A corporation must submit its books and records whenever properly required to do so, and, since the privilege against self-incrimination is a purely personal one, it cannot be utilized on behalf of a corporation. United States v. White, 322 U.S. 694, 699, 64 S.Ct. 1248, 88 L.Ed. 1542 (1944). It necessarily follows that a corporate officer, even though he is a prospective criminal defendant, is not entitled to Miranda warnings when requested to produce corporate records. In such a situation Dickerson does not apply. In support of their position, the defendants rely on Curcio v. United States, 354 U.S. 118, 77 S.Ct. 1145, 1 L.Ed.2d (1957). That case held that a custodian of a union’s books cannot be compelled by contempt order to reveal the whereabouts of the books after he had testified that his refusal to produce the books was based on the fact that he did not then possess them. The case is inappo-site here. No claim is made that either Habig or Schroering ever asserted that the corporate records requested by the agents were not possessed by them and that the deception found by the trial court to have been practiced served subsequently to induce their unknowing revelation of the location of absent records. Indeed, the fact that all the records requested by the agents were produced leaves the defendants no room to argue that the situation here falls within the ambit of Curcio. III The defendants contend that the fourth amendment rights of their corporations were violated because they, as corporate officers, were not given Miranda-type warnings required under the fourth amendment to assure a knowing and intelligent consent to search. We reject this contention. This court only recently held that warnings required by the fifth and sixth amendments under Miranda are not sine qua non to a valid waiver of fourth amendment rights. United States v. Young, 471 F.2d 109 (7 Cir. 1972). In that case the defendant had invited police officers into his home and invited them to “look around.” They found and seized incriminating evidence in the personal possession of the defendant. We held that the fourth amendment required no Miranda-type warnings in advance of the search in that situation; a fortiori, no such warnings need be given to custodians of corporate records during a criminal tax investigation. IV The district judge held that “deceit” had been practiced by agents Lawrence and Hicks prior to September 21, 1964; on that date Hicks informed Schroering that he was a Special Agent of the Intelligence Division and that a criminal investigation was underway. The deceit referred to by the judge encompassed the period from March 27, 1964, when the Intelligence Division started a full-scale criminal investigation, to the September 21 meeting. The judge found that neither defendant was aware during that period that a criminal investigation was then in progress or that Hicks had been assigned as a Special Agent to conduct the investigation. He further found that the true nature of the investigation was actively concealed from the defendants and all others eon-nected with Jasper and its subsidiaries: “Mr. Hicks . . . remained submerged from the view of the taxpayers and secretly conducted the search for evidence of crime through the facade of Mr. Lawrence who was accepted and known to everyone as the civil agent of the Internal Revenue Service.” Finally, the judge found that the corporate records assembled by Schroering for the agents' inspection in a private room of the Evansville Veneer & Lumber Company offices were photocopied by the agents “behind closed doors without the permission or authorization or knowledge of anyone, including the defendants.” The last finding has no relevance to the issue before us. The undisputed fact is that these records were assembled and made available to the agents at the direction of Schroering for the acknowledged purpose of inspection. Whether they merely looked at the records or copied them, even clandestinely, is beside the point. It is not to be gainsaid, nonetheless, that corporations do have rights under the fourth amendment that may be asserted under certain circumstances. In a Clayton Act civil prosecution, this court held in Knoll Associates v. FTC, 397 F.2d 530 (7th Cir., 1968), that the theft of corporate documents which were turned over to the Government for its use constituted an unreasonable search and seizure within the meaning of the fourth amendment and that the corporate defendant was entitled to invoke this constitutional protection. Similarly, corporate officers may have fourth amendment rights with respect to corporate records. In Mancusi v. DeForte, 392 U.S. 364, 88 S.Ct. 2120, 20 L.Ed.2d 1154 (1957), a union officer was protected from a warrantless search of a union office (jointly shared by the officer) from which union records were seized. Also see United States v. Rosenberg, 416 F.2d 680 (7th Cir., 1969). In the case before us there was no theft of corporate records nor any other form of trespass on corporate property. The fact that a criminal investigation had been started was concealed from the defendants for a period of time did not make involuntary the otherwise voluntary consent of Schroering to inspection of the corporate records. Schroering was aware of Lawrence’s identity as an Internal Revenue agent, and Schroering had no constitutional privilege to refuse the production of corporate records when Lawrence so requested, provided the records requested were relevant to tax matters under investigation. It was his duty to make the records available regardless of whether the investigation had shifted from a civil to a criminal emphasis or whether he might himself be incriminated. Wilson v. United States, supra; see Curcio v. United States, supra; United States v. Sclafani, 265 F.2d 408, 415 (2d Cir.), cert. denied, 360 U.S. 918, 79 S.Ct. 1436, 3 L.Ed.2d 1534 (1959). The same is true with respect to Habig. It is irrelevant that no summons, subpoena, or search warrant was used. If production of the records had been refused, the agents could have obtained them by summons under 26 U.S.C. §§ 7602, 7604. The fact that the agents did not resort to this measure does not mitigate against the consensual production of the records. Greene v. United States, 296 F.2d 841, 843 (2d Cir., 1961). The order of suppression is vacated insofar as that order covered the corporate records of Jasper and its subsidiaries and any leads which the Government agents obtained from those records during their investigation. In all other respects the order is affirmed, and the case is remanded for trial. . The ten subsidiaries were: The Borden Cabinet Company; Evansville Veneer & Lumber Company; Cabinet Manufacturing Corporation; Jasper American Manufacturing Company; Jasper Style Masters, Inc.; S. S. & S. Manufacturing Company; Lafayette Manufacturing Company; W. W. Kimball Company; Kimball Piano, Ine.; and Habig Manufacturing, Inc. . The Government concedes that Dickerson serves to bar the admission into evidence of all oral statements made by Schroering and Habig after Hicks came into the case. We do not, therefore, modify that portion of the district court order suppressing oral statements. . Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).

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UNITED STATES of America, Plaintiff-Appellee, v. Jack BILLINGSLEY, Defendant-Appellant. No. 72-1645. United States Court of Appeals, Sixth Circuit. Feb. 21, 1973. Ivan E. Barris, Detroit, Mich., for defendant-appellant. James W. Russell, Asst. U. S. Atty., for plaintiff-appellee; Ralph B. Guy, Jr., U. S. Atty., Flint, Mich., on brief. Before PECK and MILLER, Circuit Judges, and O’SULLIVAN, Senior Circuit Judge. PECK, Circuit Judge. The appellant was tried before a jury and convicted of a violation of 18 U.S.C. § 1951, known as the Hobbs Act, which amended the Anti-Racketeering Act, for forcing the hiring of unwanted and superfluous workers by threatening a work stoppage. The case arose from an incident growing out of the construction of a warehouse in Flint, Michigan, to be built directly under some high tension lines which ran perpendicular to the length of the warehouse. Six high tension lines crossed the warehouse, each one of which carried 138,000 volts of electricity. The construction company, the W. H. Mechem Company, arranged in advance with the power company to de-energize the three lines closest to that portion of the warehouse directly beneath the high tension wires. On the Sunday morning when this work was to be done, the appellant, the business agent of the union local, whose duties included allocation of manpower, arrived at the job site with about ten experienced journeymen iron-workers. He had a conversation with Dewey Mechem, the job manager, which formed the basis for the appellant’s eventual conviction. Of the 12 ironworkers on this job, one was a “book man” '(an experienced journeyman tradesman) from another local, and 11 were “permit men” (available men who were given permits to work by the business agent of the local union); permit men are less experienced than book men. Mechem testified that the appellant stated that unless he hired five of the men with him he would shut the job down by causing a labor dispute. The appellant testified that he requested, out of a concern for safety, that five journeymen ironworkers be hired because of their greater experience. The five men were hired, although a foreman testified that he had to shut down a crane at noon because he could not get any work out of the five men hired at the insistence of the appellant. In addition, evidence was introduced which tended to show that the men with the appellant had been drinking prior to the time they arrived at the job site. At trial, the central theory of the defense was that the appellant was acting in his capacity of business agent for the union local and was motivated by a concern for the safety of the men. Accordingly, the appellant contends that when the District Court agreed to give the government’s proposed instruction No. 1: “I charge you that under the statute it is not necessary that Mr. Billingsley received any direct benefit; as used in the statute, the term extortion includes obtaining from any employer by the use of actual or threatened force, violence and fear, money in the form of wages to be paid to employees for imposed and unwanted services.” the defense was entitled to have its proposed instruction No. 3 given to the jury. The appellant argues that this instruction sets out the accepted principle that the Hobbs Act does not curtail legitimate labor demands: “Ladies and gentlemen of the jury, the anti-racketeering statute under which the charges are based has no reference or bearing on action by a labor leader, honestly acting and representing members of his union. It has reference to and bears on interference with interstate commerce by the compulsory payment of money extorted by a labor leader. The act clearly is protective to labor organizations, and labor members and their membership, as it is to employers.” The gravamen of the appellant’s objection is that the government’s instruction fails to state that the Hobbs Act does not prohibit all demands pertaining to a labor dispute, but only prohibits those demands that are motivated solely by an intent to commit extortion. The government’s position is that since this theory of the defense was set forth in the general portions of the Court’s charge, no specific instruction was required. United States v. Wingo, 394 F.2d 484 (6th Cir. 1968). The issue, then, is whether the general charge of the Court contained the substance of the requested instruction. In the relevant part of the Court’s general instruction, the Court instructed the jury that: “. . . the principal issue before you is the intent with which the defendant threatened to call a work stoppage. The government claims that it was done with the intent and purpose of requiring the Mechem Company to put on and use unwanted and superfluous employees. .The defendant claims that is what was done for the purpose of achieving safety in the work operation. As I have already indicated, the burden is upon the government to prove their claim, or theory, beyond a reasonable doubt.” This portion of the charge sets forth the theory of each party clearly and concisely. Other instructions described the offense in the terms of the statute. It is not alleged that the jury was either confused or misled. It is presumed that the jury was one of average intelligence which could evaluate instructions describing the offense with reference to the statutory language and setting out the contentions of the adverse parties; this jury sat for two days, and, in light of this and other instructions, must be presumed to have known the elements of the offense with which the defendant was charged and the theories of the defense and the prosecution. United States v. Malfi, 264 F.2d 147, 151 (3d Cir.), cert. denied, 361 U.S. 817, 80 S.Ct. 57, 4 L.Ed.2d 63 (1959); United States v. Gordon, 242 F.2d 122, 126-127 (3d Cir. 1957). In addition, the denial of a proffered request which is in any respect incorrect is not error. United States v. Kelly, 349 F.2d 720, 759 (2d Cir. 1965). Although the appellant’s requested instruction stated that legitimate labor activities are not prohibited by the Hobbs Act, it failed to state that the ramifications of legitimate labor activities could become unlawful. See United States v. Green, 246 F.2d 155, 160 (7th Cir. 1957), in which the Court refused to approve a similar instruction that stated only that legitimate labor disputes were not prohibited by the Hobbs Act. Our review of the record of this case and the relevant authorities satisfies us that the appellant was not prejudiced by the Court’s refusal to give this instruction. Secondly, the appellant contends that the District Court should not have admitted evidence of the appellant’s bad reputation. At least three circuits have considered this question, and each has held that evidence of the defendant’s bad reputation is admissible in a Hobbs Act prosecution to show that the victim of the threats acted out of fear and that the victim’s fear was reasonable. United States v. Tropiano, 418 F.2d 1069 (2d Cir. 1969), cert. denied, 397 U.S. 1021, 90 S.Ct. 1258, 25 L.Ed.2d 530 (1971); Carbo v. United States, 314 F.2d 718 (9th Cir. 1963), cert. denied, 377 U.S. 953, 84 S.Ct. 1625, 12 L.Ed.2d 498 (1964); Callanan v. United States, 223 F.2d 171 (8th Cir.), cert. denied, 350 U.S. 862, 76 S.Ct. 102, 100 L.Ed. 764 (1955). The appellant asks that this Court decline to follow these decisions since there is a strong possibility that a defendant will be convicted on the evidence of his bad reputation alone. We have considered the appellant’s contentions, and the decisions of the Second, Eighth and Ninth Circuits and we find that the reasoning of these decisions is the more persuasive. These decisions rest upon the fact that extortion is an essential element of the Hobbs Act and to prove extortion, it is essential to show that there was a generation of fear in the victim. The reasonableness of actual or anticipated fear is a vital element in these cases, and the reputation of the defendant therefore becomes relevant since such a reputation frequently conveys a tacit threat of violence. Accordingly, the reputation of the defendant is admissible not to show that he was a bad man and likely to commit a crime, but to indicate that the threats of the defendant were not idle. We agree with the other circuits which have considered this question and hold that the evidence of the bad reputation of the defendant is admissible for the limited purpose of showing the fear and its reasonableness caused by the threats of the defendant. The appellant next contends that if the reputation evidence is admissible, as we hold, a reversal is nevertheless required in this case because the Court failed to give a cautionary instruction to the jury limiting the use of this potentially prejudicial evidence. However, this issue is not properly before this Court because the defense counsel failed to bring to the Court’s attention its failure to give such an instruction. The record shows that the Court indicated at the time of his ruling to admit the reputation evidence that a cautionary instruction would be given as requested by the defense counsel; the instruction was not given, and no objection to this oversight was made. A party may not assign as error any portion of the charge or omission from the charge unless he objects thereto before the jury retires. Rule 30, F.R.Crim. Proc., Wilson v. Wiman, 386 F.2d 968 (6th Cir. 1967), Cowen v. United States, 241 F.2d 105 (6th Cir. 1957). The purpose of this rule is to require the counsel to act in time to give the judge an opportunity to correct his error. Rucker v. United States, 92 U.S.App.D.C. 336, 206 F.2d 464 (D.C.Cir.1953). The relatively slight nature of the reputation evidence in this case precludes a finding of plain error which would allow, us to consider the question in the absence of a timely objection. In Carbo and Tropiano, supra, the reputation evidence involved acts of violence and former criminal acts, and limiting instructions were given by the Court, and were upheld on appeal. In this case, however, the reputation evidence was only that the defendant was “sort of domineering, dictating to contractors,” and the prejudicial nature of this testimony is so slight that the failure to give a cautionary instruction does not constitute plain error. The appellant contends that the trial court failed to instruct the jury that an essential element of the Hobbs Act is that the victim must be placed in either economic or physical fear. However, since no objection to this alleged error was made by defense counsel, we must first consider whether the oversight amounts to plain error prejudicial to the appellant. The omission of an allegedly necessary instruction does not constitute plain error if the instructions viewed in their entirety adequately protected the defendant. United States v. Harris, 458 F.2d 670, 678 (5th Cir. 1972). In the general charge to the jury concerning the statutory offense in issue, the Court said: “The term ‘extortion’ means the obtaining of property from another induced by wrongful use of force, violence, or fear. The word fear should be given its ordinary meaning as including fear of economic loss. It is not limited to loss by injury, and hence the threat of a work stoppage would come within the definition of an economic loss of the victim.” In addition, we note that the existence of fear in the mind of the victim was not placed in issue by the defense either during the trial or in closing argument. When the evidence and defense counsel’s argument do not raise an element of the crime as an issue in the case, and the trial court is not apprised that it must prepare a specific instruction to cover the issue, the failure of the court should not be treated as plain error. United States v. McKenzie, 409 F.2d 983 (2d Cir. 1969). There is nothing in the record of this case that would lead us to believe that the omission of a specific instruction on this point constituted reversible error. The appellant also contends that the Court should have permitted him to reopen the case for the limited purpose of introducing additional evidence concerning the height of the crane relative to the overhead wires. Inasmuch as this decision is vested in the sound discretion of the trial court, and inasmuch as courts should be extremely reluctant to grant reopeningsyand inasmuch as evidence of the height of the boom was available to the defense and was introduced in evidence during the trial, we cannot find that the District Court abused its discretion in denying the appellant’s motion to reopen the case for this purpose. United States v. Wade, 364 F.2d 931 (6th Cir. 1966), Eason v. United States, 281 F.2d 818 (9th Cir. 1960). We have considered the remaining contentions of the appellant, including the contention that a new trial should have been granted, and we find that they are without merit. The judgment of the District Court is affirmed.