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https://www.courtlistener.com/api/rest/v3/opinions/2762825/	STATE OF MICHIGAN COURT OF APPEALS PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED December 18, 2014 Plaintiff-Appellee, v No. 317605 Wayne Circuit Court JAMES WILLIAM GORE, LC No. 12-008599-FC Defendant-Appellant. Before: O’CONNELL, P.J., and BORRELLO and GLEICHER, JJ. PER CURIAM. A jury convicted defendant of two counts of felonious assault, MCL 750.82, and one count of possession of a firearm during the commission of a felony (felony-firearm), MCL 750.227b, for shooting a rifle at his landlord and a property manager.1 The prosecutor engaged in misconduct by asserting in closing argument that one of the victims was not present at trial because he was afraid. And the trial court should have conducted a more probing inquiry regarding the witness’s absence before deciding not to instruct the jury that it could infer that the missing witness’s testimony would have been unfavorable to the prosecution. However, neither of these errors was outcome determinative and we affirm defendant’s convictions and sentences. I. BACKGROUND Defendant’s convictions arise from a shooting outside his rented home. Defendant’s landlord, Charles Miles, had secured a court order to remove defendant from the property for nonpayment of rent. Anticipating that Miles had obeyed the court order and vacated the property the previous day, Miles travelled to the residence on August 21, 2012. Miles arranged to meet Jason Greene, a property manager, whom he had hired to change the locks and secure the windows. While Miles awaited Greene’s arrival, he contacted defendant by telephone. Defendant was not at the house at that time, but informed Miles that he had not obeyed the court order to vacate the residence. 1 Defendant has served his two-year term of imprisonment for the felony-firearm conviction, and remains on probation for the felonious assault convictions. -1- Greene arrived at the scene and he and Miles stood in front of the house discussing their options. Defendant returned and stormed past Greene and Miles, saying nothing. Approximately 30 seconds later, defendant came back outside holding a rifle. Defendant attempted to fire a shot, but was unsuccessful. Miles and Greene ran down the street and hid two blocks away. As the men ran, defendant fired several shots in their direction. One punctured Miles’s arm. The two men contacted 911, and an emergency medical technician tended to Miles’s injury. The officers who arrived at the scene testified that both men appeared scared and shaken. The day after the shooting, Miles obtained an eviction order against defendant, and two days later, an officer arrested defendant at the subject property. Defendant did not dispute that an altercation occurred on the day in question. Rather, he denied that he shot at Miles and Greene and challenged Miles’s authority to evict him from the house. The jury ultimately acquitted defendant of two greater offenses, assault with intent to murder and assault with intent to do great bodily harm less than murder, and convicted him of two counts of the alternative lesser offense of felonious assault and a single count of felony- firearm. II. MISSING WITNESS INSTRUCTION The prosecutor did not present Greene as a witness at defendant’s preliminary examination but included him as an endorsed witness on her trial witness list. By the time of the trial, however, Greene refused to testify. As noted by the prosecutor before jury selection, Greene told the prosecutor that his nephew had been shot the previous week in a drive-by shooting because he had testified in an unrelated criminal case. This frightened Greene. Prior to Greene’s revelation, the prosecutor had attempted to personally serve a subpoena at his residence twice, and had secured a detainer but “[h]e ha[d] not been picked up.” The record provides no explanation for the failure to execute the detainer order. Rather than request a missing witness jury instruction, defense counsel tried to argue in opening statement that the jury could presume that Greene’s testimony would be unfavorable to the prosecution. The prosecutor objected and defense counsel asserted that he could raise such an argument because the prosecutor injected the issue during jury voir dire. Specifically, the prosecutor questioned the potential jurors, “Would you hold it against the People’s case if other evidence proved the count, but you didn’t hear from that individual,” and “Does anyone here have an issue with finding the Defendant may have committed a crime against an individual if that individual isn’t here to testify.” The trial court sustained the prosecutor’s objection and precluded defense counsel’s line of argument. The presumption that a missing witness’s testimony would be unfavorable to the prosecution is limited to situations where the court “has made a specific finding that it was the prosecution’s fault that they didn’t produce that evidence,” the court reasoned. Then, the court may give a jury instruction regarding the missing witness. However, the court concluded, “I don’t think that’s what we’re dealing with here. That’s my ruling.” Defense counsel was permitted to mention in opening statement that Greene would be absent from trial. However, any attempt to persuade the jury to assign meaning to Greene’s absence would be limited to closing argument. -2- At the beginning of the second day of trial, the prosecutor indicated on the record that she was providing proposed jury instructions to the court. The prosecutor described “unique” instructions that she had included; a missing witness instruction was not among them. Defense counsel raised no objection nor did he request the instruction. The court gave the attorneys an opportunity to raise any additional issues before reading the final jury instructions and defense counsel again raised no complaint. Accordingly, the court gave no missing witness instruction to the jury. And defense counsel thereafter affirmatively expressed satisfaction with the instructions as given. Defendant challenges the trial court’s failure to give a missing witness instruction. M Crim JI 5.12 permits a court to instruct the jury that the prosecutor is responsible for securing a witness’s presence and that the jury may infer that an absent witness’s testimony would have been unfavorable to the prosecution. We review for an abuse of discretion a trial court’s decision not to give a missing witness jury instruction. People v Steele, 283 Mich. App. 472, 485; 769 NW2d 256 (2009). We will reverse a defendant’s conviction for the failure to give a jury instruction only if “it appears that it is more probable than not that the error was outcome determinative.” People v McKinney, 258 Mich. App. 157, 163; 670 NW2d 254 (2003). A defendant is not automatically entitled to a missing witness jury instruction. Rather, such an instruction is only appropriate when the trial court finds that the prosecutor failed in his or her duty to exercise due diligence to secure the witness’s presence at trial. People v Eccles, 260 Mich. App. 379, 388-389; 677 NW2d 76 (2004). “Due diligence is the attempt to do everything reasonable, not everything possible, to obtain the presence of res gestae witnesses.” People v Cummings, 171 Mich. App. 577, 585; 430 NW2d 790 (1988) (quotation marks and citation omitted). “The test is one of reasonableness and depends on the facts and circumstances of each case, i.e., whether diligent good-faith efforts were made to procure the testimony, not whether more stringent efforts would have produced it.” People v Bean, 457 Mich. 677, 684; 580 NW2d 390 (1998). Here, there is no reason to believe that the prosecutor should have been on guard that Greene would back out of testifying at defendant’s trial. There is no record explanation of Greene’s absence at the preliminary examination and no reason to believe that he avoided a request made by the prosecutor to testify at that hearing. The prosecutor knew Greene’s address and twice tried to serve a subpoena for trial. On one occasion, Greene’s father was present, but did not know his son’s whereabouts. No one answered on the door on the second visit. And the prosecutor easily reached Greene by telephone. During that call on the eve of trial, Greene expressed his hesitation to testify. We are puzzled by the prosecutor’s failure to execute the detainer so as to secure Greene’s presence at trial. However, defendant never questioned the prosecutor’s actions, leaving no record of whether the prosecutor attempted to locate and detain Greene or whether she opted to forego presenting Greene as a witness. Even if the prosecutor did not fulfill its duty of due diligence, the absence of a missing witness jury instruction at defendant’s trial was not outcome determinative. See McKinney, 258 Mich. App. at 163. The evidence presented by the other prosecution witnesses clearly established that defendant feloniously assaulted Greene, thereby weakening the effect any missing witness -3- instruction could have had on the jury. To prove a charge of felonious assault, the prosecutor must establish (1) the occurrence of an assault, (2) with a dangerous weapon, and (3) with the intent to injure or place the victim in fear. People v Chambers, 277 Mich. App. 1, 8; 742 NW2d 610 (2007). Miles testified that defendant shot at both he and Greene. Miles further stated that he and Greene ran from defendant for two blocks and hid. Defendant chased them and from their hiding spot, Miles and Greene could hear defendant yelling “I’m going to kill you.” The prosecutor played a 911 call for the jury during which Greene described the shooting incident and requested police protection from defendant. Detroit Police Officer Devon Maples testified that he responded to the location where Miles and Greene were hiding. Maples described that both men were “in panic” and “scared.” Maples specifically indicated that Greene “was a little shaken and scared” and “kept talking about calling his pastor.” Even if the jury were to presume that Greene would have contradicted this story, he would merely create a credibility contest, not definitively disprove the elements of the offense. III. PROSECUTORIAL MISCONDUCT During closing argument, the prosecutor commented on Greene’s absence from the trial: Obviously Mr. Greene is not here. But I ask you to use your common sense. He goes to do his job. He’s called on a job. He doesn’t know the defendant from anyone. He probably doesn’t even know Mr. Miles very well. He’s doing his job. He gets to the place where he’s supposed to do his job and then he’s shot at. He’s running for his life. He’s hiding in fear. Mr. Greene is scared. He was scared on that day. And he was scared to come to court. And that’s why he is not here. [Emphasis added.] In rebuttal closing argument, the prosecutor reiterated, “The fact of the matter is, [defendant] did assault Mr. Greene, who’s scared to be here . . . .” Defendant contends that the prosecutor improperly relied on facts not in evidence in making this argument and “struck a significant ‘foul blow’ in her zeal to secure [defendant’s] conviction.” The prosecutor’s comments were highly prejudicial, defendant asserts, because they pertained to an element of felonious assault: whether Greene was placed in fear. Defendant failed to preserve his challenge by objecting in the trial court. See People v Thomas, 260 Mich App 450, 453; 678 NW2d 631 (2004). Our review is therefore limited to plain error affecting defendant’s substantial rights. People v Abraham, 256 Mich. App. 265, 274; 662 NW2d 836 (2003). We must examine the record as a whole and consider the prosecutor’s statements in context in determining whether plain error occurred. People v Dobek, 274 Mich. App. 58, 64; 732 NW2d 546 (2007). The prosecutor did make improper arguments before the jury. Although Greene imparted to the prosecutor that he was frightened to testify, that information was not presented to the jury. The prosecutor is precluded from arguing facts not in evidence. People v Watson, 245 Mich. App. 572, 588; 629 NW2d 411 (2001). Although the prosecutor may argue reasonable inferences arising from the evidence, id., it was not reasonable to infer from the trial evidence that Greene was absent because he was afraid to testify. Obviously Greene was frightened during the offense, as was Miles. That Greene was not at trial while Miles was present does not necessarily -4- reflect Greene’s fear of testifying. Rather, the jury could have reached any number of conclusions regarding Greene’s absence without the prosecutor’s comments. Reversal is not warranted, however, when “[t]he inaccurate prosecutorial remark was isolated, brief, and did not affect the outcome of [the] defendant’s trial.” People v Unger, 278 Mich. App. 210, 239; 749 NW2d 272 (2008). The prosecutor’s comments were brief, forming a small portion of her argument regarding the apprehension element of felonious assault. And the evidence supported that Greene was placed in fear during the offense. Accordingly, it is unlikely that the jury’s felonious assault conviction was based on the prosecutor’s improper commentary. We affirm. /s/ Stephen L. Borrello /s/ Elizabeth L. Gleicher -5-	01-03-2023	12-19-2014
https://www.courtlistener.com/api/rest/v3/opinions/1064000/	590 S.E.2d 572 (2004) 42 Va. App. 142 Ronnie L. JONES, s/k/a Ronnie Lee Jones v. COMMONWEALTH of Virginia. Record No. 0606-02-2. Court of Appeals of Virginia, Richmond. January 6, 2004. 573 Steven D. Benjamin (Betty Layne DesPortes; Benjamin & DesPortes, P.C., on brief), Richmond, for appellant. Robert H. Anderson, III, Senior Assistant Attorney General (Jerry W. Kilgore, Attorney General, on brief), for appellee. Present: FITZPATRICK, C.J., BENTON, ELDER, ANNUNZIATA, BUMGARDNER, FRANK, HUMPHREYS, CLEMENTS, FELTON and KELSEY, JJ. UPON REHEARING EN BANC ROSEMARIE ANNUNZIATA, Judge. Ronnie Lee Jones was indicted for the distribution of cocaine in violation of Code § 18.2-248 and, upon his plea of "no contest," was convicted and sentenced to twenty years incarceration, seventeen years suspended. On appeal, he contended the circuit court did not have jurisdiction to decide his case. On May 6, 2003, a divided panel of this Court reversed Jones's conviction, holding that the evidence was insufficient to establish the court's jurisdiction. Jones v. Commonwealth, No. 0606-02-2, 2003 WL 21003415 (Va.Ct.App. May 6, 2003). On June 10, 2003, we granted the Commonwealth's petition for rehearing en banc, stayed the mandate of the panel decision, and reinstated the appeal. Upon rehearing en banc, we affirm the conviction. I. Background Jones was indicted for distributing cocaine on December 9, 1998 and arraigned on the charge on September 18, 2001. The indictment to which Jones pled and upon which he was arraigned by the clerk in open court states the following: City of Petersburg, Commonwealth of Virginia, to-wit; in the Circuit Court of said City, the Grand Jurors of the Commonwealth of Virginia, in and for the body of the City of Petersburg, and now attending the said court, upon their oaths, present that Ronnie L. Jones on or about the 9th day of December, in the year Nineteen Hundred and 98, in the said city, and within the jurisdiction of the said court, did 574 distribute cocaine, a schedule I or II controlled substance, against the dignity of the Commonwealth of Virginia. Code Section 18.2-248. Following Jones's plea of "no contest" to the indictment, the Commonwealth's attorney presented the testimony of police officer Raymond Ramos. His testimony established that, on the day of the offense, he was employed as a City of Petersburg police officer. Ramos testified that Petersburg law enforcement agents and an undercover officer arranged, via a confidential informant, for the purchase of $200 worth of crack cocaine from Jones. Jones agreed to meet the informant at "2178 County Drive, trailer number N43." When Jones arrived at the trailer, he met the informant and sold him cocaine in the presence of the undercover officer. The Commonwealth introduced a certificate of analysis which indicated the officer received one gram of cocaine. Jones argues that the circuit court did not have subject matter jurisdiction because the evidence does not establish that the illegal transaction occurred in Virginia. In support of his contention, Jones asserts that his nolo contendere plea cannot establish subject matter jurisdiction because: 1) subject matter jurisdiction cannot be conferred upon the court by consent or agreement, and 2) a nolo contendere plea does not admit as true any fact other than those related to the elements of the offense. Although we acknowledge that the parties before a court cannot establish subject matter jurisdiction by consent or agreement, we hold that a nolo contendere plea can admit the facts necessary to establish jurisdiction. II. Analysis To establish the court's subject matter jurisdiction, evidence supporting the conclusion "`must affirmatively appear on the face of the record, that is, the record must show affirmatively that the case is one of a class of which the court rendering the judgment was given cognizance.'" Owusu v. Commonwealth, 11 Va.App. 671, 673, 401 S.E.2d 431, 432 (1991) (quoting Shelton v. Sydnor, 126 Va. 625, 630, 102 S.E. 83, 85 (1920)). "`Every crime to be punished in Virginia must be committed in Virginia.'" Moreno v. Baskerville, 249 Va. 16, 18, 452 S.E.2d 653, 655 (1995) (quoting Farewell v. Commonwealth, 167 Va. 475, 479, 189 S.E. 321, 323 (1937)). Because a court's power to act presupposes subject matter jurisdiction, the absence of subject matter jurisdiction "may be raised at any time, in any manner, before any court, or by the court itself." Humphreys v. Commonwealth, 186 Va. 765, 772, 43 S.E.2d 890, 893 (1947).[1] In the case before the Court, the police officer's testimony proved that Jones sold cocaine to an informant, but it failed to reveal whether that act occurred in Virginia.[2] The Commonwealth argues, however, that Jones's nolo contendere plea to the indictment suffices to establish the required jurisdictional facts. We agree with the Commonwealth. It is well settled that subject matter jurisdiction cannot be conferred by agreement or consent. Id.; Brown v. Commonwealth, 215 Va. 143, 145, 207 S.E.2d 833, 836 (1974). This principle is founded on another settled principle which holds that issues of law are the province of the courts, and the *575 courts are therefore not bound to accept as controlling stipulations regarding questions of law. Swift & Co. v. Hocking Valley Ry. Co., 243 U.S. 281, 289, 37 S.Ct. 287, 290, 61 L.Ed. 722 (1917) (noting that a stipulation "concerning the legal effect of admitted facts" is "obviously inoperative" (emphasis added)). The principle that precludes a conclusion of law by agreement of the parties does not, however, preclude a party from establishing by admission or agreement certain facts underlying a question of law. See Honaker v. Howe, 60 Va. (19 Gratt.) 50, 53 (1869). Although Jones's nolo contendere plea does not waive his right to object to the absence of subject matter jurisdiction, Clauson v. Commonwealth, 29 Va.App. 282, 290, 511 S.E.2d 449, 453 (1999), it nonetheless "`implies a confession . . . of the truth of the charge ... [and] agrees that the court may consider him guilty' for the purpose of imposing judgment and sentence." Commonwealth v. Jackson, 255 Va. 552, 555, 499 S.E.2d 276, 278 (1998) (alteration in original) (quoting Honaker, 60 Va. (19 Gratt.) at 53). A "plea of nolo contendere, like a demurrer, admits, for the purposes of the case, all the facts which are well stated." Honaker, 60 Va.(19 Gratt.) at 53-54; see also Scott v. State, 928 P.2d 1234, 1237 (Alaska Ct.App. 1996) (noting that after a plea of nolo contendere, "`the court may proceed to accept the allegations in the indictment as true'" (quoting C.T. Drechsler, Annotation, Plea of Nolo Contendere or Non Vult Contendere, 89 A.L.R.2d 540, § 2 (1963))); State v. Kilmer, 194 Neb. 434, 231 N.W.2d 708, 710 (1975) (holding that a "plea of nolo contendere admits the matters alleged in the information and has the same effect as a plea of guilty so far as issues of fact are concerned"). Upon review of the indictment in light of the principle that a nolo contendere plea implies an admission by the defendant that the charge and the facts underlying it as stated in the indictment are true, we find that the required jurisdictional facts were proved. The indictment read to Jones at his arraignment, and to which he pled, states the location specifically as "City of Petersburg, Commonwealth of Virginia," and relates that Jones distributed cocaine on or about the 9th day of December, 1998 in the "said city." The antecedent of the reference to "said city" can only logically and grammatically be the "City of Petersburg, Commonwealth of Virginia." By pleading nolo contendere, Jones, in essence, admitted as true each factual allegation set forth in the indictment, including the fact that the offense occurred in the Commonwealth. The court's jurisdiction, thus, "affirmatively appear[s] on the face of the record." Shelton, 126 Va. at 630, 102 S.E. at 85; cf. Owusu, 11 Va.App. at 673, 401 S.E.2d at 432 (holding that where "[n]o street address, town, or locality was mentioned with respect to the location of the offenses" and where the circumstantial evidence was insufficient, subject matter jurisdiction was not proved). We accordingly hold that Jones, in pleading no contest to the charge as set forth in the indictment, agreed or admitted that the facts set forth in the indictment were true, including the fact that the offense charged occurred in Virginia. We affirm Jones's conviction. Affirmed. NOTES [1] The Commonwealth contends the issue on appeal is procedurally barred pursuant to Rule 5A:18, because venue and not subject matter jurisdiction is implicated. We disagree. Subject matter jurisdiction gives a court the power to hear and adjudicate a case. Brown v. Commonwealth, 215 Va. 143, 145, 207 S.E.2d 833, 835 (1974). Venue, on the other hand, determines only the place where the trial will be held. Id. at 145, 207 S.E.2d at 836. Here, Jones argues that the evidence does not establish he committed a crime within the Commonwealth of Virginia. If true, no court in Virginia would have the power to try Jones. Moreno, 249 Va. at 18, 452 S.E.2d at 655. Therefore, subject matter jurisdiction is the relevant issue. [2] The officer's testimony that the offense occurred outside a trailer at "2178 County Drive" does not, without other evidence in the record, prove Jones committed the offense within the jurisdiction of the circuit court. See Thomas v. Commonwealth, 36 Va.App. 326, 333, 549 S.E.2d 648, 651 (2001) (noting that although the evidence "mentions a street address and `Bragg Hill' ..., nothing in the record" provided a basis upon which the trial court could take judicial notice of the location of the crime).	01-03-2023	10-09-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265881/	4 Cal.Rptr.3d 796 (2003) 112 Cal.App.4th 30 KITTY-ANNE MUSIC CO., et al., Plaintiffs and Appellants, v. Donald SWAN, Defendant and Respondent. No. B158551. Court of Appeal, Second District, Division Six. September 18, 2003. Review Denied November 25, 2003. 797 Dennis v. Greene; Freund & Brackey, Beverly Hills, Thomas A. Brackey II; and Nate G. Kraut, for Plaintiffs and Appellants. Gaims, Weil, West & Epstein and Jeffrey B. Ellis, Los Angeles, for Defendant and Respondent. GILBERT, P.J. A party successfully opposes a summary judgment motion. He then moves for summary judgment based upon the same evidence used in the summary judgment motion he resisted. The rule of judicial estoppel does not apply against the party because he has not taken inconsistent positions, nor has he disrupted the orderly administration of justice. Kitty-Anne Music Co., Inc. and Milton Delugg, president of Kitty-Anne Music 798 Co., Inc., appeal a summary judgment in favor of Donald Swan.[1] We affirm. FACTS Al Stillman was a popular songwriter who wrote the lyrics to many popular songs that are still performed. In 1979, he died, and his widow Pauline inherited his music royalty rights. In 1982, she granted publisher's royalty rights to Kitty-Anne in exchange for $300,000, plus payment of the "writer's share" of future royalties on specified Stillman songs. The 1982 agreement required Kitty-Anne to "keep complete and accurate books and records" regarding the royalties and to allow Stillman and her successors "to audit and inspect such books and records" upon reasonable notice. The agreement also required Kitty-Anne to protect and enforce the Stillman royalty rights by appropriate means, including litigation. In 1990, defendant Donald Swan inherited the Stillman royalty rights from his aunt Pauline. Swan believed that Kitty-Anne was wrongfully withholding royalties on the Stillman songs. In 1999, he brought an action against Kitty-Anne, alleging breach of contract and fraud, among other causes of action. Kitty-Anne then paid Swan an additional $70,000 in revised royalties, and the parties later agreed to settle the lawsuit. The parties also discussed sale of the Stillman royalty rights to Kitty-Anne. On November 1, 2000, the parties memorialized the "proposed terms" in a two-page letter, later referred to by Kitty-Anne as the "deal memo." The terms provided for sale of the writer's royalties for $375,000, payable in part on December 15, 2000 ($93,750) and in part on January 15, 2001 ($281,250). Paragraph 4 reserved Swan's right to royalties accruing prior to July 1, 2000, but collected from licensees and users thereafter. Paragraph 6 required "[a] mutual release and dismissal of all existing and potential claims between the parties." Paragraph 1 of the deal memo also provided for settlement and dismissal of Swan's 1999 lawsuit against Kitty-Anne in exchange for Kitty-Anne's payment of $20,000. Swan promised to execute a release and settlement agreement regarding the lawsuit and to request a dismissal thereof. On November 10, 2000, Swan executed a written release and settlement, Kitty-Anne paid Swan $20,000, and Swan thereafter dismissed the lawsuit. Kitty-Anne then prepared a draft agreement entitled "Purchase of Writer's Royalties," formalizing the terms of the deal memo.[2] (In a deposition, Swan testified that the deal memo was "an incomplete document" that contemplated the drafting and execution of further documents.) Swan objected to the draft agreement, however, because it did not comply with paragraphs 4 and 6 of the deal memo, concerning pre-July 2000 royalties and execution of a mutual release. The draft agreement also included an integration clause, thus precluding reliance upon or enforcement of the deal memo. The draft agreement did not provide Swan with auditing rights of pre-July 2000 royalties received by Kitty-Anne. Correspondence between the parties ensued. Swan amended the draft agreement and extended the time for Kitty-Anne's 799 first payment. Kitty-Anne did not make payment, however, because the parties did not agree upon and execute the draft agreement. Each party threatened an action for breach of contract. At the end of December 2000, Swan terminated the agreement because he believed Kitty-Anne was in breach. On January 30, 2001, Kitty-Anne brought an action against Swan for breach of contract, fraud, and defamation, among other causes of action. Following Swan's answer to the complaint, Kitty-Anne moved for partial summary judgment or summary adjudication of the contract causes of action. Kitty-Anne presented evidence of the deal memo, the correspondence between the parties regarding terms of the draft agreement, and Swan's assertion at the end of December 2000, that Kitty-Anne had breached the deal memo. The trial court denied Kitty-Anne's motion for summary adjudication. It found triable issues of material fact regarding Kitty-Anne's willingness to perform. The trial court's order referred to evidence that Kitty-Anne may have breached the deal memo and precluded further performance by the parties by demanding that Swan execute a later agreement with materially different terms. Swan then brought a motion for summary judgment of all causes of action, including defamation. He relied upon evidence identical or similar to that presented in response to Kitty-Anne's earlier motion. Kitty-Anne resisted Swan's motion for summary judgment by relying upon evidence it presented previously. Kitty-Anne also asserted that the trial court's ruling on the previous motion for summary adjudication was "the law of the case." The trial court concluded that there was no triable issue of material fact regarding any cause of action. It then entered summary judgment in favor of Swan. Kitty-Anne appeals and contends the trial court improperly granted summary judgment regarding the contract causes of action. DISCUSSION I. In review of a summary judgment, we examine the record independently to determine whether disputed factual issues exist. (Certain Underwriters at Lloyd's of London v. Superior Court (2001) 24 Cal.4th 945, 972, 103 Cal.Rptr.2d 672, 16 P.3d 94.) "We review the trial court's decision de novo, considering all of the evidence the parties offered in connection with the motion ... and the uncontradicted inferences the evidence reasonably supports." (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476, 110 Cal.Rptr.2d 370, 28 P.3d 116.) As a practical matter, we apply the rules and standards of the trial court to determine whether triable factual issues exist. (Zavala v. Arce (1997) 58 Cal.App.4th 915, 925-926, 68 Cal.Rptr.2d 571 [discussion of summary judgment rules and analysis].) This is what we have done here. II. Kitty-Anne argues that Swan is estopped to claim that no triable issues of material fact exist because he asserted the contrary in response to Kitty-Anne's previous summary adjudication motion. Kitty-Anne relies upon the rule of judicial estoppel discussed in Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 181-183, 70 Cal.Rptr.2d 96 ["`Judicial estoppel prevents a party from asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding'"]. 800 Judicial estoppel applies where a party takes inconsistent positions that affect the orderly administration of justice. (Jackson v. County of Los Angeles, supra, 60 Cal.App.4th 171, 181, 70 Cal.Rptr.2d 96.) Requirements for application of the rule include a party's taking two positions in judicial or administrative proceedings, success in the assertion of the first position, inconsistency between the two positions, and a lack of ignorance, fraud, or mistake in asserting the first position. (Id., at p. 183, 70 Cal.Rptr.2d 96.) The doctrine requires that the positions be clearly inconsistent" `so that one necessarily excludes the other.'" (Id., at p. 182, 70 Cal.Rptr.2d 96.) Judicial estoppel is an extraordinary remedy that is applied "with caution." (Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 511, 85 Cal.Rptr.2d 352.) To invoke the rule, a party's inconsistent position must arise from intentional wrongdoing or an attempt to obtain an unfair advantage. (Id., at pp. 509-510, 85 Cal.Rptr.2d 352.) The determination whether judicial estoppel applies is a question of law. (Kelsey v. Waste Management of Alameda County (1999) 76 Cal.App.4th 590, 597, 90 Cal.Rptr.2d 510.) The rule does not apply here because Swan did not attempt to obtain an unfair advantage; nor were his positions inconsistent. He resisted Kitty-Anne's summary adjudication motion by presenting evidence sufficient to raise triable factual issues. (Swan's argument stated that "at bear [sic] minimum, these circumstances create a triable fact....") The evidence presented in favor of and in response to the earlier motion convinced Swan to move for summary judgment. He then bore the burden of proving that he was entitled to judgment as a matter of law. Swan's positions in the trial court did not play "`fast and loose with the court[.]'" (Haley v. Dow Lewis Motors, Inc., supra, 72 Cal.App.4th 497, 509, 85 Cal.Rptr.2d 352.) As a matter of law, the rule of judicial estoppel does not apply here. III. Kitty-Anne complains that the trial court did not review and consider the responsive evidence before ruling. Kitty-Anne asserts that its failure to refer to evidence in the separate statement of undisputed facts should not preclude consideration of the evidence. (Code Civ. Proc., § 437c, subd. (b) ["Each material fact contended by the opposing party to be disputed shall be followed by a reference to the supporting evidence. Failure to comply with this requirement of a separate statement may constitute a sufficient ground, in the court's discretion, for granting the motion"].) Kitty-Anne points out that its written argument (points and authorities) incorporated and relied upon evidence presented in the previous summary adjudication motion. Although the trial court chastised Kitty-Anne for evidentiary shortcomings in its responding papers, Kitty-Anne did discuss some responsive evidence during oral argument of the motion. The trial court responded: "I understand all those facts." The trial judge was familiar with the lawsuit because he had ruled upon the earlier summary adjudication motion. We presume the trial court read and considered Kitty-Anne's written argument prior to ruling. Moreover, we have independently reviewed the evidence submitted in support of and in opposition to Swan's motion. (Certain Underwriters at Lloyd's of London v. Superior Court, supra, 24 Cal.4th 945, 972, 103 Cal.Rptr.2d 672, 16 P.3d 94.) As discussed below, we conclude that summary judgment is proper. (Pt. V., post.) 801 IV. Kitty-Anne also asserts the trial court did not reevaluate its motion for partial summary judgment or summary adjudication. It points out that its evidentiary showing included declarations from attorneys knowledgeable in intellectual property law who stated that the deal memo was enforceable and that execution of further documents was not required. Kitty-Anne does not cite authority requiring the trial court to reevaluate its earlier ruling. Moreover, questions regarding the parties' intent, the completeness of the deal memo, or its enforceability, are legal issues for the court to resolve and not matters for expert opinion. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865, 44 Cal.Rptr. 767, 402 P.2d 839 [interpretation of a contract is a question of law for the court].) V. Kitty-Anne argues that Swan's motion for summary judgment should not have been granted because there is a conflict whether the deal memo is the parties' contract and whether the draft agreement is a contract or merely a copyright assignment form to be recorded. We disagree and conclude as a matter of law, the trial court properly granted summary judgment. (Merrill v. Navegar, Inc., supra, 26 Cal.4th 465, 476, 110 Cal.Rptr.2d 370, 28 P.3d 116 [standard of review].) Interpretation of a written instrument is generally a question of law. (Parsons v. Bristol Development Co., supra, 62 Cal.2d 861, 865, 44 Cal.Rptr. 767, 402 P.2d 839.) Contract interpretation "is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. [Citations.]" (Ibid.) In interpreting a contract, the court considers the language of the contract, the circumstances under which the parties negotiated or entered into the contract, the object, nature and subject matter of the contract, and the subsequent conduct of the parties. (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912, 75 Cal.Rptr.2d 573.) "[T]he practical construction placed upon [a contract] by the parties before any controversy arises as to its meaning affords one of the most reliable means of determining the intent of the parties." (Bohman v. Berg (1960) 54 Cal.2d 787, 795, 8 Cal.Rptr. 441, 356 P.2d 185.) By their actions here, the parties intended to execute additional documents to carry out the terms of the deal memo which Kitty-Anne acknowledges is the parties' contract. (See Copeland v. Baskin Robbins U.S.A. (2002) 96 Cal.App.4th 1251, 1255-1256, 117 Cal.Rptr.2d 875; Stockwell v. Lindeman (1964) 229 Cal.App.2d 750, 755-756, 40 Cal.Rptr. 555.) Kitty-Anne drafted and forwarded to Swan a draft agreement entitled "Purchase of Writer's Royalties." It is undisputed this agreement contained terms inconsistent with the deal memo. The draft agreement did not contain a mutual release nor reserve pre-July 2000 royalties to Swan. It also contained an integration clause which in effect abrogated the deal memo. Although Kitty-Anne professed it was ready to pay the initial payment, it also stated that "it is obvious that the first payment date ... cannot be met" given Swan's objections to the draft agreement. Kitty-Anne's characterization of the draft agreement as a mere copyright assignment for recordation is chimerical. Kitty-Anne posits that Swan thwarted performance of the deal memo, the parties' contract, by tying it to the draft agreement. But in 802 fact, Kitty-Anne supplanted the deal memo with the draft agreement. Had Swan signed the draft agreement, it is doubtful Kitty-Anne would be arguing that the deal memo was the contract. The draft agreement drastically changed significant provisions of the deal memo and required Swan's signature. When Kitty-Anne did not make the initial payment or agree to modification of the draft agreement, Swan properly declared Kitty-Anne in breach and terminated the contract. The judgment is affirmed. Kitty-Anne shall bear costs on appeal. We concur: COFFEE and PERREN, JJ. NOTES [1] We refer to the plaintiffs collectively as "Kitty-Anne," except where clarity demands a distinction. [2] At times in the trial court and in the appellate briefs, the parties also refer to this document as a "copyright assignment" or a "long-form copyright assignment." To ease the reader's task, we refer to the document as a "purchase agreement" or "draft agreement."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367183/	544 P.2d 1010 (1976) Myron E. BRYANT, Appellant (Defendant below), Doyle D. Hendrickson and A.H. Hendrickson (Defendants below), v. WYBRO FEDERAL CREDIT UNION, a corporation, Appellee (Plaintiff below). No. 4515. Supreme Court of Wyoming. January 21, 1976. Rehearing Denied February 24, 1976. 1011 Ronald W. Hofer of Leimback, Aspinwall & Hofer, Casper, for appellant. Fred W. Layman, Casper, for appellee. Before GUTHRIE, C.J., and McCLINTOCK, RAPER, THOMAS, and ROSE, JJ. PER CURIAM. This is an appeal from an order of the district court denying a motion of defendant Myron E. Bryant to set aside a default judgment earlier entered by the court against him upon the ground that there was no jurisdiction of this defendant because of a failure to serve him. Wybro Federal Credit Union's service rests upon the following return set out in material part: " * * by delivering to Myron E. Bryant by leaving a copy with D. Hendrickson as agent for service and accepting service in Natrona County, Wyoming." Based upon this service judgment was entered against Bryant. Execution issued thereon which was directed against certain real estate of the said Bryant, and this property was sold at a sheriff's sale and the sale was confirmed. Although there is a certificate of the sheriff that Hendrickson claimed to be the agent for Bryant and is alleged to have represented himself to the sheriff as such agent, the court heard evidence in connection with the determination of this motion, and there was no evidence produced at that hearing that Hendrickson had ever been authorized as agent for such service or empowered to accept service for this defendant. The court, in disposing of this matter, observed: "* * * There is no testimony of agency here, or of authorization. * * " From our inspection of the record and the statement of the judge that there was an absence of any agency or authorization, the question presented herein becomes an extremely narrow one. Accepting this finding, there was no valid service or compliance with Rule 4(d)(1), W.R.C.P., which provides service shall be made by delivery "to an agent authorized by appointment or by law to receive service of process." In light of this rule and the finding, a disposal rests firmly in the law of this state. The case of Pease Brothers, Inc. v. American Pipe & Supply Co., Wyo., 522 P.2d 996, 1001, is most persuasive in this case. The summons therein was served upon an admitted employee of the corporation although not in the county where the suit was brought, 1012 and unlike this case the employee did forward the summons and complaint to the proper officers who had actual notice. The holding of that case was that judgment entered without proper service of summons or appearance was void, and if service were made in a manner not authorized by law the judgment was void and subject to attack, either directly or collaterally. When the court found, and the record so reveals, that Hendrickson was not the authorized agent for such service, it becomes readily apparent that this service was not made in the manner authorized by law. In other cases this court has said that ordinarily courts gain jurisdiction of a civil suit by the filing of a complaint along with the issuance and service of summons, Weber v. Johnston Fuel Liners, Inc., Wyo., 519 P.2d 972, 977. The case of Robertson v. State Highway Commission, Wyo., 450 P.2d 1003, 1004, calls attention to the fact that Rule 4, W.R.C.P., contains "the fundamental requisites of process which are essential in giving a court jurisdiction." Service upon a person not authorized to act as such agent for process is not compliance with the fundamental or basic requirements of this rule. This court does not think it amiss to call attention to the case of Vanover v. Vanover, 77 Wyo. 55, 307 P.2d 117, 119, 62 A.L.R. 2d 931, which suggests the dangers of fraud if the method of service is enlarged beyond that of the then statute, and this seems particularly applicable in this case when the rule requires service upon an agent "authorized by appointment." Although there is much extraneous material, and suggestions and argument are made that there was actual notice to Bryant and that he had knowledge of the proceeding, or that he is in some way estopped to deny this service, there is no way in our view that this void judgment may be made to rise from the dead, so discussion of these questions would be useless. The motion to set aside this judgment should have been sustained. The case is therefore remanded with instructions to set aside this judgment insofar as the appellant Bryant is concerned.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1726315/	970 So. 2d 837 (2007) EDDY v. STATE. No. 3D07-1915. District Court of Appeal of Florida, Third District. October 3, 2007. Decision without published opinion. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265472/	507 Pa. 540 (1985) 491 A.2d 829 COMMONWEALTH of Pennsylvania, Appellee, v. William N. CORLEY, Appellant. Supreme Court of Pennsylvania. Argued December 4, 1984. Decided April 23, 1985. 541 542 L. Carter Anderson, Philadelphia (Court-appointed), for appellant. Robert B. Lawler, Chief, Appeals Div., Asst. Dist. Atty., for appellee. 543 John A. Fitzpatrick, Philadelphia, for Penjerdel Retail Council, et al, amici curiae. Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ. OPINION ZAPPALA, Justice. We review an Opinion and Order of the Superior Court affirming the denial of post-conviction relief to the Appellant William N. Corley. The essence of the Appellant's argument is that his trial counsel was ineffective for having withdrawn an allegedly meritorious suppression motion. The lower court found, and Superior Court agreed, that because the suppression motion would properly have been denied, counsel could not be found ineffective for having withdrawn it. The issues raised by the motion would have been, (1) whether the exclusionary rule applies in the context of a "citizen's arrest", and, if so, (2) whether the arrest of the Appellant in this case was illegal, there not having been a felony committed in the presence of the arresting person. The Superior Court held "that the fruits of an illegal citizen's arrest are subject to the full action of the Fourth Amendment and to the exclusionary rule," Commonwealth v. Corley, 316 Pa.Super. 327, 335, 462 A.2d 1374, 1378 (1983), but determined that on the facts of this case the arrest was not illegal. This finding was based on the court's holding that "a citizen's arrest can be made for a breach of the peace that is personally observed by the arrestor." Id., 316 Pa.Super. at 338, 462 A.2d at 1379. The Superior Court acknowledged that this holding was contrary to dicta found in several previous cases, but there being no binding precedential authority on point, the court, in the common law tradition, reasoned that the rule permitting individuals to arrest for felonies committed in their presence should be extended to permit arrests for breaches of the peace as well. We granted allowance of appeal to review these holdings. While rejecting that court's conclusions 544 as to the applicability of the exclusionary rule in the present context, we agree that the Appellant is not entitled to relief under the Post-Conviction Hearing Act, 42 Pa.C.S. § 9541 et seq., and therefore affirm. The criminal incident giving rise to this case was a shooting and robbery which occurred in the men's room of the Strawbridge and Clothier department store in Philadelphia on May 22, 1976. A store security guard saw the Appellant running toward the main escalator and also heard over his radio that there had been a shooting. The guard followed the Appellant out of the store, across the street, and into Gimbel's department store. As he followed, he observed the Appellant put a gun in his jacket pocket. The Strawbridge guard detained the Appellant and removed his jacket. He then handcuffed the Appellant and took him to a detention room in the Strawbridge store. While there he removed the gun from the jacket pocket. A wallet with which the Appellant had attempted to establish his identity, later identified as belonging to the victim, was also removed but was returned to the Appellant as he was turned over to the Philadelphia police. This wallet was later found, partially obscured between the backrest and rear seat of a patrol car in which the Appellant had been seated, by an officer who noticed that the Appellant no longer had the wallet when he was taken into the station. Following a plea of guilty and withdrawal of the plea, the Appellant was tried non-jury and found guilty of robbery, various weapons offenses, and assault. On direct appeal the Superior Court affirmed the judgment of sentence. Commonwealth v. Corley, 266 Pa.Super. 617, 405 A.2d 541 (1979). The Appellant filed the Post-Conviction Hearing Act petition which gives rise to the present case in November of 1979, seeking to be discharged or granted a new trial on the basis that he was denied his constitutional right to assistance of competent counsel, 42 Pa.C.S. § 9543(3)(vi). After hearings the lower court denied the petition and, as previously noted, the denial of relief was affirmed. 545 The Appellant asserts the correctness of the Superior Court's determination that the exclusionary rule is applicable in the context of a "citizen's arrest", but argues error in the court's holding empowering individuals to arrest for misdemeanors committed in their presence. This rule, according to Appellant, departs from the longstanding rule that a citizen may properly make an arrest only when he has definite knowledge that a felony has been committed, and reasonable grounds to conclude that the defendant committed it, see, Commonwealth v. Chermansky, 430 Pa. 170, 242 A.2d 237 (1968); Commonwealth ex rel. Garrison v. Burke, 378 Pa. 344, 106 A.2d 587 (1954). Moreover, Appellant argues, contrary to the Superior Court's reasoning that citizens should be encouraged to stop breaches of the peace and should not be required to distinguish between those which are felonies and those which are not, the new rule sanctions vigilantism and requires a more difficult distinction to be made by the citizen arrestor, that between breaches of the peace which are misdemeanors and those which are summary offenses. The latter, Superior Court has indicated, may not be the basis of a citizen's arrest. Commonwealth v. Stahl, 296 Pa.Super. 507, 442 A.2d 1166 (1982). The Appellee, in response, argues that the Superior Court erred in holding that evidence obtained as a result of an illegal citizen's arrest should be suppressed. As a consequence of this error, Appellee continues, the Superior Court unnecessarily addressed the question of a private individual's authority to arrest for a non-felony committed in his presence. It is suggested that this Court likewise need not address the merits of this issue. The Superior Court prefaced its analysis by acknowledging the long-established principle that the fruits of an illegal search by an individual not acting for the state are not subject to exclusion by reasons of the Fourth Amendment. Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971); Burdeau v. McDowell, 256 U.S. 465, 41 S.Ct. 574, 65 L.Ed. 1048 (1921). At the core of 546 the reasoning underlying this refusal to extend application of the exclusionary rule to private searches is the concept of "state action", the understanding that the Fourth Amendment operates only in the context of the relationship between the citizen and the state. Although this Court has never ruled that the same result necessarily obtains under Article I, Section 8 of the Pennsylvania Constitution, the Superior Court has so held, Commonwealth v. Dingfelt, 227 Pa.Super. 380, 323 A.2d 145 (1974), and we have implicitly acknowledged the force of the argument, distinguishing cases in which we have applied the exclusionary rule by emphasizing the extensive police involvement in the search. See e.g., Commonwealth v. Eshelman, 477 Pa. 93, 383 A.2d 838 (1978). In the present case the Superior Court differentiated between a private individual conducting a search and one making a citizen's arrest. The former, the court observed, can have purely personal motives and goals for undertaking a search. The latter, according to the court, "is, definitionally, acting under the authority of the state." 316 Pa.Super. at 333, 462 A.2d at 1377. This because "through the common law tradition as interpreted and modified by the courts of this Commonwealth," Id. n. 9, the state recognizes and sanctions the act, distinguishing it from an unprivileged battery or kidnapping. In addition the police, by taking the arrestee into custody, and the prosecutor, by seeking to use evidence gained as a result of the arrest, would have "ratified" the citizen's arrest. "Since the very occurrence of the act is freighted with the authority of the state," concluded the Superior Court, "if that act is committed improperly, the fruits of that arrest must be suppressed." 316 Pa.Super. at 333, 462 A.2d at 1377. Upon examination, the Superior Court's distinction between private searches and citizen's arrests proves to be too facile because it is based upon a misinterpretation of the concept of state action. We first note that the theory described by the court whereby "ratification" of an individual's actions by police and prosecutors may support an 547 inference of state action would, even if correct, apply to both searches and citizen's arrests. It cannot, therefore, be a basis for distinguishing between the two. Nor do we agree that the acts of an individual become imbued with the character of "state action" merely because they are in turn relied upon and used by the state in furtherance of state objectives. Commonwealth v. Eshelman, relied on by the Superior Court in support of this interpretation of "ratification", is not to the contrary. In that case we specifically found that the searcher was, despite being off-duty, "acting as a police officer when he removed the package and turned it over to police." 477 Pa. at 101, 383 A.2d at 842. (Emphasis added). We further observed that this finding was supported by evidence that the police treated the searcher as a police officer, arranging for him to take the evidence to the state police for investigation. It was in this sense that the acts of the individual were "ratified" by the Commonwealth and the searcher was understood to be acting on behalf of the state. The mere use by police and prosecutors of the results of an individual's actions does not serve to "ratify" those actions as conduct of the state. Second, we find that the Superior Court "short-circuited" the tests for determining state action set out by the United States Supreme Court and as a result reached a finding of state action which was inappropriate. In the context of an action under 42 U.S.C. § 1983, the Supreme Court equated the statutory requirement that the violation alleged be "under color of" state law with the constitutional requirement of the Fourteenth Amendment that there be "state action." The Court stated that [its] cases have accordingly insisted that the conduct allegedly causing the deprivation of a federal right be fairly attributable to the state. These cases reflect a two-part approach to the question of "fair attribution." First, the deprivation must be caused by the exercise of some right or privilege created by the state . . . Second, the party charged with the deprivation must be a person who may fairly be said to be a state actor. This may be 548 because . . . his conduct is otherwise chargeable to the state. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 937, 102 S.Ct. 2744, 2754, 73 L.Ed.2d 482 (1982). In a case more nearly like the present case, the Court identified the critical factor as whether the private individual "in light of all the circumstances of the case, must be regarded as having acted as an `instrument' or agent of the state. . . ." Coolidge v. New Hampshire, 403 U.S. at 487, 91 S.Ct. at 2049. Although the Superior Court had no difficulty concluding that the conditions prescribed by Lugar were met here, we are not so persuaded. For purposes of argument it may be conceded that the first part of the Lugar test is fulfilled. Where an individual, because of a privilege defined by the law of the state, is not subjected to civil or criminal liability for the otherwise actionable detention of another person, it can fairly be concluded that the "deprivation" suffered by the detainee is "caused by the exercise of some right or privilege created by the state." There are, however, two parts to the Lugar approach to determining whether conduct may be attributed to the state, both of which must be established. The Supreme Court itself observed that "[a]lthough related these two principles are not the same. They collapse into each other when the claim of a constitutional deprivation is directed against a party whose official character is such as to lend the weight of the state to his decisions. . . . The two principles diverge when the constitutional claim is directed against a party without such apparent authority, i.e., against a private party." 457 U.S. at 937, 102 S.Ct. at 2754. (Emphasis added). Focusing on the second factor, "that `something more' which would convert the private party into a state actor," 457 U.S. at 939, 102 S.Ct. at 2755, the Court illustrated several "tests" which had been articulated, all in the context of civil rights actions: the "public function" test, see Terry v. Adams, 345 U.S. 461, 73 S.Ct. 809, 97 L.Ed. 1152 (1953) ("private" political organization serving public function in election process) (plurality opinion); the "state compulsion" 549 test, see Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) (restaurant owner discriminating on basis of race under compulsion of state law or custom having force of law); the "nexus" test, see Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961) (restaurant practicing racial discrimination leased space from state parking authority); and the "joint action" test, see Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 98 S.Ct. 1729, 56 L.Ed.2d 185 (1978) (private party's joint participation with state official in prejudgment attachment of property). We do not have the benefit of the reasoning which convinced the lower court that both principles of the Lugar approach were present here. It is clear, however, that this is a case where the two principles diverge because the person conducting the search was a private party. The sole connection between the conduct of the security guard in this case and state law is the privilege which if properly established might shield him from liability for false arrest/false imprisonment. Having rejected the broad sweep of the ratification theory propounded by the Superior Court, we find no basis on which it might be said that the private party may be said to be a "state actor" whose conduct is "otherwise chargeable to the state." Likewise, we do not find sufficient evidence to justify the conclusion that under the principle set out in Coolidge the security guard "in light of all the circumstances of the case, must be regarded as having acted as an `instrument' or agent of the state. . . ." That the "instrument or agent" test involves more than the fact that the private individual cooperated with state officials was made clear by the Court when it stated there is nothing constitutionally suspect in the existence, without more, of . . . incentives to . . . active cooperation with the police. The exclusionary rules were fashioned "to prevent, not to repair," and their target is official misconduct. . . . But it is no part of the policy underlying the Fourth and Fourteenth Amendments to discourage 550 citizens from aiding to the utmost of their ability in the apprehension of criminals. Coolidge v. New Hampshire, 403 U.S. at 488, 91 S.Ct. at 2049. (Emphasis added). The concept of citizen's arrest as it has been developed by the courts is almost exclusively used as defense or justification on the part of the arresting person. In tort law the citizen's arrest is defined as a privilege that prevents an intentional invasion of another person's interests, which otherwise would constitute assault, battery, and false imprisonment, from being tortious and, therefore, the basis for civil liability. The conditions required to establish the privilege, generally stated, are that a felony has been committed and that the actor reasonably suspects that the person whom he arrests has committed the felony. See Mahaffey v. Byers, 151 Pa. 92, 25 A. 93 (1892); see generally Restatement (Second) of Torts, §§ 118, 119, 127. In the criminal field, the rule has also been stated "in defense of" the actions of the arresting person where reduction of charges from murder to manslaughter, on the basis of justification, was denied because the decedent was privileged to engage in the offensive conduct which, absent the privilege, might have justified the defendant in using force to evade the illegal arrest. Commonwealth v. Grether, 204 Pa. 203, 53 A. 753 (1902); Brooks v. Commonwealth, 61 Pa. 352 (1869). The rule has also been restated in the criminal context in habeas corpus cases, generally in the situation of a prisoner seeking discharge on the grounds that his arrest was illegal for not having been based on a warrant. The Court, stating the rule to refute the contention that a warrant was necessary in all cases, found the arrests in those cases to be proper. See e.g., Commonwealth ex rel. Garrison v. Burke, 378 Pa. 344, 106 A.2d 587 (1954); Commonwealth ex rel. Bandi v. Ashe, 367 Pa. 234, 80 A.2d 62 (1951); Commonwealth ex rel. Spencer v. Ashe, 364 Pa. 442, 71 A.2d 799 (1950). We are directed to no case, and our independent research has found none, in which this Court 551 has discharged a defendant based upon the failure of a citizen's arrest to meet all the criteria necessary for such an arrest to be valid. Indeed, such a finding would have been unavailing in the habeas corpus cases because of the Court's rulings that such matters were inappropriate grounds for granting that extraordinary remedy. See e.g., Spencer, 364 Pa. at 445, 71 A.2d 801. We have thoroughly examined the cases detailing the legal theory of citizen's arrest. We find that, on the whole, it has operated historically as no more than an "incentive to active co-operation with the police," with corollary civil remedies for its improper use. Because the exclusionary rule is designed "to prevent, not to repair" and is aimed at "official misconduct", it would be a wholly improper extension to apply it here, as a remedy for private conduct. The holding of the Superior Court to the contrary is, therefore, reversed. As a consequence of our decision on the merits of this issue, the Appellant's argument that his trial counsel provided him with ineffective representation must fail. Because the suppression motion would properly have been denied, counsel's actions in withdrawing it cannot constitute ineffective assistance. Because of our determination that the exclusionary rule does not apply to citizen's arrests, we need not address the propriety of the Superior Court's holding that a citizen may arrest for a misdemeanor breach of the peace committed in his presence. We leave that question for determination by the legislature or the court in an appropriate civil case. The Order of the Superior Court is affirmed. LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON and PAPADAKOS, JJ., join in this majority opinion. LARSEN, J., filed a concurring opinion in which McDERMOTT and HUTCHINSON, JJ., joined. NIX, C.J., concurred in the result. 552 LARSEN, Justice, concurring. I join in the majority opinion. Appellant's trial counsel was not ineffective in withdrawing the suppression motion because pursuit of that motion would have been frivolous. I write separately to stress to the bench and bar that the automatic application of the rule of exclusion of evidence, as the remedy for real or imagined trangressions of a defendant's right to be free from unreasonable searches, seizures and arrests, is inappropriate. See e.g., Commonwealth v. Mason, 507 Pa. 396, 490 A.2d 421 (1985) ("we reject the automatic application of the exclusionary rule to suppress evidence seized pursuant to a search which in some way violates the Pennsylvania Rules of Criminal Procedure relating to the issuance and execution of search warrants.") Compare Commonwealth v. Hamlin, 503 Pa. 210, 469 A.2d 137 (1983) with Commonwealth v. Chandler, 505 Pa. 113, 477 A.2d 851 (1984). The Superior Court held in the instant case: as a matter of federal constitutional law, that the fruits of an illegal citizen's arrest are subject to the full action of the Fourth Amendment and to the exclusionary rule. On separate, independent and adequate state grounds, applying Article I, Section 8 of the Constitution of this Commonwealth, we hold that the same results also obtain. 316 Pa.Super. 327, 462 A.2d 1374, 1378 (1983). That holding is obviously based on a fundamental misunderstanding of the origin of the often controversial exclusionary rule and of the evils which that rule was intended to guard against. Mapp v. Ohio, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081 (1961); Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652 (1914); Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963). Both the United States Supreme Court and this Court have made it clear that the exclusionary rule will not be extended to areas where its application would not tend to achieve its primary purpose of deterring unlawful police conduct. See e.g., United States v. Janis, 428 U.S. 433, 96 S.Ct. 3021, 49 *553 L.Ed.2d 1046 (1976); Stone v. Powell, 428 U.S. 465, 96 S.Ct. 3037, 49 L.Ed.2d 1067 (1976); United States v. Leon, 468 U.S. ___, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984); Massachusetts v. Sheppard, 468 U.S. ___, ___, 104 S.Ct. 3424, 3428, 82 L.Ed.2d 737, 743 (1984); Commonwealth v. Mason, supra; Commonwealth v. Musi, 486 Pa. 102, 404 A.2d 378 (1979); see generally Commonwealth v. DeJohn, 486 Pa. 32, 53-73, 403 A.2d 1283, 1293-1304 (1979) (Larsen, J., concurring in part and dissenting in part). Even assuming that a citizen's arrest was unlawful, neither the prosecution of the "arrestee" by the Commonwealth, nor the use at trial of evidence obtained as a result of such an arrest, nor the recognition by the Commonwealth of a qualified privilege as a defense in a tort action for false arrest, false imprisonment, assault and battery, etc., present the sort of official misconduct by law enforcement officials that the exclusionary rule was created to deter. McDERMOTT and HUTCHINSON, JJ., join in this concurring opinion.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265475/	341 Pa. Superior Ct. 232 (1985) 491 A.2d 237 COMMONWEALTH of Pennsylvania, Appellant, v. Bruce CARSIA, Appellee. Supreme Court of Pennsylvania. Argued July 23, 1984. Filed April 4, 1985. Petition for Allowance of Appeal Granted September 6, 1985. 235 Lawrence N. Claus, Pittsburgh, for Commonwealth, appellant. John R. Carroll, Philadelphia, for appellee. Before SPAETH, President Judge, and WICKERSHAM, BROSKY, WIEAND, CIRILLO, DEL SOLE, MONTEMURO, JOHNSON and POPOVICH, JJ. MONTEMURO, Judge: In this appeal, our court is asked once again to delineate the scope of the power and authority of the Attorney General to prosecute criminal cases vis-a-vis the power and authority that is similarly vested in the district attorneys of the various counties. This controversy, like the mythological Phoenix, has repeatedly risen from the ashes renewed and regenerated; as many times as the courts and the legislature have attempted to resolve the conflict, it returns in a different form and in a different context, yet the substantive heart remains constant. In this incarnation, the controversy is presented to us in the context of an appeal from an order of the Court of Common Pleas of Allegheny County granting a petition to quash criminal informations. The circumstances giving rise to this appeal are as follows. The appellee, Bruce Carsia, was arrested and charged with bribery,[1] obstructing the administration of law,[2] conspiracy,[3] and solicitation[4] by Special Agent Dennis Danask of the Bureau of Criminal Investigation [BCI], the investigative 236 arm of the Office of the Attorney General. The charges arose out of an alleged attempt by the appellee, an Allegheny County attorney, to bribe two municipal police officers to fix a case, which was then pending before a West Mifflin Township District Justice, against two of the appellee's clients.[5] The two officers reported the incident to their superiors, who contacted BCI. Investigation of the incident, including the interception and taping of wire and personal communications, was conducted solely by the BCI. After charges were filed, the prosecution of the case was assumed by the Office of the Attorney General through Executive Deputy Attorney General Robert L. Keuch, who signed the information, and through Deputy Attorney General Lawrence N. Claus. Prior to trial, the appellee, through counsel, filed a "Petition to Quash the Information/Request for Habeas Corpus or other Appropriate Relief." The petition alleged that the Office of the Attorney General lacked the requisite authority to prosecute the action, and that instead the district attorney of Allegheny County should prosecute the action. The petition further alleged that the Attorney General's sole grant of authority to prosecute was set forth in Section 205 of the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, No. 164 § 101 et seq, 71 P.S. § 732-101 et seq, and that the instant prosecution was not within any of the enumerated categories of that section, 71 P.S. § 732-205(a)(1)-(8). A hearing on the petition was conducted before the Honorable Bernard L. McGinley. The deputy attorney general presented argument and testimony to the effect that the investigation was conducted with the knowledge and consent of the Allegheny County District Attorney, and that the prosecution was being conducted in the manner in which the district attorney would have conducted it. At the 237 conclusion of the hearing, the court concluded that the Office of the Attorney General was not authorized to prosecute the action under the Commonwealth Attorneys Act. The court therefore ordered that the information be dismissed. The Commonwealth filed an "Application for Reconsideration of Defendant's Motion to Quash" alleging that the prosecution was authorized by Section 205(a)(1) and (2) of the Commonwealth Attorneys Act, 71 P.S. § 732-205(a)(1), (2). The application was denied by order of Judge McGinley on December 28, 1982. The office of Attorney General [hereinafter referred to as "Commonwealth"] immediately filed a notice of appeal. Herein, the Commonwealth asserts that the lower court erroneously dismissed the information. The Commonwealth argues that the Office of the Attorney General possessed the power and authority to prosecute the action both under, and apart from, the Commonwealth Attorneys Act. We find no merit in these arguments. Before discussing the merits of these arguments, we must dispose of two preliminary questions. The appellee argues that the instant appeal should be quashed because the Commonwealth has not been put out of court by the order of the lower court. The appellee alerts us to the fact that, subsequent to the dismissal of the instant information, an information charging the same offenses based on the same incident was filed by the Allegheny County District Attorney. The appellee argues that the Commonwealth is not out of court because the prosecution is being continued by the Commonwealth, merely through a different law firm. It is this kind of logic that gave the Sophists a bad name. Regardless of the merits or status of the prosecution being conducted by the district attorney, an order has been entered in the present action terminating the prosecution of the charges. This order is a final order under Pa.R.A.P. 341(c), from which the Commonwealth properly may appeal. 238 Furthermore, it is an appeal in which substantial rights and interests are at stake. Thus, we decline the appellee's invitation to quash this appeal. On the other matter, the Commonwealth would have us hold that the appellee lacks any standing to challenge the Attorney General's compliance with the Commonwealth Attorneys Act. The thrust of this argument is that the Act affords no express remedy wherein the Attorney General prosecutes an action for which there is no express grant of authority; consequently, it is argued that the remedy utilized by the lower court's dismissal of the information was improper. The Commonwealth's argument is viable only if the Commonwealth Attorneys Act is read in a vacuum devoid of other statutes and rules. The case at hand concerns not only the respective spheres of authority of the Attorney General and the district attorneys of the various counties, but also the basic requirements for a valid information. Both the legislature and the supreme court have promulgated requirements to be followed with respect to the filing of informations. Pa.R.Crim.P. 225(a) mandates that "the attorney for the Commonwealth . . . shall proceed by preparing an information and filing it with the court of common pleas." Pa.R.Crim.P. 225(b) provides that "[t]he information shall be signed by the attorney for the Commonwealth.. . ." The reason for the signature requirement was explicated in Commonwealth v. Emanuel, 501 Pa. 581, 462 A.2d 653 (1983) wherein it was stated: Basically, the interest sought to be protected by the signature requirement of Pa.R.Crim.P. 225 is the right of a citizen to be free from unjust or unduly oppressive government interference. In the context of the filing of a criminal information, this interest is protected in part, by our requirement in Pa.R.Crim.P. 225 that the information be signed by the government official authorizing the filing of the information. . . . Thus, due process requires that when the Commonwealth elects to file a criminal information against an individual, a particular identifiable 239 government official must be named on the information, that person must sign the information by manual or facsimile signature, and the signatory must be prepared to establish that the information meets all legal requirements, should he be called upon to do that by a court of competent jurisdiction. Id., 501 Pa. at 587-588, 462 A.2d at 656. It is axiomatic that in establishing that the information meets all legal requirements the person signing that information must show that he is authorized to conduct the prosecution. Otherwise the information cannot meet the requirement that "the prosecution is carried on in the name of and by the authority of the Commonwealth of Pennsylvania." Pa. R.Crim.P. 225(b)(1); see also Pa.R.Crim.P. 101A-Comment, which states: As used in this rule, "Attorney for the Commonwealth" is intended to include not only the District Attorney and any deputy or assistant district attorney in the county, but also the Attorney General, and any deputy or assistant attorney general, in those cases in the county which the Attorney General is authorized by law to prosecute. (Emphasis added). Alternatively, it is mandated by statute that "[t]he district attorney sign all informations." 42 Pa.C.S. § 8931(c). The statute continues in subsection (i) to define "district attorney" as including "a special attorney appointed by the Attorney General in the manner provided by statute." 42 Pa.C.S. § 8931(i). In criminal prosecutions, the Attorney General's power to delegate the responsibility of executing his function is set forth in Section 205(d) of the Commonwealth Attorneys Act, which states: (d) Powers when prosecuting. Whenever the Attorney General prosecutes a criminal action, or appeal, he may employ such special deputies as are necessary for that purpose; such deputies shall take the oath of office and be clothed with all the powers, and subject to all the limitations imposed by law upon district attorneys, including the power to sign informations or indictments. 240 Whenever the Attorney General intervenes in a criminal action, the costs incurred as a result of the intervention shall be paid by the Commonwealth. It is clear, however, that an Attorney General or any other official can only delegate an authority that that official possesses. Thus, unless the Attorney General was authorized to conduct the prosecution against the appellee, dismissal of the information was warranted. We note as a final preliminary matter, that the Commonwealth raises other matters under the rubric of "standing", i.e., an assertion that the appellee challenged his arrest via the petition to quash, and that such a challenge was waived as untimely filed; and an assertion that the appellee challenged the jurisdiction of the court. We dismiss these assertions as being grounded in a misconception of the issues in the case, and having done so, we shall proceed to the more substantial aspects of the appeal. The Commonwealth advances three arguments in support of its assertion that the lower court erred. We shall address these arguments in a manner which facilitates the exposition of the past problems the courts and the legislature have faced in delineating the bounds of the Attorney General's authority. The Commonwealth argues that under the Pennsylvania Constitution, the Attorney General was authorized to investigate and prosecute the charges against the appellee. On May 16, 1978, the electorate approved a "constitutional amendment creating the office of elected Attorney General to replace the officer appointed by the Governor under constitutional authority since 1874." (Emphasis added.) JOINT STATE GOVERNMENT COMMISSION: OFFICE OF ELECTED ATTORNEY GENERAL Final Report at 1 (1978). Pa. CONST. Art. 4, § 4.1 provides: § 4.1. Attorney General An Attorney General shall be chosen by the qualified electors of the Commonwealth on the day the general election is held for the Auditor General and State Treasurer; he shall hold his office during four years from the 241 third Tuesday of January next ensuing his election and shall not be eligible to serve continuously for more than two consecutive terms; he shall be the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law. The Commonwealth's argument is essentially that this provision contemplates that the Attorney General is vested with the authority which he possessed theretofore by virtue of common law, statutes, regulations and judicial pronouncements. Thus, the Commonwealth contends that the lower court erred in concluding that the only current source of authority by which the Attorney General may prosecute criminal cases is to be found in Section 205 of the Commonwealth Attorneys Act, 71 P.S. § 732-205. Rather, it is asserted the elected Attorney General is armed with the powers traditionally attributed to that office. We note that the Commonwealth's argument invokes the spirit of a half-century of jurisprudence in this state. During this period, the courts and the legislature have from time to time surveyed the boundaries of the Attorney General's authority and from time to time the scope of that authority has been changed. The issue is one which has bred strong disagreement as exhibited by vigorous and even vociferous dissents in our courts. Indeed, the precise measure of the Attorney General's authority in the area of criminal investigation is not static, but is instead a dynamic and protean concept. The question upon which our attention must focus is this: What is the basis for the authority of the office of the elected Attorney General to prosecute criminal actions? The root of our inquiry, Pa. CONST. Art. 4, § 4.1, only informs us that "he shall be the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law." The exact nature of the Attorney General's powers and duties is left undefined. The Commonwealth asserts that the words "as may be imposed by law" require us to consider all source of the law, and not merely the latest statutory enactment. It asserts that this construction is correct and cites the inclusion 242 of the phrase "he shall be chief law officer for the Commonwealth" as support for its argument. That phrase is said to be a term of art descriptive of the powers of the Attorney General under previous legislative enactments, see Act of April 9, 1929, P.L. 177, art. VII § 704, 71 P.S. § 244. Consequently, it is contended that its inclusion in the constitutional amendment, Pa. CONST. Art. 4, § 4.1, as well as in the current legislative enactment, the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, No. 164, § 101 et seq., 71 P.S. § 732-101, evidences a legislative intent to continue the power and authority of the Attorney General as it was prior to the constitutional amendment. We believe that reference to the historical powers of the Attorney General is necessary to the proper disposition of this issue. Pennsylvania has been a unique jurisdiction in the nature and scope of authority granted to its Attorney General. Until 1850, he was the sole repository of the power of law enforcement in this Commonwealth, enjoying the same powers and prerogatives that the Attorney General of England enjoyed at common law. By the Act of May 3, 1850, P.L. 654, § 1, the legislature created the office of county district attorney, to carry out the function of criminal prosecutions including that of signing all bills of indictment, theretofore executed by the Attorney General, his deputies or his designees.[6] The Attorney General could still intervene in a criminal prosecution if requested to do so by the president judge of the jurisdiction in which the prosecution was pending. See Act of March 12, 1866, P.L. 85, Act of May 2, 1905, P.L. 351, Act of June 7, 1923 Art. IX, P.L. 498, 550. See also Commonwealth v. McHale, 97 Pa. 397 (1881); Commonwealth v. Havrilla, 38 Pa.Super. 292 (1909). However, the division of authority between the attorney general and the local district attorneys remained unclear. It was certain that the district attorney had primary responsibility for local prosecutions. It was also clear that, by virtue of a series of statutes culminating in the Administrative Code of 1929, Act of April 9, 1929, P.L. 177, Art. 1, § 1 243 et seq., 71 P.S. § 51 et seq., the Attorney General had the power to intervene or "supersede" the district attorney under certain circumstances. Id. § 907, 71 P.S. § 297. Moreover, the Attorney General had the power "to investigate any violations, or alleged violations; of the laws of the Commonwealth which may come to [his] notice [and] . . . [t]o take such steps . . . as may be reasonably necessary to enforce the laws of the Commonwealth." Id. § 904, 71 P.S. § 294. It was not until Commonwealth v. Lehman, 309 Pa. 486, 164 A. 526 (1932), that the courts construed the provisions of Section 907 of the Administrative Code of 1929. In Lehman, the defendant objected, albeit belatedly, to the supersession of the district attorney by the Attorney General, who designated a deputy to prosecute the cases. The Attorney General's intervention was at the request of the president judge. The defendant contended that supersession was improper where there is no vacancy in the office of district attorney, nor incapacitation or disqualification of the district attorney. The court found no merit in the argument. Lehman unwittingly served as the sire of a generation of cases which saw the scope of the Attorney General's authority to prosecute criminal cases expand dramatically. The first born of this generation was Commonwealth ex rel. Minerd v. Margiotti, 325 Pa. 17, 188 A. 524 (1936), in which Justice (later Chief Justice) Schaffer consummately discoursed upon the common law history of the office of Attorney General from the most ancient roots in sixteenth century England. The court concluded that the Pennsylvania Attorney General enjoyed the same powers as his common law ancestors. As stated by the court: We conclude from the review of decided cases and historical and other authorities that the Attorney General of Pennsylvania is clothed with the powers and attributes which enveloped Attorneys General at common law, including the right to investigate criminal acts, to institute proceedings in several counties of the Commonwealth, to sign indictments, to appear before the 244 grand jury and submit testimony, to appear in court and to try criminal cases on the Commonwealth's behalf,[2] and, in any and all these activities to supersede and set aside the district attorney when in the Attorney General's judgment such action may be necessary. (Footnote omitted) (emphasis added). Id., 325 Pa. at 30-31, 188 A. at 529-530. Commonwealth ex rel. Minerd v. Margiotti, clearly bestowed on the Attorney General an authority superior to that which he enjoyed under the Administrative Code of 1929 in that the intervention decision was consigned to the Attorney General. Re Dauphin County Grand Jury Investigative Proceedings No. 1, 332 Pa. 289, 2 A.2d 783 (1938); Commonwealth v. Ryan, 126 Pa.Super. 306, 309, 188 A. 764, 766 (1937). By the Act of July 30, 1938, P.L. 17,[7] the Legislature put its imprimatur on the Minerd decision. The Act gave the Attorney General the "absolute discretion" to supersede a county district attorney in the investigation or prosecution of a criminal action. In Re Dauphin County Grand Jury Investigative Proceedings No. 3, 332 Pa. 358, 2 A.2d 809 (1938), the court interpreted the scope of that discretion to be a discretion consistent with those immutable principles which govern the administration of justice, that is, a discretion reasonably based upon the attendant pertinent circumstances from which its exercise arises, and which is the only range of discretion permissible to a judicial or quasi-judicial officer. Id., 332 Pa. at 365, 2 A.2d at 813. It was also in this case that the first criticism of the rule in Commonwealth ex rel. 245 Minerd v. Margiotti, supra, was unleashed. In a dissenting opinion, Justice Maxey stated that the court's discussion of, and reliance on, the common law authority of the Attorney General was superfluous under the facts of the case because the Attorney General's supersession of the district attorney was clearly authorized by Section 907 of the Administrative Code. Justice Maxey viewed the court's reliance on common law as mere dicta which was not binding on the court. He further expressed staunch disapproval of the Act of July 30, 1938, P.L. 17. This disapproval was borne out by the legislature's quick reversal in repealing that Act. Act of March 20, 1939, P.L. 8. Despite the abrogation of the legislative mandate, the rule of Commonwealth ex rel. Minerd v. Margiotti, supra, maintained its potency for over forty years. Gwinn v. Kane, 465 Pa. 269, 348 A.2d 900 (1975) (court, however, relied on statutory authority under Administrative Code of 1929); Packel v. Mirarchi, 458 Pa. 602, 327 A.2d 53 (1974); Commonwealth v. Fudeman, 396 Pa. 236, 152 A.2d 428, cert. denied, 361 U.S. 902, 80 S.Ct. 211, 4 L.Ed.2d 157 (1959); Matson v. Margiotti, 371 Pa. 188, 88 A.2d 892 (1952); Matson v. Jackson, 368 Pa. 283, 83 A.2d 134 (1951); Commonwealth ex rel. Margiotti v. Orsini, 368 Pa. 259, 81 A.2d 891 (1951); Appeal of Margiotti, 365 Pa. 330, 75 A.2d 465 (1950); Commonwealth v. Bardascino, 210 Pa.Super. 202, 232 A.2d 236 (1967). During its reign however, the rule was subject to scathing attacks by various members of the judiciary, commencing with that of Justice Maxey in Re Dauphin County Grand Jury Investigation Proceedings No. 3, supra. His antagonistic mantle was taken up by Justice (later Chief Justice) Jones in the Appeal of Margiotti, supra, who observed: Even a cursory reading of the opinions in those cases will readily disclose that no question as to common law power in the Attorney General to supersede a District Attorney of his own motion was present for decision. Indeed, the matter had never been passed upon at common 246 law for the all-sufficient reason that elected prosecuting officers were unknown to its political institutions. Ever since the creation of the offices of Attorney General and Solicitor General in England several centuries ago, prosecuting attorneys (beyond the two officers just mentioned) have been and still are the Attorney General's own appointees and, of course, subject to removal or supersession by him at his pleasure. Manifestly, no analogy can rightly be drawn between that system and the system which has obtained in Pennsylvania since the creation of the office of elective District Attorney by the Act of May 3, 1850, P.L. 654, Sec. 1, an office later, and still, ordained by the Constitution of 1874 (Art. XIV, Secs. 1 and 2). The idea that a mere political appointee, beholden to his appointer and not to the people for his tenure, can, of his own volition, set aside and supersede a duly elected constitutional officer runs counter to even the most limited conception of the republican form of democratic government which this Commonwealth was established to secure and maintain and which the National Government is charged by the Federal Constitution (Art. IV, Sec. 4) to guarantee to every State. (Emphasis in original). Id. 365 Pa. at 341-342, 75 A.2d at 470-71. See also Commonwealth v. Fudeman, supra, (concurring opinion by Jones, C.J.) Commonwealth ex rel. Margiotti v. Orsini, supra. (concurring opinion by Jones, J.) In Fudeman, Chief Justice Jones found new support in the person of Justice Musmanno, who spoke out with typical vigor and eloquence stating: It cannot be supported historically, statutorily, or jurisprudentially. There are several decisions of this Court which, from a standpoint of rote and poll-parrotism, warrant the present Majority in making the assertion it makes in this case, but the fact remains, nevertheless, that the Attorney General does not have and never did have the absolute power to decide for himself if, when, and to what extent he should take over the duties, functions and responsibilities of a District Attorney. 247 Within recent years the authority of the Attorney General has been overflowing the banks of constitutional channels until it threatens to inundate, smother, and choke local prosecuting authority. The time has come, and is indeed long past overdue, to bring the concept of the power of the Attorney General within its constitutional limitations. And the one to perform that job is this Court, because this Court has been mostly responsible for creating the fiction, the legend, and the absurdity that an appointed official with his office in Harrisburg, may at his pleasure take over the offices of district attorneys in 67 counties and run them to suit his own ideas of government, as well as his whim, caprice, and ambitions. Such a notion runs counter to every principle of American democracy where the power to govern stems from the people, and the people alone. In all the literature on the subject one cannot find any authority to justify the incredulous assumption that an appointed officer (the Attorney General) may displace, because of common law authorization, an officer elected by the people by mandate of the Constitution. * * * * * The Attorney General has tremendous powers but he is not, as the Majority Opinion would have us believe, omnipotent, ubiquitous, and omniscient in the entire legal realm of the State. Commonwealth v. Fudeman, supra, 396 Pa. at 253-255, 152 A.2d at 437-438. See generally, Id., 396 Pa. at 253-255, 152 A.2d at 437-448 (dissenting opinion by Musmanno, J). The rule was further criticized in the majority opinion in Packel v. Mirarchi, supra, which sustained the Attorney General's supersession of the Philadelphia District Attorney based on the Attorney General's statutory authority. Therein the court noted: [The] ruling was based not on the assumption such power was given statutorily, but rather on the premise 248 that such power "enveloped" attorney generals at common law and the Attorney General of Pennsylvania was "clothed" with the same power. This reasoning has been severely criticized. See Some Current Problems in Pennsylvania Law Attorney General versus District Attorney, 99 U.Pa.L.Rev. 814, 826 (1951), and Note, The Common Law Power of State Attorneys General to Supersede Local Prosecutors, 60 Yale L.J. 559 (1951). Furthermore, Pennsylvania seems to be the only jurisdiction which has approved the supersession of a district attorney on the basis of common law powers. Cf, C.J.S. Attorney General § 5, supra; People v. Hopkins, [182 Misc. 313] 47 N.Y.S.2d 222 (1944); Kemp v. Stanley, 204 La. 110, 15 So.2d 1 (1943); In Re Watson, 293 Mich. 263, 291 N.W. 652 (1940); People v. Flynn, 375 Ill. 366, 31 N.E.2d 591 (1940). Id. 458 Pa. at 605-606, 327 A.2d at 55. Finally, in Commonwealth v. Schab, 477 Pa. 55, 383 A.2d 819 (1978), the tide was turned and the supreme court repudiated Minerd and its progeny. As stated by the court: We no longer adhere to this view. Simply because the Attorney General had the common law power to replace his own deputies does not justify the conclusion that he now has the same right to supersede an elected District Attorney, an officer unknown to the common law. It would be incongruous to place the district attorney in the position of being responsible to the electorate for the performance of his duties while actual control over his performance was, in effect, in the Attorney General. To countenance such a separation of accountability and control undermines self-government and promotes centralization, see Commonwealth v. Fudeman, 396 Pa. 236, 152 A.2d 428, 438-40 (1959) (Musmanno, J. dissenting), of law enforcement precisely the approach rejected in Pennsylvania by statute in 1850 and constitutionally in 1874. Id., 477 Pa. at 61, 383 A.2d at 822. The Schab court, in addition to abolishing the Attorney General's common law authority to investigate and prosecute 249 criminal cases, also reinterpreted Sections 904 and 907 of the Administrative Code of 1929, 71 P.S. §§ 294, 297, in an attempt to harmonize those sections. The court interpreted Section 904 to allow the Attorney General seeking to supersede a county district attorney to petition the president judge of the proper jurisdiction to allow supersession. The Attorney General must therefore "establish good cause for the supersession." Id., 477 Pa. at 65, 383 A.2d at 824. However, the continued reliance of this aspect of Schab is suspect in light of the subsequent repeal of Sections 904 and 907 of the Administrative Code of 1929 by the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, No. 164, § 503, 71 P.S. § 732-503, and the incorporation of more comprehensive procedures in the new act to account for the Schab decision. Subsequent to Schab, we arrive again at the starting point of inquiry, that is, Art. 4, § 4.1 and the Commonwealth Attorneys Act. Having come full circle, we state as a conclusion that the short historical digression shows a continuing conflict in the courts and in the legislature over the respective spheres of authority of the Attorney General and the district attorneys. The Commonwealth asserts that by the inclusion of certain language in Art. 4, § 4.1, and in the Commonwealth Attorneys Act, it was intended to perpetuate this conflict. We cannot agree with this assertion. We believe it is evident that both the courts and the legislature have repudiated the past. The courts did so by means of the decision in Commonwealth v. Schab, supra; the legislature by the repeal of the portions of the Administrative Code of 1929. The only remaining source of authority which defines the scope of the Attorney General's power to investigate and prosecute criminal actions is the Commonwealth Attorneys Act. We conclude that it is the sole source of that power. Indeed, we find it indisputable that the legislature intended any different result. Pursuant to Senate Resolution No. 61, 1977, the Joint State Government Commission formed a Task Force to comprehensively study the office of 250 the elected Attorney General and to draft legislation to implement the constitutional amendment providing for that office. The Task Force executed these functions and drafted a proposed bill which, after some amendments not relevant herein, was enacted as the Commonwealth Attorneys Act.[8] Our conclusion that the legislature intended a break with the past is supported by the Final Report issued by the Task Force, which states: Underlying the legislative recommendations of the task force are five general concepts on which there was substantial consensus: 1. Legislation enacted by the General Assembly is the exclusive source of the powers and duties of the elected Attorney General pursuant to Article IV, Section 4.1, which provides in part that the Attorney General ". . . shall be the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law." (Footnote omitted). JOINT STATE GOVERNMENT COMMISSION TASK FORCE ON THE OFFICE OF ELECTED ATTORNEY GENERAL FINAL REPORT at 4 (1978). It must be remembered that with the repeal of the relevant provisions of the Administrative Code of 1929, the Commonwealth Attorneys Act is the only legislation delineating the powers of the Attorney General. The Task force further stated: 4. The elected Attorney General must serve as the independent chief law-enforcement officer to investigate and, where appropriate, prosecute criminal charges of wrongdoing by State officials and employees and by persons engaged in widespread organized corruption. The delicate 251 balance between providing a vigorous statewide chief law-enforcement officer while not impinging upon the jurisdiction and duties of the constitutionally created office of county-elected district attorney led to careful consideration of the scope and implementation of the criminal jurisdiction of the elected Attorney General. (Emphasis in original). These statements are convincing evidence of the legislative intent to limit the Attorney General's authority in the investigation and prosecution of criminal actions to those instances expressly set forth in the Commonwealth Attorneys Act. We are constrained to heed these statements in interpreting the Act. 1 Pa. C.S. § 1939; 1 Pa. C.S. § 1921(a), (c)(7). Therefore, we hold that the Attorney General can only investigate and prosecute criminal actions within the confines of the Commonwealth Attorneys Act. Having so concluded, we must reject the Commonwealth's attempted resurrection of the body of law which pre-existed Art. 4, § 4.1. If we might twist our prior analogy slightly, and equate the Office of Attorney General with the Phoenix, the latest incarnation has emerged into a world of changed and more limited circumstances; its powers having been bridled by the legislature. The focus of our inquiry must now shift to the question of whether the instant prosecution was authorized by the Commonwealth Attorneys Act. Section 205 of the Commonwealth Attorneys Act, 71 P.S. § 732-205,[9] sets forth the scope of the Attorney General's 253 power to prosecute criminal actions. The Commonwealth contends that the instant prosecution is authorized by Section 205(a)(1), or in the alternative by Section 205(a)(2). Under Section 205(a)(1), the Attorney General is authorized to prosecute criminal charges against "state officials or employees affecting the performance of their public duties," and against "persons attempting to influence such state officials or employees." The Commonwealth advances three grounds for prosecution under this subsection. First that the Attorney General can prosecute Carsia, an attorney, as a state official; second, that the Attorney General can prosecute Carsia for attempting to influence a district justice, a state official; and third, that the Attorney General can prosecute Carsia for attempting to bribe the two municipal police officers, who, it is asserted are state officials or employees. These assertions are without merit. In support of its first assertion, the Commonwealth directs our attention to 42 Pa.C.S. § 2521 which describes the "office of attorney-at-law," and Section 2522 describing the oath to be taken before entering the "office." The Commonwealth argues that these provisions establish attorneys-at-law as State officials. The Commonwealth further cites Pa. CONST. Art. 4 Sec. 6 in support of its assertion.[10] We refuse to subscribe to the Commonwealth's argument. Although there is no specific authority on this point, we note that an attorney is not a state officer so as to bring his actions within the purview of the Civil Rights Act, 42 U.S.C. § 1983. Brown v. Joseph, 463 F.2d 1046, (3d Cir. 1972), cert. denied, 412 U.S. 950, 93 S.Ct. 3015, 37 L.Ed.2d 1003 (1973); Steward v. Meeker, 459 F.2d 669 (3d Cir. 1972); Habda v. Wysocker, 458 F.2d 537 (3d Cir. 1972). Moreover, we note that in Commonwealth v. Garrison, 478 Pa. 356, 254 386 A.2d 971 (1978), the court held that an attorney is not an "officer" for purposes of 17 P.S. § 2041, giving courts the power to punish its officers for official misconduct. We conclude that an attorney was not intended as a "State officer" under Section 205(a)(1) of the Commonwealth Attorneys Act. Therefore the present prosecution cannot be grounded on that basis. The Commonwealth next argues that the prosecution falls within Section 205(a)(1) because Carsia was attempting to influence a district justice, who is a state officer. A district justice has been held to be an officer of the Commonwealth, that is, an officer of statewide jurisdiction, for the purposes of the Appellate Court Jurisdiction Act. Collins v. Gessler, 452 Pa. 471, 307 A.2d 892 (1973). However, the Commonwealth's assertion distorts the facts. There is no allegation that Carsia ever attempted to influence the district justice. His bribery attempt was directed toward the two police officers. Consequently, reliance on this assertion is likewise fruitless. The Commonwealth finally argues that the prosecution is authorized because it involves an attempt to influence state officials or employees, the two police officers. In Commonwealth v. Bausewine, 354 Pa. 35, 46 A.2d 491 (1946), a police officer challenged his conviction of common law bribery on the ground that he should have been convicted under [then] section 303 of the Crimes Code, 18 P.S. § 4303, which prohibited bribery of "state officers, judges, jurors, etc." The court rejected the challenge stating: A careful study of section 303, however, convinces us that it was the legislative intent to single out those officers directly responsible to the government of the Commonwealth of Pennsylvania in its statewide sense who prove unfaithful in the exercise of the sovereignty of the Commonwealth. It was not the intendment to include in this section such local public officer as a borough chief of police. In this connection, we agree with President Judge Baldrige that: "Section 300 * * * relates to a thing to be attained or influenced by a bribe. `Vote, opinion, 255 verdict, award, judgment, decree or behavior' are specified. A chief of police has no official relation with any of those matters. Those who come within the provisions of that section are legislators, judges, jurors, etc., who make up the legislative and judicial branches of our government. They are the officers of the Commonwealth within the purview of the statute. Nothing is said in this section about municipal officers. Then we go further and examine sections 304 and 305, 18 P.S. §§ 304, 4305, dealing with a corrupt solicitation and the practice of corrupt solicitation of `municipal officers' and `public officers of the State or of any political subdivision thereof.' If the legislature had meant to embrace within section 303 municipal officers, it would have said so definitely as it did in sections 304 and 305." Therefore, this argument of defendant is without merit. Id., 354 Pa. at 37-38, 46 A.2d at 492. In reliance on Bausewine, we conclude that municipal police officers are likewise not state officials or employees. Consequently, we find no authorization for the Attorney General to prosecute the instant case under Section 205(a)(1). The Commonwealth alternatively argues that prosecution is authorized under Section 205(a)(2) which empowers the Attorney General to prosecute "criminal charges involving corrupt organizations as provided for in 18 Pa.C.S. § 911 (relating to corrupt organizations)." The Attorney General and the district attorneys of the several counties shall have concurrent authority to institute criminal proceedings under the provisions of this section. It is indisputable that the Attorney General has the power to prosecute a defendant charged with corrupt organizations. The Commonwealth, however, has never charged the appellee, Carsia, with violating 18 Pa.C.S. § 911. It asserts however that by virtue of the offenses charged (See n. 1-4 supra), the predicates for such a prosecution have been established, and consequently, it would have this court hold that the Attorney General has the power to prosecute a criminal action wherein the offense of corrupt organizations 256 might conceivably have been charged. The Commonwealth's argument is insupportable. The language of Section 205(a)(2) clearly and unambiguously grants the Attorney General the power to engage in prosecutions under 18 Pa.C.S. § 911. However, this grant of authority must be limited to its express terms. It cannot be expanded upon by this court acting on the mere speculation of the Commonwealth that the present action was one which could have involved a violation of 18 Pa.C.S. § 911. We note that not only was the appellee not charged with corrupt organizations, but that the affidavit of probable cause in support of the arrest warrant makes no mention of this possibility. Moreover, the Commonwealth did not raise this argument until after the court order dismissing the informations, in its petition for reconsideration. We note that even at that point, the Commonwealth did not move to amend the informations to include a charge of corrupt organizations. We find no merit in the Commonwealth's argument that the prosecution below was sanctioned by the Commonwealth Attorneys Act. The Commonwealth finally argues that the Commonwealth Attorneys Act authorized the investigation conducted by BCI. We will not address this issue since it is superfluous to our decision herein. Both the lower court and this court have decided this case on the basis that the Attorney General lacked the authority to prosecute the action. The investigation by BCI is irrelevant. We hold, therefore, that the information signed by the deputy attorney general is defective on its face because it was signed by a person who had no authority to prosecute the case. We recall the words of Justice Musmanno, who stated: "The signature might just as well have been that of a strolling tourist trying out his penmanship on a piece of paper in the courthouse. . . ." Commonwealth v. Fudeman, supra, 396 Pa. at 255, 152 A.2d at 438. Consequently, 257 dismissal of the informations was proper. The order of the lower court is affirmed. Order affirmed. SPAETH, President Judge, files concurring opinion. WICKERSHAM, J., files dissenting statement. SPAETH, President Judge, concurring: I join the majority's opinion, which I admire, and write separately only to comment a bit more fully on why the order in question is final and therefore appealable. Appellee argues that the order is interlocutory because, not only has the Commonwealth not been put "out of court", it is still in court, prosecuting appellee. The difficulty with this argument is that it rests upon too literal a reading of the term "out of court." As we have explained, . . . the phrase "out of court" must not be interpreted literally; it is not synonymous with "final." In Commonwealth v. Orsatti, 448 Pa. 72, 75-76, 292 A.2d 313, 315 (1972), the Supreme Court in refusing to quash an appeal, said: "[W]e do not mean to suggest that a final judgment on the original issue raised by the complaint could not have been awaited by the defendants or that, upon appealing from such final judgment, the action of the court below, . . . . could not then have been assigned for error. But, obviously, such a course would not have afforded expeditious procedure for the ultimate disposition of the entire controversy," quoting Broido v. Kinneman, 375 Pa. 568, 569, 101 A.2d 647, 648 (1954). See also, Posternack v. American Casualty Co., 421 Pa. 21, 218 A.2d 350 (1966); Pellegrine v. Home Ins. Co., 200 Pa.Superior Ct. 48, 186 A.2d 662 (1962). It is therefore plain that in deciding whether an order is "final," one must do more than ask only whether the appellant is "out of court;" one must also ask whether, even if the appellant is still in court, the order is in its "practical aspects," Bell v. 258 Beneficial Consumer Discount, [465 Pa. 225, 348 A.2d [734] 735 (1975)], sufficiently final to make it appealable. Gordon v. Gordon, 293 Pa.Super. 491, 499-500, 439 A.2d 683, 687 (1983) (en banc). Thus, "[w]hether an order is final and appealable cannot necessarily be ascertained from the face of the decree alone, nor simply from the technical effect of the adjudication. The finality of an order is a judicial conclusion which can be reached only after an examination of its ramifications [,] . . . [and] a finding of finality must be the result of a practical rather than a technical construction." Bell v. Beneficial Consumer Discount Co., 465 Pa. 225, 228, 348 A.2d 734, 735 (1975), citing Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Consistent with this analysis, a variety of orders have been held to be final and appealable even though they did not literally put a litigant "out of court." See, e.g., T.C.R. Realty, Inc. v. Cox, 472 Pa. 331, 337, 372 A.2d 721, 724 (1977) (where order dismissing complaint with prejudice did not put litigant out of court because counter-claim had been filed, order held final because it had "practical ramification [of] . . . completely depriv[ing] the litigant of his day in court so far as his claim is concerned."); Commonwealth v. Orsatti, 448 Pa. 72, 76, 292 A.2d 313, 315 (1972) (where order dismissing preliminary objections with leave to amend complaint had practical effect of denying litigant an opportunity to litigate claim to damages, order held final because "as to the [money that Orsatti was precluded from claiming, he] was put out of court."); Bell v. Beneficial Consumer Discount Co., supra 465 Pa. at 229, 348 A.2d at 736 (order denying class certification possesses sufficiently practical aspects of finality to be appealable even though order may leave named plaintiff in court and does not alter cause of action.); Freeze v. Donegal Mutual Insurance Co., 301 Pa.Super. 344, 447 A.2d 999 (1982) (en banc) (order denying estate ability to collect work-loss benefits under No-Fault Act, but allowing leave to amend complaint to seek other 259 benefits under Act, held final because estate was "out of court" as far as work-loss benefits were concerned); Gordon v. Gordon, supra (order denying wife's application to proceed under new Divorce Code held final, even though it left her free to pursue the action under old law, because practical effect of order was to put her out of court regarding claims allowable only under Code.) Here, the Commonwealth, through the Office of the Attorney General, attempted to prosecute appellee under the authority of the Commonwealth Attorneys Act, 71 Pa.C.S. § 732-205(a)(1), (2). The trial court's order dismissing the information provides: AND NOW, TO WIT, this 1st day of December, 1982, after hearing, and on consideration of the defendant's petition, the information is dismissed, it appearing that the Office of the Attorney General of Pennsylvania does not have the power to investigate or prosecute the alleged criminal offense. This order certainly puts the Commonwealth "out of court" regarding its claim of statutory authority under 71 Pa.C.S. 732-205(a)(1) and (2). Moreover, were we to hold the order to be interlocutory, the practical effect would be to deny the Commonwealth the opportunity to litigate the merits of its claim to such authority, for by the terms of the order, only a local district attorney may pursue this prosecution. See Brennan v. General Accident Fire & Life Assurance Corp., 307 Pa.Super. 288, 291, 453 A.2d 356, 357 (1982) ("Sometimes an order will not literally put the appellant out of court but still it will be appealable because as a practical matter the appellant will be unable to present his claim.") Such a result would not further the underlying policy of the finality rule of preventing piecemeal litigation and promoting judicial economy, see Gordon v. Gordon, supra, for it would only force the Commonwealth to litigate this issue again. Accordingly, since the Commonwealth is, for all practical purposes, put "out of court" by the trial court's order regarding its claim under the Commonwealth Attorneys 260 Act, I conclude that the order is final under Pa.R.A.P. 341(c).[1] WICKERSHAM, Judge, dissenting: I would reverse the lower court which granted a petition filed by appellee Bruce Carsia quashing the criminal information. As the Attorney General argued: The Attorney General, as chief law enforcement officer of the Commonwealth, had the authority to prosecute Bruce Carsia, an attorney at law, for attempting to bribe two police officers and fix a preliminary hearing. The prosecutorial and investigative powers of the Attorney General as determined by decisions of the Pennsylvania Supreme Court, are broad and vast. The lower court erred by concluding otherwise and by quashing the criminal informations filed by the Attorney General. The Attorney General was authorized to investigate and prosecute Carsia by virtue of the Commonwealth Attorneys Act. Carsia's actions of trying to fix a preliminary hearing was an attempt to influence or benefit from the influencing of a state official or employee. Additionally, Carsia's actions amount to a violation of 18 Pa.C.S. § 911 (corrupt organizations). Finally as a licensed attorney at law, Carsia was a state official as that term is defined in the Commonwealth Attorneys Act. *261 Agents of the Attorney General's Bureau of Criminal Investigation are vested with full police power of investigation and arrest. Therefore, the investigation and subsequent arrest of Carsia by Agents of the Bureau of Criminal Investigation was lawful. Carsia had no standing to challenge whether the Attorney General, the chief law enforcement officer of the Commonwealth has the authority to prosecute him. Such a challenge rests with the district attorney. Furthermore, the district attorney agreed that the Attorney General should investigate and prosecute the case sub judice.[1] I agree. NOTES [1] 18 Pa.C.S. § 4701. [2] 18 Pa.C.S. § 5101. [3] 18 Pa.C.S. § 903 [4] 18 Pa.C.S. § 902 [5] The clients were to go before the district justice for a preliminary hearing on charges arising from the theft of merchandise valued at six thousand ($6,000.00) dollars from a local department store. [6] 16 P.S. § 9952. [7] The Act stated in pertinent part: The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows: Section 1. In any investigation or proceeding whatsoever pending before any court of oyer and terminer and general jail delivery or before any court of quarter sessions in any county of this Commonwealth, the Attorney General of the Commonwealth may, at any state of the investigation or proceeding, in his absolute discretion, supersede and set aside the district attorney of the county. [8] The proposed bill drafted by the Task Force was filed initially as S.B. 1595 and H.B. 2663 on September 11, 1978. It is not necessary for our present purpose to totally recount the legislative history of the Act; however, the relevant provisions of the proposed bill, Section 205, Criminal Prosecutions, and Section 206, Criminal Investigations, were substantially the same as those enacted as Sections 205 and 206 of the Commonwealth Attorneys Act. We note that amendments were made to Section 205(a)(4) and (8), and to Section 206(b). The amendments, however, do not affect our reasoning or our result. [9] § 732-205. Criminal prosecutions. (a) Prosecutions. The Attorney General shall have the power to prosecute in any county criminal court the following cases: (1) Criminal charges against State officials or employees affecting the performance of their public duties or the maintenance of the public trust and criminal charges against persons attempting to influence such State officials or employees or benefit from such influence or attempt to influence. (2) Criminal charges involving corrupt organizations as provided for in 18 Pa.C.S. § 911 (relating to corrupt organizations). (3) Upon the request of a district attorney who lacks the resources to conduct an adequate investigation or the prosecution of the criminal case or matter or who represents that there is the potential for an actual or apparent conflict of interest on the part of the district attorney or his office. (4) The Attorney General may petition the court having jurisdiction over any criminal proceeding to permit the Attorney General to supersede the district attorney in order to prosecute a criminal action or to institute criminal proceedings. Upon the filing of the petition, the president judge assigned shall hear the matter within 30 days after appointment and make a determination as to whether to allow supersession within 60 days after the hearing. The district attorney shall be given notice of the hearing and may appear and oppose the granting of the petition, Supersession shall be ordered if the Attorney General establishes by a preponderance of the evidence that the district attorney has failed or refused to prosecute and such failure or refusal constitutes abuse of discretion. (5) When the president judge in the district having jurisdiction of any criminal proceeding has reason to believe that the case is a proper one for the intervention of the Commonwealth, he shall request the Attorney General to represent the Commonwealth in the proceeding and to investigate charges and prosecute the defendant. If the Attorney General agrees that the case is a proper one for intervention, he shall file a petition with the court and proceed as provided in paragraph (4). If the Attorney General determines that the case is not a proper case for intervention, he shall notify the president judge accordingly. (6) Criminal charges investigated by and referred to him by a Commonwealth agency arising out of enforcement provisions of the state charging the agency with a duty to enforce its provision. (7) Indictments returned by an investigating grand jury obtained by the Attorney General. (8) Criminal Charges arising out of activities of the State Medical Fraud Control Unit as authorized by Article XIV (relating to fraud and abuse control, act of June 13, 1967 (P.L. 31, No. 21), known as the "Public Welfare Code,"[1] and the Federal law known as the "Medicare-medicaid Antifraud and Abuse Amendments."[2] (b) Concurrent jurisdiction to prosecute. The Attorney General shall have the concurrent prosecutorial jurisdiction with the district attorney for cases arising under subsection (a)(1), (2) and (6) and may refer to the district attorney with his consent any violation or alleged violation of the criminal laws of the Commonwealth which may come to his notice. (c) Criminal appeals. In any criminal action in which there is an appeal, the Attorney General may in his discretion, upon the request of the district attorney, prosecute the appeal; he may intervene in such other appeals as provided by law or rules of court. (d) Powers when prosecuting. Whenever the Attorney General presents a criminal action, or appeal, he may employ such special deputies as are necessary for that purpose, such deputies shall take the oath of office and be clothed with all the powers and subject to all the liabilities imposed by law upon district attorneys, including the power to sign informations or indictments. Whenever the Attorney General intervenes in a criminal action, the costs incurred as a result of the intervention shall be paid by the Commonwealth. (Footnotes omitted) [10] § 6. Disqualification for offices of Governor, Lieutenant Governor and Attorney General. No member of Congress or person holding any office (except of attorney-at-law or in the National Guard or in a reserve component of the armed forces of the United States) under the United States or this Commonwealth shall exercise the office of Governor, Lieutenant Governor or Attorney General. (Emphasis added). [1] The cases appellant cites are not to the contrary. They simply stand for the proposition that when an order is not "in its `practical aspects' sufficiently final to make it appealable," Gordon v. Gordon, supra 293 Pa.Super. at 500, 439 A.2d at 687, citing Bell v. Beneficial Consumer Discount Co., supra, because some other procedure enables the litigant to be heard on the merits, then the general finality rule will render the order unappealable. See, e.g., Flanagan et al. v. United States, 465 U.S. 259, 104 S.Ct. 1051, 1055, 79 L.Ed.2d 288, 295 (1984) (order disqualifying counsel lacks "critical characteristics" that render pretrial order immediately appealable because, among other reasons, the claim "is in no danger of becoming moot upon conviction and sentence. . . ."); In Re Riggins, 435 Pa. 321, 254 A.2d 616 (court quashes Commonwealth appeal from order discharging appellant for failure to make out prima facie case because Commonwealth could rearrest and therefore was not out of court); Commonwealth v. Gore, 279 Pa.Super. 622, 421 A.2d 372 (1980) (court holds order refusing Commonwealth motion to amend information not appealable because Commonwealth could nolle pros and commence new prosecution.) [1] Brief for Appellant at 8-9.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265492/	491 A.2d 341 (1985) STATE of Vermont v. James EMILO, Sr. No. 82-412. Supreme Court of Vermont. February 22, 1985. 342 John T. Quinn, Addison County Deputy State's Atty., Middlebury, for plaintiff-appellee. Andrew B. Crane, Defender General, and William A. Nelson, Appellate Defender, Montpelier, for defendant-appellant. Before HILL, UNDERWOOD, PECK and GIBSON, JJ., and DALEY, J. (Ret.), specially assigned. PECK, Justice. Defendant, James Emilo, appeals his conviction, after jury trial, for operating a motor vehicle under the influence of intoxicating liquor (DUI) in violation of 23 V.S.A. § 1201(a)(2). We affirm. Defendant submits two claims of error for our review. First, that the trial court erred in instructing the jury on inferences it was permitted to draw from defendant's refusal to submit to a breath test; second, that the police officer's failure to advise defendant that any refusal to take a breath test would be admissible against him at trial rendered the request invalid and requires reversal. The facts as disclosed by the record, to the extent that they relate to the issues raised, are as follows. On June 16, 1982, a Middlebury police officer patrolling in his cruiser encountered a vehicle with an improperly loud exhaust. The officer stopped the vehicle, identified the defendant as the driver, and asked him to produce his license and registration. Defendant responded that he did not have a license and did not need a registration. The officer detected the odor of alcohol on defendant's breath, and observed that his eyes were watery and bloodshot. At the officer's request defendant started walking towards the police cruiser; in doing so he was unsteady on his feet and held onto the side of his vehicle. He stopped beside the trunk of his car and refused to go further. Ultimately, defendant was handcuffed, placed in the cruiser and taken to the police station for DUI processing. In the course of processing the defendant, the officer asked him to take a breath test and informed him that a refusal could 343 result in the suspension of his license to drive. Defendant refused to take the test. At the close of all the evidence and arguments the trial judge instructed the jury, in part, as follows: In this particular case there has been evidence presented that the defendant refused to take a breath test, an evidentiary breath test. Under the law in the state of Vermont, a police officer, if he has reasonable grounds to believe someone is operating a motor vehicle under the influence of intoxicating liquor as I described it to you, has the right to ask for a breath test or evidentiary test. While the officer has a right to ask that there is no requirement that an operator has to take it. An operator has a right to refuse the test. The purpose of the test is to provide chemical analysis of the defendant's blood-alcohol content. In cases where there are tests certain inferences can be drawn from the results. In this case, since there is no test, it is the court's instruction that you may draw from the defendant's refusal to take the test such inferences that the totality of the circumstances would indicate to you. You are entitled to draw the inference that the defendant is exercising his rights in refusing to take the test, and that's all there is to it. You may also draw an inference the defendant chose not to take the test because he was concerned about the results. You are not required to take any inference nor are you required to use the refusal as the determining factor in the case, but it is available to you for what inference you feel is consistent with the totality of the circumstances in the case. Defendant thereafter moved for a mistrial, arguing that the court "had usurped the province of the jury" when it suggested inferences the jury might draw. The court denied the motion, but amended its instructions: Counsel remind me things more appropriately might have been said. During the course of instruction we did discuss this point, the test refusal. As I instructed you, you are permitted to draw certain inferences. You can draw none at all and just ignore it, you can draw an inference the defendant was doing nothing more than exercising his statutory right which he has, or if you wish you may draw an unfavorable inference. Now, should you draw an unfavorable inference that inference in and of itself is not sufficient to overcome the presumption of innocence. You must have other evidence in order to base a conviction. In other words, defendant's refusal to take the test in and of itself and by itself cannot be a basis for conviction. The jury returned a verdict of guilty and the trial judge entered judgment; this appeal followed. I. Defendant's first claim of error concerns the jury instruction regarding evidence that defendant refused to submit to the breath test and the inferences that may be drawn from that evidence of refusal. At the outset, the law is clear that, in a prosecution for driving under the influence, the State is entitled to present evidence of the defendant's refusal to submit to an evidentiary test. 23 V.S.A. § 1205(a); South Dakota v. Neville, 459 U.S. 553, 564, 103 S.Ct. 916, 923, 74 L.Ed.2d 748 (1983); State v. Brean, 136 Vt. 147, 151-52, 385 A.2d 1085, 1088 (1978). However, in his challenge to the trial court's instructions regarding the inferences which the jury might draw from a refusal, defendant accuses the court of failing to give a balanced, or as he characterizes it, an "evenhanded" instruction on inferences. He relies on State v. Brisson, 119 Vt. 48, 117 A.2d 255 (1955), as authority for his argument that the court has a duty to give such an instruction. In Brisson, the State introduced evidence of defendant's "faulty locomotion and coordination" in operating his motor vehicle and in his performance of certain tests as indicia of intoxication. Id. at 52-53, 117 *344 A.2d at 257. In rebuttal, the defendant presented evidence that his abnormal coordination and locomotion resulted from symptoms of multiple sclerosis. In instructing the jury, however, the court failed to make any reference to this evidence. This Court said that the "instructions indicated a course in but one direction. Failure to make any reference to the defense raised by the evidence may well have closed that course to the exploration of the jury." Id. at 53-54, 117 A.2d at 258. In short, the trial court failed to charge fully and correctly upon each point indicated by the evidence, and accordingly, we reversed. In Brisson "the trial court neglected to give any instructions at all regarding the defendant's theory of the case," State v. Billado, 141 Vt. 175, 188, 446 A.2d 778, 785 (1982). However, in the case at bar the court did instruct the jury, in effect, on the defendant's theory that his refusal to take the test was an act from which one need not infer intoxication. In its charge, the trial court referred to certain permissive inferences which could be drawn from the refusal evidence. One of the inferences pointed toward guilt (defendant "was concerned about the results"), the other did not point towards guilt (defendant "was exercising his rights in refusing to take the test, and that's all there is to it."). Further, the court instructed the jury that they need not draw any inference but if they took an unfavorable one "that inference in and of itself is not sufficient to overcome the presumption of innocence. You must have other evidence ... [upon which] to base a conviction." The instructions were consistent with Brisson, and, when taken as a whole and not piecemeal, there is no fair ground to say that the jury was misled. State v. Dusablon, 142 Vt. 95, 98, 453 A.2d 79, 81 (1982). We find no error in the charge. II. Defendant's second claim of error concerns the arresting officer's failure to advise him that a refusal to take the breath test would be admissible against him at trial. He contends that this failure results in an insufficient request that he submit to the test. In support of his argument he cites State v. Lund, 144 Vt. 171, 176, 475 A.2d 1055, 1059 (1984), construing 23 V.S.A. § 1202(a) to require those law enforcement officers who are qualified to administer the breath test to "offer" the test to a DUI suspect. For purposes of this case we need not determine whether our holding in Lund should be extended in accordance with defendant's theory. The issue is raised here for the first time. We have held repeatedly that claims of error not raised below must constitute plain error to warrant reversal. V.R.Cr.P. 52(b); State v. Boucher, 144 Vt. 276, 282, 478 A.2d 218, 222 (1984). We hold that, assuming there was error at all, it did not rise to the level of plain error; accordingly we will not scrutinize defendant's second issue. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2266457/	461 F.Supp. 160 (1978) Eleanor P. MARCHWINSKI and Margaret A. Samson, on behalf of themselves and on behalf of all other persons similarly situated, Plaintiffs, v. OLIVER TYRONE CORPORATION, Oliver Realty, Inc., Pittsburgh Buildings Association, on behalf of themselves and Oliver Tyrone Corporation on behalf of all other persons similarly situated, and Building Service Employees' International Union, AFL-CIO, Pittsburgh Local # 29, Defendants. Civ. A. No. 76-72. United States District Court, W. D. Pennsylvania. November 9, 1978. 161 162 163 Roslyn M. Litman, Howard A. Specter, Litman, Litman, Harris & Specter, Pittsburgh, Pa., for plaintiff. Robert W. Hartland, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for Oliver Realty & Pittsburgh Realty Assoc. Herman L. Foreman, Rothman, Gordon, Foreman & Groudine, Pittsburgh, Pa., for Local # 29. Judd N. Poffinberger, Thomas R. Johnson, Kirkpatrick, Lockhart, Johnson & Hutchison, Pittsburgh, Pa., for Oliver Tyrone Corp. OPINION COHILL, District Judge. History of the Case This action was brought by two named-plaintiffs, Eleanor P. Marchwinski and Margaret A. Samson, cleaning personnel at Oliver Plaza in Pittsburgh, as a class action under Fed.R.Civ.P. 23(b)(2) against the Oliver Tyrone Corporation ("Oliver Tyrone"), Oliver Realty, Inc. ("Oliver Realty"), the Pittsburgh Building Association ("P.B.A.") and Building Service Employees' International Union, AFL-CIO, Pittsburgh Local # 29 ("Local # 29" or the "Union"). Oliver Tyrone and Oliver Realty are closely related, the latter having been a wholly-owned subsidiary of the former at the time this suit was instituted. P.B.A. is an unincorporated association which, according to the allegations of the complaint, acts as the agent of various owners, operators, or managers of office buildings in Pittsburgh for the purpose of negotiating labor agreements with the Union; the plaintiffs' complaint lists over fifty buildings allegedly involved. Defendant Local # 29 is a labor union to which the representative plaintiffs, and those they claim to represent, belong. The named plaintiffs filed sex discrimination charges against Oliver Realty, Oliver Tyrone, and Local # 29 with the Equal Employment Opportunities Commission ("EEOC") in 1973 and 1974 and subsequently received "right to sue" notices. In their complaint, plaintiffs set out five separate causes of action in five counts: Count 1 alleges sex discrimination in employment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. This count alleges that "[s]ince July 2, 1965, and for years prior thereto, defendants Oliver Tyrone, Oliver Realty and Union have individually and in concert enacted and effected employment policies and procedures of discrimination against females." Count 2 alleges that the defendants combined and conspired to deprive plaintiffs of equal employment opportunities in violation of the Civil Rights Act of 1861, 42 U.S.C. § 1985(3), and in violation of the Fifth and Fourteenth Amendments of the Constitution. Count 3 alleges that the defendants unlawfully agreed, combined, and conspired "to boycott women and to prevent women from obtaining higher paying jobs" and to otherwise restrain trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and § 4 of the Clayton Act, 15 U.S.C. § 15. 164 Count 4 alleges that the Union "has breached its duty of fair representation to . . . Plaintiffs. [It] has not properly processed grievances . . . and has not, in general, adequately represented Plaintiff class in day-to-day labor relations with management and contract negotiations" in violation of the Labor Management and Relations Act, 29 U.S.C. § 141 et seq. Count 5 is a pendent state claim, alleging that the defendants have paid females lower wages than males, in violation of the Pennsylvania Equal Pay Act, 43 P.S. § 336.1 et seq. Summary of Motions to be Decided Each of the counts has come under attack by one or more of the defendants by way of Motions to Dismiss under Fed.R.Civ.P. 12(b). Oliver Tyrone and Oliver Realty have jointly moved to dismiss Counts 2, 4 and 5 as to them for failure of plaintiffs to state causes of action upon which relief can be granted. They have three objections to Count 2: (1) no cause of action is stated under the Fifth or Fourteenth Amendments since neither of these protects rights to be free from discrimination in private employment; (2) § 1985(3) is not applicable to claims of sex discrimination; and (3) plaintiffs' complaint does not sufficiently allege a conspiracy under § 1985(3). As to Count 4, Oliver Tyrone and Oliver Realty assert that the Labor Management Relations Act of 1947 is not applicable to the non-union defendants. As to Count 5, Oliver Tyrone and Oliver Realty claim that the Pennsylvania Equal Pay Act exempts persons covered by the Fair Labor Standards Act, such as plaintiffs herein. Finally, they have moved to dismiss all claims for declaratory relief pursuant to 28 U.S.C. §§ 2201 and 2202 as inconsistent with the statutory scheme of Title VII. Defendants Oliver Tyrone and Oliver Realty make no response at this time to the Title VII and antitrust claims against them. Defendant P.B.A. has joined in all the substantive attacks by Oliver Tyrone and Oliver Realty. Specifically as to it, P.B.A. objects to its inclusion in the Title VII charge on two grounds: (1) that it is not an "employer" under Title VII, and (2) that it was not named or included in the EEOC proceedings. Moreover, P.B.A. has moved to dismiss all of the counts against it for lack of personal jurisdiction, claiming it was not properly served under federal or state procedural rules. Local # 29 has moved to dismiss Counts 1, 2, 4 and 5 as to it. As to Count 1, Local # 29 submits that this court has no subject matter jurisdiction over it under Title VII because administrative remedies were inadequately followed. Local # 29 attacks Count 2 for failure to state a claim, contending that: (1) plaintiffs' allegations of fact are insufficient to state a claim under § 1985(3); (2) the conspiracy alleged is not covered by § 1985(3); and (3) neither the Fifth nor Fourteenth amendments create any right in individuals to equal employment opportunity in private employment. Local # 29 has moved to dismiss Count 4, the Labor Management Relations Act charge, for lack of jurisdiction under § 301, and Count 5, the Pennsylvania Equal Pay Act claim, claiming it excludes employees subject to the federal Fair Labor Standards Act. Further, as do the Oliver defendants, it moves to dismiss any claims for declaratory relief pursuant to 28 U.S.C.A. §§ 2201 and 2202 as inconsistent with the statutory scheme of Title VII. It makes no response at this time to plaintiffs' antitrust claims in Count 3. After considering whether P.B.A. is properly before this court, we will deal with the remaining motions to dismiss count by count and party by party. I. Personal Jurisdiction Over Pittsburgh Buildings Association In their complaint, plaintiffs describe P.B.A. as "an unincorporated association 165 that acts as the agent of various owners, agents, operators, or managers of office buildings in the City of Pittsburgh in negotiating labor agreements with Union." According to U.S. Marshal's Receipts filed with this Court, the plaintiffs twice attempted service of process on defendant P.B.A. On January 16, 1976, at the plaintiffs' direction, service on P.B.A. was attempted at the Oliver Tyrone headquarters at One Oliver Plaza in Pittsburgh; this is the same place where service was made on defendant Oliver Tyrone on that date. A second attempt to serve P.B.A. was made on March 24, 1976, by directing notice to one Michael R. Chase at 1900 Grant Building in Pittsburgh. Service on March 24 was actually made on Gerry Doyle, a secretary at 1900 Grant Building. Both Mr. Chase and Miss Doyle have submitted affidavits to the effect that neither has ever been an officer or agent of P.B.A. nor had P.B.A. regularly conducted business or association activities at that address. An Oliver Tyrone official submitted a similar affidavit as to the Oliver Plaza address. Plaintiffs, not reaching the question of the second attempted service, assert in their brief in opposition to defendants' motions to dismiss, that service was effected upon P.B.A. by service on its "member-agent," the Oliver Tyrone Corporation, on January 16, 1976. If P.B.A. has no officers or hierarchy (as defendants have asserted in their briefs), plaintiffs argue that failure of the court to recognize service on a member as service on the association would leave P.B.A. "impervious to suit and theoretically free from liability for its wrongful conduct." Defendants respond that those actually served were not agents of P.B.A., and that there is no legal support for the proposition that a member of an association is an agent where there are no official or appointed agents. Personal service on unincorporated associations is covered in Fed.R.Civ.P. 4(d) which, inter alia, provides: (d) SUMMONS: PERSONAL SERVICE . . . Service shall be made as follows: . . . . . (3) Upon a domestic or foreign corporation or upon a partnership or other unincorporated association which is subject to suit under a common name, by delivering a copy of the summons and of the complaint to an officer, a managing or general agent authorized by appointment or by law to receive service of process . .. . . . . . (7) Upon a defendant of any class referred to in paragraph (1) or (3) . . . it is also sufficient if the summons and complaint are served in the manner prescribed by any statute of the United States or in the manner prescribed by the law of the state in which the district court is held . . . These are alternate provisions, and defendant P.B.A. would have been properly served if plaintiffs had met the requirements of Fed.R.Civ.P. 4(d)(3) or of Pennsylvania law. We first look to the federal rule. Under subdivision (3), service may be made by delivering the complaint to "an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process." Service was clearly not made on an officer or any type of official or appointed agent; the question under Rule 4(d)(3) then is whether a member of an unincorporated association is an agent as a matter of law for the receipt of service of process. We know of no federal or state statute which makes a member of an unincorporated association an agent of such association for purposes of receipt of service of process. We cannot imply an agency under the law where there is no case precedent or compelling logic requiring us to do so. Plaintiffs argue that if a member cannot be served, the association cannot be sued. This is logical, but not syllogistic: it does not follow that therefore anyone may be served even if procedural requirements are not met. Plaintiffs remind us that the reason for the rules is to insure adequate notice to the defendant and suggest that one test of adequacy is the reasonable expectation that the individual served will 166 notify the entity of the commencement of the suit. Another statement of the test is whether the service would be "brought home" to the principal, Underwood v. McBride, 182 F.Supp. 361 (D.Del.1960). We believe the Supreme Court standard to be whether service is "reasonably calculated" to reach the defendant, thus placing the burden properly on the plaintiffs. Mullane v. Central Hanover Bank & Trust, 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950); Eisen v. Carlisle, 417 U.S. 156, 174-75, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). In a situation where the defendant is an unincorporated association formed for limited purposes, with a membership of the managements of over fifty buildings, service on any one of the members, without more, cannot reasonably be expected to reach the association as a whole, nor can we say that such service is reasonably calculated to do so. It may be that news of the summons and complaint would spread among some of the building-members; however, due process requirements cannot be met by notice through hearsay or rumor. Some more direct nexus between service and notice is required. It is true that a case in this district has held that members of a joint venture are its agents for the service of process, Stuart v. Al Johnson Constr. Co., 236 F.Supp. 126 (W.D.Pa.1964); however, we find that the members of an unincorporated association such as this one lack the close connection that would make members of a joint venture more reasonably calculated to "bring home" the notice that is constitutionally required. We find that both the first attempted service of P.B.A. by service on Oliver Tyrone and the later attempted service on employees in the Grant Building were insufficient under Fed.R.Civ.P. 4(d)(3) to invoke the jurisdiction of this Court. Although plaintiffs did not meet the requirements of Fed.R.Civ.P. 4(d)(3), they alternately could have properly served the defendant P.B.A. under 4(d)(7) by complying with Pennsylvania procedure for service of process. Pa.R.Civ.P. 2157(a)[1] provides: Service of process upon an officer or a registered agent of an association, or upon the manager, clerk or other person for the time being in charge of any place where such association regularly conducts any business or association activity shall be deemed service upon the association . . . The affidavits submitted by defendants establish that neither of those served were officers or agents of the association and that P.B.A. did not regularly conduct any business or activities at the locations where service was attempted. The same due process requirements apply under Pennsylvania procedure as under the federal rules. In Giordani v. Hoffman, 295 F.Supp. 463, 469 (E.D.Pa.1969), Judge Masterson wrote that insuring that the defendant would receive actual notice was "the relevant policy interest" underlying the federal and Pennsylvania rules for service of process. See also Goldlawr, Inc. v. Shubert, 169 F.Supp. 677 (E.D.Pa.1958), rev'd on other grounds, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962). Therefore, for the same reasons discussed above relative to Fed.R.Civ.P. 4(d)(3), the plaintiffs failed to properly serve the defendant P.B.A. under Pa.R.Civ.P. 2157. No proper service having been made, this Court is without personal jurisdiction over P.B.A. and all counts against P.B.A. must be dismissed. II. Count One Title VII Claims Having concluded that P.B.A. is not properly before us, we need not reach its contentions that it is not an employer under Title VII or that it was not properly named in administrative proceedings prior to suit. 167 Local # 29 moves to dismiss Count 1 for lack of subject matter jurisdiction in this court, claiming that (1) the EEOC failed to attempt to conciliate this matter as required by 42 U.S.C. § 2000e-5(d), and (2) the Union had not been properly notified since the Union had been advised that plaintiff Margaret A. Samson had withdrawn her EEOC complaint some time after filing it. However, Local # 29 has submitted no affidavits in support of its claims. We find no legal merit to the defendant's contention that this court is without subject matter jurisdiction if the EEOC fails to attempt to conciliate an administrative complaint. A long line of cases has established that a complainant who properly files his charge with the EEOC cannot be denied access to federal court because of the inaction or failings of administrative agencies. See, e. g., Fekete v. United States Steel Corp., 424 F.2d 331, 336 (3d Cir. 1970) ("We do not require an affirmative finding by the Commission as the passport for judicial review"); Beverly v. Lone Star Lead Const. Corp., 437 F.2d 1136, 1140 (5th Cir. 1971) (statutory right to federal suit is not "subject to such fortuitous variables as workload, mistakes, or possible lack of diligence of EEOC personnel"); Dent v. St. Louis San Francisco Ry Co., 406 F.2d 399, 401 (5th Cir. 1969) (an attempt at conciliation by the EEOC is not a jurisdictional prerequisite to suit); Johnson v. Seaboard Air Line R. R., 405 F.2d 645, 648 (4th Cir. 1968) (Title VII imposes a duty on the EEOC but does not preclude suit when an attempt to conciliate "fails to materialize"). The weight of the authority is so strongly against the Union's contention here that we could not seriously consider the facts of the EEOC conciliation attempt even if those facts were before us. So long as the plaintiffs have properly and timely filed their administrative charges and received "right to sue" notices, they have satisfied their obligation under 42 U.S.C. § 2000e-5(d). Local # 29 further asserts that it had been notified that plaintiff Margaret A. Samson had withdrawn her complaint before the EEOC. We have not received affidavits on this matter from the defendant Union. Absent supporting affidavits on behalf of Local # 29's factual claims, we will accept the plaintiff's allegations as uncontroverted at this time. 2A Moore's Federal Practice §§ 12.08, 12.14; A. T. Brod & Co. v. Perlow, 373 F.2d 393, 397-98 (2d Cir. 1967). On this basis we must deny Local # 29's motion to dismiss the Title VII charges against the Union for lack of subject matter jurisdiction. Of course, the defense of lack of subject matter jurisdiction may be made at any time, Louisville & Nashville Ry. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908), and the defendant may raise its factual contentions at such time as proof is available. We further note that there has been no challenge to the exhaustion of administrative remedies alleged by plaintiff Marchwinski; it appears, therefore, that Local # 29 seeks dismissal of the Title VII claim in part only. Defendant will have an opportunity to question the appropriateness of the representative plaintiffs, and this Court will rule on their representative status in class action determinations under Rule 23 to follow this opinion. III. Count Two Claims under 42 U.S.C. § 1985(3) and the Constitution Defendants, Oliver Tyrone, Oliver Realty, and Local # 29 all move to dismiss the Count 2 claims under 42 U.S.C. § 1985(3) and under the Fifth and Fourteenth Amendments to the United States Constitution for failure to state claims upon which relief can be granted. Since their arguments are similar, and since the dispositions made on each claim affect all of them equally at this point, we will consider all of the defendants' contentions jointly. In their complaint the plaintiffs allege that the defendants conspired to deprive them of equal employment opportunities in violation of the Civil Rights Act of 1871, 42 U.S.C. § 1985(3), and also in violation of the Fifth and Fourteenth Amendments to the United States Constitution. 168 Because we find the Fifth and Fourteenth Amendments clearly inapplicable here, we will consider them first. The purpose of the Fifth Amendment to the Constitution was to limit the power of the legislature and other officers of the United States Government. Ex parte Wilson, 114 U.S. 417, 5 S.Ct. 935, 29 L.Ed. 89 (1885). While it protects individuals against arbitrary action of the government, Wolff v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974), it provides no protection against private action. Bryant v. Jefferson Federal Sav. & Loan Assn., 166 U.S.App.D.C. 178, 509 F.2d 511 (1974). Likewise, the Fourteenth Amendment is a restraint upon state governments, Nixon v. Condon, 286 U.S. 73, 52 S.Ct. 484, 76 L.Ed. 984 (1932); it "erects no shield against merely private conduct, however discriminatory or wrongful," Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948). Since the plaintiffs have made no allegations of state or federal conduct involved in the alleged discrimination that is the subject of this suit, all claims under the Fifth and Fourteenth Amendments must be dismissed. The defendants move to dismiss the plaintiffs' claims under the Civil Rights Act of 1871, 42 U.S.C. § 1985(3), on two grounds: (1) that § 1985(3) does not apply to claims of sex discrimination in private employment, and (2) that the plaintiffs' complaint insufficiently alleges a conspiracy cause of action under § 1985(3). The question of whether sex discrimination is included within the categories of class animus prohibited by § 1985(3) a question of current controversy has recently been answered for us by the Third Circuit Court of Appeals. In Novotny v. Great American Federal Savings and Loan Assn., 584 F.2d 1235, 1243-1244 (3d Cir. 1978) (en banc), Judge Adams wrote for the court en banc: . . . The fact that a person bears no responsibility for gender, combined with the pervasive discrimination practiced against women, and the emerging rejection of sexual stereotyping as incompatible with our ideals of equality convince us that whatever the outer boundaries of the concept, an animus directed against women includes the elements of a `class-based invidiously discriminatory' motivation. We therefore join the two circuits that have included sex discrimination within the categories of animus condemned by § 1985(3). (footnotes omitted) Therefore, we must deny the motion to dismiss the § 1985(3) claim on the ground that the statute is inappropriate to sex discrimination claims. Defendants also have moved to dismiss the § 1985(3) claim for failure to state a cause of action since "Plaintiffs' bare and conclusory allegations of conspiracy are insufficient, as a matter of law." The plaintiffs of course respond that the allegations in their complaint are sufficient, and both sides recite some of the same language in the complaint in support of their contentions. In such a controversy, we are instructed by the Supreme Court: When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support his claims. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). The issue before us, then, is whether the plaintiffs have sufficiently alleged a conspiracy under 42 U.S.C. § 1985(3) to entitle them to offer evidence to prove their allegations. The defendant correctly states the rule in the Third Circuit to be that conspiracy allegations must be supported by specific facts, and that broad, conclusory allegations are insufficient. Robinson v. McCorkle, 462 F.2d 111 (3d Cir. 1972), cert. denied, 409 U.S. 1042, 93 S.Ct. 529, 34 L.Ed.2d 492 (1973). We must therefore ask whether the plaintiffs have supported their allegations with sufficient and specific facts. In Robinson v. McCorkle, the Court of Appeals for the Third Circuit upheld a dismissal of a 169 § 1985(3) claim on the basis of the pleadings, noting . . . With near unanimity, the courts have rejected complaints containing mere conclusory allegations of deprivations of constitutional rights protected under § 1985(3). A conspiracy claim based upon § 1985(3) requires a clear showing of invidious, purposeful and intentional discrimination between classes or individuals. 462 F.2d at 113. Although characterizing the conspiracy allegations as "unsupported by any specific facts," the court did not set out the allegations of the complaint for our comparison. However, the Third Circuit has since reviewed and distinguished the Robinson case in Bethel v. Jendoco Constr. Corp., 570 F.2d 1168 (3d Cir. 1978). Reversing a decision of this district court which defendants have cited in support of their position here, the Court of Appeals set out various sections of the complaint brought by a black carpenter against certain construction companies and unions representing construction workers. Among the allegations were claims that the defendants refused to hire the plaintiff into a certain job category because of his race, that defendants assigned blacks to the most undesirable jobs while reserving the more desirable jobs for whites, that defendants denied plaintiff overtime and promotions, and that defendant construction companies "conspir[ed] with the defendant labor organizations to discriminate against the plaintiff and other black persons." 570 F.2d at 1171. Referring to these allegations, the Bethel court described the complaint as "replete with specific allegations of race-based discrimination," 570 F.2d at 1173, and sufficient for purposes of stating a claim under § 1985(3). Reviewing the plaintiffs' complaint at paragraphs 22, 23, and 27, we find these sections similar to the sections approved in Bethel. In paragraph 23, the plaintiffs herein allege that the defendants "failed to recruit, hire, and employ women in higher and better paying, permanent jobs, in the same manner as males; by failing to equalize salary, compensation, training, overtime, benefits, terms and conditions of employment for women as contrasted with similarly situated male employees . . ." In paragraph 22, the plaintiffs set out more specific facts in the form of common questions of fact for class action certification. The only difference we see between the allegations approved in Bethel and those presented here is that Bethel's allegations of conspiracy followed immediately after the facts and, therefore, were more a part of the specific factual allegations, whereas the plaintiffs here incorporate the factual allegations into a later count, then adding the allegation that the defendants "combined and conspired among themselves" to achieve the discrimination against females. We think this difference is without substance where the factual allegations are so similar. The Bethel allegations of conspiracy were simply that the defendant employers "conspir[ed] with the defendant labor organizations to discriminate against plaintiff and other black persons in employment practices" and that the labor organizations "conspir[ed] with the corporate defendants to deny full employment to plaintiff and other black persons." 570 F.2d at 1171. The conspiracy allegations of paragraph 27 of the complaint herein are at least as complete: The [four defendants] have combined and conspired among themselves and the members of the Pittsburgh Buildings Association to deprive Plaintiff and other females similarly situated of protections and privileges of employment equal to those accorded to male employees because of an intent to discriminate against females. Defendants' aforementioned discrimination against females in employment opportunities has deprived Plaintiff and other females similarly situated of their rights under . . . 42 U.S.C. § 1985(3). In Bethel, supra, the Third Circuit also referred to the test of sufficiency of a § 1985(3) claim established by the United States Supreme Court in Griffin v. Breckenridge, 403 U.S. 88, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971). Under that standard, a complaint must allege that defendants: 170 did (1) `conspire to go in disguise on the highway or on the premises of another' (2) `for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws.' It must then assert that one or more of the conspirators (3) did, or caused to be done, `any act in furtherance of the object of [the] conspiracy,' whereby another was (4a) `injured in his person or property' or (4b) `deprived of having and exercising any right or privilege of a citizen of the United States.' 403 U.S. at 102-03, 91 S.Ct. at 1798. Requirements 1, 2 and 4 are met by paragraph 27 of the plaintiffs' complaint alleging that defendants "combined and conspired among themselves" . . . "because of an intent to discriminate against females in employment opportunities" thus "depriv[ing] Plaintiff and other females similarly situated of their rights under . . 42 U.S.C. § 1985(3)." Requirement 3 is met by the factual allegations of paragraphs 22 and 23, discussed earlier. Although the plaintiffs' complaint is presented in a confusing form, we have read it as a whole, accepting the allegations as true and construing the complaint in a light favorable to plaintiff, as we must on a motion to dismiss at this stage of the proceedings. Bethel, supra, at 1173; Heltoski v. Goldstein, 552 F.2d 564, 565 (3d Cir. 1977). Finding that the plaintiffs' allegations are sufficient under the Supreme Court's test, Griffin, supra, and very close to the allegations recently upheld by the Third Circuit in Bethel, supra, we therefore deny the defendants' motions to dismiss the § 1985(3) claims against Oliver Realty, Oliver Tyrone, and Local # 29. IV. Count 4 The Labor Management Relations Act Charge With some relief, we reach Count 4, the only count before us on which the plaintiffs and at least some of the defendants are in agreement. In the complaint, at paragraph 33, the plaintiffs allege that "[the] Union had breached its duty of fair representation to representative Plaintiffs and to members of Plaintiff" and pray for judgment against the Union in Plaintiffs' favor. Defendants, Oliver Tyrone and Oliver Realty, nonetheless move to dismiss this count as to them for failure to state a claim since the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 141, imposes a duty of fair representation only upon labor unions or labor organizations. They cite § 9(a) of the LMRA, which requires unions to be exclusive representatives of employees for collective bargaining purposes. We believe that the employer defendants were never intended to be included in this count, and the plaintiffs so concede. To avoid any confusion, however, we will grant the motion to dismiss Count 4 as to defendants Oliver Tyrone and Oliver Realty for failure to state a cause of action under the LMRA. Defendant Local # 29 moves to dismiss Count 4 as to it for lack of subject matter jurisdiction. It contends that (1) this court has no subject matter jurisdiction under § 301 of the LMRA where plaintiffs have not alleged a breach of a collective bargaining agreement, and (2) the plaintiffs make no factual allegations that the Union refused or failed to process properly any grievances filed by the plaintiffs under the contract. The Union has not cited any authority nor submitted a brief in support of its contentions, nor has the plaintiff responded to this particular motion. We have been unable to find any support in the statute, 29 U.S.C. § 141 et seq., or in case precedent, for the Union's assertion that the plaintiffs must allege a breach of contract where their claim is based on failure adequately to represent the plaintiffs. On the contrary, the Supreme Court has held that failure to exhaust contractual remedies does not preclude an action in federal court for violation of fair representation. In Vaca v. Sipes, 386 U.S. 171, 186, 87 S.Ct. 903, 914, 17 L.Ed.2d 842 (1967), a case involving an action under § 301 of the LMRA, 29 U.S.C. § 185, for violation of a 171 collective bargaining agreement, Justice White wrote: . . . [W]e think the wrongfully discharged employee may bring an action against his employer in the face of a defense based upon the failure to exhaust contractual remedies, provided the employee can prove that the union as bargaining agent breached its duty of fair representation in its handling of the employee's grievance. We believe this logic applies with equal force in an action against the Union itself for failure to represent fairly its membership. A breach of the Union's duty relieves the employee of any "express or implied requirement that disputes be settled through contractual procedures . . ." Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 567, 96 S.Ct. 1048, 1058, 47 L.Ed.2d 231 (1976). The Union further contends that the plaintiffs have not alleged that the Union refused or failed to properly process any grievances filed by the plaintiffs under the contract. Plaintiffs' complaint, Count 4, after incorporating earlier paragraphs, reads: By reason of the foregoing, since 1963, and for years prior thereto, Union has breached its duty of fair representation to the representative Plaintiffs and to members of Plaintiff. Union has not properly processed grievances filed by members of Plaintiff class and has not, in general, adequately represented members of Plaintiff class in day-to-day labor relations with management and contract negotiations. On a motion to dismiss a § 301 claim, we need not find evidence of plaintiffs' claims but only allegations, which, if proven, would constitute conduct violative of the Union's statutory duty. Trail v. International Brotherhood of Teamsters, 542 F.2d 961, 966 (6th Cir. 1976). Evidence required at trial would have to establish Union conduct which was in the language of the Supreme Court "arbitrary, discriminatory, or in bad faith." Vaca v. Sipes, supra, 386 U.S. at 190-93, 87 S.Ct. at 916. If the allegations of the plaintiffs, that the Union has not properly processed grievances based on the sex of the union member, were proved, such conduct would meet the Supreme Court test. For these reasons we deny Local # 29's motion to dismiss Count 4 as to it. V. Count Five The Pennsylvania Equal Pay Act Claim The plaintiffs' complaint at Count 5 alleges that "Defendant and Union have caused to be paid and have paid female `light cleaners' less wages than male `heavy cleaners,' notwithstanding the fact that the duties of a light cleaner are equal to the duties of a heavy cleaner," thus violating the Pennsylvania Equal Pay Act, 43 P.S. §§ 336.1 et seq. Defendants have moved to dismiss this count for failure to state a claim upon which relief can be granted. They cite the exclusion from the Pennsylvania act of persons subject to the federal Fair Labor Standards Act, 29 U.S.C. § 206(d)(1), and assert that the plaintiffs herein come under the federal act. Plaintiffs respond that there are no facts on the record from which the Court can conclude that the federal act is applicable and the state act therefore precluded. As the defendants point out, the plaintiffs themselves have alleged in their complaint at paragraph 9 that they are employed "in an industry affecting commerce." Although that contention, if true, makes it unlikely that the Pennsylvania act would apply, we need not and do not reach the substance of this claim. Count 5, grounded in a state statute, is a pendent claim which is before us only insofar as this district court, in its discretion, allows it to be "appended" to valid federal claims. The classic tests of the power of a federal court to hear an independent state claim are whether the state and federal claims "derive from a common nucleus of operative fact" and are such that the plaintiffs "would ordinarily be expected to try 172 them all in one judicial proceeding," United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). If those tests are met, "there is power in federal courts to hear the whole," Gibbs, supra, at 725, 86 S.Ct. at 1138 (emphasis in original); thus, the court may, but need not, consider the state claim. As the Gibbs court went on to say: That power need not be exercised in every case in which it is found to exist. It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff's right. Its justification lies in considerations of judicial economy, convenience and fairness to litigants; if these are not present a federal court should hesitate to exercise jurisdiction over state claims, even though bound to apply state law to them. Needless decisions of state law should be avoided . . . Finally, there may be reasons independent of jurisdictional considerations, such as the likelihood of jury confusion in treating divergent legal theories of relief, that would justify separating state and federal claims for trial. If so, jurisdiction should ordinarily be refused. 383 U.S. at 726-27, 86 S.Ct. at 1139 (citations omitted). In Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973), the Supreme Court upheld a California district court's refusal to hear state claims against a county in conjunction with a federal § 1983 claim. There the exercise of pendent jurisdiction would have required bringing in a new or "pendent" party, would have necessitated resolution of difficult questions of state law, and might have resulted in an overly complicated case at trial, 411 U.S. 611-613, 93 S.Ct. 1785. We recognize that there has been a general trend toward including closely-related state claims in federal suits. See, e. g., Gagliardi v. Flint, 564 F.2d 112, 114 (3d Cir. 1977) (a federal court may and "usually should" hear pendent non-constitutional claims where by so doing it can avoid deciding constitutional questions). On the other hand, this trend has been properly limited by decisions which, in effect, tell the courts to use common sense in exercising their discretion. See, Price v. Franklin Investment Company, 187 U.S.App.D.C. 383, 391, 574 F.2d 594, 607 (1978) (district court dismissal approved where retention of pendent claims would have made the case "virtually unmanageable for the courts and the parties"); cf. Tully v. Mott Supermarkets, Inc., 540 F.2d 187, 196 (3d Cir. 1976) (district court's exercise of pendent jurisdiction over state claims after the dismissal of federal claims unjustified despite the fact that economy, convenience, and fairness favored retention); Mahone v. Waddle, 564 F.2d 1018, 1026 (3d Cir. 1977) (Circuit Court would not affirmatively order a district court to exercise pendent jurisdiction despite precedent in the particular area of law favoring that course). In this case there are factors favoring and other factors militating against the exercise of pendent jurisdiction. Plaintiffs' claim of discrimination in pay between men and women certainly arises out of a common nucleus with their other claims. It is the type of claim which might normally be litigated along with a sex discrimination claim. On the other hand, it is not clear that judicial economy and fairness would be served by inclusion of this claim in the particular federal suit before us. Defendants contend that plaintiffs are not properly within the coverage of the Pennsylvania Equal Pay Act since that act, as amended in 1968, 43 P.S. § 336.2(a), specifically excludes persons subject to the federal Fair Labor Standards Act. Preliminary research on the amendment to the Pennsylvania act has uncovered no state court cases construing this amendment. We have found two federal court cases that have dismissed claims under the Pennsylvania act where the plaintiffs had in the same suit expressly claimed causes of action under the federal Fair Labor Standards Act: Cap v. Lehigh University, 433 F.Supp. 1275 (E.D.Pa.1977); Bradford v. Peoples Natural Gas Co., Inc., 60 F.R.D. 432 (W.D.Pa.1973). In our case, were we to accept jurisdiction, we would be called upon to resolve a different question 173 whether the Pennsylvania Equal Pay Act may be applied in a case where the plaintiffs had not invoked the federal statute. Although this is an area involving federal-state relationships, we hesitate to adjudicate a claim brought solely under the state statute without any guidance from the state courts in construing the state statute. Further, we have before us a complaint asserting four federal causes of action under five federal statutory schemes not especially known for their well-settled status in the law Title VII, § 1985(3) of the Civil Rights statutes, the Labor Management Relations Act, and the Sherman and Clayton Antitrust Acts. The inclusion of the antitrust claims along with the labor and civil rights claims already presents an unusual, and complicated, package for trial. Damages, injunction, and declaratory relief are sought. Additionally, the plaintiffs have brought their action as a class action and assert that defendants be considered as a class. This is not the type of case wherein the state claims so predominate over federal claims that were we to accept jurisdiction, we would allow "the tail to wag the dog"; on the contrary, the federal claims promise to be so large and complicated that we feel the creature would be more manageable without its tail. This is just the type of case the Supreme Court may have been unable to foresee specifically when it warned in general terms in Gibbs "[t]here may be reasons independent of jurisdictional considerations, such as the likelihood of jury confusion in treating divergent legal theories of relief, that would justify separating state and federal claims . . ." 383 U.S. at 727, 86 S.Ct. at 1139. For the reasons that there is no clear precedent under state law construing the Pennsylvania Equal Pay Act as it would be applied in this case and that inclusion of this claim would unduly complicate this case, Count 5 will be dismissed as to all remaining parties. We make no decision on the merits of this claim and plaintiffs may pursue it in the state courts where a construction of the 1968 amendment to the Equal Pay Act in this type of case could more appropriately be made. IV. Claims for Declaratory Relief Defendants move to dismiss plaintiffs' claim for declaratory relief as inappropriate to a Title VII action where the statutory scheme itself provides adequate remedies. While we agree with the defendants' position that courts should normally refrain from granting declaratory relief where a comprehensive statutory scheme of remedies is provided for a specific type of claim, Katzenbach v. McClung, 379 U.S. 290, 85 S.Ct. 11, 13 L.Ed.2d 20 (1964) (Title IV claim), it does not follow that declaratory relief is precluded in this case. Defendants have not asserted that declaratory relief is inappropriate to any of the plaintiffs' other claims, and under Rule 57 of the Federal Rules of Civil Procedure, federal courts have broad discretion in fashioning declaratory relief "where it is appropriate." And even though Title VII provides the kind of comprehensive remedial scheme that would usually make declaratory relief unnecessary, that in itself does not absolutely preclude the use of a declaratory judgment. See, C. Wright & A. Miller, Federal Practice and Procedure, § 2758, and cases cited therein. Since it would be premature in this type of case to predict what remedies will become appropriate, especially considering the number and type of federal statutes involved, and the potential class-action status of this suit, the defendants' motion to dismiss the claim for declaratory relief will be denied. Conclusion Our order will provide that: a. All claims are dismissed as to defendant Pittsburgh Buildings Association for lack of personal jurisdiction. b. Plaintiffs' Fifth and Fourteenth Amendment claims are dismissed for failure to state claims upon which relief could be granted. 174 c. The Labor Management Relations Act count is dismissed as to the non-union defendants. d. The pendent state claim under the Pennsylvania Equal Pay Act is dismissed as to all parties. e. Local # 29's motions to dismiss the Title VII and Labor Management Relations Act counts as to it for lack of subject matter jurisdiction are both denied. f. The motions of Oliver Realty, Oliver Tyrone, and Local # 29 to dismiss the Civil Rights Act count under 42 U.S.C. § 1985(3) are denied. g. The motions of these three parties to dismiss the plaintiffs' claims for declaratory relief are also denied. An appropriate order will be entered. NOTES [1] Rule 2180 provides for service upon "a corporation or similar entity," and includes a provision for service upon the Secretary of the Commonwealth where other measures fail. However, we do not believe that Rule 2180 contemplates such a loosely-organized unincorporated association as the P.B.A. in its "corporation or similar entity" language. At any rate Rule 2180 has not been complied with by plaintiffs.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265501/	507 Pa. 496 (1985) 491 A.2d 94 David M. BARASCH, Consumer Advocate of Pennsylvania, Appellant, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION and Pennsylvania Power Company, Appellees. Supreme Court of Pennsylvania. Argued May 15, 1984. Decided April 9, 1985. 497 498 499 Daniel Clearfield, Harrisburg, for appellant. Julian Suffian, Charles F. Hoffman, Harrisburg, for appellee Pa. Public Utility Com'n. Thomas Gadsen, Alan L. Reed, Albert D. Brandon, Philadelphia, for Pa. Power Co. Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ. OPINION OF THE COURT HUTCHINSON, Justice. I. The Consumer Advocate appeals by allowance Commonwealth Court's order affirming the Public Utility Commission in a rate case. In dealing with the rates proposed in Pennsylvania Power Company's Tariff Supplement No. 15 500 the Commission allowed the Company to "normalize"[1] both its federal and state taxes for three separate classes of property: (1) property placed in service between 1971 and 1980, (2) property placed in service in 1980 and (3) property placed in service after January 1, 1981. The Commission's order approved the setting of rates on the basis of the higher income taxes the utility would hypothetically have paid if it used straight-line depreciation, an historical method of depreciation related to the asset's actual useful life. Specifically, the Commission allowed "normalization" of federal and state taxes for: (1) the difference between depreciation by asset class life (ADR) and straight-line depreciation for property placed in service between 1971 and 1980; (2) the difference between depreciation by the Double Declining Balance method (DDB) and straight-line depreciation for property placed in service in 1980; and (3) the difference between depreciation by the Accelerated Cost Recovery System (ACRS)[2] provided in the Economic Recovery 501 Tax Act of 1981 (ERTA), United States Internal Revenue Code (IRC) Section 168, 26 U.S.C. § 168, and straightline depreciation for property placed in service after 1980. Commonwealth Court, in affirming the PUC order, held (a) that the decision to approve normalization of both state and federal tax expense in all three respects was supported by the Commission's short general analysis of that concept and (b) that the application of normalization to all of these assets did not violate Pennsylvania's longstanding doctrine of allowing only "actual taxes paid" to be considered in the rate base. The Consumer Advocate challenges those parts of the Commission's order permitting normalization of the state income tax expense for assets placed in service in all three of these periods. He also challenges normalization of the federal income tax expense for assets placed in service for the period 1971 through 1980. He concedes the propriety of normalizing federal taxes for assets placed in service after 1980. The Commission gave no indication that it either recognized any distinction among the situations presented, or that it considered the "actual taxes paid" doctrine. On the record before us normalization of this utility's state taxes violates the "actual taxes paid" doctrine[3] in all instances and offers no offsetting advantage to ratepayers. The decision to permit normalization of state taxes is therefore reversed. With respect to normalization of the reduced federal taxes attributable to rapid depreciation allowable on pre-1981 assets we remand to the Commission for further 502 consideration of the "actual taxes paid" doctrine. In so doing we direct the Commission to determine whether the distinctions traced in IRC § 167(l) between assets placed in service at different times require separate calculation of the annual tax reductions attributable to those assets earlier placed in service. On examination the Commission may find that the decline in those tax deductions, concomitant with the ever-shrinking deductible base of such older assets, can be offset by the continuing tax reductions a going concern will obtain from rapid depreciation on the newer assets which it must from time to time provide. On the other hand, the Commission may find, after considering trends in both inflation and energy demand, that this continuing provision of new assets is not likely to produce such an offset. In such case the Commission is further directed to determine when the turn around to higher tax expense is likely to occur. Based on that last determination the Commission must finally determine whether it is reasonable to charge current ratepayers for those future tax expenses. Such findings and conclusions are necessary to enable the judiciary to exercise its reviewing function and to deal separately with the rate-making effect of normalization of federal tax expense for each of the three asset categories covered in the Commission's order. II. Commonwealth Court described the procedural and factual history of this case as follows: Proceedings in this case began on April 15, 1981, when Pennsylvania Power Company filed. . . . Supplement No. 15 requesting an increase in total annual operating revenues of $32,735,000.00 based on a future test year ending December 31, 1981. By order adopted June 11, 1981, the PUC instituted a formal investigation of the lawfulness and reasonableness of the proposed rates. . . . The matter was assigned for hearing and six complaints against the proposed rate increase were filed. . . . The complaints were consolidated with the PUC's investigation for hearing 503 and disposition. . . . [T]he Administrative Law Judge, on December 3, 1981, issued his recommended decision. Exceptions and Replies to Exceptions were timely filed by the Power Company, the PUC trial staff, and the Consumer Advocate. On January 22, 1981, the PUC entered the Order appealed here and approved rate levels which would produce total annual operating revenues of $164,238,000.00, an increase in total operating revenues of $24,915,000.00. The order also expressly approved the Power Company's claim for normalization of deferred federal and state income taxes. Cohen v. Pa. PUC and Pennsylvania Power Company, 76 Pa. Commonwealth Ct. 353, 355, n. 1, 463 A.2d 1274, 1276, n. 1 (1983). That part of the order generally allowing normalization of tax expenses increased the Company's claimed expenses for cost of service by $2,777,949.00. That total increase breaks down as follows: Federal State Total CATEGORY I (1971-1979 Property) ADR with DDB over longer book lives with DDB $1,074,293 $265,204 $1,339,497 CATEGORY II (1980 Property) DDB over Straight-line Depreciation $ 941,286 $232,369 $1,173,655 CATEGORY III (1981 Property) ACRS over Straight-line Depreciation $ 212,371 $ 52,426 $ 264,797 __________ ________ __________ Total: $2,227,950 $549,999 $2,777,949 The difference between the tax expense allowable for rate purposes under straight line depreciation and the tax deduction allowable under accelerated depreciation is credited 504 to a reserve account for future taxes. However, the revenue required to meet this increased rate-making expense is much greater than the hypothetical tax increase itself. This is because the revenue used to establish the reserve fund is itself largely taxable. In this case, the revenue requirement approximates $5,000,000.00. Under currently applicable corporate tax rates about two dollars of revenue will be generally necessary for every one dollar added to the reserve tax account.[4] In effect, IRC Section 168(e)(3)(C) with its cross-reference to Section 167(l) makes rapid depreciation unavailable to utilities in computing their federal income tax if they are not allowed to charge the higher current rates necessary to fund the tax reserve account required by normalization. Because the loss of this benefit in computing federal income taxes would result in even higher rates than those resulting from normalization of that tax expense, the Consumer Advocate does not, on this appeal, contest normalization of federal income tax expense for depreciation on post-1980 property (Category III). The Consumer Advocate points out that ERTA requires normalization of federal tax expense when a utility uses ACRS. A utility's revenue requirement is higher if it does not take advantage of ACRS depreciation allowances than if it does not normalize. This result occurs because the ratepayer receives a rate base deduction under normalization which, in turn, reduces the 505 revenue requirement.[5] Thus, flow-through would, for post-1980 assets, increase the cost to the ratepayers. It is for this reason that the Consumer Advocate has not contested the action of the Commission in applying normalization to post-1980 assets. A reserve for taxes, like any reserve, is a source of current funds. In theory, those funds will be used to finance new capital expenditures until higher taxes fall due. The funds generated from the reserve are, however, available for any proper business purpose. By allowing normalization and assuming the Company will use its deferred tax account to finance its capital expenditures, the Commission is, in fact, requiring current ratepayers to make a forced investment in the Company.[6] The Commission has previously recognized this. In Pennsylvania PUC v. Duquesne Light Co., 43 PUR 4th 27 (1982), the Commission rejected normalization stating that it: 1. forces ratepayers to become involuntary investors; 2. forces the ratepayer to provide an additional dollar to pay the resulting increase in current federal and state taxes for every deferred tax dollar provided by ratepayers; 3. produces an inequity since that ratepayer who pays in the first part of an asset life may not be the one who bears the benefit of underpaying in the latter part of the assets life, and 4. threatens to deny ratepayers a chance to reap its (normalization's) benefit for a minimum payback period of twenty-two years, and possibly never if inflation surpasses 10 per cent. Id. at 69. The Commission then correctly observed: In developing an appropriate and reasonable level for income taxes, we are guided by the Internal Revenue 506 Code and the "actual taxes paid" doctrine as enunciated by the [C]ommonwealth [C]ourt. Where the code is silent on the treatment to be afforded a particular matter, we perceive our duty to approximate the actual taxes to be paid by the utility, and pass that cost and only that cost, on to ratepayers. Id. at 69 (footnote omitted). See also Pennsylvania PUC v. Pennsylvania Power and Light Co., 54 Pa. PUC 645, 670-71 (Jan. 1980 Feb. 1981). The amount of the forced investment may be somewhat reduced because the Commission is permitted to remove from the rate base the amount in the tax reserve account. 26 Code of Fed.Reg. 1.167(1)-1(h)(6). Pittsburgh, Appellant v. Pennsylvania Public Utility Commission, 182 Pa.Superior Ct. 551, 128 A.2d 372 (1956) (Pittsburgh I); Pennsylvania PUC v. Duquesne Light Co., supra.[7] In other words, the Commission may deny the Company a return through its rates on the funds provided by consumers to the tax reserve account. III. In establishing rates, any regulatory body must determine whether the advantages derived from accelerated depreciation, i.e., a larger deduction for federal income tax expense, should accrue to a firm's shareholders or to its customers, the ratepayers. Regulators must choose between the "flow-through" and "normalization" methods. Under the flow-through approach, utilities using accelerated depreciation for tax purposes use the same depreciation method for computing the tax expense includable in their cost of service. See Federal Power Commission v. Memphis Light, Gas and Water Div., 411 U.S. 458, 460, 93 S.Ct. 1723, 1725, 36 L.Ed.2d 426 (1973). Flow-through comports with Pennsylvania's longstanding "actual taxes paid" principle. Under that principle a utility is only permitted to 507 charge rates which reflect its actual tax expense for any given year. Public Systems v. F.E.R.C., 709 F.2d 73, 76 (6th Cir.1983) (Public Systems II). Flow-through also benefits the utility's current customers since the entire advantage derived from the utility's tax deduction "flow through" to them. See Distrigas of Massachusetts Corp. v. F.E. R.C., 737 F.2d 1208, 1212 (1st Cir.1984). Normalization, in contrast, allows the utility to compute the income tax component of its cost of service as though it were using the straight-line depreciation method. Thus, during the first years of normalization, customers are charged for more taxes than the utility actually pays. This method is said to protect future ratepayers from unfairly high tax bills which may occur if current customers receive the entire tax benefit attributable to accelerated depreciation. See Public Systems II, supra. However, as the Commission has previously recognized,[8] normalization also benefits the utility itself since it retains use of the funds allocated for deferred taxes until the taxes actually fall due. Distrigas of Massachusetts Corp. v. F.E.R.C., supra. Advocates of normalization argue that if tax expenses are not normalized utilities may have to raise future rates to pay higher future taxes, thus shifting expenses incurred by current consumers to future taxpayers. Public Systems v. Federal Energy Regulatory Commission, 606 F.2d 973 (D.C.Cir.1979) (Public Systems I), later app. 709 F.2d 73 (D.C.Cir.1983) (Public Systems II).[9] The theory supporting normalization assumes that accelerated depreciation merely provides a deferment of taxes, not a true saving, and that proper income accounting requires the establishment of a reserve for deferred taxes. Under this theory, the annual credit to the reserve is considered a business cost and the 508 credit to the tax reserve is an allowable expense in figuring the cost of service component of the rate base.[10] The Consumer Advocate, on the other hand, argues that normalization, absent IRC § 167(l) and § 168(e)(3)(c) penalties, requires the consumer to pay for purely speculative future tax obligations. He suggests that normalization of all taxes violates the "actual taxes paid" doctrine[11] on this record because the Company failed to provide evidence that the sums reserved for taxes will in fact be paid to the taxing authorities in the reasonably foreseeable future.[12] Unless tax benefits are passed on to the taxpayer, the argument goes, the utility will reap a permanent tax saving, since so long as the expenses subject to normalization remain stable or increase, the benefits of postponing present tax liabilities will more than offset previously deferred taxes that currently fall due. This proposition is strengthened in periods of inflation, when current liabilities exceed previously deferred expenses. Public Systems II, supra (footnotes omitted). On this view, as long as total company assets grow at all, future taxes will not increase despite accelerated depreciation. See also Federal Power Commission v. Memphis Light, Gas and Water, 411 U.S. 458, 93 S.Ct. 1723, 36 L.Ed.2d 426 (1973), conformed to Memphis Light, Gas and Water Div. v. F.P.C., 500 F.2d 798 (D.C.Cir.1974); City of Los Angeles v. PUC, 15 Cal.3d 680, 125 Cal.Rptr. 779, 542 P.2d 1371 (1975) (accelerated depreciation produces permanent tax 509 savings at least in the case of expanding or stable plants). The Consumer Advocate's argument plainly implies that the Commission's approval of normalization of federal taxes for Categories I and II rate-making purposes is so unreasonable that it constitutes an error of law. A choice between these competing theories requires a detailed analysis of IRC § 167(l) and its history. With respect to federal taxes on certain property placed in service after 1969 and before December 31, 1980, the Tax Reform Act of 1969 and subsequent amendments permit a utility to use: (1) straight-line depreciation; (2) accelerated depreciation with normalization; or (3) accelerated depreciation with flow-through of its tax benefits to ratepayers, if the utility used such flow-through for its July 1969 accounts. 26 U.S.C. § 167(l)(2)(B) and 26 U.S.C. § 167(l)(2)(C). Prior to August, 1969, Pennsylvania Power Company used accelerated depreciation with flow-through for its post-1969 assets. Since the Tax Reform Act of 1969, IRC § 167(l) has had a further special category of post-1969 "expansion" property. On such expansion property a utility could elect, by June 29, 1970, to abandon accelerated depreciation with flow-through in favor of accelerated depreciation with normalization. Central Maine v. PUC, 405 A.2d 153 (1979), cert. denied, Maine Public Utilities v. Central Maine Power Co., 447 U.S. 911, 100 S.Ct. 2999, 64 L.Ed.2d 862 (1980). If it so elected, the utility was, in effect, prohibited from continuing to receive the tax benefits of accelerated depreciation unless the regulatory body with jurisdiction over its rates approved normalization.[13] 510 Despite a Public Utility Commission statement of policy dated June 24, 1970 which assured public utility companies that they would be permitted to normalize post-1969 expansion property if the utilities filed the "election" required by the IRC, Pennsylvania Power Company failed to make that election. Thus, the Commission is not now required to allow normalization as a pre-requisite to this utility's use of accelerated depreciation for its pre-1981 expansion property. Similarly, the IRC, as amended, does not require normalization of tax benefits as a prerequisite to the use of double-declining balance on 1980 property, even if the utility had made a Section 167(l)(4)(A) election to normalize. See F.P.C. v. Memphis Light Gas and Water, supra, 411 U.S. at 471-472, 93 S.Ct. at 1731. Since the rapid depreciation method this utility used for 1980 property involved only DDB[14] no current tax benefit is lost on that category of property. Finally, on the facts of this case, neither the Internal Revenue Code nor the Treasury Regulations require normalization of pre-1981 assets for rate purposes before this company can compute its federal taxes using accelerated depreciation. See IRC § 167(m); 26 CFR 1.167(a)-11(b)(6).[15] Thus, there is nothing in the Internal Revenue Code which would have jeopardized accelerated depreciation for any of this utility's property in Categories I and II, if the Commission 511 had continued to require flow-through of the federal tax benefits resulting from that rapid depreciation. The propriety of normalizing federal income tax expense for all of the property in those categories may, therefore, be considered together on the facts of this case.[16] IV. The Company's own experts did not testify that the assumed federal tax expenses appellant questions will ever become due under reasonable projections about the rate of inflation and the Company's growth. On such a record we cannot assume that the Commission considered and applied the "actual taxes paid" doctrine to federal taxes before it granted the Company's normalization request.[17] The filing of six separate complaints, after the PUC instituted a formal investigation of the lawfulness and reasonableness of the Company's proposed rates, places the burden of proving that the proposed rates are just and reasonable on the Company. That burden includes an obligation to prove that the tax expense included in the rates charged to the consumer bears a fair and substantial relationship to the actual tax expense or that the denial of 512 normalization accounting would in fact penalize ratepayers. Public Utility Code § 315(a), 66 Pa.C.S. § 315(a).[18] In Pittsburgh I, supra, Superior Court quoted with approval the statement: "[T]he utility [is] not entitled to an allowance on account of a tax which it had not been called on to pay and which there was no evidence that it would be required to pay," citing Chambersburg Gas Co. v. PUC, 116 Pa.Superior Ct. 196, 224, 176 A. 794, 805 (1935) (company filing consolidated return may not show as expense for rate-making purposes income taxes it would have paid had it filed a separate return). Two years later in Pittsburgh, Appellant v. Pennsylvania Public Utility Commission, 187 Pa.Superior Ct. 341, 144 A.2d 648 (1958) (Pittsburgh II),[19] Superior Court further explained the "actual taxes paid" doctrine, restating its earlier conclusion that a tax saving should not be retained by a utility or recovered from its ratepayers unless it is shown that the saving is merely deferred. If the Commission now allows a company to pass on costs or expenses in the absence of evidence it will actually incur them, it abuses its discretion. In an effort to bring itself within the doctrine so redefined, the utility company here has argued that accelerated depreciation merely defers taxes. It is true that accelerated depreciation of each asset taken as a single unit would result in a mere tax deferral if overall effective tax rates were static and if the mechanical application of that static rate to the annual depreciation deduction attributable to each individual asset resulted in a pro-tanto tax reduction. 513 Under such assumptions, the tax reduction on each asset would be correspondingly reduced in later years and the tax due would be increased by the sum of all such reductions in a simple linear relationship. In reality, however, the relation is dynamic; utilities replace depreciated assets. Their capital expenditures increase with growth and inflation and tax rates are not static. Indeed, the Commission's rate case handbook states: "[A] continuing construction program adding assets at a constant or increasing dollar rate may perpetuate indefinitely the fact that the income tax claim of a utility remains lower under flow-through than under normalization. This is true because, while for any given single asset tax depreciation eventually becomes lower than book depreciation, when you continuously purchase new assets and depreciate them, the total depreciation for all assets will remain higher than book depreciation indefinitely." J.H. Cawley and N.J. Kennard, supra, C3-C4 (emphasis in original). In Alabama-Tennessee Natural Gas Co. v. Federal Power Commission, 359 F.2d 318, (5th Cir.1966), cert. denied 385 U.S. 847, 87 S.Ct. 69, 17 L.Ed.2d 78 (1966), the Court of Appeals summarized the effect of normalization, stating that a regulated utility: "will never be required to pay higher income taxes because of its election to claim liberalized depreciation unless its gross plant declines in dollar value as a result of lower demand or lower plant construction cost. Normalization during a period of growth or stability would force ratepayers to provide funds for a hypothetical tax liability that might never become payable or, at the very least, to provide funds many years in advance of the time they are needed." Id. at 336 (emphasis in original).[20]See also Pennsylvania PUC v. Phila. Electric Co., 31 PUR 4th 15, 75 (1978). 514 In this case, the Commission has not told us whether it views this utility as a "going concern", subject to growth, inflation and the necessity of replacing retired physical plant, or whether it is instead treating the reduced tax expense from accelerated depreciation on an asset-by-asset basis. The distinct tax treatment the Internal Revenue Code now requires for pre and post-1981 assets, in the absence of overall normalization of federal tax expense, may require separate rate-making treatment of the earlier assets. In such case, the PUC must determine whether the reserve created by normalizing depreciation of post-1980 assets will be sufficient to offset the decreasing depreciation on the utility's pre-1981 property.[21] On this record we cannot tell whether the Commission examined the amounts, collected from current ratepayers and placed in the tax reserve account, in light of the Company's projected growth rate and projected replacement costs. It should do so to determine if a time will come in the reasonably near future when the Company's total annual tax due under an accelerated method of depreciating that property will be greater than under straight-line depreciation. Only if that total tax 515 is greater will there be a need to draw on the tax reserve account to meet it. As the expert body, the Commission must make these determinations as part of its duty to see that rates are "just and reasonable." 66 Pa.C.S. § 1301. See also Pennsylvania PUC v. Pennsylvania Gas and Water Co., 492 Pa. 326, 424 A.2d 1213 (1980), cert. denied 454 U.S. 824, 102 S.Ct. 112, 70 L.Ed.2d 97 (1981), later proceeding Pennsylvania Gas and Water Co. v. Pennsylvania PUC, 79 Pa. Commonwealth Ct. 416, 470 A.2d 1066 (1984). Those determinations must be supported by specific findings as provided in 66 Pa.C.S. § 703(e).[22]See also 2 Pa.C.S. § 507, Administrative Agency Law. In the absence of specific findings of fact and conclusions of law, this Court cannot infer that the Commission actually and properly determined that rates which include normalized federal taxes on Categories I and II property are "just and reasonable" as a matter of law. Further proceedings are therefore necessary on these issues relating to federal tax expense. Page's Department Store v. Velardi, 464 Pa. 276, 346 A.2d 556 (1975). National Fuel Gas Distribution Corp. v. PUC, 76 Pa. Commonwealth Ct. 102, 464 A.2d 546 (1983), later proceeding National Fuel Gas Distribution Corp. v. PUC, 81 Pa. Commonwealth Ct. 148, 473 A.2d 1109, 1123 (1984). See Noerr Motor Freight v. PUC, 180 Pa.Superior Ct. 62, 118 A.2d 248 (1955); UGI Corporation v. PUC, 49 Pa.Commonwealth Ct. 69, 410 A.2d 923 (1980). 516 Following those proceedings the Commission must make the determinations set forth at pp. 96 and 97 of this opinion. V. In the case before us the Commission, over the objections of its staff and the Administrative Law Judge, declined to consider our redefined "actual taxes paid" doctrine and permitted normalization on the ground that it would improve the company's downgraded bond rating. On this basis, without evidence or findings on the extent to which normalization's increase in service cost would be offset by a decrease in capital cost, the Commission concluded that normalization is in the "public interest" and that "it is unnecessary to review all arguments regarding the issue of normalization and flow-thru [sic]." Reproduced Record, Appendix B at p. 27. If there were evidence and findings to support it, this position would be consistent with some federal cases holding that normalization is permissible even though it results in perpetual tax deferrals, because it is a ratemaking device which promotes the financial integrity of utilities. See, e.g., Public Systems v. F.E.R.C., 709 F.2d 73, 83 (D.C.Cir.1983) (Public Systems II). This position has been rejected by Pennsylvania's Legislature and our courts in favor of the policy considerations underlying the "actual taxes paid" doctrine as redefined in Pittsburgh II, supra. Arguably tomorrow's consumers may be better served by requiring current ratepayers to infuse interest-free capital into our utilities through the collection of excess expenses from today's ratepayers. This may also reduce the need for additional borrowing in the capital market, improve the bond rating of utilities and lower the cost rate for common equity. However, if utility rates are to reflect such a capitalization requirement from current consumers to protect the financial integrity of the system for the future, that is a matter for the Legislature, not the courts or the Commission, to decide. In adding Section 1315 to the Public Utility Code, Act of December 30, 1982, P.L. 1473, effective immediately, the Legislature has recently reaffirmed the 517 policy that current ratepayers should shoulder only the actual expenses of providing current utility service. This section pertains to those costs incurred by electric utilities which may be included in their rate bases and provides: Except for such nonrevenue producing, nonexpense reducing investments as may be reasonably shown to be necessary to improve environmental conditions at existing facilities or improve safety at existing facilities or as may be required to convert facilities to the utilization of coal, the cost of construction or expansion of a facility undertaken by a public utility producing, generating, transmitting, distributing or furnishing electricity shall not be made a part of the rate base nor otherwise included in the rates charged by the electric utility until such time as the facility is used and useful in service to the public. Except as stated in this section, no electric utility property shall be deemed used and useful until it is presently providing actual utility service to the customers. 66 Pa.C.S. § 1315. We believe we should take into account this declaration in a plainly related area in determining whether the Commission has the power to make a general change in policy with respect to normalization of tax expense to the benefit of investors as well as future ratepayers and to the detriment of current ratepayers. We simply cannot tell on this record whether the use of normalization for pre-1981 federal tax expenses, as opposed to flow-through, results in a rate which justly and reasonably allocates responsibility for those federal tax expenses among the utility and its current and future ratepayers. At a minimum, the PUC should have examined relevant factors such as the potential effect of separating utility assets into two distinct categories for purposes of federal tax deductions: (a) pre-1981 assets, which will forever decline in value, and (b) assets placed in service after 1980, which will be constantly augmented or replaced as they wear out or as demand increases. If the Commission's summary adoption of normalization of tax expense without a real discussion of 518 its reasons reflects a new policy generally favoring normalization, without regard to the particular circumstances surrounding a company's request, it cannot stand. We are uncertain whether the Commission has intended such an about face because it has previously rejected normalization of tax expense as a general policy, stating that: It may be argued that the matter of normalization versus flow-through could be handled better in a generic proceeding, since the underlying theories are applicable to all electric utilities who could provide input. A thorough review of this matter convinces us, however, that not only would it be appropriate but even preferable to approach at least certain aspects of the normalization flow-through problem on a case-by-case method. Normalization and flow-through, where not required for accelerated depreciation, do not lend themselves to an "all or none" treatment. While it may be true that a general commission policy on certain aspects of this problem may be better reached on a generic basis, on the other hand, other aspects may be better met on an ad hoc basis upon consideration of the varying situations with each utility. Pennsylvania PUC v. Philadelphia Electric Co., 31 PUR 4th 15, 75 (1980). VI. We turn now to the PUC's authorization of normalization of state income taxes in determining rates. Here there is no likelihood that the Company will lose federal tax benefits since both the IRC and the Treasury Regulations requiring normalization are expressly inapplicable to state income taxes. 26 CFR 1.167(1)-1(a). See Pennsylvania PUC v. Philadelphia Electric Co., 33 PUR 4th 319, 353-54 (1980). Whether accelerated depreciation is normalized in rate-making has no effect on the Pennsylvania net income taxes which corporate utilities pay. To the extent that Pennsylvania accepts as its tax base a public utility's federally taxable income, that utility receives the benefit of any accelerated depreciation federal tax law allows. We believe the discussion 519 in Part III of this opinion shows that the PUC will have insured the availability of accelerated depreciation on this utility's federal tax returns by permitting normalization of the federal tax expense attributable to IRC § 168 ACRS rapid depreciation on post-1980 assets. Normalization has no effect on the amount due for our state income taxes. The extent by which the Commission adjusts a public utility's tax expense by removing the current tax benefits of accelerated depreciation in determining cost of service has no effect on the state taxes a utility pays. The Pennsylvania corporate net income tax law makes no reference to normalization. Unlike the Internal Revenue Code, it nowhere requires or prohibits the use of normalization in connection with the allowance or disallowance of rapid depreciation, either as a general tax benefit or that kind of tax benefit specifically denominated a "tax preference." See Tax Reform Code of 1971, Act of March 4, 1971, P.L. 6, Art. IV, Section 401, as amended, 72 P.S. § 7401(3)(d)-(o), especially § 7401(3)(l) (Supp.1984-85).[23] On the other hand, normalization does affect the rates which a utility charges its customers. When the Commission uses a hypothetical state tax expense which reflects depreciation calculated by the straight line method the rates set will be higher than rates based on the actual taxes paid unless the cost of capital is lowered enough to produce a fully offsetting reduction in the "fair return" component of the rate. There is no evidence to support such a finding on this record. Finally, since our state's tax laws require no artificial separation of assets into categories depending on when they are placed in service, no impediment appears to using a going concern analysis in dealing with state taxes. That analysis, not the separate asset analysis underlying normalization, seems to us in accord with the dynamics of the real 520 world and we will require its use in expensing Pennsylvania taxes in the absence of contrary legislative intent. Under that going concern analysis the normalization of state taxes would on this record violate our longstanding and well-recognized doctrine of "actual taxes paid," as it has been redefined. We believe Commonwealth Court incorrectly read Pittsburgh I as holding only that the Commission did not abuse its discretion in denying the normalization request before it in that case. That reading of Pittsburgh I overlooks its ratio decidendi. Superior Court expressly determined the Commission did not abuse its discretion in denying normalization only because allowance of normalization in that case would have violated the rule that only "actual taxes paid" can be considered as a tax expense when rates are set. Pittsburgh I, supra, 182 Pa.Superior Ct. at 580, 128 A.2d at 385. Prior to its decision in the case now before us, the Commission had consistently followed Pittsburgh I and II. In these earlier cases, such as Pennsylvania PUC v. Duquesne Light Co., 43 PUR 4th 27, 71 (1982), the Commission also relied on the United States Supreme Court's decision in Federal Power Commission v. Memphis Light, Gas and Water Division, supra. In Memphis Light the Court noted that normalization of accelerated depreciation: [I]n practice resulted in permanent tax savings. Because most utilities had growing or at least stable plant investments, the depreciation allowances from additional and replacement equipment offset the declining depreciation allowance on existing property. Id. 411 U.S. at 460, 93 S.Ct. at 1725. We find the actual taxes paid doctrine, as redefined in Pittsburgh II, supra, to permit consideration of tax expense which is merely deferred, is in accordance with the policy our legislature has set in this area. Although we have held that the power to fix "just and reasonable rates" imports flexibility to a complicated 521 regulatory function by a specialized decision-making body, we do not believe that the appropriate ratemaking treatment of deferred taxes is a matter within the unbridled discretion of the Commission. See PUC v. Pennsylvania Gas and Water Co., 492 Pa. 326, 424 A.2d 1213 (1980). We have never interpreted that discretion to be absolute. We are unpersuaded by the cases cited in support of the proposition that the decision to permit normalization is necessarily and always a matter within the Commission's discretion. These decisions generally rest on a bald conclusion that normalization is not unlawful, is supported by reason and is not arbitrary and capricious. State ex rel. Utility Consumers Council, Inc. v. Public Service Commission, 606 S.W.2d 222 (1980), cert. denied sub nom. Utility Consumers Council, Inc. v. Public Service Commission, 450 U.S. 1042, 101 S.Ct. 1761, 68 L.Ed.2d 240 (1981).[24] If normalization violates the "actual taxes paid" doctrine, the rates approved by the Commission cannot be "just and reasonable" as required by law unless some extraneous penalty, such as that which Congress imposed with respect to post-1980 property, would leave the ratepayer relatively worse off if normalization is not allowed. An agency order imposing a rate which is not just and reasonable is unlawful. This Court will not affirm an unlawful agency decision. We believe that the Pennsylvania version of the "actual taxes paid" doctrine, as developed in Pittsburgh I and II and the Commission in its earlier cases, accurately interprets the statutory requirement that rates be "just and reasonable," found in 66 Pa.C.S. § 1301. That view is further supported by the Legislature's recent quoted mandate 522 in the directly related area set forth in 66 Pa.C.S. § 1315. See, supra, at 104. Reversed and remanded to the Public Utility Commission for further proceedings consistent with this opinion. JUDGMENT ON CONSIDERATION WHEREOF, it is now here ordered and adjudged by this Court that the judgment of the COMMONWEALTH COURT OF PENNSYLVANIA be, and the same is, hereby reversed and remanded to the Public Utility Commission for further proceedings consistent with this opinion. NOTES [1] "Normalization" is a rate-making concept designed to adjust a utility's operating expenses in its test year by eliminating abnormal, non-annual events which are known and certain to change in a regularly recurring manner. J.H. Cawley and N.J. Kennard, Rate Case Handbook, 150-153 (1983). As applied to income tax expense it permits a public utility to include in its current rate base an income tax expense higher than that which it has been required to pay on the assumption that the taxes saved by accelerated depreciation are merely deferred. A particular kind of normalization of tax expense utilizing reserve accounting for income taxes is required by United States Internal Revenue Code §§ 167(l) and 168(e) if the utility wishes to use rapid depreciation on certain assets in computing its federal tax. [2] The "Asset Depreciation Range" (ADR) sets the useful life of assets for tax depreciation by classifying them into broad types. The tax life is generally less than the period of actual use. Thus, ADR confers a current tax benefit. The "Double Declining Balance" (DDB) method of depreciation offers another current tax benefit. It permits tax depreciation in the first year an asset is used at twice the rate allowable under the straight line method. The same double rate is thereafter applied to the declining balance instead of the original cost. This results in lower deductions in later years. The "Accelerated Cost Recovery System" (ACRS) replaced all other statutory accelerated depreciation methods for property placed in service after December 31, 1980. Under ACRS, a taxpayer may choose between only two primary methods: (1) accelerated statutory rates or (2) a straight-line rate using one of three elective recovery methods. All these tax benefits are designed to encourage capital investment. [3] In this opinion we have retained the traditional terminology of "actual taxes paid" for this doctrine. Strictly speaking, however, our present version of this doctrine, as impliedly redefined by Superior Court in Pittsburgh, Appellant v. Pennsylvania Public Utility Commission, 187 Pa.Superior Ct. 341, 144 A.2d 648 (1958) (Pittsburgh II), would be more aptly titled "actual taxes payable," since it does allow consideration of deferred taxes. See, infra, at p. 512. [4] An example may help clarify this situation. Suppose a company with $1,000,000.00 of depreciable plant applies straight-line depreciation for the purpose of computing its federal income taxes, it gets a depreciation deduction of $30,000. If it uses one of the liberalized methods, its depreciation deduction will be $60,000. Assuming a fifty percent tax rate the company can thus reduce its current income tax liability by $15,000.00. Under IRC § 168 the company must credit the $15,000 to a reserve for deferred taxes. If "flow-through" were used, i.e., if the taxes are not "normalized" by creating the reserve, this $15,000 tax saving would be passed on to ratepayers, resulting in lower current rates. 1 Priest, Principles of Public Utility Regulations 124 (1969). The revenue required in our case has a ratio of less than two to one because the applicable tax rate is only 46%, not 50%. If the rate were 50% the company would have to charge its customers $30,000 to get the $15,000 it must reserve. [5] See note 7 at 506, infra. [6] Indeed, the policy argument for normalization of tax expense recognizes this. It holds that the capital formation incentives behind accelerated depreciation are contradicted if the rate-making process passes them on to consumers instead of reserving them for investment. [7] The Consumer Advocate states that elimination of the deferred tax reserve account from the rate base ultimately reduces the additional revenue required for normalization by 20%. The Company and the Commission have not disputed that assertion. If it is correct, the reserve required by the Internal Revenue Code offsets only one-fifth of the rate increase normalization entails. [8] See Pennsylvania PUC v. Duquesne Light Co., supra at 69, quoted, supra, at 98. [9] Accord E.C. Segar, in Thimble Theater, speaking through Wimpy, "I'll gladly pay you Tuesday for a hamburger today." Contra, Aesop, The Ant and the Grasshopper. [10] Thereafter, however, the utility's used and useful assets may be reduced by the amounts accumulated in the tax reserve to arrive at the capital component of the rate base on which the Commission figures the utility's "fair return." See 26 Code of Fed.Reg. 1.167(1)-1(h)(6). [11] See, infra, at 510-513. [12] The Consumer Advocate does not distinguish his arguments with respect to federal and state taxes. Such distinction is necessary to proper analysis for the reasons discussed below. However, the arguments for or against normalization of state taxes do not require separation of depreciable assets into the IRC categories since state law permits accelerated depreciation without regard to time of acquisition. See discussion in Part VI, infra, at 518. [13] In this respect the Tax Reform Act of 1969 provided that "if the taxpayer makes an election (to normalize) . . . before June 29, 1970. . . paragraph (2)(C) shall not apply with respect to any post-1969 public utility property to the extent that such property . . . increases the productive or operational capacity of the taxpayer. . . ." 26 U.S.C. § 167(l)(4)(A). The result of adding paragraph (A) to 26 U.S.C. § 167(l)(4) "is that even though utility commissions retain discretion to approve accounting methods, approval of flow-through accounting will cause . . . utilities . . . (having made the election under paragraph (4)(A) and those which did not use flow-through accounting in 1969) to lose their rights to claim accelerated depreciation tax deductions for post-1969 expansion property." "Recent Decisions on Accelerated Depreciation and Normalization", Public Utilities Fortnightly, Vol. 105, No. 10, at 49 (May 8, 1980). This resulted in a strong practical compulsion for regulatory approval of normalization. Prior to 1969, rates were generally based on flow-through. Today, normalization is the common method. [14] See, supra, at 503-504. [15] However, neither ADR nor DDB are permissible methods of depreciating assets put in service after 1980. For such assets the ACRS method of IRC § 168(e) is the only available method of accelerated depreciation. Section 168(e)(3)(C) prohibits utilities that are not allowed to normalize tax expense in figuring their cost of service from using ACRS. The increase in tax expense this prohibition entails is apparently so large that the Consumer Advocate concedes the necessity of normalizing federal taxes to account for the effects of ACRS depreciation on these assets. [16] The facts presented by other utilities may require separate analyses for Categories I and II as well as for replacement and expansion property within those categories. [17] The Commission's own expert utility tax consultant, William F. Doyle, testified against normalization of the Company's deferred state and federal taxes: First, . . . . The ratepayers are captive investors. . . . These ratepayers-investors are then not allowed to earn a proper return on their investment since a part of every dollar they are forced to contribute is not deducted from the utilities' rate base. For every one dollar required for normalization the ratepayer must provide approximately $2.00 of revenues. Approximately one dollar goes to the State and Federal government as income tax on the increased revenue received by the utility. . . . Second, with regard to State deferred income taxes, there is no State or Federal law requiring normalization of state income taxes. . . . . Fourth, flow-through of State deferred income taxes is an established policy with this Commission. Reproduced Record at 35A-37A. Mr. Doyle also testified that the Commission had denied normalization of the ADR benefit in Pennsylvania Power and Light's recent rate filing (R-80031114). Reproduced Record at 35A. [18] This section reads: In any proceeding upon motion of the Commission, involving any proposed or existing rate . . . or in any proceeding upon complaint involving any proposed increase in rates, the burden of proof to show the rate involved is just and reasonable shall be upon the public utility. [19] This case involved the question of whether the utility had to flow-through benefits of accelerated depreciation even though it elected to use straight-line depreciation instead of the accelerated method for tax purposes. The court held this issue was within the discretion of the Commission. [20] We recognize that later federal cases do not reflect this view. Thus, Federal Power Commission v. Memphis Light, Gas and Water Div., 411 U.S. 458, 93 S.Ct. 1723, 36 L.Ed.2d 426 (1973), held that the authority to approve normalization for pre-1970 property and post-1969 replacement property is within the discretion of the Federal Power Commission. The FPC's view of normalization seems to us to be based on economic assumptions and projections accepted by the Congress with respect to future energy requirements and who should pay for them. The Pennsylvania Legislature has not accepted those assumptions and projections. See 66 Pa.C.S. § 1315 and discussion, infra, at 516. [21] This issue was raised in Memphis Light, Gas and Water Div. v. Federal Power Commission, 500 F.2d 798 (D.C.Cir.1974). There, the D.C. Circuit Court recognized that the funds in the reserve account established by IRC § 167(l)(3)(G) are not statutorily earmarked for the specific property which generated the deferred tax expense. However, the Court ruled that Congress contemplated that the reserve fund would be used exclusively to offset future tax liability, that is, declining depreciation on the same post-1969 (now 1980) expansion property. Id. at 804-05. See H.R.Rep. No. 413, 91st Cong. 1st Sess., pt. 1 at 132 (1969). These authorities do not bind us. The statute contains no mechanism for effectuating that intent for utilities, such as Pennsylvania Power Company, which did not make a section 167(l) election to normalize. [22] Prior to its repeal in 1978, Section 1005 of the Act of May 28, 1937, P.L. 1053, 66 P.S. § 1395, required the Commission to make findings "in sufficient detail to enable the court on appeal to determine the controverted question and whether proper weight was given to the evidence." Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704 now governs our scope of review on appeals from the Commission's adjudications and is substantially identical to the repealed provision of the Public Utility Law. "[T]he court shall affirm the adjudication unless it is in violation of the constitutional rights of the appellant or is not in accordance with the law . . . or that any finding of fact made by the agency and necessary to support its adjudication is not supported by substantial evidence." [23] The Capital Stock Franchise tax imposed on utility corporations whose business is not confined to Pennsylvania is similarly neutral with respect to normalization. Act of March 4, 1971, P.L. 6, Art. VI, 72 P.S. §§ 7601-7606. [24] The battle for normalization in the courts having been largely lost, in 1981 Congress denied the use of ACRS rapid depreciation to those utilities which are not permitted to normalize. By limiting these utilities to straight-line depreciation the cost to the utility, and ultimately to its ratepayers, is sufficiently onerous to compel PUC approval of normalization of federal tax expense in connection with assets put in service thereafter. This federal law does not apply to state taxes. Although the investment policy set nationally by Congress through the income tax law appears in conflict with our redefined "actual taxes paid" doctrine, that policy is not binding on us.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265504/	491 A.2d 1041 (1985) BROWN'S AUTO SALVAGE v. Beverly PICHE. No. 84-094. Supreme Court of Vermont. March 29, 1985. Christopher H. Howe, Fair Haven, for plaintiff-appellee. Beverly R. Piche, Burlington, defendant-appellant, pro se. Before ALLEN, C.J., and HILL, UNDERWOOD, PECK and GIBSON, JJ. HILL, Justice. The plaintiff, Brown's Auto Salvage, brought an action in small claims court against the defendant, Beverly Piche, seeking to recover the purchase price of an automobile engine sold to her. The trial court entered judgment for the plaintiff. We affirm in part and remand the case for further proceedings. In November of 1983, defendant purchased from the plaintiff an engine for her daughter's car. The parties agreed to a price of $416.00, and plaintiff accepted a check as payment. A few days later, the engine was delivered to the defendant. Upon inspection of the engine, the defendant decided that it was not complete as it lacked external components such as an alternator and a carburetor. Defendant notified plaintiff of this alleged deficiency, and requested a partial refund. Plaintiff refused to give defendant a partial refund, but offered to take back the engine and refund the purchase price. The defendant kept the engine, however, and cancelled payment on her check. A week later, she sent plaintiff a second check for a hundred dollars less than the agreed-upon purchase price. This check was never cashed by plaintiff. The engine was then placed in defendant's daughter's car. The plaintiff subsequently brought this action to recover the purchase price. *1042 The defendant alleges on appeal that the trial court erred in rendering judgment for the plaintiff without making a finding on whether the engine was complete as delivered. Since the absence of a resolution of this issue does not affect the court's judgment on the plaintiff's claim, its judgment on this claim is affirmed. Pursuant to 9A V.S.A. § 2-607(1), a buyer of goods "must pay at the contract rate for any goods accepted." According to 9A V.S.A. § 2-606(1), Acceptance of goods occurs when the buyer (a) After a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their non-conformity; or (b) fails to make an effective rejection (subsec. (1) of § 2-602), but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or (c) does any act inconsistent with the seller's ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him. In the instant case, the court found that the defendant accepted the engine by refusing to return it and by placing it in her daughter's automobile. Thus, regardless of whether the engine was complete, it was accepted and the seller is entitled to recover the agreed-upon purchase price. The defendant, however, in her answer, disputed the plaintiff's claim by stating: "The engine as sold to me by Mr. Brown [, plaintiff,] was, and is incomplete and is not as represented." This allegation was sufficient to raise a claim alleging a breach by the plaintiff. Under the provisions of 9A V.S.A. §§ 2-714 to 2-715, if the defendant can prove that the engine delivered did not comply with the terms of the parties' agreement, the plaintiff is in breach, and the defendant is entitled to recover damages for her losses. Evidence was presented below by both parties on the issue of the engine's completeness. Although the court below made findings of fact on its own initiative, it failed to make a finding on the issue raised by the defendant's claim. The court thus failed to address a critical issue in the case, and a remand on this issue will be ordered. See Kopelman v. Schwag, 145 Vt. 212, 214, 485 A.2d 1254, 1255 (1984); Strong v. Strong, 144 Vt. 44, 46, 472 A.2d 1245, 1247 (1984). Affirmed in part and remanded for further proceedings.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265520/	341 Pa. Superior Ct. 350 (1985) 491 A.2d 851 In re Search Warrant B-21778 Robert GARTLEY, Sr. Appeal of COMMONWEALTH of Pennsylvania. Supreme Court of Pennsylvania. Argued August 29, 1984. Filed April 4, 1985. Petition for Allowance of Appeal Granted September 16, 1985. 355 Richard A. Linzer, Pittsburgh, for Commonwealth, appellant. John F. Hooper, III, Pittsburgh, for appellee. Before ROWLEY, JOHNSON and HESTER, JJ. 356 OPINION OF THE COURT ROWLEY, Judge: In this case of first impression, we address the propriety of the use of a search warrant by agents of the Attorney General's Office to obtain business records transferred to an attorney's possession by a client suspected of criminal wrongdoing. After affording careful consideration to the arguments presented here, we hold that the office of an attorney not suspected of criminal activity is not immune from a search authorized by a particularized warrant supported by probable cause. In February of 1982, an investigation by the Medicaid Fraud Control Section of the Attorney General's Office into an unlawful diversion by hospital employees of funds received from the sale of silver "flake" and x-ray film was commenced. Shortly thereafter, investigators interviewed appellee, Robert J. Gartley, Sr., in connection with this scheme. Gartley indicated that he was in the business of buying and selling old x-ray film for its silver content, and provided the names of hospitals with which he did business. Gartley named five Western Pennsylvania hospitals to which he issued checks in payment of the film to persons other than the hospital administrators. Subsequently, Attorney James Victor Voss, of the law firm of Meyer, Unkovic and Scott in Pittsburgh, notified the investigators that he was counsel for Gartley. On July 19, 1982, the investigators obtained a search warrant from a Westmoreland County District Justice for Gartley's home/office. At the time execution of the warrant was attempted, Gartley was not home. However, Mabel Gartley, Mr. Gartley's wife, told the investigators that the records referred to in the warrant had been removed from the home, and taken to Attorney Voss' law office. Attorney Voss confirmed that the records were in his possession. However, when asked to produce his client's records, Voss refused. Consequently, on July 21, 1982, the 357 investigators obtained a search warrant for Voss' office and the offices of Meyer, Unkovic and Scott. The warrant authorized the seizure of enumerated business records of Gartley related to his purchase of x-ray films from the hospitals involved in the investigation. In describing the premises to be searched, the warrant stated: The office of Meyer, Unkovic and Scott, and James Victor VOSS, and their files, located at 1400 Frick Building, Grant Street, Pittsburgh, Pennsylvania 15219. The Frick Building being a 20-story office building. Prior to execution of the warrant, Attorney John F. Hooper of Meyer, Unkovic and Scott orally requested injunctive relief from the Honorable Thomas A. Harper, Court of Common Pleas of Allegheny County. Thus, at some point during the search, the investigators received first a telephone message, and then a written order, from Judge Harper, temporarily enjoining further execution of the warrant. Judge Harper's written order also scheduled a hearing for the following morning, addressed to the propriety of the search. Although no evidence was presented, Judge McGregor, by order dated August 5, 1982, granted appellee's motion to quash the warrant.[1] In so doing, Judge McGregor held that (1) the warrant failed to specify the area to be searched with reasonable particularity; (2) the search of an attorney's office is unreasonable absent a showing of the attorney's own wrongdoing, in light of the attorney-client privilege, and (3) the issuance of a search warrant here was not the proper procedure for obtaining the documents sought; 358 less intrusive means were available. This appeal by the Commonwealth, challenging each of the conclusions reached by Judge McGregor in granting the motion to quash, followed. We address each of these conclusions seriatim. I. THE WARRANT In concluding that the warrant was not sufficiently particular, the trial judge focused on the quality of the description of the premises to be searched.[2] The Fourth Amendment of the United States Constitution requires that ". . . no warrants shall issue, but upon probable cause . . . and particularly describing the place to be searched . . ." Similarly, Article I, Section 8 of the Pennsylvania Constitution provides that ". . . no warrant to search any place . . . shall issue without describing [it] as nearly as may be . . ."[3] This requirement of particularity necessarily achieves definition according to the circumstances and nature of the items to be seized; a common sense approach must be utilized. As the Comment to Pa.R.Crim.P. 2005(c), which incorporates the constitutional particularity requirement, states in pertinent part, Paragraph [] . . . (c) [is] intended to proscribe general or exploratory searches by requiring that searches be directed only toward the specific . . . places set forth in the warrant. Such warrants should, however, be read in a common sense fashion and should not be invalidated by hypertechnical interpretations. . . . See also, Commonwealth v. Crawford, 320 Pa.Super. 95, 466 A.2d 1079 (1983); Commonwealth v. Barba, 314 Pa.Super. 210, 460 A.2d 1103 (1983); In Interest of Eckert, 260 Pa.Super. 161, 393 A.2d 1201 (1978). Thus, challenges to the specificity of the warrant have been rejected in cases where only a street address was supplied, or where a 359 general description of the building to be searched was provided. See e.g., Commonwealth v. Menginie, 312 Pa.Super. 293, 458 A.2d 966 (1983) (Warrant authorizing search of "214 North Linden and its garage" upheld); Commonwealth v. Chamberlain, 277 Pa.Super. 503, 419 A.2d 1261 (1980) (Warrant permitting search of "Conrad Store In Conrad, of the East fork district in Eulalia Township, R.D. 1, Austin, Pa., said building is a two-story structure painted white, located on the north side of Leg. route 52001" sufficiently specific); Commonwealth v. Mayfield, 262 Pa. Super. 96, 396 A.2d 662 (1978) (Description of premises as "549 West 10th Street, Erie, Pennsylvania. A 2 1/2 white aluminum sided multi-unit dwelling, the front door is on the east side of the residence facing north, the downstairs apartment. Has grey steps leading to the porch" sufficiently particular.) In each of these cases, this Court found that probable cause to believe that the premises as described were the scenes of criminal activity, or that evidence of a crime could be found therein, existed. Cf., United States v. Busk, 693 F.2d 28 (3d Cir. 1982) (Warrant authorizing entry into all apartments in multi-dwelling house does not satisfy the Fourth Amendment's particularity requirement when probable cause has been shown for search of only one of them.) Where, then, the description provided is precise enough to enable the executing officer to ascertain and identify, with reasonable effort, the place intended, and where probable cause exists to support the search of the area so designated, a warrant will not fail for lack of particularity. In the instant case, neither Attorney Voss nor appellee contested the magistrate's finding of probable cause to search Voss' office, and the offices of the law firm with which he is associated, nor would such a contention have had merit. As averred in the affidavit in support of the warrant, both appellee and his wife informed the Commonwealth's investigators that all of the items listed in the search warrant had been transferred to the attorney's possession; the affiant further alleged that Attorney Voss 360 himself confirmed these statements. The mere fact that the search was directed only toward seizure of the records of one of Voss' clients is not dispositive. The investigators could reasonably assume that, as a member of the law firm, Voss would have access to many areas within the firm's office; an individual attorney would not be confined to his or her own office. Furthermore, apart from conversations with the Gartleys and Voss, the investigators had no legitimate means of gathering information relevant to limiting the scope of the warrant, prior to its execution. In light of the confidential nature of the firm's activities, the investigators could not browse through the firm, observing Voss' movements, particularly since he was not the target of the investigation. Since the Commonwealth's agents were provided with no additional information reasonably suggesting a narrower drafting of this aspect of the warrant, and had no means at their disposal for acquiring such information, the futility of greater specification is clear. Thus, we conclude that the description of the area to be searched here was not overbroad.[4]See United States v. Lebovitz, 506 F.Supp. 249 (W.D.Pa. 1980), aff'd on other grounds, 669 F.2d 894 (3d Cir. 1982), cert. den., 456 U.S. 929, 102 S.Ct. 1979, 72 L.Ed.2d 446 (1982) (Warrant specifying only street address and city in which attorney's office was located did not violate Fourth Amendment's particularity requirement.)[5] The manner in which a search is conducted is, of course, as vital a part of the inquiry as whether it was warranted at all. The Fourth Amendment proceeds as much by limitation upon the scope of governmental action as by imposing preconditions upon its initiation. Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 899 (1968). See also Commonwealth v. Eliff, 300 Pa.Super. 423, 446 A.2d 361 927 (1982). Thus, the Commonwealth urges our consideration of "the record below" with respect to the attempted execution of the warrant, in ascertaining whether the description of the premises falls within constitutionally permissible limits. The scope of the warrant was restricted in practical effect, the Commonwealth argues, in that (1) initially, several requests that the materials be voluntarily surrendered were made, and (2) before it was interrupted, the search was limited to Attorney Voss' office and to a file, distinguishable in appearance from other visible files and bearing no name or other identifying mark. We may not, however, rely on these representations, given that no factual record was made in the trial court. Rather, the record contains only allegations made during the course of argument on the propriety of the warrant. Nonetheless, because the warrant is not impermissibly broad on its face, and there has been no finding that its aborted execution encompassed an unnecessarily broad area, we conclude that the trial court erred in characterizing the search thereby authorized as unconstitutionally overbroad. II. SEARCH OF AN ATTORNEY'S OFFICE We turn, then, to the pivotal issue here: is the use of a search warrant a constitutionally permissible means by which to secure the business records of a client suspected of criminal wrongdoing from the office of a non-suspect attorney? The essence of the Fourth Amendment to the federal constitution, and Article I, § 8 of the Pennsylvania Constitution, is reasonableness; these provisions provide protection against unreasonable searches and seizures. Zurcher v. Stanford Daily, 436 U.S. 547, 98 S.Ct. 1970, 56 L.Ed.2d 525 (1978); Commonwealth v. Tann, 500 Pa. 593, 459 A.2d 322 (1983); Commonwealth v. Grabowski, 306 Pa.Super. 483, 452 A.2d 827 (1982). Hence, all Fourth Amendment requirements must be tempered by considerations of reasonableness under the circumstances. Ker v. California, 374 U.S. 23, 83 S.Ct. 1623, 10 L.Ed.2d 726 362 (1963); Commonwealth v. Stanley, 498 Pa. 326, 446 A.2d 583 (1982). The determination of reasonableness of a search frequently involves balancing the intrusion on the individual's privacy interests against the government's need to conduct the intrusion. Commonwealth v. Lapia, 311 Pa.Super. 264, 457 A.2d 877 (1983), rev'd on other grounds, Commonwealth v. Dugger, 506 Pa. 537, 486 A.2d 382 (1985). As noted earlier, there is no question that the warrant issued here is supported by probable cause. Moreover, we have concluded that a sufficiently specific description of the premises to be searched is found therein. We must decide, then, whether the search proposed was reasonable in light of the privacy interests asserted here the attorney-client privilege, the work-product doctrine, client confidentiality, and the criminal defendant's constitutional right to counsel. The attorney-client privilege, codified at 42 Pa. Cons.Stat. §§ 5916 and 5928, embodies the common-law privilege universally accepted as indispensable to an attorney's professional relationship with his client. Fundamentally, the privilege is designed to foster full communication between the attorney and client. Commonwealth v. Hutchinson, 290 Pa.Super. 254, 434 A.2d 740 (1981). The attorney can effectively fulfill his roles as counsellor, intermediary and advocate only if, assured of confidentiality, the client is wholly free to completely and candidly disclose all the facts, favorable or unfavorable, to him. In most jurisdictions, including Pennsylvania, the incorporation of the common-law rule into statute has not changed the essentials of the privilege. Thus, several prerequisites to assertion of the privilege remain. As Professor Wigmore summarizes the privilege, Where legal advice of any kind is . . . sought from a professional legal adviser in his capacity as such . . . the communications relating to the purpose . . . made in confidence. . . by the client . . . are at his instance permanently protected . . . from disclosure by himself or by the legal adviser . . . except the protection may be waived. 363 8 Wigmore, Evidence §§ 2292 at 554 (McNaughton rev. 1961), quoted in Commonwealth v. Maguigan, 323 Pa.Super. 317, 470 A.2d 611 (1983). See also 79 Dick.L.Rev. 650 (1974-75). The attorney-client privilege is, then, somewhat limited in scope; it does not apply to pre-existing documents. Documents that could be subpoenaed from the client[6] or made the subject of a validly drawn search warrant for the client's home or office are likewise not enveloped by the privilege's protection merely by virtue of their transfer to an attorney. Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976); Mehrens v. State, 138 Ariz. 458, 675 P.2d 718 (App. 1983), cert. denied, ___ U.S. ___, 105 S.Ct. 219, 83 L.Ed.2d 149 (1984). See also, McCormick On Evidence, § 89 (3d ed. 1984). Similarly, the Code of Professional Responsibility prohibits an attorney's disclosure of his client's confidences and secrets. Disciplinary Rule 4-101 provides, in part, (B) Except when permitted under DR 4-101(C), a lawyer shall not knowingly: (1) Reveal a confidence or secret of his client, including his identity. (2) Use a confidence or secret of his client to the disadvantage of the client. (3) Use a confidence or secret of his client for the advantage of himself or of a third person, unless the client consents after full disclosure. (C) a lawyer may reveal: (1) Confidences or secrets with the consent of the client or clients affected, but only after a full disclosure to them. (2) Confidences or secrets when permitted under Disciplinary Rules or required by law or court order. (3) The intention of his client to commit a crime and the information necessary to prevent the crime. 364 (4) Confidences or secrets necessary to establish or collect his fee or to defend himself or his employees or associates against an accusation of wrongful conduct. CODE OF PROFESSIONAL RESPONSIBILITY, DR 4-101(B) and (C) (1974). As the Code defines "confidence" and "secret", `Confidence' refers to information protected by the attorney-client privilege under applicable law, and `secret' refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client. CODE OF PROFESSIONAL RESPONSIBILITY, DR 4-101(A) (1974). Ethical Consideration 4-4 points out that the attorney-client privilege and the duty imposed by the Code are not identical. The attorney-client privilege is more limited than the ethical obligation of a lawyer to guard the confidences and secrets of his client. This ethical precept unlike the evidentiary privilege exists without regard to the nature or source of information or the fact that others share the knowledge. CODE OF PROFESSIONAL RESPONSIBILITY, EC 4-4 (1974). Nonetheless, "in any analysis of the attorney-client privilege, we must recognize that our Code of Professional Responsibility provides strong support for the concept of a legally protected confidentiality for client attorney discourse." Brennan v. Brennan, 281 Pa.Super. 362, 370, 422 A.2d 510, 514 (1980). See also Commonwealth v. Maguigan, supra. Additional safeguards for the communications between attorney and client are provided by the work-product doctrine, enunciated by the Supreme Court in Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947). At its core, this doctrine shelters the mental processes of an attorney, providing a privileged area within which he can analyze and prepare his client's case. But the doctrine is an intensely practical 365 one, grounded in the realities of litigation in our adversary system. United States v. Nobles, 422 U.S. 225, 238, 95 S.Ct. 2160, 2170, 45 L.Ed.2d 141 (1975), quoted with approval in Lepley v. Lycoming Cty. Ct. of Com.Pl., 481 Pa. 565, 573, 393 A.2d 306, 310 (1978). Indeed, even in announcing the work-product rule, the Hickman Court recognized that work-product principles may not preclude discovery of evidentiary material. We do not mean to say that all written materials obtained or prepared by an adversary's counsel with an eye toward litigation are necessarily free from discovery in all cases. Where relevant and non-privileged facts remain hidden in an attorney's file and where production of those facts is essential to the preparation of one's case, discovery may properly be had. Hickman v. Taylor, supra, 329 U.S. at 511, 67 S.Ct. at 394, 91 L.Ed. at 462. As is thus evident, the work-product doctrine is distinct from and broader than the attorney-client privilege, and is especially important in criminal cases. The interests of society and the criminally suspect in obtaining a fair and accurate resolution of the question of guilt or innocence demand that adequate safeguards assure the thorough preparation and presentation of each aspect of a case. As a result, Pa.R.Crim.P. 305 excludes "legal research . . . records, correspondence, reports or memoranda to the extent that they contain the opinions, theories or conclusions of the attorney for the Commonwealth or the attorney for the defense . . ." from its mandatory discovery requirements. Pa.R.Crim.P. 305(G). A criminal defendant's right to counsel, in all critical stages of the proceeding, guaranteed by the Sixth Amendment to the United States Constitution, and Article I, § 9 of the Pennsylvania Constitution, United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967); Commonwealth ex rel. Santiago v. Myers, 419 Pa. 326, 214 A.2d 206 (1965); Commonwealth v. Brocco, 263 Pa.Super. 51, 396 366 A.2d 1371 (1979), must also be weighed in determining the reasonableness of proceeding by a warrant in this context. Not only is effective assistance of counsel a constitutional mandate, it is also necessary to an adversary system of justice. Assuredly, counsel's assistance can be made safely and readily available only when the client is free from the apprehension of disclosure. In balancing the competing interests in the instant case, it is essential to note exactly what the Commonwealth sought. As "Attachment A" to the search warrant indicates, the Commonwealth was interested in records of appellee's business transactions with five named hospitals. Mr. and Mrs. Gartley informed the investigating agents on July 19, 1982 that "all of the items sought on the search warrant were taken to the office of Attorney James Voss" following the agents' interview with Mr. Gartley on February 12, 1982.[7] The Commonwealth was not, then, seeking any of the attorney's personal memoranda or notes regarding conversations with his client but, rather, pre-existing documents. Thus, appellee may not invoke the protection afforded by the attorney-client privilege and the work-product doctrine. Similarly, the search of his attorney's office would not have compromised appellee's constitutional right to counsel. The investigatory process is not a "critical stage" for Sixth Amendment purposes. Commonwealth v. Brocco, supra. In fact, in rejecting this contention, this Court, sitting en banc, noted, [W]ere we to adopt [the] contention that the right to counsel attaches whenever a party retains counsel to render legal advice regarding potential legal problems, the use of informants or other means of investigation would be significantly curtailed. In essence, it would permit a suspect to hide behind the sixth amendment 367 cloak by the mere payment of a token retainer to a legal adviser. Accordingly, [this] contention is without merit. Id., 263 Pa.Super. at 68, 396 A.2d at 1379-1380. We recognize that in the course of execution of the warrant issued here, truly confidential communications may be inadvertently examined by the inquisitive investigator. Yet we hold that appellee's interest in confidentiality may not be utilized to impede a legitimate, carefully circumscribed, criminal investigation. Although the Fourth Amendment places limits on the kinds of intrusions the government may make upon individuals and their property in gathering evidence, these limitations are not intended to encourage the concealment of evidence; they are designed to promote privacy and autonomy. Any intrusion into the private communications between Mr. Gartley and Attorney Voss during the execution of the warrant would be attributable to Mr. Gartley's own conduct, resulting directly from the transfer of the records and other documents to his attorney's care. Consequently, the use of Attorney Voss' office as a haven for evidence material to an ongoing criminal investigation does not place it beyond the reach of a proper search pursuant to a warrant issued on probable cause; we will not restrain the Commonwealth's efforts to obtain otherwise seizable evidence merely because it has been placed in the hands of an attorney. To hold otherwise would mean that a criminal suspect could shield evidence from discovery by the simple expedient of delivery to an attorney, a result we deem patently unreasonable. We are mindful of the need to protect the rights of "innocent" parties the other clients of an attorney whose office is made the subject of a search warrant. Although, as here, a warrant may describe the items to be seized and the location of the office in which they may be found with constitutionally sufficient particularity, such searches remain extremely sensitive, in that the executing officers may unwittingly be exposed to other individuals' confidences and secrets. Nonetheless, we remain unpersuaded that the 368 acquisition of a search warrant for a non-suspect attorney's office is per se unreasonable. Courts have consistently upheld searches of law offices where the attorney at issue was the target of a criminal investigation. See, e.g., Andresen v. Maryland, 427 U.S. 463, 96 S.Ct. 2737, 49 L.Ed.2d 627 (1976); Klitzman, Klitzman and Gallagher v. Krut, 744 F.2d 955 (3d Cir. 1984); In re Application of the United States for an Order, 723 F.2d 1022 (1st Cir. 1983); National City Trading Corp. v. United States, 635 F.2d 1020 (2d Cir. 1980). Moreover, language from the United States Supreme Court suggests that a search of a non-suspect attorney's office may be constitutionally permissible. In Zurcher v. Stanford Daily, supra, the Court, per Mr. Justice White, upheld the validity of a search pursuant to a warrant, of the offices of a newspaper. The warrant authorized the seizure of negatives, film, and photographs of an assault by demonstrators on nine police officers several days earlier. The Court initially framed the issue as the construction and application of the Fourth Amendment to the `third party' search, the recurring situation where state authorities have probable cause to believe that fruits, instrumentalities or other evidence of crime is located on identified property but do not have probable cause to believe that the owner or possessor of the property is himself implicated in the crime that has occurred or is occurring. 436 U.S. at 553, 98 S.Ct. at 1975, 56 L.Ed.2d at 534. As the Court concluded, the critical element in a reasonable search is not that the owner of the property is suspected of crime but that there is reasonable cause to believe that the specific items to be searched for and seized are located on the property to which entry is sought. Id., 436 U.S. at 556, 98 S.Ct. at 1976-1977, 56 L.Ed.2d at 535. In Zurcher, the Stanford Daily contended that additional factors, derived from the First Amendment, justified a 369 nearly per se rule forbidding the use of a search warrant and permitting only the issuance of a subpoena duces tecum, where the third party involved is a newspaper. Here, the newspaper voiced a concern that the press' ability to gather, analyze and disseminate news would be seriously threatened by searches of newspaper offices for evidence of crime. In response, Mr. Justice White observed that the interests of the press were already safeguarded, by the terms of the Fourth Amendment itself. [T]he Framers took the enormously important step of subjecting searches to the test of reasonableness and to the general rule requiring search warrants issued by neutral magistrates. They nevertheless did not forbid warrants where the press was involved, did not require special showings that subpoenas would be impracticable, and did not insist that the owner of the place to be searched, if connected with the press, must be shown to be implicated in the offense being investigated. Furthermore, the prior cases do no more than insist that the courts apply the warrant requirements with particular exactitude when First Amendment interests will be endangered by the search . . . Properly administered, the preconditions for a warrant probable cause, specificity with respect to the place to be searched and the things to be seized, and overall reasonableness should afford sufficient protection against the harms that are assertedly threatened by warrants for searching newspaper offices. Id., 436 U.S. at 565, 98 S.Ct. at 1981-1982, 56 L.Ed.2d at 541. Both aspects of the Zurcher holding provide analogies to the search of a non-suspect attorney's office. Since documents of purely evidentiary value in this context, those not encompassed within the attorney-client privilege or the work-product doctrine can be seized, the fact that the attorney himself is not suspected of crime is not dispositive. Rather, it is enough that probable cause exists to believe that the attorney's office houses materials that can be helpful in a criminal investigation, as long as the warrant 370 is sufficiently specific and the search avoids undue abusiveness. Furthermore, the attorney-client privilege is no more expressly mandated by the United States or Pennsylvania Constitutions than is the press privilege relied upon in Zurcher. On the contrary, given the "preferred place" assigned to First Amendment freedoms, Wm. Goldman Theatres v. Dana, 405 Pa. 83, 173 A.2d 59 (1961), privileges asserted thereunder are accorded greater consideration than those statutorily prescribed. See Search of the Lawyer's Office Court Sanctioned Threat to Confidential Communications, 32 Ala.L.Rev. 92 (Fall 1980). The attorney-client relationship, although entitled to considerable deference, is neither sacrosanct nor inviolate. Thus, in light of Zurcher, we conclude that the use of a search warrant in the instant context is not per se unreasonable. III. THE USE OF A SUBPOENA DUCES TECUM The trial court concluded, however, that the issuance of a search warrant for an attorney's office was inappropriate, regardless of the degree of care used in its execution. Instead, the trial court referred to "less intrusive" means by which the same information could be acquired, specifically a subpoena duces tecum pursuant to 42 Pa.Cons.Stat. § 5905, or as issued by an investigating grand jury. 42 Pa.Cons.Stat. § 4541 et seq. Section 5905, however, is directed to the authority of the judiciary, and, in any event, is not applicable to the early stages of an investigation, the time, as Mr. Justice White observed, that search warrants are most often employed. Zurcher, supra, 436 U.S. at 561, 98 S.Ct. at 1978, 56 L.Ed.2d at 538. In relevant part, Section 5905 provides, Every court of record shall have power in any civil or criminal matter to issue subpoenas to testify, with or without a clause of duces tecum, into any county of this Commonwealth to witnesses to appear before the court. . . 42 Pa.Cons.Stat. § 5905. As is evident from the statutory language, the court lacks authority to compel the production 371 of documents absent a pending proceeding. "The essence of a subpoena's function is to aid the court in the resolution of litigation, so that if there is no formal proceeding before the court there can be no legitimate reason to issue a subpoena." Commonwealth v. Polak, 438 Pa. 67, 69, 263 A.2d 354, 356 (1970). See also Commonwealth v. DeJohn, 486 Pa. 32, 403 A.2d 1283 (1979), cert. denied, 444 U.S. 1032, 100 S.Ct. 704, 62 L.Ed.2d 668 (1980) (Subpoena concededly unlawful where, at time of issuance, there were no ongoing legal proceedings against appellant.) Characterizing the impanelment of an investigating grand jury with its subpoena powers as a less intrusive means by which to proceed, the trial judge quashed the search warrant. Similarly, appellee and amici curiae, the Pennsylvania Trial Lawyers' Association and the Allegheny County Bar Association, contend that requiring law enforcement personnel to proceed by subpoena duces tecum when seeking documents in a non-suspect attorney's possession will not unreasonably burden law enforcement efforts. Although the Commonwealth's information-gathering capabilities would thereby be somewhat restricted in the early stages of an investigation, appellee and amici view this measure as essential to preservation of attorney-client confidentiality. While several states have adopted such a proposal,[8] we do not view this as the appropriate rule for Pennsylvania. Initially, we note that the Zurcher Court, faced with the search of a newspaper office, explicitly rejected a claim that such a standard was constitutionally mandated: The Fourth Amendment has itself struck the balance between privacy and public need, and there is no occasion or justification for a court to revise the Amendment and strike a new balance by denying the search warrant in the circumstances present here and by insisting that the investigation proceed by subpoena duces tecum, whether 372 on the theory that the latter is a less intrusive alternative or otherwise. Zurcher v. Stanford Daily, 436 U.S. at 559-560, 98 S.Ct. at 1978, 56 L.Ed.2d at 537-38. States have, of course, the constitutional power to guard individual rights, including the right to be free from unreasonable searches and seizures, more zealously then the federal government does under the United States Constitution. Pruneyard Shopping Center v. Robins, 447 U.S. 74, 100 S.Ct. 2035, 64 L.Ed.2d 741 (1980); Commonwealth v. Sell, 504 Pa. 46, 470 A.2d 457 (1983). Thus, Pennsylvania courts have often extended more privacy protection under Article I, § 8 than required by the federal constitution. See, e.g., Commonwealth v. Beauford, 327 Pa.Super. 253, 475 A.2d 783 (1984) (Neither a pen register nor a dialed number recorder may be installed without a judicial order based on probable cause); Commonwealth v. DeJohn, supra (Bank customers have legitimate expectation of privacy in bank records pertaining to their affairs.) Yet our research has discovered no case wherein our Supreme Court or this Court foreclosed the use of a search warrant as a means by which to secure from a third party, "things" in which an individual has a recognized privacy interest. After acknowledging that the subpoena issued were invalid, the Supreme Court stated in DeJohn, supra, A bank could always be compelled to turn over customer's records when served with a valid search warrant or some other type of valid legal process . . . Id., 486 Pa. at 48, 403 A.2d at 1291. See also Commonwealth v. Duden, 326 Pa.Super. 73, 473 A.2d 614 (1984); Commonwealth v. Gannon, 308 Pa.Super. 330, 454 A.2d 561 (1982). Moreover, in Commonwealth v. Santner, 308 Pa.Super. 67, 454 A.2d 24 (1982), cert. denied, ___ U.S. ___, 104 S.Ct. 3585, 82 L.Ed.2d 883 (1984), this Court noted the impact of a search of a physician's office upon the privacy interests of patients uninvolved in the criminal scheme under investigation. Id., 308 Pa.Super. at 82, 454 A.2d at 30-31. While Santner is distinguishable from the instant 373 case, in that there the physician himself was the target of the investigation, the privacy interests of the uninvolved "clients" remains the same. Furthermore, although the warrant in Santner was insufficiently particular, no suggestion was made that a constitutionally precise warrant would nonetheless fail, and that alternate investigatory methods would be required. The public has a fundamental interest in implementation of the criminal law. No evidence demonstrating that application of the Fourth Amendment's reasonableness requirement will not adequately safeguard the interests of these other clients has been presented. Thus, we will not reject the search warrant, a heretofore effective and constitutionally acceptable enforcement tool. IV. CONCLUSION The use of a search warrant, then, is not unreasonable in this context. Given the significant interest we perceive in preservation of the confidences of "innocent" fourth parties, however, we conclude that the execution of a carefully tailored warrant, supported by probable cause, should be circumscribed with "particular exactitude." This is especially necessary, since vindication of the rights of these individuals cannot be effected by the limited protection provided by the post-seizure remedy of suppression. Therefore, Pennsylvania courts, and in the first instance, the Courts of Common Pleas, should, when the issue is timely presented, establish procedures to assure that these searches are conducted in a manner that minimizes intrusions on the legitimate privacy interests of attorneys and their clients. Guidance here can be found in the well-reasoned analysis of the Court of Appeals for the Third Circuit in Klitzman, Klitzman and Gallagher v. Krut, 744 F.2d 955 (3d Cir. 1984). See also Bloom, The Law Office Search: An Emerging Problem and Some Suggested Solutions, 69 Geo.L.J. 1, 54-97 (1980); Cal.Penal Code § 1524; Justice 374 Department Guidelines promulgated pursuant to the Privacy Protection Act, 42 U.S.C. § 2000aa-11.[9] Accordingly, the order quashing the search warrant in the instant case is vacated, and the case is remanded to the trial court. Jurisdiction is relinquished. NOTES [1] No written petition requesting injunctive relief was presented to Judge Harper; the controversy was initiated by oral request. This request resulted, ultimately, in a written order, issued ex parte and based solely on the representations of counsel for appellee and Attorney Voss. Moreover, although a hearing on the request for permanent injunctive relief was subsequently scheduled, appellee at that time filed a "Motion to Quash Search Warrant," which the Commonwealth was not given an opportunity to answer. See Commonwealth v. Loesel, 155 Pa.Super. 461, 38 A.2d 523 (1944) (Commonwealth entitled to a reasonable time to file an answer to a motion to quash a search warrant.) However, as the Commonwealth has not objected to the procedural course taken here, we do not pass on its propriety. [2] The trial court found no error in the warrant's description of the specific items to be seized. [3] We note that the federal and state constitutions' particularity requirements have been deemed co-extensive. Commonwealth v. Barba, 314 Pa.Super. 210, 460 A.2d 103 (1983). [4] Nor were any "facts" subsequently presented which would alter this conclusion, given that no evidentiary hearing was held. [5] In Lebovitz the attorney himself was under indictment. This fact was not, however, dispositive to the determination of the sufficiency of the warrant's description, but rather, was relevant to a determination of probable cause. [6] This assumes the existence of no Fifth Amendment self-incrimination problems. [7] This statement was taken from the affidavit in support of the warrant. [8] California and Minnesota have accepted this standard. See Deukmejian v. Superior Court, 103 Cal.App.3d 253, 162 Cal.Rptr. 857 (1980) and O'Connor v. Johnson, 287 N.W.2d 400 (Minn. 1979). [9] The fact that the Pennsylvania General Assembly has not followed the lead of the California legislature does not preclude the judiciary in this Commonwealth from establishing procedures to be used in this situation.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265523/	200 N.J. Super. 269 (1984) 491 A.2d 59 ALLSTATE INSURANCE COMPANY, PLAINTIFF, v. SONDRA ALTMAN & ROBERT ALTMAN, DEFENDANTS. Superior Court of New Jersey, Chancery Division Camden County. Decided December 10, 1984. 271 Guy W. Killen for plaintiff (Green and Lundgren, attorneys). Carl Ahrens Price for defendants. DAVIS, J.S.C. Allstate Insurance Company (Allstate), the plaintiff herein, has filed a motion for summary judgment seeking a declaration from this court that the filing of a demand for arbitration by Sondra and Robert Altman (Altman), defendants herein, is time-barred by the six-year period of limitation. Before this issue can be addressed, it is necessary to review the terms of the insureds' contract to determine whether the definition of an uninsured vehicle is consistent with our legislative and judicial policy. I The Altmans, who resided in New Jersey, were involved in a vehicular accident in Philadelphia, Pa., on January 17, 1972 with a cab owned by Yellow Cab Company of Pennsylvania (Yellow Cab). At the time of the accident, Yellow Cab was self-insured and the Altmans were insured by Allstate. Its policy had the normal uninsured motorists provision. The complaint for personal injuries was timely filed in the Pennsylvania state court; however, the litigation was terminated because Yellow Cab, which subsequently filed a petition in bankruptcy, was declared bankrupt in 1981. 272 On October 13, 1981, the Altmans instituted arbitration proceedings under the uninsured motorists provisions of the policy. Allstate refused to arbitrate. In May 1983, the Altmans filed a demand for arbitration with the American Arbitration Association. This matter was transferred to New Jersey with the consent of both counsel. The declaratory judgment matter was filed on August 29, 1983. That portion of the insured's policy which sets forth the general definition of an uninsured vehicle reads as follows: "uninsured highway vehicle" means: (a) a highway vehicle ... with respect to which there is a bodily injury and property damage liability bond or insurance policy applicable at the time of the accident but the company writing the same denies coverage thereunder or is or becomes insolvent; (emphasis supplied) or (b) "uninsured highway vehicle" shall not include: (ii) a highway vehicle which is owned or operated by a self-insurer within the meaning of any motor vehicle financial responsibility law, motor carrier law or similar law, .... There is no dispute between the parties that Yellow Cab was self-insured under the laws of the Commonwealth of Pennsylvania, and no dispute that it was declared bankrupt before the personal injury action could be resolved. Allstate, however, insists that it should not be liable under its policy because a policy, as such, for Yellow Cab had not been written, and accordingly, there was not a denial of coverage under a policy as these terms are expressed in subparagraph (a) of the policy, supra. Inferentially, Allstate also argues that even if this court were to conclude that a self-insurer's certificate is equivalent to the issuance of a policy of insurance, even though issued in Pennsylvania under a different philosophy, this court should not on these facts declare that coverage exists. The carrier, by argument, simply states that the policy language of paragraph (b) specifically excludes the possibility of self-insurers being considered as uninsured under any law. This position creates an anomaly whereby two insureds could have the same policy of insurance, both could have similar 273 accidents in which both vehicles with which they collided were uninsured, but one recovers under the uninsured motorists provisions of his policy and the other does not, solely because the other uninsured vehicle was originally self-insured. No case has been submitted in which the policy language of paragraph (b) was in issue. Consequently, an examination must be made of legislative and judicial policies regarding restrictive language in insurance policies that may contravene legislative intent. II This court recognizes that there may be a difference in the manner in which the Commonwealth of Pennsylvania treats its self-insureds. The greater interest to be reviewed, however, is that of insureds who have complied with the mandatory insurance laws of this State by purchasing insurance and thereby bargaining for protection from others who turn out not to have any coverage. Under our laws, N.J.S.A. 39:6-52, any person in whose name more than 25 motor vehicles are registered, may qualify as a self-insurer by obtaining a certificate of self-insurance which will be issued if it can be shown that the owner is capable of paying judgments rendered against him. There is no dispute that Yellow Cab would meet this definition. Although such a certificate may not be considered a policy of insurance in Pennsylvania, it is clearly considered as such in this State. Transport of New Jersey v. Watler, 79 N.J. 400 (1979). Watler further held that the uninsured motorist coverage, required of all motor vehicle insurance policies issued pursuant to N.J.S.A. 17:28-1.1, is incorporated within this "policy" of self-insurance. Additionally, our courts have held that a self-insurer should not be relieved of any obligation in regard to uninsured motorists coverage that would be imposed upon an insurer which issues the customary policy of insurance as required under N.J.S.A. 17:28-1.1. Mortimer v. Peterkin, 170 N.J. Super. 598 (App.Div. 1979). Notwithstanding these judicial 274 expressions of legislative intent, Allstate insists that the Altmans are not covered because their policy of insurance specifically excludes accidents with self-insured vehicles. Any attempt by an insurer to dilute or diminish statutory provisions applicable to its contract of insurance is contrary to public policy. Pasterchick v. Ins. Co. of North America, 150 N.J. Super. 90, 91 (App.Div. 1977). New Jersey's legislative policy for the protection of victims of automobile accidents is a particularly strong one; Indemnity Ins. Co., etc. v. Metropolitan Cas. Ins. Co. of N.Y., 33 N.J. 507, 512 (1960), therefore, to maintain this policy, the restrictive language of sub-paragraph (b) of the instant policy must be declared void. III Having interpreted the language of the policy in a manner consistent with legislative policy, there remains the issue of whether the plaintiffs' right of recovery is barred by any period of limitation. The parties do not seriously dispute the applicability of the six-year period of limitation since it is clear that this matter arises out of the arbitration clause of the insurance contract. Selected Risks Ins. Co. v. Dierlof, 138 N.J. Super. 287 (Ch.Div. 1975). What is at issue is the time that the statute of limitation is to commence. Allstate contends that the period of limitation commenced to run as of January 17, 1972, the date of the accident. In support of this proposition, it refers to the time-honored goals of litigation repose as set forth in Fidelity Deposit Co. of Md. v. Abagnale, 97 N.J. Super. 132, 139 (Law Div. 1967), and State v. Standard Oil Co., 5 N.J. 281, 295 (1950). The Altmans contend, however, that the period of limitation did not commence to run until Yellow Cab was declared bankrupt, which was in 1981, and Allstate had rejected their demand for arbitration. In each case involving the application of the statute of limitations, the equitable claims of opposing parties must be identified, evaluated and weighed. Lopez v. Swyer, 62 N.J. 267, 274 (1973) and Tevis v. Tevis, 79 N.J. 422 (1979). *275 This court does not reject the policies espoused in the cases cited by Allstate; they are accepted. The manner in which Allstate seeks to have this court utilize them, however, is premised upon the assumption that the Altmans' claims are stale. The facts of this case clearly show that the Altmans quickly moved under the terms of their policy once Yellow Cab was declared bankrupt. Prior to that time they had timely filed their personal injury action but were stayed from proceeding any further because of Yellow Cab's filing of a petition in bankruptcy. None of the delay, therefore, is attributable to the Altmans. It would appear that the Altmans' claims did not accrue until Allstate rejected their demand for arbitration. By using basic contract principles, it becomes clear that matters thereunder do not accrue until there is a breach. The breach in this case was when Allstate denied the claim for uninsured motorists coverage. For a similar result, see Allstate Co. v. Spinelli, 443 A.2d 1286 (Del.S.Ct. 1982). Accordingly, Altmans' demand for arbitration is not time-barred, and any restraints heretofore imposed are hereby dissolved. Allstate's request for summary relief is denied.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265527/	491 A.2d 560 (1985) STATE of Maine v. Daniel E. PICKERING. Supreme Judicial Court of Maine. Argued March 7, 1985. Decided April 25, 1985. 561 Paul Aranson, Dist. Atty., Laurence Gardner (orally), Asst. Dist. Atty., Portland, for plaintiff. Goranites & Libby, Peter J. Goranites (orally), Portland, for defendant. Before McKUSICK, C.J., and NICHOLS, VIOLETTE, WATHEN, GLASSMAN and SCOLNIK, JJ. WATHEN, Justice. Defendant Daniel E. Pickering appeals from a judgment of the Superior Court (Cumberland County) affirming a judgment entered by the District Court upon a finding that the defendant had violated 29 M.R. S.A. § 1312-B (Supp.1984-1985) (operating under the influence or with an excessive blood alcohol level criminal). On appeal, the defendant asserts that the trial court erred in (1) admitting the breath test results when the officer testified that he did not have a particularized recollection of the steps in administering the test; (2) ruling that there was sufficient evidence to establish that the breath sample analyzed by the chemist was the same breath sample taken from the defendant; and (3) permitting the police officer to testify after there had been a violation of the sequestration order. Defendant also contends that the presiding judge improperly participated in the trial. We find no error, and deny the appeal. At approximately 11:30 p.m. on November 20, 1982 Officer James McCorkle of the Falmouth Police Department observed a motor vehicle being operated in an erratic manner on the Bucknam Road in Falmouth. After pulling the car over, McCorkle asked the driver, who is the defendant in this case, to produce his license and registration. McCorkle then noticed that the defendant's eyes were bloodshot and that his speech was slurred. McCorkle also detected an odor of intoxicating beverage on the defendant's breath. The officer then asked the defendant to perform two field sobriety tests, which the defendant failed. The officer then placed the defendant under arrest and took him to the Cumberland County Jail. After being read the implied consent form, the defendant eventually opted to take a breath test. The test yielded a result of .17%. Prior to trial, the defendant served the State with notice and request that a qualified witness testify, pursuant to 29 M.R. S.A. § 1312(8) (Supp.1984-1985). The defendant also filed a motion to suppress the breath test results pursuant to M.D.C. Crim.R. 41 and M.R.Crim.P. 41(e). On April 28, 1983, the court heard the motion to suppress contemporaneously with the case on the merits. After hearing the testimony of the defendant, Officer McCorkle, and the chemist who had analyzed the breath sample, the judge denied the suppression motion and found the defendant guilty. Defendant then appealed to the Superior Court, which denied the appeal. Defendant now appeals to this Court. I. At trial, in an effort to show that the breath test had been improperly administered, 562 the defendant's attorney repeatedly asked Officer McCorkle how many times the defendant had blown into the bags used in the test. The officer maintained, "I do remember administering the test the test was administered properly. The defendant blew the bag up properly. The only thing I don't recall is whether he blew it once or twice." The officer further stated that the test was administered properly because he did not recall anything improper about it. Defendant's motion to strike this testimony was overruled. Now, on appeal, the defendant argues that the presiding judge erred in admitting the breath test results because the officer had no personal knowledge of administering the test, and, under M.R.Evid. 602, was therefore incompetent to testify to its administration. We disagree. First, there is no statutory basis for the proposition that a police officer must have particularized recollection of each step in the administration of a breath test. See 29 M.R.S.A. § 1312 (Supp.1984-1985). Further, defendant's reliance on M.R.Evid. 602 is misplaced. M.R. Evid. 602 provides only that: "A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that he has personal knowledge of a matter." Absolute certainty is not required. Field & Murray, Maine Evidence, § 602.1 at 129 (1976); J. Wigmore, Evidence in Trials at Common Law § 658(b) (Chadbourn rev.1979). Wigmore further states: In general, then, where there has been actual observation, the quality of the impression received at the time and the quality of persistence of that impression are no grounds of objection; for the simple reason that courts must accept the facts of human nature and should not insist on what they cannot fairly expect. Wigmore at § 658(b). Similarly, it is unrealistic to expect a police officer who administers many breath tests each year to remember the precise details of each test administration. The officer testified that he remembered administering the test; he merely stated that the test was administered properly because he did not recall anything improper about it. That he lacked a more particularized recollection of the test administration did not render him incompetent to testify. Any inability to recall detail properly went to the weight of his testimony, and not to its admissibility. II. On direct examination, Officer McCorkle testified that after he had administered the test and disassembled it, he filled out the required forms, sealed the test, and left it upstairs in the "Demers drop." A chemist employed by Demers Laboratory testified that he received the box in a sealed condition. He further testified that the box contained the officer's name, his department, the date and time of the sample, and the defendant's name. Such identifying marks on the box corresponded to the information that had been written by the officer. Overruling defendant's objection, the court found sufficient evidence to establish a chain of custody. Defendant claims that this ruling was in error because the evidence was insufficient under 29 M.R.S.A. § 1312 to show that the sample taken from the defendant was the same sample analyzed by the chemist. Section 1312 does not provide any requirement for "chain of custody." The applicable rule is M.R.Evid. 901(a): The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims. We find that the trial court heard sufficient evidence to find that the breath sample analyzed by the chemist was that of the defendant. Any lack of further testimony as to the chain of custody properly went to the weight, and not to the admissibility, of the breath test. See, e.g., State v. Lewis, 401 A.2d 645, 647 (Me.1979); State v. Beaudoin, 386 A.2d 731, 733 (Me.1978); 563 State v. Stevens, 137 Vt. 473, 477, 408 A.2d 622, 625 (1979). III. At the beginning of trial, the presiding judge granted the defendant an order of sequestration. After the officer testified and before chemist Buck testified the State indicated that it did not intend to call the officer as a witness again. As such, the defendant stated that he did not object to the officer remaining in the courtroom. In cross-examining the chemist, defense counsel established that repetitive inflation of the breath kit renders the test invalid. The defendant had already testified, when the officer was sequestered, that he blew up the kit twice and that a bag or bags on the breath kit were inflated, deflated and reinflated. After the chemist testified the State recalled the officer, to which the defendant strongly objected. The court stated that it would permit the officer to testify on a question by question basis, and only in rebuttal to the defendant's testimony, which the officer did not hear. The officer then testified as to how he administers the test generally. The defendant now argues that allowing the officer to testify constituted reversible error. In Maine, the sequestration of witnesses is wholly discretionary. See, e.g., State v. Fernald, 248 A.2d 754, 757 (Me.1968); Field & Murray at 166. The main goal of sequestration is to prevent "one witness from hearing the testimony of another so as to be able to conform his own testimony to that given by the other, especially that given in response to cross-examination." State v. Cloutier, 302 A.2d 84, 90 (Me.1973). We have not previously addressed the issue of recalling witnesses after a violation of a sequestration order. In the majority of jurisdictions, however, violation of a sequestration order does not automatically disqualify a witness; instead, whether such a witness can testify is a matter within the judge's discretion. See, e.g.; Rowan v. State, ___ Ind. ___, 431 N.E.2d 805, 817 (1982). Jones v. State, 13 Md.App. 677, 284 A.2d 635, 639 (1971); Commonwealth v. Smith, 464 Pa. 314, 346 A.2d 757, 760 (1975); Brickhouse v. Commonwealth, 208 Va. 533, 159 S.E.2d 611, 614 (1968). See generally 14 A.L.R.3d 16 (1967 & Supp.1984). We find this to be a sound approach. In the instant case, the presiding judge committed no abuse of discretion in allowing the State to recall the officer. Indeed, the judge was particularly sensitive to the possibility of prejudice to the defendant and took effective measures to avoid it: 1) the court permitted the officer to testify only on a question by question basis; 2) the officer testified only as to how he generally administers a blood test (as the court noted, the officer acknowledged that he did not have a particularized recollection of administering the defendant's test); and 3) the officer testified only in rebuttal to the defendant's testimony, which the officer had not heard. In these circumstances, permitting the State to recall the officer was not error. IV. Finally, the defendant contends that the presiding judge improperly participated in the judicial proceeding by "repeatedly assist[ing] the prosecution." In support of his argument, defendant refers to several passages in the trial transcript where the judge rephrased the student prosecutor's question or summarized a witness' testimony and asked whether the court's understanding of that testimony was correct. He further argues that because of this conduct defendant was denied an impartial trial under Article I, section 6 of the Maine Constitution and the Sixth Amendment of the United States Constitution. We have repeatedly stated that although a trial judge may not assume the role of an advocate, he is not confined to the role of a passive moderator. State v. Curit, 462 A.2d 1188, 1189 (Me.1983); State v. Bachelder, 403 A.2d 754, 759 (Me. 564 1979). M.R.Evid. 614(b)[1] expressly authorizes a trial judge to interrogate witnesses. "By using the power wisely, a trial judge can effectively clarify testimony, save time or prevent a miscarriage of justice, as by bringing forward overlooked essential facts." Curit, 462 A.2d at 1190; Bachelder, 403 A.2d at 759; State v. Greenwood, 385 A.2d 803, 804 (Me.1978). The paramount concern has been that the judge not participate in any manner from which the jury may infer that he endorses the cause of one side. Curit, 462 A.2d at 1190. See also State v. Linnell, 408 A.2d 693, 694 (Me.1979); Field & Murray at 165. Because there was no jury in the instant case, this concern is absent. Nonetheless, we have examined the record and find that in each instance of alleged improper participation the judge was attempting only to clarify the facts for himself as the factfinder or for the record. Such participation was clearly not improper. The entry is: Judgment of conviction affirmed. All concurring. NOTES [1] M.R.Evid. 614(b) provides: The court may interrogate witnesses, whether called by itself or by a party.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265535/	63 Md. App. 55 (1985) 491 A.2d 1226 JAMES A. DOLAN, ET UX. v. KENT RESEARCH & MANUFACTURING CO., INC. No. 891, September Term, 1984. Court of Special Appeals of Maryland. May 9, 1985. Rona S. Dadds, Baltimore (Patrick A. O'Doherty, Baltimore, and David M. Williams of Chestertown, on the brief), for appellants. Gerard F. Miles and Richard H. Lerch, Baltimore (Lerch and Huesman, Baltimore, on the brief), for appellee. Argued before WILNER, ALPERT and ROSALYN B. BELL, JJ. ROSALYN B. BELL, Judge. What started as a typical workmen's compensation claim has become more complex, because the employee sustained his injuries while on property owned by a subsidiary of his employer company. Following the resolution of the claim the employee and his wife sued the subsidiary in tort. As a result, we must consider whether the subsidiary shares the immunity of the parent company by virtue of the relationship of the two corporations. The Workmen's Compensation Act provides that an employer who complies with the Act remains immune from a common-law action in tort. Md. Code Ann., Art. 101, § 15 (1957, 1979 Repl.Vol., 1984 Cum.Supp.). In effect, the Act replaces common-law liability. Before we describe the accident which gave rise to this suit, we will discuss briefly the background of the two companies involved. Dixon Valve and Coupling Company (Dixon, appellee/cross-appellant), a Pennsylvania corporation, manufactures and sells industrial parts. Kent Research and Manufacturing, Inc. (KRM)[1], is a wholly-owned subsidiary of Dixon and owns some of the property on which Dixon operates its business. In 1975, KRM purchased a building in Chestertown, Maryland, and leased 25% of it to Dixon in a written contract dated July 1, 1976. Dixon used the space as a storage area and as an office from which to operate its subsidiaries. Early in 1978, Dixon began transferring KRM employees and operations to Dixon as a prelude to closing KRM. James Dolan (appellant/cross-appellee) originally was employed by KRM. In 1978, when Dixon shifted supervisors and salaried employees from the KRM payroll to Dixon's payroll, Dolan became an employee of Dixon. Both before and after the change, Dolan worked in the Chestertown plant and had the same duties. On June 1, 1978, the manager of the warehouse and shipping department of Dixon asked Dolan to retrieve a part from KRM's plating department. While walking through the area, Dolan tripped on a plating hook that had become lodged between the wooden planks of the floor. In attempting to regain his balance, he slipped on a wet spot on the floor allegedly created by a leaking roof and a leaking chemical storage tank. Dolan filed a claim for workmen's compensation benefits against Dixon based on the injuries sustained in his fall. At the hearing before the Workmen's Compensation Commission, Dolan and Dixon stipulated that Dolan "sustained an accidental injury arising out of and in the course of his employment...." On July 17, 1979, the commissioner ordered that the claim be held pending a determination of whether the resulting disability was permanent. In 1981, Dolan and his wife[2] filed a declaration against KRM seeking damages in tort for the injuries he sustained on KRM's property. KRM responded by filing a general issue plea and a motion for summary judgment, claiming it was immune from liability because of its relationship to Dixon. Specifically, KRM alleged that "[it] is an instrumentality of Dixon, and therefore is entitled to the exclusive remedy defense provided to employers under the Workmen's Compensation laws for the injuries alleged...." The case proceeded to trial and, both at the end of KRM's case and after all the evidence, KRM moved for a directed verdict. These motions asserted KRM's statutory immunity,[3] Dolan's contributory negligence, and the insufficiency of the evidence. The court reserved ruling on the motions and allowed the jury to consider the issues. The jury returned a verdict for Dolan, whereupon KRM moved for judgment notwithstanding the verdict (j.n.o.v.) or a new trial.[4] The Circuit Court for Baltimore City granted the j.n.o.v., finding that KRM was entitled to employer immunity, and it denied the motion for new trial.[5] Dolan and his wife appeal the decision; KRM cross-appeals. Appellants and cross-appellees raise two alternate issues on appeal: 1. Whether the trial court erred in focusing on the relationship between KRM and Dixon, rather than that between KRM and Dolan, in deciding the question of KRM's immunity from suit under Md. Code Ann., Art. 101, § 15; or, 2. If the trial court was correct in focusing on the relationship of KRM and Dixon, whether it erred in finding that Dixon controlled KRM sufficiently to entitle KRM to immunity and, therefore, erred in granting KRM's motion for judgment n.o.v. In addition to arguing that KRM is immune from suit, appellee and cross-appellant presents the following issues for review: 1. Whether appellant failed to establish certain elements of his claim and, therefore, entitled appellee to judgment as a matter of law. 2. Whether the court erred in admitting into evidence the workmen's compensation commission order entered in a proceeding to which KRM was not a party. 3. Whether appellant's claim was barred by the doctrines of assumption of risk and contributory negligence. 4. Whether some of the jury instructions were erroneous and prejudicial to KRM. Preliminarily, we note that we will reverse the j.n.o.v. and would have reinstated the jury verdict, because the trial court did not apply the correct test in granting the j.n.o.v. Based on the cross-appeal, however, we will reverse the judgment and remand the case for a new trial on the ground that the admission of the workmen's compensation commission order constituted prejudicial error. In reaching these decisions, we discuss the issues presented by the parties on appeal and cross-appeal to provide guidance to the trial court upon remand. THE APPEAL Dolan (appellant) disputes KRM's (appellee) immunity on two bases. First, employer immunity is not determined by the relationship of two corporations with each other. Second, even if that relationship did govern, appellee was not so controlled by Dixon as to share the same immunity. When a court considers a motion for judgment n.o.v., it "resolves all conflicts in the evidence in favor of the plaintiff and assumes the truth of all evidence and such inferences as may naturally and legitimately be deduced therefrom which tend to support the plaintiff's right to recovery. The evidence ... must, therefore, be considered in the light most favorable to the appellant." (citations omitted). Beck v. Baltimore Transit Company, 190 Md. 506, 509, 58 A.2d 909 (1948); accord, Stoskin v. Prensky, 256 Md. 707, 709, 262 A.2d 48 (1970). The trial court in this case instructed the jury that the issue involved whether Dixon "controlled [KRM] to such an extent that the plaintiff, Mr. Dolan, was in fact an employee of both [Dixon] and [KRM]." The jury returned a verdict in favor of appellant on this issue, which supports an inference that Dixon did not control appellee sufficiently to render it immune from suit and that appellant was not an employee of appellee. In granting the j.n.o.v., however, the court did not "resolve all conflicts" in favor of appellant. Rather, it based its ruling solely on the relationship of the two companies with each other. No mention was made of the employer-employee aspect of the issue. On this ground, we must reverse the j.n.o.v. For reasons that will appear later, we will remand the case on a different ground. As a result of this conclusion, we need not address appellee's assertion that appellant failed to establish the elements of his claim. To provide guidance for the trial court, however, we will explain our decision that the court erred in focusing on the relationship of the two corporations and that it erred in finding that KRM was an instrumentality of Dixon. Relationship Between KRM and Dixon The issue submitted to the jury improperly focused on the relationship between appellee and Dixon, i.e., whether appellee was an instrumentality of Dixon. The determination of whether a tort action is precluded by Md. Code Ann., Art. 101, § 15, supra, however, depends upon whether appellee was an employer of appellant. Mackall v. Zayre Corporation, 293 Md. 221, 443 A.2d 98 (1982). Appellee contends that the Court of Appeals in Saf-T-Cab Service, Inc. v. Terry, 167 Md. 46, 172 A. 608 (1934), did not consider the employer-employee relationship, but determined that one company so controlled another as to render them both employers of the claimant. Although the Court in Saf-T-Cab Service, Inc., supra, did consider the relationship of the two companies, it did so as a means of determining whether they were employers of the claimant. The Court pointed out that, based on the perceived "relationship," "both corporations may be regarded as claimant's employers ... and both may be responsible for compensation to him under the Workmen's Compensation Act." 167 Md. at 49, 172 A. 608. This analysis is consistent with the Court's subsequent recognition that "a person ... may be the employee of two employers." Mackall, 293 Md. at 229, 443 A.2d 98; Keitz v. National Paving and Contracting Company, 214 Md. 479, 491, 136 A.2d 229 (1957); see Baur v. Calic, 166 Md. 387, 398-401, 171 A. 713 (1934). The Court in Mackall, supra, explained the requisite evaluation: "In determining whether the employer-employee relationship exists, this Court has established at least five criteria. These include (1) the power to select and hire the employee, (2) the payment of wages, (3) the power to discharge, (4) the power to control the employee's conduct, and (5) whether the work is part of the regular business of the employer. The decisive test in determining whether the relation of employer and employee exists is whether the employer has the right to control and direct the employee in the performance of the work and in the manner in which the work is to be done. If there is evidence to support an inference that more than one individual or company controls or directs a person in the performance of a given function, the question whether an employer-employee relationship exists is a question of fact to be determined by the jury." 293 Md. at 230, 443 A.2d 98, citing Greer Lines Co. v. Roberts, 216 Md. 69, 79-81, 139 A.2d 235 (1958); Keitz, 214 Md. at 491, 136 A.2d 229; Sacker v. Waddell, 98 Md. 43, 53, 56 A. 399 (1903). In the present case, the jury did not conduct the assessment explicated in Mackall, supra. The only issue submitted to them concerning immunity was that involving the instrumentality rule. Although the jurors found that appellee was not immune from the tort action, their decision was based on consideration of the two companies' relationship with each other whether Dixon so controlled appellee as to render it a "mere instrumentality." Employer immunity, however, depends upon the existence of an employer-employee relationship, i.e., that a company so controls the claimant as to be his employer. Mackall, supra. Sufficiency Of Dixon Control Over KRM Not only did the court focus on the wrong relationship, but it erred in finding that Dixon controlled appellee sufficiently to entitle it to immunity under the Workmen's Compensation Act. Appellee contends that it remains immune from suit because it is "an instrumentality of Dixon," and relies on this Court's discussion in Dixon v. Process Corporation, 38 Md. App. 644, 382 A.2d 893, cert. denied, 282 Md. 731 (1978). In that case, we noted several factors for "determining whether [a] subsidiary constitutes a mere instrumentality of the parent corporation[:]" "(1) the presence in both corporations of the same officers or directors; (2) common shareholders; (3) financial support of the subsidiary's operations by the parent; (4) underwriting the incorporation and purchase of all of the capital stock of the subsidiary by the parent corporation; (5) the fact that the subsidiary was organized with a grossly inadequate capital structure; (6) a joint accounting and payroll system; (7) the subsidiary lacks substantial business contacts with any save the parent and operates solely with assets conveyed by the parent corporation; (8) in the financial statements of the parent, the subsidiary is referred to as a division of the parent corporation or obligations are assumed to be those of the parent; (9) the property of the subsidiary is used by the parent corporation as its own; (10) the individuals who exercise operating control over the subsidiary exercise it in the interest of the parent; and (11) failure to observe the formal requirements attributable to the operation of a subsidiary." Id. 38 Md. App. at 653-54, 382 A.2d 893, quoting Annot., 7 A.L.R.3d 1343, 1355 (1966). Appellee asserts that many of these factors exist in the present case and lists several items, including: every director and officer of appellee is also a director or officer of Dixon; all of appellee's stock belongs to Dixon; Dixon maintains appellee's accounting records; Dixon pays all of appellee's supervisors and managers. Despite these overlapping portions of the two companies, we are not convinced as a matter of law that appellee is an instrumentality of Dixon for purposes of immunity. There is ample evidence that they remained separate entities. Although the companies shared the same managerial and supervisory staff due to the transfers from appellee to Dixon, appellee retained its own factory employees at the time of appellant's injury. In addition, appellee and Dixon were incorporated separately Dixon in Pennsylvania, and appellee in Maryland. Perhaps the most significant fact is that appellee, not Dixon, owned the building in Chestertown, Maryland, where appellant was injured. Appellee leased part of the space to Dixon by written contract, which included a rider providing, inter alia: that appellee would pay real estate taxes and assessments on the building as well as insurance; that Dixon would have responsibility for normal maintenance; and that appellee remained responsible for maintaining the roof and the main structure. The lease also contained an indemnification clause. These facts do not appear characteristic of extensive control, but rather indicate that appellee and Dixon are separate entities. Even if we agreed with appellee that Dixon exercised sufficient control to render appellee a mere instrumentality, it would not affect this case. This Court specifically stated in Dixon, supra, "that the corporate entity will be disregarded only when necessary to prevent fraud or to enforce a paramount equity." 38 Md. App. at 654, 382 A.2d 893. (citations omitted). Neither situation exists here. THE CROSS-APPEAL The Workmen's Compensation Order KRM (cross-appellant) argues that the trial court erroneously admitted the workmen's compensation commission order reflecting a stipulation between Dolan (cross-appellee), Dixon and Dixon's workmen's compensation carrier. KRM was not a party to that proceeding and, therefore, remains unaffected by it. The only way the order could bind KRM would be if KRM and Dixon are the same entity; this would render KRM immune from the tort action. Cross-appellee apparently offered the order to show that the stipulation of Dixon as his employer implicitly excluded KRM as an employer. This notion is evidenced by counsel's response to the trial court's inquiry concerning the reason for introducing the order that "Kent Manufacturing ... [claims] that it was the employer or a joint employer of [Dolan] ... this .. . document [was] submitted in an agency proceeding where the company controlled by the two principals who are here before you, have stipulated and agreed that [Dolan] was an employee of Dixon. They say nothing in there about [KRM]. Furthermore, it shows a concession by the corporate officers of Dixon and by the insurer ... that they conceded that [Dolan] was an employee of Dixon...." * * * * * * "I want to get in the fact that Dixon Manufacturing stipulated in that proceeding that [Dolan] was their employee...." This explanation overlooks the fact that an employee may have two employers. Mackall, supra; Keitz, supra; Baur, supra. For reasons which we will explain, we conclude that the court erred in admitting the order into evidence. First, the order had no res judicata or collateral estoppel effect in this case. As in Mackall, supra, the causes of action involved are different the order was issued in an administrative action for workmen's compensation, and this case involves a common-law tort action. In addition, cross-appellant was not a party to the administrative proceedings. Because neither the same cause of action nor the same parties are involved, res judicata does not apply. Mackall, 293 Md. at 228, 443 A.2d 98. Similarly, collateral estoppel applies to facts or issues actually litigated in the administrative action. The only related issue presented to the Commission concerned Dixon's employer status; cross-appellant's status was not litigated. The case before this Court involves whether cross-appellant is an employer of cross-appellee. The order is not relevant to this issue; hence, it was inadmissible. Kennedy v. Crouch, 191 Md. 580, 585, 62 A.2d 582 (1948). Second, cross-appellee's contention conflicts with his position that cross-appellant and Dixon are separate entities. In fact, by asserting that the owners' stipulation concerning Dixon may bind cross-appellant, cross-appellee effectively agrees with the instrumentality argument. He cannot allege the existence of separate entities for immunity purposes and ignore the distinction when introducing evidence. Because the erroneous admission of the order may have affected the outcome of the case, it constitutes prejudicial error. We, therefore, will not reinstate the jury verdict, but will remand the case for a new trial. Contributory Negligence/Assumption of Risk Dolan (cross-appellee) testified at trial that he had observed the dangerous conditions in the department and was aware of the potential hazard created by the slippery floor and by the hooks that sometimes lodged between the floorboards. He further explained that he reported the condition to the owner of the plant and was told "don't talk to me about safety." Based on this evidence, KRM (cross-appellant) argues that cross-appellee assumed the risk of his injury by using the walkway he knew was potentially dangerous. It also claims that cross-appellee failed to exercise reasonable care in crossing the platform, constituting contributory negligence. Whether cross-appellee was contributorily negligent or assumed the risk is a question for the jury to decide. Maryland Sales & Service Corporation v. Howell, 19 Md. App. 352, 359, 311 A.2d 432 (1973), cert. denied, 271 Md. 739 (1974). Only if the undisputed facts permit but one reasonable conclusion may the court decide the issue. Hooper v. Mougin, 263 Md. 630, 634, 284 A.2d 236 (1971). In the present case, the evidence indicates cross-appellee knew that plating hooks and wet spots sometimes existed in and around the platform. He reported the conditions, and some repairs were made. It remains unclear whether the situation was corrected entirely and whether he had any further opportunity to inspect the area before his injury. We cannot say that these facts permit only one reasonable conclusion. The question of whether cross-appellee voluntarily chose to enter this dangerous area, and whether there was a reasonable alternative, was properly before the jury, Rountree v. Lerner Development Company, 52 Md. App. 281, 284, 447 A.2d 902 (1982), and they found in favor of cross-appellee. Jury Instructions KRM (cross-appellant) challenges three jury instructions claiming that they constitute prejudicial error. We will address each contention separately. -Instrumentality Rule- Cross-appellant requested a jury instruction that would state in pertinent part: "The issue for you to decide is whether [KRM] was in fact controlled by [Dixon] or whether [KRM] had no corporate purpose other than furthering the business of [Dixon] ... If you find that [KRM] is controlled by Dixon or has no business purposes other than those of Dixon, your verdict must be in favor of [KRM] and against [Dolan]." On appeal, cross-appellant complains that the court misstated the instrumentality rule when it instructed the jury to decide whether "Dixon Valve and Coupling controlled [KRM] to such an extent that Mr. Dolan [cross-appellee] was in fact an employee of both Dixon Valve and Kent Research." The court gave an instruction covering the issue requested by cross-appellant, but stated it correctly. This did not constitute error. Md.Rule 554 b 1[6]. -Business Invitee- Prior to instructing the jury as to the elements required to prove that cross-appellant was liable for cross-appellee's injuries, the court explained: "Mr. Dolan is classified as a business invitee on those premises ... An invitee is a person on the property of another for the interests of the owner or occupier of the property. An owner must use ordinary care to see that those portions of the property which the invitee ... reasonably may be expected to use are safe and, if it [sic] is not safe, to give that invitee reasonable notice of the unsafe condition. The landlord who sets aside a portion of the property or reserves facilities for the common use of the tenant owes the tenant by tenant, I mean, the tenant and the people who are invited or worked there on his behalf. In this case, the tenant was Dixon Valve and Coupling Company, and by that we're including Mr. Dolan. The landlord who sets aside a portion of the property or reserves facilities for the common use of his tenant in that case it is [Dixon], and Mr. Dolan was an employee and he is entitled to that owes the tenant a duty to exercise ordinary care in keeping those portions or facilities in a safe condition or, if not safe, to notify the tenant of the defect or unsafe condition. This duty extends ... to the invitee or others on the property or using the facility within the right given to the tenant. In this case, the tenant was [Dixon] and, as such, Mr. Dolan is entitled to the same rights as the tenant is. He was using them with the permission and consent, invitation of the tenant. So he's entitled to the same rights as the tenant." At the conclusion of the instructions, counsel for cross-appellant objected to this instruction, stating: COUNSEL: "We would except to the instruction that [cross-appellee Dolan] was in fact an invitee, as a matter of law. THE COURT: "Didn't you agree to that? COUNSEL: "No, Your Honor. I said the instruction should be given about what an invitee was, about what an invitee is." Cross-appellant now contends that this designation of cross-appellee as a business invitee was erroneous insofar as it was for the jury to determine his status and the accompanying duty owed to him. We disagree; based on the evidence Dolan's status was that of a business invitee, as a matter of law. -Reimbursement of Insurer- Cross-appellant alleges that the court should not have instructed the jury that their award would reimburse the insurance carrier for any sums it paid to cross-appellee under the workmen's compensation order. The insurance carrier was not a party to this suit, and no evidence was presented regarding the amount of workmen's compensation benefits received by cross-appellee. As a result, the instruction "may have contributed to a larger verdict than proper since the jury would have speculated about the amount of the award and may have wanted to give Dolan [cross-appellee] additional compensation in addition to the award." Neither party refers us to any case that clearly precludes a court from instructing the jury that the insurer will be reimbursed from the amount they award. Each relies on Kilgore v. Collins, 233 Md. 147, 195 A.2d 703 (1963): cross-appellant interprets the case as precluding the instruction; cross-appellee claims it allows the instruction. In Kilgore, supra, the Court of Appeals preliminarily noted that the party asserting error "has not shown that either the challenged evidence or the instructions complained of in fact caused prejudice, nor has he pointed out facts from which an inference ... can be drawn" that they did. Id. at 153, 195 A.2d 703. The jury had been told, not only that its award would reimburse the insurer, but also the amount of the payments received as workmen's compensation and medical expenses of the claimant. The Court explained the propriety of the instruction: "[I]f the jury was not to be misled into thinking that its verdict would be in addition to what had already been received by the workman, it was necessary that it be told that the insurer would be reimbursed from the verdict, if large enough." Id. at 158, 195 A.2d 703 (footnote omitted). Ultimately, the Court held that, although the jury may not have needed to consider the matter, it was not prejudicial to the case. Id. at 159, 195 A.2d 703. In the present case, cross-appellant merely states the instruction "may have contributed to a larger verdict than proper...." It remains unclear whether any additional information was presented to the jury. We agree with the reasoning of Kilgore, supra, and hold that there was no prejudice in granting the instruction. CONCLUSION The jury and the trial court considered the case based on the relationship of the two corporations, rather than deciding whether appellant and cross-appellee was an employee of appellee and cross-appellant. Furthermore, the trial court did not apply the proper test for granting the j.n.o.v., and it erred in admitting the workmen's compensation commission order into evidence. We, therefore, reverse the j.n.o.v. and remand the case for a new trial. JUDGMENT REVERSED. CASE REMANDED FOR NEW TRIAL. COSTS TO BE BORNE EQUALLY BY APPELLANTS/CROSS-APPELLEES AND APPELLEE/CROSS-APPELLANT. NOTES [1] In its brief, KRM noted that this is the correct name of the corporation, not "Kent Research & Manufacturing Company, Inc." [2] Dolan's wife joined the action seeking damages for loss of consortium. Under the Workmen's Compensation Act, she cannot maintain this action against a complying employer. Hence, her recovery depends on whether KRM is protected by the Act. W.C. & A.N. Miller Dev. Co. v. Honaker, 40 Md. App. 185, 388 A.2d 562 (1978), aff'd., 285 Md. 216, 401 A.2d 1013 (1979). In our discussion, we will refer only to Mr. Dolan appellant and cross-appellee. [3] Md. Code Ann., Art. 101, § 15, supra; Flood v. Merchants Mut. Ins. Co., 230 Md. 373, 187 A.2d 320 (1963). [4] The procedural requirements for these motions appeared in Md. Rule 563 (Judgment N.O.V.) and Md.Rule 567 (New Trial) until July 1, 1984, when they became Md.Rules 2-532 (J.N.O.V.) and 2-533 (New Trial). The new rules remain substantively unchanged, except that the time for filing a motion for new trial derives from F.R.Civ.P. 59(b) rather than former Md.Rule 567; the time for filing has changed from three to ten days. [5] The court did this in accordance with Md.Rule 563 b 3 (now 2-532(e)), which states: "If the motion for judgment is granted, the court shall also rule upon any motion for new trial, but the new trial if granted shall be had only if the judgment so entered is reversed on appeal." [6] This provision appears in Md.Rule 2-520(c), effective July 1, 1984.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265544/	163 Cal.App.4th 741 (2008) RONNIE CINQUEGRANI et al., Plaintiffs and Respondents, v. DEPARTMENT OF MOTOR VEHICLES et al., Defendants and Appellants. No. B199859. Court of Appeals of California, Second District, Division Two. June 3, 2008. 744 Edmund G. Brown, Jr., Attorney General, Jacob A. Appelsmith, Assistant Attorney General, Elizabeth Hong and Jennie M. Kelly, Deputy Attorneys General, for Defendants and Appellants. Schonbrun, Desimone, Seplow, Harris & Hoffman, Michael Morrison, Paul L. Hoffman; Joshua C. Needle; and Thomas E. Beck for Plaintiffs and Respondents. OPINION BOREN, P. J. May the state suspend the driver's licenses of individuals convicted of "boating under the influence"? After independently reviewing the pertinent Vehicle Code and Harbors and Navigation Code provisions, we conclude that state law does not authorize the Department of Motor Vehicles to automatically suspend the driver's licenses of individuals convicted of boating while intoxicated.[1] The trial court correctly enjoined the state from proceeding with the unauthorized license suspensions. FACTS Plaintiff Ronnie Cinquegrani has numerous driving-related convictions. In 1996, he was convicted of driving under the influence (DUI): his driver's license was suspended for one month, and his ability to drive was restricted for an additional five months. In 1997, Cinquegrani was again arrested for DUI, and convicted of reckless driving: his license was suspended from November 1997 until September 1999. Cinquegrani's license was suspended from September to December 2002, and from December 2003 until October 2004, both times for failure to appear. In 2005, Cinquegrani was arrested on the Colorado River for "boating under the influence" (BUI). He was charged with two misdemeanor violations 745 of the BUI statute. Cinquegrani entered a guilty plea to one of the charges; the other charge was dismissed. He was placed on summary probation. Shortly after pleading guilty to BUI, Cinquegrani received a notice from the Department of Motor Vehicles (DMV), informing him that his California driver's license was suspended due to his BUI conviction. Cinquegrani hired counsel to contest the suspension. Counsel convinced a DMV employee that the suspension was invalid, and Cinquegrani's license was reinstated within three months. Like Cinquegrani, plaintiff Bryan Royea has a record of driving-related offenses. In 2004, he was convicted of DUI, and his driver's license was suspended until March 2005. His license was suspended on two other occasions for failure to provide evidence of financial responsibility after a traffic collision. In 2006, Royea pleaded no contest to violating the BUI statute. Soon afterward, the DMV notified Royea that his driver's license was suspended for two years. A class action was brought against the DMV "to vindicate the rights of California motorists who have had their licenses to operate a motor vehicle illegally suspended and/or revoked" due to BUI convictions. Plaintiffs Cinquegrani and Royea are the class representatives. They seek injunctive and declaratory relief, and damages for violations of their federal and state rights. Plaintiffs requested a preliminary injunction, asking the court to bar the DMV from suspending the driver's licenses of individuals with BUI convictions. The court granted plaintiffs' request for an injunction. The court found that (1) plaintiffs are likely to prevail on the merits because the DMV lacks statutory authority to suspend a driver's license solely to punish a BUI conviction; (2) plaintiffs will suffer irreparable harm without an injunction because "no complete substitute for the privilege of driving a personal vehicle currently exists"; (3) the balance of harm favors plaintiffs because the DMV presented no evidence that the injunction will increase the harm caused by either drunken boaters or drunken drivers; and (4) plaintiffs have no adequate remedy at law. The DMV was enjoined from suspending driver's licenses following a BUI, and ordered to set aside current suspensions resulting from BUI convictions. DISCUSSION 1. Appeal and Review Appeal lies from the order granting plaintiffs' request for a preliminary injunction. (Code Civ. Proc., § 904.1, subd. (a)(6); Los Angeles Police 746 Protective League v. City of Los Angeles (1995) 35 Cal.App.4th 1535, 1539 [42 Cal.Rptr.2d 23]; Thornton v. Carlson (1992) 4 Cal.App.4th 1249, 1255, fn. 5 [6 Cal.Rptr.2d 375].) To the extent that the grant or denial of a preliminary injunction requires statutory construction, the matter presents a question of law. (Garamendi v. Executive Life Ins. Co. (1993) 17 Cal.App.4th 504, 512 [21 Cal.Rptr.2d 578].) Our interpretation of the statutes is made independently of the trial court. (Id. at p. 513.) Once the legal question is resolved, the trial court's decision to grant a preliminary injunction is reviewed for an abuse of discretion. If the evidence is in dispute, we interpret the facts in the light most favorable to the prevailing party. (ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1016 [24 Cal.Rptr.3d 720].) If the ultimate facts are undisputed, the propriety of an injunction becomes a question of law. (Cabrini Villas Homeowners Assn. v. Haghverdian (2003) 111 Cal.App.4th 683, 688-689 [4 Cal.Rptr.3d 192].) 2. Statutory Interpretation (1) In construing a statute, the courts ascertain "`the intent of the Legislature so as to effectuate the purpose of the law.'" (People v. Snook (1997) 16 Cal.4th 1210, 1215 [69 Cal.Rptr.2d 615, 947 P.2d 808] (Snook).) The words of the statute are the primary portal through which to glean the intent of the Legislature. "When looking to the words of the statute, a court gives the language its usual, ordinary meaning. [Citations.] If there is no ambiguity in the language, we presume the Legislature meant what it said and the plain meaning of the statute governs." (Ibid.) The statutory language "`has been lobbied for, lobbied against, studied, proposed, drafted, restudied, redrafted, voted on in committee, amended, reamended, analyzed, reanalyzed, voted on by two houses of the Legislature, sent to a conference committee, and, after perhaps more lobbying, debate and analysis, finally signed "into law" by the Governor. The same care and scrutiny does not befall the committee reports, caucus analyses, authors' statements, legislative counsel digests and other documents which make up a statute's "legislative history."'" (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1117-1118 [29 Cal.Rptr.3d 262, 112 P.3d 647].) (2) The BUI statute forbids the operation of a vessel while under the influence of an alcoholic beverage or drug. (Harb. & Nav. Code, § 655, subds. (b)-(d).) The penalties for a BUI conviction include fines, imprisonment, successful completion of an alcohol or drug education, training or treatment program, and mandatory completion of a boating safety course. The penalties are increased if the convicted boater has suffered a DUI conviction within seven years; however, suspension of driving privileges is not listed as 747 a penalty for a BUI. (Harb. & Nav. Code, §§ 668, subds. (e)-(f), 668.1.) The parties do not challenge the validity of the BUI statute or its penalties. (3) It is unlawful to drive a vehicle under the influence of alcohol or drugs. (§ 23152.) Among other penalties, a driver's license may be suspended following a DUI conviction: the DMV "shall immediately suspend or revoke the privilege of a person to operate a motor vehicle upon the receipt of an abstract of the record of a court showing that the person has been convicted" of a violation of sections 23152, 23153, or 23109. (§ 13352, subd. (a).) The parties do not challenge the validity of the DUI statute or its penalties. When the DMV suspended plaintiffs' driver's licenses following their BUI convictions, the agency was relying on a specific provision in the Vehicle Code that creates a "bridge" between the BUI and the DUI statutes. The provision reads, "For the purposes of this division and Chapter 12 (commencing with Section 23100) of Division 11, and Section 13352, a separate offense that resulted in a conviction of a violation of subdivision (b), (c), (d), or (e) of Section 655 of the Harbors and Navigation Code is a separate violation of Section 23152." (§ 23620, subd. (b).) The parties dispute the meaning of section 23620. The DMV contends that the words "separate violation" in section 23620 mean that the BUI need only be unconnected or distinct to enable the DMV to suspend a driver's license following a BUI conviction. In other words, the DMV treats a BUI conviction as if it were a DUI conviction, for purposes of punishment. By contrast, plaintiffs interpret the "separate violation" language to mean that a BUI conviction can be used only to enhance the penalties associated with a DUI conviction. Section 23620 is part of an extensive DUI penalty scheme for recidivist drunk drivers contained in division 11.5 of the Vehicle Code, entitled "Sentencing for Driving While Under the Influence." (§ 23500 et seq.) The Supreme Court had occasion to consider this penalty scheme in the Snook opinion. The court was asked to determine the effect of the words "separate violations" as used in former section 23175, subdivision (a).[2] This language was part of a 1984 amendment changing the words "prior offenses" to the words "separate violations." The amendment subjects individuals to enhanced penalties for multiple offenses, regardless of whether the convictions were obtained in the same sequence as the offenses were committed. The amendments "close the loophole that allowed some repeat offenders to avoid 748 enhanced punishment by `pleading guilty to the second, third and fourth offenses before going to trial on the first offense.'" (People v. Munoz (2002) 102 Cal.App.4th 12, 18 [125 Cal.Rptr.2d 182].) The Supreme Court observed that the Legislature "has employed the term `separate violation' or `separate violations' in all of the statutes increasing the penalties for repeat DUI offenders." (Snook, supra, 16 Cal.4th at p. 1216.) The court defined a "`separate' violation [as] a violation that is `unconnected; not united or associated; distinct.'" (Ibid.) The court recognized a legislative finding and declaration stating that "`the intent of the act enacting this section, in changing the word "prior" to the word "separate ..." [is] to provide that a person be subject to enhanced mandatory minimum penalties for multiple offenses....'" (Id. at p. 1217.) In short, "A `separate violation' as it appears in the penalty enhancement provisions triggered by only one DUI conviction ... clearly describes the relationship between the present offense and the offense triggering an enhanced penalty." (Id. at p. 1216.) (4) Viewed in light of the DUI sentencing scheme as a wholeas described by the Supreme Court in Snookthe words "separate violation" in section 23620 have a particular meaning. They signify that a conviction of a drunken boating offense will result in an enhanced DUI penalty. In this instance, if plaintiffs are convicted of a DUI, their existing BUI convictions will serve to enhance their DUI punishment. (5) Under the DMV's interpretation, the "separate violation" language means a "conviction"; in other words, the DMV has rewritten the statute to read that "a conviction of ... [Harb. & Nav. Code section 655] is a conviction of Section 23152." If the Legislature had intended a conviction of Harb. & Nav. Code section 655 be equivalent to a conviction of Vehicle Code section 23152, it would have said so in precisely those terms. The DMV may only suspend or revoke driving privileges upon a "showing that the person has been convicted of a violation of Vehicle Code Section 23152...." (§ 13352, subd. (a), italics added.) (6) We are required "to give effect and significance to every word and phrase of a statute." (Garcia v. McCutchen (1997) 16 Cal.4th 469, 476 [66 Cal.Rptr.2d 319, 940 P.2d 906].) Section 23620 states that "a separate offense that resulted in a conviction" of Harb. & Nav. Code section 655 is a separate violation of Vehicle Code section 23152. (§ 23620, subd. (b), italics added.) By using the past tense, the Legislature is referring to a BUI conviction that occurred in the past, which is to be used to enhance the penalty for a current DUI prosecution. The manner in which the DMV reads the statute substitutes the present tense for the past tense, so that a current BUI prosecution and conviction effectively "results" in a violation of the DUI statute. Section 23620 does not bear rewriting to achieve the outcome sought by the DMV. 749 (7) Section 23620 states that "for the purposes of division 11.5 (sentencing for driving while under the influence), chapter 12 of division 11 (public offenses against rules of the road), and section 13352 (administrative penalties for DUI convictions), an offense that resulted in a conviction of Harb. & Nav. Code section 655 is a separate violation of Vehicle Code section 23152. (§ 23620, subd. (b), italics added.) Section 23620 is thus aimed at driving offenses, not boating offenses. Boating offenses have their own punishment scheme, in Harb. & Nav. Code section 668, which does not list suspension of driving privileges as a permissible punishment. The reference to Harb. & Nav. Code section 655 in the Vehicle Code is for the purposes of enhancing the penalty for a DUI conviction, not as separate punishment for a BUI. Tellingly, the DMV has drafted proposed legislative amendments to numerous statutesincluding section 23620that would expressly enable the agency to suspend the driver's licenses of individuals convicted of BUI. We have taken judicial notice of proposed legislative amendments prepared by the DMV in 2004, which are part of its administrative records. (Evid. Code, §§ 452, subd. (c), 459, subd. (a); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 842, fn. 3 [107 Cal.Rptr.2d 841, 24 P.3d 493]; Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 374-375, fn. 4 [87 Cal.Rptr.2d 654, 981 P.2d 499].) (8) In its proposed legislation, the DMV expressly acknowledged that "the plain language of CVC Section 23620 does not provide the authority to take any action against the driving privilege of a person who is convicted of a violation of H&N Code Section 655(b), (c), (d), (e), or (f)...." (Italics added.) That, of course, is precisely the opposite position from the one the agency is presently taking in this appeal. The agency requested "a technical fix that would enable the DMV to carry out its mandated duties to suspend the drivers' licenses of individuals convicted under California's DUI statutes whether the violations occur in a vessel or on land."[3] The DMV's proposed legislation is consistent with our interpretation of section 23620, as now written; i.e., the statute does not authorize the suspension of a driver's license as punishment for a BUI. The DMV expresses concern that individuals who pilot a vessel under the influence are also likely to drive a vehicle under the influence, and that the 750 agency should not be hampered in its ability to limit the driving privileges of individuals with BUI convictions, for the safety of the public. Certainly, the criminal records of plaintiffs Cinquegrani and Royea bear out the DMV's concerns about drunken drivers and drunken boaters. However, the answer to this concern is not to misconstrue section 23620 to give DMV powers that the Legislature did not authorize. Rather, the answer is to introduce legislation such as that drafted by the DMV in 2004, which would plainly give the DMV the authority to suspend driver's licenses for individuals convicted of BUI. 3. Grounds for an Injunction (9) The decision to issue a preliminary injunction requires that the court weigh two factors: "the likelihood the moving party will ultimately prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction." (Hunt v. Superior Court (1999) 21 Cal.4th 984, 999 [90 Cal.Rptr.2d 236, 987 P.2d 705].) "The trial court's determination must be guided by a `mix' of the potential-merit and interim-harm factors; the greater the plaintiff's showing on one, the less must be shown on the other to support an injunction." (Butt v. State of California (1992) 4 Cal.4th 668, 678 [15 Cal.Rptr.2d 480, 842 P.2d 1240].) (10) An injunction may be granted in a class action, even if the class has not been certified. (Code Civ. Proc., § 527, subd. (b).) a. Plaintiffs' Likelihood of Prevailing on the Merits (11) Plaintiffs are likely to prevail upon the merits because the DMV does not have authority to suspend driver's licenses after a BUI conviction. A driver's license cannot be suspended without due process of law. (Bell v. Burson (1971) 402 U.S. 535, 539 [29 L.Ed.2d 90, 91 S.Ct. 1586].) The DMV must issue licenses to those who are lawfully entitled to them. (§ 12811, subd. (a)(1)(A).) Once a license issues, an administrative decision to suspend or revoke it affects a fundamental right. (Smith v. Department of Motor Vehicles (1986) 179 Cal.App.3d 368, 373, fn. 2 [224 Cal.Rptr. 543].) (12) Plaintiffsand those similarly situateddo not have constitutional notice that a BUI conviction will automatically result in the suspension of their driver's licenses, because there is no state law that authorizes the DMV to do so.[4] The DMV's misinterpretation of a statute does not provide a legal 751 basis for an otherwise unauthorized punishment. "Administrative action that is not authorized by, or is inconsistent with, acts of the Legislature is void," which is true of actions that alter, amend, enlarge, or impair a statute. (Association for Retarded Citizens v. Department of Developmental Services (1985) 38 Cal.3d 384, 391 [211 Cal.Rptr. 758, 696 P.2d 150].) Drivers whose licenses have been and will be automatically revoked by the DMV following a BUI conviction are deprived of their due process rights by the agency's void actions. b. Harm to the Parties Harm may be presumed when a driver's license is suspended. Once issued, a driver's license "may become essential in the pursuit of a livelihood. Suspension of issued licenses thus involves state action that adjudicates important interests of the licensees." (Bell v. Burson, supra, 402 U.S. at p. 539.) "In our present travel-oriented society, the retention of a driver's license is an important right to every person who has obtained such a license.... [¶] Whether a driver's license is required only for delivering bread, commuting to work, transporting children or the elderly, meeting medical appointments, attending social or political functions, or any combination of these or other purposes, the revocation or suspension of that license, even for a six-month period, can and often does constitute a severe personal and economic hardship." (Berlinghieri v. Department of Motor Vehicles (1983) 33 Cal.3d 392, 398 [188 Cal.Rptr. 891, 657 P.2d 383]; see Perkey v. Department of Motor Vehicles (1986) 42 Cal.3d 185, 199 [228 Cal.Rptr. 169, 721 P.2d 50] ["An individual can no more participate in the economic life of contemporary society without a driver's license than without a bank account or telephone."].) Plaintiff Royea declares that the suspension of his license interferes with his construction business, which requires onsite management at locations in Northern and Southern California. He is unable to carry out personal obligations such as transporting relatives to school or medical appointments, or do grocery shopping for his family. Plaintiff Cinquegrani also owns a construction company, a job that requires him to drive to worksites and to suppliers on a daily basis. He is unable to pick up his children after school every day. By contrast, there is no harm to the DMV. The agency is imposing an unauthorized punishment on the public. We reject the DMV's argument that each affected individual must bring a petition for a writ of mandate after their licenses are suspended. Mandate is not an adequate remedy because it *752 requires every individual with a BUI conviction to fight the DMV in court for imposing a punishment that is unauthorized by state law. Injunctive relief is the appropriate remedy in this case. DISPOSITION The judgment is affirmed. This court's order of July 24, 2007, granting the DMV's petition for writ of supersedeas and staying the preliminary injunction is dissolved. Ashmann-Gerst, J., and Chavez, J., concurred. NOTES [1] In this opinion, undesignated statutory references are to the Vehicle Code. The Harbors and Navigation Code will be referred to as "Harb. & Nav. Code." [2] Former section 23175 stated, "If any person is convicted of a violation of Section 23152 and the offense occurred within seven years of three or more separate violations of [any of three enumerated DUI offenses], ... that person shall be punished by imprisonment... and by a fine...." (Italics added.) Former section 23175 was repealed in 1998, and reenacted as section 23550. [3] The legislative amendments proposed by the DMV contain the type of language that is missing from the current statutes. For example, the proposed amendment to section 23620 states that a person convicted of BUI "shall be subject to the same driving privilege suspension and/or revocation, the same requirements for a restricted driver's license, and the same requirements for driver's license reinstatement as a conviction for Section 23152." Likewise, section 13352 would be amended to provide that the DMV shall immediately suspend or revoke the driving privilege upon conviction of Harb. & Nav. Code section 655. [4] Apart from lacking statutory notice, plaintiffs also lacked actual notice of the DMV's intention to suspend their licenses for a BUI conviction. The 2006 California Driver Handbook advises drivers that convictions pursuant to the Harb. & Nav. Code "are placed on your driving record and will be used by the court to determine `prior convictions' for motor vehicle DUI sentencing." That is to say, the Driver Handbook published by the DMV does not inform Californians that their licenses will be suspended for a BUI; instead, the handbook gives the same reading to the statutes that we havea BUI conviction will be used only to enhance a DUI sentence.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265545/	657 F.Supp. 70 (1987) ACORN STRUCTURES, INC., Plaintiff, v. Robert F. SWANTZ, Defendant. Civ. A. No. 86-0015-C. U.S. District Court, W.D. Virginia, Charlottesville Division. January 16, 1987. 71 Edward B. Lowry, Kevin W. Ryan, Charlottesville, Va., for plaintiff. Robert H. Blodinger, Charlottesville, Va., for defendant. MEMORANDUM OPINION MICHAEL, District Judge. This is a diversity suit, with jurisdiction based on 28 U.S.C. § 1332 (1982), the plaintiff, Acorn Structures, Inc. ["Acorn"], being a Massachusetts corporation and the defendant, Robert F. Swantz, being a citizen of the Commonwealth of Virginia. Acorn is engaged in the business of selling "House Packages" consisting of (1) architectural plans prepared and owned by Acorn, and (2) building materials for the construction of houses in accordance with the architectural plan. Acorn is suing on the common law actions of breach of contract, conversion, and unjust enrichment, for unauthorized use of its architectural plans, which had been sold subject to certain conditions to the defendant. Swantz argues that the conditions in the sale agreement which restrict his use of the plans are pre-empted by federal copyright law, specifically the Copyright Act of 1976, 17 U.S.C. § 301 (1982), and are therefore unenforceable under state law. Statement of Facts Acorn Structures, Inc., is in the business of selling building materials for homes which it designs. In connection with this, Acorn regularly modifies its home designs in accordance with the wishes of its prospective house package customers. On October 28, 1983, Mr. Swantz entered into a written contract, entitled "Design Agreement," with Acorn which provided for the performance of architectural services by Acorn in consideration of payment by Swantz. It is undisputed that while Swantz was not committed to purchase building materials from Acorn, the use of design agreements was a marketing strategy on Acorn's part to induce customers to purchase building materials from Acorn. Under the Design Agreement, Acorn first prepared a set of design drawings for 72 Swantz, who suggested certain revisions. As provided in the Design Agreement, Swantz paid an initial fee of $750 and agreed to pay $30 per hour for the cost of significant design changes after completion of the initial set of plans. The Design Agreement also provided that if Swantz purchased an Acorn housing materials package, all design fees would be credited toward the purchase price of the materials package. On the other hand, if he were to choose not to purchase an Acorn housing materials package, the Design Agreement provided that he would receive a $100 refund upon his return of all design drawings to Acorn. The court notes that Swantz was not obligated to return the drawings and obtain this refund. The contract explained that Acorn supplied materials with a two-year limited warranty, and would not engage in construction of the building. A purchaser could also choose his own builder, although Acorn asserted its readiness to suggest a local builder. A further provision of the Design Agreement, and that which is the central issue of the instant case, provides that: All Acorn drawings are copyrighted and are its property, and may not be used or copied in any way, in whole or in part, without the written consent of Acorn. The design fee is not a license fee and does not authorize you to use or copy any drawings provided by Acorn. Each page of the plans, both originally and as revised, bore a statement which read: "A copyright is claimed on these drawings and no use may be made of them without prior written permission of Acorn Structures, Inc." Swantz notified Acorn that there would be a delay in his purchase of the Acorn building materials house package because of financial considerations. Swantz then apparently delivered the plans to Richard J. Fox, an architect, who allegedly modified the plans and filed them under his own seal with the Building Permits and Inspections Office for Albemarle County, Virginia, which issued a building permit for the construction of a house and garage. The construction of the house and garage is complete. At no time did Acorn consent to Swantz' use of the plans. These then are the facts as alleged in the complaint. In ruling on a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, this court will follow the well established rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of its claim which would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). In addition, the complaint will be construed in the light most favorable to plaintiff and its allegations will be taken as true. 5 C. Wright & Miller, Federal Practice and Procedure, Civil § 1357 (1969 & Supp. 1985). However, it is also clear that state claims should be dismissed when the Supremacy Clause of the Constitution of the United States, art. VI, clause 2, requires pre-emption of such claims. In the context of copyright laws, courts have properly dismissed state law claims found to be pre-empted by federal statute. See, Harper & Row Publishers, Inc. v. Nation Enterprises, 501 F.Supp. 848 (S.D.N.Y.1980), aff'd in relevant part, 723 F.2d 195 (2d Cir.1983), rev'd on other grounds, 471 U.S. 539, 104 S.Ct. 2655, 81 L.Ed.2d 362 (1985). Federal Pre-emption Under the Supremacy Clause of the Constitution of the United States, art. VI, clause 2, state laws may be superseded by federal law in one of several ways: (1) acting within its constitutional power, Congress may pre-empt state law in express terms; (2) Congress may adopt a scheme of federal regulation sufficiently comprehensive to raise the inference that it intended to pre-empt state law in a given area; (3) the courts may find the federal interest in a particular field so dominant that state laws involving the field are assumed to be precluded; or (4) the courts may strike a state law in actual conflict with federal law if compliance with both is an impossibility. See, Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985). 73 The Copyright Act of 1976, 17 U.S.C. § 101-810 (1982) [the "Act"], contains an express statement by Congress that the right to control reproduction of certain material is the exclusive province of federal law. In relevant part, the Act states: (a) On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State. (b) Nothing in this title annuls or limits any rights or remedies under common law or statutes of any state with respect to . . . . . (3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106. 17 U.S.C. § 301. Section 301 refers to both the "general scope" and the "subject matter" of copyright. The exclusive rights within the general scope of copyright as specified by section 106 include the rights "to reproduce the copyrighted work in copies or phonorecords," 17 U.S.C. § 106(1), and "to prepare derivative works based upon the copyrighted work," 17 U.S.C. § 106(2). The subject matter of copyright includes, among other things, "pictorial, graphic, and sculptural works." 17 U.S.C. § 102(a)(5). Such works clearly include architectural plans. Schuchart & Associates, etc. v. Solo Serve Corp., 540 F.Supp. 928, 943 (W.D.Tex. 1982); see generally, 1 M. Nimmer, Nimmer on Copyright, § 2.08[d][2]; see also Annot., 3 A.L.R.Fed. 793 (1970). In determining whether the state law claims asserted in this case are pre-empted by federal copyright law, this court must determine whether the right on which these claims are based is "equivalent to copyright." Legislative history of the Act is somewhat helpful in determining a proper test for when pre-emption should apply. "[T]he preemption of rights under state law is complete with respect to any work coming within the scope of the [Act]s, even though the scope of exclusive rights given the work under the [A]ct is narrower than the scope of common law rights in the work might have been." H.R.Rep. No. 94-1476, 94th Cong., 2d Sess. 131, reprinted in 1976 U.S.Code Cong. & Ad.News 5659, 5747. A perhaps clearer statement of the test for pre-emption has been stated in the leading copyright treatise as follows: [I]n essence a right which is "equivalent to copyright" is one which is infringed by the mere act of reproduction, performance, distribution or display. . . . . . If under state law the act of reproduction, performance, distribution or display, no matter whether the law includes all such acts or only some, will in itself infringe the state created right, then such right is preempted. But if other elements are required, in addition to or instead of, the acts of reproduction, performance, distribution or display, in order to constitute a state created cause of action, then the right does not lie "within the general scope of copyright," and there is not preemption. 1-11 to 1-12 (1978) (emphasis in original). The "subject matter of copyright" test is clearly satisfied in this case. The second prong of the pre-emption analysis contained in section 301 requires the court to determine whether the rights sought to be enforced under state law are "equivalent to" any of the exclusive rights within the general scope of copyright as specified by section 106. 17 U.S.C. § 301(b)(3). Plaintiff argues that each of its common law claims is based upon Mr. Swantz' unauthorized use of the plan as a guide to the construction of the house. For purposes of this suit, plaintiff claims that Swantz' copying of the plan and preparation of a derivative 74 work, namely, the plan filed with the Buildings Permits and Inspections Office, are not elements of Acorn's claim. In plaintiff's Response to Motion to Dismiss, at p. 9, filed June 23, 1986, Acorn argues that defendant Swantz converted the value of Acorn's architectural design services by using the plan. Acorn contends that Swantz unlawfully and wrongfully violated plaintiff's ownership rights in the plans by using them without Acorn's consent, without purchasing them from Acorn, and without purchasing from Acorn the building materials for the construction of the house and garage according to said plans. Complaint, p. 5, filed April 2, 1986. The tort of conversion consists of "any distinct act of dominion wrongfully exerted over the property of another, and in denial of his rights, or inconsistent therewith." Universal C.I.T. Credit Corp. v. Kaplan, 198 Va. 67, 76, 92 S.E.2d 359, 365 (1956). In an action for conversion, plaintiff must show a property right in a converted item and entitlement to immediate possession thereof, along with the defendant's wrongful exercise of authority over the property. See, 18 Am.Jur.2d, Conversion § 2 (1985). It is the opinion of this court that, absent a claim for copyright infringement, a cause of action does not lie for the tort of conversion under the facts of this case. Swantz had an absolute right to possession of the plans, and the only damages which may have flowed from his alleged unauthorized use are the result of his alleged copying of the plan. Therefore, plaintiff's cause of action for conversion must be dismissed. Likewise, plaintiff's cause of action for unjust enrichment fails on its own merits. The parties herein entered into an express agreement, and where an express contract exists, an action for unjust enrichment is improper. In re Virginia Block Co., 16 B.R. 771, 774 (Bankr.W.D.Va.1982). An unjust enrichment claim must establish the value of work performed, the defendant's acceptance of value with the understanding that he is obligated to pay, and the failure of the defendant to pay. See, e.g., Schuchart & Assoc., etc. v. Solo Serve Corp., 540 F.Supp. 928 (W.D.Tex.1982). None of the above elements is present in the case at bar. If defendant has been unjustly enriched, it is only through the unauthorized copying of the plans and preparation of a derivative work, areas of state law clearly pre-empted by the Copyright Act. It is the plaintiff's claim for damages for breach of contract that requires careful analysis. Under the express terms of the contract, defendant Swantz agreed not to use the plans designed for him by Acorn, absent compliance with other terms of the contract. Under plaintiff's reasoning, Swantz agreed not to use the plans, he used the plans, therefore he is in breach of contract. This court agrees that, absent the federal copyright laws, Acorn would have stated a proper cause of action for breach. However, the copying of architectural drawings by building the structure depicted therein has been the subject of much litigation under the copyright laws. In a line of cases beginning in 1964 involving patent and copyright statutes, the Supreme Court has recognized an independent basis for pre-emption, holding that state laws are pre-empted when their scheme of protection "clashes with the objectives of the federal patent [or copyright] laws." Sears Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 231, 84 S.Ct. 784, 789, 11 L.Ed.2d 661 (1964). In a related case, Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964), the Court held that state law could not be used to extend patent protection where such protection would interfere with the system of laws passed by Congress to balance the promotion of invention and authorship while preserving free competition. The primary function of pre-emption analysis is to determine whether under the circumstances of a particular case, the state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Goldstein v. California, 412 U.S. 546, 561, 93 S.Ct. 2303, 2312, 37 L.Ed.2d 163 (1972) (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941)). 75 In Goldstein, the Court reasoned that Sears and Compco did not apply, since Congress had left open the question of whether records, as renderings of original artistic performance, should be protected. Therefore states were free to act in the void. Id. at 570, 93 S.Ct. at 2316. Since architectural works are clearly covered by the Copyright Act, as discussed infra, the language quoted above is applicable to the case at bar even though the outcome in Goldstein is distinguishable. It is well established that federal copyright law protects an author's expression, but does not protect the ideas underlying that expression. Mazer v. Stein, 347 U.S. 201, 74 S.Ct. 460, 98 L.Ed. 630 (1954); Baker v. Selden, 101 U.S. 99 (1879); Schuchart, supra, at 948. Thus, it is for this court to decide whether a breach of contract action of this type conflicts with the intent of Congress to refuse to protect underlying ideas, or whether there is a void in which Congress left room for states to act. Under copyright law, it has been recognized not to be an infringement to build or construct the object or structure depicted in a plan or drawing copyrighted as a technical or scientific work under 17 U.S.C. § 5(i). For example, in De Silva Construction Corp. v. Herrald, 213 F.Supp. 184 (M.D.Fla.1962), it was held that the protection of a copyright in architectural plans is limited to the plans themselves and (with the possible exception of a structure which would qualify as a work of art) does not give the architect the exclusive right to build the buildings or structures embodied in the plans. Likewise, in Muller v. Triborough Bridge Authority, 43 F.Supp. 298 (S.D.N.Y.1942), a copyright in a drawing or picture of a nonartistic object was held not to preclude others from making the three dimensional object portrayed therein. Of course, this court recognizes that a cause of action under the copyright laws may have been stated if Swantz had marketed the house plan and distributed copies of it to others. See, e.g., Scholz Homes Inc. v. Maddox, 379 F.2d 84 (6th Cir.1967). However, that is not the case here. In fact, Swantz' action would appear to fall directly under the rule judicially created in the landmark case of Baker v. Selden, 101 U.S. (11 Otto) 99, 25 L.Ed. 841 (1880), which held that where the art which a copyrighted work teaches cannot be used without employing the methods and diagrams printed therein, copying for such practical application does not violate the copyright laws. In Baker, the copyrighted work described a bookkeeping system using certain formats. The Court held these pages to be necessary incidents of the art of bookkeeping, and that copying of these pages so as to employ the ideas found in the work was not a violation of the copyright. Since the activity complained of by Acorn is similar to activity that has been the repeated subject of copyright litigation, and since it has been the determination of courts that Congress did not intend to extend protection to the use of ideas found in copyrighted works, but does extend protection to the reproduction of the depictions in which such ideas are shown, it is the opinion of this court that such activity falls squarely within the scope of federal copyright law. It can only be presumed that when Congress created copyright protection it did not intend to prohibit the free flow of ideas, but merely to protect the depiction of such ideas. On this analysis, a state law claim which would enforce a breach of contract action for the use of an idea would conflict with the implicit goals of the Copyright Act. It is further the opinion of this court that Acorn's artful pleading is an attempt to circumvent the limitations on the protection provided by federal copyright. Under the analysis of the Baker case, preparing a derivative work and filing such plans with the Building and Permits Office is simply a necessary incident to building the structure depicted in the plans, and does not constitute a copyright infringement. Therefore, even if Acorn had properly brought this action as a copyright claim, it would be barred from recovery. Of course, this court's conclusion also precludes 76 Acorn from recovering any punitive damages as requested in the complaint. Conclusion For the above stated reasons, it is the decision of this court that the motion to dismiss filed by defendant Swantz should be granted. The complaint states no basis for recovery as a matter of law, either due to the pre-emption of state common law causes of action by federal copyright law or because said causes of action fail on their own merits. Nor would federal copyright law itself provide an avenue for relief. An appropriate Order shall this day issue.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2266498/	461 F.Supp. 565 (1978) UNITED STATES of America v. Henry Allen SINE. Crim. No. 78-39. United States District Court, D. South Carolina, Columbia Division. November 30, 1978. 566 Eric Wm. Ruschky, Asst. U. S. Atty., Columbia, S. C., for plaintiff. Parks N. Small, Federal Public Defender, Columbia, S. C., for defendant. ORDER ON MOTION TO SET BAIL PENDING APPEAL HEMPHILL, District Judge. Defendant's motion to set bail pending his appeal from conviction by a jury, on April 18, 1978, on all three counts of an Indictment, previously lodged with the court on February 14, 1978, charging him with three violations of the gun laws. A basis for his prosecution appears to be the fact that in April of 1971 he had been convicted of Interstate Transportation of a Stolen Motor Vehicle and Unlawful Transportation of a Firearm in the United States District Court for the Eastern District of Virginia, Richmond Division; he was charged in Count One of the Indictment in this case with knowingly and illegally receiving a firearm which had been transported from Gastonia, N. C., to Columbia, S. C., and in Count Two with the possession of a 22-caliber semi-automatic pistol which had been shipped from Greensboro, N. C., to Florence, S. C., and in Count Three with knowingly possessing a 38-caliber semi-automatic pistol moved in interstate commerce from Dayton, Ohio, to Fort Walton Beach, Florida. He had entered a plea of Not Guilty, and a Public Defender was appointed to represent him. He was given the plethora of rights that an accused has been granted in this country, and a fair trial. Upon his conviction the court deferred sentence until a presentence report could be prepared. At the sentence hearing, the United States asked to call Agent Billy J. Abercrombie to the stand prior to the sentence, but upon defendant's counsel objection, the court denied the motion to swear Abercrombie. After explaining the appeal rights to the defendant as set forth in Rules 3 and 4 of the Rules of Appellate Procedure, and giving the defendant the right of allocution, which he refused, the court heard the statement of the Public Defender, who stated that he had no contest with the presentence report (which had previously been made available to him), and who made a statement in the defendant's behalf. The Assistant United States Attorney, using 567 his right of allocution, made a recommendation of commitment to federal custody.[1] After the defendant had moved, on November 6, 1978, to set bail, the government filed an objection. On November 9, 1978, this court, taking notice of the opposition to the motion to set bail, directed that the parties file within ten (10) days such material, etc., as they would have the court consider. This has been done, and the court will receive the defendant's late materials as having been filed within the time presented, as the court's calendar denied consideration until this date. Upon original arraignment the defendant was released on $5,000 bond, which was accomplished by a ten (10%) percent cash deposit. At that time he was presumed to be innocent, and given grace of bail despite his previous conviction of a felony. When this court had its sentence hearing on May 25, 1978, the defendant had been found guilty on all counts of the Indictment. The jury did not believe what he said, and this court did not believe what he said, in his trial, although the court made no comment to the jury before, during, or after the trial. This court has reviewed its authority and responsibility under the provisions of 18 U.S.C. § 3148[2]. This court initially recognized that it has no inherent power to admit the bail, except as derived from the Constitution and the statutes. See Corpus Juris Secundum (Bail Sections 4-5, citing United States v. Curran, 297 F. 946 (2nd Cir. 1924)). The court is therefore constrained to review its authority and responsibility in the light of that common law that is incorporated in the statute. Thus it is recognized that this court, not being a common law court, except where bound by a state's common law under the philosophy of Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), does not have an inherent power to grant bail to prisoners but is limited.[3] However, in those cases where the prisoner is a state prisoner, if a United States court decides it is qualified to deal with the subject matter of the complaint, or has jurisdiction over the person or the defendant, it may act. United States v. United Mine Workers of America, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1946)[4]. See also Johnston v. Marsh, 227 F.2d 528 (3rd Cir. 1955) where, in a state prisoner petition case, it was held that the federal district court had the power, in the absence of specific statutory authority, to admit a state convict to bail pending hearing and disposition of his habeas corpus petition. The language of the court on page 529 is revealing: In this case, however, as already indicated, the district court has jurisdiction of the subject matter of the complaint and the prisoner within the court's authority because he invokes its power to give him his claimed constitutional rights. 568 This court recognizes that the Constitution of the United States protects the accused, in this free land, from being imprisoned unjustly, in its pronouncement in Article VIII: Excessive Bail Shall Not Be Required, Or Excessive Fines Imposed, Nor Cruel Or Unusual Punishments Inflicted. Thus, the United States Constitution protects against both the denial of bail and the setting of excessive bail. As it is said in United States ex rel. Siegal v. Follette, 290 F.Supp. 632 (S.D.N.Y.1968), ". . . man's physical freedom is precious and should not be taken away prior to conviction unless confinement is necessary to insure his appearance at trial."[5] The right to bail, no less than, for example, the right to a speedy trial and the right not to suffer an excessive sentence, are the fundamental rights which the states must protect in respect to the extent provided by the Eighth Amendment. Of course the Eighth Amendment gives no absolute right to bail and prior to conviction bail may be denied if there is reason to believe that the defendant will not appear. Such is not the case here, as this is a post-trial application. The court reflects that the constitutional right to bail is lost after conviction, that there is no constitutional right to appeal, but there is a statutory right to appeal; since there is no constitutional right to appeal, there is no constitutional right to be free pending an appeal. Congress, however, has taken care of this in the statute under consideration today and furthermore in the authority given the Supreme Court of the United States in 18 U.S.C. § 3772.[6] Despite the fact that there is no constitutional right to bail after conviction, Congress has provided that such bail may be granted, setting the limitations thereupon. If bail is denied, however, defendant, after conviction, is entitled to an adequate statement of the statutory conditions relied upon and the reason underlying the court's determination that the conditions exist. See United States v. Bynum, 344 F.Supp. 647 (S.D.N.Y.1972), Weaver v. United States, 131 U.S.App.D.C. 388, 405 F.2d 353 (1968).[7] In appropriate circumstances, courts are generally rather lenient in granting bail pending appeal, but it should be observed that a defendant who has been found guilty by a jury and sentenced is not necessarily entitled to bail pending appeal as a matter of law. United States v. Bright, 541 F.2d 471 (5th Cir. 1976), citing 18 U.S.C. § 3148. The question of whether a convicted person should be released on bail pending appeal is said to rest in the sound discretion of the trial court. United States v. Baca, 444 F.2d 1292 (10th Cir. 1971) cert. denied, 404 U.S. 979, 92 S.Ct. 347, 30 L.Ed.2d 294; 569 Bloss v. People of State of Michigan, 421 F.2d 903 (6th Cir. 1970). This court finds discretion to mean concrete and specific reasons which the district judge is required to supply, in support of whatever his decision may be, especially if his decision is to deny bail. United States v. Quicksey, 371 F.Supp. 561 (D.C.W.Va.1974).[8] But before crucifying a defendant on the cross of discretion on his application for bail, the district court must review all of the facts before it in the hope that his opinion is entitled to the great respect ordinarily accorded the district court's judgment in such matters. Carbo v. United States, 302 F.2d 456 (9th Cir. 1962).[9] Defendant did not ask for a bail hearing, as such, before the court, and the court was informed that defendant did not wish to be present for a bail hearing. As already noted, the court refused to hear a government witness in the sentencing process, as the court thought that would be prejudicial. The court has carefully reviewed the matters set forth in the motion of November 6th, and since the same are over the signature of the Public Defender, deserve the recognition of the integrity of this officer of this court. The court has since reviewed certain attachments to the bail motion, filed November 27, 1978, which consists of letters, on the filing of which the Public Defender makes the statement, "This will conclude the showing the defendant desires to make". The letters reviewed are a letter of November 17, 1977 from the defendant to the court; a copy of a letter from lawyer W. Ralph Garris, Esquire, from the firm of Garris & Garris, Attorneys at Columbia, to U. S. Parole Commission, South Central Regional Office at Dallas, Texas, dated August 28, 1978; a letter of August 28, 1978 from Claude B. Dreher, Jr., President of the Dreher Sanitary Draining and Septic Service, Inc., to the Parole Board at Dallas; a letter dated August 29, 1978 from Hagerstown, Md., directed "To Whom It May Concern", (original was sent to U. S. Bureau of Parole, Dallas) apparently in the handwriting of Mrs. Betty N. Holland, mother of the defendant; a letter from Hagerstown, Md., undated, but directed to the Bureau of Paroles in Dallas by Wilbur E. Holland, the stepfather of the defendant; a letter dated August 29, 1978, from Raymond E. Sine, brother of defendant, apparently a salesman from Monumental Life Insurance Company, directed to the U. S. Bureau of Paroles[10]; a letter dated September 14, 1978 directed "To Whom It May Concern" from Bradford H. Williams, President, of Professional Pools, Inc.; a letter dated August 29, 1978 from Harold A. Wolff, Pastor of Christ's Lutheran Church, Columbia, S. C., and directed to the Parole Board. These letters not only give support to his motion for bail but give support, apparently to whatever parole effort he is making. As stated in the motion to set bail, pending trial, defendant was released on a $5,000 bond. He has filed a notice of appeal and certain portions of the trial transcript have not been received as yet. He states the issues he intends to raise on the appeal. The court has also considered the response of the United States Attorney which (1) calls attention to defendant's prior felony conviction, (2) makes the statement that after the statement of the undercover operative, John Lester Butler was made available to the defense the defendant reportedly offered $1,000 if Butler were killed, and (3) setting forth certain other information, which, although not under sworn affidavit, just as the Public Defender is not, is a statement by an officer of this court and it will be considered and entitled to the same integrity, as neither the Public Defender nor the United States Attorney reveal the 570 slightest desire to misrepresent any fact to the court, and neither are suspected of such. Since the defendant did not ask for a hearing before the court, the court did not require affidavits as there was no request for same, no reason to doubt the statement of either counsel. Bail is denied the defendant because this court is convinced, upon review of the entire file, that he will pose a danger to the community, and the court is not convinced that the issues purported to be raised on the appeal are not frivolous. The court's reasoning is based on the following considerations: (1) Defendant has a previous felony conviction; (2) A jury convicted the defendant on all three counts, despite his vehement denial, and he is therefore four times a felon before the district courts of the United States; (3) There is ample room for the inference that the release of this defendant would impair the safety of a government witness and possibly others; (4) Based upon the demeanor evidence and the testimony of defendant at trial, as well as the other testimony at the trial, this court is now convinced that defendant's release would pose a real danger to the community, and a probable continuation of his substantial involvement in illegal gun traffic; (5) There is a sufficiency in the record before the court to give ample inference that he would participate with others for the perpetuation of further felonies; (6) There is evidence at the trial about the entire climate of the operation for which defendant was accused, and which a jury has found him guilty on all three counts convinces this court, that had a bench trial been had, the court would have probably been under the duty to find him guilty; (7) Defendant has been sentenced to a term of four years. In the light of his criminal record, bail is not indicated due to a substantial probability of flight. The court herewith advises defendant and his counsel (who already knows) that if defendant is dissatisfied, application should be made immediately for the relief sought herein by applying to the United States Court of Appeals for the Fourth Circuit or to any judge of that court. The court also advises defendant and his counsel (counsel already knows) that this defendant may appeal this decision and that he has a right to appeal in forma pauperis, if he be indigent, and to have counsel appointed to represent him in such appeal, if he be indigent. He also has the right to make application to the Fourth Circuit or any judge there in forma pauperis, for the relief sought here, and his present counsel is charged with that responsibility in the event defendant and his counsel are advised to go to the Fourth Circuit for the relief sought herein. The Clerk is directed to serve a certified copy of this order upon counsel of record, and to serve the same upon defendant by mail, and to have a copy served upon the defendant personally at the detention center in which he is presently serving sentence. The Motion for Bail is denied. AND IT IS SO ORDERED. NOTES [1] Ordinarily the United States Attorney makes no recommendation, as it seems to be a policy of the Department of Justice (?) to limit the discretion of the United States Attorneys and their staffs in such matters. [2] amended October 15, 1970, the statute now reads: Release in capital cases or after conviction. A person (1) who is charged with an offense punishable by death, or (2) who has been convicted of an offense and is either awaiting sentence or sentence review under section 3576 of this title or has filed an appeal or a petition for a writ of certiorari, shall be treated in accordance with the provisions of section 3146 unless the court or judge has reason to believe that no one or more conditions of release will reasonably assure that the person will not flee or pose a danger to any other person or to the community. If such a risk of flight or danger is believed to exist, or if it appears that an appeal is frivolous or taken for delay, the person may be ordered detained. The provisions of section 3147 shall not apply to persons described in this section: Provided, That other rights to judicial review of conditions of release or orders of detention shall not be affected. [3] See 8 Am.Jur.Prudence 2nd, p. 7887, Bail and Recognizance § 8 (Authority to Grant Bail: Generally). [4] The court was discussing the right of the United States under the Norris-LaGuardia Act for an injunctive relief and the Supreme Court held that the district court had the right to determine whether or not it had jurisdiction either under the Norris-LaGuardia Act or in the alternative ground. [5] Citing Bandy v. United States, 81 S.Ct. 197, 5 L.Ed.2d 218 (1960). [6] 18 U.S.C. § 3772 provides: Procedure after verdict The Supreme Court of the United States shall have the power to prescribe, from time to time, rules of practice and procedure with respect to any or all proceedings after verdict, or finding of guilt by the court if a jury has been waived, or plea of guilty, in criminal cases and proceedings to punish for criminal contempt in the United States district courts, . . .. This section shall not give the Supreme Court power to abridge the right of the accused to apply for withdrawal of a plea of guilty, if such application be made within ten days after entry of such plea, and before sentence is imposed. The right of appeal shall continue in those cases in which appeals are authorized by law, but the rules made as herein authorized may prescribe the times for and manner of taking appeals and applying for writs of certiorari and preparing records and bills of exceptions and the conditions on which supersedeas or bail may be allowed. The Supreme Court may fix the dates when such rules shall take effect and the extent to which they shall apply to proceedings then pending, and after they become effective all laws in conflict therewith shall be of no further force. Nothing in this title, anything therein to the contrary, notwithstanding, shall in any way limit, supersede, or repeal any such rules heretofore prescribed by the Supreme Court. [7] Citing Rules of Appellate Procedure, Rule 9, which directs: ". . . Upon entry of an order refusing or imposing conditions of release, the district court shall state in writing the reasons for the action taken." [8] "It is clear * * there is no right to bail after conviction. * * * That the standards for post-trial release are much stricter than the standards relating to pretrial release. * * * The burden is on the defendant to prove that he is not a danger to the community." [564]. [9] See also Harris v. United States, 404 U.S. 1232, 92 S.Ct. 10, 30 L.Ed.2d 25 (1971). [10] Some of these letters were copies but the court considers them as if the original were in the file.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265556/	341 Pa. Superior Ct. 95 (1985) 491 A.2d 166 COMMONWEALTH of Pennsylvania, Appellant, v. Casper GUIMENTO, a/k/a Cappy Guimento. Supreme Court of Pennsylvania. Submitted January 23, 1985. Filed March 29, 1985. 96 Joseph Giebus, Assistant District Attorney, Wilkes-Barre, for Commonwealth, appellant. Thomas Hanlon, Scranton, for appellee. Before McEWEN, CIRILLO and HESTER, JJ. CIRILLO, Judge: "A statute of limitations instead of being viewed in an unfavorable light as an unjust and discreditable defense, should have received such support from courts of justice as would have made it, what it was intended emphatically to be, a statute of repose." Bell v. Morrison, 26 U.S. (1 Pet.) 349, 360, 7 L.Ed. 174 (1828). The Commonwealth appeals an order of the Court of Common Pleas of Luzerne County dismissing a conspiracy 97 to commit arson charge against appellee Casper Guimento. We affirm. On July 5, 1983, appellee was arrested and charged with conspiracy to commit arson. 18 Pa.C.S. § 903. The criminal information lodged against Guimento showed the offense date as November 22, 1978 to December 1, 1978. At the time of the alleged offense, the statute of limitations for the crime of conspiracy to commit arson was two years. Act of July 9, 1976, P.L. 586, § 2, amended by Act of Oct. 5, 1980, P.L. 693, § 206(a). Therefore, as of December 1, 1980, the two-year statute of limitations had run on this charge. In 1982, however, the limitations period for the crime of conspiracy to commit arson was extended to five years. 42 Pa.C.S. § 5552(b)(3).[1] On the basis of the two-year statute of limitations and the Pennsylvania Supreme Court's ruling in Commonwealth v. Askin, 502 Pa. 575, 467 A.2d 820 (1983), the trial court dismissed the charge against appellee.[2] We are asked to determine whether the legislature can enact a law which extends an existing statute of limitation so as to revive a case in which the statutory period has already run. We hold that an extension of a statute of 98 limitation cannot revive a case in which the statutory period has run. A contrary result would be in violation of the ex post facto clause of Article I, section 17 of the Pennsylvania Constitution. Article I, section 17 of the Pennsylvania Constitution provides: No ex post facto law, nor any law impairing the obligation of contracts, or making irrevocable any grant of special privileges or immunities, shall be passed. In its most basic form, "[a]n ex post facto law is one which renders an act punishable in a manner in which it was not punishable when it was committed." 1 W. Blackstone, Commentaries [] 46. "[I]t is a proscription which attempts `to preserve for persons the right to fair warning that their conduct will give rise to criminal penalties.'" Commonwealth v. Grady, 337 Pa.Super. 174, 177, 486 A.2d 962, 964 (1984) quoting Commonwealth v. Hoetzel, 284 Pa.Super. 623, 630, 426 A.2d 669, 672 (1981). See also Dobbert v. Florida, 432 U.S. 282, 97 S.Ct. 2290, 53 L.Ed.2d 344 (1977). In order for a law to be found constitutionally violative of the ex post facto clause, one of the following effects must be present: (1) The law makes an act criminal which was not criminal when done; (2) The law aggravates a crime, or makes it greater than it was when done; (3) The law changes a punishment, and makes it greater than it was when the punishable act was committed; and (4) The law alters the rules of evidence and requires less or different testimony than the law required at the time the offense was committed, in order to convict. Commonwealth v. Riley, 253 Pa.Super. 260, 264-65, 384 A.2d 1333, 1335 (1978). See also Calder v. Bull, 3 U.S. (3 Dall.) 386, 1 L.Ed. 648 (1798); Commonwealth v. Kalck, 239 Pa. 533, 87 A. 61 (1913); Commonwealth v. Grady, supra; Commonwealth v. Hoetzel, supra; Commonwealth v. Pickett, 244 Pa.Super. 433, 368 A.2d 799 (1976). "The correct focus of an ex post facto analysis is an examination of the effect at the time the critical offense is 99 committed." DiNapoli v. United States Parole Commission, 538 F.Supp. 658, 667 (M.D.Pa. 1982) aff'd 676 F.2d 684 (3rd Cir. 1982). In Weaver v. Graham, 450 U.S. 24, 101 S.Ct. 960, 67 L.Ed.2d 17 (1981), the Supreme Court stated: [T]wo critical elements must be present for a criminal or penal law to be ex post facto: it must be retrospective, that is, it must apply to events occurring before its enactment, and it must disadvantage the offender affected by it . . . The critical question is whether the law changes the legal consequences of acts completed before its effective date. Id. at 29-31, 101 S.Ct. at 964-65, 67 L.Ed.2d at 23-24 (emphasis added; footnotes and citations omitted). Courts that have considered the relationship between statutes of limitations and the ex post facto clauses have adopted an analysis similar to that set forth in Weaver. Finding there is a crucial distinction between cases in which the statutory period has already run and those cases where the statutory period has not yet run, the authorities seem to be in agreement that if the statutory period of the statute has fully run and the bar has once attached so that the defendant could not be prosecuted under the existing statute, the law cannot be changed by future legislation so as to extend the period of limitation as to past offenses, already barred. Such a law would violate the ex post facto clause. Black, Statutes of Limitations and the Ex Post Facto Clauses, 26 Ky.L.J. 41, 42 (1937). See also Moore v. State, 43 N.J.L. 203 (1881); State v. Sneed, 25 Tex.Supp. 66 (1860). Cf. 51 Am.Jur.2d Limitation of Actions § 44 (1970); 67 A.L.R. 297 (1930). Our Supreme Court made such a distinction in Commonwealth v. Duffy, 96 Pa. 506 (1880) when it stated that "in any case where a right of acquittal has not been absolutely acquired by the completion of the period of limitation, that period is subject to enlargement or repeal without being obnoxious to the constitutional prohibition against ex post facto law." Id. at 514. See also Tyson v. Johns-Manville Sales Corp., 399 So.2d 263 (1981); People 100 v. Anderson, 53 Ill.2d 437, 292 N.E.2d 364 (1973); People v. Massarella, 80 Ill.App.3d 552, 36 Ill.Dec. 16, 400 N.E.2d 436 (1980), cert. denied 449 U.S. 1077, 101 S.Ct. 855, 66 L.Ed.2d 799 (1981). These courts, while not expressly addressing the question posed in Weaver, seemed to do so sub silentio. Their primary concern was whether a legislative enactment extending a statute of limitations changed "the legal consequences of acts completed before its effective date." Weaver, supra. In cases where a statute had not yet run, there would be no change in legal consequences a prosecution could still be maintained because the defendant had not obtained an absolute defense of the statute of limitations. However, in cases where a bar to prosecution has already attached, there would be a definite change in legal consequences if an enactment was permitted to revive a case. In cases falling under the latter situation, not only would the law be applied retroactively, but it would also "disadvantage the offender affected by it." Weaver, supra. Essentially, "the extension act . . . restoring the expired law, had precisely the same effect as though the offense had not been punishable originally, but had been made so for the first time by restoring the act." Black, supra at 45. See also Moore v. State, supra; State v. Sneed, supra. Therefore, such a law would be ex post facto. Dobbert v. Florida, supra; Calder v. Bull, supra; Commonwealth v. Kalck, supra; Commonwealth v. Grady, supra. Turning to the instant case, we hold that the two-year statute of limitations, the law in effect at the time the alleged offense was committed, is the applicable statute. Under this statute, the Commonwealth was required to initiate a criminal prosecution on or before December 1, 1980. After that date, appellee acquired an absolute defense to prosecution for the charged crime. Such a defense could not be taken away by legislative enactment. Moore v. State, supra. To hold otherwise would sanction a violation of the Constitution. This we cannot do. Order affirmed. NOTES [1] (b) Major offenses. A prosecution for any of the following offenses must be commenced within five years after it is committed: (1) Under the following provisions of Title 18 (relating to crimes and offenses): ..... Section 3301 (relating to arson and related offenses). ..... (3) Any conspiracy to commit any of the offenses set forth in paragraphs (1) and (2). [2] The trial court misapplied the rule announced in Commonwealth v. Askin. In Askin, the Supreme Court held that the statute of limitations for conspiracy cannot be determined by the statute of limitations for the most serious offense for which a defendant could properly be convicted. The action in Askin was commenced prior to the amendment to section 5552. We, however, may affirm a correct decision of the trial court for any reason, even if the trial court offered an erroneous reason for its decision. Commonwealth v. Reidenbaugh, 282 Pa. 300, 422 A.2d 1126 (1980); Commonwealth v. Hinton, 269 Pa.Super. 43, 409 A.2d 54 (1979).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2266509/	461 F.Supp. 1282 (1978) Henry J. KIRKSEY, Fred L. Banks, Jr., Carsie A. Hall, Henrene Matthews, Herman "Tex" Wilson, Shawn Knox, Malcolm T. Shepherd, Ricky L. Taylor, Annie K. Ward, Irene Shepherd, Rubie J. Tobias, Fannye B. White, Roy Milton Shelby, Monzell Stowers, Perthean Toins, Reverend Horace L. Buckley, and Douglas L. Anderson, Plaintiffs, v. CITY OF JACKSON, MISSISSIPPI, Russell C. Davis, Mayor, Thomas B. Kelly, Commissioner, and Douglas W. Shanks, Commissioner, Individually and in their official capacities as members of the City Council of the City of Jackson, City of Jackson Municipal Democratic Executive Committee, R. E. Wooley, Chairman of the City Democratic Executive Committee, City of Jackson Municipal Election Commission, Edmund Johnston, Jr., Mrs. Bernice Denmark, and Albert P. Dillon, members of the City Election Commission, Defendants. Civ. A. No. J77-0075(N). United States District Court, S. D. Mississippi, Jackson Division. August 28, 1978. 1283 1284 Frank R. Parker, Michael A. Middleton, Thomas J. Ginger, Jackson, Miss., for plaintiffs. Joseph P. Wise, Thomas G. Lilly, John E. Stone, City Atty., Jackson, Miss., for defendants. MEMORANDUM OPINION NIXON, District Judge. This Memorandum Opinion shall constitute this Court's specific findings of fact 1285 and conclusions of law required by Rule 52, F.R.Civ.P. and mandated by the United States Court of Appeals for the Fifth Circuit in its opinion of March 29, 1978, in the four consolidated voting dilution cases of Nevett v. Sides, 571 F.2d 209 (5th Cir. 1978) (hereinafter referred to as Nevett II); Bolden v. City of Mobile, Alabama, 571 F.2d 238 (5th Cir. 1978); Blacks United, Etc. v. City of Shreveport, 571 F.2d 248 (5th Cir. 1978); and Thomasville Branch of N.A.A. C.P. v. Thomas City, Ga., 571 F.2d 257 (5th Cir. 1978). This action was brought by Henry J. Kirksey and other black plaintiffs, all registered voters of Jackson, Mississippi, and representing all black citizens and black registered voters of Jackson as a class, contending that the present at-large system of electing the mayor and two city commissioners for the City of Jackson abridges the rights of the city's black citizens as secured by the Thirteenth, Fourteenth and Fifteenth Amendments to the United States Constitution and 42 U.S.C. §§ 1971, 1973 and 1983.[1] The plaintiffs allege that the existing commission form of government[2] which consists of two commissioners and a mayor who also functions as a commissioner, each of whom is a fulltime employee assigned specific functions, i. e., responsible for supervising the work of several specified city departments, and elected from the city at-large to four-year terms of office without any subdistrict residency requirement, unconstitutionally discriminates against black residents of Jackson by diluting or cancelling out their voting strength. They also complain of a denial of their statutory rights under 42 U.S.C. §§ 1971, 1973 and 1983. Jurisdiction of this action is premised on 28 U.S.C. §§ 1331, 1343, and 2201, and 42 U.S.C. §§ 1971(d) and 1973f. The defendants are the City of Jackson, a municipal corporation, the former city council consisting of Mayor Russell C. Davis and Commissioners Thomas B. Kelly and Douglas W. Shanks, sued individually and in their official capacities;[3] the Jackson Municipal Democratic Executive Committee and its chairman and the Jackson Municipal Election Commission and its members. The Jackson Municipal Republican Committee and its chairman were dismissed as defendants by Order of this Court dated March 28, 1977. The verified complaint was filed herein on March 10, 1977, after the defeat of a citywide referendum held on February 22, 1977 on the issue of changing the form of city government in Jackson to that of a mayor-council under which the council members would have been elected from seven single-member districts or wards. The plaintiffs seek (1) a declaratory judgment that at-large, citywide voting for members of the Jackson City Council under the commission form of government unconstitutionally minimizes and cancels out black voting strength; (2) an injunction enjoining any further municipal primary or general elections for members of the city council on the basis of at-large, citywide voting; (3) an order requiring the defendants to adopt and place into effect a mayor-council form of government authorized by Miss.Code Ann. §§ 21-8-1, -47. (Supp.1976), providing for the election of nine members of the city council from nine single member districts, at least three of which would have black voting majorities; and (4) attorneys' fees, necessary expenses of this litigation, taxable costs and such other relief as may be just and equitable. 1286 The defendants admit that the plaintiffs are black citizens and registered voters of Jackson; that Jackson is majority white in population, voting age population, and registered voters; that in the past blacks have been discriminated against both in Mississippi and in Jackson; that since the Commission form of government was adopted in Jackson in 1912, no blacks have been nominated or elected to any position on the Jackson City Council, although several have been candidates therefore; that there are no ward or district residency requirements for candidates; that Jackson municipal elections are governed by a majority vote requirement to win party nomination or a special election to fill a vacancy; and that there is a full-slate or anti-single shot voting requirement. Plaintiffs filed a Motion for Preliminary Injunction on March 21, 1977, seeking to halt the municipal Democratic and Republican elections scheduled for May 10, 1977 and the municipal general election scheduled for June 7, 1977. On March 31, 1977, after an extensive hearing on the Motion, this Court in an oral bench opinion denied plaintiffs' Motion for Preliminary Injunction. This denial was appealed to the United States Court of Appeals for the Fifth Circuit, which, on April 21, 1977, denied plaintiffs' Motion for a Preliminary Injunction, pending appeal, to halt the then upcoming municipal primary and general elections. The Fifth Circuit directed this Court to "expedite the hearing on the merits at the earliest feasible time," Kirksey v. City of Jackson, 552 F.2d 156 (5th Cir. 1977), and on remand, pursuant to the mandate of the Fifth Circuit, this Court tried this case on July 6 thru 8, 1977. I. VOTING DILUTION PRINCIPLES AND METHOD OF PROOF This Court recognizes its obligation to make specific findings under each of the principal and enhancing criteria articulated in Zimmer v. McKeithen, 485 F.2d 1297 (5th Cir. 1973) (en banc), aff'd per curiam on other grounds sub nom. East Carroll Parish School Board v. Marshall, 424 U.S. 636, 96 S.Ct. 1083, 47 L.Ed.2d 296 (1976), the polestar of this Circuit which sets forth the constitutional precepts of White v. Regester, 412 U.S. 755, 93 S.Ct. 2332, 37 L.Ed.2d 314 (1973), and Whitcomb v. Chavis, 403 U.S. 124, 91 S.Ct. 1858, 29 L.Ed.2d 363 (1971), as mandated by the Fifth Circuit in Nevett II and its companion cases. After specific factual findings are made under each of the Zimmer criteria, we must then determine whether the aggregate of the evidence preponderates in favor of a finding of dilution by fully weighing and balancing all of the specific findings made in conformity with the Zimmer criteria. The necessity of following the foregoing mandated procedure emanates from the Court of Appeals' holding in Nevett II and its companion cases that Washington v. Davis, 426 U.S. 229, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976) requires the plaintiffs in a voter dilution case, also referred to as a "qualitative" reapportionment case, to prove by a preponderance of the evidence intentional or purposeful discrimination in racially based voting dilution claims founded on both the Fourteenth and Fifteenth Amendments to the United States Constitution. Nevett II, supra at 219. The en banc court in Zimmer synthesized the dilution principles of Regester and Chavis by establishing certain primary and enhancing factors that a District Court must address in deciding a dilution case. The factors which are seen to go primarily to the ultimate issue of dilution are: (1) access to the process of slating candidates; (2) responsiveness of representatives to the particular needs of the complaining minority; (3) presence or absence of a tenuous state policy in favor of at-large districting; and (4) existence of past discrimination that precludes effective participation by a minority in the electoral system. The foregoing criteria go primarily to the issue of denial of access or dilution, that is, the denial to minority voters of a real opportunity to meaningfully participate in the political process, and not just the right to cast a vote that can be completely ignored under the provision of governmental protection 1287 and governmental services because an election system is so operated as to make that vote meaningless in the election outcome. Zimmer also established what is referred to as enhancing factors, that is, certain structural voting devices that may enhance the underlying dilution, if any, that exists. These are: (a) the size of the district in question; (b) the portion of the vote necessary for election (majority or plurality); (c) whether positions are contested for individually, and the number of candidates for which an elector must vote (anti-single shot voting provisions); and (d) whether candidates must reside in geographic sub-districts. Nevett II and its companion cases hold that the required showing of intentional discrimination which is essential to a valid voter dilution claim under both the Fourteenth and Fifteenth Amendments may be satisfied by direct or circumstantial evidence, the former, although easily establishing a case of voter dilution, being very rare and difficult to prove, thus resulting in an inquiry of whether plaintiffs have succeeded in meeting their burden of proof based upon circumstantial evidence, bearing in mind that establishment of the Zimmer criteria constitutes circumstantial evidence of the presence or absence of the required intentional discrimination in the form of voting dilution. Several established principles must be kept in mind in determining the ultimate issue in a voting dilution case, that is, whether the districting plan under attack exists because it was intended to diminish the political efficacy of a certain group. This ultimate issue must be determined by weighing the aggregate of the sub-issue findings. Nevett II, supra at 226. A finding that the plaintiff has prevailed under one or even several of the Zimmer criteria may not establish the existence of intentional discrimination. See, e. g., McGill v. Gadsden Co. Commission, 535 F.2d 277 (5th Cir. 1976). The evidence under the other criteria may weigh so heavily in favor of the defendants that the evidence as a whole will not bear an inference of invidious discrimination. On the other hand, the plaintiff need not prevail under all of the criteria, Zimmer, supra at 1305, nor is he limited to only those elements of proof. Kirksey v. Board of Supervisors of Hinds County, Mississippi, 554 F.2d 139 (5th Cir. 1977) (en banc) cert. denied 434 U.S. 968, 98 S.Ct. 512, 54 L.Ed.2d 454 (1977) (by a proof of an aggregation of at least some of the Zimmer factors or similar ones, a plaintiff can demonstrate that the members of a particular group in question are being denied access). The task before the fact-finder is to determine, under all the relevant facts, in whose favor the "aggregate" of the evidence preponderates in each case; it comprehends "a blend of history and an intensely local appraisal of the design and impact of the [at-large] district in the light of past and present reality, political and otherwise." White v. Regester, 412 U.S. at 769-70, 93 S.Ct. at 2341. As stated in Nevett II, the finder of fact must carefully "weigh the competing factors to determine whether the coincidence of those probative of intentional discrimination is sufficient. `Determining whether invidious discriminatory purpose was a motivating factor demands a sensitive inquiry into such circumstantial and direct evidence of intent as may be available.' Arlington Heights v. Metropolitan Housing Corp., 429 U.S. [252], at 266, 97 S.Ct. [555], at 564, 50 L.Ed.2d 450 (1977)", Nevett II, supra at 224. Having fully discussed the established voting dilution principles, including the burden on the plaintiffs of proving by a preponderance of the evidence an intentional discrimination, we must now specifically decide the factual sub-issues as taught by Nevett II. II. THE PRIMARY FACTORS A. Black Access to the Electoral Processes in Jackson The first of the primary Zimmer factors to be addressed is that of black access to the political or electoral process in Jackson. Although plaintiffs challenge the at-large election system in Jackson as racially discriminatory, 1288 they do not contest the voter registration procedure or the procedure by which candidates presently qualify to run for political office. The forms utilized by the offices of the Hinds County Circuit Clerk and Jackson City Clerk in registering voters and qualifying candidates to run in municipal elections do not evidence a racially discriminatory purpose or present any impediments to blacks voting or qualifying to run for city office either in primary or general elections. Jackson is the capital of Mississippi, its largest city, and one of two county seats of Hinds County. It is currently the largest bi-racial city in the United States (defined as one with 25% or greater black population) with a substantial black population which has no black representation on its municipal governing body. Jackson's 1970 population was 153,968, of whom 92,651 were white (60.17%) and 61,063 (39.66%) were black. The voting age population was 99,136, of whom 64,482 were white (65.04%) and 34,492 were black (34.79%). It comprises 105.36 square miles in area, having annexed approximately 40 square miles of territory in 1976 which was populated mostly by white persons. The city's Planning Board estimates that its current population is 205,000 persons with a voting age population (including the newly annexed area) of 157,589, of whom 104,985 are white (66.62%) and 52,604 are black (33.38%). The city voter registration rolls show a total registration (including the newly annexed area) of 93,058 persons, comprised of 67,711 whites (72.76%), and 25,132 blacks (27.01%) and 215 whose race is unknown (0.23%). Anyone who seeks nomination in the Democratic or Republican primaries may do so by having his application certified by either the Democratic or Republican Executive Committee, that is, by having the Chairman of the appropriate committee certify to the City Clerk that the candidate has qualified to run in the primary. Candidates do not qualify or run for Commissioner by post number inasmuch as the Jackson City Council has never by ordinance provided that Commissioners be designated by Post Number One or Post Number Two, as authorized by the provisions of Miss.Code Ann. § 21-5-11 (1972). In that event such posts would be separated for election purposes and persons seeking the office of Commissioner would qualify and seek election for a specific post as designated by ordinance with each to be voted on separately by the qualified electors of the municipality as contemplated by Miss.Code Ann. § 21-5-5 (1972). In each primary election, voters must vote for one candidate for mayor and two for city commissioners. Single shot voting for commissioner is not permitted and unless two are voted for, the vote for commissioner is not counted. The two candidates for commissioner and the candidate for mayor receiving the majority of votes in the first or second primary are then certified to the Election Commission by the Democratic and Republican Executive Committees and each party's one candidate for mayor and two candidates for the two commissioner posts are then placed on the ballot for the general election which is conducted by the Jackson Election Commission appointed by the City Council. Independents may run in the general election and qualify with the City Clerk by filing a petition containing the signatures of fifty qualified voters. There is no limit on the number of independent candidates who may run for the posts of mayor or commissioner. In the general election, no single shot voting is permitted, and the electorate are permitted to vote for one candidate for mayor and are required to vote for two for commissioner. In all elections, both primary and general, in order to be elected, a candidate must receive a majority of the votes cast, and as many runoffs as are necessary are held. No qualifying fees need be paid by any candidate running in either the primary or the general election and certification by the party executive committee is a mere formality which is routinely given. One of the named black plaintiffs has run for the office of Jackson City Commissioner, and between the years 1969 and 1973, four other black candidates have sought election to the Jackson City Council. Thus 1289 black candidates are not denied the right to seek elective office in the City of Jackson. By law no group is entitled to representation on the elected governing body in proportion to its voting potential, White v. Regester, 412 U.S. at 766, 93 S.Ct. 2332, so it is not constitutionally required that black voters elect at least some candidates of their choice regardless of their percentage turnout, David v. Garrison, 553 F.2d 923 (5th Cir. 1977); Nevett II at 216. In the same light, polarized or bloc voting in itself is not constitutionally objectionable; nevertheless, combined with the other factors discussed in this Opinion once proved, it is highly indicative of lack of access to the political processes and it is one piece of the circumstantial evidence puzzle whose successful completion supports the illation of dilution. Bolden, supra, at 243; Nevett II, supra, at 227. The subject of past discrimination in Mississippi will be discussed later in more detail. As previously noted, the defendants concede the existence of past racial discrimination in the State of Mississippi and the City of Jackson, which was massive and obvious, and which prior to the enactment of the Federal Voting Rights Act of 1965 effectively disenfranchised blacks in violation of the Fifteenth Amendment to the Constitution of the United States. Although this Court in its Opinion in Kirksey v. Board of Supervisors of Hinds County, Mississippi, 402 F.Supp. 658 (S.D.Miss.1975), found that the effects of past discrimination were no longer present in Hinds County, the en banc Court of Appeals reversed, holding that the past discrimination precluded the effective participation of blacks in the electoral process in the absence of the defendants meeting their burden of coming forward with the evidence that enough of the incidents of the past had been removed, the effects of past denial of access dissipated, and that there was presently equality of access, because of "sweeping and pervasive" past intentional discrimination which was shown to have continued to within a few years of the present. Kirksey v. Board of Supervisors, supra at 144. Nevett II, supra at 222, fn. 26. Since the commission form of government was adopted in 1912, no black candidate has been nominated in any party primary for a seat on the Jackson City Council, nor has any black candidate been elected to the Jackson City Council in at-large voting. It is true that the named plaintiff, Henry J. Kirksey, black independent candidate for governor, received a smaller percentage of the black vote in Jackson than did either his Republican or Democratic opponent, but this fact was very unusual and probably resulted from his limited campaign efforts, and/or his qualifications and personal popularity. All other elections involving black office seekers reflected that each received a very large percentage of the black votes cast but very few of the white votes in Jackson, the overwhelming percentage of the latter having been cast for white candidates with the exception of one legislative race in which over 3,000 white votes were cast for a black candidate in 1967. (See Exh. P-129). Five black candidates sought seats on the Jackson City Council in the 1969 and 1973 municipal elections, and all were defeated. In addition, the referendum submitted to the electorate of Jackson for a change in the form of city government to a mayor-council form was defeated. The results of all these elections and the unsuccessful referendum were analyzed by Dr. Gordon G. Henderson, Professor of Political Science and Director of the Computer Center at Tougaloo College near Jackson, Mississippi. Based upon 1970 Census data, Dr. Henderson computed the racial composition of all the Jackson voting precincts, and then compensating for socio-economic status, used the election results and a computer program to perform both correlation analysis and regression analysis of the election returns by precinct. Correlation analysis is a process which shows the strength of the relationship between pairs of variables, using statistically significant variables which are stronger than other variables. Regression analysis is a process which singles out from a group of variables the independent 1290 variable which best predicts values of the dependent variable, and thus can best explain the variance between the two. Stated another way, regression analysis is an accepted method of analyzing data to determine the extent of correlation between dependent and independent variables. The dependent variable was the vote received by the candidates studied, and race was the independent variable whose influence on the vote received was measured by the regression. The analysis reflected that race had a strong correlation with the vote received by a candidate; in other words there was strong evidence of racially polarized voting. The regression analysis showed that the best predictor of the votes received by the black and white candidates for municipal office was the racial composition of the population of the precincts, and other factors such as socio-economic status were never significant predictors of the voting patterns. In the 1973 municipal elections winning white candidates carried every one of the almost exclusively white precincts, and black candidates failed to receive a significant number of votes in those precincts. Conversely, each of the major black candidates for municipal office overwhelmingly carried all of the almost exclusively black precincts. This Court agrees with Dr. Henderson's conclusions that there is a clear pattern of racially polarized voting in Jackson with whites voting overwhelmingly for white candidates for municipal office and blacks voting almost overwhelmingly for black candidates. Blacks today have no problem in becoming candidates in a primary election and in a general election in the City of Jackson, as is evidenced by the fact that there have been quite a few black candidates for municipal office. Likewise, there are no impediments to blacks registering and voting in these elections. The plaintiffs concede that they have no evidence of blacks being currently discriminated against in the areas of voter registration, and offered very little, if any, evidence of any problem in getting on the ballot, which is the core of the slating inquiry. As noted by the court in Nevett II, "[t]he success or failure of black candidates appears to depend not upon any barriers to access to the slating or registration stages of . . . [Jackson's] political processes, but upon racially polarized voting . ." 571 F.2d at 227. Thus the Court finds that the plaintiffs have failed to prove any lack of access in the electoral process, either in slating, registering or voting in the City of Jackson. B. State Policy Concerning At-Large Districting of City Governments A tenuous state policy in favor of at-large districting may constitute evidence that other, improper motivations lay behind the enactment or maintenance of the plan, and the absence of a significant and legitimate state policy behind districting provisions has been an important factor in several cases finding intentional discrimination. Mississippi law permits a municipality to select one of several different forms of government. See, Miss.Code Ann. §§ 21-3-1, 21-5-1, 21-7-1, 21-9-1 (1972); Miss.Code Ann. § 21-8-1 (Supp. 1977). This is similar to the law referred to by the court in Bolden which resulted in the District Court's finding that the State of Alabama had no particular preference for an at-large scheme. The court in Bolden said it appreciated the traditional deference the federal courts have accorded local governments, and recognized "that viable local governments may need considerable flexibility in municipal arrangements if they are to meet changing societal needs. Abate v. Mundt, 403 U.S. 182, 185, 91 S.Ct. 1904, 1907, 29 L.Ed.2d 399 (1971)." 571 F.2d at 244. The Bolden court added that city-wide representation was a legitimate interest, and at-large districting was ordinarily an acceptable means of preserving that interest. See Wise v. Lipscomb, 434 U.S. 1329, 98 S.Ct. 15, 18, 54 L.Ed.2d 41 (1977), [recalling mandate and staying judgment of 551 F.2d 1043 (5th Cir. 1977)]. The Fifth Circuit nevertheless stated that the longevity of Mobile's at-large commission government 1291 could not insulate it from judicial review when state power is used as an instrument for circumventing a federally protected right [citing Gomillion v. Lightfoot, 364 U.S. 339, 347, 81 S.Ct. 125, 130, 5 L.Ed.2d 110 (196)]. As in the case sub judice, the defendant city officials in Bolden had never suggested in their brief any legitimate municipal function which the at-large districting act is designed to serve. Although the court in Nevett II stated that "[even] though state statutes generally need satisfy only minimum rationality requirements . . .. the weight of the state policy behind the districting plan is an evidentiary consideration that must be considered along with all other relevant evidence to determine whether the plan is improperly motivated." 571 F.2d at 224. This Court finds that there is lacking herein sufficient interest in at-large districting to allow a finding that there is an extant state policy in favor of at-large districting of city government. C. The Effect of Past Discrimination on the Present Effective Participation in the Election System The third factor which must be considered in determining whether black citizens' Fifteenth Amendment right to vote has been diluted is whether past discrimination in general precluded the effective participation in the election system by blacks, that is, whether past effects of discrimination have the effect of precluding effective participation in the election system by blacks today. The defendants have conceded a history of past discrimination against blacks in Mississippi and in Jackson. Prior to the passage of the Voting Rights Act of 1965, eligible black citizens in Mississippi were almost completely disenfranchised by the voting qualification requirements of the Mississippi Constitution of 1890 and subsequent legislation enacting literacy and constitutional interpretation tests for voter registration and by the poll tax requirement. See Stewart v. Waller, 404 F.Supp. 206, 214 (N.D.Miss.1975) (noting the "long history of statutory racial segregation and discrimination in Mississippi, with consequent token participation by blacks in the political processes of the state"); Riddell v. National Democratic Party, 344 F.Supp. 908, 912 (S.D.Miss.1972), rev'd on other grounds, 508 F.2d 770 (5th Cir. 1975) ("it is true that in the past Mississippi, [through] its laws, practices and customs as have other states has been guilty of racial discrimination"). In addition to past voting discrimination, racial discrimination and segregation was imposed in other areas of public life in Mississippi as well, including public schools, colleges and universities, public parks, waiting rooms, public places of amusement, recreation and assembly, public transportation and terminals, county and municipal jails and state prisons, and public hospitals and sanitariums. State officials were charged with the duty of maintaining segregation of the races. U. S. v. State of Mississippi, 380 U.S. 128, 85 S.Ct. 808, 13 L.Ed.2d 717 (1965). After the passage of the Voting Rights Act of 1965, Federal registrars or examiners were dispatched to Hinds County to enforce the guarantees of the Fifteenth Amendment and to register voters to participate in both state and municipal elections. Of the 13,232 persons registered to vote in Hinds County by federal examiners, 8,683 (65.62%) were registered to vote in Jackson precincts. The Jackson School Board, appointed by the Jackson City Council, long maintained a dual or racially segregated school system, see Singleton v. Jackson Municipal Separate School District, 509 F.2d 818 (5th Cir. 1975), and the city maintained racially segregated parks, auditoriums, golf courses, and swimming pools, most of which were not desegregated until successful federal litigation ensued. This Court is mindful of the fact that it is not enough that the less subtle means of diminishing black participation have been removed inasmuch as discriminatory official action is often clandestine and politic. Furthermore, as the court in Bolden said: Where, as here, past racial discrimination has been found to be pervasive and 1292 recent, it must be demonstrated "that enough of the incidents of the past [have] been removed, and the effects of past denial of access dissipated, that there [is] presently equality of access." Kirksey v. Board of Supervisors, 554 F.2d 139, 144-45 (5th Cir.) (en banc) (footnote omitted), cert. denied 434 U.S. 968, 98 S.Ct. 512, 54 L.Ed.2d 454 (1977). 571 F.2d at 245. This must be done by the defendants bearing the burden of coming forward with evidence that enough of the incidents of the past have been removed, the effects of past denial of access dissipated, and that there is presently equality of access. Nevett II, supra at 227, fn.26. This Court finds that the defendants have met the burden cast upon them in Kirksey. Plaintiffs concede on page 11 of their post-trial Proposed Memorandum Opinion that there is no evidence that blacks are currently being discriminated against in voter registration; likewise, this Court finds in accordance with the testimony of Mrs. Evelyn Ballard, City Clerk of the City of Jackson for the past 13 years, that black registration has been in rapid ascendency since passage of the 1965 Voting Rights Act. The record is completely devoid of any evidence supportive of any present fear or reluctance or interference with the efforts of blacks to register, vote, or seek public office, and the turnout among black registered voters for the past several elections has not been such that would give rise to the inference of any fear or reluctance on their part to cast their ballots or to seek election to the Jackson City Commission or any other elective office in the City of Jackson or to vote on the referendum question submitted and defeated recently. In addition, the Jackson Municipal School District is now a unitary, integrated system; there are no longer segregated terminal or transportation facilities; public facilities are fully integrated and no longer discriminate against blacks; and most, if not all, public facilities in the City of Jackson, are no longer racially segregated. Of course this Court takes judicial notice that the foregoing ameliorative actions were effectuated by federal litigation, mostly through consent orders entered into following the institution of suit, most of which went far beyond the specific relief requested by the plaintiffs. The failure of black candidates to win election in the past city elections has not resulted from preclusion of effective participation by blacks in the election system because of past discrimination. D. Responsiveness of City Officials to the Black Citizenry of Jackson The fourth and last principal Zimmer factor or criterion which must be considered is whether the at-large elected mayor and two city commissioners of Jackson have been responsive to the needs of its black citizens. As noted by the Court of Appeals in Bolden, the District Court's task in considering evidence under the responsiveness criterion is a singularly factual one, and although not in itself determinative of dilution, nevertheless is of "momentous" importance. Blacks United, Etc. v. City of Shreveport, supra, at 254. The two distinct facets of this issue are (1) the extent and quality of municipal services to the neighborhoods populated by minority group members, and (2) a distribution to them of municipal jobs and appointments to various boards and commissions. Hendrix v. Joseph, 559 F.2d 1265, 1268-69 (5th Cir. 1977); David v. Garrison, supra at 923 (5th Cir. 1977). A concomitant of this is the equal treatment of blacks by city officials and various department heads and their staffs. We are mindful of the fact that the plaintiffs have the burden of proving unresponsiveness, and that this Court's findings of fact on this sub-issue must also be thorough and detailed, rather than conclusory in nature. See, Blacks United, Etc. v. City of Shreveport, supra. 1. Appointments Employment With these well settled principles in mind, we consider first the question of whether the plaintiffs have proved by a preponderance of the evidence that the defendants 1293 are guilty of discrimination in the dual and interrelated appointment-employment fields. It is undisputed that the final authority to make all such appointments and to hire employees rests with the mayor and two commissioners, each of the three having charge of various city departments or functions. (a) Appointments. We recognize that in dealing with discretionary appointments, a court may not order that particular appointments be made, Mayor of the City of Philadelphia v. Educational Equality League, 415 U.S. 605, 94 S.Ct. 1323, 39 L.Ed.2d 630 (1974), and James v. Wallace, 533 F.2d 963 (5th Cir. 1976), nor do jobs need necessarily be allocated proportionately to every group in the electorate before a local governmental entity is deemed to be responsive. Hendrix v. Joseph, supra at 1269. It is undisputed that prior to 1969 no blacks were appointed by the Jackson City Council to city boards, authorities, committees or commissions. At the time of the trial of this case, of the 35 appointive boards, authorities, committees or commissions whose members are appointed by the city council, 21 are all white (60%), and 13 have black members (40%). Of the 320 seats on these various boards, authorities, committees or commissions, 289 are filled by whites and 41 are filled by blacks (14%), with some few blacks serving on two or more committees. (Ballard testimony; Stipulation Ex. M-8). Two of the five member Board of Trustees of the Jackson Municipal Separate School District are blacks, which is unsatisfactory to the plaintiffs, inasmuch as 70% of the student enrollment in the school system is black. The number of appointments that may be made in any given length of time is limited due to the fact that the terms of the members thereof are staggered. One vacancy on the Board of Trustees occurred in 1977, and a black was appointed to fill that position. The first black was appointed to the City Planning Board in late 1971, and the second of the two present black members on that Board was appointed in 1974 when the board was expanded to 15 members. Both of the black members on the board are active, vocal and involved in Planning Board activities, and are thus very representative of the black citizenry. Although all members of the Jackson Zoning Commission are white, no black applied for membership to fill the vacancy in response to advertisement for a black member. The planning division of the Jackson Planning Authority consists of 16 members, ten of whom are white, five black and one Oriental. The Deputy Director of the Allied Service Department, which was a brainchild of the immediate past mayor, Russell Davis, and which has the responsibility for the overall supervision of programs for human resources, is David Miller, a black who has held this position since 1973 at a salary in excess of $14,000. In addition, the Vista coordinator of this department is black and makes in excess of $12,000 per year, and seven of the eight day-care center manager operators in this department are black and each makes in excess of $10,000 per year. The majority of these programs administered by this agency are federally funded with the City posting matching funds; however, the entire staff thereof, including the foregoing, are paid with city funds. Recently the Jackson City Council created a new board known as The Arts Center and Planetarium Board, and appointed nine members to that board, one of whom is black. Judge Reuben Anderson (who subsequent to the trial of this case has been appointed by the Governor to fill a vacancy in one of two County Court judgeships in Hinds County, formerly held by a white judge), a black lawyer, was at the time of the trial of this case serving as one of three City Court judges in Jackson pursuant to his appointment by the City Commission. Judge Anderson is the law partner of Fred L. Banks, Jr., who the Court takes judicial notice was recently appointed by the Governor to membership on the State Board of Bar Admissions. In addition Anderson served on a committee appointed by former Mayor Davis to investigate the Jackson 1294 State University incident of some years ago and is a member of a committee appointed by newly-elected Mayor Dale Danks, Jr., together with another black lawyer, to review the operation of the municipal court system in Jackson for the purpose of improving the administration of justice in the city courts. Presently, two of the five members of the Jackson Housing Authority and one of the seven members of the Jackson Redevelopment Authority are blacks. This Court is impressed by the affirmative steps taken by the officials of the City of Jackson since 1969 to obtain effective representation of black interests on various boards, authorities, commissions and committees in the city, clearly indicating that they are being appointed in increasing numbers by the elected city officials. This Court is therefore of the opinion that the plaintiffs have failed to prove by a preponderance of the evidence that the defendants are presently, or have since 1969 been unresponsive to the black citizenry in the appointment sphere of government. (b) Employment. As previously noted, all hiring and promotion of municipal employees of the City of Jackson must be approved by the City Council (Mayor and two Commissioners). In 1972 and 1973, black plaintiffs filed complaints in this Court against the City of Jackson charging racial discrimination in hiring, testing, promotions and other terms and conditions of employment in the Jackson Fire and Police Departments. Bell v. City of Jackson, Civ. No. 72J-153(C) (S.D. Miss.1973) (Fire Department); Corley v. Jackson Police Department, Civ. No. 73J-4(C) (S.D.Miss.1974). Discovery revealed the following facts which were stipulated as correct in the consent decrees subsequently entered into between the plaintiffs and the defendants in both of the above cases. For the sixty-year period from its formation until 1971 no black person had been employed in the Jackson Fire Department until 1972, when the first black employee was hired. From 1972 to 1973 eighty-six blacks applied for positions in the Fire Department but only one was hired. Statistics stipulated as correct by the parties indicated that most black applicants were rejected for failing to make a passing score on the Civil Service Examination. Statistics showed that this test had an extremely discriminatory impact on black applicants and had never been validated for job-relatedness. In the Corley case, it was shown that from the formation of the Police Department in 1885 until 1963 no blacks had been employed as sworn officers therein, the first having been employed in 1963. Despite the fact that Jackson was 39.17% black according to the 1970 Census, as of December, 1972, of the 302 sworn officers of the department, only 21 were black (6.95%), and none held the rank above that of sergeant with only one black officer having held that rank. Of the 318 black applicants who had applied to become a sworn police officer between 1970 and 1973, only 14 were hired. 87% of the black applicants during that period received failing scores on the Police Entrance Examination, which had a severe discriminatory impact on black applicants and which also had never been validated for job-relatedness. Additional statistics stipulated to by the parties showed under-representation of blacks among secretarial and clerical personnel, segregated job categories and disparities in promotional test scores and promotions between white and black applicants for promotions in the Police Department. In 1974, the United States Department of Justice filed an action against Jackson charging a citywide pattern of practice of employment discrimination throughout the various departments of the city in violation Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., United States v. City of Jackson, Civ. No. J74-66(N) (S.D. Miss.1974). The city and the plaintiffs entered into consent decrees in all three of the foregoing cases agreeing to detailed injunctive relief designed to eliminate racial discrimination in all aspects of city employment. This relief included one-for-one quota hiring in all job classifications in which blacks were under-utilized and for sworn 1295 officer positions in the police department, filling the first fifteen vacancies in the fire department with blacks and then hiring on a two for one (black-white) basis, one-for-one quota promotions in the police department, elimination of all tests and entrance examinations alleged to have a discriminatory impact unless and until properly validated, and also back pay for certain categories of employees. On June 18, 1976, four rejected black applicants for Jackson police officer positions brought an action charging that the continued use by the department of the Minnesota Multiphasic Personality Inventory (MMPI), the psychological examination utilized to test applicants for police officer positions, violated the consent decrees entered in the above cases and their rights secured by Title VII of the Civil Rights Act of 1964. Grizzell v. Jackson Police Department, Civ. No. J76-190(R) (filed in this Court on June 18, 1976 and still pending). In their Answer to the Complaint filed in that action, the defendants admitted that from March, 1974 to December, 1975 the passing rate of white applicants had been 59% (444 applicants) and that of black applicants had been 33.3% (273 applicants); that the MMPI is a test within the definition of the EEOC's Guidelines or Employee Selection Procedures; and that the City had failed to conduct any validation studies to demonstrate a significant relationship between satisfactory performance on the MMPI and successful job performance. Although the defendants concede that the percentage of black employees does not equate the percentage of black population of the City of Jackson, and do not deny that the above three employment discrimination suits have "produced results", as is conceded by the plaintiffs, they nevertheless point out that the city did voluntarily enter into consent decrees in each of the above three cases and that these consent decrees have produced a dramatically favorable hiring-increase of blacks. The city council adopted an affirmative action program to aid in obtaining an increase in the number of black city employees. In addition, other significant steps taken by the city included the formal adoption of a policy of equal employment opportunity (Exhs. D-6 and 7), the adoption of a formal promotion policy (Exh. D-8), and the employment by the city of a fulltime Affirmative Action Coordinator, who prior to his employment by Jackson, was a chief investigator for the United States Equal Employment Opportunity Commission in Jackson. This man also helped write the Affirmative Action Program for the City applying to all aspects of employment, and going beyond the requirements of the consent decrees entered into in the above cases which also were slated to be updated in July, 1977. This program consisted of posting vacancy announcements on all bulletin boards in the city departments as well as sending them to minority groups. Additionally, department heads and the City Councilmen are informed of who is hired, including their race. All applicants are permitted to compete, and no favoritism in hiring or promotion is permitted under the program. The recruitment effort also included bringing blacks into managerial positions (Exhs. D-8, 9, and 10). Between January, 1970 and March, 1977 the black percentage of the total work force in Jackson increased from 33.2% to 39.3%; the percentage of blacks in monthly positions increased from 2.5% to 23.1%; and 71.2% of the increased monthly positions (378 of 531) were filled by blacks. As of June, 1977, the city had 2398 employees on its payroll, which included 977 blacks, or 40%; 1,795 monthly civil service positions above laboring class, of which 451 or 25% were blacks compared to 2.5% blacks in non-laboring classes in 1970, showing a dramatic increase and evidencing a much more favorable condition than that which existed in the city of Milwaukee, Wisconsin, by way of example. Admittedly, most of the black employees are concentrated in the laborer and unskilled laborer positions, and of the 78 Jackson city employees earning above $13,000 per year, only one was black; however, several were earning $10,000 to $12,000 per 1296 year. The evidence reveals the following results of the Affirmative Action hiring program instituted and implemented by the City of Jackson in recent years. Sixteen of the twenty-five employees on the staff of the Jackson Housing Authority are blacks, and two of eleven members of the staff of the Jackson Redevelopment Authority are blacks, one being the Financial Counsellor and the other the Property Improvement Inspector. Three of the nine employees in the City Clerk's office are blacks, and two of them have regular contact with those who come into the City Clerk's office for voting registration and other matters. There are six foremen in the Public Works Department of the city who make regular inspections of streets in response to requests for repaving or repairs and out of these, two are whites and four are blacks. There foremen are assigned to separate areas and reassigned periodically to other areas, and report to the coordinator who then makes a personal inspection. It is his report, in conjunction with the foremen's report, which determines which streets in the city will be resurfaced or repaired, subject to the final approval of the City Council. Plaintiffs offered no proof that whites were hired to fill any job position with the City of Jackson ahead of or instead of any qualified black applicant therefor or that any qualified black applicant was denied employment by the City of Jackson in the last several years. This Court finds that the plaintiffs have failed to meet their burden of proving any job discrimination against blacks by the City of Jackson in the last four to five years. On the contrary, the Court is impressed with the Affirmative Action Program adopted and being effectively implemented by the City, which has produced dramatically increased hiring of black citizens to more responsible positions. This program is being updated with records maintained and which and has, as conceded by the plaintiffs, "produced results." 2. Particular Municipal Services The plaintiffs' complaint of discrimination against them in connection with the furnishing of municipal service generated the greatest quantity of evidence adduced during the trial of this case, and in particular the most evidence on the part of the defendants. The plaintiffs charge that the black citizens of Jackson have been denied equal protection because they have not been afforded municipal service comparable to those accorded the white citizenry. Their complaints relate to almost every, if not every, aspect of municipal services rendered by the city to its inhabitants, namely planning, street maintenance, storm drainage, sewerage facilities, zoning, street layout, street lighting, parks and other recreational facilities, location of bikeways, water available for fire protection, health care, police protection and consideration or courtesy. The defendants categorically deny each and every one of the foregoing allegations of discrimination and contend that in order to properly evaluate the effectiveness of Jackson's Commission-type government it is necessary for the Court to scrutinize the delivery of particular services to both the black and white communities, and consider each service in detail with respect to each service complained of. This is the approach the defendants contend was not taken by the District Courts in Bolden v. City of Mobile, 423 F.Supp. 384 (S.D.Ala. 1976), and Blacks United for Lasting Leadership, Inc. v. City of Shreveport, 71 F.R.D. 623 (W.D.La.1976). (a) City Planning. The City of Jackson did not initiate city planning until the mid 1960's, and the adoption of plans was not brought into focus until the city administration took steps toward acquiring federal funds in about 1969, at which time Jackson found itself in the position of being unable to provide various plans that federal agencies expected a community of that size to have already formulated. A comprehensive plan was developed in element sections in the form of a series of individual or subject reports, many of which have been introduced into evidence by both plaintiffs and defendants. These reports indicate that they constituted a concerted effort to improve 1297 the quality of life for all Jacksonians, black and white, and recognized that greater needs did exist in the lower income and minority areas in the city and accordingly assigned the first priority to improved services in those areas. The plaintiffs contend that the defendants discriminated in this area by failing to seek black participation in the city's development goals, pointing specifically to a "community goals survey" which was performed under private contract for the City Planning Department in 1970 reflecting that of 110 persons interviewed in the survey only 9 were blacks, predictably resulting in exceedingly low priority of black needs and goals, among which were appointment of minorities to committees, low income housing, public schools, equal employment opportunity, improvement of slums, and public health facilities. It is evident that Mr. Donald Irvin, the City Planning Director, considered this survey to be "superficial," and indicated by his letter of transmittal to the Planning Board, with a copy to the City Council for informational purposes only, with no subsequent adoption or endorsement of it by the City. (Exh.: D-73, Vol. 1, at p. 45). A previous survey taken in 1969 of the "recreational needs of senior citizens" (Exh. P-79) was based on interviews of 35.9% non-white persons, and 64.1% whites, and was taken by nine interviewers, three of whom were black retired educators, the remaining six being staff personnel in the Planning Department. That survey led to the funding of two senior citizen centers, one on Jayne Street which was formerly predominantly white, but now is in a transitional stage of mixed white and black, and the other in the College Park area which is predominantly black. (Exh. P-73, Vol. 2 at p. 145). The Planning Board developed a Community Facilities Plan for parks, recreation and open space (Exh. P-75), libraries, (P-76) and municipal fire protection (Exh. P-77). Each of these reports was presented to the City Council together with one concerning future land use, upon recommendation by the City Planning Board, and a public hearing was held on this subject, after which they were adopted as the city's policy in those areas. (Exh. D-73, Vol. I at p. 29). They presented in-depth analysis of existing facilities and identification of problem areas and community needs and recommended actions to alleviate the problems. Once the city had developed the general community-wide plans, it then turned toward development of plans in more depth in specific or smaller areas. In October of 1974, the City Planning Board issued a "neighborhood analysis summary", which was a report intended to establish a format to accomplish a specific analysis "to identify problems which occur on a small area basis, to determine the incidents of these problems in terms of neighborhoods and to design a program that would assist in that area." (Exh. P-65). At that time the Planning Board issued a report titled "Neighborhood Analysis Supplement a Quality of Life Index," (Exh. P-69) which was designed for use in evaluating the quality of life in particular neighborhoods. The Planning Commission then adopted a Neighborhood Development Planning Program (Exh. P-94), under which the city was divided into 86 neighborhood units, with the older inter-city neighborhoods being the initial subjects of study and planning; that is, the Board planned to begin its work in the older inter-city neighborhoods and gradually work in concentric circles out from the inter-city, eventually concluding with the peripheral neighborhoods, which are in most cases the newer developed areas of the city. The first neighborhood study to be completed was the Jackson State University area, a predominantly black neighborhood (Exh. P-95). Other methods used to obtain black input into the operation and planning of the city government were a biracial Citizens' Advisory Committee which for several years had discussed and provided reports on important issues which had arisen in Jackson. Following the enactment of the Housing and Community Development Act of 1974, several blacks were appointed by the City Council to this committee, which was to serve as a 1298 type of clearing house for citizens' ideas, an advocate of their needs, and a stimulus for action when necessary to achieve the goals of the Housing and Community Development Act of 1974. (Exh. P-116). The City's Housing and Community Development Participation Plan established to implement use of the federal funds to be received under the Act, also included "town hall meetings" and meetings with citizens groups in churches and neighborhood community centers to discuss the Act and encourage citizen involvement in establishing priority for the use of the federal funds. Jackson's Federal Programs Department has conducted two meetings a year at City Hall since the program started three years ago for the purpose of discussing the Act and use of funds by the City. (Exh. D-81 at pp. 14-15, 18). In addition, since its establishment in 1974 the Department has also held a number of neighborhood meetings throughout the City in order to gain citizen input, and most, if not all, of these meetings have been held in the predominantly black areas of the city. Approximately 14 neighborhood meetings have been held, and almost all of the proposed projects for inclusion in the application for Community Development funds from 1975 to 1977 were derived from these neighborhood meetings. These projects include code enforcement grants, day care services, Jackson State University improvements, alleviation of Town Creek flooding, senior citizen centers and the renovation of Jones Community Center. Based upon the foregoing, this Court finds that the plaintiffs have failed to meet their burden of proving discrimination against blacks in the area of city planning; instead, the evidence shows increasing utilization of black citizens' input in planning for the development of the city and in establishing priority for the use of federal funds for that purpose. (b) Zoning. The plaintiffs contend that the defendants have discriminated against blacks by miszoning black residential areas. More specifically, they charge that there are certain black residential areas in the city where zoning is not used to protect residential properties to the extent that it is utilized in white areas, inasmuch as industrial uses are permitted in a high percentage of land in black residential areas which are zoned commercial or industrial, whereas many predominantly white areas are zoned residential. They complain that this miszoning affects the quality of life, decreases the property values and increases the cost of upkeep. The City adopted its first Zoning Ordinance on April 16, 1929, and it remained in effect until superceded by the present Zoning Ordinance which was adopted on May 29, 1974 (Exh. P-66). The 1929 ordinances were of a cumulative type, permitting residential development in industrial zone areas, resulting in the non-conforming structure being the residential, not the industrial. This is not permitted under the current 1974 ordinance. In addition to prohibitive costs and other problems associated with any wholesale attempt by the city to rezone commercial or industrial property to residential, other legal requirements must be met as a prerequisite pending a municipality amending its zoning ordinance. Before rezoning, it must be shown that there was some mistake in the original zoning or that conditions in the neighborhood have changed so as to warrant rezoning. Underwood v. City of Jackson, 300 So.2d 442 (Miss.1974). The Mississippi Supreme Court has recently held in the City of Jackson v. Shell Oil Co., 347 So.2d 340, (Miss.1977) that when the 1974 Comprehensive Zoning Ordinance was adopted changing the zoning status of Shell's property, the doctrine of res judicata applied, that is, when Shell filed a timely petition to maintain the status of its property, the City had no authority to change it absent a material change in circumstances occurring since it was last zoned. Jackson has rezoned several areas near Jackson State University and in the Albemarle Street area, both predominantly black areas, from industrial to residential because of the fact that they were predominantly residential. Future industrial development would be located in areas designated 1299 for such use within the zoning ordinance based upon the City's adopted future use plan. This Court therefore finds from the evidence that the City has not purposely or intentionally discriminated against blacks in the area of zoning, and thus the plaintiffs have failed to meet their burden of proving any such discrimination. (c) Street Resurfacing or Repairs. The plaintiffs charge that the City of Jackson has discriminated against blacks in the area of services which encompasses street and sidewalk construction and maintenance, contending that there has been discrimination in the area of resurfacing of streets, connecting streets across creeks, paving and street width. No evidence was offered by the plaintiffs to substantiate any claim of discrimination as to street construction or the construction or maintenance of sidewalks, but all of their evidence dealt with alleged discrimination in the maintenance and paving of streets, street width, and connecting of streets across creeks which divide predominantly white and black neighborhoods. In support of these contentions, the plaintiffs relied upon the testimony of Mr. James P. Dahlberg, a twenty-seven year old municipal services consultant for the Lawyers Committee for Civil Rights in Jackson who worked for fourteen months in the Government Services Equalization Center in Washington, D.C., but who was not a member of any professional society, had no formal education in engineering and urban planning, accounting or city government and who has completed one year of law school. The witness testified that pursuant to Jackson's street resurfacing program which began in 1973 only 25 (15%) of the 175 miles of streets resurfaced were located in the 48 contiguous majority black census enumeration districts where 94% of the black population of Jackson resides; that since approximately 27% of Jackson's residential streets are located in this area, blacks have received little more than half their entitlement under this program. He concluded that this disparity can be explained only on the basis of race since there is a greater concentration of industrial use in black areas and flooding conditions which may cause street deterioration are well documented in black areas of the city. Mr. Dahlberg further testified that an examination of street resurfacing on a year-by-year basis shows a pattern of underservice in black areas for each year and concluded that the black area was underserved and the white area overserved solely on statistical evidence without regard to the actual conditions of streets in either area. The procedure followed by the City of Jackson in determining which of its streets should be resurfaced was explained by Mr. Jack Oldfield, City Engineer and Director of the Public Works Department. A record is made of all complaints received concerning street maintenance, and six foremen, including four blacks and two whites, who rotate the areas of the City to be inspected, inspect the streets which are the subject of the complaints and submit lists of streets which need resurfacing to the Public Works Coordinator, a white, who decides which streets are to be resurfaced and the priority that should be accorded, with the final decision being made by the City Commission. The decision regarding which streets are to be resurfaced is based on the condition of the street, and not on the basis of race. This Court finds that the area of the city with the worst street conditions are the outlying or newer areas of the city which are predominantly white residential sections, and that these conditions are attributable to soil conditions, the destruction caused by heavy trucks working in subdivisions, and substandard construction by developers prior to annexation. Mr. Dahlberg's analysis is based upon the City's data which revealed that 24% of total street resurfacing for the period 1973 to 1977 was performed in predominantly black residential areas. The statistical evidence of street resurfacing in black areas compared with that in white areas is not convincing inasmuch as the City clearly demonstrated that street resurfacing has been accomplished on the basis of need and not on 1300 the basis of race. Thus the Court finds that the City has not discriminated against blacks with reference to street resurfacing or repair. The plaintiffs also complain of "breaks" in some streets between black and white neighborhoods, that is, discontinuation of a street for twenty to fifty feet between predominantly a black and a white neighborhood without any apparent physical reason; they further charge that the above situation exists with reference to some streets when a small creek is encountered, which would be used as a means to perpetuate racial segregation. The plaintiffs contend that the street interruptions foster neighborhood racial segregation and in the case of blacks, racial isolation and stigmatism, in addition to inhibiting normal vehicular mobility. Mr. Dahlberg was the only witness offered to support this complaint by the plaintiffs. Mr. Oldfield testified for the defendants that he examined these areas and found blacks living on both sides of the creeks and that there were also areas in the white section of Jackson where streets stopped at the edge of creeks without bridging. He explained that under the present subdivision ordinance (Exh. D-63) that the City of Jackson could not require a developer to connect streets on the opposite side of creeks; however, under a recently adopted subdivision ordinance (Exh. D-64) which became effective on July 30, 1977, the City can now require developers to connect these streets. This Court finds that the credible evidence does not support the foregoing complaints. (d) Unpaved Streets. Plaintiffs also charge that the defendants have discriminated against blacks by failing to pave streets in predominantly black neighborhoods to the same extent that they have in predominantly white neighborhoods. Mr. Dahlberg alluded to this fact in his testimony, although his written report, (Exh. P-137) failed to mention this subject. Dr. Loewen in his deposition testimony also testified to some extent concerning unpaved streets in black neighborhoods, and specifically testified that he found thirty additional unpaved streets that were not on the City's list of remaining unpaved streets in the City of Jackson (Exh. P-36, p. 25). There are approximately 850 miles of streets in the City of Jackson, and less than three miles of unpaved streets remained prior to the 1976 annexation (Exh. D-82 at p. 27). A list of remaining unpaved streets in Jackson is found in Exh. D-7 to Mr. Oldfield's above deposition, divided into four categories. Category A contains 15 streets which were to be paved in Project No. 272 but were protested out by the property owners; Category B includes three streets which were not paved because of the Town Creek flooding caused by increases in the Pearl River water level; Category C includes eight streets which were to be paved in Project 271 but were also protested out by the property owners; and Category D includes two streets that were apparently overlooked during the survey that was made by city employees in 1974 when all unpaved streets were ordered paved (Exh. D-82, pp. 28-29). Jack Oldfield, Jackson's Public Works Director and City Engineer, investigated the thirty additional unpaved streets that were found by Dr. Loewen not to be on the City's list, and allegedly in predominantly black neighborhoods, and found that twenty of them were not dedicated for public use, but were private streets; eight had been dedicated for a right-of-way but were neither constructed by the developer nor opened by the City and some of these had rights-of-way dedicated on only one side or were not of sufficient width to pave; one street was already paved but was protested out by the property owners; and the property owners had curbs and gutters installed on the sides of the one remaining street but would not pay for the paving. Therefore, the City refused to pave the street because all citizens, black and white, are required to pay by special assessment for paving. In view of the foregoing facts and the additional fact that the City Council had ordered that all unpaved streets be paved some time ago, subject to the property owners paying for the paving thereof, this Court finds that there has been no "street 1301 paving discrimination" against the black citizenry of Jackson. (e) Street width. The last complaint made by the plaintiffs with reference to street conditions relates to the width of streets in black vis-a-vis white neighborhoods. The plaintiffs' witness, Dr. Loewen, testified that based upon the survey he caused to be conducted streets in the black sections of Jackson are narrower than those in the white sections, that is, with a mean width of 29 feet in black areas and 41 feet in white areas, and that many streets in black areas did not have curbs or gutters. He did admit on cross examination that there were some streets in white areas without curbs and gutters also. Under the City's subdivision ordinance adopted in 1962 and effective until July 30, 1977, (Exh. D-63), before the City would accept the responsibility of maintaining a subdivision street, the street, if built with curb and gutter, had to have a minimum width of 32 feet, and if built without curb and gutter, a minimum width of 30 feet (22 feet plus a one foot gravel and 3 foot shoulder on each side). Consequently, a street, whether it be in the white or black section of Jackson with a width of 29 feet without curb and gutter from one edge of pavement to the other, actually exceeded the City's minimum feet width for the period from 1962 until July 30, 1977 by at least seven feet. Jackson's subdivision ordinance set forth minimum, not maximum street width standards, and if a developer constructed streets of a greater width than the minimum in a white area this does not in any way indicate that the City has discriminated against blacks. There is no evidence at all to indicate that the width of streets in the City of Jackson resulted from intentional discrimination against black residents of Jackson. Many of the predominantly black neighborhoods are located in the older section of Jackson, some of which were formerly white areas, and many of the streets therein were constructed many years ago accounting for their being narrower than those recently constructed in the newer outlying sections of the city which are predominantly white neighborhoods. This Court finds that the plaintiffs have utterly failed to sustain their burden of proof that the defendants are guilty of discrimination against black with regard to the width of streets. (f) Street Lighting. The plaintiffs contend that a 1975 study (Exh. P-83) by the Jackson Planning Board shows that an estimated 90% of streets in majority black census enumeration districts have inadequate lighting (Exh. P-136); and although they state that commendably the City adopted recommendations contained in the 1975 study for upgrading street lighting, unfortunately the implementation schedule which would have provided for the upgrading of the black area first was not followed, but instead extensive work was done in lower priority white areas while two of the three high priority black areas were skipped. The City counters with the contention that the report prepared by the plaintiffs' witness, Dahlberg, correctly states that "a substantial majority of the total streets with inadequate lighting are located in black areas," but states that two factors are not reflected by the Dahlberg report, namely, that Map 2 of the study which indicates the level of street lighting and foot candles as of the Spring, 1975 reveals that the existing levels in black and white areas was roughly equivalent in terms of actual candlepower but that lighting in black areas was deemed inadequate for a variety of other reasons: higher crime, more pedestrian or vehicular traffic, more hazardous traffic conditions, or lack of emphasis on a certain area. In addition, the Dahlberg report does not mention the implementation of a phase program to upgrade street lighting. The highest priorities of the program have been assigned to black areas (Exh. P-83, pp. 34-36) and work on Phase I in the vicinity of Jackson State University, a predominantly black residential area, was approximately 60% complete at the time of the trial of this case, and Phases II and III, also in black areas, have anticipated completion dates of 1977. Thus, in light of the above affirmative 1302 steps to correct apparent deficiencies in the street lighting system, a finding of discrimination against blacks in the provision of this service is simply not warranted. (g) Bikeways. Jackson is currently implementing a bikeways system plan developed by its Planning Board in 1974, which consists of 13 miles of bike trails constructed for the exclusive use of cyclists in addition to 108 miles of bikeways (Exh. P-80). According to the testimony and report of the plaintiffs' witness Dahlberg (Exh. P-139), blacks are underserved in the provision of bikeways inasmuch as none of the 13 miles of trails for the exclusive use of cyclists is located in black areas and only roughly 20 miles of the 108 miles of bikeways are located in predominantly black areas. There is no question that a majority of the bikeways are located in predominantly white areas, most of which are located along city streets and through vacant lands. The plan recites that "the objective of the bikeway planning process is to minimize conflicts between the bicycle and the automobile by allotting sufficient space to each." (Exh. P-80 at p. 15). Location of the bikeways is determined principally by the engineering design standards set forth in the plan which provides that the system as a whole should form a continuous unbroken way which connects all significant bicycle trip origins and destinations throughout the urban area. Because of the cost question, street related locations must be chosen, and in doing so consideration must be given to traffic volumes, the presence of vehicles, including trucks, accident history, bus stops, pedestrian usage, uses, grade profile and pavement conditions. The absence of more bikeways in predominantly black areas or neighborhoods located near the business district of downtown Jackson is due to factors such as population density and high traffic volume, inasmuch as protection of cyclists is extremely important. Any disparity between the linear footage and location of these bike trails in predominantly black and predominantly white areas is certainly not attributable to any purposeful racial discrimination. (h) Storm Water Drainage. There is no question but that flooding in predominantly black communities is and has been a vexatious problem in the City of Jackson, particularly in the Town Creek area, but flooding is quite widespread in the City of Jackson and also affects the various predominantly white areas. A study by the engineering firm of Clark, Dietz and Associates made on behalf of the City of Jackson (Exh. P-57) recognized this Town Creek flooding problem and recommended a Phase program of improvements. Consequently, the City has applied for and received federal monies to assist in correcting the problem. The map prepared by the plaintiffs' witness Dahlberg reflects the rising incidence of flooding in predominantly black areas or neighborhoods. The information from which the map was prepared was used in conjunction with the City's application for federal funds to be used in that particular area and did not constitute a compilation of all areas with a rising incidence of flooding. Mr. Dahlberg admitted on cross examination that he did not intend to convey the idea that there is more flooding in predominantly black, as opposed to white areas and that his report did not relate to discrimination against blacks in connection with this flooding problem. Furthermore, funds were allocated in community development block grants to improve drainage structures along Town Creek in the predominantly black area by placing box culverts at an approximate cost of $165,000, which is approximately 85% complete; the placement of box culverts on Town Creek at Bell Street and Pleasant Avenue at the cost of $200,000, which was 45% complete; and the allotment of $500,000 for channel improvements of Town Creek, replacement of Gallatin St. Bridge and channel improvements on Town Creek between Gallatin and Fortification Streets. (Exhs. D-24; D-82 at pp. 48-52.) The City of Jackson also obtained money through HUD under the so-called Categorical Grants Program in the initial phase of Urban Renewal to undertake the Town Creek Tube Project designed to alleviate 1303 flooding in the Town Creek Area. After this project got underway the City was required by the federal government to continue the project in order to protect the federal government's financial expenditure and has done so by pledging community development block grant funds. Contrary to the plaintiffs' contention that this Town Creek Tube Project will benefit only the downtown business community, this Court finds that the improvement of storm drainage in the downtown area will also improve conditions in the black residential area along Town Creek just north of the business district and also that black, as well as white, business establishments will benefit thereby. In sum, the City government has recognized the flooding problems which exist in the City of Jackson caused by heavy rains, which is not restricted to the predominantly black area but certainly does affect it, and has taken and is continuing to take affirmative steps to alleviate this problem. Therefore, this Court finds no evidence of discrimination against black citizenry by the City government either in the recognition of the flooding problem or efforts to alleviate it, which is being done as rapidly as feasible. (i) Sanitary Sewerage. It is conceded by the defendants that sanitary sewage problems do exist in the Town Creek and Lynch Creek Drainage Basins located in the predominantly black residential area in the center of Jackson. The evidence shows that sewage conditions are worse in this area than in several other basins in the City of Jackson. The City's Sanitary Engineer testified that poor materials, narrow sewerage mains and infiltration/inflow problems are causing health problems in this area, including the pollution of Town Creek with raw sewage (Exh. P-42). A study of the area-wide sewerage system was conducted in 1973 by Clark-Deitz and Associates (Exh. D-59), and this study resulted in a system of priorities for sewer improvement completions. A program was immediately implemented to rectify these deficiencies which necessarily required a considerable period of time because of the formulation of final plans, approval by the Environmental Protection Agency, the obtaining of available funds, the advertisement for bids and the awarding of contracts based thereon. This sewerage problem exists in the above areas as well as in practically all, if not all, of the old sections of the City. The first project to be undertaken was the laying of a segment of sewer lines from Palmyra Street to Ford Avenue along Town Creek in the predominantly black area because this area presented the most serious problem. The City Council has committed itself to undertake all four projects recommended by the Clark-Deitz and Associates study for the Town Creek Basin Area plus two others (Exh. D-71, pp. 44-45). In conclusion, the sewerage problems exist in various white and black communities in Jackson, but more so in the black community because of the fact that it is located in the older section of the city with understandably more problems, but this need has been recognized by the City and positive steps have been taken to rectify these inadequacies with priority being assigned to the alleviation of the problems in the black areas, which is underway at this time. This recognition and action on the part of the city is certainly the antithesis of apathy or discrimination against blacks. (j) Fire Protection. The plaintiffs' allegation of inadequate fire protection afforded to black areas by the City is based primarily on the 1973 engineering report prepared for the City on the "Water Facilities Planning Analysis for the City of Jackson", which showed deficiencies in water pressure for fire protection in black areas, notably in the Mayes and Britton Avenue areas (Exh. P-81, pp. 32-35). They further contend that municipal fire protection in the black community is inferior to that afforded the white community, although they do concede that the City has made some effort to correct these deficiencies but complain that no update of the 1973 report has been performed to determine if they continue to exist. 1304 The finding of one study has been that Jackson has a very good fire rating (Class 3) given by the American Insurance Association which reflects very good and satisfactory conditions in the six aspects rated for fire protection: water supply, fire department, fire alarm, fire prevention, building department and structural conditions in the high value district of the community. The two most important elements, water supply and fire department, and desirable situation allowing maximum use of the facilities of each, were found to exist (Exh. P-56 at III(74)). The Jackson City Planning Board Study (Exh. P-74) reflects that "within the older developed portions of the City of Jackson, high risk areas, the community is well served by fire companies." The deficient areas noted in this report are "at the edges of the municipality and in the unincorporated portions, especially in the newer developed area." These three areas specifically enumerated as underserved are the northeastern portion of the study area (predominantly white), the Van Winkle area in west Jackson (predominantly black), and the Forest Hill area southwest of Jackson (predominantly white). A map introduced into evidence by the defendants depicts the current location of fire stations and engine company coverage and updates Map 5 of Plaintiffs' Exh. P-77. This map reflects that the predominantly black areas of Jackson have greater overlapping areas than the white areas, most being served by at least two and sometimes three fire stations. Jackson's recent Capital Improvements Plan indicates substantial commitment of funds from revenue sharing funds and general obligation bonds for fire protection projects (Exh. P-87, p. 14); (Exhs. P-85, p. 20; P-86, p. 17; P-87, p. 14). Turning next to the fire flow aspect of fire protection, plaintiffs rely principally upon Analyses 3 and 8 of the Water Facilities Planning Analysis for the City of Jackson dated July, 1973 (Exh. P-81) which evidenced a deficiency in fire flow in certain predominantly black areas. These deficiencies were ascertained through computer simulation, and the analysis recommended the implementation of a phase program to correct the apparent deficiencies, which is currently being undertaken by the City, most of which have already been corrected, in accordance with the analysis recommendation. The evidence preponderates in favor of the defendants concerning fire protection both through location of fire stations and firefighting equipment as well as fire waterflow. (k) Parks and Other Recreational Facilities. Probably the most keenly disputed of the plaintiffs' public service discrimination claims relates to the number and location of public parks. Certainly the greatest quantity of evidence relating to public services was offered on this subject, by both plaintiffs and defendants. Mr. Dahlberg's testimony was not based upon any personal inspection by him, but on a 1971 report of the City (Exhs. P-137 and P-75). He testified that the foregoing report reflects that 171 acres are allotted to black areas or neighborhoods for parks while white areas enjoyed a minimum of 1500 acres, and that over 1800 acres of vacant or marginal land in predominantly black areas could be acquired for parks; furthermore, newly annexed areas adjacent to areas of black residential concentration in the northwest part of Jackson could provide thousands of acres of park lands within black majority census enumeration districts. On the other hand, defendants' evidence showed that the greatest concentration of neighborhood park facilities exists in predominantly black areas, and that when total acreage is broken down in a black/white community manner, 169 acres of parks exist in predominantly black areas and 143 acres of parks in predominantly white areas and 2,892 additional acres exist as community parks. In addition, planning by the city for parks has given the highest priority to neighborhood and district parks, with the highest priority for development being in predominantly black neighborhoods. (Exh. P-75 at pp. 4, 5, Maps 15-18). 1305 The parties disagree on what should be defined as a "neighborhood park" and what should be designated "community parks." Plaintiffs contend that although testimony of Mr. Monroe Williams, the city's Parks Director, was that more than half of the neighborhood park acreage in Jackson is located in predominantly black areas and that some predominantly white residential areas are lacking neighborhood park facilities, nevertheless eight of the eighteen parks in black neighborhoods are less than three acres in size, while only one of the fourteen in white neighborhoods is less than three acres in size. The defendants counter that there is no de jure impediment to the use of community-wide facilities by blacks and whites. In answer to the plaintiff's allegation that the location of the new Riverside Park located off 1-55 Highway is so far from black neighborhoods to discourage black utilization of the park, the defendants contend that it is not within walking distance of either white or black residents. Based upon all of the evidence of record, this Court finds that factors other than race have influenced the location of city parks, and that there are sufficient and adequate neighborhood parks in and near the predominantly black residential areas of Jackson as well as community-wide parks which are available for use and are being used and enjoyed by all residents of the city. The Court finds that there are adequate parks to provide parks and recreational facilities to blacks and whites alike. Factors which have influenced the location of parks have not been race, but are existing land use patterns, density in housing types and financial ability to pay for facilities, as well as the topography and physiographic features of the land in question. The City of Jackson has expended a great amount of funds to upgrade the quality of parks and recreational facilities provided both the black and white communities through the purchase of playground equipment, building of baseball fields, resurfacing and lighting of tennis courts, multipurpose centers with recreation, library and health facilities, summer supervised playgrounds and swimming pools. Jackson operates a ten week program of 50 summer supervised playgrounds, 39 of which accommodate black or predominantly black participants, and free lunches are served only at those 39 sites. (Exh. D-60). In addition, even though Jackson is not required to operate swimming pools, see Palmer v. Thompson, 403 U.S. 217, 91 S.Ct. 1940, 29 L.Ed.2d 438 (1971), nevertheless it does operate several, five of which are located in predominantly black areas, two in predominantly white areas and three in areas which are considered community mixed areas. There is no prohibition against any person using any of these pools, regardless of race. Plaintiffs offered considerable testimony as well as a documentary on Grove Park located in a predominantly black area of Jackson, which evidenced deteriorated facilities and equipment. However, the city has made substantial efforts to upgrade the quality of facilities located there since 1970, including the construction of a Little League baseball field at the cost of $17,000, resurfacing and lighting of tennis courts at a cost of $46,500, the acquisition of land for swimming pool construction at a cost of $264,928 and construction of a swimming pool which cost approximately $149,000. (Exh. D-22 and D-30). In addition, capital improvement projects for Grove Park at a cost of $175,000 to be funded by general obligation bonds, is also scheduled and includes the construction of a football field and shelter, as well as additional playground equipment and picnic tables. The Jackson City Council on May 25, 1977 also approved Grove Park as a location of a new multi-purpose community center, as well as centers to be located at Sheppard Brothers Park in a predominantly black area and Sykes Park in a predominantly white area. (Exhs. P-86 at A-28; P-87 at A-40; P-73 Vol. II at 54). Unquestionably, the gravel access road to Grove Park was in a terrible state of repair, which led to a citizens' meeting at Jones' Center on January 11, 1977, producing a recommendation for reconstruction of the access road to Grove Park clubhouse because "the present road was unpaved and a 1306 hazard to motorists, particularly in inclement weather conditions." The city included a $15,000 request for the reconstruction of the Grove Park road in its 1977 Community Development Block Grant Application to HUD (Exh. P-122). The evidence fails to preponderate in favor of the claim of the plaintiffs that the defendants have discriminated against blacks in this area, considering all of the evidence in connection with parks and other recreational facilities and equipment constructed and maintained by the city for its citizens. On the contrary, the past and present conduct by, and the projects of the city do not show any insensitivity to the needs of the black community in the parks and recreational field, and the conduct of the city clearly evidences concern for the recreational needs of all citizens of Jackson, with the assignment of first priorities to neighborhood and area parks to be located in predominantly black areas. (l) Federal Programs. Not until 1969 did Jackson participate in federal programs, and this came about after the election of Mayor Russell Davis, who was principally responsible for the city participating in various federal programs designed to aid low and moderate income areas. The city appointed a Federal Programs Coordinator and since 1970 has obtained approximately $17,000,000 in federal funds for neighborhood improvement projects, the great majority of which have been expended in predominantly black areas of the city. (Exh. D-82 and P-5). These funds have provided park and recreational facilities, reconstruction of storm drainage structures, reconstruction of streets, housing rehabilitation, senior citizen facilities, construction of a pedestrian walkway over railroad tracks and senior citizens facilities. The city has conducted neighborhood and town hall meetings to obtain citizen input into the types of projects for which federal funds should be expended and a three year plan was established. There has been input from both black and white communities, and funds have been obtained for programs such as the Town Creek storm water drainage improvements, the Jones Community Center and concentrated code enforcements to rehabilitate housing in low and moderate income areas. (Exh. D-117 and 118). Contrary to the intentions of the plaintiffs, the evidence substantiates the fact that there has been no discrimination against blacks in the application for and use of federal funds, but that the overwhelming portion obtained have been spent to benefit primarily black areas in Jackson. The plaintiffs have introduced evidence that in the planning process and expenditure of federal funds the defendants have been guilty of racial discrimination, and in support of this claim adduced testimony, as well as certain documentary evidence, including Exhibits P-90 through P-97. This last exhibit is a letter from Charles E. Clark, Assistant Regional Administrator for Fair Housing and Equal Opportunity, HUD Regional Office, Atlanta, Georgia, to Mayor Russell C. Davis, advising that the writer's staff had determined that the Jackson City Planning Board was administering the 701 Comprehensive Planning Assistance Program in apparent noncompliance with Title VI of the Civil Rights Act of 1964, and the HUD implementing regulations relative to planning activities in the Midtown Neighborhood Development Planning Area. The defendants countered this evidence through testimony and documentary evidence (Exhs. D-67 through D-70). Subsequent to the trial of this case, Mr. Donald L. Irvin, the City Planning Director of the Jackson City Planning Board, received a letter dated July 8, 1977 from the same Mr. Clark in which Clark stated that his agency was closing its files on the above complaint, subject to the Jackson City Planning Board continuing to carry out its activities under the 701 Program. The defendants have moved the admission of this letter through a Motion to Re-open, to which the plaintiffs object. Both sides have filed Memoranda of Authorities in support of and in opposition to the Motion, and in the alternative plaintiffs have moved to re-open the evidence to take testimony and introduce additional evidence in the event 1307 that the defendant's Motion is granted. The defendants oppose this alternative request. Whether to permit re-opening of the record to allow the defendants to introduce this letter in evidence from Mr. Clark is within the sound discretion of this Court. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 331-332, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); 6A Moore's Federal Practice ¶ 59.04(13) (2nd Ed. 1974). Inasmuch as this case was tried to the Court and this Motion was filed by the defendants shortly after receipt of the letter, which was shortly after the conclusion of the trial, we find that in the interest of justice and fairness this Court should and does grant the Motion of the defendants; therefore this letter is admitted into evidence for the limited purpose of answering the issue of noncompliance raised by the plaintiff, which was also the subject of evidence offered by them to support their contention in that regard. The alternative motion of the plaintiffs to re-open will be granted for the sole and limited purpose of admitting into evidence the letter of September 6, 1977 to Mr. Herman "Tex" Wilson from Barry H. Powell, the attorney representing the complainants in the administrative complaint which was the subject of the July 8 letter from Clark to Irvin. The Motion of the plaintiffs to re-open to present additional evidence in this regard would serve no useful purpose and would unduly delay the disposition of this case and is therefore denied. (The defendants' letter will be marked Exh. D-84 and the plaintiffs' letter will be marked Exh. P-160). (m) Public Housing. Plaintiffs contend that public housing as it exists in Jackson is not "true" public housing. Although an earlier public housing referendum failed, Jackson voluntarily entered this area in 1970 after successfully defending the challenge of certain citizens thereto. See West Jackson Homeowners and Voters Ass'n v. Jackson Housing Authority, 283 So.2d 78 (Miss.1973); Muirhead v. Pilot Properties, Inc., 258 So.2d 232 (Miss.1972). In addition to other responsibilities, the Jackson Housing Authority (JHA) has as its primary objective to provide housing for low and moderate income families, and its efforts in this field have been directed almost entirely to the black community. As previously noted, two of the five member Housing Authority Board are blacks, one of whom is a named plaintiff in this case, Reverend Horace L. Buckley. Blacks on the staff of the JHA include an accounting technician, one social worker, a property improvement inspector, three project managers and eleven maintenance personnel. Three projects are administered by the JHA, namely, Willow Grove Apartment Project constructed at a cost of $2,069,845.59 with an annual budget of $381,188.00; Golden Key Apartments with a construction cost of $2,103,919.00 and an annual budget of $400,647.00; and Whiterock Homes with a construction cost of $1,031,861.66 and an annual budget of $409,066.00. These three projects respectively consist of 152 single-family dwelling units with 100% black occupancy, 152 elderly handicapped dwelling units and 184 single-family dwelling units with a 99% black occupancy, located in a predominantly white neighborhood (Exhs. D-25 and D-26). Other services include day care centers provided for project residents, community activity centers at the Golden Key and Whiterock projects which include services such as clinics, libraries, gymnasiums and free lunches, constructed at a cost of approximately $1,000,000.00 and the George Kurts Fieldhouse, a gymnasium located in a predominantly black area (Exhs. D-25 and D-26; testimony of Douglas A. Tuttle). The establishment and administration of public housing by the City of Jackson shows a great sensitivity to the needs of all its citizens in this area, particularly its black citizens. (n) Concentrated Code Enforcement. Jackson's Concentrated Code Enforcement program, operated under the auspices of the Jackson Redevelopment Authority and funded by the city and Department of Housing and Urban Development Code Enforcement 1308 Project, deals primarily with residential properties. It encompasses the inspection of homes to determine if there are any violations of the Standard Housing Code and if the residence is capable of rehabilitation. Most of the work in this area is done on homes that are 10% to 20% dilapidated, and HUD guidelines are utilized in making these determinations. Grants per owner-occupied units may be made up to $4,500 with provisions in the event of unforseen contingencies for an additional $1,000. Concentrated Code Enforcement has up to this time been in the Hawkins Field and the Jackson State University areas, which are predominantly black, and in the predominantly white Veterans Park area. The majority of available funds have been utilized to rehabilitate black areas, which is evidenced by a total expenditure of $1,622,286.00 in predominantly black areas as compared to $350,000.00 in predominantly white areas. (Exh. D-30 and D-31, Items 5, 41). There is thus no evidence of any discriminatory treatment of blacks in the provision of this service. (o) Community Improvement. Jackson's Community Improvement Department was established in February, 1969 and combined with the Rehabilitation Department in 1970, since that time operating as a single unit. The duties and responsibilities of this department are divided into three areas: citywide housing inspections conducted on a daily basis; handling complaints concerning substandard housing; and inspection of vacant property designed to reveal defects in structure, plumbing and electrical equipment and to insure that the owners bring the property into compliance with the Standard Housing Code before the property is occupied again. The City Council appoints the Housing Board of Adjustments and Appeals, composed of city businessmen to whom property owners may appeal their respective cases and from whom they may obtain additional time in which to comply with the action ordered. This seven member board is composed of two blacks and five whites, while the Community Improvement Department has seventeen employees, five of whom are black. (Exh. D-36). Priority was assigned to and work was begun by this department in predominantly black areas of Jackson, which were considered to be in greater need of attention because of substandard and dilapidated housing. This department also provides relocation allowances to tenant families up to $100 for moving expenses, and this program is funded totally by the City of Jackson with no federal assistance. One hundred and fourteen (114) of the one hundred and thirty-seven (137) payments of this type made by the city have been to black citizens of Jackson. (p) Medical Services. This Court reserved ruling on the objections of the defendants to evidence offered by the plaintiffs relative to the quality of medical care provided by the city. This evidence consisted of a federal report and the 1970 census statistics (Exh. P-140 at p. 2) and testimony by Mr. Dahlberg. We now conclude that this subject is not germane to the issues herein and thus sustain the objection inasmuch as Jackson is not required to offer and does not offer free medical care or services to its citizens. The responsibility for providing medical services is placed on the Mississippi State Board of Health and the various County Boards of Health. Miss. Code Ann. §§ 41-3-1 et seq. (1972). Although municipal regulation of health is permissible under Miss.Code Ann. § 41-3-57 (1972), it is not mandatory, and the "municipality is not constitutionally required to provide a particular quantity or quality of health services." Cf. Jackson v. New York City Health and Hospital Corp., 419 F.Supp. 809, 812 (S.D.N.Y.1976). This Court declines to infer discriminatory purpose from Jackson's failure to provide non-obligatory free medical services to all of its citizens, both black and white. We note, however, that on cross-examination Mr. Dahlberg did testify that Baptist Hospital, one of the city's largest, if not the largest, is located very near predominantly black residential areas and has many doctors' offices in close proximity. 1309 (q) Police Protection and Police/Community Relations. The plaintiffs contend that a serious problem of police/community relations exists in Jackson to which the city council has not been sufficiently responsive. They principally rely upon a staff report issued by the United States Commission on Civil Rights. This report dealt with police/community relations in Jackson, and was based upon a January, 1977 investigation following complaints of police harassment and brutality in Jackson made by the Southern Regional Office of the United States Commission on Civil Rights (Exh. P-5). As a result of that investigation the commission concluded that: many citizens in Jackson, especially black citizens, have the firm conviction that they have been victimized rather than served by their police department. Their allegations range from harassment to outright brutality. Their fear and anger are compounded by their frustration and the frustration comes from their belief that such conduct goes largely unheeded, and logically from their viewpoint, therefore condoned. The commission reported that citizens are afraid to lodge complaints of police harassment or brutality with the Department; that citizens especially black citizens lack confidence in the will and ability of the police department to police itself; that the Internal Affairs Division of the Police Department is all white; that there is a lack of clearly defined policies and procedures for the investigation of complaints against police officers; that complainants are not advised regarding the Department's action on a complaint; that the nature and extent of any disciplinary action against the offending officers is solely within the discretion of his or her supervisor or that supervisors have no formal or written guidelines regarding disciplinary action to be taken against defendant officers; and that the facts sustain an inference that the "current process of internal review and discipline simply is not effective." This staff report, attached to an affidavit of Bobby D. Doctor, Southern Regional Director of the United States Commission on Civil Rights, was the only evidence offered by the plaintiffs in support of this contention, and the report noted that the city officials and police department personnel had fully cooperated with the commission's staff in its study. In its introduction the report stated that it was "not intended to be a definitive analysis of the state of police/community relations in Jackson, Mississippi. Indeed it would be presumptuous to assume that two staff members in three days could fully assess a situation so deeply complex and wrought with emotion." The Court agrees with this latter observation in the report, and in the absence of any other evidence than that offered by the plaintiffs herein, this Court finds that the plaintiffs have failed to prove by a preponderance of the evidence this allegation of police mistreatment or brutality and a problem in police/community relations in Jackson. SUMMARY OF FINDINGS ON QUESTION OF RESPONSIVENESS As was pointed out by the court in Blacks United v. City of Shreveport, supra, "[T]he issue of responsiveness in a [voter dilution case] is momentous. Its resolution has considerable probative force on the question [of] whether the plan is being purposefully maintained" for the purpose of diluting minority voting strength. 571 F.2d at 254. Also this issue is of great significance because proof of a governing body's unresponsiveness to minority needs is strongly corroborative of an intentional exploitation of the electorate's bias, allowing representatives to ignore minority interests without fear of reprisal at the polls, where proof of polarized or racial bloc voting exists, as it does here. Nevett II, supra at 222-223. Indeed, one of the primary objectives of a free and meaningful electoral process is the insurance or guarantee of systematic responsiveness by a representative governing body answerable to all the electorate. This Court's task in considering evidence of responsiveness is singularly a factual 1310 one, which must be determined from all the evidence of record. After exhaustive review of that evidence, we find that the black citizens of Jackson have free access to the city governing body, which maintains an "open door" policy; blacks have in the last several years, and are now being appointed to positions of importance and responsibility on city boards, agencies and commissions and are being hired by the municipality in increasing numbers to perform jobs at every level; blacks have not been discriminated against or slighted in the dispensing of municipal services, but on the contrary have and are being in many instances favored. In summary, based upon all of the above specific findings of fact, this Court finds that the governing body of Jackson has in the recent past become, and is now increasingly and systematically responsive to the interests and desires of the black citizens of the city, and is thus representative of all its constituency. III. THE ENHANCING FACTORS OR CRITERIA In addition to enumerating the four previously discussed primary or substantial criteria which must be considered in determining whether there is sufficient circumstantial evidence of intentional discrimination to make out a voting dilution case, Zimmer list four enhancing factors, that is, factors the proof of any of which enhances or buttresses a finding of the existence of any of the four primary factors, and which must be considered together with the primary factors in determining whether there is the required proof of intentional discrimination and therefore dilution of minority voting strength. These four enhancing factors will be discussed briefly, inasmuch as they have already been stated herein, and the previous discussion of Mississippi law governing the slating and election of candidates for municipal office in the City of Jackson has in effect answered the question of the existence of the factors. (a). The size of the district (its electorate) must first be considered, because in order for a voter to know the candidates, for a candidate to attract the attention of the voters and the commitments of time, money and other resources important to the election process, different considerations and factors will vary widely with the size of the electorate. In cases which involved a fairly small electorate, the plaintiffs must prove the precise way in which the system dilutes their voting strength, David v. Garrison, supra at 927, but not so where the electoral district is "large." Certainly the present at-large election system is as large as possible, that is, it encompasses the entire 105.36 square miles of the City of Jackson, a city with a current population of approximately 205,000 person, and a voting age population (including the newly annexed area) of 157,589, of whom 66.62% are white and 33.38% are black. (b). It is undisputed that in both primary and general elections, in order to be elected, a candidate must receive a majority of the votes cast, and as many runoffs as necessary are held. The candidates for city commissioner do not run for numbered positions because the city council has never passed an ordinance to so provide, as permitted by state law. Miss.Code Ann. § 21-5-5 (1972). (c). There is an anti-single shot voting provision, because in the primaries and general elections voters must cast their ballot for one candidate for mayor and two for city commissioner. If only one commission candidate is voted for, in either the primary or general elections, that vote is not counted. (d). Candidates for mayor or commissioner need not live in or run from particular geographical sub-districts within the city. In sum, each of the enhancing factors exists in favor of the plaintiffs, and the only mitigating factor found by the court in Bolden, namely the absence of primaries, does not exist here. IV. THE AGGREGATE OF THE FACTORS This Court has made its specific findings of fact concerning the existence or 1311 non-existence of the sub-issues, both primary and enhancing. Now we must decide the ultimate issue of fact, and that is in whose favor the "aggregate" of the evidence preponderates, considering all of the criteria together, giving the significance of each and the strength of the showing under it due weight. Blacks United v. City of Shreveport, supra at 255. At this point a review of some of the relevant legal principles set out in our previous discussion of voting dilution principles and the method of proving dilution is in order. By proving an aggregation of at least some of the Zimmer factors, or similar ones, a plaintiff can demonstrate that the members of the particular group in question are being denied access. See, Nevett II, supra at 224-225; Kirksey v. Board of Supervisors, (en banc) supra at 139. This determination is peculiarly dependent on the facts of each case and comprehends a "blend of history and an intensely local appraisal of the design and impact of the [at-large] district in the light of past and present reality, political and otherwise." White v. Register, 412 U.S. at 769, 770, 93 S.Ct. at 2341. It is therefore our task as the finder of fact to carefully examine and weigh the competing facts to determine whether the incidence of those facts probative of intentional discrimination are sufficient to establish such a finding, within the framework of Nevett II and other dilution cases. As stated by the Court in Arlington Heights, supra, "determining whether invidious discriminatory purpose was a motivating factor demands a sensitive inquiry into such circumstantial and direct evidence of intent as may be available." 429 U.S. at 266, 97 S.Ct. at 564. It must be borne in mind that even if the finder of fact determines that the plaintiffs have prevailed under one or even several of the Zimmer criteria this still may not establish the existence of intentional discrimination, see, e. g., McGill v. Gadsden Co. Commission, supra, but on the other hand the plaintiffs need not prevail under all of the criteria, Zimmer, supra at 1305, nor are they limited in their proof only to those criteria. Nevett II, supra at 224-225; Kirksey v. Board of Supervisors, supra at 139; Hendricks v. Joseph, supra at 1270-1271. In the process of making this ultimate factual determination this Court is aware of and has kept in mind the following established principles found in the decisions of the United States Supreme Court and the United States Court of Appeals for the Fifth Circuit. Dilution is an elusive concept because it cannot be proven by mathematics alone. It reflects a challenge to the usual election system wherein the candidate of the majority of the voters wins the election. Dilution unconstitutionally abridges or dilutes meaningful participation by a minority by virtue of the fact that a majority of the voters, and the successful governing authority elected by that majority simply ignore the governmental needs of a substantial minority of the voters and remains arrogant and unresponsive to the voting strength of that minority. It constitutes a violation of the Fourteenth and Fifteenth Amendment guarantee that all citizens and classes of citizens be afforded some meaningful participation in the election process, not just the right to cast a vote. David v. Garrison, supra at 925. With the cure uncertain, in our federalist system of government federal courts should be loath to interject themselves, into a state-created municipal electoral system and to replace it with a radically different scheme unless the Constitution clearly dictates that the existing system is unlawful.[4]1312 Hendrix v. Joseph, supra at 1271. See Turner v. McKeithen, 490 F.2d 191, 197, fn. 24 (5th Cir. 1973); Howard v. Adams County Bd. of Supervisors, 453 F.2d 455, 458 (5th Cir. 1972) cert. denied 407 U.S. 925, 92 S.Ct. 2461, 32 L.Ed.2d 812 (1972). On the other hand, a majority bloc is not entitled to continue to elect officials who simply ignore the governmental interest of a substantial portion of the population. Consequently, rather than provide a specific definition of dilution, the courts have simply stated that it occurs when the minority voters have no real opportunity to meaningfully participate in the political process. In determining whether unconstitutional dilution exists and enfranchising a diluted minority, care must be taken not to disenfranchise the majority, because this results in merely replacing one evil with another. It also compartmentalizes the electorate, reinforces the bloc voting syndrome and prevents minority class members from exercising any influence in the political system beyond the bounds of their single-member wards, except with reference to the election of a mayor who obviously should be permitted to run from the city at-large, since he is the head of city government. In order to prevail, plaintiffs must establish by a preponderance of the evidence that the at-large system of election complained of operates so as to make the vote of black residents less than equal to the vote of white residents, thereby denying to the former effective participation in the political process of the city government. Reynolds v. Sims, 377 U.S. 533, 565, 84 S.Ct. 1362, 1383, 12 L.Ed.2d 506, 529 (1964). However, as previously emphasized, the en banc court in Kirksey v. Board of Supervisors, supra, held that where there had been a past record of racial discrimination and official unresponsiveness which required the conclusion that until a short number of years past there had been a denial of equal access to the political processes, the defendants had the burden to come forward with evidence that enough of the incidents of the past had been removed and the effects of past denial of access dissipated, with the result that there is presently equality of access. For the reasons previously stated, this Court finds that the defendants have met this burden. In making this determination, all factors must be considered, and those which imply a non-diluted system cannot be ignored. Hendrix v. Joseph, supra at 1270. In the case sub judice, although there is admittedly a past history of racial discrimination, nevertheless enough incidents of the past have been removed and the effect of past denial of access have been dissipated with the result there is presently equality of access and effective and meaningful participation of blacks in the electoral or political process that exists in the City of Jackson under the plan or form of government being attacked herein. The plaintiffs have likewise failed to carry their burden of proving what this Court considers one of the most important of all the Zimmer factors, unresponsiveness to the needs of black Jacksonians. The importancy of this factor has been highlighted by the Fifth Circuit's reference to it as "momentous", Blacks United v. City of Shreveport, supra at 254, and as the sine qua non in Nevett II, supra at 223-224, fn. 19: Showings of unresponsiveness and lack of access make a strong dilution case. The capacity of a governing body to respond to the needs of its constituency is, in large measure, what makes that body representative. See H. Pitkin, The Concept of Representation 233 (1972). Ideally, electoral processes are designed to provide an institutional and periodic method of guaranteeing governmental responsiveness. "Our concern with elections and electoral machinery, and particularly 1313 with whether elections are free and genuine, results from our conviction that such machinery is necessary to insure systematic responsiveness." Id. at 234. Thus, if representatives are unresponsive to the needs of a racial group apparently because some stages of the electoral process diminish the group's input, the inference that the processes are maintained with the purpose to discriminate can fairly be drawn. "[At-large] districts, it would seem, violate the Equal Protection Clause, not because they over-represent or underrepresent pure and simple, but because they do that in a context where all stages of the electoral processes have been effectively closed to identifiable classes of citizens, making the political establishment `insufficiently responsive' to [that classes] interests." Casper, Apportionment and the Right to Vote: Standards of Judicial Scrutiny, 1973 Sup.Ct. Rev. 1, 28. See also Hendrix v. Joseph, 559 F.2d 1265, 1269 (5th Cir. 1977). In addition, as pointed out by the court in the above quoted footnote, if a lack of responsiveness is shown, a strong dilution case is made. Thus the resolution of this issue in the defendants' favor, while not of itself determinative of the ultimate issue in this case, has substantial probative force on the question of whether the present plan of government is being purposefully maintained for impermissible and discriminatory reasons, as will be discussed more fully below, and weighs heavily against an inference of intentional discrimination, because the incumbents are not visibly exploiting their majority status to the detriment of their minority constituents. See Nevett II, supra at 228. The named plaintiff, Henry J. Kirksey, candidly testified to the effect that white candidates for election to the Jackson City Council actively seek the black vote, and that this is what makes them responsive to the needs of blacks. In view of the large percentage of black voters in the city, which can really be the balance of power in municipal elections in Jackson, this Court agrees with Mr. Kirksey's astute observation. On the other hand, there is no extant state policy which justifies the maintenance of the municipal plan in question, and all four of the enhancing factors, a large district, majority requirement, anti-single shot voting provision and the absence of a geographical sub-district residency requirement, weigh in favor of the plaintiffs. The existence of a tenuous state policy supported by the enhancing factors does not aggregate to prove a racially motivated dilution of black voting strength in the City of Jackson when weighed against this Court's finding that the other three primary Zimmer factors favor the defendants, namely the absence of lingering effects of past discrimination which precludes the effective participation of blacks in the electoral system today, open and equal access to the election process by blacks in Jackson, and the existing and systematically and rapidly increasing responsiveness of the city council to the needs and interests of black Jacksonians. V. MAINTENANCE OF THE PRESENT FORM OF CITY GOVERNMENT It is now well established that neither Washington v. Davis, supra, nor any other authority requires the plaintiffs in a voting dilution case to prove discriminatory intent in the enactment of a challenged plan, an element this Court has previously discussed and found not to have been proved. Where the plan is maintained, either through action or inaction, for the purpose of excluding minority input or devaluing the votes of minorities, the necessary intent is established. Nevett II, supra at 222; Bolden, supra at 245-246; Thomasville Branch of N. A. A. C. P. v. Thomas City, Ga., supra at 258. As was noted in Nevett II a remotely enacted plan that was adopted without racial motivations may become a vehicle for the exclusion of minority input because intervening circumstances cause the plan to work that way. Where evidence of discriminatory intent is lacking in the enacting process as here, the Zimmer criteria become acutely relevant to the 1314 question of whether the neutral plan is an "instrumentality for carrying forward patterns of purposeful and intentional discrimination." Kirksey v. Board of Supervisors, supra at 147; Nevett II, supra at 222. Because of our foregoing findings of fact on the Zimmer sub-issues and the aggregate of the issues, we find and conclude that the plaintiffs have failed to prove that intentional discrimination was a motivating factor in the maintenance of the present electoral system or plan. Significantly, as the Court has noted previously in this Opinion, the question of whether to maintain the present form of government in the city, or to change to the mayor-council form under which each council member would be elected from seven single-member districts or wards [which cities such as Jackson are empowered to do pursuant to Miss.Code Ann. § 21-8-1, -47 (Supp.1976)], was submitted to a city-wide referendum vote in February, 1977, and resulted in a majority vote of the electorate favoring retaining the present form of city government, despite the fact that the then Mayor Russell Davis openly and actively supported the proposed change. VI. CONCLUSION Under the facts of this case, the plaintiffs have failed to prove that the claimed dilution was the result of any invidious discriminatory purpose or intent. In the aggregate the Zimmer criteria do not point to intentional discrimination as a motivating factor in either the enactment or maintenance of the present form of municipal government and the present electoral process in Jackson, Mississippi. Accordingly, the defendants shall prepare and present to this Court a Final Judgment conforming with this Memorandum Opinion, approved as to form by counsel for all parties, dismissing this suit with prejudice at the cost of the plaintiffs. NOTES [1] On June 24, 1977 this Court certified this as a class action pursuant to F.R.Civ.P. 23(a) and (b), the class being defined as "all black citizens and black registered voters of the City of Jackson, Mississippi." [2] The commission form of government under Mississippi law is defined in Miss.Code Ann. §§ 21-5-1, -23 (1972). [3] Although these individual defendants will remain as defendants in their individual capacities, their successors in office will be substituted as defendants in their official capacities, pursuant to F.R.Civ.P. 25(d). [4] It is highly significant that Mr. Justice Rehnquist in a Separate Opinion, joined by the Chief Justice, and Justice Stewart and Powell, in Wise v. Lipscomb, ___ U.S. ___, 98 S.Ct. 2493, 57 L.Ed.2d 411 (1978) stated: . . . While this Court has found that the use of multi-member districts in a state legislative apportionment plan may be invalid if "used invidiously to cancel out or minimize the voting strength of racial groups," White v. Regester, 412 U.S. 755, 765, 93 S.Ct. 2332, 2339, 37 L.Ed.2d 314 (1973), we have never had [the] occasion to consider whether an analogue of this highly amorphous theory may be applied to municipal governments. Since petitioners did not preserve this issue on appeal we need not today consider whether relevant constitutional distinctions may be drawn in this area between a state legislature and a municipal government. I write only to point out that the possibility of such a distinction has not been foreclosed by today's decision. However, this Court is bound to follow the existing law of the Fifth Circuit, which has applied the voter dilution theory to municipal governments.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2266520/	461 F.Supp. 622 (1978) Michael F. ARMSTRONG et al., Plaintiffs, v. Clovis McALPIN et al., Defendants. No. 76 Civ. 4155 (HFW). United States District Court, S. D. New York. December 5, 1978. Gordon Hurwitz Butowsky Baker Weitzen & Shalov, New York City, for plaintiffs. Chadbourne, Parke, Whiteside & Wolff, New York City, for defendants HS Equities, Inc. by Edward C. McLean, Jr., Edwin D. Scott, Lisa A. Kennedy, New York City, of counsel. Irving Rader, New York City, for defendant EHG Enterprises, Inc., Ariel E. Gutierrez and Enrique H. Gutierrez. Leboeuf, Lamb, Leiby & MacRae, New York City, for defendant Bradford Trust Co. by Christopher C. Herman, New York City, of counsel. Lunney & Crocco, New York City, for Clovis McAlpin and Capital Growth Real Estate Fund, Inc. by J. Robert Lunney, Michael J. McAllister, James J. DeLuca, New York City, of counsel. MEMORANDUM DECISION WERKER, District Judge. Defendants Clovis McAlpin, Capital Growth Real Estate Fund, Inc., HS Equities, Inc., Bradford Trust Co., EHG Enterprises, Inc., Ariel E. Gutierrez and Enrique H. Gutierrez move to disqualify counsel for the Receiver, the law firm of Gordon Hurwitz Butowsky Baker Weitzen & Shalov (the "Gordon firm") in this securities fraud 623 derivative suit.[1] The basis of the motion is that a partner in the firm, Theodore Altman, participated in and supervised the Securities and Exchange Commission ("SEC") investigation of Capital Growth Fund ("Growth Fund") and related entities while employed as Assistant Director of the Division of Enforcement of the SEC. The SEC investigation led to an enforcement proceeding and ultimately to the instant action. FACTS Theodore Altman was employed by the SEC from approximately October of 1967 to October of 1975, when he joined the Gordon firm. During the three years preceding his departure from the SEC Altman, as Assistant Director of the Division of Enforcement, played a supervisory role in various investigations. One of those investigations, In the Matter of Clovis W. McAlpin, Capital Growth Fund, Capital Growth Company, S. A., New Providence Securities Ltd. and New Providence Securities Ltd., S. A. (SEC File No. NY-5035) involved certain defendants in the present action. Altman's participation therein commenced in late 1973 and continued through 1974. The culmination of the SEC investigation was the issuance by Judge Stewart of an injunction against the commission of securities law violations by Growth Fund and others in SEC v. Capital Growth Company, S. A. (Costa Rica), 74 Civ. 3779 (CES). According to Altman, while he was employed at the SEC staff attorneys reported to him on the progress of the Growth Fund investigation and litigation, and he in turn rendered advice and directions. He signed documents and correspondence addressed to defendant Clovis McAlpin but alleges he was not involved in the matter on a day-to-day basis. On September 24, 1974 Judge Stewart, pursuant to the SEC's request, appointed a Receiver, Michael Armstrong, in the Capital Growth Company action. In March of 1976 Altman was informed by another member of the Gordon firm that the Receiver had asked that firm to act as litigation counsel in the Growth Fund matter, and to commence litigation here and abroad on behalf of the Receiver to recover assets of Growth Fund and related entities. Both the Gordon firm and the Receiver were aware of Altman's involvement in the Growth Fund matter while he was employed at the SEC. They concluded that although Altman himself was disqualified by virtue of his former SEC involvement, the Gordon firm was not disqualified provided that Altman was isolated from the case pursuant to the standards in Formal Opinion 342 of the American Bar Association (Nov. 24, 1975)[2] and Opinion No. 889 of the Association of the Bar of the City of New York (Nov. 19, 1976).[3] Therefore on or about April 30, 1976 the Receiver formally applied to Judge Stewart to retain the Gordon firm as litigation counsel. The application disclosed Altman's own disqualification and revealed that two other partners, David M. Butowsky and Franklin B. Velie, would conduct litigation but that Altman would not. The application was approved by the court. Before instituting any Growth Fund litigation, Butowsky wrote to the SEC to obtain its comment or waiver of any possible conflict of interest problems on the Gordon firm's part. The agency replied through Marvin E. Jacob, Associate Regional Administrator of the New York Regional Office. Jacob stated that there appeared to be no adverse interests between litigation counsel and the Receiver on the one hand, and the SEC on the other, and no appearance of impropriety. He continued that if Altman were screened from participation in the Growth Fund matter, the SEC did not believe that the Gordon firm would be disqualified 624 from acting as litigation counsel to the Receiver. The Gordon firm has outlined how Altman has been screened. Altman is excluded from participation in the action, has no access to relevant files and derives no remuneration from funds obtained by the firm from prosecuting this action. No one at the firm is permitted to discuss the matter in his presence or allow him to view any document related to this litigation, and Altman has not imparted any information concerning Growth Fund to the firm. Defendants argue that Altman's knowledge of this matter must be imputed to all members of the firm and that any screening process is insufficient. Altman himself is concededly disqualified by Disciplinary Rule 9-101(B) of the American Bar Association Code of Professional Responsibility (the "Code").[4] That rule precludes private employment in any matter in which one has had substantial responsibility during prior public employment. Based upon this rule, it is defendants' position that disqualification of the entire firm is the only way to "avoid even the appearance of professional impropriety" mandated by Canon 9 of the Code. They further urge that this court be guided by case law containing language to the effect that what one partner cannot do, his firm cannot do. E. g., Laskey Bros, Inc. v. Warner Bros. Pictures, Inc., 224 F.2d 824, 826 (2d Cir. 1955), cert. denied, 350 U.S. 932, 76 S.Ct. 300, 100 L.Ed. 814 (1956); Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384, 1387 (2d Cir. 1976); Handelman v. Weiss, 368 F.Supp. 258, 264 (S.D.N.Y.1973); see Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225, 229 n.10 (2d Cir. 1977). DISCUSSION The issue of whether the disqualification of one partner must be imputed to his entire law firm has been considered in detail by both the American Bar Association (the "A.B.A.") and the Ethics Committee of the Association of the Bar of the City of New York (the "Association") in the above mentioned opinions. This consideration was apparently precipitated by the adoption of Disciplinary Rule 5-105(D) in 1974. That rule provides that "[i]f a lawyer is required to decline employment or to withdraw from employment under a disciplinary rule, no partner or associate, or any other lawyer affiliated with him or his firm, may accept or continue such employment." D.R. 5-105(D) effectively automatically disqualified an entire law firm when one partner was disqualified, like Altman, under D.R. 9-101(B). The ABA noted in its Formal Opinion No. 342 that "[p]ast government employment creates an unusual situation in which an inflexible application of D.R. 5-105(D) would actually thwart the policy considerations underlying D.R. 9-101(B)." 62 A.B.A. Journal 517, 520 (1975). Therefore, the A.B.A. Committee continued, the application of D.R. 5-105(D) in a situation where the former government employee is disqualified through D.R. 9-101(B) should be analyzed in light of certain policy considerations such as the possibility of an unreasonable limitation on the recruitment of government attorneys, preservation of confidential information, the avoidance of an appearance of impropriety, and the discouraging of the handling of government matters in ways that may encourage subsequent private employment in those same particular matters. Id. The Committee concluded that the policies underlying D.R. 9-101(B) could be realized without a blanket disqualification rule by applying D.R. 5-105(D) to disqualify a firm where the disqualified individual has not been screened to the satisfaction of the agency concerned. The Committee thus took the position that, absent an appearance of significant impropriety, a government agency could waive D.R. 5-105(D) when satisfied that screening procedures effectively isolated the individual firm member who had previously dealt with the same matter. 625 The other opinion addressed to the instant issue is No. 889 of the Association, 31 The Record 552 (1976). There, the Association's Ethics Committee, like the A.B.A. Committee, rejected any absolute rule of disqualification of a firm due to an individual member's disqualification under D.R. 9-101(B). Instead, the Committee for the Association adopted the position that "where a lawyer who is himself disqualified under D.R. 9-101(B) can be effectively isolated from the handling of a matter by his partners and associates, and where this isolation is sufficient to avoid [an] appearance of impropriety, then the disqualification should not extend to the lawyer's partners and associates." 31 The Record at 566. The Committee recognized, however, that situations may arise where the firm must be disqualified due to inadequate screening of the individual attorney, id. at 568, or an appearance of impropriety that simply cannot be removed by any degree of screening when the disqualified attorney's relationship with the matter in government was extremely close and significant. Id. at 571. In the instant case the SEC has voiced no objection to the Gordon firm's participation in this lawsuit. The court does not find this dispositive. The SEC is not a party to this action; additionally, it is not surprising that the SEC has no objection to the Gordon firm's representation of the Receiver since both the Receiver in this action and the SEC in the prior enforcement action appear to share the same interest rectifying the alleged misappropriation of assets of the Capital Growth companies. Thus the SEC cannot waive for defendants their objections to the qualification of plaintiffs' counsel here. Despite this, after carefully reviewing the facts of this case, the screening procedures employed to isolate Altman, and the affidavits, memoranda, and exhibits submitted by the parties, the court is satisfied that there is no actual impropriety and no appearance of impropriety under all the circumstances. Accordingly, the Gordon firm need not be disqualified. This case is dissimilar to Handelman v. Weiss, 368 F.Supp. 258 (S.D.N.Y.1973), relied upon by defendants. There the individual attorney, along with his firm, was actively prosecuting a securities fraud suit, the substance of which the individual had previously worked on as assistant to the trustee's attorney under the Securities Investors Protection Act of 1970. The court found from the documents before it that the attorney had formed a definite intent while working for the Securities Investor Protection Corporation to develop a subsequent suit against defendants. Thus the court viewed the attorney as being twice compensated for the same labors. 368 F.Supp. at 264 & n.11. Further, the court extended the individual's disqualification to the entire firm because there was "no reason to suppose that Salomon has not communicated his views of this case to his partners, and his knowledge must therefore be imputed to them." Id. In comparison, nothing before this court indicates that Altman, while employed by the SEC, formed an intent to prosecute a later action involving Growth Fund. Indeed, sworn affidavits reveal that he has never participated in any fashion whatever in the Gordon firm's representation of the Receiver, nor has he shared in the firm's income derived from prosecution of this action. And, unlike the Handelman case, Altman and his two partners Velie and Butowsky have attested under penalty of perjury that Altman has never discussed the action with other firm members. These statements are uncontradicted by defendants and provide a basis for not imputing Altman's knowledge to other members of the firm. Other authorities cited by defendant are also factually inapposite. Telos, Inc. v. Hawaiian Telephone Co., 397 F.Supp. 1314 (D.Hawaii 1975) involved a former government attorney who himself later actively participated in private litigation similar to a suit he had filed on behalf of the government. The same was true in General Motors Corp. v. City of New York, 501 F.2d 639 (2d Cir. 1974). Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir. 1976) involved a situation wherein the firm in which an attorney was a partner was suing a client of another firm where the same 626 attorney was also a partner. Similarly, Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225 (2d Cir. 1977) involved an issue of conflicting representation. Plaintiff's counsel was disqualified since it was in a position to obtain confidential information from another law firm representing the defendant Arthur Andersen. And Laskey Bros., Inc. v. Warner Bros. Pictures, Inc., 224 F.2d 824 (2d Cir. 1955) did not involve a former government employee but a two man law firm representing plaintiff where one partner had previously represented the defendants in similar litigation. After duly considering the case law and A.B.A. and Association opinions outlined above, the court finds that the proper screening of Altman rather than disqualification of the Gordon firm is the solution to the present dispute. The Receiver's retention of the Gordon firm has resulted in no prejudice to defendants, who attempt to paint a picture of the SEC providing discovery documents to plaintiffs' firm while denying them to defendants. The facts, as opposed to defendants' speculation, show that the SEC provided the Receiver with the documents in question prior to his retention of the Gordon firm. Velie affid. at 4. Further, the Receiver is prepared to provide any and all of this information to defendants upon a discovery request. There is nothing unfair or prejudicial about this discovery arrangement, and the court declines to view it as providing a basis for an appearance of impropriety. Further, it should be noted that if indeed anyone has been prejudiced to date it is the Receiver rather than the defendants due to the latter's dilatoriness in moving to disqualify counsel two years into this litigation. As Judge Gurfein observed in his concurring opinion in J. P. Foley & Co. v. Vanderbilt, 523 F.2d 1357 (2d Cir. 1975): "the attempt by an opposing party to disqualify the other side's lawyer must be viewed as a part of the tactics of an adversary proceeding. As such it demands judicial scrutiny to prevent literalism from possibly overcoming substantial justice to the parties." Id. at 1360. In conclusion, the court agrees with the view expressed in Kesselhaut v. United States, 555 F.2d 791 (Ct.Cl.1977) (per curiam) as to private retention of a firm in a matter wherein one member has had prior governmental experience: We share the view expressed in the above-mentioned Formal Opinion 342 that an inexorable disqualification of an entire firm for the disqualification of a single member or associate, is entirely too harsh and should be mitigated by appropriate screening such as we now have here, when truly unethical conduct has not taken place and the matter is merely one of the superficial appearance of evil, which knowledge of the facts will dissipate. Id. at 793. In refusing to disqualify plaintiffs' firm the court emphasizes that it finds this holding appropriate under all the circumstances of this particular case but recognizes that different facts might well compel a contrary result.[5] Defendants' motion is denied. All motions addressed to the second amended complaint *627 are ordered returnable on the thirtieth day from entry of this decision.[6] SO ORDERED. NOTES [1] Despite the fact that this action is two years old, this is the first time that defendants have raised the issue of disqualification of plaintiff's counsel. Delay or laches will not, however, prevent disqualification in a proper case. United States v. Standard Oil Co., 136 F.Supp. 345, 351 n.6 (S.D.N.Y.1955). [2] 62 ABA Journal 517 (1975). [3] 31 The Record 552 (1976). [4] In this circuit the Code of Professional Responsibility is regarded by federal and state courts as providing guidelines for professional conduct. Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225, 227 n.2 (2d Cir. 1977). [5] In evaluating all the facts of the present situation the court has considered the most recent submission of Clovis McAlpin and Capital Growth Real Estate Fund, Inc. There defendants attempt to show that Mr. Altman, while in private practice, worked on a matter involving an "EHG transaction" as attorney for special counsel to International Controls Corporation in International Controls Corp. v. Hogan & Hartson, 77 Civ. 5764 (RJW). Since the words "EHG transaction" are also used in the sixth, seventh, and eighth causes of action in the complaint pleaded in the instant action, defendants contend that Altman has not been totally screened from this suit at the Gordon firm. It suffices to note that an examination of the documents relating to the "EHG transaction" in International Controls Corp. v. Hogan & Hartson and a reading of the fraud causes of action concerning the "EHG transaction" in this suit reveal that the subject matter of each is distinct. Defendants' attempt to rebut Altman's affirmation that he has been fully screened from the prosecution of this action is therefore rejected. [6] A determination on a disqualification motion is directly appealable within this circuit. Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (2d Cir. 1974) (en banc); Allegaert v. Perot, 565 F.2d 246, 247 n.1 (2d Cir. 1977). Since an appeal from this decision will necessarily alter the briefing schedule for motions, defendants are directed to notify promptly this court and plaintiffs' counsel of intent, if any, to appeal to the Second Circuit.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265572/	491 A.2d 976 (1985) STATE v. Steven VILLANI. No. 84-156-C.A. Supreme Court of Rhode Island. April 11, 1985. 977 Arlene Violet, Atty. Gen., Marc DeSisto, Asst. Atty. Gen., for plaintiff. William F. Reilly, Public Defender, Barbara Hurst, Paula Rosin, Asst. Public Defenders, for defendant. OPINION KELLEHER, Justice. Mike's Diner was and is a source of salutary sustentation to those who find themselves in downtown Providence after dark. During the day the diner is parked on Rathbone Street in an area called Farmers' Market. Much of the diner's bill of fare is prepared in a nearby kitchen. As darkness approaches, the diner is towed by truck from Rathbone Street and ultimately parked alongside the curb of one of downtown's thoroughfares. The daily routine just described has taken place for many years. At approximately 7:15 p.m. on November 17, 1982, Joseph M. King (King) had a date for a game of pool somewhere downtown with his brother. King is one of the diner's short-order cooks. As was his habit, whenever King headed toward downtown Providence from his residence, he drove through the market area to see what might be going on at the kitchen. The diner was nowhere to be seen, but a car belonging to James Russell (Russell) was parked nearby. Russell was a part owner of the diner. King left his car and entered the kitchen with thoughts of sharing a chat with the boss. Immediately upon entering, he observed the body of Russell lying on the kitchen floor. The police were summoned, and the coroner's examination indicated that Russell had been shot three times, once in the abdomen and twice in the back. At one time defendant, Steven Villani (Villani), who was twenty-five years of age when Russell was murdered, had worked at the diner as a "counterperson." At a Superior Court jury trial, his mother-in-law told the jury of Villani's complaint that the diner's owners owed him back wages. She 978 also testified that her son-in-law had a gambling habit and that Villani and his wife and children resided at her home. Late in the evening of November 17, 1982, when the television station flashed news of the murder at Mike's Diner, she suspected that her son-in-law was the culprit; after disclosing her suspicions, he admitted his involvement in the incident. The next morning the mother-in-law talked to members of the Providence police department, a warrant for the arrest of Villani was issued, and at about 4 p.m. Villani was arrested by the Cranston police. He was subsequently taken by two Providence detectives from Cranston to Providence police headquarters; and in a signed, typewritten statement given to the police, Villani explained that he had gone to the diner's kitchen with specific intent to "rob Jimmy." When he entered the kitchen, he encountered the deceased. According to Villani's statement, Russell then approached him with a knife in hand, and the defendant thought he was about to be stabbed. Villani fired his gun, inflicting a stomach wound, and as Russell lay on the floor, he fired two more shots into the deceased's back. He took $700 or $800 in cash from the deceased's pants pocket and left the area. He then drove to a nearby racetrack where he lost the loot betting on the wrong greyhounds. At trial both detectives testified that after the typewritten statement had been executed, Villani told them that when he first entered the kitchen, he was wearing a mask, but after the first shot was fired, Russell grabbed the mask from Villani's face. Villani went on to explain that he fired the next two shots "to finish him off." He had borrowed the weapon, a .22-caliber pistol, from a friend on the pretext of eradicating a rat problem at his mother-in-law's home. Villani told the police that on a previous day he had driven to the kitchen, armed with the pistol, but then developed a case of "cold feet" and left the area. Approximately two months after Villani's arrest, a Providence County grand jury returned a three-count indictment which charged Villani with murder, robbery, and the illegal possession of the pistol. Subsequently, in September 1983 a Superior Court jury, after listening to six days of testimony, returned guilty verdicts as to all three charges. Later, the trial justice, after first denying Villani's motion for a new trial, imposed a life sentence on the murder conviction; a consecutive twenty-year sentence on the robbery conviction, with ten years to be served and the balance of the sentence being suspended, with Villani being on a probationary status during the ten-year suspension period; and a one-year sentence on the weapons charge, which was to be served consecutively with the life sentence and concurrently with the robbery sentence. In his appeal Villani raises three issues. He faults the trial justice for permitting the chief medical examiner to testify about the cause of Russell's death, to wit, "multiple gunshot wounds" and the circumstances surrounding that death, to wit, "homicidal." He also challenges the trial justice's admission of the typewritten statement given to the Providence detectives during Villani's interrogation. The final alleged error occurred when in his charge the trial justice defined felony murder. The first two errors merit little discussion. The same cannot be said for the third. Doctor William Q. Sturner, the state's chief medical examiner, testified at trial and, as noted earlier, gave his opinion concerning the cause and manner of Russell's death. Villani complains that the trial justice abused his discretion in permitting Dr. Sturner's testimony because the prosecutor failed to adequately qualify him as an expert. It is well-settled law that the qualification of an expert witness and the matters to which he may testify are considerations within the sound discretion of the trial justice, and a ruling in this area will not be disturbed on review absent a clear 979 abuse of discretion. State v. Ashness, R.I., 461 A.2d 659, 670 (1983). Prime considerations in determining whether a witness is qualified include evidence of the witness's education, training, employment, or prior experiences. Rhode Island's chief medical examiner, by the terms of G.L. 1956 (1979 Reenactment) § 23-4-5, is required to be a duly licensed "physician" and "a qualified pathologist, certified in anatomical pathology by the American Board of Pathology and who has had forensic training or experience." Doctor Sturner testified that he had been the state's chief medical examiner for 9 ½ years. We have no doubt that Dr. Sturner at the time of his appointment satisfied the statutory mandate and that his 9 ½ years of on-the-job training amply qualified him to express the opinions that he did. The thrust of Villani's motion to suppress the signed, typewritten statement and oral admissions made to two Providence detectives, Officers Guido Laorenza and Arnold Shone, revolves about a printed form used by the police. The form indicates that the suspect was advised of his four Miranda rights; that he was not required to give any statement; and that he could have an attorney present during any confrontational lineup. The last two items on the form, numbered 7 and 8 respectively, are admissions by the suspect in this case Villani that, having been informed of his constitutional rights, he (1) understood those rights and agreed to give a statement and (2) did not desire the presence of any private or appointed counsel while he was giving his statement. The form indicates that Villani initialed each one of the eight statements that appear there. It is also quite clear that a big X has been drawn through items 7 and 8. Evidence taken at the suppression hearing indicated that when the two detectives encountered Villani at the Cranston police station, Detective Laorenza was greeted by Villani with "Guido, what's up?" The testimony indicated that Detective Laorenza had met Villani working as a counterman in at least two of the restaurants he patronized. The time between the beginning and the conclusion of the taking of the statement was approximately 3 1/2 hours. Detective Laorenza acknowledged that his speed as a typist left much to be desired. At one point when Villani became concerned that someone in the station was listening in on his telephone conversations, to accommodate the suspect, he was taken to an outside telephone booth where he made another one of his estimated six to ten calls. Both detectives made it clear that at the station Villani had no difficulty with six of the eight items on the form. However, he was concerned with item 8's reference to the lack of any desire to have an attorney present at the time the statements were given. The detectives explained that Villani's concern was whether, by initialing item 8, he was forfeiting any right to have an attorney in court. They then explained to Villani that he could have one in court or he could have one "right now," and if he desired, a representative of the public defender's staff would be summoned to the station. Detective Laorenza asked Villani if it would make him "feel comfortable" if he crossed out items 7 and 8, and after getting an affirmative answer, the Xs were added. However, both officers were convinced that Villani was well aware that if he desired an attorney at any time during the statement-taking, his request would be honored. The record additionally reveals that Villani successfully suspended the statement taking a number of times. The detectives were more than responsive to his numerous demands to use the phone, and, upon request, he was provided soft drinks, snacks, and the use of bathroom facilities. In denying the motion to suppress, the trial justice found that the state had proved by clear and convincing evidence that Villani had indeed made a knowing, intelligent, and voluntary waiver of his Fifth Amendment rights. This court, in reviewing such a denial, examines the evidence in the light most favorable to the 980 state to determine whether the trial justice's findings were clearly wrong. State v. Verlaque, R.I., 465 A.2d 207, 210 (1983); State v. Benton, R.I., 413 A.2d 104, 109 (1980). We have examined the record in light of the rule set forth above and do not hesitate to affirm the denial of Villani's suppression motion. In his instructions to the jury, the trial justice charged on first-degree murder, second-degree murder, and felony murder. He explained to the jury that a guilty verdict of first-degree murder could be returned if the panel found an unlawful killing done with malice aforethought and in a willful, deliberate, malicious, and premeditated manner. He then defined second-degree murder. The difference between first-degree, premeditated murder and second-degree, premeditated murder is the time lag between the formation of the homicidal intent and the killing itself. If that intent is more than momentary, the murder is first degree; if the intent had a momentary existence, a finding of murder in the second degree is warranted. State v. Clark, R.I., 423 A.2d 1151, 1161 (1980). When he discussed felony murder, the trial justice told the jury that if it was to render a guilty verdict under the felony-murder theory, it must find that all the elements of first-degree murder were established beyond a reasonable doubt and also that the killing occurred while Villani was robbing or attempting to rob Russell. Villani's trial counsel objected to the trial justice's conception of felony murder and lodged another objection to his failure to give any of the requests to charge on felony murder that had been submitted to the court by the defense. There is merit in this portion of Villani's appeal. Our homicide statute, G.L. 1956 (1981 Reenactment) § 11-23-1, defines murder as the "unlawful killing of a human being with malice aforethought." In its pertinent provisions, the statute goes on to define first-degree murder as "[e]very murder perpetrated by poison, lying in wait, or any other kind of wilful, deliberate, malicious and premeditated killing, or committed in the perpetration of, or attempt to perpetrate any arson * * * rape, burglary or robbery * * ." In this jurisdiction the felony-murder theory, simply stated, is that any homicide committed while perpetrating or attempting to perpetrate any of the enumerated felonies is first-degree murder. Such a homicide acquires first-degree-murder status without the necessity of proving such elements as premeditation and deliberation. It has been said that the intent necessary to sustain a murder conviction is implied by operation of law even though the defendant may not have had any intent to kill. People v. Gladman, 41 N.Y.2d 123, 125, 390 N.Y.S.2d 912, 914, 359 N.E.2d 420, 422 (1976). Similar sentiments have been expressed in Newton v. State, 280 Md. 260, 268-69, 373 A.2d 262, 267 (1977), where the Maryland Court of Appeals noted that in a felony-murder prosecution proof of every element of the underlying felony establishes the element of malice that is necessary for murder, and there is no need to prove the usual elements of deliberation and premeditation. See also, 2 Wharton's Criminal Law § 145 at 204 (14th ed. 1979). We will eschew reliance on any such legal niceties as expressed in Gladman and Newton and rule that felony murder is murder in the first degree simply because the Legislature has said so. A first-degree-murder conviction, be it of a willful, malicious, premeditated killing or a felony murder, calls for the mandatory imposition of at least a life sentence. It is clear that the trial justice in the felony-murder portion of his charge erred.[1] Villani's appellate counsel also reminds 981 us that in State v. Innis, 120 R.I. 641, 657-58, 391 A.2d 1158, 1167 (1978), this court stressed that the constitutional guarantee against double jeopardy prohibits the conviction of a defendant of both murder in the first degree under a felony-murder theory and the underlying felony. We acknowledge the holding in Innis and also point out that the court in Innis stressed the necessity that where the jury is charged as to its ability to return a first-degree-murder verdict based either on willful, deliberate, premeditated murder or on a felony-murder theory, the trial justice must take pains to determine the basis for the jury's finding. Thus, we now turn to the record to determine whether the trial justice complied with this dictate. The trial justice prepared a document that was to be used by the foreman when he announced the jury's verdict. The document was entitled "Jury Verdicts"[2] and posed five different questions, each of which required checking either a "guilty" or a "not guilty" response. The first question was directed to the charge of first-degree, premeditated murder, and the response checked was "guilty." The second inquiry was directed to felony murder. However, no response was possible to this inquiry because the jury was directed that if its response to the first inquiry was guilty, it should skip questions 2 (felony murder) and 3 (second-degree murder) and go on to questions 4 and 5, which dealt with, respectively, the robbery and weapons charges. The jury did as ordered and checked "guilty" responses to questions 4 and 5. The responses to questions 1 and 4 clearly indicate that the jury found Villani guilty of committing a deliberate, premeditated murder and a robbery. Having in mind the erroneous charge as well as the composition of the jury-verdict form with its foreclosure of any response to the felony-murder inquiry, we are truly perplexed as to what actually transpired in the jurors' minds when they considered the evidence in the light of the charge. It is conceivable that the jurors, by answering "guilty" to inquiry numbered 1, which sets forth the elements of first-degree, premeditated murder, and responding "guilty" to query numbered 4, were of the belief, in light of the trial justice's erroneous instruction, that they were actually finding Villani guilty of felony murder. Since there is doubt about the actual intent of the jury, we shall, in light of the admonition in State v. Innis, avoid the risk of a violation of the constitutional guarantee against double punishment for the same offense by following the path taken by the Maryland Court of Appeals in a somewhat similar situation in Newton v. State and affirm the murder conviction on the assumption that the jury's verdict was based on the felony-murder theory and also affirm the weapons conviction, but order that, upon remand, the robbery conviction be vacated and dismissed. Accordingly, the defendant's appeal is denied in part and sustained in part, the judgments of conviction as they relate to the murder and weapons charges are affirmed, and the judgment of conviction entered on the robbery count is vacated and dismissed. The case is remanded to the Superior Court for further proceedings consistent with this opinion. APPENDIX STATE OF RHODE ISLAND : : v. : C.A. No. 83-0204 : STEVEN VILLANI : JURY VERDICTS 1. As to the charge in the Indictment charging defendant, Steven Villani, with the unlawful, wilful, deliberate, *982 malicious and premeditated killing of James Russell with malice aforethought on or about November 17, 1982, how do you find the defendant? Check One NOT GUILTY ____ GUILTY &check; 2. If your verdict is "Guilty" as to question 1 above, do not answer this question nor question 3 and go on to answer questions 4 and 5. If however your verdict is "Not Guilty", how do you find defendant on the offense of the unlawful killing of James Russell committed in the perpetration or attempted perpetration of a robbery on or about November 17, 1982? Check One NOT GUILTY ____ GUILTY ____ 3. If your verdict is "Not Guilty" in questions 1 and 2 above, how do you find the defendant on the offense of second degree murder of James Russell on November 17, 1982? Check One NOT GUILTY ____ GUILTY ____ 4. If your verdict in question 2 above is "Guilty", do not answer this question. If however your verdict is "Not Guilty" to question 2, how do you find the defendant on the charge in the Indictment of robbery of James Russell on November 17, 1982? Check One NOT GUILTY ____ GUILTY &check; 5. As to the charge in the indictment charging defendant, Steven Villani, with carrying a pistol without a license on November 17, 1982, how do you find the defendant? Check One NOT GUILTY ____ GUILTY &check; /s/ Foreman/Forelady NOTES [1] The trial justice's insistence on proof of a first-degree, premeditated killing as well as proof of a robbery might be attributable to certain language found in State v. Innis, 120 R.I. 641, 391 A.2d 1158 (1978). In speaking of the felony-murder theory, the court observed: "The law is clear in cases of felony murder. In order to obtain a conviction, the state must prove all of the elements of the underlying felony, in addition to the other elements of murder, beyond a reasonable doubt." Id. at 656, 391 A.2d at 1166. Cited as support for this proposition was Newton v. State, 280 Md. 260, 268-69, 373 A.2d 262, 266-67 (1977). What the Maryland Court of Appeals actually said was this: "Therefore, to secure a conviction for first degree murder under the felony murder doctrine, the State is required to prove the underlying felony and the death occurring in the perpetration of the felony." Id. at 269, 373 A.2d at 267. [2] See Appendix.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265583/	491 A.2d 572 (1985) In re DEAN A. Supreme Judicial Court of Maine. Argued November 13, 1984. Decided April 26, 1985. Suian C. Thiem (orally), Lincolnville, for plaintiff. Diane E. Doyen, Asst. Atty. Gen., Human Services Div. (orally), Augusta, for defendant. Moser & Mailloux, Randolph Mailloux (orally), Belfast, Guardian Ad Litem. Before McKUSICK, C.J., and NICHOLS, ROBERTS, VIOLETTE, WATHEN and SCOLNIK, JJ. 573 WATHEN, Justice. Ruth A., the mother of Dean A., appeals from a judgment of the Superior Court (Waldo County) affirming an order of the District Court (Belfast) terminating her parental rights pursuant to 22 M.R.S.A. § 4055 (Supp.1984-1985).[1] On appeal she contends that the District Court judgment must be vacated because that court employed an inappropriate standard of proof. Alternatively, she argues that the evidence is insufficient to establish the grounds for termination. We find no error and we deny the appeal. I. Dean A. was born February 12, 1978, as the first son of his parents' marriage. When he was about four months old, he was severely injured by his father. As a result of this incident, in July of 1978, the Department of Human Services (the Department) successfully petitioned for an order for protective custody and Dean A. was placed in a foster home, where he remains to this date. The father continued to reside in the family home until August of 1979 when he was sentenced to prison for the assault on his son. Ruth A. lived with her husband throughout this period of time and conceived two more sons with him before he entered prison. The father remained incarcerated until March of 1981 and during his incarceration she visited him regularly and attended counseling sessions aimed at reuniting with him. After her husband was released from prison and had lived with her for about a week, she asked him to leave because of his temper and his lack of employment. In December of 1981 she obtained an order against him protecting her from abuse and, finally, in July of 1982 she obtained a legal separation.[2] In June of 1981 Ruth A. filed a petition seeking the exclusive care and custody of Dean A., which petition was continued from day to day to permit the psychological evaluation of Ruth A. and her three other children. Ultimately, her petition was consolidated with the Department's petition for termination of parental rights. The District Court granted the petition for termination and the Superior Court affirmed. It is this order which forms the basis for the mother's appeal. II. Initially, the mother argues that the District Court applied the wrong standard of proof. Under 22 M.R.S.A. § 4055(1)(B)(2) the grounds for termination of parental rights are required to be established by clear and convincing evidence. The mother notes that the District Court judgment in this case, was issued prior to our decision in Taylor v. Commissioner of Mental Health and Mental Retardation, 481 A.2d 139 (Me.1984) overruling Horner v. Flynn, 334 A.2d 194 (Me.1975). It is her position that the District Court found the grounds for termination on the basis of a preponderance, supported by a better quality of evidence, rather than through the application of an intermediate standard of proof as required by Taylor. In Taylor this Court abandoned the formulation of clear and convincing evidence announced in Horner. We adopted the definition, "by which the party with the burden of persuasion may prevail only if he can `place in the ultimate factfinder an abiding conviction that the truth of [his] factual contentions are "highly probable".'" Taylor v. Commissioner of Mental 574 Health and Mental Retardation, 481 A.2d at 153, quoting Colorado v. New Mexico, ___ U.S. ___, ___, 104 S.Ct. 2433, 2438, 81 L.Ed.2d 247 (1984). The Horner formulation was found to be inadequate, not because it failed to convey to the fact finder the necessity for a higher degree of certainty, but because it removed the "higher standard of proof aspect of the lower court's factual findings from appellate review." Id. at 153. No prejudice will result to the mother in the present case, if the court's findings are subjected to the enhanced appellate scrutiny afforded by Taylor. III. A consideration of the merits of this appeal presents an all too familiar factual setting. Dean A. was severely traumatized, both physically and psychologically, at the age of four months. Through the process of protective custody he has now lived with his foster parents for more than six years with only occasional visits from his natural mother. The District Court found that Dean A. has made great developmental progress while living with his foster parents, whom he regards as his natural parents. He is loved and well cared for, and the foster parents wish to adopt him. The court found further, based on expert testimony, that to remove Dean A. from the home would be an extremely traumatic experience for him, likely to result in developmental regression of serious magnitude. The court concluded that the mother is unable to protect her son from jeopardy "because the bonding which has developed between Dean and his foster parents makes his removal from the home a threat to his health and welfare by mental injury or impairment." Finding that the circumstances were unlikely to change in a reasonable time, and that termination was in the child's best interest, the court ordered termination. Understandably, the mother contends that the child is no longer in jeopardy. She admits that in the past she was unable to protect her son from his father, but with the removal of the husband from the home and the legal separation, she argues that the risk is no longer present. She contends that, in reality, the court found only that her son's best interests would be served if he stayed with his foster parents, not that he would be in jeopardy if returned to her. In her view, the jeopardy which would result from reunification results from the prolonged term of foster care. She argues the Department is using her lack of parenting resources as a cover for denying reunification on the actual ground that she is poor and the foster parents are middle class. If this were true, her point would be well taken. In the absence of the statutory grounds, the child's relative economic advantage in the foster home provides no basis for terminating the rights of the natural parents, no matter how unfortunate their circumstances might be. We have all witnessed many examples of exemplary parenting in what would appear to be economically disadvantaged homes. It is not possible, however, for this Court to accept the contention that the father is the sole source of jeopardy. Such a view would be at odds with the law and would fail to accommodate the complex of facts presented in this case. Jeopardy includes not only the threat of serious physical injury but also "[s]erious mental injury or impairment, evidenced by severe anxiety, depression or withdrawal, untoward aggressive behavior or similar dysfunctional behavior; ...." 22 M.R.S.A. § 4002 (10)(B). Each of the mental health professionals who examined Dean A. testified that he could suffer serious psychological injury if he were taken from his foster home and returned to his mother. One of the psychiatrists testified expressly that jeopardy would result not only because Dean A. had grown attached to his foster parents, but also because he has special needs resulting from the history of abuse and inadequate parenting. The witness testified, and the court found that the *575 mother was incapable of meeting the special needs of Dean A. In short, the District Court found that this youngster had been severely traumatized and that reunification with the mother would involve a substantial risk of permanent injury. Under optimum circumstances, the likelihood of a successful reunification was found to be uncertain. The court concluded that the mother's circumstances fell "far short of the optimum" and that her "limitations in understanding and ability would almost certainly doom any future attempted reunification effort." The record before us adequately supports the conclusion that it is highly probable that the mother is unable to protect Dean A. from the jeopardy resulting from the incident of abuse early in his life and unable to fill the special needs produced by that incident. The entry is: Judgment affirmed. All concurring. NOTES [1] The father of Dean A. was a party before the District Court, and the order also terminated his parental rights. Prior to the hearing in Superior Court the father withdrew his appeal with leave of court and his case is not before us. [2] The District Court found that the father had a long history of psychiatric disorders and was likely to exhibit violent behavior under stress. The father was diagnosed as suffering from schizophrenium disorder and anti-social personality. Because of his failure to participate in counseling his prognosis was very unfavorable. The father's continued presence in the home and his anticipated return after serving his sentence, hindered the Department's reunification efforts during the first two years.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2266552/	461 F.Supp. 760 (1978) UNITED STATES of America v. MORTON-NORWICH PRODUCTS, INC., a corporation, trading and doing business as Norwich Pharmacal Company, and James J. Mahoney, Defendants. No. 75-CR-114. United States District Court, N. D. New York. August 15, 1978. 761 762 Paul V. French, U.S. Atty., Syracuse, N.Y., Thomas S. Brett, Arthur E. Korkosz, U.S. Dept. of Justice, Washington, D.C., Eric M. Blumberg, United States Food & Drug Administration, Washington, D.C., for plaintiff. Davis, Polk & Wardwell, S. Hazard Gillespie, Paul R. Koepff, Scott W. Muller, Virginia H. Worden, New York City, of counsel, Kleinfeld, Kaplan & Becker, Richard S. Morey, Washington, D.C., of counsel, for defendant Morton-Norwich Products, Inc. Bernard J. Schulte, Santo J. Costa, Norwich, N.Y., In-House Counsel for Norwich Pharmacal Co. Paul R. Shanahan, Syracuse, N.Y., for defendant James J. Mahoney. MEMORANDUM-DECISION AND ORDER MUNSON, District Judge. This is a criminal action involving three alleged violations of the Federal Food, Drug and Cosmetic Act, Title 21 U.S.C. §§ 301, et seq. Named as defendants in the Indictment are Morton-Norwich Products, Inc., a corporation doing business as Norwich Pharmacal Company, and James J. Mahoney, Vice-President of Operations for Morton-Norwich Products, Inc. Indictment Number 75-CR-114, which was handed up on or about September 30, 1975, alleges three violations by both defendants of the Food, Drug and Cosmetic Act, all of which violations involve the interstate shipment of adulterated drugs, in contravention of sections 301(a) and 303 of the Act, 21 U.S.C. §§ 331(a) and 333 respectively. Each count, in turn, alleges adulteration in two separate and distinct senses, one falling within section 501(c), 21 U.S.C. § 351(c),[1] in that the purity of the drugs involved differed from that purported, the other coming under section 501(a)(2)(B), 21 U.S.C. § 351(a)(2)(B),[2] contending that the drugs were not manufactured, processed, packaged or held in conformity with current good manufacturing practice so as to 763 assure that they would conform to the Food, Drug and Cosmetic Act requirements as to safety, and would have the strength and identity and meet the quality and purity characteristics which they purported to possess (The (a)(2)(B) violation will be referred to simply as CGMP). The products involved in the three counts of the Indictment are two lots, numbered 705553 (Counts I and II) and 710749 (Count III), of individually packaged gauze pads impregnated with Furacin (trade name for nitrofurazone), an antibacterial dressing. All of the products involved were manufactured at the defendants' sterile fill facility located in Norwich, New York. The gravamen of the charge of adulteration under 21 U.S.C. § 351(c) is that the pads, purported to be sterile according to the labeling found on the foil envelopes in which the pads were to be marketed, were not, in fact, sterile. The charge under 21 U.S.C. § 351(a)(2)(B) relates to several alleged violations of CGMPs, based heavily upon observations made during Food and Drug Administration (FDA) inspections of the defendants' sterile fill facility at Norwich, as well as the actual evidence of product contamination. This Court conducted a rather lengthy nonjury trial of this action, commencing on January 13, 1977, and ending on March 18, 1977. Following the trial, the Court reserved decision on the verdict. Since none of the parties requested that the Court make special findings, the general verdict was announced to the parties in open court. See Fed.R.Crim.P. Rule 23(c). To recapitulate, the Court found defendant Morton-Norwich guilty on Counts I and II and not guilty on Count III, and acquitted defendant Mahoney on all three charges. Prior to, during, and after the trial, the parties made numerous motions, upon many of which the Court reserved decision. This supplemental Opinion is being rendered in order to deal with those motions, and to hopefully clarify the verdict somewhat for the benefit of the parties. I. MOTION TO STRIKE GOVERNMENT'S TEST RESULTS Throughout this proceeding, the defendants have attacked, on three grounds, the introduction into evidence of the results of tests performed by FDA analysts on postshipment specimens of product taken from the two lots in issue. First, they claim that owing to the fact that a sterility test such as involved in this case is necessarily destructive of the product unit tested, and because sterility in a manufacturing situation cannot be guaranteed on an absolute basis, sterility is necessarily a probabilistic concept. The defendants have insisted that their representation of sterility was proper in this case as long as pre-shipment tests, validly conducted by them in accordance with the methods prescribed by the United States Pharmacopoeia (U.S.P.),[3] indicated sterility, despite the fact that later tests revealed the presence of contamination in one or more samples of previously untested product. Secondly, the defendants attack the relevance of post-shipment tests with respect to the issue of sterility at the time of shipment. Finally, the defendants have sought to impeach the results of the Government's tests, pointing to several deviations of the methods used from that prescribed by the U.S.P. A. Defendants' Representation of Sterility In support of their position on this score, the defendants, through various expert witnesses, have proffered definitions of the term "sterility" or "sterile," all of which reject the notion of sterility as being an absolute concept in favor of a definition dependent upon results of probabilistic testing performed upon random samples of the product in accordance with U.S.P. testing methods. Thus, the argument goes, an article is properly labeled as "sterile" if it has passed pre-shipment sterility tests performed 764 pursuant to the U.S.P. method, notwithstanding the fact that some untested product units are in fact contaminated. The Court rejects the notion that the term "sterile," as contained within the labeling which accompanies the defendants' product, is susceptible of such a narrow interpretation. This Court is of the opinion that the meaning to be ascribed to labeling which accompanies a product is, like beauty, properly in the eyes of the beholder, rather than the manufacturer. Cf. United States v. Article ... Consist. of 216 Carton. Bot., 409 F.2d 734 (2d Cir. 1969).[4] A customer who utilizes defendants' furacin gauze or batiste pads, whether he be a doctor, a nurse, or a layman, in this Court's estimation, will interpret the representation of sterility to mean the total lack of contamination of the product. To allow the defendants to avoid liability under the Act merely by testing samples of the product, which samples prove negative for contamination, would be to obliterate the standard of absolute liability imposed by the Food, Drug and Cosmetic Act, see United States v. Park, 421 U.S. 658, 95 S.Ct. 1903, 44 L.Ed.2d 489 (1975); United States v. Dotterweich, 320 U.S. 277, 64 S.Ct. 134, 88 L.Ed. 48 (1943), and subtly inject into the statute an element of scienter, or conscious awareness of guilt. The Court believes that the relevant inquiry under 21 U.S.C. § 351(c) is whether or not the gauze and batiste pads contained in Lots 705553 and 710749 were, in fact, sterile when shipped, utilizing an absolute definition of sterility.[5] The defendants' motion to exclude the Government's test results upon this basis is accordingly denied. B. Relevance of Post-Shipment Testing The clear import of 21 U.S.C. § 331(a) is that in order to prove a violation of that provision, adulteration at the time the product entered, or was delivered for introduction into, interstate commerce must be proven beyond a reasonable doubt. Penobscot Poultry Co. v. United States, 244 F.2d 94 (1st Cir. 1957). Adulteration, of course, may be demonstrated by any logical and convincing means. United States v. Lesser, 66 F.2d 612 (2d Cir. 1933); cf. Fed. Rules of Ev.Rules 402, 702. One manner of proving pre-shipment adulteration is by showing adulteration after receipt at some point in time subsequent to travel in interstate 765 commerce, together with proof that the adulteration necessarily occurred prior to shipment, rather than some later time. Pasadena Research Laboratories v. United States, 169 F.2d 375 (9th Cir. 1948), cert. den. 335 U.S. 853, 69 S.Ct. 83, 93 L.Ed. 401 (1948). The Court believes that the Government has sufficiently demonstrated that the postshipment tests performed upon samples of their product are highly probative with regard to the issue of pre-shipment sterility. The defendants' motion to exclude those test results upon this basis is therefore denied. C. Reliability of FDA Tests The defendants have drawn into issue the reliability of the FDA analysts' test results, pointing to various deviations of the methodology utilized from that prescribed by the U.S.P. In proving adulteration under 21 U.S.C. § 351(c), the Government is not limited to any particular manner of proof, and is especially not limited to use of tests conducted in accordance with the U.S.P. Woodard Laboratories v. United States, 198 F.2d 995 (9th Cir. 1952). This Court has had ample opportunity to hear testimony from FDA analysts who performed the various post-shipment tests upon the products in issue. The Court was similarly able to view those analysts' test worksheets and to listen to numerous expert witnesses' opinions with regard to the validity of those tests. As must be obvious from the verdict, the Court has concluded that the tests conducted upon samples from Lot 705553 were valid, especially with regard to demonstrating pre-shipment contamination, and that the Government has proven pre-shipment adulteration of that lot beyond a reasonable doubt.[6] A separate but related motion was made by the defendants to exclude certain of the Government's sterility test results (Government Exhibits 63, 64, and 78), based upon the Government's failure to preserve and produce records relating to the preparation and sterilization, by autoclaving, of the culture media utilized in the testing (T. 443-444; 780-783; 2407-2410; 2495). The Court is of the opinion that this deficiency relates not to the admissibility vel non of those test results, but merely to the weight to be accorded to them. In light of the use by the FDA analysts of both positive and negative controls, all of which produced results indicative of satisfactory testing conditions, the Court determines that the results of the tests are accurate and relevant and therefore should not be excluded. The defendants have also challenged the testimony of Leonard Mastrandrea, the FDA Laboratory Supervisor for the Brooklyn facility, as a portion of their attack upon the Government's test results. In particular, they contend that Mr. Mastrandrea's testimony as to lack of positive results in open controls on tests in which fleakers were used was hearsay, and should therefore be stricken (T. 3261-3264). The Court is of the opinion that, with proof that all instances of positive results in those open controls would be reported to Mr. Mastrandrea, evidence of the absence of such reports is not hearsay, is highly relevant, and should therefore be admitted. See McCormick on Evidence § 250 (2d Ed. 1972). II. MOTION TO STRIKE TESTIMONY RELATING TO SPECIATION OF THE MOLD The defendants have moved to exclude testimony of Dr. Mislivic, an FDA 766 mycologist who testified on behalf of the Government concerning his speciation of the molds cultured by the several FDA analysts during their testing of samples from defendants' Lot 705553 (T. 2412-2417; 2495; 3424). The defendants have also moved to strike testimony of Government expert witnesses, which testimony was based in part upon the speciations performed by Dr. Mislivic. The basis of their objection in this regard is Dr. Mislivic's failure to preserve the specimens from which he identified the presence of the mold paecilomyces varioti, which they claim effectively deprived them of their right to confront and cross-examine Dr. Mislivic, one of the Government's crucial witnesses. While the Court believes that the better practice would have been for Dr. Mislivic to preserve, in some manner, the samples actually speciated, whether by photograph or by maintaining the sample itself, especially since litigation was, at that point, virtually inevitable, the Court does not believe that his failure to do so rendered the results of those speciations inadmissible. Rather, it should merely affect the weight to be accorded to the results of his speciations. The defendants' motion in this regard is accordingly denied. III. MOTION TO DISMISS BASED UPON ALLEGEDLY FALSE GRAND JURY TESTIMONY The allegations set forth by the defendants in support of their motion to dismiss, based upon the prosecution's purported knowing use of perjured testimony before the Grand Jury in order to secure the instant Indictment, center around the testimony of Donald Howard. Mr. Howard was the FDA inspector whose observations during an inspection of defendants' Norwich sterile fill facility during June of 1973 form the core of the FDA's case concerning CGMP violations (T. 1935-1938; 1966-1987; 1990-2022; 3423). During his testimony before the Grand Jury, Mr. Howard characterized defendants' Norwich sterile fill facility as being in substantial violation of the CGMPs in June of 1973. He failed to mention to the Grand Jury, however, that he had inspected that same facility in February of 1973, and reported no major CGMP violations at that time. In fact, his testimony was such that the Grand Jury could reasonably have believed that the June inspection was Howard's first visit to the defendants' Norwich plant. This Court is indeed somewhat troubled with this aspect of Mr. Howard's testimony before the Grand Jury. That witness's characterizations of the Norwich facility as being in substantial violation of CGMPs are somewhat misleading when taken in context with the fact of his previous visit during which he failed to report any substantial violations. This Court has read the Grand Jury minutes of this case in camera, however, and is convinced that the Indictment is not vitiated by Mr. Howard's testimony. As should be obvious by now, the Court's verdict in this case with respect to Counts I and II was primarily the result of a finding of adulteration as defined in 21 U.S.C. § 351(c), rather than any CGMP violation under 21 U.S.C. § 351(a)(2)(B). On this score, there was ample evidence before the Grand Jury, quite independent of Mr. Howard's testimony, to support the charges lodged in the Indictment. As such, the defendants' motion to dismiss based upon this ground is denied. United States v. DeLeo, 422 F.2d 487 (1st Cir. 1970), cert. den. 397 U.S. 1037, 90 S.Ct. 1355, 25 L.Ed.2d 648 (1970); Coppedge v. United States, 114 U.S.App.D.C. 79, 311 F.2d 128 (1962) (Burger, J.). IV. MOTION TO EXCLUDE CERTAIN OBSERVATIONS The defendants challenge the introduction, as evidence of CGMP violations, of various observations made at the Norwich sterile facility outside of the time frame during which the lots in issue were manufactured (e. g. T. 1603-1605; 2395; 2396-2400). While the Court has indicated that its verdict rests upon finding actual contamination, in violation of 21 U.S.C. § 351(c), rather than a CGMP violation under 767 21 U.S.C. § 351(a)(2)(B), it nevertheless feels compelled to briefly address this point. The Court is in agreement that, with respect to CGMP violations, the evidence must relate to conditions as they existed at the time applicable to the Indictment; that is, the time of manufacture of the lots in question. In proving its case, however, the Government should not be limited to use of testimony of observations actually made during the critical time period. Rather, it is proper to consider proof of conditions existing at times reasonably close to those in issue, providing that the Government can demonstrate that, by virtue of the nature of the conditions and the closeness in time, it is reasonable to infer that the same conditions occurred during the critical time period. United States v. 1,200 Cans, Pasteurized Whole Eggs, Etc., 339 F.Supp. 131 (N.D.Ga.1972). For example, while it is reasonable to assume that the physical layout of defendants' sterile facility was, for the most part, the same in June of 1973 as it was earlier that year, it is not necessarily proper to infer, without more, that because a wooden-handled tool was present in the sterile fill area in June, that it was also there in February. Likewise, while observations of many insects present in the fill room in June might be relevant as indicative of a continuing CGMP violation for improper insect-proofing, the mere presence of a single fly on one or more occasions cannot be used to infer the presence of insects at other times. Because the verdict as to Counts I and II was based upon actual adulteration rather than CGMP violations, and because the Court finds insufficient evidence of CGMP violations even considering all of the evidence now under challenge, it is unnecessary to rule upon the defendants' various objections falling within this category.[7] V. CONCLUSION In closing, the Court would like to express its deep appreciation to all of the lawyers who worked so diligently in preparing and presenting this case. The amount of time and effort which went into preparation of the case on both sides was apparent to this Court. The parties' efforts succeeded in enlightening the Court with regard to a rather complex and technical subject matter. The verdict stands as previously announced in court. The various motions upon which the Court reserved decision at different stages in the proceedings are resolved in accordance with the foregoing Opinion. It is so ordered. NOTES [1] 21 U.S.C. § 351 provides: A drug or device shall be deemed to be adulterated * * * * * Misrepresentation of strength, etc., where drug is unrecognized in compendium (c) If it is not subject to the provisions of subsection (b) of this section and its strength differs from, or its purity or quality falls below, that which it purports or is represented to possess. * * * * * * [2] Under 21 U.S.C. § 351(a)(2)(B), a drug or device is deemed to be adulterated (B) if it is a drug and the methods used in, or the facilities or controls used for, its manufacture, processing, packing, or holding do not conform to or are not operated or administered in conformity with current good manufacturing practice to assure that such drug meets the requirements of this chapter as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess; [3] The U.S.P. is recognized under the Federal Food, Drug and Cosmetic Act as an official compendium. See 21 U.S.C. § 321(j). [4] While that case dealt with misbranding under 21 U.S.C. §§ 352(a) and 352(e)(1)(A)(ii), it can be properly analogized to a situation of alleged adulteration under 21 U.S.C. § 351(c). [5] Admittedly, such a result is difficult, if not impossible, to achieve under normal manufacturing conditions. This is indicative, nevertheless, of the extremely heavy burden which Congress sought to impose upon the manufacturers of products falling within the ambit of the Food, Drug and Cosmetic Act. For example, a food which contains any filthy, putrid or decomposed substance (albeit completely harmless), as do virtually all foods, is deemed adulterated under 21 U.S.C. § 342(a)(3), and is accordingly in violation of the Act when shipped in interstate commerce. United States v. 484 Bags, More or Less, 423 F.2d 839 (5th Cir. 1970); United States v. 1,200 Cans, Pasteurized Whole Eggs, Etc., 339 F.Supp. 131 (N.D.Ga. 1972). The courts have somewhat ameliorated the hardships resulting from such a literal application of the Act by utilizing a de minimis doctrine to forgive minor, technical violations shown to be unavoidable even through the use of good manufacturing practice. See United States v. 1,500 Cases More or Less, Etc., 236 F.2d 208 (7th Cir. 1956); United States v. 449 Cases, Containing Tomato Paste, 212 F.2d 567 (2d Cir. 1954). The Court need not decide whether such a doctrine should apply to cases of drug adulteration under 21 U.S.C. § 351(c), inasmuch as the contamination discovered in Lot 705553, which respect to which the defendants were found guilty, cannot be considered as de minimis. The FDA has also taken steps to reduce the hardships associated with literal interpretation of the Act by exercising its prerogative under 21 U.S.C. § 336 to decline prosecution for minor violations, and by establishing tolerances, or Defect Action Levels (DALs), below which level of adulteration no FDA action would take place. See United States v. 484 Bags, More or Less, supra; see also Dean Rubber Manufacturing Company v. United States, 356 F.2d 161 (8th Cir. 1966). There is no evidence, however, of a DAL having been established with respect to sterility of gauze or batiste pads represented to be sterile, nor would the Court be bound by such a DAL were one to exist. United States v. 484 Bags, More or Less, supra at 842; United States v. 449 Cases, Containing Tomato Paste, supra at 575. [6] It seems only fair that, inasmuch as the FDA is seeking to hold the defendants to such a high standard of conduct, it should likewise insist on a high standard of conduct from its own employees. The Court is referring, in part, to the apparently common practice of certain FDA analysts of photocopying portions of test worksheets for later use in other tests. Compare, e. g. Government Exhibits 10, p. 2 with 54, p. 2, and 43, p. 3 with 63, p. 3 (See also T. 611-615). Also cited infra as an example of some departure from such a standard is the testimony given before the Grand Jury by one of the FDA inspectors (See T. 1909-1913; see also 1935-1938; 1966-1987; 1990-2022; 3423). [7] The same holds true with respect to Government's Exhibit 106, a report of observations made by Richard Kilgore during an inspection of June, 1973.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367399/	400 F. Supp. 978 (1975) CHAMPION INTERNATIONAL CORPORATION, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, Defendant. No. 70 Civ. 5277. United States District Court, S. D. New York. May 1, 1975. Kronish, Lieb, Shainswit, Weiner & Hellman, Seymour Shainswit, Abner P. Slatt, New York City, for plaintiff. Hart & Hume, Jack Hart, Cecil Holland, Jr., New York City, for defendant. OPINION SOLOMON, District Judge: Champion International Corporation (Champion) filed this action to recover $1,000,000 from Continental Casualty Company (Continental), one of Champion's insurers. This Court has jurisdiction under 28 U.S.C. § 1332. Champion sells construction materials, among other things. In 1969 and 1970, Champion bought a large number of vinyl covered plywood panels from Continental Vinyl Products Corporation (Continental Vinyl). Champion then sold the panels to many manufacturers, who installed them in the interiors of houseboats, house trailers, motor homes and 979 campers.[1] Many of the panels were defective; after they were installed, the vinyl covering peeled off and exposed the underlying raw plywood. More than 1400 vehicles manufactured by at least 26 different firms were damaged by the defective panels. Champion assumed liability for the damages; it paid more than $1.6 million to settle the claims of the manufacturers and the purchasers of the damaged vehicles. The damage sustained by a single vehicle was always less than $5,000. During 1969 and 1970, when it was discovered that many of the panels were defective, Champion was insured under two policies: a comprehensive general liability policy issued by Liberty Mutual Insurance Company (Liberty), and an umbrella excess third party liability policy issued by the defendant, Continental. The Liberty policy provided Champion with the following coverage: "The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of . . . property damage to which this policy applies, caused by an occurrence . . . but the company shall not be obligated to pay any claim or judgment . . . after the applicable limit of the company's liability has been exhausted by payments of judgments or settlements." Liberty's coverage was limited to $100,000 for each "occurrence", and $200,000 aggregate, with a $5,000 deductible per occurrence.[2] The Liberty policy defined "occurrence", "damages", and "property damage" as follows: "`occurrence' means . . . an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured . . . ." "for the purpose of determining the limit of the company's liability . . . all . . . property damage arising out of continuous or repeated exposure to substantially the same general conditions . . . shall be considered as arising out of one occurrence." "`damages' includes . . . damages for loss of use of property resulting from property damage[.]" "`property damage' means injury to or destruction of tangible property." The Liberty policy contained a provision on occurrences which result in damage over a long period: "If the same occurrence gives rise to . . . property damage which occurs partly before and partly within the policy period, the each occurrence limit and the applicable aggregate limit or limits of this policy shall be reduced by the amount of each payment made by the company with respect to such occurrence under a previous policy or policies of which this policy is a replacement." The Liberty policy also contained a provision relating to a single occurrence 980 which results in property damage sustained by one or more persons. "Coverage B The total liability of the company for all damages because of all property damage sustained by one or more persons or organizations as the result of any one occurrence shall not exceed the limit of property damage liability stated in the declarations as applicable to `each occurrence'." The Continental policy provided coverage in excess of Liberty's basic policy. The Continental policy indemnified Champion for all money which Champion was obligated to pay "for damages, direct or consequential, and expenses, all as defined by the term `ultimate net loss' on account of . . . Property Damage . . . caused by or arising out of each occurrence." The Continental policy defined "ultimate net loss" as the ". . . total sum which the Insured or any company as his insurer becomes obligated to pay by reason of . . . Property Damage . . ., either through adjudication or compromise, and all sums paid for expense[s] . . . ." The limit of Continental's liability was $1,000,000 for any occurrence in excess of the amount recoverable from Liberty. Continental's liability was also limited to $1,000,000 for multiple occurrences. "Occurrence" was defined as ". . . an event or continuous or repeated exposure to conditions, which unexpectedly causes . . . Property Damage . . . during the policy period." Finally, the Continental policy contained the following provision: ". . . [I]n the event of loss for which [Champion] has coverage under [underlying insurance], the excess of which would be recoverable hereunder, except for terms and conditions of this policy which are not consistent with the underlying, then, notwithstanding anything contained herein to the contrary, this policy shall be amended to follow the terms and conditions of the applicable underlying insurances in respect of such loss." Continental admits that the damage to the vehicles which resulted from the defective panels constituted property damage covered by the Liberty and Continental policies.[3] Champion argues that the damage to all of the vehicles arose from a single occurrence. Under this interpretation, Champion may recover all of its damages, less the $5,000 deductible and less the $100,000 paid by Liberty, but not exceeding the $1,000,000 limit of liability. Continental argues that the damage to each vehicle was a separate occurrence within the meaning of the policies. Because no vehicle sustained damage in excess of $5,000, the amount deductible for each occurrence, Continental argues that Champion is not entitled to anything under the Continental policy. Each party contends that the language of the policies is clear and unequivocal and supports its contentions. Each party concedes that if a policy is ambiguous, the language is to be construed against the insurance company. The New York rule goes further and provides that if a policy can be reasonably construed in favor of the position asserted by the insured, he is entitled to *981 recover. See Datatab, Inc. v. St. Paul Fire & Marine Insurance Co., 347 F. Supp. 36, 38 (S.D.N.Y.1972); Sincoff v. Liberty Mutual Fire Ins. Co., 11 N.Y.2d 386, 230 N.Y.S.2d 13, 183 N.E.2d 899 (1962). This rule is particularly applicable when the policy is denominated a "comprehensive general liability policy". National Screen Serv. Corp. v. United States Fidelity and Guaranty Co., 364 F.2d 275, 279-280 (2d Cir. 1968). Here the Liberty policy was so denominated. The Continental policy is an umbrella excess third party liability policy, which appears to afford even broader coverage. I believe that this is a fair rule of construction. The contested provisions of both the Liberty and Continental policies are standard ones. They are in similar policies issued by many companies. Insurance companies could prepare policies in clear, simple and precise language which would inform insureds of the limits of their coverage. Insurance companies could avoid the risk of ambiguity if they use short and precise words and short and simple sentences to express their intent clearly. In spite of continued admonitions of the courts to get rid of such language, insurance companies continue to issue such policies using insurance jargon and verbose and meaningless generalities, all of which result in ambiguities. I do not know whether the Continental policy was ever intended to cover this type of loss. But Continental's admissions that this is the type of loss which the policy was designed to cover require me to decide this case solely on whether there was one occurrence which proximately resulted in damage to many vehicles, or whether the damage suffered by each of those vehicles was a separate occurrence. On this issue, I find in favor of the plaintiff because I find that the contested language is ambiguous. The interpretation urged by the plaintiff may not be the only reasonable interpretation, but it is a reasonable one. That is all plaintiff is required to prove. In making this determination, I have given no weight to the fact that Liberty, under its policy, paid Champion. This opinion shall constitute findings of fact and conclusions of law in accordance with Fed.R.Civ.P. 52(a). The parties may submit additional findings. Plaintiff shall submit an appropriate judgment in accordance with this opinion. NOTES [1] The panels were usually sold in small lots, as required by the production schedules of the purchasing manufacturers. For example, Cobra Industries, Inc., received 105 separate shipments of the panels from January, 1969, to March, 1970; Cobra manufactured 224 of the damaged trailers from April 9, 1969, to November 19, 1969. Nauta-Line, Inc., manufactured 260 of the damaged houseboats from April 3, 1969, to June 26, 1970. [2] Endorsement No. 8 of the Liberty policy provided for a designation as to whether the deductible amount was to apply per claim or per occurrence. Per occurrence was chosen. Endorsement No. 8 provided: "SCHEDULE Coverage Amount and Basis of Deductible Bodily Injury Liability $ per claim $ per occurrence Property Damage Liability $ per claim $5,000 per occurrence" [3] I believe that this is a fair conclusion from Continental's admissions that "(1) the diminution in value of vehicles resulting from the delaminations of the panels constituted property damage within the `products hazard' as those terms are defined in the Liberty Mutual policy and in the Umbrella Excess policy, and (2) the liability of Champion for such property damage is a type of liability covered by the Liberty Mutual policy and the Umbrella Excess policy under the `Products Hazard', subject only to the application of the limits of liability of the policies and the provisions of the policies with respect to other insurance."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367398/	400 F. Supp. 813 (1975) HANCOCK GROSS MFG., INC. v. UNITED STATES. C. R. D. 75-6, Court Nos. 65/2629 and 69/14620. United States Customs Court. September 29, 1975. Allerton deC. Tompkins, New York City, for plaintiff. Rex E. Lee, Asst. Atty. Gen. (John J. Mahon, trial atty., New York City, for defendant. OPINION AND ORDER ON DEFENDANT'S MOTION TO DISMISS AND PLAINTIFF'S CROSS-MOTION TO CORRECT ITS NAME NEWMAN, Judge: Pursuant to rule 4.7(b)(1) of this court defendant has moved to dismiss these two protests on the ground that plaintiff is not a proper party and has no standing to file the actions. In response to defendant's motion, plaintiff has filed an opposition, and a cross-motion to change the plaintiff-corporate name in these cases from Hancock Gross Mfg., Inc. to Hancock-Gross, Inc. Defendant has opposed the cross-motion. It is abundantly clear that defendant's motion should be denied, and plaintiff's cross-motion should be granted. 1. Briefly, the pertinent facts are: The subject merchandise (plumbing supplies) was imported through the port of Philadelphia in 1964. Entries were filed by Davies, Turner & Co., a Philadelphia customhouse broker, for the account of Hancock Gross Mfg., Inc. (Hancock-Gross), plaintiff herein. The consumption entry forms (Customs Form 7501) declare that: * * * I [Davies, Turner & Co.] am the [x] nominal consignee and that 814 the actual owner for customs purposes is as shown above [Hancock Gross Mfg., Inc.] * . Further, the commercial and special customs invoices show that Hancock-Gross was the actual purchaser of the merchandise. However, the "Carrier's Certificate and Release Order" (Customs Form 7529) in each entry certifies "that DAVIES, TURNER & CO. of PHILADELPHIA, PENNA. is the owner or consignee of such articles within the purview of section 484(h), Tariff Act of 1930." Additionally, no owner's declaration or superseding bond was filed by Davies, Turner pursuant to 19 U.S.C. § 1485(d) (1964) and 19 CFR § 8.18(d) (1964).[] Protest No. 65/2629 was signed by plaintiff's counsel on behalf of Hancock Gross Mfg., Inc. and Davies, Turner & Co. as follows: Respectfully, HANCOCK GROSS MFG., INC. (DAVIES, TURNER & CO.) BY: Allerton deC. Tompkins, Attorney 44 Whitehall Street, New York, N.Y. 10004 Protest No. 69/14620 was similarly signed by plaintiff's counsel on behalf of both Hancock Gross Mfg., Inc. and Davies, Turner & Co. However, at the time of making the entries and filing the protests plaintiff's correct corporate name was Hancock-Gross, Incorporated, pursuant to an amendment of its corporate name on June 28, 1961. 2. The Government urges that the protests be dismissed for lack of jurisdiction on the ground that the entries were made by Davies, Turner & Co., the importer of record, while the protests were filed by Hancock Gross Mfg., Inc., which party was neither the "importer" nor the "consignee" for tariff purposes. In support of its position, defendant cites: Wilmington Shipping Company v. United States, 52 Ct. Cust. 650, A.R.D. 175 (1964), aff'd 52 CCPA 76, C.A.D. 861 (1965), and Top Form Brassiere Mfg. Co., Ltd. v. United States, 68 Ct. Cust. 288, R.D. 11770, 342 F. Supp. 1167 (1972). Defendant also attempts to buttress its motion by attaching certified copies of the "Articles of Amendment" filed with the Department of State in Pennsylvania and the "Certificate of Amendment" dated June 28, 1961 issued by the State of Pennsylvania changing the corporate name of plaintiff from Hancock Gross Manufacturing, Inc. to Hancock-Gross, Incorporated. Plaintiff argues that it has standing to file these protests as the actual owner 815 and importer of the merchandise, citing: United States v. Waterbury Lock & Specialty Co., 35 CCPA 131, C.A.D. 384 (1948); Adolco Trading Co. v. United States, 71 Ct. Cust. 145, C.D. 4487 (1973); Air Carrier Supply Corporation v. United States, 35 Ct. Cust. 173, C.D. 1740 (1955), aff'd 44 CCPA 116, C.A.D. 647 (1957); Great Lakes Foundry Sand Co. v. United States, 15 Ct. Cust. 256, Abs. 50442 (1945), appeal dismissed, 33 CCPA 190 (1945). Plaintiff also contends that Hancock Gross Mfg., Inc. is the same corporation as Hancock-Gross, Inc., and that the corporation merely changed its name. In support of its cross-motion to correct its name in these protests, plaintiff has submitted the identical "Articles of Amendment" and "Certificate of Amendment" relied upon by defendant in its motion to dismiss. 3. Under section 514 of the Tariff Act of 1930, the party filing a protest must be "the importer, consignee, or agent of the person paying such charge or exaction". Fundamentally, of course, the court lacks jurisdiction over a protest filed by a party which does not fall within one of the authorized classes of persons specified in section 514. Shigoto International Corp. v. United States, 66 Ct. Cust. 252, C.D. 4199 (1971). And protests which are a nullity cannot be amended. Heemsoth Kerner Corporation v. United States, 31 Ct. Cust. 113, C.D. 1554 (1953). In the decisions relied upon by plaintiff, cited supra, the courts have recognized the purchaser and actual owner of the importations as a party authorized to file protests. In this connection, the following observations by Judge Miller of our appellate court, concurring in the very recent decision of United States v. Wedemann & Godknecht, Inc., 62 CCPA ___, C.A.D. 1151, 515 F.2d 1145 (1975), are apposite here: The courts have consistently permitted the owner-importer of the merchandise or his agent to protest the decision of the collector, even though such owner-importer or agent (or both) was not so identified in the entry papers, upon proof of identity at the trial. See United States v. Hannevig, 10 Ct.Cust.App. 124, T.D. 38384 (1920); Adolco Trading Co. v. United States, 71 Ct. Cust. 145, C.D. 4487 (1973); Great Lakes Foundry Sand Co. v. United States, 15 Ct. Cust. 256, Abs. 50442 (1945); Bernstein v. United States, 59 Treas.Dec. 870, T.D. 44800 (Cust.Ct.1931); Davies, Turner & Co. v. United States, 58 Treas.Dec. 1216, Abs. 14407 (Cust.Ct.1930); Gray v. Lawrence, 10 F. Cas. 1031 (No. 5,722) (C.C.S.D.N.Y.1853). The import of these decisions is that, for purposes of section 514, a protest may be filed by one who proves that he is the real party in interest or his agent. Thus, in Bernstein, supra, the concuring opinion quoted the following portion of Chief Justice Taney's opinion in Mason v. Kane, 16 F. Cas. 1044 (No. 9,241) (C.C.D.Md.1851): We see no inconvenience that can arise to the collector, or the public, by permitting the owner to maintain the suit in his own name, instead of suing in the name of his agent or consignee; the payment by the consignee, is the payment by the principal; and the protest of the consignee, the protest of the principal, if he thinks proper to adopt it. We think the practice in some of the circuits has sanctioned suits by the foreign owner, in cases of this description; and as this practice is consistent with a fair construction of the act of 1845, and no injustice or inconvenience can arise from it, the court are of opinion, that this objection must be overruled. But cf. Baylis Brothers Co., etc. v. United States, 75 Ct. Cust. ___, C.D. 4611 (1975). Here, defendant has not attempted to distinguish any of the precedents relied 816 upon by plaintiff, but merely "suggests" (in a footnote) that Adolco Trading Co. "is not dispositive of the issue herein". Moreover, Wilmington Shipping Company and Top Form Brassiere Mfg. Co., Ltd., relied on by defendant, are reappraisement cases arising under 19 U.S.C. § 1501, and therefore are not deemed controlling in the present protest cases involving section 1514. Furthermore, it may be noted that in Control Data Corporation v. United States, 61 CCPA 109, C.A.D. 1132, 499 F.2d 1304 (1974), jurisdiction under section 1501 was upheld in certain appeals for reappraisement notwithstanding that the appeals were not filed by the consignee (Norman G. Jensen, Inc.), but rather by the actual owner of the goods (Control Data Corporation). In Control Data, the jurisdictional issue was raised sua sponte by Judge Richardson relying upon, inter alia, Wilmington Shipping. See United States v. Control Data Corporation, 69 Ct. Cust. 274, A.R.D. 310, 352 F. Supp. 1392 (1972). In any event, the significant fact remains that the protests were signed by plaintiff's attorney on behalf of Davies, Turner, as well as Hancock-Gross, and consequently the protests must be considered as filed by both the nominal and ultimate consignees. Plainly, then, there is no basis under rule 4.7(b) (1) for dismissal of these protests. Hence, the caption of these cases hereafter shall include Davies, Turner & Co. as a party-plaintiff. 4. Finally, defendant's contention that the court lacks jurisdiction of the protests because they were filed by Hancock Gross Mfg., Inc. rather than Hancock-Gross, Inc., is without merit. There has been no showing that the different names refer to two different and separate companies. Instead, it is undisputed that Hancock Gross Mfg., Inc. merely amended its name, and is one and the same corporate party as Hancock-Gross, Inc. By contrast, in Shigoto International Corp., Judge Maletz held that the protests were jurisdictionally defective where the importer, Shigoto Industries, Ltd., and the protestant, Shigoto International Corp., were shown by testimony to be entirely different companies. While the carelessness displayed here respecting the proper naming of a corporate party in the protests is not "condoned", nevertheless I feel strongly that such technical error is properly amenable to correction. Thus, in Wedemann & Godknecht, Inc. Judge Rich, writing for the majority of our appellate court, very recently expressed the principle that section 514 was to be "liberally construed in furtherance of justice", and so far as pertinent here, also commented as follows (62 CCPA at ___, 515 F.2d at 1149): We do not mean by this opinion to condone slipshod performance by the customs bar in complying with the tariff statutes. If, as the Government would have us believe, filing of protests in the name of the wrong party is becoming a problem, we hope that the excessive litigation which has resulted from what was done in this case will be taken as a lesson. But we think the penalty should fit the crime and that FFB [Farbenfabriken Bayer, A. G.] should not have to foot the bill for improving professionalism in the customs bar and among brokers. 5. For the reasons stated herein, it is hereby ordered: 1. Defendant's motion to dismiss is denied. 2. Plaintiff's motion to change the name of the captioned plaintiff from Hancock Gross Mfg., Inc. to Hancock-Gross, Inc. is granted. 3. Hereafter, the caption of these cases shall include Davies, Turner & Co. as a party-plaintiff. 4. Defendant shall serve its answers to the complaints in these protests within thirty days after service by the clerk of a copy of this opinion and order. NOTES [] 19 U.S.C. § 1485(d) (1964) reads as follows: (d) A consignee shall not be liable for any additional or increased duties if (1) he declares at the time of entry that he is not the actual owner of the merchandise, (2) he furnishes the name and address of such owner, and (3) within ninety days from the date of entry he produces a declaration of such owner conditioned that he will pay all additional and increased duties, under such regulations as the Secretary of the Treasury may prescribe. Such owner shall possess all the rights of a consignee. 19 CFR § 8.18(d) (1964) provides: (d) A consignee in whose name an entry is made who desires under the provisions of section 485(d), Tariff Act of 1930, to be relieved from direct liability for the payment of increased and additional duties shall file a declaration of the actual owner of the merchandise on customs Form 3347. If the consignee desires to be relieved also from the liability for the payment of such duties voluntarily assumed by him in the single-entry bond which he filed in connection with the entry or in his term bond against which the entry was charged, he shall file with the collector of customs within 90 days from the date of entry a superseding bond on customs Form 7601 of the actual owner whose declaration on customs Form 3347 has been filed in accordance with section 485(d) and the regulations in this part. The filing of the owner's declaration and of the superseding bond by the nominal consignee is optional and no bond shall be required for the production of either. Neither the owner's declaration nor the superseding bond shall be accepted unless filed by the nominal consignee or his duly authorized agent. * *	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367390/	15 Cal. 3d 982 (1976) 544 P.2d 1350 127 Cal. Rptr. 150 STEPHEN O. MARTINEZ, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, ROMAN CATHOLIC BISHOP OF SAN DIEGO et al., Respondents. Docket No. L.A. 30515. Supreme Court of California. In Bank. February 2, 1976. 984 COUNSEL Thompson, Talbott & Lemaster and George D. Thompson for Petitioner. Chernow & Lieb and Donald C. Lieb for Respondents. OPINION RICHARDSON, J. Petitioner Stephen O. Martinez was beaten and seriously injured while attempting to prevent the theft of his employer's property. The sole question before us is whether petitioner is entitled to recover workers' compensation for the injuries he incurred. We have concluded that emergency efforts by an employee acting in good faith to save his employer's property from loss by theft constitute acts performed within the course of employment, and that accordingly petitioner should be afforded compensation benefits. Petitioner was a member of the parish council of Our Lady of Guadalupe Roman Catholic Church of Chino. The council was composed of various church members appointed by the parish priest to organize and supervise volunteer, service-type activities. A fiesta was planned by the council for June 17, 1973, to raise funds to buy a new air conditioning unit for the church. The festivities were to be held on church premises and were to include carnival-type games and the sale of food and beer. Among the topics discussed by the council during its planning sessions was the subject of security; evidently some concern existed regarding possible disturbances by intoxicated persons and others who might attempt to disrupt the fiesta. To avoid the expense of hiring security guards, the council voted to assume the task itself by policing its own party. Petitioner's specific duty was to assist in the operation of the beer booth. He worked there from noon until 4:30 p.m. when he left to have dinner with his wife and children. After his dinner, petitioner strolled around the fiesta with his family. Although there were enough volunteers to operate the beer booth, petitioner nevertheless regularly checked the booth to see if his help was needed. During his walks, he received several reports that teenagers were pilfering beer from the stock used to resupply the booth. Petitioner's initial efforts to locate the offenders were 985 unsuccessful, but at 8 p.m. he encountered a group of juveniles on the church premises in possession of beer which petitioner believed to be stolen. (Petitioner may have been mistaken, as his employer's beer was chilled and the beer in the juveniles' possession was warm. However, the mere passage of time might have accounted for the apparent difference in temperature.) Petitioner asked one of the youths to return a six-pack of beer he was then holding. The youth responded with profanity, and petitioner grabbed him and attempted to retrieve the six-pack; a fight ensued and petitioner was hit on the head with a wine bottle and brutally beaten and kicked by his assailants. As petitioner's employer (the Roman Catholic Bishop of San Diego) had obtained a workers' compensation insurance policy covering volunteer workers, petitioner filed a compensation claim. (See Lab. Code, § 3363.6.) Following a hearing, the workers' compensation judge (formerly referee) found that petitioner was engaged in protecting his employer's property when the incident occurred and that this activity was so closely related to petitioner's employment duties as to justify compensability for petitioner's injuries. On petition for reconsideration, the Workers' Compensation Appeals Board declined to adopt the judge's recommendation, holding that petitioner's injuries were not incurred within the course of his employment. In particular, the board found (1) that petitioner's beer booth duties terminated at 4:30 p.m., and (2) that petitioner had no duty to investigate theft, as he was not hired as a security guard. It is well established that the factual determinations of the board must be upheld if its findings are supported by substantial evidence in the light of the entire record. (Lab. Code, § 5952, subd. (d); LeVesque v. Workmen's Comp. App. Bd., 1 Cal. 3d 627, 637 [83 Cal. Rptr. 208, 463 P.2d 432].) In the present case, it is questionable whether the board's findings are founded upon substantial evidence. Certainly, petitioner, as a volunteer worker, considered himself "on call" at the beer booth whenever his services were needed, for he regularly returned to the booth to ascertain whether enough volunteer help existed. Moreover, although he was not formally hired as a security guard, he was a member of the church council which had voted to "self-police" the affair. Thus, it is arguable that petitioner was engaged in both "beer booth" and "security" activities at the time he was injured. 986 (1a) We need not rest our decision upon such narrow grounds, however, for even if petitioner had completed his employment duties at the time of the incident in question, he should be permitted to recover compensation under the present circumstances. As a recognized authority in the compensation area has explained, "[i]t is too obvious for discussion that emergency efforts to save the employer's property from fire, theft, ... or other hazards are within the course of employment. The fact that the rescue effort takes place outside of working hours does not detract from its work-connected status." (1 Larson, Workmen's Compensation Law (1972) § 28.11, pp. 5-269, 5-270, italics added and fns. omitted; see also, 2 Hanna, Cal. Law of Employee Injuries and Workmen's Compensation (2d ed. 1975) § 9.01[2], p. 9-7.) Years ago, in an analogous situation, we held compensable a stable hand's injuries sustained during his attempt to rescue a child endangered by a horse on the employer's premises. (Ocean A. & G. Corp. v. Industrial Acc. Com. (1919) 180 Cal. 389 [182 P. 35].) As we stated, "To be sure, he was not employed to rescue children. But certainly it was reasonably within the course of his employment, within the scope of those things which might reasonably be expected of him as an employee, that he should attempt to prevent an accident on his employer's premises.... If, in this case, Nelson, instead of being injured in an attempt to prevent a child being run over on his employer's premises by an officer of his employer there on his company's business, had been injured in an attempt to put out an incipient fire accidently started in the barn, it is hardly possible that any question would have been made. Yet there is no real distinction between the two cases. Nelson was no more employed to put out fires than he was to rescue children. The point is that the danger which threatened, and in attempting to remove which he was hurt, was one which threatened his employer and directly concerned it, and with which Nelson was confronted in the discharge of his customary duties." (Pp. 392-393.) Similarly, in the present case, although petitioner may not have been employed to prevent theft of his employer's property, it was reasonably within the course of his employment that he might attempt to do so. As stated in a recent case, "Whether a particular activity be classified by the term's [sic] response to an emergency, rescue, personal comfort or convenience, recreation, exercise, courtesy, or common decency, the point is that the activity was reasonably to be contemplated because of its general nature as a normal human response in a particular situation or in some cases because of its being recognized as an acceptable practice in the particular place by custom. Human services cannot be employed 987 without taking the whole package." (North American Rockwell Corp. v. Workmen's Comp. App. Bd. (1970) 9 Cal. App. 3d 154, 159 [87 Cal. Rptr. 774] [injury sustained in employer-furnished parking area while assisting fellow employee].) Similarly, in Johnson v. Chicago & N.W. Ry. Co. (1942) 69 S.D. 111 [7 N.W.2d 145], the court held compensable an injury sustained by a railroad employee who was injured when he attempted to stop his assailants from stealing his employer's coal. Despite the fact that the workman was hired to shovel coal rather than act as a watchman or guard, the court held that an employee does not leave the course of his employment when he acts to protect his employer's property from theft. The Johnson rationale should apply with equal force to injuries received on the employment premises by an off-duty employee while attempting to prevent such a theft. (2) As we recently observed in Garza v. Workmen's Comp. App. Bd. (1970) 3 Cal. 3d 312 [90 Cal. Rptr. 355, 475 P.2d 451], "Although the employee bears the burden of proving that his injury was sustained in the course of his employment, the established legislative policy is that the Workmen's Compensation Act must be liberally construed in the employee's favor (Lab. Code, § 3202), and all reasonable doubts as to whether an injury arose out of employment are to be resolved in favor of the employee. [Citation.] This rule is binding upon the board and this court." (P. 317.) (3) Courts have not been precise in defining the types of situations which constitute an "emergency" for purposes of applying the rule that work-related emergency activities are compensable. (See Larson, supra, § 28.13, pp. 5-276, 5-277.) We believe, however, that an "emergency" may be deemed to exist whenever an employee faces an immediate, and apparent, on-the-premises theft of his employer's property. Moreover, according to Larson, "[i]t is a well-established principle, even at common law, that the actor's judgment about the existence of an emergency and how to meet it should not be too severely judged in retrospect. He may get the benefit of the emergency doctrine even if the only emergency was in his imagination, if he acted in good faith." (Id., p. 5-277, fns. omitted, italics added.) (1b) It appears uncontradicted that petitioner acted in a good faith attempt to prevent an on-going theft of his employer's property. Respondents suggest that petitioner herein acted as an "aggressor" in initiating the "altercation" which resulted in his injuries and that, 988 accordingly, he should be denied compensation on that ground. (See Lab. Code, § 3600, subd. (g) [compensation denied when applicant is the "initial physical aggressor" in an "altercation"].) We do not believe, however, that petitioner's act in grabbing the youth who possessed the six-pack of beer in question constituted an act of aggression within the meaning of section 3600. We recently had occasion to review the principles underlying the aggressor provision in Mathews v. Workmen's Comp. Appeals Bd. (1972) 6 Cal. 3d 719 [100 Cal. Rptr. 301, 493 P.2d 1165]. Initially, we noted that in view of the statutory policy of liberal construction in favor of injured workers, the aggressor provision itself "must be narrowly and strictly construed. [Citation.]" (P. 726.) We next explained that "... an `initial physical aggressor' is one who first engages in physical conduct which a reasonable man would perceive to be a `"real, present and apparent threat of bodily harm...."' [Citation.]" (P. 727, fn. omitted.) In the instant case, it is doubtful that petitioner's act of grabbing the youth for purposes of wresting from him the six-pack of beer presented a "real, present and apparent threat of bodily harm." Rather, it should have been apparent to a reasonable man that petitioner intended no harm under the circumstances but acted only to retrieve property which he believed to have been stolen. Moreover, we also suggested in Mathews that the aggressor provision was intended as a deterrent to, or punishment for, acts of "wilful wrongdoing" or "intentional misconduct." (Id., at pp. 728, 734-735.) Petitioner's good faith attempt to prevent a theft of his employer's property should not reasonably be construed as misconduct disqualifying him from compensation benefits. Indeed, if the rule were otherwise, an employee would forfeit his compensation rights whenever he initiated physical means of preventing misconduct by others and an altercation developed causing him injury. Finally, the record indicates that the board did not find that petitioner was an aggressor, nor did the board purport to deny petitioner compensation benefits on that basis. The board's sole theory was that petitioner was not acting in the course of his employment when he was injured, a theory which was incorrect as a matter of law, by reason of the emergency doctrine discussed above. 989 The decision of the board is annulled and the cause is remanded to the board for further proceedings consistent with the views herein expressed. Wright, C.J., McComb, J., Tobriner, J., Mosk, J., Sullivan, J., and Clark, J., concurred. On March 1, 1976, the opinion was modified to read as printed above.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367413/	400 F. Supp. 854 (1975) Calvin SELLARS, Individually and on behalf of others v. W. J. ESTELLE, Jr., Director, Texas Department of Corrections. Arlice J. HUFFMAN and John F. Burns, on behalf of themselves and all others similarly situated v. W. J. ESTELLE, Jr., Director, Texas Department of Corrections. Civ. A. Nos. 73-H-494, 73-H-146. United States District Court, S. D. Texas, Houston Division. July 21, 1975. 855 Charles Alan Wright, Austin, Tex., Mike Maness, Bellaire, Tex., for petitioner. Lonny Zwiener, Asst. Atty. Gen., Austin, Tex., for respondent. Memorandum and Order SINGLETON, District Judge. The sole issue to be determined in these habeas corpus petitions involves a question of law, but a brief history of the facts in each petition is necessary in order to fully understand the merits of this cause of action. CALVIN SELLARS Petitioner Calvin Sellars was convicted on February 23, 1965, of robbery by firearms; the jury assessed his punishment at death and the court of criminal appeals affirmed his conviction. Sellars v. State, 400 S.W.2d 559 (Tex.Cr.App. 1965). Petitioner then sought habeas corpus relief in the Court of Criminal Appeals and in the state trial court. After exhausting his state remedies, petitioner sought habeas corpus relief in this court based on grounds other than those asserted in the instant petition for habeas corpus. That petition, Civil Action No. 68-H-512, was denied by this court in a written opinion filed May 1, 1969. Petitioner then appealed to the Fifth Circuit Court of Appeals, which affirmed this court's decision. Sellars v. Beto, 430 F.2d 1150 (5th Cir. 1970). Petitioner subsequently sought certiorari 856 in the Supreme Court of the United States. On June 29, 1972, the Supreme Court vacated the judgment of the Fifth Circuit Court of Appeals insofar as it "leaves undisturbed the death penalty imposed" upon Sellars and remanded the case to the Court of Appeals for further proceedings. Sellars v. Beto, 408 U.S. 937, 92 S. Ct. 2865, 33 L. Ed. 2d 756 (1972). On August 22, 1972, the Fifth Circuit entered an unpublished order[1] in which the court stated that the prior decision, Sellars v. Beto, supra, of July 28, 1970, was vacated and the prior mandate of September 21, 1970, was recalled. The court further ordered that the judgment of the district court be reversed and that the cause be remanded to the district court with directions to grant Sellars' petition for writ of habeas corpus should the State of Texas fail or refuse to resentence Sellars to a period not exceeding life imprisonment. The court went on to hold that in the event resentencing was determined to be inappropriate under Texas law, as Sellars had asserted in a motion filed in that court on July 10, 1972, the district court was directed to grant the writ of habeas corpus unless the State of Texas elected to retry Sellars within a reasonable time. On August 9, 1972, the Governor of Texas commuted petitioner Sellars' sentence to life imprisonment. On November 2, 1972, however, the Governor recommuted petitioner's sentence to 99 years after the Governor was informed that life imprisonment was not an authorized punishment for the offense of robbery by firearms. Subsequently, on September 6, 1972, the Fifth Circuit entered a second order[2] in which the court withdrew the substance of its August 22 order. The Fifth Circuit stated that the Governor of Texas had commuted petitioner Sellars' sentence from death to life imprisonment in the Texas Department of Corrections. They held that such a commutation was an appropriate and valid exercise of the Governor's authority and cited Whan v. State, 485 S.W.2d 275 (Tex.Cr.App.1972). The court further stated that "[w]e conclude that the action of the Governor of Texas in granting a commutation of Sellars' sentence from death to life imprisonment has in effect rendered moot the question before this Court and has satisfied the mandate of the Supreme Court of the United States." Furthermore, the court rendered moot any issue relating to petitioner's death sentence; subsequently, this court dismissed the case from its docket by a written order on September 29, 1972. Petitioner Sellars subsequently filed this petition for a writ of habeas corpus in which he alleges that the Governor's action in his case is not a valid commutation as authorized by law. Basically, petitioner's contention is that his sentence was vacated and thus no longer in existence after August 4, 1972, when the mandate of the Supreme Court issued. Therefore, petitioner contends that the Governor could not commute his sentence on August 9, 1972, much less on November 16, 1972, because there was no existing sentence to be commuted. ARLICE JAMES HUFFMAN For purposes of this habeas corpus proceedings, the questions of fact and law involved in petitioner Huffman's and Sellars' cases are the same; and, for that reason, the two cases were consolidated. Petitioner Huffman has attempted to file his petition for writ of habeas corpus as a class action on behalf of himself, John F. Burns, and all other inmates whose death sentences were commuted to life by the Governor of Texas after the Supreme Court of the United States delivered its opinion in Furman v. Georgia, 408 U.S. 238, 92 S. Ct. 2726, 33 L. Ed. 2d 346 (1972). With regard to the above-named individuals, however, it is clear from the record that there are not questions of law or fact 857 common to the class. Only twelve inmates from the Texas Department of Corrections actually had their sentence vacated by the Supreme Court of the United States, and joinder of all these class members would not be impracticable. See Rule 23, Federal Rules of Civil Procedure. The question of law common to the remainder of the purported class, including named petitioner John Burns, with respect to the constitutionality of the Governor's commutation has been decided by the Fifth Circuit in Antwine v. Estelle, 486 F.2d 189 (5 Cir. 1973). Therefore, the application to proceed as a class action is hereby denied and the substance of this Memorandum and Order will apply only to petitioners Sellars and Huffman. Petitioner Arlice J. Huffman was sentenced to death for the crime of murder in cause number 131429 in the 178th District Court of Harris County, Texas, on October 17, 1968, and the Court of Criminal Appeals affirmed the conviction and sentence of the trial court. Huffman v. State, 450 S.W.2d 858 (Tex.Cr.App.1970). Petitioner Huffman thereafter made an application for a writ of certiorari to the Supreme Court of the United States. On June 29, 1972, the Supreme Court vacated the judgment of the Court of Criminal Appeals "insofar as it leaves undisturbed the death penalty imposed" and remanded the case to the Court of Criminal Appeals for further proceedings, Huffman v. Beto, 408 U.S. 936, 92 S. Ct. 2860, 33 L. Ed. 2d 753 (1972). On August 9, 1972, the Governor of Texas commuted Huffman's sentence of death to life imprisonment. The Court of Criminal Appeals, in Stanley v. State, 490 S.W.2d 828 (Tex.Cr.App.1972), sustained the authority of the Governor to commute from death to life imprisonment the sentences of eleven individuals, including Huffman, whose sentences of death had previously been vacated by the Supreme Court. CONSTITUTIONALITY OF THE COMMUTATION Because of the order entered by the Fifth Circuit on September 6, 1972, which the petitioner requested the Fifth Circuit to withdraw, but which still remains in full force and effect, this court must deny the petitioners' application for a writ of habeas corpus. Although the order is brief, this court has interpreted the order, in conjunction with the original order entered August 22, 1972, as sanctioning the action of the Governor of Texas in commuting to life imprisonment[3] a death sentence that had been previously vacated by the Supreme Court of the United States. Although the brief submitted by the amicus curiae contends that the constitutional claim raised by the petitioners in this case has not yet been decided by any federal court, nevertheless, the Fifth Circuit had the following facts before it on September 6, 1972: (1) that petitioner Calvin Sellars' sentence had been vacated on June 29, 1972, and; (2) that subsequent to that time on August 9, 1972, after the mandate of the Supreme Court had been issued, the Governor of Texas commuted petitioner's sentence to life imprisonment. The Fifth Circuit held, "[s]uch a commutation is an appropriate and valid exercise of the Governor's authority." Implicit within that statement and the order of September 22 is that the sequence of actions in this particular casecommutation following vacationis proper. The Fifth Circuit further held in that order that the commutation of Sellars' sentence from death to life imprisonment had rendered moot the question before the court and had satisfied the mandate of the Supreme Court of the United States. Before the question of whether petitioner should be entitled to complete new trials under Texas law can be reached, the question of whether petitioners' sentences are invalid must be 858 decided. This court is of the opinion that the Fifth Circuit has already decided that a sentence can be commuted after it has been vacated by the Supreme Court. Therefore, since the Governor's first commutation of Sellars' sentence from death to life imprisonment is valid, then the second commutation of Sellars' sentence from life imprisonment to 99 years is likewise valid. If this court did not feel bound to follow what it feels is the correct interpretation[4] of the Fifth Circuit's order, this court would grant petitioners' applications for writ of habeas corpus for the reasons below. This court agrees with the petitioners and their counsel that since petitioners' sentences were vacated and no longer in existence after August 4, 1972, when the mandate of the Supreme Court issued, the Governor could not commute the sentences on August 9, 1972, since there were no existing sentences to commute. The Governor's power is limited to commutation, and commutation assumes a valid sentence in existence. "Commutation is not . . . a tool for resentencing prisoners whose sentences have been vacated; commutation is rather an act of mercy appropriate for reducing existing sentences." Mears v. Nevada, 367 F. Supp. 84, 85 (D.Nev. 1973). See also Presiding Judge Onion's dissent in Whan v. State, 485 S.W.2d 275, 277-81 (Tex.Cr.App.1972) and in Stanley v. State, 450 S.W.2d 828 (Tex.Cr.App.1972). The next question to determine is how to resentence the petitioners. In some states, statutory law provides for resentencing by the trial judge or even the appellate court. Still other states provide for new trials on the issue of penalty alone. Texas, however, is an exception. Under the Texas Code of Criminal Procedure, the Court of Criminal Appeals cannot resentence one whose original sentence has been vacated by the Supreme Court. Article 44.24 V.A. C.C.P., limits the Court of Criminal Appeals to affirming judgments, reversing and remanding for a new trial, reversing and dismissing, or reforming and correcting the judgments. This does not include the authority to resentence defendants. Improper convictions and sentences can only be remanded to the district courts for new trials. Such new trials cannot be limited to the punishment issue; the entire question of guilt as well as penalty must be relitigated. Furthermore, the right to jury trial is preserved. Ellison v. State, 432 S.W.2d 955 (Tex.Cr.App.1968); Grider v. State, 468 S.W.2d 393 (Tex.Cr.App.1971), and Ocker v. State, 477 S.W.2d 288 (Tex.Cr. App.1972). Thus, it is established Texas law that a defendant is entitled to a complete new trial if he is given an invalid sentence. A defendant is further entitled to have procedural due process observed in protection of his substantive rights even though substantive due process would not compel the rights to be given. Welch v. Beto, 355 F.2d 1016 (5th Cir. 1966). Thus, in this case even though the state rule calling for a complete new trial is not constitutionally required, this court feels that it is a denial of procedural due process for the state not to give petitioners the right of a new trial that its law provides. Therefore, if this court did not find that the holding of the Fifth Circuit on September 6, 1972, precludes further review into this matter, I would hold that petitioners have been denied their federal rights of procedural due process by the failure to order that they be given new trials. However, for the preceding reasons, the court is of the opinion that the petitions for habeas corpus should be, and hereby are, denied. 859 APPENDIX A Text of the August 22, 1972, order of the Fifth Circuit Court of Appeals in Cause No. 28,003 before Ainsworth, Dyer, and Simpson, Circuit Judges: On July 28, 1970, we affirmed the district court's denial of Sellars' petition for writ of habeas corpus. Sellars v. Beto, 5 Cir. 1970, 430 F.2d 1150. Petitioner subsequently sought certiorari in the Supreme Court. On June 29, 1972, the Supreme Court vacated our judgment in this case insofar as it left undisturbed the death penalty imposed upon Sellars, and remanded for further proceedings. Sellars v. Beto, 1972, 408 U.S. 937, 92 S. Ct. 2865, 33 L. Ed. 2d 756. In Furman v. Georgia, 1972, 408 U.S. 238, 92 S. Ct. 2726, 33 L. Ed. 2d 346, and companion eases, the Supreme Court held that the imposition and carrying out of sentence of death constituted cruel and unusual punishment in violation of the Eighth and Fourteenth Amendments. In consideration of the foregoing, IT IS ORDERED that our prior decision of July 28, 1970, is vacated and our prior mandate of September 21, 1970, thereon is recalled; and IT IS FURTHER ORDERED that the judgment of the district court is reversed and this cause is remanded to that court with directions to grant Sellars' petition for writ of habeas corpus should the State of Texas fail or refuse to resentence Sellars to a period not exceeding life imprisonment; and IT IS FURTHER ORDERED that in the event resentencing is determined to be inappropriate under Texas law, as the petitioner has asserted in his motion filed in this Court on July 10, 1972, the district court is directed to grant the writ of habeas corpus unless the State of Texas elects to retry Sellars within a reasonable time. IT IS FURTHER ORDERED that petitioner's application for bail and a new trial on remand is DENIED without prejudice to petitioner's right to apply to Texas courts for admission to bail. REVERSED and REMANDED WITH DIRECTIONS. APPENDIX B Text of the September 6, 1972, order of the Fifth Circuit Court of Appeals in Cause No. 28,003 before Ainsworth, Dyer, and Simpson, Circuit Judges: IT IS ORDERED that appellee's motion to withdraw the order of this Court dated August 22, 1972, in this cause be, and the same is hereby GRANTED, and the portion of said order commencing with the language: "In consideration of the foregoing," on page 2 of said order, is withdrawn. In lieu thereof the following is substituted: "On August 9, 1972, by his Proclamation No. 72-3243, the Governor of Texas, the Honorable Preston Smith, commuted the sentence of the petitioner-appellant Calvin Sellars from death to life imprisonment in the Texas Department of Corrections. Such a commutation is an appropriate and valid exercise of the Governor's authority. See Whan, Appellant, v. State of Texas, Appellee, Tex.Crim.App.1972, 485 S.W.2d 275, by the Court of Criminal Appeals of Texas upon the going down of the mandate of the Supreme Court of the United States in Whan v. Texas, 1971, 403 U.S. 946, 91 S. Ct. 2281, 29 L. Ed. 2d 856. There that Court in a similar situation reaffirmed the judgment of the trial court after the Governor of Texas granted a commutation of sentence from death to life imprisonment. The order of the Supreme Court was deemed by the Texas Court of Criminal Appeals to be satisfied by this procedure. We conclude that the action of the Governor of Texas in granting a commutation of Sellars' sentence from death to life imprisonment has in effect rendered moot the question before 860 this Court and has satisfied the mandate of the Supreme Court of the United States. In consideration of the foregoing, IT IS ORDERED that insofar as they relate to the death sentence originally imposed upon the petitioner-appellant, the prior judgment of the district court and this Court's affirmance thereof sub nomine Sellars v. Beto, 1970, 430 F.2d 1150, are now vacated and set aside as moot. In all other respects our opinion and judgment at 430 F.2d 1150 is adhered to." FINAL JUDGMENT After due consideration of the pleadings submitted as a matter of record in this case, it is the opinion of this court, as expressed in its Memorandum and Order of this date, that the application for writ of habeas corpus on behalf of Calvin Sellars, Arlice J. Huffman, and John F. Burns should be, and it hereby is, denied. Accordingly, these cases are dismissed. This is a Final Judgment. NOTES [1] A copy of this order is included as Appendix A. [2] A copy of that order is included as Appendix B. [3] The legality of the Governor's second commutation of petitioner Sellars' sentence from life imprisonment to 99 years is not at issue in this case. [4] The order in question has been similarly interpreted by Judge Carl O. Bue in Whan v. Estelle, Civil Action No. 74-H-963, S.D. Tex., December 19, 1974. "The inescapable conclusion to be drawn from the Sellars order, which is binding upon this Court, is that a commutation invoked by the Governor after the Supreme Court has vacated the judgment `as to the death penalty only' renders moot the question presented."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367431/	25 Ariz. App. 465 (1976) 544 P.2d 682 Robert W. CHAPLINE, Sr., and Robert W. Chapline, Jr., Appellants, v. NORTH AMERICAN ACCEPTANCE CORP., a Georgia Corporation, and North American Acceptance Corporation of Arizona, Inc., an Arizona Corporation, Appellees. No. 2 CA-CIV 1504. Court of Appeals of Arizona, Division 2. January 6, 1976. Rehearing Denied February 11, 1976. Review Denied March 9, 1976. 466 Evans, Kitchel & Jenckes, P.C., by Gary H. Fry, Phoenix, for appellants. Jennings, Strouss & Salmon by Charles E. Jones, Phoenix, for appellees. OPINION HOWARD, Chief Judge. In 1967 appellants, hereinafter referred to as Chapline, bought a lot from Desert Carmel Development Corporation (Desert Carmel) in Casa Grande, Arizona. The lot was purchased under a contract for the sale of real estate. Chapline contracted with Empire Construction Company (Empire) to build a house on their lot. The total contract price was $18,450. Although Empire was to complete construction on the house within three months, a year later it had not been completed. Because of the precarious financial condition of Empire, Desert Carmel informed Chapline not to make any further payments to Empire; that Empire had been removed from the job, and Desert Carmel would complete the construction. At this time Chapline had paid to Empire $16,156.27. Additional credits left a balance of $844.93 which Chapline owed for the completion of the house. In order to complete construction Chapline entered into a written contract with Desert Carmel to complete the construction for the balance due on the construction contract. The contract with Desert Carmel stated: "This contract will consist of supplying material and labor necessary to complete the verbally promised concrete walk and driveway and the items we discussed this morning: 1. Remove stops (living room windows) and recaulk. 2. Waterproof outside planter box. 3. Fix storage room lock (adjacent to carport). 4. Replace soap dish in bathroom area. 467 5. Install & furnish lavatory (master bedroom). All of the above described items to be completed for the contract sum of $844.93 incl. tax." Before the construction could be completed, a windstorm damaged the Chapline house and other houses under construction in the Desert Carmel subdivision. At the time of the storm Chapline had no insurance on the house but Desert Carmel Development Corporation had a policy with Hawaiian Insurance & Guarantee Company, Ltd., the applicable terms of which will be later set forth. Desert Carmel filed a proof of loss affidavit with the insurance company for damage to certain homes including the Chapline home. In the affidavit Desert Carmel stated it was the sole owner of the home. After a thorough investigation, Hawaiian Insurance Company paid Desert Carmel for the losses including the sum of $22,915.84 for the damage to the Chapline home. Desert Carmel did not pay any of the proceeds to Chapline but instead spent the money for its own purposes. The adjuster who investigated the claim testified at trial that he did not know Chapline was the owner of the house and had he known, he would not have recommended to the insurance company that the claim be paid. Appellees North American Acceptance Corporation and North American Acceptance Corporation of Arizona were financing Desert Carmel in the development of the subdivision containing Mr. Chapline's lot. Due to the unsteady financial position of Desert Carmel, North American Acceptance Corporation formed a wholly owned subsidiary, North American Acceptance Corporation of Arizona, and caused the assets of Desert Carmel to be transferred to the subsidiary. At the time of the transfer of these assets Desert Carmel was insolvent. The first amended complaint was in five counts. Counts One and Two were only against Desert Carmel, alleging receipt of, and conversion by Desert Carmel of the insurance proceeds. Counts Three and Five, were against North American alleging a transfer in fraud of creditors. Count Four was against Desert Carmel and North American alleging fraudulent conveyance. North American answered all counts of the complaint. Desert Carmel also filed an answer to the complaint but later was defaulted by Chapline for failure to answer interrogatories. A default judgment was entered against Desert Carmel and in favor of Chapline for $22,915.84 for the insurance proceeds allegedly converted, $4,146.75 for costs incurred in borrowing the amount of the allegedly converted proceeds, and $20,000 for exemplary damages. Chapline's claim against appellees was tried to a jury. By means of a special interrogatory the jury was asked whether the insurance was paid to Desert Carmel by mistake. The jury answered this interrogatory in the negative and returned a verdict against appellees in the sum of $22,965.84 (the $22,915.84 paid to Desert Carmel by the insurance company plus $50 the deductible amount on the policy). Appellees moved for judgment n.o.v. and the trial court granted the motion to the extent that a remittitur was ordered, reducing the judgment to $4,364.38. This amount was the balance owed by Chapline to Desert Carmel on the contract for the sale of real estate at the time the house was damaged. Chapline appealed. Appellees also perfected an appeal, which we deem abandoned since they filed no briefs as to their cross-appeal. Appellants present the following questions for review: "1. Did Mr. Chapline's judgment against Desert Carmel conclusively establish his status as a `creditor'? 2. If not, does NAAC have standing to challenge the propriety of the payment of insurance proceeds to Desert Carmel? 3. If the judgment is not conclusive on the issue of Mr. Chapline's `creditor' 468 status, and NAAC does have standing to challenge the propriety of the payment of insurance proceeds to Desert Carmel, were the insurance proceeds properly paid to Desert Carmel?" It was incumbent upon appellants to prove that they were creditors within the meaning of A.R.S. Sec. 44-1004. Appellants initially attempted to do this by offering into evidence their default judgment against Desert Carmel as conclusive proof of their creditor status. The trial court refused to admit the judgment. Appellants claim this was error. Since the jury returned a verdict in their favor, appellants would normally not be aggrieved by the error. However, appellants claim that the judgment was conclusive under the doctrine set forth in Valley Bank v. Malcolm, 23 Ariz. 395, 204 P. 207 (1922), ergo, the trial court could not award them less than $22,965.84, the amount of their judgment against Desert Carmel. We do not agree. In the case of Valley Bank v. Malcolm, supra, the creditor first secured a judgment against the debtor and then, in a separate action, sued the transferee in an action to set aside the transfer of the debtor's assets to the transferee. In denying the transferee the right to contest the judgment in favor of the creditor against the transferor-debtor, the court stated at 23 Ariz. 395, 402-403, 204 P. 207, 210: "Treating the action as one brought by a creditor to enforce payment of his debt out of the assets which were transferred by the debtor corporation, to impress a trust in his favor upon such assets, and to recover to the extent of the assets received by the purchaser, the ruling below is well sustained by authority. The plaintiff in such an action must necessarily show that he is a creditor of the corporation whose assets have been conveyed and from whom he is unable directly to collect his debt. Whether he brings such an action without reducing his debt to judgment, as he may, under the rule laid down in First National Bank v. McDonough, 19 Ariz. 223, 168 P. 635, or whether he first recover judgment and then bring his action, he must in one form or another establish his claim to be a creditor of the corporation whose property has been conveyed away to his prejudice. The rule applicable to ordinary creditor's bills has long been settled. If the plaintiff allege a debt not reduced to judgment, he must, of course, prove the debt. If he allege a recovery of judgment, he must likewise prove the judgment, and the judgment is admissible for the purpose of establishing that plaintiff is a creditor of the corporation whose assets he seeks to follow and from which to collect the amount of his debt. A judgment against a donor or grantor, whether rendered prior or subsequent to conveyance, which is impeached, is, in the absence of fraud or collusion, conclusive evidence of a debt existing at the time of its rendition and the amount of the indebtedness, and the grantee can never inquire into its merits nor allege errors or irregularities which could only be corrected in an appellate tribunal. In the ordinary creditor's suit a judgment is not only admissible in evidence for the purpose of establishing the plaintiff's debt, but in the absence of fraud or collusion is conclusive, not only upon the parties to it, but other creditors or transferees of the judgment debtor. [citations omitted] By pleadings and proof appellants sought to show that the judgment was erroneous, and that in fact Malcolm had no cause of action. It was error to admit evidence for this purpose, but, since the court found for the plaintiff, the error was harmless...." The rationale of the Valley Bank case is that an attack on the previous judgment constituted an impermissible collateral attack. "Such judgment regular upon its face is immune from attack in any action other than that in which it was rendered except upon proof of fraud or want of jurisdiction, [citations omitted] and is conclusive, 469 whether rendered on default or after contest, as to the relation of debtor and creditor between the parties and the amount of indebtedness and cannot be collaterally impeached by the grantee of the debtor in a suit to set aside the conveyance as fraudulent. 37 C.J.S. Fraudulent Conveyances § 349, p. 1182." Dillon Tire Service, Inc. v. Pope, 243 S.C. 293, 133 S.E.2d 813, 815 (1963). But appellees' attack in this case was not a collateral attack but was in the same proceedings. The rule in Valley Bank v. Malcolm, supra, was not applicable. In a similar case, Fidelity & Casualty Co. v. Bank of Plymouth, 218 Iowa 1083, 255 N.W. 713, 717 (1934) the court stated: "The appellant claims that the lower court erred in not entering a judgment against Valentine, who made no defense, and that, since Valentine made no defense, the appellant is entitled to judgment against him because Valentine was in default. But the record shows that Gertrude B. Huntley, whom the appellant claims was a fraudulent grantee, interposed a defense. She had a right to interpose any defense to a creditor's claim that the alleged debtor could interpose, and if the defense is successfuly [sic] made, then the creditor has no right to assail the conveyance. This is the rule laid down in 27 C.J., 578, § 645: `Where a party claiming to be a creditor attacks a conveyance by the alleged debtor as in fraud of his rights, the primary fact to be established is the existence of the debt to which the property conveyed would be subject if the conveyance did not stand in the way, obstructing legal remedies to reach it, and the demand of the creditor must be subject to examination in order to see whether he has a right as such to question the validity of the conveyance. Parties claiming under the conveyance have not only the right to require proof of the debt, but the grantee in a conveyance attacked as fraudulent is entitled to set up any defenses not merely personal that the grantor might have invoked in a direct suit against him on the claim, ...'" Under the insurance policy here, Desert Carmel was the insured and Business Finance Company, Inc. was the beneficiary of a loss payable clause contained in the policy. The policy was for dwellings in the course of construction and covered such dwellings "... only while the property of the insured, or the property of others for which insured is legally liable...." The insurance covered such dwellings until thirty days after occupancy of the property. The policy stated that if the subject of the insurance was a building or ground not owned by the insured in fee simple, such property was excluded from coverage. The exclusion provisions further stated: "This insurance shall not be void nor in any way prejudiced: if the interest of the insured be other than unconditional and sole ownership." The construction on Chapline's lot was specifically listed in the insurance policy. It is appellees' position that Desert Carmel's insurable interest was limited to the balance due from Chapline on its contract for the sale of real estate and that all amounts paid Desert Carmel over and above this amount were paid by mistake. Chapline contends this defense is only available to the insurance company but appellees counter by asserting they are not attempting to show title in a third person but only that Chapline has no interest in the proceeds. They contend that since Chapline was not the named insured, Chapline has not shown any right to the proceeds. We do not agree with appellees. The relationship between Desert Carmel and Chapline was that of vendor and vendee. When the improvements were placed on the lot they became part of the real property. Fish v. Valley Nat. Bank of Phoenix, 64 Ariz. 164, 167 P.2d 107 (1946). The purchaser under a contract of sale is the equitable and beneficial owner of the property and bears the risk of loss. Kresse v. Ryerson, 64 Ariz. 291, 169 P.2d 850 (1946). The rule applicable when the 470 insurance is in the name of the vendor and the risk of loss falls on the vendee is set forth in Brakhage v. Tracy, 13 S.D. 343, 83 N.W. 363, 364 (1900): " * * When the insurance was obtained, appellant held the policy for the benefit of himself to the extent of his interest in the land, and payment of the price agreed upon according to the terms of the contract is all he can rightfully demand. Confessedly, he entered into a valid contract to sell and convey the real estate described in the complaint for consideration which respondent, without any default, stands ready to pay, less the amount received by him from the insurance company in settlement of a loss which she alone has sustained. As between the parties to a contract like this, the indemnity, when paid by the company, belongs to the one upon whom the loss falls; and payment of the entire amount collectible according to the contract, after allowing a credit of $800 [insurance money], entitles respondent to the deed which appellant obligated himself to execute. Having thus alienated this improved real property by an executory contract, he became the trustee of the policy for the benefit of respondent, and in such cases failure to perform on the part of the vendee is the only condition that will relieve a vendor from the duty of executing his trust.... Respondent being the equitable owner, and as such compelled to sustain a $1,350 loss, it certainly does not go beyond the reason of the rule to require appellant, who has not been injured, to credit her with this insurance money, and upon receipt of the balance due execute a deed in conformity with the contract of sale...." See also William Skinner & Sons Shipbuilding & D.D. Co. v. Houghton, 92 Md. 68, 48 A. 85 (1900); 44 Am.Jur.2d Insurance, Sec. 1652; Annot. 37 A.L.R. 1324 (1925). As between Desert Carmel and Chapline, Desert Carmel was a trustee for the benefit of Chapline of all funds in excess of the balance due on the contract for sale. The defense of lack of coverage is a defense available in this situation only to the insurance company. Desert Carmel could not defend an action against it by Chapline by asserting that the insurance company should never have paid the money. The cross-appeal is dismissed. The judgment is set aside and the trial court is ordered to enter a judgment in favor of appellants and against appellees in the sum of $19,065.35 (the $22,915.84 in insurance proceeds less the $3,850.49 due on the contract of sale). KRUCKER and HATHAWAY, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367391/	400 F. Supp. 587 (1975) UNITED STATES of America ex rel. Henry FORD, Petitioner, v. STATE OF NEW JERSEY et al., Respondents. Civ. No. 75-198. United States District Court, D. New Jersey. September 18, 1975. 588 589 Henry Ford, pro se. William F. Hyland, Atty. Gen. of N. J., by Robert A. Rubenfeld, Deputy Atty. Gen., for respondents. OPINION STERN, District Judge: Petitioner was charged in Hudson County Indictment No. 374-72 with the first degree murder of Joshua Fields, in Jersey City, New Jersey, in violation of N.J.S.A. 2A:113-1 and 2A:113-2. On March 26, 27, 28 and 29, and April 2, 1973, petitioner was tried before the Honorable Thomas S. O'Brien, J.S.C., and a jury. Petitioner was found guilty of the second degree murder of the deceased, who had sustained a broken jaw, broken nose, broken leg and various puncture wounds. On May 4, 1973, Judge O'Brien sentenced petitioner to a term of 25 to 30 years in the State Prison at Trenton. 590 Petitioner filed a Notice of Appeal to the Superior Court of New Jersey, Appellate Division, on June 14, 1973. In a per curiam opinion on October 4, 1974, the Appellate Division affirmed the conviction. No petition for certification to the New Jersey Supreme Court was filed in this matter. The petition for a writ of habeas corpus now before the Court was filed on February 4, 1975. Petitioner contends he was denied a fair trial, the effective assistance of counsel, due process of law and the equal protection of the laws, in violation of the Sixth and Fourteenth Amendments to the United States Constitution, because of the following errors at trial: (1) failure of the trial court to grant a continuance; (2) admission into evidence of a knife and certain hearsay evidence, notwithstanding its subsequent exclusion by the court; (3) the prosecutor's comments during summation; and (4) the placing of the petitioner at the rear of counsel beside a guard throughout the trial. Petitioner also grounds the petition on the alleged ineffective assistance of counsel. Petitioner bases that contention on four grounds: (1) failure of trial counsel to utilize the minutes of the preliminary hearing in cross-examining prosecution witnesses; (2) failure of counsel to introduce into evidence rent receipts which were in his possession at the time of the trial; (3) counsel's direction to defendant to sit behind counsel beside a guard; (4) failure of counsel on appeal to petition the Appellate Division for a rehearing to correct an error it allegedly made in Section IV(b) of the opinion of October 4, 1974. Before moving to the merits of petitioner's claims, the Court must determine whether he has exhausted all state remedies available to him. Fay v. Noia, 372 U.S. 391, 415-420, 83 S. Ct. 822, 9 L. Ed. 2d 837 (1963), 28 U.S.C. § 2254(b). Except for Points 1, 2 and 4, under ineffective assistance of counsel, petitioner has raised all claims asserted here in the state courts. The general issue of ineffective assistance of counsel, under which these new points arise, was presented to the state courts. Since the general issue was before the state courts, no interest would be served by barring petitioner from raising additional support for it now.[1] Petitioner appealed his conviction to the New Jersey Superior Court, Appellate Division, but did not seek appeal to the New Jersey Supreme Court. His time to petition for certification, however, has lapsed. R. 2:12-3. Accordingly, the Court finds petitioner has exhausted all available state remedies and will proceed to the merits. Fay v. Noia, supra, 372 U.S. at 391, 399, 83 S. Ct. 822; Canfora v. Davenport, 350 F. Supp. 1020, 1024 (D.N.J.1972). The first issue is the trial court's refusal to grant a continuance. Damaging testimony by Detective Adams, one of the police officers who investigated a complaint filed by Joshua Fields concerning possible narcotics activity in his apartment, was elicited for the first time at a voir dire on the first day of trial. Detective Adams testified on cross-examination, out of the presence of the jury, that petitioner had threatened Joshua Fields in Adams' presence hours before Fields' death. Detective Adams also stated that one Theodore Fleming had also been present at the time the threat had been uttered by petitioner. Neither the statement of petitioner nor the name of the eyewitness had been in the officer's report or available through discovery. Defense counsel moved for a mistrial or adjournment on the basis of 591 surprise, and on the basis of his need for time to locate the eyewitness and otherwise to meet Adams' testimony. (Tr. 23, 48-52) The court denied both motions. Noting that the prosecution would take three days to present its evidence, the court held that defense counsel would have adequate time to deal with Detective Adams' testimony. In addition, the State agreed to hold Adams' testimony until the conclusion of the case, thus permitting the defense an opportunity to investigate before being required to confront Adams before the jury. The State also agreed to make all possible efforts to locate Fleming so that he might be made available to the defense. Federal courts reviewing state proceedings have held that the granting of a continuance is within the sound discretion of the trial court. The exercise of that discretion will not be upset unless there is a showing of abuse. United States ex rel. Drew v. Myers, 327 F.2d 174, 181-182 (3d Cir. 1964); United States ex rel. Branzell v. Rundle, 294 F. Supp. 1338, 1339 (E.D.Pa.1968), aff'd 410 F.2d 371 (3d Cir. 1969).[2] Here, defense counsel had three days in which to prepare to meet Adams' testimony. A further continuance for that purpose does not appear to have been necessary, and its denial was neither an abuse of discretion nor a denial of due process. Petitioner's second claim is that he was unduly prejudiced by the admission into evidence of a "butcher knife." The knife was introduced during the testimony of Detective Rochford, who testified that the knife was found in a kitchen cupboard during a search of the deceased's apartment. (Tr. 190-191) Following the testimony of the State Medical Examiner, however, a motion to strike the knife from evidence was granted upon a finding of the trial court that no evidence had been produced to link the knife to the wounds suffered by the deceased. (Tr. 480-481, 496-497) No fundamental unfairness to petitioner has been demonstrated in this regard. The challenged hearsay evidence was testimony of Mrs. J. Mincey, the deceased's half-sister. She testified, over objection, that Fields had told her of previous arguments with petitioner. She further testified that the deceased said that petitioner had threatened him with a knife. (Tr. 257-258) This testimony was stricken on the last day of the trial. (Tr. 354, 362) On several occasions, the court instructed the jury not to consider the knife or the hearsay evidence. (Tr. 516, 597, 612) Whatever prejudice petitioner suffered from the initial error in admitting the evidence must be measured against the later curative instructions. Although the value of such instructions had been questioned,[3] the better view is that "[n]ot every admission of inadmissible hearsay or other evidence can be considered to be reversible error unavoidable through limiting instructions; instances occur in almost every trial where inadmissible evidence creeps in, usually inadvertently. `A defendant is entitled to a fair trial but not a perfect one.' Lutwak v. United States, 344 U.S. 604, 619, 73 S. Ct. 481, 97 L. Ed. 593; see Hopt v. Utah, 120 U.S. 430, 438, 7 S. Ct. 614, 30 L. Ed. 708; cf. Federal Rule of Criminal Procedure 52(a)." Bruton v. United States, 391 U.S. 123, 135, 88 S. Ct. 1620, 1627, 20 L. Ed. 2d 476 (1968). 592 The United States Court of Appeals for the Third Circuit, like the New Jersey courts, has often found sufficient remedial value in the instructions of trial courts to disregard references to inadmissible evidence. United States ex rel. Stoner v. Myers, 329 F.2d 280, 283-284 (3d Cir. 1964) (error in admitting defendant's criminal record was completely remedied by cautionary instruction); United States ex rel. Paterson v. Rundle, 305 F. Supp. 1242 (E.D.Pa.1969) (cautionary instruction as to inadmissibility of guilty pleas of defendant's co-conspirators held sufficient); State v. LaPorte, 62 N.J. 312, 317-319, 301 A.2d 146, 149-150 (1973). In this case, this Court is satisfied that any possible prejudice to petitioner was completely remedied by the trial court's thorough and repeated instructions to the jury to disregard the improperly admitted evidence. Petitioner's third argument is that the prosecutor's comments during summation were so prejudicial that he was denied a fair trial, notwithstanding the fact that the remarks were stricken by the court, which twice instructed the jury to disregard the comments. (Tr. 578, 595-597) Under our system of law, the prosecutor in a criminal case is no ordinary litigant. As a representative of the State, "he is in a peculiar and very definite sense the servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnestness and vigor indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one." Berger v. United States, 295 U.S. 78, 88, 55 S. Ct. 629, 633, 79 L. Ed. 1314 (1935). The New Jersey Supreme Court has held that, although the prosecutor may sum up graphically, he is limited to the evidence and to reasonable inferences therefrom. State v. Mayberry, 52 N.J. 413, 245 A.2d 481, 493 (1968), cert. denied, 393 U.S. 1043, 89 S. Ct. 673, 21 L. Ed. 2d 593 (1968); State v. Johnson, 31 N.J. 489, 158 A.2d 11, 22-23 (1953), cert. denied 368 U.S. 933, 82 S. Ct. 370, 7 L. Ed. 2d 195 (1961). Accord, United States v. Somers, 496 F.2d 723 (3d Cir. 1974), cert. denied 419 U.S. 832, 95 S. Ct. 56, 42 L. Ed. 2d 58 (1974). While a high standard of prosecutorial conduct is to be expected of state and federal prosecutors, this Court's review of state prosecutorial conduct is restricted. As the United States Supreme Court has stated, endorsing the language of the First Circuit, review here "`is the narrow one of due process, and not the broad exercise of supervisory power that [we] would possess in regard to [our] own trial court.' [473 F.2d, at 1240]" Donnelly v. DeChristoforo, 416 U.S. 637, 642, 94 S. Ct. 1868, 40 L. Ed. 2d 431 (1973); United States ex rel. Haynes v. McKendrick, 350 F. Supp. 990, 997 (S.D.N. Y.1972), aff'd 481 F.2d 152 (2d Cir. 1973). In the present case, testimony by the Medical Examiner established that the deceased suffered "an extensive beating." (Tr. 413) The "marks of violence" on his body included five cuts on his scalp, five cuts on his face and neck, 27 burns, cuts on both legs and his nose, a broken jaw and a broken right leg. (Tr. 406-409) Even in this context, however, the prosecutor's comments that Fields was "carved up like a piece of meat" and "tortured to death" were improper and inflammatory. The trial judge sustained objections to those remarks, struck the word "tortured" and instructed the jury to disregard such adjectives. In addition, in his charge to the jury the trial judge twice emphasized that the jury was to disregard stricken portions of the summation, and to decide the case solely on the merits. (Tr. 595-597) 593 Given the swift and repeated action of the trial judge, this Court cannot say that the prosecutor's remarks, though improper, rise to the level of a due process violation. Donnelly v. DeChristoforo, supra, 416 U.S. at 642, 94 S. Ct. 1868; United States ex rel. Paxos v. Rundle, 491 F.2d 447, 453 (3d Cir. 1974). Compare United States ex rel. Perry v. Mulligan, 399 F. Supp. 1285 (D. N.J.1975). Petitioner's fourth contention is that the trial court erred in allowing defendant to be seated behind counsel beside a guard throughout the trial. Although no mention of the matter is made in the transcript, the petition, at 3, and the State's brief, at 13, both indicate that defense counsel requested the seating arrangement. It is unclear, however, whether the guard was assigned to petitioner or happened to be stationed at that position. In either situation, the question arises whether the trial judge acted properly. It has been recognized that, as a corollary to the presumption of innocence, a criminal defendant is "generally entitled to the physical indicia of innocence." Kennedy v. Cardwell, 487 F.2d 101, 104 (6th Cir. 1973). Cf. Gaito v. Brierly, 485 F.2d 86 (3d Cir. 1973) (prison garb held to be prejudicial to defendant). Balanced against this desire to preserve a defendant's appearance of innocence is the court's interest in safeguarding counsel, jury and other participants in the trial proceeding. Accordingly, there is entrusted to the trial judge a broad discretion in imposing restraints on disruptive or potentially disruptive defendants. Illinois v. Allen, 397 U.S. 337, 90 S. Ct. 1057, 25 L. Ed. 2d 353 (1970); Magee v. Nelson, 455 F.2d 275, 276 (9th Cir. 1972). The least prejudicial means of ensuring an orderly trial is the use of guards. Absent serious abuse, the presence of guards is not a basis for relief. McCloskey v. Boslow, 349 F.2d 119, 121 (4th Cir. 1965) (the presence of six armed guards during a "defective delinquency proceeding" held to be reversible error); Odell v. Hudspeth, 189 F.2d 300 (10th Cir. 1951). When more blatant physical restraints are used, such as shackles, the state trial court should hold a hearing so that evidence supporting the decision is made part of the record. Absent such a record, an evidentiary hearing in federal court is required to determine whether use of the restraint was justified. Kennedy v. Cardwell, supra, at 107. In the present case, although such extreme measures were not employed, there is no indication why the guard was used, and more importantly, whether he was in plain clothes or in uniform. Were it not for the overwhelming evidence against Ford, an evidentiary hearing would be required to supplement the record. However, even the presence of a guard in uniform could not, in the context of this case,[4] constitute anything but "harmless error." Harrington v. California, 395 U.S. 250, *594 89 S. Ct. 1726, 23 L. Ed. 2d 284 (1969). The issue is academic, and therefore no evidentiary hearing is necessary. Townsend v. Sain, 372 U.S. 293, 312, 83 S. Ct. 745, 9 L. Ed. 2d 770 (1962). Finally, petitioner claims ineffective assistance of counsel. The first basis for that assertion is the failure of trial counsel to utilize minutes from the preliminary hearing in cross-examining witnesses. Though some deviation in the testimony of two witnesses, George and Madeline Mack, did occur, defense counsel effectively brought out that confusion without the use of the minutes. (Tr. 63, 97; preliminary hearing, Tr. 4) The failure of trial counsel to introduce petitioner's rent receipts in evidence is also claimed to support the ineffective assistance allegation. However, the introduction of such evidence could only have shown that petitioner had paid his bills, and not that he had not quarreled with the deceased. Petitioner claims counsel's request that petitioner be seated behind the counsel table beside a guard evidences the ineffectiveness of counsel, since it is petitioner's contention that such an arrangement prejudiced him before the jury. As has been noted, the control of defendants in court is within the sound discretion of the trial judge. Presumably the interests of counsel and the court coincided in this matter. Petitioner does not claim to have been unable to confer with counsel. Finally, petitioner cites the failure of counsel to request a rehearing on the denial of his appeal, on the ground that petitioner's pro se appellate brief and the appellate court's description of the corresponding claim in its opinion did not match. Petitioner's pro se brief to the Appellate Division stated: 2. That the trial judge erred in allowing the defendant to be seated in the rear of counsel beside a guard throughout the entire trial . . . . Defendant believes this act to be prejudicial to the eyes and mind of the jury in view of the violence involved in the charge. The appellate court, in Section IV of its opinion stated: In his pro se brief defendant contends, as plain error that . . . (b) error resulted in permitting a guard to be seated by him during the trial. The standard of adequacy of representation is "the exercise of customary skill and knowledge which normally prevails at the time and place." Moore v. United States, 432 F.2d 730, 736-737 (3d Cir. 1970). A review of the record here reveals that defense counsel demonstrated adequate preparation and knowledge of the law. He raised numerous objections, many of which were sustained, and conducted vigorous cross-examination of the witnesses. In the face of an overwhelming case, he did all that he legitimately could. As one New Jersey court has said, "[c]ounsel is not obligated to raise issues which are obviously frivolous or specious." State v. Hughes, 128 N.J.Super. 363, 369, 320 A.2d 182, 185 (App. Div.1974). The claim of ineffective assistance of counsel, like the other issues raised by petitioner, is without merit. Accordingly, the petition for a writ of habeas corpus will be denied. There is no probable cause for appeal. NOTES [1] Even if petitioner is considered not to have exhausted his state remedies with regard to the claim of ineffective assistance of counsel, the Third Circuit has held that the habeas corpus statute "permits denial of a petition for the Great Writ on its merits, though state remedies may not be exhausted." United States ex rel. Kelly v. Maroney, 414 F.2d 1228, 1231 (3d Cir. 1969) (emphasis in original). [2] The rule is the same in New Jersey. See State v. Tulenko, 133 N.J.L. 385, 44 A.2d 350, 353-354 (1935); State v. Lamb, 125 N.J.Super. 209, 310 A.2d 102, 104 (App.Div. 1973). [3] See United States v. Grunewald, 233 F.2d 556, 573 (2d Cir. 1956), rev'd 353 U.S. 391, 77 S. Ct. 963, 1 L. Ed. 2d 931 (1957); State v. Samurine, 47 N.J.Super. 172, 135 A.2d 574 (App.Div.1957) (reference to defendant's criminal record held not successfully eradicated by instructions). [4] A brief review of the evidence reveals that Ford's guilt was clearly established. In addition to the testimony of Detective Adams who stated that Ford, a few hours prior to the murder, told Fields "I'll get you, you punk," George and Madeline Mack testified that Ford was in the deceased's apartment on the night of the murder. Mr. Mack also testified that on one of the three occasions on which he asked Ford to stop the "tumbling" noise emanating from the apartment, Ford appeared at the door with a knife in hand. Especially damaging was the testimony of Stella Hill, a friend of Ford. She testified that Ford told her, a day after the incident, that he had been fighting with Fields and that he feared he had killed him. Hill's son, Marvin, was also called as a witness for the State. He stated that Ford, during his conversation with him, had asked him to help get rid of a body. The testimony of both Hills was partially substantiated by a Mrs. Jordan, who was present when the conversations between Ford and the Hills took place. Counsel for the defense vigorously contested the credibility of the State's witnesses but introduced no witnesses of his own.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367437/	173 S.W.3d 22 (2005) In re ESTATE OF Frank SOARD. Court of Appeals of Tennessee, Eastern Section, at Knoxville. September 21, 2004 Session. February 28, 2005. Permission to Appeal Denied August 29, 2005. 23 Robert N. Goddard, Maryville, TN, for Appellant. Martha S.L. Black, Maryville, TN, for Appellee. Permission to Appeal Denied by Supreme Court August 29, 2005. CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which HERSCHEL P. FRANKS, P.J., and D. MICHAEL SWINEY, J., joined. OPINION This case involves a dispute between a widow and the personal representative of her husband's estate. The parties differ as to the correct interpretation of Tenn.Code Ann. § 31-4-101 (2001), the statute setting forth the criteria pursuant to which a surviving spouse's elective share is computed. The trial court adopted the estate's construction of the statute and subtracted the widow's exempt property, homestead allowance, and year's support allowance from the value of her percentage share of the net estate in arriving at the elective-share amount to which she is entitled. We disagree with the trial court's interpretation of the statute. Accordingly, we reverse the judgment of that court. I. The parties filed a stipulation of material facts in the trial court. The stipulation provides, in pertinent part, as follows: Frank Soard died on the 14th day of July, 2003. Frank Soard was survived by his wife, Sarah Soard, whom he had married on the 24th day of June, 1995. The Parties agreed that pursuant to [Tenn.Code Ann.] § 30-2-209, Sarah Soard is entitled to payment of $5,000.00 for Homestead. The Parties agreed that pursuant to [Tenn.Code Ann.] § 30-2-102, Sarah Soard is entitled to [a] Year's Support in the amount of $13,656.00. The Parties agreed that pursuant to [Tenn.Code Ann.] § 30-2-101, Sarah Soard is entitled to $37,848.92 in Exempt Property. Inasmuch as Frank and Sarah Soard had been married more than six years but less than nine years, the Parties agreed that Sarah Soard was entitled to an Elective Share of Thirty Percent (30%) of the net estate as set out in [Tenn.Code Ann.] § 31-4-101(a). Pursuant to [Tenn.Code Ann.] § 31-4-101(b), the Parties agreed to the following determination of the net estate as of November 11, 2003, the Parties acknowledging, however, that the administrative expenses are subject to increase based on attorneys fees and expenses incurred in this Elective Share litigation: Gross Estate $872,253.32 Less: ORNL Mortgage $29,408.23 Funeral and Admin. Exp. 78,795.27 Exempt Property 37,848.92 Homestead 5,000.00 Year's Support 13,656.00 164,708.42 __________ ___________ Net Estate $707,544.90 =========== 30% of Net Estate $212,263.47 =========== After determining Thirty Percent (30%) of the net estate as set out in [Tenn.Code Ann.] § 31-4-101(a) and (b), the 24 Parties agreed that said maximum Elective Share amount is $212,263.47, but the Parties disagreed as to how that amount is to be reduced pursuant to [Tenn.Code Ann.] § 31-4-101(c). (Paragraph numbering in original omitted). Although not a part of the parties' written stipulation, it is abundantly clear from the record that Ms. Soard filed a petition for an elective share. II. Tenn.Code Ann. § 31-4-101, as it existed[1] at the time of Mr. Soard's death, i.e., July 14, 2003, provides as follows: (a)(1) The surviving spouse of an intestate decedent, or a surviving spouse who elects against a decedent's will, has a right of election, unless limited by subsection (c), to take an elective-share amount equal to the value of the decedent's net estate as defined in subsection (b), determined by the length of time the surviving spouse and the decedent were married to each other, in accordance with the following schedule: If the decedent and the surviving The elective-share spouse were married to percentage is: each other: less than 3 years 10% of the net estate 3 years but less than 6 years 20% of the net estate 6 years but less than 9 years 30% of the net estate 9 years or more 40% of the net estate (2) For purposes of determining the total number of years to be applied to the computation provided in this subsection, the number of years persons are married to the same person shall be combined. The years do not have to be consecutive, but may be separated by divorce. All years married shall be counted toward the total number of years for purposes of this section. (b) The value of the net estate includes all of the decedent's real and personal property subject to disposition under the provisions of the decedent's will or the laws of intestate succession, reduced by the following: secured debts to the extent that secured creditors are entitled to realize on the applicable collateral, funeral and administration expenses, and award of exempt property, homestead allowance and year's support allowance. (c) After the elective-share amount has been determined in accordance with the foregoing subsections (a) and (b), the amount payable to the surviving spouse by the estate shall be reduced by the value of all assets includable in the decedent's gross estate which were transferred, or deemed transferred, to the surviving spouse or which were for the benefit of the surviving spouse. For purposes hereof, the decedent's gross estate shall be determined by the court in the same manner as for inheritance tax purposes pursuant to [Tenn.Code Ann.] §§ 67-8-301 et seq., except that the value of any life estate or trust for the lifetime benefit of the surviving spouse shall be actuarially determined. (d) The elective-share amount payable to the surviving spouse is exempt from the claims of the unsecured creditors of the decedent's estate. (Emphasis added). For ease of reference, we will hereinafter sometimes refer to this statute as "the elective-share statute" or "the current elective-share statute." III. The issue before us can be simply stated as follows: Does the "reduction" language set forth in subsection (c) of Tenn.Code Ann. § 31-4-101 "the amount payable to the 25 surviving spouse by the estate shall be reduced by the value of all assets includable in the decedent's gross estate which were transferred, or deemed transferred, to the surviving spouse or which were for the benefit of the surviving spouse" contemplate the deduction, from a surviving spouse's percentage share of the net estate, of the value of the surviving spouse's exempt property, homestead allowance, and year's support allowance? The trial court held that "subsection (c) precisely states that all assets includable in the decedent's gross estate which are payable to the surviving spouse must be credited against the maximum [e]lective [s]hare to determine the actual amount of the [e]lective [s]hare payable to the surviving spouse." In its order, the trial court concluded that based [up]on the clear language of [Tenn.Code Ann.] § 31-4-101(c), the amounts paid to the surviving spouse for [h]omestead, [y]ear's [s]upport and [e]xempt [p]roperty, as assets included in the decedent's gross estate, are sums which must be credited against the maximum amount available as an [e]lective [s]hare to determine the amount "payable" to the surviving spouse. As far as we can determine, this case presents a question of first impression. Since the material facts are not in dispute, our de novo review is one of law and, hence, unburdened by a presumption of correctness as to the trial court's judgment. Southern Constructors, Inc. v. Loudon Co. Bd. of Educ., 58 S.W.3d 706, 710 (Tenn.2001). IV. In the instant case, the parties stipulate that the gross estate is valued at $872,253.32. However, they do not identify the component parts of the "gross estate." Furthermore, there is nothing in the other parts of the record which sets forth with specificity the items included within this concept. However, since the "gross estate" stipulation reflects that it is made "[p]ursuant to [Tenn.Code Ann.] § 31-4-101(b)," we assume that this starting-point number of $872,253.32 comprises, in the words of the aforesaid statutory provision, the value of "all of the decedent's real and personal property subject to disposition under the provisions of the decedent's will or the laws of intestate succession."[2] It is clear that this language contemplates assets that pass in probate and not those that pass outside of probate. The parties further stipulateagain pursuant to Tenn.Code Ann. § 31-4-101(b) that the value of the "net estate" is $707,544.90. They also agree that the maximum elective-share amount, determined in accordance with subsections (a) and (b) of the elective-share statute, is $212,263.47. Finally, they stipulate that subsection (c) of the elective-share statute requires that Ms. Soard's elective-share amount be reduced by the following items:[3] Social Security Payment $ 250.00 VA Death Benefit 600.00 Joint Assets Passing Outside Probate 20,891.82 __________ Total $21,741.82 ========== 26 We now reach the point of the parties' very sharp disagreement. The estate argues that, even though Ms. Soard's award of exempt property, homestead allowance, and year's support allowance have already been subtracted from the value of "the decedent's real and personal property subject to disposition under the provisions of the decedent's will or the laws of intestate succession" as a part of the computation of the net estate under subsection (b) of the elective-share statute, these three items must be subtracted again, this time from the value of the widow's percentage share of the net estate, in order to arrive at the elective-share amount payable to the surviving spouse. The estate maintains that the further deduction of these three statutory entitlements is mandated by subsection (c) of the elective-share statute. V. The effect of the parties' disagreement in monetary terms is illustrated thusly: Widow's Estate's Computation Computation Elective-share amount per subsections (a) & (b) $212,263.47 $212,263.47 Less: Agreed-upon deductions 21,741.82 21,741.82 ___________ ___________ $190,521.65 $190,521.65 Less: Widow's Exempt Property, Homestead, N/A 56,504.92 and Year's Support ____________ ___________ Elective-Share Amount due Widow $190,521.65 $134,016.73 ============ =========== VI. Ms. Soard argues that the critical language in subsection (c) of the elective-share statute pertains to assets that are transferred to a surviving spouse outside the estate. She points to language in our case of In re Estate of Morris, 104 S.W.3d 855 (Tenn.Ct.App.2002), which she claims is supportive of her position. She also relies upon an illustration of how the elective-share statute is applied as found in 18 Albert W. Secor, Tennessee Practice: Tennessee Probate § 10.5 (2d ed.2002). She notes that in neither authority is mention made of subtracting exempt property, homestead or the year's support allowance from the surviving spouse's percentage share of the net estate. The widow further argues that the estate's interpretation of the statute runs afoul of well-established rules of statutory construction. She contends that to construe the statute as requiring the deduction twice of the aforesaid three items "would frustrate the purpose of the legislation." She argues that the interpretation placed on the statute by the estate renders this legislative enactment "absurd, unjust or futile." Finally, the widow argues that the double deduction of these three items "would not be sensible, would work a manifest inconvenience, would produce an absurd result and would be unjust." VII. The estate counters by pointing out that the "reduction" concept embodied in subsection (c) of the elective-share statute was not in the elective-share statute in effect prior to the amendments effective January 1, 1998.[4] Those amendments deleted the earlier version of the elective-share statute in its entirety. The estate reads the language 27 of subsection (c) broadly to mean, in the language of the estate's brief, that there is a credit against the surviving spouse's percentage share of the net estate for "all items in the gross estate that the spouse otherwise receives." The estate notes that subsection (c) of the elective-share statute expressly provides that the "gross estate," as that concept is used in that subsection, "shall be determined by the court in the same manner as for inheritance tax purposes." Tenn.Code Ann. § 31-4-101(c). The estate contends that exempt property, homestead and a year's support are not excluded from the gross estate for inheritance tax purposes. In support of this argument, the estate relies upon the provisions of Tenn.Code Ann. § 67-8-303 (2003),[5] a section of the inheritance tax statutory scheme describing the types of property subject to that tax. As can be seen, the property which is subject to the tax is broadly stated and does not contain an express exclusion for exempt property, homestead and a year's support. The estate argues that subsection (c) is unambiguous, and that our obligation is to enforce its provisions regardless of how we feel about the justice of its application to the facts of the case at bar. VIII. In this case, we are called upon to interpret and apply the provisions of the elective-share statute. In Eastman Chem. Co. v. Johnson, 151 S.W.3d 503 (Tenn.2004), the Supreme Court recited many of the general principles pertaining to statutory construction: Issues of statutory construction are questions of law that this Court reviews de novo without any presumption of correctness. Our duty in construing statutes is to ascertain and give effect to the intention and purpose of the legislature. "`Legislative intent is to be ascertained whenever possible from the natural and ordinary meaning of the language used, without forced or subtle construction that would limit or extend the meaning of the language.'" When the statutory language is clear and unambiguous, we must apply its plain meaning in its normal and accepted use, without a forced interpretation that would limit or expand the statute's application. Where an ambiguity exists, we must look to the entire statutory scheme and elsewhere to ascertain the legislative intent and purpose. The statute must be construed in its entirety, and it should be assumed that the legislature used each word purposely and that those words convey some intent and have a meaning and a purpose. The background, purpose, and general circumstances under which words are used in a statute must be considered, and it is improper to take a word or a few words 28 from its context and, with them isolated, attempt to determine their meaning. Id. at 506-07 (citations omitted). In construing legislation, courts must harmonize, if possible, all parts of the legislature's enactment. See Marsh v. Henderson, 221 Tenn. 42, 424 S.W.2d 193, 196 (1968) ("A statute should be construed, if practicable, so that its component parts are consistent and reasonable.... Inconsistent phrases are to be harmonized, if possible, so as to reach the legislative intent."). See also State v. Netto, 486 S.W.2d 725, 729 (Tenn.1972). "A construction will be avoided, if possible, that would render one section of the act repugnant to another. Or one that would produce an absurd result." Tenn. Elec. Power Co. v. City of Chattanooga, 172 Tenn. 505, 114 S.W.2d 441, 444 (1937) (citations omitted). See also Turner v. Eslick, 146 Tenn. 236, 240 S.W. 786, 789 (1922). "When the legislature enacts provisions of a uniform or model act without significant alteration, it may be generally presumed to have adopted the expressed intention of the drafters of that uniform or model act. However, when the legislature makes significant departures from the text of that uniform act, we must likewise presume that its departure was meant to express an intention different from that manifested in the uniform act itself." Heirs of Ellis v. Estate of Ellis, 71 S.W.3d 705, 713-14 (Tenn.2002) (citations omitted). IX. Our interpretation of the current version of the elective-share statute begins with a look back at the prior version of that statute. Before January 1, 1998, the elective-share statute in Tennessee provided as follows: (a) A decedent's surviving spouse has the right to elect to take an elective share. The elective share is one third (1/3) of the decedent's net estate as defined in subsection (b). The right to elect an elective share is available to the surviving spouse of an intestate decedent and a testate decedent if the surviving spouse elects against the decedent's will. When the elective share is determined, it is exempt from the unsecured debts of the decedent incurred after April 1, 1977. In determining the elective share, it is not reduced by any estate or inheritance taxes. (b) The net estate includes all of the decedent's real and personal property subject to disposition under the terms of the decedent's will or the laws of intestate succession reduced by funeral and administration expenses, homestead, exemptions and year's support. Tenn.Code Ann. § 31-4-101 (repealed effective January 1, 1998, by 1997 Tenn. Pub. Acts 426, § 17). Under the earlier version of the statute, the method of calculating the surviving spouse's elective share was clear and relatively simple to apply. A surviving spouse had an absolute right "to elect to take an elective share." Once the election was made, the surviving spouse, regardless of the length of his or her marriage to the decedent, was entitled to one-third of a relatively well-defined concept, i.e., the value of the real and personal property that passes under the decedent's will or the laws of intestate succession reduced by funeral and administration expenses, homestead, exempt property, and a year's support allowance. There were no further reductions. In 1995, the 99th Tennessee General Assembly adopted House Joint Resolution No. 223 appointing a Special Joint Commission[6]29 whose charge was to "[s]tudy all aspects of the probate law in Tennessee with a view towards adopting the Uniform Probate Code by revising, updating, and clarifying the law so that it may give clear and consistent guidance to those using it and those affected by the law in order to ensure, to the extent possible, the uniformity of probate law from any legal uncertainties related to this important process; and [r]ecommend legislation to effect the above goals." (Numbering in original omitted). The commission was directed to file "the report of its findings and any recommendations concerning legislation, with the 99th General Assembly no later than December 15, 1995." As directed by the General Assembly, the commission filed a report setting forth its fact-finding process, its decision-making process, and its recommendations. The report notes that the commission found "little or no public support for the adoption of the Uniform Probate Code in its entirety." At another point in the report, the commission noted that it "decided that a wholesale revision of the probate law at this time is unnecessary and that the Uniform Probate Code, which also covers fields other than those typically considered to be of a probate nature, should not be adopted as a whole for various reasons." The commission made 15 numbered recommendations, one of which is the following: To modernize the elective share for surviving spouses to take into account the length of the marriage and to redefine how the amount is ascertained. Its recommendations were, in the language of the report, "incorporated into a draft of a legislative bill which accompanie[d][the] report." By Chapter 426, Public Acts of 1997, the General Assembly, without discussion, adopted verbatim that portion of the proposed legislation dealing with a surviving spouse's elective share by deleting the prior elective-share statute in its entirety and by substituting the current version of the elective-share statute.[7] As previously noted, the new version became effective January 1, 1998, and applies to all estates of decedents dying on or after that date. The current version of the elective-share statute retains a few of the features of the old statute, i.e., the right to elect is still unconditional; the starting point of the calculation, once the percentage of entitlement is established, is still "the decedent's real and personal property subject to disposition under the provisions of the decedent's will or the laws of intestate succession"; the value of the aforesaid concept is still reduced by funeral and administration expenses, homestead, exempt property, and the year's support, before the percentage of entitlement is applied to the balance; and the surviving spouse's entitlement under the statute is still not subject to the claims of the decedent's unsecured creditors. While there are similarities between the two versions, there are striking differences, both in concept and language. The current version of the elective-share statute replaces the "one size fits all" approach of the old statute that all surviving spouses were previously entitled to a one-third elective share with the phased-in approach of the Uniform Probate Code ("the UPC") under which the percentage amount of a surviving spouse's elective 30 share increases as the length of the parties' marriage increases. While adopting the UPC's approach, the current statute utilizes only four levels of percentage entitlement compared to the 16 levels of the UPC. The current statute does adopt the UPC provision that all years of marriage between the parties are counted even if those periods "may be separated by divorce." While the current version of the elective-share statute retains the starting point of "the decedent's real and personal property subject to disposition under the provisions of the decedent's will or the laws of intestate succession," the new version, in subsection (b), introduces a new deduction from the concept: "secured debts to the extent that secured creditors are entitled to realize on the applicable collateral." Tenn.Code Ann. § 31-4-101(b). As can be seen, the new version of the elective-share statute has significantly changed the method of determining the surviving spouse's elective-share percentage. Under the new approach, some surviving spouses will receive more than the previous one-third share while others will receive less. While this was a major change introduced by the amendments effective January 1, 1998, it is not the one at issue in the case at bar. That "distinction" belongs to the commission's recommendation as to "how the [elective-share] amount is ascertained." X. In adopting House Joint Resolution No. 223, the General Assembly was influenced by the 1990 adoption[8] of a new version of the UPC by the National Conference of Commissioners on Uniform State Laws. The underlying theory behind the significant revisions to the elective share sections of the UPC has been described thusly: In constructing a new elective share, the drafters of the UPC applied two theories, both described in the General Comment to the elective share section of the 1990 UPC. Unif. Prob.Code art. II, pt. 2, gen. cmt. (1993). One theory, the marital partnership theory, views marriage as an economic partnership to which both spouses contribute productive effort. This theory holds that each spouse is entitled to one-half of the economic gains of the marriage. The other theory, the need-based theory, holds that a decedent spouse should provide for the surviving spouse. A married couple's moral duties to one another, the expectations of the surviving spouse and public concern that the surviving spouse not be left to depend on the state for support form the basis of this theory. Taken together, the two theories establish a duty of spousal support that arises in marriage and continues to some degree after death. Therefore, each spouse has a right to a share of the economic gains of both spouses during the marriage. To implement the need-based theory, the 1990 UPC creates a supplemental elective share of $50,000. To the extent the elective share, calculated as a percentage of the augmented estate, is less than $50,000, the surviving spouse is entitled to a supplemental elective share equal to the difference. Stated another way, the minimum amount of a spouse's elective share is $50,000. Because the augmented estate includes the surviving spouse's assets, the spouse will receive a supplemental elective share only if his or her own assets are less than $50,000. To implement the partnership theory, the 1990 UPC creates an augmented 31 estate that includes property owned and controlled by both spouses probate property and property passing under will substitutes. The guiding principle of giving each spouse one-half of the marital property made it necessary to look at the assets owned by both spouses and not just property controlled by the decedent. In contrast to the prior UPC, the 1990 UPC makes no exceptions for insurance [,] annuities and pensions. A difficulty faced by the drafters of the 1990 UPC is that not all property owned by spouses is marital property. A spouse may have inherited property or acquired property before marriage. To avoid a post-death determination of marital and separate property, the drafters devised a phased-in elective share based on the length of the marriage. The goal of this provision was to approximate increased marital sharing and the increased contribution to the acquisition of marital assets as a marriage endures. The drafters concluded that "[b]ecause ease of administration and predictability of result are prized features of the probate system," a "mechanically determined approximation system" makes sense. Unif. Prob.Code art. II, pt. 2, gen. cmt. (1993). Susan N. Gary, Share and Share Alike? The UPC's Elective Share, 12 Prob. & Prop. 18, 20 (1998). The author opined as follows regarding the amendments to the Tennessee elective share statute effective January 1, 1998: A law adopted in Tennessee in 1997 borrows concepts from the UPC and uses them to modify what is still essentially a traditional elective share statute. The new Tennessee statute phases in the elective share percentage from 10% for less than three years of marriage to 40% for marriages lasting nine years or more. The percentage is applied to the "net estate," which the law defines as the probate estate less certain secured debts, funeral and administration expenses and family allowances. Property that the surviving spouse receives, whether probate or nonprobate property, reduces the elective share. It appears that the law will charge disclaimed interests against the surviving spouse because the statute refers to assets "which were transferred, or deemed transferred ... or which were for the benefit of the surviving spouse." Tenn.Code Ann. § 31-4-101(c)(1997). The Tennessee statute considers the augmented estate, determined by reference to the Tennessee inheritance tax statute, only to reduce the surviving spouse's share. If the decedent dies holding only nonprobate assets, the value of the net estate, and thus the elective share, will be zero.... Id. at 22 (emphasis added). It is clear to us that the changes to the Tennessee elective-share statute effective January 1, 1998, while adopting some of the thrust of the 1990 changes to the UPC elective share provisions, depart from the model act in significant and substantial ways. First, the 1997 amendments did not adopt the UPC's concept of a minimum elective share stated in monetary terms. It is clear that there is no such monetary minimum share under the current version of our statute. Second, as pointed out in the article just quoted, the current elective-share statute considers the concept of an "augmented estate" to reduce the surviving spouse's elective share, but continues to use the "net estate" concept in defining the amount to which the surviving spouse's percentage is applied.[9] 32 The differences between the current version of the elective-share statute and the provisions of the UPC relating to a surviving spouse's elective share are so significant as to lead us to conclude that the legislature's departure "was meant to express an intention different from that manifested in the uniform act itself." Heirs of Ellis, 71 S.W.3d at 713-14. Therefore, even though it is clear that the Special Joint Commission was directed by the General Assembly to study the probate laws of Tennessee "with a view towards adopting the [UPC]," the commission and later the legislature itself chose not to adopt the expansive and far-reaching language of the UPC as it pertains to the methodology of computing the surviving spouse's elective share, other than the adoption of the theory of the UPC that the percentage share should be tied to the length of the parties' marriage. We conclude from this that the intention behind the UPC is of no particular help in determining whether the language of subsection (c) of the elective share statute contemplates the reduction of homestead, exempt property, and year's support from the surviving spouse's percentage share of the net estate. We have discussed the UPC extensively simply because of the General Assembly's charge to the commission. In view of this charge, we felt it essential to expressly point out that the legislature's 1997 amendments evidence a general intention to go in a direction other than the one charted by the UPC. For the purposes of illustration and comparison, we have attached a copy of the UPC provisions addressing the surviving spouse's elective share, as last amended in 1993, as an appendix to this opinion. In the interest of brevity, we have omitted the official comments and illustrations. XI. The estate urges us to hold, as did the trial court, that the elective-share statute requires that the surviving spouse's statutory entitlements to homestead, exempt property, and a year's support allowance be deducted twice as a part of the computation outlined in the elective share statute, i.e., first, in reducing the gross estate passing in probate to arrive at the net estate subject to the surviving spouse's percentage share, and, second, from the product of the multiplication of the net estate by the surviving spouse's percentage share. We agree with the widow in this case that such an interpretation leads to an absurd result. We find ambiguity in the wording of the statute. We note that while the legislature referred to the three statutory entitlements by name in subsection (b), there is no such explicit reference in subsection (c). The fact that the legislature referred to these statutory entitlements by name in subsection (b) clearly shows that they were on the mind of that body when it adopted the 1997 amendments. Query: If the legislature had intended, in subsection (c), to mandate the deduction of these same three items a second time in this continuing statutory computation, why did it not expressly refer to them as it did in subsection (b)? In other words, if the legislature had intended to include these items in the general language of subsection (c), why did it 33 not refer to the decedent's "gross estate" as "the gross estate, including the surviving spouse's homestead, exempt property, and a year's support" or by the use of similar language? The current version of the elective-share statute is hardly a model of clarity as far as the interplay between subsections (b) and (c) is concerned. While the author quoted earlier in this opinion may be right when she opines that our legislature "borrow[ed] concepts from the UPC and use[d] them to modify what is still essentially a traditional elective[-]share statute," it is clear to us that the legislature rejected the comprehensive statutory scheme thought to be necessary by the Commissioners on Uniform State Law to effectuate their desire to adopt a "marital partnership theory" and a "need-based theory" in the elective-share concept. By adopting bits and pieces from the earlier version of the elective-share statute as well as concepts from the UPC and then "cutting and pasting" them with some new language into a much shorter version of an elective-share statute, the legislature has created more questions than answers. If the legislature has rejected the UPC's dual theories mentioned above, either in whole or in part, and we believe it has, what is the theory behind the current version of the elective-share statute? What is the purpose or theory underlying the deduction set forth in subsection (c)? We are left to ponder these and related questions. Assuming that the estate is correct in its interpretation of subsection (c), what is the rationale behind the deduction of the surviving spouse's statutory entitlements from the maximum elective share after these very same items have already been "cleared out" of the gross estate as a part of the computation leading to the calculation of that same maximum elective-share amount? We have concluded, and so hold, that the language of subsection (c) of the elective-share statute cannot, consistent with the clear meaning of subsection (b), be read to include homestead, exempt property, and a year's support. We believe the reason behind the deduction of the surviving spouse's statutory entitlements from the gross probate estate under subsection (b) is clear: it is to remove these items from the assets passing in probate before the surviving spouse's percentage is applied. The deduction at this point in the computation ensures that the surviving spouse does not get these three statutory entitlements plus a percentage of the same items. We believe the deduction at this stage of the statutory computation was intended to avoid "double-dipping." Thus, the deduction from the probatable assets is reasonable and logical. We cannot say the same for a subsequent deduction of the same items as a part of what is essentially a continuing statutory computation. Such a deduction, in the overall scheme of things, is illogical and defies explanation. We recognize that it is the prerogative of the legislature to adopt such legislation as it deems appropriate so long as it does not offend a provision of the United States Constitution or the Tennessee Constitution. Certainly, it has the authority to enact legislation which appears on its face to be illogical should it choose to do so. However, we believe that, had the legislature intended to deduct these three items a second time in the same statutory computation, it would have referred to them by name in subsection (c) just as it did in subsection (b). If one of the purposes behind the current version of the elective-share statute is to reduce the surviving spouse's elective share to compensate for the surviving 34 spouse's receipt of homestead, exempt property, and a year's support, we believe the legislature could have accomplished this objective in one of at least two ways. First, it could have and we believe it did construct a computation that removes these items from the gross probatable estate before the surviving spouse's percentage share is applied. Second, had it chosen not to pursue the foregoing approach in carrying out this presumed objective, it could have structured a computation providing that (a) the percentage share is applied to the gross probatable estate without prior deduction for the statutory entitlements and (b) the result of that computation would then be reduced by the statutory entitlements. It does not make any sense, however, to do the first and then apply a significant variation of the second, resulting in a deduction of these entitlements at the beginning of the computation and then again after the maximum elective share has been determined. We believe the estate's interpretation is suspect for another reason. As can be seen from the illustration on page six of this opinion, the widow, having chosen to pursue her right to homestead, exempt property, and a year's support, would receive, under the approach of the estate and the trial court, an elective share of $134,016.73 plus her three statutory entitlements of $56,504.92 or a total of $190,521.65. If she had chosen not to receive her statutory entitlements, her elective share would have been calculated as follows: Gross Estate $872,253.32 Less: ORNL Mortgage $29,408.23 Funeral and Admin. Exp. 78,795.27 108,203.50 ---------- ----------- Net Estate $764,049.82 =========== 30% of Net Estate $229,214.94 =========== Thus, as the estate and the trial court interpreted the statute, the widow would receive more, i.e., $229,214.94, if she foregoes her three statutory entitlements than she would receive, i.e., $190,521.65, if she claimed them. We refuse to read the statute in a way that attributes to the General Assembly an intention to discourage a surviving spouse from pursuing homestead, exempt property, and a year's support, all entitlements granted by that same legislative body. We have attempted to construe subsections (b) and (c) of the elective-share statute in a way that will harmonize these two provisions. See Marsh, 424 S.W.2d at 196. We believe the only way they can be harmonized is if subsection (c) is read so as not to include the surviving spouse's homestead, exempt property, and year's support among the items to be deducted from the surviving spouse's percentage share of the net estate. In reaching our decision, we expressly do not rely upon two of the authorities cited by the widow, i.e., In re Estate of Morris, 104 S.W.3d 855 (Tenn.Ct.App. 2002), and 18 Albert W. Secor, Tennessee Practice: Tennessee Probate § 10.5 (2d ed.2002). We do not believe that either of these authorities is implicated by the facts and issue now before us. We recognize that the "reduction" concept embodied in subsection (c) was not in the elective-share statute prior to January 1, 1998. We also recognize that the concept of the "value of all assets" as found in subsection (c) of the elective-share statute is different from, and more expansive than, the concept of the assets passing through probate as addressed in subsection (b). However, we are not persuaded that the concept in subsection (c) is broad enough to compel, for a second time, the deduction of the surviving spouse's three statutory entitlements as a part of the statutory 35 computation of the amount of the surviving spouse's elective share. We specifically hold that the language of subsection (c) was not intended to include, and does not include, the statutory entitlements set forth in Tenn.Code Ann. §§ 30-2-101 (2001), 30-2-102 (2001), and 30-2-209 (2001). We believe a contrary holding with respect to the statutory entitlements would lead to an absurd result. We decline to go there. XII. The judgment of the trial court is reversed. This case is remanded to the court below for further proceedings. Costs on appeal are taxed to the Estate of Frank Soard. APPENDIX Uniform Laws Annotated Uniform Probate Code 1969 Article II. Intestacy, Wills, and Donative Transfers (Revised 1990 Version) Part 2. Elective Share of Surviving Spouse § 2-201. Definitions. In this Part: (1) As used in sections other than Section 2-205, "decedent's nonprobate transfers to others" means the amounts that are included in the augmented estate under Section 2-205. (2) "Fractional interest in property held in joint tenancy with the right of survivorship," whether the fractional interest is unilaterally severable or not, means the fraction, the numerator of which is one and the denominator of which, if the decedent was a joint tenant, is one plus the number of joint tenants who survive the decedent and which, if the decedent was not a joint tenant, is the number of joint tenants. (3) "Marriage," as it relates to a transfer by the decedent during marriage, means any marriage of the decedent to the decedent's surviving spouse. (4) "Nonadverse party" means a person who does not have a substantial beneficial interest in the trust or other property arrangement that would be adversely affected by the exercise or nonexercise of the power that he [or she] possesses respecting the trust or other property arrangement. A person having a general power of appointment over property is deemed to have a beneficial interest in the property. (5) "Power" or "power of appointment" includes a power to designate the beneficiary of a beneficiary designation. (6) "Presently exercisable general power of appointment" means a power of appointment under which, at the time in question, the decedent, whether or not he [or she] then had the capacity to exercise the power, held a power to create a present or future interest in himself [or herself], his [or her] creditors, his [or her] estate, or creditors of his [or her] estate, and includes a power to revoke or invade the principal of a trust or other property arrangement. (7) "Probate estate" means property that would pass by intestate succession if the decedent died without a valid will. (8) "Property" includes values subject to a beneficiary designation. (9) "Right to income" includes a right to payments under a commercial or private annuity, an annuity trust, a unitrust, or a similar arrangement. (10) "Transfer," as it relates to a transfer by or of the decedent, includes (A) an exercise or release of a presently exercisable general power of appointment held by the decedent, (B) a lapse at death of a presently exercisable general power of appointment held by the decedent, and (C) an exercise, release, or lapse of a general 36 power of appointment that the decedent created in himself [or herself] and of a power described in Section 2-205(2)(ii) that the decedent conferred on a nonadverse party. § 2-202. Elective Share. (a) [Elective-Share Amount.] The surviving spouse of a decedent who dies domiciled in this State has a right of election, under the limitations and conditions stated in this Part, to take an elective-share amount equal to the value of the elective-share percentage of the augmented estate, determined by the length of time the spouse and the decedent were married to each other, in accordance with the following schedule: If the decedent and the spouse were married to each other: The elective-share percentage is: Less than 1 year .............................. Supplemental Amount Only. 1 year but less than 2 years .................. 3% of the augmented estate. 2 years but less than 3 years ................. 6% of the augmented estate. 3 years but less than 4 years ................. 9% of the augmented estate. 4 years but less than 5 years ................. 12% of the augmented estate. 5 years but less than 6 years ................. 15% of the augmented estate. 6 years but less than 7 years ................. 18% of the augmented estate. 7 years but less than 8 years ................. 21% of the augmented estate. 8 years but less than 9 years ................. 24% of the augmented estate. 9 years but less than 10 years ................ 27% of the augmented estate. 10 years but less than 11 years ................ 30% of the augmented estate. 11 years but less than 12 years ................ 34% of the augmented estate. 12 years but less than 13 years ................ 38% of the augmented estate. 13 years but less than 14 years ................ 42% of the augmented estate. 14 years but less than 15 years ................ 46% of the augmented estate. 15 years or more ............................... 50% of the augmented estate. (b) [Supplemental Elective-Share Amount.] If the sum of the amounts described in Sections 2-207, 2-209(a)(1), and that part of the elective-share amount payable from the decedent's probate estate and nonprobate transfers to others under Section 2-209(b) and (c) is less than [$50,000], the surviving spouse is entitled to a supplemental elective-share amount equal to [$50,000], minus the sum of the amounts described in those sections. The supplemental elective-share amount is payable from the decedent's probate estate and from recipients of the decedent's nonprobate transfers to others in the order of priority set forth in Section 2-209(b) and (c). (c) [Effect of Election on Statutory Benefits.] If the right of election is exercised by or on behalf of the surviving spouse, the surviving spouse's homestead allowance, exempt property, and family allowance, if any, are not charged against but are in addition to the elective-share and supplemental elective-share amounts. (d) [Non-Domiciliary.] The right, if any, of the surviving spouse of a decedent who dies domiciled outside this State to take an elective share in property in this State is governed by the law of the decedent's domicile at death. § 2-203. Composition of the Augmented Estate. Subject to Section 2-208, the value of the augmented estate, to the extent provided in Sections 2-204, 2-205, 2-206, and 2-207, 37 consists of the sum of the values of all property, whether real or personal; movable or immovable, tangible or intangible, wherever situated, that constitute the decedent's net probate estate, the decedent's nonprobate transfers to others, the decedent's nonprobate transfers to the surviving spouse, and the surviving spouse's property and nonprobate transfers to others. § 2-204. Decedent's Net Probate Estate. The value of the augmented estate includes the value of the decedent's probate estate, reduced by funeral and administration expenses, homestead allowance, family allowances, exempt property, and enforceable claims. § 2-205. Decedent's Nonprobate Transfers to Others. The value of the augmented estate includes the value of the decedent's nonprobate transfers to others, not included under Section 2-204, of any of the following types, in the amount provided respectively for each type of transfer: (1) Property owned or owned in substance by the decedent immediately before death that passed outside probate at the decedent's death. Property included under this category consists of: (i) Property over which the decedent alone, immediately before death, held a presently exercisable general power of appointment. The amount included is the value of the property subject to the power, to the extent the property passed at the decedent's death, by exercise, release, lapse, in default, or otherwise, to or for the benefit of any person other than the decedent's estate or surviving spouse. (ii) The decedent's fractional interest in property held by the decedent in joint tenancy with the right of survivorship. The amount included is the value of the decedent's fractional interest, to the extent the fractional interest passed by right of survivorship at the decedent's death to a surviving joint tenant other than the decedent's surviving spouse. (iii) The decedent's ownership interest in property or accounts held in POD, TOD, or co-ownership registration with the right of survivorship. The amount included is the value of the decedent's ownership interest, to the extent the decedent's ownership interest passed at the decedent's death to or for the benefit of any person other than the decedent's estate or surviving spouse. (iv) Proceeds of insurance, including accidental death benefits, on the life of the decedent, if the decedent owned the insurance policy immediately before death or if and to the extent the decedent alone and immediately before death held a presently exercisable general power of appointment over the policy or its proceeds. The amount included is the value of the proceeds, to the extent they were payable at the decedent's death to or for the benefit of any person other than the decedent's estate or surviving spouse. (2) Property transferred in any of the following forms by the decedent during marriage: (i) Any irrevocable transfer in which the decedent retained the right to the possession or enjoyment of, or to the income from, the property if and to the extent the decedent's right terminated at or continued beyond the decedent's death. The amount included is the value of the fraction of the property to which the decedent's right related, to the extent the fraction of the property passed outside probate to or for the benefit of any person other 38 than the decedent's estate or surviving spouse. (ii) Any transfer in which the decedent created a power over income or property, exercisable by the decedent alone or in conjunction with any other person, or exercisable by a nonadverse party, to or for the benefit of the decedent, creditors of the decedent, the decedent's estate, or creditors of the decedent's estate. The amount included with respect to a power over property is the value of the property subject to the power, and the amount included with respect to a power over income is the value of the property that produces or produced the income, to the extent the power in either case was exercisable at the decedent's death to or for the benefit of any person other than the decedent's surviving spouse or to the extent the property passed at the decedent's death, by exercise, release, lapse, in default, or otherwise, to or for the benefit of any person other than the decedent's estate or surviving spouse. If the power is a power over both income and property and the preceding sentence produces different amounts, the amount included is the greater amount. (3) Property that passed during marriage and during the two-year period next preceding the decedent's death as a result of a transfer by the decedent if the transfer was of any of the following types: (i) Any property that passed as a result of the termination of a right or interest in, or power over, property that would have been included in the augmented estate under paragraph (1)(i), (ii), or (iii), or under paragraph (2), if the right, interest, or power had not terminated until the decedent's death. The amount included is the value of the property that would have been included under those paragraphs if the property were valued at the time the right, interest, or power terminated, and is included only to the extent the property passed upon termination to or for the benefit of any person other than the decedent or the decedent's estate, spouse, or surviving spouse. As used in this subparagraph, "termination," with respect to a right or interest in property, occurs when the right or interest terminated by the terms of the governing instrument or the decedent transferred or relinquished the right or interest, and, with respect to a power over property, occurs when the power terminated by exercise, release, lapse, default, or otherwise, but, with respect to a power described in paragraph (1)(i), "termination" occurs when the power terminated by exercise or release, but not otherwise. (ii) Any transfer of or relating to an insurance policy on the life of the decedent if the proceeds would have been included in the augmented estate under paragraph (1)(iv) had the transfer not occurred. The amount included is the value of the insurance proceeds to the extent the proceeds were payable at the decedent's death to or for the benefit of any person other than the decedent's estate or surviving spouse. (iii) Any transfer of property, to the extent not otherwise included in the augmented estate, made to or for the benefit of a person other than the decedent's surviving spouse. The amount included is the value of the transferred property to the extent the aggregate transfers to any one donee in either of the two years exceeded $10,000. § 2-206. Decedent's Nonprobate Transfers to the Surviving Spouse. Excluding property passing to the surviving spouse under the federal Social Security system, the value of the augmented estate includes the value of the decedent's nonprobate transfers to the decedent's surviving spouse, which consist of all property that passed outside probate at the 39 decedent's death from the decedent to the surviving spouse by reason of the decedent's death, including: (1) the decedent's fractional interest in property held as a joint tenant with the right of survivorship, to the extent that the decedent's fractional interest passed to the surviving spouse as surviving joint tenant, (2) the decedent's ownership interest in property or accounts held in co-ownership registration with the right of survivorship, to the extent the decedent's ownership interest passed to the surviving spouse as surviving co-owner, and (3) all other property that would have been included in the augmented estate under Section 2-205(1) or (2) had it passed to or for the benefit of a person other than the decedent's spouse, surviving spouse, the decedent, or the decedent's creditors, estate, or estate creditors. § 2-207. Surviving Spouse's Property and Nonprobate Transfers to Others. (a) [Included Property.] Except to the extent included in the augmented estate under Section 2-204 or 2-206, the value of the augmented estate includes the value of: (1) property that was owned by the decedent's surviving spouse at the decedent's death, including: (i) the surviving spouse's fractional interest in property held in joint tenancy with the right of survivorship, (ii) the surviving spouse's ownership interest in property or accounts held in co-ownership registration with the right of survivorship, and (iii) property that passed to the surviving spouse by reason of the decedent's death, but not including the spouse's right to homestead allowance, family allowance, exempt property, or payments under the federal Social Security system; and (2) property that would have been included in the surviving spouse's nonprobate transfers to others, other than the spouse's fractional and ownership interests included under subsection (a)(1)(i) or (ii), had the spouse been the decedent. (b) [Time of Valuation.] Property included under this section is valued at the decedent's death, taking the fact that the decedent predeceased the spouse into account, but, for purposes of subsection (a)(1)(i) and (ii), the values of the spouse's fractional and ownership interests are determined immediately before the decedent's death if the decedent was then a joint tenant or a co-owner of the property or accounts. For purposes of subsection (a)(2), proceeds of insurance that would have been included in the spouse's nonprobate transfers to others under Section 2-205(1)(iv) are not valued as if he [or she] were deceased. (c) [Reduction for Enforceable Claims.] The value of property included under this section is reduced by enforceable claims against the surviving spouse. § 2-208. Exclusions, Valuation, and Overlapping Application. (a) [Exclusions.] The value of any property is excluded from the decedent's nonprobate transfers to others (i) to the extent the decedent received adequate and full consideration in money or money's worth for a transfer of the property or (ii) if the property was transferred with the written joinder of, or if the transfer was consented to in writing by, the surviving spouse. (b) [Valuation.] The value of property: (1) included in the augmented estate under Section 2-205, 2-206, or 2-207 is reduced in each category by enforceable claims against the included property; and 40 (2) includes the commuted value of any present or future interest and the commuted value of amounts payable under any trust, life insurance settlement option, annuity contract, public or private pension, disability compensation, death benefit or retirement plan, or any similar arrangement, exclusive of the federal Social Security system. (c) [Overlapping Application; No Double Inclusion.] In case of overlapping application to the same property of the paragraphs or subparagraphs of Section 2-205, 2-206, or 2-207, the property is included in the augmented estate under the provision yielding the greatest value, and under only one overlapping provision if they all yield the same value. § 2-209. Sources from Which Elective Share Payable. (a) [Elective-Share Amount Only.] In a proceeding for an elective share, the following are applied first to satisfy the elective-share amount and to reduce or eliminate any contributions due from the decedent's probate estate and recipients of the decedent's nonprobate transfers to others: (1) amounts included in the augmented estate under Section 2-204 which pass or have passed to the surviving spouse by testate or intestate succession and amounts included in the augmented estate under Section 2-206; and (2) amounts included in the augmented estate under Section 2-207 up to the applicable percentage thereof. For the purposes of this subsection, the "applicable percentage" is twice the elective-share percentage set forth in the schedule in Section 2-202(a) appropriate to the length of time the spouse and the decedent were married to each other. (b) [Unsatisfied Balance of Elective-Share Amount; Supplemental Elective-Share Amount.] If, after the application of subsection (a), the elective-share amount is not fully satisfied or the surviving spouse is entitled to a supplemental elective-share amount, amounts included in the decedent's probate estate and in the decedent's nonprobate transfers to others, other than amounts included under Section 2-205(3)(i) or (iii), are applied first to satisfy the unsatisfied balance of the elective-share amount or the supplemental elective-share amount. The decedent's probate estate and that portion of the decedent's nonprobate transfers to others are so applied that liability for the unsatisfied balance of the elective-share amount or for the supplemental elective-share amount is equitably apportioned among the recipients of the decedent's probate estate and of that portion of the decedent's nonprobate transfers to others in proportion to the value of their interests therein. (c) [Unsatisfied Balance of Elective-Share and Supplemental Elective-Share Amounts.] If, after the application of subsections (a) and (b), the elective-share or supplemental elective-share amount is not fully satisfied, the remaining portion of the decedent's nonprobate transfers to others is so applied that liability for the unsatisfied balance of the elective-share or supplemental elective-share amount is equitably apportioned among the recipients of the remaining portion of the decedent's nonprobate transfers to others in proportion to the value of their interests therein. NOTES [1] The statute was subsequently amended by 2004 Tenn. Pub. Acts 866, § 2, effective June 8, 2004. [2] The record does not reveal whether Mr. Soard died testate or intestate. Our resolution of the issue before us is not affected by whether he died with or without a will. [3] Since the parties stipulate that these items are proper deductions from the surviving spouse's maximum elective share, and there is no issue before us regarding the propriety of these deductions, we do not find it necessary to address whether each of these deductions is appropriate under subsection (c) of the elective-share statute. [4] 1997 Tenn. Pub. Acts. 426. Section 26 of Chapter 426 provides that the amendments shall apply to all estates of decedents dying on or after January 1, 1998. As previously noted, Mr. Soard died July 14, 2003. [5] Tenn.Code Ann. § 67-8-303(a)(1)(A)-(E), a part of the Tennessee inheritance tax scheme, provides as follows: (a) A tax is imposed for the general uses of the state, under the conditions and subject to the conditions and limitations prescribed in this part, upon transfers, in trust or otherwise, of the following property, or any interest therein or accrued income therefrom: (1) When the transfer is from a domiciliary of this state: (A) Real property situated within this state; (B) Tangible personal property, except such as has an actual situs without this state; (C) All intangible personal property; (D) Proceeds of insurance policies, except as provided in this part; and (E) Proceeds of certain employee benefit trusts and plans to the extent provided in this part; ... [6] At one point in the resolution, the body is referred to as a "committee." In all other parts of the resolution, it is referred to as the "commission." [7] It appears that the legislature adopted all of the legislation proposed by the commission. [8] Clarifying amendments were adopted in 1993. [9] The "augmented estate" as that language is used in the UPC's elective share provisions has the following expansive components: the decedent's net probate estate, the decedent's nonprobate transfers to others, the decedent's nonprobate transfers to the surviving spouse, and the surviving spouse's property and nonprobate transfers to others. See Unif. Probate Code § 2-203 (amended 1993). Under the UPC, the surviving spouse's elective-share is stated in terms of "the elective-share percentage of the augmented estate." Unif. Probate Code § 2-202 (emphasis added).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367394/	400 F. Supp. 186 (1975) WASHINGTON MOBILIZATION COMMITTEE et al., Plaintiffs, v. Maurice J. CULLINANE, Chief of the Metropolitan Police Department, et al., Defendants. Civ. A. No. 779-70. United States District Court, District of Columbia. July 28, 1975. Judgment August 27, 1975. 187 188 189 190 John E. Vanderstar, John H. Quinn, Jr., Lawrence H. Mirel, Ralph J. Temple, Washington, D. C., for plaintiffs. C. Francis Murphy, Corp. Counsel, D. C., John A. Earnest, Robert J. Sher, Richard G. Wise, Asst. Corp. Counsels, Washington, D. C., for defendants. MEMORANDUM OPINION INCLUDING FINDINGS OF FACT AND CONCLUSIONS OF LAW WADDY, District Judge. Introduction During the period 1969-1971[1] a number of large-scale demonstrations took place in the District of Columbia to protest various actions taken by the federal and city governments. Participants sought to exercise their rights under the First Amendment peaceably "to assemble, and to petition the Government for a redress of grievances." Plaintiffs in this action are two organizations which had sponsored demonstration activities and individuals who had become involved in the demonstrations as participants, attorneys or observers.[2] Their complaint challenges the policies and actions of the District of Columbia police department during these mass demonstrations. Four general areas of unlawful conduct are alleged as the source of these claims: (1) unlawful dispersal and arrest of demonstrators; (2) use of excessive physical force; (3) unlawful post-arrest, booking procedures; and (4) unnecessary and discriminatory fingerprinting and photographing of demonstrators arrested on disorderly conduct and related charges. Plaintiffs further attack the constitutionality of statutory and administrative enactments invoked by defendants in the performance of their duties. Equitable relief is sought which would require the police department to revise its practices and procedures in a manner which will rectify the claimed constitutional deficiencies. Defendants are supervisory officials of the Police Department who allegedly 191 are responsible for the actions cited by plaintiffs.[3] They contend in their defense that they have not overstepped the bounds of constitutional propriety and that their actions have been consonant with the due process and first amendment rights guaranteed to all citizens. Defendants argue that even if there have been incidents in the past in which individual officers have acted improperly, this finding would not warrant the extensive injunctive relief sought by plaintiffs. This Court has jurisdiction over the subject matter and parties of this action pursuant to D.C.Code § 11-521(a)(1).[4] Jurisdiction is also conferred on this Court by 28 U.S.C. § 1331 and the 1st, 4th and 5th amendments to the constitution. Sullivan v. Murphy, 156 U.S.App. D.C. 28, 478 F.2d 938 (1973). The case was tried before the Court sitting without a jury. The trial was conducted from March 19 to April 9, 1974.[5] Plaintiffs presented the testimony of 25 witnesses at trial and the testimony of 3 additional persons by deposition. The trial was shortened by an agreement between the parties permitting plaintiffs to introduce into evidence the affidavits of 47 potential witnesses whose testimony would merely have been cumulative of the evidence introduced through plaintiffs' primary witnesses. The affidavits were admitted only as summaries to show what these persons would have testified to if they had been called as witnesses. The veracity of the affiants or of their statements was not stipulated. Finally, plaintiffs introduced well over 100 exhibits into evidence including police department documents, interrogatories and depositions. Defendants presented at trial the testimony of ex-Chief Wilson and other supervisory officials of the department who were responsible for the training, supervision and discipline of officers assigned to duty during mass demonstrations. Defendants supplemented this testimony with 21 exhibits introduced into evidence, consisting of internal memoranda, orders and documents of the department. In order to obtain the relief they seek, plaintiffs must prove that the police have engaged in widespread violations of constitutional rights; that such breaches of official duty have occurred over a period of time and are subject to repetition; and that the misconduct either has resulted from departmental policies and procedures or lack thereof, or has been fostered by the department's failure to take corrective action. See Allee v. Medrano, 416 U.S. 802, 94 S. Ct. 2191, 40 L. Ed. 2d 566 (1974); Washington Free Community, Inc. v. Wilson, 157 U.S.App.D.C. 360, 484 F.2d 1078 (1973); Long v. District of Columbia, 152 U.S.App.D.C. 187, 469 F.2d 927 (1972); Lankford v. Gelston, 364 F.2d 197 (4th Cir. 1966). In an effort to satisfy this burden, plaintiffs have produced evidence depicting the events of demonstrations occurring in the District of Columbia during 1969-1971. Defendants' evidence concentrates on the guidelines developed by the department during this time period in an effort to show 192 that any misconduct was individually inspired, rather than the outgrowth of officially sanctioned policies, and that the department has actively sought rectification of the deficiencies in operating procedures. FACTS 1. The Civil Disturbance Unit The evidence in support of and in opposition to the respective positions of the parties and the facts deducible therefrom will be discussed hereinafter. At the outset, however, a description of the makeup of the department's Civil Disturbance Unit (CDU) is helpful in understanding the evidence. The CDU is a special component of the police department established to provide personnel for service during largescale civil disturbances, including riots and mass demonstrations. Because of the nature of its duties, the Unit is mobilized on an ad hoc basis. Organizationally it is part of the department's Special Operations Division (SOD), which has duties extending beyond the narrowly defined scope of CDU activities. Of the approximately 650 officers assigned to the CDU, 300 are drawn from the ranks of the SOD; the remaining officers are regularly assigned to other full-time positions within the department.[6] The Deputy Chief of Police in charge of the SOD is also Commander of the CDU.[7] 2. The Demonstrations[8] a. November 14, 1969 Dupont Circle On November 14, 1969, an anti-war demonstration was staged near the South Vietnamese embassy, in the vicinity of Dupont Circle. As the demonstrators became unruly, breaking windows and threatening police, they began to congregate in and around the Circle. Upon orders of Chief Wilson, CDU officers surrounding the area launched tear gas cannisters into the Circle in an attempt to subdue the crowd. Dr. Timothy Tomasi, a physician who, at that time, was employed as a resident by D. C. General Hospital, volunteered his services to provide first aid. From 6:00 until 9:30 P.M. he was stationed in a house near the Circle where he treated approximately 20-30 persons suffering from tear gas burns, bruises and lacerations. By 9:30 tear gas had seeped into the house, requiring evacuation from the building. Clearly identified by a red cross armband, Tomasi went to the Circle to ascertain if any demonstrators there needed medical attention. At first officers refused to allow him access through the police line surrounding the Circle, but then relented. Finding that his assistance was not needed, Tomasi left the circle just as further tear gas was set off. As Tamasi approached Massachusetts Avenue, CDU officers grabbed him and struck him a number of times with their clubs, knocking him to the ground. He was then dragged to a police bus and locked in the back. He showed one of the officers his medical identification, but to no avail. A short time later, when officers returned to the bus, he was ordered to leave. As he disembarked some of the officers again struck him across the body with their batons; one officer kneed him in the groin. Tomasi was then allowed to leave, never having been advised that he was under arrest or that he had violated any law. 193 b. November 16, 1969 Three Sisters Bridge On November 16, 1969 a large crowd gathered on Canal Road in Georgetown to protest construction of the proposed Three Sisters Bridge.[9] As the crowd became loud and disorderly, the participants began to block traffic proceeding along M Street and Canal Road. Police stationed in the area were subjected to verbal abuse and, in a few instances, were the targets of thrown objects. Eventually three squads of police were ordered to the area who directed the demonstrators back to the vicinity of 34th and M Streets. Two squads then moved further east along M Street, while the third squad attempted to clear 34th Street by proceeding north along that thoroughfare. At the intersection of 34th and Prospect Streets, a line of police was formed which prevented all pedestrian and vehicular traffic from moving south. Lieutenant Watson, in command of the maneuver, then ordered a sweep of the area by a contingent of officers moving north on 34th Street and east along Prospect Street. At this juncture, a number of persons who were apparently occupants of a residence at 3401 Prospect Street[10] began shouting obscenities at the officers, but were not otherwise interfering in the police action. Several officers broke ranks and moved to the steps of the house before being ordered to return to their line by superiors. Later, when the police made a return sweep of the area, these same hecklers renewed their activities. At this point, four officers proceeded to the front yard, swinging their batons,[11] and arrested two of the protestors. Lieutenant Watson supported this action, noting that the comments made by the arrestees were "unacceptable in a decent and self-respecting society."[12] Additional arrests were made along Prospect Street without any apparent probable cause. One witness, Karl Hess IV, was visiting friends living on the 3300 block of Prospect Street. Although not participating in the demonstration, he and his friends went outside to observe the commotion. As the police line moved past the house, Hess retreated to the steps. When one of his friends was detained by police, he attempted to explain to the officer that they were not involved in the demonstration and that they were staying at the above-mentioned house. The officer's response was to walk onto the porch, seize the witness in an excessively physical fashion and arrest him. Hess' father observed this event from inside the house and immediately attempted to explain to the officer that a mistake was being made. The father suffered the same fate as his son, as both were loaded into a patrol wagon and were taken to the local precinct station and booked. Collateral was posted for both and they were immediately released. When the case was subsequently reviewed by the Corporation Counsel, the charges were dropped and the collateral money was returned. c. February 19, 1970 Watergate On February 19, 1970 a crowd of persons (numbering in the hundreds) gathered on the George Washington University Campus for a rally protesting the results of the so-called Chicago 7 trial. Speakers addressed the crowd during the mid-day and early afternoon with no indications of disorderly conduct. Police were not present or did not make their presence evident on the campus. 194 Upon completion of the speeches, a large number of the persons attending the rally proceeded to march towards the Watergate apartments intending to reiterate at that location their displeasure with the course of the trial. The Watergate was selected as the site for this demonstration because it was the residence of then Attorney General John Mitchell. Although the demonstrators had not sought a parade permit for the march to the Watergate, notices on campus posted prior to the 19th announced the intended course of the demonstration. The police department was aware of the proposed activities and in anticipation of difficulties stationed a large number of officers from the CDU around the apartment complex. Most of the demonstrators proceeded towards the Watergate along G Street, moving westward. A few police were observed along this route, although there was apparently no interaction between demonstrators and police at this point. When the marchers reached the intersection of G Street and Virginia Avenue, they were confronted by a police line extending across Virginia Avenue, preventing further movement along this thoroughfare. Estimates of the number of police varied from 50 to 200, the latter figure probably being the more realistic one. The officers manning the line were attired in CDU riot gear, including helmets, combat-type fatigues and long batons, held chest-high in a horizontal position. When most of the demonstrators had arrived in the vicinity of the Watergate, the crowd extended from the intersection of New Hampshire and Virginia Avenues (where the police line was set up), back along Virginia Avenue to the Columbia Plaza apartments (between 23rd and 24th Streets). A second contingent of police formed along the rear of the group of demonstrators, cutting off retreat eastward along Virginia Avenue. After realizing that the police were intent upon impeding any further demonstration activities, some of the marchers at the front of the assemblage (at the intersection of New Hampshire and Virginia Avenues) began taunting the officers, verbally and physically. Epithets were directed toward the police, along with small stones and other objects. The evidence shows that this activity was uncoordinated and spasmodic. The missile throwing could hardly have been characterized as a barrage. No evidence of injury to any police officer was introduced. At this point Deputy Chief Owen Davis, in command of the CDU and the senior officer present at the scene,[13] announced over a bullhorn that the crowd should disperse. Davis, however, was situated at the head of the gathering, so that most of the persons in the rear of the crowd (especially around the Columbia Plaza apartments) did not hear the request to leave the area. In fact, the evidence shows that many of these persons were unaware of the confrontation between police and demonstrators further along Virginia Avenue which had given rise to the dispersal order.[14] The situation remained static for a few minutes after the announcement to leave, until the line of police at New Hampshire and Virginia Avenues began moving eastward on Virginia, pushing the crowd ahead of it. At this point confusion seized both the police and demonstrators, as the people at Columbia Plaza were surprised by the movement of the police line towards them. Because of a lack of communication and inadequate attempts to inform the crowd of their intentions, the police succeeded in creating a stampede effect. 195 At first, persons standing on the grounds of the Columbia Plaza apartments were allowed to pass through the line of police at the rear. However, after more of the demonstrators began to verbally and physically threaten the officers, the police broke ranks and began chasing the retreating crowd. This action compounded the confusion and escalated the tension between demonstrators and police. A number of persons huddled in the garage area of the apartment, hoping to avoid any confrontation, were seized and arrested. Demonstrators who were initially led to believe that they could retreat from the Columbia Plaza along Virginia Avenue were suddenly chased by groups of officers and arrested. Many of these persons were confronted by an irresolvable dilemma: if they sought security in the area of the Columbia Plaza they were arrested by the rear contingent of police. Those attempting to leave along Virginia Avenue were chased and, in some cases, arrested by the officers pursuing them eastward along Virginia Avenue. Most of the persons arrested were not engaging in any unlawful conduct. Some were merely onlookers who were caught up in the melee. Persons who attempted to intercede between police and demonstrators or who requested an explanation from officers as to the reasons for the arrests were themselves taken into custody. The chaotic atmosphere was further exacerbated by the unrestrained use of physical violence by some of the officers. For some officers, the verbal abuse hurled at them was sufficient provocation for their reaction. Numerous incidents occurred (including some visible on films of the event taken by police officers)[15] in which police swung their batons in an overhead movement, knocking their victims to the ground and often inflicting injuries.[16] Some people were observed to be bleeding from the injuries sustained. In at least two incidents medical students who were present at the demonstration (but not participating) attempted to give assistance to injured persons and were told by police to leave the area. In addition to the more blatant examples of violence, a pervasive pattern of lack of restraint by police was discernible from the police films and supported by the testimony of witnesses. Police often shoved and pushed demonstrators, intimidating them with their batons. Arrests were effectuated with a level of force far in excess of that required. The area along Virginia Avenue was eventually cleared by attrition and by the movement of demonstrators eastward on F and G Streets and north on 23rd Street. These thoroughfares pass through the central portion of the George Washington University campus. As might be expected, many of the people in this area were students or university personnel engaged in their collegiate routine, unassociated with the influx of demonstrators. Although there undeniably was some unruliness on the part of the crowd leaving the Watergate, including the destruction of property, the evidence is overwhelming that most persons arrested in this sortee were not engaged in criminal activity. Nicholas Sloan, a professor of engineering at George Washington University, testified to one such incident. Sloan arrived at one of the classroom buildings for a class scheduled 196 for 6:10 P.M. and was told that the building was closed and that classes were suspended because of the disturbance. A guard allowed Sloan inside the building, where he could observe the events taking place outside. Shortly afterward, one of his students came to the door of the building to ascertain the status of the class. As the student was standing at the entrance to the building, he was grabbed from behind by an officer. In spite of Sloan's efforts to have the student released, the officer persisted and maintained custody. Defendants proffered no evidence to justify this or similar arrests of persons who were not connected with the demonstration activities. Wanton use of physical force also accompanied the arrests made on campus in the late afternoon. One example of such violence occurred when CDU officers entered a school building, contrary to orders, to pursue demonstrators who had been throwing rocks at the police. Michael Marsh, a law student who had observed the incidents but was not participating, approached the officers entering the building and attempted to intercede peaceably between them and some other students. There is no evidence that Marsh had engaged in any illegal conduct on the street or when approaching the officers. There is no evidence that he was interfering with the officers in the performance of their duties. Nevertheless, he was struck on the head by one of the officers swinging his baton as a club. After incurring several blows, Marsh was dragged from the building. Although he was bleeding profusely, his requests for medical attention were ignored for several hours, until after he had been brought to the police station. Marsh was eventually hospitalized for treatment of his injuries (including stitches in his scalp) and then returned to police custody. Later that night collateral was posted and Marsh was released. Charges against him were subsequently dropped.[17] The arrest and booking procedures employed by the CDU were also extraordinary. Although the department had devised a field arrest form specifically for use in mass arrest situations, a number of administrative snafus prevented its use on this day (e. g., shortage of cameras). In addition, many officers decided that it was not necessary to advise arrestees of the charges being placed against them or to give them their Miranda warnings. Arrestees were taken either to the Central Cell Block (males) or the Women's Detention Center (females). At this point, essential information was recorded on various forms and the detainees were fingerprinted and photographed. Because of the large number of people involved and an apparent breakdown in police administration, the process dragged on for hours. Even during the booking process many detainees were not advised of the charges against them or the procedures for posting collateral. Persons who offered to post collateral immediately and were able to do so were required to wait hours before their release. Many persons were not allowed to leave on collateral until they answered a barrage of questions of a personal and extraneous nature (e. g., what do you smoke, what persons do you associate with, do you use narcotics). Persons requesting use of the telephones to contact an attorney or to obtain collateral were prevented from so doing. At the central cell block, which had only two telephones available for the use of prisoners, the influx of such a large number of arrestees overwhelmed the facilities. Even at times when the phones were not being used, some officers rejected requests to make calls. Attorneys who came to the cell 197 block were thwarted in their efforts to speak to or advise those persons still incarcerated. These actions by police resulted in delays of nine or more hours before some detainees were released. Because of the failure to use the field arrest forms and the confusion during the booking process, most of the arrests made could not be prosecuted by the Corporation Counsel's office. Thomas Johnson, the Assistant Corporation Counsel responsible for reviewing the charges brought against persons arrested during these demonstrations,[18] testified that more than 90% of the persons arrested had their charges "no-papered" (i. e., no complaint was filed). Of the remaining cases which were prosecuted, a majority resulted in dispositions favorable to the arrestees. Johnson offered a number of reasons for the unsuccessful resolution of so many of the cases. Foremost was the inability of the arresting officers to identify at a later date the persons they had taken into custody or the offense allegedly committed. The absence of field arrest forms made identification impossible. In many instances the charge designated by the officer at the time of arrest did not fit the facts of the incident giving rise to the arrest. In those cases in which people were charged with violating a police line, there were problems with the police tactic of moving with or pushing the crowd and then cutting it off from further movement out of an area. Questions arose whether people had attempted in good faith to comply with the order to disperse, but were prevented from doing so by the police. These observations led Johnson to testify: I personally have never seen a good police-lines case, that is my understanding of a good police-lines case. Those that I did see either the line would not have been established at all, or the line was established and moving and engulfed someone. In the latter case, I don't understand that to be a proper charge.[19] d. February 21, 1970 Washington Monument A second demonstration protesting the Chicago 7 trial took place on February 21, 1970, in the downtown area of the city. A police permit for the demonstration was issued on the day prior to the march, allowing the assemblage of approximately 5000 persons in the vicinity of 9th Street and Constitution Avenue. The marchers were to proceed to the destination of 3rd Street and Constitution Avenue, near the location of the police department's central cell block. The demonstration proceeded uneventfully along its prescribed route, with little contact between demonstrators and police. After the scheduled event ended in the late afternoon (approximately 4:00 p. m.), many of the demonstrators began walking westward in the mall area. As these people approached the vicinity of the Washington Monument (15th Street and Constitution Avenue), a number of police on scooters, motorcycles and horses circled the crowd and formed a line along the hill of the monument, preventing further movement in a westerly direction. Shortly thereafter a group of CDU officers in riot attire, under the supervision of Chief Wilson, formed a line along Constitution Avenue north of the Monument. The crowd consisted of tourists and onlookers as well as stragglers from the march. For reasons which were not made clear at trial, the police line extending east-west along Constitution Avenue began moving south in formation, across the monument grounds, sweeping people ahead of it. Although an announcement to clear the area was made, because of 198 the noise of the crowd, not all of the persons subject to the order heard the instructions. As a result, there was confusion among demonstrators and bystanders as to the appropriate course of action. The chaos was magnified when police broke ranks and began chasing people across the mall, making random arrests. A number of persons were physically assaulted by police officers using their batons as clubs. Persons who attempted to question police about the arrests or to protest their conduct were themselves apprehended. One news reporter who was taking notes during the demonstration was accosted from behind by an officer, choked with the officer's baton, and then forced to relinquish his notebook. After the officer had defaced the notebook, he left the scene and took no further action.[20] Films of the demonstration taken by the police department[21] confirm the abusive character of the officers' actions. Two incidents in particular, occurring on the Mall in the vicinity of the Justice Department, highlight this fact. In the first example, a person was pulled from the crowd by police officers and dragged to a grassy area. The victim was then thrown to the ground, beaten and kicked by a number of officers who had encircled him. Whatever conduct on the part of the demonstrator had provoked official action, it was quite evident that the physical force far exceeded what was necessary to bring the person into custody. In the second incident, a person carrying a large movie camera (the kind used by the news media, although it is not clear whether the person was a member of the press) was pushed away by officers as he attempted to film some of the events. Although he appeared to offer no resistance, a scuffle ensued in which officers tried to pull the camera away from the photographer in order to prevent further picturetaking. Witnesses testifying for defendants stated that a number of demonstrators in the area of the Monument had become disorderly. However, these witnesses did not recite specific instances of misconduct which would have necessitated the sweep action, as opposed to making individual arrests. There were no satisfactory explanations for the physically abusive behaviour of the police. The arrest and booking procedures which followed were also of questionable propriety. A number of persons who were injured in the fracas requested and were refused medical attention at the time of arrest; in some cases medical care was not ministered until the arrestees were taken to the cell block. While in custody the arrestees were subjected to verbal and other abuse,[22] and were often not advised of their rights or the charge(s) being placed against them until hours after the arrest took place. Some persons were not released for five or more hours. e. October 2, 1970 Georgetown During the evening of October 2, 1970, a political demonstration took place in Georgetown. Chief Wilson was present at the scene of the protest and ordered a sweep of the lower blocks of Wisconsin Avenue. Defendants presented no evidence to indicate why this step was taken. One result of this decision was that a number of passersby and persons uninvolved with the demonstration were arrested in the Georgetown area.[23] In one incident, Peter Lamb, an attorney visiting friends residing on Wisconsin Avenue between Q and R Streets, was attracted to the disturbance taking place outside. He observed a line of 199 40-50 police moving north on Wisconsin Avenue, with persons being pushed along ahead of the line. When Lamb observed the police making an arrest which he considered unjustified, he approached the officer involved and asked why the arrest was being made. Lamb did not attempt to interfere with the officer's activities, but merely sought an explanation of his conduct. Lamb himself was then arrested. At the police station, Lamb was not permitted to make a telephone call for at least 6 hours, although he eventually was able to effectuate his release. After the charges against him were dropped, Lamb complained in writing to the police department of his treatment. The department's response was that it found no improprieties in any officer's conduct on that particular day. f. May 5-11, 1970 American University/Ward Circle In the first few weeks of May, 1970, demonstrations protesting the activities of armed forces of the United States in Cambodia took place in various areas of the city. One such area of demonstrations was around the campus of American University. These demonstrations resulted in a number of confrontations between police and persons present on the campus. The initial demonstration activities on May 5 consisted of leafletting the area of Ward Circle adjacent to the campus (the Circle is the location of the intersection of Massachusetts and Nebraska Avenues, both heavily-travelled thoroughfares). Police were stationed at that location as a precautionary measure, although the initial interaction between officers and demonstrators was minimal. On May 6, however, when the leafletters began to block traffic in the Ward Circle intersection, the tension between the groups increased. CDU officers wearing gas masks and equipped with various gas projectiles were stationed around and in the Circle, facing the campus. Demonstrators were requested to vacate the streets and most did so, retreating to a grassy knoll in front of the Kay Spiritual Life Center, a university building located on the edge of the campus. It is unclear from the evidence which of the adversaries initiated the escalation. Demonstrators taunted police and threw marshmallows at them. After announcements to clear the area were made, the missiles changed to stones and rocks, inflicting injuries on a few officers. Lines of CDU police moved onto Nebraska Avenue, pushing the demonstrators back with their batons, but they were not successful in clearing the area or in stifling the bombardment of missiles. Deputy Chief Davis finally ordered the use of hand-thrown gas grenades, generally thrown from the north side of Massachusetts Avenue to the campus area by the Kay Spiritual Life Center. When these proved ineffective, larger projectiles (about one foot long) were fired from shotgun-like launchers. This action had the effect of saturating the immediate vicinity with gas, affecting numerous people who had no connection with the anti-war activities. Persons brought to the first aid station set up on campus were found to have suffered numerous injuries in the course of this conflict (e. g., abrasions, contusions), in addition to the effects of tear gas.[24] Police films of the activities on May 5 and 6 show that on several occasions arrests were effected by placing choke-holds with the baton around the necks of arrestees.[25] Some of the injured 200 required hospital treatment, although it appears that the police provided no medical facilities or services. A second major flare-up between police and demonstrators occurred on the 11th day of May. The conflict again was ignited in the Ward Circle area, where students engaged in leafletting and other less peaceful activities. Rocks and debris were thrown in the streets. The police attempted to clear the thoroughfares around the Circle, but met the same resistance as before. Missiles were again directed towards police stationed at the Circle, ranging from marshmallows to rocks. What seems to have distinguished the course of events on this date from the conflagration occurring the previous week was the increased intensity of animosity between protestors and law enforcement officials. This attitude was reflected in the severity of injuries incurred by persons in the area. Police officials again decided to employ shotgun gas launchers, with heavy, long-range projectiles. A number of officers using these launchers apparently took the view that they were appropriate offensive weapons, rather than merely being a means of dispersing the crowd. In at least three separate incidents, persons present in the campus area were deliberately made the direct targets of these weapons. Perhaps the most graphic example of this misuse of the gas launchers involved James Lee Kerr III, a student at American University. Kerr was editor and photographer for a number of campus publications and was identified by a press pass on his lapel. On May 6 he was present at Ward Circle, taking still photographs of the events. He returned on the 11th with a movie camera. While walking along Nebraska Avenue on the latter date, taking pictures, he was struck in the heel of his foot by a gas cannister and was knocked to the ground. As he tried to crawl away, another officer approached him and, from close range, shot Kerr in the ankle with another projectile. Two friends knocked the officer away, allowing Kerr to escape. Subsequent medical treatment revealed a broken bone and damaged ligaments, from which Kerr still has not fully recovered. A second example of misuse of the gas launchers is described in the affidavit of Gregory Hutchins.[26] Hutchins was struck in the shoulder by a cannister as he attempted to leave the sidewalk along Nebraska Avenue following the dispersal order. There is no evidence in the record which would justify the conduct of the police in these incidents. There also is no dispute that both Deputy Chief Davis and Chief Wilson were present at various times during the demonstrations at Ward Circle and were responsible for the orders initiating the use of gas.[27] In addition to Kerr, other actions were taken by police against persons who were clearly associated with media organizations. On May 11th, the University radio station (WAMU) was operating a broadcasting station on campus, giving continuous news coverage of the demonstrations. For reasons which were never releated to the persons operating the station, a number of officers approached the broadcasters, confiscated a telephone and disconnected the transmission line which had been set up 201 for the emergency operation. This had the effect of abruptly ending the station's broadcast. Deputy Chief Davis testified that he ordered the equipment disconnected, but was not aware that the students were running a radio station. When an employee of the radio station approached Davis at his outpost in the middle of Ward Circle, Davis told him that it was his understanding that the broadcasters were using the operation as a device for centrally directing the activities of the demonstration. Davis did not explain the basis for this assumption and was unable at trial to substantiate his hypothesis. After the discussion at the Circle the equipment was returned to the station. Two final examples of excessive force illustrate the lack of restraint on the part of police. In one incident, a number of students forsook the intensity of the Ward Circle battleground for the challenge of a more leisurely afternoon softball game. Upon completion of their sport some of the participants drove their cars to a parking lot on Nebraska Avenue, across from the campus, and visited friends in a nearby dormitory. When they returned to their cars in the late afternoon, they heard the instruction to disperse from police stationed at Ward Circle. They also observed the release of tear gas onto Nebraska Avenue. At this point, four or five officers ran into the parking lot chasing a student. One of the officers then approached a car with a number of students inside, drew his revolver and yelled accusations at the passengers. When two of the softball players proceeded to the scene of the altercation another officer seized them and accused them of rock-throwing. The officers addressed one student as "Jew boy" and then pulled his beard and slammed his head into the trunk of the car.[28] The officer who drew his revolver was later reprimanded verbally by his superiors for improper use of his service weapon, but no disciplinary action was ever taken.[29] The second incident involved Dr. Robert Strautz, a professor of biology at American University, who was conducting diabetes research in a laboratory in the Hurst Hall campus building, adjacent to Nebraska Avenue. Shortly after the police had begun to use gas, some of the chemical seeped into the laboratory, requiring the professor to evacuate. When he returned, he discovered that some of his experiments utilizing animal subjects had been destroyed by the effects of the gas. Cloaked by his white laboratory coat, the professor went outside to protest the use of the gas to officers stationed in the vicinity. One of the officers, a member of the CDU, drew his pistol, pointed it at the complainant and then escorted him to the Ward Circle area. Although he was verbal and profane in his protests, no attempt was made by Strautz to interfere with the officers' activities or to resist their hold on him. Nevertheless, for unexplained reasons, the officers beat the professor with their batons and then arrested him. There is no evidence that the arrestee had engaged in any unlawful conduct or that his actions required the physical force employed by the police. g. May Day Demonstrations 1971 The notorious May Day demonstrations of 1971, taking place on the second through fifth days of that month, were the last major mass arrest situations occurring in the District, although the CDU has been deployed on other occasions since that time. Plaintiffs have not presented extensive evidence pertaining to activities during this time, primarily because the facts have been reviewed in detail in previous litigation in this Court and in the United States 202 Court of Appeals. Apton v. Wilson, 165 U.S.App.D.C. 22, 506 F.2d 83 (1974); Sullivan v. Murphy, 156 U.S.App.D.C. 28, 478 F.2d 938 (1973); Roberts v. Wilson, C.A.No. 1436-71, aff'd per curiam, D.C.Cir. No. 72-2184 (Jan. 16, 1974). The patterns of improper arrests and booking procedures (including suspension of the use of field arrest forms) in the previous demonstrations were repeated here. Especially important are the findings made in the Sullivan case as to the number of arrests and prosecutions. During the period April 22, to May 6, 1971, a total of 14,517 persons were arrested. Approximately 3,749 of these cases were terminated administratively, before judicial action was taken. Of those cases that proceeded to the District of Columbia Superior Court, many were terminated because the collateral was forfeited. However, 2,600 persons who posted collateral and were assigned trial dates had their cases dropped when the Corporation Counsel did not file an information. Approximately two-thirds of the cases that went to final disposition in Superior Court were terminated either by entry of a nolle prosequi or the granting of a motion to dismiss the information. Only 871 cases out of the original 14,517 arrests went to trial. In order to properly have this information before it, the Court has taken judicial notice of the proceedings and findings of the Courts in the Apton, Sullivan and Roberts cases. See Booth v. Fletcher, 69 U.S.App.D.C. 351, 101 F.2d 676 (1938), cert. denied, 307 U.S. 628, 59 S. Ct. 835, 83 L. Ed. 1511 (1939). 3. Recruitment and Training of CDU Officers Members of the CDU are selected from the ranks of officers already assigned to other divisions of the department. The selection process consists of a single interview of the applicant and review of his police record by the training officer of the Unit. No psychological tests or other screening devices are administered. The initial training consists of a 6-day course of classroom and field instruction. Three-day refresher courses are conducted twice a year. Informal, in-service training is also utilized as the occasion arises. The classroom curriculum for the initial and refresher courses includes such topics as completion of field arrest forms, psychological behaviour of crowds and effects of chemical crowd control agents (e. g., gas). Field training is directed primarily towards the use of weaponry. Oddly enough, the one weapon responsible for most injuries inflicted during demonstrations the riot baton has not been the subject of field training since 1969. Officers are merely instructed verbally that the baton is a defensive weapon and should not be used to strike persons except in situations involving physical danger. The CDU does have an instruction manual.[30] It was agreed by all police officials testifying at trial that the manual, written in 1948, is hopelessly outdated and virtually useless. For this reason, it has not been used since 1969 in any of the Unit's training programs. Chief Wilson testified that a revision of the Manual is in progress, with no scheduled deadline for completion. The Court has viewed the proposed revisions and notes that they are, at best, in a preliminary stage of review. The Department has supplanted the manual as a source of policy by verbal orders[31] or written General Orders.[32]203 Officers are also exposed to a series of Training Modules which discuss the basic functions of a police officer. It should be noted that the General Orders and Training Modules are directed to all police officers and, although some orders are principally oriented to CDU activities, they do not provide a centralized or comprehensive source of CDU policy. For example, there are no written guidelines on the appropriateness or mechanics of establishing a police line, one of the most widely used crowd-control tactics. Furthermore, the documents comprising these disparate policy pronouncements are so voluminous as to make it virtually impossible for an officer preoccupied with the busy pace of his daily duties to digest and retain the mass of information. The difficulty of the task facing the CDU officer would seem to be compounded by the necessity of ferretting out from this maze of papers those orders directly applicable to CDU activities. One might surmise that this haphazard method of instruction would result in a breakdown of orderly operations. The evidence of CDU misconduct during the demonstrations, discussed supra, proved this expectation fulfilled. The shortcomings of the training program are mirrored in the incoherency of official policy, indicating a causal relationship between defendants' actions (or inaction) and the poor performance of CDU officers on duty. This observation is proven in a variety of contexts. A few illustrations should suffice. One example is found in Training Module 7.1 (to which every officer is exposed) which instructs that Miranda warnings are to be given to any person subjected to a full custody arrest, including a misdemeanor offense.[33] One of the relevant General Orders also requires an arresting officer detailed to a mass demonstration to instruct an arrestee of the section and description of the law which has allegedly been violated.[34] The evidence shows, however, that it was a common practice for arresting officers to refrain from advising arrestees of their rights and to refuse to reveal the offenses with which they were being charged. This procedure, although contrary to the dictates of the Training Module and General Order, comported with the practice advised by Chief Wilson. In his testimony at trial, Wilson stated that a person taken into custody during a demonstration need be told only that he is under arrest. If the detainee asks, he may be informed that he is charged with disorderly conduct, although the Corporation Counsel's office may decide later that a different charge is more appropriate. A similar state of confusion has been fostered by conflicting orders and indepth training in the use of chemical agents. The evidence shows that there has been difficulty in containing the use of tear gas in demonstrations. Defendants are well aware of the problem, as shown by a summary of an internal meeting of supervisory police officials held in November, 1969, which contains the following comment: All agreed that control is almost completely lacking and that something must be done. Officials loose [sic] control of the use of gas. We must have the ability to stop gasing [sic]. In other words, `we have the ability to turn on but no ability to turn off.' In 1971, the department issued General Order No. 1, Series 805[35] which stated that "[c]hemicals (tear gas, sickening gas, and smoke), arms, and ammunition shall be used by the CDU in accordance with the instructions of the unit commander." 204 This limited guidance could hardly be termed a significant effort to resolve the difficulties identified two years earlier. Deputy Chief Zanders testified at trial that no written orders were issued during his tenure as the head of the CDU which changed the policies or procedures of the Unit. Defendants offered no proof of specific steps taken to alter the training curriculum to reflect a change in policy on the use of gas. In spite of the observation made in 1969, the misuse or overuse of gas was repeated in subsequent demonstrations. There is no basis in the evidence for concluding that the problem has been resolved. In a related area, policies regarding the use of Mace emphasize the difficulties growing out of the use of independently promulgated general orders. Memorandum Order No. 42, August 14, 1969, authorized officers below the rank of lieutenant to carry aerosal chemical dispensers (Mace) and set forth certain prescriptions and proscriptions concerning its use, including the admonition that the chemical not be used at close range.[36] On December 1, 1971 the department issued General Order Series 1102, No. 1, which reiterated and amplified the contents of the earlier order. Also on December 1, 1971, a separate General Order identified as Series 805, No. 1, was directed specifically to the Civil Disturbance Unit with the described purpose "to establish the procedure for the utilization of the Civil Disturbance Unit (CDU) in whole or in part, and to establish the criteria for utilization of chemicals under control of the CDU." On page 5 of the latter Order, it is advised that a larger, pint-sized chemical dispenser be assigned only to designated members of the CDU. The Order further stated on page 6 that the chemical dispenser "shall not be utilized against passive crowds or at the scene of a sit-down or arm-lock type of demonstration where the objective is simply to move a group or effect arrests." During the May Day demonstrations of 1971, a photograph was published in the Washington Post which showed Deputy Chief Zanders spraying Mace at a group of demonstrators, sitting in the middle of an intersection, from a distance of no more than three feet.[37] This action seems to violate the policies enunciated in each of the aforementioned orders. When Zanders testified at trial, he did not dispute the inferences of the photograph. When asked whether the policy embodied in General Order Series 805, No. 1, was in effect at the time of the photographed incident, he stated that he did not know if a written order was extant at that time, although the general policy predated that particular order.[38] When asked whether any revised procedures had been adopted following this incident, Zanders replied "I don't recall any." The Court feels compelled to comment that if the Commander of the CDU expresses uncertainty over the existence of his Unit's written policies at a given time, and conducts himself in a manner contrary to those policies, then it is not unlikely that this confusion will also be manifested among his subordinates. Furthermore, if the policies and procedures of the CDU emanate from verbal fiat and vary with the incumbents of the Commander's position, then consistency and continuity cannot be maintained in the operation, and constitutional rights are at the mercy of personalities.[39] 205 4. Internal Review of CDU Policies Department officials have followed an informal procedure for the review and correction of deficiencies in CDU operations. General consideration of official conduct has been undertaken in "critiques" in which supervisory officials discuss the events of a preceding demonstration. Although Deputy Chief Davis testified that on some occasions notes or tape recordings were made of these meetings, no transcripts or tapes were put in evidence. Summaries of a few critique discussions have been made available to the Court, indicating that substantive matters concerning control of both the crowd and the police were scrutinized. However, the department has no policy requiring officials to make written reports or records of such police actions as erecting police lines or initiation of sweeps. The only effort to preserve the events of a demonstration has been the taking of motion pictures and still photographs by the department's Mobile Crime Laboratory. Of necessity, this technique, while valuable, is limited in its adequacy and accuracy. Criticism of police activities originating from outside the department is handled in a variety of ways. Information critical of the CDU which is presented by the news media or litigation is never made the subject of an internal, disciplinary investigation.[40] When a formal complaint[41] or informal letter is received by the department (or referred to it), it is reviewed initially by the Internal Affairs Division (IAD).[42] The investigation of the complaint, however, is conducted by the unit which was the subject of the complaint. For example, allegations of unjustified physical force by an officer will be investigated by that officer's unit. After the unit prepares its report of the investigation, it is sent to the Disciplinary Review Officer of the IAD, who may conduct hearings if he thinks it appropriate (although he does not have the power to subpoena persons outside the department). Certain kinds of disciplinary actions may be taken at the unit level by a division commander, such as a dereliction report. Other forms of recommended discipline must be approved by the Chief after the case has gone to the Disciplinary Review Officer (e. g., convening a trial board; official reprimand from the Chief; letter of prejudice signed by the Chief). The outcome of these procedures as they pertain to CDU activities has not been very productive. Inspector George Chapoutot[43] and Deputy Chief Davis testified that commanders can take and have taken corrective action against officers at the time of a disturbance when they have deviated from department policy or have reacted poorly in the heat of a demonstration. This informal form of discipline might consist of verbally rebuking the official for his conduct, removing the officer from the police line or transferring him out of the CDU. However, in spite of the existence of the above-outlined mechanism for officially disciplining an officer for misconduct, not a single formal disciplinary action was taken against any officer involved in the demonstrations considered in this case.[44] 5. Processing of Persons Arrested in Mass Demonstrations After civil disturbances occurred in the city in the Spring of 1968, the department developed new mass arrest procedures utilizing a shortened field arrest 206 form which was designed to preserve the essential information relevant to a criminal prosecution.[45] The department also instituted the practice of taking Polaroid photographs of both the arrestee and the arresting officer to accompany the field arrest form. These new procedures allowed the arresting officer to record the basic information of the arrest in a short amount of time. Difficulties with these procedures arose in demonstrations taking place by the Watergate apartment complex in the winter of 1970, when logistical problems necessitated the suspension of the field arrest process. The response to these problems came in the form of two memoranda issued by Deputy Chief Davis on March 23, 1970, and directed to all members of the CDU.[46] They reiterated the need to follow all aspects of the field arrest procedures and defined certain techniques to be employed in the making and supervision of arrests.[47] In October, 1971 the department took further steps to improve its procedures for booking detainees by revising its Prisoner Control Handbook.[48] The Handbook puts responsibility for the transporting, detention, processing and controlling of persons arrested during civil disturbances in a Prisoner Control Center, an emergency unit which is activated strictly for this purpose.[49] The Field Arrest Form has been changed in some respects to simplify its use during demonstrations and it has been accompanied by strict admonitions in the Handbook that all parts of the form be accurately and fully completed by the signing officer. Arresting officers are to be designated by superiors. No officer is to be made responsible for more than 15 arrestees. After the arrest forms are filled out and the Polaroid pictures taken, the prisoners are turned over to escort officers for frisking and transportation.[50] In situations in which a particularly large number of arrests are made or when there is rapid movement among the demonstrators, an abbreviated procedure is followed. The field arrest form is still utilized, but in shortened form, requiring even less time for completion.[51] Information of a general nature (e. g., date, time, location of arrest) is placed on a blackboard attached to the front and side of the transporting bus. When the photograph of the arresting officer and prisoner is taken, it is done in a manner so that the blackboard is in view, with the relevant information filled in. This information is later transferred to the field arrest form at the detention facility. The procedure allows the retention of information necessary to prosecution of the case, but also frees the arresting officer from some of the time-consuming aspects of the arrest. 207 Prisoners may be transported to a number of detention facilities in the city, including the central cell block (48 cells), and the seven police districts and sub-stations (120 cells).[52] Once a prisoner has been brought to a facility, the booking process begins with the completion of an arrest report, which includes information taken from the field arrest form and additional facts relating to the personal history of the arrestee. The prisoner is then fingerprinted and photographed[53] and sent through a collateral and/or citation release procedure, whereby he is afforded the opportunity to qualify for release on collateral, citation or unsecured bond, regardless of whether the courts are in session.[54] If the prisoner is unable or refuses to post bond or collateral, he is then detained until called for his court appearance.[55] Although the Prisoner Control Handbook is more up-to-date than the CDU Training Manual, some of the same problems of inconsistent or non-existent instructions have affected the efficient functioning of post-arrest operations. For example, General Order No. 6, Series 1970[56] states that medical care shall be provided during civil disturbance by public health personnel assigned to district headquarters or substations. Persons suffering serious injuries are to be taken directly to D. C. General Hospital. A number of witnesses testified, however, that in demonstrations taking place after the issuance of this Order many persons injured in the course of disturbances were not taken to a detention facility or hospital for treatment until the passage of a substantial amount of time.[57] When revisions were made in the Prisoner Control Handbook in 1971 and 1972, there were no modifications or additions to correct the problems encountered in providing medical attention to persons injured at the site of a demonstration. The Handbook mentions only that there is an agreement between the police department and the D. C. Department of Public Health to minister to the medical needs of persons being held in a detention facility. The Handbook also lacks instructions on the use of telephones by detainees who wish to call an attorney or some other person to arrange the posting of collateral.[58] The problem is compounded by an informal policy of not allowing an attorney to consult with any detainees unless he can give the name of a client. Attorneys representing organizations or from educational institutions who cannot identify specific detainees are not allowed into the detention areas.[59] In many instances the detainee is confronted with a no-win proposition: persons on the outside are unable to assist detainees 208 until they know the identities of the persons arrested, while the latter are prevented from making telephone calls which would allow them to make known the fact of their detention. An official of the department testified that an arrangement was finally made with the bar association to facilitate representation and release of arrested demonstrators, but the details of this agreement were not explicated at trial and are not embodied in any written guidelines. SUMMARY OF MATERIAL FACTS During the mass demonstrations taking place in the District of Columbia in the time period 1969-1971, there were numerous instances of disruptive and destructive behaviour by persons participating in these activities. In response, officers of the CDU repeatedly took actions which were unreasonable and unnecessary in the performance of their duties, including: arresting persons who had not engaged in illegal conduct; excessive use of force; unrestricted and hazardous use of chemical agents (primarily gas); unjustified maintenance of police lines and initiation of sweeps; failure to give sufficient warning to demonstrators of the establishment of police lines; and refusing to advise arrestees of the charges being placed against them or of their constitutional rights under Miranda v. Arizona. The failure to use field arrest forms during some demonstrations made it virtually impossible to distinguish between those persons who had been properly arrested and those who had been taken into custody without probable cause. Preparation and administration of the Prisoner Control Center was also deficient, resulting in numerous examples of actions which were unreasonable and unnecessary in the performance of its duties, including: lengthy periods of incarceration of persons entitled to collateral release; placing detainees in overcrowded cells, restricting access to telephones; failing to provide adequate medical attention; failing to advise detainees of the specific charges being placed against them; and conditioning release on the willingness to answer questions of a purely personal nature and which were irrelevant to the proper processing of detainees.[60] The persons named as defendants in this action, acting in their official capacities, are responsible for the selection, training and supervision of officers assigned to the Civil Disturbance Unit and Prisoner Control Center during mass demonstrations. The application and selection process devised by defendants for determining which officers will be assigned to the CDU does not adequately identify, to the extent practicably possible, those officers who are not qualified for these specialized duties. Further, many examples of misconduct by CDU and PCC officers were the direct result of policies and procedures authorized by defendants and of defendants' failure adequately to train, supervise and coordinate the activities of subordinates. The CDU training manual, outdated and not in current use, exemplifies the lack of attention to effective training and supervision. Defendants have not instituted measures which will prevent the recurrence of the kinds of misconduct described herein. Absent corrective action, the misconduct is likely to be repeated in future demonstrations, deterring persons from engaging in such activities. LAW The facts previously discussed raise a variety of legal issues pertaining to both the lawfulness of defendants' conduct and the scope of this Court's power to impose equitable relief, where appropriate. Analysis of the constitutional issues is best begun with the statutes and regulations pursuant to which the police 209 department is authorized to act. Plaintiffs contend that certain of these enactments may not be applied to demonstration situations in which persons exercise their First Amendment rights of public assembly and free speech. Resolution of these arguments will precede any discussion of the legality of police actions taken to enforce such provisions. a. Disorderly Conduct Failure to Move On The proscription against disorderly conduct is set forth in two sections of the District of Columbia Code: §§ 22-1107, 1121. The specific provision pertaining to the failure to obey a police order to move on is found at § 22-1121(2): Whoever, with intent to provoke a breach of the peace, or under circumstances such that a breach of the peace may be occasioned thereby . . . (2) congregates with others on a public street and refuses to move on when ordered by the police . . . shall be fined not more than $250 or imprisoned not more than ninety days, or both. Plaintiffs argue that this statute is too sweeping and too imprecise to pass constitutional muster, citing Cox v. Louisiana, 379 U.S. 536, 85 S. Ct. 453, 13 L. Ed. 2d 471 (1965). While Cox assuredly is the case upon which this issue must be decided, it does not compel the remedy sought by plaintiffs. The disorderly conduct statute involved in that case was worded almost identically to the one in the District.[61] In declaring the law unconstitutional, the Supreme Court noted that although that part of the statute pertaining to the refusal to move on pursuant to an order of a police officer was narrow and specific, the prohibition against congregating "with intent to provoke a breach of the peace, or under circumstances such that a breach of the peace may be occasioned" was vague and overly broad. Because this wording could encompass speech and conduct protected by the First Amendment, it was unconstitutional on its face. The Court has often stated, however, that a limiting construction of an overly broad or vague statute by the courts of proper jurisdiction may save it from the claim that it is unconstitutional. See, e. g., Gooding v. Wilson, 405 U.S. 518, 92 S. Ct. 1103, 31 L. Ed. 2d 408 (1972). Just such an authoritative interpretation of the disorderly conduct statute has been made by the United States Court of Appeals for this Circuit, narrowing the scope of the law's applicability in a manner which adequately protects First Amendment activities. Williams v. District of Columbia, 136 U. S.App.D.C. 56, 419 F.2d 638 (1969).[62] The Court in Williams construed the public profanity provision of § 22-1107[63] to apply only to the utterance of 210 obscene or profane language in public which threatens a breach of the peace. The Court then defined the concept of breach of the peace: And for these purposes a breach of the peace is threatened either because the language creates a substantial risk of provoking violence, or because it is, under `contemporary community standards,' so grossly offensive to members of the public who actually overhear it as to amount to a nuisance. While the latter portion relating directly to profane language is not pertinent to the issue at hand,[64] the conclusion that a substantial risk of violence must be present before an utterance may constitute a breach of the peace is directly applicable to this case. The police may not attempt to regulate the conduct of a demonstration by ordering persons to "move on" unless a breach of the peace is threatened or intended. Further, the standard guiding an officer in deciding whether a breach of the peace has occurred or will occur is the presence of a substantial risk of violence. Although it may be argued that this construction of the law still allows the officer too much latitude and does not define the operative term "violence", the Court believes that this interpretation, when applied to the failure-to-move-on provision, sufficiently narrows and clarifies the prohibitory language to distinguish this case from the issue confronting the Court in Cox. The fact that the police apparently did not abide by this restrictive construction poses additional questions which will be discussed later. It is sufficient at this point to conclude that the failure-to-move-on provision construed in the manner previously explained, may be constitutionally enforced against persons arrested in demonstrations. b. Unspecified Charges of Disorderly Conduct under §§ 22-1107, 1121 These two statutes, defining the offense of disorderly conduct, are multifaceted. Various kinds of conduct come under their umbrella. As previously discussed, part of the language employed would be void for vagueness were it not for the incorporation of a limiting interpretation by this Circuit's Court of Appeals. Plaintiffs further argue the proposition that "[u]nspecified charges of disorderly conduct under 22 D.C.Code §§ 1107, 1121 are too vague to serve as the basis of police actions or arrests in demonstration situations."[65] Individual officers (sometimes under instructions) undoubtedly have failed to state adequately the charges placed against arrestees. The alleged illegality of these actions and possible equitable remedies will be taken up later. However, as with the failure-to-move-on provision, the Court understands the problem to lie in the enforcement of the law, and not in the provisions themselves. The fact that police officers sometimes seem to be unwilling to enforce these laws in a proper manner does not necessitate the conclusion that the law is so poorly drafted as to be incapable of constitutional application. c. Police Line Ordinance The police line ordinance is set forth in Article VI, Section 5(a) of the Police Regulations of the District of Columbia: When fires, accidents, wrecks, explosions, parades or other occasions cause 211 or may cause persons to collect on the public streets the Chief of Police or officer acting for him may establish such area or zone as he considers necessary for the purpose of affording a clearing for: (1) the operation as firemen or policemen; (2) the passage of a parade; (3) the movement of traffic; (4) the exclusion of the public from the vicinity of a riot or disorderly gathering, accident, wreck, explosion or other emergency, and (5) the protection of persons and property. Every person present at the scene of such an occasion shall comply with any necessary order or instruction of any police officer. No person shall enter such area or zone, unless duly authorized by the person in command on such an occasion: Provided, that bona fide representatives of the press and bona fide insurance adjusters or underwriters and such other persons as the Chief of Police may authorize to be within such space and who shall have plainly exposed to view the press pass or the pass described in this section shall be permitted within the lines established by the Police Department . . . The scope of the ordinance is expansive, to say the least. Limits on police discretion are virtually nonexistent. Unlike the portions of the disorderly conduct statute discussed above, the breadth of this ordinance is not limited by judicial or regulatory construction.[66] A few examples of the vagueness inherent in the ordinance should be cited. The instigating events which may trigger the creation of a police line include, in addition to the easily recognizable disasters (fire, explosion, etc.), "other occasions [which] cause or may cause persons to collect on the public streets." No distinction is made between public gatherings which are related to first amendment activities and those which are not. One of the purposes for which the police line may be erected is the protection of persons and property. However, neither the ordinance nor accompanying guidelines outline the kinds of dangerous conditions which might warrant this sort of intervention. Again, the proper course of conduct may be easily apprehended when a fire occurs, but is less well defined when a demonstration takes place. An officer may conclude that demonstrators are using language offensive to bystanders and that a police line is a proper preventive measure, as was done in the Three Sisters bridge demonstration. There are no instructions to officers that the overreaction of bystanders to the conduct or words of demonstrators may not be the basis for initiating a police line. See Terminiello v. Chicago, 337 U.S. 1, 69 S. Ct. 894, 93 L. Ed. 1131 (1949); Cantwell v. Connecticut, 310 U.S. 296, 60 S. Ct. 900, 84 L. Ed. 1213 (1940).[67] Perhaps the most open-ended provision of the ordinance states that "[e]very person present at the scene of such an occasion shall comply with any necessary order or instruction of any police officer." Anyone who disobeys such an order is presumably subject to arrest. It is difficult to conceive of a more pernicious proscription. A police officer is given unfettered discretion to issue any order he thinks reasonable and then is allowed to initiate criminal proceedings against a person who disobeys the order. Justice Black perceived this evil in his concurrence in Gregory v. Chicago, 394 212 U.S. 111, 113, 89 S. Ct. 946, 22 L. Ed. 2d 134 (1969): To let a policeman's command become equivalent to a criminal statute comes dangerously near making our government one of men rather than of laws.[68] The serious due process flaw in such an arrangement is further compounded when the law enforcement officer's discretion is exercised in the context of constitutionally protected First Amendment activities.[69] Nor may defendants assert the pretense that this is merely a regulation as to time and place. The mechanics of establishing a police line (e. g., the geographic area to be encompassed, the number of officers deployed, means of maintaining the line against assault, the duration of time which the line is to be maintained, how to announce to the public the initiation of a line) are conspicuously absent from the police regulations. Clearly the police department must have some flexibility in its choice of techniques to carry out its lawful duties. This virtually axiomatic proposition can be neither a defense nor excuse, however, for the kind of limitless arrogation of power embodied in the police line ordinance. The record in this case is replete with instances of police excesses and interference with lawful demonstration activities arising out of the decision to deploy a police line and/or to order a sweep. With only verbal orders to guide them, police officers cannot hope to satisfy the restrictive demands imposed on the government before it may regulate conduct which incorporates elements of speech protected by the First Amendment. For this reason, the Court concludes that the police line ordinance, as applied to demonstration activities (i. e., those in which First Amendment rights are being asserted), is unconstitutionally vague and overly broad. Until the police department or the District of Columbia government specifies the scope and limits of the department's power to clear a public area, sufficient to inform both the police and the public of their responsibilities, it must be enjoined from erecting police lines and initiating sweeps of areas during demonstrations. Constitutionality of Police Conduct 1. Crowd Control Peaceful demonstrations carried on in a location generally open to the public are entitled to the protection of the First Amendment. Amalgamated Food Employees Union Local 590 v. Logan Valley Plaza, 391 U.S. 308, 88 S. Ct. 1601, 20 L. Ed. 2d 603 (1968). Because they possess both speech and non-speech elements, demonstrations are subject to reasonable regulations which limit the time, place or scope of the activities (e. g., traffic laws). See Cox v. Louisiana, 379 U.S. 559, 85 S. Ct. 476, 13 L. Ed. 2d 487 (1968); Cox v. New Hampshire, 312 U.S. 569, 61 S. Ct. 762, 85 L. Ed. 1049 (1941). However, the mere fact that conduct is an element of a demonstration is not justification for proscribing the entire event. Logan Valley Plaza, supra. Whenever the government seeks to regulate activity which combines speech protected by the first amendment with other forms of conduct, it must employ the least restrictive means available to accomplish its limited objective. The Supreme Court in United States v. O'Brien, 391 U.S. 367, 88 S. Ct. 1673, 20 L. Ed. 2d 672 (1968) devised the following 213 test for determining the legality of this type of government regulation: Whatever imprecision inheres in these terms, we think it clear that a government regulation is sufficiently justified if it is within the constitutional power of the Government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.[70] The police department's practices during the demonstrations of 1969-1971 failed to satisfy this standard. Perhaps the most easily identifiable deficiencies were the improper use of police lines and sweeps, and invocation of the failure-to-move-on statute in a manner which maximized the chance of arresting persons who were innocent of any wrongdoing. The large percentage of arrestees whose charges were dropped lends credence to plaintiffs' claims that a significant number of persons were arrested without probable cause. Such arrests were manifestly violative of the Fourth Amendment.[71] Furthermore, the decision in the Watergate and May Day demonstrations to suspend use of the field arrest forms and the failure to otherwise record information necessary for prosecution resulted in arrests which were presumptively invalid because of the inability to establish probable cause. Sullivan v. Murphy, supra. Even when there was probable cause for arrests, the means used were often unjustified. The use of physical force in excess of that required to effectuate an arrest or to carry out other lawful duties was a deprivation of the constitutional rights to due process of law and to be secure against unreasonable searches and seizures. Carter v. Carlson, 144 U.S.App.D.C. 388, 447 F.2d 358 (1971), rev'd on other grounds, 409 U.S. 418, 93 S. Ct. 602, 34 L. Ed. 2d 613 (1973); see also Screws v. United States, 325 U.S. 91, 65 S. Ct. 1031, 89 L. Ed. 1495 (1945). The characterization "physical force" includes not only the beatings inflicted, but also overly enthusiastic use of the riot baton and chemical agents.[72] In most demonstrations, neither the officers in the field nor their supervisors made sufficient efforts to minimize the interference with constitutional rights. On the contrary, they consistently overreacted and overstepped the bounds of their constitutional powers. These actions did not meet the standards of Cox, Logan Valley and O'Brien. 2. Post-Arrest Procedures Because of the large number of arrests made in these demonstrations, difficulties arose in the processing of arrestees which the department would not normally face. Certainly the department 214 must have administrative flexibility in order to account for the exigencies of a given situation. Nevertheless, due process requires that certain minimum standards be observed when a person is taken into custody. The most egregious failings during the arrest and booking process, perhaps because there could be no reasonable excuses, were the refusal to advise arrestees of the specific charges being made against them and to give them their Miranda warnings. This misfeasance was a denial of due process. Feeley v. District of Columbia, 128 U.S. App.D.C. 258, 387 F.2d 216 (1967). As the Court of Appeals stated in the latter case: We think that when the participants were arrested and prosecuted they were entitled to know with some precision what law they had allegedly violated. Perhaps this is miniscule, but, when the Congress enacts laws describing criminal offenses in intricate patterns and with apparent variations in details, we think enforcement officers must be correspondingly exact.[73] Plaintiffs also argue that the booking process was overly long, entailing unreasonable delays in release. This claim is centered about the fact that many persons were prevented from obtaining their immediate release by posting collateral. Section 23-1110(b) of the D.C.Code allows a properly designated officer of the police department to issue a citation and to release from custody a person who has been arrested without a warrant on a misdemeanor charge. Although the statute is phrased in discretionary terms, the Court of Appeals has held that the police are required to advise a person arrested for a minor offense of the option of posting collateral and to give him the opportunity of exercising that option. United States v. Mills, 153 U.S.App.D.C. 156, 472 F.2d 1231 (1972).[74] This right to post collateral should be read in conjunction with the requirement that a person arrested with or without a warrant be taken before a court or magistrate "without unnecessary delay." Rule 5, Federal Rules of Criminal Procedure; D.C.Code § 23-562(c)(1). See also Mallory v. United States, 354 U.S. 449, 77 S. Ct. 1356, 1 L. Ed. 2d 1479 (1957). After the decision in Mills, it must be presumed that the booking and collateral release of a detainee should proceed without any unnecessary delays.[75] Whether law enforcement officials have moved with reasonable promptness must be examined on an ad hoc basis.[76] The mere fact that detainees spent hours in detention, often in inconvenient circumstances, before being processed and released does not itself compel the conclusion that the police were unnecessarily dilatory. For this reason, plaintiffs' request that the department adhere to a two hour time limit on collateral release is unreasonable and unsupportable. Cf. 18 U.S.C. § 3501. There is sufficient evidence, however, that the department followed procedures, or failed to adopt policies, which had the effect of unreasonably delaying the booking process and the opportunity for collateral release. Foremost was the practice of asking numerous personal questions which were irrelevant to the booking process. Many people were not allowed to post collateral, 215 even if available, until such questions were answered. Some persons who were ready to post collateral after completing all questioning were still required to wait hours before release.[77] Others who did not have sufficient money in their possession were not allowed to make telephone calls to persons outside who could obtain the money.[78] Finally, some question remains whether the department might not have made better preparations for these demonstrations so that sufficient personnel and adequate facilities could have been available. Whether the department purposely failed to make such plans in order to prolong the booking process, thereby keeping the demonstrators off the streets, cannot be conclusively determined from the record. Whatever the motivation, however, the net effect of keeping persons in detention for such extraordinarily long periods of time was unlawful.[79] 3. Medical Care/Fingerprinting Although the courts are loath to second-guess the judgment of medical authorities, there are instances when the level of medical care provided by public authorities is so grossly inadequate as to give rise to claims of cruel and unusual or summary punishment. See, e. g., Thomas v. Pate, 493 F.2d 151 (7th Cir. 1974). There is ample evidence in this record of examples of inadequate attention to the medical needs of persons in the custody of the police. In some cases the injuries were so severe that gross neglect by responsible officers, at the time of arrest and at the detention facility, amounted to deprivations of constitutional rights. Plaintiffs also contest the practice of photographing and fingerprinting arrestees who are not residents of the District. No cases have been cited in support of the proposition that this practice is a deprivation of constitutional rights. The Court finds that there is a rational basis for the policy and concludes that it does not entail a denial of due process or equal protection. However, both the photographs and fingerprints may be included in those documents which should be expunged pursuant to the ruling, infra, pertaining to the expungement of arrest records. Injunctive Relief At the outset of the discussion of the facts of this case, the Court summarily stated the burden of proof placed on plaintiffs to justify injunctive relief. It is appropriate at this juncture to reiterate the guidelines which the Court understands it must follow before it may invoke its equitable powers. Plaintiffs must prove: 1. That officers of the police department have engaged in a pattern of conduct which violates constitutional rights; 2. That this conduct has been repeated over a period of time and is likely to return if ameliorative steps are not taken; 3. That the unconstitutional conduct is the direct result of the department's 216 policies and procedures or has been allowed to occur because of the lack of supervision and training by defendants; 4. That defendants have failed to take adequate steps to correct the misconduct. Allee v. Medrano, 416 U.S. 802, 94 S. Ct. 2191, 40 L. Ed. 2d 566 (1974); Washington Free Community, Inc. v. Wilson, 157 U.S.App.D.C. 360, 484 F.2d 1078 (1973); Long v. District of Columbia, 152 U.S.App.D.C. 187, 469 F.2d 927 (1972); Lankford v. Gelston, 364 F.2d 197 (4th Cir. 1966). See also Carter v. Carlson, 144 U.S.App.D.C. 388, 447 F.2d 358 (1971), rev'd on other grounds, 409 U.S. 418, 93 S. Ct. 602, 34 L. Ed. 2d 613 (1973). In deciding whether to exercise its equitable jurisdiction, the Court is mindful of the problems inherent in any interference by the Court in the internal operations of the police department. Viewing the difficulties in a purely practical light, such relief should be avoided if the department itself is taking steps to rectify the deficiencies. Washington Free Community, Inc. v. Wilson, supra. However, the Court must also consider the symbiotic relationship existing between the police department in the District of Columbia and the courts. Efficient execution of the judicial process in criminal cases requires the effective cooperation of various law enforcement agencies. If the police department systematically fails to carry out its proper functions, it is a matter of direct concern to this Court.[80] The Supreme Court long ago recognized not only the federal judiciary's obligation to insure due process of law, but also "the duty of establishing and maintaining civilized standards of procedure and evidence" as part of its "[j]udicial supervision of the administration of criminal justice . . .." McNabb v. United States, 318 U.S. 332, 63 S. Ct. 608, 87 L. Ed. 819 (1943). This supervisory authority may reach into the operations of a law enforcement agency which directly affect the viability of criminal prosecutions. In McNabb, evidence was excluded and a conviction reversed as a result of improper police interrogation techniques. Although the Court was not confronted with the issue of injunctive relief, the decision in McNabb does establish the principle that when federal law enforcement officials engage in conduct which directly affects the judiciary's role within the criminal process, the Court has the power, pursuant to its supervisory authority, to establish standards of conduct which will insure the orderly administration of justice. In fashioning this relief, the Court hopes to give as much leeway as possible to the department in devising those procedures and policies which will best eradicate the problems discussed. There are two practices, however, which the Court feels should cease immediately: arrests pursuant to the police line ordinance and arrests made without field arrest forms (or other means of recording essential information). The first issue was discussed previously. The police line ordinance is unconstitutional as applied to demonstrations in which first amendment rights are being exercised. The police must be restrained from invoking it as a basis for arrest in this context. The use of field arrest procedures is a more difficult issue. It goes directly to the question of the Court's power to affect the internal decisions of the department. The police concededly 217 face an exceptionally difficult task when numerous arrests are made. Extraordinary responses by the department must be considered. Crucial decisions must be made in the heat of confrontation. The Court is sensitive to the charge that it is second-guessing the department in an area which is perhaps too fluid to be controlled by the relatively slow-moving judicial mechanism. Nevertheless, the Sullivan and McNabb cases certainly authorize, if not obligate, this Court to order the cessation of constitutional violations or gross improprieties by police which seriously hinder the administration of criminal justice. The defendants have failed to take the initiative. To the contrary, Chief Wilson testified that the abandonment of field arrest forms might again become feasible and desirable in mass demonstrations. Defendants have put nothing in the record to counter this assertion. The police may not simply claim exasperation at the enormity of the task and defer constitutional precepts to convenience. Therefore, defendants must be enjoined from instituting mass arrests without the contemporaneous completion of field arrest forms or some other administrative device for recording information necessary to establish probable cause. Affirmative Relief In addition to enjoining certain practices, the police department's inertia requires the Court to impose affirmative sanctions. This relief is neither unusual nor unwarranted. Lewis v. Kugler, 446 F.2d 1343 (3d Cir. 1971); Council of Organizations on Philadelphia Police Accountability and Responsibility (COPPAR) v. Rizzo, 357 F. Supp. 1289 (E.D. Pa.1973), aff'd sub nom. Goode v. Rizzo, 506 F.2d 542 (3d Cir. 1974). The Court will not endeavor at this point to order specific changes in police procedures. Nor will the Court take upon itself the task of rewriting the department's Orders or manuals. Instead, the course followed in the COPPAR case seems to be the most practical one. Defendants will be required to formulate a comprehensive, written plan (preferably in the form of a manual or handbook) which clearly states the policies and procedures to be followed by the department in mass demonstrations. The duties of officers assigned to the CDU and PCC should be clearly delineated. This plan should include instructions in all of those problem areas identified in the Findings of Fact. Some of the material comprising such a plan has already been adopted by the department, either by verbal or written order. Defendants' task will be put to these matters in written form and compiled in an orderly and understandable fashion. Other policies will have to be devised or rewritten. Defendants will be directed to file the comprehensive plan and statement of policy and procedures in this Court and serve a copy thereof upon counsel for plaintiffs within 90 days of the date of judgment in this case. Expungement of Arrest Records This Court has the power to order the expungement of records maintained incident to arrest (including photographs and fingerprints) for which probable cause did not exist or could not be shown. Menard v. Saxbe, 162 U.S. App.D.C. 284, 498 F.2d 1017 (1974). Declaratory relief to this effect that records of arrests made in the demonstrations discussed in this opinion which were not supported by probable cause may not be maintained by the police departmentis proper and will be so ordered. Injunctive relief, however, must be approached on a case by case basis. The record in this action is incomplete on the issues of which records are still retained by the department and whether expungement, or some other means of vitiating the adverse consequences of the arrests, should be ordered. Class-wide injunctive relief would be inappropriate on the basis of this record. Persons arrested should present requests for expungement of their records to the police department, which will hopefully comply in good faith with the holdings in Menard and Sullivan, and this case, without 218 further action by the aggrieved persons.[81] Counsel for the plaintiffs will present a form of judgment in accordance with this Memorandum Opinion. JUDGMENT This action came on for trial before the Court sitting without a jury and upon consideration of the testimony, the affidavits and exhibits, and the entire record herein, the Court having concluded that plaintiffs are entitled to judgment in this action, in accordance with the Memorandum Opinion including Findings of Fact and Conclusions of Law filed herein on July 28, 1975, it is by the Court this 26th day of August, 1975, Declared, ordered and adjudged: 1. That this action be, and the same hereby is, certified as a class action consisting of all persons who have participated in or observed and who intend to participate in or observe lawful, peaceful, orderly and non-obstructive public demonstrations for the exercise of their Constitutional rights of free speech and assembly; 2. That the Police Line Ordinance, Article VI, Section 5(a) of the Police Regulations of the District of Columbia be, and the same hereby is, declared unconstitutional as applied to demonstration activities in which First Amendment rights are being asserted in that said ordinance is vague and overly broad. 3. That defendants, their agents, successors, and assigns, and all those having actual notice of this Judgment be, and the same hereby are, enjoined from erecting police lines and initiating sweeps of areas during demonstrations pursuant to Police Line Ordinance, Article VI, Section 5(a) of the Police Regulations of the District of Columbia unless and until the police department or the government of the District of Columbia specifies the scope and limits of the department's power to clear public areas, sufficient to inform both the police and the public of their responsibilities. 4. That defendants, their agents, successors and assigns, and all those having actual notice of this judgment be, and they thereby are enjoined from attempting to regulate the conduct of persons exercising their First Amendment rights by ordering them to "move on" unless a breach of the peace involving a substantial risk of violence has occurred or will occur. 5. That defendants, their agents, successors, and assigns, and all those having actual notice of this Judgment be, and the same hereby are, enjoined from instituting mass arrests without the contemporaneous completion of field arrest forms or other administrative device or procedure for recording information necessary to establish probable cause for the arrest. 6. That all records of arrests of members of the class specified in paragraph 1 hereof during the demonstrations occurring on November 14, 1969, November 16, 1969, February 19, 1970, February 21, 1970, October 2, 1970, May 5-11, 1970, and the so-called May Day Demonstrations of 1971, as to whom the defendants and/or their predecessors failed to follow normal booking procedures and lack a contemporary field arrest form, photograph, or other evidence of probable cause for arrest, and as to whom, irrespective of alleged contemporaneous field arrest forms and photographs, the defendants failed to establish probable cause for the arrest, may not be maintained by the defendants and *219 all such seizures shall be deemed to have been "detentions" rather than "arrests". 7. That members of the class whose arrest records are invalid pursuant to paragraph 6 of this Order are entitled, upon request to defendants, to expungement of all such records, and recall for destruction of all such records and all copies thereof from all persons or agencies to which they have been disseminated. 8. That defendants be, and the same hereby are, ordered to formulate a comprehensive, written plan (preferably in the form of a manual or handbook) which clearly states the policies and procedures to be followed by the police department in mass demonstration situations and that such written plan be filed with this Court within ninety (90) days from the date of this Judgment, a copy of such plan to be served upon counsel for plaintiffs. 9. That judgment herein be, and the same hereby is, entered for plaintiffs in accordance with the preceding paragraphs; and 10. That plaintiffs recover of defendants their taxable costs. NOTES [1] Demonstrations occurring subsequent to the filing of the complaint were stipulated to (see Pretrial Orders of March 30, 1971 and March 11, 1974) and evidence relating to them was admitted. The complaint is amended to conform to the evidence. F.R. Civ.P. 15(b). [2] Plaintiffs alleged in their complaint that they represented a class of all persons who have been or intend to become involved in public demonstrations in which first amendment rights are asserted. Defendants have made reference to the fact that plaintiffs did not file a motion to certify this a class action, pursuant to Rule 1-13 of the rules of this Court. The latter rule, however, was not promulgated until August, 1973, subsequent to the filing of this lawsuit. When the action was filed in 1970 plaintiffs were obliged only to satisfy the requirements of Rule 23 of the Federal Rules of Civil Procedure, which have been met by the complaint. It should also be pointed out that defendants tacitly conceded the propriety of having this proceed as a class action by their assent to the presentation of evidence at trial which clearly would have been immaterial had this case not presented issues of class-wide relief. Accordingly, the Court has allowed plaintiffs to proceed as representatives of a class consisting of all persons who have participated in or observed and who intend to participate in or observe lawful, peaceful, orderly and non-obstructive public demonstrations for the exercise of their constitutional rights of free speech and assembly. Plaintiff Nickerson, however, who seeks to represent a class of attorneys who have counselled or will counsel persons arrested in demonstrations, has not alleged or proven sufficient facts to meet the four requirements of Rule 23(a). A similar defect is found in the allegations of the two organization plaintiffs, which failed to show that they continue their activities or that they have a direct interest in the outcome of this action. The Court believes that plaintiffs Nickerson, Washington Mobilization Committee and the Committee To Defend the Conspiracy cannot fairly and adequately represent and protect the interests of the classes they seek to represent. [3] The original defendants were Jerry V. Wilson, Chief; Owen Davis, Deputy Chief and Commander of the Civil Disturbance Unit; Captains Charles M. Monroe and Earl Drescher, supervisory officials of the Civil Disturbance Unit; and Raymond S. Pyles, a supervisory official involved in the processing of arrestees. Three of these positions have since been filled by other officials who are substituted as parties pursuant to Rule 25(d) of the Federal Rules of Civil Procedure: Chief Maurice J. Cullinane; Deputy Chief Robert L. Rabe; Assistant Chief Theodore R. Zanders. Charles Monroe has since been appointed a Deputy Chief of Police and is still named as a defendant in that capacity. Earl Drescher was dismissed as a defendant in this action at the time of pretrial, with the consent of all parties. [4] This action was filed prior to the effective date of the D. C. Court Reform and Criminal Procedure Act of 1970, which repealed this provision. [5] Previous dispositions taken in this case were the denials of motions for temporary restraining order (March 17, 1970) and for preliminary injunction (April 13, 1970). [6] These figures are taken from defendants' answers to interrogatories filed February 15, 1975. [7] From 1969 to present, the CDU has had three different Commanders. From 1969 through October, 1970, Owen Davis was Deputy Chief, followed by Theodore Zanders (November, 1970 to June, 1973) and then Robert Rabe (June, 1973 to present). [8] No attempt is made to detail or describe every police/demonstrator confrontation during the demonstrations. Those set forth are representative of the types of occurrences and supply the basis for the Court's findings and conclusions. [9] The demonstration was unrelated to the anti-war activities being staged during the same time period. [10] These persons were identified as Georgetown University students. [11] Witnesses testified that other incidents occurred in which police struck demonstrators without provocation, including one person attempting to take pictures of the police activities. Pl. Ex. 135. [12] Memorandum from Lt. Watson to the Commander, Tactical Section, Special Operations Division, December 10, 1969. [13] Chief Wilson did not arrive until later, after arrests had begun. [14] The evidence indicates that there was little violence occurring in the vicinity of the Columbia Plaza, although some water balloons were hurled from upper windows of the building on to police. The situation became more hectic after police decided to initiate arrests of demonstrators in this area. [15] Defendants' exhibit X. [16] In one incident a scuffle occurred between a demonstrator wielding a long pole and an officer who was trying to apprehend him. The officer eventually cornered his prey and began to strike him. One witness who testified at trial attempted to intercede by trying to pull the officer away. At this point, a second officer left his position in the police line and struck the witness over the head with his baton. The witness incurred a concussion as a result of the blow and was hospitalized. The officer who struck her was verbally reprimanded for leaving the police line and for improperly using his baton, but was not otherwise disciplined for his conduct. [17] Marsh brought a civil action for damages as a consequence of this incident. Judgment was recently rendered in his favor and damages in the amount of $5,500.00 were awarded. Marsh v. Hollingsworth, Civil Action No. 392-71 (D.D.C. Jan. 2, 1975) (Parker, J.). [18] Johnson's testimony referred to arrests made on both the 19th and 21st of February. Events taking place on the latter date are discussed in the succeeding section. [19] Testimony of Thomas Johnson, March 20, 1974, Tr. 7. [20] A complaint concerning this event was made to the police department by the reporter's newspaper, but no action was taken. [21] Defendants' Exhibit U. [22] One female was subject to a search of her vaginal and anal cavities. [23] The Court takes judicial notice of the fact that Georgetown is a popular shopping and social area of the city which attracts large numbers of persons. [24] In one incident a student acting as a volunteer medic (and identified as such) began assisting a demonstrator who was bleeding from the mouth. When the medic continued to treat the injury after an officer told him to cease, he was arrested. Affidavit Robert Brown, Pl. Ex. 140. [25] In these incidents, a number of officers stood by while a single officer would apply this choke-hold to the arrestee. Even if the victim was resisting arrest (which is not evident from the film), there were sufficient officers available to bring the person into their control without resort to the potentially dangerous tactic employed. [26] Pl. Ex. 140. [27] Another example of the misuse of tear gas by the police is found in the testimony of John Gershon, a witness who testified that during this first week of May he was on the George Washington University campus as a volunteer medic during demonstrations in that locale. At one point, while aiding a person in the street who had been incapacitated by Mace, Gershon observed an officer in a police line fire a gas projectile at him from close range. The missile missed Gershon's head by about three feet. Following this incident Gershon retreated to a nearby church which had been designated a first aid station. In spite of the fact that people around the church were clearly identifiable as medical personnel, police proceeded to saturate the area with gas, requiring the witness' evacuation from the station. [28] Affidavits of Randy Roth and Richard Taxin, Pl. Ex. 140. These students previously involved in the softball game were arrested at the time of this described incident, but later had the charges dismissed by the prosecutor. [29] The officer subsequently resigned from the department. [30] Pl. Ex. 14. [31] Deputy Chief Zanders stated in a deposition in evidence that no changes had been made in CDU policies while he was commander (1970-1973). Pl. Ex. 119. At trial, Zanders qualified his original assessment, stating that no written policy changes had been made, but that changes were instituted through verbal orders. [32] An example of a General Order is Series 502, No. 1, March 1, 1972, SUBJECT: Processing Prisoners and Centralization of Prisoner Confinement. The Order contains the following preface: "The purpose of this order is to establish the policy and procedures for centralizing prisoner confinement and for processing prisoners through the Identification Annex, Central Records Division, and district Stations." Pl. Ex. 24. [33] Pl. Ex. 25. Excluded from this rule are minor traffic violations. [34] General Order No. 1 Series 801, December 1, 1971, Pl. Ex. 10. [35] December 1, 1971. [36] The Order also advised that the chemical should be used in situations in which use of a gun or baton would be justified. [37] Pl. Ex. 142. [38] Testimony Theodore Zanders, April 4, 1974, Transcript pp. 33-38. [39] It is interesting to note that Zanders' replacement as head of the CDU, Robert Rabe, never attended any of the CDU training classes and did not engage in a formal review of the Unit's procedures with Zanders, in spite of the fact that Rabe's previous position was not in the CDU. Although Rabe had had contact with CDU operations in the course of his duties as liaison between the police department and other law enforcement agencies (e. g., Park Police, military), the Unit's prior history raises doubts whether this exposure was sufficient to maintain continuity. [40] Testimony of Chief Jerry Wilson, April 8, 1974, Tr. 134-35. [41] A formal complaint is one filed with the Mayor's office and signed under oath. [42] The IAD was established in 1961. Testimony of Chief Wilson, April 8, 1974, Tr. 137. [43] Inspector Chapoutot assumed his position of Disciplinary Review Officer in December, 1971. [44] Pl. Ex. 121, 122. Answer to interrogatory # 151. [45] See General Order No. 6, Series 1968, August 16, 1968. Pl. Ex. 4. [46] Shortly after the difficulties in the Watergate demonstration manifested themselves in an inability to prosecute most of the persons arrested, Chief Wilson openly criticized Davis for his decision to suspend use of the field arrest forms. Ironically, in the May Day demonstrations of 1971 Wilson made the same decision to suspend use of the field arrest forms in order to speed up the process of clearing the streets. [47] Pl. Ex. 8, 15. Testimony was also given by Capt. Allen Wolf concerning various field experiments the department had engaged in to streamline the mass arrest process. [48] The handbook notes that the revisions were prodded by judicial criticism of the treatment accorded persons arrested during the May Day demonstrations. Specific deficiencies which the revisions sought to correct included: the assignment of only one arresting officer to a large number of arrestees; the completion of the field arrest forms by officers other than those who signed them; and the use of a general criminal charge without specifically identifying the type of offense. [49] See General Order No. 1, Series 801, December 1, 1971, Pl. Ex. 10. [50] PCC is instructed not to accept prisoners without an accompanying field arrest form. [51] The officer records the name of the prisoner, circumstance of arrest, and the arresting officer's signature, unit and badge number. [52] The department also has access to facilities at Washington Coliseum, Kalorama skating rink and United States District Courthouse. In spite of the availability of space, the arrestees from a given demonstration would often be brought to one detention facility, resulting in the overcrowding of cells (up to 10 people detained in a 2-man cell). [53] General Order Series 502, No. 1, March 1, 1972, provides for the fingerprinting and photographing of all persons arrested for disorderly conduct, except that District of Columbia residents with adequate identification need not be subjected to these dual requirements. Pl. Ex. 24. [54] Revision of Prisoner Control Handbook, September 1, 1972. Def. Ex. I-1, p. 53. [55] Id. [56] February 11, 1970. [57] The tardiness in the provision of medical care appears to have been caused, in part, by a policy of not transporting arrestees to one of the booking areas until a transport vehicle (e. g., a bus) was completely full. The evidence does not show that the department made available special vehicles for transporting persons in need of immediate medical attention. [58] According to Capt. Allen Wolf, in charge of the detention and processing section of PCC until October, 1972, prisoners are allowed reasonable access to telephones in the detention facilities. The evidence shows that if such was the policy, it was not always carried out by officers involved in the booking process. See discussion, supra, of the Watergate demonstration in 1970. [59] Testimony Capt. Wolf, Tr. 18-19. [60] Contrary to plaintiffs' assertions, this Court finds that the fingerprinting and photographing of persons arrested in mass demonstrations was reasonable and appropriate to the task of processing detainees. [61] La.Rev.Stat. § 14:103.1 (Cum.Supp.1962). [62] See also Von Sleichter v. United States, 153 U.S.App.D.C. 169, 472 F.2d 1244 (1972). [63] § 22-1107 provides: It shall not be lawful for any person or persons within the District of Columbia to congregate and assemble in any street, avenue, alley, road, or highway, or in or around any public building or inclosure, or any park or reservation, or at the entrance of any private building or inclosure, and engage in loud and boisterous talking or other disorderly conduct, or to insult or make rude or obscene gestures or comments or observations on persons passing by, or in their hearing, or to crowd, obstruct, or incommode, the free use of any such street, avenue, alley, road, highway, or any of the foot pavements thereof, or the free entrance into any public or private building or inclosure; it shall not be lawful for any person or persons to curse, swear, or make use of any profane language or indecent or obscene words, or engage in any disorderly conduct in any street, avenue, alley, road, highway, public park or inclosure, public building, church, or assembly room, or in any other public place, or in any place wherefrom the same may be heard in any street, avenue, alley, road, highway, public park or inclosure, or other building, or in any premises other than those where the offense was committed, under a penalty of not more than $250 or imprisonment for not more than ninety days, or both for each and every such offense. [64] This holding does preclude, however, the practice often engaged in by police of arresting persons who were shouting obscenities during a demonstration (for example, at the Three Sisters Bridge demonstration). A number of arrests predicated solely on the profanity of the arrestee, without a showing of a likelihood of inciting violence, were clearly without probable cause and unlawful under Williams. [65] Plaintiffs' proposed conclusion of law # 6. [66] Chief Wilson confirmed in his testimony that the department had no written guidelines pertaining to the maintenance of police lines and had no plans to issue any. Testimony of Jerry Wilson, April 8, 1974, Tr. 131. [67] Of course, so-called "fighting words" may be so provocative of violence as to allow official intervention, but this nuance of constitutional law is not reflected in the ordinance. See Feiner v. New York, 340 U.S. 315, 71 S. Ct. 303, 95 L. Ed. 295 (1951); Chaplinsky v. New Hampshire, 315 U.S. 568, 62 S. Ct. 766, 86 L. Ed. 1031 (1942). [68] 394 U.S. at 120, 89 S.Ct. at 951. [69] See Cox v. Louisiana, 379 U.S. 557-58, 85 S.Ct. at 466: "It is clearly unconstitutional to enable a public official to determine which expressions of view will be permitted and which will not or to engage in invidious discrimination among persons or groups either by use of a statute providing a system of broad discretionary licensing power or, as in this case, the equivalent of such a system by selective enforcement of an extremely broad prohibitory statute." [70] 391 U.S. at 377, 88 S.Ct. at 1679. [71] Even if the arresting officers had acted in good faith, they would not be saved from potential liability for the constitutional deprivations. Pierson v. Ray, 386 U.S. 547, 87 S. Ct. 1213, 18 L. Ed. 2d 288 (1967). In Pierson, the Court created a defense to an action under § 1982 for unlawful arrest that an officer is not liable if he "reasonably believed in good faith that the arrest was constitutional . . ." Some disagreement has developed whether a "reasonable belief" should be determined as a subjective element of the defense or viewed as an objective determination of probable cause. Compare Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 456 F.2d 1339 (2d Cir. 1972); Brubaker v. King, 505 F.2d 534 (7th Cir. 1974) with Joseph v. Rowlen, 402 F.2d 367 (7th Cir. 1968); Boscarino v. Nelson, 377 F. Supp. 1308 (E.D. Wis.1974). Whichever interpretation is accepted, it is clear that the mere assertion of good faith by an arresting officer does not obviate the need to also prove the reasonableness of his belief that his actions were constitutional. See also Whirl v. Kern, 407 F.2d 781 (5th Cir. 1969). [72] There is, of course, a wide variety of police actions which, in a given time and place, may be mistreatment of a constitutional dimension. See, e. g., Anderson v. Nosser, 456 F.2d 835 (5th Cir. 1972) (en banc). [73] 387 F.2d at 219-20. [74] This principle was reaffirmed in United States v. Robinson, 153 U.S.App.D.C. 114, 471 F.2d 1082 (1972), rev'd on other grounds, 414 U.S. 218, 94 S. Ct. 467, 38 L. Ed. 2d 427 (1973). Defendants amendments to the Prisoner Control Handbook, promulgated September 1, 1972, recognized the obligations imposed by Mills. Def. Ex. I-1. [75] See also D.C.Code § 23-562(c) (2), which requires that booking of arrestees be carried out with "reasonable promptness." [76] See Gray v. United States, 394 F.2d 96 (9th Cir. 1967); Butterwood v. United States, 365 F.2d 380 (10th Cir. 1966), cert. denied, 386 U.S. 937, 87 S. Ct. 960, 17 L. Ed. 2d 810. [77] This may have been part of a decision to defer taking collateral until all persons had been booked. This decision would have been tolerable if the booking process itself had not been prolonged needlessly. [78] The Court finds that defendants' policy of not allowing attorneys or representatives of organizations to post collateral for detainees who they could not identify in advance was, in this context, an unnecessary delay in effectuating the release of many of the arrestees. However, there is no support for plaintiffs' contention that a person has a right to counsel at the time of booking or collateral release. These are not interrogative stages of the criminal process, but merely administrative prerequisites. Cf. Rule 44(a), Federal Rules of Criminal Procedure. [79] Plaintiffs also cite such conditions as overcrowded cells and inadequate sanitary facilities as examples of constitutional abuse. Although these problems might have been obviated by better planning, they do not appear to be of sufficient gravity to be deemed deprivations of constitutional rights. Cf. Anderson v. Nosser, 438 F.2d 183 (5th Cir. 1971), modified en banc, 456 F.2d 835 (5th Cir. 1972). [80] It is this fact which makes inapplicable defendants' argument that Gilligan v. Rhodes, 413 U.S. 1, 93 S. Ct. 2440, 37 L. Ed. 2d 407 (1973) is controlling. In that case, suit for injunctive relief was brought against the Ohio National Guard. The Court concluded that the case did not present a justiciable controversy because control of military operations is committed exclusively by the constitution to the executive and legislative branches of government. Although there may be some similarity between the problems of interfering in the internal operations of the police and the military, the constitutional difficulties of Gilligan are not present in this litigation. [81] The department should not continue to assert that they are barred by statute from expunging arrest records and that amplification is the sole remedy available to plaintiffs. See D.C.Code § 4-137; Spock v. District of Columbia, 283 A.2d 14 (D.C.Ct.App. 1971). The Court in Sullivan rejected this argument and held that a federal district court has the power to fashion a proper equitable remedy (including expungement) whenever constitutional rights have been violated.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367449/	400 F. Supp. 915 (1975) In the Matter of the Application of Joseph HELLMAN, as President of Graphic Arts International Union Local 119B, New York, Petitioner, v. PROGRAM PRINTING, INC., Respondent, for an order confirming the award of Israel Ben Scheiber, Arbitrator. No. 75 Civ. 2420. United States District Court, S. D. New York. September 16, 1975. 916 Lieberman, Aronson & Rosenberg, New York City, for petitioner. Proskauer Rose Goetz & Mendelsohn, New York City, for respondent. PIERCE, District Judge. OPINION AND ORDER This is a petition to confirm and enforce an arbitration award, brought originally in New York State Supreme Court and removed to the Southern District pursuant to 28 U.S.C. § 1441 and 29 U.S.C. § 185 on May 22, 1975. Respondent now moves to dismiss on the ground that the present dispute is not within the scope of the award, and that this Court must defer to the arbitration process. The motion to dismiss the petition is denied; the petition to confirm the award is granted; and the request for enforcement is denied. Facts Respondent Program Printing is engaged in the business of printing race track programs and forms. The company is owned by Sullivan Brothers Printers of Lowell, Massachusetts. Program Printing first operated its print shop at Aqueduct Race Track during the 1974 racing season. Under a contract with the New York Racing Association, it printed daily racing programs for both Aqueduct and Belmont race tracks. The covers for these programs were folded and condition and stake books were printed at Sullivan Brothers. Program Printing has entered into a number of collective bargaining agreements, one of which is with the petitioner union. The present dispute began when the union charged that the company was violating its agreement of January 21, 1974, by "having work in the operations or classifications covered by the agreement performed outside [the Aqueduct] factory." (Arbitrator's Opinion ("AO") at 1.). The union's position was that, because a previous employer had printed condition and stake books at Aqueduct and had folded program covers there, the company was obligated to do the same. On April 23, 1974, the union submitted the dispute to arbitration. Subsequently, the company installed new machinery which, it alleged, reduced its labor requirements. On May 4, 1974, Vincent M. Migliaccio, a member of the union, was laid off. Before the arbitrator the union claimed that the layoff was due to the transfer of work to Sullivan Brothers. On November 13, 1974, Arbitrator Israel Ben Scheiber of the New York Mediation Board rendered his decision (No. A74-1574). In a well-reasoned opinion, the Arbitrator concluded that the company had indeed transferred work in contravention of the collective bargaining agreement, and that Mr. Migliaccio's layoff was as a result of that transfer. The opinion also specifically found that there was sufficient work for Mr. Migliaccio if the transfer was stopped, despite the installation of the new equipment. (AO at 7-8). The 917 Arbitrator then entered the award, which directed the company to "1. Cease having the work in operations or classifications covered by the collective bargaining agreement performed outside of its Aqueduct plant, which work it is equipped to perform. "2. Reinstate Vincent Migliaccio on the same 6-day week basis on which he was employed prior to May 4, 1974, and that he be made whole at the rate of pay for a 6-day week as stipulated by the parties . . . ." (Award at 1). The company thereafter reinstated Mr. Migliaccio, and asserts that it now performs in its Aqueduct plant the work which would otherwise have been done at Sullivan Brothers. However, when the Aqueduct plant reopened for the season in February, 1975, Mr. Migliaccio was not rehired. The company took the position that there was no longer enough work for Migliaccio, in that the company had lost the contract to publish condition and stake books. The union responded by bringing the present action, the collective bargaining agreement providing for enforcement of arbitration awards in the courts. In its petition, the union asks this Court to confirm the award, and to direct the company to cease performing work outside the plant, and to reinstate Mr. Migliaccio and pay him back pay damages from February 24, 1975, the date of the refusal to rehire, and for other relief. In their moving papers in support of the motion to dismiss, counsel for the company assert that the question raised is a new one, one beyond the scope of the award. Respondent presents the issue thusly: "[E]ven if no work is being transferred from the Aqueduct plant, must Mr. Migliaccio be reinstated if there is no work for him to do?" (Respondent's memorandum at 7). Respondent then proceeds to urge that this Court defer to arbitration, asserting that it does not even have subject matter jurisdiction of the present dispute. The gravamen of respondent's position is that a court may not confirm or enforce an award when the petition is being employed as a vehicle to resolve a new dispute. In response, the union contends that the company is now attempting to convince this Court with arguments which failed before the Arbitrator. Counsel for petitioner state that this Court has subject matter jurisdiction of the controversy, and that under the United States Arbitration Act, 9 U.S.C. § 1 et seq., this Court has a duty to confirm and enforce. Petitioner claims that the award below is final and binding, clear and unambiguous, and self-executing. Asserting noncompliance, petitioner asks for enforcement. Discussion Initially, this Court concludes that it has subject matter jurisdiction over the petition. 9 U.S.C. § 9. This is the case even though this dispute comes before the Court via 29 U.S.C. § 185 (§ 301 LMRA). See Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957). Further, even though this is a § 301 action the Arbitration Act is clearly applicable. Signal-Stat Corp. v. United Electrical Workers Local 475, 235 F.2d 298 (2d Cir. 1956), cert. denied, 354 U.S. 911, 77 S. Ct. 1293, 1 L. Ed. 2d 1428 (1957). Further, the collective bargaining agreement specifically provides for enforcement in the courts, a necessary prerequisite to jursdiction under the Arbitration Act. I/S Stavborg v. National Metal Converters, Inc., 500 F.2d 424 (2d Cir. 1974). Respondent's argument that this Court does not have jurisdiction is misstated. Jurisdiction to confirm is clearly present: "[A]t any time within one year after the award is made any party to the arbitration may apply to the court . . . for an order confirming the award and thereupon the court must *918 grant such order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title." (9 U.S.C. § 9) The respondent's counsel offer none of the grounds set forth in §§ 10 or 11; they do not ask this Court to vacate or modify the award. Indeed, this Court finds no statutory reason why the award should not be confirmed. There is no charge of fraud, partiality, or misconduct on the part of the Arbitrator, nor is it claimed that the award exceeded the power of the Arbitrator or that it is not final. (See 9 U.S.C. § 10). There is further no reason to modify the award; there is no charge of mistake or miscalculation in the award; there is no charge that the Arbitrator has passed upon a matter not submitted to him; and the award is not imperfect as to form. (See 9 U.S.C. § 11). The foregoing is the extent of this Court's review in a petition for confirmation. Sections 10 and 11 "exhausts the grounds upon which the district court . . . may disturb the arbitral award." I/S Stavborg, supra, at 429-30. Respondent's claim that the present dispute goes beyond the scope of the award is relevant to the issue of enforcement, not to the issue of confirmation. See Machinists Lodge 1893 v. Aerojet General Corp., 263 F. Supp. 343, 347 (C.D.Cal.1966). Thus, the Court concludes that the award must be confirmed in its entirety. However, this Court will not grant enforcement, for it concludes that the issue of whether the respondent must again rehire Mr. Migliaccio, in light of the alleged change in circumstances, is a proper subject for arbitration. The alleged loss of the contracts to print stake books and condition books, combined with the fact that racing-related employment is seasonal, militate against this Court interfering with the grievance machinery of the parties. The arbitration process is fundamental to this nation's scheme of labor-management relations, and the federal courts must give arbitration the appropriate deference. United Steelworkers v. Enterprise Wheel and Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960); United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960). "It is not within the province of this Court to intrude into the arbitration procedure and interpose its interpretation of a disputed award on the parties to the collective bargaining agreement." Transport Workers Local 234 v. Philadelphia Transportation Co., 228 F. Supp. 423 (E.D.Pa.1964). When a petition for enforcement involves a new dispute, such as this one, enforcement must be denied. Detroit & Midwestern States Joint Board v. White Tower Laundry & Cleaners, 353 F. Supp. 168, 169-70 (E.D.Mich.1973); Aircraft Lodge 703 v. Curtiss-Wright Corp., 169 F. Supp. 837, 842 (D.N.J.1959). However, the denial on enforcement does not preclude a grant of confirmation, even where the award itself has generated a new dispute. Machinists Lodge 1893 v. Aerojet General Corp., supra. Accordingly, the motion of respondent Program Printing to dismiss the petition is denied. The petition for confirmation of the Arbitrator's award is granted. The request for enforcement of the award is denied. So ordered.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367451/	400 F. Supp. 705 (1975) NATIONAL WILDLIFE FEDERATION and Mississippi Wildlife Federation, Plaintiffs, v. William T. COLEMAN, Secretary, Department of Transportation, et al., Defendants. Civ. A. No. J75-129(N). United States District Court, S. D. Mississippi, Jackson Division. August 4, 1975. 706 A. Spencer Gilbert, III, Jackson, Miss., Robert J. Golten, National Wildlife Federation, Washington, D.C., for plaintiffs. Frank E. Shanahan, Jr., Asst. Atty. Gen., Jackson, Miss., Joe E. Brown, Asst. U.S. Atty., Robert E. Hauberg, U. S. Atty., Jackson, Miss., for defendants. FINDINGS OF FACT AND CONCLUSIONS OF LAW NIXON, District Judge. The Plaintiffs in this action brought suit under Section 4(f) of the Department of Transportation Act (49 U.S.C. § 1653(f)) and Section 7 of the Endangered Species Act (16 U.S.C. § 1536), seeking to halt the construction of a segment of Interstate Highway Route 10 (I-10) through the habitat of the Mississippi Sandhill Crane in Jackson County, Mississippi. A full hearing on the merits was combined with a hearing on the Plaintiffs' Request for a Preliminary Injunction. Based upon all of the evidence adduced at this bench trial, this Court makes the following Findings of Fact and reaches the following Conclusions of Law as required by Rule 52, F. R.Civ.P. FINDINGS OF FACT I-10 is a route designated by Congress as a part of the National System of Interstate and Defense Highways, connecting Jacksonville, Florida, on the east through designated intermediate control points, with Los Angeles, California on the west. In Mississippi, I-10 will be 77.1 miles long. As of now, I-10 has been substantially completed from the Mississippi-Louisiana line, through Hancock and Harrison Counties, to a point in Jackson County, Mississippi 707 where it intersects with State Highway 57. From the intersection with Highway 57, I-10 will extend in an easterly direction approximately 18.9 miles to the Alabama line. The controversy in this suit relates to a portion of I-10 which is approximately 5.7 miles in length, extending in an easterly direction from its intersection with Highway 57 to the west bank of the Pascagoula River. I-10 is being constructed by the Mississippi Highway Department, with Federal funding of 90% of the cost incurred, under the provisions of the Federal-Aid Highway Act, as amended, Title 23, United States Code. The Mississippi Sandhill Crane, Grus canadensis pulla, was listed as an endangered sub-species on June 4, 1973, at 38 Fed.Reg. 14678, pursuant to Section 3 of the Endangered Species Act of 1969, P.L. 91-135, Dec. 5, 1969 (former Section 668cc-3, Title 16, United States Code), now repealed and replaced by the Endangered Species Act of 1973, P.L. 93-205, Dec. 28, 1973, 87 Stat. 884. There remain in existence approximately forty Mississippi Sandhill Cranes. The sole habitat of this endangered species is an area of some 40,000 acres in Jackson County, Mississippi, generally bounded on the west by the Harrison County line, on the north by an east-west line running a short distance north of the Vancleave community, on the east by the Pascagoula River, and on the south by the Mississippi Sound or Gulf of Mexico. I-10 has already been constructed in a west-east direction slightly more than half way through the aforesaid crane habitat to its intersection with Highway 57. A Mississippi Sandhill Crane refuge in Jackson County, consisting of two separate units, has been proposed by the U. S. Fish and Wildlife Service. A part of this proposed refuge has already been acquired by the Nature Conservancy, a private organization, under an agreement whereby the Service will reimburse the Conservancy when and if it receives sufficient appropriations from Congress. The western unit (Ocean Springs) of the refuge abuts the section of I-10 which is soon to be completed to its intersection with Highway 57. The portion of I-10 which is the subject of this suit runs directly through the habitat of the Crane and will bisect the eastern unit (Fountainbleu) of the proposed refuge. The alignment of this project traverses Sixteenth Section land presently held by the Jackson County School District and also cuts through Fifteenth Section land held by the Nature Conservancy for the proposed refuge. This segment of I-10 has been under consideration since 1963. At the time that this action was instituted, all of the right-of-way for I-10 between State Highway 57 and the Pascagoula River had been acquired, with most of it having been purchased prior to 1970. A draft environmental impact statement was approved by the Federal Highway Administration and circulated on October 29, 1974. A final environmental impact statement was approved by the Federal Highway Administration on March 10, 1975, and submitted to the Council on Environmental Quality on March 13, 1975. On March 21, 1975, the Plaintiff, National Wildlife Federation, through its counsel, wrote the defendant, Tiemann, the Federal Highway Administrator, expressing opposition to the project because of alleged violations of Section 7 of the Endangered Species Act and Section 4(f) of the Department of Transportation Act. A copy of that letter was sent to the Department of Interior's Director of Fish and Wildlife Service, its Solicitor's Office, and the Department's Office of Environmental Affairs. On April 30, 1975, approval of plans, specifications and estimates for the 5.7 miles of the project was given by the defendant, Shaw, pursuant to 23 U.S.C. § 106(a), which constituted a final action by the Federal Highway Administration obligating the United States to participate in the cost of the project. 708 On May 23, 1975, plaintiffs filed this suit. A contract was let by the Mississippi Highway Department for the construction of this segment of highway on May 27, 1975, subject to the approval of the award by the Federal defendants. Submission of the contract to the Federal defendants for their approval and action has been temporarily suspended pending the trial of and decision in this action. On June 25, 1975, the eve of the trial of this action, the Department of Interior made an emergency determination that the Mississippi Sandhill Crane's habitat traversed by this highway project is "critical" under Section 7 of the Endangered Species Act, and was about to be so designated in the Federal Register. On June 30, 1975, this designation was in fact published at 40 Fed.Reg. 27501. CONCLUSIONS OF LAW A. JURISDICTION Plaintiffs allege that this Court has jurisdiction of this controversy under Section 4(f) of the Department of Transportation Act[1] and Section 7 of the Endangered Species Act.[2] We first consider whether Section 4(f) of the Department of Transportation Act has any applicability to the present controversy. In making this determination the key issue which the Court must consider is whether this project "requires the use of any publicly owned land from a public park, recreation area, or wildlife and water fowl refuge of national, State or local significance". The plaintiffs urge that Section 4(f) does apply, since a portion of the project in question traverses Sixteenth Section land, which is owned by the Jackson County School District, thereby making the land "public land", and because the entire project will cross land which is being used as a "de facto" refuge by the Cranes and which is proposed as an official refuge therefor. The Court finds this contention unconvincing. I-10 simply will not use any "publicly owned land from a public park, recreation area, or wildlife and water fowl refuge of national, State or local significance" in Jackson County, Mississippi. In Pennsylvania Environmental Council, Inc. v. Bartlett, the plaintiffs brought suit to enjoin the planned relocation of a highway and to prevent the use of Federal funds for the project. A portion of the proposed project paralleled 709 and traversed an area of the Susquehanna River watershed used as a recreation area by sports fishermen. The relocated route lay entirely within land owned by the Pennsylvania Department of Forest and Waters and the general state authority of the Commonwealth of Pennsylvania. In response to an inquiry of the Pennsylvania Highway Department, the Deputy Attorney General of Pennsylvania ruled "The fact that said lands remain State forest lands and have not been set aside for park, wildlife interests or recreation and may be sold when they have a more valuable use for another purpose clearly removes such lands from the purview of the aforementioned Federal Statutes. [Section 4(f) and other statutes not pertinent here.]" The Third Circuit ruled that the fact that the appropriate state official had determined the lands in question not to be covered by Section 4(f) was determinative. "Under [Section 4(f) of the Department of Transportation Act] whether public land is also a park, recreation area or wildlife reserve is to be determined by the appropriate federal, state or local officials having jurisdiction thereof." Pennsylvania Environmental Council, Inc. v. Bartlett, 454 F.2d 613, 623 (3rd Cir. 1971). See also Citizens Environmental Council v. Volpe, 484 F.2d 870 (8th Cir. 1973), cert. den. 416 U.S. 936, 94 S. Ct. 1935, 40 L. Ed. 2d 286 (1974); Daly v. Volpe, 350 F. Supp. 252 (D.Wash.1972). In this case the office of the Attorney General of the State of Mississippi has determined that the lands in question are not "publicly owned lands from a public park, recreation area, or wildlife and water fowl refuge" within the meaning of Section 4(f) of the Department of Transportation Act. (See State defendant's Findings of Fact and Conclusions of Law, pp. 11-18.) This determination having been made, the Secretary of Transportation is bound by it and may not seek to apply Section 4(f). See Pennsylvania Environmental Council v. Bartlett, supra. Therefore, Section 4(f) of the Department of Transportation Act provides no jurisdictional basis for this suit. The Court reaches a different result, however, in its consideration of Section 7 of the Endangered Species Act (16 U. S.C. § 1536). This section mandates that all Federal agencies shall use their authority to assure that actions taken by them "do not jeopardize the continued existence of . . . endangered species and threatened species or result in the destruction or modification of habitat of such species which is determined by the Secretary [of Interior] . . . to be critical." (16 U.S.C. § 1536). Another section of the Act, 16 U.S.C. § 1540(g), authorizes any person to commence a civil suit on his own behalf to compel compliance with the provisions of the Act. The section further provides that "[t]he district court shall have jurisdiction, without regard to the amount in controversy or the citizenship of the parties, to enforce any such provision or regulation, as the case may be." Section 1540(g) requires, however, that before any suit is commenced, sixty days written notice of the alleged violation must be given to the Secretary of the Interior. The Federal defendants allege that the plaintiffs have failed to provide the Secretary with the required notice. This Court finds otherwise. On March 21, 1975, the plaintiff, National Wildlife Federation, wrote to the defendant, Tiemann, expressing its opposition to the project and alleging violations of both Section 7 of the Endangered Species Act and Section 4(f) of the Department of Transportation Act. (Exhibit FD-1(39)) Copies of that letter were sent to three different offices within the Department of the Interior. It is true, as the Federal defendants argue, that this letter does not specifically purport to be the notice required by 16 U.S.C. § 1540(g), but this section does not require the notice to be in any particular form. The Court is convinced that the letter of March 21 was sufficient to place the Secretary of Interior 710 on notice of the alleged violations of Section 7. The Federal defendants further contend that Section 7 is not applicable because the Secretary of the Interior has not properly determined the area in question to be "critical habitat" of the Crane, that is, that the "Emergency Determination of Critical Habitat for the Mississippi Sandhill Crane" was not made in compliance with the Secretary's own rules and regulations. Subsequent to the trial of this matter the Secretary did cause this determination to be properly published in the Federal Register, and the emergency determination has not been shown to be in derogation of the Secretary's regulations. In a matter of this nature, where time is of the essence, a decision on the merits should not be delayed because of a possibility that the Secretary has committed a technical violation of his own regulations, which are admittedly still in the formative stage. For the above reasons the Court finds that it does have jurisdiction of this cause under Section 7 of the Endangered Species Act. B. STANDING The Endangered Species Act at 16 U.S.C. § 1540(g) confers automatic standing on any person claiming a violation thereof. The Secretary of the Interior and the alleged violator must be given notice sixty days before suit is filed (16 U.S.C. § 1540(g)(2) (A)), but as was pointed out above, the plaintiff's March 21, 1975 letter to the defendant, Tiemann, with copies to three offices in the Department of the Interior, met this notice requirement. Thus, plaintiffs clearly have standing under the "citizens suit" provision of the Endangered Species Act. In addition, plaintiffs are persons "aggrieved" under Section 10 of the Administrative Procedure Act (5 U.S.C. § 702) because of alleged violations of Section 7 of the Endangered Species Act (16 U.S.C. § 1536). Both plaintiff organizations allege "injury in fact" to their members, and, as visitors and users of the Mississippi Sandhill Crane habitat, are within the "zone of interest" intended to be protected by the statute. Having alleged such injuries, the plaintiff organizations clearly have standing to bring this action. See United States v. SCRAP, 412 U.S. 669, 689-90, 93 S. Ct. 2405, 37 L. Ed. 2d 254 (1973); cf., Sierra Club v. Morton, 405 U.S. 727, 734-35, 92 S. Ct. 1349, 31 L. Ed. 2d 620 (1972). C. LACHES The defendants claim that plaintiffs may not now assert their present claims, but as a matter of equity, are barred by the doctrine of laches. The Fifth Circuit has only recently dealt with the laches issue in Ecology Center of Louisiana, Inc. v. Coleman, 515 F.2d 860 (5th Cir., 1975), in which the Court pointed out that "[t]here are three independent criteria which must be met before the equitable doctrine of laches can be applied, the defendant must show a delay in asserting a right or claim, the delay was not excusable and there was undue prejudice to the party against whom the claim is asserted." (Citation omitted). Ecology Center of Louisiana, Inc. v. Coleman, supra. There has been no showing that the plaintiffs in this case were guilty of any undue delay in asserting their rights or claims herein. Final approval of "plans, specifications and estimates" for the project in question was given on April 30, 1975 by the defendant, Shaw. This was the critical Federal action committing the Federal government to participate in the project. See, e. g. Steubing v. Brinegar, 375 F. Supp. 1158, 1162 (W.D.N.Y.1974). Since the plaintiffs filed this suit only three weeks after the formal Federal commitment to the project, they certainly are not guilty of laches. 711 D. MERITS OF THE CONTROVERSY Having considered the threshold issues of jurisdiction and standing and the affirmative defense of laches raised by the defendants, we now reach the merits of the controversy. At the outset, the Court notes that the plaintiffs bear the burden of establishing the illegality of the defendants' actions. Pennsylvania Environmental Council, Inc. v. Bartlett, 454 F.2d 613, 619 (3rd Cir. 1971); Lewes Dairy, Inc. v. Freeman, 401 F.2d 308, 316 (3rd Cir. 1968), cert. den. 394 U.S. 929, 89 S. Ct. 1187, 22 L. Ed. 2d 455 (1969). In order to prevail in this action, the plaintiffs must show that the I-10 project in question will jeopardize the continued existence of the Mississippi Sandhill Crane or result in the destruction or modification of its habitat. The plaintiffs have failed to meet this burden. The Court is aware that the record in this case includes a number of letters which allege that the I-10 project in question will adversely affect the Crane. Indeed, the environmental impact statement prepared by the defendants, which is an exhibit in this case, admits that I-10 may be a threat to its existence. For the most part, however, these documents merely reflect opinions of the effect of the highway on the Crane without specifying facts upon which they are based. Furthermore, most in all candor admit that the opinions expressed are merely speculation. The evidence which the Court finds persuasive is the testimony given at the trial of this cause by the plaintiffs' own expert witness, Jacob M. Valentine, Jr., biologist with the U. S. Fish and Wildlife Service, who was acknowledged by all parties to be this country's foremost expert on the Mississippi Sandhill Crane. It was Mr. Valentine who in September, 1963, admittedly with only a brief experience in studying the Cranes, reported to the Mississippi Game and Fish Commission that the major problems confronting the Crane at that time were drainage and poor timber management practices,[3] and that the Crane could tolerate the loss of habitat and disturbance from the I-10 highway alignment. His report further pointed out "there are some advantages to the interstate highways in that they effectively block cross traffic through remote areas such as this. The right-of-ways are fenced eliminating general trespass. The highways, especially if provided with rest stops, would provide opportunity for the bird-watching, nature-loving public to view the rare birds and the flora." (Exhibit FD-1(1)). The testimony of Mr. Valentine at the hearing of this matter was extensive, consuming some eighty-seven pages of the transcript. Throughout his testimony, Valentine repeatedly stated that the main threats to the continued existence of the Mississippi Sandhill Crane are poor timber management, housing and industrial development of the area comprising its habitat, and I-10, in that order. (Transcript, pages 44-45, 82). Mr. Valentine's testimony clearly indicates that the Mississippi Sandhill Crane can tolerate the direct effects of I-10. He admits that the project will take only approximately 300 acres of the 10,000 acres comprising the habitat of the Crane (Transcript, p. 56), and that the remaining acreage of habitat will be adequate to allow space for its normal growth, movement and territorial behavior, to meet its nutritional requirements, and to preserve adequate breeding sites, cover and shelter for the present bird population. When asked about the sensitivity of the Sandhill Crane to disturbance, Mr. Valentine admitted that he had conducted no experiments to make this determination. He was of the opinion, however, *712 that the bird preferred isolation and that the noise and continuous traffic on the highway would cause them to flush from their nests, possibly endangering eggs in the nest. He admitted, however, that a primary method which he uses in estimating the population of the birds is flying over nests in helicoptors and airplanes, causing the birds to flush from their nests. His testimony showed no concern that this flushing endangers eggs in the nest. (Transcript, pp. 77-79). Considered as a whole, the essence of Mr. Valentine's testimony is that the only real danger presented to the Sandhill Crane by I-10 is private development which may accompany or occur in the area of the highway. But the record in this case is totally devoid of any statement or opinion rising above mere speculation to indicate that such development will occur or is even likely to occur. This is particularly true with respect to the interchange at the intersection of I-10 and Earl Bond Road, about which the plaintiffs specifically complain. The land surrounding the proposed project is depicted to this Court as low lying, marshy land totally unsuited for commercial development. In addition, the record contains several references to a program under which the Nature Conservancy is engaged in purchasing and holding land within the Crane's habitat, hopefully for the future establishment of a Mississippi Sandhill Crane refuge. This program is providing and will continue to provide a further buffer for the crane against private development. In its notice of intention to determine "critical habitat" for 108 endangered species, including the Mississippi Sandhill Crane, published in the Federal Register on May 16, 1975, the U. S. Fish and Wildlife Service noted, "There may be many kinds of actions which can be carried out within the `critical habitat' of a species that would not . . . adversely affect that species" and are therefore not inconsistent with Section 7. (40 Fed.Reg. 21499). The evidence clearly shows that the construction of I-10 through Jackson County, Mississippi falls within this description. It is obvious from the record in this case that the defendants have not been callous in their planning of this project and the consideration of its impact on the Crane. The environmental impact statement prepared by the defendants devotes several pages to the Crane, the effect of the highway upon it, and steps which will be taken to lessen the impact, if any, of the highway. The route of the highway has clearly been chosen to pass through the smallest part of the Crane's habitat and nesting area. The record contains a number of references to steps which the defendants are requiring contractors on the project to take in order to lessen the impact of construction on the Cranes. It appears to the Court that the defendants have adequately considered the effects of this project on the Crane in all phases of its planning. CONCLUSION The Court finds that it has jurisdiction of this controversy under Section 7 of the Endangered Species Act, though not under Section 4(f) of the Department of Transportation Act. The plaintiffs have standing to bring suit under Section 7, and they have not been guilty of any laches in bringing their claim before this Court. However, the plaintiffs have failed to prove that they are entitled to any relief under the aforementioned statute. In short, based upon all of the evidence of record, there is room in the area in question for the lanes and the Cranes. A final judgment conforming with the above Findings of Fact and Conclusions of Law, approved as to form by attorneys for both sides, shall be presented to this Court within the time and manner prescribed by the rules hereof. NOTES [1] "It is hereby declared to be the national policy that special effort should be made to preserve the natural beauty of the countryside and public parks and recreation lands, wildlife and water fowl refuges, and historic sites. The Secretary of Transportation shall cooperate and consult with the Secretaries of the Interior, Housing and Urban Development, and Agriculture, and with the States in developing transportation plans and programs that include measures to maintain or enhance the natural beauty of the land traversed. After August 23, 1968, the Secretary shall not approve any program or project which requires the use of any publicly owned land from a public park, recreation area, or wildlife and water fowl refuge of national, State of local significance as determined by the Federal, State or local officials having jurisdiction thereof, or any land from an historic site of national, State or local significance as so determined by such officials unless (1) there is no feasible and prudent alternative to the use of such land, and (2) such program includes all possible planning to minimize harm to such park, recreational area, wildlife and water fowl refuge, or historic site resulting from such use." 49 U.S.C. § 1653(f). [2] ". . . all other Federal departments and agencies shall, in consultation with and with the assistance of the Secretary [of Interior], utilize their authorities in furtherance of the purposes of this chapter by carrying out programs for the conservation of endangered species and threatened species listed pursuant to section 1533 of this title and by taking such action necessary to insure that actions authorized, funded, or carried out by them do not jeopardize the continued existence of such endangered species and threatened species or result in the destruction or modification of habitats of such species which is determined by the Secretary, after consultation as appropriate with the affected States, to be critical." 16 U.S.C. § 1536. [3] St. Regis Paper Co. has promised future cooperation with the Fish and Wildlife Service by instituting timber management practices in the area to improve the Cranes' habitat.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1750747/	650 So. 2d 192 (1995) STATE of Florida, Appellant, v. Terri Ann CONTE, Appellee. No. 94-1303. District Court of Appeal of Florida, Fifth District. February 10, 1995. Robert A. Butterworth, Atty. Gen., Tallahassee, and Ann M. Childs, Asst. Atty. Gen., Daytona Beach, for appellant. James B. Gibson, Public Defender, and S.C. Van Voorhees, Asst. Public Defender, Daytona Beach, for appellee. DAUKSCH, Judge. This is an appeal from a downward departure sentence. Appellee was convicted of robbery with a firearm. This is a first degree felony punishable by life imprisonment. Based upon the sentencing guidelines scoresheet, appellee faced a recommended range of 3 1/2 to 4 1/2 years imprisonment and the judge was permitted to sentence within a range of 2 1/2 to 5 1/2 years imprisonment. The judge sentenced appellee to ten years imprisonment, an unauthorized upward departure, from which appellee waived the right to appeal, and "suspended" that sentence on the condition that she spend two years in community control, followed by five years probation. The latter sentence is a downward departure. The state appeals the downward departure because the reasons given are not legally adequate. While we agree we are not convinced *193 that the reasons given are substantial enough to warrant the departure, see Corum v. State, 484 So. 2d 102 (Fla. 1st DCA 1986), we are more impressed with the fact that this innovative sentence is violative of Poore v. State, 531 So. 2d 161 (Fla. 1988). Poore held ... a judge has five basic sentencing alternatives in Florida: (1) a period of confinement; (2) a "true split sentence" consisting of a total period of confinement with a portion of the confinement period suspended and the defendant placed on probation for that suspended portion; (3) a "probationary split sentence" consisting of a period of confinement, none of which is suspended, followed by a period of probation; (4) a Villery sentence, consisting of period of probation preceded by a period of confinement imposed as a special condition; and (5) straight probation. Id. at 164. The sentence here, as was the sentence in State v. Manning, 605 So. 2d 508 (Fla. 5th DCA 1992), must be vacated because it is not an alternative permitted by Poore. SENTENCE VACATED; REMANDED FOR RESENTENCING. COBB and THOMPSON, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265655/	163 Cal. App. 4th 1359 (2008) TRACFONE WIRELESS, INC., Plaintiff and Appellant, v. COUNTY OF LOS ANGELES, Defendant and Respondent. No. B199521. Court of Appeals of California, Second District, Division Four. June 16, 2008. 1361 Silverstein & Pomerantz, Robert R. Gunning, Edwin P. Antolin and Amy L. Silverstein for Plaintiff and Appellant. Raymond G. Fortner, Jr., County Counsel, and Albert Ramseyer, Principal Deputy County Counsel, for Defendant and Respondent. OPINION MANELLA, J. INTRODUCTION Appellant TracFone Wireless, Inc. (TracFone), paid the County of Los Angeles (County) use taxes from its own funds, and later sought a refund when it determined that the long distance service it provided was tax exempt. Respondent County refused the request for a refund, and this action ensued. The trial court held that appellant lacked standing, because it was the service provider responsible for collecting the tax from the consumer, and thus not 1362 the intended "taxpayer" under the Los Angeles County Code section imposing the tax. The trial court also held that the first amended complaint (FAC) failed to state a cause of action for a tax refund, because appellant had paid the tax voluntarily. We hold that appellant's payment of the tax conferred standing, and that the FAC adequately alleged an involuntary payment. Accordingly, we reverse the judgment. BACKGROUND The FAC alleged that TracFone was a Florida corporation in the business of selling prepaid telephone calling cards throughout the United States, including California, for use in cellular telephones also sold by TracFone. The cards provided access to a national telephone network, allowing callers to telephone almost anywhere in the United States. The FAC alleged that most sales were made to retailers who resold the cards to the ultimate consumers. Between January 2005 and January 2006, TracFone paid a user tax to the County of Los Angeles, amounting to 5 percent of the value of calls made with the cards in the county, viz., $120,151.11. The FAC alleged that TracFone did not collect the tax from consumers because it was unable to do so, having no point of sale contact with the vast majority of ultimate consumers. The FAC further alleged TracFone's belief that respondent would hold appellant liable for the tax, and that appellant paid the tax to avoid an assessment with interest and penalties. The FAC alleged that under Los Angeles County Code section 4.62.060(D), telephone communication services that were not subject to the tax imposed under section 4251 of the Internal Revenue Code were also exempt from the county tax. Beginning in 2005, several federal courts held that section 4251 did not apply to certain national calling plans.[1] The FAC alleged that in May 2006, consonant with these holdings, the Internal Revenue Service issued notice 2006-50, stating that the federal excise tax did not apply to cards of the type sold by TracFone. Accordingly, appellant claimed a refund of the taxes paid, and filed this action when respondent denied its claim. The factual allegations of the FAC were incorporated into three counts, each demanding a refund of the tax under a different legal theory. The first demanded a refund on the ground that TracFone was exempt from the tax 1363 under the Los Angeles County Code; the second charged that respondent's refusal to refund the tax violated appellant's constitutional right to due process; and the third alleged that respondent's refusal to refund the tax constituted an unconstitutional taking of private property without adequate compensation. Respondent interposed a general demurrer to each cause of action and special demurrers for uncertainty, claiming that the facts necessary to state a cause of action were not alleged with sufficient particularity. The trial court sustained the general demurrers for the reasons stated in them: (1) because appellant lacked standing to seek a refund, having paid the tax as a tax collector, not a taxpayer, and (2) because appellant had paid the tax voluntarily. The court denied leave to amend and dismissed the action March 26, 2007. Appellant timely filed a notice of appeal from the judgment of dismissal. DISCUSSION 1. Standard and Scope of Review On appeal from a judgment of dismissal entered after a general demurrer is sustained, our review is de novo. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal. 4th 412, 415 [106 Cal. Rptr. 2d 271, 21 P.3d 1189].) "In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties." (Code Civ. Proc., § 452.) "`We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law....'... [W]e give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]" (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318 [216 Cal. Rptr. 718, 703 P.2d 58].) We may also consider matters that have been properly judicially noticed. (Ibid.) Appellant contends the court erred in holding that appellant was a volunteer who had no standing to seek a refund of monies erroneously paid as taxes. As lack of standing and failure to adequately allege an involuntary payment were the sole grounds stated in the general demurrers and relied upon by the trial court, we may affirm the judgment of dismissal only if such grounds were proper. (See Carman v. Alvord (1982) 31 Cal. 3d 318, 324 [182 Cal. Rptr. 506, 644 P.2d 192].)[2] 1364 2. Standing (1) In general, one who is beneficially interested in the outcome of a controversy has standing to sue. (CashCall, Inc. v. Superior Court (2008) 159 Cal. App. 4th 273, 286 [71 Cal. Rptr. 3d 441].) Beneficial interest means a personal interest in the outcome. (Municipal Court v. Superior Court (1988) 202 Cal. App. 3d 957, 962-963 [249 Cal. Rptr. 182].) In the tax context, this means that the person is barred from seeking a refund of a tax he or she has not paid. (Delta Air Lines, Inc. v. State Bd. of Equalization (1989) 214 Cal. App. 3d 518, 525 [262 Cal. Rptr. 803] (Delta).) The court below found that TracFone, though "required to collect taxes," was not a "taxpayer" and thus lacked standing to sue for a refund. The court found that the essential facts alleged in the FAC brought this action squarely within the holding of Scol Corp. v. City of Los Angeles (1970) 12 Cal. App. 3d 805 [91 Cal. Rptr. 67] (Scol). Scol Corporation, a retailer of alcoholic beverages, sued the City of Los Angeles for a refund of the so-called "tipplers' tax" the city imposed on the purchase of alcohol, to be collected from consumers by the seller. (Id. at p. 808.) Scol had paid a portion of the tax from its own funds without having collected it from its customers, and the remainder from taxes collected from customers. (Id. at pp. 808-809.) Scol sued for a refund, claiming the tax was unconstitutional or otherwise illegal, and sought, on behalf of itself, others similarly situated and its customers, to have the tax ordinance declared unconstitutional. (Ibid.) The appellate court held that Scol had no interest in the lawsuit or in the monies collected, because "[i]ts role was not that of a taxpayer, but that of a tax collector of this special use tax." (Id. at p. 808.) Accordingly, the court held, "Scol had no standing to sue either for itself, all others similarly situated, or on behalf of its customers." (Ibid.) (2) Appellant contends that Scol is distinguishable, or, in the alternative, that it was wrongly decided. To the extent Scol stands for the proposition that a party lacks standing to challenge a tax unless it is the denominated "taxpayer" under the statutory or regulatory scheme imposing the tax, it is outdated. Since Scol was published, "[t]here have been some refinements of the rule barring suits for refund to persons not technically regarded as `taxpayers,' however, resulting from unusual circumstances which have been subject to judicial review." (Delta, supra, 214 Cal.App.3d at p. 526; see also 1365 Andal v. City of Stockton (2006) 137 Cal. App. 4th 86, 92-94 [40 Cal. Rptr. 3d 34] (Andal).) The person who paid the tax must be afforded some remedy to prevent the unjust enrichment of the taxing authority. (Delta, at p. 525.) Thus, in Andal, the court rejected a city's claim that the phone company plaintiffs lacked standing to challenge a local fee assessed on 911 calls because they were merely collectors and not the party taxed. (Andal, supra, 137 Cal.App.4th at pp. 94-95.)[3] In Delta, the court held that an airline had standing to sue for a refund of sales taxes it allegedly overpaid on fuel it purchased from vendors. (Delta, supra, 214 Cal.App.3d at p. 527.) The court expressly rejected the Board of Equalization's claim that the airline lacked standing because it was not the designated "taxpayer" under the law. (Id. at pp. 525-526.) Acknowledging the general rule that "persons who have not paid the tax in question are barred from bringing suits for refund of that tax," the court nevertheless concluded that "it would be irrational to hold that Delta has no standing to contest a determination of substantial funds due for which Delta was legally responsible. To hold otherwise might permit unjust enrichment of the Board." (Id. at pp. 526, 528.) Respondent contends that appellant would not be without a remedy, because the court in Scol left open the question whether Scol possessed a right of reimbursement against its customers. (See Scol, supra, 12 Cal.App.3d at p. 811, fn. 4.) We disagree. The facts adequately alleged that appellant would be left without a remedy if denied standing on the ground that it was not the "taxpayer." The FAC alleged that appellant had no recourse, other than to risk the imposition of penalties and the tax, because it could never recover from its customers, with whom it had no contact. The facts are thus distinguishable from those in Scol, Scol paid taxes owed by others, electing not to collect them from those who owed the taxes, although it had the ability to do so. (See id. at p. 809.) Scol had direct contact with its customers, whereas here, the FAC alleged that appellant had no ability to collect the tax from its customers, as it had no point of sale contact with them, and they were located in many states. The Scol court did not address issues of fairness or due process, although concerns of fairness require the courts to ensure the taxing authority is not unjustly enriched at the expense of persons left without a remedy. (Delta, supra, 214 Cal.App.3d at p. 527.) Further, as appellant notes, because California requires payment of a tax prior to challenging it, the right to due process requires some procedure affording a meaningful opportunity for 1366 review. (Batt v. City and County of San Francisco (2007) 155 Cal. App. 4th 65, 72 [65 Cal. Rptr. 3d 716], citing McKesson Corp. v. Florida Alcohol & Tobacco Div. (1990) 496 U.S. 18, 31, 36-37, 39 [110 L. Ed. 2d 17, 110 S. Ct. 2238].) We conclude that on the allegations set forth in the FAC, appellant had standing to seek a refund of taxes paid from its own funds. 3. Voluntary or Involuntary (3) The trial court again relied on Scol in finding appellant's payment voluntary, and therefore not refundable. (See Scol, supra, 12 Cal.App.3d at p. 808.) The Scol court had relied upon Southern Service Co., Ltd., v. Los Angeles (1940) 15 Cal. 2d 1 [97 P.2d 963] (Southern Service), for the proposition that voluntary payments are not refundable. (Scol, at p. 810.) In Southern Service, the California Supreme Court explained: "It is the settled law of this state that illegal taxes voluntarily paid may not be recovered by the taxpayer in the absence of a statute permitting a refund thereof; and in the absence of such statute only illegal taxes paid under duress, coercion or compulsion are considered to have been involuntarily paid and therefore recoverable." (Southern Service, at p. 7; see Scol, supra, 12 Cal.App.3d at p. 810.)[4] As noted in Justice Allport's dissent in Scol, Southern Service relied upon Brumagin v. Tillinghast (1861) 18 Cal. 265, which stated the common law rule at the time of its pronouncement more than a century before, but the rule has been greatly relaxed since then. (Scol, at p. 813, dis. opn. of Allport, J., citing Flynn v. San Francisco (1941) 18 Cal. 2d 210, 216-217 [115 P.2d 3] (Flynn) and Vitale v. City of Los Angeles (1936) 13 Cal. App. 2d 704, 706 [57 P.2d 993] (Vitale).) In Flynn, the California Supreme Court, citing Vitale, rejected the strict common law rule under which a payment would have been considered voluntary if "made without the filing of formal protests [or] threats of seizures, confiscations or sequestrations. [Citations.]" (Flynn, at pp. 216-217.) "`"Among the instances of the relaxation of the strictness of the original common law rule is the case of payments constrained by business exigencies, that is[,] payments of illegal charges or exactions under apprehension on the part of the payers of being stopped in their business if the money is not paid. It has been stated that the general rule with regard to duress of this character is that where, by reason of the peculiar facts[,] a reasonably prudent man finds that in order to preserve his property or protect his business interests it is necessary to make a payment of money which he does not owe and which in equity and good conscience the receiver should not retain, he may recover it." [Citation.] ... "The underlying principle (that money paid under compulsion may be recovered) is said to be that, by the performance of or threat to perform some unlawful act whereby plaintiff will suffer loss, the defendant has induced the plaintiff, under 1367 circumstances sufficient to control the action of a reasonable man, to pay money which he would not otherwise have paid."'" (Id. at p. 217.) Respondent contends that Flynn and Vitale are inapplicable, because the claimants in those cases were "taxpayers." To demonstrate its point, respondent quotes the majority opinion in Scol: "Scol's assertion fails, and the cases cited by our colleague are inapplicable precisely because Scol did not pay taxes in making this payment." (Scol, supra, 12 Cal.App.3d at p. 810, italics omitted.) Appellant may not have been a "taxpayer," but the FAC alleges that TracFone did, in fact, pay the tax. The same court that decided Scol later made clear that it is not the appellation "taxpayer" that controls, but the act of having paid the tax. (See Chrysler Credit Corp. v. Ostly (1974) 42 Cal. App. 3d 663, 676 [117 Cal. Rptr. 167] (Chrysler) ["The fact that plaintiff was not the taxpayer against whom the taxes were assessed does not preclude him from recovering."].) Further, the same court that decided Scol followed Flynn in its later decision, taking from its language two factors to determine whether a payment was involuntary: "[F]irst, the payment must have been made `under circumstances sufficient to control the action of a reasonable man,' and second, the plaintiff must, in fact, have considered that to protect its business interests it was `necessary to make a payment.'" (Chrysler, supra, 42 Cal.App.3d at p. 678, quoting Flynn, supra, 18 Cal.2d at p. 217.) The court distinguished Scol as a case in which the taxing authority had not required Scol to pay the tax from its own funds and had not asserted that Scol was liable for the tax itself. (Chrysler, supra, at p. 677, citing Scol, supra, 12 Cal.App.3d at p. 810.) The facts of this case are also distinguishable from those in Scol. Appellant did not allege, as did Scol, that it made a business decision to absorb a tax it could have collected. (See Scol, supra, 12 Cal.App.3d at p. 812 (dis. opn. of Allport, J.).) Rather, the FAC alleged that due to TracFone's lack of point of sale contact with the vast majority of ultimate consumers, "it was unable to collect the Tax from the ultimate consumers." Nevertheless, the FAC alleged, TracFone believed the County would hold it responsible for paying the tax, and that it was required to pay the tax "or face severe consequences" specifically, an assessment by the County of the "principal tax, interest, and penalty." These allegations address the elements enunciated in Chrysler, supra, 42 Cal.App.3d at page 678. "Both such elements are matters of fact which 1368 depend upon the evidence in each particular case and which facts are for the trial court to determine. [Citation.]" (Ibid.)[5] (4) Whether the circumstances are such that a reasonable person would have paid the tax is a question of fact. (Newport Bldg. Corp. v. City of Santa Ana (1962) 210 Cal. App. 2d 771, 778-779 [26 Cal. Rptr. 797], disapproved on other grounds in The Pines v. City of Santa Monica (1981) 29 Cal. 3d 656, 660 [175 Cal. Rptr. 336, 630 P.2d 521].) Questions of fact may be resolved on demurrer only when there is only one legitimate inference to be drawn from the allegations of the complaint. (Saliter v. Pierce Brothers Mortuaries (1978) 81 Cal. App. 3d 292, 299-300 [146 Cal. Rptr. 271] [delayed discovery].) The allegations of the FAC fairly suggest that the County's position constrained TracFone to pay the tax. We must "treat as true all of the complaint's material factual allegations, including facts that may be implied or inferred from those expressly alleged. [Citation.]" (Amarel v. Connell (1988) 202 Cal. App. 3d 137, 141 [248 Cal. Rptr. 276].) We conclude that the FAC sufficiently alleged the Chrysler factors to overcome a general demurrer. 4. Constitutional Claims Because we have found the first count of the FAC sufficient to allege a cause of action for a tax refund, we do not reach the second and third counts alleging violations of constitutional rights. Each count simply incorporated the identical facts from a general statement of facts, adding a legal conclusion to each claim regarding the effect of the incorporated facts. Thus, the FAC pleaded, in reality, a single cause of action for a tax refund. (See Lambert v. Southern Counties Gas Co. (1959) 52 Cal. 2d 347, 353 [340 P.2d 608].) If one count of such a complaint is good as against a general demurrer, all counts will stand. (Ibid.) Further, in reviewing an order sustaining a general demurrer, we disregard legal conclusions except where necessary to understand the ultimate facts. (See Nguyen v. Scott (1988) 206 Cal. App. 3d 725, 733, 253 Cal. Rptr. 800; see generally 4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, §§ 339, 345, 353, pp. 436-439, 444-447, 453-454.) (5) Accordingly, because appellant had standing to bring this action, and each count sufficiently stated a cause of action (albeit the same cause of action), the general demurrers should have been overruled. *1369 DISPOSITION The judgment is reversed and remanded with directions to the trial court to vacate its order sustaining the general demurrers of respondent County and to enter a new order overruling the demurrers. Appellant shall have costs on appeal. Epstein, P. J., and Willhite, J., concurred. NOTES [1] Those courts held that long distance telephone service that was billed by call duration only, not by distance, was not subject to federal excise taxes. (See Reese Bros., Inc. v. U.S. (3d Cir. 2006) 447 F.3d 229; Fortis, Inc. v. U.S. (2d Cir. 2006) 447 F.3d 190; National Railroad Passenger Corp. v. U.S. (D.C. Cir. 2005) 369 U.S.App.D.C. 1 [431 F.3d 374]; OfficeMax, Inc. v. U.S. (6th Cir. 2005) 428 F.3d 583; American Bankers Ins. Group v. U.S. (11th Cir. 2005) 408 F.3d 1328.) [2] We asked the parties whether Los Angeles County Code section 4.62.190 has any application here. That section provides that a service supplier may seek a refund of taxes "erroneously or illegally collected or received...." Respondent contends the section provided appellant a remedy that it was required to exhaust before resorting to the court. Ordinarily, a tax refund claimant need not exhaust administrative remedies where there are no evaluation issues and the property was tax exempt. (Stenocord Corp. v. City etc. of San Francisco (1970) 2 Cal. 3d 984, 987 [88 Cal. Rptr. 166, 471 P.2d 966].) Even when exhaustion of administrative remedies is required, there may be factual issues that may not be resolved on demurrer. (Economic Empowerment Foundation v. Quackenbush (1997) 57 Cal. App. 4th 677, 692 [67 Cal. Rptr. 2d 323].) As the issue was not a ground of respondent's demurrer and the record is undeveloped, we do not reach it. [3] Andal relied upon Gowens v. City of Bakersfield (1960) 179 Cal. App. 2d 282 [3 Cal. Rptr. 746], in which the court held that a hotel owner who was required to collect, record, report and pay a tax had a sufficient interest to confer standing to maintain an action challenging the tax. (See Andal, supra, 137 Cal.App.4th at p. 94.) The Scol court did not discuss Gowens. [4] The parties have identified no statute providing for the collection or refund of use taxes on services such as the long distance calling provided by TracFone. [5] In Chrysler, a secured creditor paid the debtor's property tax after the taxing authority made threats to seize and sell the property. (Chrysler, supra, 42 Cal.App.3d at pp. 677-678.) The court did not hold, however, that only such extreme measures would amount to an implied demand.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/525309/	878 F.2d 147 S.A. ANDES, Plaintiff-Appellant,v.VERSANT CORPORATION; First Washington InvestmentsCorporation; Thomas F. Herr, Defendants-Appellees. No. 86-1186. United States Court of Appeals,Fourth Circuit. Argued Dec. 5, 1988.Decided June 27, 1989.Rehearing and Rehearing En Banc Denied July 31, 1989. John Vanderstar (Sonya D. Winner, Covington & Burling, Washington, D.C., on brief), for plaintiff-appellant. Ralph Werner (Stacy L. Bauer, Michaels & Wishner, P.C., Washington, D.C., on brief), for defendants-appellees. Before SPROUSE and CHAPMAN, Circuit Judges, and HAYNSWORTH, Senior Circuit Judge. HAYNSWORTH, Senior Circuit Judge: 1 This old case is one of many lives. It founders upon procedural objections raised by the defendants, and no court in the United States has yet addressed anything approaching the merits of the controversy. The last time the case was dismissed by the United States District Court for the District of Maryland it was upon the ground that assertion of secondary liability against a sole stockholder and a related corporation was precluded by an English procedural rule that those alleged to be secondarily liable may not be made parties to an English action to enforce a judgment unless they were parties to the original suit. 2 The controversy grew out of a loan made by Banque Andes, S.A., a Belgian bank and the plaintiff's predecessor, to a Panamanian corporation. Repayment of the loan was guaranteed by Versant Corporation, a Delaware corporation with its principal place of business in Maryland. 3 After default, the plaintiff filed an action in the United States District Court for the District of Maryland against the maker of the note. The plaintiff joined as defendants Versant, the note's guarantor, Thomas F. Herr, a Maryland architect and real estate developer alleged to be Versant's sole stockholder, and First Washington Investments Corporation, alleged to be a successor in interest to Versant. 4 The note contained a provision that English law was to govern and that any dispute should be settled in the courts in England. 5 On the basis of the forum selection clause, the district court entered summary judgment for the defendants. It rejected a claim that the forum selection clause applied only to the lender and the maker of the note and not to Versant, First Washington or Herr. It stipulated that any such defendant that refused to submit to the jurisdiction of an appropriate English court would be estopped from later reliance upon the forum selection clause as a bar to any subsequent action in the United States District Court for the District of Maryland. 6 Andes then repaired to the English High Court of Justice, where it obtained a judgment against Versant for $574,188.49. There was no judgment against Herr or First Washington, for neither had been made a party to the English action, although Herr had been an active participant. 7 Andes then returned to this country where it filed an action in the United States District Court for the District of Maryland to enforce and collect the English judgment. The action was brought under the Maryland Uniform Foreign Money-Judgments Recognition Act. Md. Cts. & Jud. Proc.Code Ann. Secs. 10-701 to 10-709 (Michie 1984). Joined as defendants were Herr and First Washington, as well as Versant. The action was uncontested by Versant, against which a default judgment was entered, but Herr and First Washington vigorously defended upon the ground that the fact that they were not made formal parties defendant in the English action precluded any assertion against them of secondary liability. 8 While the litigation in Maryland was in its pretrial stages, the plaintiff received information that no one from whom it sought collection of its English judgment had any unencumbered assets from which collection of the judgment might be effected. Rather than wasting time and effort to obtain an American judgment against Herr and his wholly owned corporations, Versant and First Washington Investment, each of whom appeared to be judgment proof, the plaintiff moved for a voluntary dismissal without prejudice to renewal of the action if the appearance of assets warranted further collection efforts. The district court denied that motion, but granted the motion of the defendants for dismissal with prejudice. 9 On appeal by the plaintiff to this court, we affirmed the denial of the plaintiff's motion for a voluntary dismissal without prejudice upon the ground that denial of that motion was within the limits of the district court's discretion. We reversed the dismissal with prejudice upon the ground that the plaintiff had been given no opportunity to be heard in opposition to the motion. Andes v. Versant Corp., 788 F.2d 1033 (4th Cir.1986). 10 When the parties were thus returned to the district court, the defendants stood upon their position that, except for the entry of a judgment against Versant, further proceedings against the other defendants were barred by the English judgment. Their positions were supported by statements from an English barrister and an English solicitor. They were of the opinion that the question whether Versant's corporate veil might be lifted to reach the assets of the sole stockholder, Herr, was controlled by the law of Delaware, the state of incorporation, though they were of the opinion that the questions of secondary liability of Herr and First Washington Investments were foreclosed because neither had been joined as a defendant in the English action in which the judgment against Versant had been rendered. 11 Accepting those statements as declarative of English law, the district court was of the opinion that English procedural rules foreclosed further proceedings in the United States. The district court rendered a judgment against Versant based upon the English judgment but gave no consideration to the possibility of collection of that judgment from assets of Herr or First Washington Investment. To have done so seemed to the district court to be giving greater effect to the English judgment than would be given it in England. 12 It is undisputed that the plaintiff's secondary liability claims against Herr, or the alleged corporate successor, are governed by the law of Delaware, or some other American state. The statement of English law concedes that an English court would look to such law for substantive answers; they simply were of the view that an English court would never reach the question because of the English procedural rule of preclusion. That was the view taken by the district judge; he could not reach or consider the substantive questions of American law because of the English rule of preclusion. In that we think there was error. 13 The Full Faith and Credit Clause of Article IV Sec. 1 of the Constitution of the United States does not apply to foreign judgments. Maryland, however, has adopted the Uniform Foreign Money-Judgments Act, Sec. 10-701, et seq. Under that statute, with many exceptions and conditions, a foreign judgment for the payment of money "is enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit." Sec. 10-703. The antecedent of this is certainly the Full Faith and Credit Clause, but the primary purpose of the Maryland legislature in enacting the statute was to make uniform its law on the effect to be given a foreign money judgment. See id. Sec. 10-708. In the Commissioner's Prefatory Note to the Uniform Act it is stated that the Act makes clear that a court is privileged to give the judgment of a foreign country greater effect than it is required to do by the Act. 13 Uniform Laws Ann. 269. The Act requires the Maryland courts to give a foreign money judgment no lesser effect than it would have in the rendering nation; it does not restrict a Maryland court from giving greater effect to a foreign nation judgment, and it would be expected to do so when giving it greater effect would be consistent with generally accepted notions of American substantive law. See also Wolff v. Wolff, 40 Md.App. 168, 389 A.2d 413 (Md.Ct.Spec.App.1978), aff'd 285 Md. 185, 401 A.2d 479 (1979). 14 Here, no one seeks to relitigate the bank's claim against Versant or to inquire into anything actually adjudged by the English court. The substantive inquiry is to the potential secondary liability of parties who might have been joined as defendants in the English action and whose joining might have been of some service to convenience had it then been known that Versant would not satisfy the judgment against it. What is involved is the effect in a court of the United States of an English rule of preclusion that has no known counterpart in American law. 15 When dealing with the preclusive effect of a foreign nation money judgment, some courts have seemed to employ a strict full faith and credit approach, while others have employed the res judicata rules of the forum state. Still others have sought to develop special rules that would best serve the interests of the parties, and those of the courts of the foreign nation and of the relevant American jurisdiction. 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 4473 at 745-47 (1981). 16 The problem can arise in such a variety of circumstances that, upon a given occasion, any of the three approaches may be the best. But that suggests that in every case, the choice should be made after consideration of the precise issue involved and the effect of alternative resolutions upon the courts of the foreign nation and those of the enforcing jurisdiction. That approach would also give substantial weight to the interest of the parties in the efficient conduct of litigation without unnecessary waste or delay. 17 In this case, the English rule of preclusion that a claim of secondary liability may not be prosecuted against one who has not been made a party to the litigation against the primary obligor serves no obvious purpose, whether viewed through English or American eyes. Strictly enforced, it can cut off litigation by the unwary, but once the rule is clearly established, the prudent claimant will join in the original action all parties with known potential secondary liabilities. The result may be the premature litigation of questions of secondary liability when the outcome has little practical meaning to the parties. That would place an unnecessary burden upon the English courts. If, on the other hand, the creditor is permitted to obtain its judgment against the primary obligor without regard to potential questions of secondary liabilities, the entire dispute may be avoided by payment or by the appearance of worthlessness of the claims of secondary liabilities. In either of those events, the interests of all courts and all parties is served. On the other hand, if the question of secondary liability is litigated only after the appearance of its practical importance, that claim may be considered without the diversion of the primary claim over which the parties became disputants in the first place. 18 In this case in the diversity jurisdiction, we must look for governance to the law of Maryland. Unfortunately, the appellate courts of that state have not considered the effect in that state of this English rule of preclusion. The question seems unworthy of certification, however, for it seems plain that, in the circumstances of this case, the English rule of preclusion would be given no effect in Maryland. 19 The English rule of preclusion has no bearing upon the liability of Versant. That was adjudicated in England, and that judgment has now been accepted. What remains in dispute are problems connected solely with attempts to collect that judgment. Frustrated in its effort to collect the judgment from the judgment debtor Versant, the bank seeks to collect its judgment from other entities under theories of American law that would be controlling, even in England, if an English court ever got to the substantive questions. 20 Since the bank joined Herr and First Washington as defendants in its original action against Versant, it may have then suspected that Herr was using Versant as a financially empty front for his own business, but such things may be entirely unknown or unsuspected until after attempts to collect from the judgment debtor have proven unavailing. Indeed, if assets are being shuffled from one entity to another for the purpose of hindrance of creditors, the fact is unlikely to be known until a judgment creditor finds it impossible to collect its judgment from its primary debtor. Fraudulent conveyances do not advertise their true character, and the need to look to related entities for the collection of one's debt is unlikely to be known or fully appreciated until after a judgment has been obtained against the primary obligor and attempts to collect the judgment have proven futile. 21 Maryland would recognize that it is an impractical burden to cast upon creditors an obligation of full exploration of all problems of collectibility before obtaining a judgment against a primary obligor. It is time enough to send parties off to explore problems of collectibility from related entities after a judgment against the primary obligor has been obtained and proven to be uncollectible by direct proceedings against that obligor. Indeed, this English rule of preclusion is so much at odds with normal American notions of litigation that no American jurisdiction would readily embrace it. 22 We conclude that Maryland would not permit the English rule of preclusion to forestall the normal processing of collectibility attempts in accordance with generally accepted notions of American law or, more particularly, the law of the forum American state. 23 We see no other constitutional hindrance to pursuit of the plaintiff's claims. Herr was not a formal party to the English action, but he was the president of Versant and very active in the conduct of the English litigation. He was fully informed of everything that occurred in the English court. 24 Now, perhaps we may also have come full circle. The bank wishes this action held in abeyance because it has found no unencumbered assets of Herr or First Washington Investments out of which it might collect its judgment. It now prefers to wait until there appears to be something to be gained, in a legal sense, from further litigation. The defendants, on the other hand, insist they are entitled to final judgment now, foreclosing all future attempts to collect the English judgment out of assets of Herr or First Washington Investments. Upon reconsideration, the district court may conclude that the interests of justice may be served by holding the entire proceeding in abeyance. If the district court concludes that the case should go forward, however, further proceedings should be on the merits without any interference from the English rule of preclusion. 25 REVERSED AND REMANDED.	01-03-2023	08-23-2011
https://www.courtlistener.com/api/rest/v3/opinions/2265848/	341 Pa. Superior Ct. 427 (1985) 491 A.2d 892 Jeffrey MELMED, Appellant, v. Faye L. Reiner MOTTS and Alice Drake, Appellees. Supreme Court of Pennsylvania. Argued October 17, 1984. Filed April 12, 1985. 429 Daniel P. Lyons, Stroudsburg, for appellant. Robert E. Bogen, Saint Marys, for Motts, appellee. Mark S. Love, Stroudsburg, for Drake, appellee. Before WIEAND, DEL SOLE and POPOVICH, JJ. WIEAND, Judge: Jeffrey Melmed was injured when the motorcycle on which he was riding collided with a vehicle owned and operated by Faye L. Reiner Motts. Alice Drake was a passenger in the Motts vehicle. She was an elderly lady who had been taken to dinner by Ms. Motts, her private duty nurse. Melmed filed a complaint naming both Motts and Drake as defendants. The complaint contained an averment that at the time of the accident Motts had been the employee of Drake and had been acting within the scope of her employment. After the pleadings were closed, Drake filed a motion for summary judgment. The trial court concluded from Drake's depositions that she had not been the employer of Motts and had not had the right to control the manner in which Motts performed her duties. Therefore, the court entered a summary judgment in favor of Drake. Melmed appealed. We reverse. In Raffensberger v. Moran, 336 Pa.Super. 97, 485 A.2d 447 (1984), this Court reviewed the principles applicable to summary judgments as follows: "Ordinarily, summary judgment should only be entered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there exists no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Community Medical Services of Clearfield Inc. v. Local 2665, AFSCME, 292 Pa.Super. 238, 242, 437 A.2d 23, 25 (1981). See also: Thorsen v. Iron and Glass Bank, 328 Pa.Super. 135, 140, 476 A.2d 928, 930 (1984); Rybas v. Wapner, 311 Pa.Super. 430 50, 54, 457 A.2d 108, 109 (1983); Pa.R.C.P. 1035(b). In passing upon a motion for summary judgment, a court must examine the record in the light most favorable to the non-moving party. Pocono International Raceway, Inc. v. Pocono Produce, Inc., 503 Pa. 80, 83, 468 A.2d 468, 470 (1983); Zimmerman v. Zimmerman, 322 Pa.Super. 121, 123, 469 A.2d 212, 213 (1983). "It is not part of the court's function to decide issues of fact but solely to determine whether there is an issue of fact to be tried." Thorsen v. Iron and Glass Bank, supra, 328 Pa.Super. at 141, 476 A.2d at 931; Wilk v. Haus, 313 Pa.Super. 479, 482, 460 A.2d 288, 290 (1983). Any doubt must be resolved against the moving party. Chorba v. Davlisa Enterprises, Inc., 303 Pa.Super. 497, 500, 450 A.2d 36, 38 (1982). Id., 336 Pa.Superior Ct. at 102, 485 A.2d at 450. See also: Barber v. Harleysville Mutual Insurance Company, 304 Pa.Super. 355, 358, 450 A.2d 718, 719-720 (1982). In an action to recover damages vicariously for injuries resulting from an automobile accident, it is necessary for the plaintiff to prove not only that the driver was the defendant's servant, but that such servant was at the time engaged in his master's business. Klein v. Klein, 311 Pa. 217, 219, 166 A. 790, 791 (1933). A servant, in law, is "a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control." Restatement (Second) of Agency § 220(1) (1958). "It is not . . . the fact of actual interference or exercise of control by the employer, but the existence of the right or authority to interfere or control, which renders one a servant rather than an independent contractor." Feller v. New Amsterdam Casualty Co., 363 Pa. 483, 486, 70 A.2d 299, 300 (1950), quoting 27 Am.Jur. Independent Contractor § 6, at 487 (1940). See also: Juarbe v. City of Philadelphia, 288 Pa.Super. 330, 335, 431 A.2d 1073, 1076 (1981). It is the exclusive function of the jury to determine, from the evidence, the precise nature of the relationship, except where the facts are not in dispute, in 431 which latter event the question becomes one for determination by the court. Feller v. New Amsterdam Casualty Co., supra 363 Pa. at 486, 70 A.2d at 300-301. See also: Pennsylvania Gas & Water Co. v. Nenna & Frain, Inc., 320 Pa.Super. 291, 299, 467 A.2d 330, 333 (1983); Breslin v. Ridarelli, 308 Pa.Super. 179, 184, 454 A.2d 80, 82 (1982). A summary judgment, however, cannot be rested solely upon the oral depositions of the moving party. Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 213-214, 412 A.2d 466, 473-474 (1979). The credibility of the moving party's testimony is a question of fact for the jury. Nanty-Glo Boro v. American Surety Co., 309 Pa. 236, 163 A. 523 (1932). The summary judgment in the instant case was entered, according to the trial court, on "circumstances of Defendant Motts' employment" as follows: Defendant Drake is an elderly widow who is no longer able to adequately care for herself. Motts was hired by Northeastern Bank of Pennsylvania, Trustee over an inter vivos trust for Defendant Drake, primarily to provide health care for Drake. Motts also performed such services as cleaning, washing and the providing of meals. In this regard, Defendant Drake has made the following statement about the nature of Motts' employment: I do not supervise Mrs. Motts She does pretty much what she wants She comes in the morning, cooks my breakfast, makes the bed [and] leaves She comes back for lunch and then dinner. . . . During the hours Faye [Motts] is here I never tell her what to do She knows pretty much what to do I don't have to say anything to her. . . . Defendants Drake and Motts eat dinner out approximately five nights a week. On these occasions, Motts uses her own vehicle for their transportation. Defendant Drake does not drive, has never learned to drive and does not own an automobile. Normally Motts pays for the gasoline used by her automobile in taking Defendant Drake to dinner, but occasionally, Drake will pay for the gasoline as a courtesy. In regards to their dinner trips, Defendant Drake has stated that "We just go where we 432 feel like. She'll [Motts] ask me if I have a preference, however." Trial court opinion, at 6-7 (footnotes omitted). Based on the foregoing, we are constrained to conclude that the trial court erred by entering a summary judgment in favor of Drake. In the first place, the trial court based the summary judgment on oral depositions of Alice Drake, who was the moving party. The credibility of her testimony was an issue for the jury to decide; credibility could not properly be determined as a matter of law by the court. The record does not disclose, moreover, that any testimony has as yet been received from the other defendant, Faye Motts, or that the plaintiff, Jeffrey Melmed, has had an opportunity to produce evidence on this issue. Affidavits have not been filed; and the summary judgment, therefore, was based solely on the pleadings and the depositions of Alice Drake. Finally and in any event, the testimony of Alice Drake, even if believed, did not establish as a matter of law that her nurse was an independent contractor rather than an employee. The nature of the relationship between nurse and patient, rather, was an issue for the jury. The trial court erred when it held otherwise. Reversed and remanded for further proceedings. Jurisdiction is not retained.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265499/	200 N.J. Super. 266 (1985) 491 A.2d 58 CAROL HAHN, PLAINTIFF-APPELLANT, v. ARBAT SYSTEMS LIMITED, INC., A CORPORATION, AND WILLIAM J. MOONEY, INDIVIDUALLY AND JOINTLY, DEFENDANTS-RESPONDENTS. Superior Court of New Jersey, Appellate Division. Argued April 3, 1985. Decided April 18, 1985. 267 Before Judges FRITZ, GAULKIN and LONG. William E. Norris argued the cause for appellant (Latzer, Norris & Carbery, attorneys). John A. Avery argued the cause for respondents (Clapp & Eisenberg, attorneys). The opinion of the court was delivered by FRITZ, P.J.A.D. In this matter, in which plaintiff claims she was forced to leave her employment with defendant because of defendant's unlawful discrimination against her, plaintiff appeals from a summary judgment dismissing her complaint for damages brought in the Superior Court. We reverse. None of the procedural facts are in dispute. Plaintiff left work in August 1983. She promptly filed for unemployment compensation benefits. While we do not have any transcripts from the protracted proceedings in the Division of Unemployment and Disability Insurance, it is abundantly clear that this claim asserted discrimination. When her claim was first rejected by the local deputy, plaintiff on October 17, 1983 filed the Superior Court action the judgment in which is the subject of this appeal. In the meantime, she continued to process her unemployment compensation claim in the administrative agency 268 which, after remands and rehearings, finally denied the claim on April 16, 1984. In this determination, the Board of Review "agree[d] with the decision reached" by the Appeal Tribunal "[o]n the basis of the record below." The Appeal Tribunal had concluded that there was "nothing in the evidence to support the claimant's contentions that she was not being treated fairly or that she was being discriminated against in any manner." On August 6, 1984, defendants moved for summary judgment in the Superior Court action, arguing that plaintiff was collaterally estopped by the administrative determination. On the hearing of that motion counsel for plaintiff conceded that at the administrative hearings plaintiff "was not denied any opportunity to present ... evidence" relevant to the question of discrimination. The trial judge concluded, on expressed and adequate findings which might reasonably have been reached on sufficient credible evidence in the whole record, Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474 (1974), that since the issues involved in the Superior Court action had been "raised and litigated" in the agency, summary judgment should be granted to defendants. He said, reasonably enough, "[T]here has to be a termination of litigation at some point." Plaintiff's appeal presents the engaging question of whether collateral estoppel, a useful tool with respect to proposed relitigation of issues already litigated in our courts, may be applied by the courts as to issues already litigated in an administrative agency. As the trial judge here recognized, logic and common sense conduce to such a result. But we need not decide the issue here because we are satisfied that even if available, collateral estoppel should not be applied in this case dealing with a charge of discrimination. Of high priority is the public policy in New Jersey which seeks to ensure complete review and rigorous enforcement in matters of alleged and actual discrimination. In a case in which another useful tool, the entire controversy doctrine, was *269 denied application in a discrimination case, our Supreme Court said: The public interest in enforcement of the Law Against Discrimination persuades us that the entire controversy doctrine should not preclude the Division on Civil Rights from considering Thornton's discrimination claim. Our Court has repeatedly emphasized the strong public policy of New Jersey against employment discrimination. In Jackson v. Concord Company, 54 N.J. 113, 124 (1969) (racial discrimination in housing), we encouraged effective agency enforcement action "in order to eradicate the cancer of discrimination." In Peper v. Princeton University Board of Trustees, [77 N.J. 55, 80 (1978)] (alleged sex discrimination against a female employee), we observed that "New Jersey has always been in the vanguard in the fight to eradicate the cancer of unlawful discrimination of all types from our society." And, in Goodman v. London Metals Exchange, Inc., 86 N.J. 19, 30-31 (1981), we found that "[t]he Legislature has given the Law Against Discrimination a special niche in the legislative scheme.... The law is aimed at fulfilling provisions of the state constitution guaranteeing civil rights. N.J.S.A. 10:5-2." [Andersen v. Exxon Co., 89 N.J. 483, 492 (1982)]. [Thornton v. Potamkin Chevrolet, 94 N.J. 1, 6 (1983).] Were we to permit consideration of the discrimination issue for the purposes of unemployment compensation to abridge or defeat a complete exploration of the charges in the courts, we would, in our judgment, be permitting a serious infringement upon this important public policy. Accordingly, we reverse and remand for further proceedings in the trial court not inconsistent with the foregoing. No costs to either party.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265512/	491 A.2d 544 (1985) STATE of Maine v. Raymond M. BISSON. Supreme Judicial Court of Maine. Argued September 8, 1983. Decided April 22, 1985. 545 Janet T. Mills, Dist. Atty., Geoffrey Rushlau, (orally) Asst. Dist. Atty., Auburn, for plaintiff. 546 Michael Brust, (orally) Orville T. Ranger, Brunswick, for defendant. Before McKUSICK, C.J., and NICHOLS, ROBERTS, VIOLETTE, WATHEN, and GLASSMAN, JJ. NICHOLS, Justice. The Defendant, Raymond M. Bisson, was convicted in Superior Court, Androscoggin County, for operating a motor vehicle while under the influence of intoxicating liquor, 29 M.R.S.A. § 1312-B. On appeal he asserts that the Superior Court committed two reversible errors; it refused to instruct the jury on the defense of entrapment, and it limited the defense counsel's cross-examination of the State's sole witness. Because we agree that the failure to instruct the jury regarding entrapment constituted reversible error, we must vacate the judgment of conviction. At about 1:45 A.M. on December 3, 1981, at Lisbon, Police Officer Peter Mador arrested the Defendant for operating a motor vehicle while under the influence of intoxicating liquor. At his jury trial more than a year later the Defendant testified as follows: On the night of December 2, 1981, the Defendant had gone to the Camelot Inn, a nightclub, and had drunk alcoholic beverages until he became sick. He then got into his automobile, which he had left in the nightclub's parking lot, reclined the seat, and passed out. About three and a half hours later he was awakened by a police officer who ordered him to move his car from the lot. To quote the Defendant: He said you have to move the car. I said, Why? He said you have to move it from this parking lot. I said I can't drive, I've got to stay here. The officer was insistent, however, so the Defendant agreed to move his automobile. Thereupon the officer left, and the Defendant, after walking around for five minutes, decided he was "all right to drive" and drove away. On cross-examination, the Defendant conceded that he was not really fit to operate his automobile, adding, "but he told me to move the car. I was still in a daze from sleeping for three and a half hours. I felt I shouldn't move the car. I was going to move it to Graziano's parking lot there [one or two blocks away] and go to sleep." Just before he was to turn from the street into Graziano's parking lot, the same police officer pulled him over, administered field sobriety tests, and arrested him. At trial the officer testified that he had indeed awakened the Defendant in his parked vehicle and had spoken to him, but only to advise him not to leave his engine running with the windows closed and not to operate the vehicle because he was under the influence of liquor. Five or six minutes after the conversation, according to the officer, he observed the Defendant operating in the left-hand lane without his headlights on and therefore stopped and arrested him. At the close of the trial, the Defendant requested the court to instruct the jury: If you find that the offense of driving under the influence was induced by the actions of the police officer, Peter Mador, then you must find the defendant not guilty. The court declined to give this requested instruction. No instruction whatsoever regarding entrapment was given, nor was the jury instructed on any other theory of defense. The jury returned a verdict of guilty. It is well established that failure to instruct the jury on a theory of a defense having rational support in the evidence constitutes reversible error. State v. Bahre, 456 A.2d 860, 866 (Me.1983); State v. Rowe, 453 A.2d 134, 139 (Me.1982); State v. Rand, 430 A.2d 808, 815 (Me.1981). Thus, courts have declared it necessary to instruct on entrapment whenever the issue of entrapment has been generated by the evidence, even though no such jury instruction was requested, People v. Barraza, 23 Cal.3d 675, 591 P.2d 947, 153 Cal.Rptr. 459 (1979), or though the requested instruction 547 may have misstated the law of entrapment, United States v. Reynoso-Ulloa, 548 F.2d 1329, 1339-40 (9th Cir.1977). Here the defendant's counsel entered a timely objection to the jury instructions on the ground that "there was a failure to charge that the issue of entrapment was properly generated by the evidence, and, therefore, the burden is upon the State to establish beyond a reasonable doubt the predisposition of the accused to commit the crime." This objection contained a fair statement of the law. State v. Matheson, 363 A.2d 716 (Me.1976). Accordingly, our review on appeal is for saved error and we do not test it for obvious error. See M.R.Crim.P. 52(b). The defense of entrapment is available for the offense of operating under the influence if appropriately generated by the evidence. State v. Farnsworth, 447 A.2d 1216 (Me.1982).[1] In Farnsworth, our most recent decision dealing with entrapment, we noted that entrapment has two elements: First, government action must have induced the defendant to commit the crime; second, the defendant must not have been predisposed to commit the crime. 447 A.2d at 1218. In the case before us the Defendant's testimony was pertinent to both of these elements. The Defendant testified, in effect, that he was induced to drive while under the influence of intoxicating liquor by the police officer's command that the Defendant move his automobile. The officer's order plainly contemplated that the Defendant operate his motor vehicle although he was obviously under the influence.[2] This sort of inducement is different from, and arguably stronger than, the more typical entrapment situation in which an agent of the state, working under cover, badgers or beguiles a suspect into violating the law, see, e.g., Sorrells v. United States, 287 U.S. 435, 53 S.Ct. 210, 77 L.Ed. 413 (1932). Entrapment may also be found where government agents, acting under color of apparent authority, order or sanction the activity that comprises the offense for which the defendant is subsequently arrested. Cf. Cox v. Louisiana, 379 U.S. 559, 85 S.Ct. 476, 13 L.Ed.2d 487 (1965) (police officials who gave the defendant permission to demonstrate and then arrested him for doing so engaged in "an indefensible sort of entrapment"); State v. Farnsworth, supra 548 (suggesting that it would have constituted inducement if the police officers had told defendant, a police informant charged with O.U.I. that they would "cover" him for driving while under the influence of liquor).[3] Indeed, inducement by a government agent may consist of any of the following: "persuasion, fraudulent representations, threats, coercive tactics, harassment, promises of reward, pleas based on need, sympathy, or friendship, and any other government conduct which would create the risk of causing an otherwise unpredisposed person to commit the crime charged." United States v. Burkley, 591 F.2d 903 (D.C.Cir.1978), cert. denied 440 U.S. 966, 99 S.Ct. 1516, 59 L.Ed.2d 782 (1979). An order given in the capacity of a police officer is a particularly potent form of government inducement. The Defendant's testimony also indicated that he was not predisposed to commit the offense. He stated that he hesitated to follow the officer's repeated orders and that he remonstrated that he was unable to drive. See State v. Matheson, 363 A.2d at 722 & n. 7. The fact that the Defendant's mind was concededly unclear when the officer spoke to him might lead a jury to disbelieve his testimony, but this does not deprive the Defendant of the right to have the jury consider his defense, once it is generated by the evidence. Even unsubstantial evidence of entrapment necessitates a jury charge on this defense. United States v. Garcia, 546 F.2d 613, 615 (5th Cir.), cert. denied 430 U.S. 958, 97 S.Ct. 1608, 51 L.Ed.2d 810 (1977). All that is necessary for the issue of entrapment to be generated is for the record to disclose evidence of entrapment of such nature and quality as to warrant a reasonable hypothesis that entrapment did occur. Once this is accomplished, the burden shifts to the State to prove the absence of entrapment beyond a reasonable doubt. State v. McCrillis, 376 A.2d 95 (Me.1977); State v. Matheson, supra. The Superior Court refused to instruct the jury on entrapment because it discerned no evidence of a "scheme, device, subterfuge or lure" on the part of the police officer. As our recent entrapment cases indicate, this is not one of the elements of entrapment which a defendant needs to show. State v. Farnsworth, supra; State v. McCrillis, supra; State v. Matheson, supra. Nor are we aware of any other jurisdiction where in recent times this has been held to be an essential element of entrapment. It appears that the Superior Court below took the phrase, "scheme, device, subterfuge or lure," from our opinion in State v. Gellers, 282 A.2d 173 (Me.1971). There, however, we were merely quoting language from a description of entrapment found in an earlier case, State v. Calanti, 142 Me. 59, 64-65, 46 A.2d 412, 415 (1946). See also State v. Carvelle, 290 A.2d 190, 192 (Me.1972). The presence or absence of a "scheme, device, subterfuge or lure" was in no way essential to our decision in Gellers, Carvelle or Calanti. Inasmuch as the evidence in the case before us was sufficient to generate the issue of entrapment, it was reversible error to fail to instruct the jury on entrapment. See State v. Raubeson, 488 A.2d 1379 (Me.1985); State v. Glidden, 487 A.2d 642 (Me.1985). The jury that convicted the Defendant was left in complete ignorance of the nature, and even the legally cognizable existence, of his defense. "A verdict based on a misconception of the law is against the law, and to allow it to stand is not justice." State v. Bahre, 456 A.2d 860, 865 (Me. 1983). *549 As to the Defendant's remaining claim of error, because the underlying issue may arise on re-trial, we consider the merits of this claim in the interests of judicial economy. See State v. Rusher, 468 A.2d 1008 (Me.1983). This error the Defendant alleges consisted in limiting the defense counsel's cross-examination of the police officer. Specifically, the defense counsel asked the officer why he was no longer serving on the Lisbon police force, and the trial court sustained an objection on the ground of irrelevance. A ruling on relevancy is not reviewable except for an abuse of discretion. State v. Gagnon, 383 A.2d 25, 31 (Me.1978). It is well within a trial court's discretion to disallow counsel's inquiry. If, as the Defendant asserts on appeal, the purpose of the inquiry was to impeach the former officer's credibility, there should have been some offer of proof concerning how the expected answer would relate to his truthfulness. M.R.Evid. 103, 608(b). Instead, the defense counsel indicated he had a quite different expectation, for after the State's objection but before the court's ruling he improperly interjected, "You were discharged for being incompetent, weren't you?" A defendant is permitted no greater leeway for collateral impeachment than our rules of evidence provide merely because his defense is entrapment. State v. McCrillis, supra, 376 A.2d at 98 n. 3. The entry is: Judgment vacated. Remanded for further proceedings consistent with the opinion herein. All concurring. NOTES [1] The State contends that the entrapment defense should not be available for operating under the influence, because this offense requires no culpable state of mind. The State's argument is predicated on a misconception of the rationale for the entrapment defense. Entrapment does not negate a culpable state of mind. For example, one who is entrapped into committing the offense of selling controlled substances does not lack the intent to sell them. (If he lacked a culpable state of mind, there would be no need to assert this theory of defense.) Rather, he will not be convicted because of policy reasons similar to due process considerations; these, however, do not ordinarily rise to a constitutional dimension, see United States v. Garcia, 562 F.2d 411 (7th Cir.1977). The purpose of the entrapment defense is "primarily to deter police officers from using law enforcement techniques which `create' criminals." State v. Farnsworth, 447 A.2d at 1218, quoting 1 F. Wharton, Criminal Law § 52 at 253 (1978). These considerations apply with the same force to operating under the influence as they do to offenses requiring a culpable state of mind. To be sure, entrapment is seldom asserted in drunk driving cases and still more seldom is it asserted meritoriously. We note, however, that we are not the only court to declare that this defense would be available in the appropriate drunk driving case, see, e.g., Noles v. State, 164 Ga.App. 191, 296 S.E.2d 768 (1982). [2] The police officer himself testified that he believed, when he approached the Defendant's parked automobile, that the Defendant was under the influence of liquor. Evidence sufficient to generate an issue need not come from the defendant but may be presented by one side or the other, or by both. State v. Inman, 350 A.2d 582, 587 n. 1 (Me.1976). Moreover, the condition of the Defendant at the time and the circumstances in which the officer first discovered him, according to their collective testimony asleep in his automobile in the otherwise deserted parking lot of a drinking establishment, smelling of liquor, with his windows closed and his car radio blaring loudly enough to be heard from the outside could leave little doubt in the mind of a trained police officer that the defendant was indeed under the influence of liquor. [3] The facts asserted by this Defendant closely resemble those which gave rise to one of the earlier decisions to overturn a conviction on the basis of entrapment, Woo Wai v. United States, 223 Fed. 412 (9th Cir.1915). The defendant in that case had been reluctant to violate certain immigration laws, but he was threatened with prosecution if he did not violate them.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265554/	491 A.2d 521 (1985) Thomas WORD, Appellant, v. TIBER ISLAND COOPERATIVE HOMES, INC., Appellee. No. 83-328. District of Columbia Court of Appeals. Submitted March 15, 1984. Decided April 30, 1985. 522 Bernard A. Gray, Washington, D.C., was on brief, for appellant. Lisa J. Dessel, Michael E. Brand, and Kenneth J. Loewinger, Washington, D.C., were on brief, for appellee. Before BELSON, TERRY and ROGERS, Associate Judges. TERRY, Associate Judge: Appellee (the landlord) sued appellant (the tenant) for possession of an apartment based on the tenant's non-payment of rent. After a bench trial, the court entered judgment for the landlord. The sole issue presented on this appeal is whether the landlord was required to give the tenant a thirty-day notice to quit before bringing this action for possession. In June 1981 appellant executed a lease with Berens Management Company, the agent for T.I. Associates Limited Partnership, for an apartment in a building owned by the partnership. In the lease, which created a month-to-month tenancy, appellant agreed to waive his right to receive any notice to quit "in case of default in the payment of rent or breach of any ... conditions and agreements [in the lease]...." Another provision stated: "[T]he conditions and agreements contained herein are binding on, and may be legally enforced by the parties hereto, their heirs, executors, administrators, successors and assigns...." Appellee, Tiber Island Cooperative Homes, Inc. ("Tiber Island"), purchased the apartment building in November 1981 and was assigned the lease by the partnership. Appellant did not pay any rent from December 1981 through March 1982. In April 1982, however, he started to make rental payments into the registry of the court pursuant to a protective order in another action for possession which Tiber Island brought against him.[1] That money was eventually released to Tiber Island. In September 1982 Tiber Island brought the present action for possession based on appellant's non-payment of rent from December 1981 through March 1982. On the printed complaint form, Tiber Island's agent checked the box which stated that "service of a notice to quit has been specifically waived in writing." Appellant filed an answer raising five defenses, four of which were based on the landlord's failure to serve him with a valid notice to quit.[2] At trial Tiber Island's counsel argued that appellant's waiver of his right to receive a notice to quit was a covenant which ran with the leasehold estate and could be enforced by Tiber Island as assignee of the original landlord, T.I. Associates Limited Partnership. Tiber Island also maintained that under D.C.Code § 45-1430 (1981)[3] it was entitled to the same rights which the original landlord had under the lease, and thus it did not have to provide appellant with a notice to quit because he had waived his right to such notice in his lease with the partnership. Appellant, of course, argued to the contrary. Both parties brought to 523 the court's attention several conflicting opinions by other Superior Court judges on the issue of whether a waiver by a tenant of his right to receive a notice to quit is a covenant running with the land which may be asserted by an assignee of the original landlord. After trial and the submission of supplemental memoranda, the court entered judgment for the landlord, Tiber Island, on the ground that "[a] notice to quit is a covenant which runs with the land and is enforceable by an assignee." Both parties focus their arguments on appeal, as they did below, on the issue of whether a tenant's waiver of his right to receive a notice to quit is a covenant running with the land. We do not decide that question, however, because we conclude that the judgment must be affirmed on the alternative ground urged by Tiber Island in the trial court, namely, that under D.C. Code § 45-1430 it had the same rights as its assignor, the original landlord.[4] Section 45-1430, whose language has stood unchanged since 1901, gives Tiber Island, the assignee of the original lease, "the same right of action against the lessee ... for rent or for any forfeiture or breach of any covenant or condition in the lease which the ... assignor might have had...." It puts the assignee in exactly the same position as the assignor with respect to the enforcement of the lease. Included within that right of action is the right to enforce every provision of the lease, including in this instance the tenant's express waiver of his right to a notice to quit. Appellant does not dispute that he would have had no right to a notice to quit if this action had been brought by his original landlord, the partnership; rather, he argues that the assignment of the lease made his waiver unenforceable. We cannot agree. We hold that, by operation of section 45-1430, the rights of Tiber Island as assignee of the lease are precisely the same as the rights of its assignor. Thus Tiber Island, as assignee and successor landlord, was under no duty to give appellant any notice to quit, since appellant had waived his right to such notice when he signed the lease with the partnership, the assignor and original landlord. Because appellant failed to pay his rent for four months, and because he waived his right to a notice to quit, the trial court properly awarded possession to the landlord. Because D.C.Code § 45-1430 controls this case, we do not need to decide, and we do not decide, whether a tenant's waiver of his right to a notice to quit is a covenant running with the land. Affirmed. NOTES [1] In that case it appears that a notice to quit was duly served on appellant. [2] The fifth defense was a pro forma assertion that the complaint failed to state a claim upon which relief could be granted. Appellant wisely does not press this point on appeal. [3] D.C.Code § 45-1430 (1981) provides: The grantee or assignee of the reversion of any leased premises shall have the same right of action against the lessee, his personal representatives, heirs, or assigns, for rent or for any forfeiture or breach of any convenant or condition in the lease which the grantor or assignor might have had; and the assignee of the lessee shall have the same rights of action against the lessor, his grantee, or assignee, upon any covenants in the lease which the lessee might have had against the lessor. [4] We may, of course, affirm a judgment on grounds other than those relied upon by the trial court. See Garrett v. Washington Air Compressor Co., 466 A.2d 462, 464 n. 5 (D.C.1983), and cases cited therein.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265581/	163 Cal.App.4th 1 (2008) In re WALTER P., a Person Coming Under the Juvenile Court Law. THE PEOPLE, Plaintiff and Respondent, v. WALTER P., Defendant and Appellant. No. C056550. Court of Appeals of California, Third District. April 25, 2008. 2 Robert F. Kane for Defendant and Appellant. Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Michael P. Farrell, Assistant Attorney General, Charles A. French and Angelo S. Edralin, Deputy Attorneys General, for Plaintiff and Respondent. OPINION DAVIS, J. The juvenile court found that Walter P., then 17 years old, violated Health and Safety Code section 11357, subdivision (b), which provides as pertinent: "(b) Except as authorized by law, every person who possesses not more than 28.5 grams of marijuana, other than concentrated cannabis, is guilty of a misdemeanor and shall be punished by a fine of not more than one hundred dollars ($100)."[1] The juvenile court placed Walter on probation for six months. Over Walter's objection, the court imposed as special conditions of probation that Walter be detained on home supervision for 45 days and that he be required to complete eight days in the Juvenile Work Project program. (1) Walter contends, the People concede, and we agree that these two probation conditions are legally unauthorized because section 11357, subdivision (b), does not authorize any type of confinement. (2) Although a juvenile court, in granting probation, "may impose and require any and all reasonable conditions that it may determine fitting and proper to the end that justice may be done and the reformation and rehabilitation of the ward 3 enhanced" (Welf. & Inst. Code, § 730, subd. (b)), a probation condition is invalid if it exceeds what is allowed by statute. (See In re Colleen S. (2004) 115 Cal.App.4th 471, 473-476 [10 Cal.Rptr.3d 9].) (3) As the People have noted, section 11357, subdivision (b), states that possession of not more than 28.5 grams of marijuana is a misdemeanor punishable by a maximum fine of $100; nothing in the statute authorizes any type of confinement. DISPOSITION The judgment is modified by striking the probation conditions (and their effectuating language) that Walter must "complete 45 days on the Home Supervision program" and that he must "participate in and complete 8 days in the Juvenile Work Project program." As modified, the judgment is affirmed. Blease, Acting P. J., and Morrison, J., concurred. NOTES [1] Hereafter, undesignated section references are to the Health and Safety Code.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367452/	173 S.W.3d 247 (2005) COMMONWEALTH of Kentucky, CABINET FOR HEALTH AND FAMILY SERVICES (Formerly Cabinet for Families and Children), Appellant, v. Honorable Joan BYER, Judge, Jefferson Family Court; D.A.; Bryan Gatewood; K.A.; L.M.; and Irv Maze, Jefferson County Attorney, Appellees. No. 2003-CA-002677-ME. Court of Appeals of Kentucky. August 26, 2005. G. Thomas Mercer, Louisville, KY, for Appellant. No Brief Filed, for Appellee. Before GUIDUGLI, JOHNSON, and MINTON, Judges. OPINION MINTON, Judge. The Cabinet for Health and Family Services ("the Cabinet") appeals an order of the Jefferson Family Court that required it to pay the court-appointed expert's fees in a dependency action in which custody 248 became a contested issue. We hold that the family court abused its discretion when it appointed the expert without first adopting the show cause procedure required by KRE[1] 706. Therefore, we reverse the family court's order. The Cabinet filed a dependency action alleging that D.A., a minor child, was an abused or neglected child within the meaning of KRS[2] 600.020(1). According to the petition, D.A.'s mother, K.A., was not properly feeding and caring for her child. As a result of the petition, temporary custody of D.A. was given to her maternal grandmother. At the hearing on the petition, K.A. stipulated that D.A. was indeed abused and neglected. K.A. further agreed not to contest the child's temporary placement with the maternal grandmother. A few months later, the court determined following a hearing that neither K.A. nor the maternal grandmother was a proper custodian; so the court removed the child from the maternal grandmother and placed her temporarily with the Cabinet. The following day, the court sustained the Cabinet's motion to release custody from the Cabinet to L.M., a non-relative who had been D.A.'s caregiver since birth. Several months later, K.A. moved for custody of D.A. to be returned to her or for increased visitation; L.M. then moved for permanent custody of D.A. A complete hearing on these motions was postponed several times as K.A., L.M., and the Cabinet reached an agreement acceptable to the court for expanded visitation by K.A. Eventually, a hearing on the pending custody motions was held on October 9, 2003. The Cabinet's representative, Carlanda Fields, failed to appear at the hearing because she was involved in an automobile accident earlier that day. Despite the Cabinet's absence, the court proceeded to appoint its own expert, Dr. Ronda Luttrell, to perform an assessment of the level of bonding between the child and the custody contestants and to report back to the court. The court further ordered the Cabinet in its absence to provide the funding for the expert. The Cabinet immediately moved to alter, amend or vacate the order. The motion was based on the Cabinet's claim that it was not a party to the action and had not been served with legal notice of a request for imposition of costs. The Cabinet also argued that the order violated the constitutional separation of powers doctrine and statutory law. At the hearing on this motion, the court stated it was forced to appoint its own expert witness to perform the custodial evaluations because none of the evaluators in Louisville under contract with the Cabinet was "competent" to perform a "bonding assessment." The court acknowledged that there was a capable evaluator under contract with the Cabinet in Lexington; but because the Cabinet's representative failed to attend the October 9, 2003, hearing, the availability of that evaluator was not brought to the court's attention.[3] Therefore, the court stated it had no choice but to order the contestants to meet with Dr. Luttrell, an evaluator who, in the court's opinion, was competent to perform a bonding assessment. Citing its right to hire its own experts, the court denied the Cabinet's motion and ordered the Cabinet to pay Dr. Luttrell's fees in the amount of $1,500. This appeal follows. 249 Because this appeal involves an issue of law, our standard of review is limited to whether the family court abused its discretion. "The test for abuse of discretion is whether the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles."[4] As an initial matter, the Cabinet argues that "once the trial court removed [D.A.] from the Cabinet's custody the Cabinet in essence became a nominal party to the custody contest between the appellees, [L.M.] and [K.A.]." Because of its status as a "nominal party," the Cabinet claims it "should not have been ordered to pay costs associated with the contest." We disagree with this assertion, in part. In Cabinet for Human Resources v. Howard, we said that when the Cabinet files a dependency action, "the Cabinet is in fact the `plaintiff[.]'"[5] The current custody dispute started in court with the Cabinet's initial filing of a dependency action; therefore, we believe the Cabinet remains the plaintiff in this case. Although the Cabinet is not D.A.'s custodian, it has continued to play a significant role throughout these proceedings. The Cabinet is required to have a representative at the custody hearings, to monitor D.A.'s environment, to assess L.M.'s and K.A.'s parenting skills, and to report to the court on the parties' progress. So we reject the Cabinet's contention that it is merely a "nominal party" here. But we do agree with the Cabinet that it was improperly assessed the fees for the custodial evaluation. Our conclusion is based not on the Cabinet's status as a party, but rather on the family court's failure to follow KRE 706(a). That rule reads: The court may on its own motion or on the motion of any party enter an order to show cause why expert witnesses should not be appointed, and may require the parties to submit nominations. The court may appoint any expert witnesses agreed upon by the parties, and may appoint expert witnesses of its own selection. (Emphasis added.) There is no reported case in our jurisdiction interpreting KRE 706(a). But the procedural safeguard in the rule seems clear: without impinging on the court's inherent authority to make the final selection, the court must first adopt a show cause procedure for the appointment of experts. This guarantees that the parties will have notice that the process is in motion and an opportunity to advise the trial court and to comment on the selection of the court-appointed expert. The Cabinet argues that given notice and an opportunity to be heard, it could have nominated competent evaluators who were under contract with the Cabinet. Unfortunately, the record does not contain a transcript or videotape of the October 9, 2003, hearing. But from what we can glean from the record, the court acted upon its own motion in ordering the evaluation by Dr. Luttrell. An order was entered to that effect, and the contestants proceeded with the custodial evaluation. No show cause order process preceded the appointment of the expert, nor was the Cabinet notified of the court's appointment until after the evaluations were complete. The Cabinet received the court's order and the bill for the custodial evaluation several days after the evaluation had occurred. The family court failed to observe the procedural safeguards of KRE 706(a) by neglecting to issue a show cause order *250 before appointing its own expert. We believe this resulted in a decision that was "arbitrary, unreasonable, unfair, [and] unsupported by sound legal principles."[6] And because the court abused its discretion, we must reverse the order requiring the Cabinet to pay the fees of the court-appointed expert. ALL CONCUR. NOTES [1] Kentucky Rules of Evidence. [2] Kentucky Revised Statutes. [3] Although the court initially blamed the Cabinet's representative for her absence on the day of the hearing, it was quickly brought to the court's attention that the representative's absence was unintentional and due to her involvement in a car accident. [4] Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky.2000). [5] 705 S.W.2d 935, 937 (Ky.App.1985). [6] Goodyear at 581.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367455/	173 S.W.3d 595 (2005) In re CHAMPION TECHNOLOGIES, INC. and Permian Mud Service, Inc. No. 11-05-00186-CV. Court of Appeals of Texas, Eastland. September 15, 2005. 596 B. Calvin Hendrick and James W. Essman, Shafer, Davis, O'Leary & Stoker, P.C., Odessa, TX, for relator. Richard D. Davis, Midland, TX, Cory Curtis, Killion & Curtis L.L.P., Lubbock, TX, for real party in interest. 597 Panel consists of: WRIGHT, J., and McCALL, J.[3] Opinion TERRY McCALL, Justice. Order on Motion for Rehearing Relators, Champion Technologies, Inc. and Permian Mud Service, Inc., filed a petition for writ of mandamus on May 27, 2005, attacking the trial court's disposition of their motion to compel arbitration. After receiving responses to the petition from the real parties in interest, this court denied the petition on July 14, 2005, without issuing a written opinion. See TEX.R.APP.P. 52.8(d). Relators subsequently filed a motion for rehearing on July 28, 2005. Upon considering the motion for rehearing and the responses filed thereto, this court's judgment denying the petition is withdrawn, and the petition is conditionally granted as set forth below. Underlying Proceedings Real parties in interest, Burl Fuller, Danny Alexander, and Billy York, filed a wrongful termination action against relators on June 12, 2004. Relators filed a motion to compel arbitration on October 14, 2004, alleging that the claims were subject to a written arbitration agreement. On February 4, 2005, the parties appeared for a hearing on the motion to compel arbitration. The real parties in interest announced at the outset that they were not ready for the hearing, presumably because they wanted to conduct additional discovery regarding the enforceability of the arbitration agreement. After receiving the announcements from trial counsel, the trial court took a recess during which it conferred with counsel in chambers. Upon the conclusion of the conference with counsel, the trial court announced the following disposition which is the subject of this proceeding: After meeting with counsel in chambers, unless counsel really want to, the Court has heard a great deal and has a great deal to read pertaining to the motion to compel, and the Court is aware of the motion to compel arbitration filed by [relators] and the responses of the [real parties in interest]. The Court is going to reserve ruling on that motion to compel at this time and carry it forward. The Court is going to go through and allow discovery on the theory that the Court may be a little easier to obtain a hearing on other than an arbitration panel. The discovery would probably be conducted whether the case is tried here in state court versus being heard by an arbitration panel. The entire matter may end up before an arbitration panel, but we're going to go through the discovery process here subject to the Court's rulings so that by the time the Court makes a determination of whether this case goes to arbitration or whether it's tried here in this Court, the discovery is complete. That's the Court's aim at this point in time, to where discovery is complete. If the case gets sent to arbitration then the discovery process does not need to be started all over again or continued, discovery is complete.... People have what theythey need to do in order to try their case or present their case. The trial court also denied relators' motion to stay discovery pending arbitration at the February 4, 2005, hearing. 598 Standard of Review Relators sought to compel arbitration under the provisions of the Federal Arbitration Act (FAA). See 9 U.S.C. §§ 1-16.[1] Under the FAA, the denial of a motion to compel arbitration is reviewable by mandamus because there is no adequate remedy by appeal. Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 271-72 (Tex.1992) (orig.proceeding). When Texas courts are called on to decide if disputed claims fall within the scope of an arbitration clause under the FAA, Texas procedure controls that determination. Jack B. Anglin Co., Inc. v. Tipps, supra at 268. We review orders compelling or denying arbitration under the FAA under an abuse of discretion standard. Jack B. Anglin Co., Inc. v. Tipps, supra at 271. A trial court abuses its discretion if it acts without reference to any guiding rules or principles or acts in an arbitrary or unreasonable manner. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985), cert. den'd, 476 U.S. 1159, 106 S. Ct. 2279, 90 L. Ed. 2d 721 (1986). When reviewing matters committed to a trial court's discretion, an appellate court may not substitute its own judgment for that of the trial court. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). Nor may a reviewing court set aside the trial court's determination unless it is clear from the record that the trial court could only reach one decision. Walker v. Packer, supra at 840. Our review of a trial court's determination of the legal principles controlling its ruling is much less deferential. Walker v. Packer, supra at 840. A trial court has no discretion in determining what the law is or in applying the law to the facts. Walker v. Packer, supra at 840. Thus, a clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. Walker v. Packer, supra at 840. Analysis Relators raise two issues in seeking mandamus relief. They first assert that the trial court abused its discretion by not ruling on their motion to compel arbitration until after the completion of discovery. In their second issue, relators contend that the trial court abused its discretion in denying their motion to stay discovery pending arbitration. With respect to relators' first issue, there are conflicting opinions from the First and Thirteenth Courts of Appeals relating to the trial court's decision to defer ruling on the motion to compel arbitration until after the completion of discovery. In C P & Associates v. Pickett, 697 S.W.2d 828, 831 (Tex.App.-Corpus Christi 1985, no writ), the court of appeals upheld the trial court's decision to stay arbitration proceedings until the completion of discovery. In In re MHI Partnership, Ltd., 7 S.W.3d 918, 923 (Tex.App.-Houston [1st Dist.] 1999, orig. proceeding), the court of appeals directed the trial court to vacate its order deferring a ruling on a motion to compel arbitration pending completion of discovery. Accordingly, the holding in Pickett appears to support the action taken by the trial court whereas the decision in MHI supports relators' position. We conclude that the holding of the First Court of Appeals in MHI is the correct statement of the law in this regard. The First Court of Appeals relied heavily upon the Texas Supreme Court's decision in Tipps in reaching its holding in MHI. See Jack B. Anglin Co., Inc. v. 599 Tipps, supra.[2]Tipps is a significant opinion because it outlined the procedures to be followed when a motion to compel arbitration is filed. Jack B. Anglin Co., Inc. v. Tipps, supra at 268-269. The supreme court stated in Tipps that the expedited disposition of a dispute is one of the main benefits of arbitration. Jack B. Anglin Co., Inc. v. Tipps, supra at 269. The supreme court also acknowledged that the legislature has mandated that a motion to compel arbitration is to be "summarily" decided. Jack B. Anglin Co., Inc. v. Tipps, supra at 269; see TEX. CIV. PRAC. & REM. CODE ANN. § 171.021(b) (Vernon 2005). In MHI, the court of appeals relied upon the principles announced in Tipps to conclude that a motion to compel arbitration should be decided in an expedient manner. In re MHI Partnership, Ltd., supra at 922-23. The court of appeals concluded that the trial court had no discretion to defer ruling on the merits of a motion to compel arbitration until after discovery had been completed in the case because doing so violated the mandate that arbitration issues be decided summarily. In re MHI Partnership, Ltd., supra at 923. We agree with the First Court of Appeals's determination in MHI that delaying a decision on a motion to compel arbitration until after discovery is completed defeats the goal of resolving arbitration issues promptly. We also agree that the trial court lacks discretion to defer ruling on a motion to compel arbitration until the completion of all discovery in the case because doing so forces the parties to litigate their dispute in the trial court even though it may ultimately be determined that all or some of the claims are subject to arbitration. We note in this regard that the arbitration provision at issue in this case explicitly provides that "[t]he arbitrator shall have discretion to determine the form, amount and frequency of discovery by the Parties." Accordingly, we conclude that the trial court abused its discretion by deferring its ruling on the motion to compel arbitration until after the completion of discovery in the case. The real parties in interest argue that, in light of the holding in Pickett, the trial court did not act without reference to guiding rules and principles and, therefore, did not abuse its discretion. However, we have determined that the holding in Pickett is incorrect. As noted previously, a trial court has no discretion in determining what the law is or in applying the law to the facts. Walker v. Packer, supra at 840. The real parties in interest additionally argue that relators have waived their right to obtain a ruling on their motion to compel arbitration prior to the completion of discovery as a result of relators' participation in the discovery process to date. This argument is more properly characterized as addressing the merits of the motion to compel arbitration. See EZ Pawn Corporation v. Mancias, 934 S.W.2d 87, 89 (Tex.1996); In re MHI Partnership, Ltd., supra at 921. Relators' first issue is sustained. In support of their second issue, relators' arguments focus on the merits of their motion to compel arbitration. Relators ask this court to enter an order referring this litigation to arbitration and stay all discovery pending arbitration. As correctly noted by the real parties in interest, the arbitration issue is not ripe for our consideration because the trial court has not made a ruling on the merits of the motion to compel arbitration. See In re MHI Partnership, Ltd., supra at 921. Accordingly, *600 we do not reach relators' second issue. This Court's Ruling This court's judgment of July 14, 2005, denying the petition is withdrawn. We conditionally grant the petition for writ of mandamus. A writ of mandamus will issue if the trial court does not (1) vacate its order deferring a ruling on relators' motion to compel arbitration and (2) either rule summarily on the motion or rule on the motion after conducting an evidentiary hearing promptly if one is required to determine disputed facts on the issues relevant to the merits of the motion to compel arbitration. See Section 171.021(b). NOTES [3] W.G. Arnot, III, Chief Justice, retired effective July 31, 2005. The chief justice position is vacant. [1] The arbitration agreement at issue provides that the provisions of the FAA are to govern its application. [2] It is significant to note that the opinion of the Thirteenth Court of Appeals in Pickett preceded the supreme court's opinion in Tipps.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367453/	173 S.W.3d 851 (2005) Reginald Wayne TAYLOR, Appellant v. The STATE of Texas, Appellee. No. 06-05-00022-CR. Court of Appeals of Texas, Texarkana. Submitted September 6, 2005. Decided September 8, 2005. 852 Staci Dian Biggar, Guerrero & Biggar LLP, Houston, for appellant. Shirley Cornelius, Assistant District Attorney, Houston, for appellee. Before MORRISS, C.J., ROSS and CARTER, JJ. OPINION Opinion by Justice ROSS. Reginald Wayne Taylor was convicted by a jury for the offense of sexual assault of a child.[1] Taylor pled "true" to the enhancement allegation that he had once before been convicted of the felony offense of robbery. The trial court assessed his punishment in accordance with the parties' agreement at thirty-five years' imprisonment and sentenced him accordingly. Taylor appeals, contending the trial court erred: 1) in disallowing the testimony of a witness; and 2) in giving an Allen charge[2] to the jury. We affirm. The sufficiency of the evidence is not challenged. Briefly, the victim, T.G., fifteen years old at the time of the offense, testified that, during the early morning hours of November 21, 2003, Taylor took her to a motel room where he removed her shorts and underwear and put his mouth on her vagina. Immediately after this assault, Taylor told T.G. that, if anybody ever found out about it, she had "better deny it to the end." Taylor was thirty-three years old at the time of this offense. Taylor first complains of the trial court's action in disallowing the testimony of his father, Henry Roy. Henry's[3] testimony was excluded because it would have been in violation of the Rule.[4] T.G. testified she and her mother confronted Taylor and his family about the alleged sexual assault. She said she (T.G.) spoke to Henry alone and told him the incident did happen. Taylor now claims this testimony was unexpected, and because he did not anticipate that testimony, he had not intended to call Henry as a witness. Taylor maintained that no such private conversation took place between T.G. and Henry, and wanted the opportunity to rebut her testimony by offering the testimony of Henry, who had been sitting in the courtroom throughout the trial. The trial court excluded the rebuttal testimony because the Rule was invoked at the beginning of trial and the State objected to the testimony. 853 Disqualification of a defense witness for such witness' violation of the Rule must be viewed in light of the defendant's constitutional right to call witnesses on his or her behalf. Davis v. State, 872 S.W.2d 743, 745 (Tex.Crim.App.1994). Generally, a defense witness should not be excluded solely for violation of the Rule. Lopez v. State, 960 S.W.2d 948, 953 (Tex.App.Houston [1st Dist.] 1998, pet. ref'd). The trial court's decision to exclude a witness' testimony is reviewed under the abuse of discretion standard. See id. A trial court abuses its discretion if its ruling is outside the zone of reasonable disagreement. Id. The test for determining if a court properly exercised its discretion in excluding testimony in this context is: 1) whether the "particular and extraordinary circumstances" show the defendant or his or her counsel consented, procured, connived, or had knowledge of a witness or potential witness who is in violation of the sequestration rule, and 2) if no particular circumstances exist to justify disqualification, was the testimony of the witness crucial to the defense. Id. (citing Webb v. State, 766 S.W.2d 236, 245 (Tex.Crim.App.1989)). The appellant has the burden of establishing both prongs. Id. Taylor contends Henry's testimony was crucial because the trial centered around T.G.'s credibility and Henry could have directly controverted one of her claims. However, excluded testimony is not considered crucial if it can be supplied by witnesses other than the excluded witness. See Cooper v. State, 578 S.W.2d 401, 403 (Tex.Crim.App. [Panel Op.] 1979), overruled in part on other grounds, Bates v. State, 587 S.W.2d 121, 143 (Tex.Crim.App.1979); Flores v. State, 915 S.W.2d 651, 653 (Tex.App.-Houston [14th Dist.] 1996, pet. ref'd). The confrontation between T.G. and her mother and Taylor and his family was confirmed by Gladie Roy, Taylor's mother. Gladie's testimony was apparently anticipated by Taylor, and she was placed under the Rule. Gladie testified that she, Henry, and Taylor were all present during the confrontation by T.G. and her mother. Gladie further testified she asked T.G. whether the allegations she was making against Taylor were true, and T.G. replied, "I'm not sure." It was therefore clear to Taylor that the conversations between the various participants in this confrontation were important. He could have reasonably expected to call Henry to testify regarding some aspect of that confrontation, particularly, who was conversing with whom, which would necessarily include a private conversation between Henry and T.G., or the lack of a private conversation between them. Taylor, having knowledge of Henry's presence in the courtroom and the context of his potential testimony, fails to meet the first prong of the Webb test. Taylor also fails to meet the second prong because the excluded testimony was not crucial to his defense. There were obviously other participants in the confrontation who could have addressed the issue of whether T.G. and Henry spoke together in private. While the other witnesses could not have testified concerning what was said during a private conversation between T.G. and Henry, if any such conversation occurred, they could have testified as to whether a private conversation took place at all, which is what Henry denied in Taylor's proffer of his testimony. The ultimate issue Taylor sought to prove with Henry's testimony, that no private conversation occurred between T.G. and Henry, could easily have been proven by Gladie's testimony. Her testimony centered around the confrontation where the private conversation was alleged to have occurred. Taylor, however, chose not to ask Gladie about this matter when he called her to 854 testify. Because other witnesses could have testified to the facts Taylor offered through the proffered testimony of Henry, that proffered testimony was not crucial. Taylor's first point of error is overruled. In his second point of error, Taylor complains that The trial court erred in giving an "Allen" charge to the jury after the jurors sent out multiple notes indicating that one of the members of the jury knew the child complainant personally, that the jury was divided 11 guilty to 1 not guilty, that the person voting "not guilty" has a personal attachment with the neighborhood and one of the witnesses, and that the juror would not [sic] longer deliberate with the majority of the jury. An Allen charge is usually given in response to a specific request by the jury for additional guidance when the jury is deadlocked. See West v. State, 121 S.W.3d 95, 107 (Tex.App.-Fort Worth 2003, pet. ref'd). To prevail on a complaint that an Allen charge is coercive, an accused must show that jury coercion or misconduct likely occurred or occurred in fact. Id. An Allen charge is unduly coercive and therefore improper if it pressures jurors into reaching a particular verdict or improperly conveys the court's opinion of the case. See Arrevalo v. State, 489 S.W.2d 569, 571 (Tex.Crim.App.1973). The following time line is helpful in understanding the progression of jury notes in this case: November 18, 2004 11:44 a.m. jury deliberations began 12:30 p.m. jury excused for lunch 1:30 p.m. jury deliberations resumed 3:38 p.m. first note asking for guidance because the jury was split eight-to-four for guilty; jury instructed to continue its deliberations 4:20 p.m. second note stating that the jury was broken 10-2 for guilty and that "one of the jurors knows Christy McDonald and at least one of the other children that was in front of the courtroom yesterday";[5] jury instructed to follow the written instructions and continue its deliberations 5:30 p.m. third note stating the jury was split 11-1 for guilty; no response given and jury excused for the day November 19, 2004 9:05 a.m. jury deliberations resumed 10:12 a.m. fourth note stating the jury was split 11-1 for guilty and that the one voting not guilty "has a personal attachment with the neighborhood and one of the witnesses" and that "the juror will no longer deliberate with the majority of the jury" 10:29 a.m. Allen charge given, over Taylor's objections 11:55 a.m. jury given short break at its request 12:15 p.m. jury deliberations resumed 12:37 p.m. jury returned unanimous verdict of guilty As noted, the jury had deliberated approximately 855 two hours and forty-five minutes before reporting it was split eight to four. Approximately one hour after being instructed to continue deliberating, the jury reported it was split ten to two. The court instructed the jury to continue deliberating. Approximately one hour later, the jury reported being split eleven to one. The trial court, noting the jury was "deliberating and discussing and minds [were] being changed," sent the jury home for the day without further instructions concerning its deliberations. The next day, the jury deliberated for little more than one hour and reported that it was still split eleven to one and that the one "will no longer deliberate." Only then did the trial court give the following instruction: If the jury finds itself unable to arrive at a unanimous verdict, it will be necessary for the court to declare a mistrial and discharge the jury. The indictment will still be pending, and it is reasonable to assume that the case will be tried again before another jury at some future time. And such future jury will be empaneled in the same way this jury has been empaneled and will likely hear the same evidence which has been presented to the jury. The questions to be determined by that jury will be the same questions confronting you, and there is no reason to hope the next jury will find these questions any easier to decide than you have found them. With this additional instruction, you are requested to continue deliberations in an effort to arrive at a verdict that is acceptable to all members of the jury, if you can do so without doing violence to your conscience. Don't do violence to your conscience, but continue deliberating. Approximately two hours after receiving this charge, the jury returned into court with its unanimous verdict. On Taylor's request, the jury was polled and each of the twelve jurors affirmed that the guilty verdict was his or her individual verdict. Under these facts, we do not believe the charge given was coercive. Although not as neutral as the instruction approved by the Texas Court of Criminal Appeals in Howard v. State, 941 S.W.2d 102, 123-24 (Tex.Crim.App.1996), the Allen charge given in this case is similar to other instructions that have been reviewed and held to be noncoercive. See Arrevalo, 489 S.W.2d at 571-72; West, 121 S.W.3d at 109; Willis v. State, 761 S.W.2d 434, 437-38 (Tex.App.-Houston [14th Dist.] 1988, pet. ref'd). As in West, the charge given in the instant case does not contain the type of language courts have held to be coercive. See, e.g., Green v. United States, 309 F.2d 852, 855 (5th Cir.1962) (holding Allen charge coercive that told jury it is duty of minority to listen to argument of majority with some distrust of their own judgment because rule is that majority will have better judgment than mere minority). Although not as neutral as it could have been, the instruction in the instant case did not tell the jury that one side or the other possesses superior judgment, and did not tell the jurors to distrust their own judgment. It did tell the jurors twice not to do violence to their conscience. Because the charge given was not coercive on its face, and because nothing shows it acted to coerce the jury, we hold that Taylor has not shown that jury coercion or misconduct likely occurred or occurred in fact. His second point of error is overruled. We affirm the judgment. NOTES [1] TEX. PEN.CODE ANN. § 22.011(a)(2)(C) (Vernon Supp.2004-2005). [2] Allen v. United States, 164 U.S. 492, 501-02, 17 S. Ct. 154, 41 L. Ed. 528 (1896). [3] First names are used in this opinion where more than one person has the same last name. [4] TEX.R. EVID. 614. [5] This is the only note naming a witness with whom a juror had personal knowledge. Christy McDonald, however, is not the "child complainant," but is a witness called by Taylor. The State asserts in a footnote in its brief before this Court that "the reference to `one of the other children that was in front of the courtroom yesterday' does not refer to a witness in the case, but rather, to an otherwise unidentified person that juror saw in the hallway, who might or might not have been connected to the case in some manner."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367457/	173 S.W.3d 910 (2005) AMERICAN LIFE & ACCIDENT INSURANCE COMPANY OF KENTUCKY, INC., Appellant, v. COMMONWEALTH of Kentucky, Revenue Cabinet; Dana B. Mayton, In Her Official Capacity as Current Secretary of The Kentucky Revenue Cabinet; and, The Kentucky Board of Tax Appeals, Appellees. No. 2003-CA-001802-MR. Court of Appeals of Kentucky. October 15, 2004. Discretionary Review Denied by Supreme Court October 12, 2005. 911 Mark F. Sommer, John R. Cummins, Greenbaum, Doll & McDonald, PLLC, Louisville, KY, for appellant. Douglas M. Dowell, Division of Legal Services Finance and Administration Cabinet, Frankfort, KY, for appellees, Revenue Cabinet. Before BARBER, KNOPF, and TACKETT, Judges. 912 OPINION BARBER, Judge. At issue in this appeal is whether the two-year statute of limitations in KRS 134.590 or the four-year statute of limitations in KRS 134.580 applies to claims for refunds for taxes paid pursuant to KRS 136.320 by American Life & Accident Insurance Company of Kentucky, Inc. (American Life). American Life contends that the four-year time limit applies while the Commonwealth of Kentucky, Revenue Cabinet (Revenue Cabinet), argues that the two-year statute of limitations is the correct law to apply. American Life also maintains that no matter what statute of limitations is held appropriate, it is entitled to receive either equitable recoupment or set-off of amounts it overpaid on its tax liability for the years in question against any future tax liability it may incur. We agree with the circuit court that the two-year statute of limitations is the proper one to apply in this case, and that American Life is not entitled to equitable recoupment or set-off, thus, we affirm the circuit court's judgment. Turning to the issues raised in this appeal, whether the two-year statute of limitations or the four-year statute of limitations applies to American Life's refund claims, and whether American Life is entitled to equitable recoupment or set-off of the taxes it has paid, it is observed that there is no dispute as to the material facts. American Life is a Kentucky Life Insurance Company that pays taxes under KRS 136.320. From 1988 to 1996 American Life paid taxes in accordance with KRS 136.320 which imposes: An annual tax of seventy cents (70 cents) on each one hundred dollars ($100) of the fair cash value of "taxable capital" and one-tenth of one cent ($.001) on each one hundred dollars ($100) of the fair cash value of "taxable reserves" shall be imposed for state purposes. The tax shall be in lieu of all excise, license, occupational, or other taxes imposed by the state, city, or other taxing district, except as provided in subsections (4), (5), and (6) of this section. KRS 136.320(3).[1] The "taxable capital" is determined by deducting "taxable reserves" from "capital," less exempt intangible personal property. KRS 136.320(2)(a). Other provisions of the statute define the terms "capital" and "taxable reserves." KRS 136.320(1)(a) & 136.320(2)(b). Capital is also referred to as "the company's intangible personal property." KRS 136.320(1)(a). KRS 136.320(1)(b) requires American Life to provide to the Revenue Cabinet the fair cash value of its intangible personal property exempt from taxation by law. The Revenue Cabinet has traditionally interpreted property to be included in the calculation of intangible personal property the same as it did under KRS 132.020. KRS 132.020 and KRS 136.030 were held to be unconstitutional in St. Ledger v. Commonwealth of Kentucky, Revenue Cabinet, Ky., 942 S.W.2d 893 (1997). The specific property unconstitutionally included in the calculation of intangible personal property is not relevant to the issues in this appeal except to note that the Revenue Cabinet agrees that the items included should not have been included. 913 In 1997, based on the outcome of St. Ledger, American Life applied for a refund for a portion of the taxes it had paid under KRS 136.320 from 1988 to 1996. The Revenue Cabinet issued a refund for the tax years 1995 and 1996, but refused to refund any further tax years or to issue a credit to American Life for the years 1988 to 1994. The Revenue Cabinet's reasoning was that the two-year statute of limitations contained in KRS 134.590 rather than the four-year statute of limitations in KRS 134.580 concerning refunds of taxes applied. Further, the Revenue Cabinet maintained that American Life was not entitled to any credits for the taxes it had paid against any other taxes it may owe in the future. This was the basis of the Revenue Cabinet's motion to dismiss at the Board and the Board agreed. The circuit court also agreed with the Revenue Cabinet and this appeal followed. The questions involved in the present case deal with the construction and interpretation of statutes. In essence, American Life contends that the Board and the circuit court have misapplied the law to the facts. Therefore, our review of the circuit court's decision is de novo. Bob Hook Chevrolet Isuzu, Inc. v. Commonwealth of Kentucky, Transportation Cabinet, Ky., 983 S.W.2d 488, 490-491 (1998); Epsilon Trading Co., Inc. v. Revenue Cabinet, Ky.App., 775 S.W.2d 937, 940 (1989). The statutes at issue here, KRS 134.580 and KRS 134.590, provide for refunds from the Commonwealth for the overpayment of taxes or payment of taxes when no taxes were due. KRS 134.580, which American Life argues applies to its refund application, allows a taxpayer to receive a refund of overpaid taxes if the refund is applied for within 4 years of the date the return was to be filed or the date the money was paid into the state treasury, whichever is later. KRS 134.580(4). It excepts ad valorem taxes and taxes paid that may be held unconstitutional. KRS 134.580(2) and KRS 134.580(5). KRS 134.590 allows a refund for improperly paid ad valorem taxes and taxes assessed pursuant to a statute held unconstitutional. KRS 134.590(1). A two-year statute of limitations is imposed on those applying for such a refund. KRS 134.590(2). American Life makes two arguments that KRS 134.590 should not apply. First it contends that the tax imposed by KRS 136.320 is not an ad valorem tax and second it argues that KRS 136.320 has not been held unconstitutional. Therefore, it reasons, KRS 134.590's two-year statute of limitations is inapplicable. If the tax is, in fact, an ad valorem tax, as contended by the Revenue Cabinet, then there is no need to reach the question of whether KRS 136.320 has impliedly been held unconstitutional by the decision in St. Ledger with respect to the characterization of certain property as intangible personal property or exempt intangible personal property. American Life contends that the tax imposed by KRS 136.320 is not an ad valorem tax primarily citing to the legislative history of the statute and the fact that but for the provisions of KRS 136.320 it would be subject to various other types of taxes such as income tax and license taxes. It also notes that the statute states the tax is imposed "in lieu of" other types of taxes. The character of a tax is determined by its operation, effect, and incidents, not by the label the legislature appends in the statute. Reynolds Metal Co. v. Martin, 269 Ky. 378, 107 S.W.2d 251, 259 (1937); City of Lebanon Junction v. Cellco Partnership, Ky.App., 80 S.W.3d 761, 764 (2001); Circle "C" Coal Co., Inc. v. 914 Commonwealth, Ky.App., 628 S.W.2d 883, 885 (1981). KRS 136.320 does not specifically identify what type of tax is being imposed so we must determine whether it is an ad valorem tax from its operation and effect. An ad valorem tax is one that is levied on property at a certain rate upon its value and literally means "according to the worth." Revenue Cabinet v. Estate of Field, Ky.App., 864 S.W.2d 930, 932 (1993). See also 71 Am.Jur.2d State and Local Taxation § 18. It is commonly levied on a percentage or rate of the value of property on a regular basis. KRS 136.320 requires the valuation of certain types of property and assesses a tax annually at a rate of 70 cents on each $100.00 of the fair cash value of taxable capital and one-tenth of one cent on each $100.00 of the fair cash value of taxable reserves of American Life. Despite American Life's contention that this "capital stock tax," as the parties refer to it, is not a tax on property, or, in other words, an ad valorem tax, KRS 136.320 quite clearly imposes a tax that operates as one classically considered an ad valorem tax. We also note that in case law "capital stock" is consistently held to comprise the property of a corporation. See e.g., Luckett v. Tennessee Gas Transmission Co., Ky., 331 S.W.2d 879, 880 (1960); Spang Stores, Inc. v. Commonwealth, 468 Pa. 63, 68 360 A.2d 180, 183 (1976); Commonwealth v. New York, P. & O.R. Co., 188 Pa. 169, 189, 41 A. 594, 602 (1898). We conclude that the tax imposed by KRS 136.320 in its operation, effect, and incidents is an ad valorem property tax. Therefore, the two-year statute of limitations contained in KRS 134.590 is applicable and the Revenue Cabinet correctly denied a refund for tax years prior to 1995. Since we have held that the tax in KRS 136.320 is an ad valorem tax there is no need to address whether or not KRS 136.320 must specifically be held unconstitutional for the statute of limitations in KRS 134.590 to apply or can be impliedly held unconstitutional by the ruling in St. Ledger.[2] American Life next argues that even if the two-year statute of limitations applies, it is still entitled to receive credits for the overpayments it has made under the theories of equitable recoupment or set-off. It points out that the Revenue Cabinet has a policy, Revenue Policy 42P010, that allows credits to taxpayers who have overpaid their income tax and shows that the Revenue Cabinet views credits differently than it does refunds. The Revenue Cabinet responds that this policy is only in place for individual income taxes and that even if we hold the policy applicable to American Life, the policy itself would still bar what American Life seeks to do because it prohibits credits from one tax year being transferred to another tax year. We do not view the existence of the policy to be determinative since a review of the case law establishes that American Life is not entitled to the application of either equitable recoupment or set-off. The doctrine of equitable recoupment is in the nature of a defense. Its operation allows the taxpayer to claim recoupment for overpayment of taxes when the taxing authority institutes a suit against the taxpayer for underpayment of taxes whether or not the statute of limitations has run on claiming a refund for the overpayment. United States v. Dalm, 494 *915 U.S. 596, 605, 110 S. Ct. 1361, 1366, 108 L. Ed. 2d 548 (1990)(quoting Bull v. United States, 295 U.S. 247, 262, 55 S. Ct. 695, 700, 79 L. Ed. 1421 (1935)). Equitable recoupment only applies where "the Government has taxed a single transaction, item, or taxable event under two inconsistent theories." Dalm, 494 U.S. at 605, 110 S.Ct. at 1367, 108 L. Ed. 2d 548, n. 5. For example, if the Revenue Cabinet assessed an income tax and then determined that the same money, property or other thing of value should have been subject to estate taxes during the same taxable period, then the taxpayer could appropriately argue for the doctrine of equitable recoupment to be applied. Here, American Life wishes to have the doctrine operate so that it may take overpayments from the tax periods of, presumably 1988 to 1994, and have them applied to its future tax liabilities. As stated above, the case law does not support the application of equitable recoupment in the circumstances urged by American Life. See Dysart v. United States, 169 Ct. Cl. 276, 340 F.2d 624, 627 (1965). And, while it is arguable that Kentucky has implicitly recognized equitable recoupment (see City of Columbus v. Bank of Columbus, Ky., 122 S.W. 835, 836 (1909)), it has also been held that if equitable relief is not provided for by statute then it is unavailable. Commonwealth of Kentucky, Revenue Cabinet v. Gossum, Ky., 887 S.W.2d 329, 335 (1994). In any event, American Life is not entitled to its application here. Likewise, the doctrine of set-off is not applicable. Set-off is also in the nature of a defense but is one available to the taxing authority. Its genesis is often identified as Lewis v. Reynolds, 284 U.S. 281, 52 S. Ct. 145, 76 L. Ed. 293 (1932). In that case the United States Supreme Court held that when a taxpayer institutes an action for a refund the government may defend by asserting that the taxpayer has not, in fact, overpaid his taxes. The court stated: An overpayment must appear before refund is authorized. Although the statute of limitations may have barred the assessment and collection of any additional sum, it does not obliterate the right of the United States to retain payments already received when they do not exceed the amount which might have been properly assessed and demanded. Id. 284 U.S. at 283, 52 S.Ct. at 146. See also, Dysart, supra 169 Ct. Cl. 276, 340 F.2d at 627 (equitable recoupment not to be confused with the broader defense of lack of overpayment); Fisher v. United States, 80 F.3d 1576, 1579-1580 (Fed.Cir.1996). The fact that the Revenue Cabinet has argued for set-off for itself in another case before this Court, (see GTE South, Inc. v. Commonwealth of Kentucky, Revenue Cabinet, No.2003-CA-000773-MR, 2004 WL 690653 (Ky.App. April 2, 2004)), does not prohibit the Revenue Cabinet from maintaining in this case that the doctrine is inapplicable. The right to raise the issue of set-off is not subject to equitable considerations and may be applicable in one case but not another. Dysart, supra 169 Ct. Cl. 276, 340 F.2d at 627. In sum, we hold that the Jefferson Circuit Court correctly determined that the two-year statute of limitations applies to American Life's suit for a refund, and that the doctrines of equitable recoupment and set-off are not available to it under the facts of this case. The judgment of the circuit court is affirmed. ALL CONCUR. NOTES [1] Citations to KRS 136.320 are to the statute as it was in effect at the time American Life applied for a refund. [2] We do observe that St. Ledger stated that its original decision concerned the constitutionality of ad valorem tax provisions. St. Ledger v. Commonwealth of Kentucky Revenue Cabinet, Ky., 942 S.W.2d 893, 895 (1997).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367473/	173 S.W.3d 243 (2005) KENTUCKY BAR ASSOCIATION, Petitioner v. Robert M. BEAL, Respondent. No. 2005-SC-0620-KB. Supreme Court of Kentucky. October 20, 2005. 244 Bruce K. Davis, Executive Director, Jay R. Garrett, Kentucky Bar Association, Frankfort, KY, Counsel for Appellant. Robert Mark Beal, Louisville, KY, Counsel for Appellee. OPINION AND ORDER Robert Beal, KBA No. 03887, whose last bar roster address was P.O. Box 70051, Louisville, KY, 40270, was admitted to practice on October 25, 1982. In March 2003, the Inquiry Commission received a complaint from an individual alleging that Beal had abandoned representation of the client in the middle of adversarial proceedings. The investigation revealed that Beal had accepted representation of a client facing non-wage garnishments and possible liens against property in a collection action. At the time of retaining the client agreement, the client was already in default in answering a Non-Wage Garnishment Order and the sum of $2300 had been paid to the judgment creditor from the client's bank account. Beal filed an appropriate motion to set aside the default order, resulting in the order being set aside in part and granting additional time to respond to the original Non-Wage Garnishment Order. Beal failed to make any further appearances or filings on behalf of his client. As a result of this failure, a motion to reinstate the judgment was filed by the adverse party. Beal did not file any response to either motion. The reinstatement was granted resulting in a judgment against the client for the amount of $13,232.21. Beal failed to respond to any of these actions. Upon notification of another levy against his bank account, the client became aware of Beal's inaction. The client immediately retained new counsel and filed the complaint. On May 17, 2004, the Inquiry Commission served Beal with a copy of the Bar Complaint by certified mail. On September 3, 2004, a reminder letter was sent because no response had been received. On December 28, 2004, with no response from Beal, the Inquiry Commission filed a four count Charge against Beal. On January 26, 2005, Beal was notified by certified letter of the following four disciplinary charges filed. Count I alleged violation of SCR 3.130-1.3, failure to diligently represent his client by failing to answer a garnishment order and failure to respond to correspondence from opposing counsel. Count II alleges violation of SCR 3.130-1.4(a) and (b) for failure to keep the client reasonably informed about the status of a matter, failure to comply with reasonable requests for information, and failure to 245 adequately explain the matter to his client by failing to respond to numerous phone calls from the client and by failing to inform and explain to the client that motions to reinstate the garnishment order had been filed that could result in the client being held in contempt of the garnishment order again. Count III alleges violation of SCR 3.130-1.1 for failure to provide competent representation to his client by failure to respond to a motion and failure to answer a garnishment order. Count IV alleges violation of SCR 3.130-8.1(b) for failure to respond to a lawful demand for information from a Disciplinary Authority. Beal failed to respond to any of these charges. On January 27, 2005, Beal was suspended for non-payment of bar dues. On February 17, 2005, this Court entered an order privately reprimanding Beal for violation of SCR 3.130-8.1(b) for failure to respond. On March 11, 2005, the Board found Beal guilty on another count of SCR 3.130-8.1(b). The Board of Governors found Beal guilty on each count of the instant charge by a vote of 17-0 for each count. They concluded that Beal undertook representation of a client and then failed to timely file appropriate pleadings that caused the client to be held in contempt of the court and in default. Additionally, Beal failed to keep his client reasonably informed of the events which had transpired including the contempt findings as well as the levy of substantial sums in the client's bank account. On the matter of appropriate discipline, the Board recommended by 15 votes to suspend Beal from the practice of law for 60 days. One vote recommended a 30-day suspension and there was one abstention. Based on the foregoing, we find that Beal's lack of response to the instant charges coupled with the nature of the violations presents a cause for temporary suspension under SCR 3.165(1)(b), which provides that a suspension is appropriate where "it appears that probable cause exists to believe that an attorney's conduct poses a substantial threat of harm to his clients or to the public." THEREFORE, IT IS HEREBY ORDERED as follows: (1) Respondent, Robert M. Beal, is hereby suspended from the practice of law in the Commonwealth of Kentucky for a period of sixty (60) days. (2) In accordance with SCR 3.450 and SCR 3.480(3), respondent is directed to pay all costs associated with this disciplinary proceeding against him in the amount of $206.40, for which execution may issue from this Court upon finality of this order. (3) Pursuant to SCR 3.390, respondent is hereby ordered to provide notice to any clients, if applicable, he currently represents, of his inability to provide further legal services, to notify all courts in which he has matters of his pending suspension and to provide the Director of the Kentucky Bar Association with a copy of all such letters simultaneously to their mailing. (4) This suspension shall run immediately from the date of this Order and concurrent to any other disciplinary suspension affecting Beal. All concur. ENTERED: October 20, 2005. /s/ Joseph E. Lambert Chief Justice *246	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1726344/	970 So. 2d 826 (2007) YOUNG v. STATE. No. SC07-2157. Supreme Court of Florida. November 20, 2007. Decision without published opinion. Rev. dismissed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1750767/	952 So. 2d 697 (2007) Alphonse WILLIAMS, Carolyn Williams and William Abroms v. PIONEER FISHING & RENTAL TOOLS, INC. et al. No. 2007-C-0107. Supreme Court of Louisiana. March 16, 2007. Denied.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/471650/	793 F.2d 19 20 Fed. R. Serv. 1314 UNITED STATES of America, Appellee,v.Vincent CIAMPA, Defendant, Appellant. No. 85-1729. United States Court of Appeals,First Circuit. Argued April 8, 1986.Decided June 5, 1986. Joan Lieberman with whom John Wall and Cullen & Wall, Boston, Mass., were on brief for defendant, appellant. S. Theodore Merritt, Asst. U.S. Atty., with whom William F. Weld, U.S. Atty., Boston, Mass., was on brief for appellee. Before BOWNES, BREYER and TORRUELLA, Circuit Judges. BOWNES, Circuit Judge. 1 Defendant-appellant Vincent Ciampa appeals his jury trial conviction of possession of cocaine with intent to distribute in violation of 21 U.S.C. Sec. 841(a)(1). The issues before us fall into two categories: denial of defendant's motion to suppress and the conduct of the trial. We find no substance to any of defendant's contentions and affirm. I. THE SUPPRESSION ISSUE 2 On April 3, 1985, defendant's apartment was searched under the authority of a warrant issued by a United States Magistrate on March 29, 1985. The warrant deadline was April 7, 1985. The search was carried out by two Special Agents of the Drug Enforcement Administration, Robert Lumsden, and Thomas Doud. The evidence seized was a mason jar containing two bags of cocaine packed in rice, a triple beam balance scale, two bottles of a cutting agent used to increase the volume of cocaine, a sifter, packaging papers, other drug paraphernalia, $850 in cash, and a money market statement showing a balance of $20,640.07 as of January 1, 1985. Also seized but not introduced into evidence were a number of blue and orange pills. 3 Defendant, a reserve officer for the Saugus Police Department, returned to his apartment during the search. After being advised of his constitutional rights, defendant made some statements which the agents recounted during the trial. He said that about eight months prior he came across a guy and a girl in an automobile and saw a box with the words "Ohaus scale" on it. After questioning the couple, he seized the box, put it in his cruiser and took it home. He opened the box a couple of days later and found the mason jar and drug paraphernalia in it. Defendant said that he subsequently took the stuff out of the box, played with it and placed it in different locations in his bedroom. Defendant told the agents that he was "hanging onto" the material because "he was conducting his own investigation into cocaine trafficking" and "was trying to get Mr. Big." Agent Lumsden, with Agent Doud present, went over the items seized with defendant and asked him if he was going to stick to his story or would, for consideration, assist the DEA in making a case against the supplier. Defendant replied by saying, "No I couldn't do it. All I have is my word and a big set of balls." 4 Defendant contends that the warrant affidavit did not provide the magistrate substantial grounds for finding probable cause for three reasons: (1) much of the affidavit information was hopelessly stale and unreliable; (2) the information obtained from an informant was unreliable and should have been excluded; and (3) the affidavit contained recklessly false statements which should have been excluded. Defendant also faults the district court for refusing to hold a hearing under the rule of Franks v. Delaware, 438 U.S. 154, 98 S. Ct. 2674, 57 L. Ed. 2d 667 (1978). 5 We review the affidavit under the "totality-of-the-circumstances analysis" established in Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317, 76 L. Ed. 2d 527 (1983). Under this analysis, "an informant's 'veracity,' 'reliability,' and 'basis of knowledge' are all highly relevant in determining the value" of an informant's report. These factors should not be viewed as "entirely separate and independent requirements." They are to "be understood simply as closely intertwined issues that may usefully illuminate the commonsense practical question whether there is 'probable cause' to believe that contraband or evidence is located in a particular case." Id. at 230, 103 S.Ct. at 2328 (footnote omitted). The standard of probable cause is the probability, not a prima facie showing, of criminal activity. Id. at 235, 103 S.Ct. at 2330-2331. Courts should not subject the affidavit to de novo review and should give "great deference" to the magistrate's determination of probable cause. Id. at 236, 103 S.Ct. at 2331. This circuit has had occasion to apply Gates in a number of cases: United States v. Moscatiello, 771 F.2d 589, 596 (1st Cir.1985); United States v. White, 766 F.2d 22, 25 (1st Cir.1985); United States v. Butler, 763 F.2d 11, 14 (1st Cir.1985); United States v. Baldacchino, 762 F.2d 170, 175 (1st Cir.1985); United States v. Badessa, 752 F.2d 771, 773 (1st Cir.1985); United States v. Campbell, 732 F.2d 1017, 1019 (1st Cir.1984). 6 We turn to the affidavit which was prepared by Agent Lumsden. Paragraphs 1 and 2 state that Lumsden has been a Special DEA Agent for fifteen years, that he received extensive training as to the practices, customs, habits, and routine of cocaine dealers, and that he is familiar with the devices and materials used by cocaine dealers. 7 Paragraphs 3-14 are the core of the affidavit. In them, Lumsden details information given him by a confidential informant--CI-1. In paragraph 3, Lumsden states that the informant has consistently given him truthful and reliable information, that information provided by the informant led to a prior seizure of cocaine, and that the informant's information has "without exception" been verified by independent sources, including law enforcement officials. The affidavit, dated March 29, 1985, states that "during the last week" the informant gave Lumsden the following information: Ciampa was physically described. His telephone number and residence address were given. The informant personally observed that Ciampa, known to be a Saugus police officer, only occasionally wears a police uniform, that it appears that he is not working, that he always seems to have a large amount of money, that he drives a late model Corvette and wears a significant amount of gold jewelry. Paragraphs 4-6 of affidavit. Paragraphs 7-13 contain information given to the informant by one of Ciampa's former girl friends, Lisa Borum, who was not aware of Lumsden's relationship with the informant. Borum told the informer the following: Ciampa has been selling cocaine to her knowledge for the past nine months. Borum was a frequent visitor at Ciampa's apartment during this period and regularly saw cocaine and scales there. Ciampa frequently goes to Florida to replenish his supply of cocaine, which is all stored in his home. Ciampa himself uses cocaine regularly. One of Ciampa's customers is another reserve officer of the Saugus Police Department, Gary Mansfield. Borum was last in Ciampa's apartment about three weeks ago and at that time saw cocaine there. Ciampa's last Florida trip to obtain cocaine was either the end of the week of March 11, 1985, or the early part of the week of March 18. Borum had an argument with Ciampa on March 22, 1985, and they are no longer friendly. 8 Paragraph 14 of the affidavit recites that the informant is personally acquainted with Gary Mansfield and knows from "its" dealings with Mansfield that he regularly purchases cocaine from Ciampa. 9 Paragraphs 15-19 of the affidavit relate information that the affiant Lumsden received from Chief Inspector Howard Long of the Saugus Police Department. Long received information from a reliable informant about a year ago who told him that Ciampa, while working details in clubs in Saugus as a reserve police officer, stopped and searched club patrons, searched them and seized cocaine from them. Ciampa did not arrest the people from whom he seized the cocaine, and sold the cocaine which he had thus obtained. Long told Lumsden that his informant had given consistently reliable information in the past which had led to arrests and seizures of evidence, including narcotics. Based on his personal information and knowledge, Long told Lumsden: that Ciampa is a reserve police officer for the Town of Saugus but rarely works as such; that in the past Ciampa worked paid details at clubs, but recently has refused most offers to work for extra pay; Mansfield is also a Saugus reserve police officer; Ciampa also carries large quantities of cash, drives late model Corvettes, wears a significant amount of gold jewelry; and Ciampa frequently travels to Florida on trips of short duration. 10 Paragraphs 18-22 of the affidavit establish the phone number for Ciampa's apartment, the street number of his apartment, and his date of birth, January 3, 1954. 11 Paragraphs 23-25 of the affidavit contain information related to the affiant by Deputy Superintendent Edward Walsh of the Boston Police Department. Walsh told Lumsden that about eleven months ago a reliable informant who has consistently given truthful information to the Boston police told him that Ciampa was obtaining large quantities of cocaine from Arman Barouk, a Boston jeweler. On two occasions thereafter, Walsh himself saw a car registered to Ciampa in the vicinity of Barouk's jewelry store. According to Walsh's informant, Ciampa met with Barouk on both of these occasions to obtain cocaine. Walsh arrested Barouk about three months prior to his conversation with Lumsden and seized a quantity of cocaine. 12 Defendant's argument that "much of the information" contained in the affidavit was "hopelessly stale and unreliable" focuses on the information given to the affiant by Chief Inspector Long and Deputy Superintendent Walsh. This ignores the detailed facts given to the affiant's informant by defendant's former girl friend, Lisa Borum. We agree with the district court that, even if the Long and Walsh information were deleted from the affidavit, it still established a basis for a finding of probable cause. Following the totality-of-the-circumstances test, we find that the Long and Walsh information corroborates and substantiates the detailed information supplied by Lumsden's informant. 13 Contrary to what defendant urges, we find that the facts in paragraphs 4-14 supplied by informant CI-1 are reliable and sustain a finding of probable cause. There can be no objection to hearsay "if the informant is shown to be reliable and there is a disclosed, reliable basis for his information." United States v. Asselin, 775 F.2d 445, 446 (1st Cir.1985). See also Illinois v. Gates, 462 U.S. at 241-42, 103 S.Ct. at 2333-2334; Aguilar v. Texas, 378 U.S. 108, 114, 84 S. Ct. 1509, 1514, 12 L. Ed. 2d 723 (1964); Jones v. United States, 362 U.S. 257, 269, 80 S. Ct. 725, 735, 4 L. Ed. 2d 697 (1960). This was not a "bare bones" affidavit with only conclusory statements affording the magistrate no basis for issuing a warrant. Gates, 462 U.S. at 239, 103 S.Ct. at 2332. It recited specific facts given a proven reliable informant by a former girl friend of the defendant. Defendant has attacked the character, credibility and reliability of Lisa Borum, but has produced nothing to show that she knew that the information she gave the informant would be relayed to a DEA agent. Prior to the breakup between her and Ciampa on March 22, 1985, Borum was certainly in a position to observe Ciampa's personal activities. The facts she recounted to the informant, the informant's own personal observations, and the personal knowledge and observations of Chief Inspector Long and Deputy Superintendent Walsh, all add up to a totality of circumstances giving the magistrate a substantial basis for finding that probable cause existed. Gates, 462 U.S. at 238-39, 103 S.Ct. at 2332. 14 Finally, defendant contends that the affidavit contains recklessly false statements. Defendant asserts that Arman Barouk never owned a jewelry store, that his father was involved with one which has been closed since March 1, 1985. He, therefore, argues that the affidavit statement that "Walsh saw a car that was registered to Ciampa in the vicinity of Barouk's jewelery shop" was false. Another basis for claiming that the statement was false was that the only car registered to defendant was driven up from Florida on March 10, 1985. There are, however, no dates given in the affidavit as to when Walsh made the observation. It could have been made anytime between the day on which Walsh spoke to his informant, eleven months prior to March 29, 1985, and the day on which Walsh gave the information to the affiant, March 29. Defendant has cast some doubts on the accuracy of the affidavit statement, but has not shown that it was either false or reckless. 15 Defendant also claims that paragraph 18 of the affidavit was false and reckless: "Long added that Ciampa frequently travels to Florida. These trips are usually short in duration." Defendant claims that his trips were infrequent and of long duration. But Long's information was the same as that given the informant by defendant's girl friend. There is no basis whatever for finding that the statements in paragraph 18 were either false or reckless. 16 The other statements that defendant claims were false were those attributed to Lisa Borum. Specifically, he claims that the statements in paragraph 13 that she and he had an argument on March 22, 1985, and were no longer friendly were false. Defendant asserts that he consoled her and treated her wounds after she put her hand through a window after a fight with another woman on that date. Defendant's memorandum to the district court in support of his motion to suppress and the attached exhibits from which he mainly relies for his false and reckless statements claim indicate pretty clearly that Borum and defendant had a stormy relationship punctuated by quarrels and one lawsuit. We find nothing in any of the memos and exhibits filed by defendant that would sustain a finding that the statements based on the information were false or reckless. The most that can be said is that on two occasions, February 11 and March 22, 1985, Lisa Borum acted as a lover scorned. 17 It follows from our analysis that defendant has not established the requisites for a Franks hearing. He has not made "a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit,...." Franks v. Delaware, 438 U.S. at 155-56, 98 S.Ct. at 2676-77. 18 The motion to suppress and the motion for a Franks evidentiary hearing were properly denied. Since the warrant was valid, we need not decide whether United States v. Leon, 468 U.S. 897, 104 S. Ct. 3405, 82 L. Ed. 2d 677 (1984) applies. II. THE CONDUCT OF THE TRIAL 19 Defendant's claim of errors as to the conduct of the trial fall into four categories: (1) the district court's conduct towards defense counsel; (2) evidentiary rulings; (3) the district court's failure to instruct the jury or strike certain remarks made by the prosecution in closing argument; and (4) the jury instructions on lesser included offense. A. The Conduct of the Trial Judge 20 Defendant contends that he was deprived of a fair trial because the trial judge interrupted defense counsel's opening twice, disparaged his evidence in open court and at the bench, assisted the prosecutor with evidentiary objections and presentation of evidence, and unduly hastened the progress of the trial. 21 It is true that the judge twice interrupted defense counsel's opening statement, but, we think, justifiably so. The first interruption occurred when counsel started to use a chart to illustrate where defendant was when he allegedly seized the cocaine and drug paraphernalia subsequently found in his apartment. The location of the automobile from which the defendant claims he took the cocaine and related material was of only collateral relevance. Clearly, it was a waste of time for defense counsel to attempt to use a chart to establish the location of the automobile vis-a-vis other places in the vicinity. It was not the location of the automobile that was important, but whether the jury believed defendant's story as to when and how he obtained the incriminating material. Moreover, the chart had not been marked in evidence, nor had defense counsel advised the court beforehand of his intention to use it. The second interruption came after a lengthy bench conference during which the judge, in the face of objection and argument by defense counsel, explained why counsel could not use the chart and asked that he finish his opening in "a most expedious way." Counsel then addressed the jury: "Members of the jury, I have been instructed ---." at which point the judge interrupted him and stated: "Well that is not a fact. You tell the jury what it is that you expect the evidence to show that is relevant to the issues involved in this case. That's the purpose of an opening statement." Defense counsel then completed his opening statement without the use of the diagram. We find nothing untoward in the judge's interruption of counsel's opening. As the governor of the trial, the judge has the responsibility of ensuring its proper conduct and determining questions of law. Glasser v. United States, 315 U.S. 60, 82, 62 S. Ct. 457, 470, 86 L. Ed. 680 (1942); Quercia v. United States, 289 U.S. 466, 469, 53 S. Ct. 698, 699, 77 L. Ed. 1321 (1933). There was nothing said or done by the judge that impinged on the defendant's right to a fair trial. 22 There is no merit at all in defendant's contentions that the judge disparaged the defendant's evidence before the jury and at bench conference and that he assisted the prosecutor with evidentiary objections and presentation of evidence. This conclusion is based on a careful reading of the transcript. Defendant has attempted to convert adverse rulings on the admissibility of evidence into improper trial conduct. We note that most of the evidence which defendant offered was admitted even though a great deal of it was of dubious relevance. 23 Nor was the entire trial "permeated by an atmosphere of judicial haste directed at defense counsel" as defendant claims. The judge explained patiently why his schedule made it desirable that the case go to the jury on Thursday afternoon. The trial timetable was set, in part at least, on defense counsel's estimate as to how long his presentation of evidence would take. It is also to be noted that the court adjourned early (before 4:00 p.m.) on the third day of trial partially because of defense counsel's request for some time to think about a ruling excluding evidence of defendant's state of mind relative to his relationship with his former girl friend, Lisa Borum. Finally, we note that, although defense counsel had been warned that the case would be submitted to the jury on Thursday afternoon, he asked for a delay until Friday because his requests were not yet prepared. 24 Our reading of the record reveals an attempt by defense counsel to defend a woefully weak case by confusing the issues through the introduction of and attempts to introduce evidence of dubious and collateral relevance. We do not condemn defense counsel's trial tactics. We realize that he was under strain because of pending trials in other courts. That and the burden of defending a well nigh indefensible case may be an explanation for his trial tactics and refusal to accept the evidentiary rulings of the court without protracted argument. It does not excuse, however, his raising on appeal the claim that the judge's conduct deprived his client of a fair and impartial trial. A careful reading of the record reveals no basis whatever for this assertion. B. The Evidentiary Rulings 25 Defendant assigns as errors the exclusion of a rent receipt establishing the true value of a ring found in his apartment, rent receipts reflecting the cost of his apartment, and documents relating to his sale of automobiles in Florida. This evidence was offered to show that defendant lived modestly and had legitimate sources of income. The evidence was properly excluded because it was cumulative. There was already evidence in the record that the ring, which was imitation gold, cost $20.00. There was no dispute that the defendant paid $150 a month in rent for the basement apartment. Defendant testified extensively about the sales and purchases of automobiles in Florida by himself and his father. This evidence was also undisputed, as was the fact that a number of automobiles he purchased were registered in the name of his sister. We also note that evidence about defendant's life-style came into the case through statements made by defendant to the DEA agents, the cross-examination of the agents and direct testimony by the defendant. The government never claimed that defendant lived in a high, wide and handsome manner as many drug dealers do. The life-style issue was a straw man created by defense counsel and then knocked down by him. 26 Defendant also claims it was error for the court to exclude testimony by witnesses explaining the innocent nature of the pills seized by the government at the defendant's apartment. The pill evidence issue was another straw man. The government did not introduce the pills into evidence or advert to them in any way during the presentation of its case. Defendant offered a witness to testify as to the nature and recommended use of the pills. This testimony was quite properly excluded on the grounds that the pills had nothing to do with the charges against defendant. The court carefully explained to the jury why the testimony and the pills were not admitted into evidence and instructed it "as a matter of law that the presence of pills in this case has nothing to do with the charges brought, and you are to draw no inference from the fact that they're even offered." Despite this ruling, defendant was allowed to testify that he obtained diet pills from the witness whose testimony was excluded, that he obtained Dietrix from one of his sisters, and that his brother-in-law gave him Valium pills which he used to help him sleep during the day when he was on the night shift. Clearly, the judge's evidentiary rulings were well within his discretion. United States v. Kepreos, 759 F.2d 961, 964 (1st Cir.), cert. denied, --- U.S. ----, 106 S. Ct. 227, 88 L. Ed. 2d 227 (1985). 27 C. The Ruling on the Prosecutor's Remarks During Final Argument 28 During final argument the prosecutor stated: 29 Ladies and gentlemen, you know, the only thing about this case that reminded me a little bit about law school, when I went there, is that I learned one Latin thing in law school. And that was about it. It was called res ipsa loquitur. And that means the thing speaks for itself. And I suggest to you-- 30 Defendant objected on the ground that this was a proposition of civil law and it would be improper for the jury to convict on the basis of res ipsa loquitur. We agree with the district court that the prosecutor was merely using a figure of speech to make a point. After the objection was overruled, the prosecutor continued: "And I suggest to you that when you evaluate the evidence, you evaluate the story that the defendant has given on the stand, and the stories he gave to the agents, that all of that will speak for itself." Defendant again objected and the objection was overruled. 31 We perceive no error in the court's ruling and his refusal to instruct the jury immediately on the burden of proof. The jury was instructed at the outset of the trial on the presumption of innocence and that the government had to prove both possession and intent beyond a reasonable doubt. The court's final instruction to the jury, which carefully explained the presumption of innocence and the government's burden of proof, came immediately after the close of the prosecutor's argument. It was not error for the district court not to refer directly to the res ipsa loquitur comments in its final instructions. 32 D. The Instruction on Lesser Included Offense 33 At the request of defendant, not the government, the court gave a lesser included offense instruction. Defendant now complains because the court did not follow its requested instruction. 34 In United States v. Beltran, 761 F.2d 1, 11 (1st Cir.1985), we reiterated: 35 The refusal to give a particular instruction is not subject to objection if the charge given adequately covers the theory of defense. United States v. Morris, 700 F.2d 427, 433 (1st Cir.1983); United States v. Skinner, 667 F.2d 1306, 1310 (9th Cir.1982). The court need not give instructions in the precise form or language requested by the defendant. Morris, supra, 700 F.2d at 433; United States v. Winter, 663 F.2d 1120, 1146 (1st Cir.1981). 36 Defendant's objection to the instruction is that it tells the jury to first decide whether the government has proven possession with intent to distribute and if they find that the three elements of this crime have not been proven, to then go on to determine whether the defendant was guilty of the lesser included offense of simple possession. This, defendant contends, is a "logical progression" instruction that is forbidden by United States v. Spock, 416 F.2d 165 (1st Cir.1969). Spock is completely inapposite. What we condemned in Spock was the submission of ten special interrogatories to the jury in addition to the general issue of guilty or not guilty. Id. at 180-83. Spock in no way touches upon a lesser included offense instruction. We have read the lesser included offense instruction carefully and find that it is correct and follows the generally accepted standard. See Federal Judicial Center, Pattern Criminal Jury Instructions No. 48 (1982); Devitt and Blackman, 1 Federal Jury Practice and Instructions Sec. 18.05 (1977). The charge also adequately covered the theory of defense. 37 We have considered the other objections raised by defendant either directly or inferentially and also find them meritless. 38 Affirmed.	01-03-2023	08-23-2011
https://www.courtlistener.com/api/rest/v3/opinions/2265771/	341 Pa. Super. 273 (1985) 491 A.2d 258 COMMONWEALTH of Pennsylvania v. William C. MUELLER, Appellant. Supreme Court of Pennsylvania. Argued August 30, 1984. Filed April 4, 1985. 275 Joseph S. Sabadish, Assistant Public Defender, Pittsburgh, for appellant. Kemal A. Mericli, Assistant District Attorney, Pittsburgh, for Commonwealth, appellee. Before JOHNSON, CERCONE and HESTER, JJ. CERCONE, Judge: Appellant, William C. Mueller, was found guilty in a jury trial on March 2, 1982 of third degree murder and violation of the Uniform Firearms Act. On December 14, 1982, he was sentenced to a term of ten to twenty years imprisonment and a consecutive term of imprisonment of two and one-half to five years. On March 12, 1982, counsel for appellant filed a Motion for New Trial/Arrest of Judgment. A brief in support of said Motion was filed on July 15, 1982 in which appellant requested leave to assert such additional reasons in support of the motion as might be revealed from a review of the trial transcript. The Commonwealth's Brief in Opposition to defendant's Motion was filed on November 19, 1982 and the Motion was denied by Order on that same date. Following the judgment of sentence, the lower court entered an order granting appellant's trial counsel leave of court to withdraw his appearance and appointing the Office of the Public Defender to represent defendant on appeal. Nonetheless, on January 3, 1983, appellant filed a pro se Notice of Appeal and a Motion to Proceed in Forma Pauperis 276 in which he requested court appointed counsel.[1] On January 12, 1983, the Office of the Public Defender filed a Notice of Appeal. On January 5, 1983, the trial judge ordered appellant to file a brief and concise statement of matters to be complained of on appeal, pursuant to Rule 1925(b),[2] Pennsylvania Rules of Appellate Procedure. On January 26, 1983, the Public Defender's Office filed a Petition for Extension of Time for filing aforesaid brief averring that the trial transcripts had not yet been transcribed and filed by the court reporters.[3] The lower court granted that request, ordering an extension until ten days after the transcripts were filed. On March 14, 1983, the trial judge filed a one page Opinion noting appellant's failure to comply with his earlier order. He further noted that he had made an independent examination of the record, but was unable to determine the exact nature of appellant's claims on appeal and that, therefore, he was unable to discuss them. Thereafter, pursuant to appellant's request, the Public Defender petitioned this court to withdraw as counsel on April 22, 1983. That petition was denied. 277 On August 4, 1983, the Office of the Public Defender filed a Concise Statement of Matters Complained of Upon Appeal and on November 7, 1983 filed a brief to this court on behalf of the appellant. On November 9, 1983, the Public Defender's Office filed a second petition to withdraw. It was granted on January 12, 1984. The matter was remanded to the Court of Common Pleas of Allegheny County where present counsel was appointed, entered his appearance, and filed a brief on behalf of appellant. Appellant raises ten issues on appeal. However, as we are remanding this case to the trial court for further disposition consistent with this opinion, we need not decide all of the issues raised at this time. Appellant's tenth issue on appeal is whether "[t]he trial court erred in filing a boiler plate, one page, form opinion, which failed to address itself to the issues raised in post-trial motions by privately retained counsel and which incorrectly cited the alleged failure of the Public Defender's Office to comply with Pa.R.A.P. 1925(b) as authority for its action?" Brief for appellant at 46. The procedural issue we must decide is whether we should exercise the discretion given us by Rule 1925(b) to hold that by his failure to file a statement of matters complained of by the date set by the lower court, appellant has waived the arguments he now makes to us. See Commonwealth v. Silver, 499 Pa. 228, 238, 452 A.2d 1328, 1333 (1982) ("waiver provision of Rule 1925(b) is clearly discretionary" and "is properly invoked only where failure to file a statement or omission from a statement of issues raised on appeal defeats effective appellate review"). The discretion given by this rule is equitable in nature and must be exercised with great care. In deciding whether to hold an objection waived, we must examine the failure to comply with Rule 1925 in the context of the entire case. Commonwealth v. Johnson, 309 Pa. Super. 367, 371, 455 A.2d 654, 656 (1982). We 278 must always ask how serious was the failure. We must balance the failure to comply against the purpose served by the rule. Id. The purpose of the rule is to provide the appellate court with the lower court's reasoning in support of the order on appeal. To further that purpose, subsection (b) allows the lower court to request further delineation or explanation of issues raised by the appellant to enable it to respond to those issues. All of the issues raised in the appeal sub judice had been previously raised by the appellant in his Motion for a New Trial/Arrest of Judgment with the exception of those alleging ineffective assistance of counsel and prosecutorial misconduct. We find that appellant's claim of prosecutorial misconduct is waived as it was not preserved by a timely post-trial motion. Appellant's claims of ineffective assistance of counsel are not waived as we do not expect trial counsel to raise his own ineffectiveness in post-trial motions. Based on all the facts and circumstances in this case, it would be inequitable for us to find that appellant had waived the remaining issues before us. The case here is very serious. A sentence of ten to twenty years has been imposed. A denial of appellant's claims under these circumstances would be unconscionable. Furthermore, it appears that appellate counsel's failure to strictly comply with the lower court's order was influenced by a variety of other factors involved. As previously mentioned, most of the issues currently on appeal had been previously raised and briefed before the trial court in a motion for new trial. While it is perfectly proper for that court to grant or deny such motion by way of order, an opinion in support of that order is required when the lower court receives a notice of appeal. Commonwealth v. Koch, 288 Pa. Super. 290, 296, 431 A.2d 1052 (1981). We recognize the fact that appellant's Notice of Appeal did not specifically state that the same issues previously raised were on appeal and we do not condone the Public Defender's failure to strictly comply 279 with the lower court's order. On the other hand, these facts undermine the lower court's refusal to prepare an opinion explaining its reasoning for such order stating, "[we] are uncertain as to the basis of the appeal. We have made an independent examination of the record but are unable to assume or presume the nature of appellant's objections and are, therefore, unable to discuss them." Slip op. at 1. The record discloses other facts which bear upon the extent of the appellant's failure to comply with Rule 1925(b). The appellant's trial counsel was granted leave to withdraw as counsel after post-trial motions were disposed of and the public defender's office was appointed to represent appellant on appeal. It became apparent almost immediately that appellant was not satisfied with the public defender's professional services when he filed a pro se Notice of Appeal. Finally, we note that there were only twelve working days between the day all transcripts were filed and the day the lower court filed its one page opinion noting appellant's failure to comply with his Rule 1925 order. Based on the very serious nature of the verdict and sentence, that is hardly sufficient time for the public defender to sift through the hundreds of pages of transcript and prepare a statement of issues on appeal. Based on all of these circumstances, we think that the appellant has the right to a full discussion of the issues on appeal. However, the case is not ripe for appellate review. This case has been submitted to us for decision. We have neither the benefit of oral argument at trial nor any opinion from the trial court discussing the issues presented. Many issues on appeal require either a finding of fact or challenge the discretion of the trial court. Without that court's discussion we would be forced to exceed our scope of review in order to dispose of these issues. Accordingly, we hereby remand this case to the trial court with directions that an opinion be promptly prepared 280 and returned to us pursuant to Pa.R.A.P. 1925.[4] Jurisdiction is not relinquished. NOTES [1] Appellant's petition to proceed in forma pauperis was granted by Order of this court on January 23, 1983. [2] Rule 1925. Opinion in Support of Order. (a) General rule. Upon receipt of the notice of appeal the judge who entered the order appealed from, if the reasons for the order do not already appear of record, shall forthwith file of record at least a brief statement, in the form of an opinion, of the reasons for the order, or for the rulings or other matters complained of, or shall specify in writing the place in the record where such reasons may be found. (b) Direction to file statement of matters complained of. If the lower court is uncertain as to the basis for the appeal, the lower court may by order direct the appellant forthwith to file of record in the lower court and serve on the trial judge a concise statement of the matters complained of on the appeal. A failure to comply with such direction may be considered by the appellate court as a waiver of all objections to the order, ruling or other matter complained of. [3] Upon review of the record, we note that the trial transcripts had been filed with the Clerk of Courts prior to January 24, 1983 but that the transcript of the Sentencing hearing was not filed until February 23, 1983. [4] Note Commonwealth v. Hicks, 328 Pa. Super. 233, 476 A.2d 978 (1984), in which this court followed the same procedure due to the complicated and discretionary nature of the numerous issues on appeal.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265808/	491 A.2d 515 (1985) Robin G. LYNCH, Appellant, v. MERIDIAN HILL STUDIO APTS., INC., Margaret K. Scott and Wilson L. Scott, Appellees. No. 84-277. District of Columbia Court of Appeals. Argued November 27, 1984. Decided April 25, 1985. 516 Jeff A. Sacks, for appellant. Donald J. Caulfield, Washington, D.C., for appellee Meridian Hill Studio Apts., Inc. Morris R. Battino, Washington, D.C., with whom Christopher E. Hassell, Washington, D.C. was on brief, for appellees Margaret K. Scott and Wilson L. Scott. 517 Before FERREN, BELSON and ROGERS, Associate Judges. FERREN, Associate Judge: This is an appeal from the denial of plaintiff-appellant's motion to vacate summary judgments for defendant-appellees in an action to recover for property damage from a fire. The trial court had granted the summary judgments because of appellant's failure to file timely oppositions. The motions judge subsequently denied without a hearing the motion to vacate, ruling that counsel's proffered reason for the defaulthis own careless failure to observe the 10-day time requirement of Super.Ct.Civ.R. 12-I (e)was not "mistake, inadvertence, surprise, or excusable neglect" within the meaning of Super.Ct.Civ.R. 60(b)(1). We conclude that the judge did not abuse his discretion in denying the motion on the ground advanced by counsel. We also conclude, sua sponte, that although the trial court erred in granting the judgments simply because the motions were unopposed, a review of the pleadings, affidavits, and other papers (as required when no opposition has been filed) makes clear that appellees are entitled to summary judgment. Accordingly, we affirm. I. Appellant Robin Lynch filed a tort action alleging damage to personal property in her apartment caused by heat, smoke, and vapor from a fire in the neighboring apartment of appellees Margaret and Wilson Scott. Appellant claimed that the Scotts and appellee Meridian Hill Studio Apartments, Inc. (the cooperative association holding legal title to the Scotts' unit) were jointly and individually liable for negligence and fraud in maintaining a defective party wall that caused the damaging smoke to spread into her apartment.[1] The Scotts and Meridian Hill filed motions for summary judgment on October 25 and 26, 1983, respectively. Appellant did not file a timely opposition to either motion.[2] The trial court granted both motions, as unopposed, on December 9, 1983. On December 19, 1983, appellant filed a motion to vacate under Super.Ct.Civ.R. 60(b)(1) and appended belated oppositions to the motions for summary judgment. The motion was denied without a hearing. Appellant filed a timely appeal. Appellant stated in the motion to vacate, and urges on appeal, that the failure to file timely oppositions was attributable to the mistake, inadvertence, and excusable neglect of youthful counsel, who was handling his first court case. Counsel mistakenly thought that, under Super.Ct.Civ.R. 56(c), a hearing would be scheduled on the summary judgment motions as a matter of course, and that he would receive at least 10 days notice of that hearing as the event triggering his responsibility to file oppositions. He failed to notice that, under Super.Ct.Civ.R. 12-Iwhich is cross-referenced in Rule 56an opposition must be filed within 10 days of service of a summary judgment motion. See supra note 2. II. The grant or denial of a motion to vacate "is within the discretion of the trial court," and "its determination will be disturbed on appeal only upon a showing of abuse of discretion." Joseph v. Parekh, 351 A.2d 204, 205 (D.C.1976) (citations omitted). We agree with the trial court's implicit 518 finding that the extenuating circumstances claimed by appellant's counsel did not satisfy any requirement of Rule 60(b)(1). That provision of Rule 60 is designed to provide relief for a mistake which could not have been avoided through due diligence of counsel. See Kasachkoff v. Ross H. Finn Co., 408 A.2d 993 (D.C.1979) (relief granted for counsel's reasonable, mistaken belief that parties had reached a settlement). The courts accordingly will treat a mistake of fact with greater leniency than a mistake of law, see id. at 995, since knowledge of the law is ordinarily imputed to counsel. For example, in Wallace v. Warehouse Employees Union No. 730, 482 A.2d 801 (D.C.1984), which addressed a motion for relief from summary judgment brought under Super.Ct.Civ.R. 59(e), we recently wrote that "a mistake of law" will "rarely warrant relief." Id. at 804 & n. 10.[3] Similarly, in In re Estate of Starr, 443 A.2d 533 (D.C.1982), we said that if a practice governing the probate court's award of brokerage commissions was "well-known as a standard court practice" (we remanded for a determination on this point), then counsel's ignorance of that practice and consequent failure to protect his client's right to a commission was no basis for relief under Rule 60(b)(1). Id. at 537. Counsel's "failure to ascertain adequately the applicable court procedures and to so advise appellant is not excusable neglect and may not be the type of mistake warranting relief from the order." Id. (citations omitted). A number of federal courts also have held that ignorance of court rules and procedures cannot be "excusable neglect" under the corresponding federal rule, Fed. R.Civ.P. 60(b).[4] For example, in Quality Prefabrication v. Daniel J. Keating Co., 675 F.2d 77 (3d Cir.1982), counsel's error was strikingly similar to the one in this case. Counsel failed to respond to a motion to compel production of documents in "the mistaken belief that the motion would be heard unopposed." Id. at 79 n. 3. Actually, a local court rule required counsel to file a brief in opposition within ten days after service of the motion. The court of appeals declinedas we doto decide that failure to understand or observe court rules is per se inexcusable neglect; but it held that the district court had not abused its discretion in determining, on the facts presented, that the neglect was not excusable.[5] 519 We reach our decision mindful that a mistake of law, under some circumstances, has furnished the basis for post-judgment relief.[6] We also are aware that when appellate courts have sustained the denial of Rule 60(b) relief, counsel's error has often been more prejudicial to the opposing party than in this case.[7] Nonetheless, such exceptional situations do not derogate from the general principle, applicable here, that an attorney's mistake of law will not serve as basis for Rule 60(b)(1) relief. As a consequence, counsel's mistake must usually be imputed to, and thus bind, the client. See Link v. Wabash Railroad Co., 370 U.S. 626, 633-34, 82 S. Ct. 1386, 1390, 8 L. Ed. 2d 734 (1962); Railway Express Agency, Inc. v. Hill, 250 A.2d 923, 926 (D.C.1969). There is, however, one exception. Counsel's conduct will not be imputed to the client, and thus relief will be available under Rule 60(b)(1), when that conduct "is outrageously in violation of either his express instructions or his implicit duty to devote reasonable efforts in representing his client," provided that the client himself is diligent in pursuing the claim. Railway Express Agency, 250 A.2d at 926 (citations omitted) (emphasis added).[8] On the facts here, however, counsel's ignorance of a filing deadline was not the kind of outrageous 520 attorney conduct that warrants relief for the client. Accordingly, the motions judge did not abuse his discretion in denying the motion to vacate. III. In view of the "outrageous" attorney conduct exception, we pause to discuss why it is appropriate to impute an attorney's mistake of law to the client under most circumstances. The "dominant purpose" of Rule 60(b), while permitting relief when warranted, is "to `buttress the finality of judgments.'" Railway Express Agency, 250 A.2d at 925 (citation omitted); see also Household Finance Corp. v. Frye, 445 A.2d 991, 992-93 (D.C.1982); Manos v. Fickenscher, 62 A.2d 791, 792 (D.C.1948); 11 C. WRIGHT & A. MILLER, supra, at § 2857. The rule achieves this purpose by providing for postjudgment relief only under exceptional circumstances. Clark v. Moler, 418 A.2d 1039, 1042 (D.C.1980). However sympathetic we may be to the circumstances of this appeal, the imputation of acts and omissions of counsel to the client "is necessary for the orderly conduct of litigation." Railway Express Agency, 250 A.2d at 926. To give a party in appellant's position a second chance would increase the burden on other litigants in the system, as well as on our already overtaxed courts. As the court stated in Ohliger v. United States, 308 F.2d 667, 667-68 (2d Cir.1962): "Counsel's carelessness cannot be excused by this Court if it is to perform its obligation to other litigants whose cases are necessarily delayed by such conduct." In short, as a general proposition, the client, not the adversary or the court, must bear responsibility for retaining counsel who failed to understand the rules of court. The client's relief, if any is due, must come from the attorney. We should add that denial of a plaintiff's motion for Rule 60(b)(1) relief from summary judgment in favor of a defendant is typically less prejudicial than a refusal to grant a defendant's motion to vacate a default judgment. A default judgment typically gives a plaintiff the benefit of an altogether unlitigated claim, see Manos, 62 A.2d at 793; Super.Ct.Civ.R. 55, whereas an unopposed summary judgment for a defendant at least presupposes that the trial court has "review[ed] the pleadings and other papers to determine whether the moving party is legally entitled to judgment." Milton Properties, Inc. v. Newby, 456 A.2d 349, 354 (D.C.1983); see Super.Ct. Civ.R. 56(e). IV. This would end the matter but for an issue which, in the interest of fairness, we address sua sponte. Recently this court, following Milton Properties, Inc., stated that because the motions judge had "granted the renewed motion for summary judgment simply because `no opposition ... [was] filed,'" without reviewing the pleadings and other papers of record, "he accordingly erred." Kurth v. Dobricky, 487 A.2d 220, 224 (D.C.1985). The same is true here. In granting summary judgment for appellees, the trial court's two orders merely recited, as the controlling ground, "there being no opposition thereto." This does not suffice to justify the granting of unopposed motions for summary judgment. Therefore, while the motions judge acted within his discretion in denying Rule 60(b)(1) relief on the proffered ground of counsel's mistake of law, it is also important to confirm, on the basis of the pleadings, affidavits, and other papers, whether the trial court's summary judgment orders themselves are "appropriate." Super.Ct. Civ.R. 56(e).[9] 521 Although Kurth and Milton Properties teach that the court may not automatically grant an unopposed summary judgment motion, Rule 56(e) does permit the court to accept the moving party's verified version of the facts if it is not countered with specificity in a timely fashion. See Milton Properties, 456 A.2d at 354. On the basis of the affidavits submitted by appellees Margaret and Wilson Scott, the trial court would have correctly concluded that the Scotts' actions in permitting continued use of a party wall which did not comply with code requirements did not proximately cause appellant's injuries.[10] The affidavit submitted by appellee Meridian Hill establishes that it had no independent responsibility for the allegedly defective party wall and, further, that even if the Scotts had been liable, the facts do not support an agency relationship, or any other, warranting imputation of a liability to Meridian Hill. V. We conclude that the motions judge did not abuse his discretion under Rule 60(b)(1) in refusing to vacate summary judgment for appellees on the ground that appellant's counsel was ignorant of trial court rules. We also conclude, following Kurth and Milton Properties, Inc., that the pleadings, affidavits, and other papers show appellees were entitled to judgment. Affirmed. NOTES [1] Appellant rented her three-story apartment from the Scotts, who lived in the apartment below appellant's. The two apartments once had comprised a single residential unit. They were separated by a foyer-area wall that allegedly did not meet building code requirements. [2] Oppositions were due by November 7 and 8, 1983, respectively. See Super.Ct.Civ.R. 12-I(e) ("statement of opposing points and authorities shall be filed and served within ten days" of motion or within "such further time as the Court may grant"); Super.Ct.Civ.R. 12-I(k) (party opposing summary judgment may file statement of material facts as to which there is no genuine issue "within ten days after service of the motion upon him"); Super.Ct.Civ.R. 6(e) (three days added to filing period if party served by mail). [3] In this connection, Wallace cited Household Fin. Corp. v. Frye, 445 A.2d 991, 993 (D.C.1982) ("It is not clear that ignorance of the law would be a ground for granting relief under any part of Rule 60(b)") (dictum) and Graves v. Nationwide Mut. Ins. Co., 151 A.2d 258, 261 (D.C.1959) (no relief under Rule 60(b)(1) when counsel claimed "surprise" at opponent's reliance on rule of court; counsel is charged with knowledge of trial court rules). [4] We construe the rules of the Superior Court in light of the corresponding federal rules, unless such interpretation is contrary to binding precedent. Wallace, 482 A.2d at 807 (citing Goldkind v. Snider Bros., Inc., 467 A.2d 468, 472 (D.C. 1983) and Campbell v. United States, 295 A.2d 498, 501 (D.C.1972)). See also Sellars v. United States, 401 A.2d 974, 978 (D.C.1979); Taylor v. Washington Hosp. Center, 407 A.2d 585, 590 & n. 4 (D.C.1979), cert. denied, 446 U.S. 921, 100 S. Ct. 1857, 64 L. Ed. 2d 275 (1980); D.C.Code § 11-946 (1981). [5] Accord Clarke v. Burkle, 570 F.2d 824, 831 (8th Cir.1978) (relief from judgment should not be granted under 60(b) simply because judgment may have resulted from counsel's mistake of law) (dictum); Hoffman v. Celebrezze, 405 F.2d 833 (8th Cir.1969) (no 60(b)(1) relief for unlawful inclusion of interest provision in consent judgment against United States where government was fully apprised and should have challenged on appeal); Ohliger v. United States, 308 F.2d 667 (2d Cir.1962) (ignorance of court rules did not excuse under 60(b) counsel's failure to respond to interrogatories); Hulson v. Atchison T. & S.F. Ry. Co., 289 F.2d 726, 730 (7th Cir.) (plaintiffs' failure to file timely motion for judgment n.o.v., because of mistaken belief that agreement between counsel could extend filing deadline, was no ground for relief), cert. denied, 368 U.S. 835, 82 S. Ct. 61, 7 L. Ed. 2d 36 (1961); Nugent v. Yellow Cab Co., 295 F.2d 794, 796 (7th Cir.1961) (invalid agreement to extend time for filing new trial motion, resulting from ignorance of rules, no basis for relief), cert. denied, 369 U.S. 828, 82 S. Ct. 844, 7 L. Ed. 2d 793 (1962); Benton v. Vinson, Elkins, Weems & Searls, 255 F.2d 299, 301 (2d Cir.) (experienced counsel's ignorance of statute of limitations not 60(b) "excusable neglect"), cert. denied, 358 U.S. 885, 79 S. Ct. 123, 3 L. Ed. 2d 113 (1958); Howard v. Burlington Northern, Inc., 75 F.R.D. 644, 646 (D.Or.1977) (counsel's ignorance of law resulting in failure to file timely new trial motion no excuse under 60(b)), aff'd mem., 588 F.2d 842 (9th Cir.1978); Sears, Sucsy & Co. v. Insurance Co. of N.Am., 392 F. Supp. 398, 412 (N.D.Ill.1974) (no 60(b)(1) relief for counsel's negligent failure to file affidavit in support of opposition to summary judgment motion); Lapiczak v. Zaist, 54 F.R.D. 546, 547 (D.Vt.1972) (counsel's ignorance of law resulting in failure to file timely new trial motion no excuse under 60(b)); In re Wright, 247 F. Supp. 648, 659 (E.D.Mo.1965) (counsel's ignorance of procedures regarding discharge in bankruptcy does not warrant 60(b) relief); Williams v. Five Platters, Inc., 510 F.2d 963 (C.C.P.A.1975) (no 60(b)(1) excuse for failure to file brief in response to summary judgment motion). See generally 7 J. MOORE & J. LUCAS, MOORE'S FEDERAL PRACTICE ¶60.22[2] (2d ed.1985); 11 C. WRIGHT & A. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2858 (1st ed. 1973). [6] See, e.g., Manos v. Fickenscher, 62 A.2d 791 (D.C.1948) (appellant's negligent reading of summons which resulted in default judgment against him was ground for relief where he acted with "reasonable diligence" after notice of default); Griffin v. Kennedy, 120 U.S.App.D.C. 104, 106-07, 344 F.2d 198, 200-01 (1965) (counsel's "honest belief" that pretrial stipulation did not deprive court of jurisdiction over clients was ground for Rule 60(b) relief; "counsel's ill-advised and artlessly executed effort to seek summary judgment should not deprive his clients of their day in court"); A.F. Dormeyer Co. v. M.J. Sales & Distrib. Co., 461 F.2d 40 (7th Cir.1972) (failure to file copy of answer with court because of mistaken reading of summons and inexperience with local court rules was "excusable neglect" where counsel timely filed answer with opposing counsel and promptly moved to vacate after notice of default judgment). [7] See, e.g., Central Operating Co. v. Utility Workers, 491 F.2d 245, 252-53 (4th Cir.1974) (counsel waited four months after notice of default judgment to seek relief); Hale v. Ralston Purina Co., 432 F.2d 156 (8th Cir.1970) (counsel's initial error regarding deadline for filing claims compounded by failure to file Rule 60(b) motion within one year); Dalrymple v. Pittsburgh Consolidation Coal Co., 24 F.R.D. 260, 262 (W.D.Pa. 1959) (counsel completely failed to prepare for case on court docket for three years); Williams v. Five Platters, Inc., 510 F.2d 963, 963-64 (C.C.P. A.1975) (counsel's failure to file brief in response to summary judgment motion was third default in same case). [8] Thus, an attorney's gross negligence will not ordinarily be imputed to the client. See Clark v. Moler, 418 A.2d 1039, 1042 (D.C.1980) (attorney's complete failure to defend case, when he told client he "would take care of it," is an exceptional circumstance warranting Rule 60(b) relief). Even gross negligence, however, will be imputed to a client who had reason to be aware of it and took no remedial action. See Joseph v. Parekh, 351 A.2d 204, 206 (D.C.1976) (client was college professor who was present at every stage of proceedings and aware of counsel's derelictions). Similarly, Rule 60(b)(1) relief is not available to a party who, though unaware of counsel's gross negligence, does not keep in touch with counsel to assure that the lawsuit is being pursued. See Bond v. Wilson, 398 A.2d 21, 24-25 (D.C.1979) (citations omitted) (client failed to contact attorney for a year). [9] Super.Ct.Civ.R. 56(e) provides in relevant part: When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him. [10] Appellees Margaret and Wilson Scott submitted affidavits of two firefighters who stated that even if the separating wall had been a fire wall meeting code requirements, heavy smoke and vapors would still have filtered through the walls and ceilings, causing damage. Appellant argues that these affidavits constitute opinion evidence not admissible without proper qualification of the affiants as experts. The qualification of experts is a matter for the trial court's discretion. See, e.g., United States v. Lopez, 543 F.2d 1156 (5th Cir.1976) (trial court's qualification of expert upheld; dictum that contrary ruling would also have been upheld), cert. denied, 429 U.S. 1111, 97 S. Ct. 1150, 51 L. Ed. 2d 566 (1977). Assuming appellant correctly characterized the affidavits as expert opinion, we perceive no basis why this court, absent timely opposition before the trial court, should not consider them now in evaluating the question of summary judgment. These affidavits clearly show that the only claimed negligencea defective party walldid not proximately cause the damage to appellant's property.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265782/	69 F. Supp. 71 (1946) FALWELL et al. v. UNITED STATES et al. Civ. No. 168. District Court, W. D. Virginia, at Lynchburg. December 21, 1946. Judgment Affirmed March 31, 1947. W. G. Burnette and John D. Easley, both of Lynchburg, Va., for plaintiffs. 72 Wendell Berge, Asst. Atty. Gen., and Edward Dumbauld, Sp. Asst., to the Atty. Gen., for the United States. Daniel W. Knowlton, Chief Counsel, and Nelson Thomas, Atty., both of Washington, D. C., for the Interstate Commerce Commission. J. Ninian Beall, of Washington, D. C., for Brooks Transportation Co., and Lucian H. Cocke, Jr., of Roanoke, Va., for N. & W. Ry. Co. et al., intervenors. Before DOBIE, Circuit Judge, and PAUL and BARKSDALE, District Judges. Judgment Affirmed March 31, 1947. See 67 S. Ct. 1087. PAUL, District Judge. The plaintiffs in this suit are Falwell Fast Freight, Inc., a Virginia corporation engaged in business as a common carrier of property in interstate commerce by motor vehicle, with its headquarters at Lynchburg, Va., and C. W. Falwell, Jr., owner of a controlling interest in the corporation. The controversy arises out of the desire and attempt of the plaintiffs to purchase certain operating rights of two other carriers engaged in similar businesses, these being Evans Line, Inc., of Roanoke, Va. (hereinafter referred to as Evans) and W. B. Draper, doing business as Draper Motor Service, also of Roanoke. The object of the present suit is to set aside and enjoin the enforcement of an order entered by the Interstate Commerce Commission under date of January 14, 1946, in so far as that order denied to plaintiffs authority to acquire certain of the operating rights of Draper. The background of facts upon which resort is had to this court is as follows: Prior to July 31, 1944, Evans was the owner of operating rights over regular routes extending from Roanoke west to Bluefield, West Virginia, and thence north to Charleston and Point Pleasant in that state, including various intermediate points. Draper was owner of a certificate authorizing operations over irregular routes between Roanoke on the one hand and, on the other, Lynchburg, Norfolk, Richmond and other points in Virginia as well as to various points in other states, north and south. Falwell, the plaintiff here, held a certificate authorizing operations over a regular route between Lynchburg and New York, via Washington, Baltimore and Philadelphia and serving intermediate points; and over irregular routes to specified points and areas in Virginia and various other states. As usual, the certificates held by all of these parties contained limitations or exceptions as to the nature of the commodities to be hauled. In this situation an agreement was entered into on July 19, 1944, between Falwell and Evans (which was in financial difficulties) whereby Falwell agreed to purchase all of the operating rights of Evans. Falwell also made an agreement with Draper, the date of which does not appear, to purchase from Draper that portion of the latter's rights which authorized operations over irregular routes between Roanoke and Lynchburg. Having made these agreements, the carrying out of which was subject to the approval of the Interstate Commerce Commission, Falwell, Draper and Evans, on July 31, 1944, filed their joint application before the Commission seeking authority under Sect. 5 of the Interstate Commerce Act, 49 U.S.C.A. § 5, to consummate the transfer to Falwell of the rights described. Shortly after this application was filed the Commission, on August 26, 1944, under authority of Sect. 210a (b) of the Interstate Commerce Act, 49 U.S.C.A. § 310a (b), granted approval for temporary leases by Falwell of the rights sought to be acquired, these leases to expire February 21, 1945. Thereafter, and after notice given, a hearing upon the application for approval of the purchases was held before an examiner of the Commission at Roanoke, Va., on January 25, 1945. The notice for this hearing specifically stated that, since the application contained no request for issuance of operating authority greater than the sum of the existing operating rights of the parties, no request for issuance of any enlarged operating authority would be entertained at the hearing. At this hearing Brooks Transportation Company, a motor vehicle carrier operating within the territory covered by the rights involved in the application, appeared as a 73 protestant. Certain railroad carriers also appeared in opposition to the application. At this hearing evidence, both oral and documentary, was received, including that offered by the plaintiffs. Thereafter, on February 22, 1945, Division 4 of the Commission entered a report and order in which it granted the application in full, with one of the commissioners dissenting. Inasmuch as plaintiffs have laid stress upon certain terms of the order of February 22, 1945, it seems well to quote those provisions which they have so emphasized and upon which they, in large part, rest their present contentions. Omitting the heading, preliminary recitations and portions of the order not pertinent to this controversy, this order reads: "It is ordered, That purchase by Falwell Fast Freight, Incorporated, of Lynchburg, Va., of certain operating rights of W. B. Draper, doing business as Draper Motor Service, of Roanoke, Va., and of operating rights of Evans Line, Inc., also of Roanoke, and acquisition of control of said operating rights by C. W. Falwell, Jr., also of Lynchburg, through said purchase be, and they are hereby, approved and authorized, subject to the terms and conditions set out in the findings in said report. "It is further ordered, That petition of Falwell Fast Freight, Incorporated, requesting extension of its present lease authority beyond February 21, 1945, be, and it is hereby, denied. "It is further ordered, That, if the parties to the transactions herein authorized desire to consummate same, they shall (1) notify this Commission, in writing, of the intended consummation date, (2) promptly take such steps as will insure compliance with sections 215 and 217 of the Interstate Commerce Act, and with rules, regulations, and requirements prescribed thereunder, and (3) confirm in writing to the Commission, immediately after consummation, the date on which consummation has actually taken place. "It is further ordered, That unless the authority herein granted is exercised within 30 days from the date hereof, this order shall be of no further force and effect, with respect to the authority not exercised." On the same day (Feb. 22, 1945) that the above order was issued, counsel for Falwell was notified by a telegram from the Commission's office of the favorable action of Division 4; and later on the same day received another telegram (apparently sent in response to one from him) repeating the information contained in the first, with the additional information that the Commission had been advised by the protestant that a petition for reconsideration would be filed. On March 9, 1945, the protestant, Brooks Transportation Company, filed a petition for reconsideration of the report and order of Division 4 and after consideration of this petition the full Commission, by an order of May 7, 1945, ordered that the report and order entered by Division 4 on February 22, 1945, be reopened for reconsideration. In the meanwhile, by letter dated March 15, 1945, which was after the petition for reconsideration had been filed but before it had been acted on, Falwell informed the Commission that his purchase of the Draper and Evans rights had been consummated on February 22, 1945. This was apparently in compliance with that provision of the order of February 22, 1945, which directed that the Commission be notified of the date when the sale was consummated. However, Falwell's letter recognized the existence of the petition for reconsideration filed by Brooks Transportation Company by stating that final payment to Evans had been deferred until a decision by the Commission on the petition for reconsideration. Following its order of May 7, 1945, granting reconsideration the matter was considered by the full Commission until January 14, 1946. During this time, (on July 31, 1945) the plaintiffs asked leave to enlarge their application so as to pray for authorization for regular-route operations between Roanoke and Lynchburg but this motion was promptly denied. (August 11, 1946.) As a result of the reconsideration by the full Commission it entered a report and order on January 14, 1946, in which it ordered that so much of the order 74 of February 22, 1945 (the order of Division 4) as related to the purchase by Falwell of the Evans rights should remain in full force and effect, but that the application by Falwell to purchase the Draper rights was denied. In other words, the action of the full Commission was to approve the purchase by Falwell of the Evans rights but to disapprove the purchase of the Draper rights. Upon entry of this order of January 14, 1946, the Commission directed that the Draper rights, which plaintiffs had been operating under the temporary lease and under the order of Division 4, be returned to Draper as soon as possible. Later, upon application of the plaintiffs, the Commission refused a rehearing but did by several successive orders grant extensions of the time when the order of January 14, 1946, should become effective. While the last of these extensions was effective the plaintiffs instituted this suit. The purpose of the suit is to set aside and annul the Commission's order of January 14, 1946, and the sole matter in controversy relates to the refusal of the Commission to permit Falwell to acquire that portion of the rights owned by Draper which authorize operations over irregular routes between Roanoke and Lynchburg. Discussion In support of their prayer that the order complained of be set aside and its enforcement enjoined the plaintiffs urge three principal reasons. None of them, in our opinion, justify the court in granting the relief prayed for. (1) In the first place it is contended that the report and order of Division 4, of February 22, 1945, constitute in fact and in substance a certificate of public convenience and necessity, which is not subject to review or reconsideration but which may be terminated only in accordance with Sect. 212(a) of the Act, 49 U.S.C.A. § 312(a), providing procedure for the suspension or revocation of certificates, permits and licenses. The argument advanced in support of this view is somewhat involved but careful consideration of it does not permit us to accept its conclusion. The petition filed by the plaintiffs before the Commission was not an application for a certificate of public convenience and necessity under Sects. 206 and 207 of the Act, 49 U.S.C.A. §§ 306 and 307. On the contrary it was an application for approval by the Commission of the proposed purchase by and transfer to one operator of rights then held by another. This is provided for by Sect. 5(2) (a), of the Act, 49 U.S.C.A. § 5(2) (a), wherein such purchases are made lawful "With the approval and authorization of the Commission, as provided in subdivision b". Subdivision b provides that authority for such proposed transactions shall be sought by an application filed before the Commission and provides for the ensuing procedure thereon. The petition filed by the plaintiffs stated that they were proceeding under these provisions of the statute. So far as appears from the record before us, the matter followed the usual and prescribed course. A hearing was had before an examiner at which evidence was taken and at which other interested parties appeared as protestants. Acting presumably upon the strength of the examiner's report and its own consideration of the facts Division 4 approved the application of the plaintiffs as set out in its order of February 22, 1945. But this was not a final or irrevocable action. Sect 17 of the Act, 49 U.S.C.A. § 17, which, among other things, deals with Commission procedure and the division of the members of the Commission into Divisions provides (in Sect. 17(6) that any decision, order or requirement made by the Commission, a division, an individual Commissioner or a board shall, on application therefor, be subject to rehearing or reconsideration under such rules as the Commission may determine. And Sect. 17(7) provides that after such rehearing or reconsideration of the decision or order of a division or of an individual Commissioner, the Commission may reverse, change or modify the same. The action of Division 4 was always, by the clear terms of the statute, subject to reconsideration by the full Commission, provided application was made therefor 75 within the time prescribed by the rules of the Commission which was done. The plaintiffs not only were affected with notice of the terms of the statute but, on the same day that Division 4 entered its order, they received actual notice that an application for reconsideration was contemplated. It is true that the order of Division 4 was definite in its terms of approval of the proposed transaction and in its directions to the plaintiffs. It had to be; for the reason that if no reconsideration of it were to be sought, it would have embodied the terms on which the plaintiffs were to proceed and with which they would have had to comply. But any action which the plaintiffs took toward carrying out the provisions of the order was, as they well knew, subject to what might happen if, as a result of reconsideration by the full Commission, the order was reversed or modified. In view of the plain terms of the statute and the evident regularity of the procedure in compliance therewith, we see no justification for the contention that the order of February 22, 1945, was in effect a certificate of public convenience and necessity terminable only by a proceeding under Sect. 212(a) of the Act. The plaintiffs contend that they consummated the purchase of the Draper rights on February 22, 1945, and the implied argument is that having relied on the order of Division 4 and complied with it, it would be inequitable to permit disturbance of this completed transaction. It will be noted that this date is that on which the report and order of Division 4 was handed down. It may be that the parties were able to complete their transaction within these few hours. Inasmuch as plaintiff had been for some time operating the Draper rights under lease it is possible that the transition from lease to ownership was merely nominal. On the other hand the notice to the Commission of this consummation of purchase was not until March 15th, about a week after the formal application for reconsideration had been filed by the protestant; and it may be that plaintiffs thought their position would be strengthened by showing a completed transaction ante-dating the application for reconsideration. Whichever be the case, it is clear that the plaintiffs could not oust the jurisdiction of the Commission to grant reconsideration merely by hastening to comply with the order of Division 4 before the protestant could file its application for reconsideration. To permit this would be to nullify the provisions of the statute. It is to be noted also that when this matter was before the full Commission on reconsideration the plaintiffs, so far as appears from the record before us, at no time objected to the validity of the reconsideration or contended that the order of Division 4 occupied the status of a certificate. This argument appears for the first time in this court. 2. The second and third objections advanced against the Commission's order of January 14, 1946, seem to be closely related and may be discussed together. The action of the full Commission in denying to plaintiffs the acquisition of the Draper rights was based on a finding which was in substance that during the period of their lease and thereafter the plaintiffs had been utilizing those rights for the conduct of regular-route operations between Lynchburg and Roanoke; that the plaintiffs intended to use the Draper rights in this manner and for this purpose and that they would not and could not be used in any other way; that if the Draper rights were unified with the already existing regular route operating rights of plaintiffs out of Lynchburg, it would be impossible for plaintiffs to operate irregular-route operations between Lynchburg and Roanoke of the nature contemplated in the original grant to Draper. It found that the purpose of the proposed purchase and its necessary result would be that the plaintiffs would conduct regular-route operations between Lynchburg and Roanoke which at Lynchburg would link up with its existing regular routes out of that city to the north and east and at Roanoke would link up with the regular routes to be acquired from Evans; thereby giving to the plaintiffs continuous regular-route operations from points north and east of Lynchburg to points west and north of Roanoke and passing through both cities. And, after pointing out that the 76 rights of Draper were radial irregular-route operating rights which had been confirmed to him under the "grandfather" clause, the Commission stated that, "This portion (i. e. that portion sought by plaintiffs) of the radial rights of Draper to and from Roanoke should continue to be a part of the whole, as confirmed under the `grandfather' clause, if there is to be any possibility of preserving the irregular-route nature of the service authorized." For these reasons, the more detailed recital of which appears in the Commission's report but need not be repeated here, the Commission found that the purchase by plaintiff of the described operating rights of Draper was not shown to be consistent with the public interest. These findings of the Commission are first assailed on the ground that they are erroneous and unfounded and are arbitrary and capricious. So far as this assault relates to the Commission's determination on factual matters developed before it, a sufficient answer lies in the fact that the plaintiffs have not introduced before us any part of the transcript of the evidence taken in the matter and upon which the Commission reached its conclusions. In the absence of knowledge of what this evidence was we have no basis for saying that the findings of the Commission were arbitrary, capricious or without evidence to support them. This is too well settled to permit argument. See Mississippi Valley Barge Co. v. United States, 292 U.S. 282, 286, 54 S. Ct. 692, 693, 78 L. Ed. 1260, where it is stated: "The settled rule is that the findings of the Commission may not be assailed upon appeal in the absence of the evidence upon which they were made. * . The findings in the report being thus accepted as true, there is left only the inquiry whether they give support to the conclusion." Nevertheless it may be said that even the present record gives confirmation of the Commission's finding that the proposed purchase would result in the plaintiffs establishing regular-route operations between Lynchburg and Roanoke and was for that purpose. There seems to be no dispute as to that. The plaintiffs have not denied that during the lease from Draper, and since, they have operated these rights in the manner found by the Commission; nor do they aver any intention to operate them otherwise. Indeed the nature of the actual and intended use of the Draper rights by plaintiffs is evidenced by the fact that they sought both before Division 4 and before the full Commission to amend their application so as to request issuance of a certificate to cover specifically the manner in which they had been operating, i. e. a certificate authorizing regular-route operations. And they go further in their tacit admissions of their intentions by arguing before us that the linking of their existing regular-route operations through purchase of the Draper rights would be in the public interest because it would enable them to conduct regular-route operations from New York through Lynchburg and Roanoke and beyond, without interchange. It seems, however, that plaintiffs' real reason for asserting that the Commission has acted arbitrarily and in an erroneous conception of the law is embodied in their contention that even if plaintiffs intend to operate the Draper rights in the manner found by the Commission the Commission is without power to deny them the right to make this purchase. The nature of this contention is best shown by quotations from plaintiffs' brief, wherein it is stated: "A carrier over regular routes means `one operating over specified routes between fixed termini as set forth in the carriers certificate' and a carrier over irregular routes means `one operating within a specified and defined territory as set forth in the carriers certificate but not over a specified route or routes between fixed termini'. Neither the Act nor the regulations of the Commission * * makes any distinction between an irregular-route carrier and a regular-route carrier except as to the routes over which the operation is conducted. The terms `regular' and `irregular' have no reference whatever * * * to any particular schedule of service, quantity of service or quality of service to be rendered by a regular-route carrier and an irregular-route carrier. * * . A regular-route carrier is limited 77 in its operation to specified highways, but an irregular-route carrier has no limitations whatever as that carrier is privileged to use any and all highways between the points or within the territory specified in the carrier's certificate and an irregular-route carrier may use the same highway whenever it desires to do so, as neither the Act nor the regulations of the Commission * * * prevents the frequent or infrequent use of any given highway." This argument, as we understand it, amounts in the end to this: That a certificate for irregular-route operations over a specified territory carries no restrictions as to the highways (or routes) over which the carrier may operate within the territory or between the points specified in his certificate; and that the carrier is likewise under no prescription or restriction as to schedules of service or quantity or quality of service. And that, therefore, the holder of a certificate for irregular-route operations may, if he choose, utilize his rights or any part thereof to establish regularly scheduled operations over any highway within his territory or in other words, to conduct his operations in the form of regular-route operations between any points covered by his certificate. And this, even if by so doing he parallels the service rendered by any number of other carriers holding regular-route certificates for operations between the same points. With this contention we cannot agree. To do so would grant to holders of irregular-route certificates a free hand to operate as they chose; to operate irregularly over such parts of the territory as they might choose and to establish regular-route operations where they so desired. An irregular-route certificate would be authority to conduct either or both forms of operation at the carrier's choice. It would nullify the distinction between regular and irregular route carriers and would nullify the power of the Commission to establish and maintain comprehensive and efficient service adjusted to the public need and free from destructive competition between carriers. The Act itself, Sect. 204(b), 49 U.S.C.A. 304(b), empowers the Commission to establish classifications of motor carriers, and pursuant to this authority the Commission has adopted definitions of the several classes of service, including: "An irregular-route radial-service carrier is any person who or which undertakes to transport property * * * over irregular routes from a fixed base point or points to points or places located within such radial area as shall have been fixed and authorized by the Interstate Commerce Commission in a certificate of public convenience and necessity. * * * or from any point within such radial area to such carrier's fixed base point or points." It was operations of the sort described in the above definition which Draper had been conducting prior to June 1, 1935, and he procured a certificate for their continuance by virtue of the so-called "grandfather clause." The Commission has also defined regular-route service as being that "which undertakes to transport property * * * between fixed termini and over a regular route or routes". This is further classified as being a scheduled or a non-scheduled service, dependent upon whether the service is upon a fixed schedule or at intermittent intervals. But the essential feature of any regular-route operations is that it shall be between fixed termini and over a regular route. That the Commission has authority to make the above classifications and that they are proper distinctions in classes of service which will be recognized has been well settled by the decisions of the courts. See United States v. Maher, 307 U.S. 148, 59 S. Ct. 768, 83 L. Ed. 1162; United States v. Carolina Carriers Corp., 315 U.S. 475, 62 S. Ct. 722, 86 L. Ed. 971. In United States v. Maher, supra, as in the instant case, the contention of the carrier was in substantial effect that the right to operate irregularly within a specified territory covered the right, at the will of the carrier, to operate between fixed termini and over regular routes within such territory. The Commission held that 78 the services were of different nature and the Supreme Court, upholding this finding and giving recognition to the propriety of the difference in classification, said [307 U.S. 148, 59 S. Ct. 771]: "In differentiating between operations over the `route or routes' for which an application under the `grandfather clause' is made as against operations `within the territory', Congress plainly adopted the familiar distinction between `any-where-for-hire' bus operations over irregular routes and regular route bus operations between fixed termini." In the instant case the report of the Commission states: "The radial irregular-route operating rights of Draper were confirmed under the `grandfather clause'. The service rendered, and which provided the basis for such confirmation, was a-call-on-demand nonscheduled service to and from Roanoke and the numerous specified points, including an occasional interchange shipment to or from Lynchburg. * * * * * "The use to which vendee would put these irregular-route operating rights would bear little resemblance to that which provided the basis for the confirmation of Lynchburg as one of the points served to and from Roanoke under the `grandfather clause'. Without passing upon protestant's argument that irregular-route rights between these points were confirmed in Draper under the `grandfather clause' in error, in our opinion it would be impossible for vendee to conduct irregular-route operations between these two specified points after the unification with its regular-route operations. This portion of the radial rights of Draper to and from Roanoke should be a part of the whole, as confirmed under the `grandfather clause', if there is to be any possibility of preserving the irregular-route nature of the service authorized." That it was within the functions of the Commission to make these findings there can be no doubt and there is nothing before us to indicate that its conclusions were arbitrary, capricious or without support in the evidence before it. The plaintiffs supplement such arguments as have been heretofore indicated by a further one to the effect that the Commission's findings as to the intended use of the Draper rights by plaintiffs is an assumption; and that under Sect. 5 of the Act the Commission is required to approve or disapprove the transfer of operating rights as they find them "without assuming whether the carrier can or will operate the acquired rights in a lawful or unlawful way." That only after the consolidation has been effected can the lawfulness of the ensuing consolidated operation be questioned. So far as the Commission's views as to the manner in which plaintiff would use the Draper rights are charged with being mere assumptions, this argument has little force in face of the fact that it is not denied that ever since plaintiffs leased these rights they have operated them in the manner found and that they desire and intend to so use them if permitted to purchase them, and that they have made at least two attempts to procure from the Commission formal approval of such use. This argument is no doubt founded on the Old Colony Motor Lines, Inc. case, 39 M.C.C. 143, (cited in the report of Division 4). In that case an application was made for the purchase of certain irregular-route rights in the Boston and New York areas. The Commission expressed the opinion that, while the vendee intended to continue irregular-route operations in these areas it also intended to utilize the rights to be acquired to establish what amounted to a regular-route service between New York and Boston, which latter service would not be within the scope of the rights acquired. The Commission stated, however, that the vendee was entitled to the presumption that he would operate within the scope of his authority and until he had conducted his unified operations for sufficient length of time to enable a determination of whether he was or was not doing so, any conclusion of an unlawful operation would be premature. It therefore approved the purchase, but with the specific provision that it was not to be *79 construed as approving regular-route operations under the acquired irregular-route rights. The difference between the conclusions in the Old Colony case and the instant one is that in the former the Commission, while recognizing the vendee's intentions, believed that, in the absence of any evidence of any unlawful operations actually conducted, the vendee was entitled to the presumption that it would operate within the scope of its authority. In the instant case the Commission has found that the plaintiffs, for an extensive period and ever since leasing the Draper rights, have operated in an unlawful manner, that they intend to continue to do so, and that it is impossible for them to operate otherwise. Any seeming inconsistency in the Commission's holdings in these two cases is no more than the difference between taking one course of action on evidence which is definite, conclusive and undisputed and the refusal to take similar action where the evidence is not conclusive. The difference between a case where the court believes that doubts exist to the benefit of which a party is entitled and which serve to restrain a judgment adverse to him, and a case where there are no doubts to serve in his favor. It is not uncommon for cases having analogous facts to have differing outcomes depending on the nature and the degree of conclusiveness of the evidence. Sect. 5(2) of the Act, 49 U.S.C.A. § 5(2), dealing with the mergers, leases, purchases, etc., of operating rights specifically provides that they shall be subject to the approval of the Commission. Obviously this approval must be given before the proposed merger or purchase is effected. Nor is it a perfunctory approval which must be given as a mere matter of form in all cases. It clearly is not contemplated, as plaintiffs apparently urge, that the Commission upon request must give approval to any contemplated transfer and wait until after it has been effected before deciding whether it results in a lawful operation and one consistent with the public interest. There is nothing in the record before us which indicates that the Commission failed to give a fair and thoughtful consideration to plaintiffs' application or which supports the assertion that its findings were arbitrary, irrational and contrary to law. The questions passed on were peculiarly within the function of the Commission and we are unable to see wherein there has been any abuse in the exercise of that discretion which has been entrusted to it by the terms of the statute. It follows that the complaint should be dismissed and it will be so ordered.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265804/	491 A.2d 1013 (1985) In re Andrew L. and Helen K. ORZEL. No. 83-479. Supreme Court of Vermont. January 25, 1985. Reargument Denied March 4, 1985. 1014 Lorentz and Lorentz, Rutland, for petitioners-appellants. John J. Easton, Jr., Atty. Gen., and Merideth Wright, Asst. Atty. Gen., Montpelier, for amicus curiae Environmental Bd. Before HILL, UNDERWOOD, PECK and GIBSON, JJ., and LARROW, J. (Ret.), Specially Assigned. HILL, Justice. The petitioners, Andrew and Helen Orzel, appeal the decision in two declaratory rulings issued by the State of Vermont Environmental Board (Board). Based on the findings of the Board in its rulings, we affirm its decision. In 1973, petitioners purchased a ten-acre piece of property in the Town of Rutland. This property, which adjoins other property owned by the petitioners, is commonly known as "the gravel pit." The gravel pit had been used intermittently by previous owners for the extraction of gravel. In 1978, the petitioners sold, and had removed, approximately 40,000 cubic yards of gravel from the pit. At that time, an environmental investigator visited the site and determined no permit was required, under the provisions of 10 V.S.A. chap. 151 (hereinafter referred to as Act 250), for that operation. The following year, in 1979, another buyer proposed to remove gravel from the pit. This time, an employee of the Agency of Environmental Conservation advised the petitioners that an Act 250 permit would be required for the proposed operation. In October of 1982, petitioners petitioned the Board for a declaratory ruling on whether or not an Act 250 permit is required for the removal of gravel from the gravel pit. Petitioners alleged that a permit was not required for two reasons. First, they alleged that the operation was a pre-existing development in operation before the effective date of Act 250 and therefore, under 10 V.S.A. § 6081(b), no permit was required for its continued operation. Second, the petitioners alleged that because an environmental inspector told them in 1978 that no permit was needed, the agency is estopped from later requiring a permit for the gravel pit's continued operation. Following a hearing, the Board issued findings of facts, conclusions of law, and an order. Based on its findings, the Board concluded that it was unable to determine whether a permit was required. It stated the evidence presented was insufficient to establish whether the gravel pit was a commercial operation in existence as of the enactment of Act 250, or whether it was a substantial change to a pre-existing operation. 1015 The Board also concluded that the representations of the inspector in 1978 did not preclude requiring petitioners to obtain a permit for future operations. The Board then ordered the petitioners to obtain an Act 250 permit, or request review by the District # 1 Environmental Coordinator when they have developed more precise information on the elements, scope and nature of the intended operation. The petitioners again petitioned the Board for a declaratory ruling as to whether an Act 250 permit is required for the operation of their gravel pit. Specifically, they requested the Board to make three determinations: first, whether the gravel pit operation pre-dated the enactment of Act 250; second, under what circumstances and/or conditions the gravel pit could be operated without requiring a permit; and third, whether a permit would have been required for the proposed 1979 excavation. The Board reviewed this request and agreed to reconsider its earlier decision, and to accept additional information for use in reviewing the matter. The only additional information received was two pages from the Town of Rutland Annual Report indicating the purchase of gravel in 1965 and 1967 from previous owners of the gravel pit. The Board found that this information lacked probative value in light of the evidence already in the record. It then denied further consideration of the matter and decided that its prior findings of fact, its conclusions of law and its order constituted its final decision on petitioners' declaratory ruling request. I. Petitioners' first two claims on appeal pertain to the Board's failure to determine whether an Act 250 permit is required for continued operation of the petitioners' gravel pit. Petitioners make no objection on appeal to the Board's findings of fact. They are, therefore, controlling in this case. Petitioners, however, do argue that the findings do not support the conclusions of law reached by the Board. On appeal, an agency's conclusions of law will be upheld if they are fairly and reasonably supported by the findings of fact. In re McGrath, 138 Vt. 77, 82, 411 A.2d 1362, 1365 (1980). The petitioners argue that the Board's conclusion that it was unable to determine whether there was an operation in existence as of the enactment of Act 250 is not supported by its findings. We agree with the petitioners. The findings state that the previous owners of the property intermittently had sand and gravel removed from the gravel pit. The findings state that this was done before the enactment of Act 250. No evidence presented, nor finding made, indicates that the operations, although intermittent, were abandoned at any time. Consequently, as the petitioners allege, based on the findings of the Board, it must be concluded that there was a commercial operation in existence as of the enactment of Act 250. This conclusion, however, is not sufficient to preclude the requiring of a permit for continued operation. Title 10 V.S.A. § 6081(b) states that, although pre-existing operations are exempted from the requirement of having a permit, such exemption does not apply "to any substantial change in such excepted subdivision or development." It must therefore be determined whether the continued operation of the gravel pit constitutes a substantial change in the development. One of the Board's findings of fact stated: "Petitioners have no specific proposal for operation at this time." Based on this finding, the Board concluded that it was unable to determine whether or not there is a substantial change to a pre-existing operation. The Board's finding that there are no specific plans for the continued operation of the gravel pit fairly, and reasonably supports its conclusion that it cannot be determined whether future operation will constitute a substantial change. The Board cannot determine whether some activity constitutes a substantial change to a pre-existing operation unless it is made aware of what that activity is. The 1016 Board's conclusion regarding substantial change is therefore upheld. Petitioners also argue that it was error for the Board to have made its determination regarding substantial change because the petitioners had no notice that substantial change would be an issue at the hearing. The statute is clear in setting forth when a permit is required, and when an operation is exempt. 10 V.S.A. § 6081. Petitioners were represented by counsel throughout the proceedings. They requested the Board to make a declaratory ruling. It is their responsibility to know the issues which are necessary to address in order for the Board to make the requested ruling. The petitioners were also given a second opportunity to present evidence to the Board regarding the permit requirement. In light of the Board's conclusions in the first ruling, the petitioners had notice that more information regarding their proposed plans would be needed before the Board could issue a ruling. There is no valid reason why they didn't provide the Board with such information. In the petitioners' second request for a declaratory ruling, they asked the Board to issue guidelines and tell them under what circumstances the gravel pit could be operated without requiring a permit. The Board failed to do this, and the petitioners allege that the Board's failure was error. It is not the Board's function to outline for petitioners activities which would or would not require permits. The purpose of a declaratory ruling is to determine the applicability of a statutory provision, rule or order. Environmental Board Rules 3(D). Its purpose is distinct from the Board's rulemaking function. In a prior declaratory ruling the Board itself stated that a request for a declaratory ruling, regarding the establishment of guidelines, raises a question of general applicability which should be addressed in formal rulemaking. In re Pike Industries, Inc., Environmental Board Declaratory Ruling No. 96 (September 29, 1978). The issuing of guidelines is beyond the scope of a declaratory ruling. Therefore, no error occurred as a consequence of the Board's failure to issue guidelines for the petitioners. II. Petitioners also allege that the Board exceeded its authority, as set forth in 10 V.S.A. § 6085, by enacting a rule defining substantial change as "any change in a development or subdivision which may result in significant impact with respect to any of the criteria specified in 10 V.S.A. section 6086(a)(1) through (a)(10)." Rule 2(G), Act 250 Environmental Board Rules. In reviewing administrative regulations, we must find that so long as the substantive requirements of the enabling statute are not compromised, the regulations are valid. In re Agency of Administration, State Buildings Division, 141 Vt. 68, 81, 444 A.2d 1349, 1355 (1982). Furthermore, "[i]t is a `venerable principle that construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong.'" Committee to Save the Bishop's House, Inc. v. Medical Center Hospital of Vermont, Inc., 137 Vt. 142, 150-51, 400 A.2d 1015, 1019-20 (1979) (quoting Red Lion Broadcasting Co. v. Federal Communications Commission, 395 U.S. 367, 381, 89 S. Ct. 1794, 1801, 23 L. Ed. 2d 371 (1969) (footnote omitted)). In light of this highly deferential standard with which we approach a review of an agency's regulations, we find no error in the Board's definition of substantial change. III. The petitioners' final argument is that the Board erred in determining that the environmental agency was not estopped from claiming jurisdiction over the development because of actions of its employee. In its findings of fact, the Board found that in 1978 petitioners were advised by an employee of the Environmental Conservation Agency (Agency) that the removal of 40,-000 cubic yards of gravel from the gravel pit did not require a permit. There is no 1017 evidence in the record indicating upon what information this determination was based. Petitioners claim that this determination prevents the Board from claiming, at a later date, that a permit is required for the continued use of the gravel pit. The statute states that a permit is required for any substantial change in a pre-existing development. 10 V.S.A. § 6081(b). To find that the representation by the Agency's inspector prevents the Board from ever finding that petitioners need a permit fails to give meaning to the "substantial change" language of the statute. See also In re Agency of Administration, supra, 141 Vt. at 80-81, 444 A.2d at 1355 (remarks by state employee will not color court's construction of legal language). Because a development is exempt at one time does not mean it will always be exempt. The inspector's representations, therefore, did not estop the Board from concluding that it had jurisdiction over the development which occurred after 1978. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265813/	69 F. Supp. 897 (1947) ALESNA et al. v. RICE et al. Civ. No. 769. District Court, Territory of Hawaii. February 25, 1947. Harriet Bouslog, of Honolulu, Hawaii, and Meyer C. Symonds, of San Francisco, Cal., for plaintiffs. 898 C. Nils Tavares Atty. Gen., and Michiro Watanabe, Deputy Atty. Gen., of Honolulu, Hawaii, for defendants. McLAUGHLIN, District Judge. The plaintiffs bring this action under the Civil Rights Act, 28 U.S.C.A. § 41(14), alleging upon four different grounds the deprivation under color of Territorial law of rights guaranteed to them by the Constitution and laws of the United States. Upon application and in accord with 28 U.S.C.A. § 381, Rule 65, Federal Rules of Civil Procedure, 28 U.S.C.A. following § 723c, a restraining order was issued ex parte. An order to show cause was returnable upon the tenth day thereafter, and as the argument was not concluded the restraining order was extended under the rule an additional ten days. The question and the only question now before the Court is whether or not, pending a hearing upon the merits, a temporary injunction should issue. The case arises out of the recent Territorial-wide strike of all sugar plantation workers. Upon the Island of Kauai the Lihue Plantation Company, Limited, applied in a proceeding in equity to the Judge of the Territorial Circuit Court for the Fifth Judicial Circuit for injunctive relief against certain aspects of picketing then being carried on by the unionized strikers. The Territorial Judge issued ex parte a restraining order restricting certain phases of picketing by the defendants in that case. Thereafter the defendants moved to dissolve it as having been issued contrary to the provisions of the Norris-LaGuardia Act, § 1 et seq., 29 U.S.C.A. § 101 et seq. Judge Rice denied the motion but subsequently upon his own motion amended the restraining order which he had previously issued. Insofar as is here pertinent, the restraining order as amended prohibited the defendants from (a) Engaging in mass picketing on or near company business or residence property for the purpose of preventing, obstructing or interfering with ingress or egress to such property; and (b) Using more than three pickets at points of ingress to or egress from company property, and directing that at all other points where more than three pickets were used that such pickets should be in motion and, except when passing each other, a distance of ten feet between each picket should be maintained. The plaintiffs here were indicted upon two counts by the Grand Jury of the Territorial Fifth Circuit Court for criminal contempt of court in that, as alleged in the indictment, they wilfully violated the restraining order (1) By mass picketing with others on or near company property to prevent, obstruct, and interfere with ingress and egress thereto; and (2) By picketing with others in groups in excess of three at points of ingress to and egress from company property, and also by failing to keep in motion and by failing to maintain a distance of ten feet between each other. Thereafter, in a case in the Second Circuit Court arising out of a similar situation upon the Island of Maui, upon a petition for a writ of prohibition, the Territorial Supreme Court was called upon to decide whether or not the Norris-LaGuardia Act applied to the Territorial Circuit Courts. In a decision dated December 4, 1946, the Supreme Court of Hawaii held that that Act did not apply to the Territorial Courts. 37 Haw. 404. A Petition for Rehearing was denied by that Court on January 23, 1947, 37 Hawaii , and an appeal has been taken to the Circuit Court of Appeals for the Ninth Circuit. The plaintiffs came to this Court January 31, 1947, and upon the basis of the allegations contained in the complaint which included an allegation that the criminal case against plaintiffs was set for plea and trial in the Fifth Circuit Court on February 4, 1947 (now reset for February 26th) asked ex parte, for an order restraining Judge Rice and the Territorial Attorney General from proceeding with the criminal case in the Fifth Circuit Court until further order of this Court. Because of the nature of the case, the importance of the questions of law involved, and the facts and circumstances surrounding it, as has been stated, a restraining order 899 issued, but only against the Territorial Attorney General, his deputies and assistants. The defendant Judge and Attorney General were directed to show cause why a preliminary injunction should not issue as prayed for. In reply, the defendants state that (1) This Court has no jurisdiction to enjoin Territorial Judge Rice; (2) The Judge is not a proper party to a suit such as this; (3) The complaint shows that this Court has no jurisdiction, for this Court cannot enjoin a criminal action pending in a Territorial Court; and (4) That the complaint shows no grounds for equitable relief. Plaintiffs, of course, state that defendants' objections are not well taken, and affirmatively assert rights guaranteed to them by the Constitution and laws of the United States are being denied them by the Territory and one of its Courts in that (a) The Norris-LaGuardia Act does apply to the Territorial Courts, hence, Judge Rice's amended restraining order was void the plaintiffs have been indicted for violating a void order of Court, and are being forced to defend themselves against such an indictment in a Court which has already ruled out the Norris-LaGuardia Act and the hands of which on the point are now tied, in any event, by the ruling of the Territorial Supreme Court; (b) If the Norris-LaGuardia Act does not apply to the Territorial Courts, the same consequences above outlined follow in any event, for it must then be that this Court, the United States District Court for the Territory of Hawaii, has been given by Congress exclusive power in the Territory to issue injunctions in labor dispute cases in conformity with the Norris-La-Guardia Act and hence Judge Rice's restraining order was void; (c) The laws of the United States grant plaintiffs, members of a union, substantive rights which no Court can restrain in the absence of fraud or violence; that Judge Rice's restraining order is void, for it prohibited the free exercise of, and the indictment based thereon alleges it to have been a criminal offense to have exercised, rights granted to members of a union by United States laws. In brief, it is said plaintiffs are being charged criminally for doing what Congress gave them as members of a union a right to do. And finally that (d) Judge Rice's order and the indictment based upon it deprived plaintiffs of rights guaranteed to them by the Constitution in that the right to picket is an exercise of the rights of free speech and of assembly. Opinion My answers to the questions presented are: I. The Norris-LaGuardia Act does not apply directly to the Territorial Judiciary. Although those courts fall squarely within the phrase "Court of the United States" as defined in the Act, 29 U.S.C.A. § 113(d), it is to me satisfactorily clear from the nature of the Territorial Government created by the Organic Act, 48 U.S.C.A. § 491, and the objective sought to be attained by Congress in passing the Norris-LaGuardia Act that it was never meant to apply to the Territorial Courts. In organizing this Territory, Congress gave to the local government which it created broad domestic powers, and it separated that local government from the operations within the Territory of the Federal Government. Congress gave to the Territory a form of organization more like that of a State than it had previously given to any like area. See People of Puerto Rico v. Shell Co., 302 U.S. 253, 58 S. Ct. 167, 82 L. Ed. 235. Insofar as the Territorial Courts are concerned, Congress itself recognized the distinction between the Territorial Courts and the U. S. District Court for the Territory of Hawaii, 48 U.S.C.A. § 645. As pointed out in Wilder's Steamship Co. v. Hind, 108 F. 113, at pages 115, 116, years ago "The system of courts created by the act for the territory of Hawaii differs radically from the system of courts which Congress had theretofore created for any of the territories. In no other territory has there been a division of jurisdiction between cases 900 which properly belong to courts of the United States and other cases. Congress found in the republic of Hawaii a system of courts already established, whose jurisdiction was complete, and from the highest tribunal of which there was no appeal. To that system congress, by the act, added a district court, conferring upon it the jurisdiction which pertains to the district and circuit courts of the United States, and providing for removing to that court from the Territorial courts causes which under the removal acts were removable from a state court to a court of the United States." See also Yeung v. Territory of Hawaii, 9 Cir., 132 F.2d 374. There is no intent revealed in either the act or its history which requires that the distinction between the Territorial courts and the Federal Court for the Territory of Hawaii was to be obliterated. Congress on the contrary spoke of an intent not to disturb domestic jurisdiction. Further, as designed the Norris-LaGuardia Act does not fit the Territorial court system. 29 U.S.C.A. § 110 provides for appeals from the granting or denial of a preliminary injunction to the Circuit Court of Appeals, which in this instance would be the Ninth Circuit Court of Appeals. Such an appeal from the Territorial Circuit Courts is not possible. From those courts appeals lie to the Territorial Supreme Court. Basically, although "courts of the United States" in a very wide, general sense, the Territorial courts are not within the Norris-LaGuardia Act because Congress was aiming at, and only at, the District Courts of the United States and the Circuit Courts of Appeal. A reading of the legislative history leaves no doubt upon the point. The evil sought to be remedied was the issuance of blanket injunctions against labor for little if any reason by the Federal Courts in labor dispute cases in contravention of the will of Congress as set forth in the Clayton Act. 29 U.S.C.A. § 52. See United States v. Hutcheson, 312 U.S. 219, 61 S. Ct. 463, 85 L. Ed. 788. In curing the evil by the passage of the Norris-LaGuardia Act Congress had no other courts in mind. It saw the source of the trouble and set about to remedy it, as it did, by curtailing the powers of the Federal judiciary and none other. II. The Norris-LaGuardia Act does apply to this Court. The Act curtails and restricts the equity powers of the Federal Court to the same extent that it affects like powers held by Constitutional Federal Courts. In passing this legislation Congress gave not a moment's thought, to be sure, to Legislative Federal Courts as such. As to courts, the discussions were generally in terms of "inferior" courts, "inferior" Federal courts and "Federal" courts. But, nevertheless, the thing of importance to note was that Congress was dealing with equity power possessed by any Federal Court. This Court, although legislative, not only comes within the terms of 29 U.S.C.A. § 113(d), but additionally is within the target area reached by the Congress through the Norris-LaGuardia Act, for it has equity powers identical to those held by Constitutional Federal Courts. 48 U.S.C.A. § 642. To arrive at any other conclusion than that the Act applies directly and squarely to this Court would not only be to construe the Act in a "spirit of mutilating narrowness" (See United States v. Hutcheson, supra) while fully aware of what Congress was "driving at", but would further bring about the absurd result that this Legislative U. S. District Court has more power today than a Constitutional U. S. District Court. III. This Court has not been given exclusive jurisdiction to issue, upon compliance with the Norris-LaGuardia Act, injunctions in labor disputes. The opposing contention is based upon the Sherman Act, 15 U.S.C.A. § 3, giving this Court jurisdiction over violations of that law in Hawaii. Relying upon the Hutcheson case, supra, to the effect that the Sherman Act, the Clayton Act and this Act, the Norris-LaGuardia Act, must be read together as one integrated piece of legislation, it is argued that the amendatory act must be accorded the same geographical scope. It is a fascinating and in many respects plausible argument, and under the Hutcheson case it is difficult to put a finger upon 901 just why the second proposition does not follow from the first. But I am not satisfied that the argument is sound. Of all injunctions sought upon the theory that the complained of labor activity is an unlawful restraint upon Territorial commerce, this Court would have exclusive jurisdiction. But to hold, as plaintiffs urge, in the absence of specific language in the statute that the Territorial Courts are powerless to act by injunction in a case arising out of a labor dispute would be in my opinion judicial legislation. Professing no intention to interfere with the equitable powers of the state courts which of course it couldn't affect directly it seems to me also reasonable to believe, in the absence of contrary language, that Congress had no reason, desire, or intention to deprive, as it could have, the domestic courts of Hawaii of any part or all of their equity power. IV. However, in this case, and with reference to the facts alleged and the law involved in the plaintiffs' third and fourth causes of action, a preliminary injunction should and therefore will issue. How can it issue? There is a criminal proceeding pending in a Territorial Court, and 28 U.S.C.A. § 379 which because of 48 U.S.C.A. § 645 applies to this Court says that no court of the United States shall enjoin proceedings in State or Territorial Courts. The answer is that the statute directing the observance of the principles of comity between courts exercising different powers in the same area is not jurisdictional, and has recognized exceptions. Toucey v. New York Life Insurance Co., 314 U.S. 118, 62 S. Ct. 139, 86 L. Ed. 100, 137 A.L.R. 967. Where exceptional circumstances of peculiar urgency are shown to exist, a Federal court may interfere with a State court or Territorial court for the purpose of inquiring whether or not a person is being held in violation of the Constitution and laws of the United States. Ex parte Royall, 117 U.S. 241, 6 S. Ct. 734, 29 L. Ed. 868; United States ex rel. Kennedy et al. v. Tyler, Sheriff, et al., 269 U.S. 13, 46 S. Ct. 1, 70 L. Ed. 138; United States ex rel. Murphy v. Murphy, 2 Cir., 108 F.2d 861; United States ex rel. Buchalter v. Lowenthal, 2 Cir., 108 F.2d 863. This power is exercisable by injunction as well as by writ. It is well settled that equitable jurisdiction exists to restrain criminal prosecutions under unconstitutional enactments when the prevention of such prosecutions is essential to safeguard property rights. See Pughe v. Patton, D.C., 21 F. Supp. 182, 183, and cases there collected. As pointed out recently by the Supreme Court of Massachusetts in a somewhat similar case, if equity can protect the right to sell bananas, there is no reason historical or otherwise why it cannot act to protect personal rights and rights guaranteed by the Constitution. See Kenyon v. City of Chicopee, Mass., 70 N.E.2d 241. And so I am satisfied of the existence of the power to grant both the temporary and ultimate remedy asked for. Now, should or more pointedly why should a preliminary injunction issue? Because in the absence of any Territorial law, and in the light of the definite Federal laws relating to permissible labor conduct which laws the Territorial courts, to, must respect there seems here to be a substantial question as to whether or not that which under Federal law may be allowable conduct can by restrictions placed thereon by a court, however reasonable they might be become, as the Supreme Court says, "the road to prison." See United States v. Hutcheson, 312 U.S. 219, 61 S. Ct. 463, 467, 85 L. Ed. 788; Thornhill v. State of Alabama, 310 U.S. 88, 60 S. Ct. 736, 84 L. Ed. 1093; Hague v. CIO, 307 U.S. 496, 507, 59 S. Ct. 954, 83 L. Ed. 1423. In brief, with no questions of Territorial law involved at all, it looks as if plaintiffs are in jeopardy because they did things which Federal law allowed. Before exposing plaintiffs to the risks of trial for criminal contempt of court, I believe the questions of law imposed under these facts should be further examined. But I see no good reason why the preliminary injunction which will issue should enjoin the Judge of the Fifth Circuit Court. Effective relief can be attained by restraining the hand of the Attorney General as effective relief ex parte was similarly granted *902 at the time of the issuance of the restraining order. And, therefore, the preliminary injunction will be like the restraining order issued only to the Attorney General. A preliminary injunction in substantially the same form as the restraining order will suffice, and such will be signed on presentation.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265644/	163 Cal. App. 4th 1387 (2008) WESTREC MARINA MANAGEMENT, INC., Plaintiff and Appellant, v. ARROWOOD INDEMNITY COMPANY, Defendant and Respondent. No. B195047. Court of Appeals of California, Second District, Division Three. June 16, 2008. 1388 Nemecek & Cole, Michael McCarthy, Tommy Q. Gallardo; and Thomas J. Ready for Plaintiff and Appellant. Musick, Peeler & Garrett, David A. Tartaglio and Teresa Cho for Defendant and Respondent. 1389 OPINION CROSKEY, Acting P. J. Westrec Marina Management, Inc. (Westrec), appeals a judgment denying relief on its complaint against its liability insurer, Arrowood Indemnity Company (Arrowood), after a nonjury trial. Arrowood refused to provide a defense in an action against Westrec on the ground that Westrec had failed to timely report the claim as required under the terms of the two successive policies issued by Arrowood. Westrec contends it timely reported the claim and the trial court's conclusion to the contrary was error. We hold that the court correctly decided that a letter from the third party claimant's attorney to Westrec was a "claim" within the meaning of the policies, that the later action filed by the third party claimant constituted the same claim, and that Westrec's failure to timely report the claim after receiving the letter rendered its later notice of claim untimely. We therefore affirm the judgment. FACTUAL AND PROCEDURAL BACKGROUND 1. Factual Background Arrowood, then known as Royal Indemnity Company, issued a directors and officers liability insurance policy to Westrec effective from July 1, 2002, to July 1, 2003, and issued a second policy effective from July 1, 2003, to July 1, 2004. Each policy provided coverage for losses incurred in connection with claims first made during the policy period and reported within 30 days after the expiration of the policy. The policies defined a "claim" as: "a. a written demand for civil damages or other relief commenced by the Insured's receipt of such demand; "b. a civil proceeding commenced by the service of a complaint or similar pleading; "c. a formal administrative or regulatory proceeding commenced by the filing of a notice of charges, a formal investigative order or other similar document; or "d. a criminal proceeding commenced by the Insured's receipt of notice of a grand jury investigation." (Boldface omitted.) 1390 The policies also stated that all claims arising from the same events or series of related facts would be deemed a single claim.[1] Bette Clark filed a complaint with the Department of Fair Employment and Housing (DFEH) on April 14, 2003, alleging employment discrimination by Westrec and requesting a right-to-sue notice. The DFEH notified Westrec of the complaint and stated that the complaint was closed immediately on April 14, 2003, because the complainant had requested an immediate right-to-sue notice. The DFEH issued a right-to-sue notice on April 15, 2003. Westrec did not notify Arrowood of these events within 30 days after the expiration of the first policy. Clark's attorney, William Adams, sent a letter to Westrec by facsimile on June 24, 2003. The letter began by stating that Adams represented Clark and that Clark "was subjected [to] constant discriminatory and demeaning treatment by male supervisors based upon her sex." The letter described alleged incidents of discrimination and wrongful termination. It stated further: "As you are no doubt aware, Bette has received Right to Sue letters from the DFEH. I am writing to you to see if Westrec would prefer to attempt to resolve or mediate this matter, or if it will be necessary to file a lawsuit and have a jury decide the outcome. It is often in an employer's best interests to resolve discrimination claims promptly in order to avoid paying statutory attorney's fees which must be awarded by the court should the employee prevail. Those fees alone can exceed $200,000 by the time of trial. [¶] . . . [¶] Before any litigation becomes necessary, however, I believe the Company should first be permitted to do the right thing to promptly rectify the harm caused to Bette in a confidential and discreet manner. If this matter were to be resolved in this manner, there is a second advantage to the Companyone can almost be assured that a prompt resolution will be far less expensive and less time consuming for the Company and its executives." The letter concluded, "I look forward to hearing back from you or your legal counsel." Westrec did not notify Arrowood of the letter within 30 days after the expiration of the first policy. Clark filed a complaint against Westrec on December 19, 2003, alleging several counts arising from employment discrimination and wrongful termination. Westrec notified Arrowood of the action on January 30, 2004, 1391 tendered its defense, and requested indemnity. Arrowood declined to defend or indemnify its insured in a letter dated February 9, 2004. The letter stated that either the complaint to the DFEH or the Adams letter, or both, constituted a "claim" as defined in the policy and that Westrec failed to provide timely notice of the claim. 2. Trial Court Proceedings Westrec filed a complaint against Arrowood and others in August 2005. The first amended complaint filed in November 2005 alleges counts against Arrowood for breach of contract and breach of the implied covenant of good faith and fair dealing. Westrec moved for summary adjudication, seeking to establish a duty to defend. The court denied the motion. Westrec dismissed its count for breach of the implied covenant before trial pursuant to a partial settlement. The court conducted a nonjury trial on the count for breach of contract, and orally announced its ruling at the conclusion of trial. The court stated that the complaint to the DFEH was not a "claim" within the meaning of the policies, but that the Adams letter was a "claim" because it was a demand for a monetary settlement. The court ordered Westrec to prepare a judgment consistent with its ruling. The court entered a defense judgment on September 15, 2006. Westrec timely appealed the judgment. CONTENTIONS Westrec contends its notice of claim was timely because neither the complaint to the DFEH nor the Adams letter was a "claim" within the meaning of the policies, and even if either of those items was a claim, the Clark lawsuit was a separate claim for which Westrec provided timely notice. DISCUSSION 1. Standard of Review Absent a factual dispute, the interpretation of an insurance contract and its application to undisputed facts are questions of law that we review de novo. (Century Transit Systems, Inc. v. American Empire Surplus Lines Ins. Co. (1996) 42 Cal. App. 4th 121, 125 [49 Cal. Rptr. 2d 567].) 2. Rules of Contract Interpretation (1) We interpret an insurance policy using the same rules of interpretation applicable to other contracts. (Palmer v. Truck Ins. Exchange (1999) 21 1392 Cal.4th 1109, 1115 [90 Cal. Rptr. 2d 647, 988 P.2d 568].) The mutual intention of the contracting parties at the time the contract was formed governs. (Civ. Code, § 1636; Hess v. Ford Motor Co. (2002) 27 Cal. 4th 516, 524 [117 Cal. Rptr. 2d 220, 41 P.3d 46].) We ascertain that intention solely from the written contract, if possible, but also consider the circumstances under which the contract was made and the matter to which it relates. (Civ. Code, §§ 1639, 1647; Hess, supra, at p. 524.) We consider the contract as a whole and construe the language in context, rather than interpret a provision in isolation. (Civ. Code, § 1641.) We interpret words in a contract in accordance with their ordinary and popular sense, unless the words are used in a technical sense or a special meaning is given to them by usage. (Id., § 1644.) If contractual language is clear and explicit and does not involve an absurdity, the plain meaning governs. (Id., § 1638.) 3. The Adams Letter Was a "Claim" As Defined in the Policies (2) The policies define a "claim" to include, "a written demand for civil damages or other relief commenced by the Insured's receipt of such demand." (Boldface omitted.) The policies do not state that a demand must be made in connection with a judicial or administrative proceeding to constitute a claim. The ordinary meaning of a "demand" as used in this context is a request for something under an assertion of right or an insistence on some course of action. (See Webster's 3d New Internat. Dict. (2002) p. 598.) A mere request for an explanation, expression of dissatisfaction, or lodging of a grievance that falls short of such an insistence is not a demand. (Abifadel v. Cigna Ins. Co. (1992) 8 Cal. App. 4th 145, 160 [9 Cal. Rptr. 2d 910] (Abifadel); Hill v. Physicians & Surgeons Exchange (1990) 225 Cal. App. 3d 1, 5-6 [274 Cal. Rptr. 702]; see Hoyt v. St. Paul Fire and Marine Ins. Co. (9th Cir. 1979) 607 F.2d 864, 866.) The Adams letter stated that Clark had been subjected to employment discrimination and wrongful termination and that she had received a right-to-sue notice from the DFEH. It stated that Westrec might prefer "to resolve or mediate this matter" and "to promptly rectify the harm" rather than suffer the expense of litigation. Obtaining a right-to-sue notice is a necessary predicate to the filing of an action under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.). (Romano v. Rockwell Internat., Inc. (1996) 14 Cal. 4th 479, 492 [59 Cal. Rptr. 2d 20, 926 P.2d 1114].) The Adams letter clearly expressed Clark's intent to sue Westrec for employment discrimination if an appropriate settlement could not be reached. 1393 We construe the letter as a settlement demand seeking monetary compensation for the alleged wrongdoing. Although the letter did not expressly demand payment or refer to any specific amount, its meaning was clear that, absent some form of negotiated compensation, Clark would commence a lawsuit against Westrec. The attorney's request for compensation while threatening litigation was a "demand," as that word is ordinarily understood. (Phoenix Ins. Co. v. Sukut Construction Co. (1982) 136 Cal. App. 3d 673, 677-678 [186 Cal. Rptr. 513].) In Phoenix Ins., a client asked his attorney to work without pay to correct a problem with a mechanics lien that the attorney had drafted. The policy did not define the term "claim." Relying on the ordinary meaning of that term as "a demand for something as a right, or as due," we held that the client's request was a sufficient "demand" to constitute a claim. (Ibid.) Similarly here, we conclude that the insistence on compensation by way of settlement in lieu of litigation constituted a demand for "civil damages or other relief" within the ordinary meaning of those words. We conclude that the letter was a "written demand for civil damages or other relief" and that the letter therefore was a "claim" as defined in the policies.[2] The Arrowood policies state that if, during the policy period, the insured first becomes aware of a "circumstance which may reasonably be expected to give rise to a Claim," and promptly notifies the insurer in writing before the expiration date of the policy, any subsequent claim against the insured arising out of the same circumstance will be deemed to be first made during the policy period. Westrec, relying on this language, argues that the Adams letter was merely a "circumstance" within the meaning of this provision and therefore was not an actual "claim." Westrec cites opinions involving insurance policies with other provisions that extended coverage to claims made after the policy period if the insured promptly notified the insured of a threatened or potential claim during the policy period. (Abifadel, supra, 8 Cal.App.4th at pp. 149-150 & fn. 2; Winkler v. National Union Fire Ins. Co. (9th Cir. 1991) 930 F.2d 1364, 1366.) Those opinions involved policies in which the term "claim" was undefined, but the concept of a threatened or potential claim was described in detail. (Abifadel, supra, at pp. 149, 161; Winkler, supra, at p. 1366.) Abifadel and Winkler concluded that a "claim" and a threatened or potential claim were mutually exclusive, and concluded that certain events that did not rise to the level of a "demand" were threatened or potential claims under the policy terms. Abifadel and Winkler therefore held that those events were not actual claims within the meaning of the policies. (Abifadel, supra, at pp. 161, 163-167; Winkler, supra, at pp. 1366-1367 & fn. 4.) 1394 Here, in contrast, we conclude that the Adams letter was "a written demand for civil damages or other relief" within the meaning of the policy definition, as we have stated. In our view, the provision regarding a "circumstance which may reasonably be expected to give rise to a Claim" does not in any way suggest that a written settlement demand is not a claim. 4. The Lawsuit and the Prior Letter Constituted a Single Claim, and Westrec Failed to Timely Report the Claim The Clark lawsuit was a "claim" within the meaning of the policies because it was "a civil proceeding commenced by the service of a complaint or similar pleading." The policies state that all claims arising from the same events "or in any way involving the same or related facts ... or the same or related series of facts ..." are deemed a single claim. This provision appears together with four other paragraphs under the heading "LIMIT OF LIABILITY; RETENTION; PAYMENT OF LOSS." (Boldface omitted.) The Clark lawsuit was the litigation that was authorized by the right-to-sue notice and threatened in the Adams letter. The lawsuit was based on and arose from the same events and the same or related series of facts as the prior claim (i.e., the Adams letter). The lawsuit and the letter therefore constituted a single claim that was first made at the time of the Adams letter. Westrec argues that because the policies define the term "claim" in the disjunctive, each of the four events described in the definition gives rise to a separate claim. Westrec maintains that if the Adams letter or the complaint to the DFEH was a claim, the lawsuit was a separate claim and was first made within the second policy period. Westrec argues further that the "single claim" provision applies to the determination of liability limits and retention amounts, but does not modify the definition of a claim or affect the determination of when a claim was first made or reported. We reject each of these arguments. The insuring clause states that the insurer will provide coverage only for claims "first made ... and reported" in accordance with other policy terms. Another provision states that a claim must be "first made" during the policy period and reported within 30 days after the expiration of the policy. The references to claims "first made" (italics added) suggest that the same claim can be made more than once. This suggests that two events each constituting a claim under the policy definition, such as "a written demand for civil damages or other relief" followed by "a civil proceeding commenced by the service of a complaint or similar pleading," can constitute a single claim 1395 made more than once. The "single claim" provision confirms this view. That provision (quoted in fn. 1, ante) is not expressly limited to only the determination of liability limits and retention amounts. Although the heading under which the "single claim" provision appears does not describe the effect of the provision on the determination of when a claim was first made or reported, the absence of a fully descriptive heading does not restrict the plain meaning of the provision. (Coit v. Jefferson Standard Life Ins. Co. (1946) 28 Cal. 2d 1, 11 [168 P.2d 163] [enforced the explicit language of a policy exclusion despite an arguably inaccurate caption]; cf. People v. Garfield (1985) 40 Cal. 3d 192, 199-200 [219 Cal. Rptr. 196, 707 P.2d 258] [stated that a chapter heading by the Legislature may be a "`useful guide'" to statutory interpretation but is not controlling].) Homestead Ins. Co. v. American Empire Surplus Lines Ins. Co. (1996) 44 Cal. App. 4th 1297 [52 Cal. Rptr. 2d 268] (Homestead), cited by Westrec, is not on point. Homestead involved a cross-complaint between two insurers, each of which had issued a "claims made" policy to the same insured, an escrow company, in consecutive years. (Id. at p. 1300.) John and Betty Minnick filed a complaint against the insured and others during the term of a policy issued by American Empire Surplus Lines Insurance Company (American Empire). The Minnick action arose from a commercial real property sales transaction. Carey and Beverly McLeod and other plaintiffs later filed a complaint against the insured, the Minnicks, and others during the term of a policy issued by Homestead Insurance Company (Homestead), alleging that the defendants had defrauded investors in a series of transactions. (Id. at pp. 1301-1302.) The insured and Homestead alleged that the McLeod action was a claim made during the prior policy period because the Minnick and McLeod actions arose from "a `series of interrelated acts'" and therefore were "`treated as a single claim'" under the terms of a provision in the American Empire policy. (Id. at pp. 1302, 1304-1305.) In Homestead, we noted that the purpose of a "claims made" policy, as distinguished from an "occurrence" policy, is to limit the insurer's risk to claims made during the policy period regardless of when the injury or its cause occurred. This reduces the insurer's potential liability on a policy and results in a lower premium for the insured. (Homestead, supra, 44 Cal.App.4th at p. 1304.) We concluded that the McCleod action was a claim made after the American Empire policy period and that coverage under the American Empire policy did not extend to claims made after the policy period. (Id. at p. 1305.) We stated that the "single claim" provision did not cause claims made during different policy periods to merge into a single claim, and did not 1396 shift liability from one insurer to another. (Ibid.) We stated further that a claim, or multiple claims treated as a single claim, must be made during the policy period to trigger coverage. (Ibid.) Homestead, supra, 44 Cal. App. 4th 1297, did not address the effect of a "single claim" provision on a provision limiting coverage to claims "first made" (italics added) during the policy period. In contrast to the situation in Homestead, the effect of our application of the "single claim" provision here is not to extend coverage to a claim made after the policy period, contrary to the purpose of a "claims made" policy, or to shift liability from one insurer to another. Rather, application of the "single claim" provision in these circumstances gives effect to the express limitation of coverage to claims "first made" during the policy period. Helfand v. National Union Fire Ins. Co. (1992) 10 Cal. App. 4th 869 [13 Cal. Rptr. 2d 295] also is not on point. Helfand involved a policy provision stating that losses arising from the same or interrelated acts were considered "`a single loss.'" (Id. at p. 891, fn. 12.) The provision appeared in a clause explaining the calculation of retention amounts for each loss. Helfand stated, "[i]n context it is clear that the interrelated acts provision pertains solely to calculation of the retention amount to be borne by the insureds and not to the issue of when loss is incurred for purposes of applying the annual limit of liability for a particular policy year." (Ibid.) Thus, Helfand concerned the effect of a "single loss" provision on the allocation of losses to different policy years for purposes of applying the annual liability limits. Helfand did not consider the effect of a "single claim" provision on a provision limiting coverage to claims "first made" during the policy period. (3) The Clark lawsuit and the Adams letter constituted a single claim that was first made at the time of the Adams letter, as we have stated. Westrec received the Adams letter during the first policy period but failed to notify Arrowood of the claim within 30 days after the expiration of the policy, as required. Westrec's subsequent notice of the lawsuit during the second policy period concerned the same claim and therefore was untimely. Westrec is not entitled to coverage under the policies because it failed to timely report the claim. The trial court properly entered judgment in favor of Arrowood. 1397 DISPOSITION The judgment is affirmed. Arrowood is entitled to recover its costs on appeal. Kitching, J., and Aldrich, J., concurred. NOTES [1] Specifically, the policies stated: "All Claims based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving the same or related facts, circumstances, situations, transactions or events, or the same or related series of facts, circumstances, situations, transactions or events, shall be deemed to be a single Claim." (Boldface omitted.) [2] In light of our conclusion that the Adams letter was a "claim," we need not decide whether the complaint to the DFEH was a "claim."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265647/	163 Cal. App. 4th 689 (2008) THE PEOPLE, Plaintiff and Respondent, v. MICHAEL DEAN TREADWAY, Defendant and Appellant. No. G038824. Court of Appeals of California, Fourth District, Division Three. June 3, 2008. 692 Law Office of Barry T. Simons, Barry T. Simons and Ronald L. Moore for Defendant and Appellant. Edmund G. Brown, Jr., Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Gary W. Schons, Assistant Attorney General, Steve Oetting, Robin Derman and Emily R. Hanks, Deputy Attorneys General, for Plaintiff and Respondent. OPINION MOORE, J. Defendant Michael Dean Treadway (defendant) was sentenced pursuant to Vehicle Code section 23550 for suffering a fourth drunk driving conviction within a 10-year period.[1] He appeals from the order overruling his demurrer and denying his motion to strike prior conviction. Section 23550 was amended in 2004 to extend the "look-back" period pertaining to prior convictions from the seven-year period formerly in effect to the 10-year period currently in effect. Defendant claims that current section 23550, as applied to him, constitutes an ex post facto law, and violates both his due process rights and the principles of estoppel. These arguments are based on the fact that the oldest of his four offenses was more than seven, although less than 10, years old at the time the amended statute went into effect. Although defendant acknowledges that there are two cases almost precisely on point, i.e., People v. Sweet (1989) 207 Cal. App. 3d 78 [254 Cal. Rptr. 567] and People v. Forrester (2007) 156 Cal. App. 4th 1021 [67 Cal. Rptr. 3d 740], he observes that both of those cases were written by the same court, and says that they were wrongly decided. Defendant contends that they are contrary to the Supreme Court precedent of Stogner v. California (2003) 539 U.S. 607 [156 L. Ed. 2d 544, 123 S. Ct. 2446]. We disagree with defendant's assertions. Nothing in Stogner v. California, supra, 539 U.S. 607, which addressed an expired statute of limitations, casts doubt on either People v. Sweet, supra, 207 Cal. App. 3d 78 or People v. Forrester, supra, 156 Cal. App. 4th 1021, neither of which pertained to a revival of an expired statute of limitations. People v. Sweet, supra, 207 Cal. App. 3d 78 and People v. Forrester, supra, 156 Cal. App. 4th 1021 remain good law. We grant defendant's request for judicial notice, but reject his substantive arguments, and affirm. 693 I FACTS Defendant was arrested for drunk driving on September 10, 2005. The Orange County District Attorney thereafter filed a five-count felony complaint alleging defendant (1) violated section 23152, subdivision (a), driving under the influence of alcohol, and pursuant to section 23550, committed the offense within 10 years of three prior convictions; (2) violated section 23152, subdivision (b), driving with a blood-alcohol content of at least .08 percent, and pursuant to section 23550, committed the offense within 10 years of three prior convictions; (3) violated section 14601.2, subdivision (a), driving on a suspended license; (4) violated section 31, providing false information to a peace officer; and (5) violated Penal Code section 148.9, subdivision (a), falsely representing identity to a peace officer. It was further alleged, pursuant to section 23578, that defendant's blood-alcohol concentration exceeded .20 percent, and, pursuant to section 23577, subdivision (a)(5) and section 23578, that defendant willfully and unlawfully refused to submit to a chemical test. In addition, the complaint alleged three prior convictions: (1) an August 6, 1998 conviction in People v. Treadway (Super. Ct. Orange County, 1998, No. 98SM41824) arising out of a violation of section 23152, subdivisions (a) and (b); (2) an August 6, 1998 conviction in People v. Treadway (Super. Ct. Orange County, 1998, No. 98SM44303) arising out of a violation of section 23152, subdivision (a); and (3) an August 14, 2003 conviction in People v. Treadway (Super. Ct. Orange County, 2003, No. 02SM04138) arising out of a violation of section 23152, subdivisions (a) and (b). Defendant filed a demurrer and motion to dismiss prior allegation, an amended demurrer and motion to dismiss prior allegation, and an amended demurrer and motion to strike prior allegation. He asserted that at least one of the August 6, 1998 convictions arose out of a violation occurring on December 8, 1997, and that the application of the 10-year look-back provision of section 23550 to include that prior conviction constituted the application of an ex post facto law, an impairment of contract, and a violation of due process of law. In addition, he argued that the doctrine of estoppel barred the application of the 10-year look-back provision. The court overruled the demurrer. Defendant pleaded guilty to each of the charges and admitted all of the enhancements, including the three prior convictions. He did not, however, waive his right to appeal, and the court issued a certificate of probable cause. 694 On May 4, 2006, the court sentenced defendant to 365 days in the Santa Ana Jail, 180 days of which would be stayed on the condition he spend 180 days in a sober living facility. Defendant was also sentenced to 3 years' formal probation, the payment of certain fines, and a four-year driver's license revocation. Defendant appeals. II DISCUSSION A. REQUEST FOR JUDICIAL NOTICE: As a preliminary matter, we address defendant's pending request for judicial notice. Defendant requests that we take notice of his guilty plea form in the matter of People v. Treadway (Super. Ct. Orange County, 1998, No. 98SM41824). The People have filed no opposition. The request is granted. (Evid. Code, § 452, subd. (d).) B. SUBSTANTIVE ISSUES: (1) Introduction Vehicle Code section 23550 provides: "(a) If a person is convicted of a violation of Section 23152 and the offense occurred within 10 years of three or more separate violations of Section 23103, as specified in Section 23103.5, or Section 23152 or 23153, or any combination thereof, that resulted in convictions, that person shall be punished by imprisonment in the state prison, or in a county jail for not less than 180 days nor more than one year, and by a fine of not less than three hundred ninety dollars ($390) nor more than one thousand dollars ($1,000). The person's privilege to operate a motor vehicle shall be revoked by the Department of Motor Vehicles pursuant to paragraph (7) of subdivision (a) of Section 13352. The court shall require the person to surrender the driver's license to the court in accordance with Section 13550. [¶] (b) A person convicted of a violation of Section 23152 punishable under this section shall be designated as a habitual traffic offender for a period of three years, subsequent to the conviction. The person shall be advised of this designation pursuant to subdivision (b) of Section 13350." A former version of the statute contained a seven-year look-back period with respect to the prior convictions, but the period was extended to 10 years when the statute was amended in 2004. (Stats. 2004, ch. 550, § 15.) Defendant contends that under the former version of the statute, the disability arising from his December 8, 1997 offense expired in December 2004, which was 695 before the effective date of the amendment. Consequently, to impose punishment under current section 23550 by including his December 8, 1997 offense as one of the three prior convictions would be a violation of the prohibition against ex post facto laws, of his due process rights, and of his plea bargain agreement with respect to that first conviction. (2) Case law Defendant concedes that People v. Sweet, supra, 207 Cal. App. 3d 78 and People v. Forrester, supra, 156 Cal. App. 4th 1021 have already addressed, under very similar circumstances, the question of whether a statutory amendment extending a look-back period constitutes an unconstitutional ex post facto law, a due process violation, or a violation of a plea bargain agreement. However, defendant contends that these cases were erroneously decided, particularly in light of the Supreme Court decision in Stogner v. California, supra, 539 U.S. 607. In People v. Sweet, supra, 207 Cal. App. 3d 78, the court, addressing several former Vehicle Code provisions, considered whether "a statute which increases punishment on a new drunk driving conviction where the defendant has incurred prior convictions for that offense within seven years [could] be applied to prior convictions entered when five years was the maximum period in which prior convictions could be used for that purpose[.]" (Id. at p. 81.) The court stated that the statute could be so applied, without constituting an ex post facto law, or violating either the defendants' due process rights or the terms of their plea bargains. (Id. at pp. 82-83, 85-87.) (1) The Sweet court explained: "Statutes enacting punishment for a defendant convicted of violating section 23152 with prior convictions do not have the effect of being ex post facto laws. [Citation.] It is the law in effect at the time of commission of the offense which controls. [Citations.] Both section 23152 and the enhancement statutes ... were in force before appellants' present convictions and apprised them of the possible consequences of a new violation. [Citation.] Without their acts after passage of the new legislation, the enhanced punishment of these statutes would not come into play. [Citations.] [¶] Consequently, crimes for which appellants are punished are not the earlier convictions, but the subsequent offense of which the prior conviction constitutes only one element. [Citation.] The sentence imposed upon an habitual offender is not an additional punishment for the earlier crime, but `a stiffened penalty for the latest crime,' which is considered aggravated because of its repetitive nature. [Citations.]" (People v. Sweet, supra, 207 Cal.App.3d at pp. 82-83.) 696 In addition, the Sweet court noted that the plea records showed that the five-year period was mentioned "in the context of the general advisement of possible penalties which could be imposed," that is to say, that the "[a]ppellants were informed of the `habitual offender' ramifications," and that neither the plea forms nor the docket entries indicated that the appellants entered "their pleas in reliance upon their ability to commit future crimes after five years without having their then current offenses come back to haunt them.... [Citation.]" (People v. Sweet, supra, 207 Cal.App.3d at p. 85.) The court also rejected the notion that the appellants had a vested right to rely on the five-year look-back period as in effect at the time of their prior convictions and stated that it found "no fundamental unfairness in subjecting them to the increased period in which a court could consider their prior convictions so long as that extended period was enacted before the current offense." (Id. at p. 86.) Put another way, "[s]ince the ultimate punishment imposed is for the new offense, so long as the statute considering one's status as a repeat offender is in force at the time of the subsequent crime the offender is on constructive notice that habitual offenders face aggravated penalties and there is no due process violation. [Citation.]" (Id. at p. 87.) Defendant insists that People v. Sweet, supra, 207 Cal. App. 3d 78 was wrongly decided. He maintains that Stogner v. California, supra, 539 U.S. 607 is the controlling authority and that it unveils faulty reasoning in People v. Sweet, supra, 207 Cal. App. 3d 78. (2) In Stogner v. California, supra, 539 U.S. 607, the Supreme Court described four categories of ex post facto laws: "`1st. Every law that makes an action done before the passing of the law, and which was innocent when done, criminal; and punishes such action. 2d. Every law that aggravates a crime, or makes it greater than it was, when committed. 3d. Every law that changes the punishment, and inflicts a greater punishment, than the law annexed to the crime, when committed. 4th. Every law that alters the legal rules of evidence, and receives less, or different, testimony, than the law required at the time of the commission of the offence, in order to convict the offender. All these, and similar laws, are manifestly unjust and oppressive.' [Citation.]" (Id. at p. 612.) (3) The court in Stogner v. California, supra, 539 U.S. 607, held that a California statute violated the constitutional prohibition against ex post facto laws (U.S. Const., art. I, § 10, cl. 1). (Stogner v. California, supra, 539 U.S. at p. 609.) The statute in question permitted the prosecution of certain sexrelated child abuse crimes when the statute of limitations on those crimes had already expired, provided the victim had reported the abuse to the police, 697 certain corroborating evidence had been obtained, and the prosecution had begun within a year of the report to the police. (Ibid.) The court held that the statute fell into the second category of ex post facto laws described above. The court explained that the second category applies to a statute that "`inflict[s] punishments, where the party was not, by law, liable to any punishment....'" (Id. at p. 613.) It further explained that, in the case before it, after the statute of limitations had expired, the defendant was not subject to punishment, but that the new statute made the crime "`greater than it was, when committed,' in the sense that, and to the extent that, it `inflicted punishment' for past criminal conduct that (when the new law was enacted) did not trigger any such liability. [Citation.]" (Ibid.) The Stogner court also said that the California statute might fall within the fourth category of ex post facto laws as well. (Stogner v. California, supra, 539 U.S. at p. 615.) It stated that "a statute of limitations reflects a legislative judgment that, after a certain time, no quantum of evidence is sufficient to convict. [Citation.]" (Ibid.) "Consequently, to resurrect a prosecution after the relevant statute of limitations has expired is to eliminate a currently existing conclusive presumption forbidding prosecution, and thereby to permit conviction on a quantum of evidence where that quantum, at the time the new law is enacted, would have been legally insufficient. And, in that sense, the new law would `violate' previous evidence-related legal rules by authorizing the courts to `"receiv[e] evidence ... which the courts of justice would not [previously have] admit[ted]"' as sufficient proof of a crime [citation]." (Id. at p. 616.) Defendant contends that Stogner v. California, supra, 539 U.S. 607 dictates the outcome in the case before us, because the seven-year look-back period in effect at the time of his first offense was, in essence, a statute of limitations. That is to say, once the seven-year period expired, that conviction could no longer be used against him as a prior conviction. The extended 10-year look-back period, he says, fell into the second and fourth categories of ex post facto laws as described in Stogner. Thus, application of the 10-year look-back period to his first offense would be a violation of the prohibition against ex post facto laws. (4) This argument was rejected in People v. Forrester, supra, 156 Cal. App. 4th 1021. The defendant in that case also argued that People v. Sweet, supra, 207 Cal. App. 3d 78 was no longer good law after Stogner v. California, supra, 539 U.S. 607. However, the Forrester court, construing section 23540, reaffirmed the principles of People v. Sweet, supra, 207 Cal. App. 3d 78. (People v. Forrester, supra, 156 Cal.App.4th at p. 1023.) It noted that there is a "difference between reviving a prosecution in its entirety after the statute of 698 limitations has run, and enhancing the sentence in a new criminal prosecution stemming from new criminal conduct." (Id. at p. 1025.) The Forrester court further explained: "Here [the defendant's] prosecution stems from a law that became effective more than one year before the date of his arrest, and one that apprised him of the possible consequences of a new violation. Unlike Stogner, [the defendant] has not been charged with a crime for which the statute of limitations has run. He has not been deprived of a `vested defense' because the statute extending the maximum period of prior offenses was enacted before the current offense. [Citation.]" (Ibid.) (5) People v. Sweet, supra, 207 Cal. App. 3d 78 and People v. Forrester, supra, 156 Cal. App. 4th 1021 are dispositive of the outcome of this case. (See also People v. Wohl (1990) 226 Cal. App. 3d 270 [276 Cal. Rptr. 35].) Here, defendant is not being punished for the 1997 offense; he is being punished for the 2005 offense. He was not convicted for the 1997 offense based on a quantum of evidence that would have been insufficient before section 23550 was amended; he was long ago convicted of that offense. Simply put, defendant committed a new crime in 2005, after the 10-year look-back period of section 23550 had come into effect. He was on notice of the law and the fact that, if he committed a new crime, all of his prior convictions within 10 years would be counted for the purposes of the statute. In an effort to wriggle out of the application of the 10-year provision, defendant says that "[w]hile it is true that all citizens are on constructive notice of all changes in the law and that ignorance of the law is no defense, [he] received actual notice of the seven years of priorability attached to his 1997 offense when he read his guilty plea form...." The guilty plea form stated, in paragraph 6 thereof: "I understand that if I am charged and convicted of a similar offense in the future that the plea of guilty/nolo contendere I now enter may be used to increase my punishment, the consequences of which have been explained to me on page[s] 3 and 4 of this form." Attached as pages 3 and 4 of the form was a chart providing a synopsis of certain then current Vehicle Code provisions affecting the length of sentence for habitual offenders. As stated in People v. Forrester, supra, 156 Cal. App. 4th 1021: "The chart simply provide[d] information concerning the relevant law at that time. No language in the plea agreement, nor any evidence supports the contention that [defendant] relied on the information in the chart in entering his plea. Nor would such reliance have been reasonable." (Id. at p. 1025.) Indeed, defendant has made no assertion that it was represented to him that the Legislature would never change any of the laws pertaining to the sentencing of habitual offenders. 699 III DISPOSITION The request for judicial notice is granted. The judgment is affirmed. Sills, P. J., and O'Leary, J., concurred. NOTES [1] All subsequent statutory references are to the Vehicle Code unless otherwise expressly provided.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265657/	657 F. Supp. 1287 (1987) CARLISLE TIRE & RUBBER CO., DIVISION OF CARLISLE CORP. et al., Plaintiffs, v. The UNITED STATES, Defendant, Dong-Ah Tire Ind. Co., Ltd., Defendant-Intervenor, Heung-Ah Tire Ind. Co., Ltd., Defendant-Intervenor. Court No. 84-07-01058. United States Court of International Trade. March 16, 1987. Frederick L. Ikenson, P.C. (Frederick L. Ikenson and J. Eric Nissley), Washington, D.C., for plaintiffs. Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Dept. of Justice, Commercial Litigation Branch (Sheila N. Ziff), Washington, D.C., for defendant. Dow, Lohnes & Albertson (William Silverman, John C. Jost, and Margaret B. Dardess), Washington, D.C., for defendant-intervenor Dong-Ah Tire Ind. Co., Ltd. Arnold & Porter (Richard A. Johnson and Stephan E. Becker), Washington, D.C., for 1288 defendant-intervenor Heung-Ah Tire Ind. Co., Ltd. MEMORANDUM OPINION AND ORDER DiCARLO, Judge: Plaintiffs, representing domestic producers of tire tubes, brought this action challenging the final negative dumping determination in Tubes For Tires, Other Than Bicycle Tires, From the Republic of Korea, 49 Fed.Reg. 26,780 (1984). The action was remanded to the Department of Commerce, International Trade Administration (Commerce) for recalculations in view of the Court's finding that merchandise adjustments under 19 U.S.C. § 1677b(a)(4) (1982) and drawback adjustments under 19 U.S.C. § 1677a(d)(1)(B) (1982) were made on the basis of inconsistent sets of tire tube weights. Carlisle Tire & Rubber Co. v. United States, 10 CIT ___, 634 F. Supp. 419 (1986). Specifically, the weights used for the merchandise adjustments were determined by randomly weighing sample tubes, while the generally higher weights used to determine drawback adjustments were reportedly taken from Korean packing lists which accompanied shipments of exported tubes. The remand order directed that Commerce either disregard the drawback adjustment entirely, or make both adjustments using a consistent set of weights. The Court previously held that merchandise weights verified by weighing sample tubes were supported by substantial evidence and in accordance with law. See Carlisle Tire & Rubber Co. v. United States, 9 CIT ___, ___, 622 F. Supp. 1071, 1082 (1985). On remand Commerce chose to retain the drawback adjustments and to use the verified merchandise weights to make both adjustments. Commerce found that the drawback adjustment for Dong-Ah Tire Ind. Co., Ltd. (Dong-Ah) had been calculated using the weights specified on packing lists attached to Dong-Ah's drawback applications. Commerce therefore performed recalculations and reported a slight increase in the dumping margin for Dong-Ah. For Heung-Ah Tire Ind. Co., Ltd. (Heung-Ah), Commerce found that the drawback adjustment had originally been based on the merchandise adjustment weights, and that no recalculations were necessary. Determination of the Tube Weights Used to Calculate Duty Drawback Pursuant to Court Remand (April 29, 1986) (Remand Determination) at 2. After reviewing Commerce's recalculations for Dong-Ah, the Court found that Commerce had not complied with the remand instructions. The statute authorizes a drawback adjustment in "the amount of any import duties imposed by the country of exportation which have been rebated, ... by reason of the exportation of the merchandise to the United States." 19 U.S.C. § 1677a(d)(1)(B) (1982). The statute does not authorize an adjustment in whatever amount is refunded by the exporting country. However, once Commerce determined the total weight of Dong-Ah's tubes exported to the United States during the investigation period and the total amount of drawback received by Dong-Ah during that time, it calculated actual drawback per kilogram, and allocated total drawback to individual United States sales based on the merchandise adjustment weights. Remand Determination at 15-17. By focusing only on the amount of duties refunded, Commerce made adjustments for drawback in the full amount of drawback received even though refunds by the Korean government were based on the generally higher packing list weights. Had Commerce first verified the amount of duties paid by Dong-Ah on imported raw materials used in the exported tire tubes, as required by the statute, the generally lower merchandise weights should have resulted in a lower total amount of drawback for which adjustments could be made under section 1677a(d)(1)(B) (statutory drawback). The Court therefore directed that if Commerce were to use the merchandise weights, it should determine duties per kilogram paid by Dong-Ah and make adjustments in that amount if sufficient refunds were made, using total drawback per kilogram as a ceiling. Commerce was instructed that the adjustment for drawback could 1289 not exceed the lesser of the amount of duties paid or the amount of duty rebates received by Dong-Ah. On January 12, 1987, Commerce reported the results of the recalculation for Dong-Ah: [T]he Department examined Dong-Ah's antidumping duty questionnaire response and determined the amount of duty and import taxes paid on raw materials imported to Korea, including the rubber. Then the amount of duty and import taxes Dong-Ah paid on a per kilogram basis was determined for each of the imported raw materials, including rubber, used by the company to make the tubes under investigation. The Korean government's estimates for determining duty drawback of the quantities of the various materials used to manufacture a one-kilogram tube were used to calculate the import duty cost for one kilogram of raw material. This was done by multiplying the standard quantity of each imported material as determined by the Korean government by the duty paid per kilogram of the material. Adding these figures together, a total duty cost per kilogram of a manufactured tube was calculated. The cost per kilogram of tube was then multiplied by the actual weight of each tube model, as verified by the Department and used in the merchandise adjustments, to arrive at the total duty cost for each tube model and the drawback amount for the imported raw materials. The Department then determined the drawback amount for the valves by determining from the record the import duties paid for certain valves. For those valves, it has assigned no drawback amount. The drawback amounts for the imported raw materials and the valve were added together for each specific tube to determine the duty drawback adjustment. This calculation has resulted in a weighted average less-than-fair-value margin of 0.017 percent. The Court was unable to determine from Commerce's report whether the total duties paid by Dong-Ah on raw materials used to manufacture the exported tubes exceeded the amount of duty rebates received by Dong-Ah. Defendant clarified that total duties paid did not exceed refunds received, and thus Commerce did not cap total statutory drawback at the amount of the refunds. I. Discussion Plaintiff argues that weights found on the companies' packing lists are the link between duties paid and drawback received, and unless Commerce uses those weights to make both drawback adjustments and merchandise adjustments, Commerce may not allow adjustments for drawback in this investigation. Plaintiffs contend that Commerce's determination is further flawed by the fact that Commerce did not know the total amount of drawback received by Heung-Ah, and relied on total duties paid as a measure of drawback received under 19 U.S.C. § 1677e(b) (1982). The Court disagrees. Commerce is not required to use the packing list weights to determine drawback adjustments as argued by plaintiffs. Commerce is only required to use a method which is verifiable and is not based on data inconsistent with data used in determining other weight-based adjustments. Congress provided for a drawback adjustment when a foreign producer receives a refund of duties it paid on imported materials because of the exportation of the merchandise under investigation. See 19 U.S.C. § 1677a(d)(1)(B). In determining whether such an adjustment should be made, Commerce considers (1) whether the import duty and rebate are directly linked to, and dependent upon, one another; and (2) whether the company claiming the adjustment can show that there were sufficient imports of the imported raw materials to account for the drawback received on the exported product. Remand Determination at 5-6; see Certain Tapered Journal Roller Bearings and Parts Thereof From Italy, 49 Fed.Reg. 2278, 2280 (1984). Commerce determined that both Dong-Ah and Heung-Ah were entitled to receive adjustments for drawback under these criteria. 1290 Its determination was based on a review and verification of drawback applications, quantities of dutiable imported raw materials based on import and export permits, company bank records and data obtained from the Korean Central Bank. See R.Docs. 42B, 132, 136. Since there is sufficient evidence underlying Commerce's determination that both companies qualified for adjustments under 19 U.S.C. § 1677a(d)(1)(B), that determination is supported by substantial evidence and in accordance with law. With respect to Commerce's method of determining the precise amount of statutory drawback for Heung-Ah, 19 U.S.C. § 1677e(b) states in part that: In making their determinations under this subtitle, the administering authority and the Commission shall, whenever a party or any other person refuses or is unable to produce information requested in a timely manner and in the form required, ... use the best information otherwise available. In this case, Commerce sought to obtain information relevant to the amounts of drawback received by Heung-Ah, but the total amount could not be adduced under the recordkeeping practices maintained by Heung-Ah during the period of the investigation. Transcript of telephone conference of November 25, 1986, at 25-26. Commerce's use of total duties paid as a measure of total drawback rebated was grounded on Korean law, which permits drawback in the full amount of duties paid. The Court holds that under these circumstances there is a sufficient basis to conclude that Heung-Ah was "unable to produce information" regarding total drawback within the meaning of the best information rule, 19 U.S.C. § 1677e(b). The Court further holds that Commerce's measurement of Heung-Ah's adjustment under 19 U.S.C. § 1677a(d)(1)(B) was reasonable in view of Korean law and this Court's holding that an adjustment for drawback may not exceed the amount of duties paid on raw materials contained in the merchandise exported to the United States. Plaintiffs also argue that by allocating a total drawback pool over individual sales rather than relying on the packing list data, an overadjustment occurs when drawback allocated to a particular sale exceeds the drawback that would be allocated using the packing list data. "Thus each time Commerce's reallocation of drawback yields an adjustment amount for a particular sale that exceeds the amount of drawback actually received by reason of that transaction, Commerce unlawfully overadjusts, arbitrarily inflates United States price, and makes an unfair comparison with home market sales of the same size at prices which presumably include a lesser amount of unrefunded import duties." Letter of counsel for plaintiffs, dated February 16, 1987, at 1-2. The Court finds nothing in the statute which prohibits Commerce from allocating total statutory drawback to arrive at a uniform drawback allotment for tube models which is then used to make adjustments in individual sales. Even if Commerce disregarded the verified merchandise weights and used the packing list weights to determine both adjustments, allocations would have to be made to convert packing list information from a shipment basis. The Court has previously affirmed Commerce's discretion in making adjustments based on allocations of aggregate data. See Brothers Industries, Ltd. v. United States, 3 CIT 125, 540 F. Supp. 1341, 1363-64 (1982). Plaintiffs' suggestion that Commerce reintroduce data from the packing lists and cap drawback for each United States sale at the amount which would apply to each sale using the packing list data would result in Commerce's use of inconsistent weight data, the same irregularity which precipitated the remand. By allocating the total duties paid that were refunded by Korea over individual sales using the merchandise weights, Commerce has applied drawback consistently to tires of uniform weight. Since Commerce has properly chosen to allocate aggregate drawback over individual transactions and to use a consistent set of weights for its weight-based adjustments, 1291 the remand results showing less than fair value margins of 0.017% for Dong-Ah and 0.03% for Heung-Ah is supported by substantial evidence and in accordance with law. Since the margins are concededly de minimis, Commerce's negative less than fair value determination is sustained. II. Conclusion The purpose of the remand was to eliminate the possibility that Commerce's final negative determination was caused by Commerce's use of conflicting weights in the course of making different adjustments. It is now clear that it did not. The action is dismissed. Judgment will be entered accordingly. So ordered.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367560/	173 S.W.3d 565 (2005) Perry HOMES, A Joint Venture; Home Owners Multiple Equity, Inc. d/b/a Home/RWC of Texas; and Warranty Underwriters Insurance Company, Appellants v. Robert E. CULL and S. Jane Cull, Appellees. No. 2-04-052-CV. Court of Appeals of Texas, Fort Worth. August 31, 2005. 568 Gardere Wynne Sewell L.L.P., Geoffrey H. Bracken and Stacy R. Obenhaus, Houston, Hance Scarborouh Wright Woodward & Weisbart L.L.P., Kent R. Hance, Austin, Johnson, Christopher, Javore & Cochran, Inc., Gary W. Javore, San Antonio, TX, for Appellant. Thomas M. Michel, Bourland, Kirkman, Seidler, Jay & Michel, L.L.P., Fort Worth, for Appellee. PANEL B: DAUPHINOT, HOLMAN, and WALKER, JJ. OPINION LEE ANN DAUPHINOT, Justice. Appellees Robert and Jane Cull ("the Culls") sued Appellants Perry Homes, A Joint Venture ("Perry Homes"), Home Owners Multiple Equity, Inc. d/b/a Home/RWC of Texas ("HOME"), and Warranty Underwriters Insurance Company ("WUIC") for the faulty construction of their home. Approximately a year after filing suit, the Culls filed a motion to compel arbitration. Although Appellants opposed arbitration, the trial court granted the Culls' motion to compel arbitration. After arbitration was completed, the Culls filed a motion to confirm the arbitration award, and Appellants filed a motion to vacate or alternatively to modify the arbitration award. In its final judgment, the trial court confirmed the arbitration award. In six issues, Appellants now generally argue that the trial court erred by compelling the parties to participate in arbitration, confirming the resulting arbitration award, and denying Appellants' motion to vacate or modify that award. Because we hold that (1) the Culls did not waive arbitration, (2) the arbitrator was not evidently partial, (3) the arbitrator did not act in manifest disregard of the law, and (4) the Culls did not fail to meet their summary judgment burden, but (5) the trial court did err by failing to modify its award of post-judgment interest that was awarded in addition to the interest in the arbitration award, we affirm the trial court's judgment as modified. BACKGROUND FACTS In 1996, the Culls purchased a newly constructed home from Perry Homes for $233,730 and also purchased a home warranty from HOME and WUIC. After years of struggling with Appellants over repairs required to fix significant structural damage caused by foundation and drainage problems, which lowered the appraised value of the home to $41,000, in 2000, the Culls filed suit against Appellants. HOME and WUIC filed a motion to compel 569 arbitration. The Culls opposed the use of the American Arbitration Association ("AAA") as unconscionable, but they did not oppose arbitration. The trial court never ruled on this motion. After about a year of discovery, the Culls filed a combined motion to compel arbitration and plea in abatement four days before trial. The trial court granted arbitration. Appellants filed a petition for writ of mandamus, arguing that the Culls waived the right to arbitration. In April of 2002, this court denied Appellants' petition, and in May of 2002, the Texas Supreme Court denied Appellants' petition. This case then proceeded to arbitration. The parties jointly selected the arbitrator and did not object even after receiving his disclosure that he had litigated residential construction suits for fifteen years, was familiar with two of the experts, and had opposed Perry Homes's trial counsel's firm on multiple occasions but had not had any dealings with Perry Homes's specific counsel. The Culls submitted their statement of claims in arbitration. They claimed negligence, gross negligence, breach of contract and warranty, violations of the DTPA, common law fraud and fraud under the business code, violations of the insurance code, and breach of the duty of good faith. In addition to damages, the Culls requested attorney's fees and litigation/arbitration expenses including court costs, arbitration costs, and expert fees. After the arbitrator heard the case, he awarded the Culls over $800,000 in damages, costs, and attorney's fees. The Culls filed a motion to confirm the arbitration award in the trial court. In response, Appellants filed a motion to vacate or alternatively to modify the arbitration award. Following a hearing, the trial court granted the Culls' motion and confirmed the arbitration award in its final judgment. WAIVER OF THE RIGHT TO ARBITRATE In their first issue, Appellants argue that the Culls waived their right to arbitrate. We disagree. Because public policy favors arbitration, the Federal Arbitration Act ("FAA") imposes a strong presumption against waiver.[1] Waiver of an arbitration right must be intentional.[2] Thus, implying waiver from a party's actions is appropriate only if the facts demonstrate that the party seeking to enforce arbitration intended to waive its arbitration right.[3] The party seeking to prove waiver bears a "heavy burden of proof," and any doubts regarding waiver are resolved in favor of arbitration.[4] Courts will not find that a party has waived its right to enforce an arbitration clause by merely taking part in litigation unless it has substantially invoked the judicial process to its opponent's detriment.[5] Therefore, the test for determining 570 waiver is two-pronged: (1) did the party seeking arbitration substantially invoke the judicial process; and (2) did the opposing party prove that it suffered prejudice as a result?[6] In this case, the parties participated in written and oral discovery, presented motions to compel discovery, and received orders disposing of those motions. Although Appellants allege that the Culls opposed arbitration early on, the Culls merely opposed the use of the AAA; the Culls did not oppose arbitration as a whole. Furthermore, HOME and WUIC did not obtain a ruling on their early motion to compel arbitration. Additionally, the Culls did not ask the court to make any judicial decisions on the merits of their case, for example, by requesting summary judgment or participating in trial.[7] Thus, this case is not a case in which a party who has tried and failed to obtain a satisfactory result in court then turns to arbitration.[8] Even if we were to assume without deciding that the Culls had substantially invoked the judicial process, the second prong of the test would defeat Appellants' claim of waiver. Our review of the record shows that Appellants presented no evidence that they suffered prejudice in their response to the Culls' motion to compel arbitration or at the hearing on the motion. As the trial court noted at the hearing, Appellants' claim of prejudice was that they have participated in litigation activities that may or may not have been required by the arbitrator. Although generally referencing discovery requests and depositions taken, Appellants did not provide any evidence of the work done, time spent, or costs incurred that would not have been done or incurred in anticipation of an arbitration hearing. It was not until after the arbitration had been completed that Appellants, in their motion to vacate or, alternatively, modify the arbitration award and their response to plaintiffs' motion to confirm arbitration, provided evidence of the work, time, and costs to prove they suffered prejudice. In determining whether the Culls waived arbitration, however, we review only the evidence that was before the trial court when it ruled on the Culls' motion to compel arbitration, not evidence submitted untimely.[9] Because Appellants failed to provide sufficient evidence of prejudice at the proper time, we hold that the Culls did not waive arbitration. We overrule Appellants' first issue. GROUNDS FOR VACATING ARBITRATION AWARD Arbitration awards can be vacated on limited grounds. The FAA provides four grounds for vacating an arbitration award: (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or 571 (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.[10] In addition to the four grounds the FAA provides, federal common law allows for vacating an arbitration award when the arbitrator manifestly disregards the law.[11] A. EVIDENT PARTIALITY In their third issue, Appellants argue that the trial court erred by refusing to vacate the arbitration award because the arbitrator's failure to disclose that he represented homeowners in residential construction cases constituted evident partiality. We disagree. The trial court must vacate an award if a neutral arbitrator exhibits "evident partiality."[12] A neutral arbitrator selected by the parties or their representatives exhibits evident partiality if he does not disclose facts that might create a reasonable impression of the arbitrator's partiality to an objective observer.[13] Courts have recognized that parties agree to arbitrate because they prefer a panel with expertise regarding the subject matter of dispute, and this expertise often comes from experience in the field, which may have involved personal dealings with the parties.[14] Information regarding a relationship with a partysuch as representation or familial or close social tiesshould be disclosed, but a neutral arbitrator need not disclose relationships or connections that are trivial.[15] In this case, the arbitrator disclosed that he knew a lot of the attorneys in Perry Homes's trial counsel's firm, that he had represented clients in which Perry Homes's trial counsel's firm represented the opposing party, and that he did not know the attorney in this case. He disclosed that he had litigated residential construction cases for about fifteen years, so "a number of the witnesses [were] familiar to [him] or [he had] heard of them." He further disclosed that one of the witnesses "did a report on [his] client's property" and that another witness "did a foundation analysis on [his] client's home and was being paid by the builder." Despite the arbitrator's statements that he had fifteen years' experience in the residential construction field, implying that he had represented residential homeowners in these cases, and that Appellant Perry Homes's trial counsel's firm had actually litigated against him in previous cases, Appellants allege that because they discovered after arbitration that the arbitrator had represented homeowners in five cases, the arbitrator was evidently partial. We disagree and hold that the arbitrator properly disclosed information that might indicate bias before the arbitration began. Appellants did not object. 572 Additionally, although Appellants allege that the arbitrator represented homeowners in five residential construction cases, they did not produce any withheld evidence (1) of the total number of cases that the arbitrator handled during his practice of at least fifteen years or the percentage of cases that he handled on behalf of homeowners versus builders, (2) that he knew any of the parties in this case, or (3) that he had an association with anyone or a membership anywhere that would create a reasonable impression of the arbitrator's partiality to an objective observer.[16] Thus, we hold that the undisclosed information complained about was trivial. We overrule Appellants' third issue. B. MANIFEST DISREGARD OF THE LAW In their fifth issue, Appellants argue that the arbitrator acted in manifest disregard of the law by awarding the Culls expert witness fees and disregarded the argument that the Culls had waived arbitration. We disagree. An arbitrator's interpretation of the law is not subject to review for error unless the arbitrator manifestly disregarded the law in his decision.[17] "Manifest disregard of the law" is a judicially-created ground for vacating arbitration awards.[18] Manifest disregard of the law is more than mere error or misunderstanding with respect to the law.[19] Under this standard, the arbitrator clearly recognizes the applicable law, but chooses to ignore it.[20] "To adopt a less strict standard of judicial review would be to undermine our well-established deference to arbitration as a favored method of settling disputes when agreed to by the parties."[21] Therefore, the court's "review for manifest disregard of the law does not open the door to extensive judicial review."[22] Accordingly, judicial review under this standard is "extremely limited."[23] The party seeking to 573 vacate an arbitration award bears the burden of demonstrating the arbitration panel acted in manifest disregard of the law.[24] In this case, Appellants rely only on the general rule that although the prevailing party will recover all court costs, costs of experts are incidental expenses in preparation for trial and not recoverable.[25] This rule, however, does not apply where a statute or contract provides for recovery of witness fees.[26] While the contracts between the Culls and Appellants do not discuss expert witness fees, Texas law permits recovery of expert witness fees for statutory fraud in real estate claims.[27] Furthermore, the AAA rules authorize the arbitrator to "grant any remedy or relief that the arbitrator deems just and equitable."[28] Thus, the arbitrator did not act with manifest disregard of the law when he awarded expert fees. Additionally, because we have already held that the Culls did not waive their right to arbitrate the claims in this case, the arbitrator did not act with manifest disregard of the law by ruling that the Culls did not waive arbitration. Consequently, we overrule Appellants' fifth issue. BURDEN OF PROOF In their fourth issue, Appellants alternatively argue that the Culls failed to meet their summary judgment burden to negate Appellants' defense of evident partiality. We disagree. A defendant is entitled to summary judgment on an affirmative defense if the defendant conclusively proves all the elements of the affirmative defense.[29] To accomplish this, the defendant-movant must present summary judgment evidence that establishes each element of the affirmative defense as a matter of law.[30] In this case, it was Appellants' burden to prove their defense, and, although the Culls could have filed a reply to Appellants' response to their motion to confirm the arbitration award, the Culls were not required to put on evidence to negate Appellants' defense. As set forth above, Appellants did not conclusively prove that the arbitrator was evidentially partial. We overrule Appellants' fourth issue. MODIFICATION OF THE TRIAL COURT'S JUDGMENT In their sixth issue, Appellants argue that the trial court erred by refusing to modify its judgment to correct errors in the arbitration award that resulted in contradictory deadlines for complying with the injunctive relief, an award of interest above what the arbitrator awarded, an award of post-confirmation attorney's fees, and an award of costs taxed on parties that the Culls had previously nonsuited. 574 First, Appellants argue that the award of post-arbitration attorney's fees exceeded the arbitrator's authority. We disagree. Although a trial court may not add post-arbitration attorney's fees to the arbitration award that includes such fees in its final judgment, the arbitrator may award such fees in the arbitration award.[31] Additionally, attorney's fees are allowed in cases such as this one involving DTPA and fraud in real estate claims.[32] Thus, the trial court did not err by confirming the arbitrator's award of post-arbitration attorney's fees in its final judgment. Second, Appellants argue that the trial court's judgment should be modified because it awards costs on parties that the Culls previously nonsuited. We disagree. Because Jerald W. Kunkel, P.E., and Jerald W. Kunkel, P.E., Inc., d/b/a Jerald W. Kunkel Consulting Engineers, Inc. had been nonsuited before the final judgment, the trial court's reference to "defendants" in its final judgment refers to the remaining defendants in this case regardless of the fact that the nonsuited defendants remained in the style of the case. Appellants were the only remaining defendants at the time of the trial court's judgment, and thus, the trial court's judgment makes them and only them responsible for the fees. Third, Appellants allege that the judgment is inconsistent in two respects. The judgment provides that the closing shall take place within sixty days after the date of the judgment, but it also provides that the actions are to be taken and sums paid on or before thirty days from the date of the judgment. Although Appellants have not clearly specified the modification in the dates of the judgment requested, the Culls agree to a modification of the judgment to state that the closing shall take place within sixty days after the date of the final judgment and that all other sums not related to paragraph (a) shall be due thirty days after the date of the final judgment. Because this modification appears to represent Appellants' requested modification and will resolve any alleged inconsistency in the judgment, we modify the judgment to reflect those changes.[33] Finally, Appellants argue that the trial court erred by awarding interest in addition to what the arbitrator awarded. Because the trial court's judgment regarding this additional interest is ambiguous, we agree with Appellants. The trial court's judgment states that "the judgment here rendered shall bear post-judgment interest at the rate of 10% per annum from the date of signing until paid." This interest could be interpreted to add 10% interest on the interest awarded by the arbitrator, which was "ten percent (10%) per annum from thirty (30) days after the date of this Award until paid." We find no statutory or case law in support of this modification.[34] Thus, the trial court should not have included this additional interest in its judgment. We therefore further modify the trial court's judgment to delete "that the Judgment here rendered shall bear post-judgment interest at the rate of 10% per annum from the date of signing until paid" and overrule the remaining arguments Appellants raised in their sixth issue. 575 FINDINGS OF FACT Alternatively, Appellants argue in their second issue that the trial court erred by failing to enter findings of fact and request that this case be abated to the trial court for entry of findings of fact. According to Rules 296 and 297 of the Texas Rules of Civil Procedure, a trial judge must prepare findings of fact in cases tried in the district court or county court without a jury, that is, where there has been an evidentiary hearing to the court or a bench trial on the merits.[35] When a trial court grants summary judgment relief, however, findings of fact have no place in the proceeding because the summary judgment proceeding has not been "tried" within the scope of Rule 296.[36] Although Appellants argue in this issue that the motion to vacate hearing was an evidentiary hearing requiring findings of fact, they contradictorily argue in their fourth issue that their motion to vacate the arbitration award was their response to the Culls' motion to confirm the arbitration award, which was a summary judgment proceeding. Our review of the record shows that this hearing was not a bench trial on the merits of the case. The hearing was held in the form of a summary judgment hearing; only arguments were given, no live testimony was given, and the only evidence presented was not offered or admitted at the hearing but was attached to the parties' motions. Thus, because findings of fact have no place in summary judgment proceedings,[37] we overrule Appellants' second issue. CONCLUSION Having held that the trial court erred by awarding post-judgment interest in addition to the interest awarded by the arbitrator, we modify the trial court's judgment by removing the following, "[T]hat the Judgment here rendered shall bear post-judgment interest at the rate of 10% per annum from the date of signing until paid." Having held that the trial court's judgment is ambiguous regarding the time periods by which Appellants must comply with the judgment, we modify the paragraph following paragraph g. of the trial court's judgment to state, "The action are to be taken and sums are to be paid as set forth in paragraphs b., c., d., e., f., and g., herein, on or before thirty (30) days from the date of this Final Judgment." We affirm the trial court's judgment as modified. NOTES [1] In re Bruce Terminix Co., 988 S.W.2d 702, 704 (Tex.1998) (orig.proceeding); EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 89 (Tex. 1996); Tex. Residential Mortgage, L.P. v. Portman, 152 S.W.3d 861, 863 (Tex.App.-Dallas 2005, no pet.); In re Medallion, Ltd., 70 S.W.3d 284, 288 (Tex.App.-San Antonio 2002, orig. proceeding). [2] EZ Pawn Corp., 934 S.W.2d at 89; Tex. Residential Mortgage, L.P., 152 S.W.3d at 863; In re Medallion, Ltd., 70 S.W.3d at 288. [3] EZ Pawn Corp., 934 S.W.2d at 89; Tex. Residential Mortgage, L.P., 152 S.W.3d at 863; In re Medallion, Ltd., 70 S.W.3d at 288. [4] EZ Pawn Corp., 934 S.W.2d at 90; Tex. Residential Mortgage, L.P., 152 S.W.3d at 863; In re Medallion, Ltd., 70 S.W.3d at 288. [5] In re Bruce Terminix Co., 988 S.W.2d at 704; EZ Pawn Corp., 934 S.W.2d at 89; Tex. Residential Mortgage, L.P., 152 S.W.3d at 863; In re Medallion, Ltd., 70 S.W.3d at 288. [6] Tex. Residential Mortgage, L.P., 152 S.W.3d at 863; In re Medallion, Ltd., 70 S.W.3d at 288. [7] See In re Bruce Terminix Co., 988 S.W.2d at 704. [8] See id. [9] See McClure v. Denham, 162 S.W.3d 346, 349 n. 2 (Tex.App.-Fort Worth 2005, no pet.). [10] 9 U.S.C. § 10(a) (2002). [11] Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., 105 S.W.3d 244, 252 (Tex. App.-Houston [14th Dist.] 2003, pet. denied); Int'l Bank of Commerce-Brownsville v. Int'l Energy Dev. Corp., 981 S.W.2d 38, 48 (Tex. App.-Corpus Christi 1998, pet. denied), cert. denied, 528 U.S. 1137, 120 S.Ct. 982, 145 L.Ed.2d 932 (2000); Bull HN Info. Sys., Inc. v. Hutson, 229 F.3d 321, 331 (1st Cir.2000). [12] Tex. Commerce Bank v. Universal Technical Inst. of Tex., Inc., 985 S.W.2d 678, 680 (Tex. App.-Houston [1st Dist.] 1999, pet. dism'd w.o.j.). [13] Burlington N. R.R. Co. v. TUCO, Inc., 960 S.W.2d 629, 636 (Tex.1997); Tex. Commerce Bank, 985 S.W.2d at 680. [14] See, e.g., TUCO, 960 S.W.2d at 633. [15] Id. at 637. [16] See Houston Vill. Builders, Inc. v. Falbaum, 105 S.W.3d 28, 35 (Tex.App.-Houston [14th Dist.] 2003, pet. denied) (holding that undisclosed representation of an association that the arbitrator disclosed he was a member of and the association will be affected by the outcome of the case is evident partiality); Tex. Commerce Bank, 985 S.W.2d at 681 (holding that undisclosed representation of a party is evident partiality). [17] Int'l Bank of Commerce-Brownsville, 981 S.W.2d at 48. [18] Tanox, 105 S.W.3d at 252; Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418, 421 (6th Cir.1995). [19] Tanox, 105 S.W.3d at 252; LaPrade v. Kidder, Peabody & Co., Inc., 246 F.3d 702, 706 (D.C.Cir.2001); Jaros, 70 F.3d at 421; Health Servs. Mgmt. Corp. v. Hughes, 975 F.2d 1253, 1267 (7th Cir.1992); Carte Blanche (Singapore) Pte., Ltd. v. Carte Blanche Int'l, Ltd., 888 F.2d 260, 265 (2d Cir.1989). [20] Tanox, 105 S.W.3d at 252; Wonderland Greyhound Park, Inc. v. Autotote Sys., Inc., 274 F.3d 34, 36 (1st Cir.2001); Mo. River Servs., Inc. v. Omaha Tribe of Neb., 267 F.3d 848, 855 (8th Cir.2001), cert. denied, 535 U.S. 1053, 122 S.Ct. 1909, 152 L.Ed.2d 820 (2002); Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217, 1223 (11th Cir.2000); Williams v. Cigna Fin. Advisors, Inc., 197 F.3d 752, 762 (5th Cir.1999), cert. denied, 529 U.S. 1099, 120 S.Ct. 1833, 146 L.Ed.2d 777 (2000); Jaros, 70 F.3d at 421; Health Servs. Mgmt. Corp., 975 F.2d at 1267. [21] Tanox, 105 S.W.3d at 253; Carte Blanche, 888 F.2d at 265. [22] Tanox, 105 S.W.3d at 253; Dawahare v. Spencer, 210 F.3d 666, 669 (6th Cir.), cert. denied, 531 U.S. 878, 121 S.Ct. 187, 148 L.Ed.2d 130 (2000). [23] Tanox, 105 S.W.3d at 253; Carte Blanche, 888 F.2d at 265; see also Jaros, 70 F.3d at 421 (stating manifest disregard of law is a "very narrow standard of review"). [24] Tanox, 105 S.W.3d at 253; LaPrade, 246 F.3d at 706; Brown, 211 F.3d at 1223. [25] Richards v. Mena, 907 S.W.2d 566, 571 (Tex.App.-Corpus Christi 1995, writ dism'd by agmt). [26] See Thomas v. Prudential Sec., Inc., 921 S.W.2d 847, 849 (Tex.App.-Austin 1996, no writ). [27] TEX. BUS. & COM.CODE ANN. § 27.01(e) (Vernon 2002) ("Any person who violates the provisions of this section shall be liable to the person defrauded for reasonable and necessary attorney's fees, expert witness fees, costs for copies of depositions, and costs of court."). [28] American Arbitration Association, Supplementary Procedures for Residential Construction Disputes, SR-9(a) (2003). [29] Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999). [30] Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 121 (Tex.1996). [31] Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 436 (Tex.App.-Dallas 2004, pet. denied); Int'l Bank of Commerce-Brownsville, 981 S.W.2d at 54. [32] See TEX. BUS. & COM.CODE ANN. §§ 17.50(d), 27.01(e) (Vernon 2002). [33] See 9 U.S.C.A. § 11(c); TEX.R.App. P. 43.2(b). [34] See 9 U.S.C.A. § 11(c); see also Int'l Bank of Commerce-Brownsville, 981 S.W.2d at 54. [35] TEX.R. Civ. P. 296, 297; In re J.I.T.P., 99 S.W.3d 841, 848 (Tex.App.-Houston [14th Dist.] 2003, no pet.); Chavez v. Hous. Auth. of City of El Paso, 897 S.W.2d 523, 525 (Tex. App.-El Paso 1995, writ denied), cert. denied, 517 U.S. 1188, 116 S.Ct. 1674, 134 L.Ed.2d 778 (1996); Zimmerman v. Robinson, 862 S.W.2d 162, 164 (Tex.App.-Amarillo 1993, no writ.). [36] Chavez, 897 S.W.2d at 525-26 (citing Linwood v. NCNB Tex., 885 S.W.2d 102, 103 (Tex.1994)). [37] Linwood, 885 S.W.2d at 103.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367562/	846 P.2d 239 (1993) 123 Idaho 237 IDAHO BRANCH, INC. OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., an Idaho corporation; Idaho Sand & Gravel Company, Inc., an Idaho corporation; Nelson-Deppe, Inc., an Idaho corporation; and Bryan C. Rambo Crushing Company, Inc., Plaintiffs-Appellants-Cross Respondents, v. NAMPA HIGHWAY DISTRICT NO. 1, a political subdivision of the State of Idaho; Canyon Highway District No. 4, a political subdivision of the State of Idaho, Defendants-Respondents-Cross Appellants, and WEST ONE BANK, IDAHO, NATIONAL ASSOCIATION, formerly known as The Idaho First National Bank, Defendant-Respondent. No. 19352. Court of Appeals of Idaho. February 3, 1993. 240 Hall, Farley, Oberrecht & Blanton, Boise, for appellants. Phillip S. Oberrecht, argued. White, Peterson, Perry, Pruss, Morrow and Gigray, P.A., Nampa, for respondents. William F. Gigray III, Caldwell, argued. SWANSTROM, Judge. This is an action brought by a contractors' association and some of its members against two highway districts and a bank for declaratory and injunctive relief. The complaint alleged that the districts had violated provisions of the Idaho Constitution in financing and purchasing a rock crusher for the joint use of the districts. The trial court dismissed the action, on defendants' motions, ruling that the plaintiffs lacked standing to contest the constitutionality of the highway districts' actions in purchasing and financing the equipment. The plaintiffs appealed the order dismissing their action. The defendants cross-appealed, contending the court erred in denying their request for attorney fees. For the following reasons, we affirm. In May, 1986, Nampa Highway District No. 1 and Canyon Highway District No. 4 (the districts) entered into a "Municipal Equipment Financing Agreement" with Idaho First National Bank (now West One Bank) to finance the purchase of a rock crusher over a six-year term. By an earlier agreement, the districts had joined together for the purpose of operating a rock crusher and related equipment to supply the gravel needs of the two districts. The commissioners of each district formed the governing board of the crushing operation, loaned specified pieces of equipment to the operation and created a joint operating fund. The budget of the joint fund for the crushing operation was to be adopted at a board meeting only after the respective public hearings and approval of each district's share of the joint venture. Idaho Branch, Inc. of The Associated General Contractors of America, Inc., (Idaho AGC) is an Idaho non-profit cooperative association of construction contractors, whose purposes include the advancement of the general welfare of such contractors in Idaho. Idaho AGC and three of its member contractors (plaintiffs) sought to have the financing agreement between the districts and the bank invalidated. Plaintiffs alleged that the agreement violated art. 7, § 17 and art. 8, § 3 of the Idaho Constitution, dealing with limitations on county indebtedness and dedication of highway user fees to specified uses, not including the 241 purchase of a rock crusher.[1] They asserted that, as taxpayers, they were harmed by the action of the districts, and as competitor gravel producers, they were deprived of their right to bid on contracts to supply the gravel needs of the districts, causing them to suffer business losses. Their complaint prayed for no damages, but only for a declaratory judgment holding that the financing agreement was "void and unenforceable," for an injunction precluding the purchase of the crusher, and for attorney fees and costs. The districts and the bank answered the complaint and subsequently filed motions to dismiss, asserting that the plaintiffs failed to state a claim upon which relief could be granted. I.R.C.P. 12(b)(6). After extensive discovery, plaintiffs moved for summary judgment, supporting the motion with affidavits, exhibits and deposition testimony. A hearing was held on all pending motions. In support of their motions to dismiss, the districts argued that plaintiffs had no standing to pursue their action for a declaratory judgment. The trial court agreed. The court reasoned "that neither Article 8, § 3 nor Article 7, § 17 of the Idaho Constitution protects the interests sought to be protected by the Plaintiffs." The court granted the districts' motion to dismiss and entered an order dismissing the action on grounds that the plaintiffs lacked standing.[2] Accordingly, the court did not reach the merits of the plaintiffs' motion for summary judgment. The plaintiffs appealed. The standard for reviewing a Rule 12(b)(6) dismissal is the same standard applicable to motions for summary judgment. I.R.C.P. 12(b), 56; Miles v. Idaho Power Co., 116 Idaho 635, 637, 778 P.2d 757, 759 (1989); Tomchak v. Walker, 108 Idaho 446, 700 P.2d 68 (1985). "The nonmoving party is entitled to have all inferences from the record viewed in his favor and only then may the question be asked whether a claim for relief has been stated." Miles v. Idaho Power Co., 116 Idaho at 637, 778 P.2d at 759. We will review freely any statements of law and the conclusion that the facts shown did not entitle the contractors to any relief. Staggie v. Idaho Falls Consol. Hospitals, Inc., 110 Idaho 349, 351, 715 P.2d 1019, 1021 (Ct.App.1986). Where, as here, we are dealing with facts of peculiar constitutional significance, i.e., standing, we will evaluate the entire record independently to assure a proper application of constitutional principles. IDAHO APPELLATE HANDBOOK Standards of Appellate Review § 3.3.6.1 (Idaho Law Foundation, Inc. 1985). The contractors argue that the trial court should have determined that they had standing under art. 7, § 17 and art. 8, § 3. 242 In addition to claiming a generalized harm common to all taxpayers, the contractors alleged that the specialized harm which they suffered as a result of the districts' action was a loss of business opportunity and revenues from future contracts to sell gravel to the districts. They contend that the trial court's ruling that they had no standing was contrary to Miles v. Idaho Power Co., supra, which requires only a specialized and peculiar injury to confer standing upon a taxpayer to challenge governmental action. Plaintiffs have brought this action within the framework of the (Idaho) Uniform Declaratory Judgment Act. Certain sections of the Act are pertinent to the issue of "standing." Idaho Code § 10-1202 provides that "[a]ny person ... whose rights, status or other legal relations are affected by a ... contract ... may have determined any question of construction or validity arising under the ... contract ... and obtain a declaration of rights, status or other legal relations thereunder." The general power of the courts to declare rights, status, and other legal relations is not limited by the enumeration of specific subjects for declaratory judgment relief which will terminate an actual controversy or remove an uncertainty. I.C. § 10-1205. However, a court may refuse to render a declaratory judgment or decree if the judgment would not terminate the uncertainty or controversy giving rise to the proceeding. I.C. § 10-1206. The Act is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations, and is to be liberally construed and administered. I.C. § 10-1212. Finally, the Act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of the states which enact it, and to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees. I.C. § 10-1215. As shown above, to have standing a plaintiff must show the existence of an actual controversy which can be resolved or terminated by the action. I.C. §§ 10-1205, -1206. In Harris v. Cassia County, 106 Idaho 513, 681 P.2d 988 (1984), the Idaho Supreme Court summarized the elements or criteria of a "justiciable controversy" taken from Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617 (1937), saying "we will apply these criteria in conjunction with pertinent Idaho case law cited infra." 106 Idaho at 516, 681 P.2d at 991 (citations omitted). A "controversy" in this sense must be one that is appropriate for judicial determination. ... A justiciable controversy is thus distinguished from a difference or dispute of a hypothetical or abstract character; from one that is academic or moot.... The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests. ... It must be a real and substantial controversy admitting of specific relief through a decree of conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. Harris v. Cassia County, 106 Idaho at 516, 681 P.2d at 991. Our Supreme Court reiterated a previous holding that the right sought to be protected by a declaratory judgment "may invoke either remedial or preventive relief; it may relate to a right that has either been breached or is only yet in dispute or a status undisturbed but threatened or endangered; but, in either or any event, it must involve actual and existing facts." 106 Idaho at 516-17, 681 P.2d at 991-92 (citations omitted). A more recent discussion of "standing" is found in Miles v. Idaho Power Co., supra. There, a challenge was made to the standing of a utility ratepayer who had brought a declaratory judgment action challenging the constitutionality of a contract between the utility and the State of Idaho, in which the utility agreed to relinquish certain of its water rights. Again, primarily, the Idaho Supreme Court looked for guidance to federal decisions and to its own prior decisions. The Court noted that the doctrine of standing focuses on the party seeking relief and not on the issues the party wishes to have adjudicated. The 243 Court adopted language from Duke Power Co. v. Carolina Env. Study Group, 438 U.S. 59, 72, 98 S.Ct. 2620, 2630, 57 L.Ed.2d 595 (1978), as an apt explanation of "the major aspect of standing." "The essence of the standing inquiry is whether the party seeking to invoke the court's jurisdiction has "alleged such a personal stake in the outcome of the controversy as to assure the concrete adversariness which sharpens the presentation upon which the court so depends for illumination of difficult constitutional questions." As refined by subsequent reformation, this requirement of "personal stake" has come to be understood to require not only a "distinct palpable injury" to the plaintiff, but also a "fairly traceable" causal connection between the claimed injury and the challenged conduct. (Citations omitted.)" Duke Power Co. v. Carolina Env. Study Group, 438 U.S. 59, 72, 98 S.Ct. 2620, 2630, 57 L.Ed.2d 595 (1978). Miles v. Idaho Power Co., 116 Idaho at 641, 778 P.2d at 763. See also Bentel v. County of Bannock, 104 Idaho 130, 135-36, 656 P.2d 1383, 1388-89 (1983). The Court repeated in Miles that a central foundation of the Idaho Declaratory Judgment Act is the requirement of adverse parties, citing Whitney v. Randall, 58 Idaho 49, 70 P.2d 384 (1937). The Court explained that "[f]or the parties to be in an adversarial position, they must have such a personal stake in the outcome of the controversy that a meaningful representation and advocacy of the issues is ensured." 116 Idaho at 641, 778 P.2d at 763. The Court concluded that to have standing to bring a declaratory judgment action, the plaintiffs must present more than a generalized grievance shared by other citizens and taxpayers; they must assert a "specialized and peculiar injury, although it may affect a large class of individuals." 116 Idaho at 642, 778 P.2d at 764. The Court held, however, that the injury asserted by Miles as a ratepayer and customer of Idaho Power, not as a taxpayer, was sufficient to confer standing to challenge the agreement between the state and the power company. The Court also determined that the ratepayers were the group most adverse to the agreement in question. Concluding that Miles had the requisite standing to bring the action, the Court went on to address the merits, that is, whether the ratepayer's constitutional rights to due process and equal protection were violated by the challenged agreement. In the present case, the trial court assumed "arguendo" that plaintiffs asserted an actual injury, that is, past and future pecuniary losses resulting from the lost opportunities to competitively bid on the districts' gravel needs. The trial court then went to the second part of the analysis, suggested by Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975) and by State Bd. for Community Colleges & Occupational Educ. v. Olson, 687 P.2d 429, 434-35 (Colo. 1984), which is to determine "whether the injury is to a legally protected or cognizable interest." The court must determine whether the particular constitutional or statutory provision underlying the claim creates a right or interest in the plaintiff that has been arguably abridged by the challenged governmental action. A determination that standing exists thus amounts to a holding that the plaintiff has stated a claim for relief by demonstrating the existence of a legal right or interest which has been arguably violated by the action of the defendant. Id., 687 P.2d at 435 (citations omitted). The trial court held that the plaintiffs failed to meet this part of the Warth-Olson test, and thus lacked standing to challenge the districts' actions. The trial court's decision seemingly is based on the plaintiffs' inability to show that either of the constitutional provisions which they contend were violated creates a right or guarantees an opportunity in the contractors to bid on the districts' gravel needs. The language used by the trial court suggests that the court may have imposed a more restrictive test for standing than our Supreme Court has announced and, in spite 244 of his "no standing" ruling, may have implicitly ruled in part on the merits. In the trial court, as on appeal, the plaintiffs urged that plaintiffs met the test for standing which was announced in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970), and Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970). In these two cases the Court attempted to enunciate a test that determines a party has "standing" if he "is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." 397 U.S. at 153, 90 S.Ct. at 829. The Court said, however, that this inquiry does not involve a determination that the "plaintiff has a legally protected interest which the defendant invaded," because that inquiry would go to the merits of the action. 397 U.S. at 171, 90 S.Ct. at 840 (emphasis added). We confess that this nice distinction is not easily discernable, nor is it always followed by the courts.[3] In the present case, the trial court opined that the "`zone of interests' is analogous to `legally protected or cognizable interest.'" Following the analysis set forth in O'Bryant v. Public Utilities Comm'n of the State of Colorado, 778 P.2d 648 (Colo.1989), the trial court held that "neither art. 8, § 3 nor art. 7, § 17 of the Idaho Constitution protects the interests sought to be protected by Plaintiffs." The court concluded that plaintiffs had no standing to bring the action. As noted earlier, the test adopted by the Idaho Supreme Court is one couched in different language adopted from Duke Power Co. v. Carolina Env. Study Group, supra. Our Supreme Court has held that to invoke the trial court's jurisdiction in a declaratory judgment action, the plaintiffs must allege a "personal stake" in the outcome of the controversy, which "has come to be understood to require not only a `distinct palpable injury' to the plaintiff, but also a `fairly traceable' causal connection between the claimed injury and the challenged conduct." Miles v. Idaho Power Co., 116 Idaho at 641, 778 P.2d 757, quoting Duke Power Co., 438 U.S. 59, 72, 98 S.Ct. 2620, 2629, 57 L.Ed.2d 595 (1978). In applying this test, we conclude that the plaintiffs did have standing to bring the action for a declaratory judgment. The "challenged conduct" is the action taken by the districts to own and operate a gravel crusher, allegedly in violation of art. 7, § 17 and art. 8, § 3 of the Idaho Constitution. There is a "fairly traceable causal connection" between the challenged conduct and the plaintiffs' alleged injury. We believe that in the present case this is sufficient to bestow standing upon the plaintiffs. Compare Hobbs v. Abrams, 104 Idaho 205, 657 P.2d 1073 (1983) (beer retailer held to have standing to challenge the constitutionality of a county ordinance which allegedly conflicted with state statute even though retailer's asserted rights were not derived from the statute). A "justiciable controversy" exists, as defined in Harris, supra. The plaintiffs have shown that they have such "a personal stake in the outcome of the controversy that a meaningful representation and advocacy of the issues is ensured." Miles v. Idaho Power Co., 116 Idaho at 641, 778 P.2d at 763. Indeed, we are unable to suggest any other group or advocate outside of the political arena who would have any greater interest in questioning the districts' scheme to own and operate their own gravel crushing equipment rather than to obtain gravel from commercial sources through the bidding process. For the foregoing reasons, we hold that the trial court 245 erred in holding that the plaintiffs lacked standing to bring the action. This conclusion does not end our inquiry, however. In ruling that plaintiffs have standing, we may have only traced a fine line between lack of standing and lack of merits. As we explain below, the trial judge may have strayed over that line and yet reached the right result. The plaintiffs point to no other source except art. 7, § 17 and art. 8, § 3 of our Constitution as the basis for their right to bid for supplying crushed gravel to the districts. Thus, the legal source of their protected right or "status" is the same as the source of their alleged injury, because, they contend, the districts violated these same constitutional provisions by entering into an installment contract for the purchase of gravel crushing equipment. We will address the plaintiffs' arguments relating to the basis of their right to supply, or their right to compete to supply, gravel to the districts. This is an examination into the merits of their claim. Plaintiffs first contend that art. 7, § 17 prohibits the districts from expending proceeds from taxes on motor vehicle fuels and taxes and fees from motor vehicle registration on the purchase of gravel crushing equipment. For purposes of their motion for summary judgment and the defendants' motions to dismiss, the plaintiffs established that the districts were using motor vehicle fees and taxes for the purchase of the equipment. The plaintiffs contend that the districts cannot lawfully purchase gravel crushing equipment with funds which are dedicated "exclusively for the construction, repair, maintenance and traffic supervision of the public highways of this state and [for] the payment of the interest and principal of obligations incurred for said purposes."[4] The districts argue, however, that the Idaho Supreme Court has clearly rejected the narrow view which the plaintiffs take of art. 7, § 17. We agree. In Rich v. Williams, 81 Idaho 311, 341 P.2d 432 (1959), our Supreme Court was asked to decide whether art. 7, § 17 prohibited the use of dedicated highway funds for the construction of an office building to be used jointly by the Department of Highways and the Department of Law Enforcement. The Supreme Court said: Art. 7, § 17, of our Constitution contains words of much broader import relating to the authorized expenditures of the highway fund, than does the Idaho Admission Bill as to expenditure of incomes on the permanent school funds. Those words of broad import contained in said section of the Constitution have been held to include all aspects of laying out, opening, construction and maintenance of an efficient highway system, ... including housing facilities requisite for the proper housing and protection, and the functioning of the myriad of activities necessarily attendant to carrying out the objectives of such section of the Constitution.... 81 Idaho at 322, 341 P.2d at 438 (citations omitted). We believe that Rich supports the districts' position. The plaintiffs have failed to show that the purchase of the equipment with dedicated highway funds was prohibited by art. 7, § 17 of the Idaho Constitution. It follows that art. 7, § 17 creates no right in the plaintiffs which was abridged by the districts' purchase and operation of the equipment. There remains the question of whether the districts' alleged violation of art. 8, § 3 affords a basis for the relief sought by plaintiffs. We have already held that it was not unlawful to use dedicated 246 highway funds to purchase the equipment. Plaintiffs have not argued that the acquisition and operation of such equipment by the district is unlawful per se, only that the manner of its purchase in this instance violated that part of art. 8, § 3 which we have quoted in footnote 1. The trial court did not decide whether the installment contract between the districts and the bank for the purchase of the equipment violated the constitutional limitations on incurring indebtedness or liability exceeding the yearly income and revenues of the districts for one or more of the years involved in the purchase. Assuming, but not deciding, that such a violation occurred, the plaintiffs have not shown how their right to bid is derived from art. 8, § 3. To prevail on the merits, and in order to obtain the declaratory and injunctive relief they seek, they must show that art. 8, § 3 gives them a protected "legal interest." Notwithstanding that plaintiffs purport to represent the taxpayers' interests, as well as their own, the ultimate interests they seek to protect through this action are their own, and such interests may or may not coincide with the interests of other taxpayers of the districts. We believe the trial court correctly determined that the only claimed injury is being deprived of the right to bid to supply gravel. This claimed injury need not even be addressed by the trial court in ruling whether the districts violated art. 8, § 3. The actual interest which the plaintiffs seek to protect by this action is the right to engage in competitive bidding to supply the districts' needs for gravel. It is clear from reading art. 8, § 3 that it is not intended to create or to protect the "legal interest" which plaintiffs seek to protect by this action. Because plaintiffs have failed to show that either art. 7, § 17 or art. 8, § 3 gives them a protected legal interest, their claim for relief must fail on the merits. Accordingly, we hold that any error the trial court may have committed in ruling that plaintiffs lacked standing is harmless error. Cross-Appeal In their cross-appeal, the districts contend that the trial court erred in denying their attorney fee request. The trial court's order is a generic denial and makes no mention of any particular statute, rule, nor contractual basis for an attorney fee award which it might have considered. Neither do we have a transcript of the argument made by counsel outlining the basis for the request. The districts argue on appeal that I.C. § 12-120(3) was the basis for their request. The pertinent part of I.C. § 12-120(3) provides that "in any commercial transaction unless otherwise provided by law, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs." The districts contend, therefore, that the language, "any commercial transaction," encompasses the contractor's challenge to the financing agreement for the rock crusher and entitles them to an attorney fee award. We disagree. Our Supreme Court has ruled that "[a]ttorney's fees are not appropriate under I.C. § 12-102(3) unless the commercial transaction is integral to the claim, and constitutes the basis upon which the party is attempting to recover." Brower v. E.I. DuPont de Nemours & Co., 117 Idaho 780, 784, 792 P.2d 345, 349 (1990). Moreover, we have recently held that "under the most expansive view of the statute [I.C. § 12-120(3)] a lawsuit still must seek resolution of a dispute arising from a commercial transaction between the parties." Idaho Newspaper Foundation v. The City of Cascade, 117 Idaho 422, 424, 788 P.2d 237, 239 (Ct. App.1990). In the case before us, the resolution sought by the contractors is of a dispute arising from a commercial transaction that did not take place; and, therefore, there is no commercial transaction between the parties that can be the basis for an attorney fee award under I.C. § 12-120(3). We hold that the trial court did not abuse its discretion in denying attorney fees. 247 We affirm the district court's order dismissing plaintiffs' action as well as its order denying any award of attorney fees. WALTERS, C.J., concurs. SILAK, Judge, concurring in the result. I concur in the dismissal of the plaintiff's claims, but agree with the district judge that the plaintiffs lacked standing. NOTES [1] [Art. 7] § 17. Gasoline taxes and motor vehicle registration fees to be expended on highways. On and after July 1, 1941 the proceeds from the imposition of any tax on gasoline and like motor vehicle fuels sold or used to propel motor vehicles upon the highways of this state and from any tax or fee for the registration of motor vehicles, in excess of the necessary costs of collection and administration and any refund or credits authorized by law, shall be used exclusively for the construction, repair, maintenance and traffic supervision of the public highways of this state and the payment of the interest and principal of obligations incurred for said purposes; and no part of such revenues shall, by transfer of funds or otherwise, be diverted to any other purposes whatsoever. [Art. 8] § 3. Limitations on county and municipal indebtedness. No county, city, board of education, or school district, or other subdivision of the state, shall incur any indebtedness, or liability, in any manner, or for any purpose, exceeding in that year, the income and revenue provided for it for such year, without the assent of two thirds (2/3) of the qualified electors thereof voting at an election to be held for that purpose, ... unless, before or at the time of incurring such indebtedness, provisions shall be made for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal thereof, within thirty (30) years from the time of contracting the same. Any indebtedness or liability incurred contrary to this provision shall be void: Provided that this section shall not be construed to apply to the ordinary and necessary expenses authorized by the general laws of the state.... [2] "A determination that standing does not exist is equivalent to a holding that the plaintiff has failed to state a claim upon which relief can be granted, because whatever injury the plaintiff might have sustained was not an injury to a legally protected right or interest." State Bd. for Community Colleges and Occupational Educ. v. Olson, 687 P.2d 429, 435 (Colo.1984). [3] See, e.g., O'Bryant v. Public Utilities Comm'n of the State of Colorado, 778 P.2d 648 (Colo.1989); Eckles v. State of Oregon, 306 Or. 380, 760 P.2d 846 (1988) (two concepts of "standing" distinguished). The books are full of opinions that dismiss a plaintiff for lack of "standing" when dismissal, if proper at all, actually rested either upon the plaintiff's failure to prove on the merits the existence of the legally protected interest that he claimed, or on his failure to prove that the challenged agency action was reviewable at his instance. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 176, 90 S.Ct. 827, 843, 25 L.Ed.2d 184 (1970) (Brennan, J., joined by White, J., concurring and dissenting). [4] For the purpose of the "standing" issue, the implicit argument is that if art. 7, § 17 prohibits highway districts from purchasing major items of equipment such as gravel crushers with dedicated funds, then art. 7, § 17 operates to create and protect the right of private contractors, such as the plaintiffs, to provide the crushed gravel needs of the districts. A similar argument was made, successfully, by the plaintiffs in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) (the Association was held to have standing to challenge the legality of a government regulation which permitted national banks to engage in the business of providing data processing services in competition to the members of the Association).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2266460/	461 F.Supp. 145 (1978) David K. RUHLMAN v. Patrick J. HANKINSON and Robert B. Gorman. Civ. A. No. 76-73 Erie. United States District Court, W. D. Pennsylvania. November 7, 1978. 146 H. William White, Franklin, Pa., for plaintiff. Frederick R. Nene, Asst. Atty. Gen., Department of Justice, Pittsburgh, Pa., for defendants. MEMORANDUM DENYING MOTION FOR NEW TRIAL OR IN THE ALTERNATIVE TO AMEND THE JUDGMENT KNOX, District Judge. Plaintiff, a former Pennsylvania State Police sergeant, filed this civil rights suit against defendants,[1] his superior officers, alleging that they violated his civil rights by transferring him from his assignment in Franklin, Pa. to a post in Erie, Pa. Plaintiff contended (1) that the transfer was in retaliation for his exercise of his First Amendment right to freedom of speech, specifically his counselling of the troopers at the Franklin station to oppose the imposition of a quota system relating to numbers of arrests and traffic citations and his revelation of this quota system to a local newspaper reporter[2] and (2) that the transfer denied him due process of law under the Fourteenth Amendment and administrative due process under State Police regulations. This case was tried before a jury in June, 1978, and resulted in a finding in favor of defendant Gorman and against the plaintiff and in favor of plaintiff and against defendant Hankinson. The jury completed a special verdict (a copy of which is attached) and awarded plaintiff $50,000. Judgment was entered on this verdict on June 19, 1978, following which defendant Hankinson filed the motions under consideration here pursuant to FRCP 59(a) and (e). Both motions must be denied. MOTION FOR NEW TRIAL Initially, the court notes that at trial plaintiff discarded his contention that his transfer constituted punishment for having revealed the existence of the quota system to the press,[3] and proceeded on the alternative First Amendment theory that he was transferred for his discussions with certain troopers concerning his, and their, opposition to the quota system. Although this alternative claim was not set forth specifically in plaintiff's pre-trial narrative, and although parties are confined to the issues enumerated in such narratives, plaintiff's pretrial statement does incorporate by reference 147 plaintiff's memorandum in opposition to defendants' motion for summary judgment. This memorandum states: "What the plaintiff maintains ... is that he was punished because he openly exhorted the Troopers to oppose the quota system and because he did `buck the system,' the command made an example of him." (p. 8) Consequently, plaintiff's abandonment of one free speech theory and advancement of another at time of trial could not have resulted in any surprise or prejudice to defendants since they were put on notice that plaintiff was proceeding on both theories. It is well established that in considering a motion for new trial following a jury verdict, a court should refrain from interfering with the verdict unless it is clear that the jury reached a seriously erroneous result. Draper v. Erie R. R. Co., 183 F.Supp. 899 (W.D.Pa.1960), aff'd 285 F.2d 255 (3d Cir. 1960). Further, plaintiff herein is entitled to have the evidence viewed in the light most favorable to him and to have "the benefit of all inferences which the evidence fairly supports". Continental Ore v. Union Carbide, 370 U.S. 690, 82 S.Ct. 1404, 8 L.Ed.2d 777 (1962). Finally, "Courts are not free to reweigh the evidence and set aside the jury verdict merely because the jury could have drawn different inferences or conclusions or because judges feel that other results are more reasonable". Tennant v. Peoria & Pekin, 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520 (1944). Applying this standard of review to the instant case, we proceed to a consideration of the merits. It is now firmly established that public employees enjoy the protection of the First Amendment's guarantees. Keyishian v. Board of Regents, 385 U.S. 589, 87 S.Ct. 675, 17 L.Ed.2d 629 (1967). It is also recognized, however, that the government has a legitimate interest in regulating the nature and extent of its employees' public statements. Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968). Depending upon the nature of the employment relationship in question, the government is entitled to maintain some degree of flexibility with respect to the parameters of this regulation. Certainly, the unique circumstances involved in police department employment, as in the instant case, may necessitate a greater restriction on a police officer's freedom of speech in order to maintain discipline than would be required of other government employees. As stated by the Court of Appeals for the Seventh Circuit: "To the extent that being a policeman is public employment with unique characteristics, the right of the employee to speak on matters concerning his employment with the full freedom of any citizen may be more or less limited. It is not, however, destroyed". Muller v. Conlisk, 429 F.2d 901, 904 (1970). In the instant case, defendant Hankinson contends that although as a policeman plaintiff may have been entitled to some degree of protection under the First Amendment for statements made in public, the exhortations he made to the troopers at the Franklin station to oppose the quota system were unprotected private communications. Defendant's reliance on the denial of free speech protection given to the private utterances in Roseman v. Indiana Univ. of Pa., at Indiana, 520 F.2d 1364 (3d Cir. 1975) for this proposition, however, is misplaced. Although the court in Roseman did distinguish its factual situation from that in Pickering on the basis of the private nature of the former as opposed to the public nature of the latter, the court coupled the forum issue with a distinction based on the degree of public interest involved in the statements made by Roseman. The court held that Roseman's communications "concerned an issue of less public interest than Pickering's." 520 F.2d at 1368. Significantly, the court stated that "if Roseman's [private] communications to McGovern and at the faculty meeting had been on issues of public interest, or if she had convinced local news media that her grievance against Faust was newsworthy, entirely different considerations would come into play." 520 F.2d at 1368, fn. 11 (emphasis added) Thus, the court recognized that although a communication may be essentially private in its scope, it is nevertheless entitled to First Amendment 148 protection if it concerns a matter of legitimate public interest. The jury in this case was instructed concerning the requirement that plaintiff's statements to the troopers encompass "a matter of legitimate public concern" in order to entitle plaintiff to protection, and the jury found specifically that they did. (See Special Verdict, question # 2). Consequently, although plaintiff's communications to the troopers were essentially private, since they related to a matter of legitimate public concern, they were entitled to be analyzed as protected free speech. Having determined that plaintiff's statements were not precluded from First Amendment protection because of the private nature of the forum in which they were uttered, it is necessary to determine whether under the standard for analysis established in Pickering the statements remained within the ambit of the First Amendment or fell outside of its umbrella. In Pickering, the Court stated: "The problem in any case is to arrive at a balance between the interests [of the employee], as a citizen, in commenting upon matters of public concern and the interest of the state, as an employer, in promoting the efficiency of the public services it performs through its employees." 391 U.S. at 568, 88 S.Ct. at 1735, 20 L.Ed.2d at 817. The Court then enumerated several factors which were to be scrutinized and weighed in arriving at this balance. These elements included (1) the impact of the statements on co-worker harmony, (2) the proximity of contact between the speaker and the subject of the criticism, (3) the sensitivity of the employer-employee relationship, and (4) the degree of interference with the regular operation of the enterprise or with the performance of the speaker's duties. In the instant case, there was no evidence that plaintiff's discussions with the troopers had an adverse effect on co-worker harmony. The testimony established that throughout the summer and fall of 1974, Patrol Sgt. Henry T. Lorent stated to various troopers that they should "think 15" or "think 20" arrests or citations per month, and urged them to "pork 'em" as they left the Franklin station to begin their patrols. He cautioned them that if they failed to meet their monthly quotas, they could be transferred, given undesirable duty assignments, or punished in some other, perhaps more subtle, fashion. Several troopers testified that they were so concerned about this quota system that they approached plaintiff, who was known to be accessible, and used him as a sounding board for their complaints.[4] Plaintiff advised them that the system was improper, that they should stress quality rather than quantity in their work, and that Lorent's directives were wrong. This evidence established that a definite morale problem existed at the Franklin station in late 1974 and early 1975 and that many troopers disagreed with, and perhaps disliked, Sgt. Lorent. Without question, however, this low morale, with its potential adverse effect on co-worker harmony, was engendered by the imposition of the quota system by Sgt. Lorent, not by any attempt on plaintiff's part to disrupt the system. Sergeant Ruhlman did not initiate the unrest at the Franklin station; on the contrary, he attempted to alleviate it. All witnesses agreed that he was always respectful and obedient to his superiors. The second factor discussed in Pickering is the closeness of contact between the speaker and the subject matter of the criticism. In the instant case, it is true that plaintiff was in as good a position as anyone at the station to observe the effects of the quota system upon the troopers and to comment upon it. The troopers selected him as their sounding board and he counseled them in accordance with his conscience. It is also significant to note, however, that after several troopers complained to him about the system, he informed Gorman of their unrest. Although there was no evidence that plaintiff ever talked directly to Hankinson 149 about the matter or that Gorman conveyed his conversation with Ruhlman to Hankinson, the jury could reasonably have inferred that Hankinson was aware both of the low morale at Franklin and of its cause. Consequently, Hankinson would have had every opportunity to rebut plaintiff's statements or to take action to quell the unrest by instructing Lorent to refrain from employing a quota system. Thus, although it may have been preferable for plaintiff to have discussed the matter directly with Hankinson, the jury could have inferred that both the employer and the employee had access to the facts and that Hankinson could have rebutted any statements made by plaintiff without having to suppress him. In Pickering, the Court noted that "significantly different considerations would be involved" in cases where "the relationship between superior and subordinate is of such a personal and intimate nature that certain forms of public criticism of the superior by the subordinate would seriously undermine" the effective relationship between them. 391 U.S. at 570, fn. 3, 88 S.Ct. at 1735, fn. 3. In Sprague v. Fitzpatrick, 546 F.2d 560 (3rd Cir. 1976), the Third Circuit held that such a relationship existed between the Philadelphia District Attorney and his First Assistant. The court held that no First Amendment rights were violated when the First Assistant was discharged for having impugned the integrity of the District Attorney in public. In this case, the court notes that no evidence was presented which in any way indicated that plaintiff had been disparaging or defamatory toward his superiors. He did not engage in name-calling or the use of lewd, insulting, or "fighting words." On the contrary, the testimony clearly established that plaintiff was always respectful toward his superiors. Further, it is significant that, unlike the statements made by the plaintiff in Sprague, supra, the discussions by the plaintiff in this case were not even directed toward his immediate superiors. Instead, they concerned the quota system, a matter of grave concern to the troopers and to the general public, and, tangentially, Sgt. Lorent. Finally, the jury was instructed that if they found that plaintiff maligned or defamed defendants, his speech would not be protected. Consequently, since plaintiff's statements to the troopers were not aimed at defendant Hankinson, but at a matter of public interest, the sensitivity of the relationship between plaintiff and Hankinson was not undermined. The most troublesome element of Pickering, as applied to this case, is that of interference with the regular operation of the station. There is no doubt that plaintiff did exhort the troopers to disobey any attempt on the part of Lorent to impose a quota system. The impact of this exhortation on the operation of the station is the disputed issue. It has been held that otherwise protected speech must "materially and substantially" disrupt the operation of the enterprise before it can be said to have relinquished this protection. Tinker v. Des Moines School Dist., 393 U.S. 503, 89 S.Ct. 733, 21 L.Ed.2d 731 (1969); Hastings v. Bonner, 578 F.2d 136 (5th Cir. 1978); Mabey v. Reagan, 537 F.2d 1036 (9th Cir. 1976). In this case, as discussed above, although disruption of the operation of the station may have occurred in that morale was low and some troopers did not fulfill their quotas, any such disruption was precipitated by the imposition of the quota system rather than by plaintiff's discussions with the troopers. It is important to remember that plaintiff did not initiate any conversations with the troopers regarding the quota system; the troopers came to him requesting his advice. The unrest existed because the troopers were disgruntled as a result of Lorent's thinly-veiled threats to them; plaintiff merely attempted to alleviate the strain and unhappiness by counselling the troopers that it was not wrong to disobey an improper order. Defendant Hankinson contends, however, that plaintiff's statements constituted a call to mutiny, thereby creating a potential for disruption which Hankinson was obligated to suppress. It has been held that "In a situation of potential disruption there is no requirement in the law that the proper authorities must wait for the blow to fall 150 before taking remedial measures." Birdwell v. Hazelwood School Dist., 491 F.2d 490 (8th Cir. 1974). It has also been held, however, that the speech must pose a "substantial threat to material disruption," in order to remove it from the protection of the First Amendment. Franklin v. Atkins, 409 F.Supp. 439 (D.Colo.1976); see, Healy v. James, 408 U.S. 169, 92 S.Ct. 2338, 33 L.Ed.2d 266 (1972). Given that the evidence in this case established that discontent among the troopers had existed from mid-1974, some 6 months prior to plaintiff's transfer, it cannot be said that such a "substantial threat" to further disruption existed. In Whitsel v. Southeast Local School Dist., 484 F.2d 1222 (6th Cir. 1973), the court upheld the discharge of a high school teacher who had made statements to an unauthorized assembly of students which encouraged disobedience to the directions given them by the principal and superintendent to return to their classes. The court held that plaintiff's words "went beyond the mere advocacy of ideas and counselled a course of action," and that plaintiff "was not terminated for the advocacy of ideas but for insubordination." 484 F.2d at 1229. Arguably, Sgt. Ruhlman's statements to the troopers could be viewed as insubordination. Indeed, it may have been preferable for him to have discussed the quota system issue with Hankinson directly. In Whitsel, however, the plaintiff was determined to have "inflamed" the existing situation and to have encouraged the students to disobey a legitimate directive from plaintiff's superiors. In the instant case, by contrast, plaintiff did not "inflame" the situation, but rather attempted to quell the unrest. Further, plaintiff counselled the troopers that they did not have to obey an order from another sergeant at the station which they, and he, believed to be unlawful. Although plaintiff's case was thin, and the evidence did not compel the verdict reached, the jury was justified in finding that plaintiff was transferred for the exercise of protected rights rather than for insubordination. In a close case such as this, a court has no authority to overturn the jury's verdict unless its decision was clearly erroneous. The court is unable to hold that it was. While the defendant advanced legitimate reasons for plaintiff's transfer (in the nature of an existing need for his services in Erie) unrelated to the quota system controversy, the jury was properly instructed that plaintiff's First Amendment speech need have been only "a substantial factor" in the transfer decision. Mt. Healthy City Board of Ed. v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977). Consequently, viewing the evidence in the light most favorable to the plaintiff, as we must when considering a motion for new trial, the court concludes that the jury was justified in finding as it did and defendant Hankinson's motion for new trial must be denied. Having determined the First Amendment issue in favor of the plaintiff, the court finds it unnecessary to address the Fourteenth Amendment due process property right question. MOTION TO AMEND THE JUDGMENT Defendant Hankinson contends that the $50,000 damage award is excessive and unwarranted and moves the court pursuant to FRCP 59(e) to amend the judgment by reducing the award. The standard of review of a jury's damage award is similar to that employed in the determination of a motion for new trial. Although an award may be high, it should stand if there is ample evidence to support it or unless it shocks the conscience of the court. Grunenthal v. Long Island R.R. Co., 393 U.S. 156, 89 S.Ct. 331, 21 L.Ed.2d 309 (1968); Lebeck v. Wm. A. Jarvis, Inc., 250 F.2d 285 (3rd Cir. 1957). The court is not permitted to arbitrarily substitute its judgment for that of the jury. Lloyd v. Monessen Southwestern Ry. Co., 174 F.Supp. 751 (W.D.Pa.1959). In the instant case, plaintiff established that he had sustained liquidated damages in the amount of $28,921.43 as a result of the transfer. In addition, substantial evidence was presented relating to the emotional distress suffered by Sgt. Ruhlman and its accompanying physical side effects. Finally, testimony was offered to the effect that plaintiff had undergone a material personality change following the transfer. 151 Compensatory damages for emotional distress are recoverable in a civil rights action. Paton v. La Prade, 524 F.2d 862 (3rd Cir., 1975); Aumiller v. Univ. of Delaware, 434 F.Supp. 1273 (D.Del.1977). Sgt. Ruhlman produced evidence of emotional distress amounting to more than "some pressure and embarrassment" which was found not to warrant a $10,000 damage award in Alicea Rosado v. Garcia Santiago, 562 F.2d 114 (1st Cir. 1977). Consequently, the court concludes that there was sufficient evidence to sustain the jury's award of $50,000. Defendant's motion to amend the judgment must be denied. An appropriate order will be entered. SPECIAL VERDICT The jury is directed to answer the following questions: 1. Was the plaintiff's transfer from Franklin to Erie in March, 1975 caused by his exercise of his right to free speech? ANSWER: Yes (yes or no) 2. Was the matter on which plaintiff spoke a matter of legitimate public concern? ANSWER: Yes (yes or no) 3. Was plaintiff's transfer for the purpose of punishment in violation of the regulation, Plaintiff's Exhibit 1, Page 15, effective February 4, 1975, without notice of charges or hearing? ANSWER: Yes (yes or no) 4. Did the defendants act in good faith and with a reasonable belief that their actions were proper under the law? Defendant Hankinson ANSWER: No (yes or no) Defendant Gorman ANSWER: Yes (yes or no) 5. If your answer to 1 and 2 are yes or your answer to 3 is yes, what amount of damages do you award plaintiff? $ 50,000 Hankinson Yes (Yes or No) Gorman No (Yes or No) 6. Did the defendants act maliciously with malicious intention to deprive the plaintiff of his rights or do him injury? ANSWER: ----- Hankinson Yes (Yes or No) (yes or no) Gorman No (Yes or No) 7. If so, what amount of damages for this item is included in your award for damages, if any? $ 1 or more amended by the court with the consent of the jury W. W. Knox District Judge 1. Marilyn Omeara 2. Kurt A. Federoff 3. Kenneth E. Snyder 4. Renzo J. Armanini 5. Timothy A. Martin 6. Irene K. Haser Dated: 6-16-78 NOTES [1] A directed verdict was granted at the close of plaintiff's case in favor of a third defendant, James D. Barger, Commissioner of the Pennsylvania State Police. [2] This latter theory was abandoned by plaintiff at trial, as discussed hereinafter. [3] His revelation to the press occurred after his transfer. [4] A quota system may be defined as a requirement that each trooper make a certain number of arrests per month or per week, whether justified or not. This naturally causes an outcry among the public and disrespect for law enforcement; particularly at the end of the quota period.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265588/	657 F.Supp. 1339 (1986) AIKEN COUNTY and Aiken County Public Service Authority, Plaintiffs, v. BSP DIVISION OF ENVIROTECH CORPORATION; Insurance Company of North America; and Envirotech Corporation, Defendants-Third Party Plaintiffs, v. BAY-CON GENERAL, INC.; Davis & Floyd, Inc.,[1] and The Travelers Indemnity Company, Third-Party Defendants. Civ. A. No. 81-202-8. United States District Court, D. South Carolina, Aiken Division. November 24, 1986. 1340 1341 1342 Donald A. Harper, T.S. Stern, Jr., Haynsworth, Marion, McKay & Guerard, Greenville, S.C., for plaintiff. Paul W. Killian, Susan Smith Blakely, Watt, Tieder, Killian & Hoffar, Vienna, Va., Joseph O. Rogers, Jr., Rogers, Riggs & Rogers, Manning, S.C., for defendants-third party plaintiffs. Patrick A. Thompson, S. Gregory Joy, Atlanta, Ga., Julian B. Salley, Jr., Aiken, S.C., for third-party defendants, Bay-Con Gen., Inc. and The Travelers Indem. Co. Charles Porter, McNair Law Firm, P.A., Columbia, S.C., Thomas Pope, Joseph W. Hudgens, Newberry, S.C., for third-party defendant Davis & Floyd Engineers, Inc. ORDER BLATT, Chief Judge. I. INTRODUCTION This is an action by the plaintiffs, Aiken County and Aiken County Public Service Authority (hereinafter collectively referred to as "Aiken County"),[2] to recover damages arising out of the construction of the Horse Creek Pollution Control Facility (the "project"), located near Aiken, South Carolina. Both plaintiffs are political subdivisions of the State of South Carolina with the capacities to sue and be sued. Envirotech Corporation ("Envirotech")[3] and Insurance Company of North America ("INA") are corporations organized and existing under the laws of a state other than South Carolina and during the contract period were authorized to, and were doing, business in South Carolina. Bay-Con General, Inc., ("Bay-Con") and Travelers Indemnity Company, ("Travelers") are corporations created and existing under the laws of a state other than South Carolina and during the contract period were authorized to, and were doing, business in South Carolina. Davis and Floyd, Inc. ("Davis & Floyd") is a South Carolina corporation. The original dispute between the parties began with an arbitration proceeding between Aiken County and Bay-Con. On January 23, 1981, Aiken County commenced this action against Envirotech and its surety, INA, alleging breach of warranty, breach of contract, and fraud in supplying equipment for the heat treatment and dissolved air flotation ("DAF") systems of the project. Envirotech brought in Bay-Con, Travelers and Davis & Floyd as third-party defendants, and all parties filed counterclaims and cross-claims. On November 5, 1981, with the consent of all parties, the arbitration proceeding was abandoned and all claims were submitted to this court for trial non-jury. As discussed later, this order is limited to Aiken County's claims regarding the heat treatment equipment 1343 and the related defenses and cross-actions. Specifically, I have limited these findings of fact and conclusions of law to Aiken County's third, fourth, fifth, and sixth causes of action and the defenses and cross-actions related thereto. These allegations can be summarized as follows: Aiken County's causes of action against Envirotech alleging breach of warranty, breach of contract, fraud, and liability of INA as surety; Aiken County's causes of action against Bay-Con alleging breach of warranty, breach of contract, negligence, and liability of Travelers as surety; and Aiken County's cause of action against Davis & Floyd alleging breach of contract. In addition, Bay-Con, Davis & Floyd and Envirotech each asserted claims for indemnification, including attorneys' fees, against the other. The trial commenced on September 1, 1982. After several weeks of trial, it was agreed by all parties and the court that Envirotech should clean and inspect the heat treatment equipment and that, thereafter, Aiken County and Davis & Floyd would test it. This effort began in January, 1983, and continued until June, 1983. The trial recommenced in January, 1984, at which time, on motion of Aiken County and Davis & Floyd, the court decided, that the most efficient way to dispose of this case was to bifurcate the issues and try first Aiken County's claims with regard to the heat treatment equipment, and the related defenses and cross-actions. The trial on the heat treatment issue was concluded on December 11, 1984. This case involved the most extensive discovery and the longest trial that this Court encountered in fifteen (15) years on the trial bench. There were thirty-eight people deposed over a total of seventy-four days. The documents produced by all parties could only be counted by the box. The trial consumed fifty-two days, exclusive of many motion days, during which twenty-one witnesses testified, and the transcript includes approximately 6,690 pages. II. MOTIONS A. Bifurcation and Rule 54(b) Certification Under the authority granted by Rule 42(b), the Federal Rules of Civil Procedure, and on motion of Aiken County and Davis & Floyd, I determined that Aiken County's heat treatment claim (hereinafter "heat exchanger claim") should be tried first. The heat exchanger claim was a separate claim in that it presented an aggregate of facts giving rise to an enforceable right. Gottesman v. General Motors Corp., 401 F.2d 510, 512 (2d Cir. 1968). Moreover, it was the largest and most important issue in the case,[4] and the Court felt it would be inadvisable to dilute the court's focus on that issue by a lenghty trial of numerous unrelated defective equipment and delay claims. Martin v. Wyeth, Inc., 96 F.Supp. 689, 697-98 (D.Md. 1951), aff'd 193 F.2d 58 (4th Cir.1951). These other issues were based on separate facts and would not involve relitigation of the facts in the heat exchanger claim. In addition, the Court felt that bifurcation would most likely result in savings of time and expenses to the parties and the court. See, Value Line Fund, Inc. v. Marcus, 161 F.Supp. 533 (S.D.N.Y.1958). Envirotech was the only party to object when the court asked for the parties' written positions on the issue of bifurcation. The Court could see no prejudice to Envirotech in this procedure. The burden of transporting a witness back to court on the later issues is one which will be shared by the other parties. Any claim that Envirotech's witnesses might have to travel greater distances was a de minimis consideration given the size of this case and the number of trips made to the separate trial sessions already held. The Court also found no prejudice in separating Envirotech's heat treatment delay claim. First, the two claims were conceptually and factually distinct; second, Envirotech was allowed 1344 to litigate all affirmative defenses found to be relevant. Trial on the heat exchanger claim having concluded, Aiken County and Davis & Floyd have moved for the entry of a final judgment as to them pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. In rendering a decision, the court must first find that there are multiple claims for relief and that at least one claim has been finally decided. The court must then find that, in its discretionary judgment, the equities favor a determination that no just reason for delay in entering judgment exists. Curtiss-Wright Corporation v. General Electric Co., 446 U.S. 1, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980). Pursuant to Rule 54(b), I find that there are multiple claims, that the heat exchanger claim has been finally decided, and that no just reason for delay in entering judgment exists. The parties have presented evidence concerning all issues related to the design and function of the heat treatment equipment and the responsibility therefor. Having made a decision on this claim, nothing remains for the court to do but execute the judgment. United States v. Arkansas, 632 F.2d 712 (8th Cir.1980). Aiken County's claims that other equipment is defective and that completion of the plant was delayed, along with Bay-Con and Envirotech's shop drawing delay claims, are separate and independent claims. Aiken County's heat exchanger claim resolves the issues of the defectiveness of said heat exchanger, the responsibility for the alleged defects, Envirotech's knowledge of those defects, the alleged fraudulent conduct of Envirotech toward the owner and engineer, the influent issues, and all affirmative defenses of Envirotech and Bay-Con relevant to this claim. These issues are factually separate from the question of whether Davis & Floyd took excessive time to review shop drawings submitted by Envirotech and Bay-Con. If Davis & Floyd failed to return the shop drawings within an agreed time period, it may have caused Envirotech to spend more time on the job than planned, but that delay is unrelated to the issues of whether the equipment worked when installed and whether Envirotech defrauded Aiken County when it sold this equipment. An analogous situation arose in another complicated construction case, Hartford Accident and Indemnity Co. v. Boise Cascade Corp., 489 F.Supp. 855 (N.D.Ill.1980). That action involved the completion of a project by a contractor's surety after the contractor failed to perform. Upon the surety's completion, the owner refused the surety's demand for payment of the remaining contract balance, and the surety filed an action seeking recovery of the remaining contract balance. Boise, the owner, counterclaimed for losses it suffered due to the delay in completion. In deciding that the surety, Hartford, was entitled to the balance due on the project and that Rule 54(b) certification was appropriate, the court stated: Although Boise's counterclaim arises from the same general transaction as does Hartford's claim and thus may be termed compulsory under Fed.R.Civ.P. 13(a), this in itself poses no bar to certification. Cold Metal Process Co. v. United Engineering, 351 U.S. 445, 452, 76 S.Ct. 904, 908, 100 L.Ed. 1311 (1956). Indeed, despite its compulsory nature, the claim and counterclaim herein raise distinct factual questions. Whereas Hartford's claim involves the question of whether it finished the project and the amount due as a result thereof, Boise's counterclaim raises the issue of when Hartford finished the project and the extent of damages suffered as a result of any delay in completion. 489 F.Supp. at 859. The issues in Aiken County's heat exchanger claim are whether the equipment functions properly and whether Aiken County was defrauded by Envirotech in the sale of this equipment. The other claims, however, involve unrelated alleged defective equipment, alleged delay in completion of the project attributable to both contractor and supplier delays, and excessive shop drawing review time. It is clear that these claims are monetarily small in comparison 1345 to the heat exchanger claim and sufficiently separate and distinct for Rule 54(b) certification. The other claims and counterclaims do not prevent the certification of a claim under Rule 54 because of a possible set-off of damages. In Curtiss-Wright, supra, the Supreme Court noted that "counterclaims, whether compulsory or permissive, present no special problems for Rule 54(b) determinations; counterclaims are not to be evaluated differently from other claims." 446 U.S. at 9, 100 S.Ct. at 1465. The Court further finds that the equities favor the entry of a final judgment, in that no just reason for delay exists. In making this finding, the following factors are controlling: 1. The adjudicated claims are independent of the nonadjudicated claims and will not require the court of appeals to hear the same issues twice. The only remaining issues in a second appeal would be other defective equipment, delays, and the computation of the amount of attorneys' fees. 2. There will be no later issues before this court which have already been before the court of appeals. 3. No future developments at the district court level will moot the issues on appeal. 4. The sum involved here is large, when compared to the sums involved in the remaining issues, and is allegedly needed by Aiken County to replace the defective equipment in its plant. This equipment is essential to the daily operation of the plant. It is impossible for the plant not to treat incoming waste as there is no bypass mechanism; therefore, if the heat exchangers plug, the heat treatment system would be rendered inoperable, precluding sludge processing, and crippling the plant, which as noted infra at 1346, handles waste for a large geographic area, included in which are two cities and numerous manufacturing facilities. A final, favorable judgment will allow Aiken County to pursue collection now and to contract for replacement, rather than waiting months or years for the remaining issues in this litigation to end, during which time the cost of construction will certainly increase due to inflation. 5. While Envirotech is pursuing a delay claim based in part on the heat exchanger system, I find that this claim does not prevent entry of a final judgment. There is no claim or indication that Davis & Floyd or Aiken County would be unable to pay a judgment if one is entered. 6. Determination of this claim on appeal may moot trial of all or a greater part of the other issues by creating a greater potential for settlement. Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 8 n. 2, 100 S.Ct. 1460, 1465 n. 2, 64 L.Ed.2d 1 (1980). One of the reasons for trying the heat treatment claim first was its size and the thought that its resolution might cause the other claims to settle.[5] This approach recognizes that an appeal will probably be necessary before any party will accept liability on such a large issue. B. Bay-Con's Motions for Directed Verdict At the conclusion of the plaintiffs' case, and again at the conclusion of all the testimony, both Envirotech and Bay-Con moved for a directed verdict as to the plaintiffs' claims against each, respectively. As will be seen from the findings of fact and conclusions of law to follow, Envirotech's motion was denied. Regarding Bay-Con's motion, the plaintiffs failed to establish their claim of negligence against Bay-Con or Travelers; therefore, the Court granted their motion for a directed verdict on the second cause of action alleging negligence. (Tr. 5/7/84 at 54). 1346 At the conclusion of all the testimony, Bay-Con moved for a directed verdict on its claim for indemnification against Envirotech. The contract between Envirotech and Bay-Con (Exhibit 407), provides in part: § 32. Warranties and Guarantees. The Subcontractor (Envirotech) warrants to (Bay-Con) and the Owner ... that all of the Work will be of good quality, ... will be free from faults and defects, will be in conformance with the requirements of this Subcontract and of the Prime Contract, and will function as intended by the designer of the Work ... As will be more fully discussed in the findings of fact, it was proved that Envirotech's heat treatment equipment is defective and fails to comply with the express warranties in the specifications. There was no proof that Bay-Con acted negligently in connection with the design, manufacture, installation or operation of this equipment. Therefore, Bay-Con is entitled to indemnification from and against Envirotech for any damages for which it is responsible arising out of this action. In the case of Stuck v. Pioneer Logging Machinery, Inc., 279 S.C. 22, 301 S.E.2d 552 (1983), the South Carolina Supreme Court held: According to equitable principles, a right of indemnity exists whenever the relation between the parties is such that either in law or in equity there is an obligation on one party to indemnify the other, as where one person is exposed to liability by the wrongful act of another in which he does not join. This rule is also thoroughly discussed in 41 Am.Jur.2d Indemnity § 2 (1968) and 42 C.J.S. Indemnity § 21 (1944). See also, Addy v. Bolton, 257 S.C. 28, 183 S.E.2d 708 (1971). III. FINDINGS OF FACT I find the following facts were proved by the greater weight or preponderance of the evidence. In 1970, the Environmental Protection Agency ("EPA") identified Horse Creek Valley as one of the most polluted areas in the United States. The creek was virtually an open sewer for two cities and two large textile industries. EPA undertook to provide grants to clean up Horse Creek Valley, as well as many other sites. The congressional scheme was to provide grants for capital improvements, but not for maintenance and operation. The acknowledged purpose and effect of this approach was to encourage publicly owned sewerage treatment works to acquire the best available treatment plants and equipment and to minimize operation and maintenance costs. Davis & Floyd published an engineering report, which presented its study of the Horse Creek Valley problem, and proposed a regional wastewater treatment plant that would treat all of the area's waste. (Exhibit 8034). The project was intended to treat the effluent from four major customers: (1) the City of Aiken, (2) the City of North Augusta, (3) Graniteville Company, and (4) United Merchants and Manufacturing Company. It was projected that about half of the waste would be domestic and half industrial, and that the load would vary depending on seasons, economic fluctuations, plant closings, changes in demography over time, and various other factors. The capacity of the project was to be an average 20 million gallons per day in the year 1995. The project can best be described as a sophisticated wastewater treatment facility, comprising several major process equipment systems. It was designed to treat industrial and domestic waste (Tr. 9/3/82 at 403). Although the scope of this part of the trial, as heretofore explained in Section II-A, is limited to the heat treatment system, a description of the entire process is necessary. The purpose of the plant is to remove solids from the wastewater and dispose of them in landfills, or old strip mines. Solids are removed by settling or floating them out of the wastewater. The wastewater enters the plant through a bar screen with 2-inch grids to catch large debris. It is then raised by large pumps from a wet-well so that it can flow by gravity through the plant. It next passes through a smaller bar screen and grit chamber, which removes additional debris and sand. From 1347 there is goes to one of four (4) primary clarifiers where the primary (thicker) sludge is separated and pumped to the day (holding) tanks adjacent to the heat treatment facility. The remaining waste is aerated in one or more of the five (5) large basins, so that the bacteria will digest the solids and make them more amenable to settling or floating. The aerated material is then pumped to one of four (4) secondary clarifiers, which separates the clean water and sends this water on to the Savannah River. A portion of the secondary waste (the waste activated sludge -WAS) is pumped to the DAF equipment, which concentrates the waste again by flotation and settlement. This concentrated waste is mixed with the primary waste in the day tank, and, the mixed primary and WAS (hereafter referred to as "sludge")[6] is pumped into the heat treatment unit through a grinder. In the heat treatment unit it flows through the inner pipe of the heat exchanger into a reactor where it is broken down and sterilized by heat and pressure. It then passes through the outer shell (called the "annular space" or annulus") of the heat exchanger and into decant tanks where it is further concentrated. The process of treating the sludge with heat is designed to allow the sludge to be dewatered more easily and to sterilize it. As sludge passes through the heat exchanger, heat is exchanged from the hot sludge leaving the reactor to the cold sludge coming to the reactor. Each vertical loop of the heat exchanger stands 4 feet high and consists of a pipe within a pipe. The inner pipe is approximately 2½ inches in diameter and the outer pipe is approximately 4 inches in diameter. The annular space is 5/8 inch across. (Tr. 1/25/84 at 484). The inner pipe is supported inside the outer pipe by small, curved metal spacers. (See Model, Exhibit 5070). There are 216 spacers in the system. (Tr. 1/26/84 at 521).[7] At the bottom of each loop the outer pipe has a cross-over connection to the next loop. The inner pipe is not in this cross-over as it continues and makes a loop at the bottom (Exhibit 5069). Thus, the heat exchanger is simply a series of concentric tubes within tubes in which the sludge flows to and from the reactor. The sole purpose of the heat exchanger is to make the process more efficient and, therefore, more economical by transferring heat from the hot sludge to the cold sludge. (Tr. 7/9/84 at 136). From the decant tanks, the sludge is vacuum filtered to remove the water, which comprises more than 90% of the sludge, and the solid residue is hauled off to a landfill. The process is designed to allow clean water to be discharged to the river and solid waste to be hauled to a landfill. The remaining liquid circulates through the plant. Aiken County engaged Davis & Floyd to design a process which would treat the incoming waste. They also engaged Davis & Floyd to prepare plans and specifications, to review the bids, to perform onsite inspections, and to certify the equipment as complying with the plans and specifications. The project was publicly advertised and the low bid was received from Bay-Con on December 22, 1976. On April 6, 1977, Aiken County entered into a construction contract with Bay-Con for the lump sum of Nineteen Million Nine Hundred Ninety-Six Thousand and No/100 ($19,996,000.00) Dollars. (Exhibit 54). As a condition of its contract, Bay-Con provided Aiken County with a performance bond from Travelers to guarantee that the work would comply with the contract plans and specifications. (Exhibit 4101). Bay-Con commenced construction in May 1977, and the plant began receiving waste on November 19, 1979. Envirotech entered into a contract with Bay-Con to design and supply the following equipment: the primary clarifier mechanisms, the secondary clarifier mechanisms, the DAF mechanisms, the day and decant tank mechanisms, the vacuum filters, and all of the heat treatment equipment, including pumps, grinders, heat exchanger, reactor, 1348 boilers, piping, controls, and many other smaller items. Bay-Con's contract with Envirotech dated March 31, 1977, was for $2,801,560.00 It specifically required Envirotech to comply with the contract plans and specifications. (Exhibit 407). The heat treatment specifications required suppliers to demonstrate experience with the equipment or, in the alternative, to provide Aiken County a performance bond in lieu of experience. Envirotech provided a bond from INA for $2,070,399.00 to guarantee the replacement of the heat treatment equipment in lieu of demonstrating its experience. (Exhibit 5041). Envirotech was sold in 1982 to Baker International Corporation and is a wholly-owned subsidiary of Baker. It was clear from its financial reports that Baker purchased all the stock in Envirotech and consolidated Envirotech into its operation both functionally and financially. This was not disputed by Envirotech. (Exhibits 5084, 5085; and colloquy Tr. 5/1/84 at 263-68). In the 1970s, Envirotech was a major manufacturer and supplier of waste treatment equipment. One of its principal products was heat treatment equipment. During this period there was only two major manufacturers of heat treatment equipment, Envirotech and Zimpro. These two companies were vigorous competitors, each having a guarded and proprietary process. The Zimpro heat exchange process involves passing sludge through the inner tube into a reactor and then out through the annulus. At some point, air is injected which causes oxidation. The air also causes significant turbulence within the piping. This process is referred to as wet air oxidation; the exchange of heat was direct from the hot sludge to the cold sludge. (Exhibit 3016(B)). Envirotech installed its first heat treatment unit in the United States in the late 1960s with an installation at Colorado Springs, Colorado. (Exhibit 5073 at 73). This heat exchanger employed a similar design to the Zimpro, except that air injection was prohibited as it was a patented process. (Tr. 1/26/84 at 513). This equipment failed. Envirotech described the failure as follows: Not long after the process operation began, the heat exchanger plugged on the raw sludge side ... The heat exchanger is essentially a pipe within a pipe design.... When the heat exchanger was cleaned, it was found that short pieces of ground synthetic materials had formed large balls inside the pipe annulus clogging the flow. (Exhibit 5016). In addition to its own experience at Colorado Springs, Envirotech received similar reports of plugging from plants in Europe and the United Kingdom (Exhibit 8026).[8] Envirotech replaced the Colorado Springs equipment with a sludge to water design. (Tr. 1/25/84 at 450). This design had water in the outer tube as the heat transfer medium instead of sludge, and thus the heat transfer was indirect. This modification was 100% effective in eliminating plugging or clogging in the outer tube.[9] Thereafter, Envirotech marketed only this design and supplied approximately 29 of these sludge to water systems between its development of the system at Colorado Springs in late 1969 and its design of the Aiken County system in 1977. (Exhibit 5080). 1349 During the planning for the Aiken County project, Davis & Floyd had many contacts with Envirotech through its sales agent, the Taulman Company. In 1972, Taulman requested that samples of the wastewater be sent to Envirotech for analysis. (Exhibit 1002). Davis & Floyd secured composite samples from the textile industries and municipalities and sent them to Envirotech. (Exhibit 8036). Envirotech, through Taulman, later provided its analysis. (Exhibit 8037). In 1974, the Taulman Company sent Davis & Floyd Envirotech's sales literature, which stated that Envirotech's heat treatment equipment was sludge to water. (Exhibit 1005). In 1975, Taulman sent Davis & Floyd sample design drawings showing a sludge to water system its "standard system." (Exhibits 6021 and 3010). Taulman's personnel became familar with the industries which would discharge waste to the project. (Exhibit 6026). As late as May, 1976, Envirotech proposed a heat treatment system with a sludge to water heat exchanger and sent to Davis & Floyd a set of suggested specifications for such a system. (Exhibit 8018). In the fall of 1976, Davis & Floyd issued its plans and specifications for the project. (Exhibit 5019). The heat treatment section (15S) provided for the Zimpro wet air-oxidation system and, as an alternate, the Envirotech system with a sludge to water heat exchanger. (Exhibit 421). On November 23, 1976, Taulman met with Davis & Floyd and requested that an addendum be added to the specifications which would allow a spiral heat exchanger. (Exhibit 5073 at 92). Davis & Floyd did not agree to this suggestion and did not alter its specifications, but Davis & Floyd did require a supplier, not having experience with a particular piece of equipment, to post a replacement bond. (Exhibits 6035 and 1023). Taulman's representative testified that on the day of bidding, Envirotech again changed its position and bid a sludge to sludge, tube-in-tube heat exchanger. (Tr. 7/11/84 at 479; 7/12/84 at 586-87). This was the first time a sludge to sludge heat exchanger was suggested by Envirotech since its failure in Colorado Springs in 1969. (Tr. 2/2/84 at 903.) Envirotech bid a system with a sludge to sludge heat exchanger because its sludge to water heat exchanger was at a competitive price disadvantage to the Zimpro process. Envirotech's project manager, Frank Breedlove, testified: "In the sludge to water heat exchanger, it takes approximately twice the number of tubes as sludge to sludge." (Tr. 1/25/84 at 475-76). Envirotech's bid was a part of a plan designed to secure the contract but to leave Envirotech's options open to select one of three types of heat exchangers after they had secured the contract. (Exhibit 3002; Tr. 1/25/85 at 463).[10] Although it was more price competitive, Envirotech's engineers saw many problems with the design and operation of a sludge to sludge heat exchanger. On June 24, 1977, Gene Pecci, Envirotech's project engineer for the Horse Creek project, identified "serious expensive problems" with a sludge to sludge design saying "No way on primary sludge published data says plugging evident" and that Envirotech "should use contingency money and convert to sludge to water." (Exhibit 413). This was not the first time Envirotech recognized this problem. Prior to bidding, Mr. Pecci's predecessor, Jay Johnson, wrote a memo listing five problems with the sludge to sludge system, including "plugging" and "solvent cleaning." (Exhibit 3001).[11] Envirotech met with Davis & Floyd on June 29, 1977, and advised that they were 1350 considering three designs for the heat treatment: (1) the sludge to water as originally proposed and as called for in the specifications; (2) the spiral; and (3) the sludge to sludge. (Exhibit 4012). Mr. Pecci's memo of this meeting expressed concern over the effect of textile waste on the sludge to sludge system (Exhibit 414). After testing, the spiral heat exchanger was determined to be unsatisfactory. (Exhibit 417). The internal discussion was then between sludge to water and sludge to sludge. The evidence revealed a divergence of opinion within Envirotech management personnel. The sludge to water proponents included the project manager, Frank Breedlove, and Envirotech's engineering department. They concluded in a memo dated July 8, 1977, that the decision on the heat exchanger "must be based on solid engineering principles, substantiated by test data, where possible." (Exhibit 415). The sludge to sludge proponents were led by Envirotech's president, Paul Castenholtz. On July 22, 1977, Envirotech's engineering department issued a report calling for a sludge to water heat exchanger for Aiken County, saying this was the only reliable heat exchanger with "100% confidence factor (no plugging)." (Exhibit 420). They also reported that the metal spacers would catch fibers and cause plugging.[12] On July 26, 1977, a meeting was held by Castenholtz, the engineers, and Breedlove to review the engineering report and decide which heat exchanger to provide. At that meeting Paul Castenholtz made the decision to overrule his engineers and Breedlove and to provide Aiken County with a sludge to sludge system. (Exhibit 426).[13] This decision was made solely for financial gain and was in total disregard of sound engineering principles.[14] Two days later, on July 28, 1977, Envirotech met with Davis & Floyd to advise of its decision to use sludge to sludge. At this meeting, Envirotech got a copy of the Davis & Floyd pilot plant study. (Exhibit 6385). Although Envirotech contended at trial that its decision to supply sludge to sludge was based upon the pilot plant study, I find that this was not the case, since the decision to provide a sludge to sludge heat exchanger had already been made at the meeting on July 26, 1977,[15] two days before receipt of this study. Furthermore, there is no credible evidence that upon receipt of the pilot plant 1351 study, Envirotech's concerns in supplying a sludge to sludge heat exchanger were eliminated by information contained in that study. Mr. Pecci, who testified to this effect, conceded that there was no documentation in support of his contention. (Tr. 10/30/84 at 224-25). I find this testimony not to be credible and reflective of Envirotech's corporate attitude. This contention is belied by their subsequent internal actions. Envirotech also reported to Davis & Floyd on July 28, 1977, "that test work was still in process on spacer designs to minimize the possibility of plugging in the annulus." (Exhibit 6385).[16] Envirotech originally selected seven possible spacer designs. A testing program was outlined in March, 1977. (Exhibit 4046). Tests were run in August or September, 1977. Three of the proposed spacers were tested. The test report concluded each failed due to plugging. (Exhibit 431).[17] The spacer design installed in the heat exchanger in Aiken County was never tested. (Tr. 1/25/84 at 504). Faced with management's decision to supply a sludge to sludge heat exchanger, Envirotech's engineers demanded testing which would address their previously expressed fears. The following chronology demonstrates the importance which Envirotech's engineers felt spacer tests had to the successful design of the equipment. (1) The engineering report dated July 22, 1977 says: "There is insufficient data to prove what design eliminates, let alone minimizes, the hang up on spacers." (Exhibit 420 at 4) (2) Mr. Breedlove's memo dated August 3, 1977, quotes Castenholtz as instructing: "Engineering proceed immediately to develop and test an acceptable spacer design." (Exhibit 426). (3) Another Breedlove memo of August 3, 1977 states: "Action Recommended: (2) Engineering to complete design and test of non-clog spacers as soon as possible but not later than November 1, 1977." (Exhibit 425). (4) Mr. Pecci's memo of September 22, 1977, states: "I am certain that everyone involved feels that testing is the only sure way of determining the best design...." (Exhibit 429). (5) Mr. Breedlove's memo of September 26, 1977, states: "Testing of spacer designs for the sludge configuration must be implemented before this unit is installed.... I believe it is mandatory that tests be performed at the earliest possible date on Engineering's proposed spacer designs. (Exhibit 430, emphasis added). (6) Mr. Chernicky's memo dated September 29, 1977, concerning the design parameters for Aiken County's heat exchanger states: "The sludge may contain solids up to ½" size plus fibrous and stringy material. Therefore the exchanger must be designed to prevent hangup and resultant plugging by this material." (Exhibit 432). (7) Engineering's department memo dated September 29, 1977, states: "We must keep in mind that short fibers, which reassociate into long fibers, will have a tendency to wrap around the best spacer design." (Exhibit 431). (8) Mr. Breedlove's memo of October 3, 1977, states: "Today engineering advised there was not funding, manpower nor time available to accomplish the recommended test.... In 1352 light of our exposure, I feel it is mandatory that the spacer selections be tested before installation, if not before completion of fabrication of the heat exchangers." (Exhibit 433, emphasis added). Despite this apparent engineering commitment to testing, management disregarded these recommendations and proceeded with the design without testing the spacers for Aiken County. This was apparent in Pecci's memo of October 24, 1977, in which he states: "[I]n a meeting attended by P. Castenholtz, ... it was decided that there will be no heat exchanger spacer design testing for Aiken, S.C." (Exhibit 436).[18] Another concern of Envirotech during the design period was the method of cleaning this heat exchanger. The specifications called for all stainless steel tubes, which could be cleaned with nitric acid. Envirotech's engineers acknowledged that "[h]ot nitric will do a better job than inhibited HCL." (Exhibit 400 at 1). Envirotech's standard sludge to water heat exchanger is made of carbon steel tubes, which cannot be cleaned with nitric acid. (Exhibit 400 at 1). However, with their standard system, cleaning of the outer tube, or annulus, of the heat exchanger is virtually unnecessary since there is only water in this space. The inner tube is effectively cleaned mechanically with a bullet-like device with bristles called a "poly-pig" which is possible to use since there are no obstructions in this space. Members of Envirotech's engineering department argued repeatedly that stainless steel piping and nitric acid cleaning should be used and, later, that the effectiveness of the hydrochloric acid ("HCL") cleaning selected in lieu of nitric acid should be tested, as demonstrated by the following: (1) Jay Johnson's memo of November 15, 1976, states: Zimpro Zimpro has had years upon years of experience with sludge to sludge units, yet they have not attempted to reduce costs by using carbon steel in the cooler section. Why do they continuously rely on solvent cleaning alone, when the poly pig is available to them for cleaning the inner tube, where their highest concentration of scaling undoubtedly occurs? Is it not possible 180°F nitric acid is used to reduce build up in the annulus, as well as scaling of the inner tube? (Exhibit 3001). (2) The engineering report of July 22, 1977, which recommended that sludge to sludge not be used in Aiken County, noted that Zimpro has used nitric acid to clean its stainless steel heat exchangers, but that it cannot be used at Horse Creek unless the material is changed to stainless steel. (Exhibit 420). (3) Mr. Hannah, who authored the July 22, 1977 report (Exhibit 420), reported on September 29, 1977, that the effectiveness of inhibited HCL, chosen for Aiken's heat exchanger because it is made of carbon steel, should be tested "to determine whether [it] will dissolve and remove the inorganic materials that cause plug-ups in the annulus of a heat exchanger." (Exhibit 431). (4) Mr. Breedlove's memo of October 3, 1977, states: "... [T]he effectiveness of inhibited HCL in removing scale and fibrous plugging should be demonstrated before the Aiken exchangers are installed." (Exhibit 433, emphasis added). As with the spacers, no inhibited HCL tests were performed. In Mr. Breedlove's letter of February 24, 1978, sent to Davis & Floyd and Bay-Con as justification for change order number 5, he justified the use of HCL acid in lieu of the specified nitric 1353 acid as follows: "BSP's practice is to use an inhibited hydrochloric acid solution and our experience has been that this system does a satisfactory job of cleaning the exchanger." (Exhibit 5081, emphasis added). Upon questioning by the court, Mr. Breedlove stated that the terms "practice" and "experience" were poor word choices. The record fails to indicate that they had any experience, and the court finds that Envirotech's claims of experience and testing were material misrepresentations. (Tr. 2/6/84 at 1064-68). Envirotech failed to test the spacers or the effectiveness of HCL, despite its admitted lack of experience and its representation to Davis & Floyd. The decision was made to use carbon steel, which cannot be cleaned with nitric acid the only method known to be effective.[19] These decisions were reached because of the desire to save money and were made knowing that they were probably unsound based on the advice of Envirotech's own engineers. The disingenuousness of these decisions is underscored by the later false claim that the Envirotech system had been tested and was engineeringly sound. Envirotech designed the heat treatment system (Tr. 11/6/84 at 181-82); Davis & Floyd questioned the performance and reliability of the equipment. (Exhibit 8011). Davis & Floyd asked what the pressure loss across the annulus would be for a "clean" heat exchanger and for one which was "dirty". Envirotech advised Davis & Floyd that the pressure loss was not an indication as to when the heat exchanger needed cleaning. (Exhibit 5079). Envirotech stated that the criterion for cleaning was the temperature differential;[20] however, pressure loss is the primary criterion for evaluating the operation of the equipment, a fact which Envirotech concealed during design and construction, but admitted at trial. (Exhibit 5023-B). Davis & Floyd's questions culminated in a meeting at Envirotech's offices in California in February, 1978. Emmett Davis, the president of Davis & Floyd, testified regarding the meeting and his testimony was not contradicted. He stated that at this conference Castenholtz took him aside and specifically advised him that Envirotech had tested the equipment and that, if it did not work, Envirotech would replace it.[21] Mr. Davis testified that they would not have allowed Envirotech to install this equipment if they had known of the July 22, 1977, engineering report. (Tr. 12/10/84 at 22). Aiken County and Davis & Floyd relied upon Castenholtz's representations and approved change order number 5, which allowed Envirotech to design, manufacture, and install a sludge to sludge heat 1354 treatment system on the project. (Exhibit 8000). I find that Mr. Castenholtz's statements were material, false, intended to mislead, and did, in fact, mislead Davis & Floyd. I also find that Envirotech's failure to advise Davis & Floyd of its engineering report recommending against the sludge to sludge design and against carbon steel tubing constituted fraudulent conduct. Envirotech completed the installation of the heat treatment equipment in the summer of 1979. The plant received wastewater on November 19, 1979, but, other than testing, the heat treatment system was not operated until late 1980 due to insufficient quantities of sludge and other mechanical equipment failures. (Tr. 1/23/84 at 108; Exhibit 237). The heat treatment system's first performance test in August, 1980, failed. (Exhibit 6296A). In late 1980 and early 1981, Davis & Floyd and Aiken County observed problems with clogging, or plugging, in the annulus of the heat exchanger. (Tr. 1/23/84 at 108-115; Exhibit 8041, 8042). Restrictions of material in the sludge in the annulus of the heat exchanger cause a loss of automatic control and necessitate frequent cleaning.[22] These restrictions are reflected as a loss of pressure between the inlet and the outlet of the annulus. As the sludge leaves the reactor and enters the annulus a gauge records the pressure. As the sludge leaves the annulus another gauge records its pressure. The difference between these readings is the pressure differential also referred to as the "delta p" and indicates the amount of restrictions in the annulus.[23] More than a year prior to the time Aiken County and Davis & Floyd observed this plugging problem, soon after waste was received into the plant, Envirotech recognized the equipment failure due to this plugging, which was the very problem it had anticipated during the design phase. The following chronology demonstrates its internal acknowledgment of responsibility: (1) On January 3, 1980, Mr. Breedlove prepared an "exposure analysis" stating that the equipment might require redesign due to plugging and recommending a "most likely" exposure of $1,051,000.00. (Exhibit 8007). (2) On January 11, 1980, Mr. Breedlove received information that resin-based fibers were coming into the plant. He recognized that this increased the probability that Envirotech "will encounter heat exchanger annulus problems." (Exhibit 8006). (3) On January 11, 1980, Mr. Breedlove revised his "exposure analysis" to recommend a "most likely" exposure of $1,301,000.00, and a maximum exposure of $2,391,000.00. (Exhibit 8007A).[24] (4) On March 9, 1980, Mr. Breedlove recorded in his diary that Envirotech personnel had observed pressure loss in the outer tube and that plugging was occurring. (Exhibit 400). During training, Aiken County's operators were not told by Envirotech what the normal pressure loss would be, (Tr. 5/2/84 at 36), nor does the original operations and maintenance manual describe the consequences of such pressure loss. (Exhibit 1355 5023). In early 1981, the operational problems of the heat treatment equipment became more severe, and when the second performance test was run in April, 1981, Davis & Floyd refused to certify the equipment due to mechanical problems. (See Exhibit 5055). On April 8, 1981, Davis & Floyd requested an explanation from Envirotech for the pressure loss. (Exhibit 8001). This request was again made in July, 1981. (Exhibit 5043). The evidence showed that the equipment did not pass the performance test, that it required manual operation during this test due to plugging, (Tr. 1/31/84 at 699), and that Envirotech did not respond to Davis & Floyd's questions concerning the significance of the pressure loss (Tr. 2/1/84 at 752). Envirotech finally provided Aiken County with a revised manual for operation in October, 1983, after this trial had been underway for a year, which stated that pressure loss is the primary criterion for determining the system's performance. (Exhibit 5023-B). I find that Envirotech anticipated plugging problems with its equipment and willfully concealed this knowledge from Davis & Floyd and Aiken County.[25] There was considerable testimony as to which constituents in the waste caused the clogging. It was evident, and confirmed by the court's own observation of a sample introduced in evidence, that strings, fibers, sand and miscellaneous black substances were present. (See Exhibit 8039). It was conceded by Envirotech that, if the equipment had carried water in the annular space, there would have been no restrictions in the flow.[26] The following quote from an Envirotech publication describing how it overcame similar problems at its original installation at Colorado Springs, and that plant's subsequent successful operation, is very relevant to this case: Initially short pieces of ground synthetic fibers and other materials were found to have reconstituted into strands or balls and blocked the annular opening between the inner and outer tubes. By essentially dividing the heat exchanger in half and adding a closed circuit with a circulating water pump, a closed circuit with a circulating water pump, a closed coupled water to sludge heat exchanger was created. This simple step effectively eliminated all blockage problems and the heat exchanger has not been dismantled for cleaning or washed with any cleaning solvents since February of 1969. The system has operated continuously, 168 hours per week, now for four years except for maintenance shutdowns. Maintenance shutdowns are scheduled for one week periods to replace valves and reline or point up boiler brick at least once a year. (Exhibit 8029). Envirotech, however, dropped its heat treatment product line in November, 1979, and does not have the capability to make similar modifications at Aiken County. (Exhibit 2055). A witness for Davis & Floyd testified that the velocity of the flow in the annulus at the cross-over was not sufficient to keep the solid material in suspension and that, as the sludge passes into the next "upriser," the solids drop out and cause a blockage in the outer pipe. (Tr. 2/9/84 at 99-102). This blockage was observed by Envirotech personnel in 1983.[27] Envirotech knew that it was furnishing a heat exchanger which was inherently subject to plugging. Its failure to provide adequate velocity to prevent blockage in the cross-over pipes compounds the owner's problems. 1356 The plugging problem was aggravated by Envirotech's failure to provide an effective method to clean the annulus of the heat exchanger.[28] Envirotech did not provide a method to mechanically clean the annulus. The only methods provided were flushing with water, steam or acid. These methods have proved to be inadequate.[29] Mr. Breedlove testified that the equipment should be cleaned until the pressure differential across the annulus reaches 150 p.s.i.[30] Envirotech also sets this forth in its supplemental operations and maintenance manual (Exhibit 5023B). The operator of the Aiken County heat treatment system, Brent Midgett, testified that he had never achieved that level of cleanness. (Tr. 5/2/84 at 68). In conclusion, I find that Envirotech supplied Aiken County a heat treatment system that was defective in that it plugged and could not be efficiently or effectively cleaned. Further, I find that Envirotech committed the following fraudulent acts in connection with its design and supply of the heat treatment system: (1) In furnishing a design which it knew or should have known would not meet the design specifications. (2) In falsely representing that the heat treatment system would be and had been tested, when, in fact, it decided not to test the equipment due to cost. (3) In falsely representing that the heat exchanger could be effectively cleaned by the use of HCL acid when, in fact, it had not tested such use and HCL is not effective. (4) In failing to disclose that the equipment would likely plug, and in failing to disclose the methods for identifying the plugging problem when it occurred.[31] The first three acts, which occurred before change order number five (Exhibit 8000) was approved in March, 1978, were designed to induce Aiken County and Davis & Floyd to allow the use of this system. The fourth act was intended to conceal from Aiken County and Davis & Floyd known defects in the performance of the equipment. Not only did Envirotech's acts defraud Aiken County, but such acts are the proximate cause of Aiken County's failure to receive equipment which met the required specifications. The specifications set forth definite criteria for determining whether the equipment met acceptable performance standards. The first requirement stated: "[T]he system[] furnished shall be complete in all details and shall be placed in operation ready to operate continuously on a 24-hour per day basis with not more than 15 percent of total time required for maintenance and repairs." (Exhibit 421, paragraph 155.1). There was much testimony about the meaning of this provision of the contract. I find the most reasonable interpretation of this provision to be that no more than 15% of the time the equipment actually operated should be spent on maintenance and repair.[32] Although it should be able to operate 24 hours a day, continuously, if it operates less than that, then the 15% would apply to the actual time that it operated. (Tr. 2/1/84 at 782-783). The following equation illustrates this performance parameter: time spent on maintenance and repairs _____________________________________ total time operating on sludge. Paragraph 15S.7.1 of the specifications requires that the equipment "be capable of being operated with all automatic and safety features functioning." Finally, Paragraph 15S.16 provides: "In the event that 1357 the sludge processing system cannot be operated in a practical manner, even with corrective changes, the Owner shall have the option of having the Contractor and equipment supplier remove the entire system at no cost to the Owner or to allow further revisions and/or replacements." (Exhibit 421). The parties introduced summary charts and testimony relating to the equipment's performance beginning in late 1980 through December, 1983. During the trial, in January-February 1983, Envirotech was allowed to clean and examine the equipment and had an opportunity to make any modifications. After spending approximately four weeks cleaning the heat exchangers, Envirotech ran the system on cold water. It never operated the system on sludge to see what the pressure differential would be on sludge. When Aiken County operated the system on sludge after this cleaning, the pressure differential was 180 p.s.i. (Tr. 11/7/84 at 379). Following this inspection and cleaning, Davis & Floyd analyzed the performance both from on-site observations and from a review of operating data for the period February 21, 1983, through June 1, 1983. (Exhibit 8046). They concluded that the equipment operated unsatisfactorily without all automatic and safety features 50 percent of the total time.[33] (Tr. 11/7/84 at 452). In addition to Davis & Floyd's evaluation, the court instructed Aiken County's chief of operations, Ron Bibb, to analyze the equipment operation during the period October through December, 1983. His analysis included a run-by-run review of the total time the equipment was operated on sludge, the total time spent cleaning, and the total time for other maintenance and repairs. (Ct. Exhibit 2). His evaluation concluded that, in October, 1983, the equipment was cleaned, maintained or repaired a total of 139.25 hours, while operating on sludge only 194 hours. Using the most liberal interpretation of the performance criteria in the specifications, I find that 42 percent of the total time was spent on maintenance and repairs in October, 1983.[34] Maintenance and repairs during November, 1983, constituted 36 percent of the total time, and those during December, 1983, were 42 percent of the total time. (Tr. 2/8/84 at 1187). Further analysis of this data reveals that, for the months of October, November, and December, 1983, the non-cleaning repairs and maintenance were 17 percent, 18 percent and 9 percent, respectively, of the total hours, while cleaning maintenance amounted to 25 percent, 18 percent and 33 percent, respectively, of the total time. I find that the heat treatment system at Aiken County requires much more than the 15 percent maximum time for repairs and maintenance; that it cannot be operated for a reasonable time with all automatic and safety features functioning; that it cannot be operated in a practical manner as contemplated by the parties and as required by the specification; and that it cannot be efficiently and effectively cleaned using the methods supplied by Envirotech. Bay-Con and Travelers offered no evidence in defense of Aiken County's claims and relied totally on their right to indemnification from Envirotech. I find that Bay-Con, Travelers, Envirotech and INA are jointly and severally liable to Aiken County for breach of contractual warranties. I find that Bay-Con and Travelers are entitled to have indemnification over against Envirotech and INA. INA's liability is limited to the penal sum of its bond (Exhibit 5041), $2,070,399.00, plus interest from the date of this order. I find that Envirotech is liable to Aiken County for its fraudulent conduct. I do not find any liability on the part of Davis & Floyd to Aiken County, Bay-Con, Travelers, Envirotech or INA. 1358 IV. AFFIRMATIVE DEFENSES AND CROSS-CLAIMS[35] Although it is difficult to distinguish upon which affirmative defenses Envirotech and INA relied, the court finds their affirmative defenses can be consolidated into the following factual allegations upon which evidence was offered at trial: first, that Aiken County accepted the equipment; second, that the problems with the heat treatment equipment, if any, were the fault of Davis & Floyd, due to their failure to alert Envirotech to the unexpected characteristics of the incoming wastewater; third, that Aiken County failed to give timely notice as required by the bond; and, fourth, that Aiken County is limited to specified liquidated damages. The court further finds that Envirotech and INA have failed to prove these affirmative defenses by the greater weight or preponderance of the evidence.[36] A. Acceptance[37] As discussed in detail above, I find that the heat treatment equipment is defective and does not meet the specifications. The overwhelming credible testimony supports a finding that it has never been accepted by Aiken County or Davis & Floyd.[38] Although Aiken County has used the equipment for approximately five (5) years, the contract specifically provides that the owner may accept the equipment for operation prior to the successful completion of the performance tests. (Exhibit 421). The performance tests have never been successfully completed. (Tr. 2/1/84 at 754).[39] B. Wastewater Characteristics Davis & Floyd was employed by Aiken County to select the process and design a waste treatment plant suitable to treat the wastewater being discharged into the Savannah River by the Cities of Aiken 1359 and North Augusta and the textile mills of United Merchants and the Graniteville Company. In performing this task, Davis & Floyd sampled the wastewater discharged by the industries and municipalities and provided a detailed description of the textile waste, plant by plant, to Envirotech, which indicated that it would be difficult to treat. (Tr. 11/5/84 at 51). The engineering report prepared by Davis & Floyd (Exhibit 6044) cited the standard textbooks regarding the characteristics, composition and treatability of textile waste. (e.g. Exhibit 8038). Davis & Floyd also did a pilot plant study and report to confirm its preliminary engineering report conclusion. (Exhibit 6047). The plant was designed to biologically degrade textile waste using extended aeration. All of this material was discussed with agents of Envirotech while the work was in progress, and final copies were furnished to them. Davis & Floyd also talked with representatives of various equipment suppliers and visited several installations containing both Zimpro and Envirotech heat treatment systems. Based on their investigation, experience, and expertise, they specified two alternate heat treatment systems: Zimpro's air-assisted sludge to sludge and Envirotech's sludge to water. It is uncontested, and I so find, that if Envirotech had supplied its sludge to water system there would be no plugging in the annulus of the heat exchanger. (See note 26, supra). Envirotech's defense on this issue is that the waste contains polyvinyls, acrylics, and acetates generally described as "latex-like" substances which it did not anticipate. There is no dispute but that the waste does contain polyvinyls, acrylics and acetates; the parties disagree as to Envirotech's knowledge, the quantities in the waste, and the effect of these substances on the equipment. The evidence clearly establishes that Envirotech knew that textile mills were major contributors to the project. (Tr. 1/25/84 at 448). All the experts agreed that polyvinyls, acrylics, and acetates are common compounds used in the textile industry.[40] Many synthetic fibers are made from acrylics and acetates, and polyvinyls are commonly used in the sizing process at textile mills. (See note 40, supra). Envirotech, through its local sales representative, was kept informed of Davis & Floyd's study. (Tr. 11/5/84 at 46, 67). Envirotech had experience with textile waste and studied a sample of this particular waste. (Tr. 11/5/84 at 31 and Exhibit 8035). Davis & Floyd and Envirotech observed the test work jointly. Envirotech reported that the sample contained a great deal of high molecular weight material. (Tr. 11/5/84 at 38). Such material includes the normal constituents of textile waste such as synthetic resins, sizes, polyvinyl alcohol, polyvinyl acetate, and textile dyes. In fact, the content was so high that Envirotech 1360 suggested that it be used for fuel. (Tr. 11/5/84 at 44 and Exhibit 8047). Based on the credible testimony of the witnesses, I find that the quantities of polyvinyls, acrylics, and acetates found in the influent to the project, were within the expectations of the parties, (Tr. 11/15/84 at 14-18), and I find no credible proof that these quantities were unusual or more than what would normally be anticipated for this type of wastewater. In reaching this conclusion, I have particularly considered the testimony of Envirotech's expert, George Aseff, regarding the quantities that he found to exist in the wastewater. Envirotech placed great reliance on a letter written by Aiken County's executive director, Stan Wagher, on March 5, 1981, to the industries referring to a large quantity of latex-like material found on the plant's bar screens. (Exhibit 6205). However, Envirotech could not connect this isolated instance to any problems with its equipment. This was an isolated occurrence and had no identifiable effect on the heat treatment operation. (Tr. 1/24/84 at 282-85). Finally, if this occurrence did cause a problem to the equipment, the problems were corrected when Envirotech cleaned the equipment in January, 1983. As noted above, I considered the equipment performance after January, 1983, in determining that the equipment failed to meet the specifications. Envirotech asserted that the polyvinyls, acrylics, and acetates were the sole cause of the plugging which led to excessive cleaning time and loss of automatic control. This contention was refuted by Aiken County and Davis & Floyd personnel who observed the equipment cleaned on numerous occasions. They testified that the material removed from the equipment during cleaning was mostly string and fibers. (Tr. 5/2/84 at 400; Tr. 11/7/84 at 386-87). However, some of the tiers of pipe comprising the heat exchanger did contain the latex-like materials. (Tr. 11/7/84 at 355-60). These materials are adhesive, especially polyvinyl acetate, which is a constituent of Elmer's glue. (Tr. 7/16/84 at 137). They would undoubtedly compound any clogging problem due to fibers. Despite the presence of the latex-like material, not all of the bundles of fibers flushed from the heat exchanger during cleaning were stuck together by these substances. (Tr. 11/7/84 at 387). Therefore, I find that both the fibers alone, and the fibers in conjunction with the latex-like material, caused the plugging of the heat exchanger. Envirotech sales literature which was sent to Davis & Floyd contained the affirmative representation that its equipment could treat any waste regardless of the waste characteristics.[41] In addition, there is no disclaimer or warning in any of Envirotech's literature or operations manuals provided to Aiken County stating that polyvinyls, acrylics, or acetates are harmful to its equipment. (Tr. 12/1/82 at 1379). Moreover, Envirotech's published literature states that this process "is suitable for any industry disposing of organic sludge pulp and paper mills, textile mills, breweries, dairies, tanneries and agricultural chemical producers." (Exhibit 5096). Finally, testing of the waste for equipment suitability is a responsibility any manufacturer should know and appreciate. A Zimpro representative so testified, (Exhibit 8050 at 107), and Envirotech had the capability to test for these substances at that time and should have done so. (Tr. 7/17/84 at 272-73). The heat treatment system is the final step in the process of removing solids from the wastewater. All solids are concentrated and put through the heat exchanger. Heat treatment equipment must be capable of dealing with all of the solids. It is simply incredible for Envirotech to claim that it did not anticipate that the normal solid waste from textile plants would be present in wastewater from an area dominated by textile mills. (Tr. 11/6/84 at 102-03). It is equally incredible that it would furnish heat treatment equipment that it knew was incapable of handling solids while claiming that it could "remove up to 80% of the water in thermoplastic resins," and that it could dewater "all sludges without 1361 regard to the characteristics and the constituents of the sludge." (Tr. 11/6/84 at 106-107). C. Notice. Envirotech and INA also allege that Aiken County failed to give timely notice under the bond. The notice requirement in INA's bond provided: (3) That notice of failure to meet the performance requirements shall be given to the principal and surety as soon as reasonably practical after discovery thereof and within the guarantee period of this obligation, as defined below, and no suit to recover against the surety on account of the obligation herein imposed shall be sustained unless such suit is commenced within six (6) months from the expiration of this bond. (4) The guarantee period shall be defined as that period of one (1) year following the date of acceptance of the thermal sludge conditioning system for operation by the obligee. (Exhibit 5041). The earliest date claimed as acceptance for operation by Envirotech is February 22, 1980. (Exhibit 6290). On January 5, 1981, Aiken County's attorney wrote Envirotech and INA that the heat treatment equipment "has failed and continues to fail to meet the performance requirements detailed in Specification Section 15S ..." (Exhibit 6329). I find this notice sufficient to comply with the bond. Suit was timely filed on January 23, 1981. The complaint contained claims that the thermal sludge conditioning system, which includes the heat exchanger, was defective and also served as notice under the bond. D. Liquidated Damages. Finally, Envirotech argued that Aiken County should be limited to the $50,000.00 established in the liquidated damages provision in Section 15S.17 of the specifications. As will be discussed more fully in section six of this order relating to damages, the specification called for, and Envirotech contemplated, replacement of the equipment if it failed to meet the specifications. Breedlove's memoranda of October 18, 1977, titled "Financial Exposure," clearly shows Envirotech's understanding of the penalty provision of the heat treatment specifications. Breedlove wrote: "If all modifications fail, owner can demand payment of bond. Henry Parsons believes this would be for actual cost to owner for replacement of our system with another." He then discussed the liquidated damages provision saying: "Fuel and Power Guarantee.... As I see it, there are no prorated liquidated damages, they just keep a flat $50,000.00 if fuel and power guarantees are not met." (Exhibit 435). The court finds that the liquidated damages were limited to a failure to meet the energy consumption requirement of the specifications. (See also Exposure Analyses, Exhibits 8007 and 8007A). Envirotech's understanding of the liquidated damages provision accords with the most reasonable interpretation of the written specifications.[42] In conclusion, a review of the facts and circumstances in this case does not establish any conduct of Aiken County or Davis & Floyd as a causative factor in the defective design, manufacture, installation, or operation of the heat treatment equipment. The defects were of such a character that any conduct on the part of Aiken County and Davis & Floyd could not have affected them. V. THIRD PARTY DEFENDANT'S CLAIMS FOR ATTORNEYS' FEES Both Bay-Con and Davis & Floyd claim Envirotech is liable for their attorneys' fees, expenses, and costs incurred in connection with the discovery and trial of the heat treatment issue. 1362 A. Bay-Con Bay-Con's contract with Envirotech specifically provides in Section 46.2: "In the event of litigation or arbitration the prevailing party shall be entitled to recover its legal fees and expenses from the other party." (Exhibit 407). Envirotech's third party action against Bay-Con alleged that Bay-Con breached its subcontract with Envirotech, and, as a result, Envirotech was sued by Aiken County. This allegation was denied by Bay-Con, and Bay-Con prayed for indemnification for any liability it might have to Aiken County arising out of Envirotech's breach of contract, and for attorneys' fees in defending this action. As stated in Section II above, Bay-Con is entitled to indemnification from Envirotech. The express language of the Bay-Con/Envirotech subcontract provides for the payment of attorneys' fees and expenses to the "prevailing party". Therefore, I find that Envirotech is liable to Bay-Con for attorneys' fees and expenses in connection with the litigation of the heat treatment issue. B. Davis & Floyd Unlike Bay-Con, Davis & Floyd has no contractual right to reimbursement of attorneys' fees and expenses from Envirotech. Nevertheless, the court finds Envirotech liable to pay the attorneys' fees and expenses of Davis & Floyd under the equitable rule applied in Campus Sweater and Sportswear Company v. M.B. Kahn Construction Company, 515 F.Supp. 64 (D.S.C.1979), aff'd, 644 F.2d 877 (4th Cir. 1981). In Campus Sweater, the owner of a warehouse sued the contractor who had built it, the subcontractor who had erected its roof, and the manufacturer of the roofing materials, alleging that the roof was defective. The jury found the manufacturer to be the cause of the roof failure, and the subcontractor was absolved of any fault for the defects in the roof. The court found that the subcontractor who had specifically sought attorneys' fees and expenses in his cross claim, was entitled to an award of the same from the manufacturer. The Campus Sweater opinion cited the following equitable principle to support the attorneys' fee award: It is generally held that where the wrongful act of one party has involved another in litigation with a third party, or placed them in such relation to a third party as to make it necessary for him to incur legal expenses to protect his interest, such should be treated as the legal consequences of the original wrongful act and may be recovered as damages. 515 F.Supp. at 110. The court concluded that the subcontractor met the three requirements embodied in this rule: "(1) that [he] became involved in a legal dispute either because of the other party's breach of contract or its tortious conduct; (2) that the dispute was with a third party; and (3) that attorneys' fees were incurred." 515 F.Supp. at 111. Likewise, Davis & Floyd meets these three requirements. It became involved in this litigation solely because of the delicts of Envirotech. Like the subcontractor in Campus Sweater, it has been cleared of any fault in regard to the defective heat exchanger. There was a dispute between Davis & Floyd and a third party, Aiken County.[43] Davis & Floyd did incur attorneys' fees and other expenses as a result of its involvement in litigation over the heat exchanger issue.[44] Therefore, the court 1363 finds that Envirotech is liable to Davis & Floyd for its attorneys' fees and expenses in connection with the litigation of the heat treatment issue. VI. DAMAGES The more credible testimony convinces the court that the heat treatment equipment must be replaced. This was affirmed by Davis & Floyd's engineers. (Tr. 2/9/84 at 103; 12/10/84 at 36). There is no credible evidence in the record that the equipment can be repaired or modified by Envirotech or anyone else so as to comply with the specifications. (Tr. 7/12/84 at 614-16). Aiken County contracted to obtain a system with 100 percent redundancy. The project has two heat treatment units, each designed to handle the twenty million gallon per day average flow predicted for the design year 1995. The project has no bypass because EPA would not allow such a design, and whatever amount of waste is produced by the plant's customers must be processed through the system. (Tr. 9/2/82 at 123-124). Although the flow to the plant is presently averaging only ten million gallons per day, additional wastewater will be received in the future, and the predicted twenty million gallons per day may be reached. (Tr. 9/2/82 at 121-22). I find that the heat treatment equipment as supplied by Envirotech does not provide Aiken County with the backup capability that it had a right to receive. In addition, replacement was required in Section 15S.16 of the specifications if the equipment did not operate in a practical manner. (Exhibit 421). The INA bond further provided, "that should the principal fail to meet, or elect not to meet, the performance requirements as detailed in Specification Section 15S, ..., then the principal and surety agree to pay obligee's cost in removing existing equipment, or replacing the equipment above, per Specification Subsection 15S.16 ..."[45] (Exhibit 5041). Envirotech acknowledged that replacement was specified in the contract during design and after startup. The following statements are uncontradicted: 1. Mr. Breedlove's memo of 8/3/77 states: "He (a Davis & Floyd engineer) stated the specification was so worded to provide funds to replace the entire heat treatment system with our competitor's system." (Exhibit 425). 2. Mr. Breedlove's memo dated 9/26/77 states: "As you know our exposure on this job is significant. If our heat exchanger design does not function properly as required by the specifications, the Engineer has the option of replacing our system with a competitor's system." (Exhibit 430).[46] 3. Mr. Pecci's memo dated 10/4/77 states: "[I]f our system fails the engineer can replace our system with the competitior's system at a cost to BSP of approximately $1 million." (Exhibit 434). 4. Emmett Davis testified that Mr. Castenholtz told him in February 1978: "Not only are we satisfied that this equipment will work, but we are also furnishing you a bond and if the equipment doesn't work, it is going to be replaced." (Tr. 12/10/84 at 20). 5. The exposure analyses dated 1/3/80 and 1/11/80 provided: "Replace heat exchangers and add circulating water systems." (Exhibits 8007 and 8007A). It is clear that the parties contemplated that replacement of the heat exchangers would be necessary should the equipment fail to meet the specifications. Therefore, for the reasons herein stated, the court 1364 finds that replacement cost is the proper measure of damage, since replacement is the only means by which Aiken County can be made whole. Aiken County offered the only evidence regarding the cost to replace the heat treatment system. Dave Tobin, the sales representative for Zimpro, testified that he originally bid $2,650,000.00 in December, 1976, to supply the heat treatment equipment for the project, and the court feels this is a reasonable replacement cost.[47] (Exhibit 5077 at 75-77). Mr. Tobin further testified that in 1982, the cost to replace the heat treatment system at Aiken County with a Zimpro system which would meet the specifications was $6,191,000.00 (Exhibit 5077 at 80). Mr. Tobin's method of ascertaining this 1982 replacement cost, however, was replete with speculation and mystery, and the court refuses to accept such amount. The plaintiff offered no other evidence, nor is such evidence otherwise in the record, of any other means by which the court could compute the replacement cost at trial. The 1976 replacement figure of $2,650,000.00 takes into consideration existing equipment considered salvageable and compatible with the Zimpro system, and it was based on Tobin's onsite review of the equipment in place, review of the specifications, and a review of the original bid. (Exhibit 5077 at 77-79). This quotation includes installation but does not include removal of existing equipment. (Exhibit 5077 at 84). Dixon Teal testified that his company, G.E. Moore Company, had inspected the equipment in September 1982, and could remove the existing equipment for $15,500.00 (Exhibit 5088). Davis & Floyd's Project Manager, Jerry Timmons, testified in 1984 that the cost for Davis & Floyd to check the design submittals and inspect the installation on replacement equipment would be $200,000.00 (Tr. 2/7/84 at 105-106). I find that the total cost to replace the heat treatment system would be $2,865,500.00. This is the amount of actual damages proven by Aiken County. The court recognizes, as Mr. Tobin testified, that there has generally been an increase in the cost of any product since 1976. Having rejected Mr. Tobin's method of determining that increase, however, the court is not free to speculate. On the other hand, the court refuses to deduct any amount from the total replacement cost of $2,865,500.00 for the use that Aiken County has received from the equipment to date since that use has been troublesome, inefficient, and unsatisfactory. Cf. Campus Sweater and Sportswear Company v. M.B. Kahn Construction Company, 515 F.Supp. 64, 103 (D.S.C.1979) (reduction in damages for satisfactory performance of roof over part of its estimated life), aff'd, 644 F.2d 877 (4th Cir.1981). The figure of $2,865,000.00 represents the amount of actual damages proven by Aiken County to a reasonable degree of certainty. The court has found that the conduct of Envirotech was fraudulent. Moreover, the documentary evidence showing its relentless pursuit of a greater profit margin was overwhelming on the question of fraud. That evidence disclosed a calculated scheme by Envirotech to convince Davis & Floyd to allow the installation of the sludge-to-sludge heat exchanger despite Envirotech's own serious reservations about the operability of the equipment. Such conduct can not be tolerated in the business community and, when discovered, should be severely punished. Envirotech was sold to Baker International Corporation in 1982 for the price of $64,789,000.00 (Exhibit 5084 at 29; Exhibit 5085 at 25). This purchase price is good evidence of the ability of Envirotech to pay a punitive damage award. Accordingly, I find that Envirotech is liable to Aiken County for punitive damages in the amount of $1,000,000.00. VII. CONCLUSIONS OF LAW A. Liability (1) Contract and Warranty. A general contractor is liable for any breach of the terms and conditions of 1365 its contract with the owner. See generally 13 Am.Jur.2d Building and Construction Contracts § 27. Likewise, an equipment supplier, such as Envirotech, whose contract with the general contractor incorporates by reference the general contractor's contract with the owner, and who also warrants his work to the owner, is liable in contract to the owner. (Exhibit 407, Section 32). Although not a party to the Bay-Con-Envirotech subcontract, Aiken County was clearly the intended beneficiary of the heat treatment system furnished in this subcontract, and may maintain an action thereon. See, e.g., Wise v. Picow, 232 S.C. 237, 101 S.E.2d 651 (1958). "[T]he intent and purpose of [Bay-Con and Envirotech] was to confer a direct and substantial benefit upon [Aiken County]." United States v. Chester Heights Associates, 406 F.Supp. 600, 604 n. 2 (D.S.C.1976). A contractor and an equipment supplier are liable to the owner for any breach of express warranties contained in the specifications. S.C.Code Ann. § 36-2-313, -318 (1976). See also JKT Company, Inc. v. Hardwick, 274 S.C. 413, 265 S.E.2d 510 (1980). In addition, the South Carolina Uniform Commercial Code specifies "Any affirmation of fact or promise, ... made by the seller to the buyer, whether directly or indirectly, which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods conform to the affirmation or promise." S.C.Code Ann. § 36-2-313 (1976). The liability of a surety is measured precisely by the liability of the principal. Greenville Airport Commission v. USF & G, 226 S.C. 553, 86 S.E.2d 249, 252 (1955). Thus, in this case, on either a contract or warranty theory, if Bay-Con is liable, then Traveler's is liable; if Envirotech is liable, so is INA. The standards by which performance is to be judged are those set out in the specifications and agreed to by the parties, including their sureties. Gurney Industries, Inc. v. St. Paul Fire & Marine Ins. Co., 467 F.2d 588 (4th Cir.1972) (interpreting North Carolina law). Moreover, if the owner or its engineer is not an expert in the field, and the contractor possesses superior expertise with respect to the job to be performed and obtains permission to deviate from the job specifications, the contractor impliedly warrants that the performance requirements of the specifications will be satisfied. J.A. Maurer, Inc. v. United States, 202 Ct.Cl. 813, 485 F.2d 588, 595 (1973). As stated earlier in the findings of fact, the heat treatment equipment supplied by Envirotech through Bay-Con to Aiken County does not meet the contract specifications because of plugging in the heat exchanger. Not only is that failure a breach of the contract between Aiken County and Bay-Con, for which Bay-Con and Envirotech are liable, but it also constitutes a breach of the express warranty created by that contract, the INA bond, and the promises made by Envirotech to Aiken County's agent, Davis & Floyd.[48] Therefore, I conclude that both Bay-Con and Envirotech are liable to Aiken County for breach of contract and breach of express warranty.[49] Of course, the respective sureties, Travelers and INA, are also liable to Aiken County up to the amount of their bonds. In addition, I have found that the conduct of Davis & Floyd was not a causative factor in the failure of the heat treatment equipment to meet the specifications or operate in a practical manner. Thus, the cross-actions of Aiken County, Bay-Con, and Envirotech against Davis & Floyd must fail. (2) Fraud. The elements of common law fraud under South Carolina are a "misrepresentation of material fact, made with knowledge of its falsity or ignorance of its truth, and intended by the maker to induce action in 1366 reliance; lack of knowledge by the other that the fact represented is false, reasonable reliance by the other upon the fact, and harm proximately caused by the reliance." Miller v. Premier Corporation, 608 F.2d 973, 980 (4th Cir.1979). Concealment of material facts, where the circumstances impose a duty to disclose, is actionable fraud. Lawson v. C & S National Bank of S.C., 259 S.C. 477, 193 S.E.2d 124 (1972). In construction cases, the courts have held that a contractor has a duty to fully and fairly advise the owner "of the probable consequences which he knew, or should have known from his experience or the nature of the undertaking...." Mann v. Clowser, 190 Va. 887, 59 S.E.2d 78, 85 (1950). See also S.C.Code Ann. § 36-1-203 (1976) ("Every contract or duty within this act imposes an obligation of good faith in its performance or enforcement"). It is the general rule, and the rule in South Carolina, "that under circumstances which make it the duty of the seller to apprise the buyer of defects in the subject matter of the sale known to the seller but not to the buyer, suppressio veri is as much fraud as suggestio falsi." Brooks Equipment & Mfg. Co. v. Taylor, 230 N.C. 680, 55 S.E.2d 311, 315 (1949) (cited in Lawson v. C & S National Bank of S.C., supra). See also Southern Iron & Equipment Co. v. Bamberg, E. & W. Ry. Co., 151 S.C. 506, 149 S.E. 271 (1929). In this case, the elements of fraud have been proved by clear and convincing evidence. Envirotech misrepresented to Davis & Floyd, the agent for Aiken County, that 1) the equipment, including spacers, had been tested and did, in fact work; and 2) that the heat exchangers could be effectively cleaned with hydrochloric acid. Envirotech also failed to disclose its internal doubts about the heat exchangers, specifically its own engineering report recommending against the installation of a sludge-to-sludge system. This concealment is actionable as fraud because of Envirotech's superior knowledge and its means of knowledge of these facts compared to Davis & Floyd. See Giles v. Lanford & Gibson, Inc., 285 S.C. 285, 328 S.E.2d 916 (S.C.App.1985). In addition, Davis & Floyd expressly reposed its trust and confidence in Envirotech with reference to the suitability of the heat exchangers[50] so as to give rise to a duty on the part of Envirotech to disclose its doubts. See Gordon v. Fidelity & Casualty Company of New York, 238 S.C. 438, 120 S.E.2d 509 (1961). Envirotech intended its acts to induce Davis & Floyd, on behalf of Aiken County, to accept the sludge-to-sludge heat exchangers. Emmett Davis testified that he relied on Envirotech's representations in allowing change order number five and that they were material to this decision. Aiken County would have obtained a heat treatment system that worked but for Envirotech's misrepresentations and fraudulent concealment. Therefore, I conclude that Envirotech is liable to Aiken County for common law fraud. B. Damages 1. Actual. There are two basic rules for computing damages in breach of contract/defective product cases: (1) the value of what was supplied versus what was contracted for; and (2) the cost to replace or fix the defective equipment. Restatement of the Law of Contracts § 346 (1932). The rule to be followed in a particular case depends upon the character and extent of the defect. Mann v. Clowser, 190 Va. 887, 59 S.E.2d 78, 86 (1950). Of course, it is well recognized that, if parties agree to a remedy such as replacement, such an agreement shall be effectuated. S.C.Code Ann. § 36-2-719 (1976). See also Hendrie v. Board of County Commissioners of Rio Blanco County, 153 Colo. 432, 387 P.2d 266, 1 A.L.R.3d 861 (1963); 22 Am.Jur.2d Damages § 56; 11 Williston, Contracts § 1344 (3d ed.). In Globe Refining Co. v. Landa Cotton Oil Co., 190 U.S. 540, 543, 23 S.Ct. 754, 755, 47 L.Ed. 1171 (1902), the Supreme Court established the basic rule for damages 1367 in a contract action, as follows: "When a man makes a contract, he incurs, by force of the law, a liability to damages, unless a certain promised event comes to pass." The measure of damages is "such consequences as may be reasonably supposed to be in contemplation of the parties at the time of making the contract." 190 U.S. at 544, 23 S.Ct. at 755. In the case of Gulf States Creosoting Co. v. Loving, 120 F.2d 195, 201 (4th Cir.1941), the court held: "[A] defendant, who, at the time of the making of a contract, knew all the special circumstances and conditions attendant upon its execution, is liable for those injuries which at that time he had reason to foresee would be the probable result of his breach." The court acknowledges that the cost of replacement is substantial. However, defendants cannot complain when they had the knowledge that replacement or repairs would be necessary if the heat treatment equipment failed to meet the specifications. Ivester v. Family Pools, Inc., 262 S.C. 67, 202 S.E.2d 362 (1974). See also Gurney Industries, Inc. v. St. Paul Fire & Marine Insurance Co., 467 F.2d 588 (4th Cir.1972); McCarty v. United States, 185 F.2d 520, 522 (5th Cir.1950); 22 Am.Jur.2d Damages § 37; 25 C.J.S. Damages § 34. In this case, replacement cost is the proper measure of damages. The heat treatment system, in its present condition, cannot be operated in a practical manner. The system can operate on automatic only fifty percent of the time that it is processing sludge. In addition, maintenance must be performed on the equipment an average of almost forty percent of the time during which it is used. As stated earlier in section six of this order, the system does not have the back-up capability that Aiken County contracted to receive. Envirotech knew of these special needs of Aiken County regarding the performance of the equipment, and it is beyond doubt that it contemplated that replacement would be necessary if the equipment did not perform as designed. Therefore, I conclude that Envirotech and Bay-Con are liable to Aiken County for $2,865,500.00 in actual damages.[51] 2. Punitive. South Carolina has long recognized that punitive damages are mandatory in an action for fraud and deceit when the finder of facts is satisfied that a wrongdoer, at the time of the act or omission, was "conscious or chargeable with consciousness of his wrongdoing." Hardy v. International Paper Realty Corp., 716 F.2d 1044, 1047 (4th Cir.1984). The purposes of punitive damages are to punish a wrongdoer and to deter others from conduct of the same or similar nature. Garner v. Wyeth Laboratories, Inc., 585 F.Supp. 189 (D.S.C.1984). The primary considerations in setting the amount for punitive damages are the character of the wrong, the punishment which should be meted out therefor, and the ability of the wrongdoer to pay. Hicks v. Herring, 246 S.C. 429, 144 S.E.2d 151, 155 (1965). In the case of Robertsen v. State Farm Mutual Automobile Insurance Co., 464 F.Supp. 876, 879 (D.S.C.1979), this court reviewed at length the methods of determining an appropriate amount for punitive damages. The court is aware that Envirotech was merged into Baker International in 1982. However, the fact that a particular defendant has ceased an objectionable course of conduct is irrelevant to accomplishing the broader purpose of deterring others from similar conduct in the future. Moran v. Johns Manville Sales Corp., 691 F.2d 811, 816 (6th Cir.1982); also, the fact that "culpable" persons may no longer be employed is, likewise, irrelevant. Id. at 817. For the reasons stated previously herein, the court has concluded that Envirotech *1368 is liable to Aiken County for $1,000,000.00 in punitive damages. 3. Liability of Surety. A surety can limit his liability to the penal sum named therein. 17 Am. Jur.2d Contractor's Bonds § 131. A surety is not liable for punitive damages absent a showing of active participation in the fraud, 25 C.J.S. Damages § 125(4), and such does not appear in this case. Accordingly, Envirotech's surety, INA, is not liable for any punitive damages. However, the court concludes that, based on their suretyship contracts, Travelers is liable to Aiken County for the full amount of the actual damage award, and INA is liable up to the sum stated in its bond, $2,070,399.00. VIII. CONCLUSION NOW, THEREFORE, IT IS ORDERED AND ADJUDGED that: 1) Aiken County shall have judgment against Bay-Con, Travelers, Envirotech and INA for $2,865,500.00 in actual damages, plus interest thereon at the legal rate from the date of this order; Bay-Con and Travelers shall have indemnity from Envirotech and INA for any amount they pay in satisfaction of this judgment; INA's liability is limited to $2,070,399.00 plus post-judgment interest on that amount. 2) Aiken County shall recover from Envirotech $1,000,000.00 in punitive damages plus interest thereon at the legal rate from the date of this order. 3) Envirotech shall reimburse Bay-Con and Davis & Floyd for their attorneys' fees and expenses in defending the heat exchanger issue; the determination of the amount of their fees and expenses shall be delayed pending appeal of the judgment herein entered. 4) Aiken County, Bay-Con, and Davis & Floyd shall recover their costs from Envirotech. IT IS FURTHER ORDERED AND ADJUDGED that the judgment entered on May 10, 1984, directing Envirotech to pay Davis & Floyd the sum of $1,850.00 in costs incurred in copying certain documents, be, and the same hereby is, reaffirmed and incorporated into this order. Pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, and as discussed earlier in section II.A. of this order, the court finds that there is no just reason for delay in entering this judgment, and the clerk of this court is expressly directed to enter a final judgment in accordance with this order. NOTES [1] The court has been informed that, prior to the institution of this litigation, Davis & Floyd Engineers, Inc. changed its name to Davis & Floyd, Inc. References to the former corporate name in the pleadings and motions on file are, thus, erroneous. [2] Aiken County originally brought the action, and the Authority was added as a party plaintiff by consent order dated November 9, 1981. [3] The original complaint named BSP Division of Envirotech. Envirotech Corporation was added as an additional defendant by an oral order of the court on September 1, 1982. [4] The heat exchanger claim alone involves several million dollars. On the other hand, the other claims have values of not much more than One Hundred Thousand ($100,000.00) Dollars each. [5] The court has recently been informally advised by Aiken County, Bay-Con, and Davis & Floyd that all issues between these three parties have been settled in principle. [6] "Sludge" is the result of the solids collection process in a waste treatment plant. [7] As to the purpose of spacers, see note 9 infra. [8] Envirotech obtained a license for this process in the United States which it began in 1967 at Colorado Springs. However, as noted in these reports of overseas operations, the original heat exchanger design was changed to a sludge to water configuration because of plugging problems. [9] The reason that the outer tube is susceptible to plugging problems is that it must have a series of spacers between the outer wall of the inner tube and the inner wall of the outer tube to maintain the design space due to the operating pressures of the system. Without these spacers the walls could collapse. As noted earlier, this space is referred to as the annular space. (See Model, Exhibit 5070). Materials in the sludge can hang up on the spacers. With the change to sludge to water, there was no possibility of plugging because water flowed around the spacers, not sludge. The configuration of these spacers is important because of their potential to cause clogging. [10] As noted in its internal "proposed plan", Envirotech intended to put together the "lowest cost bid" but "[t]his does not say we'll provide the system he has specified in the documents received on 11/12/76 ... [Y]ou've got no leverage unless you're the low bidder so our best approach was to follow the intent of the specifications with respect to function and capacity but to `disregard' the mechanical detail specifications." (Exhibit 3002). This concept carried through to the sale representative, Bill White, who wrote: "... lets [sic] go with spiral heat exchangers if cheaper lets go with cheapest (sludge to sludge if needed)." (Exhibit 8019). [11] Also noted as an area of concern was the ominous phrase "Remember Colorado Springs No. 1?" [12] See note 9, supra. [13] Mr. Pecci admitted during cross-examination that he had testified at his deposition as follows: Q. In truth and in fact, Mr. Pecci, what happened was the President of your company made the decision from an economic standpoint, that they were going to go against the recommendations of your engineering department, and provide a sludge to sludge heat exchanger; is that not correct: A. I'm not really sure who made the final decision. It was decided at a level highter than I was. Q. Who was the head of the company when you were there in the fall of 1977? A. Paul Castenholtz. Q. And you don't know who made the decision. A. From memos, I assume he did. Q. You also assume that was for an economic reason? A. Yes. Q. Because that's cheaper? A. Yes, there was less heat exchanged in the sludge to sludge. Q. And you think it was an engineering decision? A. I don't think it was an engineering decision. (Tr. 10/29/84 at 172-173). [14] Mr. Breedlove testified with respect to this meeting and the reasons for Mr. Castenholtz's decision: Q. Why did he make that decision, Mr. Breedlove? A. It was his decision to make that decision. Q. You were there, you heard What did he tell you? What was his response? A. My interpretation was it was for economic reasons. Q. Yes, sir. You would make more money if you went sludge to sludge than sludge to water, and what was your response? A. That is right. (Tr. 2/6/84 at 1017-18). [15] Mr. Pecci described the meeting as follows: "In that meeting, engineering voiced their recommendations, marketing voiced their concerns, and a decision was made to supply sludge to sludge heat exchanger at Aiken County." (Tr. 7/26/84 at 44 (emphasis added); See also Tr. 10/30/84 at 225-26). [16] Mr. Pecci testified regarding Envirotech's communications with Davis & Floyd regarding the testing of spacers as follows: Q. Mr. Pecci, ... did you tell Davis & Floyd that you were doing tests on the spacers for Aiken County? A. Yes, that's what this says (referring to Exhibit 6385). Q. And, in fact, you never did any tests on the spacers for Aiken County? A. No, we did not. Q. And did you ever tell Davis & Floyd that you did not do what you represented on July 28th that you were doing? A. No, we did not. (Tr. 10/30/84 at 277). [17] This test report with its results was never provided to Davis & Floyd. (Tr. 11/13/84 at 681). [18] Mr. Dodge, the head of the team which bid the job for Envirotech, testified that spacer design was a very significant fact in the design of the sludge to sludge heat exchanger. (Exhibit 5073 at 138). It is also important to note that the memos quoted in paragraphs 2-8 all were generated by persons with knowledge of the pilot plant study, and were generated after receipt of the study, yet none support Envirotech's contention that this study alleviated Envirotech's concerns with the installation of a sludge to sludge heat exchanger. [19] Indeed, when used at Aiken County, HCL has not been effective. See note 29, infra. [20] The issue of what the pressure loss would be was raised by Davis & Floyd and discussed at a meeting held in Greenwood, S.C., on January 18, 1978. The specific question was "Please advise friction (head losses) across heat exchanger, both sides for clean tubes and for tubes at worst operating conditions." (Exhibit 5082). Envirotech's response was that pressure loss was not a criterion for cleaning the heat exchanger, but rather that temperature differential was. (Tr. 11/7/84 at 309; Tr. 11/13/84 at 670). Moreover, in the drawings originally submitted to Davis & Floyd for approval, there was no realistic method of determining the pressure drop on the annulus side of the heat exchanger, since Envirotech did not provide for any pressure gauges at the entrance to the heat exchanger. (Tr. 2/8/84 at 65-67). Mr. Timmons testified: "That is a standard at Davis & Floyd. Before a pump or after a pump, we require a pressure gauge." (Tr. 11/13/84 at 671). [21] Mr. Davis testified that at his meeting with Mr. Castenholtz he "wanted to express to him our concerns about the process." (Tr. 12/10/84 at 19). He described Mr. Castenholtz's response as follows: Q. Did he respond to your concerns, Mr. Davis? A. Yes, sir he responded very positively.... [H]e said, `Mr. Davis, we have tested this equipment. We don't have any engineering problems.' I said, `Mr. Castenholtz, I am delighted to hear that because we don't know what we are buying right now. We don't have enough information to really draw conclusions and it worries us.' He said, `In addition to that, not only are we satisfied that this equipment will work, but we are also furnishing you a bond and if the equipment doesn't work, it is going to be replaced. There is no problem. It shouldn't be a concern of Davis & Floyd.' (Tr. 12/10/84 at 20). [22] Mr. Breedlove described the effect of plugging on automatic operation of the system as follows: "When the pressure differential reaches a certain limit, you cannot pump an adequate quantity through the system to maintain the level in the reactor, and it can no longer remain on automatic control." (Tr. 1/21/84 at 697). [23] "Pressure loss" is a term used to define the amount of pressure dissipated between two points. For example, when the sludge leaves the reactor on its way to the decant tank, it is traveling through the annular space. As it enters the annular section of the heat exchanger, after leaving the reactor, there is a pressure gauge. This gauge will usually show a high reading such as 260 psi. As it leaves the other end of the annular section of the heat exchanger, there is another pressure gauge. This gauge will show a much lower reading such as 50 psi. The difference between the pressure readings on these gauges is the "pressure loss," or, in the example, 210 psi. Among other things, restrictions cause a greater pressure loss, and thus, the pressure loss is an indication of clogging and plugging in this section of the heat exchanger. [24] These exposure analyses were prepared for management involved in the sale of Envirotech. (Tr. 2/2/84 at 933). [25] As early as January-March, 1980, Envirotech knew that the heat exchanger was, in fact, having problems due to plugging. See discussion at 1356, infra. It also believed that its one year warranty for this equipment commenced on February 22, 1980; yet it waited until a few days after it believed its warranty had expired to notify Aiken County of this potential plugging problem. (Exhibit 6331). [26] Mr. Breedlove admitted that if Envirotech had supplied a sludge to water system to Aiken County on this project, there would be no possibility of plugging in the annular space. (Tr. 2/6/84 at 1015-16). [27] Henry May described his observations during cleaning: "You can see a considerble amount of material collected in the upriser, more than the down comer." (Tr. 5/11/84 at 69). [28] Mr. Bibb, Aiken County's plant manager, testified: "There is not a good way to clean it." (Tr. 1/23/84 at 113). [29] Envirotech's procedure using HCL acid was performed in June, 1982, and it was not effective. (Tr. 11/2/82 at 1427, 29). [30] Mr. Breedlove testified: "If, after cleaning, you correct the pressure drop, and it's not less than 150 p.s.i.g., that's a possibility. You haven't done an adequate job of cleaning." (Tr. 1/26/84 at 542). [31] See note 20, supra. [32] Envirotech conceded that cleaning the heat exchanger to remove plugging is maintenance. (Tr. 2/1/84 at 740). [33] It is undisputed that the heat exchanger clogged to the point that the pumps had to be manually cut on and off in an effort to control the rising level in the reactor. Level control was specified to be an automatic feature. [34] The following equation illustrates this performance parameter: total time spent for maintenance and repairs ____________________________________________ total time operating on sludge plus total time spent for maintenance and repairs. [35] Bay-Con and Travelers offered no proof on their affirmative defenses. [36] At trial, and in their proposed findings of fact and conclusions of law, Envirotech and INA argued that the INA bond was an illegal contract and void because Davis & Floyd failed to adequately justify its requirement in writing to the EPA. 40 C.F.R. § 35.93613(c). This contention is rejected for two reasons, either of which alone justifies the court's conclusion. First, Envirotech and INA did not plead the defense of illegality, which must be set forth affirmatively, in their answer of April 1, 1981. Fed.R.Civ.P. 8(c). Second, EPA did, in fact, approve the plans and specifications, which included a specific reference to the experience bond. [37] Envirotech attempted to prove that Aiken County and Davis & Floyd could not complain about the sludge to sludge heat exchanger since Envirotech's bid submitted to Bay-Con stated its intention to supply a sludge to sludge heat exchanger. However, Envirotech believed itself able to furnish one of three types despite its bid, and a change order was ultimately signed allowing this substitution. A change order to the contract between Bay-Con and Aiken County would not have been required if this equipment had already been a part of that contract. Furthermore, the bid documents simply required a listing of subcontractors, not equipment. A bid which gratuitously lists equipment, even though potentially different from that specified, cannot be regarded as "non-responsive" and thus capable of rejection since the ultimate burden is still on the contractor to meet the performance requirements of the specifications. See, Albert Elia Building Co., Inc. v. Sioux City, Iowa, 418 F.Supp. 176, 180 (N.D.Iowa 1976). [38] Mr. Timmons, Davis & Floyd's vice president charged with the responsibility of certifying the equipment testified as follows: Q. All right, Has Davis & Floyd certified the heat treatment system A. No, we have not. Q. At Aiken County? Why hasn't Davis & Floyd certified the heat treatment system? A. Well, basically, just what I have been talking about. The unit does not operate automatically. It does not operate as it was intended, and as it was designed. The maintenance time and when I talk about maintenance time, I'm just confining that now to that time which is spent for flushing, and backflushing, poly pigging, steam cleaning just that amount of time, exceeds the limit of fifteen percent, as allowed in the specifications. The odor control system has not been demonstrated. The O and M manual has not been provided or the O and M manual and [sic] up-to-date O and M Manual has not been provided, one that the operator can use, one that is a step-by-step detailed outline of how he is to operate the heat treatment unit. (Tr. 2/8/84 at 37). [39] Mr. Timmons also testified that "They did not pass this performance test." (Tr. 2/8/84 at 33). [40] Dr. Edwin L. Barnhart testified for Aiken County as an expert on, inter alia, the characteristics of textile waste as follows: [W]hen you say textile waste, you imply that those materials you listed [fibers, polyvinyl alcohol, acetates] would be present. I would be surprised if I did not find a substantial amount of size of polyvinyl alcohol, polyvinyl acetates, that are a portion of the typical textile manufacturing profile. And a plant that's typically making materials would have these in their effluent. (Tr. 11/15/84 at 17). Similarly, Dr. Carl Adams, Envirotech's expert testified that these substances were commonly used in the textile industry: A. I'm aware that polyvinyl alcohol is being used in the textile industry as a substitute for some of the starch compounds, for sizing and so forth over the past ten or fifteen years. Q. And when you wash that fabric in the textile plant, you wash off that polyvinyl alcohol, don't you. A. That's correct. Q. All right, sir. And then after you wash it off, it's common practice to put a finish on? A. Yes. Q. All right, sir. And typical finishes are acetates? You need to answer. A. That's correct. Q. And acrylics? A. That's correct. Q. All right. And, in fact, acetates and acrylics also are commonly used in the textile industry as fibers synthetic fibers? A. Sure, that's correct. (Tr. 7/17/84 at 295-96). [41] "Heat treatment can generally be applied to all sludges without regard to the characteristics and constituents of the sludge." (Exhibit 1005, II-2 at 9). [42] Section 15S.16 of the specifications, in referring to the liquidated damages provided for in section 15S.17, stated: "If the system is operable but does not meet the power and fuel design requirements, or in the event that the performance tests are not concluded, the full amount of liquidated damages shall be retained...." [43] Although it was Envirotech that first brought Davis & Floyd into this suit via Rule 14 of the Federal Rules of Civil Procedure, I do not believe Campus Sweater is inapplicable merely because Envirotech beat Aiken County to the punch. Aiken County did later make a claim against Davis & Floyd on July 7, 1981. Even though that pleading speaks only in terms of indemnification for Aiken County's liability on issues other than the heat exchanger one, the parties had an understanding that the pleading would encompass a claim by Aiken County against Davis & Floyd for its role in providing the heat exchanger. (Tr. 5/10/84 at 134-37). This latter claim was actually litigated, and the court considers the pleadings amended to conform to the evidence on the issue. Fed.R.Civ.P. 15(b). [44] There is presently no evidence before the court from which the court could determine the amount of attorneys' fees and expenses incurred. The approach taken in Campus Sweater will be adopted here, to wit: the parties to whom fees have been awarded will be asked to submit affidavits as to these amounts for the court's approval, subject to the objections of Envirotech. See, 515 F.Supp. at 110. [45] Frank Breedlove testified that it was his understanding that "[t]he purpose of the bond was to provide assurance to Aiken County that there would be money to replace the heat treatment system, if it didn't meet the specification". (Tr. 2/1/84 at 778). [46] Breedlove testified: "My understanding of the competition was the Zimpro system." (Tr. 1/26/84 at 592). [47] Even Envirotech's witness, Breedlove, estimated that $2,391,000.00 was a maximum exposure in January, 1980. [48] See note 21, supra. [49] By so finding, the court need not decide whether these defendants also breached any implied warranties of merchantability or fitness for a particular purpose. [50] See note 21 and accompanying text, supra. [51] The actual damages for the breaches of contract and warranty are identical to those for fraud in this case. Those for fraud would be measured, generally, by the amount necessary to place the plaintiff in the same position that he would have occupied had he not been defrauded. Thomas v. American Workmen, 197 S.C. 178, 14 S.E.2d 886, 888 (1941).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265592/	657 F.Supp. 56 (1986) Christopher Bruce COLE, by Larry COLE, His Next Best Friend, Plaintiff, v. GREENFIELD-CENTRAL COMMUNITY SCHOOLS, et al., Defendants. No. IP 83-681-C. United States District Court, S.D. Indiana, Indianapolis Division. December 5, 1986. 57 Thomas E.Q. Williams, Greenfield, for plaintiff. Forrest B. Bowman, Jr., Bowman, Tucker & Emery, Indianapolis, for defendants. MEMORANDUM OF DECISION NOLAND, District Judge. I. INTRODUCTION A. Procedural History. This cause came before the Court initially upon the cross motions for summary judgment filed by both parties. On October 28, 1986, this Court issued a written entry which denied the plaintiff's motion for summary judgment, as well as granting in part and denying in part the defendants' motion for summary judgment. As a result, the only issue remaining for trial was whether the defendant school officials had violated the plaintiff's civil rights in disciplining him. 42 U.S.C. § 1983 (1982). The Court ordered that this remaining issue be bifurcated for trial, and further ordered that the question involving the reasonableness of the punishment be tried first pursuant to Rule 42(b). Fed.R.Civ.P. 42(b); see Stewart v. RCA, 790 F.2d 624, 629 (7th Cir.1986). Pursuant to that order a bench trial was conducted on November 6, 1986, in which the Court received evidence regarding 58 the circumstances surrounding the punishment. The evidence consisted of the sworn testimony of witnesses, various exhibits and the deposition of Mrs. Maxwell. Although Mrs. Maxwell was present in the Court, her deposition was submitted to the Court in lieu of her oral testimony. There being no objection to the offer, this Court admitted the deposition into evidence. This Court now enters final judgment in this matter. B. Factual Background The plaintiff in this case, Christopher Bruce Cole, was a child-student in the Greenfield-Central Community School system at all times pertinent to this action. The plaintiff was diagnosed as being hyperactive and being otherwise so emotionally disturbed as to constitute an emotional handicap. The plaintiff had particular problems adjusting to the scholastic setting in that he had a difficult time harmonizing with the other children and his behavior was troublesome to manage. In an apparent effort to discipline him, officials in the Greenfield-Central Community school system employed a number of techniques which included the following: 1. Paddling; 2. Seating the plaintiff at an isolated desk in the classroom or an isolated table in the cafeteria; 3. Refusing to allow the plaintiff to accompany the class on a field trip; and 4. Taping the mouth of the plaintiff shut during class. In addition, the plaintiff charges that on one occasion he accidentally jabbed himself with the leaded end of a pencil, and that his request to visit the office for medical treatment was denied wrongfully by his teacher, Mrs. Maxwell. At all times relevant to this case, Mrs. Maxwell was the plaintiff's teacher and Mr. John was the principal of the plaintiff's school. All of the disciplining in this case was administered by either Mrs. Maxwell or Mr. John. Having carefully reviewed all of the evidence, this Court concludes that the plaintiff was a substantial behavioral problem both in the school and in the classroom. The plaintiff engaged in the following disruptive activities while on school property: climbing on the furniture; talking back to his teacher; distracting the other students; poking other students; kicking other students; spitting upon other students; leaving his seat without permission; making belching noises; speaking at improper times; forging his father's signature on a note sent to his home; sticking his tongue out and making faces to the other students; attacking other children with sufficient force to knock them off of their feet; moving furniture in the classroom; intentionally running into other children; eating meals without employing his utensils; and licking the food off of his tray in the lunchroom. Mrs. Maxwell stated that the plaintiff was the most troublesome and disruptive student that she has ever encountered in her eight years of teaching. Mr. John testified that the plaintiff was one of the two most difficult behavioral problems that he has ever encountered in twenty years as a principal. Mr. John also testified that every positive and negative behavioral modification technique was employed to correct the plaintiff's conduct. The behavior of the plaintiff caused the school system and bus company to alter the bus route in order to minimize the duration of the other children's exposure to the plaintiff while riding the bus. Mr. John and Mrs. Maxwell employed numerous disciplinary techniques to correct the plaintiff's behavior without success. II. DISCUSSION The only issue that remains unresolved is whether the aforementioned discipline techniques violated the plaintiff's constitutional right to due process and equal protection of the laws. Initially, it is important to note that "[h]andicapped children are neither immune from a school's process nor are they entitled to participate in programs when their behavior impairs the education of other children in the program." Stuart v. Nappi, 443 F.Supp. 1235, 1243 (D.Conn.1978). As a result, the plaintiff is not entitled to any unique exemptions 59 or protections from a school's normal disciplinary procedures regarding corporal punishment because of his handicap. See Kaelin v. Grubbs, 682 F.2d 595, 602 (6th Cir.1982); Doe v. Koger, 480 F.Supp. 225, 230 (N.D.Ind.1979). Moreover, in order to establish liability against each of the various defendants, the plaintiff must make a greater showing than that required in a normal tort case because the defendants all enjoy a certain immunity from section 1983 liability. Greenfield-Central School System: Although the parties have not briefed the issue, it is possible that Greenfield-Central constitutes an "alter ego" of the state of Indiana and is therefore entitled to immunity from suit pursuant to the Eleventh Amendment. Unified School District No. 480 v. Epperson, 583 F.2d 1118 (10th Cir. 1978). Assuming, arguendo, that it is not, then it does constitute a municipality pursuant to Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). In that case, Greenfield-Central is liable to the plaintiff if its alleged unconstitutional action was the execution of a "policy statement, ordinance, regulation or decision officially adopted and promulgated" by the ruling body. 436 U.S. 690, 98 S.Ct. 2036. School Board, Mr. John (principal), and Mrs. Maxwell, (teacher): It is quite well-settled that all of these defendants are entitled to qualified immunity from a Section 1983 suit. Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975) (school board and school administrators); Doe v. Renfrow, 631 F.2d 91 (7th Cir.1980), cert. denied, 451 U.S. 1022, 101 S.Ct. 3015, 69 L.Ed.2d 395 (1981) (school principal); Flores v. Edinburg Consolidated Independent School District, 554 F.Supp. 974 (S.D.Tex.1983), rev'd on other grounds, 741 F.2d 773 (5th Cir.1984) (school teacher). In order for the plaintiff to establish that these defendants acted beyond the bounds of this privilege, he must show that the particular defendant(s) should reasonably have known that their conduct was in violation of the plaintiff's clearly established constitutional rights. Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). The plaintiff must also show that each defendant had some level of personal responsibility. Rascon v. Hardiman, 803 F.2d 269, 273-74 (7th Cir.1986). In addition, the Supreme Court has carefully delineated the role of the federal courts when reviewing section 1983 challenges to school discipline: It is not the role of the federal courts to set aside decisions of school administrators which the court may view as lacking a basis in wisdom or compassion.... The system of public education that has evolved in this Nation relies necessarily upon the discretion and judgment of school administrators and school board members and § 1983 was not intended to be a vehicle for federal court correction of errors in the exercise of that discretion which do not rise to the level of violations of specific constitutional guarantees. Wood v. Strickland, 420 U.S. 308, 326, 95 S.Ct. 992, 1003, 43 L.Ed.2d 214 (1975) (citations omitted). A. Due Process It is clear that the state of Indiana has authorized the use of moderate corporal punishment. Ind.Code § 20-8.1-5-2 (1975). The United States Supreme Court has also made its position on corporal punishment and the Due Process Clause quite clear. "We conclude that the Due Process Clause does not require notice and a hearing prior to the imposition of corporal punishment in the public schools, as that practice is authorized and limited by the common law." Ingraham v. Wright, 430 U.S. 651, 682, 97 S.Ct. 1401, 1418, 51 L.Ed.2d 711 (1977); see also Brooks v. School Board of City of Richmond, 569 F.Supp. 1534 (E.D.Va.1983). Thus, "as long as disciplinary corporal punishment is within the limits of the common law privilege," its use does not constitute a violation of Due Process. Id., 430 U.S. at 676, 97 S.Ct. at 1415. In order to determine whether certain corporal punishment falls within the common law privilege defined by Indiana law, 60 it is necessary to analyze the following four elements: (1) The teacher must have the general authority to inflict corporal punishment on the pupil; (2) the rule violated must be within the scope of the educational function; (3) the violator of the rule must be the one punished; and (4) the punishment inflicted must be in proportion to the gravity of the offense. The Teacher Privilege to Use Corporal Punishment, 11 Ind.L.Rev. 349, 352 (1978) (and cases cited therein). With regard to the first element, it was noted above that Indiana common and statutory law grants school officials the general authority to impose corporal punishment upon students within their ward. Ind.Code § 20-8.1-5-2 (1975); Indiana State Personnel Board v. Jackson, 244 Ind. 321, 328, 192 N.E.2d 740, 743-44 (1963); Vanvactor v. State, 113 Ind. 276, 15 N.E. 341 (1887). The other elements, however, hinge upon the circumstances surrounding the punishment and are thus fact-specific. With regard to whether the rule violated by the student furthered the educational function, this Court has carefully reviewed all of the evidence in this case and concludes that rules breached by the plaintiff did further the educational function. It cannot reasonably be disputed that the need to maintain order in the classroom and the need to protect the safety of the children are essential to the educational function. It is clear that in disciplining the plaintiff, the defendants sought to limit the amount of disruption emanating from the plaintiff as well as to ensure both the protection and orderly education of the other students. As a result, the rules underlying the disciplinary enforcement clearly served an educational function. In addition, based upon the evidence presented to the Court, there is no serious contest that each incident of discipline was preceded by some type of misconduct on behalf of the plaintiff. Thus, element three is established. The single issue remaining therefore, is whether the punishment inflicted upon the plaintiff was proportionate to the offense committed. Reviewing the five instances emphasized by the plaintiff, this Court finds, as a factual matter, that two of the instances did not constitute punishment. In the first instance, the plaintiff alleges that he was prohibited from attending a class field trip. At trial, it was established that the plaintiff had attended two of the three field trips and could have attended the third field trip on the condition that he be accompanied by an adult who could monitor his behavior (this rule was imposed because of the plaintiff's behavior during previous field trips). Other adults served as chaperones during the field trips, and the plaintiff's grandmother offered to attend as the plaintiff's custodian. The plaintiff voluntarily elected not to attend the field trip on these conditions. Because the restrictions placed upon the plaintiff were limited, and the plaintiff voluntarily elected to forego the field trip, the conduct of the defendants did not constitute punishment. The second instance involves the pencil lead accident. On that occasion, the plaintiff accidentally injured his hand by poking it with a pencil. Upon examining the injury, Mrs. Maxwell concluded that immediate medical attention was unnecessary and therefore denied the plaintiff's request to visit the office. Notwithstanding a small scar, the plaintiff suffered no other adverse effects from the incident. There is nothing to indicate that Mrs. Maxwell had punitive designs when she denied the plaintiff's request by telling the plaintiff that he would "be fine." The federal courts are not a vehicle to examine such insignificant exercises of discretion by elementary school teachers. The Court will address the remaining three punishments, paddling, isolation seating in the classroom/cafeteria, and mouth taping. 1. Paddling: It was established that the plaintiff was paddled on one occasion by Mr. John. Mr. John testified that paddling was not the preferred method of disciplining, but that it was used only as a last resort. Mr. John discussed the prospect of paddling with the plaintiff's father and the plaintiff's father stated that it merited consideration. As a result, when Mr. 61 John apprehended the plaintiff while in the act of running over some smaller children, Mr. John told the plaintiff that should this conduct persist, he would be paddled. On the very next day, Mr. John observed the plaintiff running over other students in the same fashion. Mr. John then paddled the plaintiff on the buttocks (in the presence of a witness), striking him three times with a paddle (24" long and 3/8 " thick) thereby inducing a temporary sting. Under these circumstances, the punishment was clearly not excessive given the plaintiff's precipitating conduct and thus was well within Mr. John's common law privilege. 2. Isolation Seating: Mrs. Maxwell testified that the plaintiff had the ability to control his behavior when it was in his best interests. Deposition, Mary Ann Maxwell, Mar. 1, 1985, pp. 11, 39-40. For this reason, she pursued innumerable techniques to modify his normally disruptive behavior. One technique commonly employed by herself and the school was to seat the malefactor in an isolated area of the classroom or cafeteria. Isolation seating involves placing a pupil in a seat and leaving all of the seats adjacent to the pupilor the lunch table of the pupilvacant. Mrs. Maxwell testified that the plaintiff disrupted her class almost every day. Id. at p. 10. Bruce's disruptive behavior included physically abusing the other students, spitting upon the other students, talking out of turn, climbing on the furniture, making disruptive noises and improperly eating his food. Having reviewed all of the evidence, this Court concludes that isolation seating is a relatively innocuous disciplining technique and that such punishment was warranted given the plaintiff's behavior. In addition, the Court notes that on at least one occasion, Mrs. Maxwell justified the isolation as a means to protect the other children. Bruce Cole, Trial Transcript, Direct Examination at p. 14. 3. Taping: Although it is not disputed that on certain occasions Mrs. Maxwell caused the plaintiff to place a one inch strip of masking tape vertically upon his lips, there is a conflict as to the number of instances and the duration of the placement.[1] The evidence at trial established that neither Mr. John nor any other school official authorized or was aware of the taping. Thus, because of their qualified immunity neither Mr. John nor the Greenfield Central Community School System may be held liable pursuant to section 1983 for the incidents. Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978) (official policy); Rascon v. Hardiman, 803 F.2d 269, 273-74 (7th Cir.1986) (local supervisory officials not liable on a respondeat superior theory). 62 Mrs. Maxwell testified that the taping technique was used on two occasions. The plaintiff admitted that Mrs. Maxwell never placed the strip of masking tape (the tape was placed on the plaintiff's lips vertically rather than horizontally) on the plaintiff's mouth herself, but instead instructed the plaintiff to put it there himself. Bruce Cole, Trial Transcript, Cross-Examination at p. 33. Moreover the plaintiff testified that he would remove the tape himself, rub his lips and then replace the tape. Id. Direct Examination at 6. Mrs. Maxwell testified that on the first occasion, she instructed Bruce to be quiet several times after his noises had rendered her unable to continue. When Bruce failed to respond, she offered him a piece of tape "to remind him to be quiet." Deposition, Mary Ann Maxwell, Mar. 1, 1985 at 15. Bruce placed the tape upon his lips, but then immediately removed it and placed it above his lip while smiling; the plaintiff did, however, become quiet. Id. Similar circumstances surrounded the second instance. The plaintiff had sabotaged the classroom environment, Mrs. Maxwell threatened him with a piece of tape, the plaintiff failed to cooperate and she then gave him the tape. Id. at 16. The plaintiff then threw the tape onto the floor, Mrs. Maxwell instructed him to place it upon his lips, he promptly removed it, hung it from his upper lip, and threw it away shortly thereafter. Id. Mrs. Maxwell testified that she elected to employ the tape rather than expel the plaintiff because taping was less severe and it was consistent with her overall goal of keeping the plaintiff in the mainstream of the educational experience. Id. at 16 and 43. Having reviewed all of the evidence, this Court finds as a factual matter, that the taping incidents were symbolic, demonstrative disciplinary techniques (rather than a punitive, physically painful technique) designed to remind the plaintiff to remain silent, similar to placing one's fingers to his lips. Furthermore, because the plaintiff placed the tape on himself and removed it at will, the method resulted in minimal physical discomfort.[2] In addition, it was established that the plaintiff was a prodigiously problematic pupil who wreaked havoc throughout the school. Innumerable techniques were employed to modify his behavior but to no avail. Mrs. Maxwell's patience and her desire to keep the plaintiff in the mainstream educational experience were laudable under the circumstances. She had a duty not only to the plaintiff but to all of the pupils in her classroom to provide them an adequate educational experience. As a result, her initiation of the taping incidents, though not exemplary, did not exceed the bounds of her common law privilege to discipline her pupils.[3] As a result, the plaintiff's section 1983 claim, if it is to succeed at all, must do so on Equal Protection grounds. B. Equal Protection The plaintiff claims that he is a member of a class, the handicapped, that has been subject to discrimination in the Greenfield-Central Community School System because of their handicapped status; the discrimination being the method by *63 which the students are disciplined. The plaintiff contends that this discriminatory disciplining violates his right to equal protection of the law. The plaintiff, however, has not established that he is a member of a suspect class, or that any of the interests involved were fundamental pursuant to Equal Protection clause analysis. See Ingraham; San Antonio School District v. Rodriquez, 411 U.S. 1, 35, 93 S.Ct. 1278, 1297, 36 L.Ed.2d 16 (1973) (right to education is not a fundamental right). As a result, the defendants need only show that there was a rational basis for their conduct in order to defeat the plaintiff's claim. The discussion in Section II-A of this opinion demonstrates that there was a rational basis for all of the defendants' conduct in this case. The testimony established that the plaintiff received the same punishment that any other child who engaged in such conduct would receive. This case serves to reinforce and demonstrate the importance of the Supreme Court's position in Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975). A teacher and a principal are entitled to substantial discretion in handling the day-to-day crises that arise in the schools. The federal courts were not designed to enmesh themselves in an elementary school's disciplinary decision, especially when the school officials have painstakingly striven to accommodate the behavior of a particularly difficult child. An elementary school cannot be subjugated by the tyrannical behavior of a nine-year-old child. III. CONCLUSION For the reasons stated above, judgment is entered in favor of the defendants and against the plaintiff Christopher Bruce Cole. JUDGMENT This cause came before the Court for trial without a jury on November 6, 1986, during which testimony was given and evidence presented. The Court, having examined the evidence and being duly advised in the premises, hereby finds in favor of the defendants, Greenfield Central Community Schools, Robert D. Erwin, Richard L. Elsbury, John D. Whisler, J.B. Stephens and Jack W. McQueeney, its Board of Directors, and Mr. Phillip G. John, school principal, and Mrs. Mary Ann Maxwell, school teacher. In accordance with its Memorandum of Decision, the Court now ENTERS JUDGMENT for the defendants. IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that plaintiff taken nothing by way of his complaint, and that JUDGMENT BE ENTERED in favor of the defendants; with costs to be borne accordingly. NOTES [1] The plaintiff contends that he was taped on four to five occasions. Bruce Cole, Trial Transcript, Direct Examination, at 11. Mrs. Maxwell, on the other hand, contends that the taping occurred on only two occasions. Deposition, Mary Ann Maxwell, Mar. 1, 1985, at 14-17. At the trial, the Court had an opportunity to observe the demeanor of the plaintiff. Many of the plaintiff's statements were inherently inconsistent with his own previous statements on the stand, his deposition, or his pretrial affidavits. In addition, the plaintiff exhibited an evasive tendency and an inability to remember the circumstances surrounding selective, essential events. As a result, the plaintiff's credibility was brought into question. The affidavits prepared in the office of plaintiff's counsel to support the complaint and in opposition to the motion for summary judgment are particularly suspect. In his initial affidavit, the plaintiff indicates that gray duct tape was used to seal his mouth. Exhibit C to Plaintiff's Complaint, Bruce Cole, May 9, 1983 at ¶ 9. Upon cross-examination at trial, it was established that simple masking tape had been used, and that the source of the "gray tape accusation" was without foundation. Bruce Cole, Trial Transcript, Cross-Examination at 29-36. Moreover, in paragraph 9 of the plaintiff's May 9, 1983 affidavit and in paragraphs 2, 3, 4 and 7 of part II of the Affidavit of Bruce Cole in Support of Summary Judgment and in Opposition to Summary Judgment of the Defendant, Dec. 28, 1985, the plaintiff stated that he never disrupted Mrs. Maxwell's class and that he had no idea why he was punished. The assertions were completely discredited at the trial, even by the plaintiff's own testimony. Because of the multiple inconsistencies and contradictions in the various statements of the plaintiff, the Court is hesitant to place excessive reliance upon his testimony. Rather, the Court finds the testimony of Mary Ann Maxwell the more credible and will thus rely on it when a contradiction arises. [2] The plaintiff testified that the taping caused a red rawness in the area of his mouth. Other evidence, however, indicated that the plaintiff had a habit of licking his lips and suffering chafed lips as a result. This Court concludes that the two limited taping instances were not the source of the alleged redness. [3] Counsel for the plaintiff called a child psychologist to testify as to the propriety of the punishment. The question of which disciplinary treatment is in vogue with the reigning psychological schools is distinct from the question of what corporal punishment is constitutionally permissible. It is the latter rather than the former question which this Court is called to decide. The psychologist generally condemned all corporal punishment and he focused on the mouth taping, the most egregious of the disciplining techniques. Although he condemned the taping, he was unable to categorize the taping as punitive (physical discomfort) or symbolic (demonstrative example). Elementary school teachers are not expected to be clinical psychologists. Mrs. Maxwell exhausted all potential methods for rectifying the plaintiff's behavior. The taping of the plaintiffs mouth as a last resort did not violate the plaintiffs clearly established constitutional rights and was well within Mrs. Maxwell's common law privilege under these circumstances.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265597/	657 F.Supp. 405 (1987) In the Matter of the Arbitration Between CONSOLIDATED RAIL CORPORATION, Petitioner, and NATIONAL RAILROAD PASSENGER CORPORATION, Respondent. Civ. A. No. 87-0510. United States District Court, District of Columbia. April 6, 1987. As Amended May 6, 1987. Gerald P. Norton, Washington, D.C.; Laurence Z. Shiekman and Thomas E. Zemaitis, pro hac vice, Philadelphia, Pa., for petitioner Conrail. Harold R. Henderson, Christopher M. Klein and John C. Morland, Washington, D.C., for respondent Amtrak; William R. Perlik, Deanne C. Siemer and Michael A. Mello, Washington, D.C., of counsel. MEMORANDUM GASCH, Senior District Judge. I. INTRODUCTION The issue which today confronts the Court is narrow: whether a contract between 406 two parties to arbitrate their differences requires the Court to compel arbitration where the issue to be submitted demands a ruling grounded on public policy considerations. On January 4, 1987, a train controlled by the Consolidated Rail Corporation ("Conrail"), petitioner, failed to heed a series of slow and stop signals and consequently entered the path of a high speed passenger train operated by the National Railroad Passenger Corporation ("Amtrak"), respondent. At the track juncture near Chase, Maryland, a collision ensued, resulting in 16 deaths, several hundred injuries and millions of dollars in property damage. Since the accident, a number of lawsuits have been filed against both Conrail and Amtrak alleging negligence, gross negligence, and wanton and willful misconduct. The redress sought by these lawsuits includes punitive damages. Conrail and Amtrak are parties to a contract which arguably bears upon liability apportionment for the aforementioned accident. In the Second Amended and Restated Northeast Corridor Freight Operating Agreement ("Freight Operating Agreement" or "Agreement") of October 1, 1986, Amtrak agreed, inter alia, to indemnify Conrail for injuries to Amtrak passengers. Section 5.6 of the Agreement states as follows: Amtrak agrees to indemnify and save harmless Conrail and Conrail Employees, irrespective of any negligence or fault of Conrail or Conrail Employees, or howsoever the same shall occur or be caused, from any and all liability for injuries to or death of any Amtrak Passenger and for loss of, damage to, or destruction of any property of any such passenger. On the basis of this provision, Conrail seeks indemnification from Amtrak for all the injuries arising from the accident at Chase, Maryland. Despite the obvious breadth of the Agreement's indemnification provision, Amtrak claims that it is not obligated to defend or otherwise reimburse Conrail for any damages. Amtrak maintains that it need not indemnify Conrail because the conduct which caused the accident was reckless, wanton, willful, or grossly negligent. Amtrak contends that an indemnification agreement embracing any such conduct is unenforceable as against public policy. Similarly, Amtrak argues that there can be no indemnification for punitive damages. See National Railroad Passenger Corp. v. Consolidated Rail Corp., Civil Action No. 87-0277 (D.D.C.1987) (pending complaint for declaratory judgment). Pursuant to the Federal Arbitration Act ("the Act"), Conrail filed this petition to compel arbitration in response to Amtrak's motion for a declaratory judgment on the indemnification issue. See 9 U.S.C. § 3. Conrail bases its petition on section 4.3 of the Freight Operating Agreement, stating that, [e]xcept as otherwise provided in this Agreement, any claim or controversy between Amtrak and Conrail concerning the interpretation, application or implementation of this Agreement shall be submitted to binding arbitration in accordance with the provisions of the Arbitration Agreement dated April 16, 1971, among Amtrak and certain other railroads. As between the parties hereto, the term of said Arbitration Agreement shall be deemed to continue during the term hereof and this Agreement shall be deemed to be a "Basic Agreement" under section 4.5 of said Arbitration Agreement.[1] On the basis of this broad arbitration clause, Conrail contends that the Court must submit the indemnification question to the National Arbitration Panel. For reasons hereafter provided, the Court disagrees 407 and denies Conrail's petition to compel arbitration. II. DISCUSSION Resolution of the present controversy requires the Court to consider the scope of the Federal Arbitration Act. See 9 U.S.C. § 2. The Act was passed in an effort to make agreements to arbitrate valid and enforceable in the federal courts. Congress noted that in the past, courts had "in the main ... denied relief to the parties seeking to compel the performance of executory agreements to settle and determine disputes by arbitration." S.Rep. No. 536, 68th Cong., 1st Sess. 2 (1924). Since the Act's promulgation, the Supreme Court has liberally endorsed agreements to arbitrate. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 3353, 87 L.Ed.2d 444 (1985). This strong federal policy has given rise to a presumption in favor of arbitration. The Supreme Court has written that all doubts should be resolved in favor of the Act's coverage. See AT & T Technologies, Inc. v. Communications Workers of Am., ___ U.S. ___, 106 S.Ct. 1415, 1419, 89 L.Ed.2d 648 (1986). Notwithstanding this important federal policy, not all disputes are arbitrable. It is settled law that it is the duty of courts, not arbitrators, to decide whether a particular arbitration clause is operative. See AT & T Technologies, Inc., supra, 106 S.Ct. at 1418. Courts should depart from this rule only when the clear and unmistakable language of the arbitration clause demonstrates the intent of the parties to have an arbitrator make this initial determination. Id. In support of its petition to compel arbitration, Conrail argues that the arbitration clause at issue contains such language. See Conrail's Motion to Compel Arbitration at 14. In support, Conrail points to language in the Agreement that section 4.3 governs "any claim or controversy between Amtrak and Conrail concerning the interpretation, application or implementation of this Agreement...." Freight Operating Agreement at § 4.3. While this language is undoubtedly broad, the Court does not believe that it "clearly and unmistakably" provides that arbitrability must be decided by an arbitrator. Language sufficient to give the decision to an arbitrator must expressly state the parties' intent to take the decision away from a court; it is not enough that broad language might be read to embrace the conclusion. As no explicit language is present, the Court will resolve the threshold issue. In evaluating the propriety of submitting a case for arbitration, the first question, always, is whether the parties have agreed to arbitrate the dispute. Where a contract contains an arbitration clause, there is a presumption that the parties intend arbitration. See AT & T Technologies, Inc., supra, 106 S.Ct. at 1419. In such cases, the Supreme Court has held that the intent to arbitrate should be found "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." Id. (citing to Steelworkers v. Warrior & Gulf Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960)). The language at issue, requiring "any claim or controversy" arising under the Freight Operating Agreement to be settled by arbitration, demonstrates a manifest intent to arbitrate. As such, the Court finds that Conrail has satisfied the first criterion for compelling arbitration. Having determined that the parties intended to arbitrate this dispute, the Court must next ascertain "whether legal constraints external to the parties' agreement forecloses the arbitration of [their] claims." Mitsubishi Motors Corp., supra, 105 S.Ct. at 3355. Section 2 of the Federal Arbitration Act states the legal requirements for a proper arbitration clause. The Act recites, in relevant part, [a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such a contract ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 408 9 U.S.C. § 2 (emphasis added). It is undisputed that the Freight Operating Agreement involves commerce and therefore is subject to section 2. It is less clear whether any grounds exist in law or in equity to find the Agreement's arbitration clause unenforceable. The exception set out in section 2 of the Act is traceable to Congress' concern that an "arbitration agreement [should be] placed upon the same footing as other contracts." H.R.Rep. No. 96, 68th Cong., 1st Sess. 1 (1924); cf. AT & T Technologies, Inc., supra, 106 S.Ct. at 1418. Toward this end, Congress drafted section 2 to reflect that arbitration agreements, like other contracts, are subject to revocation on the basis of deficiencies that typically void contracts. The Supreme Court acknowledged in Mitsubishi Motors Corp., supra, 105 S.Ct. at 3354, that "fraud or overwhelming economic power would provide grounds for [] revocation [of an arbitration agreement]." Other courts have likewise held that lack of consideration, lack of capacity, lack of authority to contract, frustration, or other illegality will also invalidate an agreement to arbitrate. See, e.g., American Airlines, Inc. v. Louisville and Jefferson County Air Board, 269 F.2d 811, 816 (6th Cir.1959); Eastern Marine Corp. v. Fukaya Trading Co., S.A., 364 F.2d 80 (5th Cir), cert. denied, 385 U.S. 971, 87 S.Ct. 508, 17 L.Ed.2d 435 (1966). The Court is of the opinion that Conrail's petition to compel arbitration must similarly fail because the arbitration clause in the Freight Operating Agreement may be unenforceable in the present case. Whether the Court or an arbitration panel decides the merits of the instant controversy, the issues will be the same: must Amtrak indemnify Conrail for any damages arising out of the Chase, Maryland disaster founded upon reckless, wanton, willful, or grossly negligent acts by Conrail or resulting in a punitive damages award. These are neither strictly factual nor legal issues; they are largely questions of public policy. See, e.g., Alabama Great Southern R.R. v. Louisville & Nashville R.R., 224 F.2d 1, 4 (5th Cir.1955). The Supreme Court has expressly held that public policy is not a proper subject for arbitrators; rather, "the question of public policy is ultimately one for resolution by the courts." W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766, 103 S.Ct. 2177, 2183, 76 L.Ed.2d 298 (1983); see also 16 Williston on Contracts § 1922C at 517-18 (3d ed. 1976) ("[t]here are certain issues which the arbitrator will not be allowed to decide ... because of the presence of some element of public policy"). Because the Court finds that the merits of this case are inextricably linked to public policy determinations and arbitration is an improper mechanism for such a decision, the Court denies the motion of Conrail to compel arbitration. In so holding, the Court slightly expands the exception to arbitration embodied in section 2 of the Federal Arbitration Act. Nevertheless, this holding is consonant with prior decisional law. While no other Court seems to have confronted this particular situation, there are undoubtedly "grounds [that] exist at law" to hold a contract provision illegal and unenforceable on the basis of public policy. See, e.g., Great Southern R.R., supra, 224 F.2d at 4; see also Simpson Contracts § 214 (1954).[2] At least one additional factor argues in favor of denying Conrail's petition to compel arbitration. In enacting the Federal Arbitration Act, Congress noted its concern for expediting the resolution of disputes: [i]t is practically appropriate that the action should be taken at this time when 409 there is so much agitation against the costliness and delays of litigation. H.R.Rep. No. 96, 68th Cong., 1st Sess. 2 (1924). Although the Supreme Court has construed this concern as secondary to Congress' principal goal of making arbitration agreements enforceable in federal court, see Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-20, 105 S.Ct. 1238, 1241-42, 84 L.Ed.2d 158 (1985), this lesser purpose ought not to be ignored. The Court has ruled that public policy must be considered to properly evaluate the vitality of the indemnification agreement which allegedly binds the parties in this case. Whether an arbitration panel refuses to consider public policy or erroneously decides the issue, this Court will inevitably be requested to review the decision. See W.R. Grace & Co., supra, 461 U.S. at 766, 103 S.Ct. at 2183. Both the petitioner and the respondent have represented that they will not settle cases with passenger victims of the Chase, Maryland disaster until liability apportionment is clear. Given the public interest in expeditiously compensating those aggrieved parties and of lessening the burden of the federal judiciary, the Court is reluctant to submit to arbitration a case which cannot be finally decided by arbitrators. Referral would beget only delay and, accordingly, the Court refuses to require arbitration. ORDER Upon consideration of the petition of Consolidated Rail Corporation ("Conrail") to compel arbitration, the opposition of National Railroad Passenger Corporation ("Amtrak") thereto, oral argument, and the entire record herein, it is by the Court this 6th day of April, 1987, ORDERED that Conrail's petition be, and hereby is, denied; and it is further ORDERED that Amtrak shall brief its motion for summary judgment on the question of whether public policy invalidates the indemnification clause in the Freight Operating Agreement by April 20th, 1987, and it is further ORDERED that Conrail's opposition shall be submitted in accordance with the timetable set forth in Local Rule 108. NOTES [1] Section 4.7 of the Arbitration Agreement provides, in relevant part, [a]ny claim or controversy covering the interpretation, application or implementation of this Agreement shall be submitted to the National Arbitration Panel for arbitration in accordance with the provisions hereof as interpreted and applied by the National Arbitration Panel. See The National Railroad Passenger Corporation Arbitration Agreement, dated April 16, 1971, at § 4.7. [2] The Supreme Court has recently admonished lower courts not to rule on the potential merits of arbitrable claims in determining whether to submit the claims to arbitration. See AT & T Technologies, Inc., supra, 106 S.Ct. at 1419. As such the Court recognizes that the indemnification provision in the Freight Operating Agreement may be invalid on public policy grounds and is therefore not properly referable to arbitration. However, in reaching this conclusion, the Court expresses no opinion as to the ultimate enforceability of the indemnification clause.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367584/	432 F. Supp. 542 (1977) Joseph DORSEY, Plaintiff, v. CONSOLIDATED BROADCASTING CORPORATION, RADIO STATION WEMP, Defendant. No. 77-C-144. United States District Court, E. D. Wisconsin. May 20, 1977. David A. Melnick, Milwaukee, Wis., for plaintiff. Quarles & Brady by Laurence E. Gooding, Jr., Milwaukee, Wis., for defendant. DECISION and ORDER MYRON L. GORDON, District Judge. The defendant has moved to strike the second claim of the plaintiff's complaint. This motion will be granted. The plaintiff claims that he has been the victim of age discrimination allegedly perpetrated by his employer, the defendant, *543 in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. In his first claim, Mr. Dorsey seeks damages for "lost compensation, lost severance pay, and other benefits", and his second claim requests damages for injury to his "professional reputation as a radio broadcaster and disc jockey." It is this latter claim which the defendant has moved to strike. The parties dispute the proper construction of the ADEA with respect to claims for damage to reputation. Mr. Dorsey urges that such damages are or should be allowed under the act as part of lost wages or other compensation. The defendant argues that such claims are not within the purview of the act. The parties suggest that, to their knowledge, no court has decided the narrow issue here in dispute. By analogy, however, Rogers v. Exxon Research and Engineering Co., 550 F.2d 834, 839 (3d Cir. 1977) is relevant. There, the court reversed a lower court determination which had allowed a claim for damages for pain and suffering under the ADEA. I referred to the district court's decision in the same case, reported at 404 F. Supp. 324 (D.N.J.1975), in Wisniewski v. All-Star Insurance Corp., no. 76-C-662, and Shotola v. All-Star Insurance Corp., no. 76-C-447 (E.D.Wis. January 14, 1977). The court of appeals, in Rogers, stated at page 839: "While recognizing that no specific provision in the statute or decisional law authorized recovery for emotional and psychic distress, the district court submitted that item of damages to the jury. The trial judge reasoned that the ADEA created a new tort and conferred broad remedial authority upon the courts to redress statutory transgressions. We recognize the thoughtful approach utilized by the district court and the policy reasons which could be cited to support its position. We differ, however, because we believe the statutory plan of enforcement is inconsistent with the district court's expansive interpretation." I believe that the reasoning of the court of appeals decision in Rogers should also control the instant motion. A claim for damages to reputation, like pain and suffering, is not easily susceptible of administrative resolution. Rogers v. Exxon, supra, p. 841. Although the act provides that a court may award "without limitation" relief, including unpaid minimum wages or other compensation, such unparticularized statutory language has not been found sufficient to expand to the extent here sought the types of relief available under the act. Therefore, IT IS ORDERED that the defendant's motion to strike the second claim of the plaintiff's complaint, and the third paragraph of the ad damnum clause relating to such claim, be and hereby is granted.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367587/	432 F. Supp. 668 (1977) Richard D. CURREN, Warren E. Eddy, W. P. Mantz, and Dempsey Keene v. Wilbur FREITAG, Herschel Ward, Roland Bruning, Carl Moore, Clifford Rygh, Gregory Hasty, Ramon Wierman, Thomas Crabtree, Robert Neff, Kenneth Price, Charles E. Moore, Hugh B. Arnold, and Central Laborers Pension Fund. No. 76-0061. United States District Court, S. D. Illinois, S. D. June 10, 1977. 669 Gerald Tockman, St. Louis, Mo., Edward Casey, Springfield, Ill., Jay G. Swardenski, Peoria, Ill., for plaintiffs. Kevin M. Forde, William J. Harte, Chicago, Ill., Robert E. Gillespie, Springfield, Ill., Larry J. Flynn, Jacksonville, Ill., Robert G. Heckenkamp, Springfield, Ill., for defendants. 670 MEMORANDUM AND ORDER ACKERMAN, District Judge. This case involves various charges and countercharges between two factions on the Central Laborers Pension Fund [hereinafter Fund] Board of Trustees. The Fund is a trust established in accordance with the provisions of 29 U.S.C. § 186(c)(5) which, inter alia, requires equal representation by employers and employees in the administration of the Fund. The Fund and its employees are subject to the provisions of the Employee Retirement Income Security Act of 1974 [hereinafter ERISA] 29 U.S.C. §§ 1001 et seq. Plaintiffs, the trustees appointed by the employers, filed this action on May 18, 1976, alleging numerous defects in the structure and operation of the Fund and seeking to hold trustees representing the employees personally liable under ERISA provisions. The complaint survived defendants' motion to dismiss for failure to state a claim on which relief can be granted. Defendants however have filed a two count counterclaim also based on alleged violations of ERISA. The matter is now before me on plaintiffs' motion to dismiss Counts I and II of the counterclaim and on defendants' motion for summary judgment on Count I as well as other motions requiring little discussion and dealt with at the end of this opinion. Count I of the counterclaim purports to state a claim against plaintiff Curren individually alleging that Curren has violated 29 U.S.C. §§ 1106(b)(2) and (3), ERISA § 406(b)(2) and (3), in that plaintiff Curren is actively representing certain contractors who are resisting audits ordered by the Fund and refusing to pay amounts determined owing by these contractors to the pension fund. Count II alleges that all the plaintiff trustees have violated 29 U.S.C. § 1106(b)(2) through the prosecution of this lawsuit, since it allegedly is for the benefit of the employer contractors and not for the benefit of the Fund. Central Laborers Pension Fund is a trust administering more than the $20,000,000 in assets with its principal office in Jacksonville, Illinois. The Fund was established by a trust agreement which required sixteen trustees, eight appointed by the employees' union (Laborers Local Union No. 253) and eight from the employer associations (four appointed by Associated General Contractors of Illinois and four appointed by Morgan County Contractors Association) in accord with 29 U.S.C. § 186(c)(5)(B). Plaintiffs Curren, Eddy, Mantz and Keene were appointed by Associated General Contractors of Illinois (AGCI). Plaintiff Curren is employed by AGCI as Director of Labor Relations. Defendants Freitag, Ward, Bruning, Moore, Rygh, Hasty, Wierman, Dickman and Holland are trustees appointed by Local No. 253, while defendants Crabtree, Neff, Price and Moore were appointed by the Morgan County Contractors Association. Defendants filed a motion for summary judgment on Count I of the counterclaim pursuant to Federal Rule of Civil Procedure 56 contending that the pleadings, documents and deposition of plaintiff Curren establish that there are no genuine issues of material fact and that counterplaintiffs are entitled to judgment as a matter of law. Also pending concerning Count I of the counterclaim is plaintiff's motion to dismiss pursuant to F.R.Civ.P. 12(b) for failure to state a claim upon which relief can be granted. Since I have examined matters outside the pleadings, specifically Curren's deposition, these motions will be treated as cross motions for summary judgment under F.R.Civ.P. 56 as provided in F.R.Civ.P. 12(b). The contention in the counterclaim is that plaintiff Curren, in violation of 29 U.S.C. §§ 1106(b)(2) and (3), is actively representing certain contractors in resisting audit and collection efforts of the Fund and receiving a fee therefor. The statute, dealing with prohibited transactions under ERISA, provides that: (b) A fiduciary with respect to a plan shall not: . . . . . 671 (2) in his individual or in any other capacity act in any transaction involving the plan on behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries, or (3) receive any consideration for his own personal account from any party dealing with such plan in connection with a transaction involving the assets of the plan. 29 U.S.C. § 1106. More specifically, in counterplaintiffs' motion for summary judgment it is contended that contrary to Curren's duty as a trustee of the Fund to take such action as necessary to insure that employers contribute to the Fund that which they are contractually obligated to contribute, counterdefendant Curren actively represented two employers, Coggeshall Construction Company and Burlington Road Builders, in resisting audit and collection procedures brought on behalf of the Fund. Both companies are being sued by the plaintiffs in this Court for allegedly delinquent payments to the Fund. Curren counseled both companies to resist Fund audits and refuse payments since, in his opinion, the audits and subsequent lawsuits were not properly authorized, but were brought merely to apply pressure during labor negotiations pending between Coggeshall and the laborers union. Curren also suggested specific legal counsel to both Coggeshall and Burlington, and held meetings concerning their defense in his office. Further, it is alleged and counterdefendant Curren states in his deposition that he issued a "bulletin" to all AGCI members advising them that Fund auditors were not properly authorized and asking to be contacted by any members of AGCI who had any questions. This conduct was but a portion of a continuing conflict between Curren and the defendant Arnold, a Chicago attorney, who had allegedly been improperly hired by the Fund to pursue collection efforts against individual contractors. It certainly appears that the prime motivating factor in counterdefendant Curren's actions was the belief, as plaintiffs have alleged in their complaint, that not only was Arnold using the Fund and its audit procedures to apply pressure on individual contractors for his own purposes, but that Arnold had not properly been authorized to act on behalf of the Fund at all. Throughout the conduct complained of, Curren acted not only as a trustee for the Fund but pursuant to his duties as Director for Labor Relations for AGCI. Those duties as described in his deposition, consisted of negotiating and administering collective bargaining agreements on behalf of AGCI and its collective and individual members. Counterplaintiff would have me believe that the actions of Curren on behalf of AGCI were "at total war" with his obligations as a trustee for the Fund, and that the state of the law is such that Curren could not perform both as trustee and as Labor Relations Director for AGCI. Admittedly, there may be an inherent conflict between the ERISA fiduciary duty and prohibited transaction provisions [29 U.S.C. §§ 1104 and 1106] and the provisions of the Labor Management Relations Act requiring equal representation by labor and management in the control of employee trust funds [29 U.S.C. § 186(c)(5)]. However, this conflict is lessened by the language in 29 U.S.C. § 1108(c)(3) which provides: (c) Nothing in Section 1106 of this title shall be construed to prohibit any fiduciary from . . . (3) serving as a fiduciary in addition to being an officer, employee, agent or other representative of a party in interest. Given this statutory provision, it is not per se improper for Curren to act both as trustee and as Labor Relations Director for AGCI. Thus, the portion of the counterclaim based on 29 U.S.C. § 1106(b)(3) is unfounded since it is established by the depositions and memoranda filed that Curren received no "consideration for his personal account" other than his AGCI salary. Due to the language of 29 U.S.C. § 1108(c)(3) quoted above, I believe as a 672 matter of law that Curren's AGCI salary cannot form the basis of a complaint under § 1106(b)(3). While the elements of the counterclaim citing 29 U.S.C. § 1106(b)(2) present a somewhat more difficult question, I believe the same result follows. As stated in the previous paragraphs, 29 U.S.C. § 1108(c)(3) establishes that there is nothing improper about Curren acting both as a trustee and as Labor Relations Director for AGCI. A portion of Curren's responsibilities as Labor Relations Director is to advise and counsel AGCI members concerning contract negotiations. Given Curren's beliefs concerning the propriety of the Fund's auditing operation and his beliefs as to the reasons for particular audits, as seen through the allegations of this complaint, he would have been remiss in his duties as Labor Relations Director to stand mute. Since the Act allows him to act in both capacities, it is illogical that it would require him to forgo the giving of advice and assistance he would have been expected to give were he not a trustee. It certainly is not alleged that his actions would be anything but appropriate except for his status as trustee. The question at issue then is whether counseling parties to resist audits and to refuse payment to the Fund, suggesting of specific legal counsel to them, participating in meetings concerning their legal defense and issuing a "bulletin" advising adverse parties of an allegedly improper collection effort, constitutes acting on behalf of an adverse party in any transaction involving the plan within the meaning of 29 U.S.C. § 1106(b)(2). According to the conference committee, the purpose of § 1106(b)(2) is to prevent "a fiduciary from being put in a position where he has dual loyalties, and, therefore, he cannot act exclusively for the benefit of a plan's participants and beneficiaries." U. S. Code Cong. and Admin. News, 1974, pp. 4639, 5089. Clearly, however, certain dual loyalties are permissible as established by the language quoted above from § 1108(c)(3). A broad reading cannot be given to both sections. To effect the broad reading of § 1106(b)(2) sought here by counterplaintiff would require a fiduciary who also serves as an employee of a party in interest as permitted by § 1108(c)(3) to neither inform nor counsel his employer of his opinion of the propriety of actions taken by the fund. In short, such person would require a bifurcated personality. As a fiduciary, the actions of his co-fiduciaries must be known and acted upon but he would be required to remain silent and inactive in his capacity as an employee of a party in interest. This construction appears to me to be unreasonable and unworkable especially in light of the provisions of the Labor Management Relations Act pursuant to which this particular fund was established which requires employees and employers to be equally represented in administering the Fund. 29 U.S.C. § 186(c)(5)(B). A preferable construction, it seems, would prevent the fiduciary from being placed in a position where he was dealing with the Fund on behalf of his employer in a matter concerning the assets of the Fund. "Dealing" in this context should mean that the fiduciary is possessed with the power to compromise the positions of his employer, or the Fund or both. For example, the act should prohibit a fiduciary who was appointed by the contractors' association from being placed in a position which would authorize him to accept on behalf of the Fund, an amount less than the amount due the Fund in settlement of a Fund claim against an individual contractor. On the other hand, the act should not prohibit a fiduciary from counseling the individual contractor that the Fund might accept less than the full amount due in settlement of a Fund claim. In other words the act must be construed to differentiate between advocating a course of action or a solution and having the power to take that course or implement that solution. The facts here do not show Curren possessed of this type of power. Curren's actions consisted of providing his opinion as to *673 the propriety of fund actions, his advice as to the best way to proceed and perhaps seeking out individuals to hear his opinions and advice. Curren's actions, of course, are in a general way adverse to the interests of the beneficiaries, since if followed it would mean at minimum, increased, collection costs for the Fund. However, the actions complained of could best be characterized as giving aid and comfort to an adverse party. Those actions, in my opinion, do not constitute acting in a transaction involving the Fund on behalf of an adverse party within the meaning of 29 U.S.C. § 1106(b)(2). In light of the foregoing, counterdefendant Curren's motion for summary judgment on Count I of the counterclaim will be granted since there are no genuine issues of material fact and since he is entitled to judgment as a matter of law. Count II of the counterclaim names all the plaintiff trustees as counterdefendants and alleges that the bringing of this action in and of itself, violates 29 U.S.C. § 1106(b)(2) since allegedly the plaintiff trustees are acting for the benefit of AGCI employers and against the interests of the Fund. Counterdefendants have moved pursuant to F.R.Civ.P. 12(b) to dismiss this count for failure to state a claim on which relief may be granted. Given the fact that the majority of plaintiffs' complaint has survived defendants' motion to dismiss, defendants' theory on Count II of the counterclaim plainly stated, is that given an improper motivation, § 1106(b)(2) prohibits fiduciaries from asserting colorable claims of breach of fiduciary duty in this or any other forum. Congress, in ERISA section 405(a)(3), 29 U.S.C. § 1105(a)(3), provided that a fiduciary having knowledge of a breach of fiduciary duty by a co-fiduciary may be liable for that breach unless he makes "reasonable efforts under the circumstances to remedy the breach." It seems unlikely that Congress intended a fiduciary to be inhibited in his power to seek to remedy a breach of fiduciary duty, regardless of his ultimate motive. I believe that as a matter of law, a fiduciary who seeks to remedy at least colorable breaches of fiduciary duty by his co-fiduciaries through civil litigation cannot be said to have violated 29 U.S.C. § 1106(b)(2) regardless of this motivation for bringing the action. ERISA does not require a fiduciary to stand mute because calling attention to breaches of fiduciary duty would inure to the benefit of the party in interest who secured his position as a fiduciary. Count II of the counterclaim shall be dismissed for failure to state a claim upon which relief may be granted. As to the other pending motions in this cause, they are dealt with in summary fashion below: (1) Counterplaintiffs' motion for summary judgment on Count I of the counterclaim is denied. (2) Counterdefendants' motion for summary judgment on Count I of the counterclaim is granted. (3) Counterdefendants' motion to dismiss Count II of the counterclaim is granted. (4) Motion of Giffin, Winning, Lindner, Newkirk, Cohen and Bodewes for leave to withdraw as attorneys for plaintiff is allowed. (5) Defendants' motion to amend counterclaim filed December 8, 1976, is allowed. (6) Defendants' motion to amend answer filed February 1, 1977, is allowed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/3943655/	Appellant was convicted of simple assault, and his punishment assessed at a fine of $10. Appellant complains that the information is defective in that it attempts to charge an aggravated assault and, therefore, is insufficient in that it nowhere states the manner in which the instrument charged was used, and that the court misdirected the jury as to the law of aggravated assault. Conceding this was true, appellant was only convicted of a simple assault and fined $10, therefore, appellant cannot complain of same. The court properly charged on simple assault, and the jury properly found appellant guilty under the evidence as disclosed in the record. See McCutcheon v. State, 49 Tex.Crim. Rep., 16 Texas Ct. Rep., 444. Finding no error in the record, the judgment is affirmed. Affirmed. *Page 187	01-03-2023	07-06-2016
https://www.courtlistener.com/api/rest/v3/opinions/3094992/	COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS THE CITY OF EL PASO, TEXAS, Appellant, v. CAPLES LAND COMPANY, LLC AND WILLIAM D. ABRAHAM, Appellees. ' ' ' ' ' ' No. 08-10-00264-CV Appeal from 327th District Court of El Paso County, Texas (TC # 2010-1970) O P I N I O N The City of El Paso, Texas brings this interlocutory appeal from an order denying its plea to the jurisdiction and granting a temporary injunction. For the reasons that follow, we reverse. FACTUAL SUMMARY Caples Land Company, LLC owns a building in El Paso, Texas. On March 31, 2010, the City of El Paso Building and Standards Commission (the Commission) held a hearing and issued an order finding that: (1) the structure is substandard; (2) the structure is not in substantial compliance with municipal ordinances regulating fire protection, structural integrity, and disposal of refuse; (3) the structure can be rehabilitated; and (4) in order to be made safe, certain violations must be corrected. The order required Appellees[1] to take certain actions and make repairs, including the removal of non-permitted and illegal electrical wiring, the repair of non-compliant restrooms, the removal of non-permitted partitions and ceilings, the removal of non-permitted mechanical systems, the removal of all broken window glass, and the removal of all trash and debris. The order provided that if these requirements were not met within sixty days, Athe structures [sic] certificate of occupancy be revoked and that the structure be vacated.@ The order additionally provided that upon the owner=s failure to comply with the order, the City of El Paso may request a hearing before the Building and Standards Commission to determine the amount and duration of civil penalties resulting from the noncompliance. Appellees made repairs they believed to be feasible and on May 24, 2010, Appellees appealed the Commission=s order to the district court pursuant to Section 214.0012 of the Texas Local Government Code. Two months later, Appellees filed an application for an injunction to prevent the Commission from holding a hearing to determine whether the building had been brought into compliance with the March 31, 2010 order. The City filed a plea to the jurisdiction asserting that the district court lacked jurisdiction or authority to enjoin the Commission from holding any hearings pending the appeal. The City additionally challenged the merits of Appellees= request for an injunction. Following a hearing, the district court denied the City=s plea to the jurisdiction and granted Appellees= request for a temporary injunction. The City filed notice of interlocutory appeal pursuant to Sections 51.014(a)(4) and (a)(8) of Civil Practice and Remedies Code. Tex.Civ.Prac.&Rem.Code Ann. 51.014(a)(4), (8)(West 2008)(authorizing interlocutory appeal from an order denying a plea to the jurisdiction by a governmental unit and from an order granting a temporary injunction). APPEAL FROM DENIAL OF PLEA TO THE JURISDICTION The first portion of this opinion will address the City=s interlocutory appeal from the denial of its plea to the jurisdiction. The City raises three issues related to the district court=s ruling on the plea to the jurisdiction. Jurisdiction vs. Authority In its first two issues, the City challenges the district court’s jurisdiction to grant injunctive relief and to hear live witnesses at the hearing on Appellees= application for injunctive relief. In Issue One, the City contends, based on the doctrine of governmental immunity, that the district court lacked jurisdiction to enjoin the Commission from holding any hearings pending the appeal. The Appellees maintain that the issue raised by the City is not one of jurisdiction but of the district court=s authority to grant injunctive relief. Appellees further argue that the district court is authorized to protect its jurisdiction by granting an injunction as authorized by Section 24.011 of the Texas Government Code. In Issue Two, the City asserts that the district court did not have jurisdiction to hear live witnesses in a judicial review proceeding conducted under Section 214.0012 of the Texas Local Government Code. The City alternatively argues that even if the issues are not jurisdictional, the trial court erred by granting injunctive relief because it was not authorized to do so and by relying on live testimony at the hearing. In this portion of the opinion, we will restrict our review to the jurisdictional arguments raised by the City and we will address the City=s alternative non-jurisdictional arguments in our discussion related to Issue Four which relates to the temporary injunction. Standard of Review The purpose of a plea to the jurisdiction is to dismiss a cause of action without regard to whether the claim has merit. Bland Independent School District v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). It is a dilatory plea that challenges the court=s power to adjudicate the subject matter of the controversy. Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004); Bland, 34 S.W.3d at 554; Texas Department of Transportation v. Arzate, 159 S.W.3d 188, 190 (Tex.App.--El Paso 2004, no pet.). Subject matter jurisdiction is essential to the authority of a court to decide a case. Bland, 34 S.W.3d at 553-54. Subject matter jurisdiction cannot be conferred by consent and cannot be waived. Carroll v. Carroll, 304 S.W.3d 366, 367 (Tex. 2010); Continental Coffee Products Co. v. Cazarez, 937 S.W.2d 444, 448 n.2 (Tex. 1996). Whether a party has alleged facts that affirmatively demonstrate a trial court=s subject matter jurisdiction and whether undisputed evidence of jurisdictional facts establishes a trial court=s jurisdiction are questions of law which we review de novo. Texas Department of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004); Texas Natural Resource Conservation Commission v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002). Governmental Immunity Sovereign immunity protects the State from lawsuits for money damages. Reata Construction Corporation v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006). In addition to protecting the State from liability, it also protects the various divisions of state government, including agencies, boards, hospitals, and universities. Wichita Falls State Hospital v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 2003). Governmental immunity, on the other hand, protects political subdivisions of the State, including counties, cities, and school districts. Id. Jurisdiction of a District Court A district court is a court of general jurisdiction. Dubai Petroleum Company v. Kazi, 12 S.W.3d 71, 75 (Tex. 2000). The jurisdiction of a district court consists of exclusive, appellate, and original jurisdiction of all actions, proceedings, and remedies, except in cases where exclusive, appellate, or original jurisdiction may be conferred by the Texas Constitution or other law on some other court, tribunal, or administrative body. Tex.Const. Art. V, ' 8; see Tex.Gov=t Code Ann. ' 24.007 (West 2004)(a district court has the jurisdiction provided by Article V, ' 8). A district court may hear and determine any cause that is cognizable by courts of law or equity and may grant any relief that could be granted by either courts of law or equity. Tex.Gov=t Code Ann. ' 24.008. The instant case involves the district court=s appellate jurisdiction under Section 214.0012 of the Texas Local Government Code. Tex.Local Gov=t Code Ann. ' 214.0012 (West 2008). Judicial Review Under Section 214.0012 The Commission issued its March 31, 2010 order pursuant to its authority under Section 214.001 of the Texas Local Government Code which provides a municipality with authority to regulate substandard buildings. See Tex.Local Gov=t Code Ann. ' 214.001 (West Supp. 2012). A property owner, lienholder, or mortgagee aggrieved by an order of a municipality issued under Section 214.001 may appeal the order by filing a verified petition in district court on the ground of illegality. Tex.Local Gov=t Code Ann. ' 214.0012 (West 2008). After the petition is filed, the district court may issue a writ of certiorari directed to the municipality. Tex.Local Gov=t Code Ann. ' 214.0012(b). The issuance of the writ does not stay proceedings on the decision from which the appeal is taken. Tex.Local Gov=t Code Ann. ' 214.0012(e). Further, appeal in the district court is limited to a hearing under the substantial evidence rule, and the district court may reverse or affirm, in whole or in part, or may modify the decision brought up for review. Tex.Local Gov=t Code Ann. ' 214.0012(f). Section 214.0012 waives a municipality=s governmental immunity from suit provided that the appealing party timely files a petition challenging the decision. See Bates v. City of Beaumont, 241 S.W.3d 924, 928 (Tex.App.--Beaumont 2007, no pet.); Teague v. City of Jacksboro, 190 S.W.3d 813, 819-20 (Tex.App.--Fort Worth 2006, pet. denied). It is undisputed that the district court had appellate jurisdiction of the case pursuant to Section 214.0012 of the Local Government Code because Appellees timely filed their petition for review of the Commission=s March 31, 2010 order. The City nevertheless argues that the district court lacked jurisdiction to grant injunctive relief because it is not authorized to do so by Section 214.0012 of the Local Government Code, by Section 24.011 of the Government Code, or by Section 65.011(2) of the Civil Practice and Remedies Code. There is a difference, however, between a court=s subject matter jurisdiction and its authority to grant a particular type of relief in a case over which it has jurisdiction. Cf. Davis v. State, 956 S.W.2d 555, 558 (Tex.Crim.App. 1997), citing Stine v. State, 908 S.W.2d 429, 434 (Tex.Crim.App. 1995)(Meyers, J., concurring) (drawing distinction between a court=s subject matter jurisdiction and other non-jurisdictional aspects of litigation in which the court=s conduct is controlled by law; stating that when the court=s conduct violates one of these laws, especially a law which seems Amandatory@ on its face, it is common to say that the court did not have authority to act as it did, but it is a mistake to say that the court was without jurisdiction in the matter). Even if the City is correct that the district court was not statutorily authorized to grant injunctive relief in the context of the underlying proceeding, that error did not deprive the district court of jurisdiction and it would not result in the case being dismissed. Similarly, the City=s argument that the district court lacked jurisdiction to hear live witnesses at the hearing is addressed to the district court=s alleged violation of a controlling procedural statute, and does not raise an issue related to its subject matter jurisdiction. Accordingly, we find that neither issue is properly raised by a plea to the jurisdiction. We are aware that an interlocutory appeal generally cannot be taken from the denial of a plea to the jurisdiction that does not raise an issue that can be jurisdictional. Texas Department of Criminal Justice v. Simons, 140 S.W.3d 338, 349 (Tex. 2004). In a case where a party raises such an issue, the correct disposition is to dismiss the interlocutory appeal for lack of jurisdiction. Id. In this case, however, the City has raised in Issue Three an argument which can be jurisdictional. Therefore, we have jurisdiction of the appeal from the order denying the plea to the jurisdiction. See Tex.Civ.Prac.&Rem.Code Ann. § 51.014(a)(4)(West 2008)(authorizing interlocutory appeal from an order denying a plea to the jurisdiction by a governmental unit and from an order granting a temporary injunction). Issues One and Two are overruled. Ripeness In Issue Three, the City argues that the district court did not have jurisdiction to enjoin the Commission from deciding whether it should take future action with respect to the building because the issue is not ripe as the Commission has not made a final determination regarding Appellees= compliance with the March 31, 2010 order. Appellees respond that the legality of the March 31, 2010 order is a ripe controversy between the parties. Ripeness Ais a threshold issue that implicates subject matter jurisdiction . . . [and] emphasizes the need for a concrete injury for a justiciable claim to be presented.@ Robinson v. Parker, 353 S.W.3d 753, 755 (Tex. 2011), quoting Patterson v. Planned Parenthood of Houston & Southeast Texas, Inc., 971 S.W.2d 439, 442 (Tex. 1998). In evaluating ripeness, we consider whether, at the time a lawsuit is filed, the facts are sufficiently developed so that an injury has occurred or is likely to occur, rather than being contingent or remote. Robinson, 353 S.W.3d at 755; Waco Independent School District v. Gibson, 22 S.W.3d 849, 851-52 (Tex. 2000). Although a claim is not required to be ripe at the time of filing, if a party cannot demonstrate a reasonable likelihood that the claim will soon ripen, the case must be dismissed. Robinson, 353 S.W.3d at 755. In the petition for judicial review, Appellees challenged the legality of the March 31, 2010 order. That order found the structure to be substandard and required Appellees to rectify certain problems with the building within sixty days and warned that noncompliance would result in the property=s certificate of occupancy being revoked. Revocation of the certificate of occupancy would require the four business tenants in the building to vacate and Abraham believed he would be subjected to suits by the tenants for breach of the leases. By their appeal, Appellees challenged the legality of this order. The dispute between the parties is ripe for review and the district court has subject matter jurisdiction. Even if the district court erred by granting the temporary injunction in the context of the appellate proceeding below, that error would not deprive the court of subject matter jurisdiction. Issue Three is overruled. APPEAL FROM GRANTING OF TEMPORARY INJUNCTION In Issue Four, the City contends the district court abused its discretion by granting injunctive relief because Appellees failed to prove any of the temporary injunction elements, including a probable right to relief and a probable and imminent injury. We will also consider the City=s arguments that the district court lacked authority to grant injunctive relief and it erred by hearing testimony at the hearing. Statutory Authority to Grant Injunctive Relief -- Section 214.0012 We begin by considering the district court=s statutory authority to grant injunctive relief in this case. The City first argues that Section 214.0012 does not authorize the district court to grant injunctive relief. Section 214.0012 provides in relevant part that: (b) On the filing of the petition, the court may issue a writ of certiorari directed to the municipality . . . * * * (e) The issuance of the writ does not stay proceedings on the decision appealed from. Tex.Local Gov=t Code Ann. ' 214.0012(b), (e). The City maintains that the plain language of the statute--that an appeal does not stay proceedings--reflects the Legislature=s intent to enable a building and standards commission to hold hearings while an appeal is proceeding. In support of its position, the City compares Section 214.0012 with Section 211.011 which provides for judicial review of a board of adjustment=s decision. See Tex.Local Gov=t Code Ann. ' 211.011. Section 211.011 provides in relevant part that: (c) On the presentation of the petition, the court may grant a writ of certiorari directed to the board to review the board=s decision. . . . Granting of the writ does not stay the proceedings on the decision under appeal, but on application and after notice to the board the court may grant a restraining order if due cause is shown. The City contends that the absence of similar language in Section 214.0012 indicates the Legislature=s intent to not permit injunctive relief in appeals under that statute. Appellees, on the other hand, argue that even though Section 214.0012 does not expressly authorize injunctive relief, the Legislature did not prohibit injunctive relief based on other statutory authority. The parties= respective arguments present a question of statutory construction, which we review de novo. McIntyre v. Ramirez, 109 S.W.3d 741, 745 (Tex. 2003); Emeritus Corporation v. Blanco, 355 S.W.3d 270 (Tex.App.--El Paso 2011, no pet. h.). Our primary objective in construing any statute is to determine the Legislature=s intent in enacting the particular provision, and to give that provision its intended effect. Ramirez, 109 S.W.3d at 745; Emeritus, 355 S.W.3d at 276. We must interpret the statute according to the plain meaning of the language used, and must read the statute as a whole without giving effect to certain provisions at the expense of others. City of San Antonio v. City of Boerne, 111 S.W.3d 22, 25 (Tex. 2003); Emeritus, 355 S.W.3d at 276. Each word, phrase, or expression must be read as if it were deliberately chosen, and we will presume that words excluded from a provision were excluded purposefully. Emeritus, 355 S.W.3d at 276; Gables Realty Ltd. Partnership v. Travis Central Appraisal District, 81 S.W.3d 869, 873 (Tex.App.--Austin 2002, pet. denied). Our analysis of the statutory text is also informed by the presumptions that Athe entire statute is intended to be effective@ and that Aa just and reasonable result is intended.” In re S.S.A., 319 S.W.3d 796, 799 (Tex.App.--El Paso 2010, no pet.), quoting Tex.Gov=t Code Ann. ' 311.021(2) & (3)(West 2005). We may also consider Athe object sought to be attained,@ Acircumstances under which the statute was enacted,@ legislative history, and Aconsequences of a particular construction.@ Id., quoting Tex.Gov=t Code Ann. ' 311.023(1), (2), (3), (5). After comparing Sections 211.011 and 214.0012, we conclude that the Legislature did not intend for a party seeking judicial review under Section 214.0012 to be able to obtain a restraining order on a showing of due cause. This construction is reasonable given that the orders being appealed under Section 214.0012 relate to substandard and dangerous structures. That does not necessarily mean, however, that the Legislature intended to foreclose all injunctive relief. The Legislature enacted Section 214.0012 with knowledge of the district court=s authority to grant injunctive relief pursuant to Section 24.011 of the Government Code and Section 65.011(2) of the Civil Practice and Remedies Code yet it did not expressly prohibit all injunctive relief. Section 24.011 We turn now to the issue whether the trial court had authority to grant injunctive relief under Section 24.011 of the Government Code. Article V, '8 of the Texas Constitution provides that a district court has the power to issue writs necessary to enforce its jurisdiction. Tex.Const. Art. V, ' 8. Likewise, the Government Code authorizes a district court to issue all writs, including injunction, necessary to the enforcement of its jurisdiction. Tex.Gov=t Code Ann. ' 24.011 (West 2004). The City argues that injunctive relief under Section 24.011 is not available when a district court is exercising appellate jurisdiction pursuant to Section 214.0012 because the district court=s jurisdiction over the matter is not exclusive but rather is shared with the Commission by virtue of Section 214.0012(e). Citing Teague v. City of Jacksboro, 190 S.W.3d 813 (Tex.App.--Fort Worth 2006, pet. denied) and two other cases, Appellees respond that Section 24.011 provided the district court with authority to protect its jurisdiction from interference by the Commission. In Teague, the Jacksboro city council approved an order requiring Teague to demolish a structure located on his property if he did not abate unhealthy and unsafe conditions on the property within thirty days. Teague, 190 S.W.3d at 815. Teague did not comply with the order but instead filed suit in district court seeking a declaratory judgment and injunctive relief. Id. The district court entered a TRO and scheduled a hearing. Id. The city filed a plea to the jurisdiction alleging that its governmental immunity had not been waived because Teague had failed to file a verified petition requesting the issuance of a writ of certiorari within thirty days after receiving a copy of the demolition order as required by Section 214.0012. Id. Teague subsequently filed amended pleadings which included a request for a writ of certiorari. Id. The district court granted the city=s plea to the jurisdiction and dismissed the case. Focusing on the substance of Teague=s original petition, the Fort Worth Court of Appeals found the petition sufficient to invoke the district court=s appellate jurisdiction under Section 214.0012. Id. at 818-19. The court additionally determined that a specific request for issuance of a writ of certiorari is not necessary to invoke the district court=s jurisdiction. Id. at 819. Because Teague does not address whether Section 24.011 would authorize a district court to grant injunctive relief, we find it is inapplicable to the issue before us. In Bates v. City of Beaumont, 241 S.W.3d 924 (Tex.App.--Beaumont 2007, no pet.), the city of Beaumont notified Bates by certified mail that it intended to hold a ADilapidated Structure Public Hearing@ during a city council meeting. Id. at 925. The letter informed Bates he could attend the hearing to show cause as to why the building should not be demolished. Id. Following the hearing, the city promulgated an ordinance declaring that Bates= property was a public nuisance and ordering Bates to demolish the building within ten days or execute a work program, or the building would be demolished without further notice. Id. at 926. Bates began repairs on the property, but the city found the repairs insufficient when it reinspected the structure, and it sent Bates notice of its intent to proceed with demolition. Id. at 929. Bates then filed suit against the city seeking to enjoin the city from demolishing the structure. Id. at 925. The City responded by filing a plea to the jurisdiction, in which it asserted that the trial court lacked jurisdiction of the case because Bates did not file suit within thirty days of the date the City sent him notice of the city council=s decision to demolish the property. The district court granted the plea to the jurisdiction and dismissed the suit. The Beaumont Court of Appeals determined that Bates timely filed the suit within Section 214.0012=s thirty-day period after receiving the notice informing him that the city would proceed with demolition. Id. at 928-29. The parties apparently did not raise, and the court of appeals did not address, whether Section 24.011 authorized the district court to grant injunctive relief in order to protect its own jurisdiction. Like Teague, Bates is distinguishable from the case before us. Finally, Appellees assert that In re Teague, 2006 WL 302123 (Tex.App.--Fort Worth 2006, orig. proceeding) indirectly supports their position that the district court had authority to grant injunctive relief. While the appeal in Teague v. City of Jacksboro was pending, the city informed Teague that demolition would take place within days. In re Teague, 2006 WL 302123. Teague filed a motion for emergency and injunctive relief in the court of appeals. The court of appeals enjoined the city from proceeding with the demolition while the appeal was pending because demolition of the structure would render the appeal moot. In re Teague, 2006 WL 302123 at *2. A court of appeals is authorized to issue writs necessary to protect its jurisdiction. Tex. Const. art. V, ' 6; Tex.Gov=t Code Ann. ' 22.221. In re Teague is distinguishable because the Fort Worth Court of Appeals, unlike the district court in our case, had exclusive appellate jurisdiction. See Texas Capital Bank-Westwood v. Johnson, 864 S.W.2d 186, 189 (Tex.App.--Texarkana 1993, no pet.)(where trial court=s plenary power had expired but the trial court had scheduled a hearing to reconsider its prior ruling, the court of appeals had exclusive jurisdiction of the case and it was authorized to issue writ of prohibition to protect its jurisdiction from the trial court=s intrusion). Given that the district court did not have exclusive jurisdiction of the matter before it, we conclude that Section 24.011 did not authorize the district court to enjoin the Commission from holding further hearings related to the property. Section 65.011(2) In their application for injunctive relief, Appellees expressly relied on Section 65.011(2) of the Civil Practice and Remedies Code. It provides that a writ of injunction may be granted if a party performs or is about to perform or is procuring or allowing the performance of an act relating to the subject of pending litigation, in violation of the rights of the applicant, and the act would tend to render the judgment in that litigation ineffectual. Tex.Civ.Prac.&Rem.Code Ann. ' 65.011(2)(West 2008). Citing Wolf v. Young, 275 S.W.2d 741 (Tex.Civ.App.--San Antonio 1955, no writ) and EMW Manufacturing Company v. Lemons, 724 S.W.2d 425 (Tex.App.--Fort Worth 1987, no writ), the City argues that this type of injunctive relief is not available to a district court exercising its appellate jurisdiction. Neither case supports the City=s argument. In Wolf v. Young, Wolf and several other property owners were the appellants in an appeal pending before the San Antonio Court of Appeals. In that appeal, they challenged the validity of an ordinance annexing territory owned by the property owners. The property owners filed a motion seeking injunctive relief but the court of appeals treated it as an original proceeding. The property owners requested that the court of appeals enjoin the City of Corpus Christi during the pendency of the appeal from exercising jurisdiction over the relators= real property located within territory which the city sought to annex. Wolf, 275 S.W.2d at 742. The property owners asserted that the city, unless restrained, would extend its powers of municipal government over the territory in dispute and attempt to collect taxes and enforce zoning ordinances which would result in serious inconvenience and damage because they would be required to dispose of their livestock and poultry, among other things. The court of appeals denied the relief because its original jurisdiction to issue a writ is limited to preserving the jurisdiction of the court. Wolf, 275 S.W.2d at 743. It did not have original jurisdiction to issue a writ of injunction to prevent damage to a litigant pending appeal. Wolf, 275 S.W.2d at 743. Wolf does not hold, as the City suggests, that a district court is not authorized to grant injunctive relief pursuant to Section 65.011(2) when it is exercising its appellate jurisdiction. Wolf is concerned with the original jurisdiction of a court of appeals to issue writs of injunction. Its holding cannot be applied to a district court because a district court=s original jurisdiction differs from that of a court of appeals. In EMW Manufacturing v. Lemons, EMW brought an original proceeding in the court of appeals seeking a temporary injunction to stop the execution of a default judgment while an appeal from the denial of its petition for bill of review remained pending in the court of appeals. EMW Manufacturing, 724 S.W.2d 425-26. The court of appeals acknowledged that it did not have the power to issue a writ of injunction merely to preserve the status quo pending appeal nor did it have the power to grant a temporary injunction to prevent damage to an appellant. Id. at 426-27. EMW Manufacturing, like Wolf, is concerned with the original jurisdiction of a court of appeals and its holding is inapplicable to the issues presented by this appeal. We conclude that a district court exercising its appellate jurisdiction pursuant to Section 214.0012 does have authority to grant injunctive relief under Section 65.011(2). Abuse of Discretion We will now address whether the district court abused its discretion by enjoining the Commission from holding any hearings during the pendency of the judicial review proceeding. A temporary injunction is an extraordinary remedy and does not issue as a matter of right. Butnaru v. Ford Motor Company, 84 S.W.3d 198, 204 (Tex. 2002). Whether to grant or deny a temporary injunction is within the trial court=s sound discretion. Id. A reviewing court should reverse an order granting injunctive relief only if the trial court abused that discretion. Id. The reviewing court must not substitute its judgment for the trial court=s judgment unless the trial court=s action was so arbitrary that it exceeded the bounds of reasonable discretion. Id. Generally, to be entitled to a temporary injunction, an applicant must prove three elements: (1) a cause of action against the adverse party; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim. Butnaru, 84 S.W.3d at 204. Section 65.011(2) provides that a writ of injunction may be granted if a party performs or is about to perform or is procuring or allowing the performance of an act relating to the subject of pending litigation, in violation of the rights of the applicant, and the act would tend to render the judgment in that litigation ineffectual. Tex.Civ.Prac.&Rem.Code Ann. ' 65.011(2). Appellees contend that they were not required to prove any of the three traditional summary judgment elements because they sought statutory injunctive relief. The Supreme Court held in Town of Palm Valley v. Johnson, 87 S.W.3d 110, 111 (Tex. 2001) that Section 65.011, which sets forth grounds for temporary injunction, does not permit injunctive relief without the showing of irreparable harm otherwise required by equity. We conclude that Appellees were required to establish both a probable right to recover and irreparable injury in addition to the showing required by Section 65.011(2). An applicant for a temporary injunction need not show that it will prevail at trial in order to establish the probable right of recovery element. See Butnaru, 84 S.W.3d at 211. Instead, the applicant must plead a cause of action and present some evidence that tends to sustain it. Camp v. Shannon, 348 S.W.2d 517, 519 (Tex. 1961); T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc., 965 S.W.2d 18, 23-24 (Tex.App.--Houston [1st Dist.] 1998, pet. dism=d). The case heard by the district court does not involve a Acause of action@ or Atrial@ but rather concerns a judicial review appeal. Keeping that distinction in mind, the district court was required to determine whether Appellees had filed a verified petition challenging the March 31, 2010 order on the ground of illegality. That would satisfy the requirement of pleading a Acause of action.@ Appellees’ petition meets this requirement. The next part of the inquiry is whether Appellees presented some evidence that tends to sustain it. Appellees presented live testimony at the hearing in support of their request for injunctive relief but that evidence is irrelevant to the probable right of recovery element since an appeal in the district court is limited to a hearing under the substantial evidence rule. Tex.Local Gov=t Code Ann. ' 214.0012(f). Given that Appellees failed to request the issuance of a writ of certiorari, the district court would have no record to review and Appellees could not prevail in their appeal. See Teague, 190 S.W.3d at 820; Nussbaum v. City of Dallas, 948 S.W.2d 305, 308 (Tex.App.--Dallas 1996, no writ). Consequently, we find that Appellees failed to present any evidence, i.e., the administrative record, supporting its allegations regarding the illegality of the March 31, 2010 order. For this reason, the district court abused its discretion by granting injunctive relief.[2] The City also maintains that the district court abused its discretion by granting injunctive relief pursuant to Section 65.011(2) because the Commission=s decision to hold a hearing related to the property was not in violation of Appellees= rights. Given that the appeal did not stay the proceedings related to the property, the Commission did not violate Appellees= rights by setting the matter for a hearing during the pendency of the appeal. Furthermore, Appellees did not establish that the Commission=s action in holding a hearing would tend to render the appeal ineffectual. Even if the Commission determined after the hearing that Appellees had not complied with the March 31, 2010 order, the district court could still determine whether that order is illegal provided Appellees requested the issuance of a writ of certiorari. Consequently, we conclude that the district court abused its discretion by enjoining the Commission from conducting any hearings during the pendency of the judicial review appeal. It is therefore unnecessary to address the City=s remaining arguments, including those related to Appellees= asserted failure to prove a probable, imminent, and irreparable injury for which there is no adequate remedy at law. Issue Four is sustained. We reverse the order granting the temporary injunction and remand the cause for further proceedings consistent with this opinion. January 23, 2013 _______________________________________________ ANN CRAWFORD McCLURE, Chief Justice Before McClure, C.J., Rivera, and Antcliff, JJ. Antcliff, J., not participating [1] According to the Commission=s order, Appellee William D. Abraham, appeared at the hearing as a representative of Caples Land Company. [2] Our opinion should not be read as holding that the district court erred by permitting all testimonial evidence at the hearing on the application for a temporary injunction. The administrative record would likely not show the existence of irreparable harm.	01-03-2023	10-16-2015
https://www.courtlistener.com/api/rest/v3/opinions/2265674/	163 Cal. App. 4th 4 (2008) GEORGE SANTILLAN et al., Plaintiffs and Appellants, v. ROMAN CATHOLIC BISHOP OF FRESNO, Defendant and Respondent. No. B194219. Court of Appeals of California, Second District, Division Eight. May 21, 2008. 6 Arkin & Glovsky, Sharon J. Arkin; Kiesel, Boucher & Larson, Raymond P. Boucher, Patrick DeBlase, Anthony M. DeMarco; The Drivon Law Firm, Lawrence Drivon and David Drivon for Plaintiffs and Appellants. Stammer, McKnight, Barnum & Bailey, Carey H. Johnson and Aimee E. Rainwater for Defendant and Respondent. OPINION RUBIN, J. Plaintiffs George and Howard Santillan appeal from the summary judgment entered for defendant Roman Catholic Bishop of Fresno in this action based on allegations of childhood sexual abuse by one of defendant's former clerics. Because triable issues of fact exist concerning whether defendant had the requisite notice that the offending cleric posed a risk of committing such acts (Code Civ. Proc., § 340.1, subds. (b), (c)), we reverse the trial court's determination that the complaint was barred by the statute of limitations. FACTS AND PROCEDURAL HISTORY Brothers George and Howard Santillan allege that from 1959 through 1973, they were the victims of childhood sexual abuse by Monsignor Anthony Herdegen, the resident cleric at their hometown Catholic parish in 7 Wasco, California.[1] That parish was operated by the predecessor of Roman Catholic Bishop of Fresno, a corporation sole (the Diocese). Appellants sued the Diocese in 2003 under the one-year revival provision for previously time-barred claims against entities such as the Diocese that allegedly failed to protect children from an employee's unlawful sexual conduct when they had notice of such behavior. (Code Civ. Proc., § 340.1, subds. (b), (c).)[2] The Diocese brought a summary judgment motion on the ground that the action did not qualify for the one-year revival period and was therefore barred by the statute of limitations because there was no evidence that the Diocese had notice beforehand of any unlawful sexual conduct by Herdegen. The evidence was undisputed that appellants never told anyone, even each other, about the abuse until many years later. The first person George told about the abuse was his psychiatrist in 1983. Howard first told his parents about the alleged abuse in 1987. During the years when the abuse occurred, each appellant followed Herdegen's instructions to conceal their activities. The parties agree on appeal, as they did below, that the only possible evidence of notice rested on deposition testimony that Herdegen's part-time parish housekeeper knew or should have known that Herdegen was sexually abusing appellants. That housekeeper was Barbara Zeilman, who died some years before this action was filed. Zeilman was an elderly woman who came six days a week to clean up Herdegen's living quarters in the parish rectory. She was hired by Herdegen and paid with parish funds, but those funds ultimately belonged to the Diocese. According to appellants, most of the abuse occurred in 8 Herdegen's bedroom. Although that part of the rectory was ordinarily off-limits to anyone but Herdegen, Zeilman let appellants in and knew they were often alone with Herdegen behind his closed bedroom door. Appellants' mother claimed that when she first learned of the abuse in 1987, she confronted Zeilman about it. According to the mother, she asked Zeilman, "Why didn't you tell me? Because I know you knew." Instead of denying or otherwise responding to that accusation, however, Zeilman just cried. Mother operated a beauty shop and did Zeilman's hair, even after that initial confrontation. According to the mother, she and Zeilman conversed during those sessions, and even though Zeilman never said that she recalled what had happened, she did say "I'm sorry, I'm sorry, I'm sorry." Cardinal Roger Mahony served in various high-level administrative positions at the Diocese from 1962 to 1980. At his deposition, Mahony testified that in 1985 and before, a parish priest's practice of taking a child to his bedroom and closing the door "could be grounds for . . . suspicion" of sexual misconduct. Mahony was then asked to assume that Zeilman was aware that unsupervised and unchaperoned children were in Herdegen's bedroom for any length of time. Based on that assumption, Mahony was asked whether he "would . . . have expected the housekeeper to have made some effort to report to a higher level official?" Mahony replied, "Well, if there was [a] well-founded suspicion of some problem, I would expect she would have told somebody."[3] The trial court concluded that Zeilman's tearful but otherwise silent response to the accusation by appellants' mother that Zeilman knew about the abuse, and her later statements that she was "sorry," raised a triable issue of fact that Zeilman in fact knew what Herdegen had done to appellants. However, because Zeilman was a low-level employee, the court ruled that absent evidence her job duties expressly included reporting her knowledge to Diocese officials, notice to the Diocese could not be inferred. The trial court found that Mahony's ambiguous testimony about his expectation that Zeilman would have reported what she knew "to somebody" did not raise an inference that making such a report was in fact an express part of her job duties. Because there was no evidence that Zeilman had ever reported her presumed suspicions to the Diocese, the trial court found there were no triable issues to show the Diocese was ever on notice beforehand that Heredegen was 9 committing unlawful sexual conduct. Judgment for the Diocese was later entered, and appellants contend the trial court erred by granting summary judgment.[4] STANDARD OF REVIEW Summary judgment is granted when a moving party establishes the right to the entry of judgment as a matter of law. (§ 437c, subd. (c).) In reviewing an order granting summary judgment, we must assume the role of the trial court and redetermine the merits of the motion. In doing so, we must strictly scrutinize the moving party's papers. The declarations of the party opposing summary judgment, however, are liberally construed to determine the existence of triable issues of fact. All doubts as to whether any material, triable issues of fact exist are to be resolved in favor of the party opposing summary judgment. While the appellate court must review a summary judgment motion by the same standards as the trial court, it must independently determine as a matter of law the construction and effect of the facts presented. (Barber v. Marina Sailing, Inc. (1995) 36 Cal. App. 4th 558, 562 [42 Cal. Rptr. 2d 697].) A defendant moving for summary judgment meets its burden of showing that there is no merit to a cause of action if that party has shown that one or more elements of the cause of action cannot be established or that there is a complete defense to that cause of action. (§ 437c, subds. (o)(2), (p)(2).) If the defendant does so, the burden shifts back to the plaintiff to show that a triable issue of fact exists as to that cause of action or defense. In doing so, the plaintiff cannot rely on the mere allegations or denial of his pleadings, "but, instead, shall set forth the specific facts showing that a triable issue of material fact exists . . . ." (§ 437c, subd. (p)(2).) A triable issue of material fact exists "if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. [Fn. omitted.]" (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850 [107 Cal. Rptr. 2d 841, 24 P.3d 493].) DISCUSSION (1) Section 340.1 requires that actions for childhood sexual abuse against a nonperpetrator who was a legal cause of the abuse (e.g., an employer of the 10 abuser) be brought before the victim's 26th birthday unless the defendant "knew or had reason to know, or was otherwise on notice, of any unlawful sexual conduct by an employee, volunteer, representative, or agent, and failed to take reasonable steps, and to implement reasonable safeguards, to avoid acts of unlawful sexual conduct in the future by that person . . . ." (§ 340.1, subd. (b)(2).)[5] Any such claims that were previously time-barred were revived for a one-year period during the year 2003. (§ 340.1, subd. (c).) As noted, the only issue on appeal is whether appellants qualified under the 2003 revival provision on the theory they had raised triable issues of fact that the Diocese was on notice of Herdegen's unlawful sexual conduct as required by subdivision (b)(2). In Doe v. City of Los Angeles (2007) 42 Cal. 4th 531 [67 Cal. Rptr. 3d 330, 169 P.3d 559] (Doe), the Supreme Court explained that subdivision (b)(2) can be satisfied by at least two types of noticeactual or constructive. The plaintiffs in Doe sued the City of Los Angeles after their 26th birthdays, claiming they had been sexually abused by a Los Angeles police officer while they took part in the Boy Scouts of America's Police Explorer program.[6] The trial court sustained without leave to amend a demurrer to the complaint on the ground that plaintiffs failed to plead facts showing the requisite notice under subdivision (b)(2), rulings that were affirmed by both the Court of Appeal and the Doe court. According to the Doe court, when subdivision (b)(2) mentions that a defendant "knew" about the perpetrator's past unlawful sexual conduct, the Legislature was referring to actual knowledge, while the phrase "had reason to know" refers to constructive knowledge. (See Doe, at pp. 546, 549.) Constructive notice under subdivision (b)(2) requires proof that the defendant was in possession of certain facts from which a person of average intelligence or of the defendant's superior intelligence, would have inferred the existence of the ultimate fact at issue or regarded its existence as so highly probable that he would have acted as if it did exist. (Doe, at p. 547.) (2) This case calls into play another species of notice, however: where an agent's knowledge of certain facts is imputed to the principal for purposes of establishing the principal's notice of those facts. Civil Code section 2332 provides that, "[a]s against a principal, both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other." So long as the agent was under a duty to disclose certain information, the 11 principal is bound by the agent's knowledge of that information whether or not the agent communicated it to the principal. (Sands v. Eagle Oil & Refining Co. (1948) 83 Cal. App. 2d 312, 319 [188 P.2d 782]; Shapiro v. Equitable Life Assur. Soc. (1946) 76 Cal. App. 2d 75, 86-87 [172 P.2d 725].) For this purpose, there is no difference between constructive and actual notice. (Shapiro, supra, at p. 87.)[7] The rule applies to employees, who are agents of their employer. (Foley v. Interactive Data Corp. (1988) 47 Cal. 3d 654, 669 [254 Cal. Rptr. 211, 765 P.2d 373].)[8] It has also been used to determine that an agent's knowledge of certain facts will be imputed to a principal when determining when a statute of limitations begins to run. (Display Research Laboratories v. Telegen Corp. (N.D.Cal. 2001) 133 F. Supp. 2d 1170, 1176-1177 [applying Civ. Code § 2332, held that corporate plaintiff's state law misappropriation of trade secrets claim was not barred by the statute of limitations because corporate agent's knowledge of plan to misappropriate was not sufficient notice where limitations period begins to run upon notice of an actual misappropriation]; Capron v. State of California (1966) 247 Cal. App. 2d 212, 231-232 [55 Cal. Rptr. 330] [plaintiffs' action for fraudulently induced settlement of eminent domain dispute was barred by limitations period because plaintiffs' agent discovered the alleged fraud years before the fraud action was filed, knowledge that was imputed to plaintiffs].) (3) These principles require us to conduct the following two-step inquirywhether triable issues of fact exist that Zeilman knew Herdegen was sexually abusing appellants at the time and, if so, whether her agency with the Diocese imposed a duty to report that knowledge to the Diocese. We agree with the trial court that triable issues of fact were raised concerning Zeilman's contemporaneous knowledge of the alleged abuse. According to appellants, Zeilman knew that they were often alone with Herdegen in his bedroom while the door was shut, conduct that Mahony testified could be grounds for suspecting sexual misconduct. Years later, when appellants' mother accused Zeilman of having known about the abuse, Zeilman did not deny the charge and simply cried in response. When Zeilman spoke with the mother after that confrontation, she said she was sorry. While not a clear 12 admission of knowledge, Zeilman's conduct and statements do raise an inference that she in fact knew about the alleged abuse while it was ongoing. The evidence concerning whether Zeilman's employment included a duty to report such misconduct is not so clear. The only such evidence came from Mahony, who testified that he would have expected Zeilman to tell "somebody" if she had any well-founded suspicions of sexual misconduct. This testimony does not expressly identify Zeilman's job duties. For instance, Mahony's "expectation" could be something far different from and far less than an express duty of Zeilman's employment, and his belief that she would report her knowledge to "somebody" does not necessarily mean officials of the Diocese. We therefore agree with the trial court that Mahony's testimony was ambiguous. However, we disagree that the ambiguities justified summary judgment. In fact, as appellants point out, evidentiary doubts or ambiguities are ordinarily resolved in favor of the party opposing summary judgment. (Baptist v. Robinson (2006) 143 Cal. App. 4th 151, 159 [49 Cal. Rptr. 3d 153].) Mahony was asked whether he would have expected Zeilman to report any suspicions to a "higher level official." Seen in that light, his response that he would have expected her to tell "somebody" could be taken as a reference to somebody who was a higher level official of the Diocese. As for his expectation that Zeilman would report any suspicions of sexual abuse to such a person, it is important to note that Mahony held various high level positions at the Diocese while much of the alleged abuse occurred. Viewed in that light, an inference could be drawn that his expectation was based on his knowledge of the duties of parish employees such as Zeilman.[9] We therefore hold that the trial court erred by granting summary judgment for the Diocese.[10] 13 DISPOSITION For the reasons set forth above, the judgment is reversed. Appellants shall recover their costs on appeal. Flier, J., concurred. COOPER, P. J.,Dissenting. I respectfully dissent. The majority states and I agree that the ultimate "issue on appeal is whether appellants qualified under the 2003 revival provision on the theory they had raised triable issues of fact that the Diocese was on notice of Herdegen's unlawful sexual conduct as required by [Code of Civil Procedure section 340.1,] subdivision (b)(2)." (Maj. opn., ante, at p. 10.) The parties agreed that "the only possible evidence of notice rested on deposition testimony that Herdegen's part-time parish housekeeper knew or should have known that Herdegen was sexually abusing appellants." (Maj. opn., ante, at p. 7.) The majority concludes that the trial judge erred in granting the summary judgment motion because, under an agency theory, if the agent (Zeilman) was under a duty to disclose certain information, the principal (the Diocese) is bound by the agent's knowledge of that information whether or not the agent communicated it to the principal. (Civ. Code § 2332.) I dissent because I do not believe the evidence raises a triable issue of fact on the notice requirement. Appellant strives to establish the notice element first via proof that the part-time housekeeper either suspected Herdegen of sexual abuse or had knowledge of alleged abuse and had a duty to pass that information on to her employer, the Diocese. Although the evidence is relatively weak and circumstantial, I agree there are triable issues of fact about Zeilman's contemporaneous knowledge of the alleged abuse. The evidence of her behavior, when confronted with questions about her knowledge, is sufficient to raise this issue. However, there is not sufficient evidence to raise a triable issue of fact that Zeilman had a duty to pass on her knowledge or suspicions to the Diocese. The majority opinion identifies the evidence suggesting that Zeilman's employment included a duty to report such misconduct as testimony from Cardinal Mahony that "he would have expected Zeilman to tell `somebody' if she had any well-founded suspicions of sexual misconduct." (Maj. opn., ante, at p. 12.) The majority agrees with the trial court's conclusion that this 14 evidence was ambiguous. Nevertheless, because "Mahony held various high level positions at the Diocese while much of the alleged abuse occurred," the majority concludes that "an inference could be drawn that his expectation was based on his knowledge of the duties of parish employees such as Zeilman." (Ibid.) I do not agree with this evaluation of the evidence. Mahony's testimony is neither sufficient to support such an inference, nor is it ambiguous enough to create a triable issue of fact about the existence of such a duty. Mahony's testimony that he would have "expected" Zeilman to report suspect behavior does not support an inference that she had a duty as a Diocese employee to make such a report. Mahony's personal expectation is irrelevant unless it arose from his knowledge of the employee's actual duty to report the abuse. There is no direct evidence, disputed or otherwise, of the existence of such a duty. During his deposition, Mahony could have easily been asked directly, "does Zeilman (or any similarly situated employee) have a duty, as a condition of their employment, to report incidents of suspected or known child sexual or physical abuse." The referenced testimony by Mahony is the only evidence even marginally suggestive of notice identified in this case. It is inadequate to raise a triable issue of material fact regarding the knowledge of the Diocese. In order to reach the agent/principal notice conclusion suggested by the majority, a complicated multistep analysis is required. We begin with the evidence regarding the housekeeper's behavior when asked about the suspected abuse. Next, we infer from her reaction that she had actual knowledge or a suspicion of abuse. Then we have evidence from Mahony that he would "expect" Zeilman to report any suspicions. Mahony's testimony is then offered to support the indispensable inference that his expectation was based his knowledge of the employee's actual duty to report such activity. This inferential analysis is the only method offered to identify a triable issue of fact whether the Diocese had notice. Although, I would hope that in our society any person of good conscience would report suspicions of child abuse, I do not believe that the evidence available in this case is adequate to support an inference that such reporting occurred. Regarding the reasonableness of the inferences which are critical to the majority position, it is noteworthy that in 1963, the State of California found it necessary to enact penal provisions mandating the reporting of child abuse.[1] Contemporaneous records indicate that it was the reluctance of physicians to report child abuse, despite strong circumstantial evidence of abuse, that was the impetus for the legislation to establish mandated reporting 15 laws.[2] However, even given the risk of sanctions, the California Department of Justice estimated in November 1978 that only about 10 percent of all cases of child abuse were being reported. (Krikorian v. Barry (1987) 196 Cal. App. 3d 1211, 1216-1217 [242 Cal. Rptr. 312]; Stecks v. Young (1995) 38 Cal. App. 4th 365 [45 Cal. Rptr. 2d 475].) Even though these initial reporting requirements were in place, in 1980 the California Legislature was compelled to enact the Child Abuse Reporting Law (Pen. Code § 11165 et. seq.), "a comprehensive scheme of reporting requirements `aimed at increasing the likelihood that child abuse victims are identified.'" (Stecks, at p. 371.) Subsequently, the Legislature renamed the law the Child Abuse and Neglect Reporting Act. (Pen. Code § 11164.) (Stats. 1987, ch. 1444, § 1.5, p. 5369.) "These statutes, all of which reflect the state's compelling interest in preventing child abuse, are premised on the belief that reporting suspected abuse is fundamental to protecting children." (Stecks, at p. 371.) Given the fact that the State of California found it necessary to impose criminal sanctions for failure to report suspected abuse by professionals in fields where the moral imperative to protect children was already extant within the obligations of the profession, I find it difficult to rely on the slender thread of Mahony's "expectation" that a part-time housekeeper would report suspected abuse to provide the factual foundation to proceed with this litigation. NOTES [1] For ease of identification, we will refer to George and Howard Santillan separately by their first names and collectively as appellants. [2] Appellants' first amended complaint contained causes of action for negligent hiring, supervision or retention of Herdegen, breach of fiduciary duty, intentional infliction of emotional distress, vicarious liability, and successor liability. The parties agree that despite the names given to appellants' causes of action, each rises or falls on whether appellants raised triable issues of fact that they qualified for the revived limitations period of Code of Civil Procedure section 340.1. All further undesignated section references are to the Code of Civil Procedure. When we mention subdivisions (b) and (c), we are referring to section 340.1. The action was originally filed in Sonoma County but was later coordinated in Alameda County with the many other such actions brought in Northern California. The complaint is one of many from throughout the state against various entities and individuals affiliated with the Catholic Church for childhood sexual abuse. Those cases have been coordinated in the Los Angeles County Superior Court and the Alameda County Superior Court. The Second District Court of Appeal has been designated as the intermediate appellate court for the coordinated cases. The Bay Area cases, including appellants', are known as The Clergy Cases III. (Cal. Rules of Court, rule 1550(c).) The Clergy Cases III include: James Doe 1 et al. v. The Archbishop of San Francisco et al. (B192531); Dutra v. Eagleson (B183033) 146 Cal. App. 4th 216 [52 Cal. Rptr. 3d 788]; and Doe 17 v. Salesian Society (B195450). [3] Although the record on appeal includes far greater factual detail about appellants' allegations, some of it graphic, we have limited our statement of facts to only those necessary to analyze and resolve the notice issue. [4] Before judgment was entered, appellants brought, but lost, a new trial motion. Although appellants mention the new trial motion in their appellate brief's statement of facts, they have made no arguments concerning the denial of that motion. We therefore deem that issue waived. (Landry v. Berryessa Union School Dist. (1995) 39 Cal. App. 4th 691, 699-700 [46 Cal. Rptr. 2d 119].) [5] At the time suit was brought appellants were over 26 years of age. [6] The Doe court declined to reach the issue whether the complaints were timely under the 2003 revival provision of subdivision (c), but made clear that the failure to satisfy the notice requirements of subdivision (b)(2) was fatal to any attempt to qualify their actions under subdivision (c). (Doe, supra, 42 Cal.4th at p. 543, fn. 3.) [7] Appellants contend that the presence of "otherwise on notice" within subdivision (b)(2) establishes a form of notice that is different from and lesser than either actual or constructive notice. Under their interpretation, Zeilman's knowledge of the abuse should be imputed to the Diocese even if she had not been under an employment duty to report that information. The Doe court rejected a similar contention and made clear its belief that "`otherwise on notice'" did not establish a lesser form of notice. (Doe, supra, 42 Cal.4th at p. 548.) Because we conclude that triable issues of fact exist as to whether the Diocese is bound by Zeilman's knowledge of the alleged abuse, and because there is no difference between actual or constructive notice based on such imputed knowledge, we need not reach that issue. [8] The Diocese does not contend that Zeilman was not one of its employees. In fact, the Diocese argues that Zeilman's alleged knowledge of the abuse cannot be imputed to it because Zeilman was no more than a low-level employee. [9] We believe this evidence also points to another inferencethat Mahony's expectation suggests the housekeeper actually did report her suspicions. However, appellants have not raised that issue and therefore we will not reach it. [10] The Diocese argues in its appellate brief that section 340.1 as applied in this case violates its constitutional due process rights by reviving a claim based on statements attributed to a long-dead witnessZeilman. It therefore "objects" in its brief to the use of deposition testimony from appellants and their mother concerning Zeilman's purported knowledge of the abuse and asks that we affirm the summary judgment on this ground. We first reject its argument because it never objected below to the deposition testimony and has therefore waived its evidentiary objections. (§ 437c, subd. (b)(5).) We also reject its contention because it never raised the constitutional issue below. Although, as the Diocese points out, we have discretion to consider constitutional issues that are raised for the first time on appeal, in civil actions that rule applies where the facts are undisputed, important public policy questions are raised, penal statutes are involved, or error affects the validity of a judgment. (Hale v. Morgan (1978) 22 Cal. 3d 388, 394 [149 Cal. Rptr. 375, 584 P.2d 512].) The last two do not apply because a penal statute is not involved and because as a result of our holding there will be no judgment, invalid or otherwise. As for the remaining two grounds, the factual issues are clearly in dispute, which is why we are reversing the summary judgment in the first place. Finally, the Diocese challenges section 340.1 as applied to it in this case. While a facial challenge to a statute's constitutionality considers only the text of the measure itself, an "as-applied" challenge considers the facts and circumstances applicable to an individual party only. (Tobe v. City of Santa Ana (1995) 9 Cal. 4th 1069, 1084 [40 Cal. Rptr. 2d 402, 892 P.2d 1145].) Therefore, the issues raised by its constitutional challenge are limited and do not raise broader public policy questions. [1] Penal Code section 11161.5 imposed criminal sanction for noncompliance on physicians and surgeons. [2] Kalichman, Mandated Reporting of Suspected Child Abuse: Ethics, Law, & Policy (2d ed. 1999) page 14.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367618/	173 S.W.3d 189 (2005) In re WASHINGTON MUTUAL FINANCE, L.P., Fela Cavazos, David Gonzalez, Carmen Gonzalez, Rey Gonzales, and Adelaido Gonzales. No. 13-05-277-CV. Court of Appeals of Texas, Corpus Christi-Edinburg. August 26, 2005. 190 Melissa A. Prentice, Craig T. Enoch, Winstead, Sechrest & Minick, P.C., Austin, Brian T. Morris, Winstead, Sechrest & Minick, Dallas, Mike Mills, Atlas & Hall, McAllen, for relators. James P. Grissom, Edinburg, for real parties in interest Garcia and Flores. Israel Ramon, Jr., Law Office of Israel Ramon, Jr., McAllen, for real party in interest Fela Cavazos. Manuel Guerra III, McAllen, for real party in interest Carmen Gonzalez. Adelaido Gonzales, Harlingen, pro se. Rey Gonzales, Harlingen, pro se. Before Justices RODRIGUEZ, CASTILLO, and GARZA. OPINION Opinion by Justice GARZA. Washington Mutual Finance, L.P. and David Gonzalez (collectively "Washington Mutual") have filed a petition for writ of mandamus, seeking to compel Judge Jay Palacios of the County Court at Law Number Two of Hidalgo County to vacate his order of February 18, 2005, denying Washington Mutual's motion to compel arbitration, order arbitration under the Federal Arbitration Act ("FAA"), and stay the underlying proceedings. We conclude that the trial court abused its discretion by sustaining a defense to arbitration without holding an evidentiary hearing to determine disputed issues of material fact. We therefore instruct the trial court to vacate its order of February 18, 2005, denying Washington Mutual's motion to compel arbitration, and conditionally issue a writ of mandamus in the event the trial court does not comply with this opinion. This original proceeding arises from a suit filed against Washington Mutual and other defendants by Ignacio and Gloria Garcia and Carlos and Esmeralda Flores (the "plaintiffs"), in which the plaintiffs allege that they were fraudulently induced into obtaining loans from Washington Mutual. In response to the suit, Washington Mutual filed a motion to compel arbitration based on arbitration agreements signed by the plaintiffs at the time of their loans. In a brief filed in opposition to the motion to compel arbitration, the plaintiffs conceded the existence of the arbitration agreements but contended that arbitration could not be compelled because (1) there was unequal bargaining strength between Washington Mutual and the plaintiffs, (2) Washington Mutual did not explain the arbitration agreements to the plaintiffs, and (3) the plaintiffs did not understand the arbitration agreements because their reading fluency and comprehension is at an elementary school or junior high level. Attached to the plaintiffs' brief were test results for each of the plaintiffs, arguably establishing their below-average "reading fluency and comprehension," as well as a transcript of a deposition of Carmen Gonzalez, 191 a defendant in the underlying action.[1] The trial court held a hearing on Washington Mutual's motion to compel on May 3, 2004. At the hearing, the trial court heard arguments from both sides, but it did not hear testimony or admit other evidence into the record. Washington Mutual argued that the evidence attached to the plaintiffs' brief was inadmissible because it was not properly proven-up by affidavits or otherwise verified. Washington Mutual also argued that because the proceeding was summary in nature, the trial court was required to grant its motion to compel based on the uncontroverted evidence in the record, which established that the plaintiffs had signed arbitration agreements covering the claims they presently asserted. For their part, the plaintiffs conceded that they had signed the arbitration agreements. They urged the trial court to find the agreements to be unconscionable based on the evidence attached to their brief. The trial court did not rule on Washington Mutual's motion to compel, and it did not state whether it was admitting or excluding the evidence attached to the plaintiffs' brief. On May 5, 2004, the plaintiffs filed a motion to supplement the record and for an evidentiary hearing. Attached to the motion were four affidavits, one from each of the plaintiffs. The plaintiffs' motion argued, "If the affidavits offered above are permitted to supplement the record . . . ., further hearing is necessary to determine disputed facts." Washington Mutual filed a response in opposition to the plaintiffs' motion, arguing that the motion was untimely and that the plaintiffs' evidence was immaterial. On January 7, 2005, the parties received notice from the trial court setting a hearing for the plaintiffs' motion to supplement and for an evidentiary hearing on January 31, 2005. At the hearing on the plaintiffs' motion, the trial court heard arguments from both sides but did not hear testimony or admit other evidence. Counsel for the plaintiffs briefly mentioned his motion to supplement the record and for an evidentiary hearing but spent the bulk of his time arguing a different motion, in which he asked the trial court to strike the affidavits filed by Washington Mutual in support of its motion to compel. In concluding his argument, counsel for the plaintiffs stated to the court, "I'm asking you to strike the affidavits of David Gonzalez and Fela Cavazos, which are in support of their motion to compel arbitration, and alternatively to allow the Plaintiffs to supplement the record with their affidavits and if if the Court decides that it still wants to hear further evidence on this matter, then we're we're prepared to put on evidence today." In response, counsel for Washington Mutual argued that the affidavits challenged by the plaintiffs were perfectly admissible. He explained that the affidavits had been on file with the court for almost a year with no complaint from the plaintiffs. Counsel further explained that the only purpose the affidavits served was to prove that the plaintiffs signed the arbitration agreements, a fact which the plaintiffs conceded at the hearing on May 3, 2004, as well as in their brief in opposition to the motion to compel arbitration. According to counsel, even if the court were to strike the affidavits, Washington Mutual would be entitled to arbitration based on these admissions. Counsel then objected to the plaintiffs' motion to supplement the record and for an evidentiary hearing. 192 The trial court advised the parties that it would review the motions and issue a ruling in the near future. It also stated, "If I need to hear any other additional testimony or evidence, I will . . . advise both offices. . . ." Without conducting an evidentiary hearing or requesting additional evidence, the trial court denied Washington Mutual's motion to compel on February 18, 2005. No ruling was issued on either the plaintiffs' motion to strike or its motion to supplement the record and for an evidentiary hearing. This original proceeding ensued.[2] If a trial court erroneously denies a party's motion to compel arbitration under the FAA, the movant has no adequate remedy at law and is entitled to a writ of mandamus. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex.2001) (orig.proceeding). The trial court may summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery, and stipulations; however, the trial court does not have discretion to determine disputed material facts without holding an evidentiary hearing. See Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex.1992). As discussed above, there was no dispute before the trial court regarding the existence of arbitration agreements, which, if enforceable, would invoke the FAA and cover the plaintiffs' claims. Once a party seeking to compel arbitration establishes that an agreement exists under the FAA and that the claims raised are within the agreement's scope, the trial court has no discretion but to compel arbitration and stay its proceedings pending arbitration. Cantella & Co. v. Goodwin, 924 S.W.2d 943, 944 (Tex.1996) (orig.proceeding) (per curiam). Under such circumstances, the trial court may deny a motion to compel arbitration only if it concludes that the party opposing arbitration carried its burden of proving a defense to arbitration. See In re FirstMerit Bank, N.A., 52 S.W.3d at 756 ("[S]ince the law favors arbitration, the burden of proving a defense to arbitration is on the party opposing arbitration."). In this case, Washington Mutual established by its evidence and by the plaintiffs' admissions that multiple arbitration agreements existed under the FAA and that the plaintiffs' claims fell within the scope of the agreements. The burden thus shifted to the plaintiffs to prove a valid defense to arbitration. See id. As noted above, the plaintiffs contended that the arbitration agreements were procedurally unconscionable, an issue which is reserved for judicial review. See In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 n. 3 (Tex.1999) (orig.proceeding). The plaintiffs also contended that the trial court needed to hold an evidentiary hearing to determine disputed fact issues related to their defense. The plaintiffs maintained throughout their motion to supplement and for an evidentiary hearing that, if the trial court supplemented the record with their affidavits, the affidavits would succeed only in raising issues of material fact, which would require the court to conduct an evidentiary hearing. The trial court never held such an evidentiary hearing and never admitted any of the plaintiffs' evidence. It therefore had no basis to sustain the plaintiffs' defense to arbitration. We are fully aware that Washington Mutual opposed the plaintiffs' motion to supplement the record and for an evidentiary hearing, but we do not view 193 such opposition as an invitation for the trial court to summarily resolve disputed issues of material fact without providing both sides a fair opportunity to present evidence. We certainly do not construe it as an invitation for the trial court to resolve issues of material fact without considering any evidence at all. For these reasons, we conclude that the trial court abused its discretion by sustaining the plaintiffs' defense to Washington Mutual's motion to compel arbitration. Accordingly, this Court conditionally issues a writ of mandamus compelling the trial court to vacate its order denying Washington Mutual's motion to compel arbitration. The trial court is instructed to conduct an evidentiary hearing on any disputed issues of material fact related to the plaintiffs' defense to arbitration. The writ will issue only if the trial court refuses to vacate its order. Dissenting Opinion by Justice ERRLINDA CASTILLO. Dissenting Opinion by Justice CASTILLO. In this original mandamus proceeding, relators request that we direct the trial court to vacate the order denying their motion to compel arbitration (1) on the merits or, alternatively, (2) on grounds that the trial court failed to convene an evidentiary hearing. Granting relief on relators' alternative ground, the majority concludes that the trial court abused its discretion (1) by sustaining a defense to arbitration (2) without holding an evidentiary hearing (3) to determine disputed issues of material fact. For the reasons that follow, I respectfully dissent. Mandamus Relief Although the writ of mandamus is a discretionary remedy, its use is subject to certain conditions. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985). We may issue writs of mandamus "agreeable to the principles of law regulating those writs." See id. (citing TEX. GOV'T.CODE ANN. § 22.221(b) (Vernon 2004)). Mandamus issues only to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law. Id. (citing State v. Walker, 679 S.W.2d 484, 485 (Tex. 1984); Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992)).[1] We, therefore, act in excess of our writ power when we grant mandamus relief absent these circumstances. See Johnson, 700 S.W.2d at 917 (citing Ginsberg v. Fifth Court of Appeals, 686 S.W.2d 105, 108 (Tex.1985)). When the writ of mandamus is sought to correct a clear abuse of discretion by the trial court, the judicial function should be limited to an inquiry as to whether there was any controversy over the facts or conditions on which the judge acted or which he could properly consider. Bush v. Vela, 535 S.W.2d 803, 805 (Tex.Civ.App.-Corpus 194 Christi 1976, no writ) (citing Maresca v. Marks, 362 S.W.2d 299, 301 (Tex.1962)). If there is a reasonable doubt concerning the existence or nonexistence of facts or conditions on which the action was predicated, we are powerless to revise or disturb the action. See id. On the other hand, if the fact situation is such in which there is no room for the exercise of discretion, the action of the trial court is subject to control by mandamus. Id. The Record The trial court convened two hearings on relators' motion to compel arbitration. During the first hearing on May 3, 2004, the trial court heard arguments of counsel on the merits and did not issue a ruling. Subsequently, real-parties-in-interest filed a motion to supplement the record and a motion for an evidentiary hearing, asserting, among other things, unconscionability.[2] Relators filed responses opposing both motions.[3] The trial court convened a second hearing on January 31, 2005, on both motions. At that hearing, relators argued that (1) the motion to compel was "fully heard" and "fully considered" at the first hearing held in May, (2) "everything was before the Court in May on this summary proceeding," and (3) the hearing was a "[s]ummary proceeding under the law." Stating that it would take the matter under advisement, the trial court pronounced, "If I need to hear any other additional testimony or evidence, I will let-advise both offices and you'll have a ruling in reference to this by Friday at 5:00. . . ." Neither party objected. Subsequently, the trial court denied the motion to compel arbitration by written order. This original proceeding ensued. Analysis Declining to address relators' ground on the merits of the motion to compel arbitration, the majority concludes that the trial court abused its discretion because it sustained the real-parties-in-interest's defense to arbitration without providing an evidentiary hearing. See Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex.1992). The majority grants mandamus relief and orders "an evidentiary hearing on any disputed issues of material fact related to the defense" to arbitration real-parties-in-interest advanced. By its writ, the majority grants relief on relators' alternate ground before us-a ground they argued to the trial court was unnecessary, untimely, and unavailable to the real-parties-in-interest below. On this record, an evidentiary hearing that was argued as not mandatory to an arbitration opponent below has become mandatory to an arbitration proponent by virtue of mandamus relief. Respectfully, I would hold that, by its ruling, the trial court implicitly agreed with relators that it need not hear additional testimony or evidence. Thus, by its ruling, the trial court implicitly agreed with relators that an evidentiary hearing was unnecessary and proceeded to rule on the merits of relators' motion to compel arbitration. The trial court denied the 195 motion but, implicitly, granted relators' motion to proceed "as a matter of law."[4] Respectfully, I would honor the basic tenets that require (1) a party to present a complaint to the trial court first before seeking appellate relief, see e.g. TEX.R.APP. P. 33.1, and (2) that the grounds for relief before the appellate court comport to the complaint raised to the trial court. See id. Because the majority expressly grants relief on relators' alternative grounds not requested below, respectfully, I conclude we are powerless to grant mandamus relief. Bush, 535 S.W.2d at 805. Because I conclude we are powerless to grant relief on grounds not expressly requested first to the trial court, I respectfully dissent. NOTES [1] Carmen Gonzalez is not a party to this mandamus proceeding. [2] This Court has requested a response from the plaintiffs, but to date, the plaintiffs have not filed any response to Washington Mutual's petition for writ of mandamus. See TEX. R.APP. P. 52.4. [1] A trial court clearly abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). This standard, however, has different applications in different circumstances. Id. With respect to resolution of factual issues or matters committed to the trial court's discretion, for example, the reviewing court may not substitute its judgment for that of the trial court. Id. The relator must establish that the trial court could reasonably have reached only one decision. Id. at 840. On the other hand, review of a trial court's determination of the legal principles controlling its ruling is much less deferential. Id. A trial court has no "discretion" in determining what the law is or applying the law to the facts. Id. Thus, a clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion, and may result in appellate reversal by extraordinary writ. Id. [2] On the day of the hearing, the real-parties-in-interest filed a motion to strike the affidavits attached to relators' motion to compel based, in part, on grounds that the affidavits were "not based on personal knowledge," were conclusory and self-serving and, thus, not competent evidence to support the motion to compel. Relators countered that the "affidavits have been on file for almost a year." [3] Relators asserted in their response that, even if the trial court accepted the affidavits filed in support of the motion filed by the real-parties-in-interest attesting to unconscionability, the motion to compel should be granted as "a matter of law." [4] In short, the trial court could have concluded that, among other things, the relators' motion and evidence were insufficient as a matter of law to prove that the FAA applied or that the claims fell within the scope of the agreements. See Jack B. Anglin Co., 842 S.W.2d at 269; Prudential Sec. v. Banales, 860 S.W.2d 594, 597 (Tex.App.-Corpus Christi 1993, no writ) (orig.proceeding) (requiring summary disposition on the merits after finding that the opposing party's failure to follow the first step of presenting proper controverting evidence denies him the right to proceed to the second step of an evidentiary hearing). If so, then the trial court could have concluded that relators failed in their burden and, thus, the burden, if any, never shifted to the real-parties-in-interest. See id. Without deciding the merits of the motion to compel, however, I conclude that a summary proceeding under those circumstances was proper. The record, however, does not establish the grounds on which the trial court denied arbitration.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367626/	173 S.W.3d 199 (2005) ENTERGY GULF STATES, INC., Appellant, v. PUBLIC UTILITY COMMISSION OF TEXAS; Office of Public Utility Counsel; Cities of Beaumont, Bridge City, Conroe, Groves, Nederland and Port Neches; and Texas Industrial Energy Consumers, Appellees. No. 03-03-00628-CV. Court of Appeals of Texas, Austin. August 31, 2005. 202 John F. Williams, Jay Breedveld, Clark, Thomas & Winters, L. Richard Westerburg, Paula Cyr, Entergy Gulf States, Inc., Austin, for Appellant. Elizabeth R.B. Sterling, Steven Baron, Asst. Attys. Gen., Natural Resources Div., Austin, for Public Utility Commission of Texas. Eva King Andries, Suzette Ray McClellan, Assistant Public Counsel, Office of Public Utility Counsel, Austin, for Office of Public Utility Counsel. Daniel J. Lawton, The Lawton Law Firm, Austin, for Cities of Beaumont, et al. Rex D. VanMiddlesworth, Karen D. Whitt, Andrews Kurth, LLP, Austin, for Texas Industrial Energy Consumers. Before Chief Justice LAW, Justices B.A. SMITH and PEMBERTON. ON MOTION FOR REHEARING OPINION W. KENNETH LAW, Chief Justice. To address concerns raised in the motion for rehearing of Appellant Entergy 203 Gulf States, Inc., we withdraw our opinion and judgment issued on May 19, 2005, and substituted the following opinion in its place. We overrule the motion for rehearing. This appeal originated as a suit for judicial review challenging the Public Utility Commission's (Commission) order from a fuel reconciliation proceeding conducted under the Public Utility Regulatory Act (PURA). See Tex. Util.Code Ann. § 36.203 (West 1998). Appellant Entergy Gulf States, Inc. (Entergy)[1] claims that the Commission erred when it refused to permit Entergy to recover from retail customers approximately $4.2 million in costs Entergy incurred to purchase additional power from its own River Bend Nuclear Generating Station (River Bend) and from purchased power contracts. Entergy argues that the purchase of energy generated by the 30% interest in the River Bend power plant implicates the interstate wholesale energy market and that the Commission's actions are preempted by federal law. Entergy also asserts that the Commission erred when it disallowed purchased power capacity charges. For the reasons stated below, we affirm the judgment of the trial court upholding the Commission's order. Background During the summer of 1999, Entergy experienced an unanticipated power shortage that caused it to impose rolling blackouts on its retail customers. In response to regulatory criticism and fines, Entergy arranged to acquire more power from River Bend and from unaffiliated wholesale energy providers (purchased power) to adequately meet the anticipated energy needs of its customers. Initially, Entergy owned a 70% interest in River Bend (River Bend 70%). The energy generated from the River Bend 70% is earmarked for regulated service. The rates Entergy charges its customers, which includes the costs of providing the River Bend 70% energy, are set by the Commission and are designed to permit Entergy to realize a reasonable profit in excess of the utility's reasonable and necessary operating expenses associated with generating the River Bend 70% energy. See Tex. Util.Code Ann. § 36.051 (West 1998). Entergy subsequently acquired the remaining 30% of the River Bend power plant (River Bend 30%) as part of a bankruptcy settlement. It set aside the energy generated from the River Bend 30% for sale in the unregulated wholesale energy market.[2] Thus, Entergy recovers its costs plus a regulated profit from the River Bend 70% energy but obtains wholesale market prices for its unregulated River Bend 30% energy. 204 During the 1999 blackout, Entergy sold its River Bend 30% energy on the wholesale market instead of making it available to satisfy its native load,[3] even though Entergy realized it had made insufficient resources available for its retail customers. Entergy was criticized and fined by the Commission for the blackout and decided to make the River Bend 30% energy available to retail customers for summer 2000 as part of a comprehensive plan to avoid another blackout. To this end, Entergy Services, Inc.[4] filed a contract for the sale of the River Bend 30% energy with the Federal Energy Regulatory Commission (FERC) on May 8, 2000 (May 2000 Tariff). The filing contemplates the sale of the River Bend 30% energy between two Entergy affiliates, Entergy as the proposed seller and Entergy Services, Inc. as the proposed buyer.[5] The FERC approved the River Bend 30% transaction and set a rate for the sale of the wholesale energy. The May 2000 Tariff became effective June 1 of that same year. Entergy used the River Bend 30% energy and purchased power to supplement its native load, ensuring that its customers would not experience another energy shortage. Entergy sought reimbursement for nearly $583 million in additional energy expenses by instituting a fuel reconciliation proceeding. See Tex. Util.Code Ann. § 36.203 (West 1998). The Commission permitted Entergy to recover its eligible fuel reconciliation costs, including the cost of the nuclear fuel associated with generating the River Bend 30% energy. The Commission disallowed nearly $4.2 million of non-fuel costs associated with the River Bend 30% energy and associated with capacity costs that were embedded in the purchased power contracts. It is these two categories of disallowed costs to which Entergy objects. Entergy disagreed with the Commission's decision and the Commission referred the matter to the State Office of Administrative Hearings (SOAH) for a hearing. Several parties, including the cities that Entergy serves (Cities) and the Office of Public Utility Counsel (OPC) intervened. At the SOAH hearing, Entergy discussed the July 1999 blackout and its decision to use the unregulated River Bend 30% energy to prevent future energy shortfalls. Entergy claimed that the Commission erred when it disallowed the recovery of the River Bend 30% energy costs because the River Bend 30% energy transaction was an interstate wholesale energy transaction and subject to the rate set forth in FERC's May 2000 Tariff. Thus, according to Entergy, federal preemption precludes the Commission's discretion in determining the rate Entergy should recover in the fuel reconciliation; the Commission was required to honor the May 2000 Tariff rate and permit Entergy to recover all of its River Bend 30% costs. The Cities and OPC disagreed with Entergy and claimed that the River Bend 30% energy sale was the product of an affiliate transaction and, thus, the Commission acted properly when it disallowed nonfuel-related costs, including the affiliate profit Entergy realized on the sale of its River Bend 30% energy to itself. The Cities and OPC also offered evidence that 205 suggested Entergy impermissibly included capacity charges in the other purchased power costs for which it sought reimbursement. Based on these two assertions, the Cities and OPC recommended that the ALJ disallow the non-fuel costs associated with the River Bend 30% energy transaction and disallow the capacity charge component embedded in the price of the purchased power contracts. The ALJ found that the River Bend 30% energy acquisition was an affiliate transaction that violated the Commission's cost-of-service rules, which prohibit recovery of additional profit for an affiliate sale. The ALJ indicated that there might have been some impermissibly embedded capacity costs in the purchased power contracts but declined to calculate and impute the precise amount of ineligible costs. The Commission rejected the ALJ's recommendations regarding the affiliate sale and embedded capacity cost issues and remanded the case to SOAH to determine the portion of Entergy's claimed reimbursable expenses that was a profit Entergy realized on the sale of Entergy's River Bend 30% energy to itself, and to determine the capacity costs reflected in the claimed eligible fuel costs. On remand, the ALJ determined that the transaction was not an affiliate transaction and that all of the costs should be reimbursed. The Commission disagreed with the ALJ's subsequent conclusions, stating that the River Bend 30% energy was not part of a purchased power transaction, but, if anything, was an affiliate transaction. Moreover, the Commission found that there was no purchase or sale in connection with the River Bend 30% energy transaction because there was no transfer of title from Entergy to Entergy Services, Inc., and because Entergy did not "buy back" the power from Entergy Services Inc. The Commission's Final Order stated, "An internal corporate transfer between Entergy's unregulated and regulated business activities does not amount to a sale." The Commission explained that it was unreasonable for Entergy to recover a profit and ineligible costs associated with the "purchase" of its own wholesale electricity and to record the transaction as a "sale" in its accounting system, when Entergy merely used its own, albeit unregulated, generation. Pursuant to the administrative code, the Commission reimbursed Entergy for the River Bend 30% energy fuel costs in the fuel reconciliation and disallowed the non-fuel costs and profit Entergy realized on the affiliate sale of the River Bend 30%. See 16 Tex. Admin. Code § 25.236(a)(1) (2004). The Commission also found that the purchased power included capacity charges embedded in the contract price, even though the contracts did not separately state capacity charges. Because capacity charges are ineligible for reimbursement in a fuel reconciliation proceeding, the Commission disallowed 24% of the contract price, which was the percentage Entergy admitted was a reasonable estimate of the proper capacity charge. See id. § 25.236(a)(4). Accordingly, the Commission allowed Entergy to recover its purchased power costs, less the disallowed capacity charges. The Commission noted that the proper forum for Entergy to recover the disallowed capacity and demand costs is through a rate case proceeding, not an interim fuel reconciliation proceeding. See Tex. Util.Code Ann. § 36.051 (West 1998). Entergy appealed the decision to the district court seeking a reversal of the Commission's final order and seeking a declaratory judgment to address similar subsequent purchase power agreements. The district court denied all relief requested by Entergy. This appeal followed. 206 DISCUSSION Entergy challenges the trial court's decision in three issues: (1) whether the Commission's discretion to disallow the costs associated with the River Bend 30% energy purchase is preempted by federal law, and whether the order violates PURA and the Commission's own previous orders, and constitutes an abuse of discretion; (2) whether the Commission's order disallowing imputed capacity costs associated with other purchased power is preempted by federal law, violates the fuel rule, constitutes an arbitrary ad hoc amendment to the fuel rule, and was disallowed in the absence of substantial evidence; and (3) whether the district court erred in refusing to grant a declaratory judgment that Entergy's similarly situated power purchases are subject to the requirements of the filed rate doctrine. State and Federal Regulatory Overview A brief review of the relevant state and federal law and regulations will be helpful to our discussion. Under PURA, a regulated electric utility such as Entergy may not automatically pass its actual fuel costs through to its customers. Tex. Util.Code Ann. § 36.201 (West Supp.2004-05); Nucor Steel v. Public Util. Comm'n, 26 S.W.3d 742, 744 (Tex.App.-Austin 2000, pet. denied). Instead, the Commission conducts a full rate hearing to determine the base rate a utility may charge its customers for its energy. See Entergy Gulf States, Inc. v. Public Util. Comm'n, 112 S.W.3d 208, 215 (Tex.App.-Austin 2003, pet. denied). The base rate is prospective, and is set at a level that will permit the utility to realize a reasonable profit and reimburse the utility's projected reasonable and necessary operating costs. Tex. Util.Code Ann. § 36.051 (West 1998). A fuel factor component is also incorporated in the rates, and takes into account projected fuel costs. Id. § 36.203. A fuel reconciliation, as distinguished from a base rate case, is an interim "true-up" proceeding, where the Commission periodically adjusts the utility's fuel factor to correct for the variance between the anticipated fuel costs and fuel costs actually incurred. Id.; Nucor Steel, 26 S.W.3d at 744. A fuel reconciliation is a narrow inquiry that aims only to adjust the fuel factor for the anomalies that result from actual, fluctuating fuel prices that occur in between rate hearings. See G.T.E. S.W., Inc. v. Public Util. Comm'n, 978 S.W.2d 161, 168 (Tex.App.-Austin 1998, pet. denied) (Powers, J., dissenting). "The obvious intention of the legislature was to avoid the time and expense of a full-scale rate case, both to the public and to the utility, when the issue involves only a single item of what are indisputably operating expensesfuel costs...." Id. at 168-69. If the Commission determines that an adjustment to the fuel factor is in order, a refund or a surcharge to customers will result. 16 Tex. Admin. Code § 25.236(e) (2004). In a fuel reconciliation hearing, the utility bears the burden of demonstrating that its actual fuel-related expenses were "reasonable and necessary" and eligible for recovery. Id. § 25.236(d). Eligible fuel reconciliation expenses are those expenses properly recorded in the utility's general ledger accounts 501, 503, 518, 536, 547, 555 and 565, under the FERC Uniform System of Accounts. Id. § 25.236(a). The FERC rules provide that account 555 shall include purchased power expenses that are incurred when a utility purchases wholesale electricity for resale. See 18 C.F.R. § 101 (2004). The fuel rule prohibits a utility from recovering purchased power capacity costs in a fuel reconciliation. 16 Tex. Admin. Code § 25.236(a)(4) (2004). Capacity charges and other operating expenses may be recovered 207 in a full rate case hearing. See Tex. Util.Code Ann. § 36.051 (West 1998). Utilities are also prohibited from charging customers for an additional profit realized from the sale of energy from an affiliate of the utility to itself. 16 Tex. Admin. Code § 25.236(a)(1) (2004). "The electric utility may not recover [a] ... profit for an affiliate of the electric utility, regardless of whether the affiliate incurs or charges the... profit before or after the fuel is delivered to the generating plant site." Id. The FERC regulates the sale of electricity at wholesale in interstate commerce. 16 U.S.C. § 824(b); Entergy La., Inc. v. Louisiana Pub. Serv. Comm'n, 539 U.S. 39, 41, 123 S. Ct. 2050, 156 L. Ed. 2d 34 (2003). Under the filed rate doctrine, interstate power rates filed with the FERC or fixed by the FERC must be given binding effect by state utility commissions determining intrastate rates. Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 963, 106 S. Ct. 2349, 90 L. Ed. 2d 943 (1986). When the FERC sets a rate between a purchaser and seller of wholesale power, a state may not exercise its jurisdiction over retail sales to prevent the seller from recovering the FERC-approved rate, impermissibly "trapping" costs. Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 372, 108 S. Ct. 2428, 101 L. Ed. 2d 322 (1988).[6] A state agency's failure to give binding effect to a FERC-approved wholesale power rate is a violation of the FERC's exclusive jurisdiction and therefore is preempted by federal law. Id. at 371, 108 S. Ct. 2428. A fuel reconciliation is a ratemaking proceeding. Southwestern Pub. Serv. Co. v. Public Util. Comm'n, 962 S.W.2d 207, 219 (Tex.App.-Austin 1998, pet. denied); G.T.E. S.W., Inc., 978 S.W.2d at 166. The River Bend 30% Transaction In its first issue, Entergy asserts that it was error for the Commission to disallow the River Bend 30% energy non-fuel costs. Entergy argues that because the transaction was an interstate sale of wholesale electricity, the filed rate doctrine requires the Commission to permit Entergy to recover all of its River Bend 30% energy costs, as provided for in the May 2000 Tariff rate. Thus, according to Entergy, the Commission's regulation of the River Bend 30% energy costs, i.e., disallowing its non-fuel expenses, is preempted by federal law. Entergy also complains that the Commission's disallowance of the River Bend 30% energy non-fuel costs contradicted the Commission's previous orders and constitutes an abuse of discretion. We begin our discussion by setting forth our analytical framework. We confine our inquiry to whether the Commission properly disallowed ineligible costs in evaluating the Commission's actions in the fuel reconciliation. See Tex. Util.Code Ann. § 36.203 (West 1998). Pursuant to the fuel reconciliation hearing, the Commission permitted Entergy to recover its River Bend 30% energy nuclear fuel costs but disallowed certain non-fuel expenses Entergy wanted to charge through to its retail customers, including the profit Entergy realized on the sale of its wholesale energy to itself, and other ineligible operating expenses. Entergy asserts that the filed rate doctrine applies and thus the 208 Commission must permit Entergy to recover all of its River Bend 30% energy costs as allowed by the May 2000 Tariff. See Nantahala Power and Light Co., 476 U.S. at 963, 106 S. Ct. 2349. We disagree. Texas law prohibits a utility from charging customers for an additional profit realized from the sale of energy from an affiliate of the utility to itself. 16 Tex. Admin. Code § 25.236(a)(1) (2004). The May 2000 Tariff contemplated the sale of the River Bend 30% energy from Entergy to Entergy Services, Inc., then a sale from Entergy Services, Inc. back to Entergy to supplement its native load. In its effort to avoid affiliate sale fuel reconciliation deductions, Entergy proved that in fact no sale occurred. The evidence in the record shows that the proposed sales transaction was never executed as structured in the May 2000 Tariff. James Kenney, Vice President of Energy Management for Entergy Services, Inc., testified at the SOAH hearing that Entergy, not Entergy Services, Inc., acquired the River Bend 30% energy. He asserted that "regardless of the contract and the filing at the FERC, this is strictly a transaction from Entergy to itself." Kenney averred that the unregulated River Bend 30% energy was dedicated to regulated retail service for a limited period of time, and that the energy never left Entergy. Furthermore, under the terms of the System Agreement, it would have been impossible for Entergy to sell the River Bend 30% energy to the Entergy System. During the summer of 1999, while Entergy was experiencing the energy shortfall that led to the blackout and its regulatory discipline, Entergy sold its River Bend 30% to a third party instead of using the River Bend 30% energy to address Entergy's native load demands. Entergy was informed by both the Texas and Louisiana energy regulatory commissioners that it should use the River Bend 30% energy to supplement its anticipated energy needs for the summer of 2000. Under the System Agreement, an operating company, like Entergy, may only sell energy it produces in excess of its needs. Because Entergy needed the River Bend 30% energy to satisfy its native load, Entergy, by the terms of the System Agreement, was never in the position to sell the River Bend 30% to the Entergy System and to repurchase the energy, as structured under the May 2000 Tariff. The Commission also found that no purchase or sale occurred because there was no transfer of title from Entergy to Entergy Services, Inc., nor did Entergy "buy back" the power from Entergy Services, Inc. Obtaining approval from the FERC for a transaction is not tantamount to consummating the transaction. Thus the sale to Entergy Services, Inc. contemplated in the FERC filing never took place. Entergy argues that an intra-corporate transfer under Public Serv. Comm'n v. Mid-La. Gas Co., 463 U.S. 319, 103 S. Ct. 3024, 77 L. Ed. 2d 668 (1983) is considered a "sale." In Mid-La. Gas Co., the U.S. Supreme Court found that under federal statutes regulating the sales of natural gas, an intra-corporate transfer could be considered a "first sale." Id. at 326, 103 S. Ct. 3024. The Supreme Court examined the legislative history of the Natural Gas Policy Act and determined that Congress intended for pipeline production to receive first sale pricing. Id. at 338, 103 S. Ct. 3024. The Supreme Court's Mid-La. Gas Co. decision was narrowly tailored to address the question of "first sales" under the Natural Gas Policy Act; it did not hold that all utility intra-corporate transfers are "sales." See Southern Ca. Edison Co. v. Southern Ca. Gas Co., 80 F.E.R.C. ¶ 61,-390, 1997 WL 598491 (1997). 209 Because the May 2000 Tariff sale never took place and because under these circumstances the intra-corporate transfer is not considered a "sale," the filed rate doctrine does not apply and the Commission's discretion to disallow non-fuel costs in the fuel reconciliation is not preempted by federal law. A fuel reconciliation is a narrow inquiry about the fluctuation of actual fuel costs. Tex. Util.Code Ann. § 36.203 (West 1998); see G.T.E. S.W., Inc., 978 S.W.2d at 168. We hold that the Commission's treatment of the River Bend 30% transaction is not preempted by federal law and does not violate the filed rate doctrine. The Commission properly disallowed the non-fuel components of the River Bend 30% energy costs. See Tex. Util.Code Ann. § 36.051 (West 1998). Entergy also complains that if the filed rate doctrine does not apply, Entergy's non-fuel costs will be theoretically trapped because these costs are not already included in Entergy's base rate and Entergy claims that it cannot otherwise recover these costs. See Mississippi Power and Light Co., 487 U.S. at 372, 108 S. Ct. 2428. We disagree. Entergy has not shown that it failed to recover its non-fuel rates through its base rate due to the additional electricity it sold during the summer of 2000. Entergy's base rates were set based on the expectation that it would sell a certain amount of electricity at retail, and the base rates were frozen after the rate case proceeding. During the Summer of 2000, Entergy sold more electricity at retail than had been expected when the base rates were set. Thus with each incremental unit sold at retail, Entergy may very well have recovered more in its base rates than it and the Commission had expected Entergy to recover. To show that non-fuel costs were trapped, Entergy would have to show that the non-fuel related costs were not recovered in the additional revenue Entergy realized through base rates. Entergy made no such showing. Entergy also complains that the Commission's disallowance of the River Bend 30% energy non-fuel costs was an abuse of discretion because it contradicted the Commission's previous orders by treating the River Bend 30% energy as a regulated asset for the purpose of the fuel reconciliation. A state agency decision may be found to be arbitrary and capricious when it fails to reflect consideration of statutory factors and when it reflects an unreasonable result, even if the agency purports to review pertinent factors. E.g., City of El Paso v. Public Util. Comm'n, 883 S.W.2d 179, 184 (Tex.1994). The Commission had previously treated the River Bend 30% energy as a wholesale generation asset. It did not include any of the River Bend 30% energy non-fuel related costs in the base rates Entergy charges its customers because Entergy insisted on selling the River Bend 30% energy on the wholesale energy market. Entergy elected to use its own River Bend 30% wholesale energy to comply with the Commission's mandate to secure additional power to satisfy the needs of its retail customers. Because a portion of the costs for which Entergy seeks reimbursement are ineligible non-fuel expenses, the Commission disallowed the ineligible costs, consistent with the guidelines set forth in the Texas Administrative Code. See 16 Tex. Admin. Code § 25.236(a) (2004). Thus the Commission's decision was not arbitrary or capricious. We overrule Entergy's first issue. Imputed Capacity Charges In its second issue, Entergy asserts that the Commission improperly imputed capacity charges from the additional power 210 Entergy purchased from external wholesalers.[7] Entergy argues that the filed rate doctrine preempts the Commission's actions and that the Commission violated the federal interpretation of the System Agreement. Entergy also challenges the Commission's disallowance of imputed capacity costs because this treatment violates the fuel rule, is not supported by substantial evidence, and constitutes an arbitrary ad hoc amendment to the fuel rule. The Commission asserts that Entergy waived its federal preemption argument by failing to raise it in its motion for rehearing. Entergy argues that case law permits Entergy to raise an issue of federal preemption at any time. See Gorman v. Life Ins. Co. of North Am., 811 S.W.2d 542, 545 (Tex.1991). In administrative proceedings, a party must timely file a motion for rehearing as a prerequisite to appeal. Tex. Gov't Code Ann. § 2001.145 (West 2000). The motion for rehearing must be sufficiently definite to allow the agency to cure the error or defend the order. Ray v. State Bd. of Pub. Accountancy, 4 S.W.3d 429, 433 (Tex.App.-Austin 1999, no pet.); Four Stars Food Mart, Inc. v. Texas Alcoholic Beverage Comm'n, 923 S.W.2d 266, 270 (Tex.App.-Fort Worth 1996, no writ). To preserve the issue for review, the party must state in the motion for rehearing the particular issue the party asserts was error and the legal basis upon which the claim rests. Id. In Gorman, a widow sued her husband's employer and its insurer to recover work-related death benefits she claimed the insurance company improperly denied. See Gorman, 811 S.W.2d at 544. The defendants contended that the widow's causes of actions were preempted by ERISA because they "related to" an employee benefit welfare plan organized pursuant to the authority and requirements of ERISA. Id. The supreme court recognized that it had to clarify the extent of the ERISA preemption. Id. "At the heart of the present dispute is whether, given the facts of this case, ERISA preemption implicates the subject matter jurisdiction of the court or merely affects which law is to be used in the case." Id. A preemption argument that affects forum rather than choice of law cannot be waived and may be raised on appeal. Id. However, an argument that affects choice of law can be waived. See id. Entergy claims that federal law preempts the Commission's actions because the filed rate doctrine mandates that the Commission apply wholesale power rates fixed by the FERC. Thus, Entergy asserts a choice of law argument as to which rules, federal or state, the Commission should have applied in this case. Entergy does not assert a preemption argument attacking the competency of the Commission or the courts to hear the case. Thus, Gorman does not support Entergy's argument. Because Entergy did not preserve the choice of law issue in its motion for rehearing, Entergy has waived the right to argue this issue on appeal. Ray, 4 S.W.3d at 433. Entergy also asks us to decide whether the Commission's treatment of capacity costs violates the fuel rule, whether the Commission's decision is supported by substantial evidence, and whether the Commission's actions constitute an arbitrary ad hoc amendment to the fuel rule. 211 The fuel rule prevents a utility from recovering capacity costs through the fuel factor as part of purchased power. 16 Tex. Admin. Code § 25.236(a)(4) (2004).[8] In determining whether substantial evidence exists to support an agency's decision, the reviewing court may decide only whether the record demonstrates some reasonable basis for the agency's action. Mireles v. Texas Dep't of Pub. Safety, 9 S.W.3d 128 (Tex.1999). The court may not substitute its judgment for that of the agency, and the court does not determine whether the agency's decision was correct. Id. Courts must affirm administrative findings in contested cases if there is more than a scintilla of evidence to support them. Id. An administrative decision may be sustained even if the evidence preponderates against it. Id. A state agency must promulgate new rules through formal rulemaking procedures, which include giving notice of a proposed new rule, soliciting public comment, submitting to legislative review, and entering an order to adopt the new rule. See Tex. Gov't Code Ann. §§ 2001.023; 2001.029; 2001.032-.033 (West 2000). Entergy claims that the Commission violated the fuel rule because it disallowed capacity charges that were not explicitly stated separately as line items. In essence, Entergy argues that the fuel rule requires the Commission to pass through to retail customers the entire cost of purchased power unless the contract explicitly states capacity charges. In other words, Entergy argues the Commission cannot look beyond the stated "energy only" purchased power contract terms to determine whether the contract in fact includes embedded capacity charges. The plain language of the fuel rule prohibits a utility from recovering capacity charges associated with purchased power. See 16 Tex. Admin. Code § 25.236(a)(4) (2004). The rule is not stated in terms of segregated electricity and capacity charges, but in terms of total capacity charges. The expert testimony in the record shows that the contracts provided capacity benefits by offering system-wide reliability and firmness of supply, even though the contracts did not separately state a capacity charge. Entergy did not advance its own estimate of the imputed capacity charge, but conceded that the expert's estimate of 24% of the contract price was reasonable. Furthermore, Entergy testimony corroborated Entergy's desire to acquire through purchased power the power and capacity it required to avoid another energy shortfall in 2000. We hold that the Commission properly excluded the imputed capacity charges and that there is substantial evidence to support the Commission's decision. Last, Entergy asserts that the Commission illegally modified the fuel rule when it disallowed the embedded capacity charges associated with the purchased power. Entergy claims that this practice departed from previous applications of the fuel rule and that the ad hoc modification is unlawful because the Commission did not engage the formal rulemaking process to modify the fuel rule. See Tex. Gov't Code Ann. §§ 2001.023; 2001.029; 2001.032-.033 (West 2000). In January 2005, the Commission solicited comments on proposed amendments to the fuel rule regarding eligible purchased power expenses. See 30 Tex. Reg. 335-36 (2005) (proposed January 10, 2005). *212 Entergy asserts that the Commission's decision departed from its fuel reconciliation policy and rules and suggests that this request for public comment is tantamount to the Commission admitting that it must engage the formal rulemaking process to modify the fuel rule to permit the Commission to impute capacity charges. We disagree. The proposed modification for which the Commission seeks public comment will facilitate the identification and calculation of imputed energy charges in purchased power contracts when no capacity charge is separately stated. See id. The modification does not seek to establish whether the Commission may impute charges. Furthermore, the Commission may consider a matter in a contested case before adopting a rule later. See City of El Paso, 883 S.W.2d at 189 ("ad hoc adjudication may be preferable to formal rulemaking proceeding where `the agency may not have had sufficient experience with a particular problem to warrant rigidifying its tentative judgment into a hard and fast rule.'"). We hold that the Commission's treatment of the imputed capacity costs was proper under the fuel rule and was supported by substantial evidence, and that the Commission's decision to disallow imputed capacity charges did not constitute an ad hoc amendment to the fuel rule. We overrule Entergy's second issue. Declaratory Judgment In its last issue, Entergy asserts that the district court erred in refusing to grant a declaratory judgment that Entergy's similarly situated future power purchases are subject to federal preemption and the filed rate doctrine. Because we hold that the transactions at issue in this case are not subject to the filed rate doctrine, we need not reach the declaratory judgment issue. CONCLUSION We hold that the Commission properly disallowed the non-fuel costs associated with the River Bend 30% energy transaction and properly disallowed the purchased power contracts' imputed capacity costs in the fuel reconciliation. We affirm the judgment of the district court, affirming the Commission's actions. NOTES [1] Entergy is one of five public utilities that comprise the Entergy System, a single integrated electric system that operates under the Entergy System Agreement (System Agreement). The System Agreement is a separate Federal Energy Regulatory Commission tariff that controls how electricity and the total costs of generating power on the system are allocated among the corporate siblings. Entergy La., Inc. v. Louisiana Pub. Serv. Comm'n, 539 U.S. 39, 123 S. Ct. 2050, 156 L. Ed. 2d 34 (2003). A sale under the System Agreement can occur only when a subsidiary has energy in excess of its own needs. In any given hour, a subsidiary can be buying from or selling to the Entergy Energy Exchange, a pool of surplus energy generated by other subsidiaries. [2] Entergy characterizes the River Bend 30% asset as "unregulated." Although the term "unregulated asset" is not defined, for our purposes we assume that the term means an asset whose generated energy is sold in the wholesale market and whose costs are not recovered in the base rate charged to retail ratepayers. [3] "Native load" refers to the collective energy needs of Entergy's retail customers. [4] Entergy Services, Inc. is a subsidiary of Entergy Corporation and is a service company affiliate of the Entergy utility subsidiaries. It acts as their agent in the execution and administration of certain contracts. [5] The proposed sale would be executed according to the System Agreement. [6] The Supreme Court recognized a limited "prudence review" exception to the scope of the FERC's jurisdiction and filed rate doctrine. Gulf States Utils. Co. v. Public Util. Comm'n, 841 S.W.2d 459, 469 (Tex.App.-Austin 1992, writ denied). Federal preemption does not preclude a state utility commission's review of a utility's prudence in contracting to purchase a quantity of energy capacity in light of its projected needs and considering its alternative power sources. Id. The prudence review exception is not at issue in this case. [7] This issue only concerns power purchased from outside energy wholesalers and not the River Bend 30% transaction. [8] Capacity charges may be recovered in a full rate case hearing. See Tex. Util.Code Ann. § 36.051 (West 1998).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367675/	432 F. Supp. 291 (1977) In re FTC CORPORATE PATTERNS REPORT LITIGATION. In re FTC LINE OF BUSINESS REPORT LITIGATION. Misc. Nos. 76-0126, 76-0127. United States District Court, District of Columbia. April 12, 1977. 292 293 294 295 296 Edwart T. Tait, Lee A. Rau, John M. Wood, Stuart M. Gerson and Thomas H. Reilly of Reed, Smith, Shaw & McClay, Washington, D. C., for American Air Filter Co., Inc., et al. Ira M. Millstein, Mark A. Jacoby and Salem M. Katsh of Weil, Gotshal & Manges, New York City, for Chamber of Commerce of the U. S., et al. John F. McClatchey and Leslie W. Jacobs of Thompson, Hine & Flory, Cleveland, Ohio, for Goodyear Tire & Rubber Co., Hobart Corp. and Van Dorn Co. J. Randolph Wilson, John S. Koch, Steven S. Rosenthal, and Philip C. Stahl of Covington & Burling, Washington, D. C., for Chamber of Commerce of the U. S., et al. Richard W. Pogue of Jones, Day, Reavis & Pogue, Cleveland, Ohio, and Mark Elliot Mazo and John C. Reitz of Jones, Day, Reavis & Pogue, Washington, D. C., for American Greetings Corp., et al. Robert E. Jordan, III, Robert M. Goolrick and Michael K. Wyatt of Steptoe & Johnson, Washington, D. C., and Edward E. Vaill and Michael J. Myers, Los Angeles, Cal., for Atlantic Richfield Co. Michael K. Wyatt of Steptoe & Johnson, Washington, D. C., for Fairmont Foods Co. Philip A. Lacovara, Gerald Goldman and David M. Becker of Hughes, Hubbard & Reed, Washington, D. C., for Allen-Bradley Co. and Merck & Co., Inc. Frank P. Cihlar and James R. Henderson, IV, of Mayer, Brown & Platt, Washington, D. C., for CPC Intern., Inc.; Cargill, Inc., Inland Steel Co., Northwest Industries, Inc.; Oscar Mayer & Co., Inc.; Ross Industries, Inc. and Sundstrand Corp. John F. Graybeal and Robert C. Houser, Jr., of Foley, Lardner, Hollabaugh & Jacobs, Washington, D. C., for Square D. Co. William Simon, Harold F. Baker, David C. Murchison, J. Wallace Adair, John DeQ. Briggs and Stuart H. Harris of Howrey & Simon, Washington, D. C., for American Cyanamid Co., et al. Jack L. Lipson, Andrew S. Krulwich and Hadrian R. Katz of Arnold & Porter, Washington, D. C., for Hoffmann-La Roche Inc. and Lone Star Industries, Inc. Philip J. Davis of Kirkland, Ellis & Rowe, Washington, D. C., and Donald G. Kempf, Jr., and Joseph F. Coyne of Kirkland & Ellis, Chicago, Ill., for Chemetron Corp., Dean Foods Co., The Firestone Tire & Rubber Co., FMC Corp., Harnischfeger Corp., Kirsch Co., Lehigh Portland Cement Co., Motorola, Inc., Polaroid Corp., and Rexnord, Inc. Peter E. Fleming, Jr., Eliot Lauer and Samuel F. Abernethy of Curtis, Mallet-Prevost, Colt & Mosle, New York City, for Dover Corp. James F. Rill and Kathleen E. McDermott, of Collier, Shannon, Rill, Edwards & Scott, Washington, D. C., for Carpenter Technology Corp., Kohler Co., Safeway Stores, Inc., and A. E. Staley Mfg. Co. Theodore A. Groenke and Harold J. Bressler of McDermott, Will & Emery, Chicago, Ill., for Kohler Co. and A. E. Staley Mfg. Co. James F. Bromley of Macleay, Lynch, Bernhard & Gregg, Washington, D. C., for U. S. Gypsum Co. Harold S. Barron and Noel C. Crowley of the Bendix Corp., Southfield, Mich., for The Bendix Corp. Arloe Mayne, Gen. Counsel, Ashland Oil, Inc., Ashland, Ky., and Ronald P. Wertheim, of Ginsburg, Feldman & Bress, Washington, D. C., for Ashland Oil, Inc. Milton J. Schubin and Richard C. Seltzer, of Kaye, Scholer, Fierman, Hays & Handler, New York City, for GAF Corp. Daniel K. Mayers and Neil J. King, of Wilmer, Cutler & Pickering, Washington, D. C., and James R. DeVita of Sullivan & Cromwell, New York City, for American Standard, Inc.; The Babcock & Wilcox Co., Ford Motor Co., The General Tire & Rubber Co.; and Kaiser, Aluminum & Chemical Corp. 297 James M. Porter, of Squire, Sanders & Dempsey, Cleveland, Ohio, and William C. Collishaw of Cox, Langford & Brown, Washington, D. C., for White Consolidated Industries, Inc. David S. Pennock of Alexander & Green, New York City, for Cerro-Marmon Corp. Samuel K. Abrams and Wilbur L. Fugate of Morison, Murphy, Abrams & Haddock, Washington, D. C., for Cone Mills Corp. and The Sperry & Hutchinson Co. Raymond E. Vickery, Jr., of Hogan & Hartson, Washington, D. C., for Hughes Tool Co. and Republic Steel Corp. Ramsay D. Potts and Steven L. Meltzer of Shaw, Pittman, Potts & Trowbridge, Washington, D. C., for Emerson Elec. Co. Leonard I. Horowitz of Times Mirror Co., New York City, for Times Mirror Co. Barry Hirsch of Loews Corp., New York City, for Loews Corp. Milton Wolson and Edwin Silverstone of SCM Corp., New York City, and S. White Rhyne, Jr., of Mullin, Connor & Rhyne, Washington, D. C., for SCM Corp. Sydney B. Wertheimer of Weisman, Celler, Spett, Modlin, Wertheimer & Schlessinger, New York City, for Fedders Corp. Paul J. Newlon and Victoria G. Traube of Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for Milliken & Co. Fred L. Woodworth of Dykema, Gossett, Spencer, Goodnow & Trigg, Detroit, Mich., for Overhead Door Corp. and Champion Home Builders Co. Philip W. Schaefer of Texaco Inc., New York City, for Texaco Inc. Jesse P. Luton, Jr., John E. Bailey and Kevin F. Cunningham of The Gulf Companies, Houston, Tex., for Gulf Oil Corp. Joseph W. Burns of Burns, Van Kirk, Greene & Kafer, New York City, for Ingersoll-Rand Co. Albert R. Connelly and Andrew D. Postal of Cravath, Swaine & Moore, New York City, for Bethlehem Steel Corp.; Cincinnati Milacron, Inc.; Kellogg Co.; Olin Corp.; Republic Steel Corp.; Rhinechem Corp.; and Time Inc. Edwin S. Rockefeller and Alan M. Frey of Bierbower & Rockefeller, Washington, D. C., for Norton Simon Inc. Norman Solovay of Holtzman, Wise & Shepard, New York City, and Leonard M. Kessler of Kelley Drye & Warren, New York City, for Chrysler Corp. Charles H. McAuliffe of Thomas J. Lipton, Inc., Englewood Cliffs, N. J., for Thomas J. Lipton, Inc. David J. Lewis and Elroy H. Wolff of Sidley & Austin, Washington, D. C., for Thomas J. Lipton, Inc. and Kimberly-Clark Corp. Robert D. Tyler, Jr., of Beatrice Foods Co., Chicago, Ill., and John R. Reilly of Winston & Strawn, Washington, D. C., for Beatrice Foods Co.; Rorer-Amchem, Inc., Fort Washington, Pa. Kenneth Schnaper of Crane Co., New York City, for Crane Co. Eve E. Bachrach of Stein, Mitchell & Mezines, Washington, D. C., for C.I.T. Financial Corp. and Food Fair Stores, Inc. Thomas C. Morrison of Patterson, Belknap, Webb & Tyler, New York City, for Johnson & Johnson. Dennis M. Sheedy of Kirkpatrick Lockhart Johnson & Hutchison, Pittsburgh, Pa., for Cyclops Corp. Donald J. Mulvihill and Gerald J. Brown of Cahill, Gordon & Reindel, Washington, D. C., for The Great Atlantic & Pacific Tea Co., Inc. Andrew J. Kilcarr of Donovan, Leisure, Newton & Irvine, Washington, D. C., and Thomas R. Trowbridge, III, of Donovan, Leisure, Newton & Irvine, New York City, and Charles F. Rice of Mobil Oil Corp., New York City, for Mobil Oil Corp. Donald G. McCabe and Anthony B. Barton of Hall, McNicol, Hamilton & Clark, New York City, for American Maize-Products Co. Charles Kadish of Breed, Abbott & Morgan, New York City, for Honeywell, Inc. 298 Gilbert H. Weil and Robert L. Sherman of Weil, Guttman & Davis, New York City, for Bristol-Myers Co. Caswell O. Hobbs, III, and David W. Huston of Morgan, Lewis & Bockius, Washington, D. C., for American Stores Co. David C. Trowbridge of Hallmark Cards, Inc., Kansas City, Mo., for Hallmark Cards, Inc. Ronald G. Precup of Nussbaum & Owen, Washington, D. C., for American Beef Packers, Inc. Stephen Kurzman of Nixon, Hargrave, Devans & Doyle, Washington, D. C., for Bausch & Lomb, Inc.; Dunlop Tire & Rubber Corp., Buffalo, N.Y.; NL Industries, Inc., New York, N.Y.; R. T. French Co., Rochester, N.Y. Larry L. Williams and Robert J. Pope of Clifford, Glass, McIlwain & Finney, Washington, D. C., for The Continental Group, Inc. (formerly Continental Can Company, Incorporated). Robert J. Lewis, Gen. Counsel; Gerald P. Norton, Deputy Gen. Counsel; Jerold D. Cummins, Acting Asst. Gen. Counsel; Warren S. Grimes, Joanne L. Levine, and Thomas A. Sheehan, III, Attys., F.T.C., Washington, D. C., for petitioner-defendant F.T.C. Barbara Allen Babcock, Asst. Atty. Gen., Earl J. Silbert, U. S. Atty., David J. Anderson and Jack E. Thornton, Jr., Dept. of Justice, Washington, D. C., for defendant Comptroller General. MEMORANDUM OPINION FLANNERY, District Judge. The court presently has before it consolidated preenforcement and enforcement actions concerning the Federal Trade Commission's orders directing numerous companies to file certain special reports. At issue are the FTC's information-gathering activities with respect to the 1974 Line of Business (LB) report and the Corporate Patterns Report (CPR) survey. The court already has considered various motions to dismiss. Order of Jan. 31, 1977. The FTC and the Comptroller General have moved for summary judgment at this time, while the corporate parties seek partial summary judgment. Oral hearings on these motions were held February 11 and 25, 1977, and the motions are ripe for consideration and decision at this time. The corporate parties challenge the enforcement of the FTC's orders to file the LB and CPR forms on a number of grounds. The court will consider each of these claims in turn. An appropriate order accompanies this memorandum opinion. I. Statutory Authority The corporate parties contend that the FTC lacks the statutory authority to implement the LB and CPR programs. This claim centers on an interpretation of section 6 of the Federal Trade Commission Act, 15 U.S.C. § 46.[1] While the corporate parties admit that section 6 relates to the general 299 power of the Commission to conduct investigations, require special or annual reports, and publish the results of its investigations, they argue that section 6 is not an unfettered grant of authority to conduct any type of investigation or information-gathering project. To the corporate parties, section 6 grants the authority to investigate, so long as the investigation is related to the FTC's enforcement authority, but does not grant the power to conduct statistical reporting programs. In support of this proposition, the corporate parties offer an imaginative interpretation of the legislative history of the Act and relevant judicial decisions. The linchpin of the corporate parties' argument is that the LB and CPR programs are not focused investigations. If not investigations, they contend, then the section 6(b) special report orders do not relate to the Commission's section 6(a) power of investigation and do not relate to the Commission's quasi-judicial powers under section 5 of the Act. Since the FTC admits that the LB and CPR programs are broad-based and not aimed simply at suspected violators, the corporate parties reason that they cannot qualify as legitimate investigations. Instead, these statistical reporting programs are more in the nature of a fishing expedition; the corporate parties charge that without a direct link to the Commission's substantive responsibilities these section 6(b) orders could intrude indiscriminately into the private domain. The corporate parties suggest that the legislative history of the FTC Act supports the view that section 6 was intended only as an aid to section 5 powers. Without exhaustively repeating the arguments of both the corporate parties and the FTC on this question, the court can reject the corporate parties' claim to the extent that it suggests the FTC was intended to be only a quasi-judicial agency with information-gathering powers narrowly limited to its quasi-judicial functions.[2] The corporate parties bottom their argument on a statement by Senator Newlands, made after the enactment of the Act, that the FTC's exercise of its investigatory powers would be limited to those suspected of violating the law.[3] Apart from the problem of personal, post-hoc explanations as legislative history, a fair reading of the legislative history does not support that view.[4] First, the FTC was intended to assume, inter alia, the powers formerly held by the Bureau of Corporations, a research and investigatory agency with no law enforcement powers. H.R.Rep. No.1142, 63d Cong., 2d Sess. 18 (1914) (conference report). Second, while the conferees did indeed rely largely on the Senate bill, they exhibited no intent to cut down the broader powers present in the House bill.[5] Finally, statements made by Senator Newlands himself suggest that the FTC would have vast discretion in determining its special reports needs.[6] In short, the legislative history does not support the corporate parties' claims. The corporate parties next rely on their interpretation of several cases. The corporate parties attempt to distinguish the most important of these cases, United States v. Morton Salt Co., 338 U.S. 632, 70 S. Ct. 357, 94 L. Ed. 401 (1950), on the ground that Morton Salt decided only the question of whether a section 6 special report order could be used in aid of the Commission's section 5 quasi-judicial powers; it did not decide whether a section 6 order can fly "solo." Indeed, the corporate parties correctly 300 state the holding of that case.[7] Yet the proper inference to be drawn from Morton Salt, in this court's opinion, is that section 6 orders can be used both in aid of section 5 responsibilities and in support of general economic reports. The Court rejected an argument made there that section 6 reports "can be required only `in support of general economic surveys and not in aid of enforcement proceedings under Section 5.'"[8] The Court characterized the special report provision as enabling the Commission to elicit "any information" beyond the normal data of an annual report.[9] The corporate parties also cite FTC v. American Tobacco Co., 264 U.S. 298, 44 S. Ct. 336, 68 L. Ed. 696 (1924). There the Supreme Court rejected the FTC's claim that sections 5 and 6 permitted the Commission an unlimited right of access to the tobacco companies' papers and files.[10] Not even the corporate parties claim this early case to be directly applicable to the present circumstances, however; the FTC here does not seek unlimited access. Two lower court rulings also bear on the issue, in the corporate parties' minds. FTC v. Claire Furnace Co., 52 App.D.C. 202, 385 F. 936 (1923), rev'd, 274 U.S. 160, 47 S. Ct. 553, 71 L. Ed. 978 (1927); United States v. St. Regis Paper Co., 181 F. Supp. 862 (S.D.N.Y.), aff'd in part & rev'd in part, 285 F.2d 607 (2d Cir. 1960), aff'd, 368 U.S. 208, 82 S. Ct. 289, 7 L. Ed. 2d 240 (1961). Yet the D.C. Circuit in Claire Furnace considered the question of the FTC's power to investigate in the context of whether "interstate commerce" was shown, and did not consider the issue presented here. The district court in St. Regis did comment on the scope of section 6(b) orders with respect to material not kept in the regular course of business, but its conclusion was endorsed neither by the Second Circuit nor by the Supreme Court. Thus the case relied on by the corporate parties present far from a compelling argument for lack of statutory authority. Having found the corporate parties' interpretation of the legislative history and caselaw unconvincing, the court additionally finds the plain wording of section 6(b) to sustain the statutory authority of the Commission to act with respect to LB and CPR. That section permits the Commission to "require, by general or special orders, . . [companies] to file with the Commission in such form as the Commission may prescribe annual or special . . . reports . .." 15 U.S.C. § 46(b). This express authorization certainly appears to include the special reports sought in the LB and CPR orders. On the basis of this clear wording, Judge Schwartz found no probable merit to the corporate parties' similar claim for the 1973 LB orders.[11] While some limit may exist to the FTC's power to require special reports under section 6(b), that issue does not really arise where, as here, even the corporate parties admit that the programs are at least indirectly connected to the Commission's law enforcement efforts.[12] Nothing in the statute, legislative history, or caselaw supports the corporate parties' alternative claim that section 6 authority may be exercised only in contemplation of specific law enforcement activity.[13] The court thus concludes that the FTC acted within its statutory authority in implementing the LB and CPR special reports program. 301 II. Rulemaking under the APA The corporate parties claim that the LB and CPR programs constitute rulemaking within the meaning of the Administrative Procedure Act (APA) and that the FTC violated the applicable APA provisions concerning rulemaking. This claim presents two separate issues: whether the programs constitute rulemaking, and, if so, whether the FTC complied with the APA rulemaking requirements. The APA defines a "rule" as the whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of any valuations, costs, or accounting, or practices bearing on any of the foregoing. 5 U.S.C. § 551(4). Rulemaking is defined as "agency process for formulating, amending, or repealing a rule." Id. § 551(5). The corporate parties contend that the LB and CPR programs[14] fall within this statutory definition and thus qualify as rulemaking. The APA identifies several components of a rule: it must be of "general or particular applicability"; it must be of "future effect"; and it must be designed to "implement, interpret, or prescribe law or policy". The court first will consider whether the LB and CPR programs implement or prescribe law or policy. The corporate parties contend that the LB and CPR programs implement or prescribe law or policy in two ways. First, as Judge Schwartz found with respect to the 1973 LB orders in granting a preliminary injunction to the corporate parties, the "far-reaching directives . . . effectively prescribe the manner in which business records are to be kept for reporting purposes. . . ." A. O. Smith Corp. v. FTC, 396 F. Supp. 1108, 1123 (D.Del.1975), rev'd on other grounds, 530 F.2d 515 (3d Cir. 1976). Indeed, if the FTC has prescribed accounting methods, it has engaged in rulemaking since the definition of a rule "includes the approval or prescription for the future of . . . valuations, costs, or accounting, or practices bearing on any of the foregoing." 5 U.S.C. § 551(4). The corporate parties suggest that the data sought by the Commission is not available from the books and records of most firms; the internal organization of most businesses does not correspond to the uniform category system envisioned by the LB reports. The court cannot agree that the 1974 LB orders, the CPR orders, or the programs have effectively prescribed accounting methods or practices with respect to business records maintained for reporting purposes. Certainly the FTC has not actually prescribed new accounting methods. Rather, the corporate parties' argument reduces to the contention that the required certification of accuracy forces them to revise their systems of accounts to prevent false certification. It is clear, however, that the programs do not require any company to alter present recordkeeping practices; the Commission in no way prescribes accounting methods, although certain companies may wish voluntarily to alter their procedures. In addition, the FTC has made it clear that certain estimates are permitted on the forms, and this certainly mitigates the stringency of the accuracy certification. Moreover, the corporate parties can hardly claim that the present orders have prescribed accounting methods, since the present orders seek data from years past; the corporate parties in effect argue that they may change accounting practices if these programs are continued in subsequent years. For these reasons the court concludes 302 that the LB and CPR programs do not implement or prescribe law or policy by effectively requiring certain accounting practices.[15] The corporate parties alternatively claim that the programs implement law or policy in their effect on FTC antitrust enforcement goals and, if the data is published, on private investment decisions.[16] The corporate parties have failed to specify concretely how the possible, or even planned, future use of the data generated by LB and CPR give those programs sufficient regulatory impact for the court to conclude that the programs themselves implement law or policy. The corporate parties seek to ascribe to the special reports programs a "regulatory purpose" merely on the basis of the possible future use to which the data might be put. This argument goes too far. If data collected for possible future use by the Commission in implementing its law or policy can itself be considered to implement law or policy, then all types of agency activity, including agency subpoenas, similarly could qualify as rulemaking. The data collection effort does not itself implement law or policy, although the later regulatory steps the Commission might choose to take in partial reliance on the data submitted could do so. The programs cannot fairly be construed as "regulating" the FTC's resource allocation decisions, nor can they be viewed simplistically as vehicles to implement the Commission's section 6(f) publication power. In sum, the corporate parties' contentions of regulatory purpose are far too attenuated to convince the court to decide that the special reports programs are designed to implement or prescribe law or policy. Because of its decision on this issue, the court need not decide whether the LB and CPR programs meet the other two definitional requirements of a rule: generalized or particular applicability and future effect. The court has serious doubts whether the corporate parties correctly apply those standards to the present cases, but such a determination is unnecessary to the conclusion that the programs do not constitute rules under the APA.[17] The court need not rely solely on its own interpretation of what implements or prescribes law or policy to conclude that a special reports program does not constitute rulemaking under section 551. Only one case, other than Judge Schwartz' preliminary decision, has been cited by the parties on the question of whether agency information-gathering through the requirement of special reports constitutes rulemaking. United States v. W. H. Hodges & Co., 533 F.2d 276 (5th Cir. 1976). In Hodges, the Fifth Circuit considered an order by the Secretary of Agriculture directing 38 stockyard marketing agencies to file a special report in the course of an investigation of rates charged by the markets. The Secretary 303 required these reports pursuant to his authority under the Packers and Stockyards Act,[18] a statute that expressly incorporates section 6 of the FTC Act to give the Secretary the authority to order that special reports be filed. In response to the objection that the special reports orders constituted rulemaking under the APA, the Fifth Circuit held: The order at issue here was clearly investigatory in nature, as opposed to an adjudicatory or rule-making process, and hence not subject to the procedures governing rule-making outlined in the APA. Cf. Genuine Parts Co. v. F.T.C., 445 F.2d 1382, 1388 (5th Cir. 1971); K. Davis, Administrative Law Treatise, § 3.01 at 159, n. 1 (1958). 533 F.2d at 278. The corporate parties attempt to distinguish this case on the ground that the special report orders concerned a focused investigation of rate practices and sought information kept in the normal course of business.[19] The corporate parties then reiterate their contention that the LB and CPR programs do not constitute investigations. Yet the court is not convinced that these information-gathering programs conceptually or in legal effect constitute more than investigations despite the large number of corporations ordered to file the special report forms. In addition, the APA itself appears to distinguish the concepts of rulemaking, adjudication, and ancillary matters such as investigations or reports requirements. Section 553 deals with rulemaking requirements, section 554 concerns adjudications, and section 555 is entitled "Ancillary matters." Section 555(c) provides that "requirement of a report . . . or other investigative act or demand may not be issued, made, or enforced except as authorized by law." 5 U.S.C. § 555(c). Although the APA does not explicitly state that rulemaking and reports requirements thus are mutually exclusive, the juxtaposition of these sections makes that a not unreasonable inference. Indeed, the chief House sponsor of the APA, Representative Walter, explained during the APA's consideration that the "bill carefully distinguishes between these three basic types of administrative regulatory powers." 92 Cong.Rec. 5648 (1946). The three basic types of regulatory administrative operations mentioned by Representative Walter included rulemaking, adjudication, and compulsory action. Walter delineated the third category as follows: I refer to the compulsory action of administrative agencies when they issue subpoenas, require records or reports, or undertake mandatory inspections. These functions are investigative in nature. The investigation may be made in connection with their legislative or judicial functions, or it may be made for the purpose of submitting a report to Congress or to refer prosecutions to a grand jury. Whatever the purpose, the administrative arm is given power to require information to be submitted to it. Id. The court is aware that Judge Schwartz reached an opposite decision from that of this court on the conclusions to be drawn from the subdivisions of the APA and the legislative history.[20] The differences of opinion may not be irreconcilable, however, to the extent that Judge Schwartz held only that section 555 does not absolutely preclude a finding that a special reports program could be subject to rulemaking requirements.[21] This court does not conclude that section 555 prohibits such a finding in all cases, only that an inference can be drawn from the subdivisions of the APA and its legislative history that would make 304 a determination that a special reports order constitutes rulemaking doubtful.[22] Finally, the court believes that the FTC's "characterization of its own proceeding is entitled to weight, and that characterization may in turn have relevance in determining the applicability" of the APA rulemaking requirements. ITT v. Local 134, Electrical Workers, 419 U.S. 428, 441, 95 S. Ct. 600, 609, 42 L. Ed. 2d 558 (1975) (applicability of APA adjudication provisions). The corporate parties do not dispute that the FTC has maintained that the APA rulemaking provisions do not apply to its special reports program. The Quarterly Financial Reports Program, the early CPR Program, and the Premerger Notification Program all provide evidence that the Commission has never considered the rulemaking requirements of the APA to apply to a special reports program. Therefore, although an agency's characterization of the applicability of the APA is entitled to no more than "weight" and cannot be used to disguise the true nature of agency action, in this instance the FTC's longstanding interpretation of the APA adds support to the court's conclusion that the LB and CPR programs do not constitute rulemaking. Thus the court concludes that the programs do not implement or prescribe law or policy and do not fit the definition of rule making. The Hodges decision supports this conclusion, as do the subheadings of the APA itself, its legislative history, and the FTC's longstanding interpretation of the applicability of the APA rulemaking provisions. Having so concluded, the court need not and does not consider whether the FTC complied with the APA requirements for rulemaking, 5 U.S.C. § 553. III. Census Act The corporate parties claim that the CPR program[23] violates section 9 of the Census Act, 13 U.S.C. § 9.[24] This contention is based on the assertion that the CPR survey seeks the same information the corporate parties provide to the Bureau of Census for its quinquennial Census of Manufacturers in the form of value of shipments data by establishment and 5-digit Census product code for the year 1972. The FTC concedes that one purpose of the CPR program is to produce individual company data that it can compare to published Census aggregates. A determination of whether the CPR program is unlawful because it violates the confidentiality provisions of section 9 of the Census Act requires analysis both of the 1962 amendment to that Act and of the relevant caselaw. No case before 1962 held that section 9's protection extended beyond the actual Census 305 form, copies of it, or the actual data schedules submitted to Census. In United States v. Bethlehem Steel Corp., 21 F.R.D. 568 (S.D.N.Y.1958), the district court considered whether private steel producers could obtain Census reports of other steel manufacturers from the Department of Commerce. Judge Weinfeld held that the Census Act protected the Department of Commerce from compelled disclosure of the reports.[25] In Federal Trade Commission v. Orton, 175 F. Supp. 77 (S.D.N.Y.1959), the district court held that the FTC could not subpoena certain data schedules submitted by respondent company to the Bureau of Census. In upholding the protection of Census data under section 9, the court noted that the FTC sought "the data not in order to get the facts which underlie the statistics, but rather to get the compiled statistical data in the particular manner in which it was prepared by the respondent. . . ." Id. at 80. Thus neither Bethlehem Steel nor Orton presented the question at issue here, since in the former case the actual reports were sought while in the latter case the FTC sought the "actual schedules submitted to the Bureau." Id. at 78. The Supreme Court considered St. Regis Paper Co. v. United States, 368 U.S. 208, 82 S. Ct. 289, 7 L. Ed. 2d 240 (1961), to resolve a conflict between the circuits on the question of whether the Census Act protected a company's retained file copy of the report sent to Census. The Seventh Circuit decided that the retained file copies merited section 9 protection,[26] while the Second Circuit determined that the file copies did not so qualify.[27] The Supreme Court affirmed the Second Circuit, holding that section 9 did not protect a company's retained file copies from compelled disclosure. 368 U.S. at 218-20, 82 S. Ct. 289. Soon thereafter, in response to the St. Regis decision, Congress amended section 9 of the Census Act to add the following language: No department, bureau, agency, officer, or employee of the Government, except the Secretary in carrying out the purposes of this title, shall require, for any reason, copies of census reports which have been retained by any such establishment or individual. Copies of census reports which have been so retained shall be immune from legal process, and shall not, without the consent of the individual or establishment concerned, be admitted as evidence or used for any purpose in any action, suit, or other judicial or administrative proceeding. 13 U.S.C. § 9(a). There can be no doubt that this amendment was intended to overrule legislatively the Supreme Court's holding in St. Regis. The key inquiry before this court, however, is whether the amendment was intended to protect more than the reports themselves or copies of them. In the court's mind, the legislative history of the 1962 amendment provides persuasive evidence that Congress did not intend to prohibit such programs as the CPR Survey in enacting the amendment. The House and Senate Reports refer consistently to "copies" of Census Reports.[28] A letter from the Secretary of Commerce, included in both reports, assured the Congress that the amendment would not impair the information-gathering authority of regulatory agencies as it existed prior to the St. 306 Regis decision.[29] The Secretary explained further: Furthermore, the ability of a regulatory agency to formulate inquiries, even ones identical with those asked by Census, would not be affected. The only restriction would be that the inquiry would not demand an answer by definition identical with that furnished the Census Bureau in another context and for another purpose. Senate Report at 4, House Report at 7, U.S.Code Cong. & Admin.News 1962, pp. 3188, 3191. These two sentences go to the heart of the matter, for while the FTC in the CPR program has asked questions that may be answered with Census data, it has not insisted that companies supply the Census data itself. To the extent that these two sentences from the Secretary's letter can be construed harmoniously, this distinction would appear to be significant.[30] Perhaps even more significant is the fact that the original House bill would have protected "information, reports, and other data" instead of merely "copies". H. 10569, 82d Cong., 2d Sess. (1962). The limiting of the scope of the amendment was recommended by the Secretary of Commerce to "avoid any possibility that [the amendment] might be construed to affect documents other than file copies of census reports . .." House Report, supra, at 5. In sum, the legislative history surrounding the passage of the 1962 amendment to section 9 provides impressive evidence that Congress did not intend to create blanket protection for all materials arguably related to the Census Reports. The corporate parties' primary remaining contention, since the plain words of the amendment and the legislative history do not support their interpretation, is that the FTC should not be permitted to attain indirectly what it could not attain directly, or else the confidentiality protections anticipated by section 9 would be emasculated. Indeed, there is much to be said for the policies of confidentiality underlying the enactment of section 9. The protections of section 9 undoubtedly play an important role in ensuring the completeness and accuracy of the reports submitted to Census.[31] Yet the court cannot simply rely solely on this policy consideration in determining this issue, because it competes against another, equally legitimate policy consideration that calls for a narrower interpretation of section 9 protections. The court also must consider an agency's legitimate needs for certain data, including data arguably similar to that filed in Census Reports, in order to perform its statutory duties. Value of shipments data, for example, can be of great importance in antitrust analysis and prosecution.[32] Thus the court must balance the corporate parties' expectation of confidentiality with the FTC's legitimate information-gathering needs and cannot give maximum potential expression to policy considerations of confidentiality. Any confidentiality privilege granted by section 9, therefore, is but a qualified privilege that must be weighed in conjunction with the FTC's right to collect relevant data. The court is convinced, moreover, that the Census Act itself, both before and after the 1962 amendment, properly discerned and balanced the competing policy considerations. Section 132 of the Act, 13 U.S.C. § 132, provides that 307 nothing in this title shall be deemed to revoke or impair the authority of any other Federal agency with respect to the collection or release of information. In addition, section 8 of the Act, 13 U.S.C. § 8, identifies certain circumstances in which the Secretary of Commerce may disclose Census data. The 1962 amendment protected "copies" rather than "information", and the legislative history makes clear that the amendment was not designed to impair an agency's information-gathering authority. House Report, supra, at 7. For these reasons, the court finds the corporate parties' claims concerning the Census Act to be unsupported by the wording of the Act itself, the relevant caselaw, the circumstances surrounding the 1962 amendment, or the policy considerations underlying the Act. IV. Federal Reports Act The corporate parties base a number of challenges to the LB and CPR programs on the Comptroller General's actions pursuant to his clearance review function over independent regulatory agencies' information-gathering activities under the Federal Reports Act, 44 U.S.C. §§ 3501-3512. Several issues arise from these claims: whether judicial review of the Comptroller's actions is unavailable because the matter is committed to agency discretion; whether the Comptroller applied the correct legal standard in performing his function under the Act with respect to the LB and CPR programs; and whether the Comptroller's clearance of these forms was in any case arbitrary, capricious, or an abuse of his discretion. For the reasons enumerated below, the court does not believe that the corporate parties' claims form a basis for invalidating these programs. A. Availability of Judicial Review This court previously has determined that judicial review of the Comptroller's actions under the Federal Reports Act is not barred by a Congressional intent to preclude review or by the availability of an adequate alternative remedy in court.[33] One further claim, raised by the FTC but not the Comptroller, suggests that the Comptroller's determinations under the Act are "committed to agency discretion by law." 5 U.S.C. § 701(a)(2). This exception to the general rule of reviewability, if applicable, would preclude judicial review in this instance. The FTC relies primarily on two cases finding that the Comptroller's actions under the Act are committed to his discretion. In General Electric Co. v. FTC, 411 F. Supp. 1004, 1006 (N.D.N.Y.1976), the district court found the Comptroller's decision committed to his discretion because "the statute characterizes his response to the agency as `advice.'" Id. at 1006. Similarly, in Westinghouse Electric Corp. v. Federal Trade Commission, 1976-1 Trade Cas. ¶ 60,871 (S.D. Ohio 1976), the court found the Comptroller's decision committed to his discretion "because the statute characterizes the Comptroller General's response to the agency as `advice.'" Id. at 68,816. The FTC also asserts that no case exists holding the Comptroller's determinations under the Act to be reviewable. The court cannot agree with the conclusion of the FTC and the two district courts.[34] The committed to agency discretion exception to APA reviewability is a "very narrow" one. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971). The exception should be invoked only where a particular statute is drawn in such broad terms that there is in effect no law to apply in a given case. Id., citing S.Rep.No.752, 79th Cong., 1st Sess. 26 (1945). The Federal Reports Act, however, clearly sets forth two criteria under which the Comptroller is to 308 make his review: avoiding unnecessary duplication and minimizing compliance burden.[35] The fact that the statute also characterizes the Comptroller's response to the agency as "advice" does not diminish the standards set by the Act for his review.[36] For these reasons the court concludes, at least as to whether the Comptroller considered duplication and burden, that there is law to apply and that judicial review of the Comptroller's actions is not wholly barred. B. Appropriateness Inquiry The corporate parties contend that the Comptroller applied the incorrect legal standard in considering the LB and CPR forms insofar as he did not make a separate, substantive evaluation of the proposed forms' "appropriateness." This claim stems from the corporate parties' interpretation of certain language of the Act that mentions appropriateness: While the Comptroller General shall determine the availability from other Federal sources of the information sought and the appropriateness of the forms for the collection of such information, the independent regulatory agency shall make the final determination as to the necessity of the information in carrying out its statutory responsibilities and whether to collect such information. If no advice is received from the Comptroller General within forty-five days, the independent regulatory agency may immediately proceed to obtain such information. 44 U.S.C. § 3512(d) (emphasis supplied). The corporate parties suggest that appropriateness be construed in the sense of suitability for intended purpose, while the FTC and the Comptroller argue that appropriateness is merely a short-hand reference to the Comptroller's burden inquiry. The Comptroller concedes that he did not engage in a wide-ranging, substantive inquiry into the proposed forms' appropriateness. The court is not convinced that Congress intended to create an entirely new substantive review criterion in this reference to appropriateness. First, the term appears only once in the Act, in a phrase qualifying the reservation of the determination of necessity to the agency. Second, in the sections of the Act that appear designed to detail the Comptroller's review criteria, only the burden and duplication standards are mentioned. See 44 U.S.C. §§ 3512(a), (b). Finally, the court believes that any substantive appropriateness inquiry by the Comptroller might well impermissibly compromise the express statutory provision reserving determination of need for the information to the agency. Id. § 3512(d). Rather, the court interprets the reference to appropriateness, as does the Comptroller himself,[37] as a short-hand reference to the burden inquiry. The legislative history contains no indication that an independent, substantive appropriateness inquiry was contemplated. E. g., 119 Cong.Rec. 24085 (1973) (remarks of Senator Bentsen). The court's conclusion thus seems inevitable from a fair reading of the Act as a whole. 309 C. Duplication The corporate parties suggest that the Comptroller's treatment of the question of unnecessary duplication was insufficient to fulfill his responsibilities under the Act.[38] This claim relates to the fact that the Bureau of Census collects certain of the same data sought in the LB and CPR programs and publishes the data in aggregate form. The corporate parties admit, as they must, however, that the FTC is unable to obtain from Census the individual company data it desires because of the protections accorded by the Census Act.[39] Therefore, the court can hardly accuse the Comptroller of acting arbitrarily or capriciously in not disapproving the forms on the ground that they unnecessarily duplicate the effort of the Census Bureau. The individual company data, for which the FTC expresses a need that the Comptroller cannot challenge, is simply not available to the FTC; in view of the requirements of the Census Act, any duplication that has occurred could hardly be termed unnecessary by the Comptroller, and his approval should not be invalidated on that ground.[40] D. Burden The corporate parties raise several complaints with respect to the Comptroller's handling of the question of minimum burden. First, the corporate parties contend that an adequate burden assessment cannot be made in the absence of a concomitant assessment of the meaningfulness of the data to be collected.[41] The court cannot find, however, that the Act requires by implication such a detailed cost-benefit analysis. The plain words of the Act itself, the 45-day limitation on the Comptroller's consideration of proposed forms, and the reservation of need determination to the agency all point to a more limited interpretation of the Comptroller's responsibilities with respect to assessing burden.[42] Second, the corporate parties argue that the Comptroller failed to obtain a valid estimate of compliance burden for the CPR form. The court finds no merit to this claim, which rests on the premise that the FTC expected the companies to use their Census Reports in completing the form. The court has rejected the corporate parties' Census Act claim, § III, supra, and in any case the FTC's burden estimates were based on the availability of underlying data rather than the Census Reports themselves. Third, the corporate parties contend that the Comptroller could not rationally have approved the forms and at the same time have voiced such major concerns about the problem of burden. The LB clearance letter terms burden problems as "still incompletely resolved." The CPR program similarly was the subject of numerous comments alleging that the compliance burden 310 was "grossly underestimated." The court rejects the corporate parties' final avenue of attack on burden. The Act does not require a Comptroller's finding of no burden; the Comptroller weighed the evidence on both sides and determined to clear the forms. The Comptroller noted that improvements in the LB form lowered the compliance burden from that of the 1973 form, and it is clear that the Comptroller considered and rejected claims of undue burden in the CPR program. E. GAO Regulations The corporate parties also contend that the clearance of the CPR form was invalid for failure to comply with the General Accounting Office Regulations promulgated to implement the Federal Reports Act, 4 C.F.R. §§ 10.1-10.12. The corporate parties charge defects in required FTC solicitation of views of persons to be affected,[43] and in the failure of the FTC's supporting statement submitted to GAO to detail the necessity for the program,[44] the major problems as to which agreement could not be reached in consultations outside the agency,[45] and the extent to which comments received from persons outside the agency are reflected in the plan.[46] The court considers it unnecessary to determine whether the alleged violations of these regulations in fact occurred. The regulations in question concern intra-governmental relations and are essentially intended to facilitate GAO review and clearance. In the court's mind, the regulations do not confer rights on private parties and do not preclude the GAO from waiving objections to noncompliance. Moreover, the regulations contain their own remedy for noncompliance: suspension or discontinuance of GAO review and a tolling of the 45-day period upon a finding that the deficiency "precludes complete and effective review." 4 C.F.R. § 10.9(a). The Supreme Court considered a similar issue in American Farm Lines v. Black Ball Freight Service, 397 U.S. 532, 90 S. Ct. 1288, 25 L. Ed. 2d 547 (1970). There the ICC had granted a motor carrier a temporary operating authority. This action was challenged by protesting carriers on the ground that the ICC did not comply with its own regulations concerning processing of such temporary applications. Noting that the ICC should be given a "measure of discretion in administering its own procedural rules," the Court found that the regulations were designed for the purpose of providing the ICC with sufficient information to make a decision rather than to confer important procedural benefits on third parties. Id. at 538, 90 S.Ct. at 1292. The Court reaffirmed the general principle that an agency may relax procedural rules adopted for the orderly transaction of business and stated that judicial review of such action was available only upon a showing of "substantial prejudice." Id. at 539, 90 S. Ct. 173. The court finds this reasoning persuasive in this case. The corporate parties have demonstrated neither substantial prejudice nor that the regulations here were intended to confer important procedural rights on third parties.[47] The court believes that the GAO should be given some latitude in determining what constitutes adequate compliance in administering the regulations under the Act. In view of the fact that the court can find no substantial prejudice flowing from the alleged violation of the particular regulations at issue here,[48] the 311 CPR program should not be invalidated on this ground. F. Experimental Clearance The corporate parties, finally, contend that the 1974 LB form was cleared by GAO on an essentially "experimental" basis. The GAO clearance letter noted, inter alia, that the FTC had made "constructive efforts" to minimize burden, and that "a rather long test period of data collection and analysis will be required to fully reconcile FTC's data needs with minimum burden." These comments, the corporate parties suggest, taint the Comptroller's clearance on the burden question by introducing irrelevant factors and by failing to determine that the form assures a minimum burden; the period of experimentation contemplated, they claim, required the GAO to disapprove rather than approve the form. The court does not so construe the Comptroller's comments about the FTC's efforts to reduce burden. The court believes that the Comptroller did make the requisite burden determination; there exists in such programs an inherent tension between burden on the one hand and uniformity, accuracy, and value on the other. The Comptroller's statements reflect this awareness and essentially suggest that further efforts to minimize burden will depend on the FTC's definition of its data needs. The clearance, rather than experimental, was unconditional; the Comptroller merely offered his advice and observations on the continued implementation of the LB program in terms of a minimum burden consistent with the FTC's need for information. Indeed, the Comptroller recognized that the FTC had made strides in reducing burden in the 1974 form, although the Comptroller had approved the presumably more burdensome 1973 form too. The court therefore finds no merit in any of the corporate parties' objections to the Comptroller's actions pursuant to the Federal Reports Act with respect to the LB and CPR programs. It thus refuses to invalidate either program on a ground stemming from the Act. The court does not find the Comptroller's actions in clearing the LB and CPR forms to have been arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. V. Publication of Trade Secrets The corporate parties assert that the CPR program must be invalidated because it envisions publication of "trade secrets" in violation of section 6(f) of the FTC Act, 15 U.S.C. § 46(f). The resolution of the Commission authorizing the CPR program would permit public disclosure of individual company data as early as 1978; the corporate parties argue that data supplied for the CPR Survey, including costs, sales, assets, value of shipments, and inter-corporate relationships, constitutes trade secrets within the meaning of section 6(f). Section 6(f) provides: The Commission shall also have the power [t]o make public from time to time such portions of the information obtained by it hereunder, except trade secrets and names of customers, as it shall deem expedient in the public interest; and to make annual and special reports to Congress and to submit therewith recommendations for additional legislation; and to provide for the publication of its reports and decisions in such form and manner as may be best adapted for public information and use. 15 U.S.C. § 46(f) (emphasis supplied). Although the corporate parties claim that the intent to publish these trade secrets requires the court to invalidate the entire CPR program, the court on this ground at most could prohibit the FTC from publishing this data, not from collecting it.[49] Even if the court sustained the corporate parties' contention in full, that ruling would have no effect on the Commission's right to collect and the corporate parties' obligation to provide the CPR data. 312 The court finds it unnecessary to reach the merits of the corporate parties' claim that the CPR data constitutes protected trade secrets under section 6(f) and that its publication is thereby prohibited. The FTC has made no final decision about whether to publish individual company CPR data; the corporate parties point to the Commission resolution authorizing the CPR program as evidence of the determination to publish. That resolution, though, simply states: "It is further resolved that no information for individual companies will be published before January 1, 1978." Resolution Authorizing and Directing the Collection of Economic Reports, July 29, 1975. The court cannot ignore, however, that publication of individual company data is an option the FTC deliberately has left open and apparently intends to employ at some later date. Nevertheless, it seems premature and perhaps unnecessary for the court to determine whether CPR data is protectible as trade secrets before the Commission has made a decision to publish that data. Even if the FTC has a present intention to publish the data at some unspecified later date, time or events might modify or reverse that intent. The FTC itself will be in a position to rule on specific requests for confidential treatment[50] only after the information is submitted to the agency. See Federal Trade Commission v. Texaco, Inc., 555 F.2d 862 at 873-874 (D.C. Cir. 1977) (en banc). Perhaps the corporate parties will be able to convince the Commission that confidential treatment of their data is necessary after they submit the CPR form and thus are able to pinpoint more precisely the potential harm.[51] In order to protect the corporate parties from any precipitous action on the part of the FTC, the court will require, as did the Court of Appeals in Texaco, supra at 874-875, that the Commission give ten days' notice to any company of a decision to publish that company's individual data before actually doing so. In this way, the court does not preclude opportunity for a later judicial inquiry into the trade secrets claim, if necessary, in a setting where the inquiry and dispute would be framed concretely.[52] Therefore the court does not consider the trade secrets claim to preclude FTC collection of the CPR data and believes any claim concerning restraining publication of individual company data to be premature in the absence of a final decision to publish that data. VI. Adjudicative Respondents' Claims Nine of the corporate parties currently are engaged in adjudicative proceedings before the Commission.[53] They suggest that the LB and CPR programs pose particular hazards to the protection of their legitimate procedural rights in the adjudicative proceeding. Specifically, the nine fear that the information received from these companies in the LB and CPR programs would achieve significant discovery not authorized by the Administrative Law Judge in those proceedings, thus violating the FTC's own rules of procedure, the equality requirement of the APA, and due process of law. As in the corporate parties' trade secret claim, it is necessary for the court to 313 identify the consequences that would flow from a finding that the nine companies' contention is meritorious. First, the potential jeopardy of procedural rights in the adjudicative proceedings cannot impinge upon the FTC's right to collect the information in question, only upon the use to which that information might be put. Any other conclusion would suggest a blanket immunity from special reports orders for any company engaged in an adjudicative proceeding before the Commission. Such a determination would unreasonably restrict the FTC's legitimate information-gathering activities. Second, the corporate parties' claim, if valid, does not require sequestration of the LB and CPR data from complaint counsel in the Exxon and Kellogg proceedings. Unsurprisingly, there has been no suggestion of bad faith or that the LB and CPR programs have been developed for the partial purpose of providing indirect discovery for FTC complaint counsel in these proceedings. There has been no evidence to suggest that present complaint counsel intend or even wish to use the LB and CPR data in these adjudications.[54] The court concludes that a sequestration order therefore would be premature at this time; the nine corporate parties have not demonstrated an intent by complaint counsel to use the LB and CPR data that could trigger the relevant inquiry. More important, the court is reluctant to enter the discovery phases of the Exxon and Kellogg proceedings. The respondents in those proceedings can raise before the Administrative Law Judge their contentions as to use of LB and CPR data should that issue in fact arise. The ALJs are intimately familiar with those cases and the scope of discovery authorized. Should violations of the discovery orders or of the FTC's procedural rules be alleged, the ALJs would be in the best position to determine that claim. If data obtained from the LB and CPR reports is offered in evidence in those cases, the corporate parties will have the opportunity to object to the introduction of such evidence. And if the corporate parties suspect that LB and CPR data has provided leads for the development of evidence offered, they again will have the opportunity to object to the tainted evidence before the ALJs. See Atlantic Richfield Co. v. Federal Trade Commission, 546 F.2d 646 at 651 (5th Cir. 1977). That the ALJ in Exxon has firm control of discovery matters is evidenced by his discovery order of November 11, 1976, limiting the discovery to be permitted complaint counsel. The court thus will not entertain the nine companies' arguments before the ALJs have a chance to rule on these issues, should such a ruling ever become necessary.[55] Moreover, the corporate parties could seek additional review of any alleged improper use of the LB and CPR data before the Commission itself. And if a cease and desist order is entered, these respondents would be entitled to judicial review. 15 U.S.C. § 45(c). In view of this well-defined avenue of review ALJ to Commission to court for claims of improper discovery, and in light of the fact that the threatened harms may never occur, the court declines to weigh the merits of the corporate parties' procedural hazards claim at this time on the ground that it is raised prematurely. VII. Relevance and Burden The corporate parties have challenged the FTC's use of compulsory process in the LB and CPR orders on grounds of lack of reasonable relevance and undue burden.[56] The court considers these claims in a 314 somewhat unusual posture; only the FTC, and not the corporate parties, has moved for summary judgment on this issue. The corporate parties contend that there exist genuine issues of material fact making the entry of summary judgment on this question premature as to either side. They suggest further discovery and evidentiary procedures before the court rules on relevance and burden. The FTC, of course, suggests that the question is ripe for disposition at this time. A. Reasonable Relevance The FTC's investigation and special reports orders must meet a standard of reasonable relevance: the information sought must be "reasonably relevant" to the general purposes of the investigation. United States v. Morton Salt Co., 338 U.S. 632, 652, 70 S. Ct. 357, 94 L. Ed. 401 (1950); Federal Trade Commission v. Texaco, Inc., 555 F.2d 862 at 873-874 & n.23 (D.C.Cir. 1977) (en banc). The corporate parties make only an indirect challenge to relevance in this instance. In the LB program, the corporate parties suggest a lack of reasonable relationship between the purposes of the program and the data sought to be collected, while in the CPR program the corporate parties stress the unsuitability of Census-type data for the FTC's purpose. It appears, however, that the corporate parties characterize these arguments as relating to the undue burden question.[57] Therefore, the court similarly will consider the arguments in the context of the undue burden inquiry. Thus the corporate parties have not pointed out, and the court cannot identify, any direct relevance objection to the LB and CPR orders. It seems clear to the court that the orders are reasonably relevant to the general purposes of the LB and CPR programs: collection of financial information from certain large corporations. It is further clear that the court should interpret broadly the standard of reasonable relevance. See FTC v. Texaco, supra, at 874-875 (and cases cited therein). B. Undue Burden The corporate parties also argue against enforcement of the FTC's compulsory process on the ground that the compliance burden is undue for the LB and CPR orders, making those orders unreasonable. Because the factual circumstances differ between the LB and CPR programs, the court will consider them separately. (1) LB Program: The corporate parties suggest that the burden of complying with the LB orders would be undue for several reasons. The first of these reasons stems from the alleged lack of reasonable relationship between the stated purposes of the LB program and the data sought to be collected. The corporate parties' theory is that the absolute costs of compliance must be weighed against the suitability of the information sought for the stated purposes of the inquiry.[58] Identifying the Commission's purpose in the LB program as the development of "good market performance data" for antitrust and resource allocation purposes, the corporate parties suggest that the LB data is entirely unsuited for these purposes because of four deficiencies: (1) individual company LB data and published LB data aggregates would be noncomparable; (2) the LB aggregates to be published would not bear any reasonable relationship 315 to economic data; (3) the LB aggregates to be published would not bear any reasonable relationship to market data; and (4) the LB aggregates to be published would be unreliable because of contamination caused by arbitrary and improper assignment to LB categories on a primary activity basis. The court disagrees with the corporate parties that such a wide-ranging inquiry into suitability is required in an undue burden challenge to the FTC's use of compulsory process.[59] The corporate parties do not go so far as to allege that the data to be collected is useless, and the data certainly appears to have some utility. The court is of the opinion that the corporate parties' argument must be limited to a claim of undue burden in the sense of cost of compliance when, as here, "the agency inquiry is pursuant to a lawful purpose and the requested documents are relevant to that purpose." FTC v. Texaco, supra, at 882. The corporate parties also hint that the cost of compliance with the LB program would be staggering. They contend that the program would require many companies to develop new accounting and reporting systems to generate and retrieve the data. At oral hearing, counsel for the corporate parties estimated the cost of compliance for some companies at "millions" of dollars. The FTC, on the other hand, has estimated the average compliance cost for the 1974 form to be $24,000, with a range from under $10,000 for some companies to $75,000-$100,000 for certain large conglomerates. The FTC asserts that company forecasts are inflated in light of the fact that certain estimates are permitted on the form; the FTC's own figures assume use of such estimates. The court has some doubts that the corporate parties will show sufficient burden to justify this court's refusal to enforce the LB orders. Common sense suggests compliance estimates of "millions" of dollars to be inflated. Since the LB orders are directed at many of the largest companies in this country, moreover, the corporate parties face an uphill battle showing that compliance "threatens to unduly disrupt or seriously hinder normal operations of a business." FTC v. Texaco, supra, at 882. Many companies already have filed the LB form. Nevertheless, the record before the court is not sufficiently complete at this time to permit the court to resolve this question now.[60] Therefore the court will permit the corporate parties to submit additional affidavits on the issue of cost of compliance and permit the FTC to submit counter-affidavits.[61] In the court's view, no live testimony will be necessary at this time. Therefore the court will defer a decision on the corporate parties' cost of compliance challenge to the LB orders. (2) CPR Program: The corporate parties have not elucidated as precisely their challenge to the CPR program on the ground of undue burden.[62] They do charge that the Census-type data that the CPR program would collect is unsuited for any purpose other than publishing aggregates. To the extent that this contention includes *316 the further claim that the compliance burden thus would be undue, the court finds the issue directly analogous to that discussed with respect to the LB program, supra. No sophisticated suitability analysis is required to determine the undue burden issue. On the question of cost of compliance, the record again is somewhat incomplete. No affidavits were submitted to this court, although the record contains affidavits submitted to the FTC, the district court in Delaware, and the district court in the Southern District of New York. The corporate parties clearly do not claim as great a compliance burden for the CPR form as they do for the LB form, although they do contend that FTC estimates of cost of compliance are based on the use of Census data. While the court again considers it unlikely, on the basis of the evidence presently in the record, that the corporate parties will be able to make a sufficient showing of undue burden, it will permit them the opportunity to do so through submission of no more than five affidavits on the issue of compliance cost. The FTC will be permitted to submit counter-affidavits. Accordingly, the only issue left to be resolved in the corporate parties' challenge to the Commission's use of compulsory process in the LB and CPR orders is whether the cost of compliance makes enforcement of the orders unreasonable because of undue burden. The court finds no genuine issues of material fact with respect to other claims of the corporate parties and finds the Commission's position correct as a matter of law. VIII. Arbitrary and Capricious Issues The corporate parties contend that the adoption and implementation of the LB and CPR programs by the FTC was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with the dictates of 5 U.S.C. § 706(2). The FTC has moved for summary judgment on the arbitrary and capricious issues, while the corporate parties believe these questions unripe for disposition because material factual issues remain. A threshold question arises. The corporate parties have argued throughout that the LB and CPR programs constitute rulemaking. If that were true, even the FTC would concede that its actions constituted "agency action" within the meaning of section 706(2) and thus were subject to review under that section. See 5 U.S.C. §§ 701(b)(2), 551(13). The court has rejected the corporate parties' rulemaking claim, however, and the question is presented whether the FTC's action constitutes "agency action" under section 706(2). Although the court has been the beneficiary of hundreds of pages of legal memoranda in these actions, this narrow legal question has not been specifically addressed. The court believes that it could benefit from short memoranda on this question before deciding the FTC's motion for summary judgment on the arbitrary and capricious issues. The memoranda should not exceed ten pages in length and will be submitted simultaneously by both sides. No responses will be permitted, and nor oral argument is necessary. The court therefore will defer consideration of the FTC's motion as to these issues until it receives and considers the supplemental memoranda on the applicability of section 706(2) in light of this court's ruling on the rulemaking claim. NOTES [1] Section 6 provides, in relevant part: The Commission shall also have power (a) To gather and compile information concerning, and to investigate from time to time the organization, business conduct, practices, and management of any person, partnership, or corporation engaged in or whose business affects commerce, excepting banks and common carriers subject to the Act to regulate commerce, and its relation to other persons, partnerships, and corporations. (b) To require, by general or special orders, persons, partnerships, and corporations, engaged in or whose business affects commerce, excepting banks and common carriers subject to the Act to regulate commerce, or any class of them, or any of them, respectively, to file with the Commission in such form as the Commission may prescribe annual or special, or both annual and special, reports or answers in writing to specific questions, furnishing to the Commission such information as it may require as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective persons, partnerships, and corporations filing such reports or answers in writing. Such reports and answers shall be made under oath, or otherwise, as the Commission may prescribe, and shall be filed with the Commission within such reasonable period as the Commission may prescribe, unless additional time be granted in any case by the Commission. [2] This argument is based, in part, on the claim of ascendancy of the Senate bill over the House bill in the final enactment of the Act. [3] Newlands, The Federal Trade Commission Bill, Am.Rev. of Reviews 477, 479-80 (Oct. 1974). Senator Newlands also made a similar statement on the floor, but there is a question whether he later retracted that statement. 51 Cong.Rec. 11110 (1914). [4] See generally Handler, Constitutionality of Investigations by the Federal Trade Commission, 28 Colum.L.Rev. 708 (1928). [5] Id. at 732. [6] E. g., 51 Cong.Rec.11182 (1914). [7] 338 U.S. at 649, 70 S.Ct. at 367. [8] Id. [9] Id. at 650, 70 S.Ct. at 367. [10] 264 U.S. at 305-07, 44 S. Ct. 336. [11] A. O. Smith Corp. v. FTC, 396 F. Supp. 1108, 1120-21 (D.Del.1975), rev'd on other grounds, 530 F.2d 515 (3d Cir. 1976). [12] The Commission states its hope to use LB data to focus its law enforcement efforts more effectively, and to use CPR data to provide a data base to be used by the FTC in formulating overall enforcement policy and in investigating and proceeding against particular law violations. [13] This argument derives, no doubt, from the corporate parties' belief that the LB and CPR programs are merely statistical reporting programs, not focused on ascertainment of possible violations of law. This view is not wholly justified. See note 12 supra. [14] The corporate parties have not been entirely clear about which aspects of the two programs they consider to be "agency statement" under the APA. In their papers, the corporate parties appear to characterize the whole programs as the "statement". At oral hearing on this question, counsel for the corporate parties defined the relevant "statement" as "all of the FTC's minutes, resolutions, and statements, which in combination" reflect the two programs. [15] The corporate parties also argue that the programs constitute rulemaking because the FTC will prescribe valuations and costs for the LB program. To the extent such valuations or costs will be prescribed by the FTC staff, they will be for internal purposes and will not impose obligations on the companies. Thus such valuations do not meet the definition of a rule under 5 U.S.C. § 551(4). [16] The corporate parties have described this claim variously during the pendency of this action. In their LB partial summary judgment motion, the corporate parties focused on the "regulatory resource allocation purposes", asserting that the programs seek to regulate the Commission's own resource allocation and, through publication, investment decisionmaking. This the corporate parties term "regulation through publicity." In their reply to their motion the corporate parties stressed private sector reallocation of resources by investment decisions and the Commission's design to restructure industries singled out by the data for antitrust enforcement. At oral hearing, counsel for the corporate parties broadly asserted that the programs are designed to implement section 6(f) of the FTC Act, which permits the FTC to publish certain information it gathers, and further stated that the programs are designed to implement enforcement policies. At a later point, counsel pointed to the "composite effect" of the purposes to which the data might be put as evidence that the programs prescribe law or policy. [17] For the same reasons the court does not consider the FTC's claim that, even if the programs are rules, they fall within the section 553 exception for "general statements of policy." [18] 7 U.S.C. § 222. [19] The FTC contends, as to the latter point, that the respondents in Hodges claimed that the material sought was not available in the ordinary course of business. The Fifth Circuit did not answer this question. [20] A. O. Smith Corp. v. FTC, 396 F. Supp. 1125, 1133 (D.Del.1975), rev'd on other grounds, 530 F.2d 515 (3d Cir. 1976). [21] Id. ("The Court cannot hold that Congress intended in Section 555 to obviate the applicability of all other procedural provisions of the APA."). [22] The House Report accompanying the APA noted that section 555 prescribed the rights of private parties in miscellaneous respects that might be "incidental to rulemaking, adjudication, or the exercise of any other agency authority." H.R.Rep.No.1980, 79th Cong., 2d Sess. 1206 (1946), U.S.Code Cong.Serv. 1946, pp. 1195, 1206 (emphasis supplied). [23] The corporate parties' Census Act claims also encompass the LB program to the extent that the LB form seeks value of shipments data by Census definitions. [24] Section 9 provides, in relevant part: (a) Neither the Secretary, nor any other officer or employee of the Department of Commerce or bureau or agency thereof, may, except as provided in section 8 of this title (1) use the information furnished under the provisions of this title for any purpose other than the statistical purposes for which it is supplied; or (2) make any publication whereby the data furnished by any particular establishment or individual under this title can be identified; or (3) permit anyone other than the sworn officers and employees of the Department or bureau or agency thereof to examine the individual reports. No department, bureau, agency, officer, or employee of the Government, except the Secretary in carrying out the purposes of this title, shall require, for any reason, copies of census reports which have been retained by any such establishment or individual. Copies of census reports which have been so retained shall be immune from legal process, and shall not, without the consent of the individual or establishment concerned, be admitted as evidence or used for any purpose in any action, suit, or other judicial or administrative proceeding. [25] The corporate parties argue that Judge Weinfeld's use of the term "information" instead of "report" at certain points in the opinion demonstrates that Bethlehem Steel fairly can be read for the proposition that not only the report but the information contained therein is protected by section 9. To the extent that Judge Weinfeld intended "information" to mean more than a reference to the reports themselves, that issue was not before the court and statements thereon were just dicta. [26] FTC v. Dilger, 276 F.2d 739 (7th Cir.), cert. denied, 364 U.S. 882, 81 S. Ct. 171, 5 L. Ed. 2d 104 (1960). [27] United States v. St. Regis Paper Co., 285 F.2d 607 (2d Cir. 1960), aff'd, 368 U.S. 208, 82 S. Ct. 289, 7 L. Ed. 2d 240 (1961). [28] S.Rep.No.2218, 87th Cong., 2d Sess. (1962); H.R.Rep.No.2437, 87th Cong., 2d Sess. (1962), U.S.Code Cong. & Admin.News 1962, p. 3188. [29] Senate Report, supra, at 4; House Report, supra, at 7. The court already has indicated that it interprets the state of the law prior to St. Regis differently than the corporate parties. [30] See e. g., Brief for the United States, St. Regis Paper Co. v. United States, 368 U.S. 208, 82 S. Ct. 289, 7 L. Ed. 2d 240 (1961), at 30-31. [31] See United States v. IBM, 1975-2 Trade Cas. ¶ 60,383 (S.D.N.Y.1975); FTC v. Orton, 175 F. Supp. 77 (S.D.N.Y.1959); United States v. Bethlehem Steel Corp., 21 F.R.D. 568 (S.D.N.Y. 1958). See also St. Regis Paper Co. v. United States, 368 U.S. 208, 228-29, 82 S. Ct. 289, 7 L. Ed. 2d 240 (1961) (Black, J., dissenting). [32] See Affidavit of Frederic M. Scherer, Director, Bureau of Economics, FTC, February 18, 1976, FTC Exhibit X; Affidavit of Michael L. Glassman, Assistant Director for Economic Evidence, Bureau of Economics, FTC, February 18, 1976, FTC Exhibit Y; Affidavit of Thomas E. Kauper, Assistant Attorney General, Antitrust Division, Department of Justice, February 19, 1976, FTC Exhibit DD. [33] Memorandum Opinion of Jan. 31, 1977, at 22-24. [34] The court should note that in both Westing-house and General Electric the courts made this determination in one sentence without extensive analysis. In both cases, the courts decided to transfer the action; the comments on the Federal Reports Act were not critical to that decision. [35] 44 U.S.C. § 3512(b) provides: In carrying out the policy of this section, the Comptroller General shall review all existing information gathering practices of independent regulatory agencies as well as requests for additional information with a view toward (1) avoiding duplication of effort by independent regulatory agencies, and (2) minimizing the compliance burden on business enterprises and other persons. [36] Indeed, Congress may have intended "advice" in the sense of communication or notice as well as in the sense of a recommendation or opinion. [37] The Comptroller has held the view that appropriateness does not require a separate, substantive inquiry ever since he promulgated regulations to implement the Act. See 39 Fed. Reg. 24346 (1974). The court believes that the agency's interpretation of its obligations under the Act is entitled to weight. Judge Schwartz in Delaware apparently also found that the Comptroller's review function relates only to burden and duplication. A. O. Smith Corp. v. FTC, 396 F. Supp. 1125, 1132 (D.Del.1975), rev'd on other grounds, 530 F.2d 515 (3d Cir. 1976). [38] The corporate parties appear to argue in this regard more that the clearance of the forms was arbitrary and capricious than that the Comptroller applied an incorrect legal standard. There is no question that the Comptroller considered the question of unnecessary duplication. The court decides this question in any case under the standards of 5 U.S.C. § 706(2). [39] Indeed, the corporate parties elsewhere argue that the FTC cannot even obtain the underlying information from them. See § III, supra. [40] Nor can the court say that the Comptroller should have disapproved the forms because of overlap with the Quarterly Financial Reports Program or the Premerger Notification Program, since any overlap with these programs is slight. [41] The corporate parties' point is that any burden would be too high for a meaningless program. [42] The court would reserve judgment on this question if, as in counsel's hypothetical at oral argument, the complete and utter lack of meaningfulness of the form for its stated purpose were so patent that a child could recognize it. The value of the LB and CPR data, however, does not present this question, as expert economists disagree on it. [43] 4 C.F.R. § 10.3(b)(2). [44] Id. § 10.10(c)(1)(i). [45] Id. § 10.10(d)(5). [46] Id. [47] As to the latter point, the corporate parties argue that the regulations force agencies to shoulder a planning burden and assure the public a basis on which to comment to the GAO. These incidental effects, admittedly meant to facilitate GAO review, can hardly qualify as an intent to confer rights on private parties. [48] The corporate parties, in fact, appear to have been successful in making their views known to the GAO. The FTC made the views of other agencies known to the GAO and submitted additional material to it upon request. The corporate parties have not made a convincing showing of prejudice, much less substantial prejudice. [49] The court quickly can reject any suggestion that the FTC seeks the CPR data only for the purpose of publishing it, since it is uncontested that the Commission also desires to develop on internal data bank with this data. [50] For example, Milliken claims a particular confidentiality hazard flowing from its status as a privately-held company and could submit its evidence of specific injury to the FTC after filing the CPR form. [51] The court does not consider the Commission's denial of motions to quash the CPR orders dispositive of this inquiry, as the denial of the motions to quash dealt with the claims that the companies did not have to file the CPR form at all because the data consisted of trade secrets. [52] The court might have hesitated to find the claim premature at this time had the corporate parties presented a compelling showing that the CPR data constitutes trade secrets. The question, however, is at best a close one. Further, not all companies have detailed specifically the competitive harm disclosure would precipitate, and the court is unable to make the required determination without individualized information. [53] ARCO, Exxon, Gulf, Mobil, Shell, Standard of California, Standard of Indiana, and Texaco are respondents in the Exxon case, FTC Docket No. 8934, while General Mills is a respondent in the Kellogg case, FTC Docket No. 8883. [54] Indeed, such a suggestion would appear absurd in the Kellogg case, as the parties have indicated the evidence on which they intend to rely and the evidentiary hearing already has begun. [55] The corporate parties have based some of their arguments on a misconception of the ALJ's power to fashion an appropriate remedy for improper use of the data. It is true that ALJs cannot issue section 6(b) orders, but it hardly follows that they are without power to exclude from evidence the information gathered from a section 6(b) investigation as improperly discovered. See Horizon Corp., FTC Doc. No. 9017, July 28, 1976, at 2. [56] These challenges are made apart from the corporate parties' claims of arbitrary and capricious agency action under 5 U.S.C. § 706(2). and they should be evaluated under essentially the same standards employed in determining enforcement of an agency subpoena. See, e. g., Oklahoma Press Publ. Co. v. Walling, 327 U.S. 186, 66 S. Ct. 494, 90 L. Ed. 614 (1946). The court does not accept the corporate parties' contention that this case should be determined on different standards because statistical reporting programs are at issue. [57] See Outline and Explanation of Corporate Parties Concerning Necessary Evidentiary Procedures. [58] The corporate parties cite Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S. Ct. 494, 90 L. Ed. 614 (1946), and FTC v. American Tobacco Co., 264 U.S. 298, 44 S. Ct. 336, 68 L. Ed. 696 (1924), for that proposition. The court does not so liberally read those cases, though it agrees that an information request could be unreasonable and thus an undue burden if wholly irrelevant to the general purpose of the investigation. See Morton Salt, supra. [59] The court believes, however, that a limited inquiry into suitability may be appropriate in determining the corporate parties' claim that the FTC acted arbitrarily in implementing the LB program. [60] The record contains only affidavits submitted to the Commission and to Judge Schwartz in Delaware. The FTC strenuously contends that the corporate parties were obliged to submit affidavits in this case in order to oppose its motion for summary judgment. The corporate parties, however, rely on this court's July 30, 1976 order and their submission of a memorandum detailing needed discovery and evidentiary procedures as excusing the need to oppose the Commission's motion with affidavits. [61] The court will limit the submission to five affidavits. The corporate parties have suggested that the financial representatives of a "small number" of the corporate parties could lay an adequate evidentiary foundation on this question if live testimony were presented. The court believes the same preliminary evidentiary foundation can be laid by means of affidavit. [62] The corporate parties claim that the Commission is responsible for this state of affairs, it having developed and implemented the CPR program in the dark.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367660/	846 P.2d 1151 (1993) 315 Or. 460 Cynthia BRAUN, Plaintiff, v. AMERICAN INTERNATIONAL HEALTH & REHABILITATION SERVICES, INC., a Delaware Corporation; Human Affairs International, Inc., a Utah Corporation, Defendants. USDC 90-1358-DA; SC S39325. Supreme Court of Oregon, In Banc. Argued and Submitted January 7, 1993. Decided March 4, 1993. 1152 James S. Coon, of Royce, Swanson, Thomas & Coon, Portland, filed the brief and argued the cause, for plaintiff. Jody Wilner Moran, of Connelly, Sheehan & Moran, Chicago, IL, argued the cause, for defendant American Intern. Health & Rehabilitation Services, Inc. With her on the brief was Thomas M. Christ, of Mitchell, Lang & Smith, Portland. No appearance, for defendant Human Affairs Intern., Inc. GILLETTE, Justice. This employment discrimination case presents a question of law certified to this court by the United States District Court for the District of Oregon. See generally ORS 28.200 to 28.255 (statutes governing certification). As discussed more fully below, we have reframed the certified question as follows:[1] 1153 Is it an unlawful employment practice under ORS 659.425(1)(a) for an employer to discharge from employment an alcoholic employee whose present use of alcohol prevents her from performing the duties of her job, if that employee denies having any problem with alcohol? We conclude that the answer is "no." We take the following relevant facts from the certification order:[2] "Plaintiff Braun has been an alcoholic since 1965. From December 1987 until May 1989, Braun worked for AIHRS [defendant American International Health & Rehabilitation Services, Inc.] as a senior rehabilitation supervisor. During her employment, Braun was unaware that she was an alcoholic and, in fact, denied any problem with alcohol. Nonetheless, Braun's alcoholism negatively affected her performance at AIHRS. "Braun never asked for any type of accommodation for her alcoholism. In March 1988, co-worker, David Smith (`Smith'), and Braun's supervisor, Barbara Merritt (`Merritt'), met with Braun regarding her `probable substance abuse.' Braun was then referred to AIHRS' employee assistance program (`EAP'). This program is offered through an agreement between AIHRS and co-defendant HAI [Human Affairs International, Inc.]. "In May 1988, Braun met with Robert Johnson (`Johnson'), an HAI counselor, who had been informed of Braun's possible substance abuse. At that meeting, Braun minimized her alcohol use; denied having a drinking problem; and denied that her alcohol consumption affected her work. Based on this interview, Johnson reported to Linda Bern (`Bern'), director of AIHRS' Health Advisory Program, that Braun was a `social drinker,' but did not abuse alcohol. "From May 1988 to March 1989, plaintiff's supervisors continued to note problems with her work performance and, occasionally, the smell of a strong odor [of alcohol]. On June 29, 1988, Bern contacted Johnson and discussed Braun's problem. Johnson stated that he had spoken with Braun once since their May 2, 1988[,] meeting and that she had reported that everything was `fine.' Johnson said that if Braun contacted him again, he would arrange for an alcohol evaluation and possible in-patient rehabilitation. Braun did not contact Johnson. "In December 1988, David Griffiths (`Griffiths') became Braun's supervisor. He issued written and verbal warnings to Braun about her performance. Griffiths discharged Braun [on] May 11, 1989[,] and this action ensued." Plaintiff's action involves, in part, a claim that defendant AIHRS[3] engaged in an unlawful employment practice of discrimination based on disability. Specifically, plaintiff alleges that defendant terminated her employment without reasonably accommodating her alcoholism, an act that plaintiff claims is in violation of ORS 659.425(1)(a), set out infra. Regarding this claim, the District Court certified its question to this court, and we accepted the certification on August 14, 1992. As pointed out at oral argument, ORS 659.425(1)(a), the statute specifically referred to by the federal court, does not use the term "disabled person." Rather, that statute provides: "For the purposes of ORS 659.400 to 659.460, it is an unlawful employment practice for any employer to refuse to hire, employ or promote, to bar or discharge from employment or to discriminate 1154 in compensation or in terms, conditions or privileges of employment because: "(a) An individual has a physical or mental impairment which, with reasonable accommodation by the employer, does not prevent the performance of the work involved[.]" Consequently, this court has exercised its discretion to reframe the question in the manner set out at 462, 846 P.2d at 1152, ante.[4] The answer to the reformulated question depends, in turn, on the answer to an underlying question: Is alcoholism a "physical or mental impairment" within the meaning of ORS 659.425(1)(a)? To answer that question, we must determine whether the legislature intended the phrase "physical or mental impairment" in ORS 659.425(1)(a) to encompass alcoholism. See Teeny v. Haertl Constructors, Inc., 314 Or. 688, 694, 842 P.2d 788 (1992) ("In interpreting a statute, this court's duty is to discern the intent of the legislature."). Because the phrase "physical or mental impairment" is not defined in the statute,[5] and because the phrase is not self-explanatory, we consider legislative history to determine the legislature's intended meaning. See Mattiza v. Foster, 311 Or. 1, 4, 803 P.2d 723 (1990) ("When the language of the statute does not provide sufficient insight into legislative intent, it is appropriate to consider legislative history."). That history suggests that alcoholism is a "physical or mental impairment" within the meaning of ORS 659.425(1)(a). The legislature first enacted ORS 659.425 in 1973 as part of the Handicapped Persons' Civil Rights Act. Or.Laws 1973, ch. 660, § 7. That enactment made it unlawful to discriminate in employment "because an individual has a physical or mental handicap, unless it can be shown that the particular handicap prevents the performance of the work involved." Id. § 7(1) (codified as ORS 659.425(1) (1973)). "Physical or mental handicap" was defined to mean "a physical or mental disability including but not limited to sensory disabilities and resulting in a handicap unrelated to a person's ability to perform the duties of a particular job or position for which he would otherwise be eligible and qualified for employment or promotion." Id. § 2(1) (codified as ORS 659.400(2) (1973)).[6] The statute did not define the phrase "physical or mental disability," however, and there was nothing in the statute to reveal whether that phrase included or excluded alcoholism.[7] In 1979, House Bill 3126 was introduced to amend ORS 659.400 to 659.430. The main purpose of the bill was to clarify the definition of "handicap" and to include 1155 the concept of "reasonable accommodation" with respect to the employment of handicapped persons. See Minutes, House Committee on Human Resources, May 31, 1979, pp. 1-4 & Exhibit B (testimony on behalf of Oregon Chapter of the National Rehabilitation Association, one of the bill's requestors). The bill accomplished this purpose by conforming the Oregon law with provisions of a federal law, the Rehabilitation Act of 1973, Pub.L. No. 93-112, 87 Stat. 355 (codified as amended at 29 U.S.C. §§ 701-796i (1988 & Supp.1990)). See, e.g., Minutes, Senate Committee on the Judiciary, June 27, 1979, p. 1 (indicating that the purpose of HB 3126 was to "conform the statutory definition in ORS 659 * * * more closely with the federal law using sections 503 and 504" of the Rehabilitation Act of 1973); House and Staff Measure Analyses of HB 3126 (contained in original bill file) ("The measure clarifies and places the state statutes in conformity with the federal laws"). Because the revisions contained in HB 3126 were modeled after federal law, it is appropriate, in determining the intended scope of those revisions, to examine the scope of the federal law on which they were based. The Rehabilitation Act of 1973 prohibits discrimination against individuals with handicaps in three different settings.[8] Section 501 of the Act (codified at 29 U.S.C. § 791) requires agencies of the federal government to implement affirmative action programs for hiring individuals with handicaps.[9] Section 503 of the Act (codified at 29 U.S.C. § 793) also requires federal contractors to take affirmative action to employ individuals with handicaps.[10] And section 504 of the Act (codified at 29 U.S.C. § 794) prohibits discrimination against individuals with handicaps by programs receiving federal funding.[11] In 1977, the Attorney General of the United States issued an opinion that concluded that "alcoholism could reasonably be characterized as `a physical or mental disability' within the meaning of * * * the Act" and that "alcoholics * * * are `handicapped individuals' for purposes of Title V of the Act." 43 Op. U.S. Atty. Gen. 12 (1977). (Title V includes sections 501, 503, and 504.) In 1978, however, Congress chose to settle the question by amending the Act to exclude active alcoholics[12] from the coverage of sections 503 and 504, as those sections relate to employment. Pub.L. No. 95-602, § 122, 92 Stat. 2955, 2984-85 (1978) (codified at 29 U.S.C. § 706(8)(C)(v) (Supp.1990)). Under that amendment, "an alcoholic * * * whose current use of alcohol * * * prevents such individual from performing the duties of the job in question" was no longer considered a "handicapped individual" for purposes of sections 503 and 504. Ibid. Yet, 1156 under section 501, active alcoholics remained covered. See, e.g., Crewe v. U.S. Office of Personnel Management, 834 F.2d 140, 142 (8th Cir.1987) ("This limitation, by its terms, applies only to §§ [50]3 and [50]4."); Whitlock v. Donovan, 598 F. Supp. 126, 129 (D.D.C.1984) ("Federal alcoholic employees who are using alcohol excessively are protected under * * Section 501"), aff'd without opinion, 790 F.2d 964 (D.C.Cir.1986). Thus, in 1979, when HB 3126 was introduced into the Oregon legislature, active alcoholics were considered "handicapped individuals" under section 501, but not under section 503 or 504. Defendant makes much of this distinction, arguing that, because HB 3126 was based on sections 503 and 504, rather than on section 501, the Oregon legislature did not intend to encompass active alcoholism within the phrase "physical or mental impairment" in ORS 659.425(1)(a). For the reasons that follow, we are unpersuaded. The legislative history of HB 3126 reveals that the language in the final version of the bill was derived from regulations promulgated under section 503 (41 CFR §§ 60-741.1 to 60-741.54).[13] Tape recording, House Committee on Labor, June 18, 1979, Tape 35, Side 2 at 218-355. The purported reason for basing the bill on those regulations was to ensure that employers in Oregon already subject to section 503 (i.e., federal contractors) would face substantially the same obligations under Oregon law. Ibid. However, the regulations chosen as a model for the Oregon law, although promulgated under section 503, did not contain any exclusion of active alcoholics from the term "handicapped individual."[14] The explanation for this discrepancy between the statutes and the regulations is suggested by the fact that the regulations were published in October 1978, 43 Fed. Reg. 49,276 (1978), a month before the statutory amendment excluding active alcoholics was enacted in November 1978. This chronology suggests that the regulations that were the basis for HB 3126 were themselves based on section 503 in the form in which that section existed before the 1978 amendment. Thus, the regulations were based on the version of the statute that had been interpreted by the Attorney General of the United States to include active alcoholics within its coverage. Defendant argues, however, that the 1978 statutory amendment that excluded active alcoholics from the coverage of section 503 is irrelevant because, even before that amendment, section 503 covered only "qualified" handicapped individuals, and an alcoholic whose alcoholism prevented her from performing her job was not "qualified" within the meaning of the statute. According to defendant, "[t]he Oregon legislature would, as a result, have been aware that following §§ 503-504 of the federal law meant that active alcoholics whose performance was adversely affected would not be protected." There is support for this argument in the Opinion of the Attorney 1157 General referred to above. 43 Op. U.S. Atty. Gen. 12 (1977). However, that argument ignores the specific language of the regulations on which HB 3126 was based. Those regulations define "qualified handicapped individual" as "a handicapped individual * * who is capable of performing a particular job, with reasonable accommodation to his or her handicap." 41 CFR § 60-741.2 (1992) (emphasis added). By including the concept of "reasonable accommodation," the regulation ensures that the inability to perform a job arising from an individual's handicap does not make that person unqualified, unless that inability remains after the employer has attempted reasonable accommodation. In summary, but for the 1978 federal statutory amendment, the regulations under section 503 would encompass active alcoholics who reasonably could be accommodated. Because there is nothing in the legislative history of HB 3126 to indicate that the Oregon legislature was aware of the 1978 amendment to the federal law or otherwise intended to apply such an exclusion to the Oregon law, we assume that the legislature did not intend the Oregon law to be interpreted as containing such a complete exclusion. Consequently, we conclude that alcoholism is a "physical or mental impairment" within the meaning of ORS 659.425(1)(a). This brings us to the certified question itself, which we restate here for convenience: Is it an unlawful employment practice under ORS 659.425(1)(a) for an employer to discharge from employment an alcoholic employee whose present use of alcohol prevents her from performing the duties of her job, if that employee denies having any problem with alcohol? For the reasons that follow, we conclude that the answer is "no." ORS 659.425(1)(a) makes it an unlawful employment practice to discharge an employee because that employee "has a physical or mental impairment which, with reasonable accommodation by the employer, does not prevent the performance of the work involved." The statute imposes on an employer a duty to make reasonable accommodation for its employees' physical and mental impairments. See OAR 839-06-245 ("ORS 659.425 imposes an affirmative duty upon an employer to make reasonable accommodation for an individual's physical or mental impairment where the accommodation will enable that individual to perform the work involved in the position occupied or sought"); see also 41 CFR § 60-741.6(d) (1992) (regulation under section 503) ("A contractor must make a reasonable accommodation to the physical or mental limitations of an employee or applicant"). In this case, plaintiff contends that defendant had a duty to accommodate her alcoholism, even though she had not yet been diagnosed as an alcoholic, because defendant suspected that plaintiff suffered from "probable substance abuse." Defendant argues, on the other hand, that it had no duty to accommodate an impairment that plaintiff denied having and for which plaintiff sought no accommodation. To resolve this issue, we must determine when the legislature intended an employer's duty of reasonable accommodation to arise under ORS 659.425(1)(a). In seeking the answer to this question, the language of the statute offers no assistance. While ORS 659.425(1)(a) imposes a duty of reasonable accommodation, the language of the statute does not suggest what circumstances do or do not give rise to that duty. Thus, we are left to seek guidance elsewhere. Plaintiff argues that the duty of reasonable accommodation arose in this case when defendant suspected plaintiff of "probable substance abuse." To support her argument, she relies on federal case law applying section 501 of the Rehabilitation Act of 1973. Regulations promulgated under section 501 require governmental employers to "make reasonable accommodation to the known physical or mental limitations" of an employee. 29 CFR § 1613.704(a) (1992) (emphasis added). Nevertheless, with respect to alcoholism in particular, some federal courts have held that a federal employer's duty to follow a rigorous course of "reasonable accommodation"[15]1158 does not depend on the employer's affirmative knowledge of an employee's alcoholism, but is triggered "when an employee's performance deficiencies are suspected to be due to alcohol." Whitlock v. Donovan, supra, 598 F.Supp. at 133 (emphasis added); see also Rodgers v. Lehman, 869 F.2d 253, 259 (4th Cir.1989) (accommodation must begin "[w]hen the agency suspects that an employee's poor job performance results from alcoholism"). The difficulty with the authorities on which plaintiff relies is that the standards that the federal government requires itself to meet as an employer of the disabled under section 501 are much higher than the standards that the government requires state and local governments and private employers to meet under sections 503 and 504. Section 501 was "intended to make the federal government a model employer of the handicapped." Crewe v. U.S. Office of Personnel Management, supra, 834 F.2d at 142; see also 29 CFR § 1613.703 (1992) ("The Federal government shall become a model employer of handicapped individuals."). With regard to alcoholism in particular, the extensive scope of the government's self-imposed duty of reasonable accommodation (see note 15, supra) arises not only from section 501, but also from other federal law and internal publications that apply only to the federal government. Whitlock v. Donovan, supra, 598 F.Supp. at 130-33. Taken together, those sources "show Congress's firm intention to require federal employers to exert substantial affirmative efforts to assist alcoholic employees toward overcoming their handicap before firing them for performance deficiencies related to drinking." Id. at 131. There is no equivalent showing that the Oregon legislature intended to impose such high standards on private employers under ORS 659.425(1)(a). On the contrary, legislative history suggests that the legislature consciously chose to impose a lesser burden on employers under ORS 659.425(1)(a) by modeling that law after section 503 regulations rather than section 501 regulations. See note 13, supra, and accompanying text. We conclude that the legislature did not intend to impose on Oregon employers the same high standards that the federal government imposes on itself, including the requirement that an employer accommodate an employee based on mere suspicion of an impairment. Legislative history reveals that the legislature chose to leave development of the concept of "reasonable accommodation" to the Bureau of Labor and Industries in its administrative rules. Minutes, House Committee on Labor, June 18, 1979, p. 1. Although they do not address the precise issue presented in this case, those rules support the conclusion that an employee's denial of an impairment vitiates the employer's duty of reasonable accommodation. Specifically, OAR 839-06-245, the Bureau rule governing reasonable accommodation, states, in part, that "[a] handicapped person who is an employee * * must cooperate with an employer in the employer's efforts to reasonably accommodate the person's impairment." OAR 839-06-245(3) (emphasis added). Certainly, an employee who denies to her employer that she has an impairment could not be said to cooperate with that employer's efforts at accommodation. We also note that acceptance of the argument urged by plaintiff could place an employer in an untenable position, caught between two different parts of ORS 659.425(1). Paragraph (c) of that statute makes it unlawful to treat an employee as 1159 having an impairment, when that employee in fact has no impairment.[16] Under plaintiff's argument, if an employer suspected an impairment that the employee denied having, the employer would face this choice: (1) do not accommodate the suspected impairment, in which case, if the employee actually is impaired, the failure to accommodate will constitute a violation of ORS 659.425(1)(a); or (2) accommodate the suspected impairment, in which case, if the employee is not impaired, the accommodation will constitute a violation of ORS 659.425(1)(c). Nothing in the statutes or the legislative history indicates that the legislature intended employers to face that kind of dilemma in seeking to comply with the provisions of ORS 659.425(1). In light of the foregoing discussion, we conclude that the legislature did not intend to impose on employers a duty to accommodate an employee's physical or mental impairment due to alcoholism, if that employee denies having that impairment. Of course, denial is often associated with alcoholism. Further, successful treatment requires the individual to proceed beyond denial to recognition of the problem, and an employer may be able to facilitate such recognition. Nevertheless, though an employer may have the ability to facilitate an employee's recognition, for example, by offering a "firm choice" between treatment or discipline (see note 15, supra), we do not discern from the language or history of ORS 659.425(1)(a) that the legislature intended an employer's decision not to offer such a choice to constitute discrimination on the basis of disability.[17] Consequently, the answer to the certified question in this case is "no." Certified question answered. NOTES [1] The original question certified by the United States District Court for the District of Oregon was as follows: "Is an alcoholic, whose present use of alcohol prevents her from performing the duties of her job, a `disabled person' under ORS 659.425(1)(a)?" At oral argument, it became clear that the parties were in agreement that the District Court's certified question did not satisfactorily present the pertinent legal question. The parties were granted a period of time in which to find an alternative question acceptable to both. Because they have been unable to agree on an alternative, we have fashioned one. See Western Helicopter Services v. Rogerson Aircraft, 311 Or. 361, 370, 811 P.2d 627 (1991) ("this court * * has the discretion to reframe questions and is not bound to answer the question as certified"). [2] ORS 28.210(2) provides that the certification order "shall set forth * * * [a] statement of all facts relevant to the questions certified." [3] Plaintiff's claims against defendant Human Affairs International, Inc., are not relevant to the certified question before us. Our references to "defendant" throughout this opinion refer to defendant AIHRS. [4] Although it is not indicated in the statement of facts contained in the certification order, it is undisputed in this case that defendant is an "employer" within the meaning of ORS 659.425(1). For purposes of ORS 659.425(1), "employer" means "any person who employs six or more persons and includes the state, counties, cities, districts, authorities, public corporations and entities and their instrumentalities, except the Oregon National Guard." ORS 659.400(3). [5] The Bureau of Labor and Industries has adopted rules interpreting ORS 659.425 and related statutes. OAR 839-06-200 to XXX-XX-XXX. As used in those rules, "physical or mental impairment" means "an apparent or medically detectable condition which weakens, diminishes, restricts or otherwise damages an individual's health or physical or mental activity." OAR 839-06-205(7). That definition does not clear up the ambiguityit is itself ambiguous. [6] In Montgomery Ward v. Bureau of Labor, 280 Or. 163, 166-67, 570 P.2d 76 (1977), this court commented on the "inconsistent statutory language" of these two sections: "Because a disability unrelated to a job can never prevent performance of the job, there is no way the language commencing with the word `unless' in ORS 659.425(1) can make much sense. This leaves the statutes saying that it is unlawful to refuse to hire someone because of disability when the disability is unrelated to the job involved. This tells us very little about the disability which justifies a refusal to employ." (Emphasis in original.) [7] We note, however, that, under the original versions of ORS 659.400 and 659.425, set out supra, even if alcoholism fell within the meaning of the phrase "physical or mental disability," plaintiff's alcoholism would not have been considered a "physical or mental handicap" entitling her to the protection of the statutes, because her alcoholism was related to her ability to perform her particular job; indeed, it prevented her performance. [8] In 1979, the Rehabilitation Act used the term "handicapped individuals." A 1986 amendment substituted "individuals with handicaps" throughout sections 501, 503, and 504. Rehabilitation Act Amendments of 1986, Pub.L. No. 99-506, 100 Stat. 1807. [9] "Each department, agency, and instrumentality (including the United States Postal Service and the Postal Rate Commission) in the executive branch shall * * * submit * * * an affirmative action program plan for the hiring, placement, and advancement of individuals with handicaps in such department, agency, or instrumentality." 29 U.S.C. § 791(b) (1988). [10] "Any contract in excess of $2,500 entered into by any Federal department or agency for the procurement of personal property and nonpersonal service (including construction) for the United States shall contain a provision requiring that, in employing persons to carry out such contract, the party contracting with the United States shall take affirmative action to employ and advance in employment qualified individuals with handicaps as defined in section 706(8) of this title." 29 U.S.C. § 793(a) (1988). [11] "No otherwise qualified individual with handicaps in the United States, as defined in section 706(8) of this title, shall, solely by reason of her or his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service." 29 USC § 794(a) (1988). [12] For purposes of this case, we use the term "active alcoholic" to refer to an alcoholic who presently is using alcohol. Such a person is distinct from an alcoholic who is not presently using alcohol (i.e., an "arrested" or "controlled" alcoholic). [13] Some of the legislative history suggests that HB 3126 was patterned after regulations promulgated under section 504, or after sections 503 and 504 themselves. See, e.g., Minutes, House Committee on Human Resources, June 5, 1979, p. 2 (legislative counsel indicates that "the language in the bill is modeled after the federal 504"). However, the language in the initial version of the bill was taken from regulations promulgated under section 501. Compare original bill (contained in the original bill file) with 29 CFR § 1613.702 (regulation of the Equal Employment Opportunity Commission governing employment of the handicapped by federal agencies under section 501). The bill was revised substantially, however, and testimony before the House Committee on Labor reveals that the this revision was based on language from regulations promulgated under section 503 (41 CFR §§ 60-741.1 to 60-741.54). Tape recording, House Committee on Labor, June 18, 1979, Tape 35, Side 2 at 218-355. [14] The regulations define "handicapped individual" as "any person who (1) has a physical or mental impairment which substantially limits one or more of such person's major life activities, (2) has a record of such impairment, or (3) is regarded as having such an impairment." 41 CFR § 60-741.2 (1992). "Qualified handicapped individual" is defined as "a handicapped individual as defined in § 60-741.2 who is capable of performing a particular job, with reasonable accommodation to his or her handicap." Id. Active alcoholics are not expressly excluded from either term. [15] The "reasonable accommodation" that a federal employer must make for an alcoholic employee was recently described by the Ninth Circuit Court of Appeals: "`[R]easonable accommodation' requires that a governmental employer follow a progression of increasingly severe responses to an employee's alcoholism. The employer should (1) inform the employee of available counseling services; (2) provide the employee with a `firm choice' between treatment and discipline; (3) afford an opportunity for outpatient treatment, with discipline for continued drinking or failures to participate; (4) afford an opportunity for inpatient treatment, if outpatient treatment fails; and (5) absent special circumstances, discharge the employee for further relapse." Fuller v. Frank, 916 F.2d 558, 562 (9th Cir.1990). [16] ORS 659.425(1) states that "it is an unlawful employment practice for any employer to refuse to hire, employ or promote, to bar or discharge from employment or to discriminate in compensation or in terms, conditions or privileges of employment because * * * (c) [a]n individual is regarded as having a physical or mental impairment." ORS 659.400(2)(c) states, in part, that the phrase "`[i]s regarded as having an impairment' means that the individual * * * (A) [h]as no physical or mental impairment but is treated by an employer or supervisor as having an impairment." [17] No one questions that, if alcoholism is within the ambit of ORS 659.425 and the employee admits that she suffers from that condition, the duty of the employer to make a reasonable accommodation is triggered.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367714/	846 P.2d 414 (1993) 118 Or. App. 46 LANE COUNTY PUBLIC WORKS ASSOCIATION LOCAL 626, and Theodore Bushek, Respondents-Cross-Petitioners, v. LANE COUNTY, Petitioner-Cross-Respondent. UP-36-90; CA A71642. Court of Appeals of Oregon. Argued and Submitted May 13, 1992. Decided February 3, 1993. 415 David B. Williams, Asst. County Counsel, Eugene, argued the cause for petitioner cross-respondent. With him on the briefs was Lane County Office of Legal Counsel, Eugene. Gary K. Jensen, Eugene, argued the cause for respondentscross-petitioners. With him on the brief was Jay H. Safley, Eugene. Before ROSSMAN, P.J., and DE MUNIZ and LEESON,[] JJ. DE MUNIZ, Judge. Bushek, Davis and Reis applied for the Lane County senior parks maintenance job. After an interview with each applicant, the county selected Davis for the job. Complainants, Bushek and Lane County Public Works Association, filed a complaint with the Employment Relations Board (ERB) alleging that the county had committed unfair labor practices by hiring Davis, by reprimanding Bushek after the hiring decision was made and by refusing to provide information that complainants had requested about the hiring process.[1] They sought an order directing the county to give Bushek the job and imposing a civil penalty against the county. ERB concluded that the county had violated ORS 243.672(1)(a) by denying Bushek the job because of his union activity, and it ordered the county to give him the job. ERB dismissed the claim that the county had committed an unfair labor practice by failing to furnish the information that complainants had requested about the hiring process. It also denied their request for a civil penalty. The county seeks review of the order directing it to give Bushek the job.[2] Complainants seek review of the 416 denial of their request for a civil penalty and the dismissal of their claim based on the county's failure to produce the information about the hiring process. We affirm. We take the facts from ERB's findings. Bushek began working for the Lane County Department of Public Works in 1978. In 1982, he began working in the department's road maintenance unit and became the union's president. His job consisted of maintaining the grounds around the department's headquarters building and its central maintenance yard. In 1984, that duty was reassigned to the senior parks maintenance position, and Bushek began working with construction and road repair equipment. Morris also worked in the road maintenance unit. Both he and Bushek reported to Puett, the department's zone supervisor. In 1988, Morris became the union's president, and Bushek filled the union's newly created steward-at-large position. Bushek continued to handle grievances and arbitrations for the union, as he had done when he was president. In August, 1989, the senior parks maintenance position became vacant. Morris and Bushek applied. Van Elsberg, the road maintenance manager, interviewed both of them. Van Elsberg's previous experience with Bushek was almost exclusively related to union-management matters.[3] Van Elsberg decided to open the job to any member of the bargaining unit, so that he could consider a larger pool of applicants. He told Morris that "he needed to work closely with the person in the parks position and he felt that he could not work closely with Bushek." Before Van Elsberg listed the job, he asked Davis to consider applying for it. At that time, Davis was working in the sign shop of the traffic planning and engineering unit. Bushek, Davis and Reis applied. Van Elsberg, Puett and Putschler interviewed them. Puett preferred Bushek. Van Elsberg's discomfort about Bushek led him to conclude that Davis was the most suitable candidate. Putschler told two employees that Bushek had done well in the interview, but that Davis had not. However, he considered factors other than the interview, and he rated the two evenly. He decided to concur with Van Elsberg's recommendation that Davis be offered the job. After Bushek found out that Davis had been selected for the job, he approached Davis to discuss the decision. Bushek told Davis that he should turn down the job, because Bushek felt that he was better qualified. Bushek was neither threatening nor coercive. During the conversation, Reis appeared. Bushek asked Reis if he would like Bushek to pursue a grievance regarding Davis' selection. The county found out about the discussion between Bushek and Davis, and it issued a written reprimand to Bushek for violating a county work rule that prohibited intimidation, coercion or threatening other employees. The union filed a grievance against the county. It contended that the county did not have cause to discipline Bushek. The matter was referred to arbitration. The union asked the county to provide Davis' application for the senior parks maintenance job, his personnel file, copies of interview notes, information regarding changes in interview and evaluation criteria and any Lane County document that defined the terms "more suited" or "more suited for a position." The county denied the request on the grounds that Davis' application and file were confidential and that the interview notes were privileged. The county also stated that there had not been any "changes" in the selection criteria, because this was a new job, and the county was unaware of any formal definition of the term "more suited." The arbitrator concluded that Bushek had not violated the work rule that prohibited intimidation, and he set aside the county's reprimand of Bushek. In its order, ERB concluded: "The [union] established a prima facie case. It showed extensive union activity by Bushek * . The attending circumstances consist of Van Elsberg's decision 417 to interview the [applicants] rather than leave the matter to the foreman, his denial of a transfer and his decision to post the position, his discussion with McCawley in personnel regarding Bushek's eligibility for a promotion which preceded Bushek initially being declared ineligible for the position, his solicitation of Davis to apply for the job, and his selection of Davis over the wishes of foreman Puett, who strongly preferred Bushek. "The [union] further proved that Bushek's union activity played a role in Van Elsberg's decision * * . "When it is proven that an employee's [union] activity played a role in an employer's action adverse to the employee, the burden of persuasion shifts to the employer." (Emphasis supplied; footnote omitted.) The county contends that ERB impermissibly shifted the burden of persuasion to the county, by requiring it to prove that it had legitimate reasons for hiring Davis and that it would have made the same decision without considering Bushek's union activities. The difficulty with ERB's order stems from its use of the phrases "prima facie case" and "the burden of persuasion shifts." When viewed in isolation, those phrases can be read to suggest that a presumption in favor of the complainants arises if the complainants produce sufficient evidence to allow a finding that Bushek's union activities played a role in the county's decision not to hire him. When viewed as a whole, however, ERB's order shows that it properly allocated to the county the burden of proving an affirmative defense. The Supreme Court reviewed a procedurally identical case in City of Portland v. Bureau of Labor and Ind., 298 Or. 104, 690 P.2d 475 (1984). In that case, the complainant alleged that her employer, the City of Portland, paid her a lower salary than it paid to male employees who did the same work. She contended that her lower rate of pay was the result of sexual discrimination by the city. The city denied that it had discriminated against her, and it asserted several affirmative defenses to explain the disparate pay. In reviewing the Bureau of Labor and Industry's decision in favor of the complainant, the court observed: "One who merely establishes a prima facie case and rests does not necessarily win even if the opponent adduces no evidence whatsoever and merely relies on a denial of alleged wrongdoing. The trier of fact may, in such instance, decline to draw the permissible inference necessary to establish liability. Indeed, the trier of fact may disbelieve the evidence adduced to establish the fact from which the inferred fact is to be drawn. In either case, the party with the burden of persuasion would lose. On the other hand, were the trier of fact to believe the evidence adduced to prove the primary fact and then draw a permissible inference that establishes the charge, an employer who rests without adducing evidence will lose. "We address the matter as it has been presented to us. The Commissioner did draw the permissible inference that [the complainant] was paid less because of her sex than were the [male] police officers who were performing substantially the same work. We proceed to examine the City's affirmative defenses." 298 Or. at 114, 690 P.2d 475. (Footnote omitted.) For purposes of our review, there is no meaningful distinction between City of Portland v. Bureau of Labor and Ind., supra, and this case. Complainants presented sufficient evidence to support Bushek's claim, and that allowed ERB to infer that the county's unlawful motive was a material factor in its decision not to hire Bushek. However, ERB was not required to make that inference. Consequently, there was no shifting of the burden of persuasion on that issue. Nonetheless, ERB's order indicates that it was persuaded by complainants' prima facie showing, because it concluded that they had "proved that Bushek's union activity played a role" in the county's hiring decision. (Emphasis supplied.) ERB drew the "permissible inference that establishe[d] the charge." 298 Or. at 115, 690 P.2d 475. ERB's finding 418 that the county's unlawful motive played a part in its hiring decision is supported by substantial evidence, and we may not disturb it. ORS 183.482(8)(c). The county's contention that it would have hired Davis despite its unlawful motive amounts to an affirmative defense. Because it is an affirmative defense, the county had the burden of proving it. ORS 183.450(2), (5); Rencken v. Young, 300 Or. 352, 364, 711 P.2d 954 (1985). ERB did not impermissibly shift the burden of production or persuasion to the countythe county always had the burden on affirmative defenses. ERB's order and City of Portland v. Bureau of Labor and Ind., supra, simply reflect that it would have been unnecessary for the county to carry that burden if ERB had not been persuaded by complainants' prima facie case. In their first assignment of error in their cross-petition, complainants contend that ERB erred by dismissing their claim that the county violated ORS 243.672(1)(e) when it refused to provide the information that complainants had requested about the hiring process. That request occurred in the context of a grievance proceeding. The issue in that proceeding was whether the county had violated the contract by reprimanding Bushek for confronting Davis. Complainants did not show that documents relating to the hiring process were relevant to any issue in that proceeding. The county did not violate that statute when it failed to furnish the requested documents. Next, complainants contend that ERB erred by concluding that the county did not commit an unfair labor practice when it reprimanded Bushek. They contend that there is substantial evidence to support a finding that the county reprimanded Bushek for engaging in union activities. ERB's finding that the county did not reprimand Bushek because of his union activity is supported by substantial evidence. ORS 183.482(8)(c). The fact that the evidence could support the opposite finding does not mean that ERB was compelled to make that finding. We may not substitute our judgment for ERB's on a factual issue. ORS 183.482(7). Finally, complainants contend that ERB erred by not imposing a civil penalty against the county for denying Bushek the senior parks maintenance job. ERB "may award a civil penalty to any person as a result of an unfair labor practice complaint hearing." ORS 243.676(4). (Emphasis supplied.) By using the word "may" in that statute, the legislature intended that ERB have discretion in deciding whether to impose a civil penalty. See In re Banks/Thompson/Sims, 284 Or. 691, 693, 588 P.2d 34 (1978); State v. Harding, 116 Or.App. 29, 32 n. 4, 840 P.2d 113 (1992). ERB explained that it would not impose a civil penalty against the county, because the county's decision was based "on a novel theory about basing personnel decisions on personal interactions in union-management meetings." ERB did not abuse its discretion. Affirmed on petition and on cross-petition. NOTES [] Leeson, J., vice Buttler, J., retired. [1] ORS 243.672(1) provides, in part: "It is an unfair labor practice for a public employer or its designated representative to do any of the following: "(a) Interfere with, restrain or coerce employees in or because of the exercise of rights guaranteed in ORS 243.662. " * * * * "(c) Discriminate in regard to hiring, tenure or any terms or condition of employment for the purpose of encouraging or discouraging membership in an employee organization. * * * "(d) Discharge or otherwise discriminate against an employee because the employee has [filed an unfair labor practice complaint]. "(e) Refuse to bargain collectively in good faith with the exclusive representative." ORS 243.662 provides: "Public employees have the right to form, join and participate in the activities of labor organizations of their own choosing for the purpose of representation and collective bargaining with their public employer on matters concerning employment relations." [2] ORS 243.676(2) provides, in part: "[If] the board finds that any person named in the complaint has engaged in [any] unfair labor practice charged in the complaint, the board shall: "* * * * * "(c) Take such affirmative action, including but not limited to the reinstatement of employees with or without back pay, as necessary to effectuate the purposes of [ORS 243.650-ORS 243.782]." The county does not contend that ERB lacks authority to order it to give Bushek the job, and we express no opinion on that. [3] Among those matters was an unfair labor practice charge that Bushek had filed against Van Elsberg. That charge was ultimately withdrawn.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367728/	174 Ariz. 23 (1992) 846 P.2d 836 LOU GRUBB CHEVROLET, INC., Petitioner Employer, Argonaut Insurance Company, Petitioner Carrier, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Michael Pack, Respondent Employee. No. 1 CA-IC 91-0033. Court of Appeals of Arizona, Division 1, Department A. July 23, 1992. Reconsideration Denied September 22, 1992. Review Denied March 16, 1993. 24 Long, Lester & Lundmark, P.A. by Steven C. Lester, Phoenix, for petitioner employer and petitioner carrier. Anita R. Valainis, Chief Counsel, Indus. Com'n of Arizona, Phoenix, for respondent. Ely, Bettini & Ulman by Joseph M. Bettini, Phoenix, for respondent employee. OPINION TOCI, Judge. The employer and carrier bring this special action review of an Industrial Commission award. The claimant sustained an industrial injury to his right hand and wrist. While claimant was under treatment for the industrial injury, a third party rear ended claimant's automobile in a nonindustrial accident. The automobile accident aggravated the injury to claimant's right hand and wrist. The administrative law judge entered an award granting the claimant further medical and compensation benefits. The award denied the carrier lien rights in the claimant's recovery from the third party. We conclude the later nonindustrial injury to the hand and wrist is within the range of compensable consequences of the original industrial injury. Also, Ariz. Rev. Stat. Ann. ("A.R.S.") section 23-1023, as interpreted by our decisions, grants no lien rights to the carrier in the claimant's potential recovery against a nonindustrial tort-feasor. Thus, we affirm. We do not consider the remaining arguments raised by the carrier. I. ISSUES (1) Is the aggravation of an industrial injury by a later nonindustrial automobile accident a compensable consequence of the primary industrial injury? (2) Does the carrier have statutory lien rights in the claimant's recovery for a nonindustrial, third-party tort that did not arise from the same facts as those supporting the award for compensation? II. FACTUAL AND PROCEDURAL HISTORY On September 13, 1988, while employed as a mechanic for petitioner employer, Lou Grubb Chevrolet, Inc. ("Lou Grubb"), the blunt end of the respondent employee's ("claimant's") screwdriver caught in a flywheel and struck the claimant in the right palm and chest. The injury caused right arm pain, numbness, and weakness, which forced the claimant to stop working on September 23, 1988. Petitioner carrier, Argonaut Insurance Company ("Argonaut"), later accepted compensability. Claimant's symptoms persisted. His treating doctor referred him to Dr. Bobb, a hand specialist, who examined claimant's right arm. Dr. Bobb found clinical evidence of carpal tunnel syndrome, a wrist and hand problem involving the median nerve. On March 6, 1989, Dr. Bobb reported claimant had improved with therapy, and he released claimant for regular work. Argonaut placed claimant on temporary partial disability status and then on regular work status. However, claimant's wrist problems returned. On May 1, 1989, Dr. Bobb reported a recurrence of claimant's carpal tunnel complaints. A physical therapist treated claimant for his recurrent symptoms about thirty times between March and June 10, 1989. Not long before the automobile accident, claimant had shooting pains and numbness in his right hand and middle finger. On June 9, 1989, Dr. Bobb referred claimant for a nerve conduction study (EMG) of his right hand and wrist. The nerve study was negative. 25 The following day, claimant's van was rear ended, while he was driving. The impact "wedged" claimant's right wrist in a locked position against the steering wheel. Within half an hour after the accident, claimant's entire right arm was numb. Claimant also sustained neck and back injuries as a result of the accident. On June 19, 1989, claimant saw Dr. Bobb for the first time after the automobile accident. Claimant told Dr. Bobb that he had been off work "because of injuries associated with an automobile accident." Dr. Bobb reported an aggravation of symptoms in claimant's right hand and wrist, including loss of strength. On September 27, 1989, Dr. Bobb performed hand and wrist surgery. He reported surgical findings of both median (carpal tunnel) and ulnar nerve compression in the right wrist. His report of October 5, 1989, stated "as a result of [the industrial accident], ... [claimant] has sustained further injury to his ulnar and median nerves and now is at a point where surgical decompression is warranted ...." The report concluded: "It should be clearly stated that ... [claimant] has had an exacerbation of a pre-existing industrial injury, which now demands surgical attention...." Relying on this report, claimant's counsel requested an investigation under A.R.S. section 23-1061(J). He asserted that because the work injury casually contributed to claimant's need for surgery, claimant's aggravated right arm injury was a compensable consequence of the work injury. Argonaut responded by denying liability for the surgery and post-accident disability. Dr. Rand, an orthopedist retained to examine claimant for the carrier, testified at the administrative hearing. He said that the claimant's medical records predating the automobile accident revealed no objective evidence of a median nerve compression or carpal tunnel syndrome. Furthermore, he said claimant's medical records for the period before the automobile accident did not mention an ulnar nerve problem in the right arm. He testified that if there was any reason for surgery, it was caused by the automobile accident and not the industrial injury. Claimant's physician, Dr. Bobb, testified that although the plaintiff had improved and was on regular work status, his symptoms returned in May 1989. Because the claimant's symptoms did not improve with treatment, Dr. Bobb considered wrist surgery and discussed it with the claimant before the automobile accident. Dr. Bobb testified that the industrial injury predisposed claimant to the aggravation suffered in the automobile accident. He causally related the condition requiring surgery to the original industrial injury. Dr. Bobb gave the claimant a five percent industrial disability for residual wrist symptoms involving the median nerve. The administrative law judge issued an award for further medical and temporary disability benefits. He concluded that an aggravation or new injury is a compensable consequence of an industrial injury if the industrial injury predisposes a claimant to further injury. He held that Dr. Bobb's testimony satisfied this test and accepted it over Dr. Rand's testimony. At the hearing, claimant confirmed that he was pursuing a tort claim against the driver of the vehicle that had rear ended him. Argonaut later claimed a lien under A.R.S. section 23-1023 on any monies recovered by the claimant as a result of the nonindustrial accident. Claimant denied that Argonaut had any right to a lien. The administrative law judge agreed and issued a supplemental award denying statutory lien rights. He later affirmed both the Award and Supplemental Award on administrative review. Argonaut then brought this special action. III. DISCUSSION A. The Range of Compensable Consequences of an Industrial Injury We follow the principles announced by this court in Mercante v. Industrial Comm'n, 153 Ariz. 261, 264, 735 P.2d 1384, 1387 (App. 1987); Dutton v. Industrial Comm'n, 140 Ariz. 448, 451, 682 P.2d 453, 456 (App. 1984); and East v. Industrial 26 Comm'n, 137 Ariz. 315, 317, 670 P.2d 420, 422 (App. 1983), and affirm the decision of the administrative law judge. The disability and need for treatment resulting from the aggravation of the hand and wrist injury in the automobile accident was a direct and natural consequence of the original industrial injury, entitling claimant to further medical and compensation benefits. We reach this conclusion for three reasons. First, Dr. Bobb testified that the industrial injury was not stable at the time of the nonindustrial automobile accident. Second, he said that the industrial injury predisposed the claimant toward further injury. Third, there was evidence the industrial injury was a substantial contributing factor to the disability and need for treatment triggered by the later automobile accident. Dr. Bobb testified he would probably have performed surgery for the injuries sustained in the industrial accident had the automobile accident not occurred. Thus, there is substantial evidence to support the conclusion that the aggravation of claimant's hand and wrist injury in the nonindustrial automobile accident is within the range of compensable consequences of the original industrial injury. Prior cases have adopted Professor Larson's general formula for the range of compensable consequences: "[A] subsequent injury, whether an aggravation of the original injury or a new and distinct injury, is compensable if it is the direct and natural result of a compensable primary injury." 1 A. Larson, The Law of Workmen's Compensation, § 13.11 at 3-503 (1990) (emphasis added), cited with approval in Mercante, 153 Ariz. at 264, 735 P.2d at 1387; Dutton, 140 Ariz. at 451, 682 P.2d at 456; O'Donnell v. Industrial Comm'n, 125 Ariz. 358, 360, 609 P.2d 1058, 1060 (App. 1979). The limits of the phrase "direct and natural result" are not defined in Arizona. We are, however, guided by the cases that hold that if the claimant's conduct is reasonable, a new injury or aggravation is a direct and natural result of an industrial injury if the industrial injury predisposed a claimant to further injury. E.g., Mercante, 153 Ariz. at 265, 735 P.2d at 1388; Dutton, 140 Ariz. at 452, 682 P.2d at 457. In Mercante, we interpreted dicta in East, 137 Ariz. at 317, 670 P.2d at 422, and said in some cases the link between a primary injury and the subsequent injury may be too weak to be compensable. Mercante, 153 Ariz. at 265, 735 P.2d at 1388. However, we held that because the orthopedist connected the ruptured disc to specific traumatic industrial "insults" there was a legally sufficient causal connection to support reopening of the claim. Id. at 266, 735 P.2d at 1389. Thus, Mercante, Dutton, and East stand for the proposition that the employee's reasonable conduct in causing a later nonindustrial injury does not relieve the employer of liability if the later injury is the "direct and natural result" of the compensable work injury. Put in another way, a later injury, whether an aggravation of the original injury or a new and distinct injury, is a "direct and natural" result of a compensable primary injury if the industrial injury predisposes a claimant to further injury. However, that is not the end of the inquiry. While workers' compensation laws are generally to be construed liberally in favor of the employee, a line must be drawn somewhere in cases involving later injuries. Otherwise, an employer who has discharged his obligation as to the original injury will become an insurer of every recurrence of the original injury. Thus, there must be a substantial causal relationship between the industrial injury and the later disability or need for treatment. See Mercante, 153 Ariz. at 265, 735 P.2d at 1388. If there is no such relationship, the later injury is beyond the range of compensable consequences of the primary industrial injury. B. The Causal Relationship Between the Industrial Injury and The Later Injury Sustained in the Automobile Accident We now apply the principles discussed in Mercante, Dutton, and East to this case. Dr. Bobb testified that the industrial 27 injury to the median nerve in the wrist predisposed claimant to reinjury of the wrist in the automobile accident. According to Dr. Bobb's testimony, the automobile accident "took each of those symptoms ... and ... aggravated them." Thus, because the claimant's wrist was already weakened by the work accident, the disability and treatment resulting from the reinjury of the median nerve in the wrist was clearly the "direct and natural" result of the industrial injury. The next issue is whether the causal relationship between the industrial injury and the need for treatment triggered by the automobile accident is strong enough to be the legal consequence of the industrial injury. East tells us that if the result of the work injury is a stabilized condition that would have remained that way but for the subsequent automobile accident, the later injury cannot "legally be the consequence of the original injury." Id. 137 Ariz. at 317, 670 P.2d at 422. See also Town of Hudson v. Wynott, 128 N.H. 478, 522 A.2d 974, 976 (1986) (if the worker's underlying condition has stabilized at the time of the accident, the subsequent accident is more likely to be beyond the range of compensable consequences); but see, Dutton, 140 Ariz. at 450-51, 682 P.2d at 455-56 (later nonindustrial aggravation of stabilized work injury which weakened disc in back and increased susceptibility to injury was within range of compensable consequences). Conversely, if the industrial injury has not stabilized, the later injury is more likely to be within the range of compensable consequences. Although not a factor in all cases, the stability of the injury is a significant factor in determining the range of compensable consequences in this case. Dr. Bobb testified, in substance, that claimant's work injury to the median nerve in the right wrist was not stable at the time of the automobile accident. The injury would have required surgery even if the automobile accident had not triggered the need for surgery. Dr. Bobb testified that claimant's symptoms returned in May, about one month before the automobile accident. Because claimant's symptoms recurred, Dr. Bobb discussed surgery with claimant before the automobile accident. Dr. Bobb testified "the medical approach to [claimant's] hand was leading us toward surgery right up until the time of the accident." He said that the condition requiring surgery was "related back" to the industrial accident. Although Dr. Bobb's testimony deviated from the written record, this merely created a credibility question for the administrative law judge. We must defer to his acceptance of Dr. Bobb's testimony. E.g., East, 137 Ariz. at 317, 670 P.2d at 422. Dr. Bobb's testimony clearly established a substantial causal relationship between the industrial injury and the reinjury or aggravation sustained in the automobile accident. The ulnar nerve injury is a more troublesome question. Dr. Bobb conceded that his office notes about the claimant's treatment never mentioned an ulnar nerve problem. He also testified that the ulnar nerve symptoms were "smoldering" before the accident and the accident "greatly aggravated" them. In addition, he attributed the ulnar nerve residual impairment to the automobile accident rather than the industrial injury. Thus, one can argue that the link is too weak between the industrial injury to the ulnar nerve and the aggravation of this injury caused by the automobile accident. However, we reject this argument for the following reasons. Dr. Bobb did testify that soon after the industrial injury, claimant began to develop reflex sympathetic dystrophy, a medical condition that commonly involves an injury to the ulnar nerve. He also explained that the physical therapist's notes documented these symptoms. Furthermore, he testified that when he operated, he saw evidence of compression of the ulnar nerve. He said that the surgical findings "were consistent with [his] clinical findings all along, both before and after the car accident." Finally, he testified that the accident took each of claimant's symptoms, and aggravated them. Although we might have reached a different conclusion, we defer to the findings 28 of the administrative law judge. He must resolve the issue of medical causation by considering any reasonable inference that can be drawn from the medical testimony. East, 137 Ariz. at 317, 670 P.2d at 422. Here, the industrial contribution to the ulnar nerve injury in the wrist was not as strong as the contribution to that injury from the automobile accident. However, we cannot say, as we did in East, that the later ulnar nerve injury was not the legal consequence of the original work injury. In the current case, the administrative law judge did not apply the East test. Argonaut, however, urged the administrative law judge to apply an incorrect test. Under these circumstances, we will affirm if the record would have supported the award under the correct test. Cf. Jaimes v. Industrial Comm'n, 163 Ariz. 307, 310-11, 787 P.2d 1103, 1106-07 (App. 1990) (noting alternative standard of review but applying independent judgment to determine if record supported award). Here, the record, taken in its entirety, supports the award. We are not persuaded by Argonaut's focus on the negligent conduct of the nonindustrial third party as a superseding cause of claimant's injury. The issue is not whether third-party conduct is negligent or even intentional, but whether the later injury or aggravation sustained as a result of such conduct is the substantial, direct, and natural result of a compensable work injury. If such relationship exists between the industrial injury and the later injury, the claimant is entitled to benefits unless the later injury was a result of claimant's unreasonable conduct. Here, the automobile accident regardless of how one characterizes the conduct of the third party causing it is simply a later nonindustrial event. It is no different than those cases in which the industrial injury, predisposing a claimant to further injury, is sufficiently related to the nonindustrial event so as to be compensable. See, e.g., Klosterman v. Industrial Comm'n, 155 Ariz. 435, 747 P.2d 596 (App. 1987) (later injury sustained while playing frisbee); Mercante, 153 Ariz. at 264, 735 P.2d at 1387 (later injury occurred when getting out of bed); Dutton, 140 Ariz. at 451, 682 P.2d at 456 (later injury suffered while drilling a safe). Claimant cites Larson and argues "[t]he issue ... is exclusively the medical issue of causal connection between the primary injury and the subsequent medical complications" unless a claimant's unreasonable conduct causes an aggravation or new injury. Larson, § 13.11(a) at 3-517 to -518. Although we recognize Professor Larson's authority and conflicting holdings from other jurisdictions,[1] we reject such a broad rule. We do this because Larson does not take into account the East and Mercante requirement that there be a substantial relationship between the work injury and the later disability or need for treatment. Even if a claimant's conduct is reasonable, the relationship between an industrial injury and a new injury or aggravation may, as a matter of policy, be too weak to be within the range of compensable consequences. However, here the circumstances are different. There is a substantial link between the primary work injury and the treatment and disability resulting from the later injury sustained in the automobile accident. C. A.R.S. § 23-1023 Does Not Grant Lien Rights to the Carrier in the Claimant's Potential Tort Recovery From a Nonindustrial Tortfeasor We hold that, as interpreted by Talley v. Industrial Comm'n, 137 Ariz. 343, 670 P.2d 741 (App. 1983), A.R.S. section 23-1023(C) confers on the carrier no lien rights against the claimant's recovery from a negligent, nonindustrial third party. The carrier does not support its argument that the denial of lien rights is a denial of equal protection under the federal and state constitutions 29 with any citation of authority. We, therefore, refuse to consider it. See Paros v. Hoemako Hosp., 140 Ariz. 335, 338, 681 P.2d 918, 920 (App. 1984). In Talley, the claimant suffered a work injury to his back. Despite the pain, he continued to work that day. The following day, claimant reinjured his back in a minor, nonindustrial automobile accident. Later, he sought medical treatment for a low back condition and sued the alleged negligent third party for damages. He also claimed compensation benefits. The carrier denied the claim on the ground the medical treatment and disability directly resulted from the automobile accident. The claimant protested. The Industrial Commission found the industrial claim to be compensable and issued an award for benefits. This court affirmed the award on appeal. The carrier, Argonaut, learned that the claimant had settled with the insurer of the driver involved in the nonindustrial automobile accident. Argonaut then issued a notice of claim status denying responsibility for benefits because the claimant had compromised a claim against a third-party tortfeasor without its approval. We rejected Argonaut's position. We held "the plain import of A.R.S. section 23-1023 is to allow carrier subrogation and settlement approval rights in the limited circumstance where a third-party tortfeasor injures an employee in the course and scope of his employment." 137 Ariz. at 346, 670 P.2d at 744. We adhere to our decision in Talley and again reject Argonaut's position. According to Talley, the carrier's lien in A.R.S. section 23-1023 applies only to third-party torts arising from the same facts as those supporting the compensation award. Here, because the alleged nonindustrial, third-party tort arose from facts unrelated to those upon which the commission based the compensation award, the carrier has no lien. The carrier argues that Talley stands for the proposition that the claimant cannot recover benefits from both the employer and the nonindustrial tortfeasor. It contends that the claimant in Talley conceded the workers' compensation benefits should be credited with the recovery from the third-party tortfeasor in order to avoid a double recovery. The decision in Talley, however, did not rest on this concession. On the contrary, Talley held that the initial award, affirmed in favor of claimant, "did not hold the carrier responsible for the effects of the separate automobile accident ...." Talley, 137 Ariz. at 347, 670 P.2d at 745. D. The Possibility of a Double Recovery by the Claimant Does Not Give Rise to a Lien The carrier argues that disallowing a lien may result in a double recovery for the employee. We agree. However, we follow our decision in Sunstate Equip. Corp. v. Industrial Comm'n, 135 Ariz. 477, 662 P.2d 152 (App. 1983). There, the employee was injured by an uninsured motorist while driving his employer's automobile in the course and scope of his employment. The employee was entitled to uninsured motorist benefits under his automobile policy. The employer claimed a lien against the uninsured motorist proceeds for workers' compensation benefits paid to the employee. We held that because the clear and unambiguous language of A.R.S. section 23-1023 did not grant lien rights against uninsured motorist proceeds, it was "legally immaterial" whether the denial of lien rights might "result [in] a double recovery for an employee and increased premiums for the employer ...." Id., 135 Ariz. at 479-80, 662 P.2d at 154-55. We reluctantly conclude that because A.R.S. section 23-1023, as interpreted by Talley and Sunstate, does not give a carrier lien rights in claimant's potential tort recovery from a nonindustrial tortfeasor the possibility of a double recovery is "legally immaterial." We also observe that, historically, the automatic assignment of an employee's third-party industrial tort claim to the carrier has proved to be a statute of limitations trap for both litigants and lawyers. The extension of the statute to third-party nonindustrial torts would compound an existing problem. Although we recognize the equities in Argonaut's *30 position, we decline to depart from precedent and create new lien rights. It is the function of the legislature to correct the problem if it so desires. CONCLUSION We affirm the administrative law judge's award. We conclude that the later nonindustrial injury sustained in the automobile accident was within the range of compensable consequences of the primary industrial injury. In addition, we hold that the carrier's lien claim is precluded by our decision in Talley. GRANT, P.J., and LANKFORD, J., concur. NOTES [1] Compare, e.g., Warpinski v. Indust. Ins. System, 103 Nev. 567, 747 P.2d 227 (1987) (employer liable if causal nexus between final condition and industrial injury; exact manner of second injury immaterial when industrial injury made condition more susceptible to further injury) with D'Angelo Plastering Co. v. Isaac, 393 So. 2d 1066 (Fla. 1981) (intervening negligence superseding cause).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367750/	68 Wash. App. 873 (1993) 846 P.2d 585 THE STATE OF WASHINGTON, Appellant, v. BENJAMIN H. ROBBINS, Respondent. No. 13984-7-II. The Court of Appeals of Washington, Division Two. March 4, 1993. C.C. Bridgewater, Prosecuting Attorney, and Douglas S. Boole, Deputy, for appellant. John A. Hayes, for respondent (appointed counsel for appeal). MORGAN, J. After a jury found Benjamin Robbins guilty of possession of cocaine with intent to deliver, the trial court granted his motion to arrest judgment. The State appeals, and we affirm. On March 15, 1990, at approximately 9 p.m., police officers executed a search warrant at Robbins's residence in Longview. They did not find any immediately identifiable controlled substances. However, they found three small plastic baggies and a spoon, as well as sales ledgers, cutting agents and paraphernalia tending to show that Robbins was a dealer in cocaine. 875 Later, the state toxicologist used infrared spectrography to find trace amounts of cocaine in the three baggies. Those amounts were not visible to the naked eye. The toxicologist also found trace amounts of cocaine on the spoon. Neither the cocaine in the baggies nor the cocaine on the spoon was in sufficient quantity to effect a sale. The State charged Robbins with possession of cocaine with intent to deliver, and the matter went to trial. The jury was instructed on both possession with intent to deliver and the lesser included offense of simple possession. It found Robbins guilty of possession with intent to deliver. After trial, Robbins moved to arrest judgment on grounds of insufficient evidence. The trial court ruled the evidence was insufficient to support a conviction for possession with intent to deliver,[1] but sufficient to support a conviction for the lesser included offense of simple possession. The trial court entered judgment on the lesser offense and sentenced Robbins to 2 months in the county jail. The State now appeals.[2] [1] When reviewing an order arresting judgment granted pursuant to CrR 7.4(a)(3), an appellate court's function is to determine "whether the evidence is legally sufficient to support the jury's finding." State v. Pleasant, 38 Wash. App. 78, 80, 684 P.2d 761, review denied, 103 Wash. 2d 1006 (1984). The evidence is sufficient if any rational trier of fact viewing it most favorably to the State could have found the essential elements of the charged crime beyond a reasonable doubt. State v. Green, 94 Wash. 2d 216, 221-22, 616 P.2d 628 (1980) (citing Jackson v. Virginia, 443 U.S. 307, 319, 61 L. Ed. 2d 560, 99 S. Ct. 2781 (1979)); State v. Rempel, 114 Wash. 2d 77, 876 82, 785 P.2d 1134 (1990); State v. Bingham, 105 Wash. 2d 820, 823, 719 P.2d 109 (1986); State v. Baeza, 100 Wash. 2d 487, 490, 670 P.2d 646 (1983). [2] Evidence is not sufficient to support a conviction for possession with intent to deliver unless a rational trier could find that the defendant possessed the same cocaine he intended to deliver. RCW 69.50.401(a) states that "it is unlawful for any person to ... possess with intent to ... deliver, a controlled substance", and the plain meaning of this language is that possession and intent to deliver refer to the same quantity of controlled substance. Moreover, this meaning was confirmed in United States v. Latham, 874 F.2d 852, 860-63 (1st Cir.1989), which involved a federal statute virtually identical to RCW 69.50.401(a).[3] There, the trial judge instructed that the defendant "need not have the intent to distribute the specific cocaine which he possesses in order to be guilty of this offense." (Italics omitted.) Holding this instruction to be erroneous, the Court of Appeals held: This instruction amounted to telling the jury that it could find Latham guilty of possession with intent to distribute cocaine even if the defendant did not intend to distribute the cocaine he in fact possessed, but if he had the intent to distribute some unspecified amount of cocaine, that he did not currently possess, at some unspecified time in the future. Such an interpretation of the statute is erroneous. The crucial words of the statute are "possess with intent to distribute a controlled substance." The common sense meaning of this language is that possession and intent to distribute refer to the same controlled substance. The instruction changes the statute to make it read: "possess a controlled substance and have a general intent to distribute at some time (the same or a different) controlled substance." This interpretation distorts the clear meaning of the statute. Latham, 874 F.2d at 861. In this case, Robbins possessed trace amounts of cocaine that were invisible to the naked eye, unusable and without value. There is no reasonable inference that he intended to deliver such amounts to someone else, and even when viewed *877 most favorably to the State, the evidence was not such that a rational trier could have so found beyond a reasonable doubt. [3] The State argues that there was an "overwhelming amount of evidence that the defendant was buying and selling drugs."[4] Assuming that to be true, such evidence warrants only an inference that the defendant intended to deliver cocaine not yet possessed, and such an inference will not support a conviction for possession with intent to deliver. The State argues that Robbins did not discard the three baggies because he intended to put new amounts of cocaine into them, then deliver the baggies and their contents including the trace amounts present in the baggies on March 15, 1990 to other persons. This argument fails because there is absolutely nothing to indicate that Robbins intended to use the three baggies to deliver cocaine in the future. [4] Lastly, the State argues that the trial court lacked authority to enter judgment on the lesser included offense of simple possession. An appellate court that reverses a conviction of possession with intent to deliver on grounds of insufficiency of the evidence may remand the case for entry of an amended judgment on the lesser included offense of possession, see State v. Cobelli, 56 Wash. App. 921, 925-26, 788 P.2d 1081 (1989); State v. Kovac, 50 Wash. App. 117, 121, 747 P.2d 484 (1987); State v. Liles, 11 Wash. App. 166, 170, 173, 521 P.2d 973, review denied, 84 Wash. 2d 1005 (1974), and it follows that a trial court which arrests judgment on a conviction of possession with intent to deliver can enter a judgment of guilt on simple possession, assuming of course that the elements of that lesser offense have been established. Affirmed. ALEXANDER, C.J., and SEINFELD, J., concur. NOTES [1] The trial court reasoned: "You can't tell without scientific examination that there was ever cocaine in these little baggies, and I don't feel that you can be convicted of possession with intent to deliver something you have that is nothing to sell or give away. It is unusable." Report of Proceedings, at 142. [2] The defendant does not cross-appeal his conviction for simple possession, and we do not disturb that conviction. [3] 21 U.S.C. § 841(a) provides that "it shall be unlawful for any person knowingly or intentionally (1) to ... possess with intent to ... distribute, or dispense, a controlled substance...." [4] Brief of Appellant, at 11.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367776/	432 F. Supp. 109 (1977) HALSTEAD INDUSTRIES, INC., Plaintiff, v. UNITED STEELWORKERS OF AMERICA and Local No. 7032 of United Steelworkers of America, Defendants. Civ. A. No. 76-1117. United States District Court, W. D. Pennsylvania. May 18, 1977. 110 Thomas W. King, III, Butler, Pa., for plaintiff. Carl B. Frankel, Pittsburgh, Pa., Bernard Kleiman, Chicago, Ill., for defendants. OPINION MARSH, District Judge. Halstead Industries, Inc. (Halstead) brings this action pursuant to 29 U.S.C. § 185(a) seeking a declaratory judgment that certain grievances are not arbitrable under the collective bargaining agreements between Halstead and defendant United Steelworkers of America (USW). The defendants have filed a counterclaim seeking an order compelling Halstead to submit the grievances to arbitration. Defendants have moved for summary judgment. 111 The grievances, which were filed in April, June, and August of 1975, concern the failure of Halstead to assign leadmen to certain bays on various shifts at Halstead's plant at Zelienople, Pennsylvania. Two of the grievances were filed by defendant Local No. 7032 of the USW (Local). The other two were filed by individual leadmen. (See attachments A-D, Defendants' Answer and Counterclaim). Leadmen are scheduled by Halstead to work in various bays at the Zelienople plant. Their chief responsibility is to expedite operations. They fill in where they are needed, assure that tools and materials are provided, and watch for potential bottlenecks in production. Whether Halstead is bound to arbitrate and what issues it must arbitrate are questions for the court, not the arbitrator. International Union of Operating Engineers, Local 150, AFL-CIO v. Flair Builders, Inc., 406 U.S. 486, 491, 92 S. Ct. 1710, 32 L. Ed. 2d 248 (1972); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S. Ct. 1318, 8 L. Ed. 2d 462 (1962). To answer these questions the court must examine the arbitration clause and any clauses excluding issues from arbitration. Article XVI, Section 8, of the agreements is entitled "Grievance Procedure" and provides in pertinent part: "(b) Grievances within the meaning of the Grievance Procedure and of this arbitration clause shall consist only of disputes about the interpretation or application of particular clauses of this Agreement and about alleged violations of the Agreement. The Arbitrator shall have no power to add to, or subtract from, or modify any of the terms of this Agreement. (c) Issues arising out of the exercise of the rights reserved to management under the title `Rights of Management' above shall not be subject to arbitration." Article III, Section 1, of the agreements is entitled "Management Rights" and provides in pertinent part: "Except to the extent expressly abridged by a specific provision of this Agreement, the Company reserves and retains, solely and exclusively, all of its Common Law rights to manage the business. The sole and exclusive rights of management which are not abridged by this Agreement shall include, but are not limited to, its right to determine the existence of facts which are the basis of a management decision; . . . to select and to determine the number and types of employees required; to assign work to such employees in accordance with the requirements determined by management; to establish and change work schedules and assignments; to transfer, promote, or demote employees, or to lay off, terminate or otherwise relieve employees from duty for lack of work or other legitimate reasons, to determine the fact of lack of work, . . . to suspend, discharge or otherwise to take measures as management may determine to be necessary for the orderly, efficient and profitable operation of its business all to the best regard of its employees." The court's jurisdiction to determine the arbitrability of this dispute is not undermined by the fact that the following clause from an earlier contract was deleted during the 1969 contract negotiations: "The question of arbitrability of any issue shall, if the Company or Union insists, be determined by the court and not by the arbitrator." According to the affidavit of Hubert Reed, chairman of the local union's grievance committee, Halstead had relied upon this clause in 1968 to obtain a federal district court ruling that a grievance over seniority rights was not arbitrable.[1] Reed states the clause was dropped in order to end "the possibility of going to court to obtain a ruling on arbitrability." 112 The Reed affidavit is challenged by the affidavit of Delorma Douthett, Vice-President of Halstead, who served on the negotiating committee on contract talks with the defendants in 1969. Whether extrinsic evidence from the negotiating parties may be admitted to aid in interpreting the collective bargaining agreement is not entirely certain. Local 13, International Federation of Professional and Technical Engineers, AFL-CIO v. General Electric Company, 531 F.2d 1178, 1183 n. 13 (3rd Cir. 1976). However, even if we admit the affidavit of Reed and disregard that of Douthett, the Reed affidavit itself indicates that the defendants failed to effectively insure that future disputes over arbitrability would be decided by an arbitrator and not by a court. In 1969, the law required that a party intending to place the question of arbitrability in the hands of the arbitrator bear "the burden of a clear demonstration of that purpose." United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 583 n. 7, 80 S. Ct. 1347, 1353, 4 L. Ed. 2d 1409 (1960). Eliminating a clause which stated that the question of arbitrability was for the court, without more, was not a clear demonstration of an intent to vest power in the arbitrator to decide the question of arbitrability. Absent a clause which plainly states that the question of arbitrability is for the arbitrator, this court cannot relinquish jurisdiction to decide the arbitrability of the matter sub judice. We now examine the primary question of whether or not the failure to assign leadmen creates an issue which must be arbitrated under the provisions of the collective bargaining agreements. Well-established federal labor policy favors arbitration as the means of resolving disputes over the meaning and effect of collective bargaining agreements. Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, AFL-CIO, 430 U.S. 243, 250-253, 97 S. Ct. 1067, 51 L. Ed. 2d 300 (1977). In order to effectuate this policy, the Supreme Court has established a strong presumption favoring arbitrability: "[T]o be consistent with the congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration, . . . [a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." Warrior & Gulf, supra, 363 U.S. at 582-583, 80 S.Ct. at 1353. Arbitration, however, is a matter of contract and a party cannot be compelled to arbitrate any matter in the absence of a contractual obligation to do so. An express provision excluding a particular clause from arbitration will suffice to exclude that claim from arbitration. Nolde Brothers, supra, 430 U.S. at 252, 97 S. Ct. 1067; Controlled Sanitation Corporation v. District 128 of the International Association of Machinists and Aerospace Workers, AFL-CIO, 524 F.2d 1324, 1328 (3rd Cir. 1975). In light of these principles, the issue here is whether Halstead's failure to assign leadmen is the exercise of a right reserved to Halstead under the management rights clause of Article III, Section 1. If Halstead has the right to assign leadmen under the management rights clause, then the issue concerning the failure to assign leadmen is not arbitrable because the exclusionary clause contained in Article XVI, Section 8(c), specifically excludes from arbitration "[i]ssues arising out of the exercise of the rights reserved to management under the title `Rights of Management'", i. e. issues arising out of the exercise of rights reserved in Article III, Section 1. We conclude that Halstead's decision not to assign leadmen is the exercise of a right reserved under the management rights clause of Article III, Section 1. Leadmen are a type of employee and Halstead has reserved the right to select the "types" of employees required. Individual leadmen have filed grievances over the 113 failure of Halstead to assign them work in certain bays and Halstead has reserved the right "to assign work to such employees in accordance with the requirements determined by management." Leadmen are scheduled by Halstead to work in various bays at its Zelienople plant, and Halstead has reserved the right to "change work schedules and assignments." The defendants rely heavily upon Warrior & Gulf, supra, 363 U.S. at 585, 80 S. Ct. 1347, where the Supreme Court found the exclusionary clause to be vague. Here, however, the exclusionary clause incorporates a specific list of management rights, including rights particularly applicable to the matter in dispute. As the Third Circuit stated in reference to a similar clause in an earlier agreement between these same parties: "Here, in our judgment, the language used in the Agreement is clear, precise and unambiguous, . . . especially the granting to management of the right to determine the facts necessitating any reduction in force, reciting them Indian fashion and with specificity." Halstead & Mitchell, supra, 421 F.2d at 1193. Defendants' argument that the exclusionary clause is vague must be rejected. Defendants contend that the rights reserved to Halstead in the management rights clause in Article III, Section 1,[2] are subordinate to other provisions in the remainder of the agreements, specifically Article V, Section 4, which governs changes in job descriptions and classifications; Article XIII, Sections 2 and 3, which deal with seniority rights in cases where the work force is reduced; and Article XXIII, Section 1, which provides that the company "shall continue to make reasonable provisions for the safety and health of its employees at the plants during the hours of their employment." Whether the three provisions cited by defendants expressly abridge Halstead's reserved right to assign leadmen at its discretion need not be decided. The grievances filed in this case do not rely upon any rights provided for in those three provisions. All four grievances filed here complain only about the failure to assign the job of leadman to certain bays on various shifts. None of the grievances raises an issue about changes in job descriptions or classifications under Article V, Section 4. The grievances filed do not complain that the failure to assign leadmen was an improper application of the established job evaluation and classification method.[3] The four grievances do not complain that the failure to assign leadmen resulted in a denial of seniority rights or in decreased plant safety. Thus, no issues are raised under Article XIII, Sections 2 and 3 or Article XXIII, Section 1. The defendants argue that interpreting what the grievances say is a "procedural" question which should be decided by the arbitrator under John Wiley & Sons v. Livingston, 376 U.S. 543, 84 S. Ct. 909, 11 L. Ed. 2d 898 (1964). Wiley, however, makes clear that the arbitrator's jurisdiction over "procedural" questions does not arise until after a court determination has been made that the subject matter of a dispute is arbitrable. 376 U.S. at 557, 84 S. Ct. 909. A court cannot determine if the subject matter of a dispute is arbitrable unless it examines the content of the grievances filed. Our examination of the arbitration and management rights clauses in these agreements persuades us that the clauses are not *114 susceptible to "an" interpretation which would cover the matter in dispute. Affiliated Food Distributors, Inc. v. Local Union No. 229, 483 F.2d 418, 422 (3rd Cir. 1973) (Adams, J., dissenting). See Local 13, International Federation of Professional and Technical Engineers, AFL-CIO v. General Electric, 531 F.2d 1178 (3rd Cir. 1976); Federation of Telephone Workers of Pennsylvania v. Bell Telephone of Pennsylvania, 406 F. Supp. 1201 (E.D.Pa.1975), aff'd mem., 546 F.2d 416 (3rd Cir. 1976), pet. for cert. denied, ___ U.S. ___, 97 S. Ct. 1651, 52 L. Ed. 2d 360 (1977). An appropriate order will be entered. NOTES [1] See Halstead & Mitchell Co. v. United Steelworkers of America, 69 LRRM 2124, 58 LC ¶ 12,941 (W.D.Pa.1968), aff'd, 421 F.2d 1191 (3rd Cir. 1969), which concerned Halstead's disregard of seniority rights during a temporary lay-off due to work fluctuation. [2] Article III, Section I provides in pertinent part: "Except to the extent expressly abridged by a specific provision of this Agreement, the Company reserves and retains, solely and exclusively, all of its Common Law rights to manage the business. The sole and exclusive rights of management which are not abridged by this Agreement shall include, but are not limited to . . .." (Emphasis supplied). [3] Article V, Section 4(b) provides: "The filing of a grievance involving the evaluation and classification of a new job or job change shall be limited to whether the new evaluation is based on the proper application of the Company's established job evaluation and classification method as provided for in the CWS Manual." (Emphasis supplied).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367787/	432 F. Supp. 1035 (1977) UNITED STATES of America v. Harry Richard SIAK. Crim. No. 77-65. United States District Court, W. D. Pennsylvania. June 13, 1977. 1036 John Paul Garhart, Asst. U. S. Atty., Pittsburgh, Pa., for plaintiff. Alan Carb, Pittsburgh, Pa., for defendant. OPINION ROSENBERG, District Judge. This matter is now before me on a proffered plea of guilty to all or some of the three counts in an indictment charging the defendant, Harry Richard Siak, with violation of the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 801 et seq. The various counts in the indictment charge the defendant with possession and distribution of cocaine as a narcotic and included in Schedule II of the statute. The defendant, however, conditions his proffered plea to a determination by me that cocaine is not a narcotic drug and as such should be treated in the same category as marijuana. Additionally, in his brief the defendant argues that the classification of cocaine as a narcotic is irrational and arbitrary resulting in a deprivation of liberty and property without due process of law, and in denial of equal protection under the law contrary to the Constitution of the United States. The defendant, however, cites no law or cases to back up these conclusory allegations. The defendant cites several cases, articles, magazines and the modern mores to base his assertion that cocaine is not a narcotic in the true sense of the word. Even assuming that I concur with his reasoning and beliefs, the facts still remain clear, that the Congress of the United States has not re-acted by reclassifying cocaine and I cannot circumvent its authority today by doing so myself. The defendant insists that cocaine is not a narcotic. That it is incumbent upon me to accept his plea on a basis which would lessen the severity of the imposition of a sentence. Congress has defined cocaine as a narcotic drug under the Act at 21 U.S.C. § 802(16) which states: "(16) The term `narcotic drug' means any of the following, whether produced directly or indirectly by extraction from substances of vegetable origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis: (A) Opium, coca leaves, and opiates. (B) A compound, manufacture, salt, derivative, or preparation of opium, coca leaves, or opiates. (C) A substance (and any compound, manufacture, salt, derivative, or preparation thereof) which is chemically identical with any of the substances referred to in clause (A) or (B). Such term does not include decocainized coca leaves or extracts of coca leaves, which extracts do not contain cocaine or ecgonine." While not referring to cocaine expressly, I take judicial notice that cocaine is a coca leaves derivative (Webster's Third New International Dictionary at page 434) and therefore considered a narcotic for the purposes of the Act. Listed on Schedule II of Schedules of controlled substances is the following, 21 U.S.C. § 812(c), Schedule II(a)(4): "(4) Coca leaves and any salt, compound, derivative, or preparation of coca leaves, and any salt, compound, derivative, or preparation thereof which is chemically equivalent or identical with any of these substances, except that the substances shall not include decocainized coca leaves or extraction of coca leaves, which extractions do not contain cocaine or ecgonine." Again, cocaine is a derivative of coca leaves. Being classified as both narcotic and Schedule II drug, the distribution or possession of cocaine is therefore a prohibitive act for which there is a penalty under 21 U.S.C. 1037 § 841(b)(1)(A) and not subsection (B) as the defendant would have us analogize it to distribution or possession of marijuana. While modern medicine may struggle with the definitions, theory and effect of cocaine, and others preach of liberalization and reform, my obligation is to perform under the mandate of Congress and to this I will adhere. Congress classifies cocaine as a narcotic and a Schedule II drug and as such the appropriate penalties will be imposed for any violations of their control. United States v. Harper, 530 F.2d 828, C.A.9, 1976; United States v. Smaldone, 484 F.2d 311, C.A.10, 1973; United States v. Umentum, 401 F. Supp. 746 (D.C.Wis.1975); United States v. Castro, 401 F. Supp. 120 (D.C.Ill.1975); United States v. Amidzich, 396 F. Supp. 1140 (D.C.Wis.1975); United States v. DiLaura, 394 F. Supp. 770 (D.C. Mass.1974); United States v. Hobbs, 392 F. Supp. 444 (D.C.Mass.1975); United States v. Miller, 387 F. Supp. 1097 (D.C.Conn.1975); United States v. Brookins, 383 F. Supp. 1212 (D.C.N.J.1974). The defendant also makes a vain attempt in alleging constitutional infirmities with the present classification of cocaine. However, there is an obvious rational basis for its classification as a Schedule II drug and its reason for being controlled to prevent abuse. Any deprivation under the Fifth Amendment or any violation of the Equal Protection Clause is minimal and negated when balanced against the Government's concern in controlling an abusive drug. United States v. Castro, supra; United States v. Amidzich, supra; United States v. Brookins, supra. What the defendant urges is that I alter both the Congressional statute and the indictment. This I cannot do. I must accept both as they come before me and as they charge the defendant. Should the defendant continue to disagree with Congress and the wording of the indictment that his violation of the statute dealt with cocaine as a narcotic, it will be incumbent upon him not to plead and to stand trial upon the factual or legal aspects as he raises them and as he might be able to prove them. If he desires to plead guilty, the plea must be to the indictment as it is based upon the statute as Congress wrote it. In this sense only is it appropriate for me to accept a plea and to make a fair and just determination of an appropriate sentence in accord with the law and as the facts present themselves in the case. Under the circumstances the defendant may choose to stand on his plea of not guilty and go to trial, or plead to the indictment as it is written. Should he make the choice, he will do so within the next ten (10) days and notify the Clerk so that the matter may proceed as quickly as possible.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265762/	163 Cal. App. 4th 303 (2008) AZURE LIMITED, Plaintiff and Appellant, v. I-FLOW CORPORATION, Defendant and Respondent. No. G038167. Court of Appeals of California, Fourth District, Division Three. May 27, 2008. 305 Shapiro, Rodarte & Freedman, Carl W. Shapiro, Leora D. Freedman and Thomas W. Foote for Plaintiff and Appellant. Gibson, Dunn & Crutcher, Jeffrey H. Reeves, J. Scot Kennedy and John N. Carter for Defendant and Respondent. OPINION IKOLA, J. Plaintiff Azure Limited owned nearly 19,000 shares of defendant I-Flow Corporation's stock. Plaintiff alleged defendant wrongly transferred the shares to the State of California as escheated property without notice. The court granted judgment on the pleadings, finding the Unclaimed Property Law (UPL) (Code Civ. Proc., § 1500 et seq.)[1] immunized defendant from any such liability. 306 (1) We disagree. The UPL immunizes corporations from civil liability only when they transfer escheated shares to the state in compliance with the provisions of the UPL. The UPL does not immunize corporations like defendant who allegedly transfer nonescheated shares to the state without giving the required notice. We reverse. THE ALLEGED FACTS According to its complaint, plaintiff acquired nearly 95,000 shares of defendant's stock in 1990. It exchanged those shares in 1993 for almost 19,000 new shares pursuant to a reverse stock split. In 2003, plaintiff learned defendant had transferred its shares to the state as escheated property. Plaintiff asked the state to return its shares; the state told plaintiff it would receive any proceeds from the sale of its shares. In November 2004, when defendant's common stock traded for $17.72 per share, plaintiff learned the state had sold its shares in June 2003 for $4.62 per share. Plaintiff sued defendant for breach of fiduciary duty. It alleged defendant knew its location at all times, wrongly treated the shares as escheated, and transferred the shares to the state without giving any notice. It sought to recover the difference between the sales proceeds and the shares' fair market value as of November 2004. The court granted judgment on the pleadings, finding the UPL granted absolute immunity to defendant. It entered judgment for defendant accordingly. DISCUSSION "Review of a judgment on the pleadings requires the appellate court to determine, de novo and as a matter of law, whether the complaint states a cause of action. [Citation.] For purposes of this review, we accept as true all material facts alleged in the complaint." (Ott v. Alfa-Laval Agri, Inc. (1995) 31 Cal. App. 4th 1439, 1448 [37 Cal. Rptr. 2d 790] (Ott).) "Under the [UPL], certain types of unclaimed property escheat[] to the state. [Citation.] The law has two objectives: (1) protect unknown property owners by locating them and restoring their property to them, and (2) give the state, rather than the owners of the unclaimed property, the benefits of holding the property, since experience shows most abandoned property will never be claimed." (Fong v. Westly (2004) 117 Cal. App. 4th 841, 844 [12 Cal. Rptr. 3d 76].) Three of the UPL's provisions are relevant here. 307 First, the UPL sets forth when corporate stock escheats to the state. It provides, "[A]ny intangible interest in a business association, as evidenced by the stock records or membership records of the association, escheats to this state if (1) the interest in the association is owned by a person who for more than three years has neither claimed a dividend or other sum referred to in subdivision (a) nor corresponded in writing with the association or otherwise indicated an interest as evidenced by a memorandum or other record on file with the association, and (2) the association does not know the location of the owner at the end of the three-year period." (§ 1516, subd. (b).) (2) Second, it requires corporations to notify shareholders of potentially escheated stock. It provides, "With respect to any interest that may escheat pursuant to subdivision (b), the business association shall make reasonable efforts to notify the owner by mail that the owner's interest in the business association will escheat to the state. The notice shall be given not less than 6 nor more than 12 months before the time the interest in the business association becomes reportable to the Controller in accordance with this chapter." (§ 1516, subd. (d).) The corporation must report escheated stock to the state annually before November 1. (§ 1530, subd. (d).) Third, it requires corporations to transfer escheated stock to the state and immunizes them from any civil liability for doing so. It provides that the corporation "shall deliver a duplicate [stock] certificate to the Controller" when it files its report. (§ 1532, subd. (d); § 1532, former subd. (b); see id., former subd.(a).)[2] It further provides, "Upon delivering a duplicate certificate... the holder ... shall be relieved from all liability of every kind to any person ... for any losses or damages resulting to that person by the issuance and delivery to the Controller of the duplicate certificate...." (§ 1532, subd. (d); see id., former subd. (b).) Defendant asserts it has immunity from liability for allegedly transferring plaintiff's shares. It contends the UPL grants it immunity even if it violated the UPL by transferring nonescheated shares with knowledge of plaintiff's location and without giving notice. 308 Defendant relies heavily upon Harris v. Verizon Communications (2006) 141 Cal. App. 4th 573 [46 Cal. Rptr. 3d 185] (Verizon). In that case, the plaintiff asserted breach of fiduciary duty and other causes of action against the defendant, who had allegedly transferred the plaintiff's shares to the state without notice. (Id. at p. 577.) The trial court sustained the defendant's demurrer, and the Verizon court affirmed. (Id. at pp. 577, 579.) It held, "the immunity conferred by the UPL is absolute" (id. at p. 577), and "the fact that [the defendant] allegedly failed to comply with the UPL's notice requirements thus cannot diminish the absolute immunity conferred by" the UPL. (144 Cal.App.4th at p. 578.) Any other interpretation "would render the immunity meaningless because immunity comes into play when, and only when, the defendant is charged with wrongdoing." (Ibid.) We decline to follow Verizon for three reasons. First, Verizon's discussion of the notice requirement is unnecessary dicta. The UPL did not yet have a notice requirement when the shares in that case were transferred: "Harris's claim that [the defendant] failed to comply with the notice requirements of section 1516, subdivision (d), ignores the fact that this notice requirement was not adopted until 1993, about three years after Harris's stock escheated." (Verizon, supra, 141 Cal.App.4th at p. 578, fn. 9, italics added.) Thus, the court had no reason to decide whether the UPL immunized a corporation that violated the notice requirement. "[G]eneral observations unnecessary to [a] decision ... are dicta, with no force as precedent." (Fireman's Fund Ins. Co. v. Maryland Casualty Co. (1998) 65 Cal. App. 4th 1279, 1301 [77 Cal. Rptr. 2d 296] [declining to follow dicta].) (3) Second, Verizon misconstrued the UPL. Immunity applies only to "[t]he holder of any interest under subdivision (b) of Section 1516." (§ 1532, subd. (d); § 1532, former subd. (b), italics added.) And a "holder" under the UPL is, inter alia, "any person in possession of property subject to this chapter belonging to another...." (§ 1501, subd. (e), italics added.) As relevant here, the property "subject to this chapter" is described in section 1516 as "intangible interests in a business association, as evidenced by the stock records or membership records of the association," that "escheat[] to th[e] state" when (1) the shareholder fails to claim a dividend or correspond with the corporation for three years, and (2) the corporation does not know the shareholder's location. (§ 1516, subd. (b).) "With respect to the interest, the business association shall be deemed the holder." (Ibid.) Thus, plaintiff's stock ownership interest is not "subject to this chapter" unless the conditions 309 of escheat are met. And, by definition, defendant does not become a "holder" until the property is, in fact, "subject to this chapter." Thus, defendant is a "holder" of an interest and has statutory immunity only if plaintiff's shares "escheat[ed] to th[e] state"i.e., only if plaintiff failed to claim dividends or communicate for three years and defendant did not know its location. (§ 1516, subd. (b).) But plaintiff alleged defendant knew its location at all times. Accepting this allegation as true (Ott, supra, 31 Cal.App.4th at p. 1448), we conclude plaintiff's shares did not escheat to the state, defendant was not a holder of an interest under section 1516, subdivision (b), and thus defendant does not qualify for immunity under the UPL.[3] (4) Third, we agree with the dissenting opinion in Verizon. The dissent concluded "the UPL's immunity provisions cannot reasonably be interpreted to apply to the circumstances here, where plaintiffs allege that [the defendant] breached a fiduciary duty to give them a fair opportunity to prevent the operation of the UPL in the first instance." (Verizon, supra, 141 Cal.App.4th at p. 580 (dis. opn. of Mallano, J.).) Under the analysis of the dissenting opinion in Verizon, there is no immunity for wrongful acts predating the transfer of shares to the state. The dissent noted "the language of section 1532, subdivision (b) provides immunity only for losses and damages resulting from `the issuance and delivery to the Controller of the duplicate [stock] certificate.'" (Verizon, supra, 141 Cal.App.4th at p. 585 (dis. opn. of Mallano, J.).) Thus, "[i]f plaintiffs suffered damages because [the defendant's] conduct prevented them from exercising their right to sell their stock before [the defendant] delivered the shares to the Controller ..., then such damages would not have resulted from the issuance 310 and delivery of the duplicate certificates to the Controller. Plaintiffs' damages would have resulted from conduct which antedated any obligation of [the defendant] under the UPL to deliver the plaintiffs' stock to the Controller." (Id. at pp. 585-586 (dis. opn. of Mallano, J.).) In contrast, "[t]here is no language in sections 1532, 1321, or 1560, which purports to provide immunity for holders based on wrongful conduct which caused damage to plaintiffs before duplicate certificates are delivered to the Controller." (Id. at p. 586.) The Verizon dissent aptly invoked the policy underlying the UPL. "[T]he first purpose of the UPLto reunite plaintiffs with their unclaimed propertycan only be furthered by permitting plaintiffs to pursue their claims against [the defendant]. Affording [the defendant] immunity for the alleged breaches of fiduciary duty here would provide no incentive to [the defendant] ever to honor its duties to its minority shareholders in connection with their stock ownership and attendant rights, an absurd result that cannot be imputed as the Legislature's intention." (Verizon, supra, 141 Cal.App.4th at p. 586 (dis. opn. of Mallano, J.).) The Verizon dissent's analysis is persuasive. Section 1532, subdivision (d) provides immunity for liability resulting from "the issuance and delivery to the Controller of the duplicate [stock] certificate...." Here, plaintiff's claim stems from the alleged prior wrongful conduct of (1) characterizing plaintiff's stock as escheated property when it was not; and (2) failing to give notice of that determination to plaintiff. The UPL required defendant to notify plaintiff about the potential escheatment six to 12 months before defendant filed its report and transferred the shares to the state. (§ 1516, subd. (d).) Had defendant done so, plaintiff would have been able to contact defendant and (presumably) prevent the very transfer of its shares that triggered defendant's purported immunity. (5) And as the Verizon dissent notes, any other construction of the immunity provision is absurd. Defendant and the Verizon majority would read the UPL as immunizing reckless transfers of nonescheated shares to the state without notice. Such overbroad immunity would remove any "incentive to [a corporation] ever to honor its duties to its minority shareholders in connection with their stock ownership and attendant rights." (Verizon, supra, 141 Cal.App.4th at p. 586 (dis. opn. of Mallano, J.).) More alarmingly, it would immunize intentional wrongdoing. It would allow corporations to oust troublesome minority shareholders with impunity simply by transferring their 311 shares to the state without notice, regardless of whether the shares were ever truly escheated. "We presume the Legislature did not intend such an absurd result." (City of Cotati v. Cashman (2002) 29 Cal. 4th 69, 77 [124 Cal. Rptr. 2d 519, 52 P.3d 695].) Contrary to the concerns of defendant and the Verizon majority, construing the UPL as immunizing only corporations that comply with the UPL does not render the immunity worthless. (Verizon, supra, 141 Cal.App.4th at p. 578.) Corporations that comply with the UPL are immunized from claims that the corporations breached contractual or fiduciary duties over and above the UPLthey are immunized from claims that they should have done more than the UPL requires. The value of this immunity is not lessened by maintaining the liability of corporations that do less than the UPL demands. And defendant wrongly contends the Legislature implicitly adopted Verizon's construction of the immunity provision. In 2007, after Verizon was decided, the Legislature amended subdivision (a) of section 1532, added new subdivisions, and redesignated subdivision (b)the immunity provisionas subdivision (d) without change. (Stats. 2007, ch. 179, § 4.) (6) We do not see how a nonsubstantive renumbering of the subdivision containing the immunity provision constitutes a legislative endorsement of Verizon, or anything other than an attempt to make room for new subdivisions. "Legislative silence is a poor beacon to follow in discerning the proper statutory route," as the United States Supreme Court reminds us. (Zuber v. Allen (1969) 396 U.S. 168, 185 [24 L. Ed. 2d 345, 90 S. Ct. 314].) "Congressional inaction frequently betokens unawareness, preoccupation, or paralysis. `It is at best treacherous to find in congressional silence alone the adoption of a controlling rule of law.' ... Where, as in the case before us, there is no indication that a subsequent Congress has addressed itself to the particular problem, we are unpersuaded that silence is tantamount to acquiescence, let alone ... approval...." (Id. at pp. 185-186, fn. 21; accord, Aaron v. SEC (1980) 446 U.S. 680, 694, fn. 11 [64 L. Ed. 2d 611, 100 S. Ct. 1945] [Congress did not endorse SEC's interpretation of securities law when it amended securities statutes without overruling that interpretation, "since the legislative consideration of those statutes was addressed principally to matters other than that at issue here"].) We see no positive indication from the Legislature that it intended to immunize corporations that flout the UPL. 312 DISPOSITION The judgment is reversed. The matter is remanded with directions to the court to vacate its order granting the motion for judgment on the pleadings and to enter a new order denying the motion. Plaintiff shall recover its costs on appeal. Bedsworth, Acting P. J., and Fybel, J., concurred. NOTES [1] All further statutory references are to the Code of Civil Procedure. [2] When defendant allegedly transferred plaintiff's shares, section 1532, former subdivision (a), provided that the stock be transferred when the report was filed, and former subdivision (b) contained the transfer and immunity provision. In 2007, section 1532, subdivision (a), was amended to require a seven-month delay between filing the report and transferring the stock, and subdivision (b) was redesignated without change as subdivision (d). (Stats. 2007, ch. 179, § 4.) [3] Defendant argues that the word "holder," as used in section 1532, subdivision (d), is not limited to those corporations whose stock records show the existence of shares satisfying the conditions of escheat, but refers instead more broadly to any corporation that makes a transfer of duplicate stock certificates to the state, even though the shares represented by the certificate do not meet the conditions of escheat. Defendant notes in this regard that the Legislature knew how to refer to "escheated property," and its failure to specifically use that phrase in the immunity provision signifies that immunity was not so limited. As an example, defendant notes that section 1561 requires the state to defend transferors of "escheated property," defined as "property which this chapter provides escheats to this state." (§ 1561, subds. (a), (c).) But this reference to "escheated property" does not entail that the immunity provision applies to shares that have not escheated. Under section 1516, until the conditions of escheat are met, the corporation possesses merely its records of stock ownership evidencing the shareholders' ownership interests. It does not become the "holder" of that interest for purposes of the UPL until the property has escheated. And only a "holder" is entitled to the statutory immunity.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265679/	62 Md. App. 686 (1985) 491 A.2d 595 JOHN D. WALDRON, JR. v. STATE OF MARYLAND. No. 853, September Term, 1984. Court of Special Appeals of Maryland. May 8, 1985. Sally C. Chester, Baltimore (Roland Walker and Walker, Rubin & Van Bavel, P.A., Baltimore, on brief), for appellant. Richard B. Rosenblatt, Asst. Atty. Gen. (Stephen H. Sachs, Atty. Gen. Baltimore, Warren B. Duckett, Jr., State's Atty. and Susan Bayly, Asst. State's Atty. for Anne Arundel County, Annapolis, Md. on brief), for appellee. Argued before BISHOP, ALPERT and ROBERT M. BELL, JJ. ROBERT M. BELL, Judge. Appellant, John D. Waldron, Jr., was tried by a jury in the Circuit Court for Anne Arundel County. He was convicted of kidnapping, armed robbery, and use of a handgun in the commission of a crime of violence, and sentenced to a total of twenty-five years imprisonment. Appellant presents the following issues on appeal: 1. Whether the arbitrary curtailment of the cross-examination of a material State's witness with regard to her motive to lie requires that appellant's conviction be reversed? 2. Whether the admission of irrelevant and highly prejudicial evidence as to collateral matters constituted error by the trial court? 3. Whether the trial court's failure to exercise its discretion to impose sanctions for the State's violation of discovery rules requires appellant's conviction to be reversed? 4. Whether the trial court erroneously admitted appellant's past convictions into evidence? 1. Appellant alleges that he was denied his constitutional right to confront a witness against him when the trial court arbitrarily restricted his counsel's cross-examination of Margaret Herron with regard to her motive to lie. Herron, a State witness, testified to acts and admissions made by appellant, subsequent to the robbery, while he was visiting Florida.[1] On July 5, 1983, Richard Spies, the owner of Edgewater Liquors, was accosted by a gunman as he left his establishment to deposit his weekend receipts in a local bank, was placed in an automobile driven by a second gunman, and was thereby transported to an elementary school, where he was robbed. Upon notifying the police, he described one of the gunmen, whom he "knew from the neighborhood", as being between the ages of 28 and 32, 6 feet tall, 275-290 lbs., with a full beard and mustache, close-cropped tightly curled hair and immaculately dressed in a white shirt and dark pants and sunglasses. Prior to the trial, Spies participated in the preparation of a composite drawing and artist sketch of that man. He also selected a 1977 photograph of appellant from among a group of six photographs and identified appellant as the robber from some surveillance photographs of appellant, taken outside appellant's home shortly after the robbery.[2] At trial, Spies testified that the robber was 5' 5" tall, weighed 290 lbs. and was between 32 and 39 years of age. When identifying appellant, he noted that the robber was fatter, better groomed and had curlier hair than the appellant. At that time, appellant was 5'8" tall, weighed more than 205 lbs.[3] and did not have tightly curled hair or a beard and mustache.[4] Herron's testimony was extensive and incriminating. She testified that appellant, whom she had known for about twelve years, arrived in Florida on July 12, 1983 and stayed with her until the end of July. At that time, he "had a lot of money"[5] that he said he got from "... a liquor store holdup" in his neighborhood in Maryland.[6] She related part of a conversation between appellant and Mike Mitchell,[7] from which she learned that Mike Mitchell "did the holdup with Johnny". Herron described two handguns, brought to Florida by Mitchell; the description was consistent with the guns used in the robbery.[8] Testimony was also given relative to appellant's appearance. Herron said that when appellant arrived in Florida, "[h]e had curly hair and a full beard and a mustache, healthy looking." When appellant left, "he had decided to shave ... just to change his look, his I.D." She testified that appellant's appearance at trial was different in that he no longer had curly hair, had lost 20-30 lbs., and was clean shaven. Finally, Herron testified as to appellant's use of drugs, marijuana and cocaine. She testified that, "Johnny smoked about two or three jays[9] a day" and used about 1/4 ounce of cocaine per day "towards the end";[10] the money to pay for the cocaine came from the robbery;[11] and that when appellant left Florida, he took his drugs with him. On cross-examination, the following colloquy occurred: [BY KIRBY Appellant's Counsel] Q. Were you involved in the possession of a large amount of marijuana? MS. BAYLEY (Asst. State's Attorney): Objection, your Honor. COURT: Overruled. A. Yes, I was. Q. How much marijuana? A. You mean at this time or you mean all times or what? Q. Well, at any time. MS. BAYLEY: Objection, Your Honor COURT: Well ... sustained. Q. Right around the time of July, the last time . .. A. Johnny's trying to tell you November the 2nd sir. Can I help you out? Q. Sure. A. Okay. Q. Tell us about it. MS. BAYLEY: Your Honor, I object to November 2nd. COURT: 1983? A. Yes, can I tell you about it ... COURT: 1983? Was it? A. Yes, can I tell you about it ... COURT: All right, I'll sus- ... A.... without having a bunch of ... COURT: No. A. Okay. COURT: Sustained. After inquiring into the witness' criminal history and learning that she had never been convicted counsel inquired: Q. You were charged with the marijuana? MS. BAYLEY: Objection, Your Honor. COURT: Sustained. Appellant then sought to learn if the State paid her travel expenses to Maryland and where she was residing while here: Q. Did the State's attorney send you money to come up here and testify? A. I was ... MS. BAYLEY: Objection, Your Honor. A. I was subpoenaed to come up here. I had no choice in the matter. I'm also subpoenaed to tell the truth. Q. The question was ... the question was ... MS. BAYLEY: Your Honor, I'm going to object to to the question. COURT: Sustained. Q. Were you paid anything to come in here and testify? A. I was paid no money to come in here to testify, no sir? Q. And you're staying at your own ... your're staying overnight and you're paying for that, too, is that right? A. I don't think I have to tell you where I'm staying overnight, do I sir? COURT: No. MR. KIRBY: I didn't say where, Your Honor, I just asking who's paying for it. COURT: It doesn't matter. MS. BAYLEY: Objection, Your Honor. COURT: Sustained. Cross-examination is the vehicle by which the right of confrontation is given substance. Douglas v. Alabama, 380 U.S. 415, 85 S. Ct. 1074, 13 L. Ed. 2d 934 (1965). Thus, it is a matter of right, not a privilege. State v. DeLawder, 28 Md. App. 212, 344 A.2d 446 (1975). It is "[t]he tool available to each side to test the believability of the testimony ...". State v. Cox, 298 Md. 173, 468 A.2d 319 (1983). As such, cross-examination may be directed at generally attacking the credibility of witnesses or examining the presence or absence of bias or motivation for testifying. Davis v. Alaska, 415 U.S. 308, 94 S. Ct. 1105, 39 L. Ed. 2d 347 (1974), State v. Cox, supra, Johnson and Walters v. State, 30 Md. App. 512, 352 A.2d 371 (1976). The Supreme Court stated the rule in Davis v. Alaska, supra, 415 U.S. at 316, 94 S. Ct. at 1110 when it said: The introduction of evidence of a prior crime is thus a general attack on the credibility of the witness. A more particular attack on the witness' credibility is effected by means of cross-examination directed toward revealing possible biases, prejudices, or ulterior motives of the witness as they may relate directly to the issues or personalities in the case at hand. The partiality of a witness is subject to exploration at trial, and is "always relevant as discrediting the witness and affecting the weight of his testimony". 3A J. Wigmore Evidence § 940, p. 775 (Chadbourn rev. 1970). We have recognized that the exposure of a witness' motivation in testifying is a proper and important function of the constitutionally protected right of cross-examination. Mere accusations of crime or misconduct generally may not be used to impeach a witness unless they are relevant to the credibility of that witness, Cox v. State, supra, or they tend to show that a prosecution witness is under pressure to testify favorably for the State. Johnson and Walters v. State, supra. No proffer need be made prior to making inquiry, for, although necessarily exploratory, it is presumptively proper: Counsel often cannot know in advance what pertinent facts may be elicited on cross-examination. For that reason it is necessarily exploratory; and the rule that the examiner must indicate the purpose of his inquiry does not, in general apply ... It is the essence of a fair trial that reasonable latitude be given the cross-examiner, even though he is unable to state to the court what facts a reasonable cross-examination might develop. Prejudice ensues from a denial of the opportunity to place the witness in his proper setting and put the weight of his testimony and his credibility to a test, without which a jury cannot fairly appraise them. Alford v. U.S., 282 U.S. 687, 692, 51 S. Ct. 218, 219, 75 L. Ed. 624 (1931) (Citations omitted) The right of cross-examination is not unlimited. The allowance of questions on cross-examination and the determination of their relevance are normally reserved for the sound discretion of the trial judge and will not normally be disturbed absent an abuse of discretion. State v. Cox, supra, Kruszewski v. Holz, 265 Md. 434, 290 A.2d 534 (1972), Fletcher v. State, 50 Md. App. 349, 437 A.2d 901 (1981). Nevertheless, Where ... the trial judge, as trier of fact and of credibility, limits cross-examination of a witness so as to preclude a demonstration of bias, prejudice or other unworthy motivation on the part of the witness, he prevents the defense from presenting all of the facts, forestalls an adequate basis for assessment of credibility and erodes the purpose of cross-examination ... Deinhardt v. State, 29 Md. App. 391 [348 A.2d 286] (1975). This constitutes a basis for reversal. Fletcher v. State, supra, Johnson and Walters v. State, supra. This is especially true when the witness is a "key witness".[12]See, State v. Cox, supra. In the case sub judice, appellant was foreclosed from inquiry into whether Herron was under indictment in Florida and the extent to which, if at all, her expenses or housing were paid by the State in return for her testimony. Appellant advises us that the thrust of his questions was to elicit testimony from which it could have been concluded that Herron had reason, from either fear or favor, to testify favorably for the State. The test of admissibility of evidence to show possible bias or prejudice or motivation to testify is: ... whether the question asked is directed at eliciting from a prosecution witness the fact that he may be under pressure to testify favorably for the State, as when he is under formal accusation, and/or incarceration awaiting trial. Johnson and Walters, supra 30 Md. App. at 516, 352 A.2d 371. Cross-examination to show coercion should only be allowed where it appears that there is a present possibility of coercion. Id. at 517, 352 A.2d 371. Ordinarily, the thrust of the inquiry will be revealed by the question, however, although not required, it may be supplied by proffer. When no proffer is made, the questions must clearly generate the issue what the examiner is trying to accomplish must be obvious. Thus, in the absence of a proffer, the clarity with which the issue is generated will determine whether the court's restriction of cross-examination constitutes an abuse of discretion.[13]Rowe v. State, 62 Md. App. 486, 490 A.2d 278 (1985); Godwin v. State, 38 Md. App. 716, 382 A.2d 596, vacated on other grounds, 284 Md. 85, 403 A.2d 785 (1978). This rule is necessary to insure that on appeal, a trial judge's exercise of discretion can be fairly and accurately assessed. Medley v. State, 52 Md. App. 225, 231, 448 A.2d 363 (1982). In the case sub judice, no proffer was made and the questions, whether considered singly or as a group, did not so clearly generate the issue of bias so as to render the court's rulings an abuse of discretion. The State argues that the inquiry went to the crime, not to the simple fact of pretrial incarceration or to eliciting from the witness whether she was under pressure to testify favorably for the State in conjunction with pending proceedings against her. In the absence of a proffer, or a clear indication from appellant's counsel as to what he was driving at, the State's argument has merit. 2. The trial court admitted evidence which appellant contends was highly prejudicial and went beyond the scope of proper and fair cross-examination, the cumulative effect of which cast doubt and suspicion on his case. Appellant alleges that the State failed to substantiate the innuendos which it raised on the cross-examination of appellant, thus, denying appellant a fair trial. At trial, appellant was asked on cross if he had told his former attorney about his alibi witnesses. Although he answered in the affirmative and talked freely about his communications with his attorney, appellant now contends that the inquiry was into a privileged communication and was improper and irrelevant. The attorney-client privilege is alive and well in Maryland. Md. Code Ann., Courts and Judicial Proceedings Article § 9-108. Only the client may waive the privilege, Beckette v. State, 31 Md. App. 85, 355 A.2d 515 (1976), but once the confidential matter has been disclosed and is no longer secret, the privilege disappears. Harrison v. State, 276 Md. 122, 345 A.2d 830 (1975). In any event, since appellant did not object to the questioning, the issue has not been preserved for appellate review.[14] Maryland Rule 1085. Similarly, because appellant did not object to any of the questions, his argument that the State's cross-examination of appellant as to his financial status at the time of his arrest was collateral to the ultimate issue of his guilt is not preserved for appellate review. Maryland Rule 1085. Conceding that his involvement "with drugs" may be relevant as a possible motive for the armed robbery, appellant, nonetheless, urges that "the manner in which [a]ppellant was asked about hypothetical ulcers in his nose and the presence of marijuana residue in a bag in Rita Edmondston's car as well as the allegations that he had gone to Florida to purchase drugs was intended to cast suspicion on [a]ppellant." Characterizing the questions as "highly prejudicial and irrelevant", unsupported by admissible and competent evidence, appellant, relying on People v. Wells, 100 Cal. 459, 34 P. 1078 (1893), argues that the State's cross-examination, in the form and on the subjects as to which complaint is made, was improperly allowed. We disagree. Wells, supra, prohibits the cross-examination of a witness by asking questions known to be "improper and unjustifiable". Appellant conceded in the colloquy on his motion for mistrial that the basis for the State's questions was the offense report. He does not suggest that the questions asked by the State were asked with knowledge of falsity or impropriety, rather he complains about their relevancy. We find Wells, supra inapposite. The situation presented here is not one in which the State asked questions known to be "improper and wholly unjustifiable." Furthermore, we are satisfied that, not only were the questions proper subjects of cross-examination, but the examination itself was proper. State v. Cox, supra, DeLilly v. State, 11 Md. App. 676, 276 A.2d 417 (1971). 3. The next argument advanced by appellant is that the trial court erred in refusing to impose sanctions upon the State for failure to disclose surveillance photographs. Surveillance photographs were admitted into evidence over appellant's objection. Initially, the objection was that "although timely requested, the State failed to provide him with access to such pictures prior to trial." Pursuant to that objection, appellant sought either exclusion of the photographs or the opportunity to orally move to suppress them when they were offered for admission into evidence. Appellant contends that the trial judge denied his request to make an oral motion to suppress; the record reflects otherwise: MR. KIRBY: ... if that's the case, Your Honor, I didn't file specifically and I had my reasons for not even filing a motion to suppress, but I think that I would ask that perhaps if there's anything .. . if it comes into a close issue of being tainted, I would ask you to allow me to at least orally have a motion to suppress aside from the jury, notwithstanding the fact that I have one in writing. MS. BAYLEY: Your Honor, I don't understand. COURT: Well, when they're offered he can make a motion to suppress them. MS. BAYLEY: Your Honor, my understanding is that once the trial has started, his mandatory motions cannot be made. COURT: Well, it's just a question of whether you admit them, or not. It's not really a motion to suppress. It's whether they're admissible. That would be based on the discovery. MR. KIRBY: Thank you, Your Honor. Later, when the photographs were offered into evidence, appellant objected to two of them on the grounds that they were prejudicial. Appellant did not request a suppression hearing out of the presence of the jury, nor did he enter a general objection to the admissibility of all of the photographs. Therefore, with the exception of the two photographs to which he objected, this issue has not been preserved for review. Maryland Rule 1085, Forrester v. State, 224 Md. 337, 167 A.2d 878 (1961), Townsend v. State, 11 Md. App. 487, 275 A.2d 191 (1971). Nor are we able to review the photographs as to which an objection was made. We have no way of knowing for sure which two photographs were objected to since appellant did not identify them by reference to their identification number. We have reviewed all photographs, however, and we do not discern any error in their admission. 4. Appellant's final contention is that his criminal record was erroneously admitted into evidence. Appellant did not object to the use of the convictions at trial. His only objection was to the form of the question. The issue has not been preserved. Maryland Rule 1085. See also Jackson v. State, 288 Md. 191, 416 A.2d 278 (1980) and von Lusch v. State, 279 Md. 255, 368 A.2d 468 (1977). JUDGMENTS AFFIRMED; COSTS TO BE PAID BY APPELLANT. NOTES [1] Margaret Herron was a resident of Florida. [2] Sgt. Lynn of the Anne Arundel County police department, after viewing the composite drawing, advised Officer McDonald that the drawing looked like the appellant. Officer McDonald then conducted surveillance of appellant's home and took pictures of him, which were subsequently shown to Spies. [3] Appellant testified that on July 5, 1983, he weighed about 205 lbs. and that as of the date of trial, he weighed more. [4] Appellant testified he shaved his beard and mustache off in Florida because he was breaking out in cold sores. [5] The witness testified that appellant gave her about $300 "to help her with her financial affairs and gave Rita Edmonston $4,000 to buy a used car." [6] Ms. Herron said that appellant acknowledged that he knew the person who he had robbed also lived in the neighborhood and that he had made a mistake in letting the person he robbed go free. [7] Mike Mitchell was the driver of the getaway car used in the robbery and at trial was also referred to as Kenny Miscamin. [8] The victim, Richard Spies, testified that during the robbery he observed two guns; appellant had a "large barrel gun" and the driver had a smaller gun, "like a Saturday night special, or something like that." [9] A "jay" is a marijuana cigarette. [10] She said appellant was using cocaine about once every one or two hours for about ten days. [11] Ms. Herron estimated that cocaine cost "about $2,000 per ounce" at that time. [12] Here, Herron was an important State's witness. Through Herron it was established that appellant had changed his appearance between July and the date of trial. She detailed the fact that his hair was different and that he had lost weight. In addition, through her, appellant's admission to having committed the crime was revealed and a third party was implicated. Although the State produced other evidence, including identification evidence by the prosecuting witness, it is not difficult to see how the case was considerably strengthened by Herron's testimony. Without her testimony, a conviction may not have been obtained. [13] For example, the trial judge's ruling on the question, "You were charged with the marijuana?" was correct since mere accusations of crime or misconduct may not be used to impeach a witness. State v. Cox, supra. [14] If the issue had been preserved, we would find that appellant waived the privilege. See, Harrison, supra.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/8312908/	Eldon E. Fallon, U.S. District Court Judge 623Before the Court are two motions to dismiss without prejudice filed by Plaintiffs 624Herman LeBlanc, R. Doc. 569, and Donnie Beasley, R. Doc. 572. The motions are opposed. R. Doc. 579. Plaintiffs have filed a reply. R. Doc. 590. Having heard oral argument on the motions on April 3, 2019, R. Doc. 594, considered the applicable law, and the arguments of the parties, the Court is now ready to rule.I. BACKGROUNDPlaintiffs in the instant Lester action were allegedly exposed to naturally occurring radioactive material ("NORM") associated with the cleaning of used oilfield pipe at pipe yards in Harvey, Louisiana, including the "Grefer Tract," nearby tracts of land, and tracts of land in other locations in Louisiana, Texas, Mississippi, and Oklahoma. These Plaintiffs are individuals residing in several states who either worked at, or lived near, these facilities. The Lester Plaintiffs, a number of whom allege to have contracted cancer from NORM, seek damages for personal injury, medical monitoring, property damage, and punitive damages.Lester has a lengthy procedural history. In 2002, over 600 Plaintiffs filed a single petition (the "Lester petition") seeking damages in Civil District Court for the Parish of Orleans, State of Louisiana. Since 2002, the state court proceedings have disposed of various Plaintiffs' claims through "trial flights," settlements, or other dismissals, such that just over 500 Plaintiffs now remain. The state court has systemically grouped up to twelve Plaintiffs' like-claims together for trial flights. According to Plaintiffs, none of the completed trial flights have had preclusive effect on subsequent trial flights.One of the Plaintiffs included in the Lester petition was Cornelius Bottley, who died from esophageal cancer in 2012. On July 16, 2014, three members of his surviving family filed a separate Bottley action, also in Civil District Court in Orleans Parish. On July 31, 2014, with an upcoming trial flight, these Bottley Plaintiffs moved the state court to transfer and consolidate their case with the Lester state action. Based on this motion for consolidation, Bottley Defendant Exxon Mobil Oil removed both Lester and Bottley to this Court under the Class Action Fairness Act ("CAFA"). Plaintiffs moved to remand the cases to state court. This Court, however, denied remand on October 23, 2014, and consolidated Lester and Bottley. R. Docs. 45, 46. The Court explained that Plaintiffs' motion to consolidate in state court constituted a "proposal for joint trial," particularly where over 500 plaintiffs remained at the time the motion to consolidate was filed. Thus, CAFA bestowed federal "mass action" jurisdiction. Plaintiffs appealed this decision, and in June 2018, the Fifth Circuit upheld this Court's denial of the motion to remand. R. Doc. 383. Subsequently, on January 31, 2019, Shell moved for summary judgment; however, after finding there were still significant issues of material fact regarding Shell's contribution to Plaintiffs' injuries, the Court denied Shell's motion. R. Doc. 566.The instant motions relate to two Lester Plaintiffs-Donnie Beasley and Herman LeBlanc. These Plaintiffs' claims have been pending in this action since 2005. R. Doc. 569-1 at 1; R. Doc. 572-3 at 1. On December 19, 2016, Beasley was diagnosed with a bone tumor on his spine, which was subsequently determined to be multiple myeloma. R. Doc. 572-3 at 2. On July 30, 2018, LeBlanc was diagnosed with bladder cancer. R. Doc. 569-1 at 2. Rather than amending their claims in the instant matter to include additional defendants, Beasley and LeBlanc filed separate suits in 625Louisiana State Court.1 R. Doc. 572-3 at 1. Of the nine defendants in the state court action, seven are also defendants before this Court in Lester.2II. PENDING MOTIONBoth Beasley and LeBlanc filed motions pursuant to Federal Rule of Civil Procedure 41(a)(2) seeking dismissal of their claims before this Court without prejudice. R. Doc. 569-1 at 1; R Doc. 572-3 at 1. In their motions, Plaintiffs assert they filed their claims in state court to avoid naming additional defendants in the Lester mass action. R. Doc. 569-1 at 1; R Doc. 572-3 at 1. Next, Plaintiffs contend Defendants will not suffer any legal prejudice if the claims currently before this Court are dismissed. Id. Finally, Plaintiffs argue the state forum offers them an opportunity to have their cases tried more quickly in light of the recent developments in their cancers, which they contend could become more severe "quickly[,] without warning." R. Doc. 569-1 at 5; R Doc. 572-3 at 5.In opposition, Defendants argue they will suffer legal prejudice should the Court dismiss Plaintiffs and their claims without prejudice. R. Doc. 579 at 4. In support of their argument, Defendants point to two factors the Fifth Circuit has identified as constituting legal prejudice that Defendants contend are present in this case. R. Doc. 579 at 4. First, Defendants argue Plaintiffs' motions to dismiss are a way to escape an adverse ruling from this Court and circumvent to an expected adverse result in state court. R. Doc. 579 at 4-5. Specifically, Defendants submit Plaintiffs merely seek to avoid this Court's denial of the motion to remand Lester , which has been affirmed by the Fifth Circuit. R. Doc. 579 at 4; R. Doc. 383. With respect to their pending claims in state court, Defendants argue Plaintiffs' motions for voluntary dismissal are a means to circumvent a potentially adverse ruling in the state court proceeding-namely, a stay of their state court cases under the exception of lis pendens. R. Doc. 579 at 6. Second, Defendants contend the far stage at which this litigation has reached cautions against dismissal. Defendants assert they have expended substantial amounts of time, money, and effort litigating this case over sixteen years, five of which have been before this Court following removal. R. Doc. 579 at 7. Defendants also argue judicial efficacy supports denial of Plaintiffs' motions. R. Doc. 579 at 8.In their reply, Plaintiffs contend Defendants' claim that they will be prejudiced by a dismissal without prejudice is "legally insignificant." R. Doc. 590 at 1. Because granting the motion would not prejudice Defendants as to "some legal interest, some legal claim, some legal argument," such as "the loss of an affirmative defense ... [or a] statute of limitations [defense]," Plaintiffs argue Defendants will not suffer any legal prejudice. Id. at 1-2. Plaintiffs further contend that the discovery undergone so far in the Lester action would be applicable to the case whether Plaintiffs' claims proceed in this Court or in state court. Id. at 2. Thus, Plaintiffs argue, "There will be no additional expense, work or other prejudice if LeBlanc and Beasley are permitted to proceed in state court." Id. at 3.626III. LEGAL STANDARDFederal Rule of Civil Procedure 41(a)(2) provides that, in certain circumstances, an action may be voluntarily dismissed without prejudice "at the plaintiff's request only by court order, on terms that the court considers proper." FED. R. CIV. P. 41(a)(2). In general, motions for voluntary dismissal under Rule 41(a)(2) should be freely granted "unless the defendant will suffer some plain legal prejudice other than the mere prospect of a second lawsuit." Manshack v. Sw. Elec. Power Co. , 915 F.2d 172, 174 (5th Cir. 1990). As the Fifth Circuit has explained, a defendant may suffer plain, legal prejudice from a plaintiff's voluntary dismissal without prejudice if any of the following factors are present: (1) the plaintiff seeks dismissal after an adverse ruling or to circumvent an expected adverse result; (2) the case has proceeded far in the litigation; or (3) dismissal would strip the defendant of an otherwise available defense. Id. The mere fact that a plaintiff "may obtain some tactical advantage over the defendant in future litigation is not ordinarily a bar to dismissal." Ikospentakis v. Thalassic Steamship Agency , 915 F.2d 176, 177 (5th Cir. 1990). Further, the Fifth Circuit has noted "that additional expense will be incurred in relitigating issues in another forum will not generally support a finding of 'plain legal prejudice' and denial of a Rule 41(a)(2) motion to dismiss." Elbaor v. Tripath Imaging, Inc. , 279 F.3d 314, 317 n.3 (5th Cir. 2002) (citing Manshack , 915 F.2d at 174, n.2 ). But see Hartford Acc. & Indem. Co. v. Costa Lines Cargo Services, Inc. , 903 F.2d 352, 360 (5th Cir. 1990) ("Where the plaintiff does not seek dismissal until a late stage and the defendants have exerted significant time and effort, the district court may, in its discretion, refuse to grant a voluntary dismissal.").IV. ANALYSIS"The purpose of Rule 41(a)(2) is primarily to prevent voluntary dismissals which unfairly affect the other side, and to permit the imposition of curative conditions." 9 Charles Wright & Arthur Miller, Federal Practice and Procedure § 2364 at 165 (1971) (citations omitted). "If the court finds that legal prejudice does not exist, then the motion should be granted." Stephens v. Cap. Cty. Mut. Fire Ins. Co. , No. 09-759, 2009 WL 10707943, at 3 (E.D. Tex. Nov. 23, 2009). Thus, the Court will consider in turn each of Defendants' arguments that they will suffer legal prejudice if the Court grants Plaintiffs' motions.a. Avoiding an Adverse RulingDefendants first argue Plaintiffs' motions are an attempt to avoid this Court's order denying Plaintiffs' motion to remand and the Fifth Circuit's ruling affirming that order. Next, Defendants contend granting Plaintiffs' motion would deprive them of their lis pendens defense in Plaintiffs' pending state court actions.3 Because these two issues are intertwined, the Court considers them together.In Phillips v. Illinois Central Gulf Railroad. , 874 F.2d 984, 987-88 (5th Cir. 1989), after the Texas district court transferred venue to Louisiana, the defendant moved for summary judgment based on Louisiana's 627one-year prescription period, a defense evident on the face of the plaintiff's complaint. Id. at 985. The plaintiff then moved for dismissal without prejudice seeking to refile his suit in state court, as the prescription period in other possible jurisdictions exceeded the statute applicable in Louisiana, which the district court denied. Id. Faced with an adverse summary judgment on the statute of limitations, the plaintiff appealed the district court's denial of his Rule 41(a)(2) motion. The Fifth Circuit affirmed, holding that a dismissal without prejudice would have legally prejudiced the defendant, as the statute of limitations had not expired in Texas or Mississippi, where the plaintiff intended to refile. Id. at 987. Because allowing the plaintiff to refile his claim in a different venue would strip the defendant of an absolute defense, the circuit court affirmed the district court's denial of the Rule 41(a)(2) motion. Id.Contrastingly, in Manshack v. Southwestern Electric Power Co. , 915 F. 2d 172 (5th Cir. 1990), the Fifth Circuit considered the district court's grant of the plaintiffs' motion for dismissal without prejudice. There, the defendant argued the plaintiff sought dismissal solely to avoid the district court's adverse choice-of-law ruling. The Fifth Circuit affirmed the dismissal on appeal, distinguishing its holding in Phillips . As the Fifth Circuit explained, regardless of the venue, the defendant would be "governed by exactly the same choice of law principles in Texas federal or state court," and therefore, unlike the defendant in Phillips , the defendant in Manshack would "not be stripped of an absolute defense." Id. at 175.In this case, the adverse ruling Defendants point to is this Court's denial of Plaintiffs' motion to remand. The Court notes at the outset that forum shopping is an insufficient basis upon which to establish legal prejudice. Brown v. Schlumberger Tech. Corp. , No. 01-3755, 2002 WL 550986, at 2 (E.D. La. Apr. 11, 2002). The issue before this Court is more akin to the issue presented in Manshack than the issue before the Fifth Circuit in Phillips . As was the case in Manshack , here Plaintiffs' claims will be governed by the same law whether they proceed in state court or in this court. See Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Moreover, even assuming Plaintiffs are attempting to avoid this Court's denial of their motion to remand, the Fifth Circuit affirmed the district court's grant of the plaintiffs' motion to dismiss without prejudice in Manshack , despite the district court's having previously denied the plaintiffs' motion to remand. Thus, the Court will not deny Plaintiffs' motion on this basis.With respect to Defendants' losing the availability of their lis pendens exception in state court, this defense is not absolute, such as an exception based on the statute of limitations; rather, the exception of lis pendens simply forces the case to proceed in the court in which the case was first filed. Again, the same law would apply to Plaintiffs' claims regardless of whether the case proceeds in state or federal court. Because granting Plaintiffs' motion to dismiss would not "allow [P]laintiff[s] to select a different body of law unfavorable to [D]efendant[s'] position," the Court will not deny Plaintiffs' motion to dismiss on this basis. See Manshack , 915 F.2d at 175.b. Timing, Cost, and Other ConsiderationsFinally, Defendants argue they will suffer legal prejudice from the dismissal of these two Plaintiffs, as (1) this case has been pending before this Court since August 2014, (2) the parties have undergone extensive motions practice, and (3) allowing both this CAFA mass action and the 628two prospective individual actions to proceed simultaneously will force Defendants to litigate substantially similar claims in multiple venues. In support of their position, Defendants point to Stephens v. Capitol County Fire Insurance Co. , No. 09-759, 2009 WL 10707943, at 3 (E.D. Tex. Nov. 23, 2009) and Bullard v. Burlington Northern Santa Fe Railway Co. , No. 07-6883, 2008 WL 4104355 (N.D. Ill. Aug. 29, 2008).In Stephens , the plaintiffs initially filed suit in state court, but the defendants subsequently removed the case pursuant to CAFA. 2009 WL 10707943, at 1. After the court denied the plaintiffs' motion to remand, the plaintiffs sought voluntary dismissal of their claims. Id. , at 2. The defendants opposed the motion, arguing they would suffer legal prejudice. Id. The court disagreed, noting (1) that the deadline for dispositive motions was a year away, suggesting "[n]either party ha[d] expended significant effort or expense in preparing for trial"; (2) the plaintiffs were not seeking to return to state court in order to "evade a likely adverse ruling"; and (3) the plaintiffs sought "to dismiss the entire putative class action rather than a portion of Plaintiffs' claims." Id. , at 3-4. Thus, the court concluded the defendants would not suffer any legal prejudice and granted the plaintiffs' 41(a)(2) motion.In Bullard , the plaintiffs also initially filed their case in state court, but had their claims removed to federal court pursuant to CAFA. 2008 WL 4104355, at 1. Unlike Stephens , however, following the court's denial of the plaintiffs' motion to remand, 53 out of 144 plaintiffs moved to have their cases dismissed without prejudice. Id. Because the plaintiffs sought dismissal of some, but not all, of their cases, the court denied the plaintiffs' motion, reasoning that "[t]o dismiss fifty-three plaintiffs from this case unconditionally without prejudice would subject defendants to the possibility of litigating suits based on the same claims in both this Court and in state court-a circumstance that would largely defeat the purpose of CAFA and significantly increase the expense and effort required of defendants preparing for and trying at least two trials." Id. , at 10 (footnote omitted).In this case, not only are Plaintiffs seeking to dismiss only two of their claims, both LeBlanc and Beasley have refiled their claims in two separate state courts. Thus, allowing dismissal of LeBlanc's and Beasley's claims would require Defendants to defend suits based on substantially similar claims in three different venues. Moreover, unlike the posture of the case in Stephens , which had only been pending for a short time, this case has been pending before this Court since August 2014. See R. Doc. 1. Since removal, the Court has ruled on Plaintiffs' motion to remand, which was affirmed by the Fifth Circuit, and, although the Court found it was filed prematurely, the Court has also considered Defendants' motion for summary judgment. While the Court does not find Plaintiffs filed their motion to dismiss to avoid these rulings, the Court does find the parties have invested substantial time and effort in litigating this case and therefore will suffer legal prejudice should the Court grant Plaintiffs' motions to dismiss. Moreover, Plaintiffs have not offered any curative actions this Court could take to prevent Defendants from suffering legal prejudice. As a result, the Court will deny Plaintiffs' motions to dismiss without prejudice.For the foregoing reasons;IT IS ORDERED that the motions to dismiss without prejudice filed by Plaintiffs Herman LeBlanc, R. Doc. 569, and *629Donnie Beasley, R. Doc. 572, be and hereby are DENIED .On March 24, 2017, Beasley filed suit in the 24th Judicial District Court for Jefferson Parish; on November 26, 2018, LeBlanc and his wife filed suit in the 16th Judicial Court for the Parish of St. Mary.The exception of lis pendens , Latin for "suit pending," is embodied in Louisiana Code of Civil Procedure article 531, which provides: "When two or more suits are pending in a Louisiana court or courts on the same transaction or occurrence, between the same parties in the same capacities, the defendant may have all but the first suit dismissed by excepting thereto as provided in Article 925. When the defendant does not so except, the plaintiff may continue the prosecution of any of the suits, but the first final judgment rendered shall be conclusive of all."	01-03-2023	10-17-2022
https://www.courtlistener.com/api/rest/v3/opinions/1726332/	465 So. 2d 639 (1985) Thomas C. WHEELER, Appellant, v. STATE of Florida, Appellee. No. 84-882. District Court of Appeal of Florida, Second District. March 22, 1985. *640 Thomas C. Wheeler, pro se. Jim Smith, Atty. Gen., Tallahassee and Theda James Davis, Asst. Atty., Gen., Tampa, for appellee. RYDER, Chief Judge. Thomas C. Wheeler, pro se, appeals from a plea of nolo contendere in which he specifically reserved the right to appeal the trial court's denial of his motion to dismiss. In 1982, appellant was convicted on a cocaine possession charge. He filed a supersedeas bond and appealed the conviction. In March of 1983, the state charged appellant with carrying a concealed firearm, possession of a firearm by a convicted felon and discharging a firearm in public. In his motion to dismiss, appellant alleged that he could not be charged with possession of a firearm by a convicted felon because the charge was based upon a prior felony conviction which was still pending on appeal and, therefore, he was not a felon for purposes of conviction under section 790.23, Florida Statutes (1981). The court denied the motion. Appellant then entered a plea of nolo contendere and specifically reserved the right to appeal the denial of his motion to dismiss. Appellant's cocaine possession conviction was affirmed by this court on June 17, 1983. Wheeler v. State, 436 So. 2d 114 (Fla. 2d DCA 1983). At the time the court considered appellant's motion to dismiss, his conviction had not yet been affirmed by the appellate court. A conviction is not final and cannot be relied upon to convict a subsequent felony offender until the appellate court affirms the conviction. Joyner v. State, 158 Fla. 806, 30 So. 2d 304, 305 (1947). The trial court should have dismissed the possession of a firearm by a convicted felon charge. Cf. State v. Villafane, 444 So. 2d 71, 72 (Fla. 4th DCA 1984); Coleman v. State, 281 So. 2d 226, 227 (Fla. 2d DCA 1973). Consequently, we reverse the trial court and set aside the judgment and sentence on the charge of felonious possession of a firearm. DANAHY and SCHOONOVER, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/3095038/	Case: 12-20226 Document: 00512680229 Page: 1 Date Filed: 06/27/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED No. 12-20226 June 27, 2014 Summary Calendar Lyle W. Cayce Clerk UNITED STATES OF AMERICA, Plaintiff-Appellee v. ELEAZAR FLORES, Defendant-Appellant Appeal from the United States District Court for the Southern District of Texas USDC No. 4:09-CR-275-12 Before KING, DAVIS, and ELROD, Circuit Judges. PER CURIAM: * We withdraw the prior panel opinion, and substitute the following: Eleazar Flores, federal prisoner # 86573-279, appeals from his mid- guideline range sentence of 150 months imposed following his guilty plea conviction for possession with intent to distribute 100 kilograms or more of marijuana. Flores argues that the district court improperly considered his bare arrest record in determining his sentence and that the Government has * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Case: 12-20226 Document: 00512680229 Page: 2 Date Filed: 06/27/2014 No. 12-20226 not carried its burden of demonstrating that the district court would have imposed the same sentence absent its reliance on that invalid factor. Because Flores did not object in the district court to the consideration of his arrests, review is for plain error, Puckett v. United States, 556 U.S. 129, 135 (2009), and the burden is on Flores to show that there is a reasonable probability that the district court would have imposed a lesser sentence if it had not considered his bare arrest records. United States v. Johnson, 648 F.3d 273, 278 (5th Cir. 2011). Flores is correct that a district court may not consider a bare arrest record that contains no information about the circumstances of the defendant’s conduct that resulted in the arrest. See United States v. Windless, 719 F.3d 415, 420 (5th Cir. 2013). The district court may have committed clear or obvious error in considering those of Flores’s arrests that were not sufficiently described. 1 However, in the context of plain error review, even if the district court errs in considering bare arrests, the court must determine whether the consideration of the arrests in conjunction with other permissible factors had an effect on the defendant’s substantial rights or seriously affected the fairness and integrity of the judicial proceedings. United States v. Williams, 620 F.3d 483, 495 (5th Cir. 2010). A review of the sentencing transcript reflects that in addition to any consideration of Flores’s prior arrests, the district court considered the seriousness of Flores’s drug offense, his managerial role in the offense, his continued use of drugs, and the fact that he was convicted of several offenses that were not taken into consideration in determining his criminal history. 1 The presentence investigation report lists a number of Flores’s arrests. Although some of these arrest records were bare because they provided only “the mere fact of an arrest,” others were not and provided more detail regarding the circumstances leading to the arrest. See United States v. Harris, 702 F.3d 226, 229 (5th Cir. 2012). 2 Case: 12-20226 Document: 00512680229 Page: 3 Date Filed: 06/27/2014 No. 12-20226 The record shows that the district court gave significant weight to several valid 18 U.S.C. § 3553(a) factors and does not reflect that it gave undue weight to Flores’s prior unexplained arrests. Flores has not demonstrated that the district court would have imposed a lesser sentence if it had not considered the record of his bare arrests. Thus, he failed to show a substantial impact on his rights. See Williams, 620 F.3d at 96. In the absence of demonstrating an error that had a detrimental effect on his substantial rights, Flores cannot show that such error had an effect on the fairness, integrity, or public reputation of the judicial proceedings. United States v. Jones, 489 F.3d 679, 682-83 (5th Cir. 2007). Therefore, the district court did not commit plain error in imposing the mid-guideline sentence. Flores’s sentence is AFFIRMED. 3	01-03-2023	10-16-2015
https://www.courtlistener.com/api/rest/v3/opinions/1726350/	735 N.W.2d 204 (2007) STATE v. ABRAHAMSON. No. 06-0383. Court of Appeals of Iowa. May 23, 2007. Decision without published opinion. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265654/	491 A.2d 1144 (1985) Louis B. SMITH, Jr., Appellant, v. UNITED STATES, Appellee. No. 82-1710. District of Columbia Court of Appeals. Argued March 12, 1985. Decided May 8, 1985. 1145 Blair Brown, Public Defender Service, Washington, D.C., with whom James Klein and Randy Hertz, Public Defender Service, Washington, D.C., were on briefs, for appellant. Lynn Lincoln Sarko, Asst. U.S. Atty., Washington, D.C., with whom Joseph E. diGenova, U.S. Atty., and Michael W. Farrell, Asst. U.S. Atty., Washington, D.C., were on brief, for appellee. Before FERREN and ROGERS, Associate Judges, and PAIR, Associate Judge, Retired. PAIR, Associate Judge, Retired: Following a jury trial, appellant was convicted of one count of armed robbery, D.C. Code §§ 22-2901, -3202 (1981),[1] and one count of carrying a pistol without a license, id. § 22-3204. As his principal ground for reversal, appellant maintains that the government failed to comply with its discovery obligations under Super.Ct.Crim.R. 16(a)(1)(A), as evidenced by its use at trial of previously undisclosed statements he had made to a police detective. Appellant also submits that his trial was tainted by several instances of prosecutorial misconduct. Finally, appellant contends that the trial court erred when it entered an enhanced sentence for the pistol charge without having conducted a hearing pursuant to D.C.Code § 23-111(b) (1981). We find two of these arguments compelling. Accordingly, we reverse and remand for a new trial.[2] I. The Trial Testimony This case evolved from events occurring at the Greyhound Bus Terminal in Northwest Washington on January 23, 1982. Charles Bell, the complainant and the government's principal witness at trial, was a passenger on a bus en route to Charleston, South Carolina from Philadelphia, Pennsylvania. During a half-hour layover in Washington, Bell got off the bus and entered the terminal to use the restroom. He recounted at trial that on stairs leading to the restroom he encountered appellant and briefly engaged in conversation. They both then entered the restroom and used its facilities. Bell testified that as he was about to leave an unidentified man approached him and asked to borrow some change. Bell responded that he did not have any change but that he would go upstairs to get some and then return. At this point, appellant interjected that he had change and gave fifty cents to Bell. As the money was being relayed to the borrower, appellant pulled out a gun, robbed Bell, and then fired it. Bell stated that he then ran upstairs and summoned a security guard, who responded to the situation by pulling a chain across the stairway, thereby cordoning off the exit. 1146 In the meantime, the police were called. As Bell and the security guard awaited their arrival, appellant appeared in the stairwell and began to make gestures toward Bell. Bell interpreted these gestures to mean that appellant was willing to return money Bell claimed had been stolen. Consequently, Bell, accompanied by the guard, went down the stairway and retrieved his money, his wallet, and the wallet's contents.[3] Bell testified that on his return appellant said: "Okay, Man, you've got your stuff and everything, why don't you be cool and let me go and everything." Appellant was later arrested.[4] At trial, appellant's version of the critical events was in stark contrast to the account offered by Bell. Appellant denied having robbed Bell and posited the converse as truehe claimed that Bell had robbed him in the restroom of the bus terminal. Appellant testified that when he entered the restroom he saw that six or seven men were involved in a dice game and that Bell was one of them. After using the facilities, appellant joined Bell and the others in the game by "betting on the side line." At one point, Bell, who was also betting on the side line, confronted the man who was rolling the dice, calling him "Shorty," and accused him of playing with "crooked dice." Appellant testified that Bell then grabbed the money off the floor and demanded that appellant return the money he had won. An argument followed which culminated in Bell pulling a gun out of his pocket. Upon Bell's command, appellant emptied his pockets and returned about $35. Bell then ordered Shorty to do the same. Shorty refused, and when Bell made a threatening advance on him, appellant intervened. He stated that he grabbed Bell and a struggle ensued during which the gun went off. According to appellant, Bell then dropped the gun and ran upstairs. Appellant related that he and Shorty first discussed what they would do with the gun. He told Shorty that he did not want it and Shorty responded by saying that he (Shorty) would keep it. Appellant then stated that he was going to go after Bell to get his money back, but when he went up the stairs he could go no further because the security guard had cordoned off the exit and refused to let him pass. The reason given by the guard, appellant recalled, was that Bell had implicated "one of them" in the robbery.[5] A few minutes later, the police arrived and Bell identified appellant as the robber, resulting in his arrest. II. Discovery Under Criminal Rule 16(a)(1)(A) Appellant was the sole defense witness and on cross-examination he revealed that after his arrest he had given Detective Willie Jefferson an "off the record" statement. To elicit the substance of this statement, the prosecutor asked appellant: "And then you went on and told ... [Detective Jefferson] in fact that you did rob Mr. Bell but he got his money back and why bother with it; isn't that correct?" Appellant admitted telling the detective that he had been "involved" in the incident, but insisted that the involvement he was speaking 1147 about related only to the restroom dice game. After the defense rested, the government informed the court that it would call Detective Jefferson as a witness in its rebuttal case. A bench conference ensued during which defense counsel objected to any elaboration of appellant's statement. In the colloquy that followed, counsel argued that it was not his understanding from the discovery made by the government that a more detailed statement had been given to the detective. To this contention the prosecutor replied that appellant's willingness to admit his "involvement" in the incident was tantamount to an admission that he committed the robbery. The court rejected defense counsel's argument reasoning that the defense had "opened the door" to the statement thereby allowing further government inquiry. Consequently, Detective Jefferson was permitted to testify in rebuttal and he offered the following account: Well, after Mr. Smith was advised of his rights, he refused to say anything. On the [PD 47] card he stated he didn't want to say anything. So, while I was sitting there typing up his paperwork, he got to telling me, look, off the record man, this is off the record. I said, yeah, you can go ahead. He said, now, suppose I did give this guy back his money; nobody saw me; he is just saying that I did; I did give it back to him; I mean you would think he would want the case dropped; he got his money back and he wasn't hurt. I said, yeah, okay. Then he wanted to know how could we put that gun on him after he had put it in the locker.... He said, well, I did put it in the locker and I did throw the key down in the commode, but it wouldn't flush.... It is readily apparent that appellant's statement, as reported by Detective Jefferson, amounted to an admission of guilt. Appellant now contends that the government's disclosure in discovery that he had made a statement admitting his "involvement" did not satisfy its burden under Super.Ct. Crim.R. 16(a)(1)(A). The government counters that it fully complied with its discovery obligations under Rule 16 and adds that "if there was any ambiguity in the disclosure... [trial] counsel was fully capable of clarifying the matter at the time of discovery." Rule 16(a)(1)(A) governs certain aspects of discovery and inspection in criminal matters. The rule requires that upon request the government disclose the substance of oral statements by an accused made in response to police interrogation. Thomas v. United States, 444 A.2d 952, 953 (D.C.1982) (citing Rosser v. United States, 381 A.2d 598, 603 (D.C.1977)).[6] "Substance" in this context connotes disclosure "in enough detail to minimize the undersirable effects of surprise at trial and otherwise contribute to the fair and efficient administration of criminal justice." Id. (citing Lee v. United States, 385 A.2d 159, 163 (1978)). Thus, once an inquiry has been made by a defendant regarding an oral statement, it is essential that the government respond accurately and unambiguously. United States v. Lewis, 167 U.S.App.D.C. 232, 235, 511 F.2d 798, 801 (1975) (construing FED.R.CRIM.P. 16(a)). Otherwise, the integrity of the criminal process cannot be preserved. It is difficult to accept the government's argument that its disclosure in this case satisfied Rule 16(a)(1)(A). Although there is no record of the disclosure itself, 1148 the government concedes that during discovery defense counsel was informed that "the defendant offered to give a statement admitting his involvement, but he would only do it off the record." Yet, at trial, Detective Jefferson recounted with particularity appellant's detailed admission, quoted supra. Among other inculpatory remarks, appellant was quoted as saying: "I mean you would think he would want the case dropped; he got his money back and he wasn't hurt." The conclusion is nearly inescapable that the government's disclosure was insufficient. Compare Thomas, supra, 444 A.2d at 953 (defendant's statement that she stabbed decedent "after he had advanced on her" sufficiently different than statement that she stabbed decedent "to teach him a lesson" to warrant independent disclosure).[7] On the basis of the evidence presented at trial, we must also conclude that this error requires reversal. As appellant suggests, this case became essentially a credibility contest between himself and the complainant Bell. Although Bell offered a plausible version of the events which may have actually transpired, no government witness was called to confirm his account. The government did not call, for example, any of the men who were present in the bus terminal restroom at the time the incident occurred. Nor did it call the security guard who first rendered assistance to Bell. In short, the government can point to no eyewitness testimony that supports Bell's allegations. Its case-in-chief rested primarily on the testimony of Bell and the police officers who were summoned to the scene. Despite the absence of any such supporting testimony, the government offered nothing else which positively linked appellant to the crime. Concededly, a weapon and ammunition were recovered from a locker in the restroom area. However, the sole evidentiary connection to use by appellant came from the testimony of Bell. Moreover, a crime scene specialist testified that he was unable to recover latent fingerprints from the weapon and that he did not attempt to recover fingerprints from the locker.[8] We further note that no money was found on appellant at the time of his arrest. As we observed, appellant was the only defense witness. His version of the incident, offered on direct-examination, unsurprisingly did little to support Bell's claim. And despite thorough cross-examination, appellant was unyielding: he remained steadfast in his contention that Bell had accosted him. But more than this, when directly questioned about his statement to Detective Jefferson, appellant responded that he did not admit to robbing Bell. Rather, he stated: "I told him that I was involved, and the involvement I was speaking about was the dice game that was going on in the bathroom." Given the conflicting accounts of appellant and Bell, and the sparsity of other evidence implicating appellant, it cannot be reasonably controverted that appellant's *1149 admission, as related by Detective Jefferson in the government's rebuttal case, was the decisive factor in his conviction.[9] Appellant's statement cannot, as the government suggests, be construed as merely a corroboration of his admission of "involvement." See Rosser, supra, 381 A.2d at 609 (citing United States v. Johnson, 525 F.2d 999, 1004 (2d Cir.1975), cert. denied, 424 U.S. 920, 96 S. Ct. 1127, 47 L. Ed. 2d 327 (1976)). Also, had counsel been apprised of the extent of appellant's confession before trial, "his trial preparation and strategy might well have been different." Lewis, supra, 167 U.S.App.D.C. at 235, 511 F.2d at 801. On these bases, we conclude that the error was not harmless.[10] III. Sentencing Appellant also assigns as error the enhanced sentence he received for carrying a pistol without a license. The government concedes that the trial court committed sentencing error. Of course, because of the result we reach on appellant's other contention, it is not imperative that we address this issue. However, we shall briefly do so in the event appellant is retried and convicted. The maximum term of imprisonment for carrying a pistol without a license is one year. D.C.Code §§ 22-3204, -3215 (1981). This penalty may be enhanced pursuant to § 23-111(a)(1) if the government files an information as to previous convictions. In the case at bar, the government did so and appellant received a consecutive sentence on the pistol charge of two to six years in prison. This sentence was improper because, as § 23-111(b) makes clear, the trial judge has a duty before pronouncement of sentence to: inquire of the person with respect to whom the information was filed whether he affirms or denies that he has been previously convicted as alleged in the information, and shall inform him that any challenge to a previous conviction which is not made before sentence is imposed may not thereafter be raised to attack the sentence. Since the trial judge did not comply with the mandatory inquiry and advice procedures, it was error to enhance appellant's sentence. See Smith v. United States, 356 A.2d 650, 651-52 (D.C.1976). Reversed. NOTES [1] Section 22-3202 has been amended and is now codified at D.C.Code § 22-3202 (1981 & Supp. 1984). [2] Our conclusion infra that the government's failure to comply with Super.Ct.Crim.R. 16(a)(1)(A) warrants reversal makes unnecessary our consideration of the allegations of prosecutorial misconduct. [3] Bell could not remember whether appellant had actually taken his wallet. However, he stated that after retrieving his money, he found his wallet in a sink and the wallet's contents in the sink and on the restroom floor. [4] Two Metropolitan Police Officers responded to the scene. There they observed the security guard restraining three or four men in the restroom area. Bell immediately implicated appellant as the robber. One of the officers then brought appellant and two of the men to an office in the terminal. There, appellant was arrested and the others, after questioning, were released. Meanwhile, the other police officer and the security guard searched the restroom and surrounding area. Their search revealed a key in one of the commodes which was then used to open a locker. Inside the locker was a handgun that contained five live rounds and one empty casing in its chambers. This evidence was introduced at trial. [5] Shorty apparently followed appellant up the stairs and when he learned of Bell's allegation he retreated to the restroom to get rid of the gun. [6] Rule 16(a)(1)(A) is worded as follows: STATEMENT OF DEFENDANT. Upon request of a defendant the prosecutor shall permit the defendant to inspect and copy or photograph: ... the substance of any oral statement which the government intends to offer in evidence at the trial made by the defendant whether before or after arrest in response to interrogation by any person then known to the defendant to be a government agent.... We note that the government concedes in its brief that it had an obligation under this rule to disclose the "substance" of appellant's oral statement to Detective Jefferson. It contends, however, that such disclosure was made. Thus, our inquiry will focus only on this aspect of the rule. [7] We do not agree that defense counsel, once informed of appellant's statement of "involvement," had a duty under Rule 16(a)(1)(A) to ferret out the details of the statement. Although a defendant does have an obligation to make the requisite request, Rosser, supra, 381 A.2d at 609, under the rule it is the government's duty to reveal the "substance" of a discoverable oral statement. The government concedes as much. Here, it is quite possible that counsel interpreted the government's disclosure to mean that appellant had simply stated, without amplification, that he was "involved." Moreover, it is conceivable that counsel believed appellant had solely admitted his involvement in the restroom dice game. In any event, the government failed to properly communicate the substance of appellant's incriminating admissions. We note that even if the government had not been apprised of appellant's statements at the time of discovery, it had an obligation to enlighten counsel once it had been so informed. Super.Ct.Crim.R. 16(c); Rosser, supra, 381 A.2d at 605 (construing former Super.Ct.Crim.R. 16(g)). [8] The crime scene officer also testified that because "[t]oo much time had gone by" he did not perform a nitric acid test on appellant. This test might have revealed gunpowder residue. [9] We recognize that appellant's credibility was impeached at trial by several prior convictions. This impeachment was not so damaging, however, to render the subsequent error harmless. See Rosser, supra, 381 A.2d at 609 n. 12. [10] Harmless error may be found if we can say "with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error...." Kotteakos v. United States, 328 U.S. 750, 765, 66 S. Ct. 1239, 1248, 90 L. Ed. 1557 (1946). This court has held that "[t]he decisive factors are the closeness of the case, the centrality of the issue affected by the error, and the steps taken to mitigate the effects of the error." Thomas, supra, 444 A.2d at 954 (quoting Smith v. United States, 392 A.2d 990, 993-94 (D.C.1978)).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367753/	68 Wn. App. 626 (1993) 846 P.2d 542 J.E. LYNCH, Appellant, v. RONALD E. PACK, Respondent. No. 12059-7-III. The Court of Appeals of Washington, Division Three. February 3, 1993. William D. Symmes, Brian T. Rekofke, and Witherspoon, Kelley, Davenport & Toole, P.S.; Murray G. Stromberg, for appellant. John G. Layman, Mark W. Hendricksen, and Layman, Loft, Arpin & White, for respondent. SWEENEY, J. J.E. Lynch appeals the dismissal of his suit against Ronald E. Pack for misrepresentation and breach of certain warranties included in a stock purchase agreement. The dismissal was based on forum non conveniens. Finding no abuse of discretion, we affirm. FACTS In the spring of 1985, Mr. Pack's accountant, Michael Romine, approached Mr. Lynch, a Spokane, Washington, resident, in Spokane, and asked Mr. Lynch if he was interested in buying stock in two Montana corporations, Pack & Company 628 and Pack Concrete, Inc. (Corporations). The stock was wholly owned by Mr. Pack, who was a Montana resident. Mr. Pack denies soliciting Mr. Lynch as a buyer. Mr. Romine subsequently assisted Mr. Pack in negotiating the sale of stock. Mr. Lynch made at least one trip to Montana to negotiate the sale; Mr. Pack admits being in Spokane on three occasions and discussing the sale. Mr. Lynch's son, James Lynch, also made trips to Montana to negotiate the acquisition. On March 4, 1986, in Spokane, Mr. Lynch and Mr. Pack executed a stock purchase agreement (Agreement) by which Mr. Lynch purchased 51 percent of Mr. Pack's stock in the Corporations. The remaining 49 percent of the stock in the Corporations was escrowed in Spokane. The Corporations retained the right to redeem the remaining stock from Mr. Pack on or before March 4, 1991. The Agreement required Mr. Lynch to purchase the remaining stock if the Corporations did not redeem. The Agreement was "governed by, construed and interpreted according to" Montana law. Mr. Pack agreed to indemnify Mr. Lynch for misrepresentations and breach of warranties. A side agreement, signed by Mr. Lynch and Mr. Pack in their individual capacities, provided, among other things, that the Corporations would employ Mr. Pack. Following the sale, James Lynch became president of the Corporations. In March 1986, Daniel Harper of McFarland & Alton, Spokane, became the accountant for the Corporations and assumed responsibility for the preparation of annual financial statements and tax returns. On February 27, 1991, the Corporations notified Mr. Pack of their intent to redeem the remaining 49 percent of his stock, minus offsets for misrepresentations and breach of warranties. PROCEDURAL HISTORY On April 12, 1991, Mr. Lynch filed suit against Mr. Pack, in Spokane County, Washington, for misrepresentations and breach of warranties. He also sought a declaratory judgment regarding offsets. He claimed that Mr. Pack had overstated 629 income and accounts receivable, failed to reveal litigation pending against the Corporations, and failed to pay as promised on an account (the Bitney account). On May 24, Mr. Pack filed suit against the Corporations, in Montana, for breach of contract and to recover moneys claimed due pursuant to the Agreement and the side agreement. On June 28, Mr. Pack filed a motion in the Spokane litigation: to quash service of process; to dismiss Mr. Lynch's complaint for lack of jurisdiction, for failure to name indispensable parties (the Corporations); and to dismiss for forum non conveniens. On July 19, the court entered an order concluding that it had jurisdiction and that venue was proper, but dismissing the case based on forum non conveniens. The dismissal was subject to Mr. Pack paying the costs for Mr. Harper to travel to Montana for trial. On July 29, Mr. Lynch moved for reconsideration of the dismissal and submitted additional affidavits in support of his motion. Mr. Pack objected to the court considering the affidavits, but he also submitted an additional affidavit. The court considered all of the affidavits, but denied the motion. This appeal followed. DISCUSSION A. Issue and Standard of Review [1] The dispositive issue is simply whether the trial court abused its discretion in dismissing Mr. Lynch's complaint based on forum non conveniens. We reverse only if the dismissal is manifestly unfair, unreasonable, or untenable. Myers v. Boeing Co., 115 Wn.2d 123, 128, 794 P.2d 1272 (1990); Coggle v. Snow, 56 Wn. App. 499, 507, 784 P.2d 554 (1990). B. Forum Non Conveniens [2] The doctrine of forum non conveniens was first recognized in this state in Werner v. Werner, 84 Wn.2d 360, 371, 526 P.2d 370 (1974). Application of the doctrine requires the balancing of a number of private and public interest factors. 630 Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 91 L.Ed. 1055, 67 S.Ct. 839 (1947); Johnson v. Spider Staging Corp., 87 Wn.2d 577, 555 P.2d 997 (1976). The private interest factors are: the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises ...; and all other practical problems that make trial of a case easy, expeditious and inexpensive. .... ... questions as to the enforcibility [sic] of a judgment if one is obtained. Myers v. Boeing Co., supra at 128 (quoting Gulf Oil, at 508). The public interest factors are: Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. .. . There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself. Myers, at 129 (quoting Gulf Oil, at 508-09). The court is required to balance the factors, "[b]ut unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Myers, at 128-29 (quoting Gulf Oil, at 508). This is Mr. Lynch's contention. [3] Relying on Nixon v. Cohn, 62 Wn.2d 987, 385 P.2d 305 (1963), Mr. Lynch also contends that the practical effect of the dismissal is to deprive him of a valuable right conferred by Washington's long-arm statute (RCW 4.28.185). The argument is unpersuasive. Washington adopted the doctrine of forum non conveniens partially in response to passage of the long-arm statute, which "has vastly extended the jurisdiction of our courts over persons with only minimal Washington contacts." Werner, at 371. Basic equity required the court to have discretionary power to dismiss due to forum non conveniens even though jurisdiction existed. Werner, at 371. Moreover, Nixon is distinguishable. There, the issue was 631 jurisdiction, not forum non conveniens. Although the court considered the relative convenience of the parties, it did so in determining whether assumption of jurisdiction violated due process. Nixon, at 993. The affidavits, in support of and in opposition to Mr. Pack's forum non conveniens motion, address the various private and public factors delineated in Myers, but they are conflicting. We review the assertions of the parties in light of the Myers factors.[1] a. Private Interest Factors. (1) Access to proof. Mr. Lynch contends that the most important witnesses will be from Spokane: (1) the Corporations' accountant since the sale, Mr. Harper; (2) Mr. Romine, who he alleges represented Mr. Pack; and (3) possibly one or more attorneys who represented Mr. Lynch during the negotiations. Mr. Lynch also discounts Mr. Pack's assertion that numerous other witnesses from Montana will be required to defend the claims of misrepresentation and breach of warranties. Mr. Pack lists numerous individuals or groups of individuals who reside in Montana and may be required to testify, including: (1) the certified public accountant and Corporations' bookkeepers in Montana, who were instrumental in preparing the financial statements which Mr. Lynch now claims are misleading; (2) the two attorneys who represented Mr. Pack during the negotiations; (3) James Lynch, the accounts receivable obligors, and construction supervisors all of whom may testify regarding efforts made to collect accounts receivable (Mr. Lynch claims the receivables were misrepresented); (4) Mr. Bitney and the Corporations' employees who can testify regarding agreements between Mr. Bitney and Mr. Pack, and Mr. Pack and Mr. Lynch, relating to Mr. Lynch's right of offset on that account; (5) 632 attorneys representing the Corporations in litigation pending in federal court at the time of the sale; and (6) general employees of the Corporations during the pre- and postsale period. Mr. Pack also argues that most of the necessary documents are in Montana. James Lynch, however, has agreed to make the records available in Washington. Mr. Lynch and Mr. Pack disagree on the status of a number of accounts receivable. For example, Mr. Pack maintained initially that almost all accounts receivable were owed by Montana residents or companies doing business in Montana. Mr. Lynch alleges that the largest accounts receivable were not owed by Montana residents. Mr. Pack admits that the home offices of the obligors may not be in Montana, but contends that the relevant witnesses reside in Montana, and the work was substantially performed in Montana. Mr. Lynch's Spokane accountant, Mr. Harper, states that individual debtors will not be required as witnesses. Deficiencies will be shown by applying accounting principles. Misrepresentations as to income are also merely accounting issues. A suit pending against Pack & Company in federal district court in Montana is also a basis for Mr. Lynch's misrepresentation claim. Mr. Lynch maintains, however, that the judgment will be for a sum certain and, therefore, no witnesses will be needed. Mr. Pack asserts that the attorneys will be needed to describe the nature of the litigation and perhaps to establish that this was not litigation covered by Mr. Pack's warranty. The strategy and evidence presented by Mr. Lynch will dictate the defense strategy of Mr. Pack. That defense strategy, in turn, will dictate the need for defense witnesses. (2) Need for compulsory process. Mr. Lynch asserts that Mr. Pack has not shown that there are any Montana witnesses who will refuse to voluntarily testify. He argues that even if they did refuse, their attendance at depositions could be compelled. Mont. R. Civ. Proc. 28(d). Moreover, James Lynch has indicated that he will testify voluntarily. Mr. Pack counters that it is cumbersome and unfair to require him to proceed first in Washington and then in Montana 633 to obtain subpoenas for depositions, documents and records. He suggests that corporate employees who worked for both Mr. Pack and now James Lynch may be unwilling witnesses. Mr. Pack contends that although depositions of unwilling witnesses can be taken and read, this process is expensive and does not afford him a fair trial. (3) Cost for witnesses. Mr. Lynch argues that all but one of his witnesses are Spokane residents and at least one of Mr. Pack's witnesses is from Spokane. He asserts that if out-of-state accounts receivable obligors are needed as witnesses, it will be less expensive to transport them to Spokane than to Kalispell, Montana. Mr. Pack counters that the vast majority of witnesses are believed to be Montana residents and to transport them from Kalispell to Spokane will cost $330 round trip. (4) Need to view premises. Neither party asserts that this factor is applicable in this case. (5) Enforceability of judgment. Mr. Pack asserts that Mr. Lynch is seeking monetary damages and that Mr. Pack has no property in Washington to satisfy a judgment. Mr. Lynch points out that Mr. Pack's remaining stock in the Corporations is escrowed in Spokane. (6) Practical problems. Mr. Pack identifies two public interest factors under practical problems which we discuss under public interest factors. b. Public Interest Factors. (1) Court congestion; required jury duty; local interest. When a court and the jurors have no relation to a cause of action, it is burdensome for litigation to be tried in that forum. There is also a local interest in having local controversies decided at home. Myers, at 129. Mr. Pack contends that the burden of trying the case in Spokane is greater because the cause of action is related to the sale of two Montana corporations by a Montana resident. Mr. Lynch counters that Washington courts should hear the case because the individual wronged is a Spokane resident. Although the sale documents were signed in Spokane, the subject matter of the transactions is the Montana corporations. 634 The value of the Corporations' assets and liabilities is at issue. The Montana community may well have more of an interest in the outcome of litigation affecting two corporations physically present there than the Spokane community has in a securities transaction involving out-of-state corporations. (2) Unfamiliar law. The Agreement requires that Montana law govern. Mr. Pack asserts that a Spokane court would have to determine Montana law to decide issues of contract interpretation, misrepresentation, oral contract standards, and local accounting and collection standards. Mr. Lynch argues that this is not difficult for a Washington court, and further there is no proof that Montana law is different from Washington law. Mr. Lynch asserts that the application of foreign law does not give rise to the same problems presented in Myers. There, Washington courts would have been required to translate and interpret Japanese law. Myers, at 129-30. The questions of law presented here are not as difficult as those presented in Myers. Nevertheless, Montana courts are likely to be more familiar with the interpretation and application of Montana law than Washington courts. We agree with Mr. Lynch, the facts here are not as compelling as those presented in Myers or Wolf v. Boeing Co., 61 Wn. App. 316, 810 P.2d 943 (crash of a Boeing 727 operated by Mexicana Airlines in Mexico), review denied, 117 Wn.2d 1020 (1991). Nevertheless, many of the factors found significant in Myers militate in favor of a Montana forum. Mr. Pack has asserted a need for a more significant number of witnesses from Montana than Mr. Lynch has from Spokane. If the assertions are correct, it will be more costly to bring witnesses to Spokane. There is, at least, a question whether some may be unwilling witnesses whose attendance could not be compelled. The two corporations are Montana corporations, and the local interest in resolution of litigation is likely to be higher in Montana.[2] 635 The balancing required of the court here is not subject to the same mathematical certainty as an accountant's financial statements. The court must consider the evidence presented and make what is necessarily a subjective judgment. Considering the evidence before the trial court, we are unable to say it abused its discretion and therefore affirm the dismissal. SHIELDS, C.J., and MUNSON, J., concur. NOTES [1] Because we affirm, we do not reach the issue raised by Mr. Pack consideration of the affidavits submitted by both parties on the motion for reconsideration. The affidavits did not significantly change the evidence before the court. With or without consideration of the affidavits, the dismissal was not an abuse of discretion. [2] Forum non conveniens dismissals have been upheld in three other cases, none of which is instructive here because of factual differences: In re Marriage of Dunkley, 89 Wn.2d 777, 783-84, 575 P.2d 1071 (1978) (dismissal in child custody dispute upheld because most of witnesses were in another state, all litigation to date had been in that state, and mother who had child custody was in the other state); In re Marriage of Morrison, 26 Wn. App. 571, 575, 613 P.2d 557 (1980) (in dispute over father's contributions to trust accounts for children, dismissal was upheld because ex-husband was in another state, payments were made through another state court system, and mother now lived in a third state); International Sales & Lease, Inc. v. Seven Bar Flying Serv., Inc., 12 Wn. App. 894, 899, 533 P.2d 445 (1975) (in an action to collect payment for a check of a non-Washington resident, pre-Johnson case upheld dismissal based on desire to avoid multiple litigations, because witnesses were in another state, and because equity weighed toward other forum). A dismissal based on forum non conveniens was reversed in a wrongful death action, brought in Washington, against a Washington corporation that built scaffolds which contributed to the death of a Kansas man in Kansas. Johnson v. Spider Staging Corp., supra. But, there the court found: The factors ... do not strongly favor the respondents-defendants. For example, all of the evidence which pertains to the manufacturing and marketing of the scaffold is in Washington State. Respondents are Washington corporations, and all of their principal officers reside in King County. Both of the engineers who designed the scaffold live in King County. The two principal witnesses from Kansas stated in affidavits that they willingly would appear in Washington. Also, appellant will bring the scaffold to Washington and give respondents an opportunity to examine it. The trial court therefore should not have disturbed appellant's choice of forum. Johnson, at 580.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367862/	13 Ariz. App. 218 (1970) 475 P.2d 508 In the Matter of the ESTATE OF Elsa M. GRISWOLD, Deceased. Francis H. GRISWOLD, Appellant, v. Russell N. GRISWOLD, Edward C. Griswold, and Nancy C. Clothier, individually, and Russell N. Griswold, as administrator of the Estate of Elsa M. Griswold, Deceased, Appellees. Nos. 1 CA-CIV 1100, 1 CA-CIV 1101. Court of Appeals of Arizona, Division 1. October 19, 1970. Rehearing Denied November 13, 1970. Francis H. Griswold, in pro. per. Earl Platt, St. Johns, for appellees. KRUCKER, Judge. These consolidated appeals present for review two probate court orders: (1) An 219 order refusing to revoke letters of administration, and (2) an order denying a petition to probate the decedent's will. Briefly, the procedural chronology is as follows. On January 28, 1966, Russell N. Griswold filed a petition for letters of administration. The petition alleged the death of Elsa M. Griswold on October 4, 1965, her residency in Apache County at the time of death, and an estate in Apache County of approximately $80,000. It incorporated by reference thereto a certain property settlement agreement dated September 4, 1965, by and between appellant and the decedent, and alleged that the value and character of the decedent's property was as set forth and described in this agreement. It further recited, on information and belief, that an instrument entitled "Last Will and Testament" of Francis H. Griswold and Elsa M. Griswold existed and was in the custody of the Apache County Superior Court clerk but that it had never been produced or offered for probate. The petition also alleged that appellant was charged with the decedent's murder, that the property settlement agreement constituted a revocation of the will, and that because of these circumstances the decedent died intestate. Notice of a hearing on the petition was given to appellant and the three adult children of appellant and decedent. A hearing was duly held at which appellant was present with counsel, at the conclusion of which it was ordered that upon the petitioner taking the oath and furnishing bond in the sum of $20,000, letters of administration would be issued. On February 28, 1966, a formal, written order appointing Russell N. Griswold as administrator was entered which recited inter alia that Elsa M. Griswold died intestate. Letters of administration were issued on March 2, 1966. On March 18, 1966, appellant plead guilty to the charge of second-degree murder of Elsa M. Griswold. His conviction and sentence were affirmed by the Arizona Supreme Court on January 25, 1967. See, State v. Griswold, 101 Ariz. 577, 422 P.2d 693 (1967).[1] On February 16, 1967, the appellant filed a petition for probate of will. The petition alleged that the decedent, Elsa M. Griswold, left a will dated March 23, 1963 in possession of the Apache County Superior Court clerk and requested that the clerk be ordered to produce the will at the time and place set for hearing on the petition. The petition also alleged that appellant was legally disqualified to act as executor of said will and requested the appointment of a named nominee to act as administrator cum testamento annexo. On February 27, 1967, appellant filed a petition for revocation of the letters of administration previously issued to Russell N. Griswold on the grounds that: (1) The administrator had failed to and refused to perform those acts required by law to close the estate and petition for distribution of assets of the estate in a diligent manner and (2) That the administrator was an adverse party to appellant and had negligently delayed closing the decedent's estate. The appellees filed opposition to both petitions, the matters were consolidated for hearing, and at the conclusion of the hearing at which both sides presented testimonial and documentary evidence, both petitions were denied. As to the petition for revocation, the trial court specifically found that the petition failed to allege any facts showing that appellant had any interest in the probate proceedings of the estate of Elsa M. Griswold, and that the evidence presented did not show sufficient cause for revocation of the letters of administration. 220 As to the order denying probate of the will, the trial court made express findings of fact and conclusions of law. It found that the contestants [appellees] were the sons and daughter of the decedent and appellant, that on March 23, 1963 the decedent and appellant executed a joint and mutual will, that on the fourth day of September, 1965, appellant and decedent entered into a property settlement agreement providing for division of their community property, acknowledging their marital differences and providing that they live separate and apart. This property settlement was not consummated insofar as the division of property therein provided with the exception of one item. The court further found that appellant deliberately killed and murdered the decedent on October 4, 1965, that letters of special administration had been issued to Russell N. Griswold, and on May 9, 1966, a decree approving the account and report of the special administrator was entered. The court found that appellant and his attorney were in court, after proper notice thereof, at the hearing on the petition for letters of administration, that no objections were filed thereto, that the letters were issued and that Russell N. Griswold, since the date of issuance, performed the duties required of him as administrator. It further found that although appellant at all times had full knowledge of the existence of the joint and mutual will, he failed to take any steps to offer it for probate until February 16, 1967, after appellate affirmance of his conviction and sentence. It was additionally found that from the time he was informed against for murder until he filed the petition for probate, appellant had executed various documents and letters indicating that he made no claim under the will. The trial court concluded that appellant was precluded from receiving the benefits under the will[2] because of the felonious killing of his spouse, that his acts and conduct in failing to object to the administration proceedings in the estate of Elsa M. Griswold and his allowing the administration to proceed and function without objection, and his act in disclaiming any benefits under the will until after the affirmance of his sentence, estopped him from attempting to maintain the validity of the will or claim any interest or legacy pursuant to the terms thereof. The court further concluded that since there were no other legal beneficiaries under the will, the will should not be admitted to probate. Since the trial court's findings of fact have not been demonstrated to be "clearly erroneous", we accept them as true and limit our consideration to the conclusions of law. Courts are not in agreement as to whether a slayer may obtain and keep the benefits derived by him as a result of his crime. A number of cases have held that, in the absence of statute, he may. E.g., Hagan v. Cone, 21 Ga. App. 416, 94 S.E. 602 (1917); Wall v. Pfanschmidt, 265 Ill. 180, 106 N.E. 785 (1914); Wilson v. Randolph, 50 Nev. 371, 261 P. 654 (1927); Johnston v. Metropolitan Life Ins. Co., 85 W. Va. 70, 100 S.E. 865 (1919); In re Duncan's Estates, 40 Wash.2d 850, 246 P.2d 445 (1952). The chief reason assigned for this view is that as the statutes of descent and distribution contain no exception barring a murderer from taking, courts should not imply one. See, Atkinson on Wills § 37, p. 154. In a second group of decisions, the opposite result has been reached the slayer has been denied the right to take by intestacy or will. In these cases, recovery has been denied largely upon the broad ground that one should not be permitted to take advantage of his own wrong. Some proceed upon the theory that the murderer takes no legal title to the property. Weaver v. Hollis, 247 Ala. 57, 22 So.2d 525 (1945); Price v. Hitaffer, 164 Md. 505, 165 A. 470 (1933); Annot., 36 A.L.R.2d 960, 963. Other cases assume that legal title passes to him but impress a trust ex maleficio. Pritchett v. Henry, 287 *221 S.W.2d 546 (Tex.Civ.App. 1955); Garner v. Phillips, 229 N.C. 160, 47 S.E.2d 845 (1948); Welch v. Welch, Del. Ch., 252 A.2d 131 (1969); In re Wilson's Will, 5 Wis.2d 178, 92 N.W.2d 282 (1958); Whitfield v. Flaherty, 228 Cal. App.2d 753, 39 Cal. Rptr. 857 (1964).[3] Here, the trial court apparently concluded that since appellant was not entitled to benefit from his own wrong and since he was the sole beneficiary under the will, the decedent's entire estate passed as intestate property. Under the circumstances of this case, we find no error in the ruling. As a further basis for denying the petition for probate, the trial court concluded that appellant was estopped from procuring probate of the will by virtue of his conduct. It has been held that a person, by his conduct, may estop himself from subsequently procuring probate of a will. Dowd v. Dowd, 62 Idaho 631, 115 P.2d 409 (1941); In re Stoball's Will, 211 Miss. 15, 50 So.2d 635 (1951); 57 Am.Jur. Wills § 794. Appellant was the only beneficiary under the will and therefore was the only one who could have been materially interested in presenting it for probate. He, however, for a period of approximately one and one-half years, misled the probate court he made no objection to the finding of intestacy in the February 28, 1966 order appointing Russell N. Griswold as administrator; on July 25, 1966, he filed a document requesting enforcement of the property settlement agreement; and he disclaimed in writing any interest in his deceased wife's estate. Under these circumstances it was appropriate for the trial court to conclude that it would be unfair to permit appellant to repudiate the course he had pursued in these estate proceedings which indicated that he did not recognize the validity of the will. We believe that appellant's actions since his wife's death with reference to the will deprived him of any equitable standing. We can summarily dispose of the appeal from the order refusing to revoke the letters of administration. It is a prerequisite to appellate jurisdiction of this court that the appellant be a party aggrieved by the order from which the appeal is taken. Farmers Insurance Group v. Worth Insurance Co., 8 Ariz. App. 69, 443 P.2d 431 (1968). In order to be "aggrieved" by the order, there must be a denial of some personal or property right. Since appellant has no personal or pecuniary interest in his deceased wife's estate, he does not have the requisite appealable interest. Consequently, the appeal from the order refusing to revoke the letters of administration is dismissed. The order denying the petition for probate of will is affirmed. HOWARD, C.J., and HATHAWAY, J., concur. NOTE: This cause was decided by the Judges of Division Two as authorized by A.R.S. § 12-120, subsec. E. NOTES [1] A subsequent attack on the constitutional adequacy of the procedures at the time of acceptance of the guilty plea was likewise unsuccessful. See, State v. Griswold, 105 Ariz. 1, 457 P.2d 331 (1969). [2] In effect, each spouse was the sole beneficiary of the entire estate of the other spouse. [3] At least one treatise writer finds the constructive trust theory most satisfactory, pointing out that it avoids the dubious practice of reading implied exceptions into the statutes of descent and distribution. G. Bogert, The Law of Trusts and Trustees § 478 (2nd Ed. 1960). The Restatement also adopts this view. See, Restatement of Restitution § 187 (1937).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367877/	3 Wn. App. 536 (1970) 475 P.2d 916 THE STATE OF WASHINGTON, PARKS AND RECREATION COMMISSION, Respondent, v. LESLIE SCHLUNEGER et al., Appellants. No. 196-3. The Court of Appeals of Washington, Division Three. October 30, 1970. Hancock & Kohls and Kelly Hancock, for appellants. James H. Dailey (of Lawson & Dailey) and Slade Gorton, Attorney General, for respondent. GREEN, J. The Parks and Recreation Commission brought this action to condemn an easement over appellants' land for a pipeline to carry water from the Methow River to Alta Lake for the purpose of rehabilitating and stabilizing the water level of the lake. Appellants, Leslie and Marjorie Ruth Schluneger, and John and Veronica Schluneger, challenge and seek review by writ of certiorari of an order adjudicating public use entered in favor of the Parks and Recreation Commission of the State of Washington. Alta Lake State Park borders the waters of Alta Lake in Okanogan County. Those using the park also use the lake for fishing, swimming and boating. Since 1960, the water level of Alta Lake has been receding. By 1968, when this action was commenced, the lake was 11 to 12 feet below the 1960 level. As a result, the swimming areas became muddy; the beach was unacceptable to users of the park; the boat launch facilities became inoperative and required relocation; and the esthetic beauty of the park was affected. To correct this situation, the Parks and Recreation Commission concluded that water should be piped from the Methow River to the lake for the purpose of restoring and maintaining 538 the water level. To this end, this condemnation proceeding was commenced. [1] A condemnation action consists of three phases: (1) adjudication of public use and necessity, (2) determination of damages to be awarded to the owner, and (3) payment of the amount of the award and entry into possession. State ex rel. Lange v. Superior Court, 61 Wn.2d 153, 156, 377 P.2d 425 (1963). The issues raised on appeal relate solely to the first phase. [2] First, appellants challenge the authority of the Parks and Recreation Commission to acquire the proposed easement. It is contended that since the lake is not a part of the park, the piping of water into it is not for a "park or parkway purpose" within the meaning of RCW 43.51.040(7). While the park borders Alta Lake, title to the lake bottom is not vested in the Parks and Recreation Commission; however, the Parks and Recreation Commission are owners of the abutting shore lands. Nevertheless, the waters of Alta Lake were used by the public in conjunction with the park for swimming, boating and fishing. To this extent Alta Lake is an integral part of the park. This became even clearer when receding lake waters jeopardized public use of the park. The portion of RCW 43.51.040 upon which appellants rely provides in part: The commission shall: ... (7) ... select and purchase or obtain options upon, lease, or otherwise acquire for and in the name of the state such tracts of land, including shore and tide lands, for park and parkway purposes as it deems proper. (Italics ours.) Considering the circumstances outlined above, we conclude the easement sought to be acquired is for a park purpose within the meaning of the statute. It is undenied that stabilizing the lake level will enhance, if not be imperative to, the future use of Alta Lake State Park. Public use and necessity therefore exists. Decatur Park Dist. v. Becker, 368 Ill. 442, 14 N.E.2d 490 (1938); Chicago Park Dist. v. Canfield, 370 Ill. 447, 19 N.E.2d 376, 121 A.L.R. 539 557 (1939); Otto v. Bobo, 287 S.W.2d 274 (Tex. Civ. App. 1956); and Hogue v. Port of Seattle, 54 Wn.2d 799, 341 P.2d 171 (1959) cited by appellants are not in point. Appellants' first challenge must fail. [3] Second, appellants contend Alta Lake is under the control of the Department of Game of the State of Washington who agreed to contribute $30,000 toward raising the water level. It is asserted that since the Department of Game does not have the power of eminent domain, the Parks and Recreation Commission cannot condemn for the use of the Department of Game. The record does not support appellants. The primary reason for raising the water level of Alta Lake is to benefit Alta Lake State Park. True, an incidental benefit would result to the Department of Game; hence their financial contribution. However, the record shows only minimal benefit to the interests of the Department of Game. [4] Third, appellants contend that because the Parks and Recreation Commission had a franchise to establish a pipeline to carry water from the Methow River to Alta Lake along a county road, no necessity for condemnation of an easement across appellants' land exists. We disagree. This franchise was secured as part of a preliminary study. The testimony does not support the conclusion that the route represented by the franchise was economically feasible. To the contrary, the route selected across appellants' land was the most direct and economical route. While the issue of public use and necessity is a judicial one, the administrative selection is conclusive in the absence of bad faith, arbitrary, capricious, or fraudulent action. State ex rel. Lange v. Superior Court, supra. Since the record does not support this conclusion and appellants do not contend that it does, the selection of the route over appellants' land must be sustained. [5] Fourth, appellants contend the trial court erred when it refused evidence of an alleged contract between them and the Parks and Recreation Commission. By offer of proof, appellants stated they would prove a contract 540 whereby they agreed to deliver 3,500 acre feet of water to Alta Lake during a 30-month period for $90,000; that such contract was contingent upon a contribution of $30,000 by the Department of Game; that the contingency has been satisfied; that appellants at all times were ready to perform; and the agreed price under the contract is less than the costs under the plan proposed in the condemnation. It is argued the existence of a contract to provide water for Alta Lake renders the acquisition of the easement unnecessary; therefore, the evidence of the contract was relevant to the issue of necessity. It is noted this proceeding seeks to condemn a perpetual easement for a pipeline to carry water to Alta Lake; whereas, the alleged contract is to provide a limited amount of water within a limited period of time. The interests covered by the contract are different from the interests sought to be acquired in this proceeding. [6, 7] The power of eminent domain cannot be surrendered or bargained away, nor can an agent of the state bind it to a restricted exercise of that power. Further, the right to condemn may be exercised without reference to contract rights. State v. Charlton, 71 Wn.2d 748, 430 P.2d 977 (1967). As in Charlton, appellants do not contend there was any express or implied promise that a condemnation action would not be commenced in the future. In view of this circumstance and the fact that the interests covered by the alleged contract are not identical to the interests sought to be condemned in this proceeding, admission of the contract on the issue of public use and necessity was properly denied. Cf. State ex rel. Preston Mill Co. v. Superior Court, 91 Wash. 249, 157 P. 689 (1916); State ex rel. Henry v. Superior Court, 155 Wash. 370, 284 P. 788 (1930). [8] However, appellants are entitled, if they desire, to a determination as to whether or not a valid contract exists between themselves and the Parks and Recreation Commission; and if so, damages, if any, for the breach of that contract should be ascertained. Since the matter arises directly from the condemnation proceeding, these issues may be tried and separately determined upon the trial of the 541 second phase of this action. Cf. State v. Shain, 2 Wn. App. 656, 469 P.2d 214 (1970). [9] Last, appellants contend the resolution of the Parks and Recreation Commission was deficient for reciting only the conclusion the easement was necessary in connection with the development of Alta Lake State Park without setting forth the precise reasons for such necessity. This contention is without merit. RCW 43.51.040(7) makes no such requirement. The court properly allowed a representative or employee of the Commission to testify as to the facts showing necessity. Those facts disclosed the gradual lowering of the water level of Alta Lake with an adverse effect upon the swimming and the boat launching area, as well as the general esthetics and public use of the park. It was not necessary to state these facts in the resolution. Judgment affirmed. EVANS, C.J., and MUNSON, J., concur. Petition for rehearing denied December 23, 1970. Review denied by Supreme Court February 9, 1971.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367894/	106 Ariz. 269 (1970) 475 P.2d 253 TRANSPORTATION INSURANCE COMPANY, a division of Continental National American Group, a corporation, Appellant, v. Gordon WADE, Administrator of the Estate of Leonard Maurice Aubuchon, deceased, Appellee. No. 9907-PR. Supreme Court of Arizona, In Banc. October 8, 1970. 270 Chandler, Tullar, Udall & Richmond, by D.B. Udall, Tucson, for appellant. David S. Wine, Norman A. Schwarts, Tucson, for appellee. Molloy, Jones, Hannah, Trachta & Coolidge, by John F. Molloy, and Miller, Pitt & Feldman, by David J. Leonard, Tucson, for amicus curiae. McFARLAND, Justice. This case comes to us on a Petition for Review from a decision of the Court of Appeals, Division Two, reported at 11 Ariz. App. 14, 461 P.2d 190, which affirmed the judgment of the Superior Court of Pima County. The facts are undisputed and we set them forth as they appear in the Stipulation of Facts in the Record on Appeal. " * * 1. On January 22, 1967, the decedent, Leonard Maurice Aubuchon, was a passenger in a 1962 Buick automobile owned by him and driven by his brother, Norman Lee Aubuchon. 2. That said Buick was struck by a 1956 International Harvester Truck owned by Louis Singer and driven by John Calvin Howard, in the State of Arizona. 3. That the accident was caused by the negligence of John Calvin Howard and, at the time of the accident, John Calvin Howard was an uninsured motorist and there was no policy of insurance applicable to said vehicle or driver. 4. That Leonard Maurice Aubuchon was killed as a result of said accident and that the damages to plaintiff as a result of said accident exceed $10,000.00. 5. That at the time of said accident there was in full force and effect a policy of insurance covering the 1962 Buick, issued to the decedent, being Policy No. 88-18397541, issued by the Farmer's Insurance Exchange; that among other coverages applicable was uninsured motorist coverage in the amount of $10,000.00. 6. The plaintiff made claim against Farmer's Insurance Exchange for the full amount of the uninsured motorist coverage, and Farmer's Insurance Exchange has paid the same. 7. That at the time of said collision there was in full force and effect a policy of insurance issued to Norman Lee Aubuchon, written by the defendant, Transportation Insurance Company, being policy No. AS 048 391 37 23 88. 8. That plaintiff has made claim against the defendant for the full amount of the uninsured motorist coverage under the policy issued to Norman Lee Aubuchon, and defendant has refused to pay said claim by virtue of the other insurance provisions of Part IV of said policy. 9. Under Part IV of said policy issued by the defendant, the decedent, Leonard Maurice Aubuchon, is an insured." The Superior Court held that the uninsured motorist coverage of the policy issued by Transportation Insurance Company (Transportation) was available to the decedent's administrator, Wade even though it was secondary insurance and despite the fact that the policy contained an "Other Insurance" clause. That clause reads as follows: "OTHER INSURANCE With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under Part IV shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only 271 in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance. "Except as provided in the foregoing paragraph, if the insured has other similar insurance available to him and applicable to the accident, the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable for a greater proportion of any loss to which this coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance." Wade has no argument with the wording of the clause and in his brief " * * readily admits that if the sole consideration in this matter were the policy provisions, then plaintiff's decedent would not be entitled to any `uninsured motorist' benefits under the defendant's policy." Both sides agree the sole question is whether the "other insurance" clause, in the light of Arizona's uninsured motorist statute, is contrary to public policy. The appellee places great emphasis on the public policy relating to liability insurance as enumerated by decision of this court, citing Schecter v. Killingsworth, 93 Ariz. 273, 380 P.2d 136; Jenkins v. Mayflower Insurance Exchange, 93 Ariz. 287, 380 P.2d 145, and Sandoval v. Chenoweth, 102 Ariz. 241, 428 P.2d 98, in support of his position that such policy is to provide as much insurance protection as possible, and cites Geyer v. Reserve Insurance Company, 8 Ariz. App. 464, 447 P.2d 556, in which it was stated that these cases: "* * * indicate to us that Arizona will be nowhere but in the forefront of jurisdictions in making available to automobile accident victims the fullest benefits of insurance coverage." In Mayflower, this Court considered a small print provision of an insurance policy which denied coverage because an otherwise qualified driver was wearing a uniform of the armed forces of the United States. We have held that the "omnibus clause" is a part of every motor vehicle liability policy "by whatever name it is called" and we quoted from Schecter to point out that the primary purpose of the Financial Responsibility Act was "the providing of security against uncompensated damages arising from operation of motor vehicles on our highways." In Sandoval, relying on Mayflower, this Court refused to limit recovery by the injured party to the minimum amount specified in the Financial Responsibility Act under a policy which otherwise contained higher limits of coverage. However, in those cases we were dealing with wording in policies limiting liability to the extent the provisions may have been contrary to public policy. We have held these and other such non-liability clauses were against public policy. Those provisions were written by the insurance company, while here we are dealing with the uninsured motorist insurance provisions required by our statute,[1] in which 272 it is evident the Legislature was attempting to fill a gap in our law. The motorist is not compelled to carry this insurance, but he is encouraged to do so by the statute which requires that an insured must affirmatively reject such coverage if he does not desire it. In interpreting provisions of insurance policies issued in compliance with this provision of our statute we must give consideration as to what the Legislature deemed to be in the public interests when it passed the uninsured motorist law. They passed the law providing for minimum coverage in the amounts of $10,000 per person, $20,000 per occurrence, and $5,000 for property damage, as provided for in the Financial Responsibility Act,[2] after this court had handed down decisions liberally interpreting the insurance law for the protection of the public. It is reasonable to suppose that it intended such protection be extended in the Uninsured Motorist Act, and that could be not less than the protection of the minimum requirement provided for the public in the Financial Responsibility Act. Such protection is not to be whittled away by small print provisions, or extended beyond the intent of the Legislature. In the instant case, Wade's decedent bought insurance giving him this minimum, mandatory coverage, but he bought no more and he received the full measure of such coverage. He is now claiming the benefit of the uninsured motorist coverage bought by his brother who was the driver of the car. He should not receive this additional benefit unless the Legislature reasonably intended that he have it. It is true that the decedent's brother paid premiums on the policy which the decedent's administrator seeks to reach, but he did so for his own protection and for the protection of "other insureds" where such individuals would not otherwise have the benefit of available funds within the statutory financial limits. And it is not sheer speculation to conclude that the premiums paid for this coverage reflected the limitation of coverage imposed by the statutes. The administrator seeks to have this Court transform a limited purpose coverage into an extended insurance plan which can be reached even in amounts beyond those contemplated by statute. On the other hand Transportation urges upon us a construction of the "Other Insurance" clause which would virtually make uninsured motorist coverage non-existent equivalent to a biological appendix of the insurance industry in that it can be ignored most of the time but easily removed when it causes discomfort. In the case of Porter v. Empire Fire and Marine Insurance Company, 106 Ariz. 274, 475 P.2d 258, and Bacchus v. Farmers Insurance Group Exchange, 106 Ariz. 280, 475 P.2d 264, decided this date, we took a dim view of the carriers' lack of enthusiasm to fully abide by their liability within the limits imposed by A.R.S. § 28-1170 and § 20-259.01; here we also reject the zealousness of the insured's administrator to impose liability beyond the financial limits of these statutes. 273 When considering public policy there is a line of distinction which must be drawn between the two related statutes. The Legislature intended the Financial Responsibility Act to protect the general public against the individual, financially irresponsible motorist. On the other hand the Uninsured Motorist law compels the carriers to provide economic protection for the insured individual against the financially irresponsible segment of the driving public. The former is for the public in general and the latter for the individuals who have the foresight to protect themselves against the public. The only point of connection between the two statutes is the reference in the Uninsured Motorist Law to the minimum insurance amounts of 10/20/5 in the Financial Responsibility Act which, of itself, is a good indicia that the Legislature intended to confine its legislative concept of public policy to these stated amounts. The rule stated in Stephens v. Allied Mutual Insurance Company, 182 Neb. 562, 156 N.W.2d 133, has its full application in a case of this nature: "* * * The uninsured motorist statute established in this state a public policy that every insured is entitled to recover damages he or she would have been able to recover if the offending motorist had maintained a policy of liability insurance in a solvent company. * * " Here, had the offending motorist carried insurance in accord with the Financial Responsibility Act, Wade would have recovered the same amount $10,000 as he did here. The public policy as expressed in the statute has been satisfied and any "excess-escape clauses" applying to superfluous amounts of coverage fall in the area of contract law between the insuring parties and not in the realm of public interest. This principle is equally applicable to a case such as Geyer v. Reserve Insurance Company, supra, where a passenger recovered under the liability clause of the primary policy applicable to the car in which he was riding and also under his own uninsured motorist policy applicable to the car operated by the uninsured tort-feasor. Geyer was able to reach beyond the statutory minimum because both motorists were liable and he recovered the exact amount he would have obtained had both motorists been insured. In the instant case only the uninsured motorist was negligent and the liability coverage was not available. We feel this holding is consistent with the principles set forth in the two other related cases of Porter and Bacchus, supra. These cases required construction of uninsured motorist coverage provided for in A.R.S. 20-259.01. In Bacchus we held it a violation of the statute to allow insurers to reduce the minimum $10,000 of available insurance by setoff provisions for "advancements" under the Medical Payment Coverage of the policy. In Porter we refused to recognize the efficacy of the "excess-escape" clause of an insurance policy when it reduced the insured's available coverage to less than the minimum $10,000 per person. We feel that in so doing, this Court has abided by the Legislature's expression of our public policy by requiring that insurers stand behind their commitment of providing their insureds with no less than $10,000 per person when such insureds contract and pay for such insurance. This is its purpose. But beyond this amount the Court must leave the parties to the expressed terms of their contract. Professor Widiss in his treatise, A Guideline to Uninsured Motorist Coverage, criticized the unfairness that results in those states which fully enforce the terms of "Other Insurance" provisions ("Excessescape clauses"). Professor Widiss states: "These courts have precluded recovery both in cases where the claimant has not been adequately compensated by the primary coverage and in cases where he has been fully indemnified. It should be noted that a number of these decisions were made on the basis that there was no uninsured motorist legislation (which required coverage) applicable to the consideration of the endorsement before the 274 court. In several cases this was true because the state's uninsured motorist law was adopted after the accident at issue occurred. This is important because decisions reaching an opposite result in other jurisdictions have sometimes been predicated on the mandate created by legislation which is comparable to that which now exists in these states, and thus applies to cases which would now raise the question. Therefore, in light of decisions in other jurisdictions as to the relationship between such legislation and the enforceability of these provisions, the above-mentioned decisions precluding recovery may not necessarily serve as precedent for any new cases in jurisdictions where a legislative requirement of coverage now applies. However, it is also true that some decisions on the enforceability of the Other Insurance clauses have specifically concluded that the existence of uninsured motorist legislation does not affect the enforceability of this provision. The inequity of this provision is perhaps most clearly illustrated by examining the consequences of its application when several persons are seriously injured by an uninsured motorist as, for example, a hypothetical accident where one person is killed and four persons each sustain damages in excess of $10,000. The uninsured motorist endorsements are written with limits per accident, typically $20,000 per accident (although it may be as little as $10,000 or as much as $30,000 per accident in a few states). In this hypothetical case, just two of the possible claims would exceed the total amount of insurance provided by one endorsement. Alternatively, the coverage under the primary insurance might be divided evenly, thereby giving each party some portion of the $20,000, but leaving each of the injured parties inadequately indemnified. In this situation, the Other Insurance provision precludes recovery under the insured's own policy, even though primary insurance is either completely exhausted by other claimants or prorated among the claimants so that none of them is adequately indemnified." Widiss, A Guideline to Uninsured Motorist Coverage, (W.H. Anderson Co.) pp. 108-109. Although in the instant case this Court refuses to breach the financial limitations mandated by the Legislature in A.R.S. § 28-1170 and A.R.S. § 20-259.01, it is our opinion that the decisions handed down today in the companion cases of Porter and Bacchus, supra, adequately deal with the basic inequity stressed by Professor Widiss, up to the $10,000/$20,000 figures contained in the statutes. More than this we cannot do. If the health, safety and welfare of the motoring public require greater protection, the means for providing such extended insurance coverage lies solely within the province of the Legislature. Therefore, the decision of the Court of Appeals is vacated, the judgment of the Superior Court is reversed and this matter remanded for entry of judgment consistent with this decision. LOCKWOOD, C.J., STRUCKMEYER, V.C.J., and UDALL and HAYS, JJ., concur. NOTES [1] § 20-259.01. "Coverage to include protection from operators of uninsured motor vehicles; right or rejection; supplemental or renewal policy On and after January 1, 1966, no automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle, shall be delivered or issued for delivery in this state, with respect to any motor vehicle registered or principally garaged in this state, unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in § 28-1142, under provisions filed with and approved by the insurance director, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom. This coverage shall at the time the policy is issued be called to the attention of the named insured who shall have the right to reject such coverage. Unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer." Added Laws 1965, Ch. 34, § 1. [2] § 28-1170. "Motor vehicle liability policy" defined * * * * * * "B. * * * 2. It shall insure the person named therein and any other person, as insured, using the motor vehicle or motor vehicles with the express or implied permission of the named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of the motor vehicle or motor vehicles within the United States or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each motor vehicle as follows: (a) Ten thousand dollars because of bodily injury to or death of one person in any one accident. (b) Subject to the limit for one person, twenty thousand dollars because of bodily injury to or death of two or more persons in any one accident. (c) Five thousand dollars because of injury to or destruction of property of others in any one accident. * * *" As amended, Laws 1961, Ch. 94, § 4.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1367818/	432 F. Supp. 971 (1977) Jim LENDALL, Plaintiff, v. M. Olin COOK, as Director of Arkansas Department of Higher Education, Defendant, Elizabeth Ann Bishop, Mark S. Carter, Patricia Christine Hipp, Jerry House, Gale Houston, Deborah S. Moore, Dale W. Williams, and Alan Woodfield, Intervenors. No. LR-75-C-287. United States District Court, E. D. Arkansas, W. D. May 27, 1977. 972 Jim Lendall, pro se. Sam I. Bratton, Asst. Atty. Gen., Lonnie A. Powers, Deputy Atty. Gen., Little Rock, Ark., for defendant. Edward L. Wright, Philip S. Anderson, Wright, Lindsey & Jennings, Little Rock, 973 Ark., Charles H. Wilson, Pierce O'Donnell, Williams, Connolly & Califano, Washington, D.C., for intervenors. Before HENLEY, Circuit Judge, and EISELE and SHELL, District Judges. EISELE, Chief District Judge. MEMORANDUM OPINION This case concerns the constitutionality of the Arkansas State Scholarship Program under the Establishment Clause of the First Amendment. Facts The Scholarship Program was enacted in 1975. Ark.Stat.Ann. §§ 80-3374-3388. Its express purpose is to further the welfare and security of the state and nation by enabling deserving students to obtain higher education. § 80-3374. The Act provides for scholarships for qualifying students attending "approved" public or private colleges in the state. § 80-3376. Students qualify on the basis of need and academic ability. § 80-3377. "Approved" institutions are defined as follows: "(b) `Approved private institution' means a two year or four year institution of higher education, dedicated to educational purposes, located in Arkansas which (1) is operated privately under the control of an independent board and not directly controlled or administered by any public agency or political subdivision; (2) restricts the use of public funds to educational programs with a secular purpose; (3) provides at least a collegiate level course of instruction for a minimum of two [2] years, leading or directly creditable toward an associate or baccalaureate degree; (4) is accredited by an accrediting agency certified and recognized by the United States Office of Education, or as a school giving satisfactory assurance that it has the potential for accreditation and is making progress which, if continued, will result in its achieving accreditation; (5) does not discriminate in the admission of students on the basis of race, color, religion, sex or national origin and is in compliance with the Federal Civil Rights Acts of 1964 and 1968 and Executive Orders issued pursuant thereto; (6) subscribes to the principle of Academic Freedom. [Emphasis added.] "(c) `Approved public institution' means a two year or four year institution of higher education, dedicated to educational purposes, located in Arkansas which (1) is directly controlled or administered by a public agency or political subdivision; (2) receives appropriations directly or indirectly from the General Assembly for operating expenses; (3) provides a collegiate level course for a minimum of two [2] years, leading to or directly creditable toward an associate or baccalaureate degree; (4) is accredited by an accrediting agency certified and recognized by the United States Office of Education, or as a school giving satisfactory assurance that it has the potential for accreditation and is making progress which, if continued, will result in its achieving accreditation; (5) does not discriminate in the admission of students on the basis of race, color, religion, sex, or national origin and is otherwise in compliance with the Federal Civil Rights Acts of 1964 and 1968 and Executive Orders issued pursuant thereto; (6) subscribes to the principle of Academic Freedom." § 80-3375. The scholarships are available only during a student's freshman year, in the maximum amount of $300. §§ 80-3378-79. The funds are paid directly to the student. § 80-3378. The Arkansas Department of Higher Education is charged with administering the program. § 80-3381. The legislature appropriated approximately $61,000 in scholarship funds for 1975-76 and $494,000 for 1976-77. (Defendant's exhibit 3.) As an initial step in implementing the Act, the Director of Higher Education circulated questionnaires to each public and private college in Arkansas for purposes of determining whether they met the statutory requirements for approved institutions. It appears that there are 12 private colleges 974 in the state, all of which have some religious orientation. Each of the 12 private college presidents stated that his institution would restrict the use of public funds to educational programs having a secular purpose. The responses, however, raised other questions of eligibility, concerning accreditation and academic freedom, with respect to three private colleges. The questions were referred to the Attorney General. By Opinion No. 75-100, dated September 3, 1975, the Attorney General stated, inter alia, that certain religiously oriented colleges might not satisfy the statutory criterion of subscribing to the principle of academic freedom, and, further, that treating certain religiously oriented colleges as approved institutions might place the state in the position of advancing religion in violation of the First Amendment. The Attorney General suggested that the private colleges be evaluated under the following standards, articulated in Americans United for Separation of Church and State v. Bubb, 379 F. Supp. 872 (D.Kan.1974) (three-judge court): "(1) does the college impose religious restrictions on admission of students? "(2) does the college require attendance of pupils at religious activities? "(3) does the college require obedience by students to the doctrines and dogmas of a particular faith? "(4) does the college require pupils to attend instruction in the theology or doctrine of a particular faith? "(5) is the college an integral part of the religious mission of the church sponsoring it? "(6) does the college have as a substantial purpose the inculcation of religious values? "(7) does the college impose religious restrictions on faculty appointments? "(8) does the college impose religious restrictions on what or how the faculty may teach?" He stated that one or more affirmative responses might indicate that the school in question is so permeated by religion that granting a scholarship to an attending student might have the primary effect of advancing religion. The Board of Higher Education, thereafter, circulated additional questionnaires delving into the areas suggested by the Attorney General. On October 3, 1975, after considering the responses, the Board voted to approve nine of the 12 private Arkansas colleges. As to the remaining three, Crowley's Ridge College, Central Baptist College and John Brown University, action was deferred due to the apparent heavy religious orientation of these schools. John Brown University later submitted additional information to the Board. On July 10, 1976, the Board voted to approve that institution. It appears, then, that at present 10 of the 12 private colleges in the state are deemed to be approved institutions. Proceedings On September 23, 1975, Jim Lendall, as an Arkansas taxpayer, commenced this action against M. Olin Cook, Director of the Department of Higher Education, alleging that the scholarship program was violative of the establishment clause of the First Amendment insofar as it provided funds to students attending any of the 12 private colleges in the state. Plaintiff sought an injunction against the expenditure of public funds for scholarships to private colleges, and a declaration that the Act is unconstitutional. On February 13, 1976, the Court granted leave to intervene as defendants to eight persons, all of whom were first year students at public or private Arkansas colleges and were qualified for state scholarships. Seven of the intervenors, six of whom attended private colleges, actually received scholarships. Deborah S. Moore, the eighth intervenor, was awarded a $250 scholarship for 1975-76, but the award was revoked after the Board failed to approve John Brown University, the school she was attending. A three-judge court has been convened. An evidentiary hearing was held on August 975 31, 1976. Arguments were heard on October 22, 1976. Essentially, three different positions are being asserted by the respective parties on the merits of this lawsuit. Plaintiff contends that providing scholarships to students attending any of the 12 private Arkansas colleges is unconstitutional. Defendant Cook contends that, as properly interpreted, the Act limits approved schools to those that are not overly permeated by religion, and that, as applied, the Act is constitutional. Defendant-intervenors contend that, as properly interpreted, the Act does not exclude heavily religious schools from the category of approved schools. They further argue that the Act is constitutional nonetheless since it provides aid to students, not institutions. Abstention A threshold question arises as to whether the Court should abstain in the case and allow the Arkansas Supreme Court to initially consider certain issues concerning the Act. Two potential grounds for abstention are presented by this case. First, the defendant and defendant-intervenors urge different constructions of the Act as to its applicability to private colleges, and the state courts have not had occasion to authoritatively construe the Act on this point. While neither construction would remove the constitutional issue from the case, the constitutional issue is, nevertheless, cast in a significantly different posture according to which interpretation of the Act is adopted. The Supreme Court has held that abstention may be proper where an authoritative construction of a state statute might materially change the nature of the constitutional issue presented. See, e. g., Bellotti v. Baird, 428 U.S. 132, 96 S. Ct. 2857, 49 L. Ed. 2d 844 (1976); Colorado River Water Cons. Dist. v. United States, 424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976). Second, plaintiff has injected an issue as to whether the Act violates the Arkansas constitutional provision dealing with separation of church and state. Ark. Const., Art. 2, § 24. Abstention may be proper where a resolution of the state constitutional claim might obviate the need to resolve the federal constitutional claim and the state constitutional provision does not mirror a similar provision in the federal constitution. See, e. g., Examining Bd. of Engineers v. Flores de Otero, 426 U.S. 572, 96 S. Ct. 2264, 49 L. Ed. 2d 65 (1976); Herald Co. v. McNeal, 553 F.2d 1125 (8th Cir., 1977). It is important to note that abstention should not automatically follow upon a determination that there is a permissible basis therefor; rather, a careful consideration of the particular facts and circumstances involved should be undertaken. See N.A.A.C.P. v. Bennett, 360 U.S. 471, 79 S. Ct. 1192, 3 L. Ed. 2d 1375 (1959). The Supreme Court has stated: "Abstention from the exercise of federal jurisdiction is the exception, not the rule. `The doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in the exceptional circumstances where the order to the parties to repair to the State court would clearly serve an important countervailing interest.' County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-189 [, 79 S. Ct. 1060, 1063, 3 L. Ed. 2d 1163, 1166] (1959)." Colorado River Water Const. Dist. v. United States, supra, 424 U.S. at 815, 96 S.Ct. at 1244. The benefits of abstention must be weighed against the delay and expense which is an inevitable by-product. See Bellotti v. Baird, supra; Harris County Comm'rs. Court v. Moore, 420 U.S. 77, 95 S. Ct. 870, 43 L. Ed. 2d 32 (1975); Herald Co. v. McNeal, supra. The two arguments for abstention set forth above are considered below in light of these principles. 976 1. State constitutional claim Whether the Court should abstain in favor of a state court determination of whether the Act violates the state constitution depends on whether the Arkansas constitutional guarantee of separation of church and state mirrors the First Amendment establishment clause. If it is unique, abstention may be proper. If it is similar, abstention would be improper. See Examining Bd. of Engineers v. Flores de Otero, supra; Herald Co. v. McNeal, supra. As the Court stated in Examining Bd. of Engineers, to require a plaintiff to first seek relief under a state constitutional provision mirroring those in the federal constitution "would convert abstention from an exception into a general rule." 426 U.S. at 598, 96 S.Ct. at 2279. Article 2, § 24 of the Arkansas Constitution provides: "All men have a natural and indefeasible right to worship Almighty God according to the dictates of their own consciences; no man can, of right, be compelled to attend, erect or support any place of worship; or to maintain any ministry against his consent. No human authority can, in any case or manner whatsoever, control or interfere with the right of conscience; and no preference shall ever be given, by law, to any religious establishment, denomination or mode of worship above any other." The language employed is substantially different from the establishment clause, which merely provides that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." However, we have found no Arkansas cases holding the state provision to be more restrictive than its federal counterpart. Moreover, the language used does not necessarily suggest that the state provision was intended to be more restrictive than the First Amendment. Nevertheless, it is a close question whether the state provision might be viewed as more restrictive. Therefore, we must turn to a consideration of the delay and expense which would occur should we decide to abstain. First, however, we will review the effect of the two possible interpretations of the Scholarship Program Act on the constitutional issue. 2. Posture of constitutional issue As noted above, the fact that the Act is susceptible of at least two different interpretations, each of which would cast the question of its constitutionality in a different light, provides a permissible basis for abstention. In favor of abstention, it can be argued that declining to abstain would require this Court to either authoritatively interpret the Act without guidance from the state courts, or run the risk of unnecessarily deciding a constitutional question. (As to the latter suggestion, the Court might decide the constitutionality of the Act as applied without necessarily adopting an authoritative interpretation. Later state court proceedings, however, could result in a different interpretation and thus render the Court's constitutional analysis nugatory.) A number of arguments can also be mustered against abstention and, in the opinion of the Court, they preponderate. First, regardless of whether defendant Cook's interpretation of the Act is the one that the Arkansas courts would adopt, it is at least one of which the Act is susceptible. Therefore, plaintiff's complaint does not require the Court to adopt an authoritative interpretation of the Act. Plaintiff's complaint seeks only a declaration that the Act is unconstitutional on its face, and an injunction against the expenditure of state funds thereunder which would flow to private religious schools. A ruling that the Act, as presently applied, is constitutional would, therefore, dispose of all of plaintiff's claims. Second, it can be argued the Court concludes, correctly that the Court need not reach defendant-intervenors' claim that their interpretation of the Act is the proper one (and that the Act is nonetheless constitutional). Intervenors' claim is raised only as an abstract legal argument and not in connection with any prayer for relief. Moreover, defendant-intervenors would appear 977 to lack standing to assert a claim that defendant Cook is improperly denying the benefits of the Act to certain schools through an erroneous interpretation of it. Seven of the eight intervenors attend schools which have been approved. Deborah Moore, the eighth, had her scholarship revoked due to the deferral of approval of John Brown University. However, Miss Moore is no longer a freshman; John Brown University has now been approved; and Miss Moore asserts no claim for retroactive reinstatement of her scholarship. Third, this action has been pending since September, 1975, and the parties have invested considerable time, effort, and, presumably, money into it. Abstention would cause further delay and expense. Finally, none of the parties has requested that the Court abstain, and it is not clear that any of them would be willing to institute, and carry through with, appropriate state proceedings. Moreover, the only party philosophically attuned to presenting the argument (to the state courts) that defendant has construed the Act too narrowly may have a standing problem. In sum, although the question is a close one, we conclude that we should not abstain. If the issue had been raised, or noted, at an early stage in this proceeding, we probably would have reached a contrary conclusion. We do, however, limit our holding on the merits to the constitutionality of the Act as applied by the defendant Cook, without sanctioning that interpretation as necessarily the most appropriate one. This approach will not foreclose, or in any way inhibit, subsequent state proceedings to determine the proper interpretation of the Act, and a constitutional challenge should a different interpretation be adopted. The Merits In light of the discussion above, the analysis of the merits will focus on the Act as applied by defendant Cook. The Supreme Court has struck down a variety of aid to religious school programs and upheld others. See Roemer v. Maryland Public Wks. Bd., 426 U.S. 736, 96 S. Ct. 2337, 49 L. Ed. 2d 179 (1976) (plurality opinion), and cases discussed therein. It has not considered a program precisely like the one involved here.[1] From these cases, however, has emerged a three-part test for determining whether statutes affording aid to church related schools are violative of the establishment clause. First, the statute must have a secular legislative purpose. Second, its primary effect must be one that neither advances nor inhibits religion. Finally, the statute must not foster excessive government entanglement with religion. See, e. g., Roemer v. Maryland Public Wks. Bd., supra; Lemon v. Kurtzman, 403 U.S. 602, 91 S. Ct. 2105, 29 L. Ed. 2d 745 (1971). Defendant-intervenors contend that these tests are inapplicable here and the Court should simply sustain the Act without looking to them since the Act provides for aid to students, not schools. They rely on three cases in which such an approach was taken: Meek v. Pittenger, 421 U.S. 349, 95 S. Ct. 1753, 44 L. Ed. 2d 217 (1975); Board of Education v. Allen, 392 U.S. 236, 88 S. Ct. 1923, 20 L. Ed. 2d 1060 (1968); and Everson v. Board of Education, 330 U.S. 1, 67 S. Ct. 504, 91 L. Ed. 711 (1947). Meek and Allen involved textbook loan programs. Everson involved transportation assistance. We 978 conclude that the approach urged by defendant-intervenors should be rejected. First, while the Act provides aid directly to students and does not require that it be spent for tuition, it is clear that some of the aid is passed on to schools in the form of tuition and fees. Second, the Supreme Court has not drawn the sharp distinction between student-aid and school-aid programs urged by defendant-intervenors. In Committee for Public Education v. Nyquist, 413 U.S. 756, 93 S. Ct. 2955, 37 L. Ed. 2d 948 (1973), the Court stated at 781, 93 S.Ct. at 2969: ". . . The State and intervenor-appellees rely on Everson and Allen for their claim that grants to parents, unlike grants to institutions, respect the `wall of separation' required by the Constitution. It is true that in those cases the Court upheld laws that provided benefits to children attending religious schools and to their parents: As noted above, in Everson parents were reimbursed for bus fares paid to send children to parochial schools, and in Allen textbooks were loaned directly to the children. But those decisions make clear that, far from providing a per se immunity from examination of the substance of the State's program, the fact that aid is disbursed to parents rather than to the schools is only one among many factors to be considered." The Court, in Nyquist, went on to analyze a tuition reimbursement plan under the three-part test. Finally, a three-judge district court has applied the test to a case similar to this one. Americans United v. Bubb, supra. Accordingly the Act will be analyzed under the more restrictive three-part test. 1. Secular purpose The Act clearly has a secular purpose. The statement of purpose in § 80-3374 evinces a reasonable secular purpose, and there is nothing in the record to indicate that the Act is a subterfuge for something else. 2. Primary effect The Supreme Court has defined aid having a primary effect of advancing religion as follows: "Aid normally may be thought to have a primary effect of advancing religion when it flows to an institution in which religion is so pervasive that a substantial portion of its functions are subsumed in the religious mission or when it funds a specifically religious activity in an otherwise substantially secular setting." Hunt v. McNair, 413 U.S. 734, 743, 93 S. Ct. 2868, 2874, 37 L. Ed. 2d 923 (1973). In Roemer, supra, 426 U.S. at 755, 96 S.Ct. at 2349, the Court stated, with respect to primary effect: "Hunt requires (1) that no state aid at all go to institutions that are so `pervasively sectarian' that secular activities cannot be separated from sectarian ones, and (2) that if secular activities can be separated out, they alone may be funded." Here, the first question, then, is whether the Arkansas private colleges which are approved, and are, therefore, in a position to derive benefit from the scholarship program, are so pervasively sectarian that secular and sectarian activities cannot be separated. The Supreme Court has not adopted specified standards for applying these tests; however, the district court in Americans United v. Bubb, supra, set forth eight criteria to be considered. See above. These criteria are drawn from, or comport with, various factors focused upon in a number of Supreme Court decisions. See Roemer, supra; Hunt v. McNair, 413 U.S. 734, 93 S. Ct. 2868, 37 L. Ed. 2d 923 (1973); Tilton v. Richardson, 403 U.S. 672, 91 S. Ct. 2091, 29 L. Ed. 2d 79 (1971). In general, the Supreme Court has held to be not pervasively sectarian "institutions with admittedly religious functions but whose predominant higher education mission is to provide their students with a secular education." Roemer, supra, at 758-59, n. 21; Tilton v. Richardson, supra, 403 U.S. at 686-87, 91 S.Ct. at 2099. 979 Evidence concerning the nature of the Arkansas private schools is set forth in the transcript of the evidentiary hearing, the offers of proof of the defendant-intervenors, and the Minutes of the Board of Higher Education's meetings of October 3, 1975, and July 9, 1976. (Defendant's exhibits 3 and 6.) That evidence, essentially noncontroverted, clearly shows, and the Court so finds, that none of the approved schools is pervasively sectarian. The next question is whether the use of state funds can be restricted to secular activities at the approved colleges. The Court finds that they can. First, as noted above, all of the private college presidents represented to the Board of Higher Education that they could and would do so. Second, the Supreme Court has indicated that it may be difficult to separate secular and sectarian activities at parochial elementary and secondary schools where the students are at an impressionable age and religious indoctrination is an important institutional aim, but that the same cannot be said of colleges, since students there are less impressionable and the opportunities for indoctrination more limited. Compare Tilton v. Richardson, supra, with Lemon v. Kurtzman, supra. Finally, the fact that the religious aspects of the colleges may in some manner benefit from the scholarship program does not alone serve to invalidate the Act. In Hunt v. McNair, supra, the Court stated, 413 U.S. at 743, 93 S.Ct. at 2874: ". . . [T]he Court has not accepted the recurrent argument that all aid is forbidden because aid to one aspect of an institution frees it to spend its other resources on religious ends." In Committee for Public Education v. Nyquist, supra, 413 U.S. at 775, 93 S.Ct. at 2967, the Court stated: "But an indirect and incidental effect beneficial to religious institutions has never been thought a sufficient defect to warrant the invalidation of a state law." See also, generally, Roemer, supra. The above discussion has focused upon whether the Act advances religion. Defendant-intervenors raise an interesting argument that the Act, as presently applied, inhibits religion. They contend that limiting approved schools to those which are not overly permeated by religion encourages schools to sacrifice their religious ideals in order to qualify. This argument has drawn support from Mr. Justice Stevens in his dissenting opinion in Roemer, supra, 426 U.S. at 775, 96 S.Ct. at 2358: "My views are substantially those expressed by Mr. Justice Brennan. However, I would add emphasis to the pernicious tendency of a state subsidy to tempt religious schools to compromise their religious mission without wholly abandoning it. The disease of entanglement may infect a law discouraging wholesome religious activity as well as a law encouraging the propagation of a given faith." That argument has been implicitly rejected, however, by the majority of the Court. See Roemer, supra, (and cases discussed there). 3. Excessive entanglement The third part of the test requires an evaluation of the degree to which the Act necessitates an entanglement between the state and religiously oriented schools. "The objective is to prevent, as far as possible, the intrusion of either into the precincts of the other." Lemon v. Kurtzman, supra, 403 U.S. at 614, 91 S.Ct. at 2112. The primary inquiry is whether effectuation of the state program will require such close surveillance of religious institutions that the state will become unduly entangled with them. The relevant factors here are the administrative requirements of the Act, the character of the institutions, and the degree of sectarianism of the schools. The relevance of the latter factor is that as sectarianism increases, the degree of surveillance necessary to insure that state funds are put only to secular use also increases. See Roemer, supra; Meek v. Pittenger, supra; Committee for Public Education v. Nyquist, supra; Hunt v. McNair, supra; Tilton v. Richardson, supra. Here, the Act requires the Department of Higher Education to scrutinize the operations of the colleges for purposes of determining *980 whether they should be approved. Also, some type of ongoing monitoring will be needed in this regard. In fact, approved institutions are required to enter into a contract with the state which calls for the schools to provide various information to the state pertaining to institutional eligibility, student refund policies, educational costs, and student scholarship recipients. (Defendant's exhibit 8.) It is evident, then, that the Act requires substantial scrutiny of religious institutions. The degree of resulting entanglement, however, is diminished by the fact that the institutions are colleges rather than elementary or secondary schools, and none of the approved schools is pervasively sectarian. In Roemer, the Court held that a relationship between the state and church-related schools, which was very similar to that involved here, did not constitute excessive entanglement. The Court states: "They and the other contacts between the Council and the colleges are not likely to be any more entangling than the inspections and audits incident to the normal process of the colleges' accreditation by the State." 426 U.S. at 764, 96 S.Ct. at 2353. The Court reaches the same conclusion here. Another excessive entanglement question is presented by the fact that the Act will require periodic appropriations by the legislature. The Supreme Court has stated that where a program which aids sectarian schools requires annual appropriations, the potential for recurring political divisiveness along religious lines arises, and this is a factor to be considered in evaluating the excessive entanglement issue. See Roemer, supra; Meek v. Pittenger, supra; Committee for Public Education v. Nyquist, supra; Lemon v. Kurtzman, supra. We conclude, nevertheless, that the Arkansas Scholarship Program should not fall for that reason. The potential for political divisiveness is lessened here by the fact that the aided institutions are colleges, and the Act provides aid to students attending public and private colleges alike. See Roemer, supra. Conclusion The Court concludes that the Act, as applied, is constitutional, and that plaintiff's complaint and intervenors' intervention should be dismissed. NOTES [1] Note, however, that in Committee for Public Ed. v. Nyquist, 413 U.S. 756, 93 S. Ct. 2955, 37 L. Ed. 2d 948 (1973), the Court alluded to the constitutional issue raised by defendant-intervenors' interpretation of the Act but left it unresolved. Id. at 782, n. 38, 93 S.Ct. at 2970. ". . . [W]e need not decide whether the significantly religious character of the statute's beneficiaries might differentiate the present cases from a case involving some form of public assistance (e. g., scholarships) made available generally without regard to the sectarian-nonsectarian, or public-nonpublic nature of the institution benefited. See Wolman v. Essex, 342 F. Supp. 399, 412-413 (SD Ohio), aff'd, 409 U.S. 808, 93 S. Ct. 61, 34 L. Ed. 2d 69 (1972). Thus, our decision today does not compel, as appellees have contended, the conclusion that the educational assistance provisions of the `G.I. Bill,' 38 U.S.C. § 1651, impermissibly advance religion in violation of the Establishment Clause. See also n. 32, supra."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/480253/	806 F.2d 910 7 Fed. R. Serv. 3d 38 Nancy HALE, et al., Plaintiffs-Appellants,v.DEPARTMENT OF ENERGY, et al., Defendants-Appellees. No. 86-1912. United States Court of Appeals,Ninth Circuit. Argued and Submitted Nov. 13, 1986.Decided Dec. 18, 1986. Albert G. Marquis, Marquis & Haney, Las Vegas, Nev., for plaintiffs-appellants. Robert J. Johnston, Asst. U.S. Atty., U.S. Atty.'s Office, Las Vegas, Nev., for defendants-appellees. Appeal from the United States District Court for the District of Nevada. Before WRIGHT, SNEED, and KOZINSKI, Circuit Judges. SNEED, Circuit Judge: 1 Nancy Hale and others similarly situated (appellants) appeal from the district court's denial of their motion for a preliminary injunction to enjoin the Department of Energy (DOE) from enforcing its regulations dealing with public demonstrations on the Nevada Nuclear Weapons Test Site (NTS). We affirm. I. FACTS AND PROCEEDINGS BELOW 2 The NTS consists of a tract of land containing approximately 850,764 acres located primarily in Nye County, Nevada. The land was removed from the public domain by various land withdrawals and is reserved as an outdoor laboratory for nuclear weapons testing. The NTS is located approximately sixty-five miles north of Las Vegas, and is adjacent to U.S. Highway 95. The road to Mercury (Mercury Road) is the main road by which access to the NTS from Highway 95 is obtained. 3 A cattle guard is located very near the Mercury Road exit ramp off Highway 95. Approximately two miles beyond the cattle guard off to the side of Mercury Road is an area that the DOE has designated as a "parking and demonstration area." Another mile beyond the parking and demonstration area is the main guard gate to the NTS. The entire area inside the cattle guard, including the three-mile stretch of Mercury Road from the cattle guard to the main guard gate, is part of the NTS that has been removed from the public domain.1 This three-mile roadway is patrolled by security guards from the test site. Members of the public are generally permitted to drive past the cattle guard to the main guard gate, where they must state their reasons, if any, for being within the NTS. If they have no business within the NTS, they are asked to return to the cattle guard and leave NTS property. 4 NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE 5 The DOE currently limits demonstrations on NTS property to the designated parking and demonstration area, and requires demonstrators to apply for permits. Applications for permits must be submitted thirty days in advance of any demonstration, contain the reasons for the demonstration, and be accompanied by any leaflets or handbills that the demonstrators wish to distribute.2 If a permit is obtained, demonstrators are limited to the parking and demonstration area. Demonstrators without permits are required to remain outside of the cattle guard. 6 In September, 1985, appellant Nancy Hale applied for a demonstration permit on behalf of the American Peace Test. The application was for the thirty-one day period between October 18, 1985, and November 18, 1985, from sunup to sundown. The DOE approved the permit, but restricted it to the dates of November 4 through November 8, 1985, from 7:00 A.M. to noon. The number of participants was limited to one hundred, and anyone under the age of eighteen was prohibited from participating.3 The DOE subsequently revoked Hale's permit because of alleged violations. When demonstrators have crossed the white boundary line of the parking and demonstration area or when they have crossed the cattle guard without a permit, they have been arrested for trespassing. 7 The appellants sought a preliminary injunction enjoining the DOE from enforcing its regulations pertaining to demonstrations. They assert the right to demonstrate freely along Mercury Road between Highway 95 and the main guard gate, and contend that the regulations of the DOE violate their right of free speech under the First Amendment. Following a nonevidentiary hearing, the district court denied the motion for a preliminary injunction. The court found, inter alia, that the three-mile stretch along Mercury Road is not a traditional public forum, and that the appellants failed to establish a likelihood of success on the merits. The appellants timely filed this appeal. II. DISCUSSION A. Standard of Review 8 Hale urges this court to reject the abuse of discretion standard, and to adopt the de novo standard which the Second Circuit has used in reviewing the grant or denial of a preliminary injunction on a paper record containing only affidavits, pleadings and briefs without an evidentiary hearing. See Norlin Corp. v. Rooney, Pace Inc., 744 F.2d 255, 260-61 (2d Cir.1984). The Second Circuit has reasoned that when the district court's decision is based entirely upon papers and not upon live testimony, the appellate court is in as good a position as the court below to make factual findings.4 Id. at 261. 9 This reasoning has been rejected both by the Supreme Court's reading of former Federal Rule of Civil Procedure 52(a), and by a recent amendment to Rule 52(a). Former Rule 52(a) provided, in part, that "[f]indings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." In Anderson v. City of Bessemer City, 470 U.S. 564, 574-75, 105 S. Ct. 1504, 1512, 84 L. Ed. 2d 518 (1985), the Court read the rule literally and found that the "clear error" standard governs even when the district court's findings are based solely on documentary evidence. 10 Anderson led the Seventh Circuit to reject the de novo standard in reviewing a district court's denial of a preliminary injunction based on documentary evidence. Lawson Prods., Inc. v. Avnet, Inc., 782 F.2d 1429 (7th Cir.1986). The Lawson court stated that if the lack of an evidentiary hearing has no effect on an appellate court's review of the underlying factual determinations, see Anderson, 470 U.S. at 574-75, 105 S.Ct. at 1512, it is axiomatic that it has "no impact on the deferential standard of review ... traditionally required in preliminary injunction appeals." 782 F.2d at 1439. Regardless of whether there is an evidentiary hearing or just the papers of the case, the parties must realize that their appearance before the district court is the "main event." Id. at 1440. 11 The identical result is embodied in the 1985 amendment to Federal Rule of Civil Procedure 52(a). Rule 52(a) now provides: "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses" (emphasis added). The advisory committee's note makes it clear that the amendment was intended to reject the line of authority holding that, when a trial court's findings are based solely on documentary evidence, appellate review may be de novo. Fed.R.Civ.P. 52(a) advisory committee's note to 1985 amendment (citing Jack Kahn Music Co. v. Baldwin Piano & Organ Co., 604 F.2d 755 (2d Cir.1979), one of the Second Circuit cases applying the de novo standard in reviewing the grant or denial of a preliminary injunction on a paper record). 12 We hold that review of the district court's denial of appellants' motion must be under the standard of abuse of discretion. 13 B. Standards for Preliminary Injunctive Relief 14 To succeed on a motion for a preliminary injunction, the movant must show "either (1) a combination of probable success on the merits and the possibility of irreparable injury or (2) that serious questions are raised and the balance of hardships tips sharply in its favor." Los Angeles Memorial Coliseum Comm'n v. National Football League, 634 F.2d 1197, 1201 (9th Cir.1980). These criteria are not entirely separate tests, but rather are "extremes of a single continuum." Benda v. Grand Lodge of Int'l Ass'n of Machinists, 584 F.2d 308, 315 (9th Cir.1978), cert. dismissed, 441 U.S. 937, 99 S. Ct. 2065, 60 L. Ed. 2d 667 (1979). "The 'irreducible minimum,' however, is that the moving party demonstrate 'a fair chance of success on the merits' or 'questions ... serious enough to require litigation.' " Sports Form, Inc. v. United Press Int'l, Inc., 686 F.2d 750, 753 (9th Cir.1982) (quoting Benda, 584 F.2d at 315). C. Likelihood of Success on the Merits 1. Forum Analysis 15 The fundamental issue this litigation presents is whether the appellants have a First Amendment right to demonstrate freely along Mercury Road between the cattle guard and the main guard gate. The Supreme Court has established that the scope of the government's power to restrict First Amendment activity on public property depends upon the type of forum involved. See Cornelius v. NAACP Legal Defense & Educ. Fund, Inc., 473 U.S. 788, 105 S. Ct. 3439, 3448, 87 L. Ed. 2d 567 (1985); Perry Educ. Ass'n v. Perry Local Educators' Ass'n, 460 U.S. 37, 44-46, 103 S. Ct. 948, 954-55, 74 L. Ed. 2d 794 (1983). In Perry, the Court identified three types of fora: the traditional public forum, the public forum created by government designation, and the nonpublic forum. As to a traditional public forum, such as a public street or park, the government (1) may enforce content-based regulations if "necessary to serve a compelling state interest and [if] narrowly drawn to achieve that end," and (2) may enforce content-neutral, time, place, and manner restrictions only where they "are narrowly tailored to serve a significant government interest, and leave open ample alternative channels of communication." Perry, 460 U.S. at 45, 103 S.Ct. at 954. The same standards govern public property that is not a traditional public forum, but which has been opened by the government as a place for expressive activity. Id. at 45-46, 103 S.Ct. at 954-55. Examples of this second category include university meeting facilities, Widmar v. Vincent, 454 U.S. 263, 102 S. Ct. 269, 70 L. Ed. 2d 440 (1981), school board meetings, City of Madison Joint School Dist. No. 8 v. Wisconsin Employment Relations Comm'n, 429 U.S. 167, 97 S. Ct. 421, 50 L. Ed. 2d 376 (1976), and municipal theaters, Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 95 S. Ct. 1239, 43 L. Ed. 2d 448 (1975). Although the government, when it has opened a place for expressive activity, is bound by the same standards that apply in a traditional public forum, it "is not required to indefinitely retain the open character of the facility...." Perry, 460 U.S. at 46, 103 S.Ct. at 955. 16 The nonpublic forum is public property that is not by tradition or designation a forum for public communication. Such property is governed by different standards. Government has the right to preserve the property under its control for its lawfully dedicated purpose. Perry, 460 U.S. at 46, 103 S.Ct. at 955; United States Postal Serv. v. Council Civic Ass'ns, 453 U.S. 114, 129-30, 101 S. Ct. 2676, 2685, 69 L. Ed. 2d 517 (1981); Greer v. Spock, 424 U.S. 828, 836, 96 S. Ct. 1211, 1216, 47 L. Ed. 2d 505 (1976); Adderley v. Florida, 385 U.S. 39, 47, 87 S. Ct. 242, 247, 17 L. Ed. 2d 149 (1966). It may enforce regulations of speech as long as they are reasonable and not aimed at suppressing the content of the expressive activity. Perry, 460 U.S. at 46, 103 S.Ct. at 955. 17 The forum in question here is the three-mile stretch of Mercury Road between the cattle guard and the main guard gate. The district court found that the roadway is not a public forum because it is not open to unrestricted public use. Public fora are those "places which by long tradition or by government fiat have been devoted to assembly and debate." Id. at 45, 103 S. Ct. at 954. Mercury Road does not fit this definition. The land containing the roadway has been withdrawn from public use for the purpose of conducting nuclear testing. Its use for expressive, as well as nonexpressive, activity by the public is limited. 18 Hale contends that the roadway has become a public forum because the government allows the general public unrestricted access to Mercury Road up to the point of the main guard gate. The DOE, as already pointed out, admits that visitors are allowed to approach the main guard gate and state their reasons, if any, for being within the NTS. However, Mercury Road is patrolled by guards and these guards may stop a visitor anywhere along the roadway. Mercury Road between Highway 95 and the main guard gate is not an open thoroughfare despite the fact that visitors are generally allowed to approach the main guard gate without being stopped. To say otherwise is to confuse what is no more than a long driveway with the highway with which it connects. 19 The Supreme Court has stated that "[t]he government does not create a public forum by inaction or by permitting limited discourse, but only by intentionally opening a non-traditional forum for public discourse." Cornelius, 105 S. Ct. at 3449 (emphasis added). Allowing the public to drive past the cattle guard to the main guard gate does not transform the roadway into a government-created public forum. There is no intentional opening for public discourse in this activity. Nor does the designation of a demonstration area under the circumstances of this case amount to a designation of that area as a "place for expressive activity." 20 Hale argues that the present case is governed by Flower v. United States, 407 U.S. 197, 92 S. Ct. 1842, 32 L. Ed. 2d 653 (1972). In Flower, the Court held that a public forum was created on a major traffic artery that passed through Fort Sam Houston because the military had abandoned any right to exclude civilian traffic. Id. at 198, 92 S.Ct. at 1843. The case is inapplicable. In Flower, there was no guard at either entrance or anywhere along the road, and traffic flowed freely twenty-four hours a day. The road was, in essence, a completely open street, id., not a long, frequently patrolled, entrance way to an atomic test site. 21 Flower also must be read in light of its interpretation by the Supreme Court in Greer v. Spock, 424 U.S. at 835-38, 96 S.Ct. at 1216-17. The Court in Greer, id. at 830-38, 96 S.Ct. at 1213-17, held that freely permitting civilians to visit unrestricted areas of a military base did not convert the base into a public forum. The Court distinguished Flower on the ground that the roadway through the military base in Flower was a public thoroughfare no different from any other public thoroughfare in San Antonio. Id. at 835, 96 S.Ct. at 1216. The Greer Court, reversing the Court of Appeals' holding that the base was a government-created public forum, stated: 22 The Court of Appeals was mistaken, therefore, in thinking that the Flower case is to be understood as announcing a new principle of constitutional law, and mistaken specifically in thinking that Flower stands for the principle that whenever members of the public are permitted freely to visit a place owned or operated by the Government, then that place becomes a 'public forum' for purposes of the First Amendment. Such a principle of constitutional law has never existed, and does not exist now. 23 424 U.S. at 836, 96 S. Ct. at 1216. 24 In the present case, the roadway is not, in any sense, a street open to unrestricted public use. Unauthorized persons are not allowed to remain on the roadway, and the government has not abandoned its right to exclude unauthorized traffic, including that of demonstrators. We find that the NTS property along Mercury Road is neither by tradition nor by designation a public forum. 25 2. Reasonableness of Restrictions and Neutrality as to Viewpoint 26 With respect to a nonpublic forum, the government may enforce restrictions on First Amendment conduct as long as they are neutral with respect to viewpoint and are reasonable. Cornelius, 105 S. Ct. at 3451. Reasonableness "must be assessed in the light of the purpose of the forum and all the surrounding circumstances." Id. at 3453. The restrictions at issue, precipitated as they were by demonstrator abuses and trespasses, meet this test. The obvious safety and national security concerns associated with nuclear testing facilities reinforce the conclusion that the DOE could reasonably limit the time, place, and manner of demonstrating on NTS property. To limit demonstrations to the designated parking and demonstration area is clearly reasonable. 27 One factor bearing on the reasonableness of this place restriction is the existence of alternative channels of communication. Perry, 460 U.S. at 53-54, 96 S.Ct. at 959. The area outside of the cattle guard adjacent to Highway 95 remains open as a public forum for expressive activity. Hale argues that demonstrating in front of the main guard gate is important in conveying the appellants' message. However, "[t]he First Amendment does not demand unrestricted access to a nonpublic forum merely because use of that forum may be the most efficient means of delivering the speaker's message." Cornelius, 105 S. Ct. at 3453. The DOE could have excluded demonstrators from NTS property altogether.5 We find, therefore, that the place restriction on appellants' access to property inside the cattle guard is reasonable and is thus not constitutionally prohibited. 28 The appellants also challenge the time and manner restrictions imposed by the permit system as a form of prior restraint. Because the DOE administrator has unbridled discretion in granting a permit and imposing the restrictions upon its use, appellants argue that the system will not be viewpoint neutral in operation. They point out that the DOE requires permit seekers to state their reasons for demonstrating, and to submit in advance any leaflets that they wish to distribute. 29 It is true that the Supreme Court has in the past invalidated laws that it found granted too much discretion to public officials to decide who would gain access to traditional First Amendment fora such as public streets and parks. See, e.g. Shuttlesworth v. City of Birmingham, 394 U.S. 147, 89 S. Ct. 935, 22 L. Ed. 2d 162 (1969) (invalidating ordinance allowing City Commission to refuse a parade permit if its members believe the public welfare, peace, safety, health, decency, good order, morals or convenience requires that it be refused); Lovell v. City of Griffin, 303 U.S. 444, 58 S. Ct. 666, 82 L. Ed. 2d 949 (1938) (invalidating ordinance forbidding the distribution of literature without the permission of the City Manager). However, it has never applied this kind of analysis to regulations restricting access to government property that was not a public forum. When confronted by an attack on a congressional statute regulating access to postal boxes in United States Postal Service, 453 U.S. at 131, 101 S.Ct. at 2686, the Court stated: "[I]t is a giant leap from the traditional 'soapbox' to the letterbox designated as an authorized depository of the United States mails, and we do not believe the First Amendment requires us to make that leap." 30 We agree that a nuclear test site is not a "soap box." We also readily acknowledge that the DOE regulations are facially neutral. However, we would not concede, and would be reluctant to hold, that the DOE time and manner restraints would encounter no First Amendment obstacles if used in fact to control the content of expression of permittees. See Cornelius, 105 S. Ct. at 3454; Perry, 460 U.S. at 49, 103 S.Ct. at 957; Jaffe v. Alexis, 659 F.2d 1018, 1020 n. 2 (9th Cir.1981). Here there is no claim that the regulations were applied other than in a content-neutral manner. The appellants applied for and received a demonstration permit. There is no allegation that the appellants were treated any differently than any other group seeking a permit. This case, like Greer v. Spock, "simply does not raise any question of unconstitutional application of the regulation to any specific situation." Greer, 424 U.S. at 840, 96 S.Ct. at 1218. We decline to hold that to escape being enjoined the DOE must draft a set of regulations that on their face will bar it from all possible First Amendment infringing actions. We are confident the courts of this circuit can deal effectively with any effort by the DOE to control the content of demonstrator speech through its use of the permit system. 31 D. Irreparable Injury and Balance of Hardships 32 Absent a First Amendment claim, the appellants have failed to establish that irreparable harm will flow from a failure to preliminarily enjoin defendants' actions. Nor does the balance of hardships tip in their favor. The government has adopted reasonable regulations to address the safety and security concerns with the NTS. 33 The appellants' inability to demonstrate freely on NTS property is not a hardship. As already pointed out, they may demonstrate in a designated area adjacent to Mercury Road in full view of any motorist authorized by the government to traverse the roadway. The First Amendment does not guarantee an optimal setting for speech at all times and places. See Adderley v. Florida, 385 U.S. at 47-48, 87 S.Ct. at 247. E. Conclusion 34 The district court did not abuse its discretion in denying the appellants' motion for a preliminary injunction. 35 AFFIRMED. 1 The NTS property appears as follows: 2 The DOE's "Rules Governing the Activities and Conduct of Demonstrators while on the Nevada Test Site" are as follows: 1 A written application for approval to demonstrate on the NTS must be received by the Manager, Nevada Operations Office, not later than 30 days prior to the proposed beginning of the demonstration. At a minimum, the application must include: a. Reason(s) for the demonstration. b. Sponsor(s) and organization(s) to be represented and how they may be contacted. c. Inclusive dates and times proposed. d. Anticipated number of participants. e. Planned activities Additional information may be requested for unique events for which special coordination or preparation may be required. 2 Demonstrations may be held only within the area enclosed by the wooden barricades and roads as indicated on the attached map. Attempts to go beyond this boundary may result in arrest and prosecution for trespass 3 Parking of motor vehicles will be restricted to the area indicated by the attached map. Nevada and Nye County motor vehicle traffic laws apply on the NTS and will be enforced 4 Demonstrations will take place only during the period from sunup to sundown 5 No participant may be under the age of eighteen (18) years 6 Demonstrations may be limited to a specific duration depending on current operational or mission requirements. The manager reserves the right to make this determination on a case by case basis. Normally the duration of the permit is five days 7 The group representative or sponsor(s) of the organization must provide their own water and sanitation units (such as portable toilets). The sponsor(s) are responsible for the removal of such units, the removal of any refuse associated with the demonstration and to [sic] return the demonstration area to its previous state 8 Activities must not in any way obstruct normal routines of the NTS, e.g., traffic flow 9 Handing out of informational leaflets to participants within the confines of the approved demonstration area will be allowed; however, a sample should be forwarded with the application 10 Medical treatment or other support to demonstration participants will be provided on an emergency basis only and recipients may be billed in order to defray expenses incurred 11 Under no circumstances will prohibited articles be allowed within the demonstration area or other Federal property associated with the NTS, e.g., firearms, explosives, or incendiary devices 12 Decisions to arrest and/or prosecute demonstrators for violations of law will be based on applicable Nevada or Federal statutes listed below. Conviction of trespass under Nevada law may result in imprisonment for up to six months and/or a fine of up to $1000. Conviction of violations under cited Federal laws may result in more serious penalties N.R.S. 207.200, Trespass on Land N.R.S. 484.331, Pedestrians on Highways N.R.S. 484.253, Obedience to Police Officers N.R.S. 203.200, Assembling to Disturb the Peace or Commit Unlawful Act Title 18, United States Code Atomic Energy Act of 1954, as amended Internal Security Act of 1950, as amended Other Federal statutes having a relationship to the security of DOE project activities, facilities, or classified information. 3 The age restriction applies to anyone who enters the Nevada Test Site 4 This court, when previously asked to adopt the de novo standard, found it unnecessary to decide the question under the facts of that particular case. See Dollar Rent a Car, Inc. v. Travelers Indem. Co., 774 F.2d 1371, 1374 n. 2 (9th Cir.1985) 5 The Supreme Court has upheld complete bans on speech at government facilities to preserve the property for the use to which it is dedicated. See, e.g., Greer v. Spock, 424 U.S. at 839, 96 S.Ct. at 1218 (military base); Adderley v. Florida, 385 U.S. at 47-48, 87 S.Ct. at 247 (jail)	01-03-2023	08-23-2011
https://www.courtlistener.com/api/rest/v3/opinions/2265659/	200 N.J. Super. 251 (1985) 491 A.2d 49 CENTRAL STEEL DRUM COMPANY, PLAINTIFF-APPELLANT, v. GOLD COOPERAGE, INC., DEFENDANTS-RESPONDENTS. and SHEA & GOULD, DEFENDANT. Superior Court of New Jersey, Appellate Division. Argued February 21, 1985. Decided April 18, 1985. 252 Before Judges MATTHEWS, FURMAN and HAVEY. Stuart G. Brecher argued the cause for appellant (Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone, attorneys; H. Neil Broder, of counsel; Stuart G. Brecher and Neil H. Broder on the brief). Albert Burstein argued the cause for respondent (Rosen, Gelman & Weiss, attorneys; Jack F. Trope on the brief). The opinion of the court was delivered by MATTHEWS, P.J.A.D. Plaintiff appeals from a judgment which permits defendant Gold Cooperage, Inc. to retain $50,000 since plaintiff breached an agreement to purchase defendant's assets. The contract of 253 sale included a liquidated damage clause which provided for the forfeiture of that sum in the event plaintiff failed to complete the purchase. The following was stipulated by the parties: One, Central Steel Drum Company deposited the sum of $50,000 consistent with its obligation and responsibility under section number 2.01(A) of the purchase agreement dated as of December 29, 1981. Two, the attorneys for the seller, Shea and Gould, who were escrow agents under the terms of the purchase agreement dated as of December 29, 1981, released and paid to Gold Cooperage, Inc., the sum of $50,000. Three, the closing date of March 2, 1982, pursuant to section number 3.01 of the purchase agreement dated as of December 29, 1981 was adjourned upon consent to March 9, 1982 and no closing occurred under the terms and conditions of the purchase agreement dated as of December 29, 1981 or under any other agreement or understanding between Gold Cooperage, Inc. and Central Steel Drum Company. Defendant and plaintiff were competitors, although the work performed by the two companies was not the same. Plaintiff reconditioned "open head" drums, which involved the burning or blasting of a drum; defendant reconditioned primarily closed-head drums, infrequently working on open-head drums. During the summer of 1981, plaintiff became interested in purchasing defendant's business. Jeffrey Skuraton, one of plaintiff's owners, began negotiating with defendant on behalf of plaintiff for the purchase. Skuraton did most of the negotiating for plaintiff; Alan Fisher, a partner to Skuraton, also participated. Sol and Milton Gold negotiated for defendant. A contract was prepared under which Skuraton, personally, was the named buyer of defendant's assets since his associates did not wish to continue negotiations. Subsequently, Skuraton's associates decided to acquire defendant's assets through plaintiff. Plaintiff was unrepresented by counsel until an oral understanding was reached with defendant, at which time counsel was retained and continuously represented plaintiff through March 9, 1982. Counsel drew up the agreement. A total purchase price of $650,000 was specified, $600,000 of the purchase price to be commercially financed. Section 2.01(A) of the agreement provided that $50,000, paid upon execution of 254 the purchase agreement, would be held in escrow until closing. Skuraton denied ever discussing the amount of the deposit, specifically denying knowledge of its computation. The $650,000 price had been agreed to during the summer of 1981 and was an arbitrary figure. Skuraton determined the value of defendant's assets by assessing its plant, equipment and approximate business volume. Skuraton inspected the machinery and equipment listed in section 1.01 of the agreement and was satisfied. ... Seller agrees that of the entire purchase price, SIX HUNDRED FORTY-NINE THOUSAND NINE HUNDRED ($649,900.00) DOLLARS is to be allocated to the equipment being purchased and sold hereunder; and that no portion of said price in excess of ONE HUNDRED ($100.00) DOLLARS is being allocated to Seller's name and the accounts of the Seller. Skuraton testified that the allocation of $649,900 to the equipment being purchased was made strictly for tax purposes on counsel's advice. This amount was greater than the actual value of the machinery and equipment. Plaintiff, however, had no intention of using any of defendant's machinery; it was going to try to sell it. Hence, plaintiff viewed this acquisition as a buy out of one competitor, purchasing only its accounts. Section 11 of the agreement provided: If the purchase and sale contemplated by this Agreement is not consummated as hereinbefore set forth in this Agreement for any reason which is not the fault of the Seller or an act of God, then and in such event, the sum of FIFTY THOUSAND ($50,000.00) DOLLARS, which was paid to Shea & Gould, as set forth in Section 2.08, shall be delivered to the Seller as liquidated damages, and neither party shall have any further rights against the other. Section 4.09 recited that for the 11-month period ending November 30, 1981 defendant sold 132,980 reconditioned open-head drums, 95,678 reconditioned closed-head drums, and 28,676 tallow drums. For this period the dollar value of these sales aggregated to no less than $2,886,500. Skuraton testified that section 4.09 had been inserted for plaintiff's benefit in order to determine the impact defendant's departure would have on the business. 255 Under section 12.05 defendant covenanted to conduct its business "in the ordinary course" "pending closing of" the agreement. Skuraton had discussed this provision with both plaintiff's counsel and the Golds. He testified that from the beginning of the negotiations in the summer of 1981 his concern was with defendant maintaining business volume. The Golds assured him they would not let the business slack. Skuraton denied, however, having had any role in inserting section 12.05 in the agreement. Robert Ruben was a New York attorney affiliated with Shea & Gould, defendant's counsel. To the best of his knowledge section 12.05 had been contained in the original draft of the agreement and had never been changed. He had never discussed it with counsel for plaintiff or objected to its presence. Ruben believed that the Golds understood that they were to continue to operate their business in the same fashion as it had always been operating. The contract was signed sometime in January 1982. At that time Skuraton made demand for a representation that defendant's volume of sales would continue until the closing date. The Golds told him that they would continue to operate their business in the ordinary course, seeing new customers and maintaining old ones. Skuraton conceded that the contract did not require defendant to guarantee a level of business at closing; he claimed, however, that he understood "ordinary course" as meaning that defendant would continue servicing existing accounts and would also actively seek new business. Milton Gold said that he understood the phrase "ordinary course of business" as meaning that defendant would continue to do business as it had done over the preceding 50 years. Defendant was to continue selling and buying drums, soliciting customers and dealers and keeping abreast of what its competitors were doing pricewise. Sol Gold's understanding was in accord with this. 256 After plaintiff's agreement to purchase defendant was announced, some of defendant's dealers left it. Sol Gold speculated that customers left because they wanted to be sure they had a place to have their work done after the sale was closed. He stated that defendant infrequently picked up new customers; the nature of the business was "continual repeat." Usually, negotiations were conducted at the end of the year for blanket orders covering six months to a year of the customer's needs. Milton Gold estimated that in 1981 defendant had approximately 76 customers, and that between January 1 and March 1, 1982 it had 60 active customers. Throughout 1981 orders for reconditioned drums had dwindled, and there was a reduction in defendant's business of approximately 30 to 35 percent from December 1981 to March 1982. While the economy had declined tremendously from the preceding year, defendant determined that it had done well compared to many competitors since its major competitor had suffered a 50 percent reduction. Milton Gold also testified that December was historically a bad month. Defendant closed down for two weeks in December for a union vacation period. Despite this, defendant had solicited new customers in December 1981 and January and February 1982. Although the agreement set closing for March 2, 1982, at the offices of counsel for plaintiff in Newark, the closing was not held then. Instead, the parties appeared for closing on March 9 at the National State Bank in Elizabeth which was prepared to finance the sale. Skuraton was present on behalf of plaintiff. He had requested that defendant bring to the closing dollar amounts and units for December 1981 and January and February 1982 because he wanted to make sure that defendant's business "was still there." Comparing figures for that period and the preceding three-month period, Skuraton found that defendant's business had dropped between 40 and 50 percent. 257 He decided that he wanted to talk with his partners before closing "because the deal had changed dramatically." Skuraton determined to not close because of the drop in defendant's business, but he did not inform the Golds why he would not close. Milton Gold testified that Skuraton said the bank would not lend plaintiff the money because of defendant's sales figures. Approximately a week after the deal failed to close the $50,000 on deposit was released to defendant. Between December 1, 1981 and March 2, 1982 the drum industry had experienced a decline due to economic conditions. Plaintiff's own sales had dropped four or five percent. Between December 1981 and the time fixed for closing defendant's staff was substantially unchanged; only two or three plant workers were laid off. Defendant closed its plant on March 1 and by March 19, 1982 had released 41 people. It had arranged to have its work performed at Bayonne Barrel, previously, one of its competitors. Nine months to a year later, defendant's plant on South Street in Newark reopened as Kearney Drum. It eventually sold off its assets. Open-head drums were sold to Kearney Steel and Drum for $300,000, and the equipment for bunk-type drums was sold for approximately $56,000. Sol Gold was unable to estimate what plaintiff's failure to complete the sale had cost defendant. Milton Gold speculated that if the contract had not been aborted defendant could probably have gotten back much of its business lost after plaintiff's purchase was announced. He estimated that plaintiff's failure to consummate the agreement cost defendant $200,000 to $250,000. In his oral opinion, the trial judge first found that during the four months prior to execution of the contract defendant's sales showed a gradual decline in volume and that it was entirely credible that once the announcement of the sale had been made the downturn became more dramatic. He found that between the contract signing and the time set for closing sales volume 258 increased some $40,000. This refuted plaintiff's contention that defendant had failed to continue to operate its business in the ordinary course. The judge therefore found that plaintiff had not borne its burden of establishing that defendant's acts entitled plaintiff to refuse to close. With regard to the enforceability of the liquidated damage clause the court held: In the instant case the parties did, in fact, negotiate through attorneys at arms length [sic] a liquidated damage clause. Given the fact that a substantial portion of the value of the property being conveyed by good will [sic] of the defendant corporation, its name and its customer list, the difficulty of establishing damages by admissible evidence in reference to those items is readily seen. I can only conclude that the liquidated damage clause was a proper and reasonable result of good faith negotiation, not only to establish the damages of the defendant in the event of the breach but was also to limit the liability of the plaintiff. I would also conclude that the reason for the failure to close is because the sellers I mean the purchasers had a change of heart. Relying upon, among other arguments, this court's decision in Utica Mut. Ins. Co. v. DiDonato, 187 N.J. Super. 30 (App. Div. 1982), plaintiff maintains that a liquidated damage clause is presumptively invalid as a penalty. To overcome that presumption the party advocating the clause must show that (1) it is a reasonable forecast of the harm caused by a breach and (2) the harm is incapable or difficult of accurate estimation. Plaintiff acknowledges that courts have split in determining which party has the burden of proof with regard to the enforceability of such clauses, but argues that defendant should have the burden because it had access to evidence about whether it was difficult to estimate damages and whether the forecast was reasonable. Plaintiff argues that defendant failed to meet this burden of proof since there was no evidence that the $50,000 sum represented a good-faith effort to estimate the actual damages that would ensue from a breach. Further, the court was without evidentiary basis to find that it was difficult to establish damages. Plaintiff says that there was no evidence at all showing that defendant had sustained any loss as a result of plaintiff's failure to close. 259 Defendant argues that a party is not required to prove "with mathematical precision" its damages in order to invoke a liquidated damage clause. It says that there is sufficient credible evidence in the record to uphold the trial judge's decision. To require direct evidence that "an inventory of potential damages was developed prior to execution of the agreement" would create an unprecedented standard of proof in this type of case. Here an inference can be made that the clause was a reasonable attempt to estimate damages; it was a voluntary, arm's-length commercial transaction between parties of equal bargaining power. Defendant agrees with the judge's finding that the nature of some of the items included in the purchase agreement goodwill in the form of the company name and customer lists made calculation of damages inherently difficult. Defendant also argues that plaintiff's contention that this type of clause should be construed as a penalty is contrary "to the modern enlightened trend concerning this doctrine." It argues that courts have moved away from the belief that liquidated damage clause are presumptively invalid as penalties toward enforcing the clauses unless they are unreasonable, unconscionable or the product of grossly unequal bargaining power. It is defendant's position that the burden of proof should be placed upon the party attempting to avoid enforcement of the clause. There are not many decisions in this State which deal in depth with liquidated damage clauses. Only Utica, supra, 187 N.J. Super. 30, which we discuss hereafter, specifically addresses, albeit briefly, the burden of proof issue. Plaintiff's attorney drafted the contract which provided that $50,000 would be plaintiff's deposit and which stipulated that that sum would be lost in the event plaintiff failed to close. At trial plaintiff took the position that the sum was arbitrary and not the result of any attempt to forecast damages. Generally, a liquidated damage clause is enforceable in New Jersey where actual damages which would be sustained 260 upon a breach are difficult to project and are not readily susceptible of proof under the rules of evidence. The agreed-upon sum must not, however, be disproportionate to the presumable loss. See Summit v. Morris Traction Co., 85 N.J.L. 193, 195 (E. & A. 1913). Accord Suburban Gas Co. v. Mollica, 131 N.J.L. 61, 63 (Sup.Ct. 1943). In Suburban Gas plaintiff was a distributor of bottled gas. Defendant had agreed to purchase from plaintiff all the gas that defendant required for a period of three years. A minimum monthly charge of $1.15 was set. A clause in the contract set damages at $2.00 per month for all unexpired months of the agreement, the agreement saying that the loss which would arise from breach would be difficult to determine. Plaintiff sued for breach and recovered liquidated damages. On appeal defendant argued that the court should have awarded nominal damages only since plaintiff had failed to prove actual damages and that the trial court should have construed the clause as a penalty. The appellate court upheld the trial judge, finding that plaintiff had been unwilling to assume the expense of installing pipes and other equipment on defendant's premises without the security of a contract for exclusive sales for a reasonable period and without a formula for fixing damages in the event of breach. 131 N.J.L. at 63. Further, the amount specified as liquidated damages was not exhorbitant, excessive or unconscionable considering the nature of the contract, the monthly minimum charge, and the proofs as to the quantity of gas sold during the life of the contract. A liquidated damage clause was upheld in D.H.M. Industries v. Central Port Warehouse, 127 N.J. Super. 499 (App.Div. 1973), aff'd o.b. 64 N.J. 548 (1974). There, pursuant to contract, plaintiff erected a 500,000 square foot warehouse which was to be leased to defendant for a 20-year term at $43,750 per month, for a total rental of $10,500,000. Plaintiff sued defendant for 261 anticipatory breach when defendant refused to take possession and recovered $126,525, the stipulated liquidated damage sum. In affirming, this court observed that the modern tendency was to look favorably upon agreements to fix specified amounts as damages in the event of a breach and to prefer to consider them as liquidated damage clauses rather than penalties. 127 N.J. Super. at 503. We found the clause an honest attempt to fix just compensation for losses which would be incurred upon a breach because (1) the contract involved a 20-year lease of a specially-constructed building with a gross rental of $10,500,000, (2) the security posted represented about one percent of the gross rental, (3) if the breach occurred the ability to obtain another suitable tenant for the building within a short time at a comparable rental rate and term was questionable, the expenses necessary to find a new tenant would be difficult to estimate and (4) plaintiff's actual damages were not disproportionate to the security posted. 127 N.J. Super. at 504. In another context, clauses limiting contractual liability have been upheld. See Abel Holding Co. v. American Dist. Telegraph Co., 138 N.J. Super. 137, 160 (Law Div. 1975), aff'd 147 N.J. Super. 263 (App.Div. 1977) (clause limiting contractual liability to 10 percent of an annual service charge enforceable since it did not violate the public interest and was not unconscionable because the parties had been in equal bargaining position); see also Foont-Freedenfeld v. Electro-Protective, 126 N.J. Super. 254, 258 (App.Div. 1973), aff'd o.b. 64 N.J. 197 (1974) (clause limiting defendant's liability to 10 percent of annual service charge was upheld on the finding that the parties had been in equal bargaining positions and plaintiff had voluntarily entered into the contract with full knowledge of the clause and its effect). Where, however, one party to a transaction is a consumer, the courts have taken a more protective stance. Thus, in Westmount Country Club v. Kameny, 82 N.J. Super. 200, 206 (App.Div. 1964), where doubt existed about whether the provision 262 in an application for a club membership saying that there would be no reduction or apportionment of annual membership fees if the member withdrew during the membership year was a liquidated damage clause, the provision would be constructed as a penalty. In Spialter v. Testa, 162 N.J. Super. 421 (Cty.Ct. 1978), aff'd o.b. 171 N.J. Super. 181 (App.Div. 1979), certif. den. 82 N.J. 300 (1980), the court found that a lease covenant violated defendants' common law contract rights since it amounted to a penalty. There, the residential lease called for a variable percentage payment to the landlord in the event of the tenant's early unilateral termination. In the real estate sales context courts have upheld the retention of deposit monies by the seller where the buyer has breached. In Oliver v. Lawson, 92 N.J. Super. 331 (App.Div. 1966), certif. den. 48 N.J. 574 (1967), plaintiffs individual and corporation breached a contract to buy land for $215,000. On appeal from the trial court's refusal to award the return of a $20,000 deposit, plaintiffs argued that defendants' retention of the sum would amount to a forfeiture. They also argued that defendants had been unjustly enriched since they made a new contract to sell the property at substantially the same price. This court observed that the contract did not contain a forfeiture provision, citing as established law that where a buyer defaults he may not recover his deposit irrespective of the seller's actual damages and regardless of whether the contract contains a forfeiture provision. 92 N.J. Super. at 333-334. While one measure of damages for a buyer's breach of contract to purchase real property may be the difference between the contract price and the fair market value at the time of the breach, the seller was not bound to this remedy. 92 N.J. Super. at 335-336. See also Centex Homes Corp. v. Boag, 128 N.J. Super. 385, 394 (Ch.Div. 1974), where the court enforced a clause which limited the sellers of an apartment unit to the sum that buyers had paid before breach of the agreement. 263 More recently, in Ruane Development Corp. v. Cullere, 134 N.J. Super. 245 (App.Div. 1975), we upheld seller's retention of a $17,000 deposit on a $175,000 contract to sell undeveloped property where defendant-purchaser refused to consummate the deal. Both parties here cite Utica, supra, 187 N.J. Super. 30. There defendant State of New Jersey had entered into contract with Colino Electrical Contractors under which Colino agreed to perform certain electrical work on a construction project. Utica was surety on Colino's performance and completion bond. Colino defaulted on the contract and Utica was compelled to complete performance. Utica sued the State, asserting that agents and employees of the State had intentionally and in bad faith disbursed payments to Colino for work that was not completed and that, despite notice of business improprieties and defaults of Colino, had not only failed to notify Utica but also reduced the retainages on Colino's payments. The State denied liability and asserted a counterclaim seeking liquidated damages for Utica's failure to complete the contract within the time allowed. The trial judge dismissed plaintiff's complaint and awarded the State liquidated damages on the counterclaim. The Colino contract had provided that in the event it failed to complete its work within the time stated in its proposal the contractor would be liable to the State for $25 per day or one-twentieth of one percent of the total consideration for one day, until the work was completed. This court noted that the trial judge had made no finding of whether a portion of the delay was the fault of the State or another contractor. 187 N.J. Super. at 41. The State had made no attempt to prove its entitlement to liquidated damages other than to rely on a claimed late completion date. The trial judge had found that plaintiff had offered no proof on the counterclaim but simply alleged that the delays had been caused by the State. We commented: 264 We assume this refers to a failure on the part of Utica to produce proof on that issue. This suggests that the trial judge assumed the burden of proof was on Utica to prove that the State caused or contributed to the delays in order to avoid the imposition of liquidated damages. We disagree that that is so, both as a general rule and under the facts of this case. In General Ins. Co. of America v. Commerce Hyatt House, 5 Cal. App.3d 460, 85 Cal. Rptr. 317 (D.Ct.App. 1970), the general rule was stated to be as follows: It is well established that where the owners seek liquidated damages pursuant to the provisions of a contract, they must show that they have strictly complied with all requisites to the enforcement of that contractual provision. An owner whose acts have contributed substantially to the delayed performance of a construction contract may not recover liquidated damages on the basis of such delay. "Liquidated damages are a penalty not favored in equity and should be enforced only after he who seeks to enforce them has shown that he has strictly complied with the contractual requisite to such enforcement [citations]." (Aetna Cas., etc., Co. v. Bd. of Trustees, 223 Cal. App.2d 337, 340, 35 Cal. Rptr. 765, 767.) "The correct rule is that where such delays are occasioned by the mutual fault of the parties the court will not attempt to apportion them but will refuse to enforce the provision for liquidated damages." See also Kent v. United States, 343 F.2d 349, 351 (2 Cir.1965); Wunderlich Contracting Co. v. United States, 351 F.2d 956, 968, 173 Ct.Cl. 180 (1965). We are not aware of any New Jersey cases that have discussed this precise issue, but we are satisfied these out-of state cases properly place the burden of proof upon the one seeking damages. [187 N.J. Super. at 42 (emphasis supplied)] We found that we were unable to ascertain from the record or from the trial judge's opinion what standard the court had applied in determining liability for and assessing the amount of liquidated damages. We concluded, however, that "given the specific contract language involved here, the burden in the first instance is on the State to prove a valid liquidated damage clause and its entitlement to recover damages which are reasonable, considering the magnitude of the harm caused to the State." 187 N.J. Super. at 42-43 (emphasis supplied). Similarly in Wassenaar v. Panos, 111 Wis.2d 518, 331 N.W.2d 357 (1983), the Wisconsin Supreme Court in a scholarly opinion discussing the competing philosophies generated by such clauses wrote: Enforcement of stipulated damages clauses is urged because the clauses serve several purposes. The clauses allow the parties to control their exposure to risk by setting the payment for breach in advance. They avoid the uncertainty, 265 delay, and expense of using the judicial process to determine actual damages. They allow the parties to fashion a remedy consistent with economic efficiency in a competitive market, and they enable the parties to correct what the parties perceive to be inadequate judicial remedies by agreeing upon a formula which may include damage elements too uncertain or remote to be recovered under rules of damages applied by the courts. In addition to these policies specifically relating to stipulated damages clauses, the considerations of judicial economy and freedom of contract favor enforcement of stipulated damages clauses. A competing set of policies disfavors stipulated damages clauses, and thus courts have not been willing to enforce stipulated damages clauses blindly without carefully scrutinizing them. Public law, not private law, ordinarily defines the remedies of the parties. Stipulated damages are an exception to this rule. Stipulated damages allow private parties to perform the judicial function of providing the remedy in breach of contract cases, namely, compensation of the nonbreaching party, and courts must ensure that the private remedy does not stray too far from the legal principle of allowing compensatory damages. Stipulated damages substantially in excess of injury may justify an inference of unfairness in bargaining or an objectionable in terrorem agreement to deter a party from breaching the contract, to secure performance, and punish the breaching party if the deterrent is ineffective. [331 N.W.2d 361-362] The court held that where an employer sought to set aside a bargained-for stipulation of damages in an employment contract it was his burden to prove facts to justify nonenforcement of the clause: Placing the burden of proof on the challenger is consistent with giving the nonbreaching party the advantage inherent in stipulated damages clauses of eliminating the need to prove damages, and with the general principle that the law assumes that bargains are enforceable and that the party asking the court to intervene to invalidate a bargain should demonstrate the justice of his or her position. [331 N.W.2d at 361; footnote omitted] We conclude that in the context of commercial parties having comparable bargaining power, there should be presumptive validity of a liquidated damage clause. Such an approach is more consistent with judicial noninterference in private contractual matters where there is not significant disparity in economic advantage. We agree with the trial judge that the record here supports a finding of arm's-length agreement. Plaintiff's attorney drafted the contract and plaintiff agreed to risk loss of $50,000. The parties were in closely related businesses. Plaintiff *266 sought the benefit from the elimination of a competitor. It might have expected that if it failed to complete its purchase, defendant would be severely affected. In fact, according to the Golds' testimony defendant lost customers after the sale was announced. Not to enforce the clause and place the burden of showing actual damage would, in our judgment, give plaintiff a better contract than it made. This approach is not at variance with our decisions involving commercial parties. It certainly is not at variance with our holding in Utica, which dealt primarily with entitlement to invoke the liquidated damage clause. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265666/	341 Pa. Super. 305 (1985) 491 A.2d 276 COMMONWEALTH of Pennsylvania v. John FIORE, Appellant. Supreme Court of Pennsylvania. Argued November 7, 1984. Filed April 12, 1985. 306 C. Grainger Bowman, Harrisburg, for appellant. Paul M. Yatron, Harrisburg, for Commonwealth, appellee. Before WICKERSHAM, DEL SOLE and POPOVICH, JJ. POPOVICH, Judge: This is an appeal from an order vacating judgment of sentence and directing the State of Delaware to remand appellant, John Fiore, to the Commonwealth of Pennsylvania to serve sentence. We reverse. After pleading guilty to 24 counts of non-compliance with various tax statutes (see 72 P.S. §§ 2614.21(a), 7268(b)), appellant was sentenced to 11 1/2 to 23 months imprisonment 307 and 8 years probation, which was to be served at the completion of the term of imprisonment. Also, appellant was ordered to pay the cost of prosecution and $100 to the Commonwealth. A timely motion to modify sentence was filed seeking the Dauphin County court's approval to have appellant serve his Pennsylvania sentence (ordered to commence on December 26, 1983) in the State of Delaware upon his sentence in that State for similar tax violations. Thereafter, under the mantle of 42 Pa.C.S.A. § 9761(b), appellant filed a motion substantiating his request that service of his Delaware sentence (a period of incarceration up to 23 months to commence also on December 26, 1983) either satisfy or be credited against his Pennsylvania sentence. By order dated December 14, 1983, the Dauphin County court directed that appellant "be given full credit for time served by him under the sentence imposed by the Superior Court of Delaware (New Castle County) in the action known as State of Delaware v. John Fiore and Zurich Corp., Cr. A. Nos. N-82-10-1732 through N-82-10-1787." On February 9, 1984, a rule to show cause was issued upon appellant by the Commonwealth, and contained therein were the following relevant averments: 3. Defendant commenced his prison sentence in the State of Delaware on December 26, 1983, which was the same day set for commencement of his sentence in Pennsylvania. 4. On or about January 4, 1984, defendant was released by correctional authorities to the State of Delaware and permitted by them to serve his sentence in what is known in Delaware as "supervised custody". 5. "Supervised custody", as that program is known in the State of Delaware, is in all respects identical to a sentence of probation in the Commonwealth of Pennsylvania or the release on parole in the Commonwealth of Pennsylvania. 6. Neither the Office of Attorney General of the Commonwealth of Pennsylvania, Dauphin County Adult Probation 308 Office nor Your Honorable Court were consulted or notified by authorities in the State of Delaware prior to defendant's release on supervised custody. 7. On or about January 30, 1984, the Commonwealth first learned of defendant's release from prison in the State of Delaware. 8. The law of the Commonwealth of Pennsylvania and the Order of this Honorable Court dated December 14, 1983, requires that defendant be returned to the Commonwealth of Pennsylvania to serve the remainder of his term of imprisonment as imposed by this Court, with credit for ten days served in prison in the State of Delaware. 9. The defendant's release on probation or parole in the State of Delaware is entirely contrary to the understanding of the parties when the plea was entered . . . and when sentence was imposed pursuant to that plea. 10. The defendant is entitled to no credit towards his Pennsylvania sentence for time in which he was not actually incarcerated in the State of Delaware. WHEREFORE, the Commonwealth pray[ed the] Honorable Court enter an Order declaring defendant released from custody in the State of Delaware and remanding him to the Commonwealth of Pennsylvania to serve the remaining portion of the sentence imposed by [the] Honorable Court. . . . Respectfully submitted, LeROY S. ZIMMERMAN ATTORNEY GENERAL A rule to show cause hearing was held February 21. At that proceeding, counsel for appellant noted at the outset that his client was at work in Wilmington, Delaware under an authorized program conducted by the Delaware Department of Corrections. Further, counsel pointed out that appellant was classified "as an inmate in the inmate population under the Delaware Department of Corrections," and, therefore, to be present at the show cause hearing would 309 have placed him in violation of the Delaware Department of Corrections' restrictions as to his movements. We observe that in appellant's answer to the rule to show cause, paragraph 8, he denied being "released" from the custody of the Delaware authorities. Rather, he stated he "remain[ed] within the inmate population of the Delaware Department of Corrections". Also, in paragraph 4, appellant admitted "that, as of January 20, 1984, [his] inmate classification by the Delaware Department of Corrections permit[ted] certain supervised custody conditions to attach to [his] service of sentence." It was the court's opinion that the sentence issued in Delaware, aside from being contrary to its normal concepts of punishment, was "just not the type of confinement which was contemplated in connection with the offense in the State of Pennsylvania." Counsel for the Commonwealth agreed and added that he had opposed, consistently, a work release program for appellant. After hearing argument on the jurisdiction to decide the rule to show cause, the court entered an order making the rule absolute and directing Delaware to remand appellant to Pennsylvania to serve the remaining portion of the sentence initially imposed. Further, the court vacated the December 14, 1983 order giving appellant credit for time served in Delaware. This appeal followed. We find that the dispositive issue at bar concerns the authority of the court below to vacate (or to act in any capacity in regard to) the initial sentence entered. Absent any such authority, the action of the court below is a nullity. We commence our discussion with the observation that the courts of this Commonwealth, at common law, had the power to vacate a judgment of sentence and to impose a new sentence, even if more severe, so long as such action took place within the same term of court as did the original sentence. Commonwealth v. Colding, 482 Pa. 112, 393 A.2d 404 (1978). Presently, this power is codified in section 5505, 42 Pa.C.S.A., which reads: 310 Except as otherwise provided or prescribed by law, a court upon notice to the parties may modify or rescind any order within 30 days after its entry, notwithstanding the prior termination of any term of court, if no appeal from such order has been taken or allowed. The Act of July 9, 1976, P.L. 586, No. 142, § 2, effective June 27, 1978. The caveat contained in section 5505, in respect to the power of a court to "modify or rescind" any order, was articulated over eight decades ago by the United States Supreme Court in Gagnon v. United States, 193 U.S. 451, 456, 24 S. Ct. 510, 511, 48 L. Ed. 745 (1904); namely: The power to amend its records, to correct mistakes of the clerk or other officer of the court, inadvertencies of counsel, or supply defects or omissions in the record, even after the lapse of the term, is inherent in courts of justice. Accord Commonwealth v. Cole, 437 Pa. 288, 263 A.2d 339 (1970). We add to this list of exceptions, allowing a modification (decrease or increase) in the punishment initially imposed, the provision sanctioning such a change where the "punishment was procured by appellant by such fraud as would make a complete nullity of the[for example, prior sentencing] proceedings." Commonwealth v. Coleman, 271 Pa.Super. 581, 585-586, 414 A.2d 635, 637-38 (1979). We find the reason to be self-evident. It certainly would not serve the ends of justice, not to mention the affront to the court itself, to allow an accused to secure a more lenient sentence than would have been issued had it not been for the use of misinformation intended to keep from the sentencing agent information impacting on the type and length of punishment to be meted out. Herein, on December 14, 1983, the day appellant was sentenced, the court below indicated that appellant was to be given credit for the time served by him "under the sentence imposed by the Superior Court of Delaware". While it may be true, as the court below recites in its 311 opinion to us, that "the status of this defendant in the State of Delaware was contrary to the understanding of the parties when the plea was entered . . . and was indeed contrary to the understanding of this Court when the sentence was imposed pursuant to the plea", "the sentence, as recorded, indicates the imposition of no other conditions, or that it was `tentative' in any sense, except for the condition before noted, and we are bound by the record." Commonwealth v. Silverman, 442 Pa. 211, 218, 275 A.2d 308, 312 (1971), cert. denied, 405 U.S. 1064, 92 S. Ct. 1490, 31 L. Ed. 2d 794 (1972). To the extent that the court below and the Commonwealth argue that the work release program/probation was not the type of (or equivalent to the) sentence contemplated by the parties, we wish to respond that in Pennsylvania the Sentencing Code makes it clear that a term of "probation" is a sentence. The Act of December 30, 1974, P.L. 1052, No. 345, § 1, as amended, 42 Pa.C.S.A. § 9721(a)(1). Accord Commonwealth v. Johnson, 250 Pa.Super. 431, 434 n. 3, 378 A.2d 1013, 1018 n. 3 (1977) (Dealing with The Act of December 6, 1972, P.L. 1482, No. 334, § 1301, which now appears in modified form at 42 Pa.C.S.A. § 9721). Albeit the Delaware work release program, under which appellant became eligible to work at his original place of employment during the day with a return to his approved residence thereafter,[1] may not comport with the lower court's "normal concepts of punishment", nonetheless, the 312 program of probation does constitute punishment since it is unquestionably a restriction on appellant's freedom and a deprivation of his liberty within the meaning of the Fourteenth Amendment. Commonwealth v. Vivian, 426 Pa. 192, 231 A.2d 301 (1967). Accordingly, since the court below placed no other conditions on appellant's Pennsylvania sentence other than 313 it be served concurrently with the Delaware sentence, and since there is no proof that the sentence was procured by the perpetration of a fraud upon the court, the fact that the vacation of sentence was made neither within the term of the original sentence nor within 30 days thereafter, the vacation of sentence clearly was invalid. Compare Commonwealth v. Coleman, supra; Commonwealth v. Gallagher, 200 Pa.Super. 136, 186 A.2d 842 (1962). Of necessity, the aforesaid renders ineffectual the court's further order directing the return of appellant by Delaware penal authorities prior to his completion of his sentence in that jurisdiction. Cf. Commonwealth v. Liscinsky, 195 Pa.Super. 183, 186, 171 A.2d 560, 561 (1961) (". . . in the interest of orderly administration of justice, [the second sovereign should] . . . postpone exercise of its jurisdiction by not taking the defendant into custody until the first sovereign has exhausted its remedy against him."). The order is reversed, and the December 14, 1983 order directing that appellant be given full credit for the time served by him under the sentence imposed by the Superior Court of Delaware is reinstated. Jurisdiction is relinquished. NOTES [1] In the record appears a letter dated February 6, 1984 from counsel for appellant to the court below outlining the work release program. It reads in relevant part: On January 5, 1984 Mr. Fiore was transferred to Plummer Center from Gander Hill Correctional Facility, a classification facility and prison also operated by the Delaware Department of Corrections. His classification for service of sentence at Plummer Center was made in the ordinary course. As of January 20, his classification permits certain work release/supervised custody conditions to attach to his service of sentence. Mr. Fiore has not been paroled and remains a member of the inmate population of the Plummer Center. At Plummer Center, Mr. Fiore has been placed on work release/supervised custody status with the complete knowledge and approval of the Delaware Department of Justice (See letter of Christopher J. Curtin, Deputy Attorney General, dated December 28, 1983, copy enclosed). The purpose of work release/supervised custody is to allow Mr. Fiore's business operations to be undertaken while Mr. Fiore remains in custody. The substantial restitution to which Mr. Fiore committed himself in Delaware and in Pennsylvania would not otherwise be viable. The State of Delaware has acknowledged this reality after an extensive investigation into Mr. Fiore's background, work habits, circumstances, and finances. The conditions of Mr. Fiore's work release/supervised custody at Plummer House are as follows: 1. Mr. Fiore must report, in person, for an in-depth interview two to three times every week, regarding his living conditions, working conditions, etc., which interview is held at Plummer Center. 2. Mr. Fiore is required to live in Delaware and cannot leave the State. 3. Mr. Fiore must be in one hour's telephone reach of the Delaware Department of Corrections at all times. 4. Mr. Fiore must be in residence from 11:00 p.m. to 7:00 a.m. every evening. 5. Mr. Fiore has a Host (in this case his wife, Barbara). It is required that the Host be a blood relative living in the State of Delaware. This has forced Barbara Fiore to move from New York City (the site of her job) to Wilmington, and she must now commute to New York City to her job. 6. Mr. Fiore's residence must be approved by the Delaware Department of Corrections, and his approved residence is an apartment at his place of employment which has been built by Fiore's employer specifically for Mr. Fiore and his family. 7. Mr. Fiore is not permitted to drink any kind of alcoholic beverages, either in public or at home. He cannot enter any establishment that serves liquor. 8. Until last week, Mr. Fiore was not permitted to drive a motor vehicle. As of this date, he is permitted to drive, but only to work or for work related purposes. 9. Mr. Fiore is subject 24 hours a day to be called in for chemical and urine tests, and accordingly, he is not permitted to take any medication of any kind without prior authorization. 10. Mr. Fiore must maintain a job to stay in the work release/supervised custody program, and Mr. Fiore's employer is interviewed by phone every week regarding his job progress. 11. Mr. Fiore must pay weekly toward his fines and restitution depending upon his salary.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265675/	200 N.J. Super. 201 (1985) 491 A.2d 23 JOHN ROONEY, PLAINTIFF, v. TOWNSHIP OF WEST ORANGE, DEFENDANT-APPELLANT, AND WEST ORANGE BOARD OF EDUCATION, DEFENDANT-RESPONDENT, AND WILLIAM CECERE, DEFENDANT. Superior Court of New Jersey, Appellate Division. Argued March 26, 1985. Decided April 10, 1985. 203 Before Judges PRESSLER, BRODY and COHEN. Hal D. Pugach argued the cause for appellant (Paul Seligman, attorney; Paul T. von Nessi, of counsel and on the brief). Richard J. Hill argued the cause for respondent (Morgan, Melhuish, Monaghan, Arvidson, Abrutyn & Lisowski, attorneys; Michael J. Frank, on the brief). The opinion of the court was delivered by PRESSLER, P.J.A.D. Defendants Township of West Orange (Township) and its employee William Cecere appeal from an order dismissing their claim for the provision of a defense and indemnification by codefendant West Orange Board of Education (Board). The issue before us involves the right of an excess insurer to reimbursement of its legal expenses where it has defended its insured even though the recovery sought against the insured was within the coverage of the primary insurer. The underlying litigation arose out of an accident which took place when a school bus owned by the Board struck a parked vehicle owned by plaintiff John Rooney. It is not disputed that at the time of the accident the bus had been lent by the Board 204 to the Township for Township business. The driver of the bus, Cecere, who had parked it on a hill, was standing outside the bus, presumably awaiting his passengers. The empty bus began to roll down the hill and struck several cars, one of which was plaintiff's. Plaintiff instituted this action in July 1982 against Cecere, the Township, and the Board, seeking to recover $3,000 for his property damage. Cecere and the Township were provided with a defense by the Township's liability carrier. Their answer included several cross-claims against the Board, none of which raised the issue here presented. The matter proceeded unexceptionally for about a year. In July 1983 plaintiff moved for summary judgment against all defendants. The Township responded by a cross-motion against the Board seeking an order requiring the Board to assume its defense. The certification of the Township's attorney, filed in support of this request for relief, stated simply that the Board was a self-insurer obligated to provide omnibus coverage and hence that it, the Township, was the Board's insured, entitled to both a defense and indemnification. In response to plaintiff's motion, the Board conceded that it was not opposing plaintiff's motion for summary judgment in respect of the liability issue, but was only contesting damages since the car had been stolen after it was struck by the bus and the Board believed that some portion of the damage might have been caused by the thief. In response to the Township's cross-motion, the Board admitted that the Township and its employee were its insureds under the omnibus coverage it was obliged to afford as a self-insurer. It also admitted that its coverage was primary. It resisted the motion solely on the ground that the Township's own insurer was also obliged to defend as indeed it was doing. The Board, moreover, stipulated that if there were a judgment against the Township or Cecere or both, it would be obliged to contribute equally with the Township's carrier to the payment thereof. There is thus no question that as of this point in the litigation, the Board, as self-insurer, had assumed that the Township's coverage was 205 also primary, and there is nothing in this record to suggest that as of that time it had any reason to believe otherwise. If it had been correct in this understanding, its legal position would have been correct as well since each primary insurer is obliged to afford a defense and both must contribute to the satisfaction of the insured's indemnification rights. See Child's v. New Jersey Manufacturers Insurance Company, 199 N.J. Super. 441 (App. Div. 1985). In any event, the Township's motion for a defense and indemnification was denied after it appeared at oral argument that none of the parties could represent to the court the terms of the applicable provisions of the Township's policy. In November 1983, the Township again moved for a summary judgment requiring the Board to indemnify and defend it. This time it supported the motion with a certification asserting, for the first time, that its insurance afforded only excess coverage on this risk. The Township was apparently correct in this belated discovery since its policy provides that the coverage would be excess only in respect of non-owned automobiles. The Township's contention, therefore, was that since the risk exposure was unequivocally within the Board's primary coverage, it, the Township, did not have a contractual right to either a defense or indemnity from its own insurer. The trial judge, however, denied the Township's renewed motion on the theory that some fact might emerge at trial which would demonstrate that Cecere had committed a willful tort not covered by the Board's omnibus obligation and hence that the Township's coverage might be sole and primary. Several months later, in February 1984, the Board settled plaintiff's claim for $700, and the action was dismissed as to all parties. At the outset it is clear that the trial judge's hypothesis of the existence of a possible state of facts which might relieve the Board of its coverage obligations in respect of the Township's employee was a speculation hardly constituting the genuine dispute of material fact which will defeat a summary judgment motion. R. 4:46-2. After all, the Board had already conceded both its liability to plaintiff and its coverage of Cecere 206 and the Township. The issue was plain, simple and ripe for decision. It should have been decided on its merits. With respect to the merits, the Township's claim for indemnification is moot since the Board has paid the full settlement. We need address, therefore, only its claim that it was entitled to a defense. Obviously the Township's claim is really the subrogation claim of its carrier, who seeks reimbursement for having provided its insured the defense which, it alleges, the primary carrier should have provided. As a matter of law, a carrier is bound by its covenant to defend whenever the complaint against its insured "alleges a basis of liability within the covenant to pay." Burd v. Sussex Mutual Insurance Company, 56 N.J. 383, 388 (1970). We are satisfied that the excess carrier's covenant to defend was not invoked by the complaint filed against its insured here because it presented no possibility of an indemnifiable recovery against its insured in excess of the insured's primary coverage. The demand for relief was limited to $3,000 for property damage. Surely the excess carrier should have appreciated this fact as soon as it received the complaint from its insured. The complaint alleged that the Board was the owner of the bus. It then knew or should have known, although it took it over a year to find out, that its own coverage was excess since its insured did not own the motor vehicle involved in the accident. It should also have known that the bus was undoubtedly insured by its owner, the Board, as required by the compulsory insurance mandate of N.J.S.A. 39:6B-1 et seq. Its proper course of action would, therefore, have been to make a demand on the Board's insurer, in this case the Board itself, to provide a defense for its insured. Had the demand been made and had the Board refused to defend, the excess carrier would have been itself obliged to defend. Here it defended without having made any such prior demand. This jurisdiction recognizes the rule that an excess or secondary carrier is entitled to reimbursement for its defense expenses from the primary carrier who "has wrongfully refused 207 to defend its assured." Tooker v. Hartford Accident and Indemnity Co., 136 N.J. Super. 572, 576 (App.Div. 1975), certif. den. 70 N.J. 137 (1976); Continental Nat. American Group v. Pluda, 115 N.J. Super. 206 (Law Div. 1971), rev'd on other grounds 119 N.J. Super. 570 (App.Div. 1972). And cf. Burd v. Sussex Mutual Insurance Company, supra, 56 N.J. at 394. This rule accords with the great weight of authority. See, e.g., American Fidelity & Cas. Co. v. United States F. & G. Co., 305 F.2d 633 (5th Cir.1962); Zurich Insurance Co. v. New Amsterdam Casualty Co., 117 Ga. App. 426, 160 S.E.2d 603 (Ga.Ct.App. 1968); Travelers Insurance Co. v. Motorists Mutual Ins. Co., 178 N.E.2d 613 (Ohio Ct. App. 1961); Western Pacific Insurance Co. v. Farmers Ins. Exch., 69 Wash.2d 11, 416 P.2d 468 (Sup.Ct. 1966). And see Annot., "Right to Subrogation, as against primary insurer, of liability insurer providing secondary insurance," 31 A.L.R.2d 1324 (1953) and later case service. And see 8A Appleman, Insurance, § 4923 at 559 (1981). A necessary element of the accrual of the subrogation right of the secondary carrier is, however, the primary carrier's wrongful refusal to defend. The reason for this is obvious. A primary carrier's refusal to defend is ordinarily based on its disclaimer of coverage. As a consequence of the disclaimer, there may well be no primary coverage at all. Thus, until the disclaimer question is resolved, there is effectively no available primary carrier and the excess carrier is, therefore, obliged to assume the defense by reason of its own covenant to defend the insured. Moreover, the public interest as well as that of the insured is served by the excess carrier providing a defense in that circumstance. When it does so, therefore, under those circumstances, it will not be regarded as a volunteer because it has undertaken the defense by reason of its own contractual duty to defend and because the public interest is served by its undertaking of the defense. See, e.g., National Farmers U. Prop. and Cas. Co. v. Farmers Ins. Group, 14 Utah 2d 89, 377 P.2d 786 (Sup.Ct. 1963) which rejected the alleged volunteer 208 status of the excess carrier because of its obligation to defend under the terms of its policy after the primary insurer's refusal. See, in accord, Aetna Casualty & Surety Co. v. Buckeye Union Cas. Co., 157 Ohio 385, 105 N.E.2d 568 (Sup.Ct. 1952); State Farm Mut. Auto. Ins. Co. v. Foundation R. Ins. Co., 78 N.M. 359, 431 P.2d 737 (Sup.Ct.N.M. 1967); National Farmers U. Prop. and Cas. Co. v. Farmers Ins. Group, supra; Maryland Cas. Co. v. American Family Ins. Group, 199 Kan. 373, 429 P.2d 931 (Sup.Ct. 1967). Indeed, our research fails to disclose any case in which the excess carrier's subrogation claim did not rest on the predicate of a prior wrongful refusal by the primary carrier which obliged the secondary insurer to defend. The element of a wrongful refusal to defend by the primary carrier was not present here during most of the litigation. There can obviously be no wrongful refusal until a proper request had been made and rejected. Here there was no proper request or demand made of the primary insurer for fulfillment of its obligation to defend the Township until the Township, by its November 1983 motion, finally advised the Board that its, the Township's, coverage was only excess. As we have noted, the Board never denied it was a primary insurer of the Township but believed rather that the Township's coverage was also primary. Until virtually the end of this litigation it assumed, and perfectly reasonably so, that the Township's carrier was defending under its own covenant to defend and that ultimately, both of them, as primary carriers, would contribute to the overall costs of defense and indemnification. We are satisfied, therefore, that until the Township's carrier had predicated its demand for a defense from the Board on the basis of its own excess-only coverage, it was acting as a volunteer and is not entitled to reimbursement. We do, however, hold that once the proper demand was made, the Board was obliged to assume the defense. We have pointed out that the proper demand was made here in November 1983 and that the case was fully settled by the Board in February 1984 for $700. Long before the November 1983 motion, the *209 Board, as we have noted, had admitted liability to plaintiff as party-defendant and also had conceded, as self-insurer, that the Township was its insured. We assume therefore that any legal services rendered to the Township in the final two or three months of the duration of this simple and modest litigation could not have been a matter of any notable exertion. At least they should not have been. There is, moreover, nothing in this record to suggest that the Township even participated in the litigation after the November 1983 motion. If it did participate, however, and if there were legal services performed on its behalf after that time, it may seek reimbursement therefor in this action by filing a notice of motion supported by a proper certification of services pursuant to R. 4:42-9(b) within 20 days from the date hereof. We note that the certification will have to prove the reasonableness of any services rendered after November 1983 in view of the Board's prior admissions and concessions. The judgment appealed from is modified to permit defendant Township to seek reimbursement in accordance herewith. Should it fail to timely make the motion herein authorized it shall be precluded from doing so thereafter. We do not retain jurisdiction.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265684/	341 Pa. Super. 152 (1985) 491 A.2d 196 COMMONWEALTH of Pennsylvania v. Anthony GALLAGHER, Appellant. Supreme Court of Pennsylvania. Submitted October 1, 1984. Filed March 29, 1985. Petition for Allowance of Appeal Denied September 30, 1985. 155 John Packel, Chief, Appeals, Assistant Public Defender, Philadelphia, for appellant. Jane C. Greenspan, Assistant District Attorney, Philadelphia, for Commonwealth, appellee. Before ROWLEY, MONTEMURO and LIPEZ, JJ. LIPEZ, Judge: In a non-jury trial, defendant was convicted of involuntary deviate sexual intercourse, attempted rape, and possession of an instrument of crime. With new counsel, defendant filed post-verdict motions which were denied. Sentence was imposed, and with a second new counsel, defendant took this appeal alleging: (1) that defendant was erroneously convicted and sentenced for two inchoate offenses for conduct designed to commit or culminate in the commission of the same crime; (2) that trial counsel was ineffective when he told the trial judge that defendant made no statement upon arrest (thus sabotaging defendant's claim of innocent cooperation with the police) and that post-verdict counsel was ineffective in failing to raise this claim below; and (3) that trial counsel was ineffective for failing to object to the introduction of prior crimes evidence. We affirm. Defendant first claims that he was erroneously convicted and sentenced for two inchoate offenses attempted rape and possessing the instrument of a crime for conduct designed to commit or culminate in the commission of the 156 same crime. Though defendant did not raise this issue in the court below, "a question as to the legality of sentence is never waived despite the fact that it was not raised in the court below." Commonwealth v. Von Aczel, 295 Pa.Super 242, 246, 441 A.2d 750, 752 (1981). A defendant may not be convicted of more than one inchoate offense designed to commit or to culminate in the commission of the same crime. 18 Pa.C.S. § 906. In Commonwealth v. Crocker, 256 Pa.Super. 63, 389 A.2d 601 (1978), the court held that defendant could not be convicted and sentenced for both criminal attempt and possessing an instrument of crime because defendant's conduct was designed to culminate in the commission of only one crime. In Commonwealth v. Hassine, 340 Pa.Super. 318, 368, 490 A.2d 438, 464 (1985), the court stated that the purpose of Section 906 was "to eliminate the conviction for more than one offense in the preparation to commit the objective, that is, where the offenses were designed to culminate in the commission of only one crime." (emphasis in original). See also Commonwealth v. Zappacosta, 265 Pa.Super. 71, 401 A.2d 805 (1979). The evidence in this case indicates that defendant possessed the knife (the instrument of crime) with the intent of committing the crime of rape, and later with the intent of committing the crime of involuntary deviate sexual intercourse. Thus, defendant possessed the knife with the intent to commit two distinct crimes. Therefore, to be convicted and sentenced for attempted rape and possessing the instruments of crime in this case does not violate the "same crime" rule of 18 Pa.C.S. § 906. Defendant next argues that trial counsel was ineffective because he told the judge as factfinder that defendant made no statement upon being arrested, and that this sabotaged his defense of innocent cooperation with the police. Defendant also claims that post-verdict counsel was ineffective in failing to challenge trial counsel's ineffectiveness. The claim that trial counsel was ineffective was not raised in post-verdict motions, thus is waived. Commonwealth 157 v. Hubbard, 472 Pa. 259, 372 A.2d 687 (1977). The claim that post-verdict counsel was ineffective in failing to challenge trial counsel's ineffectiveness is properly raised on appeal. Id. The question before us, then, is: was post-verdict counsel ineffective in failing to challenge trial counsel's ineffectiveness? Defendant has the burden of proving ineffectiveness of counsel. Commonwealth v. Shore, 487 Pa. 534, 410 A.2d 740 (1980). Counsel's assistance is deemed effective if it had "some reasonable basis designed to effectuate his client's interests." Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 604, 235 A.2d 349 (1967). In attempting to bolster his client's claim that defendant did not inform police about an alleged incident (in which he claims that the victim got angry when defendant refused her sexual advances) because he was not charged with doing anything wrong at the time, trial counsel mentioned the fact that defendant made no statement upon being arrested, and then said: I wanted the court to know that. The Commonwealth is making a big thing of what he didn't say. He hadn't been charged with anything. (N.T. 241). It appears that trial counsel made a mistake. In the process of trying to emphasize that defendant did not say anything to police because he had not been charged with anything, counsel noted that defendant exercised his right to remain silent upon being arrested. Counsel is not held to be ineffective in the absence of some showing that defendant was prejudiced by counsel's behavior. Commonwealth v. Litzenberger, 333 Pa.Super. 471, 482 A.2d 968 (1984). "There exists a strong disposition on the part of lay jurors to view the exercise of the Fifth Amendment privilege as an admission of guilt." Commonwealth v. Turner, 499 Pa. 579, 582, 454 A.2d 537 (1982). But in this case we are dealing with a bench trial, with an experienced judge as the factfinder; a judge well aware of the importance of the Fifth Amendment privilege; a judge who is presumed not to 158 view the exercise of a fundamental right as an admission of guilt. This is not a case, like those cited by the defendant, where a judge has heard inadmissible evidence of prior crimes, and it was determined that even a judge could not ignore such prejudicial evidence. In Commonwealth v. Conti, 236 Pa.Super. 488, 345 A.2d 238 (1975) the court looked at two factors to determine if a judge could maintain his impartiality after hearing incompetent evidence: (1) the "inherently prejudicial quality" of the evidence involved; and (2) the importance of the evidence to the particular case. The evidence in this case is defendant's silence upon being arrested. The fact that defendant exercised his constitutional right to remain silent upon arrest would not come as a great surprise to a judge. A judge's knowledge of this is not highly prejudicial to defendant. Moreover, had trial counsel not announced this fact, it is very likely that the judge would have come to the same conclusion. Judge Klein stated that he found the victim's testimony "particularly convincing," and in general believed the evidence presented by the Commonwealth. Thus, the fact that the judge knew that defendant exercised his right to remain silent upon being arrested was of no great importance to this case. Defendant, then, was not prejudiced by counsel's actions in telling the judge as factfinder that defendant made no statement upon his arrest; and post-verdict counsel was not ineffective for failing to raise this claim of ineffectiveness against trial counsel.[1] Defendant's final claim is that trial counsel was ineffective for failing to object to the introduction of evidence of defendant's sole prior conviction for impersonating a public servant and theft of services. (This claim of ineffectiveness was raised by post-verdict counsel). The criteria for admitting evidence of prior convictions to impeach 159 a defendant-witness were established in Commonwealth v. Bighum, 452 Pa. 554, 307 A.2d 255 (1973) and Commonwealth v. Roots, 482 Pa. 33, 393 A.2d 364 (1978). The prior conviction must be for a crime involving false or dishonest statement crimen falsi. Once that is established, the court considers a number of factors in determining whether the probative value of the evidence outweighs the prejudice to the defendant: the degree to which the prior crime reflects on defendant's veracity; the age, nature, and number of prior offenses; the existence of alternative methods of attacking the witness' credibility; the strength of the prosecution's case; the degree to which the prior crime is similar to the present crime charged. In his opinion, Judge Klein utilized several of the Bighum Roots criteria in determining that the prior conviction was admissible for impeachment purposes and that counsel was not ineffective for failing to raise a meritless claim. While it is true that Commonwealth v. Williams, 273 Pa.Super. 389, 417 A.2d 704 (1980) holds that evidence of a series of prior convictions for the same crime for which an accused is charged is too prejudicial to be used for impeachment purposes, this is not what happened in this case. Here, defendant was charged with possessing an instrument of crime and sexual offenses. His prior conviction which was admitted for impeachment purposes was for impersonating a public servant and theft of services. It is true that defendant in this case impersonated another's voice to acquire access to his victim, but this is not evidence that "would have tended to smear the character of the [defendant] to such an extent that an unbiased and impartial determination of guilt or innocence would have been 160 rendered improbable if not impossible." Id., 273 Pa.Superior Ct. at 391, 417 A.2d at 706. Moreover, in Commonwealth v. Kearse, 326 Pa.Super. 1, 473 A.2d 577 (1984), the court upheld the admissibility of a prior conviction for robbery to impeach a defendant charged with robbery. The court distinguished the case from Williams by pointing out that unlike Williams the evidence used to impeach defendant Kearse consisted of only one prior conviction, which was not nearly as remote in time as those in Williams; and that while the prosecution in Williams had three eyewitnesses to the crime, here there was only one eyewitness. In our case, there was evidence of only one prior conviction admitted, and it was not for the same crime for which defendant was accused; the prior conviction was not even as remote in time as the one in Kearse; and the prosecution had only one eyewitness to the crime. Thus, since the prior conviction was crimen falsi and the case is clearly distinguishable from Williams, we find no reason to disturb Judge Klein's rulings that based on the Bighum Roots criteria, the probative value of the evidence outweighed the prejudice to the defendant, and trial counsel was not ineffective for failing to object to the introduction of prior crimes evidence. Judgment of sentence affirmed. NOTES [1] Defendant's claim that counsel's remark that defendant made no statement upon arrest sabotaged his defense of innocent cooperation with the police is also without merit. Trial counsel did admit that part of his strategy was to demonstrate that defendant cooperated with the police (N.T. 5/27/82, 20). Evidence was introduced suggesting that prior to his arrest, defendant had cooperated with police. Upon arrest, defendant exercised his constitutional right to remain silent. This does not suggest that he was uncooperative; nor does it diminish the effect of the evidence of his prior cooperation. Being arrested is unquestionably different from merely being questioned. When you are actually arrested and charged with committing a crime it is natural to be more cautious and careful about what you say. An experienced judge acting as factfinder understands that the exercise of a constitutional right does not indicate lack of cooperation, rather, it indicates a desire to be cautious.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1726355/	970 So. 2d 834 (2007) WILLIS v. STATE No. 2D07-510. District Court of Appeal of Florida, Second District. December 14, 2007. Decision without published opinion. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265726/	341 Pa. Super. 381 (1985) 491 A.2d 868 COMMONWEALTH of Pennsylvania v. Robert EASLEY, Appellant. Supreme Court of Pennsylvania. Submitted March 23, 1984. Filed April 4, 1985. 383 John H. Corbett, Jr., Public Defender, Pittsburgh, for appellant. Robert L. Eberhardt, Deputy District Attorney, Pittsburgh, for Commonwealth, appellee. Before POPOVICH, HOFFMAN and LIPEZ, JJ. HOFFMAN, Judge: Appellant contends that (1) the evidence was insufficient to prove the elements of the offense charged; (2) trial counsel was ineffective for failing to challenge the defective jury trial waiver colloquy; (3) trial counsel was ineffective for failing to object to the testimony of appellant's wife; and (4) the lower court erred in admitting into evidence a letter written by appellant's wife. We reverse. On February 11, 1981, appellant and his wife were charged with fraudulently receiving public assistance payments totalling $5,958.50 because they failed to report to the Allegheny County Board of Assistance the income received from the wife's employment during the period of August 5, 1977 through June 27, 1979. Following a nonjury trial, both co-defendants were found guilty. Post-verdict motions were denied, and appellant was sentenced to a term of probation for one year plus restitution and costs. Subsequently, 384 appellant, represented by new counsel, filed this appeal. Appellant first challenges the sufficiency of the evidence to support his conviction. It is well-established that the evidence is sufficient if "viewing the evidence in the light most favorable to the Commonwealth, and drawing the proper inferences favorable to the Commonwealth, the trier of fact could reasonably have found that all of the elements of the crime had been established beyond a reasonable doubt." Commonwealth v. Contakos, 492 Pa. 465, 468, 424 A.2d 1284, 1286 (1981), quoting Commonwealth v. Rose, 463 Pa. 264, 267-68, 344 A.2d 824, 825-26 (1975). The elements of the offense in question are statutorily outlined as follows: § 481. False statements; investigations; penalty (a) Any person who, either prior to, or at the time of, or subsequent to the application for assistance, by means of a wilfully false statement or misrepresentation, or by impersonation or by wilfully failing to disclose a material fact regarding eligibility or other fraudulent means, secures, or attempts to secure, or aids or abets or attempts to aid or abet any person in securing assistance, or Federal food stamps, commits a crime which shall be graded as provided in subsection (b). (b) any person violating subsection (2) commits the grade of crime determined from the following schedule: Amount of Assistance or Food Stamps Degree of Crime $3,000 or more Felony of the third degree $1,500 to $2,999 Misdemeanor of the first degree $1,000 to $1,499 Misdemeanor of the second degree $999 and under, or an attempt to commit any act prohibited in subsection (2) Misdemeanor of the third degree Pursuant to 42 Pa.C.S. § 1515(a)(7) (relating to jurisdiction and venue), jurisdiction over cases graded a misdemeanor of the third degree under this section shall be vested in district justices. 62 P.S. § 481 (Supp. 1984-85). 385 Here, the record reveals the following facts: Periodic interviews were conducted by the social workers from the Department of Public Welfare. At these interviews which were held on August 5, 1977, May 31, 1978, September 20, 1978, and March 14, 1979, appellant, in his wife's presence, stated that neither of them was receiving any income. Additionally, both parties indicated that they had been living together during the applicable period. It is undisputed that, during this time, appellant's wife was employed by Allegheny County. Because appellant failed to disclose the material fact that his wife was employed, we find that the evidence was sufficient to convict appellant. Appellant next alleges that trial counsel was ineffective in failing to challenge his jury waiver colloquy. "[C]ounsel's assistance is deemed constitutionally effective once we are able to conclude that the particular course chosen by counsel had some reasonable basis designed to effectuate his client's interest." Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 604, 235 A.2d 349, 352 (1967) (emphasis in original). However, we must first determine whether the issue underlying the charge of ineffectiveness possesses arguable merit before we inquire into the basis for counsel's decision. Commonwealth v. Evans, 489 Pa. 85, 91, 413 A.2d 1025, 1028 (1980). "Counsel cannot be found ineffective for failing to assert a meritless claim." Id., 489 Pa. at 91 n. 6, 413 A.2d at 1028 n. 6. In the instant case, the lower court questioned appellant as to his understanding of (1) his right to be tried by a jury of twelve people, (2) his right to participate in the selection of the jury, (3) the area from which the jury pool would be chosen, and (4) his right to challenge peremptorily five of those jurors and any other jurors for cause. (N.T. July 23, 1981 at 5-7). The court also asked appellant whether he had discussed in advance with his attorney his right to waive a jury trial, whether anyone had pressured him into waiving, and whether he had consumed any alcoholic beverages or narcotics within the last 24 hours. (Id. at 8-10). In 386 response to further questioning, appellant indicated that he wished to be tried without a jury and that his decision to waive a jury trial was made of his own free will. (Id. at 8-9). Appellant also signed, in the presence of counsel, a written waiver of his right to a jury trial. (Id. at 10-11). Upon completing the colloquy, the lower court accepted appellant's waiver and commenced hearing the case as a nonjury case. Appellant argues specifically that the above-described colloquy was defective because the court failed to inform him that he would be waiving his right to a unanimous verdict. In Commonwealth v. Williams, 454 Pa. 368, 312 A.2d 597 (1973), our Supreme Court stated that the "essential ingredients, basic to the concept of a jury trial, are the requirements that the jury be chosen from members of the community (a jury of one's peers), that the verdict be unanimous, and that the accused be allowed to participate in the selection of the jury panel." Id., 454 Pa. at 373, 312 A.2d at 600. Subsequently, in Commonwealth v. Ward, 483 Pa. 53, 394 A.2d 535 (1978), and Commonwealth v. Greene, 483 Pa. 195, 394 A.2d 978 (1978), because the trial court in those cases failed to inform the defendant that the verdict of the jury had to be unanimous in order to convict, the Supreme Court found that the defendant had not effectively waived his right to a jury trial. However, in Commonwealth v. Smith, 498 Pa. 661, 450 A.2d 973 (1982), although the judge conducting the colloquy did not explore the defendant's understanding of either the fact that the jury's verdict had to be unanimous or the fact that the defendant could participate in jury selection, our Supreme Court found that the defendant was fully aware of these requirements because he had signed a written waiver form which stated that he "`fully understand[s]' the ingredients of a jury trial, including the unanimity and defendant participation requirements which were not explained in the colloquy." Id., 498 Pa. at 663, 450 A.2d at 974. Therefore, the Court concluded that trial counsel was not ineffective for failing to object to the defective colloquy. 387 We find Smith distinguishable from the instant case. Here, the waiver form signed by appellant stated only that he waived his right to a jury trial and elected to be tried by a judge without a jury. (N.T. July 23, 1981 at 10-11). There is no indication in the colloquy, waiver form, or anywhere in the record that appellant was ever informed of or understood his right to a unanimous verdict.[1] The Commonwealth correctly points out that a "totality of the circumstances" approach has been adopted by our courts in reviewing an allegedly defective guilty plea colloquy. See Commonwealth v. Shaffer, 498 Pa. 342, 446 A.2d 591 (1982); Commonwealth v. Campbell, 309 Pa.Superior 214, 455 A.2d 126 (1983). In Commonwealth v. Anthony, 307 Pa.Superior 312, 453 A.2d 600 (1982), aff'd, 504 Pa. 551, 475 A.2d 1303 (1984), this Court found that, although the guilty plea colloquy between the trial court and the defendant did not include any mention of the need for a unanimous verdict in order to convict, the colloquy was not defective because the record revealed that the plea tendered was knowing, intelligent and voluntary. On appeal, the Supreme Court agreed. 388 Additionally, the totality of the circumstances test has apparently been extended to jury waiver colloquies as well. See Commonwealth v. DeGeorge, 506 Pa. 445, 485 A.2d 1089 (1984). In DeGeorge, there was no on-the-record colloquy, and the written waiver, signed by the defendant, only stated that the defendant "pleads not guilty and . . . waives a jury trial and elects to be tried by a judge without a jury." Id., 506 Pa. at 449, 485 A.2d at 1091. Therefore, our Supreme Court remanded the case to the trial court for evidentiary proceedings to determine whether the waiver of trial by jury was knowing and intelligent. The Court reasoned that: In the absence of any assertion of record indicating that the waiver was knowing and intelligent, we are unable to determine whether DeGeorge has received effective assistance of counsel in waiving a jury trial. We have no indication of the extent to which counsel and client may have conferred on that which was waived, or what colloquy was conducted at the time the written waiver was executed. Id., 506 Pa. at 449-450, 485 A.2d at 1091. We note that the Supreme Court rejected the Morin remedy of remanding for a new trial. See Commonwealth v. Morin, 477 Pa. 80, 383 A.2d 832 (1978). The DeGeorge Court noted that decisions subsequent to Morin "permit[ted] the consideration of circumstances outside the content of the of-record colloquy in determining the validity of a [jury trial] waiver." 506 Pa. at 449-450, 485 A.2d at 1091, citing Commonwealth v. Anthony, supra; Commonwealth v. Carson, 503 Pa. 369, 469 A.2d 599 (1983);[2]Commonwealth v. Smith, supra; Commonwealth v. Williams, supra. 389 In the instant case, even applying the totality of the circumstances test to look at the entire record, rather than just the on-the-record colloquy, we find that there is no evidence to indicate that appellant understood all of the essential ingredients of a jury trial, i.e. that the verdict must be unanimous in order to convict. Accordingly, we remand the case to the lower court for evidentiary proceedings to determine whether the waiver of trial by jury was knowing and intelligent. Commonwealth v. DeGeorge, supra. If, on remand, the court finds that the waiver was knowing and intelligent, then appellant will have suffered no prejudice and therefore will not be entitled to a new trial on ineffectiveness grounds. See Commonwealth v. Garvin, 335 Pa.Superior 560, 485 A.2d 36 (1984) (en banc). However, if the court finds that the waiver was unknowing and unintelligent, then appellant will be entitled to a new trial.[3] Judgment of sentence reversed and case remanded for proceedings consistent with this opinion. Jurisdiction is not retained. POPOVICH, J., files a concurring and dissenting opinion. 390 POPOVICH, Judge, concurring and dissenting: This writer agrees with the majority's decision to reverse the judgment. However, an evidentiary hearing need not be conducted at the trial level because the record shows that appellant is entitled to a new trial because the trial court erred in admitting into evidence a letter which was written by appellant's wife which implicated appellant. The record shows that at trial the following letter was mentioned and introduced into evidence during the testimony of Mary Salerno, an investigator and supervisor of the Department of Public Welfare: "Dear Ms. Salerno, Supervisor, I'm writing this letter to inform you of my inability to keep the appointment scheduled for Monday, February 2, 1981, at nine. I have laryngitis. If I called you to explain, you probably would have thought it a prank call since I could hardly talk clearly. I can't apologize enough for any inconvenience I may have caused. I understand your time is valuable and limited. I would like to explain or clarify my involvement in this case, whether it be directly or indirectly. Yes, it was an overpayment made to the both of us during this period of May 14, 1976 to February, 1979. To my knowledge, we did not receive any additional funds from D.P.A. Our worker, Ms. Gay, called in February and talked to me regarding my status, that we would not receive any further assistance because her records indicated an employment record under my name. I have been employed since April 26, 1976, with Allegheny County Adult Services, Area Agency on Aging. I was wedded at the age of 17, July 20, 1974, and gave birth, November 18, '74. I was also still in school. I graduated and furthered my education in business school and the secretarial school. We had been on D.P.A. since we were married in 1974. I didn't like the fact we were on D.P.A., but we had no alternative because Robert didn't complete high school, and I was in high school at that time and couldn't get a job without a diploma or G.E.D. I went on 391 to business school so I could qualify for a good paying job. I did just that. Although, I was getting $175 bi-monthly, I felt it enough to take care of all three of us. During our four and a half years of marriage, because we were separated since June, 1979, we have encountered many marital problems which in turn created physical, mental, emotional, and sexual problems on my part since I was the target of his insecurity and frustrations. After nine months of our marriage, Robert changed drastically. I could not [sic] longer talk to him." I don't know if that is relevant. I will skip down. I'm going to delete certain portions of it when on the face, it indicates what has to do with their personal relationship unconnected with the funds. I see no purpose with reading it. There is no point in my reading it myself there. Page 3 and 4, we are omitting. I'm not interested in pages 5, 6, 7. I'm not going to incorporate some of the personal matters referred to in the letter. There is no point to that. Obviously, they refer to the fact they were aware of the fact she was working and performing satisfactorily with the County and didn't need the extra money. MR. MATLOCK [The Wife's Attorney]: Also, your Honor, part of our defense is in there as far as the duress is concerned. (N.T. 7/23/81 at 111-114). The prosecution contends that the admission of the letter was not an error because "the references to appellant in the letter cannot be considered prejudicial in light of the crime charged." Brief for Appellee at 21. The prosecution also states that the "letter, as edited, was properly admitted." Id. This writer must disagree. In Pennsylvania, two rules govern the admission of testimony by one spouse against the other. See Commonwealth v. Borris, 247 Pa.Super. 260, 263-6, 372 A.2d 451, 453-4 (1977). The scope of these rules has been delineated in the following manner: 392 The first is an absolute prohibition of incompetence preventing one spouse from testifying against the other during the existence of a valid marriage. See Canole v. Allen, 222 Pa. 156, 70 A. 1053 (1908); Bell v. Throop, 140 Pa. 641, 21 A. 408 (1891); III Freedman, Law of Marriage and Divorce in Pennsylvania, § 749 (2d Ed. 1957). That principle has long been codified into the law of Pennsylvania. Act of May 23, 1887, P.L. 158, § 5, cls. (b, c); 28 P.S. §§ 316-317; Act of May 23, 1887, supra, as amended, Act of April 27, 1909, P.L. 179, § 1; Act of May 11, 1911, P.L. 269, § 1; 19 P.S. § 683. See also, Commonwealth v. Moore, 453 Pa. 302, 309 A.2d 569 (1973). The second privilege governs confidential communications made during a marriage, subsequently terminated by death or divorce. The Act of 1887 does not contemplate those situations. See 2 Henry, Pennsylvania Evidence § 699 (4th Ed. 1953). Our courts have followed the common law rule in those cases: "We have held that the reason for the rule of the common law, which forbade husband and wife to give testimony against each other, ceased on the death or divorce of one of the parties, except as to confidential communications. Hayes's Est., 23 Pa.Super. 570. The disqualification that remains after the dissolution of the marriage is restricted to communications of a confidential nature. Stewart v. F.A. North Co., 65 Pa. Super. 195." Commonwealth v. Beddick, 180 Pa.Super. 221, 227, 119 A.2d 590, 593 (1956). See generally, McCormick, Evidence, § 66 (Cleary Ed. 1972). Id. Accord 42 Pa.C.S.A. § 5913; Trammel v. United States, 445 U.S. 40, 48 n. 9, 100 S. Ct. 906, 911 n. 9, 63 L. Ed. 2d 186, 193 n. 9 (1980). The incompetency statute reads as follows: § 5913. Spouses as witnesses against each other Except as otherwise provided in this subchapter, in a criminal proceeding husband and wife shall not be competent or permitted to testify against each other, except that in proceedings for desertion and maintenance, and in any criminal proceeding against either for bodily injury or 393 violence attempted, done or threatened upon the other, or upon the minor children of said husband and wife, or the minor children of either of them, or any minor child in their care or custody, or in the care or custody of either of them, each shall be a competent witness against the other, and except also that either of them shall be competent merely to prove the fact of marriage, in support of a criminal charge of bigamy alleged to have been committed by or with the other. (Emphasis added). 42 Pa.C. S.A. § 5913. Our Supreme Court also has said that the rule prohibiting one spouse from testifying against the other "is a rule which is not waivable by the parties." Commonwealth v. Moore, 453 Pa. 302, 307, 309 A.2d 569, 571 (1973). The genesis of the law in Pennsylvania was summarized in the following manner: At common law husband and wife are incompetent to testify against each other. This rule has never been relaxed; on the contrary, it has been reinforced, and guarded from invasion by statutory enactment. Our Act of May 23, 1887 (P.L. 158), defining competency, is more than confirmatory of the common-law rule; it declares in express terms that neither shall be permitted to testify against the other, a prohibition of which both the parties to the suit and the trial judge as well are bound to take notice. Connivance by the parties cannot evade it, nor can indulgence by the court. The language of the act is: "Nor shall husband or wife be competent or permitted to testify against each other." Canole v. Allen, 222 Pa. 156, 159, 70 A. 1053, 1055 (1908).[1] (Emphasis added) 394 Thus, the law is clear that the testimony of Sandra Easley could not be introduced against her husband, the appellant. In this case, it is immaterial that the testimony was in the form of an extrajudicial written statement because we recognize that [w]hat is prohibited by the act is testimony in any form by the wife or husband against the other. Extrajudicial admissions are a sort of testimony; hence the prohibition of the act applies to them with the same force as though made by a spouse from the stand. Wigmore, Ev. 3rd Ed., §§ 1048, 2232. Kerr v. Clements, 148 Pa.Super. 378, 383, 25 A.2d 737, 740 (1942).[2] 395 Therefore, because the trial court erred in admitting the letter over appellant's objection, it is necessary to analyze whether this error was harmless. The standard of review for determining harmless error has been set forth in the following manner: an error cannot be held harmless unless the appellate court determines that the error could not have contributed to the verdict. Whenever there is a "`reasonable possibility'" that an error "`might have contributed to the conviction,'" the error is not harmless. Commonwealth v. Davis, 452 Pa. [171] at 178, 305 A.2d [715] at 719 [1973], quoting Chapman v. California, 386 U.S. [18] at 24, 87 S.Ct. [824] at 828 [17 L. Ed. 2d 705 (1967)]. Commonwealth v. Story, 476 Pa. 391, 409, 383 A.2d 155, 164 (1978). Additionally, because the trial court and not the jury was the fact finder at appellant's trial, a judge, as factfinder, is presumed to disregard inadmissible evidence and consider only competent evidence. Commonwealth v. Brown, 328 Pa.Super. 215, 219 n. 6, 476 A.2d 969, 971 n. 6 (1984). The reason for this rule is because Judges, however, by virtue of their legal training and professional experience can be expected to sift through the evidence, critically analyze it, and discard that which is not properly presented. As a result, an appellate court can more readily presume proper decision making when the trier of fact is a judge. Commonwealth v. Walls, 272 Pa.Super. 284, 289, 415 A.2d 890, 893 (1979). In cases where potentially prejudicial evidence has been admitted during the course of a trial in which the trial court is the finder of fact, this Court has "deduced two factors which will be weighty considerations in determining whether a mistrial should be declared. . . ." Id. These factors 396 also are relevant to our examination of the issue presented in this case: The first factor is whether the evidence is "so prejudicial" that the risk of improper adjudication cannot be ignored; such evidence is usually recognizable by its emotional impact rather than its misleading probative value. The second factor is whether the prejudicial evidence is important to the case; that is to say, when the other evidence of guilt is overwhelming, "we shall be less sensitive to the risk of harmful prejudice. . . ." [Commonwealth v. Conti, 236 Pa.Super. 488, 501, 345 A.2d 238, 245 (1975)]. Id. Applying the harmless test to the facts of the instant case, this writer is unable to conclude that the error could not have contributed to the verdict. To begin with, the inadmissible testimony was an admission by the appellant's wife, a co-defendant, that "it was an overpayment made to the both of us during this period of May 14, 1976, to February, 1979." Notes of Testimony at 111 (emphasis added). Appellant was charged with illegally receiving public assistance "on or about August 5, 1977 thru June 27, 1979", which was during the same period. See "Complaint". Additionally, appellant's wife admitted that she had "been employed since April 26, 1976, with Allegheny County Adult Services, Area Agency on Aging." Id. at 112. Sarah Easley also stated that she "was the target of [appellant's] insecurity and frustrations". Id. at 113. Accordingly, because appellant's wife's statement was against appellant and also because the statement referred to appellant's involvement in the crime, this evidence is the kind of evidence which is recognizable "by its emotional impact rather than its misleading probative value." Commonwealth v. Walls, 272 Pa.Super. at 289, 415 A.2d at 893 (emphasis added); see Commonwealth v. Garrison, 398 Pa. 47, 51, 157 A.2d 75, 77 (1959) (no error where the evidence proffered at trial "was not against her husband and did not refer to him). 397 In fact, the reason for the rule which disqualifies one spouse from testifying against the other presumes the existence of an emotional relationship.[3] 398 The prosecution cites Federal authority for support regarding the admissibility of the letter. However, that authority is not persuasive because the rules are different. See Trammel v. United States, 445 U.S. at 480 n. 9, 100 S. Ct. at 911 n. 9, 63 L. Ed. 2d at 193 n. 9 (Pennsylvania is one of "[e]ight states [which] provide that one spouse is incompetent to testify against the other in a criminal proceeding. . . ."); Id. at 53, 100 S. Ct. at 914, 63 L.Ed.2d at 196 (Under the federal law, "the witness-spouse alone has a privilege to refuse to testify adversely; the witness may be neither compelled to testify nor foreclosed from testifying."). See generally Cornelius, supra. Thus, we are persuaded that the error could have contributed to the verdict. The second factor is whether the inadmissible evidence was important to the case. Although social workers testified that the Easleys had received public assistance and failed to report any income, this writer is unable to state that the letter was not an important part of the case. Even the prosecutor conceded as much at the close of the trial when he said: MR. TURNER [the Prosecutor]: Yes, your Honor, I think that the evidence clearly establishes that Saundra Easley with full knowledge was employed and receiving assistance through this period of time in question. Whether or not the Court will give any weight or significance to her other comments is certainly within the Court's discretion. That with regard to Saundra Easley, I think we have well met our burden of establishing that 399 she is guilty of making false statements beyond a reasonable doubt. I think that the more difficult situation arises with regard to Robert Easley. I think the Court could accept during this period of time that the two parties resided together as husband and wife, and he had knowledge of the fact they were receiving assistance, first from the interviews conducted by the various witnesses that testified, from the fact that checks were made to him that he cashed, and he knew from these interviews and checks and statements contained therein as well as things explained to him that he had the duty and obligation to report to the Department of Welfare any change in their circumstances; most notably, any source of income they might be receiving. I would reiterate to the Court that I think common sense would leave the Court to believe that Robert Easley was well aware of the fact that his wife was working during this period of time. I would ask the Court to consider the daily routine involved and it would be hard for him not to be aware of the fact she was working at this time. Yet no efforts were made by either party to inform Welfare of the other sources of income. As to the question whether she was in fact under duress, there is unsubstantiated testimony that he beat her and she was under mental duress and pain and so forth. There is no supporting evidence to establish that she at any time went to the police officers about it or attempted to leave the home for the safety of herself or her child; nor, she at any time reported this information to the Department of Welfare. I think if either thing had been done, some solution could have been found that would have prevented this matter from going this far. I would go back to the charge presented here, that of making false statements; the charge brought against both parties and the facts relevant to that charge. With that, the Commonwealth would rest, your Honor. (Notes of Testimony at 138-141 (emphasis added). 400 In its opinion, the trial court referred to the inadmissible statement as "unflattering"; however, the court stated that the statement was "neither inculpatory, inflamatory [sic] or prejudicial." Trial Court's Opinion at 1. While this writer is mindful of the trial court's ability to sift through the evidence, this writer cannot overlook "the fact that judges are subject to the same emotions and human frailties as affect all persons, lay jurors or not." Commonwealth v. Conti, 236 Pa.Super. at 501, 345 A.2d at 245 (1975). Moreover, "no matter which way the evidence[, the letter,] was taken, it cast a shadow on the whole case." Id. The error in the instant case was compounded because appellant's co-defendant testified on her own behalf as follows: [The Wife's Attorney] Q You told Mr. Romano [a social worker] you were not working? [The Wife] A Yes. Q Why did you tell him that? A I can't sit here and really explain the reason why I did or didn't. First of all, everyone here has to understand the intensity of the fear that I had to live with with Robert Easley during my marriage. I had no family to turn to. I had nowhere else to go. Therefore, I had no alternative but to stay and listen to what he said and to take the abuse he gave me during those years of my marriage. I had no way out and I was getting sick and tired of being badgered and abused constantly by him. Until I found a way out, I submitted to everything he wanted me to do until I found a way out. Q Are you saying things happened in September, '78 and March, '79 when you spoke to Miss Gay [a social worker], the same things happened? A Yes. 401 Q Did this physical or mental abuse ever lead to you having to go to the hospital at all? A Yes, I had a bruise on my arm. My head was busted open. I have bruises here. I have bruises on my back and my arm. Q Did this only revolve around you getting this assistance from the Department of Public Welfare? A Not only that, anything. He was totally unreasonable. No matter what I wanted to do, he had his own mind. I said curtly one day, "You're going to get caught." He said, "I will take care of that." When he told them he was working, I said, "Why can't I tell them I'm working?" Because the checks are coming in my name. They won't worry about your employment. I said, "You told them you were working." It is total confusion. Q You said that the checks were coming in his name. Did you ever cash any of the checks? A No, I did not. The money I work for I took care of myself and my baby and paid the bills. Q Which bills? A Sometimes I would pay the rent. It depends on whether or not he paid it or not. He was always home at the time. Depending on whether or not he paid the receipt made up the difference as to whether or not I would pay it. If he didn't pay it, I paid it. Q You took care of your daughter totally? A Totally except for food because we were receiving food stamps. Medically, under our checks, we also had medical coverage. That aspect I didn't take care of her. As far as food and clothing, I took care of her and any other supports she needed, I provided her with that. Q On a regular basis, would you say you had the use of the money that came from the checks? A No, I didn't even see the checks. Q At any time did you accompany Mr. Easley to the bank with the checks? 402 A No, I was working at the time. He would cash the checks. He would do whatever he wanted to. One time Fon [the daughter] and I lived on cereal for a whole month because he wanted to get a car. Q You stated you had been to the hospital on several occasions? A Yes. MR. MATLOCK [Appellant's Attorney]: I have some hospital records, Your Honor. THE COURT: What is this? MR. MATLOCK: This is a hospital report. BY MR. MATLOCK: Q During this time how many times would you say you went to the hospital, Mrs. Easley, a rough estimate? A For not only physical abuse, but for internal abuse, I was treated at Magee Hospital at least three times a year. Homestead Hospital at least three or four times at Homestead Hospital. Q What about South Hills? A That is Homestead Hospital. Q Why were you at Homestead Hospital? A For a cut on my arm. One day he had come in. He was going to school at the time to get his G.E.D. He was receiving all kinds of calls. I would question him because this one time this one girl called and said, "Is Curly there?" I said, "No, he isn't." "What time will he be home?" I said, "Who is this?" She wouldn't give me an answer. I said, "I don't know what time." When he came in, I said, "Some girl called for you. She was rude and ignorant over the telephone. What does she want? She wanted to speak to you." I said, "How can you have girls call at the house?" He was drinking at the time. He had a whiskey glass, or whatever kind of bar glass he had. He was sitting on the couch. I must have said something to him about the phone call that really made him upset. He was on the couch and I was on the chair. I put my hand up like this (indicating) because he was going to throw 403 something at me. I had a deep cut here because my bone was showing, and I was rushed to the hospital. MR. NYCHIS: Your Honor, I move for a mistrial. I object to this. I ask for a mistrial. This is highly prejudicial and inflammatory. I don't know how you can permit it. THE COURT: The motion for a mistrial is denied. I mean you have gone far enough on this. MR. MATLOCK: Your Honor, this stretched over two years. I'm trying to show a continuing set of circumstances between these two people. Notes of Testimony at 127-131 (emphasis added). The totality of the circumstances in the instant case establishes that the prejudicial evidence which was emphasized at trial deprived appellant of a fair trial, and accordingly, a new trial should be granted. NOTES [1] We also find Commonwealth v. Ponder, 323 Pa.Superior 566, 471 A.2d 89 (1984), and Commonwealth v. Quarles, 310 Pa.Superior 74, 456 A.2d 188 (1983), distinguishable. In Ponder, the defendant alleged that the jury waiver colloquy was defective because it did not mention how he would participate in jury selection or his right to challenge jurors. However, the colloquy did inform appellant that he would be allowed to participate in jury selection and was complete in all other respects. This Court, in holding that there was a knowing and intelligent waiver of the right to trial by jury, stated: "There was no requirement that the trial court give appellant a play-by-play description of the procedure to be followed in selecting a jury." 323 Pa.Superior at 571, 471 A.2d at 92. In Quarles, this Court held that the jury trial waiver was not defective even though appellant was not informed that the jury must find him guilty beyond a reasonable doubt. We reasoned that the defendant, in waiving his right to be tried by a jury, was not thereby waiving any rights regarding burden of proof because the judge would be bound by the same legal principles that would bind a jury in this respect. 310 Pa.Superior at 79, 456 A.2d at 191. We also reaffirmed that the only essential ingredients which a defendant must be advised of are that the jury would be chosen from his community, that the verdict must be unanimous, and that a defendant can participate in the selection of the jury panel. Id., citing Commonwealth v. Pollard, 288 Pa.Superior 20, 430 A.2d 1192 (1982). [2] In Commonwealth v. Carson, supra our Supreme Court held that counsel was not ineffective in failing to explain that the jury would be chosen from members of the community or from the defendant's peers, and therefore affirmed the denial of post-conviction relief. The Court concurred with the lower courts' determination, based on the record of the colloquy and testimony taken at the post-conviction hearing from the defendant and his trial counsel, that the defendant "fully understood the ingredients of a jury trial and his rights thereto, and made a knowing and intelligent waiver of those rights." 503 Pa. at 372, 469 A.2d at 600. We find Carson distinguishable from the instant case because, here, it does not appear elsewhere in the record that appellant understood that he had a right to a unanimous verdict and therefore knowingly and intelligently waived that right. [3] Because of our disposition of this case, we need not address appellant's remaining contentions. We add only that a new trial is not warranted just because a letter written by appellant's wife, which implicated appellant, was admitted into evidence. Instead, we believe that 42 Pa.C.S.A. § 5913 is inapplicable to a defendant-spouse who is testifying on his or her own behalf even though such testimony has an adverse effect on the other spouse's interests. Here, appellant and his wife were brought to trial as co-defendants on the criminal charge of fraudulently receiving public assistance payments and, during the course of the trial, the wife took the stand in her own defense. Regardless of whether such testimony implicated appellant, we think that she was so entitled to defend herself. See Ebner v. Ewiak, 335 Pa.Superior 372, 484 A.2d 180 (1984). [1] The origin of the privilege was summarized recently by the Supreme Court of the United States in the following manner: The privilege claimed by petitioner has ancient roots. Writing in 1628, Lord Coke observed that "it hath beene resolved by the Justices that a wife cannot be produced either against or for her husband." 1 E. Coke, A Commentarie upon Littleton 6b (1628). See, generally, 8 J. Wigmore, Evidence § 2227 (McNaughton rev. 1961). This spousal disqualification sprang from two canons of medieval jurisprudence: first, the rule that an accused was not permitted to testify in his own behalf because of his interest in the proceeding; second, the concept that husband and wife were one, and that since the woman had no recognized separate legal existence, the husband was that one. From those two now long-abandoned doctrines, it followed that what was inadmissible from the lips of the defendant-husband was also inadmissible from his wife. Despite its medieval origins, this rule of spousal disqualification remained intact in most common-law jurisdictions well into the 19th century. See id., § 2333. It was applied by this Court in Stein v. Bowman, 13 Pet. 209, 220-223, 10 L. Ed. 129 (1839), in Graves v. United States, 150 U.S. 118, 14 S. Ct. 40, 37 L. Ed. 1021 (1893), and again in Jin Fuey Moy v. United States, 254 U.S. 189, 195, 41 S. Ct. 98, 101, 65 L. Ed. 214 (1920), where it was deemed so well established a proposition as to "hardly requir[e] mention." Indeed, it was not until 1933, in Funk v. United States, 290 U.S. 371, 54 S. Ct. 212, 78 L. Ed. 369, that this Court abolished the testimonial disqualification in the federal courts, so as to permit the spouse of a defendant to testify in the defendant's behalf. Funk, however, left undisturbed the rule that either spouse could prevent the other from giving adverse testimony. Id., at 373, 54 S. Ct., at 212. The rule thus evolved into one of privilege rather than one of absolute disqualification. See J. Maguire, Evidence, Common Sense and Common Law 78-92 (1947). Trammel v. United States, 445 U.S. at 44, 100 S. Ct. at 909, 63 L.Ed.2d at 190 (1980). [2] The exceptions to the incompetency rule also are inapplicable to the instant case because this proceeding is not a "criminal proceeding against either for bodily injury or violence attempted" or against the children or "in support of criminal charge of bigamy." 42 Pa.C.S.A. § 5913. Additionally, this case does not involve "a crime committed against a third person when such crime occurs in the same criminal episode as an act of violence committed by the accused upon the spouse." Commonwealth v. Galloway, 271 Pa.Super. 305, 312, 413 A.2d 418, 421 (1979) (emphasis added). Similarly, this case does not present a situation where appellant attacked the character of his wife and where she rebutted the testimony for the Commonwealth. See 42 Pa.C.S.A. § 5915. See generally Cornelius, supra, at 498-502. [3] The Supreme Court of the United States has criticized the breadth of an incompetency rule which absolutely bars the admission of testimony by one spouse against the other when that Court said the following: Its protection is not limited to confidential communications; rather it permits an accused to exclude all adverse spousal testimony. As Jeremy Bentham observed more than a century and a half ago, such a privilege goes far beyond making "every man's house his castle," and permits a person to convert his house into "a den of thieves." 5 Rationale of Judicial Evidence 340 (1827). It "secures, to every man, one safe and unquestionable and every ready accomplice for every imaginable crime." Id., at 338. The ancient foundations for so sweeping a privilege have long since disappeared. Nowhere in the common-law world indeed in any modern society is a woman regarded as chattel or demeaned by denial of a separate legal identity and the dignity associated with recognition as a whole human being. Chip by chip, over the years those archaic notions have been cast aside so that "[n]o longer is the female destined solely for the home and the rearing of the family, and only the male for the marketplace and the world of ideas." Stanton v. Stanton, 421 U.S. 7, 14-15, 95 S. Ct. 1373, 1377-1378, 43 L. Ed. 2d 688 (1975). The contemporary justification for affording an accused such a privilege is also unpersuasive. When one spouse is willing to testify against the other in a criminal proceeding whatever the motivation their relationship is almost certainly in disrepair; there is probable little in the way of marital harmony for the privilege to preserve. In these circumstances, a rule of evidence that permits an accused to prevent adverse spousal testimony seems far more likely to frustrate justice than to foster family peace.[] Indeed, there is reason to believe that vesting the privilege in the accused could actually undermine the marital relationship. For example, in a case such as this the Government is unlikely to offer a wife immunity and lenient treatment if it knows that her husband can prevent her from giving adverse testimony. If the Government is dissuaded from making such an offer, the privilege can have the untoward effect of permitting one spouse to escape justice at the expense of the other. It hardly seems conducive to the preservation of the marital relation to place a wife in jeopardy solely by virtue of her husband's control over her testimony. Our consideration of the foundations for the privilege and its history satisfy us that "reason and experience" no longer justify so sweeping a rule as that found acceptable by the Court in Hawkins. Accordingly, we conclude that the existing rule should be modified so that the witness-spouse alone has a privilege to refuse to testify adversely; the witness may be neither compelled to testify nor foreclosed from testifying. This modification vesting the privilege in the witness-spouse furthers the important public interest in marital harmony without unduly burdening legitimate law enforcement needs. [*] It is argued that abolishing the privilege will permit the Government to come between husband and wife, pitting one against the other. That, too, misses the mark. Neither Hawkins, nor any other privilege, prevents the Government from enlisting one spouse to give information concerning the other or to aid in the other's apprehension. It is only the spouse's testimony in the courtroom that is prohibited. Trammel v. United States, 445 U.S. at 52, 100 S. Ct. at 913-914.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265740/	163 Cal. App. 4th 826 (2008) PUEBLO RADIOLOGY MEDICAL GROUP, INC., Plaintiff and Appellant, v. J. DALTON GERLACH et al., Defendants and Respondents. No. B194106. Court of Appeals of California, Second District, Division Six. June 4, 2008. 827 McCarthy & Kroes, R. Chris Kroes and Scott London for Plaintiff and Appellant. Fell, Marking, Abkin, Montgomery, Granet & Raney, Craig S. Granet and Jennifer Gillon Duffy for Defendants and Respondents. OPINION PERREN, J. Appellant Pueblo Radiology Medical Group, Inc. (Pueblo), filed a breach of contract action against Vitascan, Inc. (Vitascan), and respondents J. Dalton Gerlach (Gerlach) and Daniel Parker (Parker). The allegations against Gerlach and Parker were that they were the alter egos of Vitascan. The trial court found they were not and judgment was entered accordingly, including an award of attorney fees to them under Civil Code section 1717.[1] Pueblo asserts the award of fees was premature because there has been no determination of whether a breach of contract occurred. We disagree. The action was on the contract. The trial court's finding that Gerlach and Parker were not personally liable was a favorable termination of the case as to each of them as individuals. Accordingly, we affirm. FACTUAL AND PROCEDURAL HISTORY Pueblo entered into a contract with Vitascan to provide interpretation services of imaging scans from the Vitascan mobile Imatron electron beam tomography scanner. Gerlach signed the contract on behalf of Vitascan. Gerlach was Vitascan's president, and Parker was Vitascan's secretary. Gerlach and Parker were the sole shareholders. The contract was for the period from June 1, 2001, to December 30, 2003. The contract contained an attorney fee clause as follows: "If litigation or 828 arbitration shall be required to enforce this Agreement or address any dispute arising hereunder, the prevailing party, as determined by the court or arbitrator in the matter, shall be entitled to court or arbitration costs and reasonable attorneys' fees from the other party(ies)." In mid-March 2002, Vitascan advised Pueblo that its services were no longer needed. In June 2002, Pueblo filed a complaint for damages for breach of contract, common counts and an accounting, naming Vitascan, Gerlach and Parker as defendants. The complaint alleged that Gerlach and Parker were the alter egos of Vitascan. Vitascan ceased operations in September 2003 and filed for bankruptcy in March 2004. On July 13, 2004, Gerlach and Parker filed a motion to bifurcate the breach of contract claim from the alter ego issue. Pueblo opposed the motion. The trial court granted the motion and heard the alter ego issue first. On March 16, 2006, after a 15-day bench trial, the court issued a 54-page statement of decision finding in favor of Gerlach and Parker on the alter ego issue. Subsequently, the court granted their motion for attorney fees under section 1717 in the amount of $250,000. On appeal, Pueblo does not challenge the trial court's finding on the alter ego issue; its sole argument is that the trial court's award of attorney fees was premature because the breach of contract issue had not been decided. DISCUSSION We review a determination of the legal basis for an award of attorney fees de novo as a question of law. (Dell Merk, Inc. v. Franzia (2005) 132 Cal. App. 4th 443, 450 [33 Cal. Rptr. 3d 694].) Section 1717, subdivision (a) states in part: "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." Both sides rely upon Reynolds Metals Co. v. Alperson (1979) 25 Cal. 3d 124 [158 Cal. Rptr. 1, 599 P.2d 83] as dispositive. We agree but conclude that Gerlach and Parker had the better argument and that the attorney fee award was not premature. In Reynolds, the plaintiff brought an action against two shareholders and directors of two bankrupt corporations seeking to hold them personally liable on an alter ego theory for debts the corporation owed. One 829 of the claims was based on promissory notes which included a provision for attorney fees. The individual defendants, however, had not signed the notes. They prevailed and sought attorney fees. Our Supreme Court held the defendants were entitled to fees under the reciprocity provision of section 1717. The court reasoned: "Had plaintiff prevailed on its cause of action claiming defendants were in fact the alter egos of the corporation [citation], defendants would have been liable on the notes. Since they would have been liable for attorney's fees pursuant to the fees provision had plaintiff prevailed, they may recover attorney's fees pursuant to section 1717 now that they have prevailed." (Reynolds Metals Co., at p. 129.) Pueblo contends that Reynolds is distinguishable because attorney fees were awarded only after the breach of contract claim was decided and the plaintiff was found to be liable. We disagree. The award of attorney fees under section 1717 was proper. The Supreme Court said, "Had plaintiff prevailed on its cause of action claiming defendants were in fact the alter egos of the corporation [citation], defendants would have been liable on the notes." (Reynolds Metals Co. v. Alperson, supra, 25 Cal. 3d 124, 129, italics added.) The fact that the breach of contract claim and alter ego issue were tried together is irrelevant. The determinative fact was that the individual defendants had prevailed on the alter ego issue. (Id. at p. 127 ["After lengthy trial, the court rejected the `alter ego' theory advanced by plaintiff, absolving defendants from personal liability for the obligations of [the corporations]" and "granted defendants $80,500 in attorney's fees"].) The trial court's determination that respondents were not the alter egos of the corporation effectively ended the case as to them. They were entitled to recover attorney fees under the contract.[2] (1)The award of attorney fees in Reynolds is an application of the accepted rule that attorney fees may be awarded to a defendant when a final determination has been made in the defendant's favor. (See, e.g., First Security Bank of Cal. v. Paquet (2002) 98 Cal. App. 4th 468, 475 [119 Cal. Rptr. 2d 787] [where an action is final as to defendants in their individual capacities, trial court properly determined they had prevailed in the action for purposes of awarding § 1717 attorney fees].) 830 Pueblo's argument that the court erred by failing to apportion attorney fees between the contract and non-contract claims disregards the fact that the alter ego issue was essential to its claim. It could not reach the contract claim against respondents without piercing the corporate veil. The claim of "alter ego" was a step directly implicated in the contract action. Had it prevailed on this claim, the ensuing litigation on the contract would unquestionably have entitled the prevailing party to attorney fees, a fact conceded by Pueblo at oral argument. The mere fact that for judicial economy the alter ego issue was bifurcated in no way alters the nature of the action. The judgment is affirmed. Respondents shall recover costs and reasonable attorney fees to be decided by the trial court. Gilbert, P. J., and Yegan, J., concurred. NOTES [1] All statutory references are to the Civil Code. [2] Similarly, in Profit Concepts Management, Inc. v. Griffith (2008) 162 Cal. App. 4th 950 [76 Cal. Rptr. 3d 396], Profit sued Griffith, an Oklahoma resident, in California for breach of a contract that included a provision for the award of attorney fees. Griffith's motion to quash service was granted and he was awarded attorney fees under section 1717. Like appellant in the instant matter, Profit contended that there was no prevailing party on the contract. Our colleagues in the Fourth District concluded, however, that the only action before the court was on the contract and that, having succeeded in quashing the summons and being dismissed from the case, Griffith was the prevailing party and was entitled to attorney fees.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265743/	240 P.3d 56 (2010) 237 Or. App. 113 Nancy E. PETOCK, Plaintiff-Appellant, v. ASANTE, fka Asante Health System, dba Rogue Valley Medical Center, a domestic nonprofit corporation, Defendant-Respondent. 081041L7; A141216. Court of Appeals of Oregon. Argued and Submitted January 14, 2010. Decided September 1, 2010. 57 Craig A. Crispin, Portland, argued the cause and filed the briefs for appellant. Robyn Ridler Aoyagi, Portland, argued the cause for respondent. With her on the brief was Tonkon Torp LLP. Before LANDAU, Presiding Judge, and SCHUMAN, Judge, and ORTEGA, Judge. SCHUMAN, J. This case involves the interplay between the "Unlawful Discrimination Against Injured Workers" statutes, ORS 659A.040 to 659A.052, and workers' compensation law. The anti-discrimination statutes require an employer to reinstate or reemploy an injured worker who has recovered from a "compensable injury" if the worker applies within three years from the "date of injury." ORS 659A.043(3)(a)(F) (reinstatement); ORS 659A.046(3)(f) (reemployment). Plaintiff was injured in an accident while working for defendant in 2002, and she was injured by a second accident in 2005, also while employed by defendant. The second injury was processed under workers' compensation law as an "aggravation" of the first injury. She 58 applied for reemployment or reinstatement in 2008, within three years of the second accident but not within three years of the first. Defendant refused. The primary issue in this case is whether a compensable aggravation of a prior compensable injury is itself a new injury for purposes of starting a new three-year limitation period. We hold that it is not. That conclusion raises the second issue: whether there is a disputed question in this case as to whether the second event was, in fact, a new injury or an aggravation as processed. We hold that there is such a fact dispute. For that reason, the trial court erred in granting defendant's motion for summary judgment. We reverse and remand. Because the court granted defendant's motion for summary judgment, we view the facts and all reasonable inferences that may be drawn from them in favor of plaintiff, the nonmoving party. Jones v. General Motors Corp., 325 Or. 404, 408, 939 P.2d 608 (1997). In September 2002, plaintiff was working as a dietary aide in a coffee shop at one of defendant's facilities. She injured her right knee at work and had surgery. Her doctor determined that she suffered from "chondrosis of the patellofemoral joint." Afterwards, she was off work for a short time, but she later returned to her position as a dietary aide for defendant. In April 2005, again while working in defendant's coffee shop, plaintiff felt her right knee "pop," followed by severe pain. She was treated at the Medford Medical Clinic. Her doctor, as well as defendant's workers' compensation administrator, recommended to plaintiff that she file a workers' compensation claim for an aggravation of her 2002 injury, and she did so. At that time, plaintiff had not yet been able to see a knee specialist regarding this incident. After filling out the paperwork for her workers' compensation claim, plaintiff was placed on light duty in defendant's medical records office. In September 2005, someone from defendant's human resources department contacted plaintiff in the medical records office and told her to "come down to the workers' compensation office." There, plaintiff was told that the workers' compensation claim had been denied and that plaintiff "should go home." (The denial was subsequently reversed.) The next month, Dr. Versteeg the same knee specialist who had performed the 2002 surgery performed another surgery on plaintiff's knee. Versteeg discovered a tear in plaintiff's medial meniscus, in addition to the preexisting patellofemoral chondrosis. In his deposition, Versteeg explained that he had not seen the meniscus tear in 2002 and that "[i]t would be hard to say for sure that it was related to the original injury." After another month, plaintiff told defendant that her doctor had released her for light duty work, but she was told that she could not return until she obtained a full release. That occurred on January 4, 2006, when plaintiff's doctor lifted all restrictions. At that time, plaintiff asked to be returned to work full time, but she was informed by the human resources department that her job had since been filled and that her only option was to look for another job with defendant. In looking through defendant's "job book," however, plaintiff found that there were no positions for which she was qualified. In March 2008, plaintiff filed this action. Her complaint alleged three claims, two of which are at issue on appeal.[1] In her first claim, plaintiff alleged that defendant "failed and refused to reinstate plaintiff into her former position in violation of ORS 659A.043 * * ." That statute provides, in part: "(1) A worker who has sustained a compensable injury shall be reinstated by the worker's employer to the worker's former position of employment upon demand for such reinstatement, if the position exists and is available and the worker is not disabled from performing the duties of such position. * * "* * * * * "(3) Notwithstanding subsection (1) of this section: 59 "(a) The right to reinstatement to the worker's former position under this section terminates when whichever of the following events first occurs: " * * * * "(F) Three years elapse from the date of injury. "* * * * * "(5) Any violation of this section is an unlawful employment practice." (Emphasis added.) Plaintiff's second claim alleged that defendant "failed and refused to reemploy plaintiff into an available and suitable position in violation of ORS 659A.046 * * ." That statute, much like ORS 659A.043, provides, in part: "(1) A worker who has sustained a compensable injury and is disabled from performing the duties of the worker's former regular employment shall, upon demand, be reemployed by the worker's employer at employment which is available and suitable. " * * * * "(3) Notwithstanding subsection (1) of this section, the right to reemployment under this section terminates when whichever of the following events first occurs: "* * * * * "(f) Three years elapse from the date of injury. "* * * * * "(6) Any violation of this section is an unlawful employment practice." (Emphasis added.) In response to plaintiff's complaint, defendant moved for summary judgment on the ground that plaintiff's rights to reinstatement and reemployment had terminated under ORS 659A.043(3)(a)(F) and ORS 659A.046(3)(f) long before plaintiff made any demand to return to work. Specifically, defendant argued that, for purposes of those statutes, the "date of injury" the starting point for the three-year reinstatement or reemployment period refers to the date of a worker's original compensable injury, not to a later aggravation of that injury. According to defendant, it was "undisputed that [plaintiff's] date of injury occurred in September 2002, more than three years before she allegedly presented [defendant] with a release to return to work * * * or a release for reemployment * * ." Thus, defendant argued, plaintiff's later demands for reinstatement and reemployment were untimely and her resulting claims meritless. The trial court agreed with defendant and granted the motion. On appeal, plaintiff advances two arguments. First, she challenges the trial court's construction of the relevant statutes. According to plaintiff, the term "injury" in the phrase "date of injury" in ORS 659A.043(3)(a)(F) and ORS 659A.046(3)(f) is not limited to the technical meaning of the term "injury" under workers' compensation statutes, which distinguish between an injury and an aggravation. Rather, plaintiff argues that the everyday dictionary definition of "injury" applies. Second, plaintiff argues that, even if the term "injury" does not encompass the aggravation of an original injury, summary judgment was inappropriate because there was, at the very least, a question of fact as to whether the condition for which she received treatment in 2005 was not an aggravation, but a "new injury" namely, a tear of the meniscus that was not present earlier. Because it informs both of plaintiff's arguments, we begin with the question of statutory construction: Can the term "date of injury" in the reinstatement and reemployment statutes refer to the date of aggravation, as plaintiff argues, or does it refer exclusively to the date of the original compensable injury, as the trial court ruled? To answer that question, we examine the statute's text and context, along with any relevant legislative history. State v. Gaines, 346 Or. 160, 171-73, 206 P.3d 1042 (2009). The phrase "date of injury" in ORS 659A.043 and ORS 659A.046, in plaintiff's view, is not "particularly esoteric," so she invites us to construe the phrase in light of the ordinary meaning of the words "date" and "injury." "Date," plaintiff submits, "ordinarily refers to the day, month, year on which some event occurred"; "injury," meanwhile, is "commonly understood to mean `a physical harm or damage.' See Webster's New World Dictionary at 725 (2d College 60 Ed. 1978)." Based on those dictionary definitions, plaintiff concludes, "When the legislature wrote `date of injury' in ORS 659A.043 and 659A.046, it used a perfectly straightforward phrase that would normally be interpreted, `the day, month and year on which the injured worker gets hurt.'" If our task were to read the phrase "date of injury" in isolation, we might be persuaded by plaintiff's reliance on dictionary definitions. But our interpretive method demands more: We must consider statutory context. The timing provisions at issue "[t]hree years elapse from the date of injury" describe when the right to reinstatement or reemployment "terminates." ORS 659A.043(3)(a)(F); ORS 659A.046(3)(f). Those rights i.e., the rights to reinstatement and reemployment are rights that inure to workers who have "sustained a compensable injury." ORS 659A.043(1); ORS 659A.046(1). Read in that context, it is apparent that the "injury" to which ORS 659A.043(3)(a)(F) and ORS 659A.046(3)(f) refer is the "compensable injury" that triggers the right to reinstatement or reemployment under subsection (1) of the respective statutes. That is to say, the "date of injury" refers to the date of the "compensable injury" covered by the statutes. "Compensable injury," of course, has a specialized meaning in Oregon law. The Workers' Compensation Law defines a "compensable injury," in part, as "an accidental injury * * * arising out of and in the course of employment requiring medical services or resulting in disability or death; an injury is accidental if the result is an accident, whether or not due to accidental means, if it is established by medical evidence supported by objective findings * * ." ORS 656.005(7)(a). That same meaning, the Supreme Court has stated, applies to the term "compensable injury" for purposes of reinstatement under ORS 659A.043. Armstrong v. Rogue Federal Credit Union, 328 Or. 154, 159, 969 P.2d 382 (1998) ("As used in ORS 659.415(1) [renumbered as ORS 659A.043], the term `compensable injury' has the same meaning that it has in the Workers' Compensation Law, ORS 656.005(7)(a)."). There is no reason to think that the term means anything different in the context of reemployment under ORS 659A.046, which, for all relevant purposes, is worded identically to the reinstatement statute. The next question is what constitutes a "compensable injury" in the context of an aggravation claim. ORS 656.273 governs an injured worker's right to "additional compensation for worsened conditions resulting from the original injury" known as a "claim for aggravation." That statute provides, in part: "(1) After the last award or arrangement of compensation, an injured worker is entitled to additional compensation for worsened conditions resulting from the original injury. A worsened condition resulting from the original injury is established by medical evidence of an actual worsening of the compensable condition supported by objective findings. However, if the major contributing cause of the worsened condition is an injury not occurring within the course and scope of employment, the worsening is not compensable. A worsened condition is not established by either or both of the following: "(a) The worker's absence from work for any given amount of time as a result of the worker's condition from the original injury; or "(b) Inpatient treatment of the worker at a hospital for the worker's condition from the original injury." The text of ORS 656.273 makes clear that the "compensable injury" for purposes of an aggravation claim is the original injury. The "worsening" of the worker's condition is not a separate "compensable injury," but is instead compensable because of its relation back to the original injury. See Davis v. SAIF, 185 Or.App. 500, 504, 60 P.3d 578 (2002) ("A worker's substantive entitlement to aggravation benefits is thus dependent on the relationship of the worsened condition to the original injury."); see also Dougan v. SAIF, 339 Or. 1, 4, 115 P.3d 242 (2005) (distinguishing between the "first phase" of the workers' compensation process that "begins when the worker is injured and initiates a claim" and the "second phase," or "aggravation period, during which the worker may 61 seek additional benefits for `worsening conditions' resulting from the original injury during a five-year period after the injury"). We made a similar observation regarding the difference between "injury" and "aggravation" in Welliver Welding Works v. Farmen, 133 Or.App. 203, 208, 890 P.2d 429 (1995), albeit in the context of construing a different statute: "It seems unlikely that the legislature would have chosen `at the time of injury' to refer to the time of a claim for aggravation. Employer refers to no place in the statutes at which the legislature ever has referred to a claim for a worsened compensable condition as an `injury.' To the contrary, the statutory provisions concerning claims for aggravation draw a distinction between a `worsened condition' that gives rise to the aggravation claim and the original `injury.' See ORS 656.273. Under the aggravation statute, in fact, there need only be a worsening of the original compensable condition, the material contributing cause of which is the original injury." Further, the aggravation statute actually contains the same phrase "date of injury" that appears in the reinstatement and reemployment statutes: "The claim for aggravation must be filed within five years: "(a) After the first notice of closure made under ORS 656.268 for a disabling claim; or "(b) After the date of injury, provided the claim has been classified as nondisabling for at least one year after the date of acceptance." ORS 656.273(4) (emphasis added). In light of the Supreme Court's statement that the term "compensable injury" has the same meaning under ORS 659A.043 as it does in the workers' compensation law, and in light of a statutory scheme in the workers' compensation law that distinguishes between a "compensable injury" and an "aggravation" of that injury we conclude that the trial court's reading of ORS 659A.043(3)(a)(F) and ORS 659A.046(3)(f) was correct.[2] In the context of an "aggravation claim," the "date of injury" is the date of the original, compensable injury rather than some later date on which the injured worker's condition worsens. That brings us to plaintiff's second argument: The 2005 event that required medical treatment was not an aggravation but a new compensable injury a tear of the meniscus that triggered another three-year period in which she could assert her right to reinstatement or reemployment. Defendant's response is three-fold: that there is no evidence in the record to support the contention that the 2005 event was a compensable injury; that plaintiff is "precluded" from making that argument because the Workers' Compensation Board has already resolved that issue contrary to her position here; and that she is "estopped" from making the claim because she has already benefited from a proceeding in which she characterized the event as an aggravation. At this point, the procedural posture of the case bears emphasis. Defendant moved for summary judgment on the ground that plaintiff's rights to reinstatement and reemployment were time barred. Plaintiff, in opposition to that motion, filed a declaration in which she averred, "I injured my knee again in April 2005 while I was working at [defendant's coffee shop]. While I was walking quickly in my work area, I felt my knee pop. I had severe pain in my knee and up my leg. My doctor and Doug Sabin, the Workers' Compensation Administrator for [defendant], advised me to file a workers' compensation aggravation claim for my injury." Plaintiff also offered the deposition testimony that Versteeg, the surgeon who treated her in 2005, provided for purposes of plaintiff's workers' compensation claim. Versteeg testified in that proceeding that he found a tear of the meniscus that he did not see when he performed an earlier surgery in 2002. He explained, "I didn't see a tear of the meniscus then, so she developed one in the interim. It would be hard to say for sure that it was related to the original [2002] injury." Later, 62 Versteeg stated, "And then the most recent finding was she did have a low tear in the medial meniscus, but I am going to have to say that that was probably not related [to the 2002 injury] because I didn't note it the first time." The summary judgment record, then, contains plaintiff's declaration that she "felt [her] knee pop" when she was "walking quickly in [her] work area," and that she then had "severe pain" in her knee and leg. The record also contains Versteeg's testimony from the workers' compensation proceedings that claimant's meniscus tear in 2005 might not have been related to the 2002 injury. Viewing plaintiff's averments and Versteeg's testimony in the light most favorable to plaintiff, a factfinder reasonably could conclude that plaintiff suffered a compensable workplace injury that is, an "accidental injury * * arising out of and in the course of employment requiring medical services," ORS 656.005(7)(a) when she tore her meniscus in 2005. See Armstrong, 328 Or. at 162, 969 P.2d 382 (An injured worker need not prove the existence of a compensable injury as part of a workers' compensation proceeding in order to bring a claim for reinstatement; the worker may "prove that the injury was a compensable injury in the unlawful employment practice proceeding." (Emphasis in original.)).[3] The remaining question, then, is whether plaintiff is "precluded" or "estopped" from advancing such an argument. Because issue preclusion rests upon the principle that an issue was actually litigated in an earlier proceeding and was necessary to the outcome of that proceeding, the party asserting issue preclusion "bears the responsibility of placing into evidence the prior judgment and sufficient portions of the record, including the pleadings, exhibits, and reporter's transcript of the testimony and proceedings, to enable the court to reach that conclusion with the requisite degree of certainty." State Farm v. Century Home, 275 Or. 97, 104, 550 P.2d 1185 (1976); accord Najjar v. Safeway, Inc., 203 Or.App. 486, 497, 125 P.3d 807 (2005). Defendant has not carried that burden here. Apart from plaintiff's applications for benefits and a few pages of transcript from Versteeg's deposition, the summary judgment record does not contain any record of proceedings before the Workers' Compensation Board; indeed, the record does not even contain the board's order. From what we can discern from the summary judgment record, the board may not have been presented with the need to determine whether plaintiff's 2005 event was a new injury as opposed to an aggravation, because quite possibly plaintiff never applied for new injury benefits. In other words, the issue in this trial was whether plaintiff's condition was more properly characterized as an aggravation or a new injury, while the issue before the Workers' Compensation Board may well have been only whether plaintiff's condition was related to her 2002 injury so as to justify compensation. Those issues are not the same. Further, without the record before the board, we do not know that tribunal's reasoning, so we cannot determine whether a resolution of the issue in this case was essential to a final decision on the merits at the board level. It may well be that some prior decision of the Workers' Compensation Board has decided the issues in this case, but in the absence of a record of those administrative proceedings, we have no way to determine whether that is so. Defendant's judicial estoppel argument suffers the same infirmity, and others as well. "Parties invoke judicial estoppel `under certain circumstances to preclude a party from assuming a position in a judicial proceeding that is inconsistent with the position that the same party has successfully asserted in a different judicial proceeding.' Hampton Tree Farms, Inc. v. Jewett, 320 Or. 599, 609, 892 P.2d 683 (1995). Judicial estoppel is `primarily concerned with the integrity of the judicial process and not *63 with the relationship of the parties[.]' [Id.] at 612 [892 P.2d 683] (emphasis added)." Day v. Advanced M & D Sales, Inc., 336 Or. 511, 524, 86 P.3d 678 (2004). Assuming the doctrine could otherwise be invoked here, the summary judgment record is not sufficient to demonstrate, as a matter of law, that plaintiff took an inconsistent position in a prior proceeding. Judicial estoppel is an affirmative defense, Hampton Tree Farms, Inc., 320 Or. at 611, 892 P.2d 683, and the absence of a record regarding the prior administrative proceedings is fatal to defendant's position at this stage of the case. That is so because we cannot tell what position she took in the prior proceeding. We do know that, in her application for benefits, she characterized her condition as an aggravation, but she averred that she did so on the advice of her doctor and her employer's workers' compensation administrator. We are unwilling to conclude that an employer's workers' compensation officer can advise an employee to categorize a claim one way and employer then argue that she is estopped from characterizing it a different way in a later proceeding and plaintiff's averment raises a fact question as to whether that occurred here. In sum, we agree with the trial court's construction of ORS 659A.043(3)(a)(F) and ORS 659A.046(3)(f). The injured worker's right to reinstatement or reemployment terminates three years after the worker suffers the compensable injury, and not three years after it is aggravated by another incident. However, we disagree with the trial court's conclusion that the summary judgment record is susceptible to only one inference as to whether plaintiff suffered a new compensable injury in 2005. Accordingly, we reverse the trial court's grant of summary judgment and remand for further proceedings. Reversed and remanded. NOTES [1] Plaintiff brought a claim for retaliatory discharge under ORS 659A.040; the trial court denied defendant's motion for summary judgment on that claim, and it is not at issue on appeal. [2] We are not aware of any helpful legislative history on the question before us. [3] Defendant argues that Versteeg never affirmatively testified that plaintiff's meniscus tear resulted in major part from the 2005 incident; rather, he testified that he could not determine whether it resulted from the 2002 incident or from the ageing process. Versteeg's testimony, which he himself characterized as "evasive," could support the inference that defendant draws, but that is not a necessary inference.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2265744/	163 Cal. App. 4th 91 (2008) JANE GUARDADO, a Minor, etc., Petitioner, v. THE SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; MARIPOSA GARDENS et al., Real Parties in Interest. No. B201147. Court of Appeals of California, Second District, Division Eight. May 22, 2008. 93 Carpenter & Zuckerman and John C. Carpenter for Petitioner. No appearance for Respondent. Dickstein Shapiro, James Turken; Cole Pedroza, Curtis A. Cole and Matthew S. Levinson for Real Party in Interest Max Webb. OPINION FLIER, J. Code of Civil Procedure section 170.6 (hereafter section 170.6) empowers a party to assert a peremptory challenge to a judge upon the filing of an affidavit by the party's attorney. Subdivision (a)(2) of section 170.6 provides in pertinent part: "The fact that a judge, court commissioner, or referee has presided at or acted in connection with a pretrial conference or other hearing, proceeding, or motion prior to trial and not involving a determination of contested fact issues relating to the merits shall not preclude the later making of the motion provided for herein at the time and in the manner hereinbefore provided." (Italics added.) The question presented in this case is whether a ruling under Civil Code section 3295, subdivision (c) (hereafter section 3295(c)) that a plaintiff has demonstrated a substantial probability that he or she will prevail on a claim for punitive damages is a "determination of contested fact issues relating to the merits" under section 170.6, subdivision (a)(2). We conclude that it is not such a determination. FACTUAL AND PROCEDURAL BACKGROUND Jane Guardado, a minor, hereafter referred to as petitioner, lived with her mother and stepfather, Rena and Abraham Islam, in an apartment building located in Los Angeles. The building was owned by Mariposa Gardens, a limited partnership (Mariposa). Shapell & Webb, LLC, which was established in 2004, appears to be Mariposa's general partner. 94 In October 2004, petitioner sued Mariposa for personal injuries resulting from the behavior of the apartment building's manager. Petitioner named Shapell & Webb in lieu of a Doe defendant in December 2005. In June 2007, petitioner moved for an order authorizing her to conduct pretrial punitive damages discovery under section 3295(c). Section 3295(c) bars discovery regarding punitive damages unless the court enters an order permitting such discovery. On July 12, 2007, Judge Soussan G. Bruguera granted petitioner's motion, finding there was a substantial probability petitioner would prevail on her claim for punitive damages. On July 17, 2007, real party in interest Max Webb (hereafter Webb), whom petitioner had named as an individual in lieu of a Doe defendant on May 17, 2007, filed a peremptory challenge to Judge Bruguera pursuant to section 170.6. Webb's peremptory challenge was his first appearance in the action. Section 170.6, subdivision (a)(2) provides that a party who has not appeared in an action at the time the case is assigned to a particular judge must assert a challenge under section 170.6 within 10 days of his or her first appearance. Thus, Webb's challenge was timely. Petitioner opposed the challenge and requested a hearing. She argued the challenge was precluded because it was filed after Judge Bruguera had made her ruling on the section 3295(c) motion to conduct pretrial punitive damages discovery. Petitioner characterized this ruling as a determination of "contested fact issues relating to the merits." (§ 170.6, subd. (a)(2).) Petitioner alternatively argued the challenge was barred because Mariposa had earlier lost its right to file a peremptory challenge by not filing one within the allotted time, and Webb, an alleged partner of Mariposa, was not entitled now to file a separate peremptory challenge on his own behalf. Webb replied to petitioner's opposition, contending that a ruling under section 3295(c) is a discovery ruling and not a determination of a contested fact issue relating to the merits. He also submitted a declaration stating he was not and had never been a partner of Mariposa. Judge Bruguera conducted a hearing on the section 170.6 challenge on July 30, 2007. On the day of the hearing, petitioner filed an additional opposition and declaration, changing her theory and now contending Webb was a partner of Mariposa, not directly but because he was allegedly a partner in a general partnership called Shapell & Webb, which was apparently a partner of Mariposa at the time of the alleged tort in 1999. After conducting the hearing and considering oral argument, Judge Bruguera indicated she never intended the "substantial probability" determination under section 3295(c) to be a determination relating to the merits. She 95 also concluded petitioner's argument that Webb was not a separate party from Mariposa was unavailing and specifically found Webb's peremptory challenge to be timely and proper. She thus accepted the challenge and transferred the case to another judge. Petitioner filed a petition for writ of mandate arguing Judge Bruguera erred in accepting the peremptory challenge. We summarily denied the petition because we concluded Webb's peremptory challenge was timely and not otherwise precluded. The Supreme Court granted petitioner's petition for review and transferred the case back to us with directions that we issue an order to show cause and a decision on the merits. After receiving further briefing[1] and hearing oral argument, we again conclude Webb's peremptory challenge was timely and proper, and therefore deny petitioner's writ petition.[2] DISCUSSION 1. A Determination Under Section 3295(c) Is Not a "Determination of Contested Fact Issues Relating to the Merits" We first outline the procedure set forth in section 3295(c). (1) A plaintiff seeking pretrial discovery of the profits gained by the defendant by virtue of the latter's wrongful conduct and discovery of the financial condition of the defendant must file a motion supported by "appropriate affidavits." (§ 3295(c).)[3] If the court deems a hearing necessary, "the 96 court may at any time enter an order permitting the discovery otherwise prohibited by this subdivision if the court finds, on the basis of the supporting and opposing affidavits presented, that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294." (§ 3295(c).) Importantly, the foregoing is immediately followed by the following provision in section 3295(c): "Such order shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial." We will refer to this sentence as the "no merit" provision of section 3295(c).[4] The first question is whether the no merit provision of section 3295(c) is identical to or different from the phrase "a determination of contested fact issues relating to the merits" that is found in section 170.6. We will refer to this sometimes as the parallel provision of section 170.6. We conclude that the no merit provision of section 3295(c) is broader in application than the parallel provision found in section 170.6 and includes the scenario envisaged by the parallel provision. Both provisions refer to a determination on the "merits," but the parallel provision is limited to factual determinations. (2) "Merits" cannot mean different things in these two sections; both sections mean to describe by this word the same thing or event, albeit from different perspectives. In section 3295(c), the judge's decision that there is a probability of success should not affect the actual decision on the merits. In section 170.6, the intent is to ensure that a challenge is made before the judge acts on the merits of the case. That is, under both section 3295(c) and section 170.6, the decision rendered is separated from the merits of the case. We have taken into account that the no merit provision of section 3295(c) refers to a determination "on the merits" while the parallel provision refers to a "determination ... relating to the merits." There may be a theoretical distinction between "on the merits" and "relating to the merits." Whatever that distinction is, it makes no difference since the central idea in both settings is that the decisions made under these two provisions do not implicate, touch upon, or involve the merits of the controversy. 97 We conclude that the word "merits" means one and the same thing in both sections 3295(c) and 170.6. The second question is whether we are bound by the text of section 3295(c) when deciding whether a finding under section 3295(c) that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the punitive damage claim is, under, section 170.6, "a determination of contested fact issues relating to the merits." In other words, does the legislative determination that a decision under section 3295(c) is not "on the merits" require us to find that a decision under section 3295(c) is not "on the merits" for the purposes of section 170.6? We conclude that while, as a court, we have the power to construe the two uses of "merits" differently, neither the plain meaning of these sections nor a sensible interpretation would support such a construction. (3) We have already pointed out that the phrase and concept "on the merits" is clear and unambiguous. "When statutory language is clear and unambiguous, there is no need for construction. The plain language of the statute controls." (People v. Johnson (2007) 150 Cal. App. 4th 1467, 1481 [59 Cal. Rptr. 3d 405].) A statute should be given a reasonable and commonsense interpretation. (7 Witkin, Summary of Cal. Law (10th ed. 2005) Constitutional Law, § 115, p. 220.) It makes sense, and it is reasonable to conclude that a decision that is not on the "merits" for the purpose of section 3295(c) is also not on the "merits" for the purpose of section 170.6. There is the further fact that there is a wide variety of orders that have been held not to constitute determinations of contested facts related to the merits of the case under section 170.6.[5] In other words, the parallel phrase in 98 section 170.6 has not been construed expansively but rather with an eye on limiting it to decisions that are actually on the merits of the case. Relying on Jabro v. Superior Court (2002) 95 Cal. App. 4th 754 [115 Cal. Rptr. 2d 843] (Jabro), petitioner argues a substantial probability decision under section 3295(c) requires the weighing of evidence and therefore such a decision is necessarily a determination of contested fact issues relating to the merits. We do not agree. In Jabro, without considering the opposing party's evidence, the trial court granted a section 3295(c) motion after concluding the plaintiff had made a prima facie showing on his claim for punitive damages, and did so without considering the opposing party's evidence. The appellate court held that before a court allows discovery under section 3295(c) it must (1) "weigh" the evidence submitted in support of and opposition to the motion, and (2) find the plaintiff is very likely to prevail on his claim for punitive damages. (Jabro, supra, 95 Cal.App.4th at p. 758.) While the court did hold that the trial court must "weigh" the evidence by considering the evidence presented by both sides, it did not conclude that the court must (or will) resolve or determine contested issues of fact as to the merits of the claim. To the contrary, the court concluded that "section 3295(c) concerns a defendant's right to privacy and protection from being forced to settle unmeritorious lawsuits in order to protect this right. It is a discovery statute and does not implicate the traditional factfinding process or the right to a jury trial in any way. Indeed, section 3295(c) expressly states that an order thereunder `shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial.' [Citation.]" (Jabro, supra, 95 Cal.App.4th at p. 759.) We add to this the observation that it is precisely and immediately after setting forth the procedure under section 3295(c) (which the Jabro court enforced) that section 3295(c) goes on to set forth what we have called the no merit provision. In other words, it is quite clear that weighing evidence presented pro and con on a section 3295(c) motion does not mean that the merits of the case are implicated. Petitioner further argues that a finding under section 3295(c) is similar to a decision on a motion for a preliminary injunction, which at least one court has held precludes a subsequent peremptory challenge. (Pacific etc. Conference of United Methodist Church v. Superior Court (1978) 82 Cal. App. 3d 72, 80 [147 Cal. Rptr. 44] (Pacific).) While it is true that Pacific 99 so holds, this holding is not supported by any authority or analysis. In fact, it is directly contradicted by Continental Baking Co. v. Katz (1968) 68 Cal. 2d 512, 528 [67 Cal. Rptr. 761, 439 P.2d 889] (Continental Baking), a case which Pacific cites, although for a different proposition.[6]Continental Baking states: "`The granting or denial of a preliminary injunction does not amount to an adjudication of the ultimate rights in controversy. It merely determines that the court, balancing the respective equities of the parties, concludes that, pending a trial on the merits, the defendant should or that he should not be restrained from exercising the right claimed by him.' [Citations.] The general purpose of such an injunction is the preservation of the status quo until a final determination of the merits of the action." (Continental Baking, supra, at p. 528.) We are bound to follow our Supreme Court's decision in Continental Baking. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal. 2d 450, 455 [20 Cal. Rptr. 321, 369 P.2d 937].) (4) We hold that a determination under section 3295(c) is not a "determination of contested fact issues relating to the merits" under section 170.6. Webb's peremptory challenge was therefore not precluded. 2. Webb Could Assert a Section 170.6 Challenge Even If Mariposa Did Not File One Petitioner contends that because Webb was a partner in a partnership that was a partner in Mariposa, he is not a separate entity from Mariposa. It follows from this, according to petitioner, that since Mariposa did not assert a challenge under section 170.6, Webb is precluded from making a section 170.6 challenge. (5) If Webb and Mariposa were one and the same entity, there would have been no need to serve Webb individually. But of course they are not. While for some purposes there is an identity of interest between a partner and the partnership in which he is a partner, it is axiomatic that an individual is a different entity from a partnership in which he is not a partner. It is of course possible that Webb may be in privity with Mariposa for some purposes. But this does not mean that Webb and Mariposa are identical entities. 100 DISPOSITION The petition for writ of mandate is denied and the order to show cause is discharged. Webb is to recover his costs in this writ proceeding. Cooper, P. J., and Rubin, J., concurred. NOTES [1] Petitioner has filed motions to augment her appendix of exhibits to include pleadings and a minute order that are dated after the trial court ruled on Webb's peremptory challenge on July 30, 2007. Not only is augmentation of the record a procedure on appeal (Cal. Rules of Court, rule 8.155), not in writ proceedings (Cal. Rules of Court, rule 8.490(c)), but as noted these exhibits arose after the trial court's ruling in this case and thus were not considered by that court in making the challenged ruling. (See BGJ Associates v. Superior Court (1999) 75 Cal. App. 4th 952, 958 [89 Cal. Rptr. 2d 693]; Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal. 4th 434, 444 [58 Cal. Rptr. 2d 899, 926 P.2d 1085].) Accordingly, the motion to augment is denied. [2] Almost one month after we heard oral argument and the case was submitted, petitioner filed a motion asking us to dismiss the writ proceeding because she now wanted to proceed to trial without delay. Petitioner never gave any indication of her inclination to voluntarily dismiss her petition until long after this court had invested substantial time and limited resources reviewing and deciding the case on the merits. Accordingly, and because the matter is of general importance, petitioner's request for dismissal is denied. (See Arden Group v. Burk (1996) 45 Cal. App. 4th 1409, 1411, fn. 1 [53 Cal. Rptr. 2d 492].) [3] In relevant part, Civil Code section 3295 provides: "(a) The court may, for good cause, grant any defendant a protective order requiring the plaintiff to produce evidence of a prima facie case of liability for damages pursuant to Section 3294, prior to the introduction of evidence of: [¶] (1) The profits the defendant has gained by virtue of the wrongful course of conduct of the nature and type shown by the evidence. [¶] (2) The financial condition of the defendant." [4] Webb asks that we take judicial notice of a document contained in the legislative materials of section 3295(c). We deny this request as unnecessary. (See Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 45-46, fn. 9 [77 Cal. Rptr. 2d 709, 960 P.2d 513].) [5] Examples are: (1) demurrers (Fight for the Rams v. Superior Court (1996) 41 Cal. App. 4th 953, 957 [48 Cal. Rptr. 2d 851]; Zdonek v. Superior Court (1974) 38 Cal. App. 3d 849, 852 [113 Cal. Rptr. 669]); (2) judgment on the pleadings (Hospital Council of Northern Cal. v. Superior Court (1973) 30 Cal. App. 3d 331, 337 [106 Cal. Rptr. 247]); (3) summary judgment (Bambula v. Superior Court (1985) 174 Cal. App. 3d 653, 657 [220 Cal. Rptr. 223]); (4) an ex parte order on a temporary restraining order (Landmark Holding Group, Inc. v. Superior Court (1987) 193 Cal. App. 3d 525, 528 [238 Cal. Rptr. 475]); (5) motions for a continuance (Los Angeles County Dept. of Pub. Social Services v. Superior Court (1977) 69 Cal. App. 3d 407, 417 [138 Cal. Rptr. 43]); (6) motions to amend an information (People v. Hunter (1977) 71 Cal. App. 3d 634, 638 [139 Cal. Rptr. 560]); (7) motions to quash on the ground of lack of personal jurisdiction (School Dist. of Okaloosa County v. Superior Court (1997) 58 Cal. App. 4th 1126, 1133-1134 [68 Cal. Rptr. 2d 612] [holding motion did not bar peremptory challenge even though it involved disputed fact issues because the issues were not related to the merits of the case]); (8) protective orders (Fight for the Rams, supra, at p. 958); and (9) determinations under Penal Code section 995 analyzing the sufficiency of probable cause to hold a criminal defendant for trial (Barrett v. Superior Court (1999) 77 Cal. App. 4th 1, 5-6 [91 Cal. Rptr. 2d 116]; Kohn v. Superior Court (1966) 239 Cal. App. 2d 428, 431 [48 Cal. Rptr. 832]). [6] "The hearing on the motion for preliminary injunction, involving as it does an assessment of the likelihood that plaintiffs would prevail at trial (see, e.g., Continental Baking[,supra,] 68 Cal. 2d 512, 528 ...), requires a determination of such issues and thus precludes a later section 170.6 motion." (Pacific, supra, 82 Cal.App.3d at p. 80.)	01-03-2023	10-30-2013

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