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What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
AINSWORTH, Circuit Judge:
This is a patent infringement suit by Joseph K. McCutchen, plaintiff, against The Singer Company and Kingston Mills, Inc., defendants, involving plaintiff’s United States Patent No. 2,879,728. From the judgment of the district court (sitting without a jury), plaintiff has appealed and defendants have cross appealed.
McCutchen’s patent application for a tufting machine and method was filed January 26, 1956, and granted on March 31, 1959, containing fourteen separate claims. Plaintiff’s invention describes a machine which “can produce severed or unsevered loops with any or all of its multiple needles, the arrangement being such that certain needles which have previously sewed severed loops into the fabric base may be caused during the continued operation of the machine to produce unsevered loops, and vice versa”.
Plaintiff contends that at the time of his invention “there was no machine which would effectively produce both cut pile and uncut pile on a single needle-looper-eutter combination, on one pass of the base fabric through the machine.” The tufting machines have broad application in the tufted textile industry, especially in the production of tufted carpeting, multiple needle machines now being available of 1,200 to 1,500 needles in a single row able to produce 12 to 15 feet widths with a production of 300 to 350 linear yards per 8-hour shift. Eighty per cent of the total carpet and rug output is now on tufted machines.
Plaintiff further contends that the “broadest aspect” of his invention is “in his discovery that an uncut loop could be effectively removed from the free end of a looper facing in the direction opposite to that of the fabric feed through the machine, thus enabling the traditional machine for producing cut pile to be adapted also for production of uncut pile, the same looper performing both functions without change of direction and without removal, adjustment or discontinuance of the cutting device.” Thus plaintiff states that he has invented a machine which enables “a base fabric, in one pass through a single machine to have all cut pile on its underside or to have all uncut pile or to have interspersed rows of both or to have intermittent cut and uncut pile in a single row of tufting, and by the attachment of any traditional patterning device, * * * to produce areas of cut and uncut loops in the base fabric, on one pass through the machine, to form a predetermined pattern or design by the contrast of such areas.”
In his suit plaintiff avers that two machines of defendant Singer, known as Form 1 and Form 2, infringe his patent. Defendants deny all claims made by plaintiff, including that of infringement, and assert the invalidity of McCutchen’s patent. They concede, however, that if any of the fourteen claims in McCutchen’s patent is valid, the Form 1 machine infringes. Plaintiff’s contention is that his invention is an improvement over the prior art and that heretofore separate machines were necessary to produce cut pile and uncut pile. Tufting is done by the use of converted sewing machines where the bobbin has been removed and a new shaft under the bedplate of the machine added to which is attached a hook or looper in place of the bobbin. An oscillating needle carries the yam down through the fabric where it is held by the looper as the needle makes an upward stroke. Cut pile is the result of the clipping of the loops so produced and loop pile results from loops which are uncut. Plaintiff’s invention by a separately mounted finger or pusher engages and removes loops upon the looper when uncut pile is desired and can be inactivated so as to permit the loops to reach the cutter and produce cut pile.
The issues in this case have been severely limited by the parties themselves by stipulation. They are whether defendant Singer’s Form 1 machine infringes plaintiff’s patent, which it is conceded will be true if any one of the fourteen claims of the McCutchen patent is valid; and whether defendant Singer’s Form 2 machine infringes Claims 1, 2 and 3 of plaintiff’s patent.
The district judge held that defendant Singer’s Form 1 machine infringed plaintiff’s patent but also found that Claims 1 and 10 of plaintiff’s patent were invalid. However, the district judge held that there was no infringement of plaintiff’s patent by defendant Singer’s Form 2 machine.
INVALIDITY OF McCUTCHEN’S PATENT
Defendants contend that all of the fourteen claims in plaintiff’s patent are invalid. They state that the McCutchen patent is an obvious and anticipated combination of old elements and refer to the prior art patents of Gladish, No. 1,907,-292, dated May 2, 1933; Behrens, No. 2,513,261, dated June 27,1950; and Hoe-selbarth, No. 2,882,845, dated April 21, 1959, but application was filed on July 5, 1955, prior to McCutchen; and to the invention of George Dedmon, also said to be prior art, in support of their contention. Defendants maintain that all that Mc-Cutchen did was to take a conventional prior art cut pile tufting machine which he purchased from defendant Singer’s predecessor and mount an attachment consisting of finger elements adjacent to the loopers to engage the loops on the loopers and push them off before they can be severed by the cutters. Defendants assert that machines for making both loop and cut pile fabric with the same needle during a single pass of the fabric are disclosed in the prior art patents of Gladish and Hoeselbarth; that the prior art Behrens patent discloses a finger element used to push loops off the looper in a tufting machine. Finally, defendants contend that a combination of all these so-called old elements is found in Dedmon’s machine which they say is earlier than plaintiff’s invention.
The trial judge did not agree with the several defense contentions. He concluded that Gladish (unlike McCutchen) used certain grouper arms in lieu of a finger, with the looper facing at an angle to the direction of movement of the fabric, and that the Gladish, Hoeselbarth and Behrens patents had never attained commercial success.
The district court held that plaintiff’s device showed “inventive genius” in that “at all times the looper in question faces in a direction opposite to that from which the fabric is moving, and * * * provides for a ‘finger’ or ‘pusher’ which, when uncut loops are desired, will push the loops from the looper, preventing a cutting device from severing the loops.” We are in agreement with the trial court’s findings and conclusions in connection with the prior art. Gladish did not use the finger or pusher device invented by McCutchen and which we believe is an integral part of McCutchen’s invention. Though Behrens’ machine has a looper facing in the opposite direction of the fabric feed for cut pile, and the machine will produce both cut and uncut pile, in order to switch from one to the other the machine must be stopped and the looper in operation removed and replaced by the other. Thus Behrens neither anticipates nor renders obvious Mc-Cutchen’s invention. McCutchen’s patent is earlier than Hoeselbarth’s, the Mc-Cutchen date being March 31, 1959 and Hoeselbarth’s date being April 21, 1959. The two applications were, however, pending before the Patent Office at the same time. We will discuss Dedmon’s device fully hereafter in this opinion.
No interference was suggested by the Patent Office as to any of the prior art patents and, accordingly, Mc-Cutchen’s patent has presumptive validity under the statute. See Samuelson v. Bethlehem Steel Company, 5 Cir., 1963, 323 F.2d 944, 947, cert. denied, 376 U.S. 938, 84 S.Ct. 793, 11 L.Ed.2d 659 (1954); Southern States Equip. Corp. v. USCO Power Equip. Corp., 5 Cir., 1953, 209 F. 2d 111, 118.
The defendants contend that eight of the designated claims of plaintiff, namely, Claims 1, 4, 6, 7, 8,10, 11 and 12, are invalid for failure to include or distinctly recite elements essential to the alleged invention. Thus defendants contend that the McCutchen Patent Claim 1 does not include a cutter to cooperate with the looper for severing loops upon the looper; accordingly, that the machine is incapable of making cut pile and can only make loop pile, which claim is, therefore, in opposition to McCutchen’s patent specifications that the object of the invention is a machine capable of producing both loop and cut pile.
The trial judge agreed with defendants and held Claim 1 invalid for failure to include a cutting device to operate upon the loops while on the looper, which device he found was essential to the operation.
We concur with the trial judge’s conclusion, for if the purpose of the invention was a machine capable of producing both cut and uncut pile in one pass through the machine, failure to include in Claim 1 a device for severing the loops while on the looper was a fundamental omission of an essential claim which cannot be supplied by implication and, therefore, rendered Claim 1 invalid. See Altoona Publix Theatres v. American Tri-Ergon Corp., 294 U.S. 477, 487, 55 S.Ct. 455, 79 L.Ed. 1005 (1935), and cases cited therein, as well as 35 U.S.C. § 101 defining a patentable invention and 35 U.S.C. § 112 requiring that the claims particularly point out and distinctly claim the subject matter of the invention.
Defendants assert that Claims 4, 6, 7, 8, 10, 11 and 12 of the McCutchen patent are invalid because they omit any reference to the direction in which the looper is to face in connection with the fabric feed. Plaintiff agrees with this contention in his reply brief and concedes the invalidity of these claims for that reason.
Defendants rely most strongly on the Dedmon machine for invalidation of the McCutchen patent, averring that Ded-mon antedates McCutchen’s invention and is a prior invention which had not been abandoned, suppressed or coneeal-ed; that Dedmon’s machine embodies all elements of the McCutchen machine and, therefore, is a true anticipation under the patent statute. See 35 U.S.C. §§ 102 (a) and 102(g).
However, the district court found that though the record “is somewhat confused as to the relative dates on which the McCutchen and the Dedmon devices were actually reduced to practice,” McCutchen’s device predated Dedmon’s, and the court further said that he was basing his finding “primarily upon the failure of defense counsel to be more specific as to certain dates, although evidence could have been obtained removing some of this uncertainty.”
The district court then held that Dedmon had concealed his invention and that the evidence showed a clear intent upon the part of Dedmon and his employer to keep it secret. A special room was specifically constructed from which others were excluded where work on the Dedmon device was going on. The room could not be entered without passing through an adjoining room occupied by other persons in the employ of the company and disclosure of the Dedmon device was limited and closely guarded. Thus, by virtue of these and other circumstances which he described, the court ruled that Dedmon concealed his device within the meaning of 35 U.S.C. § 102 (g), and it “cannot be considered as an anticipation to the McCutchen device under the facts of this case.”
In reviewing these findings, they should not be disturbed unless clearly erroneous, that is, unless we have a definite and firm conviction that a mistake has been made. See Rule 52(a), Fed.R.Civ. P.; McAllister v. United States, 348 U.S. 19, 75 S.Ct. 6, 99 L.Ed. 20 (1954); United States v. United States Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746 (1948); Chaney v. City of Galveston, 5 Cir., 1966, 368 F.2d 774.
Whether Dedmon’s machine was known by others in this country before McCutchen’s, or whether McCutchen predated Dedmon, and whether Dedmon concealed his invention, were issues of fact submitted to the district court with numerous witnesses, exhibits, documents and depositions. The evidence was in sharp conflict. Defendants had the burden of proving beyond any reasonable doubt that Dedmon was the first inventor of the device in question and that the patent was invalid. See Foster Cathead Co. v. Hasha, 5 Cir., 1967, 382 F.2d 761; Cameron Iron Works, Inc. v. Stekoll, 5 Cir., 1957, 242 F.2d 17. In view of the numerous witnesses who testified for each side, including the experts, and with the credibility choices which the district judge had to resolve on conflicting evidence, we are unable to say that the trial court’s findings are clearly erroneous or that we are firmly convinced that a mistake has been made.
We hold, therefore, with the district judge that plaintiff’s patent and the claims he has asserted therein are valid except for those heretofore conceded by plaintiff to be invalid and except Claim 1, which was found by the trial judge to be invalid and which finding we also affirm. Thus our holding of validity of plaintiff’s patent necessarily requires a holding that defendant Singer’s Form 1 machine infringes the McCutchen patent.
INFRINGEMENT OF McCUTCHEN’S PATENT
The final question for decision is whether defendant Singer’s Form 2 machine infringes McCutchen’s patent and plaintiff has restricted his charge of infringement to Claims 1, 2 and 3 of his patent. Claims 1, 2 and 3 contain refer-' enees to means to engage and remove certain other loops from the looper, and means (separate from the looper and cutter) for engaging and removing certain other loops from the looper — so the fabric base may contain areas of severed loops and areas of unsevered loops. Plaintiff urges that we give these claims the broadest possible construction relative to the means to engage certain other loops upon the looper and to remove them from the looper; that the language of plaintiff’s patent shows that the drawings and specifications were intended only as a preferred embodiment rather than the only possible embodiment of the invention. They cite Up-Right, Inc. v. Safway Products, Inc., 5 Cir., 1963, 315 F.2d 23, 27, where this court said that “we adhere to the established rule that the patent was not limited to the preferred embodiments shown in the claims or drawings.” The trial court in finding no infringement of the McCutchen patent by the Singer Form 2 machine said that “the novel and critical feature” of the Mc-Cutchen machine “consists of a device known as a ‘finger’ or ‘pusher’ which removes the loops in the yarn from the looper from time to time as the fabric moves along, so as to alternate between cut and uncut loops on the finished product.” The district court then referred to the Singer Form 2 machine which it found also removes the loops from the looper in order to. have cut and uncut loops according to desired design, “but in doing so does not use a ‘finger’ or ‘pusher’, or any device which can be considered as an equivalent thereof.” And the court said it was clear “that the means adopted in plaintiff’s patent, of engaging and removing the loops upon the looper, are not equivalent to the means of doing the same thing contained in defendants’ Form 2 machine (which Consists of a device regulating the speed with which the yarn is fed into the final product).” Claims 1, 2 and 3 refer to means “to engage” other loops upon the looper and to remove them from the looper; also to means separate from the looper and cutter “for engaging” certain other loops upon the looper for removing them in order that there may be areas of severed loops and areas of unsevered loops on the fabric base. Defendants urge that the Singer Form 2 machine employs completely different means separately patented by defendant Singer for removing loops from the looper.
We agree with defendants that there is a substantial difference between the method which the McCutchen and Singer Form 2 machines use in removing loops from the looper so that they will not be severed by the cutter. McCutchen uses a finger or pusher which engages the loops and pushes them off. The Singer Form 2 machine has no such finger or pusher or other device to engage the loops on the looper, but uses an entirely different device on which Singer has a patent, with a mechanism consisting of two feed rolls, a yarn shifting finger, a pattern drum and a solenoid. By virtue of alternate knurled and smooth bands on the feed rolls arranged so that one roll travels at a higher speed than the other, the machine can be set so that it will produce cut or loop pile as desired. When the yarn is in contact with the fast feed roll, more yarn is fed to the tufting needle, thus forming loops which are cut in the normal cut pile operation since the loop stays on the looper and is cut as it enters the cutting areas at the rear of the looper. However, if the yarn is in contact with the slower roll, less yarn is fed to the tufting needle which must draw yarn from the previously formed loop, and the tension thus created causes the loop to slip off the point of the looper, and also causes the loop to be shorter, and hence it is not severed by the cutter. The cut pile is thus quite a bit longer than the looped pile.
The doctrine of equivalents which plaintiff urges in support of his claim of infringement is inapplicable because the two machines perform in entirely different ways and with entirely different mechanisms. The Patent Office must have agreed when it granted Singer a patent on its machine after the McCutchen patent. A patentee who has made only a narrow improvement is restricted to his own improvement and cannot prevent others from making improvements on the prior art if they do not use substantially the same method and novelty. Edwards v. Johnston Formation Testing Corporation, 5 Cir., 1932, 56 F.2d 49; Industrial Instrument Corporation v. Foxboro Company, 5 Cir., 1962, 307 F.2d 783.
Defendant Singer’s patent for its Form 2 machine does not have a means to engage and remove loops from the looper such as the finger or pusher in the Mc-Cutchen patent. The Singer Form 2 machine removes the loops in a completely different manner as a result of the use of a mechanism which provides tension on the yarn itself, causing it to be removed from the looper when uncut pile is desired. Plaintiff erroneously wishes us to hold, in effect, that his patent includes every means for removing loops from the looper in a machine in which the looper is placed opposite the direction of the fabric feed. However, for the accused Singer Form 2 machine to infringe it must perform the same function in substantially the same way to obtain substantially the same result. Up-Right, Inc. v. Safway Products, Inc., 5 Cir., 1953, 315 F.2d 23, 27. As we have already indicated, the methods of the two machines are substantially different.
The Singer Form 2 machine has apparently solved what was a fundamental defect in the McCutchen machine, that is, the problem of re-engagement of loops which had been pushed from the looper by the finger or pusher. Since the Singer Form 2 machine uses no such device but depends on the tension of the yarn strand itself, and since in the unsevered loop operation the loops are somewhat shorter, there is no problem of re-engagement of the loops on the looper.
We are firmly convinced, therefore, that there is no infringement by the Singer Form 2 machine. The claims asserted by plaintiff are much too broad and not justified by the evidence. As the Supreme Court said in Boyden Power-Brake Co. v. Westinghouse, 170 U.S. 537, 18 S.Ct. 707, 723, 42 L.Ed. 1136 (1898), “the alleged infringer must have done something more than reach the same result. He must have reached it by substantially the same or similar means, or the rule that the function of a machine cannot be patented is of no practical value.” The similarity of result accomplished by the McCutchen and Singer Form 2 machines is not sufficient to establish infringement for there must be a real identity of means, operation, and result for McCutchen to prevail. See Foster Cathead Co. v. Hasha, 5 Cir., 1967, 382 F.2d 761.
Affirmed.
. McCutchen is a citizen of Dalton, Georgia; The Singer Company is a New Jersey corporation doing business in Georgia; and Kingston Mills, Inc. is a Georgia corporation and a lessee of one of Singer’s machines said to infringe McCutchen’s patent in this case.
. The quoted portion is from the language of the patent, column 1, lines 38-43.
. The trial judge also said in his written opinion, “Prior to plaintiff’s invention, in order to form on the fabric designs by use of alternating cut and uncut loops, it was necessary to use two different machines, in one of them all of the loops being cut and in the other, all of the loops being uncut, thereby necessitating that the fabric be run through each machine separately. A great saving in time and expense was therefore afforded by the McCutchen patent which required only one trip by the fabric over the throat plate.
“The McCutchen device employs a mechanism whereby the ‘finger’ or ‘pusher’ is activated or rendered inactive in order to give the design intended, but this device is not new.”
. The trial judge said in his opinion, “Plaintiff’s Claim No. 1 (perhaps through inadvertence) does not include a cutting device to operate upon the loops while on the looper, though that device is essential to the operation and therefore, under cases cited by defense counsel, Claim No. 1 is invalid.”
. 35 U.S.C. § 101 provides:
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
. 35 U.S.C. § 112 provides in pertinent part, as follows:
“The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
“The specification .shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention. * * *
“An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.”
. Plaintiff’s reply brief, p. 11:
“Plaintiff does not consider Claims 4, 6, 7, 8, 10, 11 and 12 essential to the protection of his invention, did not rely upon any of them in the court below, believes that defendants’ attack on the particular ground recited is meritorious, and concedes their invalidity.”
. 35 U.S.C. § 102 provides in pertinent part, as follows:
“A person shall be entitled to a patent unless—
(a) the invention was known or used by others in this country, or patented
or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or
* * * * *
(g) before the applicant’s invention thereof the invention was made in this country by another who had not abandoned, suppressed, or concealed it. In determining priority of invention there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.”
. The trial judge set forth a number of specific findings in his opinion which read in pertinent part, as follows:
“The McCutchen device was made in early November, 1955 (Tr. 100), about two weeks before a certain letter was written on November 16, 1955 (Tr. 112, Ex. 6 and Ex. 7). It is true that in 1954 some device was conceived by Dedmon (Tr. 1262-1267). The Dedmon device in its final form, was not completed until some time after Dedmon was employed by Southern Machine Company at its plant at Ft. Oglethorpe, Georgia. Dedmon testifies he went with Southern in June, 1955 (Tr. 1310) and made his device with sixteen needles while there. It was a revised machine following others that he had made a considerable time before. Defendants’ witness Gilbreath said Dedmon came to Southern in early 1955, and that his device was made in the spring of 1955. Dedmon indicates that in June, 1955 he built his device ‘out wider’ with sixteen needles (Tr.
1312). Patent attorney Rommel who prepared application for the Dedmon device did not receive the machine until September 19, 1955 (Tr. 513) and Mr. Gilbreath did not make sketches of the same until October 7, 1955.”
. We are referred in MeOutchen’s reply brief to the Patent Office file history of Dedmon’s application in plaintiff’s Exhibit QQ. This exhibit was not designated nor reproduced for the record by the parties and we do not have it before us. Apparently it is undisputed, however, that Dedmon’s patent application was filed on June 5, 1959, after Mc-Cutchen’s patent applied for on January 25, 1956 was issued on March 31, 1959, and that the Patent Office Board of Appeals affirmed the Examiner’s rejection of all of Dedmon’s claims to priority over McCutchen. Defendants contend, however, that Dedmon’s machine was actually in existence prior to McCutchen’s earliest date.
. See also Union Paper Bag Mach. Co. v. Advance Bag Co., 6 Cir., 1912,194 F. 126.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
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B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM:
This case presents an appeal by the State from a decision of the district court below granting a writ of habeas corpus to Lee Williams, a prisoner incarcerated in the West Virginia State Penitentiary, on grounds that an unduly suggestive pre-trial photographic display occurred and a cross-appeal by the petitioner from an order entered by the district court denying the issuance of the writ of habeas corpus due to alleged suppression of exculpatory evidence by the office of the Kanawha County, West Virginia prosecutor.
On the appeal, we reverse the district court’s order which granted the writ of habeas corpus to Williams concerning the alleged impermissibly suggestive identification of him prior to the state court trial. Accordingly the judgment in Appeal No. 77-1679 is reversed and the case is remanded with directions that the district court enter an order denying the petition for writ of habeas corpus on this ground.
On the cross-appeal, while we hold that we can entertain petitioner’s cross-appeal from the order entered by the district court holding that there was no suppression of exculpatory evidence in the state trial court below, we are nevertheless compelled to reverse the judgment in Appeal No. 77-1711, and remand to the district court for reconsideration concerning exhaustion of available state court remedies on the exculpatory evidence issue.
I.
On December 23,1971, in the early afternoon, Sam Shaar, the proprietor of a small grocery store in the City of Charleston, West Virginia, was sitting by his stove when two negro men came into the store. Mr. Shaar was 78 years old, wore glasses, and was in failing health suffering from bone cancer. A cash register was located at the end of the counter in the store approximately 20 feet away from him.
One of the individuals who came in was tall and the other was short. The short one walked toward the cash register and the tall one walked to a position behind Shaar. One of the two apparently asked for some “t-bones” and Shaar informed them that he did not carry fresh meat. The short individual nearest the cash register then opened it and began taking money out. When Shaar asked him what he was doing the tall individual behind him shot Shaar in the shoulder with a .25 caliber pistol. Shaar fainted.
The individuals fled the scene and almost immediately thereafter the Charleston City Police Department was notified of the shooting and commenced an investigation. Detectives McGinnis and Mahan immediately went to the hospital and questioned Mr. Shaar while he was in the emergency room. According to an “Activity Report” of the Charleston Police Department, dated December 23, 1971, and made a part of the record on this appeal, Detectives Mahan and McGinnis were informed by Shaar that his assailant was a colored male, young, about 6'1" with an orange CPO jacket on, and this was the individual who shot him, but that he did not get any money.
Also mentioned in the Activity Report of December 23,1971, was an eye witness who said she saw a black male run from the scene and cut between her house and another house running eastward. This woman did not testify at the State trial however.
Thereafter, on December 28, 1971, two additional detectives of the Charleston City Police Department, namely Detectives Frye and Leonard filed an additional “Activity Report”. These detectives had gone to the hospital to see Mr. Shaar on December 28, 1971, to see if he could identify some possible suspects in the robbery. The detectives took four pictures with them. Two were of the suspected robbers. All the pictures were of individuals of approximately similar height, build, complexion and race.
At this time, Mr. Shaar identified the petitioner, Lee Williams, as the person who shot him at the time of the armed robbery. Williams was identified as the taller of the two individuals. Shaar also separately identified one Robert Lee Brooks, II, as the individual who went through his cash register. Brooks was identified as the shorter of the two.
II.
Arrest warrants were thereafter prepared for Williams and Brooks. Williams was arrested, indicted, tried and convicted of armed robbery by the then Intermediate Court of Kanawha County, West Virginia. The conviction occurred on May 1, 1972. Williams appealed to the Circuit Court of Kanawha County, but discretionary review was denied. No appeal was taken to the Supreme Court of Appeals of the State of West Virginia.
Thereafter, Williams filed original petitions for a writ of habeas corpus in the Supreme Court of Appeals of the State of West Virginia. Collateral review was denied in March and June of 1976.
Next, Williams filed a petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254 in the United States District Court for the Southern District of West Virginia on October 12, 1976. Following a Report and Recommendation of the United States Magistrate, to whom the matter had been referred, petitioner was given leave to amend and clarify the allegations contained in his pro se petition. Petitioner filed a clarification. As clarified, petitioner essentially alleged:
1. That he was denied due process of law by virtue of the photographic and in-court identification of him by Sam Shaar, the victim of the crime; and
2. That neither he nor his counsel were present at one particular stage of the state court trial which was conducted in the armed robbery case.
The district court issued an order to show cause, and counsel was appointed. An evidentiary hearing was held on December 22, 1976, and the case was fully briefed in the court below.
Following the completion of testimony, the district court awarded the writ of habeas corpus, and ruled in three particulars, as follows:
First. The photographic identification conducted by the detectives in the hospital on December 28, 1971, was impermissibly suggestive leading to a grave likelihood of irreparable misidentification;
Second. The initial Activity Report of December 23, 1971, reflecting the summary of the detectives’ first interview with Mr. Shaar in the hospital constituted exculpatory evidence and it had not been furnished to counsel for the defendant prior to trial. The district court further held that exhaustion of state court remedies was not required concerning the exculpatory evidence issue since its alleged suppression was not discovered until the proceedings leading to the petition for a writ of habeas corpus in federal district court;
Third. The district court held that although the defendant was not present momentarily for a few seconds during his trial, he was actually standing in a doorway adjacent to the courtroom, and his absence for a momentary time period was not prejudicial to him. The state trial judge, when he noted that the defendant was standing in the doorway with his counsel, immediately cut off remarks being made by the prosecutor and the parties were given an adequate opportunity to object to this essentially technical violation of West Virginia law. The district court expressly found that the absence was for not more than a few seconds.
Following the issuance of the writ by the district court, the Warden of the West Virginia State Penitentiary filed a timely notice of appeal.
After the Warden’s notice of appeal was filed the district court reopened the record on the Warden’s oral motion, and the court took additional evidence concerning its second holding that exculpatory evidence had been withheld from the defendant during his state trial. Testimony of the prosecuting attorney for Kanawha County, who was chief trial counsel in the prosecution of the petitioner was taken. The district court then rescinded, in part, its previous order granting the writ of habeas corpus on the exculpatory evidence point.
Thus, the district court concluded that the Kanawha County prosecuting attorney did in fact make his entire file available to trial counsel for the petitioner prior to his state trial which file included the activity report summarizing the December 23, 1971 interview of Mr. Shaar and his initial description of the assailant. Consequently, although the writ was awarded, it was awarded only on grounds relating to the suggestiveness of the photographic identification.
The petitioner cross-appealed from the revised holding of the district court concerning exculpatory evidence. Essentially, petitioner contends that the district court erred in finding that the exculpatory evidence was not in fact withheld. Alternatively, if the district court was correct in concluding that the entire file of the Kanawha County prosecuting attorney was made available to trial counsel for the defendant in state court, then, that attorney is guilty of incompetence because he did not cross-examine Mr. Shaar about the apparent inconsistent descriptions given initially and then at trial or attempt to impeach him through the testimony of the two detectives who elicited the first description of the assailant.
III.
APPEALABILITY — APPEAL NO. 77-1711
A threshold question of appealability is presented in this case. The state filed a timely notice of appeal from the district court order issuing the writ of habeas corpus. Notwithstanding that notice of appeal, and the general rule that the filing of such a notice deprives the district court of jurisdiction to act further in most instances in a case formerly before it, the district court nevertheless.reopened the habeas case for the taking of the additional testimony of the Prosecuting Attorney of Kanawha County concerning the exculpatory evidence issue. Presumably, the motion leading to a reopening of the case was made pursuant to Rule 60(b), Federal Rules of Civil Procedure.
Thereafter, as noted, the district court reversed its previous ruling, denied habeas relief on the exculpatory issue, and the petitioner then noted a cross-appeal.
The first question presented is whether we can even entertain petitioner’s cross-appeal concerning exculpatory evidence in light of the State’s earlier notice of appeal. 7 J. Moore & J. Lucas, Moore’s Federal Practice, § 60.30[2], at 419-24 (2d ed. 1975); 11 C. Wright & A. Miller, Federal Practice and Procedure § 2873 (1973); cf. Rakes v. United States, 163 F.2d 771 (4th Cir. 1947) (interpreting the “newly discovered evidence” rule under F.R.Cr.P. 33).
We hold that on the facts of this particular case, and especially since the appeal was not docketed in this court at the time the district judge reopened the habeas hearing for the taking of additional testimony, that the entertainment of the F.R.C.P. 60(b)(2) motion was appropriate.
Support for our holding is drawn from the recent ruling of the Supreme Court in Standard Oil of California v. United States, 429 U.S. 17, 97 S.Ct. 31-2, 50 L.Ed.2d 21 (1976). To us, the pre-mandate leave to proceed under Rule 60(b)(2) in the district court below upon the facts presented to it is sufficiently analogous to the post mandate appellate leave requirement struck down in Standard Oil to afford proper jurisdiction in the court below to proceed with reopening of the habeas case. We caution, however, that a Rule 60(b)(2) motion is not a procedural vehicle , for an automatic retrial de novo once a party has lost in the district court below and a notice of appeal has been filed. This is especially true when the record does not reflect why the evidence sought to be introduced pursuant to Rule 60(b)(2) was otherwise unavailable at the first hearing.
We hold only, on this record, that the reopening of the suit was not error, and, that the substance of petitioner’s cross-appeal is properly before us.
IV.
EXCULPATORY EVIDENCE — APPEAL NO. 77-1171
Through the diligent efforts of counsel appointed in the district court, petitioner discovered, and asserted in the habeas case below that the first description of his assailant by Mr. Shaar, as contained in the initial Activity Report of December 23, 1971, constituted exculpatory evidence. Counsel for petitioner presented testimony from Williams’ state trial counsel to the effect that he was not furnished with copies of the police report and the police investigation into the shooting of Mr. Shaar nor did he have any idea whether there was any conflict between the information contained in that report and Mr. Shaar’s testimony at trial.
Based upon this testimony, the district court initially concluded that the evidence was exculpatory and had been suppressed.
Thereafter, the motion to reopen, discussed above in Part III of this opinion was filed, and testimony of the Prosecuting Attorney for Kanawha County, who was chief prosecution counsel in the trial of Williams was thereafter taken, and the district judge accordingly reversed his prior holding. He concluded that the evidence, although exculpatory, was not in fact suppressed.
Petitioner countered by arguing alternatively, that if the initial Activity Report was not suppressed, then Williams’ state trial counsel was guilty of ineffective assistance of counsel, and the writ should nevertheless have issued because of counsel’s failure to utilize Shaar’s first description of his assailant for cross-examination and as impeachment material. Presumably Shaar could have been questioned about his comments to the detectives who first investigated the case, and then they could have been called to the stand to testify that Shaar’s trial testimony was inconsistent with this first description of his assailant. See: Marzullo v. Maryland, 561 F.2d 540 (4th Cir. 1977).
On this cross-appeal, petitioner again argues in the alternative as he did in the district court below. We decline to address those issues since the district court also found that exhaustion of state court remedies had not occurred regarding the exculpatory evidence issues. We disagree with the district court that the mere discovery of the issue during the prosecution of a writ of habeas corpus, under 28 U.S.C. § 2254 is alone enough to dispense with the exhaustion requirement.
Petitioner had not alleged, nor was there any showing made in the record in the district court that there was no longer a state court remedy available to Williams or that exhaustion would have been futile for some pther reason. See: e. g., 28 U.S.C. § 2254(b). Upon remand, the district court may allow petitioner to file a second amended petition for a writ of habeas corpus, if he chooses to do so, and in lieu of proceeding to seek collateral review in the state courts, petitioner should be notified of his apparent failure to exhaust his state court remedies. He should be advised that his failure to properly plead justification for such non-exhaustion of state court remedies will result in the dismissal of his petition for a writ of habeas corpus on the exculpatory issues.
V.
THE IDENTIFICATION — APPEAL NO. 77-1679
With the benefit of the trial transcript from the state court trial before it, and with the benefit of live testimony taken during the plenary hearing, the district court principally concluded that based upon the facts presented in the instant appeal: (1) the photographic display of the four possible suspects (including the two who were ultimately identified as the robbers) shown to Mr. Shaar in the hospital on December 28, 1971, was unduly suggestive; and (2) that from the totality of the circumstances presented in the case, there was a very substantial likelihood of irreparable misidentification. See Manson v. Brathwaite, 432 U.S. 98, 97 S.Ct. 2243, 2249, 53 L.Ed.2d 140 (1977), decided after the district court entered its order granting habeas relief on the identification issue.
While we are solicitous of the careful analysis made by the district judge concerning the facts presented to him, we disagree that the photographic identification was unduly suggestive. Consequently, we need not look to whether or not the totality of the circumstances gave rise to a substantial likelihood of irreparable misidentification. On that point, while the testimony of Sam Shaar is indeed weak, it was sufficient to be admissible, and thereafter its weight was for the jury. We perceive no due process violation.
The district court predicated its finding of suggestiveness upon certain key facts: (1) that only four photographs were shown to Shaar by the detectives; (2) that Shaar was asked if the pictures were of “the two fellows that robbed and shot him.” (State Court trial testimony of Detective Leonard, Tr. 106, A-194); and (3) that when he gave the first description of his assailants to the detectives on December 23, 1971 when he had just been shot, he mentioned only one assailant with an orange CPO jacket. Thus, in light of Shaar’s physical condition and mental state, which were concededly rather poor, the use of only four photographs together with the mention of two suspects made the photographic display unduly suggestive.
However, when the testimony of Detective Leonard which was taken during the state trial out of the presence of the jury is closely analyzed, the suggestiveness disappears. Shaar obviously knew there were two robbers without prompting from Leonard. When he viewed the four photographs, he did not simply identify Williams as one robber and Brooks as the other.
Instead, as Leonard recapped, Shaar identified Williams as the one who shot him and Brooks as the one who cleaned out the cash register. Leonard testified:
He looked at Floyd Hairston’s picture, put it aside. He looked at June Bug Brown’s picture and placed it aside. He got to the picture of Lee Williams. He stated that “this is the big fellow, this is the fellow that shot me.” He put that aside. He went to the last picture, which was Robert Lee Brooks. He said, “This is the fellow that cleaned out the cash register, this is the shorter fellow.” (State Trial testimony, Tr. 30, A-118).
This is persuasive evidence that Shaar remembered the duo even before any suggestive comments by Detective Leonard.
Finally, there is no per se requirement that at least six photographs should have been shown to Shaar. See Manson v. Brathwaite, supra, decided after the district court ruled on the suggestiveness aspect of this case.
77-1679 — REVERSED AND REMANDED WITH DIRECTIONS TO DENY THE WRIT.
77-1171 — REVERSED AND REMANDED FOR RECONSIDERATION OF EXHAUSTION OF AVAILABLE STATE COURT REMEDIES.
. This third holding is not the subject of either the appeal or cross-appeal before us.
. The motion was orally made on the basis of “newly discovered evidence.” F.R.C.P. 60(b)(2). To us, there is a substantial question presented concerning the sufficiency of the allegations contained in that oral motion made by the State under F.R.C.P. 60(b)(2). That Rule requires that the “newly discovered evidence [was such that] by due diligence [it] could not have been discovered in time to move for a new trial under Rule 59(b), [i. e. within 10 days of the entry of judgment].”
In the first hearing before the district court on the federal habeas corpus, although the assistant prosecuting attorney who tried the case was present, he was not called to negate the testimony of state trial counsel on the suppression of exculpatory evidence. No evidence was presented until the State reopened the case with the testimony of the prosecuting attorney himself. No showing of unavailability was made on the record before us. See F.R.C.P. 60(b)(2); 7(b).
Because of our disposition of the cross-appeal, post, in part IV of this opinion, we need not further discuss any inadequacy of the oral motion made under F.R.C.P. 60(b)(2).
. Disregarding exhaustion for the moment, had the district court not ruled upon the state’s motion to reopen due to newly discovered evidence under F.R.C.P. 60(b)(2), an appeal could have been rendered largely academic. We hold only that permission of this court was not a necessary precondition for the district court to entertain the Rule 60(b)(2) motion.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KENNEDY, Circuit Judge.
The Commissioner of Internal Revenue appeals the decision of the Tax Court holding that allocation of income to Procter & Gamble (P & G) from a wholly-owned subsidiary under Internal Revenue Code § 482 was unwarranted. For the reasons to follow, we AFFIRM the Tax Court.
I.
P & G is an Ohio corporation engaged in the business of manufacturing and marketing consumer and industrial products. P & G operates through domestic and foreign subsidiaries and affiliates.
P & G owned all the stock of Procter & Gamble A.G. (AG), a Swiss corporation. AG was engaged in marketing P & G’s products, generally in countries in which P & G did not have a marketing subsidiary or affiliate.
P & G and AG were parties to a License and Service Agreement, known as a package fee agreement, under which AG paid royalties to P & G for the nonexclusive use by AG and its subsidiaries of P & G’s patents, trademarks, tradenames, knowledge, research and assistance in manufacturing, general administration, finance, buying, marketing and distribution. The royalties payable to P & G were based primarily on the net sales of P & G’s products by AG and its subsidiaries. AG entered into agreements similar to package fee agreements with its subsidiaries.
In 1967, P & G made preparations to organize a wholly-owned subsidiary in Spain to manufacture and sell its products in that country. Spanish laws in effect at that time closely regulated foreign investment in Spanish companies. The Spanish Law of Monetary Crimes of November 24, 1938, in effect through 1979, regulated payments from Spanish entities to residents of foreign countries. This law required governmental authorization prior to payment of pesetas to residents of foreign countries. Making such payments without governmental authorization constituted a crime. Decree 16/1959 provided that if investment of foreign capital in a Spanish company was deemed economically preferential to Spain, a Spanish company could transfer in pesetas “the benefits obtained by the foreign capital.”
P & G requested authorization to organize P & G España S.A. (España) and to own, either directly or through a wholly-owned subsidiary, 100 percent of the capital stock of España. P & G stated that its 100 percent ownership of España would allow España immediate access to additional foreign investment, and that P & G was in the best position to bear the risk associated with the mass production of consumer products. P & G also indicated that 100 percent ownership would allow P & G to preserve the confidentiality of its technology. As part of its application, P & G estimated annual requirements for pesetas for the first five years of España’s existence. Among the items listed was an annual amount of 7,425,000 pesetas for royalty and technical assistance payments. Under Spanish regulations, prior authorization of the Spanish Council of Ministers was required in. order for foreign ownership of the capital of a Spanish corporation to exceed fifty percent.
The Spanish government approved P & G’s application for 100 percent ownership in España by a letter dated January 27, 1968. The letter expressly stated that Es-paña could not, however, pay any amounts for royalties or technical assistance. For reasons that are unclear in the record, it was determined that AG, rather than P & G, would hold 100 percent interest in Espa-ña.
From 1969 through 1979, España filed several applications with the Spanish government seeking to increase its capital from the amount originally approved. The first such application was approved in 1970. The letter granting the increase in capital again stated that España “will not pay any amount whatsoever in the concept of fees, patents, royalties and/or technical assistance to the investing firm or to any of its affiliates, unless with the approval of the Administration.” All future applications for capital increases that were approved contained the same prohibition.
In 1973, the Spanish government issued Decree 2343/1973, which governed technology agreements between Spanish entities and foreign entities. In order to obtain permission to transfer currency abroad under a technology agreement, the agreement had to be recorded with the Spanish Ministry of Industry. Under the rules for recording technology agreements, when a foreign entity assigning the technology held more than 50 percent of the Spanish entity’s capital, a request for registration of a technology agreement was to be looked upon unfavorably. In cases where foreign investment in the Spanish entity was less than 50 percent, authorization for payment of royalties could be obtained.
In 1976, the Spanish government issued Decree 3099/1976, which was designed to promote foreign investment. Foreign investment greater than 50 percent of capital in Spánish entities was generally permitted, but was conditioned upon the Spanish company making no payments to the foreign investor, its subsidiaries or its affiliates for the transfer of technology.
España did not pay a package fee for royalties or technology to AG during the years at issue. España received permission on three occasions to pay P & G for specific engineering services contracts. The Spanish Foreign Investments Office clarified that payment for these contracts was not within the general prohibition against royalties and technical assistance payments. España never sought formal relief from the Spanish government from the prohibition against package fees.
In 1985, consistent with its membership in the European Economic Community, in Decree 1042/1985 Spain liberalized its system of authorization of foreign investment. In light of these changes, España filed an application for removal of the prohibition against royalty payments. This application was approved, as was España’s application to pay package fees retroactive to July 1, 1987. España first paid a dividend to AG during the fiscal year ended June 30, 1987.
The Commissioner determined that a royalty of two percent of España’s net sales should be allocated to AG as royalty payments under section 482 for 1978 and 1979 in order to reflect AG’s income. The Commissioner increased AG’s income by $1,232,653 in 1978 and by $1,795,005 in 1979 and issued P & G a notice of deficiency. P & G filed a petition in the Tax Court seeking review of the deficiencies.
The Tax Court held that the Commissioner’s allocation of income was unwarranted and that there was no deficiency. The court concluded that allocation of income under section 482 was not proper in this case because Spanish law, and not any control exercised by P & G, prohibited España from making royalty payments.
II.
This Court applies a de novo standard of review to legal conclusions made by the Tax Court. Smith v. Commissioner, 987 F.2d 1089, 1096 (6th Cir.1991).
III.
P & G argues that the Tax Court correctly determined that the Commissioner was not authorized to allocate royalty income to it under section 482. At all times relevant to this action, section 482 provided:
In any case of two or more organizations, trades, or businesses ... owned or controlled directly or indirectly by the same interests, the Secretary may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among such organizations, trades, or businesses, if he determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any such organizations, trades, or businesses.
The purpose of section 482 is “to place a controlled taxpayer on a tax parity with an uncontrolled taxpayer.” Treas.Reg. § 1.482 — 1(b)(1).
It is P & G’s position that section 482 requires that any distortion of income of a controlled party result from the existence and exercise of control. P & G argues that where governing law, and not the controlling party or interests, causes a distortion of income, section 482 is unavailable to allocate income. P & G argues that the regulations promulgated under section 482 and the Supreme Court’s decision in Commissioner v. First Security Bank, 405 U.S. 394, 92 S.Ct. 1085, 31 L.Ed.2d 318 (1972), support this position.
The term “controlled” is defined in Treas.Reg. § 1.482-l(a)(3) to include:
any kind of control, direct or indirect.... It is the reality of the control which is decisive, not its form or the mode of its exercise.
Treas.Reg. § 1.482-l(b)(l) states the level of control that is presumed to justify making a section 482 allocation:
The interests controlling a group of controlled taxpayers are assumed to have complete power to cause each controlled taxpayer so to conduct its affairs that its transactions and accounting records truly reflect the taxable income from the property and business of each of the controlled taxpayers.
Further, Treas.Reg. § 1.482-l(c) states:
Transactions between one controlled taxpayer and another will be subjected to special scrutiny to ascertain whether the common control is being used to reduce, avoid, or escape taxes.
The foregoing regulations recognize that in order for the Commissioner to have authority to make a section 482 allocation, a distortion in a controlled taxpayer’s income must be caused by the exercise of such control. In the present case there is no evidence that P & G or AG used its control over España to manipulate or shift income. Indeed, the Tax Court held that the failure of España to make royalty payments was a result of the prohibition against royalty payments under Spanish law and was not due to the exercise of control by P & G. The Spanish prohibition is expressly found in the letter approving España’s organization and in the letters permitting capital increases for España. In addition, Decrees 2343/1973 and 3099/1976 made it clear that payments for transfers of technology from Spanish entities to controlling foreign entities would be restricted.
The Supreme Court held in First Security that the Commissioner is authorized to allocate income under section 482 only where a controlling interest has complete power to shift income among its subsidiaries and has exercised that power. In First Security, two related banks offered credit life insurance to their customers. The banks were prohibited by federal law from acting as insurance agents and receiving premiums, and they referred customers to an unrelated insurance company to purchase this insurance. The insurance company retained 15 percent of the premiums for actuarial and accounting services, and transferred 85 percent of the premiums through a reinsurance agreement to an insurance company affiliated with the banks. The insurance affiliate reported the entire amount it received as reinsurance premiums as its income. The Commissioner determined that 40 percent of the affiliate’s income was allocable to the banks as compensation for originating and processing the insurance. The Supreme Court set aside the Commissioner’s allocation. The Court found that the holding company that controlled the banks and the insurance affiliate did not have the power to shift income among its subsidiaries unless it operated in violation of federal banking law. The Court stated that the “complete power” referred to in Treas.Reg. § 1.482-1(b)(1) does not include the power to force a subsidiary to violate the law. So here, P & G did not have the power to shift income between España and its other interests unless it violated Spanish law. The payment or non-payment of royalties in no way depended on P & G’s control of the various entities. The same result — no royalties— would exist in the case of unrelated entities.
The Commissioner argues that First Security is not controlling in this case because the Supreme Court’s analysis is limited to instances in which allocation under section 482 is contrary to federal law. We are not persuaded. The Supreme Court focused on whether the controlling interests utilized their control to distort income. We see no reason to alter this analysis because foreign law, as opposed to federal law, prevented payment of royalties. The purpose of section 482 is to prevent artificial shifting of income between related taxpayers. Because Spanish law prohibited royalty payments, P & G could not exercise the control that section 482 contemplates, and allocation under section 482 is inappropriate. That foreign law is involved may require a heightened scrutiny to be sure the taxpayer is not responsible for the restriction on payment. But that is not suggested in the case of the Spanish law here which was in effect long before España was created.
The Commissioner argues that P & G could have paid, under Decree 16/1959, an annual “dividend.” The Commissioner argues that P & G has not shown that a dividend would have been forbidden under Spanish law, and asserts that the Commissioner would have treated such a dividend as a royalty for United States tax purposes. Assuming that España had profits from which it could pay a dividend under Spanish law, we find that P & G had no such obligation. A taxpayer need not arrange its affairs so as to maximize taxes as long as a transaction has a legitimate business purpose. Salyersville National Bank v. United States, 613 F.2d 650, 653 (6th Cir.1980). We firmly disagree with the Commissioner’s suggestion that P & G should purposely evade Spanish law by making royalty payments under the guise of calling the payments something else. Furthermore, the record reflects that Espa-ña did not have distributable earnings from which to pay dividends. P & G’s federal income tax returns indicate that España had accumulated deficits during the years at issue and would be unable to distribute dividends.
The Commissioner argues that the Tax Court erred by refusing to apply Treas.Reg. § 1.482-l(b)(6), the “blocked income” regulation. Treas.Reg. § 1.482-1(b)(6) provides in pertinent part:
If payment or reimbursement for the sale, exchange, or use of property, the rendition of services, or the advance of other consideration among members of a group of controlled entities was prevented, or would have been prevented, at the time of the transaction because of currency or other restrictions imposed under the laws of any foreign country, any distributions, apportionments, or allocations which may be made under section 482 with respect to such transactions may be treated as deferrable income.
This regulation recognizes the problem posed by restrictions placed on payments in a foreign currency. Income allocated under section 482 may be deferred if payments have been blocked by currency or other restrictions under the laws of a foreign country. The Tax Court determined that because section 482 did not apply to the present case, the regulations promulgated under section 482 likewise did not apply.
The Commissioner argues that this regulation is designed to remedy the situation presented in this case. We disagree. Treas.Reg. § 1.482-l(b)(6) contemplates the situation where a temporary restriction under foreign law prevents payments, and defers the allocation of income until such time as the payments are no longer restricted. This case does not present a situation in which payments to P & G were temporarily restricted; rather, Spanish law prohibited payment of royalties altogether. This prohibition cannot be viewed as temporary because it was ultimately repealed in 1987. At the time in question, there was no reason for P & G to believe that the Spanish government would lift this ban; therefore, the payments that España was prohibited by law from making cannot be viewed as temporarily blocked payments.
The Commissioner also argues that the prohibition on royalty payments was temporary and that P & G could have deferred royalty payments under this regulation and then at some future time P & G could have liquidated España and taken its capital out of Spain. Upon liquidation, the Commissioner argues, the temporary prohibition on payment of pesetas would end. We find this argument to be meritless because P & G need not organize its subsidiaries in such a way as to maximize its tax liabilities. There is no question that P & G may legally structure its affairs in its own best interest. Salyersville, 613 F.2d at 653. We agree with the Tax Court that Treas.Reg. § 1.482-l(b)(6) does not apply to this case.
IV.
Accordingly, the decision of the Tax Court that allocation of income under section 482 is inappropriate is AFFIRMED.
. These allocations to AG resulted in increases in P & G’s taxable Subpart F income under I.R.C. § 951(a)(1)(A).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
SANBORN, Circuit Judge.
The petitioner asks for the review and reversal of an order of the National Labor Relations Board dated April 8, 1953 (103 N.L.R.B. No. 127). The Board asks for the enforcement of its order.
In a proceeding under Section 10 of the National Labor Relations Act, as amended, 61 Stat. 136, 29 U.S.C.A. § 151 et seq., the Board determined that the petitioner, which has a plant in Omaha, Nebraska, and makes and sells potato chips and popcorn, had during 1951 violated Section 8(a)(3) of the Act, 29 U.S.C.A. § 158(a)(3), (1) by suspending one of its employees and discharging three others because of their activities on behalf of United Packinghouse Workers of America, C.I.O., a labor union, (2) by discharging forty-eight of petitioner’s employees who struck in protest against the discharges, and (3) by refusing the application of some of the strikers for reinstatement. The Board also determined that, by these acts and other conduct, the petitioner had interfered with, restrained and coerced its employees in the exercise of their rights to self-organization and to engage in concerted activities, in violation of Section 8(a) (1) of the Act, 29 U.S.C.A. § 158(a)(1).
The Board’s order required the petitioner to cease and desist from discouraging membership in the Union or other labor organization by discriminating with respect to employment, and from in any other manner interfering with the rights of petitioner’s employees. The order also required the petitioner to offer reinstatement to seventeen employees who, the Board found, had been dis-criminatorily discharged and not offered reinstatement, and to make whole for loss of pay forty-nine employees who had engaged in the strike.
The issues before the Board were whether the suspension of the one employee and the various discharges of others were the result of the union affiliations and protected activities of the employees involved, as charged by the General Counsel of the Board, or were the result of other causes, as asserted by the petitioner, and whether the petitioner had or had not engaged in interrogation and surveillance of its employees with respect to their union affiliations and activities.
In its brief the petitioner asserts that the issues presented to this Court are:
“(1) Whether or not the discharges of Moore, Gamerl, and Galus were for good cause and not for union activity;
“(2) Whether or not the suspension of Rose Bell was for good cause and not for union activity;
“(3) Whether or not the discharges of July 19, 1951, were for good cause and not an unfair labor practice against employees engaged in a protected concerted activity.”
What the petitioner means to assert is, of course, that the question before this Court is whether there was an adequate evidentiary basis for the Board's determination that the suspension and the discharges were discriminatory and constituted unfair labor practices.
This Court cannot retry and redetermine issues of fact which have been tried and determined by the Board. National Labor Relations Board v. Minnesota Mining & Manufacturing Co., 8 Cir., 179 F.2d 323, 325; Hartsell Mills Co. v. National Labor Relations Board, 4 Cir., 111 F.2d 291, 293. The Board, as has frequently been pointed out, is the judge of the facts, the credibility of the witnesses, and the weight of evidence, and may draw inferences from circumstantial, as well as direct, evidence. It is only when the Board’s determination is without adequate support in the evidence or is beyond the scope of the Board’s statutory authority that this Court may set aside an order or refuse its enforcement.
In the case of National Labor Relations Board v. Minnesota Mining & Manufacturing Co., supra, at page 325 of 179 F.2d, this Court said:
“The only question requiring consideration is whether there is an adequate evidentiary basis for the findings and order of the Board. We think that the time has come to abbreviate, so far as possible, opinions in these National Labor Relations Board cases. A detailed review of the evidence is ordinarily futile. The parties are familiar with it, and others are not interested unless some novel question is presented. Almost all of these eases fall into some familiar pattern. The limited scope of our power of review has often been repeated.”
The instant case is of a type entirely familiar to this Court, namely, one in which union members and union supporters are discharged or laid off by an employer during an organizational campaign, the union claiming that the discharges or suspensions were the result of union affiliations or activities, and the employer asserting that good cause existed for its action.
The main events which gave rise to this controversy are not in dispute. All of them took place in 1951. In chronological order, they were as follows: May 26, or about that date, a movement to have the Union organize petitioner’s plant was initiated. On or about June 1, the Union held its first organizational meeting. June 4, Moore and Gamerl, employees of the petitioner who had been active in the union movement in petitioner’s plant, were discharged. On the same day, the Field Representative of the Union, wrote petitioner that the Union represented a majority of petitioner’s employees. He requested a meeting to discuss wages and working conditions. June 7, the petitioner wrote the representative of the Union, questioning his statement that it represented a majority of the petitioner's employees,, and declining his request for a meeting. June 12, the Union filed a representation petition with the Regional Office of the Board. June 19, Rose Bell, an employee of petitioner who had joined the Union and had actively participated in the union movement, was suspended for one week. July 16, Galus, an employee of petitioner who had initiated the union movement in the plant, was discharged. Alberta Sogge, another employee who. had joined and assisted the Union, was also discharged on that day. July 18, a hearing was held on the representation petition of the Union. On the same day, the Union held a meeting, at which it was proposed to protest the discharges of Galus and Alberta Sogge. July 19, thirty-five of petitioner’s employees, wearing Union buttons, left their work in the plant during working hours and unsuccessfully sought an interview with Mrs. Lou C. Lippold, Secretary-Treasurer of petitioner. She refused to meet with them as a group, and, upon their refusal to return to work, they were discharged. These employees and others went on strike. July 30, a committee representing all the striking employees, forty-nine in number, presented to petitioner an offer to return to their jobs. October 4, the petitioner wrote thirty-two of these employees offering reinstatement. Seventeen were not offered reinstatement. October 15, fifteen of the employees who had been offered reinstatement responded and were employed by the petitioner.
We have read and considered the entire record in this case, and have reached the conclusion that the findings and order of the Board are supported by substantial evidence. The case, in principle, differs in no controlling respect from other cases of a similar type in which the findings of the Board have been held to be within the evidence. See and compare, Carter Carbureter Corporation v. N.L.R.B., 8 Cir., 140 F.2d 714; N.L.R.B. v. Winona Knitting Mills, Inc., 8 Cir., 163 F.2d 156; N.L.R.B. v. Dixie Shirt Co., Inc., 4 Cir., 176 F.2d 969; N.L.R.B. v. Minnesota Mining & Manufacturing Co., supra, 179 F.2d 323; N.L.R.B. v. Kennametal, Inc., 3 Cir., 182 F.2d 817, 19 A.L.R.2d 562; N.L.R.B. v. Ozark Hardwood Co., 8 Cir., 194 F.2d 963; N.L.R.B. v. J. I. Case Co., Bettendorf Works, 8 Cir., 198 F.2d 919; Modern Motors, Inc., v. N.L.R.B., 8 Cir., 198 F.2d 925; N.L.R.B. v. Brown & Root, Inc., 8 Cir., 203 F.2d 139, 147. In the case last cited, this court said: “Questions of motive, intent, good faith, and the like, if at all doubtful, are questions of fact, and men may reasonably be presumed to intend the natural and necessary consequences of what they do.”
It is our conclusion that the controlling issues in this case were, under the evidence, issues of fact for the Board, and are not issues of law for this Court.
The Board’s request for enforcement of its order is granted.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
LEWIS, Circuit Judge.
This appeal is taken from an order of the District Court for the District of New Mexico denying appellant’s petition for a writ of habeas corpus. Appellant, a Mexican national, was originally charged with first degree murder and is presently serving a sentence imposed by the New Mexico state court after acceptance of a plea of guilty to second degree murder. He alleges that he was denied several federal constitutional rights in the state court proceedings, each such claim springing from the contention that he could not and did not understandingly communicate with his appointed counsel because of the existence of a language barrier.
Although we have no doubt that under extreme circumstances the inability of an accused to communicate with his counsel may deny to him the right to effective representation and actually result in the entry of a plea without understanding we do not find the case at bar to be of such nature. There is no constitutional right, as such, requiring the assistance of a court-appointed interpreter to supplement the right to counsel. Nor is there a duty to an accused to furnish counsel who can communicate freely with the accused in his native tongue. The existence of a language barrier between counsel and client is merely one circumstance probing the questions of whether the accused has been adequately represented by counsel and has voluntarily and knowingly entered his plea.
Here, the trial court, rejecting the credibility of appellant’s present testimony, found as a fact that appellant had a sufficient knowledge of the English language to be completely aware of all of the proceedings in the state court. The finding is amply supported by the transcript of the state arraignment where the following occurred, all in the English language:
“THE COURT: Are you prepared to enter a plea at this time?
MR. CERVANTES: I would like to find out what is the charge before I plea.
THE COURT: Well, the Court’s been informed by Mr. Durrett, one of your attorneys, and Mr. Wilkinson is the other one, and the Assistant District Attorney that you wanted to enter a plea to a charge of murder in the second degree. Now, is that correct?
MR. CERVANTES: I do.
THE COURT: Very well, Mr. Garza, do you want to make a motion?
******
THE COURT: Now are you prepared to enter a plea at this time ?
MR. CERVANTES: Yes:
THE COURT: The Court has appointed two attorneys to represent you, and they have asked that they have time to consult with you, and I presume they have. Are you satisfied with their representation?
THE WITNESS: Yes.
THE COURT: Do you know of any reason why this Court should not sentence you at this time ?
MR. CERVANTES: No, I don’t think so.
THE COURT: And you want to enter a plea of guilty to a charge of murder in the second degree, is that correct ?
MR. CERVANTES: Yes.
THE COURT: Do you have anything to say before the Court passes sentence ?
MR. CERVANTES: No, sir.”
Appellant’s independent inquiry as to the charge to which he was to plead indicates an understanding that it was to be a reduced charge and that he had the ability to communicate both with the court and with his counsel.
Affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
Opinion for the Court filed by Chief Judge WALD.
WALD, Chief Judge:
Anthony Brown challenges his conviction on charges of possession with intent to distribute a substance containing phencycli-dine (“PCP”) in violation of 21 U.S.C. § 841. He argues, first, that the trial court erred in admitting into evidence a police officer’s testimony, on re-direct examination, that he had been told that Brown and an informant had had “previous dealings of PCP.” We find that the testimony was inadmissible hearsay and that, although defense counsel did, on cross-examination, initiate a line of questioning concerning the informant’s identification of Brown, he did not “open the door” to the officer’s later hearsay testimony. However, because the government did not exploit this erroneously-admitted testimony and because the remainder of the government’s evidence was very substantial, we find that the trial court’s error was harmless.
Brown also challenges the trial court’s enhancement of his sentence under the repeat offender provision set forth in 21 U.S.C. § 841(b)(1)(B). He argues that the government and the trial court failed to comply with the filing requirements established by statute. We disagree and find that the trial judge’s acceptance of the enhancement papers in open court was sufficient to satisfy the statutory filing requirements. Accordingly, we affirm Brown’s conviction and sentence.
I. Background
In mid-1989, Samantha and Richard Anderson were arrested by the D.C. Metropolitan Police Department on charges of cocaine possession. These charges were “no-papered” and the Andersons began cooperating with the Department in its investigation of the PCP trade. They introduced police officers to PCP dealers, arranged and made “controlled purchases” of drugs, and, in some instances, testified in criminal prosecutions.
In one such controlled purchase, the Andersons arranged to purchase six bottles of PCP for $1,600. Pursuant to the agreement, the Andersons went to a local hospital and called the seller's telephone pager. The seller called back, directing the Andersons to proceed to a local restaurant and to call the pager again. The Andersons informed the police, who then placed the restaurant under surveillance. At the restaurant, Mr. Anderson called the pager; the seller called back and said that he would be there shortly and would be wearing a red, white, and blue shirt. Fifteen minutes later, police officers observed Brown get out of a car, lean over a wall in the parking lot of the restaurant, and enter the restaurant for a brief period. Brown was then observed talking to Mrs. Anderson, who was alone in the car while her husband made another phone call. Mrs. Anderson testified that Brown said he was going to get the “water” — a slang term for PCP. As Brown walked away, Mrs. Anderson signalled police officers, who then arrested Brown. Brown was wearing a red, white, and black jacket and on his person, police found a beeper which displayed the telephone numbers of the two phones from which the Andersons had arranged the purchase.
After a brief search, police found, near the wall in the parking lot, a beige plastic bag containing six bottles of PCP. The police also arrested three persons in the car in which Brown had arrived and found, in the car’s trunk, an identical beige plastic bag.
At trial, defense counsel and D.C. Police Sergeant Wilson (who was present at the arrest) engaged in the following exchange:
Q. Did you debrief the Andersons after Mr. Brown was arrested?
A. Yes.
Q. And at that time when you debriefed them after Mr. Brown was arrested, did either of them state they had seen Mr. Brown before?
A. Yes.
Q. And which Anderson said he had seen Mr. Brown before, or she had seen?
A. Mrs. Anderson.
Q. [I]s there a reference in any of your police reports or in any of your notes with reference to the fact that Mrs. Anderson told you she had seen Mr. Brown before?
A. I don’t know. None of my personal notes.
Q. And is there any reference during your testimony before the grand jury in this courthouse that Mrs. Anderson had seen Mr. Brown before?
A. I don’t remember that.
On re-direct examination of Sergeant Wilson, the prosecutor extended this line of questioning:
Q. Now, counsel asked you whether either Mr. Anderson or Mrs. Anderson could identify [Brown] and you responded you learned Mrs. Anderson could identify him. Do you know how she could identify him? Did you learn that?
Defense Counsel: Objection, unless it is personal knowledge, Your Honor.
Q. Well, he opened it up, Your Honor.
The Court: All right. Do you know? If you don’t know, then
A. I was told it was from previous dealings of PCP.
A jury subsequently convicted Brown of possession of PCP with intent to distribute. On appeal, Brown contends that the trial court erred in admitting Sergeant Wilson’s testimony.
II. Admissibility of Wilson’s Statement
Brown argues that Wilson’s statement on re-direct was inadmissible hearsay. We agree and reject the government’s contention that defense counsel, in his cross-examination, “opened the door” to Wilson’s testimony.
Wilson’s statement—that he had been told that Mrs. Anderson and Brown had met during earlier dealings of PCP— was classic hearsay, an out-of-court statement offered in evidence to prove the truth of the matter asserted. See Fed.R.Evid. 801(c). Although the government suggests that the statement was offered to rehabilitate Wilson’s testimony after defense counsel challenged Wilson’s credibility, we do not agree. How testimony that Anderson and Brown met during prior drug dealings could have enhanced Wilson’s credibility is not at all clear. If anything, the fact that Wilson failed to write down such a significant fact arguably weakened his credibility. Thus, we find that Wilson’s statement on cross-examination was hearsay.
Wilson’s testimony may nonetheless have been admissible if, as the government contends, the defendant “opened the door” to the hearsay. Under the “curative admissibility” doctrine, the introduction of inadmissible or irrelevant evidence by one party justifies or “opens the door to” admission of otherwise inadmissible evidence. See Cleary, McCormick on Evidence § 57 (3d ed. 1984); see also United States v. Whitworth, 856 F.2d 1268, 1285 (9th Cir.1988), cert. denied, 489 U.S. 1084, 109 S.Ct. 1541, 103 L.Ed.2d 846 (1989); United States v. Childs, 598 F.2d 169, 174 (D.C.Cir.1979). In this case, however, the curative admissibility doctrine did not render the hearsay testimony admissible, for two reasons. First, defense counsel did not “open the door” by introducing inadmissible or irrelevant evidence. Wilson’s statement that Anderson and Brown had met previously was elicited by the defense at cross-examination, but was not inadmissible because it fit squarely within the prior-identification exception to the ban on hearsay. See Fed.R.Evid. 801(d)(1)(C). Accordingly, the precondition for curative admissibility had not been met; because the door had not been opened, Wilson’s hearsay testimony could not be admitted.
Even if defense counsel had opened the door by questioning Wilson about his notes and challenging his credibility, it does not follow that all subsequent evidence is admissible. As this court has long recognized: “ ‘Opening the door is one thing. But what comes through the door is another.’ ” United States v. Winston, 447 F.2d 1236, 1240 (D.C.Cir.1971). “Introduction of otherwise inadmissible evidence under shield of [curative admissibility] is permitted ‘only to the extent necessary to remove any unfair prejudice which might otherwise have ensued from the original evidence.’ ” Id. (citation omitted); cf. Whitworth, 856 F.2d at 1285; Childs, 598 F.2d at 174. In this case, all that was at issue was Wilson’s credibility. Thus, even if the defense did open the door, it only did so to the extent of admitting evidence that rehabilitated that credibility. As noted above, Wilson’s hearsay testimony concerning Brown’s pri- or activities was certainly not relevant to Wilson’s credibility.
“Curative admissibility” is a shield, not a sword. Although the government may prevent a defendant from using rules of evidence to select and enter pieces of evidence wholly out of context, the government may not shore up a prosecution by pushing through the open door evidence not “necessary to remove any unfair prejudice” created by defense counsel’s tactics. In sum, the range of otherwise-inadmissible evidence that may be squeezed through an “open door” is limited. In this case, the government exceeded those limits and Wilson’s statement was therefore inadmissible hearsay.
III. Harmless ErroR Analysis
Despite the trial court’s error in admitting Wilson’s hearsay testimony, we need not upset Brown’s conviction if we find that the court’s error was harmless. See Fed.R.Crim.P. 52(a). Because of the very substantial evidence indicating Brown’s guilt and because the government made no further use of the hearsay testimony, we find that the trial court’s error was harmless.
The government’s evidence against Brown was considerable and coherent. Brown's clothing resembled the clothing that the PCP seller told the Andersons he would be wearing. A bag containing the pre-arranged number of bottles of PCP was found close to where Brown was standing. An identical bag was found in the car in which Brown arrived. Perhaps most significantly, the telephone pager recovered from Brown displayed the telephone numbers of the phones over which the deal had been arranged. Indeed, after the arrest, the confiscated pager received a call. Police returned the call, set up a PCP “sale” and arrested the buyer. Based on this evidence we cannot say that this was a “close” case, United States v. Hernandez, 780 F.2d 113, 119 (D.C.Cir.1986); Wilson’s hearsay testimony was but a small part of the prosecution’s overall scheme of inculpa-tory evidence. Moreover, the government did not exploit the erroneously-admitted hearsay testimony. Throughout both its case-in-chief and its summation, the prosecution did not invoke the evidence of Brown’s prior acts. Cf. United States v. Hernandez, 750 F.2d 1256 (5th Cir.1985) (reversing conviction in part because prosecutor’s closing argument emphasized inadmissible evidence). For these reasons, we find that the trial court’s admission of Wilson’s statement did not constitute reversible error. Accordingly, we affirm Brown’s conviction.
IV. SENTENCE Enhancement
Brown also contends that the district court erred in enhancing his sentence; in particular, he maintains that the government failed to comply with the filing requirements of 21 U.S.C. § 851(a)(1). That section provides that the government must “before trial ... file[ ] an information with the court ... stating in writing the previous convictions to be relied upon.” 21 U.S.C. § 851(a)(1) (emphasis supplied). In this case, the government orally notified defense counsel of its intentions under § 851 on August 29, 1989—the day trial was originally scheduled to begin. The trial was pushed back two days and when, on the day of the trial, the judge accepted the § 851 papers in court, the defense objected on the grounds of untimeliness. After the voir dire began, the defense again challenged the § 851 filing. The judge responded, “The [papers] were filed in open court. No problem with that. He has notice.”
The defense claims that the filing of the § 851 papers—and thus the sentence enhancement—were infirm. Although it is true that the papers were not filed with the clerk before the day of trial, under the rules of civil procedure (which Federal Rule of Criminal Procedure 49(d) incorporates by reference), a filing “shall be made by filing ... with the clerk ..., except that the judge may permit the papers to be filed with the judge, in which event the judge shall note thereon the filing date and forthwith transmit them to the office of the clerk.” Fed.R.Civ.P. 5(e) (emphasis supplied). Thus, in this case, the defendant’s only claim is that the trial judge, in accepting the § 851 papers, failed to comport with this Rule.
The defendant’s claim is twofold. First, he contends that the judge did not “permit” papers to be filed with him; second, he contends that the judge did not follow the Rule’s procedures. We disagree, for we find the defendant’s reading of Rule 5(e) overly formal and unduly constrictive of a trial judge’s authority and discretion in the management of a criminal proceeding. Contrary to the defendant’s contention, the judge, in “permit[ting]” a filing, need not utter particular words or offer particular reasons; all that is required is that the judge knowingly accept the filing. Similarly, we do not read the Rule so narrowly as to require a judge to interrupt proceedings in order to deliver the papers to the clerk. In this case, there is no evidence that the judge failed to note the filing date and forward the papers to the Clerk’s office; indeed, as the record indicates, the clerk’s office marked the filing at issue as received on the day of trial—August 31, 1989. Perhaps most significantly, the judge ensured that the purposes of the filing requirements were fulfilled, taking care to note that the defense had had advance notice of the filing and to give the defense ample opportunity to seek a continuance or brief recess to reconsider its trial strategy. Under these circumstances, we find that the judge, in accepting the § 851 papers in open court, substantially complied with the filing requirements of Rule 5(e). In sum, although the trial court may not have precisely complied with the technical requirements of the Rule, we find that the judge’s acceptance of the filing, combined with the adequate notice granted defense counsel, met the requirements of both the Rule and the statute.
For these reasons, we affirm appellant’s conviction and sentencing.
So ordered.
. Telephone pagers or beepers, which apparently are widely-used in illegal drug transactions, record and store telephone numbers entered by callers.
. As indicated in the transcript excerpt, defense counsel promptly objected to Wilson’s statement as hearsay; accordingly, we look directly at whether the trial court erred in admitting Wilson’s statement into evidence.
. The Fifth Circuit reached a similar conclusion in a like situation in United States v. Hernandez, 750 F.2d 1256, 1257 (1985). In that case, a DEA agent testified as follows;
Q. ... [WJhat first brought the attention of the [DEA to] Hernandez?
A. We received a referral by the U.S. Customs as Hernandez being a drug smuggler. Reviewing Hernandez’s conviction, the court found that the agent's response was hearsay, rejecting as contrary to “common sense" the government’s claim that the statement was simply offered to show the "motivation behind DEA’s investigation.” Id.
. Brown also contends that Wilson’s statement constituted prejudicial evidence of prior bad acts and that the trial court erred in admitting that statement. See Fed.R.Evid. 403, 404. However, defense counsel failed to object on these grounds at trial; accordingly, any review of this issue would apply a “plain error” standard. See Fed.R.Evid. 103(d). Because we find that the trial court’s error in admitting Wilson’s inadmissible hearsay was harmless, see Part III infra, we need not decide Brown’s Rule 403-404 contentions. Any violation of those Rules in this case would certainly not rise to the level of plain error.
. Brown also contends that the government failed to comply with 21 U.S.C. § 851(b), which requires that, before sentencing, the court “inquire of the [defendant] ... whether he affirms or denies that he has been previously convicted” and "inform him that any [new] challenge to a prior conviction ... may not thereafter be raised to attack the sentence.” Upon review of the record, we find that the trial court substantially complied with these requirements and offered Brown ample opportunity to deny the previous conviction relied upon by the government.
. Because we find the in-court filing satisfactory, we need not reach the question urged upon us by Brown—namely, when does a trial begin for purposes of § 851? Cf. United States v. Jordan, 810 F.2d 262, 269 (D.C.Cir.), cert. denied, 481 U.S. 1032, 107 S.Ct. 1963, 95 L.Ed.2d 535 (1987) (discussing this issue).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
SPARKS, Circuit Judge
(after stating the facts as above).
It is first contended by appellants that section 802(a) of the Revenue Aet of 1924, supra, is violative of article 1, § 8, el. 1, of the Constitution of the United States which provides that all duties, imposts and excises shall be uniform throughout the United States. It is admitted that such required uniformity is geographical and not intrinsic. It is not contended by appellants that the alleged lack of geographical uniformity appears upon the face of the- statute. They argue, however, that it arises by virtue of a decision of the United States Supreme Court in Crooks v. Harrelson, 282 U. S. 55, 51 S. Ct. 49, 75 L. Ed. 156, whieh held that a decedent’s real estate under the laws of Missouri was not subject to the payment of expenses of administration and for that reason could not be included in the gross estate of a resident of that State for the purpose of computing estate taxes. Hence appellants insist that the taxes laid under the section referred to are not geographically uniform because the enactment does not include a decedent’s real estate in Missouri.
With this contention we are not in accord. In Poe v. Seaborn, 282 U. S. 101, at page 117, 51 S. Ct. 58, 61, 75 L. Ed. 239, the Court said,
“ * * * Differences of state law, whieh may bring a person within or without the category designated by Congress as taxable, may not be read into the Revenue Act to spell out a lack of uniformity.”
In Knowlton v. Moore, 178 U. S. 41, at. page 106, 20 S. Ct. 747, 773, 44 L. Ed. 969, the subject of geographical uniformity was quite exhaustively treated, and Mr. Justice White there speaking for the Court used the following language:
“Though there is a provision that all duties, imposts, and excises shall be uniform— that is, to be laid to the same amount on the same articles in each state — yet this will not prevent Congress from having it in their power to eause them to fall very unequally and much heavier on some states - than on others, because these duties may be laid on articles but little or not at all used in some other states, and of absolute necessity for the use and consumption of others; in whieh case, the first would pay little or no part of the revenue arising therefrom, while the whole or nearly the whole of it would be paid by the last. * * ’ * ”
In Patton v. Brady, Executrix, 184 U. S. 608, 22 S. Ct. 493, 46 L. Ed. 713, the tax assessed was an excise on tobacco whieh was held valid. The Court quoted with approval the following language from the Head Money Cases, 112 U. S. 580, 5 S. Ct. 247, 252, 28 L. Ed. 798, “ ‘The tax is uniform when it operates with the same force and effect in every place where the subject of it is found.’ ”
In Florida v. Mellon, 273 U. S. 12, 47 S. Ct. 265, 266, 71 L. Ed. 511, it was contended that because the State of Florida did not impose an inheritance tax, the Federal Estate Tax Act was unconstitutional in that it allowed as a credit against the federal estate tax the inheritance taxes paid to the states, and that resident decedents of Florida were thus treated differently from decedents who were residents of other states whieh had inheritance tax laws. The Court held the act valid, saying,
“The contention that the federal tax is not uniform, because other states impose inheritance taxes while Florida does not, is without merit. Congress cannot accommodate its legislation to the conflicting or dissimilar laws of the several states nor, control the diverse conditions to .be found in the various states whieh necessarily work unlike results from the enforcement of the same tax. All that the Constitution (article 1, § 8, el. 1) requires is that the law shall be uniform in the sense that by its provisions the rule of liability shall be alike in all parts of the United States.”
In Phillips v. Commissioner, 283 U. S. 589, 51 S. Ct. 608, 613, 75 L. Ed. 1289, the Court said, in state laws; but such variations do not infringe tbe constitutional prohibitions against delegation of tbe taxing power or tbe requirement of geographical uniformity.” (Citing Florida v. Mellon, supra; Crooks v. Harrelson, supra; Poe v. Seaborn, supra; and comparing Head Money Cases, supra, and Clark Distilling Co. v. Western Maryland Ry. Co., 242 U. S. 311, 37 S. Ct. 180, 61 L. Ed. 326, L. R. A. 1917B, 1218, Ann. Cas. 1917B, 845.
“The extent.and incidence of federal taxes not infrequently are affected by differences
If, when tbe Federal Estate Tax Act was enacted, tbe laws of every state bad provided that all property of each decedent, real or personal, should be subject to tbe payment of tbe charges against bis estate and tbe expenses of administration and also be subject to distribution as part of bis estate, tbe question of geographical uniformity would not have arisen. But if tbe contention of appellants were sound, then tbe subsequent enactment of any state to tbe effect that resident decedents’ real estate should not be subject to tbe charges, or expenses of administration, or to distribution, as provided in tbe federal act, would render tbe federal act unconstitutional for lack of geographical uniformity. In other words, an admittedly constitutional federal enactment would be rendered unconstitutional by a subsequent state enactment. The time of such state enactment is not of importance, and tbe eases cited do not support appellants’ contention.
Appellants recognize tbe principle that without offense to tbe constitution, an excise may be based directly upon and related directly to state laws where those laws are of tbe essence of the thing taxed. See Flint v. Stone Tracy Co., 220 U. S. 107, 31 S. Ct. 342, 55 L. Ed. 389, Ann. Cas. 1912B, 1312. They contend, however, that tbe classification in tbe federal statute is not of tbe essence of tbe thing taxed. In this we think they are in error. The thing taxed is tbe transfer of the certain net estates. Tbe limitation is to tbe extent of tbe interest of tbe decedent in such estates which is subject to the payment of charges against bis estate and the expenses of its administration, and which is subject to distribution as part of bis estate. Tbe basis of tbe classification is tbe relation of tbe property to tbe estate, and it is of tbe essence of tbe thing taxed.
It is contended by appellants that tbe trial court erred in bolding that real estate in Illinois was properly included in tbe gross estate. This question was decided by this court adversely to their contention, March 10, 1933, in Ee Estate of Edward M. Marble (National Bank of the Republic of Chicago v. Commissioner of Internal Eevenue), 64 F.(2d) 745.
Cross-appellant contends that tbe trial court erred in permitting tbe Lawson estate to amend its petition, and in rendering judgment thereon for that estate in tbe sum of $9,165.19. It is disclosed by tbe record that tbe third ground of recovery was based on tbe alleged fact that there was included in tbe gross estate of Victor F. Lawson certain real estate which belonged to Iver Norman Lawson. Appellant bad in its claim for refund attacked tbe validity of tbe entire assessment, and under one paragraph of tbe claim bad asserted as a basis for such invalidity that tbe Commissioner bad wrongfully included “certain real estate and personal property” which belonged to Iver Norman Lawson. In tbe specific description of such property in tbe claim, however, only two tracts of real estate were described. By tbe order allowing tbe filing of the amended petition, within tbe period within which appellant might have filed an amended claim for refund, appellant was permitted to enlarge tbe description by including a third parcel. It is cross-appellant’s contention now that no recovery can be bad as to such third parcel in view of tbe fact that its specific description was omitted from tbe claim for refund. We consider tbe principles laid down in United States v. Memphis Cotton Oil Co., 288 U. S. 62, 53 S. Ct. 278, 77 L. Ed. 619; as determining this question adversely to such contention.
Judgment affirmed.
"Tlie Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide tor the common Deience and general Welfare of the United States; but all Duties, Imposts ' and Excises shall be uniform throughout the United States.”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
VOGEL, Circuit Judge.
Leslie Herman Kerber, a minor, brought this action by his next friend, asking money damages from American Machine & Foundry Company (hereinafter “AMF”), d/b/a Union Machinery Company. Jurisdiction is based upon diversity of citizenship and the requisite amount in controversy. The substantive law of Missouri controls.
Kerber, an employee of Continental Baking Company, St. Joseph, Missouri, was severely injured while working on a bakery machine (the “Pan-O-Mat”) manufactured by AMF. Kerber alleges that the machine was negligently designed and manufactured and that such negligence was the proximate cause of his injury.
During the trial, Liberty Mutual Insurance Company, workmen’s compensation carrier for Continental, having paid workmen’s compensation benefits to Ker-ber, asked that it be allowed to intervene in the action. The motion was subsequently granted. At the close of plaintiff’s evidence, the trial court granted AMF’s motion for a directed verdict. Kerber alone now appeals from the subsequent overruling of his motion for a new trial. We affirm.
Kerber, a young man just under 19 years of age at the time of the accident, had been a Continental Baking Company employee for one and a half months, had previously worked on the Pan-O-Mat four or five times, and, for his age, had considerable experience with machinery.
The Pan-O-Mat is used for the making of buns and rolls. Basically, rolls of dough are dropped down a floured chute into cups and then pans which move on a conveyor belt. Three employees operate the machine — an “operator”, a “front-end man”, and a “pan setter”. Kerber, a pan setter, set the pans in place at the center of the machine, corrected “stick-ups” and “doubles”, and floured the chute. A stick-up is a ball of dough stuck on the chute due to lack of flour and doubles are two balls of dough in one cup. Kerber testified that the easiest, fastest and best method to remove doubles was from the back of the machine, that this was a safe method of removal, and that he had removed doubles at the back of the machine on the night of the accident. Kerber had never been instructed to remove doubles from the side of the machine.
On the side of the Pan-O-Mat is an opening in which the chains and sprockets for the conveyor are exposed. AMF manufactured the machine with a 25" x 38" cover or shield to cover the opening. With the cover on, it was not possible for a person to place his hand into the open area. This cover is held in place by pins at the top rim of the opening and is easily removable for cleaning. Daily cleaning and weekly airing are required by Missouri law (V.A.M.S. §§ 196.195 and 196.270) and daily cleaning is directed by AMF’s written operating instructions. There were no warning signs on or near the cover stating that the machine should not be operated with the cover off. The machine was not equipped with a safety device which would render it inoperative when the cover was removed. The Pan-O-Mat was designed without an emergency power cut-off switch near the side opening— the closest such switch being approximately nine feet away.
On January 15, 1967, the day of the accident, Kerber had been on duty since 5:30 p. m. At 11:30 p. m., he set the pans and, as he was walking to the back of the machine to clean out stick-ups and flour the chute and because the cover was off the side opening, he noticed a double through the opening. In order to remove the double, Kerber reached with his left hand into the open area and grabbed the extra dough ball to put it into an empty cup. He then noticed a stick-up on the flour chute and, as he reached with his right hand to correct the stick-up, his left hand became caught between the sprockets and chain. He could not reach the power cut-off switch and his hand was mangled before the machine was stopped by one of his co-workers. Kerber testified:
“Q You put it in here (indicating) ?
“A Yes, sir.
“Q From the side of the machine?
“A Yes, sir.
“Q Why did you put it in there at that particular area?
“A It was quick to get to. It was just a reflex, a reaction. I was in kind of a hurry.
******
“The Witness: I said it was a reaction. It was easy to get to, and I was moving pretty fast around the machine in kind of a hurry.”
“Q Will you tell the jury and the Court, please, why you put your hand in that position to reach for the double there instead of going around to the rear of the machine and trying to correct the double there?
******
“The Witness: The reason I reached in there is that there was two pieces of dough in one cup, and as I walked by, I saw it, and the fastest way to get it was that way, so I just reached my hand in to correct the double.
“Q (By Mr. Martin [plaintiff’s attorney] ) If you had not reached your hand in there, and gone around the back of the machine, could you still have reached the double, or would it have been out of sight?
“A I could have probably reached it from the back.”
Kerber also testified that he had worked on the machine with the cover both on and off; that he knew the cover’s size, the area it covered, and its thickness and composition; that he could see the sprockets and chain when the cover was off; and that he understood and respected the dangerousness of the sprockets and chain.
The trial judge, the Honorable Richard M. Duncan, a judge thoroughly familiar with the law of Missouri, stated in his carefully considered opinion overruling Kerber’s motion for a new trial, 300 F. Supp. 1205:
“We believe that the case of Stevens v. Durbin-Durco, 377 S.W.2d 343, 346-348 (Mo.S.Ct.1964) eor™ectly states the applicable rule of law:
“ ‘The manufacturer of a product which is potentially dangerous when applied to its intended use (citing cases) or reasonably certain to place life and limb in peril when negligently made (citing cases) is under a duty to a remote user to exercise ordinary care in its manufacture, and is liable to a remote user injured thereby if the injury results from a latent defect bespeaking lack of ordinary care in making the product.’
******
“ ‘[W]here the danger is open, obvious and apparent, or the user has actual knowledge of the defect or danger, there is no liability on the manufacturer.’ Under that rule, we do not believe that reasonable men could differ in finding that the danger was not latent or concealed, but on the contrary, it was open, obvious and apparent to all who used it, particularly the plaintiff who had — by his own admission — actual knowledge of the danger and an awareness that he could be hurt if he stuck his hand in the uncovered opening.
******
“Not only do we find no liability as a matter of law, but even if there were liability we do not believe that plaintiff could recover because he either was contributorily negligent or else he assumed the risk by choosing to operate the machine with the cover off, removing ‘doubles’ from the side of the machine rather than from the rear and placing his hand into the uncovered area all done with the knowledge that the uncovered area was obviously dangerous, and that the safer procedure would be to remove the ‘doubles’ from the rear of the machine.”
The case of Stevens v. Durbin-Durco, upon which Judge Duncan relied, is the most recent expression of the Supreme Court of Missouri on the products liability of a manufacturer for injury sustained by a remote user where the machine itself was free of latent defects or concealed dangers. It is of significance that the Missouri Supreme Court concluded its opinion in Stevens as follows:
«* * * Accordingly, where the
product is free of latent defects and concealed dangers; where the perilous nature of the product and the danger of using it is obvious and not concealed ; where its normal functioning creates no danger not known to or appreciated by the user; where it is properly manufactured to accomplish the function for which it is designed, the manufacturer has ‘satisfied the law’s demands’ and is under no duty to make it ‘more’ safe by providing a built-in safety device. (Citations omitted.)” 377 S.W.2d at 348.
In this case there was no latent defect or concealed danger. The cover for the side of the machine had to be removable so that the operators could comply with the manufacturer’s cleaning instructions and with the law of the State of Missouri. Plaintiff had seen and worked with the machine with the cover both on and off. He was aware of the danger of sticking his hand into the place where it was injured. There was a perfectly safe place for him to remove the doubles at the rear of the machine. Under the controlling law of the State of Missouri plaintiff may not recover against the manufacturer.
Affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
BOYCE F. MARTIN, Circuit Judge.
Litton Microwave Cooking Products Division of Litton Systems, Incorporated appeals and the National Labor Relations Board seeks enforcement of an unfair labor practice order issued by the National Labor Relations Board, 283 N.L.R.B. No. 144 (May 15, 1987), which found Litton to be in violation of § 8(a)(1) and § 8(a)(5) of the National Labor Relations Act. We reverse the decision of the Board.
The issue before us concerns the decision of Litton to transfer the production of microwave ovens from its facilities in Minneapolis, Minnesota to its plant in Sioux Falls, South Dakota. Prior to 1977, Litton produced all of its microwave ovens (a domestic countertop oven, an international coun-tertop oven, a commercial oven and a kitchen range with an oven) at facilities located near Minneapolis, where its employees were represented by intervenor United Electrical, Radio and Machine Workers of America and its Local 1139. In 1977, Litton established a new plant in Sioux Falls and began manufacturing domestic coun-tertop ovens. By November 1981, Litton had ceased producing domestic countertop ovens in Minneapolis and was manufacturing all of these particular ovens in Sioux Falls. Before the establishment of the Sioux Falls plant, over 1,200 employees were represented by the Minneapolis bargaining unit. As the number of employees at the Sioux Falls facility increased, the number of employees at the Minneapolis plant decreased through lay-offs until, by November 1981, there were no more than 350 bargaining unit jobs remaining in Minneapolis. During the period from 1977 through 1981, the intervenor union did not contest the transfer of production from Minneapolis to Sioux Falls.
In 1981, Litton and the union began to discuss the relocation of the production of the international countertop ovens. Thomas Phillips, vice president of Human Resources for Litton, told Rocco DeMaio, financial secretary of Local 1139, that Litton was losing $3,000,000 annually on its range business, and, as a result, Litton was beginning a study to determine where it could most effectively manufacture its products. In October 1981, Phillips informed DeMaio that Litton would transfer the production of certain international models to Sioux Falls and would consequently reduce its work force in Minneapolis.
On November 5, 1981, Phillips and De-Maio, along with several other representatives of Litton and the union, met to discuss the transfer of production. DeMaio gave Phillips a letter with a formal request for studies and analyses concerning the relocation of work so that the union would have the information necessary to prepare for Litton a proposal designed to keep jobs in Minneapolis. Phillips denied that Litton had any formal studies or analyses relevant to the transfer of production and also stated that Litton had no obligation to bargain with the union over the decision to transfer work. Phillips maintained, however, that Litton was prepared to discuss the effects of the decision to relocate production. Discussions concerning the union’s request for information continued for several days, as DeMaio asserted repeatedly that the union lacked the information necessary for it to make a proposal regarding the transfer of production. Later that month, Phillips notified DeMaio that the production of the international models would be relocated to Sioux Falls.
In March 1982, Phillips informed DeMaio that Litton was conducting studies concerning the transfer of production of the commercial microwave ovens. On March 9, Phillips and DeMaio met to discuss the relocation of the commercial line to Sioux Falls. DeMaio made a request for information relating to the relocation, which included a request for the same information that he had asked for in his letter of November 5. Phillips advised DeMaio that Litton would share with the union the data it had considered when examining the feasibility of relocating production to Sioux Falls. After several exchanges of letters, Phillips and DeMaio met again on March 19. At this meeting, DeMaio repeated his requests for more information, and Phillips replied that the union had received all relevant information. Phillips also stated that no formal studies or analyses existed. At the final meeting on March 26, DeMaio again requested studies and analyses and declared that he was not prepared to go ahead until he had received the requested information. On that same day, Phillips told DeMaio that Litton had decided to transfer the production of commercial ovens to Sioux Falls.
Following the filing of unfair labor practice charges by the union, the Regional Director of the National Labor Relations Board issued a complaint against Litton. The complaint, as subsequently amended, alleged in relevant part that Litton had violated sections 8(a)(1), (3), (5) and 8(d) of the National Labor Relations Act (29 U.S.C. §§ 158(a)(1), (3), (5) and 158(d)) during 1981 and 1982 by relocating certain bargaining unit work in repudiation of its collective bargaining obligations.
An administrative law judge heard the complaint against Litton during April and June of 1983. On December 9, 1983, the administrative law judge issued his decision, recommending that the complaint be dismissed in its entirety because the management rights clause in the collective bargaining agreement between Litton and the union reserved for Litton the right to relocate production unilaterally.
The union and the General Counsel of the National Labor Relations Board filed exceptions to the . administrative law judge’s decision, and the case was submitted to the Board for decision. On May 15, 1987, a three-member panel of the Board issued a split decision. Two members of the Board joined in a decision to reverse the order of the administrative law judge; they found that Litton had violated sections 8(a)(1) and (5) by failing or refusing to bargain in good faith with Local 1139 concerning the relocation of the international and commercial lines and by failing or refusing to furnish the union with available information necessary for and relevant to the union’s function as bargaining representative. The dissenting member of the Board agreed with the administrative law judge that the management rights clause in the parties’ collective bargaining agreement permitted Litton’s unilateral relocation of its international and commercial lines.
On appeal, the National Labor Relations Board seeks enforcement of its order, arguing that substantial evidence supports its conclusions that Litton violated sections 8(a)(1) and (5) by refusing to bargain over the relocation of production and by refusing to supply available, relevant information to the union. Litton requests that the Board’s decision be set aside because: (1) its decision to transfer production of microwave ovens was not a mandatory subject of bargaining under section 8(d); (2) the management rights clause reserved to it the right to relocate production; (3) the union waived any right it had to bargain over the transfer of production; and (4) it provided the union with available, relevant information. We agree with Litton that the administrative law judge correctly interpreted the management rights clause as reserving Litton’s right to transfer production unilaterally.
Our standard of review is well established. We may not disturb the findings of the National Labor Relations Board where there is substantial evidence on the record considered as a whole to support the Board’s findings. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951). A court reviewing the substantiality of evidence supporting a Board decision “must take into account whatever in the record fairly detracts” from the weight of the evidence, Universal Camera, 340 U.S. at 488, 71 S.Ct. at 464, and the evidence supporting a Board conclusion may be less substantial when an examiner, such as an administrative law judge, has drawn conclusions different from the Board’s than when the examiner has reached the same conclusion. Universal Camera, 340 U.S. at 496, 71 S.Ct. at 468. Although the Board is free to find facts and to draw inferences different from those of the administrative law judge, a “reviewing court has an obligation to examine more carefully the evidence in cases where a conflict exists.” Pease Co. v. National Labor Relations Board, 666 F.2d 1044, 1047-48 (6th Cir.1981); Larand Leisurelies, Inc. v. National Labor Relations Board, 523 F.2d 814, 820 (6th Cir.1975). The significance, on review, of an administrative law judge’s decision largely depends on the importance of witness credibility in the particular case, Universal Camera, 340 U.S. at 496, 71 S.Ct. at 468, and we will not normally disturb the credibility assessments of the Board or an administrative law judge, “who has observed the demean- or of the witnesses.” National Labor Relations Board v. Baja’s Place, 733 F.2d 416, 421 (6th Cir.1984); National Labor Relations Board v. Cement Transport, Inc., 490 F.2d 1024, 1029 n. 5 (6th Cir.1974).
Because the National Labor Relations Board and the administrative law judge reached differing conclusions in this case, it is appropriate for us to examine carefully the evidence supporting the Board’s order. Pease, 666 F.2d at 1047-48; Larand, 523 F.2d at 820. After thoroughly reviewing the record, we conclude that, under the above-described standards, the decision of the Board is not supported by substantial evidence.
Despite the existence of a broadly-phrased management rights clause in the collective bargaining agreement, a majority of the Board found that Litton had refused to bargain over the transfer of production in repudiation of its collective bargaining obligations. We cannot agree with this finding of the Board. The management rights clause reserved for Litton “all of the customary rights of management” including, but not limited to, the right to direct the working force, “to transfer, and to determine size of work force, layoffs, product and production methods.” Thus, the management rights clause not only reserved all of the customary rights of management for Litton but also specifically reserved the right to determine production methods and the size of the work force and the right to lay off workers.
A collective bargaining agreement must, moreover, “be interpreted in light of the ‘common law’ of the shop — a composite of the history and practices of the industry and the disputing company and union.” National Labor Relations Board v. Construction & General Laborers’ Union, 778 F.2d 284, 289 (6th Cir.1985). See also United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 579-80, 80 S.Ct. 1347, 1351-52, 4 L.Ed.2d 1409 (1960). An examination of the history and practices of Litton and the union in this case reveals that the union believed that the collective bargaining agreement permit ted Litton to relocate production unilaterally. For example, the union never challenged the loss of bargaining unit jobs in Minneapolis that resulted from the transfer of domestic countertop oven production to Sioux Falls from 1977 to 1981. Even though the union was aware of the transfer of domestic countertop production and, in its newsletters, attributed the Minneapolis layoffs to the transfer of production to Sioux Falls, the union never requested bargaining over Litton’s relocation of work during the 1977-81 period. In addition, during the 1982 negotiations, Litton proposed a more detailed management rights clause that DeMaio rejected as being unnecessary because Litton had the right to do anything it wanted under the existing management rights clause.
We must also question the substantiality of the evidence supporting the Board’s finding that Litton repudiated its obligation to bargain over the relocation of production because the Board apparently disregarded the administrative law judge’s assessments of the credibility of important witnesses. The administrative law judge observed the demeanor of witnesses Phillips and De-Maio, and stated in his decision that Phillips testified “precisely, unequivocally and unambiguously” while DeMaio was “evasive and clearly bent on making his case.” As a consequence, the administrative law judge discredited DeMaio’s testimony. The Board’s decision rests, in part, upon the testimony of DeMaio, a witness specifically discredited by the administrative law judge who observed his demeanor, and we believe that this disregard of the credibility assessments of the administrative law judge “fairly detracts” from the weight of the evidence supporting the Board’s conclusions. Universal Camera, 340 U.S. at 488, 496, 71 S.Ct. at 464, 468. See also Baja’s Place, 733 F.2d at 421; Cement Transport, 490 F.2d at 1029 n. 5.
The Board argues that the management rights clause did not reserve to Litton the right to relocate production in “clear and unmistakable” language, as required by law, and that Litton therefore violated its collective bargaining obligation to bargain over the transfer of production. See Metropolitan Edison Co. v. National Labor Relations Board, 460 U.S. 693, 708, 103 S.Ct. 1467, 1477, 75 L.Ed.2d 387 (1983); Timken Roller Bearing Co. v. National Labor Relations Board, 325 F.2d 746, 751 (6th Cir.1963). However, given the explicit reference to layoffs and production methods in the management rights clause, the history of uncontested work relocation and layoffs, and the unfavorable assessment by the administrative law judge of the credibility of a witness relied upon by the Board, we conclude that the Board’s position is not supported by substantial evidence.
In summation, we agree with the administrative law judge’s determination that the management rights clause in the collective bargaining agreement reserved for Litton the right to transfer production from Minneapolis to Sioux Falls unilaterally. Litton did not, therefore, violate any obligation to bargain with the union over the relocation of production or to provide the union with information relevant to bargaining over the relocation of work. We consequently find that the National Labor Relations Board’s decision that Litton violated sections 8(a)(1) and (5) by refusing to bargain with the union over the relocation of work and by refusing to provide the union with information relevant to the relocation to be unsupported by substantial evidence. Because we believe that Litton did reserve for itself the right to relocate production, we need not consider and we express no opinion as to whether such relocation of production is, in the absence of a provision effectively reserving the right to transfer production, a mandatory subject of bargaining under § 8(d) of the National Labor Relations Act.
Accordingly, we grant Litton’s petition to review the order of the National Labor Relations Board, and we deny the Board’s cross-application for enforcement of its order.
It is so ordered.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
VAN ORSDEL, Associate Justice.
These appeals involve litigation growing out of the final settlement of the estate of Stilson Hutchins. William J. Dante held the legal title to all the Hutchins estate, as trustee, under a deed from Hutchins and wife dated March 7, 1910. He had been engaged since November 13, 1911, in administering the trust under the direction of the equity court. On March 29, 1924, Dante, as trustee, received from Wardman, Bones & Hobbs an offer to purchase certain real estate belonging to the Hutchins estate, known as the Highlands-Westmoreland property. The offer, hereafter referred to as the “Wardman offer,” concluded as follows: “The sellers agree to pay the sum of thirty-six thousand dollars ($36,000) jointly to Z. M. Knott and the Wardman Construction Company as compensation for services rendered in negotiating this sale.” The “Wardman offer” was submitted to the beneficiaries interested in the Hutchins estate, and accepted by all excepting Walter Hutchins.
In May, 1924, the parties interested in the estate of Hutchins, which had gone through a series of litigation in the courts of the District of Columbia extending over a period of twelve years, opened negotiations for the settlement of their respective interests in the estate. A proposition of settlement was submitted by Rose Keeling Hutchins, wife of Stilson Hutchins, deceased, which, among other stipulations, contained the following: “(c) Conveyance of all property to three trustees under deed in trust, (e) Trustees to be appointed by the parties as follows: One by Mrs. Hutchins, one by Walter Stilson Hutchins, and the third by Miss Mildred Rogers and Mr. Lee Hutchins.”
An agreement was finally reached whereby all the property, real and personal, belonging to the estate was conveyed to the following three trustees: Thomas Morton Git-tings, selected by Rose Keeling Hutchins; Charles H. Merillat, selected by Walter Stil-son Hutchins; and Myer Cohen, selected by Mildred Rogers Penn and Lee Hutchins. It .was stipulated in the agreement that in the event of the death, disability, resignation, or removal of any one of said trustees, the party designating such trustee should have full authority to appoint a successor, and should also have power to remove the trustee by him or her designated. The agreement further provided that the trustees should, as speedily as possible, sell all the real estate and distribute the net proceeds in equal shares among the beneficiaries, Mrs. Hutch-ins, Mildred Rogers Penn, Walter Hutchins, and Lee Hutchins.
When the negotiations for settlement were opened, Mrs. Hutchins made it a condition precedent to any settlement that the “Ward-man offer” should be put through, and in order to procure the agreement Walter Hutchins gave his assent to the acceptance of the “Wardman offer.” Dante conveyed the property to the trustees, and the “Ward-man offer” was- redrafted to run to the new trustees instead of Dante. The settlement agreements weye not finally signed until May 19,1924, and on May 24th Wardman submitted the redrafted offer and gave the purchasers 90 days-after acceptance within which to settle. The terms of the redrafted offer were in all particulars the same as the original offer, excepting it ran to the new trustees instead of to Dante. The sale was closed on August 18, 1924, and the net proceeds of sale, cash and deferred payment notes, were distributed by the trustees to the several beneficiaries, one-fourth to each. On November 5, 1924, Lee Hutchins died testate, having devised and bequeathed his entire estate to his niece, Mildred Rogers Penn. She thereby became the owner of a one-half interest in the proceeds of the estate, and, as such, was the owner of $350,000 of deferred purchase-money notes derived from the sale to Wardman.
This bill was filed on November 19, 1925, by Merillat, trustee, and Walter Hutchins, one of the beneficiaries, all other parties in interest refusing to join in the bill. The trustee, Gittings, and the other beneficiaries of the trust, were made parties defendant with Cohen.
It appears that the sale to Wardman was negotiated by Knott, who was connected with the firm of Tyler & Rutherford, real estate brokers. On April 26, 1924, Wardman 'announced the withdrawal of the original “Wardman offer,” because of the objection by Walter Hutchins to the amount of the brokerage commission; and Knott, fearing that the sale would not be completed and he would lose his commission, enlisted the services of Cohen to intercede with Wardman to hold the offer open. This Cohen did. He succeeded on May 3,1924, in securing the assent of Wardman to the revival of the offer. Later, when the negotiations leading to the settlement and appointment of the trustees was pending, it was suggested that the “Wardman offer” should be redrafted to run to the new trustees. This was done, and prior to the appointment of the trustees for the completion of the settlement, the amended offer was accepted by the beneficiaries in writing as follows:
Washington, D. C., May 16, 1924.
“Whereas, a written offer has been submitted by Harry Wardman, James D. Hobbs and Thomas Bones for the purchase of the Highlands and the Westmoreland, and the lot adjoining the Westmoreland on the West, it is hereby agreed by the undersigned that unless a better offer for the property be obtained on or before May 20, 1924, that the said offer be accepted.
“Mildred Rogers Penn.
“Walter Stilson Hutchins.
“Lee Hutchins.
“Rose Keeling Hutchins.”
When the commission was paid, and a cheek for $18,000 (one-half the total commission) was delivered by Cohen to Knott, he suggested to Knott the payment of his fee for services rendered him in negotiating with Wardman. Some dissatisfaction was expressed on the part of Knott, which is not here material, as he is not a party to this action, but it resulted in the payment to Cohen of the sum of $2,000 as a fee for his services rendered in the ease. A portion of this was paid by Knott, and a portion of it by Tyler & Rutherford, with whom Knott divided -his share of the commission. This likewise is unimportant.
■ The acts of malfeasance charged against Cohen, trustee, are that he and Dante coerced Knott into paying Cohen out of his commission $2,000; that in the sale of what is known as Convention Hall by the trustees, Cohen made unreasonable fire insurance ex-actions at the expense of the purchasers upon the improvements on the real estate pledged as security, for deferred purchase money; and that Cohen, as the personal attorney of Mildred Rogers Penn, sold her deferred purchase-money notes from the sale of the Highlands-Westmoreland property at an excessive discount, thereby causing her a substantial loss.
Mrs. Hutchins answered the bill, denying knowledge of the averments therein, and adding “that she wishes to state, however, that she greatly deprecates the filing of said bill.” Gittings, trustee, filed no answer, and a decree pro confesso was entered against him. Defendant Mrs. Penn answered fully, replying to the various allegations of the bill, opposing the relief prayed, and praying the retention of defendant Cohen as trustee. Cohen likewise answered the bill fully. This left Merillat and Walter Hutchins as the only parties plaintiff.
From the decree ordering Cohen to pay over to the trustees the sum of $2,000, being the amount received by him from Knott, the appeal in No. 4709 is prosecuted; and from the decree denying the prayer of the bill that Cohen be disqualified from further acting as a trustee, the appeal in No. 4710 is prosecuted.
It will be observed that the contract of sale in this case was made by the beneficial owners themselves. The original “Wardman offer” was submitted to Dante, the trustee, •and accepted in its modified form by the beneficiaries themselves at a time before the trustees had been appointed. By this acceptance they agreed to the amount that should be paid Knott; consequently this amounted to a fixed obligation against the trust estate which came into the hands of the trustees. It was an obligation which the trustees were required to discharge. By the payment of the money to Knott, the net trust estate was not depleted to any extent whatever. When the money passed to Knott it became his personal property, and the estate, or the beneficiaries under the estate, had no claim against it, and it is not clear just how the estate could now claim the return of any portion of the money decreed to be paid by Cohen.
The service was performed by Cohen prior to the appointment of the trustees. It was a personal service performed for Knott and not on behalf of the estate. The $2,000 was paid Cohen for his services. It was a transaction entirely between Knott and himself of which Knott has made no complaint. Cohen should not be required to pay into the trust estate the results of this private transaction between himself and Knott. Cohen, when he rendered the service for Knott, was not then a trustee. It does not appear that he had even notice that he would be selected as a trustee. Indeed, the proposition of Mrs. Hutchins, who was not even Cohen’s client, for the appointment of trustees, had not been made at this time. If Cohen’s fee had been paid by Knott on May 3, 1924, when the service was completed, it could not be said that because of the subsequent creation of the trust Cohen could under any rale of equity or justice be compelled to pay his fee into the trust estate. If he could not, the mere fact that he delayed presenting his bill to Knott would not change the situation.
But it is contended that the redrafted “Wardman offer” which was directed to the trustees was a separate and distinct transaction from the original offer which Wardman had terminated, but which had been renewed through the efforts of Cohen on Knott’s behalf. We are not impressed with this contention. It was a single transaction. It was the original offer which Mrs. Hutchins made a condition precedent to the creation of the trust and the appointment of trustees, and it was the original “Wardman offer” that was accepted as a condition of the execution of the settlement deeds. If this offer had not been alive and capable of acceptance, the deeds would have been a fraud upon Mrs. Hutchins, for the acceptance of the offer was her condition for executing the deeds. The acceptance finally of the offer by the beneficiaries was therefore the act of the beneficiaries themselves. They sold the property. They agreed to the amount of the commission to be paid and to whom it should be paid. This was an obligation resting against the estate when the trustees assumed their duties. When the beneficiaries signed the acceptance, they signed away all interest in the amount therein involved. It is difficult to understand, after the obligation has been discharged and the money paid to the parties entitled to it, upon what theory Walter Hutchins or his trustee can assert any equitable or legal claim therein.
This brings us to the charge contained in the bill that Cohen induced Mrs. Penn to dispose of promissory notes in the sum of $350,000, derived from the sale of the Highlands-Westmoreland property, at an excessive discount. It appears that these notes to the amount of $.175,000 were received by Mrs. Penn as her share in the distribution of the proceeds of the sale by the trustees. She subsequently received notes in a similar amount as the sole legatee under the will of her únele, Lee Hutchins, who had previously received them from the trustees as his portion derived from the sale of the same property. Mrs. Penn, in her answer to the bill, alleges that in this transaction Cohen acted as her attorney, and the sale was made with her full approval. The notes distributed to Mrs. Penn and those inherited from her uncle were her property with which she could do as she pleased. If she saw fit to give them away, it was no concern of Walter Hutchins or his trustee.
The trustees in the handling of this estate were not only general trustees, but they each occupied a special fiduciary relation to the particular beneficiary by whom he had been chosen. Not only did the beneficiary reserve the right to discharge the trustee selected by him and to substitute another if deemed advisable, but the contract under which the trust was created and the trustees appointed was based upon this personal relation. The trust estate was not one in the hands of the court with trustees appointed by the court and directly responsible to the court, with compensation to be paid for their services out of the trust estate. The- trust was created by the beneficiaries under a contract, each beneficiary selecting his own trustee to represent him in carrying out the trust, and the deed further stipulated that: “The compensation of each trustee shall be paid wholly by the beneficiary whom he represents and not out of the estate hereby conveyed.”
It will be observed that no action by the court was necessary to terminate the trusteeship. It was of such á personal character that when the proceeds from the sale of a certain property was distributed among the beneficiaries, the trusteeship as to that portion of the estate was terminated. This was the situation ip. regard to the notes in question. They were the individual property of Mrs. Penn, no longer a part of the estate, or connected with the trust. Hence she alone could' be heard to complain of the conduct of Cohen in this particular transaction.
Cohen’s action in the insurance matter growing out of the sale of Convention Hall was in the interest of the trust estate. It was acquiesced in by all the parties. Merillat testified: “I told the purchasers that if it was satisfactory to them, it was satisfactory to me.” The insurance was necessary for the protection of the estate. It was paid,for by the purchasers, who are not here complaining. The court below was right in ignoring this testimony as ground for the discharge of Cohen from his trusteeship.
We must not be understood as holding that the mere indifference or opposition of beneficiaries or trustees can defeat the right of one who seeks the removal of a trustee who has been guilty of misconduct in the discharge of his duties, but we think that there is no such legal incompatibility, of interest here shown between the transactions of Cohen and the trusteeship as are usually condemned, where the trustee places himself in a position of receiving benefits from funds which he has personally been instrumental in paying out of the trust estate. The court below therefore was in error in holding that the $2,000 paid by Knott to Cohen was “a profit which he made as trustee out of the trust estate.” It came to Cohen through a private transaction between him and Knott, and independent of any connection with the management of the estate.
So much of the decree as is appealed from by Myer Cohen, trustee, is reversed, with costs, and so much of the decree as is appealed from by Charles H. Merillat, trustee, and Walter Stilson Hutchins, is affirmed, with costs, and the cause is remanded for further proceedings, not inconsistent with this opinion.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
WOODBURY, Circuit Judge.
This is an appeal by the plaintiff from judgments entered for the defendants upon verdicts returned for them by a jury, (the verdict for the defendant Postage Meter Company was by direction and order of the court), in an action brought under Public Laws of New Hampshire, 1926, c. 302, §§ 11-14 for negligently causing the death of the plaintiff’s intestate.
Jurisdiction is based upon diversity of citizenship and an amount in controversy, exclusive of interest and costs, in excess of $3,000.
The decedent died as a result of injuries received when he was run over by an automobile operated by the defendant Phinney who at the time was acting within the scope of his employment by the defendant Postage Meter Company. The accident happened in the following way. About dusk, that is between sunset and complete darkness, on the evening of October 11, 1938, the decedent and one Braley were riding on a two-horse lumber wagon in a generally north easterly direction along U. S. Route 3, called the Daniel Webster Highway, toward Concord, New Hampshire. The platform body of their vehicle had been removed, and the decedent sat facing forward on boards nailed across the reaches just in front of the rear axle. Braley, who drove, sat on boards similarly nailed across the forward ends of the reaches.
At a point on the highway about two miles from the business district of Concord an automobile operated by one Humphrey approached them from the rear. Apparently Humphrey did not see the horse-drawn vehicle until too late to avoid striking it, because, although just before impact he swung sharply to his left, the right side of his car collided with the left rear wheel of the wagon. Humphrey then drove on by without further contact with either the vehicle, its occupants, or the team. The force of the collision, however, threw the decedent forward and to his left behind the Humphrey car, and while he lay in the road beside the vehicle upon which he had been riding he was run over by the Phinney car which was following in Humphrey’s wake.
At the trial in the District Court the defendant Phinney, who for convenience will be referred to hereafter simply as the defendant, seasonably moved for a directed verdict on the ground, among others, that “There is no evidence from which it can be found that (he) negligently or carelessly ran into or over the decedent Which-er”. This motion was denied and he excepted. Before us, “Invoking the familiar rule that the successful party below is entitled, on appeal by the other party, to urge in support of the judgment or decree as rendered any legal grounds appearing in the record” (Cochran v. M & M Transportation Co., 1 Cir., 110 F.2d 519, 520), he argues that from the evidence “no conclusion can be drawn other than when (he) became aware of the danger he had no time for anything but instinctive action”, and therefore that the judgment in his favor should stand under the rule that “Instinctive action, when there is no time at all to think and choose, cannot be said to be careless, unless the actor is shown to be unfit to act in an emergency calling for such action”. Collette v. Boston & M. Railroad, 83 N.H. 210, 217, 140 A. 176, 181.
Turning to the record we find that this contention, as stated, is sustained. There is nothing in the record to indicate that the defendant was in any way unfit to act in an emergency, and it appears that the first notice which he received, or could have received, that there was trouble ahead was when the Humphrey car swung sharply to its left disclosing the horse-drawn vehicle ahead. That car was then within ten feet of the rear of the wagon, and the defendant’s car, travelling between thirty and thirty-five miles per hour, was between fifty and sixty feet behind Humphrey. Simple calculations based upon these data indicate that the defendant had at the most not over two seconds in which to act after he became aware of the danger. The New Hampshire cases establish that in such a short interval of time there is opportunity only for instinctive action, and that such action, without proof of unfitness to act in an emergency, does not provide a basis for a finding of negligence. See Miller v. Daniels, 86 N.H. 193, 196, 166 A. 30; Ramsdell v. John B. Varick Company, 86 N.H. 457, 462, 170 A. 12; Praded v. Magown, 88 N.H. 405, 408, 190 A. 287; Kardasinski v. Koford, 88 N.H. 444, 446, 190 A. 702, 111 A.L.R. 1017; Morin v. Morin, 89 N.H. 206, 208, 209, 195 A. 665.
But this is not the end of the case as the defendant seems to assume. Since “this quality of instinctive action inheres in the emergency doctrine” (Kardasinski v. Koford, supra [88 N.H. 444, 190 A. 703, 111 A.L.R. 1017]), and since the emergency doctrine cannot be invoked by one who himself negligently caused the emergency to exist (Cutler v. Young, 90 N.H. 203, 206, 6 A.2d 162), we must examine the record to see whether or not the defendant could be found to have been negligent in placing himself in such a position that when he first became aware of danger he had time only to act instinctively.
It appears that the defendant came up behind Humphrey a little less than a mile from the scene of the accident. From that point on he made no attempt to pass but instead reduced his speed to Humphrey’s and followed fifty or sixty feet behind him. Both cars proceeded at a speed of thirty to thirty-five miles per hour. The highway over which the defendant drove in the way just described is straight and approximately level except that about five hundred feet east of the place where the accident occurred it begins to slope gradually down grade. A civil engineer testified that the paved portion of the highway near the scene of the accident was between thirty-three and thirty-four feet wide. He described it as “a hard surface black top road with what I would call a fairly high crown. The edges of it are somewhat irregular but in general they are straight and on either side of the road is a shallow gutter.”
The section of the highway under discussion runs through sparsely wooded country. Some houses and other buildings border it at irregular intervals, but none of them is set close together. There are no intersecting highways, the only intersection in the vicinity being at approximately the point where the accident occurred.
Clearly reasonable men might find from the facts outlined above that the defendant might have used greater care than he did, but that is not the question. In cases of this sort the question is whether or not such men could find that the defendant, in acting as he did, used as much care as the ordinary man of average prudence would have used under the circumstances. Racette v. Sunlight Baking Company, 85 N.H. 171, 155 A. 254.
The defendant had the right to suppose that traffic would move as it had a right to, that is, in a reasonable way (Rouleau v. Blotner, 84 N.H. 539, 152 A. 916), and although he was not entitled to assume that the conduct of other users of the highway would be perfect (Himmel v. Finkelstein, 90 N.H. 78, 4 A.2d 657), it was not negligent for him to assume, there being nothing to indicate the contrary, that others would do their dpty and drive with due care. Piateck v. Swindell, 84 N.H. 402, 151 A. 262; Jackson v. Smart, 90 N.H. 153, 5 A.2d 713. It was his duty to drive in sueh a way that he would have time to cope with any danger “likely to be encountered” but “he is not to be held careless because he did not look out for dangers he had no occasion to anticipate.” Piateck v. Swindell, supra; see, also, Loughlin v. Johnson, 89 N.H. 191, 193, 195 A. 685. The question then is whether or not reasonable men could find on the testimony in the record that the defendant, as he approached the scene of the accident, ought as a reasonable man to have anticipated that something might occur ahead so suddenly that he would have time only for instinctive action and so that he should have left a greater interval between his car and Humphrey’s. We think this question should be answered in the negative.
To say that situations calling for instant action may confront any automobile driver at any time is to state the obvious, but it does not follow that due care requires every automobile driver to drive in the constant expectation that such a situation is likely to arise. Ordinary men of average prudence do not so drive. For instance, there is far greater likelihood for a call for immediate action when driving on a busy city street on a rainy evening than there is when driving in broad daylight over a straight highway traversing flat, open, uninhabited country.
Clearly the defendant as he approached the scene of the accident ought to have driven in the expectation that Humphrey might slow down, turn out around some slow moving vehicle or pedestrian, turn off the highway, or even come to an ordinary stop, any of which manoeuvers he could have met with considered action, but we do not think due care required him to drive in anticipation that some person or animal would dash out in front of him or Humphrey or that Humphrey would fail to see an obstruction in the highway ahead and, instead of avoiding it, run into it. In short, in view of the nature - of the highway arid the character of the country through which it ran, in view of the clear weather .and good visibility, in spite of the time of day when the accident occurred, and in view of the apparent care with which Humphrey was driving, we fail to see how reasonable men could find that the defendant failed in his legal duty by not driving in anticipation of the likelihood of the occurrence of an emergency so sudden that only instinctive action was possible.
The judgments of the District Court are affirmed, without costs.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
This is a suit on a converted policy of war risk insurance which was kept in force by the payment of premiums until February 5, 1931. The only question raised by the appeal is whether there was sufficient evidence that plaintiff was totally and permanently disabled on that date to carry the case to the jury. We do i!ot think that there was. There is evidence which justifies the conclusion that on that date and prior thereto plaintiff was suffering from visceroptosis, or falling of the organs of the abdominal cavity, and also from hypothyroidism, and that these, together with injury to a foot which he sustained while serving in the Navy, resulted in partial disability; but there is no evidence to justify the conclusion that at the time of the lapse of the policy the disability had become total or that it was of such character that it could not have been relieved by proper treatment. On the contrary, it appears that plaintiff worked as foreman of. a print shop with a printing company of which he was vice president until the fall of 1931, at a salary of $225 per month; that during the winter of 1932-1933 he was engaged with another in the operation of a printing company, which they sold in the spring of 1933; and that, from April, 1933, until December, 1934, he worked for another printing company, making about half time and earning an average of around twenty-two or twenty-three dollars per week. While the plaintiff testified that he quit work in the fall of 1931 because he was unable to work, there is no evidence that his condition, even at that time, could not have been relieved by proper treatment, and no evidence that his subsequent employment was fraught with danger to his health. Under the circumstances, the government’s motion for a directed verdict should have been granted. Mikell v. United States (C. C.A.4th) 64 F.(2d) 301, 303; United States v. Farnsworth (C.C.A.4th) 77 F.(2d) 91; Boone v. United States (C.C.A.4th) 79 F. (2d) 702; United States v. Derrick (C.C.A. 4th) 83 F.(2d) 99. The judgment appealed from will accordingly be reversed.
Reversed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
HEALY, Circuit Judge.
This is a suit by the United States for an •'injunction and restitution and for treble •damages under § 205 of the Housing and Rent Act of 1947, as amended, 50 U.S.C.A. Appendix, § 1895. It was filed May 9, 1949, and with the court’s permission' an ¡amended complaint was filed September 6 thereafter. Upon .trial the court found that the defendants had demanded and received from tenants amounts in the total sum of $6,761.80 in excess of the legal maximum rents. It granted an injunction and decreed restitution to tenants of the excess rentals collected, but did not award judgment for damages, single or treble, as prayed by the United States.
Both parties appealed. The defendants failed to present a' brief in support of their appeal as required by our rules, and did not participate in the oral argument, but they have since filed a belated brief setting out their contentions. We have examined it and are of opinion that none of the several points argueid has merit sufficient to justify discussion.
The cross-appeal of the United States challenges the court’s failure to award damages, single or treble, for the whole or any part of the period falling within the one year statute of limitations. The government contends (1) that allowance of damages is mandatory under ■§ 205 as amended April 1, 1949, and that recovery should have been allowed at least as to overcharges which occurred subsequent to that date; (2) that the 1949 amendment retroactively permits the United States to recover damages in the amount (or treble the amount) of the overcharges occurring prior to the effective date of the amendment and within the one year limitation period where, as here, the tenant fails to institute action; and (3) that the court was in error in finding that the violations committed by the defendants were neither willful nor the result of failure on their part to take practicable precautions.
A glance at the statutory history will be helpful. During the period beginning July 1, 1947, the effective date of the Housing and Rent Act of 1947, through March 31, 1949, it was exclusively the right of the tenant to sue under § 205 for damages for rent overcharges. The Expediter was limited to actions for injunction and restitution as his sole means of enforcing compliance. The amendment of April 1, 1949, restored the right of the United States to sue for damages. The relevant portions of § 205, as it has since existed, are shown on the margin.
From the early years of rent control this court, and the courts generally, have held that the district court upon a finding of violation must grant a judgment in damages in an amount at least equal to the amount of the overcharges. In Fontes v. Porter, 9 Cir., 156 F.2d 956, 958, we said: “Lack of willfullness, coupled with the taking of practicable precautions against the occurrence of a violation, operates only to reduce damages to the amount of the overcharge.” Consult also Woods v. Haydell, 5 Cir., 178 F.2d 914, 915. This mandatory principle is in nowise affected by a grant of restitution to the tenant. Restitution is an equitable remedy resorted to under § 206(b), independently of the award of damages. Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332; Woods v. Richman, 9 Cir., 174 F.2d 614, 616. Accordingly we are of opinion that the trial court erred in denying damages at least in the amount of the overcharges.
Two of the circuits have now held that the 1949 amendment, restoring to the United States the right to damages, is retroactive. United States v. Gianoulis, 3 Cir., 183 F.2d 378, 380; Miller v. United States, 5 Cir., 186 F.2d 937. In the first of these cases the court observed that prior to the 1949 amendment the tenant had a right of action to recover damages in treble' the amount of the overcharges, and' that after the amendment the landlord was liable to the tenant or to the United States, but not to both. “The amendment,” said the court, “created no new cause of action albeit it provided the machinery whereby, a new plaintiff, the United States, could assert the same cause of action and collect the same damages from the landlord when the tenant, within the time specified, had failed to take steps to enforce the landlord’s liability.” The amendment was thought to 'improve the legal techniques for enforcing an existing statutory remedy, this enlargement of the means of enforcement having been found necessary because the tenant, through fear of reprisal, had generally failed to bring suits to recover excess rentals. The Fifth Circuit in the case cited thought this reasoning valid and adopted it. Believing that these decisions are sound we are content to go along with them. We hold, therefore, thac the amendment should have. been applied retrospectively in this case.
The government contends that there is no evidentiary support for the finding that the violations committed were not willful nor the result of the failure to take practicable precautions. The evidence bearing on the point is certainly not strong, but we are unable to say that the finding is clearly erroneous. This being true the liquidated damages recoverable are the amount of the overcharges.
The judgment insofar as it grants restitution and injunctive relief is affirmed. Otherwise it is set aside and the cause is remanded for further proceedings Hot inconsistent with this opinion.
. “See. 205. Any person who demands, accepts, or receives any payment of rent in excess of the maximum rent prescribed under section 204 shall be liable to the person from whom he demands, accepts, or receives such payment (or shall be liable to the United States as hereinafter provided), for reasonable attorney’s fees and costs as determined by the court, plus liquidated damages in the amount of (1) $50, or (2) three times the amount by which the_ payment or payments demanded, accepted, or received exceed the maximum rent which could lawfully be demanded, accepted, or - received, whichever in either case may be the greater amount: Provided, That the amount of such liquidated damages shall be the amount of the overcharge or overcharges if the defendant proves that the violation was neither willful nor the result of failure to take practicable precautions against the occurrence of the violation. Suit to recover such amount may be brought * * * within one year after the date of such violation: Provided, That if the person from whom • such payment is demanded, accepted, or received either fails to institute an action under this section within thirty days from the date of the occurrence of the violation or is not entitled for any reason to bring the action, the United! States may institute such action within such one-year period. * * * ”
, Where restitution is decreed and statutory damages awarded, the treble damage award appears sometimes to have been reduced by the amount of the restitution required, and this seems to have been done at the instance of the rent control authorities. -See United States v. Gianoulis, 3 Cir., 183 F.2d 378; Miller v. United States, 5 Cir., 183 F.2d 937.. While this practice may be thought to-have statutory justification, we can see no possible basis in the law for deducting the restitution award where the damages found allowable are the amount of.' the overcharges, only.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
ON PETITIONS FOR REHEARING
Before GODBOLD, Chief Judge, BROWN, CHARLES CLARK, RONEY, GEE, TJOFLAT, HILL, FAY, RUBIN, VANCE, KRAVITCH, FRANK M. JOHNSON, JR., HENDERSON, REAVLEY, POLITZ, HATCHETT, ANDERSON, RANDALL, TATE, SAM D. JOHNSON, THOMAS A. CLARK and WILLIAMS, Circuit Judges.
ALVIN B. RUBIN and FRANK M. JOHNSON, Jr., Circuit Judges:
In Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir.) (en banc), cert. denied, 423 U.S. 839, 96 S.Ct. 68-69, 46 L.Ed.2d 58 (1975), this court held that juries “should not be instructed to take into account future inflationary or deflationary trends in computing lost earnings ...” Id. at 241. Reviewing that decision in our first en banc consideration of these two cases, we overruled Penrod and held admissible evidence of inflation’s probable effect on damage awards. Culver v. Slater Boat Co., 688 F.2d 280 (5th Cir.1982) (en banc) (Culver I). Concluding that the jury should resolve the issue on a case-by-case basis, we disclaimed any intention to establish a “single method” ior considering future economic conditions. Id. at 299 n. 23. Instead, we discussed several permissible methods the district courts and parties could use. Id. at 305-06.
While we were considering an application for rehearing in Culver I, the Supreme Court decided Jones & Laughlin Steel Corp. v. Pfeifer, — U.S.-, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983). The Court’s opinion in Pfeifer cites Culver I and confirms our holding that the fact-finder should consider inflation in determining an appropriate damage award. The Court’s opinion also emphasizes, however, a fundamental point that we did not fully consider in Culver I: that courts must not allow the adjustment for inflation to convert “ ‘[t]he average accident trial ... into a graduate seminar on economic forecasting.’ ”
Reconsideration of Culver I in light of Pfeifer has convinced us that our failure to identify a single method as the one trial courts should use in adjusting damage awards for inflation, particularly in jury trials, would extend an invitation to litigants to engage in just such a seminar. We, therefore, withdraw the opinion in Cul-ver I insofar as it goes beyond overruling Johnson, and hold that, in the absence of a stipulation by the parties concerning the method to be used, fact-finders shall determine and apply an appropriate below-market discount rate as the sole method to adjust loss-of-future-earnings awards to present value to account for the effect of inflation. While expert testimony and jury instructions must be based on this method, juries may be instructed either to return a
1. Jones & Laughlin Steel Corp. v. Pfeifer,-U.S.-, 103 S.Ct. 2541, 2556, 76 L.Ed.2d 768 (1983) (quoting Doca v. Marina Mercante Nicaraguense, S.A., 634 F.2d 30, 39 (2d Cir.1980)). general verdict or to answer special interrogatories concerning the computation of damages.
I.
The calculation of damages suffered either by a person whose personal injuries will result in extended future disability or by the representatives of a deceased person involves four steps: estimating the loss of work life resulting from the injury or death, calculating the lost income stream, computing the total damage, and discounting that amount to its present value.
In Pfeifer the Court recognized, as we did in Culver I, that calculation of the lost income stream begins with the gross earnings of the injured party at the time of injury. To this amount other income incidental to work, such as fringe benefits, should be added. From it, the fact-finder should subtract amounts the wage earner would have been required to pay, such as income tax and work expenses.
Even in a non-inflationary economy, earnings of a worker “tend to inflate” from the operation of a number of factors, “some linked to the specific individual and some linked to broader societal forces.” The operation of both kinds of influences should be considered to reach the first stage in calculating an appropriate award, an estimate of what the lost stream of income would have been “as a series of after-tax payments, one in each year of the worker’s expected remaining career.”
A lump-sum award may be invested in a wide variety of securities, yielding varying rates dependent in part on their relative safety. Both Pfeifer and Culver I require that rate to be based on the return available from “the best and safest investments,” and to be computed after considering the effect of income tax on the interest received.
The rate of interest available even on the safest investments varies depending on the time at which the investment matures. Therefore, in computing the rate to be used, it is essential to determine how the award will be invested. In Pfeifer, the Court recognized that the plaintiff might invest the award “exclusively in safe short-term notes, reinvesting them at the new market rate whenever they mature,” or in “a mixture of safe short-term, medium-term, and long-term bonds, with one scheduled to mature each year of his expected worklife.” It then stated, “We perceive no intrinsic reason to prefer one assumption over the other.”
Inflation, which has been a permanent fixture in our economy for many decades, affects both the income stream and the market interest rate. In this opinion, we consider only the method of taking general economic inflation into account. In accomplishing this, as we said in Culver I, “[t]he goal is not ... to protect the lump-sum award from the effect of inflation.” It is, instead, “to assure the plaintiff the equivalent of the total of all of his future wages,” including those earnings likely to be affected by inflation.
As the Court noted in Pfeifer, three methods are available for adjusting damage awards to account for the effect of inflation. In the case-by-case method, the fact-finder is asked to predict all of the wage increases a plaintiff would have received during each year that he could have been expected to work, but for his injury, including those attributable to price inflation. This prediction allows the fact-finder to compute the income stream the plaintiff has lost because of his disability. The fact-finder then discounts that income stream to present value, using the estimated after-tax market interest rate, and the resulting figure is awarded to the plaintiff.
In the below-market-discount method, the fact-finder does not attempt to predict the wage increases the particular plaintiff would have received as a result of price inflation. Instead, the trier of fact estimates the wage increases the plaintiff would have received each year as a result of all factors other than inflation. The resulting income stream is discounted by a below-market discount rate. This discount rate represents the estimated market interest rate, adjusted for the effect of any income tax, and then offset by the estimated rate of general future price inflation.
The third method is the “total-offset” method. In this calculation, future wage increases, including the effects of future price inflation, are legally presumed to offset exactly the interest a plaintiff would earn by investing the lump-sum damage award. Therefore, the fact-finder using this method awards the plaintiff the amount it estimates he would have earned, and neither discounts the award nor adjusts it for inflation.
II.
The Culver I opinion would have permitted the parties to pursue any of these methods in order to demonstrate to the fact-finder what adjustment, if any, should be made to compensate for increases in the plaintiff’s future wages due to the economic factors summed up by the term inflation. Indeed, we endorsed the first method, involving specific forecasts of inflation’s effect on a particular plaintiff’s wages, as “simpler and more accurate” than the below-market discount approaches.
The procedures necessary to determine the impact of future price inflation on a particular plaintiff on a year-by-year basis are complex and time consuming. Elaborate expert testimony is required. The battle of economic experts is apt to shift the trial’s emphasis from the determination of liability and the estimation of basic damages into the formulation of predictions concerning the national, indeed, global, economic future, including the likelihood of future increases or decreases in oil prices and the stability of foreign governments. Under Culver I, defendants were.free not only to controvert the plaintiffs’ damage calculations; they could also dispute the validity of the method by which the plaintiffs’ experts calculated damages. If such a dispute evolved, the fact-finder would be required to decide which of at least two competing methods, each avouched by an expert, it would use to determine discount before applying the method it chose to determine the rate of discount, yet another determination to be based on contradictory expert testimony.
Different formulae, each thought to be theoretically accurate, might be applied in literally hundreds of individual cases because of the conclusions reached by different fact-finders. The results in otherwise similar cases would vary widely depending on the particular expert witnesses called, on the fact-finders’ agreement or disagreement with the methods they advocated, and on the different fact-finders’ evaluations of their testimony. The voyage in search of mathematical certainty would discover instead a continent of conflict and conjecture.
Anticipating these problems to some degree in Culver I, we expressed hope that the parties would, by agreement, eliminate the need to litigate many of these confusing issues:
In the great majority of cases, we believe, the parties can and will be able to stipulate to the methodology, discount rate, the admissibility of economic data, tables, etc. and other technical aspects, as well as to any particular issues of fact underlying the calculations.
Culver I, 688 F.2d at 311. We continue to express that hope. Nothing in this opinion prevents the parties from stipulating to any of these matters or to anything else that may affect the determination of damages. We cannot ignore the possibility, however, that in many, perhaps most, cases such stipulations will not be possible. This opinion determines only the method to be followed when the parties cannot agree.
In such cases, litigating in every instance the amount and the effect of future price inflation is not likely to produce the result that would have been obtained had the plaintiff not been injured. No one can accurately predict the course of future inflation. A survey of the general literature for the past several years illustrates a sorry tale of repeated confusion, contradiction and uncertainty in economic forecasts. Current complaints about economic forecasting generally concern relatively short-term forecasts. Over a longer term, events as diverse — and unpredictable — as spending to finance a Southeast Asian war, an oil embargo, disagreement between members of the oil cartel, or a drought causing widespread agricultural failures could profoundly increase inflation. A major depression or the discovery of significant and inexpensive fuel resources might reduce its present impact.
Whether or not the science of economics continues to be dismal, it is assuredly in this regard conjectural. The case-by-case method sacrifices efficiency and simplicity for pursuit of a “delusive exactness.” As the Court noted in Pfeifer: “It is perfectly obvious that the most detailed inquiry can at best produce an approximate result.”
The inherent inaccuracy of specific forecasts of future inflation, coupled with the length and complexity of the proceedings necessary to engage in such forecasts, convinced the Supreme Court that the case-by-case method of adjusting damage awards for inflation “should be discouraged.” “[Sjince specific forecasts of future price inflation remain too unreliable to be useful in many cases, it will normally be a costly and ultimately unproductive waste of [plaintiffs’] resources to make such forecasts the centerpiece” of accident litigation. Recognizing the Court’s disapproval of the case-by-case method, we hold that it should not be used in this circuit to adjust damage awards for inflation.
III.
The paramount concern of a court awarding damages for lost future earnings is to provide the victim with a sum of money that will, in fact, replace the money that he would have earned. Arriving at a reasonable estimate of anyone’s financial future-involves estimates of a whole spectrum of factors. We commonly exclude many relevant factors from consideration on the basis that they are so speculative that they cannot accurately be determined. For example, we consider only work-life expectancy and do not take into account the possibility that a worker will change to work that is more pleasurable but pays less. When considering the loss suffered as a result of the death of a wage-earner, we do not consider the likelihood that a widowed spouse may remarry. Nor do we take into account the stability of an already accomplished remarriage, or the age, appearance or personality of the surviving spouse
While factors such as these do in fact affect the loss of future income, we place a higher value on a reasonable and workable system for establishing damages than we do on detailed precision in arriving at an award. “[W]e must remember that the ultimate total damage figure awarded is the sum of a series of predictions, none of which involves mathematical certainty, and that it is the reasonableness of the ultimate figure that is really in issue in such a case as this.” Barnes v. United States, 685 F.2d 66, 70 (3d Cir.1982) (quoting United States v. Furumizo, 381 F.2d 965, 970 (9th Cir.1967)).
“[I]f forecasts of future price inflation are not used, it is necessary [for the fact-finder] to choose an appropriate below-market discount rate.” Adoption of this method guards against the wide disparity in results, the extended duration in trial time, and the increased cost to the parties that may be anticipated if a specific forecast of future price inflation is made anew in each case involving loss of future earnings. It achieves a no more uncertain approximation of inflation’s effect on the damage award. Because it does not attempt a specific forecast of how inflation will affect the particular plaintiff before the court, however, it is less complex and time consuming.
Even establishing an appropriate below-market discount rate, however, is difficult. Economists do not yet fully understand the relationship between inflation and interest. Recent studies discredit the received wisdom, voiced a decade ago, that there is a constant real rate of interest that can be determined merely by filtering inflationary expectations from nominal interest rates. However, while the studies find that the real rate varies, estimates uniformly fix its amount over any fairly lengthy period as falling into a range that runs from three percent to a negative rate of -1.5%.
We hold that fact-finders in this Circuit must adjust damage awards to account for inflation according to the below-market discount rate method. The parties may, if they wish, stipulate the below-market discount rate, as they may stipulate any other disputed issue. If they are unable to do so, they may introduce expert opinion concerning the appropriate rate. Other evidence about the effect of price inflation is inadmissible. Evidence about the likelihood that the earnings of an injured worker would increase due to personal merit, increased experience and other individual and societal factors continue, of course, to be admissible. We recognize that the Supreme Court declined in Pfeifer to select a single method of accounting for inflation. We are confronted, however, with the need to adapt that opinion to jury trials. We also think it desirable to afford litigants and the courts the opportunity to determine the actual operation of this less complex method in order that its efficacy for national use can be determined.
As we have noted, the discount rate may be affected by the fact-finder’s assumption about the type of investment the plaintiff will choose, for long-term investments usually yield higher nominal interest rate returns than short-term investments of the same quality. The Supreme Court having said in Pfeifer that it perceives “no intrinsic reason to prefer one assumption over the other,” we mandate neither. However, the fact-finder should not consider the plaintiff’s possible need for emergency funds as a factor in favor of short-term investments; the injured wage-earner should have no greater right to a resource against future emergencies than he would have had if he had continued to work.
In judge-tried cases, a trial court adopting a pre-tax discount rate between one and three percent will not be reversed if it explains the reasons for its choice. This guideline, however, goes only to the reasonableness of the correlation between the pre-tax market rate of interest and the inflation rate. As discussed above, this pretax discount rate must then be adjusted for tax effects. If supported by appropriate expert opinion, the trial judge might make no discount or even adopt a negative rate not to exceed -1.5% before adjusting for tax effects. In jury trials, the jury should be instructed in the usual fashion concerning the weight to be given expert opinion evidence. The jury may then be permitted to return a single-figure award for damages or it may be required to answer interrogatories stating, among other items, the amount of loss of future earnings for each year for which it makes an award, and the discount rate it chooses to apply. The court will then be able to compute the total award or to require the parties to complete the arithmetic.
IV.
Just as we cannot ignore the reality of inflation, we cannot ignore the fact that long term economic conditions may change or that economic forecasting may become more certain. We recognize too that, although both the Fifth and Eleventh Circuits will be bound by this decision, Congress has declared that we are no longer a single court. It fulfills rather than ig-ñores the will of Congress to acknowledge that, in the future, either circuit en bane will be free to reconsider this decision. Should counsel for any party in any future case think this decision no longer reflects long-term economic facts or contemporary economic theory, a proffer of evidence may be made in the trial court to preserve the issue for an appellate panel and, thereafter, for en banc consideration.
Although we adopt a single method for adjusting future damage awards, our ruling, made on application for rehearing, shall not apply to any case in which, before the date this opinion was published, either a jury returned a verdict after being instructed on the basis of the principles set forth in Culver I, or a judge made findings of fact fixing damages pursuant to those principles.
For these reasons, Parts I through VI of our prior en banc decision, ■ 688 F.2d 280, 283-95, are reaffirmed. The rule announced in Johnson v. Penrod Drilling Co., 510 F.2d 234 (5th Cir.) (en banc), cert. denied, 423 U.S. 839, 96 S.Ct. 68-69, 46 L.Ed.2d 58 (1975), is overruled. We withdraw, however, Parts VII through XII of our decision in Culver I. 688 F.2d at 295-311. The views expressed in this opinion shall govern the adjustment of federal damage awards for future lost earnings in this circuit.
Courts are not prophets and juries are not seers. In making awards to compensate injured plaintiffs or the dependents of deceased workers for loss of future earnings, however, these fact-finders must attempt, in some degree, to gauge future events. Absolute certainty is by the very nature of the effort impossible. It is also impossible to take into account every bit of potentially relevant evidence concerning the tomorrows of a lifetime. The approach we adopt attempts to assure plaintiffs a fair measure of damages, to give defendants a reasonable adjustment for reducing future losses to present value, and to avoid making trials even more complex and their results even more uncertain. It is the product of a balancing of competing values. Ultimately, however, that is the root of all justice.
The judgments in Culver, No. 79-3985, and Byrd, No. 78-3064, are REVERSED, and the cases are REMANDED to the district court for further proceedings on the issue of damages. The panel opinions are adopted in all other respects.
. The same principles apply if the suit, like these two, involves a loss of earnings by a decedent. For simplicity we embrace in the term “loss of earnings by the plaintiff” the losses suffered by the next-of-kin or others entitled to recover in a wrongful death proceeding. In such cases, of course, the objective is to determine the loss of benefits the survivor would have suffered. Therefore, computation of the earnings lost by the deceased provides only a starting point for determining the loss of benefits suffered by the survivors.
. When the suit is for wrongful death, the maximum loss of benefits to the survivors cannot be determined without also subtracting the living expenses that the worker would have incurred had he continued to live and work.
. Pfeifer, -U.S. at-, 103 S.Ct. at 2549, 76 L.Ed.2d at 782.
. Id. at-, 103 S.Ct. at 2550, 76 L.Ed.2d at 782 (emphasis added).
. Pfeifer, -U.S. at-, 103 S.Ct. at 2550, 76 L.Ed.2d at 783 (quoting Chesapeake & Ohio R. Co. v. Kelly, 241 U.S. 485, 491, 36 S.Ct. 630, 632, 60 L.Ed. 1117, 1123 (1916)); Culver 1, 688 F.2d at 302.
. Pfeifer, -U.S. at-, 103 U.S. at 2550, 76 L.Ed.2d at 783; Culver I, 688 F.2d 302 n. 32.
. Pfeifer, -U.S. at-n. 23, 103 S.Ct. at 2551-52 n. 23, 76 L.Ed.2d at 785 n. 23.
. Culver I, 688 F.2d at 287.
. See Pfeifer, -U.S. at-, 103 S.Ct. at 2556, 76 L.Ed.2d at 790; Culver I, 688 F.2d at 298.
. See Pfeifer, - U.S. at-, 103 S.Ct. at 2556, 76 L.Ed.2d at 790; Culver I, 688 F.2d at 295-96.
. See Pfeifer, - U.S. at-, 103 S.Ct. at 2554, 76 L.Ed.2d at 787; Culver I, 688 F.2d at 299 & n. 26; see also Beaulieu v. Elliott, 434 P.2d 665 (Alaska 1967). This was the approach adopted by the Third Circuit in Pfeifer. See Pfeifer v. Jones & Laughlin Steel Corp., 678 F.2d 453 (3d Cir.1982), rev’d, - U.S. -, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983).
. See Culver I, 688 F.2d at 298.
. Cf. Norfolk & W. Ry. v. Liepelt, 444 U.S. 490, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980). In Liepelt the Court held that juries should be permitted to consider the effect of income taxes on an award for lost future earnings, notwithstanding the complexity of that issue and the possible need for protracted expert testimony and debate. Id. at 494, 100 S.Ct. at 758, 62 L.Ed.2d at 694. In that case the difficulty of placing the issue before the jury was justified by the fact that the jury could reach a correct determination if the evidence was presented to them clearly. But there is no correct determination of inflationary trends. The court or the jury must reach what is at best an educated ’ guess.
.See, e.g., Grant, Current % Yield, Barron’s 56, 70 (February 14, 1983); Where the Big Economic Models Go Wrong, Bus. Week 70 (March 30, 1981); An Amazing Contradiction in Economic Prophecies, Bus. Week 39 (May 28, 1979); Inffation Defies the Guidelines, Bus. Week 32 (February 12, 1979); Mixed Grades for the Economists, Bus. Week 30 (December 25, 1978); Theory Deserts the Forecasters, Bus. Week 50 (June 19, 1974); Forbes, Economics Shouldn’t Be a Branch of Mathematics, Forbes 21 (January 18, 1982); If We Don’t Know Where We Are, How Can We Tell Where We Are Going, Forbes 119 (April 2, 1979); Stock-man’s Ladder, Newsweek 66 (February 9, 1981); Black-Box Forecasting, Time 92 (February 23, 1981). Even the Council of Economic Advisors has conceded that “its ability to forecast inflation is at best imperfect.” The Economic Report of the President 1976, at 20; see also Council of Economic Advisors, Economic Report of the President 1982, at 215 (admitting federal government cannot fully anticipate the course of the economy); Solow, The Intelligent Citizen’s Guide to Inflation, Public Interest 49 (Winter 1975) (suggesting we may be less able to predict price levels 5-10 years into the future than in the past when stable prices were the norm).
On September 14, 1981, the date we heard oral argument en banc in Culver I, the prime lending rate was 20.5 percent and the annual rate of inflation was 14.8 percent. On August 1, 1983, the prime lending rate was 10.5 percent. For the first six months of 1983, the annual rate of inflation has been only 2.9 percent.
. See W. Branson & J. Litvack, Macroeconomics 408-14 (1976); Economic Report of the President 1978, at 139-42. Cf. Economic Report of the President 1974 (“increasingly complex and interdependent world” increases difficulties in forecasting inflation); Inflation Defies the Guidelines, supra note 15 (discussing variety of factors affecting inflation).
. T. Carlyle, Latter-day Pamphlets no. 1 (1850).
. See Pfeifer, -U.S. at-, 103 S.Ct. at 2558, 76 L.Ed.2d at 792 (quoting Feldman v. Allegheny Airlines, Inc., 524 F.2d 384, 392 (2d Cir.1975) (Friendly, J., concurring dubitante)).
. Pfeifer, -U.S. at-, 103 S.Ct. at 2558, 76 L.Ed.2d at 792.
. Id. at-, 103 S.Ct. at 2556, 76 L.Ed.2d at 790.
. Id.
. See, e.g., Bailey v. Southern Pac. Transp. Co., 613 F.2d 1385, 1388 (5th Cir.1980) (applying Texas law); City of Brady v. Finkies, 400 F.2d 352, 358 (5th Cir.1965) (same). See generally Annot., 88 A.L.R.3d 926 (1978); Annot., 87 A.L.R.2d 252 (1963).
. See, e.g., Kalavity v. United States, 584 F.2d 809, 822 (6th Cir. 1978) (dictum; applying Ohio law).
. See also Pfeifer,-U.S. at-n. 34, 103 S.Ct. at 2558 n. 34, 76 L.Ed.2d at 792 n. 34 (“Throughout this opinion we have noted the many rough approximations that are essential under any manageable approach to an award for lost earnings.”).
. Pfeifer,-U.S. at-, 103 S.Ct. at 2556, 76 L.Ed.2d at 790.
. For examples of the most recent scholarship, see Wilcox, Why Real Interest Rates Were So Low in the 1970’s, 73 Am.Econ.R. 44 (1983); Fama & Gibbons, Inflation, Real Returns and Capital Investment, 9 J. Monetary Econ. 297 (1982); Mishkin, The Real Interest Rate: An Empirical Investigation, National Bureau of Economic Research Reprint No. 243 (1981).
.See Pfeifer, - U.S. at- nn. 30 & 31, 103 S.Ct. at 2556-57 nn. 30 & 31, 76 L.Ed.2d at 790-91 nn. 30 & 31; O’Shea v. Riverway Towing Co., 677 F.2d 1194, 1199 (7th Cir.1982); Doca, 634 F.2d at 39 & n. 10 (collecting economic studies); Feldman v. Allegheny Airlines, Inc., 382 F.Supp. 1271, 1293 (D.Conn. 1974), aff’d, 524 F.2d 384 (2d Cir.1975). In an article recently published in the American Economic Review, an economist estimated the real rate between 1960 and 1973 at 1.3%. Wilcox, supra n. 26, at 45.
Interestingly, Wilcox also estimated that between 1974 and 1978, the real rate was-0.8%. Id. at 45. Professor Mishkin recently summarized the movement of the real rate over the last twenty-five years:
[T]he real rate tended to be positive in the first twenty years of the sample period [1953-1973], with a declining trend from 1953-1956, and upward trend reaching a maximum in the boom years of the mid-1960’s, and a declining trend thereafter .. . The real interest rate appears to turn negative towards the end of 1972 and the downward trend accelerates through the end of 1974, whereupon the real rate stays negative but has no easily discernible trend.
Mishkin, supra note 26, at 168-70. However, his estimates suggest that the real rate has
varied within the relatively narrow range between approximately two percent and approximately negative three percent. Id. at 171 (figure 2).
Within the last year, we have witnessed what appears to be a dramatic change in the real rate. Estimates of inflation hover about an annual rate of 5%. Long-term U.S. securities yield 11% or more in interest. Scholarly economic writings that consider the effect of these developments in economic theory have not yet appeared. However, this development, which had not been forecast, indicates further the uncertainties in economic forecasting.
. See Pfeifer, - U.S. at-, 103 S.Ct. at 2556, 76 L.Ed.2d at 790; Culver I, 688 F.2d at 305 n. 39.
. Pfeifer, -U.S. at- n. 23, 103 S.Ct. at 2552 n. 23, 76 L.Ed.2d at 785 n. 23.
. Pfeifer,-U.S. at-, 103 S.Ct. at 2556, 76 L.Ed.2d at 790.
. See Banco Nacional De La Vivienda v. Cooper, 680 F.2d 727, 730 n. 3 (llth Cir.1982); Stein v. Reynolds Securities, Inc., 667 F.2d 33, 34 (11th Cir.1982). See also The Fifth Circuit Court Reorganization Act of 1980, P.L. 96-452, 94 Stat. 1995.
. This is likely the last opinion of the “old” Fifth Circuit, binding on all district courts in the present Fifth and Eleventh Circuits. See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc) (panel decisions of former Fifth Circuit rendered prior to Septem-her 30, 1983 are binding precedent); Stein v. Reynolds Securities, Inc., 667 F.2d 33, 34 (11th Cir.1982) (all en banc decisions of former Fifth Circuit are binding precedent).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
SPARKS, Circuit Judge.
Appellant sued the Nekoosa-Edwards Paper Company for infringement of claims 1 to 12, inclusive, of Seaborne Letters Patent, No. 1,517,018. The Nekoosa. Company was the customer of appellee B. F. Goodrich Rubber Company. That company intervened and assumed the defense, which was non-infringement, and invalidity on account of lack of invention. The District Court sustained both defenses and dismissed the bill, and from that decree this appeal is prosecuted.
The patent was issued November 25, 1924, upon an application filed November 24, 1923, and all rights thereunder were assigned to American Lakes Paper Company. The patent is for a “Paper Making Machine,” but the alleged invention is confined to watermarking rolls for such machines. The specified object was “to provide improved means whereby a web of paper as it passes through a paper making machine may be impressed with designs or marks commonly termed ‘watermarks’ which serve to identify or give distinctive character to the paper.”
As illustrative of the disclosure, Seaborne in his specification, and appellant in its brief, set forth with some particularity the prior state of the art. ■ The impression of “watermarks” for two purposes is emphasized: (1) To identify bond or other writing paper in such a manner and at such stage of its manufacture that the “identification marks” will not be so distinct as to interfere with writing or typing thereon, (2) to give distinctive character to the paper, or “decorative marking,” commonly used in wrapping paper, in such manner and at such stage in its manufacture, that the design is impressed in the surface of the finished paper and is clearly visible at all times. In the prior art the marking rolls for those purposes commonly consisted of two distinct types, which, together with their alleged disadvantages, the patentee and appellant set forth.
The roll which in the prior art was commonly used for “decorative marking” is typified throughout the record and argument by United States Patent No. 733,709, issued to Farwell, July 14, 1903. Such roll was ordinarily used in conjunction with the drying cylinder of the machine and was provided with a metal design-bearing surface which was “crowned” to compensate for the springing of the roll, and was wrapped with muslin through which the design was impressed upon the paper. As a disadvantage of this type, appellant notes the expense and delay occasioned by the frequency with which the muslin wrappings had to be replaced.
The other type of marking roll formerly used in machines to which the alleged invention relates is typified in the record and argument by United States Reissue Patent No. 12,218, to Behrend as of May 10, 1904, In his specification, Seaborne said that this type “comprises one or more rolls upon the peripheries of which are secured marking types or plates of resilient material * * * made as narrow, endless bands of soft rubber, the types or impression surfaces upon the bands consists of harder rubber vulcanized to the soft rubber bands which afford a cushion for the impression types or surfaces. In practice this * * * marking roll is found objectionable for a variety of reasons, the most serious one of which is that it is impossible to vulcanize the soft rubber on to the surface of the metal roll or otherwise rigidly and satisfactorily attach it thereto, so that the soft rubber base or cushion will not slip or creep slightly under the strain or force necessary to effect the impression to the paper web. Such creeping or slipping of the soft rubber that forms a cushion for the harder rubber type or impression surfaces speedily destroys the accuracy of the impressions upon the paper web, and also hastens the wearing out of the marking types or surfaces and of the cushions carrying the same.”
Another objection urged by patentee to this type was the inequality of impression upon the paper web when marking very wide webs, caused by the tendency of the long roll to spring at its center. Patentee further noted the “mechanical limitation^ to the width of rubber bands that can be made and adapted for slipping over the ends of the rolls, and any inequality of pressure at different points of the roll must necessarily cause such bauds to unequally slip or creep and thus destroy the uniformity of the impressions produced thereby.”
Claims 4, 8 and 12 are typical of the several groups of claims and are set forth in the margin.
It was claimed by Seaborne, and is now urged by appellant, that all the objections to Farwell and Behrend, and their types, as hereinbefore referred to were met and fully overcome by the patent in suit. We insert Seaborne’s Figure 4:
H is a metal cyclinder which is covered with a layer of hard rubber, h, vulcanized thereon and forming preferably a continuous sleeve or tube around the surface of FI. Over h and vulcanized thereto is another layer or sleeve of soft rubber, h1, and over the layer of soft rubber, h*, and vulcanized thereto, is an outer layer or sleeve of hard rubber, h2. The soft rubber layer, h1, affords a cushion for the outer layer, h2, of hard rubber in or on the surface of which is to be formed the designs, type, or the like, whereby the marking or ornamenting of the paper web will be effected. Any designs which are desired to be impressed upon the surface of the paper web will be ground, formed or cut upon the outer surface of h2. When it is desired to modify or soften the effect of the marking roll and to give the impressions an appearance resembling a fabric weave, the outer surface of h2 may be covered with one or more layers of textile fabric, such as muslin or the like, K. This, after being wrapped around the roll, will have its ends suitably fastened to prevent it from slipping or working loose. It may be in tubular form so as to be slipped over the end of the roll and shrunk thereon. By providing the surface of H with a layer of hard rubber vulcanized thereto, all possibility of any slipping or creeping occurring between IF and h is avoided, and h affords a hard rubber base to which the soft rubber layer, h1, of the cover may be securely vulcanized.
The patent further describes a modification of the alleged invention in which the marking surface, instead of being an endless sleeve of -hard rubber, consists of a number of spaced individual, hard rubber marking plates, each of which is backed by cushion rubber. This modification was subsequently eliminated by disclaimer, which will be discussed later. We mention it at this time in order to get a complete picture of patentee’s disclosure.
A consideration of the prior art is quite convincing that the patent disclosure here must be confined to the particular means for anchoring the cushion layer to the metal core.
The location of the Seaborne roll was not new. His preferred location was adjacent the drying cylinder, as in Farwell, but he permitted a variation in location so as to permit cooperation with any other roll, as in Behrend. It was not novel to crown a very long roll in order to compensate for springing; nor to grind or cut or form the designs in or on the outer surface of h2; nor to wrap the marking roll with muslin if desired, for these features were all disclosed by Farwell. The hard rubber design-bearing surface backed by a cushion of soft rubber was likewise disclosed by Behrend, and the most serious objection urged to Behrend by Seaborne was the impossibility of vulcanizing the soft rubber cushion to the metal core. It was the effect of this supposed impossibility which he claimed to have circumvented by his disclosure. His solution of the problem was merely the interposition between the metal roll and the soft rubber cushion of a layer of hard rubber to which both the metal surface and the soft rubber cushion could be satisfactorily secured.
The District Court, however, found that this expedient was not new but that it had been common and well-known in the rubber roll art for many decades. That conclusion seems to be amply supported by the prior patents and prior uses introduced in evidence, and we adhere to the ruling. Mayall, No. 125,595; Fukuda, No. 1,417,240; Hett, No. 662,862; Schmitz German Patent, No. 71,762. It is quite true that the rolls of these cited patents, save Schmitz, were never used for making decorated wrapping paper, but they were extensively used in closely related fields, and the rubber layers performed precisely the same functions as in the patent in suit. Schmitz disclosed a paper mill press roll converted into a watermarking roll by applying a design-bearing device of the same material as the roll or its coating, but of a particular degree of hardness. It is urged, however, that Schmitz did not contemplate using the entire outer surface of the press-roll covering as a marking surface; that the markers were to be detachably secured to the roll surface, and there was no engraved ■sleeve. There is no limitation, however, in Schmitz on the proportion of the marking surface to be used, and he merely suggests the expediency of an interchangeable cover. He likewise is not limited as to the manner of making the desired mark.
It is obvious that Seaborne merely secured the cushion rubber of Behrend to the metal surface by interposing a layer of hard rubber. This was not doing what theretofore had been impossible. He merely used an expedient in the art of rubber rolls which had been used continuously and extensively for many years. The evidence discloses that the Cincinnati Rubber Company did precisely what Seaborne did at a later date, and Seaborne was merely the first to consider the act as involving inventive genius. We think he did nothing more than bring together old elements, in a mechanism involving no new principle, to produce an old result. This is not invention. Altoona Public Theatres, Inc., v. American Tri-Ergon Corporation. 294 U.S. 477, 55 S.Ct. 455, 79 L.Ed. 1005; Pennsylvania R. Co. v. Locomotive Truck Co., 110 U.S. 490, 4 S.Ct. 220, 28 L.Ed. 222; Catón Printing Co. v. Daniels Mfg. Co. (C.C.A.) 72 F.(2d) 993.
It is urged that Seaborne anticipated the conception as embodied in the Cincinnati roll. A fair construction of the testimony in this suit discloses that the Cincinnati roll was conceived in July, 1922, by one Arnold. Its construction by the Cincinnati Rubber Company was formally ordered by the New York & Pennsylvania Company on January 26, 1923, and it was completed and shipped to the last named company on June 30, 1923. The Seaborne roll was manufactured by Stowe-Woodward, Inc. It was ordered on February 23, 1923, and completed and shipped to the Seaborne Company on August 29, 1923. Arnold acted as salesman for both manufacturing companies. Seaborne and Arnold were acquaintances and had discussed watermarking rolls as early as July, 1922, at which time Arnold told Seaborne that he, Arnold, felt that he could build a roll with a glorified Behrend marking band type, that is to say, the Cincinnati roll. Seaborne testified that in that same conversation, “Mr. Arnold told me it was for a South American republic, he did not care to tell me where he was sending it, but it turned out to be, I understand, for Cuban stamps.”
Appellant, however, seeks to overcome Arnold as an anticipation because Arnold failed to apply for a patent and made no opposition to Seaborne’s application. This contention cannot be sustained. Arnold never regarded the Cincinnati roll as anything but a “glorified Behrend marker,” and quite properly considered it as not disclosing inventive genius. His business was that of roll-salesman. Up to the time of his testimony, he, through his principal, Stowe-Woodward, Inc., had made all of Seaborne’s marking rolls. His profits came through his sales, and the fact that he did not oppose his customer’s application for the patent can not be considered sufficient to overcome the admitted anticipatory facts. This is not a contest between appellant and Arnold, but.is a contest between appellant on the one side and appellees and the pub-lie on the other. Under these circumstances, Arnold was not required to oppose his customer’s application for the patent, and the fact that he did not do so will not limit the rights of appellees or the public.
It is further contended by appellant that the presumption of validity shifts the burden upon appellees to prove that Seaborne was not the first inventor. This rule we recognize, but it is not to be applied where, as here, anticipation has been proved. Consolidated Ry. Electric Lighting & Equipment Co. v. Adams & Westlake Co. (C.C.A.) 161 F. 343; Moline Plow Co. v. Rock Island Plow Co. (C.C.A.) 212 F. 727. A perusal of all the evidence convinces us that the District Court was right in holding that Seaborne’s conception did not antedate Arnold’s.
It is further contended by appellant that the effect of the Cincinnati roll as an apticipation is overcome by two disclaimers filed by appellant as assignee of Seaborne. The first was filed on July 24, 1933, before the trial and after the depositions establishing that defense had been taken. The original specifications provided that the designs on the outermost cover, h2, should be ground, formed or cut. None of the claims said anything about how the design should be imparted to the outer surface. In the Cincinnati roll the design was formed by molding. This disclaimer seeks to distinguish the patent from the Cincinnati roll by eliminating the word “formed” from the specification and by converting the claimed invention from the one originally covered to one which consisted in applying a design to a marking stirface by grinding or cutting as distinguished from forming. The District Court found that it had been common practice in the rubber roll art for many years, to produce surface designs either by grinding or cutting, or by molding, and that those methods had long been well recognized mechanical equivalents. The evidence fully supports this finding. The distinction sought to be raised by this disclaimer is not a sufficient basis for invention.
The second disclaimer was filed after the District Court’s decision upholding the Cincinnati defense. The Cincinnati roll was made up of a number of strips or sleeves vulcanized together at their edges, instead of being made of a single continuous piece as called for in claim 8. It will be noted, as hereinbefore stated, that Seaborne had referred to a permissible modification of his alleged invention, in that instead of the outer or marking roll being a continuous sleeve, it might be a series of marking plates, illustrated by certain figures referred to in the second disclaimer. The purpose of this disclaimer was to eliminate these figures and all parts of the specification relating to them; to eliminate from the scope of each and all of the claims any marking roll whose engraved hard rubber cover was not continuous; and to limit the scope of each and all of the claims to a marking roll with a single one-piece outer hard rubber sleeve in which the design was engraved. It is -further to be noted that the original patent stated that the designs should be “ground, formed, or cut;” the first disclaimer eliminated the word “formed;” and the second disclaimer eliminates the words “ground” and “cut” and inserts the word “engraved,” which is nowhere found in the original patent.
It is clear that the Cincinnati roll, although made up of several sections, constitutes a continuous outer sleeve or cover. It is urged by appellant that its outer surface without seams is better for “all over” designs such as spider webs and the like, but nowhere in the patent is an “all over” design mentioned. Even so, it would hardly amount to invention to eliminate a vulcanized joint.
We are convinced that the disclaimers purport to change the character of the invention for which the patent was originally granted, and for that reason, among others, we think the claims are invalid. The filing of the disclaimers was an effort to avoid the clear anticipation of the Cincinnati roll, and it has resulted in a defeat of the claims of the patent under the rulings in the following cases: Altoona Public Theatres, Inc., v. American Tri-Ergon Corporation, supra; Hailes v. Albany Stove Co, 123 U.S. 582, 8 S.Ct. 262, 31 L.Ed. 284; Fruehauf Trailer Co. v. Highway Trailer Co. (D.C.) 54 F.(2d) 691, affirmed (C.C.A.) 67 F.(2d) 558; General Motors Corporation v. Rubsam Corporation (C.C.A.) 65 F.(2d) 217; Corn Products Refining Co. v. Penick & Ford (C.C.A.) 63 F.(2d) 26; Albany Steam Trap Co. v. Worthington (C.C.A.) 79 F. 966. The District Court’s ruling was right in holding the claims invalid for anticipation and lack of invention.
It is unnecessary to dwell at length on the question of infringement. Appellees’ roll omits the interposition of the hard rubber layer for anchoring the cushion of soft rubber to the metal core, the tiling above all, upon which appellant relied to give life to his patent. He said it was impossible to vulcanize soft rubber to the surface of a metal roll or otherwise rigidly and satisfactorily attach it thereto. But appellees have accomplished that which Seaborne said was impossible, and they have done it by the use of a patented cement palled “vulca-lock.” Clearly, there was no infringement.
Decree affirmed.
“4. In a paper-making machine, the combination with a suitable cylinder or roll, of a marking roll comprising a body having thereon a cushioning layer of soft rubber and an outer sleeve of hard mbber provided with a marking surface.”
“8. In a paper-making machine, the combination with a suitable cylinder or roll, of a marking roll comprising a body having thereon a continuous sleeve of hard rubber, a continuous sleeve of soft rubber vulcanized to said hard rubber sleeve and an outer continuous sleeve of hard rubber vulcanized to said soft rubber sleeve and provided with a marking surface.”
“12. In a paper-making machine, the combination with a suitable cylinder or roll, of a marking roll comprising a body having thereon a plurality of cylindrical covers or sleeves of rubber uniied together, the outermost sleeve or cover being provided with a marking surface and being. of harder rubber than the sleeve beneath it, said outermost sleeve being thickest about the central portion of the roll and gradually diminishing in thickness towards the ends of the roll.”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
A. LEON HIGGINBOTHAM, Jr., Circuit Judge.
Kenneth and Linda Ambrose appeal from a judgment of the district court finding them personally liable along with Ambrose, Inc. for delinquent fringe benefit contributions in a suit brought by the Carpenters Health and Welfare Fund of Philadelphia and Vicinity (the “Fund”) under Section 301 of the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185(a) (1976), and the Pennsylvania Wage Payment and Collection Law (“WPCL”), PA. STAT.ANN. tit. 43, §§ 260.l-.il. (Purdon Supp.1983-1984). The district court also awarded attorneys’ fees to the Fund’s attorneys. Counsel for the Fund cross-appeal from the district court’s attorneys’ fee award which reduced the lodestar by 50% and assessed liability for the attorneys’ fees only against Ambrose, Inc., a bankrupt corporation.
I.
The Ambroses are the sole officers and majority shareholders of Ambrose, Inc., a construction firm. The corporation failed to make its required contributions to the various union pension funds as provided by their collective bargaining agreement. The delinquency in contributions resulted from financial difficulties caused in great part by Ambrose, Inc.’s failure to be paid for work it performed at the behest of the United Brotherhood of Carpenters and Joiners of America (“the Union”).
The Fund filed a Section 301 LMRA suit in federal court to recover the delinquent contributions. It also asserted a pendant state claim to collect liquidated damages equal to 25% of the amount owed as provided by the WPCL.
During the district court proceedings, Ambrose, Inc. did not contest its liability to the Fund for the delinquent fringe benefits. Indeed, prior to trial it agreed to an entry of judgment against it for $17,199.25, as part of the sum owed to the Fund for attorneys’ fees and for costs. Ambrose, Inc. only disputed the claim against it for liquidated damages. Linda and Kenneth Ambrose, however, contested both their individual liability for the delinquent contributions and liquidated damages, they also objected to the imposition of any counsel fees against them in their individual capacity-
The district court ruled that the Ambros-es were personally liable as employers under both the LMRA and the WPCL for delinquent contributions in the amount of $14,747.82. The district court also found both the Ambroses and Ambrose, Inc. liable under the WPCL for liquidated damages in the amount of 25% of the judgment or $8,173.14. It awarded attorneys’ fees to plaintiffs’ counsel, but after considering the fee application, the district court reduced the lodestar of $12,955.35 by 50% and imposed liability only against the corporation “because of overriding equitable considerations .. .. ” Joint Appendix (“J.A.”) at 53a.
The Ambroses appeal the District Court’s finding that, in their individual capacities, they are liable as employers for the delinquent contributions.
II. The Ambroses’ Individual Liability
A. The WPCL
The WPCL defines employer as:
every person, firm, partnership, association, corporation, receiver or other officer of a court of this Commonwealth and any agent or officer of any of the above-mentioned classes employing any person in this Commonwealth.
PA.STAT.ANN. tit. 43, § 260.2a (Purdon Supp.1983-1984). The district court concluded that as the “agents and officers” of Ambrose, Inc. the Ambroses fit within the meaning of the term employer as used in the WPCL, and were therefore liable to the pension fund for unpaid contributions. J.A. 21a-24a.
The only state court decision to rule on the liability of corporate officers as employers under the WPCL is Ward v. Whalen, 18 Pa.D. & C.3d 710 (1981). In Ward the defendant who was the president and sole stockholder of Q-Dot, Inc., a bankrupt corporation, was held personally liable under the WPCL for the unpaid pension contribution. The defendant argued that under Section 260.3(b) of the WPCL, which requires every employer who agrees to provide fringe benefits and make the requisite payment in 10 days, he could not be held liable as he was not a party to the collective bargaining agreement providing for the payment of pension benefits.
The court rejected the argument and found the defendant liable as an employer by definition. The court explained:
The legislature had some purpose for including an agent or officer of a corporation employing persons in the Commonwealth within the definition of employer, and the only apparent purpose was to subject these persons to liability in the event that a corporation or similar entity failed to make wage payments. Its reason for doing so is obvious. Decisions dealing with personnel matters and the expenditure of corporate funds are made by corporate officers and it is far more likely that the limited funds of an insolvent corporation will be used to pay wages and that a work force will be reduced while the corporation is still capable of meeting its obligations to its employes if personal liability is imposed on the persons who make these decisions.
Ward v. Whalen, 18 Pa.D. & C.3d at 712. The court’s ruling in Ward was followed in In Re Johnston, 24 B.R. 685, 687 (Bkrtcy.Pa.1982).
Although “we are governed by state substantive law as pronounced by the state’s highest court,” Safeco Insurance Co. of America v. Wetherill, 622 F.2d 685, 687 (3d Cir.1980), citing Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 1782, 18 L.Ed.2d 886 (1967); Western Pennsylvania National Bank v. American Insurance Co., 428 F.2d 1220 (3d Cir.1970), the issue of the personal liability of a corporate officer pursuant to the WPCL has not been decided by the Pennsylvania Supreme Court or any Pennsylvania appellate court. In this case “our disposition ... must be governed by a prediction of how the state’s highest court would decide were it confronted with the problem.” McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 661 (3d Cir.), cert. denied, 449 U.S. 976, 101 S.Ct. 387, 66 L.Ed.2d 237 (1980). Thus, the trial court’s decision in the Ward decision is entitled to “some weight,” Safeco, 622 F.2d at 689, yet it is not controlling.
To us it is questionable whether the WPCL has so broad a scope that it imposes personal liability on those lower level corporate officers or employees who are merely implementing a policy at the command of their superiors; however, in this case we need not ascertain the breadth or outer limits of the ultimate coverage of the statute, because here there is no question that the legislature intended to include at least the highest ranking corporate officers, such as the Ambroses, who established and implemented the policy for the non-payment of the pension benefits. The Ambroses were the sole officers and the sole stockholders of the corporation. By an analysis of the related criminal penalty section statute, PA.STAT.ANN. tit. 43, § 260.11a (Purdon Supp.1983-1984), and when reading the statute as a whole, it is obvious that the legislature intended to impose personal civil liability on persons who hold corporate executive positions such as occupied by the Ambroses. Corporate officers violating any of the WPCL provisions are subject to criminal penalties under Section 260.11a(c) which provides:
“[wjhere such employer is a corporation, the president, secretary, treasurer or officers exercising corresponding functions [he or she] shall each be guilty of such summary offense.”
PA.STAT.ANN. tit. 43, § 260.11a(c) (Pur-don Supp.1983-1984). Certainly, if the legislature intended to impose criminal liability on such corporate officers, there is no reason to believe that they intended to relieve those same corporate officers from personal civil liability.
Although imposing liability for unpaid pension benefits on persons who have not contractually agreed to make the payments seems a harsh result, in the absence of other available decisions on the issue, we will affirm the district court’s decision holding the Ambroses personally liable under the WPCL for the delinquent pension benefit contributions.
B. The LMRA
The basis on which the district court imposed personal liability against the Ambros-es under Section 301 LMRA is not clearly articulated; however, the court seemed to apply an alter ego theory to pierce the corporate veil, stating:
The close relationship between the individuals and the corporation and the fact that there are only two officers and the majority shareholders of the corporation would most likely support the conclusion that they are the employer and therefore within federal jurisdiction.
J.A. at 22a. The court also applied the WPCL definition of employer, stating that “the definition of ‘employer’ under § 301 of the LMRA is at least as broad as the definition of that term in the Pennsylvania statute.” J.A. at 48a. We disagree with the district court’s findings.
A finding of an alter ego situation is a factual one and must be supported by the record. Publicker Industries, Inc. v. Roman Ceramics Corp., 603 F.2d 1065 (3d Cir.1979). In this case, the trial judge has committed the same mistake as that committed by the trial judge in Publicker. “The trial court made no findings that the circumstances normally required for application of the alter ego theory were present here.” Id. at 1069. In Publicker we stressed that the piercing of the corporate veil or the alter ego theory is a “tool of equity [that] is appropriately utilized ‘when the court must prevent fraud, illegality or injustice, or when recognition of the corporate entity would defeat public policy or shield someone from public liability for a crime.’ ” Id., quoting Zubik v. Zubik, 384 F.2d 267, 272 (3d Cir.1967), cert. denied, 390 U.S. 988, 88 S.Ct. 1183, 19 L.Ed.2d 1291 (1968). “The burden of proof on this issue rests with the party attempting to negate the existence of a separate entity.” Id. On the record before us there is insufficient evidence for us to conclude that the Ambroses were acting as alter egos of Ambrose, Inc.
In United States v. Pisani, 646 F.2d 83 (3d Cir.1981), we accepted the alter ego theory as federal law and set forth factors which are relevant in determining when the alter ego theory should be used to disregard the corporate entity. Those factors which we adopted from the Fourth Circuit’s decision in DeWitt Truck Brokers, Inc. v. W. Ray Flemming Fruit Co., 540 F.2d 681 (4th Cir.1976) are:
[F]ailure to observe corporate formalities, non-payment of dividends, the insolvency of the debtor corporation at the time, siphoning of funds of the corporation by the dominant stockholder, nonfunctioning of other officers or directors, absence of corporate records and the fact that the corporation is merely a facade for the operations of the dominant stockholder or stockholders.
Pisani, 646 F.2d at 88, quoting DeWitt Truck Brothers v. W. Ray Flemming Fruit Co., 540 F.2d at 686-87. Undercapitalization is an additional factor which the court may consider. Id.
The conduct of the Ambroses on the record established to date is quite different than that of Dr. Pisani, who operated the corporation with his own personal funds, loaned large sums to the corporation, and then repaid the loans personally with corporate funds while the corporation was failing. Pisani, 646 F.2d at 88. There is no evidence in the record to suggest that the Ambroses were taking money out of the corporation for their personal use; rather they acted more like good Samaritans for the survival of the corporation. They mortgaged their home in an attempt to keep the corporation solvent. Ironically, the corporation failed not for want of personal effort on the part of the Ambroses but because the very clients recommended by the Union failed to pay Ambrose, Inc. for the work it had done.
We have checked the record carefully and we have grave doubts whether as a matter of law the Ambroses could be held individually liable under LMRA. Furthermore, we do not accept the district court’s conclusion that “employer” as used in the LMRA has as broad a meaning as the WPCL definition would suggest. As was stated by the district court in Combs v. Indyk, 554 F.Supp. 573, 575 (W.D.Pa.1982),
[t]hat corporate officers are included within the statutory definition of employers under state law is too slender a reed for exposing such officers to liability under the federal common law of labor-management relations. To the contrary, it appears that insulation of corporate officers and agents from liability for section 301 violations was, in part, a basis for the parallel insulation of officers and members of local unions from liability for section 301 violations. See Atkinson v. Sinclair Refining Co., 370 U.S. 238, 249, 82 S.Ct. 1318, 1325, 8 L.Ed.2d 462 (1962).
We find, therefore, that under Section 301 the Ambroses are not personally liable and we will reverse the district court’s decision on this issue.
III. Attorneys’ Fee Award
The rules and standards governing attorneys’ fees awards are well settled.
See Lindy Bros. Builders, Inc. of Phila. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir.1973) (Lindy I) and Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Sanitary Corp., 540 F.2d 102 (3d Cir.1976) (in banc) (Lindy II). The award of reasonable attorneys’ fees is within the district court’s discretion, and our review of the award is a narrow one. Lindy II, 540 F.2d at 115; Silberman v. Bogle, 683 F.2d 62, 65 (3d Cir.1982). The person seeking to establish an abuse of discretion bears a “heavy burden.” Lindy II, 540 F.2d at 115-116. A district court is considered to have abused its discretion if “no reasonable [person] would adopt the district court’s view ... [or] when the trial court uses improper standards or procedures in determining fees, or if it does not properly identify the criteria used for such determination.” Silberman, 683 F.2d at 65.
In Lindy I and Lindy II, we held that a district court, in considering a request for attorneys’ fees pursuant to an agreement or statute, must first determine if the fee is reasonable. Lindy I, 487 F.2d at 167. A reasonable fee, the so-called “lodestar,” is computed by multiplying the number of service hours expended by each attorney by a reasonable rate of compensation, usually an hourly billing rate. Id.; Lindy II, 540 F.2d at 108. The district court must then consider the contingent nature of success and the quality of the attorneys’ work as two additional criteria before making a final determination of the attorneys’ fee award. Lindy I, 487 F.2d at 168-69; Lindy II, 540 F.2d at 116-18. The contingency factor is utilized to “appraise the professional burden undertaken — that is, the probability or likelihood of success, viewed at the time of filing suit,” Lindy II, 540 F.2d at 117, and it can increase the amount of the award. The quality factor of an attorney’s work takes into consideration “the complexity and novelty of the issues presented,” Lindy I, 487 F.2d at 168, and it can result in either an increase or decrease of the final fee award.
In this case our disagreement with the lower court is on two grounds: First, as to its reduction of the counsel fee by 50% for what the court terms “equitable considerations” and second, as to the court’s preclusion of any award for counsel fees against the Ambroses personally even though they are also liable as employers under the WPCL. The entire opinion of the district court on the counsel fee issue is as follows:
Plaintiffs’ application for counsel fees is unopposed. I have no doubt that counsel actually spent the hours claimed, and the hourly rates are reasonable. The amount claimed, $12,955.35, is prima facie correct. There are in my view, however, certain equitable considerations precluding an award of the full amount against all defendants.
The judgment which plaintiffs have obtained against the defendants includes a 25% penalty. More importantly, the defendants’ failure to pay the required contributions into the union welfare fund was not, in any sense, a deliberate and intentional “refusal to honor their promises to pay” or “contemptuous disregard of an obligation,” as plaintiffs now contend. Rather, they failed to pay for the best of all possible reasons: They did not have the money. More importantly still, the reason the defendants were unable to pay was because the firms with which they contracted (at the behest and with the encouragement of officials of the plaintiff unions) were financially irresponsible and failed to pay the defendants.
Unfortunately for the defendants, the brokerage activities of the union officials (in a good-faith effort to enable the defendants to provide employment for union members) did not give rise to a valid defense against the claims for pension and welfare contribution. But because of overriding equitable considerations, I believe it appropriate to reduce the counsel fee award by 50%, and to impose it only against the corporate defendant. An appropriate order follows.
J.A. at 52a-53a (emphasis added).
We recognize that Ambrose, Inc. is insolvent and that as a practical matter the Ambroses, who do not seem to be affluent, will bear this significant economic burden alone in their individual capacity. Thus, the district court’s opinion would be persuasive if we were obligated to consider solely the economic consequences of an adverse judgment to the Ambroses. However, in contrast to the rationale of the district court, the trend of the cases does not favor the employer who fails to pay timely the benefits due employees. Indeed, “[bjecause national labor policy evinces great solicitude for the interests of pension fund beneficiaries, courts have long treated plan trustees who seek to enforce contribution obligations with special favoritism.” Note, Denying the Illegality Defense: An Enigmatic Approach to the Delinquent Pension, Fund Contribution Problem, 34 Stan.L.Rev. 221, 222 (1981). Despite the hardship on the employer, trustees have a fiduciary obligation to collect the funds owed in order to pay pensions and other related benefits due employees. As one commentator has noted:
Delinquent contributions threaten pension fund viability because the actuarial valuations require a predictable flow of income into the fund. Fluctuating income seriously affects these valuations and can eventually jeopardize the benefits a plan is committed to pay. The fund loses investment income as the asset base erodes, and it incurs increased administrative expenses from costly detection efforts, attorneys’ fees, and other ancillary costs that arise in the collection effort.
Id. at 226.
Like the district court, we are sympathetic to the economic plight of the Ambroses just as we would be toward others whose corporation becomes insolvent leaving them with an obligation to pay from their personal funds those debts which would have been paid by their corporation if it had remained solvent. We recognize that the Ambroses’ involvement in this economic maelstrom could have been an attempt on their part to accommodate various union leaders who had recommended the companies for which Ambrose, Inc. performed the work. When those companies, which the Union recommended, failed to pay. the Ambroses in full, the Ambroses were denied a source of funds to meet their contractual obligations to the Trustees.
Despite these financial problems, the Ambroses are not the only victims in this series of unfortunate economic events. Other victims include the working men and women who expended their labor for the Ambroses and were entitled to the pension and related benefits under the union contract, which benefits will be paid solely because of the litigation the Trustees initiated in this case. Other, though perhaps less obvious, victims are the plaintiffs’ health and welfare funds, which are entities legally separate from the Union, entitled to the money contractually due them to meet their statutory and fiduciary obligations to the members of the Union. Cf. NLRB v. Amax Coal Co., 453 U.S. 322, 101 S.Ct. 2789, 69 L.Ed.2d 672 (1981). When the Trustees must pay counsel fees to acquire the money owed them, there is a resulting diminution of funds available to pay welfare and pension benefits to the Union members. The likely consequence of the “equitable considerations” relied on by the trial judge in holding that the Ambroses are not obligated to pay any counsel fees is that monetary benefits due union members could be jeopardized because funds that otherwise would have been available have been spent on counsel fees.
While it may be questionable whether those events that the district court termed “equitable considerations” may ever be used to deny counsel fees in toto, certainly under the facts of this case the “equitable considerations” do not tilt so strongly in favor of the Ambroses that the court can exonerate them from paying any counsel fees. The Ambroses voluntarily entered the construction contracts intending to make a profit. They are not philanthropists but business persons who unfortunately made an unprofitable deal. In weighing these factors, we find no basis for holding that the Ambroses do not have to pay any amount of counsel fees since they are considered to be employers.
Because the district court reduced the counsel fees by 50% for “equitable considerations,” we are not certain whether the court would have made the counsel fee award differently if it had considered the factors as we have noted them in this opinion.
For the foregoing reasons, we will affirm the district court’s judgment holding the Ambroses personally liable for the delinquent pension fund contributions under the WPCL, but we will reverse on the question of their liability under the LMRA. We will affirm the district court’s judgment that plaintiffs are entitled to attorneys’ fees; however, we will reverse the district court’s judgment excusing the Ambroses from personal liability for the attorneys’ fee award. We will vacate the amount of the award and remand this case to the district court for a redetermination of the attorneys’ fee award and for further proceedings consistent with this opinion.
. Other plaintiffs include the Carpenters Pension Fund of Philadelphia and Vicinity, the Carpenters Joint Apprentice Committee, the Industry Advancement Program, and the Metropolitan District Council of Philadelphia and Vicinity United Brotherhood of Carpenters and Joiners of America (the latter plaintiff is designated on the docket sheet as Metropolitan District Council of Philadelphia and Vicinity United Brotherhood of Carpenters and “Joinders” of America).
. These parties were previously before this court. See Carpenters Health v. Ambrose, Inc., 665 F.2d 466 (3d Cir.1981). Relying on the rationale of Croker v. Boeing Co. (Vetrol Division), 662 F.2d 975 (3d Cir.1981) (in banc), which held that the amount of attorneys’ fees must be determined before an order is final for purposes of appeal, the previous appeal was dismissed as jurisdictionally defective because the district court had not entered a final order as to the amount of attorneys’ fees at the time of the appeal. Our appellate jurisdiction theory as announced in Croker was subsequently repudiated, at least by implication, by the Supreme Court. White v. New Hampshire Department of Employment Security, 455 U.S. 445, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982). Accordingly, we have since held that there can be appellate jurisdiction even when the amount of counsel fees has not been determined, Hald-erman v. Pennhurst State School & Hospital, 673 F.2d 628, 644 (3d Cir.1982) (Sur Petition for Rehearing), and that “an appeal on the merits of the predicate case must be filed within the requisite time period following entry of judgment thereon, notwithstanding that an attorney’s fee petition may also be, or has been, filed.” West v. Keve, 721 F.2d 91, 95 (3d Cir. 1983).
. Section 301 provides in relevant part:
(a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
29 U.S.C. § 185(a).
. The Wage Payment and Collection Law provides for suits by unions against employers to recover delinquent pension and fringe benefit fund contributions. PA.STAT.ANN. tit. 43, §§ 260.1-.11 (Purdon Supp.1983-1984). It also provides for liquidated damages in the amount of 25% of the total amount due for sums which remain unpaid for more than 30 days. Id. at § 260.10.
. The Ambroses also argue that the district court acted without jurisdiction on the WPCL claims and they further contend that the WPCL is pre-empted by the LMRA and the Employee Retirement Income Security Act of 1974, (“ERISA”), 29 U.S.C. § 1144(a) (1976), amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. § 1145 (Supp. V-1981), we find that these contentions are without merit.
. Section 260.3(b) provides:
(b) Fringe benefits and wage supplements. Every employer who by agreement deducts union dues from employes’ pay or agrees to pay or provide fringe benefits or wage supplements, must remit the deductions or pay or provide the fringe benefits or wage supplements, as required, within 10 days after such payments are required to be made to the union in case of dues or to a trust or pooled fund, or within 10 days after such payments are required to be made directly to the employe, or within 60 days of the date when proper claim was filed by the employe in situations where no required time for payment is specified.
PA.STAT.ANN. tit. 43, § 260.3(b) (Purdon Supp.1983-1984).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
RIVES, Circuit Judge.
Jay Simmons sued Western Assurance Company to recover damages sustained by him when portions of an oil well drilling rig owned by him and leased to White-Webb Drilling Company were damaged or lost in a blow-out and cratering of an oil well near Jefferson, Texas. The rig had been rented 'by Simmons to White-Webb Drilling Company under an agreement which provided that the lessee was to be responsible to Simmons for any damage or loss of any kind, ordinary wear and tear excepted, and which further provided for the lessee to keep the drilling rig insured for the lessor’s benefit against various hazards, including hazards resulting from blow-outs, with the qualification, “however, should you desire not to carry said insurance but assume said risk without insurance, you may do so by hereby agreeing to pay me for any and all loss sustained by fire, windstorm, explosion or blow-out damage.”
At about 8 a. m. on Sunday, September 4, 1949, the rig in question had drilled to a depth of 338 feet when a blow of gas occurred, and sand, shale, water and mud were blown from the hole to a considerable height. This blow continued until approximately 11:30 a. m. when it quit completely without damage to the drilling rig. Normally, gas is not encountered in this area until a depth of 5900 to 6000 feet and would not be expected at a depth of 338 feet.
Webb was the field man for White-Webb Drilling Company and White, who lived in Dallas, was the office man and handled the insurance matters. Webb was reached by long distance telephone at Shreveport, Louisiana, and arrived at the" location of the well about 1 p. m. on Sunday, September 4, and found the condition then quiet but with evidence of the blow earlier in the morning. Webb gave the drilling crew instructions not to proceed with the drilling because he wanted to find out whether the rig was covered by insurance. He was unable to reach White by telephone and then succeeded in having a telephone conversation with Simmons. Simmons and White both living in Dallas, Simmons stated that he would attempt to contact White and to have White get in touch with Webb; and further stated to Webb that, unless there was insurance or unless it could be secured immediately, he wanted the rig tom down and moved away from that location. Webb agreed that, if the rig was not insured and insurance could not be obtained, he would move the rig off. Simmons finally got in touch with White, told him of the situation, and White said that he did not know whether the rig was covered by insurance or not, but that he would find out. Simmons testified that White later called him back and said that, I would have the insurance; he was working on it then, and for me to stand by.”
White finally located Mr. E. G. Dean, an insurance broker who resided in Dallas but who was spending the Labor Day week end at Mineral Wells, Texas. Dean was a partner in the E. G. Dean 8i Company, insurance agency, which wrote and handled the insurance business of the White-Webb Drilling Company. White did not testify, but Dean’s testimony shows that, while White told him about the blow-out, he treated the matter in a jovial spirit and made light of it, and further represented to Dean that Dean’s partner, Lander, had theretofore bound insurance on the rig in question. That representation turned out to be false. Dean’s testimony as to his further conversation with White is set out in the footnote.
Frank Rimmer & Company were general agents for Western Assurance Company. Dean telephoned Eagleston of Frank Rim-mer & Company and mentioned the substance of his conversation with White, but failed to say anything to Eagleston about the blow-out, “because White treated that part of it so insignificantly, after he got into the conversation, that [ just didn’t mention it to Eagleston, because the paramount thing in White’s mind was to get his men back to work.” Dean requested Eagleston to telephone to White, and this Eagleston did.
Again White did not testify, but the substance of the conversation, according to Eagleston, was that White told Eagleston that he had a rig leased from Jay Simmons, that the rig had been set up and was ready to go to work, but that Simmons would not let him go to work until such time as he had evidence of insurance, that his crew was standing idle and he was anxious to get confirmation of a binder of insurance that had been arranged earlier in the week, and he wanted Eagleston to send some evidence to Simmons that he had arranged the insurance. Continuing, Eagleston testified:
“I told White at the time that the office was closed, I had been out of town during the week before, that the office was closed, our people were scattered over the country for a long Labor Day week-end, and I had no way of checking up on what binder had been issued, the basis it had been issued, and that I couldn’t give him any information until we got back to the office on Tuesday, when I could check up.
“He plead with me at some length and stressed the expense that he was having from an overhead standpoint, with the crew standing by, idle, and he was most anxious to get started and Mr. Simmons wouldn’t let him start without some confirmation—
******
“After we had talked some time on the telephone, him telling me what he told me, I suggested that I would call Mr. Jay Simmons and talk to him on the telephone, and White then asked me if I wouldn’t just send Mr. Simmons a telegram confirming the bindefi tliat he had assured me had already been arranged with my office. I took the man at his word. I operated in good faith; I thought he was.”
Eagleston further testified that White did not tell him about the blow-out of that morning, nor did he reveal that there was any present danger or hazard connected with the risk. Eagleston did not talk to Simmons, but sent him a telegram reading as follows:
“1949 Sep 4 PM 5 25
“DC03 SSC33
“D. LLC 493 PD Dallas Tex 4 403 P
“J. Simmons
“5022 Seneca Drive Dal (DLY) “Confirm Bindings Drilling Rig Owned By J Simmons Leased To White Webb Drilling Company Located Near Jefferson Texas $100000 In Regular Perils Including Blow-out And Cratering Subject 100 Percent Co-Insurance Effective 400 PM September 4th Binder Western Assurance Company—
“Frank Rimmer & Co.
“By Eagleston
“$100000 100 400 PM 4”
Shortly after 4 p. m. Simmons received a telephone call from the Western Union and the message was read to him, and later on it was delivered to his home. After Simmons received the telegram, he took no further steps. There was evidence that the trucks and equipment were available for the purpose of moving the rig off the location and that it could have been moved in about two hours. Beginning about 6:30 or 6:40 p. m. the well blew out again with terrific force and continued to blow wild until about midnight, the ground around the location cratered, the derrick fell over, and a large part of the rig was lost in the hole, with resultant damage apparently in excess of $50,000.
The District Court charged the jury that “Mr. Simmons stands in no better position than did Webb and White”, and submitted to the jury the issues going to whether the defendant entered into any valid contract of insurance, whether White falsely and fraudulently represented to the defendant’s agent that a binder had previously been issued covering this particular drilling rig, and whether White fraudulently failed to disclose to any authorized agent of the defendant the fact of the blow-out on the morning of September 4 and of the hazardous and dangerous condition existing at the location of this drilling rig. The jury returned a verdict for the defendant and the court entered judgment thereon.
The appellant’s first insistence on error is that the court erred in refusing to instruct the jury that the telegram in evidence constitutes a contract of insurance between Western Assurance Company and Simmons, insuring Simmons against loss or damage to his drilling rig by a blow-out and cratering from and after 4 p. m. on September 4, 1919, and that the jury should find for the plaintiff, Simmons, for the amount of loss or damage suffered to the drilling rig by blow-out and cratering after 4 p. m. on September 4, 1949. Simmons had not applied for such insurance and had had no dealings with anyone representing Western Assurance Company, except insofar as White was either representing him or was acting for his benefit. If White acted as Simmons’ agent, then, of course, Simmons was hound by White’s representations and concealment. If the contract of Western Assurance Company was with White-Webb Drilling Company, the lessee, for the benefit of itself and of the lessor, Simmons, as their interests might appear, then the principle becomes applicable that the third party beneficiary can acquire no better right to enforce the contract than that held by the contracting parties themselves. Seward v. South Florida Securities, 5 Cir., 96 F.2d 964, 967; Dickson v. Day, Tex.Civ.App., 275 S.W. 307, 309; Breaux v. Banker, Tex.Civ.App., 107 S.W.2d 382, 387, affirmed 133 Tex. 183, 128 S.W.2d 23; Hamburg-Bremen Fire Ins. Co. v. Ruddell, 37 Tex.Civ.App. 30, 82 S.W. 826; Georgia Home Ins. Co. v. Golden, 127 Tex. 93, 91 S.W 2d 695, 696; Annotation 81 A.L.R. 1212; 10) Texas Jur., Contracts, Sec. 281, p. 485; 2 Willison on Contracts (Revised ed.) Sec. 364A, p. 1061, Sec. 394, pp. 1136, 1137.
Appellant’s next insistence is that the District Court erred in refusing to instruct the jury ’‘that whatever else you have found, if you find that Jay Simmons would have and could have removed the drilling rig, but that he did not do so because he relied upon the telegram, you will find for the plaintiff in an amount, if any, and in the manner I have previously instructed you.”
Simmons had pleaded that, when he received the telegram in question, he placed full faith and reliance upon it as giving him insurance coverage on the rig and that, had he not received the telegram, he would have had the rig torn down and removed from the location and thus would not have sustained the loss. He further pleaded that he had made no representations of any kind or character, was guilty of no concealment, but was perfectly innocent and had sustained a .serious loss in reliance on the telegram. In effect, Simmons claimed es-toppel in pais against the appellee. The District Court did not submit this theory of recovery to the jury.
The appellee insists that the requested special charge to the jury was properly refused, if for no other reason, because it referred to an incorrect measure of damages. We will not pass on that question because, whether the charge was defective in that respect or not, it was sufficient to raise the question of the applicability against the defendant of estoppel in pais by reason of the representations contained in the telegram. See Rule 51, Federal Rules of Civil Procedure, 28 U.S.C.A.; Reeve Bros. v. Guest, 5 Cir., 132 F.2d 778; 3 Am.Jur., Appeal & Error, Sec. 379, Note 14, p. 112. Appellee answers, however, that Simmons had no right to insist upon insurance or removal of the rig, having agreed with White-Webb that it was op-tional with them whether they carried insurance on the rig or not. Simmons’ legal rights under his lease contract with WhiteWcbb in this respect are beside the point. According to the testimony of both Webb and Simmons, Webb had stated that he would remove the rig if it was not covered by insurance, and Simmons had insisted on that being done. (Footnote 1, supra.) According to the testimony of Dean and of Eagleston, the reason for reassuring Simmons as to the insurance was White’s statement that Simmons would not permit the men to work until he had confirmation in his hands of the fact that there was insurance coverage on the rig. There was thus substantial evidence that it was within Simmons’ power to take steps to protect his property. It is immaterial whether such steps would have been under his lease contract with White-Webb or by independent arrangement or agreement.
Appellee next insists that it is undisputed that the equipment had remained at the well site from a time since the first blow-out and until after 4 p. m., a space of some four or five hours, without any -attempt being made to remove it; and that Simmons’ conduct in permitting the equipment so to remain until the second blowout, about two and one-half hours later, was not in reliance on the telegram. That, however, in our opinion, was a question of fact for the jury, not for the Court to decide.
Appellee then insists that White was Simmons’ agent in attempting to procure the insurance. White-Webb Drilling Company, as the lessee of the rig, had authority to insure it for their own benefit and for the benefit of the lessor, Simmons. Whether White acted as Simmons’ agent, or solely for White-Webb Drilling Company with consequent third party benefits to Simmons, was a question, we think, upon which reasonable minds might differ under all of the circumstances and testimony, and which should therefore be submitted to the jury. There is no contention that Simmons made any misrepresentations or was guilty of any concealment, unless it be held that White acted as his agent.
The telegram was a clear representation by appellee’s agent to Simmons that the drilling rig owned by Simmons was covered by insurance against blow-out and cratering. The telegram was intended to influence Simmons’ actions. Assuming that White was not acting as Simmons’ agent, then, if Eagleston relied upon White’s representation that the rig had theretofore been insured and sent the telegram without checking upon the truthfulness of that representation, he did so at his own peril and at the peril of his principal. There would still remain, of course, a very serious question of fact, as to whether there was a material change of position by Simmons in reliance on the telegram. As stated in 3 Pomeroy’s Equity Jur., Sth ed., Sec. 812,
“The cases all agree that there can be no estoppel, unless the party who alleges it relied upon the representation, was induced to act by it, and thus relying and induced, did take some action. * * * Although this action is usually affirmative, yet such affirmative action is not indispensable. It is enough if the party has been induced to refrain from using such means or taking such action as lay in his power, by which he might haye retrieved his position and saved himself from loss.”
In Holland v. Blanchard, Tex.Civ.App., 262 S.W. 97, 101, 102, it was said:
“To work an estoppel, the person estopped must have known the facts or been guilty of negligence in not knowing them, and the persons in whose behalf the doctrine is invoked must have relied on and acted on the faith of what the former said or did or omitted.”
Other elements of estoppel in pais being present, if a third party beneficiary has been induced to alter his position in reliance upon a contract made for his benefit and represented by the promisor to be valid, the promisor may not set up against the beneficiary the defenses which he could have set up against the promisee. See Restatement, Contracts, Sec. 143, pp. 169 and 170; 12 Am.Jur., Contracts, Sec. 289; Annotation 81 A.L.R. 1292; 2 Williston on Contracts, Revised ed., Sec. 397. We think that the District Court erred in failing and refusing to submit to the jury the theory of estoppel in pais, including the question of whether White acted as Simmons’ agent in the procuring of the telegram and the question of whether in reliance on the telegram Simmons acted or omitted to act to his detriment.
Appellant’s next insistence on error is that the District Court erred in leaving to the jury the question of whether E. G. Dean was an authorized agent of Western Assurance Company, and in failing to instruct the jury that Dean was such agent, and that knowledge of any fact in the possession of Dean was knowledge also on the part of Western Assurance Company. In this regard appellant relies upon Article 21.02 of the 1951 V.A.T.S. Insurance Code -of the State of Texas, formerly Article 5056 of the Revised Civil Statutes. Thai Statute has been authoritatively construed not to confer any power or authority upon persons with reference to the making of contracts or to make the insurance company liable for any act of an agent, except as specified in that chapter or law. Hartford Fire Ins. Co. v. Walker, 94 Tex. 473, 61 S.W. 711, 712; Maryland Casualty Co. v. Seay, 5 Cir., 56 F.2d 322, Further, it is clear from the evidence that, at the time of White’s conversation with Dean, Dean was on vacation and specifically declined to act as an agent, referring White to Eaglcstou with the statement, “You tell him the story that yon have told me.” Certainly the District Court did not err in refusing’ to charge as a matter of law that Dean ■was acting as agent oí Western Assurance Company.
The appellant next urges that the District Court erred in permitting Eagleston to testify over the appellant’s timely objection as to his intention and meaning in the telegram that Eagleston sent to Simmons. Eagleston testified that, when he sent this telegram to Simmons, he did not intend to cover him so far as that rig was concerned, but was confirming what White had told him about the binder being arranged through Eagleston’s office, “I had no way of checking it and, as an accommodation to him, I sent the telegram.” The main thrust of that testimony was that Eagleston relied upon White’s misrepresentation. We think ■either such testimony was proper or there was no harm in its admission insofar as it related to appellant’s theory of a contract of insurance direct with Simmons, for, as we have indicated, such a contract could have arisen only through White as Simmons’ agent. On the theory of estoppel in pais, however, which should have been, but was not, submitted to the jury, we think that Eagleston should not be permitted to testify to his undisclosed intention in sending the telegram. Simmons could prevail on that issue only if White were not his
agent. Assuming that to be true, Simmons did not have the benefit of Eagleston’s undisclosed intention, and had a right to rely upon the telegram written as he received it.
It appears to us that the ease was carefully tried and fairly and ably submitted to the jury on all issues excepting only the substantially separate theory of estoppel in pais, and that the appellant is not justly entitled to a retrial of the other issues. This Court now has broad authority to “require such further proceedings to be had as may be just under the circumstances.” 28 U.S.C.A. § 2106; see, also, Constitution Publishing Co. v. Dale, 5 Cir., 164 F.2d 210, 213. The judgment is, therefore, reversed and the cause remanded for retrial solely upon the issue of estoppel in pais.
Reversed and remanded with directions.
. The conversation, according to Simmons, was:
“He (Webb) says, ‘Part of our rigs that wo are operating are covered, some are not. Whether this one is or not I want to talk to him about it, and if it is covered, I am going to start up. If it is not covered, I want him to insure, and if he can’t insure it, I’m going to move the rig oft'.’ I told him I wanted him under my contract, by all means, in dangerous areas I wanted it insured, and if it was not insured, or rather if he couldn’t get it insured, in the event that it wasn’t already insured, by all means to move it oil
. “And he said, ‘Simmons won’t permit our men to go back to work down there until we get confirmation in his hands that there is insurance on the rig, and I want you to wire Simmons confirmation of that insurance that Lander bound for me.’ He said he was unable to locate Lander in Dallas. I said, ‘Well, James, I have no knowledge of any binder of that type, in the first place, and in the next place, I wouldn’t have any authority to wire confirmation on something 1 didn’t know anything about.’ And I tried — I was trying to help him, because 1 felt if he had some men idle down there that needed to go back to work, I would do anything consistently that I could to help get them back. I tried to think how I could find out whether or not a binder had been placed on the rig. I tried to think if I could get hold of some of our girls in our office, and I couldn’t recall whore I could locate any of them. And I believe, if I’m not mistaken, that I told White I would see what I could do and would call him back. In the meantime, a friend of mine came to my room, Mr. Walter Monger, a newspaper man at Mineral Wells, and we walked down in the lobby of the hotel, and I was going through the lobby and they paged me, and it was White calling again, and I liad had a little time to think it over, and being unable to determine how I could get hold of anybody that had knowledge of whether a binder was in existence or not, I told White I would call Mr. Eagleston, of Frank Rimmer & Company, and he could doubtless find out through some of his personnel whether or not a hinder was in existence. James said, ‘Oh, there is no doubt about it being bound.’ He said, ‘The insurance is bound all right.’ I said, ‘Well, 1 will call Tom Eagleston and have him call you, and give your telephone number to Mm, and you tell Mm the story that you have told me.’ Ami that was the substance of the conversation I had with White.”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
Sun-Maid Raisin Growers of California, the appellant here and the plaintiff below, is an agricultural cooperative engaged primarily in the packing and marketing of raisins. It is incorporated under the laws of California. The trademark “SUN-MAID” has been in continuous use in interstate commerce by the appellant or its predecessors since 1915 and has been registered in the United States Patent Office since 1917. The mark has become incontestable within the provisions of 15 U.S.C.A. § 1065.
Sunaid Food Products, Inc., the appel-lee here and the defendant below, is a Florida corporation, engaged in the distribution of a large variety of fruit products under its trademark since 1948. It does not produce raisins and it does not sell them except as a component of one of its products.
The goods of both parties are normally sold in food stores and purchased by the same consumers, usually grocery-shopping housewives. The primary products are not in direct competition.
The appellant’s claim of trademark infringment is based solely on the Lanham Act, 15 U.S.C.A. § 1114(1) (a). A count for unfair competition was expressly waived on appeal. The trial court, sitting without a jury, found that, as there was no direct competition, the goods of Sunaid would not be confused with or mistaken for the goods of Sun-Maid. It was also found that there was no likelihood of the goods of Sunaid being mistakenly thought to have been produced or sponsored by Sun-Maid. The two trademarks were found not to be confusingly similar. These findings are matters of fact and not to be disturbed unless clearly erroneous. Frostie Co. v. Dr. Pepper Co., 5 Cir. 1965, 341 F.2d 363; Aloe Creme Lab., Inc. v. Texas Pharmacal Co., 5 Cir. 1964, 335 F.2d 72; American Foods, Inc. v. Golden Flake, Inc., 5 Cir. 1963, 312 F.2d 619; Sears, Roebuck & Co. v. All States Life Ins. Co., 5 Cir. 1957, 246 F.2d 161, cert. den., 355 U.S. 894, 78 S.Ct. 268, 2 L.Ed.2d 192.
The finding that Sunaid’s products were not likely to be mistaken for or confused with Sun-Maid’s products is not clearly erroneous. While the record indicates that Sun-Maid has made nominal shipments of various food products for a number of years, there is no indication that Sun-Maid has actually sold any of these goods in commerce. There is certainly no indication that Sun-Maid markets anything other than raisins in the area where Sunaid sells its products. As the goods are dissimilar, confusion of the goods is unlikely.
The finding that there is no likelihood of confusion between the sources of Sun-Maid’s products and those of Sunaid presents a more difficult problem. In its unpublished opinion, the trial court placed great emphasis on differences in appearance between the labels used by the parties. Reference is made to different pictures used in conjunction with the trademarks and to differences in the style of lettering used. The test, however, is not whether the labels can be distinguished, but whether the usual purchaser, a housewife doing her grocery shopping, would be likely to think Sunaid’s products were produced by or had some connection with Sun-Maid. Pure Foods, Inc. v. Minute Maid Corp., 5 Cir., 1954, 214 F.2d 792, cert. den., 348 U.S. 888, 75 S.Ct. 208, 99 L.Ed. 697. That Sun-Maid might use a somewhat different label and a different style of type in marketing a product other than its traditional raisins might seem likely to the housewife-purchaser.
The trial court found that Sun-Maid had offered no significant evidence of confusion or the likelihood of confusion. This Court has said that:
“In determining whether there [is] likelihood of confusion, a matter as to which there was no substantial evidence, we are of the view that a mere ocular examination of the two marks might permit the trial court to make its conclusion. However, all relevant evidence should be considered.” Frostie Co. v. Dr. Pepper Co., supra.
It is the labels that the prospective purchaser sees. The trademarks cannot be isolated from the labels on which they appear. The finding of an absence of proof of confusion or likelihood of confusion as to the product source is not clearly erroneous.
The judgment of the district court is
Affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
This is an appeal in an action at law instituted in the court below to recover excess profits taxes assessed and collected for the calendar year 1917 from the Atlantic Life Insurance Company. That company is a stock life insurance company doing business on the level premium plan and issuing both participating and non-participating- policies. It is required by law to maintain a reserve of assets for the protection of its policy holders ; and the sole question involved is whether this legal reserve should be included in invested capital in the computation of its excess profits tax. We agree with the learned judge below that tho ease is controlled by the decision of the Supreme Court in Duffy v. Mutual Benefit Life Insurance Co., 272 U. S. 613, 47 S. Ct. 205, 71 L. Ed. 439, and cannot be distinguished on the ground that the company there was a purely mutual company, whereas the company here is a stock company. The relationship of the company and the policyholders to the reserve fund, not the right of the latter to the control and management of the company, is tho determining factor; and that relationship is the same here as it was shown to- be in the Duffy Case.
The amount paid in by policyholders and carried in the legal reserve of the company was certainly money paid in by them for shares in a common fund, a fund maintained under legal requirement for their benefit and invested for their advantage as well as for the "advantage of the company. It would thus seem to be invested capital within the clear meaning of clause 1 of section 207(a) of the Revenue Act of 1917, 40 Stat. 306. If, however, that clause be limited in meaning to money paid in by stockholders for shares of stock, then such payments, with interest earnings thereon, fall clearly within the classification of “paid-in or earned surplus” under clause 3. Nothing need be added to the able opinion filed in the cause by the judge below, and same is adopted as the opinion of this court.
Affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
PER CURIAM.
This is an appeal challenging the special verdict in a third party action and the judgment entered thereon.
In January, 1965, John Jeff LaGorga, a minor, by Joseph LaGorga, his guardian, and Joseph LaGorga and Bernadette LaGorga brought suit against the Kroger Co. to recover damages arising from injuries allegedly suffered when a jacket purchased from the Kroger Co. and worn by the minor plaintiff caught fire and burned. Kroger Company filed a third party complaint against Sidney H. Evans, individually and doing business as Evans Manufacturing Company (Evans) and against Evans Manufacturing Company, Inc. (Evans, Inc.), hereafter referred to collectively as “appellees.” In the original third party complaint, Kroger charged, inter alia, “Certain jackets identical to the one alleged by the plaintiffs to have been purchased from The Kroger Co. were purchased from and manufactured by appellees.” The third party defendants answered, and denied the charge “as stated” and more specifically averred as a first defense, that (1) Evans, Inc. had not manufactured the jacket in question; (2) Evans had sold certain jackets to the Kroger Co. and (3) Evans “has no knowledge as to whether or not the jacket allegedly worn by the minor plaintiff had been supplied to [The Kroger Co.] by [Evans].”
The Kroger Co. (appellant), in an effort to tie the third party defendants to the jacket in question, amended its complaint in October, 1965, to allege, inter alia:
“If it is established at the trial that the jacket involved was sold by The Kroger Co. * * * then said jacket was manufactured by and was purchased from Evans Manufacturing Co., also known as Evans Manufacturing Company, Incorporated, or as Sidney H. Evans, individually and trading and doing business as Evans Manufacturing Co.”
Appellees did not file an answer to the amended complaint.
At trial Kroger took the position that pursuant to Rule 8(d) of the Federal Rules of Civil Procedure, the unanswered allegation of the amended complaint amounted to an admission by the appellees that they manufactured the jacket in question. At the close of Kroger’s case, the district court, on Kroger’s motion and over appellees’ objection, admitted the admission into evidence. Immediately thereafter, counsel for the appellees announced, in his opening statement, that the appellees’ would prove that they had not manufactured the jacket worn by the minor plaintiff. Appellant unsuccessfully objected that the appellees had admitted parentage, i. e., manufacturing the jacket. At the close of the appellees’ case, on appellees’ motion, the “conditional admission” was stricken from evidence.
The jury returned a verdict against Kroger in the main suit. In the third party action, by special interrogatories, the jury found that the appellees had not manufactured the jacket worn by the minor plaintiff. Kroger moved for a new trial, which motion was denied. LaGorga v. Kroger Company, 275 F.Supp. 373, 383 (W.D.Pa., 1967).
Kroger now appeals from the special verdict in the third party action and the judgment entered thereon.
Appellant’s challenge is predicated on its contention that, as against appellant, the appellees admitted- manufacturing the jacket in question when they failed to file an appropriate response to appellant’s amended third party complaint and the district court erred in deciding to the contrary. The district court found that the allegations concerning the parentage issue in the original third party complaint and in the amended third party complaint were substantially the same. Thus, it concluded that appellees’ denial in their answer to the original complaint served equally to deny the averment in the amendment. Appellant attacks the district court’s premise of substantial similarity. The attack lacks merit.
It is true, as the appellant urges, that in the amended third party complaint appellees were charged with manufacture of the particular jacket worn by the minor plaintiff, while the original complaint merely alleged that the appellees had manufactured jackets identical to the one in question. However, appellees did not in their first defense address themselves to the failure of the original complaint to charge them with the manufacture of the jacket in question. Instead, their answer had the effect of denying that the appellees manufactured the jacket. While it would have been preferable for the appellees to respond directly to the amended complaint, in the circumstances of this case, the failure to specifically respond did not result in an admission under Rule 8(d) F.R.C.P.
Concededly, and as the district court observed, appellant could have been misled by the absence of a specific response to the amended complaint. However, any possible confusion generated in appellant’s mind by the absence of a specific response, should have been dispelled by the pretrial stipulation which appellant’s counsel signed and which antedated the trial by some 7 months.
In addition to the foregoing, the appellant’s conduct at trial belies any contention that the appellant was surprised to its prejudice when the trial of the third party action focused on the issue of parentage. To the contrary, it was the appellant who introduced the issue when it called Jack Piet, in its case in chief, for, in the words of appellant’s counsel, “ * * * the very narrow purpose of proving from whom these jackets came.” In these circumstances, accepting appellant’s contention would be to reject the well established principle that, under the federal rules pleading is a vehicle “ 'to facilitate a proper decision on the merits’ ” and not “ ‘a game of skill in which one misstep by counsel may be decisive * * * United States v. Hougham, 364 U.S. 310, 317, 81 S.Ct. 13, 18, 5 L.Ed.2d 8 (1960).
Beyond the challenge just discussed, appellant also contends that the district court erred when, at the close of all the testimony, it struck from evidence the paragraph of the amended complaint which appellant had previously introduced as an admission. Fatal to appellant’s contention is our approval of the district court’s determination that there was no admission. It is significant also that, although appellant’s counsel vigorously opposed the motion to strike, and moved for a mistrial when the district court granted the motion,' he neither asked for a continuance to produce further evidence, nor did he ask leave to reopen his case to offer additional testimony or documentary evidence at that time.
Accordingly, the judgment of the district court will be affirmed.
. The pertinent parts of the pretrial stipulation are set forth in the district court opinion. LaGorga v. Kroger, supra, p. 385, n. 24.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
DAVID T. LEWIS, Circuit Judge.
Appellant, in 1966, was discharged and removed from civil service status as a civilian employee in the Aeronautical Center Medical Clinic of the Federal Aviation Agency at Oklahoma City. After termination of administrative proceedings she filed this action in the District Court for the Western District of Oklahoma and now appeals pro se from an adverse summary judgment entered by that court.
This case has been presented to us with the complete sincerity of one who believes she has been victimized by her fellow employees and agency superiors and with the typical broad scope of complaint that accompanies lack of legal expertise. From our examination of the voluminous record we find three issues that can survive within the jurisdictional limitations accorded judicial review in this court:
Did the Agency substantially comply with all required procedural steps in effectuating appellant’s removal? See Bailey v. Macy, 10 Cir., 378 F.2d 1021; Seebach v. Cullen, 9 Cir., 338 F.2d 663, cert, denied, 380 U.S. 972, 85 S.Ct. 1331, 14 L.Ed.2d 268; Brown v. Zuckert, 7 Cir., 349 F.2d 461, cert, denied, 382 U.S. 998, 86 S.Ct. 588, 15 L.Ed.2d 486.
Was appellant improperly denied a constitutional right to examine her accusers ?
Was the Agency action in imposing the remedy of removal so harsh as to reflect only caprice in view of the total circumstances ?
We can find nothing in this record to indicate that the action against appellant did not follow the required and regulatory steps provided in such cases. Mrs. Bishop was served notice of the Agency’s proposed action in compliance with 5 C.F.R. 752.202 and the proceedings developed with regularity to termination by decision of the Board of Appeals and Review in Washington. And although the application of somewhat comparable procedures has been considered and held to have prohibited constitutional overtones we can find no authority that the procedures contain an inherent denial of due process. However, we must note that these procedures have allowed appellant, accused of being a gossip, to have been found guilty of that charge through the legal gossip of affidavits and the ex parte statements of persons taken in interview by Security Officers. Although we feel bound to view this anomaly as not amounting to a constitutional prohibition we offer it no affirmative con-fort.
At the hearing conducted by an examiner for the Regional Office (Dallas) appellant was confronted by and cross-examined witnesses produced by the Agency. By letter addressed to the Chief of Personnel Relations at the Aeronautical Center appellant had requested that nine other employees of the Center be made available as witnesses at the hearing. At such time (1964) the applicable regulation provided:
“An appellant is entitled to appear at the hearing on his appeal personally or through or accompanied by his representative. The agency is also entitled to participate in the hearing. Both parties are entitled to produce witnesses but as the Commission is not authorized to subpoena witnesses the parties are required to make their own arrangements for the appearance of witnesses.” 5 C.F.R. 772.305(c).
The requested witnesses did not appear but there is nothing here to indicate that appellant made any subjective attempt to obtain their presence. Such was her initial burden under the regulation. Williams v. Zuckert (on rehearing), 372 U.S. 765, 83 S.Ct. 1102, 10 L. Ed.2d 136.
Finally, pointing to her prolonged and excellent record for competency as a civil servant, appellant contends that she should have been reassigned within rather than discharged from the service. The remedy necessary to promote the efficiency of the civil service is a matter peculiarly and necessarily within the discretion of the Civil Service and cannot be disturbed on judicial review absent exceptional circumstances not here present. Studemeyer v. Macy, 116 U.S.App.D.C. 120, 321 F.2d 386.
Affirmed.
. Mr. Justice Douglas, dissenting in Williams v. Zuckert, 371 U.S. 531, 533-536, 83 S.Ct. 403, 9 L.Ed.2d 486.
. Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968, 3 L.Ed. 1012.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
DUNIWAY, Circuit Judge:
In this action for declaratory relief, in which jurisdiction is based upon diversity of citizenship, there are three appeals. The action was begun by Atlantic National Insurance Co. (Atlantic). The defendants are California State Automobile Association Inter-Insurance Bureau (California), Samuel Rotanzi (Rotanzi) and Edgar T. Weekes and Catherine H. Weekes, husband and wife, (the Weekes). The facts are not disputed, and the court entered a summary judgment, from various parts of which the Weekes, California and Rotanzi, and Atlantic appeal.
The action arose out of an automobile accident occurring in Arizona. Rotanzi rented a car from Hertz Corporation. There was a collision between that car, driven by Rotanzi, and a car owned by the Weekes. For the purposes of this case, it is stipulated that at the time, Rotanzi was under the influence of intoxicating liquor. The accident occurred on April 20, 1961. On June 26, 1961, the Weekes filed an action in the federal district court claiming personal injury damages exceeding $160,000. In February, 1963, the parties agreed to hold that action in abeyance, to await the outcome of a declaratory judgment action to be filed thereafter. On March 22, 1963, Edgar Weekes filed suit in Arizona Superior Court against Rotanzi, claiming damage to his car; the present suit which is the declaratory judgment action that had been agreed upon, was filed by Atlantic about October 1, 1963, issue finally being joined upon the second amended complaint filed November 20, 1964. The car damage action was settled in October, 1963, and a stipulation was filed in that action on October 22, 1963. Pursuant to that stipulation, the car damage action was dismissed with prejudice upon payment to Weekes of $1,101.52, the exact amount prayed for in the complaint. The purpose of the present suit was to determine questions of insurance coverage. It was on file but. had not come to issue when the property damage action was settled.
Atlantic had issued a policy of insurance to Hertz Corporation, affording liability insurance to persons leasing Hertz; cars. In this action, in its second amended complaint, Atlantic claimed:
1. that the disposition of the car damage action makes it a bar to the personal' injury action;
2. that the coverage issued by California to Rotanzi is primary and Atlantic’s coverage, if any, is secondary, and
3. that coverage was not afforded te Rotanzi because the policy excludes coverage if the accident occurs “while [the car is] being operated * * * by any" person under the influence of intoxicants * * or, alternatively, that this exclusionary clause should at least reduce Atlantic’s liability to a maximum of $10,-000 per person and $20,000 per accident. The policy limits are $100,000 and $300,-000.
California had issued a policy of liability insurance to Rotanzi. Both California and Rotanzi asserted:' (1) that the disposition of the car damage action makes it a bar to the personal injury action; (2) that Atlantic’s coverage is primary, or, alternatively, that the two insurers should participate in proportion to the respective limits of their policies; and (3) that Atlantic’s liability is neither excluded nor limited by its exclusionary clause.
The Weekes asserted that the disposition of the car damage case does not make it a bar to the personal injury action, that Atlantic’s liability is neither excluded nor limited, that California is also liable for Rotanzi’s conduct, and that both Atlantic and California should be required to pay the full amount, up to their full policy limits, of the Weekes’ personal injury claims.
All parties moved for summary judgment. The court’s judgment on these motions is to the following effect (the numbering follows the numbering in the judgment):
1. The disposition of the car damage action does not make it a bar to the personal injury action.
2. A. Coverage of Rotanzi by Atlantic’s policy is not excluded.
B. The limits of Atlantic’s coverage of Rotanzi are $10,000 for one injury, $20,000 for one accident.
C. Atlantic’s coverage is primary.
D. California’s coverage is excess.
The Weekes appeal from paragraph 2B: Atlantic appeals from paragraphs 1, 2A, 2C, and 2D; California and Rotanzi appeal from paragraphs 1 and 2B. We consider these appeals according to their subject matter.
1. The effect of the settlement of the car damage case.
An affidavit submitted in behalf of the Weekes, in support of their motion for summary judgment, shows that in February, 1963, about two years after the personal injury action was filed, the parties agreed that it be “held in abatement” pending disposition of a declaratory judgment action to be filed. In March, 1963, without the knowledge of the attorney who represented the Weekes in the personal injury action, Mr. Weekes, through another attorney, filed the car damage action. Counsel for Mr. Weekes in the car damage case was retained by Allstate Insurance Company. This was a “subrogation” action. Allstate, however, was not named as a plaintiff. The terms of its subrogation rights, if any, are not stated. It does not appear that Allstate paid for the damage to the car, or that Weekes assigned his car damage claim to Allstate, or whether the Allstate policy required that he do so. That policy is not in the record.
The present declaratory judgment action was filed October 1, 1963. Atlantic is represented by different counsel from counsel who were acting for it as Rotanzi’s counsel in both the car damage and personal injury actions. During October, 1963, counsel for both sides in the car damage action agreed to settle and stipulated to its dismissal, with prejudice. An order to that effect was entered October 22, 1963. Not until October 26 did the attorney representing Weekes in the personal injury action learn of this stipulation and dismissal. He learned of it when Weekes brought him a settlement draft containing a full release. The attorney advised Weekes not to sign. After some correspondence with Atlantic’s attorney and the attorney chosen by Allstate to represent Weekes in the ear damage case, a new draft, not containing the release, was issued and Weekes’ counsel in the personal injury case advised Weekes to accept it, which he did. Certain correspondence between Weekes’ attorney in the car damage case, and Atlantic’s attorney in that case and the personal injury case, is set out in the margin.
Atlantic, California and Kotanzi all urge that the stipulated dismissal in the car damage case is res judicata here. Their argument is in substance as follows: Arizona adheres to the single cause of action rule. In negligence cases the cause of action lies in defendant’s breach of duty, and where, as here, that breach causes both personal injury and property damage, there is still but one cause of action. The result of the rule is that if the injured party brings separate actions for personal injury and for property damage, and judgment is for the defendant in either of them, that judgment is res judicata as to the other action, and a bar to its further prosecution. The Arizona court has said that where two cases based on the same cause of action are filed, this result follows, regardless of which action was first commenced.
Dismissal with prejudice is an adjudication on the merits, in favor of the defendant. Here, the property damage case was dismissed with prejudice by stipulation of the parties. This, say appellants, was an adjudication on the merits against Edgar Weekes, and is therefore res judicata in the personal injury case, which must be dismissed. This is particularly true here, they say, because the settlement was completed with full knowledge of the facts. The attorney for Atlantic, representing Rotanzi in both the car damage and the personal injury cases, expressly reserved whatever rights the dismissal might confer; the attorney for the Weekes in the personal injury case knew this and took his chances, based upon his own view of the law. He —and therefore his clients — are bound by the legal result of what he permitted them to do. No fraud was perpetrated.
So far as appears from this record, none of the foregoing applies to Mrs. Weekes. She was not a party to the property damage case. The only case in which any cause of action of hers is asserted is the personal injury case. Her rights in the personal injury case, therefore, have not been adjudicated.
As to Mr. Weekes, the result demanded by the appellants hardly squares with any conceivable notion of justice. The car damage case was brought by an attorney chosen by Allstate, using Weekes’ name. His personal injury attorney did not even know that it had been filed, much less that it had been settled and dismissed, until after it was dismissed. At that point the matter was brought to his attention, and he objected to the release that Weekes was asked to sign. The release was then withdrawn by the attorney who represented both Rotanzi and Atlantic in both cases.
It is quite true that if Arizona law compels the result sought by appellants we must follow it, leaving Mr. Weekes to whatever remedies he may have against those who led him, or allowed him to proceed, down the road to disaster. Counsel suggest that there are two routes whereby Weekes can escape — the so-called “subrogation case” route, and the “consent” route. The subrogation exception to the rule against the splitting of a single cause of action has been recognized where the property element of the damages alleged in an accident case is covered by insurance. The insurer, under the terms of the insurance contract or upon paying off its obligation to the insured and taking an assignment, is seen, in effect, as the holder of a separate cause of action for the property damage. Hence the insurer’s suit for reimbursement from the defendant does not bar the injured party’s action for personal injury damages. The consent exception merely recognizes that the rule against splitting is for the benefit of the defendant and that he must timely object to the splitting. Appellants assert that the Arizona court has not opened the gate to either route. This is true, but it is also true that it has never considered whether it ought to. Other courts, confronted with similar arguments, have opened the gate to one or the other of them.
On the record before us, we cannot support taking the “subrogation case” route. The affidavit of the Weekes’ attorney in support of their motion for summary judgment is totally insufficient. It merely alleges two things: (1) that the attorney for Mr. Weekes in the car damage case was retained by Allstate, Weekes being the nominal plaintiff, and (2) that the action was a “subrogation action.” Item (2) is nothing but a legal conclusion. Rule 56(e) requires “such facts as would be admissible in evidence.” No such facts are alleged, as to the subrogation issue. There is no allegation that Allstate had insured anything, much less any proof of the terms of any Allstate policy. We cannot indulge in any presumptions as to its existence or its terms. Nor can we presume that Allstate had become subrogated to Mr. Weekes’ rights under common law or equity principles when the car damage action was filed. There is no evidence that at that time Allstate had paid anything. See 46 C.J.S. Insurance § 1209, pp. 152-160. Indeed, there is no evidence that Allstate ever paid anything. All that was shown was that the settlement check was payable to and endorsed by Weekes and his attorney, and was also endorsed by Allstate. A counter affidavit establishes that the car damage case was filed in Weekes’ name alone, and that the complaint contained no allegations whatever about any rights of Allstate to recover anything.
No case has been cited to us that opens the gate to the subrogation ease route under such circumstances. Every case having comparable facts refuses to open the gate. In every case in which the gate has been opened, the insurance company-subrogee was the party to the car damage case and its rights were the rights litigated in that case. In every such case, the insurance company had paid off, and was an assignee of the car damage claim, either by operation of law or by express assignment. In every such case, the car owner was not a party to the car damage case. And these were the facts held to be controlling.
We turn then, to the gate to the “consent” route. We are convinced that the Arizona courts would open that gate, but the problem is whether it leads to a culde-sac. The one cause of action rule, and its result, the rule against splitting causes of action, are for the benefit of the defendant — to prevent his being harassed by multiple lawsuits. It would seem to follow that, if the defendant does not object, in either case, to the splitting of the cause of action, he will be held to have waived the point.
The rule against splitting and the reasons for it, and the consent exception, are well stated in Restatement, Judgments, § 62:
Ҥ 62. SPLITTING CAUSE OF ACTION-JUDGMENT FOR PLAINTIFF OR DEFENDANT.
“Where a judgment is rendered, whether in favor of the plaintiff or of the defendant, which precludes the plaintiff from thereafter maintaining an action upon the original cause of action, he cannot maintain an action upon any part of the original cause of action, although that part of the cause of action was not litigated in the original action, except * * *.
“(c) where the defendant consented to the splitting of the plaintiff's cause of action.
“Comment:
a. Rationale. The rule stated in this Section is based on the idea that where a person has a single cause of action, in the interests of convenience and economy to the public and to the defendant he should be entitled to but one right of action and hence should be required to unite in one proceeding all matters which are part of it.
“Comment on Clause (c):
m. Consent of defendant. The purpose of the rule stated in this Section is to protect the defendant from being harassed by several actions based upon a single cause of action. It is not applicable where the defendant consents, in express words or otherwise, to the splitting of the cause of action.
“Where the plaintiff brings separate actions based upon different items included in his claim, and in none of the actions does the defendant make the objection that another action is pending based upon the same claim, a judgment for the plaintiff in one of the actions does not preclude him from obtaining judgment in the other actions. In such a case the failure of the defendant to object to the splitting of the plaintiff’s claim is effective as a consent to the splitting of the claim.”
We agree, and we think that the Arizona courts would agree. Why, then, can it be said that the “consent” gate leads to a cul-de-sac? Because here, even though the defendant did not object to splitting the cause of action, there was a judgment, on the merits and in favor of the defendant, in the car damage case. It will be noted that the comment on clause (c), quoted above, is limited to the case in which the plaintiff obtains a judgment in one of the cases. The first Comment in the Restatement, dealing with the rationale, which is also quoted above, indicates that the reference to the plaintiff in the above Comment is deliberate. The last paragraph of the first Comment reads:
“The rule stated in this Section is applicable whether the judgment is for the plaintiff or for the defendant, irrespective of the issues raised in the case, provided only that where the judgment is for the defendant it is upon the merits as stated in § 48, and hence is one which would bar the plaintiff from maintaining another action upon the original cause of action.”
It is argued from this that if defendant gets judgment in one of the cases, on the merits, his waiver or consent to the splitting of the cause of action does not extend to a waiver of the res judicata effect of his judgment. This is said to be made clear by Section 48 of the Restatement, to which the foregoing Comment refers. It says:
“§ 48. JUDGMENT FOR DEFENDANT ON THE MERITS— BAR.
Where a valid and final personal judgment is rendered on the merits in favor of the defendant, the plaintiff cannot thereafter maintain an action on the original cause of action.”
And, as the cases cited in note 6, supra, show, the dismissal with prejudice of the car damage case was an adjudication on the merits in favor of Rotanzi. Hence it is urged that it cannot be said that Rotanzi or Atlantic waived the possible res judicata effect of the dismissal with prejudice of the car damage case, that, on the contrary, they expressly asserted their rights, and offered Weekes an alternative, which his attorney elected not to accept.
The Weekes urge that the dismissal was in favor of Rotanzi as a matter of form only, that in substance it was a judgment in favor of Mr. Weekes, who received the full amount prayed for in his complaint. The same, however, can be said of any ease in which the defendant settles and the action is dismissed with prejudice, as occurred in several of the cases cited in note 6, supra. It can be said that Weekes is here attempting a collateral attack upon the car damage judgment, and that this he cannot do.
We need not, and do not, decide this question, however. We assume that the dismissal is res judicata. In presenting their argument, both sides have failed to consider the effect of the Arizona Rules of Civil Procedure, 16 A.R.S., and of the Federal Rules of Civil Procedure. Arizona Rule 8(d) requires that all matters constituting an avoidance or affirmative defense be pleaded. The plea of another action pending is clearly within the rule. No such pleading was filed in the car damage case, although the personal injury case had been pending for more than two years. Under Rule 12 (i), it was waived. This, we think, is “consent” within the meaning of the consent rule. Thus there was consent to the splitting of the single cause of action.
When the car damage case was settled, the personal injury case had been pending in the Federal court for over 2 years. Under F.R.Civ.P. 8(c), res judicata must be pleaded; if not so pleaded, it is waived, Rule 12(h). Here, it can only be raised by supplemental answer under Rule 15(d), since the settlement occurred long after the personal injury suit was filed. Such a pleading can be filed only on motion, and the court “may” permit it, “upon such terms as are just.” So far as appears, no motion for leave to file a supplemental answer has ever been filed in the personal injury case. We think that the attempt to raise the defense in this case should be treated as if it were a motion for leave to file a supplemental answer in the personal injury case. In substance, the court denied a motion for leave to file a supplemental answer in the personal injury case. We think that it did not abuse its discretion in so doing.
A motion for permission to serve and file a supplemental pleading is addressed to the sound discretion of the court The fact is that in the car damage case Weekes recovered, by settlement, exactly what he prayed for in his complaint. The dismissal with prejudice was a substitute for a judgment in Weekes’ favor and a satisfaction of that judgment. The latter would have the same legal effect as a release of the car damage claim, but would not, under the consent exception, bar the personal injury action. The only purpose that the dismissal with prejudice should be given is the same, to release the car damage claim by its dismissal. There is nothing in the record to support a conclusion that any party to the stipulation believed that the personal injury claim was in fact being settled. The correspondence quoted above makes this clear. Before the settlement was completed, the appealing parties eliminated from the settlement check language that would have released the personal injury claim. The check was accepted only after that language was removed. Thus the paying parties paid when they knew that the receiving party intended to settle only the car damage claim. To uphold the contention that the dismissal is res judicata would certainly work an injustice. We hold, as we think that the Arizona courts would hold, that to permit the raising of the defense would work an injustice, and that the court did not abuse its discretion in refusing to permit it. The Arizona Supreme Court has gone out of its way to avoid applying the doctrine of res judicata “so rigidly as to defeat the ends of justice.” We think that that is what it would do here. Paragraph 1 of the judgment is correct.
2. The Effect of the “Intoxicants” Exclusion.
It is not seriously contended that the exclusion of liability in the Atlantic policy is effective to permit Atlantic to escape all liability. The State of Arizona has a Financial Responsibility law that appears to invalidate the exclusion. In the light of the decision in Jenkins v. Mayflower Ins. Exch., 1963, 93 Ariz. 287, 380 P.2d 145, we think that the Arizona courts would strike down the exclusion. Paragraph 2-A of the judgment is correct.
3. The limits of Atlantic’s liability.
The Atlantic policy limits are $100,000/$300,000. The Financial Responsibility law provides, in pertinent part: A.R.S. § 28-1170, subsec. B:
“The owner’s policy of liability insurance must comply with the following requirements:
“2. It shall insure the person named therein or any other person, as insured, using the motor vehicle * * * with the express or implied permission of the named insured * * * 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.
A.R.S. § 28-1170, subsec. F:
“1. The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute when injury or damage covered by the motor vehicle liability policy occurs. * * * [A]nd no violation of the policy shall defeat or void the policy.”
It is section 1170, subsec. F which nullifies the “intoxicants” exclusion.
The law also provides:
A.R.S. § 28-1170, subsec. G:
“A policy which grants the coverage required for a motor vehicle liability policy may also grant lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy and the excess or additional coverage shall not be subject to the provisions of this chapter. With respect to a policy which grants the excess or additional coverage the term ‘motor vehicle liability policy’ shall apply only to that part of the coverage which is required by this section.”
The appealing parties find some conflict between the provisions of sections 1170, subsec. B and 1170, subsec. G and the provisions of section 1170, subsec. F. We think that there is no conflict, and that section 1170, subsec. F nullifies the exclusion only to the extent of the limits specified in section 1170, subsec. B. To us, section 1170, subsec. G shows that this was the intent of the Arizona legislature. And there is nothing to the contrary in Atlantic’s policy. It provides, with reference to State Financial Responsibility laws as follows:
“When this policy is certified as proof of Financial Responsibility for the future under the provisions of the Motor Vehicle Financial Responsibility law of any state or province, such insurance as is afforded by this policy for bodily injury liability or for property damage liability shall comply with the provisions of such law which shall be applicable with respect to any such liability arising out of the ownership, maintenance or use of the automobile during the policy period, to the extent of the coverage and limits of liability required by such law, but in no event in excess of the limits' of liability stated in this policy.”
To us, this shows an intent, first, to afford the coverage required by the law, and second, to limit the amount of liability to that required by the law. The policy is thus wholly consistent with the law.
The cases on which appellants rely are not in point. None decides the precise question here presented.
Paragraph 2B of the judgment is correct.
4. The primary-excess question.
The contest here is between Atlantic and California. The policy limits of each, as applicable here, are the same —$10,000/$20,000. Atlantic’s policy provides :
“The insurance under this policy shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under another policy or otherwise.”
California’s policy provides:
“If the insured has other insurance against the loss covered by part I of this policy the Bureau shall not be liable for a greater portion of such loss than the applicable limit of liability stated in the declaration bears to the total applicable limits of liability of all valid and collectible insurance against such loss; provided, however, the insurance with respect to a temporary substitute automobile or non-owned automobile shall be excess insurance.”
The court held that Atlantic’s coverage is primary, California’s excess. Atlantic attacks this conclusion by arguing that California’s “excess” clause, the proviso in the language quoted above, is not here applicable. It says that the whole paragraph is ambiguous, and should be construed against California so as to bring into effect only California’s pro rata clause. Other courts have not found such clauses ambiguous, nor do we. It follows that we do not have here, as Atlantic asserts, a conflict between Atlantic’s “excess” clause and California’s “pro rata” clause. Rather, here is a conflict between two excess clauses. We find no applicable Arizona decisions, but the normal rule in such cases is that the two policies are to be applied pro rata.
California, however, argues that the judgment is correct because the primary purpose of its policy is to insure Rotanzi while driving his own car, and the coverage given while he is driving another’s car is incidental and intended to operate only as excess to the insurance of the owner of that car, here Hertz, while Atlantic’s policy is primary because it insures Hertz, the owner. In part, California relies on the contention that the excess clause in Atlantic’s policy makes its coverage excess only over “other valid and collectible insurance available,” while California’s excess clause is not so worded. Hence, it says, California’s insurance is not “valid and collectible” unless the damages exceed the limits of Atlantic’s policy. But California’s policy also refers to other “valid and collectible” insurance in the pro rata portion of the paragraph containing the excess proviso, and, the excess language being a proviso to the pro rata provision, it also refers to other “valid and collectible” insurance. We hold that the two excess clauses offset each other, and that each insurer must bear its portion of the loss, in proportion to the limits of its policy. Paragraphs 2C and D of the judgment are erroneous.
Paragraphs 2C and D are reversed; in all other respects, the judgment is affirmed. The matter is remanded with directions to modify paragraphs 2C and D in accordance with this opinion.
The problem as to the effect of the dismissal of the car damage ease should never have arisen if the Weekes’ personal injury counsel had properly protected his clients’ interests. His briefing of the question has been of little assistance to us on this appeal. The Weekes, therefore, although successful here as against the appeals of Atlantic, California and Rotanzi from paragraph 1 of the judgment, shall recover no costs on appeal. Atlantic shall recover one-half of its costs on appeal from the Weekes and one-half of its costs on appeal from California. Otherwise, each party shall bear its own costs on appeal.
. Atlantic's attorney to Weekes’ ear damage attorney:
“Now, in delivering these funds to you, Bill, I want it clearly understood that we are not in any manner waiving, relinquishing or altering what legal effect, if any, the dismissal of the above captioned matter may have on your client’s action that is pending in Federal Court wherein he is represented by Bob Begam. “If the foregoing is not satisfactory to you and your client, please return the enclosed check to me. We will put the above captioned cause back on the trial list and try the lawsuit at the earliest opportunity available.”
A copy was sent to the Weekes’ personal injury attorney. He then wrote to Atlantic’s attorney:
“It was my understanding that Bill was representing Mr. Weekes’ insurance company on their subrogation claim. I can’t imagine why you refer to Mr. Weekes as being Bill’s client. Nor do I understand how the property damage settlement can conceivably have any effect on the pending Federal Court actions.
“Clearly, you can’t be asking Mr. Weekes to sign a general release in order to enable his insurance company to receive compensation for their subrogation claim. I am confident that you and Bill can work this problem out without prejudicing the interest that Mr. Weekes has in processing his personal injury claim.” Atlantic’s attorney replied:
“There is no mention of subrogation in the Complaint in the above captioned matter. Mr. Weekes is named as a party plaintiff and Bill Andrews indicates in the Complaint that he is his attorney as far as the lawsuit is concerned. This is why I refer to Mr. Weekes as being Bill’s client in this suit.
“I am not asking Mr. Weekes to sign anything. There has already been signed by Bill Andrews, as Mr. Weekes’ counsel, a stipulation for dismissal of this cause with prejudice. My last letter to Bill was simply to point out that in paying these moneys to Bill and his client, we are fully reserving any effect that the conclusion of this litigation may have on the suits pending in Federal Court. So you see, Bob, I really have nothing to work out with Bill Andrews — either a) he accepts the money and the Stipulation and order of dismissal with prejudice stands, or b) he returns the money and we try the State action.”
Weekes’ personal injury attorney then wrote to Weekes’ car damage attorney and to Atlantic’s attorney:
“In any event, I want my position, and the position of Mr. Weekes, to be perfectly clear. I am not going to permit Mr. Weekes to sign any document, or endorse any draft, which might be construed as anything other than a special release of the Allstate subrogation claim. While I believe that it would be incredible for Jack or his company to take the position that something more than that has to be signed in order to resolve Allstate’s claim, and while I am convinced that Allstate’s property damage claim is a perfectly valid one, I am afraid that you and Jack will have to work the matter out the best way you can without imposing on Mr. Weekes and his Federal Court action. Mr. Weekes will, as he has in the past, cooperate with Allstate in every way short of prejudicing his far more substantial personal injury claim.”
A few days later he authorized Weekes to endorse and cash the draft. It was payable to Weekes and his attorney in the car damage case.
. Jenkins v. Skelton, 1920, 21 Ariz. 663, 192 P. 249. See also Daniel v. City of Tucson, 1938, 52 Ariz. 142, 79 P.2d 516, 117 A.L.R. 1211; State v. Airesearch Mfg. Co., Inc., 1949, 68 Ariz. 342, 206 P.2d 562; Malta v. Phoenix Title & Trust Co., 1953, 76 Ariz. 116, 259 P.2d 554.
. Jenkins v. Skelton, supra, n. 2; see generally Annot. 62 A.L.R.2d 977.
. See Suttle v. Seely, 1963, 94 Ariz. 161, 382 P.2d 570; Day v. Estate of Wiswall, 1963, 93 Ariz. 400, 381 P.2d 217. These are not accident cases, but they do apply the principle. See also Annot. 62 A.L.R.2d 988.
. Day v. Estate of Wiswall, supra, n. 4.
. Suttle v. Seely, supra, n. 4; Cochise Hotels, Inc. v. Douglas Hotel Operating Co., 1957, 83 Ariz. 40, 316 P.2d 290; DeGraff v. Smith, 1945, 62 Ariz. 261, 157 P.2d 342; Roden v. Roden, 1926, 29 Ariz. 549, 243 P. 413.
. A consent judgment is as much an adjudication on the merits as one following a trial. Suttle v. Seely, supra, n. 4, Wall v. Superior Court, 1939, 53 Ariz. 344, 89 P.2d 624.
. In form, this is correct. In substance, it is not; the dismissal in the car damage case was given in consideration of payment by the defendant to the plaintiff of the full amount prayed for in the complaint.
. Day v. Estate of Wiswall, supra, n. 4; DeGraff v. Smith, supra, n. 6; Suttle v. Seely, supra, n. 4; Cochise Hotels, Inc. v. Douglas Hotel Operating Co., supra, n. 6.
. It is asserted that Weekes had an interest in the car damage case to the extent of $100, the amount of the “deductible” under the Allstate policy. In plain English, appellants assert that Weekes bargained away a substantial cause of action for personal injuries for this dollop of pottage.
. See, as to the “subrogation case route”, Annot., 62 A.L.R.2d 977, 989 ff, as to the “consent route” Restatement, Judgments, § 62.
. Levitt v. Simco Sales Service of Pa., 1957, Del.Super.Ct., 11 Terry 552, 135 A.2d 910; Mims v. Reid, 1957, Fla., 98 So.2d 498; Sibson v. Robert’s Express, Inc., 1962, 104 N.H. 192, 182 A.2d 449; Farmers Ins. Exch. v. Arlt, 1953, N.D., 61 N.W.2d 429; Aubill v. Rowles, 1961, Ohio Com.Pl., 180 N.E.2d 643, 87 Ohio Law Abst. 353; Saber v. Supplee-Wills-Jones Milk Co., 1956, 181 Pa.Super. 167, 124 A.2d 620; Sprague v. Adams, 1926, 139 Wash. 510, 247 P. 960, 47 A.L.R. 529; cf. Kidd v. Hillman, 1936, 14 Cal.App.2d 507, 58 P.2d 662; Coniglio v. Wyoming Valley Fire Ins. Co., 1953, 337 Mich. 38, 59 N.W.2d 74; Hayward v. State Farm Mut. Ins. Co., 1942, 212 Minn. 500, 4 N.W.2d 316, 140 A.L.R. 1236; Rush v. City of Maple Heights, 1958, 167 Ohio St. 221, 147 N.E.2d 599; Shaw v. Chell, 1964, 176 Ohio St. 375, 199 N.E.2d 869.
. Rosenthal v. Scott, 1961, Fla., 150 So.2d 433, 1963, 150 So.2d 436; Travelers Indem. Co. v. Moore, 1947, 304 Ky. 456, 201 S.W.2d 7; Underwriters at Lloyd’s Ins. Co. v. Vicksburg Traction Co., 1913, 106 Miss. 244, 63 So. 455; General Exch. Ins. Corp. v. Young, 1948, 357 Mo. 1099, 212 S.W.2d 396; Teper v. Rackman, 1942, 264 App.Div. 981, 37 N.Y.S.2d 203; Underwood v. Dooley, 1929, 197 N.C. 100, 147 S.E. 686; Hoosier Gas Co. v. Davis, 1961, 172 Ohio St. 5, 173 N.E.2d 349; Vasu v. Kohlers, 1945, 145 Ohio St. 321, 61 N.E.2d 707, 166 A.L.R. 855; LeBlond Schacht Truck Co. v. Farm Bureau Mut. Automobile Ins. Co., 1929, 34 Ohio App. 478, 171 N.E. 414.
. See Malta v. Phoenix Title & Trust Co., 1953, 76 Ariz. 116, 119, 259 P.2d 554, 557; Georgia Ry. & Power Co. v. Endsley, 1928, 167 Ga. 439, 145 S.E. 851, 854; Shaw v. Chell, 176 Ohio St. 375, 199 N.E.2d 869, 873.
. Cf. Bryan v. Southern Pac. Co., 1955, 79 Ariz. 253, 286 P.2d 761, 50 A.L.R.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PHILLIPS, Chief Judge.
Jessen was charged by information with the violation of 50 U.S.C.A.Appendix, § 462(a) in that he refused to submit himself to induction into the armed forces of the United States. He was convicted and sentenced and has appealed.
Jessen was born on June 26, 1929. He registered with Local Board No. 1, Denver, Colorado. He returned his questionnaire, in which he stated that he had attended elementary school, junior high school, and had graduated from high school and that he was then a full time student at the University of Natural Healing Arts in Denver, Colorado. He signed Series XIV of the questionnaire, certifying that by reason of religious training and belief he was conscientiously opposed to participation in war in any form. The Local Board mailed him Conscientious Objector Form No. 33R-115. He signed Series 1(B) of the form, in which he certified that by reason of his religious training and belief he was conscientiously opposed to participation in war in any form and was conscientiously opposed to participation in noncombatant training or service in the armed forces. In such form he stated that he believed in a Supreme Being; that his obligations to God were superior to any obligation arising from any human relation; that Jehovah is the Supreme Being; that when there is a conflict between the law of a nation and the law of God, the latter is supreme and a Christian must obey it; and that the commandment “Thou shalt not kill” required him to remain strictly neutral in worldly altercations. Jessen further stated in such form that he obtained his religious training and beliefs from his parents, who had brought him up as a Jehovah’s Witness; that he had studied the Bible and Watchtower Bible and Tract Society publications; that he believed in the use of force only for the purpose of self-defense; that his parents were Jehovah’s Witnesses; and that he had been a member of that sect since childhood. He gave the name and address of his church, the name of his minister, the name and address of the person on whom he most relied for religious guidance, and a number of persons as references. He also made a lengthy statement with respect to the attitude of Jehovah’s Witnesses toward participation in war. He indicated his belief that the theocratic wars described in the Old Testament were justified because they were entered into at the command of God; and stated that Jehovah’s Witnesses were not pacifists and that they believed in participation in war at the command of Jehovah, but were opposed to all other wars. He also referred to the war prophesied in Revelations, Ch. 19, commonly known as Armageddon, and indicated that it would be a war commanded by God.
The Local Board classified him as 1-A and notified him of such classification on February 28, 1949. On December 30, 1949, he was placed by the Local Board in Class I-A-O. He was ordered to report for a pre-induction physical examination and was notified of his physical acceptability.
On January 23, 1951, the Local Board ordered him to report for induction on February 5, 1951. On February 5, 1951. the State Director wrote a letter to the Local Board suggesting that the induction be postponed. The Local Board postponed the induction on February 5, 1951, and on that date notified Jessen of such postponement. On March 9, 1951, Jessen filed four affidavits from residents of Denver, which averred facts supporting Jessen’s claim as a conscientious objector. Induction was again postponed to June 15, 1951.
On September 14, 1951, the State Director ordered the Local Board to reopen Jessen’s classification and to cancel an outstanding induction order.
On October 25, 1951, the Local Board reclassified Jessen as Class 1-A-O. On October 26, 1951, the Local Board ordered Jessen to report immediately for induction. On October 31, 1951, Jessen wrote a letter to the Local Board, the material portions of which read as follows:
“I have recently received a reclassification of l-A-0 which I wish to appeal. * * *
“Should there be any questions regarding my work or objections, I would appreciate a personal interview to clarify the situation.”
The Local Board did not grant a personal appearance and sent the file to the Appeal Board and ordered Jessen to take a pre-induction physical examination. On November 9,1951, Jessen was notified of his physical acceptability.
On December 6, 1951, the Appeal Board made a preliminary determination that Jessen should not be classified either as l-A-0 or 1-0.
In accordance with the regulations, the matter was then referred to the Department of Justice for appropriate inquiry and hearing on his claim as a conscientious objector and the file was sent to the Department of Justice. An investigation was made by the Federal Bureau of Investigation and its report, together with the file, was referred to the Hearing Officer of the Department of Justice. On December 18, 1952, Jessen was notified to appear before the Hearing Officer. Jessen appeared. The Hearing Officer made a report in which he reviewed the history of the case with the Local Board and stated:
“After reading the file carefully, and having talked to registrant and considered the additional evidence offered by the registrant, it is my conclusion that the registrant is sincere, and that he is now and has for many years past been a conscientious objector. After considering all of the facts, it is my conclusion that the registrant should be classified 1-0. * * *
“I think it would have been more difficult for the court to find the act of the Board was without any basis in fact if the Board has classified this man as 1-A rather than 1-A-O. They accepted the defendant’s professions of sincere and conscientious objections on the religious grounds as being truthful, but they attempted, and in my opinion without any basis in fact, to assert that while he was sincere and conscientious, that sincerity and conscientiousness extended only to his active aggressive participation in military service and that he was not sincere in his statements that he was opposed to war and participation in war in all its forms.”
The Department of Justice, acting through an Assistant Attorney General, T. Oscar Smith, wrote a letter to the State Board, recommending that the claim of Jessen for classification as a conscientious objector be denied. The Assistant Attorney General stated that Jessen believed in the use of force for the protection of other Jehovah’s Witnesses, justified some of the wars of the Old Testament, and stated that he believed in participation in war at the command of Jehovah. The Assistant Attorney General further stated that Jes-sen was a Jehovah’s Witness and was a sincere believer in its tenets, but that the teachings of the sect and the beliefs expressed by the registrant did not include opposition to participation in war in any form.
The Appeal Board, on March 5, 1953, classified Jessen in Class 1-A. It returned the file to the Local Board on March 10, 1953. The Local Board notified Jessen of the 1-A classification by the Appeal Board. Following a physical examination and a notification of acceptability, the Local Board mailed a notice to Jessen to report for induction on May 25, 1953. Jessen reported, but refused to submit to induction.
To be entitled to classification in 1-0 under § 6(j) of the Universal Military Training and Service Act, 62 Stat. 604, 612, 50 U.S.C.A.Appendix, § 456(j), the registrant must, “by reason of religious training and belief,” be conscientiously “opposed to participation in war in any form.”
We disagree with the construction placed on the last quoted phrase by the Assistant Attorney General.
A registrant’s belief in the use of force in self-defense is not inconsistent with a conscientious opposition to participation in war in any form.
We are of the opinion that Congress, in using the phrase “war in any form”, did not intend to embrace therein theocratic wars. Rather, we think, Congress had in mind secular wars between nations, made and directed by man. This conclusion is supported by the adjudicated cases.
The remaining question is whether there was any basis in fact for the classification made by the State Appeal Board.
In Dickinson v. United States, 346 U. S. 389, 396, 397, 74 S.Ct. 152, 157, the court said:
“The court below in affirming the conviction apparently thought the local board was free to disbelieve Dickinson’s testimonial and documentary evidence even in the absence of any impeaching or contradictory evidence. * * * However, Dickinson’s claims were not disputed by any evidence presented to the selective service authorities, nor was any cited by the Court of Appeals. The task of the courts in cases such as this is to search the record for some affirmative evidence to support the local board’s overt or implicit finding that a registrant has not painted a complete or accurate picture of his activities. We have found none here.
“Local boards are not courts of law and are not bound by traditional rules of evidence; they are given great leeway in hearing and considering a variety of material as evidence. If the facts are disputed the board bears the ultimate responsibility for resolving the conflict — the courts will not interfere. Nor will the courts apply a test of ‘substantial evidence.’ However, the courts may properly insist that there be some proof that is incompatible with the registrant’s proof of exemption. The local board may question a registrant under oath, subpoena witnesses to testify, and require both registrant and witnesses to produce documents. 32 C.F.R. § 1621.15. The board is authorized to obtain information from local, state, and national welfáre and governmental agencies. 32 C.F.R. § 1621.14. The registrant’s admissions, testimony of other witnesses, frequently unsolicited evidence from a registrant’s neighbors, or information obtained from other agencies may produce dissidence which the boards are free to resolve. Absent such admissions or other evidence, the local boards' may call on the investigative agencies of the federal government, as they would if a registrant were suspected of perjury. But when the uncontroverted evidence supporting a registrant’s claim places him prima facie within the statutory exemption, dismissal of the claim solely on the basis of suspicion and' speculation is both contrary to the spirit of the Act and foreign to our concepts of justice.”
Here, the uncontroverted evidence supported the registrant’s claim that he was opposed to participation in war in any form. There was a complete' absence of any impeaching or contradictory evidence. It follows that the' classification made by the State Appeal Board was a nullity and that Jessen violated no law in refusing to submit to induction.
Reversed and remanded, with instructions to dismiss the information.
. Annett v. United States, 10 Cir., 205 F.2d 689, 691; United States v. Pekarski, 2 Cir., 207 F.2d 930, 931; Taffs v. United States, 8 Cir., 208 F.2d 329, 331, certiorari denied 347 U.S. 928, 74 S.Ct. 532; United States v. Hartman, 2 Cir., 209 F.2d 366, 370.
. Taffs v. United States, 8 Cir., 208 F.2d 329, 331, certiorari denied 347 U.S. 928, 74 S.Ct. 532; United States v. Hartman, 2 Cir., 209 F.2d 366, 370.
. Estep v. United States, 327 U.S. 114, 122, 66 S.Ct. 423, 90 L.Ed. 567.
. United States v. Hartman, 2 Cir., 209 F.2d 366, 370; Taffs v. United States, 8 Cir., 208 F.2d 329, 331, certiorari denied 347 U.S. 928, 74 S.Ct. 532; Weaver v. United States, 8 Cir., 210 F.2d 815, 822; Pine v. United States, 4 Cir., 212 F.2d 93; Annett v. United States, 10 Cir., 205 F.2d 689, 690, 691.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
McMILLIAN, Circuit Judge.
Performance Products, Inc. (Performance) appeals from a final judgment entered in the District Court for the Eastern District of Missouri condemning as adulterated and seizing certain quantities of an animal drug called Equidantin and other materials used in its manufacture. For reversal Performance argues that Equidantin is not a “new animal drug” within the meaning of 21 U.S.C.’ § 321(w), and thus not subject to premarketing clearance by the Food and Drug Administration (FDA) under 21 U.S.C. § 360b(b), because (1) Equidantin is generally recognized as safe and effective and (2) Equidantin is a generic drug or copy of Dantafur, a drug that has been approved by the FDA. For the reasons discussed below, we affirm the judgment of the district court.
Performance is the manufacturer of Equidantin. Equidantin has been on the market since 1970 and is intended for use in the treatment of equine tracheopharyngitis (“race track cough”) and equine urinary tract bacterial infections. The active ingredient in Equidantin is nitrofurantoin, which is also the active ingredient in Dantafur, an FDA-approved drug manufactured and marketed by Norwich-Eaton Pharmaceuticals. Equidantin and Dantafur contain the same amount of nitrofurantoin per dosage unit. However, the inactive ingredients in the two drugs are different. Dantafur contains alcohol among other inactive ingredients. According to the government’s evidence, Equidantin contains the following inactive ingredients: xantham gum (a suspending agent), magnesium aluminum silicate (a suspending agent), potassium sórbate (a preservative), propylene glycol, citric acid (a buffer), anethole (a flavoring agent), sodium saccharin (a flavoring agent), vanillin, and deionized water.
Equidantin is a generic drug or copy (a “me-too” version) of Dantafur, the FDA-approved “brand name” or pioneer drug. A generic drug contains the same active ingredient or “incipient” as an FDA-approved pioneer drug but may contain different inactive ingredients or “excipients.” The manufacturing techniques used by each manufacturer may also differ. It is not disputed that differences in the manufacturing process and variations in the inactive ingredients may affect a drug’s “bioavailability.” Bioavailability is “the rate and extent to which the active drug ingredient or therapeutic moiety is absorbed from a drug product and becomes available at the site of drug action.” 21 C.F.R. § 320.1(a) (1981).
If there is no significant difference between the rate and extent of absorption of two drugs administered at the same molar dose of therapeutic moiety under similar experimental conditions, the drugs are said to be bioequivalent. See 21 C.F.R. § 320.1(e) (1980). When two different drug products are to be used interchangeably in the treatment of illness, it can be critical that the drug products are bioequivalent — that is, that there be no significant difference in the products’ bioavailability. A drug that is less bioavailable than that for which it is substituted will deliver less of its active ingredient than expected; a drug that is more bioavailable than that which it replaces presents the danger of overdosage.
United States v. Premo Pharmaceutical Laboratories, Inc., 511 F.Supp. 958, 962-63 (D.N.J.1981) (Premo II) (footnote omitted) (excellent discussion of factors which may affect bioavailability); see United States v. Generix Drug Corp., 654 F.2d 1114 (5th Cir. 1981) (Generix), cert. granted, - U.S. -, 102 S.Ct. 1610, 71 L.Ed.2d 847 (1982); Premo Pharmaceutical Laboratories, Inc. v. United States, 629 F.2d 795 (2d Cir. 1980) (Premo I); United States v. Articles of Drug (Lannett Co.), 585 F.2d 575 (3d Cir. 1978) (Lannett); see also Pharmadyne Laboratories, Inc. v. Kennedy, 466 F.Supp. 100, 103 (D.N.J.) (Pharmadyne), aff’d on other grounds, 596 F.2d 568 (3d Cir. 1979).
The government’s basic position in the present case, and in the above cited cases, all of which involve generic drugs, is that because many factors, particularly the manufacturing process and choice of inactive ingredients, may affect a generic drug’s bioavailability and thus its bioequivalence to its pioneer drug, the generic drug is a “new drug” (or “new animal drug”) and thus subject to premarketing clearance by the FDA, even though the pioneer drug has already been approved by the FDA. Not surprisingly, the manufacturers of generic drugs oppose the FDA’s position. Basically the position of the manufacturers is that because the generic drug contains the same active ingredient as the FDA-approved pioneer drug, the generic drug is not a “new drug” (or “new animal drug”) and thus not subject to' FDA premarketing clearance. The manufacturers argue that bioavailability and bioequivalence are not relevant to the question of “new drug” (or “new animal drug”) status. Two circuit courts have addressed this issue; the Second Circuit has essentially agreed with the government’s position, see Premo I, 629 F.2d 795; the Fifth Circuit has essentially agreed with the manufacturers’ position, see Generix, 654 F.2d 1114.
The present action began in July 1979 when the government filed a complaint in district court seeking condemnation and seizure of undetermined quantities of Equidantin and materials used in its manufacture. The government argued that Equidantin was an adulterated drug within the meaning of 21 U.S.C. § 351(a)(5) and as such subject to seizure under 21 U.S.C. § 334(a)(1). The government’s characterization of Equidantin as an adulterated drug depended upon Equidantin’s status as a “new animal drug” within the meaning of 21 U.S.C. § 321(w). Because a new animal drug cannot be marketed without an FDA-approved “new animal drug application” or an abbreviated new animal drug application, 21 U.S.C. § 360b(b), and it was not disputed that there was no FDA-approved new animal drug application on file for Equidantin, the government argued that Equidantin was “unsafe” under 21 U.S.C. § 360b(a)(A) and therefore “adulterated” under 21 U.S.C. § 351(a)(5). The district court issued the warrant and the United States Marshal seized approximately 86 quarts of Equidantin, approximately 410 gallons of in-process drug product, 3.4 kilograms of bulk nitrofurantoin powder, and labels and accompanying materials.
Performance intervened in the condemnation action and filed a claim to the seized items. Performance did not dispute that FDA approval is the prerequisite to marketing a new animal drug, but argued that Equidantin is not a new animal drug within the meaning of 21 U.S.C. § 321(w) because it is generally recognized as safe and effective and because it is a generic or copy of Dantafur, the FDA-approved pioneer drug.
Following a bench trial in which both sides presented expert testimony, the district court found that Equidantin was a new animal drug within the meaning of 21 U.S.C. § 321(w) because it was not generally recognized among qualified experts as safe and effective. United States v. Undetermmed Quantities of Various Articles of Drug (Equidantin Nitrofurantoin Suspension), No. 79-0913-C(C) (E.D.Mo. May 29, 1981) (slip op. at 5-6). The district court also found that FDA approval of Dantafur did not constitute general recognition among qualified experts that either Dantafur or Equidantin was safe and effective within the meaning of 21 U.S.C. § 321(w) and, further, that even if Dantafur was generally recognized among qualified experts as safe and effective, Equidantin would not be exempt from FDA premarketing clearance as a new animal drug because the two drugs’ inactive ingredients and manufacturing processes differed. Id. at 5. The district court then ordered the seized items destroyed, but later stayed that order pending appeal.
The issue in this case is thus whether Equidantin is a “new animal drug” within the meaning of 21 U.S.C. § 321(w). The scope of FDA regulation depends upon the statutory definitions. A brief outline of the history of FDA regulation will provide a background and perspective to our discussion. See Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 93 S.Ct. 2469, 37 L.Ed.2d 207 (1973); USV Pharmaceutical Corp. v. Weinberger, 412 U.S. 655, 93 S.Ct. 2498, 37 L.Ed.2d 244 (1973); see generally Note, Drug Efficacy and the 1962 Drug Amendments, 60 Geo.L.J. 185 (1971). It should also be noted that the analysis followed in the cases is the same for human and animal drugs. United States v. Naremco, Inc., 553 F.2d 1138, 1142 n.5 (8th Cir. 1977), citing United States v. Articles of Food and Drug (Coli-Trol 80 Medicated), 372 F.Supp. 915, 921 (N.D.Ga.1974), aff’d, 518 F.2d 743 (5th Cir. 1975).
The Food and Drug Act of 1906, ch. 3915, 34 Stat. 768, was the first legislation of national scope directed at the regulation of drug products. The Act set standards of purity for drugs sold in the United States and required accurate labeling of the drugs’ contents. Id. §§ 1, 2, 7. The Act also made unlawful the marketing of adulterated or misbranded drugs and provided for removal of such drugs from the market through libel actions. Id. § 2. There were, however, no provisions regulating false claims of efficacy until the Food and Drug Act of 1906 was amended in 1912 to declare misbranded drugs that were not effective for use under the conditions for which they were recommended.
The greatest defect in the Act, however, was its failure to provide any mechanism for premarketing agency clearance. It was impossible to prevent an unsafe or ineffective drug from reaching the market. In 1938 the “wonder drug” “Elixir of Sulfanilamide,” a solution based on diethylene gylcol and ... a presumed harmless, inert solvent ingredient, went on the market. Apparently, no tests for toxicity were performed prior to marketing; and almost one hundred people died before the drug could be withdrawn.
This Sulfanilamide tragedy led to the Federal Food, Drug, and Cosmetic Act of 1938, 21 U.S.C. §§ 301-392 (1976 & Supp. I 1977) (amended 1962), with provisions for premarketing review of new drugs. This review, however, was directed solely to assuring drug-product safety. It was not until the Act was amended in 1962 that the definition of “new drug” was enlarged to include drugs not generally recognized as safe and effective.
The 1962 amendments changed the data-reporting requirements of the “new drug” procedure to require submission of data showing efficacy and, in place of automatic approval of [new drug applications] not disapproved, the procedure under the 1938 Act, the 1962 amendments required positive agency approval to make [a new drug application] effective.
Premo II, 511 F.Supp. at 962 (footnote omitted).
The new effectiveness requirement of the 1962 legislation was made retroactive to all drugs which had been the subject of new drug applications under the 1938 statute. Thus, it applied to all drugs which previously had secured FDA premarketing approvals . . .
The FDA, recognizing that a transitional period would be necessary to review all drug products affected by the 1962 amendments, granted a two-year grace period before revoking any [new drug applications] given under the 1938 Act. This period of time was to be used to assess the evidence of “effectiveness” of approved drug products. Two years proved to be insufficient time to permit the FDA to evaluate the status of all drugs potentially made “new drugs” by the 1962 amendments. Therefore, in order to expedite the task of evaluation, the FDA arranged with the National Academy of Sciences — National Research Council (“NAS-NRC”) to have them review all qualities of the potential “new drugs.”
NAS-NRC undertook a study of some 4,000 drug formulations for the express purpose of assessing the efficiency of the product. This study, known as the Drug Efficacy Study, was submitted to the FDA for evaluation; the FDA retained authority to accept or reject the findings of NAS-NRC. As a result of the NAS-NRC findings, the FDA set forth in the Federal Register its conclusions and assessment (“Drug Efficacy Study Implementation” or “DESI” Notices) of whether a drug could be considered “effective” for use as required by the 1962 amendments to the [1938] Drug Act.
Lannett, 585 F.2d at 577-78; see also Note, 60 Geo.L.J. at 207-14.
As noted earlier, the regulatory scheme for human and animal drugs is basically the same. In 1968 the animal drug provisions were placed in a separate section of the Food, Drug, and Cosmetic Act, 21 U.S.C. § 360b. Animal Drug Amendments of 1968, Pub.L. No. 90-399, 82 Stat. 343 (1968). The definition of “new animal drug” in 21 U.S.C. § 321(w) and the requirement of premarketing clearance by the FDA of new animal drugs under 21 U.S.C. § 360b(b) are essentially the same as the “new drug” definition in 21 U.S.C. § 321(p) and the premarketing clearance provision in 21 U.S.C. § 355(b), (d).
Under § 505 of the Act, 21 U.S.C. § 355, no person may market a new drug unless he files with the FDA a new drug application (NDA) demonstrating that the drug is both safe and effective for which it is intended and obtains FDA approval. Normally the applicant furnishes controlled chemical tests and investigations showing that the product is safe and effective, 21 U.S.C. § 355(d). But where the drug product is claimed to be a copy [or generic version] of one already approved by the FDA on the basis of such submissions — sometimes called a “me-too” drug — the applicant may file with the FDA an “abbreviated new drug application” (ANDA), which relies upon the safety and effectiveness tests conducted with respect to the FDA-approved drug (sometimes called the “pioneer drug”). The FDA will only approve an ANDA, however, where the “me-too” drug product is shown to be the therapeutic equivalent of the pioneer and safe and effective in accordance with 21 U.S.C. § 355(d).
Premo I, 629 F.2d at 798-99; see also Hoffmann-LaRoche, Inc. v. Weinberger, 425 F.Supp. 890 (D.D.C.1975). But cf. Generis, 654 F.2d at 1117 n.4 (criticizing Hoffmann-LaRoche). As with human drugs, manufacturers of generic animal drugs may rely upon the safety and effectiveness data developed for the pioneer drug and file abbreviated new animal drug applications supported by bioavailability studies.
For reversal Performance argues that the government failed to establish that Equidantin is a new animal drug within the meaning of 21 U.S.C. § 321(w). Performance attacks the credibility of the government expert witnesses on the grounds that they lacked qualifications, had no personal clinical experience with nitrofurantoin suspensions, and did not know that Dantafur had been found “effective” by the NAS-NRC in the Drug Efficacy Study. Dantafur was reviewed by NAS-NRC in the Drug Efficacy Study and was found “probably effective” for the treatment of race track cough and equine urinary infections. 35 Fed.Reg. 12792 (1970). In 1977 a supplemental new animal drug application was approved by the FDA finding Dantafur “effective” for the treatment of race track cough and equine urinary infections. See 42 Fed.Reg. 19143 (1977), codified in 21 C.F.R. § 520.1560a (1981). There is no approved new animal drug application, abbreviated new animal drug application or exemption for investigational use on file for Equidantin.
Title 21 U.S.C. § 321(w) defines “new animal drug” as any drug intended for use for animals other than man .. .—
(1) the composition of which is such that such drug is not generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of animal drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in the labeling thereof; ... or
(2) the composition of which is such that such drug, as a result of investigations to determine its safety and effectiveness for use under such conditions, has become so recognized but which has not, otherwise than in such investigations, been used to a material extent or for a material time under such conditions. . . .
Unless an animal drug is generally recognized among qualified experts as safe and effective for its intended uses and has been used to a material extent or for a material time, the drug is a new animal drug and subject to FDA premarketing clearance. See Premo I, 629 F.2d at 801-02.
Congress’ exclusion of “generally recognized” drug products from the definition of a “new drug” is a very narrow one, which is not intended to permit a pharmaceutical manufacturer to substitute its opinion regarding the safety or effectiveness of a drug for that of the FDA, the publicly recognized repository of expertise in such matters, or to require the court to develop its own body of scientific knowledge in substitution for that of the FDA.
Id. at 802.
Thus, while a district court certainly is empowered to adjudicate the “new drug” status of a given drug product, inquiry is limited to the question of “general recognition.” A district court is not empowered to evaluate the actual safety and effectiveness of a drug product. That determination is committed to the FDA due to its superior access to technical expertise.
United States v. Articles of Drug (Hormonin), 498 F.Supp. 424, 431 (D.N.J.1980) (citations omitted); see also Weinberger v. Bentex Pharmaceuticals, Inc., 412 U.S. 645, 653-54, 93 S.Ct. 2488, 2494, 37 L.Ed.2d 235 (1973); AMP, Inc. v. Gardner, 389 F.2d 825, 831 (2d Cir.), cert. denied, 393 U.S. 825, 89 S.Ct. 86, 21 L.Ed.2d 95 (1968). Cf. United States v. Alcon Laboratories, 636 F.2d 876, 888 (1st Cir. 1980) (“Jurisdiction over the new drug issue is shared by the FDA . . . and the federal district courts. ... [Deference to an agency’s primary jurisdiction makes little sense in the context of an enforcement proceeding initiated by the agency.”), cert. denied, 451 U.S. 1017, 101 S.Ct. 3005, 69 L.Ed.2d 388 (1981); accord, Premo I, 629 F.2d at 801.
. Thus, “the purpose of the normal inquiry [into whether a drug is generally recognized among qualified experts as safe and effective for its intended uses] is not to determine safety and effectiveness at all, but to ascertain the drug’s general reputation in the scientific community for such characteristics.” United States v. Articles of Food and Drug (Coli-Trol 80 Medicated), 372 F.Supp. at 920; see Premo I, 629 F.2d at 803-04 (cases cited therein).
Either, a genuine dispute concerning the safety and effectiveness of a drug product or unawareness of the drug product among qualified experts precludes a finding of “general recognition” for purposes of 21 U.S.C. § 321(p) [for human drugs or § 321(w) for animal drugs]. Such an expert consensus as to “general recognition” must be founded upon “substantial evidence” as that term is defined in 21 U.S.C. § 355(d) [for human drugs and § 360b(d)(3) for animal drugs]. Thus, “general recognition” among experts must be based u]>on “ ‘adequate and well-controlled investigations,’ ” as well as publication in scientific literature. “Anecdotal evidence,” i.e., testimony of physicians unsupported by controlled investigation or scientific publication, does not constitute “substantial evidence.” The mere fact that a drug product has been marketed for an extended period does not preclude a finding of “new drug” status.
United States v. Articles of Drug (Hormonin), 498 F.Supp. at 431-32 (footnote and citations omitted); see Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. at 629, 630, 632, 93 S.Ct. at 2483, 2484; Premo I, 629 F.2d at 803-04; United States v. Article of Drug (Furestrol), 294 F.Supp. 1307, 1311 (N.D.Ga.1968), aff’d, 415 F.2d 390 (5th Cir. 1969).
The government’s expert witnesses, Dr. Gary Koritz and Dr. Nicholas Booth, were extremely well qualified; both are veterinarians and university professors, specialists in veterinary pharmacology, experienced in research and widely published. Both testified that nitrofurantoin in general and Equidantin in particular are not generally recognized among qualified experts as safe and effective to treat race track cough or equine urinary tract infections. Both were aware of the publication of the DESI Notice for Dantafur, but expressed reservations about the validity of the supporting scientific data, and disagreed with the evaluation of effectiveness in the DESI Notice on the merits. Both further testified that, as was admitted by Performance, no completed clinical studies on the safety- or efficacy of Equidantin have been published (apparently a bioavailability study is now in progress); that the limited published data available on the use of nitrofurantoin in horses did not involve Equidantin (the experts also questioned the scientific design of these studies); and that neither had any knowledge of Equidantin before preparing for the present case.
Another government expert witness, Dr. Marvin Meyer, a professor of pharmacy and specialist in biopharmaceutics (the study of factors that affect the absorption, metabolism, distribution, and excretion of drugs), testified at some length about bioavailability. Dr. Meyers testified that bioavailability was important in evaluating the efficacy of nearly all drug products, including suspensions; that differences or changes in bioavailability may affect a drug’s therapeutic value; and that many factors can affect bioavailability, including variations in product formulation, particularly the suspension medium and the crystal size of the active ingredient. See Premo II, 511 F.Supp. at 962-65.
Performance presented the testimony of two professors of pharmacy who testified that the inactive ingredients used in the manufacture of Equidantin are generally recognized as safe for use in pharmaceutical preparations. Another witness, a practicing veterinarian, testified that he prescribed Equidantin and had found it safe and effective. None of Performance’s witnesses, however, testified that either nitrofurantoin or Equidantin was generally recognized among qualified experts as safe and effective for its intended uses. The practicing veterinarian’s testimony was not supported by clinical studies or published data and was clearly anecdotal in character.
After reviewing the testimony under the standards set forth above, we can find no error in the district court’s finding that Equidantin is not generally recognized among qualified experts as safe and effective for its intended uses and therefore, in the absence of general recognition, a new animal drug within the meaning of 21 U.S.C. § 321(w). Not only were the government expert witnesses unaware of Equidantin before preparing to testify in the present case, there was at best a sharp difference of opinion among the experts; there was certainly no general consensus of expert opinion in favor of Equidantin. Nor was there any published scientific literature or well-controlled clinical investigations of Equidantin. See United States v. Articles of Drug (Hormonin), 498 F.Supp. at 431-32.
Performance next argues that Equidantin is not a new animal drug within the meaning of 21 U.S.C. § 321(w) because Equidantin is a generic version or copy of an FDA approved drug. Performance argues that because Dantafur has been approved by the FDA (in the DESI Notice) and because Dantafur and Equidantin contain the same active ingredient (nitrofurantoin) in the same concentration per dosage unit, Equidantin is not a new animal drug within the meaning of the statute. This argument is incorrect; FDA approval, that is, agency recognition of actual safety and effectiveness, must not be confused with general recognition in the scientific community of safety and effectiveness. As discussed earlier, only general recognition plus material use can exempt a drug from new drug status and FDA premarketing clearance. As noted by the Supreme Court in Weinberger v. Hynson, Westcott & Dunning, Inc., “the Act is designed so that drugs on the market ... will have mustered the requisite scientifically reliable evidence of effectiveness long before they are in a position to drop out of active regulation by ceasing to be a ‘new drug.’ ” 412 U.S. at 631, 93 S.Ct. at 2484; see also Premo I, 629 F.2d at 803-04. FDA approval is the threshold determination required before the manufacturer can market the drug; it does not exempt the drug from new drug status. Prior FDA approval of Dantafur means only that, if Performance should apply for FDA approval of Equidantin, Performance can rely on the safety and effectiveness data submitted for Dantafur because Dantafur and Equidantin contain the same active ingredient and need only add bioavailability studies to complete its application.
Moreover, the government in the present case showed that nitrofurantoin was not generally recognized among qualified experts as safe and effective. Therefore, even assuming for purposes of argument that the statutory definition of new drug refers only to the active ingredient, Equidantin would not be exempt from new drug status because its active ingredient, nitrofurantoin, is not generally recognized among qualified experts as safe and effective and is therefore a “new drug.” Compare Generix, 654 F.2d at 1115-20 (the term “new drug” as used in 21 U.S.C. § 321(p) applies only to the active ingredients of a drug product), with Premo I, 629 F.2d at 801 (a drug product is a “new drug” unless generally recognized among qualified experts as safe and effective); Premo II, 511 F.Supp. at 968-73; and Pharmadyne, 466 F.Supp. at 103-04. Because the government in the present case showed that neither the pioneer drug (Dantafur) nor the active ingredient (nitrofurantoin) was generally recognized among qualified experts as safe and effective, we need not address whether the term “drug” as used in 21 U.S.C. § 321(p), (w) refers only to the active ingredient in a drug product; if it does, whether general recognition of the pioneer drug will remove any generic copy from new drug status; or if it does not, whether general recognition of the pioneer drug will remove an exact generic copy (identical active and inactive ingredients and manufacturing processes) from new drug status.
Accordingly, the judgment of the district •éóurt is affirmed.
. The Honorable James H. Meredith, United States Senior District Judge for the Eastern District of Missouri.
. 21 U.S.C. § 351(a)(5) provides: “A drug . . . shall be deemed to be adulterated — . . . (5) if it is a new animal drug which is unsafe within the meaning of section 360b of this title .. . . ”
. 21 U.S.C. § 334(a)(1) provides in part:
Any article of ... drug ... that is adulterated ... when introduced into or while in interstate commerce or while held for sale (whether or not the first sale) after shipment in interstate commerce ... shall be liable to be proceeded against while in interstate commerce, or at any time thereafter, on libel of information and condemned in any district court of the United States . .. within the jurisdiction of which the article is found....
. 21 U.S.C. § 321(w) provides in part:
The term “new animal drug” means any drug intended for use for animals other than man,
(1) the composition of which is such that such drug is not generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of animal drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in the labeling thereof; ... or
(2) the composition of which is such that such drug, as a result of investigations to determine its safety and effectiveness for use under such conditions, has become so recognized but which has not, otherwise than in such investigations, been used to a material extent or for a material time under such conditions....
. 21 U.S.C. § 360b(b) provides in part: “Any person may file with the Secretary an applies-. tion with respect to any intended use or uses of a new animal drug.” The section further describes the contents of a new animal drug application (reports of investigations, listing of components, statement of composition, description of methods and facilities and controls used in manufacture, processing and packing, samples of the new animal drug, samples of labeling, etc.).
. 21 U.S.C. § 360b(a)(l)(A) provides: “A new animal drug shall, with respect to any particular use or intended use of such drug, be deemed unsafe for the purposes of section 351(a)(5) ... of this title unless — (A) there is in effect an approval of an application filed pursuant to subsection (b) of this section with respect to such use or intended use of such drug. ... ”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
J. SKELLY WRIGHT, Circuit Judge:
These cases raise issues under Rule 36 of the Federal Rules of Civil Procedure that have not previously been addressed by this court.
Appellant Martha Jean Rainbolt, the beneficiary of two trusts, brought suit against appellees Rodger Allyn Johnson, the trustee, and Phyllis Lorraine Johnson, the trustee’s wife, alleging breach of trust and conspiracy between the two co-defendants to use the trust funds for their own benefit. The District Court referred the matter to an Auditor-Master. During pretrial proceedings appellant served a number of requests for admissions on both appellees. Appendix (App.) 36-37. Appellees did not respond to these requests within 30 days or at any subsequent time prior to the trial. After completion of the trial, appellee Phyllis Lorraine Johnson moved to withdraw the admissions; the District Court denied the motion. App. 110. Subsequently the Auditor-Master rendered a report to the District Court containing proposed findings of fact, conclusions of law, and recommendations. App. 113-129. In an order issued on January 13, 1981 the District Court confirmed the Master’s report and entered judgment in favor of appellant in the amount of $175,391.68. App. 153-154. Appellant seeks reversal of the District Court’s judgment on the ground that the court failed to give binding effect to the admissions. Cross-appellant Phyllis Johnson appeals the District Court’s denial of her motion to withdraw the admissions. We vacate the judgment and remand to the District Court for disposition in accordance with this opinion.
The District Court erred in failing to give binding and conclusive effect to the unanswered requests for admissions. Rule 36 of the Federal Rules of Civil Procedure, as revised in 1970, expressly provides that requests for admissions are automatically deemed admitted if not answered within 30 days, and that the matters therein are “conclusively established” unless the court on motion permits withdrawal or amendment of the admissions. The rule is designed to expedite litigation, and it permits the party securing admissions to rely on their binding effect. See Advisory Committee Notes, Proposed Amendments to the Federal Rules of Civil Procedure, 48 F.R.D. 487, 534 (1970) (Rule 36); see, e.g., Luick v. Graybar Electric Co., 473 F.2d 1360, 1362 (8th Cir. 1973); Jackson v. Riley Stoker Corp., 57 F.R.D. 120, 121 (E.D.Pa.1972).
In this case the defendants did not respond to the plaintiff’s requests for admissions within the 30-day period, nor did they respond to any of plaintiff’s other requests for discovery, and plaintiff relied on the deemed admissions. Defendant Phyllis Johnson did not move to withdraw the admissions until after completion of the hearing before the Auditor-Master. At that point, because plaintiff would have been seriously prejudiced by withdrawal of the admissions, the District Court properly denied the motion.
None of the post-1970 cases cited by defendant/cross-appellant Phyllis Johnson support withdrawal of deemed admissions after the conclusion of the trial. See Warren v. Internat’l Brotherhood of Teamsters, 544 F.2d 334, 338-340 (8th Cir. 1976) (motion during trial granted; finding that party securing admissions was not thereby prejudiced); Westmoreland v. Triumph Motorcycle Corp., 71 F.R.D. 192 (D.Conn.1976) (pretrial motion granted; testimony on issue would be available at trial). See also Scarlett v. Seaboard Coast Line R. Co., 23 F.R.Serv.2d 596 (S.D.Ga.1976) (pretrial motion granted; no prejudicial reliance by party securing admissions); Weva Oil Corp. v. Belco Petroleum Corp., 68 F.R.D. 663, 666-667 (N.D.W.Va.1975) (motion at oral argument on summary judgment motion denied; withdrawal would impose heavy burdens on party securing admissions). According to a leading commentator, “Obviously the party should not wait until trial to seek relief from an admission.” 4A J. Moore, Federal Practice ¶ 36.08 at 36-79 n.9 (1981).
In this case, despite the District Court’s order denying the motion to withdraw, the Auditor-Master did not treat the admissions as “conclusively established.” Instead, the Auditor-Master accepted some of the admitted facts and rejected others in the light of all of the evidence. See App. 92. The Master did not give binding effect to Admissions 9, 12, 13, and 22, see App. 36-37, which together established that defendants received in excess of $900,000.00 from the trust account and from the profits of businesses and real estate acquired by misappropriating trust assets. Instead, the Master recommended that plaintiff be awarded judgment in the amount of $175,391.68, a figure reached by calculating the hypothetical value of the original trust corpus plus appreciation, dividends, and interest, and then adding the total amount of unexplained deposits into the trust bank account. The District Court affirmed the Master’s recommendation. App. 153-154.
We reverse with instructions to the District Court to enter partial summary judgment for plaintiff-appellant in the amount of $900,000.00. We vacate the District Court’s previous judgment for plaintiff in the amount of $175,391.68 and remand for determination of the extent to which this amount duplicates the relief ordered by this court. Except to the extent that the previous judgment represents funds found by the court to have been obtained from the two businesses, the award should be reinstated by the District Court. In addition, the District Court is instructed to appoint a new trustee, and also a new Auditor-Master, who shall conduct a full accounting of the profits and gains from Collins Electronics, Inc., Planners Engineering Corporation, and all other assets acquired in whole or in part by investing trust funds. Under established principles of trust law, if the former trustee has not kept adequate accounts, the benefit of the doubt is to be given to the beneficiary. See G. Bogert, The Law of Trusts and Trustees § 962 (1962). Once the accounting is completed, the District Court shall provide such additional relief for plaintiff-appellant as may be appropriate. The beneficiary is entitled to place a constructive trust on property that can be traced directly or indirectly to the trust, or to obtain judgment against the trustee’s personal assets for profits or gains obtained through use of the trust’s assets.
In addition, we reverse the District Court’s denial of punitive damages and remand for reconsideration in light of all the evidence. Punitive damages are appropriate if the defendant acted with gross fraud, wantonness, maliciousness, or willful disregard of the plaintiff’s rights. Riggs Nat’l Bank v. Price, 359 A.2d 25, 28 (D.C. 1976). The Master found that the defendants had acted “maliciously, fraudulently and with willful disregard of the plaintiff’s rights.” App. 127. Although the findings of the trier of fact with regard to punitive damages are entitled to deference on appeal, such deference is grounded on the factfinder’s opportunity to assess credibility and intent. See Harris v. Wagshal, 343 A.2d 283, 288 (D.C.1975). In this case the District Court made no findings and gave no reasons for its denial of punitive damages. We therefore remand for reconsideration.
Judgment accordingly.
JUDGMENT
PER CURIAM.
These causes came on to be heard on tho record on appeal and cross-appeals from the United States District Court for the District of Columbia and were briefed and argued by counsel.
For the reasons stated in the opinion for the court filed this day,
It is ORDERED and ADJUDGED by this court that this case is remanded to the District Court with instructions to render a partial summary judgment for appellant Rainbolt in the amount of $900,000.00, and that the judgment of the District Court in favor of appellant Rainbolt in the amount of $175,391.68 is vacated and remanded for reconsideration.
It is FURTHER ORDERED and ADJUDGED by this court that the judgment of the District Court denying punitive damages to appellant Rainbolt is vacated and remanded for reconsideration.
It is FURTHER ORDERED and ADJUDGED by this court that the District Court shall appoint a new trustee for the two trusts, and shall appoint a new Auditor-Master, who shall conduct a full accounting of the trust assets and of the profits and gains obtained by defendants from the investment of trust assets in businesses, real estate, and other property.
It is FURTHER ORDERED and ADJUDGED by this court that the District Court shall take such measures to protect the corpus of the trusts, to impose a constructive trust on any traced property in the hands of the defendants and appropriate third parties, and to levy against the personal assets of the defendants, as may be necessary to protect the interests of appellant Rainbolt.
It is FURTHER ORDERED and ADJUDGED by this court that on remand the District Court and the new Auditor-Master shall give full effect to appellant Rainbolt’s requests for admissions, which were automatically deemed admitted because they were not answered within thirty days.
Upon completion of the accounting, the District Court will be able to determine whether the previous judgment of $175,391.68 duplicates the relief provided by the summary judgment award of $900,000.00 which is ordered by this court. Except to the extent that the previous judgment represents funds found by the District Court to have been derived from the profits of the two businesses, it should be reinstated by the District Court.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
BARRETT, Circuit Judge.
Kenneth C. Fitzgibbon (Fitzgibbon) appeals from a judgment denying his motion to vacate sentence imposed pursuant to 28 U.S.C. § 2255.
Background
Fitzgibbon is presently incarcerated following his conviction by a jury of knowingly and willfully making a false statement in violation of 18 U.S.C. § 1001, in connection with carrying on his person foreign currency in excess of $5,000.00 through United States Customs. This court affirmed. See: United States v. Fitzgibbon, 576 F.2d 279 (10th Cir. 1978), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978).
The facts, in summary, leading to Fitz-gibbon’s conviction and sentence in the United States District Court for the District of Colorado are: Fitzgibbon entered the United States on a flight from Canada and, upon arrival in Denver on March 31, 1977, he tendered to a U. S. Customs official Customs Form 6059-B entitled “Customs Declaration” — given to all incoming passengers; the form asks whether the person responding or anyone in his or her party is carrying over $5,000.00 in coin, currency or monetary instruments; Fitzgibbon checked a “no” response to that question, and, in addition, he gave a similar oral response to a Customs official following his arrival at Stapleton International Airport in Denver, Colorado; nothing on Form 6059-B advised Fitzgibbon of the reporting requirements of the Bank Secrecy Act of 1970, Pub.L. No. 91-508, 84 Stat. 1114 (1970) (codified in scattered sections of 12, 31 U.S.C.); Customs Officer Lockhart, after inquiring of Fitzgibbon orally, received a negative verbal response to the identical question posed on Form 6059-B relative to possession of currency in excess of $5,000.00, together with Fitzgibbon’s explanation that he had been in Canada overnight and had not acquired anything during the trip; Lockhart observed that Fitzgibbon was hesitant and nervous, and thus decided that a secondary examination was required; after Fitzgib-bon was taken to a separate room, currency in excess of $10,000.00 was found in Fitz-gibbon’s boots when he removed them; after receiving Miranda warnings, Fitzgibbon stated that he had acquired the money in Canada and that he did not want to “hassle” with Internal Revenue over it because a “portion” of it was not his, but rather belonged to an individual residing in New Jersey.
The indictment upon which Fitzgibbon was convicted and subsequently sentenced relied solely upon the charge that he knowingly and willfully made a false statement in completing Customs Form 6059-B relative to the currency inquiry.
Fitzgibbon’s direct appeal to this Court from his initial conviction was anchored to two primary contentions: First, that the indictment was defective because it did not specifically cite the federal regulation defining the term “monetary instruments” contained in the statute as including Canadian currency, and, second, that the Customs form referred to was a “baggage declaration” and, thus, not a proper form. These contentions were held to be without merit. See: United States v. Fitzgibbon, supra.
Following our affirmance of Fitzgibbon’s conviction, he was incarcerated in the federal prison at Lompoc, California. On November 13,1978, Fitzgibbon filed his motion pursuant to the federal habeas corpus statute, 28 U.S.C. § 2255, to vacate and set aside his sentence. The District Court denied Fitzgibbon’s motion in a Memorandum Opinion and Order.
On appeal, Fitzgibbon contends that the District Court erred in failing to grant his motion in that: (1) he was denied effective assistance of counsel at trial, inasmuch as his attorney failed to raise the so-called “exculpatory no” defense to the 18 U.S.C. § 1001 charge, and (2) the “farce, sham or mockery of justice” test should not have been applied in determining whether his effective assistance of counsel claim was valid.
I.
Fitzgibbon contends that, “Because of the ‘exculpatory no’ defense, the checking of the box ‘no’ and the oral ‘no’ to the inquiry as to whether a traveler brings more than $5,000.00 from abroad into the United States is outside the scope of the offense of making a false statement in violation of 18 U.S.C. Sec. 1001 and, standing alone, these facts could not bottom a finding beyond a reasonable doubt that Fitzgibbon had knowingly and willfully violated that Section as a matter of law. The failure to raise the defense [i. e., the “exculpatory no” defense], ipso facto, demonstrates lack of effective assistance of counsel.” [Opening brief of appellant at p. 8].
We first observe, as did the District Court [R., Vol. I, p. 66], that the “exculpatory no” defense was raised by counsel for Fitzgib-bon before the trial court in a motion to dismiss for failure to charge an offense; on appeal to this Court; and in a petition for writ of certiorari denied by the Supreme Court. Thus, a serious question exists as to whether Fitzgibbon is estopped from raising the same issue in this habeas corpus posture. We elect to reach the issue both because it was apparently not properly articulated in the prior proceedings and because it is an issue which has not been previously decided by this Court directly in the context of the facts of this case.
18 U.S.C. § 1001 provides that:
Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.
The “Exculpatory No” Exception
The predicate of the “exculpatory no” defense is simply that a negative response cannot serve as proof of the requisite knowledge and willfulness required to convict under 18 U.S.C. § 1001, absent affirmative steps taken by the government to make the reporting requirements of the law known.
A confession is a species of admissions. It is an acknowledgment in express words, by the accused in a criminal case, of the truth of the guilty fact charged or of some essential part of it. Exculpatory statements, denying guilt, are not confessions. Wigmore on Evidence, 3rd Ed., Vol. 3, § 821. A “confession” leaves nothing to be determined. It is a defendant’s acknowledgment of his intentional participation in the criminal act. An “admission”, on the other hand, constitutes a mere recital of facts which tend to establish guilt. Thus, an “exculpatory statement” has been described as a statement which tends to j'ustify, excuse or clear a defendant from alleged fault or guilt.
Fitzgibbon’s primary reliance on the “exculpatory no” defense is the decision rendered by the Fifth Circuit in United States v. Schnaiderman, 568 F.2d 1208 (5th Cir. 1978). The court there held that the “exculpatory no” defense applied in a prosecution almost identical to Fitzgibbon’s; Schnaiderman’s conviction was reversed. The facts in Schnaiderman are: Schnaider-man, a Venezuelan resident, arrived at Miami International Airport and entered the United States Customs line; he presented Customs Declaration Form 6059 — B, which he had not completed; the Customs Inspector directed Schnaiderman to complete and sign the form, which he did; when Schnaid-erman reappeared in the line, he handed the inspector Form 6059-B completed and signed; on the form, Schnaiderman checked the “no” answer to the inquiry relative to whether he was carrying cash or negotiable instruments in excess of $5,000.00; and, in addition, he orally responded “no” when Customs Inspector Randall verbally inquired as to whether he was carrying more than $5,000.00; when Schnaiderman passed on to Customs Inspector Deeley in the line, it was observed that Schnaiderman’s pockets were bulging and that he was nervous; Schnaiderman was asked to empty his pockets and thereupon $8,086.00 was found on his person; when Inspector Deeley inquired of Schnaiderman whether he understood United States currency laws, Schnaiderman responded that he was aware of the laws but that he was not going to spend the money in the United States.
Schnaiderman was charged with violating 18 U.S.C. §§ 1001 and 1058. On appeal, he asserted that there was insufficient evidence, as a matter of law, to prove that he intentionally violated these statutes. He argued that the “exculpatory no” exception applied to the negative response to the question posed on Form 6059-B and the identical oral response he made to Customs Inspector Randall. The Court agreed, reasoning that since 18 U.S.C. § 1001 requires “knowing” transportation and since 31 U.S.C. § 1058 requires a “willful” violation, there must be proof of the defendant’s knowledge of the reporting requirement and his specific intent to commit the crime. The Court cited to its prior opinion in United States v. Granda, 565 F.2d 922 (5th Cir. 1978) which followed United States v. San Juan, 545 F.2d 314 (2nd Cir. 1976).
In Granda, the Court, in disposing of the Government’s argument that the question on Form 6059-B relative to currency in excess of $5,000.00 put the traveler on notice that he must file the report on Form 4790, stated:
. The failure of the government to make known the requirements of the statute is fatal to their case. The isolated act of bringing money in excess of $5,000 into the country is not illegal or even immoral. What is required is merely a filing of the proper form. Proof of the requisite knowledge and willfulness, therefore, is almost impossible unless affirmative steps are taken by the government to make the laws’ requirements known. The government argues that the defendant was made aware of the reporting requirement by the question on the customs declaration form asking whether the defendant was carrying more than $5,000. We do not agree. The effect, if any, of this question is merely to cause the traveler to think that it is illegal to carry a large amount of money into the country. The question in no way tells the traveler it is perfectly legal to enter or leave the country with more than $5,000 but that a form reporting this fact must be completed. Nor does the untruthful answer of the question by the defendant prove beyond a reasonable doubt that she knew she was supposed to fill out a form. An untruthful answer could very easily be prompted by the question on the form which might cause the traveler who enters the country with more than $5,000 to think that his or her possession is by itself illegal, and who therefore answers untruthfully in order to attempt to avoid being caught breaking the law. We do not accept the government’s contention that the defendant’s falsification of her declaration, forms proves that she was aware of the separate reporting requirement.
565 F.2d at p. 926.
Thus, the Schnaiderman court came down with a rule preventing prosecution of a person, such as Fitzgibbon, who simply and only responded “no” to the currency inquiries in that the “exculpatory no” could not satisfy the requisite proof of knowledge and willful intent. Such could be satisfied if the defendant is specifically informed of the reporting requirements mandated in Granda prior to responding to the Bank Secrecy Act, supra, currency inquiries. Accord: United States v. Beer, 518 F.2d 168 (5th Cir. 1975); United States v. Bush, 503 F.2d 813 (5th Cir. 1974). See also: United States v. Chevoor, 526 F.2d 178 (1st Cir. 1975), cert. denied, 425 U.S. 935, 96 S.Ct. 1665, 48 L.Ed.2d 176 (1976) (negative responses given to FBI agents by a prospective grand jury witness).
The Legislative History of § 1001
The predecessor of § 1001 condemned only false claims designed to defraud the United States of its property. In 1934, the statute was amended “to protect the authorized functions of governmental departments and agencies from the perversion which might result from the deceptive practices described.” United States v. Gilliland, 312 U.S. 86, 93, 61 S.Ct. 518, 522, 85 L.Ed. 598 (1941). From that date forward, proof of pecuniary loss to the United States was no longer required. United States v. Beacon Brass Co., 344 U.S. 43, 73 S.Ct. 77, 97 L.Ed. 61 (1952) announced that there is no distinction between oral and written statements under this section, and United States v. Bramblett, 348 U.S. 503, 75 S.Ct. 504, 99 L.Ed. 594 (1955) recognized that 18 U.S.C. § 1001 must be accorded a broad and liberal interpretation in order to accommodate the congressional desire that its enactment lessen the likelihood of future false claims aimed at defrauding the Government “in the wake of a spate of frauds upon the Government.” In Bryson v. United States, 396 U.S. 64, 90 S.Ct. 355, 24 L.Ed.2d 264 (1969), the Supreme Court made it clear that the term “jurisdiction” in relation to federal agencies was not to be construed narrowly:
As another element of the offense, § 1001 requires that the false statement be made “in any matter within the jurisdiction of any department or agency of the United States.” . . . Because there is a valid legislative interest in protecting the integrity of official inquiries, see United States v. Bramblett . . . United States v. Gilliland ... we think the term “jurisdiction” should not be given a narrow or technical meaning for purposes of § 1001. ... A statutory basis for an agency’s request for information provides jurisdiction enough to punish fraudulent statements under § 1001.
396 U.S. at pp. 70-71, 90 S.Ct. at p. 359.
Thus, in accord with Bryson, supra, § 1001 has been interpreted broadly and liberally so as to apply to statements not required by law, not under oath, and not in writing made in the exercise of routine governmental administrative duties and which do not involve the possibility of self-incrimination. United States v. Bettenhau-sen, 499 F.2d 1223 (10th Cir. 1974); Knowles v. United States, 224 F.2d 168 (10th Cir. 1955). See also: United States v. Rose, 570 F.2d 1358 (9th Cir. 1978); United States v. Isaacs, 493 F.2d 1124 (7th Cir. 1973), cert. denied, 417 U.S. 976, 94 S.Ct. 3183, 41 L.Ed.2d 1146 (1974); United States v. Protch, 481 F.2d 647 (3rd Cir. 1973); United States v. Adler, 380 F.2d 917 (2nd Cir. 1967), cert. denied, 389 U.S. 1006, 88 S.Ct. 561, 19 L.Ed.2d 602 (1968); United States v. McCue, 301 F.2d 452 (2nd Cir. 1962), cert. denied, 370 U.S. 939, 82 S.Ct. 1586, 8 L.Ed.2d 808 (1962).
Any doubt concerning the need of the United States Customs officials for the “currency” information sought from Fitz-gibbon within the administrative “jurisdiction” of the agency is dispelled by this language in California Bankers Assn. v. Shultz, 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974):
Chapter 3 of Title II of the Act and the regulations promulgated thereunder generally require persons to report the transportation of monetary instruments into or out of the United States, or receipts of such instruments in the United States from places outside the United States, if the transportation or receipt involves instruments of a value greater than $5,000. Chapter 4 of Title II of the Act and the implementing regulations generally require United States citizens, residents, and businessmen to file reports of their relationships with foreign financial institutions. The legislative history of the foreign-transaction reporting provisions indicates that the Congress was concerned with the circumvention of United States regulatory, tax, and criminal laws which United States citizens and residents were accomplishing through the medium of secret foreign bank transactions. S.Rep.No.91-1139, supra, at 7; H.R.Rep.No.91-975, supra, at 13.
Section 231 of the Act, 31 U.S.C. § 1101, requires anyone connected with the transaction to report, in the manner prescribed by the Secretary, the transportation into or out of the country of monetary instruments exceeding $5,000 on any one occasion. As provided by the Secretary’s regulations, the report must include information as to the amount of the instrument, the date of receipt, the form of instrument, and the person from whom it was received. See 31 CFR §§ 103.23, 103.25. The regulations exempt various classes of persons from this reporting requirement, including banks, brokers or other dealers in securities, common carriers, and others engaged in the business of transporting currency for banks. 31 CFR § 103.23(c). Monetary instruments which are transported without the filing of a required report, or with a materially erroneous report, are subject to forfeiture under § 232 of the Act, 31 U.S.C. § 1102; a person who has failed to file the required report or who has filed a false report is subject to civil penalties under §§ 207 and 233, 31 U.S.C. §§ 1056 and 1103, as well as criminal penalties under §§ 209 and 210, 31 U.S.C. §§ 1058 and 1059.
416 U.S. at pp. 35-36, 94 S.Ct. at pp. 1504-1505. [Footnotes omitted].
Our Disposition
The elements of the offense identified in 18 U.S.C. § 1001, as amended, are 1) that the defendant made a statement, 2) that the statement was false and the defendant knew it was false, 3) the statement was made knowingly and willfully, 4) the statement was within the jurisdiction of the federal agency, and 5) the statement was material. We hold that these elements were established in Fitzgibbon’s trial and that the “exculpatory no” defense cannot prevail.
In United States v. Rose, 570 F.2d 1358 (9th Cir. 1978), the defendant’s conviction on two counts of violating 18 U.S.C. § 1001 was affirmed under facts strikingly similar to those involved in the case at bar. In Rose, the appellant (Rose) entered a United States Customs inspection border site at Blaine, Washington, adjacent to Canada. Rose gave false responses to a routine series of questions posed by the United States Customs agents. When asked what merchandise he was importing subject to declaration, Rose responded that he had only two cameras to declare when in fact he knew he was also carrying ergatomine tartrate (an alpha adrenergic blocking agent), a dutiable item he acquired abroad. In affirming the conviction of Rose grounded to the 18 U.S.C. § 1001 counts, the court rejected the “exculpatory no” defense:
Although the statement in this case was oral, unsworn and unrelated to any monetary claim against the United States, the declarant was claiming the privilege of entry, and his statement potentially impaired the function of the Customs Service.
The border agent testified that persons coming from overseas were referred automatically to a more rigorous inspection than those who had stayed in Canada. Instead of referring Rose for secondary inspection, the agent testified that he had been on the verge of letting him proceed. Although in this factual situation contraband was not allowed into the United States by Rose’s statement, the statement had the “intrinsic” capability of bringing it about. United States v. Quirk, 167 F.Supp. 462, 464 (E.D.Pa.1958), aff’d 266 F.2d 26 (3rd Cir. 1959), quoted in Brando w v. United States, 268 F.2d 559, 565 (9th Cir. 1959).
United States v. Bush, 503 F.2d 813 (5th Cir. 1974), relied on by appellant, is distinguishable. In that case, Bush was asked by an agent of the Internal Revenue Service whether he had committed a suspected misdeed. He answered with an untruthful “exculpatory ‘no’.” 503 F.2d at 819. Relying on its understanding of the congressional intent and influenced by Fifth Amendment concerns, the court reversed the conviction. It found that the “exculpatory no” fit within an investigatory exception to § 1001.
In our case, the border agent’s inquiries were a routine exercise of his administrative responsibility. Moreover, a truthful answer to the inquiries would not have involved self-incrimination. We conclude that the false statement appellant made to the agent at the border crossing was material within the meaning of § 1001.
570 F.2d at p. 1364.
The conflict between the Ninth Circuit’s holding in United States v. Rose, supra, and the Fifth Circuit’s embrace of the “exculpatory no” defense is well delineated, we believe, by this language stated in United States v. London, 550 F.2d 206 (5th Cir. 1977):
Section 1001 contains three operative clauses. The third concerns one who makes false writings, the second one who makes false statements or representations, and the first one who “falsifies, conceals or covers up by any trick, scheme, or device . . . ” The phrase “by trick, scheme, or device” obviously modifies all three preceding verbs. Had their intentions been otherwise the authors of the statute would have placed the non-modified verbs directly after the “by trick, scheme, or device” phrase. ******
This construction of the statute is supported by policy considerations. In construing a statute that will often come dangerously close to trenching on fifth amendment rights, one ought not punish concealments or false statements that fall short of constituting affirmative acts . The requirement of an affirmative act is implied in the second clause of § 1001 by the statute’s proscription of false statements . . . Unless full effect is given to the “trick, scheme, or device” phrase in the first clause, however, it would be possible to construe the terms “conceal or cover up” to embrace mere nondisclosure.
We have held, in enunciating the so-called “exculpatory no” doctrine, that essentially negative answers to questions propounded by investigating government officials are not statements within the meaning of the second clause of § 1001 in the absence of some affirmative, aggressive, or overt falsehood on the defendant’s part.
550 F.2d at pp. 212-213.
We agree with the rationale set forth in United States v. Rose, supra. Such is compatible with this broad-sweeping language in Bryson v. United States, supra:
A citizen may decline to answer the question, or answer it honestly, but he cannot with impunity knowingly and willfully answer with a falsehood.
396 U.S. at p. 72, 90 S.Ct. at p. 360.
In United States v. Fitzgibbon, supra, we implicitly held that the “exculpatory no” defense was not available to Fitzgibbon in light of the fact that when his flight arrived in Denver, he and all other incoming passengers were greeted in the Customs inspection area of the airport with prominent posters on the walls advising them that incoming travelers were obligated to report currency or monetary instruments exceeding $5,000.00 in value. In addition, we deem it important to observe that Customs Form 6059-B contained a clear and unequivocal instruction immediately above the signature space that all “. . oral and written statements which I have made are true, correct and complete.” In addition, the form stated, in bold print, that “False Statements Made To A Customs Officer Are Punishable by Law”.
In our view, the facts of the instant case do not “fit the mold” of the “exculpatory no” exception applied by the Fifth Circuit. The sole charge was based on the false statement Fitzgibbon submitted on the face of the Customs form he completed, signed and delivered. Under the statute, the submission of the form to Fitzgibbon while on board the flight was exclusively administrative in nature. There was no indication of criminal investigation or police coercion. Fitzgibbon clearly understood that completion of the form was required prior to entry into the United States, and that the false statements he made were designed to conceal information relevant to the administrative process:
He made a statement from which it could reasonably be inferred he knew of the requirement when he said he wanted to avoid a hassle with the United States Internal Revenue Service. Further, the fact he carried the money in his boots rather than in his wallet or in his pockets supports the inference he was attempting to hide it. His possession of a false driver’s license, and his “no” answers to repeated questions about whether he acquired anything in Canada and whether he had money would support the conclusion he knew of the reporting requirement.
576 F.2d 279 at p. 284.
It is important, in our view, to note that the question posed on the Customs declaration form, and orally asked by Customs Inspector Lockhart, could not have been incriminating, simply because it is not a crime to transport more than $5,000.00 into the United States. Rather, 31 U.S.C. § 1058 declares it a crime if a person willfully violates the provisions of Chapter 21 entitled “Reports of Currency and Foreign Transactions”.
Critical to a determination that a statement falls within the protection of the “exculpatory no” exception is a finding of possible self-incrimination. The rationale supporting this view is that a person cannot be compelled to be a witness against himself. In the case at bar, self-incrimination was clearly not implicated. Fitzgibbon could not have been held criminally liable under the subject statute had he truthfully reported the Canadian currency in his possession in excess of $5,000.00. The criminal sanction applies only if a person knowingly and willfully fails to report currency in excess of $5,000.00. Fitzgibbon could not have suffered any penalty or sanction at the hands of the Customs officials had he truthfully reported the currency in his possession. The knowing, false representation made by Fitzgibbon obstructed a statutorily mandated administrative function of a federal governmental agency. This is not a case where Fitzgibbon was “on the horns” of a dilemma between the truth and a lie. On the state of this record, it is pure speculation whether Fitzgibbon would have subjected himself to any criminal sanctions beyond those he incurred by violating the provisions of 18 U.S.C. § 1001.
II.
In light of that which we have heretofore written, we hold that Fitzgibbon’s trial counsel afforded him adequate, effective, competent representation under any recognized standard. See: Gillihan v. Rodriquez, 551 F.2d 1182 (10th Cir. 1977) (the “sham and mockery” test), cert. denied, 434 U.S. 845, 98 S.Ct. 148, 54 L.Ed.2d 111 (1977); Dyer v. Crisp, 613 F.2d 275 (10th Cir. 1980— En Banc) (exercise of “skill, judgment and diligence” of reasonably competent defense attorney).
WE AFFIRM.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
NATHANIEL R. JONES, Circuit Judge.
This is an appeal from a decision of the district court holding U.S. Patent No. 3,209,228 valid. The report of Magistrate Streepy and the opinion of District Judge Lambros are reported at 489 F.Supp. 1129 (N.D.Ohio 1980). We affirm.
I.
Background
For an extensive discussion of the facts of the case, reference is made to the magistrate’s report. A summary of the pertinent facts will be stated in this opinion to the extent necessary to dispose of the issues presented on appeal.
Skil Corporation (Skil) is the owner of U.S. Patent No. 3,209,228 in the name of Alex F. Gawron (the Gawron patent). The Gawron patent claims a combination of elements which include (1) an electric motor, (2) a silicon controlled rectifier (SCR) speed control circuit, (3) a trigger, and (4) human feedback. These elements combine to produce an operator-controlled trigger to regulate the operating speed of a portable power tool, such as an electric drill.
The Gawron patent application was submitted on September 28, 1962. In early 1964, Lucerne Products, Inc. (Lucerne) exhibited a speed control device before Skil officials which, like the speed control device claimed in the Gawron patent application, employed an SCR speed control circuit and a trigger operated through human feedback. The Lucerne device also had an additional desirable feature in that it was available in a “retrofit package” which would permit the speed control device to be inserted in the handle of a portable tool. Although the Gawron patent application had noted that the speed control device claimed therein could be “mounted in a handle,” the location or packaging of the speed control device was not an element of the combination patent, and the Gawron patent prototype did not have the speed control elements housed exclusively in the handle of the tool.
Skil and Lucerne entered into negotiations, and on March 2, 1964, Skil ordered 100,000 of the Lucerne speed control switches at $3.00 a unit. Since Lucerne lacked production facilities, Skil assisted Lucerne in their creation and advised Lu-cerne to make certain refinements in the speed control device.
On March 3,1964, Skil amended its initial application by cancelling certain claims and adding two new claims. In the supporting remarks, Skil noted that the Gawron device “is small and compact and readily lends itself to mounting within the handle of the tool without causing heating of the handle.” Skil further asserted that the Gawron device provided for the first time an extremely compact, trigger-operated control system which could be mounted in the handle of a power tool. On November 24, 1964, the patent examiner denied the amended claims of the Gawron patent application.
On March 26,1964, Lucerne filed a patent application covering its speed control device. Like the Gawron patent application, none of the claims in the Lucerne patent application included the placing of the speed control circuitry into the handle of a power tool as an element of the claimed invention.
On March 9, 1965, Skil and Lucerne entered into an agreement which provided that counsel for the parties would make a mutual disclosure of their respective patent applications, determine whether there was common subject matter, and, if so, compare proofs as to the date of inventorship. In the event they could not agree as to which party was entitled to the claims, the Patent Office would be requested to set up an interference to determine the same. In the event a patent was issued to either Skil or Lucerne, the party owning the patent would grant to the other party a nonexclusive license to make the control switch units for a royalty of three percent, or lower in case another license was granted for a lower royalty.
Lucerne subsequently did little to establish prior invention of the speed control device. At the March 9,1965 signing of the agreement between Skil and Lucerne, the parties disclosed their respective patent applications to one another. On June 30, 1965, Lucerne exhibited its first two trigger speed control device prototypes. Counsel for Lucerne represented that the two prototypes were made before the relevant Gaw-ron invention dates, but no supporting documentation was produced by Lucerne at that time. During the period between early 1966 and August 1977, Lucerne, for the first time, showed Skil a document in an effort to establish priority of invention. Two additional documents were disclosed to Skil in August of 1967. These documents, however, were inconclusive. The district court found that the Lucerne device was not invented prior to the September 28, 1962 application date of the Gawron patent, and this finding is not challenged on appeal.
On March 16, 1965, Skil representatives met with the patent examiner concerning the Gawron patent application. They demonstrated the Gawron invention by operating a variable speed control drill which incorporated the invention. The invention was embodied in a Lucerne speed control device which Skil had purchased from Lu-cerne.
Six days after the demonstration before the patent examiner, on March 25, 1965, another amendment to the Gawron application was filed. In the remarks accompanying the amendment, the March 16, 1965 demonstration was acknowledged and briefly described. There is no evidence that Skil, at this or any other time, informed the Patent Office of the Lucerne speed control device and its use in the demonstration drill. Nor is there any evidence that Skil pointed out the retrofit feature of the Lu-cerne device or otherwise contended that the invention included the retrofit feature as an element. The remarks also sought to distinguish the amended Gawron claims from certain prior art patents. These patents included U.S. Patent No. 2,609,525 (the Gemill patent), which teaches that the speed of an electric appliance can be varied by using a trigger in combination with a circuit which features a rheostat. The patent examiner was shown a copy of the patents and Skil stated that, “None of these patents in any way relate to a trigger speed control using a silicon rectifier circuit, and in particular the type of circuit which permits the operator of the tool to achieve feedback by finger control.” On April 6, 1965, the patent examiner reconsidered the Gawron application and allowed it. The Gawron patent was issued on September 28, 1965.
Lucerne sought to amend its application on June 15, 1965, by adding claims which duplicated the claims allowed in the Gaw-ron application. On May 19, 1966, the patent examiner rejected all claims of the Lu-cerne application. Lucerne filed an amendment on August 4,1966, and requested that an interference be declared between its amended claims and the Gawron patent. In response, the patent examiner rejected all Lucerne claims on September 9, 1966, and sometime thereafter the application was abandoned.
II.
Fraud on the Patent Office
Lucerne contends that Skil committed fraud on the Patent Office in the prosecution of the Gawron patent application by failing to inform the Patent Office of (1) the Lucerne speed control device, (2) the agreement between Skil and Lucerne to determine first inventorship, (3) the fact that Gawron’s prototype did not have the “retrofit” feature, and (4) the use of the Lucerne speed control device to demonstrate the Gawron invention to the patent examiner.
An initial difficulty with Lucerne’s position is its claim that this appeal presents only questions of law and involves no issues of disputed fact. In this Circuit a party asserting a fraud defense in patent litigation is required to prove “specific intent,” that is, intent to defraud, by clear, unequivocal and convincing evidence. Kearney & Trecker Corp. v. Cincinnati Milacron, Inc., 562 F.2d 365, 371 (6th Cir. 1977); Kolene Corp. v. Motor City Metal Treating, Inc., 440 F.2d 77, 83 (6th Cir.), cert. denied, 404 U.S. 886, 92 S.Ct. 203, 30 L.Ed.2d 169 (1971). Further, the specific intent must be associated with a material matter. Schnadig Corp. v. Gaines Mfg. Co., 494 F.2d 383, 392 (6th Cir. 1974). Whether clear, unequivocal and convincing evidence of fraud was in the record before the district court is a question of fact, not of law, and thus the determination of the district court that there was no fraud may be reversed only if clearly erroneous. Kearney & Trecker Corp. v. Cincinnati Milacron, Inc., supra at 371; Schnadig Corp. v. Gaines Mfg. Co., supra at 392; Becton Dickinson & Co. v. Robert B. Scherer Corp., 211 F.2d 835, 838 (6th Cir. 1954). Lucerne’s contention that, upon the facts found, the district court was required to conclude that Skil committed fraud as a matter of law must be rejected.
The district court found that Lucerne had established neither the specific intent nor the materiality elements of the fraud defense. This finding was not clearly erroneous. A finding of fraud on the Patent Office depends on a subsidiary finding that the omission or misrepresentation was material. DeLong Corp. v. Raymond International, Inc., 622 F.2d 1135, 1145 (3rd Cir. 1980). Where, as here, the claim is one of fraudulent nondisclosure, it must appear that the Patent Office would have rejected the patent application but for the nondisclosure. Deere & Co. v. Hesston Corp., 593 F.2d 956, 960 (10th Cir.) cert. denied, 444 U.S. 838, 100 S.Ct. 75, 62 L.Ed.2d 49 (1979); Norton v. Curtiss, 433 F.2d 779, 795 (C.C.P. A.1970). Since Lucerne does not challenge the district court’s finding that its device was not prior art, its insistence that Skil was duty bound to bring the device to the attention of the Patent Office is inexplicable. Obviously, the existence of a similar device invented at a later date would not have caused the Patent Office to reject Skil’s patent application, and therefore was not material.
Since the existence of the Lucerne speed control device was not material to the pat-entability of the Gawron invention, it follows that the agreement between Skil and Lucerne to determine first inventorship and the use of the Lucerne speed control device to demonstrate the Gawron invention was also immaterial. Similarly, the fact that the Gawron prototype did not have a retrofit feature is utterly immaterial. An inventor need not make an actual reduction to practice; the filing of an application is a constructive reduction to practice which completes the invention. The Telephone Cases, 126 U.S. 1, 535-36, 8 S.Ct. 778, 782-83, 31 L.Ed. 863 (1888); Republic Iron & Steel Co. v. Youngstown Sheet & Tube Co., 272 F. 386, 391 (6th Cir. 1921).
On appeal, Lucerne seeks to avoid the consequences of the finding that its device was not prior art by contending that Skil was required to disclose the Lucerne device merely because Skil could not be sure whether the Lucerne device was in fact invented after the Skil device. Lucerne relies on the “uncompromising duty” of candor discussed in Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 65 S.Ct. 993, 89 L.Ed. 1381 (1945). In Precision, however, the nondisclosure condemned by the Supreme Court was highly material: the party seeking to enforce the patent knew that the patent had been acquired by means of perjury regarding the date of invention. Similarly, in every case in which this Court has applied the Precision doctrine, we have recognized that the lack of candor or inequitable conduct must relate to a material matter. See, e.g., Buzzelli v. Minnesota Mining & Mfg. Co., 521 F.2d 1162, 1166 (6th Cir. 1975); Schnadig Corp. v. Gaines Mfg. Co., 494 F.2d 383, 392-93 (6th Cir. 1974); Charles Pfizer & Co. v. FTC, 401 F.2d 574, 580, 582 (6th Cir. 1968), cert. denied, 394 U.S. 920, 89 S.Ct. 1195, 22 L.Ed.2d 453 (1969). Thus, Precision does not impose upon the patent applicant a duty to disclose immaterial facts. Cf. Carter-Wallace, Inc. v. Davis Edwards Pharmaceutical Corp., 443 F.2d 867, 881 (2d Cir. 1971) (Precision doctrine would not require disclosure of certain references if references not found to be prior art). Lucerne’s reliance on Beckman Instruments, Inc. v. Chemtronics, Inc., 428 F.2d 555 (5th Cir.), cert. denied, 400 U.S. 956, 91 S.Ct. 353, 27 L.Ed.2d 264 (1970), is also misplaced. There the court’s discussion of Beckman’s duty to disclose the existence of Chemtronic’s device is premised on a finding that Chemtronic’s invention was prior art. Lucerne, however, has acquiesced in a finding that its invention was not prior art. Thus, the cases relied on by Lucerne do not permit it to evade the materiality requirement.
Apart from the claims relating to the nondisclosure of the Lucerne device, Lucerne further contends that Skil fraudulently misrepresented the Gemill patent as not relating to a trigger speed control permitting operator feedback by finger control. However, Lucerne has misread Skil’s statements. Although the Gemill patent does teach the elements of speed control, human feedback, and the use of a trigger, its circuitry features a rheostat rather than an SCR, and it is on this basis that Skil distinguished the Gemill patent. Thus Skil did not misrepresent the Gemill patent, fraudulently or otherwise.
III.
Obviousness
The district court adopted the magistrate’s conclusion that the Gawron invention was nonobvious. On appeal, Lucerne again insists that the Gawron patent is directed to obvious subject matter and invalid under 35 U.S.C. § 103.
The Gawron patent has been held nonobvious in Skil Corp. v. Cutler-Hammer, Inc., 412 F.2d 821 (7th Cir.), cert. dismissed, 396 U.S. 951, 90 S.Ct. 394, 24 L.Ed.2d 257 (1969). In that litigation, the district court had found the Gawron patent invalid for obviousness, relying upon the rejection by the Patent Office of identical claims contained in the Lucerne application. The Seventh Circuit reversed, holding that a rejection of the Lucerne application did not destroy the presumption of validity of the Gawron patent. The difference of about a year and a half between the Gawron application and the later Lucerne application was considered significant by the court because the art of silicon-controlled rectifiers was rapidly advancing during that interval. 412 F.2d at 824.
The normal statutory presumption of validity accorded to a patent by 35 U.S.C. § 282 is greatly enhanced when it has been held valid in a prior decision. American Home Products Corp. v. Lockwood Mfg. Co., 483 F.2d 1120, 1125 (6th Cir. 1973), cert. denied, 414 U.S. 1158, 94 S.Ct. 917, 39 L.Ed.2d 110 (1974). A prior adjudication of validity will be followed unless the court is convinced of a very palpable error in law or fact. Id.; Cold Metal Process Co. v. Republic Steel Corp., 233 F.2d 828, 837 (6th Cir.), cert. denied, 352 U.S. 891, 77 S.Ct. 128, 1 L.Ed.2d 86 (1956).
Lucerne relies upon the rejection by the Canadian Patent Office of the corresponding Gawron application on the grounds of obviousness. The magistrate, however, found that no evidence was introduced showing that in 1965 Canadian patent law was substantially identical to United States patent law or that the facts and circumstances surrounding the two applications were substantially identical. Furthermore, we note that the three year interval between the American and Canadian filing dates is twice as long as the period considered significant by the Seventh Circuit in holding that rejection of the Lucerne application did not detract from the validity of the Gawron patent. Therefore, we conclude that the magistrate and the district court did not err in concluding that the proceedings in Skil’s Canadian application did not overcome the enhanced presumption of validity attaching to the Gawron patent.
The judgment of the district court is AFFIRMED.
. Although neither the Skil nor the Lucerne applications claimed the retrofit feature as an element of the claimed invention, the original Skil application, filed well before Skil learned of the Lucerne device, clearly stated that the Gawron invention could be mounted “in the handle” of a power tool.
. Lucerne contends that the precedential effect of the Seventh Circuit decision has been nullified by the supplemental record developed in the course of this litigation. However, the eight items of new evidence upon which Lu-cerne relies pertain to the alleged fraud practiced by Skil, an allegation we have rejected. These items of evidence do not undermine the Seventh Circuit decision on the issue of obviousness.
. Patent proceedings in other countries are not controlling, in part because the standards of patentability vary widely from country to country. Timely Products Corp. v. Arron, 523 F.2d 288, 295 (2d Cir. 1975). But in light of the emphasis Lucerne places upon the Canadian patent proceedings, it is interesting to note that Skil did succeed in obtaining counterpart Gaw-ron patents in eleven other foreign countries.
. As mentioned, the United States patent application was submitted on September 28, 1962. The Canadian patent application was filed on September 21, 1965.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
LASKER, District Judge.
HS Equities, Inc. (HS) appeals from a judgment entered after a bench trial before the United States District Court for the Southern District of New York (Metzner, District Judge) in which it was awarded $64,512.90 and interest on its claim for $130,000. asserted against Hartford Accident and Indemnity Company (Hartford), and from a post-trial order denying its motion to amend the findings of fact by increasing the award. In addition, HS appeals from an order granting Hartford summary judgment on HS’ separate claim for $49,730.6!, for attorneys’ fees and costs.
Hartford cross appeals from the judgment of the district court awarding HS $64,512.90 and interest and from the dismissal of Hartford’s third-party complaint against Joseph Decker (Decker), as well as from the order denying its claim that HS’ action was not commenced within the contractual period of limitation.
I.
HS brought this action to recover, under a blanket brokers bond (the Bond) issued by Hartford, the sum of $130,000. paid by HS in settlement of actions brought against HS and Decker, its registered representative, and for attorneys’ fees. The Bond, which Hartford issued to HS in 1967, covered “[a]ny loss through any dishonest, fraudulent or criminal act of any of the Employees . . . . ” In addition, it separately provided for indemnification against court costs and reasonable attorneys’ fees incurred and paid by Hartford in defending against a claim which, if established, would constitute a collectible loss under the Bond. In consideration for this provision, HS agreed that it would “promptly give notice to [Hartford] of the institution of any such suit or legal proceeding” and that Hartford could undertake defense of the suit if it elected to do so. The Bond required that a suit under the Bond must be “begun within twenty-four months after [HS] shall learn of such loss. ...”
The earlier action for which HS seeks indemnity was instituted in the fall of 1970 by two customers of HS, the Draicchios, on account of alleged violations of the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 and breaches of common-law fiduciary duties. The Draicchios charged that their accounts had been churned, that unauthorized trading had taken place, that unsuitable securities had been purchased for their accounts, that HS and Decker had engaged in self-dealing, and that a series of margin violations had occurred. They sought over $225,000. in actual damages and $350,000. in exemplary damages and attorneys’ fees.
On August 11, 1971, HS gave notice to Hartford of the pendency of the Draicchio suits and forwarded copies of the Draicchios’ complaints to Hartford. Hartford declined to undertake the defense of the actions. On June 25, 1975, HS notified Hartford that the cases had been consolidated for trial on July 25, 1975, and that HS had refused a settlement demand of $155,000. by the Draicchios. At that time, HS invited Hartford to participate in settlement discussions and inquired if Hartford objected to HS settling the suits. Hartford responded that since it had elected not to defend the suits, it would neither approve nor disapprove the settlement and that a settlement would not prejudice HS’ rights to proceed under the Bond but that this statement did not constitute a waiver by Hartford of any defenses it had under the Bond.
The Draicchio trial began on July 25, 1975. After a week of trial principally devoted to Mr. Draicchio’s direct testimony, the trial was adjourned for the weekend and the court suggested that counsel further consider settlement. The following Monday morning settlement was reached. HS agreed to pay the Draicchios $130,000. on account of all claims against HS and Decker.
Decker, who was represented by the same counsel as HS, did not contribute to the settlement. HS had secured counsel to represent Decker and itself, paid all legal fees, and paid Decker’s expenses in connection with the suit. Decker voiced satisfaction with the settlement and was told by counsel that he could return home. Decker was not informed that as a result of the settlement he might be sued by Hartford if Hartford was called to pay under the Bond, and HS did not execute a release in favor of Decker. Thereafter, HS paid the settlement and stipulations of dismissal were executed on August 5, 1975.
On August 5, 1975, HS advised Hartford of the settlement and demanded reimbursement for the $130,000. as well as $42,530.61 in attorneys fees and $2,200. in expert witness fees. HS returned a completed proof of loss form to Hartford on September 4, 1975, for these amounts. After discussions between HS and Hartford, Hartford denied the claim in writing on December 11, 1975 on the ground that there was no evidence of Decker’s dishonesty.
In July, 1977, HS filed its complaint in the present action to enforce Hartford’s asserted liability under the Bond. Hartford answered and filed a third-party complaint against Decker alleging that it was entitled to judgment against Decker for any amount for which it might be found to be liable to HS. All parties then moved for summary judgment. In an opinion dated October 17, 1978, the district court denied the motions except for that portion of Hartford’s motion for summary judgment dismissing HS’ claim for reimbursement of attorneys’ fees and litigation expenses. The district court held that HS’ nine month delay in informing Hartford of the institution of the Draicchio suits did not comply with the prompt notice requirement of the attorneys’ fees provision of the Bond and that Hartford had not waived the notice provisions by denying liability under the Bond for the actions.
A bench trial was held in May, 1980, and the district court filed its findings of fact and conclusions of law on June 23, 1980. It found that the settlement of the Draicchio actions had been in good faith and that Hartford had been accorded a reasonable opportunity to defend the actions and had declined to do so. Relying on Feuer v. Menkes Feuer, Inc., 8 A.D.2d 294, 187 N.Y.S.2d 116 (1959) and other New York decisions, it held that the settlement conclusively established Hartford’s liability under the Bond for the portion of the settlement attributable to the claims that Decker had committed fraudulent or dishonest acts. The district court determined that $65,000. of the settlement was attributable solely to HS’ liability for margin violations and that the remainder was attributable to the allegations of Decker’s misconduct.
In addition, the district court dismissed Hartford’s claim against Decker. It held that Decker would have a defense against a claim by HS to recover any part of the loss allegedly due to his misconduct because HS was responsible for the conflict of interest in the representation of Decker in the Draicchio actions and had failed to protect his interests by providing him a release from HS. Since Hartford’s rights against Decker could be no greater than HS’ rights against Decker, the district court concluded that Hartford could not maintain its claims against Decker. It held further that Hartford’s inability to proceed against Decker did not constitute an impairment by HS of Hartford’s right of subrogation since Hartford’s refusal to defend the Draicchio actions had the same effect as a denial of liability under the Bond, which in turn constituted a waiver by Hartford of the defense of impairment of subrogation rights.
HS appeals from the district court’s decision on the grounds that it was entitled to the full $130,000. settlement sum and that it was improper to grant Hartford summary judgment of HS’ claim for indemnification of attorneys’ fees. Hartford argues that liability under the Bond was never established and that its claim against Decker should not have been dismissed.
II.
We consider first the threshold issue whether Hartford was liable to HS under the Bond. In an action involving the same bond as at issue here, HS Equities, Inc. v. Hartford Accident and Indemnification Company, 609 F.2d 669 (2d Cir. 1979) (“Michael”), we read the New York law on the subject to be that when an indemnitor has been accorded a reasonable opportunity to defend a third-party action against the indemnitee and declines, the good-faith settlement of the third-party claim by the indemnitee is presumptive evidence of the facts alleged in the third-party complaint. Thereafter, the indemnitor has the burden successfully to contest this presumptive evidence in the action for indemnification. 609 F.2d at 674-75. We specifically rejected the proposition that such a settlement constituted conclusive evidence of the facts upon which it was based. 609 F.2d at 674 n.8. Since, in Michael, Hartford had never advanced Michael’s innocence as a defense to its liability to HS under the Bond, we held that it had failed to overcome the presumptive effect of the good-faith settlement of the third-party suits and that it was therefore unnecessary for the trial court to determine whether the allegations of misconduct on the part of Michael were true.
Hartford contends that in this case the district court erred by finding Hartford liable on the Bond without finding as a matter of fact that the settlement was made because of Decker’s “dishonest, fraudulent or criminal acts” within the meaning of the Bond. Hartford argues that, while it introduced evidence at trial that Decker was innocent of the misconduct alleged in the Draicchio complaints, HS introduced no evidence of Decker’s misconduct and even declared on the record that it was not taking the position that Decker had in fact acted fraudulently or dishonestly. It follows, according to Hartford, that it was never established that there was a loss encompassed by the terms of the Bond.
Hartford next argues that the district court should not have applied the presumption discussed in Michael because here, unlike Michael, there had been no finding that Hartford had denied liability under the Bond. Hartford contends that, since it had a contractual right to decline to defend third-party suits, its decision not to defend should not result in a presumption against it. Hartford further contends that even if the Michael presumption does apply when the indemnitor has not denied liability, the district court failed to adhere to Michael because it treated the Draicchio settlement as conclusive rather than rebuttable evidence of Decker’s misconduct. In any event, Hartford maintains that we misread the relevant New York law in Michael and that no presumption should apply here because the bond in question is not a broad indemnity bond but comes into effect only when particular acts or misconduct in fact produce a loss to the insured.
HS responds that the issue whether Hartford denied liability under the Bond is irrelevant to the determination of the effect of the settlement of the Draicchio actions under the relevant New York law. Moreover, HS asserts that the opinion in Michael misread the New York law on the effect of a good-faith settlement on a later action for indemnification. According to HS, it is firmly established by New York decisions that, if the indemnitor is given notice of the third party suit and a reasonable opportunity to defend and declines to do so, any reasonable, good-faith settlement entered into by the indemnitor is conclusive evidence of the facts alleged in the third-party complaint in the later action for indemnification. It follows, HS says, that it was not required to establish in the district court that Decker had acted fraudulently or dishonestly, but only that Hartford declined to defend and that the settlement was entered into in good faith. Since the district court found these facts, HS contends that it properly accorded the settlement of the Draicchio actions conclusive effect against Hartford.
The finding that Hartford is liable to HS under the Bond for the portion of the settlement of the Draicchio actions-attributable to allegations of Decker’s misconduct is reversed. We believe that the district court failed to apply our holding in Michael and treated the good-faith settlement of the Draicchio actions as conclusive evidence of Decker’s wrongdoing in this indemnification action. Under Michael, the settlement of the Draicchio suit constituted only presumptive evidence which Hartford was entitled to contest. Here, unlike Michael, Hartford introduced substantial evidence that Decker was innocent of any wrongdoing. HS took the position that Decker’s innocence or guilt was, in light of Hartford’s decision not to defend, irrelevant to Hartford’s liability under the Bond. The trial court incorrectly agreed with HS and therefore failed to determine whether Hartford had overcome the presumption created by the settlement, whether HS was obliged to submit proof of Decker’s misconduct, and whether Decker in fact was guilty of the allegations in the Draicchios’ complaints. Accordingly, the case must be remanded to the district court to hear the evidence and make the determinations which it omitted.
We do not agree with Hartford, however, that the presumption discussed in Michael depends upon a finding that Hartford denied liability under the bond prior to the time of settlement. While in Michael Hartford had actually denied liability, and we noted that fact in our discussion of the effect of the prior settlement in the indemnification action, our analysis of the New York law did not conclude that a denial of liability is a precondition to the application of the presumption. See Michael, supra, at 674 n.8.
III.
HS contends that the district court erred in granting Hartford summary judgment on HS’ claim for reimbursement of attorneys’ fees and litigation expenses. HS argues first that Hartford’s assertion that third-party customer suits did not come within the coverage of the Bond relieved HS from the obligation under the attorneys’ fees provision of the Bond promptly to notify Hartford of any such suit. In its opposition to Hartford’s summary judgment motion, HS had submitted the affidavit of Robert J. Poulson, HS’ present general counsel who in 1969 was employed on its legal staff, which HS asserts established that Hartford had taken the position that customer suits were not within the Bond’s coverage. HS argues that the trial court misconstrued the affidavit as merely establishing HS’ denial of liability in a particular case. HS emphasizes that the same denial of liability was referred to in Michael as constituting a denial of liability for customer suits in general. Moreover, HS argues that, as a result of the findings of fact in Michael, Hartford is collaterally estopped from asserting that it did not deny liability for customer fraud suits in early 1970. Finally, HS contends that even if the district court were correct that Hartford had not denied liability under the Bond, it still erred in granting summary judgment on the attorneys’ fees claim because the question whether HS promptly informed Hartford of the Draicchio actions constituted a genuine issue of material fact precluding summary judgment.
Hartford responds that the district court properly determined that a delay of nine months was unreasonable as a matter of law and therefore violated the contractual requirement that HS notify Hartford promptly of suits against it. Hartford emphasizes that HS submitted no evidence in opposition to the motion for summary judgment which established an excuse for the delay in notice. Moreover, Hartford stresses that the issue of Hartford’s alleged denial of liability was considered at trial and that the district court found that there was no denial of liability since HS had in fact notified Hartford of the suits, albeit belatedly. According to Hartford, the district court found HS’ belated notice to be inconsistent with HS’ position that HS believed that Hartford had previously denied liability. Hartford also argues that the denial of liability found in Michael was limited to churning claims and that HS had been informed in 1970 that Hartford would consider its position with respect to the Bond’s coverage as each particular customer suit was brought to its attention.
The order granting Hartford summary judgment on HS’ claims for attorneys’ fees and litigation expenses is reversed. It is established that a repudiation of liability by an insurer on the ground that the loss is not covered by the policy operates as a waiver of the notice requirements contained in the policy. See, e. g., Rock Transport Properties, Corp. v. Hartford Fire Insurance Company, 433 F.2d 152, 154 (2d Cir. 1970); Beckley v. Otesco County Farmers Cooperative Fire Insurance Company, 3 A.D.2d 190, 195, 159 N.Y.S.2d 270 (3d Dept. 1957); Shapiro v. Employers’ Liability As surance Corp., 139 Misc. 454, 248 N.Y.S. 587 (Sup.Ct.Bronx Co. 1931). In Michael, we upheld the district court’s finding that Hartford’s expression of its general position that third-party customer suits were not encompassed within the terms of the fidelity bond, along with varied justifications for that position, was the equivalent of a denial of liability in the third-party suit at issue. Michael, supra, 609 F.2d at 673. In the present case, HS had submitted an affidavit of Robert J. Poulson which stated that in 1969 Hartford had informed HS of its general position that securities fraud claims arising out of customer suits were not covered by the Bond.
We agree with HS that this affidavit can only be construed to relate to a general denial of liability by Hartford applicable to all customer suits. Accordingly, the Poulson affidavit raised a genuine issue of material fact whether Hartford had actually disclaimed liability under the Bond for all customer suits and whether it had thereby, under Michael, waived its contractual notice rights.
Moreover, we agree with HS that Hartford is collaterally estopped from contesting any facts which were decided or stipulated in Michael. However, the scope and duration of the denial of liability found in Michael is not clear from the record before us. Accordingly, on remand the district court should determine if the general denial of liability discussed in Michael encompassed the claims pressed by the Draicchios and, if so, whether Hartford had changed its position before the Draicchio actions were instituted.
IV.
Hartford contends that the district court erred in dismissing its third-party complaint against Decker. We disagree. The district court found that the joint representation of HS and Decker at the Draicchio suits resulted in counsel’s failure properly to protect Decker’s interests by securing a release from HS in his favor. The evidence supports the district court’s conclusion that, had the circumstances been explained to Decker, he would not have consented to the settlement without securing such a release. Since Decker’s consent to the settlement depended upon HS’ failure to take his interests into account, Decker would have a defense against any action by HS to recover the portion of the settlement attributable to his alleged misconduct. Hartford, standing in the shoes of the subrogor, HS, is subject to the same defense. Great American Insurance Company v. United States, 575 F.2d 1031, 1034 (2d Cir. 1978).
Hartford next argues that if the third-party complaint was properly dismissed against Decker, then HS’ entire complaint against Hartford should have been dismissed on the ground that HS had impaired Hartford’s subrogation rights against Decker. We need not reach this issue at this time. We have remanded the case for a determination whether Hartford had denied liability under the Bond for the claims at issue here. If it is found that Hartford had indeed denied liability, the issue whether HS had impaired Hartford’s subrogation rights will be rendered moot. If it is determined that Hartford did not deny liability, the issue whether HS had impaired Hartford’s subrogation rights by its actions with respect to Decker or whether Hartford’s actions constituted a waiver of its subrogation rights can be determined on a record properly directed to those questions.
V.
The parties’ remaining contentions are without merit. The district court’s finding that $65,000. of the settlement amount was attributable to margin violations for which HS would be liable is supported by ample evidence in the record and is not clearly erroneous. The district court’s finding that the action was begun within the contractual twenty-four month period is consistent with the well-established principle that a contract must be construed in the light of the applicable law at the time the contract was executed, see Battaglia v. General Motors Corp., 169 F.2d 254, 258 (2d Cir. 1948) and that any ambiguity in the Bond must be resolved in favor of the insured. E. g., Filor, Bullard & Smyth v. Insurance Company of North America, 605 F.2d 598 (2d Cir. 1978); State Farm Mutual Auto Insurance Company v. Westlake, 35 N.Y.2d 587, 591, 364 N.Y.S.2d 482, 324, N.E.2d 137 (Ct.App.1974).
Reversed in part, affirmed in part and remanded for proceedings consistent with this opinion.
. HS Equities, Inc. v. Hartford Accident and Indemnity Company, 493 F.Supp. 451 (S.D.N.Y.1980).
. HS Equities is the surviving entity of Hayden, Stone Inc. We refer to both entities as “HS”.
. The relevant provisions of the Bond are as follows:
“The losses covered by this Bond are as follows:
FIDELITY
(A) Any loss through any dishonest, fraudulent or criminal act of any of the Employees, committed anywhere and whether committed alone or in collusion with others, including loss of Property through any such act of any of the Employees.
COURT COSTS AND ATTORNEYS FEES
[Hartford] will indemnify the Insured against court costs and reasonable attorneys’ fees incurred and paid by the Insured in defending any suit or legal proceeding brought against the Insured to enforce the Insured’s liability or alleged liability on account of any loss, claim or damage which, if established against the Insured, would constitute a valid and collectible loss sustained by the Insured under the terms of this bond. Such indemnity shall be in addition to the amount of this bond. In consideration of such indemnity, the Insured shall promptly give notice to [Hartford] of the institution of any such suit or legal proceeding; at request of [Hartford] shall furnish it with copies of all pleadings and other papers therein; and at [Hartford’s] election shall permit [Hartford] to conduct the defense of such suit or legal proceeding, in the Insured’s name, through attorneys of [Hartford’s] own selection.
LOSS — NOTICE—PROOF-LEGAL PROCEEDINGS
Section 3. The Insured shall give to the Underwriter written notice of any loss under this bond as soon as possible after the Insured shall learn of such loss, and within ninety days after learning of such loss shall file with the Underwriter an itemized proof of claim duly sworn to. The Underwriter shall have thirty days after notice and proof of loss within which to investigate the claim, but where the loss is clear and undisputed, settlement shall be made within forty-eight hours; and this shall apply notwithstanding the loss is made up wholly or in part of securities of which duplicates may be obtained. No action or proceeding shall be brought under this bond in regard to any loss unless begun within twenty-four months after the Insured shall learn of such loss, except that any action or proceeding to recover hereunder on account of any judgment against the Insured in any suit mentioned in the paragraph entitled Court Costs and Attorneys’ Fees, or to recover attorney’s fees paid in any such suit, shall be begun within twenty-four months from the date upon which the judgment in such suit shall become final, or in case such limitation be void under the law of the place governing the construction hereof, then within the shortest period of limitation permitted by such law.”
. After trial, HS moved for an order amending the findings of fact to provide that only $487.10 should be deducted from the $130,000. settlement it paid on the ground that the margin violations alleged by the Draicchios were attributable to Decker’s mismanagement of the account rather than to HS. Hartford moved to increase the amount of the settlement attributable to HS. In a decision dated September 3, 1980, the district court reiterated its finding that $65,000. of the settlement was attributable to margin violations for which HS would have been liable and therefore should be deducted from the amount of the settlement for which Hartford was liable under the Bond. The district court also held that an additional $487.10, representing Decker’s remaining interest in a profit sharing plan, should be deducted from HS’ recovery and that interest should run on the amount awarded to HS.
. The arguments of both HS and Hartford that Michael misconstrued the applicable New York law are not properly presented to a panel of this court. See Ingram v. Kumar, 585 F.2d 566 (2d Cir. 1978), cert. denied, 440 U.S. 940, 99 S.Ct. 1289, 59 L.Ed.2d 499 (1979); Lee v. Frozen Food Express, Inc., 592 F.2d 271 (5th Cir. 1979).
. The trial court’s decision that Hartford’s earlier denial of liability could not be held to apply to customer suits which had not yet been instituted at the time of Hartford’s statements was rendered before our opinion in Michael and was therefore without the benefit of our holding that Hartford’s general denial of liability for particular claims, coupled with justification for its position, was the legal equivalent of a denial of liability for a particular suit within the scope of the general denial. It is unclear whether the district court’s observation at trial that HS’ late notice was inconsistent with HS’ assertion that it believed Hartford had already denied liability for such suits was intended to constitute a finding that Hartford had not in fact denied liability. If it were so intended, we disagree. HS’ belated notice cannot legally or factually serve to estop it from asserting that it had no duty to notify Hartford in the first place because Hartford had waived the prompt notice right by disclaiming liability. HS’ motivations in giving notice at a later time are irrelevant to the factual issue whether Hartford had waived notice by denying liability.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
CUMMINGS, Circuit Judge.
Petitioner, Cornelius Lewis, his sister, Bernice Lewis, and Willie Sangster were indicted in Macon County, Illinois, on February 21, 1979, and charged with the offenses of murder, armed robbery, and aggravated kidnapping in connection with the robbery of the Citizens National Bank in Decatur, Illinois, on December 14, 1978, during which a bank security guard was shot and killed. Sangster’s case was continued and petitioner and his sister Bernice were tried together. A jury found both guilty of all three charges. Petitioner was subsequently sentenced to death for murder. Bernice was sentenced to concurrent prison terms of forty years for murder, thirty years for armed robbery, and thirty years for aggravated kidnapping.
The Illinois Supreme Court on direct appeal affirmed petitioner’s conviction and death sentence. People v. Lewis, 88 Ill.2d 129, 58 Ill.Dec. 895, 430 N.E.2d 1346 (1981). The Supreme Court of the United States subsequently denied certiorari. Lewis v. Illinois, 456 U.S. 1011, 102 S.Ct. 2307, 73 L.Ed.2d 1308. Petitioner then sought post-conviction relief in the Illinois courts. See Ill.Rev.Stat. ch. 38, 11122-1 et seq. An Illinois circuit court denied post-conviction relief, and the Illinois Supreme Court again on direct appeal affirmed the lower court’s order. People v. Lewis, 105 Ill.2d 226, 85 Ill.Dec. 302, 473 N.E.2d 901 (1984). Certiorari was again denied. Lewis v. Illinois, 474 U.S. 865, 106 S.Ct. 184, 88 L.Ed.2d 153.
On November 13, 1985, the Illinois Supreme Court granted petitioner a stay of execution pending his filing a petition for a writ of habeas corpus. The stay was subsequently extended to cover the outcome of the federal habeas corpus proceedings which were commenced pursuant to 28 U.S. C. § 2254 on March 31, 1986. The habeas petition challenged both the conviction and the death sentence. Petitioner claimed that his conviction had been obtained in violation of his right under the Sixth Amendment to effective assistance of counsel. He further claimed that his Sixth Amendment right to effective assistance of counsel had also been denied during the sentencing phase of his case. Finally, he claimed that the Illinois Death Penalty Act, Ill.Rev.Stat. ch. 38, ¶ 9-1, was unconstitutional under the Eighth and Fourteenth Amendments.
The district court held that petitioner had failed to demonstrate ineffective assistance of counsel under Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674, during the guilt phase of his trial. See United States ex rel. Lewis v. Lane, 656 F.Supp. 181 (C.D.Ill.1987). However, the court held that he had been denied his Sixth Amendment right to effective assist-anee of counsel during the sentencing phase of his prosecution and accordingly issued a writ of habeas corpus vacating the death sentence and ordering resentencing. In light of its holding with regard to petitioner’s sentencing, it did not reach the constitutionality of the Illinois Death Penalty Act. Respondent appeals the court’s grant of the writ of habeas corpus ordering resentencing. Petitioner cross-appeals the district court’s denial of relief as to his conviction. We affirm.
I.
28 U.S.C. § 2254(d) provides that the factual findings of a state court are presumed to be correct in a federal habeas corpus proceeding. See Sumner v. Mata, 449 U.S. 539, 101 S.Ct. 764, 66 L.Ed.2d 722. Like the district court, we adopt the Illinois Supreme Court’s following statement of facts in People v. Lewis, 88 Ill.2d 129, 136-41, 58 Ill.Dec. 895, 898-90, 430 N.E.2d 1346, 1349-51 (1981):
“The testimony of the principal witnesses was as follows. Jodi Myers testified that, at 6:45 a.m. on the morning of the crime, she noticed two or possibly three persons in a maroon Monte Carlo automobile in the parking lot of the day-care center where she worked. As she walked near the Monte Carlo, a black man seated in the driver’s seat (whom she later identified from a line-up as Maurice Farris) lowered his sun visor.
“Mary Comerford testified that, after delivering her child to the same day-care center, she returned to her car, noticing two black persons in a maroon Monte Carlo parked next to her white Mercury automobile. When she entered her car, a black man wearing a ski mask appeared in her back seat and forced her to drive away, eventually taping her eyes and hands and placing her in the trunk of the Mercury.
“Kaye Pinkley, a teller at the Citizens National Bank, testified that decedent Bivens normally drove a van with five tellers from the bank’s parking garage to an auto-banking facility. Shortly before 8 a.m. on December 14, as decedent was about to start the van in which the tellers were seated, a tall black man pulled the right front door open, leaned his elbows on the witness’s legs, ordered the tellers to remain silent, and shot decedent, as the latter apparently reached for his gun. Then the gunman and another robber took three of the tellers’ five briefcases containing money for the day and banking paraphernalia, ran to a light-colored Mercury and drove away. Teller Pinkley and two other tellers later identified items recovered from the Macon County landfill as items which had been in their briefcases that morning.
“Mr. and Mrs. Joseph Dennis from rural Macon County stated that, while sitting in their car near the Citizens National Bank, they saw two blacks park Mrs. Comerford’s Mercury, enter the bank’s parking garage, later return to the Mercury, with three black briefcases, and drive off. Gail Thompson, a florist, saw a black man or person dressed as a man, carrying a black briefcase in the vicinity of the parking lot near the bus station, where Norman Go-enne, an office worker, saw the driver in a maroon Monte Carlo, waiting with the engine running at around 7:45 a.m.
“Maurice Farris testified that he and Willie Sangster (who according to the prosecution’s theory was the mastermind of the robbery) surveyed the Citizens National Bank and the route to the home of Margaret Morgan, where defendant apparently was staying. On two mornings, Farris observed the tellers’ routine. Sangster introduced defendant and his sister (using the names ‘Denise’ and ‘Mingo’) to Farris, who at trial estimated the sister’s height as 5 feet 11 inches, defendant’s as over 6 feet and his own as 5 feet 8 inches. The Lewis-es and he discussed plans for the robbery of the bank. Farris was to drive the car, the Lewises were to do the actual robbing, and Sangster was to get $10,000 ‘off the top’ the day after the robbery, apparently for his role in planning. On the morning of December 13, when they had intended to carry out the plan, the Lewises and Farris were unable to steal a car for use in the robbery, but they did observe the tellers’ routine and drove along the route to Mrs. Morgan’s. The next morning defendant and his sister, with Farris driving, went to the daycare center in the Monte Carlo looking for a car to steal. Maurice lowered his sun visor to avoid being identified. Defendant left the car and concealed himself in the back seat of Mrs. Comerford’s Mercury. When she entered the car he forced her to drive away and eventually took control of her car, forcing her to get into the trunk. Defendant’s sister then left Fanis in the Monte Carlo, which had accompanied the Mercury, and sat on the passenger side of the front seat of the Mercury. Farris drove to a parking lot near the bus station, got some coffee at about 7:40, and waited with the motor running until defendant and his sister rejoined him, carrying one and two briefcases respectively. The Lewises concealed themselves on the floor of the maroon Monte Carlo. On the drive to Mrs. Morgan’s, a siren prompted comments by the sister, and defendant stated, ‘The guard went for his gun. I had to burn him.’ Except for the possibility of a perjury prosecution, Farris received total immunity in return for his testimony.
“Mrs. Morgan testified that the Lewises had stayed with her beginning on December 12,1978. On the morning of December 14, at about 8:05 or 8:10 a.m., she observed the defendants with three black briefcases. She asked Bernice Lewis whether Bernice knew that the bank had been robbed, to which Bernice, with defendant present, replied, ‘Did he die?’ Later that morning Mrs. Morgan saw both Lewises counting a large quantity of money on her coffee table, with black briefcases and ‘blank money orders from the bank and money wrappers’ present. Defendant gave Mrs. Morgan a paper sack to take to Willie Sangster at Jelk’s Barbershop, where he worked. Later that day, Bernice Lewis and Mrs. Morgan went to a deteriorated section of Decatur to dispose of the black briefcases and a garbage bag containing two handguns, money wrappers, and other miscellaneous items. Subsequently Mrs. Morgan and two neighbors moved these things from the garbage cans, where Bernice Lewis and she had put them, to a ‘dumpster.’ Mrs. Morgan, Shirley Brummet (a neighbor), and the Lewises drove to the Davenport, Iowa, bus station, where defendant and his sister caught the bus to Des Moines. Mrs. Morgan eventually turned over to the FBI some money which she said included that given her by defendant. Mrs. Morgan testified that she discovered a.357-Magnum handgun, which a ballistics expert indicated could have fired the bullet which killed decedent, under a mattress in the room in which the Lewises had been staying. She stated she observed the gun during a January 25 FBI consent search of the room when the agents lifted the foot of the mattress on the bed. According to her testimony the gun was located near the head of the bed and was not seen by the agents. She did not then mention the gun to them but later that day took it to a friend’s home from which the agents later recovered it at her direction. The agents both testified that only the lower corners of the mattress were lifted and they did not observe the gun. On January 31 Mrs. Morgan did give to FBI agents five live rounds of.357-cali-ber ammunition which she had earlier removed from the gun.
“Barbara Rigney (one of Mrs. Morgan’s children) and Florida Eubanks and Shirley Brummet (two neighbors) testified that Bernice and Cornelius Lewis had been staying at Mrs. Morgan’s in mid-December, 1978. Wyonia Adams, another neighbor, testified that she and Shirley Brummet had moved garbage bags containing guns and miscellaneous items from a trash can to a ‘dumpster.’ Shirley Brummet testified that, on December 14, she had traveled with the Lewises and Mrs. Morgan, to the Davenport, Iowa, bus station. Officer McQuaid, of the Decatur police, testified that he observed a black lady carrying a sack into Jelk’s Barbershop on the morning of December 14, 1978.
“Defendant’s brother-in-law, Dwight David, testified that in late December 1978 defendant had asked him to keep a box which contained money. After he heard that defendant had been arrested, David took the money from the box, put it in a bag, and asked a friend, Mrs. Bradford, to hold it for him. He later retrieved it, and gave it, still in the bag, to the FBI, together with the box from which he had taken it. FBI Agent Ryan testified that new $20 bills with serial numbers G21536201A through G21536247A were included in the money turned over by David. Daniel Kin-sella, an official of the Federal Reserve Bank, testified that numbers written on the back of a form (Exhibit 80) indicated that $20 notes with serial numbers G21536001A through G21540000A were in a shipment of currency which had been sent to the Citizens National Bank in Decatur.
“Lee Jarombeck, an employee of a Minnesota car dealer, testified that defendant had rented from him the maroon Monte Carlo which had been observed in the daycare lot and eventually recovered from Far-ris’ garage.
“Defendant offered no testimony, adopting Bernice Lewis’ case, which primarily emphasized Mrs. Comerford’s lineup identification of Farris as her kidnapper, and teller King’s positive statements to Decatur police officers that the robbers were both male.”
II.
The focus of both the principal appeal and the cross-appeal is whether petitioner was denied effective assistance of counsel in violation of his rights under the Sixth and Fourteenth Amendments. On the principal appeal the State challenges the district court’s determination that the performance of petitioner’s attorney during the sentencing phase was constitutionally deficient. On the cross-appeal petitioner challenges the court’s determination that he did not receive ineffective representation within the meaning of Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674, during the guilt phase of the proceedings.
“The essence of an ineffective assistance claim is that counsel’s unprofessional errors so upset the adversarial balance between defense and prosecution that the trial was rendered unfair and the verdict rendered suspect.” Kimmelman v. Morrison, 477 U.S. 365, 106 S.Ct. 2574, 2583, 91 L.Ed.2d 305; see Strickland v. Washington, 466 U.S. at 686, 104 S.Ct. at 2063; United States v. Cronic, 466 U.S. 648, 655-57, 104 S.Ct. 2039, 2044-46, 80 L.Ed.2d 657. In discussing the content of the Sixth Amendment right to effective assistance of counsel, the Supreme Court has emphasized the importance of the adversarial process and the critical role of counsel in ensuring its proper functioning. Strickland, 466 U.S. at 686, 104 S.Ct. at 2063. In United States v. Cronic, 466 U.S. at 656-57, 104 S.Ct. at 2045-46, the Court declared:
The right to effective assistance of counsel is thus the right of the accused to require the prosecution’s case to survive the crucible of meaningful adversarial testing. When a true adversarial criminal trial has been conducted—even if defense counsel may have made demonstrable errors—the kind of testing envisioned by the Sixth Amendment has occurred. But if the process loses its character as a confrontation between adversaries, the constitutional guarantee is violated.
In order to establish an ineffective assistance claim, a defendant must show that his counsel’s performance fell below basic standards of competence and that the resulting errors so prejudiced his defense as to deprive him of a fair trial. Strickland, 466 U.S. at 687, 104 S.Ct. at 2064. The defendant, not the State, bears the burden of proving both incompetence and prejudice. Id. There is a strong presumption that counsel’s performance falls within “the wide range of reasonable professional assistance.” Id. at 689, 104 S.Ct. at 2065. To overcome this presumption, the defendant must demonstrate that his counsel’s representation fell below an objective standard of reasonableness as measured by reference to prevailing professional norms. Id. at 688, 104 S.Ct. at 2064. The reasonableness of counsel’s performance should be evaluated not with hindsight but from counsel’s perspective at the time of the alleged error and in light of all the circumstances. Id. at 689, 104 S.Ct. at 2065.
That counsel’s representation was professionally unreasonable, however, is not enough to constitute ineffective assistance under the Sixth Amendment. The defendant must also show that any deficiencies in counsel’s performance actually prejudiced his or her defense. The appropriate test for prejudice is whether there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different. Id. at 694, 104 S.Ct. at 2068. A reasonable probability is a probability sufficient to undermine confidence in the result. Id. As the Supreme Court indicated in Strickland, the prejudice inquiry is substantively the same regardless of whether the defendant is challenging his conviction or his sentence:
When a defendant challenges a conviction, the question is whether there is a reasonable probability that, absent the errors, the factfinder would have had a reasonable doubt respecting guilt. When a defendant challenges a death sentence..., the question is whether there is a reasonable probability that, absent the errors, the sentencer — including an appellate court, to the extent it independently reweighs the evidence— would have concluded that the balance of aggravating and mitigating circumstances did not warrant death.
Id. at 695, 104 S.Ct. at 2068. In determining the existence of prejudice, the court must consider “the totality of the evidence before the judge or jury.” Id.
In Kimmelman v. Morrison, 477 U.S. 365, 106 S.Ct. 2574, 2587, 91 L.Ed.2d 305, the Supreme Court described the Strickland standard for ineffective representation as “highly demanding,” and stressed that “[o]nly those habeas petitioners who can prove under Strickland that they have been denied a fair trial by the gross incompetence of their attorneys will be granted the writ.” Fully recognizing the rigorous nature of the Strickland test, we also keep in mind the wise counsel of Judge Wyzan-ski: “While a criminal trial is not a game in which the participants are expected to enter the ring with a near match in skills, neither is it a sacrifice of unarmed prisoners to gladiators.” United States ex rel. Williams v. Twomey, 510 F.2d 634, 640 (7th Cir.1975), certiorari denied, 423 U.S. 876, 96 S.Ct. 148, 46 L.Ed.2d 109 (quoted in Cronic, 466 U.S. at 657, 104 S.Ct. at 2046).
III.
The Sixth Amendment’s requirement of effective assistance of counsel applies to a capital sentencing proceeding in the same manner in which it applies to the conviction phase of a criminal proceeding. As the Supreme Court explained in Strickland, 466 U.S. at 686-87, 104 S.Ct. at 2063-64:
A capital sentencing proceeding... is sufficiently like a trial in its adversarial format and in the existence of standards for decision... that counsel’s role in the proceeding is comparable to counsel’s role at trial — to ensure that the adversarial testing process works to produce a just result under the standards governing decision.
Under Illinois law, a capital sentencing proceeding has two phases. Ill.Rev.Stat. ch. 38, 119-1. The first phase deals with whether the defendant may be sentenced to death at all. A defendant who has been found guilty of murder and who at the time of the commission of the offense has attained the age of eighteen may receive the death penalty if the State establishes beyond a reasonable doubt the existence of one of the aggravating factors set out in ¶ 9-l(b). In petitioner’s case, the jury found in accordance with 119-l(b)(6) that petitioner, and not another party to the crime, had actually killed Donald Bivens intentionally during the course of an armed robbery.
The second phase of the capital sentencing proceeding concerns whether a death sentence should actually be imposed. Once there has been a finding that one or more of the factors set out in ¶ 9-l(b) exists, the jury, or the court if sitting as sentencer, then proceeds to consider additional aggravating and mitigating factors, such as but not limited to those set out in ¶ 9-l(c), and determines whether the defendant should be sentenced to death. Paragraph 9-l(g) provides that “if the jury determines unanimously that there are no mitigating factors sufficient to preclude the imposition of the death sentence, the court shall sentence the defendant to death.” See also ¶19 — 1(h) (same standard when court acts as sentencer). That same paragraph further emphasizes that “unless the jury unanimously finds that there are no mitigating factors sufficient to preclude the imposition of the death sentence, the court shall sentence the defendant to a term of imprisonment.” ¶ 9-l(g). Again in petitioner’s case, the jury unanimously found that there were no mitigating factors sufficient to preclude imposition of the death sentence, and the court consequently sentenced petitioner to death.
Petitioner’s claims of ineffective assistance of counsel during the sentencing proceeding are all directed toward his attorney’s performance during the second phase of that proceeding, the hearing on additional aggravating and mitigating factors. Petitioner’s principal claim of attorney ineffectiveness during the sentencing hearing concerns the admission into evidence of the erroneous fact that petitioner had four pri- or felony convictions. The record reveals that at some time prior to the final phase of the sentencing proceeding, the Macon County State’s Attorney, Patrick Walsh, approached petitioner’s appointed attorney, Kenneth Kinser, and asked him if he would stipulate to the existence of four prior felony convictions on the basis of information contained in an “FBI rap sheet.” Those convictions allegedly included: (1) a 1965 New York conviction for attempted felonious assault with a knife, (2) a 1966 New York conviction for felonious assault with a tire iron, (8) a 1966 California conviction for second degree robbery, and (4) a 1969 Minnesota conviction for bank robbery, for which he was on parole at the time of the Bivens murder. Mr. Walsh had secured certified copies of the California and Minnesota convictions, but he had not been able to obtain certified copies of the two alleged New York convictions.
Mr. Kinser showed the “rap sheet” to petitioner and asked him if it were accurate. Petitioner told Mr. Kinser that he thought the information was correct. Mr. Kinser apparently did not explain to petitioner the difference between an arrest and a conviction for purposes of the sentencing hearing, or the difference between a felony and a misdemeanor. On the basis of petitioner’s response, Mr. Kinser agreed to stipulate to the existence of the four prior felony convictions despite the fact that the State did not have certified records of the New York convictions and could not have proved their existence had they been requested or required to do so. Mr. Kinser later explained that he thought it would be less damaging to petitioner to stipulate to the convictions rather than have the jury see the official copies embossed with gold seals. He also stated, however, that he never inquired whether Mr. Walsh actually had such copies in his possession.
During the second phase of the sentencing hearing, the court allowed Mr. Walsh to inform the jury of the four prior convictions and the sentences imposed in regard to each (three months for both the New York convictions, one year to life for the California conviction, and twenty years for the Minnesota conviction). Mr. Walsh then argued to the jury:
Here’s a man who began a career of criminal activity in 1965 and 1966, with attempted assault with a knife, felonious assault with a tire iron, thirteen years ago. He then graduated, feeling that New York was no longer safe for his criminal pursuits, moved on to California. And in California committed second degree robbery, and received a sentence of one year to life, in the court in California in July, 1966. And after he was released from the penitentiary in California, he moved to Minnesota, figuring the east and west coasts were no longer safe for his activity, he’d try the midwest. And he moved to Minneapolis, worked on his talents there, and graduated to bank robbery, committed an armed robbery of a bank in Minneapolis, Minnesota in 1969. And received twenty years in prison.
# * $ # # $
And now Mr. Lewis comes from Minneapolis to Decatur, Illinois, not only commits the offense of bank robbery, but aggravated kidnapping and murder.... And I think that the evidence in this case, prior criminal convictions of this defendant simply show that he is a totally anti-social human being. And I think that your decision as to what ought to be done with him now ought to be made in that light.
(Trial Tr. B-288 to B-289).
When petitioner initiated post-conviction proceedings in the Illinois courts, the State’s Attorney’s Office again made efforts to obtain certified copies of the New York convictions. Usual efforts to obtain the records again proved unsuccessful, but by exploiting a connection with a New York City police detective, Assistant State’s Attorney Jeff Justice and Assistant Attorney General Neal Goodfriend, both of whom were representing the State in the post-conviction proceedings, managed at some time during the post-conviction evi-dentiary hearing in 1983 to obtain certified records showing the disposition of the New York charges. These records indicated that the 1966 felonious assault charge had been dismissed and that with regard to the 1965 charge of attempted felonious assault, petitioner had pled guilty to a misdemeanor assault charge and received a three-month sentence. • Despite the fact that these records conclusively established that the information which had been presented to the jury concerning petitioner’s prior criminal record was inaccurate and false, Messrs. Justice and Goodfriend determined that they were under no obligation to disclose the New York records and accordingly withheld them from Steven Beckett, petitioner’s counsel at that time, and from Judge Harold Jensen, who was presiding at the post-conviction hearing. Moreover, in the State’s brief submitted to and during oral argument before the Illinois Supreme Court on appeal of the denial of post-conviction relief, Mr. Goodfriend represented that petitioner had four prior felony convictions, sometimes referring to the stipulation and sometimes not, even though he knew that that representation was false.
After the Illinois Supreme Court had affirmed the circuit court’s denial of post-conviction relief and while certiorari was pending for the second time-before the Supreme Court of the United States, petitioner’s counsel was finally able, with the assistance of the NAACP Legal Defense Fund in New York, to obtain certified records indicating the disposition of petitioner’s two New York arrests, information which the State had possessed for approximately two years. For the first time, petitioner’s counsel learned that petitioner’s prior criminal record introduced at the sentencing hearing was inaccurate and that the two alleged New York felony convictions were nonexistent. On February 11, 1986, his counsel filed a “Motion for a Supervisory Order and for Post-Conviction Relief” with the Illinois Supreme Court in which he informed the court of the contents of the New York records. The Illinois Supreme Court summarily denied petitioner’s motion in March, although two justices dissented, finding that petitioner was entitled to a new sentencing hearing in light of the clearly inaccurate information which had been presented to the sentencing jury. People v. Lewis, 95 Ill.Dec. 371, 489 N.E.2d 1099 (1986) (Clark, C.J., and Simon, J., dissenting).
Respondents contend that the issue of the accuracy of the New York convictions has been waived for purposes of federal habeas review because it was never presented to the Illinois courts until after the post-conviction proceedings were final. See Wainwright v. Sykes, 433 U.S. 72, 87, 97 S.Ct. 2497, 2506, 53 L.Ed.2d 594; Williams v. Lane, 826 F.2d 654, 659, 663 (7th Cir.1987). The district court found “cause” under Wainwright for the procedural default in “the fact that the Assistant State’s Attorney and Assistant Attorney General concealed the evidence about the New York convictions from the petitioner and the post-conviction judge.” Respondents argue that this finding runs counter to the Supreme Court’s holding in Murray v. Carrier, 477 U.S. 478, 106 S.Ct. 2639, 2646, 91 L.Ed.2d 397, that “the existence of cause for a procedural default must ordinarily turn on whether the prisoner can show that some objective factor external to the defense impeded counsel’s efforts to comply with the State’s procedural rule.” They contend that the information concerning the New York arrests and convictions was available in public records accessible to petitioner, and accordingly that the conduct of state officials in no way prevented petitioner from discovering the truth regarding the alleged New York convictions and raising his claim during the post-conviction proceedings.
The difficulty which the State encountered in attempting to secure records of fifteen-year-old convictions from another jurisdiction clearly belies this argument. Indeed the reason why Mr. Walsh approached Mr. Kinser in 1979 about stipulating to the existence of four prior felony convictions, including the two from New York, was that he had been unable to obtain copies of the New York convictions through ordinary channels. Moreover, in 1983 when the State was again attempting to secure copies of the New York convictions prior to the post-conviction hearing in Illinois circuit court, an investigator with the State’s Attorney’s Office found it necessary to rely on a personal contact in the New York City Police Department for assistance in ultimately obtaining the relevant records.
As an indigent death row inmate relying on the efforts of appointed counsel, petitioner did not have available to him all of the resources of the State in attempting to secure copies of the alleged New York convictions. He sought the help of the NAACP Legal Defense Fund in New York in locating the records, but that office was unable to produce certified copies of the New York records until the summer of 1985. Without the factual information contained in those records, any ineffective assistance of counsel claim based on Mr. Kin-ser’s stipulation to the existence of the New York convictions would have been useless for petitioner would have been unable to demonstrate prejudice as a result of Mr. Kinser’s error.
In Murray v. Carrier, 106 S.Ct. at 2646, the Supreme Court suggested that “a showing that the factual or legal basis of a claim was not reasonably available to counsel” would constitute cause under Wainwright v. Sykes. Petitioner has made a sufficient showing that the factual basis of his claim concerning the New York convictions was not reasonably available to his counsel before mid-1985. Moreover, had Messrs. Justice and Goodfriend disclosed the contents of the New York records to Judge Jenson and petitioner’s counsel upon their receipt in 1983, petitioner would have been able to raise his claim during the post-conviction proceedings. To that extent we agree with the district court that the conscious decision of these two state officials deliberately to conceal crucial information relating to petitioner’s sentencing was “an objective factor external to the defense [which] impeded counsel’s efforts to comply with the State’s procedural rules.” Murray, 106 S.Ct. at 2646. Finally, petitioner did raise the accuracy of the New York convictions before the Illinois Supreme Court at the first available opportunity, in the form of the Motion for a Supervisory Order, but the Illinois Supreme Court declined the opportunity to comment on the merits and summarily denied the motion. For all of these reasons, petitioner has certainly established cause under Wainwright v. Sykes for any procedural default concerning the New York convictions.
That petitioner was prejudiced by Mr. Kinser’s stipulation to the existence of two prior felony convictions which in fact did not exist can hardly be disputed. A defendant may not be sentenced “on the basis of assumptions concerning his criminal record which [are] materially untrue.” Townsend v. Burke, 334 U.S. 736, 741, 68 S.Ct. 1252, 1255, 92 L.Ed. 1690; see also United States v. Tucker, 404 U.S. 443, 447, 92 S.Ct. 589, 591, 30 L.Ed.2d 592 (misinformation of a constitutional magnitude, such as uncounseled guilty pleas, may not be relied upon in imposing sentence); United States v. Cameron, 814 F.2d 403, 407 (7th Cir.1987). There is no dispute that the information concerning the New York convictions that was presented to the jury was untrue. We agree with the district court that it was also material. The difference between two prior felony convictions and four prior felony convictions in determining whether to impose the death penalty is without doubt significant. As the district court explained, while two prior convictions would constitute an aggravating factor bearing strongly on deciding the appropriate disposition of a case, “four prior convictions would indicate an absence of mitigating considerations and a life committed to criminal activity.” 656 F.Supp. at 193. Furthermore, the two New York convictions were described to the jury as involving violent crimes of assault, namely, attempted felonious assault with a knife and felonious assault with a tire iron, which might have weighed particularly heavy in the balance of aggravating and mitigating factors. Particularly in light of the gravity and more importantly the irrevocability of the sentence ultimately imposed on petitioner, there is certainly a reasonable probability that, but for Mr. Kinser’s unfortunate acquiescence in the admission of false evidence, the outcome of the proceeding would have been different, and petitioner would not have been sentenced to death. Under the Illinois statute, if only one juror believed that there were mitigating factors sufficient to preclude the imposition of the death sentence, then petitioner would have been sentenced to a term of imprisonment. Ill.Rev.Stat. ch. 38, ¶ 9 — 1(g).
The above discussion of the cause and prejudice requirements in connection with the procedural default clearly foreshadows our holding with respect to the ineffective assistance of counsel claim. With petitioner’s life at stake, Mr. Kinser during a crucial phase of the sentencing hearing agreed to stipulate to the existence of four prior felony convictions without asking the State’s Attorney whether he had actual proof of those convictions in the form of certified copies. Instead Mr. Kinser relied on petitioner’s uninformed representation that he thought the information contained in the “FBI rap sheet” was accurate, without explaining to petitioner the importance of that information and the critical distinctions between arrest and conviction and between felony and misdemeanor. The district court noted that “a guardian ad litem in a probate proceeding for an incompetent would have insisted on strict proof from an adversary.” 656 F.Supp. at 194. Certainly no less should be expected from defense counsel in a capital sentencing proceeding where the defendant’s life rides on the outcome. Even if in part caused by the State’s Attorney’s behavior, Mr. Kinser’s performance was grossly deficient and “shockingly inferior to what may be expected of the prosecution’s representation.” United States v. Weston, 708 F.2d 302, 306 (7th Cir.1983) (quoting United States ex rel. Williams v. Twomey, 510 F.2d 634, 640 (7th Cir.1975)), certiorari denied, 464 U.S. 962, 104 S.Ct. 397, 78 L.Ed.2d 340.
We have already set forth our belief that petitioner’s defense was actually prejudiced by Mr. Kinser’s regrettable representation with respect to the erroneous New York convictions. Indeed we believe that, whether or not prompted by the State’s Attorney, counsel’s error in this respect was so serious and the prejudice to petitioner so great that on this basis alone “counsel’s conduct so undermined the proper functioning of the adversarial process that the [capital sentencing proceeding] cannot be relied on as having produced a just result.” Strickland, 466 U.S. at 686, 104 S.Ct. at 2064. Petitioner is therefore entitled to a new sentencing hearing, and we consequently need not pass upon any of the other claims of ineffective assistance of counsel relating to the sentencing phase which were raised by petitioner and considered by the district court.
Although Mr. Kinser’s conduct is of course the subject of our immediate concern, we also find the conduct of Assistant State’s Attorney Justice and Assistant Attorney General Goodfriend to be equally shocking. These two representatives of the State deliberately withheld vital information from both the Illinois courts and petitioner and his counsel. See Ill.Rev. Stat. ch. 110A, Canon 7, Rule 7-103(b) (“A public prosecutor... in criminal litigation shall make timely disclosure to counsel for the defendant... of the existence of evidence, known to the prosecutor..., that tends to negate the guilt of the accused or mitigate the degree of the offense.”). Moreover, Mr. Goodfriend deliberately misrepresented petitioner’s prior criminal record before the Supreme Court of Illinois on the post-conviction appeal when he had in his possession information conclusively indicating that petitioner had no New York felony convictions. See Ill.Rev.Stat. ch. 110A, Canon 7, Rule 7-102(a) (a lawyer shall not knowingly make a false statement of fact or use false evidence). What is most reprehensible about the conduct of these two individuals, however, is that if petitioner’s attorney during the post-conviction and federal habeas proceedings, Mr. Beckett, had not been so diligent in securing official copies of the New York records and petitioner had eventually exhausted all of his opportunities for appellate review without obtaining any relief, petitioner could have been executed with two officials of the State of Illinois knowing that he had been sentenced “on the basis of assumptions concerning his criminal record which were materially untrue.” Townsend v. Burke, 334 U.S. at 741, 68 S.Ct. at 1255.
We wholly agree with petitioner’s observation that the Illinois court system and more importantly the people of Illinois have “an interest in ensuring that [Illinois’] death penalty statute is fairly applied to offenses committed within [
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
STONE, Circuit Judge.
This litigation has been before this court three times — once, on questions of jurisdiction and parties (11 F. [2d] 854); once, on questions of practice and procedure, involving the modification of the order of this court on the above appeal (11 F.[2d] 854, 858); once, on an ancillary bill to protect and preserve the jurisdiction of the trial court (15 F.[2d] 797). The first trial was upon the merits but, as the decree thereon was a dismissal of the bill for lack of necessary and indispensable parties, there was no determination of the merits. On that appeal [our No. 7019,11 F.(2d) 854], counsel argued various points on the merits but, as this court, thought that necessary and indispensable parties were lacking, it did not examine the merits except so far as to answer the questions as to parties and jurisdiction. On the return to the trial court, the bill was amended bringing in all interested parties.and the second trial and decree were upon the merits. Generally speaking, the result of that decree was to grant the relief sought in the bill and by the interveners. From that result, the main appeal herein is taken. There are cross-appeals on costs and concerning the bonds required to be given under the decree. •
I. The Main Appeal.
These appellants argue their assignments under five headings. There is no material conflict in the evidence. The issues are as to the legal effect of the evidence. For an understanding of these issues an outline will be given of the material evidence with such further detailed statement, in connection with each issue, as may be necessary to develop the situation.
Prior to February 11, 1898, Ehrhardt D. Franz died testate in St. Louis, Mo., leaving an estate consisting (besides household goods and a small amount of cash) of (1) an undetermined interest in bonds, inventoried at $2,543.50; (2) bonds, inventoried at $24,-750; (3) shares in various corporations, valued at $55,185; (4) notes, inventoried at $14,307.50; (5) insurance, inventoried at $1,000; (6) thirteen pieces of real estate. The residuary portion of his will was as follows :
“The rest, residue and remainder of my estate, whether real, personal or mixed property, I give, bequeath and devise unto my beloved wife Sophie Franz, for and during the period of her natural life.
“After the termination of the life estate of my wife, I give, bequeath and devise the remainder in equal shares, share and share alike, unto my children, Minna, Johanna, Ehrhardt, Ernest, Amanda, Gustav, Walter, Otto, Henrietta and Adelheide, and unto their heirs and assigns forever.”
The estate was administered; the executrix discharged on March 10, 1900; and the residuary assets turned over to the wife (Sophie Franz) who was then 59 years old.
Among the assets of the estate turned over to Sophie Franz (in 1898) were 210 shares of the American Arithmometer Company. Thereafter, that company declared stock dividends of a like amount and, still later, the Burroughs Adding Machine Company acquired the assets and business of the Arithmometer Company and exchanged 4,-200 of its shares for the above 420 shares in the Arithmometer Company. All of this took place by 1905.
January 30, 1909, Sophie Franz executed a trust agreement with G. A. Franz (one of the sons) and G. A. Buder (who had been counsel for the deceased, the estate, and later, of Mrs. Franz).. This instrument conveyed from her to Franz and Buder, as trustees:
“All her right, title and interest of every kind and nature of, in and to the following described stocks, bonds, notes, mortgages, deeds of trust, obligations, securities, and assets now held, owned and controlled by her in her own right as her absolute property, or as life tenant under the last will and testament of E. D. Franz, deceased, to which reference is hereby made, or whether held, owned or controlled in either one or both of said capacities and more particularly described as follows, to wit: * *
“3. Forty-two hundred (4200) shares of the capital stock of the Burroughs Adding Machine Company, evidenced by certificate No.-, issued to Sophie Franz, said certificate including and embracing two hundred ten (210) shares of the capital stock of the American Arithmometer Company of St. Louis, Missouri, of the par value of one hundred dollars ($100.00), per share, inventoried as part of the estate of E. D. Franz, deceased; the said American Arithmometer Company having changed its name to Burroughs Adding Machine Company, and being now located in the city of Detroit, Michigan, reference being hereby made to the inventory of the estate of the said E. D. Franz, deceased. * * *
“7. Any and all other assets, securities, bonds, stocks, notes) mortgages, deeds of trust, collaterals, commercial paper, or other obligations received, acquired, held or owned by the undersigned, under and by virtue of the last will and testament of Ehrhardt D. Franz, deceased, dated August 9th, 1897, and duly filed and admitted to probate in the probate court of the eity of St. Louis, Missouri, said court having jurisdiction of said estate, said will appearing of record in the recorder’s office, of said city of St. Louis, Missouri, in Book No. 1441, page 443, to which said last will and testament reference is hereby made, and the same by such reference for all necessary purposes made part thereof.”
The powers of the trustees were to collect and recover:
“All profits, and income, dividends, interest, earnings, and principal of the said stocks * * * or other assets, * * * and shall have and are hereby given. and granted full power and authority, so far as is possible under the will and testament of said Ehrhardt D. Franz, deceased, to sell, assign, exchange, transfer, convey, mortgage, pledge, incumber, or otherwise dispose of any or all of the said stocks, bonds, notes, obligations, mortgages, deeds of trust, collaterals, and securities, and the principal and proceeds thereof to them hereby transferred, assigned, conveyed and delivered, whenever in their judgment they deem it proper to do so,-upon such terms, conditions, and provisions as they may deem best and for the best interests of the trust estate of the undersigned hereby created.
“In ease of such conveyance, transfer, assignment, exchange, or other disposal of any of the assets, or any part of the assets, to them hereby conveyed, assigned, transferred, and delivered, they shall have and are hereby granted full power, right, and authority, and are hereby empowered, directed and authorized to invest and reinvest the proceeds of any such sale, transfer, or exchange, including principal, in such manner and in such form and securities as they may deem proper and for the best interests of said party of the first part and the trust estate hereby created.”
Also they were empowered:
“To expend, disburse, retain, and pay out of said trust estate and funds, any and all assessments, charges and taxes, ■whether general or special, attorneys’ fees, outlays, compensation, charges and costs of administration, necessary, incident or essential to and for the care, protection, preservation, administration, management and distribution of the assets hereby conveyed or hereafter acquired and are authorized and empowered to make, create, and pay all necessary debts, expenses and outlays for repairs, betterments, or improvements, which they may deem necessary or proper for the protection, preservation, improvement, sale or transfer of any and all real estate of which they may become owners as such trustees, whether acquired by foreclosure or otherwise, and are authorized and empowered to make any and all such other payments, outlays, and expenditures as they may deem necessary, expedient or proper for the protection of such real estate and the assets of such trust estate.”
Certain disbursements to Mrs. Franz and to the children (or their heirs) were provided for as follows: $4,000 annually “shall” be paid to Mrs. Franz “providing the income, rents, earnings, and profits of the estate which they may hold and securities hereby conveyed, admit of such payments being made,” with the power, in named emergencies, to “in their discretion increase said quarterly payment to her to such an amount, and for such time and upon such terms and conditions as they may deem best and proper”; after these payments to Mrs. Franz, the trustees “may pay” $625.00 quarterly to each of the ten children (or the heirs thereof) but:
“In the event the earnings, income, rents, receipts and profits received by said trustees are not sufficient to admit of such payment quarterly to each of the distributees above named and cannot be conveniently made, then the said trustees, after so making payment to said Sophie Franz, of one thousand dollars ($1,000.00) quarterly, or such other sum as they may deem necessary as aforesaid may pay to each of the said distributees such sum as they may deem proper, but in no event and under no circumstances shall the said payment encroach upon or impair the principal and assets of the trust estate hereby created.”
The instrument provided, also, that semiannual statements of the condition of the trust estate should be made to Mrs. Franz and:
“If it appears from the statement of said trustees that there remains on hand any earnings, income, rents, receipts and profits from the said trust estate, which have not been drawn by or set aside, or paid out for account of said Sophie Franz, or to the distributees above mentioned or otherwise expended as herein provided, such sums shall be invested and become and remain as part principal of said trust estate hereby created.”
The payments were to be made to Mrs. Franz during her life:
“And upon her death all these stocks, bonds, notes, collaterals, commercial paper, mortgages, deeds of trust, securities or other assets to them hereby conveyed or hereafter acquired or by them held, owned or controlled as such trustees, and any and all real estate by them acquired as such trustees, shall be held by them for account of the estate of said Sophie Franz, to be administered by the probate court of the city of St. Louis, Missouri, in accordance with the last will and testament of said Sophie Franz, and in accordance with the laws of the state of Missouri in such ease made and provided.”
The trustees were required to employ “Buder & Buder as their counsel and attorneys in the management and administration of said estate” and to appoint Oscar E. Buder (member of Buder & Buder) as the successor of either trustee. The certificates of stock in the Burroughs Company (and in two other companies — 30 shares of the Germania Savings Institution and 50 shares of the Third National Bank of St. Louis, Mo.) were to remain in a designated safety deposit box which could not be opened unless Mrs. Franz and both trustees were present-^he to have no power to remove any of such stock without “the consent and in the presence of both of said trustees.” What was to be done with other securities or valuable papers is not designated although 300 shares in two other companies and 20 bonds ($1,000 each) are described therein. Also an irrevocable power of attorney given the trustees to vote the Burroughs, Germania and Third National stock at all stockholders’ meetings and for all purposes — nothing said as to the stock in other companies. There was no requirement that any bond be given by the trustees.
About sixty days after this trust deed was executed, Ehrhardt W. Franz (one of the sons) brought an action in the state court, at St. Louis, Missouri, attacking the validity of the trust agreement, seeking to have it set aside, a receiver appointed and for other relief. The decree therein sustained and construed the trust agreement and required the trustees to give a bond of $100,000 “for the use and benefit of any and all parties interested in said trust estate” and to charge the cost and expense thereof to the trust estate.
Thereafter, dissention arose between Ehrhardt W. Franz (one of the sons) and the trustees which resulted in this suit. The parties defendant were Mrs. Franz, the trustees, the six children then living and the heirs, guardians of heirs and administrators (or executors) of three children who had died after the father, Ehrhardt D. Franz. The amended bill sets forth that the trust estate, coming from the estate of the father, exceeds three million dollars in value and includes 31,-500 non-par shares and 7,875 preferred shares in the Burroughs Adding Machine Company besides other stocks, bonds and securities; that the bond of $100,000 is “wholly inadequate in amount”; that the trustees refuse to give plaintiff “any information or account” concerning the “present nature, condition, extent and value of the various properties taken by them as aforesaid from the life tenant”; that the trustees are asserting and contending that “plaintiff no longer has or owns his said remainder interest in said properties.” The prayer is for disclosure and accounting, for restraint in disposing of the Burroughs stock, for a bond to plaintiff to protect his remainder interest, for an adjudication of the vested interest of plaintiff, and for general relief.
The administrator of the estates of Ernest H. Franz and of Walter G. Franz (two deceased sons) and the guardians ad litem of several grandchildren (heirs of deceased children of Ehrhardt D. Franz) answered, praying substantially the same relief as sought in the amended bill.
Answers were filed by G. A. Buder (one of the trustees), jointly by Mrs. Franz and the trustees, G. A. Franz and G. A. Buder, by the other defendants jointly. In so far as the issues presented on this main appeal are involved, those answers were as follows: First, that the action was premature because the parties seeking relief have, until the death of Mrs. Franz, “no right to the possession or enjoyment of any remainder interest, if any he has, and no right to have the amount or value of such interest, if any, determined or ascertained.” Second, denies the right of such parties to “demand any security.” Third, denies any duty to furnish any information or account. Fourth, estoppel to assail trust agreement and bound thereby because of receipt of payments thereunder. Fifth, that the decree in the state court suit found that “any and all stock dividends were part of the earnings, usufruct, profits and income of said estate to which the life-tenant was entitled in her own right,” which made the interest of the children res adjudieata. Sixth, estoppel because of agreements made January 7 and 30,1920. Seventh, the parties seeking relief have “no interest, remainder or otherwise, under the will of * * * Ehrhardt D. Franz” because of certain advancements and payments in excess of the value of their shares in the estate of Ehrhardt D. Franz, deceased.
The decree herein determined that the increase of Burroughs stock (as well as certain other property) belonged to the corpus of the residuary estate of Ehrhardt D. Franz, deceased; that the plaintiff had a one-tenth vested right, as remainderman under the will (the complaining defendants having similar rights); that such remaindermen will be entitled to possession thereof upon the death of Mrs. Franz, the life tenant; that the trustees file, within 30 days, a complete statement, under oath, of the property coming to their hands and their administration thereof, and, thereafter, render semiannual statements to the parties here asking relief; that the trustees, within 30 days, give bond for $500,000 for the “joint and several” protection of the parties here asking relief, said bond to be additional to the existing bond for $100,000 and the cost thereof to be paid by or charged to such parties. Jurisdiction was expressly retained to order an accounting and for other necessary orders and decrees. The costs of this proceeding to be paid by the trustees and charged “to the trust estate.”
Issues on Main Appeal.
Appellants argue here five matters. One is a matter of procedure — that this aetion is prematurely brought. Two are urged as a bar to recovery — res adjudieata and estoppel. Two have to do with the merits of the aetion on the main facts — the increase of Burroughs Company stock is income and, therefore, the property of the life tenant and the intent of the testator, Ehrhardt D. Franz.
Premature Aetion.
This contention is that while the life tenant survives, there can be no aetion to adjudicate title of the remaindermen or to protect the remainder estate. The present aetion does not involve nor seek to affect the enjoyment of possession or other rights of the life tenant. Its sole purpose is to protect from spoliation and loss property which is in possession of the life tenant, but alleged to belong to the estate coming to the remainder-men (with absolute right of possession upon death of the life tenant), and, as to which, the life tenant is entitled only to the income therefrom. Therefore, the legal issue is whether a remainderman is entitled to equitable relief to have protected property belonging to him in the rightful possession of the life tenant who is entitled to the income, for life,- therefrom. As a necessary incident to sueh relief (if allowable), the remainder-man must prove that he is such as to the property involved but this is not, a proceeding where the only or main purpose is to have the title of the remainderman adjudicated — it is a bona fide action to protect a remainder estate alleged to exist.
Appellants rely upon several state cases and the following eases in the Supreme Court or in inferior federal courts: Williams v. Hagood, 98 U. S. 72, 25 L. Ed. 51; Marye v. Parsons, 114 U. S. 325, 5 S. Ct. 932, 962, 29 L. Ed. 205; Singer Mfg. Co. v. Wright, 141 U. S. 696, 12 S. Ct. 103, 35 L. Ed. 906; United States v. Evans, 213 U. S. 297, 29 S. Ct. 507, 53 L. Ed. 803; Muskrat v. United States, 219 U. S. 346, 31 S. Ct. 250, 55 L. Ed. 246; Arnold v. Garth (C. C.) 106 F. 13; Pluche v. Jones (C. C. A.) 54 F. 860; Preston v. Smith (C. C.) 26 F. 884. The Williams and Marye Cases involved the validity of state statutes relating to securities issued by the state and in each the court said that no existing or threatening injury was alleged and, therefore, the issue presented was purely abstract and courts would act only- upon legal rights actually in controversy. The Singer and Evans Cases were refused determination because the issues therein were purely moot. The Muskrat Case refused decision because the issue was not a justiciable controversy. The Arnold and Pluche Cases held merely that a statute of limitations did not begin to run against a remainderman until his right to possession accrued. The Preston Case (being, a ruling on demurrer to a bill) held the aetion was “more like an effort to establish a doubtful title than a proceeding to protect from serious wrong a clear or adjudicated title” (page 889), and that “only upon an adjudicated or a clear title will a court of equity issue an injunction to restrain waste” by the life tenant. Thus, it appears that none of the above eases are applicable here nor are any statements in the opinions therein except those above quoted from Judge Brewer in the Preston Case. Those expressions clearly imply that, at least under certain circumstances, sueh right of aetion would exist during^the life estate.
However, the matter is not in doubt. In Cross v. Del Valle, 1 Wall. 5, at page 15,17 L. Ed. 515, the court said:
“A remainderman may have a decree to protect the estate from waste, and have it so secured by the trustee as to protect his estate in expectancy. The court will interfere under all needful circumstances to protect his rights, but sueh eases do not come within the category of mere declaratory decrees as to future rights.”
Undoubtedly, the same rule prevails in the state courts. See 23 E. C. L. 5791, where it is said:
“One who has a vested remainder in land has a right to protect the estate, so that he may receive the same when it ought to come to him by the terms of the limitation, and may maintain a proper action for any injury to the inheritance, committed or threatened, whether by the tenant in possession on by a stranger.”
Also, at page 580, it is said:
“While a court of equity will not maintain a bill merely to declare future rights, it will interfere in all needful cases to protect the rights qf remaindermen.”
Again, at page 581, the right of the remainderman to require security bond and accounting (the relief here sought and accorded by the trial court) is stated as follows:
“Formerly it was the practice to exact from the tenant for life security that the property should be forthcoming on the happening of the contemplated event. This seeurity is still required in exceptional eases. But, before security for the forthcoming of the property at the termination of the life estate will be required, the remainder-man must have reasonable grounds to apprehend the loss or removal of the property, or that his rights are in danger.
“139. Filing of Inventory. Unless the remainderman can show some necessity for exacting security, the only remedy which he now has is to require the tenant to make an inventory which shall show the property which he received, and to which the remainderman will become entitled upon the termination of the particular estate. And, though an inventory has been filed, the tenant, upon a proper showing of real danger, may be called on to account and be required to give bond.
“140. Seizure and Impounding of Property. The property may also be seized and impounded for the protection of the remainderman. Should the tenant attempt to sell, or in any other mode waste or misuse the property, so as to threaten its destruction, the court may impound it, that is, take it into the hands of the court, by its officer,- and give the first taker the profits. The practice is to require, security for the lawful use of the property during the life estate, and if this is not given, then pursue the mode of seizing upon the property.”
Also in 21 C. J. at page 996, § 153, it is said:
“Since a remainderman has only an estate to vest in possession in futuro, he is entitled neither to actual nor to constructive possession of the property until the termination of the particular estate. He may however bring an action in equity during the lifetime of the life tenant to preserve the property, and, without taking actual possession to complete his title, he is entitled to all the remedies which may be necessary to protect and enforce his right at law.”
Again, at page 1013, § 172, it is said:
“Where the property is in the hands of a trustee any breach of trust or improper conduct on the part of the trustee is a ground for equitable relief, and where a trust deed has been set aside under a decree fraudulently obtained, the remainderman may maintain a bill to have the property restored to the original trust. If the trustee is already under a valid and'sufficient bond to protect the remainder interest, the remainderman is not entitled to any other relief; and the remainderman cannot, during the continuance of the" life estate, sue on the trustee’s bond to recover any part of the amount wasted, although he could proceed in equity to compel the trustee to bring the money into court to be invested. The remainderman may maintain a suit for the appointment of a new trustee and for an accounting.”
Also at page 967, § 105, it is said:
“Bight to Equitable Belief in General A remainderman or reversioner unless barred by laches, is entitled to come into equity by a bill quia timet for the protection of his interest when the property in the hands of a life tenant is in danger of loss, deterioration or injury, or when the life tenant is claiming a right to the property adverse to that of the remainderman.”
Also, at page 967, section 106 states that, under certain circumstances, injunction may be employed to protect the remainder estate; page 968, section 107, that accounting may be had; page 968, sections 108 and 109, that sequestration and a receiver are sometimes proper. The above statements in Ruling Case Law and in Corpus Juris are based upon abundant citations from various state courts — to which may be added later citations as follows: Abbott v. Wagner, 108 Neb. 359, 188 N. W. 113, 121; Ivey v. Lewis, 133 Va. 122, 112 S. E. 712, 716; Newport v. Hatton, 195 Cal. 132, 231 P. 987, 994; Commercial Building Co. v. Parslow (Fla.) 112 So. 378, 381; Huey v. Brock, 207 Ala. 175, 92 So. 904, 905; Powe v. Payne, 208 Ala. 527, 94 So. 587; Colburn v. Burlingame, 190 Cal. 697, 214 P. 226, 27 A. L. R. 1374; Hodgman v. Cobb, 202 App. Div. 259, 195 N. Y. S. 428; In re Niles, 122 Misc. Rep. 17, 202 N. Y. S. 475; Thomas’ Adm’r v. Thomas, 220 Ky. 101, 294 S. W. 776. The last four eases deal with protecting bonds.
This record leaves no doubt that these trustees, the life tenant and several of the remaindermen are denying any right or interest of plaintiff to any property in the possession of the trustees and especially to the increases of stock in the Burroughs Company. Also, all of the property is in the form of securities which might be easily disposed of. These securities are eoneededly worth more than $4,000,000, yet the trustees are under a bond of only $100,000. Also, the trustees have always refused to give plaintiff any inventory or accounting and persistently deny his right to'sueh. Also, the trust agreement provides that, on the death of Mrs. Franz (now more than 83 years old), all of the property “shall be held by them for account of the estate of said Sophie Franz, to be administered by the probate court of the city of St. Louis, Missouri, in accordance with the last will and testament of said Sophie Franz, and in accordance with the laws of the State of Missouri in such case made and provided.” If this quoted provision were followed, aU of this property would be subject to various taxes, fees and costs (in course of such administration) which should not attach to any of such property belonging to the remaindermen because such would be deliverable direct to them by the trustees, upon termination of the life estate, and would not pass through the administration of the estate of Sophie Franz.
The above discussed law leaves no doubt that equity does afford, during the life tenancy, remedies for remaindermen to protect their estates and the above facts make it-equally clear that a situation is here present justifying the use of such remedies at this time. Therefore, the suit was not prematurely brought.
Res Adjudicata.
Appellants contend that the decree (June 16, 1910) in the state court suit brought by plaintiff, shortly after the trust agreement was made; determined that “the stock dividends and other increases” in the property belonged to the life tenant and not to the remaindermen. The supporting argument takes two lines.
The first is that the fourth finding of that court was that Sophie Franz was entitled to all of such increases. That finding is as follows:
“4. The court doth further find that under and by virtue of the terms of the will of said Ehrhardt D. Franz, deceased, the defendant Sophie Franz, during her natural lifetime, became and was and is entitled to all of the usufruct and benefit of all of the property of said deceased and to all of the income, profits and earnings thereof, in her own right and absolutely.”
Standing alone, this language is far from meaning that increases in the corpus of the estate, as distinguished from income therefrom, is the property of the life tenant. Nor do the words “profits and earnings,” used in conjunction with “income,” suggest such a meaning. The obvious meaning of the entire paragraph is that Sophie Franz is entitled to the revenue produced by the estate, in the nature of income. But even supposing the paragraph were ambiguous and, taken alone, might have either of the above meanings, yet the issues presented to the. court and the entire decree leave no doubt.
The petition therein was an attack upon the trust agreement as being contrary to the rights of plaintiff under the will because it turned over to trustees property which would, at the end of the life estate, belong to the remaindermen and in which they had a present vested interest; also, that this property was being managed and wasted by the trustees without information or accounting to the remaindermen and without “being amenable to the plaintiff and the other remaindermen named in the said will by any bond or security whatever.” It set forth that G-. A. Buder (trustee) was denying that plaintiff had “any vested interest in the said property” and that plaintiff was the owner of “a one-tenth vested interest in the corpus of the aforesaid property.” The prayer was for cancellation of the trust agreement and delivery of the property to a receiver; that the court construe the will and determine the rights and interests of the parties named therein and “whether their interests became contingent or vested at the death of the aforesaid testator”; and for general relief.
A joint and separate answer was filed by the trustees and other defendants (Mi's. Franz and other of her children). This answer alleged that Mrs. Franz owned absolutely considerable property which did not come from her husband’s estate or which “had been acquired by her out of income which was hers.” Further answering:
“These defendants say that at the time that she executed said instrument of January 30, 1909, defendant Sophie Franz was possessed in her own exclusive right as aforesaid of certain property and had a life estate and life interest in the property derived by her from the estate of her said deceased husband, and that the object and purpose of said instrument was to transfer to her son, the defendant G. A. Franz, and to defendant Buder, all such interest, right and title as she might and could properly and lawfully convey; that she intended to convey, and by said instrument did convey, to said two named defendants all of her said life estate, and no more, in the property so derived from her said deceased husband, and the absolute title to the property owned by her in her own exclusive right; that her object and purpose was to. enable said two named defendants to distribute the income of all of said property,- that in which she had but a life estate and that which belonged to her absolutely, between herself and her nine children, including the plaintiff, and her two grandchildren, the minor defendants herein. That in order to accomplish such purpose, she provided that $4,000 annually should be paid to her in quarterly installments and that $2,500 annually, in like installments, should be paid to each of her said children and to the defendant Sherman H. Kleinschmidt for said grandchildren. That she expressly, however, provided that in making such distributions there should be no encroachment on or impairment of the principal assets thus conveyed to said two defendants. That she intended by said conveyance to provide, and she did provide, that on her death so much of said property as belonged to her absolutely and exclusively should be disposed of in accordance with her last will and testament and that so much of said property as was not hers exclusively and absolutely should be disposed of in accordance with the laws of Missouri in such case made and provided. * ® *
“Defendants deny that said instrument attempts to dispose of any part of the estate of E. D. Franz, in contravention of his will, and deny that said defendant Buder has denied that the remaindermen have any interest in said property and has denied them or plaintiff any information to which they or he is entitled; also deny that said defendant Buder has declared that the remaindermen have no voice in the management, control or preservation of said property; but in that connection state that the said Buder has maintained, and these defendants also maintain, that the management and control and preservation of the property coming from the estate of said E. D. Franz is in defendant Sophie Franz or her grantees or assigns, during her lifetime, and that in any property acquired by her out of the income, the sole and exclusive management is in her and in her grantees or assigns, and that the remaindermen have no interest whatever in such last mentioned property.
“Further answering, these defendants say that defendant Sophie Franz had the) power and the right to execute said instrument of January 30,1909, as to the property in which she had a life estate, to the extent of her life interest, and had the right and the power to deliver said property to defendants Buder and Franz, to be held by them for and during the period and lifetime of the said Sophie Franz; and that as to property which belonged to said defendant Sophie absolutely and exclusively, she had the right to turn over and deliver the same to said defendants G. A. Franz and Buder without any limitation or restriction whatsoever.
“Further answering that part of the petition wherein plaintiff claims to have a vested interest in the property aforesaid, to the extent of at least $45,000, these defendants state that an undivided one-tenth interest in the estate left by said E. D. Franz, subject to the life estate of said defendant Sophie Franz, does not exceed the amount of $10,000; and that as a matter of fact, plaintiff has already received and accepted, by way of payments on account of his remainder interest, from defendant Sophie Franz, amounts exceeding in the aggregate $20,000.
“Further answering, these defendants say that none of the property whatsoever which was left by E. D. Franz, deceased, has been injured, wasted or destroyed; deny that there ever has been any threat on the part of defendant Buder or on the part of any defendant herein to injure, waste or destroy any part of said property whatsoever; deny that it is intended by said defendant Buder or by any of the defendants, to injure, waste or destroy any of said property whatsoever. On the contrary, these defendants aver that all of said property, has been well and earefully preserved and is so invested and so- managed that upon the death of defendant Sophie Franz and upon the termination of her life estate, any and all property in which plaintiff may then be interested will be forthcoming.
“Further answering, these defendants state that the defendants Sophie Franz, G. A. Franz and Gustavus A. Buder are each and all of them entirely solvent and fully able to respond to any right or claim which plaintiff herein may at any time be able to establish in the property left by the said E. D. Franz upon his decease.”
The answer closed with:
“Wherefore these defendants say that plaintiff should not now be permitted to question the right of said defendant Sophie Franz to the possession of the property given her for life by the last will and testament of her said deceased husband.”
In so far as the point now being discussed is concerned, the findings of the court were that the remaindermen had “a vested remainder” in the residuary property coming from the estate of Ehrhardt D. Franz; that Mrs. Franz was entitled to the income therefrom for life; that this property and other property, belonging absolutely to Mrs. Franz, was turned over to the trustees; that, as to the former, she conveyed to the trustees “only her life interest therein and no greater or other interest” but, as to the latter, she conveyed her entire title; that as to the estate property, the trustees had no power to dispose of any but her life interest; that, on her death, the estate property “should be divided between the plaintiff and the children named in the will of said Ehrhardt D. Franz * * * in accordance with the terms and provisions of said will” and her absolute property “in. accordance with her last will and testament, or if she should die intestate, then under the statutes of descents and distributions of the state of Missouri.” The findings and decree were included in one order. Th.e decree part followed the findings with a possible ambiguity as to a matter not pertinent to this point.
From the above it is clear that no issue was presented to the eourt as to whether the increase in Burroughs stock or from any other property belonged to Mrs. Franz nor as to what particular property the rights of the remaindermen attached. The issue was broader and more general. It was whether there was any property to which such rights attached and whether such rights were contingent or vested. The findings and decree determined this issue by holding that there was such property (without any particularization) and that the rights of the remainder-men were vested.
Appellants contend that the use of the words “usufruct,” “benefit,” “profits” and “earnings,” used in the state eourt decree, carry a meaning which is larger than “income” and cover the exchange and increases of Burroughs stock. Even if the issues in that
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KRUPANSKY, Circuit Judge.
This case originated as a compliance action initiated in 1977 by the United States, at the request of the Environmental Protection Agency (EPA), against the City of Detroit (Detroit), the Detroit Water and Sewerage Department (DWSD), and the State of Michigan (Michigan), predicated upon defendants’ alleged discharge of effluents and pollutants from wastewater and sewage facilities into navigable waters in violation of the Federal Water Pollution Prevention and Control Act, 33 U.S.C. § 1251 et seq. (FWPCA). On September 11, 1977 a Consent Judgment was entered mandating compliance by defendants in such matters as financing, use charges, industrial cost recovery, local capital cost funding systems, industrial waste control, staff training, operation and maintenance, facilities planning, sludge disposal, secondary treatment, phosphorous removal, effluent limitations, reporting and other miscellaneous matters. Specific dates for compliance in each area were incorporated into the judgment.
By October 1978, defendants had failed to comply with various provisions of the Consent Judgment and the district court appointed a monitor to study the operation of the Detroit sewer facilities and recommend to the court viable remedies. After receiving the monitor’s report and subsequent to extensive hearings in February and March of 1979, the district court determined that Detroit had failed to comply with the Consent Judgment. The Mayor of the City of Detroit was appointed Administrator for the Detroit wastewater treatment facilities and empowered to control, manage and operate the plant so as to achieve compliance with the Consent Judgment at the earliest possible date. United States v. City of Detroit, et al., 476 F.Supp. 512 (E.D.Mich. 1979).
In April 1980, the consent judgment was amended after a separate action was initiated against the City of Detroit by the United States which prayed for relief from Detroit’s alleged violations of the Clean Air Act, 42 U.S.C. § 7401 et seq. In the detailed Amended Consent Judgment defendants committed themselves to achieve compliance with the provisions of the Clean Air Act and the FWPCA, principally through construction of treatment facilities. At a hearing conducted on July 6, 1981, the district court was informed that funds in the amount of approximately $100 million would be required to construct major capital improvements at the wastewater treatment facility and thereby achieve compliance with the Amended Consent Judgment. The Court was further advised that defendants did not have sufficient state or local monies to fund the projects.
In August, 1981, the City of Detroit filed a “Petition to Reallocate Unobligated (Un-rescinded) Grant Funds and/or for Instruction Re Consent Judgment Mandated Projects”, effectively requesting the district court to either reserve federal funds for Detroit or else grant relief from the Amended Consent Judgment. An understanding of this motion necessitates familiarization with various federal and state statutory frameworks which are discussed seriatim.
Title III of the FWPCA, 38 U.S.C. §§ 1311-28, establishes pollutant limitations and provides for EPA enforcement thereof. Title II of FWPCA, 33 U.S.C. §§ 1281-97, authorizes the issuance of federal grants for the construction of treatment works. It is fundamental that Title III compliance may be sought by the EPA without a corresponding conditioning of Title II grant funds. State Water Control Board v. Train, 559 F.2d 921 (4th Cir.1977).
Reduced to its essentials, Title II, Grants for Construction of Treatment Works, authorizes the Administrator of the EPA to issue grants for construction of treatment works. 33 U.S.C. § 1281(g)(1). Annually each state is “allotted” a certain percentage of that fiscal year’s appropriations. 33 U.S.C. § 1285(a). The allotment percentage of the total federal fiscal appropriation reserves to each state a sum certain for various environmental projects. A state is precluded from utilizing allotted funds, however, until such funds have been “obligated” by the Administrator. Congress has defined the procedure by which obligation may be effected. An applicant for a federal grant must initially submit to the Administrator for approval various plans, specifications, and estimates for each proposed treatment works project. 33 U.S.C. § 1283. Before approving a grant for any proposed project, the Administrator “shall determine”, inter alia, (1) that such works have been certified by the appropriate State water pollution control agency as entitled to priority over other State projects, (2) that the applicant has agreed to pay the non-federal costs of the project (generally 25%) and has made adequate provision for assuring proper and efficient operation of the facility in accordance with a plan of operation approved by the State water pollution control agency, (3) that the size and capacity of such works relates directly to the needs to be served by such works, in-eluding sufficient reserve capacity and (4) that no specification for bids in connection with such works has been drafted in a manner as to contain proprietary, exclusionary, or discriminatory requirements. 33 U.S.C. § 1284(a). The Administrator may not apProve a grant unless it is first determined that the applicant (A) adopted or will adopt a system of charges to assure that each recipient of waste treatment services will Pay its proportionate share of the costs of operation and maintenance, and (B) has legal, institutional, managerial and financial capability to insure adequate construction, Ration and Jrea“ 33 Uf'C' § 12M^A} Z* ^ Als0’the ^ant raust Pr0Vlde that the en^ neer or engmeermg firm supervising construction or providing architect engineering services during construction shall continue its relationship to the grant applicant for a Period of one year aft®rithe f“Pletlon °f construction. 33 U.S.C. § 1284(d)(1). One year after the completion of construction owner and operator of such treatment works must certify to the Administrator kkLe completed treatment works conforms to the desi£n. specifications and ef^uerd limitations incorporated into the £rant agreement and permit. 33 U.S.C. § 1284(d)(2). In sum, allotted monies become obligated only when an application is made to the EPA> the state certifies the ProJect as one of Priority, and the EPA aPProves the application after ascertaining that criteria mandated by the Congressional enactment have been satisfied,
Allotted Title II funds are available for obligation for a period of one year. The Administrator is under a statutory duty to reallot unobligated funds to the other states at the expiration of the fiscal year:
Any sum allotted to a State under subsection (a) of this section shall be available for obligation under section 1283 of this title on and after the date of such allotment. Such sums shall continue available for obligation in such State for a period of one year after the close of the fiscal year for which such sums are authorized. Any amounts so allotted which are not obligated by the end of such one-year period shall be immediately reallotted by the Administrator, in accordance with regulations promulgated by him, generally on the basis of the ratio used in making the last allotment of sums under this section. * * *
33 U.S.C. § 1285(b)(1) (emphasis added). Regulations also require the Administrator to “immediately reallot” the funds to the other states to the total exclusion of the state from which the unobligated funds originated. 40 C.F.R. § 35.2010(b).
Michigan has promulgated legislation to provide procedures for establishing the priority of eligible projects and for certifying projects for an allocation of grants for treatment works construction. The Michigan Water Resources Commission (Commission) is statutorily required to promulgate rules to establish the priority of proposed treatment works projects based upon a system which will satisfy the requirements of FWPCA. M.C.L.A. 323.122(2). In accordance with these rules, the Commission assigns a priority rating to each grant applicant. M.C.L.A. 323.126(3). A “priority list” or “project list” is then submitted by the Commission to the Michigan legislature for approval. M.C.L.A. 323.126(4). Upon approval, the projects appearing on the priority list are certified by the Commission to the administering federal agency (EPA) for potential federal obligation of Title II grants. Id. The projects on the certified priority list collectively request an amount equal to or less than the federal monies allotted to Michigan for the fiscal year and are therefore deemed “fundable”. In the event that a fundable project is unlikely to achieve an obligation of allotted federal funds prior to the expiration of the fiscal year, Michigan will “by-pass” that project in favor of the next priority project which can be timely funded through obligation of available grants. This enables Michigan to utilize all of its allotted funds and forecloses reallocation of otherwise unobligated funds to other states at the end of a given fiscal year.
In August, 1981, the City of Detroit filed with the court a “Petition to Re-allocate Unobligated (Unrescinded) Grant Funds and/or for Instruction Re Consent Judgment Mandated Projects.” Various hearings were conducted by the district court in September and November, 1981. At that time approximately $35 million allotted grant funds were still available for EPA obligation but, although Detroit’s projects were of priority and therefore in the funda-ble range, it was apparent that Detroit would be unable to timely satisfy the criteria necessary for EPA obligation by the expiration of FY 1981 (September 30,1982). On March 16, 1982, the district court entered an Order reserving the allotted but unobligated funds for Detroit:
As reflected in this schedule attached hereto as Exhibit D, it is expected that Detroit will not have submitted to MDNR by September 30, 1982, applications for the full amount of the funds available to Detroit. Accordingly, it is expected that the full amount of the funds available to Detroit will not have been obligated by September 30, 1982. Notwithstanding the above, it is the intention of this Order that any portion of the funds available to Detroit not obligated to Detroit by September 30, 1982, remain available to Detroit for the projects contained in Exhibit C (as modified by Exhibit D) and that no portion of such funds shall lapse or be otherwise allocated, re-allocated, obligated or de-obligated by EPA or MDNR without further order of this Court.
(b) Unless otherwise provided by Congress, all sums allotted to a State under Section 205 of the Act shall remain available for obligation until the end of one year after the close of the fiscal year for which the sums were authorized. Except as provided in § 35-2020(a), sums not obligated at the end of that period shall be immediately reallotted on the basis of the same ratio as applicable to sums allotted for the then-current fiscal year, but none of the funds reallotted shall be made available to any State which failed to obligate any of the fiscal year funds being reallotted. Any sum made available to a State by reallotment under this section shall be in addition to any funds otherwise allotted to such State for grants under this subpart during any fiscal year and the reallotted funds shall be treated in the same manner as the most recent allotment.
On the date of entry of this Order, Congress had not appropriated any funds for FY 1982. This order thus assured availability of monies to Detroit after the expiration of FY 1981 in the event the federal government abandoned or suspended future Title II appropriations. The March 16, 1982 Order served to effectively enjoin Michigan from implementing its by-pass system so as to ensure full utilization of its allotted funds prior to the expiration of FY 1981, and it enjoined the EPA from reallotting Michigan’s unobligated funds to other states at the expiration of FY 1981 in violation of the expressed Congressional intent.
On July 19,1982, PL 97-216, a fiscal 1982 federal supplemental appropriation law, was enacted, from which approximately $97 million was allocated to Michigan. Shortly thereafter, Michigan moved the district court to modify its March 16, 1982 Order asserting that all necessary funding for Detroit projects could be obtained from FY 1982 appropriations. The EPA joined in this motion. The County of Muskegon (Muskegon) intervened to support Michigan’s motion. Muskegon urged that two of its proposed projects (Sullivan Discharge and Muskegon Rehabilitation) assumed priority positions in the fundable by-pass range. Muskegon served interrogatories upon the EPA and Michigan the answers to which firmly established that had the Detroit projects been by-passed, Muskegon’s two projects would indeed have achieved obligations of FY 1981 Title II funds. Muskegon expressly challenged the district court’s authority to “lasso” funds for the sole benefit of Detroit. Detroit opposed Michigan’s motion.
On September 16, 1982, 14 days before the expiration of FY 1981, the district court entered an Order denying Michigan’s motion to amend the Order of March 16, 1982, stating summarily that “a modification of that Order would adversely affect DWSD”. On October 7,1982, Muskegon filed a notice of appeal with this Court challenging the district court's September 16, 1982 Order. Michigan has adopted Muskegon’s appellate Statement of Case and Argument. During the pendency of this appeal, the two Musk-egon projects which would have been funded from FY 1981 funds but for the district court’s Orders of March 16 and September 16 were subsequently funded from FY 1982 allocations.. The City of Detroit has moved this Court to dismiss the instant appeal as moot, and the United States has supported the motion.
Confronting the issue of mootness as joined by Detroit, it is initially observed that federal jurisdiction under Article III, Section 2 of the United States Constitution extends only to actual cases and controversies. Board of School Commissioners of the City of Indianapolis v. Jacobs, 420 U.S. 128, 95 S.Ct. 848, 43 L.Ed.2d 74 (1975); Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975). It is fundamental that the federal forum is not empowered to decide moot issues. State of California v. San Pablo & T.R. Co., 149 U.S. 308, 314, 13 S.Ct. 876, 878, 37 L.Ed. 747, 748 (1893); United States v. Alaska S.S. Co., 253 U.S. 113, 116, 40 S.Ct. 448, 449, 64 L.Ed. 808 (1920). An “exception” to Article Ill’s requirement of an active case or controversy is a controversy “capable of repetition, yet evading review”. See generally: Board of Education v. Rowley, 458 U.S. 176, 102 S.Ct. 3034, 3040 n. 9, 73 L.Ed.2d 690 (1982); Super Tire Engineering Co. v. McCorkle, 416 U.S. 115, 94 S.Ct. 1694, 40 L.Ed.2d 1 (1974); Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310 (1911); Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975); Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973). If the plaintiff represents a similarly situated class, then a “controversy” will continue to exist between a defendant and the class even though the claim of the named plaintiff may have become moot. Sosna, supra. In the absence of class certification the “capable of repetition” doctrine is
limited to the situation where two elements combine [ ]: (1) the challenged action [is] in its duration too short to be fully litigated prior to its cessation or expiration and (2) there [is] a reasonable expectation that the same complaining party would be subjected to the same action again.
Weinstein v. Bradford, 423 U.S. 147, 149, 96 S.Ct. 347, 349, 46 L.Ed.2d 350 (1975). Accord: Murphy v. Hunt, 455 U.S. 478, 481, 102 S.Ct. 1181, 1183, 71 L.Ed.2d 353 (1982); Lane v. Williams, 455 U.S. 624, 102 S.Ct. 1322, 1328, 71 L.Ed.2d 508 (1982); Illinois State Board of Elections v. Socialist-Workers Party, 440 U.S. 173, 187, 99 S.Ct. 983, 991-92, 59 L.Ed.2d 230 (1979); Sosna, supra.
To the extent that Muskegon challenged the district court’s authority to “lasso” funds, assigned as “injury” a lack of funding for two projects in the FY 1981 fundable by-pass range, and sought as a remedy a recision of the district court’s Orders reserving Title II funds for Detroit and a corresponding “return” of those monies to Michigan’s general allotment pool, this court concludes that the “controversy” is one which is capable of repetition yet evading review. It must be emphasized that Muskegon expressly challenged in the district court that court’s authority to “lasso” or reserve unobligated funds for Detroit:
[T]he reservation of such funds to the City of Detroit and the DWSD is contrary to the statute, PL 92500 [FWPCA], since they have failed to file proper and sufficient applications for grant funds in such amounts. * * * With all due respect to this Court, it simply does not have authority to obligate sewerage grant monies.
Since the district court’s Orders constituted unequivocal declarations of its authority to “reserve” Title II funds for Detroit, it is obvious that the court’s exercise of authority in future fiscal years is certainly “capable of repetition”. To the extent that Muskegon sought a “return” of unobligated FY 1981 Title II funds to Michigan’s general allotment pool to provide Title II funds for two projects in the FY 1981 fundable by-pass range, the district court’s exercise of authority presented a controversy which “evades review”. The lower court’s Order of September 16 was entered 14 days prior to the expiration of FY 1981 (September 30, 1982). Muskegon alerted the district court to the possible irreparable injury which would result not only to itself but also to Michigan through potential reallocation of the Title II monies to other states:
[T]his defendant believes that if the remaining FY 1981 Sewerage Construction Grants are not obligated to Michigan projects by September 30, 1982, such funds will be re-allocated to other states and, thus, lost to Michigan projects, including those pertaining to this defendant.
As aforenoted, the Administrator of the EPA is statutorily mandated to immediately reallot all unobligated funds to other states at the expiration of the fiscal year. 33 U.S.C. § 1285(b)(1); 40 C.F.R. § 35.-2010(b). Muskegon’s concern, therefore, that irreparable harm would manifest in 14 days was not specious. It was incumbent upon Muskegon to exhaust its legal remedies including appellate review of its charges that the unwarranted impounding of Title II FY 1981 grants by the Court deprived it of funds for its two projects which were within the FY 1981 fundable by-pass range within 14 days. The time constraints applicable to Muskegon in connection with the exhaustion of legal remedies, including appellate review, were too short even when, as here, review was diligently pursued. See: Roe, supra (266 day gestation period); Southern Pacific Terminal Co., supra (2 year injunction). Future exercises of authority by the district court would continue to evade judicial review since the period of review would under no circumstances exceed one year.
There is also a “reasonable expectation that the same complaining party [Muskeg-on] would be subjected to the same action [a similar exercise of authority by the district court] again.” See: Weinstein, supra; Murphy, supra; Lane, supra. Muskegon was an active applicant for Title II funding during FY 1981 and 1982 and is expected to maintain such activity in future fiscal years. Therefore, to the extent that Musk-egon challenged the lower court’s authority, assigned as “injury” lack of funding, and requested a recision of the court’s impounding orders and a return of Title II funds to Michigan’s allotment pool, the controversy is one capable of repetition yet evading review and not moot irrespective of Musk-egon’s receipt of Title II funding from FY 1982 appropriations.
Further, to the extent that Muskegon challenged the district court’s authority to reserve FY 1981 Title II funds for Detroit, and charged on appeal as “injury” an alleged future adverse priority positioning for other proposed projects on Michigan’s FY 1982 priority list, and seeks a declaration that the district court exceeded its authority with its impounding orders, the “controversy” is one which has a continuing adverse impact upon Muskegon and therefore satisfies the “case” and “controversy” criteria of Article III. It is undisputed that several projects on Michigan’s FY 1981 priority list, including Muskegon’s Sullivan Discharge and Rehabilitation projects, would have been funded from FY 1981 Title II appropriations but for the impounding of the remainder of that year’s allotted funds by the district court through its orders of March 16 and September 16, 1982, “reserving” said funds solely for the benefit of Detroit. Several of those priority projects in the FY 1981 fundable by-pass range carried over and assumed a priority position somewhere on Michigan’s FY 1982 priority list. Some of those projects were funded from FY 1982 appropriations thereby depleting the allotments available to other FY 1982 priority projects. This spill-over of fundable FY 1981 projects into FY 1982 served, at a minimum, to alter the positioning and potential funding priority of all projects appearing on the FY 1982 priority list. Particularly, Muskegon not only assumed FY 1982 Priority Nos. 8 and 9 (which projects were funded), but also Priority No. 34 (unfunded). Muskegon was, and continues to be, “injured” by the district court’s challenged exercise of authority. The funding of Muskegon’s Priority Nos. 8 and 9 from FY 1982 Title II funds does not render this controversy moot.
Addressing the district court’s authority to enter the following order,
No portion of such funds shall lapse or be otherwise allocated, re-allocated, obligated or de-obligated by EPA or MDNR without further order of this Court,
it is apparent that the EPA was effectively foreclosed from fulfilling its obligation under 33 UiS.C. § 1285(b)(1) and 40 C.F.R. § 35.2010(b) to immediately reallocate the unobligated funds to the other states at the end of FY 1981. Michigan was effectively precluded from certifying by-pass projects to the EPA to achieve timely obligation of allotted funds and assure that all FY 1981 Title II funds would not be lost by reallocation to other states. Since the district court’s Orders of March 16 and September 16,1982 failed to address, justify or explain the basis of its authority to enter its Orders, we review the justifications urged by Detroit on appeal.
It is urged by Detroit that the district court’s exercise of authority was justified since the EPA initiated this compliance action pursuant to Title III of FWPCA and executed a Consent Judgment with knowledge that compliance would not be possible jn the absence of federal contribution under Title II. However, it is fundamental that the compliance and grant provisions of the FWPCA are not mutually dependent. State Water Control Board v. Train, 559 F.2d 921 (4th Cir.1977). If the federal forum possessed the authority to mandate EPA contributions under Title II in Title III compliance actions, then the EPA would be pragmatically restricted to seeking compliance only in actions where it would guarantee federal funds to effect the compliance judgments obtained. This was patently not the intent of Congress. Train, supra.
Detroit’s argument that EPA had consented to a waiver of “procedural” requirements in the implementation of Title II through execution of the consent judgments is equally misplaced. Initially, it is observed that the EPA, at both the district and appellate levels, expressly challenged rather than consented to the lower court’s authority to “reserve” Title II appropriations. Michigan issued a similar challenge. Nor will this Court characterize the detailed statutory framework appearing in Title II as a mere “procedural” technicality subject to discretionary waiver by the EPA. It is fundamental that an agency charged with implementation of a statutory framework ordinarily possesses no authority to deviate from or abdicate its statutory responsibilities. It is clear that the EPA did not intend to do so in this case, and it is not appropriate for this Court to imply a waiver of a clear statutory duty.
The spirit of cooperation which has been exhibited by both litigants and the district court is commendable. However, the accomplishment of an objective, even if desirable, cannot be justified at the expense of breaching the constitutional separation of power between the three branches of our government — this separation must be scrupulously maintained. Accordingly, Detroit’s motion to dismiss this action as moot is hereby Denied. The district court’s Orders of March 16, 1982 and September 16, 1982 are hereby Vacated, for lack of authority, to the extent that said Orders precluded the allocation, reallocation, obligation or de-obligation of allotted but unobli-gated FY 1981 funds by the EPA or MDNR and retained said funds for Detroit. This cause is hereby Remanded for further proceedings consistent with this opinion.
. In fiscal year 1981 Michigan was allotted approximately 4.1% of the funds appropriated to the various states under 33 U.S.C. § 1284. See: 40 C.F.R. § 35.910(a).
. This regulation states in full:
. See: Michigan Administrative Code, Rules 323.1271 et seq.
. This Court expresses no opinion on the legal issue of whether Michigan, or the other states, are now entitled to the FY 1981 funds or whether some other disposition of the funds is appropriate.
. As aforenoted, class certification may also serve to defeat a finding of mootness. Sosna, supra. See also: United States Parole Commission v. Geraghty, 445 U.S. 388, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980). Although Musk-egon did not move the district court for class certification, it did refer to the interests of similarly situated entities in its briefs before the district court. On appeal, Muskegon has not documented the existence of a continuing controversy between a “class member” and defendants, to-wit, Muskegon has not established the existence of projects in the FY 1981 fundable by-pass range which were not funded from FY 1982 appropriations. This Court, therefore, does not address the issue of mootness within the context of class certification.
. For example, Muskegon’s 1981 Sullivan Discharge and Rehabilitation projects became Priority Nos. 8 and 9 on Michigan’s 1982 priority list.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
MERRITT, Circuit Judge.
In this case, ITT Lighting Fixtures challenges, and the NLRB applies for enforcement of, a determination by the Board that the company violated the National Labor Relations Act, 29 U.S.C. § 151, et seq., on three occasions involving three separate employees. The most important question arises from the Board’s determination that ITT violated Section 8(a)(1) of the Act as interpreted in NLRB v. Weingarten, 420 U.S. 251, 95 S.Ct. 959, 43 L.Ed.2d 171 (1975) when the company denied employee Terry Williams his request to have a fellow employee present at a meeting with several of his supervisors. The Board also found that ITT violated Sections 8(a)(1) and (3) by firing employee Harry Merriweather for supporting the union. Finally, the Board held that ITT had improperly transferred employee Jo Ann Gray to a smaller facility in order to reduce her effectiveness in promoting the union during a union drive.
I. The Williams Suspension
ITT operates a manufacturing plant in Southaven, Mississippi, with about 340 employees, and a distribution center eight miles away in Memphis, Tennessee, with approximately 20 employees. The United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, began an organizational campaign at the plant in October, 1978. The union filed an election petition in December, 1978 and a Board-conducted election was held on February 16, 1979. The union won the election by a 22-vote margin but the company filed election objections which apparently remain unresolved.
It is undisputed that employee Terry Williams left work at the distribution center one-half hour before his shift ended on April 28, 1979, in order to pass out pro-union leaflets at the main plant. After confronting Williams, the plant manager called the personnel office at the Memphis distribution center to inform them of Williams’ activities. The following morning Williams was called to a meeting with Mike Hareless, a personnel administrator, Robert Fisher, a supervisor at the Memphis facility and Jo Ann Gray, his immediate supervisor. When the management personnel began to ask Williams questions about his unauthorized absence, Williams immediately requested that a fellow employee be permitted to attend the meeting. Williams was told that it was unnecessary to have a witness since the supervisors were only going to ask a few questions. His request was denied. The managers then proceeded to direct questions for fifteen minutes at Williams who continued to refuse to respond. Williams was suspended for three days.
Section 7 of the National Labor Relations Act, 29 U.S.C. § 157, guarantees employees the right “to engage in ... concerted activities for ... mutual aid or protection. ...” In NLRB v. Weingarten, 420 U.S. 251, 95 S.Ct. 959, 43 L.Ed.2d 171 (1975), the Supreme Court interpreted this broad language to include the right of an employee to have a union representative present at certain meetings with an employer. The Court limited this right to situations in which (1) the meeting is investigatory and not simply the occasion for announcing predetermined discipline; (2) the employee reasonably expects the meeting will result in disciplinary action; and (3) the employee requests representation. A Weingarten violation will be found where the request for representation is denied and the employer continues to question the employee. If, after choosing to deny the request, the employer immediately terminates the inquiry, there is no Weingarten violation. Id. at 257-58, 95 S.Ct. at 963-64.
ITT maintains that Terry Williams’ Weingarten rights were not violated for three reasons. First, the company argues that the decision to suspend Williams was arrived at prior to the meeting and, therefore, that the meeting was disciplinary rather than investigatory. Second, ITT maintains that the decision in Weingarten should be construed as involving only the right to have a union representative present. Where, as here, there is no certified union and the employee seeks the presence of only a fellow employee, Weingarten rights are not implicated. Finally, the company postulates that Williams requested the presence of another employee only to serve as a witness to corroborate his version of what happened in a later grievance procedure. The company asserts that a request based only on such a motivation is not protected by Weingarten, which envisioned active participation by the union representative in aid of the employee.
Our review of the company’s first contention is limited to a determination of whether the Board’s finding that the meeting was investigatory is supported by substantial evidence. Two of the supervisors present at the meeting, Fisher and Gray, testified that the decision to suspend Williams was made prior to calling him to the office. Had the meeting with Williams included only the notification of the suspension, we would agree with the company that Weingarten does not apply here. However, even if we accept the company’s version of the sequence of events — that Williams was notified of the suspension prior to the questioning — we still find a Weingarten violation. It is clear from the record that the managers wished to elicit further information pertaining to the suspension.
The Ninth Circuit, in NLRB v. Texaco, Inc., 659 F.2d 124 (9th Cir.1981), dealt with a similar argument by Texaco that the company had made the decision to discipline the employee prior to the meeting. That court held that if the nature of the meeting was investigatory, it did not matter whether the decision might have been arrived at beforehand. Similarly, in the case at hand, the managers prolonged the investigatory stage of the process by persisting in questioning Williams. We hold that the Board’s determination that the meeting was investigatory is supported by substantial evidence even if, as the company argues, the managers came to a tentative decision to suspend Williams prior to calling him to the office.
In its second argument, ITT maintains that the Weingarten rights should not be expanded to include representation by a fellow employee because the Supreme Court’s analysis simply does not apply where there is no union involvement. The Supreme Court based its decision in Weingarten on the right of employees to engage in concerted activities:
The union representative whose participation he seeks is, however, safeguarding not only the particular employee’s interest, but also the interests of the entire bargaining unit by exercising vigilance to make certain that the employer does not initiate or continue a practice of imposing punishment unjustly. The representative’s presence is an assurance to other employees in the bargaining unit that they, too, can obtain his aid and protection if called upon to attend a like interview. Concerted activity for mutual aid or protection is therefore as present here as it was held to be in NLRB v. Peter Cailler Kohler Swiss Chocolates Co., 130 F.2d 503, 505-506 (CA2 1942) ....
Weingarten, supra, at 260-61, 95 S.Ct. at 965. ITT asserts that since there was no certified union, the presence of a fellow employee here could not safeguard the activities of bargaining unit employees “in concert” because the observer would have no representative status and no symbolic meaning for the other workers at the plant.
We are faced in this case with the narrow question of whether Weingarten should apply to the request of an employee for a fellow employee to be present during an investigatory meeting at a time when a union has been approved by the vote of the employees but when a decision on certification is pending. We specifically do not decide whether Weingarten applies to a request for a fellow employee in a workplace which has no history of union organizing or other group activity.
. Section 7 by its language protects only “concerted activities” for “mutual aid or protection.” Where an individual employee acts only for himself and by himself there is no protected activity. Royal Development Co. v. N.L.R.B., 703 F.2d 363, 374 (9th Cir.1983). In Weingarten, supra, the Supreme Court found concerted activity because the employee requested the aid of a union representative. Even though the investigatory meeting involved the disciplining of only the one employee, the Supreme Court held that there was protected concerted activity because the union representative would safeguard the rights of the entire bargaining unit.
In this case, it is somewhat less clear than in Weingarten that there is concerted activity because Williams did not request the presence of a union representative. He requested the presence of a fellow employee. We hold, however, that his request was sufficiently related to the concerted activity of bargaining unit employees to make the Weingarten rule applicable. The employees had just participated in a vigorous union drive over a period of many months. Both management and the union advocates alleged that the other side had committed unfair labor practices. Williams was an active union supporter as pointedly evidenced by his actions on the day on which he left the plant early — distributing leaflets for the union. He had reason to suspect management of unfair labor practices when he was called to the office. Furthermore, Williams acted on the advice of a union organizer that he request a witness to protect his rights should he be called in to the company office. In this context, it seems clear that his request arose from the concerted activity of the workers.
Our holding in this case is not inconsistent with the recent decision of the Ninth Circuit in E.I. duPont de Nemours & Co. v. NLRB, 707 F.2d 1076 (1983). In that case, an employee, Henry Burke, requested that another employee be present at an interview with management held to discuss his allegedly unauthorized visit to his physician. Burke charged that the company had violated his Weingarten rights by denying his request. The Ninth Circuit held that Burke’s request was not concerted activity and therefore did not trigger the Weingarten rights. In that case, however, there was no history of union organizing at the plant nor was Burke ever involved in any group activity of any sort. The subject of the meeting was an issue effect on the other workers. As the Ninth Circuit stated:
... [T]he request of the single employee is not ‘concerted activity’; it is the backdrop of other group activity that transforms it into concerted action.... We repeat that we do not foreclose the possibility that a request for a fellow employee may be found concerted in a nonunion setting. Section 7 applies to nonunion employees as well as union employees, see NLRB v. Washington Aluminum Co., 370 U.S. 9 [82 S.Ct. 1099, 8 L.Ed.2d 298] (1962) and unionization is not the only sure indicator of concertedness.
707 F.2d at 1079. Here the background of unionization and particularly Williams’ participation in the organizing efforts distinguishes the case at hand from duPont.
We also find support for our position in the Weingarten dissent of Justices Powell and Stewart and in several cases decided by other Circuits. In their criticism of the majority’s extension of protected activity under Section 7 of the Act, Justices Powell and Stewart expressed their view that the Court’s holding applied to situations in which an employee asks for another employee to be present in the absence of a certified union:
The Court today construes that right [Section 7] to include union representation or the presence of another employee at any interview the employee reasonably fears might result in disciplinary action.
Weingarten, supra, at 270, 95 S.Ct. at 969 (citation omitted).
In N.L.R.B. v. Columbia University, 541 F.2d 922 (2d Cir.1976), the Second Circuit decided that a request for a non-union employee representative to be present was protected under Weingarten. In that case, the worker under investigation sought assistance from a fellow employee who had informally tried to bring grievances before the management on behalf of the other workers. The Court stated:
As Justices Stewart and Powell noted in their dissent in Weingarten, ... there can be little doubt that the protection afforded to concerted activities under the NLRA applies equally to workers in unionized or in non-unionized firms.
Id. at 931. The Court continued in a footnote as follows:
The representative right is guaranteed and therefore the right cannot be made to depend upon whether the person accompanying the employee is a union member or is non-union.
Id. at 931 n. 5. The employees involved in Columbia University had a history of group activity protesting various workplace rules. Even though they were not formally organized as a union, the employees acted in concert and were protected by Section 7 of the Act.
The Fifth Circuit also dealt with this issue, though in dicta, in Anchortank, Inc. v. N.L.R.B., 618 F.2d 1153 (5th Cir.1980). In that case, the Board’s decision below did not reflect whether the employee under investigation sought the assistance of someone employed by Anchortank or a non-employee union organizer. The Fifth Circuit assumed, for purposes of its analysis, that the employee requested the presence of a union supporter from outside of the company. The Court remarked, however, that had the record shown that the request was for a fellow employee, Weingarten protections would attach. Citing the Weingarten dissent discussed above, the Fifth Circuit stated:
Section 7 protects .concerted activity by employees, and one employee’s request for the presence of another unit employee at an interview is concerted activity.
Anchortank, supra, at 1157. See also Oil Chemical and Atomic Workers Int. Union AFL-CIO v. N.L.R.B., 547 F.2d 575, 592 (D.C.Cir.1976) cert. denied sub nom. Angle v. N.L.R.B., 431 U.S. 966, 97 S.Ct. 2923, 53 L.Ed.2d 1062 (1977). (“As even the dissenters in Weingarten realized ... that decision’s elaboration of Section 7 protects the right to act in concert, not merely the right to act in concert with a recognized union.”); Keokuk Gas Service Co. v. N.L.R.B., 580 F.2d 328, 334 n. 14 (8th Cir.1978).
For these reasons, we find that Williams’ request for the presence of a fellow worker at the meeting was protected under Weingarten even though the fellow worker was not and could not have been Williams’ certified union representative. Williams sought the protections afforded by acting in concert in the context of a heated union organizing drive. By denying this request, the company violated Section 7 of the Act.
Finally, ITT seeks to draw a distinction between requests for a representative solely to act as a witness for purposes of later proceedings and a representative who will aid the employee at the meeting. The company points to testimony by Williams which indicates that he was advised prior to the meeting to insist on having someone else present to corroborate his version of what occurred at the meeting should he choose to file a grievance. App. at 69-70.
The Supreme Court implied in Weingarten that one advantage of allowing the employee to be represented at an investigatory confrontation was to assure that the employee would enjoy “recourse to the safeguards of the Act.” Weingarten, supra, at 262, 95 S.Ct. at 966. As the Second Circuit explained in Columbia University, supra, at 930, “One rationale advanced by the Board, a rationale upheld by the [Supreme] Court, for affording the employee the right to have a witness present at such an interview is that a third party can confirm what actually transpires between the employee and employer during the confrontation.” We agree that even if Williams’ sole interest in having a representative present was to substantiate his story at a later grievance proceeding, the request was a proper one under Weingarten. Williams had every reason to want to document what occurred at the meeting with management. By requesting a representative, Williams was simply trying to protect himself from retaliation for his pro-union activity. The company violated Williams’ rights by denying this request and then continuing to press him concerning his unauthorized absence.
II. The Harry Merriweather Discharge
The Administrative Law Judge found, and the Board affirmed, that ITT violated Section 8(a)(3) of the Act by terminating employee Harry Merriweather for an unlawful motive. Section 8(a)(3) provides that “[i]t shall be an unfair labor practice for an employer by discrimination in regard to hire or tenure of employment ... to discourage membership in any labor organization....” 29 U.S.C. § 158(a)(3). The ALJ determined that the company discriminated against Merriweather by terminating his employment approximately three weeks after the union election in retaliation for Merriweather’s support of the union.
Merriweather worked as an order puller in the warehouse of the Mississippi plant from 1972 until March 6, 1979. During the union organizing campaign, Merriweather wore a union button at work, signed a union authorization card and attended at least one union meeting. The ALJ found that one day before the union election, Merriweather’s supervisor, Lee Shepherd, questioned Merriweather concerning his preference in the upcoming election and stated that Merriweather and the other employees would later regret their support for the union. Three weeks after the election, Merriweather left work at 11:30 A.M. and did not return that day although his shift ended at 4:00 P.M. Personnel Manager Richard Covington explained to Merriweather the following morning that he had been discharged for leaving work early.
The Board contends that the reason put forward by the company for firing Merriweather was pretextual. In testimony before the ALJ, Merriweather stated that he had been given permission to leave work early if he finished pulling his orders for the day. This testimony was corroborated by a secretary, Sadie Loveless, who was present during the conversation in which Merriweather asked for permission to leave early. ITT, on the other hand, contests Merriweather’s version of the story, claiming that Shepherd specifically denied Merriweather the permission he sought. The company asserts that the ALJ erroneously credited the testimony of the diseriminatee, Merriweather, and discredited the testimony of Shepherd and another witness, Sammie Williams, who had testified at a prior hearing that he had overheard Shepherd refuse Merriweather’s request.
The Board’s determination to affirm the findings of the ALJ must be upheld if “supported by substantial evidence on the record considered as a whole.” 29 U.S.C. § 160(f). Furthermore, this Court will not disturb reasonable findings of the Board or the AU as to the credibility of the various witnesses’ testimony since it is they who have observed the demeanor of the witnesses. See, e.g., NLRB v. Rawac Plating Co., 422 F.2d 1259, 1260 (6th Cir.1970).
In this case, the Board has established by a preponderance of the evidence that there was anti-union animus on the part of the company. The Board properly considered evidence of the threat made by Shepherd to Merriweather the day prior to the election. In addition, there was convincing proof showing that the company had never fired an employee for leaving early and had never issued a warning to Merriweather even though he had left before the end of his shift several times prior to the union organizing drive. The ALJ chose to credit the testimony of Merriweather and Sadie Loveless that Merriweather was given permission to leave early; this was not clearly erroneous.
The company has failed to overcome this proof with a showing by a preponderance of the evidence that the managers would have fired Merriweather despite their anti-union motivation. The only evidence submitted by the company was the testimony of Shepherd and the witness, Sammie Williams, that Merriweather was denied authorization to leave at 11:30 A.M. This testimony was discredited by the ALJ who had the opportunity to observe the demeanor of the witnesses. We find that the AU and the Board relied upon substantial evidence in their holdings that the company violated Section 8(a)(3) of the Act by wrongfully terminating Harry Merriweather.
III. The Transfer of Jo Ann Gray
Employee Jo Ann Gray was a group leader at the main Southaven plant where she worked in the shipping department. Gray was the most active group leader in support of the union during the heated organizing drive. Gray spoke out in favor of the union at several union meetings, met with the union’s International representatives and wore pro-union t-shirts. On December 4, 1978, during the union drive, the company transferred Gray to the Memphis distribution center. The company concedes that the transfer was intended to curb Gray’s pro-union activities among the larger group of employees at the Southaven plant.
The Board found that ITT violated Sections 8(a)(1) and (3) of the Act by transferring Jo Ann Gray. Those sections provide in relevant part that:
(a) It shall be an unfair labor practice for an employer—
(1) to interfere with, restrain, or coerce employees in the exercise of their rights guaranteed in section 157 of this title; . . .
(3) by discrimination in regard to ... any term or condition of employment to encourage or discourage any membership in any labor organization....
29 U.S.C. § 158(a)(1) and (3). Congress, however, excluded supervisors from coverage of the Act and thus from protection against transfers for anti-union motivations. Supervisors are defined in Section 2(11) of the Act to be:
any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
29 U.S.C. § 152(11). The company maintains that Jo Ann Gray was a supervisor at the time when she was transferred. The ALJ and the Board found, however, that though she had the job title of group leader, Gray did not possess the authority to exercise supervisory functions.
Gray’s status as a supervisor was an issue in a collateral proceeding involving the company’s refusal to bargain with the union. The company challenged the certification of the union because the company claimed that 81 supervisors were unlawfully permitted to vote in the election. At the first level of review, the Hearing Officer found that the group leaders, including Jo Ann Gray, were all supervisors but that they were “minor” supervisors. On appeal, the Board found that there was sufficient uncontradicted evidence to show that fifteen group leaders were supervisors but that it was unnecessary to determine the status of the remaining sixteen group leaders (including Gray) since such a determination would not change the election results.
The company appealed the Board’s findings to the Second Circuit, arguing that the remaining sixteen group leaders were supervisors. The Second Circuit remanded the case to the Board for further findings as to (1) the supervisory status of the sixtéen group leaders; and (2) the extent of their prounion activity. ITT Lighting Fixtures v. NLRB, 658 F.2d 934 (2d Cir.1981). On remand, the Board determined that Jo Ann Gray did not “possess any of the indicia of major supervisory authority identified by the Second Circuit” while at the Southaven plant, (emphasis added). ITT Lighting Fixtures, Division of ITT Corp., 265 NLRB No. 188 at 11 (1982).
The Second Circuit has now completed its review of the collateral case by setting aside the union election. ITT Lighting Fixtures v. NLRB, 712 F.2d 40 (2d Cir.1983). The Second Circuit held, inter alia, that the Board had failed, after two opportunities, to formulate a comprehensible interpretation of the statutory definition of a supervisor.
After perceiving the Board’s inconsistency and confusion on this issue in this and the collateral proceedings, and in the interests of comity and consistency of decision among the Circuits, we also reverse the Board. The decision of the Board that Ms. Gray was a supervisor is based on a set of vague and confusing standards which bear little resemblance to the statutory definition. The distinction between “major” and “minor” supervisors, for instance, does not provide any guidance nor is it based on the criteria in the statute. The Board argues before us that Ms. Gray was, without a doubt, a mere employee with no supervisory powers. Yet, the Board was incapable of establishing her status in the collateral proceeding until the Second Circuit, on remand, directed that the Board decide. The Board has failed to carry its burden of proving that the company unlawfully transferred Ms. Gray because the Board has not shown that Ms. Gray is, in fact, protected by the Act.
For the reasons discussed above, we uphold and enforce the Board’s order as to employees Merriweather and Williams and reverse the order as to employee Gray.
. There is conflicting testimony as to whether the managers notified Williams of his suspension at the meeting described above, possibly even before the questioning began, or at a second meeting later that morning.
While the Court speaks only of the right to insist on the presence of a union representative, it must be assumed that the § 7 right today recognized, affording employees the right to act ‘in concert’ in employer interviews, also exists in the absence of a recognized union.
. The union won the election by a 22-vote margin.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PRETTYMAN, Senior Circuit Judge.
This is a petition to review an order of the Federal Maritime Board, for which the successor Federal Maritime Commission is now responsible. Petitioners are common carriers by water in the foreign commerce of the United States. The subject of the controversy is demurrage charged for cargo on docks in New York.
Ships bringing transoceanic freight into port are required by their transportation obligation, absent a special contract, to unload the cargo onto a dock, segregate it by bill of lading and count, put it at a place of rest on the pier so that it is accessible to the consignee, and afford the consignee a reasonable opportunity to come and get it. This was settled by the courts many years ago. *Circuit Judge Goodrich stated, in North American Smelting Co. v. Moller S. S. Co., that “There is no doubt that in discharging the cargo onto the pier and notifying the consignee the carrier was no longer in possession of the goods so as to suffer the risk of loss not due to any negligence on its part.” The work of unloading and putting the cargo on the dock is done on behalf of the carrier by longshoremen, who are laborers skilled in this sort of thing, or by stevedoring companies under contract with the carriers, these stevedores employing longshoremen. There is not now, and does not appear ever to have been, absent a special contract, any obligation on the part of the carriers to put such cargo actually into the hands of consignees, as by putting it into trucks and hauling it to the consignees’ places of business. Consignees are obligated, after notice and reasonable opportunity, to come and pick up their goods at the pier.
A public interest is involved in the problem created when consignees leave cargo on piers for indefinite periods. A port could be blocked by such practice, to the great, detriment of the whole community. This problem became acute in-the port of New York. The Maritime-Commission, by an order of May 29,1947, instituted an investigation and rule-making procedure. After long consideration, involving hearings before an Examiner, exceptions, and argument before-the Commission, the Commission on October 19, 1948, issued its General Order-69, dealing with the amount of time a consignee must be given to remove his-goods from a pier (called “free time”), and the charges to be made upon him if he leaves his goods there too long (called' demurrage charges), on import property at the port of New York. The supporting “Report of the Commission” was long- and carefully done. The practices of the industry are clearly described. The Commission pointed out mishaps which may-prevent a carrier from performing its-duty of tender for delivery, and it diagnosed the responsibility. It pointed out that a period of “free time” is part of the transportation service of the carrier. It concluded that under conditions prevailing in New York “five days is the shortest time that affords to consignees, a reasonable opportunity to take delivery of imports.” It held a tariff which failed “to assure to consignees a minimum of five days of free time” would be unjust and unreasonable.
The Commission then discussed the-matter of demurrage charges, which are, on a progressively increasing scale, authorized after “free time” has expired on a shipment. The Commission said “it is undisputed that the demurrage rate structure is penal in purpose, intended to clear the piers.”
Then the Commission discussed the problems posed by inability of either party to perform its obligation. It depicted the difference between events which affect the carrier, so that “cargo •cannot be tendered for delivery”, and a •case in which an event “effectively prevents consignees from removing their ■shipments.” It referred, by way of example, to a trucking strike which blockaded the port so that “many shipments which, although available for delivery, •consignees could not remove.” The Commission said, “In such cases, neither carriers nor consignees are at fault.” Neither, said the Commission, should be ■subjected to an avoidable penalty or permitted to profit from the other’s disability. It held that a carrier was entitled to fair compensation for sheltering •and protecting the consignee’s property under such circumstances, that the demurrage charge at the lowest rate (i. e., for the first period after “free time”) represented a compensatory charge, but "that the increased demurrage rates were penal and could not be charged under these conditions. In the order then entered (General Order 69) were two provisions as to demurrage, one in respect to carriers and the other in respect to consignees. They were:
“3. Where a carrier is for any reason unable, or refuses, to tender cargo for delivery, free time must be extended for a period equal to the duration of the carrier’s disability or refusal.
“4. Where a consignee is prevented from removing his cargo by factors beyond his control (such as, but not limited to, trucking strikes or weather conditions) which affect an entire port area or a substantial portion thereof, carriers shall (after expiration of free time) assess demurrage against imports at the rate applicable to the first demurrage period, for such time as the inability to remove the cargo may continue. * * * ”
The ruling was quite clear, it seems to us. Its language fitted precisely into the practice of the trade. Referring to the carriers it said that if a carrier is for any reason unable, or refuses, “to tender cargo for delivery,” free time must be extended. The clear underlying premise was that the obligation of the carrier was to tender for delivery, i. e., leave the goods in the designated place of pick-up, for five days.
We pause at this point to note what will become important to a decision here. “[Tjender for delivery” and “deliver” are distinct and different terms. The point comes up in various contexts. “Delivery”, as respects goods contracted to be sold and delivered, and “tender of delivery” are distinct terms. Under a contract of carriage the carrier made a proper “tender” when it offered the goods to the consignee at the pier. If a seller notifies his buyer of the time and place of delivery according to the terms of a contract, and delivers at the time and place, there is a tender. In the industry concerned in this case there seems to us to be no room for dispute over the nature of the obligation of the carrier. It tenders for delivery; it does not deliver. It makes a valid and complete tender when it puts the cargo on the dock, reasonably accessible, properly segregated and marked, and leaves it there for five days; with notice, of course.
The second pertinent part (par. 4) of General Order 69 is likewise clear. It uses language which describes precisely
what happens. Its expression is “Where a consignee is prevented from removing his cargo by factors beyond his control”, and it goes on to insure its meaning by specifying “such as, but not limited to, trucking strikes”. Under those circumstances, says the General Order, the carrier shall assess demurrage at the first demurrage period rate.
Years later (November, 1956, and February, 1957) massive strikes of longshoremen at New York occurred. Cargo was immobilized on the docks. A dispute arose between carriers and consignees as to wharf demurrage during these periods. The carriers said that under General Order 69, where demurrage had begun before the strike took eifeet, they would charge the first period rate for the time during which the goods could not be moved. In other words, the carriers said that, where consignees, unimpeded, had left their goods on the dock after the free time had expired and demurrage had begun to accrue, the consignees should continue to pay, but not at penalty rates. The Board was notified of the practice. Two years later the Board instituted a proceeding. Arguments were presented in written form. The Board then promulgated the order here and now disputed. It read:
“It is Ordered that General Order No. 69 (46 C.F.R. 226) is interpreted to bar common carriers by water from assessing demurrage or storage charges against import property at New York for any period during which they are unable to deliver such property because of a strike by longshoremen, regardless of whether the cargo has been made available for delivery during the entire prescribed period of free time.”
In the Federal Register the foregoing order appears under its opening designations thus:
“Chapter II — Federal Maritime Board, Maritime Administration, Department of Commerce
“Subchapter B — Regulations Affecting Maritime Carriers and Related Activities
“[Docket No. 859; General Order 69, Amdt. 2]
“PART 226 — FREE TIME AND DEMURRAGE CHARGES ON IMPORT PROPERTY APPLICABLE TO ALL COMMON CARRIERS BY WATER
-»**»**
“Part 226 is hereby amended by adding the following new section and center heading:
“Interpretation
Ҥ 226.2 Applicability of decision and order.
“This part is interpreted by the Federal Maritime Board to * *
The first phase of the controversy is whether the new order is an interpretation of General Order 69 or is an amendment of it. We think it is clearly an amendment. Whereas General Order 69 deals, correctly, with the carriers’ obligation to tender for delivery, the new order speaks of a period “during which they [the carriers] are unable to deliver such property * * *, regardless of whether the cargo has been made available for delivery during the entire prescribed period of free time.” The Board’s position, as made clear by its brief and argument here, is that the legal duty of the carrier to deliver continues until the consignee calls for the cargo; that even after free time has expired the carrier has the duty of making the eargo physically available to the consignee’s trucks; and that the carrier must provide the labor to load the consignee’s trucks. A longshore strike, the Board says, prevents the carrier from fulfilling this obligation. This is a violent shift from the provisions of General Order 69 and introduces a new concept into the industry. A carrier does not, as we have pointed out, under long-established customs and official rules, deliver goods to consignees; it tenders them for delivery, makes them available for delivery. We think the proposal to deny the carriers demurrage charges at the first period demurrage rate, where goods have been properly marked, etc., on the dock for more than five days before the strike began, is a violation of General Order 69; and, as the Commission itself pointed out in its 1948 Report, is a denial of just compensation for a service rendered.
The next question is whether the order is invalid for procedural defects. Section 4(b) of the Administrative Procedure Act provides that, after the notice required for proposed rule-making (excepting interpretative rules), opportunity for interested persons to participate, and “consideration of all relevant matter presented, the agency shall incorporate in any rules adopted a concise general statement of their basis and purpose.” In the Senate Judiciary Committee print of June, 1945, which is explanatory of the proposed Administrative Procedure Act and is included in the Legislative History of the Act printed by order of the ■ Senate, the following appears: “The statement of the ‘basis and purpose’ of rules issued will vary with the rule, but in any case should be fully explanatory of the complete factual and legal basis as well as the real object or objects sought.”
No statement of the basis and purpose of the new rule appears, either in the rule itself or in any accompanying report or opinion. The Board says a complete statement of basis and purpose accompanied General Order 69. This is true, but that statement cannot encompass the different rule incorporated in the new order. The Board argues that the new order is an interpretation and therefore this statutory requirement does not apply. We have held hereinabove that the order is not an interpretation but is an amendment of the existing rule. It establishes a new requirement as to the payment of demurrage, clearly different from the requirement which is in the heretofore existing order (General Order 69). Since the premise for the Board’s argument falls, the argument falls. We hold that the quoted provision of Section 4(b) of the Administrative Procedure Act applies and that therefore the new order of the Board must, for procedural validity, include or be accompanied by a statement of the basis and purpose of the order.
For the foregoing reasons the order entered by the Board on December 15, 1960, in Docket No. 859, Free Time and Demurrage Charges — New York, is set aside as invalid and the matter is remanded to the Board for further proceedings in accordance with this opinion.
So ordered.
. See, e. g., The Eddy, 5 Wall. 481, 495, 72 U.S. 481, 495, 18 L.Ed. 486 (1866) ; Ex parte Easton, 95 U.S. 68, 75, 24 L.Ed. 373 (1877) ; The Grafton, 10 F.Cas. 907 (No. 5656) (S.D.N.Y.1844), aff’d, 10 F.Cas. 905 (No. 5655) (C.C.S.D.N.Y. 1846) ; The Titania, 131 F. 229 (2d Cir. 1904) ; Southern Pac. Co. v. Van Hoosear, 72 F.2d 903, 907 (9th Cir. 1934) ; Baltimore & O. R. Co. v. United States, 201 F.2d 795, 797 n. 3 (3d Cir. 1953) ; Miami Struct. Iron Corp. v. Cie Nationale, Etc., 224 F.2d 566, 568 (5th Cir. 1955).
. 204 F.2d 384, 386 (3d Cir. 1953).
. For simplicity’s sake we omit discussion of lighterage, which sometimes is involved.
. The problem in connection with the port of San Francisco was rather exhaustively discussed in California v. United States, 320 U.S. 577, 64 S.Ct. 352, 88 L.Ed. 322 (1944).
. Free Time and Demurrage Charges at New York, Docket No. 659, 3 U.S.M.C.. 89, as amended, 46 C.F.R. § 226.
. Inland Products Corp. v. Donovan, Inc., 240 Minn. 865, 62 N.W.2d 211, 218 (1954).
. Dohrmann Hotel Supply Co. v. Owl Transfer & Storage Co., 19 Wash.2d 522, 143 P.2d 441, 149 A.L.R. 1108 (1943).
. Carnation v. Pridgen, 84 Ga.App. 768, 67 S.E.2d 485 (1951).
. 46 C.F.R. § 226.1(d).
. The facts recited in the text were developed in exchanges of correspondence, which was complicated in its detail.
. 25 Fed.Reg. 13696 (1960).
. 60 Stat. 238 (1946), 5 U.S.C.A. § 1003 (b).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM:
Petitioner Union challenges the National Labor Relations Board’s findings that it violated Sections 8(b) (2) and 8(b) (1) (A) of the National Labor Relations Act, 29 U.S.C. §§ 158(b) (2) and 158(b) (1) (A). The single issue before us is whether a union may lawfully request an employer, with whom it has a union security agreement, to fire an employee who, although willing to pay the requisite union dues and fees, refuses to assume formal union membership.
Intervenor California Blowpipe and Steel Company and the Union were parties to a collective bargaining agreement which provided:
All employees covered by this Agreement . . . shall, within the time required by the Union after the thirtieth day following the beginning of their employment . . . become and remain members of the Union in good standing, as a condition of continued employment. ...
[W]hen the Employer is notified by the Union in writing that an employee is delinquent in the payment of dues, or, within the time required by the Union, has failed to make proper application and pay the initiation fee required, the Employer shall immediately terminate such employee.
It is undisputed that during the year 1970 the Union requested the Company to terminate the employment of three employees who, although willing to pay the required Union dues and initiation fees, refused to sign the Union’s membership application card. On the basis of an interpretation of Section 8(a) (3) of the Act first adopted in Union Starch and Refining Company, 87 NLRB 779 (1949), enf’d, 186 F.2d 1008 (7th Cir.), cert. denied, 342 U.S. 815, 72 S.Ct. 30, 96 L.Ed. 617 (1951), the Board concluded that these requests were forbidden by the Act. The Union contends, eontrarily, that such requests are expressly permitted by Section 8(a) (3), and urges this court to reject Union Starch.
Section 8(a) (3) provides in pertinent part:
8(a) It shall be an unfair labor practice for an employer—
(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization:
Provided, That nothing in this Act . . . shall preclude an employer from making an agreement with a labor organization ... to require as a condition of employment membership therein on or after the thirtieth day following the beginning of such employment . . . Provided further, That no employer shall justify any discrimination against an employee for nonmembership in a labor organization (A) if he has reasonable grounds for believing that such membership was not available to the employee on the same terms and conditions generally applicable to other members, or (B) if he has reasonable grounds for believing that membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and initiation fees uniformly required as a condition of acquiring or retaining membership.
Section 8(b) (1) makes it an unfair labor practice for unions generally “to restrain or coerce employees in the exercise of the rights guaranteed in Section 7,” and Section 8(b) (2) specifically prohibits unions from causing or attempting to cause an employer “to discriminate against an employee in violation of subsection (a) (3).”
It is the Board’s position that part (B) of the second proviso in Section 8(a) (3) forbids a union from attempting to cause an employer to discharge an employee for any reason other than the employee’s failure to tender periodic dues and fees. As one court has put it:
Even where, as in the instant case, all the statutory requirements of a valid union shop agreement are met, the Act provides that the only ground upon which an employee can be lawfully discharged is for non-payment of initiation fees or periodic dues. Nothing else suffices.
N. L. R. B. v. Technicolor Motion Picture Corp., 248 F.2d 348, 352 (9th Cir. 1957). The Union argues, on the other hand, that (1) Section 8(a) (3) expressly permits unions and employers to agree to condition continued employment on union “membership” and that “membership” is not equivalent to a mere willingness to pay dues and fees, (2) the Board’s interpretation in effect imposes on unions a definition of membership which violates the statutory right of labor organizations under Section 8(b) (1) (A) to establish membership qualifications for themselves, (3) the legislative history does not support the Board’s position, (4) that position effectively destroys union security, which the Act was manifestly designed to protect, and abolishes the distinction between “union shops” and “agency shops” which the framers of Section 8(a) (3) clearly recognized, and (5) the Board’s interpretation of part (B) of the proviso renders part (A) a nullity.
Whatever force these arguments might have were the question before us res nova, the Union Starch rule which the Board applied here has been sanctioned by virtually every other circuit court of appeals in the United States and referred to approvingly by the Supreme Court and this court. In N. L. R. B. v. General Motors Corp., 373 U.S. 734, 742, 743, 83 S.Ct. 1453, 1459, 10 L.Ed.2d 670 (1963), the Supreme Court stated quite unambiguously:
It is permissible to condition employment upon membership, but membership, insofar as it has significance to employment rights, may in turn be conditioned only upon payment of fees and dues. “Membership” as a condition of employment is whittled down to its financial core. .
If an employee in a union shop unit refuses to respect any union-imposed obligations other than the duty to pay dues and fees, and membership in the union is therefore denied or terminated, the condition of “membership” for § 8(a) (3) purposes is nevertheless satisfied and the employee may not be discharged for nonmembership even though he is not a formal member.10
10. Union Starch & Ref. Co. v. [National] Labor [Relations] Board, 186 F.2d 1008 (C.A. 7th Cir.). . . .
See also N. L. R. B. v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 197, n. 37, 87 S. Ct. 2001, 18 L.Ed.2d 1123 (1967); Amalgamated Ass’n etc. Motor Coach Employees v. Lockridge, 403 U.S. 274, 284, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971). In view of this long-established array of authority, we regard the issue as settled.
The Union's petition for review is denied, and the Board’s cross-petition for enforcement of its order is granted.
It is so ordered.
. The Union argues alternatively that Union Starch is factually distinguishable, in that the employees there desired membership, whereas the employees here did not. In terms of an employee’s right under Section 8(a) (3) to be protected from discharge for non-union membership, we think it irrelevant whether the employee did or did not desire membership in the Union. See N.L.R.B. v. General Motors Corp., 373 U.S. 734, 742, 743, 83 S.Ct. 1453, 10 L.Ed.2d 670 (1963).
. See, e. g., I.U.E., Local 801 v. N.L.R.B., 113 U.S.App.D.C. 342, 345, 307 F.2d 679, 682, cert. denied, 371 U.S. 936, 83 S.Ct. 307, 9 L.Ed.2d 270 (1962) ; N.L.R.B. v. Zoe Chem. Co., 406 F.2d 574, 579 (2d Cir. 1969) ; N.L.R.B. v. Philadelphia Iron Works, Inc., 211 F.2d 937, 941 (3rd Cir. 1954) ; N.L.R.B. v. Pape Broadcasting Co., 217 F.2d 197, 199 (5th Cir. 1954) ; J. A. Utley Co. v. N.L.R.B., 217 F.2d 885, 886 (6th Cir. 1954) ; N.L.R.B. v. Spector Freight Systems, Inc., 273 F.2d 272 (8th Cir.), cert. denied, Local 600 etc. v. N.L.R.B., 362 U.S. 962, 80 , S.Ct. 878, 4 L.Ed.2d 877 (1960) ; N.L.R.B. v. Technicolor Motion Picture Corp., 248 F.2d 348, 352 (9th Cir. 1957) ; N.L.R.B. v. Broderick Wood Products Co., 261 F.2d 548, 558 (10th Cir. 1958).
. Our decision here is limited to the issue of discharge from employment. We decide nothing, and we intimate no opinion, as to the extent of a union’s power to discipline an employee who, though refusing formal membership, pays union dues and fees.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
■ MARIS, Circuit Judge.
The plaintiff, Christ H. Masterson, sued his employer, the Pennsylvania Railroad Company, in the United States District Court for the Eastern District of Pennsylvania, under the Federal Employers’ Lia.bility Act, 45 U.S.C.A. § 51 et seq., for injuries which he sustained when an automobile which he was driving swerved from. the highway and crashed into a guard rail near Flinton, Pennsylvania. At the trial the railroad requested a directed verdict in its favor which the trial judge refused. The jury rendered a verdict in favor of the plaintiff upon which judgment was entered. Motions for judgment n. o. v. and for a new trial were denied and the railroad brought the case here on appeal.
The railroad’s first contention is that there was no evidence upon which the jury could predicate a finding of negligence on its part and that, therefore, its motion for a directed verdict should have been granted. In passing upon this contention we must, of course, consider the evidence in the light most favorable to the plaintiff. So viewed the evidence tended to establish the following facts:
The plaintiff was one of a number of coal inspectors employed by the railroad. His duties required him to travel over the entire eastern soft coal region of the United States inspecting mines that supplied coal to the railroad. It was the regular practice of the coal inspectors to use at their own discretion whatever transportation to the mines was available, such as trains, taxicabs or rented automobiles, and to pay the cost of such transportation for which they were later reimbursed by the company.
The plaintiff followed this procedure everywhere but in Altoona, Pennsylvania. There for a period of time before the war he had used his own automobile. Thereafter he was issued a special wartime government permit authorizing him to use taxicabs, and everywhere but in Altoona he continued to use that permit to hire taxicabs. Some time before the date of the accident, however, the plaintiff stopped using taxicabs in Altoona and began the practice of renting automobiles from the Altoona Drive Yourself Company, an automobile rental agency operated by F. B. Close. The plaintiff testified that he was told to do so by his foreman, W. L. Lloyd. The Drive Yourself Company was not owned by or affiliated with the railroad but there was a standing arrangement or contract between the two under which the Drive Yourself Company was to furnish automobiles from time to time for use by employees of the defendant.
On the morning of June 25, 1945 the plaintiff obtained a green Chevrolet automobile from the Drive Yourself Company to drive from Altoona to Houtzdale, Pennsylvania, to make an inspection of a mine at that place. He had previously driven this same automobile and had noticed its tendency to swerve to the right, which condition he had reported to both Close and Lloyd, telling the latter that the car was dangerous to drive. Lloyd had stated, however, that it was the only car the Drive Yourself Company had available and that plaintiff would have to use it. The plaintiff accordingly took the car, drove to Houtzdale in it and made his inspection. On returning from Houtzdale to Altoona, as he entered a curve in the highway at a speed of about thirty-five or forty miles per hour, the automobile started to swerve to the right and in spite of the plaintiff’s efforts it pulled itself out of his control, went off the road to the right, and crashed into the guard rail. It was for a fracture of the sixth cervical vertebra alleged to have been suffered in this accident that the plaintiff brought the present suit.
The railroad asserts that the facts as we have recited them are not sufficient to establish negligence on its part. We do not agree. This is not a case in which the employee was wholly free to choose his own means of proceeding to and from the place at which he was to perform his duties. On the contrary he had been directed by his employer to use for that purpose a particular means, namely, an automobile to be obtained from the Drive Yourself Company, with which concern the employer had a standing arrangement to provide just such facilities for the use of its employees. In the present case, however, we do not have to decide whether even under these circumstances the employer would have been liable to its employee for injuries resulting from a defective automobile thus obtained in the absence of knowledge on its part of the defect. For the evidence of the plaintiff indicates that the railroad through its foreman, Lloyd, had actual notice of the defective condition of the automobile in question and nonetheless directed the plaintiff to use it. We think that there can be no doubt that the jury was justified from this evidence in finding that the railroad was guilty of negligence which was the proximate cause of the accident in which the plaintiff suffered the injuries he alleged. It follows that the trial judge did not err in refusing to direct a verdict for the defendant.
We turn then to certain alleged trial errors which the railroad contends call for a new trial. The first of these involves the admission into evidence of copies of two letters to the railroad’s chief medical examiner, one purporting to be signed by Dr. A. E. Colcher and the other by Dr. R. C. Kell. The copies had been annexed by the railroad to its answer to an interrogatory filed by the plaintiff. Each letter indicated that the plaintiff had been examined by the writer and stated certain facts with respect to his history and condition together with the writer’s findings or conclusions. Over the objection of the railroad the copies of the letters were admitted into evidence as memoranda made in the regular course of business. Their admission is sought to be justified under the Federal Business Records Act or the Uniform Business Records as Evidence Act, which is in force in Pennsylvania. If admissible under either act, their admission was not error., Federal Civil Procedure Rule 43(a), 28 U.S.C.A.
The Federal Business Records Act, 28 U.S.C.A. § 1732, provides that: “In any court of the United States and in any court established by Act of Congress, any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence, or event, shall be admissible as evidence of such act, transaction, occurrence, or event, if made in regular course of any business, and if it was the regular course of such business to make such memorandum or record at the time of such act, transaction, occurrence, or event or within a reasonable time thereafter.”
The provisions of the Uniform Business Records as Evidence Act, 28 P.S.Pa. § 91b, are that: “A record of an act, condition or event shall, in so far as relevant, be competent evidence if the custodian or other qualified witness testifies to its identity and the mode of its preparation, and if it was made in the regular course of business at or near the time of the act, condition or event, and if, in the opinion of the court, the sources of information, method and time of preparation were such as to justify its admission.”
We think that these letters were not admissible under either statute. Obviously they were not business records of the railroad since they were addressed to it. See Palmer v. Hoffman, 1943, 318 U.S. 109, 114, 63 S.Ct. 477, 87 L.Ed. 645, 144 A.L.R. 719. Nor were they in form original business records of the physicians who wrote them since they were actually merely copies of letters purporting to have been written by those physicians to the railroad’s chief medical examiner. Moreover they were not confined to a record of objective acts, conditions, transactions, occurrences or events which took place at or near the time of recording, as the statutes require. For in addition to statements of the observed condition of the plaintiff they contain many facts relating to his prior history, apparently given by him to the writers, as well as the writers’ subjective findings and conclusions. The cited statutes clearly do not authorize the admission of unsworn statements, such as these, made by a physician to a third party giving his opinion as to the condition of a patient whom he has examined. It is incumbent upon a party who desires to put such an opinion in evidence to call the physician as a witness at the trial or take his deposition if otherwise permissible.
Moreover even if the originals of the two letters in question had been offered in evidence and could be regarded as writings made in the regular course of professional business they were not identified as having been so made by or under the direction of the physicians who purported to sign them. Indeed in the case of Dr. Colcher there was evidence that he had not written or signed the letter purporting to have been signed by him. Obviously a writing is not admissible under the Business Records Acts merely because it may appear upon its face to be a writing made by a physician in the regular course of his practice. It must first be shown that the writing was actually made by or under the direction of the physician at or near the time of his examination of the individual in question and also that it was his custom in the regular course of his professional practice to make such a record. This is the requirement of the Federal Business Records Act. Palmer v. Hoffman, 1943, 318 U.S. 109, 115, 63 S.Ct. 477, 87 L.Ed. 645, 144 A.L.R. 719; Ulm v. Moorc-McCormack Lines, 2 Cir., 1940, 115 F.2d 492, rehearing denied 117 F.2d 222, certiorari denied 313 U.S. 567, 61 S.Ct. 941, 85 L.Ed. 1525. It is likewise a requirement of the Uniform Business Records as Evidence Act. Freedman v. Mutual Life Ins. Co. of New York, 1941, 342 Pa. 404, 21 A.2d 81, 135 A.L.R. 1249.
In the present case there is no evidence whatever that the two letters in question were writings made in the regular course of business in the sense that it was the regular practice of the physicians who signed them to write such letters or that they were written contemporaneously with the examinations of the plaintiff to which they referred. Indeed, in the case of Dr. Colcher there was, as we have said, evidence to the contrary. The plaintiff urges, however, that since they were produced by the railroad in connection with its sworn an■swers to his interrogatories they were sufficiently authenticated. We think that this is a non sequitur. The railroad had been asked by the plaintiff whether it had at any time received any medical or X-ray reports from any hospital or physician reporting on the injuries sustained by the plaintiff. Its answer was : “Yes. Copies of . . . a letter of Doctor R. C. Kell, a letter of Doctor A. E. Colcher . . . are attached.” This at the most was an admission by the defendant that the two physicians in question had written the letters. It certainly was not a representation or admission that the contents of the letters comprised, or were taken from, contemporaneous professional records made by the writers in the course of their professional practice. Much less was it an admission of the truth of the statements contained in the letters. For there was no evidence that these physicians were employees or agents of the railroad whose statements would be binding upon it.
Actually these letters appear to have been written not as normal or routine records of medical observation or treatment, but rather as aids in resolving a controversy about legal responsibility. “Their primary utility is in litigating, not in railroading” or in healing. To admit them would be to bring “the business of preparing cases for trial” within the purview of the Federal Business Records Act.
The plaintiff strongly urges that even if the admission of the letters of Dr. Colcher and Dr. Kell was erroneous the error was harmless in that the statements contained in the letters were merely cumulative of other evidence. After careful examination of the record we are constrained to agree with this contention. The record discloses ample evidence to support the conclusion that the plaintiff had suffered a fracture of the sixth cervical vertebra, the conclusion stated in the letters of Dr. Colcher and Dr. Kell. Moreover while the two medical witnesses for the railroad who appeared at the trial both testified that no such fracture was shown by the X-ray films a third physician, Dr. Gerald D. Bliss, who had been consulted by the railroad, testified in depositions which were offered in evidence that his examination of the films did reveal a fracture of the vertebra in question and that he had reported that conclusion to the railroad.
With such testimony before the jury we are not persuaded that the letters of Dr. Colcher and Dr. Kell could have had significant effect upon the jury’s verdict. This is particularly clear in the case of Dr. Kell’s letter since one of the statements therein as to the fracture is a reference to the findings of Dr. Bliss upon that point and, as we have said, the direct testimony of the latter with respect to his findings was before the jury. Moreover the effect of Dr. Colcher’s letter must have been neutralized by a subsequent letter from him which was offered in evidence in which he stated that the earlier letter had not been written by him but by a substitute in his office during his absence and that he himself had found no evidence of any fracture. We conclude that the error of the trial judge in admitting the letters in question did not affect the substantial rights of the railroad.
The railroad also asserts that the trial judge erred in permitting the plaintiff to offer in evidence certain of its answers to interrogatories propounded by the plaintiff without requiring him to put in evidence at the same time other relevant answers. These latter answers were, however, put in evidence later during the course of the trial and we find no substantial error here. Finally the railroad contends that the trial judge erred in his charge to the jury. We have considered this contention but find it to be without merit.
The judgment of the district court will be affirmed.
. Palmer v. Hoffman, 1943, 318 U.S. 109, 114, 63 S.Ct. 477, 481, 87 L.Ed. 645, 144 A.L.R. 719.
. Palmer v. Hoffman, ibid.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
Appellant, Vincent A. Gianfriddo, seeks reversal of the district court’s grant of summary judgment in favor of appellee, Western Union Telegraph Co., on Count II of his age discrimination complaint, and reversal of that court’s order denying his motion for leave to amend the complaint. For the reasons stated in the district court’s Memorandum and Order of June 7, 1985, we affirm the judgments on these issues.
Appellee cross-appeals from the district court’s denial of attorney’s fees. We share the district court’s concern for the way appellant conducted this case, “especially the plaintiff’s indifference towards Local Rule 12 and his unexcused failure to heed the final extension order dated February 25, 1985”. We think it a close judgment call whether or not the district court should have assessed attorney’s fees, but cannot say that the court abused its discretion.
Once having had full consideration in the district court, however, and the benefit of that court’s painstaking 17 page opinion, we can discern no plausible justification for prolonging this litigation. We therefore assess, as a sanction for a frivolous appeal under Fed.R.App.P. 38 and 28 U.S.C. § 1912, double costs and an attorney’s fee of $500 against appellant. If appellant’s counsel did not advise against the propriety of taking this appeal, see Rule 3.1, ABA Model Rules of Professional Conduct, then in good conscience he should reimburse appellant. See Limerick v. Greenwald, 749 F.2d 97 (1st Cir.1984).
Affirmed.
"A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous____”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
BARRETT, Circuit Judge.
Burns International Security Services, Inc., (Burns) seeks review of a National Labor Relations Board (Board) order holding that Burns had unlawfully refused to bargain in violation of 29 U.S.C.A. § 158(a)(5) (Section 8(a)(5)) and that it had engaged in unlawful polling or interrogation of employees in violation of 29 U.S.C.A. § 158(a)(1) (Section 8(a)(1)). The disposi-tive facts are not in dispute.
On June 25, 1971, Board certified Local No. 63, International Guards Union of America (Union) as the exclusive bargaining agent for a group of Burns employees located within the states of Colorado and Wyoming. Two successive one-year collective bargaining agreements were thereafter entered into between Burns and Union. The second agreement ran from December 3, 1972 to December 3, 1973 and by its terms was to “automatically renew itself from year to year unless . . . (one of the parties) . . . gave written notice to the other ... no less than sixty (60) days prior to December 3, 1973 . of its desire to terminate this agreement.”
In mid-September, 1973 Union sent a letter to Burns requesting that contract negotiations for the forthcoming contract year be initiated on October 8, 1973. Burns replied on October 1, 1973. that it would refuse to bargain with Union because of its “good faith doubt” that Union continued to represent a majority of its employees. On October 2, 1973 Burns petitioned the Regional Director of Board for an election to determine if Union actually continued to represent a majority of its employees.
Within its request for an election, Burns set forth numerous factors supportive of its good faith doubt that the Union continued to represent a majority of its employees, including, inter alia: Union officers who comprised the negotiating committee for the bargaining agreement completed on December 3, 1972 had subsequently resigned and Burns had not been notified of the election of new Union officers; as of September 1, 1973 only 65 of Burns current work force of about 300 guards constituted those employed at the time of the March 1971 representation election; in the preceding 12 months Union filed only one grievance which was not a formal filing, but simply an attorney’s letter; as of August, 1973, Union had not filed any annual reports as required by the Labor-Management Reporting and Disclosure Act; a unit employee was seeking a decertification election; and in the preceding six months it had received “various oral complaints and criticisms” about the Union from unit employees.
On January 2,1974 the Regional Director of Board advised Burns that the information contained in its letter of October 2, 1973 supportive of its good faith doubt of Union’s majority was inadequate “to demonstrate any reasonable grounds for concluding that [the Union] ... no longer represents a majority of unit employees.” The Regional Director also advised Burns that it had 48 hours within which to provide “necessary evidence” supportive of its good faith doubt of Union’s majority. To this end Burns notified employees who had previously complained about Union of their opportunity to express their views in writing. Burns acquired written opinions from “some 50 employees” within the 48 hour time limit relating to complaints against the Union.
On January 17, 1974 the Regional Director dismissed Burns’ election petition because the “objective considerations,” including the poll, did not provide reasonable grounds for concluding that Union has lost its majority since certification. Burns appealed to the Board. On March 20, 1974, Board ordered that the Regional Director reinstate Burns’ election petition and proceed accordingly.
On March 25,1974 Union filed the charge herein alleging that Burns had unlawfully refused to bargain and that it had engaged in unlawful interrogation and polling of its employees. The Union charge thus blocked Burns’ election petition. On April 3, 1975, over one year after being ordered by the Board to proceed with the election petition, the Regional Director dismissed Burns’ petition with the statement that it might be “reinstated, if appropriate, upon application, after disposition of the unfair labor practice proceeding.”
The Regional Director issued the instant complaint against Burns on March 5, 1975, almost one full year after Union filed its charges. Hearing was had before an administrative law judge on May 6 and 7, 1975. In a decision dated August 13, 1975 the law judge determined that Union’s complaint should be dismissed in its entirety. In so doing the administrative law judge noted:
The complaint alleges that on and after October 1973, Respondent’s agents polled and interrogated employees concerning their union sentiments and solicited their union withdrawals, that Respondent engaged in these acts to undermine the Union’s majority and that it refused thereafter to honor its bargaining obligations. . . . Respondent’s position is that it developed a good faith doubt, with ample support, as to the continuing majority status of the Union and accordingly filed the RM petition described below.
[R., Vol. Ill, p. 425.]
******
The theory of the General Counsel is that Respondent coerced the anti-union statements set forth above from its employees. But, as stated, I am at a loss to see how Respondent could have done otherwise, after being given 48 hours by the Regional Director to document its position. Indeed, if the letters were pro-union, and to some extent they were, the General Counsel could then contend that this refuted Respondent’s claim that it had a good faith doubt about the Union’s majority status. In the view of the undersigned, this smacks of Hobson’s choice.
[R., Vol. Ill, pp. 430-431.]
The administrative law judge thereafter concluded as a matter of law that Burns had not engaged in any unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act.
Upon review, the Board reversed the administrative law judge finding, inter alia: that Burns’ reasons for asserting a good faith doubt of Union’s majority status were “in many respects — either irrelevant, groundless, inaccurate, or simply not responsive”; Burns had made no effort before refusing to bargain on October 1, 1973 to determine to what extent dissatisfaction with the Union had caused employees to desire that the Union not represent them; and that the poll of the “some 50 employees” was coercive and cannot be relied upon by Burns to support its position.
On review Burns contends that: (1) since on or about October 15, 1973 it has had a good faith doubt as to the continuing majority status of Union among its guard employees; and (2) Burns properly gave certain of its employees an opportunity to express their opinions about Union.
I.
Burns contends that since on or about October 15, 1973 it has had a good faith doubt as to the continuing majority status of Union among its employees. Bums acknowledges that it has refused to bargain with Union since that date but argues that its good faith doubt constitutes an absolute defense to any alleged violation of Section 8(a)(5). Burns urges that since it need not prove lack of Union’s majority but need only “show a rational basis in fact for doubt of majority status” that the recommended dismissal order of the administrative law judge should be adopted and an election ordered.
We observe at the outset that the Board is not bound by findings and conclusions of an administrative judge and is free to draw its own inferences as well as conclusions when its broader experience and expertise is applicable. Ann Lee Sportswear, Inc. v. National Labor Relations Board, 543 F.2d 739 (10th Cir. 1976). In reviewing Board findings, a court must review the record as a whole, taking into consideration supporting as well as contradicting and conflicting evidence; however, a court may not ignore the Board’s expertise or displace its findings even though it would have made a different choice. National Labor Relations Board v. R. L. Sweet Lumber Company, 515 F.2d 785 (10th Cir. 1975), cert. denied, 423 U.S. 986, 96 S.Ct. 393, 46 L.Ed.2d 302 (1975). Determinations of the Board are therefore not to be set aside unless a reviewing court is convinced that the Board has acted in an arbitrary and capricious manner. Id., p. 794. See also: St. John’s Hospital and School of Nursing, Inc. v. National Labor Relations Board, 557 F.2d 1368 (10th Cir. 1977). Mindful of these rules, we nevertheless hold that our careful review of the record convinces us that the Board was clearly erroneous in determining that Burns’ refusal to bargain with Union was violative of Section 8(a)(5).
It is well established that a union’s majority status is conclusively presumed to exist only for one year after the union is certified, after which an employer may refuse to bargain if he has a good faith, reasonable doubt of the union’s majority status. National Labor Relations Board v. King Radio Corporation, 510 F.2d 1154 (10th Cir. 1975), cert. denied, 423 U.S. 839, 96 S.Ct. 68, 46 L.Ed.2d 58 (1975). In Ingress-Plastene, Inc. v. National Labor Relations Board, 430 F.2d 542 (7th Cir. 1970), the court said:
The majority status of a union is conclusively presumed to continue for one year after the union is certified, absent special circumstances. In refusing to bargain with a certified union after the one-year period, as in the instant case, an employer violates section 8(a)(5) unless he can rebut the presumption of continued majority support by establishing either that the union has in fact lost its majority, or that the company, in good faith, has reasonable grounds to believe that the union has lost the support of a majority of the union employees. Brooks v. NLRB, 348 U.S. 96, 103-104, 75 S.Ct. 176, 99 L.Ed. 125 (1954); Terrell Machine Co. v. NLRB, 427 F.2d 1088 (4th Cir., No. 13,371, January 20, 1970); Lodges 1746 and 743, I.A.M. & Aerospace Workers, AFL-CIO v. NLRB, 135 U.S.App.D.C. 53, 416 F.2d 809, 812 (1969). Ingress-Plas-tene contends that it met its burden under either test. We hold that the company demonstrated that its refusal to bargain was predicated on a reasonably grounded good faith doubt of the union’s majority and accordingly deny enforcement of the bargaining order and findings of an 8(a)(5) violation. (Emphasis supplied.)
430 F.2d, at p. 546.
In Celanese Corp. of America, 95 N.L.R.B. 664, 28 L.R.R.M. 1362 (1951), the Board clarified the factors which must be considered in evaluating an employer’s good faith doubt:
By its very nature, the issue of whether an employer has questioned a union’s majority in good faith cannot be resolved by resort to any simple formula. It can only be answered in the light of the totality of all the circumstances involved in a particular ease. But, among such circumstances, two factors would seem to be essential prerequisites to any finding that the employer raised the majority issue in good faith in cases in which a union had been certified. There must, first of all, have been some reasonable grounds for believing that the union had lost its majority status since its certification. And, secondly, the majority issue must not have been raised by the employer in a context of illegal anti-union activities or other conduct by the employer aimed at causing disaffection from the union or indicating that in raising the majority issue the employer was merely seeking to gain time in which to undermine the union.
28 L.R.R.M., at p. 1366.
Applying these standards to the facts • herein, we conclude that Burns did not violate Section 8(a)(5) in refusing to bargain with Union. The dispositive dates and occurrences set forth, supra, warrant additional review:
October 2, 1973: Burns filed a petition for an election to determine if Union still represents a majority of its unit employees.
January 2, 1974: Regional Director notifies Burns that its election petition is not adequate and that it has 48 hours to produce additional necessary evidence. January 17, 1974: Regional Director acknowledges receipt of additional evidence in the form of 50 letters but holds that the letters “do not provide reasonable grounds that the Union has lost its majority.”
March 20, 1974: Board determines that Burns’ actions warrant further processing of its petition. “The Board hereby reinstates the petition and the Regional Director is directed to proceed accordingly.” March 25, 1974: Union files its complaint against Burns.
March 5, 1975: Regional Director issues Union’s complaint herein.
April 3, 1975: More than one year after being directed by the Board to process Burns’ election petition, Regional Director notifies Burns that because of the issuance of Union’s complaint he is dismissing Burns’ election petition.
May 6 and 7, 1975: Trial before an administrative law judge.
August 13, 1975: Recommended decision of the law judge states that Union’s complaint should be dismissed in its entirety. June 29, 1976: Board, on appeal by Union, reverses administrative law judge and determines that Burns has violated both Sections 8(a)(5) and 8(a)(1), effectively holding that Burns did not have a good faith doubt as to Union’s majority.
Repetition of these dates and facts highlights the vexatious manner in which the Regional Director and Board treated Burns. Even though ordered by Board on March 20, 1974 to reinstate Burns’ petition and proceed directly, the Regional Director declined to abide Board’s order, and in lieu, unilaterally in excess of one year later, i. e., April 3, 1975,-he dismissed Burns’ petition. For reasons not developed in the record, Board evidently chose not to intervene in Burns’ behalf for enforcement of its March 20, 1974 Order. Thereafter, notwithstanding Board’s March 20, 1974 Order that Burns’ election petition warranted further proceedings, i. e., inferentially, an election to determine the validity of Burns’ good faith doubt of Union’s majority status, Board’s order of June 29, 1976 held that Burns had violated Sections 8(a)(5) and (1) and that Burns’ reasons for asserting a good faith doubt were “either irrelevant, groundless, inaccurate, or simply not responsive.” Board, under these circumstances, would have this court condone its actions by ordering enforcement of its order holding Burns in violation of Sections 8(a)(5) and (1). This we decline to do.
Burns quite adequately developed solid evidence establishing its good faith doubt relative to Union’s majority status. Accordingly, we hold that Board’s determination that Burns’ refusal to bargain was violative of Section 8(a)(5) was arbitrary and capricious.
II.
Burns argues that it properly gave certain of its employees an opportunity to express their opinions about Union, pursuant to the Regional Director’s request of January 2, 1974 that Burns supply additional evidence supportive of its election petition.
As noted, supra, the administrative law judge was “at a loss to see how Respondent [Burns] could have done otherwise, after being given 48 hours by the Regional Director to document its position.” In commenting on this procedure the Board noted:
Geraty [Burns’ National Director of Industrial Relations] interpreted the letter as meaning that he had 48 hours within which to document “undisclosed number of oral complaints” referred to in the letter. Therefore, he contacted the Respondent’s branch manager in Denver, Troy Marsh, and over the telephone instructed him that the employees who had previously complained about the Union should be given an opportunity to express their opinions in writing, if they so desired. He also instructed Marsh that the employees were not to be interrogated, pressured, or pushed and that they were not required to write anything. Thereafter, Marsh relayed Geraty’s instructions to his supervisors or agents who approached a number of employees, including some who possibly had not complained about the Union.
As the record shows, these instructions were carried out; a number of employees were asked to give their written opinions and many, some 25 to 30 employees, were flatly requested to state their views regarding the Union, or unions in general, “pro or con.” Also, the employees were not told the reasons why the letters were requested, nor were employees told that their responses would be kept confidential; that they would not be read by their supervisors; that the Respondent would not keep a record of their responses, pro or con; or that any record would be kept of those who did not care to respond. On the other hand, the record shows that no employees were threatened, coerced, or intimidated into cooperating.
In all, about 50 open letters, generally critical of the Union’s dues and the Union’s lack of interest, were received by the Respondent and taken to the Regional Director. In a letter dated January 17, 1974, the Regional Director acknowledged receipt of the letters and stated that following an investigation the objective considerations “do not provide reasonable grounds that the Union has lost its majority since certification [and that] further proceedings are not warranted at this time.” (Emphasis supplied.)
[R., Vol. III, pp. 438-439.]
The Board held this poll to be coercive and in violation of Section 8(a)(1). The Board opined that the poll by Burns failed to comply with the polling mandates of Struksnes Construction Co., Inc., 16 NLRB 1062 (1967). We observe that such a determination was inconsistent, at best, in light of the fact that the Board had, in its Order of March 20, 1974, determined that the letters obtained by Burns together with the information set forth in its original petition of .October 2,1973 “alleged sufficient objective considerations to warrant further processing of the petition.” Furthermore, we believe the Board’s findings set forth in this part II, supra, belie a determination that the poll was coercive. Thus, we must hold that the poll conducted by Burns, pursuant to the Regional Director’s request that Burns procure “necessary evidence” of “an undisclosed number of oral complaints” was not coercive and not violative of Section 8(a)(1).
Enforcement denied. Board is directed to reinstate Burns’ election petition of October 2, 1973 and hold an election within 60 days of the effective date of this opinion. We further direct the Board to bear all costs of the election.
. 29 U.S.C.A. § 158(a)(5) provides:
(a) It shall be an unfair labor practice for an employer—
(5) to refuse to bargain collectively with the representatives of his employees .
. 29 U.S.C.A. § 158(a)(1) provides:
(a) It shall be an unfair labor practice for an employer. — •
(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in this title.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
CONTIE, Circuit Judge.
Raymond Haislah appeals the district court’s denial of declaratory relief. Hais-lah had requested a declaration that the written policies of the City of Cleveland that govern the use of deadly force by its police are unconstitutional. Because this request for declaratory relief does not, in the current posture of this case, present a case or controversy, we vacate the district court’s judgment, which denied relief on the merits, and remand with instructions to dismiss.
This case has made its way to this court once before. A detailed recitation of the underlying facts may be found in our earlier decision. See Haislah v. Walton, 676 F.2d 208 (6th Cir.1982). For present purposes, it is sufficient to note the following.
In 1977, Haislah was shot and wounded by Albert Walton, a police officer of the City of Cleveland. Haislah then initiated this action under 42 U.S.C. § 1983 alleging a denial of his civil rights. He sought both monetary relief and the declaratory relief referred to above. The defendants, Walton, the City of Cleveland and the City’s Police Department, pleaded self-defense. A jury returned a verdict for the defendants and the district court denied declaratory relief on the merits. On appeal, this court reversed and remanded for a new trial because of error in the instructions to the jury. See id. at 212-15. Although Haislah had also briefed the denial of declaratory relief, this court did not address that issue.
The second trial produced the same result on both the monetary and declaratory claims, the jury crediting the defendants’ assertion of self-defense and the district court denying declaratory relief on the merits. Haislah now appeals only the denial of declaratory relief. The defendants argue that in this posture the case presents no justiciable controversy. This argument is well taken.
The Supreme Court addressed a nearly identical situation in Ashcroft v. Mattis, 431 U.S. 171, 97 S.Ct. 1739, 52 L.Ed.2d 219 (1977). In Mattis, the plaintiff’s son was shot and killed by police officers and the plaintiff then brought a § 1983 suit for monetary and declaratory relief. See id. 431 U.S. at 171, 97 S.Ct. at 1739. The district court found that the defendants had a valid defense of good faith and denied all relief. Id. On appeal, the Eighth Circuit held that declaratory relief was available despite the plaintiff’s abandonment of his monetary claim and remanded to the district court to determine whether the statutes authorizing the use of deadly force by police were constitutional. Id. at 171-72, 97 S.Ct. at 1739-40. On remand, the district court upheld the constitutionality of the statutes. The Eighth Circuit then reversed, holding the statutes unconstitutional. On appeal from the Eighth Circuit, the Supreme Court held that the case did not “present a live ‘case or controversy.’ ” Id. at 172, 97 S.Ct. at 1740.
This suit was brought to determine the police officers’ liability for the death of appellee’s son. That issue has been decided, and there is no longer any possible basis for a damages claim. Nor is there any possible basis for a declaratory judgment. For a declaratory judgment to issue, there must be a dispute which “calls, not for an advisory opinion upon a hypothetical basis, but for an adjudication of present right upon established facts.” ... Here, the District Court was asked to answer the hypothetical question whether the defendants would have been liable apart from their defense of good faith. No “present right” of appellee was at stake.
Id. (citations omitted). See also City of Los Angeles v. Lyons, 461 U.S. 95, 101-10, 103 S.Ct. 1660, 1665-1670, 75 L.Ed.2d 675 (1983).
Haislah seeks, similarly to the plaintiff in Mattis, a declaration of the legality of Walton’s conduct had he not been acting in self-defense. It has been determined, however, that Walton was acting in self-defense and Haislah does not now challenge that determination. Haislah does not seek an application of legal principles to the historical facts which gave rise to this litigation; rather, he seeks an application of legal principles to a set of hypothetical or imaginary facts. Issuing general statements of law not tethered to any factual setting is a task which federal courts are neither empowered nor equipped to perform.
For the foregoing reasons, the judgment of the district court denying declaratory relief on the merits is VACATED and the case is REMANDED to the district court with instructions to dismiss the request for declaratory relief.
. At oral argument, counsel for Haislah suggested that this case is “capable of repetition, yet evading review.” See, e.g., Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 713, 35 L.Ed.2d 147 (1973); Moore v. Ogilvie, 394 U.S. 814, 816, 89 S.Ct. 1493, 1494, 23 L.Ed.2d 1 (1969). This argument is unavailing. Although this case may be "capable of repetition,” there is no particular likelihood that future cases will evade review. Had Haislah not abandoned his request for monetary relief, this court would have been able to address the questions he now seeks to present. See, e.g., Garner v. Memphis Police Department, 710 F.2d 240 (6th Cir.1983), cert. granted,-U.S.-, 104 S.Ct. 1589, 80 L.Ed.2d 122 (1984).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
SEITZ, Circuit Judge.
Carol Ann Keeffe appeals a final judgment of the district court in favor of defendants Citizens & Northern Bank (Citizens) and C.T. Conover, Comptroller of the Currency (Comptroller). The controversy arises from the Comptroller’s appraisal of Keeffe’s stock following the merger of Farmers National Bank (Farmers) and Citizens. We have jurisdiction under 28 U.S.C. § 1291 (1982).
I
On March 10, 1988, subject to stockholder approval, Farmers entered a merger agreement with Citizens. Under the terms of the agreement, Citizens would exchange 8 shares of its stock for each share of Farmers stock.
On March 15,1983, the president of Commonwealth Bank & Trust Company (Commonwealth) wrote to the president of Farmers and expressed interest in a merger of the two banks. The letter indicated Commonwealth would offer Farmers approximately 14 shares of its stock for each share of Farmers stock. Since Commonwealth had a fair market value of $16 per share, under this plan Farmers shareholders would receive $224 worth of Commonwealth stock for each share held.
On May 2, 1983, the Farmers board of directors mailed the Farmers stockholders notification that it had approved the March 10 merger agreement with Citizens along with a proxy statement requesting approval of the agreement. The Farmers directors indicated that the Citizens stock had a fair market value of $25 per share at this time. Accordingly, Farmers shareholders would receive $200 worth of Citizens stock for each share of Farmers.
On May 18,1983, Commonwealth extended a formal merger proposal to Farmers, offering 18 shares of its stock for each share of Farmers. Based on the $16 per share value of Commonwealth, Farmers shareholders would receive Commonwealth stock worth $288 for each share of Farmers. As an alternative, Commonwealth offered the Farmers shareholders a ten-year capital note with a face value of $234 and a stated interest rate of 10% interest for each Farmers share.
Citizens responded by increasing its offer for Farmers to 9V2 of its shares for each share of Farmers. Based upon the $25 per share value of Citizens, each Farmers shareholder would receive Citizens stock worth $237.50 for each share held. As an alternative, Citizens offered Farmers shareholders a five-year capital note with a principal value of $237.50 and a stated interest rate of 10V2% in exchange for each Farmers share.
The Farmers directors then voted to accept Citizens’ later offer. On September 19, 1983 the Farmers shareholders voted their approval of the Citizens offer, and the banks merged. Keeffe, who held over 900 shares of Farmers stock, voted against the proposal and perfected her dissenter’s rights pursuant to 12 U.S.C. § 214a (1982) by surrendering her stock and requesting fair value for her shares. After negotiations, Citizens notified Keeffe that it appraised her shares of Farmers at $213,591 Keeffe rejected the appraisal. Pursuant to Section 214a, Citizens then requested the Comptroller to appraise the shares.
Keeffe submitted to the Comptroller a brief in support of her position regarding the value of the Farmers stock. The brief contained an appraisal prepared by White-sell, a financial expert, which appraised the Farmers stock at $326.54 per share.
The Comptroller considered the arguments and submissions of the parties and conducted his own research. He appraised the Farmers stock at $228.67 per share as of September 19, 1983.
The Comptroller’s decision was accompanied by a memorandum outlining in detail the methodology, commonly known as the “Delaware Block Method,” used in evaluating the stock. The Delaware Block Method is based on a weighting of the following four measures of a stock’s value: fair market value, book value, adjusted book value, and investment value. The memorandum described the four measures and set forth the weight, if any, given each in the Comptroller’s appraisal. He assigned no weight to fair market value or book value of the Farmers stock.
Keeffe subsequently filed this action in the district court contending that the appraisal was unreasonable, arbitrary and capricious. Jurisdiction was based, inter alia, on 28 U.S.C. § 1331 (1982). The complaint also sought interest on the Farmers shares for the period between the surrender of the shares and the tender of the stock’s value following the Comptroller’s appraisal. Finally, the complaint alleged that Keeffe had been deprived of property without due process in violation of the Fifth Amendment. The district court granted summary judgment for Citizens and the Comptroller, holding that the appraisal was not arbitrary, unreasonable or capricious. The court’s memorandum opinion did not mention Keeffe’s request for interest or her constitutional claim. This appeal followed.
II
Before turning to the merits, we must consider Citizens’ contention that the Comptroller’s appraisal under Section 214a is not reviewable in federal court. Citizens relies on the language of Section 214a(b): “... the Comptroller shall upon written request of any interested party, cause an appraisal to be made, which shall be final and binding on all parties.”
The Administrative Procedure Act (APA) confers a general cause of action upon persons “adversely affected or aggrieved by agency action within the meaning of a relevant statute,” 5 U.S.C. § 702 (Supp.III 1985), except to the extent a relevant statute precludes judicial review, 5 U.S.C. § 701(a)(1) (1982). The Supreme Court has stated that “the question whether a statute precludes judicial review ‘is determined not only from its express language, but also from the structure of the statutory scheme, its objective, its legislative history, and the nature of the administrative action involved.’ ” Lindahl v. Office of Personnel Management, 470 U.S. 768, 779, 105 S.Ct. 1620, 1627, 84 L.Ed.2d 674 (1985), quoting Block v. Community Nutrition Institute, 467 U.S. 340, 345, 104 S.Ct. 2450, 2454, 81 L.Ed.2d 270 (1984); Wheaton Industries v. United States Environmental Protection Agency, 781 F.2d 354, 356-57 (3rd Cir.1986). There remains a presumption in favor of judicial review of administrative action. Block, 467 U.S. at 349.
There is scant case law considering the reviewability of the Comptroller’s appraisals of dissenters’ stock in the bank merger context. In Beerly v. Dep’t of Treasury, 768 F.2d 942, 944-45 (7th Cir.1985), cert. denied, — U.S. —, 106 S.Ct. 1184, 89 L.Ed.2d 301 (1986), the seventh circuit determined that a Comptroller’s appraisal under 12 U.S.C. § 215a (1982) is reviewable in federal court. Section 215a is a sister provision of Section 214a, dealing with slightly different bank mergers, and it contains the same “final and binding” language as Section 214a. See 12 U.S.C. § 215a(c) & (d) (1982). The court based its determination in part on a presumption of judicial review, citing Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). It also relied on the notion that appraisal of dissenters’ shares is traditionally a judicial function, one which invites judicial review when performed by an administrative agency rather than a court.
The only other reported decision considering the reviewability of Comptroller appraisals in this context is Simonds v. Guaranty Bank and Trust Co., 492 F.Supp. 1079 (D.Mass.1979). The Simonds court determined that the Comptroller’s appraisals under Section 214a were reviewable. The court relied upon: (i) the Abbott Laboratories presumption of reviewability; (ii) the fact that courts have traditionally considered valuation questions in the context of appraisal of dissenting shareholders’ stock; (iii) a desire to protect the shareholder from arbitrary agency action; and (iv) the notion that review would not reduce the Comptroller’s effectiveness in making appraisals. Simonds, 492 F.Supp. at 1081-82.
The strongest argument against reviewability of appraisals under Section 214a is the statutory language quoted above. This language, however, does not explicitly forbid review. There is a palpable difference between the “final and binding” language of Section 214a(b) and the language of statutes cited by the Supreme Court in Lindahl as examples of statutes in which Congress intended to preclude review. See Lindahl, 470 U.S. at 779-80, 105 S.Ct. at 1627-28, citing 5 U.S.C. § 8128(b) (1982) (compensation for work injuries) (“The action of the Secretary [of Labor] or his designee in allowing or denying a payment under this subchapter is — (1) final and conclusive for all purposes and with respect to all questions of law and fact; and (2) not subject to review by another official of the United States or by a court by mandamus or otherwise.”).
The remaining factors relied on by the Block court, moreover, indicate that Congress did not intend to preclude judicial review of Comptroller appraisals under Section 214a. The legislative history gives no indication that Congress intended to preclude judicial review. No objective of the statutory scheme would be frustrated, nor any part of the statutory structure impaired, by judicial review of the Comptroller’s appraisals. In addition, as both Beerly and Simonds note, appraisal of dissenting shareholders’ stock is a task which is traditionally performed by courts. Review of an appraisal is therefore a task for which courts are well suited.
In light of the foregoing analysis, we conclude that the Comptroller’s appraisals under Section 214a are reviewable under the APA.
Ill
Keeffe raises a bevy of arguments in support of her contention that the Comptroller’s appraisal was improper. The district court reviewed the Comptroller’s appraisal to ensure that the valuation was not arbitrary, capricious, an abuse of discretion or otherwise not in accordance with applicable law. 5 U.S.C. § 706(2)(A) (1982); Beerly, 768 F.2d at 945; Simonds, 492 F.Supp. at 1081. Our review of the district court’s determination is plenary.
Keeffe contends that the Comptroller’s use of the Delaware Block Method to appraise the stock is arbitrary and capricious. She argues that there are more reliable methods of valuing stock and notes that a recent decision of the Delaware Supreme Court indicates that it no longer considers the Delaware Block Method the sole reliable method of valuing dissenters' stock. Weinberger v. UOP, Inc., 457 A.2d 701, 712-13 (Del.1983). We, however, agree with Judge Posner’s conclusion in Beerly:
Although [the Delaware Block] method has frequently been criticized ..., the fact that the Comptroller was following a conventional approach goes far to shield his results from judicial invalidation. It is not for a reviewing court to tell an administrative agency to defy the conventional wisdom, to innovate, to be daring.
Beerly, 768 F.2d at 945-46.
Keeffe also contends that the Comptroller abused his discretion by refusing to follow Whitesell’s appraisal. The record demonstrates that the Comptroller considered the Whitesell appraisal. He was, however, under no obligation to adopt Whitesell’s appraisal as his own. Accordingly, the Comptroller’s refusal to adopt Whitesell’s appraisal, without more, was not an abuse of discretion.
Keeffe next contends that the Comptroller’s appraisal method violates the intent and objectives of Section 214a because the Comptroller’s appraisal method produced a value not only lower than the alleged fair market value, but also lower than the merger price. While we agree with Keeffe’s premise that Section 214a is designed to give dissenting shareholders the fair value of their stock, the fact that application of the Delaware Block Method led to a value unacceptably low in Keeffe’s eyes does not mean the method is arbitrary and capricious.
Keeffe finally contends that the Comptroller abused his discretion in his application of the Delaware Block Method. Keeffe admits that there was no active market for Farmers shares prior to the Citizens and Commonwealth offers to merge with Farmers. She nevertheless argues that the Commonwealth and Citizens merger proposals demonstrate the existence of a market for Farmers shares at the time of the merger and that the Commonwealth and Citizens offers can be used to establish market value. Therefore, Keeffe contends, the Comptroller’s failure to assign any weight to market value when appraising the Farmers stock was arbitrary and capricious.
We agree with Keeffe’s contention that there was a market for Farmers shares at the time of the merger. The academic literature is replete with discussions of the merger activity in the banking industry in recent years, see, e.g., Staff, Davidson, & McDonald, Increased Bank Merger Activity: Causes and Effects, 24 Amer.Bus.L.J. 67 (1985), and the competing offers of Citizens and Commonwealth demonstrate Farmers was an active participant in the merger market. We do not agree, however, that the Citizens and Commonwealth offers can be used in this case to establish market value of the Farmers stock, as market value is traditionally employed in the Delaware Block Method.
The Delaware Supreme Court has indicated that market value, as that term is used in the Delaware Block Method, means the value of shares traded in an established market. Application of Delaware Racing Assoc., 42 Del.Ch. 406, 213 A.2d 203, 210 (1965). The Delaware courts have also made clear that market value should not be taken into account when the stock in question is too thinly traded, Adams v. R.C. Williams & Co., 39 Del.Ch. 61, 67-71, 158 A.2d 797, 801-02 (1960), or where the market for the stock is not dependable, Sporborg v. City Specialty Stores, 35 Del.Ch. 560, 564-66, 123 A.2d 121, 124 (1956). In addition, Delaware courts have indicated that the market value included in an appraisal of a dissenter’s stock should be uninfluenced by the transaction from which the shareholder dissents. Tri-Continental Corp. v. Battye, 31 Del.Ch. 523, 74 A.2d 71, 74 (1950); In re Olivetti Underwood Corporation, 246 A.2d 800, 804-05 (Del.Ch.1968).
In the present case Citizens and Commonwealth were competing to acquire Farmers. We think it reasonable to infer that their offers might contain premiums reflecting the desires of the competing banks to obtain Farmers for their own special reasons over what individual purchasers of Farmers’ stock might pay in an established market. Such reasons might include the acquisition of deposits or entrance into new markets. Because the offers contain such premiums, the offers are not accurate reflections of the traditional market value of the stock, defined in terms of shares traded individually in an established market. Because the Commonwealth and Citizens offers do not establish such a market value the Comptroller did not abuse his discretion by assigning no weight to market value in appraising Keeffe’s shares.
IV
Finally, we turn to Keeffe’s assertion that Section 214a’s requirement of stock surrender and the absence of a provision requiring the payment of interest on the value of the surrendered shares combine to deprive her of property without due process in violation of the Fifth Amendment to the United States Constitution.
Originally enacted in 1950, Section 214a is an addition to the Bank Conservation Act of 1933. As such, it is legislation “adjusting the burdens and benefits of economic life.” Hodel v. Indiana, 452 U.S. 314, 323, 101 S.Ct. 2376, 2383, 69 L.Ed.2d 40 (1981), quoting Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15, 96 S.Ct. 2882, 2892, 49 L.Ed.2d 752 (1976). When Congressional enactments under the Commerce Clause adjust the burdens and benefits of economic life, due process challenges to their constitutionality are measured under the rational basis test. Hodel, 452 U.S. at 323-24, 101 S.Ct. at 2382-83. While Congressional authority for banking legislation rests on different constitutional grounds, see Farmers’ & Mechanics’ Nat. Bank v. Dearing, 91 U.S. (1 Otto) 29, 33, 23 L.Ed. 196 (1875) and McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 400-24, 4 L.Ed. 579 (1819), we believe that its character as legislation adjusting the benefits and burdens of economic life requires us to consider due process challenges to federal banking statutes under the rational basis test.
This view has been adopted in at least one circuit. In Northside Iron & Metal Co., Inc. v. Dobson & Johnson, Inc., 480 F.2d 798 (5th Cir.1973), the fifth circuit considered a challenge to the constitutionality of the statute governing the appropriate venue for suits against national banks, 12 U.S.C. § 94 (1982). The court found the statute had a rational basis and rejected the appellant’s contention the statute violated due process. Id. at 800. Cf. Smith v. Witherow, 102 F.2d 638, 642 (3rd Cir.1939) (rejecting a challenge to the constitutionality of the Bank Conservation Act’s provision authorizing the appointment of a conservator, see 12 U.S.C. § 203 (1982), on the ground that the statute was “reasonable and appropriate”).
Under the rational basis test, Section 214a comes to this court with a presumption of constitutionality. Hodel, 452 U.S. at 323, 101 S.Ct. at 2382-83. This court may invalidate Section 214a only if it is clear that there is no rational basis for the Congressional judgment or if there is no reasonable connection between the means selected and the asserted ends. Id. at 323-24, 101 S.Ct. at 2382-83.
We cannot conclude that Section 214a lacks a rational basis. One of the asserted goals of Section 214a is to “protect dissenting shareholders of national banks ... by permitting them to receive the value of their stock in cash.” S.Rep. No. 1104, 81st Cong., 2nd Sess. reprinted in 1950 U.S. Code Cong. Service 3012, 3013. We believe the statute reasonably achieves this goal. It is not for this court to decide the value of the surrender requirement and whether Congress ought to provide for the payment of interest to dissenting shareholders during the appraisal period. “If the ... statute is to be amended ..., Congress is the body which must act to do so....” Northside Iron, 480 F.2d at 800.
For the foregoing reasons, Keeffe’s constitutional challenge must be rejected.
V
The judgment of the district court will be affirmed.
. Keeffe contends the March 15 letter constituted a formal merger offer. In our view of the case, it does not matter whether the letter constituted such an offer.
. The Comptroller does not join Citizens’ argument.
. Because the question is not before us, we need not consider whether, if the Comptroller were to employ a different method of appraising dissenters’ stock, it would be permissible for the Comptroller to consider the offers of potential acquirors as evidence of the stock’s value.
. Keeffe no longer presses her claim that Section 214a entitles her to interest on the value of the Farmers shares for the period between surrender of the shares and tender of the stock’s value following the Comptroller’s appraisal.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
CASTLE, Circuit Judge.
This case is before the Court on the petition of Melville Confections, Inc. to review and set aside an order of the National Labor Relations Board issued against the company, and upon the Board’s cross-petition for the enforcement of that order. The Board’s decision and order are reported at 142 N.L.R.B. No. 144.
The Board found that the company violated Section 8(a) (1) of the Act by maintaining and continuing to maintain a profit-sharing plan for its employees which required as a condition precedent to participation in the plan and its benefits that the employee not be represented by a labor organization for the purposes of collective bargaining. The Board’s order requires the company to cease and desist from conditioning participation in any profit-sharing plan to employees who are not represented by a labor organization for collective bargaining purposes and to cease and desist from interfering with, restraining, or coercing its employees in any like or related manner in the exercise of their rights under Section 7 of the Act. Affirmatively, the order requires the company to amend its profit-sharing plan and to amend a reference thereto in a “Statement of Company Policies” booklet accordingly, and to post designated notices.
The complaint against the company was issued on November 9, 1962, following charges filed by the Union on September 18, 1962. Previous representation elections held in 1960 and 1962 had been set aside by the Board because of pre-election statements made by the employer directing attention of the employees to the non-union status required for participation in the company’s profit-sharing plan and to the company’s right to discontinue the plan.
The complaint charged:
“Since on or about March 19, 1962, and continuing at all times there- . after, Respondent [the company] has interfered with, restrained and coerced its employees in the exercise of their rights guaranteed in Section 7 of the Act by maintaining and continuing to maintain a profit sharing plan for its employees which requires as a condition precedent to participation in the plan and its benefits that employees forego representation by the Union, or other labor organization, for purposes of collective bargaining.”
The company contends that the Board’s finding of a Section 8(a) (1) violation is not supported by substantial evidence on the record considered as a whole — the applicable test on review under the guiding principles furnished by Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456. The company urges that the plan itself does not constitute a violation of Section 8(a) (1) and that the record reveals no proof of any act by the company within the period prescribed by Section 10(b) of the Act which evinces either union animus or intention on the company’s part to interfere with, restrain or coerce any employee in the exercise of a Section 7 right. The company claims that the Board relied upon events (acts and conduct of the company upon which the orders setting aside the previous elections were based) occurring more than six months prior to the filing of the instant charge in making the findings and reaching the conclusion it did.
The record reveals that the company established an employee profit-sharing plan June 30, 1958, effective as of July 1, 1957. From its inception the plan has restricted participation to “eligible employees” who have.completed 12 months of continuous service in the company’s employ. An “eligible employee” is defined in the plan as “a regular full-time employee of the Company, not represented by a Union designated as the bargaining agent for the employee.” The plan provides that it may be amended by the company at any time and may be terminated by the company upon 30 days notice. Upon termination the plan trust fund would be distributed pro-rata among present and former participating employees. Benefits are payable to participants upon severance, retirement, disability or death. The company is required to make certain contributions to the plan trust fund. Provision is made for voluntary contributions by participants.
A “Statement of Company Policies” booklet distributed to employees contains a reference to the profit-sharing plan in which the following paragraph is set forth in boldface type:
“Under the terms of the plan, an individual must be a full-time employee and have had at least one year seniority prior to the start of any fiscal year, and cannot be represented by any union or other outside bargaining agent, in order to share in any benefits for that year. This plan was established voluntarily by the company and the company reserves the right to discontinue it at any time”.
At the hearing on the complaint it was stipulated that the provisions applicable to employee eligibility and participation in the profit-sharing plan as originally set forth in the trust agreement and the booklet have remained unchanged since the plan’s inception and are presently in effect, and that copies of the booklet have been distributed to employees beginning July, “1957” (sic) and continuing to-date.
It is patent that the plan excludes from participation those employees “represented by a union designated as the bargaining agent for the employee”. And it is clear from the stipulation that the plan was in effect and maintained during the Section 10(b) period and that during such period the employees were advised of the continuation of the plan and its restrictions through the distribution of the booklet. We agree with the Board, and the trial examiner whose findings and conclusions the Board adopted, that under the facts and circumstances disclosed by the record no independent evidence of additional acts of the company either directly establishing animus or specific intent to abrogate employee Section 7 rights, or from which such animus or intent might reasonably be inferred, was necessary to support a finding of a Section 8(a) (1) violation.
The conduct of the company in continuing to maintain the provision making union representation a disqualification for eligibility to participate in its employee profit-sharing plan benefits and continuing to bring such restriction to the attention of its employees through distribution of the booklet setting forth company policy constituted a per se violation of Section 8(a) (1). It was employer conduct inherently destructive of rights guaranteed by Section 7. By its inherent nature it interfered with, restrained and coerced employees in the exercise of their right to be represented for collective bargaining by a labor organization. It placed a penalty on such action —a disqualification to participate in profit-sharing benefits. It carried with it its own inherent evidence of intent — it strains credulity to ascribe some other or different intent to the provision. In Radio Officers Union of Commercial Telegraphers Union, A.F.L. v. N.L.R.B., 347 U.S. 17, 45, 74 S.Ct. 323, 338, 98 L.Ed. 455, it was pointed out:
“This recognition that specific proof of intent is unnecessary where employer conduct inherently encourages or discourages union membership is but an application of the common-law rule that a man is held to intend the foreseeable consequences of his conduct.”
The rationale of Radio Officers was reaffirmed in N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, 227-228, 83 S.Ct. 1139, 10 L.Ed.2d 308. It was applied by this. Court in connection with a Section 8(a) (1) violation in Time-O-Matic, Inc. v. N.L.R.B., 7 Cir., 264 F.2d 96, 99, where we stated:
“No proof of coercive intent or effect is necessary under Section 8(a) (1) of the Act, the test being ‘whether the employer engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of employee rights under the Act.’ N.L.R.B. v. Illinois Tool Works, 7 Cir., 1946, 153 F.2d 811, 814.”
Cases such as Quality Castings Company v. N.L.R.B., 6 Cir., 1963, 325 F.2d 36, and Pittsburg-Des Moines Steel Co. v. N.L.R.B., 9 Cir., 284 F.2d 74, relied upon by the company, are not apposite here. Here the disqualification is based solely upon the criterion of union representation. In Quality Castings and Pitts-burg-Des Moines the employee groups excluded from the benefits involved were defined by other than union membership or activity criteria — the action complained of was not clearly discriminatory on its face as being openly and avowedly directed solely at employee activity specifically protected by the Act. Other valid bases could logically be ascribed for the action. In such circumstances intent and motivation become controlling factors and independent proof of motive or intent to interfere with, restrain or coerce employees in the exercise of protected activity is requisite to establish a violation. See concurring opinion of Justice Harlan in Local 357, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America v. N. L.R.B., 365 U.S. 667, 679-680, 81 S.Ct. 835, 6 L.Ed.2d 11.
The conduct here involved was continuous from the inception of the profit-sharing plan. It existed during the particular Section 10(b) period here applicable. We find nothing in the examiner’s findings and conclusions which indicates any reliance on conduct of the company prior to the six-month 10(b) period as a basis for the current violation he found. His reference to the fact that prior company conduct had resulted in two elections being set aside was coupled with the observation that “[t]his evidence has been received only for the purpose of giving color, or bringing into clear focus, the conduct which is the gravamen of the complaint”.
The fact that the record does not disclose any instance where an employee was rejected for participation in the plan or deprived of benefits thereunder because of union representation is not of significance except to the extent that it may serve to indicate that the company’s conduct in maintaining and publicizing the restriction on participation in the plan apparently succeeded in discouraging union representation of its employees — effectively interfered to coerce and restrain the employees from exercising their right to secure union representation. It was not necessary to await some such further or additional overt act of the company in order to abate this continuing patently unfair labor practice. Nor does the fact that the company’s violation antedated the Section 10 (b) period applicable to the instant charge preclude a finding of a violation which occurred through a continuation of the proscribed conduct during and within the six-month period prior to the filing of the charge.
We are not persuaded by the contentions of the company which we have discussed and although we have considered the remaining and subsidiary arguments advanced by the company in support of its position, and the cases cited and relied upon, we are of the view that none of them merit detailed discussion. We conclude that the findings of the examiner adopted by the Board are supported by substantial evidence on the record considered as a whole and that the conclusions reached represent the application of correct legal criteria.
The petition of the company to set aside the order of the Board is denied; the order is affirmed; and the Board’s cross-petition for enforcement of the order is granted and enforcement ordered.
Enforcement ordered.
. Hereinafter referred to as “company’.
. All references herein to the “Act” are to the National Labor Relations Act, as amended. 29 U.S.C.A. § 151 et seq. Section 8(a) (1) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed” them by Section 7 which includes the right of employees to form or join a labor organization and “to bai-gain collectively through representatives. of their own choosing”.
. Local 329, United Service Employees Union, affiliated with Building Service Employees Union, AEL-CIO.
. Section 10(b) provides that “no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board and the service of a copy thereof upon the person against whom such charge is made * *
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
SPROUSE, Circuit Judge:
On January 19, 1988, the Supreme Court, — U.S. —, 108 S.Ct. 743, 98 L.Ed.2d 756 granted the Potomac Electric Power Company’s (PEPCO) petition for certiorari in this cause, vacated our earlier judgment, Potomac Electric Power Co. v. Sachs, 802 F.2d 1527 (4th Cir.1986), and remanded “for further consideration in light of Deakins v. Monaghan, — U.S. —, 108 S.Ct. 523, 98 L.Ed.2d 529 (1988) ], and to consider the question of mootness.” Both parties have since filed supplemental memoranda with this court agreeing that the case is moot. We have reviewed the parties’ contentions in light of subsequent developments in the case, and now agree with their position that there is no longer a controversy-
After the State of Maryland initiated grand jury proceedings to investigate whether PEPCO had violated Maryland’s criminal laws and regulations governing hazardous waste disposal, PEPCO commenced the instant action in federal court seeking a declaratory judgment that the involved state laws were preempted by the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq. The district court determined that TSCA does not preempt the challenged state laws. We reversed concluding that the court should have abstained from deciding the issue under Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971) and its progeny. Sachs, 802 F.2d 1527 (4th Cir.1986). While PEPCO’s petition for certiorari to the Supreme Court was pending, the State informed the Court that it had suspended its criminal investigation of PEPCO and, therefore, no remaining case or controversy existed between the parties. PEPCO subsequently concurred in the State’s position.
In light of the parties’ agreement and the absence of an enforcement action against PEPCO, we now agree that the case has become moot. Therefore, in accordance with the Supreme Court’s instructions, we remand the case to the district court with directions to dismiss the cause as moot. See United States v. Munsingwear, 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950).
SO ORDERED.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KRAVITCH, Circuit Judge:
C.L. Taylor appeals from the district court’s grant of appellee Texgas Corporation’s Fed.R.Civ.P. 60(b) motion requesting that the court, on the basis of false testimony and newly discovered evidence, modify its earlier judgment. Because appellee has failed to prove fraud with clear and convincing evidence, and because it has not shown that it could not have produced the “newly discovered evidence” prior to the entry of judgment, we vacate the district court’s modification of the earlier judgment.
FACTS
C.L. Taylor was awarded back pay, unpaid overtime, and damages from Texgas Corporation (“Texgas”) following a jury verdict that Texgas had dismissed him in violation of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621-634, and the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. On appeal, this court determined, citing Goldstein v. Manhattan Industries, Inc., 758 F.2d 1435 (11th Cir.), cert. denied, 474 U.S. 1005, 106 S.Ct. 525, 88 L.Ed.2d 457 (1985), that Taylor also should have been awarded prospective relief in the form of reinstatement or front pay in order “to make [him] whole.” Taylor v. Texgas Corp., No. 85-3305, slip op. at 3 (11th Cir. April 17, 1986), [790 F.2d 87 (Table) ]. This court added, however, that on remand, the district court could consider the disability payments that Taylor had received from Texgas in determining the relief to which Taylor was entitled.
The district court held a hearing on the matter on June 10, 1987, at which Taylor was allowed to testify as to the amount of disability payments he had received. Because the hearing had been noticed as “oral argument,” Texgas initially objected to the introduction of evidence, but subsequently withdrew the objection. It declined, however, to cross examine Mr. Taylor. Following Taylor’s testimony, the court scheduled another hearing on the relief issue and provided the parties the opportunity to submit briefs. Appellant submitted a brief, but appellee failed to do so; nor did appellee present any evidence at the subsequent hearing.
The district court, on July 1, ordered Texgas to reinstate Taylor and pay him the full salary he would have earned from the date of judgment to the date of reinstatement, less the $4,042.40 in disability payments that he had received from Texgas following his discharge. Fifteen days later, appellee filed a motion for relief under Rule 60 of the Federal Rules of Civil Procedure. Texgas contended that the district court’s order granting reinstatement and damages should be amended on the ground of newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial or rehearing, and on the ground of fraud, alleging that Taylor gave untruthful testimony at the June 10 hearing. Specifically, Texgas alleged that Taylor failed to reveal at the June 10 hearing that he had received pension benefits from Texgas after his disability payments had been discontinued.
The district court, after a hearing, found that in addition to the disability benefits, Taylor had received $3,509.82 in pension payments from Texgas’s pension plan, and that he had earned $3,507.24 from other unrelated jobs during the period after his discharge from Texgas. Accordingly, the court modified its prior judgment by deducting the total of those payments, $7,017.06, from the back wages that Tex-gas owed to Taylor. The court, however, never found that Taylor had committed fraud, although it determined that he had been “less than candid;” nor did it find that Texgas could not have discovered this evidence earlier through the exercise of due diligence.
DISCUSSION
A. Jurisdiction
At the time the court entered its July 1 order granting Taylor reinstatement, it retained jurisdiction over the case to award Taylor attorney’s fees and costs. The court’s subsequent order of August 29, modifying the July 1 order, did not dispose of the attorney’s fee issue. Taylor filed a timely notice of appeal from the August 29 order. This court sua sponte raised the question of whether the August 29 order was a final and appealable order as required for our jurisdiction under 28 U.S.C. § 1291, as the district court had not resolved the attorney’s fee issue and had not certified the case pursuant to Fed.R.Civ.P. 54(b).
This circuit follows the rule that “[t]he finality of an order, which determines all the issues except for the award of attorneys’ fees ‘depends on the circumstances of each case.’ ” C.I.T. Corp. v. Nelson, 743 F.2d 774, 775 (11th Cir.1984) (footnote omitted) (quoting McQurter v. City of Atlanta, 724 F.2d 881, 882 (11th Cir.1984)). The court in McQurter reasoned:
When attorney’s fees are similar to costs ... or collateral to an action ... a lack of determination as to the amount does not preclude the issuance of a final, appeal? able judgment on the merits. When, however, the attorney’s fees are an integral part of the merits of the case and the scope of relief, they cannot be characterized as costs or as collateral and their determination is a part of any final, appealable judgment.
724 F.2d at 882 (quoting Holmes v. J. Ray McDermott & Co., 682 F.2d 1143 (5th Cir. 1982), cert. denied, 459 U.S. 1107, 103 S.Ct. 732, 74 L.Ed.2d 956 (1983)).
An award of attorney’s fees under the ADEA is controlled by 29 U.S.C. §§ 216(b), 626(b). See Hedrick v. Hercules, Inc., 658 F.2d 1088, 1096-97 (5th Cir. Unit B 1981). Taylor contends that the district court’s August 29 order was final because an award of attorney’s fees under the ADEA is collateral to the merits. We agree. The statute provides that “[t]he court in [an ADEA] action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant and costs of the action.” 29 U.S.C. § 216(b) (emphasis added). Thus, the language of the ADEA itself indicates that an award of attorney’s fees is extraneous to, rather than central to, the merits.
The Supreme Court’s reasoning in White v. New Hampshire, 455 U.S. 445, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982) supports our interpretation. In White the Court held that a motion for attorney’s fees under 42 U.S.C. § 1988 was not properly categorized as a Rule 59(e) motion to alter or amend the judgment because it raised issues collateral to rather than essential to the merits of the case. As in White, the motion for fees here requires no reconsideration of the issues on the merits, as the motion “in no way urged the court to reconsider its holdings of law and fact to determine whether its prior judgment was correct.” Gordon v. Heimann, 715 F.2d 531, 537 (11th Cir.1983) (requests for attorneys’ fees were collateral to the underlying RICO action). Nor can attorney’s fees “fairly be characterized as an element of ‘relief’ indistinguishable from other elements.” White, 455 U.S. at 451, 102 S.Ct. at 1166. Moreover, because the plaintiff is entitled to attorney’s fees only in addition to a judgment on the merits, the court cannot make an award of such fees until the litigation on the merits is finalized. Thus, we conclude that the district court’s August 29th order, although it failed to determine the amount of fees to be awarded, was final and appealable.
B. Whether relief should have been granted under Rule 60(b)
“[T]he decision whether to grant a motion to amend a judgment rests within the discretion of the trial judge and will not be overturned absent an abuse of discretion.” Barnes v. Southwest Forest Industries, Inc., 814 F.2d 607, 611 (11th Cir.1987). Here, Taylor argues that the district court either employed an improper legal standard or abused its discretion in granting relief under Fed.R.Civ.P. 60(b), as the evidence supports neither a finding that Taylor gave untruthful testimony nor that Taylor’s receipt of pension benefits constituted “newly discovered evidence.”
Rule 60(b) provides in part:
On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: ... (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party—
It is unclear from the district judge’s order which provision of Rule 60(b) he relied upon in amending the judgment. Although he found that Taylor had been “less than candid,” he made no specific finding under either Rule 60(b)(2) or 60(b)(3). Moreover, after reviewing the record, we conclude that Texgas did not establish that it was entitled to have the judgment amended under either of those prongs of Rule 60(b).
First, there exists no basis for granting relief to Texgas under Rule 60(b)(2). To prove a basis for relief under this rule, a party must demonstrate that (1) the evidence is newly discovered since the judgment was entered; (2) due diligence on the part of the movant to discover the new evidence has been exercised; (3) the evidence is not merely cumulative or impeaching; (4) the evidence is material; and (5) the evidence is such that is likely to produce a new outcome if the case were retried, or is such that would require the judgment to be amended. See Scutieri v. Paige, 808 F.2d 785, 793 (11th Cir.1987); Ag Pro, Inc. v. Sakraida, 512 F.2d 141, 143 (5th Cir.1975), rev’d on other grounds, 425 U.S. 273, 96 S.Ct. 1532, 47 L.Ed.2d 784 (1976); 11 C. Wright & A. Miller, Federal Practice and Procedure § 2859 (1973).
Rather than indicating that Taylor’s receipt of pension payments from appellee is “new evidence,” the record contains uncontroverted evidence that shows that Texgas knew that it was paying Taylor pension benefits months before the June hearings regarding Taylor’s receipt of disability payments. Texgas approved Taylor’s pension request on January 3, 1986, and mailed a check to Taylor on March 14, 1986. “Unexcused failure to produce the relevant evidence at the original trial can be sufficient, without more, to warrant denial of a rule 60(b) motion.” Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 391 (5th Cir.1977). Moreover, evidence cannot be “newly discovered” under Rule 60 if it is in the possession of the moving party or that party’s attorney prior to the entry of judgment. See United States v. Potamkin Cadillac Corp., 697 F.2d 491, 493 (2d Cir.) (evidence is not newly discovered where defendant’s attorney admitted that he knew of the evidence prior to the granting of summary judgment and could give no plausible explanation as to why the evidence was not produced earlier), cert. denied, 462 U.S. 1144, 103 S.Ct. 3128, 77 L.Ed.2d 1379 (1983). The mere fact that Texgas is a large company does not excuse it from informing its employees of the identity of its legal opponents and from requiring its employees to report any dealings with those opponents to the company’s counsel.
Nor has Texgas alleged a sufficient claim under Rule 60(b)(3). “One who asserts that an adverse party has obtained a verdict through fraud, misrepresentation or other misconduct has the burden of proving the assertion by clear and convincing evidence.” Rozier v. Ford Motor Co., 573 F.2d 1332 (5th Cir.1978). Moreover, the movant must show that the conduct complained of “prevented the moving party from fully and fairly presenting his case.” Harre v. A.H. Robins Co., 750 F.2d 1501, 1503 (11th Cir.1985) (quoting Stridiron v. Stridiron, 698 F.2d 204, 207 (3d Cir.1983)). Here, Texgas alleges that Taylor was less than truthful at the June 10 hearing when he failed to tell the court that he had received pension benefits from Texgas. However, the hearing was called specifically to deal with disability benefits, and the only questions asked of Taylor dealt solely with disability benefits. Taylor’s attorney asked him, “Since March 5, 1985, you have not received any other disability benefits, have you?” and Taylor responded, “No, sir.” Following this direct examination of Taylor, counsel for Texgas declined to cross examine Taylor. Nor did Texgas afford itself of the opportunity it was given to file a brief and to present further evidence prior to the court’s final decision. Given that Taylor rightfully could have assumed that counsel for Texgas was aware that Texgas was sending Taylor pension payments, Taylor’s conduct does not rise to the level of fraud. Additionally, given the fact that Texgas itself knew that it had been making pension payments to Taylor, even if its counsel were not aware of that fact, Texgas cannot show that Taylor’s failure to mention the pension payments prevented Texgas “from fully and fairly presenting its case.” Harre, 750 F.2d at 1503.
We conclude that the district court abused its discretion. Accordingly, the district court’s order of August 29, 1986, modifying its July 1 order awarding reinstatement and damages, is VACATED and the July 1 order is reinstated in full. Appellant’s motion for attorney’s fees relating to this appeal is GRANTED; we REMAND this case to the district court for determination of an appropriate fee.
. Although appellee filed a timely cross appeal, we grant appellant’s motion that the cross appeal be considered abandoned, as appellee failed to raise the cross appeal in its brief or argument before this court.
. Fed.R.Civ.P. 59(b) requires a motion for new trial to be served not later than ten days after entry of the judgment. Rule 59(e) places the same ten day time limitation on a motion to alter or amend the judgment.
. 28 U.S.C. § 1291 provides:
The courts of appeals ... shall have jurisdiction of appeals from all final decisions of the district courts of the United States ... except where a direct review may be had in the Supreme Court.
. Rule 54(b) provides:
Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim for relief is presented in an action ... the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.
. The Eleventh Circuit, in Stein v. Reynolds Securities, Inc., 667 F.2d 33 (11th Cir. 1982), adopted as precedent decisions of the former Fifth Circuit, Unit B, rendered after September 30, 1981.
. Fed.R.Civ.P. 59(e), supra note 2.
. The Eleventh Circuit, in the en banc decision Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981), adopted as precedent decisions of the former Fifth Circuit rendered prior to October 1, 1981.
. See also Pioneer Insurance Co. v. Gelt, 558 F.2d 1303, 1312 (8th Cir.1977) (denial of appellant's Rule 60(b) motion appropriate where, among other things, appellant and his original attorney were either aware of the existence and contents of the evidence before trial or would have been had reasonable diligence been used); Plisco v. Union Railroad Co., 379 F.2d 15 (3d Cir.) (proffered testimony not "new” under Rule 60 where movant was aware prior to trial that witness had seen the accident), cert. denied, 389 U.S. 1014, 88 S.Ct. 590, 19 L.Ed.2d 660 (1967).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
Plaintiffs seek the issuance of writs of mandamus and prohibition which would direct the district court to vacate certain discovery orders entered June 25, 1974 and prohibit the court from issuing future discovery orders which would invade the attorney-client privilege relating to financial arrangements with attorneys.
The complaint describes a class action pursuant to Rule 23(b)(3). The allegation is that the various Nissan Corporations named in the complaint in the district court have engaged in an unlawful conspiracy with the named dealerships to violate § 1 of the Sherman Act.
The present conflict results from a notice to take depositions in which plaintiffs were served with a demand for the production of the following documents:
2. Current financial statements, income tax returns for the years 1972 and 1973, and any other writings or documents reflecting plaintiffs’ ability to finance the expenses that may be involved in this purported class action litigation.
3. Any agreements plaintiffs have made, collectively or individually, among themselves, with their attorneys of record herein and with any other persons, pertaining to (a) the financing of the costs of this litigation, and (b) the payment of attorneys’ fees that might be incurred. Such documents should include, in addition to express written agreements, correspondence and any and all other writings or records reflecting any oral agreements that may have been made or understandings that may have been reached.
Plaintiffs object to both requests on the ground of relevance and, secondly, on the assertion of attorney-client privilege.
Nissan U.S.A. has moved to compel production asserting that the information is relevant for the purpose of determining whether plaintiffs are adequate class representatives and on the ground that plaintiffs have demanded attorneys’ fees, and hence information as to the fee arrangements that plaintiffs have made is necessary.
On June 25, 1974 an extensive hearing was held which included considerable discourse between the court and counsel. The upshot of this was that the district court granted the defendants’ requests as set forth above. The court also denied the request of plaintiffs to appeal the ruling pursuant to 28 U.S.C. § 1292(b). The refusal of the court to issue this certificate for interlocutory appeal necessitated the petitions which are before us.
In essence, the court’s ruling was that the requested documents were relevant to the issue as to whether a class action was appropriate; that the material was germane to whether the plaintiffs were worthy representatives.
The court also noted that the defendants were entitled to inquire as to whether it was the kind of a class action in which a lawyer seeks to “capture the pot of gold at the end of the rainbow,” and that discovery as to all of the details of the arrangement between the lawyers and clients was pertinent in order to make this evaluation and adjudication. The court distinguished between a trial and the inquiry leading to the determination of appropriateness of the class action. It indicated that the latter inquiry allows it to in effect police the lawyers’ ethics in connection with the solicitation of business from class members.
I.
ARE THE EXTRAORDINARY REMEDIES APPROPRIATE?
Our primary concern is with the propriety of the extraordinary writ. Mandamus is, of course, not to be used as a substitute for an appeal. See Schlagenhauf v. Holder, 379 U.S. 104, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964). Nevertheless, we have recognized that it may be used in some circumstances to review an interlocutory order. See Erie Bank v. United States District Court, Colorado, 362 F.2d 539 (10th Cir. 1966). See also Paramount Film Distributing Corp. v. Civic Center Theater, Inc., 333 F.2d 358, 361 (10th Cir. 1964). The Supreme Court in Will v. United States, 389 U.S. 90, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967) recognized that mandamus can be used in exceptional circumstances “amounting to a judicial ‘usurpation of power’ . . .”
We are of the opinion that the writ of mandamus is appropriate in the present circumstances because, as will appear hereinafter, the court’s action was within the standards which have been recognized by the cases. We view the trial court’s decision as an unwarranted extension of the Supreme Court’s decision in Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), which extension would limit and curtail Rule 23 in a manner never contemplated.
II.
CONTENTIONS
Plaintiffs maintain that the production of the documents should not be allowed, first, because it invades the attorney-client privilege; secondly, because the substance of the fee arrangements is irrelevant and not calculated to lead to the discovery of admissible evidence; and, third, tax returns and other similar financial data are generally irrelevant and compulsory disclosure is not favored. A further reason advanced is that the plaintiffs have agreed to pay the costs of notices to the members of the class.
III.
WHETHER THE MATERIAL SOUGHT WAS RELEVANT
The defendants as well as the district court relied strongly on Eisen v. Carlisle & Jacquelin, supra. We read the district court’s decision as expanding and projecting the Eisen case. First of all, its facts were wholly different from ours. There, the class was extremely large. 2,250,000 members were identifiable. These were the odd-lot traders on the New York Exchange. The district court held a preliminary hearing on the merits and found that petitioner was more than likely to prevail at trial. It then assessed 90% of the notice costs to the defendants. The Supreme Court condemned the holding of a preliminary hearing on the merits and held also that this did not mitigate the error of assessing 90% of the costs to the defendants. The plaintiffs were held bound to advance the notice costs. There is nothing in the opinion of Mr. Justice Powell in Eisen which calls for unlimited inquiry into the financial capacity of plaintiff or which authorizes exposure of the plaintiff’s income tax returns together with financial statements, plus documents showing specific financial capacity. Nor are fee arrangements with lawyers a prescribed discovery subject.
Defendants considered it important to ascertain whether plaintiffs were able to pay all of the costs in the litigation including extensive depositions. We fail to see relevancy in these inquiries particularly with respect to in limine inquiry as to whether a class action is to be allowed. Ordinarily courts do not inquire into the financial responsibility of litigants. We generally eschew the question whether litigants are rich or poor. Instead, we address ourselves to the merits of the litigation. We recognize that the class action is unique and we see the necessity for the court to be satisfied that the plaintiff or plaintiffs can pay the notice costs, and we also agree fully with the Court’s ruling in Eisen that due process requires decent notice. But we do not read Eisen as creating a presumption against finding a class action. Nor does it approve oppressive discovery as a means of discouraging a private antitrust action which, if meritorious, advances an important interest of the government.
We are aware that some lower court decisions have considered the plaintiff’s ability to pay as relevant and proper in the present context. See P.D.Q. Inc. of Miami v. Nissan Motor Corp. in U.S.A., 61 F.R.D. 372 (S.D.Fla.1973); Ralston v. Volkswagenwerk, A.G., 61 F.R.D. 427 (W.D.Mo.1973). However, in both of these cases in which antitrust violations were alleged, the plaintiffs sought to represent a class of all new car purchasers in the United States. Thus, there was legitimate concern about the ability of the plaintiffs to successfully lead a class of this magnitude. Also, the court in Ralston was concerned about its ability to manage the class. The mentioned considerations are not present here.
Nor do we see that the defendants have any legitimate concern as to whether plaintiffs will be able to pay their lawyers and will be able to pay a judgment for costs in the event that such a judgment is entered. In this respect we see no difference between the case at bar and any other lawsuit. Defendant will have ample opportunity for discovery under Rule 69 F.R.Civ.P. if it obtains judgment. See Federal Savings & Loan Insur. Corp. v. Krueger, 55 F.R.D. 512 (N.D.Ill.1972); Gangemi v. Moor, 268 F.Supp. 19 (D.Del. 1967) (Both cases suggest that there is no right to discovery of assets until judgment is obtained).
Finally, defendants know the plaintiff’s resources. His salary is a matter of record in the case.
IV.
In view of our ruling that the matters sought at this juncture and in relationship to the inquiry which was then being conducted are irrelevant, we deem it unnecessary to determine whether the documents sought are privileged.
The fee arrangement between plaintiffs and attorney may not be privileged. We have found cases which rule that such information is privileged and there are other cases to the contrary. It depends on the circumstances. We need not pursue this in view of our conclusion that it is irrelevant. Neither the court nor the defendant has legitimate concern as to the propriety of the arrangement under the code of responsibility. As indicated, whether the plaintiff will be able to pay costs is not now relevant. Tax returns are not generally discoverable. It is only when the plaintiff’s income is directly in issue. Otherwise there is a public policy against an exposure.
At oral argument plaintiffs’ lawyers expressed a willingness to reveal the fee arrangement to the court in camera. We do not know whether this would be helpful, but if it is deemed desirable by the court and counsel we see no objection to it.
We are not unaware of the fact that class actions are a heavy burden to all of the courts, and especially to the trial courts. We are sympathetic to the problems incident to managing these complex cases. Nevertheless, the rule is viable and must be recognized.
Accordingly, we are of the opinion that a writ of mandamus is proper, and so it is ordered that such a writ issue. It is further directed that the rule to show cause be made absolute.
. This on its face is thin.
. Legal ethics would ordinarily be inquired into in separate proceedings but, in any event, they do not call for an independent inquiry where, as here, no evidence suggesting unethical conduct has surfaced.
. Federal judges take an oath to “administer justice without respect to persons, and do equal right to the poor and to the rich.”
. But see to the contrary Sayre v. Abraham Lincoln Fed. Savings & Loan Ass’n., 65 F.R.D. 379 (E.D.Pa.1974), holding that such probing is irrelevant. The court considered both the ethics and inadequate representation problems in ruling on discovery similar to that sought here.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
This cause was heard upon the transcript of the record, briefs and arguments of counsel; on consideration whereof, it is ordered and adjudged that the order appealed from-be and the same is in all things affirmed upon the authority of A. B. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638; and Johnson v. Dallas Downtown Development Co., 5 Cir., 132 F.2d 287.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
ROSENN, Circuit Judge.
This appeal, the procedural posture of which has all of the trappings of a law school examination question, requires us to explore the boundaries of the several theories under which the federal courts abstain from exercising their jurisdiction in deference to comity with the state courts. Specifically, the question presented is whether a party, who files a claim in federal court following a state administrative agency’s determination that the federal constitution does not preclude the agency’s exercise of jurisdiction, may return to federal court to litigate its federal claims after the completion of the state court proceedings in which it specifically refrains from raising its federal claims.
The Ivy Club (“Ivy” or “Club”), a social eating organization whose membership is drawn primarily from the student body of Princeton University, filed suit in the United States District Court for the District of New Jersey alleging that the exercise of jurisdiction by the New Jersey Division on Civil Rights, Department of Law and Public Safety (the “Division”) violated its first amendment rights to freedom of association and its constitutionally guaranteed right to privacy. Following the federal court’s stay of the federal suit, Ivy returned to the state court proceedings, but thereafter refrained from litigating its federal claims.
Upon termination of the state court proceedings, the district court reopened this case and, pursuant to. 28 U.S.C. § 1292(b), certified to this court the order granting Ivy’s motion to reopen its section 1983 action. We affirm the district court’s order permitting Ivy to reopen the case because we hold that Ivy, in the unique circumstances we have here, sufficiently reserved its right to litigate its federal claims in federal court.
I.
Ivy, founded more than a century ago, is a social eating club with an active membership of less than eighty undergraduate students at Princeton University and approximately fifteen hundred inactive graduate members who formerly attended the University. The Club is one of thirteen eating clubs which provide meals to a portion of upper class Princeton students. Until recently, Ivy’s membership was all male.
This litigation commenced in 1979 when Sally Frank, then a student at Princeton University, filed a complaint with the Division against Ivy, as well as two other eating clubs, the Tiger Inn and the University Cottage Club (“the Clubs”), and Princeton University. Frank alleged that the Clubs and Princeton University discriminated on the basis of sex in places of public accommodation in violation of the New Jersey Law Against Discrimination (“LAD”), N.J.S.A. 10:5-1 et seq.
The Division initially refused to process Frank’s complaint, stating that it had determined that the Clubs were exempt from LAD because the Clubs were not places of public accommodation. LAD does not apply to “any institution, bona fide club, or place of accommodation, which is in its nature distinctly private.” N.J.S.A. 10:5— 5(1).
In December of 1979, Frank filed another complaint with the Division, this time alleging that the Clubs were places of public accommodations because they functioned as an arm of Princeton University. Ivy’s answer to the complaint stated as a separate defense that Ivy “has the right to freedom of association pursuant to the First and Fourteenth Amendments of the United States Constitution.” The Division dismissed Frank’s complaint, holding that it lacked jurisdiction over the Clubs because of their distinctly private nature.
Frank appealed the dismissal of her complaint to the Appellate Division of the Superior Court of New Jersey. Once again, the Clubs raised the defense of freedom of association guaranteed by the United States Constitution. The appellate division, taking no position on the merits of the complaint, vacated the decision by the Division and remanded the case for further investigation, holding that a hearing and factual findings were necessary to determine whether the Division had jurisdiction.
After a number of procedural skirmishes not relevant to the dispute at hand, on February 6, 1986, the Division issued a Partial Summary Decision, holding that the Division had jurisdiction over the Clubs. The decision affirmed an earlier ruling of the Division in which the Director of the Division rejected the Club’s argument that the exercise of jurisdiction by the Division violated their first amendment right to freedom of association. In a discussion covering six pages, the Director compared the Clubs and Roberts v. United States Jaycees, 468 U.S. 609, 104 S.Ct. 3244, 82 L.Ed.2d 462 (1984), and held that the application of LAD to the Clubs did not violate their constitutional right to freedom of association.
On February 13, 1986, following this final determination of jurisdiction at the administrative level, and having had its constitutional defenses against the exercise of jurisdiction rejected, Ivy and the Tiger Inn filed suit in federal court. The complaint alleged that the exercise of jurisdiction by the Division of Civil Rights violated the Clubs’ civil rights under the federal constitution and requested a declaratory judgment and an injunction against the state proceedings. The defendants were Attorney General W. Cary Edwards and Director of Civil Rights Pamela Poff. Tiger Inn v. Edwards, 636 F.Supp. 787 (D.N.J.1986).
The federal court chose to stay the federal action “until the New Jersey courts have clarified the application of the New Jersey Law Against Discrimination to the plaintiffs.” Tiger Inn, 636 F.Supp. at 792. Although the plaintiffs requested the court to exercise its equitable powers in restraining the state proceedings, the court stayed the action pursuant to the Pullman doctrine, rather than the Younger doctrine. The court explicitly declined to rule whether the plaintiffs were entitled to return to federal court upon the conclusion of the state proceedings. The court cautioned Ivy and Tiger Inn “not to interpret the court’s decision to grant a stay as a ruling that they have properly reserved their federal constitutional claims for federal court adjudication pursuant to England.” 636 F.Supp. at 792.
The Ivy Club and Tiger Inn then resumed litigation at the state level. Ivy thereafter refrained from raising its federal constitutional claims in the state proceedings. It explicitly stated that it wished to reserve its right to litigate its federal claims in federal court pursuant to the England doctrine. Ivy reserved its rights under England orally before the Administrative Law Judge and again in its brief to the Appellate Division of the New Jersey Superior Court. As a part of its motion opposing certification to the Supreme Court of New Jersey, Ivy included its brief presented to the appellate division containing the England reservation. Tiger Inn, on the other hand, continued to present its federal claims in the state proceedings.
On July 3, 1990, the Supreme Court of New Jersey rendered its final decision. See Frank v. Ivy Club, 120 N.J. 73, 576 A.2d 241 (1990), cert. denied, Tiger Inn v. Frank, — U.S. -, 111 S.Ct. 799, 112 L.Ed.2d 860 (1991). The court affirmed the Division’s Order of May 26, 1987, awarded Frank humiliation damages in the amount of $5,000, but denied her club membership. It also ordered Ivy and Tiger Inn to admit women as members.
The decision, concerned primarily with the extent of hearings necessary to satisfy administrative due process, did not discuss federal constitutional claims. The only mention the New Jersey Supreme Court made of any federal constitutional claims was in its summary of the procedural history where the court noted that “[t]he Division rejected the argument that the Club members’ constitutional free-association rights would be violated if the Clubs were subject to LAD.” 576 A.2d at 251.
On August 24,1990, Ivy moved to reopen its federal action based on the 1986 complaint. On October 15, 1990, the district court reopened this case and certified the question to this court under 28 U.S.C. § 1292(b) whether Ivy had waived its right to litigate its federal rights in federal court.
On October 1, 1990, Tiger Inn filed a Petition for a Writ of Certiorari with the Supreme Court of the United States, claiming that the decision of the Supreme Court of New Jersey violated its first amendment rights. Although Ivy filed a motion for an extension of time to file its petition in the Supreme Court, Ivy never filed a petition. On January 18, 1990 the United States Supreme Court denied Tiger’s petition for cer-tiorari.
II.
A. Mootness
In the fall of 1990, Ivy formally inducted its first female members. The admission of women to the club raises the threshold question of whether this matter is moot. As is well established under Article III of the Constitution, federal courts may adjudicate only actual, ongoing cases or controversies. Lewis v. Continental Bank Corporation, 494 U.S. 472, 110 S.Ct. 1249, 1253, 108 L.Ed.2d 400 (1990). This case-or-controversy requirement subsists through all stages of the judicial proceedings, trial and appellate. Id.
Because this court has jurisdiction pursuant to 28 U.S.C. § 1292(b), the scope of appellate review extends only to questions of law raised by the order certified by the district court, United States v. Stanley, 483 U.S. 669, 677, 107 S.Ct. 3054, 3060, 97 L.Ed.2d 550 (1987). However, it is the order that is appealable, and not the controlling question; and thus we may address any issue necessary to decide the appeal before us. Morse/Diesel, Inc. v. Trinity Industries, Inc., 859 F.2d 242, 249 (2nd Cir.1988). We must necessarily decide the issue of mootness because this court has a “ ‘special obligation’ to satisfy itself of its own jurisdiction in every appeal presented to it.” McNasby v. Crown Cork and Seal Co., Inc., 832 F.2d 47, 49 (3rd Cir.1987), cert. denied, 485 U.S. 936, 108 S.Ct. 1112, 99 L.Ed.2d 273 (1988), citing Bender v. Williamsport Area School District, 475 U.S. 534, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986).
Ivy’s admission of women raises the question of whether the present controversy is mooted. Certainly, if Ivy admitted women in order to comply with the order affirmed by the New Jersey Supreme Court, and hence did so involuntarily, the matter would not be mooted. However, if Ivy members have freely and voluntarily decided to change their club policy, then we must consider the question of mootness.
Although Ivy admitted women only after the final decision of the New Jersey Supreme Court holding that Ivy must admit women, and after the state and federal courts denied Ivy’s request for a stay, there are indications that at least part of Ivy’s membership is in favor of admitting women. First, the club voted to admit women sometime prior to July of 1990, before the state court’s final adjudication. See Frank v. Ivy Club, 576 A.2d at 253 n. 2. After the state court’s final decision, Ivy members again voted to admit women. In light of the New Jersey Supreme Court’s order that women be admitted, it would seem that holding a vote would be unnecessary as the outcome had been decided for them by the court.
There is therefore reason to believe that Ivy, regardless of the outcome of this litigation, has decided to revise its membership policy in favor of admitting women. If this were true, even if the court decided that Ivy does have a first amendment right to exclude women from their club, our decision would have no effect. Thus, the constitutional requirement of redressability would not be met; there must be a substantial likelihood that a favorable federal court decision will remedy the claimed injury. Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984).
If Ivy does not intend to exercise the first amendment rights it alleges have been violated, a question that immediately comes to mind is why is Ivy pursuing this litigation. First, there might be internal disagreement within Ivy as to its admissions policy. Second, there exists practical, although not judicially cognizable, reasons for pursuing this federal litigation. The state court’s order provides that Sally Frank may apply to the Director for attorneys’ fees incurred in connection with this matter.
However, an interest in attorneys’ fees does not save a matter from mootness. Lewis v. Continental Bank, 110 S.Ct. at 1255 (reasonable caution is needed to be sure that mooted litigation is not pressed forward solely to obtain reimbursements of attorneys’ fees); Diamond v. Charles, 476 U.S. 54, 70-71, 106 S.Ct. 1697, 1707-08, 90 L.Ed.2d 48 (1986) (the fee award is wholly unrelated to the subject matter of the litigation, and the prospect that “continued adjudication would provide a remedy for an injury that is only a byproduct of the suit itself does not mean that the injury is cognizable under Article III”).
In any event, we need not resolve the question whether Ivy admitted women voluntarily. Several other factors give considerable life to this controversy. First, the New Jersey Supreme Court upheld a $5,000 judgment against Ivy and Tiger Inn. If Ivy is correct in asserting that subjecting them to LAD violates its first amendment right to freedom of association, then a damage award based on violation of that law is impermissible. In addition, the Division has retained jurisdiction over the club to observe and require compliance with its orders that Ivy admit women in all future membership selections and that the women members will be accorded the same courtesies, privileges and accommodations as males. Ivy must also report in writing to the Division for the next two years on the number of women admitted. Under these circumstances, we conclude that the matter is not moot.
B. Ivy’s Right to Litigate in Federal Court
In 1986, Ivy and Tiger Inn filed suit in federal court seeking a declaratory judgment and injunction against the state proceedings, alleging that the Division’s exercise of jurisdiction violated the Clubs’ civil rights in violation of 42 U.S.C. § 1983. See Tiger Inn v. Edwards, 636 F.Supp. 787 (D.N.J.1986). Because the plaintiffs requested that the federal court exercise its equitable powers to restrain ongoing state proceedings, the court should have decided the case under the parameters of the abstention doctrine laid out in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). However, at the State’s urging, the court abstained pursuant to the Pullman abstention doctrine. See Railroad Commission of Texas v. Pullman, 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). The ramifications of that decision will be explored below.
Ivy and Tiger Inn’s suit filed in federal court alleged that the defendants, Attorney General W. Cary Edwards and Director of Civil Rights Pamela Poff, were violating the clubs’ right to privacy and freedom of association as protected by the first and fourteenth amendments. The Clubs brought suit pursuant to 42 U.S.C. § 1983 which provides:
[ejvery person who, under color of any statute, ordinance, regulation, custom, or usage, or any State... subjects... any citizen of the United States... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
The Clubs alleged that the defendants’ enforcement of the New Jersey Law Against Discrimination against them violated 42 U.S.C. § 1983 and requested that the defendants be enjoined permanently from implementing any procedures to compel the Clubs to accept any person into its membership against the associational preferences of its members.
Section 1983 has engendered a great deal of discussion regarding the relationship between the federal and state courts. Originally § 1 of the Civil Rights Act of 1871, section 1983 was “enacted for the express purpose of ‘enforcing] the Provisions of the Fourteenth Amendment.’ ” Mitchum v. Foster, 407 U.S. 225, 238, 92 S.Ct. 2151, 2160, 32 L.Ed.2d 705 (1972) (quoting 17 Stat. 13). Section 1983 was intended to alter significantly the relationship of the federal government to the states.
The Civil Rights Act of 1871, together with the fourteenth amendment, were “crucial ingredients in the basic alteration in our federal system accomplished during the Reconstruction Era.” Patsy v. Board of Regents of State of Florida, 457 U.S. 496, 503, 102 S.Ct. 2557, 2561, 73 L.Ed.2d 172 (1982). The Act and the constitutional amendment had the effect of dramatically changing the relationship between the federal and state judicial systems. They threw open the doors of the federal judicial system to lawsuijts by private citizens to enable them to protect their federal rights. As a consequence of the new structure of law that evolved in the post-Civil War era, “the role of the Federal Government as a guarantor of basic federal rights against state power was clearly established.” Mitchum v. Foster, 407 U.S. at 239, 92 S.Ct. at 2160. Section 1983 now offered a “uniquely federal remedy” for vindication of individual rights violated “under the claimed authority of state law.” Id. at 239, 92 S.Ct. at 2160. It purposely interposed the federal courts between the States and the people “to protect the people from unconstitutional action under color of state law, ‘whether that action be executive, legislative, or judicial.’ ” Id. at 242, 92 S.Ct. at 2162 (quoting Ex parte Virginia, 100 U.S. 339, 346, 25 L.Ed. 676 (1880)) (emphasis supplied).
The Court has delineated the extent to which Section 1983 provides protection against involuntary participation in state court proceedings in Mitchum v. Foster, supra, and Younger v. Harris, supra, and its progeny. Mitchum, on the one hand, held that the federal anti-injunction statute, 28 U.S.C. § 2283, does not preclude a federal court from enjoining a state proceeding. The anti-injunction statute provides that a “court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by an Act of Congress, or where necessary in aid of its jurisdiction, or to protect or to effectuate its judgments.” The Court reasoned that section 1983 fell within the expressly authorized exception of the anti-injunction statute. Mitchum, 407 U.S. at 243, 92 S.Ct. at 2162.
Younger and its progeny, on the other hand, have erected a formidable prudential barrier to obtaining injunctive relief from ongoing state adjudicative proceedings. In Younger, the plaintiff, who was being prosecuted under the California Criminal Syndicalism Act, sought a federal court injunction pursuant to section 1983 against the state criminal prosecution on the grounds that the existence of the Act and the prosecution under it violated the first and fourteenth amendments. The Court refused to grant the injunction, citing concerns of comity and federalism. 401 U.S. at 44-45, 91 S.Ct. at 750-51. The Court held that federal interference with state court proceedings was available only upon a showing of irreparable injury that is “both great and immediate.” Id. at 46, 91 S.Ct. at 751.
Thus, although an injunction pursuant to section 1983 is not statutorily prohibited, Younger creates a separate and independent judicially created abstention doctrine. The Younger abstention doctrine is a prudential limitation on the federal courts’ exercise of jurisdiction when a plaintiff requests that a federal court interfere with ongoing state proceedings. Consequently, the Clubs’ request for an injunction pursuant to 42 U.S.C. § 1983 fell squarely within the parameters of the Younger decision.
However, in 1986, when the district court considered the question of whether the Clubs’ suit should be dismissed pursuant to Younger, the court expressed uncertainty as to whether Younger abstention should be applied to state administrative proceedings initiated by a private plaintiff. At that time, the Supreme Court had extended the Younger doctrine to civil proceedings initiated by the state in a state court in which important state interests were involved. See Moore v. Sims, 442 U.S. 415, 99 S.Ct. 2371, 60 L.Ed.2d 994 (1979); Juidice v. Vail, 430 U.S. 327, 97 S.Ct. 1211, 51 L.Ed.2d 376 (1977); Trainor v. Hernandez, 431 U.S. 434, 97 S.Ct. 1911, 52 L.Ed.2d 486 (1977); Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975). The Court had also applied Younger to state administrative proceedings initiated by the state in which important state interests were vindicated. See Middlesex County Ethics Committee v. Garden State Bar Assoc., 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982); Gibson v. Berryhill, 411 U.S. 564, 93 S.Ct. 1689, 36 L.Ed.2d 488 (1973).
Only after the district court first considered this case in 1986 did the Supreme Court consider the question of whether Younger abstention applied to administrative proceedings initiated by a private plaintiff In Ohio Civil Rights Commission v. Dayton Christian Schools, Inc., 477 U.S. 619, 106 S.Ct. 2718, 91 L.Ed.2d 512 (1986), a case factually similar to the one at bar, the state administrative proceedings were initiated by a private litigant filing a sex discrimination complaint with the Ohio Civil Rights Commission. Although the administrative proceedings were pending, Dayton (the defendant in the state proceedings), filed suit in federal court seeking an injunction against the state proceedings on the ground that any investigation or imposition of sanctions would violate the first amendment.
The Court held that it should abstain under Younger because “the elimination of prohibited sex discrimination is a sufficiently important state interest to bring the present case within [Younger and its progeny]" and the Court had "no reason to doubt that Dayton will receive an adequate opportunity to raise its constitutional claims." 477 U.s. at 628, 106 S.Ct. at 2723. Dayton would thus appear to be controlling precedent for the case at bar. The present case also involves the issue of sex discrimination and there have been no allegations that the state courts would not provide an adequate opportunity to raise constitutional claims. Moreover, abstention in the present case might have avoided the necessity to reach a constitutional question. Pennzoil Company v. Texaco, Inc., 481 U.S. 1, 11, 107 S.Ct. 1519, 1526, 95 L.Ed.2d 1 (1987) (unwarranted determination of federal constitutional questions is a basis for abstaining pursuant to the Younger doctrine).
Thus, in retrospect, with the additional guidance of Dayton and Pennzoi4 it appears that abstention pursuant to the Younger doctrine would have been appropriate. The defendants urge us to adopt this course of action presently and direct the dismissal of Ivy's action. However, fairness dictates that we must examine the circumstances under which the court in this case abstained and the effect of that decision on the litigants.
The district court, in deciding not to abstain pursuant to Younger, instead accepted the defendants' argument and abstained pursuant to the Pullman theory of abstention. Tiger Inn v. Edwards, 636 F.Supp. at 790. Persuaded that this case was a classic situation for Pullman abstention, the court decided to "stay the action until the New Jersey courts have clarified the application of the New Jersey Law Against Discrimination to the plaintiffs." id. at 792.
The Pullman abstention doctrine derives from Railroad Commission of Texas v. Pullman, 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). In that case, the Court established the principle that federal courts may abstain as a matter of policy from deciding a question of federal constitutional law when the challenged state law is unsettled and state resolution of the claim may make it unnecessary for a federal court to address the federal constitutional claim. Thus, under Pullman, a federal court may stay the federal proceedings until the completion of state court proceedings to decide an issue of state law which might moot a federal constitutional question.
Pullman abstention, however, is usually applied when a plaintiff properly invokes federal court jurisdiction in the first instance on a federal claim. Allen v. McCurry, 449 U.S. 90, 101 n. 17, 101 S.Ct. 411, 418 n. 17, 66 L.Ed.2d 308 (1980). When the plaintiff meets federal jurisdictional requirements and initiates proceedings in federal court prior to any state proceedings, the federal court has a duty to accept that jurisdiction. Id. The federal plaintiff is relegated to the state court only for the resolution of the state law issue. Unlike Younger abstention, Pullman abstention "may serve only to postpone, rather than to abdicate, jurisdiction." Id.
The impropriety of applying Pullman in the present case is illustrated by the Clubs' inability to file suit in federal court prior to the commencement of state proceedings. Their federal complaint was that the state administrative proceedings themselves violated their federal constitutional rights. Neither could the Clubs have removed their state action to federal court; a defendant sued in state court on a state law cause of action cannot remove a case from state to federal court because of a defense based on federal law. Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908) (A plaintiff's cause of action must be based on federal law in order for the case to arise under federal law for purposes of 28 U.S.C. § 1331.).
Thus, normally, unless an injunction could be obtained pursuant to the Younger doctrine, the state defendant in these circumstances would be constrained to present its constitutional defenses in state court. The Supreme Court has held that state-court judgments must be given both issue and claim preclusion effect to subsequent actions under 42 U.S.C. § 1983 by federal courts. See Migra v. Warren City School District Board of Education, 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984) (Parties may not raise in federal court § 1983 litigation issues that could have been litigated in an earlier proceeding.); Allen v. McCurry, 449 U.S. 90, 104, 101 S.Ct. 411, 420, 66 L.Ed.2d 308 (1980) (“There is... no reason to believe that Congress intended [§ 1983] to provide a person claiming a federal right an unrestricted opportunity to relitigate an issue already decided in state court simply because the issue arose in a state proceeding in which he would rather not have been engaged at all.”).
Thus, we see that Congress’ intention that section 1983 “throw open the doors of the United States courts,” Patsy v. Florida Board of Regents, 457 U.S. 496, 504, 102 S.Ct. 2557, 2561, 73 L.Ed.2d 172 (1982) (quoting remarks of Rep. Lowe), to individuals who were threatened with, or who had suffered, the deprivation of constitutional rights does not hold true for the party who is a defendant in state proceedings alleging that the state proceedings are in violation of his federal rights. Unless the formidable barrier of the Younger abstention doctrine can be surmounted by a defendant in a state proceeding or removal is available under the Civil Rights Removal Act, that defendant must have his federal rights adjudicated by the state court system subject to review only by the Supreme Court of the United States.
To summarize, the distinction between Pullman and Younger abstention arises from the different procedural posture of a case where the federal litigation is initiated as a defense to ongoing state proceedings and a case where the plaintiff properly invokes federal jurisdiction in the first instance. In the former, the Younger doctrine is utilized when the federal court is requested to enjoin ongoing state proceedings. In the latter, the Pullman abstention doctrine is utilized when the plaintiff properly invokes the federal jurisdiction in the first instance and the federal court temporarily abstains from exercising its jurisdiction pending the state court decision on a state law question.
For our purposes, the most important consequence of district court abstention pursuant to Younger rather than Pullman is that although a decision under Younger terminates the federal litigation (or ends the state litigation if the federal plaintiff is successful), abstention under Pullman merely postpones the exercise of federal jurisdiction. Allen v. McCurry, 449 U.S. at 101 n. 17, 101 S.Ct. at 418 n. 17. A federal plaintiff who is remitted to state court pursuant to Pullman need not relinquish the right to litigate federal claims in federal court; that right may be reserved especially by following the dictates of England v. Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964).
When the district court abstained pursuant to Pullman, the court expressly did not decide whether the Clubs were able to return to federal court following the termination of the state court proceedings. The court, understandably troubled by Ivy’s litigation of its federal constitutional claims in the state administrative proceedings, cautioned the Clubs “not to interpret the court’s decision to grant a stay as a ruling that they have properly reserved their federal constitutional claims for federal court adjudication pursuant to England. ” Tiger Inn v. Edwards, 636 F.Supp. at 792.
The record before us unequivocally demonstrates that Ivy’s constitutional claims have not been adjudicated other than at the state administrative level. Subsequent to the district court’s decision to abstain, Ivy refrained from litigating its federal constitutional claims. Ivy also expressly stated its wishes to preserve its right to litigate in federal court pursuant to England at each subsequent stage of the state court proceedings.
Moreover, the New Jersey courts appear to have acquiesced to Ivy’s reservation of its right to litigate its federal claims in federal court. Although the New Jersey courts did not explicitly acknowledge Ivy’s reservation under England, neither did the state court decide Ivy’s constitutional defenses. See Frank v. Ivy Club, 228 N.J.Super. 40, 548 A.2d 1142 (1988); Frank v. Ivy Club, 120 N.J. 73, 576 A.2d 241 (1990). The only mention any state court made of Ivy’s first amendment claims was the New Jersey Supreme Court’s summary of the procedural history of the case. The court’s recognition that the first amendment claim had been decided at the administrative level hardly constitutes the adjudication of Ivy’s first amendment claims. The New Jersey Supreme Court affirmed only the order of the administrative body, not the Division’s opinion containing the first amendment discussion issued in conjunction with that order.
We therefore are faced with the situation where confronted by a Pullman abstention, Ivy chose not to pursue its federal claims in the state court. The state court apparently had no objection to that reservation. Ivy, thus, has not had a full and fair opportunity to litigate its federal claims. The Supreme Court has repeatedly recognized that the collateral estoppel doctrine cannot be applied when a party did not have a “full and fair opportunity” to litigate an issue in the earlier proceeding. See Kremer v. Chemical Construction Corp., 456 U.S. 461, 480-81, 102 S.Ct. 1883, 1896-97, 72 L.Ed.2d 262 (1982); Allen v. McCurry, 449 U.S. at 101, 101 S.Ct. at 418. Thus, the full faith and credit statute does not bar the federal court’s adjudication of Ivy’s federal claims.
The defendants argued, however, that Ivy did indeed possess a full and fair opportunity to litigate its federal claims in state court and that Ivy voluntarily waived that right. The simple answer is that the court, having granted abstention specifically pursuant to Pullman, repeatedly put Ivy in a “catch-22” situation by not deciding the reservation issue at that time. If Ivy wished to return to federal court, Ivy had to refrain from presenting its federal claims at the state level. Under England, a party who freely and without reservation submits his federal claims for decision by the state courts waives the right to litigate its federal claims in federal court. England, 375 U.S. at 419, 84 S.Ct. at 467. Thus, if Ivy had any hope of benefitting from the court’s decision to defer its exercise of jurisdiction rather than dismiss the case, Ivy necessarily had to refrain from litigating its federal issues in state court.
We are therefore left with a balancing of the equities. Ivy, on the one hand, detrimentally relied on the district court’s decision to stay this action. As a result, there has been no adjudication of Ivy’s federal claims to date. The State, on the other hand, has been litigating this case for over ten years and, had the State successfully presented the Younger abstention, it could have ended the litigation. We are less troubled, however, by any perceived unfairness to the defendants because of two factors: First, it was in response to the defendants’ urging that the court abstained under Pullman. Tiger Inn v. Edwards, 636 F.Supp. at 789. Second, at least on the record before us, the defendants failed to raise any objection to Ivy’s England reservations in the state court. Accordingly, a sense of basic fairness dictates that Ivy be permitted to litigate its federal claims in the federal forum. Unreviewed state administrative proceedings cannot be considered a sufficient and fair opportunity to fully litigate Ivy’s federal claims, the merits of which we do not reach.
The dissent disagrees with our holding that Ivy has been deprived of a full and fair opportunity to litigate its federal claims, arguing that this case should be treated as a straightforward Pullman/England case. The dissent would prefer that we ignore the procedural history of this case, stating that even if the Pullman abstention were incorrect, it has become “the law of the case.” The law of the case argument, however, supports the majority view for it validates the exercise of equitable principles under the unique circumstances of this case. However, were we just to assume that the Pullman abstention was the “law of the case” and not discuss its inappropriate use in the situation we have here, nothing would discourage, or indeed, prevent future parties from relying on it as binding precedent.
The omission of any discussion of the impropriety of applying Pullman/England abstention in the present case could mislead future state court defendants into believing that they always have an opportunity to litigate their federal claims in federal court. According to the dissent, Ivy may not return to federal court to litigate its federal claims because it did not sufficiently reserve its England rights in the state administrative proceedings pertaining to jurisdiction. Following that argument to its logical conclusion, one would conclude that had Ivy only raised its England reservations from the moment it was summoned in the state administrative proceedings, Ivy could come into federal court to have its federal claims decided on the basis that Ivy had sufficiently reserved its rights under England.
Under the jurisprudence as it stands today, that is not the law. As we discuss supra at 280, federal courts must give state-court judgments both issue and claim preclusion effect in subsequent actions under section 1983. Section 1983 did not give state-court defendants the unrestricted right to litigate their federal rights in federal court. See Allen v. McCurry, 449 U.S. at 103, 101 S.Ct. at 419 (no authority for proposition that every person asserting a federal right is entitled to one unencumbered opportunity to litigate that right in federal district court, regardless of the legal posture in which the federal claim arises). The state-court defendant may successfully invoke federal court jurisdiction only if the defendant successfully amounts the Younger bar to obtaining an injunction of the state court proceedings or if removal is available pursuant to the Civil Rights Removal Act.
Notwithstanding, having sought injunc-tive relief immediately upon the final decision of the state administrative agency on the question of jurisdiction and having been the beneficiary of a Pullman abstention, although erroneously granted, Ivy should not be deprived of subsequent access to the federal court at the conclusion of the state court proceedings in which it refrained from litigating its federal claims. The dissent dismisses this proposition, stating that it is "without precedent." It is hardly surprising that no court has encountered the anomalous situation presented here. That no court has decided what should happen under these unique circumstances does not mean that we cannot, or should not, decide the case according to the dictates of justice. A court should not mechanistically apply precedent and when finding none to fit the case at bar, throw up its hands and state that the equitable issues may not be explored.
Rightly or wrongly, the district court retained jurisdiction in this case and did not preclude Ivy from returning to federal court. On the contrary, it held out the opportunity for Ivy to return. It is meaningless to retain jurisdiction just to rule at a later date that Ivy never had any right to return to federal court. Ivy's detrimental reliance on this judicial grant of jurisdiction resulted in a loss
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
ALDISERT, Circuit Judge.
The major question for decision in this diversity case tried non-jury under Pennsylvania law is whether, in the absence of agreement, goods lost by a bailee are valued at the time of bailment or at the time the bailor demands their return. The district court determined damages based on the value of the goods at the time of bailment and the bailor appeals. The bailee’s cross-appeal requires us to decide as a threshold matter whether the district court erred in concluding that the bailment was for mutual benefit requiring the bailee to exercise ordinary care, rather than a gratuitous bailment requiring only slight care. Finally we must decide whether the district court erred in refusing to award damages for delay, sometimes called “pre-judgment interest.” We reverse the court’s damage award and remand on the issue of pre-judgment interest.
I.
The present controversy arises out of the bailor’s aborted plan to build a rayon manufacturing plant in Tennessee. American Enka Company, plaintiff below, employed Chemtex, Inc., as its agent to build the plant and Chemtex, in turn, engaged Wicaco Machine Corporation, defendant below, to fabricate spinnerette housings and clusters for use in the plant. Because the spinnerettes are immersed in acid during rayon manufacturing, they are constructed of hastelloy, a special alloy comprised of nickel, chromium, molybdenum, and carbon. In October 1974, at Chemtex’s directions, Wicaco purchased and took delivery of 6,000 pounds of hastelloy for $23,250.00, and billed Chemtex for that amount. Chemtex paid Wicaco and Enka in turn reimbursed Chemtex. The parties agree that this transaction created a bailor-bailee relationship between Enka and Wicaco respectively.
Declining demand for rayon caused Enka to suspend the project for six months in November 1974, but Wicaco agreed to store the hastelloy ingots in its plant until the project resumed, in return for immediate payment of services and materials it already had provided under the agreement. In March 1975, Enka informed Chemtex that the Tennessee project would be can-celled; Wicaco was not notified. One year later the board of directors of Akzona, Inc., Enka’s parent company, formally cancelled the construction project and apparently Wicaco learned of the cancellation at about the same time.
Even though it knew that the Tennessee project had been cancelled, in April 1977, Wicaco agreed to hold the hastelloy for a while longer at no additional charge. In the meantime and until early 1979 Enka tried to find a use for the hastelloy but was unsuccessful. Those efforts included collaboration between Enka and Chemtex to design a spinnerette cluster for use on equipment in existing Enka facilities. In June 1977, Enka requested a quotation from Wicaco for forty spinnerettes, but Wicaco’s bid was rejected because it was too high. Finally, on January 17, 1979, Chemtex demanded that Wicaco return the hastelloy to Enka; Wicaco responded that it was unable to locate the ingots, and they are still unaccounted for.
Enka sued Wicaco demanding damages of $52,800, the market price of hastelloy at the time of the 1979 demand, more than double the price paid in 1974. After hearing the evidence non-jury, the district court determined that the bailment was for the mutual benefit of Enka and Wicaco and held that Wicaco had breached its duty of care in storing the ingots. The court awarded only $23,250 in damages, however, on the theory that Wicaco could only be held liable to the extent of the risk it agreed to undertake when the bailment was created. Pursuant to Pa.R.Civ.P. 238, the court awarded “prejudgment interest” from the date of the complaint to the date of judgment, but refused Enka’s request for common law pre-judgment interest for the period between the demand and the complaint because it did not find that the defendant engaged in the type of misconduct warranting additional damages for delay.
Enka appeals, arguing that the basis of the award should be the value on the date of demand and that it is entitled to prejudgment interest from that date; Wicaco cross-appeals, contending that the bailment was for the sole benefit of the bailor and that under the reduced standard of care for such bailments it is not liable.
II.
A bailment is a delivery or deposit of personalty under an implied or express agreement that at the termination of the bailment the personalty will be redelivered to the bailor, otherwise dealt with according to the bailor’s directions, or kept until the bailor reclaims it. Wright v. Sterling Land Co., 157 Pa.Super. 625, 627, 43 A.2d 614, 615 (1945). Although the bailor-bailee relationship has its origins in contract, liability is based on the tort concept of negligence. Thus ordinarily a bailee is not an insurer of the property absent an express agreement, Light v. Miller, 38 Pa.Super. 408, 414 (1909), and will be held liable for loss of or damage to the bailed property only upon proof of a departure from the appropriate standard of care, id. Recognizing the superior position of the bailee to account for the goods, the courts cast on the bailee the burden of coming forward with evidence of due care once the bailor has demonstrated delivery to the bailee and failure to return or return of the goods with damage. E. I. duPont de Nemours & Co. v. Berm Studios, Inc., 211 Pa.Super. 352, 357, 236 A.2d 555, 557 (1967).
The standard of care imposed on the bailee under Pennsylvania law is determined by the classification of the bailment, whether for mutual benefit of the bailee and bailor, for the sole benefit of the bailor (a gratuitous bailment), or for the sole benefit of the bailee. First National Bank of Carlisle v. Graham, 79 Pa. 106, 116 (1875). If the bailment is for the bailor’s sole benefit, Pennsylvania law requires only slight diligence on the part of the bailee and correspondingly imposes liability only for gross neglect. E. I. duPont de Nemours & Co. v. Berm Studios, Inc., 211 Pa.Super. at 356, 236 A.2d at 557. If for the sole benefit of the bailee, the bailee is liable for damage caused by slight negligence. First National Bank of Carlisle, 79 Pa. at 116. A bailment for the mutual benefit of bailor and bailee requires the bailee to exercise reasonable and ordinary care. Fidelman-Danziger, Inc. v. Statler Management, Inc., 390 Pa. 420, 136 A.2d 119, 123 (1957); Kleckner v. Hotel Strand, 60 Pa.Super. 617 (1915).
III.
The dispute in this case is whether the facts establish a bailment for mutual benefit or one for the sole benefit of Enka. Wicaco argues that although the bailment began as one for mutual benefit because of its expectation of profit in making the spinnerettes, once Enka notified it that the Tennessee project was cancelled, Wicaco’s agreement to continue holding the ingots without charge converted the bailment to one for the sole benefit of the bailor. Accordingly, it contends that it can be held liable only for gross neglect.
Classification of a bailment as one for mutual benefit does not require the bailor to demonstrate a specific, tangible benefit or compensation running to the bailee. Pennsylvania’s appellate courts have said that “a possibility or chance of expected profit to accrue” from the bailment is sufficient to make the relationship one for mutual benefit. Kleckner, 60 Pa. Super, at 620. See also Woodruff v. Painter & Eldridge, 150 Pa. 91, 24 A. 621 (1892). The specific question presented for review is whether, as the district court found, Wicaco retained a realistic expectation of profit from the bailment relationship after the Tennessee project was cancelled. Because the nature of the relationship in this case turns on the objective expectations of the bailee, it is a question of fact, and our review of the district court’s decision is limited by Fed.R.Civ.P. 52(a), the clearly erroneous rule. See Universal Minerals, Inc. v. C. A. Hughes & Co., 669 F.2d 98, 104 (3d Cir. 1981). •
We conclude that the district court’s findings were supported by the evidence and we reject Wicaco’s argument because it ignores the business realities of Wicaco’s relationship with Enka. As evidenced by the testimony of Wicaco president Donald F. Palmer, Wicaco expected either that the Tennessee project would be revived or that it would receive future orders from Enka and Chemtex, or Chemtex alone, allowing use of the bailed hastelloy. Indeed, in June 1977 Enka solicited a Wicaco bid for the manufacture of spinnerettes for use in existing Enka plants. Because Wicaco is in the business of manufacturing mill equipment, not the storage of metal alloys, an expectation of future orders would be sufficient to make the bailment one for mutual benefit. We therefore conclude that the district court’s finding that the bailment was for mutual benefit was not clearly erroneous. Because Wicaco does not contend in its cross-appeal that the district court erred in holding that it breached the duty of ordinary care, we turn to Enka’s appeal challenging the amount of damages and the refusal to award common law pre-judgment interest.
TV.
The appropriate measure of damages is not always free from doubt. Lord Holt in Serrer v. Beale, 1 Lord Raym. 692 (1707), stated that “[ejveryone should recover damages in proportion to the prejudice which he hath sustained.” E. Re, Cases and Materials on Remedies 756 (1982). Although the district court awarded judgment to Enka it refused to impose liability for more than the value of the ingots on the date of delivery. Relying on Fidelman-Danziger, Inc. v. Statler Management, Inc., 390 Pa. 420, 136 A.2d 119 (1957), the court reasoned that Wicaco assumed the risk of loss of hastelloy at the price when delivered and that in the absence of proof that Enka informed it of an increase in value, Wicaco could be held liable for no more.
We conclude that the district court’s reliance on Fidelman-Danziger is misplaced. In that case, the Pennsylvania Supreme Court held that a hotel could not be held liable for the value of diamonds contained in a suitcase checked at a hotel checkroom when the bailor failed to inform the bailee of the extraordinary value of the case’s contents. The court reasoned that in the absence of notice of the bailed property’s unusual value, the hotel would not be expected to exercise the ordinary care consonant with its possession of an extremely valuable item. The court relied on a series of cases holding bailees of automobiles not liable for loss of items concealed in them, all of which turned on the bailee’s lack of notice of the existence of the lost item. Mee v. Sley System Garages, Inc., 124 Pa. Super. 230, 188 A. 626 (1936); Moss v. Jannetti Body Co., 101 Pa.Super. 1 (1930). See also Hunter v. Reed’s Sons, 12 Pa.Super. 112 (1899) (bailor should have given notice of diamond ring in pocket of bailed trousers so bailee could take precautions or decline the bailment).
Although no Pennsylvania appellate decision disclosed by the parties or in our own research controls our disposition, we conclude that the present case is more clearly analogous to Peet v. Roth Hotel Co., 191 Minn. 151, 253 N.W. 546 (1934), and we believe that the Pennsylvania Supreme Court would adopt its analysis. In Roth Hotel, a hotel guest left a diamond ring with the desk clerk, directing her to deliver it to a certain person. The ring was lost and the hotel defended the suit brought by the bailor on the ground that it was not informed of the value of the ring. In rejecting this defense the Minnesota Supreme Court observed:
The claim here is, not that plaintiff perpetrated fraud upon defendant, but that she failed to divulge the unusual value of her ring when she left it with Miss Edwards. • The latter testified that, at the moment, she did not realize its value. Taking both facts and their implications as favorably as we may for defendant, the stubborn truth remains that plaintiff delivered and defendant accepted the ring with its identity and at least its outward character perfectly obvious.
The [plaintiff] delivered and the [defendant] accepted the ring to be delivered to Mr. Hotz. Below that irreducible minimum, the case cannot be lowered.
If there was mistake with legal effect worth while to defendant, it must have been of such character as to show no mutual assent and so no contract. There was no such error here. Identity of the property and all its attributes, except only its value were as well known to defendant as to plaintiff.
191 Minn, at 154, 253 N.W. at 547.
Unlike Fidelman-Danziger and the cases on which it relied, Roth Hotel and the present case do not involve items of value concealed in the bailed item. Here the bailment was of 6,000 pounds of hastelloy and therefore the agreement was for the return of 6,000 pounds of hastelloy. The nature of the bailed goods was apparent to the bailee and gave notice of their value; moreover, the bailee was an experienced manufacturer of specialized machinery parts and can be charged with knowledge of the change of metal alloy market conditions during the course of the bailment, in contrast to the hotel in Fidelman that could not be charged with knowing the value of contents of a closed case. Cf. Samples v. Geary, 292 S.W. 1066 (Mo.App.1927) (bailee of coat checked in parcel room not liable for concealed fur piece). Although it is not necessary to our decision, there is evidence that Wicaco knew or should have known of the increased value of the hastelloy. Accordingly it is liable for its value on the date of Enka’s loss. See generally I.C.C. Metals, Inc. v. Municipal Warehouse Co., 50 N.Y.2d 657, 431 N.Y.S.2d 372, 409 N.E.2d 657 (1980); Proctor & Gamble Distr. Co. v. Lawrence American Field Warehousing Corp., 16 N.Y.2d 344, 350-352, 266 N.Y.S.2d 785, 789-791, 213 N.E.2d 873, 876-77 (1965).
On at least one occasion a Pennsylvania appellate court has concluded that the time of demand is the appropriate time for determining the date of loss and thus for measuring damages in a bailment. Luntz v. Berry, 35 Pa.Super. 204 (1908); see also J. E. Faltin Motor Trans., Inc. v. Eazor Express, Inc., 172 F.Supp. 175,179 (W.D.Pa. 1959), aff’d, 273 F.2d 444 (3d Cir. 1960) (value calculated at time of destruction of bailed property). We believe that the date of demand is the appropriate day for the calculation of the loss in this case because that is the earliest date on which Enka realized that it had suffered damage and the earliest date on which it would have been in a position to mitigate its damages. To accept Wieaco’s argument would be to deny Enka a complete remedy. See also Berry v. Heinel Motors, Inc., 162 Pa.Super. 52, 58, 56 A.2d 374, 377 (1948); Campbell & Setzer v. Clark & Melia, Inc., 150 Pa.Super. 635, 641, 29 A.2d 350, 353 (1942) (damages for conversion are calculated as of the time of conversion). We believe that the Pennsylvania Supreme Court would reach the same conclusion if confronted with the present facts. The rule we apply today is also rooted in the practical realization that a contrary rule might tempt bailees of commodities increasing in value to convert the bailed goods. A bailee unwilling to risk increased liability, on the other hand, would be in the best position to insure against loss or limit its liability through agreement with the bailor. See Proctor & Gamble Distr. Co., 16 N.Y.2d at 353, 266 N.Y.S.2d at 791, 213 N.E.2d at 877.
Accordingly, we conclude that the court erred in assessing damages on the basis of the value at the time of bailment instead of the value at the time of the demand, January 17, 1979.
V.
A tort plaintiff in Pennsylvania has potentially two distinct sources of compensation for delay, often referred to in shorthand fashion as “pre-judgment interest.” First, Pa.R.Civ.P. 238 provides that a plaintiff who recovers for personal injury, death, or property damage is entitled to interest at the rate of 10 per cent from the date of the complaint. See Laudenberger v. Port Authority of Allegheny County, 496 Pa. 52, 436 A.2d 147 (1981), appeal dismissed,- U.S. -, 102 S.Ct. 2002, 72 L.Ed.2d 462 (1982). In Jarvis v. Johnson, 668 F.2d 740 (3d Cir. 1982), we held that Rule 238 applies in diversity cases. By its terms, Rule 238 seems to be mandatory. Hayden v. Scott Aviation, Inc., 684 F.2d 270, 271 (3d Cir. 1982). Here the district court concluded that Rule 238 applied and awarded 10 per cent interest on $23,250 from the date of the complaint.
The second source derives from an extension of the common law rule that allowed damages for delay in contract actions involving liquidated sums, true “pre-judgment interest.” Common law pre-judgment interest is based on the principle of compensation and the understanding that a plaintiff wrongfully deprived of a sum of money is not made whole unless the delay in recovery is accounted for. Pre-judgment interest in Pennsylvania contract cases is a matter of right and is calculated from the time the money becomes due or payable. Penneys v. Pennsylvania R. R. Co., 408 Pa. 276, 183 A.2d 544 (1962); Oxford Mfg. Co. v. Cliff House Bldg. Corp., 224 Pa.Super. 387, 307 A.2d 343 (1973). See also Eazor Express, Inc. v. Teamsters, 520 F.2d 951, 973 (3d Cir. 1975), cert. denied, 424 U.S. 935, 96 S.Ct. 1149, 47 L.Ed.2d 342 (1976); Restatement of Contracts § 337(a).
Pre-judgment interest, by name, is not awarded in Pennsylvania actions other than contract, but what is described as damages for delay may be awarded in other actions, including certain tort actions. Thus in these cases, Pennsylvania employs a charming legal fiction, in the true ancient Roman ficto, fictiones, sense and although disavowing pre-judgment interest by name allows a contract pre-judgment interest counterpart “where not only the principle on which the recovery to be had is compensation, but where, also, the compensation can be measured by market value or other definite standards.” Richards v. Citizens Natural Gas Co., 130 Pa. 37, 40, 18 A. 600, 600 (1889). See also Marrazzo v. Scranton Nehi Bottling Co., 438 Pa. 72, 74-75, 263 A.2d 336, 338 (1970). In these instances, usually involving conversion or destruction of property, Pennsylvania courts have emphasized that time may be an important factor and “the plaintiff will not be fully compensated unless he receive not only the value of his property, but receive it, as nearly as may be as of the date of his loss.” Citizens Natural Gas, 130 Pa. at 40, 18 A. at 600. .
Hence it is that the jury may allow additional damages, in the nature of interest, for the lapse of time. It is never interest as such, nor as a matter of right, but compensation for the delay, of which the rate of interest affords the fair legal measure. . . .
[T]he allowance of compensation for delay depends on the circumstances and must therefore be determined by the jury-
id. Common law damages for delay, whether true pre-judgment interest or not, are awarded at the statutory rate (presently 6 per cent, Pa.Stat.Ann. tit. 41, § 202) from the date the cause of action arose. Thus it is clear that in Pennsylvania common law damages for delay are recoverable in tort actions when the amount is liquidated or capable of mathematical ascertainment, but unlike contract pre-judgment interest where the award of such interest is mandatory, the granting of delay damages in tort cases is discretionary with the fact-finder after considering all the circumstances. Although there are no Pennsylvania cases on point it also seems to us that there can be no duplication of common law damages for delay and Rule 238 damages for the period between the filing of the complaint and the judgment. To review the district court’s award of delay damages here, we must determine whether the district court misused its exercise of discretion.
The parties do not contend that the dispute was over an unliquidated sum; rather, the dispute was over two liquidated amounts determined by the market value of hastelloy on the relevant dates: $23,250 or $52,800. A debt is considered liquidated when it is capable of ascertainment with mathematical precision, or as stated in Citizens’ Natural Gas, “by market value or other definite standards,” and a dispute between two amounts so ascertained does not alter its liquidated character. Cf. Oxford Manuf. Co., 224 Pa.Super. at 390, 307 A.2d at 345; Restatement of Contracts § 337(a) (bona fide dispute over liability or amount of damages in contract action does not defeat right to pre-judgment interest).
Enka claims instead that the district court’s limited pre-judgment interest award did not make it whole and that therefore the district court abused its discretion. It supports its claim by pointing out that the price of hastelloy continued to rise between the date of demand and the date of the complaint, a fact that underscores the inadequacy of the district court’s denial of damages for delay.
Although Enka’s argument has force, we are bound by Pennsylvania law and its allocation of broad discretion in the fact-finder after considering all the circumstances; Enka implicitly admits that it cannot claim common law damages for delay as a matter of right. Here, the district court applied the correct legal standard and plainly considered all the circumstances in rejecting Enka’s claim:
In consideration of the record and under all the circumstances, the Court does not believe that plaintiff is entitled to additional delay damages from the time of the loss to the time that the action was commenced inasmuch as by reason of the Court’s findings it cannot be said that the delay was caused by the type of conduct that in the Court’s view would support the imposition of additional damages.
District court order denying plaintiff’s motion for amendment of judgment and findings (Jan. 4, 1982), app. at 308 (citing Marrazzo).
Nevertheless, we will remand this issue to the district court for reconsideration in light of our holding that the court erred in its assessment of damages. We do so because it is apparent to us that one of the factors the court may have considered in denying common law damages for delay is what it perceived as an excessive demand by Enka for the value of the hastelloy on the date of demand. See Marrazzo; Pierce v. Lehigh Valley Coal Co., 232 Pa. 170, 81 A. 142 (1911) (jury may consider plaintiff’s excessive demand as a factor in denying damages for delay). A remand will allow the district court to reevaluate all the circumstances in light of our holding on damages. See Marrazzo, 438 Pa. at 77, 338 A.2d at 338 (remand for findings of fact and conclusions of law required when record did not reveal legal standard applied or circumstances considered by trial court in denying damages for delay); Wade v. S. J. Groves & Sons Co., 283 Pa.Super. 464, 478, 424 A.2d 902, 909 (1981) (remand to trial court for assessment of responsibility for delay and statement of circumstances considered in decision).
VI.
The judgment of the district court will be reversed and the proceedings remanded with a direction that the district court enter judgment in favor of the appellant Enka in the amount of $52,800 plus interest under rule 238, and for further proceedings consistent with this opinion on the issue of common law damages for delay from the date of demand to the filing of the complaint.
. Wicaco’s reliance on Boys Novelty Suit Co. v. Garfield, 76 Pa.Super. 365 (1921), is also misplaced. That case involved a dispute over the value of goods at the time of bailment and bound the bailor to its own memorandum of value. The documents Wicaco points out as analogous in the present case were clearly intended only to identify the bailed goods, not to indicate agreement on value. Moreover, that case did not involve a fluctuation in value of the bailed goods and, unlike Boys Novelty Suit, there has never been a disagreement in this case about the value of the hastelloy.
. Rule 238 provides in pertinent part:
[I]n an action seeking monetary relief for bodily injury, death or property damage, . .. the court . . . shall
(1) add to the amount of compensatory damages ... in the court’s decision in a non-jury trial, damages for delay at ten (10) percent per annum, not compounded, which shall become part of the award, verdict or decision;
(2) compute the damages for delay from the date the plaintiff filed the initial complaint in the action or from a date one year after the accrual of the cause of action, whichever is later, up to the date of the award, verdict or decision.
. See H. Maine, Ancient Law 25-26 (1861). A legal fiction conceals or tends to conceal the fact that a rule of law has undergone alteration, its letter remaining unchanged, its operation being modified.
. When the claim is for personal injuries, damages for delay are not recoverable because damages are assessed as of the date of trial. Conover v. Bloom, 269 Pa. 548, 112 A. 752 (1921).
. In Peterson v. Crown Financial Corp., 661 F.2d 287 (3d Cir. 1981), this court suggested that Pennsylvania trial courts have discretion to award damages for “wrongful detention” of money- — yet a third type of damage for delay— in excess of the statutory rate, based on the equitable theory of disgorging unjust enrichment. This is not a case of wrongful detention of money and Enka does not contend that Wicaco has been unjustly enriched.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
DENMAN, Circuit Judge.
This is an appeal by claimants, owners of cargo shipped on the steamer Denali, from a decree of the district court exonerating the Alaska Steamship Company, the Denali’s owner, from liability for the total loss of their cargo in the stranding of that steamer on a submerged reef in the Caamano Passage,, British Columbia, on a voyage from Seattle, Washington, to Alaskan ports. The ■ proceedings commenced in a petition of the Steamship Company, filed September 4, 1935, for the limitation of and exoneration from liability provided by the Limitation Statutes, 46 U. S.C.A. § 183 et seq., and the Supreme Court Admiralty Rules, 28 U.S.C.A. following section 723. Appraisement was duly made of ship and pending freight, a stipulation of their values given, and the jurisdictional requirements of the statute and rules have been complied with.
The cargo claimants seek to establish as error in the decree appealed from its failure to hold (A) that the vessel violated the Act of May 11, 1918, Chapter 72, 40 Stat. 548-550, 46 U.S.C.A. §§ 222, 223, 235, in that the stranding was caused by the negligent navigation of the mate in charge of navigation, who was required by the Steamship Company to serve and, in fact, was serving at the time of the stranding in violation of the “three-watch” division of the mates’ period of navigating service required by the statute; (R) that the vessel was unseaworthy because of defective compasses existing at the time of the commencement of the voyage, which a proper inspection would have disclosed, and which defect causatively contributed to the stranding; (C) that the ship was un- . seaworthy as to her charts, and the absence of a proper chart of Caamano Passage causatively contributed to the collision; (D) that the owner had privity in and knowledge of the violation of the statute with regard to the watch system of the mates and of her unseaworthiness as to compasses and charts and hence was not entitled to a limitation of liability; and (E) that the Steamship Company had failed to use due diligence to make the vessel seaworthy and hence was not entitled to the benefit of the Harter Act, 46 U.S.C.A. § 192.
(B and C) With regard to the cargo-owners’ charges respecting the compasses and charts, the district court, on conflicting evidence, decided that the vessel was not unseaworthy as to either and that neither the character of the charts nor compasses causatively contributed to the stranding. We so hold.
(A) Regarding the claimed violation, of the Act of May 11, 1918, Chapter 72, supra, of the three watch provisions for the Denali’s mates, that act makes it unlawful for a vessel to be navigated unless she have a “complement of licensed officers * * * necessary for her safe navigation”. It provides: “No vessel of the United States subject to the provisions of this title [chapter or chapters 14 or 15] or to the inspection laws of the United States shall be navigated unless she shall have in her service and on board such complement of licensed officers and crew including certificated lifeboat men, separately stated, as may in the judgment of the local inspectors who inspect the vessel be necessary for her safe navigation. The local inspectors shall make in the certificate of inspection of the vessel an entry of such complement of officers and crew including certificated lifeboat men, separately stated, which may be changed from time to time by indorsement on such certificate by local inspectors by reason of change of conditions or employment. * * 46 U.S.C.A. § 222. (Emphasis supplied.)
What constitutes such a complement of mates is provided by Section 2 of the Act, 46 U.S.C. § 223, 46 U.S.C.A. § 223. For a steamer of over 1000 gross tons, such as the Denali, to have a “complement of licensed officers” there must be something more than the mere “number” of mates entered in the certificate of inspection, ff the vessel have a “complement” of mates they must satisfy a “scale” requiring that they “shall stand in three watches while such vessel is being navigated”. Section 2 provides: “That the board of local inspectors shall make an entry in the certificate of inspection of every ocean and coastwise seagoing merchant vessel of the United States propelled by machinery, and every ocean-going vessel carrying passengers, the minimum number of licensed deck officers required for her safe navigation according to the following scale:
“That no such vessel shall be navigated unless she shall have on board and in her service one duly licensed master.
“That every such vessel of one thousand gross tons and over, propelled by machinery, shall have in her service and on board three licensed mates, who shall stand in three watches while such vessel is being navigated, unless such vessel is engaged in a run of less than four hundred miles from the port of departure to the port of final destination, then such vessel shall have two licensed mates; and every vessel of two hundred gross tons and less than one thousand gross tons, propelled by machinery, shall have two licensed mates.
(Emphasis supplied.)
The inspectors’ statutory duty with regard to the complement requirement of Section 1, as detailed in Section 2, ends in the entry on their certificate of the “minimum number” of mates. (Emphasis supplied). The so-called “scale” itself prescribes for the vessel the necessary watch function of the mates when so numbered. The three-watch requirement for the mates would be meaningless as a safety provision if a vessel of over 1,000 gross tons could be considered as having satisfied the statutory duty by having a complement of mates sufficient in number, but who are required by the owner to stand on a two-watch instead of a three-watch division, when the vessel is being navigated. In re Pacific Mail S. S. Co., 9 Cir., 130 F. 76, 82, 69 L.R.A. 71.
Apart from the plain phraseology of the Act, we have the administrative practice of the Department of Commerce, shown in its printed forms of its certificates of inspection which provide only for the entry of the number of mates and make no repetition' of the statutory command that they shall stand in three watches. That command is directly from the statute to the vessel and her owner.
The word “watch” in maritime parlance has two meanings. It refers to the division of the day into time periods of service of the officers and crew, and also to the division of such persons for that service. By immemorial Anglo-Saxon maritime custom, the time period of a watch never exceeds four hours.
When a vessel’s three mates are divided into three watches in each of which stands but one of three mates, the watch time of each mate will be 8 hours a day, served in watches not exceeding 4 hours each. The Congressional intent was to make impossible the former “watch and watch” system in which the crew was divided into two watches “starboard” and “port”, so named because the former had their bunks on the starboard side of the forecastle and the latter on the port side. In the two watch system, the total number of sailors of each grade was divided by two, and if there was an odd man he was assigned to the port watch. The starboard or captain’s watch was usually commanded by the captain, though sometimes by the second mate. The port watch was commanded by the first mate. Under the two watch system the crew and officers commanding them stood on watch twelve hours a day.
Since the statute itself describes its purposes to be for safe navigation, and since there would be no gain in avoiding disaster to the ship from fatigue in her navigating officers were the watches so divided that one of the mates was required to stand twelve hours navigating service in time periods exceeding four hours each, and since by long established custom the work of men on watches is equally divided, we hold that so far as concerns mates on watch and navigating the vessel the statute prohibits her navigation if they serve more than eight hours a day. Cf. O’Hara v. Luckenbach S. S. Co., 269 U.S. 364, 370 et seq., 46 S.Ct. 157, 70 L.Ed. 313.
The three-watch 8 hour limitation is a specific provision for mates while the vessel is navigating. Hence it prevails over a general provision in Section 3 of the Act applying to all licensed officers, limiting their service to 12 hours a day.
The question then is, Did the Denali have a complement of three mates who were to obey the statute and stand in three watches while the vessel was being navigated? The evidence is overwhelming that she did not.
The Denali, as stated by the Steamship Company’s brief, had four licensed mates. They were the first, second and third mates, and pilot Obert. Obert is admitted by that brief to have been “used” by the Steamship Company as the fourth mate. It is Obert’s and the third mate’s watch service time which is of paramount importance here, because Obert was navigating the vessel with the third mate’s assistance when the disaster occurred. The first mate stood no regular watch on the voyage in question and this was the custom on the Steamship Company’s 19 vessels in the Alaska trade, though he occasionally relieved the Captain and second mate.
As we have seen, the second mate and third mate and the pilot “used” as a mate, each should have served but 8 hours a day. Concerning the former two’s actual time of service, the captain testified that the second and third mates were “required” to serve 8 hours in two “compulsory” watches but “customarily” and “voluntarily” they served a longer time in another watch.
This is surprising testimony. Knowing something of the modern sailor and the watchfulness of corporate managers over their labor costs, this maritime court wonders how long the second and third mate would have held their jobs if they failed “customarily” and “voluntarily” to violate the provisions of this safety statute and in a third or fourth watch period serve over its required time. What this customary violation of the statute consisted of is plainly inferable from the captain’s testimony :
“Q. It has been the practice of the Alaska Steamship Company for many years on freighters like this for the master and the pilot to stand alternate watches of six hours, is that right? A. Yes.
“Q. And during the master’s watch the second mate stands with him, is that right? A. Yes.
“Q. And during the pilot’s watch the third mate stands with him? A. Yes.
“Q. Who was in charge of the watch during the time that the pilot and third mate were on the bridge, that is the, the 6:00 to 12:00 watch ? A. The pilot and third mate were not on the 6:00 and 12:00 watch.
“Q. On the 12:00 to 6:00 watch, I should have said. A. On the 12:00 to 6:00 watch the pilot was in charge.
“Q The third mate took orders from the pilot? A. Yes, sir.
“Q. On all subjects? A. Yes, sir.
“Q. And during the 6:00 to 12:00 watch, who was in charge of the watch? A. The master.
“Q. And the second mate took orders from you? A. Yes, sir.
* * *
“Q. And then at noon — from noon to 6:00 P. M. on that date, Thursday, May 16, 1935, were Pilot Obert and the third mate on watch? A. Yes, sir, Obert and the third officer.”
We conclude that in each 24 hours the second and third mates each in fact stood more than 8 hours watch duty in three or more 4 hour watch periods.
With regard to the remaining mate, that is Pilot Obert, “used” as mate, the testimony is uncontradicted that his watch service was 12 hours a day, stood in two 6 hour periods, — that is to say, in two full 4 hour watch periods and extending 2 hours each into two other 4 hour watches. That is the method in which the ship was navigated and it is a matter of indifference whether it was by compulsion or in part by the acceptance of the owner of a service from the mates which was customary and voluntary. We hold that as to the second and third mates and Obert, the substituted mate, the owner was operating the vessel in violation of the three watch provisions of the statute.
The plain intent of the statute is that for a steamer of over 1000 gross tons there shall be at least four officers, the captain and the three mates, who shall share the burden of navigating her. The first mate, we have seen, had no regular navigating watch duty. Here, by the command of the Steamship Company, the vessel was sent oh her dangerous voyage with two of the four, the second and third mates, prohibited from navigating her wherever any risk to her was involved. This exclusion of two of the statutory four navigating officers is by an order of the Steamship Company, General Order number 13, issued to all masters:
“To all Masters and Pilots:
“April 4th, 1934.
“General Order.
“The practice of many of our Pilots leaving the bridge while the ship is under way has resulted in some serious accidents.
“Effective this date, excepting when the steamer is on the Gulf or in open water, never leave the ship in charge of second or third officers when approaching land and changing courses. These men are good officers but lack experience.
“The Master will see that this order is carried out and fully understood by all concerned.
“C. A. Glasscock,
“Port Captain.”
(Emphasis supplied.)
The vessel was wrecked by the fault of navigation of the substitute mate Obert,' who was “assisted” by the third mate, who acted under Obert’s orders. Since both men were' serving under a watch system used in violation of th’e statute, the burden falls on the Denali’s owner of showing not merely that the two watch system probably did not but that it could not have contributed to the stranding. The Pennsylvania, 19 Wall. 125, 136, 22 L.Ed. 148; Lie v. San Francisco & Portland S. S. Co., 243 U.S. 291, 298, 37 S.Ct. 270, 61 L.Ed. 726; The Silver Palm, 9 Cir., 94 F.2d 754, 759; The Eagle Wing, D.C., 135 F. 826, 832, affirmed 4 Cir., 162 F. 882; The Henry O. Barrett, 3 Cir., 161 F. 481, 485, certiorari denied 212 U.S. 573, 29 S.Ct. 683, 53 L.Ed. 656.
As this court, in reviewing and summarizing the cases, has said concerning this extraordinary burden of proof on violators of statutes governing vessels and their navigation and management, “Failure to obey a statute does, indeed, penalize the violator. The penalty, however, is not that the violator is to be held accountable for any mishap, regardless of its relation to the violation. The rule simply is that the violator is penalized with the burden of showing that the violation not only probably did not cause the accident, but that it could not have done so. This burden it is frequently extremely difficult, if not impossible, for the violator to discharge, in the nature of things; and therein lies the true penalty imposed upon him.” (Emphasis supplied.) The Princess Sophia, 9 Cir., 61 F.2d 339, 347.
Whether or not the Steamship Company has been able to satisfy this extraordinary burden of proof requires a consideration of the character of the voyage on which it dispatched the Denali. Her voyage from Seattle to Alaska was by the so-called “outside passage”. Her departure from Seattle was so timed that she was likely to be and was in fact required to steam from open waters and turn from a general north northwesterly course to a northerly course through Caamano Passage, in the early morning darkness, made the more difficult of navigation, as stated by the Steamship Company and as shown- by the log, by a hazy condition of the atmosphere.
The testimony is that so great are the dangers of Caamano Passage that 90 percent of the vessels steaming to Alaska avoid the outside passage route. The southern end of Caamano Passage, which the Denali was approaching, is between Dundas Island on the east and Zayas Island on the west. At the entrance of the Passage the shores of the two islands are about 2% miles apart, but rocks and submerged reefs off each island narrow the passage to 1% miles. There are no lights to guide the navigator.
The danger from the sunken reefs is greatly enhanced by powerful tidal currents, at this time running out the Passage and across the course of the Denali. The pilot-mate states the currents there were very “irregular” and unknown to him and unpredictable because not shown on any “pilot books or Coast Pilot or^ current books”. It is obvious that successive bearings in a cross-current of unknown force and unascertainable exactness of direction, taken by observing the hazy loom of some observable land, would have none of the certainty in determining the ship’s course that they have in currentless waters and clear weather. The unknown force and angle of the current makes an incalculable shift in the base line for the four point bearing necessary for exact observation.
As the Denali approached the passage it was planned by the pilot-mate to guide his vessel by ail observation of Prince Lebo Island, lying to the easterly of his course and about an hour’s steaming time to the south of the Passage. In the haze and darkness this was unobservable. Over an hour before the stranding, Obert, 62 years of age and obliged to wear glasses, abandoned his compass and stood at the open window of his pilot house straining his eyesight in the dark haze to guide his vessel clear of the reefs menacing the mouth of the channel. He said he had the loom only of Zayas Island and he could see “not plain” the 1200 to 1500 feet high peaks of Dundas Island. Thrown into increasing uncertainty by the current, which he miscalculated three tunes, and thus required him to make three changes of course in his attempts to reach the unseen channel, it is apparent that the Denali s safety was wholly dependent upon the mate s acuteness of observation, concentration and rapidity of judgment and celerity and accuracy of command to his helmsman. That he was unsuccessful and wrecked his vessel on a submerged reef off Zayas Island at the channel entrance is not surprising.
This 62 year old substitute for the first mate had navigated the ship for 12 hours in the preceding 24. If he had stood the first mate’s statutory time he would have served but 8 hours. The purpose of limiting the mates’ watches is to avoid fatigue, and the burden is on the owner to show that the 4 hour excess of effort in violation of the statute could not have contributed to the miscalculation in the hour of anxiety and strain which brought the vessel’s destruction.
With this difficult burden of proof on the Steamship Company, it offers no testimony at all on the general health and suryiving physical vigor of Obert, well past fog middle age. More significant, the Steamship Company did not ask Obert, its 0wn witness, nor did he testify, whether or not he feit fatigued from his 12 hours 0f service as both pilot and mate in the preceding 24 hours — significant because every admiralty lawyer knows the heavy burden on his owner-client where a statutory command is violated in the navigation of its vessel.
Similarly with regard to Obert’s asgigtant, the third mate, also a witness for the Steamship Company. By the Company’s orders he was prohibited from navigating the Denali except in the Gulf of Alaska and in open waters. He attempted to verify for his navigating mate the location of the vessel in the changing bearings 0f the dimly looming islands, as the vessel proceeded in the unknown current and darkness. It is evident that he had miscalculated a bearing he was asked to take on Zayas Island, for, shortly after he reported it, Obert thought they were clear 0f fhe reef and entering the channel,
Though the third mate was straining his and mind in hig duty of servi 0bert) after a violation of the statute by Hs ious hours of excess work t the c askcd him no tion and he no testimony concerning his physi„ cal Qr mental condition during the period of stress preceding the vessel’s destruction,
We hold that the Steamship Cornpany has not maintained its burden of proof that the violation of the statute could not have contributed to the disaster, and tkat tke carg0 was iost by tbe Company’s faujt
(D) With regard to a limitation of liability under the statute granting it, if the loss occurred without the Steamship Cornpany’s “privity or knowledge” the burden of proof is on it to establish their absence. The Silver Palm, 9 Cir., 94 F.2d 776, 777, and cases cited;
In the circumstances of this case, the quantum of that burden is the same as that heretofore discussed. Section 1 of the Act of May 11, 1918, provides that “No vessel [such as the Denali] * * * shall be navigated”, et cetera, with her mates regulated as to their watches in violation of Section 2 of the Act, as here found. During the entire voyage, including the navigation leading to the stranding, the navigation of the vessel was in violation of this command of the statute by the act of the Company’s management. This violation by the Company itself was participated in by Obert, as an agent; commanded by the petitioner for limitation to violate the statute. Here is both privity and knowledge. It is not conceivable that the Congress intended to give to such wrongdoing shipowners the extraordinary relief of the limitation act, with a less burden of proof relative to the effect of their wrongdoings, than for other violations of statutes for the safety of life and property at sea. Hence the extreme burden of proof of the Pennsylvania and Lie cases, supra, rested on the Company to show that its privity in and knowledge of the violation of the statute could not have contributed to the stranding. As shown it has not made such proof. We hold that the Steamship Company is not entitled to limit its liability to the owners of the cargo under the provisions of the Limitation of Liability statute and that the district court erred in its findings and decision to the contrary.
(E) With regard to the defense of the Harter Act, the burden is on the Steamship Company to establish concerning the Denali that it had exercised “due diligence to make the vessel in all respects seaworthy and properly manned, equipped, and supplied,”. May v. Hamburg, etc., 290 U.S. 333, 346, 54 S.Ct. 162, 164, 78 L.Ed. 348. No such diligence has been exercised where there exists on all the Company’s Alaska fleet such a customary violation of the three watch mandate for the mates as was permitted to exist on the Denali. The Steamship Company is not entitled to invoke the provisions of the Harter Act against the claims of the cargo owners.
The Steamship Company is liable to the owners of the cargo injured or lost by the stranding of the Denali and the amount of their damage should be ascertained and decreed to them against the Steamship Company.
Reversed.
Just as all the International Rules of Navigation, 33 U.S.C.A. § 61 et seq., are commands to the owner, though in text they are but directions for the navigation, of the vessel and do not mention the owner, so here the owner violates the statute if his vessel is navigated without its required complement of officers. Cf. In re Pacific Mail S. S. Co., 9 Cir., 130 F. 76, 81, 69 L.R.A. 71, where the owner was held liable under a similar statute which made the requirement regarding the officers and crew on the vessel and did not mention the owner.
“See. 3 [§ 234]. That it shall be unlawful for the master, owner, agent, or other person having authority to permit an officer of any vessel to take charge of the deck watch of the vessel upon leaving or immediately after leaving port, unless such officer shall have had at least six hours off duty within the twelve hours immediately preceding the time of sailing, and no licensed officer on any ocean or coastwise vessel shall be required to do duty to exceed nine hours of any twenty-four while in port, including the date of arrival, or more than twelve hours of any twenty-four at sea, except in a case of emergency when life or property is endangered. Any violation of this section shall subject the person or persons guilty thereof to a penalty of §100. 46 U.S.C.A. § 235.
Limitation of Liability Act, 46 U.S.C.A. § 183. “§ 183. Liability of Owner not to Bcuceed Interest. The liability of the owner of any vessel, for any embezzlement, loss, or destruction, by any person, of any property, goods, or merchandise, shipped or put on board of such vessel, or for any loss, damage, or injury by collision, or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred without the privity, or knowledge of such owner or owners, shall in no case exceed the amount or value of the interest of such owner in such vessel, and her. freight then pending. (R.S. § 4283.)”
Harter Act, 46 U.S.C.A. § 192. “§ 192. Limitation of Liability for Errors of Navigation, Dangers of the Sea and, Acts of God. If the owner of any vessel transporting merchandise or property to or from any port in the United States of America shall exercise due diligence to make the said vessel in all respects seaworthy and properly manned, equipped, and supplied, neither the vessel, her owner or owners, agent, or charterers, shall become or be held responsible for damage or loss resulting from faults or errors in navigation or in the management of said vessel * * * ”.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
WIDENER, Circuit Judge:
Plaintiff, as administrator for the estate of his son, Kevin Barry Perdue, brought this diversity action in the district court alleging that the Sears tires on the Cherry vehicle at the time of the accident in question contributed to his decedent’s death. The district court granted summary judgment for the defendant on the basis of a release given by the plaintiff to the defendant’s alleged joint tortfeasor. Perdue v. Sears, Roebuck & Co., 523 F.Supp. 203 (W.D.Va.1981). Plaintiff appealed, asserting that the district court misinterpreted the applicable Virginia statute. We affirm.
The facts in this case are not in dispute. Kevin Perdue was killed on December 3, 1979 while riding as a passenger in a vehicle driven by Terrence Cherry. A suit by plaintiff against Cherry, in the Circuit Court of Albemarle County, ended in a settlement. As a part of plaintiff’s petition to the court to settle the case, which settlement was approved by the court June 25, 1980, plaintiff stated that “the defendant [Cherry] is to be forever released and discharged.” Plaintiff subsequently instituted this action against Sears, alleging that the Sears tires on Cherry’s car contributed to the accident.
Defendant moved for summary judgment, arguing that the release of Cherry from further liability also released Sears under the Virginia common law doctrine that release of one joint tortfeasor releases all joint tortfeasors. The plaintiff countered that this doctrine was abrogated by a then applicable Virginia statute which provided, “When a covenant not to sue is given in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death,” this does not discharge other joint tortfeasors. Va.Code § 8.01-35.1 (in effect July 1, 1979 through June 30, 1980). Plaintiff argued that the term covenant not to sue was generic and included discharges which were labeled as releases. The district court disagreed, noting that the statute was unambiguous as written. Furthermore, the Virginia General Assembly had amended the statute, effective July 1, 1980, to specifically cover “a release or a covenant not to sue” rather than merely “a covenant not to sue.” The district court concluded that the statutory change was neither a clarification of the legislature’s previous intent nor a needless addition of a synonym. Rather, the district court reasoned, the 1980 amendment represented an increase in the scope of the earlier statute.
On appeal, plaintiff has repeated his argument that the term covenant not to sue is generic and includes releases. He claims that a contrary interpretation would be against the intent of the General Assembly, although he has provided no evidence of legislative intent other than passage of the 1980 amendment. The Virginia Supreme Court has not ruled on the meaning of Va.Code § 8.01-35.1 in effect on June 25, 1980, the day the release was given to Cherry.
We believe that the district court made a reasonable interpretation of Virginia law, and we could affirm on the basis of its opinion alone. Any doubt, however, as to the correctness of the district court’s decision was removed when the latest session of the Virginia General Assémbly further amended Va.Code § 8.01-35.1 by adding:
D. This section shall apply to all such covenants not to sue executed on or after July 1, 1979, and to all such releases executed on or after July 1,1980, regardless of the date the causes of action affected thereby accrued.
1982 Va. Acts c. 196. The interpretation of § 8.01-35.1 urged by the appellant would render this statute meaningless because it would require our holding that releases and covenants not to sue are the same. While § 8.01-35.1(D) did not take effect until April 1,1982 and thus arguably may not be directly applicable to the instant case, .we think it clearly indicates what our decision should be by its distinction between a release and a covenant not to sue, and is undeniable proof that the General Assembly has preserved the two distinct forms.
Accordingly, the judgment of the district court is
AFFIRMED.
. The Virginia General Assembly’s distinction in Va.Code § 8.01-35.1(D) between covenants not to sue and releases is consistent with a long recognized distinction in Virginia common law. It was long the law of Virginia that a release of one joint tortfeasor amounted to a release of all joint tortfeasors. Wright v. Orlowski, 218 Va. 115, 120, 235 S.E.2d 349, 352 (1977); Ruble v. Turner, 12 Va. (2 Hen. & M.) 38 (1808). On the other hand, a covenant not to sue one joint tortfeasor did not necessarily prevent actions against fellow tortfeasors. See Lackey v. Brooks, 204 Va. 428, 432, 132 S.E.2d 461, 464-65 (1963); Shortt v. Hudson Supply & Equipment Co., 191 Va. 306, 310, 60 S.E.2d 900, 903 (1950); 16 Michie’s Jurisprudence, Release § 3 (1979). This distinction does not depend altogether on the form of the instrument, however, because on at least two occasions the Virginia Supreme Court held that documents labeled as covenants not to sue one of several joint tortfeasors barred actions against other joint tortfeasors because the agreements and the instruments memorializing them were found to be accords and satisfaction. Wright, 218 Va. at 120-21; 235 S.E.2d at 354; Shortt, 191 Va. at 313-14; 60 S.E.2d at 904. Nevertheless, the distinction between covenants not to sue and releases remains viable in cases such as Lackey, supra, where the Court held that a covenant not to sue the master (lessee) in a lease agreement did not bar the lessor from suing the servant under a similar rule to that pertaining to the release of all joint tortfeasors by the release of one. 204 Va. at 432; 132 S.E.2d at 464-65.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
BARRETT, Circuit Judge.
Gene W. and Jule C. Reardon brought this suit under 28 U.S.C.A. § 1346(a)(1) for a refund of federal income taxes for 1968 in the amount of $401.37. The District Court held that Reardon was entitled to the refund and that the two applicable treasury regulations were ineffective to deprive Rear-don of the benefits conferred in Section 105(d). The Government appeals.
Reardon (taxpayer) was employed 28y2 years as an attorney for the IRS when he was forced to retire at age 51 on September 1, 1958, on total disability. He began receiving a total disability pension and annually deducted $5,200, the maximum income exclusion, pursuant to Section 105(d) of the IRS Code. In December of 1966, he reached age 60, at which time he would have qualified for optional service retirement if he had continued employment and served for 30 years. Mandatory retirement age is 70 years. In 1967 and 1968 taxpayer excluded $5,200 per year of his pension payments under Section 105(d) on the theory that they qualified for the limited sick pay exclusion. The Commissioner disallowed the exclusions on the theory that taxpayer had reached retirement age in 1966. The IRS issued a tax statement for 1967 and 1968 which showed an overpayment of taxes for 1967 and a deficiency in 1968 resulting in a net balance due the IRS of $401.37. Taxpayer paid the deficiency and filed this claim for refund.
The Government contends that the District Court erred in: (1) holding that Treasury Regulations §§ 1.79-2(b)(3) and 1.105-4(a) (3) (i) add an unauthorized restriction on the disability payment exclusion provided by Section 105(d) of the Code; (2) holding that taxpayer’s testimony as to his intent to continue Government employment until mandatory retirement age should be given controlling significance; and (3) granting declaratory relief to taxpayer.
I.
The Government contends that its treasury regulations properly define “retirement age” to qualify for the Section 105(d) exclusion. Section 105(d), 26 U.S.C.A., states in part as follows:
(d) Wage continuation plans.— Gross income does not include amounts referred to in subsection (a) if such amounts constitute wages or payments in lieu of wages for a period during which the employee is absent from work on account of personal injuries or sickness; but this subsection shall not apply to the extent that such amounts exceed a weekly rate of $100.
Treasury regulations promulgated by the Commissioner of Internal Revenue provide that any pension received by the taxpayer after the earliest date taxpayer could have retired (in this case at the optional service retirement age of 60) is not entitled to the Section 105(d) exclusion.
Two recent decisions have held that the two regulations are invalid insofar as they deprive a disability retiree of the exclusion benefits before mandatory retirement age. Brooks v. United States, 473 F.2d 829 (6th Cir. 1973); Jovick v. United States, 492 F.2d 1215 (Ct.Claims 1973). See Commissioner of Internal Revenue v. Winter, 303 F.2d 150 (3rd Cir. 1962); Walsh v. United States, 322 F.Supp. 613 (E.D.N.Y.1970); Bigley v. United States, 252 F.Supp. 757 (E.D.Mo.1966); Keefe v. United States, 247 F.Supp. 589 (N.D.N.Y.1965). In Brooks the Court stated:
While it cannot be doubted that income received after the mandatory age will be taxable regardless of whether the pension began as a disability pension, we hold that the Government’s position, as outlined in the regulation, is untenable. The statute is clear and unambiguous in providing for an exclusion of payments made to any employee for a period of absence from work caused by illness. The money that this taxpayer receives between the age of 60, when he was forced to retire by illness, and 65, when he would have to retire whether or not healthy, is received because of his absence from work because of illness.
473 F.2d at 831.
Contemporaneous construction of a statute by an agency charged with its enforcement is entitled to great deference by the courts. Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); Western Bancshares, Inc. v. Board of Governors of Federal Reserve System, 480 F.2d 749 (10th Cir. 1973). Administrative regulations are not absolute rules of law, however, and should not be followed when they conflict with the design of the Code or exceed the administrative authority granted. National Labor Relations Board v. Boeing Co., 412 U.S. 67, 93 S.Ct. 1952, 36 L.Ed.2d 752 (1973); Dorfman v. Commissioner of Internal Revenue, 394 F.2d 651 (2nd Cir. 1968). The Commissioner cannot promulgate regulations which impose a tax on the taxpayers which has not been imposed by legislative command. Commissioner of Internal Revenue v. Acker, 361 U.S. 87, 805 S.Ct. 144, 4 L.Ed.2d 127 (1959) ; Smith v. Commissioner of Internal Revenue, 332 F.2d 671 (9th Cir. 1964).
An employee who absents himself from work for retirement because of disability prior to mandatory retirement age is within the class of individuals intended to be benefited by Section 105(d). Taxpayer falls within that class of individuals. The subject treasury regulations are invalid and ineffective to deprive taxpayer of the exclusion benefits of Section 105(d).
II.
The Government argues that the District Court erred in crediting taxpayer’s testimony that he intended to work for the IRS until mandatory retirement age, and in viewing taxpayer’s intent as controlling. Taxpayer testified that he intended to continue his work with the Government until mandatory retirement age because his financial resources were limited and he needed the salary to raise his children. Following his retirement he formed a law firm with two of his children. He earned $51,356.93 in 1968. The Government argues that economic gain alone would have required his absence from employment with the IRS in 1968.
This contention is not developed by cogent authority or argument. We are not impelled, accordingly, to consider it seriously. Suffice it to note that appellate courts do not try cases de novo and that the resolution of conflicting evidence is particularly within the province of the trial court. United States v. 79.95 Acres Of Land, More Or Less, In Rogers County, State Of Oklahoma, 459 F.2d 185 (10th Cir. 1972); Davis v. Cities Service Oil Company, 420 F.2d 1278 (10th Cir. 1970).
Taxpayer is currently totally disabled and unable to work full time. He spends five hours or less a day in his law firm. The trial court did not err in finding that taxpayer intended to continue with his employment until mandatory retirement age.
III.
The Government contends that the District Court erred in granting declaratory relief to taxpayer. Taxpayer states that he did not request a declaratory judgment and that declaratory relief was not granted.
The trial court ordered that taxpayer was entitled to the refund of $401.37 arising from his joint 1967 and 1968 tax returns, and to the exclusion for 1969 and succeeding years until taxpayer reaches the age of 70. A declaratory judgment must declare the rights and duties of parties presented in justiciable controversy. The simple statement that taxpayer is entitled to the exclusion for 1969 and succeeding taxable years until he reaches the age of 70, does not constitute declaratory judgment relief. In any event, declaratory judgment relief is not authorized in refund suits against the United States. 28 U.S.C.A. § 2201.
Taxpayer is entitled to a refund of $401.37 plus statutory interest from April 15, 1971.
Affirmed.
. Jule C. Reardon is a party to the suit because joint returns were filed for the two taxable years in dispute.
. Regulation § 1.105-4(a) (3) (i) (a) states that the § 105(4) exclusion “does not apply to the payments which such an employee receives after he reaches such retirement age.”
Regulation § 1.105-4(a) (3) (i) (b) states that retirement age has the same meaning as in Regulation § 1.79-2 (b) (3) which reads in part as follows:
(3) Retirement age. For purposes of section 79 (b) (1) and this section, the meaning of the term “retirement age” is determined in accordance with the following rules—
(i) (a) If the employee is covered under a written pension or annuity plan of the employer providing such individual group-term life insurance on his life (whether or not such plan is qualified under section 401(a) or 403(a)), then his retirement age shall be considered to be the earlier of—
(1) The earliest age indicated by such plan at which an active employee has the right (or an inactive individual would have the right had he continued in employment) to retire without disability and without the consent of his employer and receive immediate retirement benefits computed at either the full rate or a rate proportionate to completed service as set forth in the normal retirement formula of the plan, i. e., without actuarial or similar reduction because of retirement before some later specified age, or—. . .
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
CHASE, Circuit Judge.
During the taxable year 1932 the petitioner sold at a loss noncapital assets which he owned personally. During the same year he was one of the partners in a partnership which sold noncapital assets of the partnership at a profit. The partnership filed its information return showing this profit, and the petitioner included his share of it in his own return. The amount of gain so included was less than the loss he had sustained. He deducted the above-mentioned loss to the extent of his share of the partnership gain, thus diminishing what would otherwise have been his net taxable income as shown by his return. The Commissioner, deciding that the deduction was not allowable in view of section 23 (r) of the Revenue Act 1932 (26 U.S.C.A. § 23 note), added it to the petitioner’s net income as shown in his return and determined the deficiency accordingly. A majority of the Board upheld that action.
Section 23 (r) of the 1932 Revenue Act limited deductions which might be taken from income on account of losses sustained on the sale or exchange of noncapital as-, sets “to, the extent of the gains from such sales or exchanges.” Since it is undisputed that the profits of the partnership with which we are now concerned were derived from the sale of assets held less than two years and so from the sale of noncapital assets as defined in section 101 of the Revenue Act 1932 (26 U.S.C.A. § 101 note) and that the personal losses of the .petitioner were sustained in the sale of such assets, the sole issue is whether the petitioner’s share of such partnership gains is to be treated as though derived from the sale of noncapital assets which the petitioner owned personally.
It is argued with much force that as a partnership is not a taxpayer its income distributable to a partner and taxed to him should be held to retain in the partner’s return all the characteristics by way of derivation which it had in the information return filed by the partnership as there is nothing in section 23 (r) which is expressly to the contrary. And this idea is thought to be somewhat fortified by the fact that when Congress passed the National Industrial Recovery Act in 1933 section 218 (d), 48 Stat. 209, provided that: “Effective as of January 1, 1933, section 182 (a) of the Revenue Act of 1932 is amended by inserting at the end thereof a new sentence as follows: ‘No part of any loss disallowed to a partnership as a deduction by section 23 (r) shall be allowed as a deduction to a member of such partnership in computing net income.’ ” Reliance is placed upon the usual inference that when a statute is amended the purpose is that of change rather than a declaration of its former meaning unless the latter intention clearly appears.
Yet we think these considerations must yield to others that seem to be more potent in their bearing upon the issue. Though a partnership is not a taxpayer (section 181 of the 1932 Revenue Act [26 U.S.C.A. § 181 and n'ote]) and each partner is taxed on his distributive share of partnership income (section 182, 47 Stat. 222 [see 26 U.S.C.A. § 182 and note]), the partnership is a tax .computing unit whose income is to be calculated in the same manner and on the same basis as that of an individual, with the exception that no deductions for charitable contributions are allowable (section 183 of the act [26 U.S.C.A. § 183 and note]). See Earle v. Commissioner (C.C.A.) 38 F.(2d) 965. In such computation noncapital losses are of course deductible to the extent of noncapital gains under section 23 (r), but, when the partnership return shows net income, a partner’s distributive share is to be entered in his own return as his own income derived from the partnership without retaining the peculiar character it had in the partnership return unless Congress has expressly so provided and then only for the purpose stated. The general rule of section 182 indicates that this is so, and, unless it is, there would be no reason for section 184 of the act of 1932 (26 U.S.C.A. § 184 note), which provides that for the purpose of the normal tax a partner shall be allowed as an additional credit “his proportionate share of such amounts of dividends and interest specified in section 25 (a) and (b) as are received by the partnership”; nor for section 186 of the act of 1932 (47 Stat. 223), providing for showing in the partnership return “the proper part of each share of the net income which consists, respectively, of ordinary net income, capital net gain, or capital net loss,” and for taxing the partners “at the rates and in the manner provided in section 101 (a) and (b), relating to capital net gains and losses.” So, too, section 188 of the act of 1932 (26 U.S.C.A. § 186 and note) permits a partner to take credit for partnership income, war profits, and excess profits taxes imposed by foreign countries or possessions of the United States to the extent provided in section 131 (26 U.S. C.A. § 131 and note). These provisions are to be read in connection with the general rule of sections 182 and 183, for they are parts of the same statute and show that Congress did intend to permit partnership income to retain its peculiar character for certain express purposes when carried over into the return of a partner. And this expression of purposes includes the negative of any others. Botany Mills v. United States, 278 U.S. 282, 289, 49 S.Ct. 129, 131, 73 L.Ed. 379. Moreover, we are dealing with an enactment restricting a right to take loss deductions from income which must bear the tax burden imposed unless Congress has seen fit to permit the offset claimed. The right to take deductions from gross income is wholly a statutory privilege which may be granted or withheld. Lloyd v. Commissioner (C.C.A.) 55 F. (2d) 842.
While it is true that each partner owns his share of the net worth of the partnership of which he is a member, United States v. Hack, 8 Pet. 271, 8 L.Ed. 941, and consequently his distributive share of the partnership net income is taxable directly to him, United States v. Kaufman, 267 U.S. 408, 45 S.Ct. 322, 69 L.Ed. 685, it is equally true’that the partnership status has not been disregarded in the scheme of income taxation set up by Congress. See Shearer v. Burnet, 285 U.S. 228, 52 S.Ct. 332, 76 L.Ed. 724. That scheme provides in general for the carrying over into his own return of a partner’s distributive share of partnership income as computed in the partnership information return as so much ordinary income without noticing its source as shown by the partnership return except in those instances for which especial provision has been made. So the petitioner must treat his share of the partnership gain as ordinary income in his return, since he cannot sustain the claimed right to have it retain there its status as a gain derived from the sale of noncapital assets by bringing it within one of the exceptions to the general rule which Congress has created. In view of this we feel bound to treat the above-mentioned section 218 (d) of the National Industrial Recovery Act as having been inserted out of abundant caution when that law was passed and as but a clarification of existing law. Helvering v. New York Trust Co., 292 U.S. 455, 469, 54 S.Ct. 806, 810, 78 L.Ed. 1361.
Affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
ALDRICH, District Judge.
This is an appeal from a final decree of the District Court following the confirmation of an assessor’s report on damages. Appellant appeared as claimant in a libel in admiralty brought by appellee, as owner of the trawler Lynn, against the S.S. Ventura. On November 28, 1951, the Lynn was struck and sunk by the Ventura. This proceeding followed. After the District Court had determined that the Ventura was solely at fault, R. O’Brien & Co. v. 5.5. Ventura, D.C.Mass.1954, 130 F.Supp. 176, affirmed sub nom. Texas Co. v. R. O’Brien & Co., 1 Cir., 1955, 225 F.2d 280, the question of damages was referred to an assessor. The assessor found that although the Lynn had been raised and re-commissioned, she was a constructive total loss. No criticism is made of this finding. Under this circumstance the normal measure of damages is the vessel’s fair market value immediately before the sinking. Alaska 5.5. Co. v. Inland Navigation Co., 9 Cir., 1914, 211 F. 840. The assessor found that there was no market value established. Appellant complains of this finding, and further contends that the assessor’s determination of a value of $200,000 is clearly erroneous. Admiralty Rule 43½, 28 U.S.C.A., 1932, 286 U.S. 572; United States v. Kirkpatrick, 3 Cir., 1951, 186 F.2d 393; cf. The I. C. White, 4 Cir., 1924, 295 F. 593 (“substantial error”).
The assessor found that at the time the Lynn was struck there was a “tight market” for fishing vessels, by which was meant many buyers, but few sellers. This condition lasted from 1951 to the spring of 1953. He found that ten sizable trawlers were sold in this area during that period, though as to one certain statistics were missing. These vessels varied in age, construction, and size. Some were smaller than the Lynn, some larger; some younger, and some older. Some were better than the Lynn in some respects, and not in others, while others exceeded the Lynn in other particulars. In various instances individual characteristics of these vessels were close to the Lynn’s, but in none were they all close.
Comparable sales are normally “the best evidence of market value.” Baetjer v. United States, 1 Cir., 1944, 143 F.2d 391, 397, certiorari denied, 1944, 323 U.S. 772, 65 S.Ct. 131, 89 L.Ed. 618. Nor is the use of such evidence confined to where a layman can interpret it by inspection, or by the application of some mathematical formula. Dean v. Woods, Em.App., 1948, 169 F.2d 952. If the assessor was unable, unaided, to find the market value of the Lynn from these other sales, he should not then have proceeded, “failing market value,” to quote his report, to determine worth on some other basis, citing The President Madison, 9 Cir., 1937, 91 F.2d 835, 845. This was a misconception. The Madison presented the exceptional case where, because of the special purpose and peculiarities of the vessel, what she would bring on the market would not fairly represent her true worth. In such event market value is not the test. Cf. United States v. Eastern S.S. Lines, Inc., 1 Cir., 1948, 171 F.2d 589. Obviously this rule is to be sparingly applied. The I. C. White, 4 Cir., 1924, 295 F. 593. It is the very reverse of the situation here, where the vessel was of popular design, with many buyers available. Under these circumstances she had a market value, and the sole endeavor should have been to determine what it was, not to have sought something else. This is not to say that other factors besides sales could not be regarded, but they should have been considered only insofar as they shed light upon this single objective.
It is not clear on what basis, or on what evidence, the assessor determined value. It was not on original cost, depreciated, as there was no evidence of such cost. It was not on reproduction cost, depreciated, because the assessor found that this figure lay between $180,000 and $228,000, and that it was not necessary to find it any more definitely. It was not on earnings. He “discarded earnings,” as “too indefinite,” and we agree with his action. It was not on hull insurance, as there was no evidence thereof. It was not on the opinion of the owner, as he expressly rejected it. This action, too, was clearly correct, since it was based upon earnings. It was not upon any expert opinion, because he found that even as to “the most credible * * * I am not inclined to give it any weight.”
While the testimony of an expert does not have to be accepted, if the assessor could not reach a conclusion from the sales he should not have rejected it without some reason. Cullers v. Commissioner of Internal Revenue, 8 Cir., 1956, 237 F.2d 611; Capitol-Barg Dry Cleaning Co. v. Commissioner of Internal Revenue, 6 Cir., 1942, 131 F.2d 712. However, we feel he did have reason. On the basis of their lack of qualifications, either general or particular, three of appellant’s experts could easily be disregarded. Appellant’s remaining expert, Barrie, had general qualifications. He had, also, special knowledge of the Lynn, having appraised her sister ship, the Triton, in 1952. That appraisal had been $185,000. The Triton had a one-year-old 500 horsepower engine (as against the Lynn’s 350 h.p.), installed at a cost of $66,000, with $20,000 more spent on her for repairs. She was 15 years old, against the Lynn’s 10. Barrie valued the Lynn at $140,000. If a 15 year old hull without engine or repairs was worth $100,000, possibly $140,000 for the same hull only 10 years old, with an engine, even if the Lynn’s engine were of no great worth, might seem low. He made no attempt to explain this, or to show how his figure of $140,000 Was to be reconciled with the $185,000 obtained for the smaller Rosalie D. Morse.
Appellee’s expert, Allen, the assessor found the most credible. He valued the Lynn at “$200,000 to $225,000; over $200,000.” Passing the fact that his opinion in 1951 had apparently been “around $200,000,” and that he changed his testimony on the stand to say the vessel was worth $200,000 even in the admittedly soft market of 1948, we think his underlying basis was unsupported. He made his appraisal by computing reproduction cost, depreciated, and then adding a substantial amount to it because the market was tight. Reproduction costs were also high. Quite possibly they were even higher than market. There was no evidence that other vessels were selling over their depreciated reproduction cost. Cost, either original or reproduction, may bear no relation to market value at any particular moment in an industry that fluctuates as this one. Cf. The I. C. White, 4 Cir., 1924, 295 F. 593.
Perhaps because of his misconception about market value, we think it clear that the assessor failed to give adequate weight to contemporary sales. The vessel most like the Lynn was the Rosalie D. Morse. She sold for the highest price of the ten, $185,000. She was 7 years old. Assuming a straight line depreciation of 5%, as testified to by appellee’s expert, she was then 35% depreciated. Depreciating her for 3 more years, to bring her to the age of the Lynn, would reduce this figure to $142,-000. On the other hand, the Lynn was 170 gross tons, as against the Morse’s 153. Her fish-carrying capacity, though less than the Lynn’s, was on a more favorable ratio to her tonnage. Increasing $142,000 proportionately to that ratio, would result in $164,000. For an adequate comparison there must, however, be a deduction for the fact that the orphaned Lynn’s engine presented a serious parts difficulty.
The Esther M. was also 7 years old. She was 250 gross tons, against the Lynn’s 170, and had a 550 h.p. motor rather than 350. She brought $175,000. If that were depreciated for 3 more years, at 5%, it would mean, for this much larger boat, $135,000. It is true that this was a forced sale, for which some allowance should be made. The Carole June, with 400 h.p., had a gross tonnage slightly greater than the Rosalie D. Morse, but she carried 8% less fish. She sold for $123,000, when only 5 years-old. The Batavia, a larger and more desirable hull than the Lynn, except for her age, but with a 10-year-old 600 h.p. engine, sold for $126,000. She needed some $20,000 spent on her. Even appellee’s expert did not use this sale as justifying his valuation of the Lynn. Clearly, not even the most favorable of the sales would warrant finding a market value of $200,000.
Since the decree must be reversed, the question arises as to what further action we should take. The older cases, without discussion of the weight to be accorded to the decision below, made their own findings of value. The Cushing, 2 Cir., 1923, 292 F. 560, affirmed sub nom. Standard Oil Co. of New Jersey v. Southern Pacific Co., 1925, 268 U.S. 146, 45 S.Ct. 465, 69 L.Ed. 890; The I. C. White, 4 Cir., 1924, 295 F. 593; Alaska S.S. Co. v. Inland Navigation Co., 9 Cir., 1914, 211 F. 840. Insofar as such action may have been bottomed on the principle that an admiralty appeal was a trial de novo, this is no longer law. The present admiralty rule is that findings are not to be reversed unless “clearly erroneous,” comparable to Fed. Rules Civ.Proc. rule 52(a), 28 U.S.C.A., McAllister v. United States, 1954, 348 U.S. 19, 75 S.Ct. 6, 99 L.Ed. 20. Some courts have held Rule 52(a) not to apply where the findings below were based upon stipulated or undisputed subsidiary facts. We have not. Collins v. Commissioner of Internal Revenue, 1 Cir., 1954, 216 F.2d 519. In our opinion Rule 52(a) unambiguously governs all findings, and its additional caveat, that due regard is to be given to the trial court’s opportunity to judge credibility, is merely cautionary advice, not a variation in the scope of review. Cf. Galena Oaks Corp. v. Scofield, 5 Cir., 1954, 218 F.2d 217. We do not think the substantive test, and possible success on appeal, whatever the nature of the case, should depend upon whether the evidence at the trial had been stipulated or contested. But once a finding has been determined to be clearly erroneous, different considerations apply to our subsequent action. Our disposition may quite properly depend upon the then state of the record. In such event, if all subsidiary facts have been already found, or stand admitted, there can be no need of sending the case back. Our acceptance of the assessor’s special findings here gives us a record free of dispute except as to the ultimate factual inference to be drawn, and hence leaves us as fully able to draw it as would be the trial court. The test for reversibility does not require us to return the case for a new finding. Smith v. Dravo Corp., 7 Cir., 1953, 208 F.2d 388; see Yanish v. Barber, 9 Cir., 1956, 232 F.2d 939, 947.
In our opinion the market value of the Lynn at the time of the collision on the basis of the subsidiary findings below was $150,000.
A judgment will be entered vacating the order of the District Court and remanding the case to that Court for the entry of a decree in conformity with the views expressed in this opinion.
. There is a singular lack of unanimity on this point, not only between, but within, individual circuits. The following are recent examples:
Court free to disregard ultimate findings when based upon written or undisputed evidence: Kraft Foods Co. v. Commissioner of Internal Revenue, 2 Cir., 1956, 232 F.2d 118; United States v. One 1950 Buick Sedan, 3 Cir., 1956, 231 F.2d 219 (court reaches result by indicating an ultimate “inference” is not a “finding of fact.”); Seagrave Corp. v. Mount, 6 Cir., 1954, 212 F.2d 889; Chicago, Burlington & Quincy R. Co. v. United States, 7 Cir., 1955, 221 F.2d 811; Steve-not v. Norberg, 9 Cir., 1954, 210 F.2d 615.
Court cannot reverse such findings merely because it disagrees with them, but must conclude they are “clearly erroneous” : Central Ry. Signal Co. v. Longden, 7 Cir., 1952, 194 F.2d 310; Coleman v. Sears, Roebuck & Co., 8 Cir., 1956, 238 F.2d 206; Hycon Manufacturing Co. v. H. Koch & Sons, 9 Cir., 1955, 219 F.2d 353, certiorari denied, 1955, 349 U.S. 953, 75 S.Ct. 881, 99 L.Ed. 1278; Kaye v. Smitherman, 10 Cir., 1955, 225 F.2d 583, certiorari denied, 1955, 350 U.S. 913, 76 S.Ct. 197, 100 L.Ed. 800; Bishop v. United States, 1955, 96 U.S.App.D.C. 117, 223 F.2d 582, judgment vacated and remanded, 1956, 350 U.S. 961, 76 S.Ct. 440, 100 L.Ed. 835 semble.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
BOWMAN, Circuit Judge.
Kenneth Beshears and Robert Johnson appeal from the order of the District Court dismissing their claims under 29 U.S.C. § 621 et seq. (1988), the Age Discrimination in Employment Act of 1967 (“ADEA”), against Communications Services, Inc. (“CSI”). CSI cross-appeals the judgment of the District Court on a jury verdict in favor of Ross Asbill on his age discrimination claim. We affirm.
I.
In the latter part of 1985 CSI, a Kansas corporation engaged in the cable television business, approached Rogers Communications about a possible acquisition of Rogers Cablesystems of Fort Smith, Inc. (“Rogers”). Rogers operated the cable service for Fort Smith, Arkansas. The contract that CSI and Rogers signed in February 1986 included a stipulation prohibiting CSI from discussing staff changes with Rogers employees until the time of acquisition.
Prior to CSI’s acquisition of the Fort Smith system, the Fort Smith operation was very different from CSI’s other cable service operations. Its salaries were at least twenty-five percent higher and its employee structure was markedly different, as were its management and employee policies. CSI, after evaluating the Fort Smith operation, decided to make a number of changes, including the elimination of twenty employee positions.
To this end, CSI representatives met with Rogers’ employees on three separate occasions during the early part of 1986. At the first of these meetings, CSI’s president, Bruce Plankington, addressed Rogers’ entire employee complement. When he was asked how CSI felt about older employees, employees claim Plankington responded that, although he did not foresee any problems, it was his experience that they sometimes had difficulty adjusting to change.
At the next of these meetings, Gary Cox, CSI’s vice-president of operations, conducted interviews with Rogers’ technical personnel. Cox met with Beshears, Johnson, and Asbill, among others, to discuss their job responsibilities and experience and to notify them that there would be some changes in the company’s structure.
Beshears, who was 42 in 1986, was a service technician for Rogers. He had been with the company for seven and one-half years, and his hourly rate of pay was $10.76. Johnson, 43, had been a Rogers employee for approximately 28 years. In his position as a project supervisor, Johnson supervised various construction jobs. His annual salary was over $31,000.00. Asbill, 57, had been with Rogers for approximately 18 years. He was paid $13.12 an hour as a dispatcher scheduling customer service calls.
After meeting with the employees individually, CSI officials made their final employment decisions. The decisions were conveyed to Rogers’ staff on June 12 and 13, 1986. Beshears was informed that he would not be offered a job as a service technician with CSI; Johnson that CSI was eliminating the construction department and that his position no longer existed; Asbill that CSI’s structure did not require a separate dispatcher position, as CSI’s customer service representatives, earning $4.25 an hour, would perform the duties of a dispatcher. CSI did ask Asbill to continue dispatching for a short transitional period during which a new computer system would be installed. Asbill accepted the $10.50 per hour position and worked until August 15, 1986. CSI did not offer the three men alternative employment.
A group of Rogers employees, including Beshears, Johnson, and Asbill, filed a charge of age discrimination against CSI with the Equal Employment Opportunity Commission on January 26, 1987. This filing did not comply with the ADEA’s 180-day notification requirement. On June 15, 1988, eleven former Rogers employees, again including Beshears, Johnson, and As-bill, filed a complaint against CSI in the District Court alleging violations of the ADEA and setting forth pendent state claims. CSI’s motion for summary judgment resulted in the dismissal of the claims of three of these employees. The claims of five additional employees were dismissed on the basis of a confidential settlement.
Beshears, Johnson, and Asbill proceeded to trial on September 27, 1989. The trial was conducted in two phases. The first phase was concerned with the question of whether the ADEA’s 180-day filing period had been tolled (under the doctrine of equitable tolling). Three interrogatories were submitted to the jury: (1) whether the employer had posted the required statutory notice in a prominent and readily-accessible place; (2) whether Beshears, Johnson, and Asbill knew within the 180-day period that it was illegal for their employer to discriminate against them because of age; and (3) whether they had the means to acquire that knowledge before the 180 days expired. The jury answered all three questions in the negative as to Asbill, but found that Beshears and Johnson had the means to acquire the requisite knowledge within the 180 days. Based upon these findings, the District Court dismissed the claims of Beshears and Johnson as barred by their failure to comply with the statutory filing period.
The second phase of the trial went forward on the merits of Asbill’s age discrimination claim. The jury returned a verdict in Asbill’s favor and awarded him back pay in the amount of $24,331.67. As authorized by the ADEA, liquidated damages in an equal amount were assessed based upon the jury’s finding of “willfulness.”
Beshears and Johnson appeal, contending that the District Court erred by instructing the jury that the employees had the burden of proving they did not have the means to acquire knowledge that age discrimination was illegal. CSI cross-appeals, arguing that: (1) CSI’s employee manual provided Asbill with the means to become aware that age discrimination was prohibited; (2) the evidence was insufficient to impose the burden-shifting standards applicable to “mixed motive” discrimination cases; (3) CSI would not have retained Asbill “but for” his age; (4) Asbill is not entitled to back wages for the time period in which he received social security disability benefits; and (5) the evidence was insufficient to support the jury’s finding of “willfulness.” We affirm in all respects.
II.
The appeal of Beshears and Johnson raises only one issue that warrants discussion: whether the District Court’s jury instruction regarding equitable tolling “was an improper instruction on the law and placed [upon them] an undue burden of proof.” Brief of Beshears and Johnson at 7. Their argument implicates the court’s allocation of the burden of proof.
We quote the contested instruction:
The plaintiffs have the burden of proving that as to each one of them, no poster describing an employee’s rights under the age discrimination law was placed in a prominent, accessible, and readily observable place.
They have the additional burden of proving that they did not know until after July 30, 1986 that discrimination against them by an employer because of age was illegal, and that they did not have the means to acquire that knowledge before then.
Phase One Trial Transcript at 181. Accompanying this instruction were the three interrogatories mentioned above. The third interrogatory required the jury to find whether “from a preponderance of the evidence that any of the plaintiffs ... had the means to acquire knowledge before July 30, 1986, that discrimination against him by an employer because of age was illegal[.]” Phase One Trial Transcript at 183.
The instruction at issue was based upon our decision in DeBrunner v. Midway Equip. Co., 803 F.2d 950 (8th Cir.1986).
An employer’s failure to post notice of ADEA rights as required by 29 U.S.C. § 627 may be grounds for tolling the 180-day period until the employee acquires “actual knowledge” of his rights or retains an attorney. However, an employer’s failure to post the requisite notice will not equitably toll the 180-day filing period once an employee acquires “general knowledge” of his or her right not to be discriminated against on account of age, or the means of obtaining such knowledge.
Id. at 952.
The court’s instruction, although otherwise proper, incorrectly allocates the burden of proof among the parties. The law on this point is clear. “The employee bears the burden of proving the absence of notice to justify equitable considerations.” 3A A. Larson & L. Larson, Employment Discrimination, § 102.12 at 21-234 (1991). However, as this Court stated in DeBrun-ner, “[t]he employer bears the burden of proving that the employee was generally aware of his or her right [not to be discriminated against on account of age] if notice was not posted.” DeBrunner, 803 F.2d at 952. Although here the instruction misallo-cated the burden of proof with respect to “general knowledge” and “the means of obtaining such knowledge,” we are satisfied that in the circumstances of this case the error was harmless. See Fed.R.Civ.P. 61.
We find this to be so for several reasons. First, the faulty instruction was accompanied by the three interrogatories, which focused the jury’s attention upon the evi-dentiary issues related to equitable tolling. The interrogatories make no reference to the burden of proof. Further, CSI elicited much of the evidence relevant to the issue, and the evidence strongly supports the finding that Beshears and Johnson had the means of obtaining knowledge of the illegality of age discrimination. Indeed, Beshears admitted upon cross-examination that he was aware that age discrimination was prohibited at the time of his termination, but mistakenly believed that only minorities and women were protected. Phase One Trial Transcript at 71-74. Under cross-examination, Johnson acknowledged that, as the owner and operator of a small cable system, he was expected to comply with the requirements of the Federal Communications Commission. Phase One Trial Transcript at 44-46. However, he claimed to have been unaware of one such requirement that “no person shall be discriminated against in employment by [a cable system such as the one owned by Johnson] because of race, color, religion, national origin, age or sex." 47 C.F.R. § 76.73(a) (1989). Considering this evidence and the record as a whole, we do not believe that the District Court’s erroneous jury instruction adversely affected the substantial rights of Beshears and Johnson. See Brewer v. Jeep Corp., 724 F.2d 653, 656 (8th Cir.1983) (citations omitted).
Upon careful review of the issues raised in this appeal, we are satisfied that the District Court properly dismissed the claims of Beshears and Johnson on the basis of their failure to comply with the statutory filing period.
III.
In its cross-appeal, CSI argues that as a matter of law its employee manual provided Asbill with the means to become aware that age discrimination was prohibited. We conclude, however, that the District Court correctly denied CSI’s motion for a directed verdict on this issue.
CSI’s employee manual states:
We unequivocally support the principle and spirit of equal employment opportunity based upon qualification, related experience, job pertinence and relevant individual differences and not on the basis of nonrelevant extraneous factors such as race, religion, national origin, handicap, sex or age. We have practiced the principles of equal employment opportunity since our inception.
Our goal is to continue to administer our employment policy in order that all qualified persons are accorded an equal opportunity for employment or promotion without discrimination due to race, religion, national origin, handicap, sex or age.
Appellee/Cross-Appellant’s Appendix at 4.
Although this language forcefully presents CSI’s corporate policy, it does not state that the policy is required by law. In fact, the manual in no way informs employees of their rights under the law. See Edgeworth v. Fort Howard Paper Co., 673 F.Supp. 922, 926 n. 6 (N.D.Ill.1987). We therefore agree with the District Court that it was for the jury to decide what weight, if any, it would give to the manual in reaching its decision on the question whether within the 180-day period Asbill had the means of obtaining the knowledge that age discrimination is illegal.
IV.
CSI contends that Asbill did not produce any direct evidence of age discrimination and, therefore, the District Court incorrectly imposed the burden-shifting standards established by Price Waterhouse v. Hopkins, 490 U.S. 228, 258, 109 S.Ct. 1775, 1795, 104 L.Ed.2d 268 (1989). The record does not support this contention.
“Under the ADEA, a plaintiff may show discrimination by either direct or indirect methods of proof.” Blake v. J.C. Penney Co., 894 F.2d 274, 278 (8th Cir.1990). When an employee produces direct evidence that an illegitimate criterion such as age “played a motivating part in [the] employment decision,” Price Waterhouse, 490 U.S. at 258, 109 S.Ct. at 1795, the burden-shifting standards of Price Water-house come into play. In such cases, “the defendant may avoid a finding of liability only by proving by a preponderance of the evidence that it would have made the same decision even if it had not taken the [illegitimate criterion] into account.” Id.
In the absence of direct evidence of discrimination, courts apply the “basic tripartite pattern of proof (prima facie case —rebuttal—pretext)” as set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). 3A A. Larson & L. Larson, Employment Discrimination, § 102.41 at 21-284 (1991). See also Chaffin v. Rheem Mfg., 904 F.2d 1269, 1272-73 (8th Cir.1990). The plaintiff makes a prima facie case “by showing membership in a protected group, qualification for the job, rejection for the position, and that after rejection the employer continued to seek applicants of [plaintiffs] general qualifications.” Price Waterhouse, 490 U.S. at 278, 109 S.Ct. at 1805 (O’Connor, J., concurring) (citing McDonnell Douglas, 411 U.S. at 802, 93 S.Ct. at 1824). The burden then shifts to the employer to articulate a legitimate, nondiscriminatory reason for its actions. If this burden is carried, the plaintiff is given an opportunity to prove by a preponderance of the evidence that the employer’s stated reasons were in fact pretext. McDonnell Douglas, 411 U.S. at 802-04, 93 S.Ct. at 1824-25. The plaintiff retains the burden of persuasion at all times. Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1981).
Once all the evidence has been received, [we] should determine whether the McDonnell Douglas or Price Water-house framework properly applies to the evidence before it. If the plaintiff has failed to satisfy the Price Waterhouse threshold, the case should be decided under the principles enunciated in McDonnell Douglas and Burdine, with the plaintiff bearing the burden of persuasion on the ultimate issue whether the employment action was taken because of discrimination.
Price Waterhouse, 490 U.S. at 278-79, 109 S.Ct. at 1805 (O’Connor, J., concurring).
What is “direct evidence” sufficient to satisfy the Price Waterhouse threshold? Price Waterhouse defines the term negatively to exclude “stray remarks in the workplace,” “statements by nondecision-makers,” or “statements by decisionmakers unrelated to the decisional process itself.” Price Waterhouse, 490 U.S. at 277, 109 S.Ct. at 1804 (O’Connor, J., concurring). While we agree that “stray remarks” will not suffice to invoke the Price Waterhouse formula, this Court has held that “[djirect evidence may include evidence of actions or remarks of the employer that reflect a discriminatory attitude.” Gray v. University of Ark., 883 F.2d 1394, 1398 (8th Cir.1989). Comments which demonstrate a “discriminatory animus in the decisional process[,]” Price Waterhouse, 490 U.S. at 278, 109 S.Ct. at 1805 (O’Connor, J., concurring), or those uttered by individuals closely involved in employment decisions may constitute direct evidence within the meaning of Price Waterhouse. See Burns v. Gadsden State Community College, 908 F.2d 1512, 1517-19 (11th Cir.1990) (The statement that “no woman would be named to a B scheduled job” was direct evidence of discriminatory motive when its author made the employment decision at issue.); E.E.O.C. v. Alton Packaging Corp., 901 F.2d 920, 923-25 (11th Cir.1990) (Statement made by person responsible for promotion decisions that “if it was his company, he wouldn’t hire any black people” constituted direct evidence.).
Based upon our reading of Price Waterhouse and the cases that have followed in its wake, we conclude that Asbill did present evidence that properly may be characterized as “direct.” We refer to a remark made by CSI’s president Bruce Plankington, who actively participated in the personnel decisions at issue. At least five people testified that they heard Plank-ington make a statement to the effect that older employees have problems adapting to changes and to new policies.
Gary Cox, another CSI official involved in these employment decisions, also made several age-related comments. Cox informed Steve Beshears, Kenneth’s brother, that his position as chief technician had been offered to a younger man and explained that younger people were more adaptable to CSI’s policies than older people. Phase Two Trial Transcript at 49. Cox made a similar statement to Bob Griffith, a technical manager. Id. at 104. Further, Cox told Cliff Griffin, a warehouse employee, that he would not be happy as an installer because of his age and job experience. Id. at 145. These were not stray or random comments: they were made during the decisional process by individuals responsible for the very employment decisions in controversy. We therefore conclude that the District Court properly employed the Price Waterhouse method of proof.
V.
CSI argues that it would not have retained Asbill “but for” his age and that it should not be held accountable for conduct that the jury found to be discriminatory because Asbill testified at the trial that he would not have accepted a position with CSI for $4.25 per hour. See Phase Two Trial Transcript at 223. Because its evidence on this issue was not rebutted, CSI posits, the District Court erred in denying its motions for directed verdict and for judgment notwithstanding the verdict. We disagree.
“A directed verdict and a judgment notwithstanding the verdict should be granted only when all the evidence points one way and is susceptible of no reasonable inferences sustaining the position of the non-moving party.” Glismann v. AT & T Technologies, 827 F.2d 262, 266 (8th Cir.1987). The record contains evidence from which reasonable inferences sustaining As-bill’s position can be drawn. We refer not only to the age-related comments made by CSI officials, but also to the testimony of CSI’s Gary Cox that Asbill’s performance as a dispatcher was fine. Phase Two Trial Transcript at 198. In addition, the jury was not required to credit the testimony of witnesses favorable to CSI. Accordingly, the District Court correctly denied CSI’s motions for directed verdict and judgment notwithstanding the verdict. Our review of the record satisfies us that a jury question was presented and that, viewing the evidence in the light most favorable to As-bill, there is sufficient evidence to support the jury’s verdict. See Rademaker v. Nebraska, 906 F.2d 1309, 1311 (8th Cir.1990) (“It is a familiar principle that a judgment entered on a jury verdict should be affirmed if, viewing the evidence in the light most favorable to appellees, reasonable persons could differ as to the proper conclusion.”)
VI.
CSI contends that, as a matter of law, Asbill is not entitled to back wages for the time period in which he received social security disability benefits. This contention lacks merit.
Confronted with a similar claim, the Tenth Circuit determined that it was a “fact issue as to whether [the employee’s] disability, although sufficiently severe to entitle him to [disability] benefits, nonetheless did not prevent [the employee] from continuing [in the former] employment.” Spulak v. K Mart Corp., 894 F.2d 1150, 1158 (10th Cir.1990). The Spulak court affirmed the damage award as “the jury resolved this issue favorably” to the employee. Id. See also Johnston v. Harris County Flood Control Dist., 869 F.2d 1565, 1581 (5th Cir.1989) (“[T]he district court ... may exercise its discretion in deciding whether to deduct social security disability benefits from back pay awards.”), cert. denied, - U.S. -, 110 S.Ct. 718, 107 L.Ed.2d 738 (1990); Whatley v. Skaggs Cos., 707 F.2d 1129, 1138 (10th Cir.) (“The trial court’s refusal to deduct plaintiff’s disability benefits from defendant’s back pay liability is likewise not error. Such benefits are from a collateral source, and offset is not required.”), cert. denied, 464 U.S. 938, 104 S.Ct. 349, 78 L.Ed.2d 314 (1983). But see Smith v. Office of Personnel Management, 778 F.2d 258, 262-63 (5th Cir.1985) (holding that the collateral source rule is inapplicable when the defendant is the source of the benefit at issue, the court affirmed the offset of disability compensation as within the discretion of the trial court), cert. denied, 476 U.S. 1105, 106 S.Ct. 1949, 90 L.Ed.2d 358 (1986).
We adopt the “fact issue” approach articulated by the Tenth Circuit in Spulak. Asbill testified that he had a bad knee and a bad back and that these injuries were related to his work as an installer. Although these problems existed prior to, and throughout, Asbill’s term as a dispatcher, CSI’s Gary Cox acknowledged that Asbill’s performance as a dispatcher was fine. Phase Two Trial Transcript at 198. As far as we can ascertain, there is no evidence in the record that Asbill’s condition worsened after he left CSI’s employ so as to preclude him from performing his duties as a dispatcher. The jury heard the evidence, listened to the parties’ arguments, and resolved the issue favorably to Asbill. Based on the record before us, we believe this issue properly was submitted to the jury.
VII.
Finally, CSI vigorously argues that the evidence is insufficient to support the jury’s finding that it “willfully” violated the ADEA. Although the question is close, we are not persuaded.
A violation is “willful” if “ ‘the employer ... showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA.’ ” Trans World Airlines v. Thurston, 469 U.S. 111, 126, 105 S.Ct. 613, 624, 83 L.Ed.2d 523 (1985) (quoting Air Line Pilots Ass’n v. Trans World Airlines, 713 F.2d 940, 956 (2d Cir.1983)). Under Thurston’s “two-tiered liability scheme[,]” Thurston, 469 U.S. at 128, 105 S.Ct. at 625, we must distinguish between a mere violation of the ADEA, whether negligent or intentional, and one that properly may be characterized as willful. Although it is not enough to show that an employer knew that the ADEA was “in the picture,” see McLaughlin v. Richland Shoe Co., 486 U.S. 128, 131-35, 108 S.Ct. 1677, 1680-82, 100 L.Ed.2d 115 (1988), “[w]e think Thurston means at least this: if the people making the employment decision know that age discrimination is unlawful, and if there is direct evidence — more than just an inference from, say, an arguably pretextual justification — of age-based animus, the trier of fact may properly find willfulness.” Neufeld v. Searle Laboratories, 884 F.2d 335, 340 (8th Cir.1989).
Under the Neufeld formulation, we cannot say that the evidence was insufficient to sustain the jury’s finding of willfulness. The record reflects that CSI officials were “intimately familiar” with the ADEA and the other anti-discrimination laws. Phase Two Trial Transcript at 120-22, 198-99. As heretofore discussed, see supra Section IV., there is also direct evidence of comments manifesting an age-based animus on the part of the CSI officials who were responsible for the employment decisions here at issue. Were we the finders of fact in this case we might have reached a result different from that reached by the jury, but “our task on review is not to act as the trier of fact.” Morgan v. Arkansas Gazette, 897 F.2d 945, 951 (8th Cir.1990). Based on our review of the record, we conclude that the question of willfulness properly was submitted to the jury and that its finding must be sustained.
VIII.
With respect to both the appeal and the cross-appeal, the judgment of the District Court is affirmed.
. The Honorable Morris S. Arnold, United States District Judge for the Western District of Arkansas.
. Counsel for Beshears and Johnson objected to these jury directions, complaining that the phrase "means to acquire knowledge" was "meaningless to a jury[,]” had "no significance[,j" and was "an impossible burden for the plaintiffs[.]" Phase One Trial Transcript at 162, 173.
. In cases where an employer has fulfilled its statutory duty by conspicuously posting the official EEOC notices, constructive knowledge is attributed to an employee. See Kale v. Combined Ins. Co. of Am., 861 F.2d 746, 753 (1st Cir.1988).
. As we understand their appeal, Beshears and Johnson also appear to argue that we should abandon the “means to acquire knowledge” part of the DeBrunner test on the ground that it lacks meaning. DeBrunner, however, is the law of this circuit, and it cannot be overruled by a three-judge panel such as this one.
. Asbill testified that he read this manual. Phase One Trial Transcript at 59-62. He also signed a form acknowledging that he read and understood the manual.
. Price Waterhouse involved a Title VII claim. However, this Court has accepted Price Water-house 's burden-shifting standards in ADEA cases. See, e.g., Perry v. Kunz, 878 F.2d 1056, 1058-60 (8th Cir.1989).
.Although the action in McDonnell Douglas was brought under Title VII, this Court routinely applies the McDonnell Douglas approach in ADEA cases. See, e.g., Perry, 878 F.2d at 1058-60.
. Plankington testified that he did not recall making any such statement. Phase Two Trial Transcript at 123. However, "[i]t was for the jury to judge the credibility of the witnesses.” Toombs v. Bell, 915 F.2d 345, 349 (8th Cir.1990).
. CSI argues that Asbill’s receipt of such benefits proves that he was no longer capable of performing his duties as a dispatcher.
. In Whatley, the plaintiff suffered a disabling back injury after leaving the defendant’s employ. Finding that the plaintiff would not have suffered this injury had the defendant not terminated him from his management position, the trial court expressly declined to reduce defendant's back pay liability based upon the plaintiffs disability. Whatley, 707 F.2d at 1138 n. 8.
.Citing the "collateral source rule,” according to which the defendants may not benefit from payments made to the plaintiff by third parties, ”[m]ost courts have refused to deduct such benefits as social security and unemployment compensation from ADEA awards.” Guthrie v. J.C. Penney Co., 803 F.2d 202, 209 (5th Cir.1986). Because we believe that disability benefits qualitatively are different from either social security benefits or unemployment compensation, we doubt whether they should be considered a "collateral source” in the context of employment discrimination litigation.
. The resolution of this issue is significant in two respects: (1) the ADEA states that "liquidated [or double] damages shall be payable only in cases of willful violations],]” 29 U.S.C. § 626(b); and (2) the ADEA provides for a two-year statute of limitations, with a three-year exception for willful violations. 29 U.S.C. § 626(e)(1) (incorporating the statute of limitations provision of the Portal-to-Portal Act of 1947, 29 U.S.C. § 255(a) (1988)).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
The order of the district court suppressing the evidence is vacated, and the case is remanded to the district court for further proceedings consistent with the decision of the Supreme Court of the United States in United States v. Padilla, — U.S. -, 113 S.Ct. 1936, 123 L.Ed.2d 635 (1993).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
VAN ORSDEL, Associate Justice.
These appeals are from a decision of the Board of Patent Appeals in an interference proceeding involving the following counts:
“1. A pressed metal brake shoe comprising a pair of parts with circumferential flanges supporting the brake lining and with radial flanges engaging each other and extended and bent to form spaced arms at the end of the shoe, and means for fastening the radial flanges together.”
“2. A pressed metal brake shoe comprising two parts having radial flanges secured together, and having oppositely projecting circumferential flanges cooperating to form a support for the brake lining, the radial flanges being extended to form parallel spaced arms at one end of the shoe.”
“3. A pressed metal brake shoe having a central radial’ flange' with an opening, the flange being drawn ont to form a sleeve surrounding the opening and forming in effect an integral bushing for the opening.”
“4. A pressed brake shoe having a pair of parts arranged substantially in radial planes and formed with alined openings, the metal about the openings being drawn in opposite directions to form coaxial sleeves.”
“5. A pressed brake shoe- having a pair of parallel, arms having alined openings, with the metal áboht the openings drawn out to form coaxial sleeves.”
. It will be observed that the counts cover certain details in the construction of brakes for automobiles, commercially known to the automobile industry as the “Bendix three-shoe brake.”
The claims were copied by the party McIntyre from a patent issued to Dodge, and the parties were thrown into interference. No testimony was taken, since the dates, set out by McIntyre antedate any date claimed by Dodge. Dodge, to avoid judgment on the record, moved to dissolve the interference on the ground that McIntyre could not make the claims. The Law Examiner denied the motion ; and the Examiner of Interferences, affirming his decision, awarded all five claims to McIntyre. The Board" reversed the Examiner as to claims 3 and 5, awarding these to Dodge. From the decision of the Board, McIntyre appealed in case’ No. 2092; and from the decision of the Board awarding claims 1, 2, and 4 to McIntyre, Dodge appealed in ease No. 2097. The appeals have been presented together, and the eases will be disposed of in a single opinion.
There are certain fundamental principles of law applicable to eases of this sort which have peculiar force in the instant case. In the light of those principles, inasmuch as Dodge was first to make the claims, his spec-: ification must control, in ascertaining a correct interpretation to be placed upon the claims. Seymour v. Molyneux, 49 App. D. C. 216, 263 F. 468. It is equally true that since the claims here have been copied from the patent to Dodge, for the purpose of securing an interference, the claims must be interpreted in the light of the patent disclosure. Hauss v. Merrell, 48 App. D. C. 433.
Counts 1 and 2 define a way of forming a shoe of pressed sheet metal, T-shaped in cross-section to give maximum strength, and providing spaced arms at the end of the shoe. The spaced arms in the assembled brake are so arranged at the end of one shoe as to straddle the end of the next or secondary shoe in such manner that the interior periphery of the brake drum may engage-the friction lining of the shoes at the same, time,, preserving sufficient angular' movement about its end to entirely free it from the drum when the brake is released.
- The spaced arms, as disclosed in Dodge, are formed by separating two flanges at the end 'of the shoe whieh, when fastened together, jointly form the stiffening web of the shoe. The function of the spaced arms is clearly defined in the Dodge specification as operating to connect the shoes in such manner as to give “much larger area of brake lining in engagement with the drum.” Indeed, the only function whieh Dodge attributes to the arms is to support the adjacent shoe, and to incidentally secure the increased brake lining engagement.
Coming now to the McIntyre specification, he describes his brake shoe as consisting of “two angle or L-shaped members bent so that a substantial portion of one face of each between the ends conforms to the surface of a cylinder, the ends themselves being flattened to the form of a chord of a circle for a purpose to be afterwards described. These members are adapted to be secured together, back to back, with the cylindrical and chord faces flush with each other, and secured together in that position by welding, riveting, or the like, with a flat member secured thereto by any suitable means, and conforming with the cylindrical and chord ‘ surf aces of the members.”
Clearly these parts welded or riveted together, face to face, cannot be regarded as spaced arms. .The portion of the McIntyre application, however, upon whieh he relies for the right to make counts 1 and 2, provides that before the members are assembled the metal at one end is bent back out of ’flush, or away from the contacting face, so that when the two members are assembled and riveted together a recess or slot is formed at the end by the separation of the members; but he then proceeds to define the purpose of this slot as follows: “A hardened metal member of T-shaped section is inserted in the recess and secured therein by rivets or other suitable means. The member (so inserted) has a flat face which is adapted to contact against a cam, whieh is operated to expand the shoe against the brake drum.”
It will be observed that the object whieh McIntyre had in mind is entirely different from the function of the spaced arms as disclosed in the Dodge patent, and, inasmuch as we are not here considering counts directed to a process but to an article, the claims should be so construed as to read on the completed article. We are unable to find anything described in the McIntyre application as corresponding in function to the spaced arms of the finished Dodge construction. The spacing of the arms in the Dodge patent constitutes an important function in connection with the finished article. The arms are spaced apart for the purpose of overlapping two brake shoes. In other words, one shoe is formed with two arms spaced apart to permit the end of another shoe to he inserted between them, but this function cannot be accomplished by the construction of McIntyre. Indeed, in the finished article of McIntyre no space is disclosed or required between the ends of the L-shaped members to connect with another shoe. The insertion at this point of the T-shaped “hardened metal member” by McIntyre is to accomplish an entirely different function from that attained by Dodge.
Coming to claims 3, 4, and 5, Melntyre now shifts his position to the other end of his shoe. Describing this portion of his structure in his specification, he states in substance that before welding or riveting the L-shaped members together an opening is formed in the end of each member being adapted to match each with the other when the parts are assembled, and each opening is provided with oppositely extending flared or tubular walls, which are formed in the operation of forming the holes by drawing out the metal displaced. When in assembled position, a bushing is placed into the opening, which forms a bearing for a pin upon which the shoe is adapted to pivot.
In claim 3, Dodge claims an integral bushing distinguished from McIntyre in the opinion of the Board as follows: “The term bushing as used by Dodge is applied to a sleeve formed integrally with the flange from metal punched therefrom to form a bearing. The application of Melntyre does not contemplate the formation of an integral bearing by punching and expanding metal from the radial flange of the brake shoe. The application discloses only a bearing formed of an inserted collar introduced within the opening and supported by the rim of expanded metal.” This statement of the distinction as to claim 3 clearly justifies the action of the Board in awarding the claim to Dodge.
Claim 4 is much broader than claim 3, and calls merely for a pressed brake shoe having a pair of radial planes formed with aligned openings, the metal surrounding the openings being drawn in opposite directions to form coaxial sleeves. The purpose of the sleeves is not stated in the count, and, while broadly it may be applied to the Dodge construction, we think it may be construed as clearly reading upon the Melntyre construction. The claim is so broad as to exclude its technical application to the parallel arms of the Dodge construction, which, of course, are entirely absent in the McIntyre construction. We think, therefore, that the very broad language employed in this count hy Dodge makes it reasonably readable on the Melntyre construction; and that the tribunals below were justified in- awarding this claim to McIntyre.
Coming to claim 5, we are again back to Dodge’s parallel arms and aligned openings —a structure absent in the McIntyre disclosure. Awarding this claim to Dodge, the Board in its opinion said: “Count 5 is more limited in scope than count 4. It calls for parallel arms having aligned openings, with the metal about the openings drawn out to form coaxial sleeves. The only parallel arms shown by McIntyre are the arms which embrace the web of the cam block. Those arms have no alined opening's, with the metal about the openings drawn out to form coaxial sleeves. Melntyre construes the count to read upon the end of the brake shoe provided with the pivotal bearing, but here there are no arms. The flanges are not separated as arms at the pivotal end but are secured in contact to the very end and could not serve to receive a part between them as in the Dodge construction. We regard the construction of McIntyre as insufficient to support the count.”
We agree with the conclusion reached by the Board that McIntyre cannot make this claim.
The decision of the Board in ease No. 2097 is reversed as to claims 1 and 2, and priority of invention as to these claims is awarded to the party Dodge; and affirmed as to claim 4.
The decision in ease No. 2092 is affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
DOBIE, Circuit Judge.
This was an action brought by Connecticut Paper Products, Incorporated (hereinafter called plaintiff), against New York Paper Company (hereinafter called defendant), upon three patents, all involving related subject matter, in which it was claimed that defendant had infringed each of the three patents in suit. The first patent was for a paper drinking cup (Ericson patent No. 1940406, issued December 19, 1933, upon application of June 30, 1932); the second patent was for a metal device for dispensing such cups (Emerson patent No. 2206838, issued July 2, 1940, upon application of April 15, 1940); the third patent was for a design for a paper cup dispenser (design patent to the same Emerson, No. 118578, issued January 16, 1940, upon application of November 4, 1939). ;
Judge Coleman, in the District Court, 39 F.Supp. 127, 131, held that the first patent (paper cup) was invalid under the prior art; that the second patent (metal dispenser) was valid and infringed by defendant; that the third patent (design patent) was invalid on the score that this patent involved only functional features without any substantial ornamental features. From the final decree entered in the lower court, plaintiff duly appealed to this Court and defendant filed a cross-appeal. We shall consider the three patents separately, in the order above indicated.
The Ericson Patent for a Paper Drinking Cup.
Judge Coleman held that this patent is invalid under the prior art. This holding, we think, is eminently correct. Said Judge Coleman, in his opinion: “We have no hesitancy in finding that the Ericson patent is invalid because anticipated by Dickerson”. Judge Coleman also discussed the obvious similarities between the Ericson cup and the Hogan cup. Any lingering doubt here, we feel, will be dispelled when the Ericson cup is compared with other paper cups ante-dating the Ericson patent.
As Judge Coleman well said in his opinion: “It is too well established to require citation of authorities that the object of the patent laws is to reward those who make some substantial discovery or invention which adds to the sum total of our knowledge and makes a step in the development of a given art. It was never the object of the patent laws to grant a monopoly for every trivial device, or for every shade or shadow of an idea which would naturally occur to any one skilled in the particular art. Such an indiscriminate creation of exclusive privileges would tend to discourage rather than stimulate invention.”
See, also, Atlantic Works v. Brady, 107 U.S. 192, 2 S.Ct. 225, 27 L.Ed. 438; Weidhaas v. Loew’s, Inc., 2 Cir., 125 F.2d 544.
And, as this Court (citing authorities therefor) said in Scott & Williams, Inc., v. Whisnant, 4 Cir., 126 F.2d 19, 23, decided February 17, 1942: “Again, the record makes clear that the * * * patent is in no sense basic or revolutionary. At best, it is no more than an ingenious improvement in a crowded field. * * * At the very least, we are justified in giving to the claims of the patent in suit and to the wording of the specifications, a narrow rather than a liberal interpretation.”
There are three claims in the Ericson patent, all substantially similar. We quote the most elaborate of these, Claim 3: “A paper drinking cup having a pair of opposed walls, one of said walls being formed by a pair of overlapping wings, each of which is provided with a flap at its lower edge, the other wall having an extension secured to its lower edge, said flaps and extension being of the same width as that of their respective walls, said overlapping wings providing a thickened triangular portion the base portion of which is substantially the same width as that of said walls, said flaps and extension being folded together in superimposed relation and secured to the base portion of said triangular portion to provide a closed bottom.”
Also we quote the first twentj^-three lines of the Ericson patent:
“This invention relates to paper drinking cups, and more specifically to the flat or envelope type of cup which is adapted to he stored in stacks in dispensing machines and to be withdrawn therefrom one by one in a flat condition.
“It is an object of the present invention to provide an improved cup of this character, one wall of which is provided with a substantially thickened triangular portion, the base of which is disposed adjacent the closed bottom of the cup and which gradually decreases in width towards the mouth of the cup. By means of such a structure, my improved cup may be readily opened by merely pressing the opposite side edges thereof.
“Another object of the present invention is to provide an improved cup of this character, the bottom portion of which will remain substantially flat while stored in the dispensing machine so that the cup may he easily taken therefrom.
“A further object of the present invention is to provide an improved cup of this character which is relatively simple in construction and hence may be cheaply and easily manufactured.”
We append also the drawing which accompanied the Ericson patent, together with lines 35-42 of the patent which seek to explain the drawing:
Also, we quote from Judge Coleman’s opinion, since we think they are important, some statements as to the obvious discrepancies between the description of the Ericson cup in the patent and the Ericson cup model actually introduced in evidence : “Ericson’s patent drawings and specifications describe a triangular overlap and specify that the base of the triangle is the full width of the bottom of the cup; whereas the Ericson cup model actually introduced in evidence does not have the edge of the overlapped side coming' down and meeting the corresponding edge of the bottom overlap. Furthermore, the Ericson model has a folded down portion on one of the top edges, giving a double reinforced part that is not shown in the patent. Also, what is more important, the model is molded in an open position, and dispensed from nested stacked formation as is the Dickerson cup; whereas the Ericson patent stresses the adaptability of the cups to having a plurality of them, ‘stored in a dispensing machine, one upon another, with the bottom of the lowermost cup of the stack exposed so that it may be grasped by the finger of the user and withdrawn from the dispensing machine in flattened condition’.”
Probably the basic claim of the Dickerson patent is Claim 3, which reads: “As a new article of manufacture, a paper drinking cup having its body portion in self-extended substantially rounded form, said body from its open mouth tapering in wedge-like form to a watertight bottom closure made by a straight edge transverse fold-up of the cup material secured to the body wall, the line of fold of said fold-up being óf sufficient length to provide a base for resting the cup against a finger of the user, when held to filling position in his hand.”
Also, we append a drawing of the Dickerson cup:
Below are appended drawings of six other patents for paper drinking cups, all granted before the Ericson patent:
In the light of what has already been said, the drawings incorporated in this opinion, and the observations in Judge Coleman’s opinion, we think it is apparent that the Ericson patent displays no essential novelty that amounts to patentable invention. Plaintiff, we think, has greatly exaggerated both the novelty and the importance, in the Ericson cup, of the triangular overlap tapering from the bottom to the top of the cup. We hold, accordingly, that the Ericson patent in suit is invalid under the prior art.
The Emerson Mechanical Dispenser Patent.
This patent was held by Judge Coleman to be valid and infringed by the device of defendant. We believe that this patent, too, is invalid under the prior art for lack of patentable novelty, since the device in question discloses not a new and patentable combination but rather a mere aggregation of elements, which were old and well known. This distinction between a new combination, which is patentable, and an aggregation of old elements, which is not, was well drawn by Justice Strong, nearly seventy years ago, in Hailes v. Van Wormer, 20 Wall. 353, 368, 87 U.S. 353, 368, 22 L.Ed. 241: “It must be conceded that a new combination, if it produces new and useful results, is patentable, though all the constituents of the combination were well known and in common use before the combination was made. But the results must be a product of the combination, and not a mere aggregate of several results each the complete product of one of the combined elements. Combined results are not necessarily a novel result, nor are they an old result obtained in a new and improved manner. Merely bringing old devices into juxtaposition, and there allowing each to work out its own effect without the production of something novel, is not invention. No one by bringing together several old devices without producing a new and useful result the joint product of the elements of the combination and something more than an aggregate of old results, can acquire a right to prevent others from using the same devices, either singly or in other combinations, or, even if a new and useful result is obtained, can prevent others from using some of the devices, omitting others, in combination.”
See, also, Reckendorfer v. Faber, 92 U.S. 347, 357, 23 L.Ed. 719; Walker on Patents, Dellers Edition, Vol. 1, page 218, Section 42. And see, also, decided by this Court, Victor Cooler Door, Inc., et al. v. Jamison Cold Storage Co., 4 Cir., 44 F.2d 288, 292; Doughnut Machine Corp. v. Joe-Lowe Corp. et al., 4 Cir., 67 F.2d 135, 137.
The line between the patentable combination and the non-patentable aggregation is, in actual practice, sometimes difficult to draw with accuracy and precision. And we are not unmindful of the remarks of Mr. Justice Frankfurter in his dissenting opinion in the very recent case of Pearce v. Commissioner of Internal Revenue, 62 S.Ct. 754, 761, 86 L.Ed. -, decided by the Supreme Court of the United States March 9, 1942: “In law as in life lines have to be drawn. But the fact that a line has to be drawn somewhere does not justify its being drawn anywhere. The line must follow some direction of policy, whether rooted in logic or experience. Lines should not be drawn simply for the sake of drawing lines.”
Returning now to the terms of this patent, we find that Claim 5 of the Emerson dispenser patent reads: “In a paper cup dispenser, a rear element, a front element, and a lid, said rear element comprising an elongated base and a pair of extending flanges therefrom, said front element being generally U-shaped in transverse section with the legs of the U being bulged or bellied substantially throughout their length, said rear element being hinged to the legs of said front element at their respective bottoms, said lid being hinged to said rear element and being dish-shaped with a circumferential depending flange corresponding to the shape of the horizontal section of the front element and rear element when in closed position, and cam means located within the front element whereby the bottom cup of a stack may be released from the remainder of the stack, said dispenser being open at its bottom for dispensing purposes.”
The first twenty lines of the patent thus set out its objects and nature:
“This invention related to paper cup dispensing and more particularly to the dispensing of stacked paper cups one at a time as required.
“Prior to the instant invention paper cups have been dispensed from stack holders but oftentimes the user obtained two cups when only one was required and frequently the user had difficulty in detaching a single cup from the remainder of the stack. Other prior cup dispenser constructions are expensive and difficult to manufacture and require much attention and servicing in endeavor to keep the dispenser in operation.
“It is an object of the instant invention to provide a novel paper cup dispenser which is simple to fabricate, inexpensive to manufacture, and which effects the dispensing of one cup at a time regularly without jamming the stacked cups.
“It is a further object of the instant invention to teach a novel method of dispensing paper cups one at a time from a stack.”
Subjoined is Sheet 1 of the drawing accompanying the patent:
A very strong bit of evidence against the plaintiff’s claim of patentability here, we think, is found in the square green dispenser made and sold by plaintiff before the granting of the patent in suit. No patent was ever issued on the square green dispenser, and this dispenser has been in use and dedicated to the public for a sufficient length of time to render it non-patentable. Diagrams of cross-sections of the two dispensers’ are helpful here. In these diagrams, the dotted lines indicate the cup within the dispenser:
In our opinion, the variations between the two dispensers are of little importance and even less novelty. Thus, in the old dispenser, the cups are held and guided downward by the diagonally opposite corners of the square case; while, in the new dispenser, this function is performed by the guide bellies or bulges. That Emerson considered these guide bellies or bulges to be of primary importance is apparent from a casual reading of the patent; for they are set out and stressed in every claim in issue. We are not so impressed. Nor are these bellies or bulges altogether new in the art, as will be seen by an inspection of the Taylor patent (No. 1594134), the Rese patent (No. 1065395) and the Ohlsen patent (No. 1685292) — all in this same field.
Further, in the old dispenser, the cups passed at the bottom through a single metal piece with a central opening extending practically from one corner of the dispenser to the opposite diagonal corner; while the new dispenser contains, set on the side at the bottom, cam means in the nature of two metal plates, and set at a V-shaped angle sloping downwards and inwardly. The reversal, front to rear, of the casings of the two dispensers, and the pinched-in bottom of the new dispenser add little of practical consequence to the picture.
Our conclusion here is reinforced by an inspection of the patents of other dispensers in the prior art. Essentially these follow the same general pattern as the patent in suit. A comparison of these prior dispensers and the Emerson patent convinces us that the Emerson device is in reality a mere non-patentable aggregation of well-known elements and is in essence far from a new patentable combination.
The Emerson Design Patent.
We cordially agree with Judge Coleman that the Emerson design patent is invalid and we deem it unnecessary to add much' to what he has said on this subject in his opinion.
In Walker on Patents, Dellers Edition, Vol. 1, Sec. 138, page 434, we find: “Where the configuration of a design is made imperative by the elements which it combines and by the utilitarian purposes of the device, so that the design itself is nothing more than a necessary response to the purpose of the article designed, no patentable design results.”
This is amply supported by a long line of cases. See, especially, Standard Computing Scale Co. v. Detroit Automatic Scale Co., 6 Cir., 265 F. 281; Majestic Electric Development Co. v. Westinghouse, etc., Co., 9 Cir., 276 F. 676; Applied Arts Corporation v. Grand Rapids Metalcraft Corporation, 6 Cir., 67 F.2d 428, 430.
There is, too, a second and even stronger reason for holding the design patent invalid on the ground it lacked the requisite inventive characteristics. Walker on Patents, Lotsch Edition, Sections 41 and 45. It was early established that for a design to be patentable, there must be both originality and the exercise of the inventive faculty. Western E. M. Co. v. Odell, D.C., 18 F. 321. And the test of invention for a design patent is the same as that applied to mechanical patents, namely, was the design beyond the powers of the ordinary designer. F. I. A. T. v. A. Elliott Ranney Co., 2 Cir., 249 F. 973; Whiting Mfg. Co. v. Alvin Silver Co., 2 Cir., 283 F. 75; Metallic Industries, Inc., v. Brauning, 8 Cir., 279 F. 856; Strause Gas Iron Co. v. William M. Crane Co., 2 Cir., 235 F. 126. As was stated in Sodemann Heat & Power Co. v. Kauffman, 8 Cir., 275 F. 593, 597: “A design, to be patented, * * * must present to the eye of the ordinary observer a different effect from anything that preceded it, and render the article to which it is applied pleasing, attractive, and beautiful; there must be something akin to genius, an effort. of the brain, as well as the hand.”
A comparison of the patent in suit with other prior dispensers, particularly the Ajax dispenser, exhibited in Court, we think, rather clearly discloses that the Emerson design patent fails to meet this test.
The Emerson design patent, therefore, must be deemed void for anticipation and lack of invention.
We, accordingly, affirm the decree of the lower court to the extent that this decree holds the Ericson cup patent (No. 1940406) invalid and the Emerson design patent (No. 118578) invalid; while we reverse this decree to the extent of its holding that the Emerson cup dispenser patent (No. 2206838) is valid. Our decision that all three of the patents in suit are invalid makes it unnecessary for us to pass upon other questions involved.
Affirmed in part; reversed in part.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
SELYA, Circuit Judge.
Defendant-appellant Robert E. Bradley questions the district court’s application of the sentencing guidelines. Notwithstanding the elegance with which Bradley’s arguments are advanced by able counsel, we find the appeal lacking in substance.
How The Sentence Eventuated
In October 1989, Bradley attracted the attention of an intergovernmental drug enforcement task force. Undercover agents managed to gain his confidence and purchased 3.4 grams of cocaine from him. Five days later, the agents initiated negotiations to acquire a kilogram. While these negotiations were ongoing, they made several smaller purchases from Bradley. Although Bradley agreed to sell the kilogram, he was arrested before it was produced.
A federal grand jury returned a six count indictment charging that, on five separate dates between October 27, 1989 and November 28, 1989, appellant distributed cocaine in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(C). The sixth count charged appellant with carrying a firearm during and in relation to the commission of drug trafficking crimes, thereby violating 18 U.S.C. § 924(c)(1) (1988). Appellant entered guilty pleas to all counts.
In due course, the presentence investigation report was prepared. The probation officer considered defendant’s objections to the report and issued an addendum. The district court held a sentencing hearing to resolve the remaining objections, made a series of findings, and proceeded to calculate the guideline sentencing range (GSR). See generally United States v. Diaz-Villafane, 874 F.2d 43, 47-48 (1st Cir.) (explaining method of computation under federal sentencing guidelines), cert. denied, — U.S. -, 110 S.Ct. 177, 107 L.Ed.2d 133 (1989); United States v. Wright, 873 F.2d 437, 440 (1st Cir.1989) (similar). Although we will trace certain details of that computation in greater detail infra, it is enough for introductory purposes to note that the court grouped counts 1-5 pursuant to U.S. S.G. § 3D1.2(d); set the base offense level at 26 on the theory that defendant’s overall conduct involved 1.814 kilograms of cocaine, see U.S.S.G. § 2D1.1(c)(9) (Drug Quantity Table) (establishing base offense level at 26 where includable conduct implicates “500 G but less than 2 KG of cocaine”); and determined the GSR for counts 1 through 5, combined, to be 70-87 months, see U.S.S.G. Ch. 5, Pt. A (Sentencing Table) (offense level 26; criminal history category II).
The court imposed a sentence within, but at the very zenith of, the GSR: 87 months in prison, plus a term of supervised release. This appeal followed.
The Issues
Although appellant offers many arguments in his brief on appeal, the array boils down to two principal remonstrances. First, he contends that the court below erred in attributing amounts of cocaine to him, thus exaggerating his base offense level. Second, he urges us to find that the court impermissibly withheld a two level reduction for acceptance of responsibility. We will examine these contentions in sequence.
Before reaching the first issue, however, we believe that we should narrow it. The district court’s computation of the GSR rested upon its finding that Bradley’s relevant criminal conduct involved at least 500 grams of cocaine. See U.S.S.G. § 2D 1.1(c)(9) (Drug Quantity Table). It is undisputed that the five consummated transactions in which Bradley gave or sold contraband to the undercover agents involved 102.1 grams of cocaine. The section 2D1.1(c)(9) threshold was crossed when the court counted (1) the evanescent kilogram of cocaine which Bradley agreed to sell to the agents but never delivered, and (2) 714 grams of cocaine which the court found, from Bradley’s own testimony at the sentencing hearing, had previously been sold by him to others as “part of the same course of conduct or common scheme or plan as the offense of conviction,” although not charged in the indictment. See U.S. S.G. § lB1.3(a)(2).
Appellant’s counsel forthrightly conceded at oral argument that the 102.1 grams was properly counted and that he could prevail on appeal only by persuading us that both the kilogram and the 714 grams were wrongly included in the calculation. Inasmuch as Level 26 is triggered by any quantity of 500 grams or more, see U.S.S.G. § 2Dl.l(c)(9) (Drug Quantity Table), either of the other amounts, when added to the admitted 102.1 grams, would pull the trigger. Hence, the base offense level was correctly calculated so long as one or the other of the add-ons was appropriately included.
In light of this concession, our task is effectively halved. Since we find that the lower court’s inclusion of the negotiated kilogram was irreproachable, see infra, we can safely eschew consideration of whether defendant’s antecedent drug dealings totalled 714 grams or involved the same course of conduct as the counts of conviction. After all, when correction of a finding would not change the applicable offense level or affect the sentencing range, any error therein would necessarily be harmless. Accord United States v. Sciarrino, 884 F.2d 95, 98 (3d Cir.), cert. denied, — U.S. -, 110 S.Ct. 553, 107 L.Ed.2d 549 (1989).
The Missing Kilogram
In this type of ease, a key datum in constructing defendant’s sentence is the quantity of narcotics attributable to him for sentencing purposes, a datum bounded initially by the sum of the charged conduct to which the defendant pleads plus his “relevant” uncharged conduct. See U.S.S.G. § lB1.3(a)(2). Put another way, “in a drug distribution case, quantities and types of drugs not specified in the count of conviction are to be included in determining the offense level if they were part of the same course of conduct or ... common scheme or plan as the count of conviction.” U.S. S.G. § lB1.3(a)(2) comment, (backg’d). We painstakingly explained the operation of this principle in United States v. Blanco, 888 F.2d 907, 908-11 (1st Cir.1989), and will not rehearse that discussion here. Suffice to say that every court to consider the issue, including this one, has concluded that an amount of drugs which a defendant negotiates to sell may be considered as relevant conduct for base offense level purposes even if the drugs are never produced. See, e.g., United States v. Alston, 895 F.2d 1362, 1371-72 (11th Cir.1990); United States v. Garcia, 889 F.2d 1454, 1456 (5th Cir.1989), cert. denied, — U.S. -, 110 S.Ct. 1829, 108 L.Ed.2d 958 (1990); Blanco, 888 F.2d at 909; United States v. Perez, 871 F.2d 45, 48 (6th Cir.), cert. denied, — U.S. -, 109 S.Ct. 3227, 106 L.Ed.2d 576 (1989); see also United States v. ValleSanchez, 912 F.2d 424, 426 (10th Cir.1990) (guidelines “permit inclusion of amounts which a defendant agrees to sell but ... does not deliver”) (dicta).
One pillar upon which these rulings rest has been sculpted by the Sentencing Commission, which wrote:
If the defendant is convicted of an offense involving negotiation to traffic in a controlled substance, the weight under negotiation in an uncompleted distribution shall be used to calculate the applicable amount. However, where the court finds that the defendant did not intend to produce and was not reasonably capable of producing the negotiated amount, the court shall exclude from the guideline calculation that amount that it finds the defendant did not intend to produce and was not reasonably capable of producing.
U.S.S.G. § 2D1.4, comment, (note 1). This line of reasoning has consistently been applied not just to persons convicted of conspiracy or attempt, but to persons found guilty of substantive narcotics offenses. See, e.g., Garcia, 889 F.2d at 1456-57; United States v. White, 888 F.2d 490, 497 (7th Cir.1989); Blanco, 888 F.2d at 908-09. Thus, our inquiry reduces to the supportability of the district court’s finding that Bradley fully intended to produce, and was reasonably capable of producing, the missing kilogram.
To be sure, the answer is not entirely one-sided. There are points in defendant’s favor: the kilogram never surfaced; there is no evidence that Bradley previously handled single transactions of such a large size; some of the negotiations may have taken place in an atmosphere permeated by drugs and alcohol; and defendant testified that the kilogram was a figment of his imagination and the promise to deliver it born of bravado and braggadocio. Yet the points in the other direction seem at least as convincing. The agents testified: that approximately two weeks after their initial introduction, Bradley told them he would— and could — sell “any amount [of cocaine] at any time ... provided you pass my security check;” that when they broached the subject of buying a kilogram, Bradley immediately quoted a price and an availability date; that Bradley thereafter negotiated in earnest, upping the price tag from $28,000 to $32,000 in the course of the cotillion; that Bradley threatened to shoot one of the agents between the eyes if he notified the police when the kilogram was delivered (and, brandishing a semiautomatic machine pistol, graphically demonstrated how he would carry out the threat); and that Bradley groused about the heightened risks of selling a kilogram as opposed to peddling fractional ounces.
Moreover, when the agents first met Bradley at a party, they overheard him tell two friends that the cocaine being provided for the gathering had cost $28,000 per kilogram — the exact figure which he subsequently quoted to the agents. Perhaps most damning of all, when Bradley jacked up the price of the kilogram in midstream, he gave the agents a slip of paper written in his own hand, which read: “The price on the key is $32,000 it’s here — that’s a yes or no with zero discussion.” When the agents inquired what “it’s here” meant, appellant responded that he could deliver the contraband within the hour.
We think that we have gone far enough to give the reader a flavor of what transpired between prospective seller and prospective buyer. The government had the burden of demonstrating by a fair preponderance that uncharged amounts of drugs used in selecting the base offense level were properly included. In weighing the facts the sentencing court could evaluate virtually any dependable information, see U.S.S.G. § 6A1.3 (sentencing court may consider all pertinent information which has “sufficient indicia of reliability to support its probable accuracy”), including the agents’ recollections. As to the missing kilogram, the prosecution’s burden was carried handsomely.
The district court made specific findings, articulating its reasons for believing that Bradley both intended, and had the capacity, to deliver the kilogram. The court considered Bradley’s account of the transaction and explicitly rejected it, finding implausible that Bradley would have played so dangerous a game other than with serious purpose. Such credibility determinations and interpretations of the true meaning of subsidiary facts are uniquely within the province of the sentencing judge. See, e.g., United States v. Jimenez-Otero, 898 F.2d 813, 814-15 (1st Cir.1990). And the collocation of attendant circumstances neatly accommodates the court’s rationale.
On appeal, the sentencing court's finding that drugs other than those specified in the indictment existed and formed part of the same course of conduct is entitled to considerable deference. See Diaz-Villafane, 874 F.2d at 48; Wright, 873 F.2d at 443-44; see also 18 U.S.C. § 3742(e) (1985 & Supp.1990). Absent mistake of law — and there has been none here — we review such conclusions only for clear error. United States v. Mocciola, 891 F.2d 13, 16 (1st Cir.1989). We will not disturb supported findings unless our scrutiny of the record convinces us that a grave mistake was made. We cannot find such a mistake appertaining to computation of Bradley’s base offense level. As we have heretofore written, “where there is more than one plausible view of the circumstances, the sentencing court’s choice among supportable alternatives cannot be clearly erroneous." United States v. Ruiz, 905 F.2d 499, 508 (1st Cir.1990); accord Jimenez-Otero, 898 F.2d at 815 (quoting Anderson v. Bessemer City, 470 U.S. 564, 573-74, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518 (1985)).
Acceptance of Responsibility
Appellant also contends that the court below miscalculated the GSR because it failed to shrink his offense level to reflect acceptance of responsibility. Of course, the defendant must carry the burden of proving his entitlement to a downward adjustment in the offense level. United States v. Ocasio, 914 F.2d 330, 337-38 (1st Cir.1990); United States v. Urrego-Linares, 879 F.2d 1234, 1238-40 (4th Cir.), cert. denied, — U.S. -, 110 S.Ct. 346, 107 L.Ed.2d 334 (1989). Moreover, “[bjecause the sentencing judge has the unique opportunity of observing the defendant, hearing his allocution, and evaluating acceptance of responsibility in a live context against the backdrop of the case as a whole, his determination is entitled to great respect.” United States v. Royer, 895 F.2d 28, 29 (1st Cir.1990); see generally 18 U.S.C. § 3742(e) (1985 & Supp.1990). Thus, the district court’s decision to withhold such a reduction will be reversed only for clear error. Royer, 895 F.2d at 29; United States v. Mata-Grullon, 887 F.2d 23, 24 (1st Cir.1989) (per curiam).
In this instance, we have no occasion to linger. While Bradley pled guilty to the charges, that did not entitle him to a sentencing discount as a matter of right. See United States v. Scott, 915 F.2d 774, 776 (1st Cir.1990); Royer, 895 F.2d at 29-30. Rather, “[tjhe inquiry into acceptance of responsibility is necessarily factbound” and “[cjredibility and demeanor play a crucial role in determining whether a person is genuinely contrite.” Royer, 895 F.2d at 30. Bradley’s guilty plea was, therefore, but one integer in an elaborate calculus.
Here, the record belies appellant’s assertion that the trial court lacked a sufficient foundation to withhold the discretionary two level reduction. The court made a specific finding, amply supported by the facts and by plausible inferences therefrom, that appellant, to the bitter end, was “engaged ... in the process of minimizing his responsibility and culpability.” The court found that Bradley lied at the sentencing hearing about his intent and capacity to deliver the kilogram of cocaine, see supra pp. 604-606, about many of his statements to the agents, and about his use of firearms. In fine, the district court had a surfeit of valid reasons for denying the credit in this case. Acceptance of responsibility, in the final analysis, “necessitates candor and authentic remorse — not merely a pat recital of the vocabulary of contrition.” Royer, 895 F.2d at 30.
Conclusion
We need go no further. Inasmuch as the GSR was based upon findings that cannot in good conscience be characterized as clearly erroneous, and the sentence appealed from was within, albeit at the high end of, the applicable guideline range, the judgment of conviction and defendant’s sentence must be
Affirmed.
. This grouping of multiple counts was advantageous to Bradley and he does not question it on appeal.
. As required by law, 18 U.S.C. § 924(c)(1), defendant received a separate 5-year jail sentence on count 6 (the weapons charge), running consecutive to the 87-month sentence. On appeal, Bradley does not contest the separate 5-year sentence.
. We acknowledge, but see no point in longiloquently addressing, appellant’s claim that the "uncharged conduct” provisions of the sentencing guidelines, and in particular U.S.S.G. § 1B1.3, violate the Due Process Clause as applied to him because, inter alia, the negotiated kilogram was never actually sold and he was never charged with the attempt. Citing United States v. Restrepo, 883 F.2d 781 (9th Cir.1989), Bradley argues that to sentence him as if the single kilogram sale had actually been completed was fundamentally unfair. Appellant’s Brief at 33-34. The short answer to appellant’s plaint is that Restrepo was withdrawn, then reversed, by the Ninth Circuit. See United States v. Restrepo, 903 F.2d 648 (9th Cir.1990). The slightly longer, but equally definitive, answer is that section 1B1.3 has been routinely upheld in the face of similar due process challenges. See, e.g., United States v. Castellanos, 904 F.2d 1490, 1492-96 (11th Cir.1990) (on petition for rehearing); United States v. Beaulieu, 900 F.2d 1537, 1540 (10th Cir.), cert. denied, — U.S. -, 110 S.Ct. 3252, 111 L.Ed.2d 762 (1990); United States v. Strong, 891 F.2d 82, 85 (5th Cir.1989); United States v. Fox, 889 F.2d 357, 363 (1st Cir.1989); Blanco, 888 F.2d at 909-10; United States v. Barnerd, 887 F.2d 841, 842 (8th Cir.1989). Though artfully fashioned, appellant’s claim is, like Talleyrand seen through Napoleon’s eyes, figuratively equivalent to a silk stocking filled with mud.
. Section 3E1.1 of the sentencing guidelines provides for a two level decrease "[i]f the defendant clearly demonstrates a recognition and affirmative acceptance of personal responsibility for his criminal conduct.”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
Petitioner, Orchard Corporation of America, seeks review of a decision of the National Labor Relations Board finding that petitioner violated § 8(a) (1) of the National Labor Relations Act and ordering that a new election be held. The Board cross-petitions for enforcement of its order.
The Orchard Corporation, which buys and processes paper, employs 72 hourly workers. In the spring of 1967 the St. Louis Printing Pressmen and Assistants Union Local No. 6, in response to requests from several employees, commenced an organization campaign at the Orchard Corporation plant. During the course of the campaign, Mr. Lehtinen, a company supervisor, informed an employee that he had seen a list of employees who had attended a union meeting. On other occasions Lehtinen interrogated employees with respect to their feelings about the union. He made veiled suggestions that certain privileges now enjoyed by the employees would be lost if they became unionized. The Board found that because of these actions by Lehtinen the company violated § 8(a) (1) of the Act by coercively interrogating employees about union activities, by creating an impression of surveillance of union activities, and by threatening to withdraw currently enjoyed privileges.
Petitioner alleges that the actions of its supervisor are merely isolated instances which provide no substantial evidence to support the Board’s findings. We affirm the Board’s findings and grant enforcement of its order.
We think that the record as a whole contains substantial evidence to support the Board’s findings of § 8(a) (1) violations. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). An employer’s background of “strong anti-union posture” may properly be considered to determine the probable effects on employees of particular acts of the employer. See, e. g., NLRB v. Hawthorn Co., 404 F.2d 1205, 1208 (8 Cir. 1969) ; NLRB v. Ralph Printing & Lithographing Co., 379 F.2d 687, 690 (8 Cir. 1967) ; NLRB v. Lexington Chair Co., 361 F.2d 283, 290 (4 Cir. 1966) ; NLRB v. Griggs Equip., Inc., 307 F.2d 275, 278 (5 Cir. 1962). It is not disputed that the company, as was their right, vigorously campaigned against the union. While the Board found that other conduct of the company did not constitute violations of the Act, the overall background surrounding the parties lends substance to the Board’s finding of violations with respect to the company supervisor’s actions. As recently observed by the Court of Appeals for the Fifth Circuit:
“Of course, the company has a legal right to ‘[make] no bones about its opposition to the Union.’ Hendrix Mfg. Co. v. NLRB, 5 Cir. 1963, 321 F.2d 100, 103. However, the Board is entitled to consider emphatic anti-union attitudes as ‘background’ against which to measure the impact on employees of management’s statements and conduct. 321 F.2d at 103-104, n. 6 p. 104.” Independent, Inc. v. NLRB, 406 F.2d 203, 205 n. 1 (5 Cir. 1969).
Accordingly, we affirm the Board’s findings and grant enforcement of its order.
. The Board ordered that the Regional Director pass upon the trial examiner’s ruling setting aside the election. The Regional Director ordered a new election. It is urged that this order should be rescinded since there exists “only minimal instances of 8(a) (1) conduct.” The last election was the third rejection of the union in recent years. The last vote was 47 to 23 against the union.
Assuming arguendo, the apparent equity to petitioner’s argument, the Board’s election order in its present posture is not ripe for review. See NLRB v. William J. Burns Int’l Detective Agency, 346 F.2d 897 (8 Cir. 1965). As stated in Daniel Constr. Co. v. NLRB, 341 F.2d 805, 810 (4 Cir. 1965) :
“Our decision here does not deny Daniel its day in court on the objections which it has raised to the Board’s determinations in the representation proceeding; it merely forecloses Daniel from raising those objections on this day in court. Daniel will be entitled to a review of the Board action in the representation case if the following succession of events occurs: the union wins the new election and is certified by the NLRB as the bargaining agent for the employees in question, the company thereafter refuses to bargain with the union because it feels the election was defective in some way, and the Board in a subsequent unfair labor proceeding adjudges the company to be in violation of section 8(a) (5) of the Act and orders it to bargain with the union as certified. Boire v. Greyhound Corp., 376 U.S. 473, 477, 84 S.Ct. 894, 11 L.Ed.2d 849 (1964) ; NLRB v. Falk Corp., supra [308 U.S. 453, 60 S.Ct. 307, 84 L.Ed. 396] ; Volney Felt Mills v. LeBus, 196 F.2d 497 (5 Cir. 1952).”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
MacKINNON, Circuit Judge:
In this case, we are called upon to examine the right of a labor organization, consonant with the provisions of the National Labor Relations Act (N.L.R.A.), to discipline those members who have crossed its picket line to work during an authorized strike. We must determine the effect which a member’s resignation from the union, before, during, or after such conduct, has upon the union’s disciplinary authority. We are also requested to consider the legal implications of the “reasonableness” of the fines imposed, where the union has threatened enforcement thereof, or has actually sought collection through legal means.
The essential facts are not in dispute. Booster Lodge No. 405, International Association of Machinists and Aerospace Workers, AFL-CIO (hereinafter sometimes referi’ed to as the Union), and The Boeing Company, (hei’einafter sometimes referred to as the Company), were parties to a collective bargaining agreement which was effective from May 16, 1963, through September 15, 1965. Upon the expiration of the contract, the Union commenced a lawful strike against Boeing at its Michoud plant, as well as at various other locations. This work stoppage lasted 18 days. On October 2, 1965, a new bargaining agreement was signed, and the economic strikers returned to work the following day. Both the expired agreement and the newly executed contract contained maintenance-of-membership clauses, which required all new employees to notify both the Union and the Company within 40 days of their acceptance of employment if they elected not to become Union members. It also required those who were Union members to retain their membership during the contract term.
During the strike period, approximately 143 employees, of the 1900 production and maintenance employees represented by the Union at the Michoud plant, crossed the picket line and reported to work. All of these persons had been Union members during the 1963-1965 contract period. Some of the employees who worked during the strike made no attempt to resign from the Union during the strike. The remaining 119 submitted their voluntary resignations, in writing, to both the Union and the Company. About 61 of the employees who resigned did so before they crossed the picket line and returned to work. Another 58 resigned during the course of the strike, but after they had crossed'the picket line in order to work. All resignations were submitted after the expiration of the 1963-1965 contract, and before the execution of the new agreement, and all wei’e submitted prior to the imposition of any Union discipline. Union members had not been warned prior to the strike that disciplinary measures could, or would, be taken against those who ei-ossed the picket line to woi’k, nor had any such discipline been imposed on members by Booster Lodge 405 prior to this time.
In late October or early November of 1965, the Union notified all members and former members who had crossed the picket line to work during the strike that charges had been preferred against them under the International Union Constitution, for “Improper Conduct of a Member” due to their having “accept[ed] employment... in an establishment where a strike exist [ed].” They were advised of the dates of their Union trials, which were to be held even in their absence if they did not appear, and they were notified of their right to be represented by any counsel who was a member of the International Association of Machinists and Aerospace Workers. Pursuant to the International Union Constitution provision which permitted the imposition of disciplinary measures, including “reprimand, fine, suspension, or expulsion from membership, or any lesser penalty or combination,” where a member had been found guilty of misconduct after notice and a hearing, fines were imposed on all employees who had worked during the strike. No distinction was drawn between those persons who had resigned from the Union during the course of the strike and those who had remained Union members.
Employees who did not appear for trial before the Union Trial Committee and those who appeared but were found guilty were fined $450.00 each, the amount determined by the membership, and they were barred from holding a Union office for a period of 5 years. The fines of about 35 employees who appeared for trial, apologized, and pledged loyalty to the Union, were reduced to 50 percent of the earnings they received during the strike. In some of these cases the time period during which these persons were prohibited from holding Union office was decreased to a period based upon the number of days of strikebreaking activity each respective person had engaged in. None of the disciplined individuals processed intra-Union appeals.
Although none of the $450.00 fines has been paid, reduced fines have been paid in some instances. The Union has sent out written notices that the matter has been referred to an attorney for collection, that suit will be filed if the fines remain unpaid, and that reduced fines will be reinstated to $450.00 in the event of nonpayment. The Union has also filed suit against nine individual employees to collect the fines (plus attorney’s fees and interest). None of these suits has yet been resolved.
On February 18, 1966, the Company filed a charge with the N.L.R.B., alleging that the Union had violated Section 8(b) (1) (A) of the N.L.R.A., and a complaint was issued by the General Counsel. The Labor Board decided that the Union violated section 8(b) (1) (A): (1) by fining those employees who had resigned from the Union before they returned to work during the strike; and (2) by disciplining those employees who had resigned after returning to work, to the extent that the fines were imposed for their working during the strike after their resignations. The Board further found that the Union did not violate the Act (3) by fining members for crossing the picket line to work, and by fining those employees who had resigned after returning to work during the strike, for work.they performed during the strike prior to their resignations.
Finally, the Board determined (4) that it was not the intention of Congress to have the N.L.R.B. regulate the size of such disciplinary fines and establish standards with respect to their reasonableness, and it dismissed the claim that otherwise legal fines may be rendered violative of the N.L.R.A. if unreasonably large. A cease and desist order was issued, and the Union was ordered to refund any fines collected from employees who had resigned before returning to work. The Union was also required to refund a pro rata portion of those fines collected from employees who had resigned after first engaging in work during the strike, so that the part of the fines retained would only reflect pre-resignation conduct.
Booster Lodge 405 challenges the Board’s conclusion that a mid-strike resignation from a union relieves an individual from the burden of union discipline with respect to his post-resignation activity, while The Boeing Company contends that the N.L.R.B. should have examined the reasonableness of the fines imposed by the Union. The Board seeks enforcement of its order.
Part I of this opinion discusses the legality of the imposition of the disciplinary fines by the Union in response to the strikebreaking by the approximately 143 employees involved. Part II considers the effect the reasonableness of the fines has upon their propriety under the N.L.R.A., and the proper function of the N.L.R.B. in this area. Finally, Part III deals with the propriety of the Board’s remedial order.
I
The Legality of the Disciplinary Fines A. The Employees Who Did Not Resign
As early as 1954, in Minneapolis Star and Tribune Co., 109 NLRB 727 (1954), the Labor Board held that a union did not violate Section 8(b) (1) (A) of the Act by imposing a fine on a member for his failure to perform picket duty during the course of an authorized strike. The Board declared that the proviso to 8(b) (1) (A) precluded any interference by it with the internal affairs of a labor organization in such a situation. In N.L.R.B. v. Allis-Chalmers Manufacturing Co., 388 U.S. 175, 87 S.Ct. 2001, 18 L.Ed.2d 1123 (1967), a divided Supreme Court similarly determined that a union did not violate the N.L.R.A. when it imposed, and attempted to enforce through court action, reasonable fines against members for their failure to honor an authorized picket line. Instead of relying upon the express language of the proviso, however, the Supreme Court carefully analyzed the entire legislative history of Section 8(b) (1) (A), and it concluded that Congress did not intend to prohibit such internal union discipline by the prohibition against “restraint” or “coercion.” See 388 U.S. at 183-195, 87 S.Ct. 2001. The Court noted:
National labor policy has been built on the premise that by pooling their economic strength and acting through a labor organization freely chosen by the majority, the employees of an appropriate unit have the most effective means of bargaining for improvements in wages, hours, and working conditions. The policy therefore extinguishes the individual employee’s power to order his own relations with his employer and creates a power vested in the chosen representative to act in the interests of all employees. “Congress has seen fit to clothe the bargaining representative with powers comparable to those possessed by a legislative body both to create and restrict the rights of those whom it represents...”
388 U.S. at 180, 87 S.Ct. at 2006. See J. I. Case Co. v. N.L.R.B., 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762 (1944). The Court further stated:
Integral to this federal labor policy has been the power in the chosen union to protect against erosion [of] its status under that policy through reasonable discipline of members who violate rules and regulations governing membership. That power is particularly vital when the members engage in strikes. The economic strike against the employer is the ultimate weapon in labor’s arsenal for achieving agreement upon its terms, and “[t]he power to fine or expel strikebreakers is essential if the union is to be an effective bargaining agent ft
388 U.S. at 181, 87 S.Ct. at 2007.
In more recent decisions, the Supreme Court has reaffirmed the right of a union to impose and enforce reasonable fines against members who engage in strikebreaking activities. In Scofield v. N.L.R.B., 394 U.S. 423, 428-430, 89 S.Ct. 1154, 22 L.Ed.2d 385 (1969), the Court emphasized the right of a union to enforce a properly adopted rule which reflects a legitimate union interest, impairs no statutory labor policy, and is reasonably enforced against union members. See N.L.R.B. v. Industrial Union of Marine etc. Workers, 391 U.S. 418, 423, 88 S.Ct. 1717, 20 L.Ed.2d 706 (1968). See also Rocket Freight Lines Co. v. N.L.R.B., 427 F.2d 202, 205-206 (10th Cir.), cert. denied, 400 U.S. 942, 91 S.Ct. 241, 27 L.Ed.2d 246 (1970); Silard, Labor Board Regulation of Union Discipline After Allis-Chalmers, Marine Workers and Scofield, 38 Geo.Wash.L. Rev. 187 (1969). In light of these developments, it is clear that the Union acted within the sphere of its lawful authority when it decided to impose fines on the 24 strikebreaking members who did not resign from the Union. Similarly, the Union’s threats to enforce these fines, as well as its actual efforts to achieve court enforcement thereof, were not prohibited by the N.L.R.A. However, a more difficult question arises with respect to the 119 employees who resigned from the Union during the strike period.
B. The Employees Who Did Resign
As the Supreme Court recognized in Allis-Chalmers, when Section 8(b) (1) (A) was enacted, “Congress was operating within the context of the ‘contract theory’ of the union-member relationship which widely prevailed at that time.” N.L.R.B. v. Allis-Chalmers Mfg. Co., supra, 388 U.S. at 192, 87 S. Ct. at 2013. See International Association of Machinists v. Gonzales, 356 U.S. 617, 618, 78 S.Ct. 923, 2 L.Ed.2d 1018 (1958). Under this theory union membership was deemed in effect to create a “contract” between the labor organization and the member which imposed certain obligations on the member, and the decision emphasized “that ‘The courts’ role is but to enforce the contract.’ ” 388 U.S. at 182, 87 S.Ct. at 2008. See Summers, The Law of Union Discipline: What the Courts Do in Fact, 70 Yale L.J. 175, 180 (1960). It is, therefore, obvious that membership in the labor organization is the sine qua non to the authority of a union to impose disciplinary burdens upon the employees it represents. This has been widely recognized.
In Allis-Chalmers, the Court expressly limited its holding to “reasonable discipline of members who violate rules and regulations governing membership.” N.L.R.B. v. Allis-Chalmers Mfg. Co., supra, 388 U.S. at 181, 87 S.Ct. at 2007 (emphasis supplied). See also id. at 195-196. The Labor Board specifically recognized this indispensable prerequisite in Scofield, 145 NLRB 1097, 1104 (1964), where it noted that “[a] union rule that a member is subject to a fine if he [violates a valid union rule] does not mean that he is subject to such a fine as an employee.” (Emphasis in original.) This membership requirement for union disciplinary authority was affirmed by the Supreme Court in Scofield v. N.L.R.B., 394 U.S. 423, 429, n. 5, 89 S.Ct. 1154, 1157, 22 L.Ed.2d 385:
As an employee, [an individual] may be a “good, bad, or indifferent” member so long as he meets the financial obligations of the union security contract. * * * But as a union member, so long as he chooses to remain one, he is subject to union discipline. (Emphasis supplied.)
See 394 U.S. at 435, 89 S.Ct. at 1160. Thus the Court recognized that “union members... are free to leave the union and escape the [union] rule.” Id. at 430, 89 S.Ct. at 1158. It is therefore apparent that Booster Lodge U05 only had the authority to discipline those employees who were in fact Union members at the time they engaged in the complained of activity.
Approximately 58 of the employees who worked during the strike submitted their resignations to the Union after they had already engaged in some of the conduct proscribed by the International Union Constitution. In light of the above discussion regarding union authority over action undertaken by full members, we must concur in the Board’s determination that the Union did not violate Section 8(b) (1) (A) so far as its imposition of disciplinary fines concerned this preresignation conduct. The fact that the fines were not officially imposed for these pre-resignation breaches of Union regulations until after the strikebreakers had resigned, in no way negated the authority of the Union over these persons with respect to these acts, as the N.L.R.B. properly recognized.
The provisions of a contract are enforceable, and a cause of action can be brought upon them, even after the expiration or termination of the agreement. The rights and duties created by an agreement are extinguished only prospectively by the termination thereof. Thus the termination of some employees’ membership here did not affect the Union’s subsequent assertion of rights which had accrued to the Union during their earlier period of membership, such as the right to discipline the employees for prior strikebreaking. The effect of these employees’ resignations was only to extinguish the Union’s future authority over them.
Booster Lodge No. 405, International Association of Machinists and Aerospace Workers, AFL-CIO, 185 NLRB No. 23, 1970 CCH NLRB ¶ 22,259, at p. 28,693 (1970).
C. Fines Imposed for Post-resignation Conduct
An extremely difficult question is presented with respect to the fines which were imposed upon employees for their posi-resignation conduct. Booster Lodge 405 has made a sophisticated argument which would expose persons who were members at the commencement of a particular strike to union discipline with respect to any strikebreaking action undertaken during that specific work stoppage. Although it concedes that such a restriction is not contained in any of the express language of the International Union Constitution or Bylaws, the Union urges this court to “flesh out” such documents by imposing such an obligation by implication. We must decline this invitation.
It must be emphasized that in situations like this, while “the function of the court is to determine, as far as is possible, the intention of the contracting parties and to give legal effect thereto,” it is generally recognized that courts will not usually imply offenses not specified in a union’s constitution or by-laws. We believe that this latter consideration is controlling with respect to the instant case. As the union recognizes, there is nothing in the record which evidences any intention on the part of the approximately 119 persons who resigned during the strike in question that their initial acceptance of Union membership would impose upon them the type of continuing obligation which Booster Lodge 405 now asks this court to impose. Furthermore, the very fact that they resigned during this period, in an obvious attempt to escape the disciplinary authority of the Union, belies this proposed line of reasoning.
In addition, an extremely important national labor policy militates against the imposition of such an implied obligation. Section 7 of the N.L.R. A. expressly protects the right of any employee to refrain from any or all of the concerted activities guaranteed to employees under the Act. While Allis-Chalmers and Scofield recognized the legality of certain express union provisions limiting an employee’s freedom where he had voluntarily accepted full union membership, nothing in those decisions supports the Union’s theory of implied, post-resignation restrictions. In fact, language in Scofield expressly indicates otherwise. The Supreme Court only recognized the right of a union “to enforce a properly adopted rule which reflects a legitimate union interest, impairs no policy Congress has imbedded in the labor laws, and is reasonably enforced against union members who are free to leave the union and escape the rule.” Scofield v. N.L.R.B., supra, 394 U.S. at 430, 89 S.Ct. at 1158 (emphasis supplied). As the Board properly concluded below, after resignation, “[b]oth the member’s duty of fidelity and the union’s corresponding right to discipline him for breach of that duty are extinguished.” Booster Lodge No. 405, International Association of Machinists and Aerospace Workers, AFL-CIO, supra, 1970 CCH NLRB ¶ 22,259, at p. 28,692.
The Union has relied heavily upon the First Circuit’s holding in N.L.R.B. v. Granite State Joint Board, Textile Workers Union, Local 1029, 446 F.2d 369 (1st Cir.1971), but we believe that the decision is inapposite to the present fact situation. Although the court in Granite State upheld the right of the union involved to impose fines on strikebreakers for post-resignation activity, it emphasized that a specific set of facts was present which it believed rendered such a result equitable, and it specifically recognized that these considerations were not present with respect to the instant Booster Lodge 405 case. In Granite State, the Board conceded that all of the fined employees had voted in favor of the strike in question. It is also important to note that the fines had not been imposed pursuant to a general provision in the union constitution, as here, but rather in accordance with a specific proclamation which had been unanimously adopted by the membership after the work stoppage commenced. See 446 F.2d at 370, 372 n. 5. Furthermore, all of those who were disciplined in Granite State had been expressly pre-warned of possible punishment for strikebreaking, while the employees with whom we are herein concerned received no such pre-strikebreaking notification. Because of these distinguishing facts, we refuse to apply the rationale of Granite State to the instant factual situation. The strong equities which weighed in favor of the union there, are clearly not present here. In fact, their very absence powerfully supports the result which we have accepted.
Since the International Union Constitution and By-laws contained no express restriction upon a member’s right to resign it is clear that the strikebreaker/employees were free to resign at will, subject only to their being bound by any permissible collective bargaining agreement provision limiting this right. Local Union 621, United Rubber, Cork, Linoleum and Plastic Workers of America, 167 NLRB 610 (1967); Communications Workers v. N.L.R.B., 215 F.2d 835 (2d Cir.1954); N.L.R.B. v. Mechanical and Allied Produc tion Workers, Local 444, 427 F.2d 883 (1st Cir.1970). Furthermore, since the resignations all occurred after the termination of the 1963-1965 agreement and before the execution of the new contract, the maintenance-of-membership provision was not applicable to limit this right either. N.L.R.B. v. Mechanical and Allied Production Workers, Local 444, supra, 427 F.2d at 884-885; N.L.R.B. v. Granite State Joint Board, Textile Workers Union, Local 1029, supra, 446 F.2d at 372. Under these circumstances we concur in the reasoning of the Second Circuit in Communications Workers v. N.L.R.B., supra, 215 F.2d at 838:
We agree that the proviso [to § 8(b) (1) (A)] protects the Union’s right to make its own rules with respect to membership, but assuming, arguendo, that a rule wholly prohibiting voluntary resignations would be valid, we think that in the absence of any rule on the subject of voluntary resignation, the proviso is inapplicable. Concededly the Union Constitution and by-laws are absolutely silent as to whether a member can voluntarily resign. Hence we think that the common law doctrine on withdrawal from voluntary associations is apposite. Under that doctrine, a member of a voluntary association is free to resign at will, subject of course to any financial obligations due and owing the association, [citations omitted]
For the reasons set out above, we conclude that the Labor Board correctly determined that “the Union’s right to discipline employees terminated upon the employees’ submission of their letters of resignation [, thus t]he attempted imposition of discipline for subsequent conduct was beyond the powers of the Union.” Booster Lodge No. 405, International Association of Machinists and Aerospace Workers, AFL-CIO, supra, 1970 CCH NLRB ¶ 22,259, at p. 28,692. We therefore affirm the Board’s finding that the Union violated Section 8(b) (1) (A) of the N.L.R.A. by imposing fines upon employees, and by threatening or attempting enforcement of such fines, because of those employees’ post-resignation conduct in working at the Company plant during the authorized work stoppage. Since the imposition of fines under such circumstances violated the policies underlying the N.L.R.A. and had effects outside the area of internal Union affairs, they were clearly “coercive” within the meaning of Section 8(b) (1) (A). See N.L.R.B. v. Industrial Union of Marine etc. Workers, 391 U.S. 418, 88 S.Ct. 1717, 20 L.Ed.2d 706 (1968); District 50, Local 12419, 176 NLRB No. 89, 71 LRRM 1311 (1969); Local 138, International Union of Operating Engineers, AFL-CIO, 148 NLRB 679 (1964). See also International Molders and Allied Workers, Local 125, 178 NLRB 208, 72 LRRM 1049 (1969), enfd., 442 F.2d 92 (7th Cir.1971). We thus grant enforcement of the N.L.R.B.’s cease and desist order so far as it concerns the imposition of fines for post-resignation conduct.
II
The Board’s Duty to Determine the Reasonableness of Fines
In its decision below, the N.L.R.B. relied upon a companion case, International Association of Machinists and Aerospace Workers, Local 504 [Arrow Development Co.], 185 NLRB No. 22, 75 LRRM 1008 (19 70), in concluding that a fine’s "reasonableness” has no effect upon its legality under the N.L. R.A. This conclusion was based upon the Board’s belief that Congress did not intend to empower the Labor Board with the authority to examine the severity of union discipline when ascertaining its legality, and it indicated that it thought that local courts were the most logical tribunals for the establishment of standards of reasonableness. The Board therefore refused to examine the question of reasonableness in the present case, despite an express determination by the Trial Examiner that the imposed fines were impermissibly excessive. We reject the position of the Board, and remand the case for further proceedings in conformity with the views set out below.
The Board’s belief that it does not have the obligation of examining the reasonableness of union fines in Section 8(b) (1) (A) proceedings is based upon a clear misconception of the law and the Supreme Court’s relevant decisions. In Allis-Chalmers, the Court stated:
It is no answer that the proviso to § 8(b) (1) (A) preserves to the union the power to expel the offending member. Where the union is strong and membership therefore valuable, to require expulsion of the member visits a far more severe penalty upon the member than a reasonable fine.
N.L.R.B. v. Allis-Chalmers Mfg. Co., supra, 388 U.S. at 183, 87 S.Ct. at 2008 (emphasis supplied). The Court further recognized that “the proviso preserves the rights of unions to impose fines, as a lesser penalty than expulsion...” 388 U.S. at 191-192, 87 S.Ct. at 2012 (emphasis supplied). This implicitly recognized that, for a disciplinary fine to be less coercive than expulsion from the union, the fine imposed must be a “reasonable” one, for it is intuitively obvious that enforcement of a grossly excessive fine might visit a far greater burden upon an individual than would mere expulsion. The Supreme Court also expressly recognized this fact in its recent Scofield decision, wherein it concluded that the enforcement of a proper union rule “by reasonable fines does not constitute the restraint or coercion proscribed by § 8(b) (1) (A).” Scofield v. N.L.R.B., supra, 394 U.S. at 436, 89 S.Ct. at 1161 (emphasis supplied). The Scofield Court emphasized that under Allis-Chalmers, “[a] union rule, duly adopted and not the arbitrary fiat of a union officer, forbidding the crossing of a picket line during a strike [is]... enforceable against voluntary union members by expulsion or a reasonable fine.” 394 U.S. at 428, 89 S. Ct. at 1157 (emphasis supplied). In light of the Court’s emphasis on the requ i remen t of “reasonable fines” if a union is to avoid a violation of the Act in these circumstances, we must conclude that the imposition of an unreasonably large fine, at least where the union threatens or actually attempts court enforcement of the fine, may be coercive and restraining within the meaning of section 8(b) (1) (A).
Since the imposition of an unreasonably excessive disciplinary fine is violative of Section 8(b) (1) (A), it is clearly the obligation of the N.L.R.B. to resolve the question of reasonableness where such an issue is appropriately raised. The Board asserts that such a result might cause conflicts between it and state courts which attempt to examine the reasonableness issue in actions to collect such fines. However, we do not believe that this possible problem detracts from the Board’s obligation under the N.L.R.A.
We recognize that “state courts have been adjudicating internal union disputes for more than 60 years.” Summers, The Law of Union Discipline: What the Courts Do in Fact, 70 Yale L. J. 175 (I960). We further acknowledge the fact that “the state courts, in reviewing the imposition of union discipline, find ways to strike down ‘discipline, [which] involves a severe [monetary] hardship.’ ” However, these considerations do not relieve the N.L.R. B. of its duties under the N.L.R.A. “[T]he business of the Board, among other things, is to adjudicate and remedy unfair labor practices. Its authority to do so is not ‘affected by any other means of adjustment or prevention that has been or may be established by agreement, law, or otherwise...’ § 10(a),... 29 U.S.C. § 160(a).” N.L.R.B. v. Strong, 393 U.S. 357, 360, 89 S.Ct. 541, 544, 21 L.Ed.2d 546 (1969). See Office and Professional Employees International Union, Local 425 v. N.L.R.B., 136 U.S.App.D.C. 12, 15-16, 419 F.2d 314, 317-318 (1969). Furthermore, the fact that some state courts might not permit enforcement of excessive fines in a collection action by the union, does not detract from their coerciveness, or the need for N.L.R.B. action. N.L.R. B. v. American Bakery and Confectionery Workers, Local 300, 411 F.2d 1122, 1126 (7th Cir.1969). See Local Union No. 167, Progressive Mine Workers of America v. N.L.R.B., 422 F.2d 538, 542 (7th Cir.), cert. denied, 399 U.S. 905, 90 S.Ct. 2198, 26 L.Ed.2d 560 (1970).
Other factors also support the conclusion that Board intervention is authorized in this very limited area, despite the historical activity of state courts and the reluctance of the 80th Congress to interfere in the internal affairs of unions. There is something to be said for having the reasonableness of fines determined by standards that are as nearly uniform as national standards promulgated by the N.L.R.B. can be. Furthermore, access to the Labor Board is more readily available than meaningful access to state courts. Before the Board, the employee is represented by the General Counsel, and the agency bears the expense of the litigation. If the same employee wants a complete resolution of the reasonableness issue in a state court collection action brought by the union, he must be prepared to accept at least some financial burden. “The danger that the legal rights of a disciplined member will go by default because of the cost of asserting them in court is obvious... ” Summers, The Law of Union Discipline: What the Courts Do in Fact, 70 Yale L.J. 175, 220 (1960). We therefore reject the argument that the N.L.R.B. is required to defer to state tribunals with respect to the reasonableness issue. Such “reverse preemption” would not, in our view, be consonant with the principles underlying the N.L.R.A.
Although the Board has not previously had to examine the reasonableness of union fines, it is not without experience in a related area. Under Section 8(b) (5), it is required to determine whether initiation fees required by a labor organization under a union-security agreement are excessive. The fact that Section 8(b) (1) (A) does not provide the Board with specific standards to be applied in determining the reasonableness of a union fine, while Section 8(b) (5) does include several express standards, does not detract from the N.L.R.B.’s authority under 8(b) (1) (A). See N.L.R.B. v. Radio and Television Broadcast Engineers Union, 364 U. S. 573, 582-583, 81 S.Ct. 330, 5 L.Ed.2d 302 (1961). “Experience and common sense will supply the grounds for the performance of this job,” which we have concluded was implicitly entrusted by Congress to the Board. 364 U.S. at 583, 81 S.Ct. at 336.
The Board must remember that a fine imposed for the violation of a legitimate union rule should be viewed as presumptively protective, and therefore privileged, when the amount of the fine, taking into account the character and importance of the ends served by the rule being enforced, is reasonably related to the need for protection. On the other hand, if the amount of the fine is such as to be inordinately disproportionate to the needed protection, an inference is warranted that the fine was imposed upon the member, not in vindication of a legitimate union interest, but rather as a reprisal for his having exercised a statutorily protected right. In the latter situation, as we have previously indicated, the fine would be “coercive” within the meaning of Section 8(b) (1) (A) of the Act. In determining whether an imposed fine is privileged or prohibited, due to its size, many factors may properly be considered by the Board. We shall mention several obvious factors which might be considered on remand, along with others the Board may consider to be applicable.
The reasonableness of a fine would necessarily have to be determined in light of the circumstances- leading to its imposition. Such factors as the compensation received by the strikebreakers, the level of strike benefits made available to the striking employees, the individual needs of the persons being disciplined, the detrimental effect of the strikebreaking upon the effectiveness of the strike effort, the length of time of the work stoppage, the strength of the particular union involved, the availability of other less harsh union remedies, and many other similar considerations would clearly be relevant.
One additional consideration is worthy of mention. In its original Scofield decision, 145 NLRB 1097, 1104 (1964), the Board expressly indicated that a union had no right to impose any penalty which would “impair the member’s status as an employee.” This prohibition against union disciplinary action adversely affecting an employee’s employment status has been approved by the Supreme Court. See N.L.R.B. v. Allis-Chalmers Mfg. Co., supra, 388 U.S. at 195, 87 S.Ct. 2001; Scofield v. N.L.R.B., supra, 394 U.S. at 423, 428, 89 S.Ct. 1154. While this principle clearly prohibits a union from seeking the suspension or termination of an employee by his employer due to his strikebreaking, its implications may have further application which might be relevant to the present case. Where a disciplinary fine is unreasonably excessive, it may possibly affect the employee’s employment status as adversely — and possibly even more adversely — as an illegally obtained employment suspension. On remand, the Board might also consider this protective policy of the Act in determining the reasonableness of the fines in question under Section 8(b) (1) (A).
III
Labor Board Remedy Although we are remanding this case to the N.L.R.B. for further consideration of the reasonableness question, it is apparent that the other aspects of the Board’s decision below should be immediately affirmed. As was noted earlier in this opinion, the cease and desist order prohibiting further Union action pertaining to post-resignation strikebreaking conduct is granted enforcement. A more difficult question arises with respect to the affirmative aspects of the Board’s decision.
“In § 10(c) of the Act Congress has given the Board broad power to fashion remedies to effectuate the policies of the Labor Act. So long as the Board exercises responsibility in its judgment, courts should not interfere with its remedy, since this is ‘peculiarly a matter for administrative competence.’ Phelps-Dodge Corp. v. NLRB, 313 U.S. 177, at 194, [61 S.Ct. 845, at 852, 85 L.Ed. 1271]... (1941).” “The Board’s power to fashion remedies places a premium upon agency expertise and experience, and the broad discretion involved is for the agency and not the court to exercise.” Amalgamated Clothing Workers of America v. N.L.R.B., 125 U.S.App.D.C. 275, 281, 371 F.2d 740, 746 (1966).
With these considerations in mind, we clearly must affirm that part of the Board’s order which requires the Union to reimburse the approximately 35 employees who apologized and pledged loyalty, thereby obtaining a reduction in their respective penalties, for any amounts paid which were based upon post-resignation strikebreaking earnings. We similarly affirm that portion of the order requiring the total reimbursement of any fines paid by employees who effectively resigned before engaging in any strikebreaking activity.
With respect to the Board’s order as it relates to the remaining employees who resigned, the Board established a reimbursement formula which pro rated each employee’s respective fine, thereby limiting the collectable portion to that part which reflects the amount Of pre-resignation conduct. It obviously believed that this was the most reasonable manner in which to rectify
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
ORDER
This order is before the Court upon a petition of The Ohio Masonic Home to review an order of the National Labor Relations Board and upon the cross-petition of the Board to enforce the order. The decision and order of the Board are reported at 205 NLRB No. 65.
Being fully advised in the premises, the Court concludes that the findings of fact of the Board are supported by substantial evidence on the record considered as a whole, and therefore,
It is ordered that the order of the National Labor Relations Board be and it hereby is enforced.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KERNER, Circuit Judge.
These appeals involve an order, known as Order No. 41, issued by the Secretary of Agriculture pursuant to the authority conferred upon him by the Agricultural Marketing Agreement Act of 1937, 7 U.S.C.A. § 601 et seq. The United States brought the action under Sec. 608a(6) of the Act to enforce specifically the provisions of Order No. 41 and “to prevent and restrain” the defendant, Wrightwood Dairy Co., from handling milk in violation of the provisions of the Order. The trial court dismissed the complaint and in accordance with the prayer of defendant’s counterclaim directed the issuance of a permanent injunction restraining the Government, its officers, and agents from enforcing Order No. 41 against the defendant. No. 7619 is an appeal by the United States from the dismissal of the complaint and the granting of the defendant’s prayer for relief. No. 7620 is defendant’s cross-appeal from certain rulings of the trial court.
The purpose of Order No. 41 was to regulate the handling of milk in the Chicago, Illinois marketing area to the extent that the milk covered was in the current of interstate commerce or directly burdening, obstructing, or affecting such commerce. The mechanics of this type of regulation are so fully discussed in United States v. Rock Royal Co-Operative, Inc., 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446, that it would be bootless to restate them. It is sufficient to say that the plaintiff considered the defendant subject to the regulations of the Order because its handling of the milk was deemed to be in the current of interstate commerce as defined in —or directly burdened, obstructed, or affected interstate commerce in milk marketed within the area and the defendant therefore was a handler of milk as defined in § 8c (1) of the Act.
It is undisputed, in fact it is conceded that the defendant purchased its total daily milk requirements from approximately 70 producers located entirely within the State of Illinois. It processed the milk in its Chicago plant, never intermingled it with any milk which had crossed the state line, and sold and distributed the processed product solely within the State of Illinois in competition with the milk of other handlers in the marketing area which Order No. 41 sought to embrace. Over 60% of the milk handled in the Chicago Marketing' area was produced in the State of Illinois; the remaining milk handled in the area was produced in Wisconsin, Indiana, and Michigan.
The trial court found that the defendant’s activities were intrastate, its handling of milk was,not in the current of interstate and foreign commerce and “did not directly burden, obstruct, or affect interstate or foreign commerce in milk market with the Chicago marketing area.” The court held that the defendant was not a handler of milk as defined in § 8c(l) of the Agricultural Marketing Agreement Act of 1937, and consequently was not subject to the provisions of Order No. 41.
The basic question before this court is whether the defendant was subject to the regulations of Order No. 41 as a handler of milk under § 8c(l) of the Act. It is plaintiff’s contention that a mere showing of competition by the milk distributor with other handlers operating in a market under the regulation of an order such as No. 41 is sufficient to subject the distributor to the regulations even though its operations are wholly intrastate.
Counsel for plaintiff relies upon United States v. Rock Royal Co-Operative, supra. We are not convinced that that case sustains his position. The Supreme Court did not have before it the issue of the applicability of an order to a distributor whose activities were wholly intrastate. In that case the court said (307 U.S. at page 541, 59 S.Ct. at page 998, 83 L.Ed. 1446) : “The state order was eliminated from consideration on the understanding, not questioned here, that the milk of all four defendants is covered by the Federal Order, if valid.” Further on in the opinion the court said (307 U.S. at page '568, 59 S.Ct. at page 1010, 83 L.Ed. 1446): “There is no challenge to the fact that the milk of all four defendants reaches the marketing area through the channels' of interstate commerce.” It is true that Mr. Justice Reed then said: “Nor is any question raised as to the power of the Congress to regulate the distribution in the area of the wholly intrastate milk.” From this we believe the Supreme Court did not intend to preclude this important question, now before us, which was not an. issue in the case before it.
The case of United States v. Adler’s Creamery, Inc., 2 Cir., 107 F.2d 987, and Id., 2 Cir., 110 F.2d 482, did involve a handler of wholly intrastate milk in the New York Metropolitan marketing area. There the court held that the handler was subject to the provisions of the Order. The court relied upon the Rock Royal case, supra; Currin v. Wallace, 306 U.S. 1, 59 S.Ct. 379, 83 L.Ed. 441, and Mulford v. Smith, 307 U.S. 38, 59 S.Ct. 648, 652, 83 L.Ed. 1092. In so far as the court relied upon the .inapposite remark made in the Rock Royal case, we do not accept it as persuasive authority for plaintiff’s contention.
Currin v. Wallace, supra, and Mulford v. Smith, supra, certainly do not support the plaintiff’s contention when applied to the defendant’s activity in the case before this court. Currin v. Wallace merely held that Congress could regulate the auction sale of tobacco since almost all of the tobacco there sold was to go into interstate commerce. In Mulford v. Smith the record disclosed that at least two-thirds of all flue-cured tobacco sold at auction warehouses was sold for immediate shipment to an interstate or, foreign destination. The court held that the regulation was “of interstate commerce, which it reaches and affects at the throat where tobacco enters the stream of commerce — the marketing warehouse.” In the instant case, in no such degree was the handling of milk by the defendant associated with interstate commerce.
An examination of the interpretation of the comparable commerce provisions of the National Labor Relations Act likewise fails to show implicit recognition of the broad sweep of authority claimed by the plaintiff in applying Order No. 41.
A study of the various cases construing the commerce clause reveals nothing to support the plaintiff’s contention that a finding of competition with interstate handlers was sufficient to subject the defendant, in our case to the Act. It is true that cases such as Reid v. Colorado, 187 U.S. 137, 23 S.Ct. 92, 47 L.Ed. 108; Hipolite Egg Co. v. United States, 220 U.S. 45, 31 S.Ct. 364, 55 L.Ed. 364; United States v. Hill, 248 U.S. 420, 39 S.Ct. 143, 63 L.Ed. 337; and United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609, 132 A.L.R. 1430, prohibit certain movements into interstate commerce, but clearly the milk handled by the defendant was neither in interstate commerce nor ever intended to flow in it. And while Loewe v. Lawlor, 208 U.S. 274, 28 S.Ct. 301, 52 L.Ed. 488, 13 Ann.Cas. 815; Duplex Printing Press Co. v. Deering, 254 U.S. 443, 41 S.Ct. 172, 65 L.Ed. 349, 16 A.L.R. 196; and Bedford Cut Stone Co. v. Journeymen Stone Cutters’ Ass’n, 274 U.S. 37, 47 S.Ct. 522, 71 L.Ed. 916, 54 A.L.R. 791, sanction action under the commerce clause when there is interference with interstate commerce before the actual movement has started, the milk handled by the defendant in our case was never going to get into interstate commerce and impinged upon it only by competing with some milk which had been in interstate commerce. It is also true that the Shreveport Case, 234 U.S. 342, 34 S.Ct. 833, 58 L.Ed. 1341; Railroad Commission of Wisconsin v. Chicago, B. & Q. R. Co., 257 U.S. 563, 42 S.Ct. 232, 66 L.Ed. 371, 22 A.L.R. 1006; Currin v. Wallace, supra, and Mulford v. Smith, supra, permit the regulation of intrastate transactions which are closely commingled with or related to the interstate commerce regulated. However, these cases do not extend to the facts before us.
The difference between a direct and indirect effect on commerce is not hard and fast; it is at best a matter of degree. The determination of degree and the resulting allocation of power over commerce rest upon the court, but that determination must ever be within the matrix of the federal system.
In Schechter Poultry Corp. v. United States, 295 U.S. 495, 520, 548, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947, the unreversed findings of the Circuit Court of Appeals, 2 Cir., 76 F.2d 617, 618, were that 96% of the chickens involved under the particular code came from interstate commerce to be disposed of in New York; that the practice sought to be regulated not only demoralized the business in New York, but had national repercussions affecting and controlling the prices received by those engaged in interstate commerce. Under such circumstances the court held that the effect upon interstate commerce was only an indirect one and not sufficient to permit Congressional regulation. The effect upon commerce in the case now before us is no more direct than in the Schechter case. The only substantial difference is that in the present case none of the defendant’s milk was ever in interstate commerce. The milk’s only possible relation to interstate commerce was with some thirty odd percent of the milk in the area which had been brought into the state, processed, and then sold in competition with defendant’s.
To be sure the milk problem is a serious one and apparently for the most effective control requires unified regulations. Cf. Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469, and Till, “Milk — The Politics of an Industry” at p. 431 of “Price and Price Policies.” Unfortunately, if the defendant is not subject to the regulations of Order No. 41, the result may well be that the effective sanction of the order will wither before the force of competition, the morale of the market will disintegrate, and this attempt at solution of the problem by the National Government will fail. When a problem of our present day economy requires unified action there sometime is an hiatus in the powers granted to the United States and those not prohibited to the states so that no solution will be possible without the cooperation of states and nation. That hiatus is implicit in a federal system of government. If the powers of the National Government were complete and the states were only administrative agencies whose powers existed solely at the sufferance of the National Government, this difficulty, at least, would cease to exist.
On principle, we are unable to accept plaintiff’s contention that “only one factual element is essential to subject a milk distributor whose operations are wholly intrastate in character” to the Order, and that is a showing “that such handler competes with other handlers operating in the market who are subject to the regulation.” To do so would be to subscribe to a view of causation which, as Justice Cardozo said in the Schechter case, supra, 295 U.S. at page 554, 55 S.Ct. at page 855, 79 L.Ed. 1570, 97 A.L.R. 947, “would obliterate the distinction between what is national and what is local in the activities of commerce.”
We conclude that a commodity wholly intrastate in character and handling does not directly burden, obstruct, or affect interstate commerce where the point of impingement of the intrastate transaction upon the interstate transaction is one of competition only.
We now come to a consideration of defendant’s cross-appeal by which it is claimed that the District Court failed to find that Order 41 was not in compliance with the law, that it was invalid and unenforceable and that the court erred in sustaining plaintiff’s motion to strike defendant’s fourth to eleventh defenses. In view of what we have earlier said in this opinion, we do not deem it necessary to discuss the errors assigned. The cross-appeal in No. 7620 will be dismissed. The judgment of the District Court in No. 7619 will be affirmed.
(j) “The term ‘interstate or foreign commerce’ means commerce between any State, Territory, or possession, or the District of Columbia, and any place outside thereof; or between points within the same State, Territory, or possession, or the District of Columbia, but through any place outside thereof; or within any Territory or possession, or the District of Columbia. For the purpose of this Act [chai ter] (but in nowise limiting the foregoing definition) a marketing transaction in respect to an agricultural commodity or the product thereof shall be considered in interstate or foreign commerce if such commodity or product is part of that current of interstate or foreign commerce usual in the handling of the commodity or product whereby they, or either of them, are sent from one State to end their transit, after purchase, in another, including all cases where purchase or sale is either for shipment to another State or for the processing within the State and the shipment outside the State of the products so processed. Agricultural commodities or products thereof normally in such current of interstate or foreign commerce shall not be considered out of such current through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of this Act [chapter]. As used herein, the word ‘State’ includes Territory, the District of Columbia, x>ossession of the United States, and foreign nations.”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
In this diversity litigation the plaintiff sued to recover damages resulting from injuries to her person and property suffered in an automobile collision in Des Moines, Iowa. She has appealed from the final judgment against her entered on July 8, 1970. Defendant filed a cross-appeal from the denial of several of its motions.
At the first trial a verdict and judgment were rendered in favor of the plaintiff for $27,500 with interest as provided by law plus her costs. Thereupon the defendant filed a motion for judgment notwithstanding the verdict and motion for a new trial. The trial court denied the motion for a judgment n. o. v. but granted the motion for a new trial on the grounds that to allow the verdict to stand would constitute an injustice to the defendant and would represent a gross miscarriage of justice; that the evidence did not warrant the verdict rendered; and that the jury did not follow the court’s instructions.
The second trial resulted in a verdict and judgment for the defendant. The plaintiff contends on this appeal that the trial court abused its discretion in setting aside the verdict of the jury in her favor and granting a new trial.
The law is well established that the granting of a new trial is a matter within the sound discretion of the trial judge and unless that discretion patently has been abused, his ruling on the motion is not subject to review. Bates v. Hensley, 414 F.2d 1006 (8th Cir. 1969); Trice v. Commercial Union Assurance Co., 334 F.2d 673 (6th Cir. 1964); Minnesota Mut. Life Ins. Co. v. Wright, 312 F.2d 655 (8th Cir. 1963); Paine v. St. Paul Union Stockyards Co., 28 F.2d 463 (8th Cir. 1928).
We have carefully canvassed the record and are fully convinced that there is no rational basis for holding that the trial court acted arbitrarily or abused its discretion in granting a new trial.
In view of the disposition of plaintiff’s appeal, it is unnecessary to discuss the cross-appeal.
The judgment is affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
COFFIN, Senior Circuit Judge.
The National Labor Relations Board (NLRB) found that LaVerdiere’s Enterprises improperly withdrew recognition from the union that had been representing its warehouse employees for nine years and, among other remedies, ordered that the Company resume bargaining with the union. The Board applied to this court for enforcement of its order, and LaVerdiere’s cross-petitioned for review of the order. Although we uphold the Board’s determination that LaVerdiere’s violated federal labor law, we conclude that the remedy of a bargaining order is inappropriate in this case.
I. Factual Background
Teamsters Union Local 340 (“the Union”) was certified to represent LaVerdiere’s warehouse employees in 1976, and it subsequently entered into a series of collective-bargaining agreements with the Company, the last of which was scheduled to expire on April 30, 1985. The record indicates that the history of relationships between the Company and the Teamsters was uneventful, with no evidence of Company interference with the Union.
In February 1985, two employees, Francis Richards and Marie Grandmaison, began to circulate a decertification petition. They collected 20 signatures by February 28, which they erroneously believed were enough to meet the necessary 30 percent showing of interest for an election. The unit, however, contained 70 employees— rather than the 59 the employees had thought — and on March 18 the NLRB gave the employees 72 hours to collect additional signatures. Although only one more name was necessary to reach 30 percent, 13 employees signed the petition within the next two days; seven more employees signed by April 5, bringing the total on various petition sheets to 40.
The record indicates that LaVerdiere’s played no role in initiating the petition drive. Several incidents occurred during the campaign, however, that involved management. First, on February 28, one of the two petition organizers, Grandmai-son, asked the Company’s vice president, Michael LaVerdiere, to meet with two employees who had questions about the decer-tification petition. In his conversation with the two employees, LaVerdiere stated:
As far as I know, [the petition] is just for a revote. You can sign this petition now, there will be an election in two or three weeks. At that point you can decide to vote for or against the union — change your mind. I’m not trying to sway you. It’s totally up to you.
Both employees signed the petition that same day. A similar discussion took place, apparently also on February 28, with a third employee, Daniel York. When asked whether the Union could have York fired for signing the petition, LaVerdiere said it could not, and that “like I said to everybody else — it was for a revote.” York originally had signed the petition but removed his name before speaking with LaVerdiere.
The second incident began on March 11, when five employees completing their 60-day probationary periods asked a LaVerdi-ere’s vice president, Robert Bishop, whether they were required to pay the Union’s $50 initiation fee. Although Bishop had told the employees when they were hired in January that, under the union security provision in the collective bargaining agreement, they would be required to join the Union and pay its fees at the end of their probation, he answered at this time that he would check on the requirement. He contacted LaVerdiere’s lawyer, who prepared a statement for Bishop to read to the employees as an interim response. Bishop read the following statement on March 13.
When you were hired I advised you that this Union contract requires you to join and our practice has been to reduce your hours to 30 hours per week. Our legal counsel questions this practice, so until we get clarification, sit tight.
If you choose not to join the Union by not signing the check-off card and not paying the $50.00 enrollment fee, we will not terminate your employment. We will advise you once we get clarification from our legal counsel. Don’t worry about being fired because the Union can’t do it and must give you notice about your legal obligations.
One week later, Bishop read another statement prepared by counsel advising the five employees that they were, in fact, required to pay dues and the initiation fee, but were not required to join the Union or make payment by checkoff. The statement also noted that the contract was scheduled to expire on April 30, and that employees need not continue paying dues after that date unless the agreement was renewed. Bishop concluded by advising the employees to take no action “until such time that you receive proper notification from the Union office.”
Meanwhile, as employee uncertainty about the union was surfacing, the Teamsters and LaVerdiere’s were communicating about negotiations for a new contract. On March 7, in response to a Union inquiry, LaVerdiere’s proposed deferring the talks until there was some indication of the outcome of the employees’ decertification petition. The Union rejected such a delay, and urged a quick start to negotiations. The Company responded on March 13 with a number of possible meeting dates, beginning on April 10.
At this point, however, additional events occurred that reflected anti-union sentiment. On April 3, the Union notified LaV-erdiere’s that approximately 12 employees had refused to pay initiation fees. On April 9, LaVerdiere’s received a letter from attorney David Butler, who represented the employees seeking decertification. Butler stated that Local 340 no longer was supported by a majority of employees, and he therefore requested that the Company refrain from entering bargaining negotiations with the Union. Enclosed with his letter were a typewritten list of 70 names titled “Employees List,” another typewritten list of 37 names titled “Anti-Union List,” and the petition sheets for which 40 signatures had been solicited earlier. The petitions contained the names of all five probationary employees to whom Bishop had spoken about the initiation fee, as well as the names of the two employees to whom Michael LaVerdiere had stated, upon request by Grandmaison, that the petitions were simply to trigger an election. Butler’s “Anti-Union List” contained all of these names with the exception of one of the five probationary employees.
The Company’s legal counsel notified the Union about Butler’s letter that same day, and on April 10, he sent a letter stating that LaVerdiere’s had a “good faith doubt” that a majority of the bargaining unit continued to support the Union. The lawyer, Robert Lewis, further told the Union that he had filed a petition for an election with the NLRB and he proposed that negotiations for a new contract be deferred. The letter stated, however, that the Company would continue to recognize the right of Local 340 to administer the existing bargaining agreement for the remainder of its term.
From this point on, the relationship between the Company and Union was entirely adversarial. No negotiation sessions ever were held. The Teamsters filed a series of unfair labor practice charges against LaV-erdiere’s, accusing the Company, inter alia, of interfering with the union security clause and improperly withdrawing recognition as of April 9, the day Lewis told the Union of the employees’ request that the Company refrain from bargaining. On May 10, the Teamsters sent the Company a document, dated May 2, that contained the names of 50 employees who ostensibly supported the union and that called for the firing of attorney Lewis and bargaining with the Teamsters. Lewis drafted a letter in response suggesting that the signatures were coerced. He repeated LaVerdiere’s doubts about the union’s majority status and the Company’s desire for an NLRB-conducted election. Because the filing of unfair labor charges normally blocks any election until the charges are resolved by the Board, however, an election never was held.
On May 27, the NLRB informed Lewis by telephone that it was dismissing the Teamster’s charge complaining of unlawful withdrawal of recognition. Lewis immediately called Michael LaVerdiere to tell him that it would be legal to withdraw recognition, and the Company formally did so on that day. The Company subsequently rejected a Union demand for bargaining and refused to allow a Union business representative to enter its facility to investigate grievances, both on the ground that it no longer recognized the Union as its employees’ representative.
Nearly ten months later, on March 17, 1986, without explanation, the NLRB’s regional director informed the parties that he was revoking his earlier refusal to issue a complaint on the Union’s charge of unlawful withdrawal of recognition. Shortly thereafter, the Board’s general counsel issued an order consolidating all pending charges against LaVerdiere’s, and a two-day evidentiary hearing took place on June 23 and 24, 1986. The Administrative Law Judge (AU), whose opinion issued on October 31, 1986, found that LaVerdiere’s had committed four related violations of the National Labor Relations Act (NLRA):
(1) Michael LaVerdiere’s statement to three employees that the petitions were just for a “revote” violated § 8(a)(1) of the Act by misleading them concerning the effect of their signatures on the petition. According to the AU, the statement was deceptively incomplete because LaVerdiere failed to explain that the signatures also could be used as a basis for a good-faith doubt of continued majority status, thereby allowing the Company to withdraw recognition without an election.
(2) Bishop’s statements to the five probationary employees regarding the mandatory initiation fee and related matters violated § 8(a)(1) by interfering with the Union’s enforcement of its security clause.
(3) These statements tainted the decerti-fication petitions, precluding reliance on them as a basis for a “good faith doubt” of majority status, making withdrawal of recognition improper under § 8(a)(5).
(4) Finally, because withdrawal of recognition was improper, refusal to permit Union representatives access to Company facilities also violated § 8(a)(5).
The AU entered an order requiring that LaVerdiere’s cease and desist its violations, post certain notices and, upon request, bargain with the Teamsters. LaVerdiere’s appealed. In a brief opinion issued on February 28, 1990 — nearly three-and-one-half years after the AU’s decision — the Board largely adopted the AU’s findings and conclusions. It found, however, that the “re-vote statement” did not constitute a violation of § 8(a)(1) because it contained “no threat to interfere with the employees’ rights nor promises of benefits and, therefore, is not coercive within the meaning of the Act.” Opinion at 3. Because the Board found that LaVerdiere’s statements were nevertheless misleading, it upheld the AU’s determination that- the Company could not rely on the petitions as a basis for a good-faith doubt of majority status. LaVerdiere’s filed an unsuccessful motion for reconsideration, and both parties then sought review in this court.
The primary issue before us is whether LaVerdiere’s should be compelled to bargain with the Teamsters. LaVerdiere’s claims that the bargaining order is entirely unsupportable because the Company developed a reasonable good faith doubt that the Union had lost majority status, permitting it to withdraw recognition and thus end its relationship with Local 340. Alternatively, LaVerdiere’s contends that, even if we uphold the Board’s finding that it lacked a sufficient basis for withdrawing recognition, the circumstances of this case are such that an election, rather than a bargaining order, is the appropriate remedy. In sorting out LaVerdiere’s contentions, we shall address three questions: (1) did the Board properly find that Bishop’s comments concerning the mandatory initiation fee — the “security statement” — constituted an unfair labor practice, precluding the Company from relying on the petition signatures of the probationary employees; (2) does the evidence, even excluding any “tainted” petition signatures, support a reasonable good faith doubt that the Union had lost majority status, and (3) even if the Board properly found that the Company lacked a good faith doubt, should it have ordered an election rather than impose a bargaining order on the Company.
II. Discussion
A. Standard of review
The law requires us to review the Board’s order with considerable deference. As to matters of fact, the Board’s findings must be upheld if supported by substantial evidence on the record as a whole. See 29 U.S.C. § 160(e); NLRB v. Horizon Air Services, Inc., 761 F.2d 22, 25 (1st Cir. 1985); Soule Glass and Glazing Co. v. NLRB, 652 F.2d 1055, 1073 (1st Cir.1981). We must sustain inferences that the Board draws from the facts and its application of statutory standards to those facts and inferences as long as they are reasonable. Soule Glass, 652 F.2d at 1073. We may not substitute our judgment for the Board’s when the choice is “ ‘between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo,’ ” id. (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951)). And we must defer to the Board’s inferences in its areas of specialized experience and expertise. Id.
The deference to which the Board is entitled is not, however, unlimited. The courts of appeals are charged with “responsibility for the reasonableness and fairness of Labor Board decisions,” Universal Camera, 340 U.S. at 490, 71 S.Ct. at 466, and a court must set aside Board action when it “ ‘cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light the record in its entirety furnishes, including the body of evidence opposed to the Board’s view,’ ” id. at 488, 71 S.Ct. at 465, quoted in Soule Glass, 652 F.2d at 1073.
With these principles in mind, we turn to our review of the Board’s order.
B. The “Security Statement”
The Board adopted without discussion the ALJ’s determination that Bishop’s communications with the probationary employees about their obligation to pay Union fees violated § 8(a)(1) of the NLRA. In the ALJ’s view, Bishop’s statements were designed “to convince the employees not to join the Union” and had the effect of encouraging them to sign the decertification petitions. He therefore found that the signatures of the five probationary employees were tainted, precluding reliance upon them as objective evidence of the Union’s loss of majority support.
We have minimal difficulty in upholding the finding that Bishop’s conduct violated § 8(a)(1) by interfering with the operation of the union security clause. As the AU noted, “when the employees asked Bishop whether they had to pay initiation fees, the appropriate answer was ‘Yes.’ That is what the contract, still in effect, required.” AU Opinion at 7. Bishop was aware of the contract requirement, and, indeed, had informed the employees when they were hired of the obligation to pay the fee. Although his decision to check with counsel in March may have reflected simply a naive hope that the decertification drive had weakened the enforceability of the contract, we cannot dismiss as unreasonable the AU’s inference that Bishop was attempting to discourage Union support. In any event, no matter what the motivation, substantial evidence clearly supported the finding that Bishop interfered with enforcement of the security clause.
A closer call, however, is whether Bishop’s conduct tainted the petition signatures of the five employees. Several factors weigh against a finding of taint. First, the employees initiated the contact with Bishop by asking whether they were required to pay the fees, demonstrating a pre-existing disaffection with the Union. Second, Bishop’s comments about the fees requirement were largely factual and did not mislead the employees into thinking they could avoid the obligation by not joining the Union. He initially told them only to hold off paying until he found out the extent of their obligation, and later explicitly told them when and how they were required to pay. We see no impropriety in his telling them, in response to their inquiry, that the obligation would expire at the end of April, unless the contract were renewed. It was part of a complete answer to the question asked, particularly in the context of an ongoing decertification drive. See Texaco, Inc. v. NLRB, 722 F.2d 1226, 1231, 1234 (5th Cir.1984) (employer may furnish information upon request when employees ask about revoking dues checkoff or resigning from union); Landmark International Trucks, Inc. v. NLRB, 699 F.2d 815, 820-21 (6th Cir.1983) (in response to inquiry, employer lawfully sent letters to employees explaining how to resign from union). Even if this information influenced the employees’ decisions to sign the petitions, their action resulted from their own investigation and not from Bishop’s intervention.
Third, we see no basis for the inference of coercive impact apparently drawn by the AU from the timing of the five employees’ signatures on the decertification petitions. See Opinion at 12. Three signed on March 19, after Bishop had read the first statement advising the employees to “sit tight” until the Company’s legal counsel determined their obligations. The other two employees signed on March 20, the day Bishop explained their duty to pay fees. But it was on March 18 that the decertification proponents were given 72 hours to collect additional signatures. Thus, in light of the simultaneous effort to obtain more signatures on the decertification petitions, there is little basis for inferring that the five employees’ signatures were coerced by Bishop’s statements.
Despite these factors undercutting the AU’s finding of taint, we feel constrained to uphold his conclusion based on one portion of the March 13 conversation. The opening of the prepared statement that Bishop read on that day linked, albeit loosely, the Company’s practice of reducing post-probationary employee hours with the union security clause. The AU concluded that an employee listening to this statement could have interpreted Bishop’s message to be, “if there were no union, your hours would not be reduced.” See AU Opinion at 8. Whether or not we would draw such an inference, we do not consider it unreasonable for the AU to have done so. See NLRB v. Amber Delivery Service, Inc., 651 F.2d 57, 67 (1st Cir.1981) (“[E]ven a single oblique remark can be considered unduly coercive in appropriate circumstances.”). The employees had not questioned the Company’s practice of reducing hours, and there was no apparent connection between that practice and the fee obligation about which they did ask. We therefore must uphold the AU’s finding that this statement was improper and may have influenced the employees’ attitude toward the decertification drive, tainting their petition signatures.
C. Withdrawal of recognition based on “good faith doubt”
A union that is certified by the NLRB as the exclusive bargaining agent for a unit of employees enjoys an irrebuttable presumption of majority support for one year. NLRB v. Curtin Matheson Scientific, Inc., — U.S. -, 110 S.Ct. 1542, 1544, 108 L.Ed.2d 801 (1990). The presumption continues after the first year, but becomes rebuttable. Id. 110 S.Ct. at 1545. To overcome this presumption, an employer must show that, at the time of the refusal to bargain, either (1) the union in fact no longer enjoyed majority support, or (2) the employer had a reasonable “good faith” doubt, based on objective considerations, of the union’s majority support. Id.; Bolton-Emerson, Inc. v. NLRB, 899 F.2d 104, 106 (1st Cir.1990).
The parties in this case have stipulated that the relevant bargaining unit contains 70 employees, and LaVerdiere’s therefore must present support for its asserted belief that at least 35 members opposed the Union on May 27, 1985, the day the Company formally withdrew recognition. LaVerdiere’s relies on a number of factors, the most significant of which are the employees’ decertification petitions and the Anti-Union list compiled by the employees’ attorney, the former containing 40 names and the latter 37. Our decision upholding the AU’s finding of taint from the security statement, however, requires us to disregard the signatures of the five probationary employees. Similarly, we see no basis on which to disturb the Board’s finding that the Company may not rely on the signatures of the two employees to whom Michael LaVerdiere described the petition as “just for a revote.” Favoring a new representation election does not necessarily reflect union opposition, and those two employees were told that that was the only purpose of the petition drive.
Making the appropriate reductions, leaves 33 names on the petition and 31 on the attorney’s list — neither of which is sufficient on its own to indicate a lack of majority support for Local 340. LaVerdiere’s, however, argues that numerous other factors, taken together with the petitions and attorney list, combined to create an adequate objective basis for a good faith doubt of majority support. See Bolton-Emerson, 899 F.2d at 106 (combination of factors may be basis for good faith doubt). The Company points to the following evidence:
—substantial turnover had occurred since the Union had been certified and the trend was that newer employees did not support the Teamsters;
—the Teamsters were adamantly resisting an election, suggesting that they doubted their strength;
—five employees told the Company directly that they did not want to pay their initiation fees;
—the Teamsters had informed the Company that twelve employees had not paid initiation fees;
—even discounting the presumedly tainted signatures, a substantial number of employees had signed the decertification petitions.
In addition, a factor of some significance emphasized by LaVerdiere’s is that the NLRB regional director informed the Company that the Teamsters’ withdrawal of recognition charge, filed in April, was being rejected because the Company had a sufficient basis for a good faith doubt of continued Union support. At that point, the Company argues, it could have committed an unfair labor practice had it not withdrawn recognition. See International Ladies’ Garment Workers’ Union v. NLRB, 366 U.S. 731, 732-33, 81 S.Ct. 1603, 1604-05, 6 L.Ed.2d 762 (1961) (recognizing union supported by minority of employees is an unfair labor practice).
We have sympathy for LaVerdiere’s position. The record makes it clear that substantial employee opposition to the Union existed, and the Company’s burden is to demonstrate only a doubt, not actual loss, of majority Union support. The employees initiated the decertification drive as well as both conversations that were deemed to taint petition signatures. Nevertheless, to rebut the presumption of continued majority support, the Company must come forward with objective evidence not only of substantial opposition to the Union but of at least 50 percent opposition. It failed to do so.
In fact, even had we not discounted the seven signatures found tainted by the Board, we in all likelihood still would have been required to uphold the finding of an improper withdrawal of recognition. The Regional Director’s conclusion that LaVer-diere’s in April had sufficient support for a good faith doubt of majority status does not necessarily guide the appropriate outcome for that issue at the end of May. In the interim, the Company received from the Union’s business agent a counter-petition signed by 50 employees at a May 2 meeting. The petition affirmed the employees’ desire for continued representation by Local 340 and demanded good-faith bargaining with the Union. Whatever the circumstances surrounding the signing of this petition, it at least should have caused LaV-erdiere’s to move cautiously before withdrawing recognition. There is, however, no evidence of any effort undertaken by the Company to unravel the conflicting messages it had received from its employees in order to determine the extent of true opposition to the Union.
It may be that LaVerdiere’s did not wish to investigate because the less it discovered to undercut the Regional Director’s conclusion, the more appropriate it would seem to withdraw recognition. And frustrated by its inability to obtain an election, LaVerdi-ere’s undoubtedly felt that the only chance for a speedy resolution of the matter would be for it to take such a step. While the desire to put the matter to rest is understandable, the Company took a risk when it withdrew recognition in the midst of mixed signals. In contrast, because of the contradictory petitions, we have no doubt that, had LaVerdiere’s not withdrawn recognition at this point, it would not have faced a significant risk of an unfair labor charge based on recognition of a union that lacked majority support.
We therefore uphold the Board’s finding that LaVerdiere’s lacked an objectively based good faith doubt of majority union support when it withdrew recognition and that, in doing so, it violated § 8(a)(5) of the NLRA.
D. Election or Bargaining Order
It is a well-established principle that the Board’s choice of remedy for a violation of the NLRA must be given “special respect.” NLRB v. Gissel Packing Co., 395 U.S. 575, 612 n. 32, 89 S.Ct. 1918, 1939 n. 32 (1969); Amber Delivery Service, 651 F.2d at 70.
Nevertheless, this court is a reviewing court and does not function simply as the Board’s enforcement arm. It is our responsibility to examine carefully both the Board’s findings and its reasoning, to assure that the Board has considered the factors which are relevant to its choice of remedy, selected a course which is remedial rather than punitive, and chosen a remedy which can fairly be said to effectuate the purposes of the Act.
Peoples Gas System, Inc. v. NLRB, 629 F.2d 35, 42 (D.C.Cir.1980).
Neither the AU nor the Board discussed the alternative of ordering an election in this case, and therefore did not articulate why they believed a bargaining order was the appropriate remedy. See Peoples Gas, 629 F.2d at 46 and n. 22 (discussing the Board’s “perfunctory conclusions” to impose bargaining orders). Although we understand the logic of ordering the parties back to the positions in which they stood before the Company unlawfully withdrew recognition from the Union, we are unpersuaded that that remedy is, in these circumstances, the one “best suited to the purposes of the Act, which include both deterrence of employer misconduct and protection of employee free choice,” Peoples Gas, 629 F.2d at 46 n. 18.
We reach this conclusion based on a number of specific factors, to which we now turn.
(1)Employee Choice. The most compelling factor in favor of an election is that this case arose in the context of an employee effort to bring about a decertification vote. Had Francis Richards and Marie Grandmaison been correctly informed about the size of the bargaining unit, it appears virtually beyond doubt that they would have gathered enough untainted signatures to trigger an election before the subsequent events blocking an election occurred. Unlike the employer’s need to show a good faith doubt of majority support, the employees needed only a 30 percent showing of interest, or 21 employees. When they submitted their initial petition sheets to the Board, they were short only one name. The employees’ later solicitation of additional signatures was to no avail, apparently because the Union by then had filed an unfair labor charge blocking an election. Thus, a Board-certified election would be most responsive to the wishes of the employees, whose free choice is a primary concern of the NLRA. See, e.g., Texas Petrochemicals Corp. v. NLRB, 923 F.2d 398, 406 (5th Cir.1991) (the NLRA “was enacted not to further union membership or to deter it but to further employee choice and to provide an effective mechanism for realizing that choice”).
(2) Insubstantial nature of the violations. This is not a case involving egregious anti-union conduct by the Company. As discussed above, LaVerdiere’s did not instigate the decertification drive and its problematic conversations with employees could be said to have had only a minimal impact on their attitudes toward Local 340. Cf. NLRB v. Horizon Air Services, Inc., 761 F.2d 22, 29 n. 5 (1st Cir.1985) (employer “manifested a Stalingrad defense of sorts to the threat of unionization, fighting the Union, by any means at hand, from rock to rock and from tree to tree”); Eastern Maine Medical Center v. NLRB, 658 F.2d 1, 3-13 (1st Cir.1981) (company failed to bargain in good faith, manipulated wage and benefit increases to discourage union support, questioned job applicants about union sentiments and improperly imposed solicitation restrictions); Texaco, Inc. v. NLRB, 722 F.2d 1226, 1228-29 (5th Cir. 1984) (management assisted in circulation of decertification petition and initiated idea to cancel collective bargaining agreement). Moreover, the history of LaVerdiere’s relationship with the Union suggests a generally cooperative coexistence during the period in which the Union enjoyed substantial employee support. Accordingly, there appears to be no need to impose a bargaining order for the purpose of deterring the Company from efforts to undermine Local 340, or any other union chosen by its employees to represent them. Cf. Horizon Air Services, 761 F.2d at 32 (affirming bargaining order because the egregious actions of the employer “constitute a more than ample basis for a sound inference of future interference and/or enduring aftereffects”); Eastern Maine Medical Center, 658 F.2d at 13 (affirming bargaining order “in view of the serious and pervasive violations disclosed in the record”).
(3) Passage of time. It has been roughly six years since LaVerdiere’s withdrew recognition from Local 340, nearly three- and-one-half of which passed while the AU’s decision was on appeal to the Board. We share the view of other courts that inordinate delay attributable to the Board “cannot be ignored in developing a remedy that protects employee rights,” Texas Petrochemicals, 923 F.2d at 404. See also Peoples Gas, 629 F.2d at 48; J.J. Newberry Co. v. NLRB, 645 F.2d 148, 154 (2d Cir. 1981). With the passage of time, the adverse effects of any improper conduct by the employer likely will be dissipated, particularly when that conduct amounted to insubstantial violations in the first place. In addition, significant turnover can be expected to occur when a case is pending for years; here, for example, only five of the 70 employees currently in the bargaining unit voted in a representation election.
We recognize the other side of the argument — that taking into account the passage of time rewards employer recalcitrance, see Peoples Gas, 629 F.2d at 48—and do not mean to suggest that a lengthy delay should result automatically in an election rather than a bargaining order. See Texas Petrochemicals, 923 F.2d at 404 (“If delays are occasioned by an obstinate employer, he may not benefit from his own wrongs....”) But in circumstances such as these — where there existed a clear showing of substantial employee dissatisfaction unprovoked by the employer before the employer’s less-than-egregious misconduct — we think the Board’s inordinate delay strongly weighs against a bargaining order, which would impose a relationship on the parties for a substantial period into the future even in the face of strong employee opposition to the union.
Thus, each of these three factors weighs heavily in favor of an election. In arguing that the bargaining order should be upheld, the Union and Board focus in their briefs on the Union’s presumption of continuing support, the principle that new hires also are presumed to support the union, and the Company’s failure to show lack of majority support for the Union. Conspicuously absent from their discussions, however, is any recognition that the conflict in this case arose from an employee-initiated drive to obtain a decertification election — a drive that generated substantial, if not proven majority, support. We think this factor is decisive in light of the other circumstances. We therefore conclude that the Board’s choice of remedy clearly was unreasonable, constituting an abuse of its discretion, and that the bargaining order may not be enforced.
III. Conclusion
Limited in our review, we discern no reversible error in the Board’s findings that LaVerdiere’s committed several unfair labor practices in violation of the NLRA— with the security statement, the withdrawal of recognition and the refusal to permit union access to its facility. The equities presented in the record, however, cause us to conclude that the Board’s choice of remedy may not be upheld. In these circumstances, we think the holding of a fair election — the “preferred” method for determining whether a union has majority support, see Gissel, 395 U.S. at 602, 89 S.Ct. at 1934—is the only appropriate option.
Accordingly, the Board’s order is enforced in part, denied in part and remanded to the Board for further action consistent with this opinion.
. The Company reduced the hours of new employees from 40 per week to 30 per week upon completion of the probation period.
. Section 8(a)(1) provides: "It shall be an unfair labor practice for an employer — (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section [7]....” 29 U.S.C. § 158(a)(1). Section 7 provides in pertinent part: "Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining_” Id. at § 157.
. "When you were hired I advised you that this Union contract requires you to join and our practice has been to reduce your hours to 30 hours per week.”
. Our reading of the record suggests that, in drafting this statement, LaVerdiere’s counsel actually may have been attempting to avoid directly criticizing the Union. According to Bishop’s testimony, the lawyer told him in their first conversation that it not only might be improper for the Company to reduce hours when employees joined the Union but also that “it might be discriminatory for [the employees] to have to pay the initiation fee” because of their part-time status. The statement read to the employees, although somewhat ambiguous, see supra at p. 5, seems to address only the Company's possible impropriety — perhaps because it seemed inappropriate to challenge the Union directly during an ongoing decertification drive. Telling half the story, however, made Bishop’s statement more susceptible to misinterpretation; if the only concern was the Company's possible improper discrimination based on union membership, there was no reason to advise the employees to hold off paying initiation fees.
We note this point not because it affects our decision with respect to taint, but because it reveals a possibly benign explanation for the Company’s conduct. See infra at subsection D.
. Although the petitions stated on their face that the signatories no longer wished to be represented by the Teamsters, the Board held that Laverdiere’s direct statement that the petitions were in fact "just for a revote” preempted the written language. In so holding, the Board analogized to its rule on counting authorization cards, which was approved by the Supreme Court in NLRB v. Gissel Packing Co., 395 U.S. 575, 606, 89 S.Ct. 1918, 1936, 23 L.Ed.2d 547 (1969). This rule provides that a card is invalid if its "language is deliberately and clearly can-celled... with words calculated to direct the signer to disregard and forget the language above his signature." The analogy is imprecise here because there is no evidence that LaVerdi-ere was aware of the language on the petition or "deliberately” sought to cancel it, but we nevertheless think it instructive in these circumstances because the clear message given to the employees was that the petition would be used only for a revote.
. An employee who signed the petition, in testimony credited by the ALJ, see Opinion at 9 n. 13, reported that the Union’s business agent encouraged employees to sign by saying that the petition had no legal significance and would not be sent to the Board. According to her testimony, the Union agent spoke disparagingly of LaV-erdiere's counsel (saying that he was a "crook" earning $400 an hour), and stated that if LaVer-diere’s president saw that a majority of employees had signed the petition, he might back off and start bargaining. Tr. at 177. He further told the employees that if the conflict dragged on for a long period, it could lead to a strike, during which the employees could “draw unemployment and lay out in the sun all summer.” Id. at 178. Finally, she testified that the Union agent told the employees they should continue to remain in good standing with the Union, but would not be in good standing if they failed to sign the petition.
. This result automatically leads to the conclusion that the Board properly found that LaVer-diere’s violated § 8(a)(5) by refusing a Union representative access to the Company’s premises to investigate a grievance in November 1985.
. Of the 70 members of the bargaining unit in the spring of 1985, 28 still remain.
. At oral argument, the Union’s counsel heavily emphasized the fact that 63 members of the unit remained on dues check-off in May, after the contract had expired and they had been told how to stop the procedure. The ALJ did not consider this information, see Opinion at 12 n. 16, and we are unable on the record before us
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
K.K. HALL, Circuit Judge:
The Secretary of the Department of Health and Human Services (“Secretary”) cross-appeals from a portion of an order of the district court, reversing the Secretary’s denial of reimbursement to Arlington Hospital (“Hospital”) for the cost of inpatient telephone services provided to Medicare beneficiaries under Title XVIII of the Social Security Act, 42 U.S.C. § 1395, et seq. We conclude that the Secretary’s regulation, which prohibits reimbursement for the personal use of bedside telephones of Medicare patients, is valid and enforceable. Accordingly, we reverse and remand the matter to the district court to determine the appropriate method of excluding the Hospital’s cost of patient telephones from Medicare reimbursement.
I.
The Hospital is a short-term, general, acute-care facility, located in Arlington, Virginia, and qualified to provide services under the federal Medicare program. During 1977, the Hospital incurred costs of providing telephone services to its Medicare patients. It requested reimbursement for these costs under Medicare from Blue Cross Association and its subcontractor, Group Hospital, Inc., the fiscal intermediary responsible for handling such claims.
When the intermediary refused to include the costs of patient telephones as part of the Hospital’s reimbursable expenses, the Hospital appealed the decision to the Provider Reimbursement Review Board (“PRRB”). The PRRB disallowed the portion of the Hospital’s telephone costs attributable to the patient’s personal use and its decision on this matter was affirmed by the Secretary.
Subsequently, the Hospital filed this action in district court, seeking $19,642 for providing inpatient telephone services to Medicare patients. In granting plaintiff’s motion for summary judgment on this issue, the ■ district court found that it had jurisdiction to review the claim. It then concluded that the Secretary’s treatment of patient telephones as a non-reimbursable personal comfort item conflicted with the Medicare statute, was arbitrary and capricious, and was not supported by substantial evidence. The Arlington Hospital v. Schweiker, 547 F.Supp. 670 (E.D.Va.1982). In reaching its conclusion, the court below adopted the holding of another district court that had considered the same issue, St. James Hospital v. Harris, 535 F.Supp. 751 (N.D.Ill.1981). The Secretary has cross-appealed from this portion of the decision below.
II.
The Secretary contends that the district court lacked jurisdiction to consider the patient telephone issue. The Secretary further argues that, assuming judicial review is appropriate, her regulation prohibiting reimbursement for patient telephone costs is valid.
For the reasons expressed by the district court, Id. at 675-77, we reject the Secretary’s contention that judicial review is barred under 42 U.S.C. § 1395oo(g). We agree, however, with the Secretary that the patient telephone regulation is clearly authorized by the Medicare statute and, as such, is valid and enforceable.
42 U.S.C. § 1395y(a)(6) provides that “no payment may be made under [Medicare] for any expenses incurred for items or services — which constitute personal comfort items____” The Secretary’s regulation, 42 C.F.R. § 405.310(j), lists as examples of personal comfort items “a television set, or telephone service, etc.” (Emphasis added). The Secretary relied on this regulation in denying the Hospital’s claim for reimbursement. The Hospital contends, however, that the Secretary’s regulation conflicts with the Medicare statute’s requirement to pay for “inpatient hospital services” including “equipment, for use in the hospital, as [is] ordinarily furnished by such hospital for the care and treatment of inpatients,” 42 U.S.C. § 1395x(b)(2), and “such other diagnostic or therapeutic items or services ... ordinarily furnished to inpatients____” 42 U.S.C. § 1395x(b)(3).
According to the Hospital, patient telephones come within the statutory definition of covered inpatient hospital services, because the record demonstrates that they are ordinarily furnished to inpatients and, by providing access to friends and relatives, have therapeutic value. Furthermore, the Hospital argues that the legislative history of the Medicare statute demonstrates Congressional intent to exclude from coverage potential personal comfort items, like -telephones, only when they have no therapeutic value. We cannot accept the Hospital’s position on this question.
In our view, the Secretary’s determination to exclude patient telephones as a personal comfort item is consistent with the Medicare statute and is neither arbitrary nor capricious. There are many items which could be of some therapeutic benefit to the patient, but which are not so directly related or essential to the delivery of health care services as to justify reimbursement under Medicare. Certainly, it was not the intent of Congress to reimburse the cost of every item with tangential therapeutic value, merely because a hospital undertakes to furnish that item routinely to its patients. Contrary to the Hospital’s assertion, neither the language of the Medicare statute nor its legislative history suggests such a result.
The Secretary thus acted reasonably and well within the bounds of her discretion in concluding that the costs of telephones for the personal use of patients, like television sets, are, despite their therapeutic value, not reimbursable under Medicare. We agree with other courts that have considered this same issue, and conclude that because the Secretary’s regulation is reasonable, it must be upheld by this Court. Memorial Hospital v. Heckler, 706 F.2d 1130 (11th Cir.1983); St. Mary of Nazareth Hospital Center v. Department of Health and Human Services, 698 F.2d 1337 (7th Cir.), cert. denied, — U.S.-, 104 S.Ct. 107, 78 L.Ed.2d 110 (1983); Presbyterian Hospital of Dallas v. Harris, 638 F.2d 1381 (5th Cir.), cert. denied, 454 U.S. 940, 102 S.Ct. 476, 70 L.Ed.2d 248 (1981); St. Francis Hospital, Inc. v. Califano, 479 F.Supp. 761 (D.D.C.1979).
Accordingly, we hold that the cost of providing a Medicare patient with a bedside telephone is not reimbursable under the Medicare program. We reverse the contrary holding of the district court and remand this case for a determination of the appropriate accounting method to be employed in excluding the costs of patient telephones from the Hospital’s reimbursable expenses.
III.
For the foregoing reasons, that portion of the district court’s judgment relating to patient telephones is reversed and the matter is remanded for further evidentiary proceedings consistent with this opinion.
REVERSED AND REMANDED.
. See The Arlington Hospital v. Schweiker, 547 F.Supp. 670 (E.D.Va.1982). The Hospital appealed from another portion of the district court's order, which held that the costs of uncompensated care, furnished by the Hospital to indigents, pursuant to the Hill-Burton Act, 42 U.S.C. § 291 et seq., were not reimbursable under the Medicare program. At oral argument, counsel for the Hospital conceded that it was bound by this Court's decision in Iredell Memorial Hospital, Inc. v. Schweiker, 699 F.2d 196 (4th Cir.), cert. denied, — U.S. -, 104 S.Ct. 150, 78 L.Ed.2d 139 (1983), and accordingly withdrew its appeal of the Hill-Burton issue.
A final portion of the district court's order struck down, as arbitrary and capricious, the Secretary’s approval of a methodology employed to calculate the costs of nonreimbursable physician billing services. There was no appeal taken from this aspect of the district court’s decision.
. Because the patient telephone issue is the only issue we are concerned with in this appeal, we will not address the other claims for relief raised and disposed of below. See supra note 1.
. Following the district court’s disposition of the instant case, the Seventh Circuit reversed the decision in St. James Hospital v. Harris, 535 F.Supp. 751 (N.D.Ill.1981), rev'd sub nom. St. Mary of Nazareth Hospital Center v. Department of Health and Human Services, 698 F.2d 1337 (7th Cir.), cert. denied, - U.S. -, 104 S.Ct. 107, 78 L.Ed.2d 110 (1983).
. Other Circuit Courts that have addressed this question have likewise found jurisdiction to review the issue of patient telephone costs. Memorial Hospital v. Heckler, 706 F.2d 1130, 1132— 33 (11th Cir. 1983); St. Mary of Nazareth Hospital Center v. Department of Health and Human Services, 698 F.2d 1337, 1345-46 (7th Cir.), cert. denied, — U.S.-, 104 S.Ct. 107, 78 L.Ed.2d 110 (1983).
. The Secretary acknowledges that reimbursement is available where patient telephones are used in a manner directly related to health care, such as for intra-hospital medical communications or as part of a cardiac arrest system.
. The Secretary argues that average costing is the appropriate method for disallowing the costs at issue. That method allocates to each telephone in the hospital its proportionate share of all hospital costs and then excludes from reimbursement the expenses of all phones assigned to patient use. The Hospital, on the other hand, contends that only the incremental or marginal cost of providing patient telephones should be disallowed. Under the latter method, disallowance would be limited to those costs which would be saved if the bedside telephones were removed. We leave resolution of this issue in the first instance to the district court, which has not yet had an opportunity to consider it.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
WILLIAM E. MILLER, Circuit Judge.
This is a petition for review of an order of the National Labor Relations Board finding the petitioner in violation of Section 8(a)(1) of the National Labor Relations Act. The NLRB has filed a cross-application for enforcement of the order.
The circumstances giving rise to the controversy are, in summary, as follows: Petitioner, a Kentucky corporation, with about 200 employees, is engaged in the manufacture of women’s and children’s clothing at its plant in Monticello, Kentucky. In December 1972, the International Ladies’ Garment Workers’ Union, AFL — CIO, hereinafter referred to as the Union, began organizing petitioner’s employees. Petitioner’s President Brown-stein became aware of the Union’s organizing activity on December 29, and on January 2, 1973, met with a large group of employees in the plant conference room. During the course of this meeting Brownstein announced that he had previously met with two other company officials and that they had decided to grant the employees an additional paid holiday. Brownstein testified that he had intended to announce the additional holiday at the annual Christmas party on December 21 but through oversight had failed to do so. The additional holiday was subsequently cancelled because, as Brownstein testified, legal counsel had advised that the granting of the additional holiday could be construed as an unfair labor practice.
On January 17, 1973, Union Agents Jenkins and Freeland came to petitioner’s plant to demand recognition for the Union. Accompanied by a group of from 40 to 120 employees, Jenkins went to the plant office, informed petitioner’s Director of Manufacturing Ermini that a majority of the employees had authorized the Union to bargain for them and demanded recognition. Ermini disclaimed authority to deal with the situation. At the suggestion of Jenkins, Er-mini telephoned Brownstein. Jenkins and the employees remained in the lobby of the plant office chanting, “we want a union.” After about 30 minutes, Plant Manager Burnham informed Jenkins that Brownstein would obtain advice from his lawyers and contact Jenkins later that day. Burnham then instructed the employees to return to their jobs. Although the employees did return to their jobs almost immediately, they did not do so until they received a direct instruction from Jenkins. As a result of these events, 90 employees received written reprimands for leaving their places of work without permission. The reprimand included a warning that future violations of plant rules might subject the employee to discharge.
On January 28, 1973, union organizers distributed smocks on which the name of the Union had been printed. The next day about 10 employees wore the smocks to work. One of these employees, Lynn Denney, testified that her supervisor Velma Smith told her: “Lynn, I want to tell you for your own good before the bell rings that they will probably take you to the office and make you take it [the smock] off.” Smith denied making the statement. Penney continued to wear the smock, and Smith did not confront the other employees in her section who were wearing smocks.
On or about February 28, 1973, Calvin Upchurch and Clyde Denney, employees in the shipping department, posted a union handbill on Upchurch’s workbench. When Upchurch refused to remove the handbill at the request of his supervisor Campbell, Campbell consulted with Er-mini and then removed the handbill, folded it, and placed it in Upchurch’s pocket. Shortly thereafter, perhaps the next day, Upchurch and Denney pinned union handbills to their jackets which they hung on nails 5 or 10 feet from a water fountain used not only by employees in the shipping department but also by other employees. Some of these employees coming to drink water made comments about the handbills. These comments disturbed Campbell who asked Upchurch and Denney to remove the handbills from their jackets. When they refused, Campbell removed the handbills, tore them up, and threw them in the trash. Upchurch and Denney then pinned the handbills to the back of their shirts, but Campbell, although he saw the handbills, made no comment or attempt to remove the handbills. The two men continued to wear handbills in this manner for a considerable time.
Sharon Brown, employed by petitioner as a payroll clerk until she quit on March 14, 1973, testified that around the last of February she was asked by Plant Manager Burnham if she knew about the Union and whether they were going to strike the following Tuesday. Brown answered that she knew nothing about the Union. She also testified that about a week later Personnel Manager Preston interviewed her after she told him she was thinking about quitting. She quoted Preston as saying: “I heard that you were working for the Union today . if I knew you or anyone else was working for the Union, I’d get rid of you and wouldn’t this be a perfect chance to get rid of you.” Preston denied making the statement but did testify that he told her he had heard that she was for the Union but that he didn’t believe it because he had trusted her completely.
When it became evident that the Union would not be recognized, a petition for an election was filed with respondent. An election was scheduled for April 5, 1973. About March 1, 1973, a “Strike Committee” of 22 employees was formed. Jenkins testified that the committee was to serve as “a pressure release for any strike activity” and “had no authority to pull the workers out, only to meet and discuss and then talk to [Jenkins] about the possibilities before anything happened. . . . ” A member of the committee, Rains, testified that the committee had full power to call a strike. At meetings of the committee on March 1 and March 17, various allegedly unfair labor practices were discussed. Rains testified that on March 17 “we discussed that if we did go out on strike it would be an unfair labor practice strike.” Signs were made reading “On strike against Larand Leisurelies, Inc., for unfair labor practices.” A decision to strike was made, but after consulting with Jenkins, who had not been present at the meeting, the committee apparently decided to await the results of the election scheduled for April 5.
The Union won the election conducted by respondent on April 5. The petitioner filed objections to the election on April 12. On April 6 the Union’s lawyers called upon petitioner to bargain. Petitioner refused this request pending a ruling on the objections. The election was subsequently set aside by respondent’s regional director. On April 13 two employees, Bell and Brown, were discharged. A group of employees came to Jenkins complaining about the discharges and requesting a strike. Jenkins then filed an unfair labor practice charge on April 20 in connection with the discharge of Bell and Brown, which was later dismissed by respondent’s regional director. On April 25, Jenkins called a meeting attended by about 115 employees at which Jenkins discussed what the Union considered to be unfair labor practices. At the meeting it was announced that the Union had decided to call a strike. There being no objections from any of the employees, no formal strike vote was taken. The strike began on April 26. On the first and second days of the strike, Plant Manager Preston took pictures at the picket line but no photographs were introduced in evidence before the administrative law judge.
As a result of the foregoing events, various charges were filed with respondent by the Union. A hearing was held on the charges before an administrative law judge. The administrative law judge concluded that petitioner had committed unfair labor practices in violation of Section 8(a)(1) of the National Labor Relations Act: (1) in issuing written reprimands to employees because they engaged in protected activities, (2) in threatening to discharge employees for engaging in such protected activities, (3) in granting and then rescinding a paid holiday after learning of the union organization, (4) in interfering with employees’ organizing activities, (5) in threatening employees with layoff or discharge if they engaged in such activities, (6) in removing from employee’s personal possession union handbills, and (7) in photographing employees on the picket line. The administrative law judge also concluded that the strike was an economic strike rather than an unfair labor practice strike. This conclusion was based on a finding that the strike was primarily caused by the discharge of Bell and Brown and by the apprehension of future similar discharges.
The Union, the petitioner, and respondent’s general counsel filed various exceptions. After a review of the record, the administrative law judge’s decision, and the exceptions, a three-member panel of the Board affirmed the administrative law judge’s decision except as to his conclusion that the strike was an economic strike. The Board concluded that the strike was an unfair labor practice strike because it had been caused, at least in part, by the petitioner’s unfair labor practices. The Board then issued an order requiring petitioner to cease and desist from the practices found to be in violation of Section 8(a)(1) of the Act, to expunge the written reprimands from employees’ personnel files, to reinstate striking employees to their former or substantially equivalent positions, and to post appropriate notices.
Petitioner argues that Campbell’s removal and destruction of the union handbills pinned to Upchurch’s and Denney’s jackets was justified because the handbills were disruptive of production and efficiency. The wearing of union insignia has been held to be a protected activity in furtherance of the rights of self-organization granted by Section 7 of the Act. Republic Aviation Corp. v. NLRB, 324 U.S. 793, 65 S.Ct. 982, 89 L.Ed. 1372 (1945). There is an exception to this rule where there are “special considerations relating to employee efficiency and plant discipline.” Fabri-Tek, Inc. v. NLRB, 352 F.2d 577, 585 (7th Cir. 1965). The court in Fabri-Tek found that “out-size” buttons portraying the union insignia, “vari-vue” buttons, the wearing of buttons as earrings, and the use of “out-size” letters stenciled on the back of a blouse reading “Vote I.B.E.W.” could tend to distract the attention of employees engaged in the extraordinarily complex process of manufacturing magnetic memory devices for the computer industry. No such “special circumstances” were found to exist in this case.
Petitioner next argues that the Board erred in finding that Personnel Manager Preston unlawfully interrogated employee Brown. Interrogation of an employee about union activities violates Section 8(a)(1) when its probable effect is to inhibit such activity. NLRB v. Southern Electronics Co., 430 F.2d 1391 (6th Cir. 1970). Giving full credit to Preston’s version of the conversation, the Board found that Preston’s statement called at least for a tacit admission by Brown that she was sympathetic with the Union, and therefore constituted unlawful interrogation. Although a different inference might have been drawn from Preston’s statement, we hold that the Board’s finding on this point was supported by substantial evidence on the record considered as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).
Petitioner also argues that the photographing of pickets was not a violation of the Act because photographs were taken on the advice of counsel to support a petition for injunctive relief. Photographing of pickets does not violate Section 8(a)(1) of the Act where the photographs are taken to establish for purposes of an injunction suit that pickets engaged in violence. Stark Ceramics, Inc., 155 N.L.R.B. 1258, enforced, 375 F.2d 202 (6th Cir. 1967). However, if no photographs are introduced into evidence in the injunction proceeding, it may be inferred that the photographing was not intended for a valid purpose but, on the contrary, was intended to interfere with the activity secured by Section 7 of the Act. NLRB v. Rybold Heater Co., 408 F.2d 888 (6th Cir. 1969). In this case, as in Rybold, there is no evidence that petitioner used any photographs in support of an injunction sought on May 31, 1973, five weeks after the strike began.
Petitioner also seeks to challenge other unfair labor practice findings of the Board. The Court finds that these challenges are not subject to judicial review because petitioner failed to file exceptions with the Board as required by Section 10(e) of the Act and Section 102.46(h) of the Board’s rules and regulations. Geauga Plastics Co. v. NLRB, 404 F.2d 1382 (6th Cir. 1968), cert. denied, 395 U.S. 944, 89 S.Ct. 2017, 23 L.Ed.2d 463 (1969). Although Section 10(e) of the Act does excuse failure to raise an objection before the Board where extraordinary circumstances exist, the Court finds that no such circumstances are present in this case.
We turn to petitioner’s contention that the Board’s finding as to the nature of the strike was not supported by substantial evidence on the record as a whole. Although the Board is free to find facts and to draw inferences therefrom different from those of the administrative law judge, NLRB v. Wooster Div. of Borg-Warner Corp., 236 F.2d 898 (6th Cir. 1956), rev’d on other grounds, 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823 (1957), the reviewing court has an obligation to examine more carefully the evidence in cases where a conflict exists. Jervis Corp. v. NLRB, 387 F.2d 107 (6th Cir. 1967); NLRB v. Bin-Dicator Co., 356 F.2d 210 (6th Cir. 1966); United Fireworks Mfg. Co. v. NLRB, 252 F.2d 428 (6th Cir. 1958). Yet, this Court must uphold the findings of the Board if we find substantial evidence on the record as a whole to support them. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).
If an unfair labor practice is a “contributing cause” of a strike, then, as a matter of law, the strike must be considered as an unfair labor practice strike. NLRB v. Wooster Div. of Borg-Warner Corp., 236 F.2d 898 (6th Cir. 1956), rev’d on other grounds, 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823 (1957). The burden is on petitioner to show that the strike would have occurred even if petitioner had not committed unfair labor practices. Philip Carey Mfg. Co. v. NLRB, 331 F.2d 720 (6th Cir.), cert. denied, 379 U.S. 888, 85 S.Ct. 159, 13 L.Ed.2d 92 (1964); NLRB v. Wooster Div. of Borg-Warner Corp., supra.
Petitioner argues, citing Winter Garden Citrus Products Cooperative v. NLRB, 238 F.2d 128 (5th Cir. 1956), that there must be proof of a causal connection between unfair labor practices and the resulting strike to support a finding that the strike was caused by the unfair labor practices. Although the administrative law judge found that the strike was primarily caused by the discharge of Bell and Brown and by the apprehension of future discharges, there is no finding that unfair labor practices were not contributing causes of the strike.
Considering the record as a whole, we believe that there is substantial evidence that the unfair labor practices committed by petitioner were contributing causes of the strike. At the employee meetings on March 1, March 17, and April 25, petitioner’s unfair labor practices were discussed, and there is substantial evidence that the employees were inclined to strike before the election and before Bell and Brown were discharged. Accordingly, we must uphold the Board’s finding that the strike was an unfair labor practice strike from its inception.
Enforcement of the Board’s order is therefore granted.
. Section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1), provides:
§ 158. Unfair labor practices
(a) It shall be an unfair labor practice for an employer—
(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title [§ 7 of the Act];
* * * * * *
. The discharge of Bell and Brown was not alleged to be an unfair labor practice.
. Section 7 of the Act, 29 U.S.C. § 157, provides:
§ 157. Right of employees as to organization, collective bargaining, etc.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
. See also NLRB v. Harrah’s Club, 337 F.2d 177 (9th Cir. 1964); NLRB v. Essex Wire Corp., 245 F.2d 589 (9th Cir. 1957); Caterpillar Tractor Co. v. NLRB, 230 F.2d 357 (7th Cir. 1956).
. Section 10(e) of the Act, 29 U.S.C. § 160(e), provides:
(E) The Board shall have power to petition any court of appeals of the United States, or if all the courts of appeals to which application may be made are in vacation, any district court of the United States, within any circuit or district, respectively, wherein the unfair labor practice in question occurred or wherein such person resides or transacts business, for the enforcement of such order and for appropriate temporary relief or restraining order, and shall file in the court the record in the proceedings, as provided in section 2112 of Title 28. Upon the filing of such petition, the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction of the proceeding and of the question determined therein, and shall have power to grant such temporary relief or restraining order as it deems just and proper, and to make and enter a decree enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board. No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive. If either party shall apply to the court for leave to adduce additional evidence and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the hearing before the Board, its member, agent, or agency, the court may order such additional evidence to be taken before the Board, its member, agent, or agency, and to be made a part of the record. The Board may modify its findings as to the facts, or make new findings by reason of additional evidence so taken and filed, and it shall file such modified or new findings, which findings with respect-to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive, and shall file its recommendations, if any, for the modification or setting aside of its original order. Upon the filing of the record with it the jurisdiction of the court shall be exclusive and its judgment and decree shall be final, except that the same shall be subject to review by the appropriate United States court of appeals if application was made to the district court as hereinabove provided, and by the Supreme Court of the United States upon writ of certiorari or certification as provided in section 1254 of Title 28.
. Section 102.46(h) of the Board’s rules and regulations, 29 C.F.R. § 102.46(h), provides:
******
(H) No matter not included in exceptions or cross-exceptions may thereafter be argued before the Board, or in any further proceeding.
******
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
This is an appeal from a judgment in admiralty in a collision case on the Houston Ship Channel.
The district judge filed full findings of fact and conclusions of law, and entered judgment accordingly.
As is usual in cases of this kind, the appellant makes a great outcry against the findings. We are, however, convinced that this is much ado about nothing and that the decree should be affirmed on the ground that the findings are not shown to be clearly erroneous.
Affirmed.
. Smith & Sons Ltd., v. Tug San Pedro, D.C., 226 F.Supp. 879.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KING, Circuit Judge:
In an admiralty suit concerning damaged cargo, the cargo owner and its insurer appeal from a final judgment in their favor, challenging the district court’s conclusion that the carrier was entitled to a limitation of liability; the carrier cross-appeals, challenging the district court’s finding that the cargo was delivered to the carrier in good condition. We conclude that the district court erroneously limited the carrier’s liability, but we decline to overturn the court’s finding concerning the preshipment condition of the cargo. Thus we affirm the judgment as to the finding of liability, reverse the judgment as to the limitation of liability, and remand the case for a determination of damages.
I.
Coutinho, Caro and Company, Inc., a steel importer, and Fireman’s Fund Insurance Company, its insurer (collectively “Coutinho”), sued the M/V SAVA and its owners and operators (collectively “Jugoli-nija”) to recover for rust damage to a shipment of steel coils shipped from Bilbao, Spain, to New Orleans, Louisiana. The parties submitted the case to the district court for decision on the basis of stipulations, deposition testimony, and exhibits; they agreed that the Carriage of Goods by Sea Act (“COGSA”), 46 U.S.C.App. §§ 1300-15, governed the case. The district court issued “Findings of Fact and Conclusions of Law” on February 12, 1987, ruling that Coutinho’s evidence sufficiently established the carrier’s liability under COGSA but that Jugolinija’s evidence sufficiently invoked COGSA’s limitation of liability provision, 46 U.S.C.App. § 1304(5). By an amended judgment entered on March 24, 1987, the district court awarded damages to Coutinho totalling $195,937.94 plus interest and costs. Coutinho filed a timely notice of appeal from the final judgment, and Jugolinija filed a timely cross-appeal.
Because this case hinges on the carrier’s and the shipper’s respective burdens of proof under COGSA, the facts of the case may be briefly stated. In December of 1983, Coutinho purchased 420 coils of steel from a manufacturer in Spain — 286 coils of cold rolled steel and 134 coils of galvanized steel. The steel was manufactured at two mills during October and November of 1983, shipped to Bilbao in open trucks, loaded aboard the SAVA on December 29-30, 1983, and stowed in holds numbered four and six. Two marine surveyors observed the loading; SERMAP, acting on behalf of the vessel, compiled a survey report, and IMARCO, acting on behalf of the charterer, added its notes as exceptions to the thirty-six bills of lading that covered the shipment. During the voyage, inclement weather conditions frustrated ventilation of the cargo, which needed to be accomplished by opening the holds because the SAVA lacked a forced ventilation system to control the dewpoint in the holds. The SAVA arrived in New Orleans on February 14, and when discharge of the cargo began two or three days later, the coils showed various degrees of rusting. A clearly defined waterline on the coils from hold four and standing water in hold six indicated the presence of seawater in both holds. After two of Coutinho’s buyers received their portions of the shipment and complained of heavy rust damage, Coutin-ho collected the coils at a warehouse in Chicago. Examination of the coils suggested flooding of the holds during the voyage and carriage of the cargo in a moisture-saturated environment. The damaged coils were subsequently sold at salvage or subject to depreciation allowances.
In the Findings of Fact and Conclusions of Law, the district court first held that Coutinho met its initial burden under COG-SA of proving that Jugolinija was a “carrier” of the cargo. See 46 U.S.C.App. § 1301. The court then found that Coutin-ho established a prima facie case of the carrier’s liability under COGSA by showing that the carrier received the cargo in good condition but delivered it damaged. The court acknowledged that a bill of lading evidences the cargo’s preshipment condition and that, in this case, the bills of lading contained numerous exceptions noting rust and packaging damage. But the court found the noted exceptions unpersuasive in view of the witnesses’ testimony. The master testified that the exterior rust he saw on the coils did not particularly concern him and that he observed no waterline marks or indication that water might have penetrated the waster sheets. Based on photographs contained in the loading survey report, Coutinho’s expert opined that the coils were loaded in mill condition and that the bills of lading described light atmospheric rust on the waster sheets, not a problem affecting the coils. Next, the court found that Jugolinija failed to prove that it exercised due diligence to prevent the harm or that a statutory exception caused the harm, a burden that shifted to the carrier under COGSA once the shipper presented a prima facie case. See Blasser Bros. v. Northern Pan-American Line, 628 F.2d 376, 381 (5th Cir.1980). The court rejected both of Jugolinija’s exculpatory assertions — that condensation caused the rust and constituted a peril, danger, or accident of the sea, see 46 U.S.C.App. § 1304(2)(c), and that insufficiency of packing caused the damage, see id. § 1304(2)(n).
Finally, the district court concluded that Jugolinija’s liability was limited to $500 per coil. To understand the court’s ruling, a brief background discussion is in order. Section 1304(5) of Title 46 of the United States Code, COGSA’s limitation of liability provision, provides in pertinent part:
(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.
The Supreme Court has established that COGSA must be read in light of common law principles. See, e.g., Robert C. Herd & Co. v. Krawill Mach. Corp., 359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820 (1959); United States v. Atlantic Mut. Ins. Co., 343 U.S. 236, 72 S.Ct. 666, 93 L.Ed. 907 (1952). Thus federal courts have uniformly held— as did the district court in this case — that section 1304(5) embodies the traditional concept of “fair opportunity.” See, e.g., General Elec. Co. v. MV Nedlloyd, 817 F.2d 1022, 1024 (2d Cir.1987), cert. denied, — U.S. —, 108 S.Ct. 710, 98 L.Ed.2d 661 (1988); Cincinnati Milacron, Ltd. v. M/V American Legend, 784 F.2d 1161, 1163 (4th Cir.), rev’d on other grounds, 804 F.2d 837 (1986) (en banc); Komatsu, Ltd. v. States S.S. Co., 674 F.2d 806, 809 (9th Cir.1982). As we explained in Brown & Root, Inc. v. M/V Peisander, section 1304(5) requires that the shipper be allowed to increase the cargo’s valuation above $500 per package because of “Supreme Court decisions which for well over a century consistently held that only when a common carrier grants its shippers a ‘fair opportunity to choose between higher or lower liability by paying a correspondingly greater or lesser charge can a carrier lawfully limit recovery to an amount less than the actual loss sustained.’ ” 648 F.2d 415, 420 n. 11 (5th Cir.June 1981) (quoting cases). Accordingly, courts have imposed the same precondition to limited liability under section 1304(5) that applied in suits to enforce similar contractual provisions under general maritime law — that is, to benefit from a limitation of liability provision, the carrier bears an initial burden of showing that it offered the shipper a fair opportunity to avoid the limitation. See, e.g., General Elec., 817 F.2d at 1029; Cincinnati Milacron, 784 F.2d at 1163; Komatsu, 674 F.2d at 809.
The courts have different views, however, of what evidence establishes a carrier’s prima facie case of fair opportunity. In this case, Jugolinija relied solely on the following provision in the bills of lading:
ADDITIONAL CLAUSES
(To be added if required in the contemplated trade).
B. U.S. Trade. Period of Responsibility.
In case the Contract evidenced by this Bill of Lading is subject to the U.S. Carriage of Goods by Sea Act, then the provisions stated in said Act shall govern before loading and after discharge and throughout the entire time the goods are in the Carrier’s custody.
The district court held that this clause incorporated COGSA into the bills of lading, provided the shipper with adequate notice of the terms of section 1304(5), and therefore constituted sufficient evidence of fair opportunity to shift to Coutinho the burden of showing that no opportunity actually existed. The court recognized that other federal courts have held that a bill of lading that merely incorporates COGSA by reference is insufficient evidence of fair opportunity, citing Cincinnati Milacron, Komatsu, and Pan American World Airways, Inc. v. California Stevedore & Ballast Co., 559 F.2d 1173 (9th Cir.1977). The court believed, however, that the Fifth Circuit has expressly rejected the rationale of those cases and adopted a constructive notice approach, citing Peisander and Wuerttembergische v. M/V Stuttgart Express, 711 F.2d 621 (5th Cir.1983). Because Coutinho did not produce any evidence to show that a fair opportunity did not exist and because the bills of lading contained no declarations of value, the court ruled that Coutinho could recover a maximum of $500 per coil and awarded damages accordingly.
On appeal, Coutinho raises essentially one issue: whether the district court erred in holding that a carrier presents prima facie evidence that it afforded the shipper a fair opportunity to avoid the $500 per package limitation by merely adducing a bill of lading that refers to COGSA. Coutinho contends that because the bills of lading constituted Jugolinija’s only evidence of fair opportunity, Jugolinija failed to make the initial showing necessary to trigger COGSA’s limitation of liability provision and thus the district court erred in limiting Coutinho’s recovery. Jugolinija both disagrees with Coutinho’s statement of the issue and urges us — if we conclude that COGSA’s limitation provision is inapplicable — to address the issue of Jugolinija’s liability. Jugolinija contends that the district court erred in finding that the cargo was in good preshipment condition. As we explain below, Coutinho correctly frames the issue and answers it; thus we will address both parties’ issues in the order requested.
II.
A. Limitation of Liability under COGSA
The question presented by Coutin-ho’s appeal is simply this: Was the presence of Additional Clause B (“Clause B”) in the bills of lading legally sufficient to establish Jugolinija’s prima facie case of fair opportunity? Coutinho argues that Clause B standing alone could not satisfy the carrier’s burden for three reasons: first, Clause B did not incorporate COGSA into the contract of carriage by its own terms; second, Clause B did not notify the shipper of a potential limitation or how to avoid it; and third, even if Clause B had incorporated COGSA into the contract, a mere incorporation of COGSA generally would not provide adequate notice to the shipper of the terms of section 1304(5). The district court’s answer to Coutinho’s legal question is subject to our plenary review, and we must disagree with the district court’s conclusion.
A reading of Clause B reveals that the basis of the district court’s holding — that the clause incorporated COGSA into the bills of lading and provided constructive notice to the shipper of section 1304(5)’s statement of fair opportunity — is fatally flawed. COGSA applies by its own force “to all contracts for carriage of goods by sea to or from ports of the United States in foreign trade,” although an express provision in a bill of lading will subject other contracts to COGSA’s terms. See 46 U.S.C.App. § 1312; see also id. § 1300. COGSA governs “the period from the time when the goods are loaded on to the time when they are discharged from the ship,” id. § 1301(e), although the carrier and shipper may expressly cover by contract the period before loading and after discharge, id. § 1307. In this case, Clause B does not state that the bill of lading is subject to COGSA’s provisions or that COGSA is “deemed to be incorporated herein.” See Peisander, 648 F.2d at 420 n. 9. Clause B merely provides that if COGSA applies, the period of applicability will include the entire time that the carrier has custody of the goods, including before loading and after discharge. Thus it is clear that if COGSA otherwise governed the bill of lading, Clause B operated to extend the duration of COGSA’s effectiveness. Here, COGSA did control the bills of lading because of COGSA’s compulsory terms and the nature of the voyage — not by the force of Clause B and the principle of incorporation. We fail to see how Clause B, which took effect (if at all) incident to COGSA’s mandate, provided even constructive notice to the shipper of the content of COGSA’s limitation of liability provision.
Without the faulty premise of the district court’s reasoning — constructive notice through incorporation — Clause B provides no basis to sustain the district court’s decision. In our cases cited by the district court, incorporation of COGSA was not determinative; we relied on evidence that the carrier gave the shipper a choice of rates and valuations. See Peisander, 648 F.2d at 424-25; Stuttgart Express, 711 F.2d at 622. In each case, the terms of the carrier’s tariff clearly afforded the shipper an opportunity to declare an increased value and pay a higher freight charge. In this ease, by contrast, Clause B contains no indication that a choice of shipping rates existed or that the shipper knew a particular rate was tied to a limited value. Jugoli-nija points to no other evidence, such as a tariff, to show that it offered the shipper the option to declare a value. Therefore, the district court wrongly concluded that Jugolinija was entitled to limited liability because of unrebutted evidence of fair opportunity.
Jugolinija only briefly attempts to defend the district court’s conclusion. Instead, Ju-golinija contends that Coutinho mistakenly argues that the carrier must demonstrate fair opportunity. In Jugolinija’s view, the real question is who bears the burden of proof? Its answer: the shipper must prove that a fair opportunity did not exist. Ju-golinija’s authority for this proposition is our statement to that effect in Peisander, 648 F.2d at 424, repeated in Stuttgart Express, 711 F.2d at 622. Implicitly, Jugolini-ja urges us to affirm the district court’s result on a new legal ground because the district court based its decision on a statement of law gleaned from our decision in Peisander: To benefit from the $500 per package limitation of section 1304(5), the carrier must present prima facie evidence that it afforded the shipper an opportunity to avoid the limitation by declaring a higher value, consisting of a provision in either the bill of lading or the carrier’s tariff.
As previously stated, other federal courts have similarly allocated the burden of demonstrating fair opportunity, and although we have not stated the rule as plainly as other circuits, we have voiced our agreement with their statements of law. In our most recent case involving a carrier’s entitlement to COGSA’s limitation of liability provision, we stated: “As to the burden of proof issue, we are in agreement with the position of the United States Court of Appeals for the Second Circuit.” Stuttgart Express, 711 F.2d at 622 (citing In re Isbrandtsen Co., 201 F.2d 281, 285 (2d Cir.1953)). In the cited case, the Second Circuit held that a limitation clause was valid if the shipper “in fact could have secured a higher valuation on paying a higher freight,” and concerning the necessary proof, the court explained:
The clause in the Isbrandtsen bill of lading expressly provides that the shipper may avoid the limitation by declaring in writing the nature of the goods and a higher valuation, paying extra freight. Such a provision is prima facie evidence of what it recites. The [shipper] was at liberty to show the falsity of the recit-al____
Isbrandtsen, 201 F.2d at 285 (citations omitted). More recently, the Second Circuit summarized its view of the law following Isbrandtsen: “If the carrier succeeds in demonstrating fair opportunity, the burden of proof shifts to the shipper to demonstrate that a fair opportunity did not in fact exist.” General Elec., 817 F.2d at 1029. According to these cases then, the carrier must present some evidence of fair opportunity before the shipper is required to come forward with its evidence that no opportunity existed. Our statements concerning the shipper’s burden of proof in Peisander and Stuttgart Express are not inconsistent with this rule; in both of those cases, we first looked for evidence that the carrier offered the shipper a choice of rates and valuations. In this case, because the carrier did not make its threshold showing, the shipper’s burden of proof is irrelevant. Thus contrary to Jugolinija’s assertions, a failure of proof by Coutinho would not entitle Jugolinija to limited liability.
B. The Carrier’s Liability
Having resolved the limitation issue adversely to Jugolinija, we reach the issue raised in its cross-appeal: whether the district court erred in finding that the cargo was delivered to the ship in good condition. Although we must review a district court’s factual findings under a clearly erroneous standard, see Fed.R.Civ.P. 52(a), Jugolinija essentially challenges the district court’s finding on a legal ground. After carefully considering Jugolinija’s argument, we find ourselves unwilling to disturb the district court’s decision.
Jugolinija contends that the district court erroneously focused its inquiry concerning the coils’ preshipment condition on evidence of rust and ignored evidence of other physical irregularities, such as manufacturing defects which were discovered when the coils were later tested and mechanical damage which was observed during loading. Jugolinija argues that such damaged goods cannot by definition be in “good” condition. In reply, Coutinho is willing to admit that some coils had broken bands and that some had indents or cuts. Coutinho notes, however, that it sought damages because wetting of the cargo during carriage aboard the SAVA allegedly caused heavy rusting of the steel; therefore, it argues, only evidence of rust was relevant in determining the coils' preshipment condition. We agree. In the only case relied on by Jugoli-nija to support its position, the court stated that a plaintiff seeking to recover for damaged cargo must show that the goods were delivered to the carrier “free of the damage for which recovery is sought.” Caemint Food, Inc. v. Brasileiro, 647 F.2d 347, 355 (2d Cir.1981). In this case, because the alleged injury that occurred during shipment was rusting, the relevant aspect of the coils' condition was the presence of rust. Jugolinija does not challenge the district court’s finding that the coils were delivered to the carrier free of rust. Thus we must conclude that the coils were in “good” condition when the carrier received them.
III.
For the above reasons, we AFFIRM the judgment as to liability, REVERSE the judgment as to the limitation of liability, and REMAND the case for a determination of damages. Costs of this appeal will be taxed against appellees/cross-appellants, Jugolinija.
. The complaint and thus the caption of the case reflect an incorrect spelling of "Coutinho.”
. Initially, Coutinho also sued SCNO Barge Lines, Inc. and three barges, which transported the steel coils from New Orleans to Chicago, but those defendants were voluntarily dismissed.
. As explained by the district court, a steel manufacturer generally prepares sheets of steel for shipping by coating each sheet with oil to guard against atmospheric rust, rolling the sheet into a coil, wrapping the coil in water resistant paper, encasing the coil in "waster” sheets made of substandard steel, securing the coil with bands, and finally, sealing the can-like package with edge protectors. The district court also explained rust: Galvanized steel is by its nature rust resistant, but it may rust white; cold rolled steel rusts red. Ordinary atmospheric rust is powdery and often covers the entire waster sheet; it does not indicate rust on the coil itself and is so common that many vessels use a rubber stamp to note it on bills of lading. Condensation may leave drops of water on the steel’s surface and cause “blister” rust, resembling a popped blister; extremely heavy condensation, precipitation, or "ship sweat" causes "rundown" rust in a vertical streaked pattern.
. The court also relied on our statement in C.A. Articulos Nacionales de Goma v. M/V Aragua, 756 F.2d 1156, 1157 n. 1 (5th Cir.1985), that the limitation of liability provision "is available to the carrier whether the provision was actually included in the contract or not.” In that case, the issue before us was whether the maritime doctrine of deviation might deprive the carrier of COGSA’s limitation of liability; the shipper’s opportunity to declare the value of the goods was unquestioned.
. Coutinho actually frames a more complex issue divided into subparts. Although we state the issue more simply, we address each of the arguments raised in Coutinho’s appellate brief. We do not, however, find it necessary to address the arguments in Coutinho’s reply brief. In response to Jugolinija’s assertion that the shipper bears the burden of proving fair opportunity, Coutinho argues that the ultimate burden of persuasion rests at all times with the carrier and that we have spoken of the shipper’s burden of proving fair opportunity only in the sense of a burden of producing evidence. For reasons that appear below, our analysis reaches only the nature of the carrier’s initial burden, and we leave the definition of the shipper’s burden for another day.
. In Peisander, we pointed out that the bill of lading expressly incorporated COGSA by a Clause Paramount and that, "more significantly," the carrier's tariff “very carefully” gave the shipper a choice. 648 F.2d at 424. Our opinion in Stuttgart Express does not indicate that the bill of lading referred to COGSA at all; instead, we relied on the fact that “[t]he option to increase valuation by declaration and paying a higher freight was clear in the tariff which was in terms incorporated into the bill of lading." 711 F.2d at 622. The facts of these cases reveal that we have not held, despite the district court's conclusion, that the mere incorporation of COG-SA into a bill of lading constitutes prima facie evidence of fair opportunity. Because that circumstance is not before us in this case, we express no opinion on the issue.
. Apparently, the district court extracted this rule from our discussion of the Ninth Circuit’s approach in Tessler Bros. v. Italpacific Line, 494 F.2d 438, 443 (9th Cir. 1974), and from our application of the rule stated in Tessler to the facts there before us. See Peisander, 648 F.2d at 424 ("the circumstances of the case before us do not overcome the prima facie evidence of the opportunity for a choice of rates and valuations”).
. Moreover, Jugolinija's argument suggests that its real concern is that Coutinho will seek to prove actual damages by showing the cargo's reduction in value from "prime’’ material, rather than showing the decrease in value attributable to rust. Because the district court limited Coutinho’s recovery, the court did not determine the amount of damages above $500 per coil. Therefore, to the extent that Jugolinija fears that a finding, of "good” condition will result in an improper measurement of damages and wrongly create liability for defects other than rust, Jugolinija’s argument is premature and should be directed to the district court at the proper time.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
We vacate a pretrial restraining order freezing certain of defendant Floyd’s assets that were untainted by the alleged criminal offenses, persuaded that the forfeiture statute does not authorize their restraint before conviction. We do not reach the government’s cross-appeal contending that insufficient sums were restrained. We find our jurisdiction under 28 U.S.C. § 1292(a)(1).
I.
Charles G. Floyd, Jr. is the former President and CEO of United Bank. His eode-fendant Thomas Merrill Gaubert was a real estate developer who borrowed money from United Bank. The indictment alleges that as part of a conspiracy between Floyd and Gau-bert the bank loaned $1.96 million to Gaubert for a payoff of $450,000 to Floyd. These loans, and there were four, were allegedly in excess of the bank’s lending limits. The indictment also charges that Floyd and Gau-bert disguised the loans by making them to four entities controlled by Gaubert, by failing to make the required disclosures to the bank, and by making false and misleading statements about them.
The government first sought an ex parte order, pursuant to 18 U.S.C. § 982(b)(1)(A), seeking to restrain certain named assets and asking for a general restraint of Floyd’s right to dispose of other assets. The district court partially granted this application, ordering Floyd to repatriate sums of $259,331 and $142,388 previously transferred to a bank in Liechtenstein. The $259,331 were proceeds from the sale of Floyd’s homestead, and the government concedes that none of the assets it has attempted to restrain were derived from or connected to Floyd’s alleged criminal activity. As a result, Floyd paid these sums, totalling $401,719, into the Registry of the Court.
Thereafter, the government sought a protective order under 21 U.S.C. § 853(e)(1)(A) to restrain Floyd’s assets up to $1.96 million, urging that this amount was subject to forfeiture in the event of conviction under 18 U.S.C. § 982(a)(1) or (2) and further that because Floyd does not possess this tainted money the restraining order could also apply to substitute assets under 21 U.S.C. § 853(p). After first deciding that § 853 allows the pretrial restraint of substitute assets, the district court granted the government’s motion but only to the extent of $450,000 in substitute assets, ruling that the full $1.96 million could not be restrained because it was not persuaded of a substantial likelihood that this amount would be forfeitable upon conviction. 814 F.Supp. 1355. The effect of this decision was to require Floyd to pay an additional $48,281 into the Registry of the Court. The district court then denied Floyd’s request to use the funds for living expenses and attorneys’ fees. Floyd appeals the orders restraining $450,000 in substitute assets and denying use of the funds for expenses. The government appeals the court’s refusal to restrain the full $1.96 million.
II.
A.
The first question is our jurisdiction over these appeals. Floyd relies on the collateral order exception to 28 U.S.C. § 1291, see Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), and § 1292(a)(1), which allows the interlocutory appeal of injunctions. The government contends that the order restraining $450,000 is final under § 1291 only to the extent it denied restraint of the full $1.96 million, allowing it to appeal but not Floyd. The government also seeks a writ of mandamus. We find jurisdiction over both appeals under § 1292(a)(1).
In United States v. Thier, 801 F.2d 1463 (5th Cir.1986), we reached the merits of the defendant’s Fifth and Sixth Amendment challenge to a restraining order under § 853(e)(1)(A) without discussing jurisdiction. In United States v. Jenkins, 974 F.2d 32 (5th Cir.1992), we accepted jurisdiction over a district court’s denial of a motion to dissolve a pretrial restraining order issued under 18 U.S.C. § 1963(d) in a RICO conspiracy prosecution. We relied on Thier for the proposition that “[ujnder the law of this circuit, the district court’s denial of Jenkins’ motion is an interlocutory order refusing to modify or dissolve an injunction, and, as such, is immediately appealable under 28 U.S.C. § 1292(a)(1).” Id. at 34. We are not alone in holding that pretrial asset restraining orders are appealable as “injunctions” under § 1292(a)(1). United States v. All Assets of Statewide Auto Parts, Inc., 971 F.2d 896, 900-01 (2d Cir.1992); United States v. Roth, 912 F.2d 1131, 1132-33 (9th Cir.1990); see also United States v. Kramer, 912 F.2d 1257, 1259 (11th Cir.1990) (stating that restraining orders under the RICO statute “have all the indicia of a traditional injunction for purposes of appellate review”); cf. United States v. Unit No. 7 and Unit No. 8, 853 F.2d 1445, 1448 (8th Cir.1988) (finding jurisdiction over civil forfeiture under § 1292(a)(1) and jurisdiction over criminal forfeiture under the collateral order doctrine).
B.
Our jurisdiction under § 1292(a)(1) to review the district court’s restraining order does not encompass Floyd’s contention that Count 10 fails to state an offense. See Jenkins, 974 F.2d at 34 (“[a]s a general rule, courts of appeals should conduct only a limited review in interlocutory appeals, and should address only the propriety of the orders that gave rise to the appeal”). Moreover, we have no interlocutory appellate jurisdiction over an attack on the sufficiency of the indictment. Abney v. United States, 431 U.S. 651, 663-64, 97 S.Ct. 2034, 2042-43, 52 L.Ed.2d 651 (1977); United States v. Miller, 952 F.2d 866, 874 (5th Cir.1992). Floyd, nevertheless, urges us to consider this claim because, the argument goes, the district court’s asset-restraining order necessarily depends on the sufficiency of Count 10, and if Count 10 is insufficient we must reverse the restraining order. We are not enticed by this proffered easier path to decision. The sufficiency of the indictment can be examined adequately in any appeal from a final judgment.
III.
Both parties challenge the district court’s restraining order. Floyd argues that the government lacks the statutory authority to restrain untainted assets before conviction and in any event the government failed to prove the forfeitability of $450,000, and finally that the restraint of assets in this case violates the Fifth and Sixth Amendments. The government argues that the district court misapplied the statute to preclude restraint of the full $1.96 million. We do not reach the government’s argument because we agree with Floyd that § 853 does not allow the restraint of substitute assets before conviction.
Section 853(e)(1)(A) is the source of any authority for the pretrial restraint of assets:
Protective Orders
(1) Upon application of the United States, the court may enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described, in subsection (a) of this section for forfeiture under this section—
(A) upon the filing of an indictment or information charging a violation of this subchapter or subchapter II of this chapter for which criminal forfeiture may be ordered under this section and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section ...
(emphasis added). The parties agree that § 853(a) does not include substitute assets. Section 853(p) allows the forfeiture of substitute property if the property described in subsection (a) is unavailable for one of five listed reasons. The question is whether the government may restrain substitute assets before conviction under § 853(e) notwithstanding that provision’s explicit reference to the property described in § 853(a). We hold that it cannot.
The government, as did the district court, relies on the reasoning of In re Billman, 915 F.2d 916, 920-21 (4th Cir.1990). In Billman, the Fourth Circuit interpreted the RICO forfeiture provisions, identical in all relevant respects to the provisions of § 853 involved here, to allow the pretrial forfeiture of substitute assets. The court in Billman read § 853(e)(1)(A) and § 853(p) together “to preserve pending trial the availability for forfeiture of property that can be forfeited after trial.” Id. at 921. The Fourth Circuit also found support from the Supreme Court in Russello v. United States, 464 U.S. 16, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983), and United States v. Monsanto, 491 U.S. 600, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989). In Russello, the Court recognized that the RICO forfeiture statute directs that its provisions “shall be liberally construed to effectuate its remedial purpose.” 464 U.S. at 26-27, 104 S.Ct. at 302-03. According to the Fourth Circuit, the Supreme Court in Monsanto reached its conclusion that forfeiture under § 853 does not include an exception for the payment of attorneys’ fees by reading the provisions of the statute together instead of in isolation. Billman, 915 F.2d at 921.
Whatever the ultimate soundness of Bill-man, we are not persuaded that it can fairly support the contended-for restraint of property. We find that the statute controlling the restraint before us plainly states what property may be restrained before trial. Congress made specific reference to the property described in § 853(a), and that description does not include substitute assets. Congress treated substitute assets in a different section, § 853(p). To allow the government to freeze Floyd’s untainted assets would require us to interpret the phrase “property described in subsection (a)” to mean property described in subsection (a) and (p). Like the RICO statute at issue in Russello, Congress also included a directive in § 853 that “[t]he provisions of this section shall be liberally construed to effectuate its remedial purposes.” 21 U.S.C. § 853(o). However, this command for a liberal construction does not authorize us to amend by interpretation. Monsanto gives no such license. Rather it counsels against such “glossing.” Interpreting the same statute at issue here, the Monsanto Court refused to find an exception for attorneys’ fees where Congress had not provided one and concluded by saying, “[i]f ... we are mistaken as to Congress’ intent, that body can amend this statute to otherwise provide. But the statute as presently written, cannot be read any other way.” 491 U.S. at 612, 109 S.Ct. at 2665. We also cannot read § 853(e)(1)(A) any other way.
The government also argues that its interpretation harmonizes § 853(e) with § 853(f). Subsection (f) requires a court to issue a warrant of seizure upon the government’s request if the court determines there is probable cause to believe the property would be forfeitable upon conviction and an order under subsection (e) would be insufficient to protect the availability of the property. The government argues that if it cannot restrain substitute assets, it can simply obtain a warrant under subsection (f) to seize these assets. The argument continues that Congress could not have intended that the government must seize substitute assets before trial. This argument ignores the reality that a warrant is available to seize property covered by subsection (e) when its procedures are inadequate. It is not available for any asset of any type. Subsection (e) does not apply to substitute assets. The government’s contention that it has the power to seize property that is not evidence of a crime nor the fruits of a crime hints of writs of assistance. At the least it poses Fourth Amendment concerns sufficient to avert any temptation we might have to engage in interpretative handsprings to effectuate a legislative purpose the Congress did not express.
REVERSED.
. Floyd was charged with numerous offenses in a twelve count indictment. Count 1 charges Floyd and Gaubert with conspiracy to defraud the OCC and to commit various offenses against the United States in violation of 18 U.S.C. § 371. Count 2 charges Gaubert with corruptly giving $450,-000 to Floyd in connection with Floyd securing from United Bank four loans of $490,000 (totalling $1.96 million) in violation of 18 U.S.C. § 215. Count 3 charges Floyd with corruptly accepting the $450,000 payoff in violation of 18 U.S.C. § 215. Count 4 charges Floyd with unlawfully receiving $450,000 of the bank's money through the alleged payoff in violation of 18 U.S.C. § 1005. Counts 5-8 charge Floyd with four counts of misapplying bank funds, each pertaining to the $490,000 loans, in violation of 18 U.S.C. § 656. Count 9 charges Gaubert with money laundering by depositing in another bank a $640,000 portion of the illegal loans in violation of 18 U.S.C. § 1957. Count 10 charges Floyd with money laundering by the use of the $450,000 payoff to obtain a cashier’s check from another bank in violation of 18 U.S.C. § 1957. Count 11 seeks forfeiture under 18 U.S.C. § 982(a)(1) from Floyd and Gaubert of property "involved in” the offenses, specifically the $450,-000 cashier’s check and the remainder of the $640,000 deposited in another bank, including substitute assets to the extent the criminally derived property is unavailable. Finally Count 12 seeks forfeiture under § 982(a)(2) of property "obtained directly or indirectly” by Floyd and Gaubert up to $1.96 million including substitute assets.
. § 1292. Interlocutory decision
(a) Except as provided in subsections (c) and (d) of this section, the courts of appeals shall have jurisdiction of appeals from:
(1) Interlocutory orders of the district courts of the United States ... granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions
. 18 U.S.C. § 982 is the general criminal forfeiture statute. Section 982 incorporates certain subsections of 21 U.S.C. § 853. 18 U.S.C. §§ 982(b)(1)(A) and (B).
. (a) Property subject to criminal forfeiture
Any person convicted of a violation of this subchapter or subchapter II of this chapter punishable by imprisonment for more than one year shall forfeit to the United States, irrespective of any provision of State law — •
(1) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation;
(2) any of the person’s property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such violation; and
(3) in the case of a person convicted of engaging in a continuing criminal enterprise in violation of section 848 if this title, the person shall forfeit, in addition to any property described in paragraph (1) or (2), any of his interest in, claims against, and property or contractual rights affording a source of control over, the continuing criminal enterprise.
The court, in imposing sentence on such person, shall order, in addition to any other sentence imposed pursuant to this subchapter or subchapter II of this chapter, that the person forfeit to the United States all property described in this subsection. In lieu of a fine otherwise authorized by this part, a defendant who derives profits or other proceeds from an offense may be fined not more than twice the gross profits or other proceeds.
. (p) Forfeiture of substitute property
If any 'of the property described in subsection (a) of this section, as a result of any act or omission of the defendant—
(1) cannot be located upon the exercise of due diligence;
(2) has been transferred or sold to, or deposited with, a third party;
(3) has been placed beyond the jurisdiction of the court;
(4) has been substantially diminished in value; or
(5) has been commingled with other property which cannot be divided without difficulty;
the court shall order the forfeiture of any other property of the defendant up to the value of any property described in paragraphs (1) through (5).
. The analogous provisions of RICO are 18 U.S.C. §§ 1963(a), (d)(1)(A), and (m).
. Moreover, the Court's reading of § 853(e)(1)(A) appears to be consistent with ours. In Monsanto, the Court stated "§ 853(e)(1)(A) is plainly aimed at implementing the commands of § 853(a).” 491 U.S. at 612, 109 S.Ct. at 2665.
. (f) Warrant of seizure
The Government may request the issuance of a warrant authorizing the seizure of property subject to forfeiture under this section in the same manner as provided for a search warrant. If the court determines that there is probable cause to believe that the property to be seized would, in the event of conviction, be subject to forfeiture and that an order under subsection (e) of this section may not be sufficient to assure the availability of the property for forfeiture, the court shall issue a warrant authorizing the seizure of such property.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
HICKS, Circuit Judge.
Action under the Federal Employers’ Liability Act (title 45, U. S. Code, c. 2, §§ 51—59 [45 USCA §§ 51-59]) by Elizabeth Reid, administratrix of the estate of James A. Reid, against Grand Trunk Western Railway Company, to recover damages for his death. Judgment for plaintiff, and- the defendant appealed.
Appellant owns and operates a doubletraek railroad running approximately east and west through Lapeer, Mich. Court street crosses these tracks in an approximately north and south direction. The crossing is of plank with a board sidewalk on either side. The passenger station is on the north side of the west-bound track and somewhat more than 400 feet east of Court street. The freighthouse is slightly northwest of the passenger station. West of the crossing the house track branches from the west-bound main, and, gradually diverging therefrom, runs over the crossing and to the freight-house. The frog of the switch is 48 feet west of the center of the crossing and the point about 50 feet farther west. The plank crossing has an average width of 35% feet. Deceased, 36 years old, an experienced brakeman, was a member of a train crew consisting of Conductor Franklin, Engineer Shattuek, Fireman French, and Brakemen Reynolds, Carey, and himself. They operated a local freight train, and on November 4, 1925, the date of Reid’s death, they were bound east. At Lapeer it was their custom-to do the switching necessary to place loaded cars to be picked up by through freights. In these operations deceased “followed the engine,” that is, it was his duty to couple and cut off ears and give signals. On the above date a flat car loaded with machinery and two refrigerator cars loaded with potatoes stood upon the house track by the freight-house. At noon the crew, then consisting of the engineer, fireman, and Brakemen Reid and Carey, pushed three loaded gondola coal cars from the west main in upon the house track, coupled them to the flat or machinery ear and refrigerator cars and pulled the cut of cars so constituted out of the house track and on to the west main. After these cars cleared the switch they were shoved east along the west main until the west end of the west refrigerator ear was on the crossing. There deceased cut off the refrigerator cars. The west main was down grade'toward the station, and there is evidence tending to show that the refrigerator ears, after being cut off, rolled until stopped by the brakes put on by Carey from the top of one of the refrigerator cars. They rolled a short distance only because when they stopped the west end of the west refrigerator ear, accepting appellee’s evidence as true, was approximately, if not quite, at the center of the crossing. At a signal from deceased, who was on the engineer’s side, the train then backed up until it was west of the switch. Deceased crossed the track to the switch stand, turned the switch, returned to the south side, signaled the engineer forward, and climbed upon .the flat car at its southeast corner. The record fails to disclose clearly whether he rode on top or stood in the stirrup at the side of the car, hut from subsequent developments we infer that he stood on top and rode facing east as he would naturally do in the discharge of his duty as a lookout until the flat car reached the freighthouse, where he cut it off and left it. He then signaled the engineer to back up, walked the length of the first coal car, climbed to the stirrup on the east end and south side of the second coal ear, and, standing with his body at an angle of about 45 degrees, rode in this position, looking east, until the back of his head struck the northwest comer of the west refrigerator ear, when he was knocked off and under the coal cars and killed.
We consider only the assignments of error discussed in appellant’s brief.
We think deceased was killed while engaged in interstate commerce. The refrigerator or potato cars were destined for points beyond the state. Their movement was halted for a few minutes only upon the westbound main until the flat car could be returned to the freighthouse. This having been done, the train on which deceased was riding when killed was returning to the west main for the purpose of picking up the potato ears and placing them upon the “pickle” or passing track, there to become a part of a through train and thus-to continue upon their interstate journey. L. & N. R. Co. v. Parker, 242 U. S. 14, 37 S. Ct. 4, 61 L. Ed. 119; Sullivan v. Wabash Ry. Co., 23 F.(2d) 323, 324 (C. C. A. 6).
Appellee’s case was based upon the alleged negligence of Brakeman Carey in stopping the refrigerator or potato ears too near the house track for clearance. There is evidence tending to show that Carey was negligent in this particular; that from the point upon the north rail of the west-bound main where the west end of the west refrigerator car stopped to the south rail of the house track was 64 inches. The overhang of the refrigerator ear was 27 inches and that of the gondola. coal ear 31 inches, excluding the grabirons or ladders on both ears. This would leave a clearance at the point indicated of 6 inches, less the ladders and grabirons, which of course decreased and increased toward the west and east respectively. Carey knew that the coal ears and flat car were to be returned to the freighthouse in charge of deceased, and that the coal ears were to be again pulled to the west-bound main. He might reasonably have anticipated that deceased would ride upon the south or engineer’s side, the better to give signals; that he probably would be “leaning out as a man naturally rides on a ear,” and that riding there his body would not clear the refrigerator ears.
But appellant insists that the deceased assumed the risk, and, upon the uneontroverted facts, we think he did. He had been a brakeman upon this run for more than two years. During this period he had almost daily engaged in switching operations over this same switch and in the same manner. He was thoroughly acquainted with the general situation. He of course knew the overhang of the cars. He was necessarily a short distance only from the refrigerator cars when they were stopped upon the crossing, and it is difficult to conceive that he, being in charge, did not then note their proximity to the house track, but, however that may be, a few moments later he, while riding upon the top of the southeast corner of the flat ear (if he had then been clinging to the side his body would 'not have cleared), passed immediately by the refrigerator ears, and we cannot escape the conclusion that he, whose duty it was to be upon the lookout, saw and appreciated, or must be charged with seeing and appreciating, that which was obvious, to wit, that the insufficient clearance would endanger the safety of any brakeman who would undertake to ride by while leaning out. We think, therefore, that appellant’s motion for a directed verdict should have been sustained. Gila Valley Ry. Co. v. Hall, 232 U. S. 94, 102, 34 S. Ct. 229, 58 L. Ed. 521; C. & O. Ry. Co. v. Proffitt, 241 U. S. 462, 468, 36 S. Ct. 620, 60 L. Ed. 1102; Seaboard Air Line R. Co. v. Horton, 233 U. S. 492, 504, 34 S. Ct. 635, 58 L. Ed. 1062, L. R. A. 1915C, 1; C., N. O. & T. P. Ry. Co. v. Thompson, 236 F. 3, 7 (C. C. A. 6); N. Y., C. & St. L. Ry. Co. v. McDougall, 15 F.(2d) 283, 284 (C. C. A. 6); Davis v. Crane, 12 F.(2d) 355, 357 (C. C. A. 8). It is of no avail that the deceased may have momentarily forgotten the danger of the situation. Jacobs v. Southern Ry. Co., 241 U. S. 229, 236, 36 S. Ct. 588, 60 L. Ed. 970; N. Y., C. & St. L. Ry. Co. v. McDougall, supra.
The same result would also follow upon another theory of fact to which the evidence lends color, to wit, that the west end of the west refrigerator ear was stopped by Carey far enough east of the center of the crossing to allow sufficient clearance for deceased only if he had stood up straight. If such situation existed, it was plainly observable to deceased as he passed immediately by it going east, and, if upon his return he leaned out too far and was struck, it was a risk assumed. Sou. Pac. Co. v. Berkshire, 254 U. S. 415, 418, 41 S. Ct. 162, 65 L. Ed. 335; Toledo, St. L. & W. R. Co. v. Alien, 276 U. S. 165, 171, 48 S. Ct. 215, 72 L. Ed. 513.
We find no prejudicial error in the admission of the testimony of the expert witness, Chapoton, touching the general custom by which brakemen determine the clearance of cars, and the matter of undue prolongation of the deliberations of the jury will probably not occur upon another trial.
The result is the judgment of the District Court is reversed, and the ease remanded for a new trial.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
TUTTLE, Senior Circuit Judge:
This is an appeal from a grant of summary judgment by the trial court in favor of the plaintiff, a former officer in the Bureau of Police Services of the City of Atlanta against the Commissioner of Public Safety. The judgment was based on a determination by the trial court that, although the Commissioner had legal authority to hire and fire officers of the Bureau of Police Services of the city, his right to fire the plaintiff Edwards could not be exercised by him until “after trial” by virtue of Section 11-2031 of the Code of Ordinances of the City of Atlanta.
A brief statement of the case enables us to focus on the only issue before us: Does Section 2031 or the due process clause of the Constitution give every officer of the Bureau the right to a trial before he may be discharged by the Commissioner?
There is no dispute that Edwards was a Major in the Bureau on December 10. He had become an employee of the Bureau in 1961, but resigned from the force in 1968 to take a job in the Department of Finance of the City. In 1971, he returned to the Bureau in the civilian, non-swom position of criminal justice planner. That position was later reclassified by the City Council to the position of police major in 1972, a “sworn” position. Appellee took that position and was later promoted to deputy director in 1978. In August 1979, he was transferred back to the rank of major and remained in that rank until the time of his termination. On December 10, 1979, Edwards delivered to Commissioner Brown a letter resigning or taking early retirement to be effective December 31, 1979. The letter contained twelve paragraphs highly critical of the operation of the Bureau of Police Services and Department of Public Safety. Considering that the letter contained unwarranted accusations of wrongdoing and that Edwards had lost his effectiveness as an officer in the department, Brown sent Edwards a copy of the following “personnel action:”
Pursuant to the authority invested in me under Section 11-2001 of the Code of Ordinances of the City of Atlanta, Major D.M. Edwards is removed from the rank of major, effective immediately. December 10, 1979 is his last working day.
s/ Lee P. Brown
Commissioner, Department of Public Safety
Effective date 12/10/79
Thereafter, Edwards wrote a letter purporting to withdraw his December 10 letter of resignation and subsequently filed a grievance in which he treated the notice to him of December 10 as a notice of discharge. The grievance procedure was not followed in accordance with the requirements of the City Code and Brown notified the officer that, as final arbiter, he ruled against the grievance.
The cited Section 11-2001 in the December 10 notice to Edwards provides as follows:
The commissioner of public safety, referred to in this chapter as “commissioner,” or his designee, is hereby authorized, in his discretion, to make assignments to the positions of detective, major and deputy director within the bureau of police services, without reference to competitive examinations or eligible lists. Any detective, major or deputy director so designated may be removed or transferred at the pleasure of the commissioner. Such person so removed or transferred shall thereupon reassume the rank or title in the bureau of police services held immediately prior to his or her assignment under this section.
Although this provision does not speak in terms of discharging an employee from the department or bureau completely, but only in terms of a removal or transfer at the pleasure of the commissioner, it is apparent that the commissioner thought that under this provision he had the power to discharge Edwards from the service. The district court concluded that since Edwards had held the position of deputy director immediately before his appointment to the position of major in the Bureau the absolute power of the Commissioner to “remove” Edwards automatically entitled him to reassume the rank of deputy director and that the action of the Commissioner in actually terminating Edwards’ service in the Bureau amounted to a “discharge” which could be accomplished only under Section 11-2031 of the City Code. That section provides:
The director, and other officers of the bureau shall be appointed by the Commissioner to serve without any fixed term of employment and subject to the terms of these provisions and other applicable laws and regulations. They shall serve during good behavior and efficient service, to be judged by the Commissioner or a designee. They may be discharged, after trial as provided by law or regulation.
The trial court construed this statute to provide that Edwards could be discharged only after a trial.
The appellant contends that Section 11-2031 limits the power of the Commissioner to discharge such an employee only to the extent that where appropriate law or regulation provides for a trial for such employee he can be discharged only after such a trial. Appellant asserts that there is no law or regulation that makes provision for a trial before discharge of an officer in the position of deputy director of the Bureau of Police Services.
In order for the appellant’s construction of the code section to be acceptable to us, it seems necessary for us to find some provision in the applicable law or regulations that makes provision for a trial for some employees covered by the City’s personnel regulations. Brown points to such a regulation. He points to Section 11-1010, the section setting out the grievance procedures for the Bureau of Police Services, as answering the question whether pre-discharge trial proceedings are provided for any employee of the Bureau. That section prescribes narrowly constructed day-by-day progression of a grievance from the employee to his or her immediate supervisor and thence, unless, as in this case, the supervisor is himself the bureau chief, to that official, and thence to the Commissioner as a final arbiter for resolution of the grievance. This section then contains the following significant provision:
The final paragraph of the commissioner’s letter will differ significantly depending upon the grieving employee’s sworn/non-swom status:
1. If the grieving employee is sworn, the last paragraph will advise the grievant that the commissioner’s decision is not subject to any further administrative appeal, but that the grievant could seek redress in the civil courts on his/her own initiative and expense. Copies of this letter will be distributed to the bureau director/chief, the immediate supervisor, the employee’s personnel files, the DP’s legal advisor, and the city attorney’s office.
2. If the grieving employee is non-sworn, the last paragraph will advise the grievant that the commissioner’s decision could be appealed to the civil service board as per civil service rules and regulations. Copies of this letter will be distributed to the commissioner, the bureau director/chief, the deputy director, the immediate supervisor, the employee’s personnel file, the DPS legal advisor, the city attorney’s office, and the civil service board.
In this case, the grieving employee is sworn. Thus, his rights are “significantly” different from the rights of a non-sworn employee who is given the right to appeal to the civil service board. Such an appeal, under personnel regulations of the city, as found in Chapter XIX, Grievance and Appeal Procedures, gives to the employee the “right to be represented before such board by any individual of such employee’s choice.” This then, Brown contends, is the situation contemplated under Section 11— 2031 where such an employee cannot be discharged without a trial. It applies only to non-sworn officers.
The need to construe this section is apparent, since all parties agree that this action under 42 U.S.C. § 1983 can be sustained only by showing that Edwards was discharged by state action in a manner that denied him a right to due process under the Fourteenth Amendment to the Constitution of the United States. The parties also agree that in order to prevail Edwards must show that he had what amounts to tenure in his job, that is an individual property interest in his continued employment. The parties also agree that it is necessary to look to state law to define such individual’s property interest. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972). See also Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976).
If the trial court correctly interpreted Section 11-2031 as requiring a trial before any employee of the Bureau of Police Services could be discharged, then we would agree that the ordinance did create such property interest in Edwards’ continued employment until he had been given the opportunity to have a trial. However, we accept the position stated by the appellant to the effect that a trial is guaranteed only to those persons as to whom “trial [is] provided by law or regulation.” We conclude therefore that nothing in the ordinance or regulations requires any trial by virtue of the provisions of Section 11-2031.
We must still consider, however, whether under the terms of his employment that he “shall serve during good behavior and efficient service, to be judged by the commissioner or a designee,” Edwards had a reasonable expectation of continued employment until there had been a determination after notice and hearing that he had not measured up to the objective standards of “good behavior and efficient service.”
The Court of Appeals for the Fifth Circuit, by whose opinions we are bound has held that “the Georgia Supreme Court has held that the civil employment which allows termination only ‘for cause’ creates an expectation of continued employment that is constitutionally protected.” Glenn v. Newman, 5 Cir., 614 F.2d 467, 471, citing Brown-lee v. Williams, 233 Ga. 548, 212 S.E.2d 359, and the court then stated that where a discharge could be effected only for certain named grounds “the specified reasons listed in the regulations are meant to be analogous to allowing termination only ‘for cause.’ ” Id. at 471. See also Thurston v. Dekle, 5 Cir., 531 F.2d 1264 at 1273. We conclude, therefore, that Edwards could be discharged only for cause.
Here, however, there is something more than the right of the commissioner to discharge for cause, since following the statement of the standards of “good behavior and efficient service” in the ordinance are the words “to be judged by the commissioner or a designee.” Such language seems clearly to indicate the purpose of the city in its ordinance to give directions to the commissioner that, although he could discharge only for the stated reasons, he was the person in whom was placed the power to determine whether the reasons existed. It would have been a simple matter for the sentence to have continued after the words “to be judged by the commissioner or a designee” by such words as “after notice and hearing” or “after trial” if that had been the purpose of the ordinance. Since, under Georgia law, a person holding such a position as that filled by Major Edwards could be discharged “at the will” of the commissioner if so provided by ordinance, Bailey v. Dobbs, 227 Ga. 838, 183 S.E.2d 461 (1971), we conclude that Edwards could be discharged under the peculiar language of this ordinance when the latter “judged” him not to have acted consistent with “good behavior and efficient service.” Instead of providing for a discharge for cause, we equate this provision with a discharge “at the will” of the commissioner. Under such circumstances, as stated by the Georgia court in Wright v. Gamble, 136 Ga. 376, 378, 71 S.E. 795 (1911), “in such a case no formality such as the preferring of charges against, or the grant of a hearing to the incumbent, are necessary to the lawful exercise of the discretionary power of removal.”
We are compelled, therefore, to conclude that Edwards held no property interest in his position as major or as deputy director of the Bureau of Police in the Department of Public Safety at the time of his discharge. The trial court’s decision that he was entitled to a trial under the ordinance must be reversed. There being no property right in the position otherwise, the judgment must be reversed.
JUDGMENT REVERSED. Remanded with directions to dismiss the complaint.
. We are at a loss to understand what kind of a trial the trial court may have thought Edwards was entitled to, unless it was to be equated with an appeal to the city’s civil service board which is provided for a non-sworn officer. But clearly Edwards was not entitled to that trial, for he was a sworn employee and under the provisions of paragraph 1 of the quoted text above, he is not entitled to that kind of a proceeding.
. This Court looks to the decisions of the Court of Appeals for the Fifth Circuit as binding precedent unless and until overruled or modified by this Court en banc. Bonner v. City of Pritchard, Alabama, et al., 661 F.2d 1206 (11th Cir.1981).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
ENGEL, Circuit Judge.
This Title VII litigation had its genesis when charging parties Carol Ross and Melissa Hanna applied to the Monarch Machine Tool Company (Monarch) in Sidney, Ohio, for jobs as general laborers and were rejected. Both women filed a charge of sex discrimination with the Equal Employment Opportunity Commission (EEOC) on the same day. The EEOC brought suit against Monarch and Local 996, International Association of Machinists, alleging that, from July 2, 1965 to the time of the suit, the company had intentionally engaged in unlawful employment practices, in violation of section 703(a) of Title VII of the Civil Rights Act of 1964, by refusing to hire women for factory work until July, 1974, and thereafter failing to hire women at the same rate as men. In its prayer for relief, the Commission sought a permanent injunction against the discriminatory employment practices, and sought to institute a program to provide equal employment opportunities for women “having the effect of eradicating the defendant’s past and present unlawful practices.” The Commission also requested the court “to order the company to make whole those persons adversely affected by the unlawful employment practices described herein, by providing appropriate backpay, with interest, in an amount to be proved at trial” and to afford “other affirmative relief necessary to eradicate the effects of its unlawful employment practices.”
At trial, it was shown that Monarch had hired no women for factory work until July, 1974. The reason given by the company for this apparent discrimination was its reliance upon Ohio’s female protective statutes, which effectively limited the company’s ability to hire female employees for general labor of the nature required by Monarch. While the Ohio Supreme Court declared that these statutes conflict with Title VII, Jones Metal Products Co. v. Walker, 29 Ohio St.2d 173, 281 N.E.2d 1 (1972), the company sought to establish before the district court that the lack of rest room facilities for women and budget restrictions caused by the company’s financial condition restricted its ability to hire women for factory work until July, 1974, when it acquired temporary rest room facilities.
The EEOC sought a bifurcated trial at which the general allegations of sex discrimination would be established initially with specific relief to be later determined in separate proceedings. The district court, however, without ruling on the viability of class relief, brought the case on for trial on the merits generally. In a written- opinion, the district judge ruled that the company’s reliance upon the lack of rest room facilities was a “subterfuge” and held that Monarch had improperly refused to hire Ross and Hanna because they were women. He thereupon proceeded to award Ross and Hanna backpay from the date the company refused them employment on February 26, 1974, until July, 1974, when Monarch began generally hiring women. The court held that the evidence before it did not indicate that either Ross or Hanna had failed to seek other work'diligently or had earned other wages which would reduce the award of backpay, and accordingly awarded $2,664 to both women, reflecting an hourly rate of $3.70 for an 18-week period. The district judge issued an injunction prohibiting Monarch from committing similar acts of discrimination in the future. The court also dismissed the charges against Local 996. Finally, the district judge held that the Commission had failed to prove that any other females were the victims of discrimination and declined to reopen the proceedings for the presentation of proof to that effect.
I.
At the time this case was tried in the district court, considerable uncertainty existed whether actions brought by the EEOC under Title VII must, if they sought class-wide relief, proceed subject to the specific rules governing class actions set forth in Rule 23 of the Federal Rules of Civil Procedure. The Supreme Court has recently fully resolved that issue in General Telephone Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980). Relying upon the language of Title VII itself, the legislative intent underlying the 1972 amendments to the Civil Rights Act and the enforcement procedures which existed prior to the amendments, the Supreme Court held that Rule 23 is not applicable to an enforcement action brought by the EEOC under section 706. Because it is most apparent that had the trial judge possessed the advantage of the Supreme Court’s ruling in General Telephone Company of the Northwest, supra, at the time of trial, he would have proceeded with the class action aspects of the suit in the manner sought by the Commission, we note at the outset that a general remand is necessary for this purpose.
A number of other issues have been raised by the parties in their cross-appeals. Because the case must in all events be remanded, we also proceed to deal with these issues, finding merit in many of them, and conclude that a vacation of the entire judgment and de novo trial is the means most fairly and efficiently to remedy the errors found herein.
II.
In its cross-appeal Monarch complains that the trial judge, in finding it guilty of sex discrimination, relied upon certain evidence which he requested that the company submit at the close of the trial. Monarch complied, but the district judge did not permit the company to reopen the proof to present any rebuttal evidence concerning the relevance and accuracy of that evidence. Specifically, the district judge at the close of trial requested all of the applications for employment which Monarch received from October, 1973 through October, 1974, stating at the time:
I mean I am not going to have another hearing on this. I’m not taking the position that this is critical information or even dispositive information. I simply want to see it for my own background information, and if counsel wishes to make a copy available to you, I don’t care, but I am not going to require it.
Although the trial judge stated that the applications would not be considered dis-positive, he in fact specifically relied upon this evidence in finding Monarch guilty of discrimination. In our view, it was error for the trial judge to have so considered the evidence without giving Monarch an opportunity for a response, and to have used it for a purpose and to an extent not indicated by him when he requested it.
The circumstances here are not unlike those in Wright v. Southwest Bank, 554 F.2d 661 (5th Cir.1977), where the Fifth Circuit held that it was error for the trial court to have considered evidence which was filed after the parties had completed the presentation of their proof. We agree with the following observation in Wright:
A trial judge, sitting without jury, is entitled to great latitude concerning the admission or exclusion of evidence, but it is error to accept evidence ex parte because it is inherently unfair to allow one party to put evidence before the court without allowing his opponent the opportunity to test its validity.
554 F.2d at 663 (footnote omitted). See also Fireman’s Fund Insurance Co. v. Wilburn Boat Co., 259 F.2d 662 (5th Cir.1958).
Because we are remanding for a trial de novo, Monarch will have an opportunity to present evidence to attempt to explain the information contained in the applications and to dispel the inferences which the district judge drew therefrom. Likewise, the EEOC may wish to offer additional evidence to explain the significance of these applications because it, like Monarch-, was denied the opportunity to address this issue in the district court.
III.
Monarch in its cross-appeal also asserts that the district judge erred in granting general injunctive relief. It argues that such a grant was unnecessary because since July, 1974, Monarch had discontinued any discriminatory hiring practices with respect to female applicants.
As we have noted before, because of our general vacation of the judgment below and remand for new trial, it is not possible to anticipate what may. be the ultimate judgment of the district court on remand. It is true that we have upheld the denial of injunctive relief in other Title VII eases where the evidence showed that, while there may have been discriminatory practices in the past, there was no longer any evidence of such discrimination and such relief was not needed. Donnell v. General Motors Corp., 576 F.2d 1292 (8th Cir.1978). At the same time we have consistently recognized that the matter is one for the proper exercise of judicial discretion. Thus, in EEOC v. New York Times Broadcasting Service, Inc., 542 F.2d 356 (6th Cir.1976), we upheld a district court’s grant of an injunction where the evidence indicated that the employer had in fact discontinued its discriminatory practices. There we observed:
The defendant in its brief and the district court in its opinion rely heavily upon the corrective practices which have been taken by the television station since the filing of Ms. Wilson’s complaint and the filing of the EEOC action in the district court. It may be true that under new management more enlightened attitudes have prevailed and that this has had a distinctly beneficial effect upon employment practices and resulted in a more balanced composition of the staff at the television station. However, we agree with the EEOC that the voluntary changes effectuated by the defendant, as salutary as they may be, do not render moot the questions presented in the litigation or make judicial sanctions inappropriate, Rowe v. General Motors Corp., 457 F.2d 348 (5th Cir.1972); United States v. I.B.E.W., Local 38, 428 F.2d 144 (6th Cir.1970), but are rather more properly considered and must inevitably bear upon the extent of any corrective action to be ordered.
Id. at 361. See also Manning v. International Union, 466 F.2d 812 (6th Cir.1972).
In his conclusions of law, the trial judge here held that “[wjhere charging parties have proved discrimination, such parties are entitled to damages and the Equal Employment Opportunity Commission is entitled to injunctive relief.” To the extent that such a finding endeavors to set forth an inflexible rule, it would in our view be inconsistent with the grant of discretion given a district judge under 42 U.S.C. § 2000e-5(g). We emphasize with respect to injunctive relief that it is fundamentally an exercise of equitable power and we leave to the discretion of the trial judge on remand the final decision whether such relief is appropriate under all the circumstances of the case, if it is shown that the employer has been guilty of the discriminatory practices alleged.
IV.
Although the trial court appears to have determined that Monarch discriminated generally against women on account of their sex during the period in question, it limited individual relief to the two charging parties, finding that proof had been presented only as to them. We conceive that this ruling was primarily the result of the trial judge’s conclusion that the EEOC had failed to comply with Rule 23 as a condition to seeking broader relief. This, of course, has subsequently been held to be unnecessary in Title VII actions brought by the commission. See Part I, supra.
Because the EEOC powers are not limited by Rule 23 and because it never abandoned its right to seek class-wide relief, we believe that the trial should have been bifurcated, if class-wide discrimination was properly found. The burden and order of proof in class actions under Title VII has rather clearly evolved in Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), and more particularly in Franks v. Bowman Transportation Co., 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976). Thus, as pointed out by the Supreme Court in Teamsters, the Commissioner’s burden at the liability stage is:
to demonstrate that unlawful discrimination has been a regular procedure or policy followed by an employer. At the initial, “liability” stage ... the government is not required to offer evidence that each person for whom it will ultimately seek relief was a victim of the employer’s discriminatory policy. Its burden is to establish a prima facie case that such a policy existed.
431 U.S. at 360, 97 S.Ct. at 1867.
If on retrial the trial court finds that a policy of discrimination existed in Monarch’s refusal to hire women for general labor employment, we then agree with the position of the EEOC upon appeal, that such a pattern of discrimination establishes a prima facie case of liability to all women rejected during the period of unlawful exclusion from 1972 to 1974. It further follows that if the district court makes a general finding of discrimination, the burden is upon the company to prove that qualified individual women who applied for available employment openings were rejected for non-discriminatory reasons. Franks v. Bowman Transportation, supra, 424 U.S. at 773 n. 32, 96 S.Ct. at 1268 n. 32.
V.
In awarding backpay to the charging parties Ross and Hanna, the trial judge found that the average hourly rate between February, 1974 and July, 1974 in job level II was $3.70 per hour. The trial judge further found that:
plaintiffs are entitled to damages for the period beginning February 24, 1974, when they were discriminated against because of sex until July, 1974, when defendant ceased discriminating against women applicants. Assuming a pay rate of $3.70 per hour and a 40-hour week, plaintiffs are each entitled to the sum of $148 per week for 18 weeks, or a total of $2,664.00.
Both parties appeal from this finding. Both agree that the hourly rate chosen by the trial judge, $3.70, was incorrect, but disagree as to the appropriate rate. The EEOC claims the rate was $3.18 per hour, the wage which Monarch paid certain male applicants whom the trial judge determined to possess qualifications similar to the charging parties. The company for its part relies upon the collective bargaining agreement, which states that after November 25, 1973, employees at level II earned $2.94 per hour and employees at level III received $3.06 per hour. There is evidence, however, to show that during the same period, the company did in fact pay $3.18 per hour to some of its employees at level II and $3.35 per hour for employees hired at level III. Because both parties agree that the finding of the trial court was wrong but disagree as to the correct figure, the matter remains open for final resolution and reconsideration by the trial judge.
The company further complains that the district judge failed to consider other wages which the women earned or could have earned during that period. In fact the trial judge did make the following finding: “[N]o evidence has been produced as to a lack of diligence of charging parties in seeking other employment, nor has evidence been produced as to actual earnings by charging parties during the time in question.” Both Hanna and Ross testified, however, that they were, in fact, employed during portions of the period for which the district court awarded damages. Carol Ross stated she worked from May, 1974 through February, 1975, earning $2.00 per hour and working forty hours per week. Melissa Hanna testified that she also worked forty hours per week except for certain layoffs and earned $3.70 per hour initially and was, in fact, earning $4.95 at the time of trial. Clearly the interim earnings of the two women should have been ascertained and should have reduced the award of backpay. Upon remand, the district court should take such evidence into account in making an award.
Monarch also complains that Ross did not diligently seek other employment and that her backpay should, therefore, be reduced. The company claims that the fact that Hanna was able to obtain other employment at a wage rate higher than paid at Monarch demonstrates that Ross, who possessed similar qualifications, did not make sufficient effort to locate a job. In support of this proposition, Monarch relies primarily upon Jurinko v. Edwin L. Wiegand Co., 331 F.Supp. 1184 (W.D.Pa.1971). In Jurinko two women successfully proved that they had been refused employment by Wiegand because of discrimination. In awarding backpay, the district judge reduced the award of backpay to one because of evidence that the other had successfully obtained employment. Id. at 1188. In essénce, the company argues that, as a matter of law, the experience of the charging party most successful in obtaining alternate employment should set a standard for awarding backpay to other claimants. We decline to establish such a rule. While evidence of employment opportunities is, of course, relevant to the question of whether a given employee was diligent in seeking alternative employment, we are unwilling to so encumber a statutory scheme which vests discretionary authority in the district judge, to be exercised on the basis of all the relevant facts in each case. Moreover, it is important to remember that once discrimination is shown, the defendant has the burden of proving that the employee did not diligently seek other employment. Kaplan v. International Alliance of Theatrical and Stage Employees, 525 F.2d 1354, 1363 (9th Cir.1975). See Rolfe v. County Board of Education of Lincoln County, Tenn., 391 F.2d 77 (6th Cir.1968).
VI.
Finally, in its appeal, the EEOC maintains that the trial judge erred in cutting off the award of backpay to Ross and Hanna at July, 1974. The trial judge does not articulate his reasons for cutting off the award on that date, but we note that this was the date when Monarch commenced hiring women for the general labor force. Upon the record here, however, we seriously doubt that a backpay cutoff date based upon this factor was justified. Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). The cessation of a general policy of discrimination is not a basis for terminating the award of backpay for prior victims absent equitable considerations which overrule the law’s policy of providing full and adequate relief to those injured by employment discrimination. It is true that some support for the trial judge’s action can be found in Thornton v. East Texas Motor Freight, 497 F.2d 416 (6th Cir.1974), wherein our court upheld the trial court’s refusal to award backpay beyond the date the company ceased its discriminatory practices. Any doubt as to whether the good faith of the employer alone is an adequate basis for denying backpay, however, was in our judgment fully dispelled by Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). In Albemarle the Court wrote:
Where an employer has shown bad faith — by maintaining a practice which he knew to be illegal or of highly questionable legality — he can make no claims whatsoever on the Chancellor’s conscience. But, under Title VII, the mere absence of bad faith simply opens the door to equity; it does not depress the scales in the employer’s favor. If back-pay were awardable only upon a showing of bad faith, the remedy would become a punishment for moral turpitude, rather than a compensation for workers’ injuries. This would read the “make whole” purpose right out of Title VII, for a worker’s injury is no less real simply because his employer did not inflict it in “bad faith.” (footnote deleted). Title VII is not concerned with the employer’s “good intent or absence of discriminatory intent” for “Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation.” Griggs v. Duke Power Co., 401 U.S., [424] at 432, [91 S.Ct. 849 at 854, 28 L.Ed.2d 158]. See also Watson v. City of Memphis, 373 U.S. 526, 535 [83 S.Ct. 1314, 1319, 10 L.Ed.2d 529] (1963); Wright v. Council of City of Emporia, 407 U.S. 451, 461-462, 92 S.Ct. 2196, 2202-2203, 33 L.Ed.2d 51 (1972). To condition the awarding of backpay on a showing of “bad faith” would be to open an enormous chasm between injunctive and backpay relief under Title VII. There is nothing on the face of the statute or in its legislative history that justifies the creation of drastic and categorical distinctions between those two remedies.
Id. 422 U.S. at 422-3, 95 S.Ct. at 2373-74. See also Palmer v. General Mills, Inc., 513 F.2d 1040, 1042 (6th Cir.1975), and Palmer v. General Mills, Inc., 600 F.2d 595, 598-600 (6th Cir.1979).
Albemarle itself was foreshadowed by this circuit’s decision in Head v. Timken Roller Bearing Co., 486 F.2d 870 (6th Cir.1973), where Judge Miller, speaking for the court, emphasized that the prime object of a backpay award was to make the injured party whole and that this consideration was generally unaffected by the motivation of the employer:
The finding of discrimination by the district court, in addition to the nature of the relief (compensatory as opposed to punitive), and the clear intent of Congress that the grant of authority under Title VII should be broadly read and applied mandate an award of back pay unless exceptional circumstances are present.
Congress evidently intended that the award of back pay should rest within the sound discretion of the trial judge. Although appellate courts are loathe to interfere with the exercise of such discretion by a trial court, it is recognized that it is not free from appellate scrutiny. In Moody v. Albemarle Paper Co., 474 F.2d
134, 141 (4th Cir.1973), the Fourth Circuit said:
Discretion in a legal sense necessarily is the responsible exercise of official conscience on all the facts of a particular situation in the light of the purpose for which the power exists. Bowles v. Goebel, 151 F.2d 671, 674 (8th Cir.1945) (emphasis added). Thus in determining the proper scope of the exercise of discretion, the objective sought to be accomplished by the statute must be given great weight. Hecht Co. v. Bowles, 321 U.S. 321, 331, 64 S.Ct. 587, 592, 88 L.Ed. 754 (1944). Where a district court fails to exercise discretion with an eye to the purposes of the Act, it must be reversed. Wirtz v. B.B. Saxon Co., 365 F.2d 457 (5th Cir.1966); Shultz v. Parke, 413 F.2d 1364 (5th Cir.1969).
We find no reasonable basis for denial of such relief on the present record. The 1968 change in Timken’s seniority system does not ameliorate the injury already suffered. Good faith by Timken either during the 1965-68 period or thereafter is not a' valid defense to a claim for back pay.
Id. at 876-7. Precisely when an award of backpay should end appears to depend upon the circumstances in each case and upon an application of the broad “make whole” principles enunciated by the Supreme Court in Albemarle and by our own circuit in Head, Palmer, and Manning v. International Union, 466 F.2d 812 (6th Cir.1972). See also Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 251-53 (5th Cir.1974).
The EEOC argues that because Ross and Hanna should have been employed in February, 1974, they are entitled to backpay up to the date of any final judgment in the district court, and presumably this would carry the award up to the final date of judgment upon retrial, less of course any sums earned in other employment. Generally, where an employer has discriminatorily refused to hire an employee, contrary to that employee’s rights under Title VII, the award of backpay will be computed from the date of first refusal until final judgment. As a leading treatise in this area notes:
In the individual case, the termination date of back-pay liability is ordinarily the date of an offer of. employment, reinstatement, or promotion, whether pursuant to a court decree or voluntarily. There may be some instances in which an earlier date may be appropriate. Some courts have terminated back pay as of the date the plaintiff obtained a better paying job than the job sought from the defendant. In a promotion case, the period of liability will end if plaintiff voluntarily quits his employment with the defendant absent a constructive discharge. Some courts have terminated the back-pay period after a specified time on the ground that it was speculative whether the plaintiff would have continued in the employer’s employ beyond that period. The backpay period will end if the plaintiff dies, retires, or otherwise is not eligible for employment or reinstatement. If the defendant sells his business and therefore could not have offered employment or reinstatement after that date, back pay will end upon the sale. If a discharged plaintiff does not seek reinstatement, it could be argued that the filing of a complaint not seeking reinstatement constituted a waiver to reemployment from that date forward and terminated the back-pay period.
Schlei and Grossman, Employment Discrimination Law 1240-41 (1974). The district judge was mistaken in terminating the award of backpay to Ross and Hanna on the date the company began hiring women. In the absence of the type of compelling considerations present in Manning and Palmer II, supra, we hold that the limitation on the recovery of backpay which the district court imposed in this case frustrates the purposes of Title VII.
CONCLUSION
While we regret the necessity of remanding for a full retrial, nothing herein is intended to preclude the court and the parties from agreeing to any economies in time which may come from the use of the record already before the court. The important objective to be achieved upon remand is, of course, a full, fair and complete trial to consider, initially, the general question of discrimination. If the district court concludes discrimination existed, it should then conduct a separate hearing' to establish which individuals are entitled to relief.
Reversed and remanded for a new trial or other proceedings consistent herewith.
. Ohio Revised Code §§ 4107.40-4107.53 (Baldwin’s 1977). These provisions prohibit the employment of women in jobs which require lifting more than twenty-five pounds repeatedly and restrict the number of hours which women can work per day and per week.
. As noted in Wright, supra, at 663 n. 5, the result is the same both before and after the adoption of the Federal Rules of Evidence, Rule 611(a), which provides the trial judge with broad discretion over "the mode and order of interrogating witnesses and presenting evidence so as to (1) make the interrogation and presentation effective for the ascertainment of the truth ...."
. Although we realize the Supreme Court in Teamsters was discussing the proper procedure for the district court to follow in a section 707 pattern-and-practice suit, it adopted this procedural framework from Franks which dealt with class actions under section 706. 431 U.S. at 358-61, 97 S.Ct. at 1866-67.
. The EEOC does not dispute the trial judge’s commencement date of the awards to Hanna and Ross as the date when the company refused to hire them on February 26, nor does it appear generally to dispute our circuit’s holding that a trial judge might properly exercise his discretion to deny awards of backpay prior to March 15, 1972, the date when Ohio women’s protective statute was declared unconstitutional by the Ohio Supreme Court, Jones Metal Products v. Walker, 29 Ohio St.2d 172, 281 N.E.2d 1 (1972). See generally, Manning v. International Union, 466 F.2d 812 (6th Cir.1972), cert. denied, 410 U.S. 946, 93 S.Ct. 1366, 35 L.Ed.2d 613 (1973); Palmer v. General Milk, Inc., 600 F.2d 595 (6th Cir.1979).
Title VII itself recognizes a complete, but very narrow, immunity for employer conduct shown to have been undertaken "in good faith, in conformity with, and in reliance on any written interpretation or opinion of the [Equal Employment Opportunity] Commission.” 42 U.S.C. § 2000e-12(b). It is not for the courts to upset this legislative choice to recognize only a narrowly defined "good faith” defense.
We note that some courts have denied backpay, and limited their judgments to declaratory relief, in cases where the employer discriminated on sexual grounds in reliance on state "female protective” statutes that were inconsistent with Title VII. See, e.g., Kober v. Westinghouse Electric Corp., 480 F.2d 240 (CA 3 1973); LeBlanc v. Southern Bell Telephone & Telegraph Co., 460 F.2d 1228 (CA 5 1972); Manning v. General Motors Corp., 466 F.2d 812 (CA 6 1972); Rosenfeld v. Southern Pacific Co., 444 F.2d 1219 (CA 9 1971). There is no occasion in this case to decide whether these decisions were correct. As to the effect of Title VII on state statutes inconsistent with it, see 42 U.S.C. § 2000e-7.
This Court in Manning v. International Union, 466 F.2d 812 (6th Cir.1972), denied back pay despite a showing of discrimination. That case is easily distinguishable from the case at hand, for in Manning the defendants were caught between two statutes, one directing them not to discriminate and one directing them to discriminate.
. This treatise was cited with approval by the Supreme Court in Teamsters v. United States, 431 U.S. 324, 335-36 n. 15, 97 S.Ct. 1843, 1854-55 n. 15, 52 L.Ed.2d 396 (1977).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PREGERSON, Circuit Judge.
This matter is before us for the third time.
Petitioners, Mr. Sorachai Sida and Mrs. Nongyao P. Sida, now appeal the July 1984 decision of the Board of Immigration Appeals (BIA) denying their motion to reopen deportation proceedings to apply for suspension of deportation. The motion was denied on the ground that the Sidas failed to satisfy the seven years continuous presence requirement of 8 U.S.C. § 1254(a)(1) (1982) for suspension of deportation.
The Sidas, citizens of Thailand, first entered the United States in 1969. They returned to Thailand in 1972 to get married. They remained there from August 14 to September 13. This visit broke the continuity of their physical presence in the United States. Mr. Sida departed from the United States on one other occasion. His latest entry into the United States was on September 19, 1976. Mrs. Sida’s latest entry was on September 13, 1972.
The Immigration and Naturalization Service (INS) instituted deportation proceedings in August 1977. The Sidas were found deportable and were then granted voluntary departure. Thereafter, the Sidas moved twice to reopen the deportation proceedings to apply for suspension of deportation. The Immigration Judge (IJ) found that they had not fulfilled section 1254(a)(l)’s seven year continuous physical presence requirement. The denial of the motion to reopen was appealed to the BIA. The BIA dismissed this appeal in July 1980. The Sidas petitioned this court to review the BIA’s 1980 dismissal. We then remanded and required that the BIA address and rule on the new evidence the Sidas presented in their motions to reopen. Sida v. INS, 665 F.2d 851 (9th Cir.1981).
On June 30, 1982, the BIA again dismissed the Sidas’ appeal on the ground that little likelihood existed that their application for suspension of deportation would be granted at reopened proceedings. The BIA again failed to consider the Sidas’ new evidence.
On January 17, 1984, the Sidas appealed to this court for the second time. On February 15, 1984, 732 F.2d 164, we again remanded and instructed the BIA to determine whether INS v. Phinpathya, 464 U.S. 183, 104 S.Ct. 584, 78 L.Ed.2d 401 (1984), controls the disposition of the pending application. In Phinpathya, the Supreme Court held that section 244(a)(1) of the Immigration & Nationality Act must be read literally with regard to the requirement of seven years continuous physical presence. Id. 104 S.Ct. at 589.
On July 9,1984, the BIA again dismissed the Sidas’ appeal holding that in view of Phinpathya the motion before the BIA failed to establish that the Sidas had the requisite seven years of continuous physical presence at the time of filing their motion to reopen on February 28, 1979. The BIA did not reach the issue of extreme hardship. On December 17,1984, the Sidas filed the instant appeal from the BIA’s September 7, 1984 deportation order.
The Sidas now contend that following their latest entries into the United States— counting the time accrued on appeal — they can satisfy the minimum required period of seven years continuous physical presence. They ask that we remand the matter to the BIA to reconsider the issue of their continuous physical presence and to consider the issue of extreme hardship in light of current circumstances.
Alvarez-Ruiz v. INS, 749 F.2d 1314 (9th Cir.1984), a recent Ninth Circuit decision parallels the Sidas’ case. In Alvarez-Ruiz, the alien entered the United States from Mexico in March 1974 without inspection. He travelled to Mexico in November 1975 to get married. He returned to the United States in May 1976. The INS instituted deportation proceedings in 1981. The IJ refused to suspend deportation because the alien’s six month absence broke the continuity of the seven year physical presence requirement. The BIA affirmed. We ruled that the proper procedure was for the alien to file a new motion to reopen with the BIA to resolve the question whether Alvarez-Ruiz had been continuously present in the United States since his return in 1976. We directed the BIA to count the time accrued on appeal. 749 F.2d at 1315.
The Supreme Court’s opinion in INS v. Rios-Pineda, — U.S.-, 105 S.Ct. 2098, 85 L.Ed.2d 452 (1985), suggests that, under certain circumstances, time accrued on appeal can count toward establishing the seven years continuous physical presence requirement.
Rios-Pineda held that the BIA did not abuse its discretion by denying reopening of deportation proceedings where six of the seven years of continuous physical presence in the United States accrued “by virtue of [the aliens’] baseless appeals.” Id., — U.S. at-, 105 S.Ct. at 2103. “No substance was found in any of the points raised on appeal, in and of themselves, and we agree with the BIA that they were without merit.” Id.., — U.S. at-, 105 S.Ct. at 2102. In our view, the Sidas’ appeals have not been baseless, therefore, we perceive no impediment to counting the time accrued during the pendency of their appeals.
Moreover, on the issue of time accrued on appeal, this case should not be confused with another recent Ninth Circuit decision, Avila-Murrieta v. INS, 762 F.2d 733 (9th Cir.1985), which deals with section 212(c) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1182(c) (1982). Avila-Murrieta does not apply to the disposition of the Sidas’ case, which deals with section 244(a)(1) of the INA, 8 U.S.C. § 1254(a)(1).
Avila-Murrieta addressed one narrow question: “whether the time awaiting discretionary relief [from an order of deportation] under section 212(c) should also accrue toward that section’s seven year requirement when the merits of deportation are not challenged.” Slip op. at 5 (emphasis added).
Section 212(c) applies to aliens who, unlike the Sidas, were lawfully admitted for permanent residence. Avila-Murrieta determines when that lawful permanent residence terminates.
To be eligible for section 212(c) relief, an alien must have maintained a “lawful unre-linquished domicile of seven consecutive years____” 8 U.S.C. § 1182(c). In discussing the history of section 212(c), a Senate Report stated that
the proviso was intended to give discretionary power to the proper Government official to grant relief to aliens who were reentering the United States after temporary absence, who came in the front door, were inspected, lawfully admitted, established homes here, and remained for 7 years before they got into trouble [for committing a crime].
Marti-Xiques v. INS, 741 F.2d 350, 352-53 (11th Cir.1984) (quoting The Immigration and Naturalization Systems of the United States, S.Rep. 1515, 81st Cong.2d Sess. 382 (1950)) (emphasis in original).
In contrast with section 212(c), section 244(a)(1), the section we are presently concerned with, does not relate to aliens who are “in trouble” for committing a criminal act. See 8 U.S.C. §§ 1251(a)(3) (1982). In short, section 212(c) is inapplicable to the Sidas’ case.
The factual determination whether the Sidas have been continuously physically present in the United States for the seven years required under section 244(a)(1) is for the BIA to determine in the first instance. Phinpathya, 104 S.Ct. at 588 n. 6. The appropriate procedure would be for the Si-das to “ ‘follow the INS regulations and file a motion to reopen with the BIA.’ ” Alvarez-Ruiz v. INS, 749 F.2d 1314, 1316 (quoting Ramirez-Gonzalez v. INS, 695 F.2d 1208, 1214 (9th Cir.1983)).
If, following the motion to reopen, the Board finds that the Sidas now meet the seven year physical presence test, the BIA should then consider their claim of extreme hardship. This claim should be examined in light of current circumstances. See Chookhae v. INS, 756 F.2d 1350 (9th Cir.1985) (per curiam).
To avoid unduly interfering with the BIA’s discretion and to enable petitioners to seek relief from the BIA, we stay our mandate for sixty days. If a motion to reopen and application for stay are filed with the BIA or District Director within this period, we stay our mandate for such further time as is required for disposition of the application for stay by the BIA or District Director. See 8 C.F.R. § 3.6(b) (1985); Alvarez-Ruiz v. INS, 749 F.2d at 1316.
REVERSED AND REMANDED for further proceedings consistent with the views expressed in this opinion.
. Section 1254(a)(1) permits suspension of deportation if the alien demonstrates (1) seven years continuous physical presence in the United States; (2) good moral character during that time; and (3) extreme hardship “to the alien or his spouse, parent, or child, who is a citizen of the United States or an alien lawfully admitted for permanent residence.”
. The new evidence was a doctor’s letter stating that the Sidas’ child had a severe respiratory condition and therefore should not return to Thailand.
. Attached to the February 26, 1979 motion to reopen was previously submitted documentation plus a letter from the Sidas’ doctor stating: "This child is suffering from recurrent tonsillitis and pulmonary congestion and fever by history. This child historically becomes very ill in Thailand. He shouldn't return to Thailand.” Mrs. Sida stated that this respiratory condition was "recently discovered” when the child traveled to Thailand to visit his grandparents. Thus, Mrs. Sida did submit new evidence justifying her motion to reopen and, in the absence of contrary findings, we cannot say that this evidence is baseless.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
RYAN, Circuit Judge.
This sentence guidelines appeal presents a meritorious assignment of error.
Because we conclude that the sentencing court erred as a matter of law in selecting the numerical value corresponding to the defendant’s “role” in the offense in this case, and as a result necessarily came to a mistaken mathematical conclusion about the appropriate sentence guidelines range, we vacate the sentence and remand the case for resentencing.
I.
Before turning to the four meritless and one meritorious issues in this appeal, we should like to say a word, in dicta to be sure, about the ever increasing volume of sentence guidelines appeals being filed in this circuit, and presumably in others.
This is one in an ever increasing number of such appeals in which the principal thrust of the appeal is to attempt to persuade this court to second guess the sentencing judge’s findings about the nature of the defendant’s role in the offense, or his attitude about his guilt, or his criminal justice history; and sometimes, as in this case, all three.
This appeal is unusual in that it presents a meritorious assignment of error. In most of these appeals the sentenced offender is the appellant and his sole appellate purpose is obvious: to obtain a more lenient sentence than was imposed by the district court. When the government is the appellant, as it is with increasing frequency, its purpose, ordinarily, is to obtain a more severe sentence.
The usual request in these appeals is that we substitute our own findings of fact for those of the sentencing court and then recompute the “correct” sentence guideline range by introducing into the convoluted arithmetical sentencing guidelines formula different numerical values for the defendant’s role in the offense, his attitude, and his criminal history than the sentencing court, and usually the probation department, thought to be appropriate. To characterize this use of the resources of the United States Court of Appeals as imprudent is a very considerable understatement.
As the burgeoning volume of these sentence guidelines appeals begins to bloat the dockets of all the courts of appeals, we are necessarily spending more and more time doing nothing more than responding to appellants’ pleas that we disagree with the factual determinations of sentencing judges and correct their mathematical computations. In the vast majority of these cases, although not this particular one, after careful and exhaustive examination of the sentencing court’s findings of facts and its arithmetical computations, our appellate scrutiny results in a conclusion, even where some minor mathematical mistake is identified, that the correct sentence range is exactly as determined by the sentencing court. Part of the price that is paid for this kind of appellate drill is the unwarranted consumption of considerable time and energy that should be devoted to study, research, decision making, and opinion writing in an accumulating backlog of cases involving hundreds of jurisprudentially significant questions of state, federal, and constitutional law — functions for which the United States court of appeals was created.
It is not too late for Congress to reconsider whether the time and resources the courts of appeals are devoting to reviewing these sentence guideline cases, particularly in view of the essentially clerical nature of the current review function, can be better spent without sacrificing a sentenced defendant’s entitlement to appropriate appellate review of the sentence imposed.
Meanwhile, we shall continue to undertake, as we have in this case, a detailed analysis of the correct application of the guidelines to the facts of individual cases in the hope that doing so will contribute to an early accumulation of a body of appellate precedent on the subject, looking to the day when most district court findings of fact and arithmetical computations in sentence guideline cases can be double checked without the full blown court of appeals briefing, oral argument, and opinion writing that should be reserved for jurisprudentially weightier matters.
II.
Appellant William M. Carroll attempted to escape from a federal correctional institute, pleaded guilty to doing so, was convicted and sentenced, and now appeals the district court’s interpretation of the sentencing guidelines and the measure of proof by which the court required the government to prove the facts relied upon to compute the correct sentencing guidelines range.
Appellant argues that the district court erred in the following matters:
—Not requiring the government to prove by clear and convincing evidence the facts upon which it urged the district court to rely in determining the correct sentencing guidelines’ values.
—Increasing appellant’s base offense level by two levels for being an “organizer or leader.”
—Increasing appellant’s criminal history score by two points for committing an offense while under a criminal justice sentence.
—Increasing appellant’s criminal history by two points for committing an offense within two years after release from custody.
—Denying appellant a two level reduction for acceptance of responsibility.
We agree with appellant that, as a matter of law, his base offense level could not be increased by two points on the theory that he was an organizer or leader under the “role in the offense” guideline. The remaining assignments of error are without merit, but because of the “role in the offense” miscalculation, the sentence is vacated and the matter is remanded to the district court for resentencing.
III.
Carroll was serving a fifteen-year sentence for manufacturing counterfeit currency when, in February 1988, he asked another inmate whether the inmate knew anyone on the outside who could help Carroll escape from the Federal Correctional Institute in Milan, Michigan. The inmate promptly alerted prison authorities who instructed the inmate to put Carroll in touch with an undercover FBI agent outside the prison who would pose as a helicopter pilot for hire.
Carroll telephoned the agent six times. He also wrote several letters in which he detailed his escape plans in “invisible ink” (lemon juice). Carroll planned to pay the agent and his helpers with $1,000,000 in counterfeit currency that he would then launder by purchasing cocaine from “a couple of Venezuelan brothers.” Carroll offered the agent an extra $250,000 if he could recruit one more assistant and indicated a willingness to pay an additional one million counterfeit dollars for the life of the “bastard who got me this 15 years.” In a later letter to the agent, Carroll identified that person, but told the agent to wait about six months so that the two could review details and defuse suspicion.
Carroll admitted that at the time scheduled for the escape, he was waiting for the helicopter in the designated place, was wearing predetermined clothing, and was signaling the pilot where to land.
Carroll was charged in a complaint with attempted escape, 18 U.S.C. § 751, and solicitation to commit murder, 18 U.S.C. § 13, relying, pursuant to the Assimilative Crimes Act, on Mich.Comp.Laws § 750.157b (1989). He pleaded guilty and was scheduled for sentencing on December 14, 1988. As required by local court rule, appellant filed written objections to the calculation of his sentencing guidelines and renewed those objections orally at the time of his sentence. He makes the same arguments on appeal that he made below.
At sentencing, Carroll did not dispute the initial determination that Guideline § 2Pl.l(a) assigns a base level of thirteen to his offense; nor did he seriously dispute the court’s finding that he initiated and planned the escape attempt. Rather, Carroll objected to the government’s argument that he deserved a two point base level increase, pursuant to § 3Bl.l(c), due to his “aggravating role” in the escape attempt. Carroll maintained that because he was the only criminally responsible person alleged to have been involved in the offense, he could not rationally be treated as an “organizer or manager” within the language and intent of the applicable guideline — regardless of whether he planned the escape — because the escape involved no other “participants” as defined in the guidelines. Carroll asserted that in this ease he only organized himself and the guideline does not permit enhancement in such a situation.
Carroll also objected to the government’s request to add two points to his criminal history score for having committed an offense while under a criminal justice sentence, and one point for commission of an offense within two years after release from custody. He argued that because a defendant cannot commit the offense of escape unless he is under a criminal justice sentence, the two point addition to the criminal history score mandated by § 4Al.l(d) is inappropriate in escape cases. Carroll further argued that the commission of his offense prior to his release from custody renders § 4Al.l(e) inapplicable.
Finally, Carroll argued that he was entitled to the two level “acceptance of responsibility” reduction.
The sentencing court accepted the government’s position on every guideline issue. The court began the sentencing computation by applying a base offense level of thirteen. U.S.S.G. § 2P1.1(a)(1). In apparent reliance on the agent’s affidavit that Carroll initiated the attempted escape, the district court increased the base by two levels due to Carroll’s aggravating role in the offense, pursuant to § 3B.l.(c), for a total offense level of fifteen. The court determined Carroll’s criminal history category to be Five, based on twelve criminal history points, and gave Carroll no credit, pursuant to § 3E1.1, for “acceptance of responsibility.” As a result of the various enhancements, the guidelines indicated that Carroll’s sentence should range from thirty-seven to forty-six months. The court imposed a sentence of forty months to run consecutive to Carroll’s previous counterfeiting sentence, followed by three years’ supervised release.
IV.
A.
Appellate review of sentences imposed under the guidelines is set forth at 18 U.S.C. § 3742 (1989), which provides in pertinent part:
(e) Consideration. — Upon review of the record, the court of appeals shall determine whether the sentence—
(1) was imposed in violation of law; (2) was imposed as a result of an incorrect application of the sentencing guidelines;
The court of appeals shall give due regard to the opportunity of the district court to judge the credibility of the witnesses, and shall accept the findings of fact of the district court unless they are clearly erroneous and shall give due deference to the district court’s application of the guidelines to the facts.
(f) Decision and disposition. — If the court of appeals determines that the sentence—
(1) was imposed in violation of law or imposed as a result of an incorrect application of the sentencing guidelines, the court shall remand the case for further sentencing proceedings with such instructions as the court considers appropriate....
Under the “due deference” standard of 18 U.S.C. § 3742(e), the appellate review standard varies depending on whether an issue is factual, legal, or mixed. United States v. Ortiz, 878 F.2d 125 (3d Cir. 1989).
B.
Carroll first claims that the district court erred in not requiring the government to prove by clear and convincing evidence those facts upon which the court should rely in determining the sentence pursuant to the guidelines. We disagree.
As the Fourth Circuit recently noted in United States v. Urrego-Linares, 879 F.2d 1234 (4th Cir.), cert. denied, - U.S. -, 110 S.Ct. 346, 107 L.Ed.2d 334 (1989), other courts examining the standard of proof required by the guidelines “have generally agreed that a preponderance standard is the proper measure.” See, e.g., United States v. Lovell, 715 F.Supp. 854 (W.D. Tenn.1989); United States v. Dolan, 701 F.Supp. 138, 140 (E.D.Tenn.1988); United States v. Silverman, 692 F.Supp. 788, 791 (S.D.Ohio 1988). Moreover, although McMillan v. Pennsylvania, 477 U.S. 79, 91, 106 S.Ct. 2411, 2418, 91 L.Ed.2d 67 (1986), was a pre-guidelines ease, McMillan’s due process analysis applies with equal force to federal courts. See United States v. Lee, 818 F.2d 1052, 1057 (2d Cir.), cert. denied, 484 U.S. 956, 108 S.Ct. 350, 98 L.Ed.2d 376 (1987); United States v. Fernandez-Vidana, 857 F.2d 673, 675 (9th Cir.1988). In McMillan, the Supreme Court rejected a contention that a sentencing court must apply a clear and convincing standard to factual findings relevant to sentencing determinations. The McMillan Court concluded that Pennsylvania’s statutory requirement of proof by a preponderance satisfied due process, noting that “[sentencing courts have traditionally heard evidence and found facts without any prescribed burden of proof at all.” 477 U.S. at 91, 106 S.Ct. at 2419.
While the precise question whether the Constitution mandates proof of facts by at least a preponderance standard was not before the McMillan Court and is not before us, we certainly think the trial court’s application of that standard here suffices. We discern no reason to accept appellant’s claim that the advent of a new sentencing system requires application of a standard higher than that accepted in McMillan.
C.
We turn next to Carroll’s claim that the trial court erred by adding two points to the base level for his offense pursuant to § 3Bl.l(c). Carroll argues that guideline § 3B1.1 applies to organizers or leaders involved in “organizational crime” and that enhancement was improper in this case because he was the sole defendant alleged to have participated in this offense.
It is necessary for an adequate understanding of Carroll’s argument and a resolution of the issue to burden our opinion by setting forth, in full, the relevant guidelines and related commentary:
PART B — ROLE IN THE OFFENSE
Introductory Commentary
The Part provides adjustments to the offense level based upon the role the defendant played in committing the offense. When an offense is committed by more than one participant, § 3B.1 or 3B.2 (or neither) may apply. Section 3B1.3 may apply to offenses committed by any number of participants.
§ 3B1.1 Aggravating Role
Based on the defendant’s role in the offense, increase the offense level as follows:
(a) If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive, increase by 4 levels.
(b) If the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels.
(c) If the defendant was an organizer, leader, manager, or supervisor in any criminal activity other than described in (a) or (b), increase by 2 levels.
Commentary
Application Notes:
1. A “participant” is a person who is criminally responsible for the commission of the offense, but need not have been convicted.
3. ... This adjustment does not apply to a defendant who merely suggests committing the offense.
§ 3B1.4 In any other case, no adjustment is made for role in the offense.
Commentary
Many offenses are committed by a sin-gie individual or by individuals of roughly equal culpability so that none 0† them will receive an adjustment under this Part.
The introductory commentary to the “Role in the Offense” enhancement provision states that § 3B1.1 may apply “when an offense is committed by more than one participant.” The commentary to the same section defines “participant” as any “person who is criminally responsible for commission of the offense” with which the defendant has been charged. Because Carroll only “organized” law enforcement authorities — persons who could not have been “criminally responsible” — it is undisputed that Carroll’s crime involved only one offender and, therefore, no criminal organization or enterprise.
The government maintains that enhancement was appropriate because the commentary referring to, and apparently requiring, “participants” is merely equivalent to legislative history that should be ignored when the plain language of the guideline is clear. See § IB 1.7, Comment.; McBarron v. S & T Industries, Inc., 771 F.2d 94, 97 (6th Cir. 1985). The government argues that although
the word “participants” is explicitly used in the two previous subsections, ... in the subsection in question, the term “any criminal activity other than described [in the two previous sections]” is substituted. Thus, no magic number of “participants” need be proven, by the plain language of the guideline. The Introductory Commentary does not state that the Aggravating Role adjustments (§ 3B1.1) apply only to offenses committed by more than one participant. It merely provides a general rule — an overview or “Introduction” to the entire chapter; it is not tailored to the specific and peculiar situation presented in this ease where the defendant unwittingly attempts to organize the non-culpable.
In further support of its reading of the guideline, the government asserts the following:
The purposes behind an “organizer or leader” adjustment include punishing more severely those who are more likely to profit and those who, by virtue of their willingness to lead, “present a greater danger to the public and/or are more likely to recidivate.” § 3B1.1, Commentary (Background). These purposes are just as applicable when the defendant unwittingly tries to organize and lead non-criminals. In short, this defendant should be subject to the same sentencing range as a defendant who, by luck, picks a fellow inmate who is willing to break the law and who hires a real pilot on the outside who will jump at the chance to make two million dollars in counterfeit currency that can be laundered through drug deals.
Our review of this guidelines construction issue is plenary. United States v. Ofchinick, 877 F.2d 251, 256 (3d Cir. 1989); 18 U.S.C. § 3742(f)(1).
We disagree with both the government’s reading of the guideline and its characterization of Carroll as a leader. With respect to the government’s argument that the “participants” requirement should be treated as superfluous legislative history creating an ambiguity in an otherwise clear statute, we note that, unlike traditional legislative history which is often written by legislative staff and not subject to congressional vote, the commentary here accompanies and is printed between the various guideline provisions in the Guidelines Manual, an official publication of the United States Sentencing Commission. Furthermore, the government’s authority for treating commentary as legislative history is actually found in the commentary to another guideline whose language indicates that the commentary has greater significance than the government recognizes. That introductory guideline and its commentary states:
§ 1B1.7 Significance of Commentary
The Commentary that accompanies the guideline sections may serve a number of purposes. First, it may interpret the guideline or explain how it is to be applied. Failure to follow such commentary could constitute an incorrect application of the guidelines, subjecting the sentence to possible reversal on appeal. See 18 U.S.C. § 3742.
Commentary
Portions of this document not labeled as guidelines or commentary also express the policy of the Commission or provide guidance as to the interpretation and application of the guidelines. These are to be construed as commentary and thus have the force of policy statements.
In stating that failure to follow certain commentary “could constitute an incorrect application of the guidelines, ” the Commission simply means that in seeking to understand the meaning of the guidelines courts likely will look to the commentary for guidance as an indication of the intent of those who wrote them. In such instances, the courts will treat the commentary much like legislative history or other legal material that helps determine the intent of the drafter.
It is disingenuous for the government to cite the commentary as support for its argument that we should ignore the commentary.
While we recognize and accept the government’s argument that one of the purposes of this enhancement section is to punish more severely those who, like Carroll, are “willing to lead,” the background to § 3B1.1, from which the government also selectively quotes, indicates that leadership of culpable individuals is necessary. The background explains that “[tjhis section provides a range of adjustments to increase the offense level based upon the size of a criminal organization (i.e., the number of participants in the offense) and the degree to which the defendant was responsible for committing the offense.” U.S.S.G. § 3B1.1, Comment, (backg’d.) (emphasis added). The government ignores the underscored conjunction and, therefore, the first half of the sentence. The government also fails to address those portions of the commentary to § 3B1.1 indicating the following:
This adjustment does not apply to a defendant who merely suggests committing the offense.
In relatively small'criminal enterprises that are not otherwise to be considered as extensive in scope or in planning or preparation, the distinction between organization and leadership, and that of management or supervision, is of less significance than in larger enterprises that tend to have clearly delineated divisions of responsibility. This is reflected in the inclusiveness of § SBl.l(c).
While Carroll may have suggested a prison escape, the government, unbeknownst to Carroll, had actually taken over and was actually organizing the operation. Just as the government cannot claim that a defendant conspired with a government agent because “proof of an agreement between a defendant and a government agent or informer will not support a conspiracy,” United States v. Pennell, 737 F.2d 521, 536 (6th Cir.1984), cert. denied, 469 U.S. 1158, 105 S.Ct. 906, 83 L.Ed.2d 921 (1985), the government cannot claim that Carroll was leading or organizing government agents. When read in context, the language of the guideline indicates that its drafters did not seek to provide “supervisory” enhancement in a case such as this. Rather, like conspiracy, this guideline requires that a defendant engage in criminal activity with at least one other criminally culpable person. To accept the government’s argument that § 3Bl.l(c) should be read exclusive of the commentary would permit enhancement where a single offender engaged in what could be considered an “otherwise extensive” criminal activity by the mere fact that the activity, involved use of the services of several innocent people. We hold that enhancement pursuant to § 3B1.1 requires the participation of at least two culpable individuals so that leadership of some criminal enterprise or organization, however minimal, can be claimed.
D.
Appellant next challenges the increase of his criminal history score by two points for the “commission of the instant offense while under any criminal justice sentence,” § 4Al.l(d), and by one point for the “commission of the instant offense less than two years after the release from imprisonment,” § 4Al.l.(e). Those sections provide in pertinent part:
CHAPTER FOUR — CRIMINAL HISTORY AND CRIMINAL LIVELIHOOD PART A — CRIMINAL HISTORY
§ 4A1.1 Criminal History Category
The total points from items (a) through (e) determine the criminal history category in the Sentencing Table in Chapter Five, Part A.
(a) Add 3 points for each prior sentence of imprisonment exceeding one year and one month:
(b) Add 2 points for each prior sentence of imprisonment of at least sixty days not counted in (a).
(c) Add 1 point for each prior sentence not included in (a) or (b), up to a total of 4 points for this item.
(d) Add 2 points if the defendant committed the instant offense while under any criminal justice sentence, including probation, parole, supervised release, imprisonment, work release, or escape status.
(e) Add 2 points if the defendant committed the instant offense less than two years after release from imprisonment on a sentence counted under (a) or (b). If 2 points are added for item (d), add only 1 point- for this item.
Carroll maintains that because he was charged with escape, the base offense level implicitly included punishment for an offense committed while under sentence since, by definition, one cannot escape unless one is under a criminal justice sentence. Carroll argues that the additional two point increase is a double punishment.
In calculating Carroll’s criminal history points, the probation department report relied on the language of the enhancing guideline and on the answer to Question 22 of the Sentencing Commission’s “Questions Most Frequently Asked About The Sentencing Guidelines,” issued on May 5, 1988. In that publication, the Commission stated that in drafting the guidelines the Commission intended that courts would impose two criminal history points for § 4Al.l(d) and one point for § 4Al.l(e) when sentencing escape offenders. The trial court adopted the probation department’s calculation of the criminal history score, noting reliance on the Sentencing Commission’s commentary.
In agreement with the Third and Tenth Circuits, we note that the language of Guideline § 4A1.1 does not support a different result. See United States v. Ofchinick, 877 F.2d 251 (3d Cir.1989) (defendant convicted of escape from custody may receive criminal history enhancement under Guideline §§ 4Al.l(d) and (e) for escaping while under a sentence of imprisonment and while still in confinement, even though being in custody is an element of the offense); United States v. Goldbaum, 879 F.2d 811 (10th Cir.1989) (affirming use of Guideline § 4Al.l(d) to add two points to criminal history score of defendant convicted of escape). But see United States v. Clark, 711 F.Supp. 736 (S.D.N.Y.1989) (such use constitutes double counting); United States v. Bell, 716 F.Supp. 1207 (Minn.1989) (same holding).
The language of § 4Al.l(d) indicates that that provision applies to all offenses committed while imprisoned. The commentary to the guidelines often cautions against double counting in particular areas, but fails to indicate that adding three points here would violate that principle. Because the language of the guidelines fails to support his argument, Carroll claims that it was never the Commission’s intent to enhance the base offense level for escape. But as the sentencing court recognized, the Sentencing Commission’s answer to this specific question disproves Carroll’s argument that the Commission intended, through the assignment of a base level of thirteen, to account for the fact that the offense was committed while under a sentence. Moreover, “[t]he structure of the Sentencing Guidelines suggests that the criminal history category is to be determined without regard to the nature of the crime for which the defendant is currently being sentenced.” Goldbaum, 879 F.2d at 813, citing United States v. Reyes-Ruiz, 868 F.2d 698, 700 (5th Cir.1989).
The better inference is that the Commission chose not to propose an even higher base level for escape offenses because it anticipated that a separate upward adjustment in the criminal history category would produce a similar result. The Goldbaum court stated:
[I]n the absence of any contrary intent we must apply the clear language of the guideline and presume that in formulating the base level specified for the crime of escape in Guideline § 2P1.1, the Sentencing Commission had in mind that under Guidelines §§ 4Al.l(d) and (e), points would be added to the particular defendant’s criminal history category thereby enhancing the sentence.
Carroll also maintains that the court made an interpretation error by adding one point under guideline § 4Al.l(e), which provides that one or two points shall be added to the criminal history category “if the defendant committed the instant offense less than two years after release from imprisonment.” Carroll argues that this guideline is inapplicable to his situation because he was obviously not released before he committed the offense.
This claim was recently rejected by the Fourth and Tenth Circuits. See United States v. Ofchinick, 877 F.2d 251, 256-57 (3d Cir.1989); United States v. Goldbaum, 879 F.2d 811 (10th Cir.1989). The Ofchin-ick court indicated:
Unquestionably the language of the guideline supports [appellant’s] interpretation. However, application note 5 to guideline § 4A1.1 indicates that guideline § 4Al.l.(e) “applies if the defendant committed the instant offense while still in confinement on such a sentence.” Guideline § 1B1.7 provides that the commentary, which includes the application notes, may be used to “interpret the guideline or explain how it is to be applied.” Thus, there is no question but that the computation of [appellant's criminal history category was consistent with the intent of the Sentencing Commission.
Thus, while we recognize the inconsistency between the guideline and the note, we do not see how we cannot follow the note, as the Sentencing Commission issued both the guidelines and the commentary in its official Guidelines Manual. This is not the usual case in which we are asked to accept legislative history such as committee reports, or even testimony of a witness before a committee, to determine the intent of Congress as a whole.
(Footnote omitted.)
Like the Fourth Circuit, we recognize that the commentary accompanying the Sentencing Guidelines Manual is unusually probative of the Commission’s intent on this issue. We also recognize that a recent amendment to this section, which took effect on November 1, 1989, supports our interpretation by adding “or while in imprisonment or escape status on such a sentence” to the end of the first sentence of the guideline. “Inasmuch as the amendment to the guideline is intended to clarify the existing guideline, we may give it substantial weight in determining the meaning of the existing guideline.” Ofchinick, 877 F.2d at 257 n. 9. We affirm the sentencing court’s application of the guidelines to determine Carroll’s criminal history category.
E.
Finally, Carroll contests the district court’s refusal to grant him a two level offense reduction for his “acceptance of responsibility” as permitted by § 3E1.1 of the guidelines. Carroll maintains that he should have received the two level reduction because he waived indictment and pleaded guilty within two weeks of his initial appearance on the complaint. The district court disagreed, concluding that Carroll had not “expressed any remorse” and was only “trying to be [as] persuasive as possible ... to pay the minimum to what he did to himself.”
This circuit recently discussed the standard for reviewing a district court’s “acceptance of responsibility” determination in United States v. Wilson, 878 F.2d 921 (6th Cir.1989). Quoting United States v. Thomas, 870 F.2d 174, 176 (5th Cir.1989), we explained:
Whether or not a defendant has accepted responsibility for his crime is a factual question. The district court’s determination of that question, like its findings with respect to manager status, and minimal participant status, enjoys the protection of the “clearly erroneous” standard. Because the trial court’s assessment of a defendant’s contrition will depend heavily on credibility assessments, the “clearly erroneous” standard will nearly always sustain the judgment of the district court in this area. Indeed, the guidelines specifically state that “[t]he sentencing judge is in a unique position to evaluate the defendant’s acceptance of responsibility. For this reason, the determination of the sentencing judge is entitled to great deference on review and should not be disturbed unless it is without foundation.”
(Citations omitted.)
A guilty plea does not automatically entitle a defendant to the acceptance of responsibility reduction. See § 3El.l.(c). Although a guilty plea may provide some evidence of a defendant’s acceptance of responsibility, that acceptance remains questionable where, as here, the plea may have been induced by factors of overwhelming evidence of guilt and desire to avoid the risk of conviction on other charges, such as solicitation to murder. Carroll’s continued insistence that the inmate-informant had initially approached him further supports the court’s conclusion that Carroll had not accepted full responsibility for the offense.
Finally, the factors that § 3El.l’s commentary lists as appropriate to consider in deciding whether to apply the “acceptance of responsibility” reduction hardly apply to Carroll. Carroll did not voluntarily withdraw from or terminate his criminal conduct prior to his apprehension or in some other way timely manifest through his conduct an acceptance of responsibility. Carroll merely entered a guilty plea in the face of almost certain conviction. The district court was in a much better position to observe Carroll’s demeanor, and whether we agree with its ruling is not the issue. The real question is whether the district court’s finding of fact in the matter is clearly erroneous. Plainly, it is not.
V.
For the reasons given, appellant’s sentence is VACATED and the matter is REMANDED for resentencing.
. Both parties agree that the burden of persuading the court that an aggravating factor applies remains with the government. The parties do not address, so neither do we, whether the government should also be required to disprove application of mitigating factors or whether the burden of persuading the court that a point reduction applies should shift to the defendant seeking the reduction. See United States v. Lovell, 715 F.Supp. 854 (W.D.Tenn.1989) (shifting burden of persuasion); United States v. Dolan, 701 F.Supp. 138, 140 (E.D.Tenn.1988) (burden remains on government at all times).
. The government might have arrested Carroll after he had spoken only to the informant. Obviously the government’s evidence would not have been nearly as compelling, but the crime would have been the same. Instead, the government organized and orchestrated its own scheme, introducing Carroll to an agent who was able to obtain the incriminating evidence that led to Carroll’s guilty plea by appearing to participate in the planned escape.
. Question 22 provides in pertinent part:
22. In a case involving escape from prison (or work release) as the instant offense, does the defendant receive two criminal history points for § 4Al.l(d) and one more for § 4Al.l(e>?
Yes, providing the prior sentence of imprisonment (or work release from confinement) is at least 60 days. The defendant receives two points pursuant to § 4Al.l(d) for committing the instant offense while under any criminal justice sentence. Another point is received for committing the offense less than two years after release from imprisonment on a sentence of at least 60 days (§ 4A 1.1(e)). As stated in Application Note #5, § 4Al.l(e) "also applies if the defendant committed the instant offense while still in confinement on such a sentence.”
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION
WILKINSON, Circuit Judge:
In this case we must decide a question relating to the duty of federal agencies to bargain with unions that represent federal workers. The Federal Labor Relations Authority held that the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7101 et seq., requires federal agencies to conduct union-initiated midterm bargaining over issues not addressed by the applicable collective bargaining agreement. We conclude that union-initiated midterm bargaining is not required by the statute and would undermine the congressional policies underlying the statute. We therefore set aside the Authority’s decision and deny its cross-application for enforcement.
I.
A.
The Federal Service Labor-Management Relations Statute (FSLMRS or statute), enacted as Title VII of the Civil Service Reform Act of 1978, 5 U.S.C. § 7101 et seq., establishes a comprehensive scheme governing labor relations between federal employers and their employees. Prior to enactment of the FSLMRS, a 1962 Executive Order and its successor governed labor relations in the public sector. See Exec. Order No. 10988, 3 C.F.R. 521 (1959-1963), reprinted in Subcomm. on Postal Personnel and Modernization of the House Comm, on Post Office and Civil Service, 96th Cong., 1st Sess., Legislative History of the Federal Service Labor-Management Relations Statute, Title VII of the Civil Service Reform Act of 1978, at 1211 (Comm. Print 1979) (hereinafter Legislative History ); Exec. Order No. 11491, 3 C.F.R. 861 (1966-1970), reprinted as amended in 5 U.S.C. § 7101 note. The Executive Order accorded federal employees limited rights to engage in concerted labor activity. See Bureau of Alcohol, Tobacco & Firearms v. FLRA (BATF), 464 U.S. 89, 91-92, 104 S.Ct. 439, 441, 78 L.Ed.2d 195 (1983).
In enacting the FSLMRS, Congress determined that “the right of employees to organize, bargain collectively, and participate through labor organizations of their own choosing in decisions which affect them” promotes both the public interest and “the amicable settlements of disputes between employees and their employers involving conditions of employment.” 5 U.S.C. § 7101(a)(1). Thus, Congress “significantly strengthened the position of public employee unions.” BATF, 464 U.S. at 92, 104 S.Ct. at 441. The FSLMRS, however, “is not simply an ‘employees’ rights’ statute.” U.S. Dep’t of Health & Human Servs. v. FLRA (HHS), 844 F.2d 1087, 1089 (4th Cir.1988) (en banc). Rather, in the statute “Congress sought to balance the public interest served by the protection of employees’ rights against the public interest served by granting agency managers the powers needed to govern effectively.” Id. In particular, Congress directed the courts to interpret the FSLMRS “in a manner consistent with the requirement of an effective and efficient Government.” 5 U.S.C. § 7101(b).
The statute imposes a duty to bargain in good faith on both federal agencies and employee unions. See id. § 7114(a)(4). Failure to negotiate in good faith is an unfair labor practice. See id. § 7116(a)(5) and (b)(5). The FSLMRS, however, imposes significant restrictions on the scope of an agency’s duty to bargain. For example, certain management prerogatives are not negotiable, see id. § 7106(a), and an agency need not negotiate over any union proposal that is inconsistent with federal law or any government-wide rule or regulation, see id. § 7117(a)(1). Moreover, unlike in the private sector, in the public sector a union is prohibited from calling or participating in a strike or other job action. See id. § 7116(b)(7). If negotiations undertaken in good faith fail to achieve an agreement, the FSLMRS provides for binding arbitration before the Federal Service Impasses Panel (FSIP). FSIP, whose involvement may be invoked unilaterally by either party, see id. § 7119(b)(1), is authorized to impose any negotiable proposal on the agency. See id. § 7119(c)(5)(B) and (C). “A duty to bargain over a proposal, therefore, does more than simply require an agency to negotiate; it subjects the agency to the possibility that the proposal will become binding.” HHS, 844 F.2d at 1089.
B.
The facts underlying this case are not in dispute. In 1982, the Social Security Administration (SSA) and the American Federation of Government Employees (AFGE or union) entered into a collective bargaining agreement. The initial term of the agreement was three years, after which it was automatically renewed on a yearly basis. This agreement was in effect at all times relevant to this case. Article 7 of the agreement provided that either party could reopen, amend, modify, or terminate the agreement by providing the other party with notice between ninety and 120 days prior to its expiration date. Article 7 also included the following “reopener” clause: “Negotiations during the term of this agreement to add to, amend or modify this agreement may be conducted only by mutual consent of the parties.” Further, Article 4 of the agreement contained detailed procedures for the conduct of so-called impact and implementation bargaining — i.e., bargaining about SSA proposals, made during the term of the agreement, that would change the conditions of employment and about which midterm bargaining is required by the statute. See 5 U.S.C. § 7106(b)(2) and (3). Finally, the agreement provided that, in certain subject areas, SSA and the union could enter into supplemental agreements at the component level.
In December 1987, AFGE submitted to SSA a list of proposals over which it sought to initiate midterm bargaining. The AFGE proposals related to a subject about which the agreement was silent: the payment of relocation expenses for employees who relocate as a result of promotion from within SSA or other recruitment actions. On February 1, 1988, SSA by letter declined to participate in such bargaining. After AFGE filed a charge with the Federal Labor Relations Authority (FLRA) alleging that SSA had failed to bargain in good faith, the FLRA regional director filed an administrative complaint against SSA. The FLRA complaint alleged that SSA “has failed and refused... to negotiate in good faith with the Union over Union initiated midterm bargaining proposals concerning payment of relocations expenses” and that such refusal constituted an unfair labor practice in violation of 5 U.S.C. § 7116(a)(1) and (5).
A hearing before an administrative law judge followed. Before the AU, SSA stipulated to all the factual allegations in the FLRA complaint. SSA argued, however, that federal agencies are not required to bargain over midterm union proposals and that, in any event, in the agreement AFGE waived its right to initiate midterm bargaining. The AU rejected SSA’s arguments and concluded that SSA had committed an unfair labor practice. First, relying on FLRA precedent, the AU concluded that the FSLMRS obligated SSA to bargain over midterm union proposals that involve subjects not covered in the collective bargaining agreement. Further, the AU held that the agreement did not establish “a clear and unmistakable waiver” of the union’s right to initiate midterm bargaining. According to the AU, although the reopen-er provision in Article 7 barred additions to the existing contract, it did not bar the execution of “a separate agreement covering any newly negotiated matters.” Based on these conclusions, the AU issued a recommended cease and desist order.
SSA filed exceptions to the decision of the ALJ. The FLRA then affirmed the AU in a brief ruling and adopted his findings, conclusions, and recommended order. See 39 FLRA No. 52 (1991). Following that decision, SSA filed a petition for review and the FLRA filed a cross-application for enforcement of its order. AFGE has intervened in this appeal in support of the FLRA’s position.
C.
Before proceeding to the merits of the parties’ arguments, we must place the question of union-initiated midterm bargaining in its historical context. The position of the FLRA before this court — that the statute requires an agency to engage in midterm bargaining over any issue not contained in the collective bargaining agreement, unless the union had waived its right to bargain about the subject matter involved — is contrary to the FLRA’s initial resolution of this issue. In a comprehensive 1985 decision, the FLRA concluded that, “other than negotiations leading to a basic collective bargaining agreement, there is no obligation to bargain over union-initiated proposals.” Internal Revenue Serv. (IRS I), 17 FLRA 731, 736 (1985). The FLRA relied not only on statutory language, id. at 732-34, and legislative history, id. at 735-36, but also upon its conclusions that “an obligation to negotiate union initiated mid-term bargaining proposals did not exist under the Executive Order,” id. at 737 n. 7, and that requiring union-initiated midterm bargaining would undermine the policies underlying the statute, id. at 736-37.
On review, the District of Columbia Circuit refused to enforce the FLRA decision. See National Treasury Employees Union v. FLRA (NTEU), 810 F.2d 295 (D.C.Cir.1987). Arguing that there was no support in the statute’s text or legislative history for the FLRA’s decision, id. at 298-99, and relying heavily on the fact that there is a duty to bargain midterm in private-sector labor relations, id. at 299-300, the court concluded that to deny a union the right to initiate midterm bargaining while an agency retained such a right would violate an asserted “statutory ‘goal of equalizing the positions of labor and management at the bargaining table.’ ” Id. at 300-01 (quoting American Fed’n of Gov’t Employees v. FLRA, 750 F.2d 143, 148 (D.C.Cir.1984)).
On remand, the FLRA simply adopted the position taken by the D.C. Circuit and concluded that:
[T]he duty to bargain in good faith imposed by the Statute requires an agency to bargain during the term of a collective bargaining agreement on negotiable union proposals concerning matters which are not contained in the agreement unless the union has waived its right to bargain about the subject matter involved.
Internal Revenue Serv. (IRS II), 29 FLRA 162, 166 (1987). In subsequent cases, including the instant one, the FLRA has adhered to its position in IRS II, without additional discussion or analysis. See, e.g., U.S. Army Corps of Engineers, Kansas City Dist., 31 FLRA 1231 (1988); Internal Revenue Serv. (Dist. Office Unit), 29 FLRA 268 (1987).
II.
We may set aside the FLRA’s decision only if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. §§ 706(2)(A), 7123(c). The FLRA “is entitled to considerable deference when it exercises its ‘special function of applying the general provisions of the [FSLMRS] to the complexities’ of federal labor relations.” BATF, 464 U.S. at 97, 104 S.Ct. at 444 (quoting NLRB v. Erie Resistor Corp., 373 U.S. 221, 236, 83 S.Ct. 1139, 1149-50, 10 L.Ed.2d 308 (1963)). An agency interpreting the statute it is charged with implementing is entitled to deference, however, only if “the statute is silent or ambiguous with respect to the specific issue” before the court. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). Based upon our examination of “the particular statutory language at issue, as well as the language and design of the statute as a whole,” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 1817, 100 L.Ed.2d 313 (1988), we believe that “it is clear that [the FLRA’s] interpretation is incorrect,” Fort Stewart Schools v. FLRA, 495 U.S. 641, 110 S.Ct. 2043, 2046, 109 L.Ed.2d 659 (1990), because “Congress has directly spoken to the precise question at issue,” Chevron, 467 U.S. at 842, 104 S.Ct. at 2781. Accordingly, “we need look no further, ‘for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.’ ” Fort Stewart Schools, 110 S.Ct. at 2046 (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781-82). As the Supreme Court has noted:
The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent. If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.
Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. at 2781 n. 9 (citations omitted).
A.
The starting point for our analysis, of course, must be the language of the statute. A textual analysis is not definitive in this case, for the FSLMRS does not explicitly discuss union-initiated midterm bargaining apart from the context of agency changes in the conditions of employment. Nonetheless, we believe that the statutory language strongly suggests that bargaining over midterm union proposals was not mandated by Congress. In particular, Congress addressed the duty to bargain in language that seems to contemplate that such a duty arises as to only one, basic agreement: “Any agency and any exclusive representative in any appropriate unit in the agency, through appropriate representatives, shall meet and negotiate in good faith for the purposes of arriving at a collective bargaining agreement.” 5 U.S.C. § 7114(a)(4) (emphasis added). Likewise, the duty to bargain in good faith is defined to include the obligation to negotiate “with a sincere resolve to reach a collective bargaining agreement.” Id. § 7114(b)(1); see also, e.g., id. § 7114(b)(5) (requiring parties “to take such steps as are necessary to implement such agreement”). Although Congress was surely aware that union-initiated midterm bargaining was an available option, it chose language that appears to exclude that possibility. The statutory assumption seems to have been that of one comprehensive agreement that serves to ensure workplace stability during its designated term.
Moreover, there is an additional indication in the statutory text that union-initiated midterm bargaining was not contemplated by Congress. Congress did contemplate that an agency was obligated to bargain midterm over the impact and implementation of changes in the conditions of employment initiated by the agency. See 5 U.S.C. § 7106(b)(2) and (3). When Congress did require midterm bargaining, it thus spelled out the context in which such bargaining was to take place. The inclusion of a specific duty of midterm effects bargaining, therefore, suggests the inadvisability of reading a more general duty into the statute.
B.
This reading of the statutory text is confirmed by the statute's legislative history. A Senate report accompanying the Senate version of the statute explained an agency’s duty of good-faith bargaining as follows:
[The bill] provides that the agency and the labor organization shall negotiate in good faith for the purpose of arriving at an agreement. [¶] The parties have a mutual duty to bargain not only with respect to those changes in established personnel policies proposed by management, but also concerning negotiable proposals initiated by either the agency or the exclusive representative in the context of negotiations leading to a basic collective bargaining agreement. Where agency management proposes to change established personnel policies, the exclusive representative must be given notice of the proposed changes and an opportunity to negotiate over such proposals to the extent they are negotiable.
S.Rep. No. 969, 95th Cong, 2d Sess. 104 (1978), reprinted in Legislative History, supra, at 740, 764. Thus, the Senate report indicates that an agency’s duty to bargain arises in only two contexts: (1) during negotiations leading to “a basic collective bargaining agreement,” and (2) in response to midterm changes by the agency in the conditions of employment. Given the absence of other relevant legislative history, we believe that this Senate report indicates that Congress did not intend an agency’s duty to bargain in good faith to include union-initiated midterm bargaining other than in response to changes in employment conditions by the agency. Indeed, this is precisely how the FLRA interpreted the statute’s legislative history in IRS I. See 17 FLRA at 735-36.
Rather than suggesting that this language bears a contrary meaning, the FLRA asserts that the District of Columbia Circuit was correct in refusing to rely on this Senate report. That circuit argued that reliance on Senate legislative history was improper because Congress eventually adopted the House version of the statute. Since the House version contained a somewhat broader view of collective bargaining in the federal sector than did the Senate version, the D.C. Circuit argued that Congress “repudiated” the Senate version and that the Senate legislative history did not “survive” this repudiation. See NTEU, 810 F.2d at 298-99.
With respect, we find this reasoning unpersuasive. The language from the Senate report quoted above explained the Senate version of what became 5 U.S.C. § 7114(a) and, in particular, described the nature of the duty to bargain. In refusing to consider the report, the NTEU court overlooked the critical fact that the Senate version of the statute and the version ultimately adopted did not differ substantively with respect to either the nature or the timing of an agency’s duty to negotiate. Compare S. 2640, 95th Cong., 2d Sess. § 7215(b)(1) (1978), reprinted in Legislative History, supra, at 520 (“An agency and an exclusive representative shall have a duty to negotiate in good faith and in exercising such duty shall... approach the negotiations with a sincere resolve to reach an agreement.”) with 5 U.S.C. § 7114(a)(4) (“Any agency and any exclusive representative in any appropriate unit in the agency, through appropriate representatives, shall meet and negotiate in good faith for the purposes of arriving at a collective bargaining agreement.”). There were, of course, differences between the House and Senate versions regarding the permissible subjects for negotiations — primarily regarding the scope of the management rights provision. None of the versions of the statute, however, addressed the timing of negotiations. Neither the FLRA nor AFGE have pointed us to any indication in the legislative history that the differences between the Senate version and that ultimately adopted related in any way to the appropriateness of midterm bargaining or to any other questions regarding the timing of negotiations. In the absence of any indication that the House and Senate differed on this issue or on the nature of an agency’s duty to bargain, reference to the Senate report is entirely appropriate.
C.
We find further support for the conclusion that union-initiated midterm bargaining is not required by the statute in the practice under the Executive Order. Congress did not intend the FSLMRS to revolutionize federal-sector labor law. To the contrary, Congress intended the FSLMRS generally to codify the practice and policies applicable under the Executive Order. As Congressman Udall, the primary sponsor of the House version that Congress ultimately enacted, stated:
What we really do [in enacting this bill] is to codify the 1962 action of President Kennedy in setting up a basic framework of collective bargaining for Federal employees.... So we are now going to put into the United States Code instead of the Federal Register this basic plan of President Kennedy’s that has worked so well in the last 15 years.
124 Cong.Rec. H9633 (daily ed. Sept. 13, 1978) (remarks of Rep. Udall), reprinted in Legislative History, supra, at 923. Congress wrote this presumption into the statute itself: “Policies, regulations, and procedures established under and decisions issued under Executive Orders 11491, 11616, 11636, 11787, and 11838, or under any other Executive [Ojrder, as in effect on the effective date of this chapter, shall remain in full force and effect until revised or revoked by the President, or unless superseded by specific provisions of this chapter or by regulations or decisions issued pursuant to this chapter.” 5 U.S.C. § 7135(b). And, relying on this presumption, courts have not hesitated to seek guidance from the practice under the Executive Order when the statutory language has been ambiguous. See, e.g., BATF, 464 U.S. at 103, 104 S.Ct. at 447; NLRB Union v. FLRA, 834 F.2d 191, 201-02 (D.C.Cir.1987).
The FLRA has presented no evidence that union-initiated midterm bargaining occurred under the Executive Order. Indeed, in its 1985 decision in IRS I, the FLRA concluded that “an obligation to negotiate union initiated mid-term bargaining proposals did not exist under the Executive Order” except in response to agency changes in employment conditions. 17 FLRA at 737 n. 7. Although it has since repudiated IRS I, the FLRA has never hinted that its prior conclusions about the pre-statute practice were incorrect. Thus, IRS I stands as persuasive evidence of the practice under the Executive Order, which nothing in the statute purports to overturn.
D.
In concluding that the statute requires an agency to participate in union-initiated midterm bargaining, both the FLRA and the District of Columbia Circuit in NTEU relied heavily on private-sector labor law. See NTEU, 810 F.2d at 299-300; IRS II, 29 FLRA at 165-66. It is not disputed that, under the National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., the duty to bargain extends to midterm proposals initiated by either management or labor that do not conflict with the existing collective bargaining agreement. See NLRB v. Jacobs Mfg. Co., 196 F.2d 680, 684 (2d Cir.1952). The NTEU court argued that long-standing private-sector precedent is properly applied to the public sector because:
There is no question that Congress was fully aware of the analogy between the [FSLMRS] and the National Labor Relations Act (NLRA). Indeed, the FLRA was modeled on the NLRB, and other provisions of [the FSLMRS] are crafted either by analogy or by contrast. [11] It is also apparent that Congress paid close attention to judicial precedent in private sector labor law when drafting the statute.
810 F.2d at 299 (citations omitted).
Whatever use private-sector labor law may have in other contexts, we do not believe that it is controlling here. As the Supreme Court has recently cautioned, the FSLMRS and the NLRA “deal with labor-management relations in entirely different fields of employment, and the FSLMRS contains no indication that it is to be read in pari materia with” the NLRA. Fort Stewart Schools, 110 S.Ct. at 2047. The District of Columbia Circuit has itself recognized that “the degree of relevance of private sector case law to public sector labor relations will vary greatly depending upon the particular statutory provisions and legal concepts at issue.” Library of Congress v. FLRA, 699 F.2d 1280, 1287 (D.C.Cir.1983); accord American Fed’n of Gov’t Employees, Local 2094 v. FLRA, 833 F.2d 1037, 1045 (D.C.Cir.1987). “[T]he [FSLMRS] itself must ultimately be interpreted in the context of its own language, history, and case law.” National Treasury Employees Union v. FLRA, 826 F.2d 114, 122 (D.C.Cir.1987) (emphasis in the original).
The differences between the FSLMRS and the NLRA persuade us that transference of private-sector labor law is inappropriate in this context. The NLRA explicitly provides that there is no duty to engage in midterm bargaining over matters “contained in” the collective bargaining agreement. NLRA § 8(d), 29 U.S.C. § 158(d). The FSLMRS contains no comparable provision. We view the absence in the FSLMRS of a limitation on midterm bargaining comparable to § 8(d) as a strong indication that Congress did not believe that union-initiated midterm bargaining would be required under that statute. Although the FSLMRS recognizes public sector bargaining as important to the amicable settlement of workplace differences, the scope of such bargaining under the FSLMRS remains significantly narrower than that under the NLRA. See Library of Congress, 699 F.2d at 1287. Because Congress intended bargaining rights to be more limited under the FSLMRS than under the NLRA, we find it inconceivable that Congress would have omitted the § 8(d) limitation on midterm bargaining had Congress in fact intended the FSLMRS to require such bargaining in the first place.
Moreover, the NTEU court’s suggestion to the contrary notwithstanding, see 810 F.2d at 300, there are important “practical distinctions,” id., between the public sector and the private sector that counsel against importing private-sector concepts into the FSLMRS in this context. In the private sector, once an impasse is reached, the union’s alternative is often to strike — a drastic measure that is unlikely to be utilized midterm because all issues worthy of such action typically are resolved by the basic collective bargaining agreement. In the public sector, however, the union may move upon impasse to binding FSIP arbitration. See 5 U.S.C. § 7119(b) and (c). Because FSIP arbitration — unlike striking — is relatively costless for a union to invoke, many more midterm negotiations would be expected in the public sector than the private sector.
More important, public-sector unions could use binding arbitration over midterm proposals to achieve a tactical advantage that is absent in the private sector. A union can gain a tactical advantage by negotiating — and then arbitrating — issues se-riatim rather than as a unified package. Yet the very essence of bargaining is compromise and concession. By withholding a particular proposal during the negotiations over the basic agreement, a union avoids the necessity of making a concession to the agency in order to achieve agency acceptance of the proposal, but it keeps alive the possibility of obtaining the proposal through subsequent imposition by FSIP arbitration. Moreover, by arbitrating a string of unrelated proposals piecemeal rather than in the context of negotiations toward a basic agreement, a union may be able to achieve an overall set of arbitration-enforced concessions that exceeds both what it could have obtained through one set of unified negotiations leading to a basic agreement and what an arbitrator would have awarded had all issues been arbitrated together. These concerns are simply absent in the private sector, because the NLRA, unlike the FSLMRS, provides no statutory mechanism by which an employer who has bargained in good faith to impasse can be forced to binding arbitration against its will. See NLRB v. American Nat’l Ins. Co., 343 U.S. 395, 401-04, 72 S.Ct. 824, 828-30, 96 L.Ed. 1027 (1952).
One final factor suggests that Congress should not be charged with silently transplanting the private-sector rule into public-sector labor relations. In the public sector a union faces less of a financial disincentive to midterm bargaining than is present in private-sector labor relations. That private-sector unions must incur the expenses entailed in negotiations gives them a strong incentive to join with management in structuring the negotiating process in a manner least disruptive and costly to both the employer and the union. In the public sector, by contrast, that incentive is diminished because the statute requires the government to subsidize union negotiators. See 5 U.S.C. § 7131(a).
For all these reasons, we are convinced that Congress did not intend the FSLMRS to require bargaining over midterm union proposals.
III.
Approval of union-initiated midterm bargaining would also contravene many of the basic purposes of the FSLMRS. An overriding goal of the statute is to protect the “paramount right of the public to as effective and efficient a Government as possible.” H.R.Conf.Rep. No. 1717, 95th Cong., 2d Sess. 154 (1978), reprinted in Legislative History, supra, at 793, 822; see also BATF, 464 U.S. at 92, 104 S.Ct. at 441-42 (noting that the FSLMRS “carefully preserv[ed] the ability of federal managers to maintain ‘an effective and efficient Government’ ”); National Treasury Employees Union v. FLRA, 691 F.2d 553, 560-61 (D.C.Cir.1982). Indeed, “Congress recognized in [the FSLMRS] ‘the special requirements and needs of the Government,’ and carefully directed that its provisions be interpreted ‘in a manner consistent with the requirements of an effective and efficient Government.’ ” HHS, 844 F.2d at 1089 (quoting 5 U.S.C. § 7101(b)).
Union-initiated midterm bargaining risks serious interference with this most basic of statutory objectives. As the FLRA recognized in its original analysis of this issue, union-initiated midterm bargaining would diminish “the ability of the parties to rely upon... basic [collective bargaining] agreements as a stable foundation for their day-to-day relations.” IRS I, 17 FLRA at 736. Moreover, “[p]arties would be discouraged from engaging in the effort, as part of negotiation of their basic collective bargaining agreement, to foresee potential labor-management relations issues, and resolve those issues in as comprehensive a manner as practicable.” Id. Rather, as explained above, permitting union-initiated midterm bargaining “would encourage dispersal of the collective bargaining process” and thereby result in seriatim midterm bargaining — and then seriatim FSIP arbitration — over individual issues raised midterm. Id. at 736-37. Such an approach to federal-sector labor relations would “enhance the prospect for protracted conflict” that undermines an agency’s effectiveness and would result in “the continuous expenditure of resources for both management and [union] representatives.” Id. at 737.
The FLRA now responds to these concerns by suggesting that the two exceptions it has crafted to union-initiated midterm bargaining allow agencies to mitigate these considerations. First, the FLRA asserts that agency management can avoid the deleterious effects of midterm bargaining on an agency’s effectiveness and efficiency simply by negotiating a union waiver, in a so-called zipper clause, of the union’s right to negotiate midterm apart from impact and implementation issues. See IRS II, 29 FLRA at 166-67. Negotiated waivers, however, are not an adequate solution to the problem. Neither the FLRA nor any court has resolved the question whether such waivers are mandatory subjects of bargaining that an agency may negotiate to impasse. If waiver clauses are only permissive subjects of negotiation, an agency would be denied access to FSIP arbitration over a union’s refusal to accept such a clause in the basic labor contract.
More fundamentally, the FLRA’s approach to zipper clauses ensures the very uncertainty and litigiousness the FLRA asserts they would allow an agency to avoid. The FLRA interprets zipper clauses as waivers of employees’ statutory rights that must be shown to be “clear and unmistakable.” See IRS II, 29 FLRA at 166. According to the FLRA, application of this standard requires inquiry into “the wording of the provision[,]... other relevant provisions of the contract, bargaining history, and past practice.” Id. at 166-67. Because determinations as to whether a waiver is “clear and unmistakable” are made on a case-by-ease basis, id. at 166, an agency will often be unsure whether the FLRA will, in fact, find a particular contractual provision to be an adequate waiver. Indeed, in private-sector labor law, application of the clear and unmistakable waiver standard in this context has “sowed the seed for hopeless confusion over the legal obligations of bargaining parties.” Edwards, Deferral to Arbitration and Waiver of the Duty to Bargain: A Possible Way Out of Everlasting Confusion at the NLRB, 46 Ohio St.L.J. 23, 32 (1985). The first exception devised by the FLRA to the midterm bargaining obligation may thus portend nothing more than a repetition of the NLRB’s “long and largely unsuccessful efforts to articulate a coherent theory of the duty to bargain during the contract term, and the doctrine of ‘clear and unmistakable waiver.’ ” Id.
The second posited exception to union-initiated midterm bargaining is that an agency need not negotiate over matters “contained in,” IRS II, 29 FLRA at 166, or “covered by,” Missouri Nat’l Guard, Office of the Adjutant General, 31 FLRA 1244, 1247 (1988), the basic collective bargaining agreement. This exception, however, has no warrant in the language of the statute. Although the FLRA indicated in its brief that the law of midterm bargaining established in IRS II is “just like” that governing midterm bargaining in the private sector, the FSLMRS is not “just like” the NLRA for these purposes. As discussed above, NLRA § 8(d) expressly exempts from midterm bargaining subjects “contained in” a basic labor contract, see 29 U.S.C. § 158(d), but the FSLMRS does not contain a comparable provision. In the absence of some statutory basis for its conclusion, the FLRA acted beyond its authority in finding this exception to midterm bargaining.
Moreover, we cannot embrace the argument of the District of Columbia Circuit that the presence of union-initiated midterm bargaining will promote the policies underlying the statute. Dismissing the FLRA’s argument in IRS I that union-initiated midterm bargaining undermines effective and efficient government, the NTEU court argued that “Congress... has already drawn the opposite conclusion” in its determination “that collective bargaining contributes to stability in federal labor-management relations, and to effective and efficient government.” NTEU, 810 F.2d at 300 (citing 5 U.S.C. § 7101(a)). This argument, however, is unconvincing. That Congress determined that, in general, bargaining “contributes to the effective conduct of public business,” 5 U.S.C. § 7101(a)(1)(B), does not imply that Congress believed that the public interest is furthered by bargaining in all circumstances and over all subjects. Indeed, the contrary is manifestly true: In the FSLMRS Congress exempted numerous subjects from an agency’s duty to bargain, see, e.g., id. §§ 7106(a), 7117(a), and, indeed, even exempted numerous federal employees and agencies from the statute altogether, see id. § 7103(a)(2)(B)(i)-(v), (a)(3), and (b).
By the same token, the absence of midterm bargaining will not undercut the statutory commitment to collective bargaining as a basic means of resolving workplace disputes. Any issue that a union wishes to raise can be advanced in the course of negotiating a comprehensive agreement, and issues initially overlooked can be brought up whenever the agreement is renegotiated.
The NTEU court also asserted that failure to mandate union-initiated midterm bargaining would violate “the statutory ‘goal of equalizing the positions of labor and management at the bargaining table.’ ” NTEU, 810 F.2d at 300-01 (quoting American Fed’n of Gov’t Employees, 750 F.2d at 148). Again, we are unpersuaded. The Supreme Court has cautioned that the statute does not “confer on the FLRA an unconstrained authority to equalize the economic positions of union and management,” BATF, 464 U.S. at 108, 104 S.Ct. at 449, and numerous provisions of the FSLMRS— for example, the management rights provision, see 5 U.S.C. § 7106(a) — demonstrate that absolute equality was not Congress’ goal. The court in NTEU failed to demonstrate that Congress sought to maintain equality between an agency and the union in this particular context.
IV.
The FLRA’s decision to require bargaining over midterm union proposals represents an “ ‘unauthorized assumption by [the] agency of [a] major policy decision[] properly made by Congress.’ ” BATF, 464 U.S. at 97, 104 S.Ct. at 444 (quoting American Ship Building Co. v. NLRB, 380 U.S. 300, 318, 85 S.Ct. 955, 967, 13 L.Ed.2d 855 (1965)). Mandating such bargaining is a step with profound implications for public-sector labor law. We believe that such a step is “ ‘inconsistent with [the] statutory mandate [and] frustrate^] the congressional policy underlying [the] statute.’ ” Id. (quoting NLRB v. Brown, 380 U.S. 278, 291-92, 85 S.Ct. 980, 988, 13 L.Ed.2d 839 (1965)). As a result, the FLRA’s decision is “not in accordance with law
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
Order affirmed on opinion below, In re Educational Pictures, 34 F.Supp. 807.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
HAYNSWORTH, Chief Judge.
Wallace complains of his conviction of a violation of 18 U.S.C.A. § 111 as a result of an assault committed by him upon an agent of the Alcohol and Tobacco Tax Division. His complaint is that the District Court, to whom the case was tried without a jury, did not specifically resolve the factual question of the defendant’s knowledge, at the time of the assault, that the victim was a federal agent. Even if that knowledge was absent at the time, we think the statutory offense was committed and the defendant properly convicted.
The defendant was working in an illicit still when it was raided by law enforcement officials, among them, an agent of the Alcohol and Tobacco Tax Division. According to the officers, the federal agent announced and identified himself, but the defendant claimed that he heard no such announcement and did not recognize the intruder. He struck at and hit the federal agent with a heavy stick or club before he was subdued.
Though the record would have abundantly justified a specific finding that the defendant did know that the man who approached him was a federal revenue agent, the District Court, nevertheless, declined to make that specific finding upon the ground that such knowledge was not an essential element of the offense. .
In this posture of the case, we would be required to remand the case for additional findings of fact, unless we accept the District Court’s theory of the reach of the statute. We do agree with it on that score, and, accordingly, affirm.
Title 18, § 111 prescribes a penalty for a forcible assault upon or interference with a federal official as defined in § 1114 while the official is "engaged in or on account of the performance of his official duties.” The statute contains no words which can reasonably be said to require that the actor know at the time that the victim of the assault, or the person with whom he interferes, is a federal officer engaged in his official duty.
In many cases it has been assumed that the requirement of scienter was implicit in the statute. The assumption probably sprang from Pettibone v. United States, 148 U.S. 197, 13 S.Ct. 542, 37 L.Ed. 419, dealing with a different statute of somewhat similar purpose. Such an assumption was made by this Court in Owens v. United States, 4 Cir., 201 F.2d 749, where the issue tendered was the sufficiency of the record to support the finding that the defendant did know the official status of the victim. More recently, in United States v. Chunn, 4 Cir., 347 F.2d 717, we noted the difference of opinion on the subject, but felt it unnecessary to take a firm stand one way or another, since, in that case, it clearly appeared that the defendant did have such knowledge. There is no other case referring to the question in this Court, so that, in this jurisdiction, it is unresolved.
Elsewhere there have been a number of cases holding or assuming that actual knowledge of the federal official status of the victim was a necessary element of the offense.
In McNabb v. United States, 6 Cir., 123 F.2d 848, reversed on other grounds, 318 U.S. 332, 63 S.Ct. 608, 87 L.Ed. 819, it was held that scienter is not a necesesary element of an offense under 18 U.S.C.A. § 1114. That Section makes it unlawful to kill an officer of the United States while engaged in the performance of his official duties or on that account, and, with respect to the legal issue before us, it is indistinguishable from the related § 111. Nonfatal wounding of a federal officer engaged in his official duty requires no more specific intention than § 1114 requires upon a fatal wounding. This was recognized by the Fifth Circuit in Bennett v. United States, 5 Cir., 285 F.2d 567, in which it was held that specific knowledge of the official position of the victim was not an essential element of an offense under § 111.
More recently, the same position has been taken by the Second Circuit in United States v. Lombardozzi, 2 Cir., 335 F.2d 414, and that position was quite recently reaffirmed in United States v. Montanaro, 2 Cir., 362 F.2d 527.
As the Court of Appeals for the Second Circuit observed in Lombardozzi, “the meager legislative history suggests that in section 111 Congress merely sought to provide a federal forum for the trial of cases involving various offenses against federal officers in the performance of official duties.” An attack which would constitute a common law offense of battery, for which the actor could be prosecuted and convicted in a state court, was made by the statute triable and punishable in a federal court if the victim was, in fact, a federal official engaged in the performance of his official duties. Insofar as the statute proscribes resistance, opposition, and intimidation of a federal official or interference with his performance of his official duties, an intentional and unlawful invasion of the rights of the victim is certainly contemplated and the statute does not proscribe reasonable force employed in a justifiable belief that it is exerted in self-defense. So long as the conduct is intended as an unlawful interference with a victim who, in fact, is a federal official engaged in his official duties, the conduct is within the reach of § 111.
Early in the history of this country, the Congress found it necessary to grant customs collectors and others the right to remove state prosecutions against them arising out of the performance of their official duties to a federal court for trial there. It was but a corollary of such statutes that the antecedents of §§ 111 and 1114 were enacted to assure that those who unlawfully attacked or interfered with federal officials engaged in their official duties were triable in a federal court and were not left to the possibly grave uncertainties of retribution in a state court in which the juries might be quite unsympathetic to the federal purpose. Knowledge that the victim was a federal official engaged in the performance of his official duties is critical at the time of trial, of course, but the underlying considerations of the Congress in the adoption of the statutes do not make such specific knowledge on the part of the defendant at the time the defendant acted an essential element of the offense.
We think the statute was properly construed in Bennett, Lombardozzi and Montanaro. With them, we agree that the offense was made out when it was proven that the defendant struck the revenue agent with the club without the necessity of a specific finding that he heard and understood the declarations of his identity and purpose.
Affirmed.
. See, Hargett v. United States, 5 Cir., 183 F.2d 859; United States v. Bell, E.D.N.Y., 219 F.Supp. 260; United States v. Miller, D.Vt., 17 F.R.D. 486; United States v. Page, W.D.Va., 277 F. 459; United States v. Taylor, C.C.E.D.Va., 57 F. 391.
. See, for instance, the Act of February 4, 1815, Chap. 31, § 8, 3 Stat. 195-198; the Act of March 2, 1833, Chap. 57, § 3, 4 Stat. 632, 633; Civil Rights Act of 1866, Act of April 9, 1866, 14 Stat. 27.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
VANCE, Circuit Judge:
Appellant Robert E. Mitchell was charged in a four-count indictment with violating 18 U.S.C. § 658 by intentionally disposing of property mortgaged to the Farmers’ Home Administration (FmHA). At the close of the government’s case the district court granted Mitchell’s motion for judgment of acquittal as to counts three and four. Mitchell was convicted, however, on counts one and two. He was given two concurrent three year sentences, all but six months of which was suspended, and was placed on probation for three years. On appeal, Mitchell asserts that: (1) there was insufficient evidence that the transaction underlying count one was covered by the security agreement or that Mitchell intended to defraud the FmHA; (2) there was insufficient evidence that the soybeans pertinent to count two were subject to the FmHA lien; and (3) the admission into evidence of Ronnie Golden’s testimony constituted reversible error. After considering each claim, we affirm the conviction.
In July 1976 Mitchell received FmHA loans. The first loan, in the amount of $212,500, was an emergency loss loan payable in five annual installments. The second loan, in the amount of $83,250, was an operating loan for the production of the current year’s crops, and was payable January 1, 1977. Under the terms of these loans, the FmHA retained a lien on all crops or plant products growing or to be grown and all inventory, farm products, and supplies owned or thereafter acquired by Mitchell. Should Mitchell sell any crops or anything else covered by the security agreement, the money received was to be paid to the FmHA to reduce his debt. Mitchell also signed a supplementary agreement indicating that he understood that he would retain only that income from the 1976 crop that was in excess of the amount due that year on the two loans.
Count one involved Mitchell’s November 1976 delivery of 3,575.5 bushels of soybeans to the Atmore Truckers Association (Association) in Atmore, Alabama. It was the practice of the Association to make an advance payment when grain was brought in for storage. After selling the grain and deducting the advance, storage charges, and interest, the Association would turn over the balance of the proceeds. In accordance with this practice, the Association issued a check for $15,000 payable to R. E. Mitchell. A week after this transaction the Association received a letter from Samuel Craig, an FmHA employee, advising it of the FmHA’s lien on Mitchell’s crops and requesting that all future checks be issued jointly to Mitchell and the FmHA. In June 1977, when Mitchell completed his transaction with the Association, the settlement check was made jointly payable to R. E. Mitchell and the FmHA. Mitchell did not apply to his loans the $15,000 advance that he had previously received, however, but used it instead to pay the 1977 rent for his farm land.
Count two involved a July 1977 purchase by Farmers Mutual Exchange (Farmers Mutual) in Summerdale, Alabama of 819.46 bushels of soybeans from Mitchell and its issuance to him of two checks totaling $4,761.07. On the back of each check was a statement that the person to whom the check was made payable certified that the grain described was free and clear of any liens or encumbrances, other than those listed. Mitchell listed no encumbrances or liens on either check.
In September 1976 Ronnie Golden, an employee of United Grain Company (United Grain) in Jay, Florida, stored corn for Mitchell and issued to him two partial advance checks totaling $8,000. In October 1976 Craig notified United Grain that any further payments made to Mitchell should be issued jointly with the FmHA because the FmHA held a lien on Mitchell’s crop. Mitchell subsequently made a second delivery of corn to United Grain, but after being informed that payment would have to be made jointly, he said that he would take his corn elsewhere.
Sufficiency of the Evidence
Mitchell asserts that there is insufficient evidence to uphold his conviction under either remaining count of the indictment. The standard of review as to the sufficiency of the evidence is whether a reasonably minded jury would necessarily have a reasonable doubt as to the defendant’s guilt. E.g., United States v. Cardona, 650 F.2d 54, 57 (5th Cir. 1981); United States v. Gonzalez, 617 F.2d 104, 106 (5th Cir.), cert. denied, 449 U.S. 868, 101 S.Ct. 202, 66 L.Ed.2d 86 (1980). In applying this standard the court must view the evidence in the light most favorable to the government, see Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942), and make all reasonable inferences and credibility choices that tend to support the jury’s verdict. See, e.g., United States v. Cardona, 650 F.2d at 57; United States v. Yanes, 628 F.2d 294, 295 (5th Cir. 1980).
Mitchell first contends that he did not “dispose” of soybeans to the Association, as charged in count one of the indictment, because at the time he received the $15,000 advance no sale had taken place. Mitchell does not dispute that he applied the $15,000 to his land lease, but maintains that the government failed to prove that he had the necessary intent to defraud the FmHA. Mitchell asserts that the only evidence of his intent to defraud was Golden’s testimony concerning a grain storage transaction not covered by the indictment, and that, since Golden’s testimony was hesitant and unpersuasive and was contradicted by Mitchell, the jury must have had a reasonable doubt as to Mitchell’s intent to defraud.
The record contains sufficient evidence to support the jury verdict on count one. The FmHÁ held a lien on all crops growing or to be grown by Mitchell, and Mitchell agreed in writing that all income from his 1976 crop was to be paid to the FmHA. The $15,000 advance constituted proceeds from crops and Mitchell’s intentional application of that sum to his land rental payment is not excused by the understandablé desire to maintain his farm as an ongoing operation.
Mitchell’s second contention is that the government failed to demonstrate beyond a reasonable doubt that the soybeans that were the subject of count two had been mortgaged to the FmHA. He claims that the soybeans sold to Farmers Mutual consisted of seed beans not included in the FmHA farm reports or subject to the lien, and screenings received in partial payment for cleaning soybeans belonging to other farmers. Even if Mitchell’s testimony concerning the source of the soybeans sold to Farmers Mutual is accepted, the beans were still subject to the FmHA lien, which covered all farm products and supplies acquired by Mitchell.
Extrinsic Evidence
Mitchell’s final contention is that Golden’s testimony concerning the events surrounding Mitchell’s second effort to store grain with United Grain was so highly prejudicial as to constitute reversible error under Rule 404(b) of the Federal Rules of Evidence. The decision of the former fifth circuit in United States v. Beechum, 582 F.2d 898 (5th Cir. 1978) (en banc), cert. denied, 440 U.S. 920, 99 S.Ct. 1244, 59 L.Ed.2d 472 (1979), governs the propriety of the admission of such extrinsic offense evidence. See Bonner v. City of Prichard, Alabama, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc). First, the evidence must be relevant to an issue other than the defendant’s character. Second, the probative value of the evidence must not be substantially outweighed by its undue prejudice, and the evidence must be otherwise admissible under Rule 403. United States v. Beechum, 582 F.2d at 911.
The first prong of Beechum can be satisfied if the evidence goes to the defendant’s intent, the extrinsic offense requires the same intent as the charged offense, and the jury could find that the defendant committed the extrinsic offense. Id. at 913. In this case, the evidence elicited from Golden concerned Mitchell’s intent to defraud the FmHA, an issue that was clearly pertinent in this prosecution. Additionally, there was substantial evidence from which the jury could conclude that Mitchell committed the extrinsic offense.
Whether Beech urn’s second prong has been satisfied depends upon the circumstances of the extrinsic offense. Factors to be considered include the strength of the government’s case on the issue of intent, the overall similarity of the extrinsic and charged offenses, the amount of time separating the extrinsic and charged offenses, and whether it appeared at the commencement of trial that the defendant would contest the issue of intent. Id. at 914-15; see United States v. Guerrero, 650 F.2d 728, 734 (5th Cir. 1981). The trial judge has wide discretion in evaluating these factors, and will not be reversed on appeal unless the defendant can demonstrate abuse of that discretion. United States v. Johnson, 585 F.2d 119, 125 (5th Cir. 1978); Wright v. Hartford Accident & Indemnity Co., 580 F.2d 809, 810 (5th Cir. 1978); We think it clear that the trial judge did not abuse his discretion. The evidence indicates that Mitchell sold grain to Golden at United Grain under substantially similar conditions within three months of the transaction with the Association and within twelve months of the transaction with Farmers Mutual, and that he intended to convert the proceeds of that extrinsic transaction to his own use. Furthermore, it was evident from the outset of the trial that Mitchell’s intent would be a disputed issue, a fact borne out by his contentions on appeal. See United States v. Beechum, 582 F.2d at 915; United States v. Adderly, 529 F.2d 1178, 1182 (5th Cir. 1976). Considering the posture of this case, the similarity of the charged and extrinsic transactions, and the fact that the extrinsic offense is not of a heinous nature likely to incite the jury to an irrational decision or otherwise run afoul of Rule 403, we find that the government evidence here complied with Rule 404(b).
AFFIRMED.
. Section 658 of Title 18 of the United States Code provides:
Whoever, with intent to defraud, knowingly conceals, removes, disposes of, or converts to his own use or to that • of another, any property mortgaged or pledged to, or held by . . . the Secretary of Agriculture acting through the Farmers’ Home Administration . . . shall be fined not more than $5,000 or imprisoned not more than five years, or both; but if the value of such property does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both.
. See Uniform Commercial Code § 9-306(1), which provides:
(1) “Proceeds” includes whatever is received upon the sale, exchange, collection or other disposition of collateral or proceeds. . . . Money, checks, deposit accounts and the like are “cash proceeds.” All other proceeds are “noncash proceeds.”
The rights and liabilities of the parties to a suit arising from a Farmers’ Home Administration loan transaction are to be determined according to federal law. United States v. Hext, 444 F.2d 804, 808 (5th Cir. 1971). This federal common law is to be developed with general principles of commercial law in mind. See United States v. Crittenden, 563 F.2d 678, 681 (5th Cir. 1977), vacated, 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711 (1979), on remand, 600 F.2d 478 (5th Cir. 1979). Accordingly, we adopt the 1972 U.C.C. definition of proceeds. We find it impossible to read “other disposition of collateral” to exclude a transfer for subsequent sale which results in an advance payment, as was the case here.
. The “splits” or “screenings” were soybeans that remained after cleaning and were either too large, too small, or split.
. Rule 404(b) of the Federal Rules of Evidence provides:
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.
. Rule 403 of the Federal Rules of Evidence provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
. That the defendant committed the extrinsic offense need not be proven beyond a reasonable doubt or by clear and convincing evidence. Under Rule 104(b) of the Federal Rules of Evidence such preliminary facts can be decided by the judge against the proponent only if a jury could not reasonably find the fact to exist. United States v. Beechum, 582 F.2d 898, 913 (5th Cir. 1978) (en banc), cert. denied, 440 U.S. 920, 99 S.Ct. 1244, 59 L.Ed.2d 472 (1979).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
A. LEON HIGGINBOTHAM, Jr., Circuit Judge.
The appellant, James J. Liotta, formerly President of the Local 1573 of the United Steelworkers of America, AFL-CIO (the Union), was discharged from his employment with the National Forge Company (the Company) on March 16, 1976. This followed his participation in a work stoppage at the Company’s Erie, Pennsylvania plant which began on March 3, 1976 and ended on March 11, 1976. Liotta filed a grievance pursuant to the terms of the collective bargaining agreement then in effect. His grievance was denied by an arbitrator on August 3, 1976. On March 16, 1978, he filed this action alleging first that his discharge violated the collective bargaining agreement in violation of Section 301 of the National Labor Relations Act, 29 U.S.C. § 185 and that the arbitrator’s contrary decision resulted from the Union’s breach of its duty of fair representation. Second, he claimed that the Company discharged him because of his espousal of the rights of the Company’s black employees, discriminating against him in violation of 42 U.S.C. § 1981. Liotta appeals from the entry of summary judgment for the Company. The Company cross appeals on the ground that Liotta’s complaint is barred by the applicable statutes of limitations. We conclude that his claim under Section 301 is time barred, that his claim under 42 U.S.C. § 1981 is not time barred, and that summary judgment was inappropriate on his Section 1981 claim because of the existence of material issues of fact. We will therefore affirm in part and reverse in part.
I.
The first question we must answer is whether Liotta’s Section 301 cause of action was untimely and therefore whether the Company’s motion to dismiss should have been granted. The Company’s motion was based on the ground that Liotta’s claims were barred by the three-month statute of limitations of the Pennsylvania General Arbitration Act, Pa.Stat.Ann. tit. 5 § 173 (Purdon 1963). The district court held that the six-year limitations period for actions upon a contract applied.
We believe the district court erred. In UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 704-05, 86 S.Ct. 1107, 1113, 16 L.Ed.2d 192 (1966), the Supreme Court held that “the timeliness of a § 301 suit ... is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations.” Courts within this circuit have consistently applied the three-month limitations period to suits seeking to vacate an arbitrator’s award. Cole v. United Steelworkers, 441 F.Supp. 1346, 1351 (M.D.Pa.1977), aff’d mem., 588 F.2d 819 (3d Cir. 1978); Siskey v. General Teamsters, Chauffeurs, 419 F.Supp. 48, 50 (W.D.Pa. 1976); UMWA v. Jones & Laughlin Steel Corp., 378 F.Supp. 1206, 1211-12 (W.D.Pa. 1974); International Brotherhood v. Motor Freight Express, 356 F.Supp. 724, 726 (W.D. Pa.1973).
It is important to identify the nature of Liotta’s first cause of action since the three-month statute of limitations of Pennsylvania’s General Arbitration Act would apply only where one seeks to vacate an arbitrator’s award. A fair reading of Liotta’s complaint demonstrates that he seeks to vacate the arbitrator’s decision. Paragraph 22 of his complaint alleges that he “was unfairly represented before, during and after Arbitration by the” attorney for the International Union. App., at 10. Paragraph 23 alleges that the “Arbitration itself was improper and unfair.” App., at 12. Indeed, he sought to litigate before the district court the same claim he presented for arbitration, that of improper discharge.
Moreover, the fact that Liotta alleges that the arbitration award is invalid due to the Union’s breach of its duty of fair representation does not change the limitations period because the suit here is against the Company and not the Union. Thus, it is clear that Liotta was dissatisfied with and simply seeks to upset the arbitrator’s decision that the Company did not wrongfully discharge him.
The result we reach comports with the general federal policy favoring arbitration as a means of resolving labor disputes, United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578, 80 S.Ct. 1347, 1350, 4 L.Ed.2d 1409 (1960), and with the federal labor policy that favors the application of shorter limitations period. In International Union, UAW v. Hoosier Cardinal Corp., 383 U.S. 696, 707, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966), the Supreme Court stated:
[Relatively rapid disposition of labor disputes is a goal of federal labor law. Since state statutes of limitations governing contracts not exclusively in writing are generally shorter than those applicable to wholly written agreements, their applicability to § 301 actions comports with that goal.
Courts in other jurisdictions have consistently applied the statute of limitations pertaining to appeals from arbitration awards rather than the longer statute of limitations governing actions bottomed on written contracts when such actions seek to vacate arbitration awards. E. g. Barbarino v. Anchor Motor Freight, Inc., 421 F.Supp. 1003 (W.D.N.Y.1976); DeLorto v. United Parcel Service, Inc., 401 F.Supp. 408 (D.Mass.1975); Hill v. Aro Corp., 275 F.Supp. 482 (N.D.Ohio 1967); contra, Smart v. Ellis Trucking Co., 580 F.2d 215 (6th Cir. 1978), cert. denied, 440 U.S. 958, 99 S.Ct. 1497, 59 L.Ed.2d 770 (1979).
We therefore conclude that Liotta’s first cause of action seeking review and vacation of the arbitration award was untimely and that the Company’s motion to dismiss should have been granted.
II.
The next issue we must consider concerns Liotta’s claim under 42 U.S.C. § 1981. As a threshold matter, however, we must first address the Company’s assertion that this claim is also time barred.
As with Section 301, 42 U.S.C. § 1981 provides no explicit period of limitations and courts are bound to apply the most appropriate limitations period provided by state law. Johnson v. Railway Express Agency, 421 U.S. 454, 462, 95 S.Ct. 1716, 1721, 44 L.Ed.2d 295 (1975). This court, in Davis v. U. S. Steel Supply, 581 F.2d 335 (3d Cir. 1978), held that the six-year statute of limitations for contracts under Pennsylvania law applied to a Section 1981 claim of unlawful discharge. We therefore conclude that Liotta’s second cause of action under 42 U.S.C. § 1981 is not barred as untimely.
With regard to the merits of Liotta’s Section 1981 claim, the district court granted the Company’s motion for summary judgment for the following reasons:
The only evidence which plaintiff has submitted to the court in support of his allegations is a letter from Bobby Kaigler, Compliance Officer of the Erie Human Relations Commission (EHRC), which states that plaintiff testified before the EHRC on behalf of black complainants who were discharged by defendant and that “It is the belief of this office that Mr. James Liotta was terminated from his job because of his constant fight for ‘Equal Rights’ of all men.” (Plaintiff’s summary judgment exhibit 7n). This letter is not an affidavit and it has not been notarized. Consequently, the conclusory “belief” expressed in the letter, which is not based on personal knowledge, is insufficient to create or support an inference that racial discrimination played any part in plaintiff’s discharge. Olympic Junior, Inc. v. David Crystal, Inc., 463 F.2d 1141 (3rd Cir. 1972). No genuine issue of material fact supporting plaintiff’s claim has been presented by plaintiff’s evidence.
Liotta v. National Forge Company, 473 F.Supp. 1139 at 1146 (W.D.Pa.1979) reprinted in App., at 45-46.
Liotta claims, however, that he also submitted to the district court the charge he filed with the Equal Employment Opportunity Commission (EEOC) listing a number of instances where he encouraged black employees to file charges against the Company. The affidavit which was attached to his EEOC charge and which was also before the court, alleged that the Company discharged him in retaliation for his activities in support of the rights of black employees. Specifically, he averred:
I have consistently attempted to eliminate discrimination as practiced by Respondent Employer against Black members of Local 1573 of the United Steelworkers of America. The Respondent Company systematically has violated the non-discrimination clause known as Appendix I of the collective bargaining agreement between National Forge and Local 1573. Some of the ways I opposed discrimination, included the following: I encouraged a large number of Union members to report their allegations of discrimination to the Erie Human Relations Commission; since I began duties as President of Local 1573 in October, 1975, I encouraged a number of Black workers to file charges with such Commission, and advised them of my knowledge of the best way to remedy the specific acts they were complaining of. I also fought the company on a day-to-day basis in trying to make conditions fair for all workers. I helped to take a case to arbitration on behalf of Black worker, Dennis Toliver. Shortly before my discharge, I had notified the Respondent Employer that two other grievances of Black workers (the grievances of Troy Johnson and Aaron Clanton) regarding discrimination claims, were going to be fought through the arbitration phase of the grievance procedure. I have appeared at a number of hearings of the Erie Human Relations Commission regarding the claims of discrimination by Black workers. Respondent Company has a history of unfair discharges of Black workers, and I have been active in opposing such practices.
App., at 51-52.
Our review of this document leads us to conclude that genuine issues of material fact are raised by Liotta’s specific allegations. These are matters that clearly are in dispute and they are material because if proven they could support a finding that the Company’s actions against Liotta were motivated by a racial animus.
In addition, contrary to the Company’s argument, it is clear that Liotta has set forth specific facts, not merely conclusory allegations of wrongdoing by the Company. Moreover, the Company has not denied that these documents were in fact before the district court as part of the record. Instead, the Company challenges the EEOC affidavit as not complying with the technical requirements of Fed.R.Civ.P. 56(e) in that it was not alleged to be based on personal knowledge. That this argument is specious is evident from a reading both of the affidavit and of Rule 56(e). First, Rule 56(e) does not require that the affiant state affirmatively that the averments are based on personal knowledge. Rather, the Rule provides:
Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.
A reading of Liotta’s EEOC affidavit shows that it was “made on personal knowledge,” “set[s] forth . . facts as would be admissible in evidence,” and “show[s] affirmatively that [he] is competent to testify to matters stated therein.”
The fact that these allegations may not be proved at trial if the jury chooses to believe the Company is irrelevant at this stage. What is relevant is that the parties have focused on specific, pertinent issues of fact and disagree strenuously about them. We therefore conclude that summary judgment was inappropriate and that the case should be remanded on the Section 1981 claim. See Bryson v. Brand Insulations, Inc., 621 F.2d 556 (3d Cir. 1980).
III.
Accordingly, we will affirm the district court’s judgment as to Count I of the appellant’s complaint. We will reverse the district court’s grant of summary judgment on the appellant’s Section 1981 claim and remand for further proceedings.
. Section 301(a) provides, in relevant part:
(a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
29 U.S.C. § 185.
. Section 1981 provides:
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
42 U.S.C. § 1981.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
AINSWORTH, Circuit Judge:
In May 1969, plaintiffs Donald and Joyce Price purchased an Admiral refrigerator from a franchised dealer, whose serviceman inspected and installed the refrigerator in plaintiffs’ residence. In August 1971, plaintiffs’ home was destroyed by fire, the origin of which was in the immediate vicinity of the refrigerator’s circuit. Plaintiffs filed a diversity complaint based on strict products liability in tort against Admiral Corporation, the manufacturer of the refrigerator, and General Electric Corporation, the manufacturer of a circuit breaker installed in plaintiffs’ house. Plaintiffs alleged that the cause of the fire was the malfunction of the refrigerator and the circuit breaker. At the close of plaintiffs’ evidence, the trial court granted General Electric’s motion for a directed verdict but denied a similar motion made by Admiral Corporation. Admiral called no witnesses and presented no evidence. The jury returned a verdict in favor of plaintiffs and against Admiral in the sum of $57,656. Motions for judgment n. o. v. and a new trial were denied and Admiral appealed.
Plaintiffs’ theory is that a malfunction within the refrigerator caused overheating in the refrigerator circuit resulting in the fire which destroyed their home. There was considerable interior damage to the refrigerator and the circuitry was almost destroyed.
The principal contention of Admiral on appeal is that the court erred in denying its motion for a directed verdict.
In determining the sufficiency of evidence to create a jury question in a diversity case in connection with motions for a directed verdict or judgment n. o. v., we employ a federal test which is articulated as follows:
On motions for directed verdict and for judgment notwithstanding the verdict the Court should consider all of the evidence — not just that evidence which supports the non-mover’s case— but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury.
Boeing Company v. Shipman, 5 Cir., 1969, 411 F.2d 365, 368, 374. With these principles in mind, we examine the evidence and the contentions of Admiral.
Admiral first contends that plaintiffs failed to meet their burden of proof in establishing the requirements of strict liability under Mississippi substantive law. In Early-Gary, Inc. v. Walters, Miss., 1974, 294 So.2d 181, the latest reported Mississippi Supreme Court decision relating to products liability, the Court discussed the standard by which the liability of a manufacturer is measured for injuries received as a result of the manufacturer’s product. The Court held that there must be proof establishing that plaintiff was injured from a defect in the product which rendered it unreasonably dangerous and that the defect existed at the time it left the hands of the manufacturer, citing State Stove Manufacturing Co. v. Hodges, Miss., 1966, 189 So.2d 113. 294 So.2d at 186.
The record shows uncontradicted proof that no work had been done on the refrigerator from the time of its delivery in the manufacturer’s crate until the time of the fire and that there was no misuse of the product by plaintiffs. Thus a defect, if one existed, was present when it left the control of the manufacturer. See Ford Motor Co. v. Matthews, Miss., 1974, 291 So.2d 169; Early-Gary, Inc. v. Walters, supra.
Admiral contends, however, that there is no direct proof .of the existence of a defect or the causal connection between the defect and the damage suffered. Admiral attributes the fire and resultant damage to the failure of the General Electric circuit breaker to function properly.
The origin of the fire was established by the testimony of the Fire Marshal, the Assistant Fire Marshal, and a qualified fire expert, Richard Payne, to be in the locus of the refrigerator’s circuit receptacle and outlet directly behind the refrigerator. It was further shown by Payne that the insulation on the wire leading from the refrigerator to the wall socket was dry and powdery which indicated to him that the source of the heat was internal. Plaintiff Donald Price testified that there were no other outlets on the refrigerator circuit, and that the flames came from behind the refrigerator. James Stone, an electrical engineer, corroborated the testimony of plaintiff that there were no other outlets on the refrigerator circuit.
Joseph E. Leininger, an expert consulting mechanical electrical engineer, testified that he had examined the interior components of the refrigerator. There were indications of an abnormally high flow of current in the circuit which would tend to create a local heating effect where the plug was inserted into the receptacle, and that this excessive flow of current was caused by an electrical malfunction of one of the internal components of the refrigerator. In his opinion, the refrigerator’s fan motor was the offending object.
There was abundant evidence, direct and circumstantial, from which the jury could infer that a defect existed in the refrigerator, without pinpointing that defect. In Ford Motor Company v. Matthews, Miss., 1974, 291 So.2d 169, the Mississippi Supreme Court held that it is unnecessary for a plaintiff to prove a specific defect in a product in a cause of action based on strict liability. In upholding a judgment in favor of plaintiff, the Court quoted with approval the following excerpt from 2 Frumer and Friedman, Products Liability § 16A[4]e, at 3-306 to 3-310 (1973):
Absolute proof that injury was the result of the defect is not essential, and the burden of proof can be satisfied by showing sufficient facts to allow a jury to infer defective quality and that such defective quality was a substantial element in producing the claimant’s injury.
291 So.2d at 173. See also Ford Motor Company v. Cockrell, Miss., 1968, 211 So.2d 833; Early-Gary, Inc. v. Walters, Miss., 1974, 294 So.2d 181, supra, and Alman Bros. Farms & Feed Mill, Inc. v. Diamond Lab., Inc., 5 Cir., 1971, 437 F.2d 1295, affirming a judgment of the United States District Court for the Southern District of Mississippi. Additionally, the Supreme Court of Mississippi has held that the causal relation between an agency and an injury can be proved circumstantially. Goodyear Tire and Rubber Co. v. Brashier, Miss., 1974, 298 So.2d 685, 688; Tombigbee Electric Power Ass’n v. Gandy, 1953, 216 Miss. 444, 62 So.2d 567, 570.
Applying the standards of Boeing Company v. Shipman, supra, we conclude that the trial court correctly denied Admiral’s motion for a directed verdict.
We have considered the two additional issues raised by Admiral but find them to be without merit. Admiral contends that the district judge erred in allowing Leininger to testify in response to a hypothetical question allegedly not supported by the evidence. Apart from the testimony of Leininger, who was subjected to extensive cross-examination, there was adequate proof to support the jury’s verdict. Moreover, a jury is at liberty to accept or reject expert testimony. Jenkins v. General Motors Corporation, 5 Cir., 1971, 446 F.2d 377; Campbell v. Tennessee Valley Authority, 5 Cir. 1969, 421 F.2d 293. Alman Bros. Farms & Feed Mill, Inc. v. Diamond Lab., Inc., supra. Finally, Admiral contends that the district court prejudiced its case by directing a verdict in favor of General Electric, although it concedes that in view of its failure to object thereto it has little standing to complain in this respect. We find no error. Admiral’s theory that the failure of the circuit breaker to operate was the proximate cause of the fire is without evidentiarysupport.
Affirmed.
. In State Stove v. Hodges, Miss., 1966, 189 So.2d 113, cited by appellant, the product was altered subsequent to its leaving the manufacturer’s control, and is therefore inapplicable.
. Hertz Corporation v. Goza, Miss., 1975, 306 So.2d 657, and Goodyear Tire and Rubber Company v. Brashier, Miss., 1974, 298 So.2d 685, cited by appellant for the proposition that inferences pyramided on inferences amount to no more than speculation or conjecture, are factually distinguishable.
. Appellant Admiral cites Coleman v. Ford Motor Company, Miss., 1970, 240 So.2d 607, as authority that strict liability requires proof of a product defect. We have no quarrel with this statement, nor is the holding of that case in conflict with the present decision. The court there held proper a jury instruction to the effect that even though the jury found a defective product to be the sole cause of an accident, it could nevertheless find for defendant if the product left the manufacturer in a reasonably safe condition for intended use.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
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songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
LIVELY, Circuit Judge.
In this diversity action the purchasers of manufacturing equipment sued the seller-manufacturer for damages. The plaintiffs sought to recover for alleged breach of express and implied warranties, fraud and negligence. In its counterclaim the defendant sought recovery on an account, which was undisputed, and damages allegedly incurred by it as the result of fraudulent misrepresentations of the plaintiffs. Following two lengthy hearings the district court entered judgment in favor of the defendant on all claims of the plaintiffs and on the stated account. The counterclaim based on fraud was dismissed. We affirm.
A complete statement of the facts and legal issues as developed in the district court is set forth in its opinions which are reported at 358 F.Supp. 449 and 358 F.Supp. 467. In dealing with the appeal we will attempt to avoid unnecessary repetition of matters covered in the reported opinions. The plaintiffs will be referred to as Fibres and the defendant as Proctor. The Uniform Commercial Code (UCC) applies to the transactions between the parties and they provided that the law of Pennsylvania governs the construction and interpretation of their written agreements. The various issues on appeal will be treated separately, though briefly, in view of the extended treatment of each by the district court.
The two contracts clearly contained an express warranty against defects in materials or workmanship. Proctor spent large sums in replacing and reworking portions of the equipment which were admittedly defective. However, Fibres maintains that other express warranties were created by detailed description of the ovens in the typewritten portion of the contracts and that these warranties could not be excluded by inconsistent disclaimer language appearing in later printed portions of the contracts. This argument overlooks the fact that both contracts, in the typewritten portions and before the description of the ovens, under the heading PERFORMANCE, provided that “in view of the variables present effecting (sic) the capacity of the machine, no guarantee can be extended.” Immediately following this disclaimer was a statement that “the Company’s standard warranty outlined later in this contract does apply.” The printed warranty clause, identical in both contracts, was as follows:
LIABILITY CLAUSE: The Companys liability hereunder shall be subject to the following:
General:
1. The Company warrants the machine against defects in materials or workmanship, but makes no other warranties, express or implied (except as set forth under “Patents”) unless the word “guarantee” is used. Warranties of merchantability or of fitness for a particular purpose or arising from a course of dealing or usage of trade, are specifically excluded. The Purchaser agrees that any affirmations of fact, description of the machine or sample or model machine herein referred to, whether or not the same relate to production or capability of the machine to perform, are not the basis of this contract, unless the word “guarantee” is used in connection therewith, in which case the same shall be express warranties.
Between the two disclaimers was the description upon which Fibres relies for its claim of express warranties. In the first contract the pertinent language was: “This conveyor is especially designed to hold a tolerance of ± 1/32" across the width of the batt, based on a 30 pound per square foot compressive force.” The second contract stated that —-“This conveyor is especially designed with a deflection tolerance of ± 1/32" across each conveyor plate. This deflection is further based on a uniformly distributed load of 30 pounds per sq. ft.” It is provided in UCC § 2-313(l)(b) that “[a]ny description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.” Exclusion of express warranties is permissible under § 2 — 316(1) of the UCC, which provides that language or conduct creating warranties and that tending to negate them “shall be construed wherever reasonable as consistent with each other. . . . ”
If the machinery involved had been tried and proven in the manufacturing process in which Fibres intended to employ it, or if it had been sold by specification alone, the description might be held to create an express warranty. S — C Industries v. American Hydroponics System, Inc., 468 F.2d 852 (5th Cir. 1972). However, the evidence fully supports the finding of the district court that the parties were attempting to put together a combination of machinery to fabricate a product by an “unproven process.” Furthermore, the general manager of Fibres, Mr. Steuernagel, was fully aware of the “variables” referred to in the disclaimer of guarantee of performance. The language of description referred only to the expectations of the designers and in no way guaranteed that these expectations would be met. Furthermore, there is substantial evidence that executives of Fibres who participated in the purchase of the equipment never expected it to produce finished pads having a thickness tolerance of ± 1/32 inch across their width. Thus, this descriptive language was not “part of the basis of the bargain.” UCC § 2-313(l)(b). The district court correctly determined that the language which excluded an express warranty was not inconsistent with the language of description, UCC § 2-316(1), and gave it effect.
Fibres contends that it was entitled to recover under implied warranties of fitness for a particular purpose and of merchantability. An implied warranty of fitness for a particular purpose exists only “[w]here the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods . . ..” UCC § 2-315. There is abundant factual support in the record for the district court’s finding that Fibres, acting through its agent Steuernagel, did not rely on Proctor’s skill or judgment in selection of the equipment with which it proposed to make dry resinated pads by Steuernagel’s new “secret process.” Therefore, there could be no implied warranty of fitness.
Reliance upon the seller is not a requirement in the case of implied warranties of merchantability. If the seller is a “merchant,” such a warranty is implied in every contract for the sale of goods “[u]nless excluded or modified.” UCC § 2-314. This warranty may be excluded only by language which mentions merchantability and is conspicuous. UCC § 2 — 316(2). The exclusion in this case, which was contained in the previously quoted liability clause, used the word “merchantability.” Thus, the question is whether this disclaimer was “conspicuous” as defined in UCC § 1 — 201(10):
(10) “Conspicuous”: A term or clause, is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals (as: Non-Negotiable Bill of Lading) is conspicuous. Language in the body of a form is “conspicuous” if it is in larger or other contrasting type or color. But in a telegram any stated term is “conspicuous.” Whether a term or clause is “conspicuous” or not is for decision by the court.
Fibres relies principally on Boeing Airplane Co. v. O’Malley, 329 F.2d 585 (8th Cir. 1964), which applied Pennsylvania law in holding that a disclaimer “in the same color and size of other type used for the other provisions” of a contract was not conspicuous. Id. at 593. In that case the court was dealing with a warranty of fitness for a particular purpose rather than one of merchantability. A fundamental question was the meaning of “as is” in the dealings between the parties. In the present case the heading under which the disclaimer appeared met the requirement of § 1— 201. Neither in Boeing, supra, nor in the Pennsylvania cases relied on by Fibres, is it clear that the court considered contracts in which a heading in bold-type capital letters of the same size as all other headings, appeared at the beginning of the exclusion clause. We do not read these cases as holding the Pennsylvania rule to be that there can be no disclaimer as a matter of law if type of the same color and size is used in the text even though the heading is in capital letters.
It is significant that the official UCC comments under Section 1 — 201(10) state—
10. “Conspicuous.” New. This is intended to indicate some of the methods of making a term attention-calling. But the test is whether attention can reasonably be expected to be called to it.
As we have pointed out, near the beginning of each contract, in the typed portion where guarantee of performance was excluded, there was a reference to “the Company’s standard warranty outlined later in this contract.” From exhibits introduced by Proctor it is clear that the liability clauses of the contracts were scrutinized with care by Fibres. One examining these contracts was put on notice by the early disclaimer of performance that only the standard warranty of Proctor applied. The testimony of Fibres executives was that they were familiar with the contents of the printed portions of the contract. There was no surprise. Knowing that they were employing an untried combination of components, which had been successfully operated separately but not together, in an attempt to produce a familiar product by a new process, the principals of Fibres could not realistically have expected Proctor to extend the warranties which they now claim. Under the facts of this case the district court correctly held that attention could reasonably be expected to be called to the disclaimer. Conspicuousness is a question of law for the court. Adams Van Service, Inc. v. International Harvester Corp., Pa. Court of Common Pleas, Allegheny County (1973), 14 UCC Rep. Serv. 1142.
In denying Fibres’ claim based on fraud the district court found that Proctor made no material misrepresentations of fact. Upon conflicting evidence the court determined that it had never been the intention or understanding of the parties that Proctor guaranteed that the equipment would produce pads of uniform thickness. Having had no experience with this particular operation, Proctor could only give an opinion as to how the equipment would perform. Furthermore, the claim of Fibres that Proctor concealed its knowledge from Fibres that the equipment would not produce pads of uniform thickness is not borne out by the record. Fibres officials Clapp and Steuernagel testified that Proctor’s chief inspector told them before production began that he did not believe it was possible to maintain a tolerance of 1/32 inch across the pads with the type conveyor that was being used. When Christianson, a sales representative of Proctor, referred to this tolerance it was never with reference to the finished product. He described the success of the dryer in a different procedure and predicted similar results using Steuernagel’s “secret process.” This and other evidence relied upon by Fibres fell far short of establishing the elements necessary for proof of fraud.
All of the foregoing issues were decided by the district court on a motion for an involuntary dismissal under Rule 41(b), Fed.R.Civ.P. The court incorporated findings of fact in its opinion granting the motion, and we apply the “clearly erroneous” standard of review prescribed by Rule 52(a). Though there was a great deal of conflict in the testimony of witnesses, the findings of the district court are supported by substantial evidence and may not be set aside by this court. Furthermore, no erroneous application of rules of law to these facts has been demonstrated by Fibres.
Following the second hearing the district court made a finding of no actionable negligence on the part of Proctor. The recitation by the court of numerous problems encountered by Fibres in attempting to produce satisfactory batting is not inconsistent with this finding as Fibres contends. At the request of Fibres these problems were treated as defects in materials or workmanship and were remedied by Proctor at its own expense. Once these extended repairs were completed the ovens operated properly until Fibres went out of business. In finding that Proctor was not negligent either in design or manufacture the District Judge made a detailed analysis of the design and manufacture of the equipment. The finding is not clearly erroneous and may not be set aside by this court.
Having found no negligence on the part of Proctor the court had to consider the issue of contributory negligence only as it related to Proctor’s counterclaim. The evidence clearly supports the finding that as early as June, 1966 Fibres seriously overloaded the equipment. However, the court also found that there was no proof that either party realized at the time that overloading was occurring. It therefore held that Fibres had no duty to advise Proctor of this fact. Since Proctor’s counterclaim was based on the claim that Fibres’ failure to inform it of the overloading constituted fraud, no recovery was allowed. In view of these holdings it is clear that no damages were withheld from Fibres or awarded to Proctor by the district court on the basis of its findings with respect to overloading the equipment. Thus the extensive discussion in briefs of the existence and extent of overloading is immaterial in view of our conclusion that the district court’s findings on the negligence claim and the counterclaim for fraud must stand.
This court’s determination that the district court correctly denied any recovery by Fibres renders extended discussion of the clauses which limited damages under the contracts unnecessary. However, we note that UCC § 2-719 permits limitation or exclusion of consequential damages so long as it is not unconscionable. Unconscionability rarely exists in a commercial setting involving parties of equal bargaining power. County Asphalt, Inc. v. Lewis Welding & Engineering Corp., 323 F.Supp. 1300 (S.D.N.Y.1970), aff’d, 444 F.2d 372 (2d Cir.), cert. denied, 404 U.S. 939, 92 S.Ct. 272, 30 L.Ed.2d 252 (1971). See also Cryogenic Equipment, Inc. v. Southern Nitrogen, Inc., 490 F.2d 696 (8th Cir. 1974); K & C, Inc. v. Westinghouse Electric Corp., 437 Pa. 303, 263 A.2d 390 (1970), 7 UCC Rep.Serv. 679.
The record supports the district court’s finding that “ . . . there was uneven resin distribution in much of plaintiff’s product.” Such uneven resin distribution explained the lack of uniform thickness in the pads, according to credited testimony. Thus, even if it were held that express and implied warranties existed with respect to the thickness tolerance of the pads or that Proctor did misrepresent the capability of the equipment to produce pads of uniform thickness, Proctor’s derelictions would not have been the cause of Fibres’ claimed losses. The one component of the entire production line that was clearly the responsibility of Fibres was the “lawn fertilizer spreader” which introduced dry resin into the cotton fibres to produce dry resinated pads. As the district court noted, the dryer “only receives what is fed into it.” If Steuernagel’s method of introducing the resin in this manner failed to produce an even distribution and this failure sufficiently explains the uneven thickness of the finished pads, the deficient result cannot be charged to Proctor under any theory of law.
Separate appendices were filed by the parties to this appeal. Rule 30 of the Federal Rules of Appellate Procedure provides for a single appendix. Furthermore, the brief of appellants exceeded the length permitted by Rule 28(g), Fed. R.App.P. Failure to follow these rules results in an unwarranted burden on the court.
Affirmed on appeal and cross-appeal. Each party will bear its own costs.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KENYON, Circuit Judge.
Three appeals are here involved. The Des Moines Terminal Company (hereinafter designated the Terminal Company) brought action in the district court of Polk county, Iowa, at the May term, 1923, against the Des Moines Union Railway Company (hereinafter termed the Union Company), Chicago, Milwaukee & St. Paul Railway Company, and Wabash Railway Company, to- quiet title in it to certain railway terminal property in Des Moines, consisting of rights of way upon which were located railroad tracks, switches, and other terminal facilities. The cause was duly removed to the United States District Court, and an answer and cross-bill was filed by defendants, in which they asserted that the Union Company was the owner in trust for the benefit of the cross-petitioners, the Milwaukee Railway Company and the Wabash Railway Company, of all the tracks, rights of way, and facilities claimed by the Terminal Company; that the Terminal Company had acquired them as the result of a seheme and conspiracy entered into between P. M. Hubbell, P. C. Hubbell (his son), and H. D. Thompson (brother-in-law), as- officers and stockholders of the Union Company, to enrich themselves out of the trust estate, of which the Union Company was trustee; that the transactions of said parties were in violation of their duties as such officers and trustees, and cross-petitioners asked that the tracks and right of way and other terminal property claimed to be owned by the Terminal Company be decreed to be a part of the trust estate held by the Union Company as trustee for the exclusive use of cross petitioners.
In reply the Terminal Company denied any scheme or conspiracy on the part of P. M. Hubbell, P. C. Hubbell, and H. D. Thompson, to enrich themselves out of trust property; further that, in an «equity suit in the District Court of the United States for the Southern District of Iowa, in which the Milwaukee and Wabash Companies were complainants and the Hubbells were defendants, together with the Union Company, complainants filed an amended bill on May 12, 1909, in which they set up part of the same dereliction they now assert in this case; that they had at that time full information of the facts and are estopped to- now raise these questions. Waiver and laches are also asserted.
The Chicago Great Western Railroad Company and the Chicago, Burlington & Quincy Railroad Company intervened in the action, claiming the right to possession of the so-called terminal tracks and properties of the Terminal Company by virtue of a lease from that company of date June 3, 1921. We shall hereinafter refer to these two intervening railroads as interveners.
Eight weeks of time was occupied in the trial of this ease in the District Court. The facts are intricate and involved, and show a much scrambled condition of affairs. To outline them in detail would make a book. A mass of records, correspondence, and evidence is presented to us. The legal questions discussed are numerous. The trial court held that Messrs. Hubbell, who were in control of the Terminal Company, had violated their trust in developing the system of tracks, known as the Terminal Company’s system, for their own benefit and profit, and in failing to carry out the purposes for which the Union Company was organized, but held that any right on the part of the Union Company or the Milwaukee and Wabash Companies to claim ownership of the Terminal properties had been waived; that the Union Company was not entitled to have transferred to it as trustee for the Milwaukee and Wabash Companies ownership of these properties. It held that, while the Union Company and the proprietary roads were not in position to claim ownership in the railroad properties of the Terminal Company by reason of waiver, they wore entitled to claim as to said properties the exclusive use thereof upon reasonable terms to be fixed by the court it' no agreement should be made covering the same. It held that the finding of waiver and abandonment by the Union Company and the proprietary roads of the right to claim equitable ownérship of the Terminal properties was not inconsistent with the right to have established an implied parol arrangement for the exclusive use of the tracks by the Union Company enforced upon reasonable terms.
As to interveners, the trial court held they had acquired their rights by lease with the Terminal Company under such conditions as to put them on inquiry and to require them to use reasonable diligence to ascertain the fights.of the Union Company, and that the lease to them was void. The main relief granted by the trial court is expressed in this order: “It is therefore the Order and Judgment of this Court that all of the tracks of the Des Moines Terminal Company and the real estate used in connection therewith, and the real estate, if any, now under lease to the Des Moines Union be impressed with a trust in favor of the Des Moines Union Railway Company for the exclusive possession and use thereof by the Des Moines Union Company upon reasonable terms.”
As the Hubbells are the parties around whom this controversy rages it will be well to get clearly in mind their relationship to the situation. The Des Moines Union Railway Company was incorporated in 1884. F. M. Hubbell was one of the incorporators. He was secretary and a director of said company from the date of its incorporation until April 5, 1921. His son, F. C. Hubbell, was president and director of the company from 1892 until April 5,1921, when he became president of the Terminal Company. Mr. H. D. Thompson, a brother-in-law of F. M. Hub-bell, was director and treasurer of the Union Company at the time the Terminal Company was organized, and so continued until April 5, 1921.
The Des Moines Terminal Company was incorporated in May, 1902, by F. M. Hubbell, H. D. Thompson, and C. Huttenloeher (am employee of F. M. Hubbell). F. M. Hub-bell was by the articles of incorporation made the first president of the Terminal Company, II. D. Thompson, vice president, and Mr. Huttenloeher, secretary and treasurer. They also comprised the first board of directors. The Frederick M. Hubbell estate is a trust estate created by Frederick M. Hubbell. F. M. Hubbell Son & Co., Inc., is a corporation which took over the real estate business formerly conducted by the partnership of F. M, Hubbell & Son. The Frederick M. Hubbell estate was a stockholder of the Terminal Company, as was F. M. Hubbell Son & Co., Inc. The Hubbell interests and Thompson were in complete control of the Terminal Company during its entire existence and it was entirely a Hubbell enterprise. The stock of F. M. Hubbell Son & Co., Inc. was owned at the time of trial of the original ease, one-third by H. D. Thompson, one-third by F. C. Hubbell, and one-third by the trustees of the F. M. Hubbell estate. Contracts were made between the Terminal Company, signed by F. M. Hubbell as president, with the Union Company, signed by F. C. Hubbell, as president.
The dominating personality in the Union Company until 1921, and in the Terminal Company from its organization, was Mr. F. M. Hubbell. We shall refer to the various Hubbell enterprises, individual and collective, as the Hubbell interests.
The genesis of the Des Moines Union Railway Company is this: On the 2d day of January, 1882, an agreement was made in the city of New York between the Des Moines & St. Louis Railway Company, the Des Moines Northwestern Railway Company, and tho St. Louis, Des Moines & Northern Railway Company, and several individual signers, to organize a terminal company in Des Moines to be known as the Des Moines Union Railway. The purpose is expressed in subdivision 8 thereof, as follows: “It is understood and agreed that spur tracks shall be built connecting tho said terminal grounds with such manufactories and other sources of trade in and about the City of Des Moines, as afford sufficient opportunity for profit by so doing, and that all of said tracks shall be adopted for use for both broad and narrow gauge (trucks), provided that in case either of said Companies shall deem the construction of any of said tracks as not advantageous to its business, tho question of constructing said tracks, and which of the parties hereto shall pay therefor shall be determined by arbitration.”
Mr. F. M. Hubbell did not sign this agreement, but was active in organizing the Union Company. He was holding offices in a number of these roads and was regarded by the Wabash, which in fact controlled one of the signatory roads, as their representative in Des Moines. From 1882 to 1888 the terminal properties were'largely operated by the Wabash, and Mr. Hubbell was participating in acquiring the property for the Union Company intended to be used for terminal purposes. The respective railway companies entering into said agreement, and to- carry out its provisions, caused to be incorporated the Des Moines Union Railway Company.
The articles of incorporation were signed on December 10, 1884, by J. S. Polk, F. M. Hubbell, and J. S. Runnells, although the corporation did not actively function until 1888. Thef objeet of this corporation is shown by article II of the articles of ineorporation, which is as follows:
“The general nature of the business to be transacted shall be the construction, ownership, and operation of- a railway in, around and about the City of Des Moines, Iowa, including the construction, ownership and use of depots, freight houses, railway shops, repair shops, stock yards, and whatever else may be useful and convenient for the operation of railways at the terminal point of Des Moines, Iowa, as well as the transfer of ears from the line or depot of one railway to another or from the various manufactories, warehouses, storehouses, or elevators to each other or to any of the railways or depots thereof now constructed or to be hereafter constructed in or around said City of Des Moines, and such corporation shall possess all the powers conferred upon corporations for pecuniary profit by Chapter 1 of Title IX of the Code and the amendments thereto.
“All the powers exercised by this Company shall be in accordance with the terms and spirit of the aforesaid contract entered into on the 2nd day of January, A. D. 1882, by and between the Des Moines and St. Louis Railroad Company, the Des Moines Northwestem Railway Company, the St. Louis, Des Moines and Northern Railway Company, jas. F. How, Jas. F. How, Trustee, and Granville M. Dodge.”
We need not follow through the various transactions that made the Wabash and Milwaukee Companies the successors and assigns of the companies entering into the eon-tract of January 2, 1882. It is sufficient to say that the Milwaukee is the remote suecessor to the Des Moines Northwestern Railway Company and the St. Louis, Des Moines & Northern Railway Company, while the Wabash is remote successor of the. Des Moines & St. Louis Railway Company. The rights of the various railroads instrumental in forming the Union Company were transfe'rred to it..,
Prior to May, 1888, F. M. Hubbell had acquired title to a large area of land in Des Moines designated in these proceedings as the factory district which he intended to develop industrially. It-was located south óf Market street, and may be described as a tract approximately three-fourthfe of a mile long east and west and one-half mile wide, lyiug south of the right of way of the ChicaS°, Rock Island & Pacific Railroad, bounded °u the north by Market and Elm streets, on the east and south by the Raccoon liver, and on the west by what is now the 100-foot right of way of the Union Company, secured from R- Hubbell in 1890. It is a question of so^le dispute whether Mr. Hubbell ha.d acfluí1’6*! all of the lands in the factory district Pnor t° 1888. The Union Company contends that not more than one-fifth of the district ^ad been bought at that time. However^ properties had been purchased there for the purpose of the terminal prior to that time ail(^ held in trust by one How, as trustee,,Tlle property involved in this controversy Is principally located in the factory district, though some tracks are in other parts of the city, viz., east Des Moines. The Unio"n Cornpany endeavored to extend its operations as a Terminal Company into this district, and in 1890 bought several strips of land from F. M. Hubbell to be used as rights of way. One strip so purchased as part of the development plan in the district was known as the 100-foot strip and extended from Market street south to the Raccoon river. On this a number of tracks were built. As a part of the consideration therefor, the Union Company was to construct an embankment to protect the factory district from threatened overflow from the Raccoon river. Tracks used as connections for the Chicago, Buriington $¡ Quincy, and other roads, were eonstrueted. The Des Moines Union grew until it extended across the city of Des Moines from east to west about five miles, with an extensive system of trackage. It constructed a union depot occupied lay many railroad companies.’ Exhibit 1, introduced in evidence, is a plat showing the tracks and property of the Des Moines Union in the factory district prior to the organization of the Terminal Company in May, 1902. It shows that many tracks had been constructed therein by the Union Company, such as tracks 87, 98, 100, and 103, appearing thereon. These led from the tracks on the 100-foot strip or connected with such tracks and reached the very heart of the factory district, evidencing the purpose to extend the union into this territory in accordance with its franchises. Right of way deeds were made hy F. if. Ilubbell and wife to the Union Company conveying rights of way for tracks 87 and 103, which will be referred to hereinafter. A 2,000-foot strip was conveyed by F. M. Ilubbell to the Union Company April 1, 1889, which was entirely within the factory dislriei, and was to be used in the development of the Union Company’s terminal facilities. In 1902 the Union Company was adequately serving some eighteen, industries that had been established in the factory district, mid had sufficient trackage so to do. In 1893 the Messrs. Ilubbell and Thompson had acquired five-eighths of the capital stock of the Union Company. Outside of eight qualifying shares the Milwaukee and Wabash owned the balance. As minority stockholders of the Union Company the proprietary roads had little to say in its management. In 1889 they made an operating contract with the Union Company for the use of the terminal properties for a long period of time.
From the organization of the Des Moines Terminal Company in.1902, up to April, 1921, the Ilubbell interests had complete control of both companies. There was no uniform system in the development of the factory district, but it went continuously forward. We cannot set forth the situation as to each specific track. Some were constructed by the Union Company and the Terminal Company billed on for the cost thereof. As to others, the Union Company furnished the labor merely, or material, and tlien billed on the Terminal for the same. Some of the tracks constructed by the Union Company were taken over by the Terminal Company hy reimbursing the Union Company for the cost of material and labor expended. Some were purchased by the Terminal Company from the Union Company, and others constructed by the Terminal Company out of its own funds. Rights of way were in some instances conveyed by deeds from the various Ilubbell interests, in others secured by leases from the Hubbell interests for short periods of time. In some instances the Union would own the connecting track between two sections of the Terminal Company tracks, and vico versa. Beginning about 1906 the Terminal Company charged the Union Company a trackage or switching charge for every car switched over its tracks, which brought large sums to the Terminal. Fifteen thousand cars were switched over Terminal tracks by Union Company for year ending February 28,1921. Some part at least of these funds so collected was used by the Terminal Company in constructing additional trackage.
Exhibit 3 in evidence shows a vast network of tracks, switches, spurs, and terminal facilities as they existed in 1921 when the Hubbells were ousted from control of the Union Company following the decision of the Supremo Court of the United States. Mr. Morgan, engineer of the Union Company, testified as to the system of trackage as follows :
“Q. They were operated, weren’t they, by the Des Moines Union Railway Company as one unified system? A. Yes sir.
“Q. Was the terminal system laid out by you as an engineer having in mind that it would be a unified system of terminal railway in that district? A. Yes sir. The engineering was done so that it could be operated by one company and the tracks were so constructed and operated.
“It could economically be operated as a unified system of Terminal tracks.
“Q. Was it during the whole time that it was operated by the Des Moines Union, in your judgment, operated economically as a unified system of railway terminal in Des Moines?' A. Yes sir.
“The tracks were constructed so that they could bo operated by the Des Moines Union and were so operated during 1902.”
As illustrating the method in which the construction of tracks and the general development were carried on, we refer specifically to a few of the many tracks. The leading track constructed was what was known as the Dike track, which was built in the winter of 1903 and 1904 along the northerly bank of the Raccoon river from the 100-foot strip to Seventh street. The factory district could best be served by a main lead track at the south, from which spurs could be built, as the northern end of the district was congested. Mr. Morgan laid it out with the view of making it a lead track. It is designated in the evidence and on the plats as a main track, and it was the plan, as shown by Mr. Morgan, to use this track as the key track in the factory district. He testified the work was done at the request of Mr. F. M. Hubbell. It was necessary in its building to secure a crossing contract with the Chicago, Burlington & Quincy Railroad Company. This was made in the name of the Union Company, and such- contract is still in force. Reconstruction of the same was paid for by the Terminal Company. There was miich.filling to be done, and the dirt for the embankment was mainly secured from excavations at Allen’s Bluff. The Hubbell interests furnished dump ears, the steam shovel, and the ties for the track. Mr. Morgan testified: “My search shows F. M. Hubbell Son & Co. paid $2,535.-42 toward the expense of this work and furnished the dump ears. The,Des Moines Union paid the remainder of the cost and in addition thereto furnished the engines, track-age and administration. Part of the figures were obtained from the Auditor’s office in the bills and in the bill books and other sources of record of the Des Moines Union. The items with reference to what Mr. Hub-bell paid were obtained from our bill books. The larger items with reference to excavation at the Bluffs and filling on the dike were kept under my supervision. I found no other items that Mr. Hubbell had paid except those I have stated.”
The right of way for the Dike track was conveyed by the trustees of the Hubbell estate to the Terminal Company. According to Mr. Morgan’s testimony the excavating at Allen’s Bluff and constructing the dike embankment for the track, the filling on the 100-foot strip, and for a short track known as Parker track, cost $11,049.32, originally paid by the Union Company, except $2,535.42, paid by Hubbell Son & Co. The part paid by the Union Company was billed on the Terminal Company and paid by it.
There was a twofold object in the construction of the Dike track, i. e., to serve as a lead track and also to protect the district from floods, which in 1902 had wrought great devastation. The result of this transaction was that when it was all over the lehd track necessary to the proper development of the factory district, though constructed largely by the Union, had become property of the Terminal Company. Its importance is shown by the testimony of Mr. Morgan: “The industries in the factory district south and east of the Chicago, Burlington & Quincy Railway were served, until about 1914, by this main lead No. 87 before they were connected with the dike.track. In 1914 track No. 87 was connected with the dike track. It was done by extending No. 87, southerly and curved to the west connecting with the dike track west of 9th Street.” Under the fiduciary relationship of the Hubbells to the Union Company the Dike track should have been a part of its property.
Another track known as No. 7 was the first track in the district placed in the name of the Terminal Company. As to this track Mr. Morgan’s testimony is interesting as it shows the general method pursued in building tracks in the district. He says: “Track No. 7 is a Terminal track which was constructed in 1902 connecting with the Des Moines Union track on lot 4, and with the main lead across 9th Street which is track No. 87 of the Des Moines Union and connecting near the 100-foot strip, and paralleling the C. B. & Q. railroad, and the Des -Moines Terminal has title to track No. 7 and owns the right of way. Track No. 7 was built by the Dos Moines Union and then the Des Moines billed on the Des Moines Terminal for the materials used for the construction of the track and the labor. It was constructed in August, 1902.” The only access the Union Company had to its own track 88-a was over the Terminal track No. 7. Nor was there aeeess to Terminal track No. 7 except by going over a Union track. This is typical of many situations in the district.
Thirty-two of the tracks of the Terminal Company were joined onto the Union tracks, forming a part of the general system of terminal tracks, and being in fact mere extensions of tracks of the Union Company. There were.also some tracks in East Des Moines constructed under the same kind of arrangement. Twelve tracks in the- district were constructed by the Union Company between May, 1907, and January, 1920, on rights of way leased to the Union Company by the Hubbell interests and conveyed in most instances thereafter to the Terminal Company.
According to the testimony of Mr. Hahn-en, an employee of the auditor’s office of the Union Company, the cost of constructing the Des Moines Terminal tracks was $134,000. There is no need, we think, to more specifically set forth or group these various tracks and their construction and the method of payment therefor. Sufficient has been stated to visualize the method carried on between the Union Company and the Terminal Company.
It is evident from the plat, Exhibit 3, that this great system of trackage could be operated only as a unified system. There was no need of two terminal systems in this district, and the tracks were so constructed as to be interdependent upon and interrelated to one another. Each track in the district fits into the system.
After the construction of the Dike track the Terminal Company charged the Union Company $1 for every carload of freight switched over any Terminal track. Mr. Wagner, superintendent of the Union Company, testified that Mr. Hubbell directed him as to the collection of the trackage charge. The total payment so made, according to the evidence, was approximately $147,267.17. They were made, not by virtue of any specific contract, except an understanding between F. M. llubbell, as president of the Terminal Company, and his son, F. C. llubbell, as president of the Union Company. These payments were not authorized by the board of directors and were charged against surplus earning’s, or a special account of switching revenues.
In the year 1907 an action was brought by the Chicago, Milwaukee & St. Paul Company and the Wabash Company against the Des Moines Union Railway Company, F. M. Hubbell, F. C. Hubbell, and F. M. llubbell & Son, defendants, asking that the Union Company be declared to be a trustee holding in tiust for said railway companies the terminal properties in the name of the Union Company. That case reached this court (254 F. 927), and it was held that the Union Company owned the legal title, and that the interest of the railroad companies was only that represented by their stock. The Supreme Court of the United States (254 U. S. 196, 41 S. Ct. 81, 65 L. Ed. 219) reversed the decision of this court, and held that the Union Company was a trustee holding the property in trust for the railway companies, and that the fiduciary character of the Union Company extended to its officers and directors. In 1909 an amended bill of complaint was filed in that suit, which included a paragraph of claimed importance here, viz., No. 37, which is as follows:
“And your orators further complain of the defendants Frederick M. Hubbell and Frederick C. Hubbell, and as a ground for still further and other relief represent and show to the court:
“That the defendants, Frederick C. Hub-bell and Frederick M. Hubbell, while being respectively President and Secretary of the Terminal Company, and after your orators became the successors in interest of the original proprietary railroad companies without authority from the Board of Directors of the Terminal Company, or from your orators, built spur tracks from a connection with the tracks of the Terminal' Company to industries located adjacent to said tracks, and now claim such spur tracks belong to themselves or some corporation organized and controlled by them; that since the building of such spur tracks, continuously and now, the said defendants, the Hubbells, switch and haul cars from the tracks of the Terminal Company over said spur tracks, using the switch engines and motive power and the employees of the defendant corporation to do such switching (at the cost and expense of your orators). And the said Hubbells, themselves, or in the name of their said corporation, collect from all railroad companies, including your orators, an extra charge of $---per car, and appropriate such collections or switching charges to their individual use and benefit, or to the use and benefit of their said corporation.
“That such spur tracks at their initial point are each and all laid for some distance upon the ground which was acquired and is hold by the Terminal Company, as Is herein-before charged, and such spur tracks in some instances are laid in the streets or alleys of the City of Des Moines where permission was granted to the Terminal Company, defendant, by the city council of said city. That your oraidrs are not advised and cannot state the cost or value of the ground occupied outside of said streets and outside of the ground held by the defendant corporation as trustee for your orators as herein-before charged.
“And your orators represent and show lo the court that in good faith and in equity said spur tracks should either be conveyed to the defendant corporation for the reasonable cost of constructing the same, including right of way, or that the part of the same that has been laid upon the ground of the Terminal Company should be taken up and removed.
“And your orators state that they are willing that said tracks and connection may remain, provided such spur tracks and the right of way upon which they are laid be conveyed to the Terminal Company, and they are willing that the said Terminal Company reimburse the defendants Frederick M. Hub-bell and Frederick C. Hubbell, or their said corporation, for the reasonable cost and expense of constructing said spur tracks, including right of way and legal interest therein, after an accounting for the amounts received for switching over the same as herein-before stated. And your orators hero and now offer to do and perform whatever this Court determines is equitable and just as a condition precedent to the conveying of said spur tracks and right of way and turning over of the same to the Terminal Company.”
While there were assignments of error in this court covering the questions raised by paragraph 37, there was no decision thereon, nor did the Supreme Court consider the same. After the decision in that ease representatives of the Union, the Milwaukee, and the Wabash Companies on the one hand, and the Messrs. Hubbell on the other, made an attempt to agree upon terms for a lease for fifty years of the Terminal Company facilities to the Union Company. Controversy arose over the question of who should pay the taxes, and the lease was not made. The Terminal Company then leased its properties to the Chicago Great Western and the Chicago, Burlington & Quincy Railroad Companies, and the Terminal Company constructed additional tracks for necessary connections with said companies at an expense of some $12,000. Sufficient we think has been stated to show the nature of the present ease. For further facts reference may be made to the opinion of this court in 254 F. 927.
The trial court in its opinion, after referring to certain legal decisions said:
“Based upon these rules of law there can be but one answer to the question whether or not the Messrs. Hubbell violated their trust in the building, owning and extending a system of tracks connected and joined directly or indirectly with the Des Moines Union system for their own benefit and profit; and in failing to extend the Des Moines Union for the purposes for which it was organized; and in constructing their own system as to bottle up, hinder and deny to the Des Moines Union power to extend farther their tracks into the factory district.
“In fact some of the acts of the Des' Moines Terminal Company in extending spur tracks to a manufacturing plant or establishment, with their own funds, and charging the Des Moines Union for the use thereof, would hardly stand the scrutiny of a Court of Equity were the transaction had between private individuals.”
We agree with this statement.
The Supreme Court of the United States in the former ease (254 U. S. 212, 41 S. Ct. 81, 87, 65 L. Ed. 219) said: “Obviously the fiduciary character of the terminal company extended to its officers and directors as to all others concerned in its management, charging them with a duty to'uphold the trust and imposing upon them the usual disability about reaping a personal advantage at the expense of the beneficiaries. * * * Mr. F. M. Hubbell was an officer and director of that company at the beginning and continuously thereafter, especially active in its management; and during a period which included the important transactions in question he also was a director and officer of each of the proprietary companies and their trusted representative in respect to terminal matters at Des Moines.”
The Hubbells thus, by the language of the Supreme Court of the United States, were held to be in a fiduciary capacity in relation to the Des Moines Union. The Supreme Court settled the question as to the Union Company holding property as a trustee for the proprietary roads. The relationship of Hubbell and his son as officers and directors of that company charged them with all the duties and obligations arising from a fiduciary relationship. It was their duty to develop the business of the Union Company according to the purpose of its organization, as evidenced by the contract of 1882 and the articles of its incorporation. Such was evidently Mr. Hubbell’s purpose in the early life of the Union Company, as is apparent from the language of two deeds for right of way purposes made by him to the Union.' The first, dated October 1, 1895, is for right of way for track designated as No. 87, and contains this provision-: “The above-granted right of way is granted only for the construction, maintenance and operation of a sidetrack and not for a main track. Said track is to be laid, maintained and operated upon said premises so that the Des Moines Union Railway Company can obtain access to manufactories, warehouses and other industries located upon the land belonging to said Hubbell in said section 9, township 78, range 24, and it is not to be used as a sidetrack for general railway purposes, save in such manner and at such times as will in no way interfere with its use as a sidetrack for the accommodation, of manufactories, warehouses and other industries located upon the aforementioned land belonging to said Hubbell, and it is expressly understood and agreed that the right of way herein granted is limited to the purposes and for the objects hereinbefore set forth.” (Taken from appellant’s brief in No-. 8992, not being set out fully in the record).
The second, dated April 1, 1899, was for the 2,000-foot strip and contains this covenant: “The above-granted right of way is a right of way only for the construction, maintenance and operation of a sidetrack, and not for a main track. Said track is to be laid, maintained and operated upon said premises so that the Des Moines Union Rail-way Company can obtain access to manufactories, warehouses or other industries lo eated upon said lots fifty-seven (57), fifty-eight (58) and fifty-nine (59), said official plat, and it is not to be used for any other purpose than as a sidetrack, and it is not to be used as a sidetrack for general railway purposes, save in such manner and at such times as will in no way interfere with its use as a sidetrack for the accommodation of manufactories, warehouses or other industries located upon the aforementioned lots, and it is expressly agreed and understood that the right of way herein granted is limited to the purposes and for the objects above set forth.” (Taken from appellant’s brief in No. 8992, not being set out fully in tbe reeord.)
It is contended by counsel for the Terminal Company that the individual properly of officers and directors acquired before the trust relation cannot bo impressed with a trust. While it is not clear in this case that all the property in the factory district owned by the Iiubbells was acquired before the Union was incorporated, and while the evidence tends to show that a part of it was acquired thereafter, we do not think this of any particular importance. Ordinarily, as claimed, Mr. Hubbell could do what he chose with his property acquired prior to the fiduciary relationship, but he could not use his property so acquired to assist in violating the duties which he owed to the Union Company as a fiduciary officer thereof. Contracts of course may be made between individuals interested in a corporation and the corporation and which do not secure any unwarranted advantage to such individuals. The question of good faith is the test. Jones v. Missouri-Edison Electric Co. et al. (C. C. A.) 144 P. 765; Cowell v. McMillin et al. (C. C. A.) 177 F. 25; Twin-Lick Oil Co. v. Marbury, 91 U. S. 587, 23 L. Ed. 328.
This is not the situation of an ordinary transaction between a corporation and its officers. There is a trust relationship here. Mr. Hubbell could not do as he pleased with his property so as to relieve himself of his duties and obligations as a fiduciary. There is nothing in Wyman v. Bowman (C. C. A.) 127 P. 257, 273, antagonistic to this doctrine, where the court said: “Contracts and transactions between individuals and corporations of which they are directors or officers, which are fair, which are made in good faith, which do not secure to the individuals any undue or unjust benefit or advantage, and in which the interest of the individuals and the duty of the officials work in unison for the welfare of the corporation, are valid and enforceable both at law and in equity.” We are unable to see why lie could not use the property he might have acquired subsequent to the incorporation of the Union Company to break it down, but could so use the property acquired before. If the Iiubbells were not willing because of some disagreement as to the use of surplus earnings in the construction of tracks to conserve and advance the interest of the Union Company, it was their duty to resign from their offices in that company, as suggested in the letter of Mr. Ramsey, Jr., president of the Wabash, to Mr. P. C. Hubbell in 1902, as follows:
“You ask me to state candidly what the objections are to your position. I will give them as requested, candidly: You are the President of the Des Moines Union and as such President yon have no right officially or personally to encourage, aid or abet in the slightest manner the construction or development of any other terminal company in the city of Des Moines. If you wish to do so, you should resign your position of President and allow someone, whose sole interest would be that of the Des Moines Terminal and the protection of the rights of the tenant companies under the contract existing between the Des Moines Company and the tenant lines.
“Yours very truly,
“J. Ramsey, Jr., President.”
Wé animadvert to the circumstances surrounding the organization of the Terminal Company. Controversy had arisen between tbe Hubbell interests in the Union and the proprietary roads as to the expenditure of surplus earnings for the purchase of switch engines and the building of certain 1 lacks. The proprietary roads did not object to the, improvements, but to the application of surplus earnings toward payment therefor. Their position was that additional tracks should be built out of capital investment. This surplus fund the Supreme Court later held to belong to the proprietary roads. There is no evidence that the proprietary roads objected to expansion of tbe Union Terminal system. When, at one of the directors’ meetings, it was reported that some $24,000 of surplus earnings had been used for payment of two switch engines, shares in a transfer company, and building a switch track, the proprietary roads objected, but stated: “We do not protest against these improvements but against the application of earnings toward payment thereof.” The controversy over payments out of surplus earnings was probably the cause
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
BECKER, Circuit Judge.
This petition for review of a decision and order of the Benefits Review Board of the U.S. Department of Labor denying the claim of petitioner Michael Revak for benefits under the Black Lung Benefits Act as amended, 30 U.S.C. §§ 901 et seq., requires us to answer a question that has divided the Circuits: may an Administrative Law Judge balance conflicting evidence in deciding whether to invoke the interim presumption of total disability due to pneumoconiosis disease pursuant to 20 C.F.R. 727.-203(a), or must the AU find the presumption triggered so long as the claimant adduces a single piece of qualifying evidence establishing disability. For the reasons that follow, we conclude that the balancing procedure applied by the AU in this case was improper and that Revak was entitled to a presumption of disability on the basis either of his qualifying ventilatory function study or of his qualifying medical report. Because Revak’s claim was dismissed by the AU on the basis of a balancing procedure, and the BRB affirmed, we will reverse the order of the BRB and remand the case for reconsideration.
I.
Revak, who worked for 35 years in underground mining, is currently 67 years of age. In 1960 he began to have coughing spells, particularly when digging near the mine-face. His symptoms became progressively worse. During the mid-1970’s he often had to leave the mine after only a few hours because of coughing attacks. In 1979, Revak was placed on disability by his employer because of shortness of breath, and he has not returned to mining since that time. From 1975 to 1981, Revak was hospitalized periodically at the West Virginia University Medical Center and at Allegheny General Hospital in Pittsburgh. During each of these hospitalizations he was diagnosed variously as having chronic bronchitis and/or bronchial asthma.
In May 1978, Revak filed this claim seeking benefits for total disability resulting from pneumoconiosis under the Federal Coal Mine Health and Safety Act of 1969, as amended, 30 U.S.C. §§ 801 et seq. National Mines Corporation, his most immediate former employer, disputed his claim, and the parties proceeded to gather medical information for a hearing before an AU. That hearing took place on April 18, 1983.
At the hearing, Revak presented a report of one of his treating physicians, Dr. Peter Kaplan. In that report, Dr. Kaplan expressed his view that Revak suffered not from pneumoconiosis but from bronchial asthma. Dr. Kaplan stated, however, that the condition was related to Revak’s exposure in his coal mine employment. He also stated that Revak’s “working in coal mines may exacerbate his illness and produce an acute attack.” In addition, Revak presented the report and deposition of Dr. Naresh I. Bhatt. Dr. Bhatt found Revak to be totally and permanently disabled as a result of pneumoconiosis due to coal mining employment.
Countering this evidence, National Mines presented the report and deposition of Dr. Ludwig Anderson. Dr. Anderson opined that Revak’s respiratory condition was not pneumoconiosis but bronchial asthma. Dr. Anderson also stated that Revak was not disabled by a respiratory impairment. He agreed, however, that when Revak was exposed to coal dust his condition was exacerbated or aggravated, and he also agreed that it might not be medically advisable for Revak to return to an environment in which he would be exposed to coal dust.
Additionally, National Mines presented a number of medical studies performed on Revak. All the x-ray evidence presented was negative for pneumoconiosis, and none of the arterial blood gas studies yielded values low enough to demonstrate pulmonary impairment in accordance with the standards provided by the Labor Department’s applicable regulation. However, one and perhaps two ventilatory function studies yielded results that did meet the requirements for respiratory or pulmonary disease as provided in the regulations.
II.
An AU must decide a claim for total disability pursuant to 20 C.F.R. § 727.203, which permits a claimant an "interim” presumption of total disability arising out of coal mine employment, thereby shifting the burden of proving ineligibility for payments to the employer. According to § 727.203(a), the AU must accord this presumption of disability to any miner “who engaged in coal mine employment for at least 10 years” and who meets one of four medical requirements:
(1) A chest roentgenogram (x-ray), biopsy, or autopsy establishes the existence of pneumoconiosis ...;
(2) Ventilatory studies establish the presence of a chronic respiratory or pulmonary disease (which meets the requirements for duration in § 410.412(a)(2) of this title) as demonstrated by values which are equal to or less than [certain values specified in the regulation’s table];
(3) Blood gas studies which demonstrate the presence of an impairment in the transfer of oxygen from the lung alveoli to the blood as indicated by values which are equal to or less than [certain values specified in the regulation’s tables];
(4) Other medical evidence, including the documented opinion of a physician exercising reasoned medical judgment, establishes the presence of a totally disabling respiratory or pulmonary impairment;
In this case, notwithstanding the qualifying ventilatory study or studies and the medical reports introduced by Revak, the AU refused to invoke the interim presumption. He found that Revak had failed to satisfy subsections (a)(1) and (a)(3) because all of the x-ray evidence was negative and the arterial blood gas studies did not meet the values specified in the regulations. He refused to invoke the presumption under subsection (a)(2) even though at least one set of ventilatory function studies yielded qualifying values, because the majority of studies, including the two most recent, did not. Finally, the AU refused to invoke the presumption under (a)(4) because he found that Dr. Bhatt’s report was not well reasoned in that it “relie[d] primarily upon a negative x-ray, non-qualifying blood gas study and [did] not consider claimant’s history of bronchial asthma.” In contrast, the AU found Dr. Anderson’s report well reasoned and Dr. Anderson more qualified than Dr. Bhatt in addition. Crediting Dr. Anderson’s opinion, the AU refused to invoke the presumption and determined that Revak neither has pneumoconiosis nor is totally disabled by a respiratory impairment. The BRB affirmed.
In his petition for review, Revak claims that the BRB erred in affirming the judgment of the AU. He claims that the ALJ erred by denying the interim presumption on the basis of a balancing of the evidence; Revak contends that the qualifying ventilatory study or studies and Dr. Bhatt’s report mandate invocation of the presumption as a matter of law. Revak also points in this regard to evidence in the record undermining the AU’s finding that Dr. Bhatt’s report was unreliable. Appellees, National Mines and the Director of the Office of Workers’ Compensation Programs, respond that the AU quite properly balanced the evidence in deciding not to invoke the presumption. Appellees also contend that the evidence supports the AU’s determination that Dr. Bhatt’s report was not credible.
III.
In refusing to invoke the interim presumption, the AU weighed all of the evidence in each of the relevant categories: x-rays, ventilatory function studies, blood gas studies, and medical reports. The decision to weigh all the evidence in each category rather than to invoke the presumption on the basis of a single favorable item regardless of the import of the other evidence, accords with the approach taken in Engle v. Director, Office of Workers’ Compensation, 792 F.2d 63, 64 n. 1 (6th Cir.1986). The Engle court provided no reasoning for this position, however.
Sitting in banc, the Fourth Circuit adopted the contrary position in Stapleton v. Westmoreland Coal Co., 785 F.2d 424 (4th Cir.1986). Accord Amax Coal Co. v. Director, Office of Workers’ Compensation Program, 801 F.2d 958, 962 (7th Cir.1986). Although the Stapleton court divided on a number of issues, a majority held that a single credible x-ray, a single qualifying ventilatory function study, one qualifying blood gas study, or a qualifying physician’s opinion would suffice to invoke the presumption regardless of conflicting evidence that may be present in the record. Id. at 426 (per curiam opinion). We agree. Additionally, the Stapleton court held that on rebuttal all relevant medical evidence must be considered and weighed regardless of the type of evidence forming the basis for the presumption. Id. at 427. We also agree.
The four lengthy opinions in Stapleton have explored the ramifications of the question before us in enormous depth and we see no point to engaging in such extensive analysis here. We will, however, explain the salient reasons for our endorsement of the position so forcefully stated in the opinions of Judges Hall, Sprouse, and Widener that a single qualifying test or medical report is sufficient to invoke the presumption.
A.
The most important reason for rejecting the balancing approach to the interim presumption is the language and structure of the regulation itself. The regulation at issue is divided into two parts. 20 C.F.R. § 727.203 Part (a), which is directly at issue in this case, sets forth the four distinct medical requirements, any one of which if met establishes the interim presumption so long as a claimant has engaged in coal mining for at least ten years. Part (b), provides that this presumption is rebutted if, considering “all relevant medical evidence,” the AU determines that the claimant is doing or could do his usual coal mine work or comparable, gainful work; that the disability did not arise in whole or in part out of coal mine employment; or that the miner “does not, or did not, have pneumoconiosis.”
Subsections (1) and (4) of Part (a), by their own terms, provide that a single qualifying x-ray or a single physician’s opinion that a claimant has a disabling pulmonary impairment is sufficient to trigger the presumption: subsection (a)(1) refers to “a chest [x-ray]” and subsection (a)(4) refers to “the documented opinion of a physician exercising reasoned medical judgment” (emphasis supplied). With respect to the medical requirements under subsections (a)(2) and (a)(3), the regulation uses the plural, employing the term “ventilatory studies” and “blood gas studies.” However, as Judge Hall has pointed out in his opinion in Stapleton, 785 F.2d at 434, the use of the plural only reflects the fact that a ventilatory and blood gas test consists of a set of many studies. For example, the regulations demonstrate that each pulmonary function test consists of several studies and must be accompanied by two to three tracings of each test performed. 20 C.F.R. §§ 410.430, 718.103. Similarly, a blood gas study will often have separate components, one reflecting the results obtained at rest and the other reporting the results of testing during exercise. 20 C.F.R. § 718.105.
That a single qualifying test or medical opinion is sufficient to invoke the presumption is evident from the Secretary of Labor’s comments addressing the standard of rebuttal:
[T]he Department cannot, as has been requested by some, look for the single item of evidence which would qualify a claimant on the basis of the interim presumption, and ignore other previously obtained evidence. This does not mean that the single item of evidence which establishes the presumption is overcome by a single item of evidence which rebuts the presumption.
Notice of Final Rulemaking under the Black Lung Benefits Reform Act of 1977, 43 Fed.Reg. 36,826 (1978) (emphasis added).
In contrast to subsection 203(a), subsection 203(b), dealing with the standards for rebuttal, explicitly states that the AU must consider all the relevant medical evidence and must deem the presumption rebutted if, after weighing the evidence, the AU is satisfied that one of the rebuttal grounds is proven. One explicit ground for rebuttal, § 203(b)(4), is that all the relevant evidence demonstrates that the miner does not have pneumoconiosis. Such a provision would be superfluous if the AU were already to have considered all the relevant medical evidence at the initial presumption stage. Moreover, the appellees’ theory would place the burden on the miner to prove by a preponderance of the medical evidence at the presumption stage that he has pneumoconiosis. Such an interpretation would deprive the interim presumption of any presumptive effect.
B.
In addition to the language of the regulation, the legislative history is helpful to Revak’s position although it does not specifically address the question whether a single study is sufficient to invoke the presumption. Cf. Bowles v. Seminole Rock Co., 325 U.S. 410, 413, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700 (1945) (“intention of Congress ... may be relevant” for interpreting regulation). As Judge Sprouse described in detail in Stapleton, Congress was deeply concerned about the difficulty of establishing pneumoconiosis through medical evidence. Testimony before Congressional committees and the statements of influential Congressmen repeatedly emphasized the fact that negative test results were not highly probative of a lack of pneumoconiosis, and that the only truly accurate test was by autopsy, a method that was not of help to living miners.
Furthermore, Congress was troubled by grim statistics indicating the devastating extent to which miners suffered from pneumoconiosis. One study cited by Congressman Paul Simon, for example, found that autopsies of 400 coal miners with 21 years or more in the coal mines showed that 90-95% of them had pneumoconiosis. House Comm, on Education and Labor, 96th Cong., 1st Sess., Black Lung Benefits Reform Act and Black Lung Benefits Revenue Act of 1977 282-83 (Comm. Print Feb. 1979). This evidence identified by Congress afforded the Labor Department good reason for establishing a presumption of total disability due to pneumoconiosis based on the findings of a single positive test or medical opinion, thus shifting some of the risk of faulty test results onto the employer. In addition, the legislative history indicates that Congress contemplated the use of “all available evidence” only as a rebuttal mechanism, further endorsing our overall interpretation of § 718.203.
The history of the regulation also reveals that Congress was intimately involved with the development of standards and procedures for dealing with black lung claims. Although Congress delegated the authority to develop Black Lung standards to the Secretary of Labor, Congress and its staff were apparently involved in the writing of regulations, including this interim presumption provision. See Solomons, A Critical Analysis of the Legislative History Surrounding the Black Lung Interim Presumption and a Survey of Its Unresolved Issues, 83 W.Va.L.Rev. 869 (1981). According to the history compiled by counsel for the Labor Department at the time, Congressional staff persons even directed the deletion of a proposal requiring the weighing of all medical test evidence prior to invoking the presumption. Id. at 896 n. 138.
C.
The appellees remonstrate that the Stapleton approach does not accord the required deference to the interpretation of the agency charged with administration of the statute. Since Bowles v. Seminole Rock and Sand Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700 (1945), the law has been settled that courts must defer to a consistent interpretation by an agency of its own regulation unless “plainly erroneous or inconsistent with the regulation.” See Barnes v. Cohen, 749 F.2d 1009, 1018 (3d Cir.1984).
In this case, however, the Labor Department interpreted this regulation until 1983 in the manner advocated by Revak and accepted by us. See Stiner v. Bethlehem Mines Corp., 3 B.L.R. 1-487 (1981) (single reasoned and documented opinion of physician invokes presumption; other medical evidence considered on rebuttal). As far as we can tell, that interpretation lasted until Meadows v. Westmoreland Coal Co., 6 B.L.R. 1-773 (1984). The Meadows decision then reversed this practice entirely on the basis of the Fourth Circuit’s decision in Consolidation Coal Co. v. Sanati, 713 F.2d 480 (4th Cir.1983), which the Fourth Circuit overruled in Stapleton. The Meadows decision did not articulate any other reason for this substantial change of policy, nor did it articulate any facts on which it relied to justify the new policy.
Notwithstanding the deference required by Bowles, an agency cannot change an established course of conduct without articulating “a reasoned analysis” that makes a “rational connection between the facts found and the choice made.” Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983). We do not believe that we should defer to the Labor Department’s change of policy in the absence of such an articulation.
Furthermore, even if the Labor Department’s interpretation had been consistent, the result would be no different, for we may not uphold an agency’s interpretation of its own regulation if it is “plainly erroneous.” Bowles, 325 U.S. at 414, 65 S.Ct. at 1217. We have already explained our understanding of § 727.203 based upon its language and structure and the legislative history. Neither the BRB decision nor the Director has offered any explanation for how we might find support for the Director’s position in the language of the regulation. At the very least, a reasonable interpretation must be advanced to explain why the regulation’s insistence that all relevant evidence be considered at the rebuttal stage would not be superfluous if that full consideration had already occurred at the presumption stage.
Even in the Director’s brief, the agency does not provide an explanation, but refers us only to the reasoning offered by Judge Phillips in his concurring and dissenting opinion in Stapleton. Yet that opinion offers a complicated interpretation of § 727.-203, which contracts the evidence relevant at the rebuttal stage even as it makes more evidence available at the presumption stage. The agency has cited us no indication of its willingness to accept the full ramifications of Judge Phillips’ interpretation. In the absence of such a showing, we can only consider this endorsement of Judge Phillips’ views to be a litigation position to which we owe no deference. See Kickapoo Oil Co. v. Murphy Oil Corp., 779 F.2d 61, 66-67 (Temp.Em.Ct.App.1985) (litigation position in amicus brief not accorded deference); Alaniz v. Office of Personnel Management, 728 F.2d 1460, 1465 (Fed.Cir.1984) (no deference accorded in absence of evidence that agency applied interpretation in practice); Ames v. Merrill Lynch, Pierce, Fenner & Smith, 567 F.2d 1174, 1177 n. 3 (2d Cir.1977) (no deference to amicus position in absence of indication that interpretation is actual practice).
Because we lack any articulated agency reason for interpreting § 727.203 other than as we have done, we conclude that the agency’s interpretation is plainly erroneous, and we reject it. We hold instead that Revak was entitled to the benefit of the interim presumption so long as there was at least one qualifying ventilatory study or one qualifying physician’s opinion.
III.
Examination of the record reveals unequivocally that there is at least one qualifying ventilatory study sufficient to invoke the interim presumption. Additionally, there was one qualifying physician’s opinion. We do not gainsay that the medical report of Dr. Anderson was comprehensive, but the report of Dr. Bhatt was sufficient to invoke the presumption under the law. A physician’s report invokes the presumption if it is: (1) documented, (2) demonstrates an exercise of reasoned medical judgment, and (3) establishes a totally disabling respiratory or pulmonary impairment. See 20 C.F.R. 727.203(a)(4) (1980). According to the Secretary’s comments when issuing the regulation, documentation need not “consist exclusively of objective medical tests. It is intended that the physician’s observation of the miner, personal knowledge of the miner’s condition and work history, and other similar matters would constitute documentation.” 43 Fed. Reg. at 36,826.
Dr. Bhatt’s diagnosis of total and permanent disability as a result of coal worker’s pneumoconiosis was based, inter alia, upon the patient’s history of 35 years of coal mine employment, his complaints of shortness of breath for 12 years, and the findings of a ventilatory study indicating abnormal pulmonary function (Appendix at 30, 45). Under the regulations, the report was thus both documented and qualified as a reasoned medical judgment. Under these circumstances, the ALJ should have invoked the interim presumption.
For the foregoing reasons, the petition for review will be granted and the case remanded to the board for further proceedings consistent with this opinion.
. The ventilatory function studies of record yielded the following results:
EXHIBIT DATE FEVj MW HGT TRACING
A.201 3/26/75 (after bronchodilator) 2.74 2.70 99 99 67" No
A.223 2/28/79 (after bronchodilator) 2.43 2.59 101 121 68" Yes
A.230 11/30/79 2.32 122 67" Yes
A.242-43 6/3/80 2.37 94.5 68" Yes
A.204-11 10/28/82 (after bronchodilator) 2.43 2.69 80 96 67" Yes
The June 3, 1980 study and arguably the November 30, 1979 study produced qualifying values, but the rest of the study values were non-qualifying under 20 CFR 727.203(a)(2). The AU found the November 30, 1979 study to produce qualifying values (Appendix at 247). As the Director’s brief states, however, this finding may have been erroneous because, under the regulation for a person of height 67” or less, the FEV must be equal to or less than 2.3 and the MW equal to or less than 92. In view of our disposition of the matter, the status of the November 30, 1979 study is irrelevant.
. There is no dispute that Revak has met this requisite.
. Revak also makes a second claim: that the AU erred in his final determination that Revak is not totally disabled by pneumoconiosis because the AU failed to recognize that the definition of pneumoconiosis under the statute and regulations is broader than that in common usage. Revak claims that requirements of the statute are met by demonstrating “any chronic pulmonary impairment significantly related to, or aggravated by, dust exposure in coal mine employment.” 20 C.F.R. § 727.203. He then points to the statements of both Dr. Kaplan and Dr. Anderson that Revak's exposure to coal dust had exacerbated or aggravated his symptoms and that it would not (or might not) be medically advisable for Revak to return to employment near the mines (Appendix at 97-98, 108-109, 235). We note that an inability to return to the mines would appear to satisfy the test for total disability set out in 30 U.S.C. § 902(f)(1). However, because we agree with Revak on his first claim, we need not reach the second.
. The Stapleton opinions consume some 44 pages of the Federal Reporter. Stapleton also dealt with several questions that are not presented by the present record.
. Congress declined itself to prescribe the qualifications for benefits in the Black Lung Benefits Benefits Reform Act of 1977, Pub.L. No. 95-239, 92 Stat. 95 (1977), signed into law on March 1, 1978 ("The 1978 Amendments”) and instead delegated this authority to the Secretary of Labor.
. 20 C.F.R. 727.203 provides in pertinent part: (b) Rebuttal of interim presumption. In adjudicating a claim under this subpart, all relevant medical evidence shall be considered. The presumption in paragraph (a) of this section shall be rebutted if: ...
(4) The evidence establishes that the miner does not, or did not, have pneumoconiosis. (Emphasis added.)
. The appellees argue that invocation of the interim presumption on the basis of one item of evidence gives disproportionate effect to that item of evidence offered by the claimant. This argument is unconvincing, for the rebuttal phase rights any alleged imbalance.
. According to one study, cited by Senator Long, the autopsies of two hundred deceased coal miners revealed the presence of pneumoconiosis in twenty-five percent of them even though x-rays contained in their medical records were negative for the disease. Senate Subcomm. on Labor, Comm, on Labor and Public Welfare, 94th Cong., 1st Session, Legislative History of the Federal Coal Mine Health and Safety Act of 1969 (Public Law 91-173) As Amended Through 1974 Including Black Lung Amendments of 1972 2069 (Comm.Print Aug. 1975).
. The House included in its Report a letter from the Solicitor of Labor defending the constitutionality of the interim presumption on the grounds that all relevant evidence would be considered at the rebuttal stage:
A rebuttable presumption suffers from constitutional infirmity only if it is, in fact, irrebuttable in light of the circumstances surrounding its applicability. This is clearly not the case with respect to the interim criteria. Any coal operator has ample opportunity and resources available to him to present sound medical evidence tending to rebut the presumption of eligibility created by the interim criteria. Indeed, a coal operator often has greater resources at his disposal than does a claimant. Expert medical testimony, as well as a claimant's actual work responsibilities, are only two examples of possible rebutting evidence.
H.R.Rep. No. 151, 95th Cong., 2d Sess., reprinted in (1978) U.S.Code Cong. & Ad.News, 237, 255. Obviously, if the relevant evidence were balanced at the initial presumption stage, there would be no potential constitutional infirmity, and the Solicitor would have no need to stress the broad consideration of all evidence at the rebuttal stage.
. We also doubt that we should defer to an agency reinterpretation of its own regulation that so substantially changes the meaning of the regulation as to amount to the promulgation of a new regulation without opportunity for notice and comment. Notwithstanding our usual deference to an agency's interpretation of its own regulation, an agency must abide by its own regulations until it rescinds them. United States v. Nixon, 418 U.S. 683, 695-96, 94 S.Ct. 3090, 3101-02, 41 L.Ed.2d 1039 (1974). That obligation is especially important if a regulation follows notice and comment, for the regulation then is the product not only of agency expertise but also of public participation and occasionally, as occurred in this case, of Congressional participation as well.
. Judge Phillips would find the authority to balance evidence at the presumption stage essentially by bifurcating § 727.203(a) into different kinds of presumptions. Under this approach, the ALJ would weigh all the relevant evidence under each medical category specified by § 727.203(a) in deciding whether to invoke the presumption; once invoked, the facts found would become irrevocable. Rebuttal under § 727.203(b) would then be permissible only on grounds that did not support the invocation of the presumption. - For example, if the ALJ found the presumption invoked after weighing all the x-rays, that presumption would irrevocably establish that the miner has pneumoconiosis. The employer could rebut this presumption not by introducing evidence tending to disprove the existence of pneumoconiosis, but only by demonstrating that the individual is not totally disabled or did not develop pneumoconiosis as a result of his employment. Interpreting the regulation in this way, only grounds now set forth under Part (b) would be available for rebuttal of any particular presumption, and those grounds would differ depending on the reason for the presumption.
We consider Judge Phillips’ interpretation well refuted by the opinion of his colleague Judge Sprouse. 785 F.2d at 454-55 & nn. 8-12. As Judge Sprouse explained, the regulation does not distinguish different kinds of presumptions, and the regulation clearly provides that all the grounds under Part (b) are available for rebutting the presumption using "all the relevant evidence.” Furthermore, we note that Judge Phillips’ interpretation might permit an unrebuttable proof of pneumoconiosis through a mere preponderance of one kind of medical evidence, e.g., ventilatory studies, even though the unanimous mass of other kinds of medical evidence, • e.g., x-rays and doctors' opinions, indicated to the contrary. Such an interpretation might very well violate the statutory requirement that decisions be based on "all relevant evidence.” 30 U.S.C. § 923(b).
. While appellee’s contend that Dr. Bhatt’s report was not credible, they do not appear to contend that it was non-qualifying under the Secretary’s regulations.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
WILLIAM F. SMITH, Circuit Judge.
The plaintiff brought this action under the Wrongful Death Act, 12 P.S. § 1601 and the Survival Act, 20 P.S. § 320.601 of Pennsylvania. He joined as defendants Wilson Freight Forwarding Co., a corporation, and the Administrator of the Estate of Richard R. Lostetter, deceased. The said Administrator filed an answer to the complaint and, in addition, a cross-claim in which he joined as a defendant only the said corporation. The .defendant filed separate answers in each of which it denied liability and alleged in effect that the sole cause of the accident, to which reference is hereinafter made, was the negligence of the decedent Richard Lostetter, the driver of the automobile in which the decedent James Martin was a passenger. We shall refer to the parties as plaintiff, cross-claimant, and defendant.
The trial of the action resulted in a jury verdict in favor of the plaintiff and against the defendant, and a similar verdict in favor of the cross-claimant, on each of which a judgment was entered. The defendant made a motion for the entry of judgment notwithstanding the verdict and, in the alternative, for a new trial on the grounds that the evidence was insufficient to support the verdicts and that the verdicts were contrary to the weight of the evidence. The motion was denied and this appeal followed. The appeal is not from the judgment but from the denial of the motion. The defendant seeks reversal solely on the grounds urged in the court below in support of its motion for a new trial. The scope of review is therefore limited.
The decedents were fatally injured when an automobile in which they were occupants, one as a driver and the other as a passenger, collided with a tractor-trailer owned by the defendant and driven by one Thurman Korns, an employee. The accident happened early in the morning of September 2, 1962, on a curve in the highway at a point approximately five miles west of Shells-burg, Bedford County, Pennsylvania. At this point the paved portion of the highway is twenty feet wide and is divided into two lanes, delineated by the usual dual lines. The north and south sides of the highway are bordered by traversable berms six to eight feet in width. At the time of the collision the weather was slightly inclement and the roadway was wet.
The only eyewitness to the collision was the driver of the tractor-trailer but even with his testimony the evidence as to the manner in which the accident happened is somewhat meager. It sufficiently appears therefrom that prior to the collision the vehicles were proceeding in opposite directions, the automobile in the eastbound lane and the tractor-trailer in the westbound lane. It also sufficiently appears from the physical evidence, the damage to the respective vehicles, and the testimony of the driver, that the left side of the automobile rearward collided with the left front of the tractor-trailer.
After the accident the tractor-trailer, facing in an easterly direction, came to rest in a field on the south side of the road; the automobile, facing in a westerly direction, came to rest on the berm of the eastbound lane. The debris was scattered over the roadway but the larger portion of it was in the westbound lane. The plaintiff and cross-claimant contended in the court below that at the time of the impact the tractor-trailer was in the eastbound lane on its wrong side of the highway; the defendant contended to the contrary.
According to his testimony the driver of the tractor-trailer first saw the automobile on the curve, fifty feet ahead, at which point it was skidding sideways, its front facing in a southerly direction. He testified on cross-examination that his range of view extended ahead for a distance of approximately 150 feet. He further testified that this view was partially obstructed by a vehicle proceeding eastwardly approximately 100 feet ahead of the automobile in which the decedents met their death. This explanation is in conflict with his answer to an interrogatory propounded by the plaintiff prior to trial. The testimony of the driver as to what happened after he first saw the automobile and before the collision is uncertain.
The decedent driver must be presumed to have exercised reasonable care for his own safety and that of his passenger in the absence of evidence in the record to the contrary. Newsome v. Baker, 395 Pa. 99, 148 A.2d 906, 908 (1959) and other cases herein cited. This presumption in and of itself was of no significant probative value and did not relieve the plaintiff and cross-claimant of the burden of proving the defendant’s negligence by a fair preponderance of the evidence. Moore v. Esso Standard Oil Co., 364 Pa. 343, 72 A.2d 117 (1950); Klink v. Harrison, 332 F.2d 219, 228 (3rd Cir. 1964) and the cases therein cited.
Proof of the defendant’s negligence rested entirely on the evidence as to the physical facts, and particularly the location of the tractor-trailer after the accident. The defendant’s case rested primarily on the testimony of the driver of the tractor-trailer. This testimony was sufficiently uncertain, at least in part, to create in the minds of the jurors some misgiving as to the credence and weight to be given it. This misgiving may have been given further emphasis by the testimony of a disinterested witness who arrived on the scene shortly after the accident occurred. He testified that when the driver was asked “how the accident had happened,” he replied, “I do not know.”
We are of the opinion that under the circumstances the jury was not required to accept the testimony as wholly true; the jurors, as the sole arbiters of issues of credence and weight, had a right to consider the testimony in light of the other evidence and to discard such portions of the testimony as it found either incredible or lacking in persuasive weight. Wooley v. Great Atlantic & Pacific Tea Company, 281 F.2d 78, 80 (3rd Cir. 1960) and the cases therein cited; Yurkonis v. Dougherty, 382 Pa. 387, 115 A.2d 193, 195-196 (1955). The argument of the defendant to the contrary is without merit.
The defendant challenges on this appeal, as it did in the court below in support of its motion for a new trial, the sufficiency of the evidence to support the verdicts. This challenge is precluded by the defendant’s failure to comply with rule 50(a) Fed.Rules Civ.Proc., 28 U.S.C.A. An examination of the original record discloses that at the close of the evidence offered by the plaintiff the defendant made a motion “for a compulsory non suit” which we here treat as analogous to a motion for a directed verdict under the rule. The motion was denied and the defendant then offered evidence in support of the defenses pleaded in its answers. The motion was not renewed at the close of all the evidence. The defendant made no motion for a directed verdict at the close of the cross-claimant’s case or at the close of all the evidence.
The failure of the defendant to move for a directed verdict against the plaintiff and cross-claimant at the close of all the evidence foreclosed its right to raise on appeal any issue as to the sufficiency of the evidence and also its right to move for judgment notwithstanding the verdict. Massaro v. United States Lines Company, 307 F.2d 299, 303 (3rd Cir. 1962); Budge Manufacturing Co. v. United States, 280 F.2d 414, 416 (3rd Cir. 1960). This Court and others have uniformly held that the introduction of evidence after the denial of a motion for directed verdict constitutes a waiver of the error, if any, in the denial unless the motion is renewed at the close of all the evidence. Ibid; Pruett v. Marshall, 283 F.2d 436, 438 (5th Cir. 1960); Rotondo v. Isthmian Steamship Co., 243 F.2d 581, 582 (2nd Cir. 1957); Fleming v. Lawson, 240 F.2d 119, 120 (10th Cir. 1956); 5 Moore’s Federal Practice ¶ 50.05, pp. 2322-23. The court below may not be held to have erred on an issue which was not properly raised.
However, the disposition of the question raised by the defendant need not rest on the procedural ground alone. If the question were still open we would be compelled to conclude that the evidence, viewed in the light most favorable to the plaintiff and cross-claimant, was sufficient to justify the submission of the issue of negligence to the jury. See Klink v. Harrison, supra, 332 F.2d 225; Benner v. Weaver, 394 Pa. 503, 147 A.2d 388 (1959); Mitchell v. Stolze, 375 Pa. 296, 100 A.2d 477 (1953); Wenham Transportation, Inc. v. Radio Const. Co., 190 Pa.Super. 504, 154 A.2d 301 (Super. Ct.1959); but see Satovich v. Lee, 385 Pa. 133, 122 A.2d 212 (1956). The last cited case, relied on by the defendant, is distinguishable. Therein the court held, 122 A.2d at page 214, “Both cars were so close to the center line that there can be nothing but conjecture with respect to their positions when they collided.” The vehicles in the instant case came to rest south of the eastbound traffic lane, the automobile on the berm and the trailer-tractor in a field beyond the berm, approximately twenty feet or more from the dividing lines.
The plaintiff seems to argue, although it is not entirely clear from the brief, that the verdict was against the weight of the evidence and that the denial of its motion for a new trial based on this ground was error. The issue raised by this argument, which must be decided under federal law, requires only brief discussion.
The defendant argues that the evidence upon which it relied in the trial of the action preponderates in its favor. This argument cannot avail the defendant on this appeal. It is the function of the jury, as the fact finding body, to weigh the evidence and inferences. Byrd v. Blue Ridge Rural Elec. Cooperative, 356 U.S. 525, 537, 78 S.Ct. 893, 901, 2 L.Ed.2d 953 (1958). It is therein stated:
“The federal system is an independent system for administering justice to litigants who properly invoke its jurisdiction. An essential characteristic of that system is the manner in which, in civil common-law actions, it distributes trial functions between judge and jury and, under the influence — if not the command — of the Seventh Amendment, assigns the decisions of disputed questions of fact to the jury.”
If the evidence in the record, viewed from the standpoint of the successful party, is sufficient to support the jury verdict, a new trial is not warranted merely because the jury could have reached a different result. Jarrell v. Ford Motor Company, 327 F.2d 233, 234-235 (4th Cir. 1964); Land O’ Lakes Creameries, Inc. v. Hungerholt, 319 F.2d 352, 360 (8th Cir. 1963); Armco Steel Corp. v. Realty Investment Co., 273 F.2d 483, 488 (8th Cir. 1960); Bolan v. Lehigh Valley R. R. Co., 167 F.2d 934, 937 (2nd Cir. 1948). Neither the trial court nor this Court may substitute its judgment for that of the jury on disputed issues of fact. Ibid.
The judgment of the court below will be affirmed.
. It is the law of Pennsylvania that proof that a vehicle skidded will not support an inference of negligence in the absence of evidence that the skidding was caused by the negligent conduct of the driver. Matkevich v. Robertson, 403 Pa. 200, 169 A.2d 91, 93; Richardson v. Patterson, 368 Pa. 495, 84 A.2d 342, 343. There was no such evidence in this case,
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
MAGRUDER, Circuit Judge
(Retired).
This appeal was prosecuted by leave of this court granted in order to resolve a basic and difficult problem of practice. 264 F.2d 591. The case was begun by a complaint filed in the United States District Court for the District of Rhode Island, containing five counts sounding in tort. It alleges that in 1956 the Independent Bakery Workers Union won an election conducted by the National Labor Relations Board among the employees of a certain bakery of The Great Atlantic & Pacific Tea Company, that Local 184 of the Bakery and Confectionery Workers International Union of' America was rejected by the employees at that election, and that the Independent Union was then duly certified by the-NLRB as the collective bargaining agent for the employees at that bakery. Thereafter the International Union “maliciously and unlawfully interfered with the employment contract and rights” of' the members of the Independent Union (Count 1), conspired with the A. & P. so to interfere (Count 2), “intentionally and maliciously induced and persuaded” the A. & P. to sever such employment (Count 3), conspired with the A. & P. to commit such inducement (Count 4), and conspired with the A. & P. to deprive the members of the Independent, Union of their rights under the National. Labor Relations Act, 29 U.S.C.A. § 151, et seq. (Count 5).
The plaintiffs are three individuals alleged to have been members of the Independent Union (which is now defunct) and to be Massachusetts citizens. They purport to sue on behalf of themselves and others similarly situated, but the district court ruled that they constituted a so-called “spurious” class under Rule 23(a) (3) of the Federal Rules of Civil Procedure, 28 U.S.C.A., and that the rights of absent members of the plaintiff class would not be adjudicated. The thirteen named defendants, said to be Rhode Island citizens and members of the International Union, are sued as members and representatives of that Union, an unincorporated labor organization having in excess of 50,000 members. Plaintiffs claim that defendant Oskoian is an “international representative” of the International Union and that defendants Kavanaugh and Boudreau are officers of Local 184; assuming these allegations to be true, the district court found that the named defendants adequately represent the defendant class.
The defendants filed timely motions to dismiss for sundry reasons and various motions for other relief, all of which were denied. One ground of the motions to dismiss was in essence that the named defendants lacked the capacity to be sued as representatives of the International Union; the motions affirmatively stated that no named defendant was an officer of the International Union and that the officers of that Union were known to the plaintiffs. The court below held that the propriety of an action against the defendant class was a question of procedural law governed only by F.R.Civ.P. 23(a), and that neither the rule of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, nor F.R.Civ.P. 17(b) required compliance with state law; the court also certified that its order denying the motion to dismiss involved a controlling question of law as to which there was substantial ground for difference of opinion and that immediate appeal therefrom might materially advance the ultimate termination of the litigation. On the defendants’ motion we then granted leave to appeal under 28 U.S.C. § 1292(b) because we thought the question of capacity of the defendant class to be sued presented the “exceptional case” that justified invocation of the new interlocutory appeal procedure. 1 Cir., 1959, 264 F.2d 591. Our permission to appeal was limited to this one issue; although the district court’s decisions on other related matters are accepted as premises for our decision of this question, nothing in this opinion should be construed as a review of those matters.
As our opinion granting leave to appeal intimated, our inquiry must start with Rule 17(b) F.R.Civ.P., which provides in pertinent part:
“[Cjapaeity to sue or be sued shall be determined by the law of the state in which the district court is held, except (1) that a partnership or other unincorporated association, which has no such capacity by the law of such state, may sue or be sued in its common name for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States * *
We went on to say that, “It is apparent that the present case is not one for enforcing against an unincorporated association a substantive right ‘existing under the Constitution or laws of the United States’. Therefore, since the exception has no application, the general rule becomes operative, that capacity to be sued must be governed by the law of the state in which the district court is held, in this case by the law of Rhode Island.” 264 F.2d at page 593. The inapplicability of the exception, as we said, distinguishes the case relied on by the district court, Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 4 Cir., 1945, 148 F.2d 403, where the court was considering a suit on a federal right of action. We doubt that anything said there was intended to apply to cases like the present one, but if so it must have been obiter dictum. Weeks v. Bareco Oil Co., 7 Cir., 1941, 125 F.2d 84, is similarly inapposite.
One method of suit against an unincorporated labor union under the law of the state is defined by §§ 9-2-10 through 9-2-15 of the General Laws of Rhode Island. In particular, § 9-2-12 provides:
“Actions against unincorporated associations. — Any action or other proceeding at law may be maintained to recover any property, or upon any cause of action for or upon which the plaintiff may maintain such an action or proceeding at law against all the associates, by reason of their interest or ownership, or claim of ownership therein, against the president and secretary of such association, or the officers or members exercising substantially the duties, respectively, of president and secretary, or if there be no such officer, or officers or members exercising such duties, or either of them, then against any other two (2) officers of such association, or if there be but one (1) officer, then against such single officer, or if there be no officer known to the plaintiff, then against any member of such association, describing such officer or officers, member or members, as the representative or representatives of such association.”
Section 9-2-14 prohibits execution of the judgment in such an action against the person or property of members or officers of the association, and authorizes execution out of property of the association instead.
If the plaintiffs had complied with this procedure, the suit would have been properly brought under Rule 17(b) against the Union as an entity. Compare Van Sant v. American Express Co., 3 Cir., 1948, 169 F.2d 355, 372. It is clear, however, that plaintiffs have failed either to join the president and secretary of the International Union or more than one alleged officer thereof, or to allege that such other officers do not exist or are unknown to them. On the contrary, they apparently admit that they know the identity of the statutorily designated officers, and they claim that, since those officers are located outside Rhode Island, failure to join them is justified. 'This excuse is completely without support in the statutory language, which is unambiguous. Furthermore, it seems quite reasonable that the Rhode Island legislature might demand the presence of the principal officers of a union within the state as a prerequisite to the assertion of jurisdiction over that union as an> entity. We must construe the plain words of § 9-2-12 to require that the Union be sued through service on the specified officers. Cf. Hagan v. Bricklayers’ etc. Union No. 28, 1932, 143 Misc. 591, 256 N.Y.S. 898. Such a special procedure for obtaining jurisdiction must be complied with strictly. Cf. Hanke v. Cigar Makers’ International Union, 1899, 27 Misc. 529, 58 N.Y.S. 412; A. J. Siris Products Corp. v. Price, 1956, 3 Misc.2d 144, 148 N.Y.S.2d 180; League of Mutual Taxi Owners, Inc. v. United Construction Workers, Sup.Ct.1949, 90 N.Y.S.2d 288; Mason v. Holmes, 1900, 30 Misc. 719, 64 N.Y.S. 596. It is obvious that the plaintiffs have not nroperly sued the International Union as an entityTmder Rule 17(b) F.R.Civ.P. and § 9-2-12 of the state statute. International Union United Automobile Aircraft & Agr. Implement Workers of America v. Delta Air Lines, Inc., D.C.N.D.Ga. 1949, 83 F.Supp. 63; see Worthington Pump & Machinery Corp. v. Local No. 259 of United Electrical etc. Workers, D.C.D.Mass.1945, 63 F.Supp. 411; Gerut v. Poe, D.C.N.D.Ill.1951, 11 F.R.D. 281.
Still, it does not follow that the action should have been dismissed. Although the substantive allegations of the complaint plead tortious conduct of the International Union, the individual defendants may have been named as representatives not of the Union but rather of a class comprising its members. Compare Lowry v. International Brotherhood of Boilermakers, etc., 5 Cir., 1958, 259 F.2d 568; Fennell v. Bache, 1941, 74 App.D.C. 247, 123 F.2d 905, certiorari denied 1941, 314 U.S. 689, 62 S.Ct. 359, 86 L.Ed. 551. It appears that the law of Rhode Island recognizes one other remedy for the torts of an unincorporated association, that is, a suit against all the members of the union. This was the established method at common law, United Mine Workers v. Coronado Coal Co., 1922, 259 U.S. 344, 42 S.Ct. 570, 66 L.Ed. 975; Local Union No. 1, Textile Workers v. Barrett, 1896, 19 R.I. 663, 36 A. 5, and there is no reason to believe that it was abolished by the statute. That a suit against all the members may be maintained despite the statute is indicated by the permissive phraseology of § 9-2-12, and by the express terms of § 9-2-15 barring suits against the members while an action under the statute is pending. The defendants concede in their brief that an action against all the members may yet be brought. To have complied with Rule 17(b), as plaintiffs were clearly obliged to do, they must have brought suit by one of these two jtate-ereated methods — against the International Union as an entity or against all of its members. Conversely, such compliance fully satisfies Rule 17(b).
Whereas Rhode Island law recognizes two procedures, the Pennsylvania statute, to which reference was required by Rule 17(b) in the cases the defendants rely upon, is exclusive and mandatory in its terms, eliminating all other methods of enforcing the liability of an unincorporated association. See Underwood v. Maloney, 3 Cir., 1958, 256 F.2d 334, 337 note 3, 342; Lloyd A. Fry Roofing Co. v. Textile Workers Union of America, AFL-CIO, D.C.E.D.Pa.1957, 149 F.Supp. 695; D.C.E.D.Pa.1957, 152 F.Supp. 19. These cases are therefore no authority for our decision. The present litigation may be maintained, consistently with both Rule 17(b) and the law of Rhode Island pertaining to capacity to be sued, if, and only if, by the terms of Rule 23(a) (1) a class action such as the present one may be used as a procedural device in the federal court to effect a suit against all the members of the International Union, and to obtain a binding judgment against all of them.
Rule 23(a) F.R.Civ.P., in so far as here relevant, reads:
“(a) Representation. If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued, when the character of the right sought to be enforced for or against the class is
“(1) joint, or common, or secondary in the sense that the owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it;
* * * * * *
“(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought.”
As a matter of federal law, then, all the members of a union may be sued and bound by a “true” class action under Rule 23(a) (1). See 3 Moore’s Federal Practice, par. 23.08 (2d ed. 1948).
The state courts in Rhode Island will entertain a nonbinding class suit of a “spurious” nature (cf. Rule 23(a) (3)), e. g., Vernon v. Reynolds, 1898, 20 R.I. 552, 40 A. 419, but a binding class suit, such as this one would have to be (under Rule 23(a) (1)), is forbidden in those state courts by Equity Rule 67, which has the force of a statute, see Letendre v. Rhode Island Hospital Trust Co., 1948, 74 R.I. 276, 60 A.2d 471. The defendants contend that by the rule of Erie R. Co. v. Tompkins, supra, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, and Guaranty Trust Co. of New York v. York, 1945, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, this prohibition and/or the specific definition of representatives in a virtual representation suit found in § 9-2-12, are binding on the federal court.
We find little to aid us in the decided cases under Rule 23 (a) which have been cited. See Montgomery Ward & Co., Inc. v. Langer, 8 Cir., 1948, 168 F.2d 182; White v. Quisenberry, D.C.W.D.Mo. 1953, 14 F.R.D. 348; Sanders v. International Ass’n, of Bridge, etc., Workers, D. C.W.D.Ky.1954, 120 F.Supp. 390. The state law relevant in the three cases just cited did not allow a suit against the entity and affirmatively permitted a class action in the- state courts. Both types of suits were allowed by the state law relevant in Lowry v. International Brotherhood of Boilermakers, etc., supra, 5 Cir., 259 F.2d 568; Cross v. Oneida Paper Products Co., D.C.D.N.J.1954, 117 F.Supp. 919; and International Allied Printing Trades Ass’n v. Master Printers Union, D.C.D.N.J.1940, 34 F.Supp. 178. There are only some implications in point. Pascale v. Emery, D.C.D.Mass. 1951, 95 F.Supp. 147, arose in a state where class actions were permitted against unions, see Donahue v. Kenney, 1951, 327 Mass. 409, 99 N.E.2d 155, but it is apparent that the district court did not rely on that fact in deciding that an action could be maintained under Rule 23(a). A similar opinion might be inferred from two cases which, without adverting to the law of the state, held that a Rule 23(a) class action might be brought. Tisa v. Potofsky, D.C.S.D.N.Y. 1950, 90 F.Supp. 175; Ketcher v. Sheet Metal Workers’ International Ass’n, D.C. E.D.Ark.1953, 115 F.Supp. 802. On the other hand, the reasoning in Robertson v. Limestone Mfg. Co., D.C.W.D.S.C. 1957, 20 F.R.D. 365, implies that state authority for a class suit would be prerequisite to the allowance of such an action. It cannot be said that the holding of the court below was in conflict with that of any prior case.
I Of course, the rule of Guaranty Trust Co. of New York v. York, supra, 326 U.S. at page 109, 65 S.Ct. at page 1470, that “the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court”, cannot be read so literally as to mean that (no recovery may be had from a federal court that might not have been obtained from a state court. <) The same opinion recognizes (326 U.S. at page 105, 65 S.Ct. at page 1468) that “[t]his does not mean that whatever equitable remedy is available in a State court must be available in a diversity suit in a federal court, or conversely, that a federal court may not afford an equitable remedy not available in a State court.” ©he fact that a federal court can offer a procedure different, from that available in the state court does not preclude the application of the state substantive law so that the result will be the same as it would be in such an action brought in the state court. See Griffin v. McCoach, 1941, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481 (inter-pleader) ; D’Onpfrio Construction Co., Inc. v. Recon Co., Inc., 1 Cir., 1958, 255 F.2d 904 (third-party claim). In the ¿resent case the result in the federal court — binding all the International (Union’s members — will be the same as (that in a state court common law action (against the membership, and the plaintiffs must make out a good cause of action under Rhode Island law against all members of the defendant class — Only in the manner of conducting this litigation does, any dOTiatTon occur.
Undeniably a class action involving members of an unincorporated association is a venerable device of equity. See Mr. Justice Story in West v. Randall, C. C.D.R.I.1820, 29 Fed.Cas. at page 722, No. 17,424. It is equally certain that there are many procedural problems raised by a suit such as this one, for example, determining the liability of the individual members of the class because of their participation in, ratification of, or authorization of the tortious conduct, cf. Martin v. Curran, 1951, 303 N.Y. 276, 101 N.E.2d 683; Browne v. Hibbets, 1943, 290 N.Y. 459, 49 N.E.2d 713; Torres v. Lacey, 1957, 5 Misc.2d 11, 159 N.Y.S.2d 411, ascertaining the share of the plaintiffs’ recovery, if any, to be borne by each member of the defendant class, and assuring that the absent members are afforded due process, cf. Hansberry v. Lee, 1940, 311 U.S. 32, 61 S.Ct. 115, 85 L.Ed. 22. But these are merely procedural problems of the federal court in applying the controlling state substantive law, and their resolution must be judged by the guaranties of the Federal Bill of Rights. Such difficulties alone cannot justify a rule elevating the state procedural law to a supreme position. The district court would be faced with many other (probably insurmountable) procedural problems if there had to be over 50,000 parties defendant.
Thus we are clear that Rule 23(a) (1) is a valid “procedural’’ device, as applied to avoid the necessity of having more than 50,000 parties defendant in the United States District Court for the District of Rhode Island. The present class action under that rule is a proper exercisejfftheJJhodeJ^ law allowing "an action for the tort of a labor union to be brought against all the members thereof, which will require the same result as would be reached if all the International Union’s members were sued in the state court. The fact, if it is a fact, that as a practical matter only under Rule 23(a) in the federal court might an action be brought against the members of the International Union is certainly not to be condemned as unseemly, mischievous, discriminatory, or unconstitutional, any more than the jurisdictional advantages of the Federal Interpleader Act, 28 U.S.C.A. §§ 1335, 1397, 2361, invalidate that Act. It follows that the adequacy of representation assured the defendant class by the presence of the named parties defendant, as found by the district court, is a corollary federal question and is not prejudged by R.I.Gen.L. § 9-2-12. The decision of the district court on the issue which is the subject of this appeal was correct.
A judgment will be entered affirming the order of the District Court in the respect in which this appeal was allowed.
. Plaintiffs-appellees’ contention that the issue was not raised is wholly without merit.
. If the defendants were only a “spurious” class under Rule 23(a) (3) F.R. Civ.P., we would be constrained to agree with their contentions on appeal, since the only Rhode Island alternative to the statutory procedure is a suit against all the members and an action against only thirteen of them is not authorized by the state substantive law. This distinction is crucial.
. We view § 9-2-12 as creating an “entity”, not a “virtual representation”, suit, cf. 37 Harv.L.Rev. 793, 809-10 (1924), but we will assume arguendo that the statute specifies class representatives.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PELL, Circuit Judge.
The petitioner, W-I Canteen Service, Inc. (Canteen), seeks review of an order of the National Labor Relations Board. The Board has cross-applied for enforcement of its order. The Board found that Canteen violated sections 8(a)(1) and (3) of the National Labor Relations Act by discharging and otherwise penalizing employees for engaging in a sympathy strike. The determinative issue is the legality of the strike under two collective bargaining agreements negotiated by the petitioner and Retail Clerks Local 1354. Canteen argues that the agreements clearly and unequivocally waived the right to engage in sympathy strikes at its premises and that the Board’s interpretation of the agreements was erroneous. Also at issue is the Board’s determination that Canteen violated section 8(a)(1) of the Act by coercively interrogating one of its employees about her union activities.
I. Facts
A. The Collective Bargaining Agreements
The petitioner, Canteen, services and maintains vending machines in the Rockford, Illinois, area. At its Rockford plant, Canteen and the Retail Clerks Union Local 1354 have been parties to three separate collective bargaining agreements covering three separate bargaining units. One agreement covers the service and maintenance unit. Members of this unit report to Canteen’s Rockford facility to pick up goods for delivery to the premises of customers. Three members of this unit report directly to a nearby Chrysler plant and remain there all day without reporting to the Canteen Rockford facility. Another bargaining agreement covers members of the bakery unit, which produces some of the goods sold in the vending machines. The third agreement covers clerical workers. The service and maintenance agreement (Service Agreement) was first negotiated in 1968 and was renegotiated in 1969, 1972, and 1975. The bakery unit agreement (Bakery Agreement) was first negotiated in 1968 and was renegotiated in 1971 and 1974. The clerical unit agreement was entered into for the first time in 1976.
The 1975 Service Agreement, which covers the events at issue here, contains the following no-strike provision:
ARTICLE XVIII
STRIKE AND LOCKOUTS
The Company and the Union agree that there will be no strike or lockout during the life of this Agreement so long as the Company and the Union abide by the terms of this Agreement or submit to arbitration any differences which may arise which are not covered by this Agreement.
The following two provisions, appearing in separate articles of the same agreement, relate to picket lines:
ARTICLE VII
DISCHARGE AND DISCRIMINATION
SECTION 3. The Company will not, as a condition of continued employment, require the employees to cross any picket line established on or in front of the premises of any other company. The individual or concerted refusal to pass such a picket line shall not constitute grounds for discipline, discharge, and is not to be considered as violating any provision written or implied which prohibits the Union from striking.
* # * * * *
ARTICLE XVII
MISCELLANEOUS
SECTION 9. In the event of a strike or lockout of any certified Union, it shall not be considered a violation of this Agreement for the members of the Union to refuse to deliver goods or service machines where such controversy is on. The Union agrees, however, that the accounts in the Company must be serviced and they will not in any way attempt to interfere with such servicing by Company personnel other than employees covered by this Agreement.
An arbitration article in the 1975 Service Agreement permits either party to initiate arbitration in the event of proper exhaustion of preliminary procedures. The scope of the arbitration provision is defined in this way:
The arbitrator shall have authority and jurisdiction to determine the propriety of the interpretation and/or application of the Agreement respecting the grievance in question, but he shall not have the power to alter or modify the terms of the Agreement. With respect to arbitrations involving discharge or discipline. the arbitrator shall determine if the discharge... was for just cause.
The no-strike clause of the 1974 Bakery Agreement covering the events at issue here is identical to the Service Agreement provision quoted above. The scope of the arbitration clause also is identical to the clause in the Service Agreement. The Bakery Agreement, however, has no picket line permission clause.
B. Past Conduct Under the Contracts
The service and maintenance unit in Rockford has twice in the past engaged in a strike: during negotiations leading to their 1972 agreement and during negotiations leading to their 1975 agreement. The 1972 strike lasted two to three weeks. The 1975 strike lasted only a few days.
During the 1972 strike, the service and maintenance unit employees picketed the Rockford premises. Canteen’s bakery did not operate, except to service the few contract obligations requiring performance during a strike. These obligations were carried out by supervisory personnel. None of the bakery unit employees crossed the picket line during the strike. No bakery employee was subjected to discipline for failure to report to work during the period of the strike.
In 1973, Canteen discharged the service and maintenance employees who worked full-time at the Chrysler plant when they refused to cross a picket line established by auto workers at that plant. The employees protested and were reinstated. Canteen issued a written statement to the union concerning picket lines, which said in part:
Since 1957, the company’s policy has been to allow any employee the right to decide whether or not to cross a picket line. This is a personal decision on his part and his decision to cross a picket line or not has been his decision to work or not to work. His refusal to not [sic] work is his decision to take, in essence, a voluntary lay-off. This has been the case in all previous instances, the employee has not worked until the picket line is removed or he is needed to help in other areas or routes.
In no instance in the past have any employees been discharged, disciplined or discriminated against due to their refusal to cross a picket line, all have been treated equally and fairly.
During the negotiations leading to the 1975 Service Agreement, the service and maintenance unit employees again went on strike and picketed Canteen’s Rockford premises. The bakery operations again were cut back. Some employees did not work part of the time during which the picket line was up. Some of the workers returned to work during the strike, and Canteen directed the remaining bakery employees to return to work.
C. The 1976 Sympathy Strike
In Madison, Wisconsin, Canteen maintains another facility engaged in the same business as the Rockford, Illinois, facility. Teamsters Local 695 was certified as the bargaining representative of the service and maintenance employees at this facility in March 1976. The Madison employees began a strike on May 4, 1976. On May 6, 1976, Retail Clerks Local 1354 held a meeting of employees of the three Rockford bargaining units. A Teamsters union representative attended the meeting and explained to the Rockford employees that the initial contract negotiations in Madison were not progressing satisfactorily and that the Madison employees were on strike. The Teamster representative proposed placing a picket line at the Rockford facility. The Rockford employees voted 14 to 14 on a request to support the Madison strike, and therefore no formal resolution of support was made. The Rockford local president, Merle Heitz, told the employees that it would be up to each individual to decide whether to honor a Teamsters picket line at the Rockford facility. After the meeting, one Rockford service and maintenance employee privately asked Heitz what would happen if Canteen should bring trucks across the Teamster picket line. Heitz told the employee that refusal to work under these circumstances would cost the employees their, jobs.
Over the following weekend the Teamsters informed the Rockford local that a picket line would be set up in Rockford on Monday, May 10. The picket line was set up on that day at 5:00 a. m. Thirteen Rockford employees did not report to work. Of these thirteen, eleven were members of the service and maintenance unit. In the bakery unit, only one of the six employees did not report for work. In the clerical unit, one of the five employees, Lisa Erickson, did not report.
On the morning of May 10, the first day of the picketing, eight of the employees who did not report for work met near the plant with a Retail Clerks business representative. The employees were advised to apply for food stamps and unemployment compensation. At another meeting later that morning an employee asked Merle Heitz what to do if Canteen called and requested them to return to work. Heitz instructed the employees to stay away from their phones. Heitz also instructed them that if the employer offered to bring work to them at a location where they would not have to cross the picket line, they would be fired if they did not perform the work. Canteen made efforts to reach the service and maintenance unit employees at home by telephone. The president of Canteen, Charles Swanson, ordered that employees who refused to come to work be told that they were fired. Canteen offered to deliver equipment to some of the employees so that they would not have to cross the picket line to perform their duties. None of the striking employees agreed to these terms.
The next day, Lisa Erickson, the clerical unit employee, called Canteen to find out whether she would be allowed to return to work. Although Canteen had not called her for work or terminated her, Erickson had been told by Merle Heitz that the clerical unit contract was substantially different from the others and she would be subject to discipline if she did not return to work. Erickson was told by the company that she could return, and she reported for work the next day, May 12. When Erickson returned to work, she asked Charles Swanson whether she would be considered a continuing employee or a newly-hired employee. Swanson told Erickson that she would be considered a continuing employee. He wondered, however, why she refused to cross the picket line, because the office workers “weren’t union” and had reported to work. He also expressed surprise at Erickson’s refusal to cross the picket line, because Canteen had no record of her paying union dues or enrolling in the union. He asked her whether she had ever signed a union card or paid dues. Erickson responded that she thought she was a union member, but that she had never signed a card or paid dues.
William Ambrosia was a service and maintenance unit employee with eight years of experience. He honored the picket line for two days, returning to work on May 12. On May 10, a Canteen supervisor called Ambrosia by two-way radio and told him to go home and to wait for a telephone call. In the late afternoon Ambrosia told his supervisor that he would not go to work because of the picket line. The supervisor informed Ambrosia that Canteen had applicants who wanted his job. The next day, Charles Swanson informed Ambrosia that he was fired. On May 12, Ambrosia reported to work and was told that he had to come back as a new employee and was required to fill out an application before being restored to his job.
Another service and maintenance employee, John Eells, was ordered on the first day of the picketing to pick up his truck at a point away from the plant and go to work. Eells later called Charles Swanson and told him he would not work. Swanson told Eells that he was fired. On May 14, however, Swanson called Eells and told him he could return to work. When Eells reported to work, he was told that he could only return as a newly-hired employee and that he would have to fill out an application form. Although Eells and Ambrosia were restored to their previous rate of pay, they lost seniority and other benefits.
From the beginning of the picketing to May 17, Canteen hired only one new service and maintenance employee and no employees in the bakery or clerical units. Of the thirteen employees who originally honored the picket line, ten had not returned to work by May 17. On May 18, Canteen sent a letter to the union terminating all thirteen employees. During the period of the sympathy strike, Canteen did not formally assert to the union that the work stoppage was a breach of the collective bargaining agreements. The Teamsters removed the picket line on July 6. On July 7, the ten remaining strikers reported to the Rockford facility with a union representative ready to return to work. Canteen informed the ten workers that they were no longer employed by the company.
D. The Board’s Conclusion and Order
The Board found that Canteen violated sections 8(a)(1) and (8) of the Act by firing the twelve sympathy strikers and by rehiring two of the strikers only as new employees. The Board also found that Canteen violated section 8(a)(1) of the Act by coercively interrogating Lisa Erickson concerning her union affiliations. The Board’s order requires the company to cease and desist from the unlawful conduct and from interfering in any other manner with the exercise of section 7 rights. The order directs Canteen to offer full reinstatement, back pay, and full benefits to the twelve employees fired for their strike activities and to post appropriate notices.
II. Legality of the Sympathy Strike
It is well-settled that section 7 of the Act protects employees who engage in a sympathy strike in support of a lawful, primary strike by another union. See, e. g., Gary Hobart Water Corp. v. NLRB, 511 F.2d 284, 287 (7th Cir. 1975), cert. denied, 423 U.S. 925, 96 S.Ct. 269, 46 L.Ed.2d 252; Teamsters Local 79 v. NLRB, 117 U.S.App. D.C. 84, 325 F.2d 1011 (D.C. Cir. 1963), cert. denied, 377 U.S. 905, 84 S.Ct. 1165, 12 L.Ed.2d 176. It is equally well-settled that employees may waive this right in the collective bargaining agreement. See Buffalo Forge Co. v. United Steelworkers of America, 428 U.S. 397, 405, 96 S.Ct. 3141, 49 L.Ed.2d 1022 (1976); NLRB v. Rockaway News Supply Co., 345 U.S. 71, 80-81, 73 S.Ct. 519, 97 L.Ed. 832 (1953). The contractual waiver of this right, however, must be “clear and unmistakable.” Gary Hobart Water Corp. v. NLRB, supra. In determining the scope of the unions’ contractual no-strike obligation, the courts have engaged in
a case-by-case analysis of the language of the bargaining agreements in issue and on their operation within the factual circumstances of the labor controversy at hand.
NLRB v. Keller-Crescent Co., 538 F.2d 1291, 1296 (7th Cir. 1976). See Rockaway News, supra; Iowa Beef Processors v. Amalgamated Meat Cutters, 597 F.2d 1138 (8th Cir. 1979). In light of these factors, we have concluded that both the 1975 Service Agreement and the 1974 Bakery Agreement clearly and unmistakably waived the employees’ right to honor picket lines at Canteen’s Rockford premises.
A. The Service Agreement
Eleven of the twelve striking workers covered by the Board’s order were subject to the 1975 Service Agreement. Despite the broad language of the no-strike clause in this agreement that there “will be no strike or lockout during the life of this Agreement so long as the Company and Union abide by the terms of this Agreement,” the Administrative Law Judge and the Board declined to interpret the clause as a waiver of the right to engage in a sympathy strike. The opinion of the ALJ, adopted by the Board, gave this premise for not applying the no-strike clause:
. [I]n three recent decisions [citations omitted], the Board has held that similar or even more explicit no-strike language is not as clear as it might seem to be, and that implied in any such undertakings is an unspoken but real limitation, namely that the duty to refrain from striking is no broader than the terms of the grievance and arbitration machinery which is also contained in the contract.
Sympathy strikes normally involve disputes outside the scope of the employees’ contract with their employer. It thus follows from the premise quoted above that a duty to arbitrate disputes under the contract will not preclude a sympathy strike. The Board has reasoned in this case that the Service Agreement arbitration clause, which gives the Arbitrator “authority and jurisdiction to determine the propriety of the interpretation and/or application of the Agreement respecting the grievance in question..” limits the no-strike obligation of the union strictly to grievances under the agreement.
This principle of coterminous application of the arbitration and no-strike clauses, see Gateway Coal Co. v. United Mine Workers of America, 414 U.S. 368, 382, 94 S.Ct. 629, 38 L.Ed.2d 583 (1973), however, is not without exceptions. The Board’s slavish application of the principle to the no-strike clause before us disregards the plain language of the agreement. The principle is merely a rule of contract interpretation and the parties may by express language indicate their intent to interpret the no-strike and arbitration clauses differently. See id.; Gary Hobart Water Corp. v. NLRB, supra. See also Iowa Beef Processors, supra. The no-strike clause of the Service Agreement expressly extends beyond the scope of the arbitration clause. It not only applies as long as parties abide by the agreement, which of course includes the arbitration of disputes under the contract, but also applies as long as “the Company and the Union... submit to arbitration any differences which may arise which are not covered by the Agreement." (Emphasis added). The Board’s opinion does not mention this language at all. From this language in the no-strike clause we conclude that the Board erroneously applied the principle of coterminous application to the arbitration and no-strike clauses. These clauses are analytically distinct, and their meaning must be determined separately and according to the intent of the parties. See Gateway Coal, supra, 414 U.S. at 382, 94 S.Ct. 629; Iowa Beef Processors, supra, 597 F.2d at 1145.
Having concluded that the no-strike clause contains no implied exclusion of sympathy strikes, we now turn to the express terms of the clause to determine whether they clearly and unmistakably waive the right to engage in a sympathy strike at the employer’s premises. As a preliminary matter, we note that the Board cannot find support in any judicial or Board decisions for a rigid requirement that the no-strike clause contain the specific term “sympathy strike” before finding a waiver. A number of cases have interpreted general no-strike clauses to preclude sympathy strikes. Rockaway News, supra; Iowa Beef Processors, supra; Montana-Dakota Utilities Co. v. NLRB, 455 F.2d 1088 (8th Cir. 1972); Hearst Corp., Baltimore News American Division, 161 NLRB 1405 (1966), enf’d sub nom. News Union of Baltimore v. NLRB, 129 U.S.App.D.C. 272, 393 F.2d 673 (D.C. Cir. 1968). Conversely, we do not mean to imply that the general language of a broad no-strike clause, when examined in isolation, will suffice to waive the right to engage in sympathy strikes. See Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 76 S.Ct. 349, 100 L.Ed. 309 (1956). Rather, the controlling principle of interpretation of collective bargaining agreements requires that the contract be read as a whole and in light of the law relating to it when made. Id., 350 U.S. at 279, 76 S.Ct. 349.
As we have noted above, the 1975 Service Agreement contains two picket line clauses in addition to the broad no-strike clause. First, the picket line clause of Article VII, section 3 permits service and maintenance employees to honor picket lines “on or in front of any other company.” Most significantly, this section, by its express terms, is an exception to the no-strike clause; it says that this specific form of sympathetic activity “is not to be considered as violating any provision written or implied which prohibits the Union from striking.” It follows from the phrasing of this clause as an express exception that the no-strike clause relates to sympathy strikes as well.
The meaning of the no-strike clause is further clarified by reading it in conjunction with the other picket line clause in Article XVII, section 9. This clause contains a union promise not to interfere during a sympathy strike with Canteen’s efforts to service customers with non-union employees. The clause also states that “The Union agrees... that the accounts of the Company must be serviced.. ” In Montana-Dakota Utilities, supra, the court of appeals relied on a similar general statement in the applicable no-strike clause to determine that a limited picket line permission clause served merely as an exception to what was otherwise a prohibition of sympathy /strikes in the no-strike clause. See 455 F.2d at 1092-94.
The NLRB argues in reply that an affirmation of the statutory right to honor pickets at other premises does not impliedly waive other statutory rights, namely the right to honor pickets at the employer’s premises. Canteen, however, has not argued that the picket line permission clauses express such a waiver. The clauses are crucial here because they delineate the boundaries of the waiver expressed in the no-strike clause.
When the no-strike clause was drafted in 1966, the Board law had not developed the rigid presumption, see, e. g., Keller-Crescent Co., supra, that general no-strike clauses do not waive the right to engage in sympathy strikes. Apparently because knowledge of this recently developed presumption in the Board law cannot be imputed to the drafters of the collective bargaining agreement, the Board relies on a sentence in the arbitration clause that says “the parties are mindful of and have no wish to detract from any employee right guaranteed by law,” as contractually creating a presumption of non-waiver, which may limit the scope of the no-strike clause. This argument is persuasive only if the quoted phrase is examined out of its context. Examined in context, the quoted phrase modifies the stated preference that union officials screen employee grievances. Its effect is to preserve statutorily guaranteed direct employee access to grievance machinery without union involvement. For the Board to interpret this phrase as bearing on the no-strike clause ignores the common sense meaning of the phrase, “in this regard.”
Although we are satisfied that the language of the no-strike clause is sufficiently clear to preclude sympathy strikes at Canteen’s Rockford facility, we nevertheless turn to a discussion of the extrinsic evidence of intent in the record, most of which relates to bargaining history. Neither side disputes its relevance to the issue, and, in this case, the evidence shows that the parties specifically considered the issue of sympathy strikes and that the union has foregone this right.
The no-strike clause was proposed by the union in 1966 during negotiations leading to the first contract and has remained unchanged in the contract ever since. The union also proposed at that time a clause specifically reserving the right to honor picket lines at the employer’s premises, which was rejected. Furthermore, the Article XVII, section 9 picket line clause did not recognize the company’s need for continuous service. This clause was added at the request of the company. The rejection of the union’s proposed employer premises picket line clause left only the general no-strike clause and the picket line clauses referring to other premises in Article VII, section 3 and Article XVII, section 9.
The NLRB found that this evidence of bargaining history does not show a waiver and in its brief cites Timken Roller Bearing Co. v. NLRB, 325 F.2d 746 (6th Cir. 1963), cert. denied, 376 U.S. 971, 84 S.Ct. 1135, 12 L.Ed.2d 85; NLRB v. Otis Elevator Co., 208 F.2d 176 (2d Cir. 1953); NLRB v. J. H. Allison Co., 165 F.2d 766 (6th Cir. 1948); and Leland-Gifford Co., 95 NLRB 1306 (1951), enf’d in relevant part, 200 F.2d 620 (1st Cir. 1952) to support this conclusion. These cases, however, merely hold that a union’s failure to gain express recognition of a right will not evidence a waiver when the collective bargaining agreement is silent on the issue. As we have already noted, this contract contains express provisions on the subject of sympathy strikes, and the evidence of defeated proposals during negotiations is therefore reliable evidence that the language waives the right. See Rockaway News Co., supra (evidence offered to show employer rejected union picket line clause shows broad no-strike clause was a waiver); News Union of Baltimore, supra (proposal by union during negotiation specifically exempting picket from no-strike clause shed light on intended scope of no-strike clause; court enforces NLRB order interpreting the no-strike clause as a waiver).
We shall also consider only briefly the evidence of conduct offered by the parties, which was not specifically considered by the AU or the Board as reflecting on the meaning of the agreement. The record contains evidence of statements by the union leadership that for a worker to refuse work because of the picket line would be taking his job in his hands. Also there was testimony that the strikers were told not to answer their phones so that the employer could not order them to perform work. It is unlikely that a union leader would advise such conduct in the absence of a waiver:
The union tradition of honoring picket lines is admittedly strong, but, just as its waiver in formal contract language is not to be precipitately assumed, so it is unlikely that responsible, experienced and authoritative union leaders will lightly interpret their own handiwork as barring its observance.
News Union of Baltimore, supra, 393 F.2d at 678.
Although the Board’s interpretation of contract provisions is entitled to deference, see id., the interpretation of the Service Agreement urged here is unsupported by the language of the agreement and disregards much of the relevant extrinsic evidence. Accordingly, enforcement of the Board’s order regarding the eleven service and maintenance unit employees must be denied.
B. The Bakery Agreement
The Board’s opinion and its brief before this Court contain virtually no consideration of the Bakery Agreement separate from the Service Agreement. The parties to the agreements were the same, and Merle Heitz, the president of the union, which represented both units, testified that the broad no-strike clause of the Bakery Agreement was modeled on the Service Agreement. It is true that the Bakery Agreement contains no picket line clause, but these employees do not travel. It was thus unnecessary for the union to seek such an exception to the no-strike clause, and the Board found that this was the reason for its omission. We therefore cannot consider the absence of the exception as indicative of a different intent of the parties under the Bakery Agreement.
In its brief, the Board has described evidence, summarized supra, that the bakery unit employees engaged in a sympathy strike to honor service unit picketing during negotiation of the 1973 and 1975 Service Agreements. Any assertion by the Board, however, that the employer’s failure to discipline bakery employees during these periods constituted condonation of a sympathy strike is not supported by substantial evidence.
Significantly, the Board gave little consideration below to these work stoppages in interpreting the contracts. The president of Canteen, Charles Swanson, testified that when service unit employees struck, Canteen could not supply bakery goods to any account unless the contract with the customer required it, because of the absence of delivery personnel. From this evidence, it is difficult to conclude that the failure to discipline bakery workers constituted employer acceptance of a sympathy strike at its premises. In fact, the evidence shows that the employer asked one bakery worker to return to work before the end of the brief 1975 strike, and that during this strike, the other bakery workers reported to work after only a few days. Finally, from the evidence it appears that the union did not interpret the previous shut-downs as sympathy strikes. The union business agent testified that it was his understanding that in 1972 the company told bakery workers to stay home.
In conclusion, we emphasize that the Board has presented no evidence to support an interpretation of the no-strike clause of the Bakery Agreement different from that of the Service Agreement. The Board has given little separate treatment to the Bakery Agreement in its decision and in its brief in this court. In these circumstances, we conclude that the Bakery Agreement, like the Service Agreement, waives the right to engage in a sympathy strike. Accordingly, enforcement of the Board’s order relating to Florence Jahnke, the bakery employee, is also denied.
To conclude our discussion of the waiver issue, we must question the Board’s practical defense of its principles of contract interpretation. The Board says in its opinion:
The employees who were called upon during the early morning hours of May 10 to decide whether or not to cross the Teamsters picket at Rockford could benefit from none of these niceties of litigation and had at their disposal none of these aids [e. g., extrinsic evidence of bargaining history and conduct of the parties] to contract interpretation. Yet they had to stake their jobs on the correctness of their position.
The contracts in issue, however, said that “there will be no strike or lockout during the life of this Agreement...,” and we are inclined to think that, to the extent workers actually rely on the language of the contract in determining their actions, any layman unschooled in current Board law presumptions would conclude from this language alone that the contract precluded the strike at issue here.
III. The Interrogation of Lisa Erickson
In finding that the conversation between Charles Swanson and Lisa Erickson constituted a coercive interrogation in violation of section 8(a)(1) of the Act, the Board said only that “the context in which this questioning occurred was clearly coercive.” In its brief, the Board offers some post hoc elaborations on this finding, asserting that the employer “initiated the subject of her union activities,” and emphasizing that twelve of Erickson’s co-workers were eventually fired or penalized.
In A & R Transport, Inc. v. NLRB, 601 F.2d 311 (7th Cir. 1979), we held that an interrogation should be judged by the “totality of the circumstances, including the purpose of the interview, the entire statement made to the employee, and the scope of the questioning.” 601 F.2d at 313. Judged under this standard, the record before the Board does not contain substantial evidence of coercion. It is not disputed that Erickson approached Swanson to determine whether she would be made a new employee for participating in the strike, and thus, the record refutes the Board’s assertion that Swanson initiated the subject. Equally clear is that Erickson understood the purpose of the employer’s questions and that the questions did not go beyond the purpose of the interview. The fact alone that other strikers eventually were fired does not make this interview coercive.
For the reasons herein set forth the petition for review is granted and enforcement of the Board’s order is denied.
ENFORCEMENT DENIED.
. The no-strike clause in the Bakery Agreement was the same at the time of the 1972 service and maintenance unit strike as it was at the time of the events at issue here.
. Other employees in the 25 to 30 member unit either crossed the picket line or picked up their trucks at other locations.
. Canteen administers a check-off of union dues from its payroll in accordance with the contract. The contract does not contain a union security clause, however.
. Lisa Erickson, William Ambrosia, and John Eells of course had already been rehired, but use of the unemployment files as the source for the names of the strikers led to erroneous inclusion of these names.
. But see NLRB v. Keller-Crescent, supra (when legality of sympathy strike is an arbitrable issue and employer seeks arbitration, the union is under an implied duty not to strike pending arbitration of the dispute as to the legality of the strike).
. In its brief before this court the Board argues for the first time that the inclusion of the term “not” in the no-strike clause “seems inadvertent.” The Board’s reasoning is that the effect of the term “not” would be to “exclude from arbitration the only kind of ‘differences’ which an arbitrator is qualified to resolve under the terms of this agreement.” We disagree. The effect of this provision is to create an additional duty not to strike and to arbitrate over events not foreseen by the parties. The record in fact shows that at one time the employer expressly proposed removal of the term, “not,” presumably for the purpose of narrowing the scope of its duty to arbitrate. The union, however, rejected the employer’s contract package of which this proposal was a part. It would seem that the deletion of an inadvertent term would easily have gained the consent of both parties. Furthermore, the term “not” appears in the Bakery Agreement no-strike clause. The persistent reappearance of this term is completely inconsistent with its being inadvertent.
. In fact the ALJ’s opinion said that one of these NLRB decisions, Hearst Corp., supra, must have been overruled sub silentio by the Board’s more recent decisions in, for example, Kellogg Co., 189 NLRB 948 (1971), enf'd, 457 F.2d 519 (6th Cir. 1972) and Keller-Crescent Co., 217 NLRB 685, enforcement denied, 538 F.2d 1291 (7th Cir. 1976). In Hearst the Board held that although the language of a broad no-strike clause alone did not clearly and unambiguously waive the right to strike, evidence of bargaining history did show that the language was intended to create such a waiver. In its Decision and Order in this case, the Board expressly rejected that portion of the ALJ’s opinion and reaffirmed Hearst, saying, “In Hearst, as in the other [more recent] cases, the Board looked to collateral evidence of intent of the parties to interpret the meaning of ambiguous no-strike clause language.”
. The clause said that “the Company is engaged in public service requiring continuous operation, and it is agreed, in recognition of such obligation... that, during the term of this Agreement there shall be no collective cessation of work by members of the Union.” 455 F.2d at 1090.
. In Montana-Dakota Utilities, the picket line clause expressly prohibited discharge of sympathy strikers, but said nothing about discipline of employees for honoring a picket line. The court held that discipline for such activity was permitted by the no-strike clause.
. The section says:
It is the intention of the parties hereto to conduct their affairs in such a manner that grievances will not arise. The Union will do its best to see that baseless and dilatory claims of grievance will not be processed, and to that end it is the desire of the parties that any employee believing himself to have a grievance discuss the matter with the Steward and the Business Representative of the Union before embarking upon the procedure for adjusting grievances herein set forth. In expressing their desire in this regard, the parties are mindful of and have no wish to detract from any employee right guaranteed by law.
. The proposed clause said:
Neither shall it be a violation of this Agreement nor shall any employee be discriminated against for refusing to work for the Employer when there is a picket line on the Employer’s premises, recognized by both the Local Union and the Retail Clerks International Association..
. In 1969 the Article VII, section 3 picket line clause was changed slightly. In 1966 the clause referred to pickets “on or in front of the premises or at the premises of any other company.” The italicized phrase was removed in 1969. The employer representative testified that the phrase was removed because of employer concern about a picket line at the premises by the then newly-organized bakery unit. The union representative also testified that the possibility of such a picket line was discussed. The ALJ, however, disregarded the testimony that the deletion of the phrase was related to Canteen’s concern about picketing at its premises, reasoning that the testimony was self-serving and irrelevant because the Article VII, section 3 picket line clause was always clearly limited to other premises. We cannot agree that the language was as unambiguous as the ALJ seemed to think it was. It appears logically consistent to us in the light of the contract proposal rejections in 1966 that the employer, upon noting that the deleted phrase “at the premises” was susceptible of interpretation as meaning its own premises, would want to remove this possibility. That this was accomplished buttresses the evidence that the right to honor stranger picket lines at Canteen’s own premises was waived in 1966.
. There has been doubt expressed about whether the Rockaway News decision even relied on the bargaining history, see Local 18, Operating Engineers, 238 NLRB No. 58 (1978) (Member Penello, concurring in the result), or whether the Court simply held that the broad no-strike clause alone sufficed to show a waiver. The general interpretation of the decision
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
MARTIN, Circuit Judge.
The appellants, James P. Cox and Wav-erly Stader, obtained judgments in a Kentucky state court against William G. Hare, a private in the United States Army, for damages for personal injuries caused by the negligence of the soldier in operating an automobile.
The appellee, Government Employees Insurance Company, filed a declaratory judgment suit in the United States District Court for the Western District of Kentucky against appellants and the soldier, invoking the judgment of the court that the soldier was not an insured by virtue of the terms of a policy of automobile liability insurance issued by appellee to “Machine Gun Troop, 13th Cavalry,” in which Hare was an enlisted man; and that, therefore, appellee was not obligated to pay the judgments awarded against the soldier.
Appellants, by answer and counterclaim asserted that the appellant insurer is legally liable for the payment of their judgments recovered against Hare in the state court.
The District Court entered declaratory judgment that the appellee insurance company, under the terms of its policy, is not liable to> appellants or to the soldier, and dismissed the counterclaim.
At the time of the accident in which appellants were injured, the Machine Gun Troop of the 13th Cavalry was stationed at Fort Knox, Kentucky. Each enlisted man drew Army pay, was furnished clothing and sleeping quarters, and allotted a daily ration in money which, for convenience, was paid collectively to each troop. Meals for all men in the troop were provided from this ration fund.
A commissary, under supervision of the posi Commander, was maintained to sell to the soldiers, for cash, various and sundry articles not furnished by the Army. Profits from the commissary were, at the end of each month, divided equally among the troops in the regiment and paid as separate dividends to each troop, for the use and benefit of its membership. Each Troop Commander served as treasurer of both the commissary profit fund and the ration fund for his troop. The surplus in the troop fund was used for recreation and additional conveniences for the troopers.
From the surplus money in its troop fund, the Machine Gun Troop purchased a light half-ton truck, for the use and additional convenience of the troop and its members. Simultaneously, an insurance policy, covering liability and property damage caused by the operation of the truck, was procured from the appellee company; the premium for which, amounting to $38.-25, was paid from the troop fund.
The policy of insurance was issued to Machine Gun Troop, 13th Cavalry, as named insured, and provided that, within the stipulated limits of the policy, the insurer would pay on behalf of the insured all sums which the latter should become obligated to pay by reason of legal liability for damages for bodily injuries to persons, when such injuries were caused by accident and arose from the ownership, maintenance, or use of the automobile. The policy also contained a like coverage of liability for damage to property.
“Government Service” was stated in the policy as the business occupation of the named insured; and the purposes for which the automobile was to be used were termed “Commercial.” The term “commercial,” however, was defined as the transportation or delivery of goods or merchandise and other business uses in connection with the insured’s business occupation, “including occasional pleasure use for the named insured and family.” In defining the “Insured,” the policy provided that the unqualified word “Insured” should include not only the named insured but also any person while using the automobile and any person or organization legally responsible for its use, “provided that the declared and actual use of the automobile is ‘pleasure and business’ or ‘commercial,’ each as defined herein, and provided further that the actual use is with the permission of the named Insured.”
From the time of the purchase of the truck continuously to the date of the accident, Private Hare was the regular driver of the truck for the Machine Gun Troop. The Commanding Officer of the Troop had instructed him to clean, service and care for the truck and to use it on all authorized missions, but not at any other time. During drill hours, the truck was kept in the troop area, and at night in the Regimental Motor Park.
On December 3, 1938, the Captain of the Machine Gun Troop instructed Private Hare to take the truck to Pine Grove, Kentucky, for servicing. The order was obeyed and Hare returned to Troop Headquarters between the hours of 3:30 and 4 P. M. He retained the keys; and, around dusk, after eating his evening meal, took the truck without permission and, accompanied by a Corporal and another private of the same troop, drove first to one roadhouse and then to another in Elizabethtown, Kentucky. His voyage was for entirely personal purposes, wholly unrelated to any official business or general entertainment of the troop. Hare had not received permission from his Captain, Lieutenant, First Sergeant, Supply Sergeant, Mess Sergeant, or any other superior officer, to use the truck for the purposes to which he put it. He had never had permission to use the truck for his own personal benefit on any occasion.
While driving the truck back to the Army post on the highway from Elizabethtown, Private Hare was responsible for the accident which resulted in the judgments rendered against him in the Kentucky state court.
The Machine Gun Troop was not incorporated, nor was there any written contract or agreement among its members. It purchased the truck in strict' compliance with Army regulations; and paid, out of the troop fund, for the repairs and general upkeep of the truck, and for the gas used by it. Army regulations required that when an enlisted man should be transferred to another troop, the amount of surplus money iii the troop fund should be computed and his proportionate share transferred, with him, to the troop fund of his new troop.
The Machine Gun Troop of the 13th Cavalry was composed of 175 men. The truck which it purchased was used to transport the property and the members of the troop for troop purposes, and 'occasionally to transport troop members to and from entertainments and athletic events.
In rendering judgment for the appellee, the district court held that Private Hare was not a “named insured” in or under the policy issued to “Machine Gun Troop, 13th Cavalry”; that his right as a member of the troop to the joint use and enjoyment of the truck was subject to the binding rules and regulations of the troop; and that, at the time of the accident, he was not a party covered by the policy, inasmuch as he was not operating the truck with the knowledge, permission, or consent of the named insured. In our opinion, the judgment of the district court was correct.
It is true, as contended by appellants, that where there is room for more than one interpretation, that most favorable to the insured will be adopted. Cheek v. Commonwealth Life Ins. Co., 277 Ky. 677, 686, 126 S.W.2d 1084.
However, in Equitable Life Assurance Society v. Hall, 253 Ky. 450, page 455, 69 S.W.2d 977, page 979, where it was held that one who sues on a contract made for his benefit must accept the contract as made, the Kentucky Court said: “It is a well-settled rule that, in case of ambiguity or uncertainty, that rule more favorable to the insured will be adopted. But it is also true that a policy is interpreted according to its plain meaning giving effect to all provisions. Haselden v. Home Ins. Co. of N. Y., 247 Ky. 530, 57 S.W.2d 459. The rule of liberal construction does not authorize a perversion of language or the exercise of invented powers, for the purpose of creating an ambiguity where none exists, nor does it authorize the court to make a new contract for the parties, by adding to, or striking from, the conditions of the policy.” See to the same effect Sun Indemnity Co. v. Dulaney, 264 Ky. 112, 120, 89 S.W.2d 307; Fidelity & Casualty Co. v. Bynum, 221 Ky. 450, 298 S.W. 1080; Brotherhood of Railroad Trainmen v. Wilkins, 257 Ky. 331, 78 S.W.2d 6. Compare Williams v. Union Central Life Ins. Co., 291 U.S. 170, 180, 54 S.Ct. 348, 78 L.Ed. 711, 92 A.L.R. 693.
The insured, Machine Gun Troop, 13th Cavalry, was an unincorporated association. As such, it had no legal entity distinct from that of the persons comprising it. Each member of the associated group did possess legal entity. The legal entity of the group was comprised of the collective legal entities of its members. An action at law was probably not maintainable in the association name, but could be brought through the collective legal entities 'of the persons comprising the association. Moffat Tunnel League v. United States, 289 U.S. 113, 53 S.Ct. 543, 77 L.Ed. 1069; Nichols v. Bardwell Lodge No. 179 I. O. O. F., 105 Ky. 168, 48 S.W. 426.
A person who' enters into a contract with an unincorporated association is, of course, legally liable for the fulfillment of his undertakings under the contract.
Generally, individual members of unincorporated associations are liable for the contracts and undertakings of the association; but an individual member of a mutual benefit association, not organized for gain or profit, is not liable for the debts and obligations of the association, unless he authorizes or ratifies the transactions out of which the obligations or contracts arose. Brady v. Mutual Benefit Department of the Order of Railway Conductors of America, 215 Ky. 177, 178, 179, 284 S.W. 1045.
It is the settled law of Kentucky that voluntary associations may adopt reasonable rules for the government of their membership and may enforce compliance therewith. Louisville Board of Fire Underwriters v. Johnson, 133 Ky. 797, 810, 119 S.W. 153, 24 L.R.A.,N.S., 153; Booker & Kinnaird v. Louisville Board of Fire Underwriters, 188 Ky. 771, 780, 224 S.W. 451, 21 A.L.R. 531.
Each member of the insured Machine Gun Troop was limited to use and enjoy-, ment of the truck for the common purpose for which it was purchased, and was subject to restrictions imposed by Army regulations and the orders of officers within the scope of their military jurisdiction.
The members of the troop were not legally accountable for unlawful use of the truck by one of their number. A voluntary association is not liable for the tort of a member when perpetrated beyond the scope of its control over his acts. Compare Guy v. Donald, 203 U.S. 399, 27 S.Ct. 63, 51 L.Ed. 245.
The policy under interpretation provided distinctly that the actual use of the truck should be with the permission of the named insured. The judgments awarded against Private Hare were resultant from his use of the truck without permission of the named insured. It is manifest that Private Hare caused the personal injuries of appellants from his use of the truck .for his own personal purposes, in violation of troop regulations and contrary to the command of his superior officers. He is, therefore, not entitled to indemnity under the insurance policy issued to the Machine Gun Troop. The liability of the appellee insurer to appellants does not reach beyond its liability to Hare.
The judgment of the district court is affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.
HARRY T. EDWARDS, Circuit Judge:
The appellants, a group of electrical and mechanical engineers employed by an electric utility company, seek attorneys’ fees from the National Labor Relations Board (“NLRB” or “Board”) for legal expenses incurred in the course of their ultimately successful quest for a separate representation election. The appellants rely on section 204(a) of the Equal Access to Justice Act (“EAJA” or “the Act”), 28 U.S.C. § 2412 (Supp. V 1981), which provides, inter alia, that, in a suit brought by or against the United States, the court shall award attorneys’ fees to a private prevailing party who satisfies certain financial eligibility requirements, unless “the position of the United States was substantially justified or... special circumstances make an award unjust.” The District Court, 548 F.Supp. 256, found that the appellants met the eligibility requirements and had “prevailed” within the meaning of the Act. The court denied their application for attorneys’ fees, however, on the ground that the position taken by the Board was substantially justified. The appellants contest the latter ruling.
Resolution of this appeal necessitates an inquiry into the theory and practice of the EAJA. We begin by construing two crucial, ambiguous phrases used in the Act— “the position of the United States” and “substantially justified.” Next, we consider the standard of review by which a court of appeals should scrutinize a trial judge’s determination of a party’s entitlement to fees. We then bring our analysis to bear on the District Court’s judgment in the case before us. We conclude that the court’s findings and rulings were proper and accordingly affirm.
I. Background
In 1938, the Utah Power and Light Company (“the Company”) voluntarily recognized Local 57 of the International Brotherhood of Electrical Workers (“the Union”) as the exclusive bargaining representative of its employees. The Company and Union agreed that the bargaining unit would consist of all employees except management personnel and supervisory officials with the authority to hire and fire. Included in the unit, consequently, were non-supervisory engineers. The NLRB assented to the parties’ “stipulation” and certified the Union.
By 1978, there were 2,600 employees in the bargaining unit, approximately 100 of whom were highly educated electrical or mechanical engineers. During that year, 72 of the engineers filed a petition with the Board, seeking decertification of the Union as their bargaining representative. In support of their request, they argued that, as professional employees, section 9(b) of the National Labor Relations Act (as amended) guaranteed them a right to vote as a separate group regarding union representation. Regional Director Francis Spearandeo dismissed the engineers’ petition, on the ground that “[t]he Board’s established policy and general rule is that the unit appropriate in a decertification election must be coextensive with the unit previously certified or the unit recognized.” The Board denied the engineers’ petition for review of the dismissal.
In 1979, the engineers amended their petition to request clarification of the scope of the bargaining unit. The Regional Director dismissed this petition as well, on the ground that the engineers constituted neither a labor organization nor an employer and therefore lacked standing under the Board’s regulations to petition for unit clarification.
Having failed to secure relief from the NLRB, the engineers sought the aid of the judiciary. In September 1979, they brought suit in the District Court for the District of 'Columbia against both Spearandeo and the Board. They requested a declaration that they were indeed “professionals” within the meaning of section 2(12) of the National Labor Relations Act and an injunction compelling the Board to provide them a separate representation election. The Board admitted most of the factual allegations in the complaint, but responded that the engineers nevertheless had failed to state a claim on which relief could be granted and that the District Court lacked subject matter jurisdiction over the controversy. The parties then filed cross-motions for summary judgment.
In 1980, while the case was pending in the District Court, two of the engineers filed a second decertification petition with the Board. This time the Board acceded to the petitioners’ request. Utah Power & Light Co., 258 N.L.R.B. 1059 (1981). The Board reasoned that the situation was “unique” insofar as “the professional employees seeking decertification have never had an opportunity to vote in a self-determination election”; under these special circumstances, it decided, “the policies inherent in Section 9(b)(1)” warranted making an “exception” to the general rule (which it reaffirmed) that a decertification election will not “normally” be ordered “in a unit not coextensive with the existing unit.” Id. at 1061 (footnote omitted).
The long-sought-after election was held on October 29, 1981, and the engineers voted overwhelmingly against continued representation by the Union. Eight days later, the Board moved to dismiss as moot the engineers’ complaint. The engineers did not contest the motion, responding instead with an application for costs and attorneys’ fees under the EAJA. The Board filed a memorandum opposing the application.
On May 28, 1982, the District Court granted the Board’s motion to dismiss. Finding that the engineers qualified as “prevailing parties,” the court granted their motion for costs. The court ruled, however, that the engineers were not entitled to attorneys’ fees under either of the two arguably relevant provisions of the EAJA: first, since the engineers had not shown that the Board had acted in “bad faith,” they were not entitled to an award of fees under section 2412(b); second, since the Board had sustained its burden of showing that its position was “substantially justified,” appellants were precluded from receiving an award of fees under section 2412(d)(1)(A).
On appeal, no party contests the dismissal of the suit itself, the finding that the engineers constituted “prevailing parties,” or the allocation of costs. The engineers challenge the denial of attorneys’ fees.
II. The Equal Access to Justice Act
A. Introduction
The background against which the Equal Access to Justice Act must be viewed is the so-called “American Rule” pertaining to the allocation of costs of counsel. Under that longstanding doctrine, each litigant ordinarily must pay his own lawyer. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975). The rule has only two narrow exceptions: when a loser “has acted in bad faith, vexatiously, wantonly, or for oppressive reasons,” he may be obliged to reimburse the winner for his attorneys’ fees, F.D. Rich Co. v. United States, 417 U.S. 116,129,94 S.Ct. 2157,2165,40 L.Ed.2d 703 (1974) (dicta); accord Lipsig v. National Student Marketing Corp., 663 F.2d 178, 180 (D.C.Cir.1980) (per curiam); and, when an individual litigant, by successfully maintaining a suit, has conferred a benefit on a group of persons, the court may allow him to recover his attorneys’ fees from the beneficiaries, Mills v. Electric Auto-Lite Co., 396 U.S. 375, 392-97, 90 S.Ct. 616, 625-28, 24 L.Ed.2d 593 (1970). Traditionally, the United States was even less vulnerable to an award of attorneys’ fees than a private litigant; in the absence of an express statutory provision, even the aforementioned “bad faith” and “common benefit” rules could not be invoked against the federal government. Pealo v. Farmers Home Administration of the United States Department of Agriculture, 562 F.2d 744,748 (D.C. Cir.1977) (alternative holding); Rhode Island Committee on Energy v. General Services Administration, 561 F.2d 397, 405 (1st Cir.1977). The protection from liability for attorneys’ fees enjoyed by the United States under these circumstances derived from two sources: the general doctrine of sovereign immunity; and 28 U.S.C. § 2412, which, prior to its amendment by the EAJA, was “consistently construed as immunizing the United States against attorney’s fees awards absent clear or express statutory authority to the contrary.” NAACP v. Civiletti, 609 F.2d 514, 516 (D.C. Cir.1979), cert. denied, 447 U.S. 922, 100 S.Ct. 3012, 65 L.Ed.2d 1114 (1980).
Since at least the 1920s, the restrictive American doctrine pertaining to the allocation of attorneys’ fees has been subjected to persistent attack. In the 1960s and early 1970s, federal courts sensitive to these criticisms began to experiment with various alternative, more liberal, fee-shifting rules. The most important of these developments was the so-called “private attorney general” theory, under which prevailing parties were allowed to recover attorneys’ fees when their suits resulted in enforcement of “important societal rights.” In 1975, in the Alyeska case, the Supreme Court called a halt to this judicially managed doctrinal innovation. The Court concluded that, in view of the importance and complexity of the field and of the history of legislative involvement, “it is apparent that the circumstances under which attorneys’ fees are to be awarded and the range of discretion of the courts in making those awards are matters for Congress to determine.” 421 U.S. at 262, 95 S.Ct. at 1624 (footnote omitted). Consequently, it held that, in the absence of specific statutory authorization, federal courts sitting in non-diversity cases could award attorneys’ fees to prevailing parties only under the established common law exceptions to the American Rule. Id. at 247, 257-60, 271, 95 S.Ct. at 1616, 1621-23, 1628.
The Supreme Court’s message was not lost on the legislature. A year after the Alyeska decision, Congress passed the Civil Rights Attorney’s Fees Awards Act, which allows prevailing parties in suits brought under specified civil rights statutes to recover “a reasonable attorney’s fee as part of the costs.” The Equal Access to Justice Act, passed four years later, constitutes an even more comprehensive response to the Supreme Court’s invitation and self-abnegation. The Act applies to all civil actions brought by or against the United States and allows private prevailing parties to recover attorneys’ fees from the government in a wide variety of circumstances.
Two provisions of the statute are crucial in the present case. Section 2412(b) authorizes courts to award private prevailing parties “reasonable fees and expenses of attorneys,” except when such awards are “expressly prohibited by statute,” and declares that “[t]he United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award.” The most important effect of this provision is to codify and make applicable to the government the “bad faith” and “common benefit” exceptions to the American Rule.
Section 2412(d)(1)(A) is more sweeping. It provides that a court “shall” award an eligible private prevailing party attorneys’ fees and other litigation expenses unless some other statute specifically provides otherwise or “the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” Ordinary tort suits are excluded from the coverage of the provision, but the legislative history makes clear that constitutional tort actions come within its purview. Section 2412(d) is avowedly experimental. Unlike section 2412(b), it contains a “sunset” provision; unless reenacted before October 1, 1984, it will be automatically repealed.
Because of the large bodies of case law defining the contours of the two traditional exceptions to the American Rule, interpretation and application of section 2412(b) usually is relatively straightforward. Section 2412(d)(1)(A), unfortunately, is much more difficult to apply. It is not grounded in any body of common law doctrine. Because of its recent vintage, it has not yet acquired a discernible gloss of judicial interpretation. And, most importantly, several of its crucial terms are distressingly ambiguous. For reasons that will become apparent, two of those terms — “the position of the United States ” and “substantially justified” — loom large in the case before us. Before proceeding, therefore, we must bring those phrases into sharper focus. And, of course, we must strive to lend them shapes that will make them meaningful vehicles, not only for disposing of the case at hand, but for resolving other controversies that come within the broad coverage of the provision.
B. “The Position of the United States”
The statute permits the government, when it loses a case, to avoid liability for attorneys’ fees if it can show that its “position” was substantially justified. The government’s “position,” for these purposes, might mean one of two things. First, the term could refer to the governmental action that precipitated the lawsuit. Second, it could refer to the posture assumed by the government in litigation. These two interpretations have come to be known, respectively, as the “underlying action ” and the “litigation position ” theories.
The judiciary has yet to settle on one or another construction. As of the end of March of 1983, the issue had been addressed (explicitly or implicitly) in twenty-two decisions. In twelve of those cases, the court opted for the “underlying action” theory. In the other ten, the court opted for the “litigation position” theory. This circuit has not yet been confronted with the issue. The case law, in sum, affords us little aid in attempting to construe “the position of the United States.” We are obliged, therefore, to conduct our own inquiry.
1. Legislative Intent
The statute itself contains no clear indication of which of the readings is correct. Section 2412(d)(1)(A) does not explicate the term. And section 2412(d)(2), the definitional provision, makes no reference to “the position of the United States.”
Only two provisions of the Act offer any guidance, and they point in inconsistent directions. First, section 2412(d)(2)(C) indicates that the term “‘United States’ includes any agency and any official of the United States acting in his or her official capacity.” As the Third Circuit observed in a recent case, this encompassing definition provides some support for the “underlying action” theory, both because of its use of the word “acting” and because of the fact that most of the “officials” referred to by the provision would be incapable of taking a position in litigation. Natural Resources Defense Council v. U.S. Environmental Protection Agency, 703 F.2d 700, 707 (3d Cir.1983). However, the support that this definitional provision lends to the “underlying action” theory is at best modest. As Judge Hunter pointed out in his dissent in NRDC, the definitional section might plausibly be read as nothing more than an acknowledgment of the fact “that the government as an entity can only take a ‘position,’ whatever the meaning of that term, through its agencies and the individuals who administer its agencies.” Id. at 718 n. 2. Second, section 2412(d)(3) directs a court, when reviewing adversary adjudications before administrative agencies, to award to a private party who prevails on appeal the attorneys’ fees he incurred in the course of his litigation before the agency, unless the court finds “that during such adversary adjudication the position of the United States was substantially justified, or that special circumstances make an award unjust.” As the highlighted language indicates, the provision presumes that the government’s “position,” for the purpose of assessing its liability for attorneys’ fees resulting from administrative adjudication, is the stance it adopted in litigation before the agency. It remains possible, of course, that the phrase “position of the United States” was intended to have a different meaning when used in the context of litigation before the courts, but if Congress contemplated such a difference, it failed to indicate as much in the statute. In short, the unequivocal adoption of the “litigation position” theory in section 2412(d)(3) suggests that the identical phrase, when used without qualification in section 2412(d)(1)(A), should be interpreted as the posture adopted by the government before the court.
On balance, we think that the support lent the “litigation position” theory by section 2412(d)(3) is somewhat stronger than that lent the “underlying action” theory by the definitional provision in section 2412(d)(2)(C). We concede, however, that the scales do not tip decisively one way or the other. One would hope that the legislative history would make possible a clean resolution of this issue. Unfortunately, study of relevant statements made by proponents and opponents of the bill proves even more inconclusive.
Neither the committee reports nor the debates contain an explicit statement purporting to construe “the position of the United States.” The legislative history is, however, rife with arguments that take for granted one or the other option. Unfortunately, the number that seem founded on the “underlying action” theory is roughly the same as the number that seem founded on the “litigation position” theory. Those various references have been canvassed elsewhere; for present purposes, it will suffice to note the most important.
Strong support for the “litigation position” theory is provided by the language used in both committee reports to describe the standard of liability under section 2412(d)(1)(A): “Where the Government can show that its case had a reasonable basis both in law and fact, no award [of attorneys’ fees] will be made.” H.R.Rep. No. 1418, supra note 20, at 10; S.Rep. No. 253, supra note 20, at 6 (emphasis added) U.S. Code Cong. & Admin.News 1980, at 4989. Other statements, also appearing in both reports, suggest (at least when read in isolation) that Congress was exclusively concerned with irresponsible governmental decisions to: initiate or continue litigation:
A court should look closely at cases... where there has been a judgment on the pleadings or where there is a directed verdict or where a prior suit on the same claim had been dismissed. Such cases clearly raise the possibility that the Government was unreasonable in pursuing the litigation.
The standard, however, should not be read to raise a presumption that the Government position was not substantially justified, simply because it lost the case. Nor, in fact, does the standard require the Government to establish that its decision to litigate was based on a substantial probability of prevailing.
H.R.Rep. No. 1418, supra note 20, at 11; S.Rep. No. 253, supra note 20, at 6-7 (emphasis added) U.S.Code Cong. & Admin. News 1980, at 4989.
One can find equally evocative statements, however, supportive of the “underlying action” theory. For example, in defending the decision to place on the government the burden of demonstrating that its position was substantially justified, both committee reports argue that “it is far easier for the Government, which has control of the evidence, to prove the reasonableness of its action than it is for a private party to marshal the facts to prove that the Government was unreasonable.” H.R.Rep. No. 1418, supra note 20, at 11; S.Rep. No. 253, supra note 20, at 6 (emphasis added), U.S. Code Cong. & Admin.News 1980, at 4989. The conclusions to both reports declare: “Thus, by allowing an award of reasonable fees and expenses against the Government when its action is not substantially justified, S. 265 provides individuals an effective legal or administrative remedy where none now exists.” H.R.Rep. No. 1418, supra note 20, at 12; S.Rep. No. 253, supra note 20, at 7 (emphasis added), U.S.Code Cong. & Admin. News 1980, at 4991. And, in the floor debates, both supporters and critics of the bill frequently manifested their assumption that liability for fees would turn upon the strength of the government’s justification for its regulatory behavior, rather than the colorability of the legal arguments subsequently advanced in support of that conduct.
We have thus arrived at an impasse; we must acknowledge that Congress failed clearly to resolve the question before us. To answer it, consequently, we must enlarge our field of vision; we must try to discern the underlying purposes of the Act as a whole, and then determine which of the two possible definitions of “the position of the United States” would best serve those ends.
2. A Practicable Definition
The central objective of the EAJA, and of section 2412(d)(1)(A) in particular, was to encourage relatively impecunious private parties to challenge unreasonable or oppressive governmental behavior by relieving such parties of the fear of incurring large litigation expenses. Achievement of that end, it was believed, would promote three more general goals. First, Congress hoped to provide relief to the victims of abusive governmental conduct, to enable them to vindicate their rights without assuming enormous financial burdens. Second, it sought to reduce the incidence of such abuse; it anticipated that the prospect of paying sizeable awards of attorneys’ fees when they overstepped their authority and were challenged in court would induce administrators to behave more responsibly in the future. Third, by exposing, a greater number of governmental actions to adversarial testing, Congress hoped to refine the administration of federal law — to foster greater precision, efficiency and fairness in the interpretation of statutes and in the formulation and enforcement of governmental regulations.
Single-minded pursuit of the foregoing goals would have induced Congress to enact a law providing for the automatic award of attorneys’ fees to private parties who prevailed in suits against the government. Congress did not go that far, however, because of its sensitivity to two other considerations. First, it did not wish to inhibit legitimate efforts by the executive to enforce the law. Second, it feared the potentially huge cost to the government of an automatic fee-shifting provision. Accordingly, it selected an intermediate rule. In the words of the committee reports:
Under S. 265, fees will be awarded unless the Government can show that its action was substantially justified or that special circumstances make an award unjust. This standard balances the constitutional obligation of the executive branch to see that the laws are faithfully executed against the public interest in encouraging parties to vindicate their rights.
H.R.Rep. No. 1418, supra note 20, at 10; S.Rep. No. 253, supra note 20, at 6, U.S. Code Cong. & Admin.News 1980, at 4989.
Which of the two possible interpretations of “the position of the United States” would comport better with the foregoing complex of concerns? To answer that question, we first need to determine when and how it will matter which theory we adopt. Examination of the variety of kinds of controversies covered by the Act reveals that, in the large majority of contexts, it makes no functional difference how one conceives of the government’s “position.” In actions brought by the United States, the governmental action that precipitates the controversy almost invariably is its litigation position. Most suits brought against the United States entail a similar correspondence. In the usual case, the government acts in a particular fashion and then defends its conduct before an administrative agency and/or a court. Under such circumstances, the litigation position of the United States will almost always be that its underlying action was legally justifiable. Only in a minority of cases does it matter whether a court, reviewing a petition for fees brought under the EAJA, looks to the government’s original behavior or to its subsequent legal arguments. Assessment of the competing theories, therefore, must be made with reference to those unusual contexts. Relying on our experience, we believe it not unreasonable to assume that most such cases will take one of five forms:
Example One: Appeals from Agency Actions Under Deferential Standards of Review
The standards by which courts review most kinds of administrative action embody some principle of deference. An agency rulemaking decision, for instance, must be upheld if it contravenes no statutory or constitutional provision, was reached in compliance with pertinent procedural requirements, is supported by substantial evidence, and is not arbitrary, capricious, or an abuse of discretion. 5 U.S.C. § 706(2) (1976). A decision by an agency not to institute a rulemaking proceeding is accorded even more deference: if the agency adequately explains the facts and policy concerns it relied upon, and if those facts and concerns have some basis in the record, a court will not overturn its judgment. WWHT, Inc. v. FCC, 656 F.2d 807, 817 (D.C.Cir.1981). To take a more specific example especially germane to the instant case, a decision by the NLRB regarding the appropriate scope of a bargaining unit will not be reversed by a court unless it was “made in excess of [the Board’s] delegated powers and contrary to a specific prohibition in the [National Labor Relations] Act.” See Leedom v. Kyne, 358 U.S. 184, 188, 79 S.Ct. 180, 183, 3 L.Ed.2d 210 (1958); Boire v. Greyhound Corp., 376 U.S. 473, 480-82, 84 S.Ct. 894, 898-99, 11 L.Ed.2d 849 (1964).
When an appellate court, applying one of these deferential standards of review, overturns an agency’s decision, how should the agency’s liability for attorneys’ fees under the EAJA be assessed? Assume, for example, that the promulgation of a novel regulation is held to have been “arbitrary and capricious.” If the ensuing EAJA petition submitted by the prevailing private party were evaluated under the “underlying action” theory, the agency’s liability for fees would turn upon whether its adoption of the rule was “substantially justified.” It is very unlikely that the agency would prevail under such a test; a court that has just concluded that the agency’s action was “arbitrary and capricious” would be hard pressed to rule that its action was nevertheless “substantially justified.” The net effect would be that the EAJA would become, for all practical purposes, an automatic fee-shifting provision in these circumstances. That result seems plainly inconsistent with Congress’ general objective in enacting section 2412(d)(1)(A): to establish an “intermediate” standard for the allocation of attorneys’ fees, one falling somewhere between the English Rule and the current American Rule. More consistent with the purposes of the Act would be a rule whereby a court, when reviewing an EAJA petition arising out of a case of the sort described above, would ask: Was the agency’s litigation position (i.e., its argument on appeal that its promulgation of the regulation was not arbitrary and capricious) substantially justified?
Example Two: Standards of Liability Linked to the Justification for Conduct
The government’s liability, in several kinds of suits, turns upon its ability to offer a reasonable justification for its own or its officials’ behavior. The category that springs most readily to mind are suits brought against the United States under the Eighth Amendment alleging that conditions in federal prisons constitute “cruel and unusual punishment.” Though the standard of liability governing such actions remains somewhat in flux, a crucial element in almost all modern formulations of the test is the absence of a defensible rationale for the conditions at issue. Thus, the Supreme Court recently summarized the governing law as follows:
Today the Eighth Amendment prohibits punishments which, although not physically barbarous, “involve the unnecessary and wanton infliction of pain,” or are grossly disproportionate to the severity of the crime. Among “unnecessary and wanton” inflictions of pain are those that are “totally without penological justification.”
Rhodes v. Chapman, 452 U.S. 337, 346, 101 S.Ct. 2392, 2398, 69 L.Ed.2d 59 (1981) (citations and footnote omitted). Clearly, a prerequisite to a finding of a constitutional violation, under the foregoing standard, is a determination that the prison conditions in question are not “substantially justified.”
The close parallel between the standard of liability, in suits of this sort, and the criterion for the award of attorneys’ fees under the EAJA gives rise to a set of problems similar to those discussed in the preceding example. If, when evaluating an EAJA petition brought by a plaintiff (or class of plaintiffs) who prevailed in a case of the kind just described, the judge focused on the justification for the government’s “underlying action,” he or she would find it virtually impossible to deny the plaintiff(s) attorneys’ fees. The net result would be that the EAJA would again become something approaching an automatic fee-shifting provision for a significant category of cases. As indicated above, this seems not to have been contemplated by the congressmen who enacted the statute. Thus, in this context as well, it seems preferable for the court to attend to the strength of the arguments advanced by the government in support of its denial of liability, rather than to the justification for the behavior itself.
Example Three: Defenses Unrelated to the Merits of the Government’s Behavior
When civil actions are brought against the United States, it is sometimes able to resist on the basis of defenses unrelated to the merits of the underlying actions of its officials. For example, if, as a result of a change in the government’s own position or of unrelated events, the potential for impairment of a plaintiff’s interests has been reduced, the government may be able to argue that the case is moot. Or, if the plaintiff delayed bringing suit, the government may be able to rely on a statute of limitations or the doctrine of laches. Each of these defenses is founded on important policy considerations. For example, the mootness doctrine reduces the likelihood that courts will decide cases unaided by the kind of thorough adversarial scrutiny of the relevant issues that only a genuine controversy between the^ parties can create. Statutes of limitation and the laches doctrine promote repose and encourage aggrieved persons to bring suits while evidence is still fresh and reliable.
The choice between the “underlying action” and “litigation position” theories will significantly affect the government’s willingness to assert viable defenses of this sort. An example might be the situation of a government attorney who must decide whether to contest a moderately stale suit against the United States. Because of the passage of time, he may be able to collect only scant evidence to dispute the plaintiff’s allegations, but he may nevertheless have a colorable (but not “sure-fire”) laches defense. If the governing interpretation of “the position of the United States,” within the meaning of the EAJA, were the government’s “underlying action,” the attorney might well decide not to contest the suit (i.e., not to assert the laches argument). He would realize that, if he did not prevail, the government would automatically be liable, not only for the value of the claim, but also for the plaintiff’s attorneys’ fees (because government counsel would be unable, at this late date, to show that the original behavior by the alleged perpetrators of the plaintiff’s harm was substantially justified).
In sum, tying EAJA awards to the strength of the justification for the government’s original action would discourage counsel for the government from asserting defenses unrelated to its officials’ conduct that have a significant chance of prevailing. Such an outcome seems both unfortunate, from a policy standpoint, and inconsistent with Congress’ desire not to chill legitimate efforts by the executive to enforce the law. Thus, here again, it seems more sensible for courts, when reviewing EAJA petitions, to attend to the strength of the legal arguments advanced on behalf of the United States.
Example Four: Supervening Change in the Law
Frequently, during the time in which a suit brought against (or by) the United States is pending, the pertinent legal rules are altered in a manner adverse to the government. The effect of such a change often is that, while the government’s action was “substantially justified” when originally undertaken, persistence in defending that action in court is unjustifiable. In such a situation, if counsel for the United States stubbornly continues litigating the case, compelling the private party to incur attorneys’ fees before eventually prevailing, it seems clear that the objectives underlying the EAJA would be served by shifting those costs to the government. Application of the “underlying action” theory would not have that effect; application of the “litigation position” theory would.
Example Five: Surrender by the Government
Assume that a government contractor believes that the United States has failed to abide by the terms of an agreement (e.g., has misapplied a provision designed to adjust contract prices to accord with inflation). The contractor hires a lawyer who (without consulting the government contracting officer) conducts an investigation and then drafts and files a civil complaint. The government’s attorney, upon receiving the complaint, conducts his own inquiry and concludes that the claim is meritorious. (E.g., he finds that, though the government’s error was inadvertent, it nevertheless constituted a clear violation of the terms of the contract.) The government attorney informs the responsible official of his findings, who pays the plaintiff the money to which he is legally entitled. The plaintiff then brings a second action, under the EAJA, to recover his attorneys’ fees. If the petition is evaluated under the “underlying action” theory, the contractor will prevail. (Even though the government never took a litigation position hostile to the plaintiff, the plaintiff will qualify as a “prevailing party,” and the conduct that gave rise to the suit will fail the “substantial justification” test.) If it is assessed on the basis of the “litigation position” theory, the contractor will lose.
It is not immediately obvious which of the foregoing results is preferable. In favor of the first option, it could be argued that the prospect of being compelled to pay attorneys’ fees in such situations would make government administrators more careful and (perhaps more importantly) would reduce the incidence of less innocent “mistakes.” In favor of the second option, it could be argued that routine payment of attorneys’ fees under these circumstances would only foster collusion between lawyers and putative victims of governmental errors and would result in unnecessary expenditures of public funds. Most such disputes can be resolved quickly and easily through informal discussion between the aggrieved party and the responsible government official. Awarding attorneys’ fees to private parties who, instead of availing themselves of such avenues of relief, file civil complaints would simply result in unnecessary — and unnecessarily costly — formalization of the processes whereby the competing interests of state and citizen are clarified and accommodated. Though the issue is not clear-cut, we think that, on balance, the latter considerations are the more compelling, in view of the purposes of the Act as a whole. Accordingly, the “litigation position” theory seems preferable in this context as well.
To summarize, in each of the five contexts we can imagine in which the definition of “the position of the United States” would make a difference, it seems more sensible and consistent with the purposes of the EAJA to interpret the phrase as the stance taken by the United States in litigation than to interpret it as the governmental behavior that precipitated the suit.
One potential objection remains to be considered: it might be argued that our analysis has been flawed by our reliance on a false dichotomy. Why not award fees if either the government’s litigation position or its underlying action was not substantially justified? Review of the scenarios described above, however, reveals the emptiness of this argument. Of the five situations we examined, only one — the supervening change in the law — could be handled sensibly through application of the suggested alternative definition of “position of the United States.”
Finally, we note that exclusive use of the “litigation position” theory would have one important incidental advantage: it would permit and encourage courts to award to prevailing private parties the fees they incurred in combatting unreasonable arguments advanced by the government, while denying fees incurred in defeating substantial arguments. Such a practice, if it became widespread, would induce government counsel to evaluate carefully each of the various claims they might make in a particular controversy, and to assert only those that are substantially justified. The net result would be more sensitive and effectual promotion of the objectives of the EAJA.
For the foregoing reasons, we hold that “the position of the United States,” for the purposes of the Act, means the arguments relied upon by the government in litigation.
C. “Substantially Justified ”
The second of the two phrases whose meaning is crucial to the case at bar is “substantially justified.” Only by showing that “the position of the United States” (as we have now defined it) satisfied this standard can the government avoid liability for attorneys’ fees.
Fortunately, the legislative history of the Act casts considerable light on the meaning of this phrase. For example, the committee reports definitively resolve the potentially troublesome question of how burdens of proof are to be allocated: once the private party has shown that he “prevailed” in the litigation, the government bears the burden of demonstrating that its position was “substantially justified.” This principle thus far has been consistently recognized by the courts.
It is somewhat more difficult to determine what exactly Congress intended the government should be required to prove, but much insight can be gleaned from the following passages of legislative history:
The test of whether or not a Government action is substantially justified is essentially one of reasonableness. Where the Government can show that its case had a reasonable basis both in law and fact, no award will be made....
Certain types of case dispositions may indicate that the Government action was not substantially justified. A court should look closely at cases, for example, where there has been a judgment on the pleadings or where there is a directed verdict or where a prior suit on the same claim had been dismissed. Such cases clearly raise the possibility that the Government was unreasonable in pursuing the litigation.
The standard, however, should not be
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM;
What took 16 years for our answer in Nebel Towing to the enigmatic 4-1-4 riddle of the Jane Smith, is now back again in part 13 years later. Based presumably on Nebel Towing the District Court granted judgment against the excess P & I Underwriter for nearly $2,000,000 in excess of the owner’s judicially declared limited liability. Faithful as we are and must be to Nebel Towing, the Court, by divided vote holds that the trial court was correct in this judgment and we affirm as to this issue. As to all other issues the Court unanimously affirms the judgment of the District Court.
This appeal grows out of an allision between the tow in tow of the tug F.R. BIGE-LOW and Crown Zellerbach’s (CZ) water intake structure on the Mississippi River above Baton Rouge. Involved also was the tug’s (and owners’) maritime limitation of liability proceeding in which CZ brought a Louisiana direct action against the prime and excess P & I Underwriters of the vessel owner/operator. After trial, the District Court held that Ingram, the tug owner/operator, was liable, but was entitled to limit its liability to the value of the vessel and the pending freight. The excess P & I underwriter was held liable for nearly $2,000,000 of the portion of the CZ’s damages that exceeded the limited liability of the vessel owner. We find no error in the court’s holdings (i) of no “privity or knowledge” by the tug owner, (ii) the valuation of the vessel, (iii) the computation of CZ’s damages, and (iv) the award of pre-judgment interest from a date later than the accident. However, the Court by divided vote determines that the District Court was free of error in holding the tug owner’s underwriter liable beyond the dollar limits fixed, or ascertainable, in the P & I policy. Accordingly, we affirm.
a -i ah u ,7 How it All Happened
On February 3, 1979, the tugboat F.R. BIGELOW owned (or bareboat chartered) by Ingram Industries,' Inc. (Ingram), while pushing 15 loaded barges down the Mississippi River in heavy fog and rain, caused its forward lead barge to come into contact with and damage Crown Zellerbach’s (CZ) water intake structure, on the Mississippi above Baton Rouge. Shortly after this incident, CZ began to repair the structure, but these repairs were interrupted on May 18, 1979, when another tugboat collided with the structure and damaged the remaining portion. The structure was not rebuilt in kind, but was rebuilt in a different form.
Suit was filed by CZ against the tugboat F.R. BIGELOW, and Ingram, her bareboat charterer, in April of 1979. Subsequently, the complaint was amended to include Cherokee Insurance Company, the prime P & I insurer of Ingram, with a policy limit of $1,000,000, and London Steam-Ship Owners’ Mutual Insurance Association, excess P & I insurers of Ingram, with a deductible franchise of $1,000,000.
In its answer to the suit based upon the accident of February 3, 1979, Ingram, the J Dt chartered-owner/operator of the F.R. BIQELOW sought limitation of its liability to the value of the vessel plus freight then pending. 46 U.S.C. § 183. Ingram stipulated liability for striking the structure, and the issues of damages and limitation of liability were tried. Following trial, the District Court entered judgment in favor of CZ in the “total sum” of $3,948,210.31, with pre-judgment interest from December 11, 1980. The District Court granted Ingram’s prayer for limitation of liability, valued the vessel at $2,134,918.88 and limited the owner’s liability to that amount. Cherokee’s prime P & I policy was for $1,000,000. In tabular form, the District Court decreed the total sum of CZ’s judgment as follows:
(a) Total Damages to CZ $3,948,210.31
(b) Payable by Owner and Cherokee
Prime P & I $1,025,000.00
(c) Payable by Owner and London Steam
Excess P & I 1,109,918.88
(d) Owner’s Limited Liability 2,134,918.88
(e) Balance by London. Steam Excess P & I $1,813,291.44
Following the judgment, Ingram and its two P & I underwriters made payments up to the limits of Ingram’s fixed liability ($2,134,918.88).
On appeal, CZ raises several issues as errors in the District Court’s judgment, all of which we affirm. London Steam-Ship Owners’ Mutual Insurance Association challenges that portion of the District Court’s judgment holding that underwriter liable for the amount ($1,813,291.44) of the plaintiff’s claim over and above Ingram’s fixed limited liability ($2,134,918.88). Affirming the District Court by a divided vote on that issue obviously warrants publication of our opinion.
1.
Limitation of Liability
2.
Limitation: Valuation of the Vessel **
3.
Effect of Stipulation of Damages**
4.
Pre-Judgment Interest " *
5.
P & I Underwriter Liable in Excess Limited Liability Amount
For its protection against claims for damage to piers and other fixed (non-vessel) structures, Ingram, as chartered owner of the tug BIGELOW had two P & I covers. The prime cover was with Cherokee, the amount of insurance being specified as $1,000,000. London Steam-Ship Owners’ Mutual Insurance Association, Ltd. (London Steam-Ship), through A. Bilbrough and Company, as managers, dove-tailing Cherokee’s cover with a deductible franchise $1,000,000 supplied an excess P & I cover in accordance with the Rules of the Association.
Without specific articulation of the reasons for its decision, the trial court — obviously feeling bound by Nebel Towing — held the P & I underwriter liable for approximately $2,000,000 more than the owner’s limited liability.
Despite the dissent to the denial of rehearing en banc in Nebel Towing and criticism of that opinion we are bound by that decision and to justify a different result in this case the Court would have to demonstrate that this case and the rationale presented here is different from that in Nebel Towing.
Unable to find any valid distinction, and bound by Nebel Towing, we are both bound and persuaded that the District Court was correct in holding the P & I underwriter liable for this excess amount.
Conclusion
The upshot is that the Court affirms the holding of the District Court.
AFFIRMED.
. Olympic Towing Corp. v. Nebel Towing Co., Inc., 419 F.2d 230, 1969 A.M.C. 1571 (5th Cir. 1969) cert, denied, 397 U.S. 989, 90 S.Ct. 1120, 25 L.Ed.2d 396 (1970); see id., 419 F.2d at 238 (Brown, C.J., dissenting from denial of rehearing en banc).
. Maryland Casualty Co. v. Cushing, 347 U.S. 409, 74 S.Ct. 608, 98 L.Ed. 806, 1954 A.M.C. 837 (1954).
Only this issue has precedential value. Local Rule 47.5 provides
The publication of opinions that have no prec-edential value and merely decide particular cases on the bases of well-settled principles of law imposes needless expense on the public and burdens on the legal profession.
Pursuant to that Rule the Court has determined that the non-precedential portions of this opinion should not be published. The places at which the published opinion omits parts of the lengthy unpublished opinion are specifically indicated by an **.
Not to be published. See note * supra.
. See Biezup & Abeel, The Limitation Fund And Its Distribution, 53 Tul.L.Rev. 1185 (1979); Bu-glass, Limitation of Liability From A Marine Insurance Viewpoint, 53 Tul.L.Rev. 1364 (1979); Kierr, The Effect Of Direct Action Statutes On P & I Insurance, On Various Other Insurances Of Maritime Liabilities, And On Limitation On Shipowner’s Liability, 43 Tul.L.Rev. 638 (1969).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KRUPANSKY, Circuit Judge.
The Commonwealth of Kentucky has appealed the order of the United States District Court for the Western District of Kentucky, 607 F.Supp. 385 (1985), granting a writ of habeas corpus to the petitioner-ap-pellee Gregory Arnold Murphy (Murphy), who had been tried and convicted in a Kentucky state court for the murder of a woman in October of 1979. In granting the writ, the district court concluded that Murphy’s constitutional right to be free from ex post facto legislative enactments had been infringed by the Commonwealth.
A primary issue of consequence confronting this court on appeal concerns the scope of the ex post facto prohibition in Article I of the Constitution since the Commonwealth had conceded that the repeal of Kentucky Rule of Criminal Procedure 9.62 (RCr 9.62) was a legislative act that was retroactively effective at the time of Murphy’s trial.
A review of existing legal precedent has disclosed that the Supreme Court addressed the issue here presented in its factually indistinguishable seminal decision of Hopt v. Utah, 110 U.S. 574, 4 S.Ct. 202, 28 L.Ed. 262 (1884).
At the time that the homicide was committed and the indictment was returned in Hopt, the 1878 Criminal Procedure Act of Utah provided that convicted felons, unless pardoned by the governor, were foreclosed from testifying in any judicial action or proceeding because, as a matter of law, they lacked credibility. After the date of the alleged homicide but prior to the trial of the case, the state legislature promulgated an act which repealed the section of the Utah law that imposed the absolute bar against felons to give testimony in judicial proceedings.
At Hopt’s trial, the trial court permitted a felon named Emerson who was confined in the penitentiary as a result of a murder conviction to appear as a prosecution witness and, over the objection of the defendant, admitted Emerson’s testimony which implicated the defendant Hopt in the crime of homicide charged against him. The retroactive application of the controversial legislative act in issue was not contested by the state upon appeal.
In clear and concise language which has successfully withstood both the scrutiny and erosion of time, the Supreme Court stated:
Statutes which simply enlarge the class of persons who may be competent to testify in criminal cases are not ex post facto in their application to prosecutions for crimes committed prior to their passage; for they do not attach criminality to any act previously done, and which was innocent when done, nor aggravate any crime theretofore committed, nor provide a greater punishment therefor than was prescribed at the time of its commission, nor do they alter the degree, or lessen the amount or measure, of the proof which was made necessary to conviction when the crime was committed.
Id. at 589, 4 S.Ct. at 210.
In concluding its opinion, the Court emphasized its enunciated rule of law with the following reasoning:
[Alterations which do not increase the punishment, nor change the ingredients of the offense or the ultimate procedural facts necessary to establish guilt, but— leaving untouched the nature of the crime and the amount or degree of proof essential to conviction — only removes existing restrictions upon the competency of certain classes of persons as witnesses, relate to modes of procedure only, ... which the state, upon grounds of public policy, may regulate at pleasure. Such regulations of the mode in which the facts constituting guilt may be placed before the jury can be made applicable to prosecutions or trials thereafter had, without reference to the date of the commission of the offense charged.
Id. at 590, 4 S.Ct. at 210.
The operative procedural facts of the case at bar track the facts of Hopt with precision. The record disclosed that Murphy was indicted in a Kentucky state court on November 26, 1979 for the crime of homicide allegedly committed on October 18, 1979. At the time that the homicide was committed and at the time that the indictment was returned, RCr 9.62 was the prevailing law of that state. It provided:
A conviction cannot be had upon the testimony of an accomplice unless corroborated by other evidence tending to connect the defendant with the commission of the offense; and the corroboration is not sufficient if it merely shows that the offense was committed, and the circumstances thereof. In the absence of corroboration as required by law, the court shall instruct the jury to render a verdict of acquittal.
As in Hopt, subsequent to the date of the alleged homicide and indictment but prior to the trial of Murphy’s case, the Kentucky legislature promulgated an act which repealed RCr 9.62. At Murphy’s trial, his co-defendant Norman Crittenden (Critten-den), whom the defense characterized as an accomplice, testified that petitioner alone committed the murder and that, he, Critten-den, was merely an observer. Although Crittenden’s testimony afforded the only direct evidence that Murphy committed the homicide in issue, the record reflected substantial circumstantial evidence, albeit conflicting, that corroborated Crittenden’s testimony which implicated Murphy if credited by the jury. At the conclusion of the trial, Murphy requested the trial court to instruct the jury that he could not be convicted of the offense charged solely upon the uncorroborated testimony of Crittenden. The trial court denied the requested charge and the petitioner was convicted.
Historically, Kentucky followed the common law and permitted accomplice testimony without corroboration to support a conviction until the evolution and final enactment of RCr 9.62, at which time that enactment deemed otherwise competent testimony of an accomplice to be incredible as a matter of law unless corroborated in some degree. As in Hopt, the only change effected by the repeal of RCr 9.62 was that the credibility impediment which was legislatively imposed upon the testimony of a certain class of witnesses had been removed. As in Hopt, the impediment against the testimony of a felon and/or an uncorroborated accomplice was not the competency of such individual to testify, but rather the credibility to be assigned his testimony as a condition of his competency. In both instances, the repealed statute decreed the testimony of a felon and/or uncorroborated accomplice incredible as a matter of law. Thus, a legislative enactment which repealed a statutorily imposed impediment, which declared the testimony of felons or uncorroborated accomplices to be inadmissible in judicial proceedings because such testimony was, as a matter of law, incredible, simply enlarged the class of persons to be considered competent to testify and was procedural in effect.
Applying the teachings of the Supreme Court in Hopt, it would appear that the repeal of RCr 9.62 did not (1) attach criminality to any act previously committed; (2) aggravate any crime theretofore committed; (3) provide greater punishment than was prescribed at the time of the commission of the crime; or (4) alter the degree or lessen the amount or measure of the proof necessary to sustain a conviction when the crime was committed. Stated differently, the crime for which Murphy was indicted, the punishment prescribed therefor, and the quantity or degree of proof necessary to establish guilt all remained unaffected by the repeal of RCr 9.62. A corroboration requirement clearly did not occupy the status of an element of the crime nor did its elimination alter the reasonable doubt standard which traditionally protected criminal defendants. The same essential facts were required to be established by the evidence at Murphy’s trial as were required to be proven prior to the repeal of RCr 9.62 to convict him of the crime of murder. Accordingly, the dictates of the Supreme Court in Hopt suggest a conclusion that the legislative enactment that repealed RCr 9.62 did not constitute an ex post facto act as applied to Murphy.
Murphy has urged this court to distinguish the Supreme Court’s decision in Hopt from this ease by asserting that the pronouncements of Hopt vindicate his conclusion that the retrospective application of repealed Kentucky statute RCr 9.62 substantially disadvantaged his position in violation of his constitutional right to be free from ex post facto applications of law. The thrust of this argument is plumbed in the following passage from Hopt:
Any statutory alteration of the legal rules of evidence which would authorize conviction upon less proof, in amount or degree, than was required when the offense was committed, might, in respect of that offense, be obnoxious to the constitutional inhibition upon ex post facto laws.
110 U.S. at 590, 4 S.Ct. at 210. Murphy has reasoned that repealed RCr 9.62 permitted an accomplice to testify without corroborating evidence, ergo, a lesser “amount” or “degree” of proof was essential to support his conviction.
At first blush, the language in Hopt on its face and Murphy’s reasoning appear compelling. Upon a further reading of the Court’s opinion in Hopt, however, Murphy’s reliance on the above-quoted statement is misplaced. The Court, immediately after the sentence Murphy so heavily relies upon, juxtaposed that, “But alterations which do not increase the punishment, nor change the ingredients of the offense or ultimate facts necessary to establish guilt, but — leaving untouched the nature of the crime and the amount or degree of proof essential to conviction — only removes existing restrictions upon the competency of certain classes of persons as witnesses, relate to modes of procedure only....” Hopt, 110 U.S. at 590, 4 S.Ct. at 210 (emphasis supplied). Reading these two sentences together, it is apparent that Justice Harlan was contrasting those laws which retroactively change the elements of a crime or the burden of proving those elements with laws which merely alter the procedure of a trial. Read in context, Justice Harlan’s reference to the degree or amount of “proof” in the initial sentence obviously referred to the burden of proof by which the government must prove its case, not proof of evidentiary facts which could have been placed before a jury. This interpretation is further supported by the third sentence in this series: “[Procedural] regulations of the mode in which the facts constituting guilt may be placed before the jury can be made applicable ... without reference to the date of the commission of the offense charged.” Id. (emphasis supplied). Considering all three sentences together, Justice Harlan was drawing a sharp distinction between the burden of proof by which the prosecution was required to prove its case and the manner in which a state by evidentiary rules might permit a prosecutor to do so. Thus, a state could regulate, without ex post facto implications, the facts which “may be placed before the jury.” Such a construction of Hopt is mandated by the facts of that case; Utah by permitting convicted felons to testify was enlarging the facts which a jury could consider in making its determination of guilt, but this enlargement of evidence in no way affected the burden of proof placed upon the prosecutor, inasmuch as all the essential elements of the crime still were required to be established beyond a reasonable doubt. Thus, this court refuses to equate Justice Harlan’s reference to “proof” as synonymous with “evidence” and, accordingly, rejects Murphy’s argument.
This court’s interpretation of Hopt is also consistent with the time-honored precedent which instructs the trier of fact that the test to be applied in determining the guilt of an accused in a criminal action is not which side produces the greater number of witnesses or presents the greater quantity of evidence; but rather which witness, and which evidence, in the mind of the factfinder, is the most accurate, trustworthy, and generally most credible. Accordingly, the testimony of a single witness which is assigned a likelihood of truth is sufficient to support a finding of guilt, and would justify a verdict in accordance with such testimony, even though a number of witnesses may have testified to the contrary if, after consideration of all of the evidence in the case, the factfinder assigns greater belief to the accuracy and reliability of the one witness. See Brown v. Davis, 752 F.2d 1142, 1144-45 (6th Cir.1985); United States v. Arrington, 719 F.2d 701, 705 (4th Cir.1983), cert. denied, 465 U.S. 1028, 104 S.Ct. 1289, 79 L.Ed.2d 691 (1984); United States v. King, 703 F.2d 119, 125 (5th Cir.), cert. denied, 464 U.S. 837, 104 S.Ct. 127, 78 L.Ed.2d 123; 464 U.S. 845, 104 S.Ct. 148, 78 L.Ed.2d 138; 464 U.S. 857, 104 S.Ct. 179, 78 L.Ed.2d 160 (1983); United States v. Larios, 640 F.2d 938, 940 (9th Cir.1981); United States v. Butler, 636 F.2d 727, 729 (D.C.Cir.1980), cert. denied, 451 U.S. 1019, 101 S.Ct. 3010, 69 L.Ed.2d 392 (1981); United States v. Hoskins, 628 F.2d 295, 296 (5th Cir.), cert. denied, 449 U.S. 987, 101 S.Ct. 406, 66 L.Ed.2d 249 (1980); United States v. Danzey, 594 F.2d 905, 916 (2d Cir.), cert. denied, 441 U.S. 951, 99 S.Ct. 2179, 60 L.Ed.2d 1056 (1979); United States v. Smith, 563 F.2d 1361, 1363 (9th Cir.1977), cert. denied, 434 U.S. 1021, 98 S.Ct. 747, 54 L.Ed.2d 769 (1978); United States v. Paduano, 549 F.2d 145, 150 (9th Cir.), cert. denied, 434 U.S. 838, 98 S.Ct. 129, 54 L.Ed.2d 100 (1977); United States v. Dodge, 538 F.2d 770, 783 (8th Cir.1976); United States v. Jones, 486 F.2d 476, 479 (8th Cir.1973), cert. denied, 415 U.S. 917, 94 S.Ct. 1415, 39 L.Ed.2d 472 (1974); United States v. Levi, 405 F.2d 380, 383 (4th Cir.1968); 7 Wigmore on Evidence § 2034 (3d Ed.1940).
It would appear from existing precedent that the phrase “the amount ... of the proof” necessary to support a verdict of guilt within the context of Hopt, to be uniformly applicable in all criminal actions, assumes greater coherence when interpreted to mean the degree of proof that is required in each criminal action to convince the factfinder of the guilt of the accused beyond a reasonable doubt, always mindful of the admonition that the test for arriving at the verdict is not to be measured by the standard of which side produces the greater number of witnesses or presents the greater quantity of evidence; but which witness, and which evidence, in the mind of the finder of fact is assigned the greater degree of accuracy, reliability, trustworthiness, and credibility. Moreover, the standard to be applied for determining the degree, amount, or measure of proof necessary to convict an accused in a criminal action has been interpreted by the Supreme Court in constitutional terms in the following language:
The constitutional standard recognized in the Winship case was expressly phrased as one that protects an accused against a conviction except on “proof beyond a reasonable doubt_” In subsequent cases discussing the reasonable-doubt standard, we have never departed from this definition of the rule or from the Winship understanding of the central purposes it serves, [citations omitted] In short, ... no person shall be made to suffer the onus of a criminal conviction except upon sufficient proof— defined as evidence necessary to convince a trier of fact beyond a reasonable doubt of the existence of every element of the offense.
Jackson v. Virginia, 443 U.S. 307, 315-16, 99 S.Ct. 2781, 2787, 61 L.Ed.2d 560 (1979); see In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). A contrary interpretation of Justice Harlan’s language in Hopt would offend logic and reason.
Accordingly, this court concludes that the abrogation of RCr 9.62 did not disadvantage Murphy by depriving him of any substantial right. As in Hopt, the amount of proof necessary to convict him was not reduced by the repeal of the above section because both before and after the appeal, a factfinder could have convicted him if it believed beyond a reasonable doubt any sufficiently incriminating evidence presented to it. The repeal of RCr 9.62 simply enlarged the class of persons who were decreed to be competent to testify in criminal cases and was not ex post facto in its application to prosecutions for crimes committed prior to its rescission.
Apart from the conclusions hereinbefore expressed, two alternative reasons support this court’s result. As previously noted, Murphy’s Article I ex post facto infringement claim was placed in issue in this habe-as corpus proceeding by his charge that the trial court refused to instruct the jury that he could not be convicted of the offense charged solely upon the uncorroborated testimony of his alleged accomplice Critten-den. The trial court denied the requested charge and the petitioner was convicted. It is apparent from the colloquy between counsel and the trial judge that the reason for his refusal to give the requested jury instruction was his disposition that no accomplice relationship existed between Murphy and Crittenden. Thus, in light of the court’s ruling, the requested jury instruction would not have been given even if RCr 9.62 had not been repealed. Consequently, no Article I ex post facto implications could have attached to the court’s refusal to give the requested instruction even presuming resolution of the accomplice relationship was ultimately determined to be error.
Second, a reading of the jury instructions in their entirety disclosed that the instructions incorporated no direct or indirect language which could be construed to convey an impression that the sole testimony of an accomplice satisfied the reasonable doubt standard necessary to convict Murphy. The petitioner has not suggested nor has he argued that the court so instructed the jury. Although the trial court refused the requested accomplice instruction, it advised the jury, throughout its general charge, to consider all of the evidence developed during “the whole case” in arriving at its verdict.
This court is, therefore, presented with a classical federal habeas corpus appellate review of a state court conviction, wherein the petitioner has charged the state court with erroneously refusing a jury instruction assertedly mandated by state law. It is well-established that a jury instruction which violated only state law cannot provide a basis for federal habeas corpus relief unless the erroneous instruction rises to the level of a constitutional violation. See Gryger v. Burke, 384 U.S. 728, 731, 68 S.Ct. 1256, 1257-58, 92 L.Ed. 1683 (1948); Wood v. Marshall, 790 F.2d 548, 551 (6th Cir.1986); Watters v. Hubbard, 725 F.2d 381, 383 (6th Cir.), cert. denied, 469 U.S. 837, 105 S.Ct. 133, 83 L.Ed.2d 74 (1984); Combs v. Tennessee, 530 F.2d 695 (6th Cir.), cert. denied, 425 U.S. 954, 96 S.Ct. 1731, 48 L.Ed.2d 198 (1976). In evaluating the state trial court’s instructions to the jury in their entirety and mindful of the absence of any language therein that would directly or indirectly infer to the jury that the testimony of an accomplice standing alone satisfied the reasonable doubt standard, this court must determine if the failure of the state trial court to give the instruction requested by Murphy “infected the accused’s [Murphy’s] trial to such a degree as to constitute a clear violation of due process.” To prevail, “The petitioner must show more than that the instructions are undesirable, erroneous, or universally condemned.” Wood v. Marshall, 790 F.2d 548, 551 (6th Cir.1986). See Henderson v. Kibbe, 431 U.S. 145, 154, 97 S.Ct. 1730, 1736-37, 52 L.Ed.2d 203 (1977); Brofford v. Marshall, 751 F.2d 845, 856-57 (6th Cir.), cert. denied, — U.S. -, 106 S.Ct. 194, 88 L.Ed.2d 163 (1985); Whiteside v. Parke, 705 F.2d 869, 872 (6th Cir.), cert. denied, 464 U.S. 843, 104 S.Ct. 141, 78 L.Ed.2d 133 (1983); Thomas v. Arn, 704 F.2d 865, 868-69 (6th Cir.1983). Murphy has not satisfied that burden.
The state court instructed the jury that in arriving at its verdict, it was to consider the totality of the evidence before it, including the direct testimony of Crittenden as well as additional circumstantial testimonial and other evidence which was developed during the trial. It must be presumed that the jury followed the court’s instructions in arriving at its verdict of guilty beyond a reasonable doubt. What is equally important to remember is that it is not the function or prerogative of this court or any court to speculate as to the evidence which was accepted or rejected by the jury or the weight and/or credibility it assigned to the evidence during its deliberations. Suffice to say, the totality of the developed evidence both direct and circumstantial including the direct incriminating testimony of Crittenden as corroborated by additional incriminating circumstantial testimonial and other evidence was sufficient to support the guilty verdict rendered by the jury. This court concludes that the refusal of the state trial court to give the instruction requested by Murphy did not render his trial fundamentally unfair or infect his trial to a degree as to constitute a clear violation of due process.
Upon examining the petitioner’s remaining assignments of error joined on cross-appeal, this court is of the opinion that they are without merit for the reasons articulated by the district court.
Accordingly, the decision of the district court is hereby REVERSED and the petition is REMANDED to the district court with instructions to DENY Murphy’s petition for habeas corpus relief.
. The presence of incriminating testimonial and other evidence corroborating Crittenden’s testimony developed during trial was implicitly conceded by Murph/s legal counsel as demonstrated by his request for the following jury instruction in lieu of seeking an instruction for a verdict of acquittal as directed by RCr 9.62:
ACCOMPLICE TESTIMONY
An accomplice is one of two or more persons participating in the commission of a crime, either as a principal actor in its commission or one who is present and is assisting or is encouraging or holding himself in readiness to assist in its commission. If you believe from the evidence that the witness, Norman Crittenden, was an accomplice in the murder mentioned in the indictment, then you cannot convict the defendant, Gregory A. Murphy, on the basis of testimony of the said Norman Crittenden unless it is supported by other substantial evidence tending to connect the defendant, Gregory A. Murphy, with the commission of the offense in question, and any other evidence is not sufficient for that purpose if it merely shows that such offense was committed by someone and the circumstances under which it was committed. The court instructs you as a matter of law that Norman Crittenden is an accomplice in the offense charged by virtue of his testimony.
The last sentence of Kentucky RCr 9.62 explicitly provided:
In the absence of corroboration as required by law, the court shall instruct the jury to render a verdict of acquittal.
. The United States Supreme Court has recognized on numerous occasions that the ex post facto clause does not apply to laws effecting changes in procedure which do not affect substantial rights even though they in some way operate to an individual's disadvantage. See Weaver v. Graham, 450 U.S. 24, 29 n. 12, 101 S.Ct. 960, 964 n. 12, 67 L.Ed.2d 17 (1981); Dobbert v. Florida, 432 U.S. 282, 293, 97 S.Ct. 2290, 2298, 53 L.Ed.2d 344 (1977); Beazell v. Ohio, 269 U.S. 167, 170-71, 46 S.Ct. 68, 69, 70 L.Ed. 216 (1925); Mallett v. North Carolina, 181 U.S. 589, 593-97, 21 S.Ct. 730, 732-33, 45 L.Ed. 1015 (1901); Thompson v. Utah, 170 U.S. 343, 351-52, 18 S.Ct. 620, 623, 42 L.Ed. 1061 (1898); Gibson v. Mississippi, 162 U.S. 565, 590-91, 16 S.Ct. 904, 910, 40 L.Ed. 1075 (1896); Duncan v. Missouri, 152 U.S. 377, 382-83, 14 S.Ct. 570, 572, 38 L.Ed. 485 (1894); Hopt v. Utah, 110 U.S. 574, 588-90, 4 S.Ct. 202, 209-10, 28 L.Ed. 262 (1884). See generally L. Tribe, American Constitutional Law § 10-3 (1978); Annot., 53 L.Ed.2d 1146 (1978 & Supp.1985).
Analysis of Kentucky’s repeal of its accomplice corroboration provision necessarily involves an examination of the effect of that action on petitioner in light of the purposes of the constitutional protection embodied in the ex post facto clause. The Supreme Court has described the individualized nature of the inquiry to determine the character and degree of alterations of procedure necessary to infringe the constitutional prohibition against ex post facto legislative enactments in its decision in Beazell v. Ohio, 269 U.S. 167, 46 S.Ct. 68, 70 L.Ed. 216 (1925):
Just what alterations of procedure will be held to be of sufficient moment to transgress the constitutional prohibition cannot be embraced within a formula or stated in a general proposition'. The distinction is one of degree. But the constitutional provision was intended to secure substantial personal rights against arbitrary and oppressive legislation ... and not to limit the legislative control of remedies and modes of procedure which do not affect matters of substance....
269 U.S. at 171, 46 S.Ct. at 69 (citations omitted).
. Although this court finds the Third Circuit’s decision in Government of Virgin Islands v. Civil, 591 F.2d 255 (3d Cir.1979), to be distinguishable from the case at bar, see infra note 6, it is apparent that the Civil court, like Murphy before this court, erroneously interpreted Judge Harlan’s reference to "proof' as meaning "evidence." Id. at 259.
. Petitioner’s attempt to distinguish Hopt from the case at bar is not persuasive since Hopt is not inconsistent with more recent Supreme Court decisions on the subject of the ex post facto prohibition. The procedural exception to the applicability of the ex post facto clause has certainly been carried through modern Supreme Court case law, see, e.g., Weaver v. Graham, 450 U.S. 24, 29 n. 12, 101 S.Ct. 960, 964 n. 12, 67 L.Ed.2d 17 (1981); Dobbert v. Florida, 432 U.S. 282, 293, 97 S.Ct. 2290, 2298, 53 L.Ed.2d 344 (1977). Indeed, as the Supreme Court in Dobbert noted, the Latin phrase ex post facto has been given substance not by any precise delimitation, but instead by an accretion of case law. Dobbert, 432 U.S. at 292, 97 S.Ct. at 2298. While focus on whether a “vested right” of a defendant is implicated by an otherwise procedural change in law may be inappropriate for ex post facto purposes as applied to a criminal defendant, see Weaver, 450 U.S. at 29 n. 13, 101 S.Ct. at 964-65 n. 13, the proper test nevertheless seeks to determine if a “substantial right" has been affected by the procedural change, see Weaver, 450 U.S. at 29 n. 12, 101 S.Ct. at 964 n. 12; Dobbert, 432 U.S. at 293-94, 97 S.Ct. at 2298-99; Thompson v. Utah, 170 U.S. 343, 352-53, 18 S.Ct. 620, 623, 42 L.Ed. 1061 (1898); Kring v. Missouri, 107 U.S. (17 Otto) 221, 231-32, 2 S.Ct. 443, 452-53, 27 L.Ed. 506 (1883). In this regard, therefore, it is noteworthy that the Supreme Court in Hopt specifically distinguished its decision in Kring. In Kring, the Court found violative of the ex post facto clause a repeal of a provision by which a conviction on a lesser included offense of second degree murder, although vacated, operated as an acquittal of the greater crime of first degree murder. In Hopt, decided a year later, the Court explained that it was not presented with a similar deprivation of a "substantial right” as had been at issue in Kring. Hopt, 110 U.S. at 588-89, 4 S.Ct. at 209-10. In sum, the Hopt Court’s rationale and disposition are not at odds with later pronouncements.
. Although the Commonwealth has not directly addressed the circumstances immediately impacting upon the trial court’s reason for refusing the requested jury instruction, it appears from the record that the subject was a matter of considerable discussion between counsel for the parties and the court. Defense counsel initially questioned the existence of such a relationship and advised the court "... that there [was] an issue raised in this case as to whether or not there is not a principal and an accessory and who is the principal and who is the accessory.” Tr. 637. Moreover, it would appear that the trial judge reflected upon the existence of such a relationship over the evening recess as is demonstrated by his remarks to counsel when the trial resumed. In addressing his disposition, the court stated, “The Court has given that considerable thought over the evening and even off the record did discuss it with Counsel, Mr. Curtis [defendant’s legal counsel], and it’s simply a matter that the Court is of the belief that the evidence which has been submitted to the Jury is evidence sufficient to take the matter out of an accomplice situation." Tr. 637-38.
. This omission distinguishes the case at bar from Government of Virgin Islands v. Civil, 591 F.2d 255 (3d Cir.1979). In Civil, the jury was explicitly charged that the testimony of an accomplice by itself was sufficient to convict. Id. at 257.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
CASTLE, Circuit Judge.
This appeal is from a judgment of the United States Court for the Northern District of Indiana, Hammond Division, entered on a finding that the defendants, Gasoline Retailers Association, Inc., General Drivers, Warehousemen and Helpers Union No. 142, an affiliate of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, and Michael Sawochka, were guilty on a one count indictment charging the said defendants and others with conspiring to violate Section 1, Title 15 U.S. C.A. commonly known as the Sherman Act. The defendants waived a jury, and the judgment was entered upon findings made pursuant to rule 23(e) of the Federal Rules of Criminal Procedure, 18 U.S. C.A., after a bench trial by the Court. The indictment charged defendants and others with conspiring to stabilize the retail price of gasoline in the Calumet Region.
The defendant Gasoline Retailers Association, Inc., which was an unincorporated association of filling station operators was fined $5000; the defendant Local No. 142 was fined $5000; and the defendant Michael Sawochka was fined $3000 and sentenced to a term of imprisonment for six months, which term was suspended.
The one count indictment charged that beginning in 1954 and continuing to the date of the indictment the defendants and the co-conspirators and other persons to the grand jury unknown had “engaged in a combination and conspiracy to stabilize the retail gasoline prices throughout the Calumet Region”, an area described as including Lake County, Indiana and Calumet City, Illinois, in unreasonable restraint of interstate commerce. It was charged that there was a “continuing agreement among the defendants and co-conspirators” that the “major brand” and “independent brand” station operators would refrain from either advertising or giving premiums, including trading stamps, in connection with the retail sales of gasoline; and that major brand station operators would refrain from advertising the retail price of gasoline by any means other than the price computing mechanism that constitutes a part of the gasoline dispensing devices. It was further charged that the defendants and co-conspirators enforced their agreement by picketing and threatening to picket, and by cutting off and threatening to cut off the supplies of gasoline of station operators who advertised retail prices except as permitted or who advertised or issued premiums in connection with retail sales. It was alleged that the effects of the combination and conspiracy were (a) to stabilize retail gasoline prices; (b) to suppress price competition among gasoline retailers; (c) to burden and impede interstate commerce in gasoline; and (d) to restrain the freedom of gasoline retailers in the conduct of their business.
The Union and the station operators in the area, in an effort to eliminate price wars, have included in their labor contracts clauses which prohibit major brand station operators from displaying the retail price of gasoline on the station premises by any manner other than the price computing device on the gasoline pump, and banning the use of premiums or trading stamps by any station operator in connection with retail sales.
At least 95'% of all the labor contracts of Local 142 in existence at the return of the indictment had been personally negotiated by the defendant Sawochka, the Union’s chief negotiator and executive officer. Approximately 146 separate operators out of an association membership of 206 dealers had signed the service station contracts. There were 167 association members who were regular members of the Union. The operators who were not selling gasoline of the major oil companies such as Standard, Shell, etc. were not required to adhere to the price advertising ban since they needed to advertise their generally lower prices in order to compete with the major brand stations. The differential between the major oil companies and the so-called independents was approximately three cents per gallon and there was evidence that the Union and the Association had agreed that if this differential were maintained they would be permitted to display price signs. However, they were not allowed to give premiums with the sale of gasoline. On several occasions during the period covered in the indictment several stations began to advertise their prices by means of large price display signs and to initiate trading stamp programs. When this happened, regardless of whether the station was a party to the agreement, members of the Association and Union would visit the person who was using price signs or trading stamps and indicate unless the signs came down and the stamp and premium programs ended the station would be picketed and the delivery of gasoline halted. The evidence shows that at least one station was picketed by the Union and a tank wagon of gasoline was diverted from the intended destination when the driver refused to cross a Teamster picket line.
The contested issues are:
(1) Did the district court err in finding that an agreement among competitors to stabilize the local retail gasoline market, in an effort to prevent gasoline price wars, by the elimination of price advertising at the station sites and by the prohibition of the use of premiums and trading stamps constituted a price-fixing device in per se violation of the Sherman Act?
(2) Does a restraint in the form of a conspiracy to stabilize local gasoline retail prices, enforced by cutting off deliveries of gasoline and threats thereof, affect interstate commerce to an extent prohibited by the Sherman Act, or involve a conspiracy “in interstate commerce” in view of the continuous flow of gasoline from out of state into the local area through tanks of the retail dealer to the ultimate consumer?
(3) Is an indictment charging a conspiracy in restraint of trade fatally defective because it fails to specify the names of such co-conspirators whose identities were known to the grand jury ?
(4) Does a union official who responds to a grand jury subpoena duces tecum, although he is neither personally named or served, for the sole purpose of producing and identifying official union documents acquire personal immunity from prosecution under an indictment returned against him?
(5) Was there evidence to sustain the conviction against the Union?
Appellants do not deny that they agreed and acted in concert to eliminate price advertising at the stations and to prevent the stations from giving premiums, largely of the trading stamp variety. Nor do they dispute that these efforts, with some minor exceptions, have proved successful largely through the threats of picketing or of cutting off non-cooperating dealers from their source of supply, and occasionally making good on these threats. Instead, their argument is that suppression of the price advertising and the giving of premiums does not in itself constitute price-fixing and, therefore, to the limited extent, if any, it may have affected the ultimate price at which gasoline was sold in the area, the practices cannot properly be classified per se offenses, but instead come under the rule of reason. Considered as such, both of the prohibitions are alleged to have been justifiable efforts to eliminate allegedly harmful activities.
It is established “that the offense of conspiring under the Sherman Act [Section 1] is complete when the agreement or conspiracy is formed.” United States v. New York Great Atlantic & Pacific Tea Co., 5 Cir., 1943, 137 F.2d 459, 463. The Supreme Court expressly stated on this point in United States v. Socony-Vacuum Oil Co., 1940, 310 U.S. 150, 224, n. 59, 60 S.Ct. 811, 845, 84 L.Ed. 1129 that Section 1 condemns concerted action to fix prices even though such activity “be wholly nascent or abortive.”
The basic objective of defendants’ conspiracy was the stabilization of retail gasoline prices. Witness Patton testified the Union representative Frank Potesak told him that the anti-price sign provision “was put in there to keep price wars out of Lake County”. The defendants similarly considered premium offers, and particularly trading stamps, as playing a similar role in initiating or continuing the price wars, and as such to be eliminated. The continuing agreement among the defendants and the co-conspirators that the “major brand” and “independent brand” station operators would refrain from either advertising or giving premiums, including trading stamps in connection with the retail sales of gasoline, and that “major brand” stations would refrain from advertising retail prices excepting at the sites of the stations by the regular price computing gasoline pumps is a per se violation of the Sherman Act. A similar situation was presented in the leading case of United States v. Socony-Vacuum Oil Company, 310 U.S. 150, 60 S.Ct. 811, which seems to settle this question. In that case there was an agreement among the large producers to purchase surplus, “distress gasoline” from smaller refiners which was flooding the so-called “spot market” and leading to price wars. The court rejected the argument that the “price fixing” it had found to be a per se offense in United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700, was limited to an agreement that a specified price would be charged by each conspirator. The court held (310 U.S. at page 222, 60 S.Ct. at page 843):
"Nor is it important that the prices paid by the combination were not fixed in the sense that they were uniform and inflexible. Price-fixing as used in the Trenton Potteries case has no such limited meaning. An agreement to pay or charge rigid, uniform prices would be an illegal agreement under the Sherman Act. But so would agreements to raise or lower prices whatever machinery for price-fixing was used.”
In the Socony-Vacuum case the activities were not concerned with direct price fixing but were aimed rather at affecting ■ the market price and the court was there condemning as price fixing any concerted scheme designed to affect prices. We are of the opinion that the agreement and the activities in the present case are a per se violation of the Sherman Act.
There was a regular movement of substantial quantities of gasoline from producing areas outside the State of Illinois and Indiana to refineries and bulk plants in those States and thence to the individual station operators within the Calumet Region, which includes areas in both Indiana and Illinois. Therefore it is our opinion that the conspiracy to stabilize local gasoline retail prices affected Interstate Commerce and is a violation of the Sherman Act.
It is contended by appellants that the indictment was insufficient and should have been dismissed because it failed to list the names of some of the co-conspirators whose names were known to the government and the grand jury.
Rule 7(c) of the Federal Rules of Criminal Procedure provides that the indictment shall be “a plain, concise and definite written statement of the essential facts constituting the offense charged” and “need not contain * * * any other matter not necessary to such statement/' The indictment in this case did set forth “essential facts” constituting the offense •of conspiracy in restraint of trade, and there was no need to set out the particular names or identity of possible witnesses who at the trial might prove to have been co-conspirators. United .States v. Glasser, 7 Cir., 1941, 116 F.2d 690. We are of the opinion that it was not necessary for the indictment to specify the names of co-conspirators even though they were known to the grand jury.
Michael Sawochka appeared voluntarily before the grand jury to deliver Union documents and was informed that the questioning would be strictly limited to identification of the documents and to determination of compliance with the terms of the subpoena directed to Local 142, to which no immunity could be acquired. Even where the appearance is in response to a subpoena personally naming him a corporate or union official who appears only for such purposes as identification of corporate or union records or documents acquires no immunity under 15 U.S.C.A. §§ 32, 33. Cf. Heike v. United States, 1913, 227 U.S. 131, 33 S.Ct. 226, 57 L.Ed. 450. Certainly no immunity attached under the circumstances here presented.
We find no merit in the contention of Local 142 that the evidence does not sustain its conviction. Unlike the situation in Truck Drivers Local No. 421, etc. v. United States, 8 Cir., 128 F.2d 227, relied upon by this appellant, the conspiracy was here formalized in two clauses of the official labor contract entered into by and on behalf of the Union and negotiated by the Union representative authorized to negotiate all of its contracts with all industries. And it was enforced by the Union’s picketing. The activities here were neither unauthorized by nor unknown to the Union. That the Union included members other than those engaged in the service station industry does not under the circumstances here presented insulate it from liability. It was pointed out in United Brotherhood of Carpenters v. United States, 330 U.S. 395, 410, 67 S.Ct. 775, 783, 91 L.Ed. 973 that:
“The grant of authority to an officer of a union to negotiate agreements with employers regarding hours, wages, and working conditions may well be sufficient to make the union liable. An illustrative but not restrictive example might be where there was knowing participation by the union in the operation of the illegal agreement after its execution.”
We have considered all other arguments advanced by counsel in briefs or oral arguments in arriving at our conclusion that the District Court’s judgment must be affirmed.
Affirmed.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
POPE, Circuit Judge.
Southern Pacific Company has appealed from a judgment recovered against it by Garry T. Guthrie in an action brought under the Federal Employers’ Liability Act, 45 U.S.C.A. § 51 et seq. The contentions most strenuously urged by appellant are (1) that there was no evidence of negligence on its part, and (2) that the damages recovered are excessive. The company also specifies as error the refusal of the court to give numerous requested instructions, and the admission of evidence to which we shall call attention hereafter.
Guthrie was a locomotive engineer employed by the Southern Pacific Company, tie had completed a run from Yuma to Gila Bend, Arizona, on the morning of October 27, 1947. Later the same day he received orders to “deadhead” to Yuma, to the west. This meant he could travel by freight, or passenger train, or both. Pursuant to these orders he took a freight train to Sentinel, Arizona, which was part way, and at that point decided to change to a passenger train, which was due to arrive shortly, in order to shorten the time required for his trip. Accordingly he waited at Sentinel for the arrival of passenger train No. 5, westbound for Los Angeles. The train reached the Sentinel yards about 9:30 P.M. and was obliged to pass through the yards on the north side passing track or siding on account of a broken rail on the main line track. This necessitated the train coming back on the main line at a switch on the west end of the siding.
The switch stand, by which this switch was operated, was north of the main line. On the other side was the station platform, where Guthrie had been waiting. When the train moved slowly through the passing track, he set his grip down on the platform and crossed over the track to the switch stand in order to throw or line the switch so that the train could come out on the main line. It was customary for engineers and other trainmen, when traveling as he was, to furnish such assistance to the train crew, and there is no question but that Guthrie was then in the course of his employment and then engaged in interstate commerce.
As he moved over to the switch stand Guthrie was standing in the full beam of the locomotive’s headlight. The train was moving very slowly. The fireman had climbed down on the right hand, or engineer’s side of the engine, intending to throw the switch himself, and had gone ahead for that purpose, but when he saw Guthrie, dressed as an engineer, unlock and line the switch, and give the customary signal to proceed, he waited for the engine to come along and then climbed back on the engine.
After Guthrie had thus signaled to come ahead, he started to cross the track to the south, back toward where he had left his grip. When he took the first step, with his right foot, between the rails, his foot or shoe caught in the space between the tie bar and head block or switch tie, and he could not pull it out. He shouted, but could not be heard above the engine noise and he could not be seen from either window of the locomotive cab because of the width of the engine. As the locomotive continued toward him he threw himself backward over the rail, so that he saved his left leg and body, but his right leg was run over and cut off at a point between the knee and the hip.
The appellant urges that there is no evidence of negligence on the part of the company. Under the court’s charge there were submitted to the jury two claims of negligence, one that there was negligence ‘¿in connection with the maintenance of the area in and about and connected with the switch”, and one that there was negligence “on the part of the fellow employees in the operation of the railroad engine”. Appellant says that there was negligence in neither respect, and further, that if either of these claims must fall for want of evidence, the judgment must be reversed for the reasons stated in Wilmington Star Mining Co. v. Fulton, 205 U.S. 60, 27 S.Ct. 412, 51 L.Ed. 708, because, under the general verdict, it cannot be known upon what ground the jury went.
Guthrie gave several reasons why he crossed the track after lining the switch. He had left his grip on the side opposite the switch stand and he had to go to that side to board the train which opened up for passengers on that side. Two company rules were mentioned. One provided: “While the train is moving over a switch any employee in the vicinity of such switch must take position on the opposite side of the track from switch when practicable, and when not practicable to do so must take position 20 feet from switch stand”. The other rule was cited by Guthrie as his reason for crossing at that particular place. He said he did so in order- to- inspect the points of the switch. The switch points are the moveable portions of the rails, tapered at the ends, which are moved back and forth as the switch is operated. This rule provided that: “When a switch is thrown, the employee setting it must see that both points have moved to the proper position”.
When Guthrie stepped between the rails his right foot was caught between the tie which, is referred to as the switch tie, or head block, and the No. 1 tie rod. The switch tie is the tie which is extended beyond the other ties to furnish support for the switch stand. The tie rod connects the two switch points, so that when the switch is thrown, both rails move together. Fastened to the inside of the switch points on either side are metal transit clips, in which five bolt holes are set on an angle, and as the connecting tie rod is fastened by bolts in these holes, the correct distance between the two switch points can be maintained by moving the bolts from hole to hole. At the time of the accident the tie rod was bolted to the middle hole of the north clip and the second hole from the east on the south clip. Partly in consequence of this, the space between the switch tie and the tie rod tapered from a two inch space on the north to a four inch space on the south. Guthrie stepped into this space between switch tie and tie rod. He said that as he did so his foot went into a hole. The track was ballasted with slag, but Guthrie testified that át the point where he stepped, the ballast, instead of being in place up to within four inches of the top of the ties, was down to a depth of 7, 8 or 9 inches, sloping down toward the north, so that as he stepped his foot slipped back under the narrower portion of the space bétween switch tie and tie rod, and his foot became wedged in this space. He was thrown, and fell on his left side. He got up, but could not pull his foot out. He thought his leg was broken. Another witness who later picked up the severed leg thought it was broken at the ankle.
Other witnesses who examined the location a few days after the accident and while conditions at the switch remained the same, testified as to the depth of the ballast beneath the tie rod where Guthrie caught his foot. One of them said that he measured a distance of nine inches from the bottom of the tie rod to the top of the ballast at the north side of the track and that the measurement was seven inches below the tie rod at the other side of the track. Another witness testified that about the same time he examined the location and found that the top of the ballast between the two ties and inside of the two rails was nine inches below the top of the ties. According to his testimony the ballast at this point was actually slightly lower than the bottom of the ties. He described it as “saucer shaped” and.said that the appearance was as if some of the ballast had been taken out.
Not only did the company produce evidence of measurements made tending to controvert Guthrie’s claim that he stepped into a hole, but it attacks the claim of the existence of a hole at this point as not entitled to any credit whatever for two reasons. It says that if the ballast were actually below the bottom of the two ties, the movement and weight of the trains operating there would have moved the two ties together for want of ballast between them. It is asserted that the photographs of the locality taken shortly after the incident showed that the ballast was in a normal position and that there was no -hole in which Guthrie could have stepped. With respect to the claim that the ties would have shifted, plaintiff’s counsel argue that there is no claim that there was no ballast between the ties and that there is nothing to show that the ballast between the ends of the ties outside of the rails would not have been sufficient to hold the ties in place. An examination of the original photographs which are part of the record in this court does not furnish any satisfactory answer to the controversy. Obviously, the taking of a photograph of space between ties in such manner as to show depth, is an exceedingly difficult undertaking in the absence of some stereoscopic device. Exhibits 7, L and J, which are photographs, seem to indicate some extra depth in ballast - at this point, while in exhibits I, K, H, and F, also photographs, taken at. the same time, the depth seems less.
The evidence does show that in ordinary railroading practice it is standard procedure to have the ballast beneath this moving portion of a switch slightly lower than the ballast elsewhere along the track. Some allowance must be made for the movement of the tie rods. It was testified on behalf of the defendant that the top of the ballast was 4% inches lower than the top of the ties.
Viewing the evidence in the light most favorable to Guthrie, we believe that the jury would be warranted in believing that there was sufficient credible evidence to support a claim that when Guthrie stepped between the rails his foot was placed at a point where it was able to slide backward toward the north side of the track into a hole. An inspection of some of the photographs would tend to indicate the existence of a hole of some depth at this point. It is reasonable to believe that if a hole was near the north rail his movement toward the south would make the thrust of his foot toward the north, where he said the hole sloped off, and wedge his ankle into the narrow portion of the space between the swdtch tie and the tie rod. If he then, in this predicament, fell toward the left, his foot being held against the tie, the tie rod might well supply enough leverage to break his leg.
With respect to the claim of negligence in the operation of the engine, the evidence showed that the locomotive was moving very slowly when Guthrie moved over to throw the switch. Guthrie’s testimony was that it was moving so slowly that he could not be sure that it was moving at all. The fireman estimated the speed to be three or four miles an hour, slow enough so that when he got down on the ground he could “get ahead of the engine by either walking or trotting slowly”. The fireman had made a few steps toward the switch after getting down on the engineer’s side when he saw Guthrie at the switch and that he had correctly lined the switch for the locomotive to proceed. The fireman saw Guthrie give the “come ahead” signal, saw Guthrie start crossing the track toward the south side, waited for the ladder of the engine to come to where he was standing, and after climbing up to the locomotive cab, walked across to his own side and looked for Guthrie. He saw Guthrie’s grip on the ground but saw nothing of Guthrie. The fireman then went back to the other side of the engine, saw nobody there and started down the ladder. It was after that that the fireman heard Guthrie’s cries and told the engineer to stop.
It clearly appears that the portion of the locomotive ahead of the cab was so wide that there was no opportunity for the engineer from his position to see Guthrie after he started to cross the track. Counsel for Guthrie placed the negligence upon the fireman in two particulars; in the first place, it is asserted that the fireman was negligent in not remaining upon the ground where he was when he saw Guthrie start to cross the tracks until such time as he had made sure that Guthrie was safely across. In the second place, it is asserted that when the fireman returned to his own station on the left side of the cab and looked for Guthrie and did not see him, he should have known that something was wrong and told the engineer to stop.
Without considering the first of these contentions, it seems that the record contains evidence which might warrant the jury in believing that when the fireman looked out and saw that Guthrie was missing there was yet time to have stopped the locomotive before it reached him. Guthrie testified that when he threw the switch the locomotive was between 200 and 250 feet away. If the locomotive was moving at three miles per hour this means it was traveling approximately 4% feet per second. It would probably be a matter of common knowledge that since the fireman was only a few steps from the ladder when he stopped, it would not take him more than 20 seconds to climb the ladder and return to his station. Accordingly, in that time the locomotive would have traveled 90 feet, and it would still be a considerable distance away from where Guthrie was caught. It is true that the fireman placed the front of the locomotive much closer to Guthrie than would appear from Guthrie’s testimony, but the resolving of that difference would be for the jury.
A mere -reference to the more -recent decisions of the Supreme Court -is all that is required to demonstrate that there was sufficient evidence to warrant the court in submitting both claims of negligence to the jury. Tiller v. Atlantic Coast Line R. Co., 318 U.S. 54, 63 S.Ct. 444, 87 L.Ed. 610, 143 A.L.R. 967; Bailey v. Central Vermont Ry. Co., 319 U.S. 350, 63 S.Ct. 1062, 87 L.Ed. 1444; Tennant v. Peoria & P. U. Ry. Co., 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520; Lavender v. Kurn, 327 U.S. 645, 66 S.Ct. 740, 90 L.Ed. 916; Ellis v. Union Pacific R. Co., 329 U.S. 649, 67 S.Ct. 598, 91 L.Ed. 572; Wilkerson v. McCarthy, 336 U.S. 53, 69 S. Ct. 413.
The evidence indicates that it was entirely proper for Guthrie to cross the track as he did. Under these circumstances, the duty to provide a safe place to.work was such that under the decisions mentioned it was for the.jury to say whether negligence existed in connection with the maintenance of the area in and about and connected with the switch. Cf. Southern Ry. Co. v. Puckett, 16 Ga.App. 551, 85 S.E. 809, affirmed 244 U.S. 571, 37 S.Ct. 703, 61 L.Ed. 1321, and cited in Brown v. Western R. Co., 1949, 338 U.S. 294, 70 S.Ct. 105. It is even more clear, we think, that it was a jury question whether the fireman’s delay in warning the engineer to stop constituted negligence.
Appellant made a motion for a new trial upon the ground, among others, that the verdict is excessive and appears to have been given under the influence of passion and prejudice. It is said the verdict for $100,000 is contrary to the evidence in that it appears from its amount that no reduction in the amount of the award was made because of the contributory negligence of the plaintiff.
In this connection appellant calls attention to the comparative negligence rule which was adopted by the Employers Liability Act, and argues that the court cannot properly consider the propriety of a verdict of this size without at the same time considering the evidence to determine whether the jury made proper deductions or any deduction on account of claimant’s contributory negligence. This, it is said, requires that the court review the evidence of contributory negligence.
We shall have occasion later in this opinion to consider the question of the claimed excessive amount of the verdict. But insofar as contributory negligence may have a bearing on its amount, it is our opinion that for the same reason that the question of negligence vel non on the part of the company was one to be decided by the jury, the question of whether plaintiff was guilty of contributory negligence was also one for the jury to decide.
Appellant specifies error in respect to the court’s failure to give, in the language proposed by appellant, a considerable number of requested instructions. It is not claimed that the court’s charge was not technically correct, as far as it went, but it is said that the instructions should have been amplified to the end that the jury be furnished standards and tests to guide it in the determination of the issues submitted to it.
The court’s charge to the jury, although brief, covered the issues to he determined. The main contention of appellant is that the instructions were too brief. Thus, although “negligence” was properly defined, it is complained that the court should have defined “contributory negligence” in a separate instruction, and in the language which the courts commonly use for that purpose.
Here it is well to bear in mind what was said in Continental Improvement Co. v. Stead, 95 U.S. 161, 165, 24 L.Ed. 403. “Perhaps some of the abstract propositions of the defendant’s counsel contained in the instructions asked for, based on the facts assumed therein, if such facts were conceded, or found in a special verdict, would be technically correct. But a judge is not bound to charge upon assumed facts in the ipsissima verba of counsel, nor to give categorical answers to a juridical catechism based on such assumption. Such a course would often mislead the jury instead of enlightening them, and is calculated rather to involve the case in the meshes of technicality, than to promote the ends of law and justice. It 'belongs to the judicial office to exercise discretion as to the style and form in which to expound the law and comment upon the facts. If a judge states the law incorrectly, or refuses to state it at all, on a point material to the issue, the party aggrieved will be entitled to a new trial. But when he explains the whole law applicable to the case in hand, as we think was done in this case, he cannot be called upon to express it in the categorical form, based upon assumed facts, which counsel choose to present to him.” Cf. Tyson-Long Co. v. Wolfe, 7 Cir., 81 F.2d 82, 84.
While some of these requested instructions might properly have been added to the charge, yet we find no prejudicial error in their omission. Others were prop'erly refused for other reasons. Some were peremptory, and therefore, for reasons we have previously stated in commenting upon proof of negligence, they were properly rej ected.
■ [5,6] Other requested instructions not only added no essential feature to the 'charge given, but were subject to other valid objections.
It is earnestly argued that the verdict is so grossly excessive as to require a conclu■sion that it was the result of passion and prejudice. It is contended that the trial court erred in refusing a new trial on this ground.
Guthrie’s earnings for 1946, his last full year as an engineer, were $5,169.92. After his injuries, and before trial, wage increases actually made for men in his position would have increased his earnings by one-third, thus making -them $6,893. Appellant argues that in any calculation of loss of earnings we must throw out the amounts to be paid in taxes, in other words, confine his loss -to his reasonably to be expected “take-home” pay. Counsel for Guthrie challenge this, as they say the amount of taxes is purely speculative, and cite Stokes v. United States, 2 Cir., 144 F.2d 82, which seems to support them. We think, however, that for the expected period of Guthrie’s life, he would have found taxes fully as certain as his prospect of continued earnings. In 1946 his net taxes were $524.90. We think that the record will not establish a possible loss of earnings in excess of $6,000 per year after taxes.
Whether that possible loss is reasonably probable must depend upon whether Guthrie’s disability is total. There is also controversy as to whether loss of earnings can be said to relate to a period after Guthrie would have reached age 70, when the rules of his employer would require his retirement. We think the prospect of a continuance of employment after 70, and after compulsory retirement from employment by the Southern Pacific, too remote to enter calculations here. And for similar reasons we think the jury would be warranted in believing that the prospect of a man past 59, with but one leg, getting a job in the labor market in competition with younger and able-bodied men, was equally remote.
Computed at 3 per cent the present worth of $6,000 a year for eleven years is $55,515.74. This figure is somewhat less than that arrived at by the trial judge, whose opinion stated that the amount would be “between $60,000, and $70,000.” Such a figure would be produced if the total earnings of $6,893 were considered, without deduction for taxes. It is apparent that an appraisal of the verdict shows that assuming that the jury correctly appraised the present worth of the loss of earnings, there must have been some $45,000 awarded on account of such items of damage as pain and suffering, inconvenience and disfigurement.
The evidence as to these factors was that Guthrie was hospitalized for 37 days during which he underwent two operations on his stump. In the process of healing a 27 degree contracture of the right thigh developed, so that the stump of his leg extended at an angle which up to the time of trial had prevented him from wearing an artificial limb, and it appeared possible that he would never be able to wear one. He suffered from phantom pain in the cut limb, there was tenderness over the cut end of the sciatic nerve, and the medical testimony was that this phantom pain, a continued constant burning sensation as if he felt his amputated foot, was characteristic of amputees generally, and was real pain, often remaining constant and permanent. Loss of the leg has increased his discomfort in his back, due to a congenital anomaly which previously existed there.
It is common knowledge that for a man of Guthrie’s age, aches and pains arising out of physical disabilities do not ordinarily lessen, as they might for a younger man. We do not think it necessary to determine whether the probability of future suffering was proven with the requisite degree of certainty. On the whole the inconvenience, the disfigurement, and certainly some degree of distress, are shown to be both substantial and permanent. “Insofar as the award of damages to him consists of compensation for pain and suffering it is, obviously, nothing that an appellate court can, or a trial court for that matter, measure by a yardstick as to whether the jury has given too much or too little.” The same is true with respect to the elements of inconvenience and disfigurement. And in comparing the amount here awarded with amounts previously held by the courts to be excessive, we are bound to consider “the century’s continued depreciation of the purchasing value of the dollar, with the extraordinary acceleration of the rate of decrease of the past decade.”
Nevertheless, it is the opinion of the members of this court that the amount of the verdict is too high. What we, as an appellate court, are permitted to do about such a situation, is another matter.
It appears to be generally agreed that when it can be said that the verdict of ■the jury was the result of passion or prejudice, it is the duty of the appellate court to set aside the verdict and grant a new trial. Southern Pac. Co. v. Zehnle, 9 Cir., 163 F.2d 453; L. E. Whitham Const. Co. v. Remer, 10 Cir., 105 F.2d 371; American Ice Co. v. Moorehead, 62 App.D.C. 266, 66 F.2d 792. In such a case a new trial must be ordered, — the error cannot be' cured by a remittitur. Minneapolis, St. P. & S. S. M. Ry. Co., v. Moquin, 283 U.S. 520, 51 S.Ct. 501, 75 L.Ed. 1243. Some authorities hold that passion and prejudice may not be inferred from the mere excessiveness of the verdict, proof of appeals to passion and prejudice not appearing in the record. Larsen v. Chicago & N. W. R. Co., 7 Cir., 171 F.2d 841, 845. As to this, we need not express any opinion for the reason that in our view there is nothing in this case, either in the siz.e of the verdict or otherwise, sufficient to establish the existence of passion or prejudice.
There is an abundance of authority in the decisions of the federal courts that in this situation an appellate court has no power to do anything about such a verdict. The view most commonly expressed is that stated by Judge Goodrich, for the Court of Appeals of the Third Circuit, in Scott v. Baltimore & O. R. Co., supra, as follows: “The members of the Court think the verdict is too high. But they also feel very clear that there is nothing the Court can do about it. * * * ” “A long list of cases in the federal courts demonstrates clearly that the federal appellate courts, including the Supreme Court, will not review a judgment for excessiveness of damages even in cases where the amount of damage is capable of much more precise ascertainment than it is in a personal injury case.”
The cases in accord, cited in the margin of that court’s opinion, could be multiplied.
Most of the cases so holding cite Southern Ry. Carolina Division v. Bennett, 233 U.S. 80, at page 87, 34 S.Ct. 566, at page 567, 58 L.Ed. 860, in which it was said: “It may be admitted that if it were true that the excess appeared as matter of law, —that if, for instance, the statute fixed a maximum and the verdict exceeded it, — a question might arise for this court. But a case of mere excess upon the evidence is a matter to be dealt with by the trial court. It does not present a question for re-examination here upon a writ of error.” On the other hand, in Cobb v. Lepisto, 9 Cir., 6 F.2d 128, this court remanded a case with directions to order a new trial unless an excess amount, stated 'by this court, were remitted. In Department of Water & Power of City of Los Angeles v. Anderson, 9 Cir., 95 F.2d 577, while finding the verdict there in question not to be “grossly excessive”, this court stated the rule of Cobb v. Lepisto to be as follows, 95 F.2d at page 586: “Although it was held in Southern Ry. Co. v. Montgomery, 5 Cir., 46 F.2d 990, 991, that a Circuit Court of Appeals has ‘no jurisdiction to correct a verdict because it is excessive,’ the rule in this court is that the refusal to grant a new trial is ‘such air abuse of discretion as is reviewable by this court’ where the verdict is ‘grossly excessive.’ ”. In Virginian Ry. Co. v. Armentrout, 166 F.2d 400, the Court of Appeals for the Fourth Circuit, reversed the judgment and ordered a new trial in a personal injury case because of its determination that the verdict was excessive notwithstanding the trial judge had denied a motion for new trial made upon this ground. The court cited Cobb v. Lepisto, supra, with approval and said: “To the federal trial judge, the law gives ample power to see that justice is done in causes pending before him; and the responsibility attendant upon such power is his in full measure. While according due respect to the findings of the jury, he should not hesitate to set aside their verdict and grant a new trial in any case where the ends of justice so require. * * *
“The power of this court to reverse the trial court for failure to exercise the power, where such failure, as here, amounts to an abuse of discretion, is likewise clear. * *" [166 F.2d 408].
The writer of this opinion thinks that this court should remand this case with directions to grant a new trial unless the appellee shall file his consent in writing to remit from the judgment now entered the sum of $20,000 together with all interest, if any, which may have accrued upon the amount so remitted. Neither the industry of counsel nor our own research has been able to turn up any case of any appellate court where a verdict anywhere near so high as that rendered here has been upheld as compensation for comparable injuries. Cobb v. Lepisto, supra, as well as Estabrook v. Butte Anaconda & Pacific Ry. Co., 9 Cir., 163 F.2d 781, in which a new trial was ordered because of inadequate damages, had fixed the rule of this circuit as one sustaining the power of a federal appellate court to review the trial court’s action in a case of this kind. He thinks this power should be exercised here independently of the fact that the defect in the charge mentioned in note 5, supra, probably accounts for the excessive verdict; that this defect furnishes a special additional reason for holding the court’s refusal to set aside the verdict an abuse of discretion and that the defective instruction may be taken into consideration in this connection notwithstanding appellant’s failure to make specific objection to the charge on this ground. He is of the opinion that a disclaimer of appellate power such as that stated in Scott v. Baltimore & O. R. Co., supra, is a manifestation of a momentum generated in the earlier cases, and not yet arrested simply because the courts expressing this doctrine have failed to note that the procedural obstacles which originally prevented appellate review no longer exist, as was stated in the Fairmount Glass Works case, supra, note 15. In his opinion the doctrine of impotence expressed in the cases mentioned is due for a general overhauling and he thinks that the decision of Judge Parker in Virginian Railway Co. v. Armentrout, supra, points to the reasons why this court should not abdicate the power which it has previously asserted in Cobb v. Lepisto, supra, and Department of Water & Power v. Anderson, supra.
The majority of the court, however, do not agree with what has been stated in the preceding paragraph. They -find it unnecessary to express any opinion here as to whether, in a case of this kind, this court may not, under any circumstances, review the action of the trial court upon an application for a new trial because of the alleged excessiveness of the verdict. The court cannot say that the verdict here is so large that the refusal of the trial court to grant a new trial, or to condition a denial of a new trial on a remittitur, can be called an abuse of discretion. The majority of the court think the amount of this verdict left it within the area of the trial court’s discretion.
Finally, error is assigned because Guthrie was permitted to testify that on another railroad, the Texas and Pacific, employees are permitted to work beyond age 701 It is sufficient to say that we think the admission of that evidence could not have been prejudicial. Katalla Co. v. Rones, 9 Cir., 186 F. 30, 35.
The judgment is affirmed.
The company’s roadmaster testified as follows: “Q. Let me ask you this: If the tie bar and the head block were so close together that they were two inches in one end, three inches in the middle and four inches at the other end, and if you had a seven-to-nine inch hole underneath that so that a man may got his leg caught and broken in there, wouldn’t you say as a track man and roadmaster, wouldn’t you consider that to be a. dangerous condition? A. I would, sir.” Appellant has an ingenious explanation for this answer, saying that the witness merely meant that it was dangerous because the ties would move. We think that-since the question referred to getting the leg caught the witness must have understood the question as referring to danger for a man crossing.
. For a summary of the recent decisions of the Supreme Court dealing with this question see Appendix to opinion of Mr. Justice Douglas, concurring, in Wilkerson v. McCarthy, 336 U.S. 53, at page 71, 69 S.Ct. 413, 422. It is. noteworthy that the Supreme Court has recently reversed a state supreme court upon this point by per curiam decision simply upon the authority of the cases here cited. Hill v. Atlantic Coast Line Railroad Co., 336 U.S. 911, 69 S.Ct. 507.
. Some of tile requested instructions were cautionary in character and designed to warn the jury against being misled in certain directions. Included in this group are instructions that the damages must not be more than reasonable; that the amount demanded in the complaint is no proof but is merely a claim; that the jury are not to fix damages by inquiring what sum they would take to exchange places with the plaintiff; that damages must be proved with reasonable certainty, and that the jury must not speculate or conjecture; that if plaintiff’s loss of earning capacity is not total, due allowance for possible earnings must be made; that an award for loss of earning capacity must be limited to the present value or worth of the anticipated losses; that damages must not constitute a gift or windfall to plaintiff or be awarded as punishment or I>onalty to the defendant; that the jury must not be misled by the words “in whole or in part” in the Act, hut that the plaintiff must prove that defendant’s negligence, if any, was a proximate cause of his injury; that mere risk or hazard or danger is not itself negligence; that the defendant is not liable in absence of proof of negligence; that the defendant was not required to use the utmost care, but only ordinary care and ordinary skill; that defendant was not bound to provide and maintain the best and safest conditions, or to supply facilities, equipment or appliances which were not called for as a practical matter and in the exercise of ordinary care; that in determining whether plaintiff was guilty of contributory negligence, the jury must consider all the evidence, that produced by the plaintiff as well as that produced by the defendant.
. The charge of the court correctly defined negligence and stated the effect of contributory negligence on the part of plaintiff if the jury should determine that such existed. The jury were told that they must exclude any sympathy as a basis for any verdict; that they must not have any prejudice against the defendant because it is a corporation or engaged in railroad business, or is an employer; that any award of damages must be reasonable. They were correctly instructed as to the provisions of the Federal Employers’ Liability Act and of the necessity of proving that plaintiff’s injuries were proximately caused or contributed to by the negligence of the employer. The jury were advised with great care as to the application of the rule of comparative negligence in the event that the jury should find contributory negligence, and the jury were told of the duty of the plaintiff to exercise reasonable care for his own safety. They were told that if the accident occurred solely and exclusively from the negligence of the plaintiff, their verdict must be for the defendant.
. A comparison of the.requested instructions with the court’s charge would indicate that appellant’s requested instruction No. 5, defining present worth of prospective loss of earning capacity, was more complete than the instruction of the court on the same subject, in reciting that the amount should be so computed that “at the end of the period for which allowance is made nothing would remain.” Appellant has not argued that the charge was defective in this particular. Nor was this point specified in the objections to the instructions. It was then stated: “We respectfully object and except to the refusal of the court to give defendant’s instruction No. 5, that the question is not loss of wages, but also loss of earning capacity, and only that could be used.” See Federal Rules of Civil Procedure, Rule 51, 28 U.S.C.A. Cf. Hall v. Aetna Life Ins. Co., 8 Cir., 85 F.2d 447, 450.
. Thus the request No. 29, to the effect that because of the construction of the locomotive in- such manner that Guthrie was out of the view of the operators of the locomotive until he was run over, “you cannot find that the operators of the locomotive were negligent because they did not see Guthrie until after he was run over, if that is the fact”, suggests what was said in Union Pacific R.R. Co. v. Hadley, 246 U.S. 330, 332, 38 S.Ct. 318, 319, 62 L.Ed. 751, as follows: “On the question of its negligence the defendant undertook to split up the charge into ■items mentioned in the declaration as constituent elements and to ask a ruling as 'to each. But the whole may be greater than the sum of its pai-ts, and the Court was justified in leaving the general que'stion to the jury if it thought that the defendant should not be allowed to take the bundle apart and break the sticks separately, and if the defendant’s conduct viewed as a whole warranted a finding of neglect.”
Appellant asked for an instruction No. 36, as follows: “If plaintiff Guthrie was experienced in, and familiar with, the work he was doing and knew and appreciated normal risks and hazards which attend it, including chance of injury from getting his foot caught in a switch in front of an approaching train, defendant Southern Pacific was not required to take steps
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
MeENTEE, Circuit Judge.
Defendant was indicted on March 14, 1968, for transporting a motor vehicle in interstate commerce, knowing the same to have been stolen, in violation of the Dyer Act, 18 U.S.C. § 2312 (1964). In response to a motion by his court-appointed counsel, the district court ordered that he be given a psychiatric examination. He was examined by Dr. Alvin F. Poussaint of the New England Medical Center in Boston, who submitted his report to the court on May 21. Ten days later the defendant changed his plea to guilty. At the request of his attorney, he was committed to the custody of the Attorney General pursuant to 18 U.S.C. § 5010(e) (1964), which provides for the observation and study of youth offenders. On September 3, he was committed to the custody of the Attorney General pursuant to 18 U.S.C. § 5010(b) (1964), which provides for treatment and supervision by the Youth Correction Division of the.U. S. Department of Justice in lieu of imprisonment.
In a letter addressed to the district court judge, dated January 14, 1969, the defendant moved pro se to withdraw his plea of guilty. The court treated the letter as a motion under Fed.R.Crim.P. 32 (d), which it denied without a hearing. On February 10, 1970, he moved pro se for a new trial. This second motion was also denied without a hearing. He appeals from the denial of both motions.
Because defendant’s appeal from the denial of his first motion was untimely, it will not be considered here. See Fed.R.Crim.P. 37. We shall treat his motion for a new trial as a motion for post-conviction relief under 28 U.S.C. § 2255 (1964). See Halliday v. United States, 380 F.2d 270 (1st Cir. 1967), aff’d, 394 U.S. 831, 89 S.Ct. 1498, 23 L.Ed.2d 16 (1969). Under 28 U.S.C. § 2255 defendant has the initial burden of showing that he is entitled to relief. Kress v. United States, 411 F.2d 16, 20 (8th Cir. 1969). However, in deciding whether the defendant was entitled to an evidentiary hearing, we must take his factual allegations “as true, except to the extent that they are contradicted by the record or are inherently incredible, and to the extent that they are merely conclusions rather than statements of fact.” Domenica v. United States, 292 F.2d 483, 484 (1st Cir. 1961).
Defendant’s primary argument is that in accepting his guilty plea the district court failed to comply with Fed.R.Crim. P. 11 (Rule 11). Under this rule a federal court cannot accept á plea of guilty
“without first addressing the defendant personally and determining that the plea is made voluntarily with understanding of the nature of the charge and the consequences of the plea. * * * The court shall not enter a judgment upon a plea of guilty unless it is satisfied that there is a factual basis for the plea.”
In this ease the district court held an extensive Rule 11 hearing and addressed the defendant personally in great detail. It is evident from the transcript of the hearing that the court made every effort to comply assiduously with the requirements of Rule 11.
There appears to be little question that, when he changed his plea, the defendant understood the nature of the charge. It was simple and straight-forward. See Domenica v. United States, supra at 485. The court personally asked him whether he understood the nature of the charge, and he answered in the affirmative. Furthermore, defendant’s detailed discussion of the crime with the court made it clear that he understood each of the elements of the offense to which he was pleading guilty. The court was also careful to take several minutes to spell out the consequences of a guilty plea. It emphasized that, because defendant was a minor, he could be sentenced under the Youth Corrections Act, 18 U.S.C. §§ 5005-5026 (1964), which might, under certain circumstances, lead to a longer sentence than adults could receive for violating the Dyer Act. The court’s careful discussion of the consequences of a guilty plea satisfied the standards of Durant v. United States, 410 F.2d 689 (1st Cir. 1969).
Defendant contends, however, that the court’s discussion was deficient because it failed to list the constitutional rights that were waived as a consequence of his guilty plea: the privilege against self-incrimination; the right to trial by jury; and the right to confront one’s accusers. We think it self-evident that those rights were being waived. Defendant had discussed the guilty plea with his counsel and, absent some showing to the contrary, must be presumed to have understood that he was waiving his right to a trial. Indeed, defendant does not allege that he failed to understand that he was waiving these rights. It would not add to the understanding of defendants in Rule 11 proceedings to require the court to recite a ritualistic list of constitutional rights that are obviously being waived. Emphasis must rather be placed on less readily apparent consequences of the plea, such as length of sentence and loss of parole.
Defendant also argues that there was no “factual basis” for his guilty plea. He bases this on the fact that his statement to the court that he knew the car he drove across state lines was stolen was in contradiction of a statement he had made earlier during his psychiatric examination. Defendant contends that, because of this contradiction, the record does not clearly support the conclusion that he is guilty. However, the “factual basis” requirement does not compel the court to resolve all contradictory evidence in the case. To do so would usually require an evidentiary hearing, thereby nullifying one common motivation behind guilty pleas: the avoidance of the agony and expense of a protracted trial. See Brady v. United States, 397 U.S. 742, 750, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970). The court need not be convinced beyond a reasonable doubt that defendant is in fact guilty. Griffin v. United States, 132 U.S.App.D.C. 108, 405 F.2d 1378, 1379 (1968); Maxwell v. United States, 368 F.2d 735, 739 (9th Cir. 1966); McCoy v. United States, 124 U.S.App.D.C. 177, 363 F.2d 306, 308 (1966). It should be enough if there is sufficient evidence for a jury to conclude that he is guilty. 1 C. Wright, Federal Practice and Procedure § 174, at 377 (1969). In the instant case, the court went far beyond “a bare recitation that defendant ‘stole’ ” a car. Cf. United States v. Steele, 413 F.2d 967, 969 (2d Cir. 1969). It questioned him about each, of the elements of the crime and required the prosecution to outline the documentary evidence it had gathered.
Finally, defendant contends that his plea was not made voluntarily. He avers that he “got the impression” from his attorney that he would be sent to a military hospital. But a “mere prediction by counsel of the court’s likely attitude on sentence, short of some implication of an agreement or understanding, is not grounds for attacking a plea.” Domenica v. United States, supra, 292 F.2d at 485. Next he maintains that he was motivated to plead guilty by fear of being sent to a prison in the south if he was not incarcerated in the north. But in Brady v. United States, supra, the Supreme Court held that the allegation that a guilty plea was motivated even by fear of the death penalty was not grounds for withdrawal of that plea. As we said in Kent:
“There are many reasons why a defendant may choose to plead guilty. They do not, simply by being denominated ‘fears,’ necessitate the conclusion that the plea was not voluntary. * * If a defendant elects to sacrifice himself for such motives, that is his choice, and he cannot reverse it after he is dissatisfied with his sentence, or with other subsequent developments.” Kent v. United States, 272 F.2d 795, 798 (1st Cir. 1959).
The only aspect of this case that raises any question regarding the voluntariness of defendant's plea is the psychiatric report. In that report defendant was diagnosed as suffering from moderate to severe depression, manifested by self-destructive behavior and a desire for punishment and withdrawal from society. He was described as being
“fatalistic and somewhat hopeless about the future. He was unable to explain his present behavior and felt going to jail was as good as anything. He expressed guilt over his friend getting killed [while coming to his aid in combat] in Vietnam' and one got the feeling that he felt he should be punished in some way for his friend’s death.”
The report concluded that defendant was mentally competent* and not psychotic, but was perhaps undergoing an emotional upheaval. It is possible that defendant’s attitude of fatalism could have led him to plead guilty without being guilty. While it might have been particularly desirable to ask defendant if he was pleading guilty because he was guilty— a useful inquiry to make in every case— we do not find in the psychiatric report available to the district court such a clear signal of volitional incapacity as to have required further inquiry.
The Supreme Court has emphasized that “[t]he nature of the inquiry required by Rule 11 must necessarily vary from ease to case.” McCarthy v. United States, 394 U.S. 459, 467 n. 20, 89 S.Ct. 1166, 1171, 22 L.Ed.2d 418 (1969). “The voluntariness of [defendant’s] plea can be determined only by considering all of the relevant circumstances surrounding it.” Brady v. United States, supra, 397 U.S. at 749, 90 S.Ct. at 1469. Upon careful consideration of the record as a whole, we have concluded that the inquiry made by the court on the issue of voluntariness was sufficient to satisfy the requirements of Rule 11 under the circumstances. Compare McCarthy v. United States, supra, and Domenica v. United States, supra, with Machibroda v. United States, 368 U.S. 487, 82 S.Ct. 510, 7 L.Ed.2d 473 (1962) and United States ex rel. McGrath v. LaVallee, 319 F.2d 308 (2d Cir. 1963). The court personally inquired of the defendant whether he was pleading guilty voluntarily and whether any threats or promises had been made to him in connection with his plea. Defendant was also asked whether he had discussed entering the guilty plea with his court-appointed attorney, to which he responded that they had discussed it twice. In addition, we feel that the court was entitled to place heavy reliance on the psychiatrist’s finding that defendant was mentally competent and not psychotic. Furthermore, the court had the advantage of observing defendant’s demeánor at first hand. Taking all these factors into consideration, we cannot say as a matter of law that the court abused its discretion by failing to make further inquiries regarding the voluntariness of defendant’s plea.
Defendant contends that, even if Rule 11 was not violated, he has a right to a hearing under 28 U.S.C. § 2255 (1964) to determine whether his plea was voluntary in fact. But, where there is a complete record of the Rule 11 proceeding, as in this case, we deem it appropriate to rely on that record rather than “to resort to a later fact finding proceeding ‘in this highly subjective area.’ ” McCarthy v. United States, supra, 394 U.S. at 469, 89 S.Ct. at 1172. Cf. Jones v. United States, 384 F.2d 916 (9th Cir. 1967).
Affirmed.
. “THE COURT: I am endeavoring to explain that although the maximum period under the Youth Corrections Act is four years, there could be circumstances which would result in a youth offender being kept for a maximum of six years, which would be even longer than the five-year penalty provided by the Dyer Act as the maximum penalty under that statute, and the Court wants to make sure that a youth offender understands that possibility of even greater confinement under the Youth Corrections Act than under the Dyer Act. Do you understand that, Mr. Webb? THE DEPENDANT: Yes, I do, your Honor.”
. The statutory test for mental competency to stand trial is whether the accused is “so mentally incompetent as to be unable to understand the proceedings against him or properly to assist in his own defense.” 18 U.S.C. § 4244 (1964).
. Courts have recognized that the conclusion that a defendant is competent to stand trial does not necessarily mean that he has the mental capacity needed for an intelligent decision to plead guilty. In re Williams, 165 F.Supp. 879 (D.D.C.1958).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
BRIGGLE, District Judge.
Upon charges preferred by International Union, United Automobile Workers of America (hereinafter called United), the National Labor Relations Board (hereinafter called the Board) issued its complaint on October 11, 1938, against the Diamond T Motor Car Company (hereinafter called the Company), charging that the company had engaged in unfair labor practices affecting commerce within the meaning of Section 8 (1, 2, and 3) of the National Labor Relations Act, 49 Statute 449, 29 U.S.C.A. § 158 (1, 2, and 3). The decision below was favorable to respondent. The company filed its petition for review. The Board answered, requesting enforcement of its order. Jurisdiction is conceded.
The complaint charges, inter alia, that the company had engaged in unfair labor practices, had dominated and interfered with the formation and administration of the Automotive Workers Industrial Union (hereinafter called Industrial) and that the company had discriminatorily discharged and refused to reinstate one C. R. Cahill. The trial examiner who heard the evidence found that the company had not dominated or interfered with Industrial or discrimina-torily discharged Cahill, but found that the Company had engaged in unfair labor practices within the meaning of Section 8(1). Upon review, the Board sustained the examiner with reference to employee Cahill and with reference to his finding of unfair labor practices, but overruled the examiner as to domination and found that the Company had dominated or interfered with the formation or administration of Industrial.
Pursuant to these findings the Board ordered the Company to cease and desist from (a) in any manner dominating or interfering with Industrial or any other labor organization of its employees and from contributing financial or other support thereto; (b) giving effect to an agreement between the Company and Industrial; (c) interfering with its employees in the exercise of any rights guaranteed to them by Section 7 of the Act, 29 U.S.C.A. § 157.
The Board further ordered the Company to take the following affirmative action: (a) Withdraw all recognition of Industrial as the representative of any of its employees; (b) post notices of compliance; (c) notify the regional director of compliance. Petitioner asserts that the decision of the Board is not supported by substantial evidence, nor by the facts found by the Board and that the inferences of fact drawn by the Board from evidentiary facts are unreasonable. Respondent asserts that its findings and order are amply supported by the evidence. The decision turns upon the company’s relation with Industrial.
The facts, viewed in the light most favorable to the Board: In March, 1937, the Steel Workers Organizing Committee, affiliate of C. I. O., initiated a campaign among the Company’s employees, looking to the ultimate organization of United. Shortly thereafter, C. A. Peirce who was Vice-president of the Company in charge of production, asked Frank Koci, a production employee if he had seen any C. I. O. cards passed around in the shop. Later, one Courval, a Superintendent, asked one Joseph Tishcovske, an employee, whether he knew anything about C. I. O. organizers having C. I. O. cards passed around the shop. Upon a negative reply by Tish-covske, Courval then said: “Joe, it’s like this. Mr. Tilt the owner of this Company, will not stand for any Company union, outside union. * * * If Mr. Tilt finds out organization is going on here, I am going to lose my job; Mr. Peirce will lose his job, because Mr. Tilt will close this plant down * * *. He will have to move down to Georgia. That means all of the boys and you will be out of work.” It does not appear that Tishcovske gave any heed to this or ever mentioned it until the hearing.
On March 24, 1937, a Chicago newspaper carried a news item to the effect that C. I. O. contemplated invading the company’s plant with a campaign for unionization. Peirce soon thereafter summoned all of the employees to a meeting in thp assembly room of the plant and addressed them at length. After stressing that an absence of strikes and the existence of friendly feelings had characterized the relations between the Company and the men in the past, he told the men that he did not want any strikes if he could help it. Fie told the employees that he had been reviewing the question of their pay and that they would receive a raise in pay the first of the following month and that he had under consideration the question of vacations. He then used the following language which the Board appears to have relied upon: “I hear there is a movement to organize our plant; I read it in the papers. * * * I have read the Wagner Act, and while I don’t pose as any authority on it, I can say that you have a perfect right to organize in any way you see fit a union in our plant. * * * There are three forms of union that I know of. There is the Federation of Labor, there is the C. I. O. and there is an independent union form of organization and any of those are acceptable to me. However, personally, since I am going to conduct the negotiations probably with the representatives of whatever union is formed, naturally I would like to talk and deal with a man or men who know our business in our plant, understand our peculiar working conditions and can talk intelligently about them.” Later, on cross-examination by the Board’s attorney and in reviewing the foregoing incident he used this language: “If you are going to organize, I would prefer to deal with men who are working in a plant and know our business and our style of operation of a plant rather than someone from outside who doesn’t understand it.”
Peirce testified that fear in his mind that a strike was imminent was the reason which prompted him to call the meeting. He said his sole object was to preserve continuity of work in the plant. The President of United testified that Peirce told the men at the meeting that it was up to them to decide what they wanted to do, that it was their choice and that the responsibility was on them.
■ Upon conclusion of Peirce’s talk and at the request of the employees he left their presence and they were free. to discuss matters of organization among themselves. A witness Schultz testified that later Peirce returned and suggested that the employees might take a vote to determine whether their orgar^zation would be an outside organization or one of their own. It is to be noted that this testimony was sharply disputed and the Board in its findings of fact recited: “Later in the afternoon the assembled employees decided to resolve the question by secret ballot. Cahill (an employee who favored C. I. O.) suggested that they vote either for the C. I. O. or for an inside union.” The trial examiner stated in his report that the evidence was clear that after Peirce left, it became an open meeting for all employees with no supervisory agent present. Apparently the Board did not accept Schultz’ statement in this respect. The vote was later taken, and the ballots deposited at the time clock as the employees left the plant for the day. Upon request of the employees and with Peirce’s permission the votes were counted in his office. The vote showed that a substantial majority favored the formation of what has been termed an “inside” organization.
Pursuant to the decision of the employees two men were chosen by the employees in each department for the purpose of forming such an organization. The day following the meeting referred to, some thirty representatives so chosen met during working hours in the shipping office of the plant and selected temporary officers. Thereafter, organizational meetings were held outside the plant almost nightly for several weeks. On April 18, 1937, the permanent organization of Industrial was effected, officers were elected and a constitution and by-laws adopted. Thereafter Industrial, through its representatives, entered upon negotiations with the Company concerning many phases of their relationship, but the principal controversy between the Company and Industrial appears to have been on the question of wages. An agreement was eventually reached and the officers of Industrial submitted it for ratification to the employees, at a meeting held at the plant on June 16, 1937. The Company had nothing to do with the calling of this meeting and Peirce did not know of it before it took place. The proposals were approved by the membership. Later, on December 9, 1937,- a contract was entered into between the Company and Industrial, which remained in effect at the time of the Board’s order.- During some of the negotiations between Industrial and the Company, the Company permitted members of Industrial to meet on Company time and property, and for a brief time dues were collected from members in their departments and Industrial was permitted to erect bulletin boards in the plant.
Apparently the Company and its employees under the guidance of Industrial were proceeding harmoniously with little activity on the part of United until in April, 1938, when C. I. O. activity -again developed. At that time Peirce in conversation with one Walter Stanisz, an employee, after inquiring about the labor situation, stated that he heard that there were C. I. O. cards floating around the shop and that some of the fellows were going to C. I. O. meetings. He said: “Why * * * don’t you fellows seem to get along with Tom Law (Law was then President of Industrial) * * *? If you feel that you don’t like Tom Law why don’t you get him out of there and get another man in his place?” On the same day Superintendent Courval also remarked to Stanisz: “I don’t see why you attend these outside meetings.” Later Courval is said to have inquired of employees if any of the employees had been talking about outside unions and meetings and had asked if Stanisz was a good worker.
In September, 1938, at a meeting with representatives of United, Peirce said: “Why did the boys switch from one outfit to another * * * why don’t you fellows get on the side of the fence and play ball with us,” adding that he did not see anything wrong with Tom Law.
It is not possible to here detail all the facts which are to be gleaned from an 800 page record. We have undertaken only to state in an abbreviated form those things principally relied upon by the Board.
The argument in sxtpport of the Board’s finding of interference and domination, centers upon the speech by Peirce to the employees on March 24, 1937, and much stress is laid by the Board upon the language heretofore quoted from the Peirce speech.
To properly appraise what was said at that time by Mr. Peirce, it is pertinent to understand some of the background, as disclosed by the record. Peirce had been in charge of the Company for nearly twenty years, having previously taught engineering for five years at Cornell University. During his connection with the Company there had been no history of a Company union; there had been no labor disturbance of any kind or character and no strikes; the relation between employer and employees had always been cordial, pleasant and peaceful, and there had been no discrimination by the Company at any time on account of any union activities, by any employees. The Company which was in the business of assembling motor trucks, had previously been seriotxsly handicapped and harassed by strikes and labor disturbances at plants of other concerns which supplied the Company with parts. There had been a period of sitdown strikes in the automotive industry that naturally was alarming to those employers who had previously maintained cordial relations with employees. When the news item came to Peirce’s attention, indicating that persons outside the plant were about to interest themselves in the conduct of the affairs of the company and its employees he naturally became alarmed for fear of a strike. In communication with Mr. Tilt, the president of the Company, the latter advised him to talk to the men about the situation and tell them that the company did not want a strike, that they had business and that a strike would be a serioxxs matter. The circumstances indicate that the thought uppermost in Peirce’s mind at the time of calling the employees together was to convey to them the feeling of the Company that they should by all means avoid a strike at the plant. Indeed, Peirce says that was his sole object. He pointed out to the employees that there had been no strikes during the twenty years of his association and that he would do anything possible to prevent one.
It must be borne in mind that the principal events relied upon all occurred in a single day — the newspaper item, the calling of the men together, the speech, and the subsequent meeting of the men and the preliminary steps of organization. Peirce told them: “I hear there is a movement to organize our plant * * * there are three forms of union that I know of. There is the Federation of Labor, there is the C. I. O. and there is an independent form of organization and any of those are acceptable to me. However, personally, since I am going to conduct the negotiations probably with the representatives of whatever union is formed, naturally I would like to talk and deal with a man or men who know our bxxsiness in our plant and understand our peculiar working conditions and can talk intelligently about them. By all means don’t let us stop work with any strike or any disturbance during these times when we have some business.”
The Board urges that the language above qxxoted was indicative of Peirce’s preference of an “inside” txnion over an “outside” union and amounted to coercion and restraint xxpon the employees in the free exercise of their rights to form a union of their own choosing. We think this language not reasonably susceptible to the narrow interpretation placed upon it by the Board. Measured by all the surrounding circumstances, other expressions in the speech and the background of the Company, we think it entitled to no such interpretation. It was natural for Peirce in working out any labor problems in the plant to prefer to deal with men who worked in the plant and knew and understood the business of the Company. To so express himself is not to be condemned. Indeed, it is difficult to understand how the best interests of the men themselves could be fostered by one not working in the plant or not familiar with the operations of the Company. It seems to us that Peirce was saying to the men: “Form any organization you wish, but whether it be an independent organization, an A. F. of L., or a C. I. O., I would prefer that you give me someone to deal with who is familiar with your problems.” This was just plain, common sense, not only from the standpoint of the Company but from the standpoint of the men and cannot by any stretch of the imagination be deemed to be coercive in character. Even if it be deemed an expression of a preference as between labor organizations, we still think, as we did in Jefferson Electric Company v. N. L. R. B., 7 Cir., 102 F.2d 949, and Foote Brothers Gear & Machine Corporation v. N. L. R. B., 7 Cir., 114 F.2d 611, that a mere showing of preference does not constitute unlawful interference with an employee in the exercise of his rights under the Act. It is only when such asserted preference, with all surrounding facts and circumstances, amounts to improper influence and approaches a coercive character that it is to be condemned. Any inference that undue pressure was placed upon the men by Peirce upon this occasion is not borne out by the conduct of the men themselves and by the testimony of those present. No witness called by the Board, to testify concerning Peirce’s remarks gave any indication of pressure in his speech, but on the contrary their evidence indicates that Peirce told the men the problem was their own and that the responsibility was theirs.
Following the speech by Peirce, the men deliberated for some time, discussion was free, some favoring one form of union, some another. At the conclusion of the deliberations the vast majority favored the organization of the independent union, herein called “Industrial.” Among those who spoke in favor of C. I. O. was Cahill, who later became president of Industrial. He remained president of Industrial until trouble arose within the union which led to his suspension by the union in August, 1937, and his later expulsion from membership. The board found that the company had no knowledge of either the suspension or expulsion of Cahill until sometime after it had taken place. If this be true surely it cannot be thought that the Company was then exercising any authority over Industrial.
Cahill, while he was president, in one of his calls for a meeting of Industrial distributed the following card: “Brother Members: In March of this year when an organization was first thought of it was the will of the majority that this be a real Union and not another racketeers’ paradise. If you will stop to consider the progress we have made in the short time, you will see that it has taken plenty of hard work and loss of sleep. We as a body have gained items that could never be obtained as individuals. Shall we keep the ground we have gained or shall we let some of those among us who for a little personal gain would sell us back into the slaving underpaid conditions, that are sure to follow. Even now as in the past you have my entire time and thoughts to better conditions, all I ask is for your co-operation so we can carry out the original aim of this Union. I ask you as man to man to be present at the next regular meeting, August 10th, Lawndale Masonic Temple, 23rd and Millard Ave. Fraternally yours, C. R. Cahill.” Forceful evidence of independent action by the men coming from one who formerly favored the so-called “outside” union.
The Board also stresses the statement of Superintendent Courval to employee Tishcovske wherein he is alleged to have said that Mr. Tilt would not stand for an outside union and that they would lose their jobs. This statement if made is not to be defended, but it should be cónsidered in the light of its effect upon Tishcovske as. it was made to him alone. Apparently it did not impress Tishcovske, for he did not see fit to mention it in his discussion at the employees’ meeting following Peirce’s, speech. Tishcovske later joined United and there is no evidence that he ever mentioned the supposed remark until the hearing before the examiner. Moreover, Peirce-was the man highest in authority at the plant and his subsequent declaration to the. men, wherein he openly and frankly told them that the problem was their own and that they were free to join any organization of their own choosing in effect overrode and disavowed the previous expression of Courval.
We likewise believe that the occasional inquiries of Peirce and others with relation to the circulation of C. I. O. cards and with reference to labor activities in the plant are overemphasized by the Board. It is to be noted that the trial examiner who heard the witnesses testify did not believe that the Company had interfered with or dominated Industrial. While this was not binding upon the Board in their consideration of the matter, it is strongly indicative of the character of the testimony.
We think the evidence, considered as a whole, falls short of being substantial proof of dominance or coercion or unfair labor practices. In giving recognition to that freedom of action guaranteed the employee by the statute, care must be taken that in preserving it for the one we do not by the same act deny it to another. The petition of the company for vacation of the Board’s order is allowed and the petition of the Board for enforcement is denied.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
OPINION OF THE COURT
A. LEON HIGGINBOTHAM, Jr., Circuit Judge.
This is both an appeal and cross appeal from the judgment of the district court awarding compensatory and liquidated damages in an age discrimination suit. Upon our review of the record, we find sufficient evidence to support a jury finding of discrimination. We find, however, insufficient evidence to support a jury finding of willful discrimination. Accordingly, we will affirm that part of the district court’s judgment order awarding compensatory damages, but will vacate that portion of the judgment order awarding liquidated damages.
I.
Joseph P. Bartek (“Bartek”) brought this suit under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (1982 & Supp. IV 1986) (“ADEA”), against his employer, the Urban Redevelopment Authority of Pittsburgh, Pennsylvania (“URA”), a quasi-governmental agency that receives substantial federal funding through the Department of Housing and Urban Development.
In his amended complaint, Bartek, then age 65, alleged that he began his employment with URA in 1964 as a cost estimator, and was promoted in 1966 to the position of Deputy Director of the Housing Rehabilitation Department. In March, 1979, the Executive Director of the URA, Paul Brophy (“Brophy”), informed Bartek that his position was being eliminated for budgetary reasons, and that he had the choice of resigning or taking a subordinate position. Bartek alleged that he took the latter option conditional upon his being fairly considered for a promotion in the future, and that the URA had subsequently denied him certain job promotions on the basis of his age in violation of the ADEA.
Issues of liability were tried before a jury. Upon answering special interrogatories, the jury returned verdicts in favor of Bartek on three of the seven counts in his complaint. With respect to count I, the jury found that the URA willfully discriminated against Bartek in its promotion of Mary Marquis Evenson (“Evenson”) to Administrator of the Mortgage/Home Improvement Loan Program (“HILP”) on January 3,1984. With respect to count V, the jury found that URA willfully discriminated against Bartek in its promotion of Evenson to Residential Finance Section Manager on January 1, 1985, in its promotion of Joseph Pivamik (“Pivarnik”) to Manager of the Multi-Family Program in January, 1985, and in its promotion of Joseph Fiori (“Fiori”) to Administrator of the Agency/Emergency Loan Program on April 8, 1985. Finally, with respect to count VI, the jury found that URA willfully discriminated against Bartek in its promotion of John Posteraro (“Posteraro”) to Manager of the Multi-Family Program on July 1, 1985.
As per agreement of the parties, the damages phase of the trial was conducted without a jury. Bartek proffered evidence to the court on the positions held by Even-son. Since the jury had found that Bartek was discriminated against in January 1984 when the URA promoted Evenson to Administrator of Mortgage/HILP and in January 1985 when the URA promoted Even-son to Residential Finance Section Manager, the court assumed, for purposes of calculating damages, that Bartek would have held these positions. Moreover, the court found that, although Evenson resigned in August 1985 and was not replaced, her position remained in the URA’s administrative budget through the end of 1986, when it was eliminated as a result of the URA’s restructuring. Consequently, the court awarded Bartek the difference between his salary and that of the Administrator of Mortgage/HILP in 1984, and that of the Residential Finance Section Manager in 1985 and 1986. That sum equalled $20,928. The court then awarded Bartek statutory liquidated damages, in the amount of his back pay, to reflect the jury finding that the URA had willfully violated the ADEA. See 29 U.S.C. § 626(b). Bartek’s total award was $41,856.
Subsequently, the URA filed motions for a judgment notwithstanding the verdict, new trial, remittitur of liquidated damages, and stay of the enforcement of the judgment pending appeal. Bartek also filed a motion to alter or amend the judgment. The district court denied both parties’ motions, and these timely appeals followed. This court has jurisdiction pursuant to 28 U.S.C. § 1291 (1982).
II.
A.
The URA’s principal contention on appeal is that the district court erred in denying its motion for judgment notwithstanding the verdict since there was no evidence upon which the jury could have found that it violated the ADEA. We review a district court’s denial of a motion for judgment notwithstanding the verdict to determine whether the evidence and justifiable inferences most favorable to the prevailing party afford any rational basis for the verdict. Kinnel v. Mid-Atlantic Mausoleums, Inc., 850 F.2d 958, 961-62 (3d Cir.1988).
The ADEA broadly proscribes discrimination against any individual over 40 with respect to “compensation, terms, conditions, or privileges of employment, because of such individual’s age.” 29 U.S.C. § 623(a); see id. § 631(a) (Supp. IV 1986). To recover, “a plaintiff must prove by a preponderance of the evidence that age was the determinative factor in the employer’s decision.” Berndt v. Kaiser Aluminum & Chemical Sales, Inc., 789 F.2d 253, 256 (3d Cir.1986) (citation omitted).
In allocating the burdens of proof in-an ADEA suit alleging disparate-treatment on the basis of circumstantial evidence, we follow the formula enunciated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and Texas Dep’t of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), for cases brought under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1982). See Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 897 (3d Cir.) (in banc), cert. dismissed, 483 U.S. 1052, 108 S.Ct. 26, 97 L.Ed.2d 815 (1987). Under that formula,
[fjirst, the plaintiff has the burden of proving by a preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant “to articulate some legitimate, nondiscriminatory reason for the employee’s rejection.” ... Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination.
Burdine, 450 U.S. at 252-53, 101 S.Ct. at 1093 (citations omitted).
The opportunity, and thus the ultimate burden, either to prove that a discriminatory reason more likely than not motivated the employer’s conduct, or to show that the employer’s proffered explanation is unworthy of credence, lies with the plaintiff. While recent Supreme Court jurisprudence in the area of employment discrimination has been particularly volatile, no shadow has been cast on the McDonnell Douglas/Burdine allocation of burdens. See Price Waterhouse v. Hopkins, — U.S. -, 109 S.Ct. 1775, 1788, 104 L.Ed.2d 268 (1989) (in a disparate-treatment suit, where an employer uses both legitimate and illegitimate criteria, “the plaintiff retains the burden of persuasion on the issue [of] whether gender played a part in the employment decision”); Wards Cove Packing Co., Inc. v. Atonio, — U.S.-, 109 S.Ct. 2115, 2126, 104 L.Ed.2d 733 (1989) (where an employer meets the burden of producing evidence of a business justification in a disparate-impact case, the persuasion burden remains with the plaintiff to disprove the purported rationale); Patterson v. McLean Credit Union, — U.S. -, 109 S.Ct. 2363, 2378, 105 L.Ed.2d 132 (1989) (where an employer proffers a legitimate nondiscriminatory reason for its conduct in an action brought under 42 U.S.C. § 1981, the plaintiff “retains the final burden of persuading the jury of intentional discrimination”).
We find, after a careful review of the record, that there was sufficient evidence from which the jury could reasonably have concluded that age was a determinative factor in URA’s decision not to promote Bartek. It is undisputed that Even-son, age 28, was promoted to the position of Administrator of Mortgage/HILP over Bartek, age 62. Bartek testified that he had met the listed qualifications for the position of Administrator of Mortgage/HILP, given that he had a bachelor’s degree in business administration, had three years experience in a supervisory capacity and, prior to 1979, had coordinated program activities involving the URA, lenders, contractors, homeowners and others. Appellee’s Appendix (“App.”) at 258-59. The justification given by Brophy for appointing Evenson over Bartek was that she had expertise in finance. Id. at 492-94. Upon cross-examination, however, Brophy conceded that this position did not require the ability to make complex calculations, but rather merely consisted of ensuring that mortgage and home improvement loans met standard guidelines that were already prepared. Id. at 517-18.
Bartek also testified that he possessed the requisite skills for the position of Residential Finance Section Manager, which Ev-enson also received over him. That position required the same skills as that of Administrator of Mortgage/HILP, plus an additional two years of supervisory experience. Id. at 314-15. Moreover, Bartek testified that he met the qualifications for the position of Manager of the Multi-Family Program, which required a background in real estate, given that he possessed a real estate license. Id. at 317. Yet, both Pivarnik, age 35, and Posteraro, age 30, were promoted to that position over Bar-tek. It is undisputed that Bartek never had the opportunity to apply for Administrator of Mortgage/HILP or Manager of the Multi-Family Program because these positions were not posted. The URA’s position at trial was that these positions did not have to be posted since they were re-classifications of former positions. Bartek countered this argument, however, by demonstrating through expert testimony that these former positions had been enhanced to such a degree that they could not be considered mere reclassifications. Id. at 781.
Finally, Bartek testified that he met the requirements for the position of Administrator of the Agency/Emergency Loan Program that Fiori, age 27, received over him. Id. at 318-19. It is undisputed that Fiori, a high school graduate, had no previous experience with URA, while Bartek had been with URA for over 20 years. The URA’s justification for not promoting Bartek was that Fiori was better qualified. Yet, Bar-tek’s expert witness testified that, out of all the persons who were promoted over Bartek, Fiori was the only one who was totally unqualified for the position he received. Id. at 775-76. Additionally, the URA claimed that Bartek’s act of insubordination on February 22, 1985, was grounds for not promoting him to Administrator of the Agency/Emergency Loan Program. Bartek testified, however, that the URA’s Director of Housing, Harvey Young (“Young”), had told him on that date that the position had already been filled. Id. at 441. Bartek therefore argues that his behavior had no bearing on URA’s decision to deny him the promotion.
On the basis of our review of the record, we conclude that Bartek produced sufficient evidence from which a jury could rationally find that URA’s purported justifications for not promoting Bartek were not credible and that, therefore, age was the determinative factor in URA’s decision.
B.
The URA next argues that it is entitled to a new trial because (1) the verdict was against the weight of the evidence; (2) remarks by Bartek and his counsel during the course of the trial unfairly prejudiced the jury; and (3) it was unfairly required to defend against eight claims. We review the district court’s denial of URA’s motion for a new trial for abuse of discretion. Honeywell, Inc. v. American Standards Testing Bureau, Inc., 851 F.2d 652, 655 (3d Cir.1988), cert. denied, — U.S.-, 109 S.Ct. 795, 102 L.Ed.2d 787 (1989).
With respect to URA’s first contention, it argues that the jury was influenced by matters outside the scope of the evidence, such as sympathy, prejudice and conjecture, and that the evidence on the record is insufficient to support the jury’s verdict. We disagree. Based on our review of the record in the preceding subsection of this opinion, the evidence that Bartek proffered to prove that age was a determinative factor in URA’s denying him a promotion provided a rational basis to support the jury finding of discrimination.
Next, the URA contends that, despite the district court’s admonishment, Bartek’s counsel twice mentioned in her opening statement that Bartek was “demoted” in March 1979, and repeatedly referred to URA as engaging in “abrupt terminations.” URA further argues that Bartek’s testimony, to the effect that there would be job openings at URA “with all the people that were going to be leaving due to indictments and so on,” Appellee’s App. at 430, was unduly prejudicial to its defense.
It is undisputed that the parties had stipulated that the term “demoted” would not be used to describe Bartek’s acceptance of a subordinate position rather than resignation in March 1979. Although Bartek’s counsel erred in using that term, we find that her error was harmless because Bar-tek’s decision was adequately explained in the course of his testimony. Id. at 246. Moreover, while the parties had stipulated that the term “abrupt terminations” would not be used, counsel for the URA used the term during cross-examination of Bartek’s • expert witness, id. at 800, and, therefore, URA cannot claim any prejudice from the use of that phrase. Likewise, after Bartek made the statement about indictments of URA’s personnel, counsel for URA, when presented with the opportunity, waived his right to have the court explain to the jury that Bartek’s statement was irrelevant. Id. at 435.
Finally, the URA avers that it was unfairly prejudiced by having to defend against eight claims in one trial. It argues that, because of the amended complaint, it was forced to defend against seven additional claims unrelated in law and in fact. We find no merit to this argument. The seven counts that ultimately went to the jury all dealt with the same law — a violation of the ADEA — and arose from the same set of facts — URA’s treatment of Mr. Bartek between 1979 and 1986. Therefore, the court acted within its discretion to permit the amended complaint and joinder under Fed.R.Civ.P. 15(a) and 18(a).
C.
The URA’s final contention is that the district court erred in its denial of remittitur of liquidated damages on grounds that the evidence proffered by Bartek was insufficient to support a jury finding that the URA had violated the ADEA willfully. Our standard of review in this instance is the same as that for denial of a judgment notwithstanding the verdict. We must review the record in the light most favorable to the nonmoving party, and affirm the denial of the motion “unless the record is ‘critically deficient of that minimum quantum of evidence from which the jury might reasonably afford relief.’ ” Link v. Mercedes-Benz of North America, Inc., 788 F.2d 918, 921 (3d Cir.1986) (citation omitted).
The analysis of the willfulness issue in this case is guided by this Court’s decision in Dreyer v. Arco Chemical Co., Div. of Atl. Richfield, 801 F.2d 651 (3d Cir.1986), cert. denied, 480 U.S. 906, 107 S.Ct. 1348, 94 L.Ed.2d 519 (1987), where we set forth a standard for determining willfulness in cases alleging disparate treatment in discrete employment situations that we believe comports with the Supreme Court’s enunciation in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 125-30, 105 S.Ct. 613, 623-26, 83 L.Ed.2d 523 (1985); accord McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S.Ct. 1677, 1681, 100 L.Ed.2d 115 (1988).
In Dreyer, we noted that the Thurston standard of determining willfulness — if an employer either knew that its conduct violated the ADEA or showed reckless disregard for the ADEA’s prohibitions — was apt for those situations where the employer adopts a policy that violates the ADEA. We concluded, however, that the application of the Thurston rule to cases alleging disparate treatment in an individual employment context would produce the undesirable effect of permitting the recovery of liquidated damages whenever there was a violation of the ADEA. Dreyer, 801 F.2d at 656-57; accord Anastasio v. Schering Corp., 838 F.2d 701, 707 (3d Cir.1988).
Keeping with the rationale of Thurston, we therefore concluded that, in cases involving an employer’s conduct against an individual employee, a finding of a willful violation of the ADEA had to be supported by evidence of outrageous conduct that was not merely duplicative of that evidence needed for awarding compensatory damages. Dreyer, 801 F.2d at 658. We noted that liquidated damages might be justified where there is evidence of an employer’s (1) systematic purging of older employees, (2) discharging an employee at a time that would deny her or him an imminent pension, or (3) previous violation of the ADEA. We noted, however, that no paradigm of conduct warranting liquidated damages existed, and that “the appropriateness of the award will be dependent upon an ad hoc inquiry into the particular circumstances.” Id.
Although Bartek initially concedes that the district court properly charged the jury under the Dreyer standard, he proceeds to argue that “[i]f URA had shown good faith and reasonable grounds for believing it did not violate the ADEA, then a finding of willfulness would not have been appropriate.” Reply Brief for Appellant at 15-16. Our decision in Dreyer, however, expressly rejected any application of the “good faith” standard in the absence of a company policy to discriminate against older employees. We held specifically that
[wjhere an employer makes a decision such as termination of an employee because of age, the employer will or should have known that the conduct violated the [ADEA]. Nonetheless, in order that the liquidated damages be based on evidence that does not merely duplicate that needed for the compensatory damages, there must be some additional evidence of outrageous conduct.
Dreyer, 801 F.2d at 658.
Bartek, in an apparent abandonment of his concession that the Dreyer standard is applicable, asserts that he proffered sufficient evidence that the URA engaged in a policy of discrimination against older employees. The only evidence, however, proffered by Bartek to this effect was his testimony concerning passing conversations he had with other older workers about a perceived trend within URA to promote younger employees. While the perceptions of other employees within the ADEA’s protected class may be relevant, mere viewpoints, without more, are insufficient to support a finding that the URA had a policy of denying promotions to older workers.
This action was properly treated by the district court as one involving disparate treatment in an individual employment context and, therefore, the willfulness finding must be supported by sufficient evidence of outrageous conduct. Almost all of the evidence that Bartek contends is demonstrative of outrageous conduct actually pertains to the “knew or showed reckless disregard” standard of Thurston, and is thus not germane to this case. Upon our examination of the remaining evidence proffered by Bartek, we conclude that it fails to meet that “minimum quantum” necessary to support a finding of a willful violation of the ADEA.
For example, Bartek contends that when he spoke to Brophy about his failure to be promoted, Brophy told him to quit if he did not like the way he was being treated. The record does reflect that Brophy told Bar-tek: “Why don’t you look around for another job ... if you are that unhappy here.” Appellee’s App. at 535. While some persons might find such a statement to be insensitive, we do not find that such a statement constitutes outrageous conduct.
Bartek’s only other substantive claim of outrageous conduct is that the URA engaged in malicious actions against him. First, he contends that after he filed his discrimination charge with the Equal Employment Opportunity Commission (“EEOC”), the URA legal staff denied him all information normally given to employees. Yet, the record shows that Bartek was merely told that since he was pressing a lawsuit against the URA, all requests for information would be entertained only through the EEOC. Appellee’s App. at 428.
The second malicious act complained of was the decision made by Young to suspend Bartek for five days. Young testified that the reason for the suspension was that Bartek had approached him shouting that Young had bought his job and that Bartek wanted to know how he could also buy a job. Id. at 561. When Young told him to go back to work, Bartek shouted that the only reason Young had his position was because he was black. Id. at 562. While Bartek contends that he never made the alleged racial statement, and assuming ar-guendo that he did not, we nevertheless find that an employee’s shouting at a supervisor and ignoring his order to return to work is certainly insubordination, and thus legitimate grounds for a suspension.
On the basis of the record before us, we find that Bartek failed to proffer probative evidence of the alleged outrageous conduct on the part of the URA. Accordingly, we cannot sustain the award of liquidated damages in this case.
III.
Bartek appeals from the district court’s order denying his motion to alter or amend judgment on the basis (1) that the court erred in placing the burden of persuasion on Bartek to prove his entitlement to back pay after 1986; (2) that the court erred in failing to award back pay in count I after 1985 and in count VI altogether; and (3) that the court erred in not awarding him front pay. We review the district court’s fashioning of relief for abuse of discretion. Commonwealth of Pennsylvania v. Local Union 542, Int’l Union of Operating Engineers, 807 F.2d 330, 334 (3d Cir.1986). The court’s factual findings shall not be set aside unless clearly erroneous. Cooper v. Tard, 855 F.2d 125, 126 (3d Cir.1988); Fed. R.Civ.P. 52(a).
A.
With respect to his first argument, Bar-tek avers that the district court erred in not calculating back pay damages after December 31, 1986, when the position of Residential Finance Section Manager was eliminated pursuant to URA’s restructuring. Bartek contends that the district court erroneously placed upon him the burden of proving that a position comparable to that of Residential Finance Section Manager existed after its elimination. He asserts that Green v. USX Corp., 843 F.2d 1511 (3d Cir.1988), vacated on other grounds, — U.S.-, 109 S.Ct. 3151, 104 L.Ed.2d 1015 (1989), places the risk of speculation upon the employer who discriminated, and thus the URA should have had the burden of proving that no position comparable to that of the Residential Finance Section Manager existed after reorganization.
It is well settled that “[t]he risk of lack of certainty with respect to projections of lost income must be borne by the wrongdoer, not the victim.” Goss v. Exxon Office Sys. Co., 747 F.2d 885, 889 (3d Cir.1984) (citing Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 564, 51 S.Ct. 248, 251, 75 L.Ed. 544 (1931)). Our decision in Green followed that principle. There we held that the risks of speculation in an award of front pay was upon the employer, since it was the employer’s wrongdoing that had precluded victims of employment discrimination from positions for which they had applied. Id. at 1531-33.
While the risk of any speculation in the calculation of damages is upon the employer, the victim has the initial burden of identifying those positions upon which an award of damages is to be based. See Rodriguez v. Taylor, 569 F.2d 1231, 1239-40 (3d Cir.1977) (burden on individual dis-criminatee to identify those positions denied him), cert. denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978). It is undisputed that after Evenson resigned in August 1985, the position of Residential Finance Section Manager remained vacant throughout 1986. At the end of that year, that position was eliminated. Bartek argues, nevertheless, that back pay damages should have been awarded to him after 1986 based upon a position comparable to that of Residential Finance Section Manager. Yet, Bartek proffered insufficient evidence to support a finding that a similar position existed after URA’s reorganization. Therefore, we conclude that the district court did not abuse its discretion in denying Bartek back pay damages after 1986.
B.
Bartek’s second contention on appeal is that the district court erred in failing to count damages in count I after 1985, and in count VI altogether. With respect to count I, the court noted that the jury had found that Bartek was unlawfully denied the position of Administrator of Mortgage/HILP in January 1984. Evenson had instead filled that position. The jury had also found, in count V, that Bartek was unlawfully denied the Residential Finance Section Manager position, which Ms. Evenson was promoted to fill, in January 1985. As the court correctly pointed out, the only way to award back pay damages consistent with the jury findings would be to assume that Bartek would have been appointed Residential Finance Section Manager in January 1985. Therefore, the district court did not err in awarding Bartek back pay in count I only until the end of 1984.
With respect to the count VI, Bartek argues that the court erred in not awarding him back pay damages for the position of Manager of Multi-Family Programs that the jury found was discriminatorily denied him in July 1985. He contends that each count could have been a separate lawsuit, and although joined, each count remained a separate cause of action. We disagree. By seeking an amendment to add the additional counts, Bartek sought to have a jury examine the entire case as a whole. In so doing, the jury made factual findings and the district court had to make its award of back pay damages consistent with those findings. The court’s ruling that it had to assume, based on the jury’s verdict in count V, that Bartek would have been promoted to the Residential Finance Section Manager position in January 1985, and that back pay damages had to be based on that position for the years 1985 and 1986, was not an abuse of discretion.
C.
Finally, Bartek contends that the district court erred in denying him an award of front pay. We have held in the past that an award of front pay is appropriate where a victim of employment discrimination will experience a loss of future earnings because he or she cannot be placed in the employment position that was unlawfully denied. Maxfield v. Sinclair Int’l, 766 F.2d 788, 795-97 (3d Cir.1985), cert. denied, 474 U.S. 1057, 106 S.Ct. 796, 88 L.Ed.2d 773 (1986). Under the facts of this case, however, there was no position in existence that Bartek was being unlawfully denied at the time of judgment. The court found that the position of Residential Finance Section Manager was the last position that was discriminatorily denied Bartek. That position was eliminated at the end of 1986, and Bartek failed to identify a comparable position that existed after that time. Since Bartek was not precluded from a position that he was entitled to at the time of judgment, the district court correctly denied him front pay damages.
IV.
For the foregoing reasons, we will affirm the district court’s order of June 14, 1988, insofar as it denies the URA’s motion for judgment notwithstanding the verdict and a new trial. We will reverse that order, however, with respect to its denial of remit-titur of liquidated damages. Accordingly, we will vacate that portion of the district court’s judgment order awarding liquidated damages to Bartek. We will affirm the district court’s order of June 16, 1988, denying Bartek’s motion to alter or amend the judgment.
. For example, in EEOC v. Westinghouse Electric Corp., 869 F.2d 696, 711-14 (3d Cir.1989), petition for cert. filed, 57 U.S.L.W. 3755 (U.S. May 16, 1989) (No. 88-1770), we applied the Thurston standard to determine whether corporate pension and severance pay plans for retirement-eligible employees were in willful violation of the ADEA.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KERNER, Circuit Judge.
This appeal is from an order granting plaintiff a preliminary injunction.
Jurisdiction, which rests upon diversity of citizenship and the requisite amount in controversy, is not in dispute.
Plaintiff’s complaint alleges that plaintiff is conducting a business of selling news of sporting events under the name of “Washoe Publishing Co.” and that defendants are conducting a business of gathering and distributing sporting news under the name of “Continental Press Service"; that plaintiff employed Continental Press to gather news in the eastern part of the United States for distribution to his customers; that in July, 1943, agents of Continental Press approached plaintiff’s customers, represented to them that the news being distributed to them was being distributed by Continental Press and not by plaintiff, and that they should no longer pay plaintiff for such news; that as a consequence of such representations, customers have refused to pay plaintiff for the news distributed to them; that by said acts, defendants have injured plaintiff in his business and unless restrained will destroy his business; and that plaintiff therefore prays for an injunction, damages, and an accounting.
Another important phase of the complaint, which is not directly in issue on this appeal, was that in which plaintiff sought a preliminary injunction against Western Union Telegraph Company, alleging that plaintiff was the lessee of a Morse circuit of Western Union originating at St. Louis and terminating in various cities in the Rocky Mountain and Pacific Coast States where plaintiff’s customers were located. On the basis of averments in the defendants’ answer, supporting affidavits, and arguments, the District Court denied this injunction, finding that plaintiff’s contract with Western Union was properly terminated in August, 1942. Several affidavits and an exhibit of the contract between Western Union and Continental Press, offered by defendants, show that the telegraph facilities in question were leased to Continental Press in 1942.
Defendants filed a joint and several answer in which they allege that whatever news service plaintiff has rendered to customers since August 12, 1942, has been pursuant to an arrangement under which he purchased news from Continental Press Service and under which Continental delivered the news to the subscribers for such service; that Continental sells news to distributors located in various parts of the United States pursuant to oral contracts entered into between Continental and such distributors, said contracts being for three-month periods, the amounts thereof being determined at or about the commencement of each contract period; that in January, 1941, and from time to time thereafter, plaintiff entered into a contract with Continental whereby it sold news to him for distribution by him to subscribers in the Rocky Mountain and Pacific Coast States; that for the period beginning in April, 1943, plaintiff paid to Continental the sum of $3,-500 a week; that upon the expiration of the contract for this period, on or about July 3, 1943, Continental advised plaintiff that the charge would be $5,500 a week for the next three-month period and plaintiff continued to accept such service; that for the next two weeks plaintiff failed to pay for the service; that on July 15, 1943, and again on July 20, plaintiff notified Continental that he would not pay for the service; that Continental thereupon discontinued service to plaintiff, and on or about July 20, 1943, entered into an agreement with one Edward Maloney whereby Continental agreed to sell sporting news gathered by it to Edward Maloney at $5,500 a week and to deliver such news to customers of Maloney in the Rocky Mountain and Pacific Coast States.
Plaintiff filed an affidavit in support of his application for an injunction in which he said that he began to distribute news in the western part of the United States in 1939; that he had expended large sums in perfecting an organization for gathering such news and that he employed Continental Press Service to gather news east of the Mississippi; that he controlled the telegraph facilities till July 13, 1943, and that the change of the lease from him to Continental Press in August, 1942, was simply for billing convenience; that Edward Maloney, to whom Continental directed the customers to account, was his former employee; that Maloney is furnishing Continental Press Service news to affiant’s customers and has no customers of his own; and that the increased charge for the news ($5,500 in place ■ of the former $3,500 a week) was unjustified.
James M. Ragen, Jr., filed his affidavit in opposition to the application in which he stated that plaintiff did not commence the operation of a news distribution business in 1939, but that plaintiff was assigned as a distributor of Continental Press Service in May, 1940; that the news plaintiff gathered was at the request and under the direction, and at the expense of Continental Press Service; that plaintiff has not spent money in developing the news distributing business, but took over an established business when he was appointed distributor and continued to sell news to the same customers to whom his predecessor had sold; that the increased charge was justified because it depended upon the season when the service was furnished, the amount of news that was available, the cost of gathering the news, and the demand for the service; that Maloney was familiar with the territory and had long had contact with most of the subscribers for the service through his employment with another distributor of sporting news in the territory; that Maloney was paying $5,500 per week for the news; and that plaintiff at all times had full knowledge of the fact that the affiant had complete control of the telegraph facilities after August 12, 1942.
The fact that plaintiff refused to pay the price defendants asked for Continental Press Service news in July, 1943, is established by the affidavits of other witnesses produced by defendants. Plaintiff submitted no proof, by affidavit or otherwise, that he had offered to pay for this service or that he paid anything for the service during the two weeks prior to July 20, 1943.
After a hearing on the pleadings and the affidavits in support of and in opposition to the application for the injunction, the District Court concluded that “ * * * the Continental Press has improperly interfered with' the plaintiff’s business and customers and should be restrained from further conduct of that nature.” It was then decreed that the defendants and their agents and attorneys “be and they hereby are enjoined and restrained until the further order of this court from interfering with plaintiff’s business and customers and from approaching or causing to be approached the customers of plaintiff; and from in any manner or by any means furnishing or attempting to furnish news to plaintiff’s customers; from in any manner interfering with the plaintiff’s distribution of news to his customers; from intimidating or persuading plaintiff’s customers to cease doing business with the plaintiff; from notifying plaintiff’s customers that they should no longer deal with plaintiff; from notifying plaintiff’s customers that if they did deal with plaintiff, they would be deprived of all news service; from notifying plaintiff’s customers to cease making any payments to plaintiff; from directing or persuading plaintiff’s customers not to pay any moneys to plaintiff for news service heretofore or hereafter furnished to them by the plaintiff; from collecting from plaintiff’s customers any sums of money or other things from the furnishing of news service ; from notifying or telling plaintiff’s customers that unless all payments are made direct to said defendants individually or under the name of Continental Press, all distribution of news will be shut off, and that such customers will be deprived thereof; from representing to plaintiff’s customers that all of the business of plaintiff has been taken over by said defendants individually or under the name of Continental Press and from notifying plaintiff’s customers that they will be served by Continental Press and not by plaintiff; and from serving or attempting to serve plaintiff’s customers in said territory with news of any sort whatsoever, and from doing any other act or thing which would interfere with plaintiff’s customers and business.”
This injunctional order, which was entered September 28, 1943 and reinstated November 24, 1943, is now before us and our problem is to ascertain whether it was proper for the District Court to issue such an order.
In essence, what plaintiff seeks to accomplish by the injunction, is not to maintain the status quo, but rather to coerce defendants into giving him an exclusive franchise to use Continental Press Service as a means of controlling the business of subscribers for its service in the Rocky Mountain and Pacific Coast States.
In our freely competitive economy, there is no vested and indefeasible right to monopolize customers. Yet plaintiff asserts that the purchasers of this news service are his customers and seeks to exclude defendants from selling to them. Customers cannot be owned as plaintiff seeks to own them. Although plaintiff alleges that he had existing contracts with customers, he sets forth no contracts and furnishes no affidavit of a customer. Thus his naked allegation of existing contracts stands wholly unsupported. When those he claims were his customers were consulted in September, 1943, they replied that they wanted Continental Press Service news service continued and that the arrangements with the then distributor were satisfactory. There is no proof that plaintiff ever had a contract with a customer, except his uncorroborated statement, and the facts in the record seem to indicate that the most he could have had were parol contracts terminable at will.
These customers were interested in buying Continental Press news service, and there is nothing to show that they would be satisfied with any other news service. They-were buying Continental Press service before plaintiff was appointed distributor by Continental in 1940, and when plaintiff’s appointment as distributor was terminated, they stated that they Wanted to continue to receive Continental Press Service from the new distributor.
Since these customers were buying Continental news service, it seems clear that when plaintiff no longer had that service to sell, they ceased to be his customers. By refusing to pay for Continental service, plaintiff by his own conduct terminated whatever contracts he had with those who had been his customers. This is not to say that plaintiff may not make every effort to sell these customers some substitute for Continental service, but it seems clear that Continental’s agents may make a similar effort to sell Continental service to these customers.
Thus the order is defective because it is too broad and sweeping. It enjoins defendants “from in any manner or by any means furnishing or attempting to furnish news to plaintiff’s customers” and “from serving or' attempting to serve plaintiff’s customers in said territory with news of any sort whatsoever,” without identifying the customers whom Continental is prohibited from serving, on describing the news Continental is barred from furnishing, or limiting the restraint to unlawful acts of defendants. Without indicating what defendants may do in carrying on their normal business operations, the injunction prohibits them from doing acts which are usual and necessary in the business of gathering, editing, and distributing news. If plaintiff has other news to furnish to his customers and these customers are willing to take the other news, then plaintiff is not deprived of rights by defendants’ attempt to sell to the same customers. If plaintiff does not have other news to sell to these customers and refuses to buy the news of Continental on its terms, these customers cannot be deprived of news essential to their business simply because plaintiff has placed himself in a position where he cannot serve them.
A court of equity must exercise its discretion in such manner as to safeguard the interests of both parties, and, in certain circumstances, such as those in the instant case, it is an abuse of judicial discretion to issue an injunction which permits one party to obtain an advantage by acting, while the hands of the adverse party are tied by the writ. See Spring Valley Water Co. v. San Francisco, C. C., 165 F. 667, 709, 710. Thus, as the Supreme Court said in Russell v. Farley, 105 U.S. 433, 438, 26 L.Ed. 1060, a court of chancery should “ * * * regard the comparative injury which would be sustained by the defendant, if an injunction were granted, and by the complainant, if it were refused. * * * And if the legal right is doubtful, either in point of law or of fact, the court is always reluctant to take a course which may result in material injury to either party; * * It is apparent from this record that defendants receive more than twenty times as much net income per year as plaintiff from business operations in the territory in question. Moreover, Continental Press has spent thousands of dollars in developing its news service, and its good will must suffer impairment from a serious interruption of service. Thus the hardship inflicted is far greater by allowing the injunction than would be the hardship if there were no injunction. Accordingly, granting it involved a violation of the comparative injury principle.
Taking all the circumstances into consideration, including the fact that the only grounds for granting the injunction were to be found in the unsupported, contradicted and impeached affidavit of plaintiff, we do not think it can be said that plaintiff had established his right to the relief sought so clearly as to be reasonably free from doubt, so as to warrant an injunction prior to trial.
For the foregoing reasons, the preliminary injunction granted by the District Court will be dissolved.
It is so ordered.
On October 16, 1943, it was stipulated by the parties that the order for temporary injunction be vacated without prejudice to the rights of the parties. Pursuant to this stipulation an order was entered vacating the order of September 28, 1943. A pendente lite agreement had been entered into, under which the parties were operating at the time of the vacation of the order. But negotiations failed to result in a final determination or settlement, so plaintiff filed an application to reinstate the order of injunction of September 28, 1943. Defendants filed an answer thereto. Plaintiff made a reply by affidavit to the answer. A hearing was had, and at the conclusion thereof, the District Court ordered the reinstatement.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
PER CURIAM.
This is a petition for a decree enforcing an order of the National Labor Relations Board. Three questions are presented for our consideration: (1) Whether the respondent is subject to the provisions of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq.; (2) whether there was evidence justifying the finding of the Board that respondent had discriminated against three employees on account of union membership and activities; and (3) whether the portion of the order is justified which directs respondent to withdraw recognition from an employees’ association and disestablish it as a bargaining agency. We think that all of these questions must be answered in the affirmative.
On the first question, it appears that respondent is a corporation engaged in the manufacture of men’s shirts at Radford, Va. It employs about 450 persons; and its sales in 1933 were $663,086.57; in 1934, $1,267,791.99; and in 1935, $847,164.00. About 80 per cent, of the raw materials which it uses come from states other than Virginia and practically all of its products are shipped outside the state and are sold through its New York office. We may say of it, as we did of the Jeffery-De Witt Insulator Company, that “both with respect to its purchase of raw materials and its sale of finished products, it is engaged in interstate commerce, and its share of this commerce would be substantially burdened and interfered with by strikes among its employees, even .though these employees are engaged in manufacturing.” It is therefore subject to the provisions of the act. Jeffery-De Witt Insulator Co. v. National Labor Relations. Board, 4 Cir., 91 F.2d 134, 112 A.L.R. 948; National Labor Relations Board v. Friedmann-Harry Marks Clothing Co., 301 U.S. 58, 57 S.Ct. 645, 630, 81 L.Ed. 921, 108 A.L.R. 1352.
On the second question, the evidence is conflicting as to whether the three employees, Daphene, Sylvia, and Grace Ridpath were discharged because of their union affiliations and activities; but the Board has so found and the finding has substantial support in the evidence. Without reviewing this in detail, it is sufficient to say that there was evidence tending to show that respondent’s officials were hostile to the establishment of a union among its employees, that employees were threatened with loss of jobs if they should join the union and if they should not join the employees’ association, that these three girls were the first to join the union and that they, with two other employees, were selected for questioning about union membership, that the reasons given for their discharge are not convincing, and that the foreman who discharged them was not examined upon the hearing. It is well settled that the findings of the Board, if supported by substantial evidence, are binding upon the courts. National Labor Relations Board v. Washington, Virginia & Maryland Coach Co., 4 Cir., 85 F.2d 990, affirmed 301 U.S. 142, 57 S.Ct. 648, 81 L.Ed. 965; National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 58 S.Ct. 571, 576, 82 L.Ed. —.
On the third question, the Board has found that the respondent has dominated and interfered with the formation and administration of the employees’ association, and this finding is amply supported. There is evidence'that counsel for respondent obtained the charter for the association on a petition from the employees and that employees were solicited to sign the petition by one of _the foremen. There is evidence also that application cards were distributed to employees during working hours by a foreman, and that signatures were obtained in some cases under threats of discharge. The professed objectives of the association were to foster friendship, loyalty, and good will among the employees; but a shop committee was provided for and in fact appointed. There is no evidence, however, that it has ever functioned as a bargaining agency. The Board finds that the association was formed “for the purpose of canalizing the employees’ interest in collective action,” at a time when there was dissatisfaction growing out of an increase of working hours and a reduction of wages. Under the circumstances, we ’think that the order directing respondent to withdraw recognition from the association and disestablish it as a bargaining agency was justified. As said by the Supreme Court in the Pennsylvania Greyhound Lines case, supra:
“In view of all the circumstances the Board could have thought that continued recognition of the Association would serve as a means of thwarting the policy of collective bargaining by enabling the employer to induce adherence of employees to the Association in the mistaken belief that it was truly representative and afforded an agency for collective bargaining, and thus to prevent self-organization. The 'inferences to be drawn were for the Board and not the courts. Swayne & Hoyt, Ltd. v. United States [300 U.S. 297, 57 S.Ct. 478, 81 L.Ed. 659], supra. There was ample basis for its conclusion that withdrawal of recognition of the Association by respondents, accompanied by suitable publicity, was an appropriate way to give effect to the policy of the Act.
“As the order did not run against the Association it is not entitled to notice and hearing. Its presence was not necessary in order to enable the Board to determine whether respondents had violated the statute or to make an appropriate order against them. See General Investment Co. v. Lake Shore & M. S. R. Co., 260 U.S. 261, 285-286, 43 S.Ct. 106, 67 L.Ed. 244.”
Our conclusion is that the Board is entitled to a decree enforcing its order as entered.
Decree accordingly.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
KEARSE, Circuit Judge:
Plaintiff Sierra Club (“Sierra”) appeals from a judgment of the United States District Court for the Western District of New York, Michael A. Telesca, Judge, dismissing for lack of standing its suit against defendant' SCM Corporation (“SCM”) for discharge of excessive pollutants into a tributary of Wolcott Creek in Wolcott, New York, in violation of the Clean Water Act, 33 U.S.C. §§ 1251-1376 (1982) (the “Act”). In an opinion reported at 580 F.Supp. 862 (1984), the court held that Sierra lacked standing to bring suit under § 505 of the Act, 33 U.S.C. § 1365, because Sierra neither alleged that it suffered an appropriate “injury in fact” nor identified any of its members alleged to have suffered such injury. On appeal, Sierra argues principally that, as an organization committed to preventing unpermitted pollution of the aquatic environment, it has been given standing by the Act to bring suit, and that any requirement that it identify a Sierra Club member injured by SCM’s alleged pollution would violate that member’s First Amendment rights to privacy and freedom of association. SCM cross-appeals, urging that if we conclude that plaintiff has standing, we should reverse the district court’s denial of SCM’s motion under 33 U.S.C. § 1365(b)(1)(B) to dismiss on the ground that state proceedings on the same facts have deprived the federal court of jurisdiction. For the reasons below, we affirm the judgment of the district court, and we therefore dismiss the cross-appeal as moot.
I. Background
According to the complaint, Sierra is a national nonprofit conservation organization with more than 300,000 members dedicated to protecting natural resources, including water. SCM, through its Durkee Famous Foods Division (“Durkee”), owns and operates an onion and potato processing plant in Wolcott, New York. SCM has a National Pollutant Discharge Elimination System/State Pollutant Discharge Elimination System (“NPDES/SPDES”) permit, issued pursuant to § 402 of the Act, 33 U.S.C. § 1342, allowing it to discharge limited amounts of pollutants. The complaint alleged that SCM had repeatedly discharged into a tributary of Wolcott Creek pollutants in volumes exceeding those allowed by its permit.
Sierra predicated federal jurisdiction on § 505 of the Act, 33 U.S.C. § 1365, which authorizes a citizen to bring a suit in the district court "on his own behalf” against a person alleged to be in violation of the Act. Sierra set out its interest in the present suit as follows:
Members of the Sierra Club reside in New York, in the vicinity of the unnamed tributary of Wolcott Creek into which Defendant’s wastes are discharged, or own property or recreate in, on or near' the unnamed tributary of Wolcott Creek. The quality of the nation’s waters and the waters of the State of New York directly affects the health, economic, recreational, aesthetic, and environmental interest of the Sierra Club’s members. The interests of Sierra Club’s members have been, are being and will be adversely affected by the Defendant SCM Corporation — Durkee Famous Foods Division’s failure to comply with its NPDES/SPDES permit requirements.
(Complaint 1Í 7.) Sierra requested declaratory and injunctive relief; the imposition on SCM of civil penalties of $10,000 per day of violation, payable to the government; and an award to Sierra of costs, including fees for attorneys, witnesses, and consultants.
SCM moved to dismiss the complaint on the grounds, inter alia, that the court lacked jurisdiction by reason of the conclusion of state proceedings on the same facts. It asserted that prior to the present suit, the New York State Department of Environmental Conservation (“NYDEC”) had commenced an administrative proceeding against SCM resulting in the entry against SCM of a consent order resolving all of the violations alleged in Sierra’s complaint. SCM argued that Sierra’s action was thus precluded by § 505(b)(1)(B) of the Act, 83 U.S.C. § 1365(b)(1)(B), see note 1 supra, which provides that a private civil action may not be maintained if the appropriate state agency has commenced and is diligently prosecuting a civil action in state or federal court to require compliance with the Act.
The district court denied SCM’s motion to dismiss, in an opinion reported at 572 F.Supp. 828 (1983), and a number of procedural maneuvers followed. SCM sought certification of the jurisdiction issue for immediate appeal pursuant to 28 U.S.C. § 1292(b). Sierra responded with a motion for partial summary judgment on the issue of SCM’s liability. SCM then served on Sierra a set of “Interrogatories Related to Standing,” requesting identification of each Sierra Club member who resided, owned property, or recreated in the vicinity of the tributary; or whose health or economic, recreation, or aesthetic interests had been adversely affected by its pollution. For each person listed in response, SCM asked the dates and places of the uses made of the tributary and the manner in which SCM’s conduct had affected those uses. Sierra did not answer the interrogatories, but instead sought a protective order and moved for partial summary judgment on the standing issue. Sierra contended that the interrogatories were burdensome and irrelevant and would be moot upon the granting of Sierra’s motions for partial summary judgment.
In support of its motion on the standing issue, Sierra submitted the affidavit of its litigation coordinator, stating, inter alia, that more than 2,200 members of Sierra resided within 70 miles of the Durkee plant and that one Sierra member resided in Wolcott. Sierra also submitted copies of its bylaws and other materials describing its activities and the manner in which it decided to undertake litigation. In response, SCM argued that, as Sierra apparently did not intend to come forth with any factual showing of injury to itself or to identify any of its members claimed to suffer injury as a result of the alleged pollution, Sierra’s motion for summary judgment on the issue of standing should be denied, and summary judgment on that issue should be entered in favor of SCM., At oral argument, Sierra argued that it had standing because it was interested in preserving the environment, that harm to Sierra was shown simply by the failure of SCM to comply with the Act; and that Congress had given any person with an interest such as that of Sierra a right to sue any person alleged to have violated the Act. Sierra indicated that it did not intend to identify any of its members who might have been harmed by the alleged violation. After hypothesizing the burdens to any member so identified and subjected to discovery proceedings, counsel for Sierra responded as follows to probing by the court:
THE COURT: But there is no question that you haven’t identified the parties who are harmed, nor do you intend to.
MR. ROISMAN: Let me be clear about this Your Honor. Our position is that the parties who have been harmed do not have to be identified for any legitimate purposes the defendant has____
(Transcript of hearing, February 23, 1984, at 11.)
The district judge rejected Sierra’s arguments and ruled that it lacked standing to bring the suit. Relying on Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972), the court concluded that since “plaintiff has failed to show that any particular member of its organization has or may be adversely affected in any specific way by defendant’s actions,” Sierra’s assertions of injury in fact were unsupported. 580 F.Supp. at 865. Accordingly, the court denied Sierra’s motions for summary judgment. On the premise that “it would be a poor utilization of judicial resources to allow plaintiff yet another chance to come forward with” factual support, the court dismissed the complaint. Id. Sierra promptly appealed.
II. Discussion
On appeal, Sierra contends that Congress intended § 505 of the Act to confer standing on an organization such as Sierra to bring suit on the basis of its institutional interest in the preservation of the environment and that that institutional interest constitutes “injury in fact” within the meaning of standing doctrine. It also contends that any requirement that it disclose the names of members directly injured by the alleged pollution would violate the First Amendment rights of those individuals to privacy and freedom of association. SCM has cross-appealed, contending that the district court should have granted its motion to dismiss for lack of jurisdiction in light of the NYDEC consent order.
For the reasons below, we conclude that a genera] interest in environmental preservation as shown here by Sierra does not constitute injury in fact or satisfy the standing requirements of the Act. Any contention that Sierra is excused from making a proper showing of injury in fact by reason of the First Amendment rights of its members has been waived by Sierra’s failure to make such an argument in the district court. We thus affirm the dismissal of the complaint for lack of standing. We dismiss SCM’s cross-appeal as moot.
A. The Standing Requirement of § 505
The doctrine of standing in the federal courts delimits the persons who are permitted to challenge the legality of an act. The doctrine is informed by constitutional, prudential, and legislative concerns. The constitutional limits on standing are grounded in the requirement of Article III that the federal courts adjudicate only actual cases or controversies, e.g., Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 37-38, 96 S.Ct. 1917, 1923-1924, 48 L.Ed.2d 450 (1976), and such limitations require that the would-be plaintiff show injury in fact, i.e., “that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,” Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1607, 60 L.Ed.2d 66 (1979). Prudential concerns may further limit the class of those permitted to sue, as where “the judiciary seeks to avoid deciding questions of broad social import where no individual rights would be vindicated,” id. at 99-100, 99 S.Ct. at 1607-1608, and thus requires that the plaintiff’s injury be “peculiar to himself or to a distinct group of which he is a part, rather than one ‘shared in substantially equal measure by all or a large class of citizens,’ ” id. at 100, 99 S.Ct. at 1608 (quoting Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975)). . Finally, Congress may grant a right to sue to those who meet the constitutional limitations on standing but who might otherwise be barred by prudential limitations. Gladstone, Realtors v. Village of Bellwood, 441 U.S. at 100, 99 S.Ct. at 1608. Congress may not, however, “abrogate the Art. Ill minima: A plaintiff must always have suffered ‘a distinct and palpable injury to himself,’ ... that is likely to be redressed if the requested relief is granted.” Id. (quoting Warth v. Seldin, 422 U.S. at 501, 95 S.Ct. at 2206, and citing Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. at 38, 96 S.Ct. at 1924); accord Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472-73, 102 S.Ct. 752, 758-59, 70 L.Ed.2d 700 (1982).
Sierra contends that it has standing under § 505 of the Act. Evaluation of its contention requires consideration of whether the Act evinces an intention by Congress to confer standing on groups such as Sierra and whether such a bestowal, if inferrable, is consistent with the Article III minima.
Section 505(a) of the Act provides, in pertinent part, that “any citizen may commence a civil action on his own behalf” against a person alleged to have violated the Act. Section 505(g) provides that the term “citizen,” as used in § 505(a), “means a person or persons having an interest which is or may be adversely affected.” 33 U.S.C. § 1365(g). The legislative history of this provision, discussed in greater detail below, reveals that Congress intended these provisions to confer standing in accordance with the principles set out in the then-recent Supreme Court decision in Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972) (“Morton”).
In Morton, Sierra sought declaratory and injunctive relief against the proposed construction of recreational facilities in a quasi-wilderness park area. It brought its suit against the United States Secretary of the Interior under § 10 of the Administrative Procedure Act (“APA”), 5 U.S.C. § 702 (1982), which provided that “[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.” The injury alleged by Sierra was that the development of the recreational facilities “would destroy or otherwise adversely affect the scenery, natural and historic objects and wildlife of the park and would impair the enjoyment of the park for future generations.” Morton, 405 U.S. at 734, 92 S.Ct. at 1365. The Court had no doubt that this type of harm — i.e., injury to aesthetic and environmental well being, as contrasted with injury to economic interests — could amount to “injury in fact” sufficient to satisfy § 10 of the APA. 405 U.S. at 734, 92 S.Ct. at 1365. It concluded, however, that Sierra had not shown injury in fact because it had failed to allege that it or any of its members used the park or would be affected in any of their activities or pastimes by the proposed development. The Court stated that “the ‘injury in fact’ test requires more than an injury to a cognizable interest. It requires that the party seeking review be himself among the injured.” Id. at 734-35, 92 S.Ct. at 1365-66.
The Morton Court recognized that an organization whose members were injured could sue on their behalf; but it ruled that an organization whose members were not injured but merely interested could not:
[A] mere “interest in a problem,” no matter how longstanding the interest and no matter how qualified the organization is in evaluating the problem, is not sufficient by itself to render the organization “adversely affected” or “aggrieved” within the meaning of the APA. The Sierra Club is a large and long-established organization, with a historic commitment to the cause of protecting our Nation’s natural heritage from man’s depredations. But if a “special interest” in this subject were enough to entitle the Sierra Club to commence this litigation, there would appear to be no objective basis upon which to disallow a suit by any other bona fide “special interest” organization, however small or short-lived. And if any group with a bona fide “special interest” could initiate such litigation, it is difficult to perceive why any individual citizen with the same bona fide special interest would not also be entitled to do so.
The requirement that a party seeking review must allege facts showing that he is himself adversely affected does not insulate executive action from judicial review, nor does it prevent any public interests from being protected through the judicial process. It does serve as at least a rough attempt to put the decision as to whether review will be sought in the hands of those who have a direct stake in the outcome. That goal would be undermined were we to construe the APA to authorize judicial review at the behest of organizations or individuals who seek to do no more than vindicate their own value preferences through the judicial process.
Id. at 739-40, 92 S.Ct. at 1368-69 (footnotes omitted).
Shortly after the Supreme Court decided Morton, Congress passed the Clean Water Act. The standing provision of § 505 was fashioned by a Conference Committee, and the report of the Committee stated “the understanding of the conferees that the conference substitute relating to the definition of the term ‘citizen’ reflects the decision of the U.S. Supreme Court in the case of Sierra Club v. Morton.” S.Conf.Rep. No. 1236, 92d Cong., 2d Sess. 146, reprinted in 1972 U.S.Code Cong. & Ad.News 3776, 3823, and in 1 Senate Comm. on Public Works, 93d Cong., 1st Sess., A Legislative History of the Water Pollution Control Act Amendments of 1972, at 281, 329 (1973) [hereinafter cited as “Legislative History”].
The floor debate in the House regarding the Conference Report elaborated as follows:
The House bill — H.R. 11896 — severely restricted the citizen suit provision in its definition of the term “citizen.” This is noted on page 134 of the House committee’s report ... as follows:
Subsection (g) defines the term “citizen” to mean (1) a citizen of the geographic area having a direct interest which is or may be affected and (2) any group of persons which has been actively engaged in the administrative process and has thereby shown a special interest in the geographic area in controversy.
But the conferees, quite properly, abandoned this restrictive language in favor of language defining a citizen as “a person or persons having an interest which is or may be adversely affected.”
This language is based on section 10 of the Administrative Procedure Act, 5 U.S.C. 702, and the interpretation given to that section by the Supreme Court in Sierra Club v. Morton____ The case was decided in April 1972, 3 weeks after H.R. 11896 passed the House in March 1972 ....
In Sierra Club, the Supreme Court held that under the APA “the party seeking review” must himself be “among the injured” by the action or inaction complained of. Most importantly, the Court held that noneconomic injury to an environmental interest is sufficient to meet the APA test____
The conferees followed the Court’s opinion. A citizen suit may be brought under the conference agreement by those persons or groups which are among those whose environmental — that is, esthetic, conservational, ... — interest is or may be injured by a violation of the act or a failure to perform a duty under the act which is the basis of the suit.
1 Legislative History, supra, at 249-50 (remarks of Rep. Dingell).
The legislative history thus leads to the conclusion that § 505(g)’s definition of “citizen” as a “person or persons having an interest which is or may be adversely affected,” means those who can claim injury in fact within the meaning of Morton.
Sierra urges us to reach the contrary conclusion on the grounds, inter alia, that, in adopting § 505, Congress rejected the earlier House proposal that was more restrictive, and that a statement by Senator Muskie, chairman of the Senate Subcommittee on Air and Water Pollution, suggested that a person need only have an interest in the matter in litigation in order to bring suit. We have considered all of the arguments made by Sierra and find none of them persuasive.
The fact that the Conference rejected the House version, which would have permitted suits only by citizens of the geographic area who were directly affected or by groups that had been involved in administrative proceedings with respect to the challenged activity, did not mean that the Conference abandoned all restrictions. The Conference report and the floor statement set forth above plainly demonstrate that Congress was adopting the constraints set forth in Morton.
Sierra’s contention that Senators Muskie and Bayh “summarized the essence of Section 505 as it was agreed to in conference” (Sierra brief on appeal at 30) is likewise flawed. In support, Sierra quotes to us the following colloquy:
Mr. BAYH____ Would an interest in a clean environment which would be invaded by a violation of the [Act] or a permit thereunder — be an “interest” for purposes of this section?
Mr. MUSKIE. That is the intent of the conference ...
(Id.; ellipses in brief). Senator Muskie’s oral response did not end there, however. He stated as follows:
That is the intent of the conference, as I am sure the Senator from Indiana well knows. The conference report states:
“It is the understanding of the conferees that the conference substitute relating to the definition of the term “citizen” reflects the decision of the U.S. Supreme Court in the case of Sierra Club v. Morton (No. 70-34, April 19, 1972).”
In the Sierra Club case, the Supreme Court was asked to interpret section 10 of the Administrative Procedures [sic] Act — 5 U.S.C., section 702 — which contains wording similar to that of section 505(g) of the conference bill. The Supreme Court emphasized that “the interest alleged to have been injured may reflect aesthetic conservational and recreational as well as economic values.” The Court also said:
“Aesthetic and environmental well-being, like economic well-being, are important ingredients of the quality of life in our society, and the fact that particular environmental interests are shared by the many rather than the few does not make them less deserving of legal protection through the legal process.”
Thus it is clear that under the language agreed to by the conference, a noneconomic interest in the environment, in clean water, is a sufficient base for a citizen suit under section 505.
Further, every citizen of the United States has a legitimate and established interest in the use and quality of the navigable waters of the United States. Thus, I would presume that a citizen of the United States, regardless of residence, would have an interest as defined in this bill regardless of the location of the waterway and regardless of the issue involved.
1 Legislative History, supra, at 221 (emphasis added). Taken in context, we regard Senator Muskie’s remarks as endorsing the view that Congress was incorporating into § 505 Morton’s view of standing, i.e., that although the interest might be noneconomic, the plaintiff had to show that his own interest Was injured. Further, Senator Muskie made this view unmistakably clear in a written statement as follows:
In Sierra Club, the Supreme Court held that under the A.P.A. the party seeking review must itself be among those injured by the action or inaction complained of____ Thus under the language agreed to by the Conference a citizen suit may be brought only by those persons or groups which are among those whose interest (whether environmental or economic) is or may be injured by the violation of the Act which is the basis of the suit.
1 Legislative History, supra, at 161, 179 (written remarks of Senator Muskie to Senate upon presentation of Conference Report; emphasis added).
If there were a conflict between the remarks of a single legislator and the statement in the legislative committee’s formal report on enactment of the provision, we would regard the formal report as controlling. See Chrysler Corp. v. Brown, 441 U.S. 281, 311, 99 S.Ct. 1705, 1722, 60 L.Ed.2d 208 (1979). Here we regard both the Conference report and the views of Senator Muskie as consistently demonstrating that standing under § 505 was intended to be limited to those who can show that their interest, whether environmental or economic, is or may be injured by the alleged violation of the Act.
This interpretation of § 505 is supported by the ruling of the Supreme Court in Middlesex County Sewerage Authority v. National Sea Clammers Association, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981). There, in construing § 505, the Court stated that
it is clear that the citizen-suit provisions apply only to persons who can claim some sort of injury ____ “Citizen” is defined in the citizen-suit section of the [Act] as “a person or persons having an interest which is or may be adversely affected.” § 505(g), 33 U.S.C. § 1365(g). It is clear from the Senate Conference Report that this phrase was intended by Congress to allow suits by all persons possessing standing under this Court’s decision in Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). See S.Conf.Rep. No. 92-1236, p. 146 (1972).
Id. at 16-17, 101 S.Ct. at 2624-2625.
Accordingly, we conclude that Sierra could establish standing under § 505 only by showing actual injury within the meaning of Morton, by, for example, providing a concrete indication that Sierra or one or more of its members used the Wolcott Creek tributary or would be affected by its pollution. Sierra has, however, refused to come forward with any such showing, asserting only that it has members residing within a 70-mile radius of the tributary and one member living in Wolcott, and preferring to rest its standing claim on its contention that an injury to its interests is established by any violation of the Act. Here, as in Morton, “[t]he Club apparently regardfs] any allegations of individualized injury as superfluous, on the theory that this was a ‘public action involving questions as to the use of natural resources, and the Club’s longstanding concern with and expertise in such matters were sufficient to give it standing as a ‘representative of the public.’ ” 405 U.S. at 736, 92 S.Ct. at 1367 (footnote omitted). The Supreme Court squarely rejected this basis for standing, and we are constrained to do the same.
B. The First Amendment Claim
Sierra argues in this Court that it should be excused from having to identify any of its members whose interests have been or may be injured by the alleged violations on the grounds that such disclosure would pose an unreasonable burden by subjecting the members to depositions and court appearances and would thereby offend the members’ First Amendment rights to privacy and freedom of association. This contention need not detain us long, since Sierra did not raise it before the district court. Neither Sierra’s motion for a protective order permitting it to delay answering or objecting to the interrogatories served on it by SCM nor its arguments to the district court on the motions for summary judgment made any suggestion that Sierra was asserting a constitutional privilege. Sierra argued only questions of burden and relevance. The First Amendment contentions have thus been waived. See, e.g., United States v. Di Stefano, 555 F.2d 1094, 1100 n. 5 (2d Cir.1977); United States v. Rollins, 522 F.2d 160, 165 (2d Cir.1975), cert. denied, 424 U.S. 918, 96 S.Ct. 1122, 47 L.Ed.2d 324 (1976).
C. Appellate Relief
Finally, Sierra appears to urge that if we agree with the district judge's view that it has not shown standing, we should give Sierra an opportunity to provide additional information about its members in order to meet the injury in fact requirements. We decline to grant Sierra this relief. Sierra never indicated to the district judge that it would provide such information if the judge ruled that that was the only condition on which Sierra would be allowed to pursue this litigation. Indeed, on explicit questioning by the court during the oral argument of the summary judgment motions, Sierra’s counsel confirmed the court’s understanding that Sierra would refuse to provide such information. Nor did Sierra alter its stance after the court ordered the entry of summary judgment against it, by seeking a modification of the order to provide that Sierra could disclose the required information and thus pursue the suit. Instead, a week after the .order was entered, Sierra filed this appeal. We have little doubt that had Sierra requested such a modification of the order the district court would have granted it. Such an order, however, would not have been appealable, and we regard Sierra’s strategy of bypassing its opportunities to obtain relief in the district court and requesting such relief on appeal as an attempt to circumvent the final-judgment rule. We decline to reward such an attempt.
Conclusion
The judgment of the district court dismissing the complaint is affirmed. The cross-appeal is dismissed as moot.
. Section 505 of the Act, 33 U.S.C. § 1365, provides in part as follows:
§ 1365. Citizen Suits
(a) Authorization; jurisdiction
Except as provided in subsection (b) of this section, any citizen may commence a civil action on his own behalf—
(1) against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent per-, mitted by the eleventh amendment to the Constitution) who is alleged to be in violation of (A) an effluent standard or limitation under this chapter or (B) an order issued by the Administrator or a State with respect to such a standard or limitation, or
(2) against the Administrator where there is alleged a failure of the Administrator to perform any act or duty under this chapter which is not discretionary with the Administrator. The district courts shall have jurisdiction, without regard to the amount in controversy or the citizenship of the parties, to enforce such an effluent standard or limitation, or such an order, or to order the Administrator to perform such act or duty, as the case may be, and to apply any appropriate civil penalties under section 1319(d) of this title.
(b) Notice
No action may be commenced—
(1) under subsection (a)(1) of this section—
(A) prior to sixty days after the plaintiff has given notice of the alleged violation (i) to the Administrator, (ii) to the State in which the alleged violation occurs, and (iii) to any alleged violator of the standard, limitation, or order, or
(B) if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States, or a State to require compliance with the standard, limitation, or order, but in any such action in a court of the United States any citizen may intervene as a matter of right.
(2) under subsection (a)(2) of this section pri- or to sixty days after the plaintiff has given notice of such action to the Administrator,
except that such action may be brought immediately after such notification in the case of an action under this section respecting a violation of sections 1316 and 1317(a) of this title. Notice under this subsection shall be given in such manner as the Administrator shall prescribe by regulation.
* * * *
(g) Citizen
For the purposes of this section the term "citizen” means a person or persons having an interest which is or may be adversely affected.
. Sierra relies heavily on the decision in RITE-Research Improves the Environment, Inc. v. Costle, 650 F.2d 1312, 1319-21 (5th Cir.1981), for the proposition that the Act gave it standing to sue for any violation. The statements on which Sierra relies were based largely on the reasoning of the Third Circuit in the Sea Clammers case, which was thoroughly rejected by the Supreme Court. See 453 U.S. at 14-17, 101 S.Ct. at 2623-2625.
Sierra also argues that the Act confers upon it the status of a "private attorney general” who need not show injury in order to bring suit. This argument misunderstands the role of a private attorney general by confusing the question of the nature of the plaintiffs interest with the issue of whether injury to that interest has been shown. The Supreme Court pointed out in Sea Clammers that private attorneys general differ from other plaintiffs not because they need not show injury, as Sierra contends, but because their "injuries are ‘noneconomic’ and probably noncompensable.” 453 U.S. at 17, 101 S.Ct. at 2624. The Court made clear that even private attorneys general must show injury in fact, stating that "Congress intended the limitations imposed on citizen suits to apply to all private suits under the [ ] Act[ Id. (footnote omitted).
. Compare Morton, in which Sierra had refused to show injury in fact, with United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 678-81, 93 S.Ct. 2405, 2411-12, 37 L.Ed.2d 254 (1973), in which an environmental group challenged the enforcement of a railroad freight surcharge which, the group asserted, would prompt increased use of non-recyclable materials, resulting in, inter alia, a greater volume of refuse in a certain area. The Supreme Court recognized SCRAP’S standing, noting that the group claimed that its members used the area recreationally. Id. at 683-90, 93 S.Ct. at 2413-17.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
HAMLIN, Circuit Judge.
Jesse Louis Jones, appellant herein, was convicted after a jury trial of charges contained in two counts of an indictment filed in the District Court for the Southern District of California, charging a violation of 21 U.S.C. §§ 173, 176a (unlawful importation of marihuana and narcotics). The appeal was timely made and this court has jurisdiction under 28 U.S.C. § 1291.
The record shows that appellant, a Negro, was driving his car across the Mexico-United States border at the port of San Ysidro on December 30, 1966. He was accompanied by Joseph Raymond Scott, a Caucasian. The automobile was stopped at the first inspection station and appellant and Scott were asked if they were American citizens and if they were bringing anything from Mexico. They answered that they were citizens and that they were not bringing anything into the country. Appellant was then asked to open the trunk of the car. When he got out to do so the Customs Officer noted that he appeared to be under the influence of “alcohol or something.” In the trunk the Customs Officer noted that there were clothing and things. He then told appellant to drive the car over to the secondary inspection station. There appellant and Scott were taken inside and were searched. Marihuana, heroin and dexedrine were found on their persons. They were then arrested and their indictment followed. Scott was indicted with appellant but they were tried separately on Scott’s motion.
Appellant contends that he was arrested without probable cause at the border and that the resultant search therefrom was in violation of the Fourth Amendment. There is no merit to his contentions. We are not dealing here with a search incident to an arrest, but rather with a “border search.” In other words, the search does not have to rely upon the lawfulness of an arrest to make it valid, but rather it need only be reasonable under the circumstances.
Probable cause is not necessary to support a border search, but mere suspicion is sufficient. Rivas v. United States, 368 F.2d 703, 709 (9th Cir. 1966); Murgia v. United States, 285F.2d 14, 17 (9th Cir. 1960); Deck et al. v. United States, 9th Cir., 395 F.2d 89, May 7, 1968. In Bible v. United States, 314 F.2d 106 (9th Cir. 1963), cert, denied, 375 U. S. 862, 84 S.Ct. 131, 11 L.Ed.2d 89, this court held that defendant’s demeanor was sufficient to cause suspicion when the record only showed that “he appeared nervous.”
There is nothing in this record to show that the search of appellant was in any way unreasonable, and therefore the subsequent arrest was valid. There was no error in; the introduction of the seized evidence.
At the beginning of defendant’s case, his counsel made an offer to prove that Scott made a statement, at the time appellant and Scott were arraigned before the United States Commissioner, that the narcotics found on appellant were his and that he had secreted them in appellant’s coat.
The record shows that at the trial Scott was available to be called as a witness and was being held in a room next to the courtroom. The government prosecutor stated that he had no objection to Scott being called by appellant as a witness and that appellant’s counsel could talk with Scott in regard to his being called. Under these circumstances the court denied appellant’s motion to call the United States Commissioner as a witness. The record shows no attempt by appellant to call Scott as a witness.
The weight of authority is against the admission of hearsay evidence which is against a penal interest. E. g., Donnelly v. United States, 228 U.S. 243, 33 S.Ct. 449, 57 L.Ed. 820 (1913); Jeffries v. United States, 215 F.2d 225, 15 Alaska 83 (9th Cir. 1954). Many commentators have, however, criticized this rule stating that a statement against penal interests is as inherently reliable as is a statement against pecuniary interests. 5 Wigmore, Evidence (3d Ed.) §§ 1476, 1477; McCormick, Evidence, 549-53; Holmes, J., dissenting in Donnelly v. United States, 228 U.S. 243, 277, 33 S.Ct. 449, 57 L.Ed. 820. The state of California has, by both judicial decision and legislative enactment, provided that statements against penal interest are valid exceptions to the hearsay rule. People v. Spriggs, 60 Cal.2d 868, 389 P.2d 377, 36 Cal.Rptr. 841 (1964); California Evidence Code, section 1230. Assuming, arguendo, that we were to adopt the California rule of admissibility, the trial judge still did not err by refusing to allow the questioned evidence in the case at bar because it was not shown that the hearsay declarant was unavailable as a witness. While the California Supreme Court held in Spriggs that unavailability was not required for admission of the hearsay evidence, the legislature included this requirement in its codification of the rule of this case. California Evidence Code, section 1230. Likewise, Wigmore has stated that unavailability of the declarant is a requirement for the admission of a hearsay declaration against interest. 5 Wigmore, Evidence (3d Ed.) §§ 1455, 1456. Under the circumstances of this case, we see no error on the part of the district court in refusing to admit the offered evidence.
Appellant next contends that the court erred in instructing the jury concerning the language contained in sections 174 and 176a of Title 21 of the United States Code which generally provide that “whenever on trial for a violation of this section the defendant is shown to have or have had possession of the narcotic drug, such possession shall be deemed sufficient evidence to authorize conviction unless the defendant explains the possession to the satisfaction of the jury.” Appellant’s claim of material variance between this instruction and the indictment is without merit. There is no variance in that 21 U.S.C. §§ 174 and 176a are specifically cited in the title to the indictment as well as in the titles to counts I and II. Nor do we see any other error in the giving of the above instruction. Klepper v. United States, 331 F.2d 694, 702 (9th Cir. 1964); United States v. Armone, 363 F.2d 385 (2d Cir. 1966).
Finally, appellant contends that the provisions of 21 U.S.C. §§ 174 and 176a which deem possession sufficient for conviction unless the defendant explains the same to the satisfaction of the jury are unconstitutional.
This question has been decided adversely to appellant by this court in numerous cases in the past. Juvera v. United States, 378 F.2d 433 (9th Cir. 1967); Brown v. United States, 370 F. 2d 874 (9th Cir. 1966); Agobian v. United States, 323 F.2d 693 (9th Cir. 1963).
Judgment affirmed.
. Appellant herein stated in testifying, “Well, I guess I was a little tipsy. He [the Customs Inspector] must have noticed it.”
. Enacted 1965.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
JOHN R. BROWN, Senior Circuit Judge.
This ease presents the question, left unanswered by the Supreme Court in Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1971), of the appropriate remedy for a breach by the prosecution of a plea bargain agreement. Santobello left the .choice of remedy, within certain boundaries, to the discretion of the state court, “which [was] in a better position to decide [what] the circumstances of [the] case requirefd].” Id. at 263, 92 S.Ct. at 499, 30 L.Ed.2d at 433.
Although the Santobello Court did not identify the constitutional basis of the decision, its holdings are clearly of such proportions, since the Court would otherwise have had no jurisdiction over the defendant’s sentencing under New York statutes. We see no reason, therefore, to distinguish between the discretion to be afforded state and federal courts in breach-of-plea-bargain cases.
Santobello requires us to reverse and remand for resentencing or a vacated plea and new trial as the circumstances require. Id. Under our own breach-of-plea-bargain cases following Santobello, we find that the circumstances of this case do not require a new trial and that resentencing is an adequate, appropriate remedy.
How It All Began
Appellant Kurkculer was prosecuted for wire fraud in connection with a scheme to defraud merchants by ordering goods COD and paying United Parcel Service with phony certified or cashier’s checks.
Kurkculer and the government entered a plea agreement on December 18, 1988, under which Kurkculer was to plead guilty and the government was to recommend sentencing under the guidelines at level 13, and recommend the shortest sentence for that level — 12 months — if merchandise valued at $100,000 or more was returned.
Kurkculer pleaded guilty on December 19 to three counts of fraud under 18 U.S.C. 1343, and before sentencing he returned merchandise valued at about $132,500. The probation officer’s presentence report, however, suggested that a higher sentence level was warranted. Some of the reasons included evidence that Kurkculer had promoted similar schemes in other jurisdictions, and the probation officer’s opinion that, because Kurkculer had bargained for a lower sentence recommendation in exchange for his guilty plea and the return of the merchandise, he had not truly accepted responsibility for his actions.
In the first session of a three-part sentencing hearing on February 15, 1989, the prosecution recommended that Kurkculer be sentenced in accordance with the presen-tence report. The defense objected to the prosecution’s failure to make its recommendations in accordance with the agreement.
The hearing was continued, and on February 22, the defense moved that the matter be assigned to another judge for sentencing and that the prosecution be ordered to keep its agreement. The judge refused to recuse himself from the matter. The prosecution withdrew its original recommendation and now recommended a 12-month sentence under level 13 of the guidelines, as agreed. The defense renewed its motions, contending that the prosecution’s new recommendation was ineffective, since the judge had heard the original recommendation and understood that this was the prosecution’s “real” evaluation. The judge said that he was unaffected by the prosecution’s recommendations, and held that because of the new recommendation there was no breach of the plea agreement. The judge asked if the defendant wished to withdraw his guilty plea, but defense counsel continued to request recusal and specific performance of the agreement.
Finally, on March 3, Kurkculer was sentenced in accordance with the recommendations of the presentence report, to three years in prison on each of the three counts, to run concurrently. The court also increased Kurkculer’s sentence beyond the guideline range because of his “frivolous” objection to the presentence report.
Promises, Promises
The Supreme Court’s Santobello decision and our own decisions require more than good faith by the government in securing through plea bargaining a defendant’s waiver of constitutional rights. The government must keep its promises or the defendant must be released from the bargain. Thus, on remand Santobello’s possible remedies for a prosecutor’s breached agreement were specific performance or withdrawal of the bargained-for plea.
In Santobello, a prosecutor inadvertently breached a colleague’s earlier agreement to make no sentence recommendation, and instead recommended the maximum sentence. The sentencing judge stated for the record that he was not influenced by the prosecutor’s mistaken recommendation but rather by the presentence report, and sentenced the defendant to the maximum prison time.
The Santobello Court held that, “[Wjhen a plea rests in any significant degree on a promise or agreement of the prosecutor, so that it can be said to be part of the inducement or consideration, such promise must be fulfilled.” 404 U.S. at 262, 92 S.Ct. at 499, 30 L.Ed.2d at 433 (emphasis added).
The Court remanded for the state court “to decide whether the circumstances of this case require only that there be specific performance of the agreement on the plea, in which case petitioner should be sentenced by a different judge, or whether, in the view of the state court, the circumstances require granting the relief sought by petitioner, i.e., the opportunity to withdraw his plea of guilty.” Id. at 263, 92 S.Ct. at 499, 30 L.Ed.2d at 433 (emphasis added). The Court obviously considered withdrawal of the plea — Santobello’s preferred remedy — more extreme than resen-tencing.
It is at least suggested by the use of the word “only” and the phrase “or whether ... the circumstances require,” that specific performance by the government of the plea agreement is the minimum acceptable remedy, and it is clear that where specific performance is a sufficient remedy, the Supreme Court has held that such a defendant “should be sentenced by a different judge.” Id.
The Revolving Issues
The case at hand revolves around factors which distinguish it from Santobello. It is distinguishable from Santobello by the prosecutor’s retraction of his original recommendation followed by an acknowledgement and recitation of the agreed upon recommendation, and by the court’s offer to permit the defendant to withdraw his plea.
In Kurkculer’s sentencing, the prosecution withdrew its first recommendation, which was contrary to the plea agreement, and told the court that it was recommending sentencing in accordance with the agreement. Kurkculer argues that, since the judge was aware of the prosecutor’s original recommendation and would consider it as the prosecutor’s “real” opinion on the matter, the prosecutor’s attempt to remedy its breach was ineffective.
The trial judge stated that he was not influenced by the offending recommendation, and held that the prosecution’s retraction not only remedied the breach, but that there somehow was no breach at all. On appeal, it is not disputed that there was a breach.
The government contends however, that since the trial court offered Kurkculer the opportunity to withdraw his guilty plea and he declined, Kurkculer has waived all right to any remedy to the prosecution’s breach.
The questions then, are whether the prosecutor’s belated specific performance before the same judge was a sufficient remedy to his breach, and whether the defendant has waived any relief by declining to withdraw his plea when offered the opportunity to do so.
May a Defendant Choose His Remedy?
While not denying that Santobello affords a remedy for a government breach of a plea bargain, the government argues that Santobello does not afford a defendant a choice of remedy, and so by refusing the offered remedy, Kurkculer has waived any right he had to a remedy.
In his concurrence to Santobello, Justice Douglas recommends that “a court ought to accord a defendant’s preference considerable, if not controlling, weight inasmuch as the fundamental rights flouted by a prosecutor’s breach of a plea bargain are those of the defendant, not of the State.” Santobello, 404 U.S. at 267, 92 S.Ct. at 501, 30 L.Ed.2d at 436. Justice Douglas was the “swing” vote on this issue; three of the seven justices believed the defendant should be entitled to withdraw his plea if he chooses. Id. at 267-69, 92 S.Ct. at 501-02, 30 L.Ed.2d at 436-37 (Marshall, Brennan & Stewart, JJ., concurring in part and dissenting in part). Thus a majority of the Court would afford at least substantial deference to a defendant’s preference for vacating a plea. Id. at 268 n. *, 92 S.Ct. at 502 n. *, 80 L.Ed.2d at 437. This arithmetic inference, however, should not be confused with the law of the case, which is that the court, not the defendant, chooses the remedy-
Petitioner cites Correale v. United States, 479 F.2d 944 (1st Cir.1973), apparently to support a preference for the relief requested by the defendant. But in Correale, the defendant abandoned a claim for vacating his plea and such an option was not offered by the trial court. In Corréale, we determined that, where the defendant, as here, sought resentencing and not the opportunity to withdraw his plea, specific performance could not always be provided by remanding to a different judge for re-sentencing. We observed that in Santobel-lo, unlike Corréale, the defendant had been released on bail and had not begun to serve his sentence, and that therefore the Court had no reason to consider any other means of providing specific performance. The Court in Santobello left appropriate relief to the discretion of the state court and stated that “what is reasonably due in the circumstances ... will vary.” Santobello, 404 U.S. at 262, 92 S.Ct. at 499, 30 L.Ed.2d at 433.
In Corréale, the prosecution had agreed to recommend that a federal sentence run concurrently with a state sentence. While the promised recommendation was given, the sentence was illegal and thus unfulfillable. 479 F.2d at 947 n. 3. Because it was impossible to give the defendant the benefit of the agreement by remanding for re-sentencing (the benefit being the possibility that the judge could choose to act in accordance with the recommendation), and because the defendant had already served the state sentence plus 17 months of his original federal sentence, we considered it “hollow to remand for resentencing” with a recommendation that the sentences run concurrently. Id. at 950. We determined that “the only just remedy and the only one which could now approximate specific enforcement of the agreement” would be a sentence that resulted in the defendant’s release. Consequently, we remanded the case with instructions to impose a suspended sentence that would achieve the same result. Id.
We used our equitable power in Corréale to remand with instructions to impose a specific sentence in order to achieve specific performance of the agreement. Such an equitable remedy is extraordinary, however, depriving the trial court of its discretion in sentencing, and instead giving the prosecutor the power to sentence. Obviously we do not take such action lightly. Santobello does not require courts to impose sentences as recommended, but only requires that the prosecutor keep its promise to make recommendations even though they are not binding on the court. Although the defendant in Corréale received the remedy he requested, the case does not stand for the proposition that the defendant’s preference necessarily prevails. Thus, even in Corréale, we followed the Santobello rule that the court chooses the remedy.
In a later case, also asserting our power to impose a specific sentence on appeal, we chose the same remedy, but it was not the one preferred by the defendant. In United States v. Garcia, 698 F.2d 31 (1st Cir.1983) [hereafter Angeles Garcia ], unlike Corr-éale, the defendant asked to vacate her guilty plea and the government asked that she be resentenced to time served. We said, “Where withdrawal of the plea or specific performance would be meaningless or infeasible, a court may order imposition of a specific sentence. Correale v. United States, supra, 479 F.2d at 950; accord United States v. Bowler, supra, 585 F.2d [851] at 856 [ (7th Cir.1978) ].” 698 F.2d at 37. The defendant had served her sentence and been released on parole. We held that resentencing would serve no useful purpose and, because of the defendant’s age, the unfairness to both parties of a trial, the less than egregious error of the prosecutor and the strength of the case, we ordered the trial court to resentence the defendant to the amount of time served. “[W]e are persuaded that further proceedings are not in the interests of justice.” Id.
Waive Goodbye
The prosecution argues without using the word “waiver,” that because Kurkculer declined the opportunity to withdraw his plea, instead seeking specific performance of the agreement before another judge, that he is entitled to no relief.
Santobello and its First Circuit progeny do not address the question of whether and how a defendant may waive the right to a remedy for the government’s breach of its bargain. Of course, it may be possible to waive the remedy, just as one waives the right to a trial and other constitutional rights by pleading guilty pursuant to a plea bargain. An effective waiver of the remedy would reaffirm the defendant’s waiver of the rights originally waived by pleading guilty. Thus, at a minimum, such a waiver must, like a guilty plea, be “knowing and voluntary.”
Because we find that Kurkculer did not knowingly and voluntarily waive the right to a remedy to the breach, we need not determine whether the right may be waived, and what, if any, additional conditions to such a waiver are required. Even if Kurkculer waived any right to withdraw his plea, it cannot reasonably be assumed that he also knowingly and voluntarily waived any remedy, since he clearly continues to request the lesser remedy suggested by the Court in Santobello.
The Court in Santobello did not leave room for the defendant to inadvertently lose his due process rights, and to sacrifice his right to a trial to an unfair and unfulfilled bargain; instead it requires us to determine what remedy is “required.” Santobello, 404 U.S. at 263, 92 S.Ct. at 499, 30 L.Ed.2d at 433.
May the Court Choose, Over Kurkculer’s Objection, To Vacate His Guilty Plea?
Santobello requires that the breach be remedied and gives the choice of remedy to the court. Because Kurkculer has not waived a remedy but is not entitled to a choice of remedy, and because he prefers specific performance to the vacated plea offered by the trial court, we must determine whether the court may choose to vacate his guilty plea over his objections on remand.
This court has repeatedly expressed a preference for specific performance of the agreement by resentencing before a different judge rather than vacating pleas. Once that is done, a defendant “will obtain all he says he was promised and can then have no right to withdraw the plea.” McAleney v. United States, 539 F.2d 282, 286 (1st Cir.1976).
The case at hand is unusual in that the defendant prefers resentencing to vacating his plea. Santobello and our cases which refused to give the defendant a choice of remedy reached that result where the defendant wanted his plea vacated.
While the Court in Santobello did leave the choice of remedy to the state court on remand, the trial court was to determine whether the circumstances “require[d]” the greater remedy of a withdrawn plea or “only” specific performance. Id.
In determining what the circumstances require, we bear in mind that although the trial court is not required to accept a guilty plea, it has less discretion once a plea has been accepted.
We addressed the question of whether a district court may vacate a guilty plea over a defendant’s objection once it has been accepted, in United States v. Cruz, 709 F.2d 111 (1st Cir.1983). In Cruz, the trial judge accepted a bargained-for guilty plea, then rejected the plea on the basis of information contained in the presentence reports of the defendant and two codefendants, and then recused himself.
We held that the district judge’s actions contravened Fed.R.Crim.P. 11(e) (Plea Agreement Procedure), and Rule 32(c) (Pre-sentence Investigation), and that a guilty plea may not be set aside on the basis of information in a presentence report concerning something short of fraud on the court. Id. at 114-15.
Fed.R.Crim.P. 11(e) allows the court to accept or reject a guilty plea, or to defer its decision until it has had the opportunity to review the presentence report. See United States v. Blackwell, 694 F.2d 1325, 1338 (D.C.Cir.1982). The court may choose the latter, however, only if it has the defendant’s permission to review the presen-tence report. Fed.R.Crim.P. 32 provides that, “Except with the written consent of the defendant the report shall not be submitted to the court unless the defendant has pleaded guilty or nolo contendere or has been found guilty.” Fed.R.Crim.P. 32(c)(1).
We agreed with the reasoning of Blackwell: “Rule 11 appears to speak unequivocally; if the plea is accepted, the judge does not announce any deferral of that acceptance, and the defendant adheres to the terms of the bargain, all parties to it are bound.... [T]he mere postponement of sentencing itself to a future date does not authorize the judge to remake or vacate the plea bargain for whatever reasons later seem appropriate to [the judge]. [694 F.2d] at 1339.” Cruz, 709 F.2d at 115.
Rule 32 was modified to permit the court to see the presentence report prior to accepting a guilty plea — but only with the defendant’s permission — in response to Gregg v. United States, 394 U.S. 489, 89 S.Ct. 1134, 22 L.Ed.2d 442 (1969) which held that submission of presentence report to the court before the defendant pleads guilty or is convicted “constitutes error of the clearest kind,” Id. at 492, 89 S.Ct. at 1136, 22 L.Ed.2d at 446, because the reports contain “hearsay and facts that are collateral to the central issue of the defendant’s guilt or innocence in the instant case, [so] a trial court’s exposure to the report could seriously prejudice the defendant.” Cruz, 709 F.2d at 115.
Thus, in Cruz, the court’s action in vacating a guilty plea after reviewing a presen-tence report “undermined the protection afforded the defendant by Rules 11 and 32.” Id.
In Kurkeuler's sentencing hearing, the court did not, nor is it purported to have relied on the presentence report in offering to vacate the plea. Rather, the opportunity to withdraw the plea was offered because of the prosecution’s breach of its plea bargaining agreement. Nonetheless, if the plea is rejected over Kurkeuler’s objections, he will be similarly denied the protection of Rules 11 and 32 because the judge has reviewed the presentence report without Kurkeuler’s consent before the defendant has pleaded (guilty) or been convicted — unless he is tried by a different judge. Thus, under Santobello and the Rules the court must choose which remedy is “required:” a vacated plea and trial or mere resentenc-ing. We hold that specific performance by resentencing is all that is required in this case.
Specific performance is feasible and is a lesser burden on the government and defendant. Further, permitting a judge to vacate a plea over defendant’s objection on breach by the prosecution allows the government to back out of its agreement at will and obtain a trial. Given nothing more than the prosecutor’s breach, the circumstances do not “require” a new trial. Thus we hold that the facts of this case do not compel vacating Kurkculer’s guilty plea over his objections.
Was the Breach Corrected at Trial?
The defendant complains that the prosecutor’s corrected recommendation is ineffective because the judge is aware of the government’s “real” position on the sentencing and will be improperly influenced by the original recommendation. The trial court held that the breach was corrected by the later recommendation.
Neither of these arguments is in accordance with Santobello. The Court in Santo-bello nowhere suggested that a mere withdrawal of the offending recommendation with substitution of the agreed recommendation would have been a sufficient remedy. While no such attempt was made in Santobello, its futility is suggested by the Court’s comment that “at this stage the prosecution is not in a good position to argue that its inadvertent breach of agreement is immaterial.... That the breach of agreement was inadvertent does not lessen its impact.” 404 U.S. at 262, 92 S.Ct. at 499, 30 L.Ed.2d at 433. Cf. United States v. Brown, 500 F.2d 375 (4th Cir.1974) (holding that where prosecutor promised to recommend a particular sentence, the mere half-hearted recitation of a suggested sentence would not satisfy the plea agreement).
Furthermore, the majority in Santobello found it irrelevant whether the judge was actually influenced by the breach. 404 U.S. at 262, 92 S.Ct. at 498, 30 L.Ed.2d at 433. In Corréale, this court determined that, “The reason [that the impact on the judge is irrelevant] is obvious; it is the defendant’s rights which are being violated when the plea agreement is broken or meaningless. It is his waiver which must be voluntary and knowing. He offers that waiver not in exchange for the actual sentence or impact on the judge, but for the prosecutor’s statements in court. If they are not adequate, the waiver is ineffective.” 479 F.2d at 949 (emphasis added).
We therefore hold that under Santobello a remedy is required and that resentencing is an appropriate remedy.
In a footnote to Corréale, we echoed Santobello's requirement that a new judge resentence, although finding that “unusual circumstances” made the requirement inapplicable. 479 F.2d at 950 n. 6. A different judge was not needed in Corréale because we ordered imposition of a specific, suspended sentence.
Time and tide wait for no man. As in Angeles Garcia, Kurkculer has already served more time than the government agreed to recommend, and he is scheduled to be released soon. Consequently, although the court would not have been bound by the government’s recommendation, it is now, as in Corréale, impossible for the court to choose to act in accordance with the bargained-for recommendation on remand. Thus, as in Corréale, it would be “hollow to remand for resentencing” before a new judge who would be given the agreed-upon recommendation by the government. 479 F.2d at 950. Therefore, as in Corréale, we remand for resentenc-ing with specific instructions to the court. As in Angeles Garcia, where the defendant had served her sentence and had been released on parole, we order resentencing to time served — plus the supervised release, fine, special assessment and restitution ordered in the original sentence. As we stated in Corréale, a new judge is not needed to carry out such an order.
In light of this disposition, we need not decide the merits of Kurkculer’s assertions that the trial court improperly applied the sentencing guidelines.
AFFIRMED. THE SENTENCE IS VACATED AND THE CAUSE IS REMANDED.
. See 404 U.S. at 258, 92 S.Ct. at 496, 30 L.Ed.2d at 431 (Burger, J., for the plurality); see also id. at 266-67, 92 S.Ct. at 501, 30 L.Ed.2d at 436 (Douglas, J., concurring) (“This is a state case over which we have no ‘supervisory’ jurisdiction. ... I ... favor a constitutional rule....").
. E.g., Correale v. United States, 479 F.2d 944, 947 (1st Cir.1973) (“We must reverse, not because of any lack of good faith, but only because the most meticulous standards of both promise and performance must be met by prosecutors in plea bargaining."). See also United States v. Hogan, 862 F.2d 386, 388 (1st Cir.1988) (quoting with approval an opinion of the district court for Rhode Island — the same court from which Kurkculer now appeals: " ‘Santobello and its progeny proscribe not only explicit repudiation of the government’s assurances, but must in the interests of fairness be read to forbid end-runs around them.’ United States v. Voccola, 600 F.Supp. 1534, 1537 (D.R.I.1985).’’). But cf. United States v. Ramos, 810 F.2d 308, 313-14 (1st Cir.1987) (recommendations need not be made "enthusiastically’’).
. Santobello’s prosecutor did not withdraw his recommendation, which breached an agreement to make no recommendation at all.
. No such offer was made to Santobello. This in fact was the relief he sought.
. We are reluctant to reverse the trial court on this factual issue. See, e.g., Panzardi-Alvarez v. United States, 879 F.2d 975, 987 (1st Cir.1989) ("The trial judge makes the factual determination of whether there has been a breach of the plea agreement. United States v. Gonzalez-Sanchez, 825 F.2d 572, 578 (1st Cir.), cert. denied, 484 U.S. 989, 108 S.Ct. 510, 98 L.Ed.2d 508 (1987). We will not reverse this determination, therefore, unless clearly erroneous. Id."), cert. denied, - U.S. -, 110 S.Ct. 1140, 107 L.Ed.2d 1045 (1990). It is clear error to say that no breach ever occurred.
. See 18 U.S.C. § 3553.
. See, e.g., United States v. Garcia, 694 F.2d 294, 296 (1st Cir.1982) [hereafter Francisco Garcia ] (where trial court refused to hear government recommendation and defendant requested plea be vacated, resentencing was held appropriate); McAleney v. United States, 539 F.2d 282, 286 (1st Cir.1976) (where defendant relied on misinformation from his attorney regarding bargain prosecutor had not actually offered and trial court vacated plea, court of appeals permitted government option of giving before a new judge the recommendation relied upon by defendant if it could do so in good faith, thereby limiting defendant’s remedy to resentencing); Mawson v. United States, 463 F.2d 29, 31 (1st Cir.1972) (where government was silent when plaintiff disavowed existence of bargain but pleaded guilty, and plaintiff sought “various forms of relief," resentencing was ruled appropriate).
. Santobello, 404 U.S. at 262, 92 S.Ct. at 498, 30 L.Ed.2d at 498; In re Arvedon, 523 F.2d 914, 916 (1st Cir.1975); Fed.R.Crim.P. 11.
. To the extent that Cruz relied on a double jeopardy analysis and is inconsistent with Ohio v. Johnson, 467 U.S. 493, 104 S.Ct. 2536, 81 L.Ed.2d 425 (1984), it has been disapproved by this court. United States v. Santiago Soto, 825 F.2d 616 (1st Cir.1987).
. See Fed.R.Crim.P. 32(c)(1); United States v. Sonderup, 639 F.2d 294, 296 (5th Cir.), cert. denied, 452 U.S. 920, 101 S.Ct. 3059, 69 L.Ed.2d 426 (1981); United States v. Harris, 635 F.2d 526, 528 (6th Cir.1980), cert. denied, 451 U.S. 989, 101 S.Ct. 2326, 68 L.Ed.2d 847 (1981).
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
TIMBERS, Circuit Judge:
The defendants in the district court in this action were Samuel R. Pierce, the Secretary of the United States Department of Housing and Urban Development (“the Secretary” or “HUD”) and BHAP Housing Development Fund Company, Inc. (“BHAP”), a non-profit corporation organized for the purpose of constructing a facility for the elderly in Brooklyn. The Secretary is the sole appellant/cross-appel-lee. The plaintiffs in the district court were C.H. Sanders Co., Inc. and Bristol Construction Corp. (collectively “Sanders”), a joint venture; they are the appel-lees/cross-appellants in this Court.
The Secretary appeals from that part of a judgment entered September 25, 1989, in the Eastern District of New York, I. Leo Glasser, District Judge, which granted Sanders’ motion for summary judgment on its first cause of action which sought foreclosure of a mechanic’s lien filed by Sanders. The judgment also denied the Secretary’s motion for summary judgment which would have dismissed Sanders’ entire complaint. Sanders cross-appeals from that judgment to the extent that it denied Sanders’ motion for summary judgment on its second cause of action which sought direct enforcement of an arbitration judgment against HUD and granted the Secretary’s cross-motion for dismissal of that claim for lack of subject matter jurisdiction.
On appeal, HUD claims that granting summary judgment on the lien foreclosure claim is error due to several outstanding issues of material fact and due to the court’s flawed construction of the New York Lien Law. On cross-appeal, Sanders claims that, not only is there federal subject matter jurisdiction over the second cause of action relating to the arbitration award, but that HUD has consented to the suit in the district court.
For the reasons which follow, we affirm on HUD’s appeal which relates to the lien foreclosure claim, and we reverse and remand on Sanders’ cross-appeal which relates to enforcement of the arbitration judgment.
I.
We summarize only those facts and prior proceedings believed necessary to an understanding of the issues raised on appeal.
This action arises out of the construction and renovation of a federally funded housing project known as the Brooklyn Home for Aged People (“the Project”), located at 1095 St. John’s Place, Brooklyn, New York, which BHAP owned. BHAP is essentially a non-profit, assetless, community organization organized specifically for the Project. It obtained funding for the Project from HUD under § 202 of the National Housing Act, 12 U.S.C. § 1701q (1988), pursuant to which HUD agreed to provide a low-cost mortgage in the amount of $4,364,100. In return, HUD received a security interest in the property and retained substantial control over the Project. To implement their agreements, on or about December 14, 1981 BHAP and HUD executed a building loan agreement, building loan mortgage, and mortgage note and regulatory agreement.
That same day, simultaneous with the execution of the agreements referred to above, BHAP entered into a construction contract (“the Agreement”) with Sanders as general contractor, under which Sanders agreed to furnish all services and materials necessary to complete the Project. The Agreement, which was prepared by HUD, required that all claims and disputes be resolved by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association. Although the Secretary was not a party to the Agreement, HUD was given substantial control over the Project, including the right to interpret the Agreement itself and “to determine compliance therewith.” In addition, BHAP agreed to use HUD forms as a condition for obtaining the HUD mortgage loan.
Sanders worked on the project for several years, although the actual date that it halted work is unclear. In any event, on January 17, 1986, Sanders requested arbitration, claiming that BHAP breached the Agreement. Sanders sought to recover $1,848,010 claimed to be due under the Agreement, representing a contract balance ($212,045), extra work performed at the request of BHAP ($121,353), and additional costs for labor and materials furnished to the Project. BHAP counterclaimed for $1,974,506.94, claiming that the work performed by Sanders was inadequate and defective. On January 21, 1986, Sanders filed a Notice of Mechanic’s Lien in the amount of $1,161,528 in the Kings County clerk’s office, pursuant to N.Y.Lien Law §3 et seq. (McKinney’s 1966).
Sanders could not compel HUD to submit to arbitration as HUD was not formally a party to the contract. Prior to the arbitration hearings, however, by letters dated August 26, 1986, October 8, 1986, and November 6, 1986, counsel for Sanders advised HUD of the scheduled hearings and requested HUD’s participation therein, stating that HUD could be held liable for any arbitration award rendered against BHAP. HUD declined. It stated that it considered the arbitration to be “essentially a private dispute” between BHAP and Sanders.
On April 23, 1987, after six hearings, the arbitrators found for Sanders and awarded $406,000, plus interest from April 1, 1985. In a decision dated October 1, 1987, the New York Supreme Court confirmed the award, which totaled $502,328.86 with interest and costs.
In November 1987, Sanders commenced the instant action. The complaint alleged two causes of action. The first sought foreclosure of Sanders’ mechanic’s lien in the amount of the arbitration award, claiming priority over HUD’s mortgage because of HUD’s admitted failure to comply with the provisions of the lien law. The second cause of action sought direct enforcement of the arbitration award against HUD, claiming that, since BHAP was organized as a “shell” corporation without assets, HUD was liable under general equitable principles.
On April 8, 1988, Sanders moved for summary judgment on the ground that there were no genuine issues of material fact relevant to the disposition of either cause of action. HUD cross-moved for summary judgment, seeking dismissal of both causes of action. By a separate cross-motion, HUD sought dismissal of the second cause of action on the ground that the district court lacked subject matter jurisdiction.
On July 20,1989, the district court granted summary judgment in favor of Sanders on the first cause of action, holding that Sanders was entitled to foreclose on its lien in the amount of the arbitration award as confirmed. It based its decision on its finding that BHAP in effect was HUD’s alter ego.
The court dismissed the second cause of action, holding that it lacked subject matter jurisdiction to entertain Sanders’ direct claim against HUD.
This appeal followed.
II.
We turn first to the question whether the district court erred in dismissing Sanders’ second cause of action for lack of subject matter jurisdiction. At the outset, we observe that an action against the sovereign is properly before the district court only if there was both a grant of subject matter jurisdiction and a valid waiver of sovereign immunity. Falls Riverway Realty v. City of Niagara Falls, 754 F.2d 49, 54 (2 Cir.1985); S.S. Silberblatt, Inc. v. East Harlem Pilot Block — Building 1 Housing Development Fund Co., 608 F.2d 28, 35 (2 Cir.1979). We consider these issues separately.
(A)
We must determine whether the district court had subject matter jurisdiction to consider Sanders' second cause of action for direct enforcement against HUD of the state court judgment which confirmed the arbitration award. Sanders contends that the district court had “federal question” jurisdiction pursuant to 28 U.S.C. § 1331 (1988). It asserts that enforcement of the judgment claim “arises under” § 202 of the National Housing Act, 12 U.S.C. § 1701q (1988), and requires the application of federal common law. We agree.
Our analysis begins with the substance of Sanders’ second cause of action. Sanders sought a monetary recovery from HUD in the amount of the state court judgment on the ground that, since HUD was liable for the debts of its assetless creation (BHAP), it was bound by the award rendered in the arbitration proceeding between BHAP and Sanders. Under federal common law, Sanders contended, it had “equitable rights generated by HUD’s course of activities pursuant to federal statutes, including the contracts it has sponsored, and prescribed for others, as a condition of federal aid.” Trans-Bay Engineers and Builders, Inc. v. Hills, 551 F.2d 370, 377 (D.C.Cir.1976).
The district court granted the Secretary’s motion to dismiss the enforcement claim, holding that it lacked subject matter jurisdiction. The court correctly rejected 12 U.S.C. § 1702 as a basis for subject matter jurisdiction over the enforcement claim. Séction 1702, as the court observed, is only a waiver of sovereign immunity and not an independent grant of jurisdiction. Mundo Developer, Ltd. v. Wicklow Associates, 585 F.Supp. 1324, 1327 & n. 6 (S.D.N. Y.1984) (citing cases). In considering federal question jurisdiction under 28 U.S.C. § 1331, however, the court merely stated that we have declined to follow the “equitable rights” theory embraced by the D.C. Circuit in Trans-Bay, supra, 551 F.2d at 370. See Falls Riverway, supra, 754 F.2d at 54 n. 3 (declining to follow this “vague formulation”). But our analysis does not end there.
The gist of Sanders non-contractual claim is that HUD failed in its duties under 12 U.S.C. § 1701q, and as a result was unjustly enriched. Restitution for unjust enrichment is not provided by federal statute. Its availability is part of the federal common law relating to statutory violations. Silberblatt, supra, 608 F.2d at 37; Trans-Bay, supra, 551 F.2d at 381. While a “vague formulation” of equitable rights alone will not confer subject matter jurisdiction, Falls Riverway, supra, 754 F.2d at 54 n. 3, that is not the case here. Rather, Sanders, “simply by alleging a cause of action, not patently frivolous on its face, that purportedly arises under a federal statute, ha[s] made allegations sufficient to sustain subject matter jurisdiction in the district court.” Id.; see also Bell v. Hood, 327 U.S. 678, 682 (1946).
Although we have declined to follow Trans-Bay’s “equitable rights” theory to invoke federal question jurisdiction, Falls Riverway, supra, 754 F.2d at 54 n. 3, we have permitted the assertion of quantum meruit claims against HUD where the plaintiff was in privity with only the HUD-assisted shell corporation and where subject matter jurisdiction otherwise was present. Silberblatt, supra, 608 F.2d at 37 (citing Trans-Bay); see also Niagara Mohawk Power Corp. v. Bankers Trust Co. of Albany, N.A., 791 F.2d 242, 244-45 (2 Cir.1986) (applying Silberblatt). In Silberblatt, since jurisdiction was predicated on the federal defendant removal statute, 28 U.S.C. § 1442(a)(1) (1988), we found it unnecessary to address the question whether there was jurisdiction under § 1331. Our decision in Silberblatt, however, makes clear that Sanders’ claim based on unjust enrichment is plausible and thus is sufficient to invoke federal question jurisdiction.
We hold that the district court had federal question jurisdiction over Sanders’ second cause of action, arising under federal common law and the statute authorizing the loan. 12 U.S.C. § 1701q.
(B)
We turn now to the question, not reached by the district court, whether HUD has consented to suit in the district court. Spe-eifically, the question is whether the Tucker Act, 28 U.S.C. §§ 1846, 1491 (1988), displaces an otherwise valid exercise of federal question jurisdiction in the district court and places jurisdiction over Sanders’ direct claim against HUD exclusively in the United States Claims Court. The Secretary’s contention on Sanders’ cross-appeal is that it does.
The Tucker Act provides both subject matter jurisdiction and sovereign immunity for non-tort claims “against the United States ... founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States.” § 1346(a)(2). On its face, the Tucker Act permits such actions in the district courts only when the amount sought is $10,000 or less. Id. The Claims Court, however, may entertain such actions without regard to the amount in controversy. § 1491(a)(1). The Secretary reads this statutory scheme to place exclusive jurisdiction over Sanders’ enforcement of judgment claim in the Claims Court. We disagree. We hold that an action (regardless of the amount sought) may be commenced under § 1331 in the district court provided there is an independent waiver of sovereign immunity outside the Tucker Act.
The Tucker Act does not expressly state that the jurisdiction of the Claims Court is exclusive. We find that omission significant. In reaching our decision, we find support in the analysis in Ghent v. Lynn, 392 F.Supp. 879 (D.Conn.1975) (Newman, J.). Judge Newman explained the simple reason many courts have held that actions against the government for an amount above $10,000 are within the exclusive jurisdiction of the Claims Court:
“Most claimants against the government rely on the Tucker Act for the waiver of sovereign immunity that would otherwise preclude their suits. When such a claimant attempts to sue in a district court ... he encounters the Tucker Act’s $10,000 maximum, and his claim therefore fails as an unconsented suit against the sovereign. Hence it is commonly said that suits against the government for more than $10,000 are in the exclusive jurisdiction of the Court of Claims.... In fact, the jurisdiction of the Court of Claims is not exclusive; rather, there is rarely any statute available that waives sovereign immunity for suits in the district court, other than the Tucker Act with its $10,000 limit.”
Id. at 881 (citations omitted) (emphasis added); see also Falls Riverway, supra, 754 F.2d at 55 n. 4 (agreeing with this aspect of the Ghent analysis). In other words, the Tucker Act provides merely one limited waiver of sovereign immunity. If Sanders were relying on the grant of jurisdiction provided by the Tucker Act, it would encounter the $10,000 limitation on actions commenced in district courts and its enforcement of the judgment claim necessarily would fail. § 1346(a)(2). Since we have held that the district court has § 1331 jurisdiction over Sanders’ claim, however, it may be asserted in the district court provided there is an independent waiver of sovereign immunity outside of the Tucker Act.
Our decisions in B.K. Instrument, Inc. v. United States, 715 F.2d 713 (2 Cir.1983), and Estate of Watson v. Blumenthal, 586 F.2d 925 (2 Cir.1978), relied upon by the Secretary, do not change our analysis. In Watson, we said that jurisdiction of the Claims Court over plaintiff’s contract claim was exclusive, but we were careful to say “on these facts exclusive.” 586 F.2d at 929. That is because, other than the Tucker Act, no other statute waived sovereign immunity. In B.K. Instrument, we dealt with the question whether the 1976 amendment to the Administrative Procedure Act (“APA”), 5 U.S.C. § 702 (1988), constituted a waiver of sovereign immunity. We held that it did. 715 F.2d at 724-25. That provision provided, however, that, if “any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought,” the waiver would be inapplicable. We then considered whether plaintiff’s action could have been brought in the Claims Court and concluded it could not. Id. at 726-27. Within that context, Judge Friendly suggested in dictum that the combination of § 1491(a)(1) and § 1346(a)(2) “could well be considered an implied proscription” against bringing a suit in the district court that could have been brought in the Claims Court. Id. at 726. He suggested this only as an arguable position. Accordingly, we find that B.K. Instrument, which considered only the claim that § 702 of the APA waived sovereign immunity, does not control here.
(C)
We next must determine whether there was a waiver of sovereign immunity by HUD outside of the Tucker Act. Sanders suggests two sources. We need address only one.
Section 1701q, the statute which confers subject matter jurisdiction in this action, vests in the Secretary “the functions, powers, and duties set forth in section 402 of the Housing Act of 1950.” § 1701q(b). Section 402 contains a “sue and be sued” clause. Originally § 402 was codified at 12 U.S.C. § 1749a. In 1986 the section (which relates to a college housing loan program) was transferred to the Education title of the United States Code. The “sue and be sued” clause is now located at 20 U.S.C. § 1132g-l(c)(2) (1988).
The fact that § 402 was transferred is not relevant to our holding. Indeed, even had § 402 been repealed subsequent to its incorporation in § 1701q(b), that repeal would be irrelevant absent any indication by Congress that its action was intended to alter the remaining statute as well. Hassett v. Welch, 303 U.S. 303, 314 (1938).
We hold that the Secretary’s immunity to suit in the district court has been waived.
(D)
We remand this second cause of action to the district court for a determination of the merits. In addition to the foregoing, we suggest one further instruction. If the court determines that HUD is liable for the arbitration award, it need not engage in a further analysis of the source of the funds that would be used to satisfy its judgment —i.e., from general Treasury funds or funds within the discretion and control of the Secretary. The court should simply direct the Secretary to satisfy the judgment out of funds that are within his control, assuming, of course, that such funds exist. It is only as to such funds that the Secretary’s immunity has been waived. See F.H.A. v. Burr, 309 U.S. 242, 250-51 (1940); Silberblatt, supra, 608 F.2d at 36.
III.
This brings us to the lien cause of action. In contrast to the enforcement cause of action, there is no serious dispute here that there is both subject matter jurisdiction and waiver of immunity. 28 U.S.C. § 2410 (1988). We address briefly HUD’s various arguments in support of its contention that the district court erred in permitting Sanders to foreclose on its mechanic’s lien.
HUD asserts that there are genuine issues of material fact as to the elements necessary to establish a valid mechanic’s lien. It argues that summary judgment was improper because its defenses were based in part on documentary evidence in Sanders’ possession. It fails to demonstrate, however, that such evidence would change the result. Its assertions are merely conclusory and must be rejected. Section 10 of the Lien Law requires that a mechanic’s lien be filed within eight months from the date the lienor last furnished materials. This provision has been construed to include remedial work if done pursuant to the contract, but not if done pursuant to a later guarantee to repair. Since there was no such guarantee, Sanders’ work, which continued at least until June 5, 1985, ended less than eight months prior to the January 21, 1986 filing date.
HUD also asserts that the lien is invalid because Sanders intentionally exaggerated its amount when it was filed. In New York, merely filing a lien that is greater than the eventual judgment will not invalidate the lien; the lienor must know that the amount is false and must intend to exaggerate. Howdy Jones Constr. Co. v. Parklaw Realty, Inc., 76 A.D.2d 1018, 429 N.Y.S.2d 768 (3 Dep’t 1980), aff'd, 53 N.Y.2d 718, 439 N.Y.S.2d 354, 421 N.E.2d 846 (1981). In this light, HUD’s proof fails even to hint at willfulness.
HUD makes an assertion that relates to the preceding cause of action; i.e., whether HUD is bound by the arbitration award and therefore by the lien. The district court’s holding that HUD is bound by both is correct. HUD is collaterally es-topped from challenging the award. In New York, collateral estoppel requires (1) identity of issues in the two proceedings, and (2) that the party sought to be es-topped had a full and fair opportunity to contest the prior determination. Kaufman v. Eli Lilly and Co., 65 N.Y.2d 449, 455-56, 492 N.Y.S.2d 584, 588, 482 N.E.2d 63, 67 (1985). With respect to the first prong, it is clear that the issue is identical: liability under the building contract. With respect to the second prong, a party will be bound if the issue previously was contested vigorously by its privy. Gramatan Home Investors Corp. v. Lopez, 46 N.Y.2d 481, 486, 414 N.Y.S.2d 308, 311, 386 N.E.2d 1328, 1331 (1979). The district court not only found that HUD and BHAP were in privity, but that they were alter egos. This was based on earlier decisions that held similarly with respect to HUD control of assetless, non-profit shell corporations. E.g., Niagara Mohawk Power Corp. v. Bankers Trust Co., 791 F.2d 242, 245 (2 Cir.1986); Silberblatt, supra, 608 F.2d at 40-41.
Since HUD was aware of the possibility of arbitration (and indeed demanded it by requiring that the contract form be one pre-printed by HUD) and repeatedly was given notice of the arbitration as well as an invitation to participate, the doctrine of “vouching-in” also serves to bind HUD. Fidelity and Deposit Co. v. Parsons & Whittemore Contractors Corp., 48 N.Y.2d 127, 131-32, 421 N.Y.S.2d 869, 871-72, 397 N.E.2d 380, 383 (1979) (where alter ego is aware of arbitration clause and has notice of proceedings, it can be bound). To the extent that the rule in SCAC Transport (USA), Inc. v. S.S. “Dañaos”, 845 F.2d 1157 (2 Cir.1988), differs, we find it inapplicable. The basis of jurisdiction in SCAC Transport apparently was admiralty. In any event, the opinion does not purport to invoke New York law.
HUD further asserts that the contract in question is one "for public improvement” under the Lien Law. In New York, mechanic’s liens are not valid as against real property that is the subject matter of such contracts. HUD asserts this claim for the first time on appeal. We “ ‘will not reverse a summary judgment on the basis of arguments not presented below unless our failure to do so will result in a possible miscarriage of justice.’ ” Republic Nat’l Bank v. Eastern Airlines, Inc., 815 F.2d 232, 240 (2 Cir.1987) (quoting Radix Org. v. Mack Trucks, Inc., 602 F.2d 45, 48 (2 Cir.1979)). Since there is no reason that HUD could not have raised this defense in the district court, there is no miscarriage of justice. In any event, BHAP does not appear to be a “public benefit corporation” within the meaning of New York law, since its profits, if any, do not inure to the state or its citizens—a prerequisite to enjoying protection from mechanic’s liens on real property.
IV.
To summarize:
We reverse the judgment of the district court to the extent that it held that it did not have subject matter jurisdiction over the cause of action which sought to enforce the arbitration award against HUD. We hold that the court did have jurisdiction and that HUD waived its immunity to suit. We therefore remand that cause of action to the district court for a determination of the merits of Sanders’ claim.
We affirm the judgment of the district court to the extent that it held that Sanders was entitled to foreclose its mechanic’s lien against HUD.
Affirmed in part; reversed and remanded in part.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
B
|
songer_crossapp
|
What follows is an opinion from a United States Court of Appeals. Your task is to determine whether there were cross appeals from the decision below to the court of appeals that were consolidated in the present case.
HEANEY, Circuit Judge.
Robert Tull petitions this Court to review and reverse an order of the National Transportation Safety Board (NTSB) which denied Tull a third-class medical certificate. We affirm the NTSB, without prejudice to the right of petitioner to make further evi-dentiary showings or to pursue alternative administrative waivers or exemptions, as indicated herein.
The petitioner has experienced progressive rheumatoid arthritis since 1963, eventually resulting in replacement of both hips and both knees with artificial joints. Treatment appears to have arrested the progression of the arthritis and, in 1978, the petitioner applied for a third-class medical certificate, a prerequisite to obtaining a private pilot’s license from the FAA. See 14 C.F.R. 61.103(c). Such an applicant has the burden of establishing that he meets the medical fitness requirements under 14 C.F.R. § 67.17(f)(2). See 49 C.F.R. 821.25. An FAA medical examiner denied the petitioner’s application; an administrative law judge (ALJ), after a hearing, reversed and approved the application; and the NTSB reversed the ALJ, effecting a denial of the application. The issue before us is whether there is substantial evidence on the record as a whole to support the NTSB’s determination that the petitioner has not carried his burden. We think there is.
The evidence before the ALJ ostensibly consisted of the testimony of the petitioner, petitioner’s doctor, a flight instructor, the Administrator’s doctor and various medical records. The petitioner’s doctor testified that Tull’s condition had improved substantially and was largely under control. He also detailed his opinion as to the degree of functional use of various of petitioner’s joints and broadly classified petitioner’s condition as halfway between Class II and Class III, as defined by the American Rheumatism Association. The flight instructor had flown a test flight with the petitioner and essentially found him physically capable of operating a plane within private pilot standards. This test flight, however, did not include simulated emergency conditions. Pet. Br. at 14.
The Administrator’s doctor, who is also a licensed pilot, testified that the petitioner was not medically fit to safely fly a plane, an opinion based largely on review of the medical records and the testimony of petitioner’s doctor. Much of the testimony of the Administrator’s doctor was flatly contradicted by the flight instructor’s actual observations under normal flight conditions, although there is little direct evidence of ability to handle emergency conditions.
There is no doubt that the petitioner has some difficulty in terms of grip strength and in terms of strength and flexibility of certain joints. The ALJ found that the petitioner has residual limitations, but also that the testimony of petitioner’s doctor and the flight instructor was more persuasive on the issue of ability to safely operate a plane. We tend to agree, but need not reach this issue because the NTSB did not make a contrary factual conclusion. The Board’s decision was based on the evidence as to the petitioner’s physical ability to handle emergency conditions:
We are reluctant to conclude that petitioner is medically fit without the results of a more comprehensive flight check covering the full range of emergency conditions a pilot may encounter and is expected to successfully deal with. Therefore, we conclude on the basis of this record that petitioner has not met his burden of establishing entitlement to a medical certificate.
NTSB Order No. EA-1576, at 7 (March 11, 1981).
Thus, the issue is whether there was substantial evidence to support the Board’s determination with respect to emergency conditions. The test flight taken here did not include simulation of such conditions, see Pet.Br. at 14, and there was competent testimony that such conditions might require strength, flexibility and quick reflexes to a degree more demanding than under normal flight conditions. The record as a whole does offer substantial evidence which creates doubts as to the petitioner’s condition, although such doubts were largely dispelled with respect to normal flight conditions. We cannot say, however, that there is no substantial evidence on which doubts could persist as to the petitioner’s ability to handle emergency conditions.
We therefore must affirm the decision of the NTSB. In doing so, we emphasize that there is no prejudice to the petitioner’s right to make further evidentiary showings as to his ability to handle simulated emergency conditions. As we view the record and the order of the NTSB, a sufficient showing on this issue would then entitle the petitioner to a medical certificate, absent new issues or other evidence. There also is no prejudice to the petitioner’s right to pursue alternative administrative waivers or exemptions, as indicated by the NTSB.
The petition is denied and the order of the NTSB is affirmed without prejudice.
. The record indicates that the petitioner held a commercial pilot’s license at some point prior to the arthritis difficulties.
. Class II refers to persons who can perform “adequate or normal activity, despite a handicap, discomfort or limitation of motion at one or more joints;” Class III refers to those who are “limited to little or none of the duties of usual occupation or self care.” Pet.Br. at 5.
. See NTSB Order No. EA-1576, at 7, n.15.
Question: Were there cross appeals from the decision below to the court of appeals that were consolidated in the present case?
A. No
B. Yes
C. Not ascertained
Answer:
|
A
|
songer_crossapp
|
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