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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. W. S. HATCH CO., INC., Respondent. No. 71-2930. United States Court of Appeals, Ninth Circuit. Feb. 1, 1973. Robert Giannasi, Atty. (argued), Eugene B. Granof, Jan Weinberg, Attys., Marcel Mallet-Prevost, Asst. Gen. Counsel, Peter G. Nash, Gen. Counsel, NLRB, Washington, D. C., Roy O. Hoffman, Director, NLRB, San Francisco, Cal., for petitioner. Samuel L. Holmes (argued), of Angel, Adams & Holmes, San Francisco, Cal., for respondent. Kenneth Silbert, of Brundage, Ney-hart, Grodin & Beeson, San Francisco, Cal., for charging party. Before JERTBERG, DUNIWAY and TRASK, Circuit Judges. DUNIWAY, Circuit Judge: The National Labor Relations Board petitions for enforcement of its order, 190 NLRB No. 122, requiring the W. S. Hatch Company (the Company) to bargain with the Union upon request, as required by section 8(a) (5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(5). We enforce. On July 6, 1970, the Union petitioned •for an election among the employees at the Company’s Pittsburg, California plant. On July 23, the parties waived the representation hearing provided for by the Act, section 9, 29 U.S.C. § 159, and executed a Stipulation for Certification Upon Consent Election to be held at the Company’s plant on August 10. Because of the nature of the Company’s business — hauling—it could not estimate the number of employees who would be available to vote on August 10. The Acting Regional Director requested that the election be conducted by mail ballot. Not being compelled to agree, the Company refused, but gave its assurance that efforts would be made to have all employees available at the plant during the voting time. The Acting Regional Director approved the stipulation, and the election proceeded as scheduled. However, of the thirteen employees in the bargaining unit, only seven could vote on August 10, and only six voted. One employee had been transferred out of state and five others were away on work assignments. After the voting, the agents of the Acting Regional Director impounded the six ballots east without counting them. On August 19, being unable to obtain the Company’s consent to amend the stipulation to permit the remaining employees to vote by mail ballot, the Acting Regional Director rescinded his approval of the stipulation, vacated the election, and ordered a representation hearing pursuant to sections 3(b) and 9(c) of the Act, 29 U.S.C. §§ 153(b), 159(c). Also on August 19, apparently before it received the Acting Regional Director’s order, the Company wrote to him protesting his refusal to tally the ballots. This letter was forwarded to the Board, which treated it as a request to review the order and denied it “without prejudice to renewal in the representation proceeding scheduled for hearing on September 3, 1970.” However, the Company refused to participate in that hearing, appearing for the sole purpose of contesting the Acting Regional Director’s authority to order it. The Regional Director affirmed the action of the Acting Regional Director and ordered a mail ballot election for October 26, 1970, which was won by the Union by a vote of 8 to 4. On November 11, the Company filed a petition with the Board asking it to tally the votes of the first election. The petition admitted that five employees had been absent from the plant because of work assignments, alleged that the sixth employee had been transferred at his own request, and argued that the election was nonetheless valid. The Board denied this petition, and the Regional Director certified the Union as the bargaining representative of the employees. The Company refused to bargain with the Union, which filed unfair labor practice charges against the Company. The Company’s answer admitted its refusal to bargain, but alleged that it had no duty to bargain, challenging the validity of the second election on the grounds set out in its November 11 petition. The Board’s General Counsel moved for summary judgment and the Board transferred the case to itself for consideration of this motion. In its response to the motion the Company alleged for the first time that three of the five employees absent on work assignment on August 10 had either requested such assignment or were prevented from returning to the plant by mechanical failures. Noting that this evidence was neither newly discovered nor unavailable at the time of the representation hearing, the Board refused to reopen the issue of the validity of the first election, and granted the General Counsel’s motion. Its subsequent order is the subject of this petition. It is Board policy to set aside elections when a significant number of employees have not had the opportunity to vote, and its power to do so is beyond question. Congress has entrusted the Board with a wide discretion in conducting and supervising elections. See NLRB v. A. J. Tower Co., 1946, 329 U.S. 324, 330-331, 67 S.Ct. 324, 91 L.Ed. 322. This Court has held that: “Such discretion includes the determination of whether or not the opportunity afforded all eligible voters to exercise their rights was sufficiently ‘adequate’ or ‘equal’ as to reflect accurately the ‘majority’ required by the statute.” International Telephone & Telegraph Corp. v. NLRB, 9 Cir., 1961, 294 F.2d 393, 395. The Board has delegated broad authority to the Regional Director to conduct and supervise elections, see 29 C.F.R. § 101.21; thus he is vested with the same discretion. The Company does not dispute these general principles. It argues that the Acting Regional Director had no authority to set the first election aside under the particular facts of this case. This is so, it' says, because that election was conducted pursuant to a Stipulation for Certification Upon Consent Election, and was therefore subject to the limitations provided in 29 C.F.R. § 102.62(b). That regulation states in relevant part: “(b) Where a petition has been duly filed, the employer and any individuals or labor organizations representing a substantial number of employees involved may, with the approval of the regional director, enter into an agreement providing for a waiver of hearing and a consent election leading to a determination by the Board of the facts ascertained after such consent election, if such a determination is necessary.” From this language the Company argues that the Acting Regional Director was “bound” by the terms of the stipulation, which said nothing regarding giving all employees an opportunity to vote, and that his role was limited to that of “an employee of the Board conducting the election.” It concludes that only the Board could set the election aside. The Board has not taken such a circumscribed view of the role of the Regional Director in conducting consent elections. In Super Valu Stores, Inc., 1969, 179 NLRB 469, a union filed a petition for an election among certain employees only hours before a consent election was to be held pursuant to a stipulation between the employer and another union. Following the election, the Regional Director ordered the ballots impounded without tallying them. Later, he rescinded approval of the stipulation and vacated the election. In sustaining this action, the Board stated: “Implicit in the Regional Director’s authority to approve consent election agreements is his authority to revoke that approval when he determines that changed circumstances, discovered prior to the counting of the ballots, warrant such revocation.” 179 NLRB at 469. This interpretation of section 102.62(b) is not plainly erroneous, and we are therefore bound by it. See Immigration and Naturalization Service v. Stanisic, 1969, 395 U.S. 62, 72, 89 S.Ct. 1519, 23 L.Ed. 2d 101. The Super Yalu Stores principle supports the Acting Regional Director’s action in this case. The stipulation expressly provided that the election was to be conducted “in accordance with the . applicable procedures and policies of the Board,” one of which was that all eligible employees should have an opportunity to vote. Cf. NLRB v. A. J. Tower Co., supra, 329 U.S. at 333-334, 67 S.Ct. 324. Furthermore, the Company had assured the Acting Regional Director that it would make every reasonable effort to have all of its employees at the plant during the voting period. Even if we were to assume that such efforts were made and that the specific reasons for the absence of some of the employees were facts which, if proved, would affect application of the Board’s policy, thus requiring a determination by the Board under the terms of section 102.62(b), the Company did not allege these facts until the unfair labor practice proceeding. The Acting Regional Director did not abuse his discretion in rescinding approval of the stipulation and vacating the first election without tallying the ballots. Next, the Company argues that the Board should not have granted the General Counsel’s motion for summary judgment. Primarily, it attacks the Board’s use of its rule against re-litigation, 29 C.F.R. § 102.67(f), to prevent it from presenting to a trial examiner evidence that it failed to introduce in the representation hearing. It is settled in this Circuit that the Board may grant summary judgment in an unfair labor practice proceeding when no material factual issue exists. NLRB v. Red-More Corp., 9 Cir., 1969, 418 F.2d 890, 892; NLRB v. E-Z Davies Chevrolet, 9 Cir., 1968, 395 F.2d 191, 193. Thus, if section 102.67(f) is valid and was properly applied, the Company’s argument must fail. The Company would draw a line between what it calls the “investigative” functions of the Board and its “adjudicatory” functions. Under its scheme, representation proceedings fall within the former category, and unfair labor practice proceedings within the latter. Because representation proceedings are specifically exempted from the formal requirements of the Administrative Procedure Act, see 5 U.S.C. § 554(a)(6), matters litigated there must always be re-litigated in an unfair labor practice hearing where a refusal to bargain is charged. Any other procedure would in essence deny the party charged a hearing and hence violate due process. The argument is elaborately spun, but we- are not persuaded. The Board’s order relating to the Company’s August 19 letter specifically invited it to raise matters relating to the validity of the first election in the representation hearing. There it could have presented evidence, examined witnesses under oath, and submitted briefs. Establishing such a record would have fully preserved its right to judicial review of the Regional Director’s determination. Thus, the requirements of due process were more then satisfied. NLRB v. MarSalle, Inc., 1970, 138 U.S.App.D.C. 135, 425 F.2d 566, 571-573; NLRB v. Union Brothers, Inc., 4 Cir., 1968, 403 F.2d 883, 886-887. Moreover, section 102.67(f) serves a valuable purpose in the Board’s administration of the Act. Contrary to the Company’s assertion, the series of proceedings designed to effectuate the employees’ right to bargain collectively through a representative of their own choosing, beginning with a representation hearing and concluding with an unfair labor practice proceeding if the employer refuses to bargain, cannot be neatly segmented into “investigatory” and “adjudicatory” stages. This is vividly illustrated by the present case, where the Company admits its refusal to bargain with the Union, but attacks the process by which it was selected. The rule against re-litigation was designed to insure that such issues will be resolved early in the game, rather than permitting parties to hold back evidence knowing that they will get a second bite at the apple should they lose. We therefore join the other Circuits which have approved the procedure employed by the Board in this case. NLRB v. Mar Salle, Inc., supra; NLRB v. Brush-Moore Newspapers, Inc., 6 Cir., 1969, 413 F.2d 809, 811-812; NLRB v. Union Brothers, Inc., supra. The Company complains that the Board has “run roughshod” over it in this case. We are not moved. On the contrary, the Company has been playing cat-and-mouse with the Board, giving no ground when it did not feel absolutely compelled to do so. It must now suffer the consequences. The Board’s order is enforced. . See Pepsi-Cola Bottling Co. of Princeton, Inc., 1969, 176 NLRB 716, 729; Yerges Van Liners, Inc., 1967, 162 NLRB 1259, 1260; Star Baking Co., 1957, 119 NLRB 835, 836; Alterman-Big Apple, Inc., 1956, 116 NLRB 1078. . That regulation provides in pertinent part: “(f) . . . Failure to request review shall preclude such parties from reliti-gating, in any related subsequent unfair labor practice proceeding, any issue which was, or could have been, raised in the representation proceeding. Denial of a request for review shall constitute an affirmance of the regional director’s action which shall also preclude reliti-gating any such issues in any related subsequent unfair labor practice proceeding.” . At one point in its brief, the Company asserts that section 102.67(f) has no application to this case. (Br. at 14.) Presumably this is to protect its argument that the Acting Regional Director had no authority to order the representation hearing. In view of our disposition of that issue, it is clear that section 102.67 (f) does apply. . Other Circuits have held that section 102.G7 (f) cannot be applied when the subsequent unfair labor practice proceeding concerns something other than a refusal to bargain. E. g., Heights Funeral Home, Inc. v. NLRB, 5 Cir., 1967, 385 F.2d 879, 881-882; Amalgamated Clothing Workers of America v. NLRB, 1966, 124 U.S.App.D.C. 365, 365 F.2d 898, 902-906. We are not faced with that issue in this case, and expressly decline to decide it.

f2d_474/html/0563-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Roy Alphonso SMITH, Appellant, v. J. D. COX, etc., Appellee. No. 71-1715. United States Court of Appeals, Fourth Circuit. Argued Oct. 2, 1972. Decided Feb. 14, 1973. Thomas B. Anderson, Jr., Durham, N. C. (Court-appointed counsel) (Loflin, Anderson & Loflin, Durham, N. C., on brief], for appellant. William A. Carter, III, Asst. Atty. Gen. (Andrew P. Miller, Atty. Gen., of Virginia, on brief), for appellee. Before BOREMAN, WINTER, and RUSSELL, Circuit Judges. PER CURIAM: The district court denied habeas corpus relief to Roy Alphonso Smith who alleged that his sixth amendment right to a speedy trial was denied him when, during a period of twelve months incarceration at the Lorton Reformatory, the Commonwealth of Virginia declined to act upon his repeated written requests that he be tried on pending state charges. The Lorton incarceration began in August, 1965, after conviction in the District of Columbia for housebreaking, and terminated a year later when Smith’s conviction was reversed on appeal. The Virginia charge was for armed robbery allegedly committed on February 23, 1965, while Smith was awaiting trial for housebreaking. A warrant for Smith’s arrest on the Virginia charge was issued on February 25, 1965, but it was not served until September 7, 1966, when Smith had been released from Lorton. Smith was indicted on January 3, 1967, and he was tried and convicted on March 14, 1967, and sentenced on May 9,1967. The district court found that Smith had failed to show any prejudice resulting from the two year delay between the issuance of the warrant and trial. Specifically, it found that, although Smith alleged that he was unable to obtain certain out-of-state witnesses as a result of the delay, he was not prejudiced thereby. We issued a certificate of probable cause to examine the correctness of those findings and of the conclusion that Smith’s sixth amendment right to a speedy trial had not been denied him. Since the decision by the district court, the Supreme Court has decided United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468 (December 20, 1971) and Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (June 22, 1972). Marion held that the sixth amendment right to a speedy trial “has no application until the putative defendant in some way becomes an ‘accused’ ” and that ordinarily “it is either a formal indictment or information or else the actual restraints imposed by arrest and holding to answer a criminal charge that engages the particular protections of speedy-trial provision of the Sixth Amendment.” 404 U.S. at 313 and 320, 92 S.Ct. at 459 and 463. While it may be argued that Marion, as applied here, would indicate that Smith’s right to a speedy trial did not come into being until the February 25, 1965 warrant was served, we are loath to give Marion this construction. Smith was aware of the warrant soon after its issuance and undoubtedly no attempt was made to serve the warrant since Smith was already in custody. We cannot equate the factual situation here, where an arrest warrant had been issued but not served because Smith was already incarcerated, with the factual situation in Marion where individuals enjoyed their freedom while an investigation to determine whether to accuse them ran its course. Since we conclude that Marion does not foreclose Smith’s claimed denial of a speedy trial, we must look to Barker to determine the merits of the claim. Barker prescribes a balancing test where the conduct of the prosecution and the conduct of the defendant are to be weighed, one against the other, with due consideration to all of the factors set forth and discussed in Barker. We deem it more appropriate that the balancing process be undertaken in the first instance by the district court than by us. The district court, if the need arises, can receive additional evidence with respect to any one or more of the relevant factors on which the record may not be complete. Accordingly, we have concluded to vacate the judgment denying habeas corpus relief and to remand the case to the district court for redetermination in the light of Barker. Vacated and remanded.

f2d_474/html/0565-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Joseph P. LUCIA, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees. No. 30342. United States Court of Appeals, Fifth Circuit. Feb. 2, 1973. Simpson, Circuit Judge, dissented in part and specially concurred in part and filed opinion in which John R. Brown, Chief Judge, and Wisdom, Goldberg and Godbold, Circuit Judges, joined. Ingraham, Circuit Judge, did not participate in En Banc decision. John G. Heard, Harry M. Reasoner, Thomas P. Marinis, Houston, Tex., Charles Alan Wright, W. Dean Hester, Austin, Tex., for plaintiff-appellant. Meyer Rothwacks, John M. Dowd, Joseph M. Howard, and John P. Burke, U. S. Attys., Lee A. Jackson, Atty., Tax Div., U. S. Dept, of Justice, Washington, D. C., William S. Sessions, U. S. Atty., Hugh P. Shovlin, Asst. U. S. Atty., San Antonio, Tex., for defendants-appellees. Before JOHN R. BROWN, Chief Judge, and WISDOM, GEWIN, BELL, THORNBERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK and RONEY, Circuit Judges. Judge Ingraham did not participate in the en banc decision in this ease. RONEY, Circuit Judge: Appellant Joseph P. Lucia seeks in-junctive and declaratory relief against an assessment of $2,653,640, plus interest, for unpaid wagering taxes. The District Court dismissed the complaint for lack of subject matter jurisdiction. A panel of this Court, relying on the principles set forth in Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968), and Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968), reversed the dismissal on the ground that, absent the Government’s showing of taxpayer fraud, the statute of limitations would bar the assessment and appellant would be entitled, therefore, to injunctive relief. On rehearing, the Court, sitting en banc, now decides that the assessment would not be barred by the statute of limitations. But we remand the case to the District Court for a factual determination of appellant’s allegation that the assessment was arbitrary, capricious, and without factual foundation. The ultimate question in this case is whether the facts alleged in the complaint come within a narrow exception to the Congressional mandate which denies federal courts the jurisdiction to grant injunctive relief against the assessment or collection of federal taxes. Other than the statutory exceptions, which are not applicable here, the only basis for injunctive relief is that prescribed in Miller v. Standard Nut Margarine Co. of Florida, 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422 (1932), and Enochs v. Williams Packing & Navigation Co., Inc., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962). Under the holdings of these two cases, a federal court may enjoin the collection of federal taxes if the taxpayer plaintiff can show (1) that “it is clear that under no circumstances could the Government ultimately prevail,” and (2) “that equity jurisdiction otherwise exists.” 370 U.S. at 7, 82 S.Ct. at 1129. Injunctive relief is permitted under this test only if the Government’s claim cannot be established “under the most liberal view of the law and the facts.” To bring himself within this exception, plaintiff alleges, on two independent grounds, that the Government could not under any circumstances prevail in the collection of the taxes assessed: first, he contends that the Government’s assessment is barred by the statute of limitations; and second, he argues that the assessment is arbitrary, capricious, and without factual foundation. I. Statute of Limitations Defense Civil tax assessments, including the wagering excise tax, must be made within three years after the tax return is filed. If no return is filed, however, this three-year statute of limitations does not apply, and the assessment or collection proceedings may begin at any time. Taxpayer contends that, the latter provision notwithstanding, the three-year limitations period applies when the failure to file a return is constitutionally protected under Marchetti and Grosso. If the limitations statute is applicable here, then the assessment is barred because the assessment of $3,913,761.74 (including $1,260,121.74 interest) for wagering excise tax liability during the period March 1, 1959, through November 21, 1963, was not made until July 29, 1969, almost six years after the last transaction and more than ten years after the first transaction on which the assessment was made. The validity of the wagering excise tax is not here in question. The courts have traditionally refused to challenge the federal government’s power to tax unlawful activities, so Congress undoubtedly has the power to assess and to collect taxes on unlawful gambling activities, including wagering. A tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed or because it affects activites which Congress might not otherwise regulate. Several basic principles guide our decision that the statute of limitations is not here applicable. First, there is no substantive or fundamental right to the shelter of a period of limitations. As a matter of constitutional law, statutes of limitations go to matters of remedy and do not involve the destruction of fundamental rights. Thus, the extent to which a tax assessment is barred by time is within exclusive Congressional control, unlimited by the Constitution. This principle is manifest in the cases recognizing Congress’ power to create a right with no time limitation on its exercise, and by those decisions holding that, in the enforcement of Government tax claims, the United States is not barred by a laches defense. Second, limitations statutes barring the collection of taxes otherwise due and unpaid are strictly construed in favor of the Government. In effect, a period of limitations runs against the collection of taxes only because the Government, through Congressional action, has consented to such a defense. Absent Government consent, no limitations defense exists. Third, Congress has clearly provided that time will not bar the collection of taxes for which no returns have been filed : “In the case of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time.” The legislative intent to condition a limitations defense on the filing of a return is reflected in the provision that time begins to run not when the return could or should have been filed, but only when the return is actually filed. The objective of this Congressional pattern- — to ensure that passage of time will not prevent collection of the tax unless the Government has been informed by the taxpayer that there is, or might be, tax liability- — is essential to our national tax system, which “is premised largely on the theory of self-assessment.” Since Congress did not contemplate the frustration of the self-assessment system occasioned by Marchetti, Grosso, and United States Coin and Currency, there could have been no legislative intent as to the effect of these decisions on the limitations defense. Congress, in addressing specific situations involving a failure of the self-assessment pattern, however, consistently provided that time would not bar the collection of the tax. False or fraudulent returns, filed with an intent to evade tax, willful attempt to evade tax in any manner, and failures or delays in filing a return for any reason, justifiable or not, are specific instances where the self-assessment system is thwarted; and in each ease, Congress has provided that time will not bar assessment or collection proceedings until the return is filed. We cannot assume that Congress intended to accord any different treatment to the failure to file a return for Fifth Amendment reasons. The constitutional dimensions of the federal wagering excise tax scheme, nevertheless, were dramatically affected by the United States Supreme Court’s holdings in Marchetti, Grosso, and United States Coin and Currency. In both Marchetti and Grosso, the Court reasoned that the tax statutes required gamblers to file forms containing possibly incriminating information and that the Fifth Amendment privilege against self-incrimination could be raised as a defense to a criminal prosecution charging failure to file the required forms. In Marchetti, the Court held that a defendant’s proper assertion of his constitutional privilege against self-incrimination provided a complete defense to a criminal prosecution for willful failure to register and for willful failure to pay the occupational tax before engaging in the business of accepting wagers, and for conspiracy to evade payment of such tax. In Grosso, the Court additionally held that the Fifth Amendment privilege against self-incrimination likewise prevented a prosecution for failure to pay the excise tax on wagering imposed by 26 U.S.C.A. § 4401, the statute under which the assessment in the case at bar has been made. United States Coin and Currency was a forfeiture proceeding in which the respondent monies were declared forfeited pursuant to the provision that “no property rights shall exist in property” used “in violating the provision of the internal revenue laws.” Violations of the same statutes controlling in Marchetti supported the forfeiture. The Seventh Circuit concluded that the only apparent purpose of the forfeiture statutes under the circumstances was “to punish violators of [these statutes] by taking away money used in committing the violations.” The Court reasoned that, since Marchetti prohibits direct punishment of such violations, indirect punishment through forfeiture should similarly not be permitted. The Supreme Court, affirming, held that the Fifth Amendment privilege could be properly invoked in the case since the forfeiture statutes, when viewed in their entirety, are intended to impose a penalty only upon those taxpayers who are significantly involved in a criminal enterprise. Delimiting the scope of these holdings, Mr. Justice Harlan’s language in United States Coin and Currency articulates the issue in the case at bar: “The Government’s principal argument [that only criminal proceedings were proscribed, not civil proceedings such as forfeiture] turns upon an exceedingly narrow construction of our decisions in Marchetti and Grosso. In those eases, we took pains to make it clear that the Court in no way doubted the Government’s power to assess and collect taxes on unlawful gambling activities. It was only the method Congress had adopted in collecting the tax that raised the Fifth Amendment question. The statute commanded that gamblers submit special registration statements and tax returns that contained information which could well incriminate them in many circumstances. Because the risk of self-incrimination was substantial, we held that a Fifth Amendment privilege could be raised as a defense to a criminal prosecution charging failure to file the required forms. Since it was only this method, of tax collection which was subject to constitutional objection, we indicated that the Government remained free to collect taxes due under the statute so long as it did not attempt to punish the taxpayer for his failure to file the required documents.” Herein lies the central issue: does the denial of the limitations defense constitute “punishment” of the taxpayer for failure to file a return? More specifically, has the exercise of the taxpayer’s constitutional right against self-incrimination been impermissibly burdened by the tax statute’s establishment of filing as requisite to a limitation period ? We hold that the collection of legally owed taxes at any time, without regard to the three-year limitation period, is not punishment within the ambit of these decisions. The Government sought from Lucia only taxes and interest, not penalties, civil or criminal. In Marchetti, Grosso, and United States Coin and Currency, the Government sought to deprive the taxpayers of liberty or money, through sentence, fine, or forfeiture, that they could have retained had they complied with the revenue laws. Here, the Government seeks only to deprive Lucia of tax and interest, both lawfully accrued. Since this sum is nothing more than the cost he would have had to bear had he complied with the law, no “costly penalty” can be attributed to his failure to comply. Lucia seeks support for his argument — that denial of the limitations defense constitutes a penalty — in a variety of cases which hold that an individual may not be deprived of either employment or a professional license simply because he asserts his privilege against self-incrimination in refusing to answer questions relating to his professional conduct. In each of those cases, the individual was deprived of employment or a professional status to which he would have otherwise been entitled were it not for the assertion of his Fifth Amendment privilege. Because there is no fundamental right to have taxes assessed and collected within any period of limitations, the taxpayer has not been penalized by being deprived of something to which he otherwise would have been entitled. The imposition of the tax was not the consequence of Lucia’s refusal to file a tax return. Thus, the assessment and collection of taxes do not constitute retributive action by the Government. Lucia’s treatment did not differ from that accorded any other taxpayer who fails to file returns, including those who obtain, as permitted by statute, an extension of time for filing, and those whose failure to file results from unavoidable circumstances or excusable neglect. We hold that the period of limitations for the assessment of wagering excise taxes does not commence to run until a return has been filed, even though to require a return would violate the taxpayer’s constitutional right against self-incrimination. No return having been filed by Lucia for the period involved, the statute of limitations does not bar the assessment. II. The Assessment On Lucia’s allegations that the Government’s assessment is “arbitrary, capricious, and without factual foundation,” we remand the case to the District Court for a trial on the merits. Following Pizzarello v. United States, 408 F.2d 579 (2d Cir. 1969), this Court holds that a taxpayer under a jeopardy assessment is entitled to an injunction against collection of the tax if the Internal Revenue Service’s assessment is entirely excessive, arbitrary, capricious, and without factual foundation, and equity jurisdiction otherwise exists. We hold that such a set of facts would bring the taxpayer within the narrow bounds of the exception to the anti-injunction statute designed by the United States Supreme Court in Standard Nut Margarine Co. and Enochs. Inasmuch as Standard Nut Margarine Co. granted injunctive relief and Enochs denied it, the two cases together delineate the requirements for equity jurisdiction in tax cases. An injunction barring tax assessment and collection was permitted in Standard Nut Margarine Co., despite the Commissioner’s argument that such relief was prohibited by the anti-injunction statute, on the finding that the excise tax there was assessed against a product that was not taxable at all under the governing Oleomargarine Tax Act. The Government had assessed the tax, in disregard of prior contrary determinations by three federal courts and the Commissioner of Internal Revenue, under circumstances that would have both destroyed the taxpayer’s business and caused it financial ruin. In Enochs, the Court held that an injunction was barred by the statute, even though the District Court which enjoined the collection of social security and unemployment taxes had found that the taxes were not, in fact, payable and that collection would destroy the taxpayer’s business. The validity of the tax turned on the employer-employee relationship between the owners of shrimp boats and their fishermen crews. A review of the record revealed that the Government’s claim, that the fishermen were the corporation’s employees under the statutory definition, had some foundation, even though the District Court had found otherwise. From this, the Court reasoned that, because the taxpayer could not clearly show “that under no circumstances could the government ultimately prevail,” injunctive relief was improper. The Court in Enochs specifically held that the mere showing that the tax is not due and that the legal remedy is inadequate is not sufficient to trigger the Standard Nut Margarine Co. exception. Speaking for the Court, Chief Justice Warren explained the manifest purpose of the anti-injunction statute: “[T]o permit the United States to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund. In this manner the United States is assured of prompt collection of its lawful revenue. “To require more than good faith on the part of the Government would unduly interfere with a collateral objective of the Act — protection of the collector from litigation pending a suit for refund.” The Standard Nut Margarine Co. principle was confirmed, nonetheless, by the Enochs Court: “[If] it is clear that under no circumstances could the Government ultimately prevail, the central purpose of the Act is inapplicable and, under the Nut Margarine case, the attempted collection may be enjoined if equity jurisdiction otherwise exists. In such a situation the exaction is merely in ‘the guise of a tax.’ ” The initial test for application of this standard was then articulated as “[W]hether the Government has a chance of ultimately prevailing . [as] determined on the basis of the information available to it at the time of suit. Only if it is then apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim, may the suit for an injunction be maintained. Otherwise, the District Court is without jurisdiction, and the complaint must be dismissed.” In Pizzarello, the Second Circuit, upon determining that the tax assessment in question was excessive and was based on entirely inadequate information, relied on Enochs in reversing the denial of an injunction. Pizzarello was a wagering tax case that involved a projection of wagering, computed from a small amount of known wagers, much like the case at bar. The tax liability for gross wagers for five years was computed by applying the amount of average wagers accepted for a three-day period to the total number of days of operation. The Court found “no proof in the record . . . that Pizzarello operated-as a gambler for five years or that, even if he did so operate, his three-day average represented his average daily business for the other 1,575 days.” The Second Circuit said that “[n]o court could properly make such inferences without some foundation of fact.” The tax assessment against Lucia was based on a Revenue Agent’s calculation of gross wagers accepted by or on behalf of Lucia during the period March 1, 1959, to November 21, 1963. Available to the Agent was the bounty of a raid on Lucia’s alleged gambling establishment and a seizure of one day’s betting slips purportedly accepted during the 1962 football season. This evidence, by the Agent’s calculation, indicated a total of $28,780 in bets accepted for that day. Upon the premises that wagers in the Houston area were accepted on six days -per week and that the total suggested by the seized bet slips constituted a representative day, the Agent determined that gross wagers in the amount of $2,244,840 were accepted during the 13-week football season. Using this figure to represent 40% of the gross wagers during the entire year, the Agent projected annual gross wagers of $5,612,100. Eliminating one day per week, the Agent calculated that bets were accepted on 313 days annually and divided that number into the projected annual gross wagers, thereby computing the daily amount of gross wagers to be $17,930. From this figure and from his estimate of the number of days each month that wagers would be accepted, the Agent computed gross wagers on a monthly basis. It is this method of computation which Lucia alleges to be “arbitrary, capricious, and without factual foundation.” He stands ready, his brief indicates, to demonstrate on remand the impropriety of the projection procedure employed by the Government in its assessment. The panel of this Court which first heard this case found two decisions of this Circuit controlling on the point. Mersel v. United States, 420 F.2d 517 (5th Cir. 1969), and Pinder v. United States, 330 F.2d 119 (5th Cir. 1964). Subjected to careful analysis, Mersel and Pinder do not conflict with either Pizzarello or our decision in the case at bar. Mersel was a refund case in which the Government employed a similar projection procedure to estimate the amount of wagering tax owed. But the method of computation was not challenged by the taxpayers. Their proof was confined to an attempt .to show that they had not engaged in wagering. This Court held that the District Court’s finding, that taxpayers were engaged in the business of accepting wagers, was not clearly erroneous. Pinder was also a refund suit in which we held that the taxpayer had failed to meet his burden of proving that the tax liability, based on a projected assessment, was improper. Thus, both eases turned on the taxpayer’s failure to carry his burden of proof. In this suit for in-junctive relief, the taxpayer, Lucia, will have to prove his case upon remand, and the extent of our holding goes no further than to give him that opportunity. We do not regard this decision as conflicting with the line of cases holding that injunctive relief will be denied if it appears that the Government can make at least some recovery of the tax assessed. More fundamental considerations concern us here than a mere quarrel over the amount of the tax: Was the taxpayer accepting wagers dur-erations on remand will the District ing the entire period covered by the assessment? Are the Government’s figures based on realistic projections or were they merely derived, Mandrake-like, from a filament of evidence and subjected to a sleight-of-hand computation? Does the 40% factor used in the computation have any factual basis, or is it merely the product of an agent’s conjecture? Can the base day properly be assumed to be an average day for that week, much less for several years? Only after exploring all relevant consid-Court be able to determine whether the computative basis is so insufficient as to make the assessment an exaction in “the guise of a tax” rather than a legitimate tax on wagers. III. Inadequate Remedy at Law Even if it be shown that the assessment is merely an exaction in “the guise of a tax,” Lucia would still not be entitled to injunctive relief if he has an adequate remedy at law. In other words, even if the anti-injunction statute would not bar District Court jurisdiction, the Court would still have no equitable jurisdiction under traditional equity concepts unless there is available to the taxpayer no legal remedy adequate to protect him from irreparable harm. The Government argues that Lucia has an adequate remedy at law in the form of a refund suit. Although no provision for tax court jurisdiction of wagering excise taxes enables taxpayers to litigate the validity of an assessment before payment, in the manner provided for income, profits, estate, gift, and certain excise taxes imposed under Chapter 42 of the Internal Revenue Code, the taxpayer need not pay the total tax assessed to bring a refund suit. He may instead pay a divisible portion of the tax, representing either a single wagering transaction or a number of wagering transactions but less than the totality assessed, and then test the validity of the entire assessment in a suit for refund brought in the Court of Claims or in the District Court. Lucia argues that a refund suit is inadequate for two reasons: first, a refund suit will not stay collection proceedings against the remainder of the assessment, and he would suffer financial ruin from a levy during the pen-dency of a refund proceeding, and second, since the Commissioner’s assessment is presumed to be correct and the burden is on the taxpayer to show that the assessment is incorrect and to show the correct amount of tax owed, Lucia would be compelled to abandon his Fifth Amendment privilege against self-incrimination to meet this burden in a refund suit. The Fifth Amendment argument is unpersuasive. First, Lucia has the burden of proving the allegations of his complaint in this equitable suit if he is to prevail. If he can carry the burden of proof in this injunctive suit, without incriminating himself, presumably he could carry it in the refund suit. Second, we have recently held in Urban v. United States, 445 F.2d 641 (5th Cir. 1971), that the refund procedure for litigating wagering excise taxes provides no basis for a broad constitutional attack on that tax, and we do not recede from that position. We hold, nevertheless, that if Lucia can prove the allegations in his complaint, that there is a possibility of a financially ruinous levy during the pendency of a refund proceeding, then the legal proceeding offers him no adequate remedy at law. For the consideration of this point, we assume that, in the refund proceedings, Lucia would ultimately prevail on his proof that the assessment was arbitrary, capricious, and without foundation of fact, to wit, that it was not a tax at all but rather an exaction in “the guise of a tax,” and that he can show that in the meantime he would have suffered bankruptcy as a result of the levy and collection. Under these cir- , cumstances, Lucia would have shown the irreparable harm required for equitable jurisdiction, and he would be entitled to such relief as the District Court might determine to be necessary. This holding does not conflict with the substantial precedent that hardship alone is insufficient to justify injunctive relief against the collection of taxes. The anti-injunction statute expressly forbids such relief, even where no adequate remedy at law is available to prevent such a disastrous result. As the Supreme Court stated in Enochs, “a suit may not be entertained merely because collection would cause an irreparable injury, such as the ruination of the taxpayer’s enterprise.” But a finding that the assessment is arbitrary, capricious, and without foundation in fact would free the Court of the constraint of the anti-injunction statute and would permit relief upon a showing by taxpayer that his legal remedy is inadequate to prevent irreparable injury. The judgment of the panel is withdrawn but the decision of the District Court is reversed and remanded for further proceedings consistent with the views expressed herein. Reversed and remanded. SIMPSON, Circuit Judge, with whom JOHN R. BROWN, Chief Judge, and WISDOM, GOLDBERG and GODBOLD, Circuit Judges, join, dissenting in part and specially concurring in part: I I respectfully dissent from Part I of the Court’s en banc opinion on rehearing,. ádhering to the views expressed in Part VI, pages 919-921, of my opinion for the original panel, Lucia v. United States, 5 Cir. 1971, 447 F.2d 912. This viewpoint is based upon the premise that Marchetti, Grosso, and United States Coin and Currency, introduced “an entirely new constitutional dimension to the administration of the federal wagering excise tax scheme” and the conclusion that “because of this radical alteration of the constitutional environment * * * decisions pre-Marchetti and Grosso dealing with injunctive relief against wagering excise tax assessments ■may not be relied upon to dispose of the issue presented here.” The panel attempt to assay the effect of this new constitutional dimension on the issues presented by Lucia’s appeal led to this result: “ * * * that Lucia may not be deprived of the defense of the statute of limitations for failure to file the required federal wagering excise tax returns”, because of his exercise of his Fifth Amendment right against self-incrimination. In any accommodation between statute and the Constitution, I remain convinced that the statute in question, Title 26, U. S.C., Section 6501(c)(3), must give way to the constitutional privilege explicated in Grosso and given retroactive application by United States Coin and Currency. This conclusion may not be entirely satisfactory. The en banc majority rejects it. But my opinion for the panel majority at least recognized and met head-on the problem of the application of the constitutional privilege as expanded by Grosso in the framework of the statutorily required filing of excise tax returns and the statutes of limitation. It seems to me that the position Judge Roney expresses for the majority of the en banc Court fails realistically to come to grips with the problem, in the same way that his dissent to the panel majority opinion did. Both opinions rely on as controlling numerous pre-Grosso cases applying time tested rubrics of voluntary reporting and statute of limitation requirements. No meaningful accommodation into this framework of the Grosso principle emerges. This approach is the basis for holding that the statute of limitations cannot begin to run until a return is filed. The majority is thus led inexorably to the remarkable conclusion at the end of Part I of the opinion, page 572, supra (page 8 of the typewritten copy): “We hold that the period of limitations for the assessment of wagering excise taxes does not commence to run until a return has been filed, even though to require a return would violate the taxpayer’s constitutional right against self-incrimination. No return having been filed by Lucia for the period involved, the statute of limitations does not bar the assessment.” (Emphasis supplied.) Faced with the problem of how to deal with the constitutional privilege as applied by the Supreme Court to federal wagering excise tax returns, the majority baldly asserts that the return must be filed even though in violation of the constitutional privilege. Absent such filing the statute of limitations is forever tolled. I should suppose, to the contrary, that when Title 26, Section 6501(c)(3) collides with the constitutional privilege, the statute, not the Constitution, must give ground. I adhere to the original panel solution as preferable on logical as well as legal grounds to the majority’s startling conclusion that the statute takes precedence over the constitutional privilege. II As to Part II of the majority opinion I concur in the result only: remand for a determination by a trial on the merits of the issue of whether the government’s assessment is as charged by Lucia, “arbitrary, capricious, and without factual foundation”. For the majority of the original panel, I held in Part V of the panel opinion, 447 F.2d 918-919, that our decisions in Pinder and Mersel were indistinguishable on principle from the case at bar, and precluded the attempted arbitrariness attack on the assessment. The Second Circuit decision in Pizzarello v. United States, 2 Cir. 1969, 408 F.2d 579, was held to conflict with our Pinder and Mersel decisions. The majority, by reasoning I am unable to follow, concludes that Pinder and Mersel are really not in conflict with Pizzarello after all and we are thus free to direct the lower court to apply Pizza-rello. Foreknowledge that this was the law would have simplified my task in writing for the original panel, but I deemed that we were restricted by controlling precedent. My disposition would be to treat this problem by saying straight out that to the extent they conflict with Pizzarello, Pinder and Mersel are receded from. This action is appropriate for the en banc Court, whereas the original panel felt bound by these prior decisions. The result, directions to the lower court to apply the teachings of Pizzarel-lo to the facts here, is the same in either event. For this reason, I concur in the result reached in Part II of the en banc majority opinion, although I would reach that result by a different route. . Lucia v. United States, 447 F.2d 912 (1971). . 26 U.S.C.A. § 7421(a). “Prohibition of suits to restrain assessment or collection (a) Tax. — Except as provided in sections 6212(a) and (e), 6213(a), and 7426(a) and (b) (1), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” . 370 U.S. at 7, 82 S.Ct. at 1129; see Bowers v. United States, 423 F.2d 1207 (5th Cir. 1970). . 26 U.S.C.A. § 4401(a). “Imposition of tax (a) Wagers. — There shall be imposed on wagers, as defined in section 4421, an excise tax equal to 10 percent of the amount thereof. (b) Amount of wager. — In determining the amount of any wager for the purposes of this subchapter, all charges incident to the placing of such wager shall be included; except that if the taxpayer establishes, in accordance with regulations prescribed by the Secretary or his delegate, that an amount equal to the tax imposed by this sub-chapter has been collected as a separate charge from the person placing such wager, the amount so collected shall be excluded. (c) Persons liable for tax. — Each person who is engaged in the business of accepting wagers shall be liable for and shall pay the tax under this sub-chapter on all wagers placed with him. Each person who conducts any wagering pool or lottery shall be liable for and shall pay the tax under this sub-chapter on all wagers placed in such pool or lottery. Any person required to register under section 4412 who receives wagers for or on behalf of another person without having registered under section 4412 the name and place of residence of such other person shall be liable for and shall pay the tax under this subchapter on all such wagers received by him.” . 26 U.S.O.A. § 6501(a). “Limitations on assessment and collection (a) General rule. — Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed) or, if the tax is payable by stamp, at any time after such tax became due and before the expiration of 3 years after the date on which any part of such tax was paid, and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period. . 26 U.S.C.A. § 6501(c). “(c) Exceptions.— (1) False return. — In the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time. (2) Willful attempt to evade tax.— In case of a willful attempt in any manner to defeat or evade tax imposed by this title (other than tax imposed bi-subtitle A or B), the tax may be assessed, or a proceeding in court for the collection of such tax may bo begun without assessment, at any time. (3) No return. — In the case of failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time. (4) Extension by agreement. — Where, before the expiration of the time prescribed in this section for the assessment of any tax imposed by this title, except tiie estate tax provided in chapter 11, botii the Secretary or his delegate and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. . . .” . See, e. g., License Tax Cases, 72 U.S. (5 Wall.) 462, 18 L.Ed. 497 (1866). . United States v. United States Coin and Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971). . United States v. Sanchez, 340 U.S. 42, 71 S.Ct. 108, 95 L.Ed. 47 (1950). . Chase Securities Corp. v. Donaldson, 325 U.S. 304, 65 S.Ct. 1137, 89 L.Ed. 1628 (1945). . Campbell v. Holt, 115 U.S. 620, 6 S.Ct. 209, 29 L.Ed. 483 (1885); United States v. Nebo Oil Co., 190 F.2d 1003 (5th Cir. 1951). . Anderson v. United States Atomic Energy Commiss’n, 313 F.2d 313 (7th Cir. 1963); cf. Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946). . United States v. Summerlin, 310 U.S. 414, 60 S.Ct. 1019, 84 L.Ed. 1283 (1940); Olshausen v. C.I.R., 273 F.2d 23 (9th Cir. 1960), cert. denied, 363 U.S. 820, 80 S.Ct. 1256, 4 L.Ed.2d 1517 (1960). . McDonald v. United States, 315 F.2d 796, 801 (6th Cir. 1963); Pacific Coast Steel Co. v. McLaughlin, 61 F.2d 73 (9th Cir. 1932); Loewer Realty Co. v. Anderson, 31 F.2d 268, 269 (2d Cir. 1929). . 26 U.S.C.A. § 6501(c)(3); see Birmingham Bus. College, Inc. v. C.I.R., 276 F.2d 476 (5th Cir. 1960). . E. g., Automobile Club of Michigan v. C.I.R., 353 U.S. 180, 77 S.Ct. 707, 1 L.Ed.2d 746 (1957); United States v. Thompson, 262 F.Supp. 340 (S.D.Tex. 1966); Haring v. United States, 142 F.Supp. 782 (N.D.Ohio 1956). . 9 Mertens’ Law of Federal Income Taxation § 49.02, at 6, cited in United States v. Gilmore, 222 F.2d 167 (5th Cir. 1955). . See note 8, supra. . See, e. g., Forman v. United States, 361 U.S. 416, 80 S.Ct. 481, 4 L.Ed.2d 412 (1960); Toledano v. C.I.R., 362 F.2d 243 (5th Cir. 1966); Spriggs v. C.I.R., 290 F.2d 181 (9th Cir. 1961). . See, e. g., Jenkins v. United States, 313 F.2d 624 (5th Cir. 1963); Jaeger Motor Car Co. v. C.I.R., 284 F.2d 127 (7th Cir. 1960), cert. denied, 365 U.S. 860, 81 S.Ct. 826, 5 L.Ed.2d 823; Kalil v. C.I.R., 271 E.2d 550 (5th Cir. 1959). . See, e. g., Automobile Club of Michigan v. C.I.R., supra; Jones v. United States, 371 F.2d 442, 178 Ct.Cl. 16 (1967); Birmingham Bus. College, Inc. v. C.I.R., supra; West Coast lee Co. v. C.I.R., 49 T.C. 345 (1968). . 26 U.S.C.A. § 4412. . 26 U.S.C.A. § 4411. . 26 U.S.C.A. § 7302. . 26 U.S.C.A. §§ 4411, 4412. . United States v. United States Coin & Currency, 393 F.2d 499, 500 (7th Cir. 1968). . 401 U.S. at 717, 91 S.Ct. at 1043, 28 L.Ed.2d 434 (emphasis added). . We assume, for the purpose of decision, that the taxes assessed would be otherwise legally due. . Uniformed Sanitation Men’s Assn., Inc. v. Comm’r of Sanitation, 392 U.S. 280, 88 S.Ct. 1917, 20 L.Ed.2d 1089 (1968); Gardner v. Broderick, 392 U.S. 273, 88 S.Ct. 1913, 20 L.Ed.2d 1082 (1968); Spevack v. Klein, 385 U.S. 511 (1967); Garrity v. New Jersey, 385 U.S. 493, 85 S.Ct. 616, 17 L.Ed.2d 562 (1967). . These cases, id., were not relied on or cited by the Supreme Court in Grosso, Marchetti, or Coin and Currency, although the opinion of the Seventh Circuit in United States v. United States Coin & Currency, supra, relied in part on Garrity. . 26 U.S.C.A. § 6501(c)(4). . 26 U.S.C.A. § 6651(a). . 26 U.S.C.A. § 7421(a) ; see note 2, supra. . 24 Stat. 209 (1886) as amended 82 Stat. 194 (1902). . Williams Packing & Navigation Co. v. Enochs, 176 F.Supp. 168 (1959). . 370 U.S. at 7, 82 S.Ct. at 1129, 8 L.Ed.2d 292. . Id. at 7, 82 S.Ct. at 1129. . Id. at 7, 82 S.Ct. at 1129. . 408 F.2d at 583. . Id. at 583. . Writing for this Court in Mersel, Judge Simpson pointed out that “the taxpayers’ ease in chief was devoted exclusively to proving that the plaintiffs had not engaged in gambling. . . .” He went on to note that “[the pre-trial order stated that one of the issues to be tried was whether the Commissioner’s determination of the amount of taxes due was correct, and the taxpayers were on specific notice thereby that they were required to present evidence in their case in chief regarding the method of assessment if they wished to challenge it.” 420 F.2d at 520. . Although Pinder partially rationalized the use of the projection method on the ground that the taxpayer failed to keep records required by Sections 4403 and 4423, a rationale probably abrogated by Marehettí and Grosso, Pinder is not authority for defending a projection that is arbitrary, capricious, and without factual foundation. . The attack on the projection and statistical computation does not relate to the tax on those wagers directly reflected by the seized betting slips or to any other portion of the assessment that liad an obvious factual basis. That portion of the assessment, however, can easily be extracted upon a proper showing by the Government in the early stages of remand proceedings. The matter on the record before us is not clearly divisible, so we leave to the District Court the task of determining such partial relief or denial thereof as may seem appropriate. Our holding here is limited to the proposition that the Government cannot, by coupling an arbitrary and capricious projection with an assessment that is obviously factual, escape the District Court’s jurisdiction outlined in Standard Nut Margarine Co.. . See, e. g., Bowers v. United States, supra; Thrower v. Miller, 440 F.2d 1186 (9th Cir. 1971); Kelly v. Lethert, 362 F.2d 629 (8th Cir. 1966). . See 9 Mertens’ Law of Federal Income Taxation § 50.08 (1971). . 26 U.S.C.A. § 7422; Flora v. United States, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960). “[Ejxcise tax assessments may be divisible into a tax on each transaction or event, so that the full-payment rule would probably require no more than payment of a small amount.” 362 U.S. at 175 n.3S, 80 S.Ct. at 646. See 362 U.S. at 171 n.37, 80 S.Ct. 630, for further discussion of this exception to the full-payment rule. See also Bowers v. United States, 423 F.2d 1207 (5th Cir. 1970); Cole v. Cardoza, 441 F.2d 1337 (6th Cir. 1971); Compton v. United States, 334 F.2d 212 (4th Cir. 1964), and District Court cases cited therein, 334 F.2d at 215 n.6; and Vuin v. Burton, 327 F.2d 967 (6th Cir. 1964). Of course, payment of the tax on wagering transactions directly represented by the betting slips held by the Government would not meet the taxpayer’s needs here. So that the computation could be tested, the divisible portion paid would have to include some of the alleged wagers encompassed by the Government’s challenged projection. . See Ianelli v. Long, 71-2 U.S.T.C. ¶ 16,021 (W.D.Pa.1971). Since Lucia is under a jeopardy assessment, the danger is accentuated by the fact that procedural delays may be occasioned in the pursuit of a refund suit. After payment of the tax, an administrative claim for refund must be filed, 26 U.S.O.A. § 7422(a) ; see Algonac Mfg. Co. v. United States, 428 F.2d 1241 (Ct.Cl.1970); National Newark and Essex Bank v. United States, 410 F.2d 789, 187 Ct.Cl. 609 (1969). Unless the Internal Revenue Service grants an exception, six months must pass from the administrative filing date until suit may be commenced. 26 U.S.C.A. § 6532(a) (1) and (3). . Our holding here does not conflict with Urban. In that tax refund suit, taxpayer’s brief pointed out that “[t]he sole question involved is whether or not the wagering excise tax and the wagering occupational stamp creating such tax are constitutional in that they violate the rights guaranteed under the Fifth Amendment.” Taxpayer had stipulated that the assessment against him was correct if the wagering tax scheme was constitutional. We merely held in Urban that, under that broad attack, Marchetti, Grosso, and United States Coin and Currency did not invalidate the wagering excise tax, 26 U.S.C.A. § 4401, and the wagering occupational tax, 26 U.S.C.A. § 4411. . See, e. g., California v. Latimer, 305 U.S. 255, 59 S.Ct. 166, 83 L.Ed. 159 (1938); Monge v. Smyth, 229 F.2d 361 (9th Cir. 1956), cert. denied, 351 U.S. 976, 76 S.Ct. 1055, 100 L.Ed. 1493; Reams v. Vrooman-Fehn Printing Co., 140 F.2d 237 (6th Cir. 1944). . 370 U.S. at 6, 82 S.Ct. at 1129, 8 L.Ed.2d 292. Enochs specifically contrasts § 7421(a), which prohibits injunctive relief against federal taxes without reference to the adequacy or inadequacy of a legal remedy, with 28 U.S.C.A. § 1341, which forbids the federal courts to entertain suits enjoining collection of state taxes “where a plain, speedy, and efficient remedy may be had at law or in equity in the courts of such State.” 370 U.S. at 6, 82 S.Ct. at 1128, 8 L.Ed.2d 292. . Marchetti v. United States, 1968, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889. . Grosso v. United States, 1968, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906. . United States v. United States Coin and Currency, 1971, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434. . 447 F.2d at p. 922. . 447 F.2d at p. 922. . 447 F.2d at p. 923. . Compare 447 F.2d, pages 923-924, and cases there cited with the text of pages 568 and 569 of the en banc majority opinion and cases cited in the supporting notes. . From a practical standpoint, the effect of the original panel decision presents no particularly alarming prospects The Secretary would have three years after such a raid as occurred here within which to make his calculations and execute a return as provided by applying Title 26, U.S.C., Section 6020. I suggest that in the present ease this could as well have been accomplished in 1965, within three years of the raid, as in 1969, seven years thereafter. . Pinder v. United States, 5 Cir.1964, 330 F.2d 119. . Mersel v. United States, 5 Cir.1969, 420 F.2d 517.

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UNITED STATES of America, Plaintiff-Appellee, v. Kenneth Wayne EIDUM, Defendant-Appellant. No. 72-1816. United States Court of Appeals, Ninth Circuit. Feb. 6, 1973. Kenneth Wayne Eidum, in pro. per. Stan Pitkin, U. S. Atty., Douglas D. McBroom, Asst. U. S. Atty., Seattle, Wash., for plaintiff-appellee. Before BROWNING and GOODWIN, Circuit Judges, and CONTI, District Judge. Honorable Samuel Conti, United States District Judge, Northern District of California, sitting by designation. CONTI, District Judge: Kenneth Wayne Eidum pleaded guilty in December of 1970 in the Western District of Washington to an indictment for violation of 18 U.S.C. § 2312 (interstate transportation of a stolen motor vehicle). He was sentenced to three years imprisonment on January 22, 1971. He appeals to this court from a district court denial of his motion to vacate that sentence under 28 U.S.C. § 2255. Petitioner alleges several grounds for reversal: (1) Denial of right to speedy trial. Appellant argues that the right to speedy trial attached when he was “accused by the Federal Bureau of Investigation agents at Omaha, Nebraska, on or about August 10, 1969”. (Page 3 of appellant’s opening brief.) Appellant’s 28 U.S.C. § 2255 petition reveals that he was arrested on a- state charge in Nebraska and was then questioned by F.B.I. agents about a federal charge. He was not indicted until September 30, 1970, pleaded guilty in December, 1970, and was sentenced on January 22, 1971. He argues that the failure to prosecute from August 10, 1969, until his indictment on September 30, 1970, constituted a denial of his right to a speedy trial. He alleges prejudice in that he was thus denied the opportunity of a concurrent sentence. Petitioner’s argument on this issue must fail, however, because he has not shown that such delay occurred after he became an “accused” within the meaning of United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971). That case held that the protection of the Sixth Amendment’s provision for a speedy trial is activated only when a criminal prosecution has begun and extends only to those persons who have been “accused” in the course of that prosecution. The court further stated that no conviction has been reversed on such constitutional grounds where only prein-dictment delay is involved. In this case the record only shows that petitioner was “questioned by the F.B.I.” relative to this charge. Such questioning does not constitute initiation of prosecution so as to bring the right to speedy trial into play. The requirements of the Marion case have not been met, and appellant’s argument must be rejected as to this claim. The District Court’s order is affirmed as to this issue. (2) 18 U.S.C. § 3568 requires that the time spent in state custody be credited against appellant’s federal sentence. The above section gives credit for any time spent in custody “in connection with” the offense for which sentence was imposed. Petitioner argues that the case of Davis v. Attorney General, 425 F.2d 238 (5th Cir. 1970), granted such relief in a situation similar to this case. However, in the Davis ease the prisoner was denied bail on a state charge because a federal detainer was lodged against him. That detainer was issued upon the authority of the prisoner’s federal conviction and sentence. In the instant case, however, no federal process of any sort had issued against appellant until November, 1970, when his release was prevented by a federal de-tainer. Thus, no active involvement of the federal government was present which had an effect on appellant’s state custody until November, 1970. He pleaded guilty to the federal charge approximately a month later. Only this period of time after the federal detainer had issued should be credited, under 18 U.S.C. § 3568, against petitioner’s sentence on state charges. Except for this period of time, the district court’s order is affirmed as to this issue. (3) Petitioner argues that his guilty :plea was not voluntary and that his counsel was inadequate. The record does not adequately show that petitioner’s plea was knowing and voluntary, nor does it reveal sufficient facts as to his claims of inadequate counsel. Therefore, this matter is reversed and remanded for an evidentiary hearing as to these issues.

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UNITED STATES of America, Plaintiff-Appellee, v. Kenneth Wayne EIDUM, Defendant-Appellant. No. 72-2286. United States Court of Appeals, Ninth Circuit. Feb. 6, 1973. Kenneth Wayne Eidum, in pro. per. Stan Pitkin, U. S. Atty., Charles W. Billinghurst, Asst. U. S. Atty., Seattle, Wash., for plaintiff-appellee. Before BROWNING and GOODWIN, Circuit Judges, and CONTI, District Judge. Honorable Samuel Conti, United States District Judge, Northern District of California, sitting by designation. CONTI, District Judge: Kenneth W. Eidum pleaded guilty to violation of 18 U.S.C. § 2312 (Interstate Transportation of a Stolen Motor Vehicle). The trial judge sentenced him to three years. Eidum moved for modification of sentence under 28 U.S.C. § 2255, which motion was denied. He appeals to this court from that denial. This court has held that when: “There is a reasonable probability that the defective prior convictions may have led the trial court to impose a heavier sentence than it otherwise would have imposed . . . we are unable to conclude that the reception of such evidence was harmless beyond-a reasonable doubt.” United States v. Tucker, 431 F.2d 1292, 1294 (9th Cir. 1970) affirmed 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1971). In the instant case, the trial judge, in his order denying appellant’s Motion for Modification of Sentence, stated: “The three convictions to which defendant refers are a very insignificant part of a very long criminal record.” This court will not refute the judge’s own estimation of the deleterious impact of the prior convictions on his determination of sentence. The record shows on its face that the judge did not consider those convictions in imposing- sentence. Therefore, we affirm.

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UNITED STATES of America, Plaintiff-Appellee, v. Carl SKOLEK, Defendant-Appellant. No. 72-1534. United States Court of Appeals, Tenth Circuit. Submitted Jan. 24, 1973. Decided Feb. 1, 1973. Rehearing Denied Feb. 28, 1973. James L. Treeee, U. S. Atty., and Paul D. Cooper, Asst. U. S. Atty., for plaintiff-appellee. Jerrold M. Ladar, San Francisco, Cal., and Marvin S. Cahn, Berkeley, Cal., for defendant-appellant. Before HILL, BARRETT and DOYLE, Circuit Judges. PER CURIAM. Carl Skolek, charged with violating 21 U.S.C. § 841(a)(1) and 18 U.S.C. § 2, was convicted by a jury and appeals. A review of the trial transcript discloses that Special Agent David Hanks of the Bureau of Narcotics and Dangerous Drugs, together with a partner, Pas-sick, and pursuant to a pre-determined arrangement, proceeded to a room at the Ramada Inn in Denver, Colorado, on February 2, 1972, at approximately 7:00 p. m. to meet one Randall Caldwell. Caldwell appeared stating that he had recently arrived from California with his “connection” who was then en route to Caldwell’s residence on Chase Street in Denver. Caldwell handed Hanks eight ounces of a substance containing cocaine which was represented to be similar in quality to prior sales between the parties. Shortly thereafter another accomplice, Patrick Egan, arrived and was also asked about the quality of the cocaine which he also stated was the same as prior transactions. Caldwell and Egan were promptly placed under arrest. Agent Hanks then took the cocaine to his office and proceeded with another agent, Castille, to the Chase Street residence to talk with the “connection”. They were met at the residence by a boarder, Robert Montoya, known through prior dealings, and informed him that they needed to talk with “Carl J. Stone” as to an alleged discrepancy in the amount of cocaine involved in the earlier transaction. Stone was an alias that the appellant, Skolek, had been using at that time, according to Hanks. Montoya introduced the agents to Sko-lek who was asked whether he had sent Caldwell and Egan to the Ramada Inn with eight ounces of cocaine. Skolek responded that he had. When told that Caldwell and Egan had wanted to sell them six rather than eight ounces, Sko-lek replied: “Let me figure that out.” He then sat at a table with paper and pencil and began to write. Skolek then apparently suspected the circumstances for he abruptly stated, in effect, that he didn’t know anything and wasn’t going to say anything else. Skolek was also promptly taken into custody. At trial, Egan, who had the same day entered a plea of guilty to one of the counts charged in the indictment, was called as a Government witness. A discussion followed with Egan’s attorney concerning Egan’s Fifth Amendment privilege against self-incrimination. The court denied Egan’s claim of privilege and he testified. The testimony showed that Skolek, a friend of Egan’s had been contacted by' telephone and agreed to bring the cocaine to Denver where he planned to vacation, in return for $300. Egan and Caldwell met Sko-lek at the Denver airport and proceeded to the Chase Street residence. Egan stepped out of the house momentarily and when he returned, the cocaine that he had discussed with Skolek had appeared on the table, at the same time Skolek appeared. Caldwell picked up the four ounces of cocaine to which Egan subsequently added four ounces of baking powder. Skolek had been informed that the cocaine he was to carry was intended for sale. Three of the issues in this appeal are directed to the testimony of a witness, Patrick Egan, and Egan’s Fifth Amendment claim of privilege against self-incrimination. Basically, the argument is that Egan was compelled to testify without a grant of immunity and without a waiver of his privilege, an alleged denial of due process, and that Skolek was denied effective assistance of counsel and right to cross-examination by Egan’s “arrangement” to testify. There is no constitutional right not to be incriminated by the testimony of another. Some constitutional rights may not be vicariously asserted. See Alderman v. United States, 394 U.S. 165, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969). The privilege against self-incrimination is solely for the benefit of the witness and is purely a personal privilege of the witness, not for the protection of other parties. Rogers v. United States, 340 U.S. 367, 71 S.Ct. 438, 95 L.Ed. 344 (1951). We have held that the protection against self-incrimination, a shield of silence, is a personal privilege for the sole benefit of the witness. Edwards v. United States, 131 F.2d 198 (10th Cir. 1942), cert. denied, 317 U.S. 689, 63 S.Ct. 262, 87 L.Ed. 552. This principle is well settled. Gollaher v. United States, 419 F.2d 520 (9th Cir. 1969), cert. denied, 396 U.S. 960, 90 S.Ct. 434, 24 L.Ed.2d 424; United States v. Elliott, 418 F.2d 219 (9th Cir. 1969); United States v. Bruton, 416 F.2d 310 (8th Cir. 1969), cert. denied, 397 U.S. 1014, 90 S.Ct. 1248, 25 L.Ed.2d 428; Quintero v. United States, 409 F.2d 839 (9th Cir. 1969); Bowman v. United States, 350 F.2d 913 (9th Cir. 1965), cert. denied, 383 U.S. 950, 86 S.Ct. 1209, 16 L.Ed.2d 212; Poole v. United States, 329 F.2d 720 (9th Cir. 1964); United States v. Goldfarb, 328 F.2d 280 (6th Cir. 1964), cert. denied, 377 U.S. 976, 84 S.Ct. 1883, 12 L.Ed.2d 746. Where the witness is not the party, the party may not claim the privilege nor take advantage of an error of the court in overruling it. Bowman v. United States, supra. Accord, Long v. United States, 124 U.S.App.D.C. 14, 360 F.2d 829 (1966), authored by Judge, now Chief Justice, Burger. The party, as contrasted to the witness, simply lacks standing. United States v. Ceniceros, 427 F.2d 685 (9th Cir. 1970); United States v. Elliott, supra; United States v. Bruton, supra; Lopez v. Burke, 413 F.2d 992 (7th Cir. 1969). See also Alderman v. United States, supra, and United States v. Galvez, 465 F.2d 681 (10th Cir. 1972). The self-incrimination provision of the Fifth Amendment is to “be accorded liberal construction in favor of the right it was intended to secure”. Hoffman v. United States, 341 U.S. 479 at 486, 71 S.Ct. 814, at 818, 95 L.Ed. 1118 (1951). A defendant has a vested interest only in his own Fifth Amendment rights. Poole v. United States, supra. There is no violation of the privilege when the information elicited is used not against the witness but against another. Lopez v. Burke, supra. The privilege belonged to Egan, not to Skolek. Egan did not undertake to test the validity of the court’s rulings by standing upon his claim of privilege and refusing to answer. It is for the trial court to say whether his silence is justified. Hoffman v. United States, supra. Nor are we convinced that the court ruling was anything but correct. Egan had earlier pleaded guilty to this same count in exchange for the dismissal of others. Having pleaded guilty, he could be compelled to testify. United States v. Hoffman, 385 F.2d 501 (7th Cir. 1967); United States v. Gernie, 252 F.2d 664 (2nd Cir. 1958), cert. denied, 356 U.S. 968, 78 S.Ct. 1006, 2 L.Ed.2d 1073; United States v. Romero, 249 F.2d 371 (2nd Cir. 1957); United States v. Cioffi, 242 F.2d 473 (2nd Cir. 1957), cert. denied, 353 U.S. 975, 77 S.Ct. 1060, 1 L.Ed.2d 1137. And having given the testimony under compulsion, Egan may well be protected against its use in other proceedings. Bowman v. United States, supra. See also C.R.S. § 48-5-21 (1963), which protects the substantial rights of Egan now that he has pleaded guilty to the federal charge. The attorneys representing Skolek in this appeal succeeded the trial attorneys. They now contend that Egan and the prosecution made an “arrangement” for his testimony and that this should be the subject of meaningful cross-examination, an opportunity, they imply, not afforded Skolek at trial. While Egan’s credibility as a witness may have been an important issue in the case, together with any evidence of an agreement, see Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972), Skolek had ample opportunity to cross-examine in all respects, an opportunity never limited by the trial court. Failure to take advantage of that opportunity cannot seriously be urged as a ground for reversal. It may very well have been a part of their trial strategy since the testimony of Egan was not the only testimony linking Skolek with the crime. Furthermore, the trial court instructed the jury with regard to assessing the testimony of witnesses generally, and of accomplices specifically. See United States v. Plemons, 455 F.2d 243 (10th Cir. 1972); United States v. Holmes, 453 F.2d 950 (10th Cir. 1972), cert. denied, 406 U.S. 908, 92 S.Ct. 1618, 31 L.Ed.2d 819; United States v. Birmingham, 447 F.2d 1313 (10th Cir. 1971). * * * The Government rested its case at approximately 11:45 a. m. and a discussion immediately followed at the bench, out of the presence of the jury and off the record. The jury was then excused for lunch and a discussion concerning the admissibility of the cocaine exhibit followed. The concern was with the exhibit’s chain of custody, followed by motions to suppress the cocaine and for judgment of acquittal. The court determined that the chain of custody had been satisfactorily established and denied the motion to suppress, admitting the exhibit, and the motion for acquittal. The appellant now contends that the exhibit, the contraband, was erroneously admitted after the close of the evidence. If we understand the argument, the evidence should not have been admitted after the Government rested. We have repeatedly held otherwise. United States v. Moehring, 446 F.2d 516 (10th Cir. 1971); United States v. Keine, 424 F.2d 39 (10th Cir. 1970), cert. denied, 400 U.S. 840, 91 S.Ct. 81, 27 L.Ed.2d 75; Massey v. United States, 358 F.2d 782 (10th Cir. 1966), cert. denied, 385 U.S. 878, 87 S.Ct. 159, 17 L.Ed.2d 105. Furthermore, the matter of the exhibit and admissibility had been discussed earlier in the trial and the parties agreed to delve into the matter during the recess, to conserve time. If the argument on this issue is directed to the chain of custody, we agree with the trial court that the chain was satisfactorily established. * * •* Other issues are raised. First the appellant complains that it is error for the court to permit the indictment to be taken into the jury room, without cautionary instructions and where an alias was used. Whether the indictment may be taken to the jury room is within the sound discretion of the trial court. Wall v. United States, 384 F.2d 758 (10th Cir. 1967); Little v. United States, 73 F.2d 861 (10th Cir. 1934); United States v. Davis, 437 F.2d 928 (7th Cir. 1971); United States v. Green, 433 F.2d 946 (5th Cir. 1970); United States v. Warner, 428 F.2d 730 (8th Cir. 1970), cert. denied, 400 U.S. 930, 91 S.Ct. 194, 27 L.Ed.2d 191; Dallago v. United States, 138 U.S.App.D.C. 276, 427 F.2d 546 (1969); United States v. Marquez, 424 F.2d 236 (2nd Cir. 1970), cert. denied, 400 U.S. 828, 91 S.Ct. 56, 27 L.Ed.2d 58; American Bar Association Minimum Standards for Criminal Justice Relating to Trial by Jury, Section 5.1 (materials to jury room). In Little v. United States, supra, we held that if the indictment goes, the jury should be charged, upon request, that the indictment is not evidence of the facts charged therein. Such an instruction was given here. The jury requested the indictment after they commenced deliberation. A copy of the indictment was prepared after shielding the other counts and the names of other defendants. The copy, thus shielded, reflected only the name of Skolek, with the alias Carl Stone, and the fourth count (but not designated as a fourth count). The use of the alias was permissible where there was testimony that Skolek had used such a name. Agent Hanks, when visiting the Chase Street residence after the sale, had informed the boarder, Montoya, that he needed to speak to Stone resulting in Hanks’ confrontation with Skolek. See United States v. Wilkerson, 456 F.2d 57 (6th Cir. 1972), cert. denied, 408 U.S. 926, 92 S.Ct. 2507, 33 L.Ed.2d 337. The proof thus conformed to the allegations in the indictment. See United States v. Lynn, 461 F.2d 759 (10th Cir. 1972). The trial court’s discretion in permitting the indictment to be taken into the jury room was properly exercised. Finally, the failure to record the grand jury testimony is challenged. There is no requirement that the proceedings of a grand jury be recorded. United States v. Cooper, 464 F.2d 648 (10th Cir. 1972). cert. denied, 409 U.S. 1107, 93 S.Ct. 902, 34 L.Ed.2d 688; United States v. Hedges, 458 F.2d 188 (10th Cir. 1972); United States v. Quintana, 457 F.2d 874 (10th Cir. 1972); Nipp v. United States, 422 F.2d 509 (10th Cir. 1970), cert. denied, 397 U.S. 1008, 90 S.Ct. 1235, 25 L.Ed.2d 420. We find no merit to the claim that the appellant’s right to confront and cross-examine is violated when no record of a witnesses’ prior testimony before the grand jury is available. See United States v. Cooper, supra. The appellant also argues that the indictment was based on hearsay evidence before the grand jury. This claim is equally without merit. Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 100 L.Ed. 397 (1956). Affirmed. . “MR. WEED: Your Honor, may I respectfully request the Court’s permission to look at the exhibits that have been referred to as 7(A), 7(B), and 7(0), the envelopes? “THE COURT: Please. “MR. WEED: Could I take them over to the table? “THE COURT: Please. Lot’s proceed in this fashion, if we may. Mr. Cooper, who is your next witness, please? “MR. COOPER: Agent Hanks, Your Honor. “THE COURT : What the Court would suggest is to go into Agent Hanks’ testimony, then at recess, you can go into these exhibits. “MR. WEED: There will be legal— what I am concerned about, when he intends to offer it as evidence. If it is not going to be at this time, I don’t think it can be — I can— “THE COURT: To what witness do you intend to introduce these exhibits, please? “MR. COOPER: Agent nanks, and then Mr. Egan and Caldwell. “THE COURT: The Court will reserve ruling on any admissibility then at this time, counsel. “MR. WEED: And any other legal agents such as chain of custody. “THE COURT : That’s right. “MR. WEED: We will have more opportunity not to waste the Court’s time. “THE COURT : Mr. Ruybal, the Court will direct that Mr. Ruybal remain here, and then you may cross-examine. “Tho court reserves ruling on 7(A), (B), and (C). The Court will reserve ruling on these exhibits.”

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UNITED STATES of America, Plaintiff-Appellee, v. Miguel RODRIGUEZ, Defendant-Appellant. No. 72-1529. United States Court of Appeals, Fifth Circuit. Jan. 30, 1973. Rehearing Denied April 4, 1973. See also, D.C., 336 F.Supp. 708. Louis Stoskopf, Martin S. Saxon, Miami, Fla., for defendant-appellant. Robert W. Rust, U. S. Atty., Mervyn L. Ames, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee. Before RIVES, WISDOM and RO-NEY, Circuit Judges. RONEY, Circuit Judge: In this appeal of a narcotics conviction, three questions have been raised Was the evidence sufficient to convict the defendant despite an entrapment defense? Was evidence of a subsequent, similar transaction admissible? Did the trial court’s refusal to order the Government to subpoena an informer witness and to permit defendant to testify to conversations with this witness deprive defendant of a fair trial ? , Miguel Rodriguez met a Special Agent of the Bureau of Narcotics and Dangerous Drugs and a Government informer, Eduardo Malpica, on September 7, 1971, in downtown Miami, Florida. Arrangements were made for the agent to purchase cocaine from Rodriguez the following day. On September 8th, the agent first extracted from a package under the seat of Rodriguez’ car a sample of cocaine and later paid defendant $1,500 and took the package. After a non-jury trial, defendant was convicted of two narcotics offenses, possession of cocaine with intent to distribute and distribution of cocaine, both in violation of 21 U.S.C.A. § 841(a)(1). He was sentenced to concurrent imprisonment for four years on each count. We affirm. Entrapment Defendant asserts entrapment as a matter of law and as a matter of fact and contests the sufficiency of the Government’s evidence to refute entrapment. Alleging entrapment at law, defendant shows that the cocaine in question was part of two kilos of cocaine furnished his brother, Mario Rodriguez, by a Government informer named Juan Mesa. The Government admits that this was apparently the source of defendant’s supply. Defendant argues that the Government thus furnished itself narcotics through an intermediary, as proscribed in United States v. Bueno, 447 F.2d 903 (5th Cir. 1971). The rationale of Bueno, however, will not support the defense in this case. In Bueno, we held that entrapment at law is established when the Government furnishes narcotics to an individual for him to sell to a Government agent. The crime in Bueno was committed through the creative activity of theGovernment informer in buying the heroin, smuggling it into the United States from Mexico, giving it to Bueno, selecting the prospective purchaser, and arranging for the defendant to make the sale. No such Government participation was involved in the sale made by Rodriguez. Bueno will not support the theory that the introduction of narcotics into the marketplace by the Government informer is sufficient to cloak all subsequent sellers with an entrapment defense. Being once removed from the person to whom the cocaine was furnished by a Government informer, Rodriguez cannot claim entrapment as a matter of law. He obtained the contraband from a non-government source, and that fact alone is sufficient to distinguish his defense from Bueno’s. Defendant makes an alternate contention that the evidence showed that-he received the cocaine from the informer, Malpica, instead of his brother, so that the Bueno rule could properly be extended to this case, but this issue of fact was resolved against defendant on contrary testimony. Alleging entrapment as a matter of fact, defendant charges that the Government informer, Malpica, induced him to participate in this transaction. Once a defendant raises the entrapment issue with some evidentiary support, the burden of going forward with the evidence shifts to the Government to contradict the evidence. United States v. Groessel, 440 F.2d 602 (5th Cir. 1971), cert, denied, 403 U.S. 933, 91 S.Ct. 2263, 29 L. Ed.2d 713. We conclude that the Government has met its burden. The evidence established that defendant was a dealer .in narcotics and had dealt in considerable quantities of cocaine. No evidence supports the conjecture that Malpica here implanted the scheme in defendant’s mind. The Supreme Court, in Sor-rells v. United States, 287 U.S. 435, 53 S.Ct. 210, 77 L.Ed. 413 (1932), said that, in determining the validity of an entrapment defense, “the controlling question [is] whether the defendant is a person otherwise innocent whom the government is seeking to punish for an alleged offense which is the product of the creative activity of its own officials.” 287 U.S. at 451, 53 S.Ct. at 216. We do not discern in the activities of the Government informer and agent sufficient creativity to meet this standard. At most, the Government merely provided an opportunity for Rodriguez to commit the offense. Defendant testified that he never touched the package of cocaine, but that the Government informer, Malpica, actually obtained the cocaine from Mario Rodriguez and sold it to the agent. To refute this evidence, the Government presented testimony that the informer and agent both got into defendant’s car at his invitation, that defendant told the agent to get the package of cocaine from under the seat on both occasions, and defendant both accepted and retained the payment. The trial court’s guilty verdict resolved this issue of fact against defendant. Admissibility of Subsequent, Similar Transaction Defendant contends that the admission into evidence of testimony pertaining to a subsequent, similar transaction was both erroneous and sufficiently prejudicial to warrant reversal. The testimony involved a sale of cocaine by Rodriguez on September 27, 1971, twenty days after the date of the offense charged. The Court refused to permit the Government to introduce this evidence in its case in chief. But when the defendant testified in his own behalf, the Court allowed cross-examination as to a meeting between Government agents and the defendant on September 27, 1971. Defendant denied that cocaine was discussed at that meeting. Government agents then testified that a small amount of cocaine was passed from defendant to a Government agent at that time. Although defendant grants that such testimony concerning prior and contemporary criminal acts may be admitted, he raises the critical question regarding the admissibility of evidence of acts which occurred subsequent to the dates in the indictment. The Government, relying on United States v. Pittman, 439 F.2d 906 (5th Cir. 1971), cert. denied, 404 U.S. 842, 92 S.Ct. 138, 30 L.Ed.2d 77 and United States v. Cooper, 321 F.2d 456 (6th Cir. 1963), argues that this evidence is admissible to impeach the defendant, to rebut the entrapment defense, and to corroborate the offense charged in the indictment. It does not contend that the evidence is admissible to prove intent in this case. See United States v. Johnson, 453 F.2d 1195 (5th Cir. 1972). Although it is true that Cooper involved corroborative acts which occurred prior to that charged in the indictment and Pittman involved acts which occurred between the dates of the two separate acts charged in the indictment, our review of the cases and the rationale for the admission of the evidence does not indicate that the sequence of events should be crucial. This Court, in Pittman, relied on Rodriguez v. United States, 284 F.2d 863 (5th Cir. 1960), cert. denied, 368 U.S. 1001, 82 S.Ct. 632, 7 L.Ed.2d 540 (1962), to hold that “evidence of an extraneous offense is admissible when it corroborates the offense charged, otherwise than by simply imputing to the defendant a general disposition to commit offenses of that type.” 439 F.2d at 909. Testimony regarding the intermediate transaction was held to corroborate the offense charged because it showed that, during the time period spanned by the indictment, the defendants possessed narcotic drugs on their premises and trusted the Government informer sufficiently to sell them to him. Cooper, moreover, is authority for the proposition that, in a narcotics case when the entrapment defense is raised, evidence of defendant’s other similar criminal acts, ordinarily not admissible if not charged in the indictment, are admissible to prove predisposition to commit the offense charged. There the Court explained that sales of narcotics just a few weeks before the offenses charged “would certainly seem to be related or similar acts and indicate a predisposition to commit the offenses.” 321 F.2d at 458. The primary thrust of these authorities is that evidence of a similar offense, committed in close proximity of time, may be corroborative of a prior or subsequent offense. Although evidence introduced in a criminal trial generally should relate only to the specific offense charged, prior or subsequent incidents may be introduced to establish that a defendant possessed a requisite knowledge or that there is a consistent pattern, scheme of operations, or similarity of method. United States v. Goodwin and Nail, 470 F.2d 893 (5th Cir. 1972). The balancing between the probative value of such evidence and any prejudice that may result from its admission is left within the sound discretion of the trial judge. See, e. g., United States v. Byrd, 352 F.2d 570 (2d Cir. 1965). The elements which control the admissibility of the subsequent act in this case are the similar nature and close proximity of the two events. Our reading of the instant record has convinced us that, m light of defendant’s entrapment defense, no abuse of discretion was committed when the trial judge admitted evidence of a subsequent, similar transaction. Absent Informer Defendant’s third argument is that the lower court erred in denying him the opportunity to subpoena the informer, Malpica, to testify on the entrapment issue and in sustaining objections to defendant’s questions regarding his conversations with this informer. A review of the record indicates that issuance of a subpoena would have been futile because Malpica could not be located and that the rulings on the defendant’s testimony were not reversible, if error at all. Affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Robert J. BARANOV, Defendant-Appellant. No. 26380. United States Court of Appeals, Ninth Circuit. Feb. 9, 1973. Byrne, J., dissented with an opinion. Burton C. Jacobson, Beverly Hills, Cal., for defendant-appellant. Harry D. Steward, U. S. Atty., Warren P. Reese, Asst. U. S. Atty., San Diego, Cal., for plaintiff-appellee. Before CHAMBERS and WRIGHT, Circuit Judges, and BYRNE, Sr., District Judge. Honorable William M. Byrne, Senior United States District Judge, Central District of California, sitting by designation. PER CURIAM: Baranov appeals from a conviction for mailing obscene matter in violation of 18 U.S.C. § 1461. We reverse. The government’s case consisted of photographs, advertisements, a motion picture and proof of mailing. As we are required to do, we have reviewed the evidence de novo. Jacobellis v. Ohio, 378 U.S. 184, 84 S.Ct. 1676, 12 L.Ed.2d 793 (1964); Wasserman v. Municipal Court of the Alhambra Judicial Dist., 449 F.2d 787 (9th Cir. 1971); Childs v. Oregon, 431 F.2d 272 (9th Cir. 1970), rev’d on other grounds 401 U.S. 1006, 91 S.Ct. 1248, 28 L.Ed. 2d 542 (1971). We have found the usual tasteless pictures focusing on the exterior human genitalia. However, none of this material appears to be any more offensive or distasteful than what the Supreme Court has found not obscene. United States v. 392 Copies of Magazine “Exclusive”, 253 F.Supp. 485 (D.Md.1966), aff’d 373 F.2d 633 (4th Cir. 1967), rev’d sub nom. Central Magazine Sales v. United States, 389 U.S. 50, 88 S.Ct. 235, 19 L.Ed.2d 49 (1967); Pinkus v. Pitchess, 429 F.2d 416 (9th Cir. 1970), aff’d 400 U.S. 922, 91 S.Ct. 185, 27 L.Ed.2d 183 (1970). Cf. United States v. 56 Cartons Containing 19,500 Copies of Mag., 373 F.2d 635 (4th Cir. 1967), rev’d sub nom. Potomac News Co. v. United States, 389 U.S. 47, 88 S.Ct. 233, 19 L.Ed.2d 46 (1967). The materials in both United States v. Miller, 455 F.2d 899 (9th Cir. 1972) and United States v. Young, 465 F.2d 1096 (9th Cir. 1972) were substantially more explicit than those involved here. Cf. United States v. Arno, 463 F.2d 731 (9th Cir. 1972). Reversed. BYRNE, District Judge (dissenting). I respectfully dissent. I do not agree that Jacobellis v. Ohio, 378 U.S. 184, 84 S.Ct. 1676, 12 L.Ed.2d 793, requires or permits us to review the evidence de novo. A close reading of Jaeobellis clearly shows that it is only the Supreme Court which has the duty to apply the applicable rules of law upon the basis of an independent review of the facts of each case in all cases involving constitutional rights under the Due Process clause. “Hence, we reaffirm the principle that, in ‘obscenity’ cases as in all others involving rights derived from the First Amendment guarantees of free expression, this Court cannot avoid making an independent constitutional judgment on the facts of the case as to whether the material involved is constitutionally protected.” (Page 190, 84 S.Ct. page 1679) (Emphasis supplied). If there is any doubt as to the court’s intention that the holding applied to the Supreme Court only and not to Courts of Appeals, it surely is dissipated by Chief Justice Warren’s dissenting opinion disagreeing with the majority ruling that the Supreme Court should make an independent de novo judgment on the question of obscenity. “However, protection of society’s right to maintain its moral fiber and the effective administration of justice require that this Court not establish itself as an ultimate censor, in each case reading the entire record, viewing the accused material, and making independent de novo judgment on the question of obscenity. Therefore, once a finding of an obscenity has been made below under a proper application of the Roth test, I would apply a ‘sufficient evidence’ standard of review — ”. (Pages 202-203, 84 S.Ct. page 1686) (Emphasis supplied). Certainly, this court is limited to applying a “sufficient evidence” standard of review. The evidence being sufficient to support the district court’s findings, I would affirm.

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Joseph A. SLABAUGH, Defendant-Appellant, v. UNITED STATES of America, Plaintiff-Appellee. No. 72-1860. United States Court of Appeals, Sixth Circuit. March 9, 1973. Harry E. Youtt, Cleveland, Ohio, for appellant. Joseph T. MeGinness, Asst. U. S. Atty., Frederick M. Coleman, U. S. Atty., on brief for appellee. Before MeCREE and LIVELY, Circuit Judges, and KENNEDY, District Judge. Honorable Cornelia G. Kennedy, United States District Judge for the Eastern District of Michigan, sitting by designation. PER CURIAM. This appeal concerns the refusal of a 21-year old male member of the Old Order Amish sect, who had been classified by his local draft board as a conscientious objector, to report for alternate civilian service. The alternate service which he was directed to perform consisted of work in a state hospital in a community other than the one in which he resided. He based his refusal on the conviction that obedience to the Commandment, “Thou shalt not kill” made it impossible for him to perform any service which might have the effect of even indirectly aiding the military establishment of the country in performing its mission. Also in reliance on Wisconsin v. Yoder, 406 U.S. 205, 92 S.Ct. 1526, 32 L.Ed.2d 15 (1972), appellant has asked the Court to recognize the exceptional requirements which the Amish religion makes of its adherents and the disruptive effect on Amish values of a forced co-mingling with the world at large. In Yoder a great deal of evidence was introduced on the subject of whether forced attendance at public schools did have such a disruptive effect on Amish values. No evidence was produced by the appellant at his trial in the District Court that the alternate service ordered in this ease would have such an effect. The appellant maintains that in cases where a religion makes the exceptional demands upon its adherents which the Amish faith is known to make, the members of such a religion are entitled to a total exemption from service based on the “free exercise of religion” provisions of the First Amendment rather than the statutory substitution of alternative civilian service provided for conscientious objectors. This Court considered a similar argument with respect to a member of Jehovah’s Witnesses in Rase v. United States, 129 F.2d 204 (6th Cir. 1942), and concluded that there is no constitutional grant of immunity from military service because of one’s religious convictions or activities. We continue to adhere to that decision. The Selective Service authorities recognized appellant’s sincere religious convictions and accordingly classified him as a conscientious objector who was exempt from military service. Having received this classification, appellant was entitled to fulfill his obligation of citizenship by performing alternate civilian service. His refusal to report for such service was a violation of 50 App. U.S.C. § 462, and the District Court so found. It is ordered that the judgment of the District Court be, and hereby is, affirmed.

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Lola Beth GREEN, Plaintiff-Appellant, v. BOARD OF REGENTS OF TEXAS TECH UNIVERSITY et al., Defendants-Appellees. No. 72-1542. United States Court of Appeals, Fifth Circuit. Feb. 13, 1973. Rehearing and Rehearing En Banc Denied May 9, 1973. Buford C. Terrell, Lubbock, Tex., for plaintiff-appellant. Sylvia Roberts, Baton Rouge, La., amicus curiae. Crawford Martin, Atty. Gen. of Tex., W. 0. Shultz, II, Asst. Atty. Gen., Austin, Tex., Carlton Dodson, Resident Counsel, Lubbock, Tex., Nola White, First Asst. Atty. Gen., Austin, Tex., James H. Milam, Lubbock, Tex., for defendants-appellees. Before JOHN R. BROWN, Chief Judge, and MOORE and RONEY, Circuit Judges. Hon. Leonard P. Moore, Senior Circuit Judge of the Second Circuit, sitting by designation. RONEY, Circuit Judge: Dr. Lola Beth Green, Associate Professor of English at Texas Tech University, claims that she was refused promotion to the rank of full professor because of her sex. She sued the Board of Regents of Texas Tech University for damages under 42 U.S.C.A. § 1983. The District Court, 335 F.Supp. 249, concluding from the evidence that the decision not to promote plaintiff was based entirely on considerations other than her sex, denied relief. We affirm on the ground that the trial judge’s findings of fact are not clearly erroneous. Dr. Green has taught at Texas Tech University since 1946, except for her absence during 1951-1953 when she worked on her doctorate. First a temporary instructor, she was promoted to Assistant Professor in 1953 and to Associate Professor in 1959. In the 1969-1970 academic year, she made timely application to the University for promotion. When denied, she complied with the appropriate administrative procedure. This action was brought when the Board of Regents refused to grant the promotion. The District Court held an evidentiary hearing on both the merits of her claim and the administrative procedure through which plaintiff’s application was processed. A diagram of the procedure is as follows: HEAD OF THE ENGLISH DEPARTMENT (All professors of the English Department consider and vote upon the application and may submit statements-to the Head of the Department.) DEAN OF THE COLLEGE OF ARTS AND SCIENCES (Six-member Promotions and Tenure Committee of the Department of Arts and Sciences considers and votes upon the application to advise the Dean.) GRADUATE DEAN VICE PRESIDENT OF ACADEMIC AFFAIRS PRESIDENT OF TEXAS TECH UNIVERSITY TENURE AND PRIVILEGE COMMITTEE OF TEXAS TECH UNIVERSITY (Committee reviews for determination of compliance with due process. Applicant represented by attorney.) ACADEMIC COMMITTEE OF THE TEXAS TECH UNIVERSITY BOARD OF REGENTS FULL BOARD OF REGENTS OF TEXAS TECH UNIVERSITY Only at the first stage did Dr. Green’s application receive favorable consideration. Although her prior applications had failed to receive majority support from her own department, in 1969 plaintiff’s colleagues in the English Department voted 5 to 3 in favor of her promotion. Thereafter, at every level of review, Dr. Green’s application received a unanimous negative response. At each stage of the procedure, questions unrelated to Dr. Green’s sex were raised regarding her qualifications as to teaching ability, scholarship, and university and community service. Professors and administrators at all levels of the review testified before the District Court as to their opinions of Dr. Green’s work and ability which led to a denial of the promotion. There would be no value in recounting this testimony. Even at the first stage, where her application obtained a majority for approval, two faculty members in the minority testified that Dr. Green was deficient in both teaching and research as evidenced, in their opinions, by students’ complaints about her teaching, the disinclination of graduate students to seek her direction on theses, and her failure to publish any substantial research. To emphasize that misogyny was no element of his decision, one of these professors explained that he had voted for promotion of two of the three women who had sought promotion in the English Department since he had been affiliated with the University. Dr. Green’s application was even given special attention by an extra step in the review process: after the application went to the Vice President of Academic Affairs, plaintiff was given an opportunity to submit additional information, and the application was reconsidered by the Dean of the College of Arts and Sciences and his advisory committee. The credibility of the witnesses and the weight to be given their testimony are within the province of the finder of fact and the findings of the Court must be sustained unless clearly erroneous. Rule 52(a), Federal Rules of Civil Procedure. The findings and decision of academic administrative bodies are to be upheld by the courts when reached by correct procedures and supported by substantial evidence. Duke v. North Texas State University, 469 F.2d 829 (5th Cir. 1972); Ferguson v. Thomas, 430 F.2d 852 (5th Cir. 1970). Dr. Green complains that the District Court refused to consider whether the University discriminated toward women as a class. The District Court considered, however, all the evidence, including comparative charts and statistics, .that was directly related to the denial of Dr. Green’s application for promotion. This was not a class action. On appeal, plaintiff .concedes that no relief is sought for a class. We perceive no error in the District Court’s determination as to what evidence was relevant to Dr. Green’s claim. Plaintiff’s points of error concerning the alleged failure of the University to establish definite criteria controlling'.promotions in teaching rank; the Court’s holding that the University had not acted capriciously and had not abused its discretion; and the Court’s requirement of direct noninferential evidence of discrimination against plaintiff personally^ all fall under the positive finding by the Court that plaintiff’s application was given fair and impartial treatment and that the refusal of promotion was based on the facts of plaintiff’s record, without any regard being given to her sex. The University’s standards are matters of professional judgment, and here substantially every individual or committee in the institution’s reviewing body questioned Dr. Green’s competence. The Court’s findings are not clearly erroneous. Affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Eugene J. MATELICH, Defendant-Appellant. No. 72-2541. United States Court of Appeals, Ninth Circuit. Feb. 20, 1973. Shelton C. Williams (argued), of. Worden, Thane, Haines & Williams, Mis-soula, Mont., for defendant-appellant. R. E. Murray, Jr., Asst. U. S. Atty. (argued), Otis L. Packwood, U. S. Atty., Butte, Mont., for plaintiff-appellee. Before BROWNING and DUNIWAY, Circuit Judges, and KELLEHER, District Judge. Honorable Robert J. Kelleher, United States District Judge, Central District of California, sitting by designation. PER CURIAM: Matelich appeals from his conviction after trial by jury of two counts, which were treated as one crime, of concealment of assets from a trustee in bankruptcy in violation of 18 U.S.C. § 152. Appellant raises seven contentions, of which only two, alleging prejudicial error in admitting government’s exhibits, have any substance. One such exhibit is a portion of the transcript of appellant’s testimony at a bankruptcy hearing held on April 5, 1971, almost a year before the indictment of appellant. The other is a portion of a written F.B.I. report summarizing an F.B.I. interview with the appellant held on January 17, 1972. It was error to receive in evidence any portion of the transcript of appellant’s bankruptcy testimony. The record reveals that on April 5, 1971, an asset hearing was held before a part-time referee in bankruptcy. Title 11 U.S.C. § 25(a)(10) provides: “ . . .at the first meeting of his creditors, at the hearing upon objections, if any, to his discharge and at such other times as the court shall order [the bankrupt shall] submit to an examination concerning the conducting of his business, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind, and whereabouts of his property, and in addition all matters which may affect the administration and settlement of his estate or the granting of his discharge; but no testimony, or any evidence which is directly or indirectly derived from such testimony, given by him shall be offered in evidence against him in any criminal proceeding; except such testimony as may be given by him in the hearing upon objections to his discharge. . . . ” [italics added] Although the record is not wholly clear, it does appear that the testimony of appellant at the April 5, 1971, hearing was given pursuant to the order of the referee in bankruptcy; thus, its admission into evidence was improper. F.B.I. Special Agent Servel testified as to the substance of an oral interview he had with appellant using a typed statement to refresh his recollection. He testified that he had dictated the statement from notes made during the interview with appellant. Appellant objected to the admission of the exhibit on the grounds that the statement was the agent’s recollection of a conversation about which he had just testified and that the statement was irrelevant. The trial court judge sustained that objection. Subsequently, after appellee’s cross-examination of appellant, the agent’s statement was re-offered in evidence. Appellant renewed his objection on the grounds of irrelevancy, but the trial court admitted a portion of that statement. The record is unclear as to the grounds for objection other than relevancy. Ap-pellee asserts that the admitted portion of the agent’s statement was used to impeach appellant’s cross-examination testimony. However, the statement was not admitted for any such limited purpose. While the statement could have been used for this purpose if properly utilized, it has no independent evidentiary value. It is not, as the Government characterized it, “the statement as given to Mr. Servel.” The statement is nothing more than the agent’s recollections of his interview with appellant. Although appellant’s objections were ill stated and perhaps technically inappropriate, their substance was that the statement has no independent evidentiary value. On' this basis and over this objection, the admission of a portion of the agent’s statement was error. See United States v. Albanese, 224 F.2d 879 (2d Cir. 1955); 3 Wigmore, Evidence § 763 (Chadbourn rev. 1970). Appellant’s primary defense was that he did not conceal assets within the meaning of 18 U.S.C. § 152. Standing alone, the effect of the improperly received exhibits might not have constituted prejudicial error. But, when considered together, the effect of the inadmissible evidence must be considered prejudicial. In essence, appellant’s defense ■rested upon his credibility. Both inadmissible exhibits tended to impeach appellant. Indeed, the statement of the F.B.I. agent may have been accepted by the jury as substantive proof. This court cannot know what evidence influenced the jury, but it is celar that some jury members might have been persuaded to find appellant guilty on the basis of the documentary evidence which was inadmissible. See Leahy v. United States, 272 F.2d 487, 488 (9th Cir. 1959), cert. granted, 363 U.S. 810, 80 S.Ct. 1246, 4 L.Ed.2d 1152 (1960), cert. dismissed, 364 U.S. 945, 81 S.Ct. 465, 5 L.Ed.2d 459 (1961). Reversed and remanded for a new trial.

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UNITED STATES of America, Plaintiff-Appellee, v. Emmitt BRAGER, Defendant-Appellant. No. 72-3196 Summary Calendar. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Walter J. Woodman, Waxahachie, Tex. (Court-Appointed) for defendant-appellant. Frank D. McCown, U. S. Atty., Ft. Worth, Tex., Charles D. Cabaniss, Asst. U. S. Atty., Dallas, Tex., for plaintiff-appellee. Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges. Rule 18, 5 Cir.; See Isbell Enterprises, Inc. y. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I. SIMPSON, Circuit Judge: Emmitt Brager pled guilty to a one count indictment charging violation of Title 18, U.S.C., Section 659, theft from interstate shipment of goods of a value in excess of $100, two boxes of electric drills. He was adjudged guilty and thereafter received a custodial sentence of eight years, which was within the maximum confinement term provided by the statute. He appeals, urging (a) that the sentence he received is so excessive as to constitute cruel and unusual punishment in violation of the Eighth Amendment to the U.S. Constitution, and further (b) that since the trial judge admittedly based the length of the sentence in part upon appellant’s serious prior criminal record, he was twice put in jeopardy for the same offenses, in violation of his Fifth Amendment rights. Despite the earnestness and ingenuity with which Brager’s contentions are argued by his counsel, we find no merit in either ground presented, and affirm. As to the Eighth Amendment claim, see the following recent cases: United States v. Holley, 5 Cir. 1972, 463 F.2d 634, 639; United States v. Rojas-Colombo, 5 Cir. 1972, 462 F.2d 1091; United States v. Grene, 5 Cir. 1972, 455 F.2d 376, 377; United States v. White, 5 Cir. 1971, 447 F.2d 493, 494; Rener v. Beto, 5 Cir. 1971, 447 F.2d 20 (it does not matter that Rener is a Texas habeas case, since Robinson v. California, Note 2, supra, made the Eighth Amendment applicable to the states through the Fourteenth); United States v. Williams, 5 Cir. 1971, 446 F.2d 486; United States v. Ruacho-Acuna, 5 Cir. 1971, 440 F.2d 1199, 1201; Castle v. United States, 5 Cir. 1968, 399 F.2d 642, 652. Rojas-Colombo, supra, is concise and to the point: “There is no merit to Colombo’s sole contention, which is that imposition of the maximum sentence allowable violated the prohibition of the Eighth Amendment, to the United States Constitution against cruel and unusual punishment. (Citing cases).” The Fifth Amendment double jeopardy claim is refuted by Williams v. New York, 1949, 337 U.S. 241, 69 S.Ct. 1079, 93 L.Ed. 1337. There, after citing with approval Rule 32(c), F.R.Crim.P. dealing with pre-sentence investigations and reports, the Court observed: “ . . .A recent manifestation of the historical latitude allowed sentencing judges appears in Rule 32 of the Federal Rules of Criminal Procedure. 18 U.S.C.A. That rule provides for consideration by federal judges of reports made by probation officers containing information about a convicted defendant, including such information ‘as may be helpful in imposing sentence or in granting probation or in the correctional treatment of the defendant . . . ’ “[A sentencing judge’s] task within fixed statutory or constitutional limits is to determine the type and extent of punishment after the issue of guilt has been determined. Highly relevant —if not essential — to his selection of an appropriate sentence is the possession of the fullest information possible concerning the defendant’s life and characteristics. And modern concepts individualizing punishment have made it all the more necessary that a sentencing judge not be denied an opportunity to obtain pertinent information “ . . . Today’s philosophy of individualizing sentences makes sharp distinctions for example between first and repeated offenders.” (Emphasis supplied) 337 U.S. 246-248, 69 S.Ct. 1082-1083. As pointed out in the appellee’s brief, pages 8-9: “The Constitutional propriety of considering a previous conviction in determining the sentence to be assessed for a subsequent offense is starkly obvious when one considers statutes which expressly provide for a greater penalty when a violation is a second or subsequent offense.” Recidivist statutes have been uniformly upheld in the face of Fifth Amendment double jeopardy assaults, as being not punishment for a prior offense, but for the repetition of criminal conduct. See, among other cases, Graham v. West Virginia, 1912, 224 U.S. 616, 623, 32 S.Ct. 583, 56 L.Ed. 917; Beland v. United States, 5 Cir. 1942, 128 F.2d 795; Burton v. United States, 9 Cir. 1959, 272 F.2d 473. Affirmed. . The statutory penalty under Title 18, U.S.O., ¡Section 659, for theft from interstate shipment of goods of the value of more than $100 is fine of not more than $5,000, or imprisonment for not more than ten years or both. . Brager also contends that because the trial judge took account, in imposing sentence, of his admitted addiction to heroin for the preceding “seven or eight years”, his Eighth Amendment right not to be subjected to cruel and unusual punishment was violated in this respect, citing Robinson v. California, 1962, 370 U.S. 660, 82 S.Ct. 1417, 8 L.Ed.2d 758. Robinson is clearly inapposite. There the Supreme Court struck down as violative of the Eighth Amendment a California statute under which Robinson had been sentenced for being a narcotics addict. The statute, said Mr. Justice Stewart for the Court, impermissibly made the “status” of narcotic addiction a criminal offense, rather than imposing punishment for the use, purchase, sale or possession of drugs. Here the trial judge in imposing sentence for interstate theft gave weight to Brager’s admission that he stole to support his habit of using heroin daily over a long period of time. It was clearly an exercise of judicial discretion to determine that society’s jjroteetion as well as Brager’s recovery, both stood to benefit from a long sentence. . In the ease sub judice, the trial judge relied upon a pre-sentence report in imposing sentence upon Brager. In keeping with Northern District of Texas practices and as permitted by Rule 32(c)(2), the Pre-sentence Report was disclosed to the defendant and his counsel. Its accuracy is not disputed.

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Lillian N. WILSON, Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. No. 72-1766. Summary Calendar. United States Court of Appeals, Fifth Circuit. Jan. 31, 1973. Certiorari Denied June 18, 1973. See 93 S.Ct. 3014. William J. Beiswanger, Palm Beach, Fla., for petitioner-appellant. Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Atty., Tax Division, U. S. Dept, of Justice, Washington, D. C., Lee H. Henkel, Jr., Acting Chief Counsel, William D. Brackett, Atty., Internal Revenue Service, Washington, D. C., for respondent-appellee. Before BELL, DYER and CLARK, Circuit Judges. Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of N. Y., 431 F.2d 409, Part I (5th Cir. 1970). ON PETITION FOR REHEARING PER CURIAM: The opinion of this court dated August 11, 1972, 464 F.2d 603, is withdrawn and the following opinion is adopted as the opinion of the court. Mrs. Lillian Wilson appeals from a decision of the Tax Court which dismissed her case for failure to prosecute and adjudged her jointly liable for the income tax deficiencies of her now deceased husband. It is undisputed that Mrs. Wilson earned no income for the tax years in question, 1960-63, and that neither she nor her husband filed any returns for those years. On September 11, 1968, the Commissioner issued a joint statutory notice for alleged deficiencies in the subject tax years. On December 11, 1968, Mr. and Mrs. Wilson both executed and filed in the Tax Court a petition for a redeter-mination of these deficiencies. Then on October 14, 1970, Mr. Wilson signed a proposed settlement decision. An order was entered requiring Mrs. Wilson to show cause why the petition should not be dismissed as to her for failure to prosecute and why a decision should not be entered against her to reflect the same deficiencies in tax as agreed to by her husband. After Mrs. Wilson failed to respond, the Tax Court, on November 25, 1970, entered its order of dismissal and decision. On January 10, 1971 Mr. Wilson died. On February 23, 1972, some 15 months after the Tax Court’s decision, Mrs. Wilson sought leave of that court to file a motion to vacate and for a new trial. On- the same day, the Tax Court granted leave to file but denied the substantive relief sought by the motions. The instant petition for review was filed on March 6,1972. Our jurisdiction of this appeal is questioned by the Commissioner. 26 U. S.C.A. § 7483 (1967) provides that a petition for review must be filed within 3 months of the decision. Under F.R.A.P. 13(a), the 3 months may be extended where there has been a timely motion to vacate. The 3 months commences to run when the motion is adjudicated. Since the Tax Court accepted and acted upon the substance of this motion, we hold it timely filed. The 3 months began to run on February 23, 1972 and not on November 25, 1970. Thus, the petition for review was timely filed, and we have jurisdiction of this appeal. Proceeding to the merits, Mrs. Wilson first argues that the joint statutory notice of deficiency was patently defective on its face because under 26 U.S.C.A. § 6212(b)(2) (1967) it could not be issued unless a joint return had been filed.. We hold, however, that her joinder in filing of the petition for rede-termination of the deficiencies set out in the joint notice operated to vitiate this objection. The filing of the petition fully acknowledged that the purpose of the deficiency notice, which is to give the taxpayer notice that a deficiency has been assessed and give him an opportunity to have the assessment reviewed by the Tax Court, was accomplished. Sor-rentino v. Ross, 425 F.2d 213 (5th Cir. 1970.) Finally, Mrs. Wilson argues that her due process rights were violated since she received no notice of the Tax Court proceedings until June 23, 1971 when she received a copy of the Final Notice Before Seizure. It is undisputed that all correspondence from the Commissioner and the Tax Court was jointly addressed and mailed to the marital domicile. Mrs. Wilson never appeared for any of the proceedings. She contends that she never saw any of the correspondence because her husband always intercepted the mail, and he never told her anything about their tax troubles. She admits she signed the petition for redetermination but states that she signed at the instigation of her husband without being told the nature of the document and without reading it. The notarized affidavit on the last page of the petition states that Mr. and Mrs. Wilson have read the petition and are familiar with its statements. We reject her disavowal and hold that the signing of the petition evinces that Mrs. Wilson was supplied with sufficient notice, which Mrs. Wilson’s own inaction and the actions of an overly solicitous husband cannot subvert. The judgment of the Tax Court is Affirmed. . On this appeal Mrs. Wilson claims that there is no basis for holding her jointly liable with her husband since she earned no income during the years in question and filed no joint return therefor. Since this issue was not timely raised in the Tax Court, this court will not consider this argument on appeal. United States v. Hall, 440 F.2d 1277 (5th Cir. 1971); D. H. Overmyer Co. v. Loflin, 440 F.2d 1213 (5th Cir.), cert. denied, 404 U.S. 851, 92 S.Ct. 87, 30 L.Ed.2d 90 (1971); Cliff Food Stores, Inc. v. Kroger, Inc., 417 F.2d 203 (5th Cir. 1969).

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UNITED STATES of America, Plaintiff-Appellee, v. V. J. PAYNE, aka Marvin Hunt, et al., Defendant-Appellant. No. 72-1215. United States Court of Appeals, Ninth Circuit. Feb. 7, 1973. John S. Lane, Long Beach, Cal., for defendant-appellant. William D. Keller, U. S. Atty., David P. Curnow, Eric A. Nobles, Asst. U. S. Attys., Los Angeles, Cal., for plaintiff-appellee. Before ELY, HUFSTEDLER, and WALLACE, Circuit Judges. WALLACE, Circuit Judge: After a six-day jury trial, Payne was found guilty of fourteen counts involving conspiracy, mail fraud, fraud by wire and interstate transportation of goods taken by fraud (18 U.S.C. §§ 371, 1341, 1343 and 2314). Payne appeals from this conviction on three grounds: that the trial court erroneously admitted into evidence proof of a prior conviction; that the trial court erred in admitting into evidence his prior statements; and that the evidence was insufficient to support the verdict. We reject all of these contentions and affirm the judgment. The modus operandi of Payne and co-defendant William Shiller was to set up an office with appropriate trappings, establish a phony line of credit at a reputable bank and place orders with frozen food distributors. In reply to credit inquiries, they would invite the distributors to check with their bank. Also, they would provide a Dun and Bradstreet report which was made up from information they had furnished Dun and Bradstreet. After a line of credit had been verified, the distributors would send a series of shipments of frozen food. In the meantime, Payne and Shiller would have arranged to sell the shipments to other frozen food buyers at discounted prices. When the shipments arrived, they would immediately transfer ownership to the new owner. Payne and Shiller kept the proceeds from all the discounted sales but usually paid the distributor for the first order only in a series of purchases. EVIDENCE OF PRIOR CONVICTION Mail fraud requires proof of specific intent. In meeting its burden, the government offered into evidence proof of a prior conviction for mail fraud in the form of a signed stipulation which was read to the jury. Not only did Payne fail to object, but he indicated his assent by joining in the stipulation. Under these circumstances, only plain error could survive for appellate correction. Silber v. United States, 370 U.S. 717, 82 S.Ct. 1287, 8 L.Ed.2d 798 (1962); United States v. Atkinson, 297 U.S. 157, 56 S.Ct. 391, 80 L.Ed. 555 (1936); Herzog v. United States, 226 F.2d 561, 569 (9th Cir. 1955), cert. denied, 352 U.S. 844, 77 S.Ct. 54, 1 L.Ed.2d 59 (1956). As the crime which resulted in the prior conviction was clearly a prior similar act, there was no error, plain or otherwise. See United States v. Larsen, 441 F.2d 512 (9th Cir. 1971); Fineberg v. United States, 393 F.2d 417 (9th Cir. 1968). PRIOR STATEMENTS After being properly advised of his constitutional rights as required by Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), Payne made statements to postal inspectors with his attorney present. Because his attorney also represented others involved in the crimes and was himself under suspicion, Payne claims that he was denied effective representation of counsel and that, therefore, those prior statements should have been excluded from the trial. Payne’s contention must be rejected for the reasons stated in United States v. Nystrom, 447 F.2d 1350, 1350-1351 (9th Cir.), cert. denied, 404 U.S. 993, 92 S.Ct. 542, 30 L.Ed.2d 545 (1971), where we said: Appeal counsel has pointed to no evidence in the record of a conflict and this Court can find none. Appeal counsel has not shown that appellant’s defense was in any way impaired by the joint representation and the record does not show it was. This Circuit has consistently held that in order to find that a defendant was denied effective assistance of counsel by virtue of a joint representation there must be a showing of a conflict of interest between the jointly represented defendants. (Citations omitted.) Payne has failed to show any harm from his counsel’s advice, nor has he shown that his counsel failed to give any needed advice. SUFFICIENCY OF THE EVIDENCE Payne’s final contention is that the evidence was insufficient to support a finding of guilt. In reviewing the evidence in the light most favorable to the government, Moody v. United States, 376 F.2d 525, 527 (9th Cir. 1967), Thomas v. United States, 369 F.2d 372, 373 (9th Cir. 1966), we find ample evidence to sustain the convictions. Affirmed. . United States v. Kelem, 416 F.2d 346 (9th Cir. 1969), cert. denied, 397 U.S. 952, 90 S.Ct. 977, 25 L.Ed.2d 134 (1970), involved an appeal taken by Payne’s co-defendants in the ease in which Payne pleaded guilty. That case resulted in the prior conviction which was offered. The appellate court discussed the modus operandi of Payne and his then cohorts who, as in the instant case, used time delays and phony credit to defraud their victims.

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Frank E. PELUSO, Appellants, Administrator of the Estate of Terry Peluso v. UNITED STATES of America. Louis J. PELUSO, Jr., and Patsy A. Peluso v. UNITED STATES of America. No. 72-1379. United States Court of Appeals, Third Circuit. Submitted Under Third Circuit Rule 12(6) March 6, 1973. Decided March 6, 1973. James J. McCabe, Jr., Richard A. Kraemer, Philadelphia, Pa., for appellants. Carl J. Melone, Asst. U. S. Atty., Philadelphia, Pa., Harlington Wood, Jr., Washington, D. C., Robert E. J. Curran, U. S. Atty., Philadelphia, Pa., Morton Hollander, Robert M. Feinson, Dept, of Justice, Civ. Div., Washington, D. C., for appellee. Before GIBBONS and HUNTER, Circuit Judges, and MUIR, District Judge. OPINION OF THE COURT PER CURIAM: This is an appeal from an order of the district' court dismissing a complaint for failure to state a claim upon which relief may be granted. The suit is brought pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680, as a survival action by the administrator and a wrongful death action by the parents of decedent, a member of the New Hampshire National Guard who died while on active duty with the United States Army at Fort Dix, New Jersey. At that post he complained of and received treatment for an abdominal condition. The appellants contend that his death was caused by the negligent treatment received from army doctors. The cause of death was acute peritonitis following a ruptured appendix which allegedly was improperly diagnosed and treated from August 23, 1970 to September 4, 1970. In Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950), the Supreme Court held that the United States is not liable for injuries to servicemen which are sustained while on active duty as a result of negligence of other armed forces personnel. Two of the three cases which were before the Court in Feres were medical malpractice eases, and one of these was also a wrongful death action. Thus the case is indistinguishable from this. Feres has consistently been followed by the Courts of Appeals. See, e. g., DeFont v. United States, 453 F.2d 1239 (1st Cir.), cert. denied, 407 U.S. 910, 92 S.Ct. 2436, 32 L.Ed.2d 2436 (1972); Hall v. United States, 451 F.2d 353 (1st Cir. 1971) (per curiam); Henning v. United States, 446 F.2d 774 (3rd Cir. 1971), cert. denied, 404 U.S. 1016, 92 S.Ct. 676, 30 L.Ed.2d 664 (1971); Lowe v. United States, 440 F.2d 452 (5th Cir.) (per curiam), cert. denied, 404 U.S. 833, 92 S.Ct. 83, 30 L.Ed.2d 64 (1971); Buckingham v. United States, 394 F.2d 483 (4th Cir. 1968) (per curiam); Dilworth v. United States, 387 F.2d 590 (3rd Cir. 1967) (per curiam); Bailey v. DeQuevedo, 375 F.2d 72 (3d Cir.), cert. denied, 389 U.S. 923, 88 S.Ct. 247, 19 L.Ed.2d 274 (1967). The rationale of Feres was (1) that the relationship between a soldier and the United States was distinctly federal, while the Federal Tort Claims Act referred, for governing law, to the place where the act or omission occurred, and (2) that there was a federally funded care and compensation system for military personnel. For these reasons the Court concluded that Federal Tort Claims Act should not be construed to apply to armed services personnel for injuries not only in the course of but also arising out of activity incident to service. The appellant argues quite forcibly that the rationale of Feres was abandoned by the Supreme Court when it held in United States v. Brown, 348 U.S. 110, 75 S.Ct. 141, 99 L.Ed. 139 (1954), that a veteran could recover for the negligent aggravation by Veterans Administration Hospital personnel of a service incurred injury, and in United States v. Muniz, 374 U.S. 150, 83 S.Ct. 1850, 10 L.Ed.2d 805 (1963), that federal prison inmates could recover for injuries caused by the negligence of prison supervisors. If the matter were open to us we would be receptive to appellants’ argument that Feres should be reconsidered, and perhaps restricted to injuries occurring directly in the course of service. But the case is controlling. Only the Supreme Court can reverse it. While we would welcome that result we are not hopeful in view of the number of recent instances in which, having been afforded the opportunity, it declined to grant certiorari. Possibly the only route to relief is by an application to Congress. Certainly the facts pleaded here, if true, cry out for a remedy. The judgment of the district court will be affirmed.

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UNITED STATES of America, Plaintiff-Appellant, v. Edmund Herman ROTHFELDER, Defendant-Appellee. No. 72-1617. United States Court of Appeals, Sixth Circuit. Argued Dec. 8, 1972. Decided Feb. 28, 1973. Certiorari Denied June 25, 1973. See 93 S.Ct. 3066. Robert C. Greene, Asst. U. S. Atty., for plaintiff-appellant; John Milanow-ski, U. S. Atty., Grand Rapids, Mich., on brief. M. Robert Carr, East Lansing, Mich. (Court Appointed), for defendant-appel-lee. Before PHILLIPS, Chief Judge, and WEICK and MILLER, Circuit Judges. WEICK, Circuit Judge. The Government has appealed under authority of 18 U.S.C. § 3731, as amended January 2, 1971, from the judgment of the District Court granting the defendant’s pretrial motion to dismiss the indictment which charged him with wil-fully failing to comply with an order of his Local Board to report for induction, in violation of 50 U.S.C. App. § 462. In passing upon the motion to dismiss, the Court, 338 F.Supp. 1164, considered the evidence in the Selective Service file, which disclosed the following facts: On October 15, 1969, when the Local Board had received notice that Roth-felder was a full-time student at Lansing Community College, it reclassified him I-S(C). The minutes of the Local Board indicated a termination date of October, 1970. The Michigan State Selective Service Headquarters requested the file for review, then it wrote to the Local Board stating that normally a I-S (C) classification is made to expire at the end of the registrant’s academic year, and suggesting that the case be reviewed in June, “and if the registrant is not in summer school, his classification should be reopened and considered anew.” The Board followed the suggestion of the State Headquarters and classified Roth-felder in I-A. At that time Rothfelder was not enrolled in any school. The Appeals Board classified him in I-A and he was ordered to report for induction. Rothfelder was indicted when he failed to report. The District Court, construing the applicable regulations (32 C.F.R. §§ 1622.-15 and 1622.25(b)), held that “academic year” meant a full twelve-month year, and it made no difference whether registrant was enrolled in the summer. The Court held that the change of classification from I-S(C) to I-A was illegal as a matter of law. It was influenced by the provisions of 32 C.F.R. § 1622.25(b), which includes a twelve-month period following the beginning of registrant’s course of study, but this regulation seems to apply to a II-S classification rather than a I-S(C) classification. The Court relied on Walsh v. Local Board No. 10, 305 F.Supp. 1274 (S.D.N.Y., 1969), and United States v. Wood, 329 F.Supp. 68 (D.N.H., 1971), and declined to follow contrary decisions in Peller v. Selective Service Local Board No. 65, 313 F.Supp. 100 (N.D.Ind., 1970) , and McLain v. Selective Service Local Board No. 47, 439 F.2d 737 (8th Cir. 1971). To the same effect is the unreported opinion of the Seventh Circuit in Robinson v. Hershey, No. 17,697, decided July 14, 1969. In his brief Rothfelder challenges our jurisdiction to entertain this appeal. The 1971 Amendment to § 3731 reads: “In a criminal case an appeal by the United States shall lie to a court of appeals from a decision, judgment, or order of a district court dismissing an indictment or information as to any one or more counts, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution.” (18 U.S.C. § 3731 (Supp.1972)) In United States v. Sisson, 399 U.S. 267, 90 S.Ct. 2117, 26 L.Ed.2d 608 (1970), it was held that an appeal does not lie from a decision that rests, not upon the sufficiency of the indictment alone, but upon extraneous facts. If the indictment is dismissed as a result of a stipulated fact or the showing of evi-dentiary facts outside the indictment, which facts would constitute a defense on the merits at trial, no appeal is available. This rule was recognized in United States v. Brewster, 408 U.S. 501, 506, 92 S.Ct. 2531, 33 L.Ed.2d 507 (1972), but the Supreme''Court found that the District Court did not rely on factual matter other than facts alleged in the indictment. In the present case, the District Court clearly did rely on facts not alleged in the indictment and based its decision on facts contained in the registrant’s Selective Service file. Its judgment operated as an acquittal. United States v. Findley, 439 F.2d 970 (1st Cir. 1971); United States v. Ponto, 454 F.2d 647 (7th Cir. 1971), affirmed en banc, 7 Cir., 454 F.2d 657. Cf., United States v. Weller, 466 F.2d 1279 (9th Cir. 1972); United States v. Apex Distrib. Co., 270 F.2d 747 (9th Cir. 1959). While these cases involve Section 3731 as it was pri- or to the 1971 Amendment, it is clear that under the Amendment no appeal is available from a judgment of acquittal. The Government relies on language of the Supreme Court in United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (1971), to the effect that there can be no double jeopardy until the defendant is put to trial before the trier of the facts. In that ease, however, the Court found double jeopardy because the trial court abused its discretion by aborting the trial and declaring a mistrial without the consent of the defendant. The appeal is dismissed.

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Samuel P. NORTON & Estate of Beatrice Norton, Deceased, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. Samuel P. NORTON & Estate of Beatrice Norton, Petitioners-Appellees, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant. Nos. 71-1531, 71-1901. United States Court of Appeals, Ninth Circuit. Feb. 1, 1973. Samuel P. Norton, in pro. per. Donald H. Olson, Atty., Los Angeles (argued), Meyer Rothwacks, Atty., Grant W. Wiprud, Atty., Fred B. Ugast, Acting Asst. Atty. Gen., Johnnie M. Walters, Asst. Atty. Gen., Washington,' D. C., K. Martin Worthy, Chief Counsel, IRS, Washington, D. C., for respondent-appellee. Before WRIGHT and WALLACE, Circuit Judges, and CRARY, District Judge. Honorable E. Avery Crary, United States District Judge, Los Angeles, California, sitting by designation. PER CURIAM: Taxpayers, husband and now deceased wife, filed petitions in the tax court for redetermination of the Commissioner’s assessment of additional taxes with penalties for the tax years 1953 through 1959. The cases were consolidated for trial. The tax court sustained the disal-lowance by the Commissioner of certain interest deductions and reduced certain income items. Taxpayers appealed, and a cross-appeal by the Commissioner followed. We affirm. Between 1953 and 1955, taxpayers entered into four transactions from which the disputed interest and income items arose. Although somewhat complicated, the essence of the transactions was that taxpayers would borrow money from a financial institution (Gibraltar) and use these funds to purchase government securities. The securities were to be delivered to the lender as collateral for the loan. Gibraltar advised taxpayers in writing that it had received and was holding the securities as colláteral. That institution probably never had actual custody of the securities, but instead sold them on the same day they were purchased by taxpayers. Each of the transactions involved the transfer of essentially the same amount of money among taxpayers, Gibraltar and a brokerage firm, which purchased the securities, resulting primarily in book entries reflecting offsetting debits and credits. Taxpayers made 73 interest payments on the notes and received credits for alleged interest paid by the government on the securities. The net federal tax result of these transactions was that taxpayers reported large interest expense deductions and a slightly lesser amount of income, much of which was at long-term capital gain rates. Finding the transactions a sham, the tax court disallowed these interest payments and deducted the interest income allegedly received from the securities, as well as the capital gains and losses resulting from their sale. The question presented is whether there were valid indebtednesses requiring payment of true interest or whether these were paper tax shelters with form but no substance. See Int. Rev.Code of 1954, § 163(a); Knetsch v. United States, 364 U.S. 361, 81 S.Ct. 132, 5 L.Ed.2d 128 (1960); Deputy v. duPont, 308 U.S. 488, 60 S.Ct. 363, 84 L.Ed. 416 (1940). An obligation is not necessarily an indebtedness for purposes of interest deductions; taxpayers must actually secure the use or forbearance of money and pay interest therefor. duPont, supra, 308 U.S. at 497-498, 60 S.Ct. 363. This appears to us to be another child, albeit with a slightly different personality, of the “Livingstone” family which, with regularity, courts have found not to be legitimate. See Cahn v. Commissioner, 358 F.2d 492 (9th Cir. 1966) and cases cited therein. Specifically, we cannot distinguish this ease from our prior holding in MacRae v. Commissioner, 294 F.2d 56 (9th Cir. 1961), cert. denied, 368 U.S. 955, 82 S.Ct. 398, 7 L.Ed. 2d 388 (1962). “[T]here was nothing of substance to be realized beyond a tax deduction.” Knetsch, supra, 364 U.S. at 366. 81 S.Ct. at 135. See also Cahn, supra; Williams v. Commissioner, 323 F.2d 656 (9th Cir. 1963); and Kaye v. Commissioner, 287 F.2d 40 (9th Cir.1961). Taxpayers contend they were unaware the institution actually was not holding the securities. Even if true, this would not dictate a different result. MacRae, supra, 294 F.2d at 59; Cahn, supra, 358 F.2d at 493-494. The remaining issues raised by taxpayers do not merit comment. No constitutional rights have been violated.

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UNITED STATES of America, Plaintiff-Appellee, v. Candido FELIX and Gloria Felix, Defendants-Appellants, No. 72-2862. United States Court of Appeals, Ninth Circuit. Feb. 9, 1973. Clyde E. Sullivan (argued), Leon Taylor, Albuquerque, N. M., for defendants-appellants. James E. Mueller, Asst. U. S. Atty. (argued), Sarah Bailey, Asst. U. S. Atty., William C. Smitherman, U. S. Atty., Tucson, Ariz., for plaintiff-appel-lee. Before CHAMBERS and BARNES, Circuit Judges, and JAMESON, District Judge. Honorable William J. Jameson, Senior United ting by designation. States District Judge, District of Montana, sit- JAMESON, District Judge: Each of the appellants, Candido Felix and Gloria Felix, was convicted on one count of importing 6.5 pounds of heroin and on a second count of importing 10 grams of cocaine, in violation of 21 U.S. C. § 952(a) and 18 U.S.C. § 2. It is contended that the district court erred in (1) holding that appellants did not have standing to'move for suppression of evidence, and (2) in denying Candi-do’s motion for acquittal. Appellants were charged jointly with Joe and Kathy Santillanes with importation. Joe and Kathy were also charged with possession. The Government agreed to dismiss all counts against Kathy if she would testify truthfully to her knowledge of the involvement of Candi-do and Gloria. With the same condition, it was agreed that Joe would ‘ plead guilty to one count and the Government would dismiss the remaining three counts. Standing The contraband was seized at the Douglas, Arizona, point of entry from an automobile driven by Joe Santillanes. His wife, Kathy, was a passenger. The automobile was owned by and registered in the name of Joe Santillanes. Appellants were not in or near the automobile or the customs inspection station. They do not claim ownership of the automobile or the contraband and were not in possession of the contraband. They were not the persons against whom the search of the car was directed. In urging standing to move for suppression appellants rely upon Jones v. United States, 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697, 78 A.L.R.2d 233, (1960) holding that where conviction flows from a person’s possession at the time of search he need not make “a preliminary showing of an interest in the premises searched or the property seized” to have standing for a motion to suppress under Rule 41(e) F.R.Crim.P. 362 U.S. at 263, 80 S.Ct. at 732. In applying the teachings of Jones and related cases, this court, in Diaz-Rosendo v. United States, 357 F.2d 124, 131-132, cert. denied 385 U.S. 856, 87 S.Ct. 104, 17 L.Ed.2d 83 (1966), held that where an accused is not on the “premises” where the search occurred and his conviction does not flow from possession of the contraband, he comes within the category recognized in Jones as “one who claims prejudice only through the use of evidence gathered as a consequence of a search or seizure directed at someone else.” 362 U.S. at 261, 80 S.Ct. at 731. More recently in United States v. Carrion, 463 F.2d 704, 706 (9th Cir. 1972) it was held that a co-conspirator in a conspiracy to smuggle and to receive and conceal illegally imported marijuana was without standing to move for suppression of evidence, since possession was not an essential element of the crime of which the accused was convicted. Here the appellants were “aiders and abetters” in the importation of the heroin, and their possession of the contraband was not an essential element of the offense. The court properly denied appellants’ motion to suppress for want of standing. Sufficiency of Evidence Appellants were convicted primarily, but not exclusively, upon the testimony of Kathy and Joe Santillanes. On May 26, 1972, Kathy and Joe drove from Albuquerque, New Mexico to Agua Prieta, Mexico, across the border from Douglas, Arizona. They parked near the Yolando Hotel. Kathy testified that Gloria had arranged with Kathy to make the trip and paid her for it; that Gloria gave Kathy a bag containing the contraband, which Kathy and Joe concealed in the left quarter panel of the Santillanes car; and that Gloria told Kathy to bring the contraband to Kathy’s house in Albuquerque. Both Kathy and Joe testified that on a prior date they met Gloria in Tijuana, Mexico, and that heroin was purchased from a Rose and Guillermo and transported by Kathy and Joe to Albuquerque. Gloria also paid Kathy for that trip. As a part of the Government’s case in chief Kathy testified that on May 26, 1972 she saw appellant Candido, together with Gloria, Rose and Guillermo, near the Yolando Hotel. On rebuttal Joe testified that he saw Candido, Rose and Guillermo, as well as Gloria, near the Yolando Hotel, and that he saw Gloria and Candido having a conversation with Rose and Guillermo. This testimony was properly considered by the trial court. United States v. Calderon, 348 U.S. 160, 164, 75 S.Ct. 186, 99 L.Ed. 202 (1954); Benchwick v. United States, 297 F.2d 330, 335 (9th Cir. 1961). There was evidence that C. F. Felix registered at a motel in Douglas, Arizona immediately across the border from Agua Prieta, on May 26, 1972, giving appellants’ address in Albuquerque and describing an automobile which was registered to appellants. We agree with the district court that there was sufficient evidence to submit the case to the jury as to both defendants. While the contraband was delivered to Kathy by Gloria and the evidence against Candido was circumstantial, there was testimony that immediately prior to the delivery Candido was at the location near the Yolando Hotel with Gloria and that both Candido and Gloria were in conversation with Rose and Guillermo, from whom heroin had been purchased by Gloria on a prior occasion. The evidence “considered most favorably to the government, was such as to permit a rational conclusion by the jury that the accused (Candido) was guilty beyond a reasonable doubt.” United States v. Nelson, 419 F.2d 1237, 1242 (9 Cir. 1969). We are “satisfied that the jurors reasonably could decide that they would not hesitate to act in their own serious affairs upon factual assumptions as probable as the conclusion” that Candido planned and participated with Gloria in the importation of the contraband. Id. at 1245. Affirmed. . The court correctly instructed the jury on the essential elements of the offense and the proof necessary to show that the accused had aided and abetted in the commission of the offense. No exceptions were taken to the court’s charge. . As a part of appellants’ defense Gloria denied any participation in the importation and testified that she had never been in Mexico and that neither she nor Can-dido was in Agua Prieta or Douglas, Arizona on May 26, 1972. Candido did not take the stand. . While Candido did not testify himself, it does not appear that he elected to stand upon the record at the close of the Government’s case. Gloria’s testimony was directly related to appellants’ contention that neither Candido nor Gloria was in Agua Prieta, Mexico or Douglas, Arizona at the time of the importation.

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Daniel COX, Plaintiff-Appellant, v. OTIS ENGINEERING CORPORATION, Defendant-Appellee. No. 72-3256. Summary Calendar. United States Court of Appeals, Fifth Circuit. March 7, 1973. Charles R. Maloney, Martin A. Welp, Jr., New Orleans, La., for plaintiff-appellant. John J. Cooper, New Orleans, La., for defendant-appellee. Before GEWIN, COLEMAN and MORGAN, Circuit Judges. Rule 18, 5 Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: Daniel Cox brought suit against Otis Engineering Corporation under the Jones Act, 46 U.S.C. § 688, and the General Maritime Law for injuries sustained while working as a wireman on the drilling barge, John Haywood. The District Court granted Otis’ motion for a summary judgment on the basis that Cox was not a seaman. We affirm. Cox’s work as a wireline operator did not require him to be assigned to any particular drilling barge in the performance of his duties. Cox was to be on the John Haywood only for two days in performing his work as a wireman. In Bodden v. Coordinated Caribbean Transport, Inc., 5 Cir., 1966, 369 F.2d 273 we said: There are three essential elements in the term “seaman” as used in the Jones Act. First, the vessel on which the claimant is employed must be in navigation. Second, there must be a more or less permanent connection with the vessel, and third, the claimant must be aboard primarily to aid in navigation. Id. at 274. See also Williams v. Avondale Shipyards, Inc., 5 Cir., 1971, 452 F.2d 955, 958 and Sennett v. Shell Oil Company, 325 F.Supp. 1 (E.D.La.1971). Thus, since Cox was not assigned permanently to a vessel, he cannot be classified as a seaman for purposes of the Jones Act. Offshore Company v. Robison, 5 Cir., 1959, 266 F.2d 769, 779. We do not consider on appeal Cox’s claim under the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., since that matter was not raised at the trial court level. See Coleman v. Associated Pipeline Contractors, Inc., 5 Cir., 1971, 444 F.2d 737, 740, and cases cited therein. Affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Willie MOBLEY, Jr., Defendant-Appellant. No. 72-2459. United States Court of Appeals, Ninth Circuit. Feb. 12, 1973. John Spyromilios (argued), Richard L. Romano, San Francisco, Cal., for defendant-appellant. Joseph E. Reeves, Asst. U. S. Atty. (argued), F. Steel Langford, Robert E. Carey, Jr., Asst. U. S. Attys., James L. Browning, Jr., U. S. Atty., San Francisco, Cal., for plaintiff-appellee. Before KOELSCH, CHOY and GOODWIN, Circuit Judges. PER CURIAM: Mobley appeals his conviction after trial to the court for refusing to report for civilian work in violation of 50 U.S.C. App. § 462(a). We affirm. In June 1968, the Armed Forces Examining and Entrance Station (AFEES) gave appellant a pre-induction physical examination and found him acceptable for military service. However, the physical examination papers which AFEES sent to appellant’s local board, while indicating the results of a hearing test of both ears, included a blank audio-gram card. He contends that “the hearing test apparently was not administered” in violation of Army Regulation 601-270, Ch. 4, Sec. 2, ¶ 4-20H(3)(f), because of the blank audiogram card, and so his order to report for work was invalid. He had indicated in his report of medical history that he had had running ears and hearing loss. The only evidence presented was appellant’s selective service file. It shows that a hearing test was given in recording the test results of both ears. “It is the settled general rule that all necessary prerequisites to the validity of official action are presumed to have been complied with, and that where the contrary is asserted it must be affirmatively shown.” Lewis v. United States, 279 U.S. 63, 73, 49 S.Ct. 257, 260, 73 L.Ed. 615 (1928); United States v. Neckels, 451 F.2d 709 (9th Cir. 1971); United States v. Crowley, 405 F.2d 400 (4th Cir. 1968). The record contains no evidence that the hearing test was not in fact administered. Affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Travis Milton POWELL, Defendant-Appellant. No. 72-2683. United States Court of Appeals, Ninth Circuit. Feb. 22, 1973. Joseph F. Ceniceros (argued), Gerald C. Doblie, of Bailey & Doblie, Portland, Ore., for defendant-appellant. D. Richard Hammersley, Asst. U. S. Atty. (argued), Sidney I. Lezak, U. S. Atty., Portland, Ore., for plaintiff-appel-lee. Before KOELSCH and WRIGHT, Circuit Judges, and NEILL, District Judge. Marshall A. Neill, United States District Judge, Spokane, Washington, sitting, by designation. PER CURIAM. This appeal concerns the validity of a search warrant issued upon an affidavit in which the name given for one of the informants was wrong. The government, at the hearing on appellant’s motion to suppress, adduced proof that the particular information appearing in the affidavit was in fact received from one Dorothy Francis, not Dolores Johnson, the source stated in the affidavit, and that the misnomer was due to an innocent mistake. There was no evidence to the contrary, [compare United States v. Upshaw, 448 F.2d 1218, 1220-1221 (5th Cir. 1971)]. Nor does the evidence suggest that the showing of probable cause might have been deficient had the informant been correctly named [compare United States v. Pearce, 275 F.2d 318 (7th Cir. I960)]. We conclude that the error was not of the kind that would invalidate the warrant. The judgment is affirmed. . As the Supreme Court did in Rugendorf v. United States, 376 U.S. 528, 84 S.Ct. 825, 11 L.Ed.2d 8S7 (1964), we assume that an inquiry into the factual accuracy of allegations in the search warrant affidavit may be made. See also, King v. United States, 282 F.2d 398 (4th Cir. 1960); United States v. Pearce, 275 F.2d 318 (7th Cir. 1960); United States v. Upshaw, 44S F.2d 1218 (5th Cir. 1971).

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Robert J. BUTLER, Plaintiff-Appellant, v. Robert L. PHINNEY, District Director, Internal Revenue Service, Defendant-Appellee. No. 71-2046. Summary Calendar. United States Court of Appeals, Fifth Circuit. Feb. 9, 1973. Rehearing Denied March 7, 1973. J. Edwin Smith, Houston, Tex., for plaintiff-appellant. Fred B. Ugast, Acting Asst. Atty. Gen., Meyer Rothwacks, Tax Div., Dept, of Justice, Washington, D. C., Anthony J. P. Farris, U. S. Atty., Houston, Tex., for defendant-appellee. Before THORNBERRY, MORGAN and CLARK, Circuit'Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: The judgment of the district court, 330 F.Supp. 596, is vacated and the ease is remanded for further consideration in the light of Lucia v. United States of America et al., 5th Cir. 1973, 474 F.2d 565. Vacated and remanded with directions.

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Donald S. WEIR, Jr. v. The UNITED STATES. No. 358-69. United States Court of Claims. Feb. 16, 1973. Nichols, J., concurred in an opinion. Carl J. Felth, Washington, D. C., attorney of record for plaintiff. James F. Merow, Washington, D. C., with whom was Asst. Atty. Gen. Harling-ton Wood, Jr., for defendant. Before COWEN, Chief Judge and DAVIS, SKELTON, NICHOLS, KASHI-WA, KUNZIG, and BENNETT, Judges. OPINION KUNZIG, Judge: In issue in this military pay case is whether the refusal of the Army Board for the Correction of Military Records (the Board) to upgrade plaintiff’s “discharge under conditions other than honorable”, is an error of law, where plaintiff is a fully competent, adult soldier with self-confessed homosexual tendencies, confirmed by psychiatric evaluation. We held there is no error of law and the Board’s decision is correct. Further in issue is whether plaintiff is estopped from obtaining a judgment for back pay on his subsequent, sworn claim that he lied to the Army to obtain a discharge, and that the Army improperly failed to ascertain that he lied. We conclude plaintiff is so estopped. Having chosen voluntarily to announce himself under oath as a man with homosexual tendencies to avoid military duty, he cannot now be heard to complain of the consequences of his choice. Only the question of entitlement is presently before this court, both parties having agreed to limit this phase of the case to the question of plaintiff’s right to recover, leaving quantum, if any, for further proceedings. Plaintiff was born in 1942 in New Jersey. He graduated from Hamilton College in 1964, did a brief tour in the Peace Corps before being selected out during training as unsuitable, and then was, for a short time, successful as a real estate salesman in California. Early in 1965 plaintiff enlisted in the Army for three years in lieu of responding to the draft. After training as a power generator specialist, he was assigned to a missile battalion at Fort Hancock, New Jersey as a clerk in the battalion orderly room. Sometime prior to August 12, 1965, plaintiff talked with the base chaplain and told him that he feared his homosexual inclinations would get him into difficulty with men in the barracks. Plaintiff was thereafter examined twice at the Mental Hygiene Consultation Service. First, a competent clinical phy-chologist, Lt. Rudy, examined him. Then both Lt. Rudy and a competent psychiatrist, Dr. Weltner, examined him at a second session. On August 20, 1965, a report was prepared which made a psychiatric evaluation of plaintiff concluding he was fully competent and responsible for his actions. Elimination from the service was recommended with the diagnosis “sexual deviation — homosexuality.” On August 24, 1965, plaintiff was informed by a Major Rollins that he was an investigating officer conducting an investigation of homosexual activity. Major Rollins informed plaintiff of his legal rights. Plaintiff then made a sworn statement reading in pertinent part s follows: I, Donald S. Weir, Jr., RA 19824015, have been counseled and advised of the basis of action recommended. I have a copy of the Commanding Officer’s report and copies of statements submitted to support the recommendations for elimination and the names of prospective witnesses to appear or to submit statements that will be used against me. I have been offered counsel and I have declined to accept this offer. I hereby waive hearing before a board of officers. I understand that if he, [sic] convening authorities direct a discharge, I will not be given another opportunity to appear before a board of officers before being discharged. I would like to make the following statement. I testify that I have a problem with homosexual tendencies which predates my coming on active duty with the US Army. These tendencies have trailed in my background since I was about nine (9) years old. Sporadically, these homosexual feelings supplant what society calls normal heterosexual activities. I have not engaged in these activities with military personnel at either this station or at my previous ones, Fort Belvoir and Fort Polk, respectively. Generally, these engagements were with casual acquaintances whom I have met while on either leave or pass. Since these tendencies could occur in the future, I believe my mission for the US Army would be impaired. On August 31, 1965, plaintiff executed a further statement waiving a hearing before a board of officers and acknowledging he was aware of the adverse effect a “discharge under conditions other than honorable” might have upon him in subsequent civilian life: I hereby waive hearing before a board of officers under AR 635-89 and accept discharge for the good of the service. I understand that my separation from the Army may be effected by a discharge under conditions other than honorable; that I may be deprived of many rights and benefits as a veteran under both Federal and State law; and, that I may expect to encounter substantial prejudice in civilian life in situations where the type of service rendered in any branch of the Armed Forces or the character of discharge received therefrom may have a bearing. Plaintiff was discharged from the service because of homosexuality, as a Class II Homosexual, as outlined in AR 635-89 on October 12, 1965. He was reduced in rank to the lowest enlisted grade and discharged “under conditions other than honorable”. After failing to obtain relief in various forums below, plaintiff now comes before this court stating that he carefully planned and fabricated the story to get out of the Army. He admits he lied under oath at the 1965 investigation and psychological and psychiatric examinations. Nevertheless plaintiff seeks: (Although, as a result of his own fabrication, he never served any of this time and actually earned nothing.) 1. A money judgment paying him for the remaining period of his enlistment. ("Rightful" is his allegation.) 2. Restoration to his rightful grade. (Although, again, as a result of his own fabrication, he wasn't in the service, so obviously couldn't have earned pro-3. Consideration for a promotion to which he would have been entitled. motion.) 4. Alteration of his (Because the Army owed him some sort of duty to find out he was lying, that he was not a homosexual after all, and that he was merely trying to avoid military service.) military record giving him an honorable discharge. Surely, this must be the outstanding example of chutzpah to the nth degree. ' During the intervening years after being discharged, plaintiff had taken no action in this matter whatsover. A dismissal from employment, after it was found that he had falsified his service record, crystallized his desire to change the character of his discharge. He now seeks relief in this court. There are two major issues in this case: the first being whether the defendant erred in not following its own discharge procedures properly; and the second being whether, in any event, plaintiff is estopped from asserting procedural error. We hold for the defendant on both points, each being able to stand on its own as alone justifying our decision. I Plaintiff argues that the Army failed to follow its own procedural regulations. AR 635-89, Section 2a does not permit homosexuals of either sex to serve in the Army in any capacity. Prompt separation of homosexuals is mandatory. However, Section 2b (1) adds that individuals who seek to avoid military service by an unverifiable assertion of homosexuality will not be processed under this regulation. Thus, whether plaintiff must be discharged under AR 635-89 depends upon interpretation of the phrase, “unverifiable assertion of homosexuality”. Section 4b of the same regulation attempts to clarify what the Army must do to verify. Its principal, lead sentence is as follows: A commanding officer receiving information that an individual under his command is a homosexual or has engaged in an act of homosexuality, will inquire thoroughly and comprehensively into the matter and ascertain all the facts in the case, bearing in mind the peculiar susceptibility of such cases to possible malicious charges. Plaintiff, in effect, contends that these regulations, together, require a comprehensive investigation, going perhaps into community life, past experiences, even college and school episodes. One might well question whether his enthusiasm for investigation would have been as great back in 1965. An “investigation” is clearly what plaintiff did not want if his present testimony that this was a fraud on the Army is to be credited. That an admission of homosexuality, confirmed by psychological and psychiatric examinations, might well be considered “verification” seems beyond his comprehension. In addition, the phrase “malicious charges”, suggests that this part of the regulation was aimed at preventing vicious denunciations and libelous charges of sexual deviation by or against third parties. The very sentence in which these words occur clearly refers to the situation where charges are made that a third party is a homosexual, not where an individual admits it by sworn statement. A self-admission by a fully-competent adult cannot possibly come within the “malicious charges” warning contained in the exact same sentence. Language such as appears in this regulation should be given a common sense interpretation. Siegel v. United States, 18 F.Supp. 771, 84 Ct.Cl. 551 (1937). Then, too, since modern, enlightened thinking regards homosexuality as an illness, not a crime, even more logical is an interpretation which would require psychological evaluation, rather than a criminal investigation . . . when the homosexual is self-confessed. Clearly, plaintiff knew his discharge might be other than honorable and that he might encounter substantial prejudice in later civilian life due to his admitted homosexuality. He signed a statement to that effect. Not a scintilla of evidence suggested at that time that he was lying. Finally, an interpretation that sworn admission of homosexuality plus psychiatric confirmation is sufficient for military discharge is in accord with longstanding agency interpretation. JAGA 1960/4901 (October 28, 1960), Comment No. 2. Therefore, both for the reason that the agency’s established interpretation of the regulation is entitled to considerable weight, Barrington Manor Apartments Corp. v. United States, 459 F.2d 499, 198 Ct.Cl. 298 (1972); Cornman v. United States, 409 F.2d 230, 187 Ct.Cl. 486, cert. denied 396 U.S. 960, 90 S.Ct. 435, 24 L.Ed.2d 424 (1969), and that the regulation, reasonably interpreted cannot be said to require the Army to conduct an investigation of plaintiff’s military associates or prior college and business associates especially where there was absolutely no indication that plaintiff was lying, we conclude that there was no procedural violation, but rather full adherence to appropriate Army regulations. A sworn admission of homosexuality plus psychiatric confirmation is sufficient to satisfy the provisions of AR 635-89. II It has long been a standing principle in this court that the conduct and admissions of a party operate against him in the nature of an estoppel when the other party detrimentally relies upon that conduct or those admissions. Mahoning Investment Co. v. United States, 3 F.Supp. 622, 629, 78 Ct.Cl. 231, 246 (1933), cert. denied 291 U.S. 675, 54 S.Ct. 526, 78 L.Ed. 1064 (1934). In the Mahoning case it was clearly stated that [T]he vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both. Id. There is no doubt in the instant case that the government took a position detrimental to itself when it relied upon the 1965 statements of the plaintiff and granted a premature discharge from the Army to a man who had been trained at government expense. The government is thus clearly entitled to invoke the doctrine of equitable estoppel to prevent the plaintiff from profiting from his earlier fabrications. The doctrine of equitable estoppel is an old doctrine to which we continue to adhere. Pacific Far East Line, Inc. v. United States, 394 F.2d 990, 1003, 184 Ct.Cl. 169, 194 (1968). Plaintiff himself was content to be processed under the regulation as it was administered and most certainly benefited by the type of verification that was employed. He gained his discharge, yet was not then subject to public disclosure of his alleged problem. Plaintiff is subsequently estopped after he had benefited from the regulation and its implementation from claiming that something was amiss. Henneberger v. United States, 407 F.2d 1340, 187 Ct.Cl. 265, 267 (1969). In light of the foregoing, we conclude that plaintiff is not entitled to recover. The petition is hereby dismissed. NICHOLS, Judge (concurring): I join in the opinion and findings of the court, but desire to add a few words. It appears to me the really basic error Commissioner Day fell into was his disregard of the rule that a litigant seeking to take advantage of the failure of an agency to follow its own regulations, must show that the regulation involved was made to protect persons in the litigant’s class. The rule is discussed, and cases cited, in Chris Berg, Inc. v. United States, 426 F.2d 314, 192 Ct.Cl. 176 (1970). As there stated, if a regulation appears intended to define and state the rights of a class of persons, it is presumptively intended to benefit those persons. Insofar as the regulations here involved required independent corroboration of a competent soldier’s assertion of his own homosexuality, it appears to me they were intended to prevent avoidance of military service by false confessions. Such a purpose is not compatible with protection of the individual soldier, and indeed as Judge Kunzig rightly points out, could have required an investigation which might have forced plaintiff to defend himself against serious criminal charges, if plaintiff’s present interpretation is correct. It would be a perversion of the judicial process for plaintiff to prevail in this action. However, I do not wish what is said about the claim herein to prejudice plaintiff at that time which sooner or later must come, when those who have resorted to means of avoiding military service even as bizarre as this, or more so, come under consideration for executive or legislative clemency. We are indebted to Trial Commissioner William E. Day for bis findings of fact, which have been adopted in their near entirety, and for Ms recommended opinion, though we have substituted our own in reaching a different result. . A position which would require a security clearance. . While under psychiatric examination, plaintiff described his homosexual contacts since entering military service as having occurred with civilians and as being promiscuous, i. e. plaintiff rarely had more than a single contact with a homosexual partner. . AR 635-89 as amended by Change 1, April 14, 1959 and Change 2, January 22, 1960 reads in pertinent part: Section I GENERAL 1. Purpose. These regulations prescribe the authority, criteria, and procedures for the disposition of military personnel who are homosexuals or alleged homosexuals. 2. Policy, a. Homosexual personnel irrespective of sex will not be permitted to serve in the Army in any capacity, and prompt separation of homosexuals, as defined in these regulations, is mandatory. Homosexuals are unfit for military service because their presence impairs the morale and discipline of the Army, and homosexuality is a manifestation of a severe personality defect which appreciably limits the ability of such individuals to function effectively in society. 1>. The following classes of persons will not be processed under the provisions of these regulations: (1) Individuals who seek to avoid military service by an unverifiable assertion of homosexuality. (2) Those individuals who solely as a result of immaturity, curiosity, or intoxication have been involved in homosexual acts. Such individuals who are not eliminated from the service by sentence of court-martial and who are considered inept, unsuitable, or undesirable by reason of immaturity, alcoholism, or other character and behavior disorders may be eliminated from the service under other applicable regulations. (3) In those rare cases in which homosexual acts are symptomatic of an incapacitating mental illness such as psychosis, medical treatment will be provided and separation from the service by reason of the primary medical condition will be made, if indicated. * * * * * 3. Definitions. For the purpose of these regulations the following definitions apply: а. Homosexual. An individual, regardless of sex, who demonstrates by behavior a preference for sexual activity with persons of the same sex. б. Homosexual act. Bodily contact between persons of the same sex actively undertaken or passively permitted with the intent of obtaining sexual gratification, or any proposal, solicitation, or attempt to perform such an act. e. Glass I. Class I consists of those cases which involve an invasion of the rights of another person, as when the homosexual act is accompanied by assault or coercion, or where the person involved does not willingly cooperate in or consent to the homosexual act, or, if the act is cooperated in or consented to, where the cooperation or consent was obtained by fraud. Class I also includes cases which involve a homosexual act with a child under the age of 16 years, without regard to whether the child cooperated in or consented to such an act. d. Glass II. Class II consists of those cases in which homosexual military personnel have engaged in one or more homosexual acts not within the purview of class I during active military service. Class II also includes all eases falling within class I in which it is determined not to prefer charges, or, if charges are preferred, not to refer them to a court-martial for trial, or such cases where trial is held but does not result in a punitive discharge. No distinction is made in the administrative handling of these cases involving homosexual acts because of the active or passive nature of the conduct of the participants. e. Glass III. Class III consists of those cases in which the homosexual individual involved has not engaged in a homosexual act during active military service, and those cases otherwise within the purview of these regulations but not falling within the purview of classes I or II. * # # * # Section II PROCEDURES 4. Responsibility, a. It is the duty of every member of the military service to be alert to situations affecting discipline, morale, or security of the military forces. In this connection, overt homosexuality is not to be condoned, and when discovered, will be reported immediately through command channels to the commanding officer having jurisdiction over the individual concerned. ii. A commanding officer receiving information that an individual under his command is a homosexual or has engaged in an act of homosexuality, will inquire thoroughly and comprehensively into the matter and ascertain all the facts in the case, bearing in mind the peculiar susceptibility of such cases to possible malicious charges. * * * . Plaintiff served only nine months and eight days, a substantial part of which had been spent being trained at government expense. . Nor is there any evidence here that plaintiff, who now blames the Army for not “investigating far enough”, offered to cooperate in any way by giving names, addresses, dates, etc. . Plaintiff’s argument would reach the unsupportable result of placing a much greater investigative burden on the Army in accepting a self-admission of homosexuality than is placed on a Federal District Court judge in accepting a plea of guilty in a criminal action. Weaver v. United States, 454 F.2d 315 (7th Cir. 1971); United States v. Rizzo, 362 F.2d 97 (7th Cir. 1966). . The belief that fabrication about homosexuality in the easiest “escape route” from the service is not necessarily the case. It is a curious and interesting commentary on the general prejudice against homosexuals and the desire to eliminate them from the service that there would coexist a widespread belief held by responsible persons — then as today — that many individuals might profess homosexuality in order to evade (or seek a discharge from) military service. Such beliefs persist despite obvious evidence of a widespread and deep-rooted revulsion against homosexuality which would preclude the utilization of such evasive methods by non-homosexuals, particularly when more socially acceptable forms of simulation (e. g., physical illness) can be employed. L. West & A. Glass, Sexual Behavior and the Military Law, in Sexual Behavior and the Law 250, 254 (R. Slovenko ed. 1965); see generally Comment, Homosexuals in the Military, 37 Fordham L. Rev. 465 (1968-69). . This situation is not unlike a Conscientious Objector who is excused from certain military service because of his own beliefs without further substantiation. cf. Welsh v. United States, 398 U.S. 333, 90 S.Ct. 1792, 26 L.Ed.2d 308 (1970).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Louis STRUMSKIS v. The UNITED STATES. No. 232-68. United States Court of Claims. Feb. 16, 1973. Louis Strumskis, plaintiff, pro se. B. Frederick Buchan, Jr., Greensboro, N. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Before CO WEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHI-WA, KUNZIG and BENNETT, Judges. OPINION PER CURIAM: This case was referred to Trial Commissioner Joseph V. Colaianni with directions to make findings of fact and recommendation for conclusions of law under the order of reference and Rule 134(h). The commissioner has done so in an opinion and report filed on August 30, 1972. Exceptions to the commissioner’s opinion, findings of fact and recommended conclusion of law were filed by plaintiff and the case has been submitted to the court on the briefs of the parties and oral argument of plaintiff, pro se, and the attorney for defendant. Since the court agrees with the commissioner’s opinion, findings of fact and recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Therefore, plaintiff is not entitled to recover and his petition is dismissed. OPINION OF COMMISSIONER COLAIANNI, Commissioner: This is a patent suit under 28 U.S.C. § 1498. Plaintiff, Louis Strumskis, seeks “reasonable and entire compensation” for unauthorized use by the Government of plaintiff’s patented invention. Only the broad issue of liability is before the court; accounting, if any, is deferred to later proceedings. The patent in suit is United States Letters Patent No. 3,155,065 (hereinafter the “Strumskis” patent), issued on November 3, 1964, to Louis Strumskis on an invention entitled “Ship Stabilizer.” Plaintiff has continuously been the sole and exclusive owner of all rights, title and interest in said patent. This litigation, as originally framed, included the usual issues of patent validity and infringement. However, at the trial defendant agreed, for purposes of this proceeding only, to rely solely upon the defense of noninfringement. While the Strumskis patent has five claims, plaintiff only urges that defendant has infringed claim 5. Background The patent in suit relates to a system which is capable of propelling and steering ships while at the same time stabilizing them from pitch and roll. The system, which is fully described in findings 4 and 5, includes a pair of water inlet ducts that extend from each side of the craft and terminate in water discharge ports at the craft’s stern. In addition, a Y-shaped duct which spans the entire length of the craft is provided with a pair of inlet ports at the ship’s bow and a single outlet port at the ship’s stern. Each of the three intake ducts is equipped with separate multi-blade, open-center propeller mechanisms. Vertically mounted blades or fins are arranged relative to the outlet ports of the water intake tubes for steering of the ship. Stabilization is achieved by gyroscope-controlled hydraulic jacks which, in turn, operate individual arrays of fins that are positioned at the intake ends of the side ducts. Each of the tubes may be sealed by a gate mechanism at the inlet ports. Finally, manholes are provided for access to the water ducts. The Patent Claim Claim 5, the only claim which plaintiff alleges has been infringed by the United States, provides: 5. A ship stabilizer of the character described, comprising three water conducting tubes mounted within the hull of a ship, one of the said tubes being Y-shaped at the bow of the said ship and extending from the bow to the stern of the said ship, and each of the two remaining tubes mountd [sic] on each side of the said ship, and each tube having a mechanically controlled water inlet and a water outlet having a plurality of blades therein, the said outlet blades of said two removing tubes being mounted vertically, thereby providing an improved ' means of steering the said ship, and a propeller of the multi-blade type mounted on bearings and within each one of the said tubes, and a power unit operating each propeller, and the mechanical mechanism of each water inlet embodying a plurality of swinga-bly mounted, horizontally disposed fins in equal vertical-spaced relation to each other, the said fins being mechanically connected to ■ a hydraulic jack automatically operated by a gyro-sope [sic], thereby providing automatic stabilization of the said ship, and each said water inlet having a sliding door valve therein, thereby-providing a means of preventing water from entering the water conducting tubes while they are being repaired or cleaned out, and a manhole in the upper and forward and rearward ends of each of the three water conducting tubes, the manholes also providing a means of maintenance of the inside of the said water conducting tubes. Infringement The trial record fails to support plaintiff’s charge of infringement. Plaintiff has, for reasons which follow, failed to convincingly prove that defendant, during the six years immediately preceding the filing of this action, procured and/or used the invention covered by claim 5 of plaintiff’s patent. Defendant admits, see finding 9, to having procured and/or used six water jet-stream craft of standard commercial design during the relevant six-year period. Both plaintiff and defendant agree, as indicated by finding 10, that none of these six boats, as originally procured, infringed his patent. The parties further agree that repairs made to five of the craft during their Coast Guard service did not change their original configurations in such a way as to amount to infringement of claim 5 of plaintiff’s patent. However, plaintiff continues to urge, see finding 13, that certain structural alterations and changes were made to the sole remaining craft, bearing Coast Guard identification CG-180075, such that a new configuration, which does infringe claim 5 of his patent, resulted. Plaintiff contends that he has adequately demonstrated and proved that defendant has, without his authorization or consent, utilized his patented invention. Plaintiff has attempted to show that defendant has infringed claim 5 of his patent through a number of independent and unrelated theories. Each of plaintiff’s theories will be discussed. Plaintiff’s charge that defendant has by its actions admitted to having infringed claim 5 of plaintiff’s patent will be initially dealt with. Plaintiff, during trial and in his post-trial submissions, has stressed defendant’s failure to execute a so-called March 21, 1969, stipulation of dismissal. Plaintiff’s March 21, 1969, offer of dismissal was treated by the trial commissioner as a contingent motion to dismiss under what is now Rule 102(a) (1) (iii) of this court, see finding 14. Moreover, since it was not executed, as the conditions of the offer required, by the Commandant of the U.S. Coast Guard within the 10 days during which plaintiff’s offer was to remain open, the motion was denied on April 2,1969. Plaintiff contends that an innocent party would have quickly accepted his offer of dismissal. Plaintiff thus reasons that the only explanation for defendant’s failure to act is that defendant must have been using an open-center propeller on its water jet craft. Based on the above, plaintiff urges that defendant’s failure to accept his offer should be interpreted by this court as an admission of infringement. Defendant, on the other hand, contends, inter alia, that plaintiff’s offer was not accepted because it should have been directed to the Department of Justice and not to the Commandant of the U.S. Coast Guard, and also because the offer was unclear and ambiguous. Defendant further contends that its failure to act on plaintiff’s offer cannot be taken as an admission of infringement because such charges were formally and categorically denied by its answer to plaintiff’s petition. Defendant' also argues that plaintiff’s offer was unacceptable because it would not have been dispositive of plaintiff’s charges of infringement, and thus would have amounted to little more than a useless act. Particularly, defendant points out that a careful reading of the alleged offer of dismissal, see finding 14(a), shows it to be premised solely on the Coast Guard’s use or nonuse of an open-center propeller. Defendant correctly points out that the Coast Guard’s use or nonuse of an open-center propeller would not be dis-positive of the issue involved in this case because claim 5 of plaintiff’s patent is directed to a ship stabilizer that calls for a number of other structural elements in addition to an open-center propeller. Accordingly, it is concluded that defendant’s explanation is reasonable and justifies its failure to act on plaintiff’s offer of dismissal. It is further concluded that defendant’s action or nonaction relative to plaintiff’s March 21, 1969, motion does not amount to an admission of infringement of claim 5 of plaintiff’s patent. Plaintiff offered no documents nor oral testimony to show that defendant had indeed infringed claim 5 of his patent. Instead, plaintiff, in addition to his contentions that defendant has admitted to infringing his patent, bases his arguments on a number of inferences which appear to be nothing more than extrapolations of alleged unrelated facts. For example, it appears that the grounds for plaintiff’s original complaint of infringement took shape after plaintiff was allegedly informed by an unidentified retired Coast Guardsman, see finding 13, of the capability of certain of that service’s water jet craft to attain speeds as high as 47 m. p. h. Plaintiff also claims to have established, as a result of a telephone conversation which he had with a Coast Guardsman who was serving on the USS Foxglove, that Coast Guard craft CG-180075 was capable of achieving speeds as high as 47 m. p. h. Plaintiff argues that a water jet craft would not be capable of reaching such high speeds unless it had been modified in a manner as disclosed by claim 5 of his patent. However, none of the witnesses who appeared at the trial testified that CG-180075, the only water jet craft which plaintiff now charges with infringement of his patent, was capable of achieving a speed of 47 m. p. h. Furthermore, even if it can be assumed that plaintiff had convincingly shown that one or more of the Coast Guard’s water jet craft was capable of reaching a speed of 47 m. p. h., plaintiff’s argument would still fall far short of proving his claim of infringement. Plaintiff’s arguments fall short of their mark because he has not shown with any degree of certainty that the water jet craft which allegedly reached those high speeds incorporated all of the structural elements of the patented construction defined by claim 5. Plaintiff next points to a $1,026.33 increase in the value placed on the hull of CG-180075 as evidence of a significant structural modification or alteration having occurred. Plaintiff hypothesizes that the $1,026.33 increase in value-would be enough to pay for the building and installation of an open-center propeller on Coast Guard craft CG-180075. Plaintiff, however, offered no documents nor witnesses to support his claims. Defendant offered no satisfactory explanation for the increase in value of the hull of craft CG-180075. Nonetheless, plaintiff’s speculations on what might have occurred are unconvincing for several reasons. I* In the first place, defendant produced a number of witnesses who testified that changes such as plaintiff indicates must have occurred to CG-180075 would have required authorization from Coast Guard headquarters. However, a search of areas where such records would be stored failed to turn up any such authorization. They further testified that detailed drawings would have been necessary in order to make the type of structural changes which plaintiff contends occurred to CG-180075, but that a search of areas where such drawings would be kept failed to produce any relevant drawings. Defendant also points out that the changes, such as plaintiff contends were made to CG-180075, would have been recorded in the Coast Guard boat records for that craft. A review of the records in evidence fails to indicate that any structural changes such as plaintiff urges occurred. In sum, as more fully treated in findings 17 through 22, defendant’s witnesses testified that a thorough search failed to uncover any records, drawings, or documents which indicate that structural-type changes, such as are called for by claim 5 of plaintiff’s patent, were made to CG-180075. Defendant, however, urges that plaintiff’s charge of infringement is untenable for an even more fundamental reason. Specifically, defendant points out that plaintiff appears to be urging that the use by the Coast Guard of an open-center propeller in CG-180075 is enough to establish infringement of claim 5. The following statement from pp. 5-6 of plaintiff’s November 1, 1971, reply brief confirms that to be plaintiff’s position: The center of Defendant’s Questions found in page 1 of his Part I rests in the vague belief that each and every structurally claimed “mechanism” and act in a conglomerate patent must be found crammed within a singular and accused “mechanism” and act, to infringe. To say that the entire conglomerate of a patent, rather than that one particular “mechanism” therefrom-and-in-question, must be present in that one accused “mechanism” in order to infringe * * * is an absurdity. But to heed such an absurdity would be legally disastrous to any similar and forthcoming Case, for such an imbalance is contrary to basic law. [Italics in original.] * * * * * * * * The only issue at hand lies in Defendant’s usage of Plaintiff’s unique open-center propeller mechanism. [Italic supplied.] Plaintiff’s position, as stated above, is incorrect and does not agree with all known standards and definitions of patent infringement. This court has consistently maintained that the metes and bounds of an invention are defined by the claims of a patent and not its drawings or specification. Kuhne Identification Systems, Inc. v. United States, 82 Ct.Cl. 237, 258, 28 USPQ 151 (1936); Badowski v. United States, 164 F.Supp. 252, 255, 143 Ct.Cl. 23, 27, 118 USPQ 358, 361 (1958). Equally long established is the necessity to resort to the language of the patent claims in determining whether or not an accused device infringes a patent. Dvorsky v. United States, 352 F.2d 373, 173 Ct.Cl. 638 (1965), cert. denied, 393 U.S. 983, 89 S.Ct. 456, 21 L.Ed.2d 444 (1968). As explained in Dvorsky, patent claims are required by statute, 35 U.S.C. § 112, for the very purpose of forcing a patentee to particularly point out and distinctly claim the subject matter which is regarded to be the invention. In Autogiro Co. of America v. United States, 384 F.2d 391, 395-396, 181 Ct.Cl. 55, 60, 155 USPQ 697, 701 (1967), rehearing denied, 184 Ct.Cl. 801 (1968), this court clearly stated: The claims of the patent provide the concise formal definition of the invention. * * * It is to these wordings that one must look to determine whether there has been infringement. In this instance, plaintiff’s claim 5 comprises all of the elements which the Patent Office considered to be necessary to define plaintiff’s ship stabilizer. All the elements which make up the combination defined by claim 5 are considered to be material and necessary. Fay v. Cordesman, 109 U.S. 408, 420, 35 S. Ct. 236, 27 L.Ed. 979 (1883). Accordingly, the omission of any one of the elements making up the claimed combination avoids all charges of infringement. This last principle was announced by the Supreme Court, at least as early as 1842, in the case of Prouty v. Draper, 41 U.S. (16 Pet.) 336, 10 L.Ed. 985, and has been consistently followed by this court. See Pacific Submarine & Earthquake Proof Wall Co. v. United States, 19 Ct.Cl. 234 (1884); Autogiro Co. of America, supra, 384 F.2d at 403, 181 Ct.Cl. at 72. Turning now to a review of the structural combination covered by claim 5, and comparing it to the accused water jet craft, it is concluded, for reasons more fully set out in findings 17 through 22, that plaintiff’s charge of infringement is unsubstantiated and unsupported. Particularly, plaintiff candidly admits that none of the water jet-stream craft as originally procured or allegedly altered or modified ever included a gyroscope. Claim 5 specifically calls for a gyroscope, and for this reason alone plaintiff has failed to sustain his charge of infringement with regard to claim 5. Moreover, plaintiff has not shown that defendant has procured or modified any of the six pertinent water jet craft to include three water conducting tubes in the hulls of the ships, open-center propellers, hydraulic jack operated fins, or many of the other elements called for by claim 5. In sum, plaintiff has not shown that during the six years relevant to this proceeding defendant has procured, modified or used any water jet craft having the structural combination called for by claim 5 of his patent. It is thus concluded that defendant has not infringed claim 5 of plaintiff’s patent. It is felt to be unnecessary to consider the validity of claim 5. Plaintiff is not entitled to recover and his petition is dismissed. Omitted from published opinion.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

The UNITED STATES of America v. The CHEROKEE NATION. No. 173-A. United States Court of Claims. Feb. 16, 1973. Paul M. Niebell, Washington, D. C., attorney of record, for appellee. Earl Boyd Pierce, Ft. Gibson, Okl. and George ■ E. Norvell, Washington, D. C., of counsel. Ralph A. Barney, Washington, D. C., with whom was Asst. Atty. Gen. Kent Frizzell, for appellant. Before COWEN, Chief Judge, DUR-FEE, Senior Judge and DAVIS, SKEL-TON, NICHOLS, KUNZIGr-and BENNETT, Judges. ------ COWEN, Chief Judge. In this proceeding the Government appeals from two decisions of the Indian Claims Commission in its Docket No. 173-A. One issue before the court concerns the proper valuation date for 2,-121,928.74 acres of land owned in fee simple by the Cherokee Nation and ceded to the United States for the use of other Indian tribes pursuant to the terms of a treaty concluded in 1866. The Commission concluded that all the land should be valued, for the purpose of determining its then fair market value, as of June 14, 1883, the date on which the Cherokee Nation deeded the land to the United States. The appellant asserts that the land should properly be valued as of several earlier dates when the Cherokee Nation was deprived of the effective occupancy and use of the land. The second issue involves an offset which the appellant desires to apply against the amount of the award determined by the Commission as additional compensation to the appellee on account of the cession of the 2,121,928.74 acres. A partial payment for the land in question was credited to the Cherokee Nation on the books of the Treasury in 1873; by June 14, 1883, the date of the execution of the deeds, a substantial amount of interest had accumulated on the principal amount of the payment. The Commission found that such interest was neither an additional payment for the land, nor a gratuity, and denied the claimed offset. The appellant contends that the denial of the claimed offset was error. For reasons to be detailed below, we affirm the Commission’s decision with respect to the valuation date, but we have concluded that the Government is entitled to credit for the claimed offset as a matter of law. Because in our view the resolution of the valuation date issue directly controls the disposition of the offset issue, the valuation date will be discussed first. Pursuant to treaties concluded in 1828, 1833, and 1835, between the Cherokee Nation and the United States, the Cherokees exchanged their lands in Arkansas for a large tract of land in the Indian Territory (now the State of Oklahoma). The Cherokees received fee simple title to their new lands under a United States patent issued in 1838; the lands consisted of an eastern segment (known as the Cherokee homeland), and to the west thereof the tract known as the Cherokee Outlet. The Cherokee Outlet comprised a total of 8,144,682.91 acres located in what is now the northern part of Oklahoma between the 96th and 100th meridians. During the Civil War the Cherokees formed an alliance with the Confederate States of America. Following the war, the Cherokee Nation entered into a new treaty with the United States, concluded on July 19, 1866. by which the alliance with the Confederacy was declared void, amnesty was granted to the Cherokees, and their title to the lands west of the Mississippi River was reconfirmed. However, under Article XVI of the Treaty of July 19, 1866, the Cherokees agreed to allow the United States to settle other tribes of friendly Indians on reservations to be set aside on the Cherokee Outlet, but the Cherokees were to receive compensation for the tracts taken for the use of the other tribes. Article XVI declared this arrangement in the following terms: Article XVI. The United States may settle friendly Indians in any part of the Cherokee country west of 96°, to be taken in a compact form in quantity not exceeding one hundred and sixty acres for each member of each of said tribes thus to be settled; the boundaries of each of said districts to be distinctly marked, and the land conveyed in fee simple to each of said tribes to be held in common or by their members in severalty as the United States may decide. Said lands thus disposed of to be paid for to the Cherokee nation at such price as may be agreed on between the said parties in interest, subject to the approval of the President; and if they should not agree, then the price to be fixed by the President. The Cherokee nation to retain the right of possession of and jurisdiction over all of said country west of 96° of longitude until thus sold and occupied, after which their jurisdiction and right of possession to terminate forever as to each of said districts thus sold and occupied. (14 Stat. 799, 804.) Pursuant to the terms of the 1866 treaty and Article XVI thereof, the United States caused other tribal groups of Indians to settle on reservations located on the Cherokee Outlet. As each of the resettled tribes occupied its new reservation, Congress enacted legislation confirming the establishment of those reservations. The enactments and acreage allotted to the several tribes are listed in the following table. Date and Citation Tribal Group Acreage June 5, 1872; 17 Stat. 228 .............. Osage & Kaw ........... 1,570,196.30 April 10, 1876; 19 Stat. 28, 29 ........... 230,014.04 101,894.31 May 27, 1878; 20 Stat. 63, 76 ............ 90,710.89 May 27, 1878; 20 Stat. 63, 74 ........... Nez Perce .............. 129,113.20 March 3, 1881; 21 Stat. 380, 381 ......... Otoe & Mlssouria........ 2,121,928.74 Total .............................. (22 Ind.Cl.Comm. at 420, 429; 9 Ind.Cl.Comm. at 164-165.) The parties to the 1866 treaty were, however, unable to agree on appropriate compensation for the reservation tracts; therefore, the consideration payable to the Cherokees for each tract was ultimately determined by the President. Subsequently, the Cherokees protested that the compensation stipulated by the President was not reasonably representative of the fair market value' of their land. Consequently, the Cherokees refused to execute deeds for the reservation tracts at the times when the other tribes entered onto their reservations, and the compensation therefor was fixed by the President. Presumably for the purpose of resolving the dispute, Congress, by the Act of March 3, 1883, appropriated an additional $300,000 to compensate the Cherokees for the reservation tracts, but also provided that this sum would not be paid until proper deeds had been executed by the Cherokees transferring title to the reservations to the United States for the use of the resettled tribes. It does not appear that the Cherokees were greatly satisfied by this arrangement, but on June 14, 1883, the Cherokee Nation duly executed the requisite deeds, albeit under protest. During the next decade, certain additional compensation was granted to the Cherokees for the said reservation tracts, and by 1893 the Cherokees had received a total of $2,-627,411 as compensation for the 2,121,-928.74 acres of Cherokee Outlet land’ set aside as reservations for other Indian tribes. The Cherokee Nation initiated the instant proceeding before the Indian Claims Commission (Docket No. 173-A of the Commission) to recover just compensation from the United States, under the Fifth Amendment, for the taking of the 2,121,928.74 acres of the Cherokee Outlet as described above. The Commission ruled that the elements of a Fifth Amendment taking cause of action were lacking, and declared that the proceeding could be maintained only on the theory that the consideration paid to to the Cherokees for the reservation tracts ceded to the United States under the terms of the Treaty of July 19, 1866, was “unconscionable consideration” within the meaning of clause 3 of section 2 of the Indian Claims Commission Act of 1946. In order to determine whether or not the compensation paid to the Cherokees for said reservation land was “unconscionable consideration,” it was necessary for the Commission to determine the fair market value of the several reservation tracts at the time the rights of the Cherokee Nation therein terminated. The Commission concluded that the fair market value of the entire 2,121,928.74 acres should be determined as of June 14, 1883, the single date on which the Cherokee Nation executed deeds conveying each of the reservation districts to the United States for the use of the several tribes. In support of this conclusion as to the proper valuation date, the Commission stated: * * * The third paragraph of Article XVI of the 1866 treaty provided for the plaintiff to retain ownership of (there expressed as “right of possession of and jurisdiction over”) the Cherokee Outlet lands used for relocating tribes of friendly Indians “until thus sold and occupied.” Clearly, the treaty contemplated actual sale as a chief element of termination of the plaintiff’s title. And in the United States, termination of the owner’s title to real estate by sale is accomplished by execution of a deed. * * There were deeds in this instance. From the language of the treaty, cited above, this Commission concludes that disposition of this case requires determination of the fair market value of all of the two-million-plus acres as of the date of the deeds: June 14, 1883. (22 Ind.Cl.Comm. at 423; emphasis in •original; citation omitted.) It is the Government’s contention that the determination of the Commission as to the valuation date for the several reservation tracts on the Cherokee Outlet was erroneous. In the appellant’s view, the Cherokee Nation was deprived of “the right of possession of and jurisdiction over” those tracts, within the meaning of the third paragraph of Article XVI of the 1866 treaty, as of the several dates on which Congress confirmed the establishment of the various reservations. The Government views as irrelevant the date when formal title to the reservations passed to the United States upon the execution of deeds, arguing that the lands were “sold and occupied” as contemplated in the treaty when the Cherokees lost their rights of occupancy and use of each tract. Appellant asserts that in such cases as Three Affiliated Tribes of the Fort Berthold Reservation v. United States, 390 F.2d 686, 182 Ct.Cl. 543 (1968); Kickapoo Tribe of Kansas v. United States, 372 F.2d 980, 178 Ct.Cl. 527 (1967); and Northern Paiute Nation v. United States, 27 Ind.Cl.Comm. 39 (1972), this court and the Commission have consistently refused to be bound by “technical questions of passage of title” in determining when the interests of various parties in Indian lands have accrued or terminated. Instead, appellant says that the court and the Commission have looked to other, more practical considerations in making such determinations. The Government also argues that the Cherokee Nation was obligated by Article XVI of the Treaty of July 19, 1866, to transfer formal title to the reservation districts as soon as the reservations were established by the United States and occupied by the several tribes, and the compensation for the lands was determined by the President. The Government maintains that the Cherokees breached this obligation by delaying execution of the'deeds, without justification until required to execute them by the Congressional Act of March 3, 1883. Therefore, the Government reasons, the Cherokees should not be granted a profit for their wrongdoing and receive the benefit of an increase in general land prices, through the Commission’s extension of the valuation date until the time the deeds were executed — June 14, 1883. For the latter proposition the appellant cites Kickapoo Tribe v. United States, supra. However, we affirm the Commission’s conclusion that June 14, 1883, is the proper date for valuation of the subject lands, because we believe that the Commission correctly focused on the significant fact that the Cherokees held title to the Cherokee Outlet in fee simple under patents issued by the United States. This factor distinguishes the instant case from others which involved Indian tribes whose rights in land were of a lesser estate than fee simple title. For example, many cases have dealt with so-called Indian “occupancy title” or “aboriginal title”, by which the rights of a tribe in a given tract of land have depended entirely on the exclusive occupancy and use of the area by the tribe. In such situations the fee is considered to be held by the United States. Aboriginal title has been found to have been extinguished whenever a tribe has lost the exclusive dominion over its land. In other cases, Indian title to land has been characterized as “recognized title”, where the United States accorded formal recognition to the rights and interests of a tribe in land by treaty or by statute. The acts constituting recognition may have given the Indians fee simple title or something less than fee simple title. Therefore, where recognized title has been involved in eases dealing with interests in Indian lands, the court has examined the nature of the title to determine what acts are sufficient to terminate the interests of an Indian tribe in the land. Three Affiliated Tribes of Fort Berthold Reservation v. United States, supra, relied on by appellant, is illustrative of cases dealing with a form of recognized title not amounting to fee simple title. In that case, the Indians held their land under “reservation title”, but the fee had been retained by the United States. 390 F.2d at 689, 182 Ct. Cl. at 549. Eventually some of the un-allotted reservation land was sold to homesteaders. The Indian claimants argued that the compensation received by them for the land was far below the fair market value thereof at the time of the sales and contended that the proper valuation dates of the numerous tracts were the dates on which formal patents were issued to the homesteaders. The court rejected that argument, holding that the tracts should be valued as of the times when the homesteaders entered onto their tracts and took possession them. The court reasoned that such entry gave the homesteaders preemptive rights against anyone except the United States and effectively deprived the Indians of their entire interest in the land. The court did not consider relevant the fact that the United States did not part witK'its purely formal legal title until somewhat later, because it was the termination of the rights of the Indian claimants that was at issue. 390 F.2d at 698, 182 Ct.Cl. at 565-566. It is readily apparent that the decision in the Fort Berthold case is distinguishable from the present situation, wherein the Cherokees had fee simple title to the Cherokee Outlet lands when they entered into the Treaty of July 19, 1866. Consequently, the rationale of the Fort Berthold case does not support the appellant’s position in this case. of When all the provisions of Article XVI of the 1866 treaty are read in harmony, it is clear that formal conveyance of the Cherokee Nation’s fee simple interest in the reservation tracts to the other tribes was an essential element of the transactions contemplated in the treaty. The first paragraph of Article XVI, which gave to the United States the right to settle friendly Indian tribes on the Cherokee Outlet, further provided that the land set aside for the other tribes was to be “conveyed in fee simple to each of said tribes * * The second paragraph set forth the methods by which the consideration payable to the Cherokees for the tracts was to be determined. The final paragraph provided that the Cherokee Nation would “retain the right of possession of and jurisdiction over all of said country” until the land was “thus sold and occupied.” (Emphasis added.) The Cherokee Nation’s “jurisdiction and right of possession” was to “terminate forever” when each of the reservation districts was “thus sold and occupied.” (Emphasis added.) Reasonably construed, Article XVI of the Treaty of July 19, 1866, contemplated termination of Cherokee rights in the reservation tracts only upon the completion of all of the formal elements of the sale transaction: the establishment and occupancy of the several reservation districts, the determination of the consideration payable to the Cherokee Nation therefor, and conveyance of the fee simple title held by the Cherokee .Nation therein. Since all of these preconditions were not satisfied until June 14, 1883, the Commission correctly looked to that date as the proper valuation date for all the reservation tracts set aside for the use of the other tribes. It has long been the rule in taking cases involving Indian lands to which the claimant tribe held fee simple title, that for purposes of determining just compensation, the date of taking is not the time when the Indians were deprived of physical possession and use of their land, but is rather the time when that land was formally conveyed to other parties. Creek Nation v. United States, 302 U.S. 620, 622, 58 S.Ct. 384, 82 L.Ed. 482 (1938); Seminole Nation v. United States, 102 Ct.Cl. 565, 620 (1944), cert. denied, 326 U.S. 719, 66 S.Ct. 24, 90 L.Ed. 426 (1945). In the Creek Nation case, lands held by the Creeks in fee simple were, due to an erroneous survey in 1872, inadvertently set aside by the United States for the use of other tribes. In 1891, before the boundary error was discovered, Congress provided that all of the subject land that had not been allotted to individual Indians in severalty would be sold to homesteaders; numerous tracts were patented to settlers at various times between 1893 and 1909. It was held that neither congressional approval of the erroneous survey in 1873, nor the congressional determination to sell the land to homesteaders in 1891, were acts sufficient to constitute the taking complained of by the Creeks. It was rather “the consequent disposals of the lands to adverse holders [that] constituted the taking by the United States.” 302 U.S. at 622, 58 S.Ct. at 385. The Creeks were held entitled to the present full value of the land as of the dates patents were issued to homesteaders for the several tracts. The facts of the Seminole Nation case were substantially similar to those of Creek Nation. An erroneous 1872 survey resulted in the United States setting aside a reservation for the Pottawatomie tribe on land actually owned by the Seminóles in fee simple. In 1891, while the boundary mistake was yet unknown, the United States and the Pottawatomies agreed that some of the reservation land would be allotted to individual Pottawatomies in severalty and the remainder would be sold to white settlers. The sales to homesteaders were consummated between 1895 and 1913. Following the Creek Nation rationale, this court held that neither the erroneous survey nor the initial settlement of the Pottawatomies constituted a taking of the Seminole land, even though both acts deprived the Seminóles of the occupancy and use thereof. The court stated: * * * In the case at bar plaintiff does not sue for its loss of use and occupancy while the Pottawatomies occupied the lands as a reservation; it claims the fee and sues because it has been divested of this fee. It is entitled to recover as of the date of the divestiture. This occurred when the lands were disposed of pursuant to the agreement with the Pottawatomies under which the Seminole lands were conveyed to the United States. (102 Ct.Cl. at 620.) Consequently, the court valued individual tracts of the former Seminole lands as of the times when such tracts had been allotted to individual Potta-watomies or patented to homesteaders. We think that the principles applied in the Seminole Nation and Creek Nation cases have application to the instant problem, notwithstanding that the basis for recovery in this case is “unconscionable consideration” rather than a Fifth Amendment taking. The terms of Article XVI of the Treaty of July 19, 1866, support the proposition that neither the establishment of reservations on the Cherokee Outlet, nor the occupancy of these tracts by the resettled tribes, sufficed to deprive the Cherokees of their fee simple title, whereas conveyance of that title was a prerequisite of the termination of the interests of the Cherokee Nation. It follows that June 14, 1883, the date the Cherokees deeded the tracts to the United States for the use of the other tribes, is the most reasonable date for valuation of the reservation tracts. The other cases relied on by appellant in support of earlier valuation dates are totally inapposite to the issue herein. In Kickapoo Tribe v. United States, supra, the United States claimed as an offset against an award in favor of the claimants the value of reservation lands gratuitously granted to the Kickapoos. The court determined that the reservation tract should be valued, for purposes of establishing the amount of the offset, as of the time the United States expended funds to acquire the tract for the intended purpose (i. e., use as a reservation), rather than the subsequent dates when the tribe occupied the reservation or when formal title passed to the Kicka-poos. In Northern Paiute Nation v. United States, supra, the Commission concluded that two reservation areas were “established” by the United States when the lands were set aside for that purpose in 1859, rather than in 1874 when the President, by Executive order, decreed the creation of the reservations. Neither case involved the termination of fee simple title to land held by an Indian tribe. We decline to accept the Government’s contention that the Cherokee Nation breached its treaty obligation by delaying the execution of the deeds until June 14, 1883. There was no evidence in the record before the Commission to support a conclusion that the execution of the deeds was unreasonably or unjustifiably delayed. We may agreed arguen- do that the Cherokees could not have refused indefinitely to execute the deeds, for they were bound by the treaty to convey their title to the other tribes. However, it appears that the Cherokees objected to the consideration fixed by the President and delayed signing the requisite deeds pending satisfaction of that objection. That their objections were not viewed as unreasonable even during the period in question can be inferred from the fact that Congress approved increases in the amount of the consideration not only in the Act of March 3,1883, but also in 1888,1889, and 1893. In any event, execution of the deeds in 1883 does not appear unreasonable in view of the fact that the last reservation tract set aside under the terms of Article XVI, the Otoe and Missouria tract, was not confirmed by Congress until 1881. Kickapoo Tribe v. United States, supra, does not support appellant on this point. As noted, the court there found that the United States had expended funds to acquire the tract which was later given to the Kickapoos, in 1866. Noting that the measure of a credit accorded the United States for a gratuity given to a tribe is the amount of an expenditure by the United States, the court reasoned that the Government should not be given a profit on the amount of the credit due solely to the general rise in land prices between the time the land was acquired (as reservation land) and the time it was actually turned over to the tribe. The increase in the value of the land was unrelated to any additional expenditure by the United States. In the instant case we have determined that conveyance of title was, under the 1866 treaty, a necessary condition to the termination of Cherokee rights in the reservation tracts. The fact that the value of the land increased between the date of the treaty and the date the transactions were concluded is incidental to the resolution of the main issue before the court. As previously noted, the Commission found that as of June 14, 1883, the several reservation tracts (2,121,928.74 acres) had a fair market value of $6,-896,000, or $4,268,589 more than the consideration received by the Cherokee Nation during the nineteenth century. The Commission concluded that there was a gross disparity between the consideration paid to the Cherokees, and the then fair market value of the reservation districts, and held that the Cherokees were entitled to an award in the amount of $4,268,589, less allowable counterclaims and offsets. 22 Ind.Cl.Comm, at 425. In a subsequent proceeding, the appellant presented to the Commission five distinct offset claims against the principal amount of the award. The Commission ruled in favor of the Government as to one of the claimed offsets, in the amount of $2,280, and disallowed the other four. The United States here appeals from only one of these adverse decisions, claiming entitlement to an additional credit of $378,751.43 against the Commission’s award in favor of the appellee. We are of the opinion that the United States is entitled to full credit for the claimed offset, as a matter of law, and that the decision of the Commission on this issue must be reversed. The facts surrounding the claimed offset may be briefly set forth. The first reservation tract set aside on the Cherokee Outlet under the terms of Article XVI of the 1866 treaty was the Osage and Kaw reservation, confirmed in Congress by the Act of June 5, 1872. The Act provided that the Cherokee Nation would be compensated for the land set aside for the Osage and Kaw tribal group out of the proceeds of the sale of former Osage land in Kansas. In the Act of March 3, 1873, Congress directed the Secretary of the Treasury to transfer to the credit of the Cherokee Nation on the books of the Treasury the sum of $1,650,600 derived from the sale of the former Osage lands, or as much of said amount as was ^required to pay the Cherokees for the Osage reservation acreage. The Act further provided that the amount so transferred was to bear interest at the rate of five percent. The total acreage set aside for the Osage reservation came to 1,570,196.30 acres, and the President determined that the Cherokees should be paid $.70 per acre for that land. Consequently, on or about June 12, 1873, the Secretary of the Treasury transferred the amount of $1,099,137.41 to the credit of the Cherokee Nation. It is undisputed that between June 12, 1873, and June 14, 1883, that amount, which was then considered to be the total consideration payable to the Cherokees with respect to the Osage and Kaw reservation district, earned a total of accumulated interest on the books of the Treasury of $378,751.43. It is this amount that the Government claims should be offset against the award in favor of the Cherokees. The Commission concluded that the accumulated interest earned prior to June 14, 1883, was neither an additional payment to the Cherokees for the Osage tract nor a gratuity given without expectation of any reciprocal benefit or return from the Cherokees. It was not a gratuity, in the Commission’s view, because the Act of March 3,1873, providing for the payment of interest on the consideration for the Osage reservation, was a step in a tripartite agreement among the Cherokees, the Osages, and the United States. It is our opinion, however, that the Commission’s denial of the claimed interest offset is inconsistent with its determination, which we affirm, that the compensation to which the Cherokee Nation was entitled with respect to the reservation areas set aside for other tribes on the Cherokee Outlet is to be determined as of June 14, 1883. The Cherokee Nation’s entitlement to such consideration also matured as of that date. It is not clear why Congress provided for the payment of interest with respect to the compensation for the Osage reservation in the Act of March 3, 1873. Such a provision is not related to any agreement contained in the Treaty of July 19, 1866, or to any other undertaking between the United States and the Cherokees of which we have notice. However, because the Cherokees were not entitled to the principal amount $1,099,-137.41, transferred to their credit on the books of the Treasury as of June 12, 1873, until June 14, 1883, it seems clear that the interest payments thereon were, a fortiori, entirely gratuitous. It is well settled that, aside from certain exceptions not here relevant, the United States is entitled to set off against the amount of an award made pursuant to the authority of the Indian Claims Commission Act, the amounts of gratuitous expenditures made to or on behalf of the claimant. 25 U.S.C. § 70a; Peoria Tribe v. United States, 169 Ct.Cl. 1009, 1010 (1965); Sioux Tribe v. United States, 161 Ct.Cl. 413, 416, 315 F.2d 378, 380 (1963), cert. denied, 375 U.S. 825, 84 S.Ct. 66, 11 L.Ed.2d 57 (1963). The treaty with the Cherokees did not require it, nor was the Government otherwise obligated, either legally or morally, to pay interest on the purchase price of the land acquired for the Osages. Since the title did not pass until the Cherokees executed the deed on June 14, 1883, the Cherokees received interest to which they were not entitled. For the foregoing reasons, we hold that the United States is entitled to a credit in the amount of $378,751.43 to be applied against the Final Award ($4,266,-309) of the Commission in favor of the Cherokee Nation on account of the cession of a portion of the Cherokee Outlet lands pursuant to the terms of the Treaty of July 19, 1866. The decision of the Commission disallowing the claimed offset in that amount (27 Ind.Cl.Comm. at 27, 33) is reversed. The decision of the Indian Claims Commission establishing June 14, 1883, as the date for valuation of the subject tracts (22 Ind.Cl.Comm. at 437), is in all respects affirmed. Affirmed in part. Reversed in part. . Cherokee Nation v. United States, 22 Ind.Cl.Comm. 417 (1970); Interlocutory Order of February 4, 1970, id. at 437. . Cherokee Nation v. United States, 27 Ind.Cl.Comm. 23 (1972). . The detailed history of the Cherokee Nation and its removal west of the Mississippi River is set forth in Cherokee Nation v. United States, 2 Ind.Cl.Comm. 7 (1952), aff’d, 109 F.Supp. 238, 124 Ct.Cl. 127 (1953); and in Cherokee Nation v. United States, 2 Ind.Cl.Comm. 37 (1952), aff’d, 109 F.Supp. 532, 124 Ct.Cl. 315 (1953). . See Cherokee Nation v. United States, 9 Ind.Cl.Comm. 162, 163, 199-200 (1961). . Id. at 165-166. In that proceeding (Commission Docket No. 173), the Cherokee Nation argued that the United States had compelled it, by force and duress, to cede to the United States the entire 8,-144,682.91 acres of Outlet land, under the terms of an agreement concluded in 1891, for compensation grossly below the then fair market value of that tract. The Commission concluded that under the 1891 agreement, the Cherokees ceded to the Government all the Outlet land then owned by them, 6,022,754.17 acres. The Commission determined the value of that acreage as of March 3, 1893, the date Congress ratified the 1891 agreement. However, the Commission ruled that the Cherokees had lost title to the remaining 2,121,928.74 acres at some time prior to 1891. 9 Ind.Cl.Comm. at 220. The claims of the Cherokees with respect to the latter acreage were severed from Docket No. 173, and redesignated as Docket No. 173-A, which became the subject of the instant case. 22 Ind.Cl.Comm. at 417. . 14 Stat. 799. . The compensation determined by the President for each tract is listed in the following table: Tribe Acreage Total Compensation Price Per Acre Osage & Kaw........................ 1,570,196.30 $1,099,137.41 $.70 101,894.31 48,389.46 .4749 Ponca .............................. 230,014.04 161,009.82 Pawnee ............................ .70 90,710.89 43,078.60 Nez Perce .......................... .4749 129,113.20 61,315.85 .4749 (22 Ind.Cl.Comm. at 429.) . 22 Stat. 603, 624. The Act, in pertinent part, provided as follows: “That the sum of three hundred' thousand dollars is hereby appropriated, to be paid into the treasury of the Cherokee Nation, out of the funds due under appraisement for Cherokee lands west of the Arkansas River, which sum shall be expended as the acts of the Cherokee legislature direct, this amount to be immediately available: Provided, That the Cherokee Nation, through its proper authorities, shall execute conveyances, satisfactory to the Secretary of the Interior, to the United States in trust only for the benefit of the Pawnees, Poncas, Nez Perces, Otoes and Missourias, and Osages now occupying said tract, as they respectively occupy the same before the payment of said sum of money.” . In its finding No. 9 (22 Ind.Cl.Comm. at 430), the Commission found that this total of compensation consisted of the following amounts: “9. The total consideration was made up of the $48,389.46 paid for the Ponca reservation and the $1,099,137.41 paid for the Osage reservation; plus $300,000.00 credited to the plaintiff under the Act of June 16, 1880 (21 Stat. 238, 248) ; plus the other $300,000.00 which was paid over to the plaintiff when it transferred its interest in the i-eservation lands by deeds in 1883; plus $80,000.00 paid in 1888 and 1889; plus $799,884.13 which this Commission determined was a proportionate share for the reservation lands of the consideration paid pursuant to an Act of March 3, 1893 (27 Stat. 612, 640). Cherokee Nation v. United States, 9 Ind. Cl.Comm. 162 (1961), at 232, 233. The aggregate of $165,404.27 owed for the other three reservations was included in the $300,000.00 credited to the plaintiff in 1880. “The total amount of consideration detailed in the paragraph immediately preceding comes to $2,627,411.00. * * * ” . 25 U.S.C. § 70a, which reads, in pertinent part, as follows: “The Commission shall hear and determine the following claims against the United States on behalf of any Indian tribe, band, or other identifiable group of American Indians residing within the territorial limits of the United States or Alaska: ® * * (3) claims which would result if the treaties, contracts, and agreements between the claimant and the United States were revised on the ground of ® * * unconscionable consideration * * . See Miami Tribe of Oklahoma v. United States, 281 F.2d 202, 208, 150 Ct.Cl. 725, 736 (1960), cert. denied, 366 U.S. 924, 81 S.Ct. 1350, 6 L.Ed.2d 383 (1961). . Having so determined the date of valuation, the Commission, after weighing conflicting expert testimony by both parties as to the 1883 value of the reservation tracts, concluded that the then fair market value of the land was $6,896,000, and held: “* * * [Defendant paid the plaintiff a total of $2,627,411.00 for the 2,121,-928.74 acres of the Cherokee Outlet on which were settled tribes of friendly Indians. The fair market value of those two-million-plus acres on June 14, 1883, was $6,896,000.00, or $3.25 per acre. The disparity between the consideration and the actual fair market value was so gross as to amount to unconscionable consideration within the contemplation of Clause 3 of Section 2 of the Indian Claims Commission Act of 1946. Accordingly, the plaintiff may have of and from the defendant the entire difference, that is, $4,268,589.00, less allowable counterclaims and offsets.” (22 Ind.Cl.Comm. at 425.) . I. e. June 5, 1872 for the Osage and Kaw reservation; April 19, 1876 for the Pawnee tract; May 27, 1878, for the Ponca and Nez Perce reservations; and March 3, 1881, for the Otoe and Mis-souria reservation. . 182 Ct.Cl. at 565, 390 F.2d at 698. . The Commission found that the value of land comparable to that in question more than doubled between 1873 and 1883. 22 Ind.Cl.Comm. at 424. . Issuance of a Government patent granting title to land is “the most accredited type of conveyance known to our law.” United States v. Creek Nation, 295 U.S. 103, 111, 55 S.Ct. 681, 685, 79 L.Ed. 1331 (1935). . See Simon Plamondon v. United States. 467 F.2d 935, 199 Ct.Cl. - (1972), and cases cited therein; and Miami Tribe of Oklahoma v. United States, 175 F.Supp. 926, 146 Ct.Cl. 421 (1959). . Simon Plamondon, supra, 467 F.2d at 937, 199 Ct.Cl. at -; Miami Tribe of Oklahoma, supra, 175 F.Supp. at 936, 146 Ct.Cl. at 439. . Miami Tribe of Oklahoma v. United States, supra, 445-446, 175 F.Supp. at 936, 940, 146 Ct.Cl. at 439. Recognized title is also commonly referred to as “treaty title”, “acknowledged title”, or “reservation title. Id. . 175 F.Supp. at 940, 146 Ct.Cl. at 445-446. . The Government does not contend that the Cherokees did not possess fee simple title to the Cherokee Outlet at the time of the 1866 treaty. That issue was settled in two prior proceedings before the Commission. 9 Ind.Cl.Comm. at 210-217; 2 Ind.Cl.Comm. at 36. . 27 Ind.Cl.Comm. 23 (1972). See the Pinal Award of the Commission in Docket No. 173-A, id. at 33. . 17 Stat. 228. . 17 Stat. 530, 538. The relevant portion of the statute provides: “Indian Bureau.■ — That the Secretary of the Treasury is hereby authorized and directed to transfer from the proceeds of sale of the Osage Indian lands in Kansas, made in accordance with the twelfth section of the act of Congress approved July fifteenth, eighteen hundred and seventy, the sum of one million six hundred and fifty thousand six hundred dollars, or so much thereof as may be necessary, to pay for lands purchased by the Osages from the Cherokees, and to place the same on the books of his Department to the credit of the Cherokee Indians, the same shall bear interest at the rate of five per cent., in accordance with the act of Congress approved June fifth, eighteen hundred and seventy-two, entitled ‘An act to confirm to the Great and Little Osage Indians a reservation in the Indian Territory,’ and the acts of Congress and treaties therein mentioned and referred to, whenever the amount to he so transferred shall be certified to the said Secretary of the Treasury by the Secretary of the Interior. * * * ” . See Cherokee Nation v. United States, 102 Ct.Cl. 720, 743-744, 762 (1945).

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2024-08-24T03:29:51.129683

The UNITED STATES of America v. PUEBLO DE ZIA et al. Appeal No. 1-72. United States Court of Claims. Feb. 16, 1973. Mark J. Clayburgh, Albuquerque, N. M., attorney of record, for appellees; Claude S. Mann, Albuquerque, N. M., of counsel. Bernard M. Newburg, Washington, D. C., with whom was Asst. Atty. Gen. Kent Frizzell, for appellant. Before COWEN, Chief Judge, DUR-FEE, Senior Judge, and DAVIS, SKEL-TON, NICHOLS, KUNZIG, and BENNETT, Judges. ON APPEAL FROM THE INDIAN CLAIMS COMMISSION IN DOCKET NO. 137 DURFEE, Senior Judge: The Government here appeals from a final judgment and order of the Indian Claims Commission disallowing certain claimed gratuities as offsets against the final award in the Commission’s Docket No. 137. Docket No. 137 initially involved a claim by the three Indian pueblos of Zia, Jemez and Santa Ana under Section 2, Clause 4 of the Indian Claims Commission Act (60 Stat. 1049, 1050) that through various acts the United States had taken without compensation some 520,000 acres of land in north central New Mexico belonging to these pueblos. In its first ruling on this claim, 11 Ind.Cl.Comm. 131 (1962), the Commis-. sion found that the three pueblos had failed to establish aboriginal use and occupancy title to the 520,000 acre tract. The pueblos appealed only from that part of the determination of the Commission which held that the pueblos failed to prove aboriginal title to some 298.634 acres of land that had become part of the public domain of the United States under the Treaty of Guadelupe Hidalgo with Mexico in 1848, 9 Stat. 922 (1848). In reversing the Commission, this court ruled that as a matter of law the pueblos had established aboriginal title to these 298,634 acres. 165 Ct.Cl. 501 (1964). The cause was remanded to the Commission to determine the time of “taking” of these lands and their values. On the remand the Commission found that the first substantial inroads upon the pueblo lands occurred with the creation of the Jemez Forest Reserve on October 12, 1905. 19 Ind.Cl.Comm. 56 (1968). A substantial part of the 298.634 acres was further found to have been taken by virtue of the creation of Grazing District No. 2 on April 4, 1936, pursuant to the Taylor Grazing Act of June 28, 1934, 48 Stat. 1269. Additionally, the Commission found that a scattering of 114 homesteads deprived the pueblos of aboriginal lands. Pursuant to these findings and decision of the Commission, the parties entered into a stipulation filed on August 27, 1968, and approved by the Commission, setting forth the dates, acreages, and methods by which the Indian title had been extinguished to an agreed 282,415.73 acres of land. On April 21, 1969, defendant United States filed a “Motion for Pretrial Determination of the Basis for the Appraisal of Gratuitous Offsets of Real Property.” The Motion was argued before the entire Commission, and the Commission in a unanimous decision, 21 Ind.Cl.Comm. 316, 318 (1969), ruled that “the proper basis for the valuation of the trust lands as an offset in this case should be the funds actually expended for these lands by the United States rather than their fair market value at the time they were put in trust for the plaintiffs.” BEAL PEOPEBTY OFFSET TABLE Item No. Acreage Indian title Vendor Acquisition dato Trust date Trust act Trust grantee 1 15,609.80 No— Thompson... 11-27-1934 8-13-1949 8-13-1949 Zia 2 4,074.18 No— San Ysidro___ 4-22-1936 8-13-1949 8-13-1949 Zia 3 1,092.05 No— San Ysidro... 4-22-1936 8-13-1949 8-13-1949 Jemez 4 11,466.62 Yes.. Santa Fe R.R_ 1-17-1936 8-13-1949 8-13-1949 Zia 5 1,521.64 Yes.. New Mexico. 7-20-1962 7-20-1962 8-13-1949 Zia 6 40,168.00 No... Espirita...... 12-27-1934 8- 2-1956 8- 2-1956 Zia 7 1,048.00 Yes.. Appellees____ 4- 4-1936 8- 2-1966 8- 2-1966 Zia 35,483.00 8 No— Espíritu...... 12-27-1934 8- 2-1956 8- 2-1956 Jemez 9 869.00 Yes.. Appellees____ 4- 4-1936 9-14-1961 8- 2-1956 Jemez 10 640.00 No... Espirita...... 12-27-1934 6-29-1960 6-29-1960 Zia & Jemez 11 47,438.56 Yes.. Appellees____ 4- 4-1936 9-14r-1961 9-14-1961 Appellees 12 3,620.00 No— Mexico....... 2- 2-1848 9-14-1961 9-14-1961 Santa Ana 13 428.00 No— Thompson... 11-28-1934 9-27-1968 3- 7-1966 Zia 14 2.81 No .. Santa Ana... 1920 9-27-1968 3- 7-1966 Santa Ana 15 2,081.07 Yes.. New Mexico. 8-23-1966 8-23-1960 9-14-1961 Santa Ana 10 1,646.01 Yes.. .New Mexico. 11-12-1968 11-12-1968 9-14-1961 Appellees On December 17, 1970, 24 Ind.Cl. Comm. 270, the Commission ruled that the total fair market value, given the various times of taking, of the 282,415.-73 acres of aboriginal land, was $938,000.00. Against this interlocutory gross award defendant requested an offset of $1,004,718.00 representing the fair market value of 167,067.64 acres of land acquired by the United States and then placed in trust as various times between 1949 and 1968 for the benefit of plaintiff pueblos by Presidential Executive Orders and Acts of Congress. The 167,067.64 acres of claimed offsets have been grouped into 16 items and identified in a Real Property Offset Table, supra, for purposes of this opinion. Defendant United States also sought an offset of $57,451.80 for various gratuitous “cash” expenditures for personal property and services claimed to have benefited the three pueblos. The Commission allowed a real property offset of $118,596.00 for a group of 47,438.56 acres of land, but disallowed 119,629.08 acres of claimed offsets comprising 15 separate groups of land. 26 Ind.Cl.Comm. 218. Of the $57,451.80 claimed “cash” gratuities, the Commission allowed $52,467.92. Appellant, the United States, alleges various errors with respect to the holding of the Commission as to each of the 15 groups of land offsets disallowed, as to the one group of land for which an offset was allowed, and as to two “cash” gratuity items disallowed. We affirm the final judgment and order of the Commission with respect to the real property offsets with the exception of a group of 3,520 acres which was improperly disallowed. We affirm the judgment of the Commission as to the disallowance of the “cash” gratuity of the vehicles, but reverse as to the disallowance of the entire grazing fee “cash” gratuity. I. THE REAL PROPERTY OFFSETS Items 1, 2, 8, 6, 8, 10 and 18 Section 2 of the Indian Claims Commission Act (60 Stat. 1049, 1050) instructs that the Commission, in determining the amount of relief to be afforded successful claimants, “may also inquire into and consider all money or property given to or funds expended gratuitously for the benefit of the claimant and if it finds that the nature of the claim and the entire course of dealings and accounts between the United States and the claimant in good conscience warrants such action, may set off all or part of such expenditures against any award made to the claimant.” Not all “money or property given to or funds expended gratuitously for the benefit of the claimant” properly qualify as an offset under the Act. Section 2 of the Act further provides that a proper offset shall not include inter alia: “ * * ■ * expenditures under any emergency appropriation or allotment made subsequent to March 4, 1933, and generally applicable throughout the United States for relief in stricken agricultural areas * * * ” 25 U.S.C. § 70a. Relying upon this express exclusion, the Commission disallowed offsets for Items 1, 2, 3, 4, 6, 8, 10 and 13. The findings supporting these disallow-ances are supported by substantial evidence and we affirm the Commission’s conclusion as to disallowing these groups of claimed offsets. These eight groups of land were purchased by the United States under emergency relief legislation of the 1930’s, and thereafter placed in trust for plaintiffs. The purchases were made under Title II of the National Industrial Recovery Act of June 16, 1933 (48 Stat. 200), the Emergency Relief Appropriation Act of April 8, 1935 (49 Stat. 115), Section 55 of Title I of the Act of August 24, 1935 (49 Stat. 750, 781), and the Bank-head-Jones Farm Tenant Act of July 22, 1937 (50 Stat. 522, 525). Appellant does not dispute that the lands in question were acquired under emergency appropriations of the kind falling within the improper-offset provisions of Section 2 of the Indian Claims Commission Act. Instead, appellant advances a rather convoluted argument which, when reduced to its essentials, has two prongs. The first prong is an extension of the argument advanced before the Commis-' sion, and reargued before us, that with respect to Items 1, 2, 3, 4, 6, 8, 10 and 13, the claimed offsets are not the “expenditures” for these lands, but rather the lands themselves. Appellant argues that whereas a gratuity of expenditures for land may fall within the prohibition of the Act against allowing as an offset “expenditures” under emergency legislation, a gratuity of the land itself does not fall within this prohibition. Appellant seeks to support its position by attempting to demonstrate that at the time of the appropriations or expenditures under the emergency legislation to purchase the lands in question, there was no expression of the intention that the lands were to be purchased “solely for Indian purposes.” The absence of some link between plaintiff pueblos and the expenditures for these lands is further evidenced, appellant argues, by the lapse of time between the purchases and the times of transfer in trust as well as by the uses other than “Indian purposes” to which these lands were put after their purchase but prior to their dedication to the pueblos. Appellant’s baseline proposition then is that the “expenditures” for these eight groups of land were not “made with appellees in mind,” and therefore the gratuities do not fall within the proscription against offsets of expenditures under emergency relief measures. Thus, says appellant, the Commission was in error when in holding that the gratuities involved are the expenditures and not the lands themselves, it said: “The donation of the beneficial interest to the plaintiff pueblos was no more than the last step in a chain of facts in which the pueblos were always involved from the dates of the initial purchases until the transfers in trust for the plaintiffs.” 26 Ind.Cl.Comm. 218, 235. The record amply supports the Commission’s finding and the Commission therefore properly concluded that the gratuities involved are the “expenditures” excludable as offsets under the Act. As the Commission pointed out, the land acquisition program under which these eight groups of land were purchased included four types of projects, one of which was: “ * * * Indian lands demonstration projects, wherein lands would be acquired for use by certain Indians to improve their economic welfare and lessen relief costs among them * * *.” We do not read the language of Section 2 of the Act dealing with the prohibition against offsets for expenditures under emergency relief legislation as requiring that the claimant Indians receive a primary and immediate possessory interest in the subject matter of the expenditures in order for those expenditures to fall within the prohibition. The record reflects that at the time of the expenditures in question, or shortly thereafter, the Indians were an intended user or in fact used these lands. We do not deem it significant that there may not have been shown an exact simultaneity or relationship between the time of the appropriation or purchase and either the time of the expression of the intention that the purchase be for “Indian purposes” or the time of the beginning of actual beneficial use of the land by the Indians. The second prong of appellant’s argument is that if the Commission is correct that these lands were purchased under emergency relief legislation “with appellees in mind,” then the expenditures were for a specific purpose, and not “ * * * generally applicable throughout the United States for relief in stricken agricultural areas.” The simple answer to this argument is that the Act does not require that the expenditures be “ * * * generally applicable * * * ” but rather that the appropriation or allotment from which the expenditure is made be “ * * * . generally applicable throughout the United States for relief in stricken agricultural areas.” Indeed, the reading of this clause opted for by appellant would completely emasculate the prohibition against offsets of expenditures under relief measures. To reason that because the pueblos were the intended beneficiaries of the expenditures, the expenditures could not have been made under the appropriations or allotments “ * * * generally applicable * * * ” would have the effect of never prohibiting the offset of expenditures made under emergency appropriations (for relief in stricken agricultural areas) which are in part intended to benefit claimants such as plaintiffs in this case. The Government seeks to support its reading of the statute by noting that Section 2 of the Act specifically provides that lands purchased under Section 5 of the Indian Reorganization Act (hereinafter I.R.A.) of June 18, 1934, 48 Stat. 984, 25 U.S.C. § 465, are to be allowed as offsets. Section 5 of the I.R.A. permits the Secretary of the Interior to acquire lands, water rights, or surface rights to lands “ * * * for the purpose of providing land for Indians.” 25 U.S.C. § 465. The statute authorizes a separate and distinct fund to be appropriated for acquiring these lands. The Government reasons that since Section 5 of the I.R.A. involves expenditures specifically for “Indian purposes” and since Section 2 of the Indian Claims Commission Act expressly provides that expenditures under Section 5 of the I.R.A. are to be allowed as offsets, then the legislative intent must be that any expenditures to purchase land specifically for Indian purposes, regardless of the source of the funds, are proper offsets. This reading of Section 2 flies in the face of the emphatic and categorical language of the statute that: “ * * * expenditures under any emergency appropriation or allotment made subsequent to March 4, 1933, and generally applicable throughout the United States for relief in stricken agricultural areas * * shall not be a proper offset against any award.” [Emphasis added.] 25 U.S.C. § 70a. Since we hold that the Commission properly excluded Items 1, 2, 3, 4, 6, 8, 10 and 13 as offsets against the principal award, we need not consider the alternative grounds upon which the Commission excluded some of these groups of land. Nor is it necessary to consider appellant’s argument that these lands should have been valued at their fair market value at the time they were placed in trust since these lands were properly disallowed as offsets under a statutory exclusion, and hence the question of valuation is not reached. Item 14 Section 2 of the Indian Claims Commission Act expressly provides that no offset will be allowed for monies spent for “ * * * health (or) educational purposes * * >:'.” Relying upon this exclusion the Commission held that Item 14 was an improper offset. We agree. There is substantial evidence in the record to support these findings upon which the determination is based. Item 14 consists of 2.81 acres of land which was Santa Ana Pueblo fee title land when condemned by the Government in 1920 for school purposes. A school was built thereon and used as such until abandoned as a school by the United States in July 1960. From this date until June 1965 the site was used as a meeting place for the tribal council, and for other community gatherings. During this time a portion of the site was also used by the Public Health Service. By the Act of March 7, 1966, 80 Stat. 30, the 2.81 acres of land were placed in trust by the United States for the Santa Ana Pueblo. The transfer of title to the pueblo was effective excluding mineral interests, upon publication of notice in the Federal Register on August 27, 1968, 33 Fed.Reg. 12108. The Federal Register declaration provides that the site is subject to use by the Public Health Service for health purposes so long as required. Since the transfer to Santa Ana, a headstart program for pre-school children has been operated on the premises by the pueblo and a portion of the area is still used by the Public Health Service. The land was originally condemned for school purposes; has been used continuously for school purposes except for a hiatus during the 1960’s when it was used by the Public Health Service; and now continues to be subject, in whole as well as in part, to health uses. The Commission therefore correctly found that the site is disqualified as an offset under the health and education exclusion of the Act. Items 5, 7, 9,15,16 Items 5, 7, 9, 15, and 16 are groups of land included within the 298,634 acres regarding which this court previously ruled that the pueblos had established aboriginal title. 165 Ct.Cl. 501. These five groups of land formed part of the lands found by the Commission in its earlier decision, 19 Ind.Cl.Comm. 56, to have been taken from the pueblos by the United States through the creation of Grazing District No. 2 on April 4, 1936. Appellant does not now dispute either that these five items were aboriginally owned by plaintiff pueblos or that the United States took these lands. So these five tracts undisputably form part of the aboriginal land on which the interlocutory award of $938,000.00 was based. We have now a novel situation where the United States in effect seeks to set off against the award for the initial taking of these groups of land the subsequent transfers in trust of the same lands back to the pueblos from whom the acreage was first taken. The Commission found that from the time of taking to the time of transfer in trust the pueblos had lost use of Item 5 for 26 years; Items 7 and 9 each for 20 years; Item 15 for 30 years; and Item 16 for 32 years. In computing the net amount of offset which the Government should be allowed for returning these aboriginal lands, the Commission reasoned that the value of the temporary loss of these lands to the pueblos should be offset against the offset sought by the Government. In other words, a counter offset was necessary The counter offset was valued using the rule of Johnson v. United States, 2 Ct.Cl. 391, 416 (1866) that when the Government takes land on a temporary basis, it is established: “ * * * that the measure of the damages must be limited to the value of this temporary occupancy, as though the claimant had leased and the government had rented the premises * * *.” Johnson sanctioned the use of calculating damages for temporary loss of use by multiplying the number of years of lost use times the annual rental value computed as some percentage of the fair market value at the time of the taking of the land. Likening the taking and then return of aboriginal land to a “temporary taking,” the Commission deemed that a fair annual rental value of each of the lands in question to be five percent of the value of the land. Since the period of “temporary taking” of each group of land was 20 years or more, the total value of each of the counter offsets was 100% or more than the value of each possible respective offset. Each counter offset thus equaling or exceeding its offset, no offset was allowed for any of these five items of land. Appellant has vigorously argued that the theory of “temporary taking” is inapplicable to this case since there was, as the Commission itself found, a clear extinguishment of Indian title to all of these five groups of land in 1936, the theory of temporary taking being appropriate only where some vestige of title remains in the claimant. We think appellant’s argument would have force had the Commission been using the theory of temporary taking initially to calculate the principal award to which appellees were entitled for the taking of these lands. However, the Commission was not' employing the theory for this purpose. To reconcile the equities involved and to find consistently with the spirit of the Act, the Commission adopted the theory of temporary taking and counter offsets to deal with the wholly unique situation presented by a claimed offset consisting of aboriginal lands. The Commission used the theory of temporary taking not to calculate in the first instance the award of damages to which the pueblos were entitled, but rather to evaluate the offset itself. Underlying this admittedly unique treatment of offsets was the Commission’s belief that it is inequitable and contrary to the spirit of the Act to allow the award for taking of aboriginal land to be diminished by credit for returning the same land where the value of the temporary deprivation of use and enjoyment of the land exceeded the value of the land at the time of the taking. Especially unfair in the Commission’s view would be to allow the Government to take the aboriginal land, deprive the owners of use, and then return the land claiming as offset the appreciated value of the land as of the time of the transfer in trust and not the value as of the time of the original misfeasance of taking without compensation. At the heart of the matter the Commission was seeking to avoid the absurd result of permitting the Government virtually free use of Indian lands for periods varying from 20 to 32 years. This result would have obtained because these five offsets sought by the Government would have canceled out the award for the initial taking of these same lands under any of the valuation theories advanced in this case. The Government has repeatedly argued that the proper basis for valuation of all contested offsets in this case is the fair market value at the time of the gratuity rather than the “funds ex-N pended,” i. e., purchase price, for the individual land offsets. In this case, the Commission valued each of these five land offsets at neither the purchase price of the offset nor at its fair market value at the time of the gratuity. In effect, the Commission valued the offsets at the fair market value at the time of the taking. Thus, there was in fact used a valuation method different from either that which the Commission claimed it would use (21 Ind.Cl.Comm. 316, 319), and different from that method argued for by appellant. With respect to the unique situation presented by a claim for offsets of aboriginal land, the valuation method chosen by the Commission is consistent with the Indian Claims Commission Act. As we have said before in Ponca Tribe v. United States, 183 Ct.Cl. 673, 689 (1968): “* * * the gratuity provisions, by allowing offsets for either ‘property given * * * or funds expended’ present the court with a choice between applying the purchase price of property (the funds expended) or its value as of a given date in reduction of the claim.” The Act does not specify that “property given” be valued without exception as of the date of the gratuity. The burden is on appellant to demonstrate that the determination of the Commission is arbitrary. United States v. Assiniboine Tribes, 428 F.2d 1324, 1333, 192 Ct.Cl. 679, 696 (1970). That burden has not been met. Appellant has argued that our decision in Kickapoo Tribe v. United States, 372 F.2d 980, 985, 178 Ct.Cl. 527, 534-535 (1967), favors permitting the Government these offsets valued at their fair market value at the time of the transfers in trust of these lands to the pueblos. Under the facts of this case nothing in Kickapoo favors such a result. The repeated and moving pleas of Indians to be compensated for the taking of their lands was an inducement to providing a systematic method of settling, once and for all, Indian land claims accrued before 1946. The legislation which, with amendments, was finally enacted to provide such relief was “ * *- * primarily designed to right a continuing wrong to all Indian citizens for which no possible justification can be asserted.” The discretion to be given the proposed Indian Claims Commission in passing upon offsets was the subject of Congressional disagreement. The House of Representatives’ version of H.R. 4497, which was one in a series of bills providing for an Indian Claims Commission and which, with amendments, ultimately became law, provided in Section 2 in part that: * * * In determining the quantum of relief the Commission shall make appropriate deductions for all payments made by the United States on the claim, and for all other offsets, counterclaims, and demands that would be allowable in a suit brought in the Court of Claims under section 145 of the Judicial Code (36 Stat. 1136; 28 U.S.C. § 250), as amended. Where the Commission determines that the claimant is entitled to relief, in whole or in part, solely on the grounds specified in clause (6) of the first paragraph of this section, it shall inquire into all expenditures or grants of money or property, including gratuities, made by the United States for the benefit of the claimant, and shall make such deductions on account thereof, in addition to the deductions required by the preceding sentence, as it finds the entire course of dealings and accounts between the United States and the claimant in good conscience warrants. [Emphasis added.] Clause (6) of the first paragraph of Section 2 of the bill relates to “claims of whatever nature which would arise on a basis of fair and honorable dealings, even though not recognized by any existing rule of law or equity.” Thus, the House version of H.R. 4497 provided that an offset for gratuities “shall” be considered only in claims based upon “fair and honorable dealings.” The Senate struck from H.R. 4497 the above-quoted House language governing offsets- and substituted in lieu thereof the following: Whenever the Commission shall determine that a claimant is entitled to relief it shall inquire into and consider all counterclaims and setoffs and demands that would be allowable in a suit brought in the Court of Claims under section 145 of the Judicial Code (36 Stat. 1136, 28 U.S.C. § 250), as amended; and it may also give weight to all money or property given to or funds expended gratuitously for the benefit of the claimant. [Emphasis added.] In drafting the proposed amendment the Senate Committee on Indian Affairs rejected an amendment to H.R. 4497 proposed by then Attorney General Tom Clark which captured language declaratory of policy included within the General Appropriations Act of August 12, 1935. The rejected amendment read: Whenever the Commission shall determine that a claimant is entitled to relief it shall inquire into and consider all counterclaims and set-offs and demands that would be allowable in a suit brought in the Court of Claims under section 145 of the Judicial Code (36 Stat. 1136, 28 U.S.C. § 250), as amended, as well as all money or property given to or funds expended gratuitously for the benefit of the claimant. [Emphasis added.] The Houses of Congress could not agree upon the Senate amendment, and a conference was agreed upon. The conference produced the compromise language, now the law governing offsets. It is important to note that the present law reflects not the hortatory language of the House version of H.R. 4497 that the Commission “ * * * shall inquire into all expenditures or grants of money or property, including gratuities, made by the United States for the benefit of the claimant, and shall make such deduction on account thereof * * * ” [Emphasis added], but rather reflects the more discretionary language of the Senate version which provided that the Commission “may” make such inquiries and deductions, having satisfied itself that the nature of the claim and course of dealings and accounts in good conscience so warrants. The House managers of the conference viewed the compromise language as follows: The bill as originally passed by the House also required deduction of legal offsets in all. cases and permitted, in the discretion of the Commission, deduction of gratuities in cases based upon “fair and honorable dealings.” The Senate amendment made all types of deductions wholly discretionary with the Commission. The conferees agreed that the Senate amendment gave too broad a discretion to the Commission and accordingly rewrote the section to require, first, that all deductions generally allowable in the Court of Claims against non-Indian claimants shall be allowed by the Commission in cases heard under, this act, and, secondly, that gratuities of certain specified types, which are not allowable in the Court of Claims against non-Indian claimants, shall not be allowed by the Commission under this act against Indian claimants. The effect of the substitute language is to limit the discretionary authority of the Commission and to remove in large part the possible discrimination against Indian claimants in the matter of gratuities. * * * In the House conferees’ view, the Senate amendment gave complete and unchecked discretion to the Commission to allow or disallow all types of offsets. In cutting back upon this untrammeled discretion, however, the conferees still left latitude for the discretion of the Commission in considering and deducting gratuities as offsets. The House conferees noted that: “In no other field of law, known to your conferees, is a defendant permitted to set off against a valid judgment a gratuity given to the plaintiff.” The conferees were therefore attentive to enacting language permitting the Commission to avoid results at variance with the purposes of the Act. We think the Commission was right, and acting within its discretion, when it disallowed the claimed offsets of aboriginal lands using a theory of temporary taking. We cannot say that in the exercise of its discretion the Commission erred in this limited use of the theory of temporary taking in valuing and finding inappropriate these five claimed offsets of aboriginal land. We are mindful that “the Act clearly authorizes the Commission to allow eligible gratuities as offsets against any award.” United States v. Delaware Tribe et al., 427 F.2d 1218, 1221, 192 Ct.Cl. 385, 390 (1970). And we are not disagreeing with our holding in Red Lake, Pembina & White Earth Bands v. United States, 164 Ct.Cl. 389, 396 (1964), when we said: [U]nder the Act, “gratuities” can be deducted from awards. Congress so enacted the law, and we can hardly say that in creating and vesting in the Indians a right to relief, Congress could not impose conditions and limits on the award of that relief. We are saying, however, that we agree, and it is within the discretion of the Commission to determine, that these claimed offsets should not be allowed so as to produce an absurd result at variance with the intent of Congress. We noted in Assiniboine, supra, 428 F.2d at 1333, 192 Ct.Cl. at 696, that Section 2 of the Act: * * * permits the Commission to exercise a certain amount of discretion in determining whether gratuitous payments should be offset against awards made to Indian tribes. As long as the Commission does not abuse this discretion by arbitrarily refusing to allow gratuitous offsets without considering the nature of the claim and the course of dealings between the parties, then this court should not interfere with such a determination. We are not dealing here with an inflexible rule applied across the board by the Commission such as was true in Delaware, supra. Appellant has argued that the Commission “waived any further discretion to deny legally proper offsets by its finding, as a fact, that the entire course of dealings between the United States and appellees was such as in good conscience to warrant the allowance of all legally proper offsets to appellant.” The actual determination of the Commission was worded as follows: Section 2 of the Indian Claims Commission Act (60 Stat. 1049, 1050) permits the consideration of gratuitous expenditures as offsets if the entire course of dealings and accounts between the United States and the Indians in good conscience warrants such action. We are satisfied that the course of dealings between the plaintiffs and the defendant has not been such that the United States is prohibited from receiving credit for such .-gratuitous offsets as may be allowable. 26 Ind.Cl.Comm. 218, 222. This language of the Commission is found in its remarks prefatory to considering on a subject matter group-by-group basis the various claimed offsets of the Government. The language is in the negative and is not an affirmative assertion, as appellant contends, that all offsets will be allowed which do not fall under some express prohibited category of expenditures under Section 2 of the Act. We read this determination of the Commission to say no more than having considered the entire course of dealings and accounts between the United States and plaintiff pueblos, the Commission was satisfied that the course of dealings and accounts did not warrant a blanket exclusion of all claimed offsets. The offset provision of the Act clearly contemplates instances in which all gratuities may be disallowed on an overall basis and other instances in which certain classes of gratuities can be rejected for reasons pertaining either to the nature of the claim or the history of the dealings and accounts. The Commission was doing no more than announcing that it had found no reason in good conscience for a dragnet exclusion of all gratuities. This determination did not preclude it from excluding selected classes of gratuities, such as claimed offsets of aboriginal lands, for reasons unique to the class. Moreover, the Commission in this prefatory remark did not address itself to the “nature of the claim.” In this case the nature of the claim, e. g., a claim for compensation for the taking of aboriginal lands with a countervailing claimed offset of the same aboriginal lands, is the nexus for the disallowance. Since we hold that these five groups of land were properly disallowed, we need not reach the question of alleged errors in alternative grounds upon which the Commission denied some or all of these claimed offsets. Item 11 Item 11 produced the only land offset permitted by the Commission in this ease. Item 11 is aboriginal land which the Commission found taken by appellant through the creation of Taylor Grazing District No. 2 in 1936. 24 Ind. Cl.Comm. 270, 284. The Commission further found that Item 11 was returned to the appellees’ use and enjoyment in 1939 although the land was not transferred in trust to the pueblos until passage of the Act of September 14, 1961, 75 Stat. 500. 26 Ind.Cl.Comm. at 258, 259. Again treating this interruption of use and enjoyment as a temporary taking, the Commission determined that appellant was entitled, after a counter-offset adjustment for the loss of use and enjoyment for three years, to a net offset of $118,596.00. 26 Ind.Cl.Comm. at 259. Appellant does not argue that the evidence in the record does not support the land values computed by the Commission. Rather, appellant objects to the valuation method of “temporary taking” used by the Commission. What we have said above with regard to the good-conscience discretion of the Commission in the treatment of claimed offsets of aboriginal lands applies here. The use of this valuation method is not contrary either to Ponca, supra, or Kickapoo, supra, neither of which dealt with the species of offset claimed by the Government in Item 11. We similarly dispose of appellant’s argument that Item 11 should be valued as of the date of the gratuitous transfer in trust on the same grounds as we advanced above, with respect to Items 5, 7, 9, 15, and 16. Item 12 Item 12 represents 3,520 acres of land which was purchased by the United States from Mexico in 1848, and was outside appellees’ aboriginal area. 26 Ind.Cl.Comm. at 259. No Indian title to it was extinguished when it was placed in trust for the pueblos under the Act of September 14, 1961, 75 Stat. 500. It was land which was in all respects a new donation. As a foundation for its disqualification of Item 12 because appellant failed to introduce evidence of any “expenditure” for this land, 26 Ind.Cl.Comm. at 239, the Commission had preliminarily decided that all offsets were to be valued according to the “funds expended,” e. g., purchase price, for the land rather than according to the “property given,” e. g., fair market value as of some date. The Government has argued that in the decision of September 15, 1971, 26 Ind.Cl.Comm. 218, the Commission erroneously suggested that it “has no discretion to allow the fair market value of ‘property given’ as an offset,” and for this reason refused to consider the fair market values at the times of the transfers in trust of the claimed gratuities. We do not so read the opinion of the Commission. The Commission considered only the “expenditure basis” of the offsets because it had formerly ruled in 21 Ind.Cl.Comm. 316, that this valuation method was the law of this case. The Commission did not suggest that this valuation method is compelled in every ease. In support of the uniform rule of “funds expended” which the Commission intended to apply across the board to all claimed land offsets in this case, the Commission offered this rationale: The soundness of this principle is illustrated in the present case. Here some aboriginal title lands taken from the Indians in 1936 were returned in 1961. Presumably if the more recent market value were to be offset, the Indians might be said to owe the United States some balance for having their lands taken from their control for some years. We do not think Congress intended such a result under the statutory language “ * * * may set off all or part of such expenditures against any award * * (25 U.S.C. § 70a) [Emphasis added.] We cannot countenance a reading of the Act that would allow the Government to take lands from the Indians, hold them for appreciation, and avoid liability for the taking by a return of a fraction of what was taken. See Citizens Band of Potawatomi v. United States, 19 Ind.Cl.Comm. 368 (1968). [21 Ind.Cl.Comm. 316, 319.] We need not pass upon the propriety of this blanket rule for valuing offsets in this case since the issue is not reached. While the rationale supporting this rule may apply to other offsets, it is abundantly clear that it in no way supports valuing Item 12 on the basis of “funds expended” rather than the “property given.” Item 12 was not aboriginal land. The failure of the Government to introduce evidence of an “expenditure” for Item 12 is fatal only if the rationale for valuing this item on a “funds expended” basis has application to the item. When the Commission concluded that as a matter of law the proper basis for valuing Item 12 was the “funds expended,” it thereby applied a valuation criterion to this item for a reason wholly alien to this item, namely, that aboriginal land was involved. The statute giving this court jurisdiction to review final determinations of the Commission directs us to ascertain whether “ * * * the conclusions of law * * * are valid and supported by the Commission’s findings of fact.” 25 U.S.C. § 70s. The fact that Item 12 is not aboriginal land is wholly at variance with the reason supporting the conclusion that the proper method of valuation for this item is the “funds expended” for the property. We do not intimate whether or not Item 12 should, upon remand, be valued at “funds expended” or “property given.” Regardless of the method selected by the Commission, however, both parties should be given the opportunity to introduce relevant evidence as to value. II. THE “CASH” GRATUITIES The Commission refused to allow as offsets expenditures (1) for certain farm vehicles and (2) for licenses purchased on behalf of appellees to permit them to graze cattle on Government lands. The amounts involved are $191.-61 and $252.33, respectively, which appellant deems “small in amount but important in legal principle.” The vehicles involved are five wagons purchased in 1915 for 19 pueblos, and one tractor purchased in 1928 for eight pueblos. Although agreeing with the general principle that it is appropriate to offset a proportionate share of expenditures against plaintiffs where the goods are such as could be ratably apportioned, the Commission found that the pueblos were widely dispersed, and that the vehicles could not be reasonably apportioned. 26 Ind.Cl.Comm. at 226, 227. We agree. There could be no reasonable apportionment of expenditures for these few vehicles which could not be reasonably utilized by so many pueblos over such a widely scattered area. Substantial evidence supports the Commission’s finding and determination. The Commission disallowed the expenditure of $252.33 for the rental of grazing land on behalf of appellees for two reasons. First, appellant-defendant had offered only one voucher in the amount of $45.57 in payment for a cattle-grazing license for the Zia Pueblo as evidence of the full $252.33 claimed. 26 Ind.Cl.Comm. at 228, 229. Second, the $45.57 was actually a check drawn on Indian Service funds payable to the Treasurer of the United States for the General Land Office, Santa Fe, New Mexico. In short, the expenditure “ * * * was a mere bookkeeping transaction * * a transfer of Government funds from one account to another.” 26 Ind.Cl.Comm. at 218, 229. We do not agree that the expenditure was “ * * * a mere bookkeeping transaction,” and therefore disallowable. The expenditure is rather one which clearly falls within permissible gratuitous offsets as a constructive payment. Pawnee Tribe v. United States, 157 Ct.Cl. 134, 140 (1962). Since the Commission did not suggest that the expenditure did not benefit the Zia community, appellant is entitled to an offset to the extent proven, namely, $45.57. We otherwise find no consistent pattern of errors of law and fact demonstrating an abuse of discretion requiring reversal. The final judgment and order of the Indian Claims Commission is affirmed in part and reversed in part, and the cause remanded to the extent necessary and consistent with this opinion. Affirmed in part, reversed in part and remanded. . 25 U.S.C. § 70a. . The pueblos accepted the Commission’s determination that the additional 221,360 acres claimed had been the subject of Spanish Land Grants that had been confirmed by the United States and hence had never become part of the public domain. cf. Pueblo de Cochiti v. United States, 7 Ind.Cl.Comm. 422 (1959); Pueblo de Isleta v. United States, 7 Ind.Cl.Comm. 619 (1959); aff’d 152 Ct.Cl. 866 (1961); cert. denied 368 U.S. 822, 82 S.Ct. 39, 7 L.Ed.2d 27 (1961). . The Commission suggested that the parties agree upon an average date of entry for these homesteads with the average date of entry serving as the date when Indian title to these homestead lands collectively was extinguished. . The parties agreed that 34;900.27 acres had been taken by creation of the Jemez Forest Reserve on October 12, 1905; that 16,811.74 acres were taken during 1920 by various homestead or preemption entries ; and that 230,703.72 acres were taken by creation of Taylor Grazing District No. 2 on April 4, 1936. By exchange of land of equal value. Items 6 and 7 were placed in trust for the Zlas as one parcel. This was public domain land held to have been “taken” on April 4, 1936, but treated differently from the 47,438.66 acres for which an offset of $2.60 an acre was allowed by the Commission. Plaintiffs were awarded $3,406 for this land at $3.26 an acre. Items 8 and 9 were placed in trust for Jemez as one parcel. These are the public domain lands for which the Commission allowed $2.60 an aero in offsets, after holding that following thoir “taking,” for which tho United States was held liable at $3.26 an acre, they had been used by appellees at least since 1939. Indian title not involvod because purchased from Santa Ana Puoblo. This site was improved by the construction of buildings. . The difference between this figure and the 298,634 acres represents land to which Indian title was found by the Commission, 19 Ind.Cl.Comm. 62-65, never to have been extinguished. This difference consists of aboriginal lands which were set aside for the pueblos by Executive Orders dated December 19, 1906 (3 Kapp. 686), October 4, 1915 (4 Kapp. 1029), November 6, 1920, February 16, 1922, and by the “Act of April 12, 1924 (43 Stat. 92). . The “Item” references hereafter used in this opinion relate to the claimed real property offsets identified by “Item No.” in the aforementioned table. . Item 11 in the table represents the land for which the only real property offset allowance was permitted. . The 3,520 acres constitute Item 12 of the Table, supra. . The findings of fact of the Commission, 26 Ind.Cl.Comm. 218, relating to each group of land are as follows: Items 1, 2, 3 (Finding 60) ; Item 4 (Finding 61) ; Items 6, 8 (Finding 62) ; Item 10 (Finding 63) ; Item 13 (Finding 64). . On page 37 of its brief appellant states : “All the lands were unquestionably purchased under emergency legislation of the 1930’s. * * * ” . Yearbook of Agriculture, 1936, quoted at 26 Ind.Cl.Comm. 218, 235. . 25 U.S.C. § 70a provides in pertinent part : “ * * * except that it is declared to be the policy of Congress that * * * expenditures made pursuant to sections 461, 462, 463, 464, 465, 466-470, 471-473, 474, 475, 476-478 and 479 of this title, save expenditures made under section 465 of this title, * * * shall not be a proper offset against any award.” [Emphasis added.] . 25 U.S.C. § 70a. . The Commission found that the pueblos had been deprived of the use of Item 5 from 1936 to 1963; of Items 7 and 9 each from 1936 to 1956; of Item 15 from 1936 to 1966; and of Item 16 from 1936 to 1968, 26 Ind.Cl.Comm. 218, 262. . This “counter offset” theory employed by the Commission is similar to an idea expressed by Judge Nichols in his concurring opinion in United States v. Delaware Tribe et al., 427 F.2d 1218, 1232, 192 Ct.Cl. 385, 408 (1970) where he says : “With all respect, it seems to me the language may visualize what might be called offsets against offsets, i. e., that wrongs not permissibly the subject of direct claims might be considered as ‘in good conscience’ an insuperable objection to allowance of offsets.” . Had this temporary taking theory been given its normal use, then the appellees would have been entitled to additional damages in the amount of the excess by which the value of the temporary loss of use exceeded the value of the offset. Clearly this could not be done in this case because it would have given the appellees a double recovery. . 26 Ind.Cl.Comm. 218, 236-237.- . The Commission’s thinking is reflected in 26 Ind.Cl.Comm. at 233: “ * * * Much of the land for which offsets are requested was part of the Indians’ aboriginal territory on which the award was based. We thus have the anomaly of the Government returning, after a period of years, a portion of the land taken, and claiming as an offset an amount greater than the award because of land appreciation during the interim.” . For example, in the Congressional debates on H.R. 4497, Senator Karl Mundt of South Dakota said this: “I have nothing more to say for myself, but before I conclude I want to give you the words of a group of old Indian chiefs who, twenty-odd years ago, said what shines through the years with the clarity that simple truths contain : ‘We have also been told that you have said that our claim is too large. We have never put any price on our lands, or on the rights you took away from us without our consent. All we have asked, all we now ask is that the matter be settled; that you permit your Court of Claims to decide whatever it is just for you to pay us. Are you not willing to pay that; are you not willing to pay whatever you justly owe; whether it is big or little? We are told that you are the head of the wealthiest Nation in the whole world; that the United States is a benevolent Nation, that has given hundreds of thousands of dollars —great sums that the poor Indian cannot comprehend — to the poor people across the ocean in the countries where the great World War was fought, and where our own sons fought, bled, and died, fighting shoulder to shoulder with your own sons. Whatever your courts may decide and fix upon as the amount justly due us for the lands and rights taken from us will be as but a leaf from the great tree of your wealth; it will be but as a small twig from the branch that you broke off and gave away. Is not the heart that gives away big enough to move you to pay the just debt, be it little or big, that you owe to us poor Indians? “An Indian pays his debts before he gives a potlatch.’ ” 92 Cong.Rec. 5317 (1946). . H.R.Rep. No. 1466, 79th Cong., 2d Sess., 1 (1946). . See Judge Littleton’s exhaustive study of the legislative history of the Act in Otoe and Missouria Tribe v. United States, 131 F.Supp. 265, 131 Ct.Cl. 593, cert denied, 350 U.S. 848, 76 S.Ct. 82, 100 L.Ed. 755 (1955). . H.R. 4497, 79th Cong., 2d Sess., 92 Cong.Rec. 5320, 5321 (1946). . Ibid. . S.Rep. No. 1715, 79th Cong., 2d Sess., 1, 2 (1946). . In the Act of August 12, 1935 (49 Stat. 571, 596) in Title I, Section 2, Congress declared as a matter of policy: “In all suits now pending in the Court of Claims by an Indian tribe or band which have not been tried or submitted, and in any suit hereafter filed in the Court of Claims by any such tribe or band, the Court of Claims is hereby directed to consider and to offset against any amount found due the said tribe or band all sums expended gratuitously by the United States for the benefit of the said tribe or band * * [Emphasis added.] . Footnote 24, supra, at 8. . 25 U.S.C. § 70a. . H.Rep.No.2693, 79th Cong., 2d Sess., 6, 7 (1946). . Id. at 7. . “ * * * The Commission may also inquire into and consider all money or property given to or funds expended gratuitously for the benefit of the claimant and if it finds that the nature of the claim and the entire course of dealings and accounts between the United States and the claimant in good conscience warrants such action, may set off all or part of such expenditures against any award made to the claimant * * *.” [Emphasis added.] 25 U.S.C. § 70a. . It is not controlling that the Commission deemed its allowance of $118,596.00 for Item 11 as an “expenditure,” (26 Ind.Cl. Comm. 218, 238) which it was allowing as an offset. We think it more appropriate that it should be considered an offset of “property given” valued as of the date of the taking of this aboriginal land. . Appellant’s brief at page 33.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

BLUE CROSS ASSOCIATION v. The UNITED STATES. No. 530-71. United States Court of Claims. Feb. 16, 1973. Barron K. Grier, Washington, D. C., attorney of record, for plaintiff. Clarence T. Kipps, Jr., John L. Rice and Miller & Chevalier, Washington, D. C., of counsel. William A. Mogel, Bethesda, Md., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant. Ray Goddard, Washington, D. C., of counsel. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASH-IWA, KUNZIG and BENNETT, Judges. ON PLAINTIFF’S MOTION AND DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT PER CURIAM: This case was- referred to Trial Commissioner Louis Spector with directions to prepare and file his opinion on the issues of plaintiff’s motion and defendant’s cross-motion for summary judgment under the order of reference and Rule 166(c). The commissioner has done so in an opinion and report filed on June 23, 1972, wherein such facts as are necessary to the opinion are set forth. A request for review by the court of the commissioner’s report and opinion was filed by defendant and the case has been submitted to the court on the briefs of the parties and oral argument of counsel. Since the court agrees with the opinion and recommended conclusion of the trial commissioner, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this ease. Therefore, plaintiff’s motion for summary judgment is granted, defendant’s cross-motion is denied and judgment is entered for plaintiff in the sum of $1,598. OPINION OF COMMISSIONER SPECTOR, Commissioner: Plaintiff is the well-known nonprofit corporation which provides prepaid hospital and medical protection to its subscribers across the nation. On January 7, 1966, it entered into a cost-reimbursable (no profit) contract with the Department of Health, Education, and Welfare (HEW) which requires plaintiff to administer and facilitate payments under Title XVIII of the Social Security Act (popularly known as the Medicare program). At issue is the sum of $1,598, the portion allocable to this contract of a $9,750 payment in 1967 by plaintiff’s subcontractor to the Regional Hospital Planning Program of the Columbus Hospital Federation (hereinafter the Federation). Article XIV of the contract authorized plaintiff to enter into subcontracts for the performance of some of the functions required of plaintiff. The aforementioned subcontract is with Blue Cross of Central Ohio at Columbus, and it provides for daily administration of the Medicare program in central Ohio. The subcontract, which is also on a cost-reimbursable, no profit basis, was duly approved by the Secretary of HEW. Blue Cross of Central Ohio similarly provides a plan for prepaid hospital care consistent with sound business and actuarial principles, to assure adequate health care facilities and to encourage the provision of health care at the lowest possible cost. Under its plan it has contracts with hospitals, extended care facilities and home health care facilities within its 29-county service area. As we all know, a Blue Cross subscriber pays a subscription charge or premium, and when care is provided him, Blue Cross reimburses the hospital its approved charges, not to exceed audited costs. Similarly, care rendered to Medicare patients is reimbursed on a cost basis. It is obvious that it is in the best interests of all concerned, that is, the general subscribers, Medicare patients, plaintiff and defendant herein, that such costs be kept to a minimum consistent with proper care. Under its contract with HEW, plaintiff specifically undertook to make determinations of the amounts of payments required to be made on a reasonable cost basis to each institution, facility or agency designated to provide service under the Medicare program; to receive, disburse and account for funds in making such payments; to make audits of the records of providers of services; and to make such management studies as might be necessary to insure effective performance of the contract. Still more specifically as it bears on this claim, Article II. D. of the contract requires plaintiff, for example, to: Assist providers of services in the development of procedures relating to utilization practices, make studies of the effectiveness of such procedures and methods for their improvement, and assist in the application of safeguards against unnecessary utilization of services. [Emphasis supplied.] The Federation, to which the aforementioned payment of $9,750 was made by Blue Cross of Central Ohio, is also a nonprofit corporation, governed by a 56-man board of trustees. Services rendered by the Federation include regional planning of hospitals, home health care agencies, extended care facilities, clinics, and the conduct of studies pertaining to health facilities and services in the same general area in which Blue Cross of Central Ohio conducts its business. It provides planning services for the development, timing and location of facilities, manpower and health services. The overall budget of the Federation is allocated to each of the 17 counties which it serves. Each county has a local planning council which has the responsibility of raising its proportionate share of that budget. The money is raised by each county from hospitals, extended care facilities, business, industry and individuals. A portion of these requirements is specifically allocated to Blue Cross of Central Ohio. In the year here in question, 1967, Blue Cross paid the exact amount allocated to it, and it had made similar payments on an annual basis from 1960 throught 1970. Money raised for its operations by the Federation is matched on approximately a 50-50 basis by HEW under a grant, which is not related to this lawsuit. It is, however, a condition of this grant that “these local monies must come from a broad spectrum of the community both public and private as evidence of the community’s acceptance of the program.” The payment made by Blue Cross to the Federation in 1967 was specifically earmarked for the planning function of the Federation. The amount of the payment was distributed or allocated by Blue Cross as a general cost of doing business to all of its activities, including this contract and services provided to general subscribers. The allocation resulted in a charge to the Medicare program of the aforementioned sum of $1,598. Claim for reimbursement under this cost-reimbursable contract was denied by the defendant’s contracting officer, and on appeal to the head of the department under the contract disputes clause, by the Armed Services Board of Contract Appeals. It has been denied on the ground that it is a “contribution or donation,” and therefore unallowable as a cost under the regulations governing this contract. Facts underlying this case are virtually undisputed. The issue is whether reimbursement of the above sum to plaintiff is legally prohibited, an issue to which this court is privileged to address itself de novo. The board opinion is exemplary in its detail and objectivity. It reflects an unmistabable reluctance in reaching its result, and that reluctance is understandable. On these facts, and for the reasons following, it is concluded that the board was in error in characterizing the payment at issue as a charitable contribution of the type currently declared unallowable by the regulations. In distributing this payment to the Federation as a general cost of doing business, Blue Cross of Central Ohio recognized that it was in its business interest (and in the interest of its subscribers and the Government) to assure that hospital and similar health facilities are not developed prematurely or in a manner unrelated to needs. If a facility has excess beds, for example, the per patient cost of operating the facility is higher than necessary, and required reimbursements by Blue Cross, including payments made for Medicare patients under this contract, are correspondingly higher than necessary. The Federation has, at the specific request of Blue Cross, undertaken projects aimed at the consolidation of existing facilities, thereby achieving greater economy in health services. For example, the Federation made numerous studies of two hospitals in Guernsey County, Ohio, at an estimated cost in excess of $20,000. In that county the “loss ratio” was 137 pei’eent, meaning that claim costs were $1.37 for every $1 of income. In two contiguous counties, the loss ratio was well below 100 percent, and the average cost per case well below that at the Guernsey County hospitals. Blue Cross had been unable to convince appropriate officials that a merger of these hospitals was desirable to avoid an excess of beds, duplication of services, and questionable utilization practices. But in 1966 and 1967, the Federation accomplished a merger of these institutions with a consequent favorable impact on costs billed to Blue Cross, and resultant savings to regular subscribers and Medicare patients. Similar benefits were achieved in Gallipolis, Ohio. Federation activities have also beneficially impacted upon other medical administration areas, with similar cost savings to Blue Cross and its subscribers and to Medicare patients. The latter cost savings obviously benefit the Government which underwrites the Medicare program. In some cases, new hospitals were not built after the Federation through its planning function was unable to document the need for additional beds at that time. In other instances, studies established the need for less expensive extended care facilities, in lieu of more hospital beds. Federation studies have resulted in closure of maternity sections in whole or in'part, in favor of other hospital needs, thus providing the double benefit of eliminating wasted space, while providing needed additional space without the cost of new construction. Generally, the Federation has successfully prevented the duplication of expensive, specialized services by hospitals, brought about sharing of facilities, and promoted centralized purchasing. All of these functions are services which Blue Cross would have to undertake (on a cost-reimbursable basis so far as this contract is concerned), if the Federation were not available. Significantly, the record demonstrates that Blue Cross could not perform some of these functions as effectively as the Federation, nor is it capable of performing other of these functions at all. The board opinion states: * * x- The president of Blue Cross of Central Ohio was of the opinion that withdrawal of his organization’s financial support to the Federation would have had a “tremendous impact” on payments from other organizations, as others would have questioned the propriety of giving their financial support to a body that had been refused any financial support by the organization that stood to benefit the most from the Federation’s activities. There is no way of knowing just what effect Blue Cross’ withdrawal of financial support would have had on the Federation’s activities and the benefits derived by Blue Cross from such activities, but it appears to be unrealistic to assume that the Federation would have continued to render health planning services in conformity to the needs of Blue Cross if Blue Cross had withdrawn its financial support to the Federation. [Emphasis supplied.] As a matter of fact, the board decision states at the outset: It is hard to imagine a stronger case for treatment of a payment or contribution to a charitable organization as an allowable cost of performance of a Government contract. The services rendered by the Federation were necessary to the overall operation of the business of Blue Cross and benefited both the Government contract and Blue Cross’ other activities. Such services reduced the costs incurred in the performance of the Medicare contract. Although the payment made by Blue Cross to the Federation was not made by contract or as a quid pro quo for services rendered, the payment had the effect of enabling Blue Cross to obtain the necessary cost-reduction services that could not have been obtained as effectively and economically in any other way, and it is unlikely that Blue Cross could have obtained the services it needed from the Federation without providing financial support to the Federation. [Emphasis supplied.] In other words, the record and board opinion establish overwhelmingly that this payment to the Federation produced cost reductions which were a necessary part of the business of Blue Cross, and which produced direct cost benefits under this Medicare contract with the Government. By way of further example in the record, if the length of stay in hospitals where Blue Cross conducts its business increased one-tenth of a day, the cost to Blue Cross for its subscribers would be in excess of $500,000 annually. The board reasons to a negative result in the following manner. It states quite correctly that the pertinent Federal Procurement Regulations are incorporated in the contract. It recites section 1-15.-201-4 “Definition of alloeability” in pertinent part as follows: A cost is allocable if it is assignable or chargeable to a particular cost objective, such as a contract, product, product line, process, or class of customer or activity, in accordance with the relative benefits received or other equitable relationship. Subject to the foregoing, a cost is allocable to a government contract if it: (a) Is incurred specifically for, the contract; (b) Benefits both the contract and other work, or both Government work and other work, and can be distributed to them in reasonable proportion to the benefits received; or (c) Is necessary to the overall operation of the business, although a direct relationship to any particular cost objective cannot be shown. [Emphasis supplied.] It is conceded by the board “that the payment to the Federation meets the indirect cost alloeability tests of [the above-quoted] FPR 1-15.201-4, in that the payment to the Federation directly benefited the contract with HEW for Medicare services and the payment to the Federation was necessary to the overall operation of the business.” But the board concludes that this is a “general” provision which must give way to a “specific” provision, and it finds that FPR 1-15.205-8 is such a specific provision and, moreover, applicable to this disputed payment. FPR 1-15.205-8 “Contributions and donations” simply provides: Contributions and donations are unallowable. The board opinion offers an exhaustive history of this regulation, its relationship to the earlier developed Armed Services Procurement Regulations (ASPR), and of the history of the treatment of charitable contributions generally under the Internal Revenue Code. That history is not fully repeated here. Suffice it to say that during World War II and for some time thereafter, charitable contributions were regularly reimbursed under cost-type Government contracts. Criticism of this developed, principally from the Comptroller General who did not consider them “incident to and necessary for the performance of the contract.”. His exceptions were, however, overruled if the contracts in question were governed by regulations permitting reimbursement of charitable contributions. Charitable contributions were even allowed as indirect costs in the price-redetermination of fixed-price contracts. But in 1949 the Defense Department, in ASPR Section XV, expressly declared contributions and donations unallowable as costs under cost-reimbursement contracts. Although not particularly relevant (except as history), the board observes that this policy has been severely criticized. It cites a number of respected authorities on that point. A relaxation of that prohibition against reimbursement of charitable contributions, proposed by the ASPR committee in 1969, was aborted following a newspaper article headlined “Pentagon May Repay Firms Charity Gifts.” What this history demonstrates above all else is that the policy interdicting reimbursement of charitable contributions finally grew out of’ a reluctance to reimburse profit-earning contractors for costs not “incident to and necessary for the performance of the contract.” These were the words of the Comptroller General, above-quoted. The facts above-shmmarized hardly serve to put plaintiff, and this payment, in the category of a profit-earning contractor seeking reimbursement of a cost not “incident to and necessary for the performance of the contract.” As plaintiff observes, regular payments made over a sustained period of time which enable a contractor to receive services which are an integral and necessary part of the overall operation of the contractor’s business and are directly beneficial to the contract, are not “contributions and donations” within the generally accepted definition of that phrase. This payment is not a gratuity, motivated by generosity or public relations, the type of charitable contribution reviewed in the above-summarized history. It is far more like the “contribution” involved in General Dynamics/Astronautics, ASBCA No. 6899, 1962 BCA U 3391, which the board properly found to be a payment necessary to get the job done. By way of analogy, the payment at issue in this case would not be regarded as a “gift” under tax precedents. The board seeks to distinguish its prior opinion in General Dynamics/As tronautics, supra, on the ground that the $50,000 contribution in that case was a bargained for quid pro quo. But the attempt at distinction is not persuasive. In that case a profit-earning contractor became aware of serious traffic problems which would develop for its employees seeking ingress and egress to a newly constructed plant. The problems could be alleviated by construction by the State of California of an overpass, at its intersection with a major freeway. Although the need for the overpass was recognized by state highway officials, one was not contemplated for a number of years. It was common practice in California for an interested party who thought a certain highway merited preferred attention, “to offer some contribution toward its cost," which often resulted in its being given a higher priority. A suggested contribution of $50,000 was in fact made, and this was then confirmed in an agreement which in turn brought about earlier completion of the overpass, and a potential gain in employee efficiency at the contractor’s plant. In that case, the argument also was made by Government counsel that reimbursement of this $50,000 contribution to the State of California was prohibited by the same regulation as to contributions and donations involved in this case. The board stated: •* * * We do think it clear however that in the context we have here, neither of the words in question [contributions and donations] has the effect of inhibiting an expenditure which is made for and that results in a distinct and tangible benefit to both the Government and the contractor with respect to a project and a contract in which they are engaged. We find that the appellant’s payment made for the purpose of facilitating and expediting the overpass construction was such an expenditure and that its effect was directly and definitely beneficial to the Atlas program, and was an exercise of sound business judgment, from the standpoints of efficiency in the conservation of employee working time and the factors set forth in ASPR 15-204 (g). And this view is not altered by the circumstance that the accrued benefit is perhaps not susceptible of precise mathematical measurement. The fact that the arrangement in General Dynamics was ultimately reduced to contract with the State, does not distinguish it from the case at hand. Here too we have a readily discernible quid pro quo, and in a real sense a consensual arrangement. If anything, the benefits to the defendant in this case are more “susceptible of precise mathematical measurement” than they were in General Dynamics. The board briefly raises an additional argument that if plaintiff makes a payment to the Federation and the Federation in turn receives a grant of appropriated funds from HEW, reimbursement of the Blue Cross payment to the Federation “would have the effect of causing the Government to make a grant of matching funds to match funds coming from the Federal Government itself in the guise of contract costs." In this respect, however, the board answers its own argument very effectively, as follows: However, this objection is equally applicable to certain other costs of contract performance that are made allowable by ASPR, Section XV. The following are examples of costs made allowable by ASPR, Section XV, which involve payments by contractors to organizations who receive financial support by grant from the Federal Government pursuant to Acts of Congress: Taxes paid to state and local governments; research and development costs; membership in and subscription to publications of technical and professional organizations; and programs of training and education procured from educational institutions. In summary, if this payment is disallowed, regular subscribers to Blue Cross are burdened with the allocable cost of plaintiff’s payment to the Federation for benefits realized by the defendant under its contract with plaintiff for administration of the Medicare program, as well as being burdened with the costs allocated to regular subscribers. The payment here at issue very clearly serves a contract purpose, and both the history and precedents heretofore cited demonstrate that the prohibition against reimbursement of charitable contributions was not intended to reach to a payment such as this Accordingly, plaintiff’s motion for summary judgment is granted, defendant’s cross-motion is denied, and judgment is entered for plaintiff in the sum of one thousand five hundred and ninety-eight dollars ($1,598). . Now known as the Mid-Ohio Planning Federation. . With the exception of 1961. . See Article II. D. of the contract, above-quoted. . The ASBCA has been designated by the Secretary of HEW to hear and determine appeals for him. . Cf. American Chem. Soc’y v. United States, 438 E.2d 597, 603-604, 194 Ct.Cl. 370, 382-383 (1971). See also J. W. Bateson Co. v. United States, Text and citations at n. 7, 450 F.2d 896, 899, 196 Ct.Cl. 531, 538 (1971). . This characterization of the “payment” as a “contribution to a charitable organization,” begs the question to be decided in this case. . In a case where the direct “benefit” to the Government was less readily perceivable than it is in this nonprofit contract, the court reached the same conclusion in Lockheed Aircraft Corp. v. United States, 375 F.2d 786, 793-794, 796, 179 Ct.Cl. 545, 558, 562 (1967). . Cited in the board opinion are Cramp Shipbuilding Co. v. United States, 122 Ct.Cl. 72 (1952); Consolidated Vultee Aircraft Corp. v. United States, 97 F.Supp. 948 (D.C.Del.1951); Nash-Kelvinator Corp., NBCA No. 524, Feb. 28, 1949 (Navy Board of Contract Appeals, unreported); Consolidated Vultee Aircraft Corp., Army BCA No. 1594, 4 CCF ¶ 60,437 (1947); Hudson Motor Car Co. v. Navy Dept., OCS No. 134, 4 CCF ¶ 60,349 (1947); and Bell Aircraft Corp., War Dept. BCA Nos. 1158 & 1169, 4 CCF ¶ 60,053 (1945). . The board opinion cites Swartzbaugh Mfg. Co., ASBCA No. 792, Nov. 25, 1952; and Avco Mfg. Corp., ASBCA No. 1117, Feb. 10, 1954. BCA opinions were not published verbatim by Commerce Clearing House (CCH) prior to 1956. . See Commissioner v. Duberstein, 363 U.S. 278, 285, 80 S.Ct. 1190, 1196, 4 L.Ed.2d 1218 (1960). “ * * * [j]f tjie payment proceeds primarily from ‘the constraining force of any moral or legal duty,’ or from ‘the incentive of anticipated benefit’ of an economic nature. Bogardus v. Commissioner, 302 U.S. 34, 41, 58 S.Ct. 61, 82 L.Ed. 32, * * * it is not a gift. * * * A gift in the statutory sense, on the other hand, proceeds from a ‘detached and disinterested generosity,’ Commissioner v. Lo Bue, 351 U.S. 243, 76 S.Ct. 800, 803, 100 L.Ed. 1142 * * * ‘out of affection, respect, admiration, charity or like impulses.’ Robertson v. United States, 343 U.S. 711, 72 S.Ct. 994, 96 L.Ed. 1237 * * *." See also Singer Co. v. United States, 196 Ct.Cl. 90, 449 F.2d 413 (1971). . The board states “[i]ncidentally the evidence establishes without controversion that this practice was quite prevalent in the State of California and of course with no implication of improper dealing among these concerned.” . Drawing once again on tax precedents for analogy, attention is invited to Sarah Marquis, 49 T.C. 695 (1968), acquiesced in, 1971-2 Cum.Bull. 3. The taxpayer in that case was permitted to deduct contributions to church, educational and other charitable organizations, the clientele of her travel agency business, as a business expense, even though there was no binding obligation or “contract” on the part of the recipients to continue doing business with the taxpayer. The Tax Court in that case concluded that it “would stretch credulity to characterize the payments at issue as ‘contributions’.” . It should be recalled that the board opinion had previously referred to this matching grant as “unrelated” to the payment at issue in this case. . Also see and cf. the board’s prior opinion in Cornell Aeronautical Laboratory, Inc., ASBCA No. 8536, 1964 BCA $ 4204. . Compare American Chem. Soc’y v. United States, 438 F.2d 597, 194 Ct.Cl. 370 (1971), wherein the regulations prohibiting reimbursement of “interest” were distinguished, on the facts present in that case. . Defendant’s counsel suggests (but offers no proof), that reimbursement of larger sums hinge on this decision. That is not uncommon, if true in this case. It would have no bearing on the result reached , since, under the theory of this case, payments reimbursed are of the type intended to produce equal or greater cost savings to defendant incident to its contract.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

The CONTINENTAL INSURANCE COMPANY v. The UNITED STATES. No. 459-69. United States Court of Claims. Feb. 16, 1973. Walter J. Rockier, Washington, D. C., attorney of record, for plaintiff; Richard L. Hubbard, Washington, D. C., of counsel. Roger A. Schwarz, Washington, D. C., with whom was Asst. Atty. Gen. Scott P. Crampton, for defendant; Philip R. Miller, and Joseph Kovner, Washington, D. C., of counsel. Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASH-IWA, KUNZIG, and BENNETT, Judges. ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT SKELTON, Judge: In this case plaintiff seeks to recover income taxes and interest, which it asserts were erroneously and illegally assessed and collected, in the amounts of $2,413.71 for the calendar year 1954 and $475,003.80 for the calendar year 1955. The case is before the court on plaint tiff’s motion for summary judgment and has been briefed and argued orally by both sides. The parties are in basic agreement as to the facts essential to our decision of this motion and these facts are set out below. Plaintiff, The Continental Insurance Company, is a corporation organized under the laws of the State of New York. It is, and at all relevant times has been, engaged in business as a stock fire and casualty insurance company, transacting its business in each of the states of the United States and in the District of Columbia. Consequently, plaintiff is an insurance company subject to the tax imposed by Section 831 of the Internal Revenue Code of 1954 and computes its taxable income under Section 832 of the Code. Plaintiff duly filed its federal income tax returns for the calendar years 1954, 1955, 1956, and 1957 and paid the taxes shown to be due thereon. The District Director of Internal Revenue later assessed deficiencies in tax and interest thereon against it for the years 1954 and 1955. Plaintiff paid these assessed tax deficiencies and interest in full and then filed claims for refund with respect to the portions of the deficiencies for 1954 and 1955 which resulted from the adjustment of its deductions for losses paid for the years 1955, 1956, and 1957. In computing its federal income tax for the years 1954 through 1957, plaintiff included as income the amount of its earned premiums less losses paid and unpaid losses. In making such computation, it reduced losses paid by salvage which had been reduced to cash or its equivalent during the year. It did not, however, reduce losses paid by estimates of salvage that might be recovered on such losses in future years. Salvage consists basically of (1) amounts recouped by the insurer through the sale of damaged property to which it has taken title, and (2) amounts that the insurer recovers from third parties who are found to be ultimately responsible for the damage sustained by the insured (subrogation). During the years at issue the rules of some states barred the use of estimates of salvage, and barred salvage adjustments for property which had not been reduced to cash or cash equivalents. The District Director determined that plaintiff’s losses paid for the years 1955, 1956, and 1957 should be reduced by salvage recoverable, i. e., by an estimate of the salvage on losses paid in each year that might be recovered in subsequent years, as well as by salvage actually reduced to cash or cash equivalents during each year. He made this adjustment with regard to all plaintiff’s business, and not merely with regard to that portion of the business done in states which did not expressly bar such an adjustment. The result of this determination was to increase plaintiff’s taxable income for 1955 and 1956 and to decrease its taxable income for 1957. The effect of these income adjustments for the year 1954 was to decrease plaintiff’s loss car-ryback from 1956 and consequently, to increase its income taxes for 1954. The effect for 1955 was to increase plaintiff’s taxable income for that year and to increase its loss carryback from 1957, though in a much lesser amount, the net effect of which was to increase its income taxes for 1955. The plaintiff’s claims for refund were denied and this suit followed. The statutory context of this case can be briefly summarized. Section 831 of the Internal Revenue Code of 1954 imposes corporate taxes (computed as provided in Section 11) on insurance companies such as plaintiff. Section 832 of the Code describes how the “taxable income” of such insurance companies is to be determined. “Taxable income” is defined as “gross income” less certain specified deductions. The two major components of “gross income” are “underwriting income” and “investment income” which, according to Section 832(b)(1)(A), are to be “computed on the basis of the underwriting and investment exhibit of the annual statement approved by the National Convention of Insurance Commissioners.” The term “underwriting income” means the premiums earned on insurance contracts during the taxable year less “losses incurred” on such contracts and “expenses incurred.” “Losses incurred” during the taxable year on insurance contracts consist of two elements, losses paid and unpaid losses. Section 832(b)(5) provides : (5) LOSSES INCURRED. — The term “losses incurred” means losses incurred during the taxable year on insurance contracts, computed as follows : (A) To losses paid during the taxable year, add salvage and reinsurance recoverable outstanding at the end of the preceding taxable year and deduct salvage and reinsurance recoverable outstanding at the end of the taxable year. (B) To the result so obtained, add all unpaid losses outstanding at the end of the taxable year and deduct unpaid losses outstanding at the end of the preceding taxable year. Thus, losses paid must be adjusted for the change during the year in salvage and reinsurance recoverable. Any increase in salvage and reinsurance recoverable during the year decreases the amount of losses paid, and any decrease in salvage and reinsurance recoverable during the year increases losses paid. The statute, however, does not define the term “salvage * * * recoverable” or even describe what is meant by salvage. It is therefore necessary to look beyond the statute to the applicable regulations and to insurance law. As pointed out earlier, salvage includes all tangible property and subrogation claims acquired by an insurance company after indemnifying its insured under contracts of insurance. In Phoenix Insurance Co. v. Erie Transportation Co., 117 U.S. 312, 321, 6 S.Ct. 750, 753, 29 L.Ed. 873 (1886), a case involving the subrogation rights of an insurer, the Supreme Court defined salvage as follows: From the very nature of the contract of insurance as a contract of indemnity, the insurer, when he has paid to the assured the amount of the indemnity agreed on between them, is entitled, by way of salvage, to the benefit of anything that may be received, either from the remnants of the goods, or from damages paid by third persons for the same loss. Section 1.832-1 (c) of the Treasury Regulations, 26 C.F.R. 1.832-1 (c), reads as follows: (c) That part of the deduction for “losses incurred” which represents an adjustment to losses paid for salvage and reinsurance recoverable shall, except as hereinafter provided, include all salvage in course of liquidation, and all reinsurance in process of collection not otherwise taken into account as a reduction of losses paid, outstanding at the end of the taxable year. Salvage in course of liquidation includes all property (other than cash), real or personal, tangible or intangible, except that which may not be included by reason of express statutory provisions (or rules and regulations of an insurance department) of any State or Territory or the District of Columbia in which the company transacts business. Such salvage in course of liquidation shall be taken into account to the extent of the value thereof at the end of the taxable year as determined from a fair and reasonable estimate based upon either the facts in each ease or the company’s experience with similar cases. Cash received during the taxable year with respect to items of salvage or reinsurance shall be taken into account in computing losses paid during such taxable year. With respect to salvage, the above-quoted paragraph of the regulations has four components, one stated in each sentence. First, salvage recoverable includes all salvage in course of liquidation. Second, salvage in course of liquidation includes all property (other than cash) except that which is excluded by an express statute, rule, or regulation of any state in which the insurer transacts business. Third, salvage in course of liquidation must be taken into account' upon a fair and reasonable estimate based upon the facts in each case or experience in similar eases. Fourth, cash received during the year with respect to salvage is taken into account as a reduction in computing losses paid during the year, before this item is adjusted by estimates of future salvage recoveries. The parties have stipulated that: 1. During each of the years 1953-1957, the insurance departments of some states in which plaintiff did business during such years had express rules or regulations (within the meaning of Treasury Regulations Section 1.832-1 (c)) prohibiting plaintiff from reducing losses paid by, or otherwise, taking credit for, (a) any property, tangible or intangible, in the form of salvage or subrogation, before such property is reduced to cash or cash equivalents, and (b) estimates of the value of any property, tangible or intangible, in the form of salvage or subrogation, before such property is reduced to cash or cash equivalents. The issue presented is whether, under Section 832(b)(5)(A) of the Code, plaintiff is required to adjust losses paid by estimates of future salvage recoveries on such losses, in light of (a) Section 1.832-1 (c) of the Treasury Regulations which excludes from the salvage recoverable adjustment to losses paid, any salvage that may not be included under rules or regulations of the insurance department of any state in which plaintiff did business, and (b) the stipulated fact that during the years in issue there were such state rules and regulations prohibiting the recognition of salvage other than in the form of property consisting of cash or cash equivalents. It is a case of first impression. Plaintiff’s position in this case is rather simple to state. Plaintiff contends that under the above-quoted Treasury Regulations it was not required to reduce losses paid by any salvage for which it was not permitted to take credit under the rules or regulations of the insurance department of any state in which it did business. The parties have stipulated that during the years in issue the insurance department of some states in which plaintiff did business had rules or regulations prohibiting it from taking credit for salvage until reduced to cash or cash equivalents. Therefore, plaintiff submits that it should not be required for federal income tax purposes to reduce its losses paid by estimates of salvage recoverable in the future, i. e., by salvage prior to its reduction to cash or its equivalent. Plaintiff says that it properly subtracted salvage received in cash or cash equivalents in computing losses paid, which was all it was required to do by the Regulations with respect to salvage. Defendant has, throughout the course of this litigation, maintained four different positions as to why and how plaintiff was required to reduce losses paid by estimates of future salvage recoveries. Its first two positions have been abandoned and will not be discussed. The other two, which are presently being urged by the defendant, are as follows: First, defendant asserts that Regulation Section 1.832-1 (c) requires that estimated amounts of salvage recoverable are excluded for federal tax purposes only to the extent that they relate to business conducted by plaintiff within states which prohibit the recognition of salvage before it is reduced to cash or the equivalent of cash. In other words, defendant interprets the Regulations as requiring a state-by-state approach. Second, defendant contends that a state law, or a rule or regulation of an insurance department, of any state is a proper basis for reducing the Section 832(b)(5)(A) salvage recoverable adjustment if the state law, rule, or regulation excludes specified items of property from being taken into account as salvage in course of liquidation but not if it forbids the making of any adjustment whatsoever for all salvage in course of liquidation, the value of which must be determined by estimation. At the outset, it must be recognized that the casualty insurance business is a thoroughly regulated industry. The terminology and concepts of the Internal Revenue Code and Regulation provisions dealing with casualty insurance are based directly on industry usage developed in response to state regulation. New Hampshire Fire Insurance Co., 2 T.C. 708 (1943), aff’d, 146 F.2d 697 (1st Cir. 1945). One important aspect of state regulation is the requirement that insurance companies file annual financial reports or statements with the states in which they do business. Over the years, the form of these annual statements has been standardized by the National Association of Insurance Commissioners. This prescribed form is known as the “annual Statement” or the “Convention Form.” It is clear that an insurance company sets forth in its Annual Statement, filed with each state, financial data regarding all of its business, wherever conducted, and that the rules of a state insurance department relating to items reflected in the Annual Statement apply equally to all of the company’s business, wherever conducted. None of the assets or liabilities, or items of income or deduction, are allocated on a state-by-state basis. These fundamental facts were understood to be the ease and taken for granted in numerous judicial decisions considering to what extent the Annual Statement should be followed for federal income tax purposes. See, e. g., Commissioner v. General Reinsurance Corp., 190 F.2d 148 (2d Cir. 1951); Bituminous Casualty Corp., 57 T.C. 58 (1971); New Hampshire Fire Insurance Co., 2 T.C. 708 (1943), aff’d 146 F.2d 697 (1st Cir. 1945). This court has proceeded on the same basis in other cases involving casualty insurance company taxation. See, e. g., Title Guarantee Co. v. United States, 432 F.2d 1363, 193 Ct.Cl. 1 (1970); Colonial Surety Co. v. United States, 178 F.Supp. 600, 147 Ct.Cl. 643 (1959). Cf. Continental Assurance Co. v. United States, 8 F.Supp. 474, 79 Ct.Cl. 756 (1934); Massachusetts Mutual Life Insurance Co. v. United States, 59 F.2d 116, 75 Ct.Cl. 117 (1932), aff’d, 288 U.S. 269, 53 S.Ct. 337, 77 L.Ed. 739 (1933); Minnesota Mutual Life Insurance Co. v. United States, 66 Ct.Cl. 481 (1928), cert. denied, 279 U.S. 856, 49 S.Ct. 352, 73 L.Ed. 998 (1929), all dealing with life insurance companies. There is a very sound reason for the total approach of the Annual Statement. State insurance departments are concerned with assuring that a company’s financial position is sound enough to protect policyholders in their respective states. In determining the financial strength of a large, multi-state insurer such as plaintiff, it would be illogical for the insurance department of a particular state to scrutinize only that part of plaintiff’s business carried on within that state. Plaintiff’s business in that one state might be prospering, while elsewhere it might be hopelessly insolvent. Thus a state insurance department must examine all of plaintiff’s assets and liabilities, and all of its income and expenses and apply its rules to plaintiff’s total business if policyholders within that state are to be adequately protected. The purpose of the state rule herein involved, prohibiting the use of salvage estimates to increase assets or reduce losses, is obviously to prevent the use of inaccurate estimates which might overstate financial strength and to allow only those items of salvage which are, or will soon be, in the form of cash or otherwise available for the payment of claims. No state limits the application of its salvage rule (or any insurance rule) to business done within that state, for the reasons mentioned above. Consequently, Section 1.832-1 (c) of the Treasury Regulations must be construed to mean that where the exception based on the salvage rule of any state comes into play, the exception applies to salvage property of the insurer wherever located. This interpretation is substantiated by an examination of the history of this Regulation. Though essentially identical provisions to Sections 831, 832 were first adopted by Congress in 1921, the Treasury promulgated no regulations with respect to salvage under this antecedent to Section 832 for 25 years. Finally, on March 12, 1947, a Proposed Regulation was published which provided simply: For taxable years beginning after December 31, 1946, that part of the deduction for “losses incurred” which represents an adjustment to “losses paid” for “salvage and reinsurance recoverable” shall include all salvage in course of liquidation and all reinsurance in process of collection. This Proposed Regulation caused considerable concern within the industry since it was viewed as an attempt to ignore state rules and establish a federal standard. Letters were written to the Commissioner of Internal Revenue by various trade associations representing stock casualty insurance companies and by individual casualty insurers objecting to the Proposed Regulation. They claimed it would require insurance companies to compute their taxable income in a different manner than that used in the Annual Statement and approved by state laws, thus complicating the preparation of tax returns and increasing the administrative burden upon the government. They pointed out the difficulties involved in estimating something as speculative as salvage recoverable and noted that, in the long run, the taxes paid will be substantially the same regardless which method is used. In apparent deference to these protests from the industry, the Treasury revised its Proposed Regulation to bring it in line with industry practice. Under the final Regulation promulgated in December 1947, which contained language identical to that contained in Section 1.-832-1 (c) of the present Treasury Regulations, if any state in which an insurer did business excluded estimates of future salvage recoveries, then, in line with industry practice, such estimates would be excluded for federal income tax purposes. In essence, the Treasury agreed to follow the most conservative state salvage rule with which the insurer had to comply. Plaintiff’s construction is also reinforced by comparison to analogous Treasury Regulations, in which the taxation of insurance companies depends on state law. The term “reserves required by law” is significant in the taxation of life insurance companies both in determining taxable income and in determining whether a company is a life insurance company. (See Sections 801(b), 805 and 810 of the Internal Revenue Code of 1954.) In determining the amount of “reserves required by law,” there has never been any suggestion that each state’s reserve requirements should be applied only to business done within the particular state. Courts have explicitly recognized that, for federal tax purposes, state rules on reserves apply across the board to all of a company’s business, in the same way that such rules are applied by the states themselves. See, e. g., Maryland Casualty Co. v. United States, 251 U.S. 342, 40 S.Ct. 155, 64 L.Ed. 297 (1920); Western & Southern Life Insurance Co. v. Commissioner, 460 F.2d 8 (6th Cir. 1972); Massachusetts Mutual Life Insurance Co. v. United States, 56 F.2d 897, 899, 74 Ct.Cl. 162, 167 (1932); Prudential Insurance Co. v. Herold, 247 F. 681, 685-686 (D.N.J.1918). This principle is also recognized in Section 1.803-1 (d) of the Treasury Regulations, 26 C.F.R. 1.803-1(d), which states that: * -:<• * a company is permitted to make use of the highest aggregate reserve required by any State or Territory or the District of Columbia in which it transacts business, but the reserve must have been actually held. The salvage adjustment in Regulations Section 1.832-1 (e) here in issue is quite similar to the above-quoted Regulation governing the reserve adjustment. Both affect the measure of income, both rely on state law, both refer to the requirements of “any state” in which the company does business, and both look to the most conservative state rule. It is difficult to see, therefore, why one should be applied state-by-state while the other is applied across the board. If the defendant’s state-by-state approach were to be followed, companies would be faced with the question of how to allocate salvage property and salvage estimates among states, since the Regulation provides no formula for making such an allocation. The company, for instance, would not know whether to look to the state in which the salvage will be recovered (if such state could be determined), the state in which the loss occurs, the state in which the property is normally located, or the state in which the premiums were paid. And, if this were determined, it would not know what rules to apply in determining, for example, to what state a recovery or loss belongs. Other Regulations requiring allocation typically provide precise rules for effecting the same. For example, Regulations Section 1.953-2, dealing with the definition of “United States risks,” contains elaborate rules for determining whether property is “in the United States,” whether a liability “arises out of activity in the United States,” and whether an individual is a “resident of the United States.” Regulations Section 1.953-4(c) (1) (ii) provides precise rules for determining, in the ease of a controlled foreign corporation, what reserves are deemed to be required under state law. Regulations Section 1.953-4(f) provides specific rules on how to allocate particular items to “United States risks.” If a state-by-state allocation had been actually intended with respect to salvage estimates under Regulations Section 1.832-1 (c), guidance on the proper method for making such allocation would almost certainly have been provided in the Regulations. Finally, the state-by-state argument is even further discredited by the fact that the District Director’s adjustments were made without reference to state rules and regulations, notwithstanding that some states in which plaintiff did business had rules barring the use of salvage estimates. The across the board approach taken by the District Director in this case is clearly inconsistent with the state-by-state approach now argued for by defendant. We turn now to defendant’s second argument. Defendant has asserted that the only circumstance under which state rules may affect the salvage recoverable adjustment for tax purposes is one in which the state law excludes certain items of property from plaintiff’s salvage in course of liquidation, but not where such rule flatly forbids the adjustment for so much of plaintiff’s salvage in course of liquidation which must be valued by estimation. This assertion is based on defendant’s interpretation of the third sentence of Regulations Section 1.832-1 (c), previously set out in full, which reads: * * * Salvage in course of liquidation includes all property (other than cash), real or personal, tangible or intangible, except that which may not be included by reason of express statutory provisions (or rules or regulations of an insurance department) of any State or Territory or the District of Columbia in which the company transacts business. Defendant contends that the words “except that” refer back to the word “property” and not to the term “salvage in course of liquidation” that precedes it. Thus, says defendant, a company’s salvage in course of liquidation will include all property except that property which may not be included by virtue of state law. According to defendant, the exclusion is directed at particular items of property, e. g., a particular item of intangible salvage property which, for whatever reason, will not be recognized by the state insurance department as salvage of the company in course of liquidation. Unfortunately, defendant has been unable to proffer a specific example of the type of state rule contemplated by its argument, such as a state rule which would exclude from salvage some specified kind of property. Plaintiff is willing to admit that the words “except that” refer back to the word “property,” but claims that this adds nothing to the consideration of the case. We agree. In fact, the stipulation between the parties, set forth supra, provided that some states in which the plaintiff did business had rules prohibiting the reduction of losses paid for property (potential salvage or subrogation) not yet reduced to cash or cash equivalents. It is, therefore, difficult to understand this contention of the defendant. There is no discernible limitation on the state rule exception in the language of the Regulation itself. It does not refer to “specified items” of property or to “a particular item of intangible salvage property” as defendant would have us believe. Therefore, defendant cannot prevail on its second argument. Affidavits filed with plaintiff’s motion indicate that from 1921 on through the years involved in this suit plaintiff never reduced its losses paid, for either federal income tax or state reporting purposes, by estimates of future salvage recoveries or by any salvage not in the form of cash or cash equivalents. They indicate further that the Internal Revenue Service, or its predecessor, the Bureau- of Internal Revenue, audited plaintiff’s income tax returns for all but a few of those years and never once proposed any adjustment with respect to plaintiff's treatment of salvage prior to the 1966 audit which precipitated this law suit. Based on the above circumstances, plaintiff argues that its construction of the Regulation, and of the underlying statute, is strongly reinforced by decades of administrative practice and therefore must be given great weight. While a demonstrated practice of the Internal Revenue Service is admittedly very important in construing a statute or a regulation, it cannot be inferred from this that the non-action of the Service is entitled to the same weight. If the Service had taken no action with respect to plaintiff while at the same time requiring regional insurers doing business only in states not having any rules on salvage to make salvage estimates, such non-action with respect to the plaintiff might well be entitled to great weight. Here, however, from all that appears in the record, the Service did nothing with respect to anyone. Thus, we do not feel that the non-action on the part of the Service is entitled to the great weight that plaintiff would have us attribute to it, though we feel it is certainly a factor to be considered in reaching a decision in this case. Defendant has argued that plaintiff’s construction of the Regulation will nullify the statute and that the federal income tax law should not be construed so as to discriminate between casualty insurers who may or may not do business in one state which excludes estimated salvage recoverable. Plaintiff’s construction, however, does not nullify the statute. The statute would apply with full force to regional casualty insurance companies which only do business in states which have no restrictive rules on salvage. Moreover, where the exception for restrictive state salvage rules comes into play, plaintiff’s interpretation does not confine the Regulation to cash adjustments. Other property in the form of cash equivalents would also constitute salvage for which adjustments would be required. It is true that, under plaintiff’s interpretation, the Regulation distinguishes among insurers depending on where they do business (a fact which, to a lesser extent, is also true under both of defendant’s interpretations). However, the fact that differences in state laws may produce different federal tax consequences in no way invalidates the Regulations. See, e. g., Poe v. Seaborn, 282 U.S. 101, 117-118, 51 S.Ct. 58, 75 L.Ed. 239 (1930); Florida v. Mellon, 273 U.S. 12, 17, 47 S.Ct. 265, 71 L.Ed. 511 (1927); Early v. Lawyers Title Insurance Corp., 132 F.2d 42, 46 (4th Cir. 1942); Colorado Title Guaranty Co. v. Allan, 212 F.Supp. 341, 343 (D.Colo. 1962). Finally, we have considered the fact that in the long run it will make no substantial difference in the amount of taxes paid whether salvage recoveries are treated on a “paid” basis or whether estimates are required to be made. Sooner or later salvage recoveries must be taken into income for tax purposes. Thus, there is no question of tax avoidance presented here, but merely a question of when salvage is to be taken into account for purposes of the federal income tax. We are also mindful of the fact that salvage is a relatively minor item when compared with reinsurance, etc. In these circumstances it seems best not to overthrow long-established practice merely to accelerate the receipt of taxes. Such a course of action would cause needless trouble and expense to insurance companies without the realization of any significant offsetting advantage to the government. For all of the reasons discussed above, we conclude that the plaintiff’s interpretation of the Regulation is correct. We hold that Section 1.832-1 (c) of the Treasury Regulations permits plaintiff to exclude from its salvage recoverable adjustment all salvage not yet reduced to cash or cash equivalents where the rule of any state in which it does business bars the reporting of such salvage. Accordingly, the plaintiff’s motion for summary judgment is granted and judgment is entered for plaintiff in the amount of four hundred seventy-seven thousand four hundred seventeen dollars and fifty-one cents ($477,417.51) plus statutory interest thereon as provided by law. . 26 U.S.C. § 832 (1958) reads, in pertinent part, as follows: “§ 832. Insurance company taxable income. “(a) Definition of taxable income. “In the case of an insurance company subject to the tax imposed by section 831, the term ‘taxable income’ means the gross income as defined in subsection (b) (1) less the deductions allowed by subsection (c). “(b) Definitions. “In the case of an insurance company subject to the tax imposed by section 831— “(1) Gross income. “The terms ‘gross income’ means the sum of— “ (A) the combined gross amount earned during the taxable year, from investment income and from underwriting income as provided in this subsection, computed on the basis of the underwriting and investment exhibit of the annual statement approved by the National Convention of Insurance Commissioners. «{! •!» «t* “(3) Underwriting income. “The term ‘underwriting income’ means the premiums earned on insurance contracts during the taxable year less losses incurred and expenses incurred. “(4) Premiums earned. “The term ‘premiums earned on insurance contracts during the taxable year’ means an amount computed as follows: “(A) From the amount of gross premiums written on insurance contracts during the taxable year, deduct return premiums and premiums paid for reinsurance. “(B) To the result so obtained, add unearned premiums on outstanding business at the end of the preceding taxable year and deduct unearned premiums on outstanding business at the end of the taxable year. * * * * * “(5) Losses incurred. “The term ‘losses incurred’ means losses incurred during the taxable year on insurance contracts, computed as follows: “(A) To losses paid during the taxable year, add salvage and reinsurance recoverable outstanding at the end of the preceding taxable year and deduct salvage and reinsurance recoverable outstanding at the end of the taxable year. “(B) To the result so obtained, add all unpaid losses outstanding at the end of the taxable year and deduct unpaid losses outstanding at the end of the preceding taxable year.” . The National Convention of Insurance Commissioners is now known as the National Association of Insurance Commissioners. . This definition of salvage was quoted with approval by the Board of Tax Appeals in George S. Van Schaick, 32 B.T.A. 736, 741 (1935), aff’d, 83 F.2d 940 (2d Cir. 1936), a case which arose under Section 204 of the Revenue Act of 1928, a predecessor to Sections 831, 832 of the Internal Revenue Code of 1954. . Applicable to the years in issue. See Section 1.832-3 of the Treasury Regulations. . Defendant originally argued that no state in which plaintiff did business had any statute, rule or regulation barring salvage estimates. (It has since stipulated to the contrary.) Next, defendant contended that state rules and regulations regarding salvage were irrelevant and that a federal standard as to the meaning of salvage recoverable outstanding should be applied. . Estimates of future salvage recoveries are by their very nature extremely speculative. In the case of subrogation claims the amount of recovery will often depend on something as uncertain as a jury verdict. . See Washington Title Insurance Co. v. United States, 135 F.Supp. 426, 133 Ct.Cl. 164 (1955) for a good illustration of how state insurance rules are applied and how such application has been accepted for federal tax purposes. Three insurance companies, operating as a pool and writing title insurance in Virginia, Maryland and the District of Columbia, attempted to establish unearned premium reserves on a state-by-state basis. Upon examination, state insurance officials required them to apply the strictest state rule on reserves (Virginia’s) to all their business. The companies complied and proceeded to use the strictest state rule in computing unearned premiums for federal income tax purposes. This court concluded that the companies were entitled to deduct the reserves required to be set aside by the strictest state for federal income tax purposes. The Internal Revenue Service cited this case with approval in Rev.Rul. 57-48, 1957-1 Cum. Bull. 212. . Proposed addition to Regulations 111, Section 29.204-2 (the predecessor of current Regulation Section 1.832-1 (c)), 12 Fed.Reg. (Part 3) 1688. . See T.D. 5593, 1947-2 Cum.Bull. 97, and 12 Fed.Reg. (Part 12) 8229 (1947). . See generally Regulations Sections 1.-953-1 through 1.953-5. For other examples of Regulations providing detailed allocation rules, see, e. g., Regs. Sec. 1.482-2 (allocations among affiliated taxpayers in the case of loans, performance of services, use of tangible property, transfer or use of intangible property, and sales of tangible property) ; Regs. Sec. 1.819-2 (allocation of the business of a foreign life insurance company between the United States and foreign countries) ; Regs. Secs. 1.826-4 and 1.826-7 (allocation of expenses by an electing reciprocal underwriter) ; Regs. Secs. 1.861-1 through 1.-861-8 (determination of United States source income) ; Regs. Secs. 1.863-1 through 1.863-6 (allocation of items between sources within and without the United States) ; Regs. Sec. 1.873-1 (allocation of deductions allowed nonresident alien individuals) ; Regs. Sec. 1.882-3 (b) (2) (allocation of deductions allowed foreign corporations). See also Proposed Regulations Sections 1.864 — 3 through 1.-864-7, 34 Fed.Reg. 1030 (1966). . Oasli equivalents, or so-called “admitted assets” other than cash, means property which is reasonably available to pay claims. Thus, an insurer would have to include such noncash items as escrowed collateral to which it was entitled upon payment on a real estate construction bond or undertaking, its rights to a temporarily frozen account in a bank in liquidation, and its rights to stock or securities recovered after payment of a loss on a fidelity bond, for example.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Application of Alexander P. de SEVERSKY. Patent Appeal No. 8816. United States Court of Customs and Patent Appeals. March 8, 1973. Rehearing Denied April 19, 1973. Michael Ebert, Atty., of record, New York City, for appellant. S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. R. V. Lupo, William H. Beha, Jr., Washington, D. C., of counsel. Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN, and LANE, Judges. RICH, Judge. This appeal is from the decision of the Patent Office Board of Appeals, adhered to on reconsideration, affirming the rejection of claims 1 and 10 of appellant’s application serial No. 723,810, filed April 24, 1968, entitled “Multi-Con-centric Wet Electrostatic Precipitator,” for obviousness under 35 U.S.C. § 103. We affirm. Generally, the wet precipitator includes two concentric cylinders which define an annular space between them. Contaminated air or gas to be cleaned is directed through this annular space. Water is caused to flow on the inside surface of the outer cylinder as well as on the outside surface of the inner cylinder. A discharge electrode structure is disposed within the annular space to establish an electrostatic field between the liquid films which line the annular passage. Contaminated gas is introduced through the bottom end of the passage between the cylinders through annular Venturi slots and is subjected to the electrostatic field which causes the particles in the gaseous stream to become ionized and migrate to the collecting films on the surfaces of the tubes lining the passages. The liquid films then carry the extracted matter away into a drain. The significant aspect of this invention is the Venturi inlet which causes the gas flow to spread outwardly against the water films and press them against the walls of the annular passage. Claim 1 reads (emphasis ours): 1. An electrostatic wet precipitator comprising: (a) concentrically arranged collector tubes defining at least one vertically-disposed annular gas passage, (b) means to produce downwardly-flowing films of liquid on the complementary surfaces of adjacent tubes which line said passage thereby to form liquid collectors, (c) a discharge-electrode structure disposed within said passage in spaced relation to said liquid collectors; (d) inlet means including a Venturi opening to feed a contaminated gaseous stream into the lower end of each passage to produce an expanding gas which flows upwardly through said passage in counter-current relationship to said liquid films to force said films against said surfaces to maintain the uniformity thereof, (e) means to apply a high voltage between said discharge-electrode structure and said liquid collectors to ionize the contaminants in the gaseous stream flowing through said passage to cause migration of contaminants toward said liquid collectors and thereby purify the gas; and (f) outlet means at the upper end of said passage to discharge the purified gas. Claim 10 is a dependent claim and no separate argument is made as to its pat-entability if claim 1 is not patentable. The references principally relied on and the only ones we need consider are: Nesbit 1,357,202 Oct. 26,1920 Burns 1,250,088 Dec. 11,1917 de Seversky (A) 3,238,702 Mar. 8,1966 It is unnecessary to discuss the disclosures of these references because of an admission by appellant made in his reply brief before the board and in substance repeated at oral argument in this court, as follows: The primary question before the Board is whether there is any prior-art reference of record, whose date is effective against the instant application, which discloses a Venturi inlet for feeding contaminated gas into an electrostatic precipitator tube. If such a reference exists, then appellant concedes that this reference, when combined with the other references of record, makes the present invention obvious and unpatentable. However it is appellant’s contention that de Seversky (A), which discloses a Venturi inlet, is not an effective reference whereas those references which are effective do not even remotely disclose a Venturi inlet. The solicitor’s brief, in turn, contains the admission that “Nesbit and Burns do not disclose venturi inlets in the contaminated gas openings of their precipi-tators.” The solution of this case, therefore, depends upon the answer to a single question of law: has appellant overcome the date of the de Seversky (A) patent so that it is not available as a reference? There is, of course, no question that de Seversky (A) is a good reference unless its date is overcome because it issued as a patent over two years before the application at bar was filed. ■ Appellant argues here, as he' did below, that de Seversky (A) is not available as a reference because he is entitled to the date of a parent application filed in 1960, which antedates the de Seversky (A) patent, in which certain disclosure of a Venturi gas inlet is incorporated by reference from a still earlier grandparent application filed in 1955, referred to as de Seversky (C). The sequence is as follows: I. de Seversky (C) — Patent 3,-053,029 — Sept. 11,1962. Grandparent, filed January 5, 1955. II. de Seversky parent, application serial No. 53,255. Filed August 31, 1960, a “continuation-in-part” of I. III. de Seversky instant application, serial No. 723,810. Filed April 24, 1968, a “continuation-in-part” of II. It will be seen that so far as antedating de Seversky (A) is concerned, appellant relies for filing date only on serial No. 53,255, II above. That parent application, however, is totally devoid of any reference to a Venturi inlet and by itself is of no help to appellant as support for the appealed claims. Appellant admits to this defect in the parent application, saying in his brief, “parent application Serial No. 53,255 did not directly disclose a Venturi inlet.” He urges, however, that the defect is cured because the grandparent, de Seversky (C), discloses a Venturi inlet and because the parent application is a “continuation-in-part” of the grandparent that disclosure is, ipso facto, “incorporated by reference” in the parent. It should be noted in this connection that the parent application, No. 53,255, contains no “incorporation-by-reference” language whatsoever. Its only relation to de Seversky (C) is indicated by the simple statement that it is a “continuation-in-part” thereof. That language is insufficient to incorporate any part of de Seversky (C) into the parent case. All it means is that insofar as the disclosure of the parent finds corresponding disclosure in the grandparent, the parent is entitled to the filing date of the grandparent. 35 U.S.C. § 120. Appellant is confusing two distinctly different things: (1) the right to have the benefit of the filing date of an earlier application under § 120 for subject matter claimed in a later application because that subject matter is disclosed in an earlier application to which “a specific reference” is made — i. e., a reference to the earlier application per se, and (2) the incorporation by reference in an application of matter elsewhere written down (not necessarily in a patent application), for economy, amplification, or clarity of .exposition, by means of an incorporating statement clearly identifying the subject matter which is incorporated and where it is to be found. Appellant’s parent application, serial No. 53,255 is not, however, in either category (1) or (2) above. The Venturi inlet is not disclosed therein and the application contains no statement which incorporates anything by reference. There is nothing but the statement that the parent is a “continuation-in-part” of the grandparent application, now the issued de Seversky patent (C). An argument similar to that appellant is making here was made in In re Lund, 54 CCPA 1361, 376 F.2d 982, (1967), where the Patent Office contended that disclosure in an abandoned application was “incorporated by reference” into the disclosure of a patent used as a reference by virtue of the statement that the application for the patent was a “continuation-in-part” of the abandoned application. We there held that such a statement does not operate to incorporate in an application any part of the disclosure of the parent application so referred to. To be sure, the statement that an application is a continuation-in-part, or a continuation, or a division, or in part a continuation of another application is in a broad sense a “reference” to the earlier application, but a mere reference to another application, or patent, or publication is not an incorporation of anything therein into the application containing such reference for the purposes of the disclosure required by 35 U.S.C. § 112. Likewise it does not serve to bring a disclosure within the requirements of 35 U.S.C. § 120 so as to give a later application the benefit of the filing date of an earlier application. The later application must itself contain the necessary disclosure. As we said in Lund, As the expression itself implies, the purpose of “incorporation by reference” is to make one document become a part of another document by referring to the former in the latter in such a manner that it is apparent that the cited document is part of the referencing document as if it were fully set out therein. [Emphasis added.] We held in Lund that the mere statement that an application is a “continuation-in-part” does not do that. Appellant relies on language in Lund but that case decided the legal question appellant presents here flatly contrary to his contentions. Since there is admittedly no disclosure of the crucial Venturi inlet in appellant’s parent application, No. 53,255, and that parent application contains no incorporation by reference of any of the disclosure of the de Seversky (C) grandparent case, appellant is entitled to the filing date of neither for the subject matter of the appealed claims and the de Seversky (A) reference has not been antedated or overcome. In view of the admission made, the appealed claims are not patentable. The decision of the board is affirmed. Affirmed. See the opinion of the Court of Appeals for the District of Columbia in de Seversky v. Brenner, 137 U.S.App.D.C. 369, 424 F.2d 857 (1970), in an action under 35 U.S.C. § 145 on claim 20 of serial No. 53,255, the rejection of which was affirmed, bearing on this point.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Application of Robert J. HERSCHLER. Patent Appeal No. 8889. United States Court of Customs and Patent Appeals. March 8, 1973. Robert E. Howard, San Francisco, Cal., attorney of record, for appellant. Thomas R. Lampe, San Francisco, Cal., of counsel. S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. Fred E. McKelvey, Washington, D. C., of counsel. Before MARKEY, Chief Judge, RICH, ALMOND, BALDWIN, and LANE, Judges. LANE, Judge. This appeal is from the decision of the Board of Appeals, adhered to on reconsideration, sustaining the rejection of claims 16, 27, 28, 29, 35, 36 and 38 of appellant’s application entitled “Enhanced Plant Tissue Penetration” as un-patentable under 35 U.S.C. § 103 in view of a publication of The Stepan Chemical Company (hereafter Stepan). We reverse. Appellant describes his invention as follows: This invention relates to a method and compositions whereby the penetration of plant-active agents into a living plant may be enhanced. More particularly, the invention relates to a method and compositions where plant-active agents are applied to plants along with dimethyl sulfoxide so that they may be penetrated into plant tissue which previously barred penetration or permitted penetration of the agents to a lesser degree. The invention clearly stems from the recognition of the ability of dimethyl sulfoxide (hereafter DMSO) to enhance the penetration of a plant-active agent into the plant tissue. Within the sense of the term “plant-active agent,” appellant ineuldes “plant growth regulators, nutrients, some herbicides, insecticides, fungicides, viru-cides, antibiotics, [and] defoliants * * * ,” which “are only effective to the extent that they can penetrate into plant tissue.” Appellant also contemplates the improvement in the effectiveness of such agents as “pesticides, colorants, odorants, [and] defoliants * * * ,” agents which apparently can perform their functions by their presence on only the surface of the plant but which seemingly work better with penetration. Claims 16 and 35 are representative of the appealed claims, all of which are method claims, and read as follows: 16. A method of enhancing penetration of a plant-active agent into the living tissue of a living rooted plant, said agent being capable of effecting a physiological response within the plant, which comprises contacting the plant with a liquid composition comprising an amount of said agent effective to obtain physiological response by said plant and dimethyl sulfoxide in an amount effective to enhance penetration of said agent into the living tissue of said plant, the concentration of dimethyl sulfoxide in said composition being at a substantially non-phytotoxic level for the selected amount and route of application of said composition to the plant. 35. A method of enhancing penetration of a herbicide into the living tissue of a living rooted plant which comprises contacting the plant with a composition comprising an effective amount of a herbicide and dimethyl sulfoxide in an amount effective to enhance penetration of said herbicide into the living tissue of said plant. The remaining claims impose various limitations on the composition and method of applying it to a plant. Some of those claims specify that the composition contains a major amount of water or “agricultural diluent” and limit the concentration of DMSO to up to 10% by weight of the composition. The sole reference relied upon is Ste-pan, a publication which lists many substances which are soluble in DMSO. The pages specifically referred to merely contain a listing of each substance and its degree of solubility at 20-30° C. (room temperature), 90-100° C., and 130-180° C. Among the substances are some fifteen insecticides, all of which appear to be quite soluble at room temperature. The board focused on one such insecticide, 2, 4-dichlorophen-oxyacetic acid (hereafter 2, 4-D), indicated to be “very soluble” at room temperature, reasoning as follows: [Stepan] discloses not only the association of dimethyl sulfoxide with various standard insecticides as a solvent but also the similar association of this solvent with 2, 4-dichlorophen-oxyacetic, an or even “the,” outstanding hormonal herbicide in general, which operates through its extreme growth-enhancing or “regulating” effect. This compound is so well known for this utility that its association with the specified compound as a very effective solvent would suggest to any person in the art its applicability to plants, or vegetable growth as a herbicide. No utility of significant proportions with respect to agricultural insecticides is similarly evident so that the herbicide does not stand in the same position as the insecticides with which it is grouped. (The grouping, no doubt, is a matter of convenience rather than strict classification.) The disclosure of the insecticide-solvent combinations does not carry the same necessary association of the dimethyl sulfoxide with plant utility because these insecticides are not restricted to plant treatment. As applied to herbicides, and particularly 2, 4-dichloro-phenoxyacetic acid, the provision of emulsifying agents, wetting agents, and application in the form of an aqueous emulsion of herbicidal solution are so much to be expected that they would contribute nothing unob-vious to the basic concept provided by the reference * * * . In a decision on reconsideration, the board referred to that portion of appellant’s specification which states the following : Plant-active agents are conventionally applied in dilute form in composition with various nonphytotoxic agricultural diluents or carriers, in most eases water. Where the plant-active agent is insoluble in the diluent, emulsifiers or dispersing agents are utilized to maintain the agent in a dispersed condition in diluent. Only a very few agents penetrate well into plant tissue even with such diluents or carriers and still fewer have the ability to move through the vascular system of the plant (translocate) once they are penetrated. It has generally been accepted that the choice of diluent or carrier or of surfactant seldom increases the rate of penetration of a given agent since their role is merely to bring the agent into better distribution and intimate contact with the plant surfaces. Few (if any) substances are available which may be applied with the agent, in either concentrated or dispersed form, to materially increase penetration. The board also alleged as a fact “that the spreading powers of the DMSO are an important consideration in the employment of the DMSO as an herbicidal solvent and that on the record there was no reason to question the spreading characteristics of the solvent.” OPINION We are of the view that, on the record before us, the claimed subject matter would not have been obvious to one of ordinary skill in the pertinent art at the relevant time. Stepan discloses the solubility of a known herbicide, 2, 4-D, in DMSO, but does not teach that such a solution may be applied directly to plants. While the board, as well as the solicitor, has attempted to strengthen the import of Stepan by relying on appellant’s specification disclosure, all we glean from that disclosure, reproduced above, is that a plant-active agent is normally applied in dilute form in various non-phytotoxic agricultural diluents, usually water. The missing link is any suggestion that either DMSO was a known “agricultural diluent” at the time appellant’s invention was made or that it was known at that time to use any solvent in the capacity of “agricultural diluent.” We are not inclined to agree with the board that the “association” of a well known herbicide with a certain solvent, without more, necessarily suggests the application of a solution of the herbicide in that solvent to a plant. We also find no appreciation in Step-an of the underlying basis of the invention, recognition of the ability of DMSO to enhance penetration. We do not understand the Patent Office to challenge the assertion that DMSO so functions and are aware of nothing in the record tending to rebut the contention that it is unexpected. When the evidence presented by appellant is weighed against the case for obviousness made out by the Patent Office, patentability is convincingly established. For the reasons stated, the decision of the board is reversed. Reversed. . Serial No. 615,377 filed February 13, 1967, as a continuation-in-part application of Serial No. 344,558 filed February 13, 1964, which was, in turn, a eontinuation-in-part application of both Serial No. 203,743 filed June 20, 1962, and Serial No. 67,493 filed November 7, 1960. . “Solubilities of Various Substances in Di-methyl Sulfoxide,” January 1956, pp. 1-10.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

60 CCPA The UNITED STATES, Appellant, v. F & D TRADING CORP., Appellee. No. 5407. United States Court of Customs and Patent Appeals. March 1, 1973. Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Bernard J. Babb, New York City, for the United States. Rode & Qualey, New York City, attorneys of record, for appellee. Ellsworth F. Qualey, New York City, of counsel. Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges. LANE, Judge. This appeal is from the decision and judgment of the Customs Court, Third Division, Appellate Term, 64 Cust.Ct. 810, A.R.D. 268 (1970), wherein a majority of the Appellate Term reversed the decision and judgment of a single judge sitting in reappraisement, 59 Cust.Ct. 666, 273 F.Supp. 431, R.D. 11360 (1967). We affirm the judgment of the Appellate Term. The merchandise in issue consists of eight Volkswagen automobiles which were exported from West Germany in 1963. Automobiles, being on the Final List of the Secretary of the Treasury, T.D. 54521, are subject to appraisement under section 402(a) of the Tariff Act of 1930, as amended by the Customs Simplification Act of 1956, 91 Treas. Dec. 295, T.D. 54165. The present automobiles were appraised on the basis of export value (section 402a(d)) while the importer-appellee claims the proper basis is cost of production (402a(f)). By the provisions of section 402a(a), the value of merchandise is determined on the basis of cost of production only if export value, foreign value and United States value cannot be satisfactorily ascertained. Paragraphs of section 402a which are particularly involved here read: (d) Export value — The export value of imported merchandise shall be the market value or the price, at the time of exportation of such merchandise to the United States, at which such or similar merchandise is freely offered for sale to all purchasers in the principal markets of the country from which exported, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States, plus, when not included in such price, the cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the merchandise in condition, packed ready for shipment to the United States. (e) United States value — The United States value of imported merchandise shall be the price at which such or similar imported merchandise is freely offered for sale for domestic consumption, packed ready for delivery, in the principal market of the United States to all purchasers, at the time of exportation of the imported merchandise, in the usual wholesale quantities and in the ordinary course of trade, with allowance made for duty, cost of transportation and insurance, and other necessary expenses from the place of shipment to the place of delivery, a commission not exceeding 6 per centum, if any has been paid or contracted to be paid on goods secured otherwise than by purchase, or profits not to exceed 8 per centum and a reasonable allowance for general expenses, not to exceed 8 per centum on purchased goods. (f) Cost of production — For the purpose of this subtitle the cost of production of imported merchandise shall be the sum of— (1) The cost of materials of, and of fabrication, manipulation, or other process employed in manufacturing or producing such or similar merchandise, at a time preceding the date of exportation of the particular merchandise under consideration which would ordinarily permit the manufacture or production of the particular merchandise under consideration in the usual course of business; (2) The usual general expenses (not less than 10 per centum of such cost) in the case of such or similar merchandise; (3) The cost of all containers and coverings of whatever nature, and all other costs, charges, and expenses incident to placing the particular merchandise under consideration in condition, packed ready for shipment to the United States; and (4) An addition for profit (not less than 8 per centum of the sum of the amounts found under paragraphs (1) and (2) of this subdivision) equal to the profit which ordinarily is added, in the case of merchandise of the same general character as the particular merchandise under consideration, by manufacturers or producers in the country of manufacture or production who are engaged in the production or manufacture of merchandise of the same class or kind. The record consists of affidavits of Thure Dommenget and Rudolf Raab, testimony of Erwin Losch, James Westburg and Bertram Saul, and accompanying affidavits. Dommenget and Raab were dealers who sold Volkswagens outside the franchise of the manufacturer, Volkswagen Werke, in West Germany. Losch was a buyer and seller of Volks-wagens for appellee and Westburg was another buyer and exporter of Volkswa-gens outside the manufacturer’s franchise. Saul was the customs examiner in charge of appraisement and classification of automobiles and spare parts at the port of New York. The evidence indicates that the Volks-wagens at bar were purchased in West Germany from dealers or “exporters” who acquired them either from dealers franchised by the manufacturer, Volkswagen Werke, or from private individuals. Appellee paid these “exporters” for the automobiles in cash and accepted delivery in the free trade zone of Hamburg. Delivery was made there so that the “exporters” would receive a rebate the West German government made on exported merchandise. Since the automobiles had not been manufactured for exportation to the United States and thus did not meet all American standards, appellee had them “Americanized” at its expense in Hamburg. That process included installing safety glass windshields, leather seats, mileage speedometers, sealed beam headlight housings, white directional lights and bumpers, as needed. These imported Volkswagens lacked the manufacturer’s warranty because those franchised dealers who sold them were unwilling to expose their identity and risk the possibility of Volkswagen Werke taking punitive measures against them. About 4,000 Volkswagens in 1962, and about 5,000 in 1963, were purchased and exported to the United States by appellee in this manner. At that time there were about 15 West German “exporters” selling Volkswagens to appellee and other American importers. Upon importation, these Volkswagens were appraised at statutory export value, that value being determined by adding to the price appellee paid for each vehicle the amount it spent to Americanize it. The witness Saul testified that customs considered the vehicles used rather than new because they had left the regular distribution channels by which Volkswagen Werke distributed vehicles in the United States. In response to a subpoena duces tecum, he produced a so-called cost of production sheet, Exhibit 3, which he had circulated to appraising officers of the Customs Bureau throughout the country for the purpose of showing the value, based on cost of production, § 402a(f) supra, at which to appraise Volkswagens imported through channels of Volkswagen Werke and by tourists from February 1, 1963 to July 31, 1963. In denying appellee’s appeal for reap-praisement at cost of production, the trial court held that it had failed to “negative the existence of export value,” which “is alone sufficient to preclude it from prevailing in this case.” The court further held that appellee had neither “negatived” the existence of statutory United States value nor established a value predicated on statutory cost of production. A majority of the Appellate Term disagreed on all points. It found the evidence to show that there was no statutory export value or United States value, that the absence of foreign value was “virtually conceded,” and that statutory cost of production had been proved. Hence it found statutory cost of production to be the proper basis for appraisement. Except that it does not claim that there is any statutory foreign value, appellant disputes each of those findings of the majority of the Appellate Term. By statute, the jurisdiction of this court in reappraisement cases is limited to a review of the judgment below on matters of law, which include the question whether that judgment is supported by substantial evidence in the record. United States v. E. R. Squibb & Sons, 42 CCPA 23, 26, C.A.D. 564 (1954). Under that standard, the finding of the majority of the Appellate Term as to export value must be sustained. The majority observed that the value of merchandise for reappraisement purposes must be determined in accordance with its condition at the time of exportation. It then stated: [T]he difficulty with the appraise-ments at bar is that they do not purport to determine a market value or price as distinguished from a mathematical calculation. It is settled law that export value may not be determined by such a calculation. United States v. Alatary Mica Co., 19 CCPA 30, T.D. 44871 (1931); United States v. S. Shamash & Sons, Inc., 32 Cust. Ct. 665, A.R.D. 41 (1954). We agree that the appraisements here do not comply with the statutory provisions for export value. The value found- was not, in terms of section 402a(d), “a market value or * * * price” at which merchandise such as or similar to the Americanized Volkswagens imported here were “freely offered for sale,” to all purchasers in the principal markets of West Germany “in the ordinary course of trade.” Contrary to the import of appellant’s arguments, use of the term “market value” in the statute does not avoid the necessity of basing export value on an amount at which the merchandise is “freely offered for sale.” Muser v. Magone, 155 U.S. 240, 15 S.Ct. 77, 39 L.Ed. 135 (1894), cited by appellant, is not authority to the contrary. The appraisement upheld there was made under a statute including a provision for appraisers, “by all reasonable ways and means, * * * to ascertain, estimate, and appraise the true and actual market value and wholesale price * * * of merchandise * * *." The statute did not include an express requirement that the appraised value be based on an amount at which the merchandise was “freely offered for sale.” The Appellate Term considered the evidence to show the only Volkswagens comparable to the Americanized grey market Volkswagens as imported here to be the Volkswagens controlled by the manufacturer for distribution in the American market either through its American distributor or through American tourists. It correctly noted that the evidence was uncontroverted that the regular channels for such distribution were controlled and would not support a finding of export value under the statute. Losch testified that purchasers of grey market Volkswagens for export to the United States other than appellee all operated in substantially the same way as appellee. That testimony, along with testimony of Westburg and statements of the affiant Raab that tend to confirm it, provides substantial evidence to support the finding that the other Americanized Volkswagens imported, like the eight at bar, were not offered for sale in West Germany in the condition in which they were exported. Hence the Appellate Term did not err in finding that the existence of an export value under the statute had been negated. On the question of United States value, appellee faces no adverse presumption. The Appellate Term noted that it was the intention of the West German manufacturer to retain absolute control in the United States, as well as in the home market, of the distribution of its output down to the consumer. It further noted that the Americanized, or grey market, Volkswagens represented a diversion of vehicles manufactured for German consumption and that they lacked the conventional manufacturer’s warranty. The Appellate Term stated: It seems rather incongruous that the New York appraiser, once he found the styles 113 and 117 of the model 1200 Volkswagens as imported by dealers outside of the franchise not to be significantly different from the counterpart models imported within the franchise, as the record shows, would, after appraising the extra-franchise vehicles under a statutory value basis predicated upon market value or price (i. e,., export value), thereafter proceed to appraise the franchise vehicles under the residual value basis (cost of production), unless it was apparent to him at the time of appraising the franchise vehicles that transactions involving the extra-franchise vehicles were not in the ordinary course of trade. For if he thought otherwise he would have been obliged to appraise all of such vehicles, whether within or without the franchise, under the export value basis, in view of the statutory priorities. The fact that he did not do so here is indicative that transactions outside of the franchise with respect to these Volkswa-gens were not considered to be in the ordinary course of trade. And in either case the manufacturer’s practice has been shown here to be one of strict controls. It, therefore, follows from the foregoing that we find ourselves in disagreement with [the Government] that a United States value for the involved merchandise exists by default in proof, as the result of our views on the matter of the ordinary course of trade. For the reason stated we are of the opinion that the evidence negatives the existence of a United States value for the involved merchandise, and that the proper basis for appraising said merchandise is cost of production. As to cost of production, the Appellate Term held, contrary to the trial court, that Exhibit 3, the schedule of cost of production values used for Volkswagens imported into the United States through the manufacturer’s channels, was admissible in evidence. Regarding those Volkswagens as either “such or similar” merchandise under section 402a(f), the Appellate Term found that appellee had established prima facie a cost of production value for the Volkswagens in this ease equal to the value set forth in Exhibit 3 for corresponding models. We agree with the Appellate Term’s conclusions as to United States value and cost of production. Those views are predicated on the premise that the Volkswagens imported through the manufacturer’s channels are “such or similar merchandise,” under both statutory provisions, with respect to the Americanized Volkswagens imported by appellee. That premise finds overwhelming support in the evidence. The evidence is uncontradicted that the grey market and regular channel Volkswagens were nearly identical with the differences, extremely minor, residing in the holes drilled in the fenders, use of amber or red portions in the tail lights and variations in speedometer fittings. Saul revealed that the reason Customs appraised the present vehicles differently was that they were considered second hand because they had left the usual distribution channels. That position is unsound for several reasons. First, there is uncontroverted evidence that appellee’s Volkswagens were not previously used by a consumer and that they were “new” by accepted standards. Second, Saul testified that Customs also applied the Exhibit 3 values to Volkswagens imported by tourists, which in some cases at least were certainly used abroad prior to importation. In addition, there is no evidence to support a conclusion that Volkswagens substantially the same as those imported directly from the manufacturer became other than “such or similar” merchandise simply by reason of some previous use. As to accepting Exhibit 3 in evidence, the Appellate Term clearly did not err. The testimony of Saul definitely establishes its authenticity and probative value as setting forth cost of production values that Customs applied to such or similar merchandise during the time period pertinent under the statute. This exhibit, along with the evidence of its use, gives rise to the presumptions that there was no statutory United States value for the imported Volkswa-gens and that the values set forth therein represented the true cost of production under the statute, that is, the sum of the individual items that section 402a(f) decrees shall make up cost of production. To reject those values because a breakdown is not provided, as appellant asks, would be unreasonable under the circumstances and merely thwart the obvious intent of the statute to appraise at the true value. For the reasons stated, appraisement of the imported Yolkswagens at the cost of production values found by the Customs Court, Third Division, Appellate Term is correct, and its judgment is affirmed. Affirmed. 155 U.S. at 244, 15 S.Ct. at 79.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Arvid C. WALBERG, Appellant, v. Richard O. PROBST, Appellee. Patent Appeal No. 8772. United States Court of Customs and Patent Appeals. March 8, 1973. Penrose Lucas Albright, Arlington, Va., Mason, Albright & Stansbury, Chicago, Ill., attorneys of record, for appellant. David H. Badger, Greenwich, Conn., Richard R. Trexler, Richard S. Phillips, Chicago, Ill., attorneys of record, for appellee. Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges. BALDWIN, Judge. This appeal is from the decision of the Board of Patent Interferences awarding priority of invention to appel-lee Probst, the junior party. Probst is involved through his application serial No. 272,615, filed April 12, 1963. Wal-berg is involved through application serial No. 471,965, filed July 14, 1965, which is a division of application serial No. 254,899, filed January 30, 1963. The Invention The invention relates to electrostatic-hydrostatic coating apparatus described in appellant’s brief as follows: The invention involves an electrostatic spray painting device of a type which utilizes a high voltage (generally 50,000 to 100,000 volts) to charge atomized paint as or soon after it leaves the nozzle. Paint so charged tends to seek grounded objects, usually manufactured objects, which travel past the painting device on a conveyor. A relatively high percentage of the charged paint is attracted to the objects thus painted - and, indeed, the attraction is such that much paint spray missing the objects is drawn back and thus both sides may be painted even though only one side faces the painting device. This is known as “wrap around.” Until the instant invention, the atomization of the paint in such devices was generally accomplished either electrostatically or by air atomizing jets. -X- -X- * * * -X- Basically the invention is a hydrostatic (also referred to as “airless”) spray gun with electrostatic charging means. The gun has an elongated body of insulating material. There is one passage through the elongated body for carrying paint to the spray gun’s nozzle at pressures up to 3,000 psi and a second passage for carrying a high voltage (up to and over 100,000 volts) in an electric circuit to a charging electrode operatively associated with paint discharged from the orifice of the gun’s nozzle. Both passages terminate near the forward end of the body. As set forth in the second count, a resistor is carried in the electrical passageway and both passages extend longitudinally through the body. The purpose of the resistor is to limit discharge from the charging electrode should it be accidentally grounded. Two counts are in issue, count 1 reading as follows (paragraphing added): Apparatus for hydrostatic atomization and electrostatic deposition of coating material on a surface to be coated, comprising: an elongated body of insulating material having two passages there-through, terminating adjacent the forward end thereof; means connecting one of said passages with a supply of liquid coating material under sufficient pressure to effect discharge of said material through an orifice for hydrostatic atomization; means for controlling the flow of coating material through said one passage; circuit means in the other of said passages, connectable with a source of high potential; first means mounted on said body, closing the other of said passages; second means mounted on said body and extending across said one passage and including a surface defining the orifice in communication with said one passage; a conductive charging electrode op-erably associated with the discharge from said orifice; and further circuit means connecting said electrode through the circuit means in said other passage with said high potential source for electrostati-cally charging atomized particles of coating material discharged from said orifice. Count 2 specifies that the “two passages” in the “body” extend “longitudinally therethrough” and are offset from the axis of the body and calls for “resistor means” in the other passage. The Board’s Decision The board considered evidence by both parties directed to showing conception and reduction to practice prior to their filing dates. It held that appellee’s evidence showed that a spray gun built by Probst’s assignee, Ransburg, embodying the limitations of count 1, was successfully operated as early as October 18, 1961, and thus proved reduction to practice of the invention of the count by that date. It found that evidence including a drawing introduced as Exhibit P-1 established conception of the invention of count 2 as early as July 13, 1961. The board further held that appellee’s evidence was sufficient to establish a reduction to practice of a spray gun meeting both of the counts as early as April 25, 1962. ' In arriving at the above holdings with respect to conception and reduction to practice by Probst, the board rejected a “contention of conflicting and confused evidence of conception” urged by Wal-berg “as not supported by the record.” It characterized Walberg’s allegation as “akin to a contention of third party in-ventorship which is not entitled to consideration in an interference proceeding in accordance with a long line of decisions” citing Foster v. Antisdel, 14 App.D.C. 552, 1899 C.D. 413, and Huang v. Cheney, 362 F.2d 816, 53 CCPA 1355 (1966). As to Walberg, the board held that the record established conception no earlier than January 27, 1962 and reduction' to practice no earlier than June 26, 1962. With respect to claims by Wal-berg to earlier dates it stated; 5. The evidence of Walberg relating to the earlier models of spray guns in which the high voltage cable was: (1) connected adjacent the forward end of the barrel (Exhibit W-“A”), (2) provided with a sleeve of insulating material loosely mounted on the handle of the gun, which sleeve * * * [was], taped to the paint tube to prevent the connection at the front end from breaking (Exhibit W“H”), and (3) incorporated in a tube of insulating material detachably mounted adjacent the paint tube (Exhibit W-“P” and W — “Yl”) [,] has presented us with the issue of whether or not such models meet the counts of the interference. The resolution of such issue requires the consideration of three kinds of electrical connections in which the insulation material for a high voltage wire or cable and the insulated shielding for such insulated cable is suggested by Walberg as forming a body with the like material of the device to which the cable is connected. The insulation of the wire connected to the forward portion of the gun in Exhibit W-“A” or the polyethylene tube welded to the insulation of the cable in Exhibit W-“H” appears no different than the insulation on a usual electrical connection and, therefore, does not in our opinion constitute with the paint tube an elongated body of insulating material having two passages therethrough as required by the counts of the interferences [sic]. The insulating material of the other electrical cable wherein one end is securely attached with a metal clamp to the handle of the gun, as shown in Exhibit W-“P” and additionally provided with a slidable bracket of insulating material at its other end, as shown in Exhibit W-“Y1” is regarded as an electrical connection not unlike that shown in Exhibit W — “H”, and consequently, is not considered to form with the paint barrel a body “having two passages therethrough”, as claimed within the context of the disclosures of both parties. The guns shown in Exhibits W-“P” and W-“Yl”, consequently, fail to support the counts of interference. The decisions cited by the senior party, obviously, do not postulate any collection or connection of parts to be a body and hence we are not persuaded to hold that the insulating material surrounding the electrical cables referred to above cooperates with the insulating material of the paint tube to form the body having the two passages therethrough as required by the counts of interference ; the cooperation so urged we believe was presented as an afterthought on the part of Walberg. Wal-berg’s doubts as to the soundness of such urging is reflected in both the offer to dig up some firm data on one-piece construction (last paragraph, Exhibit W-“RR1”), and his earlier statement in the penultimate paragraph of page 5 of Exhibit W-“TT2” that “In our older design, the high voltage cable was separate from the gun.” Opinion 1. Appellant’s Date of Invention Appellant does not rely here on the guns referred to by the board as items (1) and (2) in the above quotation. He contends rather that the gun (or guns) referred to in item (3), which he designates the “DB-gun” (“DB” standing for “double barrel”) meets the terms of the counts and was successfully tested and reduced to practice on or before September 7, 1961.” Since the board based its rejection of the DB gun as a reduction to practice on the holding that the structure of that gun does not comply with the counts without specific consideration of the tests of the gun, the question of compliance with the counts is the determinative question before us for review. More specifically, the issue is whether the DB gun, comprising spaced plastic tubes attached at front and rear and forming separate passages, meets the requirement for “an elongated body of insulating material having two passages therethrough” in count 1 and the corresponding more limited recitations in count 2. Both parties’ applications disclose paint guns in which two parallel longitudinal passages for the coating material and the high potential electrical circuit are formed in a forwardly extending body of plastic material. The front of the coating material passage ends in an orifice that atomizes the material as it passes therethrough and a charging electrode associated with the orifice is energized from the electrical circuit in the other passage. In the Probst structure connection of the electrical circuit to a high potential source is made through á handle attached at the rear end of the insulating body and the passage for the coating material communicates with a source of material through a fitting located just in front of the handle. In the Walberg structure, the handle is formed integrally with the body forming the barrel portion and communication of both passages to their supply sources is through the handle. On the other hand, the DB gun was doubled barreled as noted. It gave the appearance of a paint gun provided with the usual handle, to which a tubular electrical device has been attached. The tube or barrel portion containing the cable or circuit was spaced slightly from, and parallel to, the paint gun barrel. An electrical connection between the barrels was made at the nozzle end of the paint gun barrel through what appears to be a small spacing tube. The barrels were connected at the other end by means of a narrow clamp member. A fitting for engagement with a paint supply line communicated with the barrel of the paint gun portion. A cable for connecting a potential source to the conducting means in the other barrel extended from the rear end of that barrel unsupported by the paint gun portion or its handle. Appellant contends that the word “body” has such broad connotation that the DB gun, with its two tubular barrels attached together in spaced side-by-side relationship meets the claim limitation to “an elongated body of insulated material having two passages therethrough.” He cites a definition of “body” in the broad sense as “the main central or principal part of anything as distinguished from subordinate parts, such as the extremities, branches, wings, etc.” He also refers to broad interpretations in prior eases, e. g., Ex parte Clark, 97 USPQ 165 (Bd.Appls. 1952), as indicating that a “body” need not be a single piece. He further observes that an interference counts should ordinarily be given the broadest interpretation that it will reasonably support, citing Mahan v. Doumani, 333 F.2d 896, 51 CCPA 1516 (1954). Appellant argues alternatively that, even if the word “body” is considered ambiguous as used in the counts, it should be interpreted in such a manner that the counts read on the DB gun. In support, he refers both to the use of “body” to describe other elements in the Probst application, in which the counts originated, and to arguments made during the prosecution of that application. We accept the broad definitions which appellant cites and agree with the general propositions of law on which he relies. But, giving the word “body” the broadest interpretation that it will reasonably support, we are not persuaded that there is any error in the board’s finding that DB gun did not include a “body” having passages as recited. That gun comprises two basically separate elements, the paint gun and the electrical-potential-providing means, attached to one another in horizontal spaced relationship. While the elements were oper-atively associated through the electrical connection at the front end, the spacing between the two was substantial and the attachment between them was by narrow means that were widely spaced at opposite ends of the barrels. The barrels thus constituted two distinct members despite the attachment. They cannot reasonably be designated as one “body” nor could the two passages therein be regarded as in the same part or “body.” Moreover, consideration of the points appellant makes with regard to the Probst application and its file history reveals no reason for reaching a different conclusion. 2. Alleged Third-Party Inventorship Appellant charges that the preponderance of the evidence establishes that Williams, a witness who had been a design engineer for Ransburg at the time of the development, “is the actual inventor in this case or that it was, at best, a joint invention, in which Mr. Probst participated.” Appellant’s principal point is that if Williams was a joint inventor, his testimony cannot be relied on for corroboration. The board stated: The conception of conflicting and confused evidence of conception urged by Walberg is not considered to be supported by the record inasmuch as the invention of the count does not appear to be attributed to or claimed by anyone other than Probst. Probst obviously has been considered by Rans-burg, the assignee, as the inventor. We think that the board was plainly correct in holding that Walberg’s charge is not supported by the record. Probst testified unequivocally that he was the inventor of the subject matter of the count. He also testified that the gun shown in Exhibit P-1 found to have constituted a reduction to practice of count 2, was his conception. Although Williams drew Exhibit P-1, he testified that he “always looked to Probst as the project engineer” for the Ransburg gun and stated that he “was instructed to” draw the gun. The record here is completely lacking in evidentiary support for either a contention that Williams was a joint inventor or that the work of Williams does not inure to the benefit of Probst. See Willens v. Breen, 343 F.2d 477, 52 CCPA 1210 (1965); Applegate v. Scherer, 332 F.2d 571, 51 CCPA 1416 (1964). The decision of the board is affirmed. Affirmed. . Assigned to Ransburg Electro-Coating Corp. . Assigned to H. G. Fischer & Co. . Appellee points out that electrostatic-hydrostatic coating or spraying basically was known prior to the inventions of the present applications, directing attention to U. S. Patents No. 3,048,498 and 3,169,-883 and to a discussion of the development of the art in Ransburg Electro-Coating Corp. v. Nordson Corp., 293 F.Supp. 448 (N.D.Ill.1968). . Appellee points out that the record does not contain a contemporary drawing of the “DB” gun under consideration. We have found it unnecessary to rule on the deficiencies alleged to exist in appellant’s evidence concerning the structure of that gun. . Attributed to The Webster Encyclopedia Dictionary of the English Language (1963).

f2d_474/html/0689-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Stephan KASOURIS, Sandra Lee Serifovski, a/k/a Sandra Lee McLamb, Defendants-Appellants. No. 71-3569. United States Court of Appeals, Fifth Circuit. March 7, 1973. Raymond E. LaPorte, Tampa, Fla., for Kasouris. Thomas D. Casper, Tampa, Fla. (Court-appointed), for Serifovski. John L. Briggs, U. S. Atty., Jacksonville, Fla., Bernard H. Dempsey, Jr., Claude H. Tison, Jr., Asst. U. S. Attys., Tampa, Fla., for plaintiff-appellee. Before JOHN R. BROWN, Chief Judge, and TUTTLE and INGRAHAM, Circuit Judges. INGRAHAM, Circuit Judge: Appellants Stephan Kasouris and Sandra Lee MeLamb (now Serifovski) were indicted for conspiring to conceal material facts in an effort to defraud the Immigration and Naturalization Service of the United States. They were convicted for arranging a fraudulent marriage between Sandra and Kadri Serifovski for the purpose of qualifying Kadri, an alien, for the status of permanent resident. In pursuit of this scheme they conspired to execute change of status forms at the Immigration Office without disclosing the understanding that the marital partners would not live together as man and wife. The trial tactics of the prosecutor, as evidenced by the record, indicate a disregard for the fundamentals of due process. Accordingly, the convictions must be reversed. Kadri Kani Serifovski, a citizen of the Macedonian Province of Yugoslavia, entered the United States on December 28, 1968, under a Class B-2 visa which entitled him to remain for a period of six months. Kadri traveled to the home of his uncle in Clearwater, Florida. He there expressed a desire to seek status as a permanent resident since he had developed an abiding love for this country and feared returning to his communist homeland. Neim Abdullaj, Kadri’s distant relative, questioned Dominic Titone, a local truck driver, about the possibility of finding a suitable marital partner for Kadri. Titone subsequently replied, intimating that he knew of an American citizen who was favorably inclined towards the proposal. Titone added: “It is going to cost us some money.” As a consequence of this conversation Sandra and Kadri were introduced at a restaurant in St. Petersburg. A wedding was arranged and Kadri delivered $1000 to a lawyer, believing that a monetary gift to a bride was customary practice. The lawyer paid Sandra $50 for expenses and held the remaining sum in escrow to be given to Sandra following the marriage ceremony. Sandra was living with co-appellant Kasouris at all times material to this case. Following a brief wedding ceremony, the small group assembled at the home of Kadri’s uncle. After conversing for approximately one-half hour, Sandra and Kasouris departed without a word of explanation to her groom. The newlyweds never lived together nor has the marriage ever been consummated. Kadri was contacted by Immigration officials and was asked to appear with his wife to execute an application for reclassification of status. Kadri contacted Kasouris, who informed him that Sandra was in California and would need $340 for air fare to return. In fact, Sandra had not been in California but was living with Kasouris in St. Peters-burg Beach. Unaware of the deception, Kadri raised and delivered $300 to the lawyer’s office where it was eventually picked up by Kasouris. Kasouris secured the additional $40 from Neim Ab-dullaj. Thereafter, Sandra appeared at the Immigration Office and filed the requisite forms which were subsequently approved. During the course of the trial the prosecutor had assured the court and defense counsel that all Jencks Act statements of government witnesses would be tendered to the court. When asked if there was a Jencks Act statement regarding the witness Amza Abdullaj, the prosecutor replied that there was none, predicating his belief on the unsupported assumption that the document in his possession had not been signed nor adopted. The defense later renewed the request for production of the statement. At this time, the prosecutor reexamined his files and found the statement had indeed been signed. Once the document had been delivered and was found by the court to be a Jencks statement, defense counsel moved for a mistrial. The judge denied the motion but did strike the testimony of the subject witness. Under the facts of this case, we feel that the interests of justice required the declaration of a mistrial. The following quote from the Supreme Court’s decision in Palermo v. United States, 360 U.S. 343, 354, 79 S.Ct. 1217, 1225, 3 L.Ed.2d 1287 (1959), evidences the affirmative duty on the part of the prosecutor to deliver up statements which the prosecutor doubts are within the coverage of the Jencks Act: “3. The statute itself provides no procedure for making a determination whether a particular statement comes within the terms of (e) and thus may be produced if related to the subject matter of the witness’ testimony. Ordinarily the defense demand will be only for those statements which satisfy the statutory limitations. Thus the Government will not produce documents clearly beyond the reach of the statute for to do so would not be responsive to the order of the court. However, when it is doubtful whether the production of a particular statement is compelled by the statute, we approve the practice of having the Government submit the statement to the trial judge for an in camera determination. Indeed, any other procedure would be destructive of the statutory purpose.” In the present case the government urges that nonproduction was due solely to the mere inadvertence of the prosecutor in failing to examine the document. Having been put on notice of the possibility that the statement fell within the Act, the prosecutor should have immediately tendered the document to the court for judicial scrutiny rather than adamantly denying the existence of a statement within the coverage of the Act. Failing to do so, the prosecutor had led us to believe that what may once have been characterized as mere inadvertence had over a period of two days of repeated demands and assurances turned toward deliberate suppression. The statute does not vest in the government the unilateral power to determine without judicial supervision the question of whether or not the statement falls within the purview of the statute. When a controverted question of that kind arises, it is for judicial determination with the judge acting as arbiter. Bary v. United States, 292 F.2d 53 (10th Cir., 1961). Upon proper demand the issue of a statement’s susceptibility to production is controverted. Paragraph (d) of 18 U.S.C. § 3500, provides as follows: “If the United States elects not to comply with an order of the court to deliver to the defendant any such statement, or such portion thereof as the court may direct, the court shall strike from the record the testimony of the witness, and the trial shall proceed unless the court in its discretion shall determine that the interests of justice require that a mistrial be declared.” The prosecutor’s failure to deliver the document when first requested is deemed to be an implied election not to produce. While the trial court in the exercise of its discretion felt that a motion to strike the testimony of the witness was the appropriate remedy, we feel that the court should have gone one step farther and declared a mistrial. The appropriate relief for a violation of the discovery rules lies within the discretion of the district court, yet the error may be so prejudicial to the substantial rights of the defendant as to necessitate a reversal. United States v. Saitta, 443 F.2d 830 (5th Cir., 1971), cert. denied, 404 U.S. 938, 92 S.Ct. 269, 30 L.Ed.2d 250 (1971). Here the denial of an opportunity to impeach the highly damaging testimony of a government witness caused by the breach of the prosecutor’s duty to tender the statement to the court necessitates a reversal of Kasouris’s conviction. Not content with proving the substantive elements of the offenses charged in the indictments, the prosecutor decided to bolster his case by eliciting testimony with regard to other acts of misconduct allegedly committed by both appellants. The overly broad application of the Similar Acts Doctrine employed in the trial court requires that both convictions be reversed and remanded. The court allowed the prosecutor to examine witnesses with regard to Sandra’s purchase of traveler’s checks with the money she had received from Kadri. The prosecutor sought to show that Sandra had applied for a refund on the checks, fraudulently claiming that she had lost them. The prosecutor also sought to prove that both Sandra and Kasouris were engaged in a joint effort to extort money from a man in California under threat of releasing embarrassing photographs of the victim. The judge ruled that evidence of the alleged acts was admissible under the Similar Acts Doctrine in order to establish the requisite intent to defraud the United States and negate the appellant’s allegation of innocence. As a general rule the admission of a defendant’s prior acts of misconduct or illegal activities, for which he is not on trial, is not permitted. A well settled exception to the rule exists where prior similar acts are introduced to establish the requisite knowledge or intent to commit the act for which he is being tried. United States v. Alston, 460 F.2d 48 (5th Cir., 1972). The exception contemplates that the prior acts would in fact be similar. Similarity, being a matter of relevancy, is judged by the degree in which the prior act approaches near identity with the elements of the offense charge. There is no necessity for synonymity but there must be substantial relevancy for purposes other than to show the probability that the person committed the offense being tried because he is a man of criminal character. United States v. Johnson, 453 F.2d 1195 (5th Cir., 1972). To hold otherwise would allow the exception to engulf the rule. In the present case, we need not decide the questionable admissibility of the testimony about the traveler’s cheeks since the admission of evidence regarding the alleged extortion attempt was an abuse of discretion. The connection between the crime charged and the alleged extortion is tenuous at best. The prejudicial effect of this testimony far outweighed any proper benefit to the prosecution. The judgment of the district court is reversed and the case remanded for further proceedings not inconsistent with this opinion. Reversed and remanded. . The Jencks Act, 18 U.S.O. § 3500(e) defines a statement as follows : “The term ‘statement’, as used in subsections (b), (c), and (d), of this section in relation to any witness called by the United States, means— “(1) a written statement made by said witness and signed or otherwise adopted or approved by him; or “(2) a stenographic, mechanical, electrical, or other recording, or a transcription thereof, which is a substantially verbatim recital of an oral statement made by said witness to an agent of the Government and recorded contemporaneously with the making of such oral statement.” . Our holding today is consistent with the Federal Rules of Evidence: Rule 403. EXCLUSION OF RELEVANT EVIDENCE ON GROUNDS OF PREJUDICE, CONFUSION, OR WASTE OF TIME 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. Rule 404. CHARACTER EVIDENCE NOT ADMISSIBLE TO PROVE CONDUCT; EXCEPTIONS; OTHER CRIMES H: * * * * (b) Other crimes, wrongs, or acts. 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. This subdivision does not exclude the evidence when offered for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.

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Osborn OLDEN, Petitioner-Appellant, v. Louis S. NELSON, Respondent-Appellee. No. 72-1970. United States Court of Appeals, Ninth Circuit. Feb. 5, 1973. Osborn Olden, Samuel M. Haskins, San Francisco, Cal., for petitioner-appellant. Evelle J. Younger, Atty. Gen., Edward A. Hinz, Jr., Chief Asst. Atty. Gen., Doris H. Maier, Asst. Atty. Gen., Gloria F. Dehart and Timothy A. Reardon, Deputy Attys. Gen., San Francisco, Cal., for respondent-appellee. Before BROWNING, ELY and WALLACE, Circuit Judges. PER CURIAM: Olden, a state prisoner, appeals from the denial of a petition for habeas corpus pursuant to 28 U.S.C. § 2254. We affirm. First, he contends that his mother’s house, in which he lived, was searched without consent. The record amply supports the finding of consent made by the district court. The record would also sustain a finding that the search was incident to and contemporaneous with a valid arrest. Next, Olden contends that statements made by him following his arrest and admitted at trial, were obtained in violation of the rules established in Escobedo v. Illinois, 378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977 (1964) and Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). Neither case would assist Olden as they were decided subsequent to his trial and have no retroactive effect. Johnson v. New Jersey, 384 U.S. 719, 86 S.Ct. 1772, 16 L.Ed.2d 882 (1966). Further, even if either rule applied to this case, the error would be clearly harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967).

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UNITED STATES of America ex rel. Fleming WOODARD, Appellee, v. STATE OF NEW JERSEY and Howard Yeager, the Principal Keeper of the State Prison at Trenton, New Jersey State of New Jersey, Appellant. No. 71-1147. United States Court of Appeals, Third Circuit. Argued Jan. 4, 1972. Decided April 6, 1972. Certiorari Denied Oct. 10, 1972. See 93 S.Ct. 121. David S. Baime, Asst. Prosecutor, Newark, N. J., for appellant. Susan T. Sinis, Asst. Deputy Public Defender, Newark, N. J., for appellee. Before HASTIE and MAX ROSENN, Circuit Judges, and McCUNE, District Judge. OPINION OF THE COURT PER CURIAM: This is an appeal by the State of New Jersey from an order of the District Court for the District of New Jersey granting a writ of habeas corpus to Fleming Woodard, a state prisoner who is confined pursuant to a conviction of armed robbery. An in court identification of the accused by Mrs. Almodovar, the victim of the robbery, was a major part of the prosecution’s case against Woodard. The evidence showed that after Woodard had been arrested, he was paraded in handcuffs outside Mrs. Almodovar’s window for her observation and identification. Woodard did not have counsel at the time of this viewing. At the trial, which occurred after the decisions in United States v. Wade, 1967, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 and Gilbert v. California, 1967, 388 U.S. 263, 87 S.Ct. 1951, 18 L.Ed.2d 1178, Mrs. Al-modovar admitted on cross-examination that her in court identification was based in part upon her recollection of the hold-up and in part upon “seeing him for a much longer period of time the next day when he was paraded in front of . . . [her] building.” In the light of this admission the district court properly concluded that the in court identification was not independent of the uncounseled exhibition of the accused and, therefore, that under the rule of Wade and Gilbert the conviction to which that identification led could not stand. This reasoning is elaborated in the opinion of the district court and to us it is persuasive. The district court also discussed the possibility that in court identification by Skopaz, a second eyewitness, may also have been influenced by the uncoun-seled exhibition of the accused. However, the district court did not decide this question, and neither do we. Accordingly, the parties will be free to raise and explore this issue before or during a new trial, if the state shall undertake to try the accused again. The judgment will be affirmed.

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Mrs. Geraldine STEWART et al., Plaintiffs, Mary K. McKague et al., Plaintiffs-Appellees-Cross-Appellants, v. ATLANTIC PIPE LINE COMPANY et al., Defendants-Appellants-Cross-Appellants, v. TEXAS GENERAL INDEMNITY COMPANY, Intervenor-Appellee. No. 72-1543. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Dale Dowell, Beaumont, Tex., for Atlantic Pipe Line Co. and others. Walter Umphrey, Port Arthur, Tex., for Mary K. McKague and others. John G. Tucker, Beaumont, Tex., for Texas General Indemnity Co. H. P. Wright, Port Neehes, Tex., for Geraldine Stewart and others. Before TUTTLE, WISDOM and GODBOLD, Circuit Judges. ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC PER CURIAM: In this petition for rehearing Atlantic Pipe Line asserts that the total damages awarded by the jury to Mrs. McKague and her four minor children included an award for exemplary damages and that this was improper inasmuch as Atlantic Pipe Line was not sued for exemplary damages. It is, of course, quite clear that the McKagues are not entitled to recover exemplary damages from Atlantic Pipe Line, but it is equally clear that they do not here claim such damages nor does our original decision in this case require the award of such damages. The McKagues appealed from the final judgment of the district court, filed October 25, 1971, awarding to Mrs. Mc-Kague the sum of $100,000 and to each minor child $20,000. This reflected a reduction by the trial court of $30,000 from the verdict in favor of each child. The judgment, however, reflected only actual damages and the sole issue on appeal was whether the district court could unilaterally reduce by $30,000 the amount in actual damages which the jury found would properly compensate each minor child. We held that such a reduction was improper and on that basis remanded to the district court. Obviously, then, there exists in this case no issue with respect to exemplary damages, none ever having been awarded by the district court and there being no error assigned by the McKagues on that account. Accordingly, the petition for rehearing is denied and no member of this court in active service on the court having requested that the court be polled on rehearing en banc, (Rule 35, Federal Rules of Appellate Procedure, Local Fifth Circuit Rule 12) the Petition for Rehearing En Banc is denied.

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SOUTHERN PACIFIC TRANSPORTATION COMPANY, Appellee, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS et al., Appellants. SOUTHERN PACIFIC TRANSPORTATION COMPANY, Appellee, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS et al., Appellants. Nos. 26696, 71-1390. United States Court of Appeals, Ninth Circuit. Jan. 23, 1973. Rehearing Denied Feb. 12, 1973. Certiorari Dismissed April 5, 1973. See 93 S.Ct. 1561. Harold A. Ross (argued), of Ross, Kraushaar & Bennett, Cleveland, Ohio, Victor A. Bertolani, of Bertolani & Smo-lich, Sacramento, Cal., for appellants. William R. Denton (argued), W. A. Gregory, John J. Corrigan, San Francisco, Cal., John V. Diepenbrock, Forrest A. Plant, of Diepenbrock, Wulff, Plant & Hannegan, Sacramento, Cal., for ap-pellee. Before ELY, CHOY, and GOODWIN, Circuit Judges. PER CURIAM: The International Brotherhood of Electrical Workers appeals from a preliminary injunction against a work stoppage in a dispute with Southern Pacific Transportation Company concerning work assignments. The identical legal questions now before this court were recently presented and decided in International Brotherhood of Electrical Workers v. Washington Terminal Company, 473 F.2d 1156 (D.C. Cir., 1972). A comprehensive opinion authored by Judge MacKinnon traces the legislative and judicial history of the controlling legislation, and resolves, for the purposes of this dispute, the legal questions presented here. We agree with the conclusion of the District of Columbia Circuit that the work-assignment dispute involved in these cases is a “minor dispute” within the meaning of the Railway Labor Act, 45 U.S.C. § 153 (1970), and, accordingly, that its proper resolution is for the National Railroad Adjustment Board. Affirmed.

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Frank J. PARKER, Plaintiff-Appellant, v. UNITED STATES of America, Respondent-Appellee. No. 72-2327. United States Court of Appeals, Ninth Circuit. March 2, 1973. Frank J. Parker in pro. per. Joseph L. Ward, U. S. Atty., Daniel L. Ahlstrom, Asst. U. S. Atty., Las Vegas, Nev., for respondent-appellee. Before TRASK, CHOY and GOODWIN, Circuit Judges. PER CURIAM: Parker appeals the district court’s denial of his petition for post-conviction relief under 28 U.S.C. § 2255. We affirm. Appellant was indicted on three counts of sale of heroin and one count of facilitation of transportation and concealment of heroin. After the first day of deliberation on its verdict, the jury was allowed to go home and, in preparing to do so, handed the exhibits to the clerk. By inadvertence, amid the exhibits was interlaid the jury’s partially-completed verdict form indicating that appellant had been found guilty as to Counts 1 and 2. The foreman had not signed or dated the verdict. The trial judge called the attention of the parties’ attorneys to the problem. The attorneys agreed to a dismissal of the third and fourth counts, the summoning and polling of the jury as to counts 1 and 2, and the signing and dating of the verdict. All of this was done, each juror affirming his finding of guilt on the first two counts. In support of his petition, appellant charges inadequate representation by his trial counsel and prejudicial error in the handling of the uncompleted verdict. The trial record covering four court days shows that defense counsel provided more than adequate representation to appellant in the face of overwhelming government evidence. Such representation can hardly be characterized a “farce or a mockery,” the standard applicable. Pinedo v. United States, 347 F.2d 142 (9th Cir. 1965). The slight irregularity in the handling of the verdict form resulted in benefit rather than prejudice to appellant; the government dismissed two of the counts charged. Further, the jury was polled and confirmed the unanimous finding of appellant’s guilt on the other two counts. The district court’s rejection of appellant’s contentions without hearing is affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Paul John CARBO, Defendant-Appellant. No. 72-2399. United States Court of Appeals, Ninth Circuit. Feb. 23, 1973. John Paul Carbo, in pro. per. William D. Keller, U. S. Atty., Lawrence W. Campbell, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-appellee. Before HAMLIN and DUNIWAY, Circuit Judges, and WEIGEL, District Judge. Honorable Stanley. A. Weigel, United States sitting by designation. District Judge, Northern District of California, PER CURIAM: Carbo appeals from an order denying his motion under Rule 35, F.R.Crim.P. to correct and reduce sentence, verse. We re- On December 2, 1961, Carbo was sentenced to twenty-five years in prison. Notice of appeal was filed, and Carbo elected under Rule 38(a)(2) not to begin to serve his sentence. On May 16, 1962, he elected to begin serving the sentence. Carbo now seeks credit for the period between December 2, 1961, and May 16, 1962, that he spent in custody. The district court denied Carbo’s motion on jurisdictional grounds. The court held that a motion under Rule 35 is not the proper remedy. The court pointed out that there has been no showing that the sentence imposed is illegal. The petitioner is therefore limited to a motion to reduce sentence; however, that motion must be brought within 120 days of the finality of the judgment, and this time had elapsed. The court went on to state that if the motion were to be considered as a petition either for a writ of habeas corpus or for a writ of mandamus, it must be brought in the district where the petitioner resides (the district serving Marrion, Illinois). The court consequently held that it lacked jurisdiction to entertain the motion. We do not disagree with the district court’s holding that in this case a motion under Rule 35 is not available, or that habeas corpus may be an appropriate remedy. See Aldridge v. United States, 9 Cir. 1969, 405 F.2d 831. See also Comulada v. Pickett, 7 Cir., 1972, 455 F.2d 230. If Carbo were limited to habeas corpus, the district court would lack jurisdiction. However, there remains the question whether 28 U.S.C. § 2255 is available, and whether Carbo’s motion under Rule 35 may be considered as an application for relief under § 2255. In similar situations, this court has treated § 2255 as an available remedy. Myers v. United States, 9 Cir., 1971, 446 F.2d 232; Williams v. United States, 9 Cir., 1971, 440 F.2d 684. So have other circuits. Davis v. United States, 7 Cir., 1971, 446 F.2d 847; Bujese v. United States, 3 Cir., 1968, 404 F.2d 615. We accordingly hold that the district court should have treated the motion as an application for relief under § 2255, and therefore retained jurisdiction and decided the merits. Reversed and remanded.

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UNITED STATES of America, Appellee, v. Fairh RIGGS, Appellant. No. 513, Docket 72-2181. United States Court of Appeals, Second Circuit. Argued Jan. 18, 1973. Decided Feb. 15, 1973. Martin D. Dehler, Asst. U. S. Atty. (Robert A. Morse, U. S. Atty., E.D.N.Y., and Raymond J. Dearie, Asst. U. S. Atty., of counsel), for appellee. Henry B. Rothblatt, New York City (Rothblatt, Rothblatt, Seijas & Peskin, New York City, of counsel), for appellant. Before FRIENDLY, Chief Judge, and OAKES and TIMBERS, Circuit Judges. FRIENDLY, Chief Judge: The sole question on this appeal from a conviction, in the District Court for the Eastern District of New York, for possessing two kilograms of narcotics with intent to distribute, in violation of 21 U.S.C. § 841(a)(1), is the legality of the acts of law enforcement officers that led to the discovery of the narcotics. These included stopping the appellant, Fairh Riggs, at LaGuardia Airport and asking for identification, a consequent “plain view” of a plastic bag containing white powder in her purse and, finally, a search of her camera ease which disclosed the two kilograms of heroin. Although the incident arose in the context of a purported anti-hijacking investigation, we sustain the acts of the law enforcement officers on the basis that they had sufficient reason for suspecting Miss Riggs of a narcotics violation to authorize what was done. On the basis of the testimony permissibly credited by the trial judge in his reported opinion denying appellant’s motion to suppress after an extensive hearing, United States v. Riggs, 347 F.Supp. 1098 (E.D.N.Y.1972), the facts were as follows: The events, all occurring on Sunday, September 26, 1971, began with the arrival of Miss Riggs, a young black female wearing a brilliant orange coat and carrying no luggage, at the Detroit Municipal Airport at about 8:45 A.M. She was accompanied by two males. At the American Airlines counter she bought three one-way tickets to New York and paid for them with cash which she produced from a brown paper bag. Her ticket was purchased in the name of “P. Griggs.” Since she met the “profile,” see United States v. Bell, 464 F.2d 667 (2 Cir. 1972), then being used by American Airlines, the clerk at the counter summoned a supervisor. By the time the supervisor arrived, one of the males had boarded; the other was still near the counter but he and Miss Riggs acted as if they did not know each other. Both passengers were stopped before boarding the flight and were asked for identification. At first both denied having any, but later appellant produced some identification, perhaps a driver’s license, in the name of “Fairh Riggs.” The supervisor inquired what was in the brown paper bag; Riggs answered it was her lunch. He asked to check the bag, Riggs opened it, and he saw it was filled with “stacks of money.” The supervisor permitted her to board; the male passenger was also allowed to do so, after a frisk. Appellant’s counsel conceded at argument that none of these happenings at Detroit violated appellant’s Fourth Amendment rights. Rendered suspicious by all of the above, the airline supervisor related the facts to Detective Schmidt of the Michigan State Police, who was headquartered at the airport. Detective Schmidt testified that the large amount of cash Miss Riggs was carrying, and the unusual way in which she was carrying it, led him immediately to suspect that she was engaged in narcotics traffic. A check revealed that while the state police had no record for “P. Griggs”, they did have one for Cynthia Joyce Griggs, also known as Betty Jackson, a young black female who had been arrested in 1966 on a narcotics charge but whose case had been dismissed after the main prosecution witness was murdered. The Detroit Police Department reported that Cynthia Joyce Griggs had been recently arrested with nine other persons on a narcotics charge as a result of a search of her apartment which also turned up three handguns and a shotgun, and that she was currently on bail. The Detroit office of the Federal Bureau of Narcotics and Dangerous Drugs confirmed that Cynthia Griggs was known to them as a narcotics dealer. Believing, not unreasonably, that the “P. Griggs” ticketed on the flight might in fact be Cynthia Joyce Griggs, Detective Schmidt passed on to Detective Stone of the Port of New York Authority Police at LaGuardia Airport all the information that had been collected. Plainclothesmen dispatched to meet the flight from Detroit reported that the woman had left in one taxi and the two men in another. Detective Stone then notified each of the airlines and the United States Marshal’s anti-hijacking detail at LaGuardia of all the above and of the likelihood that the three might be returning after having made a buy of narcotics; he added, apparently only on the strength of the Detroit Police report, that they might be carrying weapons. About 1:40 P.M. an American Airlines supervisor at LaGuardia telephoned Detective Stone that a woman fitting the description of P. Griggs had purchased with cash a one-way ticket for a 1:55 flight to Detroit and was in the lobby at Gate 9. Stone instructed the supervisor to call the United States marshals while he and his partner proceeded to the Gate. The supervisor called Deputy Marshal Huttick, who had been informed of the facts earlier related by Detective Stone; he told Huttick that a woman matching Griggs’ description was in the lobby at Gate 9 awaiting a return flight to Detroit, mentioned that on this occasion the ticket had been bought in the name of “Fairh Riggs,” and added that she met the “profile.” Huttick and his partner O’Flaherty immediately went to Gate 9. Riggs had already entered the jetway, but they stopped her before she boarded the plane. They showed their credentials and said they were making a security cheek. O’Flaherty asked to see the plane ticket, found it was indeed in the name of “F. Riggs,” and asked for some verification. Placing on the floor in front of her a leather camera case which had previously been strapped over her shoulders, appellant opened her purse and produced a utility bill bearing the name “Farah Jackson.” O’Flaherty asked for better identification. Appellant again opened her purse, wider this time; both marshals saw on the top a clear plastic bag containing white powder. Riggs fumbled with her purse for a. few seconds and pulled out a letter from the utility company also addressed to “Farah Jackson.” O’Flaherty then flipped open the top of the camera case, saw two plastic bags filled with white powder, and money stuck underneath the bags and on the sides. Miss Riggs, her pocketbook and camera bag were taken to the marshal’s office, where field tests confirmed that the bags contained 1.9 kilograms of 75% pure heroin. Riggs was then formally placed under arrest. Appellant argues that because the American Airlines “profile” did not quite conform to the Federal Aviation Administration profile discussed in United States v. Lopez, 328 F.Supp. 1077 (E.D.N.Y.1971) and United States v. Bell, supra,, 464 F.2d 667, and because the marshals did not in good faith believe that Riggs constituted a threat to the security of the airplane, there was no justification for anti-hijacking measures. We need not pass upon these arguments, nor on the question, raised in United States v. Meulener, 351 F.Supp. 1284 (C.D.Cal.1972), how clearly the subject of an anti-hijacking search must be warned that he can avoid the search by declining to board the airplane. See also United States v. Bell, supra, 464 F.2d at 675 (Friendly, C. J., concurring). For we hold that the Deputy Marshals’ request for identification as appellant attempted to board her return flight was justified, under Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968), and Adams v. Williams, 407 U.S. 143, 92 S.Ct. 1921, 32 L.Ed.2d 612 (1972), by their reasonable suspicion that Riggs was in fact Cynthia Joyce Griggs and had made a purchase of narcotics which she was about to transport to Detroit with a view to distribution, and that their search of her camera case was justified both by the probable cause which they then possessed to arrest her for that crime and by their reasonable suspicion that she might be armed. A number of “specific and articulable facts,” Terry v. Ohio, supra, 392 U.S. at 21, 88 S.Ct. 1868, 20 L.Ed.2d 889 provided an adequate basis for the marshals’ reasonable suspicion to justify the minimal intrusion upon appellant’s privacy represented by a request for identification. We start with her purchase of airplane tickets, with cash taken not from a purse but a brown paper bag, and the efforts of appellant and her two companions to avoid any appearance of recognition. Compare United States v. Canieso, 470 F.2d 1224, 1226, 1230 (2 Cir. 1972). We add her carrying “stacks of money,” doing this in a brown paper bag, and lying about the bag’s contents to the Detroit airline supervisor. This was enough to create the suspicion that appellant was going to New York on no ordinary errand but on one for which large sums of cash on the barrelhead would be needed — something characteristic of narcotics purchases, as the Michigan state police detective knew from his experience in similar situations. These suspicions were confirmed when Riggs returned to LaGuardia Airport — only two hours after arrival — with the brown paper bag now accompanied or supplanted by a camera case — and bought a ticket back to Detroit. Arguably this alone would have sufficed to justify a demand for identification under Adams v. Williams, supra, 407 U.S. at 145-146, 92 S.Ct. 1921, 32 L.Ed.2d 612, but we need not so decide. Appellant’s eastbound ticket had been in the name of “P. Griggs.” The police could reasonably have been suspicious under the circumstances that this was another alias designed to conceal that appellant was really Cynthia Joyce Griggs, with her record of arrests for narcotics offenses and reputation as a narcotics dealer. Appellant’s purchase of her return ticket in the name “F. Riggs” only added to the cohfusion surrounding her real identity. And when, in response to the marshal’s initial inquiry, she presented identification in the form of a utility bill addressed to “Far-ah Jackson,” a name not tallying either with that on her incoming or her outgoing ticket, this increased the confusion and heightened the suspicion that she might be Cynthia Joyce Griggs, since Michigan State Police records had revealed that the latter also used the alias Jackson. Deputy Marshal O’Flaherty was thus quite justified in demanding further identification — a demand that led to the opening of the purse and the “plain view” of the bag of clear white powder. Adams v. Williams, supra, 407 U.S. at 146, 92 S.Ct. 1921, 32 L.Ed.2d 612. At this time the Deputy Marshals had probable cause to arrest appellant for a narcotics offense. If they had done so, a search of the camera case would have been justified under the “grabbing-distance” principle of Chimel v. California, 395 U.S. 752, 763, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969). However, Riggs was not formally placed under arrest until after tests confirmed that the white powder was heroin, and the Government does not contend that Riggs was arrested de facto prior to the search of the camera case, although we suspect that her chances of being released without being arrested were exceedingly poor. In United States v. Gorman, 355 F.2d 151, 159-160 (2 Cir. 1965), cert. denied, 384 U.S. 1024, 86 S.Ct. 1962, 16 L.Ed.2d 1027 (1966), we left open the question whether an incidental search which would have been justifiable after an arrest is equally so when there was probable cause for arrest but arrest was postponed; we indicated that, absent controlling contrary authority, of which there then was none, we would follow Mr. Justice Traynor in People v. Simon, 45 Cal.2d 645, 648, 290 P.2d 531, 533 (1955), and uphold such a search. The justification for such an intrusion is the probable cause to believe that the individual has committed a crime and the need for immediate action to prevent the use of weapons against the arresting officer or destruction of evidence of the crime, see Chimel v. California, supra, 395 U.S. at 763, 89 S.Ct. 2034, 23 L.Ed. 2d 685; postponement of the further intrusion of arrest does not remove the justification for the search and in no way prejudices the individual’s Fourth Amendment rights. Subsequent authorities have now established that view as firmly as anything short of a Supreme Court decision can. See Bailey v. United States, 128 U.S.App.D.C. 354, 389 F.2d 305, 308 (1967) (Wright, J.) (dictum); id. at 316 (Leventhal, J., concurring); Henderson v. United States, 405 F.2d 874, 875 (5 Cir. 1968), cert. denied, 395 U.S. 906, 89 S.Ct. 1747, 23 L.Ed.2d 219 (1969); United States v. Skinner, 412 F.2d 98, 103 (8 Cir.), cert. denied, 396 U.S. 967, 90 S.Ct. 448, 24 L.Ed.2d 433 (1969); United States v. Thomas, 432 F.2d 120, 122 (9 Cir. 1970), cert. denied, 400 U.S. 1022, 91 S.Ct. 587, 27 L.Ed.2d 634 (1971); United States v. Brown, 463 F.2d 949, 950 (D.C. Cir. 1972); United States ex rel. Farrugia v. Bhono, 256 F.Supp. 391 (S.D.N.Y.1966) (Weinfeld, J.). We therefore hold that the marshal’s search of the camera case was a valid search based, on probable cause for appellant’s arrest and the fruits of the search were fully admissible against her. Beyond that, there is another basis for upholding the marshal’s cursory examination of the camera case. The plain view of the plastic bag containing white powder, along with the other circumstances we have noted, justified the marshals in detaining appellant for the short interval needed to subject the powder to chemical analysis. Terry held that “When an officer is justified in believing that the individual whose suspicious behavior he is investigating at close range is armed and presently dangerous to the officer or to others,” he may conduct a limited protective search for concealed weapons, 392 U.S. at 24, 88 S.Ct. 1868, 1881, 20 L.Ed.2d 889, and the Court reaffirmed this in Adams v. Williams, supra, 407 U.S. at 146, 92 S.Ct. 1921, 32 L.Ed.2d 612. Here the camera case was on the floor directly in front of appellant; it was unlocked; the top needed only to be “flipped” open to get inside it. If the camera case had in fact contained a weapon, Riggs could have easily and quickly grabbed it. Moreover, the marshal’s initial search was carefully limited to the quick inspection of the camera case necessary to determine if it contained a weapon. It may be true, as the district court noted, D.C., 347 F.Supp. at 1103, that “the belief that this defendant might be carrying a weapon rested upon fragile grounds,” but courts should not set the test of sufficient suspicion that the individual is “armed and presently dangerous” too high when protection of the investigating officer is at stake. Although the deputy marshals had not received such a specific warning about the present possession of weapons as that in Adams v. Williams, the report of Detective Stone did give reason for fear that Riggs might be carrying a weapon, and their own investigation, during which they had observed her to be carrying what they reasonably and correctly believed to be heroin, and during which she had identified herself with the name “Jackson,” tended to corroborate their suspicions that appellant might in fact be the Cynthia Joyce Griggs who was considered dangerous by the Michigan and Detroit police. Finally, that the marshals were in fact genuinely concerned by the possibility that Riggs was armed is confirmed by their actions immediately following the quick check of the camera case; since regulations prohibited them from frisking a female, they walked her through a magnetometer to determine if she were carrying a concealed weapon. Affirmed. . The camera bag was later found by the marshals to contain $4800 in cash. . Appellant does not contend that the marshals lacked authority to make an investigatory stop apart from their powers under the anti-hijacking program. There would be no merit in such a contention. 18 U.S.C. § 3053 provides that “United States marshals and their deputies . . . may make arrests without warrant for any offense against the United States committed in their presence, or for any felony cognizable under the laws of the United States . . . .” Although this statute does not. in terms give marshals authority to make investigatory stops, we think that the power to take reasonable law enforcement steps short of, but which may well lead to an arrest can be fairly implied from the grant of powers of arrest. Cf. United States v. Krapf, 285 F.2d 647, 650 (3 Cir. 1960). It should be noted that although many states have enacted specific grants of stop and frisk jiowers since the Supreme Court’s decision in Terry v. Ohio, supra, the majority of states still do not provide explicit statutory authorization for, the stop and frisk, considering these powers to derive from the police’s general law enforcement authority. See ALI, A Model Code of Pre-Arraignment Procedure 105-06 (Official Draft No. 1, 1972). It is true that 28 U.S.C. § 570 provides that “A United States marshal and his deputies, in executing the laws of the United States within a State, may exercise the same powers which a sheriff of the State may exercise in executing the laws thereof,” and that the New York stop and frisk law, N.Y.Crim.Proc. Law § 140.50 (McKinney 1971), does not include “sheriffs” within New York City within its grant of authority, see id. § 1.20(33), (34). But § 570 should not be construed as a limitation on the powers otherwise possessed by federal marshals, see United States v. Krapf, supra, 285 F.2d at 650, particularly in this case sincé § 3053 is a later statute which was intended to provide congressional authorization for the powers of United States marshals independent of the vagaries of state laws. See H.R.Rep. No. 283, 74th Cong., 1st Sess. 2 (1935). Moreover, § 570 is derived from the Act of February 28, 1795, ch. 36, § 9, 1 Stat. 425, passed at a time when the word “sheriff” referred to the general law enforcement authority of the state. It seems likely that the meaning of “sheriff” in § 570 is properly to be supplied by reference to this congressional understanding rather than by state law; Congress could not have intended that the drastic narrowing of the traditional role of the sheriff, at least in New York City, as his functions were assumed by police officers, should correspondingly reduce the powers of federal marshals.

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2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Sidney ROSENSTEIN et al., Defendants-Appellants. Nos. 111, 112, Dockets 72-1092, 72-1190. United States Court of Appeals, Second Circuit. Argued Nov. 14, 1972. Decided Jan. 26, 1973. James M. LaRossa, New York City (Gerald L. Shargel and Ronald P. Fis-chetti, New York City, on the brief), for defendants-appellants, Sidney Rosenstein and Mclnerney Sales, Inc. Norman S. Ostrow, New York City (Royall, Koegel & Wells, James B. Weid-ner and James M. Ringer, New York City, of counsel), for defendants-appellants, Irving Braverman and Foremost Brands, Inc. Gary P. Naftalis, Asst. U. S. Atty., New York City (Whitney North Seymour, Jr., U. S. Atty., S.D.N.Y. and Gerald A. Feffer and John W. Nields, Jr., Asst. U. S. Attys., New York City, of counsel), for plaintiff-appellee. Before SMITH, KAUFMAN and MULLIGAN, Circuit Judges. MULLIGAN, Circuit Judge: These are appeals by Sidney Rosen-stein, Irving Braverman, Foremost Brands, Inc. and Mclnerney Sales, Inc. from judgments of conviction entered in the United States District Court for the Southern District of New York on January 11, 1972 after trial before Hon. Thomas F. Croake, United States District Judge, and a jury. Judgments affirmed. The Indictment filed on December 4, 1968 contained 13 counts. Count 1 charged all defendants with conspiracy to defraud the United States of federal income taxes and to commit offenses against the United States in willfully evading income taxes in violation of Title 26, United States Code, Section 7201 and in violation of Title 18, United States Code, Section 2, by aiding and abetting such violations. The balance of the counts were for substantive violations of these sections by the individual and corporate defendants. All were found guilty of the conspiracy counts and the applicable substantive counts. On January 11, 1972, Judge Croake imposed the following sentences: Sidney Rosenstein, 18 months in prison concurrently on each count, a total fine of $100,000 plus one-half the cost of prosecution; Irving Braverman, 18 months in prison concurrently on each count, a total fine of $100,000 plus one-half the cost of prosecution; Mclnerney Sales, Inc. and Foremost Brands, Inc. were each fined a total of $40,000; Rosenstein and Braverman are presently enlarged on bail and payment of fines and costs has been stayed pending appeal. I. THE FACTS The investigation of this complicated case was commenced by Internal Revenue Service in 1964 and did not terminate until late in 1967. It involved interviewing a great number of witnesses in the United States as well as foreign nationals in Switzerland and Liechtenstein. In a trial which lasted six weeks, the Government presented some 75 witnesses and over 1000 documents as exhibits. The defendants did not testify. The Government’s proof established without any doubt that from May, 1960 until 1967 Braverman and Rosenstein and their wholly owned corporations, Foremost and Mclnerney, brazenly and fraudulently evaded United States income taxes by creating a dummy Liechtenstein corporation, called Continental Trade Establishment (CTE), to which they diverted payments of $1.6 million in commissions from October 1, 1961 to January 31, 1965 and which, in turn, were deposited in a secret account at the Bank Leu, Zurich, Switzerland. Braverman and Rosenstein and their corporate alter egos, Foremost and Mc-lnerney, acted as sales representatives for American manufacturers in the sale of their products to United States Military Post Exchanges throughout the world. In return for their services, they received commissions of about 6% on gross sales. In May, 1960, Braverman and Rosenstein created CTE in Liechtenstein and opened an account at the Bank Leu in Zurich. Their American clients were then asked to make all commission cheeks on sales to overseas PX’s payable to CTE and to forward them to Dr. Herbert Batliner, Haupstrasse 22, Vaduz, Liechtenstein, instead of to Foremost or Mclnerney, the previous payees. Sometime in 1966 the instructions were changed and the checks were forwarded to Dr. Alfred Buehler at the same Liechtenstein address. Batliner and Buehler were both Liechtenstein attorneys and Haupstrasse 22 was a two-story building which housed Batliner’s law office and a shoe store. Representatives of 42 American manufacturers testified at trial as to the payment arrangements and the Government produced checks, payable to CTE and deposited in the Swiss Bank, totalling $1,604,409.59 for foreign PX commissions from October 1, 1961 through January 31, 1965. It is not disputed that no United States income taxes have ever been paid by the appellants on these commissions. The evidence of the Government that CTE was utilized as a shell and a device for the appellants and was not in fact a viable operating entity, was overwhelming. A dozen American manufacturers were advised by Rosenstein, Braverman or their employees that CTE was actually their company. All the activities performed by Rosenstein and Braverman prior to May, 1960, continued. The same cast of characters continued to travel to European PX’s, displaying samples and catalogues and arranging appointments between buyers and sellers. PX representatives testified at trial and produced log books from Wies-baden and Nuremberg, Germany, the buying centers for the military establishment where sales representatives were required to check in. This testimony and these documents establish that while Rosenstein and Braverman continued to appear for their American clients, no one ever heard of or met either Batliner or Buehler who apparently never appeared to represent their company. Only one of the 15 PX buyers who testified had even heard of CTE. Even more telling is the testimony of Peter Roussos and Robert Naar, exclusive resident representatives for Foremost in parts of Europe from 1960 to 1964. They testified that only Braver-man and Rosenstein or themselves represented the 42 American manufacturers whose commission checks to CTE constitute the basis for this indictment. Neither was ever employed by CTE and in fact neither had ever heard of CTE. There is no indication that CTE ever performed any services. In fact there is evidence to establish that Braverman and Rosenstein had CTE stationery and cards printed. ,The correspondence and contracts, prepared on these letterheads, were signed by their employees, falsely identifying the employees as CTE officers. Rosenstein also directed that Bat-liner’s signature be forged on these letters. When he learned of this, Batliner resigned as a CTE director to be replaced by Buehler. The evidence of the PX representatives, the American manufacturers and the employees of Foremost and Mclnerney, plus the obvious efforts of Rosenstein and Braverman to create an appearance of activity amply demonstrate the charade. The reading of a voluminous record compels the conclusion that CTE had only one function: it was the receptacle of the income earned by the appellants from their representation of American producers of goods sold to foreign post exchanges. It was created by the defendants in an elaborate but futile effort to avoid American income taxes. The principal argument raised on appeal is that the admission into evidence of the records of CTE, Government Exhibits 1020-23 and 1025-29, constituted reversible error. II. THE LIECHTENSTEIN DOCUMENTS a) The Business Records Exception The exhibits in question were produced toward the close of its case, by a Government witness, Dr. Peter Monauni, one of three Liechtenstein attorneys resident at Haupstrasse 22, Vaduz, Liechtenstein. Dr. Batliner had refused to come to the United States at the time of the trial to testify. Instead he sent Dr. Monauni who had been associated with him for ten years. Dr. Monauni’s direct testimony bolstered the other evidence in the case as to CTE’s true character. He knew it simply as a client of his firm; to his knowledge it conducted no business of any description at the law office headquarters except for the forwarding of mail and checks. Monauni produced a CTE file containing Exhibits 1020-23 and 1025-29. The Government offered the documents under the business records exception to the hearsay rule, 28 U.S.C. § 1732. Essentially the statute provides that any writing or record, made as a memorandum of any act, transaction, occurrence or event, if made in the ordinary course of one’s business and if it was the regular course of such business to make such record at the time or reasonably thereafter, is admissible as evidence of the act, transaction, occurrence or event. We agree with the appellants that the documents were not properly admissible under the statutory business record exception. The fact that Dr. Monauni did not personally keep the books and records would not render them inadmissible (United States v. New York Foreign Trade Zone Operators, Inc., 304 F.2d 792, 796 (2d Cir. 1962)), but someone who is sufficiently familiar with the business practice must testify that these records were made as part of that practice. United States v. Delgado, 459 F.2d 471, 472 n. 5 (2d Cir. 1972); Cullen v. United States, 408 F.2d 1178 (8th Cir. 1969); United States v. Dawson, 400 F.2d 194, 198-199 (2d Cir. 1968), cert. denied, 393 U.S. 1023, 89 S.Ct. 632, 21 L.Ed. 567 (1969). Dr. Monauni’s testimony did not rise to this level of requisite knowledge. He not only did not keep the records, he did not even know from his own personal knowledge that they were kept in Batliner’s office. He did not testify to the business practice of CTE or that it was the practice to keep the documents which were introduced. Some of the Liechtenstein documents were letters from third parties who clearly were not working for CTE. They “were not made in the regular course of the business of the company in whose filéis they were found .” Phillips v. United States, 356 F.2d 297, 307 (9th Cir. 1965), cert. denied, 384 U.S. 952, 86 S.Ct. 1573, 16 L.Ed.2d 548 (1966). The requirements of the Business Records Rule are not fulfilled by a showing that the addressee routinely kept a file of such correspondence. It must appear that the letter was written in the regular course of its author’s business. See Johnson v. Lutz, 253 N.Y. 124, 170 N.E. 517 (1930). While the records were not admissible as business records, we cannot agree with the appellants’ contention that we cannot sustain their admission on the basis of some other exception to the hearsay rule. The rule stated by Wig-more is “[a]n offer of a fact for an inadmissible purpose A is properly excluded, though the same fact would have been admissible for purpose B.” 1 J. Wigmore, Evidence § 17, at 320 (3d ed. 1940) (emphasis in original, footnote omitted). (See People v. Zackowitz, 254 N.Y. 192, 200, 172 N.E. 466 (1930)). The Government now urges that these documents are admissible either as admissions by the defendants or as declarations by conspirators, which like the Business Records Rule are further recognized exceptions to the hearsay rule. Here there is no difference in the purpose for which the evidence is sought to be admitted on the alternative grounds. The purpose of admission under any such exception is to establish the truth of that which is contained in the declaration which otherwise would be hearsay. This distinguishes Shepard v. United States, 290 U.S. 96, 54 S.Ct. 22, 78 L.Ed. 196 (1933) and United States v. DeMasi, 445 F.2d 251 (2d Cir.), cert. denied, 404 U.S. 882, 92 S.Ct. 211, 30 L.Ed.2d 164 (1971), relied upon by appellants. Shepard was a case in which an army officer had been accused of murdering his wife by adding bichloride of mercury to her liquor. There was testimony that the sick wife made the statement “Dr. Shepard has poisoned me.” She also inquired if there was enough of the liquor left to have tests made. These statements were offered as dying declarations, an exception to the hearsay rule. Since there was a lack of evidence that the declarant spoke without hope of recovery, the statements were held by the Supreme Court to be not admissible for their truth as dying declarations. The Government argued alternatively that the statements were admissible for a different purpose, to wit, they were admissible to rebut evidence of defendant’s witnesses that the victim had suicidal tendencies since the statements indicated a will to live. The alternative purpose was clearly untenable since no limiting instructions had been given to alert the jury to the different purpose for which the evidence was offered. Had the conviction been sustained the prejudice to the defendant from the admission of the accusation now urged as simply indicative of a will to live and no more, is obvious. As Mr. Justice Cardozo observed in characteristic language “The reverberating clang of those accusatory words would drown all weaker sounds.” Shepard v. United States, supra, 290 U.S. at 104, 54 S.Ct. at 25. DeMasi is like unto Shepard. There the Government offered certain statements made by a decedent to two witnesses. The statements were offered for their truth as exceptions to the hearsay rule. On appeal this court found that the declarant was not a conspirator and his statements were inadmissible hearsay. The Government’s alternate argument that the statements were admissible for another purpose, was rejected: “The Government’s alternate theory to justify the admissibility of the declaration, that the statement was relevant to prove the victim’s state of mind, was not suggested at trial, and the court did not instruct the jury with reference to it; therefore we will not consider it.” United States v. DeMasi, supra, 445 F.2d at 256 (emphasis added and footnote omitted). The situation we encounter here is clearly distinguishable. The alternative theories proposed are equally exceptions to the hearsay rule. The Government is asserting that the documents are admissible for the same purpose, to establish the truth of what they say. No different or other limiting instruction to a jury was necessary no matter what the theory of admission. The prejudice of the lack of such instruction, so clear in Shepard and De-Masi, is not at all present here. b) Declarations of Co-Conspirators If the documents were admissible as declarations of a conspirator, appellants argue that the trial court would have had to find that the defendant’s participation in the conspiracy had been established by a fair preponderance of the evidence aliunde. United States v. Geaney, 417 F.2d 1116, 1120 (2d Cir. 1969), cert. denied, 397 U.S. 1028, 90 S.Ct. 1276, 25 L.Ed.2d 539 (1970); Levie, Hearsay and Conspiracy: A Reexamination of the Co-conspirators’ Exception to the Hearsay Rule, 52 Mich.L.Rev. 1159, 1176-78 (1954); Developments in the Law — Criminal Conspiracy, 72 Harv.L.Rev. 922, 987 (1959). Since the documents were not offered as declarations of conspirators there was no occasion for Judge Croake to find on the record that each of the defendants was a member of the conspiracy. We believe that the evidence submitted by the Government prior to' the admission of the disputed documents fully supported such a finding. The testimony of the representatives of the 42 American manufacturers clearly established by a fair preponderance of the evidence, the test here applicable, that Braverman and Rosenstein had jointly contacted all of their American clients requesting that commission checks theretofore payable to either Foremost or Mclnerney be made payable to CTE. Moreover, representatives of Ideal Toy, North Shore Sportswear, Genesco, Leeds Travelwear, Burlington Industries, To.bin-Hamilton, National Togs, Blue Bell, Inc., Prince Gardner Wallets, Adler Company, and My Toy Company testified that Rosenstein, Braverman or their employees advised them that CTE was Braverman’s and Rosenstein’s company. The testimony of PX employees that despite the 1960 change to CTE, the same personnel continued to represent Foremost and Mclnerney and that Batliner, Buehler and CTE were unknown to them, was further proof that CTE was a shell devised by the defendants to siphon off commissions. In addition to all of this, some of the documents which will be discussed later in this opinion were admissible in any event as admissions. The fact that some of these exhibits might have been admitted after the co-conspirator documents is not material since it is well established that the determination as to whether the prosecution has laid the foundation for the admission of the co-conspirator’s statements can be made at the close of the Government’s case. United States v. Geaney, supra, 417 F.2d at 1120; United States v. Sansone, 231 F.2d 887 (2d Cir.), cert. denied, 351 U.S. 987, 76 S.Ct. 1055, 100 L.Ed. 1500 (1956). In our view Judge Croake could have properly made the determination that the Government had laid a proper foundation for the admission of these documents as statements of co-conspirators made in furtherance of this continuing scheme to defraud the United States of taxes. The fact is that he made no such ruling and none was requested. We nonetheless hold that this court can made the post hoc determination on appeal. We should emphasize that the function of determining whether or not the proper foundation for the admission of these documents has been made is judicial and that the jury may not properly reassess the propriety of the court’s determination. United States v. Ragland, 375 F.2d 471, 478-479 (2d Cir. 1967), cert. denied, 390 U.S. 925, 88 S.Ct. 860, 19 L.Ed.2d 987 (1963); Carbo v. United States, 314 F.2d 718, 735-738 (9th Cir. 1968). It is difficult to see what value the declarations could have as proof of the conspiracy, if before using them the jury had to be satisfied that the declarant and the accused were engaged in the conspiracy charged; for upon that hypothesis the declarations would merely serve to confirm what the jury had already decided. United States v. Dennis, 183 F.2d 201, 230-231 (2d Cir. 1950) (L. Hand, J.), aff’d on other grounds, 341 U.S. 494, 71 S.Ct. 857, 95 L.Ed. 1137 (1951). In sum, the determination by an appellate court that the documents could appropriately have been found admissible by the trial judge, as statements of co-conspirators, does not in any way impinge upon any jury function. No instructions of the trial judge were necessary either to caution the jury as to any limited purpose for which the documents were received or that they might review his assessment that a proper foundation was laid. It is difficult therefore to see any impropriety in now accepting alternate bases for admission of the questioned documents, any objections sought to be levelled on the alternative grounds can and have been made here. There is authority for our position. Orser v. United States, 362 F.2d 580 (5th Cir. 1966), is directly in point. The trial court, over objection that statements made in the presence of the defendant were hearsay, admitted them on the theory that it was an accusation made against the defendant and since he had not denied them, they were admissible as implied admissions. On appeal, the court found them not to be admissible on this basis, but nevertheless admissible as declarations by co-partners in crime. Even though the trial court had made no finding that a conspiracy existed, the appellate court found that there was ample evidence of the conspiracy upon' which the trial court could have predicated such finding, hence no prejudice could be found. 362 F.2d at 585-586. c) Admissions We further find that many of the documents which were admitted were admissible in any event as admissions. For example, many are letters containing directions to Batliner and Buehler to execute contracts, and establish that Rosenstein and Braverman were the operating executives of CTE. Most incriminating is Exhibit 1025, a letter signed by both Rosenstein and Braverman addressed to Batliner in which they describe themselves as “equal partners and holders of the founder rights” of CTE. After an examination of these exhibits we are convinced that the vast majority of the documents admitted were admissible either as admissions or statements in furtherance of the conspiracy. Those which were not do not in our view constitute prejudicial error in light of the overwhelming proof of the Government. There is no real problem of authenticity here since the letters and documents which were admissible were signed by either Rosenstein or Braverman or both. That the signatures were those of the defendants was virtually conceded at trial. The argument now made that making an issue of their validity on trial would have increased the importance of these documents in the minds of the jury, is not at all persuasive. In view of the admittedly inculpatory character of the documents, it is inconceivable that tactical considerations would have prevented defendants from controverting their authenticity. It is further relevant that the Government had handwriting experts available to establish that the signatures were genuine in the event that their validity was questioned. II. OTHER ARGUMENTS a) Attorney Client Privilege The appellants have raised several other arguments on appeal which are of less substance. The claim is made that the use of the CTE documents and the testimony of Dr. Monauni constituted a violation of the attorney-client relationship. Although Batliner and Buehler were attorneys, the posture of the defendants has been decidedly ambivalent as to their true roles. The theory of their defense initially at least, was that Batliner and later Buehler were businessmen operating a bona fide successor firm to Foremost and Mclnerney, engaged in the business of representation of American firms selling goods to European PX’s. The letters for the most part reveal that they were in fact puppets who were being directed by Braverman and Rosenstein to sign contracts, forward cheeks to Bank Leu, order business cards and to arrange for letters of credit. Batliner’s letters are routine responses and requests for authority to pay Liechtenstein taxes. “Where an attorney and his client are engaged in business dealings as was the case here the attorney-client rule does not apply.” Lowy v. Commissioner, 262 F.2d 809, 812 (2d Cir. 1959). Appellant Braverman argues that Ex. 1025 is privileged. This is the letter signed by both individual defendants in which they describe themselves as equal partners in CTE and advise Batliner of Buehler’s appointment to the administrative board of CTE as well as naming another anstalt as the representative of CTE. Batliner is directed in the letter to make the necessary “decisions” concerning the change of residence and in the board and to have these “decisions” registered with the Trade Registry in Vaduz. Despite the use of the word “decisions” it seems evident that Batliner was in fact confronted with a decision previously made by the defendants and simply ordered to perform the ministerial task of amending corporate records. Even if we make the assumption that the letter represents what would be a privileged communication and not a routine business arrangement, the privilege does not protect communications during the commission and in furtherance of the felony. United States v. Bob, 106 F.2d 37, 40 (2d Cir.), cert. denied, 308 U.S. 589, 60 S.Ct. 115, 84 L.Ed. 493 (1939). The suggestion that since there was no crime committed in Liechtenstein, the attorney-client privilege remained intact, is not at all persuasive. The privilege is that of the client who in this case are American citizens whose scheme to evade United States income taxes is unquestionably criminal. The situs of their attorneys or of the documents produced here is irrelevant. The evidence of the criminal conspiracy here dehors this document is in any event substantial, as we have previously indicated. b) Constitutional Right of Privacy Appellants argue that the Liechtenstein documents were improperly seized in violation of their Fourth and Fifth Amendment rights. We find that there was no “seizure” of corporate records here by governmental agents. Monauni appeared with the records Bat-liner had turned over to him and Government Agent Brozen, who accompanied him to the United States, testified that he was unaware of the fact that Monauni had even brought the file until he arrived. There is no showing here of “official misconduct” which would trigger Fourth Amendment rights and attendant exclusionary rules. Coolidge v. New Hampshire, 403 U.S. 443, 487-488, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971). The request for an evidentiary hearing on this question was properly denied. Agent Brozen was thoroughly examined on this point in the trial. The defense motion to depose Batliner before trial under Fed.R.Crim.P. 15 was properly denied by Judge Tenney (United States v. Rosenstein, 303 F.Supp. 210, 212 (S.D.N.Y.1969)) since the only allegation made to support the motion was that counsel had “reason to believe” that Bat-liner would not attend any trial in the United States. This was deemed insufficient to establish factually that the witness could not be present. This determination was properly within the discretion of the judge. United States v. Birrell, 276 F.Supp. 798, 822 (S.D.N.Y.1967). During the course of the trial when counsel for the defendant during his cross-examination of Monauni, indicated his interest in examining Batliner, the Government indicated that Batliner had stated that he would not testify at that time. However, the Government twice offered, in the presence and out of the presence of the jury, to accompany defense counsel to Liechtenstein to take his deposition. The offer was not accepted. The argument that appellants were deprived of their right to confront Batliner is not supported by the record. It is not disputed that a corporation has no Fifth Amendment privilege (Wilson v. United States, 221 U.S. 361, 384-385, 31 S.Ct. 538, 55 L.Ed. 771 (1911)); and in any event neither Rosenstein nor Braverman, even though they were the alter egos and sole owners of CTE, can assert Fifth Amendment privileges when corporate records are used against them. United States v. Fago, 319 F.2d 791 (2d Cir. 1963). Even viewed as personal papers rather than as corporate records, we find no Constitutional violation. The papers were in the possession of Batliner who surrendered them through Monauni without Government compulsion. The documents were not privileged and we find no legitimate expectation of privacy or confidentiality under the Fourth or Fifth Amendments. Couch v. United States, 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548 (1973). c) Pre-Trial Delay The claim of Braverman and Foremost that there was such inor-díñate delay in the prosecution of this case so as to deny them due process of law is not tenable. Pre-indictment delay is premised on the fact that the conspiracy commenced in 1960 and terminated in 1967 with substantive violations committed from December 1962 through April 15, 1965. The indictment was returned on December 4, 1968. We find no merit in the argument that this delay was unreasonable. There is no suggestion of Government design to create delay and no showing of prejudice. In fact the investigation required here to produce the witnesses and documents in the United States and Europe, placed a tremendous burden on the Government which was dealing with a massive, albeit crude, scheme to defraud. The post-indictment delay from December 4, 1968 to October 26, 1971 was not excessive in our view within the criteria established in Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972). There was no demand by the defendants for a trial and no specific instances of prejudice resulting from delay. Again the complicated character of the case is an element to be considered (407 U.S. at 531, 92 S.Ct. 2182). It is also noteworthy that although the Government had placed the case on the calendar in May, 1970, to secure a trial date, defense counsel requested adjournments until the Spring of 1971 because of his own trial schedule. At that time substituted counsel requested a delay until the Fall of 1971. Finally, Judge Croake properly denied defendants’ motions for discovery under Rules 16(a) and 16(b), Fed.R. Crim.P., as overbroad. United States v. Jordan, 399 F.2d 610, 615 (2d Cir), cert. den., 393 U.S. 1005, 89 S.Ct. 496, 21 L.Ed.2d 469 (1968). Again we find no showing of prejudice in the denial of the discovery orders here where the Government voluntarily made available prior to trial most of its documentary evidence, i. e., the checks made payable to CTE by the manufacturers in payment of the sales commissions. After reviewing all of the appellants’ arguments on appeal, we affirm. . 28 U.S.C. § 1732 provides in pertinent part: (a) 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, oceur-rence, 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. All other circumstances of the making of such writing or record, including lack of personal knowledge by the entrant or maker, may be shown to affect its weight, but such circumstances shall not affect its admissibility. The term “business,” as used in this section, includes business, profession, occupation, and calling of every kind. . We note that the new Federal Rules of Evidence do not classify admissions or co-conspirators’ declarations as exceptions to the hearsay rule, but rather as statements which are not hearsay. Fed.R.Evid. 801(d)(2). See United States v. Puco, 476 F.2d 1099 n. 3 (2d Cir., 1973). In any event they are admissible to establish the truth of what is said. C. McCormick, Evidence § 239, at 503-04 (1954). . For example, Abe Kent and Miriam Gittleson, employees of the Ideal Toy Corporation, testified that defendant Rosen-stein had called and requested that Rosen-stein’s commission cheeks be sent to CTE, the “subsidiary” corporation. Rubin Bass, president of North Shore Sportswear, testified in part: Q. . Just what did Azzaro (an employee of Mclnerney) say to you and what did you say to Mr. Azzaro? A. To mail the checks overseas. Q. What did he say? A. This would cover his commissions to Mclnerney Sales. Q. Do you recall whether or not Mr. Azzaro indicated anything about the nature of who owned the companies or who the companies were? (Objections of defense counsel) A. All he said is that all these companies are one and not to worry what name we make it out, it will cover the commissions. (Tr. 467) Mr. Bass further testified that despite the payments to CTE', he continued to deal with the same people, Rosenstein and Azzaro, at Mclnerney. No one from Europe performed any services for him. Francis Parker, an employee of Genes-oo, testified that his company’s sales representative was Foremost Brands. At the request of defendant Bravez-man, Genesco employed CTE and began paying commissions to the latter. Braverman indicated to Parker that Foremost and OTE wez-e the “same” organization. . This is in contrast to the rule with regard to confessions followed in some jurisdictions. Under the so-called “Massachusetts Rule” the trial judge initially determines whether the defendant’s confession is voluntary. If the court admits the confession, the jury is instructed that they may ignore it if they disagree with the court and believe the confession to have been coerced. See Jackson v. Denno, 378 U.S. 368, 378 n. 9, 84 S.Ct. 1774, 12 L.Ed.2d 908 (1964). . Standard Oil Co. v. Moore, 251 F.2d 188, 217-218 (9th Cir. 1957), cert. denied, 356 U.S. 975, 78 S.Ct. 1139, 2 L.Ed.2d 1148 (1958), relied upon by appellants is distinguishable. In that case the documents held inadmissible under the Business Records Rule, were urged on appeal, as in this case, to be admissible as either admissions or declarations of co-conspirators. The appellate court had to remand for a new trial since for the most part the “admissions” consisted of inter-office memos of employees and agents of the corporation to their principals and not to third parties. They were intramural statements and there had to be some showing that they represented the position of the corporation. No such problem exists here. For the most part the letters here were signed by Braverman and Rosenstein who were of course, in fact, the alter egos of the corporation. There- • fore no independent or collateral finding of authority was here required. . The charge of Judge Croake here was entirely proper with respect to the admissibility of one conspirator’s statements or declarations made in furtherance of the conspiracy against other persons found to be members. Therefore no further instruction was necessary with respect to the theory of admissibility of the Liechtenstein documents. See United States v. Baker, 419 F.2d 83, 88-89 (2d Cir. 1969), cert. denied, 397 U.S. 971, 976, 90 S.Ct. 1086, 25 L.Ed.2d 265 (1970). See also United States v. Ross, 321 F.2d 61, 68-69 (2d Cir.), cert. denied, 375 U.S. 894, 84 S.Ct. 170, 11 L.Ed.2d 123 (1963), where Chief Judge Friendly oberved: “ [W] e should hardly be warranted in reversing for the admission of evidence simply because the judge did not place his ruling on the ground that would most readily have supported it.” . For example, a letter dated June 20, 1963 from defendant Braverman to Dr. Batliner reads as follows: I am herewith returning both contracts from Dan River International. Please sign both copies for Continental Trade and return same to my attention. Comparable instructions appear in letters from Braverman, dated March 14, 1963, April 4, 1963, September 3, 1963 and May 28, 1964, . Appellants vigorously attack the admission of Government’s Exhibit 1029 which was a list of expenses of CTE including the names of Braverman and Rosenstein. The expenses totalled $54 and the Government argued to the Jury that such minimal expenses for OTE which purportedly was engaged in substantial business, was indicative of its mere “mail drop” function. Since the memo was unsigned, it was not admissible on the alternate grounds we have accepted. However, that this was the true function of OTE is so clearly established by the other evidence, witnesses’ testimony as well as the admissible documents, that we do not consider its admission here prejudicial. It was merely cumulative to that properly admitted evidence.

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Oliver LANNING, Plaintiff-Appellant, v. O. E. SERWOLD, Jr., et al., Defendants-Appellees. No. 71-1934. United States Court of Appeals, Ninth Circuit. Feb. 12, 1973. William D. Cameron (argued), of Williams, Lanza, Kastner & Gibbs, Seattle, Wash., for plaintiff-appellant. J. Paul Coie (argued), John L. Weinberg, of Perkins, Coie, Stone, Olsen & Williams, Robert W. Thomas, of Lane, Powell, Moss & Miller, Seattle, Wash., for defendants-appellees. Before CHOY and GOODWIN, Circuit Judges, and SOLOMON, District Judge. The Honorable Gus J. Solomon, United States District Judge for the District of Oregon, sitting by designation. CHOY, Circuit Judge: The sole issue presented for our disposition is whether the district court properly concluded that the complaint brought by Lanning should be dismissed pursuant to F.R.Civ.P. 12(b) (6) for failure to state a claim. We affirm in part and reverse in part, and remand for trial. Lanning is seeking damages on four separate claims. The first claim is predicated on alleged violations of Section 10(b), Securities Exchange Act of 1934, 15 U.S.C. § 78j (b), and SEC Rule 10 b-5, 17 C.F.R. § 240.10b-5. The remaining three claims are state pendent claims based on common law fraud, violations of Washington securities law, and tortious interference with a contractual relationship. Since there is no independent federal jurisdictional basis for the three state claims, these claims were dismissed when the federal claim was found wanting. We focus our attention on the federal claim. Lanning’s complaint asserts two separate Rule 10b-5 violations. First, his efforts to buy 500 unidentified shares of Poulsbo Rural Telephone Association (PRTA) stock for $15 a share from minority shareholders were wrongfully frustrated by a deceptive letter mailed by defendant Serwold, President of PRTA, to all PRTA stockholders. The letter falsely told of discussions with persons interested in the purchase of or merger with the company, and of the stock having a book value of $114.55 per share. Accordingly, Lanning alleges that his cost for the shares would be $300 to $600 per share instead of $15, so he demands judgment for $142,500 or an order requiring Serwold and PRTA to sell him 500 shares at $15 per share. Second, he purchased 136 shares of PRTA from two ladies at $15 per share and presented the certificates with the proper endorsements to PRTA so that they could register the transfer. Instead of registering the transfer Serwold falsely informed the ladies by telephone that the stock’s book value was $115 per share, that two firms were negotiating to buy PRTA for at least $300 per share and that he hated to see old stockholders “lose out.” He advised them that two attorneys, defendants Niemeier and Green, would help them defeat the sale and recover the 136 shares. Niemeier knowingly confirmed the misrepresentations and referred the ladies to a Seattle attorney who filed an action for the ladies to rescind the sale and to enjoin PRTA from transferring record ownership of the 136 shares to Lanning. Green falsely testified as to the fictitious negotiations. Lanning defeated this suit, but in doing so he incurred $3,897.64 in costs and expenses. THE 500 SHARES CLAIM We agree with the district court that Lanning lacked the requisite standing as to the 500 shares he claimed he could not buy at $15 per share because of Serwold’s fraudulent misrepresentations. Since Lanning had no relationship with anyone either as a purchaser or seller of the securities involved with the alleged rule violation, no claim for relief cognizable under Section 10(b) was presented. Mt. Clemens Industries, Inc. v. Bell, 464 F.2d 339 (9th Cir. 1972). THE 136 SHARES CLAIM We find here the requisite prior contractual relationship between Lanning and the two ladies who sold him the 136 shares. But appellees contend as the district court ruled, that any fraud occurred after the sale had been consummated and that the fraud did not impair the value of the securities purchased by Lanning so that the claim is outside the ambit of federal securities law. We do not agree. Lanning was a purchaser of stocks and the wrong done to him was in connection with this purchase. “Section 10(b) must be read flexibly, not technically and restrictively. Since there was a ‘sale’ of a security and since fraud was used ‘in connection with’ it, there is redress under § 10(b), whatever might be available as a remedy under state law.” Supt. of Insurance v. Bankers Life & Cas. Co., 404 U.S. 6, 12, 92 S.Ct. 165, 169, 30 L.Ed.2d 128 (1971). In Bankers Life, supra, the Supreme Court rejected the argument that the fraud must affect the investment value of the securities. Accord, A. T. Brod & Co. v. Perlow, 375 F.2d 393, 396-397 (2nd Cir. 1967). Here, in essence, Lanning had to pay nearly $4,000 more for the 136 shares because of Serwold’s misrepresentations. There is no requirement in either the statute or the rule that the fraud must occur prior to the consummation of the sale. Both condemn fraud in connection with a sale. Here the fraud was directly related to the sale of the securities. PENDENT CLAIMS The district court should assume jurisdiction over the pendent state claims relating to the purchase of 136 shares. However, any state claims relating to the attempted purchase of the 500 shares should be dismissed because there is no federal jurisdictional basis for these claims. Since the federal claim relating to this aspect of the ease was dismissed prior to trial, these pendent claims should also be dismissed. United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Moreover, these claims cannot be considered as being ancillary to any action based on the purchase of the 136 shares. The claims do not arise out of the same transaction or occurrence, nor are they auxiliary, accessorial or subordinate to the purchase of the 500 shares. See L & E Co. v. United States of America, 351 F.2d 880 (9th Cir. 1965); Glens Falls Indemnity Co. v. United States ex rel. Westinghouse Electric Supply Co., 229 F.2d 370 (9th Cir. 1955). Affirmed in part; reversed in part; and remanded. . The dismissal was of the complaint, not the action. Normally this is not an appealable order. But we find that there are special circumstances which permit us to treat the order as final. It appears that the action could not have been saved by any amendment of the complaint which Lanning could reasonably be expected to make. Ruby v. Secretary of the Navy, 365 F.2d 385 (9th Cir. 1966), cert. denied, 386 U.S. 1011, 87 S.Ct. 1358, 18 L.Ed.2d 442 (1967). . In pertinent part, Section 10(b) provides : “It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange— # ifc * * (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.” . The rule provides: “It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, (1) To employ any device, scheme or artifice to defraud, (2) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (3) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person in connection with the purchase or sale of any security.”

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Thomas Scott DeLONG, et al., Petitioners-Appellants, v. UNITED STATES of America, Respondent-Appellee. No. 72-3494 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 5, 1973. Thomas Scott DeLong, and others, pro se. Frank D. McCown, U. S. Atty., Fort Worth, Tex., for respondent-appellee. Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges. Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5th Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: Appellants are presently serving three-year federal sentences imposed pursuant to convictions on guilty pleas for violating the Dyer Act, 18 U.S.C. § 2312. Shortly after they were arrested for this violation in Texas, the appellants waived removal hearings and were delivered into the custody of a United States Marshal for the Western District of Oklahoma pursuant to a complaint pending in that district which also charged a Dyer Act violation. After assuming custody of the appellants in Oklahoma, the federal officers delivered them to Oklahoma state officials for prosecution on a state charge, without requiring the issuance of a writ of ha-beas corpus ad prosequendum. After they had served their Oklahoma state sentences, appellants were returned to federal custody in the Northern District of Texas, and were convicted of the Dyer Act offense. In the court below, appellants sought relief pursuant to 28 U.S.C. § 2255, contending that the federal officials’ failure to require the issuance of a writ of habeas corpus ad prosequendum before surrendering custody to Oklahoma state officials deprived the court below of jurisdiction to try them for the Dyer Act offense. The court below denied relief, and we affirm. It is settled that where one sovereign surrenders a prisoner to another sovereign for trial, sentencing, and execution of the sentence before he is to be returned to the custody of the sovereign first having jurisdiction, the prisoner has no standing to attack the agreement between sovereigns and the surrendering sovereign has not thereby waived its right to have the prisoner returned to its custody for trial. Bullock v. Mississippi, 5th Cir. 1968, 404 F.2d 75. Affirmed.

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UNITED STATES ex rel. Paul E. ARZONICA, Appellant, v. Walter G. SCHEIPE, Warden, et al. No. 72-1105. United States Court of Appeals, Third Circuit. Submitted on briefs Jan. 29, 1973. Decided Feb. 27, 1973. Paul E. Arzonica, pro se. John E. Ruth, Marx, Ruth, Binder & Stallone, Reading, Pa., for appellees. Before SEITZ, Chief Judge, ALDI-SERT, Circuit Judge, and LACEY, District Judge. OPINION OF THE COURT PER CURIAM: Appellant, a state prisoner, filed a complaint under 42 U.S.C. § 1983 against the warden and the County Prison Board of Berks County, Pennsylvania. The district court properly dismissed the action against the board. United States ex rel. Gittlemacker v. City of Philadelphia, 413 F.2d 84 (3d Cir. 1969). The gravamen of his complaint seeking money damages against the warden is that while awaiting trial for a state offense at the Berks County Prison, he was placed in solitary confinement and then transferred to a state institution following a jail break by three other prisoners. He alleges constitutional deprivations by reason of (1) his transfer to the state prison, (2) his being placed in solitary ■ confinement at Berks immediately prior to the transfer and on three brief occasions when he was returned to Berks for court appearances, and (3) statements made by the warden to probation officers preparing a presentence report for the state court. We hold that this last mentioned allegation does not constitute a cause of action for which relief may be granted under § 1983, nor does the allegation relating to the transfer from the county to the state prison. As to the remaining allegation, the district court reasoned that since four inmates escaped from a cell block where plaintiff was housed, the warden “decided to move the plaintiff to solitary confinement. This was purely an internal administrative matter of a state penal institution and no cause of action averring under the Civil Rights Act. There are no violations of the plaintiff’s constitutional rights.” It would appear from the plaintiff’s complaint that the prisoners escaped from the same “cell that Plaintiff occupied.” At the time of its decision, the district court did not have the advantage of Gray v. Creamer, 465 F.2d 179 (3d Cir. 1972), and United States ex rel. Tyrrell v. Speaker, 471 F.2d 1197 (3d Cir. 1973). These are new decisions based on facts strikingly dissimilar to the case at bar. For example, First Amendment overtones emanating from suppression of a prison newsletter were present in Gray. We are not prepared to give literal efficacy to isolated excerpts from language of that opinion which would otherwise suggest that “any transfer of a prisoner from the general prison population to solitary confinement without either notice of the charges or a hearing does not . meet minimal due process requirements.” Indeed, Judge Van Dusen qualified this otherwise sweeping statement with the phrase, “absent unusual circumstances.” We therefore deem it appropriate to state that Gray may not be interpreted as announcing a per se rule that any transfer of a prisoner to solitary confinement without notice of charges or a hearing constitutes a constitutional deprivation. The rule of reason still prevails; the exigencies of acute and critical situations in prison may require swift and decisive administrative action without the fear of exposing prison officials to the threat of subsequent liability for money damages arising out of decisions made in the good faith exercise of administrative discretion. Moreover, the holding in Tyrrell was predicated upon an allegation of nine months’ segregation. Clearly, this was an example of “substantial punishment,” described in Gray as necessitating establishment of constitutional safeguards. Gray and Tyrrell followed courses previously uncharted in this circuit and the full impact of their holdings remains to be defined. Additionally, because of the novelty of their doctrines, this court is yet to be faced with the question of whether there may be only prospective application of their teachings. See Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965); Desist v. United States, 394 U.S. 244, 89 S.Ct. 1030, 22 L.Ed.2d 248 (1969). For our immediate purposes, however, we remand these proceedings to the district court for reconsideration of the solitary confinement issue. Our action must not be construed as deciding that Gray and Tyrrell are retroactive or, if so, that their precise holdings are applicable to the circumstances at bar. The judgment of the district court is affirmed in all respects except that portion relating to the solitary confinement in Berks County Prison. That portion of the judgment is vacated and the proceedings remanded with a direction to proceed in accordance with the foregoing discussion.

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UNITED STATES of America and David A. Thompson, Special Agent, Internal Revenue Service, Appellees, v. MID-WEST BUSINESS FORMS, INC., and Fred Borneman, President of Mid-West Business Forms, Inc., Appellants. No. 72-1455. United States Court of Appeals, Eighth Circuit. Submitted Feb. 13, 1973. Decided March 1, 1973. Fred L. Hall, and William A. Wear, Springfield, Mo., filed appendix and brief for appellants. Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, John P. Burke, Robert E. Lindsay, Attys., Tax Div., Dept, of Justice, Washington, D. C., Bert C. Hurn, U. S. Atty., and Paul Anthony White, Asst. U. S. Atty., Kansas City, Mo., on brief for appellees. Before LAY and BRIGHT, Circuit Judges, and NICHOL, District Judge. Sitting by designation. PER CURIAM: Fred Borneman, President and sole shareholder of Mid-West Business Forms, Inc., appeals from an order of the United States District Court for the Western District of Missouri, directing him to comply with a summons issued by the Internal Revenue Service pursuant to 26 U.S.C. § 7602. The summons required Borneman to appear, testify and produce the records of Mid-West Business Forms, Inc. Borneman refused to comply with the summons, claiming that to do so would violate his Fifth Amendment privilege against self-inerimination. Borneman claims the general rule which provides that the privilege is not available to a corporate officer to prevent disclosure of corporate records does not apply since Mid-West Business Forms is organized under the Internal Revenue Code as a Subchapter S corporation. He contends that since any tax liability of the corporation must neees-sarily be addressed to him as an individual, he has the right to rely on his Fifth Amendment privilege in any tax investigation of the corporation. We disagree and affirm the order of the district court. An identical claim was recently rejected by the Tenth Circuit in United States v. Richardson, 469 F.2d 349 (1972). After a thorough analysis of the legislative history surrounding the Subchapter S corporation, the Richardson court concluded that although the tax laws allowed income to be channeled from the corporation to the shareholders, it was not the intent of Congress to eliminate the corporation itself or to convert it into a partnership for tax or other purposes. See also 7 Mertens, Law of Federal Income Taxation, § 41B.22 at 36 (1967). We find the reasoning of the Richardson court persuasive and controlling here. The defendant also contends that since the agent who issued the summons was with the Intelligence Division of the Internal Revenue Service, this necessarily establishes that the sole purpose of the investigation was to gather information upon which to base a criminal prosecution. However, the district court, after reviewing the entire record, found that the summons was not issued with the singular intent to bring a criminal prosecution. We cannot say that such a finding was clearly erroneous. The order of the district court enforcing the summons is affirmed. . See Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370, 50 L.Ed. 652 (1906); United States v. Giordano, 419 F.2d 564 (8 Cir. 1969), cert. denied, 397 U.S. 1037, 90 S.Ct. 1355, 25 L.Ed.2d 648 (1970). This lias been held to be true even where the corporation has only one stockholder. See United States v. Bell, 448 F.2d 40 (9 Cir. 1971); United States v. Bowman, 435 F.2d 467, 469-470 (3 Cir. 1970); Hair Industry, Ltd. v. United States, 340 F.2d 510 (2 Cir. 1965), cert. denied, 381 U.S. 950, 85 S.Ct. 1804, 14 L.Ed.2d 724. . Of course, the fact that the investigation might ultimately lead to a criminal prosecution does not render the summons outside the scope of Section 7602. All that is necessary is that the summons be “issued in good faith and prior to a recommendation for criminal prosecution.” Donaldson v. United States, 400 U.S. 517, 536, 91 S.Ct. 534, 545, 27 L.Ed.2d 580 (1971); see also United States v. Richardson, supra.

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GTE SERVICE CORPORATION and GTE Data Services Incorporated, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, United States Independent Telephone Association (USITA) et al., Intervenors. UNITED TELEPHONE COMPANY OF MISSOURI and United Computing Systems, Inc., et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Mankato Citizens Telephone Company et al., Intervenors. WESTERN UNION TELEGRAPH COMPANY, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents. INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, CTSS of Association of Data Processing Service Organizations, Inc. (ADAPSO), and Business Equipment Manufacturers Association (BEMA), Intervenors. CONTINENTAL TELEPHONE CORPORATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents. Nos. 97, 185, 186, 187, 188, Dockets 71-1300, 71-1484, 72-1486, 72-1566, 72-1578. United States Court of Appeals, Second Circuit. Argued Oct. 27, 1972. Decided Feb. 1, 1973. George E. Shertzer, New York City (William Malone, Washington, D. C., and James V. Carideo, Tampa, Fla., of counsel), for Petitioners, GTE Service Corp. and GTE' Data Services Inc. Warren E. Baker, Shawnee Mission, Kan. (Paul G. Pennoyer, Jr., and Chad-bourne, Parke, Whiteside & Wolff, New York City, Edmund E. Harvey and Lloyd D. Young, Washington, D. C., of counsel), for petitioners, United Telephone Co. of Mo.- and United Computing Systems, Inc., and others. Richard C. Hostetler, New York City (Jack Werner and Robert N. Green, Washington, D. C. of counsel), for inter-venor-petitioner, Western Union Telegraph Co. Robert E. McKee, New York City, for petitioner, International Telephone and Telegraph Corp. Raymond L. Falls, Jr., New York City (Don H. Wallach, Washington, D. C., Mathias E. Mone and Cahill, Gordon, Sonnett, Reindel & Ohl, New York City, of counsel), for petitioner, Continental Telephone Corp. Charles A. Zielinski, Counsel, F. C. C., Washington, D. C. (John W. Pettit, Gen. Counsel and Joseph A. Marino,-Associate Gen. Counsel, F. C. C., Washington, D. C., Thomas E. Kauper, Asst. Atty. Gen., and Harry First, Atty., Dept, of Justice, Washington, D. C., of counsel), for respondents, F. C. C. and United States. Joseph M. Kittner, Washington, D. C. (Edward P. Taptich and McKenna, Wilkinson & Kittner, Washington, D. C., John S. Voorhees and Howrey, Simon,' Baker & Murchison, Washington, D. C., of counsel), for intervenor, Business Equipment Manufacturers Assn. (BEMA). Herbert E. Marks, Washington, D. C. (Stephen R. Bell and Wilkinson, Cragun & Barker, Washington, D. C., of counsel), for intervenor, CTSS of Assn, of Data Processing Service Organizations, Inc. (ADAPSO). Thomas J. O’Reilly, Washington, D. C. (William C. Blethen and Blethen, Ogle, Gage & Krause, Mankato, Minn., of counsel), for intervenors, United States Independent Telephone Ass’n (USITA) and Mankato Citizens Telephone Co., and others. Before MOORE, HAYS and MULLIGAN, Circuit Judges. MULLIGAN, Circuit Judge: In these consolidated cases, petitioners seek a review of a Final Decision and Order (28 F.C.C.2d 267 (1971)) of the Federal Communications Commission which promulgated certain rules (47 C.F.R. § 64.702 (Supp.1972)) relating to the rendition of computer data processing services by communications common carriers. The petitioners include several telephone companies participating in the data processing field. They challenge the regulations broadly urging that the Commission lacked authority, abused its discretion and failed to follow a proper procedure in establishing the rules. Jurisdiction of this court to review the order is provided by 47 U.S.C. § 402(a) (1970) and 28 U.S.C. §§ 2342(1), 2343, 2344 (1970). The rules essentially prescribe the conditions under which common carriers, subject to the Communications Act, may engage in the offering of data processing services to others. Since this is the Commission’s initial venture into a broad field of new technology and services, some background discussion is appropriate. I. FACTUAL BACKGROUND The present day computer is created by the integration of mechanical devices and electronic circuits, and may be programmed to perform a wide variety of complex functions. Modern advancement in the industry built around this controversial machine has been so rapid, both in terms of technology and utilization, that the first commercially available general purpose computer, the UNIVAC, initially employed by the Census Bureau in 1951, has been reposing in the Smithsonian Institute since 1964 along with the Spirit of St. Louis. This advancement has been characterized not only by the continual development of computers having greater capability and efficiency of operation, but also by ever “larger” (higher capacity) computers. Economics of scale has been a major factor in spawning the trend towards the high capacity machine. Capacity of large computers varies with the square of their prices; thus, for double the price one obtains four times the power. The availability and economics of these large computers have in turn contributed significantly to the development of the data processing service industry, as is illustrated by the emergence of several important types of computer service enterprises. A number of major computer manufacturers maintain computer service bureaus, which sell computer time. There are also hundreds of non-manufacturing firms which offer a wide range of data processing services. Moreover, many large institutions, who either own or lease “in-house” computers for their own use, have found it economically desirable to procure surplus computer capacity and to sell the excess to others. Computer services available to the consumer, while taking many and varied forms, may be generally categorized as (1) message-switching; (2) data processing; or (3) a combination of both, i.e., a hybrid service. Message-switching essentially involves the sending of a message by a device, e. g., a teletypewriter, through common carrier lines to a computer where it is stored until an appropriate line is available for forwarding the message to the receiving station; the content of the message remains unaltered. Data processing, the use of the computer for operations which include the storing, retrieving, sorting, merging, and calculating of data, may be offered either as a “local” or a “remote access” service. A local data processing service is one wherein communications facilities are not employed in serving the customer. Input and output of the computer must of course be transmitted between the computer installation and the customer but the customer is in no way “linked” to the computer by communications facilities. Remote access service, on the other hand, provides for direct access to a central computer by customers at distant locations. It is effected by a system including a customer terminal joined to the central computer by common carrier operated communications lines. Where' remote access data processing is combined with message-switching in such a way that a single integrated service is offered, it is known as a hybrid service. Telephone companies, like many other organizations, have found important uses for the computer. It is employed directly in the provision of communications services, as well as for billing, accounting and other data processing. Because the nature of the telephone business necessitates the use of large communications computers to handle peak periods of traffic, the considerable excess capacity existing in off-peak hours can be utilized to perform data processing functions. Likewise, surplus computer time may be available on those “in-house” machines generally used to satisfy a telephone company’s data processing needs. The marketability of this excess computer capacity, and the growing interaction of the computer and communications industries have attracted common carriers to the computer service field. This in turn has aroused the concern of the FCC. The Commission’s response, on November 10, 1966, was to issue a Notice of Inquiry (7 F.C.C.2d 11) and a Supplemental Notice of Inquiry (7 F.C.C.2d 19) on March 2, 1967 which initiated a general, investigation into the interdependence of computer and communication services. These inquiries prompted about 3000 pages of comments from sixty interested parties including trade associations, government agencies, professional organizations, communications common carriers, computer manufacturers, computer service organizations, and computer users. The FCC, feeling constrained by its limited internal resources, contracted with the Stanford Research Institute to examine the responses and to make recommendations. After Stanford completed its analysis in a series of seven reports, the Commission released a Report and Further Notice of Inquiry (17 F.C.C.2d 587) on May 9, 1969, seeking comments on the Stanford study. Subsequently, on April 3, 1970, the Commission issued a Tentative Decision (28 F.C.C.2d 291). In addition to setting forth proposed rules, the decision indicated that two basic policy questions remained to be resolved: (a) The nature and extent of the regulatory jurisdiction to be applied to data processing services; and (b) Whether, under what circumstances, and subject to what conditions or safeguards, common carriers should be permitted to engage in data processing. 28 F.C.C.2d at 295. Furthermore, the decision indicated that any regulatory safeguard should seek to assure: (a) that [the sale by common carriers of data processing] services will not adversely affect the provision of efficient and economic common carrier services; (b) that the costs related to the furnishing of such services will not be passed on, directly or indirectly, to the users of common carrier services; (c) that revenues derived from common carrier services will not be used to subsidize any data processing services; and (d) that the furnishing of such services will not inhibit free and fair competition between communication common carriers and data processing companies or otherwise involve practices contrary to the policies and prohibitions of the antitrust laws. 28 F.C.C.2d at 302. The Commission, after hearing argument on September 3, 1970, filed its Final Decision and Order (28 F.C.C.2d 267) on March 18, 1971. That decision adopted the Tentative Decision and the proposed rules with certain significant additions by a vote of 4 to 3; Chairman Burch and Commissioners Lee and Wells dissented in part. A Memorandum Opinion and Order, denying petitions for reconsideration and affirming (3-2) the Final Decision and Order (34 F.C.C.2d 557) was released on March 30, 1972. II. THE RULES The Commission found that there was a “close and intimate relationship” between data processing and communications services; data processing development increasingly depends upon the use of communications services, and communication systems rely upon increasingly greater use of data processing. 28 F.C.C.2d at 269. Having found the close and mutual relationship between common carriers and data processing, the Commission’s basic concern has been that the statutory obligation of the communication common carrier to provide adequate and reasonable services could be adversely affected by their also providing data processing services. “ ‘The dangers . . . relate primarily to the alleged ability of common carriers to favor their own data processing activities by discriminatory services, cross subsidization, improper pricing of common carrier services, and related anti-competitive practices and activities.’ ” 28 F.C.C.2d at 270 (quoting the Tentative Decision, 28 F.C.C.2d at 301-02). The Commission concluded that the best method of regulation was to avoid the extremes of an absolute prohibition of communication common carriers’ furnishing computer services, directly or indirectly, and the regulation of the data processing industry as such. The middle ground found by the Commission was based upon the concept of achieving “ ‘a maximum separation of activities which are subject to regulation from non-regulated activities involving data processing.’ ” 28 F.C.C.2d at 269 (quoting the Tentative Decision, 28 F.C.C.2d at 302). a) Rules 47 C.F.R. §§ 64.702(b), (c) (1), (2), (3) & (d) (Supp.1972) To achieve “maximum separation,” the Commission in its Tentative Draft and its present Final Draft promulgated rules 64.702(b), (c)(1), (2) & (3). In substance these regulations provide that no common carrier subject to the Communications Act, in whole or in part, shall furnish data processing services to others except through a separate corporate entity which must maintain its own books of account, have separate officers, employ separate operating personnel, and utilize separate computing equipment and facilities. All contracts, agreements and arrangements between the carrier and such separate corporation, must be filed with the Commission within thirty days. The carrier is further precluded from selling or promoting the data processing services of the separate corporation. Rule 64.702(d) (not in the Tentative Draft) prohibits a carrier from selling or leasing to any other entity any excess capacity or computer system component, which the carrier uses in any way for the provision of its common carrier communications services. We treat these rules separately since their validity rests upon a common legal and factual basis not present in the case of the other rules to be later considered. The initial question raised by certain petitioners is whether the Federal Communications Commission is authorized by Congress to promulgate rules regulating the entrance of communications common carriers into the nonregulated field of data processing services. We think that the answer here has to be in the affirmative. The Commission was created, inter alia, “[f]or the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges . . . .”47 U.S.C. § 151 (1970). Moreover, the Commission may “make such rules and regulations, and issue such orders ... as may be necessary in the execution of its functions.” 47 U.S.C. § 154(i) (1970). The rules we are now considering are generically based upon the primary charge of the Commission that its carriers provide efficient and economic service to the public. The burgeoning data processing activities of the common carriers pose, in the view of the Commission, a threat to efficient public communications services at reasonable prices and hence regulation is justified under its broad rule-making authority. The fact that the Communications Act makes no reference to computers and data processing is not surprising. The Act was passed in 1934 and although there may have been academic concepts of the computer at that time, its commercial exploitation and impact on regulated communications carriers was certainly not evident. The courts, however, have uniformly and consistently interpreted the Act to give the Commission broad and comprehensive rule-making authority in the new and dynamic field of electronic communication. Thus, although the Act did not provide explicitly that the Commission deal with network practices found inimical to the public interest, the Supreme Court in NBC v. United States, 319 U.S. 190, 219, 63 S.Ct. 997, 1010, 87 L.Ed. 1344 (1943), observed: But Congress was acting in a field of regulation which was both new and dynamic. “Congress moved under the spur of a widespread fear that in the absence of governmental control the public interest might be subordinated to monopolistic domination in the broadcasting field.” ... In the context of the developing problems to which it was directed, the Act gave the Commission not niggardly but expansive powers, (citation omitted). See also United States v. Storer Broadcasting Co., 351 U.S. 192, 76 S.Ct. 763, 100 L.Ed. 1081 (1956). Similarly, although the Act makes no mention of Community Antenna Television (CATV), the broad power of the Commission to regulate communications was found to encompass the regulation of this technological development. United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). Our own court has upheld the authority of the .Commission to regulate prime time access in television communication despite the absence of any explicit authority in the Act. Mt. Mansfield Television, Inc. v. FCC, 442 F.2d 470, 480-481 (1971). While these cases do not deal with the precise issue here under consideration, they nevertheless point the direction that must be followed in interpreting the Commission’s authority under the Communications Act. The plain implication of these precedents is that, even absent explicit reference in the statute, the expansive power of the Commission in the electronic communications field includes the jurisdictional authority to regulate carrier activities in an area as intimately related to the communications industry as that of computer services, where such activities may substantially affect the efficient provision of reasonably priced communications service. We so hold. Another argument levelled by the petitioners is that the findings of the Commission only indicate potential abuse and that the proper role of the FCC should be to wait for actual abuses and then proceed on an adjudicatory basis rather than through the device of rule-making. This argument is not persuasive. [T]he choice made between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency. SEC v. Chenery Corp., 332 U.S. 194, 203, 67 S.Ct. 1575, 1580, 91 L.Ed. 1995 (1947). This court has already pointed out: It is irrelevant that the rule is aimed at potential rather than actual domination or restraints, or that the Commission is not certain that the developments forecast will occur if the rule is not enacted. Mt. Mansfield Television, Inc. v. FCC, 442 F.2d 470, 487 (1971). It must be emphasized that here the Commission is moving into a new area of policy affecting large numbers of telephone carriers. The advantages of rule-making over adjudicatory proceedings in such circumstances are well understood. K. Davis, Administrative Law Treatise § 6.15 (1970 Supp.); H. Friendly, Benchmarks 143-48 (1967). Finding that the Commission has authority and that rule-making is the appropriate procedure, we have no doubt but that these rules are supported by adequate rational considerations. The 'Commission has avoided here the extreme of totally barring the carrier from data processing directly or indirectly on the one hand, and the regulation of the data processing industry on the other. The media via approach of “maximum separation” of services is logically directed at eliminating the potential hazards to efficient and economical phone service which is clearly the Commission’s primary responsibility and interest here. Specifically, the Commission was concerned that data processing costs would be passed on directly or indirectly to the public consumer of telephone services and that revenues derived from common carrier services would be used to subsidize data processing services. This concern is met by rules 64.-702(b), (e)(1), (2) & (3) which mandate the establishment of a separate corporate affiliate, require the filing of in-tra-organizational agreements, and prohibit the carrier’s sale or promotion of its affiliate’s data processing services. These rules effectively reduce the possibility of shifting costs, hiding operating or advertising expenses or any juggling of accounts which might otherwise occur. The efficiency of carrier service presumably is maintained and secured by the corporate, physical and financial separation prescribed by the regulation. Rule 64.702(d), although not in the tentative rules, is clearly within the “maximum separation” approach of the Commission. Its prohibition against the leasing or selling of extra capacity or computer system components is aimed at the protection of efficient telephone service to the public by eliminating the possibility of a diversion of facilities to other purposes. In sum, we find these rules fully within the authority of the Commission and amply supported by findings after appropriate rule-making procedure. b) Rules 17 C.F.R. §§ 61.702(c)(1) & (5) (Supp.1972) The principal attack of the petitioners is levelled against these two rules which in essence preclude the common carriers from purchasing, leasing or otherwise obtaining any data processing service or services from their separate corporations. Further the carrier is prohibited from permitting the separate corporation to employ in its name, any words or symbols contained in the name of the carrier or from using the carrier’s name in the separate corporation’s promotional enterprise. Although the regulations grammatically prohibit the regulated carrier from dealing with the affiliate or from permitting its name to be used and thus nominally are limited to common carriers, realistically the rules prohibit the data processing affiliate from dealing with the carrier or using its name or symbol. It is urged by the petitioners that these regulations are without statutory authority and constitute an abuse of discretion. While the rules which we have already found valid in Part I-I(a) of this opinion are supported by the Commission’s concern that its regulated carriers continue to provide the public with efficient and economic telephone service, its major reliance here is avowedly upon anti-trust considerations. Since the telephone carrier admittedly has a monopolistic, albeit legal leverage, the Commission is concerned about the threat of an extension of this power into the data processing market. Its concern here therefore is not for the communications market which Congress has entrusted to its care, but for data processing which is beyond its charge and which the Commission itself has announced it declines to regulate. We find the intrusion to be without authority either in the Communications Act or in the cases construing it. The Commission argues that since it has jurisdiction over the telephone carrier, it can bar the data processing affiliate from dealing with the carrier because corporate entities may be disregarded where “they are made the implement for avoiding a clear legislative purpose.” Schenley Distillers Corp. v. United States, 326 U.S. 432, 437, 66 S.Ct. 247, 90 L.Ed. 181 (1946). While this is dictum we have no doubt but that it represents a proper statement of the law. However, the proposition has no application at all to the situation at issue. The separate corporate entity is not a device utilized by the carrier to avoid regulation; it has been authorized by the Commission which in these very rules pronounces it as the only legitimate means by which a carrier may provide data processing services to others. While courts have long since engaged in the pursuit of piercing corporate veils where they have been utilized to evade or circumvent legislative enactments, the Commission itself has not only appointed and anointed the separate data processing affiliate but cut the umbilical cord to the parent by the “maximum separation” provisions we have previously discussed. The Commission has no basis at all to now pronounce that the carrier’s progeny is really illegitimate and a device to avoid regulation. The Commission argues that it may properly make regulations which are based upon anti-trust considerations. Again we have no quarrel with the proposition of law. However, the unfair competition, restraint of trade or potential threat of monopoly, must be in a market in which the Commission has jurisdiction. The threat here is admittedly to the data processing industry over which the Commission has never asserted jurisdiction and which it has deliberately avoided regulating. The Commission’s brief announces that the statutory monopoly power which the telephone company possesses provides a potential leverage into data processing and thus invites anti-trust scrutiny. The cases upon which it relies (see, e. g., United States v. Loew’s Inc., 371 U.S. 38, 83 S.Ct. 97, 9 L.Ed.2d 11 (1962); United States v. Griffith, 334 U.S. 100, 68 S.Ct. 941, 92 L.Ed. 1236 (1948); International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20 (1947)) in the main demonstrate that the scrutiny is normally that of the Department of Justice, Anti-Trust Division or the Federal Trade Commission which have responsibility for the enforcement of the Sherman and Clayton Acts. The cases where the Commission has been motivated by anti-trust considerations involve trade regulatory concerns in markets over which the FCC had jurisdiction. Thus in Mansfield Journal Co. v. FCC, 86 U.S.App.D.C. 102, 180 F.2d 28 (1950) the court affirmed the Commission’s denial of an application by the Mansfield Journal to construct F.M. and A.M. radio stations in Mansfield, Ohio. The Journal was the only newspaper in town. The FCC’s concern was that the monopoly the Journal enjoyed in the newspaper market would spill over into the radio broadcasting field, over which the agency had unquestioned jurisdiction. The concern of the Commission over anti-competitive abuse in communications is of course proper; its concern over data processing services is ultra vires. The CATV cases provide no support for the Commission’s assertion of jurisdiction here. In United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968), the authority of the FCC to regulate CATV was based on the need to control the growth of community antenna systems in order that the Commission might accomplish its broad responsibility of orderly development of an appropriate system of local television broadcasting. 392 U.S. at 177, 88 S.Ct. 1994. In short, there was substantial evidence that unregulated CATV would threaten an industry whose growth and development Congress had entrusted to the Commission. There is no claim here that unregulated data processing threatens telephone service to the public. General Tel. Co. v. United States, 449 F.2d 846 (5th Cir. 1971), strongly relied upon by the Commission, is clearly distinguishable in our opinion. That ease involved FCC orders prohibiting telephone carriers from furnishing CATV service directly or through affiliates and disallowing the carrier's construction of cable facilities for independent CATV operators except under certain conditions. In view of the prior holding of the Supreme Court in Southwestern Cable, supra, which had emphasized the Commission’s plenary responsibility over electrical communication and the continuing and broadening regulation of CATV by the FCC, the decision of the court upholding the orders is hardly surprising. As we have pointed out, the FCC has not claimed jurisdiction to regulate data processing. The General Telephone case, however, is instructive because of the emphasis which the court placed on the FCC’s anti-trust jurisdiction. The FCC had found that “[s]ince the telephone companies have a natural monopoly over the means required to conduct a CATV operation, i. e., the poles or conduits, they are in a position to pre-empt the market for this important service. [A]t present CATV is one important gateway to entering the broadband market and it is the Commission’s obligation to eliminate any arbitrary blockage of this gateway.” 449 F.2d at 856-857. In sharp contrast here, while the FCC found a dependence by the data processing industry upon communications facilities (28 F.C.C.2d at 269), it also found that the computer service industry is one characterized by “open competition” and “relatively free entry” (28 F.C.C.2d at 270). “These characteristics, in fact, provide[d] a major basis for [the Commission’s] conclusion that [it] should not, at this point, assert regulatory authority over data processing, as. such.” 28 F.C.C.2d at 270. The only other consideration we can find in the Final Decision to support the questioned rules is that “[t]he specialized and variant nature of the data processing services, particularly with reference to costs and charges therefor, is conducive to improprieties which are difficult to detect.” 28 F.C.C.2d at 273. While the improprieties may be difficult to detect, they should not be difficult to enumerate. We are told only that their net effect “could translate into inflated charges to [communications] customers. . . .” 28 F.C.C.2d at 273. These same improprieties could “cause irreparable harm” to the data processing competitors of the affiliates because of the underpricing possibilities so created. 28 F.C.C.2d at 273. These concerns, in our view, support the “maximum separation” concept of the approved rules but do not sustain the Commission’s intrusion into the data processing activities of the separate affiliate. Despite the proclaimed healthy competitive state of the data processing industry, the Commission has indicated that if abuse occurs it will not hesitate to review industry practices. In this posture we see no point to now directing a remand for further study. If we are correct in the view that the Commission has no express or implied authority to regulate the conduct of the data processing subsidiary by reason of anti-trust considerations, thus rendering rule 64.702(c)(5) void as ultra vires, it follows that rule 64.702(c) (4) barring the subsidiary from using the parent carrier’s name or symbol or using its name in promotional activities or enterprises, is perforce void. The Commission’s “purpose here was to prevent the impairment of effective competition.” Brief for FCC at 55. The competition sought to be protected is of course competition in the data processing field which we have repeatedly indicated is not properly within the Commission’s purview. Any Commission concern that advertising costs might be commingled and improperly charged to the parent are fully protected by rule 64.702(c)'(3) which prohibits a carrier’s sale or promotion of its affiliate’s data processing services. To characterize rule 64.-702(c)(4) as a “logical and necessary •extension” of rule 64.702(c)(3) overlooks, of coúrse, the separate legal entity of the data processing affiliate. The Commission reminds us that we are not to be concerned with the wisdom of its regulations nor should we substitute our judgment for that of the Commission as to the prudence of its regulations. We agree. See, e. g., Mt. Mansfield Television, Inc. v. FCC, 442 F.2d 470, 481-482 (2d Cir. 1971). Chairman Burch has made clear in his dissent (28 F.C.C.2d at 289-90) that he believed the disputed rules constitute “a classical case of regulatory over-kill.” In his view the prohibition of dealing between parent and subsidiary will preclude the common carrier from revenues which an affiliate through economies of scale or efficiency might be able to offer the parent, even in a competitive bidding setting. He terms the prohibition of the affiliate’s use of the parent’s name as “naive.” These arguments have also been pressed upon us by the petitioners. However, these are considerations properly for the Commission to determine and the majority of its members have determined otherwise. It is no proper part of our judicial function to act as three additional members of that distinguished body. The basis for our decision here is not that we disagree with the prudence or wisdom of the Commission but simply that the Commission had no jurisdiction under its Act or in the cases construing it, to regulate a separate affiliate’s business in the data processing market. That is properly the concern of the Anti-Trust Division and the Federal Trade Commission under the Sherman and Clayton Acts if any abuse occurs or is threatened. III. THE CONNECTING CARRIERS Several telephone companies have argued that since they are “connecting carriers” within the Act (47 TJ. S.C. § 152(b)(2) (1970)), they should be exempt from the rules here under consideration. They urge that they are primarily engaged in local exchange telephone service, a communications service exclusively subject to state regulation and expressly exempt from federal supervision (see 47 U.S.C. §§ 152(b), 221(b) (1970)). The Act (47 U.S.C. § 152(b)(4) (1970)), however, specifically makes applicable to “connecting carriers,” i. e., carriers engaged in interstate or foreign communication solely through physical connection with licensed carriers, the provisions of sections 201 to 205. These sections generally give the Commission jurisdiction over the connecting carrier’s services, charges and practices which are a part of the uninterrupted and indivisible national system of telephone service. Cf. United States v. Southwestern Cable Co., 392 U.S. 157, 169, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). In view of the Commission’s overall responsibility and broadly construed authority to insure adequate and efficient telephone service at reasonable rates, the same considerations which prompted the maximum separation regulations (47 C.F.R. §§ 64.-702(b), (c)'(l), (2), (3) & (d)) which we have found properly within the authority of the Commission with respect to its licensees should govern here. The connecting carriers are indisputably a necessary part of the national telephone network. See General Tel. Co. of Cal. v. FCC, 134 U.S.App.D.C. 116, 413 F.2d 390, 402, cert. denied, 396 U.S. 888, 90 S.Ct. 173, 24 L.Ed.2d 163 (1969). The de minimis argument of the connecting carriers is answered in part at least by the exemption of those connecting carriers whose annual revenues do not exceed $1,000,000 (see note 7 supra). The argument made by the connecting carriers that their data processing subsidiaries are local and in any event do not constitute interstate communications so as to be within the jurisdiction of the FCC is persuasive but is now academic in view of our voiding 47 C.F.R. §§ 64.-702(c)(4) & (5). To the extent that such non-communication and intra-state service poses a threat to efficient interstate telephone service at reasonable' rates, the “maximum separation provisions” of the regulations already approved in Part II (a) of this opinion should a fortiori provide public protection. The fact that no actual abuse has been shown as we have already indicated does not oust the Commission of its rule-making role. In summary, we hold that rules 64.-702(b), (c)(1), (2), (3) & (d) are valid, but that rules 64.702(c)(4) & (5) are beyond the jurisdictional authority of the Federal Communications Commission. . In Case No 71-1484 petitions for review were filed in the United States Court of Appeals for the Eighth Circuit by telephone companies known collectively ns the United Telephone System, and by United Computing Systems, Inc., subsidiaries of United Utilities, Inc. The case was transferred to this court and consolidated with Case No. 71-1300. Petitions to review were filed in Case No. 71-1300 by GTE Service Corp. and GTE Data Services, Inc., subsidiaries of General Telephone & Electronics Corp. Western Union Telegraph Co. filed the petition to review in Case No. 72-1486 which was also consolidated. Case No. 72-1578 was filed by Continental Telephone Co. in the Fourth Circuit, transferred to this Court and consolidated. International Telephone and Telegraph Corp. instituted Case No. 72-1566. A number of intervenors have also presented arguments in these proceedings. They include: Computer Time-Sharing Services Section (CTSS) of the Association of Data Processing Service Organizations (ADAPSO) ; Business Equipment Manufacturers Association (BEMA) ; United States Independent Telephone Association (USITA) ; and Mankato Citizens Telephone Co. . By order dated June 7, 1971, this Court stayed the effective date of the regulation pending judicial review. . The Final Decision also established rules regarding the offering of a “hybrid service” (47 C.F.R. §§ 64.702(e)-(f)) and the termination of a communication service (47 C.F.R. § 64.702(g)). For the definition of “hybrid service” see note 4 infra. These rules have not been challenged and therefore will not be discussed further. . These terms, among others, have been defined in 47 C.F.R. § 64.702(a) (Supp. 1972) : (1) “Data processing” is the use oí a computer for the processing of information as distinguished from circuit or message-switching. “Processing” involves the use of the computer for operations which include, inter alia, the functions of storing, retrieving, sorting, merging and calculating data, according to programmed instructions. (2) “Message-switching” is the computer-controlled transmission of messages, between two or more points, via communications facilities, wherein the content of the message remains unaltered. (3) “Local Data Processing Service” is an offering of data processing wherein communications facilities are not involved in serving the customer. (4) “Remote Access Data Processing Service” is an offering of data processing wherein communications facilities, linking a central computer to remote customer terminals, provide a vehicle for the transmission of data between such computer and customer terminals. (5) “Hybrid Service” is an offering of service which combines Remote Access data processing and message-switching to form a single integrated service. (i) Hybrid Data Processing Service is a hybrid service offering wherein the message-switching capability is incidental to the data processing function or purpose. (ii) Hybrid Communication Service is a hybrid service offering wherein the data processing capability is incidental to the message-switching function or purpose. None of the parties to this proceeding . have raised any question relating to these definitions. . Commissioner Bartley concurred in the Final Decision but would have gone further and required “a complete separation of companies making public offerings of regulated common carrier communication services and non-regulated data processing services.” 28 F.C.C.2d at 290. . Buies 47 C.F.B. §§ 64.702(b), (c)(1), (2) & (3) (Supp.1972) provide: (b) Except as provided herein, no common carrier subject, in whole or in part, to the Communications Act shall engage directly or indirectly in furnishing data processing service to others except as expressly provided in paragraph (c) of this section. This prohibition shall apply to all communications common carriers, including Section 2(b) (2) carriers, where any carrier itself has annual operating revenues exceeding $1,000,000 or any such carrier is directly or indirectly controlled by, or is under common control with, another carrier or carriers, and the combined annual revenues of all such carriers . exceed $1,000,000. (c) Except for Companies of the Bell System, common carriers may, subject to ' other provisions of law, have a controlling or lesser interest in, or be under common control with, a separate corporate entity that furnishes data processing service to others provided the following conditions are met: (1) Each such separate corporation must maintain its own books of account, have separate officers, utilize separate operating personnel, and utilize computing equipment and facilities separate from those of the carrier for its data processing service offerings. (2) Each such common carrier shall file with the Commission a complete statement of the terms and conditions of every written or oral contract, agreement or other arrangement entered into between such carrier and any such separate corporation within thirty days after the contract, agreement or other arrangement is made. (3) No such common carrier subject to the prohibition of paragraph (b) of this section shall engage in the sale or promotion of data processing services on behalf of any such separate corporation. . A carrier whose annual operating revenue does nbt exceed $1,000,000 is exempt from the provisions of 47 C.F.R. §§ 04.702(b) & (c), unless it is, directly or indirectly, controlled by or under common control with another carrier or carriers and their combined annual revenues exceed $1,000,000. See 47 C.F.R. § C4.702 (b). American Telephone and Telegraph Company and its affiliated companies (the Bell System) are subject to a consent judgment (United States v. Western Elec. Co., 1956 Trade Cas. ¶ 71,134 (D.N.J.1956)), which, with exceptions not applicable here, prohibit AT&T and its affiliates from engaging in any business other than the furnishing of regulated common carrier services. Thus, in view of the FCC’s disclaimer of the regulation of the sale of data processing services (see note 10 infra), the companies of the Bell System are precluded from offering data processing services to others (see 47 C.F.R. §§ 64.702(b)-(c)). . Regulation 47 C.F.R. § 64.702(d) (Supp. 1972) provides: (d) No common carrier subject in whole or in part to the Communications Act of 1934, as amended, shall sell, lease or otherwise make available to any other entity any capacity or computer system component on its computer system or systems which that carrier uses in any way for the provision of its common carrier communications services. . Several of the petitioners have urged that rule-making here is implicitly foreclosed by 47 U.S.C. § 215 (1970) which directs the Commission to examine into carrier activities and transactions likely to adversely affect the ability of a carrier to render adequate service to the public and to report any findings to Congress along with recommended corrective legislation. We do not agree. In view of the Commission’s broad responsibilities, we cannot believe that Congress intended by this section to preclude rule-making in the area of the Commission’s prime concern — • adequate public communications service. Had Congress wished to impose such a limitation on its expansive grant of power to the Commission, we think it would have done so explicitly. We refuse to impose the limitation. See General Tel. Co. v. United States, 449 F.2d 846, 858 (5th Cir. 1971). . The Commission stated in its Final Decision: “Since we are not proposing, at this time, to regulate data processing, as such, a discussion of the extent of our jurisdiction with respect thereto is neither relevant nor necessary . . . . ” 28 F.C.C.2d at 268. It further indicated that “ ‘ [i] f there should develop significant changes in the structure of the data processing industry, or, if abuses emerge which require the exercise of corrective action by the Commission, we shall not hesitate to re-examine the policies set forth herein.’ ” Id. (reiterating position set forth in the Tentative Decision, 28 F.C.C.2d at 298). . The petitioners have raised some question as to how broadly 47 C.F.R,. § 64.702(d) is to be interpreted. Is it to be construed to prohibit the use of all computer systems employed by the carrier no matter whether used for internal .purposes or for communications or is it to be interpreted more narrowly? See Brief for GTE Service Corp. at 4 n. 3; Brief for Continental Telephone Corp. at 13 n. 5; Brief for United Telephone System at 13 n. 16; Brief for FCC at 54 n. 35. We believe that it is not necessary for us to pass on this question. Properly the interpretation of the regulation is for the Commission in the first instance. In our view the Commission has in any event the plenary power to bar the use of all carrier computer systems. . Rules 47 C.F.R. §§ 64.702(c)(4) & (5) (Supp.1972) provide: (4) No such common carrier, or a holding company owning or jointly owning a common carrier and any such separate corporation, shall permit the separate corporation to employ in its name any words or symbols contained in the name of the carrier, nor shall such carrier or holding company permit any such separate corporation to use the name of the carrier in the separate corporation’s promotional activities or enterprises. (5) No sucli common carrier shall purchase, lease or otherwise obtain any data processing service or services from any such separate corporation. . See note 10 supra. . The actual holding of the Court was a refusal to treat the corporate parent and affiliate as a single entity. In the antitrust field, since section 1 of the Sherman Act (15 U.S.C. § 1 (1970)) requires a contract, combination or conspiracy in restraint of trade, courts have carefully respected the separate corporate identity of parent and subsidiary in order to come within the multiparty requirement of the statute. See Timken Roller Bearing Co. v. United States, 341 U.S. 593, 71 S.Ct. 971, 95 L.Ed. 1199 (1951); Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, Inc., 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951). Curiously antitrust violators are more apt to be snared by the judicial recognition of a separate corporate affiliate than by ignoring it. . The statutory authority relied upon by the Commission to justify its anti-trust concerns confirm the position that the anti-competitive threats must be to a market in which the Commission has jurisdiction. Thus, 47 U.S.C. § 201(b) (1970) provides: “All charges, practices, classifications, and regulations for and in connection with . . . communication service, shall be just and reasonable . ” (emphasis added). Section 202(a) provides: “It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with lite communication service, directly or indirectly ....’’ (emphasis added). Section 205(a) again simply authorizes the Commission to prescribe just, fair and reasonable charges, regulations and practices for a carrier. . This factual situation contrasts with that in the CATV cases where the FCC repeatedly urged regulation over an ancillary communications industry which threatened to interfere with television broadcasting. See United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). . “‘For a relatively small capital investment, a service firm can be formed, computer equipment can be leased, and programmers can be hired. The factors which mark the difference between service bureau success or failure are imaginative innovation, quality programming, and useful service features, rather than the size of the staff or the computing installation.’ ” 28 F.C.C.2d at 272 (quoting the Tentative Decision, 28 F.C.C.2d at 297-98). . See generally SEC v. Chenery Corp., 318 U.S. 80, 95, 63 S.Ct. 454, 87 L.Ed. 626 (1943); Friendly, Chenery Revisited : Reflections on Reversal and Remand of Administrative Orders, 1969 Duke L.J. 199, 209-17.

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UNITED STATES of America, Plaintiff-Appellee, v. Charles Earl STROUD, Defendant-Appellant. No. 72-2808. United States Court of Appeals, Ninth Circuit. March 2, 1973. Certiorari Denied June 4,1973. See 93 S.Ct. 2759. J. Frank McCabe, Asst. Federal Public Defender (argued), San Francisco, Cal., for defendant-appellant. Paul J. Fitzpatrick, Asst. U. S. Atty. (argued), F. Steele Langford, Asst. U. S. Atty., James L. Browning, Jr., U. S. Atty., San Francisco, Cal., for plaintiff-appellee. Before BROWNING and DUNIWAY, Circuit Judges, and KELLEHER, District Judge. Honorable Robert J. Kelleher, United States District Judge, Central District of California, sitting by designation. DUNIWAY, Circuit Judge: Stroud appeals from his conviction of bank robbery, 18 U.S.C. § 2113(a), and of assault by use of a dangerous weapon while committing bank robbery, 18 U.S. C. § 2113(d). We affirm the conviction but remand with directions. On May 8, 1972, a federally insured bank in San Francisco was robbed by two men, one of them armed, who fled the scene in a tan Volkswagen driven by a third person. Shortly thereafter, the parked car was spotted by a police officer, with Stroud working under the hood. One of the robbers and the stolen money were found in the back seat; the second robber was apprehended in some bushes a short distance away. Stroud’s defense was that he did know that his companions intended to rob the bank and that, upon discovery of their misdeed, he had stopped and disabled the car. The trial began at 2:00 P.M. on July 31, 1972. On the morning of August 1 the government rested and Stroud took the stand. At the noon recess, after he had testified on direct examination, and been cross-examined on behalf of his co-defendant but not by the government, the jury having retired, the judge summarily ordered Stroud’s bail exonerated and remanded him to custody. The judge stated only that he had “reasons for requiring the defendant to be in custody during the balance of the deliberations of this jury.” Stroud’s objection to this order and his motion for a continuance pending a direct appeal to this court were denied. Stroud’s cross-examination was completed after the recess, as was the taking of all testimony, and the case was submitted to the jury the next morning. The jury found Stroud guilty on both counts. He was sentenced to six years imprisonment on count two, and the court reserved judgment on count one. Stroud argues that his conviction should be reversed because of the revocation of his bail during trial. He relies upon Bitter v. United States, 1967, 389 U.S. 15, 88 S.Ct. 6, 19 L.Ed.2d 15, in which the Supreme Court held that it was error for a trial judge to order a defendant into custody without warning, hearing, or explanation when his only apparent default was returning late from a recess. We think that, under Bitter, the revocation of Stroud’s bail was improper. The trial judge gave no reasons for his action; Stroud was given no hearing at which he might have been able to rebut or explain any evidence apparently justifying revocation; it does not appear that the judge considered less drastic alternatives. At the least, the judge should have stated his reasons and given Stroud’s counsel a chance to rebut them. However, United States v. Allison, 9 Cir., 1969, 414 F.2d 407, 413-415, holds that, in a particular case, the error may be harmless. Stroud asserts that his composure on cross-examination might have been affected. We find nothing in the record to support this argument. Stroud also asserts that on the final day of the trial three jurors entered the courtroom early and did not see Stroud seated with his counsel. He argues that these jurors might have inferred that he was in custody, despite the fact that they were removed before the marshal brought him in. Again, there is no foundation in the record for this argument; it is pure speculation. In short, despite the substantial potential for prejudice in remanding a defendant to custody during trial, we are convinced that there was none in this case. This is not to suggest that we approve of the judge’s action; we do not. The error was harmless only with respect to the process by which Stroud was convicted of bank robbery; he was obviously deprived of a substantial right. We also recognize that the judge’s denial of a continuance effectively insulated his order from direct appellate review. Nevertheless, the harmless error rule serves the valid purpose of avoiding a second trial which could only lead to the same result, and we apply it here. The evidence against Stroud was overwhelming. Stroud’s second argument is that the court erred in permitting the prosecution to use a seven-year-old rape conviction to impeach him. He relies upon Luck v. United States, 1965, 121 U.S.App.D.C. 151, 348 F.2d 763, which held that a trial judge has discretion to preclude the use of prior felony convictions, and that he must weigh certain factors to determine whether the prejudice resulting from their use would outweigh their probative value. It is not clear whether the Luck rationale has been adopted in this Circuit. Compare United States v. Haili, 9 Cir., 1971, 443 F.2d 1295, 1299, with United States v. Harper, 9 Cir., 1971, 443 F.2d 911; United States v. Allison, supra, 414 F.2d at 412. However, even assuming that it has, Stroud would not prevail. The judge held a hearing on Stroud’s motion to preclude the use of his conviction, and was initially inclined to grant it because of the age of the conviction, the inflammatory nature of the crime of rape, and its tenuous relationship to credibility. He determined to admit evidence of the conviction only upon learning that Stroud’s defense depended entirely upon his credibility. In view of the district judge’s careful weighing of various relevant factors, for us to hold that he abused his discretion would in effect bar the use of rape convictions to impeach. Such a result is not supported by authority. See, e. g., Rule 609, Proposed Rules of Evidence for United States Courts and Magistrates, 12 Cr.L.Rep. 3018 (1972), permitting use of any felony conviction less than ten years old. Finally, Stroud argues that the court’s order reserving judgment on his conviction under 18 U.S.C. § 2113(a) should be vacated, because that offense merged into the more aggravated offense under section 2113(d). The government concedes that this argument is correct under the law of this Circuit. Clermont v. United States, 9 Cir., 1970, 432 F.2d 1215, 1216-1217; Bayless v. United States, 9 Cir., 1965, 347 F.2d 354, 356. The judgment of conviction is affirmed. The case is remanded with directions to vacate the order reserving judgment on count one of the indictment. Stroud’s motion for bail is denied. . Such orders are appealable despite the fact that they do not dispose of the merits. United States v. Carbo, 9 Cir., 1961, 288 F.2d 282, 283. Cf. United States v. Allison, 9 Cir., 1969, 414 F.2d 407, 413.

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LAI HAW WONG et al., Petitioner, v. IMMIGRATION AND NATURALIZATION SERVICE, Respondent. No. 72-1469. United States Court of Appeals, Ninth Circuit. Feb. 28, 1973. Michael W. Roberts (argued), Albert C. Lum, of Simmons & Ritchie, Los An-geles, Cal., for petitioner. Carolyn M. Reynolds, Asst. U. S. Atty. (argued), Frederick M. Brosio, Jr., Asst. U. S. Atty., William D. Keller, U. S. Atty., Los Angeles, Cal., Henry E. Peterson, Asst. Atty. Gen., Dept, of Justice, Washington, D. C., Stephen Suffin, Atty., I&NS, San Francisco, Cal., Joseph Surreck, Regional Counsel, I&NS, San Pedro, Cal., George K. Rosenberg, Dist. Director, I&NS, Los Angeles, Cal., for respondent. Before CHAMBERS and CHOY, Circuit Judges, and ENRIGHT, District Judge. The Honorable William B. Enright, United States District Judge for the Southern District of California, sitting by designation. CHOY, Circuit Judge: Lai Haw Wong (Mrs. Wong) and her two minor sons, Foo and Fat, appeal a decision of the Board of Immigration Appeals (the Board) holding them de-portable under Section 241(a)(1) of the Immigration and Nationality Act, 8 U.S. C. § 1251(a)(1). Another son, Lip, appeals from the Board’s denial of a petition to admit him as the son of a lawfully admitted permanent resident, Mrs. Wong. We affirm. Mrs. Wong, Foo and Fat were admitted into the United States in March, 1969 under a derivative fourth preference visa through Wong Kam Chow, their husband and father, to whom a fourth preference visa had been issued in 1968. Mr. Wong was never admitted into this country as he was convicted on a narcotics charge before he could leave Hong Kong. The third son, Lip, was paroled into the United States, also in March 1969 on a status dependent upon the status of Mrs. Wong. A special inquiry officer heard the deportation proceedings which were instituted against Mrs. Wong alone in October, 1969. He ruled that she was not deportable under 8 U.S.C. § 1251(f) (hereinafter section 241(f)) because she was the parent of two children who had been admitted for permanent residence albeit under the mistaken belief that they were accompanying or joining their father here. He certified his decision to the Board because of the novelty of the issue involved. While the certified question was pending before the Board, the Immigration and Naturalization Service (the INS) brought deportation proceedings against Foo and Fat, and moved to reopen Mrs. Wong’s deportation case and to consolidate the three deportation matters. The Board granted the reopening and the consolidation pointing out that the special inquiry officer’s decision as to Mrs. Wong having been certified was not a final action but only a suggested solution. The special inquiry officer, on reopening, ruled that Mrs. Wong, Foo and Fat (appellants) held invalid preference immigrant visas since they did not accompany or join their husband and father and so were deportable. Appellants contend that they were entitled to section 241(f) relief since at one time, no matter how briefly, there was a person who was a lawful permanent resident alien with whom they had the necessary relationship; i. e., Mrs. Wong’s status was supported by the admission of Foo and Fat; and the status of Foo and Fat was supported by Mrs. Wong’s admission, plus the special inquiry officer’s October 1969 ruling that she was not de-portable. The Board rejected appellants’ contentions ruling that their admission on visas to which they were not entitled conferred no lawful status upon appellants and that they could not rely on each other’s admission to gain section 241(f) status. We agree. The fundamental purpose of Congress in enacting § 241(f) was a humanitarian desire to keep family units together by precluding deportation of aliens who had gained admission into the country by fraud or misrepresentation if the effect of such deportation would be to separate families composed in part of American citizens or lawful permanent residents. Immigration Service v. Errico, 385 U.S. 214, 87 S.Ct. 473, 17 L.Ed. 2d 318 (1966); Lee Fook Chuey v. Immigration & Naturalization Service, 439 F.2d 244, 247 (9th Cir. 1971). Here, the family unit comprises a non-citizen father in Hong Kong who was never admitted into this country, a mother, and three sons. Under such circumstances, permitting Mrs. Wong and two sons to remain here and admitting the third son into the United States while Mr. Wong resides in another country, would promote familial disunity rather than union, contrary to the purpose of § 241(f). Chung Wook Myung v. Immigration & Naturalization Service, 468 F.2d 627 (9th Cir. 1972); United States v. Palmer, 458 F.2d 663 (9th Cir. 1972). The basis for admission of Mrs. Wong and two sons was the misconception that Mr. Wong had already entered this country under his fourth preference visa. Such mistaken admission conferred no status, permanent resident or otherwise, on Mrs. Wong, Foo, or Fat. None was lawfully admitted. It follows that the special inquiry officer’s tentative ruling that Mrs. Wong was not deportable since she was the parent of two children who had been admitted for permanent residence was erroneous. Appellants contend that, since the special inquiry officer knew or should have known when he made his original ruling that the two children were ex-cludable at the time of entry, the reopening of Mrs. Wong’s case by the Board was a violation of due process— that the INS was estopped from introducing evidence as to the children since 8 C.F.R. § 242.22 prohibits reopening a deportation hearing for the taking of further evidence “unless the special inquiry officer is satisfied the evidence sought to be offered is material and was not available and could not have been discovered or presented at the hearing.” No final decision was reached by the special inquiry officer. He certified the matter to the Board for a final decision because of the novel situation presented. “The order of the special inquiry officer shall be final except when the case is certified to the Board . . . or an appeal is taken to the Board by the respondent or the trial attorney.” 8 C.F.R. § 242.20. Thus, technically speaking, no reopening was involved of Mrs. Wong’s case, there having been no finality in the ruling of the special inquiry officer. The remand to and further proceedings before the special inquiry officer, including the taking of further evidence as to the children, were proper. As to the appeal of the son, Lip, who seeks this court’s review of the denial of his visa petition, we dismiss his appeal since it did not arise out of a deportation proceeding. While under 8 U.S. C. § 1105a(a) the court of appeals has exclusive jurisdiction to review final orders of deportation such as those affecting Mrs. Wong, Foo and Fat. Lip’s resort, however, should have been to the district court rather than to this court. Cheng Fan Kwok v. INS, 392 U.S. 206, 210, 88 S.Ct. 1970, 20 L.Ed.2d 1037 (1968); Andres v. INS, 460 F.2d 287, 288 (6th Cir. 1972). Affirmed as to Mrs. Wong, Foo and Fat, dismissed for want of jurisdiction as to Lip. . The policy of the Immigration and Naturalization Service was to permit children of tender years' to leave the United States on a voluntary basis with their parent or parents where all of them were deportable instead of subjecting such children to deportation proceedings with their parent or parents. . “The provisions of this section relating to the deportation of aliens within the United States on the ground that they were excludable at the time of entry as aliens who have sought to procure, or have procured visas or other documentation, or entry into the United States by fraud or misrepresentation shall not apply to an alien otherwise admissible at the time of entry who is the spouse, parent, or a child of a United States citizen or of an alien lawfully admitted for permanent residence.”

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FINANCIAL SERVICES, INC., Plaintiff-Appellant, v. Thomas E. FERRANDINA, Individually and as United States Marshal for the Southern District of New York, Defendant-Appellee, and CT/East, Inc., Intervenor-Defendant-Appellee. No. 72-2232. United States Court of Appeals, Second Circuit. Argued Feb. 1, 1973. Decided Feb. 27, 1973. William A. Fenwick, New York City (Cleary, Gottlieb, Steen & Hamilton, George Weisz, New York City, on the brief), for plaintiff-appellant. Michael E. Schoeman, New York City (Williamson & Schoeman, New York City, on the brief), for intervenor-de-fendant-appellee. Gerald A. Rosenberg, Asst. U. S. Atty., S. D. New York, for defendant-appellee. Before ANDERSON, FEINBERG and MULLIGAN, Circuit Judges. FEINBERG, Circuit Judge: This “appeal” by Financial Services, Inc. (FSI) had its genesis in an action, brought against it by CT/East in New York Supreme Court, seeking damages for alleged breach of a service contract and for wrongful retention of equipment belonging to CT/East. In September 1971, FSI removed that action (“the first action”) to the United States District Court for the Southern District of New York. 28 U.S.C. § 1441. In its answer, FSI generally denied the allegations of the complaint and set up certain counterclaims. In April 1972, CT/East applied to the late Judge McLean for an order of attachment under Article 62 of the New York Civil Practice Law and Rules (“New York C.P.L.R.”), available to federal plaintiffs under Fed.R.Civ.P. 64. The order issued ex parte as autho- • rized by New York law and provided for attachment of FSI’s assets within New York (principally, we are informed, accounts receivable) up to $599,468.03. Under New York law attachment was appropriate, as FSI is a foreign corporation organized under the laws of New Jersey. On April 24, 1972, FSI moved to vacate the attachment and, pending decision on the motion, applied for a temporary restraining order enjoining CT/East from enforcing thé attachment order by delivering the writ to the United States Marshal for service. The application for the temporary restraining order came before Judge McLean. We are told by counsel that both parties argued the merits of the application before the judge, who then denied the temporary relief sought, apparently without opinion. FSI’s motion to vacate the attachment was then heard on May 2 in the motion part of the district court by Judge Las-ker. The principal grounds for the motion were that the attachment had been fraudulently obtained and that it was unnecessary to CT/East’s security. In the course of a 21-page legal memorandum, FSI also devoted 12 lines to “the questionable constitutional nature” of an attachment order procured ex parte. During oral argument of the motion, Judge Lasker asked FSI whether it claimed that the attachment statute was unconstitutional; he pointed out that, if so, a three-judge court, with consequent delay, might be necessary. According to the record, counsel for FSI, mindful of the delay that consideration of the constitutional issue might cause and of two relevant cases pending before the Supreme Court, and later decided in Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), then informed the court that he “would raise the constitutional question in the proper forum where the United States Marshal was a party.” Understandably, Judge Lasker’s memorandum decision of May 8, 1972 made no mention of the constitutional issue. The judge declined to vacate the attachment, but ordered that CT/East’s undertaking be increased from $60,000 to $250,000. Five weeks later, the Supreme Court issued its opinion in Fuentes, holding invalid on due process grounds Florida and Pennsylvania replevin statutes which allowed chattels to be taken from the possessor without affording him a prior opportunity to be heard. Thereafter, FSI sought to reargue the motion to vacate before Judge Lasker on due process grounds. Counsel claims he was informally told that reargument would be improper; he therefore brought instead a new motion to vacate, which came on before Judge Frankel on July 25, 1972. On August 1, Judge Frankel denied the motion, without reaching the constitutional merits of the “unquestionably grim attachment procedure.” Judge Frankel observed that he was the third judge to consider the disputed order of attachment, that the constitutional issue had been noted by Judge Lasker with counsel for FSI expressing “a preference to postpone the due process contention for some other day,” that no new facts had been presented, and that “added arguments on the same facts ‘postponed’ or saved up for another day and another judge” were not enough to justify relitigation of the matter. Undaunted, FSI took another tack. On September 11, 1972, it brought a separate action (“the second action”) in the district court against the United States Marshal as sole defendant, seeking an order requiring him to return to FSI all sums already collected under the attachment and enjoining him from serving a writ on any further customers of FSI or from collecting any more funds under the order. One of the bases of the second action was again a lack of due process; this was joined with a new constitutional claim that the attachment statute, by permitting seizure of property on the sole basis of foreign corporate citizenship, also violates the equal protection clause. The second action was assigned to Judge Tenney under the individual calendar system, which had gone into effect in the Southern District. Judge Tenney permitted CT/East to intervene in the second action as a real party in interest, and in an opinion dated October 6, 1972, 59 F.R.D. 1 the judge denied FSI’s motion for preliminary injunctive relief. Regarding the second action as “in effect a third motion to vacate” the attachment, Judge Tenney primarily reasoned that failure to raise the equal protection claim at an earlier date foreclosed present consideration and that attempted litigation of the due process claim for the third time was improper. From this order, FSI appeals. The first, and ultimately dispositive, issue before us is whether we have jurisdiction over the appeal from Judge Tenney’s order. FSI argues that jurisdiction lies under 28 U.S.C. § 1292(a)(1), which allows appeals from interlocutory orders of the district court “refusing . . . injunctions. . . .” While the relief denied was injunctive in form, Judge Tenney believed, and CT/East argues to us, that the injunction sought in the second action was no more than a motion to vacate the attachment in the first action by another name. On these facts, there is little doubt that this is so. The second action seeks to prevent any further use of the order of attachment obtained in the first. Moreover, the relief sought includes repayment of any sums already collected under that order. We have held that denials of motions to vacate attachments are not appealable under the collateral order gloss, see Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), on the “final decision” requirement of 28 U.S.C. § 1291. West v. Zurhorst, 425 F.2d 919 (2d Cir. 1970); see Flegenheimer v. General Mills, Inc., 191 F.2d 237 (2d Cir. 1951). Were we to. permit this appeal under section 1292(a)(1) on these facts, we would sanction wholesale circumvention of the salutary rule of nonappealability reaffirmed in West. So long as subject matter and personal jurisdiction are proper, any defendant whose assets had been attached and who had unsuccessfully moved in federal court to vacate the attachment could readily commence a second, nominally separate, action against the marshal seeking to enjoin collection of revenues under an outstanding writ of attachment; and from any denial of preliminary injunctive relief, such a defendant would always have an appeal. Rules of finality may not be so easily altered, cf. Fleischer v. Phillips, 264 F.2d 515, 516 (2d Cir.), cert. denied, 359 U.S. 1002, 79 S.Ct. 1139, 3 L.Ed.2d 1030 (1959); International Products Corp. v. Koons, 325 F.2d 403, 406-407 (2d Cir. 1963). In other words, so far as we are concerned, the first and second actions are identical in purpose and anticipated effect and on these unusual facts should be treated on the issue of appealability as though they were the same; no appeal under 28 U.S.C. § 1291 or § 1292 will lie in either from an order refusing to vacate the attachment. We do not say that we would never be free to consider the validity of an attachment attacked on constitutional grounds, even though the underlying action was not yet final. Under unusual or compelling circumstances, mandamus may be an appropriate vehicle for interlocutory review. The constitutionality of New York’s attachment statute is important to present and future civil litigants not only in New York state courts but also in the four district courts in this circuit where New York’s attachment remedy may be utilized. The due process question takes on even more urgency and substance in the wake of growing Supreme Court concern with prejudgment seizures of property, manifested in recent cases. The constitutional claim sought to be raised is plainly substantial and merits full and careful consideration in the district court when raised in proper and timely fashion. It is true that we have recently denied two petitions for writs of mandamus seeking review of refusals to vacate an attachment where a similar constitutional claim was made. But the recurrence of the issue in mandamus petitions emphasizes rather than diminishes its importance. However, we are persuaded not to consider such extraordinary relief by the facts of this case, in which FSI, for reasons of its own, put off to another day its constitutional claims, whereupon two district judges permissibly held, in effect, that FSI’s time for pressing those claims had passed. Appeal dismissed. . New York C.P.L.R. § 6201(1) (McKinney 1963). . Whether a three-judge court was required would have raised difficult issues. E. g., was the relief sought injunctive, see Kennedy v. Mendoza-Martinez, 372 U.S. 144, 154-155, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963) ? If so, would it restrain the action of any “officer” of a “State” in the enforcement or execution of a state statute, 28 U.S.C. § 2281, when the “officer” to be restrained was the United States Marshal? . New York C.P.L.R. § 6212(b). . The local rules provided that a motion for reargument be brought within ten days. Rules of the United States District Courts for the Southern and Eastern Districts of New York, General Rule 9(m). . We are told that the first action has also been assigned to Judge Tenney, and that it is scheduled to be tried in June. . The Assistant United States Attorney, representing the nominal defendant United States Marshal, informed the Attorney General of New York of the pending action. The state entered no appearance below. Should the issue of unconstitutionality of the attachment statute be raised again in the district court, it would be appropriate for the district court to invite the Attorney General to submit a brief, whether in a three-judge, see 28 U.S.C. § 2284, or single-judge, proceeding. Cf. by analogy 28 U.S.C. § 2403. We have no doubt that the Attorney General would respond. . See Schlagenhauf v. Holder, 379 U.S. 104, 110-111, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964); La Buy v. Howes Leather Co., 352 U.S. 249, 256, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957). Professors Moore and Ward believe that “[w]ith respect to the demands of justice made by individual cases, it seems clear that discretionary review by mandamus is to be preferred to enlarging by judicial interpretation the categories of interlocutory orders that are appealable of right.” 9 Moore’s Federal Practice ¶ 110.26, at 286 (2d ed. 1972). . Fuentes v. Shevin, supra; Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969). . See Schneider v. Margossian, 349 F.Supp. 741 (D.Mass.1972) (Massachusetts prejudgment attachment procedure invalidated by three-judge court). Cf. Lynch v. Household Finance Corp., Civil Action 13,737 (D.Conn. Jan. 12, 1973) (Connecticut garnishment procedure invalidated by three-judge court), on remand from 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972), rev’g on other grounds 318 F.Supp. 1111 (D.Conn.1970) . Piano v. Brieant, 469 F.2d 1404 (1972); Republic of Chile v. United States District Court for the Southern District of New York, Dkt. No. 72-2119 (Oct. 17, 1972), petition for rehearing en banc denied (Jan. 8, 1973). . Cf. Lebowitz v. Forbes Leasing and Finance Corp., 456 F.2d 979 (3d Cir.), cert. denied, 409 U.S. 843, 93 S.Ct. 42, 34 L.Ed.2d 82 (1972) (jurisdiction under 28 U.S.C. § 1292(b) over appeal from order refusing to quash attachment).

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Sarame Raynolds STRONG, Plaintiff-Appellant, v. William H. G. FRANCE and the National Association for Stock Car Auto Racing, Inc. (“NASCAR”), Defendants-Appellees. No. 71-1440. United States Court of Appeals, Ninth Circuit. Feb. 28, 1973. Jeffrey J. Parish (argued), Frederick P. Furth, San Francisco, Cal., for plaintiff-appellant. Bruce W. Belding (argued), of Din-kelspiel & Dinkelspiel, San Francisco, Cal., Nathan Lewin, of Miller, Cassidy, Larroca & Lewin, Washington, D. C., for defendants-appellees. Before CHAMBERS and CHOY, Circuit Judges, and JAMESON, District Judge. Honorable W. J. Jameson, United States Senior District Judge for the District of Montana, sitting by designation. JAMESON, District Judge: This is an appeal from a final judgment, entered pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, dismissing the complaint of plaintiff-appellant, Sarame Raynolds Strong, as against the defendants-appellees, William H. G. France and the National Association for Stock Car Auto Racing, Inc. (NASCAR), following an order granting appellees’ motion for summary judgment pursuant to Rule 56(c). The complaint alleges violations of federal securities laws stemming from an enterprise involving the creation of a corporation, Sportscaster, Incorporated, for the operation of a “closed circuit” radio broadcasting system at sporting events (golf matches, auto races, horse races) and the rental of small receivers to spectators to provide them with comments, interviews and additional information on the events. The chief promoter of the venture was the defendant Oscar Fraley. Shortly after the complaint was filed, the deposition of Sally Strong, the plaintiff, was taken, followed by answers of France, both individually and as president of NASCAR, and the defendants Fraley and H. Earle Barber to interrogatories submitted by plaintiff, and affidavits of plaintiff and France, with numerous exhibits. On the basis of these documents, France and NASCAR moved for dismissal and summary judgment. This motion was denied, “expressly without prejudice”, following a hearing on January 13, 1969 at which the court stated that he denied the motion with “great reluctance” and “unless a very good showing was made” by the plaintiff on further discovery “the motion to dismiss ought to be granted.” In March, 1969 the depositions of France, Fraley and Barber were taken. There was no further discovery, and after a lapse of ten months the motion for summary judgment was renewed. An order was entered July 3, 1970 granting the motion, the court finding that “the acts attributed to defendants France and NASCAR are so remote from the plaintiff that no genuine issue as to any material fact exists which would support liability as to them.” In its order the trial court recognized that while, in ruling on motions for summary judgment, “all inferences of fact must be drawn in favor of the party opposing the motion (United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) and * * * the moving party has the burden of showing that he is entitled to judgment as a matter of law, (3 Barron and Holtzoff, Rules Edition, 149), it is also true that ‘the opposing party . . . must show that evidence is available which would justify a trial . . . (ibid.). And ‘courts should not be unduly reluctant to grant summary judgment when a trial would serve no useful purpose and the movant is entitled to judgment as a matter of law.’ (6 Moore’s Federal Practice para. 56.02(1)).” The motion here was supported by affidavits, answers to interrogatories, and depositions as provided in Rule 56(e) of the Federal Rules of Civil Procedure. Accordingly appellant “may not rest upon the mere allegations of * * * (her) pleading,” but her response, by affidavits or otherwise, “must set forth specific facts showing that there is a genuine issue for trial.” Appellant contends on this appeal that: “ * * * there are four separate but interrelated roles played by Mr. France and NASCAR on which their liability to Mrs. Strong is based. These are: (1) that Mr. France agreed to be a director of the Defendant corporation, Sportscaster, Inc., which issued stock to Mrs. Strong; (2) that France acted as a promoter of the venture and agreed to invest in the Défendant corporation; (3) that France and NASCAR were aiders and abettors of Defendants Fraley and Sportscaster, Inc.; and (4) that France and NASCAR were controlling persons of Defendants Fraley and Sportscaster, Inc. In addition, Appellant contends that Appellees’ motion was granted prematurely in that Appellant has not completed discovery.” Factual Background It is clear from appellant’s deposition that she has never met France and has never had any “direct communication either by letter or telephone” with him or anyone at NASCAR. Strong dep. 5, 24. She did not at any time give any money or check to France or NASCAR. Strong dep. 50. Appellant first met Fraley in 1962. She became associated with him in “putting out programs for sporting events”, “put up money” for a closed circuit television broadcast of the Liston-Clay fight and “advanced money” for a golf tournament. She also “lent him money for himself when he was in between jobs”, mentioning one loan of $8,000.00 in early 1964 and another of $1,500.00 in 1963. Strong dep. 6-9. Early in 1965 at a golf tournament in Miami, Florida, appellant and Fraley met Tom Burke, who was broadcasting at the tournament. According to appellant, she next met Fraley and Burke at a tournament in Pennsylvania where Fral-ey and Burke were “forming their own company”, and two weeks later in New York, where both discussed the business venture with appellant and solicited an investment from her. Strong dep. 9-12. Appellant testified that in this conversation Fraley said “he would need anywhere between 50 (sic) and $100,000 for the whole thing to go.” Appellant agreed to “advance money if he needed it for the company.” She “didn’t put any limit on it because he said that he was going to get some of his wealthy friends to put up the money and that I would put up- — he was not going to put up any money himself. But that I would put up as if it was his money and I would have a share in the partnership.” Strong dep. 17. At the same meeting Fraley told appellant that he had talked to France and “could get the contracts for racing.” She also testified that about three weeks later, when appellant was in Beirut, Lebanon, Fraley phoned her that France “thought this was wonderful and that it would go”, and he would use his connections with different people involved, with the Racing Association and “would put a great deal of money in the company.” Strong dep. 12-13. From time to time thereafter Fraley made a number of written and oral statements to appellant to the effect that France and NASCAR had agreed to support, promote and heavily invest in Sportscaster. There is no evidence that either France or NASCAR were aware of or authorized any of these statements. Other letters from Fraley to appellant cast some doubt on France’s participation in the venture. On October 25, 1965 NASCAR and Fraley entered into a written contract whereby “NASCAR subject to the further approval by the respective promoters of NASCAR events, does hereby grant to Oscar Fraley and/or his Corporate Assignee, Racecaster; Inc., an exclusive contract for an on-course gallery communication system for a period of five years, provided only that Fraley shall in fact service such first event by not later than June 30, 1966.” It was understood that the agreement “may be terminated by NASCAR at any time.” On March 18, 1966 France, as president of NASCAR, wrote a letter addressed “To Whom it May Concern” reading: “This letter is to serve as confirmation that Mr. Oscar Fraley has a five year agreement with NASCAR for his sportscaster receiving system at the Association’s races, subject to his agreements with the track operators. “This is to further confirm that, to my knowledge, Mr. Fraley is a man of unquestionable character and reliability. He has a vast reputation in the field of sports, having served as syndicated columnist for United Press International and Associated Press, the nation’s two largest wire services.” The certificate of incorporation of Sportscaster, Incorporated was filed on October 18, 1966 listing Oscar Fraley, H. Earle Barber, an attorney employed by Fraley, and Beatrice S. Smith, Bar-' ber’s secretary, as incorporators and directors. Fraley was named president, Smith, vice-president, and Barber, secretary-treasurer. Subsequently stock certificates were issued to appellant (for an investment of $9,000) and six other persons (for investments totaling $18,000). No stock was issued to France or NASCAR. No license was obtained from the Federal Communications Commission for the radio transmission and the enterprise has never been in operation. Appellant claims that she invested a total of $72,699.41 in Sportscaster. It appears from her deposition, however, that this includes approximately $25,000 advanced to Fraley prior to learning of the proposed Sportscaster venture. Strong dep. 8-9. With this background we turn to a consideration of the four bases of alleged liability on the part of France and NASCAR. France as Director France admits that he told Fraley “when he got his corporation going, he could use my name, and I would serve as director on the company.” France dep. 87. Fraley, on March 17, 1966 wrote France to “acknowledge receipt from you of $1,000.00 for stock in Sportscaster, Inc., and permission to use y our (sic) name on the Board of Directors.” Plf. Ex. 4, France dep. There is no evidence that France was ever appointed a director, or acted as one, or that Fraley ever “got his corporation going.” There can be no fiduciary liability where there is no duty, express or implied, to act as a fiduciary. Appellant’s reliance on Moerman v. Zipco, Inc., 302 F.Supp. 439, 447 (E.D.N.Y.1969) is misplaced. There the persons held liable had “insisted on being members of the board” of directors, had sold stock, and had signed board minutes and registration statements. France and NASCAR as Promoters Appellant argues that France promoted Sportscaster by offering to use his name as director; by signing a letter of personal recommendation for Fraley addressed “To Whom it May Concern”, attesting to the NASCAR-Sportscaster five year contract; and by providing personal assistance. Appellant argues that NASCAR promoted Sportscaster by sending letters to racetrack operators recommending Sportscaster, “enclosing the NASCAR-Sportscaster contract, a summary of the venture, * * * and possibly portions of a brochure which promised a high return to the investor on a fixed schedule of events.” Appellant concludes: “The clear implications of these materials are that: (1) Sportscaster had an FCC-approved broadcast frequency; and (2) that Sportscaster was prepared to proceed with broadcasting NASCAR’s entire 1966 schedule, which would bring substantial profits to any investor. Both representations were false.” Appellant has cited no case, and we find none, which predicates liability as a promoter on such limited activity so far removed from the person claiming damage. McCandless v. Furlaud, 296 U.S. 140, 56 S.Ct. 41, 80 L.Ed. 121 (1935) cited by appellant for the proposition that “a pre-incorporation promoter is a fiduciary”, involved an elaborate scheme to defraud, engineered by the “promoter”. There is no evidence of such a scheme here engineered by either France or NASCAR, or of any facts upon which France or NASCAR’s liability to Strong as a “promoter” of Sportscaster can be predicated. France and NASCAR as Aiders and Abettors Appellant relies upon the same facts to establish liability as an aider and abettor. “An aider and abettor may be liable for damages even though his assistance of the scheme consists of mere silence or inaction.” Anderson v. Francis I. duPont and Co., 291 F.Supp. 705, 709 (D.Minn.1968). That liability arises, however, only when a duty to disclose has arisen. Securities and Exchange Commission v. Texas Gulf Sulphur Co., 401 F.2d 833, 848, (2 Cir. 1968) (en banc) cert. denied 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756. The duty to disclose may arise upon the possession of “inside information” as in Securities and Exchange Commission, supra; or upon “knowing assistance of or participation in a fraudulent scheme” as in Anderson, supra; or upon a consent and approval of fraudulent practices by a director, as in Sprayregen v. Livingston Oil Company, 295 F.Supp. 1376, 1378 (S.D.N.Y.1968). There are no facts in this case which would impose any duty of disclosure on either France or NASCAR or any activity or inactivity on the part of either which can be made the basis of liability to the appellant as an aider and abettor of Fraley’s misrepresentations to Strong. France and NASCAR as “Controlling Persons” 15 U.S.C. § 78t(a) provides: “(a) Every person who, directly or indirectly controls any person liable under any provision of this title -x- * -x- or 0f any ruie or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.” This section has been held to require “only some indirect means of discipline or influence short of actual direction to hold a ‘controlling person’ liable.” See Myzel v. Fields, 386 F.2d 718, 738 (8 Cir. 1967) cert. denied 390 U.S. 951, 88 S.Ct. 1043, 19 L.Ed.2d 1143 (1968). This circuit has held that the test of liability is that “the controlling person ‘ * * * must have acted in bad faith and directly or indirectly induced the conduct constituting a violation or cause of action.’ ” Hecht v. Harris, Upham and Co., 430 F.2d 1202, 1210 (9 Cir. 1970) quoting Kamen v. Paul H. Aschkar and Company, 382 F.2d 689, 697 (9 Cir. 1967) cert. denied 393 U.S. 801, 89 S.Ct. 40, 21 L.Ed.2d 85. Appellant relies upon the facts already recited to establish France’s and NASCAR’s liability as controlling persons. Those facts do not support appellant’s conclusion. There is no evidence that either France or NASCAR acted in bad faith or directly or indirectly induced Fraley’s conduct toward the appellant. Finally, it is clear that appellant made substantial payments to Fraley, some of which she seeks to recover in this action, prior to the Sportscaster venture and agreed to advance money “as needed” prior to Fraley’s representation that France and NASCAR would also invest heavily in the venture. There is no evidence that France or NASCAR authorized any of the misrepresentations made by Fraley to appellant or that in continuing to provide funds she relied upon any actual conduct of either France or NASCAR. From a review of all of the affidavits, answers to interrogatories, depositions and exhibits we conclude that the trial judge was correct in finding that “the acts attributed” to appellees “are so remote from the (appellant) that no genuine issue as to any material fact exists which would support liability as to them.” Affirmed. . The action was instituted against nine named defendants, including the two ap-pellees, and 43 unknown parties. . Specifically, Section 17(a) of the Securities Act of 1933 (15 U.S.C. § 77q(a)), Section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)), and Securities Exchange Commission Rule 10b-5 (17 C.F.R. 240.10b-5). . There is some dispute, not material here, as to who first proposed the venture. . The action was commenced in the name of Sally Strong. Subsequent to her deposition and affidavit, the court on plaintiff’s motion ordered that the caption be changed to conform with her legal name, Sarame Raynolds Strong. . Plaintiff was not represented at the taking of Fraley’s deposition. See note 7, infra. . As this court said in Doff v. Brunswick Corporation, 9 Cir., 372 F.2d 801, 805 (9 Cir. 1967) cert. denied, 389 U.S. 820, 88 S.Ct. 39, 19 L.Ed.2d 71: “Where, on the basis of the materials presented by his affidavits, the moving party, if at trial, would be entitled to a directed verdict unless contradicted, it rests upon the opposing party at least to specify some evidence to show that such contradiction is possible. . The burden of coming forward with specific controverting facts shifts to the opponent. . . . It is his duty to expose the existence of a genuine issue which will prevent the trial from being a useless formality.” Citations omitted. See also Town House, Inc. v. Paulino, 381 F.2d 811, 814 (9 Cir. 1967); First Nat’l Bank v. Cities Service, 391 U.S. 253, 288, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968); Lundeen v. Cordner, 356 F.2d 169, 170 (8 Cir. 1966) cited in Town House, Inc. v. Paulino, supra, 381 F.2d at 814. . We find no merit in appellant’s contention that the motion was granted prematurely. Fraley’s deposition was taken in Miami, Florida on Friday afternoon, March 21, 1969. Appellant’s counsel was not present, presumably through some misunderstanding. The depositions of France and Barber were taken on Monday, March 24. Appellant’s counsel was advised that Fraley would be available for further deposition the following day and was given a transcript of Fraley’s testimony, which he used in examining Barber. He stated that he did not intend to take Fraley’s deposition because of Fraley’s “default”. Barber dep. 58-68. Sixteen months elapsed between the taking of these depositions and the entry of the order granting appellees’ motion. . France stated in his answer to interrogatories that he “never offered or induced or attempted to sell any interest in Sportscaster to any person”, and in his affidavit that neither he nor NASCAR ever received any money or other consideration directly or indirectly from appellant or any other person in connection with the purchase or sale of securities in Sportscaster, Incorporated. . Appellant testified in her deposition that the advance for the Liston-Clay fight and this personal loan to Fraley are included in her claim in this case. . For example, Fraley wrote appellant on January 3, 1966: “If the thing falls through with France and the vending guy, I’m going to see John Mac Arthur in Palm Springs Gardens. But this I promise you ■ — -I’m going to put it over and soon.” Defts. NASCAR and France Ex. 4. . On June 2, 1966, Fraley wrote France requesting a “six months extension in writing” beyond the June 30, 1966 deadline. France testified that he took no action in response to the request, hut “just discarded it.” France dep. 86-87. . France also admitted having agreed to invest $1,000, but denied ever having done so. France dep. 87. Fraley also testified that neither France nor NASCAR had ever invested any money in Sportscaster, Inc. Fraley dep. 49-50. . The personal assistance was alleged to consist of an airplane trip to Detroit, denied by both France and Fraley, France dep. 63, Fraley dep. 58-59; and a Detroit automobile “contact” to provide a free Dodge van for the broadcasting unit. A NASCAR employee did suggest the name of a Dodge employee to contact, which Fraley did and was given the use of a Dodge van. France dep. 56, 85-86; Fra-ley dep. 59-60. . Appellant argues that France and NASCAR, stood to make a potential profit of $32,000 on the Daytona contract. Using the figures in the “promotional material” and the NASCAR-Sportscaster contract for the Daytona race, the maximum profit potential from that race would have been $1,000 to France and NASCAR. Plf. Ex. No. 16 France dep.

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ISLAND EQUIPMENT LAND CO., a corporation, and Pacific Retread, Inc., a corporation, Plaintiffs-Appellants, v. GUAM ECONOMIC DEVELOPMENT AUTHORITY, a public corporation, et al., Defendants-Appellees. No. 71-2108. United States Court of Appeals, Ninth Circuit. Feb. 27, 1973. William C. Anderson (argued), Agana, Guam, for plaintiffs-appellants. Walter S. Ferenz (argued), of Barrett, Ferenz, Bramhall & Klemm, Agana, Guam, Gerald E. Stinson, Asst. Atty. Gen. (argued), Richard D. Magee, Asst. Atty. Gen., Vincent T. Perez, Atty. Gen., Agana, Guam, E. R. Crain, Agana, Guam, for defendants-appellees. Before BROWNING, WRIGHT, and CHOY, Circuit Judges. PER CURIAM: Appellants sue as Guam taxpayers and citizens to set aside a 90-year sublease of certain public lands by defendant Guam Economic Development Authority (GEDA) to defendant Dillingham Corporation for use as a site for a shopping center. Acting pursuant to statutory authority, the Governor of Guam leased the property to GEDA in 1966 for a period of 50 years on condition (1) that the property be “administered, maintained and used as light industrial areas and for no other purpose”; and (2) that it be sublet only “for light industrial use.” Consideration for the original lease was $1.00 and GEDA’s promise to use the property in “the promotion of the economic development of Guam.” In 1967 the Governor agreed to an amendment to the lease adding additional land to the leasehold and extending the lease term to 99 years. Early in 1969 the Guam legislature terminated the Governor’s authority to lease public lands. Thereafter, on September 15, 1969, the Governor agreed to a “Clarifying Amendment” to the lease providing that GEDA “may use the demised land for any purpose included within and treated as an allowable use under M-l Light Industrial zone as determined in accordance with the zoning laws of Guam existing as of date of the amendment.” Under Guam zoning law, commercial uses, including use as a shopping center site, are allowable in light industrial zones. The sublease to Dil-lingham Corporation followed. Appellants claim (1) that the 1967 amendment adding to the leasehold and extending the term of the lease is void for want of consideration; (2) that the 1969 “Clarifying Amendment” is void because in excess of the Governor’s authority; and (3) that the sublease is therefore void because GEDA lacked authority to sublease the lands for the term and use provided. The district court ruled that appellants had standing to bring this suit, but granted summary judgment against them on the merits. The court held that the promise to use the additional lands to promote Guam’s economic development was adequate consideration for the 1967 amendment, and that if the Governor lacked authority to execute the 1969 amendment it would make no difference because the amendment “does not alter the lease in any material manner,” and is “nothing more than a statement of clarification of a term and condition already included in the original lease.” The court based the latter conclusion on the ground that the term “light industrial areas” in the lease meant the same as the term “M-l Light Industrial Zone” in the zoning laws of Guam. We held in Reynolds v. Wade, 249 F.2d 73, 76-77, 17 Alaska 401 (9th Cir. 1957), that the rule of federal taxpayer standing announced in Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923) (see also Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968)), was not applicable to a suit by a territorial taxpayer against his territorial government because a territorial taxpayer, like a state taxpayer, has a substantially greater pecuniary interest in his government than a federal taxpayer. Accord, Buscaglia v. District Court of San Juan, 145 F.2d 274, 284 (1st Cir. 1944). Whether Guam citizen-taxpayers have standing to question acts of the territorial government is a matter of purely local concern. The District Court of Guam has held that appellants have such standing, and “[t]he decision of a territorial court on a matter of purely local public policy should be sustained unless there is no tenable theory on which the decision can be based.” Capital Insurance & Surety Co. v. Globe Indemnity Co., 382 F.2d 623, 626 (9th Cir. 1967). See Bonet v. Yabucoa Sugar Co., 306 U.S. 505, 509-510, 59 S.Ct. 626, 83 L.Ed. 946 (1939); San Geronimo Development Co. v. Treasurer of Puerto Rico, 233 F.2d 126, 133 (1st Cir. 1956). The district court’s decision does rest upon a “tenable theory.” While it is true, as appellees point out, that the traditional rationale for a taxpayer suit is that the taxpayer-plaintiff has sustained pecuniary loss because the challenged government action wasted public funds derived from taxation (see Lyon v. Bateman, 119 Utah 434, 228 P.2d 818, 823 (1951); Henderson v. McCormick, 70 Ariz. 19, 215 P.2d 608, 611 (1950)), it is also true that a clear, if less generally accepted, line of authority supports the theory that a citizen-taxpayer has standing to question the lawfulness of the sale or lease of public property without showing pecuniary harm, and, indeed, even though the sale or lease may be economically advantageous. See, e. g., Lien v. Northwestern Engineering Co., 74 S.D. 476, 54 N.W.2d 472 (1952); Colwell v. City of Great Falls, 117 Mont. 126, 157 P.2d 1013 (1945); City of Bessemer v. Huey, 247 Ala. 12, 22 So.2d 325 (1945); City of Shreveport v. Kahn, 194 La. 55, 193 So. 461 (1939); Hanlon v. Levin, 168 Md. 674, 179 A. 286 (1935). We therefore turn to the merits. We agree with the district court’s summary rejection of appellants’ attack upon the 1967 amendment. There is no dispute of fact material to this issue, and, as a matter of law, GEDA’s promise to use the additional lands to further the economic development of Guam for the additional term was sufficient consideration. We disagree, however, with the court’s summary rejection of appellants’ challenge to the validity of the 1969 amendment. As to this issue, we think the record was not ripe for summary judgment. Appellees failed to carry their burden of establishing that no triable issue of'fact was presented as to whether or not the parties to the original lease intended to authorize GEDA to sublet the property for use as a site for a shopping center. The language of the lease authorizing GEDA to sublet the property “for light industrial use” is hardly a clear and unambiguous authorization to sublet as a shopping center site. The only other possibly relevant material before the court was certain letters to GEDA from businessmen, including officers of appellants, protesting use of the land for the shopping center development. These letters, dated in January 1968 and July and August 1969, were offered by appel-lees only to show that appellants were aware of the planned use. All of the letters were written long after the execution of the original lease, and, in any event, reflect only the knowledge of appellants, not the intent of the parties to the lease. Moreover, the author of one of the letters objected to the proposed development on the precise ground that use of the property for a shopping center bore no relationship to the authorized use for “light industrial” development. Since appellees failed to demonstrate the absence of any material issue of fact, appellants were not obliged to file counter-affidavits. “Where the evidentiary matter in support of the motion does not establish the absence of a genuine issue, summary judgment must be denied even if no opposing evidentiary matter is presented.” Advisory Note of 1963 to Subdivision (e), Rule 56, quoted in 6 Moore’s Federal Practice 2823; see Byrnes v. Mutual Life Insurance Co., 217 F.2d 497, 501 (9th Cir. 1954). The judgment is reversed. The cause is remanded to the district court with instructions to enter an order under Federal Rules of Civil Procedure 56(d) regarding the issues raised with respect to the 1967 amendment, and to conduct such further proceedings as may be required to resolve the issues of fact and law raised with respect to the 1969 amendment. . Appellants do not assert a claim against third parties on behalf of the Government of Guam, as in Government of Guam ex rel. Camacho v. Bird, 398 F.2d 314 (9th Cir. 1968), and Salas v. United States, 384 F.2d 922 (9th Cir. 1967); they challenge the lawfulness of acts of government itself. Appellees’ reliance upon the bar of § 526(7) of the Guam Code of Civil Procedure seems misplaced in view of its limitation to action by “an authorized person.” . The letter reads, “It is our understanding that the property you propose to develop as a shopping center was acquired by you for the sum of $1 for use as light industrial development and to induce industry to come to Guam. There is no relationship or industrial purpose served by using the property as a shopping center.”

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Nancy K. EARLY et al., Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee. No. 71-2521. United States Court of Appeals, Ninth Circuit. Feb. 22, 1973. Stephen S. DeLisio (argued), Edward A. Merdes, of Merdes, Schaible, Staley & DeLisio, Fairbanks, Alaska, Robert A. Parrish, Fairbanks, Alaska, for plaintiffs-appellants. ' Walter H. Fleischer, Atty. (argued), Alan S. Rosenthal, Ronald R. Glanz, Robert Greenspan, Morton Hollander, Attys., Dept, of Justice, Washington, D. C., G. Kent Edwards, U. S. Atty., Stephen Cooper, Asst. U. S. Atty., Fairbanks, Alaska, for defendant-appellee. Before MERRILL, DUNIWAY and TRASK, Circuit Judges. TRASK, Circuit Judge: Only questions of damages are at issue in this Federal Tort Claims Act proceeding, 28 U.S.C. § 1346(b) et seq. The plaintiffs who are husband and wife recovered an aggregate of $380,000 for personal injuries and related claims. They appeal from the court’s award because they believe it was not enough; the government cross appeals for the opposite reason. The injury occurred when Mrs. Early fell down a flight of stairs at Eielson Air Force Base, striking her head upon the concrete floor below. She was immediately hospitalized and discharged two days later. Because of persistent headaches she was admitted to another hospital a day and a half after her first release where she remained for nine days undergoing tests. Approximately two months after her second trip to the hospital she returned for a reevaluation where results of tests were normal. On the issue of damages the trial court heard approximately one thousand pages of testimony. The family history of Mrs. Early was developed from an early age and her life habits and personality traits before and after the injury were related in detail. On the date of the injury, September 29, 1967, she was 24 years old and three children had been born of her marriage to Sergeant Gar-nett C. Early. The court found that Mrs. Early suffered damage to the central nervous system and particularly to the brain as a proximate result of the fall occasioned by the negligence of the United States. These injuries altered her personality and have caused much pain and suffering. Finding 36e of the trial court is as follows: "c. That Nancy Early Is entitled to recover past damages as well as future damages In a reasonable amount for the foregoing, computed on the basis of her life expectancy, which Is 49 years, as follows: 1. Pain and suffering, all causes, past and future $225,000.00 2. Loss of sense of smell and taste, past and future 20,000.00 3. Loss of enjoyment of sex, past and future 30,000.00 4. Psychotic conditions, Including personality change and schizophrenic reaction, past and future 20,000.00 5. Future medical care (Including psychiatric) 15,000.00 6. Future medications 25,000.00 7. Future household assistance 15,000.00 Total damages to Nancy Early $350,000.00' An award of $30,000 was made to her husband, Garnett C. Early, for loss of consortium, past and future. Appellants insist that damages are inadequate. Their expert witness, a neurologist, testified that the salary for a nurse to assist the injured plaintiff in her household duties and to provide nursing care would be “roughly $500 per month.” Because there was testimony that during some headache attacks Mrs. Early would be totally disabled, he further stated that nursing would require three eight-hour shifts costing $1,500 per month. Based on this figure over Mrs. Early’s life expectancy, appellants calculated that an award for household assistance and nursing care should be $894,240. This same method of calculation was used to assert a claim of $127,750 for future psychiatric care, $44,712 for future medications, $61,300 for past loss of earning capacity and $766,600 for future loss of earning capacity. There was no expert testimony to dispute these estimates. The testimony did not bear out such a mathematical computation, however, as it showed that Mrs. Early did not employ a housekeeper or nurse full time, let alone on 24-hour duty; that she did not regularly consult psychiatrists; and that she was not completely disabled from working should she desire to do so. On the basis of conflicting evidence, the court made its own determinations and we cannot say they were clearly erroneous. As stated in County Asphalt, Inc. v. Lewis Welding & Engineering Corp., 444 F.2d 372, 378 (2d Cir.), cert. denied, 404 U.S. 939, 92 S.Ct. 272, 30 L.Ed.2d 252 (1971): “When it comes to finding facts from the evidence, juries enjoy a near-total independence. Neither a court, The Conqueror, 166 U.S. 110, 131-133, 17 S.Ct. 510, 41 L.Ed. 937 (1897), nor a jury, Head v. Hargrave, 105 U.S. 45, 49, 26 L.Ed. 1028 (1881), is bound to accept an expert witness’ opinion, either as to whether the contract specifications were fulfilled or as to the amount of damages, regardless of whether he is in any way contradicted or impeached.” Here there was much more evidence bearing on damages than the testimony of the neurologist. There was the testimony of the plaintiffs themselves and that of other witnesses called by both parties. All of the testimony was relevant on the damage issue. The last argument advanced by appellants is that the court erred in failing to make an award for loss of affection and services sustained by the three children of appellants. Neither statute nor court decision in Alaska provides for such an award, although none denies it. In by far the majority of jurisdictions which have passed upon the question, such a claim has been rejected. Pleasant v. Washington Sand & Gravel Co., 104 U.S.App.D.C. 374, 262 F.2d 471 (1958); Meredith v. Scruggs, 244 F.2d 604 (9th Cir. 1957); Turner v. Atlantic Coast Line R. R., 159 F.Supp. 590 (N.D.Ga.1958); Hoffman v. Dautel, 189 Kan. 165, 368 P.2d 57 (1962); Jeune v. Del E. Webb Construction Co., 77 Ariz. 226, 269 P.2d 723 (1954). Under such circumstances we accord great deference to the views of the trial court as to what the law of Alaska would be in the event the matter was presented and passed upon there. West v. Morrison-Knudsen Co., 451 F.2d 493 n. 5 (9th Cir. 1971); Turnbull v. Bonkowski, 419 F.2d 104 (9th Cir. 1969); Bellon v. Heinzig, 347 F.2d 4 n. 3 (9th Cir. 1965). He made no such award although he was importuned to do so, and again we cannot say that his judgment was clearly erroneous. The government, on its cross appeal, first urges the excessiveness of the trial court’s award for pain and suffering. In order for an award of damages for pain and suffering to be set aside as inadequate or excessive under the Federal Tort Claims Act, one must look to the law of the state where the cause of action arose. United States v. Sutro, 235 F.2d 499 (9th Cir. 1956). Alaska, consistent with the general rule, holds that to be reversible, such an award must be “manifestly unjust, such as being the result of passion or prejudice or a disregard of the evidence or rules of law.” Beaulieu v. Elliott, 434 P.2d 665, 676 (Alas.1967). We cannot say that, applying such a test, the award of the trial court was improper. The other claim of the government on cross appeal is that the trial court erroneously failed to reduce to its present worth its award of $55,000 for future medical, housekeeping and medication expenses. (Items 5, 6, and 7). The government did not submit evidence on computation of future awards and we are unable to say that the amounts fixed by the court .are clearly erroneous in view of all of the evidence. We therefore reject the government’s attack made upon the amounts of those awards based upon alleged failure to discount them. The judgment is affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Frank Peter TERESI, Defendant-Appellant. No. 72-1009. United States Court of Appeals, Seventh Circuit. Argued Nov. 22, 1972. Decided March 2, 1973. Douglas R. Carlson, Chicago, Ill., for defendant-appellant. James R. Thompson, U. S. Atty., William T. Huyck and Theodore T. Scudder, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee. Before DUFFY, Senior Circuit Judge, STEVENS, Circuit Judge, and ESCH-BACH, District Judge. . District Judge Jesse E. Esclibach of the Northern District of Indiana is sitting by designation. ESCHBACH, District Judge. Defendant was convicted after a bench trial of a charge of wilfully refusing to submit to induction into the Armed Forces in violation of 50 U.S.C. Appendix § 462. His appeal raises four questions: (1) whether the local board should have reopened his classification to consider his claim for a hardship deferment, (2) whether the board’s actions constituted a de facto reopening of his classification, thus cancelling his prior order to report for induction, (3) whether the induction order was invalidated by successive postponements granted by the board, contrary to applicable regulations, and (4) whether the use by the appeal board of a resumé of defendant’s Selective Service file deprived him of due process and rendered invalid his I-A classification and the induction order based thereon. We have concluded that the conviction must be affirmed. On May 3, 1966, defendant registered with his local board. His responses to questions contained in a Classification Questionnaire indicated that he did not claim to be a conscientious objector, that he suffered from no disqualifying physical condition, and that he had no family or other problems. He later informed the board that he had enrolled in college and was granted a II-S student deferment. On January 16, 1969, shortly after defendant’s withdrawal from college he was reclassified I-A. Defendant appealed this classification on the basis of his claims that he suffered from a disqualifying medical condition, despite the fact that he had not yet received an Army physical examination. The appeal board classified defendant I-A on June 16, 1969. On August 18, 1969, defendant was given the customary physical examination, including a consultation with a specialist regarding his claims of disqualification. All medical papers were then reviewed by the Surgeon General, and, on October 15, 1969, the local board notified defendant that he remained physically qualified for induction. On November 18, 1969, defendant was ordered to report for induction on December 1, 1969. On the date for induction, defendant’s wife telephoned the local board to explain that defendant’s car had broken down in Michigan. On December 11, 1969, the board notified defendant that his induction would be postponed until the first induction call after January 1, 1970. On January 5, 1970, the board sent to defendant a second notice, rescheduling his induction for January 19, 1970 pursuant to the earlier postponement notice. Defendant again failed to report on January 19, 1970, this time without explanation. During February and March, 1970, the board was unable to locate defendant. On April 13, 1970, defendant wrote to his board, acknowledging his failure to report for the second induction. He explained that he and his wife had fought in late December and then separated. On January 2, 1970, defendant had left and traveled in the West. On April 21, 1970, the local board mailed a notice to defendant, rescheduling a third date of May 11, 1970 for his induction. Three days later, the board received for the first time defendant’s request for a hardship deferment (III— A) and immediately mailed a Dependency Questionnaire to be filled out and returned by defendant. Defendant informed the board that he was not living with his wife and that her address was unknown; his eight-month-old daughter was living with him in his home. He stated that his wife' had been taking drugs and was not capable of taking care of their daughter. Prior to the separation in December and defendant’s subsequent disappearance, he and his wife and daughter had been living with defendant’s parents. After defendant’s disappearance, his wife and daughter moved to the home of her parents. Defendant stated that while he was away, his wife left her parents’ home from time to time, including a period of six days while she was away with another man. During these times, she left her daughter with neighbors. When defendant returned from his travels, a former employer rehired him as a die-cutter. While defendant worked ten hours a day, a good friend served as babysitter. Defendant, on the form provided by the board, listed a group of unidentified bills totaling $1,302 and monthly expenses of $326. He stated his earnings were $160 per week. He claimed that his wife was unfit to take custody of their child, that her parents and his father worked, and that his mother could not care for the child because she had been having epileptic fits. A note from defendant’s mother-in-law attached to the questionnaire stated that her daughter was emotionally unable to care for the child. Following receipt of the foregoing information, the board asked defendant to appear for an interview on June 11, 1970. On the basis of that interview and a review of defendant’s file, the board decided not’to cancel defendant’s induction notice. On June 12, 1970, the board, in a letter to defendant, informed him of its decision. On June 19, 1970, the local board issued an order rescheduling a fourth induction date for July 22, 1970. On July 17, 1970, defendant wrote to the board requesting SSS Form No. 150 for conscientious objectors. He stated that he did not previously know that he could apply for several deferments. On the same date, defendant’s induction was postponed until further notice and he was mailed the appropriate form to be filled out and returned. Defendant returned the completed form on August 17, 1970. On August 27, the board reviewed defendant’s file and, on August 31, wrote to defendant that all evidence had been considered and his classification had not been reopened. A fifth notice was mailed to defendant on September 4, 1970, rescheduling his induction for September 17, 1970. Defendant reported on that date but refused to submit to induction. I. Defendant first contends that his classification should have been reopened upon the presentation of what he claims was a prima facie claim for a hardship deferment. Selective Service regulations provide that where an induction order has already been issued, reopening may occur under the following conditions: (1) Facts are presented which were not considered when the registrant was classified; (2) such facts, if true, would justify a change in the registrant’s classification; and (3) the local board specifically finds there has been a change in the registrant’s status resulting from circumstances over which the registrant had no control. 32 C.F.R. § 1625.2 (1972). The requirement that a local board must have a “basis in fact” for an original classification, Dickinson v. United States, 346 U.S. 389, 74 S.Ct. 152, 98 L.Ed. 132 (1953), “is equally applicable to the action of the board in determining whether or not changed conditions justify a reopening of the registrant’s classification and consideration of his claim to a different classification.” United States v. Ransom, 223 F.2d 15, 17 (7th Cir. 1955); see also Woo v. United States, 350 F.2d 992, 996-997 (9th Cir. 1965); Radel v. Volatile, 312 F.Supp. 1300, 1303 (E.D.Pa.1969). Thus, if the board had a basis in fact for concluding that any one or more of the above-stated conditions for reopening was not satisfied, then its refusal to reopen defendant’s classification may not be overturned. We think that such a basis in fact did exist at least with respect to the conclusion that there had been no change in defendant’s status resulting from circumstances beyond his control. Defendant’s conduct in voluntarily absenting himself for a period of some three months was a factor which clearly negatived any claim that he had no control over changes which may have occurred in the interim. It was primarily during defendant’s prolonged and unexplained absence that the circumstances relating to his wife’s alleged lack of fitness to care for their daughter arose. An examination of defendant’s file reveals that whatever conditions of hardship may have developed subsequent to defendant’s original I-A classification were caused in large part by his own conduct. In addition to the absence of circumstances over which defendant had no control, the board’s refusal to reopen was also justified by defendant’s failure to present a prima facie case for reclassification. In his request for a hardship deferment defendant claimed that his wife had been leaving their child with neighbors and that he was requesting the deferment “out of necessity to support and care for my child”. However, although he stated that the child was living with him in his home, he was working ten hours a day as a die-cutter while he left his daughter to be taken care of by a friend. While he claimed that his wife was unfit to care for the child, he took no steps to obtain custody and did not seek a legal separation from his wife. Moreover, defendant’s claim that he was the only person who was financially or otherwise able to support and care for his child is rebutted by the fact of his disappearance from early January, 1970, until the middle of April, 1970, during which time he was completely out of contact with his family and provided no support, or care for his daughter. Under . these circumstances the board had ample basis in fact for a finding that defendant had failed to present a prima facie case for a hardship deferment. Even if, standing alone, some of defendant’s claims had been sufficient to make out a prima facie case, the board properly considered defendant’s entire file, including reliable information contained therein which conclusively refuted defendant’s claims of extreme hardship. See Mulloy v.. United States, 398 U.S. 410, 416, 90 S.Ct. 1766, 1771, 26 L.Ed.2d 362 (1970); United States ex rel. Luster v. McBee, 422 F.2d 562 (7th Cir. 1970), cert. denied, Luster v. Cooksey, 400 U.S. 854, 91 S.Ct. 74, 27 L.Ed.2d 92 (1970); United States v. Burlich, 256 F.Supp. 906, 911 (S.D.N.Y.1966). II. Defendant contends that the board, while purporting to refuse to reopen his classification, did in fact reopen by inviting him to appear before the board and by deciding the merits of his claims on two occasions. Such a de facto reopening, he claims, cancelled his prior induction orders and gave him the right to a formal personal appearance and an administrative appeal. We find nothing in the record of this case to indicate a de facto reopening of defendant’s classification based upon either the informal interview of June 11, 1970, or the board’s consideration of the merits of defendant’s claims. The interview was granted to defendant as a matter of courtesy so that all possible information relevant to the question of reopening could be considered. The mere granting of such an interview does not constitute a reopening of a registrant’s classification. United States ex rel. McBee v. Luster, supra, 422 F.2d at 568. Defendant points to the following notes of the board based upon his interview on June 11, 1970, to support his contention that a decision on the merits was reached: 2:30 Reg has separated from wife is taking care of 9 mo. child — Friend is taking care of child — is employ as die cutter; the separation not legal, wife on drugs — salary 100 per week —exp $326 per mo — works 10 hrs per day. All info considered and should be re-ordered for induction. Defendant further relies upon the following language in the letter he received from the board subsequent to that interview : Please be advised from your informal interview of 11 June 1970, the Local Board considered the information in your file and the information given at your interview. They did not feel they could cancel your induction notice and reclassify you. Therefore, you will be re-ordered to report for induction with our next call. Although neither the board’s notes nor the letter to defendant contains any reference to a refusal to reopen, the board did state in its letter that it could not cancel defendant’s induction notice. A reopening would have required such cancellation (32 C.F.R. § 1625.14), as well as the issuance of a new classification, even if defendant were placed in the same class he was in prior to reopening (32 C.F.R. § 1625.11). In reviewing the determinations of Selective Service boards, we have “carefully refrained from imposing any requirement that they promulgate a court-like formal finding of fact”. United States ex rel. Hemes v. McNulty, 432 F.2d 1182, 1187 (7th Cir. 1970). Thus, although the findings of the board in this case could have been more explicitly stated, we do not regard the omission of a specific reference either to the refusal to reopen or to the absence of circumstances beyond defendant’s control as conclusive evidence of a de facto reopening. The written findings of the board do not indicate an inquiry into the merits of defendant’s hardship claim to any greater extent than was necessary to determine that a prima facie case was not presented. As indicated above, defendant’s hardship claim was conclusively refuted by information contained in his file and supplemented by the informal interview. No “evaluative determination adverse to the registrant’s claim on the merits”, Mulloy v. United States, 398 U.S. 410, 416, 90 S.Ct. 1766, 1771, 26 L.Ed.2d 362 (1970), was made by the board in this case. Even if the board had made such a determination, the presence in defendant’s file of information conclusively refuting his claim of a change in status due to circumstances beyond his control provided an independent ground for the refusal to reopen. See United States v. Jones, 447 F.2d 589, 592 (7th Cir. 1971). The absence of a specific finding to that effect did not result in a de facto reopening. The board was precluded from reopening unless it specifically found a change in status resulting from circumstances beyond defendant’s control. 32 C.F.R. § 1625.2 (1972). The regulations do not contain a converse requirement of a specific finding of no such change in status before the board may refuse to reopen. For substantially the same reasons, no de facto reopening occurred when the board considered defendant’s claim for conscientious objector status (I-O) in August, 1970. The board stated in its Report of Information on August 27, 1970, as follows: The local board reviewed the complete file of this registrant and felt that he was not sincere in any of the requests that he has made. On August 31, 1970, the local board wrote to defendant as follows: The local board reviewed your file and your SSS Form 150 that was submitted August 17, 1970. All evidence was considered. No change in the registrant’s status resulting from circumstances over which he had no control. The classification was not reopened. It is well settled that consideration by a local board of a registrant’s post-induction order 1-0 claim does not result in a de facto reopening of his classification. Ehlert v. United States, 402 U.S. 99, 91 S.Ct. 1319, 28 L.Ed.2d 625 (1971); United States v. Martin, 452 F.2d 630 (7th Cir. 1971); United States v. Jones, supra; Wright v. Ingold, 445 F.2d 109 (7th Cir. 1971). Since the only claim pending before the board on August 27 was the claim for conscientious objector status, we do not read the board’s reference to “the complete file” and “any of the requests” as a reopening for further consideration of the prior hardship claim. In any event, no new evidence relating to that claim was presented to the board, and the letter of August 31, 1970 stated explicitly that the board found no change in defendant’s status resulting from circumstances beyond his control. III. Defendant next contends that the board’s postponements of his induction were contrary to 32 C.F.R. § 1632.2 (1972) in the following respects: (1) his induction was postponed more than twice and for more than 60 days beyond the second postponement; (2) his induction was postponed, on July 17, 1970, “until further notice”, and for more than 60 days beyond that date; and (3) his induction was postponed four times for reasons other than those authorized by 32 C.F.R. § 1632.2(a). Defendant argues that his original induction order of November 18, 1969, expired 60 days after the postponement of April 21, 1970, because the board was without authority to grant further postponements. He claims that he was prejudiced in that the resulting invalidity of that induction order required the board to apply pre-induction order standards to his III-A and 1-0 claims, under which standards a reopening of his classification would have been required, along with personal appearance and administrative appeal rights. However, every postponement granted defendant by his local board was due to his actions and for his benefit. Under these circumstances it was within the discretion of the board to aid defendant by allowing him more time than the regulations specify. United States v. Benson, 469 F.2d 1356 (7th Cir. November 28, 1972); United States v. Foster, 439 F.2d 29 (9th Cir. 1971). A registrant who has already failed without excuse to report for induction as ordered by his local board, as did this defendant on January 19, 1970, is in a particularly poor position to assert excessive postponements. See United States v. White, 447 F.2d 1124 (9th Cir. 1971), cert. denied, 404 U.S. 1049, 92 S.Ct. 714, 30 L.Ed.2d 740 (1972). In granting defendant several postponements and in considering his belated claims for deferment, instead of reporting him to the U. S. Attorney for prosecution, the local board extended defendant every conceivable courtesy. Therefore, in accordance with 32 C.F.R. § 1632.2(d) (1972), the postponements complained of by defendant operated only to postpone the reporting date and did not render invalid the original induction order of November 18, 1969. IV. Finally, in a completely unrelated argument, defendant contends that the appeal board’s use of a-resumé of his Selective Service file in reviewing his classification on June 16, 1969 was improper and constituted a denial of due process. He argues that the summary was not placed in his file, but was either lost or destroyed, and that therefore he was never informed of its existence and was afforded no opportunity to rebut its contents. Defendant does not claim, however, that the summary was anything more than just that — a summary of material already present in his file. The use of siich summaries by an appeal board promotes efficient review of a large number of cases and, at least where the insertion of extrinsic materials is not alleged, does not violate due process. See United States v. Young, 324 F.Supp. 69, 72-73 (D.Minn.1970). Even if the procedure used by the appeal board were improper, defendant has shown no resulting prejudice. The only claim raised by the defendant in appealing his I-A classification was a claim for deferment based upon physical disqualification. On June 16, 1969, when the appeal board reviewed his classification, however, defendant had not yet been given a pre-induction physical examination. He was subsequently given such an examination, as well as a consultation with a specialist and a review of his medical claims by the Surgeon General. Under these circumstances any defect in the proceedings of the appeal board was cured by this full review of defendant’s claims and could have resulted in no prejudice to him. For the foregoing reasons, the judgment of conviction is affirmed.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellee, v. MAJOURAU et al., Appellants. Nos. 72-2307, 72-2344 and 72-2401. United States Court of Appeals, Ninth Circuit. Feb. 16, 1973. Jerrold M. Ladar (argued), San Francisco, Cal., Keith C. Monroe (argued), James D. Riddet, George H. Chula, Santa Ana, Cal., Russell E. Parsons (argued), Los Angeles, Cal., Marvin S. Cahn, Judd C. Iversen, San Rafael, Cal., for appellants. Shelby Gott, Asst. U. S. Atty. (argued), Michael E. Quinton, Donald P. Shanahan, Asst. U. S. Attys., Harry D. Steward, U. S. Atty., San Diego, Cal., for appellee. Before ELY and TRASK, Circuit Judges, and TALBOT SMITH, District Judge. Honorable Talbot Smith, Senior District Judge, Eastern District of Michigan, sitting by Designation. TALBOT SMITH, Senior District Judge: The defendants before us were charged in two counts with possession of a controlled substance with intent to distribute in violation of 21 U.S.C. § 841(a)(1). Motions to suppress on the grounds, among others, of the “warrant-less search of the defendants and their vehicles” were brought and denied. Trial by jury was waived and the cases, consolidated upon motion, tried upon stipulated facts. Upon the conclusion of the trial, all defendants were found guilty on both counts and all have appealed. Among other claimed errors, it is urged that the motions to suppress were improperly denied, since, it is argued, the search here made was neither a border search, nor supported by probable cause. We regard this issue as dispositive of the case. As to the border search, the appellee-government summarizes from the stipulation as follows: “In the instant case, Inspector Catalan’s suspicions were aroused when the appellants arrived at the Port of Entry at San Luis, Arizona. A search of the vehicle disclosed some wet clothing in the trunk. Further, all of the appellants appeared to be anxious to depart the Port of Entry and the appellant Curtis claimed to be ill but showed no visible signs of illness. “All of these circumstances were related to Customs Agent Land after the vehicle had been allowed to enter the United States. Agent Land knew from experience with prior narcotics smuggling cases that a common method of smuggling narcotics from Mexico into the United States was by wading or swimming across the Colorado River near the Port of Entry at San Luis, Arizona. For this reason he considered the presence of wet clothing in the car suspicious. In addition Agent Land was aware that an investigation was being conducted on the appellant Rafter concerning his activities in relation to the illegal smuggling of narcotics into the United States. “All of these circumstances led to a surveillance of the vehicle containing the three appellants being initiated by Agents Ford, Land and Stephenson. The surveillance began about twelve miles north of the Port of Entry at San Luis, Arizona, at a point approximately two to three miles east of the Colorado River, which constitutes the border between Mexico and the United States, and continued to where the appellants were apprehended. “After beginning the surveillance, the agents observed the vehicle stop at a market in Yuma, Arizona, and the appellant Rafter make a telephone call. The vehicle then proceeded to the Yuma Public Library parking lot where it remained for approximately fifteen minutes. While in the Yuma County Library parking lot, the appellant Rafter got out of the vehicle, walked across the street to an unidentified vehicle, and returned at approximately three minutes, carrying a brown package. The appellants remained in the parking lot for approximately two more minutes and then departed the area. The vehicle was then followed to the point of apprehension.’’ In addition, appellant Rafter points out certain geographical and chronological facts which do not appear challenged; namely, that San Luis (where entrance occurred) is 25 miles south of Yuma, that El Centro is 60 miles from Yuma, and that the stop and search took place 4 miles north of El Centro. Thus, the travelled distance from border contact to the searching point was between 80 and 90 miles approximately. In addition, the time element between border crossing at 2:00 p. m. and search at 5:00 p. m. was some three hours, which included driving time on the road as well as stops made. Upon these facts, again we confront the problem of the border search. It has been examined exhaustively in opinions of this and other courts as well as the legal periodicals, and we need not here attempt further gloss. The sweeping statutory authorization under consideration must be reconciled with the requirements of the Fourth Amendment, United States v. Weil, 432 F.2d 1320 (9th Cir., 1970); United States v. Glaziou, 402 P.2d 8 (2nd Cir. 1968). Herein lies the problem, since the controls exercised cannot be confirmed to the precise geographical line of demarcation between the national sover-eignties if effective enforcement of the act is to be accomplished. Thus, the restriction by the courts to “border searches,” United States v. Weil, supra. We have not, in the past, attempted a delineation of the boundaries of the area within which a border search may be conducted, or any formula of demarcation, if, indeed, such were possible. Rather we have considered in detail the facts of each ease, and have stressed, in decision, the “totality of the surrounding circumstances.” Alexander v. United States, 362 F.2d 379 (9th Cir., 1966). Fortuitous emphasis upon surveillance in certain of the cases led us to point out recently in the Weil case that it is not a sine qua non of a valid “border search” that the contents of a ear when searched must necessarily have been its contents when it crossed the border (if, in fact, it even did), in view of such devices as the transfer of contraband thereat or near thereto. The government relies heavily upon the Weil case, citing it to the argument that search is permissible if the officers “have reasonable grounds to believe that a vehicle in the border area contains a person or contraband that has entered the country illegally.” The argument made is far top broad and unjustified by Weil. No time limitation is thus expressed and the words “border area” merely restate our problem. That the Weil case does not open the door to searches far removed in time or space from the border itself was made clear in United States v. Vigil, 448 F.2d 1250 (9th Cir. 1971), where we cited Weil to the point that “The car searched need not have recently crossed the border if it is ‘reasonably certain’ that it contains goods or persons which have just crossed the border illegally” (footnote added; emphasis in original). At the time of the search this car was remote in both time and space from the border. It had not recently, or “just,” crossed the border. There was no showing whatever that it contained goods which had just crossed the border illegally. There had been no continuous surveillance. Under the totality of the circumstances, the search was clearly illegal. Based upon probable cause the search fares no better. • Here the government paints with a broad brush, reciting to us chronologically the entire sequence of events from the crossing of the border to the final arrest. Thus, the car crossed from Mexico, it contained wet clothing, and appellants “seemed to be abnormally impatient,” a reaction in our judgment not unreasonable in one detained for inspection. Moreover, appellant Curtis “claimed to be sick,” and, in addition Agent Land was told that appellant Rafter was engaged in smuggling contraband. In Yuma, it is added, the appellants made a telephone call, waited in a parking lot and picked up a brown paper bag from another car. Finally, the appellants’ car drove in an erratic manner upon leaving Yuma. These various steps in the journey from border to arrest take on a sinister coloration only upon the theory that a crime has been committed and these are steps in its perpetration. The brown bag, the seeming impatience, the wet clothes, the erratic driving, all add up at the most to mere suspicion. And as to suspicion, the ease of Henry v. United States, 361 U.S. 98, 80 S.Ct. 168, 4 L.Ed.2d 134 (1959), is clear: “Arrest on mere suspicion collides violently with the basic human right of liberty.” Finally, the government seeks to justify on the ground that the “initial stopping of a vehicle can be justified as a routine investigatory stop by law enforcement officers.” The problem here is that this was not a mere routine investigatory stop. The appellants’ car had been followed for some 80 or 90 miles in an approximate two-hour period. It is a fair reading of the record that zealous officers were actively seeking suspected contraband. Moreover, customs agents “are not, like local or state police, general guardians of the public peace.” They are “customs agents, with duties and powers limited to activities of the type that the title implies.” United States v. Jackson, 423 F.2d 506 (9th Cir. 1970); United States v. Blackstock, 451 F.2d 908 (9th Cir. 1971), dissent at 911. The point is without merit. Reversed. The search was illegal and upon the mandate going down the indictment will be dismissed. . Alexander v. United States, 362 F.2d 379 (9th Cir., 1966); Leeks v. United States, 356 F.2d 470 (9th Cir., 1966); Rodriguez-Gonzalez v. United States, 378 F.2d 256 (9th Cir., 1967); Lannom v. United States, 381 F.2d 858 (9th Cir., 1967); Bloomer v. United States, 409 F.2d 869 (9th Cir., 1969); United States v. Jackson, 423 F.2d 506 (9th Cir., 1970), cert. denied 400 U.S. 823, 91 S.Ct. 44, 27 L.Ed.2d 51 (1970); Castillo-Garcia v. United States, 424 F.2d 482 (9th Cir., 1970); United States v. Weil, 432 F.2d 1320 (9th Cir., 1970); United States v. Markham, 440 F.2d 1119 (9th Cir., 1971); United States v. Glaziou, 402 F.2d 8 (2nd Cir., 1968); United States v. Almeida-Sanchez, 452 F.2d 459 (9th Cir., 1971), cert. granted, 1972, 406 U.S. 944, 92 S.Ct. 2050, 32 L.Ed.2d 331. . 21 Rutgers L.R. 513 (1967); 53 Cornell L.R. 891 (1968); 77 Tale L.R. 1007 (1968); 10 Ariz.L.R. 457 (1968); 8 San Diego L.Rev. 435 (1971). . 19 U.S.C. § 482 (1965). . Webster’s Third International Dictionary, Unabridged (1968) defines “Just” as meaning . . . “but a very short time ago” . . . “very recently.” See also, State v. Hinton, 49 La.Ann. 1354, 22 So. 617: “ ‘Just’ as an abverb of time is equivalent to ‘at this moment’ or the ‘least possible time since’ . . .” . cf., Pace v. Beto, 469 F.2d 1389 (5th Cir. 1972), an arrest for a traffic offense. “The officer noticed that Pace was very nervous. His suspicions aroused, the officer first searched Pace’s person for weapons.” After further discussion or the search, the court commented, “Pace’s nervous conduct is not surprising in view of the fact that he had just been arrested, and such conduct by itself could not give rise to probable cause to believe that he had committed any offense other than the traffic violation, cf., Wong Sun v. United States, 1963, 371 U.S. 471, 483, 83 S.Ct. 407, 9 L.Ed.2d 441.” . The Court is here quoting from Hogan and Snee, The McNabb-Mallory Rule : Its Rise, Rationale and Rescue, 47 Geo.L.J. 1. . U. S. v. Mallides, 473 F.2d 859 (9th Cir., 1973).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Cecil Eugene ANTHONY, Defendant-Appellant. No. 72-2566 Summary Calendar. United States Court of Appeals, Fifth Circuit. Feb. 20, 1973. David Crosland, III, Atlanta, Ga., Court-appointed for defendant-appellant. John W. Stokes, U. S. Atty., Robert L. Smith, Asst. U. S. Atty., Atlanta, Ga., for plaintiff-appellee. Before JOHN R. BROWN, Chief Judge, and GOLDBERG and MORGAN, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: Cecil Eugene Anthony appeals his conviction of aiding and abetting unknown persons in stealing a Massey Ferguson farm tractor from an interstate shipment in violation of 18 U.S.C.A. § 659. Appellant contends that the District Court erred (i) in admitting into evidence certain damaging statements uttered by the Appellant following his arrest and, assuming arguendo that the damaging statements were properly admitted into evidence, (ii) in failing to require sufficient corroboration of guilt. We find both of these contentions without merit and affirm the conviction. The succession of events which culminated in this conviction began on August 7, 1971. At 5:55 p. m. on that day Appellant went to a Gulf Service Station on More-land Avenue in Atlanta and rented a Ryder U-Haul van. At about 7:00 or 7:30 the evening of August 7, two men were observed cutting tie-down chains and removing a Massey Ferguson farm tractor from a railroad car at the Constitution yard of Southern Railway in Atlanta. The two men then loaded the tractor into a Ryder U-Haul van and then began to depart. Two of the witnesses pursued the departing van in an automobile. They saw another car joining up with the van. Upon stopping, three men emerged from the two vehicles and conversed. The stolen farm tractor was discovered around noon on August 8 in the backyard of Walter T. Jones. Jones testified that the tractor had been left across the street from his house and he had first seen it there sometime around 11:00 p. m. Saturday night. He indicated that he had moved it from across the street to his backyard early Sunday morning. At about 4:55 p. m. Sunday, August 8, Appellant returned to the Gulf Station on Moreland Avenue with the rented van where he was taken into custody by FBI and Railroad Security agents. Arrest was made and it is undisputed that Appellant was correctly advised of his constitutional rights. It was at this point in time that the damaging statements (in the nature of exculpatory statements), whose admission into evidence the Appellant attacks, were made (see note 4, supra). Appellant entered a timely objection to the government’s proffer of testimony relating to his damaging statements uttered at the time of his arrest (see note 4, supra). At this time the trial Judge conducted a suppression hearing to determine the voluntariness of the statements. He ruled the statements admissible. At the conclusion of the government’s case the Court overruled Appellant’s motion for a judgment of acquittal. In support of his first argument Appellant relies on the ease of Miranda v. Arizona, 1966, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694, its ancestors and its progeny. He contends that where the right to counsel attaches, as it did here (see note 4, supra), any statement obtained in the absence of counsel must be suppressed, independent of any issue of the voluntariness of the statement. He further alleges that once there has been a request for an attorney or a refusal to waive rights has been made, a subsequent knowing and intelligent waiver is impossible. Appellant contends that the trial court addressed their inquiry to the voluntariness of the statements but did not make a proper determination of waiver. Of course Miranda places upon the government a heavy burden both with regard to inculpatory and exculpatory remarks “to demonstrate that the defendant knowingly and intelligently waived his * * * right to retained or appointed counsel.” Miranda v. Arizona, supra, 384 U.S. at 475, 86 S.Ct. at 1628. But we disagree with Appellant’s appraisal of the effect of the dialogue between him and the. arresting officer at the time of the arrest. There is no evidence that the FBI agent persisted in the interrogation after Anthony invoked his right to counsel (see note 4, supra). Nor is there evidence that Anthony manifested inconsistent conduct because of confusion. See United States v. Hopkins, 5 Cir., 1970, 433 F.2d 1041. The Judge could conclude that Anthony himself initiated further conversation with the officer. In Hopkins, supra, we held that if the accused initiates the conversation, his statements do not result from “interrogations” and are therefore admissible. Though there is no requirement that an accused be continually reminded of his rights once he has intelligently waived them, United States v. Phelps, 5 Cir., 1971, 443 F.2d 246, the record in this case shows that the FBI agent went the second mile by a second admonishment to Appellant. We conclude that the ensuing questions asked by the FBI agent were designed merely to pursue the line of inquiry begun by Appellant and uphold the trial Judge’s ruling that Anthony waived his constitutional privilege. United States v. Hopkins, supra; United States v. Jacquillon, 5 Cir., 1972, 469 F.2d 380. We find the remainder of Appellant’s argument unpersuasive. The guilty verdict is adequately supported by the evidence. It is undisputed that Appellant departed with the van from the rental agency and subsequent to the commission of the crime returned with the van. The evidence is clear that the van was used in furtherance of the crime. Witnesses observed three men in active participation of the crime. While the evidence is not uncontradicted that Appellant was one of these three, the guilt of the Appellant may be established without proof that Appellant personally did every act constituting the offense charged. Aiding and abetting means to assist the perpetrator of the crime. United States v. Williams, 1951, 341 U.S. 58, 71 S.Ct. 595, 95 L.Ed. 747. To be an aider and abettor requires that a defendant “associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seeks by his action to make it succeed.” United States v. Harris, 10 Cir., 1971, 441 F.2d 1333. Here, if he did nothing else, Appellant provided the truck necessary to transport the stolen tractor. Affirmed. . § 659. Interstate or foreign shipments by carrier ; State prosecutions Whoever embezzles, steals, or unlawfully takes, carries away, or conceals, or by fraud or deception obtains from any pipeline system, railroad car, wagon, motor-truck, or other vehicle, or from any tank or storage facility, station, station house, platform or depot or from any steamboat, vessel, or wharf, or from any aircraft, air terminal, airport, aircraft terminal or air navigation facility with intent to convert to his own use any goods or chattels moving as or which are a part of or which constitute an interstate or foreign shipment of freight, express or other property; * * * * * Shall in each case be fined not more than $5,000 or imprisoned not more than ten years, or both; but if the amount or value of such money, baggage, goods or chattels does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both. . At the trial two witnesses for the Appellant testified that he was in their company from approximately 6:30 p. m. until 11:30 p. m. Saturday night. Two other witnesses testified that Appellant had spent the remainder of that Saturday night with them from about 11:55 p. m. until the next morning. Appellant’s wife testified that about 5:30 p. m. on the evening of August 7 she had spoken to the Appellant via long distance from Alabama where she was staying concerning his renting a truck for the purpose of moving her and her furniture back to Atlanta. . During their pursuit of the van these witnesses were able to record and testify to the registration and tag numbers of the van. . As to the subsequent events and dialogue FBI agent testified as follows : Q. After placing him under arrest, can you tell the jury what, if anything, you did in advising him as to his constitutional rights? A. I advised him he was not required to make a statement, any statement he did make could be used against him. He had a right to consult with an attorney before making any statement. If he could not afford an attorney, one would he appointed for him. If he decided to answer questions, he had a right to stop answering at any time and have him present during questioning. Q. Did you understand he understood his rights? A. He stated he wanted an attorney present. Q. Then what did you do? A. We didn’t interview him at that time. He asked me then specifically what he was being charged with and at that time, I advised him he was being charged with theft of a farm tractor from the Southern Railway. Q. Just one minute, back up a minute. Did you cease your questioning of him at this time when he said he wanted an attorney; is that correct, sir? A. I did. Q. Who instigated the next conversation? A. He did. Q. Are you sure of that? A. Yes. Q. Tell us how he did. A. He asked me just what he was being charged with. I told him he was being charged with the theft of a farm tractor from the Southern Railway. Q. What else happened? A. At that point,' he said lie might steal an automobile or truck or something ho could sell, but he certainly wouldn’t steal a farm tractor. lie didn’t have any need for a farm tractor. He stated he rented a truck. At that point, I interrupted him to state anything he said could be used against him. He continued on after renting the truck, he turned it over to two individuals and that they had taken the truck and then they called him at four o’clock in the morning and told him where the truck could be found. lie had just gotten the truck and returned it. I then asked him who the two individuals were and he stated that a good thief never rats on another thief. Q. Did he state anything else? A. I asked him if he considered himself a good thief, he said he did. . We recognize and reaffirm the validity of our decisions, United States v. Phelps, 5 Cir., 1971, 443 F.2d 246; United States v. Blair, 5 Cir., 1972, 470 F.2d 331, which hold that once the suspect has requested an attorney that the interrogation must cease. But this in no way denigrates our holding today. For what we hold is that, on the facts of this case, the challenged statements were not the products of interrogation at all, but the voluntarily offered words of the Defendant.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

The STATE OF CALIFORNIA, on behalf of itself and all others similarly situated, and as parens patriae, Plaintiff-Appellee, v. FRITO-LAY, INC., et al., Defendants-Appellants. No. 72-1269. United States Court of Appeals, Ninth Circuit. Feb. 7, 1973. Certiorari Denied May 21, 1973. See 93 S.Ct. 2291. Francis R. Kirkham (argued), William E. Mussman, Terrence A. Callan, of Pillsbury, Madison & Sutro, San Francisco, Cal., Julian von Kalinowski, Irwin F. Woodland, Don J. Belcher, J. Edd Stepp, Jr., of Gibson, Dunn & Crutcher, Reed Stout, William A. Plourde, of Law-ler, Felix & Hall, Laughlin E. Waters, Richard Mainland, of Nossaman, Waters, Scott, Krueger & Riordan, Thomas R. Sheridan, Edward E. Medvene, Patrick Horgan, of Simon, Sheridan, Murphy, Thornton & Medvene, Los Angeles, Cal., William H. Orrick, Jr., William L. Riley, of Orrick, Herrington, Rowley & Sut-cliffe, San Francisco, Cal., William I. Cohen, Palo Alto, Cal., James F. Matthews, of Malovos, Mager & Chasuk, San Jose, Cal., for defendants-appellants. Herbert Davis, Deputy Atty. Gen. (argued), Elwood Lui, Deputy Atty. Gen., Evelle J. Younger, Atty. Gen., Los Angeles, Cal., for plaintiff-appellee. Before MERRILL and TRASK, Circuit Judges, and FREY, District Judge. Honorable William C. Frey, United States District Judge for the District of Arizona, sitting by designation. MERRILL, Circuit Judge: This interlocutory appeal, allowed under 28 U.S.C. § 1292(b), is taken from an order of the District Court, 333 F. Supp. 977, denying appellants’ motion to dismiss the second cause of action stated by California in its complaint to recover treble damages under § 4 of the Clayton Act, 15 U.S.C. § 15. The suit was brought against twelve manufacturers of “snack foods,” charging a conspiracy to fix and maintain prices in violation of the Sherman Act, 15 U.S.C. § 1. The state’s second cause of action reads as follows: “The State of California, as sovereign, agent and protector of all its citizens, sues parens patriae as representative of its citizens who are natural persons and who have not sued in their own right. This action is brought for treble the amount of damages suffered by its citizens due to the defendants’ violations of the antitrust laws of the United States. It is impractical or impossible for the citizens represented herein to bring individual suits to recover damages and the duty to protect their interests and to enforce the policy of the antitrust laws rests with their sovereign, the State of California.” Thus this appeal presents the question whether a state, as parens patriae, may sue and recover treble damages on behalf of its citizen-consumers for the injuries suffered by them. This is quite a different question from that presented in Hawaii v. Standard Oil Company of California, 405 U.S. 251, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972). There, Hawaii sought treble-damage recovery for injury to a quasi-sovereign interest of the state itself — in essence, an injury to the general economy of the state. It was held that this was not injury to business or property of the state under § 4 of the Clayton Act. 405 U.S. at 264, 92 S.Ct. 885. Here, it is for injury to business or property of the state’s citizens that recovery is sought. The question presented is the authority of the state to sue in a representative capacity as parens patriae to recover for that injury. Judicial recognition of such authority would be a substantial departure from the scope of parens patriae authority as it has been recognized in this country to date. Where it has hitherto been recognized, it has been to halt injury to a quasi-sovereign state interest. Hawaii v. Standard Oil Company of California, supra, 405 U.S. at 257-259, 92 S.Ct. 885. This interest has been defined as “an interest apart from that of particular individuals who may be affected.” Georgia v. Pennsylvania Railroad, 324 U.S. 439, 451, 65 S.Ct. 716, 722, 89 L.Ed. 1051 (1945). Parens patriae has received no judicial recognition in this country as a basis for recovery of money damages for injuries suffered by individuals. In a series of cases the Supreme Court has rejected parens patriae as a basis for invoking the court’s original jurisdiction where individuals were the real parties in interest. As authority for extending the concept of parens patriae into this area the state relies on the historic “royal prerogative” of a king “as general guardian of all infants, idiots and lunatics.” It asserts that the practical inability of an injured citizen to bring an individual suit in his own behalf creates a comparable disability and warrants the establishment of a state prerogative to act for his protection. It is true that in the United States this royal prerogative function of the king has passed to the states. However, its need has been met by provisions for court-administered guardian-ships. Efforts to provide for the disability which the state asserts to exist have found expression in provisions for class actions. It would thus appear that the state is seeking to act here not as parens patriae in the sense in which that term is recognized in this country, but as guardian ad litem for the disabled members of the class it purports to represent. The state is looking beyond recovery for injuries to its citizens to its own ultimate acquisition of the recoveries obtained. That acquisition, it asserts, will serve a valid public purpose by providing the injured citizens with the closest equivalent of the recovery which, individually, is beyond their reach. This may be a worthy state aim, but in our judgment it is not the type of state action taken to afford the sort of benefit that the common-law concept of parens patriae contemplates. The means for conferring such benefit, based as they are on management and acquisition of the property of others, free from the safeguards which legislation and rule have thrown up around both guardianships and class actions, constitute state action of a sort that does! not fit the common-law concept. We would, in effect, be restoring to the substance of the common law rules of law in an area which has been pre-empted by legislation because of the need for careful control. The state most persuasively argues that it is essential that this sort of proceeding be made available if antitrust violations of the sort here alleged are to be rendered unprofitable and deterred. It would indeed appear that the state is on the track of a suitable answer (perhaps the most suitable yet proposed) to problems bearing, on antitrust deterrence and the class action as a means of consumer protection. We disclaim any intent to discourage the state in its search for a solution. However, if the state is to be empowered to act in the fashion here sought we feel that authority must come not through judicial improvisation but by legislation and rule making, where careful consideration can be given to the conditions and procedures that will suffice to meet the many problems posed by one’s assertion of power to deal with another’s property and to commit him to actions taken in his behalf. We conclude that the authority of the state to act here as representative of its citizens cannot be founded on its common-law capacity as parens patriae. Reversed and remanded with directions that the state’s cause of action No. 2 be dismissed. . Section 4 of the Clayton Act reads: “Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.” . This proposition has been considered and rejected in at least three District Court opinions: by Judge Pence, in Hawaii v. Standard Oil Company of California, 301 F.Supp. 982, 986 (D.Haw.1969); by Judge Lord, in Philadelphia Housing Authority v. American Radiator and S. Fan. Corp., 309 F.Supp. 1057, 1061 (E.D.Pa. 1969); and by Judge Real, in In re Motor Vehicle Air Pollution Control Equipment, 52 F.R.D. 398 (C.D.Cal. 1970) . . But see Note, Wrongs Without Remedy: The Concept of Parens Patriae Suits for Treble Damages Under the Antitrust Laws, 43 S.Cal.L.Rev. 570, 584-93 (1970); Note, Damage Distribution in Class Actions: The Cy Pres Remedy, 39 U.Chi.L.Rev. 448, 453-56 (1972) [hereinafter cited as Damage Distribution], . New Hampshire v. Louisiana, 108 U.S. 76, 2 S.Ct. 176, 27 L.Ed. 656 (1883); Oklahoma v. Atchison, Topeka and Santa Fe Railway, 220 U.S. 277, 31 S.Ct. 434, 55 L.Ed. 465 (1911); Pennsylvania v. West Virginia, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117 (1923); North Dakota v. Minnesota, 263 U.S. 365, 44 S.Ct. 138, 68 L.Ed. 342 (1923); Oklahoma v. Cook, 304 U.S. 387, 58 S.Ct. 954, 82 L.Ed. 1416 (1938). The rationale of these decisions is that “[A]n action brought by one State against another violates the Eleventh Amendment if the plaintiff State is actually suing to recover for injuries to designated individuals.” Hawaii v. Standard Oil Company of California, 405 U.S. at 258 n. 12, 92 S.Ct. at 889. . Blackstone Commentary 47-48 (12th Ed. E. Christian Ed. 1794). . Hawaii v. Standard Oil Company of California, 405 U.S. at 257, 92 S.Ct. 885. . See, e. g., Cal.Civil Pro.Code § 372 (West 1954). The same provisions exist in the federal courts. Fed.R.Civ.P. 17(c). . “Rule 23 of the Federal Rules of Civil Procedure provides for class actions which may enhance the efficacy of private actions by permitting citizens to combine their limited resources to achieve a more powerful litigation posture. * * *■ The fact that a successful antitrust suit for damages recovers not only the costs of the litigation, but also attorney’s fees, should provide no scarcity of members of the Bar to aid prospective plaintiffs in bringing these suits.” Hawaii v. Standard Oil Company of California, 405 U.S. at 266, 92 S.Ct. at 893. For a criticism of the efficacy of the class action procedures in private antitrust litigation, see Handler, The Shift from Substantive to Procedural Innovations in Antitrust Suits — The Twenty-Third Annual Antitrust Review, 71 Colum.L.Rev. 1, 9-10 (1971). . This form of parens patriae action has also been labeled a “Class Action Supplement” by one commentator. Note, State Protection of its Economy and Environment : Parens Patriae Suits for Damages, 6 Colum.J.L. & Soc.Prob. 411, 423-32 (1970) [hereinafter cited as State Protection], This characterization seems to be a more accurate description of the form of action presented by California than “parens patriae.” No matter how it is labeled, a basic problem still exists. The class action safeguards of Fed.R.Civ. P. 23 are absent. See note 11 infra. . The California Unclaimed Property Act, Cal.Civil Pro.Code § 1500 et seq. (West 1972), provides that intangible property held by the state and unclaimed by the owner for more than seven years escheats to the state. . A number of theories have been advanced concerning ways to provide individual citizens with equivalency recovery. For a discussion of the more prominent theories see State Protection, supra, note 9, at 424 — 29; Damage Distribution, supra, note 3, at 453. To a greater or lesser degree these theories attempt to utilize class action principles without the class action safeguards so carefully worked out by the drafters. “The first [policy] argument offered as support for the extension of parens patriae capacity to treble damage claims based on injury to individual consumers, which concerns the inadequacy of the class action device provided by Rule 23 is as follows: Where the nature of antitrust litigation precludes separate damage suits by individual consumers, and the careful framework of Rule 23 • makes a class action untenable, there may be no practical remedy for an antitrust violation. An action by the State, as parens patriae, would (so the argument goes) be a logical substitute in such cases. This position, however, ignores the difficult problems which the Supreme Court and the Advisory Committee attempted to resolve when they revised Rule 23 in 1966. The joining of the claims of numerous, dispersed claimants in a single judicial action is inherently complicated and requires safeguards if injustice is to be avoided. In essence, the class action procedure permits numerous absent parties to be represented, but it does so by tying their fate to that of the representative plaintiff and by requiring that both representative and class members stand or fall together. * * * to ensure the fairness of the use of this device, the Rule mandates * * * that the court find that all of the members of the alleged class are in similar legal positions. Indeed, if the purported representatives were to have interests which might conflict with those of absent parties, the entire procedure would be open to constitutional attack. The proposed parens patriae device would disregard all of Rule 23’s safeguards without providing new guidelines as to when such wholesale determination of claims may be appropriate or even within the bounds of due process. Furthermore, since a parens patriae suit for the benefit of consumers would not necessarily preclude a class action on behalf of the same individuals, defendants could well be faced with two massive actions based on identical claims. This would * * frustrate not only the careful balancing of policy factors, but also the goal of judicial economy which the draftsmen of Rule 23 sought to achieve.” Malina & Blechman, Parens Patriae Suits for Treble Damages Under the Antitrust Laws, 65 Nw.L.Rev. 193, 215-17 (1970).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

NATIONAL LABOR RELATIONS BOARD, Petitioner, and Rochester Telephone Corporation, Intervenor, v. COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, LOCAL 1170, Respondent. No. 69, Docket 72-1298. United States Court of Appeals, Second Circuit. Argued Oct. 17, 1972. Decided Dec. 21, 1972. Mansfield, Circuit Judge, concurred in result and filed opinion. Joseph C. Thaekery, Atty., NLRB, Washington, D. C. (Peter G. Nash, Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Robert A. Giannasi, Atty., NLRB, Washington, D. C., on brief), for petitioner. Eugene D. Ulterino, Rochester, N. Y. (Nixon, Hargrave, Devans & Doyle, Rochester, N. Y., on brief), for interve-nor. Richard Lipsitz, Buffalo, N. Y. (Lawrence A. Schulz and Lipsitz, Green, Fahringer, Roll, Schuller & James, Buffalo, N. Y., on brief), for respondent. Before MANSFIELD, OAKES and TIMBERS, Circuit Judges. TIMBERS, Circuit Judge: The petition- to enforce an order of the National Labor Relations Board, 194 N.L.R.B. No. 144 (1972), in this somewhat off the beaten path labor case, presents essentially two issues: (1) Whether there was substantial evidence to support the Board’s conclusion that the Union violated Section 8(b)(3) of the Act by its adoption of an embargo against acceptance of temporary supervisory assignments in contravention of a practice agreed upon between the parties, although not incorporated in the existing collective bargaining agreement. (2) Whether there was substantial evidence to support the Board’s conclusion that the Union violated Section 8(b) (1) (A) of the Act by subjecting employees to disciplinary action for refusing to comply with the embargo. For the reasons stated below, we hold that there was substantial evidence to support the Board’s conclusions on both issues. We enforce the Board’s order. I. This case is concerned with the Company’s practice of assigning unit employees to temporary supervisory positions.' Such practice has never been covered by a provision in a collective bargaining agreement between the Company and the Union, including the one in effect at the time of the Union’s embargo and disciplinary action to enforce the embargo referred to below. The Company and the Union have entered into successive collective bargaining agreements since the early 1950’s. In 1960, the Company began the practice of assigning unit employees to act as temporary supervisors. This was to replace supervisors who were on vacation or sick leave. The Union frequently complained about this practice. Its complaints were directed chiefly at assignments that lasted more than 30 days and those where unit employees were assigned to supervise their own work groups. It was not until the 1967 contract negotiations, however, that the Union proposed complete elimination of the temporary supervisory assignment practice. After considerable discussion of the proposal and much backing and filling by both parties, the upshot was that the Union withdrew its proposal altogether and the Company agreed to outline in a letter to the Union (not to be incorporated in the contract) its procedures with respect to temporary supervisory assignments. On the following day, the 1967 collective bargaining agreement was signed. It contained no mention of temporary supervisory assignments. As agreed, the Company did inform the Union by letter in June 1967 of its temporary assignment procedures, including the promise that “whenever possible” employees would not be assigned to supervise their own work groups. In an-exchange of letters with the Union in October 1967, the Company reaffirmed its earlier agreement to limit such assignments to no longer than 30 days. In 1968, at the Union’s request, the entire collective bargaining agreement was renegotiated. The subject of temporary supervisory assignments was not raised by either party. The new agreement contained no restrictions on the Company’s right to make such assignments. It has continued to make them. In July 1970, the Union for the first time filed a formal grievance complaining of one temporary supervisory assignment that lasted six weeks. In settling this grievance, the Company again confirmed in writing its policy that such assignments should not exceed 30 days. Also in 1970, the Union and the Company entered into a written agreement with respect to the equalization of overtime among unit employees. This agreement contained a provision that an employee who was away from his regular job on a temporary supervisory assignment would be charged with the actual overtime hours worked. At no time since 1967 has the Union sought to abolish, or requested to bargain about, the Company’s temporary supervisory assignment practice. On November 9, 1970 — eleven months before the expiration of the 1968 collective bargaining agreement — at a regularly scheduled membership meeting, the Union voted (1) an embargo on acceptance of all temporary supervisory assignments effective December 1, 1970, and (2) to penalize those who violated the embargo. Since imposition of the embargo, the Company has had difficulty getting unit employees to accept temporary supervisory assignments. Two employees, one a Union member and one a nonmember, who accepted such assignments despite the embargo have had charges filed against them by the Union. Following the filing of charges against the Union by the Company on February 23, 1971, pleadings were filed and in due course an evidentiary hearing was held before a trial examiner in Rochester, New York on May 28, 1971. The examiner on August 19, 1971 filed his decision which included findings of fact, conclusions of law and a recommended order. The Board on January 6, 1972 filed its decision and order. 194 N.L.R.B. No. 144. The Board’s order, which adopted the examiner’s recommended order with certain modifications, required the Union to cease and desist from conduct found to be in violation of §§ 8(b)(3) and 8(b)(1)(A) of the Act and to take certain affirmative action to remedy such violations. II. In the light of the foregoing summary of the evidence and prior proceedings leading to the instant petition by the Board for enforcement of its order, we turn directly to the central issue before us: Whether the Union’s action of November 9, 1970 in voting an embargo on acceptance of all temporary supervisory assignments constituted an unfair labor practice in violation of § 8(b)(3). We hold that it did. Under § 8(b)(3), it is an unfair labor practice for a representative union “to refuse to bargain collectively with an employer.” The collective bargaining obligation, as defined in § 8(d), includes a duty not to terminate or modify an existing contract unless the party seeking such termination or modification gives to the other party specified notification in advance of the expiration date or offers to reopen negotiations. Coneededly there was no such notification or offer to reopen negotiations on the part of the Union here. The crux of the controversy therefore is whether the Union’s unilateral adoption of an embargo on acceptance of temporary supervisory assignments in midterm of the Union’s collective bargaining agreement with the Company was in derogation of an agreed-upon practice not incorporated in the collective bargaining agreement. We hold that the evidence clearly established a contemporaneous bargain, made at the time the parties entered into the 1967 collective bargaining agreement, with respect to the Company’s practice of assigning unit employees to temporary supervisory positions. In short, we hold that there was substantial evidence to support the Board’s specific finding in this regard: “In the instant case . . . the parties bargained about abolishing the Company’s practice of assigning unit employees to temporary supervisory positions and reached an accord, pursuant to which the Union agreed to withdraw, and did withdraw, its demand to abolish the practice, in return for a letter of commitment from the Company outlining its procedures in implementing the practice. This agreement, therefore, became part of the contemporaneous bargain which the parties made in executing their 1967 contract, (citing The Jacobs Manufacturing Company, 94 N.L.R.B. 1214, 1227-28 (1951), enforced, 196 F.2d 680 (2 Cir. 1952)). And, since the Union did not renew its demand in the 1968 contract negotiations, the Company had a right to rely on the Union’s prior acquiescence in the practice, subject to the limitations agreed to by the Company, and to assume that its rights remained unchanged.” Under similar circumstances, we recently have held that a union’s attempt unilaterally and in midterm to alter an existing collective bargaining agreement constituted a violation of § 8(b)(3). New York Dist. Council No. 9 v. NLRB, 453 F.2d 783 (2 Cir. 1971), cert. denied, 405 U.S. 988 (1972) (the Westgate case). In Westgate, the collective bargaining agreement provided for a 35 hour work week. The union, during the term of the bargaining agreement, adopted a rule limiting to 10 the number of rooms which unit employees were allowed to paint per week, thus reducing the average weekly output per man from 11.5 rooms to 10. The contract was silent regarding the matter on which the union acted unilaterally. We held that: “By enforcing the rule the Union is in substance modifying this term to stipulate that journeymen are not to work a five day, seven-hour per day work week, but are to work only so long as it takes them to paint 10 rooms. We therefore agree with the Board that before the Union can enforce this modification of the collective bargaining agreement, it must bargain collectively with the Association over the issue.” 453 F.2d at 787. The evidence in the instant case establishes even more clearly than in West-gate the existence of an agreement between the parties on the matter with respect to which the Union acted unilaterally, although the contracts in both cases were silent on the matter. In Westgate, the contract’s silence was due to the fact that the parties, having bargained during their last contract negotiations about maximum production standards, failed to reach agreement on the matter. In the instant case, the contract’s silence reflected the parties’ agreement to continue the Company’s practice of assigning employees to temporary supervisory positions. As the Board found, based on substantial evidence, “[i]n fact, the earlier understandings and written statement of policy clearly were intended to, and did, continue as an integral part of the totality of the contract between the parties.” Upon these facts, we find the principle enunciated by the Supreme Court in Scofield v. NLRB, 394 U.S. 423, 432-33 (1969), to be applicable here. In Sco-field, the Court, in upholding as not vio-lative of § 8(b)(1) the enforcement of a union rule regarding production quotas, held as follows with respect to the position of the company which is strikingly similar to that of the Union in the instant case: “The company has repeatedly sought an agreement eliminating the piecework ceiling, an agreement which, had it been obtained, unquestionably would have been violated by the union rule. But the company could not attain this. Although, like the union, it could have pressed the point to impasse, . it has never done so. Instead, it has signed contracts recognizing the ceiling, has tolerated it, and has cooperated in its administration by honoring requests by employees to bank their pay for over-ceiling work. We discern no basis in the statutory policy encouraging collective bargaining for giving the employer a better bargain than he has been able to strike at the bargaining table.” 394 U.S. at 432-33. (citation and footnote omitted). Here, as in Scofield, we find no statutory policy in favor of giving the Union a better bargain than it was able to strike at the bargaining table. We hold that there was substantial evidence to support the Board’s conclusion that the Union’s embargo against acceptance of temporary supervisory assignments constituted a violation of § 8(b)(3). III. The sequel to our holding above that the Union’s embargo constituted a violation of §8(b)(3) is that the Union’s enforcement of the embargo constituted a violation of § 8(b) (1) (A). With respect to the nonmember of the Union against whom written charges were brought (DiMaria), the Union’s action restrained and coerced her in the exercise of her § 7 rights in violation of § 8(b)(1)(A). See Booster Lodge No. 405 v. NLRB, 459 F.2d 1143, 1150-55 (D.C.Cir.1972), aff’d,-U.S. —-“(May 21,1973) (per curiam). With respect to the Union member (Cammarata), the Union’s similar disciplinary action also constituted a restraint and coercion not sanctioned by the proviso to § 8(b)(1) (A) because the charges against her did not stem from violations of a lawful union rule dealing with purely internal union matters but sought to enforce conduct we have held violated §§ 8(d) and 8(b)(3). As the Supreme Court said in Sco-field, “it has become clear that if the rule invades or frustrates an overriding policy of the labor laws the rule may not be enforced, even by fine or expulsion, without violating § 8(b)(1).” 394 U.S. at 429. We have held above that the adoption of the embargo was in violation of §§ 8(d) and 8(b)(3), and therefore was invasive of an overriding policy of the labor laws. We hold that there was substantial evidence to support the Board’s conclusion that the Union’s conduct in subjecting employees to disciplinary action for refusing to comply with the embargo constituted a violation of § 8(b)(1)(A). IV. We have considered and find without merit the Union’s alternative contention that the Board should not have assumed jurisdiction over this dispute since, according to the Union, it arose over the terms and meaning of an agreement and should have been settled by resort to the grievance and arbitration procedures provided for in the collective bargaining agreement. Enforced. MANSFIELD, Circuit Judge (concurring) : Although I concur in the result reached in Judge Timbers’ carefully considered opinion, I am not entirely in agreement with one aspect of its reasoning. I agree that the Board’s finding that the parties reached a prior understanding, partly oral and partly written, regarding temporary assignment procedures was supported by substantial evidence and that the Union’s unilateral embargo in disregard of that understanding violated its obligation “to bargain collectively” in accordance with § 8(b)(3), 29 U.S.C. § 158(b)(3). But in my view we could enforce the Board’s order, as interpreted by it, only if we agreed with it that the past practices' and prior understandings as to assignment of temporary supervisors were “contained in a contract” as that phrase is used in § 8(d), 29 U.S.C. § 158(d), which defines the phrase “to bargain collectively.” I would so hold. Under such a holding the Company would not be “required ... to agree to, or even to bargain with the Union about, changing the existing agreement during its term.” Decision of the Board, Appendix 6. The reasoning of the majority opinion, however, by relying on the “contract’s silence” and analogizing the case to Westgate, New York Dist. Council v. N. L. R. B., 453 F.2d 783, 787 (2d Cir. 1971), cert. denied, 405 U.S. 988, 92 S.Ct. 1251, 31 L.Ed.2d 455 (1972), upon which the Trial Examiner relied, should logically permit the Union at any- time during the term of the contract to initiate bargaining on the issue, since the contract is “silent on the matter.” The Board, modifying the Trial Examiner’s proposed order, rejected such reasoning. Section 8(d) bars reopening or modification of an existing collective bargaining agreement except upon stated conditions that were not followed by the Union in this case. It further provides that these conditions “shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period. . . . ” (emphasis supplied). I am persuaded that, absent a clause to the effect that the formal agreement incorporates all understandings between the parties — and no such term is found in the formal agreement here — a prior understanding of the type in this case, partly oral and partly written, may constitute a term of the “contract” between the parties within the meaning of § 8(d) even though it has not been physically incorporated in a formal collective bargaining agreement. This view is amply supported by precedent. United Steelworkers v. NLRB, 456 F.2d 248, 249 (3d Cir. 1972); Jacobs Manufacturing Co., 94 N.L.R.B. 1214, 1227 (1951) (concurring opinion), enfd., NLRB v. Jacobs Mfg. Co., 196 F.2d 680 (2d Cir. 1952); Spei-del Corp., 120 N.L.R.B. 733, 738 (1958). “I believe that this Respondent was not under a duty to discuss the Union’s group insurance demand. * * ■» -X- * * “In my opinion, it is only reasonable to assume that rejection of the Union’s basic proposal, coupled in this particular instance with enhancement of the substantive benefits, constituted a part of the contemporaneous ‘bargain’ which the parties made when they negotiated the entire 1948 contract. In the face of this record as to what the parties discussed and did, I believe that it would be an abuse of this Board’s mandate to throw the weight of Government sanction behind the Union’s attempt to disturb, in midterm, a bargain sealed when the original agreement was reached. “To hold otherwise would encourage a labor organization — or, in a Section 8(b)(3) case, an employer — to come back, time without number, during the term of a contract, to demand resumed discussion of issues which, although perhaps not always incorporated in the written agreement, the other party had every good reason to believe were put at rest for a definite period.” Jacobs Manufacturing Co., supra at 1227-28. In Westgate, relied upon by the majority, the failure of the parties to reach agreement on production quotas barred the Union from unilaterally modifying the 35-hour work week provision of the ‘formal collective bargaining agreement and entitled the employer to restrict the Union to the four corners of that agreement. I do not view that case as supporting the proposition upon which our decision depends, namely, that where earlier understandings constitute part of the contract between the parties they may rely upon such terms, even though the terms are not found within the four corners of the formal written agreement. . Communications Workers of America, AFL-CIO, Local 1170 (the Union). . National Labor Relations Act, 29 U.S.C. § 151 et seq. (1970) (the Act). . Rochester Telephone Corporation (the Company). . The only material modification of the trial examiner’s recommended order made by the Board was deletion of the provision directing the Union to bargain with the Company. The Board held that, “although the Union was free to request discussion, the Company was not required by Section 8(d) of the Act to agree to, or even to bargain with the Union about, changing the existing agreement during its term.” . Section 158(d) defines the phrase “to bargain collectively” as the “performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment . Provided, That where there is in effect a collective-bargaining contract covering employees in an industry affecting commerce, the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desiring such termination or modification— (1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date. (2) offers to meet and confer with the other party. . . . (3) [notifies the appropriate conciliation services]. . . (4) [does not resort to strike or lock out and gives full force to contract] for a period of sixty days after such notice is given or until the expiration date of such contract, whichever occurs later: “ . . . [t]he duties so imposed [2-4] shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for .a fixed period, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract. . . . ” 29 U.S.C. § 158(d). (Emphasis supplied) . “In our opinion the Union’s enforcement of the 10-room rule violates the term of the September 9th collective bargaining agreement that stipulates that the standard work week for journeymen painters shall consist of five seven-hour days. ■ By enforcing the rule the Union is in substance modifying this term to stipulate the journeymen are not to work a five day, seven-hour per day work week, but are to work only so long as it takes them to paint 10 rooms. We therefore agree with the Board that before the Union can enforce this modification of the collective bargaining agreement, it must bargain collectively. . . . This obligation includes, of course, compliance with the four classes of section 8(d).” 453 F.2d 783, 787 (2d Cir. 1971).

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2024-08-24T03:29:51.129235

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UNITED STATES of America, Plaintiff-Appellee, v. Florencio SEPE, Defendant-Appellant. No. 72-1352. United States Court of Appeals, Fifth Circuit. Jan. 4, 1973. Rehearing Denied Feb. 5, 1973. Rehearing En Banc Granted April 4, 1973. Goldberg, Circuit Judge, concurred specially, dissented from denial of petition for rehearing and filed opinions. Melvyn Kessler, Dennis I. Holober, Miami, Fla., for defendant-appellant. Robert W. Rust, U. S. Atty., Michael P. Sullivan, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee. Before COLEMAN, GOLDBERG and GODBOLD, Circuit Judges. COLEMAN, Circuit Judge: The Grand Jury for the Southern District of Florida indicted Florencio Sepe for (1) conspiring to import sixty-six pounds of heroin, 21 U.S.C. § 952(a); 18 U.S.C. § 2; 21 U.S.C. § 963; (2) for importing sixty-six pounds of heroin; and (3) for possessing the said narcotics with intent to distribute, 21 U.S.C. § 841(a)(1). On January 11, 1972, the case came to trial. Sepe contended that the heroin and the suitcase in which it had been contained should be suppressed as being fruits of an unlawful search. The trial judge disagreed. A jury was selected. The government made its opening statement. Seven witnesses were examined, compiling a trial transcript of 141 typewritten pages. At this point the following transpired : MR. KESSLER [counsel for Sepe]: Your Honor, we have a most unusual request at this point in time and I trust the Court would go along with this request. We are presently attempting to negotiate a favorable arrangement between the Defendant and the U. S. Government. There are one or two small problems, one of which, I’m waiting for the Interpreter that my client has faith in and that we can discuss it a little bit further, and he should be here momentarily. THE COURT: We will discuss it here at sidebar. We will let the jury have a recess for half an hour. (Thereupon a recess was taken until 10:00 a. m., pursuant to which the following proceedings were had outside the presence of the jury:) MR. KESSLER: Your Honor, the Defendant at this time has an announcement to make. THE COURT: All right. We’ll hear you. MR. KESSLER: With the permission of the Court, we would at this time request of the Court to permit us to withdraw our plea of not guilty as to Counts 1, 2 and 3. THE COURT: Your client is not named in Count 3. Counts 1, 2 and 5 are the Counts which relate to Mr. Sepe. MR. KESSLER: Yes sir. At this time, Your Honor, with the Court’s permission, we would tender a plea of guilty to Count 1, and a plea of no contest to Counts 2 and 5. THE COURT: And what is the Government’s position? MR. SULLIVAN: Your Honor, we will make a recommendation as to sentencing, but we do not object to the two nolo pleas as to Counts 2 and 5. MR. KESSLER: We would ask at this time, Your Honor, that the Court defer the matter of sentencing to permit us for the taking of testimony from the family sometime next week. They are remaining— Thereafter, the following proceedings took place: THE COURT: Mr. Sepe, how old are you? THE DEFENDANT: Thirty-two years old. THE COURT: What education do you have? THE DEFENDANT: Up to sixth grade, elementary school. THE COURT: Are you married? THE DEFENDANT: Yes, sir. THE COURT: Have you children? THE DEFENDANT: Three. THE COURT: How many ? THE DEFENDANT: Three. THE COURT: Now, under the law I must ask you certain questions to be sure that you understand what is happening and what you are doing. The fact that I do this does not reflect on your Counsel or their knowledge or ability, since they have already undoubtedly told you of the same things and asked you the same questions. Do you understand that by entering a plea to Count 1 of the indictment that you are admitting the truth of the charge, that you agreed with one or more of the other persons named to import unlawfully into the United States a quantity of heroin; you understand that? THE DEFENDANT: Yes, sir. THE COURT: And do you under- stand that when you plead guilty, there is no further trial either before a jury or before me, and that the only thing that will remain to be done is that I determine and impose whatever sentence I think appropriate? THE DEFENDANT: (Nods head.) THE COURT: Is your plea of guilty entered freely and voluntarily on your part? THE DEFENDANT: (Nods head.) THE COURT: Will you answer so the Court Reporter gets it ? THE DEFENDANT: Yes, sir. THE COURT: Other than the promise or assurance of the United States Attorney that he will make a recommendation to the Court about your sentence, have any other promises or inducements been offered to you ? THE DEFENDANT: No, sir. MR. BIERMAN: I would point out, Your Honor, that I have explained to the Defendant that the Court has indicated, pursuant to the ABA standards, that if the Court feels it necessary to exceed the Government’s recommendation, that an opportunity to withdraw the plea would be given. THE COURT: And I say to the Defendant as I have said to you, his Counsel, that I cannot foresee any circumstance at the moment that would impel me to impose a sentence in excess of the recommendation of the Government as to maximum sentence. You understand that? THE DEFENDANT: Yes, sir. THE COURT: Now, with respect to Count 3 of the indictment. MR. SULLIVAN: Is that not Count 2, Your Honor? THE COURT: Count 2. Thank you. With respect to Count 2 of the indictment, you are charged with having unlawfully imported into the United States from a place outside, a quantity of heroin, sixty-six pounds. Do you understand that by a plea of nolo contendere you say to the Court that you do not contest the truth of that charge ? THE DEFENDANT: (nods head.) THE COURT: And his answer? THE DEFENDANT: Is yes, sir. THE COURT: And you understand that when you enter such a plea, there is no trial before Court or jury and that the Court may then sentence you upon that Count of the indictment with the same force and effect as if you had entered a plea of guilty ? THE DEFENDANT: (Nods head.) THE COURT: Will you answer so the Court Reporter hears you ? THE DEFENDANT: Yes, sir. THE COURT: On Count 5 of the indictment you are charged, with Mr. Pel-lini, with possession with intent to distribute a quantity of heroin, approximately sixty-six pounds. Do you understand that by your plea of nolo contend-ere, that you, by that plea, do not contest the truth of the charge? The Court, of course, understands that what was actually in the bag when you got it was one package and not sixty-two. THE INTERPRETER: Not one package but two when the bag was delivered to him and Mr. Pellini, the rest being flour, according to the evidence before us. And do you understand that on that Count if you plead nolo contendere, there is no further trial before the jury or before the Judge, and that the Judge may sentence you upon that Count of the indictment with the same force and effect as if you had entered a plea of guilty? THE DEFENDANT: (Nods head.) THE COURT: And his answer ? THE DEFENDANT: Yes, sir. THE COURT: Do you understand that upon these Counts, that the maximum prison sentence could be as much as fifteen years ? THE DEFENDANT: (Nods head.) THE COURT: You must answer. He is shaking his head Yes, but we don’t get your answer unless you utter it vocally. THE DEFENDANT: Yes. THE COURT: And with the knowledge of what your Counsel have told you and what the Judge has told you, are you still desirous and willing to change your plea to guilty on Count 1, and to nolo contendere on Counts 2 and 5 ? THE DEFENDANT: Yes. THE COURT: The Clerk may now take his plea of guilty on Count 1 and nolo contendere on Counts 2 and 5. The defendant was thereafter sentenced to one-half of the maximum term of imprisonment, plus a fine. He now seeks to appeal on the ground that the intended reception in evidence of the suitcase and heroin infringed his Fourth Amendment rights and that his conviction, although on obviously voluntary pleas of guilty and nolo contendere, should be reversed. We cannot accept this contention. The situation is completely covered by a most thoroughly researched, cogently reasoned decision recently rendered by the United States Court of Appeals for the Sixth Circuit in United States v. Cox, 464 F.2d 937 (1972). There is a strong temptation to quote in externo from the Cox opinion. Since it is reported, and thus available to all, we restrict ourselves to the following excerpts : “The procedure employed in the case at bar is at variance with the general, well-settled rule that a guilty plea “normally rests on the defendant’s own admission in open court that he has committed the acts with which he is charged,” see McMann v. Richardson, 397 U.S. 759, 766, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970); Brady v. United States, 397 U.S. 742, 748, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970); McCarthy v. United States, 394 U.S. 459, 466, 89 S. Ct. 1166, 22 L.Ed.2d 418 (1969). When made by the accused, knowingly, willingly and with the benefit of competent counsel, a plea of guilty waives all non-jurisdictional defects. Austin v. Perini, 434 F.2d 752 (6th Cir. 1970); Hum-phries v. Green, 397 F.2d 67 (6th Cir. 1968); Reed v. Henderson, 385 F.2d 995 (6th Cir. 1967); McCord v. Henderson, 384 F.2d 135 (6th Cir. 1967); Crockett v. Haskins, 372 F.2d 475 (6th Cir. 1966); also see, Jenkins v. Beto, 442 F.2d 655 (5th Cir. 1971); Nobles v. Beto, 439 F.2d 1001 (5th Cir. 1971); United States v. Rook, 424 F.2d 403 (7th Cir. 1970), cert. den. 398 U.S. 966, 90 S.Ct. 2180, 26 L.Ed.2d 550 (1970); United States v. McElya, 142 U.S.App.D.C. 38, 439 F.2d 548 (1970); Abram v. United States, 398 F.2d 350 (3rd Cir. 1968); United States ex rel. Rogers v. Warden, 381 F.2d 209 (2d Cir. 1967); Runge v. United States, 427 F.2d 122 (10th Cir. 1970); Seybold v. Cady, 431 F.2d 683 (7th Cir. 1970). The jurisdictional exception to the general rule has been limited to cases in which the accused is challenging the constitutionality of the statute, usually on Fifth Amendment grounds, under which he is charged. See, Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968). -X- * -X- * * -X- “These general rules are well summarized in 1 Wright, Federal Practice and Procedure: Criminal § 175b, as follows: ‘The entry of a plea of guilty has the effect of admitting all material facts alleged in the charge. No further proof of the crime is required . . . The plea is not merely evidence for the government. It is a formal criminal pleading, waiving a trial and a defense, and leaving the court nothing to do but to impose sentence and enter judgment. A defendant who has pleaded guilty is not barred from claiming that the indictment or information failed to state an offense, or that the statute under which he was charged is unconstitutional, or that the pleading showed on its face that the prosecution was barred by the statute of limitations. The plea of guilty does waive, however, all nonju-risdictional defects in the proceeding. In particular, it bars any claim that the prosecution obtained evidence unlawfully, or that the defendant was illegally detained, or that the prosecution constituted double jeopardy, (footnotes omitted and emphasis supplied).’ See, Hughes v. United States, 371 F.2d 694 (8th Cir. 1967); Hoffman v. United States, 327 F.2d 489 (9th Cir. 1964); Thomas v. United States, 290 F.2d 696 (9th Cir. 1961), cert. den. 368 U.S. 964, 82 S.Ct. 446, 7 L.Ed.2d 401 (1962). * -X- -X- -X- *x- * “It is also well established that a guilty plea is not rendered invalid because it represents a compromise by defendant, thrusts a difficult judgment upon him,- or is motivated by fear of greater punishment. See Brady, supra; McMann, supra; Parker v. North Carolina, supra, 397 U.S. 790, 90 S.Ct. 1458, 25 L.Ed.2d 785; North Carolina v. Alford, 400 U.S. 25, 91 S.Ct. 160, 27 L.Ed. 2d 162 (1970); McGautha v. California, 402 U.S. 183, 213, 91 S.Ct. 1454, 28 L.Ed.2d 711 (1971). The State may properly encourage pleas of guilty either by being more lenient to those who enter such pleas, see Brady, supra, 397 U.S. at 750-753, 90 S.Ct. 1463, or by increasing the risks of punishment on those who do not, see North Carolina v. Alford, supra, 400 U.S. at 37, 91 S.Ct. 160; Parker v. North Carolina, supra, 397 U.S. at 795-796, 90 S.Ct. 1458. The constitutional standard remains, in Justice Harlan’s words, “whether the plea represents a voluntary and intelligent choice among the alternative courses of action open to the defendant.’’. North Carolina v. Alford, supra, 400 U.S. at 31, 91 S.Ct. at 164; also see Boykin v. Alabama, supra, 395 U.S. [238] at 242, 89 S.Ct. 1709 [23 L.Ed.2d 274]; Machibroda v. United States, 368 U.S. 487, 493, 82 S.Ct. 510, 7 L.Ed.2d 473 (1962). “The guilty plea has a central role in the criminal process. See Brady, supra, 397 U.S. at 752 n. 10, 90 S.Ct. 1463. Approximately 90% of all criminal proceedings commenced in the United States district courts are settled by the entrance of a plea of guilty or one of nolo contendere. See Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1971) (Douglas, J., concurring, at n. 2). Plea bargaining is now openly recognized as an important prosecutorial tool in obtaining these pleas which are indispensable to the smooth functioning of the existing system of criminal justice.5 The Supreme Court held in Santobello, swpra, that where “a plea rests in any significant degree on a promise or agreement of the prosecutor . . . such promise must be fulfilled,” and perhaps even be specifically performed. “The defendants at bar had every right to and did in fact plead not guilty. After their motion to suppress was overruled they were confronted by one of the hard choices of which our criminal process is replete. See McGautha v. California, supra, 402 U.S. at 213, 91 S.Ct. 1454. They could go to trial on charges of armed robbery and put the government to its burden of proving their guilt, see McMann v. Richardson, supra, 397 U.S. at 767, 90 S.Ct. 1441; United States v. Doyle, 348 F.2d 715 (2nd Cir. 1965), or they were free to bargain with the prosecutor and offer to plead guilty to a reduced charge or be promised leniency. “In intelligently weighing their options, the defendants chose to plead guilty to reduced charges. Their mental calculus was undoubtedly affected by the district court’s ruling on the motion to suppress and by their estimation of the likelihood of that ruling being set aside on appeal.6 If they and their counsel believed the chances of reversal to be high, we fail to understand what was to be. gained by pleading guilty. The plea of not guilty should have been maintained and the government' put to its burden.” In the foregoing decision the Court of Appeals for the Sixth Circuit concluded that even with the consent of the prosecution, pleas of guilty cannot be accepted while the defendant reserves the right to appeal on non-jurisdictional grounds. In the interest of orderly procedures in the conduct of criminal trials, in order that criminal prosecutions may be reduced to final judgments so as to confer appellate jurisdiction, and for all the reasons so ably set forth in United States v. Cox, supra, we agree with the principles there announced. This leaves one matter for disposition. Sepe pleaded nolo contendere to Count 5 of the indictment. On appeal, apparently for the first time, it is now noticed that this count was defective for failure to assert the essential “knowledge” required under the Old Narcotic Drugs Import and Export Act, 21 U.S.C. § 174. The government concedes this point, that the count did not charge an offense defined by law. Since the sentence on Count 5 was for a non-existent offense, the judgment as to that count will be vacated and remanded with directions that the sentence on that count alone be set aside and the count itself dismissed. The judgment and sentence of the District Court as to Counts 1 and 2 of the indictment are in all respects affirmed. Affirmed in part. In part (as to Count 5) vacated and remanded with directions. GOLDBERG, Circuit Judge (specially concurring): I concur in the result and add only a few lines, which may or may not be superfluous. I merely emphasize that not every prosecutorial flaw is waived by entering a plea of guilty — it is only non-jurisdictional defects that occurred prior to the plea that are waived by knowingly, willingly, and voluntarily pleading guilty. See United States v. Cox, supra, 464 F.2d at 940. Thus, even a defendant who pleads guilty may later assert that the indictment fails to state an offense. Here, appellant challenged count V on this ground, and the government conceded error. A second example of a right that is not surrendered by pleading guilty is the power to attack the constitutionality of the criminal statute involved. Haynes v. United States, 1968, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923. Here, appellant challenges 21 U.S.C. § 841 as being violative of the tenth amendment and 21 U.S.C. § 952(a) as failing to require “knowledge and intent.” Both points border on the frivolous. Section 841 was held proper under the Commerce Clause in United States v. Lopez, 5 Cir. 1972, 459 F.2d 949, and § 952, when read with § 960, as it must be, requires knowledge and intent. Appellant’s points must fail'. ON PETITION FOR REHEARING PER CURIAM: It is ordered that the petition for rehearing filed in the above entitled and numbered cause be and the same is hereby denied. The appellant contends that his situation should be governed by the decision of this Court in United States v. Caraway, 1973, 474 F.2d 25. The record in Sepe’s case, however, is entirely bereft of any agreement on the part of the trial court that the defendant could enter his pleas and thereafter appeal. To the contrary, the record shows that the trial court specifically warned Sepe that if he entered the pleas there would be nothing left but the imposition of sentence. GOLDBERG, Circuit Judge (dissenting) : I respectfully dissent from the denial of appellant’s petition for rehearing in this case. In the light of United States v. Caraway, 5 Cir. 1973, 474 F.2d 25, I would grant the petition and would remand the case in order to allow the district court to make factual findings as to whether appellant was led to believe that he would be allowed to appeal the evidentiary ruling and whether appellant in fact attempted to “preserve” the right to appeal that ruling. ORDER GRANTING REHEARING EN BANC Before JOHN R. BROWN, Chief Judge, and WISDOM, GEWIN, BELL, THORNBERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, INGRAHAM and RONEY, Circuit Judges. BY THE COURT: A majority of the Judges in active service, on the Court’s own motion, having determined to have this case reheard en banc, It is ordered that this cause shall be reheard by the Court en banc on briefs without oral argument. The Clerk will specify a briefing schedule for the filing of supplemental briefs.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Oscar Pequeno De LEON, Defendant-Appellant. No. 72-2536. United States Court of Appeals, Fifth Circuit. March 2, 1973. Rehearing Denied April 23, 1973. Richard G. Morales, Jr., Laredo, Tex., Alan Brown, San Antonio, Tex., for defendant-appellant. Anthony J. P. Farris, U. S. Atty., James R. Gough, Anthony C. Aguilar, Asst. U. S. Attys., Houston, Tex., for plaintiff-appellee. Before ALDRICH, SIMPSON and CLARK, Circuit Judges. Hon. Bailey Aldirch, Senior Circuit Judge of the First Circuit, sitting by designation. PER CURIAM: De Leon was convicted of possession of heroin with intent to distribute, in violation of Title 21, U.S.Code, Section 841(a)(1). We affirmed, United States of America v. De Leon, 5 Cir. 1972, 462 F.2d 170. During that trial De Leon took the witness stand in his own behalf. He testified that with a friend from San Antonio, where he also resided, he had made a trip in the friend’s vehicle to Laredo, Texas, and the over the border city of Nuevo Laredo, Mexico, to visit the bars and houses of prostitution in the Mexican city. The trip was made at the defendant’s suggestion and at his expense. He stated that he and his friend became separated. When the friend failed to appear De Leon thought that he was left without transportation home to San Antonio. He testified that he told some newly found friends in a Nuevo Laredo bar of his predicament, and they offered him the use of an extra car which they had for him to drive back to San Antonio. It was De Leon’s testimony that the vehicle thus furnished was the Pontiac in which he was arrested a short time later, that he had never seen it before this day and that he was unaware of the fact that there were any narcotics present in the vehicle when he was stopped at the border patrol checkpoint some eight to ten miles north of Laredo, Texas. This reasonably plausible testimony, if unchallenged, might well have been accepted by the jury. But in rebuttal the government offered the testimony of a Texas State Highway Patrolman who had arrested the defendant a week before, en route to Laredo, in the same Pontiac car as the one he was driving on the occasion of the arrest. The traffic ticket issued to the defendant by the officer bore De Leon’s signature as well as his name and the description by make, model and color and license plate number of the vehicle. A copy of the traffic ticket was found in the glove compartment of the Pontiac at the time of the arrest. The defendant was indicted, tried and convicted of perjury, Title 18, U.S.Code, Section 1621, for the giving of this testimony. This appeal followed. Appellant’s first contention on appeal is that the falsity of his testimony as to never having seen the car before the day of his arrest was not corroborated, or not sufficiently corroborated. The longstanding rule is of course that perjury may be proved by two witnesses or by one witness and corroborating evidence. McWhorter v. United States, 5 Cir. 1952, 193 F.2d 982; Hug v. United States, 6 Cir. 1964, 329 F.2d 475; United States v. Manfre-donia, 2 Cir. 1969, 414 F.2d 760; Geb-hard v. United States, 9 Cir. 1970, 422 F.2d 281. The government relies upon the traffic summons found in the car at the time of the arrest and the Highway Patrolman’s testimony as to the circumstances surrounding its issuance and the date thereof as sufficient corroboration. The appellant relies upon United States v. Rose, 3 Cir. 1954, 215 F.2d 617, and United States v. Freedman, 2 Cir. 1971, 445 F.2d 1220, for his contention that the traffic ticket would not amount to sufficient corroboration because it was given to De Leon by the witness himself. We do not read these decisions as holding that the independent corroboration may not be tied in any way to the testimony of the original witness, nor do we find them apposite on the facts. We agree with the government that the warning ticket would, standing alone, refute the perjured statement. The ticket contained an accurate- description of the car, its license number and the date of the arrest as well as the defendant’s signature. Most important was the independent source from which the warning ticket originated. It was found in the vehicle in the defendant’s possession at the time of his arrest. We hold that independent corroboration of the arresting Highway Patrolman’s testimony was present in this case. The defendant makes a second point that the court below erroneously admitted in evidence the record of the previous narcotics trial, contending that although his counsel stipulated to the ae-curacy of the transcript there was no stipulation as to its admissibility. He cites Harrell v. United States, 5 Cir. 1955, 220 F.2d 516, a perjury case, as holding that although it was proper under the circumstances there to admit the transcript of a previous trial, “the admission of testimony taken at the former trial may introduce into the trial of the perjury charges highly prejudicial evidence tending to show the commission of other crimes.” He then argues on brief and orally that he was prejudiced here because the transcript showed that he was convicted of the narcotics offense at the former trial. The trouble with the appellant’s position is that this point, whatever it is worth, was not preserved for review by appropriate objection in the trial court. At the commencement of the trial when the prosecuting attorney was given leave by the court to read the indictment to the jury, defense counsel made the following objection: “Mr. Brown: Your Honor, if it please the court, on this indictment, we object to reading the particulars of the other offense in that this might prejudice the jury in the case at bar, and we think that it should only be read — there was a case against the United States but not specifically being a narcotics violation. The Court: I think it comes a little late as to the form of the indictment. You told me this morning that you are going to offer the entire record in the ease. I don’t see where it will make any difference.” This oblique reference was not, in our judgment, sufficient to present the trial court with an opportunity to limit the use of the transcript of the prior trial in any way. The imprecision with which the objection was made and the uncertainty of its purpose required elaboration after the response of the court quoted supra. Failing such elaboration, we are disinclined to attribute error to the trial judge in this respect, assuming arguendo that properly preserved the point would have been meritorious. Al-lis v. United States, 1894, 155 U.S. 117, 122, 15 S.Ct. 36, 39 L.Ed. 91. Immediately thereafter, following opening statements by the government and defense counsel, the government attorney, as first in his order of proof, read before the jury without objection counsel’s stipulation for the admission of a copy of the indictment and a certified copy of the transcript of the prior trial. Error is not demonstrated in either of the respects claimed. The judgment below is Affirmed. . The materiality of the perjured testimony given by De Leon, Blackmon v. United States, 5 Cir. 1940, 108 F.2d 572, could hardly be questioned. He was found in actual possession and his only feasible defense would be that the Pontiac was not his and had been loaned to him, and thus that he had no knowledge of the heroin concealed in the car. His testimony that he had never seen the car before met this Court’s test for materiality. Blackmon, supra. . The stipulation as read by government counsel was as follows : “Now comes the government, by and through its counsel of record in the above cause, Anthony C. Aguilar, joined by counsel for the defendant, Alan Brown, and the defendant, Oscar Pequeño De Leon, personally, and moves the court to accept the following stipulation in evidence and that the stipulation in all particulars is true and correct. “(1) That on or about September 27, 1971, the Federal Grand Jury for the Laredo Division of the Southern District of Texas, returned an indictment which was filed under criminal number 71-L-910, and was entitled United States of America versus Oscar Pequeño De Leon. The indictment charged that Oscar Pequeño De Leon unlawfully, knowingly, and intentionally possessed with intent to distribute approximately fifty-one ounces of heroin hydrochloride, in violation of Title 21, United States Code, Section 841(a) (1), and that Oscar Pequeño De Leon did unlawfully, knowingly, and intentionally import into the United States approximately fifty-one ounces of heroin hydrochloride, in violation of Title 21, United States Code, Sections 952(a) and 960(a)(1), and that Oscar Pequeño De Leon did unlawfully, knowingly, and intentionally import into the United States approximately fifty-one ounces of heroin hydrochloride without having in effect a registration issued in his name in violation of Title 21, United States Code, Sections 957(a) (1) and 960 (a) (1). “(2) That on November 10, 1971, the said case of United States of America versus Osear Pequeño De Leon criminal number 71-L-910, was called by the United States District Court for trial and sworn testimony and other evidence was presented by the parties before the Honorable Ben C. Connally and a petit jury. At such time, the United States District Court for the Southern District of Texas, Laredo Division, was a tribunal, competent to hear said case, and the case was one in which the laws of the United States authorized an oath to be administered. “(3) That at the trial of the case of United States of America versus Oscar Pequeño De Leon, criminal number 71-L-910, Oscar Pequeño De Leon, represented by counsel, elected to testify as a witness in his own behalf, under oath and after duly taking an oath to tell the truth, such oath having been administered by the Deputy United States Clerk, a person duly authorized to administer said oath, did testify in his own behalf. “(4) That the transcript of the testimony of the witnesses under oath in criminal action number 71-L-910 is a full and complete transcript of testimony adduced during trial commencing November 10, 1971, before the United States District Court for the Southern District of Texas, Laredo Division, the Honorable Ben C. Connally presiding. “We, the undersigned, have read, understand, and agree to the foregoing stipulation.” and it is signed by myself, counsel for the defendant and by the defendant personally. The Court: That is agreeable to you, Mr. Brown, and the defendant personally? Mr. Brown : Yes, it is.

f2d_474/html/0794-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Nick SOTELL, Plaintiff-Appellant, v. MARITIME OVERSEAS INC., and Ocean Transportation Co., Inc., Defendants-Appellees. OCEAN TRANSPORTATION COMPANY INCORPORATED, Defendant and Third Party Plaintiff-Appellant, v. WESTINGHOUSE ELECTRIC CORP., and New York Shipbuilding Corp., Third Party Defendants-Appellees. Nos. 394, 478, Dockets 35036, 34986. United States Court of Appeals, Second Circuit. Argued Jan. 29, 1973. Decided Feb. 26, 1973. Ned R. Phillips, New York City (Abraham E. Freedman, New York City, on the brief), for plaintiff-appellant. William P. Kain, Jr., New York City (Haight, Gardner, Poor & Havens, Hollis M. Walker, Jr., and Richard A. Cor-win, New York City, on the brief), for defendants-appellees and defendant and third party plaintiff-appellant. Before ANDERSON, FEINBERG and MULLIGAN, Circuit Judges. ROBERT P. ANDERSON, Circuit Judge: Nick Sotell, a sixty-five year old seaman with over forty years of sailing experience, was serving as Second Assistant Engineer aboard the t/s Ocean TJlla, owned and managed respectively by the defendants Ocean Transportation Co. and Maritime Overseas, Inc. (shipowner), when, on October 4, 1965, a turbine explosion in the port forced draft blower ripped loose pieces of asbestos insulation which injured him. He brought this action against the shipowner under the Jones Act, 46 U.S.C. § 688, and for unseaworthiness. The shipowner brought a third-party action against Westinghouse Electric Corporation, the manufacturer of the turbine, and New York Shipbuilding Corporation, the builder of the Ocean Ulla. In the primary action the jury found in favor of the shipowner; and the third-party action, tried to the court alone, was dismissed without prejudice. At the trial, Sotell testified that as part of his job in helping to secure the port boiler for its annual cleaning, he was ordered by the Chief Engineer to shut down the port forced draft blower which was located in the fidley, the highest level of the engine room. As he reached the blower, he testified that the turbine was going “like a jet,” vibrating, and throwing asbestos lagging, and that he tried to stop it with the emergency “over speed trip.” When this attempt failed, however, he began to close the steam intake valve, but, before he could take more than several turns on it, the blower exploded and he was hit in the head by some asbestos pieces which knocked him “out for a few minutes.” He then got up, finished closing the intake valve, and moved to the other side of the blower to close the exhaust valve when the Chief Engineer arrived. The only other witness on the liability issue, Chief Engineer Macon Rowse, testified that he was about forty feet below the fidley when he heard an explosion. After he started up the ladder to investigate, he heard a sound like a tube being deflated and noticed that the back pressure gage was falling. When Rowse reached the blower, within thirty seconds after the explosion, Sotell was at the exhaust valve and, without being asked, said to Rowse, “I didn’t touch them, Chief, I didn’t touch them.” The Chief Engineer testified that So-tell, contrary to proper operating procedure, must have closed the exhaust valve before closing the intake or supply valve, and that after the explosion, he had reopened the exhaust valve. This- explained the noise of deflation, accompanied by the drop in the back pressure line after the explosion, because, if the exhaust valve had been opened at the time of the explosion, the back pressure would have dropped immediately. Additional testimony was developed at the trial to the effect that the port forced draft blower had been in good condition before the explosion and that all of its parts were in good working order afterwards, except that its casing was split open. Furthermore, Sotell admitted that he had not read the instruction book for operating this machinery, and he had not previously closed down this blower or worked with similar equipment for a number of years. So-tell also testified at trial that the intake valve was very low and that he bent down to turn it, but he had testified at the taking of his deposition that he could reach it standing up. Actually it is undisputed that the exhaust valve was at a higher level than the intake valve. The appellant claims that he was entitled to a directed verdict or a judgment notwithstanding the verdict or, at the very least a new trial. If the only evidence in the case was the undisputed fact that the plaintiff was injured by an explosion of unknown origin, then he probably would have been entitled to a verdict, Oliveras v. American Export Isbrandtsen Lines, Inc., 431 F.2d 814 (2 Cir. 1970); Van Carpals v. The S.S. American Harvester, 297 F.2d 9 (2 Cir. 1961), cert. denied, 369 U.S. 865, 82 S.Ct. 1031, 8 L.Ed.2d 84 (1962); Sprague v. The Texas Co., 250 F.2d 123 (2 Cir. 1957). Here, however, the defendant produced evidence which supported a finding that the plaintiff’s negligent actions alone were the cause of the explosion; and the court correctly charged, without objection, that the plaintiff could not recover if his negligence was the sole cause of the accident, Pisano v. The S. S. Benny Skou, 346 F.2d 993 (2 Cir.), cert. denied, 382 U.S. 938, 86 S.Ct. 389, 15 L.Ed.2d 349 (1965); Dixon v. United States, 219 F.2d 10, 16-17 (2 Cir. 1955); Donovan v. Esso Shipping Co., 259 F.2d 65, 67 (3 Cir. 1958), cert. denied, 359 U.S. 907, 79 S.Ct. 583, 3 L.Ed.2d 572 (1959); cf., Usner v. Luckenbach Overseas Corp., 400 U.S. 494, 500, 91 S.Ct. 514, 27 L.Ed.2d 562 (1971). The appellant argues, however, that he was entitled to a directed verdict or judgment n. o. v. on the ground that the defendant failed to produce sufficient evidence that he did anything wrong, or, that if he did, that it was a proximate cause of the explosion. In order to prevail in this argument, however, he must show either that there was no evidence on the point or that the evidence, when viewed in the light most favorable to the appellee, would be such that reasonable men could not find for the defendant, Fortunato v. Ford Motor Co., 464 F.2d 962, 965 (2 Cir.), cert. denied, 409 U.S. 1038, 93 S.Ct. 517, 34 L.Ed.2d 487 (1972); Compton v. Luckenbach Overseas Corp., 425 F.2d 1130, 1132 (2 Cir.), cert. denied, 400 U.S. 916, 91 S.Ct. 175, 27 L.Ed.2d 155 (1970); Armstrong v. Commerce Tankers Corp., 423 F.2d 957, 959 (2 Cir.), cert. denied, 400 U.S. 833, 91 S.Ct. 67, 27 L.Ed.2d 65 (1970). There was certainly ample evidence based upon the Chief Engineer’s testimony and certain inconsistencies in So-tell’s for the jury to conclude that the plaintiff made the mistake of closing the exhaust valve before shutting off the intake valve. Furthermore, the jury was warranted in deciding that such action was the sole cause of the explosion. While it is true that no witness specifically stated, in haec verba, that closing of the valves in the wrong order would cause an explosion, there was abundant testimony from both Rowse and Sotell that steam driven equipment must always be closed down by first shutting off the intake valve and secondly closing the exhaust valve. It was a fair inference, then, for the jury to conclude, based upon their common sense, that So-tell’s actions caused a steam pressure build-up sufficient to create the explosion, Salem v. United States Lines Co., 370 U.S. 31, 35, 82 S.Ct. 1119, 8 L.Ed.2d 313 (1962); Schulz v. Pennsylvania R. Co., 350 U.S. 523, 526, 76 S.Ct. 608, 100 L.Ed. 668 (1956); see also, Sentilles v. Inter-Caribbean Shipping Corp., 361 U.S. 107, 109, 80 S.Ct. 173, 4 L.Ed.2d 142 (1959). The trial court, after due deliberation, denied the appellant’s motion for a new trial based upon the weight of the evidence. This motion is addressed to the discretion of the trial court, and we find no reason to upset his determination, Oliveras, supra, 431 F.2d at 817; Compton, supra. The appellant also claims error in several of the trial court’s rulings concerning the admissibility of evidence. He first contends that it was wrong for the court to sustain an objection to his cross-examination of Chief Engineer Rowse in regard to the absence of a spring-loaded exhaust valve on the port blower. While it is true that the absence of such a valve might have been probative on the issue of seaworthiness, the objection to plaintiff’s counsel’s particular question was properly sustained. Counsel had asked if the turbine had a back pressure trip to which Rowse replied in the negative but acknowledged that it was a safety device, and he further testified that the turbine had no spring-loaded exhaust valve. Plaintiff’s counsel’s next question was whether this, too, was a safety device, but defense counsel interposed an objection, which the court sustained. Plaintiff’s appeal from this ruling is not well taken because even if the spring-loaded exhaust valve was “a safety device,” such a fact was irrelevant until there was sufficient testimony, by way of foundation, to indicate that such a valve was required in order to make the vessel “reasonably suitable for her intended service,” Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 550, 80 S.Ct. 926, 933, 4 L.Ed.2d 941 (1960). But there was no testimony that a spring-loaded valve was needed, nor did counsel attempt to ask Rowse whether or not he thought one was needed. On appeal Sotell makes much of the fact that the shipowner in its third-party action against the shipbuilder attempted to show that the specifications for the ship called for a certain type of valve on the port blower which was not installed. But even if we could consider testimony from that action in regard to the primary case, it would make no difference, because there was no testimony on the point; there was nothing more than counsel’s arguments that the valve called for in the plans would have prevented the accident. Moreover, there was no proof that such a valve was needed in order to make the ship reasonably fit. The appellant also claims error in the admission into evidence of a Coast Guard Certificate of Inspection and an American Bureau of Shipping report based on examinations of the t/s Ocean TJlla while she was in dry dock during December, 1964. Sotell argues that these agencies’ approval of the condition of the vessel was irrelevant because the inspections, as shown on the face of the reports, did not include a detailed examination of the port forced draft blower. Chief Engineer Rowse, however, testified that both the Coast Guard and the American Bureau of Shipping checked all the equipment, including the turbine fan blowers; therefore, there was no error in the admission of the inspection reports. The judgment in favor of the defendants against the plaintiff is affirmed, and in light of this, the judgment dismissing the shipowner’s third-party action without prejudice is also affirmed. . The pertinent testimony was as follows: “Q. Did this turbine have a back pressure trip? A. Not a back pressure trip, no. Q. Do you know what a back pressure trip is? A. Yes. Q. That is a device which automatically knocks off the turbine if the back pressure builds up; isn’t that correct? A. That’s correct. Q. That is what is known as a safety device, isn’t it? A. Yes. Q. Did this turbine have a spring-loaded exhaust valve? A. No. Q. That also is a safety device which would automatically open the valve if the pressure were to build up inside the turbine, isn’t that correct? Mr. Kain: If your Honor please, I object on the grounds that there is no testimony in this case at this time that there is any requirements that this turbine have a back pressure trip or a spring-loaded exhaust valve. The Court: Objection sustained.”

f2d_474/html/0798-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

TECHNOGRAPH PRINTED CIRCUITS, LTD., and Technograph Printed Electronics, Inc., Plaintiffs-Appellants, v. MARTIN-MARIETTA CORPORATION, Defendant-Appellee. TECHNOGRAPH PRINTED CIRCUITS, LTD., and Technograph Printed Electronics, Inc., Plaintiffs-Appellants, v. WESTINGHOUSE ELECTRIC CORPORATION, Defendant-Appellee. TECHNOGRAPH PRINTED CIRCUITS, LTD., and Technograph Printed Electronics, Inc., Plaintiffs-Appellants, v. McDONELL AIRCRAFT CORPORATION, Defendant-Appellee. TECHNOGRAPH PRINTED CIRCUITS, LTD., and Technograph Printed Electronics, Inc., Plaintiffs-Appellants. v. INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, Defendant-Appellee. Nos. 72-1597 to 72-1600. United States Court of Appeals, Fourth Circuit. Argued Nov. 1, 1972. Decided Feb. 20, 1973. Sidney Bender, New York City (Aaron Lewittes, Leventritt, Lewittes & Bender, New York City, on brief), for plaintiff s-appellants. Edward F. McKie, Jr., Washington, D. C. (Benjamin C. Howard and Miles & Stockbridge, Baltimore, Md., on brief), for defendant-appellee, Martin-Marietta Corp. William E. Schuyler, Jr., Schuyler, Birch, Swindler, McKie & Beckett, Washington, D. C., on brief, for defendant-appellee, Westinghouse Electric Corp. Jervis Spencer Finney, Ober, Grimes & Shriver, Baltimore, Md., Charles H. Walker, Albert E. Fey and Fish & Neave, New York City, on brief, for defendant-appellee, McDonnell Aircraft Corp. Dana M. Raymond, Brumbaugh, Graves, Donohue & Raymond, New York City, Norwood B. Orrick and Venable, Baetjer & Howard, Baltimore, Md., on brief, for defendant-appellee, International Telephone and Telegraph Corp. Before BUTZNER, FIELD and WIDENER, Circuit Judges. WIDENER, Circuit Judge: These cases arose when the plaintiffs (appellants) filed patent infringement suits against the defendants (appellees) in the United States District Court for the District of Maryland. The plaintiffs are, respectively, the owner and exclusive licensee under Eisler’s United States Patent No. 2,706,697 (’697). The complaints allege that the defendants infringed Claims 4 and 10-14 inclusive of ’697. The defendants pleaded collateral estoppel, claiming that the same issues before the court had been adversely decided against the plaintiffs in Technograph Printed Circuits, Ltd. v. Bendix Aviation Corporation, 218 F.Supp. 1 (D.Md.1963), aff’d. 327 F.2d 497 (4th Cir. 1964), cert. den. 379 U.S. 826, 85 S.Ct. 53, 13 L.Ed.2d 36 (1964) (hereinafter Bendix). The district court sustained the defendants’ pleas of estoppel and dismissed the cases. We affirm on the authority of Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). In Blonder-Tongue, the Supreme Court granted certiorari following a conflict between the Seventh and Eighth Circuits as to the validity of the patent there in question. The Eighth Circuit had previously held the patent invalid in a suit by the Foundation as plaintiff against another defendant. The Seventh Circuit, in a suit by the Foundation as plaintiff, found the patent to be valid and infringed by Blonder-Tongue Laboratories. The court did not determine the issue of validity but overruled Trip-lett v. Lowell, 297 U.S. 638, 56 S.Ct. 645, 80 L.Ed. 949 (1936), insofar as it foreclosed a plea of estoppel by judgment by a defendant facing a charge of infringement of a patent brought by a plaintiff which had previously, as a plaintiff, had the patent declared invalid in litigation concerning the validity of the patent. The court abolished the doctrine of mutuality of estoppel in such patent cases. It held that a plea of es-toppel by judgment could be affirmatively asserted by a defendant where the issue decided in the prior adjudication was identical with the one presented in the present action, where there was a final judgment on the merits in the prior case, and where the party-plaintiff against whom the plea was asserted was a party-plaintiff, or was in privity with such party-plaintiff, who received the adverse decision in the prior adjudication. The following excerpt from the opinion is the best expression of the court’s reasoning and explains the standards to be followed in determining whether or not such a plea of estoppel should be sustained: “Even conceding the extreme intricacy of some patent cases, we should keep firmly in mind that we are considering the situation where the patentee was a plaintiff in the prior suit and chose to litigate at that time and place. Presumably he was prepared to litigate and to litigate to the finish against the defendant there involved. Patent litigation characteristically proceeds with some deliberation and, with the avenues for discovery available under the present rules of procedure, there is no reason to suppose that plaintiff patentees would face either surprise or unusual difficulties in getting all the relevant and probative evidence before the court in the first litigation. “Moreover, we do not suggest, without legislative guidance, that a plea of es-toppel by an infringement or royalty suit defendant must automatically be accepted once the defendant in support of his plea identifies the issue in suit as the identical question finally decided against the patentee or one of his privies in previous litigation. Rather, the patentee-plaintiff must be permitted to demonstrate, if he can, that he did not have ‘a fair opportunity proeedurally, substantively and evi-dentially to pursue his claim the first time.’ Eisel v. Columbia Packing Co., 181 F.Supp. 298, 301 (D.C.Mass.1960). This element in the estoppel decision will comprehend, we believe, the important concerns about the complexity of patent litigation and the posited hazard that the prior proceedings were seriously defective. “Determining whether a patentee has had a full and fair chance to litigate the validity of his patent in an earlier case is of necessity not a simple matter. In addition to the considerations of choice of forum and incentive to litigate mentioned above, certain other factors immediately emerge. For example, if the issue is nonobviousness, appropriate inquiries would be whether the first validity determination purported to employ the standards announced in Graham v. John Deere Co., supra [383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545]; whether the opinions filed by the District Court and the reviewing court, if any, indicate that the prior case was one of those relatively rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit; and whether without fault of his own the patentee was deprived of crucial evidence or witnesses in the first litigation. But, as so often is the ease, no one set of facts, no one collection of words or phrases, will provide an automatic formula for proper rulings on estoppel pleas. In the end, decision will necessarily rest on the trial courts’ sense of justice and equity. “We are not persuaded, therefore, that the Triplett rule, as it was formulated, is essential to effectuate the purposes of the patent system or is an indispensable or even an effective safeguard against faulty trials and judgments. Whatever legitimate concern there may be about the intricacies of some patent suits, it is insufficient in and of itself to justify patentees relit-igating validity issues as long as new defendants are available. This is especially true if the court in the second litigation must decide in a principled way whether or not it is just and equitable to allow the plea of estoppel in the case before it.” (Footnotes omitted.) 402 U.S. at 332, 91 S.Ct. at 1444. The first issue here is whether the parties-plaintiff in the present eases are the same parties-plaintiff as in Bendix. In Bendix, the plaintiffs were Techno-graph Printed Circuits, Ltd., and Tech-nograph Printed Electronics, Inc. The plaintiffs in the' present cases are Tech-nograph Printed Circuits, Ltd., and Technograph Printed Electronics, Inc. Thus, the parties-plaintiff are the same in both instances and the requirement of Blonder-Tongue that the parties-plaintiff be identical or in privity has been met. We turn to the next requirement of Blonder-Tongue: that the issues in both proceedings be identical. In Bendix, the district court held that claims 4, 5, 10, 14, 15, and 16 of ’697 and certain claims of ’165 and ’960 were invalid for obviousness and anticipation. 218 F.Supp. 1, 31, 58. In the present appeal, no issue is raised concerning ’165 or ’960. Plaintiffs claim only that claims 4 and 10-14 inclusive of ’697 were infringed by the defendants. Although it appears that the validity of claims 11, 12, and 13 of ’697 were not specifically mentioned as being invalid in Bendix, an examination of those claims shows that they were dependent on claim 10, which was held invalid in Bendix. Also, the trial court’s opinion states that the parties here conceded that the issues in suit were identical to the issues decided against plaintiffs in Bendix (340 F.Supp. 423, 425), and this is not contested on appeal. Accordingly, the requirement of Blonder-Tongue that the issues be identical in both proceedings has been complied with. The next step in determining whether Blonder-Tongue should apply is to ascertain whether plaintiffs were given a full and fair opportunity, procedurally, substantively, and evidentially, to litigate the validity of ’697 in Bendix. We conclude that they were. The Bendix trial took twenty-nine court days, during which the plaintiffs filed 458 exhibits and the defendants 543 exhibits. Several additional days were spent by the court in visiting the plants of Bendix and of licensees of the plaintiffs. Following the last day of trial, the parties filed additional briefs, over 600 pages, followed by two days of argument. No claim was made then, nor is any made now, that the court, in Bendix, excluded any relevant evidence that was offered. In its decision in Bendix, the district court discussed the background of Dr. Paul Eisler, the applicant in ’697. The court continued by setting out the claims in issue and the positions taken by the parties to the suit. The court then traced, in a painstakingly detailed process that need not be repeated here, the history of the three Eisler patents in the Patent Office. In discussing the issue of validity, the court recognized the statutory presumption of validity of a patent from the fact of its issuance and that the burden on one attacking the validity of the patent is heavy. Bendix, 218 F.Supp. at 23. The court also recognized that the presumption of validity was weakened by the failure of the Examiner to cite a number of patents pertinent to the validity of plaintiffs’ patents in issue. Bendix at 23. It then considered the state of the art prior to, and at the time of, Eisler’s claimed inventions. In discussing the state of the prior art, the court not only considered those patents considered by the Examiner in the prosecution of the Eisler patents, but also patents not mentioned by the Examiner, which the court felt were pertinent to the validity of Eisler’s patents. Concerning the metallic resist claim of ’697, the court said that patents by Newton, Stubbles, McFarland, Dejey, and Payne were not cited by the Examiner, but that they clearly disclosed a metallic resist concept. Bendix at 37. Patents which were before the court and which were considered by it with respect to the Eisler patents were: Stevens and Dallas application No. 184,419, incorporated by reference in Stevens and Dallas Patent No. 2,219,497; Bassist, Patent No. 1,525,531; Miller, Patent No. 1,804,021; Pilkington, British Patent No. 461,275; Whilems, British Patent No. 454,937; Littledale, British Patent No. 327,356; O’Connell, Patent No. 2,-288,735; the Russian Patent 59,791 to Abramson and Kabakova and the article published by them in 1940; Ducas, Patent No. 1,563,731; Norris, Patent No. 2,282,203; and Rubin, Patent No. 2,-443,119, as well as others. See Bendix, supra, 218 F.Supp. 1. The district court considered the Stevens and Dallas application to be a complete anticipation of the alleged Eisler inventions. But the court did not stop there; it continued, saying: “Should another court find that the alleged Eisler inventions were not identically disclosed or described in the Stevens and Dallas application, this court unhesitatingly finds and holds that ‘the differences between the subject matter sought to be patented and the prior art’ were ‘such that the subject matter as a whole would have been obvious at the time the (alleged) invention(s) (were) made to a person having ordinary skill in the art to which said subject matter pertains’.” (35 USC § 103) “Even apart from the Stevens and Dallas application the court holds that the other prior art, cited and uncited by the Examiner conclusively shows lack of novelty.” 218 F.Supp. at 31. It found as a fact that the progress of printed circuitry was attributable to the development of a satisfactorily bonded metal clad laminate rather than any gain in the knowledge of the printing and etching of metals. The court said: “. . . many were working at about the same time as Eisler on printing and etching techniques. None succeeded commercially until a satisfactory bonding of metal to insulation was obtained; thereafter, many succeeded.” 218 F.Supp. at 52. Throughout the district court’s opinion in Bendix, there is shown painstaking deliberation by the court to consider the contentions presented by both sides. There is absolutely no evidence that the plaintiffs did not have a full and fair opportunity to litigate the validity of patent ’697 in Bendix, procedurally, substantively, and evidentially. The opportunity to litigate standards of Blonder-Tongue were met in the district court. The patents having been declared invalid by the district court, plaintiffs appealed to this court. Both parties filed extensive briefs and were given two hours each for oral argument. Plaintiffs, on appeal, urged that the lower court had erred in holding that the Stevens and Dallas application was an anticipation of the Eisler patents in suit. In oral argument, counsel for Bendix admitted that the Stevens and Dallas application was not an anticipation of the metallic resist method of ’697, so this court was not misled by the too broad holding of the district court. The plaintiffs next urged that the district court erred in holding that the Eis-ler patents were invalid for obviousness. They contended that the district court failed to use an objective standard in determining the issue of obviousness. The standard they claimed the court should have used was whether or not the Eisler inventions, at the time they were made, were obvious to a person of ordinary skill in the art. One of the basic themes of plaintiffs’ appeal in Bendix, then, was that the district court applied the wrong standard as to obviousness and thus failed to grasp the issues and possibly the technical aspects of the subject matter in suit. This court considered the above allegations along with the other contentions raised by the plaintiffs in their appellate briefs and affirmed the decision of the district court. The affirmance was: “After careful consideration of the record, the arguments and the briefs of counsel, we are persuaded that the patent claims are invalid for obviousness in the light of the prior art for the reasons discussed in the opinion of the District Court. Technograph Printed Circuits, Ltd. v. Bendix Aviation Corp., D.C.Md., 218 F.Supp. 1. Affirmed.” 327 F.2d at 498. Instead of mentioning anticipation in the opinion, the contentions raised by the plaintiffs as to obviousness were considered and rejected. In affirming the district court’s decision, the court squarely held plaintiffs’ patent claims were invalid for obviousness, necessarily holding that the trial court did apply an objective standard in determining the issue of obviousness. Having received an adverse decision from a panel of this court, plaintiffs filed a Petition For Rehearing En Banc. In their petition, they stated that Bendix was a test case and contended that the district court and the panel of this court both failed to apply the objective test for obviousness. They also contended that since Bendix’s counsel admitted in oral argument that the Stevens and Dallas applications did not anticipate the metallic resist method of ’697, the panel should not have affirmed on the basis of the district court’s opinion as to obviousness because it was in error as to the anticipation issue. The court did not grant the Petition For Rehearing, emphasizing the decision of its panel. Plaintiffs next sought certiorari in the United States Supreme Court, which was denied in Technograph Printed Circuits, Ltd., et al. v. Bendix Corp., 379 U.S. 826, 85 S.Ct. 53, 13 L.Ed.2d 36 (1964). In the face of recited adverse rulings in Bendix, the plaintiffs continued with infringement suits here, in the same district court, against the present defendants, relying on the rule of Triplett for the proposition that an adverse adjudication as to the claims of infringement of a patent does not preclude another suit on the same claims against a different defendant. While these suits were pending, in May, 1971, the Supreme Court decided Blonder-.Tongue. There, as recited before, the court overruled Triplett to the extent of allowing a plea of collateral estoppel under the conditions set forth in Blonder-Tongue. The defendants here then pleaded collateral estoppel and moved to dismiss on the basis of Blonder-Tongue. After careful consideration of the briefs and argument of counsel for all parties involved, consideration of the Bendix case and its history and record, and a consideration of what plaintiffs alleged to be new evidence, the district court granted the motion to dismiss. The court below held as follows: “It is the Court’s firm opinion that: (A) Plaintiffs in Bendix had ‘a fair opportunity procedurally, substantively and evidentially to pursue’ their ‘claim the first time’; (B) the standards with respect to obviousness announced in Graham v. John Deere, 383 U.S. 1, 10, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) were met; (C) The opinions in the Bendix case do not indicate that it was one of those ‘rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit’; (D) the plaintiffs were not deprived ‘without fault’ of their own ‘of crucial evidence or witnesses’ in the Bendix case; and (E) ‘it is just and equitable to allow the plea of estoppel’ in these cases.” (Footnotes omitted) 340 F.Supp. at 425. The district court set forth in detail its reasons for granting the motion in a well written opinion by Judge Watkins. 340 F.Supp. 423. The plaintiffs appealed. Their first contention in this court is that Bendix determined that the metallic resist process of ’697 was disclosed by Eisler’s filing of patent ’960 on February 3, 1944. Thus, plaintiffs contend that the lower court’s dictum about possible invalidity of ’697 for indefiniteness, both in Bendix (218 F.Supp. at 43) and below (340 F.Supp. at 433), was wrong. The argument is also made by inference in plaintiffs’ first contention that the district court’s ruling on anticipation was also erroneous. Since this court in Bendix affirmed the district court’s holding of invalidity of the Eisler patents, including ’697, on the basis of obviousness, in light of the prior art, it is difficult to see the materiality of plaintiffs’ first point. The issue in the present cases is whether plaintiffs are estopped from litigating the validity of patent ’697 after this court’s affirmance in Bendix holding that ’697 was invalid for obviousness, not whether a dictum of the district court and a point previously disposed of by concession are free from objection. We are of opinion that the first contention of plaintiffs does not disclose error. The second point on appeal is that both the district court and this court in Bendix “wholly failed to grasp the technical subject matter and issues in suit.” Blonder-Tongue, 402 U.S. at 333, 91 S.Ct. at 1445. This point is based on the holding of the district court in Bendix that the Stevens and Dallas application anticipated all three of Eisler’s patents. Plaintiffs also say that the district court misread Stevens and Dallas and Whilems as teaching a metallic resist process. Because of this court’s reliance in jBendix on the district court’s opinion as to obviousness, plaintiffs contend that both courts were confused as to the subject matter in suit in Bendix. Contrary to plaintiffs’ assertion, the fact that all contentions concerning anticipation were disposed of without controversy and not considered by this court made it crystal clear that they were no longer any part of the case. To repeat, during oral argument, counsel for Bendix admitted that the Stevens and Dallas application was not an anticipation of the metallic resist method of ’697. This court did not affirm the district court in Bendix on the basis of anticipation, but on the ground of obviousness. Thus, the panel did understand the effect of the disclaimer by Bendix’s counsel and neither approved of nor considered the district court’s holding with reference to anticipation in affirming the decision of invalidity as to ’697. Having again reviewed the actions of the district court in Bendix, we are of opinion that the district judge did not misconstrue Whilems or Stevens and Dallas to the extent that he wholly failed to understand the technical subject matter and issues. Whilems, the Stevens and Dallas application, and Eis-ler all concerned themselves with the use of various printing and engraving techniques to make electrical circuits. Where the district court erred in Bendix on the issue of anticipation was his necessary holding that the precise claims of the Stevens and Dallas application antic-' ipated Eisler ’697. Even if Whilems and the Stevens and Dallas application were so misconstrued by the district court, we are of opinion that the opinion in Bendix clearly shows that this was not “one of those relatively rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit.” The issue of anticipation having been removed, there is no evidence to show that this court wholly failed to grasp the situation in Bendix, either the issues or technical subject matter. Plaintiffs next contend that the district court, in Bendix, failed to apply the standards set out in Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). They allege that it failed to indicate why it would have been obvious to a person of ordinary skill in the electrical art to look to the non-electrical arts to make bimetallic conductive pathway patterns for electrical components. Further, it is argued that since the district court misread the Stevens and Dallas application, it was not able to accurately apply the objective standards of Graham. Graham was decided subsequent to Bendix but did not change the test of 35 U.S.C. § 103. It merely set out inquiries to be made in determining whether a patent is obvious under § 103 and gives effect to the objective test for obviousness set out in the statute. In Blonder-Tongue, the court said that one of the appropriate inquiries where the issue was that of obviousness should be “. . . whether the first validity determination purported to employ the standards announced in Graham v. John Deere Co., supra.” 402 U.S. at 333, 91 S.Ct. at 1445. In the instant cases, it is the opinion of the court that the district court in Bendix did employ the standards required by Graham. The district court specifically held that the Eisler patents, including ’697, were invalid for obviousness because they “would have been obvious at the time the [alleged] invention [s] [were] made to a person having ordinary skill in the art.” 218 F.Supp. at 31. Throughout the district court’s opinion, it discussed in detail the scope and content of the prior art as well as the differences between the prior art and the claims at issue in Bendix. 218 F.Supp. 1, 25-38. Concerning the level of ordinary skill in the art, it is inconceivable that the district court could have held the Eisler patents invalid because they “would have been obvious at the time the [alleged] invention[s] [were] made to a person having ordinary skill in the art to which said subject matter pertains” without considering such a standard. At 218 F.Supp. 24, the court said: “When available literature, both patents and publications, not cited, is considered, and also the ability of persons unaware of the alleged inventions to reach the same results by the same means, the court has no hesitation in holding the patents, and the claims in suit, to be invalid.” This court is satisfied that the just quoted language from Bendix shows that the district court did consider the level of ordinary skill in the art in determining that Eisler’s patent ’697 was invalid for obviousness and that the standard used by the district court is compatible with that required by Graham. Plaintiffs also raise an issue that the Norris Patent No. 2,282,203 (’203), issued May 5, 1942, was improperly considered by the court in Bendix. Even if this were true, plaintiffs have shown no reason why they could not have made the same argument to this court in the Bendix appeal. They had a fair chance to litigate the issue in Bendix and it may not be raised now. In all events, it does not show that the district court, in Bendix, did not grasp the technical subject matter or the issues involved. The fourth point on appeal is that plaintiffs were deprived of crucial evidence through no fault of their own. The crucial evidence to which plaintiffs refer is the September 30, 1943 notes of one Milton D. Rubin. They contend that counsel for Bendix and Rubin, himself, misled them into a self-confessed failure to get access to the Rubin notes. They argue that they should not be collaterally estopped from asserting the validity of ’697 because not having the Rubin notes prevented them from having a full and fair opportunity to litigate the issue of validity in the Bendix case. First, the plaintiffs allege that the Rubin notes were crucial evidence because they wanted to show that Rubin, being a person well beyond the ordinary skill in the art, had experimented with dissimilar metals but failed to discover the metallic resist process revealed in ’697. They argue that these notes, showing a failure to achieve the metallic resist process by one skilled in the art, could have resulted in a different result on the issue of obviousness of ’697 in the Bendix case. It should first be pointed out that the Supreme Court, in Graham, gave effect to the objective test for obviousness under § 103. After setting out the three basic factual inquiries to be made in applying such objective test, the opinion then stated: “Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter to be patented. As indicia of obviousness or nonob-viousness, these inquiries may have relevancy.” 383 U.S. at 17, 86 S.Ct. at 694. Thus, the failure of others to achieve the results of an allegedly valid patent does not necessarily make that patent non-obvious; such failure is only evidence that the court may look to in applying the objective test of § 103 along with all the other evidence in the case. It is not controlling as a matter of law and is a secondary consideration. We turn now to the question of just how crucial the Rubin notes were to plaintiffs’ case in Bendix. At p. 38 of their brief, plaintiffs state that the Rubin notes, “plus the stated prior art failures, is objectively persuasive of obviousness of ’697.” Although plaintiffs’ statement may be abstractly correct, we believe that the Rubin notes, had they been introduced in the Bendix trial, probably would not have caused a different result. We feel that these notes would have been merely cumulative evidence entitled to secondary consideration. See Graham. In plaintiffs’ appeal in Bendix, the point is raised that many who possessed more than ordinary skill in the art had failed to discover the processes described by Eisler’s alleged inventions, thus showing non-obviousness. (See Brief of Plaintiffs in Bendix, p. 30.) Rubin’s notes were at best cumulative. This court rejected this argument then, and we are of opinion now that the presentation of the Rubin notes would not have changed our decision, especially since they were cumulative evidence of a secondary character. We do not then consider the Rubin notes crucial evidence within the meaning of Blonder-Tongue. Assuming, however, the Rubin notes to be crucial evidence, the record shows that plaintiffs were not deprived of them through no fault of their own. Technograph purchased Rubin’s patent ’119 on July 7, 1954, for 1500 shares of Technograph common stock, but did not get his notes as to the conception of the patent. Early in 1961, as part of the pre-trial procedures, Bendix filed a “Supplemental Answer to Plaintiff’s Interrogatory 6,” which had asked Bendix to identify each instance of alleged prior invention of the subject matter of the patents in suit. Bendix’s supplemental answer said that claims 4 and 10 through 16 of ’697 were conceived of by Rubin as early as September, 1943. [The date of the notes is 9/30/43] (See Appendix B, p. B-12.) Pursuant to this information, plaintiffs interviewed Rubin and his attorney on September 5, 1961. At this conference, Rubin informed the plaintiffs that if they wanted him to search his files for such information, he would have to be paid. The plaintiffs assumed, without any basis, that Rubin wanted something in excess of his regular rates. They then terminated the interview because they say they felt that the Rubin process was fully set forth in his patent and that it was not related to the Eisler patents in suit. The plaintiffs paid Rubin and his counsel for their time spent in the interview and pursued the matter no further. On September 22, 1961, counsel for Bendix advised the trial court and plaintiffs’ counsel that Rubin would testify in the Bendix case. In outlining the general testimony Rubin was expected to give, Bendix’s counsel stated that Rubin would testify that during 1943 he conceived a process wherein “a negative representation of the desired circuit component was printed as by photographic means on the metal surface of a foil-plastic laminate, a dissimilar metal was deposited on the uneoated portions of the foil, the resist was removed, and the exposed metal was then removed by etching.” (Appendix B, p. B-37.) On September 27, 1961, Bendix’s counsel informed the trial court and plaintiffs’ counsel that Bendix had decided not to call Rubin because it had been learned that Rubin had received payment from the plaintiffs for consultative services in the same litigation. Rubin and his notes were not produced at the Bendix trial. Plaintiffs now contend that the McKie memo of September 7, 1961 shows that counsel for Bendix knew that the Rubin notes showed a failure to achieve the metallic resist process of ’697. They further allege that Bendix and Rubin misled them by implying that all the processes Rubin dealt with were set forth in his patent ’119. Thus, they argue that they did not try to get Rubin’s notes because they had his patent. We disagree with the contention that plaintiffs were misled by Bendix and Rubin. We believe that Bendix’s supplemental answer to their interrogatory filed in January, 1961 and the September 22, 1961 outline of Rubin’s expected testimony was more than sufficient to put plaintiffs on notice that Rubin might have notes on processes which were relevant to the subject matter in suit. Plaintiffs show no basis for their assumption that Rubin wanted more than his usual fee for searching his records. The truth probably is that both parties were uncertain of how Rubin’s testimony might affect their case and therefore neither party called him to testify in the Bendix trial. Additionally, plaintiffs have offered no plausible excuse whatsoever for their failure to take the discovery deposition of Rubin. In view of the supplemental answer to the interrogatory and the outline of Rubin’s proposed testimony, the failure to even attempt to take Rubin’s discovery deposition, standing alone, would be sufficient to take the Rubin notes out of the “no fault of their own” requirement of Blonder-Tongue. The fifth and final point that the plaintiffs raise here is that it is not just or equitable to estop them from reliti-gating the validity, of Eisler’s patent ’697 in view of a decision in the House of Lords on February 24, 1971 which sustained the validity of British patent No. 639,178. Plaintiffs claim that British patent ’178 is similar to Eisler’s American patent ’165, which is broader than ’697, and thus ’697, being more narrow, is a stronger patent than ’165 or ’178. From this, plaintiffs argue that they should be allowed to relitigate the validity of ’697 in light of the House of Lords decision. We disagree with plaintiffs’ contention on this point. We agree with the analysis below of the House of Lords decision. 340 F.Supp. 423, 436-437. More importantly, allowing relitigation in the light of the House of Lords decision would allow subsequent litigation in light of a decision in a foreign forum which would not have been permitted in a domestic forum by Blonder-Tongue. We are not constrained to so weaken the Blonder-Tongue ruling by encouraging disappointed plaintiff patent holders to resort to a foreign forum in order to escape the consequences of domestic procedural rules in federal courts set out by the Supreme Court. A final point which should be mentioned is that, prior to the decision in Bendix, plaintiffs had filed several actions in Chicago for infringement of the same patents. After the Bendix decision, the Chicago district court granted summary judgment of dismissal based on Bendix. The Seventh Circuit Court of Appeals reversed. Upon remand to the district court, a class action was ■commenced. The action was’ tried to the court. Before final argument, Blonder-Tongue was decided. The defendants then moved to dismiss on the ground of collateral estoppel based on Bendix. The district court in Illinois, after the decision of the district court in Maryland in the instant cas,es, sustained the pleas of estoppel, holding that plaintiffs had had a full and fair opportunity to litigate the issue of validity in Ben dix. Technograph Printed Circuits, Ltd., et al. v. Methode Electronics, Inc., et al., 174 U.S.P.Q. 197 (N.D.Ill.1972), appeal to the Seventh Circuit pending. In conclusion, we should repeat the Supreme Court’s statement in allowing the defense of collateral estoppel in patent cases: “Even conceding the extreme intricacy of some patent cases, we should keep firmly in mind that we are considering the situation where the patentee was plaintiff in the prior suit and chose to litigate at that time and place. Presumably he was prepared to litigate and to litigate to the finish against the defendant there involved. Patent litigation characteristically proceeds with some deliberation and, with the avenues for discovery available under the present rules of procedure, there is no reason to suppose that plaintiff patentees would face either surprise or unusual difficulties in getting all relevant and probative evidence before the court in the first litigation.” 402 U.S. at 332, 91 S.Ct. at 1444. Here, the same plaintiffs considered Bendix a test case by which they sought to establish the validity of Eisler’s patents ’165, ’960, and ’697. They now seek to relitigate the issue of validity as to ’697. They failed to convince the district court in Bendix of its validity, and they failed on appeal to convince us that the district court was wrong in the instant cases, plaintiffs have failed to convince the same district judge who decided Bendix that they did not have a full and fair opportunity to litigate in Bendix. Again, we agree with the district court. We are of opinion that the plaintiffs had a full and fair opportunity to litigate the validity of ’697 in Bendix and that it is just and equitable to allow defendants’ pleas of estoppel. We believe the instant cases show precisely why the Supreme Court, in Blonder-Tongue, overruled Triplett and commenced the sustaining of pleas of estoppel by judgment in certain patent cases. The judgment of the district court is accordingly Affirmed. . The first Eisler application for a United States Patent, Serial Number 520,991, was filed February 3, 1944. As a result of such application, Patent No. 2,441,960 (’960) issued on May 25, 1948. On February 27, 1948, divisional application 11,798 was filed out of which Patent No. 2,587,568 issued on February 26, 1952, and was subsequently reissued on June 12, 1956 as United States Reissue 24,165 (’165). Divisional application 11,798 was further divided by Application 261,989, filed December 17, 1951, and as a result Patent No. 2,706,697 (’697) issued on April 15, 1955. Patent ’697 is the only one in issue in this case since plaintiffs voluntarily stipulated to dismissal, with prejudice, contentions concerning patents ’165 and ’960. Patent ’697 describes what is called the metallic resist process for the manufacture of printed electrical circuits. The process starts with an insulation-backed metal foil. A negative circuit imprint is made on the foil in acid resistant ink. Dissimilar metal is then plated onto the bare foil areas. The ink is then removed from the foil areas and the foil which is then bared is etched away in an acid bath that attacks the foil, but not the dissimilar metal. This leaves unetched the dissimilar metal and the foil protected thereunder. The effect is that the plated dissimilar metal acts as a resist to protect the underlying foil areas from being etched away. . Technograph Printed Cir. Ltd. v. Martin-Marietta Corp., 340 F.Supp. 423 (D.Md. 1972), appealed in these cases. . On remand, Blonder-Tongue pleaded estoppel and the district court, although it previously had held the patent valid, sustained the plea and entered judgment for the defendant. University of Illinois Found, v. Blonder-Tongue Lab. Inc., 334 F.Supp. 47 (N.D.Ill.1971), aff’d. 465 F.2d 380 (7th Cir. 1972). . Patent 2,706,697 to Paul Eisler — April 19, 1955 “Manufacture of Electric Circuit Components.” Application February 27, 1948, Serial No. 11,798, now Patent No. 2,587,568, dated February 26, 1952, which is a division of application Serial No. 520,991, February 3, 1944, now Patent No. 2,441,960, dated May 25, 1948. Divided and this application December 17, 1951, Serial No. 261,989. CLAIMS 4. A method of manufacturing the conductive metal portions of electric and magnetic circuits of the kind including a conductive pathway pattern upon an insulation backing comprising the steps of printing a negative representation of the desired pathway pattern upon the metal surface of a sheet of foil clad insulation, thereupon depositing dissimilar metal upon the unprinted surfaces of the foil, and finally removing the foil from the imprinted areas whereby an insulation backed metallic pathway pattern is formed. 10. A method of manufacturing a component of electric and magnetic circuit systems involving an insulation backed conductive pathway pattern, which comprises providing insulation backed foil, then printing a negative representation of the pattern upon said foil, depositing a layer of metal dissimilar to the metal of said foil upon all exposed parts of said foil, then removing said representation from the foil, and finally removing all parts of the foil exposed by said removal of the representation by chemical action attacking the metal of said foil but not said deposited dissimilar metal whereby said pathway pattern is formed. 11. The method of claim 10 wherein the negative representation of the pattern is produced by letterpress printing. 12. The ■ method of claim 10 wherein the negative representation of the pattern is produced by offset printing. 13. The method of claim 10 wherein the negative representation of the pattern is produced by photo-mechanical means. 14. A method of manufacturing a component of electric and magnetic circuit systems involving an insulation backed conductive pathway pattern, which comprises providing insulation backed foil, then printing a negative representation of the pattern upon said foil with a resist medium, then depositing by electrodeposition a layer of a metal dissimilar to the metal of said foil upon all exposed parts of said foil, then removing the resist medium, and finally etching away all parts of said foil exposed by the removal of the medium in a bath attacking the metal of said foil but not said dissimilar metal whereby said pathway pattern is formed. In Bendix, claims 4, 10, and 14 were specifically held invalid. 218 F.Supp. 1, 58. An examination of claims 11, 12, and 13 shows that they are dependent on claim 10, so that the holding of invalidity as to claim 10, of necessity, invalidated these claims also. Thus, the issues before the court in Bendix and the present cases are identical. . Bendix, 218 F.Supp. pp. 3-5. . Bendix, pp. 5-7. . Bendix, pp. 7-23. . Bendix, pp. 7-23. . See 218 F.Supp. 1, 58 for the precise patent and claim numbers invalidated by the decision. . This might possibly be relevant if it were intended to show that the district court was confused about the subject matter in suit. However, even if asserted for this proposition, this court is of opinion that it is without merit. . See note 10. The continued assertion of this point, disposed of by concession in the Bendix appeal, might lend itself to the inference that it is a tactical diversion. . The BendAx opinion shows that the trial judge understood the technical subject matter and the issues in suit. He spent four days of travel visiting the plants of licensees and of Bendix; spent twenty-nine court days trying the case; and had numerous pre-trial conferences. Plaintiffs do not contend that his description of the Eisler patents in BendAx was wrong or that his description of plaintiffs’ contentions at 218 E.Supp. 6 was inaccurate. They merely assert that he misread two of the numerous patent documents discussed in the opinion. Surely even if this were so, it would not be a case where a judge “wholly fails to grasp the technical subject matter and issues in suit.” As the Supreme Court said in Blonder-Tongue: “But assuming a patent case so difficult as to provoke a frank admission of judicial uncertainty, one might ask what reason there is to expect that a second district judge or court of appeals would be able to decide the issue more accurately.” 402 U.S. at 331, 91 S.Ct. at 1444. . “ . . . under § 103, the scope and content of the prior art are to be determined ; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined.” 383 U.S. at 17, 86 S.Ct. at 694. . Section 103 of 35 U.S.C. provides that a patent is invalid for obviousness “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.” . 218 F.Supp. at 31. . The use of an objective standard, in accordance with § 103, in determining the issue of obviousness has been the rule in this circuit at least since 1961. Honolulu Oil Corporation v. Shelby Poultry Company, 293 F.2d 127, 131 (4th Cir. 1961). There is no reason to believe nor evidence to show that the district court, in Bendix, applied anything other than the objective test of obviousness required by Graham. The record shows that plaintiffs’ main argument in their Petition For Rehearing En Banc to this Court in Bendix was that an objective standard was not used in determining the issue of obviousness. With the issue then squarely before the court, the Petition was not granted, and again we do not accept the argument on this point. In Anderson’s-Black Rock v. Pavement Co., 396 U.S. 57, 90 S.Ct. 305, 24 L.Ed.2d 258 (1969), the court held that a patent combining known elements, a radiant-heat burner, a spreader, and a tamper and screed, on one chassis was invalid because it was “reasonably obvious to one with ordinary skill in the art.” 396 U.S. at 60, 90 S.Ct. at 307. In dealing with the issue of obviousness, the court quoted the factual inquiries set out in Graham, and then said: “We conclude further that to those skilled in the art the use of the old elements in combination was not an invention by the obvious-nonobvious standard.” 396 U.S. at 62, 90 S.Ct. at 309. Nowhere in Anderson’s-Blaolc Rook did the Supreme Court set out what was the level of ordinary skill in the pertinent art, but the court necessarily considered it because of the holding that the patent was obvious. . The district court’s discussion of the development of printed electrical circuits, the various pertinent patents and related documents, the state of the prior art, the comparison between the prior art and Eisler, is remarkably similar to the Supreme Court’s factual analysis in Graham. . The Rubin notes of September 30, 1943 read as follows: “9/30/43-Gum bichro-mate albumen photomechanical process— for producing unitary process electronic-circuit. Plate silver on plastic by mirror process of chemical deposition. Then coat with gum bichromate albumen or cold enamel. Then expose with negative having opaque lines of circuit, remainder transparent. Then treat with etching ink, and develop, removing albumen from lines of circuit, exposing the pure silver base, leaving the remainder coated. Then treat with resin (rosin, asphaltum or dragonsblood powder) if cold enamel was not used, and burn in. Then plate circuit on in copper clear the resist off with strong potash or lye (caustic) sol. and silver off with nitric acid and then silver plate and lacquer. This method can also be used for plating solder or brazing alloy on fittings to be furnace-brazed. This constitutes an accurate method of placing solder or braze at joints.” (Appendix Vol. II, p. 190a.) . Rubin’s patent No. 2,443,119 (T19) used the same metal and not a dissimilar metal when plating upon the conductive surface not covered by the greasy ink. Then the ink was removed and the metal covered by the ink was etched away by an acid bath. However, during this process, the deposited added metal was attacked by the acid as well as the base metal. Eisler’s ’697 process used a dissimilar metal over the base metal which protected the base metal under it during the etching process. . We realize that much evidence as to non-obviousness must, of necessity, be negative evidence. . It should also be noted that in plaintiffs’ suit against the United States in the Court of Claims, Rubin was a witness and the notes were before Commissioner Davis. Presumably, plaintiffs made every argument as to the effect of Rubin’s failure on the issue of obviousness of ’697. Commissioner Davis, however, recommended that ’697 be held invalid. He said, in reference to Rubin as a witness, that his testimony showed that “he routinely looked to old and well-known practices of the printing art in the search for better ways to make electrical components.” (Appendix — Yol. Ill, p. 440a.) The Court of Claims has not yet decided whether or not to accept the recommendation of Commissioner Davis or whether or not to apply the doctrine of collateral estoppel under Blonüer-Tongue. . It should also bo remembered that Rubin had sold his patent ’119 to Tech-nograph for 1500 shares of Technograph common stock. The plaintiffs state in their brief that Rubin had disposed of this stock before September 5, 1961, but the record contains no contemporary reference to such disposal. The affidavit on which the statement is based is dated June, 1971. Whether the defendants knew of Rubin’s stock ownership in Technograph is not known. . The McKie memo was written by Bendix’s counsel, which did mention the Rubin notes of September 30, 1943. (Appendix Vol. II, pp. 216a-218a.) But, there is no indication whether Rubin showed counsel these notes- or counsel found them on his own. Also, there is no indication when Bendix’s counsel first saw them. Bendix’s counsel obviously had seen the Rubin notes by January, 1961, possibly in September, 1960, when he examined Rubin’s materials on a $20 per hour consulting basis. Appendix B, pp. B-12, B-23, B-25. . Mills & Rockley (Electronics) Ltd. v. Technograph Printed Circuits Ltd., House of Lords, (decided February 24, 1971), Appendix — Vol. II, pp. 178a-204a. . Technograph Printed Circuits v. Meth-ode Electronics, 356 F.2d 442 (7th Cir. 1966), cert. den. 384 U.S. 950, 86 S.Ct. 1570, 16 L.Ed.2d 547 and 384 U.S. 1002, 86 S.Ct. 1925, 16 L.Ed.2d 1016 (1966). The basis for reversal was Triplett v. Lowell, supra, as expressed in Aghnides v. Holden, 226 F.2d 949 (7th Cir. 1955). . Technograph Printed Circuits, Ltd. v. Methode Electronics, 285 F.Supp. 714 (N.D.Ill.1968). . Plaintiffs’ Petition For Rehearing En Bane before this court in the Bendix appeal, p. 1. . Blonder-Tongue has either been applied, not applied, mentioned, or remand has been granted in light of it, in the following patent cases: University of Ill. Found. v. Blonder-Tongue Lab. Inc., 334 F.Supp. 47 (N.D.Ill.1971), aff’d. 465 F.2d 380 (7th Cir. 1972), (Blonder-Tongue on remand from the Supreme Court); Southwest Products Co. v. Heim Universal Corp., 443 F.2d 621, 624 (2nd Cir. 1971); Monsanto Co. v. Dawson Chemical Co., 443 F.2d 1035, 1038 (5th Cir. 1971), cert. den. 405 U.S. 974, 92 S.Ct. 1191, 31 L.Ed.2d 248 (1972); Grantham v. McGraw-Edison Co., 444 F.2d 210, 216 (7th Cir. 1971); Black, Sivalls & Bryson, Inc. v. National Tank Co., 445 F.2d 922, 926 (10th Cir. 1971); Woodstream Corp. v. Herter’s, Inc., 446 F.2d 1143, 1149 (8th Cir. 1971); Boutell v. Volk, 449 F.2d 673, 677 (10th Cir. 1971); Business Forms Finishing Service, Inc. v. Carson, 452 F.2d 70, 74 (7th Cir. 1971); Monsanto Co. v. Rohm & Haas Co., 456 F.2d 592, 595, 604 (3rd Cir. 1972), cert. den. 407 U.S. 934, 92 S.Ct. 2463, 32 L.Ed.2d 817 (1972); Kaiser Industries Corp. v. Wheeling-Pittsburgh Steel Corp., 328 F.Supp. 365, 370 (D.Del.1971); Hickory Springs Mfg. Co. v. Fredman Bros. Furniture Co., 330 F.Supp. 978, 980 (S.D.Ill.1971); In Re Suess Patent Infringement Litigation, 331 F.Supp. 549, 550 (Jud.Pan.Mult.Lit.1971); Butterfield v. Oculus Contact Lens Co., 332 F.Supp. 750, 761 (N.D.Ill.1971); Sampson v. Ampex Corp., 333 F.Supp. 59, 65 (S.D.N.Y.1971), motion for reargument den., 335 F.Supp. 242 (S.D.N.Y.1971); Nickerson v. Kutschera, 333 F.Supp. 1097, 1098 (D.Del.1971); Mobil Oil Corp. v. W. R. Grace & Co., 334 F.Supp. 117, 131 (S.D.Tex.1971); Blumcraft of Pittsburgh v. Architectural Art Mfg., Inc., 337 F.Supp. 853, 854 (D.Kan.1972), aff’d. 459 F.2d 482 (10th Cir. 1972); Ransburg Electro-Coating Corp. v. Spiller & Spiller, Inc., 340 F.Supp. 1385, 1389 (N.D.Ill.1972); In Re Yarn Processing Patent Validity Litigation, 341 F.Supp. 376 (Jud.Pan.Mult.Lit.1972); Blumcraft of Pittsburgh v. Kawneer Co., 341 F.Supp. 1018, 1019 (N.D.Ga.1971); Kaehni v. Diffraction Co., 342 F.Supp. 523, 526 (D.Md.1972); Dale Electronics, Inc. v. R. C. L. Electronics, Inc., 53 F.R.D. 531, 534 (D.N.H.1971).

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Gary BOWDACH, Defendant-Appellant. No. 71-2304. United States Court of Appeals, Fifth Circuit. Feb. 23, 1973. Daniel S. Pearson, Miami, Fla. (Court appointed), for defendant-appellant. Robert W. Rust, U. S. Atty., Miami, Fla., James H. Walsh, Atty., Dept, of Justice, Tampa, Fla., John J. Robinson, Atty., Dept, of Justice, Washington, D. C., for plaintiff-appellee. Before TUTTLE, GEWIN and THORN-BERRY, Circuit Judges. TUTTLE, Circuit Judge: We have held this case pending the decision by the court en banc in United States v. J. W. Robinson, etc., 472 F.2d 973. That decision was released on January 12, 1973, remanding the ease to the district court for an evidentiary hearing “to determine whether the wiretap applications in this case were properly authorized under 18 U.S.C.A. § 2516 (1).” Although the case before this panel may differ in certain material respects from that described in Robinson, we nonetheless think it appropriate to follow the procedure set forth by the en banc court in Robinson and, accordingly, we remand to the district court for an evidentiary hearing on the validity of the wiretap procedures used in this case. The case before us arises in the following context. As in Robinson, the issue was presented for the first time on appeal as to whether the wiretaps, evidence from which eventuated in the conviction of appellant Bowdach in the district court for violations of the Extortionate Credit Transactions Act, were properly authorized in accordance with the procedural requirements of Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C.A. § 2510 et seq. According to the affidavit of Henry E. Petersen, then Deputy Assistant Attorney General of the Criminal Division, Department of Justice, a formal request for authorization to apply for the wire interception order was made by the Director of the FBI in April, 1970. This request was examined by a unit of the Organized Crime and Racketeering Section of the Criminal Division which determined that the request for authorization should be granted. The file was reviewed by Petersen who then forwarded it to the Office of the Attorney General along with his favorable recommendation. On April 15, 1970 in an initialed memorandum to Will Wilson, then Assistant Attorney General of the Criminal Division, Attorney General John Mitchell responded in the following language: “This is with regard to your recommendation that authorization be given to James B. F. Oliphant, Special Attorney, Miami Strike Force, to make application for an interception order under 18 U.S.C. 2518, authorizing the Federal Bureau of Investigation to intercept wire communications for a ten (10) day period to and from three telephones subscribed to by Sonny Brock Motors, located at 1068 Northwest 36th Street, Miami, Florida and bearing telephone numbers 635-8624, 635-8625 and 635-8626 in connection with the investigation into possible violations of 18 U.S.C. 892, 893 and 894 by Gary Bowdach and Louis Cic-chini, a/k/a “Chick” Cicchini and others as yet unknown. Pursuant to the powers conferred on me by Section 2516 of Title 18, United States Code, you are hereby specially designated to authorize James B. F. Oliphant, Special Attorney, Miami Strike Force, to make the above-described application.” Upon receipt of the memorandum Petersen dispatched a letter to James B. Oli-phant advising him that he was authorized to present the application to the court. As a matter of standard procedure this letter was signed by Petersen in Will Wilson’s name. Wilson did not himself examine the file in the case. Thereafter Oliphant presented an application to the federal court. He stated therein that: “. . . the Attorney General . . . has specially designated . . . the Honorable Will Wilson to authorize the affiant to make this application for an order authorizing the interception of wire communications. The letter of authorization signed by the Assistant Attorney General is attached to this application.” Upon due consideration the court entered an order authorizing the wiretaps here at issue “pursuant to application authorized by the Assistant Attorney General . . . Will Wilson, who has been specially designated . . .’’by the Attorney General. In light of the foregoing, it would appear that this case differs from Robinson in two respects. First, in the Robinson case, it was Mitchell’s Executive Assistant, not Mitchell himself, who apparently initialed the memorandum to Will Wilson which stated, “Pursuant to the powers conferred on me by Section 2516 . you are hereby specially designated to authorize [the named individual] .. . to make the above-described application.” Here, for all that appears, it was Mitchell himself who initialed the memorandum to Will Wilson. Second, and far more important, is the fact that in this case Mitchell, by way of affidavit, averred as follows: “On April 15, 1970, I approved a request for authority to apply for an interception order in this case. Attached is a copy of my personally initialed memorandum of that date reflecting my favorable action on the request. “My memorandum of approval in this case constituted a notification to the Assistant Attorney General of the Criminal Division that the discretionary action of approving the request to make application to the court for an interception order was taken by me.” At oral argument counsel for Bowdach agreed to waive any objection to the procedure of supplementing the record by way of affidavit, provided such affidavits recited facts based on personal knowledge, and were not merely interpretative or conclusory. In his supplemental brief he now argues that the statement contained in Mitchell's affidavit falls within the latter category and thus cannot be considered, at least by this court, as a statement of facts based on personal knowledge. Because of the contention that Mitchell’s statement might be viewed as merely construing the legal impact of his memorandum to Will Wilson and, therefore, as stating a conclusion of law as to what the memorandum signified, we think we should not undertake to resolve this issue on the record before us. Upon remand the district court should determine whether Mitchell himself authorized the application or whether the memorandum in fact designated Will Wilson to undertake the discretionary act of authorization. If the court finds that the Attorney General did not himself authorize the application, then it would appear that the procedure followed in this case is, as a legal matter, virtually indistinguishable from the situation described in Robinson. If, on the other hand, the court finds that the Attorney General did in fact personally authorize the application, as his affidavit suggests, then the legal effect of this action is quite different from Robinson and the disposition of the case depends on whether or not the district court’s order authorizing the particular wiretap and the application upon which this order was based were defective inasmuch as they identified Wilson, not Mitchell, as the authorizing official. Prior to the oral argument of this case appellant Bowdach moved to remand to the district court for an evidentiary hearing on the wiretap issue or alternatively to require the government to supplement the record on appeal. The government joined in the motion to remand and we carried the motion with the case. We have concluded, on the basis of Robinson, that it would be improper to have the record in this case supplemented on appeal. We, therefore, grant'the motion to remand. Remanded for further proceedings in accordance with this order. . In pertinent part the letter reads: “ . . . [Y]ou are hereby authorized, under the power specially delegated to me in this proceeding by the Attorney General ... to make application to a judge of competent jurisdiction for an order . . . authorizing the Federal Bureau of Investigation to intercept wire communications from the above-described three telephones for a period of ten (10) days.” . Under the disposition we make of this case, of course, it will be the function of the district court to determine the actual facts pertaining to the procedures followed by the Justice Department in authorizing the application for this particular wiretap. We merely state the circumstances of the case as they have appeared to us from the affidavits submitted to this panel in order to set forth the issues which we think this case presents. . The Robinson situation turns on the interpretation of Section 2516(1), Title 18 U.S.C.A., the situation above described in Section 2518 of the Act.

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Carl Johannes ANDERSON, Appellant, v. Walter C. NEMETZ, Individually and as Chief of the City of Scottsdale Police Department, et al., Appellees. No. 72-1109. United States Court of Appeals, Ninth Circuit. Jan. 24, 1973. Rehearing Denied Feb. 20, 1973. Paul G. Ulrich (argued), Roger W. Kaufman, of Lewis & Roca, Phoenix, Ariz., for appellant. Japes G. Bond, Asst. Atty. Gen. (argued), Gary K. Nelson, Atty. Gen., Phoenix, Ariz., for appellee. Before ELY and GOODWIN, Circuit Judges, and FERGUSON, District Judge. Honorable Warren J. Ferguson, United States District Judge, Central District of California, sitting by designation. FERGUSON, District Judge: This is an appeal from a final judgment dismissing an action brought under the Civil Rights Act, 42 U.S.C. § 1983, for declaratory and injunctive relief against further prosecution under a section of the Arizona vagrancy statute. We reverse and remand. The undisputed facts reveal the following : 1. Arizona Revised Statutes § 13-991, subsec. 3 provides: “The following are vagrants and shall be punished by imprisonment in the county jail for not to exceed ninety days: * -X- * * * -X- “3. A person who roams about from place to place without any lawful business.” 2. In 1967, appellant, a 20-year-old resident of Scottsdale, was arrested by two city police officers and charged under section three of the vagrancy statute. 3. He was taken to the police station, questioned, stripped and searched for narcotics. No evidence of any crime was found and he was released on $50 bond. 4. A complaint was filed against him, and a court trial was held in the Scottsdale City Court. The officers testified that they arrested appellant because they believed he was in a place where he should not be, he had no legal business being there, and he could give no satisfactory reason why he should be there. 5. Appellant’s sole defense was the unconstitutionality of the statute. His motion to dismiss the -prosecution was denied and he was found guilty. * 6. He appealed to the Maricopa County Superior Court on the City Court trial transcript. That court denied appellant’s motion to dismiss on constitutional grounds, affirmed the conviction, and returned the case to the City Court. 7. Appellant then appealed to the Arizona Court of Appeals, again challenging the constitutionality of the statute. The Court of Appeals dismissed the appeal, holding that the Superior Court had improperly affirmed the City Court judgment instead of conducting a de novo trial. State v. Anderson, 9 Ariz. App. 42, 449 P.2d 59 (1969). 8. Anderson again appeared in the Superior Court, and a trial was conducted on the basis of the City Court transcript. Again, he challenged the constitutionality of the statute. The Superior Court found appellant not guilty and exonerated his bond, without considering the constitutional issues presented. 9. Shortly thereafter, in 1969, appellant brought this action in the district court. The uneontroverted facts before that court reveal: (a) Appellant is a Scottsdale resident. (b) He desires to walk about the streets in Arizona without being subject to arrest for vagrancy based solely upon his presence on the streets. (c) On many occasions he has walked from place to place without pursuing any business purpose, either lawful or unlawful, but merely for personal reasons. (d) He intends to continue his walking. (e) The law enforcement officers of Arizona will continue to enforce the statute against appellant for the same conduct which occurred at his original arrest. (f) During 1967, 1968 and 1969, 384 arrests were made in Scottsdale under the statute. (g) Over 90% of the arrests led to court proceedings. (h) There have been no state appellate court or federal court proceedings in which the constitutionality of any part of A.R.S. § 13-991 has been determined. 10. During the pendency of the action in the district court, the Attorney General of Arizona asked the State Legislature to repeal the statute. The legislature refused. Constitutionality The unconstitutionality of the statute on its face is plain. See Papachristou v. City of Jacksonville, 405 U.S. 156, 92 S.Ct. 839, 31 L.Ed.2d 110 (1972). Appellees concede that the statute is not constitutionally defensible and contend only that (1) appellant lacks standing to challenge its constitutionality, and (2) the federal courts should abstain from exercising jurisdiction. Standing Appellees assert that appellant lacks standing to challenge the statute because he is not presently under arrest. In Golden v. Zwickler, 394 U.S. 103, 110, 89 S.Ct. 956, 960, 22 L.Ed.2d 113 (1969), the Supreme Court reaffirmed that no federal court has jurisdiction to hold any statute void for repugnance to the Constitution “except as it is called upon to adjudge the legal rights of litigants in actual controversies.” The Court adopted the test set forth in Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941): “The difference between an abstract question and a ‘controversy’ contemplated by the Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it would be possible, to fashion a precise test for determining in every case whether there is such a controversy. Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” In Golden v. Zwickler, the plaintiff sought a declaratory judgment that the statute under which he was prosecuted for distributing anonymous political handbills was unconstitutional. The leaflets had attacked a Congressman who had run for reelection but had since become a judge. The Court held that since it was most unlikely that the former Congressman would again run for Congress, it was highly doubtful that another occasion would arise when the plaintiff would again be prosecuted for his conduct. The test is one of reality. Zwickler was prosecuted once, but because the Congressman who was the original target of the handbills would not again stand for reelection, it was not within the realm of reality that another prosecution would result under the statute. In Evers v. Dwyer, 358 U.S. 202, 79 S.Ct. 178, 3 L.Ed.2d 222 (1958), appellant refused to comply with a bus driver’s order that he move to the rear of the bus. Thereupon two police officers boarded the bus and ordered appellant to move to the rear, get off, or be arrested. Appellant chose to get off. The Court held that “[w]e do not believe that appellant, in order to demonstrate the existence of an ‘actual controversy’ over the validity of the [state] statute here challenged, was bound to continue to ride the Memphis buses at the risk of arrest if he refused to seat himself [in the rear of the bus]. A resident of a municipality who cannot use transportation facilities therein without being subjected by statute to special disabilities necessarily has, we think, a substantial, immediate, and real interest in the validity of the statute which imposes the disability.” 358 U.S. at 204, 79 S.Ct. at 179. The use of the sidewalks of Scottsdale presents the same immediate and real controversy as does the use of the buses in Memphis. In Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), the Court held that while one plaintiff had an “acute, live controversy” with the state because he had been indicted, three other plaintiffs, who sought an injunction against prosecution because they “felt inhibited” by the statute, did not have standing to maintain the action: “If these three had alleged that they would be prosecuted for the conduct they planned to engage in, and if the District Court had found this allegation to be true . . . then a genuine controversy might be said to exist. But [they] do not claim that they have ever been threatened with prosecution, that a prosecution is likely, or even that a prosecution is remotely possible. . . . [P]ersons having no fears of state prosecution except those that are imaginary or speculative, are not to be accepted as appropriate plaintiffs [in cases to enjoin a state prosecution]. . . .” 401 U.S. at 42, 91 S.Ct. at 749. Appellant Anderson’s fears of prosecution by the state are not “imaginary or speculative.” He has already been arrested once, and has endured four rounds of trial and appeals. The declared intention of the state to continue to enforce the statute against him, coupled with the 384 arrests over a three-year period in Scottsdale alone, provide a realistic basis for fear of prosecution, and serve to establish the “acute, live controversy” required for standing. Appellant also clearly has the “personal stake in the outcome of the controversy [necessary] to assure that concrete adverseness which sharpens the presentation of issues” detailed in Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968), and in Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962). In Boyle v. Landry, 401 U.S. 77, 80-81, 91 S.Ct. 758, 760, 27 L.Ed.2d 696 (1971), the Court denied standing because “[n]ot a single one of the [plaintiffs] had ever been prosecuted, charged, or even arrested under the statute .... [TJhe complaint contains no mention of any specific threat by any [law enforcement] official ... to arrest or prosecute any ... of the plaintiffs And in Poe v. Ullman, 367 U.S. 497, 508, 81 S.Ct. 1752, 1758, 6 L.Ed.2d 989 (1961), the Court held that standing was lacking because “[t]he fact that Connecticut has not chosen to press the enforcement of this statute deprives these controversies of the immediacy which is an indispensable condition of constitutional adjudication.” It is apparent that neither Boyle v. Landry nor Poe v. Ullman deprives the appellant of standing in the instant case. We hold that the appellant has standing to challenge the statute. The threat of future arrest is immediate and real. He need not suffer the ignominy of a further arrest and strip search. Standing to challenge is not a special status conferred only upon the brave or those who are willing to physically give up their liberty. The courthouse is open as well to the physically timid but intellectually and morally strong. Abstention Appellees next assert the doctrine of abstention. That concept of federalism, of course, is set forth by the Supreme Court in the companion cases of Younger v. Harris, supra, through Perez v. Ledesma, 401 U.S. 82, 91 S.Ct. 674, 27 L.Ed.2d 701 (1971), and finally in Mitchum v. Foster, 407 U.S. 225, 92 S.Ct. 2151, 32 L.Ed.2d 705 (1972). Mitchum determined that the Civil Rights Act, 42 U.S.C. § 1983, falls within the express exception to the federal anti-injunction statute, 28 U.S.C. § 2283. However, the Court emphasized the Younger v. Harris principles of equity, comity and federalism that must restrain a federal court when asked to enjoin a state court proceeding. In Younger, an injunction against a pending state criminal prosecution was reversed “as a violation of the national policy forbidding federal courts to stay or enjoin pending state court proceedings except under special circumstances.” 401 U.S. at 41, 91 S.Ct. at 749. Appellant argues that the Younger v. Harris series of decisions is inapplicable by their terms to cases such as the instant one where there is no pending state court proceeding. We agree. The sentence of Younger v. Harris following that quoted above explicitly states that “[w]e express no view about the circumstances under which federal courts may act when there is no prosecution pending in state courts at the time the federal proceeding is begun.” 401 U.S. at 41, 91 S.Ct. at 749. Moreover, Justice Stewart, in his concurring opinion joined by Justice Harlan, expressly noted that “[i]n all of these cases, the Court deals only with the proper policy to be followed by a federal court when asked to intervene by injunction or declaratory judgment in a criminal prosecution which is contemporaneously pending in a state court.” 401 U.S. at 54-55, 91 S.Ct. at 757. (Emphasis added.) Justice Brennan’s concurring opinion, joined in by Justices White and Marshall, also distinguished the Younger decisions from cases where “no state proceeding was pending at the time jurisdiction attached in the federal court.” 401 U.S. at 57 n„ 91 S.Ct. at 755. There are sound policy reasons for holding that the abstention doctrine enunciated in Younger and its companion cases should not be applied in cases where no state prosecution is pending. Mr. Justice Brennan, in a separate opinion in Perez v. Ledesma, supra, 401 U.S. at 93, 103-104, 91 S.Ct. at 686, joined by Justices White and Marshall, stated that “[t]he key predicate to answering the question whether a federal court should stay its hand, is whether there is a pending state prosecution where the federal court plaintiff may have his constitutional defenses heard and determined. ... If the state prosecution was first filed and if it provides an adequate forum for the adjudication of constitutional rights, the federal court should not ordinarily intervene. When, however, at the time of the federal hearing there is no state prosecution to which the federal court plaintiff may be relegated for the assertion of his constitutional defenses, the primary reason for refusing intervention is absent. yy Justice Brennan also noted the disruptive effect that federal intervention may have on state court proceedings. He contrasted the situation in which “there is a continuing live controversy and federal intervention is sought when there is no state prosecution in which the statute may be tested.” In such a situation, “the justification for intervention is that individuals should be able to exercise their constitutional rights without running the risk of becoming lawbreakers.” 401 U.S. at 120-121, 91 S.Ct. at 695; cf. Thoms v. Smith, 334 F.Supp. 1203, 1207 (D. Conn. 1971). In Hull v. Petrillo, 439 F.2d 1184, 1188 (2nd Cir. 1971), the court stated the purpose of the abstention doctrine to be “basically twofold: to maintain a proper working relationship between the state and federal units of government, and to avoid premature constitutional adjudication in the federal courts.” If no state prosecution is pending, “the harmonious relation between state and federal authority,” Railroad Commission v. Pullman Co., 312 U.S. 496, 501, 61 S.Ct. 643, 645, 85 L.Ed. 971 (1941), is not threatened. Moreover, it is clear that where state courts have refused to rule on constitutional issues, “premature constitutional adjudication” will not result from the federal court’s exercise of jurisdiction. Our holding that the Younger series of cases does not bar federal intervention where no state prosecution is pending is in accord with recent federal decisions. For example, in Thoms v. Smith, supra, a three-judge district court refused to abstain from deciding whether Connecticut’s “misuse of the flag” statute was constitutional, in an action brought under the Civil Rights Act. The court stated that “[bjecause there is no prosecution pending against Thoms or the class he represents, Younger is inapplicable and imposes no bar to our consideration of the merits.” 334 F.Supp. at 1206. In Hull v. Petril-lo, sufra, the court reversed the dismissal of an action for declaratory and in-junctive relief regarding the application to newspapers of an ordinance requiring a license to sell books on the street. It distinguished the Younger v. Harris series of cases on the ground that the case before it did “not concern a situation where a federal court has been called upon to enjoin a pending state prosecution.” 439 F.2d at 1186 n.l. Other courts have refused to apply the doctrine of abstention where no state prosecution is pending in Hobbs v. Thompson, 448 F.2d 456 (5th Cir. 1971); Anderson v. Vaughn, 327 F.Supp. 101 (D.Conn. 1971); and C’est Bon, Inc. v. North Carolina State Board of Alcoholic Control, 325 F.Supp. 404 (W.D.N.C.1971); cf. Cantrell v. Folsom, 332 F.Supp. 767 (M.D.Fla.1971). We hold that the Younger v. Harris series of cases is inapplicable in the absence of a pending state criminal prosecution, and accordingly there is no basis for federal abstention in this case. Three-Judge Court Appellant, in filing his action, sought the convening of a three-judge district court pursuant to 28 U.S.C. § 2281 to enjoin the enforcement of a state statute of statewide importance. The district court dismissed the action without convening the three-judge panel. The dismissal of the action was in error. The question remains as to what disposition of the proceedings should be made by this court. Appellees concede that if appellant has standing and the court does not abstain from exercising its jurisdiction, it would be a needless strain upon the administrative procedures of the federal courts to require that the district court be directed to convene the statutory three-judge court. They admit the propriety of the rule set forth in Bailey v. Patterson, 369 U.S. 31, 82 S.Ct. 549, 7 L.Ed.2d 512 (1962), that when the unconstitutionality of a statute is no longer a litigable issue, the reason for convening a three-judge court is inapplicable, and a single-judge district court has jurisdiction to make an expeditious disposition of the litigation. As was stated in Utica Mutual Insurance Co. v. Vincent, 375 F.2d 129, 131 n.1 (2nd Cir.), cert. denied, 389 U.S. 839, 88 S.Ct. 63, 19 L.Ed. 2d 102 (1967), “Congress could not have intended to require three judges to be assembled when decision could not possibly go in any manner save one.” As the result of Papachristou, supra, the unconstitutionality of the Arizona vagrancy statute is apparent. The district court can only grant appellant his relief. In order to avoid needless further proceedings, and in order to dispose of this litigation as expeditiously as is consistent with proper judicial administration, the judgment of the district court is reversed, and the cause is remanded to the district court with directions to enter a decree granting appellant injunctive and declaratory relief against further enforcement of the statute. . The Thoms court also found that the plaintiff had standing to maintain the action “in the context of active enforcement of the criminal statute” despite the fact that he had not been prosecuted under it. The plaintiff had merely sought an indication as to whether he would be prosecuted and had been told that he would be if he engaged in certain conduct. The court emphasized, however, that “[b]ecause the interest affected arises under the first amendment, we should be especially vigilant that it not go unprotected.” 334 F. Supp. at 1207. A similar finding of standing was made by the same three-judge court in Anderson v. Vaughn, infra. . Even if appellant were currently subject to a state criminal prosecution, so that the Younger v. Harris decisions were applicable, abstention would not be warranted. Younger established the criteria for determining when federal intervention is permissible even when a state court prosecution is pending. They are: (1) where irreparable injury is “both great and immediate” in that there is a threat to federally protected rights that cannot be eliminated by a defense against a single prosecution, or (2) where the state law is “flagrantly and patently violative of express constitutional prohibitions,” or (3) where there is a showing of “bad faith, harassment, or other unusual circumstanoe[s] that would call for equitable relief.” Younger v. Harris, supra, 401 U.S. at 46, 53-54, 91 S.Ct. at 755; Mitchum v. Foster, supra, 407 U.S. at 230, 92 S.Ct. 2151. The facts of this case indicate that although the tests are in the disjunctive, appellant has met all three. With reference to the first, he has asked the Arizona state courts on four occasions to declare the statute unconstitutional, without success. During three years of litigation in the state courts he did not once dispute the facts alleged by the police; he only contended that the statute was unconstitutional. The second test is also met by appellant. The unconstitutionality of the statute on its face is so patent that it is conceded by appellees. The third test is likewise met. Appel-lees assert that “[o]ne of the prime objectives of a vagrancy statute is prevention of the far more serious crimes that are likely to occur when persons are allowed to wander aimlessly about without lawful business, as portrayed by the facts of Anderson’s arrest in 1967.” No clearer statement of bad-faitli prosecution can be made. The statute is being used for the purpose of making arrests to permit investigation of other activities.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Harold T. KLEIN et al., Appellants, v. The COMMISSIONER OF PATENTS OF the UNITED STATES, Appellee. No. 72-1437. United States Court of Appeals, Fourth Circuit. Argued Nov. 2, 1972. Decided Feb. 6, 1973. James L. Bean, Washington, D. C. (Francis C. Browne, Washington, D. C., Peter K. Stackhouse, Tolbert, Lewis & Fitzgerald, Arlington, Va., and Browne, Beveridge, DeGrandi & Kline, Washington, D. C., on brief), for appellants. Fred E. McKelvey, Associate Sol. (S. William Cochran, Sol., on brief), for ap-pellee. Donald R. Dunner, Washington, D. C., Robert W. Mayer, Dallas, Tex., Ralph R. Browning, Houston, Tex., Paul E. Krie-ger, Washington, D. C., on brief, for amicus curiae, Dresser Industries, Inc. Before CRAVEN, RUSSELL and WIDENER, Circuit Judges. WIDENER, Circuit Judge: The issue decided in this patent case is whether the denial of a motion to dissolve the declaration of an interference by the Patent Office, pursuant to 35 U.S.C. § 135(a), constitutes final agency action reviewable by federal courts under the Administrative Procedure Act, 5 U.S.C. § 704. The district court granted the motion of the appellee, Commissioner of Patents, to dismiss the complaint for lack of subject matter jurisdiction and for failure to join an indispensable party. Appellants, Klein, Poage, and Robbins and Associates, Inc., appeal. On June 4, 1968, Poage filed application for a patent which the Patent Office issued on July 8, 1969, United States Patent No. 3,454,114. On August 7, 1967, Klein filed application for a patent which the Patent Office issued on August 26, 1969, United States Patent No. 3,463,247. Appellant Robbins and Associates is the owner of Poage ’114 and Klein ’247. On September 15, 1967, Norman Dyer and Roy Van Winkle (Dyer, et al.) filed application for a patent which the Patent Office issued on May 27, 1969, United States Patent No. 3,446,284. Dresser Industries is the owner of Dyer et al. ’284. Neither Dyer et al. nor Dresser were made parties to this action, although Dresser has filed an amicus brief. On December 5, 1969, Dyer et al. filed a reissue application, the purpose of which was to secure claims in addition to those claimed in their original patent issued on May 27, 1969, Dyer et al. ’284. This reissue application is presently pending in the Patent Office. Five of the claims in the Dyer reissue application are identical to five of the claims in Poage ’114 and nine are identical to nine claims in Klein ’247. All of the patents relate to rotary drilling mechanisms. After Dyer et al. filed their reissue application, interference proceeding No. 97,360 was declared by the Examiner of Patent Interferences, on July 16, 1970, between certain claims of the Dyer et al. reissue application and certain claims of Poage ’114, and, on the same day, the Examiner declared interference proceeding No. 97,361 between certain claims of the Dyer et al. reissue application and certain claims of Klein ’247. Poage and Klein moved to dissolve the interferences on the grounds that the interfering claims were not patentable to Dyer because: (1) the oath which accompanied the Dyer reissue application did not comply with the statutes (35 U.S.C. § 251) and Rules of Practice (37 CFR § 1.175) because it contained no statement of facts explaining how any error occurred in failing to claim in the original Dyer et al. application for ’284 the inventions claimed by the added claims in the Dyer et al. reissue application ; (2) six of the claims in the Dyer et al. reissue application recite elements and limitations • not found in the specifications or drawings in the original Dyer patent; (3) seven of the claims of the Dyer et al. reissue application claim inventions not covered or intended to be covered by the claims originally sought and obtained in the original Dyer patent. The Examiner denied appellants’ motions to dissolve the Interferences. Appellants, pursuant to 37 CFR § 1.181, filed a petition to the Commissioner to seek review of the decision of the Examiner. The petition was denied on November 3, 1971, by the Chairman of the Board of Patent Interferences, the Commissioner’s duly authorized delegate. See 37 CFR § 1.181(g), n. 1, supra. Appellants then petitioned the Commissioner in person, pursuant to 37 CFR § 1.183. The Commissioner refused to invoke the provisions of § 1.183 but instead forwarded the petition to the Chairman of the Board of Patent Interferences to be treated as a petition for reconsideration. The Chairman denied the request for reconsideration. Following these actions, times were set by orders entered by the Patent Interference Examiner for seeking discovery and taking depositions. Appellants subsequently filed this civil action in the District Court for the Eastern District of Virginia praying for vacation of the decisions denying the motions to dissolve the interferences and requesting an order vacating or otherwise terminating the interferences. The question of priority of invention in both of these interference proceedings has not yet been determined by the Patent Office. Section 135 of 35 U.S.C. relating to interferences, provides in part as follows: “(a) Whenever an application is made for a patent which, in the opinion of the Commissioner, would interfere with any pending application, or with any unexpired patent, he shall give notice ... [to the parties involved]. The question of priority of invention shall be determined by a board of patent interferences . . . whose decision, if adverse to the claim of an applicant, shall constitute the final refusal by the Patent Office of the claims involved. ... A final judgment adverse to a patentee from which no appeal or other review has been or can be taken or had shall constitute cancellation of the claims involved from the patent. . . . “(b) * * * “(c) Any agreement or understanding between parties to an interference, including any collateral agreements referred to therein, . . . shall be in writing and a true copy thereof filed in the Patent Office before the termination of the interference. . . . Failure to file the copy . . . shall render . . . unenforceable such agreement. . . . The Commissioner may, however, on a showing of good cause for failure to file within the time prescribed, permit the filing of the agreement . . . during the six-month period subsequent to the termination of the interference. . . * * •>:- * * * Any discretionary action of the Commissioner under this subsection shall be reviewable under section 10 of the Administrative Procedure Act. .” [Emphasis added] The Rules of Practice in Patent Cases of the Patent Office, 37 CFR § 1.201, contain a helpful description of interference proceedings, which is set out below for the purpose of clarity. “§ 1.201 Definition, when declared “(a) An interference is a proceeding instituted for the purpose of determining the question of priority of invention between two or more parties claiming substantially the same patentable invention and may be instituted as soon as it is determined that common patentable subject matter is claimed in a plurality of applications or in an application and a patent. “(b) . . . interferences will also be declared between pending applications for patent, or for reissue, and unexpired original or reissued patents, of different parties, when such applications and patents contain claims for substantially the same invention which are allowable in all of the applications involved, in accordance with the provisions of the regulations in this part.” From a reading of the above statute and regulation, it is apparent that Congress has vested with the Commissioner the duty of determining priority of invention, in the circumstances present here, and the interference proceeding is the method for such determination. Ewing v. United States ex rel. Fowler Car Co., 244 U.S. 1, 37 S.Ct. 494, 61 L.Ed. 955 (1917); ACF Industries, Inc. v. Guinn, 384 F.2d 15 (5th Cir. 1967), cert. den. 390 U.S. 949, 88 S.Ct. 1039, 19 L.Ed. 2d 1140; McCutchen v. Oliver, 367 F.2d 609, 54 C.C.P.A. 756 (1966); Goodrich-Gulf Chemicals, Inc. v. Phillips Petroleum Co., 376 F.2d 1015 (6th Cir. 1967). Once the Board of Patent Interferences makes the determination of priority, any dissatisfied party may appeal to the United States Court of Customs and Patent Appeals. However, the appealing party’s adversary may require the matter to be tried in the district court if he does not agree with the appealing party's election to seek review before the Court of Customs and Patent Appeals. The dissatisfied party may also commence an action in a district court. 35 U.S.C. §§ 141,146; 37 CFR § 1.303. Appellants contend that the final denial by the Patent Office to dissolve an interference is final agency action within the meaning of 5 U.S.C. § 701 et seq. § 704 of the Administrative Procedure Act provides in pertinent part as follows: “Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.” We are not persuaded that the Administrative Procedure Act authorizes, prior to action by the Board of Patent Interferences, judicial review of the denial of a motion to dissolve an interference. The statute requires two essential elements as a prerequisite to judicial review: (1) final agency action and (2) no other adequate remedy in a court. The question of the adequacy of the remedy should be reached only upon a determination that the agency action complained of is final. The decision to allow an interference to proceed, whether it be the initial decision by an Examiner or the final decision by the Commissioner when he refuses to dissolve the interference, is not final agency action. It is, in fact, preliminary agency action, and is at or near the first stage of the proceedings in the determination of the question of priority of invention under 35 U.S.C. § 135. When an interference is declared, parties may move to dissolve the interference. Once the motion is disposed of initially by the Examiner, there are essentially two administrative appeals of such disposition to the Commissioner or his delegate. However, a fina) refusal by the Commissioner to dissolve the interference means that, unless the parties settle, the interference will proceed to trial and the question of priority of invention will be determined in the administrative forum. There is no appeal from the final decision by the Patent Office to proceed with the determination of the' merits of the interference. To that extent, it is a final decision; however, the whole point of the proceeding is to determine priority of invention, and actions of the Patent Office prior to that determination are interlocutory in nature. We believe that judicial intervention at the initial stage of the determination of the question of priority of invention would disrupt the orderly administration of the Patent Office, which has been vested by Congress with the administrative duty of deciding the question of priority of invention. Phillips Petroleum Co. v. Brenner, 127 U.S.App.D.C. 319, 383 F.2d 514 (1967); Ewing, supra. In Ewing, the Supreme Court stated: “It is to be remembered that the law gives the Commissioner both initial and final power. It is he who is to cause the examination of an asserted invention or discovery and to judge of its utility and importance; it is he who is to judge . . . whether an application will interfere with a pending one; and it is he who, after an interference is declared and proceedings had, is the final arbiter of its only controversy, priority of invention.” 244 U.S. 1, 11, 37 S.Ct. at 497. One of the primary reasons for the finality rule in judicial review of administrative action, as codified in 5 U.S.C. § 704, is that the agency is specially suited to deal with the type of case in question, and it would weaken its effectiveness for the courts to abort the administrative procedure before the agency had completed its task. McKart v. United States, 395 U.S. 185, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969); Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U.S. 752, 767, 67 S.Ct. 1493, 91 L.Ed. 1796 (1947); Shank v. Federal Power Commission, 236 F.2d 830, 834 (5th Cir. 1956). We are thus of opinion that the action of the Patent Office in declining to dissolve the interferences here in question does not satisfy the basic requirement necessary to invoke the provisions of 5 U.S.C. § 704: the agency action complained of is not final. There exists an additional reason, based on construction of 35 U.S.C. § 135, for rejecting appellants’ argument. Sub-section (a) of section 135 provides for a declaration of interference by the Commissioner. Sub-sections (b) and (c) relate to matters not pertinent here, but sub-section (c) expressly provides that “Any discretionary action of the Commissioner under this subsection shall be reviewable under section 10 of the Administrative Procedure Act.” [Emphasis added] Sub-section (a) here under scrutiny, has no such provision. There is a compelling inference that, had Congress intended for the discretionary action of the Commissioner under sub-section (a) to be reviewable pursuant to the Administrative Procedure Act, it would have so provided as it did for sub-section (c). It should also be noted that the statute, § 135(a), expressly provides that the determination of priority of invention shall constitute the final refusal of the claims involved in the case of an applicant, or cancellation of the claims involved in the case of a patentee. The statute does not expressly say that this is the only action concerning interferences which may be considered final action of the agency, but the implication is clear that only when the question of priority of invention has been reached has the agency finally concluded its task. The inferences raised by the language of § 135 of the statute are particularly strong in view of the fact that Congress expressed an awareness of the Administrative Procedure Act; it used language consistent with the Act; and it did not provide for judicial review of § 135(a) proceedings until the issue of priority of invention had been determined by the Patent Office. Appellants have argued, with some justification, that a declaration of interference is a serious matter as far as the parties are concerned; it may, in effect, put a cloud on the patent; force the parties into costly litigation; and make it possible for a person to apply for a patent in bad faith and tie up a valid patent during the course of an interference proceeding. Congress, however, has provided the means for access to the courts under the Administrative Procedure Act. Unless such Act is complied with, being courts of limited jurisdiction, the district courts are without jurisdiction to intervene. Since we hold that the District Court properly refused to review the action taken by the Patent Office because of lack of final agency action, it is unnecessary to reach the questions of adequacy of remedy or whether the action should have been dismissed for failure to join an indispensable party. The action of the District Court is Affirmed. . Van Winkle no longer had any interest in the patent. . § 1.181 Petition to the Commissioner (a) Petition may be taken to the Commissioner (1) from any action or requirement of any examiner in the ex parte prosecution of an application which is not subject to appeal to the Board of Appeals or to the court; (2) in cases in which a statute or the rules specify that the matter is to be determined directly by or reviewed by the Commissioner; and (3) to invoke the supervisory authority of the Commissioner in appropriate circumstances. [Emphasis added) * * * * * (g) The Commissioner may delegate to appropriate Patent Office officials the determination of the petitions under this section, with the exception of petitions under § 1.183. . § 1.183 Suspension of rules. In an extraordinary situation, when justice requires, any requirement of the regulations in this part which is not a requirement of the statutes may be suspended or waived by the Commissioner in person on petition of the interested party, subject to such other requirements as may be imposed.

f2d_474/html/0826-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Joseph Carl BROWN, Appellant, and Paul Lyons v. Allyn R. SIELAFF, Commissioner of Corrections of Pennsylvania. No. 72-1635. United States Court of Appeals, Third Circuit. Submitted Jan. 30, 1973. Decided Feb. 23, 1973. Joseph Carl Brown, pro se. Michael Minkin, Asst. Atty. Gen., Dante Mattioni, Deputy Atty. Gen., E. D. Pa., and J. Shane Creamer, Atty. Gen., Philadelphia, Pa., for appellee. Before SEITZ, Chief Judge, ALDI-SERT, Circuit Judge, and LACEY, District Judge. OPINION OF THE COURT PER CURIAM: Appellant, a state prisoner, filed a complaint seeking injunctive relief and money damages under 42 U.S.C. § 1983 against “Allyn R. Sielaff, Commissioner of Correction, et al., defendant,” alleging that he witnessed a disturbance in Graterford Prison, Philadelphia, on July 23, 1971, and that immediately thereafter was transported to another state prison, where he was “compelled to suffer unwarranted solitary confinement under the directions of the defendant who is attempting to conceal abuse by his prison guards.” He also alleged that “all legal notes, books, history of courts, etc.,” disappeared in the course of his transfer. He later sought to amend his complaint by adding “as a principal defendant” Robert L. Johnson, Graterford Warden. The motion to amend was denied and an appeal was taken to this court at No. 71-2023. Upon motion of appellee this appeal was dismissed on May 3, 1972. The cause then proceeded in the district court solely against Commissioner Sielaff, who filed a motion for summary judgment with accompanying affidavits. An affidavit of the Major of the Guard at Graterford revealed that nine prison officers were injured at Graterford on July 23, 1971, and that “Joseph Brown . . . participated in the disturbance.” Brown has not denied this allegation. After the court granted the motion for summary judgment, Brown moved to vacate asserting that he had a valid claim against the prison officials for “loss of property,” and for “maintaining him in solitary confinement for a period of three months.” The motion to vacate was denied and the present appeal followed. For reasons other than those stated by the district court, we will affirm.- Although the only defendant in this action is Commissioner Sielaff, the sole allegation which directly implicates him is the vague accusation of “attempting to conceal abuse by his prison guards.” Although mindful of the admonition of Haines v. Kerner, 404 U.S. 519, 521, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), we are convinced that this allegation is not sufficiently precise to constitute an allegation of a constitutional deprivation sustained by the appellant at the hands of the named defendant. The remaining allegations do not constitute a claim against Commissioner Sielaff for which relief may be granted. There is no allegation that he participated directly or indirectly in the circumstances constituting this claim. We are not unmindful that appellant attempted to amend his complaint to add the Graterford Warden as a defendant on the issue of the missing legal materials and that an abortive appeal from a denial thereof was dismissed by us. Because appellant has not pressed this point in this appeal, we are unable to notice it. F.R.A.P. 28(b). We note, however, that appellant was given ample opportunity to contribute factual support to his general allegations relating to the missing papers, both in response to the motion for summary judgment and in his motion to vacate the judgment. This he failed to do. Therefore, even were this issue properly before us, we would not disturb the result reached by the district court on this issue. As to the solitary confinement allegation, it is sufficient to observe that no official of the institution where this alleged activity took place has been named as or identified as a party to these proceedings, Howell v. Cataldi, 464 F.2d 272 (3d Cir. 1972); nor was the solitary confinement issue raised as to the Graterford Warden. The judgment of the district court will be affirmed. . There is no allegation as to where the solitary confinement took place. Since the complaint was filed from Huntington,_ we shall assume it took place there. . We do not reach the retroactivity of Lynch v. Household Finance Corp., 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972), cf., National Land & Investment Co. v. Specter, 428 F.2d 91 (3d Cir. 1970); Gray v. Creamer, 465 F.2d 179 (3d Cir. 1972); and United States ex rel. Tyrrell v. Speaker, 471 F.2d 1197 (3d Cir. 1973).

f2d_474/html/0828-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellee, v. Harvey Bertram POLLAK, Appellant. No. 72-1896. United States Court of Appeals, Second Circuit. Argued Dec. 14, 1972. Decided Feb. 27, 1973. Arthur S. Olick, New York City (George E. Goldberg, James P. Heffer-nan, New York City, of counsel), for appellant. John J. Tigue, Jr., Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., for the S. D. of New York, Gary P. Naftalis, Asst. U. S. Atty., of counsel), for appellee. Before KAUFMAN, ANDERSON and OAKES, Circuit Judges. OAKES, Circuit Judge: This appeal is from a judgment of conviction on three counts of perjury, 18 U.S.C. § 1621, resulting in appellant’s receiving a suspended 5-year sentence and a $2,000 fine on each count. The principal claim presented is that appellant was denied a speedy trial, under the sixth amendment and the Second Circuit Rules Regarding Prompt Disposition of Criminal Cases (hereinafter the “Second Circuit Rules”). Appellant also urges that (1) he was denied a fair trial because of insufficient preparation time and impatience on the part of the trial judge during trial; (2) the trial court erred in refusing a request to charge that an answer that was “literally accurate or technically responsive, or legally truthful” was not perjurious; (3) the trial court erred in refusing to accede to the jury’s request to have the testimony of two key witnesses reread; (4) the trial court submitted too many of the questions asked appellant and his allegedly false answers to the jury; and (5) appellant was denied due process under Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), by the prosecutor’s failure to supply transcripts of the testimony of two potential defense witnesses. To understand the claims regarding lack of a speedy and a fair trial it is necessary briefly to state the sequence of events from the time of appellant’s arrest to the time of his trial. The indictment was returned on May 27, 1971, charging appellant with perjury before the SEC on August 12, 1970, and before a federal grand jury on April 22, 1971. The Second Circuit Rules took effect July 5, 1971, and on November 18, 1971, the Government filed a notice that it was ready to try the case on 10 days’ notice. On July 19, 1971, the court had ordered the Government to file a bill of particulars and to furnish appellant with copies of his testimony before the SEC and the grand jury relative to manipulation of stock in Belmont Franchising Corporation (“Belmont”), as well as copies of certain documents belonging to appellant or to the brokerage firm, Bar-ad-Shaff Securities Corporation (“Bar-ad-Shaff”), of which he was secretary-treasurer. Apparently because the ease was transferred from one Assistant United States Attorney originally in charge to another, the Government did not comply with this discovery order until, following, a trial-date conference, appellant moved to dismiss on May 10, 1972, following which the Government immediately complied. On May 12, 1972, the court, without making any findings, denied the motion to dismiss and set the case down for trial commencing May 22, 10 days later. We readily dispose of appellant’s claim of denial of a fair trial because he was given insufficient time to prepare after the bill of particulars and other sought-after documentary material were furnished pursuant to the court order for discovery. The bill of particulars reduced the answers claimed to be false in count one of the indictment from 32 to 15, in count two from 23 to 11, and in count three from 23 to 11, thereby assisting appellant in his preparation. The material requested to be furnished was appellant’s own testimony before the grand jury and documents of his own and of the company of which he was secretary-treasurer, so that he could have been expected to have at least passing familiarity with that material. This material was neither so bulky nor so complicated that 9 days’ time for preparation after its receipt was in any way insufficient. It was evident, moreover that the perjury charges in the first count related to details regarding the sale of 1100 shares of Belmont Stock by Barad-Shaff and the specifies of a meeting with one Hellerman, the controlling stockholder of Belmont; those in the second count related to a meeting between appellant. Hellerman, a “Richie” and a “Mike” (two other brokerage representatives) ; and those in the third count related to a meeting at Del Soma’s Restaurant, Hellerman’s presence there, and the backdating of a particular order ticket for Belmont stock following that meeting. It would have taken very little imagination to determine the specific line of Government attack and hence to plan whatever defense could be brought forward once the bill of particulars was filed. Appellant also argues that the trial judge was “impatient” with him and in support of this that the trial was completed in only 4 days when it was originally expected to take from a week to 10 days and that the judge “took virtually no recesses, opened Court promptly each day and stayed in session until late each afternoon.” (Brief for Appellant at 19.) We think these comments quite descriptive of high judicial conscientiousness, and the argument based upon them altogether frivolous. As for the speedy trial claim under the Second Circuit Rules, however, we are handicapped for lack of findings and under United States v. Scafo, 470 F.2d 748 (2d Cir., 1972), we must vacate the judgment and remand for further hearing on the motion to dismiss and specific findings on the issue whether there were “exceptional circumstances” justifying “periods of delay” within Second Circuit Rule 5(h). Such circumstances, we may point out, may within limits of reasonableness include the press of other business on the court or, perhaps, an extraordinary situation in the office of the prosecutor. The Government argues that it complied with the Rules because it filed a “notice of readiness” on November 18, 1971. But it had not complied with the discovery order. One question is whether its notice of readiness was therefore meaningless. In this regard, it may be remarked that there were remedies open to appellant to obtain compliance with the discovery order. Fed.K.Crim.P. 16(g). We also note the claim that at all times the Government stood ready to permit inspection of the requested documents although it was concededly and probably properly unwilling to give over originals. Whether the Government conveyed this readiness to permit inspection and whether appellant sought to make such an inspection may have some bearing on resolution of the main question. The findings for which we remand will doubtless be of assistance also in determining whether there is any substance whatsoever to the sixth amendment claim raised at oral argument under the balancing test of Barker v. Wingo, 407 U.S. 514, 530, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), a claim which in its posture as presented to us, even absent specific findings, borders on the frivolous. Appellant argues that under Bronston v. United States, 409 U.S. 352, 93 S.Ct. 595, 34 L.Ed.2d 568 (1973), reversing 453 F.2d 555 (2d Cir. 1971), he was entitled to a requested instruction in so many words that “a literally accurate or technically responsive or legally truthful” ■ answer is not perjurious. Bronston aside, however, the court correctly charged the jury that at least one statement in any one count just be “directly and unambiguously false” and gave the appellant the fairest of charges on knowledge of falsity and willfulness. Appellant fails to point to any specific question, moreover, to which his answer was “literally true” or “technically responsive.” Appellant argues that because the jury apparently asked for the transcribed testimony of the appellant and one Caricato, it was reversible error not to permit the jury to have the transcript, even though the request came only 45 minutes after the jury had retired. The jury’s request may have been based on the erroneous assumption that the transcript was available for them to take into the jury room; in fact, however, appellant himself had testified on the very day jury deliberations began and his testimony had not yet been transcribed. The judge offered to have any or all of Caricato’s or Poliak’s testimony read to the jury, but the jury foreman asked to consult with the other jurors before requesting that specific testimony be read. After consultation, the foreman did not request to have any testimony read. Appellant failed to object to the trial judge’s request that the jurors inform him of exactly what testimony they wished read and his refusal to send the trial transcript to the jury at the time and cannot now be heard to raise the point, one that in any event would ordinarily lie well within the trial judge’s power and duty to run a trial under reasonable ground rules. Cf. ABA Standards Relating to Trial by Jury § 5.2(a) (Tent. Draft 1968) (“Whenever the jury’s request is reasonable, the court . shall have the requested parts of the testimony read to the jury . ”) (emphasis supplied); United States v. De Palma, 414 F.2d 394, 396-397 (9th Cir. 1969), cert. denied, 396 U.S. 1046, 90 S.Ct. 697, 24 L.Ed.2d 690 (1970). Appellant’s Brady point fails because the two witnesses appellant claims gave grand jury testimony favorable to him were known, friendly and available to him — indeed, one was a former employee of his. Cf. Xydas v. United States, 144 U.S.App.D.C. 184, 445 F.2d 660, 668, cert. denied, 404 U.S. 826, 92 S.Ct. 57, 30 L.Ed.2d 54 (1971); United States v. Gleason, 265 F.Supp. 880, 887 (S.D.N.Y.1967). On the request to narrow, while proof of a false answer to any question in any one count will sustain a perjury conviction on that count, here the appellant did request a restricted submission. See United States v. Goldstein, 168 F.2d 666, 671 (2d Cir. 1948). Our review of the record satisfies us, however, that with the evidence taken in the light most favorable to the Government it was proper to submit to the jury all of the questions and allegedly false answers that were submitted. Judgment vacated and cause remanded for findings on the motion to dismiss. . The third essential element which you must find beyond a reasonable doubt before you may convict is that the defendant at the time he gave false testimony did so unlawfully, wilfully and knowingly. In order to satisfy the third essential element the government must establish beyond a reasonable doubt that the defendant testified falsely, and did so deliberately and consciously, knowing at the time that the testimony was false, and intended to convey the false information of what he said. . Appellant argues that in regard to count two he was charged with perjury in testifying : Q. Did you talk about anybody placing an order for a large amount of Bel- • mont Franchising? A. No. Q. Do you know what a “burst out” is? A. Do I know what a “burst out” is? Q. Yes. A. No. Q. Did you ever use the term before? A. No. Q. Was there any discussion about somebody placing an order for 20 or 25,000 shares or any large amount of Belmont and not paying for it? A. No. Q. You didn’t bear .anybody discuss that that morning? A. Placing an order for Belmont and not paying for it? Q. Yes. A. No. He says that Barad-Shaff was a market-maker and technically did not “place” an “order.” But the questions do not ask whether he or Barad-Shaff “placed an order,” but whether there was any discussion about “anybody” placing an order. There was Government proof that there was a discussion to the effect that one of the manipulators attendant at the meeting would place an order for thousands of shares of Belmont stock and then not pay for it, leaving the broker not a party to the manipulation with stock worth only a fraction of the value to which previously engineered purchases by the manipulators had pushed it.

f2d_474/html/0832-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

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In the Matter of PENN CENTRAL TRANSPORTATION COMPANY, Debtor. Appeal of MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Indenture Trustee under the New York Central and Hudson River Railroad Company Refunding and Improvement Mortgage, dated October 1, 1913. No. 71-2088. United States Court of Appeals, Third Circuit. Argued Nov. 27, 1973. Decided Jan. 31, 1973. S. Hazard Gillespie, John J. McAtee, Jr., Stephen H. Case, Davis, Polk & Wardwell, New York City, for appellant. Robert W. Blanchette, James E. Howard, Philadelphia, Pa., for appellee. Before McLAUGHLIN, VAN DUSEN and ADAMS, Circuit Judges. OPINION OF THE COURT ADAMS, Circuit Judge. The basis of this appeal is an order of the district court overseeing the reorganization of the Penn Central Transportation Company (Penn Central) permitting the use of certain escrowed funds for the improvement of an important freight yard. Morgan Guaranty Trust Company (Morgan Guaranty), trustee under one of the mortgages of the Penn Central, challenges the order, alleging that by allowing the expenditures the district court improperly permitted a dissipation of Morgan Guaranty’s security interest in the assets of the Penn Central. Proper resolution of this appeal requires that the provisions of the order, No. 437, dated September 30, 1971, D.C., 332 F.Supp. 1302, be examined in some detail, and that the appropriate criterion, the four-pronged “Central of New Jersey” test be explicated and applied. Before these two endeavors are commenced, however, it is useful to recall the Supreme Court’s admonitions regarding the purposes and principles of Section 77 of the Bankruptcy Act, 11 U.S.C. § 205, the Railroad Reorganization Statute: first, the rights of the creditors must be guarded; second, the public’s interest in the survival of the railroad as a going enterprise must be respected. The decisions of this Court, too, reflect the efforts to follow these two fundaments. See e. g., In re Penn Central Transportation Company (Appeal of First Wisconsin National Bank), 453 F.2d 520, 522 (3d Cir.), cert. denied, 408 U.S. 923, 92 S.Ct. 2493, 33 L.Ed.2d 334 (1972). I. The Yard In September, 1971, the district court granted the permission sought by the Penn Central, and entered an order allowing the Penn Central to make certain improvements to the railroad’s Selkirk, New York freight yard. The highly-automated yard, located approximately 10 miles southwest of Albany, New York, is a central link for the Penn Central’s freight lines, binding the railroad’s services to New England, New York City and Long Island with its services to the West. Prior to the district court’s order permitting the improvements, the yard could handle approximately 2700 freight ears per day. At that time, daily traffic through the yard had already exceeded the yard’s capacity, and the volume was expected to increase further, with more freight being routed through the yard as the inefficient and costly New York Harbor “floating” operation was phased out. Excess traffic through the yard was increasing the cost and lowering the productivity of the yard. To increase the yard’s ability to handle much of this excess traffic, and to thus reduce costs, Penn Central requested that it be allowed to make improvements to the yard. These improvements required approximately $2,074,549. to complete. Upon completion, it was estimated that annual savings of $1,076,000. might be realized. Thus the yard and the efficiency the improvements would generate would be important elements in the rail system and the attempts to reinvigorate the road’s freight business. II. Financing the Improvements The Selkirk yard is subject to three mortgages originally entered into by one of Penn Central’s predecessors, the New York Central Railroad Company. In order of their priorities, and with their appropriate corporate indenture trustees, these mortgages are: . 1. The New York Central and Hudson River Railroad Company 3%% Gold Bond Mortgage of June 1, 1897 (Gold Bond Mortgage), Manufacturers Hanover Trust Co., trustee; 2. The New York Central and Hudson River Railroad Company Consolidated Mortgage of June 20, 1913 (Consolidation Mortgage), Bankers Trust Company, trustee; 3. The New York Central and Hudson River Railroad Company Refunding and Improvement Mortgage of October 1, 1913 (R&I Mortgage), Morgan Guaranty Trust Company, trustee. These three mortgages covered a significant portion of Penn Central’s property. Both by past practice and by court order, Penn Central was permitted to sell certain of the encumbered properties, placing the proceeds in special escrow accounts. From the funds in these accounts, Penn Central sought to finance the improvements to the yard. The order of the district court permitted Penn Central to draw from three of these accounts in a specified sequence. First, Penn Central was to draw approximately $333,214. from the Girard Bank, and $100,264. from the Manufacturers Hanover Trust Bank (hereinafter Manufacturers Hanover). These two funds were comprised of the proceeds from the post-reorganization sales of properties covered by the three mortgages. The balance of the required appropriation, totaling approximately $1,756,477, was to come from a special fund at Manufacturers Hanover. This fund, too, was the result of sales of property. However, the sales which produced this fund were pre-reorganization. Because the amount taken from the fund was significantly larger than the amount available for disbursing in the other funds, and because the right to this fund, representing pre-reorganization sales is less clear, it is this portion of the financing provisions that has drawn the most controversy. The repayment provision of the order reflects the concern with this pre-reor-ganization fund. The repayment provision stipulated that during a twenty-four month period the railroad was to deposit the proceeds of sales of property subject to the mortgages in a fund that would be treated the same as the pre-reorganization fund. If Penn Central’s sales of property failed to generate enough to replace the withdrawal from the pre-re-organization fund, Penn Central was to provide the difference and all was to be treated as though the product of pre-re-organization sales. Examining the effects of this order at three different points in time, it can be seen that the order does make the mortgage-holders contribute to the effort to restore the Penn Central to financial solvency. To put it simply, on the day before the order the mortgage-holders had, as security for their advances, a railroad with a freight yard at Selkirk, easily disposable non-railroad properties and a fund of money. On a day during the twenty-four month repayment period, perhaps shortly after the period began, the mortgage holders’ security would consist of a railroad with an improved freight yard at Selkirk, easily disposable property and a substantially reduced fund of money. At the termination of the order the security would be comprised of a railroad with an improved freight yard, a greatly diminished amount of easily disposable property, and an amount of cash equal to the fund on hand before the order. Thus it is clear that, as a result of the order in question, the mortgage holders’ security has become less marketable and even more intertwined with the railroad’s operations. III. Legal Standards Having described the order and its economic ramifications, and bearing in mind the principles underlying a railroad reorganization, it remains to address the legal questions arising from the district court’s order. Section 77(o) of the Bankruptcy Act, 11 U.S.C. § 205(o), grants to the district court broad discretion in the application and disposition of proceeds of the sales of mortgaged property. Yet that discretion may not be completely unfettered, for in the extreme case it might result in an unconstitutional taking of the mortgage holders’ property, through the dissipation of the estate. See generally Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 55 S.Ct. 854, 79 L.Ed. 1593 (1935). Thus, it becomes necessary to define the boundary beyond which the district court may not proceed. This Court, in Central Railroad of New Jersey v. Manufacturers Hanover Trust Co., 421 F.2d 604 (3d Cir.), cert. denied, 398 U.S 949, 90 S.Ct. 1867, 26 L.Ed.2d 289 (1970), (hereinafter Central of New Jersey), adopted a four-pronged test. The test required that the district court find that certain conditions be present. If any were absent, the district court was not to permit utilization of the proceeds of the sales of mortgaged property. The requirements of the test were stated to be: “The rule for a reorganization under Sec. 77 ... is that [1] in addition to finding that the funds are presently needed and cannot be obtained elsewhere (2) the court need only conclude that reorganization is probably feasible, [3] that the money drawn-down and expended for additions and betterments will materially contribute to the possibility of successful reorganization and to the continuation of the transportation plant, or a substantial part thereof, as a going concern, and [4] that the interests of the bondholders are not thereby prejudiced.” 421 F.2d at 606. In Central of New Jersey, the expenditure was for the removal of the damaged span of a two-span drawbridge crucial to the system. The damaged span was likely to fall onto the operative span. The Court observed that, while removal of this threat would inure to the benefit of the bondholders, the expenditure did not increase the operational plant subject to the bondholders’ lien and hence was not “an addition or betterment.” As such, the expenditure could not be said to improve the bondholders’ security beyond helping to assure that their security was an operating railroad, not an inoperative one. In re New York, New Haven & Hartford R. Co., No. 30226 (D.Conn., December 7, 1961), the source of the quadrifid Central of New Jersey test, did, however, deal with expenditures for additions or betterments. The endorsement of the New Haven case in Central of New Jersey indicates strongly that the four-pronged test is also to be applied here, where the expenditure is unquestionably for an addition and betterment. The dispute in this case revolves around the district court’s application of the second element of the test, regarding the finding that “reorganization is probably feasible.” The district court in attempting to determine whether the requisite finding could be made, was faced with a difficult predicament. At the time of their petition for the expenditures, the trustees of the railroad had not filed a reorganization plan, nor was one imminent. Moreover, it was clear that any plan for reorganization would require an extended period of time to complete, and assessment of its success at any given moment might be difficult. To resolve the dilemma, the district court interpreted the “probably feasible” requirement to mean in that particular context: “Where, as in the present instance, the issue arises at a relatively early stage of the reorganization proceeding, when it is too early to make confident predictions one way or the other, I believe it should be sufficient to find merely that there is no demonstrated likelihood of failure.” At the time the order in question was entered, the approach fashioned by the district court appeared to be the only one possible. To insist on more would be to require a full examination of the trustees’ intentions before the trustees themselves had crystalized their plans, or, to defer all expenditures of this category of funds, thus making the probability of successful reorganization even more dubious. Under these circumstances, we do not disagree with the result. Nevertheless, certain questions remain. Arguably, the district court’s reformulation of the “probably feasible” test could be read to suggest that the burden of proof has been shifted. We agree with Morgan Guaranty that were such a shift to be permitted, it might well defeat that portion of the test, for the information needed to satisfy the requirement is generally within the control of the trustees of the railroad. We do not understand, however, that the district court's opinion produced such a shift. Rather, it seems to have called upon the trustees to show that at this stage, reorganization was not improbable. In the early periods of a complex and protracted reorganization, such a standard appears appropriate. We are also advised of the more recent developments in the railroad’s struggle for fiscal survival. These factors, of course, must be considered by the district court in any contemporary application of the Central of New Jersey test. Our task as an appellate court is not, however, to apply the test in the first instance. Rather, we must review the district court’s application of the test. At the time the district court was called upon to apply the Central of New Jersey rule, it did so on the basis of the evidence then available. Later evidence does not affect the propriety or inaccuracy of the district court’s findings at the time it was required to make them. The order of the district court did not require the Penn Central, while replacing the $1,756,477., to pay interest on that sum. As discussed earlier, the fund that produced the $1,756,477. was created by pre-reorganization sales, and the right to it, as between Penn Central and the mortgage holders, is contested. The fund was in an interest-bearing account at the Manufacturers Hanover. Though Penn Central is required to replace the fund, the sum restored will not equal the sum that would be present had the money remained in interest-bearing accounts. Therefore, we remand the matter to the district court with instructions to modify its order so as to include a requirement that the trustees of the railroad pay interest, at the market rate, on this fund for the period that it was not drawing interest in the account at the Manufacturers Hanover. Appeals involving the reorganization of any railroad, and especially a railroad as large and as crucial to the national economy as the Penn Central, require a court to weigh carefully the competing claims of the railroad’s creditors and the nation’s concern with its transportation system. In this case, we believe that an appropriate balance has been struck, one that will respect the interests of the creditors yet help preserve the .Penn Central as a viable railroad. An appropriate order will be entered affirming the district court with provision for the district court, on remand, to provide for interest in accordance with this opinion. . The trustees of the property of the Penn Central Transportation Company, George P. Baker, Richard C. Bond, Jervis Lang-don, Jr. and Willard Wirtz, are the named appellees in this ease and the petitioners in the district court. They will be referred to as the Penn Central in this opinion. . Central R. Co. of New Jersey v. Manufacturers Hanover Trust Co., 421 F.2d 604 (3d Cir.), cert. denied, 398 U.S. 949, 90 S.Ct. 1867, 26 L.Ed.2d 289 (1970). . “After 35 years of § 77, as amended, it is unnecessary to recanvass the two basic objectives of the statute — the conservation of the debtor’s assets for the benefit of creditors and the preservation of an ongoing railroad in the public interest. See generally 5 Collier, supra, ¶ 77.02, at 469-470. Central to the statutory objective that the reorganized company should, if at all possible, emerge as a ‘living, not a dying ... enterprise,’ Van Schaick v. McCarthy, [10 Cir.] 116 F.2d 987, 993, is the understanding that ‘a railroad [is] not like an ordinary insolvent estate.’ Palmer v. Massachusetts, 308 U.S., at 86 [60 S.Ct. 34, 84 L.Ed. 93] (Footnote omitted.)” New Haven Inclusion Cases, 399 U.S. 392, 431, 90 S.Ct. 2054, 2078, 26 L.Ed.2d 691 (1970). “While the rights of the bondholders are entitled to respect, they do not command Procrustean measures. They certainly do not dictate that rail operations vital to the Nation be jettisoned despite the availability of a feasible alternative. The public interest is not merely a pawn to be sacrificed for the strategic purposes or protection of a class of security holders whose interests may or may not be served by the destructive move.” Penn Central Merger Cases, 389 U.S. 486, 510-511, 88 S.Ct. 602, 614, 19 L.Ed.2d 723 (1968) (portion of opinion dealing with New Haven Railroad which was at that time undergoing reorganization). . The trustees estimated that $726,000 would be saved by eliminating already existing delays, and a $350,000 saving would be produced by further utilization of the yard. . See Orders 78, 192 & 271 in this Reorganization. . Since 1961, by agreement between the predecessor railroad and Manufacturers Hanover, certain properties under the mortgages were sold. The proceeds were received by Manufacturers Hanover, which then financed the purchase of rolling stock under conditional sales agreements. The Railroad's payments on the rolling stock then went into the escrow fund. . On November 27, 1972, the date of oral argument before this Court, counsel stated that as of that date Penn Central had not been in default in its repayment obligations under this order. . Manufacturers Hanover and Bankers Trust, trustees under the first and second mortgages, did not oppose the railroad’s petition. Rather, preferring a compromise to litigation, they joined with the railroad in a draft order which substantially became the order of the district court. Morgan Guaranty, however, did oppose the order and their appeal is that with which we must presently deal. . The test was first enunciated by Judge Anderson in In re New York, New Haven & Hartford R. Co., No. 30226 (D.Conn., December 7, 1961) (unreported). . Morgan Guaranty also argues that there are inadequate bases for the findings that the other three requirements of the Central of New Jersey have been met. The district court’s determination of these questions, however, is sound and will not be further reviewed.

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Alton R. WELLS, Plaintiff-Appellant, v. SHOP RITE FOODS, INC., Defendant-Appellee. No. 72-3011 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 1, 1973. John H. Chambers, Arlington, Tex., for plaintiff-appellant. Lawton G. Gambill, Fort Worth, Tex., for defendant-appellee. Before WISDOM, GODBOLD and RO-NEY, Circuit Judges. Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5th Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: This defamation suit was brought by an ex-employee against his former employer, a Texas corporation. A jury returned answers to special interrogatories upon which the District Court entered judgment for defendant. We affirm. In September of 1970, defendant Shop Rite Foods, Inc., a retail grocery chain in Texas, began an investigation into suspected thievery at its Grand Prairie, Texas, warehouse. Plaintiff Wells, a management-level supervisory employee, was instructed to inspect lunch boxes and packages belonging to employees leaving the warehouse. Additionally, Shop Rite employed a private detective agency, Denco Security Systems, to take written statements from suspected employees and to examine those employees with a polygraph. Plaintiff Wells was interrogated by Denco on October 5, 1970, and later that day was temporarily suspended from employment at a private conference with his supervisor. On October 7, 1970, Wells was given a polygraph examination at Denco’s Dallas office. No one from Shop Rite was present at this examination. Several weeks later Wells was permanently discharged. Wells alleged that he was slandered by both the acts and the words of one of defendant’s management personnel who was found to have told a union steward that Wells was fired for stealing. On appeal, Wells raises three points of error. He argues that the District Court erred (1) in refusing to submit to the jury the issue of whether Shop Rite’s acts slandered him by falsely accusing him of theft, (2) in excluding the testimony of a witness, and (3) in improperly framing one of the special interrogatories. We perceive no error. (1) As to Wells’ first contention, the District Court correctly refused to give this charge: “Do you find from a preponderance of the evidence that the posting of supervisory employees of Defendant Shop Rite Foods, Inc. at exits from Defendant’s Warehouse to check lunch boxes and packages of employees leaving the warehouse, and the employment of Denco Security Systems to investigate reported acts of theft, and the taking of written statements from various employees of defendant Shop Rite Foods, Inc. by Denco Security Systems, and the polygraphie examination by Denco Security Systems of certain employees of Defendant Shop Rite Foods, Inc. and the subsequent discharge of the individuals selected for polygraphic examination, taken together would lead a reasonably prudent individual to believe that Defendant Shop Rite Foods, Inc. was accusing all of such discharged individuals of theft ? ANSWER — ‘YES’ or ‘NO’ ” These “acts,” standing together, would not support a jury finding of slander. The mere fact of checking exiting employees shows only that Shop Rite was concerned with preventing thefts. Moreover, Wells, as a supervisory employee, performed the inspections, and was never himself inspected, so Shop Rite’s trust in him was plainly evident to all. Similarly, the employment of Denco to investigate reported acts of theft, and Denco’s interrogations and polygraph examinations, focused no attention on Wells. All that was known to the warehouse workers was that reported thievery was under investigation. No one knew who was being investigated. Finally, Wells’ discharge, even when viewed against the background of an aroused employer seeking to curb employee dishonesty, does not amount to a slanderous accusation of theft. Wells was a supervisory employee who could be dismissed without cause, and he was discharged several weeks after the Den-co investigation. Merely ceasing to be an employee does not prove discharge, and it certainly does not prove the reason for discharge, if any. The District Court correctly refused to ask the jury to speculate with these “acts.” (2) Wells next objects to the District Court’s refusal to permit a witness, Clovis Brown, to testify that several Shop Rite employees had told him that they had heard that Wells had been discharged for stealing. This testimony was hearsay and was properly excluded. (3) Finally, Wells contends that the District Court erred in framing Special Interrogatory Number 2 and in conditioning an answer to Special Interrogatory Number 3 upon an affirmative answer to Number 2. Special Interrogatory Number 2 reads: “Do you find from a preponderance of the evidence that William B. Rema-tore, Jr., had a duty to Shop Rite Foods as its warehouse superintendent to inform Wallace Nettles in his capacity as job steward for Local 47 of the Teamsters Union of the reason Plaintiff Wells was discharged by Shop Rite Foods ? Answer ‘YES’ or ‘NO’ Answer: NO” The next interrogatory, Special Interrogatory Number 3, dealt with whether Rematore was performing a duty owed to defendant when he gave Nettles a reason for the discharge. The jury was instructed not to answer Interrogatory Number 3 unless it had answered Interrogatory Number 2 affirmatively. According to the testimony at the trial, Mr. Rematore, the warehouse superintendent for Shop Rite, told the union steward that Wells had been discharged for theft. Wells argues that this slanderous statement by Rematore establishes Shop Rite’s liability. Such is not the case. Assuming the statement by Rematore was slanderous, Wells still had to link it to Shop Rite for Shop Rite to be liable. In Texam Oil Corp. v. Poynor, 436 S.W.2d 129 (Tex.1968), the Texas Supreme Court approved this statement of Texas law: “An action is sustainable against a corporation for defamation by its agent, if such defamation is referable to the duty owing by the agent to the corporation, and was made while in the discharge of that duty.” 436 S.W.2d at 130. Thus, under Texam Oil Corp., Wells had the burden of proving that Rematore’s statement was made in the discharge of a corporate duty. The jury’s answer to Special Interrogatory Number 2 shows that it resolved the issue against Wells. We conclude, therefore, that Special Interrogatory Number 2 was correctly framed and that a negative answer to it foreclosed Shop Rite’s liability for Rematore’s statement. Until his statement was proven legally attributable to Shop Rite, Shop Rite’s liability had not been established. Affirmed.

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MAIDMORE REALTY CO., INC., v. MAIDMORE REALTY CO., INC. (Defendant in the Cross-Complaint). Appeal of NATIONAL BANK OF NORTH AMERICA. No. 72-1394. United States Court of Appeals, Third Circuit. Argued Feb. 2, 1973. Decided Feb. 27, 1973. Thomas Alkon, Isherwood & Colianni, Christiansted, St. Croix, V. I. for appellant. Britain H. Bryant, Bryant & Costello, Christiansted, St. Croix, V. I. for appel-lee. Before VAN DUSEN, ROSENN and HUNTER, Circuit Judges. OPINION OF THE COURT PER CURIAM: In this appeal from the judgment of the District Court of the District of the Virgin Islands, the National Bank of North America, appellant, asks this court to vacate that portion of the judgment awarding attorney fees and to remand to the district court for an eviden-tiary hearing. National Bank of North America was awarded $3,000 in attorney’s fees by the district court; it claims the district court erred in calculating this sum by not considering evidence that considerably more than $3,000 had been incurred in legal expenses in collecting the debt which was satisfied in this judgment. We find no error in the district court’s calculation of attorney fees and therefore affirm. Determination of the proper assessment of attorney fees in the present ease hinges on a close look at the progress of the underlying law suit. In 1966 the West Indies Hotel Corporation borrowed One Million Dollars from, and in exchange delivered a mortgage note to, the Meadow Brook National Bank. Ten days later Lorayne S. Hooper subordinated her prior mortgage on the West Indies property to the Meadow Brook mortgage. Nearly five years later Hooper brought a foreclosure action against West Indies in the district court. Meadow Brook National Bank, as holder of the senior mortgage, was joined as a defendant. The National Bank of North America, as successor to Meadow Brook, filed an answer admitting all the allegations of Hooper’s complaint and cross-complaining against West Indies for foreclosure of its senior mortgage. The cross-complaint sought entry of a consent judgment for the outstanding principal and interest due National, order of a foreclosure sale of the mortgaged property, a judgment and execution against West Indies for any deficiency remaining after the sale, and “court costs of this action, including a reasonable attorney’s fee and such other and further relief as to the Court may seem just and proper.” ■ Appellee, Maidmore Realty Company, by purchasing the West Indies property and the Hooper mortgage, became the successor in interest to both plaintiff and defendant after the filing of this suit. On November 10, 1971, Maidmore was substituted for the original parties by order of the court. At the same time the court granted National’s motion for summary judgment against Maidmore, as cross-defendant in the original action. Maidmore filed a motion for reconsideration; but, before the court ruled on this motion, Maidmore tendered to National payment for the outstanding principal and interest. When National, after receipt of the tender, refused to discharge the mortgage lien, Maidmore requested from the court an order accomplishing such a result. In contesting the motion for a discharge, National for the first time sought more than reasonable attorney fees for the suit at bar. It argued at a hearing before the court that paragraph 8 of the original West Indies/Meadow Brook mortgage should be considered in awarding fees. That paragraph states: In the event this mortgage and the note which it secures are placed in the hands of an attorney for the collection of any payment due thereunder or for the enforcement of any of the terms, covenants and conditions thereof, the Mortgagor agrees to pay all costs of collection, including reasonable attorneys’ fees incurred by the Mortgagee, either with or without the institution of an action or proceeding, and in addition, all other costs, disbursements and allowances provided by law. All such costs so incurred shall be deemed to be secured by this mortgage and collectible out of the Premises in any manner permitted by law or by this mortgage. National argued that before the mortgage was discharged it should be awarded the $18,500 which had been incurred over the previous five years to collect overdue payments from West Indies, as provided by the aforesaid language. National offered to provide documentation that this sum had been incurred, but the district court judge refused to hear it. Following the hearing, the district court issued a final judgment which: ORDERED, ADJUDGED AND DECREED, that the National Bank of North America be, and it is hereby awarded attorney’s fees in the sum of $3,000.00, pursuant to the Courts [sic] discretionary powers as contained in Title 5 V.I.C. § 541; and It is further Ordered that this action shall be herewith dismissed with prejudice and the aforesaid mortgage lien against the properties now owned by Maidmore Realty Co., Inc., shall be and the same is hereby discharged of record. . In appealing from that portion of the judgment awarding attorney’s fees of $3,000, National alleges that the district court ignored the explicit language of paragraph 8 of the mortgage by awarding attorney fees only in accordance with the Virgin Island statute. National argues that paragraph 8 was valid, that by its terms the court was required to consider any evidence National could present as to collection costs, and that therefore remand is necessary for an evidentiary hearing. Appellee Maidmore contends that the district court did consider paragraph 8 in awarding attorney fees, and that the award of $3,000 represented what it considered to be a reasonable fee for National’s collection efforts. We cannot accept appellee’s argument that the $3,000 award represents the amount due National in accordance with paragraph 8. The district court judge refused to hear any evidence on the collection costs which had been incurred; he expressed great reluctance to enforce the provisions of the mortgage clause: THE COURT: Well, I can leave it to the agreement of the parties and they can bring suit for the attorneys’ fees. That would be one thing. It’s another thing for me to award fees for services not connected with the litigation. And: THE COURT: I don’t think I'm going to fix any attorneys’ fees for New York or other stateside counsel where the work that they performed is unconnected with the immediate action that is before me. So, any fee I fix would be in accordance with the provisions of this code, as I understand it. In light of the judgment’s specific reference to 5 V.I.C. § 541 and absence of any reference to paragraph 8 of the mortgage, we cannot assume other than that the $3,000 was based solely on the statute. Although we interpret the district court judgment to have awarded attorney’s fees solely on the basis of the statute, we do not believe error was thereby committed. When National filed its cross-claim, it made no declaration of any collection costs prior to filing of the claim, nor did it seek enforcement of paragraph 8 of the mortgage. The foreclosure proceedings were initially instituted by Hooper and only after Maid-more purchased Hooper’s mortgage did National pursue summary judgment on its mortgage. The judgment was entered by the district court in favor of National as a matter of course in a simple foreclosure proceeding. In the cross-complaint filed by National it alleged only that there remained “unpaid to date the sum of $525,134.00, together with interest at the rate of 8% per annum from the 1st day of January, 1971,” for which it prayed a consent judgment pursuant to the terms of a stipulation filed; and it asked “[f]or court costs of this action, including a reasonable attorney’s fee. . ” Apparently, no request was made by National for any specified attorney fees, even in the motion for summary judgment, until Maidmore voluntarily tendered payment of the full principal and interest. On the application of Maidmore to have the district court order discharge of the mortgage lien, National asserted for the first time a claim in the sum of $18,500 for attorney’s fees due it “either through the provision of § 541 of Title 5 [V.I.Code] ... and also provisions of the mortgage instrument. . . .’’In its cross-complaint, however, and in its prayer there for judgment, National did not invoke the provisions of paragraph 8 of the mortgage ; it only sought “court costs of this action, including a reasonable attorney’s fee.” [Emphasis ours.] That claim for a reasonable attorney’s fee referred to the “court costs of this action-.” The district court award of a reasonable attorney’s fee was predicated upon services performed in connection with this action in accordance with National’s cross-complaint and prayer for judgment. Claims for attorney fees are items of special damage which must be specifically pleaded under Federal Rule of Civil Procedure 9(g). Western Casualty & Surety Co. v. Southwestern Bell Tel. Co., 396 F.2d 351, 356 (8th Cir. 1968). In the absence of allegations that the pleader is entitled to attorney’s fees, therefore, such fees cannot be awarded. In the present case, National did not claim attorney’s fees for collection services allegedly rendered over the five year period prior to the filing of the cross-complaint. If attorney fees per se are special damages which must be specifically pleaded, “special” attorney’s fees, such as pre-foreclosure fees and costs, are a fortiori special damages which must be pleaded. The Federal Rules of Civil Procedure contain generous provisions for amendment of pleadings, Rule 15(a), but no motion was made in the present case for any such amendment to include the prayer for special damages. Rule 15(b) provides that when issues not raised by the pleadings are tried by implicit consent, the issues shall be treated as if the pleadings had been amended. In the present case, however, attorneys for Maidmore did not impliedly accept the issue of special damages for collection costs. In fact, at the hearing, Maidmore specifically objected to this issue: Your Honor, we concede the fact that the Court ordinarily does grant some attorneys’ fees. We do not concede the fact that there has been any demand or showing or any reason why we should have to pay attorneys’ fees of $18,500. [Emphasis ours.] The award of $3,000 to National for attorney fees in connection with the present case was fair and reasonable. As we pointed out in Lucerne Investment Co. v. Estate of Belvedere, Inc., 411 F.2d 1205, 1207-1208 (3d Cir. 1969), no special legal skills or effort is required to process an uncontested foreclosure action. The judgment of the district court will be affirmed. . 5 V.I.C. § 541 provides in pertinent part: (a) Costs which will be allowed in a civil action include: . . . (6) Attorney’s fees as provided in subsection (b) of this section. (b) The measure and mode of compensation of attorneys shall be left to the agreement, expressed or implied, of the parties; but there shall be allowed to the prevailing party in the judgment such sums as the court in its discretion may fix by way of indemnity for his attorneys fees in maintaining the action or defenses thereto.

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UNITED STATES of America, v. Wilbert Will SMITH, Appellant. No. 72-1873. United States Court of Appeals, Third Circuit. Argued Dee. 14, 1972. Decided Feb. 7, 1973. Certiorari Denied May 7, 1973. See 93 S.Ct. 21G2. Michael P. Malakoff, Berger & Kape-tan, Pittsburgh, Pa., for appellant. Richard L. Thornburgh, U. S. Atty., David M. Curry, Asst. U. S. Atty., Pittsburgh, Pa., for appellee. Before SEITZ, Chief Judge, and AL-DISERT and MAX ROSENN, Circuit Judges. OPINION OF THE COURT PER CURIAM: Wilbert Will Smith was tried and convicted without a jury in the United States District Court for the Western District of Pennsylvania on a two count indictment for violation of the Selective Service Act. Smith was found to have violated 50 App.U.S.C. § 462 by (1) failing to report for an armed forces neuro-psyehiatric examination and (2) failing subsequently to report for induction. He was given a 30 day sentence on count one, and sentence was suspended on count two. On appeal Smith challenges the sufficiency of the indictment, the propriety of various Selective Service local board procedures and the determination by the armed forces that Smith was fit for service. Appellant claims that he was convicted on the first count for a different crime than that for which he was in-dieted, and that this discrepancy between indictment and proof was an amendment, fatal per se. Gaither v. United States, 134 U.S.App.D.C. 154, 413 F.2d 1061, 1071-1072 (1969); United States v. DeCavalcante, 440 F.2d 1264, 1270-1271 (3d Cir. 1971). The first count of the indictment concerned Smith’s failure to appear for a neuro-psychiatric examination on March 16, 1971. Smith had been classified 1Y for psychiatric reasons until December 23, 1970, when his local board reclassified him on the basis of a December 8, 1970, armed services physical which found him fit. On February 1, 1971, Smith was ordered by his local board to report for an induction physical on February 18, 1971. Smith did report, but the examining physicians felt there was a need for another neuro-psychiatric examination. The armed services personnel set March 16, 1971, for the examination. They notified the local board of the date, and the local board executive secretary in turn notified Smith. Smith did not attend that examination. The first count of the indictment read: That on or about the 16th day of March, 1971 at Pittsburgh, in the County of Allegheny in the Western District of Pennsylvania, the defendant, WILBERT WILL SMITH, being, in pursuance of the Military Selective Service Act of 1967, a registrant with Local Board No. 16 at Pittsburgh, Pennsylvania, unlawfully, wilfully and knowingly did fail and neglect to perform a duty required of him by the said Act and the rules, regulations and directions issued pursuant thereto, in that the defendant, while being processed at the Armed Forces Examining and Induction Station in Pittsburgh, Pennsylvania for induction into the Armed Forces of the United States, did fail, neglect, and refuse to undergo a neuro-psychiatric examination under the direction and orders of representatives of the Armed Forces of the United States. In violation of Title 50, Appendix, United States Code, Section 462(a). Appellant’s claim is that the indictment charged him with failing to follow an order from “the Armed Forces of the United States,” but that he was convicted for violation of an order from his local board. He claims that he was not under Armed Forces jurisdiction at his physical examination and thus not under a legal duty to follow Armed Forces personnel’s orders. Billings v. Truesdell, 321 U.S. 542, 64 S.Ct. 737, 88 L.Ed. 917 (1944). It was therefore necessary for the Government to show that he violated a local board order, appellant claims, to establish his guilt. Swift v. Director of Selective Service, 145 U.S.App.D.C. 224, 448 F.2d 1147 (1971). The Supreme Court has stated that “ [c] onvietions are no longer reversed because of minor and technical deficiencies which did not prejudice the accused.” Smith v. United States, 360 U.S. 1, 9, 79 S.Ct. 991, 996, 3 L.Ed.2d 1041 (1959). Smith was amply and definitely informed of the charges against him so that he was enabled to present his defense and not be taken by surprise by the evidence offered at trial. The indictment sufficiently protects him against another prosecution for the same offense. Appellant admits that he was not prejr udiced by the failure of the indictment to specify that he had been ordered by his local board to the examination. He therefore has no grounds for reversal of conviction if the proof at trial is deemed to be an indictment variance and not an indictment amendment. United States v. Dreer, 457 F.2d 31, 33-34 (3d Cir. 1972). We discussed the difficulty of distinguishing indictment variances from indictment amendments in United States v. DeCavalcante, 440 F.2d 1264, 1271-1272 (3d Cir. 1971), noting that: The policy expressed by the Court in Russell “is effectuated by preventing the prosecution from modifying the theory and evidence upon which the indictment is based.” United States v. Silverman, 430 F.2d 106, 110 (2d Cir. 1970). And further, that: Our inquiry, however, is limited to “whether on its face [the indictment] presents evidence which assures us that such essential elements were presented to the [grand] jury and deliberated upon by them in returning the indictment.” United States v. Silver-man, supra at 111. In the present case, the prosecution did show at trial that Armed Forces personnel determined at the February 18 induction physical that Smith should return for further neuro-psychiatric examination on March 16. The only question is whether the failure to specifically allege in the indictment that Smith had also been ordered to that March 16 examination by his local board made entry of the local board notification of Smith into evidence a constructive amendment of the indictment. The absence in the indictment of a specific reference to the local board order does not render it fatally defective. The indictment alleges that Smith failed “to perform a duty required of him” by the Selective Service Act. When violation of such a duty is alleged, it is not necessary that the indictment explicitly state that a local board order was made. United States v. Johnston, 227 F.2d 745, 747 (3d Cir. 1955), aff’d, 351 U.S. 215, 76 S.Ct. 739, 100 L.Ed. 1097 (1956); cf. United States v. Wernecke, 138 F.2d 561, 563-564 (7th Cir. 1943), cert. denied, 321 U.S. 771, 64 S.Ct. 529, 88 L.Ed. 1066 (1944). Smith did violate a duty under the Act. Under 50 App.U.S.C. § 462, registrants are given “the duty of carrying out any of the provisions of this title.” One of the provisions of the title, 50 App.U.S.C. § 454, provides that registrants shall not be inducted until their physical and mental fitness has been determined. And, under Armed Services Regulations, AR 601-270, ft 3-31 (b), SSLR 2249, a registrant whose acceptability is undetermined may be requested to submit for further mental evaluation, as instructed by the local board after request to do so from armed forces representatives. Smith failed to perform this duty. In stating that Smith failed to perform such a duty by not reporting to the examination, the indictment alleged the essential element of the crime. The indictment need not detail the exact statutory and regulatory provisions necessary to create the duty, as long as the included details are sufficient to give fair notice of what is alleged. Although the indictment speaks of Smith’s failure “to undergo a neuro-psy-chiatric examination under the direction and orders of representatives of the Armed Forces of the United States,” this phrase does not necessarily indicate that the duty Smith failed to obey was one created by Armed Forces orders, as appellant argues. In the context of the complete indictment, this phrase merely indicates that the examination Smith was ordered to attend would be conducted by the Armed Forces representatives. Even if the phrase is construed to imply that the order to report came from Armed Forces representatives, this language merely makes more exact the details of the offense. It was at the request of Armed Forces representatives that Smith’s local board ordered him to the March 16 examination. The language was therefore surplusage, not necessary to the indictment. The evidence in the present case was therefore within the limits charged in the indictment. This was not a case where the indictment specified one type of offense (interference with interstate importation of sand) and the evidence was of a separate and different offense (interference with interstate importation of steel), as in Stirone v. United States, 361 U.S. 212, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960). Rather, it is a case such as United States v. Silverman, 430 F.2d 106 (2d Cir. 1970), where a variance, not an amendment, was found when the indictment for embezzlement of union funds failed to allege that the “labor organization” was involved in interstate commerce, as is required by the statute under which the defendant was convicted. The court read the term “labor organization” in the indictment to allege and require proof of the essential element of interstate commerce. In the present case, the statutory term “perform a duty required of him by the said Act” should be read similarly. We have examined appellant’s other contentions and find them without merit. The judgment of the district court will be affirmed.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

YAMASHITA-SHINNIHON KISEN, K.K. TOKYO, Plaintiff-Appellee, v. W. J. JONES & SON, INC., Defendant-Appellant. No. 71-2347. United States Court of Appeals, Ninth Circuit. Feb. 16, 1973. Jerard S. Weigler (argued), Robert E. Babcock, of Lindsay, Nahstoll, Hart, Duncan, DaFoe & Krause, Portland, Ore., for defendant-appellant. Paul N. Wonacott (argued), of Wood, Wood, Tatum, Mosser & Brooke, Portland, Ore., for plaintiff-appellee. Before WRIGHT and CHOY, Circuit Judges, and LINDBERG, District Judge. Of the Western District of Washington. EUGENE A. WRIGHT, Circuit Judge: Atterbury, a longshoreman employed by W. J. Jones & Son, Inc., was injured in the course of stevedoring operations abroad a vessel owned by Yamashita-Shinnihon Kisen, K.K. His civil action charged Yamashita with negligence and with unseaworthiness of the vessel. Ya-mashita sued Jones in a separate indemnity suit, alleging Jones’ negligence and breach of its Ryan warranty of workmanlike performance (WWLP). Jones counterclaimed against Yama-shita, by way of set off or recoupment, for that part of any indemnity judgment in favor of Yamashita, proximately resulting from Yamashita’s breach of its obligations to Jones. Jones alleged that Yamashita breached (1) its Marine Terminals obligation; (2) an implied contractual obligation; and (3) an express contractual obligation. Yamashita settled with Atterbury for $25,000, and the trial upon which this appeal is based ensued. We must describe in some detail the circumstances surrounding Atterbury’s injury. He was injured in the course of helping to lower a boom aboard ship. Attached to the boom was a topping lift wire which ran through a hangar winch. Attached to the end of the topping lift wire was a smaller, pigtail wire, designed to be attached to the warping end of a cargo winch which, in turn, supplied the power to lower and raise the boom. Both winches were placed on a small platform about 12 feet above the main aft deck. The hangar winch was flush against a derrick post from which the boom was suspended and the cargo winch was at least several feet away. A winch platform guardrail was approximately 28 inches beyond the cargo winch. The pigtail wire could be utilized in different ways in the lowering of the boom, depending on whether it had a hook on its end. The hook could be inserted in the warping end of the cargo winch and the slack taken from the pigtail line by engaging the cargo winch. A longshoreman standing between .the two winches would feed the pigtail line into the cargo winch until the slack was taken up. Without a hook on the end of the pigtail line, a common longshoring practice was to wrap the middle of the line around the cargo winch, requiring a longshoreman to stand in the 28-ineh space to feed the pigtail wire onto the cargo winch during the lowering operation. Atterbury was using the latter technique but without an assistant tending the pigtail line behind him to take any kinks out of it. He was injured when one hand was caught in the cargo winch as he fed the pigtail line onto the warping end. The trial judge instructed the jury that either of two findings would require a verdict for Yamashita, unless the jury found conduct on the part of Yamashita which prevented, interfered with, or seriously handicapped Jones from doing a workmanlike job. Those two findings were either (1) that the pigtail line that Atterbury was using was equipped with a hook, and that the failure to use the hook constituted an unsafe stevedore practice which caused Yamashita to be liable for Atterbury’s injuries; or (2) that the failure to provide a fellow longshoreman to tend the line for Atterbury constituted an unsafe stevedore practice causing Yamashita to be liable for Atterbury’s injuries. Jones requested an instruction on its counterclaim. The trial judge denied it on the ground that the essence of the counterclaim had been presented to the jury in the form, of the affirmative defense. Jones asked for a jury instruction, also refused, that an apportionment of the damages was possible. The jury returned a verdict in favor of Yamashi-ta for the full amount of the Atterbury settlement. This case represents the latest twist in the Sieracki-Halcyon-Ryan-Italia-Mcir-rine Terminals dispute between stevedores and shipowners as to who should bear the economic burden of an injury to a stevedoring longshoreman. Briefly, the background: Under the Longshoremen’s and Harbor Workers’ Compensation Act, the employer is held strictly liable to the injured longshoreman and, in exchange, benefits by a damages ceiling. However, either the employee or the as-signee-employer may hold liable negligent third parties. In Sieracki, a longshoreman employee of a stevedore injured while loading a ship sued the shipowner, claiming unseaworthiness. The Court held that the shipowner’s warranty of seaworthiness extends to such a stevedoring longshoreman. The shipowner, however, did not have the benefit of limited liability, as did the stevedore-employer under the statutory scheme. Then in Halcyon the Court held that the shipowner could not seek contribution from the stevedore for liability that the shipowner might incur as a result of the ship’s unseaworthiness. As a result the full brunt of the economic consequences of the longshoreman’s injury remained with the shipowner. But in Ryan, Halcyon was held to be no bar to the shipowner recovering full indemnity from the stevedore, should the latter breach its implied contractual warranty to perform its work in workmanlike fashion. The Court distinguished Halcyon by noting that Ryan did not involve a claim for contribution from a joint tortfeasor, as did Halcyon. Subsequent cases expanded the scope of the stevedore’s implied contractual warranty to supply workmanlike service, and as a result the economic impact of the longshoreman’s injury shifted to the stevedore-employer. In fact, if the stevedore renders a substandard performance, the shipowner is entitled to indemnity “absent conduct on its part sufficient to preclude recovery.” Weyerhaeuser S.S. Co. v. Nacirema Operating Co., 355 U.S. 563, 567, 78 S.Ct. 438, 441, 2 L.Ed.2d 491 (1958) (dictum). Few courts have found shipowner conduct sufficient to preclude recovery. It has generally been established that the determination of whether the stevedore-employer should be required to indemnify the shipowner involves a weighing process evaluating the conduct of both parties to determine: (1) whether the Ryan WWLP was breached; (2) whether that breach proximately caused the injury; and (3) whether the shipowner’s conduct prevented the workmanlike performance. Garner v. Cities Service Tankers Corp., 456 F.2d 476 (5th Cir. 1972). The shipowner has generally recovered either full indemnity or none at all, Halcyon being read as barring apportionment of the damages. Were this case before us in the context of the sufficiency of the evidence to support the jury’s verdict granting Ya-mashita full indemnity, the issue would not be difficult. But Jones does not appeal the jury’s verdict granting Yama-shita full indemnity. Properly so, for it is clear that under the present state of the law we would have to affirm the jury’s determination. Jones has claimed that Yamashita was negligent and breached its implied warranty obligations in that there was excessive grease on the topping lift wire; the topping lift wire had loose strands and splinters; the winch platform was too small to allow Atterbury to work in safety and the winch was not guarded, or was inadequately guarded. Additionally, Jones claims that Yamashita breached its express contractual promise to furnish and maintain “suitable booms, winches, blocks, and falls.” The cases clearly state that a shipowner is entitled to indemnity from a stevedore in breach of its Ryan warranty, absent conduct on the shipowner’s part sufficient to preclude recovery. Even a breach of the stevedoring contract by the shipowner has been held insufficient to preclude recovery, where the stevedore knew of the breach and continued using defective equipment supplied by the shipowner. Matson Terminals, Inc. v. Caldwell, 354 F.2d 681 (9th Cir. 1965) (defective winches). Jones’ claim simply stated, is that Ya-mashita furnished defective equipment for Jones to use. While, if true, that might establish a breach by Yamashita of its obligation to Jones, whether under contract or otherwise, here the evidence is sufficient to support a jury determination that Jones waived that breach when it continued to use the defective equipment knowing of the defect. Therefore, were this before us as an appeal from a jury verdict granting full indemnity, we would affirm. Jones, however, is appealing from the trial court’s refusal to let its counterclaim go to the jury. While some have suggested that perhaps the rule should be otherwise, it is clear that prior to 1969 no court of appeals had allowed a stevedore to submit a counterclaim to the jury in situations such as this. Then in 1969 the Supreme Court decided Federal Marine Terminals v. Burnside Shipping Co., supra. In Federal Marine Terminals, an employee of a stevedore was killed and his widow recovered an annuity potentially worth $70,000 from the stevedore under the Longshoremen’s and Harbor Workers’ Compensation Act. The widow sued the shipowner for wrongful death under an Illinois statute which limited the amount recoverable to $30,000. The shipowner then sued the stevedore for indemnification, alleging a breach of the Ryan WWLP. Stevedore counterclaimed against the shipowner for $70,000, the entire amount of the stevedore’s liability under the Act. The district court granted shipowner’s motion to dismiss the counterclaim, and an appeal ensued, before any determination was made on the merits of the shipowner’s Ryan claim. The Supreme Court set aside the action of the district court, holding that the counterclaim was proper. The Court held that federal maritime law does impose on the shipowner a duty to the stevedoring contractor to exercise due care under the circumstances, and does recognize a direct action in tort against the shipowner to recover the amount of compensation payments occasioned by the latter’s negligence. The Court also refused to preclude the possibility of a direct action by the stevedoring contractor based on express or implied contractual warranties. The Court further noted that at the stage of the case as presented they must assume that the stevedore was faultless vis-a-vis the shipowner, since the claim that stevedore breached its Ryan WWLP had not yet been adjudicated and was not before the Court. The Court added the further caveat that it decided nothing with respect to the interaction between the shipowner’s breach of warranty claim and the stevedoring contractor’s tort claim. A fortiori, the Court decided nothing with respect to the interaction of the shipowner’s Ryan claim and the stevedore’s express or implied contractual warranty claim. That interaction is before us today. Jones asserts that the logical outcome of these interacting claims must be that each party is to bear such portion of the loss as is attributable to its respective breach of duty. We disagree. We do not believe that in granting stevedore a right of action on a counterclaim the Court intended to depart from the long line of eases which have held that the shipowner, absent conduct on its part sufficient to preclude recovery, is entitled to full indemnity from the stevedore when the stevedore breaches its Ryan warranty. The Supreme Court has recognized that the objective of the doctrine of unseaworthiness and the corollary doctrine of indemnification is “to minimize the hazards encountered by seamen, to compensate seamen for the accidents that inevitably occur, and to minimize the likelihood of such accidents.” The Court has further acknowledged that the function of these special rules is allocation of the losses caused by shipboard injuries to the enterprise “best situated to adopt preventive measures and thereby to reduce the likelihood of injury. Where, as here, injury-producing and defective equipment is under the supervision and control of the stevedore, the shipowner is powerless to minimize the risk; the stevedore is not.” We feel that these objectives are furthered by our holding today placing the burden ultimately on the company whose default caused the injury. The jury found that a proximate cause of the accident was an unsafe stevedoring practice employed by Jones. Jones alleges that defective equipment was also a cause. But the allegedly defective nature of the equipment would have been ascertainable upon even the most cursory of inspections. Jones, using the equipment daily, was in the best position to discover any defect and to have it remedied. Under these circumstances, we see no reason, even assuming that Halcyon is no bar, to formulate judicial rules of apportionment. We hold that Jones’ counterclaim to Yamashita’s indemnity suit did not entitle Jones to an apportionment of damages. We find nothing in Marine Terminals to indicate otherwise. The Court there expressly noted that the stevedore was not seeking contribution “[rjather the counterclaim seeks recovery of the full amount of [stevedore’s] liability under the Act to [the employee’s] representative.” Under the guise of a counterclaim, Jones now seeks an apportionment of the damages. We find no support for such an apportionment under the facts of this case. Jones contends that having created “The Devil’s Own Mess,” federal courts can no longer “abstain from further adventures in this wonderland.” In Halcyon, the Supreme Court concluded that the problem was best suited for Congressional solution; “We have concluded that it would be unwise to attempt to fashion new judicial rules of contribution and that the solution of this problem should await congressional action. Many groups of persons with varying interests are vitally concerned with the proper functioning and administration of [Acts dealing with maritime personal injuries]. We think that legislative consideration and action can best bring about a fair accommodation of the diverse but related interests of these groups. The legislative process is peculiarly adapted to determine which of the many possible solutions to this problem would be most beneficial in the long run.” Halcyon at 285-286 of 342 U.S., at 280 of 72 S.Ct. These considerations seem equally applicable today, especially in light of Congress’ recent attempt to “bring about a fair accommodation of the diverse but related interests of these groups.” We hold that the trial judge did not err in refusing to instruct the jury that an apportionment of damages was proper. The trial court’s disposition of Jones’ counterclaim remains to be dealt with. The trial court concluded that the • essence of Jones’ counterclaim was presented to the jury as an affirmative defense. We agree. Jones had the burden of proof on its defense, just as it would have had on its counterclaim, had it been submitted to the jury. The jury’s finding that Yamashita was not guilty of “conduct sufficient to preclude recovery” necessarily implies a finding that Jones would not have been entitled to recover on its counterclaim. Under these unique circumstances, Jones was not prejudiced by the trial court’s refusal to submit its counterclaim to the jury. Yamashita raises a further issue, the sufficiency of the evidence to enable Jones’ counterclaim to go to the jury. The trial judge did not address himself to this question in disposing of the counterclaim, and our treatment of the matter precludes the necessity of considering the issue on appeal. The decision of the trial court is affirmed. . The negligence count was dropped prior to submission of the case to the jury. . Ryan v. Pan-Atlantic Corp., 350 U.S. 124, 76 S.Ct. 232, 99 L.Ed. 641 (1956). . Federal Marine Terminals v. Burnside Shipping Co., 394 U.S. 404, 89 S.Ct. 1144, 22 L.Ed.2d 371 (1969). . Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946); Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U.S. 282, 72 S.Ct. 277, 96 L.Ed. 318 (1952); Ryan v. Pan-Atlantic, supra; Italia Societa v. Oregon Stevedoring Co., 376 U.S. 315, 84 S.Ct. 748, 11 L.Ed.2d 732 (1964); Federal Marine Terminals v. Burnside Shipping Co., supra. . 44 Stat. 1424 et seg., as amended, 33 U.S.C. § 901 et seg. . The concept of seaworthiness, which originally pertained only to the condition of the ship and its equipment, has been expanded almost without limit. See Italia Societa v. Oregon Stevedoring Co., supra; Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413 (1959); Simpson Timber Co. v. Parks, 369 F.2d 324 (9th Cir. 1966), remanded mem., 389 U.S. 909, 88 S.Ct. 210, 19 L.Ed.2d 227 (1967), aff’d in part, 390 F.2d 353 (9th Cir. 1968); D/S Ove Skou v. Herbert, 365 F.2d 341 (5th Cir. 1966). . The Longshoremen’s and Harbor Workers’ Compensation Act Amendments of 1972 (Act of October 27, Pub.L. No. 92-576, 86 Stat. 1251) abolish any liability of the vessel under the warranty of unseaworthiness. These amendments, however, were not in effect at the time of the injury to Atterbury. . See, e. g., Italia Societa v. Oregon Steve-doring Co., supra (Breach of the Ryan warranty found even when the stevedore was not negligent.) . Even negligent shipowners have been granted indemnity. See, e. g., Waterman S.S. Corp. v. Dugan & McNamara, Inc., 364 U.S. 421, 81 S.Ct. 200, 5 L.Ed.2d 169 (1960); Crumady v. The Joachim Hendrik Pisser, supra; Frasca v. S/S Safina E. Ismail, 413 F.2d 259 (4th Cir. 1969); Pettus v. Grace Line Inc., 305 F.2d 151 (2d Cir. 1962); Drago v. A/S Inger, 305 F.2d 139 (2d Cir.), cert. denied 371 U.S. 925, 83 S.Ct. 292, 9 L.Ed.2d 232 (1962). . But see In Re Seaboard Shipping Corp., 449 F.2d 132 (2d Cir. 1971), cert. denied 406 U.S. 949, 92 S.Ct. 2039, 32 L.Ed.2d 337 (1972); Watz v. Zapata Off-Shore Co., 431 F.2d 100 (5th Cir. 1970); Horton & Horton, Inc. v. T/S J. E. Dyer, 428 F.2d 1131 (5th Cir. 1970), cert. denied sub nom. Horton & Horton, Inc. v. Vaughan Marine, Inc., 400 U.S. 993, 91 S.Ct. 46, 27 L.Ed.2d 441 (1971) (limiting Haley on to cases where the joint tortfeasor against whom contribution is sought is immune from tort liability by statute) ; contra, In re Standard Oil Co. of California, 325 F.Supp. 388 (N.D.Cal.1971). See generally Allbritton, “Division of Damages in Admiralty — A Rising Tide of Confusion,” 2 Journal of Maritime Law and Commerce 323 (1971). . D/S Ove Skou v. Herbert, n. 18, p. 351 of 365 F.2d; Clark, J., dissenting in Pet-tus v. Grace Line Inc., 155 of 305 F.2d (2d Cir. 1962). . See Proudfoot, “The Tar Baby”: Maritime Personal-Injury Indemnity Actions, 20 Stan.L.Rev. 423, 422-445; McLaughlin v. Trelleborgs Angfartygs A/B, 408 F.2d 1334 (2d Cir.), cert. denied sub nom. Golten Marine Co. v. Trelleborgs Angfartygs A/B, 395 U.S. 946, 89 S.Ct. 2020, 23 L.Ed.2d 464 (1969). . Italia Soc. v. Ore. Stevedoring Co., 324 of 376 U.S., 754 of 84 S.Ct. . Id. at 324, 84 S.Ct. at 754; Stranahan v. A/S Atlantica & Tinfos Papirfabrik, 471 F.2d 369 (9th Cir. 1972). . Italia Soc. v. Ore. Stevedoring Co., 324 of 376 U.S., 84 S.Ct. 748; Reed v. The Yaka, 373 U.S. 410, 414, 83 S.Ct. 1349, 10 L.Ed.2d 448 (1963). . Cf. Atlantic Coast Line Railroad Co. v. Erie Lackawanna Railroad Co., 406 U.S. 340, 92 S.Ct. 1550, 32 L.Ed.2d 110 (1972). (Halcyon reaffirmed.) . Federal Marine Terminals v. Burnside Shipping Co., 418 of 394 U.S., 1152 of 89 S.Ct. . Currie, Federalism and the Admiralty, “The Devil’s Own Mess,” The Supreme Court Rev. 158, 212-213 and 220-221 (1960). . Judge Friendly in McLaughlin v. Trelle-borgs Angfartygs A/B, 1338 of 408 F.2d. . See n. 7 supra.

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UNITED STATES of America, Plaintiff-Appellee, v. Raymond Orson WRIGHT, Defendant-Appellant. No. 72-1214. United States Court of Appeals, Ninth Circuit. Feb. 14, 1973. Rehearing Denied March 30, 1973. Raymond Orson Wright, in pro. per. David Fox, Asst. U. S. Atty. (argued), Leslie J. Osborne, Jr., Eric A. Nobles, Asst. U. S. Attys., William D. Keller, U. S. Atty., Los Angeles, Cal., for plaintiff-appellee. Before WRIGHT and WALLACE, Circuit Judges, and EAST, District Judge. Honorable William G. East, Senior United States District Judge for the District of Oregon, sitting by designation. EAST, District Judge: On May 27, 1970, the appellant, Raymond Orson Wright (Wright), was indicted for failure to report to the local Los Angeles board per order for civilian employment, in violation of 50 U.S.C.App. Sec. 462. Prior to trial, Wright filed a motion to proceed in propria persona and his then second retained counsel asked to be relieved as counsel. The trial Court granted the motion, in part, but ordered counsel to continue as advisor and to assist Wright. At trial the government’s only evidence was Wright’s Selective Service File (SSF) with the board. Wright participated in the trial, testified on his own behalf and made argument to the Court and jury, with assistance from counsel. Wright moved for an acquittal, urging that various procedural errors by the local and appeal boards constituted a denial of due process and further prejudiced him in his administrative appeal. The Court denied the motion, but permitted Wright to present to the jury his position as an issue of fact: whether his failure to appear per order for civilian employment was knowingly and wilfully as charged, or whether he was so confused by duplicate and countermanding notices and orders as to be excused. The jury found Wright guilty as charged. He was sentenced to five years’ probation and a fine of $2,000 and on November 19, 1971 he filed this appeal and appears in propria persona. He is and has been at liberty. Wright raises some ten contentions of error, all of which are without merit, and only three warrant comment. We affirm. 1. Was the Local Board’s action, the including of minutes of the defendant’s personal appearance in his SSF without notifying the defendant of the existence of those minutes, a denial of due process? Wright had requested change of his I-A classification to that of 1-0 (conscientious objector). On December 6, 1966 the Board met with Wright personally in connection with his request and the Clerk filed a document or memo of the purpose and the result of that meeting. The memo is no less nor more than a clear recital of reasons the Board granted Wright’s requested 1-0 classification. The memo was required had the Board refused the 1-0 classification. United States v. Andersen, 447 F.2d 1063 (9th Cir. 1971). The memo contained no adverse recitals and though not required, was in nowise prejudicial to Wright’s appeal. 2. Did the appeal board’s action in classifying the defendant 1-0 without stating reasons for that classification bar effective judicial review of such a classification ? Wright appealed from that portion of his requested 1-0 classification which provided for compulsory civilian employment. The requirement that Selective Service registrants perform work of national importance in lieu of service is constitutional. O’Connor v. United States, 415 F.2d 1110 (9th Cir. 1969), cert. denied, 397 U.S. 968, 90 S.Ct. 1002, 25 L.Ed.2d 263 (1970); United States v. Perrin, 431 F.2d 875 (9th Cir. 1970). He raised no issue, he presented no information that indicated he was entitled to any other classification save I-O. All he did was to ask the appeal board to entertain an action beyond its authority and to engage in an illegal act (releasing him from a civilian service obligation). Under these circumstances the appeal board acted properly in affirming the classification awarded by the local board without comment. In circumstances like these, this Court has held that no express reasons need be stated. United States v. Kember, 437 F.2d 534 (9th Cir. 1970). 3. Was the defendant denied due process of law when the State Director failed to transfer the defendant’s work assignment hearing to an out-of-state board? While the Selective Service Regulations do provide for transfers to a more convenient board prior to an undertaking of the classification and during the classification procedure, there is no such provision with reference to hearings to determine the nature of civilian work to be performed by the registrant. See 32 C.F.R. Section 1660.20. We add, generally, that there was a four months’ delay on the part of the board in forwarding Wright’s SSF to the appeal board. There were numerous errors, omissions and insufficiencies in the file for an appeal. There was no advice as to the right of legal counsel. None of these factors prejudiced Wright as the appeal board affirmed his requested 1-0 classification in accordance with the existing regulations and law. United States v. Nelson, 467 F.2d 1364 (9th Cir. 1972). A reader gleans from the record that Wright was at no time unadvised as to his rights and was motivated throughout with a determination not to serve the alternative civilian duty, whether or no. He is intelligent and well-educated. He was well aware of the contents of his SSF and of applicable regulations. He was represented by four able counsel who served him well, but not to his satisfaction. Wright did show an after-indictment willingness to serve, but no civilian duty was then available. The jury found the essential wilful intent element of the charge and we would agree with them. Affirmed. . Cf. United States v. Droge, 464 F.2d 439 (9th Cir. 1972), in which a highly prejudicial summary of statements and actions at an appearance before a local board was prepared by a secretary and placed in the registrant’s file. The registrant received no copy and had no opportunity to respond to the prejudicial material.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Leon Bennie ELLIOTT, Petitioner-Appellant, v. Dr. George J. BETO, Director, Texas Department of Corrections, Respondent-Appellee. No. 72-3062 Summary Calendar. United States Court of Appeals, Fifth Circuit. Feb. 12, 1973 Rehearing Denied March 13,1973. Certiorari Denied May 14, 1973. See 93 S.Ct. 2284. Fred M. Lange, Houston, Tex. (Court appointed), for petitioner-appellant. Crawford Martin, Atty. Gen., Guy C. Fisher, Asst. Atty. Gen., Austin, Tex., for respondent-appellee. Before GEWIN, AINSWORTH and SIMPSON, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: This appeal is from the denial of ha-beas corpus relief. Appellant is presently serving a 40-year Texas state sentence for assault with intent to rape, following a jury verdict of guilty. He contends that his confession, introduced at the trial, was involuntary; that a one-man lineup in the absence of counsel was violative of due process; and that the use of perjured testimony by the prosecution and its failure to correct it deprived him of a fair trial. The Federal District Court found no merit to these contentions. We affirm. A proper determination of the voluntariness of appellant’s confession was made by the State Trial Court which comported with the requirements of Jackson v. Denno, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908 (1964). In the evidentiary hearing at which appellant testified, the Federal District Judge also had before him the complete transcript of the hearing on the issue of voluntariness as well as the transcript of the State trial proceedings. He held that the confession was voluntary. This finding was corroborated by the Federal District Judge’s personal appraisal of appellant’s lack of credibility because of several conflicts in his testimony. We agree with the District Judge’s finding. The offense for which appellant was convicted occurred on February 28, 1967. Independent identification of appellant, by the complaining witness and by another woman whom appellant had accosted and threatened at gunpoint, was made a few hours after the separate incidents had occurred. The proper standard applicable at that time (prior to United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967)), for determining whether the method employed to identify a suspect violated due process was a consideration of the totality of the circumstances surrounding the confrontation. Stovall v. Denno, 388 U.S. 293, 87 S.Ct. 1967, 18 L.Ed.2d 1199 (1967). See also the recent Supreme Court decision, Neil v. Biggers, 409 U.S. 188, 93 S.Ct. 375, 34 L.Ed.2d 401 (1972). Applying the totality of circumstances test, we agree that there was no deprivation of due process. In the absence of a showing that the prosecution knowingly and intentionally used material, perjured testimony to obtain a conviction, appellant is entitled to no post-conviction relief even where testimony is perjured. Jackson v. United States, 5 Cir., 1967, 384 F.2d 375-376. A fortiori, there can be no such relief where there is no perjury. The District Court found none; nor do we. Affirmed.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff and Appellee, v. Oralia DELACERDA, Defendant and Appellant. No. 72-3113. United States Court of Appeals. Ninth Circuit. Feb. 13, 1973. Kenneth L. Collins, Deputy Federal Public Defender, Los Angeles, Cal., for defendant-appellant. William D. Keller, U. S. Atty., Terry W. Bird, Eric A. Nobles, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-appellee. Before CHAMBERS, KOELSCH and KILKENNY, Circuit Judges. PER CURIAM: The judgment of conviction in this case for attempting to board an aircraft of Pacific Southwest Airlines with a concealed weapon is affirmed. Defendant contends the Pacific Southwest Airlines (PSA) was not engaged in “air transportation.” See 49 U.S.C. § 1301(10). Inasmuch as PSA, although not certificated by the Civil Aeronautics Board, was properly engaged in the transportation of United States mails on some routes, we hold that 49 U.S.C. § 1472(1) was violated by Delacerda.

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Caselaw Access Project

2024-08-24T03:29:51.129235

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Sidney ROSEN, Plaintiff-Appellee, v. James F. KAHLENBERG, d/b/a Kahlenberg-Globe Equipment Company, Defendant-Appellant. No. 71-3529. United States Court of Appeals, Fifth Circuit. Feb. 20, 1973. Stefan M. Stein, Tampa, Fla., for defendant-appellant. John C. Malloy, Miami, Fla., for plaintiff-appellee. Before COLEMAN, AINSWORTH and DYER, Circuit Judges. AINSWORTH, Circuit Judge: This is an appeal from a judgment in favor of Sidney Rosen against James F. Kahlenberg awarding damages for infringement of a patent covering a “Precision Pump.” We reverse. Prior to obtaining the patent in suit, Rosen invented a “Filling Machine” for high-speed filling of vials, ampoules, and small containers, for which United States Patent No. 2,807,213 was issued on September 24, 1957. To achieve more precise control in filling the containers, Rosen made certain improvements and sought another patent. In this connection a series of claims by Ro-sen was rejected by the Patent Office for lack of new invention. Finally, his eleventh claim was approved by the Patent Office, and United States Patent No. 2,907,614 issued on October 6, 1957. Kahlenberg, a competitor in the field of volumetric filling machines, manufactured pumps similar to the ones patented by Rosen. On December 7, 1966, Rosen filed this suit against Kahlenberg, alleging infringement of Patent No. 2,907,614. The District Judge, after an extensive hearing, issued findings of fact and conclusions of law on December 18, 1970, D.C., 337 F.Supp. 1075, upholding the validity of the Rosen patent and finding infringement by the Kahlenberg pump. Further hearings on damages led to final judgment for $16,997 against Kah-lenberg. Our decision is based on two principal considerations. First, we hold that the accused Kahlenberg pump does not fall literally within the terms of the claim of the Rosen patent. Second, Rosen cannot prevail under the doctrine of equivalents, because an examination of the prior art as well as the file wrapper in the Rosen patent file convinces us that the doctrine is inapplicable. I. Article I, section 8, clause 8 of the Constitution authorizes Congress “To promote the Progress of Science and useful Arts, by securing for limited Times to . Inventors the exclusive Right to their . . . Discoveries.” Under this authority Congress requires the applicant for a patent like the one in the present case to include a claim pointing out the subject matter of the invention, specifications explaining the process of making and using it, and drawings illustrating the invention. 35 U.S.C. §§ 111-113 (1971). The claim circumscribes the rights of the patent much like a description in a deed limits the boundaries of property. McClain v. Ortmayer, 141 U.S. 419, 425, 12 S.Ct. 76, 78, 35 L.Ed. 800 (1891); Koykka, Infringement of Patents, 42 F.R.D. 43, 44 (1968). The specifications and drawings may be consulted to help interpret the claim. Permutit Co. v. Graver Corp., 284 U.S. 52, 60, 52 S.Ct. 53, 55, 76 L.Ed. 163 (1931); Bates v. Coe, 98 U.S. 31, 38, 25 L.Ed. 67, 71 (1878); Autogiro Co. v. United States, 181 Ct.Cl. 55, 63-64, 384 F.2d 391, 397-398 (1967). The claim reads as follows: A pump assembly in which a piston is adapted to reciprocate within a cylinder for pumping fluids comprising, a cylinder, means at one end of the cylinder through which the fluid is received and discharged, the other end of the cylinder having an opening for slidably receiving a piston rod which extends partly within and without the cylinder, said piston rod comprising an inner rod member and an outer sleeve member, the inner rod member having fixed to its end within the cylinder the innermost end of a piston, the opposite end of the piston comprising a bushing having a central aperture slidably receivable over the inner piston rod member, each piston end being slightly less in diameter than the inner diameter of the cylinder, a shoulder fixed inwardly from the fixed innermost end of the piston and about the end of the inner piston rod adjacent the fixed end of the piston and of larger diameter than the piston rod for receiving a plurality of elastic compression rings in which at least the center rings are of V cross-sectional form with flat side surfaces, the rings being of such width as to fill the space between the shoulder and the inner surface of the wall of the piston, the bushing end of the piston having a recess in its surface adjacent the shoulder for receiving a portion of the shoulder adjacent thereto to allow the bushing to be moved inwardly over the shoulder for a predetermined distance against the compression rings without interference from the shoulder, the sleeve member of the piston rod telescoping the inner rod member from the slidable bushing end of the piston to a point without the piston adjacent the outer end of the inner rod member having its end within the cylinder abutting the surface of the bushing end of the piston about the aperture and opposite the compression rings, the outer end of the inner piston rod member beyond the opening in the cylinder being provided with an external thread and the outer end of the sleeve piston rod member beyond the opening in the cylinder being provided with an internal thread for threadably receiving the threaded end of the inner rod member for fixing the two piston rod members relative to each other and means for locking the two piston rod members in adjusted position, whereby by adjusting the sleeve member relatively to the inner member the sleeve member moves the bushing end of the piston relative to the fixed end of the piston for regulating the pressure on the compression rings and means on the outer end of the inner piston rod member for connecting the same to a crank mechanism. The pertinent drawings (as explained in the specifications) are shown as follows: To identify the parts essential for our discussion, we note that the claim describes an assembly with a piston composed of plastic V-shaped rings with holes in the center like doughnuts (numbered 36, 38, 40, and 54 in figures 3 and 6) enclosing a circular metal shoulder (numbered 56). The rings are sandwiched between two metal plates (numbered 32 and 34). Because the shoulder does not extend from the upper plate all the way down to the lower plate, there is a recess beneath the shoulder (visible in figure 3). A rod (numbered 44 in figures 2, 3, 4, and 5) extends from the shoulder down to any crankshaft which may be used to generate the reciprocating up and down motion of the piston within the cylinder. This rod is surrounded by an outer sleeve which extends from the lower plate down to a threaded nut (numbered 48 in figures 2 and 5). By turning the nut, the sleeve is pushed up or pulled down to adjust the compression on the rings. The purpose of this compression, according to the specifications and testimony in the record, is to enlarge the diameter of the rings by an external adjustment and thereby seal any leaks without dismantling the assembly. Kahlenberg contends that there are two differences between his pump and the Rosen pump shown in the drawing. First, whereas Rosen’s lower metal plate in the piston is concave so as to slide up over the shoulder when the nut is tightened, Kahlenberg’s lower metal plate is flat so it only moves up to the bottom of the shoulder rather than over it. The following drawings graphically illustrate the first contention: ROSEN KAHLENBERG Second, Rosen’s sleeve is fastened to the threaded nut. Kahlenberg’s sleeve is not fastened to the threaded nut, so the sleeve may be pushed up by turning the nut but cannot be pulled down by turning the nut, as shown on the following drawings: The District Judge referred to the language of Rosen’s claim and decided that the claim described Kahlenberg’s pump despite these differences between Ro-sen’s drawing and Kahlenberg’s pump. With respect to the first difference, the claim speaks about “the bushing end of the piston having a recess in its surface adjacent the shoulder for receiving a portion of the shoulder adjacent thereto to allow the bushing to be moved inwardly over the shoulder for a predetermined distance against the compression rings without interference from the shoulder.” Rosen contended in the District Court that the term bushing means not just the lower metal plate but also the portion of the compression rings surrounding the rest of the recess below the shoulder, as demonstrated by the darkened areas in the following drawings of both pumps. Through this definition Rosen’s claim does cover Kahlen-berg’s pump. It has a recess in the bushing end of the piston, and the bushing moves inwardly over the shoulder. This definition, however, is inconsistent with the use of the word bushing elsewhere in the claim. In the above passage the bushing is said to move against the compression rings, so the bushing must be something other than the compression rings. Also, the passage does not merely state that the bushing end has a recess; rather, it states that the bushing end has a recess in its surface, namely, in the surface of the metal plate. Kahlenberg’s pump has no recess in any surface. In an earlier part of the Rosen claim, the lower end of the piston is said to comprise a bushing; it does not say that the lower end is part of a bushing. Then the claim states that both the upper and lower piston ends are slightly less in diameter than the inner diameter of the cylinder, whereas the compression rings are said to fill the space between the shoulder and the inner surface of the wall of the piston; thus the bushing has a diameter different from the diameter of the compression rings. To make certain that the word bushing does not include the compression rings, we examined the terminology in the prior rejected claims in the Rosen application to the Patent Office. The antecedent claim nine thereof reads essentially like the approved claim, but with several semantical changes. The word bushing is not used, but the word ring is used in its place. Because claim nine carefully uses the word rings in the plural form to denote the compression rings and uses the word ring in the singular form for the lower metal plate, the word ring does not include any of the compression rings. There is nothing to suggest that the substitution of the word bushing for the word ring in the approved claim was intended to enlarge the definition. Apparently the substitution was made to more clearly distinguish the metal ring from the plastic compression rings. We find, therefore, that the term bushing connotes the lower plate in the piston, not any portion of the compression rings. Kahlenberg’s bushing does not have a recess in its surface for receiving a portion of the shoulder, nor does the bushing move over the shoulder, so the pump does not literally infringe the claim. With respect to the second difference between the drawings and the Kahlen-berg pump, the Rosen claim reads: “the outer end of the inner piston rod member beyond the opening in the cylinder being provided with an external thread and the outer end of the sleeve piston rod member beyond the opening in the cylinder being provided with an internal thread for threadably receiving the threaded end of the inner rod member for fixing the two piston rod members relative to each other.” This does not describe the Kahlenberg pump. The lower end of Kahlenberg’s sleeve does not have an internal thread, because Kahlenberg’s sleeve is not fastened to the nut. As a result, Kahlenberg cannot fix the other sleeve relative to the inner rod. This second difference between the Rosen claim and the Kahlenberg pump provides an alternative ground for finding that the pump does not literally infringe the Rosen claim. II. Despite the absence of literal infringement by the defendant, the plaintiff can still prevail under the doctrine of equivalents if the plaintiff’s and defendant’s devices perform substantially the same function in substantially the same way to obtain the same result. Sanitary Refrigerator Co. v. Winters, 280 U.S. 30, 42, 50 S.Ct. 9, 13, 74 L.Ed. 147 (1929). The reach of the doctrine beyond the articulated boundaries in the claim is determined against the context of the patent, the prior art, and the particular circumstances of the case. Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 609, 70 S.Ct. 854, 856, 94 L.Ed. 1097 (1950). One principle precluding equivalency is known as file wrapper estoppel. The file wrapper is the file in the Patent Office including all prior claims rejected by the Patent Examiner, as well as the Examiner’s reasons for rejecting the claims and the applicant's remarks in submitting new claims. If the Examiner rejects a claim for failing to disclose a new discovery and the patentee amends the claim, the patentee is estopped from recapturing the coverage surrendered by the amendment. Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126, 136, 62 S.Ct. 513, 518, 86 L.Ed. 736 (1942). Another method of limiting the reach of equivalency is to assess the magnitude of the patentable discovery. The requirements for a patent are novelty, utility, and non-obviousness to a person having ordinary skill in the pertinent art. 35 U.S.C. §§ 101-103 (1971); Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396 U.S. 57, 59, 90 S.Ct. 305, 307, 24 L.Ed.2d 258 (1969); United States v. Adams, 383 U.S. 39, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966); Graham v. John Deere Co., 383 U.S. 1, 14, 86 S.Ct. 684, 692, 15 L.Ed.2d 545 (1966); Ramirez v. Perez, 5 Cir., 1972, 457 F.2d 267, 269. The range of equivalents depends upon the degree of invention. Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 415-416, 28 S.Ct. 748, 749, 52 L.Ed. 1122 (1908). Where the patentee makes a pioneer discovery, he is entitled to broader protection than one who makes a slight improvement on the prior art. Hildreth v. Mastoras, 257 U.S. 27, 33-36, 42 S.Ct. 20, 23, 66 L.Ed. 112 (1921); McCutchen v. Singer Co., 5 Cir., 1967, 386 F.2d 82, 88; 4 A. Deller, Deller’s Walker on Patents § 232, p. 82 (1965). Not only is the Rosen claim not a pioneer discovery, it discloses little, if anything, which might be defined as an invention. In rejecting Rosen’s first six claims, the Patent Examiner recognized that Rosen was not improving the cylinder or valve apparatus, so he suggested that applicant’s claims should, therefore, be directed to the details of the piston and packing assembly. Although the beginning of the claim still mentions the pump assembly, we are only concerned with the piston head and rod. The concept of compressible rings was anticipated by Lord, United States Patent No. 2,600,061 (1952), according to the Patent Examiner’s rejection of claims seven and eight. See the drawing below: Lord’s rings are not V shaped, but the Examiner went on to cite Buf-fington, United States Patent No. 2,420,929 (1947). See the drawings below: He concluded: “In view of the teaching by Buffington, it would not involve invention to substitute the Y-shaped packing of Buffington et al for the packings of Lord.” In response Rosen made some critical distinctions between his device and the prior art cited by the Examiner, as'follows: (1) In submitting claim nine, Rosen distinguished the prior art by showing that the center of the Buf-fington ring nestles smoothly against the adjacent ring, whereas Rosen’s rings leave an enclosed interior space. (2) Rosen’s outer compression rings 54 and 36 have flat outer surfaces parallel with the metal plates for more perfect alignment. The distinctions are illustrated by the following drawings: (3) In submitting the approved claim, Rosen distinguished the action in his plastic rings during compression from the other prior art, particular Snyder, United States Patent No. 2,757,994 (1956). In Snyder the compression forces the entire exterior portion of the rings against the cylinder wall, whereas in the Rosen device compression only forces the upper edge of the rings against the cylinder wall, with the result that Rosen’s rings cause less friction, This third distinction is illustrated below: After these arguments, the patent on Rosen’s claim eleven was granted. But the Examiner did not consider the compression rings in Herbert Herkimer’s text, Engineers’ Illustrated Thesaurus 317 (1952): All three of Rosen’s articulated distinctions from the prior art are clearly obviated by Herkimer’s illustration. Just as the Patent Examiner found no invention by Rosen in substituting Buffing-ton for Lord, we find that in view of the teaching by Herkimer it would not involve an invention to substitute the packing of Herkimer. The general idea of building in a method to compress the rings by adjustment from outside the cylinder dates at least as far back as a patent issued in 1923, McMahon, United States Patent No. 1,474,201, wherein the following device was said to have as one of its “several important objects ... to adjust the pump piston packing without dismantling any part of the pump.” This leaves only the detailed method of adjustment open to patent. Rosen used an inner rod and outer sleeve extending down from the piston head, with the sleeve being adjustable. This method is anticipated by Laurent, United States Patent No. 1,222,424 (1917), shown in the margin. Rosen contends that his pump differs by virtue of the inner rod being fixed, so as not to alter volume displacement above the piston head by the adjustment. Yet the change seems obvious from Laurent, since Rosen merely fastened the threaded inner rod to a crankshaft and substituted a threaded nut for the threaded handle. However, Rosen’s pump attaches the outer sleeve to the nut, unlike Laurent’s and Kahlenberg’s devices. This difference is important for as Rosen himself testified about the superiority of his pump: A. Oh, yes. We felt it had some advantages. That is the reason we did it. Q. What are the advantages ? A. The advantages that you are not depending upon gravity to have the sleeve member lower when you— Q. Retract. A. —retract—when you loosen up the nut. Q. So what is wrong with having gravity permit that sleeve from dropping ? A. Well, if you are pumping material like syrup, for example, or any other viscous material, [sic] may find its way between the sleeve member and the threaded rod and prevent it from dropping by gravity. Q. Can’t you grasp it right here? A. Not too well. If it were stuck — if this material found its way between the threaded portion of the rod, it would seize. You wouldn’t be able to grasp it. You only have a smooth, sliding member. You wouldn’t be able to move it if it froze. Thus the difference between the Rosen claim and the Kahlenberg pump is more than mere form. The two pumps do not function in substantially the same way, so they are not equivalents. Moreover, the difference in the Kahlenberg pump places it in the category of the prior art, giving Kahlenberg absolute protection against the doctrine of equivalents. A patentee cannot enlarge his claim to reach into an area which is not patentable, that is, into an area anticipated by the prior art. Finally, we reach the space, between the shoulder and the lower piston plate, called the “recess.” This area is closed off as the end plates are compressed together. The location of this recess beneath the shoulder appears to be traceable back to the early part of the century, as clearly disclosed by this . French patent in the margin of M. Manfred Balteschwiler, No. 398,899, issued in 1909. Rosen’s advance appears to be the cupping of the lower plate, so that about half the recess lies in the metal bushing, unlike the Kahlenberg device and the French patent where all the recess is in the compression rings. As the claim points out, Rosen’s bushing can then move “against the compression rings without interference from the shoulder.” Presumably, this means that the compression rings are kept in better alignment in the Rosen device, as illustrated below, since the rings will be surrounding and smoothly sliding up the shoulder during compression, rather than bulging out between the shoulder and bushing to cause a bind in thé adjustment. Again, we see that Rosen’s and Kahlenberg’s pumps are not equivalents, because they have another functional difference. Furthermore, Kahlen-berg’s method is obvious, from the French patent and thus falls outside the possible range of equivalents. In summary, we find substantial differences between the Rosen claim and the Kahlenberg device, contrary to ap-pellee Rosen’s assertion here on appeal that the “ [appellants’ commentary on the infringement issue relates essentially to immaterial trivialities in design and truncated speculations in semantics.” When the words are defined so as to be consistent with their use in the entire claim and file wrapper, they show convincingly that the Rosen claim does not describe the Kahlenberg device. The differences become important, because a comparison between the claim and the prior art discloses that Rosen made no advance other than in the two areas of the claim where the differences are located, and whatever advance there is in these precise areas is so narrow as to deserve little protection beyond the boundaries of the claim. Here Kahlen-berg did not copy the characteristics making up the Rosen invention but rather designed a device in the realm of the prior art. Reversed. . The District Judge also held that Rosen was entitled to a permanent injunction against any future infringement by Kah-lenberg. . The specifications provide: The present invention relates to an improved reciprocating pump for pumping predetermined amounts of fluids and particularly to the piston and the piston packing rings. The pump is the type used on filling machine as shown in Patent No. 2,807,213 dated September 24, 1957. One object of the invention is to provide a piston having a plurality of adjustable elastic piston packing rings. Another object of the invention is to provide a means associated with a piston supporting rod with means outwardly from the piston for applying pressure to the piston packing rings for changing the diameter of the packing rings. A further object of the invention is to provide a simple means for making the adjustment of the pressure on the packing rings from a point outside the pump cylinder. A still further object of the invention is to provide a pump packing ring that will have a minimum of drag on the cylinder wall. While several objects of invention have been pointed out, other objects, uses and advantages will become more apparent as the nature of the invention is more fully disclosed, consisting in its novel construction, combination and arrangement of its several parts as shown in the accompanying drawing and particularly referred to in the description to follow. In the drawings: Figure I is a view in elevation of the pump as it would be carried on a support therefor. Figure II is an enlarged vertical view of the pump, partly in section and partly in elevation showing the interior of the pump cylinder and the relative position of the pump piston in respect thereto. Figure III is a greatly enlarged portion of the pump cylinder and piston, partly in section and partly in elevation showing the arrangement of the piston packing when first assembled and without any pressure being applied to the live members. Figure IV is a sectional view taken on line 4 — 4 of Figure II. Figure V is a fragmentary sectional view of several of the elements of the means for adjusting the diameter of the piston packing rings. Figure VI is a further enlarged sectional view, similar to that shown in Fig. Ill, illustrating the manner in which the packing rings engage the cylinder wall after pressure has been applied to the rings. In referring to the drawings like reference numerals are used to point out like and similar parts throughout tiie several views. The pump as shown in Fig. I is adapted to operate on the type of filling machine shown in Patent No. 2,807,213 dated September 24, 1957. The pump is provided with a cylinder 10 having one end closed by the member 12. The member 12 is provided with an opening 14 for admitting a fluid to the upper end of the cylinder 10. The member 12 is hingedly connected to a member 16 which is pivotally supported upon a stationary arbor 20 carried on the supporting housing 22, and in which the mechanism is carried for operating the pump. Connected with the opening 14 is an intake pipe 24, and an outlet pipe 26. The direction of the flow of the fluid being controlled by the valves 28 and 30. Adapted to operate within the cylinder 10 is a piston P, and connected with the piston P is one end of a piston rod R. The piston itself is composed of several parts. The upper end consisting of a plate 32, and the lower end consisting of the plate 34. These piston plates 32 and 34 are movable relative to each other to compress a plurality of elastic piston rings 36, 38, and 40. This movement of the two plates 32 and 34 is accomplished by pressing one end of a tube 42 against the bottom of the plate 34, and connected to the plate 32, is one end of a rod 44, which is adapted to extend outwardly through the tube 42, as shown best in Fig. 2. The plate 34 is provided with a hole which fits closely, but slida-bly over the rod 44, as drawn at 34'. Adjacent the outer end of the tube 42 there is provided a threaded arm 46, which extends beyond the end of the tube 42, and on this threaded arm there is a threaded nut 48. This nut 48 is fixed to the outer end of the tube by a drive fit, or other suitable means. By rotating the nut 48 the rod 44 and the plate 32 is adjustable relative to the tube 42 and the plate 34 respectively. The nut 46 is slotted on one side, as shown at 48". Extending perpendicular of the slot 48" is a screw 49 for locking the nut to the rod 44. The lower end of the threaded arm 46 is fixed to a hinged member 50, which will be hereinafter referred to. The tube 42 and the rod 44 both make up the piston rod R. The piston rod R is guided in its reciprocating movement by a collar 52 threadably attached to the lower end of the cylinder. The collar 52 also prevents the piston P from being completely withdrawn from the cylinder. However, when it becomes necessary to remove the piston, the collar may be removed by unscrewing it from the cylinder. As mentioned hereinbefore the elastic piston rings 36, 38 and 40 are adapted to lie between the two piston end plates 32 and 34. There is also an additional ring 54 which acts only to expand the upper edges of the V-shaped ring 40. This ring 54 has a surface 54' adapted to engage the upper plate 32 and a lower V-shaped surface 54" of approximately 45 degrees which is adapted to engage the V-shaped top surface of the ring 40, which has been described as having its upper side wall in the form of a V and at an angle of 60 degrees with the horizontal top surface of the ring. While the rings 36 and 54 are shown with a flat surface to engage the plates 32 and 34, they may be of any convenient form to engage the inner surfaces of the plates. The packing rings being in the form of a hoop, there is provided a member 56, for filling the space of the piston inwardly from the inner edges of the rings. This member is normally fixed or made a part of the top plate 32. It will be ■ noted that the length of this member 56 is slightly shorter than the distance created by the thickness of the packing rings, as shown best in Figs. Ill and VI. This is to allow for the plates 32 and 34 to be moved toward each other to compress the rings. The pump is operated by having its closed end fixed as to location preferably on a box, or cabinet 22, by the arbor 20. The member 16 is provided with an opening 16', which slips over the arbor 20 and is held from being displaced therefrom by a screw 60 having a beveled point 60', which slidably fits into a groove cut about the arbor (not shown). This groove screw allows the member 16 to pivot on the arbor 20. The member 16 is connected to the member 12 by a pin 17, which hinges the pump cylinder in a plane parallel with tiie elongated axis of the arbor. Referring again to the operation of the piston, the member 50 is hingedly connected to tiie member 62 by a pin 63. The member 62 is similar in construction to tiie member 61 at the closed end of the cylinder and operates in substantially the same manner. The member 62 is carried on an adjustable pinion 04, which in turn is mounted eccentrically on a rotatable shaft 66, by way of an arm 68. The member 62 is held on the pinion 64 by a screw 65 having a beveled point 65'. Associated with this arm 68 are means for adjusting the pinion 64 relative to the axis of the shaft 06. The adjusting means is operated by the knurled screw head 70. By adjusting the position of the pinion 64 relative to the axis of the shaft 66, the stroke of the piston may be adjusted to different lengths and the pump may he adjusted to pump any predetermined amount of fluid for eacli stroke of the piston. The intake pipe 24 is provided with a convenient inlet hose, or pipe 70 which is connected with a fluid supply and the outlet pipe 26 is connected with a convenient outlet hose, or pipe 72 through which the fluid is usually conveyed to smaller vessels, or to other vessels for filling, mixing, etc. Referring again to the flexible piston rings, it will be noted that the upper edges 36', 38' and 40' of each of the rings 36, 38 and 40 are pressed outwardly in contact with the inner surface of the cylinder wall while the edges 36", 38" and 40" are pressed against the stationary center member 56. With this arrangement the upper outer edges 36', 38' and 40' of the rings are very sensitive in their movement to increase, or decrease their diameters by the movement of the plates 32 and 34. While these rings, in Fig. VI, show their remaining surfaces out of contact with the cylinder wall, it is because the illustrations are on a very large scale. However, in actual practice the remaining surfaces 36'", 38'" and 40'" of the rings do have a wiping contact with the cylinder fall. While many types of elastic material may be used for the rings, the best material found to date is “Teflon,” a trade name of E. I. du Pont, for one of their well known synthetic plastic materials. The piston including the plates 32 and 34 and the piston packing rings 36, 38, 40 and 54 are assembled, as shown in Fig. Ill, with the packing ring not under pressure. The rod 44 is extended through the tubular member 42, and the nut 48 is run along the thread member 46 until the plates are moved toward each other until the plates are in contact with the rings. Further movement of the plates toward eacli other will begin to compress the rings forcing the piston packing rings to a point where their outer upper edges 36', 38' and 40' are moved outwardly in contact with the cylinder wall. The screw 49 is set to squeeze the two portions of the nut together to form a self-locking nut. In operation when the piston is moved away from the closed end, fluid is drawn from the inlet pipes 28 and 70, through the opening 14 in the member 12, and into the cylinder 10. When the piston is moved in the opposite direction the fluid is forced out through the same opening 14, but through the exhaust pipes 26 and 72. This type of piston packing ring is very efficient in its operation and is easily adjusted to fit the cylinder wall from outside the cylinder. While the invention has been shown and described in a specific form, it is not intended as a limitation, as the scope of the invention is best defined in the appended claims: References Cited in the file of this patent UNITED STATES PATENTS 1,474,201 McMahon .......Nov. 13,1923 1,744,565 McMahon .......Jan. 21,1930 1,806,078 Miller ..........May 19,1931 2,420,929 Buffington et al. .. May 20,1947 2,600,061 Lord ..........June 10,1952 2,757,994 Snyder .........Aug. 7,1956 2,807,213 Rosen .........Sept. 24,1957 . Thus Rosen’s attorney stated: “I think that the [darkened area] does truly and fairly and accurately show, in each of these, what is by definition a ‘bushing’.” . As an alternative position, Rosen seems to say that even if the term bushing means only the lower metal plate the claim still covers Kahlenberg’s pump. “The recess is in the bushing end of the piston as called for by the claim notwithstanding appellants’ insistence that it must be in the bushing itself.” Brief for Plaintiff-Appellee at 8-9. But this position overlooks the next element in the claim, namely, that the bushing move “over the shoulder.” Certainly, Kahlenberg’s lower plate does not move over the shoulder. Thus Rosen can only show literal infringement by convincing the Court that the term bushing includes both the lower plate and part of the compression rings surrounding the recess. . Consistent with the claim, the specifications state that the “movement of the plates toward each other will begin to compress the rings.” . A comparison of the language of Rosen’s claims nine and eleven reveals what tran-pired. We set forth below claim nine as altered by claim eleven. We have stricken language no longer contained in claim eleven, and added in brackets new language in the later claim, viz: A pump assembly in which a piston is adapted to reciprocate within a cylinder for pumping fluids comprising a cylinder, means at one end of the cylinder through which the fluid is received and discharged, the other end of the cylinder having an opening for slidably receiving a piston rod which extends partly within and without the cylinder, said piston rod comprising an inner [rod member] and [an] outer [sleeve] member, the inner [rod] member having fixed to its tBBen end [within the cylinder the innermost] eae end of the [a] piston, the opposite end of the piston comprising a ri-Bg [bushing] having a central aperture slidably receivable over the inner piston rod member, each piston end being slightly less in diameter than the inner diameter of the cylinder, a fixed shoulder [fixed] extending inwardly from the first HiesfieBed pioten end [fixed innermost end of the piston] and about the enter end of the inner piston rod [adjacent the fixed end of the piston] and of larger diameter than the piston rod for receiving a plurality of Y shaped elastic compression rings [in which at least the center rings are of Y cross-sectional form with flat side surfaces, the rings being] of eaeb sise [such width] as to fill the space between the shoulder and the inner surface of the wall of the piston, the ring [bushing] end of the piston having a recess in its surface adjacent the te shoulder for receiving a portion of the shoulder adjacent thereto to allow the ring [bushing] to be moved [inwardly over the shoulder for a predetermined distance] against the compression rings without interference from the shoulder, the onto? [sleeve] member of the piston rod telescoping the inner [rod] member having ©Be [from the slidable bushing] end [of the piston to a point without the piston adjacent the outer end of the inner rod member having its end within the cylinder] abutting the outer surface of the ring [bushing] end of the piston about the aperture [and opposite the compression rings] therein, the outer end of the inner piston rod member [beyond the opening in the cylinder] being provided with an external thread and the outer end of the enter [sleeve] piston [rod] member [beyond the opening in the cylinder] being provided with [an] internal threads for threadably receiving the threaded end of the inner [rod] member for fixing the two piston rod members relative to each other [and means for locking the two piston rod members in adjusted position], whereby [by adjusting the sleeve member relatively to the inner member] the eaten [sleeve] ptstea red member moves the ri*g member. [bushing end] of the piston relative to the first mentioned [fixed end of the] piston e»d for eempresring the Y ohnpcd [regulating the pressure on the] compression rings and means on the outer end of the inner piston rod member for connecting the same to a crank mechanism. . A foreign patent is relevant as prior art according to 35 U.S.O. § 102(a) (1971) : “A person shall be entitled to a patent unless . . . 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 . . . .”

f2d_474/html/0872-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellee, v. William Sherman TERRELL, et al., Appellants. Nos. 463, 473 and 533, Dockets 72-1710, 72-2217 and 72-2329. United States Court of Appeals, Second Circuit. Argued Dec. 15, 1972. Decided Feb. 22, 1973. Nancy Rosner, New York City (Edmund A. Rosner, New York City, of counsel), for appellants Terrell and McDonald. Mitchel B. Craner, New York City (Guazzo, Silagi & Craner, New York City, on the brief), for appellant Hil-liard. Alan Scribner, New York City (Ivan S. Fisher, New York City, on the brief), for appellant Green. Barbara Rowan, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., John W. Nields, Jr., Asst. U. S. Atty., of counsel), for appel-lee. Before KAUFMAN, ANDERSON and OAKES, Circuit Judges. . While, of course, it is difficult- to prove such a difference absent the original notes, it is not impossible. Other evidence such as a stenographer’s recollections can be adduced. E. g., United States v. Lonardo, 350 F.2d 523 (6th Cir. 1965). The courts have, in effect, given law enforcement agents a little leeway to destroy immaterial matter. But cf. Lee v. United States, 125 U.S.App.D.C. 126, 368 F.2d 834, 837-838 (1966) (even good faith destruction of records coupled with deliberate delay between offense and arrest violated Jencks Act). OAKES, Circuit Judge: All four appellants appeal from convictions of violating the federal narcotics laws, 21 U.S.C. §§ 812, 841(a)(1) and 841(b)(1)(A), and conspiracy, based on the distribution and possession with intent to distribute of % of a kilogram of heroin, and resulting in substantial sentences. Appellant Terrell’s only point on appeal relates to limitation of his attorney’s summation. Appellants Green, Hilliard and McDonald all question the sufficiency of the evidence to convict them of aiding and abetting, as well as the adequacy of Judge Metzner’s charge on the same issue. A recital of the facts is necessary to place appellants’ contentions in context. Two undercover New York City detectives, Bernhardt and Gadson, assigned to the “Joint Task Force,” checked into Room 212 of the west side midtown Howard Johnson’s Motor Lodge on October 8, 1971, for the purpose of keeping an appointment prearranged by an informant with appellant Terrell. After 11:00 p. m. Terrell and appellant Green came up to the room where Terrell and Detective Bernhardt discussed a narcotics sale from the former to the latter, the discussion involving quantity (% of a kilogram), price ($4,700), and quality (“an eight cut,” i. e., the narcotics could be diluted eight times). Green listened but did not himself speak. During the discussion the door to the adjoining room, where surveillance officers were stationed, opened and a detective was seen standing there, gun in hand. De-tive Gadson yelled, “Run,............. run,” and Bernhardt, Green, Terrell and he ran out of the room and down the stairway. Subsequently they met at the corner of 8th Avenue and 51st Street and agreed to meet again at the International Bar on 49th Street. Terrell and Green then entered a brown Cadillac driven by another. Shortly after midnight the same night, the two detectives went to the International Bar to keep' their appointment but neither Terrell nor Green appeared. Following a call to the informant, the detectives taxied to 148th Street and Broadway where at 1:00 a. m. they met Green waiting in front of the Oasis Bar. Green and the detectives entered the previously mentioned Cadillac where they discussed the hotel incident; the detectives passed it off as involving a house detective who had seen Terrell and Green enter the hotel and knew them not to be guests. Green then took the detectives to 150th Street, where Terrell was with appellant Hilliard. Detective Bernhardt got out of the Cadillac while Green drove Detective Gadson around. Terre! and Bernhardt reaffirmed the terms of the heroin sale in Hilliard’s presence and also discussed the hotel incident. Within a few moments, Gadson and Green returned in the Cadillac. Gadson got out of the automobile and Terrell entered the front seat. Terrell and Green drove away, while Hilliard,. Gadson and Bernhardt went to a nearby bar and had some drinks. In the bar, Bernhardt asked where Terrell or Hilliard could be reached in the future. Hilliard wrote a telephone number and the name “Stanley” on a slip of paper and gave it to Bernhardt. The three then crossed the street and entered another bar. Shortly thereafter, Terrell and Green returned in the Cadillac. An Oldsmobile Toronado driven by appellant McDonald —introduced as “Ollie” — pulled up behind the Cadillac. At Terrell’s behest Bernhardt climbed in the front seat of the Oldsmobile. Terrell then entered the rear seat, and when Detective Gadson started to enter Hilliard pulled him back and told him to wait. At some point in time Gadson handed the purchase money — $5,000—to Bernhardt. McDonald, Bernhardt and Terrell then drove off in the Toronado and at a stop light Terrell gave the detective the heroin in the inevitable brown paper bag, and took the money. At a gas stop they discussed other heroin and cocaine sales and meeting three days later in Atlanta, Bernhardt’s supposed home town, to discuss more business. When Terrell told him to ask for “Terrell” at an Atlanta motor lodge, appellant McDonald interrupted and said, “No, ask for McDonald.” McDonald then drove the automobile back to 150th Street. Bernhardt got out of the Oldsmobile and left the area with Gadson. Terrell got out of the Oldsmobile and entered the Cadillac with Green and Hilliard, drove away. Both cars Subsequently Bernhardt had some telephone conversations with Hilliard at the phone number the latter had given Gadson and complained about a shortage in the delivered bag of heroin. Later Gadson called Hilliard who said to call later “and he would be ready to take care of business.” In the later call Hil-liard told Gadson “he had not been in touch with his man, but he would be able to handle the package himself.” The above recital of the facts shows that Hilliard’s and Green’s arguments as to sufficiency are without merit. Green accompanied Terrell to the Howard Johnson Motor Lodge and then, at the very latest, became aware that a narcotics sale was being arranged. He made contact with Gadson and Bernhardt at 148th Street and drove them to 150th Street to meet Terrell. He also drove Terrell away from and back to 150th Street, presumably to pick up the narcotics. He and Hilliard acted more or less as body guards, seeing to it that Terrell was never alone with both the detectives. Hilliard participated in the transactional mechanics that seem so often the concomitant of a narcotics sale: he waited while the man who was to make delivery went to get the drugs; he assisted in the changes of location which one can infer had the purpose of avoiding possible surveillance; he helped protect the man with the paper bag (Terrell) by keeping Gadson out of the Toronado so that Terrell could not be readily relieved of the “goods” without the necessary cash payment. In addition, Hilliard made himself the contact for future sales by giving Bernhardt his phone number and, it could be inferred, offered by telephone either to sell or to make up the deficiency in the original sale and to make further sales himself. There was thus ample evidence from which the jury could conclude Green and Hilliard were active participants in Terrell’s narcotics operation. The question of the sufficiency of the evidence against appellant McDonald is, however, on a different footing. She was present at the time of the transfer and by ready inference (since Bernhardt was in the front seat with his back to the window) knew that it was taking place. “[Kjnowledge that a crime is being committed, even when coupled with presence at the scene,” United States v. Garguilo, 310 F.2d 249, 253 (2d Cir. 1962), without more, however, is generally insufficient to prove aiding and abetting. See also United States v. Fantuzzi, 463 F.2d 683, 690 (2d Cir. 1972); United States v. Cianchetti, 315 F.2d 584, 588 (2d Cir. 1963) (co-conspirator must make an “affirmative attempt” to further the purposes of the conspiracy); United States v. Euphemia, 261 F.2d 441, 442 (2d Cir. 1958). Cf. United States v. DiRe, 159 F.2d 818, 820 (2d Cir. 1947), aff’d, 332 U.S. 581, 68 S.Ct. 222, 92 L.Ed. 210 (1948) (presence of third person with parties to a conspiracy not sufficient grounds to support a warrantless arrest). But in addition to being present at the scene, McDonald operated the Toronado, thereby enabling the sale to be effectuated in the relative concealment of a moving automobile in the early morning hours. Providing this safe haven was sufficient to establish her active participation in the narcotics operation when coupled with guilty knowledge and presence at the scene. Cf. Nye & Nissen Corp. v. United States, 336 U.S. 613, 619, 69 S.Ct. 766, 93 L.Ed. 919 (1949), quoting in part United States v. Peoni, 100 F.2d 401, 402 (2d Cir. 1938) (L. Hand, J.) (“In order to aid and abet another to commit a crime it is necessary that a defendant ‘in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed’”). See also Simon v. United States, 78 F.2d 454, 455-456 (6th Cir. 1935), cited with approval in United States v. Garguilo, supra, 310 F.2d at 253. The driving of the automobile was in this instance a transactional element of the crime. It is true that United States v. Steward, 451 F.2d 1203, 1206-1207 (2d Cir. 1971), held that evidence that an armed chauffeur of a car which carried a drug seller and his wares to a motel where the sale took place was not sufficient to convict the chauffeur of aiding and abetting the sale because there was no showing of the chauffeur’s actual or constructive possession of the drugs. But the court there was careful to distinguish, 451 F.2d at 1207, cases where the defendant had either exclusive, Arellanes v. United States, 302 F.2d 603, 607 (9th Cir.), cert. denied, 371 U.S. 930, 83 S.Ct. 294, 9 L.Ed.2d 238 (1962), or joint, Eason v. United States, 281 F.2d 818, 820-821 (9th Cir. 1960), control over a vehicle in which secreted drugs were found, as well as eases where delivery of the narcotics was made in an automobile over which the defendant had some control or in which he was seen with the principal seller. Mack v. United States, 326 F.2d 481 (8th Cir.), cert. denied, 377 U.S. 947, 84 S.Ct. 1355, 12 L.Ed.2d 309 (1964). Here unlike the chauffeur in Steward but like the appellant in Mack, McDonald “was in attendance at the closing of the venture’s negotiations in [her] automobile” and McDonald’s “providing and operating the means of transportation” in which the sale took place “constituted an essential contribution to the commission of the crime.” 326 F.2d at 486. Moreover, while unlike Mack there was no evidence McDonald shared in the proceeds of the venture, her reference to the Atlanta cocaine transaction under discussion by Terrell and Bernhardt is further evidence of her participation in Terrell’s narcotics operation. No such additional indicia of participation in the narcotics sale was adduced against the chauffeur in Steward. While the evidence against McDonald was not overwhelming, it was not inadequate as a matter of law. All three appellants — Green, Hilliard and McDonald — argue that because the evidence on aiding and abetting was close the trial court should have given a Garguilo charge — that is, one telling the jury specifically that mere presence and guilty knowledge were not enough unless they were convinced that the individual defendant was a participant and not a mere spectator. The charge actually given here read in pertinent part as follows: In order for a defendant to aid or abet another to commit a crime it is necessary that he wilfully associate himself in some way with the criminal venture, that he wilfully participate in it as something that he wishes to bring about, that he wilfully seek by some action of his to make it succeed. This, the usual aiding and abetting charge, we believe was wholly adequate for appellants Green and Hilliard, against whom the evidence was overwhelming and whose counsel did not object to it in any event. As to appellant McDonald, however, for the very reasons stated in Garguilo, 310 F.2d at 254, we think she was entitled to the charge requested by her counsel framed in Gar-guilo terms. Her conviction must therefore be reversed and remanded for a new trial. Appellant Terrell’s objections to the limitations on his argument in summation are two, equally without merit. The first challenges the trial judge’s limitation on argument attacking the credibility of a Government witness, Jackson, whose testimony relating to identification of Terrell’s codefendant Johnson based on a tape recording of the conversation which set up the initial Bernhardt-Terrell meeting had been stricken when the court declared the tape inaudible. But argument based on matter stricken from the record is not proper. United States v. Guajardo-Me-lendez, 401 F.2d 35, 39-40 (7th Cir. 1968); United States v. Spangelet, 258 F.2d 338, 342 (2d Cir. 1958). Since the tape recording itself, as well as Jackson’s identification testimony, was stricken by the trial court the jury was in no position to evaluate arguments about Jackson’s credibility based on them. The second limitation on argument occurred when Terrell’s counsel suggested that Detective Bernhardt’s original notes had been destroyed “because the notes might have embarrassed him or put the lie to him or have been inconsistent with his in-court testimony.” This court has several times held in varying contexts that the Jencks Act, 18 U.S.C. § 3500, imposes no duty on the part of law enforcement officers to retain rough notes when their contents are incorporated into official records and they destroy the notes in good faith. E. g., United States v. Covello, 410 F.2d 536, 545 (2d Cir. 1968), cert. denied, 396 U.S. 879, 90 S.Ct. 150, 24 L.Ed.2d 136 (1969) (good faith destruction does not require new trial); United States v. Jones, 360 F.2d 92, 95 (2d Cir. 1966), cert. denied, 385 U.S. 1012, 87 S.Ct. 721, 17 L.Ed.2d 549 (1967) (good faith destruction does not require striking agent’s testimony). Here there was no suggestion or showing as in United States v. Lonardo, 350 F.2d 523 (6th Cir. 1965), that the notes were deliberately destroyed on the eve of trial and were substantially different in content from the formal report. The court below did not strike Terrell’s argument when initially made but rather instructed the jury in accordance with the Second Circuit eases. When the argument was made the second time that the destruction was deliberate “[b]ecause he didn’t want the notes available to us,” it was properly struck in view of the fact that there was no evidence it was done for that purpose. Argument based upon the destruction of notes without any showing of the circumstances of the destruction may be made, but must be limited to suggestions as to what they might have shown or how the defense (or jury) has been impeded. In the absence of evidence, however, a defendant may not argue that the destruction was in bad faith or deliberate. Judgment affirmed as to appellants Terrell, Green, Hilliard; reversed and remanded for a new trial as to appellant McDonald. . Terrell, 10 years’ imprisonment followed by a 3-year special parole term; McDonald, 3 years’ imprisonment followed by a 3-year special parole term; Green and Hilliard, 5 years’ imprisonment followed by a 3-year special parole term. . While the failure to give a Garguilo charge as to appellants Green and Hilliard does not rise to the level of plain error, see Fed.R.Crim.P. 52(b), the adoption of the Garguilo charge in future cases would have the benefit of avoiding this contention on appeal.

f2d_474/html/0877-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Grosvenor BURNETT et al., Appellants, v. Lt. General John J. TOLSON, Commanding General of Fort Bragg, North Carolina, and Stanley R. Resor, as Secretary of the Army, Appellees. No. 72-1545. United States Court of Appeals, Fourth Circuit. Argued Nov. 2, 1972. Decided Feb. 21, 1973. Widener, Circuit Judge, dissented and filed opinion. Prof. Walter E. Dellinger, III, Durham, N. C. (Charles F. Lambeth, Jr., Thomasville, N. C., on brief), for appellants. F. Stuart Clarke, Asst. U. S. Atty. (Warren H. Coolidge, U. S. Atty., on brief), for appellees. Before CRAVEN, RUSSELL and WIDENER, Circuit Judges. CRAVEN, Circuit Judge: Appellant Burnett and other members of an antiwar organization brought a class action in district court to enjoin the Commanding General of Fort Bragg Military Reservation from prohibiting distribution of certain leaflets on the base. Jurisdiction was alleged under 28 U.S.C. §§ 1331 and 1361. The district court dismissed the suit for lack of jurisdiction, holding that Burnett et al could not establish the $10,000 jurisdictional minimum required by § 1331 and that this was not an appropriate case for mandamus under § 1361. We reverse. Burnett and other leaders of the United Citizens for Peace, a group seeking to bring about an end to the conflict in Vietnam, had previously sought permission from officials at Fort Bragg, North Carolina, to distribute various handbills in the public areas of the base. Burnett submitted two written requests for permission, together with sample leaflets, to the office of the Provost Marshal. These requests were denied after a determination by Lieutenant General John J. Tolson, pursuant to Fort Bragg Regulations Nos. 210-23 and 210-10, that distribution of the leaflets would constitute a “clear danger to the military loyalty, discipline, and morale of military personnel at Fort Bragg.” The Complaint is grounded upon the first amendment and alleges an arbitrary denial of the fundamental first amendment right of speech and expression. It is urged upon us that we should ignore the $10,000 requirement contained in 28 U.S.C. § 1331 or judicially notice that freedom of speech is of great price and value sufficient to come within the pecuniary limitations of the statute. Much has been written on the subject, including, notably, Judge Medina’s expression of regret at what he considered to be an unfortunate gap in federal jurisdiction, Wolff v. Selective Service System, 372 F.2d 817, 826 (2d Cir. 1967), and Chief Judge Lumbard’s forecast that if the “case of a poor man who stands to lose nothing but his most precious personal liberties [by the] unconstitutional actions of the federal government” should ever come before the federal courts, the “old rule requiring the claimed deprivation be capable of monetary valuation would [not] long endure.” Fein v. Selective Service System, 430 F.2d 376, 385 (2d Cir. 1970) (Lumbard, C. J., dissenting). Since we are persuaded that there is jurisdiction in the district court under 28 U.S.C. § 1361, we need not decide these questions, but we note that the last mention of the subject by the Supreme Court in Lynch v. Household Finance Corp., 405 U.S. 538, 92 S.Ct. 1113, 31 ,L.Ed.2d 424, 432 (1972), is not favorable to Burnett’s contentions. 28 U.S.C. § 1361 Burnett places his alternative jurisdictional argument upon the federal mandamus provision, 28 U.S.C. § 1361, which provides: The district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff. Mandamus is an ancient remedy, said to lie only to compel the fulfillment of a duty which is ministerial, plainly and positively ascertained, and free of doubt. Prairie Band of Pottawatomie Tribe of Indians v. Udall, 355 F.2d 364, 367 (10th Cir. 1966). These traditional requirements for invoking federal mandamus were concisely stated by the Fifth Circuit in Carter v. Seamans, 411 F.2d 767 (5th Cir. 1969), at 773: Generally speaking, before the writ of mandamus may properly issue three elements must coexist: (1) a clear right in the plaintiff to the relief sought; (2) a clear duty on the part of the defendant to do the act in question; and (3) no other adequate remedy available. Whether the purview of the common law writ of mandamus was broadened by the inclusion of the words “in the nature of” before the word “mandamus” in § 1361, or whether Congress meant only to make the writ available as at common law, we need not decide. For we think that however narrowly viewed mandamus may be, the allegations of the Complaint are sufficient to confer jurisdiction upon the district court. Where military reservations are open to the public it is now clear that civilians have an unqualified right to enter such public areas and to exercise their constitutionally protected freedom of expression in these areas. Flower v. United States, 407 U.S. 197, 198-199, 92 5. Ct. 1842, 32 L.Ed.2d 653 (1972). In areas of a base open to the public, the military has abandoned any claim that it has special interests in who walks, talks, or leaflets on the avenue. The base commandant can no more order petitioner off of this public street because he was distributing leaflets than could the city police order any leafleteer off of any public street. “[Sjtreets are natural and proper places for the dissemination of information and opinion.” “[0]ne who is rightfully on a street which the state has left open to the public carries with him there as elsewhere the constitutional right to express his views in an orderly fashion.” [citations omitted]. Id. The Third Circuit recently characterized the Flower decision in Spock v. David, 469 F.2d 1047 (3d Cir. 1972). [T]he [Supreme] Court made clear that the power of military authorities to restrict general access to a military-facility ... did not apply to those parts of the facility to which the public has been freely admitted. The Federal Government exercises jurisdiction over the entire reservation [Fort Dix]. Its military policemen enforce traffic regulations and the criminal laws applicable to offenses on federal military reservations. But the fact of the exercise of such jurisdiction does not imply the power to selectively exclude persons solely on the ground of exercise of rights protected by the first amendment. If the reservation is open to all the rest of the public, there is no basis for holding that it may be closed, selectively, to political candidates or to distributors of unapproved literature. Taking the allegations of the Complaint to be true, as we must on appeal from the granting of a motion to dismiss, it appears that Burnett and his class sought only to distribute handbills at places on the military reservation open to the public. It further appears that members of the civilian public are allowed to frequent certain areas of Fort Bragg without any restriction, and that these areas include the shopping center, the post exchange, the post office, and the motion picture theater. Indeed, we have previously had occasion to note that there are areas of Fort Bragg “completely open and unrestricted.” United States v. Bradley, 418 F.2d 688, 689 (4th Cir. 1969); Yahr v. Resor, 431 F.2d 690 (4th Cir. 1970). The allegations of the Complaint, therefore, establish a clear right in Burnett and his class to enter the public areas of Fort Bragg as leafleteers. Plaintiffs have not sought access to restricted areas nor have they threatened to enter them without permission. There has not been interference with the use of “public” streets or sidewalks, and none is intended by Burnett and his class. Despite assurances by Burnett that distribution in public areas will be accomplished in such a manner as not to interfere with or disrupt military functions and activities, and that a distributing group of persons will not exceed five in number, the base commander, according to the Complaint, refused permission to distribute leaflets while arbitrarily and discriminatingly permitting others to make like distributions. The government urges that mandamus will not lie here since the duty Burnett seeks to have fulfilled is not “ministerial.” It is argued that Regulation No. 210-10 vests the Commanding General with “discretion” — i.e., whether to allow Burnett and his class to enter the public areas of the base and distribute leaflets, it is asserted, is within the sound discretion of the commander. We disagree, and on the authority of Flower, supra, we hold that General Tolson is under a duty to allow the orderly expression of views in areas of Fort Bragg generally open to the public. While we think the ministerial-discretionary dichotomy is not very helpful in analysis of the limitations on statutory mandamus, we are not presently confronted with a situation in which discretion is even involved. No officer of the United States, not even a base commander, may exercise his “discretion” to prevent leafletting in areas generally open to the public, Flower, supra, 407 U.S. at 198, 92 S.Ct. 1842, and certainly he may not pick and choose expressions of viewpoints that may be disseminated in such areas. United States v. Crowthers, 456 F.2d 1074, 1078 (4th Cir. 1972). Where the area of the base involved is one open to the public, the base commander has no discretion, but instead a ministerial duty to allow peaceful leaf-letting regardless of the views sought to be expressed. The base commander may, of course, prohibit all distribution of handbills, leaflets, and fliers within areas of a military base that are not open to the general public. Also, he may enforce cosmetic regulations, even in places open to the public, so as to prohibit broadcasting or throwing away handbills and to require that discarded material be placed in receptacles. In short, the government may enforce reasonable regulations to prevent littering. What it may not do is to “favor one pamphlet and reject another because the latter displeases the official in charge” in areas that are open to the public. Crowthers, supra, at 1081. Because we think there is (1) a clear right in the plaintiff to the relief sought, and (2) a clear duty on the part of the defendant to permit the activity sought, we now consider whether the third requirement of traditional mandamus is present: that there is no other adequate remedy available. See Carter, supra, 411 F.2d at 773. We have previously expressed our doubt that there is jurisdiction under 28 U.S.C. § 1331 because of the difficulty with jurisdictional amount. We are unaware of any other statutory authority for supporting jurisdiction in the district court, and none has been suggested to us. That there might possibly be a “back door” entry into the federal court is not, we think, an available adequate remedy. In Spock, supra, 469 F.2d at 1051 it was suggested that the commander of the Fort Dix Military Reservation . could have been sued in the state courts of New Jersey. He would undoubtedly have removed to the federal courts pursuant to 28 U.S.C. § 1442(a)(1), since the suit is for acts which were done under color of his federal office. In the removed action the jurisdictional amount requirement would have been inapplicable because § 1442 is a separate jurisdictional grant without regard to amount in controversy .... We think it clear that assuming such a route to the federal court is available, it is not an adequate remedy within the meaning of the mandamus rule, for it rests not- upon the volition of the plaintiffs but upon the decision of the government to seek removal. We hold that on the allegations of the Complaint in this case there is jurisdiction in the District Court under 28 U.S.C. § 1361 to try the case and to thereupon consider whether or not the plaintiffs may be entitled to a Writ of Mandamus, or an injunction, or a declaratory judgment, establishing their right to their freedom of expression in areas of Fort Bragg that are open to the general public. If the district court should determine that plaintiffs are entitled to relief it may, of course, confine relief to the allowing of leafletting at appropriate times -and places so as to assure that the activity will be peaceful and will not disrupt the organization and operation of the military establishment. Reversed. WIDENER, Circuit Judge (dissenting) : I must respectfully dissent. On December 5, 1969 and December 18, 1969, plaintiffs, The Fort Bragg Leafletting Committee of the United Citizens for Peace, submitted identical requests to the Provost Marshal’s Office of Fort Bragg requesting permission “to distribute the attached leaflet” respectively on December 13, 1969 and January 30 or 31, 1970. The request stated “Distribution will be in public areas on a postwide basis, and will be accomplished in such a manner as not to interfere with or disrupt military functions and activities.” Plaintiffs stated in their application they would accomplish “proper police and cleanliness.” The leaflet contained remarks which, at least, must be considered uncomplimentary to the Army command and could not have helped troop morale. Among other things, the Commanding General was “of the opinion that each of the two proffered publications had as their only possible goals the undermining of military loyalty, discipline, and morale at Fort Bragg.” In this setting, the Provost Marshal denied the requests on December 10 and December 23, 1969. On January 2, 1970, plaintiffs sued the Commanding General and the Secretary of the Army, claiming jurisdiction under 28 U.S.C. §§ 1341, 1343, 1346 and 1361, and 42 U.S.C. § 1983, and the First and Fifth Amendments to the Constitution. The matter in controversy, exclusive of interest, was alleged to exceed the value of $10,000. The complaint stated the action is .brought “For a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2203, and for a preliminary and permanent injunction.” The prayer of the complaint prayed for a declaratory judgment pursuant to 28 U.S.C. § 2201, declaring the Fort Bragg regulations concerning distribution of literature to be unconstitutional; for an order declaring the plaintiffs to be constitutionally entitled to distribute leaflets “On those areas of Fort Bragg open to the public in the manner specified in the written requests;” and for a preliminary and permanent injunction enjoining the defendants from prohibiting the plaintiffs “from a peaceful distribution of leaflets to willing takers on those areas of Fort Bragg open to the public.” It is quite noteworthy that nowhere did the plaintiffs pray that the refused permit issue. The defendants filed an answer which included motions to dismiss for lack of jurisdiction and failure to state a claim. They also filed an affidavit of the Commanding General at Fort Bragg explaining in some detail his reasons for refusing to issue the permit, the conclusions of which have been copied above. The situation stood here when the district court granted the motion to dismiss on March 9, 1972 because it lacked jurisdiction over the subject matter under 28 U.S.C. §§ 1331 and 1361. The plaintiffs appealed. 28 U.S.C. § 1331(a), provides: “The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and arises under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1361, provides: “The district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.” JURISDICTION UNDER § 1331(a) The holding of the majority is that “We hold that on the allegations of the Complaint in this case there is jurisdiction in the District Court under 28 U.S. C. § 1361 to try the case and to thereupon consider whether or not the plaintiffs may be entitled to a Writ of Mandamus, or an injunction, or a declaratory judgment.” A footnote indicates that mandamus jurisdiction permits a flexibility in remedy. Insofar as injunctive or declaratory relief is concerned, the most recent expression of the Supreme Court is that in Lynch v. Household Finance Corp., 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972), where the court said: “. . .in suits against federal officials for alleged deprivation of constitutional rights, it is necessary to satisfy the amount in controversy requirement for federal jurisdiction.” 405 U.S. 538, 547, 92 S.Ct. 1113, 1119. Although the majority opinion here notes that Lynch is “not favorable to [plaintiffs’] contentions,” the holding is in direct contradiction to the expressed command of Lynch insofar as injunctive and declaratory relief is concerned. The majority opinion here overlooks the fact that conflicts between the various circuits have been settled by Lynch, as it does a very recent decision of this court, McGaw v. Farrow, 472 F.2d 952 (4th Cir. 1973), in which we held in a remarkably similar fact situation (a chapel) arising at Fort Eustis: “There seems little doubt that this conclusion denying jurisdiction under Section 1331 was sound. Though a few decisions have held contrariwise, a like conclusion has been reached in a majority of decisions of Circuit Courts of Appeals. Whatever differences there may have previously been in these decisions would appear, however, to have been set at rest by the recent decision in Lynch. . . .” Id., at 954. The opinion further holds that claims, such as the ones in McGaw and in the instant case, . . not measurable in ‘dollars and cents’ fail[s] to meet the jurisdictional test of amount-in controversy.” Id., at 954. By refusing to use the measuring stick of Lynch, as construed by McGaw in this circuit less than a month ago, the majority, by invoking jurisdiction under 28 U.S.C. § 1361, actually will have the district court consider whether to give injunctive or declaratory relief under § 1331(a), which is expressly prohibited by Lynch and McGaw unless the amount in controversy test may be met. JURISDICTION UNDER 28 U.S.C. § 1361 If my premise is correct that the district court was without jurisdiction under § 1331(a), the only avenue for relief for plaintiffs is by way of action “in the nature of mandamus” under § 1361. The panel properly sets out three elements which must be met before mandamus may issue: 1. A clear right in the plaintiff to the relief sought. 2. A clear duty on the part of the defendant to do the act in question. 3. No other adequate remedy available. These three elements must coexist. The existence of one is not sufficient, as the majority notes. My principal objection to the reversal of the district court on this ground is that neither is there a clear right in the plaintiffs to the relief sought, nor is there a clear duty on the part of the defendants to do the act in question. The act in question, of course, is to issue the permit to distribute the leaflets, although such was not prayed for in the complaint. When plaintiffs filed their suit, they modified the request which had been made to the Provost Marshal. The request which had been made to the Provost Marshal was to distribute the leaflets “in public areas on a postwide basis.” The complaint, in paragraph 5, mentions distribution of the leaflets “on the public areas of Fort Bragg.” It later, in paragraph 8, states that plaintiffs intend to confine their activities to “these public areas, which include the shopping center, the post exchange, the post office, and the motion picture thea-tre,” and that “members of the Civilian Public circulate in these areas of Fort Bragg without restrictions and of course are free to converse with off-duty servicemen.” It thus appears that the permission sought in the request and the permission sought in the complaint are somewhat different. The generally accepted definition of public places, which I equate with public areas, is a place at which people assemble or to which they commonly resort for the purpose of business, amusement, recreation, or other lawful purpose. See 35 Words and Phrases, p. 433, et seq., and cases there cited. Of course, this would include banks, stores, theatres, dispensaries, hospitals, apartment and housing complexes, athletic fields, and all the thousand and one areas in which servicemen and their families live in which the Commanding General had allowed civilians to circulate in an effort to make military life somewhat less onerous for the numbers of servicemen stationed at Fort Bragg. We have here a case of all “public areas” in Fort Bragg, not only streets, sidewalks, and parks which have been historically associated with First Amendment rights. See Lloyd Corp. v. Tanner, 407 U.S. 551, 92 S.Ct. 2219, 33 L.Ed.2d 131 (1972). At the time the request was refused by the Provost Marshal, the applicable law with relation to the Post Commander’s obligation was stated in Cafeteria Workers v. McElroy, 367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961) as follows : “It is well settled that a Post Commander can, under the authority conferred on him by statutes and regulations, in his discretion, exclude private persons and property therefrom, or admit them under such restrictions as he may prescribe in the interest of good order and military discipline.” [Emphasis added] 367 U.S. 886, 893, 81 S.Ct. 1743, 1748. At the point, then, when the Provost Marshal denied the requests, in view of the affidavit submitted by the Commanding General, it was in his discretion whether or not to exclude the leaf-leteers from the base, it being obvious from the affidavit that in the opinion of the Commanding General such exclusion was necessary in the interest of good order and military discipline. The same state of law appertained at the time the district court dismissed the complaint March 9, 1972. On June 12, 1972, the Supreme Court decided Flower v. United States, 407 U.S. 197, 92 S.Ct. 1842, 32 L.Ed.2d 653. Flower decided that a street on Fort Sam Houston was a place upon which a base Commander could not prohibit distribution of literature without a permit. The court said: “The base commandant can no more order petitioner off of this public street because he was distributing leaflets than could the city police order any leafleteer off of any public street. . . . ‘[S]treets are natural and proper places for the dissemination of information and opinion.’ . ‘[0]ne who is rightfully on a street which the state has left open to the public carries with him there as elsewhere the constitutional right to express his views in an orderly fashion.’” 407 U.S. 197, 198, 92 S.Ct. 1842, 1843. The rationale of thus excluding streets from the rule of Cafeteria Workers v. McElroy was: “Under such circumstances the military has abandoned any claim that it has special interests in who walks, talks, or distributes leaflets on the avenue.” 407 U.S. 197, 198, 92 S.Ct. 1842, 1843. The court did not exempt from the operation of the rule in Cafeteria Workers v. McElroy all places on a military base where civilians may circulate without restriction but only those places to which “the military has abandoned any claim that it has special interests in. . . .” 407 U.S. 197, 198, 92 S.Ct. 1842, 1843. The mere fact that the civilian public may circulate freely in some areas of Fort Bragg without restriction is no indication that the military has abandoned any claim to a special interest in such areas. The requests made and turned down by the Provost Marshal were much broader than the streets of Fort Bragg, or the areas of Fort Bragg in which the military had abandoned any special interest, as indeed was the complaint filed. Under such circumstances, at the time the request was made and at the time of the dismissal by the district court, the Commanding General was acting well within his discretionary authority in declining to issue the permit. Even under Flower, the request and the complaint seek permission to distribute leaflets in a much broader area than the narrow exception annunciated by Flower. In such a case, the discretion which should be exercised in the first instance should be that of the Commanding General and not that of the district court. In United States v. Wilbur, 283 U.S. 414, 51 S.Ct. 502, 75 L.Ed. 1148 (1931), the court stated that mandamus will issue “. . . only where the duty to be performed is ministerial and the obligation to act peremptory and plainly defined. The law must not only authorize the demanded action, but require it; the duty must be clear and indisputable.” 283 U.S. 414, 420, 51 S.Ct. 502, 504. In discussing what acts are ministerial and therefore subject to mandamus, the court said in Wilbur v. United States, 281 U.S. 206, 218, 50 S.Ct. 320, 324, 74 L.Ed. 809 (1930): “Where the duty in a particular situation is so plainly prescribed as to be free from doubt and equivalent to a positive command it is regarded as being so far ministerial that its performance may be compelled by mandamus, unless there be provision or implication to the contrary. But where the duty is not thus plainly prescribed, but depends upon a statute or statutes the construction or application of which is not free from doubt, it is regarded as involving the character of judgment or discretion which cannot be controlled by mandamus.” [Footnotes omitted] 281 U.S. at 218, 50 S.Ct. at 324. Neither the request, then, nor the complaint states a case in the light of Cafeteria Workers v. McElroy as modified by Flower. The duty of the Commanding General to issue the permit is neither clear nor indisputable. Indeed, considering the broad scope of the application, declining to issue the permit was well within his discretionary authority. Should plaintiffs’ application have been framed so as to place it within the narrow confines of Flower, perhaps we should have had another case, but there is no non-discretionary obligation on the part of the Commanding General to issue a permit when the permission sought is broader than that required by Flower, as was the case here. Neither was there any obligation on the part of the district court to fashion equitable relief upon an application for mandamus; indeed, it had no jurisdiction to so act in the premises. Mandamus commands a public official to perform his ministerial, non-discretionary duty. If the permit sought were within the duty prescribed, the Commanding General might have had an obligation to issue it. Since the permit sought was broader than the Commanding General’s non-discretionary obligation, the district court may not substitute its discretion for the Commanding General’s and assume equitable or declaratory jurisdiction of the matter contrary to the express commands of Lynch and McGaw. Had this case been treated as a simple remand reciting the fact that Flower was not available to the district judge at the time of his decision, and requiring him to reconsider in the light of Flower should plaintiffs wish to amend their request, many of my reservations might be removed. I doubt we would hear of the matter again. The broad overtones of the majority opinion, however, and, indeed, its express command, as it directs consideration of injunctive and declaratory relief, in the face of, and contrary to, Lynch and McGaw, under the guise of mandamus jurisdiction, make if necessary that I express my views. This is a clear case of federal courts extending the jurisdiction conferred on them by Congress. See McGaw, 472 F.2d at 954-957, for an excellent analysis of the question. . Fort Bragg Regulation No. 210-23 provides as follows: 1. Purpose. The purpose of this directive is to establish policies for the control of the distribution of publications on this post. 2. General Policy. a. The distribution of publications, including pamphlets, newspajters, magazines, handbills, flyers and other printed material on the Fort Bragg Military Reservation will not be made except through regularly established distribution outlets, under appropriate contractual agreements, or as required by law or regulation. b. The Installation Commander may grant exceptions to the policy contained in this paragraph. Applications for exceptions shall be submitted in writing to the Provost Marshal, this headquarters, at least seven days prior to the date of the proposed distribution describing the method of distribution proposed and including a copy of the publication or publications involved. 3. Reference: AR 210-10. . Fort Bragg Regulation No. 210-10, K 5-5, f c provides as follows: If it appears that the dissemination of a publication presents a clear danger to the loyalty, discipline, or morale of troops at this installation, the installation commander may without prior approval of higher headquarters, delay the distribution of any publication which he considers undesirable, on property subject to his control. . See Cortright v. Resor, 325 F.Supp. 797, 809 (E.D.N.Y.1971), for a good collection of this literature. E. g., Note, Judicial Review of Military Surveillance of Civilians: Big Brother Wears Modern Army Green, 72 Colum.L.Rev. 1009, 1014-1018 (1972). We note that an act is now before Congress to abolish the $10,000 requirement in actions based upon a federally created right. Hearings on S. 1876 Before the Subcomm. on Improvements in Judicial Machinery of the Senate Comm, on the Judiciary, 92d Cong., 1st Soss., pt. 1, at 1 (1971). . But see Spock v. David, 469 F.2d 1047 (3d Cir. 1972). Recent decisions on this subject conflict. For cases denying jurisdiction under § 1331 see, e. g., Goldsmith v. Sutherland, 426 F.2d 1395 (6th Cir. 1970); Giancana v. Johnson, 335 F.2d 366 (7th Cir. 1964). For cases upholding jurisdiction see, e. g., Fifth Ave. Peace Parade Comm. v. Hoover, 327 F.Supp. 238 (S.D.N.Y.1971); Cortright v. Rosor, 325 F.Supp. 797 (E.D.N.Y.1971); Murray v. Vaughn, 300 F.Supp. 688 (D.R.I.1969). See Note, Judicial Review of Military Surveillance of Civilians: Big Brother Wears Modern Army Green, 72 Colum.L.Rev. 1009, 1019-1022, 1051-1054 (1972). . E. g., Carey v. Local Board No. 2, Hartford, Conn., 297 F.Supp. 252, n. 3 (D.Conn.), aff’d, 412 F.2d 71 (2d Cir. 1969). See generally 3 K. Davis, Administrative Law Treaties § 23.09 (Supp. 1965). When Congress was considering the enactment of 28 U.S.C. § 1361, it was the recommendation of the Department of Justice that the statute include the word “ministerial” before the word duty. The suggestion was not accepted by Congress. The omission may be significant. . E. g., Massachusetts v. Connor, 248 F.Supp. 656, 659 (D.Mass.), aff’d, 366 F.2d 778 (1st Cir. 1966). . On remand it -will be for the district court, of course, to determine what areas of Fort Bragg are open to the public in the Blower sense. Our recitation of the allegations of the complaint is that only. . To accept the government’s contention that General Tolson’s duty here was “discretionary” rather than “ministerial” does not necessarily resolve the question of the availability of mandamus. It is not easy to tell what the cases mean. For example, in Cortright v. Resor, 325 F.Supp. 797 (E.D.N.Y.1971), the government did not even challenge the district judge’s holding that there was mandamus jurisdiction under 28 U.S.C. § 1361 to review the order of the commanding general transferring soldiers to different stations — certainly a matter ordinarily within his discretion. Again, the Second Circuit, in United States ex rel Sehon-brun v. Commanding Officer, 403 F.2d 371, 374 (2d Cir. 1968), recognized that although mandamus jurisdiction was not available to direct the exercise of discretion, “official conduct may have gone so far beyond any rational exercise of discretion as to call for mandamus even when the action is within the letter of the authority granted.” In Feliciano v. Laird, 426 F.2d 424 (2d Cir. 1970), it was held that the failure of the Army to follow its own regulations was enough to support the writ of mandamus and that the disapproval of an application for a hardship discharge was arbitrary and irrational rather than within the discretion of the military authority. In Nixon v. Secretary of Navy, 422 F.2d 934, 939 (2d Cir. 1970), it was said as to the military, “there are certain limitations to this ‘hands-off’ policy, and official military conduct may go so far beyond the limits of what may be considered a rational exercise of discretion as to call for mandamus.” Long before the enactment of the present statute, Chief Justice Taft spoke to the ministerial-discretionary dichotomy: Mandamus issues to compel an officer to perform a purely ministerial duty. It cannot be used to compel or control a duty in the discharge of which by law he is given discretion. The duty may be discretionary within limits. He cannot transgress those limits, and if he does so, he may be controlled by injunction or mandamus to keep within them. The power of the court to intervene, if at all, thus depends upon what statutory discretion he lias. Work v. United States ex rel. Rives, 207 U.S. 175, 177, 45 S.Ct. 252, 09 L.Ed. 561 (1925). Compare the excerpt from Bivens v. Six Unknown Named Agents of the Fed. Bur. of Narc., 409 F.2d 718, 723, (2d Cir. 1969), rev’d on other grounds, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971) : Few more unseemly sights for a democratic: country operating under a system of limited governmental power can be imagined than the specter of its courts standing powerless to prevent a clear transgression by the government of a constitutional right of a person with standing to assert it. See also: Dash v. Commanding General, 307 F.Supp. 849 (D.S.C.1969), aff’d, 429 F.2d 427 (4th Cir. 1970) (mandamus jurisdiction apparently assumed); Chase v. Robson, 435 F.2d 1059 (7th Cir. 1970) (mandamus available against a district judge to prevent prior restraint of first amendment freedom of speech); Yahr v. Resor, 431 F.2d 690 (4th Cir. 1970) (mandamus jurisdiction apparently assumed); Murray v. Vaughn, 300 F.Supp. 688 (D.R.I.1969). . It is far from certain that such a suit could be maintained in a state court. See e. g., Alabama v. Rogers, 187 F.Supp. 848 (M.D.Ala.), aff’d mem., 285 F.2d 430 (5th Cir. 1961). See also Arnold, The Power of State Courts to Enjoin Federal Officers, 73 Yale L.J. 1385 (1964); Warren, Federal and State Court Interference, 43 Harv.L.Rev. 345 (1930). . Mandamus jurisdiction under 28 U.S.C. § 1361 permits flexibility in remedy. Davis, supra note 5.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Ernest Carl WALKER, Appellant, v. Ira M. COINER, Warden, West Virginia State Penitentiary, Appellee. No. 14759. United States Court of Appeals, Fourth Circuit. Argued Oct. 31, 1972. Decided Feb. 21, 1973. Certiorari Dismissed June 25, 1973. See 93 S.Ct. 3072. James H. McCauley (Court-appointed counsel), Belpre, Ohio, for appellant. Richard E. Hardison, Asst. Atty. Gen. (Chauncey H. Browning, Jr., Atty. Gen., Willard A. Sullivan, Asst. Atty. Gen., on brief), for appellee. Before WINTER, RUSSELL and WIDENER, Circuit Judges. WIDENER, Circuit Judge: The facts in this case are not in dispute. Appellant, Ernest Carl Walker, was indicted for armed robbery of the Public Finance Company in Charleston, West Virginia. On January 9, 1969, appellant was returned from the State of Florida to West Virginia for trial. Upon execution of a pauper’s affidavit, counsel was appointed to represent him. On June 9, 1969, appellant appeared with his counsel, asked the trial court’s leave to file, and subsequently did file, a verified motion to quash the indictment and moved the court for an order authorizing the taking of the deposition of S. Dow Walker of Florida and authorizing reasonable expenses for such deposition. Appellant stated by affidavit that the Florida witness was necessary to corroborate his alibi defense. By order dated August 19, 1969, the trial court overruled the motion to quash and the motion to depose, at state’s expense, the Florida witness. Following a not guilty plea, appellant was found guilty in a trial by jury and sentenced to a term of forty years in the West Virginia State Penitentiary. This appeal presents the following questions: I. Was appellant denied effective assistance of counsel by the absence of his court appointed attorney at a hearing on the motion to quash the indictment? II. Was appellant denied effective assistance of counsel by the trial court’s refusal to provide funds for court-appointed counsel’s use in interviewing and deposing appellant’s non-resident alibi witness? III. Was appellant denied due process by the prosecution’s closing argument remark that the court could put appellant on probation ? I. Appellant’s first contention is without merit for the simple reason that the record shows that there was no hearing upon his motion to quash the indictment. In his brief, counsel for appellant states the following: “ . . . the record indicates that Appellant and his counsel jointly appeared before the trial court on June 9, 1969 and tendered and filed a verified motion to quash the indictment, and that the State was granted a period of time within which to reply thereto. It further appears that the State’s reply was filed June 23, 1969. An August 19, 1969 court order overruled the motion to quash. Apparently, no formal hearing was conducted by the Court, but it appears that the trial court considered and disposed of the motion to quash after both Counsel for Appellant and the State were given an opportunity to present their views on the motion.” [Emphasis added.] Since there was no hearing, there was no place for appellant’s attorney to be present. There is no constitutional requirement that a court have a formal hearing to announce a ruling on a written motion. We note that appellant’s attorney presented this question on appeal pursuant to appellant’s direction. II. Appellant’s second point, that he was denied effective assistance of counsel because the trial court would not order the taking, at state’s expense, of the deposition of a non-resident witness, presents the most serious part of this appeal. Counsel’s argument of the issue is somewhat novel in that he raises the question as one of effective assistance of counsel as well as equal protection of the law. However, for reasons which follow, we find it unnecessary to reach the issue in either form. Appellant attacks the validity of § 62-3-1 of the West Virginia Code, which provides, in pertinent part, as follows: “If any witness for the accused be a nonresident of the State, or absent therefrom in any service or employment, so that service of a subpoena cannot be had upon him in this State . . . the accused may present to the court ... an affidavit showing such facts, and stating therein what he expects to prove by any such witness, his name, residence, or place of service or employment; and if such court or judge be of the opinion that the evidence of any such witness ... is necessary and material to the defense of the accused on his trial, an order may be made by such court or judge for the taking of the deposition of any such witness upon such notice to the prosecuting attorney . . . and in such order the court or judge may authorize the employment of counsel, practicing at or near the place where the deposition is to be taken, to cross-examine the witness on behalf of the State, the reasonable expense whereof shall be paid out of the treasury of the State.” The Supreme Court of Appeals of West Virginia has construed this statute so as not to authorize or require payment of public funds upon the motion of an accused to take the deposition of a nonresident witness. State v. Davis, 153 W.Va. 742, 172 S.E.2d 569 (1970). Appellant contends that because the statute would allow a defendant who could afford it an out of state deposition for his defense, yet deny the same to an indigent defendant, it is unconstitutional. It is, however, unnecessary to reach this question, because an alternative means of securing the attendance of appellant’s alibi witness was readily available. Prior to 1931, there existed no means by which a state court could compel the attendance of a witness from outside the state. Cf. Minder v. Georgia, 183 U.S. 559, 22 S.Ct. 224, 46 L.Ed. 328 (1901); Annot., 44 A.L.R.2d 732; Comment, 29 Wash. & Lee L.Rev. 383 (1972). To remedy this situation, the National Conference of Commissioners on Uniform State Laws adopted the Uniform Act to Secure the Attendance of Witnesses from Without a State in Criminal Cases. (Amended in 1936 as “Uniform Act to Secure the Attendance of Witnesses from Without a State in Criminal Proceedings.”) At least forty-five states have adopted the act, including the jurisdictions involved in this case. Fla. Stat.Ann. § 942.01; West Va.Code Ann. § 62-6A-1; Vol. 9, Uniform Laws Ann.; 29 Wash. & L.Rev. 383. The act applies in each of two states which have adopted it such as Florida and West Virginia. To utilize the statute, an application is made to the judge of the court in which the prosecution is pending. If the judge finds that the requested witness is material, he issues a certificate so stating. The certificate is then presented to a judge of a court of record in the county in which the witness is found. That judge then issues a summons for the witness to appear and holds a hearing to determine if the witness is material and necessary. If he so finds, he issues an order directing the witness to attend and testify in the court where the prosecution is pending. The witness then must attend after being tendered the specified statutory fee or else be subject to punishment as if he had violated a summons to appear before a court of record in his own state. Concerning payment, the uniform act expressly provides: “If the witness is summoned to attend and testify in this State he shall be tendered the sum of ten cents a mile for each mile by the ordinary traveled route to and from the court where the prosecution is pending, and five dollars for each day that he is required to travel and attend as a witness.” The statute is silent as to when the payment must be made or who must make it. The act contains another payment provision which is worded slightly differently. “If the witness, who is summoned as above provided, after being paid or tendered by some properly authorized person the sum of ten cents a mile, etc., . . . fails to attend he shall be punished in the manner provided for the punishment of any witness who disobeys a summons issued from a court of record in this state.” It is apparent that someone in the requesting state must furnish funds to tender the witness the statutory fee. The tender is obviously made through the authorities in the state where the witness is found. In any event, before the witness can be compelled to attend, the statutory fee must be tendered. The statutory question of the source of the money for the fee has not been judicially commented upon in West Virginia. There are several cases as collected in the note in 44 A.L.R.2d 732 arising from other jurisdictions which have decided that the act does not require the state to pay the expenses. See State v. Hemmenway, 80 S.D. 153, 120 N.W.2d 561; State v. Blount, 200 Or. 35, 264 P.2d 419 (1953); State v. Swenson, 243 Minn. 24, 66 N.W.2d 1 (1954); Vore v. State, 158 Neb. 222, 63 N.W.2d 141 (1954); State v. Fouquette, 67 Nev. 505, 221 P.2d 404, cert. den. 341 U.S. 932, 71 S.Ct. 799, 95 L.Ed. 1361 (1950). But see Preston v. Blackledge, 332 F.Supp. 681 (E.D.N.C.1971). However, we are advised in a supplemental memorandum by the Attorney General that it is the custom and practice in West Virginia, in the case of an indigent defendant who desires to secure a non-resident witness, for the County Court of the particular county in which the defendant is to be tried to tender the money to the witness. The County Court is then reimbursed by the State Auditor out of what is known as the Criminal Charges Fund. A readily available method existed whereby appellant could have secured his witness which was not more onerous than the basis for invoking the statute to take the deposition of the absent witness. Accordingly, we see no need to unnecessarily question the validity of the West Virginia statute authorizing depositions from non-resident witnesses and are of opinion there is no merit to appellant’s second contention in the posture presented to us in this appeal. III. Appellant’s third contention, that he was denied due process of law because of a remark made by the prosecutor, arises from the following facts: During closing argument to the jury, defense counsel stated that appellant had already spent ten or eleven months in jail. In rebuttal, the prosecution stated by way of explanation that there had been a lot of continuances for which the defendant was responsible and that sentencing was for the court anyway. The exact language was: “And it is not up to you all to determine the amount of punishment if this man is found guilty. That is up to the Court, he can put him on probation if he wants, or send him to the penitentiary; but that is the court’s job.” No objection was made by defense counsel and there was no request for a curative instruction. Defense counsel invited the remarks in his closing argument, and the objection now comes rather late to warrant serious consideration. In any event, we agree with the district court’s determination that, while the statement may have been an inaccurate portrayal of state law, the remark had the effect of reminding the jury that sentencing is for the judge, not the jury. The error, if it be such at all, was purely one of state law not rising to constitutional dimensions cognizable at this stage of review. Grundler v. North Carolina, 283 F.2d 798 (4th Cir. 1960). For the foregoing reasons, the opinion of the district court is Affirmed.

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Lawrence ROTHBLUM et al. v. BOARD OF TRUSTEES OF the COLLEGE OF MEDICINE & DENTISTRY OF NEW JERSEY et al. Appeal of Lawrence Rothblum et al. No. 71-2049. United States Court of Appeals, Third Circuit. Argued Nov. 30, 1972. Decided Feb. 22, 1973. As Amended March 13, 1973. Jerry N. Friedland, Barr, Kaplus & Friedland, East Orange, N. J., for appellants. George F. Kugler, Jr., John P. Sheridan, Deputy Atty. Gen., Trenton, N. J., for appellees. Before BIGGS, KALODNER and ADAMS, Circuit Judges. OPINION OF THE COURT BIGGS, Circuit Judge. Rothblum and Gilbard and “John Doe”, plaintiffs-appellants, allegedly citizens of New York and of the United States and federal taxpayers, filed an amended complaint (complaint) requesting the convening of a three-judge district court pursuant to 28 U.S.C. § 2281 et seq., and seeking to have certain alleged discriminatory admission practices of the New Jersey College of Medicine and Dentistry (College) declared to be unconstitutional. They seek their admission to the College and allege they were denied admittance to the College solely because of their foreign citizenship in violation of Article IV, Section 2(1), Article I, Section 8(1), and the Equal Protection Clause. The amendment to the complaint was for the purpose of creating a class action. On June 18, 1971 a rule to show cause was issued by a single district judge as to why the relief sought should not be granted to the plaintiffs. On June 25, June 30, and July 6, 1971, hearings were had before the district court. These hearings seem to have been devoted to the issues of whether or not a preliminary injunction should issue and whether or not a three judge district court should be convened pursuant to 28 U.S.C. §§ 2281 and 2284. The essential allegations of the complaint which are supported by proof are as follows: “3. The Defendant Board of Trustees of the College of Medicine & Dentistry of New Jersey is the governing body of the Defendant College of Medicine of Dentistry of New Jersey and pursuant to N.J.S.A. 18A:64G — 3 and 4 is vested with the government control, conduct, management and administration of Defendant College. “Defendant Dr. Stanley S. Bergen, Jr., is the President of Defendant College and pursuant to N.J.S.A. 18A:64G-11 is responsible to the Defendant Board of Trustees and has the power of executive management and conduct of the Defendant College in all departments, branches and divisions, and for the execution and enforcement of the bylaws, rules, regulations and orders governing the management, conduct and administration of the Defendant College; This Defendant is sued in his official capacity. “Defendant College of Medicine & Dentistry of New Jersey is an establishment in the Department of Higher Education of the State of New Jersey for the operation of a program of medical and dental education, created under N. J.S.A. 18A:64G-1 to 3, and is hereinafter referred to as ‘The Medical School’. “Defendant Dr. Arthur J. Kahn is Dean of Admissions of the College of Medicine of New Jersey, and has general supervisory authority over admissions to the Defendant medical school, and is sued in his official capacity. “4. The Court has jurisdiction over the parties hereto and of the subject matter of the Complaint, and as will fully appear from the facts hereinafter set forth, a justiciable issue is raised which entitles the Plaintiffs, inter alia, to a declaratory judgment under United States Code, Title 28, Section 2201 as to the validity of the State policy hereinafter put in issue. * * * * * * “6. Defendant ‘medical school’ is and has been the recipient of vast sums I® of federal funds collected by the Government of the United States under its taxing power (Article I, Section 8(1)) and disbursed by the Government of the United States pursuant to legislation (42 U.S.C. 290, et seq.) passed under the authority to expend money for the general welfare (Article I, Section 8(1)) and to promote the Progress of Science (Article I, Section 8(8)). Upon information and belief, without the said federal funds, it would have been and would presently be economically impossible for the Defendant ‘medical school’ to perform its statutory functions under N.J. S.A. 18A:64G. “7. Federal support of state and private health programs and functions issue from a comprehensive federal funding and health promotion plan outlined and authorized by 42 U.S.C., Section 290 et seq. Educational fund allocation provisions and fund use regulations and conditions comprising a massive health spending program are contained in 42 U.S.C., Section 292 — -Section 298c-8. This Congressional undertaking clearly reflects a federal recognition of the national character of problems like public health, health care, and medical education. “8. The Defendants enumerated hereinabove have established and have implemented a policy of admission to the Defendant ‘medical school’ whereby applicants who are citizens of the State of New Jersey are given preference to equally qualified or more qualified applicants who are citizens of other States.” The amended complaint prays for in-junctive relief against the College authorities’ preferential admission policy and seeks to have the plaintiffs admitted to the College. Rothblum and Gilbard applied for entrance into the freshman class of the College and sought to commence their studies on or about September 1971. Doe sought admission to the College with the class entering in September 1972. As we have said, all allege they were denied admission solely because they were not citizens of the State of New Jersey. At the hearings on the substantiality of the federal question involved, evidence was given by Dr. Arthur Kahn that the plaintiffs were refused admission because their marks were of such poor quality as not to warrant their entrance into the freshman class. It is interesting to note that at no time did Dr. Kahn categorically deny that New Jersey citizens seeking admission to the College were given preference. In fact, counsel for the College made such a concession. The District Judge held in his letter memorandum of September 9, 1971 to counsel as follows: “The only witness to testify at the hearing was Dr. Arthur Kahn, Dean of Student Affairs and Admissions. He stated that the admissions procedures of the College were established by an admissions committee composed of faculty members and students. Applicants to the College for the scholastic year commencing in 1971 were required to furnish the committee with a transcript of their undergraduate grades, two references and the scores of their Medical College Admissions Tests. Those applicants with high undergraduate cumulative averages (A, A— B + ) were given personal interviews. Those applicants with favorable interviews were accepted into the College. Then, applicants with lower undergraduate cumulative averages (B, B —) were interviewed and either accepted or rejected. “As a result of this procedure approximately 300-350 interviews were conducted and 225 acceptances were awarded for 110 places in the freshman class. Twenty seven non-New Jersey citizens received acceptances. “Dr. Kahn admitted that as a result of oral communications from Chancellor of Education and the President and Dean of the College, New Jersey citizens were given preference over foreign citizens with the same cumulative averages. But he also testified that no applicant with a B— or C+ average was awarded an acceptance, and that applicants with averages of C+ or lower were not even afforded an interview. “Both plaintiffs had cumulative averages of no better than C+ and consequently were not interviewed by the committee. Thus, defendants contend that (1) the College’s preference for New Jersey citizens played no part in plaintiffs’ rejection by the committee; (2) had plaintiffs been citizens of New Jersey they would have been similarly rejected and, therefore, (3) plaintiffs lack standing to challenge the alleged discriminatory procedures.” This is the basis of the district court decision and none other is asserted. Plaintiffs contend that a three-judge district court was required under 28 U. S.C. § 2281, and therefore the single district judge did not have authority to dismiss for lack of standing or go beyond the allegations of the complaint to decide this question. Secondly they argue that even if the district court did not exceed its authority, the court erred in its determination that the plaintiffs lacked standing. For reasons discussed hereinafter, we find both these contentions to be without merit. Section 2281 is of deceptively simple nature. It has been said that the rules of review of whether a three-judge court is needed “are so complicated as to be virtually beyond belief.” Wright, Law of Federal Courts, Hornbook Series, 2d ed., Ch. 8, Section 50, and Sardino v. Federal Reserve Bank of New York, 361 F.2d 106, 114 (2 Cir. 1966), cert. denied, 385 U.S. 898, 87 S.Ct. 203, 17 L.Ed.2d 130 (1966). The characterization of the statute just quoted is a large understatement. It appears to be the law that a three-judge court must be constituted if a substantial constitutional question is presented by the complaint. Ex parte Poresky, 290 U.S. 30, 32, 54 S.Ct. 3, 4, 78 L.Ed. 152 (1933): “The existence of a substantial question of constitutionality must be determined by the allegations of the bill of complaint.” Poresky also teaches us that the claim is insubstantial if “it is obviously without merit” or its unsoundness is disclosed by previous decisions, probably of the Supreme Court. See Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 716, 82 S.Ct. 1294, 8 L.Ed.2d 794 (1962); Gong v. Kirk, 375 F.2d 728, 729 (5 Cir. 1967); Cf. Oldroyd v. Kugler, 461 F.2d 535, 540 (3 Cir. 1972). Cf. Goosby v. Osser, 409 U.S. 512, 93 S.Ct. 854, 35 L.Ed.2d 36. From the face of the amended complaint it would appear that, however casual the language, there is a policy in effect in the College granting preferential admissions to citizens of New Jersey. A substantial constitutional issue, therefore, was before the district court, accepting literally the plaintiffs’ allegations. There are, however, other important considerations. A three-judge court “is required where the challenged statute or regulation, albeit created or authorized by a state legislature, has statewide application or effectuates a statewide policy. But a single judge, not a three-judge court, must hear the case where the statute or regulation is of only local import. Moody v. Flowers, 387 U.S. 97 [87 S.Ct. 1544, 18 L.Ed.2d 643] (1967); Rorick v. Board of Commissioners, 307 U.S. 208 [59 S.Ct. 808, 83 L.Ed. 1242] (1939); Ex Parte Public National Bank, 278 U.S. 101 [49 S.Ct. 43, 73 L.Ed. 202] (1928); Ex Parte Collins, 277 U.S. 565 [48 S.Ct. 585, 72 L.Ed. 990] (1928). This rule achieved the congressional purpose of saving statewide regulatory legislation from invalidation through ordinary federal court equity suits, minimized the burden which the three-judge court places upon the federal judiciary and avoided unduly expanding the [Supreme] Court’s carefully limited appellate jurisdiction. Phillips v. United States, 312 U.S. 246, 250 [61 S.Ct. 480, 85 L.Ed. 800] (1941).” Board of Regents of University of Texas System v. New Left Education Project, 404 U.S. 541, 542-543, 92 S.Ct. 652, 653, 30 L. Ed.2d 697 (1972). In Regents, swpra, it was held that a suit to enjoin the enforcement of rules governing the distribution of certain kinds of literature, promulgated by the Board of Regents of the University of Texas System, was not one which required a three-judge district court since the rules applied to “but three of the 23 four-year state colleges and universities listed in the Higher Education Coordinating Act of 1965 [Texas Civ.Stat. Ann.], Art. 291(e)-2, § 2 (Supp.1970). In addition . . ., Texas ha[d] at least 31 public junior colleges which [were] not within the University of Texas system. ... It [was] therefore apparent that the Regents’ rulemaking power and the rules at issue in this litigation extend [ed] to but a fraction of the campuses in the Texas System of higher public education.” 404 U.S. at 543-544, 92 S.Ct. at 654. The Supreme Court therefore dismissed the appeal as one over which it had no jurisdiction. See 28 U.S.C. § 1253. Mr. Justice White stated: “These [Regents’] rules can scarcely be described as matters of statewide concern or expressions of a statewide policy when a large percentage of Texas colleges and universities are unaffected by them and could not be affected by any pronouncement that a federal court might make on their constitutionality. There is no suggestion or indication of any kind that the Regent’s rules are similar to those for other schools or are required by or express statewide policy.” See, Regents, at 544, 92 S.Ct. at 654, and n. 2 cited to the text. In the case at bar a somewhat similar educational situation exists, albeit on a lesser scale than that of Texas. Rutgers University is the hub of New Jersey higher education. See N.J.S.A. 18A:65-3, providing for a state college for the benefit of agriculture and mechanic arts, The College of Arts and Sciences, the School of Business Administration, Douglass College, Paterson College, the Graduate School of Social Work, and the School of Law. It is provided that the Board of Governors shall have general supervision over and be vested with the conduct of the university and shall have the authority and responsibility, inter alia, to determine policies for the organization, administration and development of the university. N.J.S.A. 18A:65-25. See also, N.J.S.A. 18A:65-26. The specific statute creating the College of Medicine and Dentistry is set out below. It will be observed that the College has a separate Board of Trustees, N.J.S. 18A:64G-4, unrelated to the other separate institutions of higher learning governed by Title 18A such as the School of Law or the College of Arts and Sciences. There is no suggestion or indication in the complaint or in the record that the policy challenged here exists at the other state schools or represents general state policy. The complaint does not even allege a rule-making power vested in the Trustees. The allegation is simply that the defendants have implemented a policy of admission for this one college preferring citizens of New Jersey tó non-citizens. During the course of the hearings before the district court, counsel for the defendants stated that there was preferential treatment and that there was “some statement in one of the Board of Trustees’ minutes” that deals with the problem of preferential admissions. We have stated that whether a three-judge court should be appointed pursuant to § 2281 depended upon the allegations of the complaint and if a substantial constitutional issue was presented, a three-judge court should be appointed. The law as laid down by the Supreme Court in the Regents case is binding upon us and, of course, upon the court below, and the allegations of the complaint must be viewed in the light of this law. The various provisions of Title 18A of the New Jersey statutes to which we have referred are also to be considered as part of the law of the case and were before the district court and must be deemed also to be completely relevant to the complaint. If the law of Regents be applicable here to render the “policy” of the Trustees of the College a local concern, then it was for the single judge to hear the case. We are mindful of the fact that the College is the only medical and dental school in New Jersey created by New Jersey statute. But we think that Regents indicates that we should consider this one institution as only a small part of the entire New Jersey scheme of higher public education for purposes of determining whether the policy in question is “statewide.” In Regents, it is apparent that medical and other specialized schools were so regarded. Therefore, as was the case in Regents, the policy here may not be said to be a matter of statewide concern or statewide policy when a large percentage of New Jersey’s public institutions of higher education are unaffected by it and could not be affected by any pronouncement which a federal court might make on its constitutionality. In short, this policy, “applying only to some of the higher educational institutions of the State, [is] of limited significance and [does] not partake of the quality and dignity of those state statutes or policies that three-judge, courts were designed to consider.” 404 U.S. at 545, 92 S.Ct. at 655. There can be no “improvident state-wide doom by a federal court” of a state’s policy in the case at bar. Phillips v. United States, 312 U.S. 246, 251, 61 S.Ct. 480, 483, 85 L.Ed. 800 (1941) (Emphasis added). Since we hold that this was not a proper case for the convening of a three-judge district court, we need not reach the issue of whether in a ease requiring three judges a single judge can consider matters outside the allegations of the complaint in deciding a plaintiff’s standing. We therefore proceed to the plaintiffs’ final contention, that the court below erred in its determination that the plaintiffs lacked standing. The district court determined that the plaintiffs lacked standing to challenge the alleged discriminatory policy on the basis of uncontroverted evidence that such policy played no part in the rejection of their applications for admission. We agree. “[A] person cannot challenge the constitutionality of a statute unless he shows that he himself is injured by its operation,” as the Supreme Court stated in Barrows v. Jackson, 346 U.S. 249, 255, 73 S.Ct. 1031, 1034, 97 L.Ed. 1586 (1953). See Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972); Massachusetts v. Mellon, 262 U.S. 447, 488, 43 S.Ct. 597, 67 L.Ed. 1078 (1923). It is the fact of injury to the complainants, not to others, which justifies judicial intervention. See McCabe v. Atchison, Topeka and Santa Fe Railway Company, 235 U.S. 151, 162-164, 35 S.Ct. 69, 59 L.Ed. 169 (1914). In addition, the plaintiffs’ assertion of standing as federal taxpayers under Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), is inapposite. Plaintiffs have not alleged the unconstitutionality of an exercise of congressional power under the taxing and spending clause of Art. I., § 8 of the Constitution, as was the case in Flast. The challenge here is to the policy of a recipient of federal tax dollars and not the federal funding plan itself, 42 U.S.C. § 290 et seq. Thus there is lacking the “logical link between that status [as taxpayers] and the type of legislative enactment attacked.” Flast v. Cohen, supra, at 102, 88 S.Ct. at 1954. Nor can the present suit continue as a class action. Since Rothblum and Gilbard lack standing to sue on their own behalf, “[t]hey cannot represent a class of whom they are not a part.” Bailey v. Patterson, 369 U.S. 31, 32-33, 82 S.Ct. 549, 550, 7 L.Ed.2d 512 (1962). See also Thaxton v. Vaughan, 321 F.2d 474 (4 Cir. 1963); DiJulio v. Digicon, Inc., 339 F.Supp. 1284 (D.Md. 1972). The judgment of the district court will be affirmed. . Article IV, Section 2(1) provides: “The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.” . Article I, Section 8(1) provides in pertinent part: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay Debts and provide for the Common Defence and general Welfare of the U.S.....” . Amendment XIV, Section 1, provides in pertinent part: “Xo state shall . deny to any person within its jurisdiction the equal protection of the laws.” . Judge Whipple’s original order is not clear. It states: “ [T] he court having considered the verified complaint and application for temporary relief and memorandum and argument in support of this order to show cause, and the court having determined that immediate and irreparable injury will result to plaintiffs if the relief requested in the complaint is not granted, said relief including the admittance of jjlaintiffs to the freshman class. . . . ” (Emphasis added.) The balance of the order, however, in pertinent part treats the finding of the first paragraph quoted as subject to the rule to show cause. . 28 U.S.C. § 2281 reads as follows: “An interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such State in the enforcement or execution of such statute or of an order made by an administrative board or commission acting under State statutes, shall not be granted by any district court or judge thereof upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title.” . Local U. #300, Amalgamated Meat Cutters and Butcher Workmen of North America v. McCullough, 428 F.2d 396 (5 Cir. 1970). . N.J.S.A. 18A :64G-1 to 4 provides: “18A:64G-1. Short title. This act shall be known and cited as the ‘Medical and Dental Education Act of 1970.’ “ISA :64-G-2. Findings and declaration. The Legislature and Governor of the State of New Jersey hereby find that the establishment and operation of a program of medical and dental education is in the best interest of the State to provide greater numbers of trained medical personnel to assist in the staffing of the hospitals and public institutions and .agencies of the State and to prepare greater numbers of students for the general practice of medicine and dentistry, and find, declare and affirm, as a matter of public policy of the State, that it is the responsibility of the State to provide funds necessary to establish and operate such programs of education, in the most economical and efficient manner, and that, in furtherance of such policy, the school of medicine heretofore established by Rutgers, The State University (hereinafter called the ‘Rutgers Medical School’) and the New Jersey College of Medicine, and Dentistry shall be combined into a single entity to bo known as the College of Medicine and Dentistry of New Jersey. “18A :G4G-3. Establishment of College of Medicine and Dentistry. There is hereby established in the Department of Higher Education the ‘College of Medicine and Dentistry of New Jersey.’ The exercise by the college of the powers conferred by this act in the presentation and operation of a program of medical and dental education shall be deemed to be public and essential governmental functions necessary for the welfare of the State and the people of New Jersey. “18A :64G-4. Board of Trustees, a. The government, control, conduct, management and administration of the college shall be vested in the board of trustees of the college. The membership of the board of trustees shall consist of the Chancellor of the Department of Higher Education and the Commissioner of Health, who shall serve ex officio, without vote, and 11 voting members, each of whom shall be appointed by the Governor, with the advice and consent of the Senate, for a term of 3 years and shall serve until his successor is appointed and has qualified; except that, of the first appointments hereunder, four shall be for terms expiring Juno 30, 1971, four for terms expiring June 30, 1972, and three for terms expiring June 30, 1973. The term of each of the first appointees hereunder shall be designated by the Governor. Any vacancies in the voting membership o£ the board occurring- other than by expiration of term shall be filled in the same manner as the original appointment but for the unexpired term only. Each voting member of the board of trustees before entering upon his duties shall take and subscribe an oath to perform the duties of his office faithfully, impartially and justly to the best of his ability. A record of such oath shall be filed in the office of the Secretary of State. Each voting member of the board may be removed from office by the Governor, for cause, after a public hearing. “b. The members of the board of trustees shall meet at the call of the Governor for purposes of organizing. The board shall thereafter meet at such times and places as it shall designate. “c. The Governor shall designate one of the voting members as chairman of the board. The board shall select such other officers from among its members as shall be deemed necessary. “d. The board shall have the power to appoint and regulate the duties, functions, powers and procedures of committees, standing or special, from its members and such advisory committees or bodies, as it may deem necessary or conducive to the efficient management and operation of the college, consistent with this act and other applicable statutes.” . See Minutes, Board of Trustees, College of Medicine and Dentistry of New Jersey, Jan. 7, 1971, p. 5: “Tuition and out of state students: It was agreed that the Board would not recommend any change in the current tuition and fees charged students of the college. Following discussion of the current situation, it was also agreed that no rigid limitation should be established on the proportion of out-of-state students admitted to the College, but that informal guidelines should be established by the admission officers at each center on this matter.” It should be made clear that the College of Medicine and Dentistry of New Jersey is an autonomous institution run by its own trustees. It is also interesting to note that the College includes four schools: The Graduate School of Biomedical Sciences, Newark; New Jersey Dental School, Jersey City; New Jersey Medical School, Newark, and Rutgers Medical School, Pis-cataway. . The Regents case was not decided at the time Judge Whipple entered the judgment appealed from here. . See Regents, 404 U.S. at 543, 92 S.Ct. at 654, as follows: “It is true that the Board of Regents governs numerous medical and other specialized schools and branches, [Texas Civ.Stat.Ann.] Arts. 2603 e-i, 2606 b-d, but these are only-some of the specialized institutions which Texas denominates as agencies of higher education.” . The record is clear that both Rothblum and Gilbnrd were rejected solely for their C-plus averages and significantly poor records in science courses. Transcript of Hearings on June 30, 1971 and July 6, 1971, pp. 33-39. The policy of preference was only relevant as to residents and nonresidents witli approximately equal academic records. We have received an affidavit with accompanying letters (the latter being largely illegible) relating to the out-of-state student who was accepted desjnte his inferior academic records and standing. We conclude that, assuming the contents of the affidavit contained in Supplemental Record No. 2 are true and correct, nonetheless we do not deem this to be sufficient to set aside the judgment of the trial court on what is an obvious issue of fact. . The addition of “John Doe” as a party-plaintiff does not aid Rothblum and Gil-bard. “John Doe” came first into English law as the fictitious plaintiff in the action of ejectment. See Bouvier’s Law Dictionary, Rawle’s 3rd Revision. We cannot deem the name “John Doe” to be a pseudonym in the instant case. Cf. Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973), and Doe v. Bolton, 410 U.S. 179, 93 S.Ct. 739, 35 L.Ed.2d 201 (1973). We deem “John Doe” in the instant case to be a fictitious person and conclude therefore that there can be no justiciable controversy between him and the appellees under the circumstances at bar. . Simple inquiry would have informed counsel for the plaintiffs that the New Jersey College of Medicine was the recipient of a federal grant of $23,494,170.-00 for a new facility. Construction Grants Administered by the Division of Physician & Health Professions Education (U.S. Dept, of Health, Education & Welfare, 1971).

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Rogelio GUTIERREZ, Petitioner-Appellee, v. W. J. ESTELLE, Director, Texas Department of Corrections, Respondent-Appellant. No. 72-3570 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 1, 1973. Rehearing Denied May 10, 1973. Crawford Martin, Atty. Gen., Gilbert J. Pena, Asst. Atty. Gen., Austin, Tex., for respondent-appellant. Rogelio Gutierrez, Servanndo Gonzalez, McAllen, Tex. (Court-Appointed), for petitioner-appellee. Before BELL, GODBOLD and IN-GRAHAM, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409. INGRAHAM, Circuit Judge: Rogelio Gutierrez is a prisoner of the State of Texas, having been convicted of assault with intent to murder without malice. Upon proof of two prior felony convictions, his sentence was enhanced to life imprisonment under Art. 63 of the Texas Penal Code. Asserting that the prior convictions were constitutionally infirm under Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), and thus inadmissible for enhancement, Burgett v. Texas, 389 U.S. 109, 88 S.Ct. 258, 19 L.Ed.2d 319 (1967), Gutierrez has sought relief in the state, Gutierrez v. State, 456 S.W.2d 84 (Tex.Cr.App.1970), and federal courts. On direct appeal of the assault case, Gutierrez v. State, supra, the Texas Court of Criminal Appeals held Gutierrez bound by the record entries of the prior convictions — that he had appeared in person and by counsel. In state ha-beas corpus proceedings, Gutierrez was unable to secure a hearing, the last •being denied by the Texas Court of Criminal Appeals without written order. Having exhausted available state remedies, Gutierrez petitioned the Federal district court for habeas corpus relief. The district court, faced with allegations of a state’s use of assertedly unconstitutional convictions for the enhancement of a conviction and without the benefit of an adequate state court hearing, Townsend v. Sain, 372 U.S. 293, 83 S.Ct. 745, 9 L.Ed.2d 770 (1963), properly put the state to its burden of defending the prior enhancing convictions. Craig v. Beto, 458 F.2d 1131 (5th Cir., 1972); Reed v. Henderson, 463 F.2d 485, 487, at note 2 (5th Cir., 1972). A minute entry alone is insufficient to prove previous representation by counsel or the waiver thereof. Loper v. Beto, 405 U.S. 473, 92 S.Ct. 1014, 31 L.Ed.2d 374 (1972); Dulin v. Henderson, 448 F.2d 1238 (5th Cir., 1971). An evidentiary hearing was held which produced testimony that Gutierrez’s pri- or convictions had both resulted from his counseled pleas of guilty. Counsel appointed for the habeas corpus hearing, however, developed a constitutional infirmity in the prior convictions. The testimony and record entries of the two pri- or convictions do not disclose an appearance by counsel at sentencing, nor were either of his two attorneys able after so many years to recall whether they had in fact been present at the imposition of the respective sentences. Gutierrez, however, testified, with familial corroboration, that he had stood sentencing unrepresented. Despite the probabilities against Gutierrez’s having twice been unrepresented at separate sentencings, the district court held the ambiguous record sufficient to establish that Gutierrez had in fact been unrepresented at the allocution of sentence. Relying on Burgett, supra; Mempa v. Rhay, 389 U.S. 128, 88 S.Ct. 254, 19 L.Ed.2d 336 (1967), and Townsend v. Burke, 334 U.S. 736, 68 S.Ct. 1252, 92 L.Ed. 1690 (1947), the district court reasoned that a lack of counsel at sentencing (whose presence is required by Mempa, supra) invalidated a record of conviction such that it could not be used for enhancement. Accordingly, it held the enhanced sentence invalid and on the authority of United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972), ordered Gutierrez resenteneed without recourse to the two prior felony convictions. The State of Texas appeals. On appeal the state argues that the use of prior convictions does not taint the jury’s imposition of life imprisonment because the prior sentences at issue were the result of plea bargains. A plea bargain, the state asserts, removes from the state sentencing judge any discretion, thereby rendering the imposition of sentence a ministerial act at which counsel is not required. Williams v. Beto, 354 F.2d 698 (5th Cir., 1965); Fairris v. Beto, 446 F.2d 1290 (5th Cir., 1971). The district court correctly replied to this argument: “Although recognizing that sentencing is a critical .stage of all criminal proceedings, the Fifth Circuit Court of Appeals has held that if the sentencing of a defendant is a mere ministerial act, that the absence of counsel at the sentencing does not require reversal of the conviction. Williams v. Beto, 354 F.2d 698 (CA5, 1965). The Honorable Judge Carl 0. Bue, Jr. of this District, in an opinion that was affirmed and adopted by the Court of Appeals, held that the Mempa decision was not controlling in a case in which a jury had set the term to be served and the defendant was not represented by counsel at sentencing. Fairris v. Beto, 446 F.2d 1290 (CA5, 1971). The sentencing being one of a merely mechanical nature, the Court stated that the petitioner had failed to show how he was prejudiced by the lack of counsel. It is to be noted that Judge Bue specifically refrained from deciding the issue of whether counsel was required at sentencing, due to the mechanical nature of the sentencing in the particular case. “It would appear that this case is of a different nature as regards sentencing. Certainly the sentencing process in the burglary and robbery causes herein may not be characterized as ministerial. The Judge was endowed with ample leeway in assessing the sentences, regardless of any bargain between the defendant’s attorney and the prosecutor. Tex.Pen.Code Ann., Arts. 1397, 1408 (1953); Tex.Code Crim.P.Ann., Art. 42.12 (1966).” We need only add the sad commentary based on the number of appeals to this court which assert that plea bargains have not been kept; e. g., Hilliard v. Beto, 465 F.2d 829 (5th Cir., 1972), rehearing en banc granted December 1, 1972; Gallegos v. United States, 466 F.2d 740 (5th Cir., 1972), rehearing en banc granted December 1, 1972. Experience has demonstratéd that a plea bargain does not render imposition of sentence into a ministerial act for application of the Williams or Fairris cases. The state’s argument also fails to discern the distinction between cases directly reviewing sentences obtained •without counsel at sentencing and cases challenging the use of those convictions for enhancement. See text and note 2, infra. Given the ambiguous record of representation presented the district court, it properly found that the sentences imposed in the two enhancing convictions were invalid. Burgett v. Texas, supra; Mempa v. Rhay, supra; Townsend v. Burke, supra. The court then, however, took a quantum leap by holding the sentencing deficiencies invalidated the. record of the underlying convictions when used for enhancement. The leap was unwarranted and we reverse. Sentencing, like other pretrial and trial proceedings, is a critical stage in the criminal process at which counsel is required, Mempa v. Rhay, supra; Townsend v. Burke, supra, but the defect is not one which goes to the validity of a judgment of conviction. Rather it is one which goes to the sentence imposed. United States v. Tucker, supra. A reading of the Supreme Court’s opinions on the Sixth Amendment right to counsel, culminating in Argersinger v. Hamlin, 407 U.S. 25, 92 S.Ct. 2006, 32 L.Ed.2d 530 (1972), makes it clear that the integrity of the fact finding determination of guilt is at issue. Thus, in Powell v. Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158 (1932), the Court rejected the notion that counsel was not required in a capital case and said: “The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel at every step in the proceedings against him. Without it, though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence. If that be true of men of intelligence, how much more true is it of the ignorant and illiterate, or those of feeble intellect.” 287 U.S. at 68-69, 53 S.Ct. at 64. Then in Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938), the Court declared: “[The Sixth Amendment] embodies a realistic recognition of the obvious truth that the average defendant does not have the professional legal skill to protect himself when brought before a tribunal with power to take his life or liberty, wherein the prosecution is [re] presented by experienced and learned counsel. That which is simple, orderly and necessary to the lawyer — to the untrained layman — may appear intricate, complex and mysterious.” 304 U.S. at 462-463, 58 S.Ct. at 1022. Expanding the right of counsel to indigent state defendants, the Court in Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), proclaimed : “[I]n our adversary system of criminal justice, any person haled into court, who is too poor to hire a lawyer, cannot be assured a fair trial unless counsel is provided for him. This seems to us to be an obvious truth. Governments, both state and federal, quite properly spend vast sums of money to establish machinery to try defendants accused of crime. Lawyers to prosecute are everywhere deemed essential to protect the public’s interest in an orderly society. Similarly, there are few defendants charged with crime, few indeed, who fail to hire the best lawyers they can get to prepare and present their defenses. That government hires lawyers to prosecute and defendants who have the money hire lawyers to defend are the strongest indications of the widespread belief that lawyers in criminal courts are necessities, not luxuries. The right of one charged with crime to counsel may not be deemed fundamental and essential to fair trials in some countries, but it is in ours. From the very beginning, our state and national constitutions and laws have laid great emphasis on procedural and substantive safeguards designed to assure fair trials before impartial tribunals in which every defendant stands equal before the law. This noble ideal cannot be realized if the poor man charged with crime has to face his accusers without a lawyer to assist him.” 372 U.S., at 344, 83 S.Ct. at 796. Applying the right to counsel to a juvenile proceeding in which incarceration was a possibility, the Court in In re Gault, 387 U.S. 1, 87 S.Ct. 1428, 18 L.Ed.2d 527 (1966), stated: “ * * * A proceeding where the issue is whether the child will be found to be ‘delinquent’ and subjected to the loss of his liberty for years is comparable in seriousness to a felony prosecution. The juvenile needs the assistance of counsel to cope with problems of law, to make skilled inquiry into the facts, to insist upon regularity of the proceedings, and to ascertain whether he has a defense and to prepare and submit it. The child ‘requires the guiding hand of counsel at every step in the proceedings against him.’” 387 U.S. at 36, 87 S.Ct. at 1448. Affording another form of retroactivity to Gideon by proscribing the use of invalid convictions for enhancement, the Court in Burgett held: “Still another is illustrated by Pointer v. Texas, 380 U.S. 400, 85 S.Ct. 1065, 13 L.Ed.2d 923. In that case we held that a transcript of a preliminary hearing had to be excluded from a state criminal trial because the defendant had no lawyer at that hearing, and did not, therefore, have the opportunity to cross-examine the principal witness against him who since that time had left the State. The exclusionary rule that we fashioned was designed to protect the privilege of confrontation guaranteed by the Sixth Amendment and made applicable to the States by the Fourteenth. “The same result must follow here. Gideon v. Wainwright established the rule that the right to counsel guaranteed by the Sixth Amendment was applicable to the States by virtue of the Fourteenth, making it unconstitutional to try a person for a felony in a state court unless he had a lawyer or had validly waived one. And that ruling was not limited to prospective applications. See Doughty v. Maxwell, 376 U.S. 202, 84 S.Ct. 702, 11 L.Ed.2d 650; Pickelsimer v. Wainwright, 375 U.S. 2, 84 S.Ct. 80, 11 L.Ed.2d 41. In this case the certified records of the Tennessee conviction on their face raise a presumption that petitioner was denied his right to counsel in the Tennessee proceeding, and therefore that his conviction was void. Presuming waiver of counsel from a silent record is impermissible. Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70. To permit a conviction obtained in violation of Gideon v. Wainwright to be used against a person either to support guilt or enhance punishment for another offense (see Greer v. Beto, 384 U.S. 269, 86 S.Ct. 1477, 16 L.Ed.2d 526) is to erode the principle of that case. Worse yet, since the defect in the prior conviction was denial of the right to counsel, the accused in effect suffers anew from the deprivation of that Sixth Amendment right.” 389 U.S. at 114-115, 88 S.Ct. at 262. See also, Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601; Moore v. Michigan, 355 U.S. 155, 78 S.Ct. 191, 2 L.Ed.2d 167 (1957); Hamilton v. Alabama, 368 U.S. 52, 82 S.Ct. 157, 7 L.Ed.2d 114 (1961); and Reece v. Georgia, 350 U.S. 85, 76 S.Ct. 167, 100 L.Ed. 77 (1955). The underlying principle of the need for counsel carries through the time of sentencing as is shown by the Supreme Court’s decision in United States v. Tucker, supra: “In Burgett we said that ‘[t]o permit a conviction obtained in violation of Gideon v. Wainwright to be used against a person either to support guilt or enhance punishment for another offense . . . is to erode the principle of that case.” 404 U.S. at 449, 92 S.Ct. at 593. The Court’s subsequent holding in Loper v. Beto, 405 U.S. 473, 92 S.Ct. 1014, 31 L.Ed.2d 374 (1972), makes it even more evident that it is the reliability of the counsel-less guilt determination and not the length of sentence which is the significant factor to the resolution of our case. “The Tucker case involved only that aspect of Burgett that prohibits the use of invalid prior convictions to ‘enhance punishment.’ The case now before us involves the use of such convictions ‘to support guilt.’ For the issue of innocence or guilt in this case turned entirely on whether the jury would believe the testimony of an 8-year-old girl or that of Loper. And the sole purpose for which the prior convictions were permitted to be used was to destroy the credibility of Lo-per’s testimony in the eyes of the jury. “Unless Burgett is to be forsaken, the conclusion is inescapable that the use of convictions constitutionally invalid under Gideon v. Wainwright to impeach a defendant’s credibility deprives him of due process of law. We can put the matter no better than in the words of the Court of Appeals for the First Circuit: “ ‘We conclude that the Burgett rule against use of uncounseled convictions “to prove guilt” was intended to prohibit their use “to impeach credibility,” for the obvious purpose and likely effect of impeaching the defendant’s credibility is to imply, if not prove, guilt. Even if such prohibition was not originally contemplated, we fail to discern any distinction which would allow such invalid convictions to be used to impeach credibility. The absence of counsel impairs the reliability of such convictions just as much when used to impeach as when used as direct proof of guilt.’ Gilday v. Scafati, 428 F.2d 1027, 1029.” 405 U.S. at 482-483, 92 S.Ct. at 1018-1019. Compare Worts v. Dutton, 395 F.2d 341, 344-345 (5th Cir., 1968), and Martin v. United States, 182 F.2d 225 (5th Cir., 1950). Mempa v. Rhay, supra, and Townsend v. Burke, supra, upon which the district court relied, while together requiring the presence of counsel at sentencing, do so to protect rights significant to that phase of the proceeding and not to the previous determination of guilt. Mempa v. Rhay, supra, 389 U.S. at 135, 88 S.Ct. 254; Worts v. Dutton, supra; Martin v. United States, supra. Nor does McConnell v. Rhay, 393 U.S. 2, 89 S.Ct. 32, 21 L.Ed.2d 2 (1968) require a different result. While the district court noted that on rare occasion information obtained after conviction but before sentencing, when presented at sentencing, has induced a trial court to vacate an adjudication of guilt or impose a lenient sentence, those considerations support the conclusion that counsel at sentencing is fundamental and do not necessitate striking every record of conviction when used for enhancement in which sentencing occurred without counsel. Unlike Burgett or Tucker the guilt of Gutierrez in the enhancing convictions was determined in proceedings which were not constitutionally infirm; nor is it asserted that the conviction for assault is constitutionally infirm. The imposition of sentence in the two enhancing proceedings has been found to have been infirm for lack of counsel, but those sentences are not themselves before us. Any attack on the enhancing convictions must be collateral. Craig v. Beto, supra. Thus, we look not at the length of the sentences imposed in the prior convictions, but to the fact of the convictions and their constitutional validity. We hold that prior felony sentences which could be subject to attack for failure of counsel to appear at sentencing do not nullify the fact of the underlying conviction when used for enhancement. United States v. Tucker, supra. Indeed, the language of Texas’s habitual criminal statute, Art. 63, Texas Penal Code, looks only to the fact of prior convictions: “Whoever shall have been three times convicted of a felony less than capital shall on the third conviction be imprisoned for life in the penitentiary.” See Spencer v. Texas, 385 U.S. 554, 87 S.Ct. 648, 17 L.Ed.2d 606 (1967). The judgment of the district court ordering that Gutierrez be resentenced without regard to the enhancing convictions is vacated and the cause remanded for further proceedings not inconsistent herewith. Vacated and remanded . “Finally, in each of the three areas in which we have applied our rule retrospectively so the principle that we applied “20. In Griffin v. Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891, supra, the appeal which was denied because of lack of funds was ‘an integral part of the [State’s] trial system for finally adjudicating the guilt or innocence of a defendant.’ [1 At IS.] At 18 of 351 U.S., 76 S.Ct. at 590. Precluding an appeal because of inability to pay was analogized to denying the poor a fair trial. In Gideon v. Wainwright, supra, we recognized a fundamental fact that a layman, no matter how intelligent, could not possibly further his claims of innocence and violation of previously declared rights adequately. Because of this the judgment lacked reliability. In Jackson v. Denno, supra, the holding went to the basis of fair hearing and trial because the procedural apparatus never assured the defendant a fair determination of voluntariness. In addition, Mr. Justice White expressed grave doubts regarding the ability of the jury to disregard a confession found to be involuntary if the question of guilt was uncertain.” went to the fairness of the trial — the very integrity of the fact-finding process.” 381 U.S. at 639, 85 S.Ct. at 1743. . We must be careful to distinguish Gutierrez, a situation where lack of counsel at prior sentencings infect a proceeding in which they are used for enhancement of a present sentence, from cases which directly review an infirm sentence, Martin v. United States, 182 F.2d 225 (5th Cir., 1950); Ex parte Vestal, 468 S.W.2d 372 (Tex.Cr.App., 1971), or in which a prisoner is prejudiced by the imposition of sentence under a statute other than the one defining the offense. Specht v. Patterson, 386 U.S. 605, 87 S.Ct. 1209, 18 L.Ed.2d 326 (1967).

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2024-08-24T03:29:51.129683

Bobby Jerl GARZA, Petitioner-Appellant, v. STATE OF TEXAS, Respondent-Appellee. No. 72-3169. United States Court of Appeals, Fifth Circuit. Feb. 12, 1973. Joy Vandervort, Houston, Tex. (Court Appointed), for petitioner-appellant. Crawford Martin, Atty. Gen., Austin, Tex., for respondent-appellee. Before BELL, DYER and CLARK, Circuit Judges. ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC PER CURIAM: The opinion of this court dated January 12, 1973 is withdrawn and the following opinion is adopted as the opinion of the court. Bóbby Jerl Garza appeals from the denial of habeas corpus relief by the district court of the Southern District of Texas. After holding an evidentiary hearing, the district court concluded that (1) Garza’s contention that he was illegally arrested and searched was without merit, (2) Garza voluntarily and intelligently consented to the search of a particular apartment, and (3) the state court’s charge to the jury on the definition of “possess” presented no grounds for federal habeas relief. We affirm the decision of the trial court on these points. Garza additionally argues that he is entitled to credit toward the service of his sentence for the time he spent in actual custody prior to the imposition of his sentence, a period of some eight months. At the evidentiary hearing below he testified that the state trial judge allowed him credit for the time spent in presen-tence custody under the Texas statute vesting such discretion in the sentencing judge, but that he was not aware of anything on the record to verify this fact. Finally, Garza alleges that there was an error in the calculation of his jail time pending appeal of approximately three months. Garza’s contentions as to pre and postsentence jail time credit are both presently based on the assertion of constitutional issues. Nevertheless, under the circumstances present here each of them must be presented to the Texas courts before the federal judiciary may intervene. Petitioner argues that recourse to the Texas courts will be futile as to his constitutional claim for presentence jail time credit, but we do not reach this issue because he must exhaust his claim that the state trial judge actually gave him credit for his preconviction jail time and that it has been denied to him due to clerical error, a contention which could wholly obviate the need for a constitutional decision. Likewise, the fact that Garza has not sought available relief in the appropriate state forum for correction of the alleged error in the calculation of his postsentencing jail time credit bars the federal habeas forum from reaching that issue. The trial judge was correct in concluding that Garza was required to exhaust his state remedies on both contentions. The order appealed from is in all respects Affirmed. . Vernon’s Ann.Tex.Code Crim.Pro. art. 42.03 (Supp.1972).

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UNITED STATES of America, Plaintiff-Appellant, v. GEORGIA POWER COMPANY et al., Defendants-Appellees. Charles KING et al., Plaintiffs-Appellants, v. GEORGIA POWER COMPANY et al., Defendants-Appellees. Nos. 71-3293, 71-3447. United States Court of Appeals, Fifth Circuit. Feb. 14, 1973. As Amended on Denial of Rehearing March 16, 1973. See also, D.C., 50 F.R.D. 134. John W. Stokes, Jr., U. S. Atty., Atlanta, Ga., John N. Mitchell, Atty. Gen., Stephen Glassman, David L. Rose, Attys., Jerris Leonard, Asst. Atty. Gen., Civil Rights Div., Dept, of Justice, Washington, D. C., for plaintiff-appellant United States. Elizabeth R. Rindskopf, Howard Moore, Jr., Isabel Gates Webster, Atlanta, Ga., Jack Greenberg, William L. Robinson, Morris J. Bailer, New York City, John H. Ruffin, Jr., Augusta, Ga., for plaintiffs-appellants Charles King and others. Fred W. Elarbee, Jr., Robert L. Mitchell, J. Lewis Sapp, Atlanta, Ga., for defendants-appellees Georgia Power Co. and others. Matthew Perry, NAACP, Columbia, S. C., Daniel Steiner, Gen. Counsel, Lutz Alexander Prager, E.E.O.C., Washington, D. C., for other interested parties. David Blasband, Frederick F. Green-man, Jr., New York City, for amicus curiae, The Psychological Corp. James D. Hutchinson, Ronald S. Cooper, Washington, D. C., for amicus curiae, American Psychological Association. Before TUTTLE, COLEMAN and CLARK, Circuit Judges. TUTTLE, Circuit Judge: This complex and multi-faceted employment discrimination case encompasses virtually every aspect of Georgia Power Company’s hiring and promotion practices since July 2, 1965, the effective date of the Civil Rights Act of 1964. A “pattern or practice” suit and two private class actions, all brought under Title VII of the Act, were consolidated for trial below. Though the district court afforded some relief and recognized that many of the company’s practices were prohibited under the Act, it is argued on appeal that the court’s order did not go far enough. Plaintiffs appeal from (1) refusal to enjoin the company from administering employment aptitude tests which exclude blacks from promotion at a higher rate than whites, (2) denial of back pay to discrim-inatees, (3) inadequate remedies to compensate for hiring and recruitment policies favoring whites, (4) failure to award company seniority to all black discriminatees under the “rightful place” theory, and (5) granting insufficient attorney’s fees to the lawyers in the private action. The company cross-appeals the court’s order to discontinue the prerequisite of a high school education for all positions other than laborer. Georgia Power, a company incorporated under the laws of the State of Georgia, engages in the production, transmission, distribution, and sale of electrical power. As of December 25, 1970, only 543 of the company’s 7515 employees were black (7.2%) despite the existence of a large pool of black applicants for positions. Until July 29, 1963, an open and unvarying policy of the company prevented black persons from competing for any but the most menial and low-paying jobs within the corporate structure. While blacks were classified exclusively as janitors, porters, maids, and laborers, almost all white employees occupied higher positions. Though the formal prohibition of black advancement and transfer to traditionally white jobs was terminated in 1963, little statistical difference in job placements of blacks had occurred by January 10, 1969, when the Attorney General filed' suit against Georgia Power. All ninety-five blacks hired during this period were initially assigned to the position of laborer, while 85% of the 627 whites hired in the steam plants, the general repair shop, and in the Atlanta and Macon Operating Divisions were assigned to entry-level jobs higher than laborer. Though whites hired as laborers have remained in that job an average of only three months and one week before promotion to higher paying jobs, blacks have remained laborers an average of two years and nine months before being promoted. While only one white hired during this period had not been promoted at the time of trial, only thirteen of the black laborers had been promoted. Wholly aside from individual discriminatory practices, Georgia Power has adhered to two company-wide policies which have had the effect of barring more blacks than whites from employment with, and advancement within, the company. Beginning in 1960, all new employees were required to have high school diplomas or present evidence of equivalent educational accomplishment. From August 19, 1963 to date, all new employees have in addition been required to pass a battery of tests developed by the Psychological Corporation (a commercial organization not to be confused with the American Psychological Association). Employees hired prior to the effective dates of each of these policies were allowed to remain with the company without complying with them. However, in 1964, the com-, pany did impose the high school education requirement on all incumbent employees seeking to transfer from the previously all-black positions of janitor, porter, and maid but did not add that prerequisite to transfers or advancements elsewhere in the company’s structure. Finally, on November 19, 1964, the educational and testing requirements were suspended for hirees into the laborer classification upon agreement by them not to progress further in the company without meeting them. THE TESTING REQUIREMENT 1. Legislation — Griggs In Title VII of the Civil Rights Act of 1964 Congress expressly recognized testing as a permissible prerequisite to employment in this language: [N]or shall it be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin. (Emphasis supplied.) Section 703(h). [42 U.S.C.A. § 2000e-2(h)] In Griggs v. Duke Power Company, 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), the Supreme Court held that the proviso of this section means that no test used for hiring or promotion is valid if it “operates to exclude Negroes [and] cannot be shown to be related to job performance.” 401 U.S. at 431, 91 S.Ct. at 853. Reversing the Court of Appeals for the Fourth Circuit, the Court decided that a test which excludes proportionately more blacks than whites from employment or advancement may be prohibited under the Act despite a lack of any discriminatory intent on the part of those developing and using the tests and in spite of professional origins of the test. Whereas in Griggs the company made no effort to prove that its tests were related to job performance, the appellee here introduced a mass of statistical data (the Hite Study) by which it sought to prove “a demonstrable relationship between test scores and job performance.” (emphasis added) On this appeal, we must resolve the question left unanswered by Griggs: what comprises an adequate demonstration that a company’s testing program satisfies the proviso of § 2000e-2(h), as interpreted by Griggs'! Though employers need not give preference to victims of discrimination over other job applicants, practices “fair in form, but discriminatory in operation” are proscribed. 401 U.S. at 431, 91 S.Ct. at 853. When a series of tests operates to exclude more blacks than whites from employment, the burden is upon the employer to prove the business necessity of the tests. If “. the jobs in question formerly had been filled only by white employees as part of a longstanding practice of giving preference to whites . . and the test operates . . to disqualify Negroes at a substantially higher rate than white applicants,” 401 U.S. at 426, 91 S.Ct. at 851, then the company’s proof must make manifest a relationship between the test and the job for which its passage is prerequisite. 2. Test Evaluation a. General Background. At Georgia Power, tests were first used as a device for screening job applicants on August 19, 1963, less than one month after the discontinuation of formal job segregation. The tests were initiated without any prior study of their ability to predict likelihood of successful job performance, and the first formal attempt to validate them came shortly after the Attorney General’s filing of this suit. Georgia Power acknowledged its Griggs burden to validate the tests it had used with such racially discriminatory results and attempted to carry that burden with expert opinion evidence. This took the form of a post-testing study made by Dr. Loren Hite which concluded that, after each of the tests had been properly weighted for the jobs involved, the resulting scores bore a positive relationship to job performance ratings by supervisors. The major issue in this appeal is whether this proof met the standard articulated in Griggs. At the outset of our decisional analysis we would note that testing is a relative concept. For Title VII purposes, a test is not valid or invalid per se, but must be evaluated in the setting in which it is used. As the Griggs Court said, “any tests used must measure the person for the job and not the person in the abstract.” 401 U.S. at 436, 91 S.Ct. at 856. A test or other selection device may be shown to be “job-related” under Griggs only if the employer can demonstrate or manifest that the test reliably predicts which applicants possess the reasonably necessary job skills and traits. The most accurate way to validate an employment test is to administer the test to be validated to all applicants but proceed to select new employees without regard for their test achievement, and then, after an appropriate period of work experience, compare job performance with test scores. Bernhardt, Griggs v. Duke Power Co.: the Implications for Private and Public Employers, 50 Tex.L.Rev. 901 at 904. An alternative is “concurrent validation”, a process in which a representative sample of current employees is rated, then tested, and their scores are compared to their job ratings. In this case, Georgia Power’s expert chose to conduct a validation study roughly following the second route. Dr. Hite requested evaluations by supervisors' of employees who had earlier been hired on the basis of the tests to be validated, then he compared their test scores to their job ratings. He utilized a statistical validation procedure called the “discriminant function” method to determine whether or not the tests given predicted job success. While admitting that the relatively small numbers of people involved and the fact that the study group excluded the 40% of the applicants who failed the test created problems for him, Dr. Hite still was able to form the opinion that his validation analysis “did a pretty good job” of demonstrating a “positive relationship between job performance and test scores.” He therefore concluded that, for the most part, the tests were valid indicators of job performance. However, on cross-examination, Dr. Hite admitted that using American Psychological Association standards, as suggested by EEOC guidelines, and the commonly used “correlation analysis” method for validation, only one job classification was validly test-related, and twelve were definitely not valid. Since Dr. Hite’s study and his testimony were the only specific proof offered to uphold Georgia Power’s tests, the district court necessarily based its validation findings on this evidence alone. The entire appellate testing attack focuses upon Dr. Hite’s approaches and conclusions. Our evaluation of the evidentiary value of this study must begin with this guidance from Griggs: The Equal Employment Opportunity Commission, having enforcement responsibility, has issued guidelines interpreting § 703(h) to permit only the use of job-related tests. The administrative interpretation of the Act by the enforcing agency is entitled to great deference. See, e. g., United States v. City of Chicago, 400 U.S. 8, 91 S.Ct. 18, 27 L.Ed.2d 9 (1970); Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965); Power Reactor Development Co. v. Electricians, 367 U.S. 396, 81 S.Ct. 1529, 6 L.Ed.2d 924 (1961). Since the Act and its legislative history support the Commission’s construction, this affords good reason to treat the guidelines as expressing the will of Congress. [Footnote 9 refers both to the 1966 guidelines and to the “new guidelines” —29 C.F.R. Part 1607, 35 Fed.Reg. 12333 (Aug. 1, 1970)] This requirement to treat the guidelines as expressing Congressional intent obviously was intended as an answer to the question at issue in Griggs —When can tests, which are shown to have discriminatory results, be used? We view the reference by the Griggs court to EEOC guidelines as an adjunct to the ultimate conclusion that such tests must be demonstrated to be job related. We do not read Griggs as requiring compliance by every employer with each technical form of validation procedure set out in 29 C.F.R., Part 1607. Nevertheless, these guidelines undeniably provide a valid framework for determining whether a validation study manifests that a particular test predicts reasonable job suitability. Their guidance value is such that we hold they should be followed absent a showing that some cogent reason exists for noncompliance. b. Differential Validity. The minimum standards recommended for validation strategy by EEOC guidelines [35 C.F.R. § 1607.5(b)] provide: (5) Differential validity. Data must be generated and results separately reported for minority and nonminority groups wherever technically feasible. Where a minority group is sufficiently large to constitute an identifiable factor in the local labor market, but validation data have not been developed and presented separately for that group, evidence of satisfactory validity based on other groups will be regarded as only provisional compliance with these guidelines pending separate validation of the test for the minority group in question. Perhaps the most absolute bar to the action of the court below in accepting the work done by Dr. Hite as a final validation, particularly in view of our holding in United States v. Jacksonville Terminal Co., 451 F.2d 418 (5th Cir. 1971), is the absence of any attempt to show that the tests did not screen out blacks as blacks. This minimum is designed to safeguard the key guarantee which the guidelines and the Act intend to assure — that the benefit of employment is not denied to blacks by the apparent neutrality of a facially objective ability test. Jacksonville Terminal commits this circuit to this salient principle of test validation: “Accepting arguendo that whites scoring high on the test perform satisfactorily in Group 1 positions [the best jobs], to conclude that therefore blacks scoring low could not adequately perform the same jobs as a non sequitur . . . Griggs demands more substantial proof, most often positive empirical evidence, of the relationship between test scores and job performance [by blacks].” 451 F.2d at 456. Although the significance of the concept of differential validity, viewed scientifically, is the subject of a considerable amount of professional debate, the possible fair employment implications are so great as to require separate racial group validation of tests in a case such as we have here in which there exists an available minority race sample of adequate size to conduct such a study. “Certainly the safest validation method is that which conforms with the EEOC Guidelines . . . .’’Id. This minimum guideline contains the very practical condition that tests may be found in provisional compliance and continued in use where differential validation is not technically feasible. To be entitled to continue a test in use pending final validation, the guide requires that an employer must show that the available professional literature substantially indicates validity and that he has in progress validation procedures which are designed to produce the additional data required as soon as it is reasonably feasible to do so. The guidelines also anticipate that “the employer may have to alter or suspend test cut-off scores so that score ranges broad enough to permit the identification of criterion-related validity will be obtained.” [29 C.F.R. § 1607.9] There was no evidence in this record that Georgia Power had ever attempted to satisfy these provisions. With an applicant population which is one-third black, no plausible reason now appears which would indicate that differential validation could not at least be tried by Georgia Power. c. The 95% Guideline. The one aspect of the EEOC guidelines which most troubled the district court was the requirement of demonstrating a 95% statistical significance to the test [29 C.F.R. & 1607.5(c)]. This guideline requires it be shown that there was no more than 1 chance out of 20 that job relatedness appeared by coincidence. The Hite Study showed varying levels of statistical significance. In the case of six jobs (apprentice mechanics, appliance servicemen, storekeepers, meter-men, helpers, meter readers), it was approximately as likely that the results were arrived at purely by chance as that they were more scientifically validated. A statistical confidence of 95% was achieved for only two jobs under the Hite Study, and for one of those jobs (garage mechanics), the tests were rejected by the company for other reasons. Were the only criticism of the validation procedures the fact that there was a significance factor of 1 out of 15 or even 1 out of 10 instead of 1 out of 20, the employer might have better standing to complain that the guideline is arbitrary. We agree with the lower court that this, as well as other guidelines, must not be interpreted or applied so rigidly as to cease functioning as a guide and become an absolute mandate or proscription. Thus, Section 1607.-5(c) must be read as setting a desirable goal and not a prerequisite. Conversely, the pure common sense of this guideline cannot be ignored. Analysis of . the Hite Study did not develop just a slight discrepancy from the guideline goal. Rather, there were differences so great as to create a clear inference Dr. Hite’s self-described artful “guess” at validation was the product of chance, not science. d. Adequate Sample. The first minimum standard of Section 1607.5(b) states: (1) Where a validity study is conducted in which tests are administered to applicants, with criterion data collected later, the sample of subjects must be representative of the normal or typical candidate group for the job or jobs in question. This further assumes that the applicant sample is representative of the minority population available for the job or jobs in question in the local labor market. . . If it is not technically feasible to include minority employees in validation studies conducted on the present work force, the conduct of a validation study without minority candidates does not relieve any person of his subsequent obligation for validation when inclusion of minority candidates becomes technically feasible. In his testimony Dr. Hite complained of the lack of a representative sample of applicants in the data with which he worked. Completely aside from the virtual absence of blacks in the sample, he noted that the absence of any evaluation of those who failed the tests caused statistical difficulties because he was cut back to the use of distributions which had about one-half the range of test manual norms. The lower 40% of the predicted bell-shaped curve of applicants (which lower range included the majority of the blacks tested) was never evaluated. Rather than attempting to supply this deficiency through ad hoc evaluation of probationary employees or the use of validity studies from other organizations with comparable jobs, as permitted by § 1606.7, Dr. Hite proceeded, as he described it, to “work under a tremendous handicap to get a significant correlation” despite the loss of the group he thought would give the mathematics of his correlation attempt a great boost. e. Test Conditions. Again referring to the minimum standards of Section 1607.5(b), we find: (2) Tests must be administered and scored under controlled and standardized conditions, with proper safeguards to protect the security of test scores and to insure that scores do not enter into any judgments of employee adequacy that are to be used as criterion measures. While the district court was able to conclude that testing of new applicants had been conducted under a uniform policy, it found that the testing of existing employees (including the bulk of i^he blacks involved) had not been uniform. Although the court found no racial discrimination in these testing procedural variances, it did conclude that a company-wide retesting had to be mandated. The Hite Study proceeded only on the data already in hand, which falls short of minimum (2), as well as being less than the court felt necessary to correct faulty conditions. f. Irrelevance of the Hite Study. Even without regard to the guidelines, the Hite Study was not a proper way of determining whether these tests predicted job success because it did not validate the actual testing as used by the company. Comparing the Hite validation study to the actual testing procedures of the company is like comparing apples to oranges. Rather than accepting the real Georgia Power procedures as his premises, Dr. Hite used a variation of a theoretical testing scheme under which the best total scorer would be hired. Instead of evaluating each three-test battery in terms of the cut-off score method used by the company, he multiplied each separate test score by some real number, either positive or negative, then he added these “adjusted” scores together to get a test evaluation figure. For example, he computed the total scores for storekeepers by adding 2.1614 times the numerical test score, 1.1090 times the mechanical test score, and minus .11468 times the verbal score. Using these multiples, a score of 80-80-80 on the numerical mechanical, and verbal tests would be lower than a 90-80-60 score, though the straight point totals would be 240 on the first battery and 230 on the second. The reason for the difference between the Hite result and the straight total, of course, is that Hite in effect gave double credit for numerical test scores and deducted points for high scoring on the verbal test. There is nothing abstractly “wrong” about calculating a composite score by assigning different weights to the various tests in order to stress particular job qualifications. These weightings reflect the very reasonable probability that a shop-keeper needs to be better at adding figures than at parsing sentences. The point is that, while it would not necessarily be inappropriate to use the composite score technique as a tool for employee selection, it cannot be proper to use that as a basis for validating the requirement that an applicant or employee pass each of a battery of tests. In this case Dr. Hite’s weightings bear no relation to the actual test scoring procedures at Georgia Power. For example, had the company used the straight “highest scorer” formula, it would have chosen the 240 score over the 230 score and saddled itself with an employee Dr. Hite thought less likely to perform well as a storekeeper. In actual practice, Georgia Power followed neither the adjusted total nor the straight total method: it took no composite score at all, but required a pre-set passing score on each test by any applicant before he would be considered for employment. The following colloquy which took place on Dr. Hite’s cross-examination tellingly illustrates this point: Q. Would it be safe, then, to say that the Company’s method was less valid for determining anything [about job performance] than your method ? A. I don’t know that. I would guess so; I don't know that. I made no study on the Company’s method whatsoever. It is apparent that absolutely no relationship was demonstrated between successful job performance and the ability to achieve the Company-established cutoff score on each test in the battery. In sum, the Hite Study validation is so wholly irrelevant to Georgia Power’s actual test scoring techniques that it simply cannot demonstrate any business necessity for a testing program having the racially discriminatory effect of this one. g. Conclusion. Not only was the Hite Study, as conducted, substantially at variance with the mínimums of the EEOC validation guidelines recommended by Griggs, but, as significantly, its premises also departed from the practices followed by the company in the testing program as administered. For these reasons the study’s final induction —a positive correlation of test results vis-a-vis job performance at Georgia Power — was invalid. We conclude that the district court erred as a matter of law in relying on the Hite Study to find that Georgia Power had met the burden of manifesting its tests were job related. However, testing is an expressly approved employment practice under Title VII. It is an effective tool for employee selection “provided . . . it is not used to discriminate because of race .” Moreover, standards for testing validity comprise a new and complicated area of the law. While the Hite Study did not demonstrate compliance with the Act, we hesitate to penalize this litigant, the first to confront such a demanding burden of proof, for failing to introduce a more rigorous study. Had our standards been articulated at the time of trial, it may be that the company could have proven its compliance. Therefore, rather than now proscribing the testing program which Georgia Power has used, we remand this phase of the ease to the trial court with directions to permit the company a reasonably prompt opportunity to validate the testing program applied to the plaintiffs, in accordance with the principles enunciated in this opinion. THE HIGH SCHOOL DIPLOMA REQUIREMENT Since we find that the company made no substantial showing that possession of a high school diploma is a business necessity at Georgia Power, we affirm the aspect of the district court’s decision which strikes down the diploma requirement. As the Supreme Court noted in Griggs: History is filled with examples of men and women who rendered highly effective performance without the conventional badges of accomplishment in terms of certificates, diplomas, or degrees. Diplomas and tests are useful servants, but Congress has mandated the commonsense proposition that they are not to become masters of reality. [401 U.S. at 433, 91 S.Ct. at 854.] There, the court explicitly held that the use of a high school requirement which has a disproportionate racial impact and has not been proven to be a predictor of ultimate job success controverts the congressional mandate of Title VII. As with Georgia Power’s testing program, supra, the issue here is whether or not the company has made a sufficient showing to manifest a relationship between its educational requirement and its job characteristics. The requirement undoubtedly screens out blacks at a considerably higher rate than whites, because in the 25-44 age group in the South, 64.7% of white males, 35% of black males, 63% of white females, and 34.7% of black females have completed high school. In the Atlanta area, statistics show that for males over 18 years of age, 70.7% of the whites had finished high school compared with only 46.2% of the blacks. The justification offered at trial for the requirement was very weak. As the district court observed: At best, the only justification for this requirement is the obvious eventual need for above-average ability to read and comprehend the increasingly technical maintenance manuals, the training bulletins, operating instructions, forms and the like demanded by the sophisticated industry .... In such a context, the high school education requirement cannot be said to be reasonably related to job performance. This is not to say that such requirements are not desirable ... it simply means that the “diploma test” cannot be used to measure the qualities. Many high school courses needed for a diploma (history, literature, physical education, etc.) are not necessary for these abilities. A new reading and comprehension test . . . might legitimately be used for this job need. Many employees without high school diplomas have mastered the technical literature and many of the highest-ranking personnel in the company did not pass the “diploma test”, including 47 of 100 foremen, supervisors, and chief division operators in the Atlanta and Macon operating division. Such a large percentage of current employees have succeeded at Georgia Power without a diploma that it simply cannot be “irrelevant”, as the company urges, that some employees have successfully performed without possessing diplomas. The rest of the data presented by the company is equally inconclusive. The proof that non-high school graduates have recently obtained fewer promotions than graduates is a non sequitur in light of the company’s requirement of the paper qualification as a prerequisite for promotion out of laborer positions even for pre-1960 employees and in view of the fact that many of the older (pre-1960) employees not holding diplomas were already at the top of their lines of progression by 1960. Therefore, the court appropriately held that Georgia Power had not demonstrated a business necessity for requiring the diploma. BACK PAY 1. Statutory Right Although the district court awarded back pay to black employees who were named plaintiffs in two private suits consolidated with the Attorney General’s pattern or practice suit, it held that back pay could not be awarded to the non-named members of the class in the private actions and that under no circumstances would the Attorney General be empowered under Section 707(a) [42 U.S.C. § 2000e-6(a)] to sue for back pay on behalf of discriminatees. The major legal premise upon which the court based its refusal to consider back pay in the Attorney General’s action was the difference between the wording of Section 706(g) [42' U.S.C. § 2000e-5(g)], authorizing private actions, which provides that: “the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include reinstatement or hiring of employees, with or without back pay . . .” (emphasis added); and Section 707(a), relating to actions by the Attorney General, which provides that he: “may bring a civil action . . . requesting such relief, including an application for a permanent or temporary injunction, restraining order or other order against the person or persons responsible for such pattern or practice, as he deems necessary to ensure the full enjoyment of the rights herein described.” The rationale was that since the private actions section explicitly provides for back pay and the Attorney General suit section makes no such mention of this remedy, Congress, by implication, meant to deny a court the right to award back pay in a pattern or practice suit by the Attorney General. The court “moreover” held that the grant of back pay relief would constitute a bypass of Act-mandated EEOC processes for investigation and conciliation. It also cited the lack of record proof needed to consider and apply the appropriate statute of limitations and to determine the existence of job openings and the qualification of claimants. Primarily because of its view of the law the district court concluded “that such relief is not authorized and, in the discretion of the court, certainly not demanded.” The only relief granted as to this phase of the litigation was to confer preferential opportunities for [future] employment. Because we find that Congress did not intend to preclude such relief, because precedent in this circuit has contemplated the possibility of back pay relief under this section, and because of the importance such relief may have in effectuating the policies upon which Title VII is based, we reverse and remand for further consideration of this issue. The legislative history of the Civil Rights Act of 1964 and Congress’ recent additions to that legislation in the Equal Employment Opportunity Act of 1972 indicate that back-pay relief in a pattern or practice suit was not intended to be precluded by Congress. The legislation which became the Civil Rights Act of 1964 originated in the House of Representatives as H.R. 7152. When this bill was taken up by the Senate, the leadership of both parties agreed to an amendment in the nature of a substitute to circumvent the filibuster on H.R. 7152. This substitute bill ultimately became the Act, but since it was never considered in committee, its legislative history donsists only of the debate on the floor. Section 707(b) of H.R. 7152 had authorized the EEOC to bring civil actions Where it found reasonable cause to believe an unlawful employment practice had occurred or was occurring, and Section 707(e), the enforcement provision for both EEOC suits and private actions, provided: If the court finds that the respondent has engaged in or is engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practices, and shall order the respondent to take such affirmative action, including reinstatement or hiring of employees, with or without back pay ... as may be appropriate, (emphasis added) The Dirksen-Mansfield substitute removed any independent power of the EEOC to file suit, but in lieu of this remedy gave the Attorney General the authority to bring lawsuits where he believed there was a “pattern or practice” of employment discrimination. The substitute for the original House Bill was not seen by either proponents or opponents as providing any less eom-prehensive relief in “pattern or practice” suits. “Such relief . . . as he (the Attorney General) deems necessary to ensure the full enjoyment of the rights herein described” contemplated no less than what was explicitly provided for in H.R. 7152. Senator Clark, who along with Senator Case was the floor manager for Title VII, saw as a “net gain” the fact that the substitute empowered the Attorney General to enforce fair employment practices. It is unlikely that he would have responded so favorably to the substitute had he thought the remedies available to the Attorney General less adequate than those formerly available to the EEOC. Senator Holland, an opponent of the Bill, noted that the substitute merely removed the authority to file suit from the EEOC and gave it to the Attorney General. More recently, Congress has endorsed this view of the remedies available under Section 707(a). Under the amended Section 706 of the 1972 Act, both the Attorney General and the EEOC are empowered to bring civil actions on behalf of discriminatees and the classes they represent. Section 706(g) expressly empowers the courts to award back pay, and the new Sections 707(e) and (e) give the EEOC and the Attorney General concurrent power for the next two years to bring “pattern or practice” suits. We think it incongruous that Congress would have thought it appropriate to give the EEOC and the Attorney General authority to sue for back pay under Section 706 but not in cases involving the more serious Section 707 problems. While back pay in “pattern or practice” situations does not appear to be a frequently litigated issue in the federal courts, there is precedent in this circuit which requires that we reverse this part of the judgment. In United States v. Hayes International Corp., 456 F.2d 112 (5th Cir. 1972), a suit by the Attorney General under Section 707, this court, reversing on other grounds, said: The back pay issue was not specifically raised until the post-trial stage of the litigation. The district court accordingly refused to entertain it. We think that the broad aims of Title VII require that this issue be developed and determined. It should be fully considered on remand. Fed.R.Civ.P. 15(a); see Rosen v. Public Service Electric and Gas Co., 3 Cir. 1969, 409 F.2d 775, 780 n. 20. [456 F.2d at 121] Though the court in Hayes did not expressly state that back pay is authorized, it would not have remanded the case for consideration of that claim had it believed that as a matter of law the courts have no jurisdiction to award back pay. What the remand order contemplated was full development of the extent of damages among diseriminatees on whose behalf the Attorney General was seeking relief. It was implied that, as a matter of principle and Congressional intent, such relief was appropriate. 2. Equitable Discretion Title VII was enacted with the legislative objective of disestablishing the racial and sexual caste systems which had remained ingrained in the American economy since slavery and coverture. The Act, in authorizing courts to grant equitable relief to those who might be injured by its breach, expressly and impliedly includes the discretion to award back pay. Given this court’s holding that “[a]n inextricable part of the restoration to prior [or lawful] status is the payment of back wages properly owing to the plaintiffs”, Harkless v. Sweeny Independent School District, 427 F.2d 319, 324 (5th Cir. 1971), it becomes apparent that this form of relief may not properly be viewed as a mere adjunct of some more basic equity. It is properly viewed as an integral part of the whole of relief which seeks, not to punish the respondent but to compensate the victim of discrimination. See NLRB v. J. H. Rutter-Rex Mfg. Co., 396 U.S. 258, 90 S.Ct. 417, 24 L.Ed.2d 405 (1969); Oil, Chemical and Atomic Workers Inc. Union v. NLRB, Part III, 144 U.S.App.D.C. 167, 445 F.2d 237 (1971). Cf. Social Security Board v. Nierotko, 327 U.S. 358, 66 S.Ct. 637, 90 L.Ed. 718 (1946). In LeBlanc v. Southern Bell Telephone & Telegraph Co., 460 F.2d 1228 (5th Cir. 1972), this court held that Title VII confers the discretion to award back pay upon the district court. The order appealed from here states that such discretion was exercised in favor of denying such awards in the case at bar except to certain of the named individual plaintiffs. However, since it is apparent that such discretion was exercised in whole or substantial part upon a view of the underlying law which we have determined to be erroneous, this court will vacate the resulting decree and remand for a reconsideration of this issue under the principles enunciated. 3, Method of Determination The district court found that the proof established racially disproportionate earnings due to employment practices. But this finding alone is not a proper premise for the making of a back pay award. Equity demands that the true balance of interests be struck. In Jinks v. Mays, 464 F.2d 1223, 1226 (5th Cir. 1972) after quoting Harkless, supra,, the court put the rule thus: But, back wages are not to be automatically granted whenever a person is ordered reinstated. The wages sought must be “properly owing to the plaintiffs.” This requires positive proof that plaintiff was ordinarily entitled to the wages in question and, being without fault, would have received them in the ordinary course of things but for the inequitable conduct of the party from whom the wages are claimed. The trial court’s decision must also include a weighing of issues as to limitations and laches (discussed more fully below), factors of economic reality (¿. e., the relative expense of accurate determination of individual rights vis-a-vis the amounts involved) and, most assuredly, the physical and fiscal limitations of the court to properly grant and supervise relief. This listing is intended to be illustrative and not exhaustive. It is our intention to leave the issue altogether open for reconsideration and decision by the court below. Ancillary to the back pay issue is the question of compensatory per diem payments to black discriminatees. The company admitted that it had allowed either no or lower per diem payments to blacks called away from their home plants on Georgia Power business than it did to whites under the same circumstances, and the court enjoined such practices prospectively. To the extent that it can be proven that this discrimination withheld compensation for expenses actually incurred for meals and lodging (the basis for reimbursement to whites), the district court on remand should similarly reconsider its denials of such awards. it- Limitations Having determined that compensatory back pay may be appropriate relief in this case, sound judicial practice requires that we indicate what limitations period would govern back pay awards. The limitations period to be applied under Title VII is a question of first impression upon which the statute itself is silent. Though private complaints must be filed before the EEOC within 90 days, we cannot agree with the company that this period is the proper measure. This deadline is designed primarily to enhance the possibility of informal, out-of-court resolution of employment discrimination complaints through prompt administrative action. It is in no sense a limitation on the period for which one may receive back pay relief. Employment discrimination may as readily be a continuing course of conduct as a single event. Then too, an affected individual may not be aware of the discriminatory impact of certain employment practices until a pattern emerges as a result of the cumulation of numerous events over a substantial period of time. The remedial purposes of the Act would be frustrated were financial redress to be always limited to the 90-day period preceding the filing of a complaint. Furthermore, it would be inconsistent with the policy of Title VII if discriminatees who presented complaints about patterns or practices of discrimination to the EEOC which resulted in a Section 707 action by the Attorney General, were limited to recovery of back wages for a 90-day period while those seeking alternative relief under 42 U.S. C. § 1981 (under which the discriminatee may proceed without presenting a complaint to the EEOC) were to receive the advantages of a longer statute of limitations. Caldwell v. National Brewing Co., 443 F.2d 1044 (5th Cir. 1971); Sanders v. Dobbs Houses, Inc., 431 F.2d 1097 (5th Cir. 1970); cf. Boudreaux v. Baton Rouge Marine Contracting Co., 437 F.2d 1011 (5th Cir. 1971). At the opposite end of the time spectrum we find the EEOC and the Attorney General contending that the effective date of the Act should be the sole limitation on back pay relief. We similarly reject this dating for the recovery of back pay by individual discriminatees in pattern and practice suits under Title VII. Where the government is suing to enforce rights belonging to it, state statutes of limitation are not applicable. See e. g., United States v. Thompson, 98 U.S. 486, 488-491, 25 L.Ed. 194 (1878) and United States v. Summerlin, 310 U.S. 414, 416-417, 60 S.Ct. 1019, 84 L.Ed. 1283 (1940). However, this principle is not apropos to the present back pay claims. Insofar as the pattern or practice suit constitutes a proper legal conduit for the recovery of sums due individual citizens rather than the treasury, it is a private and not a public action. Cf. United States v. Beebe, 127 U.S. 338, 346, 8 S.Ct. 1083, 32 L.Ed. 121 (1888), and United States v. Smelser, 87 F.2d 799 (5th Cir. 1937). These personal claims are entitled to no superior status because they are here allowed to be asserted in the Attorney General’s suit as well as in the private class action. Rather than the contention of either of the parties, we follow the general rule expressed in Beard v. Stephens, a decision involving an action for damages under 28 U.S.C. § 1343: Congress has created many federal rights without prescribing a period for enforcement. In such cases the federal courts borrow the limitations period prescribed by the state where the court sits. The applicable period of limitations is that which the state itself would enforce had an action seeking similar relief been brought in a court of that state. [372 F.2d 685, 688 (5th Cir. 1967)] To accomplish this goal, “[w]e must look . . . first to federal law to determine the nature of the claim and then to state court interpretations of the state’s ‘statutory catalogue’ to see where the claim fits into the state scheme.” Id. Beard was a Section 1983 action alleging damages for the shooting of appellants by sheriff’s deputies. Since the shooting was a trespass under Alabama law, we held that the state’s 6-year limitation period for trespasses applied. O’Sullivan v. Felix, 233 U.S. 318, 34 S.Ct. 596, 58 L.Ed. 980 (1914); Sewell v. Grand Lodge of Int. Ass’n of Machinists and Aerospace Workers, 445 F.2d 545, 548-550 (5th Cir. 1971), cert. denied 404 U.S. 1024, 92 S.Ct. 674, 30 L.Ed.2d 674 (1972); Franklin v. City of Marks, 439 F.2d 665 (5th Cir. 1971); Annot., 98 A.L.R.2d 1160 (1964). Where a federal statute creates rights for which both equitable redress and monetary damages may be appropriate, the analogous state statute of limitations governs the recovery of damages. Blair v. Page Aircraft Maintenance Inc., 467 F.2d 815 (5th Cir. 1972); McNair v. Burt, 68 F.2d 814 (5th Cir. 1934). Additionally, as is true with regard to wholly equitable actions, the doctrine of laches is applicable to such monetary awards. Cf. Boudreaux v. Baton Rouge Marine Contracting Co., supra, 437 F.2d at 1017. The court below cited two Georgia statutes which it deemed relevant to the determination of the appropriate limitations period — Ga.Code § 3-704 (relating to actions for rights accruing under statutes), and § 3-706 (relating to actions on implied contracts). The right to be free from discriminatory practices in employment is not analogous to the right of action on implied or unwritten contracts which are governed by the 4-year limitation period of Section 3-706. Indeed, it is the failure to contract for employment or promotion on an equal basis which gives rise to a Title VII action. Title VII and similar statutes created new causes of action which did not exist at common law or under state statutes. In respect to those causes of action which have no close analogies in state law, civil rights statutes have generally been held governed by the limitation on liabilities created by statute. Note, Federal Statutes Without Limitations Provisions, 53 Columbia L.Rev. 68, 69 (1953). See Smith v. Cremins, 308 F.2d 187 (9th Cir. 1962); Bomar v. Keyes, 162 F.2d 136, 140 (2d Cir. 1947), cert. denied 332 U.S. 825, 68 S.Ct. 166, 92 L.Ed. 400, reh. den. 332 U.S. 845, 68 S.Ct. 266, 92 L.Ed. 416. Cf. Franklin v. City of Marks, 439 F.2d 670 (5th Cir. 1971). However, where federal laws create rights to back pay as part of general remedial relief, courts have generally applied the appropriate state statute of limitations governing actions for unpaid wages. See Blair v. Page Aircraft, supra; Boudreaux v. Baton Rouge Marine Contracting Co., supra. We therefore determine that the limitations periods provided in Ga.Code § 3-704 should be applied in this case. Section 3-704 contains two limitations periods: in general, suits for the enforcement of rights under statutes must be brought within 20 years after the action accrues. However, the same statute provides that all such suits seeking recovery of wages, overtime, or damages accruing under statutes respecting the payment of wages are governed by a 2 year limitation period. Thus, without regard to how the 20 year provision may affect the right of the Attorney General to sue for relief from a pattern Or practice of discrimination, the right of individual diseriminatees to recover lost wages and like damages either in private class actions or the Attorney General’s action is subject to Georgia’s 2 year limitations period. Two important aspects of the limitations issue remain. First, in each case of claims for back pay and like damages the court must determine the most recent date on which the discriminatee’s cause of action accrued. For purposes of the statute of limitations, a cause of action accrues whenever an individual is directly and adversely affected by the discriminatory practices of the defendant. In individual cases this event may be the refusal to hire the discriminatee, refusal to promote on the basis of race, or dismissal from employment. The date of the last act of discrimination for purposes of the statute of limitations is a question of fact for the district court. Boudreaux v. Baton Rouge Marine Contracting, supra, 437 F.2d at 1014-1016. Second, the policy of Title VII requires that the filing of a complaint with the EEOC based on the identical patterns or practices of discrimination upon which suit is subsequently brought, operates to toll the statute of limitations as to all potential claimants who rely upon the same act of discrimination as the basis for their right. The limitation period remains tolled during such time as the processes of agency reconciliation are at work and until notification to the complainant that voluntary compliance cannot be obtained. Cf. Jenkins v. United Gas Corp., 400 F.2d 28 (5th Cir. 1968). HIRING AND RECRUITMENT POLICIES Failure or refusal to hire any individual on account of race is expressly prohibited by Section 703 of Title VII [42 U.S.C. § 2000e-2]. The private plaintiffs claim that this prohibition extends to Georgia Power’s practices of (1) word-of-mouth recruiting and (2) recruiting for skilled personnel only at all-white institutions. The district court rejected both these contentions, saying: Advertisement of existing vacancies by word-of-mouth on the part of company employees has been the best means for recruitment, and often for promotion, from time immemorial. It has been done by both blacks and whites in this company. Even if it were harmful, there is no known way to halt it. The mere fact that a company’s personnel has a majority of one race or another does not make such practice chargeable to the employer as a discriminatory act. Only if some preference were given the white referrals could the question rise to the point of decision. Nor is there any significance in the places of conducting interviews for possible management personnel. In short, the court finds no evidence substantiating a racially motivated policy of recruiting on the part of the company. Only 7.2% of the company’s labor force was shown to be black, although this race constituted a much larger percentage of the available labor force. In non-laborer jobs, this disparity is even greater. Under word-of-mouth hiring practices, friends of current employees admittedly received the first word about job openings. Since most current employees are white, word-of-mouth hiring alone would tend to isolate blacks from the “web of information” which flows around opportunities at the company. See Blumrosen, The Duty of Fair Recruitment Under the Civil Rights Act of 1964, 22 Rutgers L.Rev. 465, 477 (1968). No business necessity compels the company to continue to rely so heavily on this hiring technique. In fact, it contends it has already taken action to convey news of new openings to blacks by posting job notices on company bulletin boards which can be read by all personnel. Since 92.8% of all personnel likely to see these notices on a regular basis is white, however, this step is patently inadequate. We believe that the district court stopped its reasoning short of the considerations which would have led to full equitable relief. Word-of-mouth hiring and interviewing for recruitment only at particular scholastic institutions are practices that are neutral on their face. However, under the facts of the instant case, each operates as a “built-in-headwind” to blacks and neither is justified by business necessity. While the court was without doubt free to leave these practices available for future use, its failure to order them to be supplemented by affirmative action on the part of Georgia Power Company was clearly an abuse of discretion. At least two courts have already recognized the need to counteract the discriminatory impact of word-of-mouth hiring. The Eighth Circuit in Parham v. Southwestern Bell Telephone Co., 433 F.2d 421 (1970), refused to enjoin “apparently neutral referral-type recruitment practices” only because it found that “[t]he Company . . . has initiated substantial changes in its recruitment procedures.” Id. at 427. Where no effective alternative techniques were used to remedy the lock-in effect of similar recruitment policies, one district court proscribed the use of word-of-mouth hiring altogether. Clark v. American Marine Corp., D.C., 304 F.Supp. 603 at 606, 608. The built-in headwinds which the present Georgia Power system harbors must be offset by affirmative steps reasonably calculated to encourage black employment and to break through the currently circumscribed web of information. For example, advertisements of openings in newspapers and periodicals accessible to the black communities of Atlanta and other Georgia cities, and public notice that the company is an equal opportunity employer, are common recruiting techniques which should be considered. We again decline to usurp the prerogative of the district court to formulate the exact relief which an overall decree will require on this one facet. We hold only that the present word-of-mouth practice must either be supplemented or changed. The company’s policy of seeking skilled personnel only at white educational institutions is similarly an invidious brake on black employment opportunities for which no business necessity justification was shown. While the company obviously ought not be enjoined to recruit on all college campuses unless it chooses to do so, it also ought not be allowed to continue to restrict its recruitment programs to all — or preponderantly all — white institutions while maintaining such a racially imbalanced work force.. The district court is likewise directed to supplement or change this practice. THE SENIORITY SYSTEM Promotions and demotions at Georgia Power are based upon an employee’s job seniority in his section and seniority division. First preference in filling a job vacancy is given to the senior employee requesting such transfer, competency being sufficient, in the same job classification, section, and division where the vacancy exists. If there is no’ such request, the vacancy is filled by the promotion of the most senior employee, competency being sufficient, in the next lower classification of the section and seniority division, who requests promotion. Employees may transfer from one section to another, but may not transfer seniority gained in the former section to the new section. While seniority retained in a former section may not be used in a new section for any purpose, such retained seniority may be used in the former section as employment insurance in case of lay-off in the new section. If an employee has made a cross-section transfer and fails in his new classification, he is subject to possible discharge and cannot exercise his seniority rights to regain his former job. Until April 29, 1969, the job classifications of laborer, janitor, porter, and maid were in separate and distinct “lines of progression.” These employees (almost all of whom were black) could transfer to new sections only by giving up all seniority gained with the company. Just as the hiring and promotion practices disapproved above brought blacks into the four classifications which once were openly black jobs, the seniority system locked them into these jobs. Whether hired before or after the July 29, 1963 discontinuation of policies prohibiting black job mobility, blacks ran a greater risk than whites of losing their jobs if they wished to advance within the company. Since there were no higher jobs in the “lines of progression” into which blacks were hired, any transfer from one of the four entry-level jobs could prove lethal. The order of the district court enjoined the defendant from applying.the system of “job seniority” to decide who should be temporarily or permanently promoted, transferred, demoted, or laid off when a competing employee is in the “affected classes.” It also accorded “company seniority” rather than job seniority to certain discriminatees competing with non-diseriminatees for promotion. However, it construed the affected classes of discriminatees to consist of only (1) black employees hired prior to August 19, 1963, (2) all black employees hired prior to July 29, 1963 who had a high school education and who had passed the company’s aptitude tests, and (3) those black employees hired since August 19, 1963 who were denied job promotions or transfers for lack of a high school diploma. If the district court should determine that the company’s testing program cannot be validated, it will necessitate broadening the affected classes entitled to seniority relief. Full enjoyment of Title VII rights sometimes requires that the court remedy the present effects of past discrimination. See Louisiana v. United States, 380 U.S. 145, 154, 85 S.Ct. 817, 13 L.Ed.2d 709 (1965). This includes both redressing the continuing effects of discriminatory seniority systems, Local 189, United Paperworkers v. United States, 416 F.2d 980 (5th Cir. 1969); United States v. Jacksonville Terminal Co., supra; United States v. Hayes International Corp., supra, and affirmative action to alter a seniority system which is not discriminatory on its face. If the present seniority system in fact operates to lock in the effects of past discrimination, it is subject to judicial alteration under Title VII. Local 53, International Association of Heat and Frost Insulators and Asbestos Workers v. Vogler, 407 F.2d 1047, 1052 (5th Cir. 1969); Local 189, supra, at 991 of 416 F.2d. Most courts, in molding appropriate remedies, have adhered to the “rightful place” theory, according to which blacks are assured the first opportunity to move into the next vacancies in positions which they would have occupied but for wrongful discrimination and which they are qualified to fill. Note, Title VII, Seniority Discrimination and the Incumbent Negro, 80 Harv.L.Rev. 1260, 1268 n. 2 (1967). This is the theory which should be applied here. Should company test invalidity be the trial court’s ultimate conclusion, then seniority would thereby be extended to all blacks wrongfully deprived of the opportunity to advance beyond the positions of laborer, porter, janitor, or maid by either the testing or the high school education requirements. This relief reaffirms that “[t]he ethic which permeates the American dream is that a person may advance as far as his talents and his merit will carry him.” Miller v. International Paper Co., 408 F.2d 283, 294 (5th Cir. 1969). COUNSEL FEES The district court recognized that Section 706(k) [42 U.S.C. § 2000e-5(k)] and our decision in Clark v. American Marine Co., 320 F.Supp. 709 (E.D.La.1970), aff’d. 437 F.2d 959 (5th Cir. 1971) entitle the plaintiffs’ lawyers in a successful Title VII suit to recover reasonable attorneys’ fees. In view of our remand for further proceedings, we pretermit any additional ruling on the challenge to the action of the court on this issue at this time, although it seems appropriate to call attention to the fact that at the minimum fee rate, cited by the district court, Attorney Webster would be entitled to 360 dollars more than the amount awarded her solely for the time she spent on the case prior to trial. The judgment of the trial court is affirmed in part and vacated in part and the case is remanded to the trial court for further proceedings not inconsistent with this opinion. Affirmed in part, vacated in part, and remanded. . The Attorney General filed the pattern or practice suit under Section 707 of Title VII, 42 U.S.C. § 2000e-6, challenging the defendant’s practices statewide. Though seven local unions of the IBEW were also joined as defendants, they are not parties to the aspects of the case before us on appeal. The named plaintiffs in the class action filed pursuant to 42 U.S.C. § 2000e-5 held laborer jobs at the time of suit and had been denied advancement to higher positions as a result of various practices of the company discussed infra. . For example, 33% of the applicants of Plant Yates and Plant Harllee Branch from 1967-1969 were black and 70% of these had high school educations. Many reasons for this statistical imbalance were fully aired at trial. Blacks applying for jobs other than traditionally black jobs (janitors, porters, maids and laborers) were regularly told, even after this suit was filed, that there were no openings. When they were told no vacancies existed, blacks were often informed that they would be called if vacancies occurred. They were not called, however, and whites with no better qualifications were hired. Some blacks were told that certain jobs were filled from within when this was not the case. Others were offered only jobs well below those they were qualified to perform. In some instances, company supervisors failed to direct black applicants to hiring offices. The district court enjoined such discriminatory hiring practices and awarded relief requiring the company to hire the qualified black applicants who had been rejected into the next openings at the company. . The primary tests given were the Bennett Mechanical Comprehension Test, the PTI Yerbal and numerical tests, and the Won-derlic verbal, arithmetic, and clerical test. According to Georgia Power’s expert, two of these tests demonstrated skill in Arithmetic, two measured Vocabulary, one measured ability to compare lists of figures and one tested for understanding of the laws of physics. . The Administrative Assistant to the Company’s Industrial Relations Department Manager developed the testing program used here. He checked test results on the first year’s hirees against supervisor’s job performance ratings. As a result of this check, cut-off scores were adjusted — some up, some down. However, his testimony did not undertake to demonstrate any specific relationship between test scores and job performance. . The district court found, in general, that black persons score significantly lower than do white persons on aptitude and intelligence tests of the type used by Georgia Power Company. Specifically the court found that black applicants’ or employees’ scores on the company test battery since 1968 averaged 9 to 12 points lower than white scores, and that the failure rate for blacks was more than thirty times higher than for whites. The court also found that at least sixty-five black employees had been denied promotion since January 1, 1967 for failure to pass these tests. Of the 24 black employees who were given the Bennett Mechanical Test at Georgia Power between January 1, 1968 and March 20, 1970, 9 or 37.5% failed; whereas, of the 588 whites who were tested, 5 or 0.85% failed. Similarly, 43% of the blacks failed the PTI-Numeri-cnl Test while 1.25% of the white employees failed; also, 30% of the blacks failed the PTI-Verbal Test while 0.94% of the whites failed. . The Hite Study states that the Bennett Mechanical Test is valid for 7 of 9 job classifications, that the PTI Verbal Test is valid for 4 of 8 classifications, and that the PTI Numerical is valid for 6 of 8 classifications. The tests could not be validated by Dr. Hite with reference to the jobs of switchboard operator (the top-paying job in the bargaining unit), garage mechanic, coal equipment operator or helpers. The SET Verbal test was found not to be a valid predictor for meter readers. . This absence is closely related to the deficiency ns to minimum (1) discussed below, since, as stated, the largest portion of tlie applicant group to which the test denied employment were blacks. Bee sub-point “d. Adequate Sample.’’ . An American Psychological Association sanctioned report on this question concluded : This hypothesis, that test scores have different meanings for different subgroups, requires extensive research for confirmation or rejection; existing evidence is inadequate to determine whether aptitude tests actually discriminate unfairly because of their different validities from one subgroup to another. APA Task Force on Employment Testing of Minority Groups, Job Testing and the Disadvantaged, 24 Am.Psych. 637, 641 (1969) In addition, the APA in its amicus brief points out that the conclusion reached after an extensive six year study conducted jointly by the Educational Testing Services, Princeton, New Jersey, and the United States Civil Service Commission, was that where a differential validity study is not technically feasible, and where the tests have been chosen on the basis of a careful job analysis, a reliable relationship found for whites will usually hold true for blacks. Bee J. T. Campbell, An Investigation of Sources of Bias in Job Prediction (Educational Testing Service, Princeton, New Jersey, 1972). Bee also Developments in the Law — Title VII, Employment Discrimination, 84 Harv.L.Rev. 1109, 1129 (1971). . See 29 C.F.R. § 1607.7. . One defense raised by the company against compliance with this requirement for separate minority group validation— that “such a study was not attempted . . . because of the lack of Negroes in the samjjle group” — does not appear to be well founded. Rather, the record indicates that there are black employees already present in three of the job classifications in numbers as large as some of the all-white samples actually used in the Hite validation study. Had the company attempted separate validation in these jobs, even if such validation was not then feasible in other job categories, it could have generated at least some data which could indicate whether the tests had differential validity as to both races. . The observation of the American Psychological Association in its amicus brief is again apt: In short, the 5% level is an arbitrary convention. It has never been a part of professional standards to insist on a specific level of confidence; however, when one departs from the conventional standard, he should ordinarily have a reason which can be stated in advance of the analysis. Under some circumstances, for example, one might need a prediction so badly or have such severely restricted range of scores on prediction or criterion that he will decide to accept any finding significant at the 10% level; under other circumstances, the cost of using a test that might later prove invalid may be so great that the investigator will insist on at least a 1% level. * * :¡: * * Moreover, nothing either in professional practice or in the Guidelines suggests that a 6% level could not be accepted, at least tentatively, even where the a priori thinking anticipated requiring the 5% level. It is certainly preferable to use an employment procedure such as a test that is valid at the 6% level than to rely on an alternative approach to selection, such as an interview, which has not been validated at all. . Dr. Hite did innovate at one point by supplementing the results from 50 test-passers who worked as auxiliary equipment operators with data acquired from 09 persons who had never taken the tests. The untested were tested and, upon whole group evaluation, a 99% validation figure resulted. . Moreover, test score differences between high and low performance groups were often insignificant (e. g., for meter-readers the average SET-V score of low performers was 24.16 and for high performers 24.80). . Such a requirement also runs afoul of the EEOC guidelines on Employee Selection Procedures, -which define “test” to include “ . . . specific educational . . . requirements ...” and prohibit tests not supported by “empirical data demonstrating that the test is predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job . . . . ” 29 C.F.K.. § 1607.4(c). . In two respects, Georgia Power’s high school requirement is even more stringent than the one disapproved at Duke Power. First, the lack of a high school education was never an absolute bar to the employment of all applicants at Duke Power as it was at Georgia Power from 1960-1964. Second, since September 1965, employees at Duke Power’s Labor Department who lacked a high school education could transfer to better jobs upon passage of tests, for the high school and testing requirements were phrased in the alternative. Since 1964, the requirements for promotion at Georgia Power have been that the employee have a high school education and pass the tests. . Since we hold that the Attorney General may sue for back pay on behalf of dis-criminatees and because the pattern or practice suit encompasses all the plaintiffs, both named and unnamed, in the private suits, we find it unnecessary to discuss the issue raised by the private class action appellants as to the availability of back pay to non-named class members in § 2000e-5(g) actions. . 110 Cong.Rec. 12595. See also Senator Humphrey’s remarks at 110 Cong.Rec. 12722. . 110 Cong.Rec. 14220. . The relief provisions of Title VII were derived from a similar provision in the National Labor Relations Act, 29 U.S.C.A. § 160(c). Monetary awards by the National Labor Relations Board under this authority have been based upon net back pay, and legislative history indicates that Congress felt that the Title VII remedy should be similar. 110 Cong.Rec. 6549 (1964) ; Developments — Title VII, supra note 8, at 1259 n. 349. . Finding 86 states : Since the majority of blacks have held only laborer’s jobs and since virtually all whites have held higher paying jobs, it follows that earnings of black employees, as a class, have been considerably lower than earnings of their white contemporaries, and lower than some later hired whites. . Section 706(g) of the Equal Employment Opportunity Act of 1972 [42 U.S.C.A. § 2000e-5(g)], while irrelevant to these proceedings, does specify that “back pay” liability shall not accrue from a date more than two years prior to the filing of a charge with the Commission. . Under Title VII, we are not concerned with a federal statute creating “a federal right for which the sole remedy is in equity.” Traditionally, statutes of limitations do not control such purely equitable relief. Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S.Ct. 582, 584, 90 L.Ed. 743 (1946); Perry v. Allen, 239 F.2d 107 (5th Cir. 1956). . Section 3-704 provides : All suits for the enforcement of rights accruing to individuals under statutes, acts of incorporation, or by operation of law, shall be brought within 20 years after the right of action shall have accrued : Provided, however, that all suits . . . for the recovery of wages and overtime, subsequent to March 20, 1943, shall be brought within two years after th'e right of action shall have accrued. Section 3-706 provides: All actions . . . for the breach of any contract not under the hand of the party sought to be charged, or upon any implied assumpsit or undertaking, shall be brought within four years after the right of action shall have accrued. . There is no need to resolve the. proper classification of such a pattern or practice suit as vindicating public or private rights and hence the effect, if any, of the 20 year limitation proviso since the Attorney General cannot sue on discriminatory acts which occurred prior to the effective date of Title VII of the Civil Rights Act of 1964, July 2, 1965. Cf. Clark v. American Marine Corp., 304 F. Supp. 603, 609 (E.D.La.1969).

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2024-08-24T03:29:51.129683

L. Verdelle CLARK, Plaintiff-Appellant, v. Leslie HOLMES et al., Defendants-Appellees. No. 71-1709. United States Court of Appeals, Seventh Circuit. Argued Sept. 11, 1972. Decided Dec. 12, 1972. Certiorari Denied May 7, 1973. See 93 S.Ct. 2148. Elmer Gertz, Wayne B. Giampietro, Chicago, Ill., for plaintiff-appellant. Robert E. Cronin, John L. McCausland, Chicago, Ill., for defendants-appellees. Before SWYGERT, Chief Judge, and PELL and STEVENS, Circuit Judges. PER CURIAM. In his amended three-count complaint based upon 42 U.S.C. §§ 1983 and 1985 (3), L. Verdelle Clark sought damages for the alleged violation of his civil rights by certain teachers and officials at Northern Illinois University (NIU), a state institution of higher learning. A nontenured temporary.substitute teacher at NIU from 1962 to 1964, Clark claimed, inter alia, that the defendants had made false charges against him, the result of which was that NIU decided not to rehire him. The defendants also allegedly denied him a hearing or investigation of these charges. Clark maintained that these actions stemmed from a conspiracy among the defendants, who allegedly wished to penalize him for exercises by him of his right to freedom of speech. The trial, limited to the question of liability, was held before a jury. At the close of the plaintiff’s case, the court granted a directed verdict for the defendants on the issue of conspiracy (Count II and part of Count I). It also rejected plaintiff’s proffered instructions on the First Amendment rights of public school teachers. The jury returned verdicts for each of the defendants. After the court denied his motion for judgment notwithstanding the verdicts or for a new trial, Clark brought this appeal. In August 1962, Clark applied for and accepted a temporary position for the fall semester of 1962 as an associate professor in NIU’s Department of Biological Sciences. Clark was to substitute for the professor who usually taught a required introductory health survey course. The possibility of employment for the spring semester was left open. When the teacher for whom the plaintiff was substituting decided not to return for the spring session, Clark accepted an offer to teach that semester. In a letter dated April 30, 1963, the head of the Department of Biological Sciences offered Clark a temporary position for the following academic year, 1963-64, as a replacement for another professor. The letter also warned Clark that his acceptance of the offer should be made with the understanding that he should remedy certain deficiences in his professional conduct: he counselled an excessive number of students instead of referring them to NIU’s professional counsellors; he overemphasized sex in his health survey course; he counselled students with his office door closed; and he belittled other staff members in discussions with students. Clark subsequently discussed these criticisms with the department head and with defendant Skok, then Dean of the College of Liberal Arts and Sciences. He defended his conduct, maintaining that it was proper for a teacher to hold himself out as a personal confidant of his students and denying that he was teaching too much sex education. He stated that he had surveyed his students’ interests, had found that they wanted sex education and mental health emphasized and so had agreed to do so and only “touch on” the other topics covered by the assigned text and the course syllabus. Rejecting disapproval of his critical remarks as hypocritical, he declared that he would not stop discussing with students his complaints about the administration and other teachers and he would not confine his discussions to his office. Rather, he would “do it where I think it is effective, and if it costs me, so be it.” In May 1963, Clark formally accepted the temporary position for the 1963-64 academic year. On December 11, 1963, he received written notification that his temporary contract terminated June 8, 1964. In early February 1964, at a conference with- the department head and two senior members of the department, Clark was told that he would not be scheduled for any classes for the spring semester, 1963-64. The three men pointed out to Clark that his position was a temporary one and repeated most of the criticisms outlined in the April 30th letter. Although plaintiff’s briefs and oral argument leave us somewhat uncertain as to his contentions on this appeal, it appears that he claims the trial court erred (1) in refusing to instruct the jury respecting First Amendment rights of public school teachers; (2) in excluding testimony of a faculty member about his efforts to secure Clark a hearing; (3) in instructing the jury that Clark’s due process rights in connection with the expiration of his contract did not include the right to formal charges and hearing; and (4) in directing a verdict for the defendants on the conspiracy issue. After lengthy discussion with counsel, the trial court declined to instruct the jury to the effect that a public school teacher has a First Amendment right to teach and say anything he wishes in classes and to students as long as he does not make statements knowing them to be false or with reckless disregard of their truth or falsity. Both parties claim to find support in Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968), a major pronouncement of the First Amendment rights of public school teachers. There, the Supreme Court reversed the dismissal of a teacher who had written a letter to a local newspaper in which he, as a citizen, criticized the Board of Education’s allocation of school funds and its method of informing the district’s taxpayers about the need for additional tax revenue. The Court analyzed the First Amendment problem as' follows: “ [I]t.cannot be gainsaid that the State has interests as an employer in regulating the speech of its employees that differ significantly from those it possesses in connection with regulation of the speech of the citizenry in general. The problem in any case is to arrive at a balance between the interests of the teacher, as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.” 391 U.S. at 568, 88 S.Ct. at 1734. [Emphasis added.] Cf. Mailloux v. Kiley, 448 F.2d 1242, 1243 (1st Cir. 1971). Clark’s claim of error fails for two reasons. First, Clark construes too broadly the extent of his First Amendment rights and thus slights the interest of the State in providing its educational services according to policies it deems proper. Clark would have us drastically and radically curtail the scope of discretion which may be exercised by a state school in deciding whom it shall rehire. Second, Clark ignores the factual differences between his case and a case like Pickering. His disputes with his superiors and colleagues about course content and counselling were hot “matters of public concern” and involved Clark as a teacher rather than as an interested citizen. Compare also Perry v. Sindermann, 408 U.S. 593, 595, 598, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972); Donahue v. Staunton, 471 F.2d 475 (7th Cir. 1972)’. Further, Clark has cited no sound authority for his proposition that he had a constitutional right to override the wishes and judgment of his superiors and fellow faculty members as to the proper content of ¡the required health course and the inadsvisability of engaging in extensive personal counselling of students, two of the ¡three matters about which most of the 'defendants were particularly concerned. The same reasoning applies to Clark’s criticisms of NIU’s administration and faculty in front of students. We think the district court correctly decided that this conduct also was not protected by the First Amendment. Pickering, which guards a public school teacher’s right to speak out publicly on issues of public concern, is factually distinguishable from the present case. How-' ever, we do recognize that, although academic freedom is not one of the enumerated rights of the First Amendment, Parducci v. Rutland, 316 F.Supp. 352, 355 (M.D.Ala.1970), it is now clear that academic freedom, the preservation of the classroom as a “market place of ideas,” is one of the safeguarded rights. Healy v. James, 408 U.S. 169, 180-181, 92 S.Ct. 2338, 33 L.Ed.2d 266 (1972). But we do not conceive academic freedom to be a license for uncontrolled expression at variance with established curricular contents and internally destructive of the proper functioning of the institution. First Amendment rights must be applied in light of the special characteristics of the environment in the particular case. Tinker v. Des Moines Independent Community School District, 393 U.S. 503, 506, 89 S.Ct. 733, 21 L.Ed.2d 731 (1969); Healy, supra. The plaintiff here irresponsibly made captious remarks to a captive audience, one, moreover, that was composed of students who were dependent on him for grades and recommendations. See Ferguson v. Thomas, 430 F.2d 852, 858 (5th Cir. 1970). Furthermore, Pickering suggests that certain legitimate interests of the State may limit a teacher’s right to say what he pleases: for example, (1) the need to maintain discipline or harmony among co-workers; (2) the need for confidentiality; (3) the need to curtail conduct which impedes the teacher’s proper and competent performance of his daily duties; and (4) the need to encourage a close and personal relationship between the employee and his superiors, where that relationship calls for loyalty and confidence. Cf. Cook County Teachers Union, Loc. 1600 v. Byrd, 456 F.2d 882, 889-890 (7th Cir. 1972), cert. denied 409 U.S. 848, 93 S.Ct. 56, 34 L.Ed.2d 90; Albaum v. Carey, 310 F.Supp. 594, 596, (E.D.N.Y.1969). Thus, the trial court wisely rejected Clark’s contention that all of his actions of which the defendants complained were protected by the First Amendment. Instructions on the First Amendment rights of public school teachers were inapplicable to this ease. Further, the theory of First Amendment rights urged upon the district court by plaintiff and as presented in his tendered instructions was overly broad. There was no First Amendment issue appropriate for consideration by the jury. In regard to Clark’s due process contention, we think that two recent Supreme Court decisions resolve that issue against the plaintiff. Board of Regents of State Colleges v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), held that a nontenured teacher employed under a one-year contract offering no promise of renewal was not deprived of his Fourteenth Amendment rights of “liberty” or “property” by a state university’s failure to give him a statement of reasons for the nonrenewal of his contract and to grant him a hearing at which to challenge those reasons. The Court did note two possible exeep-tions to the rule it was enunciating; however, those exceptional circumstances are not present in Clark’s case. In a companion case to Roth, Perry v. Sinder-mann, supra, the Court held that a state college teacher, employed under a series of one-year contracts, who alleged that the college had a de facto tenure policy, was entitled to an opportunity to prove the validity of his claim to job tenure and, upon proof, to a hearing on the grounds for his nonretention. Plaintiff Clark, a temporary substitute teacher, clearly was not in an analogous position. Clark’s final complaint is that the district court' erred in directing a verdict for the defendants on the issue of conspiracy at the close of his ease. The court did not err, for, quite simply, the plaintiff failed to make out a prima facie case. He did not substantiate his charge that the defendants held many clandestine conferences about him or that the actions the defendants did take revealed any illegal purpose. Although Clark disclaims that he was raising an issue on appeal of the sufficiency of the evidence to support the jury verdict, a substantial portion of the argument addressed to us seems to be the sort that would have been appropriate if we were concerned with a de novo factual determination, which, of course, we are not. Further, it must be noted that at the time of the filing of briefs in this appeal the law of the circuit, upon which plaintiff in part relied, was found in Roth v. Board of Regents, 310 F.Supp. 972 (W.D.Wis.1970), aff’d, 446 F.2d 806 (7th Cir. 1971). The reversal of Roth (408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548) occurred subsequent to briefing but prior to oral argument. In light of the above, we conclude that no reversible error occurred and the judgment of the district court is affirmed. Affirmed. . The amended complaint named as defendants fourteen professors and administrators and ten former members of the Teachers College Board, which at the time the cause arose was the state board governing NIU. On defendants’ motions, the ten Board members and all but six of the professors and administrators were dismissed from the case. . Prior to trial, on August 24, 1970, the district court granted summary judgment for the defendants named in Count III, which charged that Clark had been blacklisted so as to prevent him from securing future employment at other universities. . The two special situations were: (1) The State, in declining to rehire a person, makes a charge against him that might seriously damage his standing and associations in his community. Such a charge might be, for example, that the employee had been guilty of dishonesty or of immorality. The purpose of notice and hearing then would be to provide the person with an opportunity to clear his name. (2) The State, in declining to re-employ a person, imposes on him a stigma or other disability that forecloses his freedom to take advantage of other employment opportunities. The Court gave the example of where the State bars the person from all other public employment in State universities. It further explained that “[m]ere proof . . . that his record of nonretention in one job, taken alone, might make him somewhat less attractive to some other employers would hardly establish the kind of foreclosure of opportunities amounting to a deprivation of ‘liberty.’ ” . Perry also held that lack of contractual or tenure right to re-employment, taken alone, does not defeat an ex-employee’s claim in federal district court that the nonrenewal of his contract was based on his exercise of his constitutional rights and was, therefore, violative of his First and Fourteenth Amendment rights. In so deciding, the Court did not make “new” law; previous cases had made this point clear. Nevertheless, plaintiff Clark mistakenly interprets this holding of Perry to mean that if a teacher claims he was not rehired for constitutionally in- ■ valid reasons, he must be given a hearing by the state school.

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FIRST AMERICAN BANK & TRUST COMPANY et al., Plaintiffs-Appellants, v. G. W. ELLWEIN, Commissioner, State Examiner and Chairman of the State Banking Board, Department of Banking and Financial Institutions of the State of North Dakota, et al., Defendants-Appellees. No. 72-1596. United States Court of Appeals, Eighth Circuit. Submitted Jan. 12, 1973. Decided Feb. 27, 1973. Frederick E. Saefke, Jr., Bismarck, N. D., for plaintiffs-appellants. Frank F. Jestrab, Bjella & Jestrab, Williston, N. D., for defendants-appel-lees. Before MATTHES, Chief Judge, BRIGHT, Circuit Judge, and TALBOT SMITH, Senior District Judge. Eastern District of Michigan, sitting by designation. PER CURIAM. First American Bank & Trust Co. (First American) instituted this action pursuant to 15 U.S.C. §§ 4, 15, and 26 (antitrust laws) seeking injunctive and other relief against the North Dakota State Banking Board to prevent the Board from holding a hearing and making findings concerning appellant’s solvency and banking practices. First American alleged that the Board could not afford the plaintiff a fair hearing because Board members are competitors of the plaintiff and because they had made statements indicating prejudgment of the case. The district court denied preliminary injunctive relief on the grounds that this was an appropriate case for abstention. The court then granted a motion for summary judgment for the defendant-Board and dismissed the action on the merits, apparently on grounds that: (1) the Sherman Act did not provide for an action against the state; (2) no jurisdictional basis had been stated for consideration of plaintiff’s claim of a denial of constitutional rights; (3) the question was moot because the Board had already heard the matter; and (4) a final judgment would conflict with the court’s abstention on the question of temporary injunctive relief. The court concluded: I could leave it to the plaintiffs to amend their pleading to recite a proper jurisdictional basis, and to enunciate a relevant prayer for relief, but it appears that the business of the Court, and the best way to approach any further problems which may develop is by dismissal of this action on its merits. On this appeal First American urges that the district court should have exercised jurisdiction under 42 U.S.C. § 1983 and 28 U.S.C. § 1343, although plaintiff failed to rely on these statutes in its complaint. First American argues that the complaint on its face alleges facts which make out a violation of its right to due process of law. As we construe the plaintiff’s briefs, the precise question sought to be presented and resolved on this appeal is whether or not the district court had jurisdiction to hear the case on its merits. For reasons stated below, we believe the case in its present posture presents an appropriate situation for abstention rather than dismissal on the merits and thus direct that the judgment dismissing the action on its merits be vacated. The brief factual background, as related in the complaint and as stipulated to at oral argument, discloses that the appellant engages in trust company business under 1 N.D.Cent.Code Ch. 6-05. In a meeting held May 26, 1972, the State Banking Board authorized the State Examiner to commence a proceeding before the Board to determine the solvency of First American and to develop other matters concerning First American’s banking practices. With this authorization, the State Examiner proceeded under the North Dakota Administrative Agencies Practice Act, 5 N.D.Cent. Code Ch. 28-32. First American asserts that due to the alleged prejudice and prejudgment of the Board, it has been denied the opportunity to present its case to a “fair and unbiased” tribunal. At oral argument, the parties stipulated that as of December 11, 1972, the State Banking Board had already heard the matter and had made a determination of insolvency and ordered a receiver appointed. The parties also stipulated that the Board’s order had been stayed by the District Court of Burleigh County pending resolution of an appeal to that court. As indicated by the stipulation, North Dakota permits appeals from administrative agencies to the state courts of general jurisdiction and then to the state supreme court. Assuming, arguendo, that the federal district court might have exercised jurisdiction on grounds that the Board under the circumstances alleged was incapable of affording appellant a fair hearing in conformity with the Due Process Clause of the Fourteenth Amendment, the circumstances presented to the district court and to us on appeal demonstrate a classic case in which federal courts should stay their hands under the doctrine of abstention. The matters presented to the federal court are now in the state courts, and their determination of the “fairness of the hearing” issue may well eliminate the need for any consideration of constitutional issues by the federal judiciary. In Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), the Supreme Court said: Although a federal equity court does have jurisdiction of a particular proceeding, it may, in its sound discretion, whether its jurisdiction is invoked on the ground of diversity of citizenship or otherwise, “refuse to enforce or protect legal rights, the exercise of which may be prejudicial to the public interest”; for it “is in the public interest that federal courts of equity should exercise their discretionary power with proper regard for the rightful independence of state governments in carrying out their domestic policy.” [Id. at 317-318, 63 S.Ct. at 1099 (footnotes omitted).] This holding was reaffirmed in Alabama Public Service Commission v. Southern Railway Co., 341 U.S. 341, 71 S.Ct. 762, 95 L.Ed. 1002 (1951) : As adequate state court review of an administrative order based upon predominantly local factors is available to appellee, intervention of a federal court is not necessary for the protection of federal rights. Equitable relief may be granted only when the District Court, in its sound discretion exercised with the “scrupulous regard for the rightful independence of state governments which should at all times actuate the federal courts,” is convinced that the asserted federal right cannot be preserved except by granting the “extraordinary relief of an injunction in the federal courts.” Considering that “[f]ew public interests have a higher claim upon the discretion of a federal chancellor than the avoidance of needless friction with state policies,” the usual rule of comity must govern the exercise of equitable jurisdiction by the District Court in this case. Whatever rights appellee may have are to be pursued through the state courts. Burford v. Sun Oil Co., 319 U.S. 315, [63 S.Ct. 1098, 87 L.Ed. 1424] (1943); Railroad Commission of Texas v. Rowan & Nichols Oil Co., 311 U.S. 570, 577, [61 S.Ct 343, 346, 85 L.Ed. 358] (1941); Railroad Commission of Texas v. Rowan & Nichols Oil Co., 310 U.S. 573, [60 S.Ct. 1021, 84 L.Ed. 1368], as amended, 311 U.S. 614, 615, [61 S.Ct. 66, 85 L.Ed. 390] (1940). [Id. at 349-350, 71 S.Ct. at 768-769 (footnotes omitted).] As already mentioned, the federal district court denied preliminary relief on grounds of abstention but the final judgment in form dismissed the action on the merits. It is obviously inappropriate to make a determination on the merits while applying the abstention doctrine. Accordingly, while approving the action of the district court, we remand this case to the district court for the purpose of modifying the judgment to reflect abstention from action rather than decision on the merits and to recite that “jurisdiction should not be exercised in this case as a matter of sound equitable discretion.” Alabama Public Service Commission, supra, at 350, 71 S.Ct. at 769. . A dispute concerning the Examiner’s authority and the application of the state’s statutes governing administrative procedure, has been previously litigated in the state supreme court in an action related to the present controversy. First American Bank & Trust Company v. Ellwein, 198 N.W.2d 84 (N.D.1972). . Tlie complaint also seeks to declare 1 N.D.Cent.Code § 6-01-03 unconstitutional. That section pertains to the composition of the State Banking Board. Appellant did not request that a three-judge court be' convened and does not press the issue of the constitutionality of the statute before this court. . 5 N.D.Cent.Code §§ 28-32-15 and 28-32-21. . At oral argument the parties conceded that the question of the competency of the Board and its right to proceed under the circumstances has been preserved in the record of the administrative hearing and can be presented to the North Dakota courts.

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UNITED STATES of America, Plaintiff-Appellee, v. Robert Loren WEAVER, Defendant-Appellant. No. 71-1598. United States Court of Appeals, Seventh Circuit. Argued Oct. 16, 1972. Decided March 2, 1973. Patrick J. Hughes, Jr., Chicago, Ill., for defendant-appellant. James R. Thompson, U. S. Atty., Theodore T. Scudder, William T. Huyck, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee. Before SWYGERT, Chief Judge, ENOCH, Senior Circuit Judge, and FAIRCHILD, Circuit Judge. SWYGERT, Chief Judge. Robert Loren Weaver, defendant-appellant, was convicted on an indictment charging his willful refusal to report for induction into the Armed Services in violation of 50 App. U.S.C. § 462. On appeal, Weaver urges that his conviction be reversed because his local board failed to state reasons for its rejection of his claim of conscientious objection. We must also decide whether this issue is foreclosed by Weaver’s failure to exhaust administrative remedies. The events leading to the instant conviction began on October 14, 1969, when Weaver was classified I-A by his local board. He responded by letter within thirty days of this action, requesting a personal appearance before the board and an appeal to the State Appeal Board in the event that his personal appearance failed to result in a change of his classification. In his letter, Weaver expressed a belief that his classification should properly have been as a conscientious objector. On November 18, 1969 the board answered by a form letter which notified Weaver of a personal appearance before it on December 9, 1969. Weaver appeared as scheduled and reiterated his request for conscientious objector status. The board refused to hear evidence on this claim, however, since Weaver had not submitted to it a completed Selective Service System Form 150 for conscientious objection. It informed Weaver that a completed Form 150 was a necessary prerequisite to its consideration of a claim for conscientious objection and terminated the interview. Weaver thereafter wrote the board, withdrawing his appeal and requesting a Form 150. The board complied, but Weaver found himself unable to complete the form, which was replete with references to “religious training and belief.” He returned the form in blank, together with a letter explaining this circumstance: “I find the enclosed SSS Form 150 totally inadequate to reflect the unorthodox nature of my conscientious objection.” The letter went on to detail the exact nature of these “unorthodox” beliefs. The board’s response, on February 20, 1970, was to send Weaver a Selective Service Form 110 reaffirming his classification as I-A. No reasons were given for rejection of his conscientious objector claim. Weaver filed no answer to this notice and subsequently refused to report for induction as ordered by his board. I It has been settled in this circuit that the failure of a local board to articulate in writing the bases for its denial of a conscientious objector claim is fatal to an indictment for refusal of induction where information in the Selective Service file of a registrant is sufficient to comprise a prima facie case for exemption and where the reviewing court cannot with assurance determine that the decision made by the board properly supported the rejection. United States v. Lemmens, 430 F.2d 619 (7th Cir. 1970). Weaver argues that Lemmens squarely controls this case; the Government counters by asserting that Weaver failed to make out a prima facie claim of conscientious objection. We reject the Government’s contention. Whatever our opinion of Weaver’s claim set forth in the letter accompanying the blank Form 150, we are compelled to assume that the local board considered this sufficient to state a prima facie case of conscientious objection. The board responded to Weaver’s letter with a Form 110 and a notification of his right to appeal. Under the regulations in force at the time, this action signified conclusively that the board had reopened Weaver’s classification, 32 C.F. R. § 1625.12, a step precluded by regulation unless a prima facie case had been made out. 32 C.F.R. § 1625.4. The Government has so conceded, both to the United States Supreme Court, Joseph v. United States, 405 U.S. 1006, 92 S.Ct. 1274, 31 L.Ed.2d 473 (1972); Lenhard v. United States, 405 U.S. 1013, 92 S.Ct. 1296, 31 L.Ed.2d 477 (1972), and to this court. United States v. Dziemiela, No. 72-1465 (7th Cir., Sept. 28, 1972); United States v. Nelson, No. 71-1812 (7th Cir., July 12, 1972); United States v. Hulsey, 463 F.2d 1071, No. 18982 (7th Cir., June 5, 1972). Also see United States v. Hershey, 451 F.2d 1007 (3d Cir. 1971). In Hulsey we held that Joseph and Lenhard, read in conjunction with Lemmens, were sufficient authority to “dictate” reversal of a conviction under 50 App. U.S.C. § 462, despite our decision on an earlier consideration of the case that Hulsey had failed to present a prima facie case of conscientious objection. United States v. Hulsey, No. 18982, 463 F.2d 1071 (7th Cir., March 8, 1972). For these reasons, we hold that the failure of Weaver’s local board to explain in writing its rejection of his conscientious objector claim after it had reopened his case entitles Weaver to a reversal of his conviction under Lemmens. II The defendant cannot, however, claim the benefit of this ruling if he failed inexcusably to exhaust administrative remedies within the Selective Service System, since established law precludes a registrant’s challenge to his classification unless and until administrative remedies have been exhausted. Estep v. United States, 327 U.S. 114, 66 S.Ct. 423, 90 L.Ed. 567 (1946); Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305 (1944). Generally speaking, the requirement of exhaustion is “an expression of executive and administrative autonomy.” L. Jaffe, Judicial Control of Administrative Action 425 (1965). An administrative agency, like a trial court, exists for the purpose of applying a statute in the first instance. The disruption of the administrative process by allowing parties an interlocutory appeal from intermediate stages of that process, and the concomitant restriction of the agency in its application of expertise, its exercise of discretion, and its finding of fact, constitute the vices to which the exhaustion doctrine is directed. Judicial economy is also served, since a reviewing court avoids ruling on issues which might become moot on further consideration of the case by the particular agency. However, other considerations are introduced where, as here, a criminal prosecution is involved: [I]t is well to remember that use of the exhaustion doctrine in criminal cases can be exceedingly harsh. The defendant is often stripped of his only defense; he must go to jail without having any judicial review of an as-sertedly invalid order. This deprivation of judicial review occurs not when the affected person is affirmatively asking for assistance from the courts but when the government is attempting to impose criminal sanctions on him. McKart v. United States, 395 U.S. 185, 197, 89 S.Ct. 1657, 1664, 23 L.Ed.2d 194 (1968). In this vein, the Supreme Court has limited the exhaustion doctrine to draft law prosecutions where “the interests underlying the exhaustion rule clearly outweigh the severe burden imposed upon the registrant if he is denied judicial review.” McKart v. United States, 395 U.S. 185, 197, 89 S.Ct. 1657, 1664, 23 L.Ed.2d 194 (1968); McGee v. United States, 402 U.S. 479, 485, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971). A “discrete analysis” of each case is required. United States v. Rabe, No. 71-1419, 466 F.2d 783 (7th Cir., Aug. 11, 1972). In draft cases involving claims of conscientious objection, where the failure to exhaust remedies has deprived the Selective Service Administration of an opportunity to find facts and exercise its expertise on the question of sincerity, courts have not excused that failure where it was deliberate, McGee v. United States, 402 U.S. 479, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971); United States v. Brudney, 463 F.2d 376 (9th Cir. 1972); United States v. Holby, 345 F.Supp. 639 (S.D.N.Y., 1972), or where the claim was presented for the first time when induction was refused. United States v. Keys, 465 F.2d 736 (6th Cir., 1972). This case is far removed from either of those extremes. Weaver, by his letter of November 13 requesting an appeal, clearly evidenced an intention and a willingness to proceed along regularized channels of appeal within the Selective Service System. Moreover, had the board supplied Weaver with a Form 150 in response to that letter — a duty incumbent upon it if it viewed the form as sine qua non to a personal appearance on Weaver’s claim, see United States v. Sobczak, 264 F.Supp. 752 (N.D.Ga.1966) — Weaver would not now be charged with a failure to exhaust, since he would have obtained a hearing on the essence of what he stated in his post-appearance letter accompanying the blank Form 150. At worst, Weaver’s failure to exhaust was mildly negligent and hardly a fit basis upon which to preclude his defense under Lemmens. McGee v. United States, 402 U.S. 479, 487-488, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971); United States v. Peeler, No. 3858-Cr. (E.D.N.C., June 28, 1972); see United States v. Hunstiger, 343 F.Supp. 223 (D.Minn., 1972). We buttress this conclusion by recognizing that the failure of the local board to state reasons for its decision reduced any appeal by Weaver to a meaningless formality. Mr. Justice Clark, sitting by designation in this circuit, discussed this question only recently in United States v. Rabe, No. 71-1419, 466 F.2d 783 (7th Cir., Aug. 11, 1972). His language there has equal bearing on this case: The Local Board handling of the case was superficial at the best and ill-advised at the least. The imperious manner in which it entered a flat denial of Rabe’s claim without stating any grounds, reason or explanation deprived Rabe of any meaningful appeal. See United States v. Lemmens, 430 F.2d 619, 622-624 (7 Cir. 1970). As the Solicitor General recently stated in confessing error in Joseph v. United States, vacated and remanded 405 U.S. 1006, 92 S.Ct. 1274, 31 L.Ed.2d 473 (1972). “The underlying rationale of these decisions, although variously formulated, is that some statements of reasons for a Board’s classification is necessary to ‘meaningful’ review, (Cf. Gonzales v. United States, 348 U.S. 407, 415, 75 S.Ct. 409, 99 L.Ed. 467) of the administrative determination both by the State Appeals Boards and by the courts.” See also memorandum for the United States in Lenhard v. United States, vacated, 405 U.S. 1013, 92 S.Ct. 1296, 31 L.Ed.2d 477 (1972). It would be both ironic and frustrating if the Government was permitted to prevail in a case because the registrant did not appeal when the Government itself had rendered an appeal futile. . . . The importance of the Local Board giving its reasons or explanation is illustrated not only by the confession of the Solicitor General, supra, but also by Congressional Act, P.L. 92-129, 92d Cong., 1st Sess. (Sept. 28, 1971) and by the national rules and regulations of the Selective Service itself that were recently adopted. 32 C.F.R. 1623.4(c), 36 F.R. 23378 (Dec. 9, 1971). This emphasizes the fatal impact on the administrative process of this failure of the Local Board to furnish grounds for its decision rejecting Rabe’s claim of conscientious objection. This is the more fatal in this class of draft ease since the Board may be going off on a ground that the registrant might cure by additional evidence. Accord, United States v. Godfrey, 346 F.Supp. 672 (D.Minn., 1972); United States v. Peeler, No. 3858-Cr. (E.D.N.C., June 28, 1972). We conclude that Weaver must prevail on his defense under Lemmens, and accordingly reverse his conviction. The Government argues that Weaver’s letter of November 13, “on its face, makes no request for a Form 150.” Be that as it may, Weaver did state unequivocally: “I believe my classification should be I-O.” This was sufficient to necessitate a board response by the mailing of a Form 150.

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James D. HODGSON, Secretary of Labor, Appellant, v. DISTRICT 6, UNITED MINE WORKERS OF AMERICA, et al., Appellees. No. 72-1198. United States Court of Appeals, Sixth Circuit. Argued Oct. 16, 1972. Decided Feb. 28, 1973. Robert S. Greenspan, Dept, of Justice, for appellant; L. Patrick Gray, III, Asst. Atty. Gen., William W. Milligan, U. S. Atty., Walter H. Fleischer, Atty., Dept, of Justice, Washington, D. C., on brief. Harry R. Paulino, Columbus, Ohio, for appellees; Edward L. Carey, Gen. Counsel, United Mine Workers of America, Washington, D. C., Paul A. Pachuta, Columbus, Ohio, on brief. Before PHILLIPS, Chief Judge, WEICK, Circuit Judge, and GUBOW, District Judge. The Honorable Lawrence Gubow, Judge, United States District Court for the Eastern District of Michigan, sitting by-designation. WEICK, Circuit Judge. The Secretary of Labor [Secretary] has appealed from an order of the District Court granting summary judgment dismissing his complaint in an action to declare void an election conducted by District 6, United Mine Workers of America [union], in violation of the Labor-Management Reporting and Disclosure Act of 1959 [Act], 29 U.S.C. §§ 401-531. The Secretary brought the suit following a complaint made to him by a union member that he (the union member) had been prevented from becoming a candidate for an elective office in the United Mine Workers Union. The Secretary alleged in his complaint filed in the District Court that the particular union rule which barred the candidacy of the union member was unreasonable, and thus in contravention of Section 401(e) of the Act. 29 U.S.C. § 481(e). The District Court held that the Secretary was precluded from filing an action under Section 401(e) on the ground that the union member had not exhausted internal union remedies as required under Section 402(a) of the Act. The Court held, alternatively, that even if the union member had exhausted internal union remedies, the rule which precluded his candidacy was reasonable. We reverse. We are of the opinion that the union member exhausted his internal union remedies, and that the union rule which barred his candidacy was unreasonable, in contravention of Section 401(e) of the Act. On December 10, 1968, an election was conducted by District 6, United Mine Workers of America, for the office of International Executive Board Member. William Howard, whose complaint led to the institution of this- action, attempted to become a candidate for this elective office. The nominating procedure to be followed by the union in elections for international offices, are prescribed by Arti-ele VIII of the Constitution of District 6, UMW. On June 25, 1968 the Secretary-Treasurer of District 6 sent letters to all seventy-nine locals under the jurisdiction of District 6, informing the locals that there was an upcoming election for the office of International Board Member. The letters contained blank nominating certificates to be used by the locals if they wished to nominate a union member for candidacy in the election. The letter of June 25, 1968 also stated: “All nomination certificates must be sent so they will reach this office on or before August 10, 1968. Certificates of Nomination arriving at District Headquarters, 85 East Gay Street, Columbus, Ohio 43215, after that date cannot be counted.” This statement conformed with the nomination rules prescribed in the Constitution of District 6 in that it provided approximately one month within which the locals were to send in their completed nominating certificates. It is undisputed that William Howard was duly nominated for the position of International Executive Board Member by five local unions as required by Article VIII of the Constitution. Nomination certificates were timely sent by four of the local unions to Columbus, by the local recording secretaries of those unions. However, although Howard had received the nomination of Local 1417 by vote of its members on July 28, 1968, the recording secretary of this local did not mail the nominating certificate to District 6 in Columbus until August 13, 1968, and the certificate was not received until August 14, 1968. Because this fifth certificate was received after the August 10th deadline, it was voided by the District 6 officials. The District contended that Howard had only four nominations, i. e., one short of the constitutionally required five nominations. Howard was not permitted to become a candidate for office. The incumbent member of the International Board ran unopposed in the December 10, 1968 election and was reelected. When Howard did not receive notice of his nomination from the District Secretary-Treasurer, on September 16, 1968, he mailed the following letter to the President of District 6, to W. A. Boyle, President of the International Union, to the International Executive Board Member from District 6, to the Secretary-Treasurer of District 6, and to the Division 4 Board Member of District 6: “I am a member in good standing of Local 6271, District 6. I was disqualified as a nominee for the office of International Executive Board Member for not having the required endorsements of local unions. I received the nominations of 6 locals but only 4 locals were counted. The 2 locals whose nominations were not counted were not my fault or the fault of the members of these locals. I am protesting my disqualification as a nominee. “I am also protesting and opposing the system of trusteeship where by our District President and Secretary-Treasurer are appointed. “If this is not the correct way to protest my disqualification as a nominee, I request you to forward this appeal to the correct channel and that I be so advised. Sincerely, s/s William S. Howard William S. Howard Local 6271” Thomas Williams, President of District 6, answered Howard’s letter on October 3, 1968, sending copies to the other Board members, and stating in part: “I am advised that District No. 6 Secretary-Treasurer R. C. Owens received from Local Unions in District No. 6 by registered mail four nomination blanks nominating you for the office of International Executive Board Member not later than four months before the date of election (August 10, 1968). “Section 4 of Article VIII states in part: ‘no person shall be notified or be a candidate who has not been nominated by five or more Local Unions’. Inasmuch as District No. 6 Secretary-Treasurer R. C. Owens had received by registered mail only four nominations for International Executive Board Member in your name by August 10, 1968, you could not be considered a candidate for this office under the above provisions of Section 4 of Article VIII of our District Constitution. “However, if you could substantiate your claim through registered mail receipts from five or more Local Unions that you allege nominated you for the office, I am confident that reconsideration could be given you as a nominee for International Executive Board Member from District No. 6.” It is obvious that Williams was not responding to Howard’s complaint that although he had been duly nominated for the office by the requisite number of local unions, as required by Article VIII, Section 4 of the District Constitution, he had been disqualified for something which was not his fault nor the fault of the members of the union whose vote was not counted. Howard had done everything which the Constitution of the union required of him to become a candidate for the office. He had appeared before five local unions and had persuaded their members to nominate him. It was not Howard’s fault, nor the fault of the members of Local 1417, that the Recording Secretary of the local waited until after time for filing had expired before sending the nomination certificate to the District office in Columbus. The Constitution placed on the Recording Secretary, and not on Howard, the mandatory duty to forward to the District office the nomination certificate. It was solely on account of the dereliction of duty of the Recording Secretary that Howard’s nomination was not timely forwarded. Williams told Howard in his letter only that he (Howard) would have to substantiate his claim through registered mail receipts proving that the nomination certificates were received by the District office by August 10, 1968, which was an impossibility, as Williams well knew. On December 11, 1968, one day after the election was held, Howard sent to the union officials another letter which was identical with his letter of September 16th. Williams responded on December 12, 1968, simply referring Howard to Williams’ previous letter of October 3rd. On January 7, 1969, Howard filed a complaint with the Secretary of Labor, alleging a violation of Section 401 of the Act in the conduct of the election. The Secretary investigated the complaint, found probable cause of a violation of the Act under Section 402(b) and after unsuccessful efforts to settle the dispute, instituted the present suit on April 3, 1969. EXHAUSTION OF UNION REMEDIES Section 402 of the Act prescribes the method of determination and enforcement of Section 401(e) voting rights. It provides: “[A] member of a labor organization — (1) who has exhausted the remedies available under the constitution and bylaws of such organization and of any parent body . . . may file a complaint with the Secretary . . . .” 29 U.S.C. § 482(a). The Secretary cannot make an investigation or file a civil suit in the federal courts unless there is a valid complaint by a union member, i. e., a complaint that is made after the member has exhausted his internal union remedies. The issue of whether William Howard exhausted internal remedies in the United Mine Workers of America before he complained to the Secretary is bifurcated. The first portion of the issue is whether Howard complained through the proper union channels. The second portion of the issue is, assuming that Howard did complain through proper union channels, whether the complaints called into question the validity and not just the method of application, of the candidacy rule in question. Under the union’s constitution it was necessary that Howard make his protest to the District Executive Board. He did not address his letter to the Executive Board per se; rather, he sent- his letter to individual officials in the International Union, who were also Board members. In fact, Howard’s letter went to W. A. Boyle, President of United Mine Workers of America, to the International Executive Board Member of District 6, to the Board’s Secretary-Treasurer, and to the Board member who represented Howard’s division in the union. Clearly, a letter of protest which reached not only the President of the International Union, but also other members of the Executive Board, is certainly equivalent to an appeal to the Board as an entity. To hold otherwise would be to impose a technical burden which would trap practically every union member. We turn now to the second aspect of the exhaustion rule: whether Howard’s protest letters called into question the validity of the candidacy rule. In Hodgson v. Local 6799, United Steelworkers, AFL-CIO, 403 U.S. 333, 91 S.Ct. 1841, 29 L.Ed.2d 510 (1971), the Supreme Court noted: “[T]he primary objective of the exhaustion requirement [of Sec. 402 of the Act] is to preserve the vitality of internal union mechanisms for resolving election disputes — mechanisms to decide complaints brought by members of the union themselves.” (403 U.S. at 340, 91 S.Ct. at 1846.) In that case the member’s complaint to the union included several procedural matters, but did not include an objection to the validity of a meeting-attendance rule. That objection was included for the first time in the complaint filed by the member with the Secretary. The Secretary, in his suit against the union, challenged the validity of the meeting-attendance rule, which issue he conceded had never been presented by the complaining member to the union. It was the Secretary’s contention, which the Supreme Court rejected, two Justices dissenting, that if his investigation uncovered a violation of law on the part of the union, even though not objected to by the member, he was authorized under the Act to seek redress in respect thereto. In the present case the Secretary makes no such contention. He contends that the member’s complaint in the present case, although couched in unskilled layman’s language, was sufficiently broad to include an objection to the validity of the constitution. In our case, unlike Steelworkers, Howard literally complied with all the provisions of the constitution. He was duly nominated for the office by five local unions. It was solely on account of the dereliction of the Recording Secretary of Local 1417 that Howard’s certificate of nomination was not timely forwarded to the District. If Howard can be disqualified because of the dereliction of duty on the part of the Recording Secretary, then Article VIII of the District Constitution is invalid. In Hodgson v. Local 1299, United Steelworkers of America, 453 F.2d 565 (6th Cir. 1971), we followed the Supreme Court decision in Steelworkers, and held that the exhaustion of remedies requirement is not met when a union member protests the manner in which the rule was applied to him and not the validity of the rule itself. In Local 1299 a number of candidates for union office were declared ineligible to run because of a meeting-attendance rule which was interpreted to require attendance at twelve of the twenty-three meetings pre-ceeding the election. The candidates claimed that the union officials had misread the language of the union’s constitution and by-laws, and had not given those documents their “fullest meaning”. In court, the candidates testified in substance that their protests were directed at the election committee’s decision to exclude from consideration the first thirteen months of the three-year period preceding the election for purposes of applying the meeting-attendance rule. In essence, we regarded these internal protests of the union members “as an express affirmation of the [meeting-attendance] rule” (emphasis added), 453 F.2d at 574. Therefore, since the reasonableness or validity of the candidacy rule was not called to the attention of the union, it could not be said that the union had an opportunity to consider the rule in the same context as was being presented by the Secretary, that the rule was unreasonable under Sec. 401(e) of the Act. Accordingly, we held that the candidates for union office had not effectively exhausted the internal union remedies. In the instant case, however, we are presented with an entirely different fact pattern. Howard stated in his protest letters that he had been disqualified from being a candidate when in fact he had actually received the required nominations of five local unions, and it was “not my fault or the fault of the members of these locals”. The members of the Executive Committee of District 6 could have easily discerned, if they had any interest in looking into the matter, that Howard was really complaining about the validity of Article VIII of the constitution which vested in the Recording Secretary such absolute and arbitrary power and authority to vitiate his candidacy, when in fact he had fully complied with all of the rules. It is no answer to say that the union could take action against a recalcitrant Recording Secretary, because that would be too late to help the candidate. It is doubtful whether any action would be taken if the Recording Secretary connived with the incumbent. It certainly cannot be said that Howard’s protest “expresses no dissatisfaction with the rule”, Local 1299, supra, at 575. Moreover, even were we to agree that Howard’s letters were not too clear, there is “a heavy burden on the union to show that it could not in any way discern that a member was complaining of the violation in question”, (emphasis added), Hodgson v. Local 6799, United Steelworkers of America, 403 U.S. 333, 341, 91 S.Ct. 1841, 1846 (1971). In our opinion this heavy burden has not been met. Under this standard, any ambiguities must be resolved in favor of the complaining union member. Thus, even if the union officials themselves misunderstood (which we doubt) the substance of Howard’s complaint, or even if they in fact thought that Howard was complaining only of a ministerial failure to count his nominations as their reply letters indicate, the fact that Howard’s protests can be read fairly as attacking the validity of the rule in question, is sufficient to meet the exhaustion requirement. In other words, the exhaustion requirement is to be both liberally construed in favor of the complaining member, and objectively determined. We therefore hold that Howard exhausted his union remedies, and that the Court had jurisdiction of the Secretary’s suit under Section 402 of the Act, challenging the reasonableness of the candidacy rule in question. THE REASONABLENESS OF ARTICLE VIII, SEC. 3 OF THE UNION CONSTITUTION Although the District Court held that it had no jurisdiction of the suit because the complaining member did not exhaust his union remedies, the Court addressed itself to the merits of the Secretary’s action and held that the rule in question was reasonable. We disagree. Section 401(e) of the Act provides in part : “(e) In any election required by this section which is to be held by secret ballot a reasonable opportunity shall be given for the nomination of candidates and every member in good standing shall be eligible to be a candidate and to hold office (subject to section 504 of this title and to reasonable qualifications uniformly imposed) tf The question to be decided is whether a union rule which vests in a local Recording Secretary such arbitrary and exclusive authority, power and responsibility for timely sending in valid local nominations to the District office, provides a “reasonable opportunity” to be nominated for office. The word “reasonable” does not carry an inherently precise definition. At best it is an elusive concept in both our language and our law. In order to give it substance the requirement of reasonableness must be assessed in the light of the purposes which the Congress sought to achieve and the evils which it sought to eliminate by the Act. One of the prime objectives of the'Act was— “. . . to protect the rights of rank — and—file members to participate fully in the operation of their union through processes of democratic self-government, and, through the election process, to keep the union leadership responsive to the membership.” (Wirtz v. Hotel, etc. Employees Union, Local 6, 391 U.S. 492, 497, 88 S.Ct. 1743, 20 L.Ed.2d 763 (1968)) Moreover, as described in the Senate Report on the Act, “It needs no argument to demonstrate the importance of free and democratic union elections The government which gives unions power has an obligation to insure that the officials who wield it are responsive to the desires of the men and women whom they represent. The best assurance which can be given is a legal guaranty of free and periodic elections. The responsiveness of union officers to the will of the members depends upon the frequency of elections, and an honest count of the ballots. Guaranties of fairness will preserve the confidence of the public and the members in the integrity of union elections.” (Emphasis added). S.Rep.No.187, 86th Cong., 1st Sess., 6-7, 20 (1959); 1 Leg.Hist. 402-403, 416. It was the opinion of the District Court that even though the policies of fairness and democracy underlay the Act, judicial intervention in union political affairs must be resorted to only in the most “extraordinary and egregious situations.” The Supreme Court has consistently cautioned against just such an attitude in the lower federal courts. Wirtz v. Hotel Employees, supra, at 496, 88 S.Ct. 1743; Wirtz v. Local 153, Glass Bottle Blowers Ass’n, AFL-CIO, 389 U.S. 463, 473, 88 S.Ct. 643, 19 L.Ed.2d 705 (1968). Congress, although committed to minimal intervention, was equally committed to ensuring that unions have democratic and fair election procedures. Thus, we are not faced with the question of whether Article VIII, Section 3, is an extraordinary or egregious rule; rather, we are faced with the question of whether this rule results in a reasonable opportunity to become a candidate in light of the congressional policy that union election procedures be both democratic and fair. William Howard met every requirement that he could in his attempt to become a candidate for the office. He attended five local union meetings and persuaded each local union to nominate him for the office; he received valid nominations (by vote) of each of the five local unions. Yet Howard was not permitted to become a candidate solely because the Recording Secretary of only one of the local unions did not send in his name as the nominee of that local until after the time for filing had expired, although the Recording Secretary had ample time to do so. Furthermore, as Howard expressed in his letter of protest to the union, it was not his fault nor the fault of the local union members. As a result, the incumbent union official ran for the office unopposed; The situation is similar to one where a candidate for public office, who timely files his Declaration of Candidacy with the Board of Elections, is disqualified because of some act or neglect on the part of a Board employee. To say that the union rule gave Howard a reasonable opportunity to become a candidate for office, or to say that the rule comported with the congressional policy of having fair and democratic union elections, would be a travesty on the language of the Act and on the purposes behind it. In addition, the rule not only unreasonably barred Howard from candidacy, but also it is unreasonable on its face. Because the transmission of nominations is entirely out of the control of local union members and of the candidate himself (the required transmission of nominations is under the exclusive control of a union official, the incumbent Recording Secretary), it presents a situation of potential abuse. This rule could be used by incumbent officers to thwart the candidacy of an insurgent union member, and such an abuse would be difficult, if not impossible, to prove. Finally, in holding the rule to be unreasonable on its face, we take notice of the fact that our decision would require merely the most minimal restructuring of the union’s procedures so as to insure that no candidate shall be disqualified when he has complied with all of the rules. Accordingly, we hold that that portion of Article VIII, Section 3, of the Union Constitution which provides that the local Recording Secretary shall forward nominations to the District by a specified time, does not provide a candidate with a reasonable opportunity to be nominated as required under Section 401(e) of the Act. The judgment of the District Court is reversed and the cause is remanded to the District Court with instructions to enter judgment in favor of the Secretary. . Article VIII provides : “Nomination and Election of Officers “Section 3. The District Secretary-Treasurer shall prepare nomination blanks and send them by registered mail to the local Unions not later than five months before the date of election and the Local Recording Secretary shall fill in the names of the members nominated by the Local Union for the various offices and forward the same by registered mail to reach the District Secretary-Treasurer’s office not later than four months before the date of election. “Section 4. The District Secretary-Treasurer shall within ten days after the nominations are closed notify all persons of their nomination together with a list of Local Unions nominating each nominee and ask if they are candidates for the respective offices as indicated by said nominations and get their written consent to place their name on the ballot, but no person shall be notified or be a candidate who has not been nominated by five or more Local Unions.” . Howard thought that he had received the nomination of six local unions at the time that he sent this letter. However, it was agreed later by the parties that Howard had received only five nominations, which was all that was required. . Article III, Sec. 3 of the Constitution of the union, provides as follows : “Sec. 3. In all questions of dispute, appeals and grievances (unless restricted by joint agreement) the right of appeal of an individual member shall end with the District Executive Board, and the right of appeal of any branch of the Organization shall end with the International Executive Board. This shall not prevent individuals whose membership is at stake from appealing to the International Executive Board, which body’s decision shall be final and binding unless reversed by the International Convention. When an appeal is taken, the defendants must be furnished a copy of the appeal in ample time to prepare their case. In all cases the decision of the subordinate tribunal must be complied with before the appellant’s right of appeal shall be recognized. However, the appellant shall have the right of appeal, provided bond satisfactory to the court of appeal covering the amount of money involved is furnished.” . We note that the Third Circuit has held that a letter of protest which reached only the chairman of the appellate tribunal was equivalent to an appeal to the tribunal itself. Shultz v. Local 1291, I. L. A., 429 F.2d 592 (3d Cir. 1970). We also note that in this case Howard explicitly requested in his letter that the union officials see that the protest was processed through the proper union channels. Their failure to follow instructions cannot be used to frustrate Howard’s candidacy. . This explanation by the union is substantially undercut by the fact that Howard’s second letter of protest was sent after the election was held. It would have been of little value to Howard to have his nominations “counted” at that time. . If exhaustion were subjectively determined, union officials could make it very difficult to prove that they had knowledge that the validity of a rule was being attacked. The officials could consistently reply to letters of protest in language which would “show” that they thought that the member was not attacking the validity or reasonableness of the rule. . See n. 1 for text. . The union, in contending that Article VIII, Sec. 8, of the Union Constitution did not affect the outcome of the election, stated in its motion for summary judgment: “5. Even had complainant been nominated. and placed on the ballot, the outcome of the election would have been no different.” Such an argument is hardly justification for depriving Howard of the opportunity to run for the office. Further, this argument is pure speculation and conjecture, and is not consistent with the purposes of the Act. The District Court did not even mention this ground, as it is obviously frivolous. We note that there have been a number of intervening elections since the unlawful 1968-election, in question. However, when the Secretary proves a violation of Section 401(e) of the Act, he is not deprived of the right to a court-ordered new election under his supervision because the union has meanwhile conducted other unsupervised elections. Wirtz v. Local 153, Glass Bottle Blowers Ass’n, AFL-CIO, 389 U.S. 463, 88 S.Ct. 643, 19 L.Ed.2d 705 (1968). It makes no difference whether Howard now desires to become a candidate.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Helen RIDINGER et al., Plaintiffs-Appellants, and Clara D. Johnson et al., Plaintiffs-Appellants, v. GENERAL MOTORS CORPORATION, Defendant-Appellee. Nos. 71-1934, 71-1937. United States Court of Appeals, Sixth Circuit. Argued April 20, 1972. Decided Oct. 13, 1972. Dennis E. Murray, Sandusky, Ohio (Murray & Murray Co., Sandusky, Ohio, Thomas C. Waechter, Bieser, Greer & Landis, Dayton, Ohio, on the brief), for plaintiffs-appellants. Charles P. Pfarrer, Dayton, Ohio (Cowden, Pfarrer, Crew & Becker, Dayton, Ohio, Ross L. Malone, Detroit, Mich., on brief), for General Motors. Susan Deller Ross, EEOC, Washington, D. C. (Howard Besser, Dist. Atty., Cleveland, Ohio, on brief), amici curiae for Equal Employment Opportunity Commission. Ruth Weyand, Washington, D. C., and Sorrell Logethetis, Knee, Snyder & Parks, Dayton, Ohio (Winn Newman, Washington, D. C., and Richard Rice, Kettering, Ohio, on brief), for Union. Before PHILLIPS, Chief Judge, KENT, Circuit Judge, and Mc-ALLISTER, Senior Circuit Judge. ORDER These appeals are from judgments entered in the trial court disposing of cases which were commenced as class actions under the provisions of Rule 23, Federal Rules of Civil Procedure, 28 U.S.C.A. The trial court, 325 F.Supp. 1089, failed to determine whether the actions could be maintained as class actions as required by Rule 23(c), and the judgments from which these appeals are taken do not “include and describe those whom the court finds to be members of the class.” It is, therefore, ordered that the judg-. ments of the trial court are reversed and the cases remanded for further proceedings pursuant to Rule 23, Federal Rules of Civil Procedure, and for consideration in the light of this Court’s opinion in Manning v. International Union and General Motors Corp., 466 F.2d 812, decided September 11, 1972.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

PARKER SWEEPER COMPANY, Plaintiff-Appellee, v. The E. T. RUGG COMPANY, Defendant-Appellant. No. 72-1664. United States Court of Appeals, Sixth Circuit. Argued Dec. 14, 1972. Decided Feb. 27, 1973. Robert E. Stebens, Columbus, Ohio, on brief for appellant; Mahoney,' Miller & Stebens, Columbus, Ohio, of counsel. Stanley H. Foster and Charles H. Melville, Cincinnati, Ohio, for appellee; Melville, Strasser, Foster & Hoffman, Cincinnati, Ohio, of counsel. Before EDWARDS, CELEBREZZE and KENT, Circuit Judges. EDWARDS, Circuit Judge. Appellant Rugg appeals from the District Court’s findings of validity of two Parker Sweeper patents, Patent No. 3,035,294 (hereafter ’294) and Design Patent No. 194,051 (hereafter ’051), and from a judgment granting damages for infringement and enjoining Rugg from further infringement. The crucial issue in this appeal concerning the ’294 patent is whether or not Parker’s combination patent for a towable, dumpable lawn-leaf sweeper is invalid because the invention it claimed was obvious under the then existing state of the art to one skilled in the art. Although the issue is not without difficulty, we conclude that the combination patent ’294 is invalid for obviousness. At the outset we note that if the equities between these two adverse parties were all that was at issue, the balance in this record would strongly favor appellee Parker Sweeper for all the reasons cited by the District Judge. Appellant Rugg appeared to the District Judge (and appears to us) deliberately to have copied Parker Sweeper’s commercially successful product. Appellant Rugg prevails not because of merit in its conduct, but because of the national policy of rewarding with patent monopoly only those advances which can properly be characterized as “inventions.” U.S.Const, art. I, § 8; 35 U.S.C. §§ 101, 102, 103 (1970); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964); Cuno Engineering Corp. v. Automatic Devices Corp., 314 U.S. 84, 62 S.Ct. 37, 86 L.Ed. 58 (1941); Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248, 13 L.Ed. 683 (1850). The record in this case appears to us to present no important dispute of fact. On the heels of the development of the small tractor and a lawn mower suitable for towing behind it, a need became apparent for a grass or leaf sweeper which could be similarly employed. Such sweepers were readily available in the art for adaptation to small tractors. But as the president of Parker Sweeper Company testified, they were difficult to dump, since most could be emptied only by turning them over or by lifting out some form of basket or bailing liner. Until Parker’s sweeper (patented under the numbers ’294 as to structure and ’051 as to design) was placed on the market, there was no sweeper which the tractor operator could operate and dump at a desired spot without dismounting. With the production and marketing of Parker’s ’294 sweeper beginning in 1960, its sales of sweepers skyrocketed from 200 per year to over 13,000 per year. Understandably, Parker was concerned when appellee Rugg Company in 1966 began to manufacture a very similar sweeper and to sell it to Sears, Roebuck under the latter’s Craftsman label. After warning Rugg of its claims of patent infringement, Parker began the instant litigation by a complaint alleging infringement by Rugg of both its patents and seeking injunctive relief and damages. The case was tried fully and it appears to this court that only legal issues remain. With the exception of the last sentence of finding 17 (which we believe to be a conclusion of law), we accept the careful findings of fact of the District Judge. They certainly are not “clearly review them. Fed.R.Civ.P. 52; American Saint Gobain Corp. v. Armstrong Glass Co., 434 F.2d 1216, 1218 (6th Cir. erroneous” — the standard by which we 1970). As we have indicated, we also agree with the District Judge that the Parker sweeper met the test of utility fully and had sufficient differences in its method of combination of previously known elements to pass the test of novelty. Nor do we find any fault with the District Judge’s statement of the law applicable to a determination of “obviousness” : A three-step test has been established by the Sixth Circuit in determining the question of what constitutes “obviousness.” Westwood Chemical, Inc. v. Owens-Corning Fiberglas Corp., 445 F.2d 911 [6th Cir. 1971]. The first step is a factual determination of the prior art; second, a factual determination of what, if any, improvement the patentee has made over the prior art; and third, a legal question of whether the improvement would have been obvious to one skilled in the art. Additionally, the Supreme Court in Graham v. John Deere Company, 383 U.S. 1, [86 S.Ct. 684, 15 L.Ed.2d 545] (1965), has indicated secondary considerations such as commercial success, long felt but unsolved needs, failures of others, etc., as relevant indicia of obviousness or non-obviousness. Such secondary considerations might also be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. The rationale of the District Judge and of the appellees in dealing with the obviousness test is set forth as follows in the last sentence of finding 17: The prior art as set forth in the above patents does not appear to be, both collectively and individually, the subject matter therein such as would make the patent in question obvious to a person having ordinary skill in the art. As we have indicated above, this sentence appears to be the ultimate conclusion of law which the District Judge subsequently supported with this reasoning under the heading of Conclusions of Law: The state of the prior art has been indicated by the parties through the introduction in evidence of nine patents. They fall naturally into two categories; those of modern origin concerned exclusively with a non-dumpable manually pushed sweeper, and those of the nineteenth century-addressed primarily to the unique problems of that era. The teachings of the prior art do include elements of the patent in question. It would be difficult indeed to imagine a mechanical device for the removal of debris and the deposit of such debris in a receptacle for later emptying that would not follow certain basic physical principles. The combination, however, of such established elements with a useful and novel result does create a patentable device, even though the elements of the combination are old and well known. . The District Judge and appellants also rely strongly upon secondary considerations and the presumption of validity of a patent once issued: The secondary considerations referred to in Deere reinforce the non-obviousness of plaintiff’s patent. The move to suburbia following World War II created the enormous and profitable home lawn and garden industry. The riding tractor made grass cutting chores substantially easier. There was needed only some device to remove the grass clippings after cutting during the summer and fallen leaves in the autumn. These tasks continued to be manual, time-consuming, and unpleasant. Defendant as a manufacturer of lawn mowers would have been at least cognizant of this problem. The fact is, however, that neither defendant nor anyone else solved this problem until plaintiff marketed its product and the depth of the felt need was immediately apparent. An increase in sales in excess of 6,000% is probably the best evidence available as to the commercial success of this invention. The law is clear that a patent once issued is presumed valid, (35 U.S.C. § 282) and that a heavy burden of proof rests upon the party attempting to prove invalidity. Westwood Chemical, Inc. v. Owens-Corning, supra [445 F.2d 911 (6th Cir. 1971)]. Accepting, as we do, the findings of fact of the trial judge and the applicability of both the secondary considerations and the presumption just referred to, we are still unable to agree that the resulting product was “nonobvious” within the meaning of the constitutional and statutory scheme. We believe this record and the District Judge’s findings require the conclusion that every element critical to this patent was anticipated in one or more of the nine patents as to which the parties stipulated. Although appellant’s claims describe the sweeper brush and the mechanism which rotates it, it is too clear for argument that these features are anticipated by all nine of the described patents and many other sweepers. The only “novelty” arguably described in the claims pertains to the dumping mechanism of the ’294 sweeper. This is described in Claim 3: (3) A lawn sweeper, comprising in combination, a cart including a frame having spaced, upright side sections, axle means at the front of the frame, wheels on said axle means, axle means at the rear of the frame, wheels on the second mentioned axle means; a machine head carried by the front of the frame between the side sections and including a rotatable work element; bearing means adjacent the top and rear of each section of the frame sections and disposed forwardly of the rear wheels, the axes of said bearing means being aligned and disposed transversely of the direction of movement of the cart on the wheels; an open front and open top debris receptable disposed between the frame sections and including axle means cooperating with the bearing means for pivotally supporting the debris receptacle, the axle means for the debris receptacle lying forwardly of the center of gravity of the receptacle in all positions to which the receptacle can be moved. The ’294 sweeper is pictured below— the top picture with the receptable in dumping position and the bottom in sweeping position. Reduced to plain English, what this dumping device amounts to is a basket with an open top and front mounted on a frame behind a sweeper brush mechanism which propels swept debris into the basket. The basket is suspended from an axle mounted on pivots on the top part of the frame so that the tractor operator may empty the loaded basket by pulling on a rope attached to the top of the rear side of the basket, thus causing the basket to tip or rotate forward on its axle, thereby dumping the debris through the open front of the basket. Upon release of the rope, the force of gravity returns the basket to its debris-receiving position. Neither the basket, nor the frame, nor the axle, nor the pivot, nor the rope are claimed to be novel or patentable. The claim, of course, is that the combination of these elements as portrayed above is both ingenious and nonobvious, and that it met a felt need and achieved great commercial success. We do not denigrate the importance of Parker’s device merely because it is involved in the unglamorous task of waste removal. Waste removal is one of the most important of man’s problems and its importance increases with the size of population and the complexity of our civilization. Waste removal is, however, also one of the most ancient of man’s problems and as the District Judge noted, “It would be difficult indeed to imagine a mechanical device for the removal of debris and the deposit of such debris in a receptacle for later emptying that would not follow certain basic physical principles.” Indeed, a number of the patents in the prior art demonstrated important aspects of Parker’s combination. The Anderson street sweeper (Pat. No. 457,693, District Court Exhibit A-4) shows gravity return of the receptable after dumping. Specification forming part of Letters Patent No. 457,693, p. 2, lines 37-42, Aug. 11, 1891, Appendix p. 34. The receptacle in the Tilton street sweeper (Patent No. 517,709, District Court Exhibit A-6) returned of its own weight to sweeping position after dumping. Specification forming part of Letters Patent No. 517,709, p. 1, lines 45-63, April 8,1894, Appendix p. 38. The receptacle employed in the Reynolds street sweeper (Patent No. 542,571, District Court Exhibit A-10) was “pivotably hung on pins secured in the sides of the frame.” In addition its receptacle was adapted to “swing downwardly at its front end . . . and upwardly at its rear end to discharge the contents of the [receptacle] in the rear of the brushes between the wheels of the sweeper.” Specification forming part of Letters Patent No. 542,571, p. 1, lines 54-64, July 9, 1893, Appendix p. 42. In the Rogers street sweeper patent (Patent No. 548,659, District Court Exhibit A-ll), the receptacle is referred to as the “receiyer.” Its function is described thus: The receiver 21 is adapted to be dumped at will, and for this purpose is mounted upon horizontal trunnions 22, supported on the ends of hangers 23, which project down from a crossbar 23a on the main frame of the machine. This receiver 21 being thus adapted to be inverted may be moved to bring the receiving opening on the bottom, in order to empty its contents, by drawing a chain 24, whose upper end is held at convenient reach, as at 25. By the shape of the receiver 21 it is held in normal position by reason of its rear projection 26 and makes a tight connection with the collector 20 and receiver 21 and at the same time affords a stop for the receiver in its return movement by curved edges 27, 28, against which the edges of the opening of receiver 21 abut. Specification forming part of Letters Patent No. 548,659, p. 1, lines 61-76, October 29,1895, Appendix p. 48. The Gleason lawn mower patent (Patent No. 703,650, District Court Exhibit A-15) discloses a dumpable receptacle which operates on much the same basic principle as the Parker dumping mechanism. Its receptacle follows the rotary-mower which is towable. The dumping mechanism can be operated from the seat of a horse drawn mower. Dumping is accomplished, as it is with the Parker sweeper, by inverting the receptacle on its pivots. Specification forming part of Letters Patent No. 703,650, p. 2, lines 51-66, July 1,1902, Appendix p. 57. More could be added to this demonstration that every important element and every important function of the Parker sweeper had been employed in some machine at some time for some purpose. We do not ignore the facts that 1) frequently the receptacles referred to above were differently shaped to accomplish different purposes, 2) street sweepers operate differently from lawn sweepers, 3) hand pushed sweepers operate differently from power towed sweepers, and 4) that no one of the prior art patents shows all of the features of the Parker sweeper in the same combination. What we do hold is that the state of the art included all of these patents and that a skillful mechanic setting out to build a towable dumpable lawn sweeper , to be used in connection with a lawn mower tractor in the early 1960’s could accomplish his mission without adding any “invention” to the art. Article I, § 8 of the Constitution provides in part: “Congress shall have Power ... To promote the Progress of Science and [the] useful Arts by securing for limited Times to . Inventors the exclusive Right to their respective . . . Discoveries.” In pursuance of this authority Congress has adopted a statute which describes “invention” as to which a patent monopoly may issue in terms of “novelty,” “utility,” and “nonobviousness.” 35 U.S.C. §§ 101, 102, 103 (1970). We agree with the District Court that Parker’s lawn sweeper passed the first two tests of novelty and utility. It still must survive the test of Sec. 103 which provides: “A patent may not be obtained ... if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. . . . ” 35 U.S.C. § 103 (1970). As Mr. Justice Black put the matter in 1964: “To begin with, a genuine ‘invention’ or ‘discovery’ must be demonstrated ‘lest in the constant demand for new appliances the heavy hand of tribute be laid on each slight technological advance in an art.’ ” Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 230, 84 S.Ct. 784, 788, 11 L.Ed.2d 661 (1964), and cases cited therein. It is against these standards that we review the validity of the instant patent and find it wanting. As a matter of law, we hold that the Parker sweeper patent ’294 is invalid because this record demonstrates a failure to meet the nonobviousness test of 35 U.S.C. § 103 (1970). We likewise conclude that the Parker sweeper design patent ’051 is invalid. The statute under which this patent was issued provides: § 171. Patents for designs Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title. The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided. July 19, 1952, c. 950, § 1, 66 Stat. 805. 35 U.S.C. § 171 (1970). In the leading case dealing with design patents the United States Supreme Court set the standards for review of patentability of a design: The acts of Congress which authorize the grant of patents for designs were plainly intended to give encouragement to the decorative arts . And the thing invented or. produced, for which a patent is given, is that which gives a peculiar or distinctive appearance to the manufacture, or article to which it may be applied, or to which it gives form. The law manifestly contemplates that giving certain new and original appearances to a manufactured article may enhance its salable value, may enlarge the demand for it, and may be a meritorious service to the public. It therefore proposes to secure for a limited time to the ingenious producer of those appearances the advantages flowing from them. . . . It is the appearance itself, therefore, no matter by what agency caused, that constitutes mainly, if not entirely, the contribution to the public which the law deems worthy of recompense. We hold, therefore, that if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other. Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 524-525, 528, 20 L.Ed. 731 (1871). The issue in Gorham, was Gorham’s claim that its design patent was infringed. But this court has applied the Gorham, “ordinary observer” standard to the issue of validity of a design patent. A design patent must be possessed of novelty; the adaptation of old devices to new purposes, however convenient or useful they may be in their new role, is not invention. The degree of difference required to establish novelty occurs when the average observer takes the new design for a different, and not a modified already existing design. . . . The fact that a design may be distinguished from those found in the prior art does not import the required novelty and ornamentation; its overall aesthetic effect must represent a step which has required inventive genius beyond a prior art. Thabet Mfg. Co. v. Kool Vent Metal Awning Corp., 226 F.2d 207, 212 (6th Cir. 1955). Appellants claim that Parker Sweeper’s ’051 patented design is extremely similar in appearance to two of Parker’s own sweepers which had long been on the market. We reproduce below four exhibits, the first being the Parker Sweeper ’051 design under .challenge and then three prior designs in the prior art; We recognize, of course, that the ’051 design differed from the others in both size and framing. But tested by the Gorham standard as applied in Thabet to the eye of the ordinary observer, the designs must be regarded as substantially the same. Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 20 L.Ed. 731 (1871); Tappan Co. v. General Motors Corp., 380 F.2d 888 (6th Cir. 1967); Thabet Mfg. Co. v. Kool Vent Metal Awning Corp., 226 F.2d 207 (6th Cir. 1955). The judgment of the District Court is reversed and the case is remanded for entry of an order dismissing the complaint on the ground that both patents at issue are invalid.

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HIPPODROME OLDSMOBILE, INC., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. No. 72-1375. United States Court of Appeals, Sixth Circuit. Argued Dec. 7, 1972. Decided Feb. 27, 1973. Louis A. Bradbury, Atty., Tax Div., Dept, of Justice, Washington, D. C., for defendant-appellant; Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwaeks, Daniel B. Rosenbaum, Attys., Tax Div., Dept. of Justice, Washington, D. C., on brief; Charles H. Anderson, U. S. Atty., Nashville, Tenn., of counsel. W. W. Berry, Nashville, Tenn., for plaintiff-appellee; James H. Cheek, III, Bass,- Berry & Sims, Nashville, Tenn., on brief. Before EDWARDS and LIVELY, Circuit Judges, and McALLISTER, Senior Circuit Judge. EDWARDS, Circuit Judge. This case presents the question as to whether under a 1962 amendment to the Internal Revenue Code a corporate taxpayer may deduct as ordinary and necessary business expenses the depreciation and expenses of a pleasure boat, when concededly the company customers entertained thereon were not subjected to any specific exposure to taxpayer’s products or suggestion that they buy them while being thus entertained. The District Judge who heard the taxpayer’s suit for refund of taxes paid under protest found these facts: (1) A number of automobile agencies in Nashville owned boats for the purpose of entertaining past and future customers, to obtain business. This practice was an accepted business procedure in this area. (2) This was a method of competition for business between automobile agencies. (3) The accepted method while utilizing these craft with guests thereon was the use of the “soft sell.” The representative of the automobile agency would not initiate business conversation but would wait for the guests to mention the product of the host. As a practical matter, there was an unspoken awareness of the reason for the entertainment. (4) This business tactic was, from an economic standpoint, very successful. In fact, during the taxable years when the corporate taxayer spent the total sum for the three-year period of slightly more than $11,000, it made direct sales during the same three years to the persons so entertained of $180,-988.11, plus $91,232.11 in subsequent years. The amount of sales does not include sales to persons influenced by the guests. He held that the use of the boat for taxpayer’s “soft sell” entertainment of customers was an “ordinary and necessary business expense” within the meaning of that language in 26 U.S.C. § 162 (1970), and that it also was deductible under the language of 26 U.S.C. § 274 (1970), Int.Rev.Code of 1954, D.C., 339 F.Supp. 826. We reverse. At the outset we accept the above-noted facts as found by the District Judge. We also recognize that expenses at issue on this appeal would probably have been treated as deductible prior to 1962. In that year, however, Congress gave searching attention to claimed abuses of the business expense deduction. The statute finally adopted contains this language: (B) Facility. — With respect to a facility used in connection with an activity referred to in subparagraph (A), unless the taxpayer establishes that the facility was used primarily for the furtherance of the taxpayer’s trade or business and that the item was directly related to the active conduct of such trade or business, 26 U.S.C. § 274(a)(1)(B) (1970). We see no need to plant our decision upon the regulations adopted under § 274(a)(1)(B), upon which the government strongly relies, or upon the government’s claims of failure of taxpayer properly to substantiate his claims under certain of those regulations. The plain language of § 274 which we have quoted bars a tax deduction for the type of “soft sell” entertainment described by the District Judge. We hold as a matter of law that the deductions claimed by the taxpayer for the entertainment of customers shown in this record were not “directly related to . . . the active conduct of the taxpayer’s . . . business.” The entertainment activities on the corporate taxpayer’s boat (a 45 foot Chris Craft, Corvair) were, of course, a wholly legitimate method of developing business good will. The District Judge found: “This business tactic was, from an economic standpoint, very successful.” Since the District Judge also found that “This practice was an accepted business procedure in this area. . . . [and] a method of competition . . between . . . agencies,” it may well be regarded by the taxpayer as a practice which is either desirable or necessary for it to continue as a mater of sound business judgment. Our question, however, is not the legitimacy of the business practice. In this appeal we deal only with the question of whether expenses for such general good will type of entertainment are subject to deduction for income tax purposes under the terms of the 1962 amendments. If the words “directly” and “active” in the key statutory phrase quoted above did not of themselves serve to bar such general good will entertainment as this record discloses (and as indicated above, we think they do), then the legislative history of the debate on the 1962 amendment serves to indicate a clear Congressional intent that general good will entertainment could no longer be deducted as a business expense. 26 U.S.C. § 274(a)(1)(B) (1970) as finally adopted was the result of a controversy between the House and the Senate over how restrictive the legislation should be. In its March 18,1962, Report to the House on § 274, the Ways and Means Committee staked out its posi-' tion: With respect to expenses for entertainment activities, the bill provides that a deduction will be allowed only to the extent that the taxpayer establishes that the expense was directly related to the active conduct of his trade or business. This means that the taxpayer must show a greater degree of proximate relation between the expenditure and his trade or business than is required under present law. Among other things he will have to show more than a general expectation of deriving some income at some indefinite future time from the making of the entertainment-type expenditure ; however, he will not .be required to show that income actually resulted from each and every expenditure for which a deduction is claimed. If the expenditure is for entertainment which occurs under circumstances where there is little or no possibility of conducting business affairs or carrying on negotiations or discussions relating thereto, the expenditure will generally be considered not to have been directly related to the active conduct of business. H.R.Rep.No.2508, 87th Cong., 2d Sess. 19 (1962). The response of the Senate Finance Committee termed the House proposal too. harsh and proposed to amend it by allowing “entertainment expenses associated with the active conduct of a trade or business.” Your committee’s bill to a considerable degree retains the basic structure of the House bill. However, the effect of the principal provision (the disallowing of a deduction for certain entertainment expenses) has been modified to permit the deduction of expenses for goodwill where a close association is established between the expense and the active conduct of a trade or business. The report of the Committee on Ways and Means made it clear that the House bill was not designed to disallow completely deductions for entertainment, amusement or recreation expenses, but rather it was intended to eliminate abuses. Under the general rule, no deduction would be allowed for any such expenses except to the extent that such expenses are directly related to the active conduct of a trade or business. Despite the clear language of the House bill and the stated intent of the provision, considerable uncertainty and confusion as to the actual effect of the House draft has been created by the interpretation given this language in the House committee report. It in effect interprets the proposed statutory language to disallow a deduction for any expense for entertainment, amusement, or recreation unless the expense is described in one of a series of specific exceptions to the general rule. Where the expense is covered by an exception, the rules of existing law would continue to govern the deductibility of the expense. To eliminate the harshness resulting from the House report, amendment of the language of the House bill is necessary. Despite amendment of the House bill your committee has made certain that entertainment expense abuses are eliminated. By your committee’s amendment an alternative rule is added to the House bill under which expenses for entertainment, amusement, or recreation (with respect to both activities and facilities) also will be deductible to the extent that such expenses are associated with the active conduct of a trade or business. This new language will permit deduction of expenses for entertainment, amusement, or recreation incurred for the creation or maintenance of business goodwill without regard to whether a particular exception applies. However, this new language will apply only if the taxpayer demonstrates a clear business purpose and shows a reasonable expectation of deriving some income or other benefit to his business as a result of the expenditure. If he meets this test, the expenditure will be considered to be associated with the active conduct of his trade or business; otherwise, the expense will be disallowed under your committee’s amendment. S.Rep.No.1881, 87th Cong., 2d Sess. 26, 27 (1962). (Emphasis added.) If the language employed above by the Senate Finance Committee did not serve to show that it intended to continue to allow deduction of expenses “for entertainment . . . for the creation or maintenance of business good will,” such as is involved in this case, one of the Committee’s examples certainly did: For example, if the taxpayer acquires a fishing camp which he uses almost exclusively for entertaining business guests, deduction of the expenses of the camp will be disallowed only to the extent that it was used for personal or other nonbusiness purposes. On the other hand, if he uses it almost exclusively for personal purposes, but occasionally takes business guests to the camp no deduction is to be allowed. S.Rep.No.1881, 87th Cong.2d Sess. 32 (1962). The report of the Joint Conference Committee shows that the Senate won on one issue but lost on the issue here presented. The Conference Committee added the “associated with” language to § 274(a)(1)(A) dealing with entertainment “directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise).” But the Senate receded and accepted the House proposal as to § 274(a)(1)(B) applicable to general entertainment expenses or facilities (not directly associated with a business meeting or convention) such as we deal with in this appeal: DISALLOWANCE OF CERTAIN ENTERTAINMENT, ETC., EXPENSES Amendments Nos. 29, 30, and 31: The bill as passed by both the House and the Senate adds a new section 274 to the code (relating to disallowance of certain entertainment, etc., expenses). Section 274(a)(1) as passed by the House provided that no deduction otherwise allowable under chapter 1 of the code is to be allowed for any item — ■ (1) with respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation, unless the taxpayer establishes that the item was directly related to the active conduct of the taxpayer’s trade or business, or (2) with respect to a facility used in connection with such an activity, unless the taxpayer establishes that the facility was used primarily for the furtherance of the taxpayer’s trade or business and that the item was directly related to the active conduct of such trade or business, and such deduction is in no event to exceed the portion of such item directly related to the active conduct of the taxpayer’s trade or business. Senate amendments Nos. 29, 30, and 31 inserted .the words “or associated with” after the words “directly related to” each place they appeared in the new section 274(a)(1) as passed by. the House. Under the conference agreement the House recedes on Senate amendment No. 29 with an amendment providing that deductions otherwise allowable under chapter 1 of the code shall not be allowed for any item with respect to an entertainment type activity “unless the taxpayer establishes that the item was directly related to, or, in the ease of an item directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise), that such item was associated with,” the active conduct of the taxpayer’s trade or business. Under the conference agreement, the Senate recedes on amendment No. 30, and the House recedes on amendment No. 31 with an amendment conforming to the action on amendment No. 29. The rule of the House bill as described in the report of the Committee on Ways and Means is more strict than the “or associated with” rule of the Senate amendment. The rule of the House bill would not allow deduction of expenditures for entertainment occurring under circumstances where there is little or no possibility of conducting business affairs or carrying on negotiations or discussions relating thereto, such as where the group of persons entertained is large or the distractions substantial. It is the understanding of the conferees, both on the part of the House and the Senate, that the alternative Senate “or associated with” test as described in the report of the Finance Committee would apply to certain entertaining primarily to encourage goodwill where the evidence of business connection is clear, whether or not business is actually transacted or discussed during the entertainment. The conference agreement would permit a deduction for the cost of an entertainment item, even though the item is not directly related to the active conduct of the taxpayer’s trade or business. If the item is associated with it, so long as the entertainment activity directly precedes or follows a substantial and bona fide business discussion. The conditions under which an item is “associated with” the active conduct of a trade or' business are contained in the report of the Committee on Finance. The deductibility of other items of entertainment expense, as well as items with respect to facilities, would be governed by the rule of the House bill. Section 274(a) as agreed to by the conferees will allow as a deduction the cost of entertaining connected with what are primarily business meetings. For example, if the taxpayer conducts substantial negotiations with a group of business associates and that evening entertains the group and their wives at a restaurant, theater, concert, or , sporting event, such entertainment expenses, if associated with the active conduct of the taxpayer’s business, will be deductible even though the purpose of the entertainment is merely to promote goodwill in such business. Moreover, if a group of business associates with whom the taxpayer is conducting business meetings comes from out of town to the taxpayer’s place of business to hold substantial business discussions, the entertainment of such business guests by the taxpayer the evening prior to the business discussions will be regarded as directly preceding the business discussions. Similarly, if in between, or in the evenings after, business meetings at a convention, the taxpayer entertains his business associates or prospective customers attending such meetings (and their wives), such entertainment will be considered as directly preceding or following a business discussion. Any entertainment which is a part of substantial and bona fide business discussions, where the conduct of business is the principal activity during the combined entertainment and business time spent together by the taxpayer and the person or persons entertained, will be deductible if the expense is associated with the active conduct of the taxpayer’s trade or business. H.Conf.Rep.No.2508, 87th Cong., 2d Sess. 16 (1962). The House Ways and Means Committee which prevailed on the § 274(a)(1) (B) issue, of course, previously made its purpose clear: Your committee’s bill is designed to eliminate the abuses which have developed in this area. The bill provides new rules which, in general, would: (1) disallow a deduction with respect to entertainment activities, except to the extent that the expense is directly related to the active conduct of a trade or business; (2) disallow a deduction with respect to entertainment facilities, unless the facility is used primarily for the furtherance of the taxpayer’s trade or business and the expense is directly related to the active conduct of the trade or business; * * * * * -X- This means that the taxpayer must show a greater degree of proximate relation between the expenditure and his trade or business than is required under present law. Among other things he will have to show more than a general expectation of deriving some income at some indefinite future time from the making of the entertainment-type expenditure; however, he will not be required to show that income actually resulted from each and every expenditure for which a deduction is claimed. If the expenditure is for entertainment which occurs under circumstances where there is little or no possibility of conducting business affairs or carrying on negotiations or discussions relating thereto, the expenditure will generally be considered not to have been directly related to the active conduct of business. H.R.Rep.No.2508, 87th Cong., 2d Sess. 18, 19 (1962). Additionally, subsequent to the adoption of § 274(a) (1) (B) the Treasury Department adopted regulations under 26 U.S.C. § 274(h) which serve to reinforce the views we have expressed above. See Regs. 26 C.F.R. § 1.274-2, and more particularly subdivisions 1.274-2(c) (3) (i), (ii) and (iii) (1972). Subdivision (iii) specifically provides: The active conduct of trade or business is considered not to be the principal character or aspect of combined business and entertainment activity on . . . yachts and other pleasure boats unless the taxpayer clearly establishes to the contrary. 26 C.F.R. § 1.274-2(c)(3)(iii) (1972). This regulation and its subdivisions have been upheld and applied in Fiorentino v. Commissioner, 29 T.C.M. 1445 (1970), aff’d in open court, 455 F.2d 1406 (2d Cir. 1971); Andress v. Commissioner, 51 T.C. 863 (1969), aff’d per curiam, 423 F.2d 679 (5th Cir. 1970). The District Judge did not discuss or make any finding concerning this subdivision. Under the view we take of this appeal, reliance on this regulation is not required. If it were, however, we would hold that under this record the taxpayer had failed clearly to establish the contrary of the presumption. We note, of course, that appellee relies upon language contained in § 1.274-2(e) (3) (ii). But appellee fails to note that even if the activity which led to these claims for deduction did satisfy subdivision (ii) under the regulation, it also had to meet “all the requirements of subdivisions (i), (ii), (iii) and (iv).” 26 C.F.R. 2(a)(3) (1972). Our review of. those subdivisions convinces us that appellee’s entertainment activity passed the tests of none of them. We shall, however, comment specifici-cally upon the language relied upon by appellee which we emphasize below: “the taxpayer actively engaged in a business meeting, negotiation, discussion, or other bona fide business transaction, other than entertainment, for the purpose of obtaining such income or other specific trade or business benefit . . . ” 26 C.F.R. 1.274-2 (c) (3)(ii) (1972). (Emphasis added.) In the context of this regulation we do not see how the language “bona fide business transaction, other than entertainment” can be said to fit a trip on a yacht or boat where past or prospective automobile customers are entertained where, as the District Judge found, “the representative of the automobile agency would not initiate business conversation but would wait for the guests to mention the product of the host.” Under the language of § 274 (a)(1)(B) and its legislative intent as set out above, the corporate taxpayer which claims a deduction for entertainment not covered by § 274(a)(1)(A) must in meeting the statutory requirements show a definable business purpose for the occasion (other than creation of general good will) and unilateral control (absent unforeseen circumstances) over whether the business purpose is carried out. The judgment of the District Court is vacated and the case is remanded for entry of an order dismissing the complaint.

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UNITED STATES of America, Plaintiff-Appellee, v. Robert Bill HAYES, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Neil Eugene MEICKE, Defendant-Appellant. Nos. 72-3009, 72-3010. United States Court of Appeals, Ninth Circuit. March 5, 1973. Frederic F. Kay, Asst. Federal Public Defender (argued), Tom Karas, Federal Public Defender, Michael P. Callahan (argued), Tucson, Ariz., for defendants-appellants. William C. Smithermen, U. S. Atty. (argued), Sarah Ann Bailey, Asst. U. S. Atty., Tucson, Ariz., for plaintiff-appel-lee. Before: ELY and TRASK, Circuit Judges, and EAST, District Judge. Honorable William G. East, Senior United States District Judge, District of Oregon, sitting by designation. TRASK, Circuit Judge: Appellants were convicted of possessing, with intent to distribute, approximately 18 pounds of marijuana in violation of 21 U.S.C. § 841(a)(1). They contend that the district court erred in denying their motion to suppress evidence, marijuana found inside their Volkswagen van. In addition, appellants attack the fine imposed upon them as an improper sentence under the Federal Youth Corrections Act. 18 U.S.C. §§ 5005-5026. We conclude that the government agents had probable cause to search the van when they discovered it parked on the side of the highway. They had discovered marijuana seeds on the floor of the van at the initial border crossing. In addition, the van had disappeared from the main highway in a notorious drug smuggling area. Finally, appellants consented to open the van’s door for the agents who were able to get a plain view of a burlap bag containing what appeared to be brick-shaped objects as the door opened. Appellants were committed to the custody of the Attorney General for treatment and supervision under the Federal Youth Corrections Act. 18 U.S.C. § 5010(b). The court also imposed a fine of $2,000 on appellant Hayes and $1,000 on appellant Meicke. Appellants contend that their fines are inconsistent with the sentences they received under the Federal Youth Corrections Act and are illegal. Appellants correctly assert that the Act does not provide for a fine when a youth offender is committed under the Act. The government argues, however, that commitment under section 5010(b) of the Act is expressly in lieu of the penalty of imprisonment otherwise provided by law. Since the penalty for violation of 21 U.S.C. § 841(a)(1) is “. . . a term of imprisonment of not more than 5 years, a fine of not more than $15,000, or both,” the argument is that the Youth Corrections Act sentence is in lieu of only the imprisonment penalty leaving open the fine of “. . . not more than $15,000, or both.” On its face section 5010(b) does not necessarily foreclose other penalties such as fines under other applicable penalty provisions. Section 5010(b) provides: “If the court shall find that a convicted person is a youth offender, and the offense is punishable by imprisonment under applicable provisions of law other than this subsection, the court may, in lieu of the penalty of imprisonment otherwise provided by law, sentence the youth offender to the custody of the Attorney General for treatment and supervision pursuant to this chapter until discharged by the Division as provided in section 5017(c) of this chapter An early model for the Federal Youth Corrections Act was drafted in 1942 by the Judicial Conference of the Committee on Punishment for Crime. The sentencing provision provided that: “[T]he court may, as a penalty for the offense and in lieu of the penalty otherwise provided by law, sentence the youth offender to the custody of the Authority for treatment and supervision until discharged by the Authority as provided in this Title.” Draft of an Act Recommended by the Committee to Provide a Correctional System for Adult and Youth Offenders Convicted in Courts of the United States, tit. Ill, § 1(a). It is not clear why the equivalent provision under the Federal Youth Corrections Act, which was adopted in 1950, specified that sentencing under 5010(b) is in lieu of the penalty of imprisonment. There is no indication that Congress intended by such language to make fines permissible in conjunction with a sentence committing a youth offender for rehabilitative treatment. The construction of the Act urged by the government is inconsistent with the rehabilitative policy and purpose of the Act. The Act seeks to “substitute for retributive punishment methods of training and treatment designed to correct and prevent anti-social tendencies. It departs from the mere punitive idea of dealing with criminals and looks primarily to the objective idea of rehabilitation.” H. R.Rep.No.2979, 81st Cong., 2d Sess. 4 (1950), in 2 U.S.Code Cong.Serv. pp. 3983, 3985 (1950). We have pointed out elsewhere that section 5010 “. . . gives a judge three choices at the time for sentencing a youth offender. He may place the latter on probation (§ 5010(a)), sentence him to the custody of the Attorney ■ General for treatment and supervision, (§§ 5010(b), (c)), or sentence him as an adult (§ 5010(d)).” Cherry v. United States, 299 F.2d 325, 326 (9th Cir. 1962). There is certainly nothing to indicate that the judge may select any combination thereof. The Federal Youth Corrections Act is an alternative sentencing provision. At the discretion of the judge a youth offender deemed treatable under the Act can be sentenced to treatment rather than punishment under the applicable penalty provision provided by law. A combination of rehabilitative treatment and retributive punishment is not intended and is improper. See United States v. Waters, 141 U.S.App.D.C. 289, 437 F.2d 722, 726 (1970). We conclude that a judge electing to commit a youth offender for treatment and supervision under the alternative sentencing provisions of the Federal Youth Corrections Act is foreclosed from imposing an additional punitive penalty under another provision. The convictions are affirmed but the fines imposed are vacated. . See generally Robert McNamara, Jr., The Federal Youth Corrections Act: Past Concern in Need of Legislative Reappraisal, 11 Am.Crim.L.Rev. 229 (1972).

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Richard Dewayne McCLOUD, Appellant, v. V. Lee BOUNDS, Director of North Carolina Dept. of Corrections, Appellee. No. 71-1908. United States Court of Appeals, Fourth Circuit. Argued Dec. 8, 1972. Decided March 16,1973. Michael K. Curtis, Greensboro, N. C., court-appointed (Smith, Patterson, Fol-lín & Curtis, Greensboro, N. C., on brief), for appellant. Edwin M. Speas, Jr., Associate Atty. N. C., Raleigh, N. C. (Robert Morgan, Atty. Gen. N. C., Jacob L. Safron, Asst. Atty. Gen. N. C., on brief), for appellee. Before HAYNSWORTH, Chief Judge, BOREMAN, Senior Circuit Judge, and WINTER, Circuit Judge. WINTER, Circuit Judge: Richard Dewayne McCloud, a North Carolina state prisoner, appeals from the district court’s denial of habeas corpus relief. Convicted on charges of safe-cracking, possession of burglary tools, breaking and entering, larceny, and receiving stolen property, he asserted that the state’s primary evidence against him was a confession, that the police obtained his confession as a direct fruit of an illegal search, and that it was therefore inadmissible under Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963). The district court held that the confession was the product of “an intervening independent act of free will” which dissipated the taint of the illegal search. We cannot agree. We conclude that the district court’s finding was clearly erroneous and accordingly reverse and direct the writ to issue. I. During the evening of March 27-28, 1969, a church in Greensboro, North Carolina was burglarized. At 3:25 that morning, the police chased and apprehended a car driven by Jack Jordan. His unidentified passenger eluded capture. The police found proceeds of the church burglary and burglar’s tools in Jordan’s car. At 5:00 that morning, the police awoke McCloud at a motel where he was staying with his girlfriend. They inquired if he knew Jordan, who was registered in a nearby room. McCloud replied affirmatively. Although the policemen had no warrant, they began to search McCloud’s room. When McCloud objected, they left. The police soon returned, still without a warrant, arrested McCloud and the girl for occupying a room for immoral purposes, and completed their search of the room. Among the items seized in McCloud’s motel room was a peculiarly identifiable coin collection, which had been taken from the home of one Hill in Virginia. On direct appeal, the Supreme Court of North Carolina held, and the state here concedes, that the police had neither a warrant nor probable cause for the search, seizure, and arrest, and that they were therefore illegal. Later on the 28th, McCloud’s bond was fixed at $75,000, an amount which he could not obtain. After administering Miranda warnings, the police questioned him for thirty minutes without result. McCloud remained in jail during the ensuing weekend. On March 31, the police again advised McCloud of his constitutional rights and resumed questioning him. This interrogation lasted about three hours. During this session, the interrogating officers sent Mc-Cloud’s girlfriend and Jordan into the interrogation room to persuade him to confess. Then Officer Welch referred to the illegally seized coin collection and told McCloud that Hill, from whose home it had been stolen, was waiting in the next room to identify the collection. According to Officer Melton’s testimony, McCloud then “made the statement that if we would bring the man in there and he identified the coins that he would tell us all about the burglary and any other burglaries that we wanted to ask him about.” The coins were brought in and Hill demonstrated to McCloud that he could identify them. McCloud then confessed to the Greensboro church burglary, the Hill burglary, and other burglaries. II. In Wong Sun, the Supreme Court held that the “fruit of the poisonous tree” doctrine, which forbids putting illegally seized evidence to any use, applies to verbal as well as tangible evidence. 371 U.S. at 485, 83 S.Ct. 407. See Silverthorne Lumber Co. v. United States, 251 U.S. 385, 392, 40 S.Ct. 182, 64 L.Ed. 319 (1920). Thus, if the police use illegally seized evidence to induce or trigger a confession, the confession is not admissible against one who has standing to complain of the illegal search. United States v. Marrese, 336 F.2d 501, 504 (3 Cir. 1964); United States v. Rachel, 360 F.2d 858, 861 (7 Cir. 1966). See Fahy v. Connecticut, 375 U.S. 85, 89-91, 84 S.Ct. 229, 11 L.Ed.2d 171 (1963). The test for determining the admissibility of the confession is “whether,- granting establishment of the primary illegality, the evidence . has been come at by exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint.” Wong Sun, 371 U.S. at 488, 83 S.Ct. at 417, quoting Maguire, Evidence of Guilt, 221 (1959). In Wong Sun, the police arrested Wong Sun without probable cause. He was arraigned and then released on his own recognizance. Several days later, he returned to police headquarters, was interrogated, and made an incriminating statement. The Court held that this statement was not inadmissible fruit of Wong Sun’s illegal arrest because: “On the evidence that Wong Sun had been released on his own recognizance after a lawful arraignment, and had returned voluntarily several days later to make the statement, we hold that the connection between the arrest and the statement had ‘become so attenuated as to dissipate the taint.’ ” 371 U.S. at 491, 83 S.Ct. at 419, quoting Nardone v. United States, 308 U.S. 338, 341, 60 S.Ct. 266, 84 L.Ed. 307 (1939). See United States v. Close, 349 F.2d 841 (4 Cir. 1965), cert. denied 382 U.S. 992, 86 S.Ct. 573, 15 L.Ed.2d 479 (1966). In the instant ease, the state urges the court to conclude that Mc-Cloud was, in effect, an “honest thief.” The state posits that McCloud’s expression of willingness to confess if Hill identified the coins was a voluntary sporting “wager” which he honorably lost, and that this “wager” constituted an independent intervening act of free will which dissipated the taint of the illegal search. However, the facts do not support this imaginative scenario. Unlike Wong Sun, McCloud had not been released from jail. He did not return voluntarily to make a statement. The police had been interrogating him for three hours. They had Hill waiting in the next room. They knew Hill could identify the coin collection. They confronted McCloud with Hill, with the illegally seized coins and with Hill’s identification of them, strong links to the Virginia burglary. While McCloud conditioned his confession on Hill’s ability to identify the illegally seized coins, the totality of the circumstances belies the conclusion that McCloud, twice-convicted of burglary, voluntarily risked prison to comply with a so-called “voluntary wager.” McCloud’s statement, whether a wager or an expression of resignation, was hardly an intervening independent act of free will which dissipated the taint of the illegal search. Rather, McCloud’s confession was “come at by exploitation” of the illegally seized coins, and therefore was inadmissible. Fahy, 375 U.S. at 90-91, 84 S.Ct. 229; Jacobs v. Warden, Maryland Penitentiary, 367 F.2d 321, 323 (4 Cir. 1966); Young v. State of Maryland, 455 F.2d 679, 684-685 (4 Cir.) (Sobeloff, J., dissenting), cert. denied 407 U.S. 915, 92 S.Ct. 2450, 32 L.Ed.2d 691 (1972); Amador-Gonzalez v. United States, 391 F.2d 308, 318 (5 Cir. 1968); Barnett v. United States, 384 F.2d 848, 861-862 (5 Cir. 1967). See Hall v. Warden, 313 F.2d 483, 490 (4 Cir. 1963) (in banc); Ruiz v. Craven, 425 F.2d 235 (9 Cir. 1970). See also Har-ney v. United States, 407 F.2d 586 (5 Cir. 1969). Nothing in Close, supra, compels a contrary conclusion. Close refused to apply Wong Sun to statements which the defendant made to an F.B.I. agent while in a state jail following an allegedly illegal state arrest on another matter. The statements consisted of an alibi, which was later contradicted at trial. We held the statement admissible. We construed Wong Sun to hold that “a statement which is shown to have been freely and voluntarily made without coercion, either physical or psychological, may be thereby purged of any stigma of illegality .. . .” 349 F.2d at 851. See Rogers v. United States, 330 F.2d 535, 540-542 (5 Cir.), cert. denied 379 U.S. 916, 85 S.Ct. 265, 13 L.Ed.2d 186 (1964). And we found “abundant evidence” that the statements were “freely and voluntarily made.” 349 F.2d at 851. In the instant case, the only evidence of voluntariness is the state’s rather imaginative post hoc explanation of McCloud’s statement. The controlling fact is that the police officers confronted McCloud with the tainted coins and used them, and evidence derived from them, to induce his confession. The manifest causal relationship between the coins and McCloud’s confession is the dispositive factor which distinguishes this case from those holding that mere detention following an illegal arrest does not necessarily operate to exclude a voluntary confession made during that detention. III. The judgment of the district court is therefore reversed and the case is remanded with directions to issue the writ. Its effect may, of course, be stayed for a reasonable period to permit the state to try McCloud anew if the state be so advised. Reversed. . State v. McCloud, 276 N.C. 518, 173 S.E.2d 753 (1970). . The bond was set at this high amount because McCloud had a record of two burglary convictions and because the police suspected him of a whole skein of burglaries. . McCloud denied saying “anything like that.” Officer Welch’s version of the events corresponds substantially with Officer Melton’s: He [McCloud] stated that if . Mr. Hill would step in there and identify some money, he would tell us anything. After Jordan went out and I talked to him further, that is when he stated that if Mr. Hill could identify the merchandise he would tell us anything we wanted to know. . The state has not challenged the applicability of Wong Sim to the states. The Supreme Court has indicated that Wong Sun’s exclusionary rule is constitutionally grounded and therefore applicable to the states. Fahy v. Connecticut, 375 U.S. 85, 90-91, 84 S.Ct. 229, 11 L.Ed.2d 171 (1963). See Traub v. Connecticut, 374 U.S. 493, 83 S.Ct. 1899, 10 L.Ed.2d 1048 (1963) (Per Curiam); Jacobs v. Warden, Maryland Penitentiary, 367 F.2d 321, 323 (4 Cir. 1966); Young v. State of Maryland, 455 F.2d 679, 683 (4 Cir.) (Sobeloff, J., dissenting on other grounds), cert. den. 407 U.S. 915, 92 S.Ct. 2450, 32 L.Ed.2d 691 (1972); United States v. Myers, 398 F.2d 896, 899 (3 Cir. 1968); Ruiz v. Craven, 425 F.2d 235, 236 (9 Cir. 1970); Phelps v. Decker, 401 F.2d 232, 235 n. 7 (5 Cir. 1968) and cases cited therein. Cf. Parker v. North Carolina, 397 U.S. 790, 796, 90 S.Ct. 1458, 25 L. Ed.2d 785 (1970). Note however that doubt has been expressed as to whether this issue has been definitively settled. Clewis v. Texas, 386 U.S. 707, 711 n. 7, 87 S.Ct. 1338, 18 L.Ed.2d 423 (1967) (expressly reserving the question); Outing v. State of North Carolina, 383 F.2d 892, 918-919 (4 Cir. 1967) (Kaufman, District Judge, dissenting); Ralph v. Pepersack, 335 F.2d 128, 136 n. 11 (4 Cir. 1964). . Wong Sun, 371 U.S. at 486 n. 12, 83 S.Ct. 407, and cases cited therein, point out that not every voluntary act is sufficient to cure an unlawful acquisition of evidence, but in Close, we thought the voluntary act sufficient. . See Close, supra; Mefford v. Warden, 413 F.2d 439 (4 Cir. 1969) (Per Curiam), vacated on other grounds, 408 U.S. 935, 92 S.Ct. 2856, 33 L.Ed.2d 750 (1972), aff’g, 270 F.Supp. 745 (D.Md.1967); Thompson v. Warden, 413 F.2d 454 (4 Cir. 1969) (Per Curiam), cert. denied 397 U.S. 950, 90 S.Ct. 972, 25 L.Ed.2d 131 (1970); Rogers, supra. But see Gatlin v. United States, 117 U.S.App.D.C. 123, 326 F.2d 666, 672 (1963) and United States v. Burhannon, 388 F.2d 961 (7 Cir. 1968), supporting the view that an illegal arrest necessarily operates to exclude a confession made during subsequent detention.

f2d_474/html/0971-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Eugene A. WAHL and Vibra Screw, Inc., Plaintiffs-Appellants, v. VIBRANETICS, INC., Defendant-Appellee. No. 72-1661. United States Court of Appeals, Sixth Circuit. Argued Dec. 13, 1972. Decided March 2, 1973. Dugald S. McDougall, Chicago, Ill., J. Leonard Walker, Louisville, Ky., Dugald S. McDougall, Chicago, Ill., on brief for plaintiffs-appellants; Percy Foreman, Houston, Tex., of counsel. Thomas F. McWilliams, Chicago, Ill., for defendant-appellee, M. Brooks Senn, Louisville, Ky., Thomas F. McWilliams, Chicago, Ill., on brief for defendant-appellee; Brown, Miller, Alagia & Senn, Louisville, Ky., Mann, Brown, McWilliams & Bradway, Chicago, Ill., of counsel. Before MILLER and KENT, Circuit Judges, and O’SULLIVAN, Senior Circuit Judge. KENT, Circuit Judge. On March 16, 1965, plaintiff Wahl [the parties will be referred to as in the court below] was granted Patent No. 3,173,583 on a “bin activator,” a device which attaches to the bottoms of storage bins or hoppers and by imparting vibrations to the hoppers or bins, facilitates the flow of powdered, granular, pulverized or like material out of the bins or hoppers. On November 1, 1965, plaintiffs commenced an action against Carrier Manufacturing Co., Inc. in the United States District Court for the Southern District of Indiana, alleging infringement óf that patent. Trial of the case commenced on November 6, 1967, and continued through November 14, 1967, when it was adjourned until August 19, 1968, to enable the plaintiffs to prepare rebuttal to the proofs offered by the defendant. Such proofs were offered on August 19, 1968. On November 5, 1969, United States District Judge William E. Steckler, Chief Judge of the Southern District of Indiana, entered judgment for the defendant, after concluding that the patent in suit was invalid. The judgment of the District Court was affirmed, Wahl v. Carrier Mfg. Co., 452 F.2d 96 (7th Cir. 1971), and the application for certiorari was denied, 405 U.S. 990, 92 S.Ct. 1255, 31 L.Ed.2d 457 (1972). On December 18, 1970, after judgment of invalidity had been entered in the District Court for the Southern District of Indiana, the present suit for infringement of the same patent was filed in the United States District Court for the Western District of Kentucky. The defendant filed a timely answer claiming invalidity and lack of infringement, and on December 21, 1971, amended its answer to include a claim that the plaintiffs were estopped from suing for infringement by the prior Indiana judgment of invalidity. Subsequently, defendant filed a motion for summary judgment based upon the same claim of estoppel. The claim of estoppel relies upon the doctrine announced by the Supreme Court in Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). In support of its motion for summary judgment, based upon estoppel, the defendant attached a copy of the transcript (1,300 pages) and record of the litigation in the United States District Court for the Southern District of Indiana, and a certified copy of the 600-page appendix, filed in the United States Court of Appeals for the Seventh Circuit. Plaintiffs filed nothing in opposition to the motion for summary judgment except a reply which alleged various deficiencies and errors in the Indiana litigation, which plaintiff claimed made the application of the Blonder-Tongue doctrine inappropriate. The District Judge examined the transcript and record of the Indiana litigation and granted the motion for summary judgment. From that action this appeal is taken. In this Court plaintiffs claim to be entitled to a trial to determine whether there were deficiencies in the prior Indiana litigation which would remove the instant case from the application of the doctrine enunciated in Blonder-Tongue. At the outset we point out that plaintiffs’ entire reliance is on the pleadings and that nothing in support of such pleadings has ever been filed. Rule 56(e), Rules of Civil Procedure, provides in part: “When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.” Plaintiffs not only did not respond by affidavit or otherwise to the defendant’s motion for summary judgment in any manner contemplated by Rule 56(e), but filed only a reply which does not “set forth specific facts showing that there is a genuine issue for trial,” as required by Rule 56(e). We are, therefore, only concerned with one issue: Was summary judgment appropriate under the circumstances of this case ? In Triplett v. Lowell, 297 U.S. 638, 56 S.Ct. 645, 80 L.Ed. 949 (1936), in discussing estoppel in patent litigation, the Supreme Court said at page 644, 56 S.Ct. at page 648: “We conclude that neither the rules of the common law applicable to successive litigations concerning the same subject matter, nor the disclaimer statute, precludes relitigation of the validity of a patent claim previously held invalid in a suit against a different defendant.” In discussing the Triplett rule in Blonder-Tongue, the Supreme Court said: “Thus, we conclude that Triplett should be overruled to the extent it forecloses a plea of estoppel by one facing a charge of infringement of a patent that has once been declared invalid.” 402 U.S. at 350, 91 S.Ct. at 1453. The Court, however, made it clear that mere prior adjudication of invalidity in and of itself would not necessarily require a termination of a subsequent lawsuit between different parties. In that connection the Court stated: “Moreover, we do not suggest, without legislative guidance, that a plea of estoppel by an infringement or royalty suit defendant must automatically be accepted once the defendant in support of his plea identifies the issue in suit as the identical question finally decided against the patentee or one of his privies in previous litigation. Rather, the patentee-plaintiff must be permitted to demonstrate, if he can, that he did not have ‘a fair opportunity procedurally, substantively and evidentially to pursue his claim the first time.’ Eisel v. Columbia Packing Co., 181 F.Supp. 298, 301 (Mass. 1960). This element in the estoppel decision will comprehend, we believe, the important concerns about the complexity of patent litigation and the posited hazard that the prior proceedings were seriously defective. Determining whether a patentee has had a full and fair chance to litigate the validity of his patent in an earlier case is of necessity not a simple matter. In addition to the considerations of choice of forum and incentive to litigate mentioned above, certain other factors immediately emerge. For example, if the issue is nonobviousness, appropriate inquiries would be whether the first validity determination purported to employ the standards announced in Graham v. John Deere Co., [383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545] supra; whether the opinions filed by the District Court and the reviewing court, if any, indicate that the prior ease was one of those relatively rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit; and whether without fault of his own the patentee was deprived of crucial evidence or witnesses in the first litigation. But as so often is the case, no one set of facts, no one collection of words or phrases, will provide an automatic formula for proper rulings on estoppel pleas. In the end, decision will necessarily rest on the trial courts’ sense of justice and equity.” 402 U.S. at 332-334, 91 S.Ct. at 1444 (footnotes omitted). Boutell v. Volk, 449 F.2d 673, 678 (10th Cir. 1971) the test was summarized as follows: “Blonder-Tongue . . . [simply held] that adjudication of invalidity of a patent following a full and fair hearing in which the defender of the patent had an adequate opportunity to present his case in support of validity would be final.” It is apparent from these quotations that there must be something more than proof of existence of prior litigation of the same patent, resulting in an adjudication of infringement, before a patentee may be foreclosed from trial of a subsequent action involving the same patent. Under the principles announced, necessarily, there must be a balancing of the equities on a case by case basis. Plaintiffs’ first contention is that the District Court for the Southern District of Indiana, the Court of Appeals for the Seventh Circuit, and, by implication, the Supreme Court of the United States, when it denied certiorari, “wholly failed to grasp the technical matter and issues in suit.” In the brief in this Court the plaintiffs state: “Those courts held plaintiffs’ patent ‘anticipated’ by prior art dealing with feeder mechanisms; plaintiffs stand ready to prove the courts’ misconception of the technical subject matter by proving that feeder mechanisms are machines radically different in structure, operation, and function from the bin activators to which plaintiffs’ patent is actually directed. The District Court in this case, however, gave plaintiffs no chance to offer such proof; instead, by a process of reasoning wholly unrevealed, it held (App. 30) that the trial judge in the Carrier case made his conclusions of fact ‘with an intelligent understanding of the technical issues involved’.” Plaintiffs’ brief, p. 10. Nothing is offered in support of this claim and the same issues were presented and disposed of in the appeal to the Seventh Circuit. Similarly, it was claimed in the Seventh Circuit that Judge Steckler did not understand the invention. In disposing of that claim the Court of Appeals for the Seventh Circuit had the following to say: “Plaintiffs on brief state the contested issues as follows: T. Was it reversible error for the District Court to adopt the overly simplistic definition of the Wahl invention urged by defendant on the validity issue, and then predicate its finding of anticipation (by three separate items of prior art) and obviousness on that definition rather than on a fair reading of the Wahl claims in context?’ -X- * -X- X X X “It appears to us that issue I is stated in a rather novel manner. However stated, we think the ultimate issue is whether the court’s findings of fact are clearly erroneous. Rule 52(a) of the Federal Rules of Civil Procedure provides in part: ‘Findings of Fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.’ X X X- X -X- X “The record refutes the suggestion that Judge Steckler was led astray. It reveals that he was keenly aware of the issues for decision and the contentions of the respective parties, and actively participated in the examination of the expert witnesses. He required each side to submit proposed findings and conclusions of law, upon which arguments were heard. At the conclusion of such arguments counsel for both sides were invited to the court’s chambers for a discussion eoneerrfing the findings and conclusions of law proposed by defendant. The court required of defendant numerous changes in its proposal, as evidenced by the court’s entry of August 6, 1969, ‘Court met with counsel in chambers concerning the finalization of findings of fact and conclusions of law and indicated to counsel its objections to the proposed findings of fact and conclusions of law tendered by defendant and made suggestions for amendments thereof. Counsel for defendant is to prepare for submission to Court amended proposed findings of fact and conclusions of law and is to provide a copy to plaintiffs before filing the same with the Court.’ Defendant’s proposal, amended to meet the requirements of the court was adopted on November 5, 1969.” 452 F.2d at 98-99. The Supreme Court in Blonder-Tongue pointed out that the occasions when trial courts and Courts of Appeals would fail to grasp the technical subject matter of the patent in suit would be “relatively rare.” 402 U.S. 333, 91 S.Ct. 1434. In this case the District Court for the Western District of Kentucky and this Court have had available for examination the entire transcript and record of the litigation in the Southern District of Indiana, as well as the appendix filed on appeal with the Court of Appeals for the Seventh Circuit. The District Judge below examined the material available and concluded that Judge Steckler had an excellent grasp of the technical matters involved, that he applied the appropriate standards and that the plaintiff was afforded a clear opportunity to offer any and all available evidence. No claim is asserted in this Court that the plaintiffs have any additional or new evidence which they were prevented from presenting in the prior litigation. In essence all that the plaintiffs’ counsel claims is that he could have done a better job of cross-examining Dr. Fischer, the defendant’s expert witness, than was done by plaintiffs’ counsel in the Indiana litigation. Such a claim has little appeal to this Court. We recognize that any lawyer can by hindsight form opinions as to how he might have done a better job. We do not understand this to be the thrust of the crack in the door left by Blonder-Tongue. Plaintiffs presented criticism of Dr. Fischer’s testimony to the Seventh Circuit Court of Appeals which disposed of that claim in the following manner: “Plaintiffs in their reply brief state that the district court did not ‘understand the concept of Wahl’s claimed invention and how it differs from the prior art,’ and that he was ‘deceived * * * aided and abetted by a Professor Fischer, whose professorial charisma was relied on by defendant to legitimatize defendant’s courtroom ploy.’ * * * * * “It was that court’s function, not ours on review, to weigh the conflicting testimony and judge of the credit to be given the witnesses. We are satisfied that the court properly performed its duty in this respect. Certainly we cannot hold that the finding was clearly erroneous under Rule 52(a).” 452 F.2d at 99, 102. We, therefore, conclude that these plaintiffs “had a full and fair chance to litigate the validity of their patent” in the Southern District of Indiana. In the Indiana litigation plaintiffs made the choice of the forum in which they desired to assert the validity of their patent. It appears from the record that Carrier Manufacturing Co., Inc., the defendant in the Indiana case, is a Kentucky corporation having its principal place of business at Jefferson-ville, Indiana. Thus under the provisions of Title 28 U.S.C. § 1391(c), and Title 28 U.S.C. § 1400(b) the action could have been instituted in a District Court in Kentucky or in the District Court in Indiana. It may be that plaintiffs selected the Indiana forum because they had previously prevailed in patent litigation against the same defendant and involving similar machinery and technology before the same judge. Wahl v. Carrier Mfg. Co., 358 F.2d 1 (7th Cir. 1966). Presumably, the plaintiffs had no complaint about Judge Steckler’s understanding of patent litigation at the time of the prior case. We recognize that summary judgment, Rule 56, Rules of Civil Procedure, should be granted only in the exercise of great restraint. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962); C. F. W. Construction Co. v. Travelers Insurance Co., 363 F.2d 557 (6th Cir. 1966). However, summary judgment is proper where a trial would serve no useful purpose. Miller v. Western Board of Adjusters, Inc., 427 F.2d 175 (9th Cir. 1970); Applegate v. Top Associates, Inc., 425 F.2d 92 (2nd Cir. 1970); Bland v. Norfolk and Southern Railroad Co., 406 F.2d 863 (4th Cir. 1969); and as said by this Court in Rogers v. Peabody Coal Co., 342 F.2d 749, 751 (6th Cir. 1965): “It is clear that where a moving party supports his motion for summary judgment by appropriate means, which are uncontroverted, the trial judge is fully justified in granting relief thereon.” Plaintiffs’ counsel suggest in their briefs that they should have been accorded a trial for the purpose of determining whether or not the prior trial in the District Court in Indiana, which resulted in the adjudication of invalidity, awarded to the plaintiffs a full and fair opportunity under appropriate procedure to present all evidence and witnesses in support of the patent in suit. If we were to accept this theory the whole purpose of the rule laid down by the Supreme Court in Blonder-Tongue would be defeated. We, therefore, hold that such a trial is neither necessary nor advisable in a case such as this where the court in which the subsequent action is pending has available the record from the prior litigation from which it can determine whether the claim of estoppel rests upon a firm foundation based on the requirements laid down in Blonder-Tongue. The judgment of the District Court is affirmed. . 28 U.S.C. § 1391(c). “A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.” . 28 U.S.C. § 1400(b). “Any civil action for patent infringement may be brought in tlie judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”

f2d_474/html/0977-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Elba ORTIZ, Individually and on behalf of all others similarly situated, Appellants, v. Theodore ENGELBRECHT et al. No. 71-2066. United States Court of Appeals, Third Circuit. Argued Jan. 16, 1973. Decided March 2, 1973. Theodore A. Gardner, Timothy K. Madden, Hudson County Legal Services, Jersey City, N. J., for appellants. Virginia Long Annich, Robert A. Goodman, Trenton, N. J., for appellees. Before ADAMS, ROSENN and HUNTER, Circuit Judges. OPINION OF THE COURT PER CURIAM: In this action, plaintiff, individually and on behalf of the class, seeks the convocation of a three-judge district court, pursuant to 28 U.S.C. §§ 2281 and 2284, for the purpose of having the service of process “tacking provision” of the New Jersey Statute R.S. 2A:18-54 N.J.S. declared unconstitutional and for the purpose of enjoining the defendants from employing those provisions against the plaintiff and the class represented by the plaintiff. This “tacking provision” provides that, “. . . when admission to the premises is denied or the tenant or occupant and all members of his family above the age of 14 years are absent from the premises, or there is no person actually occupying them, the officer or other person may post or affix a copy of the same [notice or complaint] upon the door or other conspicuous part of such premises. Such posting shall be deemed to be lawful service.” In an amended complaint, the plaintiff, an indigent tenant, subject to a state dispossess default judgment, alleged that she never received any service in the state dispossess matter. The notice apparently had been tacked on the door of her apartment, pursuant to R.S.2A:18-54 N.J.S. For reasons not completely clear, the notice had not been brought to her attention. Mrs. Ortiz further alleged that she represented a class comprised of “all citizens who might now or in the future be served with process in a summary eviction proceeding in accordance with the ‘tack on’ provision of New Jersey Statute 2A: 18-54 and thus be threatened with the possibility of never receiving notice of the pendency of the action against them.” The district court denied the application for the convening of a three-judge court and dismissed the original and the amended complaints. Since it is clear from the briefs and oral argument that George F. Kugler, Jr., the Attorney General of the State of New Jersey, in no way participated in the implementation of the Act in question and in no way threatens such participation, the order dismissing the complaint as to the Attorney General shall be affirmed. However, the complaint and amended complaint do set forth a valid cause of action against the landlord and the con-"staEIeT' Although the landlord has advised the Court that he has no interest in contesting the complaint filed by the plaintiff, and has in fact withdrawn his dispossess proceeding, nonetheless there is a justiciable dispute between the plaintiff, perhaps as representative of an appropriate class, on the one hand, and the remaining defendants on the other hand. Thus, this dispute raises a bona fide question regarding the constitutionality of the New Jersey Act, which is state-wide in its application. Accordingly, the matter will be remanded to the district court to determine first, the propriety of the class and whether an appropriate certificate should issue under F.R.Civ.P. 23, and second, whether the dispute, as set forth in the complaint and amended complaint, has become moot. See Indiana Employment Security Division v. Burney, 409 U.S. 540, 93 S.Ct. 883, 35 L.Ed.2d 62 (U.S. Jan. 17, 1973); Washington v. Lee, 263 F.Supp. 327 (M.D.Ala.1966), aff’d 390 U.S. 333, 88 S.Ct. 994, 19 L.Ed.2d 1212 (1968) (per curiam). If the district court determines that a certificate should issue under Rule 23 and that the dispute is not moot, then the district court should request that a three-judge court be convened pursuant to 28 U.S.C. § 2281 and § 2284. Accordingly, the dismissal of the complaint by the district court will be reversed as to all defendants except the Attorney General and the case remanded to the district court for further proceeding consistent with this opinion.

f2d_474/html/0978-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellee, v. Paul ODDO and Lucien Madere, Appellants. No. 499, Docket 72-1830. United States Court of Appeals, Second Circuit. Submitted Jan. 12, 1973. Decided March 12, 1973. Before LUMBARD, KAUFMAN and MANSFIELD, Circuit Judges. PER CURIAM: Paul Oddo and Lueien Madere appealed from judgments of conviction, entered on June 30, 1972, for various narcotics violations. Elliot Taikeff, Esq., who was a personally retained counsel for Madere in the district court, moved the Court of Appeals for an order under the Criminal Justice Act appointing him to represent Madere on appeal. He filed an affidavit stating that Madere was unable to afford retained counsel. By order dated November 27, 1972, Taikeff was appointed to represent Madere on appeal. Oddo was represented at trial and on appeal by his retained counsel, Rosner & Rosner. The convictions were affirmed in open court on January 10, 1973, 471 F.2d 647. A single brief was filed in the Court of Appeals in behalf of both Oddo and Madere by Graham Hughes, Esq., indicating that he was serving “of counsel” for both appellants. When the appeal was heard by the Court on January 10, 1973, Mr. Hughes appeared and argued in behalf of both appellants. On January 12, 1973, Mr. Taikeff submitted a voucher to the presiding judge of the panel, requesting compensation for services and expenses rendered in prosecuting the appeal. The voucher indicated that one hour had been spent in court and twenty-nine hours out of court preparing the appeal. Under the Criminal Justice Act, in-court services are to be compensated at the rate of $30 per hour and out-of-court services are compensa-ble at $20 per hour. In addition, Mr. Taikeff requested payment in the amount of $143.81 for the cost of reproducing the brief. The total amount of compensation requested was $753.81. Although the Clerk’s calendar for January 10, 1973 indicates that oral argument on this appeal lasted from 10:30 to 11:03, Mr. Taikeff requested compensation for one hour of in-eourt time. In addition, a request for compensation in the amount of $143.81 for the cost of reproducing briefs in an assigned counsel matter, where the general practice is to request permission to file four typewritten briefs, seemed most unusual. In view of these and other facts, the presiding judge requested Mr. Taikeff to submit an affidavit explaining the voucher in greater detail and describing the events that led to the assignment of Mr. Hughes, who was not appointed by the Court, to serve “of counsel” on the appeal. Mr. Taikeff filed an affidavit, dated February 26, 1973, accompanied by an affidavit from Mr. Hughes, dated March 1, 1973. Mr. Taikeff stated that he had received some compensation for his work at trial in behalf of Madere. But, although Mr. Taikeff had asked this Court to appoint him to represent Mr. Madere on appeal, he states in his affidavit: Because of my strong preference to confine my professional activities to the trial level, I contacted my personal friend and colleague Professor Graham B. J. Hughes of the New York University School of Law, a member of the Bar of this Court. I told Professor Hughes that I wanted him to write the brief for the appellant Ma-dere and that I would pay him for his work. It appears further, that Mr. Taikeff agreed to pay Mr. Hughes at the rate of $15 per hour. Shortly thereafter, according to the affidavit submitted by Mr. Hughes, an arrangement was made between Mr. Hughes and the firm of Rosner & Rosner, Oddo’s retained counsel, under which Mr. Hughes agreed to serve “of counsel” for Oddo’s appeal as well. According to Mr. Hughes, this “seemed a suitable arrangement since the issues were the same for both appellants.” Mr. Hughes informed the firm of Rosner & Rosner of his compensation agreement with Mr. Taikeff and it was agreed that Mr. Hughes would be paid $800 for his services in behalf of the appellant Oddo. Because of this, Mr. Hughes has, sua sponte, allocated half of his time spent in preparing the appeal to Madere and it is for this work that Mr. Taikeff has requested compensation under the Criminal Justice Act. Finally, it should be noted that Mr. Taikeff, in his affidavit, requests additional compensation for three hours of out-of-court work, representing the time he spent discussing this matter with a representative of the Court, reviewing the file and correspondence to and from Mr. Madere, and preparing the affidavit to which we have referred. As we have indicated, Mr. Hughes read the trial record, researched the case, wrote the brief and argued the appeal in behalf of Oddo and Madere. For all practical purposes he was counsel for the appellants. Mr. Hughes, however, is not on this Court’s panel of attorneys who are eligible for appointment under the plan implementing the Criminal Justice Act. Nor was there any application to the Court to appoint him under the Criminal Justice Act to represent Mad-ere pro hac vice. This type of “independent contracting” by an appointed counsel cannot be condoned by the Court. It is inconsistent with the purposes of the Criminal Justice Act and the responsibility of the Court to approve those who may accept appointments pursuant to the Act. In short, it removes control over the assignment of appointed counsel from the judicial branch and places it in the hands of private counsel. Merely for the sake of. illustration, and without implying that the following example exhausts the range of evils inherent in such a practice, we note that although compensation under the Criminal Justice Act is $30 per hour for in-court work and $20 per hour for out-of-court work, the arrangement between Mr. Hughes and Mr. Tai-keff called for payment by Mr. Taikeff of $15 per hour for services performed by Mr. Hughes. Were we to exclude the unnecessary and excessive sum requested by Mr. Taikeff for reproducing briefs, and ignore the irony of his asking to be compensated for time spent in discussing and preparing the affidavit to which we have referred, Mr. Taikeff’s request for compensation would amount to $580. Mr. Taikeff will be compensating Mr. Hughes for 30 hours of work, at $15 per hour, or a total of $450. Quite frankly, the reason for Mr. Taikeff’s belief that he is entitled to have the government subsidize him in the sum of $130 — the difference between the compensation he has requested and the sum he is actually paying Mr. Hughes — escapes us. In light of the foregoing, Mr. Tai-keff’s request for compensation for services performed in connection with the appeal of Lueien Madere is hereby denied.

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Alonzo THOMAS, Petitioner-Appellee, v. Dr. George J. BETO, Director, Texas Department of Corrections, Respondent-Appellant. No. 72-2896. United States Court oí Appeals, Fifth Circuit. Feb. 28, 1973. Rehearing Denied April 2, 1973. Rehearing and Rehearing En Banc Denied April 23, 1973. Crawford Martin, Atty. Gen., Roland Daniel Green, III, Gilbert J. Pena, Asst. Attys. Gen., Austin, Tex., for respondent-appellant. Phoebe Lester, Houston, Tex. (Court appointed), for petitioner-appellee. Before ALDRICH, SIMPSON and CLARK, Circuit Judges. Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation. CLARK, Circuit Judge: The Director of the Texas Department of Corrections appeals from a judgment granting habeas corpus relief to an inmate. As the district court correctly recognized, our holdings in Brooks v. Texas, 381 F.2d 619 (5th Cir. 1967) and Hernandez v. Beto, 443 F.2d 634 (5th Cir. 1971), fixed the applicable law. Its judgment was based upon a determination that the constitutional error of trying the petitioner in jail garb was not harmless beyond a reasonable doubt. However, Hernandez requires that this court independently review the Texas trial court record, and that perusal leads us to a different conclusion as to the probable impact on the minds of the jury of the petitioner’s proscribed prison garb appearance — we conclude it was harmless beyond a reasonable doubt. We therefore reverse. As the opinion on rehearing in Hernandez emphasized, each case must be considered in its own factual context. 443 F.2d at 637. The procedure for such consideration by this court is also defined in that case in these terms: “Our judgment must be based on our own reading of the record and on what seems to us to have been the probable impact of * * * [the prison garb worn by the defendant] on the minds of an average jury.” Harrington v. California, 1969, 395 U.S. 250, 254, 89 S.Ct. 1726, 1728, 23 L.Ed.2d 284. Before “a federal constitutional error can be held harmless the court must be able to declare a belief that it was harmless beyond a reasonable doubt.” Chapman v. California, 1967, 386 U.S. 18, 24, 87 S.Ct. 824, 828, 17 L.Ed.2d 705; cf. United States v. Manning, 5 Cir. 1971, 440 F.2d 1105; Simpson v. Wainwright, 5 Cir. 1971, 439 F.2d 948. 443 F.2d at 637. The crime for which Thomas was tried was the robbery of a grocery store. The prosecution produced the following testimonial evidence. Mrs. Estelle Vaughn was employed as a cheeker-stoeker and cashier at the store. After making a positive identification of the defendant, she stated that he watched the operation of the cash registers at the store for approximately thirty minutes, then walked up to the vacant cash register in the checking line next to her own. While a cigarette stand located between her position and that cash register prevented Mrs. Vaughn from physically seeing the defendant manipulate the buttons necessary to open the cash drawer, she did see the cash drawer when it came open and she saw Thomas take money out of the drawer with both hands then audaciously step back into her line with the stolen money still visible in his fist and ask for a package of cigarettes. -Recovering from her stunned disbelief, Mrs. Vaughn confronted Thomas by saying, “What is that you have in your hand ?” and almost simultaneously turning to the store owner and saying, “Mr. Eddy, he got some money out of that cash register.” Mr. Robert Burchfield was working as a ehecker-stoeker in the same store on this ' occasion. Upon hearing Mrs. Vaughn’s statement that a person had taken something out of a cash register, he looked in her direction and saw Thomas, whom he too positively recognized and identified, running away from Mrs. Vaughn and out the door. Burchfield, joined by others, gave chase. Approximately three or four blocks from the store Burchfield caught Thomas, who fell to the ground beside an automobile but immediately got back to his feet. Mr. Eddy Rosenzweig, the store owner, was present in the immediate vicinity of Mrs. Vaughn at the time of the theft. He also joined in the pursuit and observed the capture of Thomas by Burch-field and others. He then retraced the route along which Thomas had fled, looking for the stolen funds. He found the missing 160 dollars in cash, plus four or five checks, under the car next to which Thomas fell at the point of his capture. Mr. A. C. Campbell, a Harris County Deputy Sheriff, happened to be alighting from his automobile in front of the grocery store as Thomas ran out the door. One of the grocery’s sacker boys hollered, “Get him, Mr. Campbell. He got our money.” Whereupon Campbell joined the tail and arrived at the point of capture in time to hear Thomas shout, “Let me go. You have got the money. Let me go.” Campbell then placed Thomas under arrest. Although Thomas’ counsel engaged in vigorous cross-examination of each of these witnesses, none of them waivered on any detail of the above recited testimony. Thomas’ only remaining defense was an asserted variance between the indictment, and the proof. The indictment charged that the funds taken were the corporeal personal property of Mrs. Vaughn. Thomas contended that Mrs. Vaughn had not been shown to be in charge of the cash register and therefore the person shown to have been the victim of the theft was the owner of the store. He also advanced the further facile assertion that there was no showing that the money had been taken without the consent of Mrs. Vaughn or the true owner. The State’s proof did demonstrate that it was Mrs. Vaughn’s responsibility to watch the adjacent register when the checker assigned to that register was not on duty, as was the case here, and the intimation that proof of consent to pilferage had to be shown borders on the incredible. But even if the court had erroneously refused to honor these defenses, a matter we do not have to decide, such error would not reach constitutional dimensions in this ease. Because the same judge who was reversed in Hernandez for refusing relief to that petitioner is now reversed here for granting Thomas’ application, we deem a brief factual reconciliation of these holdings no less than appropriate. In Hernandez the petitioner had been convicted of a felony manslaughter offense of having killed a 12 year old boy while driving an automobile in an intoxicated condition. Seven witnesses testified that they observed physical aspects of Hernandez’ condition after the accident which were consistent with drunkenness, i. e., the smell of alcohol, a staggering walk, and “blurred and misty” eyes. However the proof also demonstrated that Hernandez had been injured in the fatal accident, hence a jury could have believed the injury, not intoxication, caused the observed symptoms other than odor. Given this bare possibility, this court was unable to conclude that the error of infringing the presumption of innocence by trial in jail clothing carried no seed of reasonable doubt as to harm. In Thomas’ case on the other hand, we can perceive no possible inference which clouds or conflicts any essential or material fact. Rather, all such facts lead unerringly to guilt. Thus, our judgment of the probable impact of the prison garb trial on the minds of an average jury differs in the present case. The judgment granting the writ of ha-beas corpus is reversed and the cause is remanded with directions to deny all relief sought. Reversed and remanded. . The instant case was tried shortly after Brooks but before Hernandez. In view of the conclusion reached, we pretermit any ■ consideration of the retroactivity of either of these decisions.

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UNITED STATES of America, Plaintiff-Appellee, v. Stuart Blackburn PERRY, Defendant-Appellant. No. 72-1456. United States Court of Appeals, Tenth Circuit. Argued and Submitted Nov. 16, 1972. Decided March 1, 1973. Floy E. Dawson, Asst. U. S. Atty. (William R. Burkett, U. S. Atty., on the brief), for plaintiff-appellee. Donald F. Gust, Oklahoma City, Okl. (Pierce, Couch, Hendrickson, Gust & Short, Oklahoma City, Okl., of counsel, on the brief), for defendant-appellant. Before BREITENSTEIN and Mc-WILLIAMS, Circuit Judges, and CHRISTENSEN, District Judge. PER CURIAM. A one-count indictment charged defendant-appellant with violating 50 App. U.S.C. § 462(a) by failing to report for induction into the armed services. A jury found him guilty. The court sentenced him to five years imprisonment, and he appeals. We agree that the judgment must be reversed and the case remanded for a new trial but disagree as to the reasons therefor. The controversy centers around the Selective Service Regulation, which appears at 32 C.F.R. § 1641.3, and reads: “It shall be the duty of each registrant to keep his local board advised at all times of the address where mail will reach him. The mailing of any order, notice, or blank form by the local board at the address last reported by him to the local board shall constitute notice to him of the contents of the communication, whether he actually receives it or not.” The Selective Service file contains a carbon copy of a letter bearing date of December 23, 1968, addressed to defendant at his last reported address, and ordering him to report for induction on January 2, 1969. Nothing in the file shows that the letter was returned to the local board. The defendant took the stand in his own behalf and denied receipt of the letter. Judges Breitenstein and McWilliams believe that the presence of the carbon copy in the file is proof of neither mailing nor of time of mailing and that, on the record presented, mailing cannot be inferred from writing. Judge Christensen believes that the presence of the carbon copy in the file permits, but does not require, the fact finder to infer that the original was mailed to the addressee at the indicated address on or about the date shown on the copy. All three judges agree that the inadequacy of the proof does not require reversal with directions to dismiss because the record discloses a reasonable probability that the missing proof can be presented on a new trial. Defendant contends that § 1641.-3 is constitutionally invalid because it denies due process of law. Judges McWilliams and Christensen agree and are in substantial accord with the reasoning of United States v. Bowen, 3 Cir., 414 F.2d 1268, 1273-1277. Judge Breitenstein disagrees. He says that the regulation, by its terms, is neither conclusive nor irrebuttable, that evidence of nonreceipt was here admitted, that the test of whether a criminal presumption is irrational or arbitrary depends on whether “the presumed fact is more likely than not to flow from the proved fact,” Leary v. United States, 395 U.S. 6, 36, 89 S.Ct. 1532, 1548, 23 L.Ed.2d 57, and that there is a rational connection between mailing and receipt. See Hagner v. United States, 285 U.S. 427, 430, 52 S.Ct. 417, 76 L.Ed. 861. Judges McWilliams and Christensen see no conflict between their position that the regulation is invalid and the Tenth Circuit decisions in United States v. Kirkpatrick, 10 Cir., 446 F.2d 1371; United States v. Foust, 10 Cir., 457 F.2d 653, and United States v. Freed, 10 Cir., 460 F.2d 75, because those decisions do not discuss the validity of § 1641.3. Judge Breitenstein believes that, because the result in those cases depends on the validity of § 1641.3, such validity is there implied. The invalidation of the regulatory presumption does not foreclose a new trial because of the availability of the judicial presumption of receipt after adequate proof of mailing. See Hagner v. United States, 285 U.S. 427, 430-431, 52 S.Ct. 417, 76 L.Ed. 861. In its instructions, the trial court quoted § 1641.3 substantially verbatim and presented it as an irrebuttable presumption. Judges McWilliams and Christensen would not reach the instructions because, if the regulation is invalid, an instruction based thereon necessarily fails. Judges McWilliams and Christensen agree with Judge Breitenstein that, if the regulation is valid, the instructions are invalid because they present the regulation as an irrebuttable presumption and hence deny due process. See Tot v. United States, 319 U.S. 463, 467, 63 S.Ct 1241, 87 L.Ed. 1519, and Bollenbach v. United States, 326 U.S. 607, 611, 66 S.Ct. 402, 90 L.Ed. 350. The instructions which must be given to a jury whenever the existence of a presumed fact is submitted to the jury are stated in Rule 303(c), Rules of Evidence for United States Courts of Magistrates, prescribed by the Supreme Court on November 20, 1972. All three judges also agree that the defect was not cured by other instructions given. All three judges recognize the difficulty in reconciling their holding that the instructions are bad with the decisions in United States v. Foust, 10 Cir., 457 F.2d 653, 655-656, and United States v. Freed, 10 Cir., 460 F.2d 75, 78, but believe that those decisions are not controlling here. The other points raised by the defendant are without merit and need not be discussed. Reversed and remanded for a new trial.

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Manuel BANDERAS-AGUIRRE, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee. No. 72-3607 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 5, 1973. Manuel Banderas-Aguirre, pro se. William S. Sessions, U. S. Atty., San Antonio, Tex., Ronald F. Ederer, Asst. U. S. Atty., El Paso, Tex., for respondent-appellee. Before GEWIN, COLEMAN and MORGAN, Circuit Judges. Rule 18, 5 Cir., Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: This appeal arises from an order of the district court denying the motion of a federal prisoner to vacate sentence pursuant to 28 U.S.C. § 2255. We affirm. The appellant is presently serving a five year sentence, having been convicted upon his guilty plea to an indictment charging him with three counts of knowingly and unlawfully transporting aliens who had not been lawfully admitted into the United States in violation of 8 U.S. C. § 1324(a)(2). In his § 2255 motion to vacate sentence, appellant asserted as grounds for relief that the statute under which he stands convicted is unconstitutionally vague; that his prosecution under the statute presumes knowledge on his part that the persons transported had illegally entered the United States; that he was denied counsel at all stages of the proceedings against him; and that he was denied his right to confront the witnesses against him in that the aliens whom he was accused of transporting had been deported and were out of the reach of subpoenas. Based upon the records of the criminal proceedings, the district court denied relief. This Court, as well as other Circuit Courts, have previously ruled that § 1324 is not unconstitutionally vague. Bland v. United States, 5th Cir. 1962, 299 F.2d 105; United States v. Sanchez-Mata, 9th Cir. 1970, 429 F.2d 1391; Herrera v. United States, 9th Cir. 1953, 208 F.2d 215, cert. denied 347 U.S. 927, 74 S.Ct. 529, 98 L.Ed. 1080. Neither does the statute contain language indicating that one transporting an alien is presumed to know that person is in the United States illegally. At any rate, the transcript of the proceedings at which appellant pled guilty demonstrates that appellant freely admitted that he transported the aliens involved with full knowledge that they were illegally in this country. The transcript further shows that appellant was advised by the court of his right to have counsel appointed for him, and that he freely waived that right. Finally appellant, by pleading guilty, waived his right to confront the witnesses against him, since a voluntary guilty plea constitutes a waiver of that right. Askew v. State of Alabama, 5th Cir. 1968, 398 F.2d 825; see also Boyd v. Smith, 5th Cir. 1970, 435 F.2d 153; Busby v. Holman, 5th Cir. 1966, 356 F.2d 75. In addition, the trial court specifically advised appellant that he was waiving this right by pleading guilty. As the district court found, the record reveals that appellant is not entitled to relief. Therefore the judgment below is affirmed. Affirmed.

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Lawrence Univester HARGRETT, Petitioner-Appellant, v. Louie L. WAINWRIGHT, Director Florida Division of Correction, Respondent-Appellee. No. 72-2998 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 2, 1973. Lawrence Hargrett, pro se. Robert L. Shevin, Atty. Gen., Tallahassee, Fla., Joel D. Rosenblatt, Asst. Atty. Gen. of Fla., Miami, Fla., for respondent-appellee. Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges. Rule 18, 5 Cir., Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: The district court denied the habeas corpus petition of Hargrett, a Florida prisoner. We Vacate and Remand. Hargrett was convicted upon trial by jury of first degree murder committed in the course of a felony and was sentenced to life imprisonment. The conviction was affirmed on direct appeal in Hargrett v. State, Fla.App.1971, 255 So. 2d 298. Appellant then filed a petition for the writ of habeas corpus in federal district court. The petition was dismissed for failure to exhaust state remedies as to one of the issues presented— that the in-court identification of appellant by a witness was preceded by an impermissibly suggestive photographic identification procedure. Hargrett then filed a second habeas petition in the court below, deleting the photo-identification issue and alleging (1) that the trial court erred in instructing the jury that an inference of guilt could be drawn from evidence of flight, in that this instruction amounted to an improper comment on his guilt; (2) that the same instruction was erroneous in that the indictment did not give him notice that flight to avoid apprehension was an essential ingredient of first degree murder; and (3) that the Florida felony murder statute is unconstitutional because it permits prosecution for first degree murder even if the killing was not premeditated. Har-grett later amended his petition, albeit obliquely, to include the photo-identification issue, insisting that the issue had been argued on direct appeal. The district court denied the petition on the merits, making no findings on the issue of suggestive photo identification. A review of the record reveals that the photo-identification issue has not been presented to any state court despite appellant’s insistence. He did argue on direct appeal that the witness’ identification was insufficient to support a conviction. This, however, goes to the sufficiency of the evidence. There was no argument raised on appeal as to the suggestiveness of the photograph identification procedures. Rules of comity, as well as the policy against piecemeal litigation, dictate that federal courts will not consider a petition for the writ of habeas corpus until all issues raised therein have been presented to a state court. Burroughs v. Wainwright, 5 Cir. 1972, 454 F.2d 1165; Johnson v. Wainwright, 5 Cir. 1971, 453 F.2d 385; Porter v. Wainwright, 5 Cir. 1971, 439 F.2d 264. Hargrett has an adequate state remedy available to him in Rule 3.850, Fla.R. Crim.P., 33 F.S.A. by which he may seek relief in the state trial court. The judgment below is vacated and remanded with instructions to dismiss without prejudice to allow Hargrett to exhaust his state remedies as to all issues. Vacated and remanded.

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James E. COLLINS, #177733, Petitioner-Appellant, v. W. J. ESTELLE, Director, Texas Department of Corrections, Respondent-Appellee. No. 72-3588 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 13, 1973. Jon H. Palmer (Court-Appointed), Houston, Tex., for petitioner-appellant. Crawford Martin, Atty. Gen., Robert Darden, Dunklin, Sullivan, Asst. Atty. Gens., Austin, Tex., for respondent-ap-pellee. Before BELL, GODBOLD and IN-GRAHAM, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir. 1970, 431 F.2d 409. PER CURIAM: Appellant, a Texas state prisoner, filed a habeas corpus petition alleging (1) that his state conviction was invalid because an involuntary confession had been used against him at his trial, (2) that he had not been accorded his rights under Jackson v. Denno, (1964), 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908, and (3) that his sentence had been improperly enhanced by prior convictions which were invalid because he had been denied the assistance of counsel and had been convicted on the basis of a guilty plea that had been involuntarily made. After an evidentiary hearing the district court held that the confession used to support the present conviction had not been involuntary, and, with regard to the prior convictions, that appellant had not been denied the assistance of counsel, nor had he pleaded guilty involuntarily. We hold that these findings are not clearly erroneous. With regard to the Jackson v. Denno claim, we observe that considerations of comity normally require the federal habeas court to give the state courts the first opportunity to make an independent determination of the voluntariness of a confession, as required by Jackson v. Denno, where such a determination was not made at trial. Here, however, after the parties stipulated that all state remedies had been exhausted (a fact not appearing of record and about which there was some doubt), the district court made this determination itself. The procedure adopted of the stipulation and federal hearing was unusual, but in these circumstances no reversal is indicated. The federal hearing vindicated appellant’s right to an independent judicial determination of the voluntariness of his confession and thus his right to a federal forum on the issue is exhausted. Moreover, the federal hearing was acquiesced in by the state, whose interests under Jackson v. Denno would normally require the federal habeas court to defer to the courts of the state. Affirmed.

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John ROSS, Plaintiff-Appellant, v. MOBIL OIL CORPORATION, the BARGE MCM NO. 2, Her Engines, etc., et al., Defendants-Appellees. No. 72-1890 Summary Calendar. United States Court of Appeals, Fifth Circuit. Feb. 21, 1973. Rehearing Denied April 2, 1973. Samuel M. Cashio, Jr., Maringouin, La., James A. George, Frank J. Polozola, William C. Kaufman, III, Baton Rouge, La., for plaintiff-appellant. Joseph E. Mixon, New Orleans, La., for defendants-appellees. Before JOHN R. BROWN, Chief Judge, and COLEMAN and MORGAN, Circuit Judges. Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: Plaintiff appeals from an order of the District Court granting Defendant’s motion for summary judgment. The cause of action allegedly arose when Plaintiff, a welder assigned, berthed, and fed on a stationary production platform 35 miles off the coast of Louisiana, was injured by some falling equipment while cutting header supports to allow the equipment to be loaded from the Platform onto a nearby Barge. He based his claim on Jones Act negligence and the General Maritime Law doctrine of seaworthiness. The trial Judge determined that because, as a matter of law, the Plaintiff had failed to establish his status as a “seaman”, neither the Jones Act nor the doctrine of seaworthiness afforded a basis for recovery. We agree. As a general proposition, the determination of whether an individual is a “seaman” within the purview of the Jones Act or the maritime law is a purely factual matter for determination by the jury or factfinder. Braniff v. Jackson Ave.-Gretna Ferry Inc., 5 Cir., 1960, 280 F.2d 523, 1961 A.M.C. 1728; Burns v. Anchor-Wate Co., 5 Cir., 1972, 469 F.2d 730 [1972]; Hardaway Contracting Co. v. O’Keeffe, 5 Cir., 1969, 414 F.2d 657, 661, 1969 A.M.C. 73, 77. In response to a bevy of cases brought by ambiguous-amphibious maritime workers claiming the protection of the Jones Act or the doctrine of seaworthiness, this Court, in Offshore Co. v. Robison, 5 Cir., 1959, 266 F.2d 769, 1959 A.M.C. 2049, outlined a two-pronged test. According to Robison there is a legally sufficient evidentiary basis for the case to go to the jury: (1) If there is evidence that the injured workman was assigned permanently to a vessel (including special purpose structures not usually employed as a means of transport by water but designed to float on water) or performed a substantial part of his work on the vessel; and (2) If the capacity in which he was employed or the duties which he performed contributed to the function of the vessel or to the accomplishment of its mission, or to the operation or welfare of the vessel in terms of its maintenance during its movement or during anchorage for its future trips. In Thibodeaux v. McDermott & Co., 5 Cir,, 1960, 276 F.2d 42, 1961 A.M.C. 1469, we considered the status of a land-based welder who was temporarily assigned to a barge to weld and cut pad-eyes and metal straps and held that where the Plaintiff’s customary duties are on shore neither short tenure on a vessel nor tenuous claims about a proposed trip on board have “sufficient legal buoyancy to float a seaman’s status.” 276 F.2d at 47,1961 A.M.C. at 1474. Accordingly, we affirmed the District Court’s order directing a verdict for the Defendant. Accord, Rotolo v. Halliburton Co., 5 Cir., 1963, 317 F.2d 9, 1963 A.M.C. 1793, cert. denied, 1963, 375 U.S. 852, 84 S.Ct. 111, 11 L.Ed.2d 79; Texas Co. v. Savoie, 5 Cir., 1957, 240 F.2d 674, 1957 A.M.C. 340, cert. denied, 1957, 355 U.S. 840, 78 S.Ct. 49, 2 L.Ed.2d 51. Thibodeaux is dispositive of Plaintiff’s Jones Act claim. Plaintiff also makes a claim under the warranty of seaworthiness concept of General Maritime Law as a vicarious seaman under the doctrine of Seas Shipping Co. v. Sieracki, 1946, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099, 1946 A.M.C. 698; and its progeny, Jackson v. Lykes Bros. Steamship Co., Inc., 1967, 386 U.S. 731, 87 S.Ct. 1419, 18 L.Ed.2d 488, 1967 A.M.C. 584; Gutierrez v. Waterman S.S. Corp., 1963, 373 U.S. 206, 83 S.Ct. 1185, 10 L.Ed.2d 297, 1963 A.M.C. 1649; Reed v. The Yaka, 1963, 373 U.S. 410, 83 S.Ct. 1349, 10 L.Ed.2d 448, 1963 A.M.C. 1373; Pope & Talbot, Inc. v. Hawn, 1953, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143, 1954 A.M.C. 1, which extends the protection of the warranty of seaworthiness to those performing the traditional functions of seamen. Plaintiff tries to make out connection with seaman’s work by suggesting that his cutting and welding were essential to the “loading” of the barge —a traditional function of a seaman. This Court — in a case of land-based injury to a longshoreman resulting from defective shore-based equipment not a part of the ship’s gear — considered the question of what comprises “loading” in Law v. Victory Carriers, Inc., 5 Cir., 1970, 432 F.2d 376, 1970 A.M.C. 2215, and determined to use the terms in a “more pragmatic and less ritualistic sense.” 432 F.2d at 383, 1970 A.M.C. at 2225. The United States Supreme Court reversed. Victory Carriers Inc. v. Law, 1971, 404 U.S. 202, 92 S.Ct. 418, 30 L.Ed.2d 383, 1972 A.M.C. 1. For this and other reasons bearing on Jones Act status Plaintiff failed to make out the necessary status to reap the benefit of any warranty of seaworthiness. Acceptance of the trial Judge’s approach makes it unnecessary for us to intimate any views as to the significance, if any, of the intervening decision in Executive Jet Aviation, Inc. v. City of Cleveland, 1972, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454, 462. Affirmed.