author: WALLACE, Circuit Judge: HUFSTEDLER, Circuit Judge, with whom ELY, Circuit Judge, concurs,

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Sam John DEEP, Defendant-Appellant.
    No. 72-1623.
    United States Court of Appeals, Ninth Circuit.
    May 10, 1974.

      Alan Saltzman (argued), of Saltzman & Goldin, Ronald F. Merlino, Los Angeles, Cal., for defendant-appellant.
    Lawrence W. Campbell, Asst. U. S. Atty., (argued), Eric A. Nobles, Elgin C. Edwards, Asst. U. S. Attys., William D. Keller, U. S. Atty., Los Angeles, Cal., for plaintiff-appellee.
    Before CHAMBERS, MERRILL, KOELSCH, BROWNING, DUNIWAY, ELY, HUFSTEDLER, WRIGHT, TRASK, CHOY, GOODWIN, WALLACE and SNEED, Circuit Judges.
   OPINION

WALLACE, Circuit Judge:

Deep appeals his conviction of five counts of an indictment charging him with violations of the Selective Service Law and of a violation of 18 U.S.C. § 1001. The first, second, third and fifth counts, using different legal theories, essentially charged Deep with evading military service by knowingly making false representations to the Selective Service System that he was undergoing “active orthodontic treatment,” when in fact he was not.

Count four charged that during the period from April 13, 1971, to May 11, 1971, Deep knowingly failed “to report to his Selective Service Local Board the fact that he no longer wore such appliances and was not undergoing active orthodontic treatment, a fact regarding defendant’s physical condition that might result in his being placed in a different classification.”

Deep moved to dismiss the indictment on several grounds, including failure of any of the counts to state an offense. The motion was denied. He also moved for judgment of acquittal at the conclusion of the government’s case-in-chief and again at the conclusion of the evidence. Both motions were denied and a jury found Deep guilty on all counts. We affirm.

In count four, Deep was charged with a failure to report promptly to his local board any change in his physical condition which might result in his being reclassified. See 32 C.F.R. § 1625.1(b). Specifically the indictment alleged that, from April 13 to May 11, 1971, he failed to report that he no longer wore orthodontic appliances and was no longer undergoing active orthodontic treatment. Deep had appeared for his induction physical examination in January, 1971, wearing orthodontic appliances. As a result, his local board classified him 1-Y (not currently qualified for service in the Armed Forces). Had the alleged unreported facts been true and had he reported them, the local board might have reclassified him 1-A (available for military service).

Viewing the evidence in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942), the facts are these: In October, 1970, subsequent to passing his preinduction physical examination and just prior to the date Deep was to report for induction, Dr. Bernard Bender, a dentist, examined Deep and ordered and installed for him orthodontic appliances. They consisted of eight bands and two arch wires. Four teeth in his upper jaw and four in his lower were banded; the arch wires were attached to and passed through loops in these bands. There were no small wires, which actually supply the tension to the appliances, available in Dr. Bender’s office at that time. It is at least questionable whether they were ever installed. Deep returned for two additional recorded appointments; the last was on January 12,1971.

On February 7, 1971, Deep was in an automobile accident and was hospitalized. X rays were taken to determine whether he had fractured his skull. At his trial, the government’s expert orthodontist testified that the X rays showed that, as of the date of the accident and hospitalization, Deep was wearing only two of the eight bands and neither of the arch wires. He stated that these two bands alone could serve no possible orthodontic purpose.

On April 13, 1971, FBI agents interviewed Deep and asked him why he was no longer wearing his braces. Deep admitted that they also informed him that he was required to report his changed physical condition to his local board. His response to this advice was that he knew he was required to do so because he had read the back of his classification card, Form 110. (The local board had sent Deep classification cards on four different occasions.)

On May 13, Deep appeared before a federal grand jury. The assistant United States attorney in charge of the investigation noticed that Deep was not wearing his braces and informed Deep of that fact.

Finally, On May 14, 1971, Deep wrote his local board stating that he had been in an automobile accident and had to remove his bands as a result.

Count four of the indictment charged Deep with a knowing failure to perform a required duty during the period from April 13 to May 11, 1971. Clearly, there was sufficient evidence for the jury to believe that Deep’s physical condition had changed in that at the time of the accident he was no longer wearing any type of effective braces; that this change might result in a reclassification; that Deep had a duty to report this change; and that Deep knew of this duty. His failure to do so during the period charged completes the proof necessary to sustain his conviction on count four.

United States v. Ayala, 465 F.2d 464 (9th Cir. 1972), is indistinguishable from the case before us. The four counts in Ayala appear to be the same as the first four counts in this case. There, too, there was a conflict in the evidence. In affirming count four, we held:

These “conflicting stories . presented a question of fact to be passed upon by the jury at the time of trial, and by the trial judge on the motion for new trial.” Bush v. United States, 9 Cir., 1959, 267 F.2d 483, 485, and cases there cited. The jury chose to believe the government’s witnesses. If the jury believed that Ayala had removed his braces in early December, 1970, it could reasonably have inferred that at that time he was not receiving orthodontic treatment of any kind, and that he knowingly failed to inform his local board within the prescribed ten-day period that he was no longer receiving such treatment.

465 F.2d at 466.

It is true that there was evidence which the jury might believe that Deep had bad gums and a malocclusion. But that does not militate against the jury’s obvious finding of the facts necessary for a conviction on count four. For this there was sufficient evidence. As in Ayala, the Deep jury could reasonably have inferred that Deep had removed his braces at some time between January 12 and February 7, 1971. (The only fact at issue is the exact date; Deep admitted that he himself took them off.) The jury could also reasonably have concluded that Deep was no longer undergoing orthodontic treatment of any kind.

We cannot distinguish Ayala based upon testimony of an expert called by the government who stated that bands can be removed for various periods as part of orthodontic treatment. He stated on direct examination that an orthodontist might remove them periodically to clean or x-ray the teeth. He also stated on cross-examination that, in a few hypothetical cases, the braces might be removed for two or three months to permit muscle exercises; however, those eases usually involve younger individuals in their formative years with a tongue-thrusting problem as a result of thumbsucking.

The expert’s testimony does not distinguish this case from Ayala. In order to hold otherwise, we would have to conclude that because of this testimony, the jury could not have reasonably drawn the inference, as was properly done in Ayala, that Deep was no longer undergoing any type of treatment, “active” or otherwise. We would have to say that, regardless of any other testimony, the jury was required to seize on a small part of the cross-examination of an expert, to give full weight to that testimony and to return an acquittal; and further, that the jury was required to find the following to be reasonable, acceptable and demonstrating a continuation of orthodontic treatment: (1) Deep, rather than an orthodontist removed his own braces in spite of expert testimony that the only way they can or should be taken off is by the orthodontist; and (2) he had removed his braces for some protracted period for orthodontically-prescribed muscular therapy (for which there was no evidence) which therapy is usually reserved for younger individuals with a prior history of thumbsucking (for which there was no evidence). We disagree that the jury was required to find such a hypothetical situation applied to this case. Not only does the law not require the jury to make such a finding, but it would be improper here because there was absolutely no evidence to support it. It is clear that the jury, as in Ayala, could and did properly conclude that Deep “was not receiving orthodontic treatment of any kind, and that he knowingly failed to inform his local board within the prescribed ten-day period that he was no longer receiving such treatment.” Ayala, 465 F.2d at 466. We would err in reversing the jury’s conclusion in this case since we are required to draw all inferences from conflicts in the evidence in favor of the government as the prevailing party. Glasser v. United States, 315 U.S. at 80.

Deep charges that count five does not State any offense and therefore his motion to dismiss should have been granted. The substance of the charge was that Deep made a material false statement in violation of 18 U.S.C. § 1001 when he wrote to his local board “stating that he recently removed his orthodontic bands due to an automobile accident, when in fact he did not remove his orthodontic bands due to an automobile accident.” He contends that it is not material whether the removal was due to an accident or not, that that part of the statement would not influence any action or inaction by the board and, therefore, the statement is immaterial.

It is true that materiality must be demonstrated for a conviction pursuant to section 1001. Paritem Singh Poonian v. United States, 294 F.2d 74, 75 (9th Cir. 1961). The test for determining materiality is

whether the falsification is calculated to induce action or reliance by an agency of the United States — is it one that could affect or influence the exercise of governmental functions,— does it have a natural tendency to influence or is it capable of influencing agency decision[.]

United States v. East, 416 F.2d 351, 353 (9th Cir. 1969).

Although one could conjure up an argument how the isolated statement pertaining to the reason for removal was not material, taking the statement as a whole in the context in which it was made leads us to conclude that it was material. The statute provides for the punishment of any person who, in a matter within the jurisdiction of the government, “conceals or covers up by any trick, scheme, or device a material fact” or knowingly “makes any false . statements.” Deep covered up the fact that he removed the bands and wires himself, not because of an automobile accident, but because the bands and wires were part of a scheme designed to prevent his induction into the service, that he had no other reason to wear them and that he removed them prior to the accident. His attempt to conceal and cover up the real facts by claiming that he removed the bands and wires due to an accident demonstrates the required materiality. If Deep had actually removed the bands and wires as part of an active orthodontic treatment, he would have had no reason to have concealed the fact that he had removed them prior to the accident. In addition, the suggestion that the bands and wires had been removed due to an accident would have a natural tendency to influence the local board to believe that the physical condition necessitating the initial orthodontic treatment still existed. We conclude that Deep both concealed a material fact and made a material falsification. The sufficiency of count five should be determined on the basis of a practical approach, not technical considerations. Hopper v. United States, 142 F.2d 181, 184-85 (9th Cir. 1943).

Because of concurrent sentences imposed, it is unnecessary for us to discuss counts one, two or three. Benton v. Maryland, 395 U.S. 784, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969); United States v. Moore, 452 F.2d 576 (9th Cir. 1971).

Affirmed.

CHAMBERS, MERRILL, KOELSCH, BROWNING, DUNIWAY, WRIGHT, TRASK, CHOY, GOODWIN and SNEED, Circuit Judges, concur in this opinion.

HUFSTEDLER, Circuit Judge, with whom ELY, Circuit Judge, concurs,

dissenting :

At the heart of my disagreement with the majority regarding count four is a differing view of the proof that is necessary to support a conviction under that count. The majority opinion states that “[cjount four of the indictment charged Deep with a knowing failure to perform a required duty”, and the opinion indicates that the breach of duty to which it refers was that Deep had failed to report that “he was no longer wearing any type of effective braces . ” The government could have charged Deep with knowingly failing to report that he had removed some part or parts of his dental appliances, but it did not do so. Rather the government charged that Deep had failed to report that he was no longer undergoing active orthodontic treatment. To prove the offense actually charged in count four, the government had to prove not only that Deep was not undergoing active orthodontic treatment from April 13, 1971, to May 11, 1971, but also that Deep knew that he was not undergoing such treatment.

Even assuming arguendo that the jury could infer from the expert testimony that Deep had in fact ceased to undergo active orthodontic treatment, and giving the government’s evidence its maximum force, we cannot hold that a jury could have found that Deep knew during the relevant period of time that he was not undergoing active orthodontic treatment. To conclude that the jury could not properly infer that Deep knew he had ceased active orthodontic treatment, we need not say that the jury was required to find that the removal of the braces by Deep was within the scope of active orthodontic treatment; we need only conclude that the jury could not find beyond a reasonable doubt that Deep knew that such was not the case.

The jury could not so find largely because active orthodontic treatment is a term of art the meaning of which is unclear even to experts. Although the government argued that the term is “clearly understood to any orthodontist or dentist, and any layman using common sense,” the testimony of the government’s expert witnesses about the meaning of the term indicates otherwise. None of the experts was able to define the term with any precision; none of the attempted definitions agreed with any of the others. If the expert witnesses could not agree upon any definition of active orthodontic treatment, how could the jury have attributed to Deep knowledge of what the terminology meant and knowledge that whatever it meant, he was not receiving that treatment?

In essence, only two facts are asserted that might support an inference that Deep was aware that he no longer was undergoing active orthodontic treatment ; that appliances were removed from his teeth and that they were removed by Deep.

First, the fact that part or parts of Deep’s orthodontic apparatus had been removed was not, in light of the record sufficient to support an inference that he knew that he was not undergping active orthodontic treatment. It is highly questionable whether or not it was proper on this record to conclude that Deep was in fact not undergoing such treatment, and in reaching the conclusion that he was not, the jury had the guidance of several expert witnesses. Nothing in the record suggests that Deep was given comparable advice as to what constituted active orthodontic treatment. If a jury might be unable to infer even from expert testimony that Deep was not under active treatment, it surely cannot be said that beyond a reasonable doubt a lay person at the very beginning of orthodontic treatment would know that removal of a part or parts of his orthodontic appliances so impaired the quality of his treatment that it ceased to be active orthodontic treatment.

Second, from the testimony that bands are generally only properly removed by a dentist or orthodontist, the jury might reasonably have inferred that Deep, in removing his orthodontic appliances, was disobeying express or implied instructions from his dentist. The inferential leap from the notion that Deep disobeyed his dentist to the conclusion that his active orthodontic treatment thereby was and was known to be terminated, however, cannot be made on this record. If a patient disobeyed his orthodontist’s admonishment to avoid eating hard foods that might misalign the appliances, or failed regularly to wear auxiliary headgear, or, as in this case, removed wires or bands that were causing extreme discomfort, it could not be said that the patient knew that his active orthodontic treatment was necessarily terminated thereby. At most, it could be inferred that the patient knew that he might be impairing to some extent the effectiveness of the treatment.

Because the meaning of the phrase active orthodontic treatment is unclear and because there is insufficient evidence to show that, whatever the phrase means, Deep knew that he was not receiving such treatment, I conclude that Deep could not be convicted on this record of the offense charged in count four. Deep’s motion for a judgment of acquittal should have been granted at the close of the government’s case in chief.

I concede, of course, that the evidence would support a conviction for failure to report the fact that orthodontic appliances had been removed from Deep’s teeth. However, Deep was not charged with, nor was the jury instructed with regard to, that failure. The charge that Deep had knowingly failed to report that he was no longer undergoing active orthodontic treatment cannot be translated into a charge that he had knowingly failed to report that he had removed part or parts of his appliances. The government’s failure of proof cannot be cured by deciding that the government fully proved a charge that it did not make.

I turn to the fifth count. The substance of the charge was that Deep made a material false statement in violation of 18 U.S.C. § 1001 when he wrote to the board “stating that he recently removed his orthodontic bands due to an automobile accident, when in fact he did not remove his orthodontic bands due to an automobile accident.” The charge did not state an offense. Materiality of the false statement is an essential element of an offense under section 1001 (United States v. East (9th Cir. 1969) 416 F.2d 351; Paritem Singh Poonian v. United States (9th Cir. 1961) 294 F.2d 74.) A statement is not material unless it would naturally affect or influence agency action or decision. Deep’s statement that he had recently removed his orthodontic bands was material, but it was not false. The claimed falsity was in stating that the reason for the removal was an automobile accident. That statement, even if false, was not material because there is no decision or action of the local board that it could properly have affected or influenced.

In an effort to sustain its conclusion that a false statement of the reason for removing the braces was material, the majority argues that Deep intended thereby to mislead the board. The argument fails to establish materiality. A fact that is immaterial does not become material because a registrant has an evil motive in stating it. In determining materiality, the state of mind that is relevant is that of the board, not of the registrant. The majority further argues that the misrepresentation had “a natural tendency to influence the local board to believe that the physical condition necessitating the initial orthodontic treatment still existed.” I am unable to discern any reasonable chain of inferences that could lead the board to believe that if Deep removed his bands for some reason other than an automobile accident, he did not need any orthodontic treatment. More importantly, with regard to both arguments, the majority cannot indicate what decision or action of the local board could have been affected or influenced by Deep’s alleged falsification, nor does the majority opinion supply any set of facts or logical inferences from which we could properly conclude that any such decision, action, or inaction was or could have been induced by Deep’s statement of the reason for removing his braces. I am unable to supply any.

I would reverse.

      . Count one charged that Deep knowingly and wilfully secured military disqualification because on January 26, 1971, he falsely represented to the Selective Service System “that he was then, and would be in the future undergoing active orthodontic treatment, when in fact he was not, and would not be in the future, undergoing such treatment.”
      Count two charged that on January 26, 1971, Deep “knowingly cause [d] to be made a false, improper and incorrect physical examination at the Armed Forces Examination and Entrance Station [“AFEES”], in that [he] reported for physical examination and induction wearing orthodontic appliances on his teeth and represented that he was undergoing active orthodontic treatment, and in consequence thereof was found not acceptable for induction, when in fact defendant was not then undergoing any genuine active orthodontic treatment, but had merely had orthodontic appliances placed on his teeth for the purpose of evading service in the Armed Forces . . . . ”
      Count three charged that on March 9, 1971, Deep knowingly caused to be made a “false, improper and incorrect classification of himself” by reporting to AFEES on January 26, 1971, wearing orthodontic appliances and “represented that he was then and would be in the future undergoing active orthodontic treatment, and was found not acceptable for induction on the basis that he was undergoing active orthodontic treatment, in consequence of which on March 9, 1971, the Local Board reclassified [him] from 1-A . . . to 1-Y, when in fact defendant was qualified for service in the Armed Forces and was not then undergoing any genuine active orthodontic treatment, but had merely had orthodontic appliances placed on his teeth for the purpose of evading service in the Armed Forces . . . . ”
      The fifth count charged that Deep knowingly “falsified, concealed and covered up a material fact and made a false, fictitious and fraudulent statement” in that he sent his board “a letter stating that he recently removed his orthodontic bands due to an automobile accident, when in fact he did not remove his orthodontic bands due to an automobile accident.”

      . Tlie doctor stated:
      If the bands were left on too long, there is a very good possibility of decay and things like this happening underneath the bands. So even during full treatment that takes two years we like to take the bands off periodically to clean the patient’s teeth, to take X-rays to make sure the teeth are in a healthy condition during orthodontic treatment.

      . The actual testimony in this regard was as follows:
      Q. Would it be reasonable to state that there are several orthodontic cases involving patients that bands and wires have been put on and then removed for a period of time, with a prescription of certain type of tongue and gum exercises, and then putting on that appliance again or some other type of appliance?
      In other words, this type of situation involving the removable and other types of active care, other than just adjustments and braces?
      A. Well, I think you’re bringing up a hypothetical situation and I’m sure we could find one.
      You are talking about removing the braces and sending a patient to a speech therapist for tongue habits ?
      Q. I’m talking about the method of active treatment used by orthodontists that involves certain tongue and jaw and muscle exercises that assist in the correction of malalignments.
      THE COURT: You mean after the taking of the braces off, the braces are taken off for the purpose of that exercise, is that what you mean?
      MR. SOMERS: For the purpose that when it is determined there is some problem with the braces and that they are not working right, using another type of active orthodontic treatment.
      THE WITNESS: Well, in most cases this type of muscle exercise you are talking about is used in conjunction with the braces.
      Many orthodontists employ the use of speech therapists and speech pathologists in their offices to work hand in hand with them during the active phase of treatment.
      I would imagine that there would be cases, like you have mentioned, where you could take the braces off and have the patient seek the help of this particular individual.
      BY MR. SOMERS:
      Q. So in several situations, or some situations at least, the part of active treatment is the removal of braces and going into some other type of care?
      A. Immediately.
      THE COURT: What did you say?
      THE WITNESS: Immediately. I wouldn’t go for any length of time without any proper care.
      THE COURT: Well, what length of time normally, as an expert, would you say that braces would be on? I mean, if you can answer the question. If you can’t, why, say so.
      How long would braces normally be on before you would conclude that that was not the proper approach and you would take the braces off for these muscle exercises, and so forth?
      How long would you leave them on there before you would make that conclusion?
      THE WITNESS: It is really very difficult to say, your Honor. I could think of a few hypothetical situations I have had in my case load, certain younger individuals who have what we call a tongue thrusting, a thumb sucking problem that causes anterior open bites. These are usually in the formative years that we can actually train the tongue, that we can train the muscles to help with our treatment. Generally speaking — •
      BY MR. SOMERS:
      Q. Doctor, isn’t this also—
      THE COURT: Wait a minute. Let him finish.
      You haven’t answered by question yet. Maybe you can’t.
      THE WITNESS : I really can’t. It is really very difficult for me.
      THE COURT: Would it be a matter of two or three months?
      THE WITNESS: It could be.
      THE COURT: All right. Go ahead. BY MR. SOMERS:
      Q. Doctor, isn’t it true that considerable amount of progress has been made with certain types of muscle therapy for certain types of problems in a short period of time, such as a couple of months?
      A. Well, you’re right, there are certain eases that could be helped with some type of myo-therapy.

        Q. Then in some of these cases they may involve the taking off of braces, is that correct, that have been put on?
      A. Well, let me say that in most instances we tlo these things before we put the braces on.
      Q. When you say “we” who are you referring to?
      A. Orthodontists.
      Q. Not necessarily dentists?
      A. Not necessarily.
      Q. Pardon?
      A. Not necessarily.
      Q. Continue, please.
      A. I think I answered what you were asking me.

      . 18 U.S.C. § 1001 provides:
      Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years or both.

      . These were included as necessary elements of the offense in an instruction requested by the government and given by the district court. The government, as it must, acknowledges in its brief on appeal and its petition for rehearing that proof of these elemeats was necessary to sustain the conviction.

      . I ignore testimony favorable to Deep that was consistent with his efforts to receive continuing treatment because we must view the record in the light most favorable to the government.

      . The record in Deep’s case is clear that he needed orthodontic treatment and that such treatment had been commenced. One of the government’s experts testified that removal of orthodontic bands for various periods of time up to two or three months was a part of some kinds of full orthodontic treatment and that removal for shorter times was a regular part of orthodontic treatment. While the majority opinion correctly maintains that the jury was not required to find that Deep’s treatment was of this type, it seems improper to allow the jury to find beyond a reasonable doubt that it was not unless there was some evidence suggesting that it was not. There was no such evidence. These factors and their effect on what the jury could reasonably find with regard to Deep’s knowledge about the status of his treatment distinguish this case from United States v. Ayala (9th Cir. 1972) 465 F.2d 464.

      . If, of course, Deep was not disobeying his dentist when he removed his bands, it would be even more obviously impermissible for the jury to infer that he knew that active orthodontic treatment had ceased.

      . Rule 29(a) of the Federal Rules of Criminal Procedure provides, in pertinent part, that “[t]he court on motion of a defendant or of its own motion shall order the entry of judgment of acquittal of one or more offenses charged in the indictment or information after the evidence on either side is closed if the evidence is insufficient to sustain a conviction of such offense or offenses.” As for the general standard for determining sufficiency of the evidence, see generally 8 J. Moore, Federal Practice j[ 29.06 at 29-18 to 29-26.

      . The notification that Deep no longer had orthodontic apjdianees attached indicated a change in physical condition that would have required reevaluation of Deep’s classification, and that, under the regulations, would doubtless have required termination of his disqualification for induction (he had ceased to be an “[individual] with orthodontic appliances attached . . . .”). Even if Deep may have desired the alleged misrepresentation to prevent reexamination of his classification, it could not have done so. The local board’s actions were required to be the same, regardless of the reason for removal of the braces,


source: Caselaw Access Project

author: WALLACE, Circuit Judge:

license: Public Domain

text:
    Roger KENT et al., Plaintiffs-Appellees, v. The NORTHERN CALIFORNIA REGIONAL OFFICE OF the AMERICAN FRIENDS SERVICE COMMITTEE et al., Defendants-Appellants. Roger KENT et al., Plaintiffs-Appellants, v. The UNITED STATES and the Northern California Regional Office of the American Friends Service Committee et al., Defendants-Appellees.
    Nos. 72-1093, 72-1094.
    United States Court of Appeals, Ninth Circuit.
    May 10, 1974.

      Timothy H. Power (argued), San Francisco, Cal., for Northern Cal. Regional Office of American Friends Service Committee et al.
    Marshall W. Krause (argued), Fair-fax, Cal., Scott Crampton, Asst. Atty. Gen., John A. Townsend, Tax Div., U. S. Dept, of Justice, Washington, D. C., James Browning, U. S. Atty., John Youngquist, Asst. U. S. Atty., San Francisco, Cal., for Roger Kent et al.
    John A. Townsend (argued), Meyer Rothwacks, Scott Crampton, Asst. Atty. Gen., Tax. Div., U. S. Dept, of Justice, Washington, D. C., James L. Browning, U. S. Atty., John M. Youngquist, Asst. U. S. Atty., San Francisco, Cal., for the United States et al.
    Before CHAMBERS, CARTER and WALLACE, Circuit Judges.
   OPINION

WALLACE, Circuit Judge:

Three essentially identical and consolidated interpleader and injunctive relief actions were brought in the district court in an attempt to test the constitutionality of congressional spending on the conflict in Viet Nam and the constitutionality of the federal telephone tax. (Section 4251 of the Internal Revenue Code of 1954, 26 U.S.C. § 4251.) The district judge dismissed the actions. We affirm.

Instead of paying the 10% federal tax on their telephone bills, certain California taxpayers (trustors) paid the amounts into express trusts of which the plaintiffs-appellants (trustees) are charged with the duty of determining whether the telephone tax is constitutional. If the trustees determined the tax was constitutional, the trusts required them to pay the money to the United States. On the other hand, if the trustees determined the tax was unconstitutional, they were to pay the funds to the appellant The Northern California Regional Office of the American Friends Service Committee (NCAF). Since the trusts had two contingent beneficiaries and the trustees did not know to which of two competing claimants they were liable, they brought interpleader actions. The trustees also sought injunctions to prevent the Internal Revenue Service from collecting the tax, alleging that the tax was unconstitutional-essentially on the grounds that the tax is a burden on and a prior restraint of freedom of speech and that the tax is unconstitutional because the revenues therefrom are used to support an undeclared and thus an unconstitutional war.

I. INTERPLEADER

Statutory interpleader, 28 U. S.C. § 1335, requires that at least two of the adverse claimants be of diverse citizenship. The United States, for the purposes of interpleader statute, is not a citizen of any state. United States v. Dry Dock Savings Inst., 149 F.2d 917 (2d Cir. 1945) (interpreting the predecessor of section 1335, 28 U.S.C. § 41(26)); Superior Beverage Co. v. Ohio, 324 F.Supp. 564, 567 (N.D.Ohio, 1971); First National Bank v. United States, 172 F.Supp. 757, 758 (S.D.Tex. 1959); 3A J. Moore, Federal Practice ¶22.09[3], at 3067 (2d ed. 1974). Therefore, the requisite diversity is lacking.

Appellants, however, argue that 28 U.S.C. § 2410(a)(5), which waives sovereign immunity in actions affecting property on which the United States has a lien, implicitly annuls the diversity requirement when the United States is a defendant. We disagree. Section 2410(a)(5) presupposes a valid inter-pleader action. In Shaw v. United States, 331 F.2d 493, 496 (9th Cir. 1964), we said:

[I]t is the position of this Circuit that 28 U.S.C. § 2410 does not, in addition to waiving sovereign immunity, confer jurisdiction upon the federal courts. Seattle Ass’n of Credit Men v. United States, 9 Cir., 240 F.2d 906; Wells v. Long, 9 Cir., 162 F.2d 842.

See also First National Bank v. United States, 172 F.Supp. 757 (S.D.Tex.1959).

In 1966, section 2410 was amended, but that amendment does not change our rule. Section 2410(a)(5), the Federal Tax Lien Act of 1966, was designed “to conform the lien provisions of the internal revenue laws to the concepts developed in [the] Uniform Commercial Code. It represents an effort to adjust the provisions in the internal revenue laws relating to the collection of taxes of delinquent persons to the more recent developments in commercial practice . . . .” 1966 U.S.Code Cong. & Admin.News 3722.

Thus, under our rule, if there is to be jurisdiction for this interpleader action, section 1335 must be applicable. In the instant action, the United States and NCAF are the alleged claimants. Since under section 1335 an interpleader action will not lie where there is only one claimant and the United States, Superior Beverage Co. v. Ohio, supra; First National Bank v. United States, supra, the district court properly dismissed the interpleader action.

There is an additional reason to deny an interpleader action in this case. The terms of the trust indicate that the trustees knew of the competing claims before the trust was ever established. They voluntarily placed themselves in the position of being subject to adverse claims by multiple claimants. Inter-pleader, which is an equitable remedy, is not available to one who has voluntarily accepted funds knowing they are subject to competing claims. 45 Am.Jur.2d Interpleader § 18, at 446 (1969). See Calloway v. Miles, 30 F.2d 14 (6th Cir. 1929). The trustees were not frustrated stake holders attempting to solve a problem foisted upon them. They were misusing an otherwise valid remedy primarily in an attempt to test their views on the Viet Nam conflict. The trustees, knowing of the competing claims, voluntarily took upon themselves the duty of deciding which of the adverse claimants was entitled to the fund. As such, this court should and does refuse to relieve the trustees from the embarrassment in which they voluntarily placed themselves.

Aside from the requirements of a valid interpleader action, allowing interpleader under the facts of this case could disrupt the orderly procedures created by Congress for handling tax litigation. The administration of the fiscal needs o'f the United States is undoubtedly a monumental task and is of vital importance to the nation. Congress has provided a system in which judicial review of tax liability may be obtained. In Flora v. United States, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960), the Supreme Court recognized that the procedures for obtaining judicial review of tax liability were designed to be the exclusive methods for litigating federal tax liability. In the instant case, the taxpayers could have contested their tax liability and the constitutionality of the tax in a refund suit as was done in Kalish v. United States, 411 F.2d 606 (9th Cir.), cert. denied 396 U.S. 835, 90 S.Ct. 93, 24 L.Ed.2d 86 (1969). The present attempt to litigate the constitutionality of and liability for the tax can only be characterized as a “hybrid” method condemned by the Supreme Court in Flora, 362 U.S. at 163. The procedure devised by the present taxpayers is outside the exclusive scheme provided by Congress.

II. INJUNCTION

A. Standing

Trustees have standing to assert an interpleader action because both the United States and the NCAF assert adverse claims to the fund which they hold as trustees. However, the trustees have no standing to enjoin the collection of taxes from the taxpayers themselves. Nonetheless, the trustees argue that the district court should have joined the taxpayers (trustors) under Fed.R.Civ.P. 19(a) rather than dismiss the case for lack of standing. However, since the taxpayers were so numerous, the district judge did not abuse his discretion in deciding joinder was not feasible.

There is no doubt that as to the trust fund, the trustees are the real party in interest by virtue of Fed.R.Civ.P. 17(a). But Rule 17(a) means only that the trustees have a real interest in the trust fund. Rule 17(a) does not give them standing; “real party in interest” is very different from standing. 6 C. Wright & A. Miller, Federal Practice and Procedure § 1542, at 641 (1971).

The crux of the standing issue is whether the two-part test for challenging tax statutes has been met;

First, the taxpayer must establish a logical link between that status and the type of legislative enactment attacked. . . . Secondly, the taxpayer must establish a nexus between that status and the precise nature of the constitutional infringement alleged. Under this requirement, the taxpayer must show that the challenged enactment exceeds specific constitutional limitations imposed upon the exercise of the congressional taxing and spending power and not simply that the enactment is generally beyond the powers delegated to Congress by Art. I, § 8.

Flast v. Cohen, 392 U.S. 83, 102-103, 88 S.Ct. 1942, 1954, 20 L.Ed.2d 947 (1968). Since the trustees are not the taxpayers and their only interest in the litigation is in the trust fund, they lack standing to contest the tax. We reject appellants’ argument that they should be deemed to stand in the shoes of the taxpayers.

B. 26 U.S.C. § 742

Title 26 U.S.C. § 7421 provides in part that “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." une xorce of this statute, by itself, is enough to defeat appellants’ claim for injunctive relief. Appellants argue that section 7421 does not bar injunctive relief when “it is clear that under no circumstances could the Government ultimately prevail.” Enochs v. Williams Packing & Navigation Co., Inc., , 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d 292 (1962). The full context from which appellants quote from Enochs, however, shows that the appellants’ claim must fail;

The manifest purpose of § 7421(a) is to 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. Nevertheless, 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 [Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422], 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.” Id., [284 U.S.] at 509 [52 S.Ct. at 263].
We believe that the question of whether the Government has a chance of ultimately prevailing is to be 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.

Id. at 7 (emphasis added and footnote omitted). The inevitability of government defeat in this case is far from clear and appellants have shown us no reason to think otherwise. There is nothing in this case to show that the government’s case is a “lost cause.” Thrower v. Miller, 440 F.2d 1186, 1188 (9th Cir. 1971).

III. CONCLUSION

Since we hold that the district court was correct in dismissing the complaint, we need not reach appellants’ claims that the tax violated due process or is a burden on freedom of speech. The remainder of appellants’ claims are without merit. The trial judge was not required to recuse himself under 28 U. S.C. § 144. The motion was made after judgment and, from the record, it does not appear that the judge was prejudiced against the appellants. Nor do we believe a three-judge court was required to decide these issues.

Affirmed.


author: ROSS, Circuit Judge.

text:
    Nathaniel MOSLEY et al., Appellants, v. GENERAL MOTORS CORPORATION et al., Appellees.
    No. 73-1884.
    United States Court of Appeals, Eighth Circuit.
    Submitted April 19, 1974.
    Decided May 31, 1974.

      Marilyn Holifield, New York City, for appellants; Louis Gilden, St. Louis, Mo., Jack Greenberg, James M. Nabrit, III, Morris J. Bailer, Marilyn J. Holifield, New York City, on the brief.
    Charles Hodge, Washington, D. C., for amicus curiae.
    James E. McDaniel, St. Louis, Mo., for appellee.
    Before ROSS AND STEPHENSON, Circuit Judges, and VAN PELT, Senior District Judge.

       ROBERT VAN PELT, Senior District Judge, District of Nebraska, sitting by designation.

   ROSS, Circuit Judge.

Nathaniel Mosley and nine other persons joined in bringing this action individually and as class representatives alleging that their rights guaranteed under 42 U.S.C. § 2000e et seq. and 42 U.S.C. § 1981 were denied by General Motors and Local 25, United Automobile, Aerospace and Agriculture Implement Workers of America [Union] by reason of their color and race. Each of the ten named plaintiffs had, prior to the filing of the complaint, filed a charge with the Equal Employment Opportunity Commission [EEOC] asserting the facts underlying these claims. Pursuant thereto, the EEOC made a reasonable cause finding that General Motors, Fisher Body Division and Chevrolet Division, and the Union had engaged in unlawful employment practices in violation of Title VII of the Civil Rights Act of 1964. Accordingly, the charging parties were notified by EEOC of their right to institute a civil action in the appropriate federal district court, pursuant to § 706(e) of Title VII, 42 U.S.C. § 2000e-5(e).

In each of the first eight counts of the twelve-count complaint, eight of the ten plaintiffs alleged that General Motors, Chevrolet Division, had engaged in unlawful employment practices' by: “discriminating against Negroes as regards promotions, terms and conditions of employment”; “retaliating against Negro employees who protested actions made unlawful by Title VII of the Act and by discharging some because they protested said unlawful acts”; “failing to hire Negro employees as a class on the basis of race”; “failing to hire females as a class on the basis of sex”; “discharging Negro employees on the basis of race”; and “discriminating against Negroes and females in the granting of relief time.” Each additionally charged that the defendant Union had engaged in unlawful employment practices “with respect to the granting of relief time to Negro and female employees” and “by failing to pursue 6a grievances.” The remaining two plaintiffs made similar allegations against General Motors, Fisher Body Division. All of the individual plaintiffs requested injunctive relief, back pay, attorneys fees and costs. Counts XI and XII of the complaint were class action counts against the two individual divisions of General Motors. They also sought declaratory and injunctive relief, back pay, attorneys fees and costs.

General Motors moved to strike portions of each count of the twelve-count complaint, to dismiss Counts XI and XII, to make portions of Counts I through XII more definite, to determine the propriety of Counts XI and XII as class actions, to limit the scope of the class purportedly represented, and to determine under which section of Rule 23 Counts XI and XII were maintainable as class actions. The district court ordered that “insofar as the first ten counts are concerned, those ten counts shall be severed into ten separate causes of action,” and each plaintiff was directed to bring a separate action based upon his complaint, duly and separately filed. The court also ordered that the class action would not be dismissed, but rather would be left open “to each of the plaintiffs herein, individually or collectively ... to allege a separate cause of action on behalf of any class of persons which such plaintiff or plaintiffs may separately or individually represent.”

In reaching this conclusion on joinder, the district court followed the reasoning of Smith v. North American Rockwell Corp., 50 F.R.D. 515 (N.D.Okla.1970), which, in a somewhat analogous situation, found there was no right to relief arising out of the same transaction, occurrence or series of transactions or occurrences, and that there was no question of law or fact common to all plaintiffs sufficient to sustain joinder under Federal Rule of Civil Procedure 20(a). Similarly, the district court here felt that the plaintiffs’ joint actions against General Motors and the Union presented a variety of issues having little relationship to one another; that they had only one common problem, i. e. the defendant; and that as pleaded the joint actions were completely unmanageable. Upon entering the order, and upon application of the plaintiffs, the district court found that its decision involved a controlling question of law as to which there is a substantial ground for difference of opinion and that any of the parties might make application for appeal under 28 U.S.C. § 1292(b). We granted the application to permit this interlocutory appeal and for the following reasons we affirm in part and reverse in part.

Rule 20(a) of the Federal Rules of Civil Procedure provides:

All persons may join- in one action as plaintiffs if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action. .

Additionally, Rule 20(b) and Rule 42(b) vest in the district court the discretion to order separate trials or make such other orders as will prevent delay or prejudice. In this manner, the scope of the civil action is made a matter for the discretion of the district court, and a determination on the question of joinder of parties will be reversed on appeal only upon a showing of abuse of that discretion. Chicago, R. I. & P. R. R. v. Williams, 245 F.2d 397, 404 (8th Cir.), cert. denied, 355 U.S. 855, 78 S.Ct. 83, 2 L.Ed.2d 63 (1957). To determine whether the district court’s order was proper herein, we must look to the policy and law that have developed around the operation of Rule 20.

The purpose of the rule is to promote trial convenience and expedite the final determination of disputes, thereby preventing multiple lawsuits. 7 C. Wright, Federal Practice and Procedure § 1652 at 265 (1972). Single trials generally tend to lessen the delay, expense and inconvenience to all concerned. Reflecting this policy, the Supreme Court has said:

Under the Rules, the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged.

United Mine Workers of America v. Gibbs, 383 U.S. 715, 724, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966).

Permissive joinder is not, however, applicable in all cases. The rule imposes two specific requisites to the joinder of parties: (1) a right to relief must be asserted by, or against, each plaintiff or defendant relating to or arising out of the same transaction or occurrence, or series of transactions or occurrences; and (2) some question of law or fact common to all the parties must arise in the action.

In ascertaining whether a particular factual situation constitutes a single transaction or occurrence for purposes of Rule 20, a case by case approach is generally pursued. 7 C. Wright, Federal Practice and Procedure § 1653 at 270 (1972). No hard and fast rules have been established under the rule. However, construction of the terms “transaction or occurrence” as used in the context of Rule 13(a) counterclaims offers some guide to the application of this test. For the purposes of the latter rule,

“Transaction” is a word of flexible meaning. It may comprehend a series of many occurrences, depending not so much upon the immediateness of their connection as upon their logical relationship.

Moore v. New York Cotton Exchange, 270 U.S. 593, 610, 46 S.Ct. 367, 371, 70 L.Ed. 750 (1926). Accordingly, all “logically related” events entitling a person to institute a legal action against another generally are regarded as comprising a transaction or occurrence. 7 C. Wright, Federal Practice and Procedure § 1653 at 270 (1972). The analogous interpretation of the terms as used in Rule 20 would permit all reasonably related claims for relief by or against different parties to be tried in a single proceeding. Absolute identity of all events is unnecessary.

This construction accords with the result reached in United States v. Mississippi, 380 U.S. 128, 85 S.Ct. 808, 13 L.Ed.2d 717 (1965), a suit brought by the United States against the State of Mississippi, the election commissioners, and six voting registrars of the State, charging them with engaging in acts and practices hampering and destroying the right of black citizens of Mississippi to vote. The district court concluded that the complaint improperly attempted to hold the six county registrars jointly liable for what amounted to nothing more than individual torts committed by them separately against separate applicants. In reversing, the Supreme Court said:

But the complaint charged that the registrars had acted and were continuing to act as part of a state-wide system designed to enforce the registration laws in a way that would inevitably deprive colored people of the right to vote solely because of their color. On such an allegation the joinder of all the registrars as defendants in a single suit is authorized by Rule 20(a) of the Federal Rules of Civil Procedure . . . . These registrars were alleged to be carrying on activities which were part of a series of transactions or occurrences the validity of which depended to a large extent upon “question [s] of law or fact common to all of them.”

Id. at 142-143.

Here too, then, the plaintiffs have asserted a right to relief arising out of the same transactions or occurrences. Each of the ten plaintiffs alleged that he had been injured by the same general policy of discrimination on the part of General Motors and the Union. Since a “state-wide system designed to enforce the registration laws in a way that would inevitably deprive colored people of the right to vote” was determined to arise out of the same series of transactions or occurrences, we conclude that a company-wide policy purportedly designed to discriminate against blacks in employment similarly arises out of the same series of transactions or occurrences. Thus the plaintiffs meet the first requisite for joinder under Rule 20(a).

The second requisite necessary to sustain a permissive joinder under the rule is that a question of law or fact common to all the parties will arise in the action. The rule does not require that all questions of law and fact raised by the dispute be common. Yet, neither does it establish any qualitative or quantitative test of commonality. For this reason, cases construing the parallel requirement under Federal Rule of Civil Procedure 23(a) provide a helpful framework for construction of the commonality required by Rule 20. In general, those cases that have focused on Rule 23(a)(2) have given it a permissive application so that common questions have been found to exist in a wide range of context. 7 C. Wright, Federal Practice and Procedure § 1763 at 604 (1972). Specifically, with respect to employment discrimination cases under Title VII, courts have found that the discriminatory character of a defendant’s conduct is basic to the class, and the fact that the individual class members may have suffered different effects from the alleged discrimination is immaterial for the purposes of the prerequisite. Hicks v. Crown Zellerbach Corp., 49 F.R.D. 184, 187-188 (E.D.La.1968). See also Washington v. Lee, 263 F.Supp. 327, 330 (M.D.Ala.1966), aff’d per curiam, 390 U.S. 333, 88 S.Ct. 994, 19 L.Ed.2d 1212 (1968); Like v. Carter, 448 F.2d 798, 802 (8th Cir. 1971), cert. denied, 405 U.S. 1045, 92 S.Ct. 1309, 31 L.Ed.2d 588 (1972). In this vein, one court has said:

[Ajlthough the actual effects of a discriminatory policy may thus vary throughout the class, the existence of the discriminatory policy threatens the entire class. And whether the Damoclean threat of a racially discriminatory policy hangs over the racial class is a question of fact common to all the members of the class.

Hall v. Werthan Bag Corp., 251 F.Supp. 184, 186 (M.D.Tenn.1966). See also Johnson v. Georgia Highway Express, Inc., 417 F.2d 1122, 1124 (5th Cir. 1969); Mack v. General Electric Co., 329 F.Supp. 72, 75-76 (E.D.Pa.1971); Bennett v. Gravelle, 323 F.Supp. 203, 219 (D.Md.), aff’d, 451 F.2d 1011 (4th Cir. 1971), cert. denied, 407 U.S. 917, 92 S.Ct. 2451, 32 L.Ed.2d 692 (1972).

The right to relief here depends on the ability to demonstrate that each of the plaintiffs was wronged by racially discriminatory policies on the part of the defendants General Motors and the Union. The discriminatory character of the defendants’ conduct is thus basic to each plaintiff’s recovery. The fact that each plaintiff may have suffered different effects from the alleged discrimination is immaterial for the purposes of determining the common question of law or fact. Thus, we conclude that the second requisite for joinder under Rule 20(a) is also met by the complaint.

For the reasons set forth above, we conclude that the district court abused its discretion in severing the joined actions. The difficulties in ultimately adjudicating damages to the various plaintiffs are not so overwhelming as to require such severance. If appropriate, separate trials may be granted as to any particular issue after the determination of common questions.

The judgment of the district court disallowing joinder of the plaintiffs’ individual actions is reversed and remanded with directions to permit the plaintiffs to proceed jointly. That portion of the district court’s judgment that withholds determination of the propriety of the purported class until further discovery is affirmed. We consider the application of the appellants for attorneys fees on this appeal to be premature, and they will be denied without prejudice to their right to reassert that claim upon final disposition of the case.


author: WALINSKI, District Judge.

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner-Appellant, v. LOCAL NO. 64, FALLS CITIES DISTRICT COUNCIL OF CARPENTERS, UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, AFL-CIO, Respondent-Appellee.
    No. 73-1979.
    United States Court of Appeals, Sixth Circuit.
    Argued April 3, 1974.
    Decided May 31, 1974.
    Joseph A. Oertel, N. L. R. B., for petitioner; Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, John D. Burgoyne, Atty., N. L. R. B. Washington, D. C., on brief.
    Raymond L. Sales, Louisville, Ky., for respondent; Irwin H. Cutler, Jr., Segal, Isenberg, Sales & Stewart, Louisville, Ky., on brief.
    Before CELEBREZZE and McCREE, Circuit Judges, and WALINSKI, District Judge.

       The Honorable Nicholas J. Walinski, Judge of the United States District Court for the Northern District of Ohio, sitting by designation.

   WALINSKI, District Judge.

This case is before us on petition by the National Labor Relations Board for enforcement of its order of June 27, 1973, which is reported at 204 NLRB No. 102. In its order and accompanying decision, the Board rejected the Administrative Law Judge’s recommendation that the complaint be dismissed in its entirety and found that Respondent [hereinafter Local 64] had violated § 8(b)(1)(A) and 8(b)(2) of the National Labor Relations Act in failing to issue work permits to four carpenters who were not members of one of the local unions in the Falls Cities District Council. The Board’s order required Respondent to cease and desist from this practice, to make the employees whole, to post the usual notices and to take other steps.

The Board’s decision involves two issues: 1) whether the Act was violated; and 2) whether Respondent was responsible for the violation. Because we believe that the record offers substantial evidence to support the Board’s conclusion that the Act was violated, we will not discuss the first issue.

Responsibility for the violation of the Act is not so easily disposed of. The Administrative Law Judge found that Local 64 had an identity entirely separate from the Falls Cities District Council, and that the District Council was not the agent of Local 64 as regards the violation. The Judge found that the District Council was responsible for the violation ; and since it had not been made a party, he ordered the complaint dismissed. The board disagreed, however, and found the District Council to be the agent of Local 64 on the theory that, since Local 64 and virtually all of the other locals in the area had created the District Council and had delegated to it nearly all of the authority usually retained by the locals, liability for the Council’s conduct must be imputed to the locals themselves. Specifically, the Board concluded that T. A. Pitts, the secretary-treasurer of the District Council, had acted on behalf of the District Council and in furtherance of Local 64’s interests (of which he was President) in denying the applicants work permits, and therefore Pitts was the agent of the District Council which was in turn the agent of the local.

We are thus faced with the determination of an agency relationship. It has been said that such a determination must be made, as contemplated by the applicable statute, in light of the general law of agency, NLRB v. Int. Long. & Ware. Union, et al., 283 F.2d 558, 563 (9th Cir. 1960). 29 U.S.C. § 152(13). Indeed, this Court has held, in a somewhat analogous situation involving a Board determination, that a question of agency must be factually determined “under common law agency principles.” Ace Doran Hauling & Rigging Co. v. NLRB, 462 F.2d 190, 193 (6th Cir. 1972). Viewed in this context, the Board’s agency determination herein must be upheld if it comports with the recognized law of agency.

It is well settled that the right to control the agent is fundamental to the existence of the agency relationship. Cf. NLRB v. Cement Transport, Inc., 490 F.2d 1024, 1027 (6th Cir. 1974). See generally, 2A C.J.S. Agency § 6, and treatises and texts on Agency. Thus, the District Council was the agent of Local 64 if the facts show that Local 64 had the right to control the District Council with respect to the issuance of work permits.

The facts, however, show that it did not. The Administrative Law Judge found that Local 64 had no role in the issuance of work permits. He further found that Pitts, as President of Local 64, had no authority to issue a work permit. On the contrary, he found that Pitts’ power to issue these permits derived solely from his position as secretary-treasurer of the District Council, a position to which he had been elected not by the membership of Local 64 but by the various delegates to the District Council. Finally the Administrative Law Judge found that all the local unions which comprised the District Council had joined in delegating the power, inter alia, to issue work permits to the Council and that this is a common practice within the International Brotherhood of Carpenters.

We also note that Pitts testified at the hearing before the Administrative Law Judge that during his long experience he had never known a local union to issue a work permit and that such an act would be a violation of their Constitution and by-laws. This was corroborated by the testimony of Ernest Napier, who is the Financial Secretary of Local 64.

Judge Ordman also found that Pitts derived no salary as President of Local 64 but did as secretary-treasurer of the District Council by whom he was paid. Additionally, he found that the District Council leased its office space in a building owned by Local 64.

Considering the record as a whole, we find no substantial support for the determination that Local 64 had the right to control the District Council’s issuance of work permits. Therefore, the District Council could not have been the agent of Local 64 according to the relevant agency principles.

Having found that the Board’s determination lacks support of substantial evidence, we have no alternative but to deny enforcement.

Enforcement of the Board’s order is denied.


author: PER CURIAM.

text:
    LABORERS’ INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO, LOCAL NO. 83, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    No. 73-1937.
    United States Court of Appeals, Sixth Circuit.
    Argued April 18, 1974.
    Decided June 6, 1974.
    William L. Howland, Portsmouth, Ohio, for petitioner; Bannon, Howland, McCurdy & Dever, Portsmouth, Ohio, on brief.

      Edmund D. Cooke, Jr., N. L. R. B., Washington, D. C., for respondent; Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, John D. Burgoyne, Attys., N. L. R. B., Washington, D. C., on brief.
    Before PHILLIPS, Chief Judge, and MILLER and LIVELY, Circuit Judges.
   PER CURIAM.

This case is before the court on the petition of the Laborers’ International Union of North America, AFL-CIO, Local No. 83, to review a decision of the National Labor Relations Board, and the cross-application of the Board for enforcement of its order. Reference is made to the decision of the Board, reported at 205 N.L.R.B. No. 77 (1973), for a recitation of pertinent facts.

The Board found that the Union had caused and attempted to cause Fry, Inc. (the Company) to refuse to hire Vernon Sims, Clyde Hatfield and Joe Hanna because they failed to seek employment through the Union’s hiring hall, in violation of § 8(b) (1) (A) and (2) of the National Labor Relations Act.

The Company and the Union had entered into a “pre-job conference agreement.” The Union interpreted this agreement to constitute a hiring hall agreement. The Company’s representative testified that he wasn’t sure whether or not the agreement contained a hiring hall clause and that it probably did not.

The Board found that Sims, Hanna and Hatfield had gone to the site of the Company’s project a number of times seeking employment, that there were jobs available, that local men were particularly desired by the Company and that the Company specifically had asked the Union about these men. The Board further found that the only reason these men were not hired was because the Union insisted that the pre-job conference agreement required the Company to hire men through the Union hiring hall.

The Board concluded that the General Counsel had made out a prima facie case of “cause and attempt to cause,” and, therefore, it was incumbent upon the Union to introduce the pre-job conference agreement. This agreement was never introduced into evidence.

This court is of the view that there is substantial evidence on the record to support the Board’s conclusion that the Union violated § 8(b)(1)(A) and (2) of the Act. Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

It is well settled that non-discriminatory hiring hall provisions are not unlawful. Local 357, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. N.L.R.B., 365 U.S. 667, 81 S.Ct. 835, 6 L.Ed.2d 11 (1961); N.L.R.B. v. International Union of Operating Engineers, Local No. 12, 323 F.2d 545 (9th Cir. 1963). See generally Annotation, 38 A.L.R.2d 413. Where there is no hiring hall provision, a union may not insist that a company hire solely through its hiring hall. N.L.R.B. v. Teamsters Local Union No. 676, 419 F.2d 1274 (3rd Cir. 1969).

The Union contends that its agreement with the Company contained a hiring hall provision. This provision, it is argued, justified the Union’s activities with respect to Sims, Hanna and Hatfield. The Union, however, did not introduce this agreement into evidence, but rather contends that the Board had the burden of producing it as part of its ease.

In N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 18 L.Ed.2d 1027 (1967), the Supreme Court stated:

“[0]nce it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate objectives since proof of motivation is most accessible to him.”

See also N.L.R.B. v. Fleetwood Trailer Co., Inc., 389 U.S. 375, 378, 380, 88 S.Ct. 543, 19 L.Ed.2d 614 (1967); N.L.R.B. v. Jemco, Inc., 465 F.2d 1148, 1152 (6th Cir. 1972), cert. denied, 409 U.S. 1109, 93 S.Ct. 911, 34 L.Ed.2d 690 (1973). We think that this shifting burden principle is equally applicable here where the Union caused or attempted to cause the Company to refuse to hire Sims, Hatfield and Hanna because they failed to seek employment through the Union’s hiring hall.

We do not think it fatal to the Board’s decision that the pre-job conference agreement was not introduced in evidence. The Union was seeking to justify its actions and was in a better position to produce the agreement than was the Board.

Once the Board made a prima facie case, the burden shifted to the Union to show that its actions were authorized by the pre-job conference agreement.

Enforcement granted.


text:
    HICKMAN GARMENT COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    No. 73-2182.
    United States Court of Appeals, Sixth Circuit.
    Decided June 4, 1974.
    Norman Geiger, Brooklyn, N. Y., for petitioner.
    Elliott Moore, Deputy Associate Gen. Counsel, N. L. R. B., Washington, D. C., for respondent.
    Before PHILLIPS, Chief Judge, and CELEBREZZE and PECK, Circuit Judges.
   PER CURIAM.

This case is before the court on petition of Hickman Garment Company to review the decision of the National Labor Relations Board in Board cases Nos. 9-CA-4872, 9-CA-4944, 9-CA-4967, 9-CA-5288 and 9-CA-5420. The decision of the Board is reported at 206 N.L.R.B. No. 2 (1973).

The Board filed a cross application for enforcement of its order awarding back pay. On April 1, 1974, the Board filed a motion for dismissal of the petition for review for want of prosecution and for summary allowance of the Board’s cross-application for enforcement of its order. The Company has not filed its brief .within the time prescribed by Rule 31(a), Fed.R.App.P., and has not responded to the motion of the Board filed April 1, 1974. No request for extension of time has been requested by the Company.

Heretofore this court has enforced the order of the Board in unfair labor practice proceedings, including the affirmative requirements that the Company offer reinstatement and back pay to six named diseriminatees, bargain with the Union upon request, and post appropriate notices. Hickman Garment Co. v. N. L. R. B., 437 F.2d 956 (6th Cir. 1971), enforcing 184 N.L.R.B. No. 99 (1970), and 184 N.L.R.B. No. 103 (1970). This court thereafter adjudged Hickman Garment Company to be in civil contempt for not complying with and obeying, the order of this court. N. L. R. B. v. Hickman Garment Co., 471 F.2d 611 (6th Cir. 1972)

In the decision of the Board in the present ease, the Company has been ordered to pay the following amounts to the six diseriminatees:

Lizzie Hendrix $2,752.00
Evelyn Jackson 1,477.60
Maycel Phipps 1,688.80
Connie Kennedy 3,996.82
Blossie Westbrook 3,092.10
Beverly Callison 1,806.70

These amounts are to be increased by interest added at the rate of six per cent per annum computed in the manner prescribed in Isis Plumbing & Heating Co., 138 N.L.R.B. 716 (1962), less such tax withholdings as are required by federal and state laws.

Upon consideration, this court directs that an order be entered as follows: (1) Dismissing the petition to review filed by Hickman Garment Company on December 4, 1973, for failure to comply with Rule 31(a), Fed.R.App.P. for not filing a brief within the time required by that rule; (2) granting the motion of the Board for summary enforcement of its order; and (3) summarily enforcing the order of the Board directing back pay for the six diseriminatees hereinabove named in the amounts prescribed in the order of the Board.

      . In another case involving Hickman Garment Company, this court enforced the Board’s decision reported at 172 N.L.R.B. 1168 (1968), in which the Board found that this company discriminatorily discharged 19 employees in violation of the Act. Hickman Garment Co. v. N. L. R. B., 408 F.2d 379 (6th Cir. 1969). The supplementary order of the Board determining the amount of back pay owed diseriminatees was enforced in the decision of this court reported at 471 F.2d 610 (1972), enforcing 196 N.L.R.B. 428 (1972).


text:
    ENVIRONMENTAL DEFENSE FUND, INC., et al., Appellants, v. Howard H. CALLAWAY, Secretary of the Army, et al., Appellees.
    No. 74-1011.
    United States Court of Appeals, Eighth Circuit.
    Submitted April 18, 1974.
    Decided June 3, 1974.

      Arthur A. Benson, II, Kansas City, Mo., for appellants.
    Eva R. Datz, Atty., Dept, of Justice, Washington, D. C., Lyman Field and F. Philip Kirwan, Kansas City, Mo., for appellees.
    Before MATTHES, Senior Circuit Judge, ROSS, Circuit Judge, and VAN PELT, Senior District Judge.

       ROBERT VAN PELT, Senior District Judge, District of Nebraska, sitting by designation.

   PER CURIAM.

This action arises under the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4321 et seq., and presents the issue of whether or not an Environmental Impact Statement (EIS) filed under section 102 of NEPA is adequate to meet the requirements of that statute. The district court held that the EIS was adequate and refused to give the plaintiffs the injunctive relief they sought. We affirm that decision.

This litigation centers around the Harry S. Truman Dam and Reservoir Project being built by the U. S. Army Corps of Engineers (Corps) on the Osage River in west central Missouri. Originally the plaintiffs brought an action in the District Court for the Western District of Missouri seeking a declaration that an EIS was required for the project under NEPA and also seeking to enjoin all activities on the project until one was properly filed. District Judge John W. Oliver agreed that an EIS should be filed but refused to enjoin all ongoing activities related to the project. Environmental Defense Fund, Inc. v. Froehlke, 348 F.Supp. 338 (W.D.Mo.1972). Plaintiffs appealed to this Court, claiming that an injunction against all ongoing activities should have been issued. This Court affirmed Judge Oliver’s decision. Environmental Defense Fund, Inc. v. Froehlke, 477 F.2d 1033, 1037 (8th Cir. 1973).

In the course of that earlier opinion we noted that the district court had retained jurisdiction of the matter and would have an opportunity to rule on the sufficiency of the EIS and “to review, under the arbitrary and capricious test, the decision made by the defendants with respect to proceeding with the project.” Id. at 1037. After the final EIS was completed the plaintiffs renewed their plea to have the EIS declared inadequate by the court and again asked for blanket injunctive relief until such time as an adequate statement was filed. Plaintiffs also sought review of the decision to continue with the project, claiming that the Corps had acted arbitrarily and capriciously.

In a lengthy Memorandum Opinion Judge Oliver rejected the plaintiffs’ claims and refused to grant an injunction. Environmental Defense Fund, Inc. v. Froehlke, 368 F.Supp. 231, 234 (W.D.Mo.1973). He specifically found that the impact statement met all the requirements of section 102(2) (C) of NEPA and that the Corps had considered all appropriate alternatives to the project as required by section 102(2)(D) of the Act. He also found that the Corps’ decision to continue the project was not an abuse of authority and was not arbitrary, capricious or otherwise contrary to law. Id. at 245.

On appeal we have carefully reviewed the record and find that we are in complete agreement with the Findings of Fact and Conclusions of Law made by the court below with the exceptions hereinafter noted. We also agree with Judge Oliver’s general analysis regarding the scope of judicial review under NEPA. We, therefore, affirm on the basis of his opinion.

We note, however, that at one point the opinion makes extensive reference to alleged Congressional discontent with the manner in which the courts have been enforcing NEPA. Id. at 238-239. This discussion is dictum, and we neither adopt nor reject it.

At another point in the opinion there is extensive discussion of the effect, in litigation such as this, of the failure of opponents of a project to point out weaknesses and make suggestions during administrative preparation of the EIS. Id. at 241-242. The gist of this discussion is that such a failure may be considered when deciding whether or not the EIS is adequate. Since the final EIS in this case was found to be adequate without any such consideration, this reasoning, too, is dictum, and we neither adopt it nor reject it.

One final argument advanced by plaintiffs is that the trial judge abused his discretion with regard to the taxing of costs. Judge Oliver carefully analyzed the problem and gave adequate reasons for his decision in a well-reasoned “Memorandum and Order in Regard to the Taxation of Costs” published along with the decision on the merits at 368 F.Supp. 251. Basically, Judge Oliver held that the parties were to bear their own costs incurred up to the date of the first decision in this litigation that an EIS was necessary for the project. After that date, September 13, 1972, the losing party — the plaintiff— was to be taxed for costs.

We have reviewed the trial court’s memorandum, and hold that it did not abuse the wide discretion it has under Fed.R.Civ.P. 54(d).

The decision of the district court is affirmed.


author: PER CURIAM:

text:
    The NATIONAL LAMPOON, INC., Plaintiff-Appellee, v. AMERICAN BROADCASTING COMPANIES, INC., et al., Defendants-Appellants.
    No. 1088, Docket 74-1441.
    United States Court of Appeals, Second Circuit.
    Argued April 25, 1974.
    Decided May 2, 1974.
    Gordon T. King, New York City (Coudert Brothers, Carleton G. Eldridge, Jr., New York City, on the brief), for defendants-appellants.
    Harry I. Rand, New York City (Botein, Hays, Sklar & Herzberg, Julian L. Weber, Anthony S. Kaufmann, New York City, on the brief), for plaintiffappellee.
    Before LUMBARD and FEINBERG, Circuit Judges, and JAMESON, District Judge.

       Of the United States District Court for the District of Montana, sitting by designation.

   PER CURIAM:

Defendants American Broadcasting Companies, Inc., George Schlatter Enterprises, Inc. and George Schlatter appeal from a judgment of the United States District Court for the Southern District of New York, Charles L. Brieant, Jr., J., entered in favor of plaintiff-appellee The National Lampoon, Inc. after a trial without a jury, which permanently enjoined appellants from using the words “National Lampoon” or “lampoon” as the title for a television program and from using any set spelling the word “lampoon” in such a program. In his thorough opinion, reported at 376 F. Supp. 733 (1974), the judge justifiably found that the defendant broadcasting company had deliberately attempted to exploit National Lampoon’s well-known name and reputation in directing preparation of the pilot program by the other two defendants. On this basis alone the injunctive order should be affirmed, although we do not imply that the other grounds relied upon by the district court would not be sufficient, were we called upon to consider them.

Judgment affirmed.