author: GIBBONS, Circuit Judge. WEIS, Circuit Judge

text:
    Jimmie L. RODGERS and John A. Turner, Appellants, v. UNITED STATES STEEL CORPORATION et al. (two cases). Jimmie L. RODGERS and John A. Turner, Petitioners, v. UNITED STATES STEEL CORPORATION et al. Honorable Hubert I. Teitelbaum, United States District Judge, Nominal Respondent.
    Nos. 74-1815, 74-1816 and 74-2063.
    United States Court of Appeals, Third Circuit.
    Argued Oct. 24, 1974.
    Decided Jan. 24, 1975.
    As Amended Feb. 21, 1975.

      William T. Coleman, Jr., Dilworth, Paxson, Kalish, Levy & Coleman, Philadelphia, Pa., Bernard D. Marcus, Kaufman & Harris, Pittsburgh, Pa., Jack Greenberg, James M. Nabrit, III, Morris J. Bailer, Barry L. Goldstein, Deborah M. Greenberg, Eric Schnapper, New York City, for appellants.
    Carl B. Frankel, Rudolph L. Milasich, Jr., Asst. Gen. Counsels, United Steelworkers of America, Pittsburgh, Pa., Michael H. Gottesman, Bredhoff, Cushman, Gottesman & Cohen, Washington, D. C., for United Steelworkers of America, AFL-CIO and its Local 1397; Bernard Kleiman, Kleiman, Cornfield & Feldman, Chicago, 111., Leonard L. Scheinholtz, Walter P. DeForest, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., S. G. Clark, Jr., Pittsburgh, Pa., of counsel.
    Before KALODNER, GIBBONS and WEIS, Circuit Judges.
   OPINION OF THE COURT

GIBBONS, Circuit Judge.

These consolidated cases, two appeals and a petition for mandamus, bring before us aspects of a rapidly developing problem area in the law respecting the administration and prosecution of class action litigation. The successful efforts of the Equal Employment Opportunity Commission in achieving massive industry-wide consent decrees has already resulted in a burgeoning number of cases in which labor unions have contended that the decrees have imposed obligations on employers inconsistent with those seniority and job bidding practices for which they had bargained. In this instance, however, a civil rights organization representing the alleged victims of racial discrimination in the steel industry contends that a consent decree entered in another court is in fact nothing more than a “sweetheart contract” which affords black workers too little relief and which, it.argues, will have the practical effect of impeding its efforts to achieve more beneficial results through a class action instituted earlier in the Western District of Pennsylvania. This is because by the time the litigation has proceeded to judgment, many of the class members will have opted out in favor of the relief afforded by the consent decree. Unfortunately, the posture in which the cases are now before us does not permit this Court to contribute much, if anything, to the development of techniques for the balancing of the competing interests involved.

Rodgers and Turner, the appellants in No. 74^1815 and No. 74-2063, and the petitioners in No. 74 — 1816, are black employees of the defendant United States Steel Corporation and members of the defendant Unions, Local 1397, United Steelworkers of America, and United Steelworkers of America, AFL — CIO. In August 1971 they commenced suit in the Western District of Pennsylvania under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. seeking injunc-tive relief and back pay to remedy racial discrimination at the Homestead Works of the United States Steel Corporation. Rodgers and Turner sought to maintain the case as a class action pursuant to Rule 23(b)(2) Fed.R.Civ.P. on behalf of a class of more than 1200 black workers at that plant. The parties stipulated that for purposes of money liability the plaintiff class would be defined as all black persons who have been or would be employed at the Homestead Works at any time from August 24, 1971 until May 1, 1973 on jobs in the unit represented by Local 1397, while for purposes of injunc-tive relief the class would be defined as all such blacks who actually worked in the Homestead Works any time after August 24, 1971 on jobs in the unit represented by the Local. Armed with this stipulation, the plaintiffs moved on May 25, 1972 pursuant to Rule 23(c)(1), Fed.R. Civ.P. for the court to designate the action as a class action. Despite the stipulation the court did not act on plaintiffs’ motion. It was renewed on April 17, 1974. The renewed motion was prompts ed by the filing of two consent decrees on April 12, 1974, in the Northern District of Alabama which resulted from negotiations between the Equal Employment Opportunity Commission, the major steel companies and the United Steelworkers of America, AFL — CIO, the parent union of Local 1397. Plaintiffs’ moving papers disclosed that they objected to some of the terms of the consent decrees and that they intended to intervene in the Alabama action and oppose those terms. They also sought leave to send a notice of the pendency of the class action in the Western District of Pennsylvania informing potential class members of the nature of the relief sought and of their right to opt out pursuant to Rule 23(c)(2). At the same time, since the consent decree in the Alabama case provided for a back pay remedy for certain black employees in the steel industry, available only upon the signing of a release, they moved for a protective order preventing communication from the defendants to the stipulated potential class members in the instant lawsuit with respect to the Alabama consent decree.

The Western District of Pennsylvania has adopted Local Rule 34 supplementing Rule 23 Fed.R.Civ.P., and providing in part:

“(c) Within 90 days after the filing of a complaint in a class action, unless this period is extended on motion for good cause appearing, the plaintiff shall move for a determination under subdivision (c)(1) of Rule 23, Federal Rules of Civil Procedure, as to whether the case is to be maintained as a class action. In ruling upon such a motion, the Court may allow the action to be so maintained, may disallow and strike the class action allegations, or may order postponement of the determination pending discovery of such other preliminary procedures as appear to be appropriate and necessary in the circumstances. Whenever possible, where it is held that the determination should be postponed, a date will be fixed by the Court for renewal of the motion before the same judge.
(d) No communication concerning such action shall be made in any way by any of the parties thereto, or by their counsel, with any potential or actual class member, who is not a formal party to the action, until such time as an order may be entered by the Court approving the communication.”

At a hearing on September 29, 1973, on a motion by plaintiffs for leave to communicate with potential class members for discovery purposes, the court ruled that plaintiffs

“can’t contact people who are not named as parties until an order of Court. No person is to be contacted without my permission. As to the specific individual concerned after giving notice to the defendants who the individual is and what you expect to learn from him, then we can determine whether this is sufficient reason to change the general rule.
The transcript of this conference will take the place of and will be considered the order of this Court . ” (Appendix at 85a).

Thus, although Rodgers and Turner, or perhaps more precisely their attorneys, who are connected with the NAACP Legal Defense and Educational Fund, Inc., had already prosecuted the Western District of Pennsylvania case for nearly three years, at the time the Alabama decree was filed they had not yet been able to communicate in any form with the stipulated potential class members. The Alabama decree provided for communication to those members, and for the solicitation of releases in order to receive back pay.

The renewed motion for class action determination came before the district court in Pennsylvania on April 24, 1974. At that hearing the defendants agreed that they would not make any written communication to the potential class members with respect to the back pay .provisions of the Alabama consent decrees without first showing it to counsel for the plaintiffs. In addition, if counsel objected to its language, the defendants agreed to afford plaintiffs time to apply to the court for a protective order. Upon that agreement the motion for a protective order prohibiting the defendants from communicating with the potential class members was withdrawn without prejudice to its renewal. The renewed motion for class action determination and a class action notice was not acted upon. Thus, as of April 24, 1974, the defendants were free to communicate with potential class members concerning back pay provisions of the Alabama consent decrees if they first cleared the communication with the attorney for plaintiffs. However, plaintiffs were still subject to the strictures of the September 29, 1973 order and the prohibition in Local Rule 34(d).

Plaintiffs moved to intervene in the Alabama action for the purpose of seeking to stay or vacate the consent decrees. The Alabama district court granted intervention but denied a stay and rejected their objections to the terms of the decree. The plaintiffs appealed to the Fifth Circuit. That appeal is currently pending.

On June 26, 1974 plaintiffs moved before the district court for leave to communicate with six named individual members of the potential class, and for permission for their counsel to meet with the Homestead Chapter of the NAACP. The moving papers explained that two of the six had communicated with Mrs. Elizabeth Smith, Assistant Labor Director of the National Association for the Advancement of Colored People in New York, requesting information and assistance with respect to their claims of employment discrimination at the Homestead Works, and that she had referred them to the Legal Defense Fund attorneys. The Homestead Chapter of the NAACP had independently invited counsel to attend a chapter meeting and discuss the subject of discrimination at the Homestead Works. In support of their motion the plaintiffs contended that the September 29, 1973 order and Local Rule 34(d), as construed by the district court, violated constitutionally protected rights of speech and association. At the same time the plaintiffs renewed their motion for permission to communicate with potential class members. They also made a motion to compel answers to interrogatories and for production of documents. At a hearing on these motions on June 27, 1974 the court, without a written order, specifically forbade the plaintiffs’ attorneys from attending a meeting of the Homestead Chapter NAACP, scheduled for July 7. It reserved decision on the communication motions pending briefing of the first amendment issues. It ruled on the discovery motions that all discovery would be stayed until January 15, 1975, stating:

“THE COURT: There is not the slightest possibility of getting this action disposed of here, anyway, by that time [January 15, 1975] because of our commitments. Class actions by their nature are drawn out types of procedures. Therefore, to have six months to find out the effect of that [Alabama] decree doesn’t seem to me to be unreasonable.
MR. MARCUS: Are we ordered not to continue discovery until January 15th?
THE COURT: That is what I said. If we find there is a legitimate contention that we ought to have a class action, we will permit you to make that discovery.” (Appendix at 188a-89a).

No written order was made either with respect to the July 7th NAACP chapter meeting, or with respect to the staying of discovery. The plaintiffs thereafter moved that the court enter a written order with respect to these rulings and make a certification pursuant to 28 U.S.C. § 1292(b) so that they could pursue an interlocutory appeal.

On July 19 the court orally ruled on the pending motions:

“THE COURT: Now, as to the motions to certify questions to the Court of Appeals, in the exercise of what I consider to be sound discretion, that is denied.
As to the motion to communicate with the NAACP, that is denied at this time without prejudice to renewal of that motion at a time which would appear to be more appropriate to me.
Now, as to the motion to communicate with individuals who have requested that they discuss matters with counsel, that motion is granted. However, the previous order forbidding solicitation and requiring prior Court approval of all communications with any other individuals is left intact. You may talk to those six individuals, but you may not solicit anybody else, nor may you make any communications with anybody else except pursuant to Court approval.” (Appendix at 259a-60a).

At this same hearing, the attorneys for the defendants called to the court’s attention the fact that only two of the six persons supposedly seeking advice had spoken directly to Mrs. Smith at the NAACP’s New York office. The court ruled that the attorneys could speak to the other four only if they obtained affidavits from them (or any other potential class member) stating how they happened to obtain counsel. This colloquy followed:

“THE COURT: Let the people do this on their own. I can’t do that. In other words, the additional people would have to do that on their own. We don’t want to make a mistake about that. If there is any indication that these people are soliciting in that regard, that is barratry, and I will refer it to the District Attorney of Allegheny County. If there is any indication that counsel is doing that, I will refer it to the Disciplinary Committee. I don’t want that, and I can’t overemphasize that, so if individuals do it, I will refer it to the District Attorney, or you may, Mr. DeForest. If there is any indication of counsel doing it, we will go to the Disciplinary Committee.
MR. DeFOREST: To make it clear so there is no misunderstanding later, your prohibition would include the NAACP referring individuals to Mr. Marcus?
THE COURT: Well, if people want to come to see Mr. Marcus, I don’t intend to stop them from doing that. Before he may contact them, though, I want affidavits from them stating, inter alia, how they happened to contact him.
MR. MARCUS: We may contact them to that extent to get that affidavit?
THE COURT: If they contact you first.
MR. MARCUS: If they contact me first.
THE COURT: And I would want an affidavit saying they did contact you, that they do want to do that, and how they happened to do that. My restriction applies to the NAACP, too. I don’t want the NAACP running clients for Mr. Marcus.
MR. SCHNAPPER: I take it that you are not ordering the NAACP, which isn’t here technically, that if someone came and said, T have a problem. What should I do?’
THE COURT: I’m not restricting that if they do that on their own, but if they don’t do it on their own, I don’t want the organization to suggest to people that they should have a problem or seek counsel.” (Appendix at 263a — 64a).

The attorneys for plaintiffs then suggested that, in lieu of the prohibition on communication, they would agree not to represent any such persons other than in a pending class action. The court then made clear that its purpose in continuing the ban on communication was to prevent discussion of the Alabama consent decree:

“THE COURT: That is exactly what I don’t want. That is exactly what I do not want.
MR. MARCUS: This avoids any solicitation and barratry where we agree in advance not to represent them.
THE COURT: That is worse than enabling people to go to an alleged interested party and attempt to sabotage the [Alabama] settlement in Judge Pointer’s court, and I don’t want that to happen.” (Appendix at 265a — 66a).

At the July 19, 1974 hearing, the court also considered plaintiffs’ objections to a proposed letter to class members, recently approved by the Alabama court without any notice to plaintiffs or opportunity to be heard. Despite the agreement of April 24, 1971^ the court held that it would not rule on plaintiffs’ objections to the letter but would leave that matter entirely to the Alabama court. Although the plaintiffs made a request for written orders, none were filed.

Plaintiffs then filed a notice of appeal from the orders of June 27, 1974 and July 19, 1974. They also filed a petition for a writ of mandamus or prohibition with respect to those orders. On August 22, 1974 they moved before this Court for a stay of the district court orders. The motion was denied on August 23, 1974 for lack of a district court order “with reasons given for its action.” Judge Garth stated that he would also deny the stay “because the underlying district court orders of June 27 and July 19 do not appear in the record.” They did not because they appear only in the reporter’s transcript, and not in any separate order signed by the court. Plaintiffs then applied to the district court for a written order embodying the June 27 and July 19, 1974 rulings. On September 12, 1974 the district court signed a written order embodying the June 27 and July 19, 1974 rulings. Plaintiffs filed a protective notice of appeal from that order. This Court consolidated the cases. The defendants moved to dismiss the two appeals as interlocutory, and that motion was referred to this panel with the consolidated cases. Plaintiffs also renewed their motion for a stay pending appeal, which motion is also before this panel.

We are asked to review, either by appeal or by mandamus:

1. The order postponing class action determination until at least January 15, 1975;
2. The order staying all proceedings in the district court, including all discovery, until at least January 15, 1975;
3. The orders restricting communications with potential members of the class by the plaintiffs or their attorneys.

Plaintiffs contend that all three orders are appealable under 28 U.S.C. § 1291 as collaterally final, that all three orders if not collaterally final, are appealable under 28 U.S.C. § 1292(a)(1) as interlocutory orders granting or denying injunctive relief, and that even if not appealable are subject to review on their petition for a writ of mandamus or prohibition.

I. Appealability Under § 1291

Plaintiffs rely on the interpretation of the final order requirement announced in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949) and Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). The difficulty with this reliance is that while the orders in question may be collateral, they must also be final. There are two aspects of the final judgment rule. One is that the order be the final disposition of the entire case. The other is that the order be the final disposition of the issue. The Cohen rule permits a limited exception with respect to the first aspect but not with respect to the second. Before an order is appealable as collaterally final three requisites must be found: The order must be a final rather than a provisional disposition of an issue; it must not be merely a step toward final disposition of the merits; and the rights asserted would be irreparably lost if review is postponed until final judgment.

Clearly, the order postponing class action determination and the order staying all proceedings are tentative rather than final. The court has made it clear that they will be reconsidered after January 15, 1975. They cannot, by even a most expansive reading of the Cohen doctrine, be brought within that holding. And this Court has always read Cohen as a narrow rather than an expansive exception to the final judgment rule. Hackett v. General Host Corp., 455 F.2d 618, 621 (3d Cir.), cert. denied, 407 U.S. 925, 92 S.Ct. 2460, 32 L.Ed.2d 812 (1972); Borden Co. v. Sylk, 410 F.2d 843, 845-846 (3d Cir. 1969).

The lack of finality of the order restricting communications to potential class members is not quite so clear. The order grants plaintiffs’ motion for leave to communicate with two potential class members, and imposes an affidavit requirement before communicating with four others. As to those four only the affidavit requirement is in issue. We do not think that the imposition of this requirement can be regarded as more than a step in the process of the court’s ultimate determination that the case will or will not be allowed to proceed as a class action. Moreover, its imposition has not been shown to be likely to cause injury which would be so irreparable as to be uncorrectable on appeal after final judgment. The order does, however, continue in effect the blanket prohibition of communications under Local Rule 34(d). Appealability of this feature is a closer question. The defendants point out that the district court has postponed communication for discovery purposes subject to reconsideration when it reconsiders the general stay, of the lawsuit, and that this ruling like the stay, must be considered to be only tentative. Looked at from the standpoint of its effect on discovery we are inclined to agree. But the order has another actual and intended effect. It prohibits communication with potential class members as to the effect of the Alabama consent decree on their rights in the instant case, should class action treatment be permitted. If by virtue of the order, potential class members are left uninformed, and sign releases pursuant to the Alabama consent decrees, those releases will undoubtedly be pleaded in the district court if a class action determination is made. When looked at from that standpoint, the finality of the order for purposes of the Cohen rule is a close issue. But because, as will be seen hereafter, we have an alternative basis of jurisdiction to consider the communication order we need not prematurely decide a difficult question of federal appellate jurisdiction.

II. Appealability Under § 1292(a)(1)

Plaintiffs contend that the orders postponing class action determination and staying discovery until January 15, 1975 are appealable as interlocutory orders denying injunctive relief. The complaint seeks permanent injunctive relief for the benefit of the class, and they urge that the effect of the postponement is the same as an order refusing the injunction.

An interlocutory order “granting, continuing, modifying, refusing or dissolving” an injunction is one which temporarily awards or refuses to award all or part of the injunctive relief sought by a claimant. 9 J. Moore, Federal Practice 1110.19, 1110.20 [1] (2d ed. 1973). An order that merely continues the case and does not reach the merits of the claim is nothing more than a step in the processing of the case and does not fall within § 1292(a)(1). See Switzerland Cheese Ass’n v. E. Horne’s Market, 385 U.S. 23, 25, 87 S.Ct. 193, 17 L.Ed.2d 23 (1966); Baltimore Contractors, Inv. v. Bodinger, 348 U.S. 176, 181, 75 S.Ct. 249, 99 L.Ed. 233 (1955); Morgenstern Chemical Co. v. Schering Corp., 181 F.2d 160, 162 (3d Cir. 1950). Here, the court has never considered the plaintiffs’ request for injunctive relief. There was no motion for a preliminary injunction and there has been no final hearing. In Hackett v. General Host Corporation, 455 F.2d at 622, we recognized that there might be instances where the refusal of a court to grant a class action designation pursuant to Rule 23(c) might amount to a denial of an injunction broader than would be appropriate for individual relief, and that such a refusal might support appellate jurisdiction under § 1292(a)(1). But the situation which we hypothesized in Hackett is not presented by this record with respect to the orders postponing class action determination and staying discovery. First, the court has not refused the class action determination, but only deferred decision. Second, the refusal cannot be construed as a denial of a preliminary injunction since none was sought. Third, the postponement poses no bar to the broadest injunctive relief sought in the .complaint should a preliminary injunction now be sought, since the class action determination may then be made.

The order barring communications stands on a different footing. It is presently operative, has nothing to do with the relief sought in the complaint, and is collateral to such relief except to the extent that by preventing communication it may result in the execution of more releases solicited pursuant to the Alabama consent decree and thereby contract the size of the ultimate class. Looked at as an order collateral to the relief sought in the complaint, and as a presently operative injunction, the communication order might be appealable under § 1292(a)(1). See United States v. Schiavo, 504 F.2d 1 (3d Cir. 1974). It is not entirely clear, however, that the court intended its order to operate as an injunction, the violation of which would be punished by contempt. At one point in the June 27, 1974 hearing the court said:

“Do you want to withdraw your request for class action? You shouldn’t have restrictions.” (Appendix at 180a).

Thus, if the prohibition on communication pursuant to Local Rule 34(d) were not obeyed, no more may have been intended by the court other than the denial of class action treatment. The September 29, 1973 transcript, it is true, contains language indicating that it would take the place of an order of the court, and may be interpreted as an order “that they can’t contact people.” (Appendix at 85a). If the September 29, 1973 order was the grant of an injunction, then the July 19, 1974 oral order and the September 12, 1974 written order were refusals to vacate or modify an injunction, appealable under § 1292(a)(1). The attorneys for the plaintiffs, with appropriate caution, declined to test an ambiguous order by violating it and risking contempt. But their doubt does not resolve the problem for us. We conclude, from the fact that there was no compliance with the procedural safeguards of Rule 65, and from the procedural posture in which the matter was before the court on September 29, 1973, that an injunction was not intended. We do so well aware that in making its rulings on July 19, 1974 the court intended to protect the Alabama decrees. That intention is not controlling. The September 29, 1973 order and the July 19 and September 12, 1974 orders did no more than refuse to grant the relief of excusing compliance with Local Rule 34(d). The attorneys could have violated the rule and run the risk of adverse action on their motion for class action determination.

Thus we conclude that none of the orders appealed from are reviewable under § 1292(a)(1).

III. Availability of Review Under § 1651

Plaintiffs’ petition for § 1651 relief seeks review of the three challenged rulings in the alternative, either by the present equivalent of the prerogative writ of mandamus, or prohibition, or certiorari. The power to issue such writs in aid of our potential appellate jurisdiction comprehends our responsibility for the orderly and efficient administration of justice within the circuit. The power will not, of course, be used to control the decisions of the trial court even if erroneous, made within that court’s jurisdiction, but may be used to confine the trial court to the proper sphere of its lawful power, or to correct a clear abuse of discretion. Applying these standards for § 1651 relief we conclude that only one of the three orders may be reviewed at this time.

The order postponing class action determination certainly cannot, in the context of this case, be regarded as outside the sphere of the court’s discretionary power or a clear abuse of discretion. In Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir.), cert. denied, 419 U.S. 885 95 S.Ct. 152, 42 L.Ed.2d 125, 43 U.S.L.W. 3213 (1974), we recognized that the district court had precisely such a power in some circumstances. Keeping in mind that no motion was made for a preliminary injunction, and that the Alabama consent decrees may make available to members of the potential class much of the injunctive relief which the plaintiffs, if successful, might achieve at final hearing, we cannot hold that postponement from June 27, 1974 to January 15, 1975 was an abuse of discretion. We have no occasion to consider whether postponement from the filing of the complaint until June 27, 1974 was proper, since it is only the court’s action at that time and on July 19, 1974 which is before us. In the circumstances existing on those dates there was no clear abuse of discretion and a § 1651 writ will not issue.

What we have said about, the order postponing class action determination applies with equal force to the court’s decision to stay all proceedings until January 15, 1975. The district court had inherent discretionary authority to stay proceedings pending litigation in another court. E. g., Landis v. North American Co., 299 U.S. 248, 254-255, 57 S.Ct. 163, 81 L.Ed. 153 (1936). Considering the circumstances here there was no clear abuse of discretion in doing so.

The order restricting communications with potential members of the class by the plaintiffs or their attorneys, however, presents quite a different problem. That order, in effect, continues in operation the across-the-board prohibition of communication authorized by Local Rule 34(d). Plaintiffs contend that this rule, as applied, is not authorized by any power conferred by Congress on district courts, is inconsistent with the Federal Rules of Civil Procedure, and violates the first amendment. Clearly, if the rule suffers from any of the claimed defects, the prevention of its operation is a matter of confining the district court to the proper sphere of its lawful power. See Sanders v. Russell, 401 F.2d 241, 243 (5th Cir. 1968). Before we get to the merits of plaintiffs’ challenge to Local Rule 34(d), however, it is appropriate to set to one side a peripheral consideration. It is clear from the colloquy quoted above that one motivation for the district court’s July 19, 1974 decision to continue in effect the ban on communication was to protect the operation of the Alabama consent decrees. Whether the Western District of Pennsylvania would have jurisdiction, on a proper application pursuant to Rule 65, Fed.R. Civ.P. to issue an injunction in aid of the jurisdiction of the Alabama district court, is a question which need not be resolved. As we pointed out at page 161, supra, no such application was made. Thus, the merits of the order must stand or fall on the validity of Local Rule 34(d).

The Local Rule operates within two separate contexts: (1) during the period between the filing of a complaint seeking class action treatment, and the Rule 23(c)(1) determination to permit the action to so proceed; and (2) after such a determination has been made. The justification urged for the Local Rule varies in the separate contexts. Once a favorable class action determination has been made, the justification for the Rule is said to flow from the court’s power, and even duty, to prevent the Rule 23 procedural device from being misused by communications which are false or misleading.

We need not decide whether, in the period following class action determination, the court’s undoubted power to impose some restrictions on first amendment rights during the course of judicial proceedings would justify a blanket prior restraint as broad as that set forth in Local Rule 34(d). In this instance we are presented only with the first context. And it is in that context that the interaction of Local Rules 34(c) and (d) becomes evident. The two provisions make clear that the District Court for the Western District of Pennsylvania has superimposed upon Rule 23 a condition that the class action device be available only to those plaintiffs willing to submit to an assertion of a dual power by the court — the power to postpone class action determination and to impose a prior restraint in the meantime. That the pri- or restraint may be of extended duration is clear; in this case it has continued for more than three years.

The imposition of such a condition upon access to the Rule 23 procedural device certainly raises serious first amendment issues. See New Jersey State Lottery Comm’n v. United States, 491 F.2d 219 (3d Cir.), cert. granted, 417 U.S. 907, 94 S.Ct. 2603, 41 L.Ed.2d 211 (1974). There is no question but that important speech and associational rights are involved in this effort by the NAACP Legal Defense and Education Fund, Inc. to communicate with potential black class members on whose behalf they seek to litigate issues of racial discrimination. See, e. g., United Transportation Union v. State Bar, 401 U.S. 576, 91 S.Ct. 1076, 28 L.Ed.2d 339 (1971); NAACP v. Button, 371 U.S. 415, 83 S.Ct. 328, 9 L.Ed.2d 405 (1963). And the interest of the judiciary in the proper administration of justice does not authorize any blanket exception to the first amendment. See Wood v. Georgia, 370 U.S. 375, 82 S.Ct. 1364, 8 L.Ed.2d 569 (1962); Craig v. Harney, 331 U.S. 367, 67 S. Ct. 1249, 91 L.Ed. 1546 (1947); Pennekamp v. Florida, 328 U.S. 331, 66 S.Ct. 1029, 90 L.Ed. 1295 (1946); Bridges v. California, 314 U.S. 252, 62 S.Ct. 190, 86 L.Ed. 192 (1941). Whatever may be the limits of a court’s powers in this respect, it seems clear that they diminish in strength as the expressions and associations sought to be controlled move from the courtroom to the outside world. See T. Emerson, The System of Freedom of Expression 449 et seq. (1970).

We should not decide difficult constitutional issues, however, without first determining if there is a statutory ground for decision. See Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974). Thus, we must first inquire whether the district court had any statutory authority to adopt Local Rule 34(b) for application in a context like the one herein presented. In making this inquiry we must take into account that the reason urged for applying the prohibition on communication is, in the words of the district court, the prevention of “barratry.”

The only statutory sources of district court rule making power are Rule 83, Fed.R.Civ.P. and 28 U.S.C. § 2071. These statutes, which probably must be read in pari materia, are broad enough to permit district court rule making with respect to the conduct of attorneys in their practice before the court. See, e. g., Schlesinger v. Teitelbaum, 475 F.2d 137, 141 (3d Cir.), cert. denied, 414 U.S. 1111, 94 S.Ct. 840, 38 L.Ed.2d 738 (1973); Sanders v. Russell, supra, 401 F.2d at 245. But the grant of rule making authority in Rule 83 authorizes the district courts to “regulate their practice in any manner not inconsistent with these rules” and § 2071 permits rules “consistent with Acts of Congress and rules of practice and procedure prescribed by the Supreme Court.” There is no general grant of legislative authority to regulate the practice of law. Gamble v. Pope & Talbot, Inc., 307 F.2d 729 (3d Cir.), cert. denied, 371 U.S. 888, 83 S.Ct. 187, 9 L.Ed.2d 123 (1962). The rules adopted must be consistent with the policy underlying Rule 23; that is a policy in favor of having litigation in which common interests, or common questions of law or fact prevail, disposed of where feasible in a single lawsuit. There is no federal common law offense of barratry, and the policy reflected in Rule 23 undoubtedly would prevent the Commonwealth of Pennsylvania from interfering, in the guise of preventing barratry, with its full implementation. Moreover, if we were to construe Rule 83 and § 2071, as they are limited by Rule 23, to authorize the adoption of local rules for controlling barratry, a serious constitutional issue of overbreadth would, be presented by the Local Rule in its present form. The Rule imposes a prior restraint on all communication, not merely communication aimed at stirring up litigation. Think what our reaction would be to a state statute which required that attorneys submit all communications to be made to persons not yet their clients to the prior approval of a court. Rather than decide that constitutional issue, however, we can dispose of this case by way of a statutory interpretation. We conclude that Congress never intended Rule 83 or § 2071 to empow- , er the district courts, as was attempted j in Local Rule 34(d) to require prior judi-I cial approval of communications between \ plaintiffs, or their attorneys, and third Í parties, when such communications seek ! to encourage common participation in a ' lawsuit. Thus, Local Rule 34(d) as presently drawn was outside the power granted to the district court and its enforcement may be prevented by this court pursuant to § 1651.

It should be understood that we are not here considering the validity of a local rule regulating the content of communications to class members after a class action determination has been made. Drafting such a rule would require a careful consideration of over-breadth. Whether prior screening of every communication is really necessary for the court to discharge its obligations to class members is a matter which the judges of the Western District of Pennsylvania may well address. The limited issue before us, however, is whether the district court can, prior to making a class action determination, insist on compliance with Local Rule 34(d) as a condition to the further consideration of a Rule 23(d)(1) motion. We hold that it may not.

We are aware that the District Court for the Western District of Pennsylvania adopted Local Rule 34(d) in response to the suggestion in the Manual for Complex Litigation prepared under the sponsorship of the Federal Judicial Center. See 1 J. Moore, Federal Practice H 1.41, at 27-32 (2d ed. 1974, Part 2). The Manual, outlining specific potential abuses of Rule 23, proposes that those areas be controlled by local rules. But instead of proposing specific rules aimed at specific abuses, it suggests:

“In order to guard against unapproved action of [the] sort [referred to], it is recommended that each court adopt a local rule forbidding unapproved direct or indirect written and oral communications by formal parties or their counsel with potential and actual class members, who are not formal parties, provided that such proposed written communications submitted to and approved by order of court may be distributed to the parties or parties designated or described in the court order of approval.” 1 J. Moore, supra, at 28 — 29 (emphasis in original) (footnote omitted).

The Manual goes on, however, to suggest that the local rule should except certain circumstances from its operation.

These exceptions were not incorporated in Local Rule 34(d). Id. at 29. Moreover the committee which drafted the Manual probably went too far in its apparent assumption that Craig v. Harney, supra and Bridges v. California, supra would permit the vesting of unreviewa-ble discretion in a district court to impose a prior restraint on communication or association. 1 J. Moore, supra, at 29 n. 28. In any event the panel had no power to enlarge the statutory rule making authority of the district courts.

A writ will be granted with respect to the orders restricting communications with potential members of the class by the plaintiffs or their attorneys. The petition for § 1651 relief will be otherwise denied. The appeals will be dismissed. The motions for a stay of the district court’s orders pending appeal will be denied. The writ in No. 74 — 1816 and the mandate in Nos. 74 — 1815 and 74 — 2063 will issue forthwith. Each party to bear their own costs.

WEIS, Circuit Judge

(concurring):

I agree with Parts I, II, and much of III of the majority opinion but differ with its conclusion that the district court does not have the right to promulgate a rule applicable to class actions before certification has been ordered.

Rule 23 provides a means for resolving a controversy affecting a large number of parties in one proceeding in a comparatively expeditious fashion. In granting this greater flexibility, however, the rule generated a higher potential for abuse. It was this problem that led the Committee on Complex Litigation to consider the necessity for local rules and ad hoc pretrial orders.

The Manual prepared by the Committee cites four objectionable features sought to be controlled by the promulgation of a rule limiting communication:

“(1) solicitation of direct legal representation of potential and actual class members who are not formal parties to the class action;
(2) solicitation of funds and agreements to pay fees and expenses from potential and actual class members who are not formal parties to the class action;
(3) solicitation by formal parties of requests by class members to opt out in class actions under subpar-agraph (b)(3) of Rule 23; and
(4) unauthorized direct or indirect communications from counsel or a party, which may misrepresent the status, purposes and effects of the action and of court orders therein and which may confuse actual and potential class members and create impressions which may reflect adversely on the court or the administration of justice.” Manual for Complex Litigation, Part I § 1.41, at 22 (1973).

As the Manual indicates, the purpose of the rule is not merely to battle barratry but to prevent abuses of the class action device. The potential for harm does not spring into being instanter upon the certification of a class action but exists before that time. Carlisle v. LTV Electrosystems, Inc., 54 F.R.D 237 (N.D.Tex.1972); Halverson v. Convenient Food Mart, Inc., 458 F.2d 927 (7th Cir. 1972); Stavrides v. Mellon National Bank & Trust Co., 60 F.R.D. 634 (W.D.Pa.1973). To limit the effect of a rule to conditions existing after certification would be to unduly limit the ability of the court to cope with the problems.

The recommendation of the Committee on Complex Litigation has received approval from text writers. In 7A Wright & Miller, Federal Practice and Procedure: Civil § 1797, at 239, the author states:

“. . . because it could lead to abusive practices, the district court should exercise some control over communications between formal parties and passive class members. The Manual for Complex and Multi-district Litigation suggests the adoption of a local rule ‘forbidding unapproved direct or indirect written and oral communications by formal parties or their counsel with potential and actual class members, who are not formal parties * * This position is sound and provides the court with a valuable mechanism for carrying out the policies underlying Rule 23(e). In the absence of a local rule, the court can secure the same result by issuing an order corresponding to the suggested local rule on an ad hoc basis.”

See also 3B Moore’s Federal Practice H 23.75, at 23-1475.

I agree with the majority that local Rule 34, as drafted, should be set aside— not, however, because of the time period in the litigation at which it becomes effective but, rather, because it is over-broad in its wording. The suggested rule found in the Appendix to the Manual for Complex Litigation, Part II § 1.41, at 145, is more narrowly drawn and, as the majority points out, specifically exempts communications protected by a constitutional right.

There is a distinction between litigation alleging violations of civil rights and a routine damage suit, and that factor is troublesome here. As an indication of its concern with the effective presentation of civil rights cases, Congress has provided for the allowance of counsel fees in many situations. This action tends both to negate any intention by Congress to authorize a local rule of court that unduly infringes upon free speech in that sphere as well as to remove one of the reasons for controlling communication with potential class members. A broad interpretation of local Rule 34 in the factual posture of this case also runs afoul of the right to group legal action directed to the preservation or protection of the legal interests of an organization’s members. United Transportation Union v. State Bar of Michigan, 401 U.S. 576, 91 S.Ct. 1076, 28 L.Ed.2d 339 (1971). Accordingly, it seems to me that local Rule 34, as it applies to civil rights actions, must be set aside as being unnecessarily broad. However, I would not foreclose the district court from enacting a rule similar to that suggested by the Manual, applicable whenever class action designation has been requested as well as after certification has been granted.

      . At least two other cases recently decided by this court have presented related issues. Equal Employment Opportunity Commission v. American Telephone & Telegraph Co., 506 F.2d 375 (3d Cir., 1974); Utility Contractors Assoc. of New Jersey v. Toops, Nos. 74-1130-1132, 507 F.2d 83 (3d Cir., 1974); a third case is pending, Jersey Central Power & Light Co. v. Local Unions 327 et al., appeal docketed, No. 74-2016. Cf. Bryan v. Pittsburgh Plate Glass Co., 494 F.2d 799 (3d Cir.), petition for cert. filed, 43 U.S.L.W. 3128 (U.S. Sept. 10, 1974).

      . They also alleged a violation of 42 U.S.C. § 1981, and a violation of the defendant unions’ duty of fair representation. 29 U.S.C. §§ 151, 185.

      . United States v. Allegheny-Ludlum Indus., Inc., Civ.No. 74-P-339-S (N.D.Ala., Apr. 12, 1974).

      . See pp. 163-164 infra for a discussion of the statutory sources of district court rule making.

      . The NAACP Legal Defense and Educational Fund, Inc. is a nonprofit corporation engaged in furnishing legal assistance in certain cases involving claims of racial discrimination. It is distinct from the National Association for the Advancement of Colored People, and the distinction is significant for purposes of this case.

      . United States v. Allegheny-Ludlum Indus., Inc., Civ.No. 74-P-339-S (N.D.Ala., Apr. 12, 1974), Consent Decree I, i[ 17 at 43. (Appendix at 328a).

      . Id., 11 18(g) at 48. (Appendix at 333a).

      . United States v. Allegheny-Ludlum Indus., Inc., 63 F.R.D. 1 (N.D.Ala., 1974) (Memorandum of Opinion and Order) (Appendix at 356a-65a). The stay of the release provision pending appeal was denied on June 17, 1974.

      . On July 23, 1974 plaintiffs appeared before the Alabama court. It did not authorize any communication to the Homestead class members.

      . No. 74 1815

      . No. 74-1816

      . No. 74-2063

      . McClellan v. Carland, 217 U.S. 268, 30 S.Ct. 501, 54 L.Ed. 762 (1910).

      . Schlagenhauf v. Holder, 379 U.S. 104, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964); La Buy v. Howes Leather Co., 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957).

      . Will v. United States, 389 U.S. 90, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967).

      . E. g., Texaco, Inc. v. Borda, 383 F.2d 607 (3d Cir. 1967).

      . Rule 83 states in full:
      “Each district court by action of a majority of the judges thereof may from time to time make and amend rules governing its practice not inconsistent with these rules. Copies of rules and amendments so made by any district court shall upon their promulgation be furnished to the Supreme Court of the United States. In all cases not provided for by rule, the district courts may regulate their practice in any manner not inconsistent with these rules.”
      28 U.S.C. § 2071 states in full:
      “The Supreme Court and all courts established by Act of Congress may from time to time prescribe rules for the conduct of their business. Such rules shall be consistent with Acts of Congress and rules of practice and procedure prescribed by the Supreme Court.”

      . The appendix to the Manual includes the following proposed rule:
      “Suggested Local Rule No. 7 — Prevention of Potential Abuses of Class Actions In every potential and actual class action under Rule 23, F.R.Civ.P., all parties thereto and their counsel are hereby forbidden, directly or indirectly, orally or in writing, to communicate concerning such action with any potential or actual class member not a formal party to the action without the consent of and approval of the communication by order of the Court. Any such proposed communication shall be presented to the Court in writing with a designation of or description of all addresses and with a motion and proposed order for prior approval by the Court of the proposed communication and proposed addresses. The communications forbidden by this rule, include, but are not limited to, (a) solicitation directly or indirectly of legal representation of potential and actual class members who are not formal parties to the class action; (b) solicitation of fees and expenses and agreements to pay fees and expenses, from potential and actual class members who are not formal parties to the class action; (c) solicitation by formal parties to the class action of requests by class members to opt out in class actions under subparagraph (b)(3) of Rule 23, F.R.Civ.P.; and (d) communications from counsel or a party which may tend to misrepresent the status, purposes and effects of the action, and of actual or potential Court orders therein, which may create impressions tending, without cause, to reflect adversely on any party, any counsel, the Court, or the administration of justice. The obligations and prohibitions of this rule are not exclusive. All other ethical, legal and equitable obligations are unaffected by this rule.
      This rule does not forbid (1) communications between an attorney and his client or a prospective client, who has on the initiative of the client or prospective client consulted with, employed or proposed to employ the attorney, or (2) communications occurring in the regular course of business or in the performance of the duties of a public office or agency (such as the Attorney General) which do not have the effect of soliciting representation by counsel or misrepresenting the status, purposes or effect of the action and orders therein. Nor does the rule forbid communications protected by a constitutional right. However, in such instances the person making the communication shall within five days after such communication file with the Court a copy of such communication, if in writing, or an accurate and substantially complete summary of the communication if oral.” 1 J. Moore, supra, fl 1.41, at 188-89 (emphasis supplied).
      Since none of the examples set forth beginning with the third sentence of the proposed rule, or the limitations contained in its second paragraph were included in Local Rule 34(d), we have no occasion to consider whether the limitations, especially the italicized portion, would suffice to cure the overbreadth of the first two sentences of the Manual rule or that the examples, under the rule of ejusdem gen-eris, would sufficiently limit such over-breadth.

      . Local Rule 34 was enacted in 1971. The Manual’s suggested rule at that time did not contain the exemption for communications protected by a constitutional right as now appears in the 1973 edition.


source: Caselaw Access Project

author: LEWIS R. MORGAN, Circuit Judge:

license: Public Domain

text:
    Glen L. WOOD, Plaintiff-Appellant, v. HOLIDAY INNS, INC., et al., Defendants-Appellees. INTERSTATE INNS, INC., and Jessie Goynes, Defendants-Appellants, v. GULF OIL CORPORATION, Defendant-Appellee.
    No. 74-1753.
    United States Court of Appeals, Fifth Circuit
    Feb. 17, 1975.

      Joseph D. Phelps, Albert P. Brewer, Montgomery, Ala., Thomas J. Gardner, III, Tupelo, Miss., for Wood.
    Charles A. Tarter, Birmingham, Ala., Robert A. Huffaker, Montgomery, Ala., for Interstate Inns & Jessie Goynes.
    William C. Woods, Jr., Robert D. Norman, Birmingham, Ala., for Holiday Inns.
    W. F. Horsley, Opelika, Ala., for Gulf Oil Corp.
    Before GODBOLD, MORGAN and CLARK, Circuit Judges.
   LEWIS R. MORGAN, Circuit Judge:

After a jury verdict, the district court ordered, inter alia, a new trial for one of the several defendants below. At oral argument on this appeal we raised, sua sponte, the question of whether this court had jurisdiction to consider a decision which was not a final judgment as to all of the parties. See Wagner v. Burlington Industries, Inc., 423 F.2d 1319 (6th Cir. 1970).

Briefs were then submitted on the question of jurisdiction and the case was subsequently remanded for certification by the district court, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. See Turtle v. Institute for Resource Management, Inc., 154 U.S.App.D.C. 341, 475 F.2d 925 (1973); United States v. Crow, Pope and Land Enterprises, Inc., 474 F.2d 200 (5th Cir. 1973); Aetna Insurance Co. v. Newton, 398 F.2d 729 (3rd Cir. 1968). The district court having certified that “there is no just reason for delay,” we proceed to the merits. See Kull v. Mid-America Pipeline Co., 476 F.2d 271 (5th Cir. 1973).

I.

Glen Wood, an executive vice president of SAR Manufacturing Company, checked into the Holiday Inn facility at Phenix City, Alabama, during the late afternoon of February 1, 1972. When Wood checked in, he tendered payment for his room by using his Gulf Oil Company credit card. An imprint was made of his card and it was returned to him as was the normal practice.

After Gulf issues a card it continues to evaluate a customer account and, if it concludes from available information that a customer cannot afford to pay, it cancels credit to that customer. In order to facilitate this process, Gulf furnishes to National Data Corporation a list of all credit cancellations. Under the system established by Gulf, Holiday Inns are authorized to contact National Data, which disperses undetailed credit information concerning Gulf credit cards upon inquiry by telephone from properly identified parties authorized to extend credit to Gulf card holders. The information is generally brief and consists of either an authorization or denial of credit.

Gulf maintained a file on Wood. In compiling its information Gulf had received a credit report on the plaintiff from a credit bureau in Tupelo, Mississippi. The report was incomplete in that it did not contain the plaintiff’s annual income; in all other respects the credit report was favorable to the plaintiff.

The credit manager of Gulf testified that on January 17, 1972, sixteen days preceding the incident in question, he reviewed the credit file of Wood. Although the file was current at the time he reviewed it, he expressed concern about the increasing amounts which were being charged on the card in relation to Wood’s monthly income and made the determination that Wood’s card should be placed in the “derog” file. Apparently Wood had not informed Gulf that the credit card was used for business as well as personal expenses. Wood was not notified, but Gulf directed National Data to give the following reply to anyone seeking credit approval on Wood:

Pick up travel card. Do not extend further credit. Send card to billing office for reward.

Sometime during the early morning of February 2, 1972, Jessie Goynes, the “night auditor” of the Phenix City Holiday Inn, called National Data in Atlanta on a toll-free number provided by Gulf in order to confirm the plaintiff’s credit card number and receive an authorization to extend credit on the basis of the card. He received a communication from National Data advising him: “Do not honor this sale. Pick up the credit card and send it in for reward.”

Wood testified that he was awakened about 5:00 a.m. by Goynes who told Wood that he, Goynes, needed the credit card for the purpose of making another imprint, since the imprint at the time of the registration was indistinct. Goynes came to appellant’s room and took his card for the avowed purpose of securing the imprint and with the promise to return it in a few minutes. After 30 minutes Wood became concerned because his card had not been returned and was fearful that someone had taken it under a scheme to fraudulently secure it. Wood then dressed and went to the front desk of the motel where he was told by Goynes that the card was “seized upon the authority of National Data” and that cash payment was required. Goynes refused to call Gulf Oil at appellant’s request. Wood then paid in cash and left the motel. Upon returning home Wood called Gulf and explained that he used the card for business purposes. He complained that his account was current and his credit was immediately reinstated.

Goynes, however, stated that after getting the directive from National Data, he telephoned the plaintiff’s room at 7:00 a.m., and advised him that he was unable to obtain credit authorization and requested plaintiff to surrender the card. Goynes said that Wood voluntarily complied.

At any rate, Wood’s anger and frustration continued to build. Three days later, while he was relating the incident to a friend, he had a heart attack, precipitated apparently by the stress of the incidents surrounding the revocation of credit.

Wood sued the Gulf Oil Corporation, Holiday Inns, Inc., Interstate Inns, Inc. (the owner of the Phenix City Holiday Inn) and Jessie Goynes. Interstate and Goynes denied any negligence or wrongful conduct and asserted by way of cross-claim that they were acting under the direction of Gulf and were therefore entitled to indemnification by Gulf.

After trial, the jury returned a verdict in favor of Wood but apportioned damages in the amounts of $25,000 compensatory damages against Gulf, $25,000 punitive damages against Interstate and Goynes, and $10,000 punitive damages against Holiday Inns. The court then granted the motions of Gulf and Holiday Inns, Inc., for judgments notwithstanding the verdict and granted the motion of Interstate and Goynes for a new trial.

Wood appeals. Interstate and Goynes also appeal the district court’s action in overturning the jury’s verdict on the cross-claim in their favor through the granting of Gulf’s motion for judgment notwithstanding the verdict. In evaluating the propriety of the trial court’s entry of judgment notwithstanding the verdict, we consider all the evidence, but do so in a light most favorable to the party opposing the motion. Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc). “If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict,” granting a motion for judgment notwithstanding the verdict is proper. Id. But, “if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions,” the motion should be denied. Id.

II.

Wood’s primary claim against Gulf is based upon the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 — 1681t (1974). The Act charges “consumer reporting agencies” and users of “consumer credit reports” with various responsibilities. Failure to discharge these duties appropriately may give rise to civil liability. See 15 U.S.C. §§ 1681n, 1681o.

Wood alleged that Gulf negligently failed to comply with the provisions of the Fair Credit Reporting Act as both a consumer reporting agency and a user of a consumer report. Gulf argues that it was not a consumer reporting agency as defined in 15 U.S.C. § 1681a(f), and the district court so held, apparently as a matter of law.

The Act defines a consumer reporting agency as:

[A]ny person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties 15 U.S.C. § 1681a(f).

Gulf vigorously asserts that it falls outside the purview of this statute because no third party was furnished a report. In essence, Gulf contends, and the district court held, that the credit in this case was to be extended only by Gulf, not by Interstate. Hence, while Gulf did terminate Wood’s credit vis-a-vis Gulf, it did not make a report advising Interstate as to whether to extend its own credit.

Much of the confusion in this case stems from the multifaceted position of the Phenix City facility, the recipient of Gulf’s communication. The Phenix City Holiday Inn accepted the Gulf credit card and was therefore Gulf’s representative in facilitating the extension of Gulf’s credit. But the Phenix City facility also honored a number of major credit cards, and, in fact, nothing prevented the Phenix City Inn from extending credit on its own account.

The communication by Gulf to the Phenix City Inn was made to a separate business entity. However, the credit to be extended was Gulf’s, and the Phenix City facility was merely acting as Gulf’s representative in extending the credit. Hence, the communication was not “for the purpose of furnishing consumer reports to third parties.” It was merely directed from Gulf to its local representative, made for the purpose of protecting Gulf rather than for the purpose of influencing the Phenix City Inn’s own credit decision.

Wood next maintained that Gulf is liable under 15 U.S.C. § 1681m(a) as a user of a credit report. This section provides:

Whenever credit or insurance for personal, family, or household purposes, or employment involving a consumer is denied or the charge for such credit or insurance is increased either wholly or partly because of information contained in a consumer report from a consumer reporting agency, the user of the consumer report shall so advise the consumer against whom such adverse action has been taken and supply the name and address of the consumer reporting agency making the report.

The district court held that there was no evidence that Wood was damaged by Gulf’s failure to report the name and address of the reporting agency. Wood renews his argument on appeal, contending that if Gulf had informed him promptly of its decision to terminate his credit, the incident at the Holiday Inn would have been avoided.

Apparently, the only requirement placed upon a “user” of a credit report is the duty to disclose the name and address of the reporting agency when credit is denied. 15 U.S.C. § 1681m. There is no evidence that the actions of Goynes or the reaction of Wood would have been any different if Wood had been told at the time his credit card was withdrawn that Gulf held a favorable credit report from the Tupelo reporting agency.

We need not base our decision upon the timing of the notification, however, for there is no indication that Gulf relied upon this report in making its decision to revoke Wood’s credit. Gulf certainly had a credit report in its possession, but there is uncontradicted testimony that this report played no part in Gulf’s decision. Of course, the jury would normally be free to disregard the denials of a company holding a credit report that it used the report in evaluating a consumer.

Here, however, there was simply nothing in the consumer report which could have caused Gulf to terminate Wood’s credit. Not only was all of the information contained in the report already in. Gulf’s possession, but the only inference that one could draw from the report was favorable to Wood. Indeed the condition which caused the termination of credit— Wood’s monthly income in relation to the charges on his account — was in no way conveyed by the report. Hence, we feel that the district judge properly dismissed the cause of action based upon the “user” provision of the Fair Credit Reporting Act.

Wood’s final theory of liability was based upon the notion that Goynes acted as Gulf’s agent when he seized the credit card. The district court characterized Wood’s complaint as an allegation that his injury had been caused by breach of the common law duty of the innkeeper to his guests. Since there was no evidence that Gulf had acted as an innkeeper in this ease, the lower court absolved Gulf of any liability. Alternatively, the judge held that there was no substantial evidence that Goynes acted as the agent of Gulf when he seized the card.

Wood stipulated at the pre-trial hearing of October 4, 1973, that one of his allegations was based upon the breach of the innkeeper’s duty. However, the pre-trial order indicates Wood also averred that he was subjected to “offensive, abusive and insulting conduct, action and language” by Goynes and that Gulf’s liability is predicated “upon the actions of Jessie Goynes, if Goynes is determined to be the agent of Gulf Oil.” Therefore, we do not believe that Wood’s allegation against Gulf was based upon breach of the innkeeper’s duty. Rather, we believe that Wood’s alleged cause of action sounds in tort, at least as against Gulf, and it is therefore appropriate to consider the question of the agency relationship between Goynes and Gulf.

None of the parties in this case has presented a very enlightening discussion of the alleged principals’ liability for Goynes’ actions. This is at least partly attributable to the opaque state of agency law in Alabama.

Numerous tests have been set forth in Alabama cases to aid in determining the question of agency. These tests furnish assistance, but no definite conclusions, since they are always enunciated within the context of a particular factual setting. Ridgeway v. Sullivan-Long & Hagerty, Inc., 39 Ala.App. 341, 98 So.2d 665, 667 (Ala.App.1967). “Control” is a factor most often mentioned. Id. A principal-agent relationship is said to exist if the alleged principal reserves the right of control over the conduct and activities of the purported agent. Alabama Power Company v. Bodine, 213 Ala. 627, 105 So. 869 (1925). The distinction between “authoritative direction and control,” on one hand, and “mere suggestions as to detail,” on the other, is an important one. Tuscaloosa Veneer Co. v. Martin, 233 Ala. 567, 172 So. 608 (1937).

The cases to which the parties have cited us invariably refer to a master-servant relationship, although the opinions are couched in “principal-agent” terms. A master is a species of a principal and a servant is a species of an agent. Restatement (Second) of Agency § 2, comment (a) (1958). Ordinarily, a principal is not liable for physical harm caused by the negligent conduct of a non-servant agent during the performance of the principal’s business, if the latter neither intended nor authorized the result nor the manner of performance. Restatement (Second) of Agency § 250 (1958). “It is only when to the relation of principal and agent there is added that right to control the physical details as to the manner of performance which is characteristic of the relation of master and servant that the person in whose service the act is done becomes subject to liability for the physical conduct of the actor.” Id. In order to ascertain the extent of the principal’s liability for his agent’s tortious acts, we will therefore assume the correct test is whether the alleged principal had the right to control the physical details of the manner of the alleged agent’s performance.

The existence and scope of a principal-agent relationship is generally for the jury to determine, Riley v. Ford Motor Co., 442 F.2d 670, 672 (5th Cir. 1971); Treadwell Ford, Inc. v. Wallace, 49 Ala.App. 308, 271 So.2d 505 (1973), and the burden of proving agency rests upon the party asserting its existence, Johnson v. Shenandoah Life Insurance Co., 291 Ala. 389, 281 So.2d 636, 640 (1973).

The relationship between Interstate and Goynes is a source of confusion in this case. Not only are both of these parties represented by the same attorney, but the other litigants in the case have consistently treated Interstate and Goynes as a single party, combined, for purposes of reference, under the rubric “Innkeeper.” It is conceded by all parties that Goynes acted as the agent and servant of Interstate; Gulf and Holiday Inns, Inc. deny a principal-agent relationship with Interstate. However, the culpability of Gulf and that of Holiday Inns, Inc., as principals is based upon the relationship between Goynes and each of the companies as well as the companies’ positions vis-a-vis Interstate.

Gulf has argued throughout this appeal that when a local Holiday Inn extends credit on Gulf’s credit card, it is extending Gulf’s credit rather than its own. Indeed, the Gulf credit system allows the local Holiday Inn to extend up to $150 of Gulf’s credit without even contacting a “higher authority” for certification. Moreover, Gulf’s agreement with National Data provided that the latter was to supply credit information upon request to “dealers, employees, and agents” of Gulf. At trial Gulf acknowledged that these categories included the Phenix City Holiday Inn. In light of these facts, it would not seem unreasonable for a jury to conclude that the Phe-nix City Inn was Gulf’s agent for the extension of Gulf’s credit and the revocation of Gulf credit cards.

Indeed, we believe a jury could have reasonably concluded that Interstate was Gulf’s servant in that Gulf controlled the manner in which Interstate rendered the service of extending credit or revoking credit cards. Cf. Restatement (Second) of Agency § 220 (1958). Although Gulf would have us believe that its vast credit network operated virtually without supervision, the record indicates that Gulf, in fact, exercised a great deal of control over its credit operations. By virtue of their respective agreements with Holiday Inns, Inc., all Holiday Inns were required to accept the Gulf credit card and to contract with Gulf for this purpose. Gulf sent out detailed instructions on the use of the credit system, and cancellation bulletins three times a month, both of which contained instructions as to the authority and procedure for obtaining dishonored credit cards. Finally, Gulf representatives monitor the Holiday Inns in their respective areas by actually visiting the facilities and providing them with instructions and information as to the use and acceptance of the Gulf card. In light of these facts, we believe the jury could fairly conclude that Gulf, and not Interstate, determined the manner in which Gulf’s credit would be extended or refused. Hence, the status of Interstate vis-a-vis Gulf is a matter for the jury.

If Gulf is to be held liable for the actions of Goynes, he must be found to have acted as its sub-agent or perhaps, sub-servant. Gulf certainly did not hire Goynes directly, nor did it control the hours of his employment. But Gulf’s agreement with Interstate implicitly assumed that the latter, as a corporate identity, would hire servants to perform the day to day details required in extending Gulf’s credit or revoking credit cards. As described by the Restatement of Agency, a sub-servant is one who is appointed by the servant to perform functions undertaken by the servant for the master and subject to control as to his physical conduct. Restatement (Second) of Agency § 5, Reporters Notes (1958). In such a situation, the sub-servant would have to be subject to control by the master as to his physical activities before the master would be liable for the sub-servant’s tortious conduct. Id.

The district court focused almost entirely upon Goynes’ seizure of Wood’s credit card in evaluating the extent of Gulf’s supervision and control over Goynes. But in the overall context of Gulf’s credit network, Gulf’s supervision over Goynes appears to be more detailed. By virtue of his employment, as a servant of Interstate, Goynes’ duties included the general supervision and management of the Phenix City facility at night. In this capacity, he presumably had authority to extend up to $150 of Gulf’s credit, without even contacting anyone.

Goynes’ activities in extending credit and obtaining dishonored credit cards obviously inured to Gulf’s benefit. In fact, Goynes had obtained dishonored credit cards for Gulf in the past. When he seized Wood’s card he acted on the information conveyed to him by Gulf through National Data and pursuant to the authority vested in him by Gulf. The record clearly reveals that Gulf provided Goynes, through Interstate, with instructions on the process for obtaining dishonored cards. Indeed, they specifically cautioned that force, intimidation, or process of law was not to be used in order to obtain a Gulf card. The law is clear that if an agent’s act was incident to carrying out the duties assigned to him by his master, the master may be held liable, even though he did not authorize the agent’s means, and also though the agent may have sought to accomplish the master’s business in a manner contrary to the master’s expressed instructions. Solimica of Gulf Coast, Inc. v. Braggs, 285 Ala. 396, 232 So.2d 638, 642 (1970). That Gulf controlled Goynes’ activities to some degree is obvious. Whether there was sufficient control of his physical activities by Gulf to render the company liable is a jury question.

“[A] judgment notwithstanding the verdict should not be granted unless under the evidence, together with all inferences that can be reasonably drawn therefrom, there can be but one reasonable conclusion as to the proper judgment.” Continental Insurance Co. of New York v. Sherman, 439 F.2d 1294, 1300 (5th Cir. 1971). We believe that the existence of contradictory yet reasonable inferences in the case before us renders the district court’s judgment notwithstanding the verdict as to Gulf improper. However, only one of Wood’s theories could properly result in Gulf’s liability. Since the jury’s verdict could have been based on any of the theories we remand this aspect of the case for a new trial on the question of Goynes’ status as a servant of Gulf.

III.

Wood also asks us to review the district court’s grant of a new trial to Interstate and Goynes. The lower court set aside the verdict against these defendants and granted a new trial because, inter alia, the form of the verdict indicated that the jury was obviously confused. It is settled law that a trial court’s ruling on a motion for a new trial will not be reviewed in an appellate court in the absence of a clear abuse of discretion. Faircloth v. Lamb-Grays Harbor Co., Inc., 467 F.2d 685, 697 (5th Cir. 1972); United States v. 1160.96 Acres of Land, Etc., Holmes County, Mississippi, 432 F.2d 910, 915 (5th Cir. 1970); United States for the Use and Benefit of Weyerhauser Co. v. Bacon Construction Co., Inc., 430 F.2d 420, 423 (5th Cir. 1970); Armstrong v. Jones, 376 F.2d 345, 346 (5th Cir. 1967).

The grant of a new trial in this case was not an abuse of discretion, for the form of the verdict indicated confusion. For example, the jury awarded differing amounts of damages against Holiday Inns, Inc., and Interstate, in spite of the fact that the liability of both parties resulted proximately from the single act of Goynes. A plaintiff cannot ordinarily recover a judgment for different amounts against joint tortfeasors. Bull v. Albright, 254 Ala. 29, 47 So.2d 266 (1955).

Where verdicts in the same case are inconsistent on their faces indicating that the jury was confused, a new trial is certainly appropriate and may even be required. See Hopkins v. Coen, 431 F.2d 1055 (6th Cir. 1970). Therefore, we will not overturn the trial court’s decision.

IV.

Finally, Wood appeals the district court’s conclusion that there was no substantial evidence upon which a jury could reasonably decide that Goynes was the agent of Holiday Inns, Inc. The district court based its conclusion upon the finding that Interstate and Goynes were not operating the business of Holiday Inns, Inc., that Holiday Inns, Inc., owned no interest in the Phenix City facility, that Holiday Inns, Inc., maintained only a franchise agreement with Interstate, and that Holiday Inns, Inc., had no right of control over Goynes when he obtained the credit card.

In reaching its determination that Goynes was not the agent of Holiday Inns, Inc., the district court focused almost exclusively on the relationship between Interstate and Holiday Inns, Inc. In assessing the extent of Holiday Inns, Inc.’s liability for Goynes’ actions it is again appropriate to analyze Goynes’ position in “sub-agency” terms. There is considerable evidence in the record indicating a high degree of control over Interstate by Holiday Inns, Inc. The license agreement between the two parties required Interstate to build and maintain the facility as specified by the parent company, and to observe strictly the “Rules of Operation” as promulgated by the Holiday Inns, Inc., board of directors. Interstate was also required to permit regular inspection of the Phenix City facility by Holiday Inn inspectors in order to insure compliance with the Rules of Operation. The agreement further provided that any substantial violation of its terms would give Holiday Inns, Inc., the right to cancel Interstate’s license. It was implicit in the agreement that Interstate as a corporate entity would not maintain the Phenix City Inn, but would hire servants for this purpose.

We believe that this was sufficient evidence from which a jury could reasonably conclude that Holiday Inns, Inc., should be liable for Goynes’ actions. However, we do not base our holding on the degree of control that Holiday Inns, Inc., maintained over Goynes. Rather we believe that Wood presented more than insubstantial evidence as to the liability of Holiday Inns, Inc., on a theory of apparent authority.

An agency relationship may arise from acts and appearances which lead others to believe that such a relationship has been created. Busby v. Walker, 84 So.2d 304, 307 (La.App.1955). This concept of apparent authority is based upon manifestations by the alleged principal to third persons, and reasonable belief by those persons that the alleged agent is authorized to bind the principal. Gizzi v. Texaco, Inc., 437 F.2d 308, 309 (3rd Cir. 1970); Johnson v. Shenandoah Life Insurance Co., 281 So.2d 636, 640 (Ala., 1973). “The manifestations of the principal may be made directly to the third person, or may be made to the community, by signs or advertising.” Gizzi v. Texaco, Inc., 437 F.2d 308, 309 (3rd Cir. 1970).

Questions of apparent authority are questions of fact, and are therefore for the jury to determine. System Investment Corp. v. Montview Acceptance Corp., 355 F.2d 463 (10th Cir. 1966); Frank Sullivan Co. v. Midwest Sheet Metal Works, 335 F.2d 33 (8th Cir. 1964); Lind v. Schenley Industries, Inc., 278 F.2d 79 (3rd Cir. 1960). The license agreement between Holiday Inns, Inc., and Interstate provided that the Phenix City facility should be constructed and operated so that it would be “readily recognizable by the public as part of the national system of ‘Holiday Inns.’ ” Indeed, the Phenix City facility was required to use the same service marks and trademarks, and exterior and interi- or decor as the Holiday Inns owned by the parent company. A jury could therefore reasonably conclude that the license agreement required the Phenix City facility to be of such an appearance that travelers would believe it was owned by Holiday Inns, Inc.

The gravamen of Wood’s complaint against Holiday Inns, Inc., is based upon the breach of the innkeeper’s common law duty to his guests. Although the innkeeper’s duty was apparently delictual in origin, See Anon. [cited generally as The Innkeepers Case] Y.B. Eas. 42 Ed. III, f. 11, pi. 13 (1369), breach of this duty in Alabama appears to sound in contract. When Wood contracted with the Phenix City Holiday Inn for lodging he contracted for proper treatment by the servants of the innkeeper. See Dixon v. Hotel Tutwiler Operating Co., 214 Ala. 396, 108 So. 26, 28 (1926). However, there is virtually no way Wood could have known that the servants in the Phenix City facility were servants of Interstate, not of Holiday Inns, Inc. Indeed, the manifestations that Holiday Inns, Inc., required Interstate to make could only have served to convince Wood that Jessie Goynes was a servant of the parent company.

We believe that reasonable men could differ regarding Wood’s evidence of apparent authority and that the issue should therefore be determined by the jury. Cf. Gizzi v. Texaco, Inc., 437 F.2d 308 (3rd Cir. 1970). The district court charged the jury below that the relationship of agency between Goynes and Holiday Inns, Inc., could be implied if the jury found that Holiday Inns, Inc., through its advertising and control, held out to the general public that Interstate Inns in Phenix City, Alabama, was its agent. On the basis of these instructions, the jury held Holiday Inns, Inc., liable for Goynes’ actions. However, the jury manifested its confusion as to the proper application of law to the facts by holding Holiday Inns, Inc., liable in an amount different from that of Interstate Inns, although the liability of both alleged principals was based upon the same act. Rather than merely reinstating the jury’s verdict, then, we believe the interests of justice would be better served by remanding Wood’s action against Holiday Inns, Inc., to the district court for retrial.

V.

Cross-appellants Interstate and Goynes appeal the lower court’s decision denying indemnification. We believe the district court was correct.

Under Alabama law, an agent is entitled to indemnification for any amounts he has been required to pay for his principal in the performance of his agency. See, e. g., Lauderdale v. Peace Baptist Church of Birmingham, 246 Ala. 178, 19 So.2d 538 (1944). However, the principal is not required to indemnify the agent for harm resulting solely from the agent’s negligence. Continental Insurance Co. of New York v. Sherman, 439 F.2d 1294, 1299 (5th Cir. 1971). Hence, in the absence of agreements to the contrary, an agent has no right to indemnity for damages suffered by reason of his own fraud, misconduct or other tort, even if the wrong was committed within the scope of the agent’s employment. See American Automobile Insurance Co. v. Penn Mutual Indemnity Co., 161 F.2d 62 (3rd Cir. 1947).

Goynes and Interstate have introduced no substantial evidence upon which a reasonable jury could conclude that Gulf was negligent. The only relevant action undertaken by Gulf was its directive to pick up Wood’s credit card. However, by virtue of a statement contained on the card, and in the credit card application signed by Wood, Gulf retained the contractual right to revoke the credit card without notice. Hence, Gulf’s decision to terminate Wood’s credit was not tortious, and Goynes and Interstate have shown no duty which Gulf is alleged to have breached.

The theory of Wood’s case is based upon the harm he is alleged to have suffered because of the manner in which his card was revoked. Any harm to Wood must have resulted solely from the actions of Goynes, since Gulf has not been shown to have been negligent. We therefore believe no substantial evidence has been presented which would justify the indemnification of Goynes and Interstate.

For the reasons set forth above, we affirm in part, reverse in part, and remand for proceedings not inconsistent with this opinion.

      . We also note that the legal rights of the plaintiff are to be determined by the law and the facts as established in the case and not by the language asserting the claim. See 2A J.W. Moore, Federal Practice, § 8.14 and cases cited therein.

      . This rule appears to be the law in Alabama. See General Exchange Insurance Corp. v. Findlay, 219 Ala. 193, 121 So. 710 (1929). However, at least one case holds that a principal is liable even for the tortious acts of his agent, if those acts are performed in the prosecution of the principal’s business, and if the agent is acting within the scope of his employment. See Sayers v. Boyles, 280 Ala. 153, 190 So.2d 707 (Ala.1966). This case may be harmonized with the stricter test since it involved an employee whose physical acts, by definition, were subject to the control of his employer. See Alabama Power Co. v. Key, 224 Ala. 286, 140 So. 233 (1932).

      . It is generally not necessary for a third party who is attempting to hold a principal liable to specify which type of authority is relied upon. See Lind v. Schenley Industries, Inc., 278 F.2d 79, 86 (3rd Cir. 1960).

      . “One of the things which a guest for hire at a public inn has the right to insist upon is respectful and decent treatment at the hands of the innkeeper and his servants. That is an essential part of the contract whether it is express or implied. This right of the guest necessarily implies an obligation on the part of the innkeeper that neither he nor his servants will abuse or insult the guests, or indulge in any conduct or speech that may unnecessarily bring upon him physical discomfort or distress of mind.” Dixon v. Hotel Tutwiler Operating Co., 214 Ala. 396, 108 So. 26, 28 (1926) quoting De Wolf v. Ford, 193 N.Y. 397, 403, 86 N.E. 527 (1908). See also James v. Governor’s House, Inc., 284 Ala. 404, 225 So.2d 815, 819 (1969); Florence Hotel Company v. Bumpas, 194 Ala. 69, 69 So. 566 (1915).

      . In Miller v. Sinclair Refining Co., 268 F.2d 114 (5th Cir. 1959), the plaintiff, a patron of a Sinclair service station, was severely burned when a car driven by another customer skidded on gravel within the perimeter of the station, struck a gas pump, and caused a fire. Relying upon Florida law, this court held that there was no evidence in the record indicating any reliance by the plaintiff, in his decision to patronize the station, on the advertising or trademark of Sinclair. The court therefore rejected plaintiff’s theory of apparent authority and affirmed the grant of summary judgment to Sinclair.

        At trial in this case Wood said that he normally stayed at Holiday Inn facilities, but the court did not permit him to explain his reasons for doing so. Since Holiday Inns, Inc.’s liability may be based upon apparent authority, Wood should be allowed to explain his reasons at retrial.