text:
    BLUE BELL, INC., Plaintiff-Appellant, v. JAYMAR-RUBY, INC., Defendant-Appellee.
    Nos. 752, 829, Dockets 73-2398, 73-2380.
    United States Court of Appeals, Second Circuit.
    Argued April 15, 1974.
    Decided May 17, 1974.

      Walter D. Ames, Washington, D. C. (Watson, Cole, Grindle & Watson, Washington, D. C., Aaron B. Karas, New York City, of counsel), for plaintiff-appellant.
    Robert M. Newbury, Chicago, 111. (Pattishall, McAuliffe & Hofstetter, David C. Hilliard, Chicago, 111. and Elihu Inselbuch, New York City, of counsel), for defendant-appellee.
    Before KAUFMAN, Chief Judge, CLARK, Associate Justice, and SMITH, Circuit Judge.

       united States Supreme Court, retired, sitting by designation.

   J. JOSEPH SMITH, Circuit Judge:

These are cross-appeals from an order of the United States District Court for the Southern District of New York, Whitman Knapp, Judge, dismissing plaintiff’s trademark infringement action and defendant’s counterclaim for attorneys’ fees. We affirm although on grounds somewhat different from those of the district court.

I. PLAINTIFF’S INFRINGEMENT ACTION

Plaintiff’s contention that its “Jeanie” trademark on its women’s sportswear is infringed by defendant’s use of its “Jaymar” trademark on its men’s slacks is without merit. We begin with the related questions of the similarity of, and likelihood of confusion between, the two marks — obviously the critical elements of an infringement action. Here we must agree with the district court that the possibility of such confusion is at most negligible.

Taking the two marks as a whole, Sleeper Lounge Co. v. Bell Manufacturing Co., 253 F.2d 720, 722 (9th Cir. 1958), it is obvious that “Jaymar” will not be mistaken for “Jeanie.” Plaintiff argues, however, that the proper comparison is between the oversized “J’s” which dominate both marks. Assuming arguendo that plaintiff is correct, we nevertheless find that plaintiff’s “J” — a rather gaunt affair with no top and a pointed tip (not unlike a fishhook) — is quite different from defendant’s stylized version — a shorter, stouter, but rather calligraphic rendition with a top and a scrolled end. Compare, Application of Burndy Corp., 300 F.2d 938, 49 CCPA 967 (1962); Application of Anderson Electric Corp., 370 F.2d 593, 54 CCPA 931 (1967).

This initial finding of non-infringement — which we make independently of the district court — is buttressed by an absence of the other factors suggesting infringement. See, Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961), cert. denied, 386 U.S. 820, 82 S.Ct. 36, 7 L.Ed. 2d 25 (1961). First, plaintiff’s declining use of its “Jeanie” name demonstrates that it was far from a “strong” mark. While the trademark may have been more than merely descriptive of the clothing to which it was attached, it is doubtful that it had acquired a secondary meaning. See, W. E. Bassett Co. v.

Revlon, Inc., 354 F.2d 868, 871 (2d Cir. 1966).

Second, we find that the proximity between the disputed lines (women’s and men’s sportswear) was only moderate and that there was no substantial evidence that either of the parties was likely to “bridge the gap.” See, Hyde Park Clothes, Inc. v. Hyde Park Fashions, 204 F.2d 223, 224 (2d Cir. 1953), cert. denied, 346 U.S. 827, 74 S.Ct. 46, 98 L.Ed. 351 (1953). We realize that since Hyde Park was decided, men’s and women’s apparel has had a tendency to converge and that the Trademark Trial and Appeal Board has found the two lines sufficiently related in some registration proceedings. But here there is no evidence that the two will ever conflict: According to its own officials, plaintiff has never contemplated extending the feminine “Jeanie” mark to its men’s fashions, and it is clear that the defendant, which has never manufactured women’s clothes, has no intention of doing so in the future. See King Research, Inc. v. Shulton, Inc., 454 F.2d 66, 68 (2d Cir. 1972).

Third, plaintiff has been unable to demonstrate any actual confusion between the two marks or a lack of sophistication on the part of the consuming public. While it is true that actual mistake is but an indicia of the critical factor of a likelihood of confusion, the fact remains that the price range and the fairly detailed purchasing process of the goods in question further suggest that it is unlikely that consumers will be misled.

Finally, there is no evidence that the defendant adopted or used its mark in bad faith. It is, of course, not uncommon for a trademark holder to emphasize the initial letter in its name.

In sum, we find that the trademarks at issue are clearly non-infringing and that plaintiff’s action was properly dismissed.

II. DEFENDANT’S COUNTERCLAIM FOR ATTORNEYS’ FEES

Defendant’s counterclaim for attorneys’ fees rests on the allegation that plaintiff’s “use” of its pointed-J mark was insufficient to support its registration. Defendant contends that it is entitled under § 38 of the Lanham Act to the expenses it incurred in defending itself from plaintiff’s assertion of this invalid mark:

Any person who shall procure registration in the Patent Office of a mark by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof.

15 U.S.C. § 1120.

We cannot agree. First it should be noted that defendant’s counterclaim goes only to the pointed-J mark in its unembellished form. There was ample evidence that plaintiff made extensive use of its various “Jeanie” marks before and after their registration. But since plaintiff’s theory has been that the parties’ unadorned “J’s” conflict, it is fair to say that the pointed-J registration alone occasioned Jaymar’s defense costs.

Here the evidence of use is far less compelling. At the time of its application, plaintiff — on advice of counsel— submitted five tags bearing the pointed-J mark. The application stated:

The trademark was first used October 26, 1961 and was first used in interstate commerce October 26, 1961 and is now in use in such commerce.

But internal memoranda make it clear that this “use” consisted of a token shipment of goods worth a few dollars to a cooperating company which immediately returned them to the plaintiff. Plaintiff’s files further indicate that the sole purpose of this interstate exercise was to satisfy the trademark laws.

In question then is whether this “use” was sufficient to support registration under the Lanham Act. 15 U. S.C. §§ 1051, 1127. We hold that it was not. It is true that a number of decisions have held that a minimal amount of interstate commerce — either a sale or transportation — will suffice. But while these decisions accept minimal use primarily intended to satisfy the trademark laws, none of them endorses sham transactions exclusively designed to do so. Rather we find a clear line of decisions holding that the use must be bona fide, with token transactions accepted only where there is an accompanying intent to engage in continuing commercial use in the future.

Plaintiff attempts to avoid the leading decision in this line, Phillips v. Hudnut, 49 App.D.C. 247, 263 F. 643, 644 (1920), on the grounds that it was decided prior to the definition of “use” in the Lanham Act. But it is clear that neither this definition nor any other portion of the Act abrogated the fundamental rule that the law protects only the use, not mere adoption, of a trademark. Indeed the specific definition of “use” in § 1127 suggests to us that Congress clearly intended to require some bona fide commercial utilization of a mark prior to its registration.

Here there was no such use. The “sale” was obviously contrived with the goods immediately returned to the plaintiff. And while plaintiff undoubtedly intended to use its “Jeanie” marks— and in fact did so — there is no evidence that it similarly intended to utilize the pointed-J mark alone. We hold, therefore, that plaintiff’s application was false in that the “use” it alleged was legally insufficient.

Despite a similar finding, the district court held that this degree of falsity did not justify the award of attorneys’ fees as there was no further proof of fraudulent intent. While we entertain some doubt about this reading of § 1120’s “false or fraudulent” requirement as “false and fraudulent,” we nevertheless conclude for different reasons that in this particular case, the exceptional “damages” of attorneys’ fees are not recoverable.

We begin with two decisions in this circuit that attorneys’ fees may be recovered under § 1120. Academy Award Products v. Bulova Watch Co., 129 F.Supp. 780 (S.D.N.Y.1955), aff’d, 233 F.2d 449 (2d Cir. 1956); Merry Hull & Co. v. Hi-Line Co., 243 F.Supp. 45, 56-57 (S.D.N.Y.1965). However, these decisions preceded the Supreme Court’s denial of attorneys’ fees in the related context of trademark infringement actions. Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967).

In Fleischmann the Court began by restating the general American rule that “attorney’s fees are not ordinarily recoverable in the absence of a statute or enforceable contract” so providing. 386 U.S. 714, 717, 87 S.Ct. 1404, 1407, 18 L.Ed.2d 475. After noting that there are equitable exceptions to the rule, the Court stressed the comprehensive nature of § 35 of the Lanham Act:

The recognized exceptions to the general rule were not, however, developed in the context of statutory causes of action for which the legislature had prescribed intricate remedies. Trademark actions under the Lanham Act do occur in such a setting. For, in the Lanham Act, Congress meticulously detailed the remedies available to a plaintiff who proves that his valid trademark has been infringed.

386 U.S. 714, 719, 87 S.Ct. 1404, 1408, 18 L.Ed.2d 475.

The Court buttressed this all-inclusive view of § 35 by contrasting the explicit authorization of attorneys’ fees in patent, copyright, and a number of other federal actions with the several unsuccessful attempts to introduce such a provision into the Trademark Act. 386 U.S. 714, 721, 87 S.Ct. 1404, 1408, 18 L.Ed.2d 475.

It is true that Fleischmcmn is limited by its terms to infringement actions under § 35, while here we have an action under § 38 arising out of the use of a falsely obtained registration. Nevertheless, our review of the cryptic legislative history of § 38 convinces us that an implication of authorization for the extraordinary remedy of attorneys’ fees would be equally unwarranted.

Given this absence of statutory authorization, we believe defendant’s counterclaim was properly dismissed. This is not to say that defense expenses can never be awarded in an action involving a false registration. One can conceive of a case where an absolutely false registration was fraudulently obtained solely for the purpose of instituting completely vexatious litigation. Indeed such were nearly the facts in Academy Award Products Co. v. Bulova Watch Co., 129 F.Supp. 780, 782-783 (S.D.N.Y.1955), aff’d, 233 F.2d 449 (2d Cir. 1956). In such a case, attorneys’ fees might be

awarded as a matter of equity quite apart from § 38. See, Vaughan v. Atkinson 369 U.S. 527, 530-531, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962); Fleischmann v. Maier Brewing Co., 386 U.S. 714, 718, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967); Newman v. Piggie Park Enterprises, 390 U.S. 400, 402 n. 4, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968); Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973); 6 J. Moore, Federal Practice ¶ 54.77[2], p. 1709 (2d ed. 1972).

But this is not such a case. While it is true that there is little merit in plaintiff’s infringement claim and that its registration was technically false, the fact remains that it validly registered and used its “Jeanie” trademark in good faith for a number of years. Thus, while plaintiff may have been guilty of overreaching in registering the pointed-J mark, there is no suggestion that it did so solely for the purpose of bringing vexatious litigation almost ten years later. Defendant’s counterclaim was properly dismissed.

Affirmed.

      . While plaintiff’s numerous exhibits clearly show that the oversized “J” dominated its advertising, it was nevertheless always followed by a smaller, but legible, “eanie.”

      . We note that while we are entitled to make our own assessment of the likelihood of confusion, the trial court’s factual findings as to the other relevant factors in this infringement claim are reviewable according to the normal “clearly erroneous” standard. Miss Universe, Inc. v. Patricelli, 408 F.2d 506, 509 (2d Cir. 1969).

      . Since we find the trademarks here to be non-infringing, it is unnecessary for us to determine whether the ultimate cessation in jdaintiff’s use of its “Jeanie” mark — together with conflicting, testimony as to possible future use — constitutes abandonment. See Huber Baking Co. v. Stroehmann Bros. Co., 252 F.2d 945, 956 (2d Cir. 1959); Guiding Eyes for the Blind, Inc. v. Guide Dog Foundation for the Blind, Inc., 384 F.2d 1016, 1017-1019, 55 CCPA 701 (1967); 15 U.S.C. § 3127.

      . David Crystal, Inc. v. Shelburne Shirt Co., Inc., 162 U.S.P.Q. 472, 473 (T.T.A.B.1969); Kayser-Roth Corp. v. Silver Knit Hosiery Mills, Inc., 168 U.S.P.Q. 318, 319 (T.T.A.B.1970); In Re London-Aire, Inc., 171 U.S.P.Q. 701 (T.T.A.B.1973).

      . The price range for plaintiff’s goods was $4.50 to $26.00; for defendant’s, $20.00 to $35.00. Thus the purchases involved here —which presumably included personal examination and fitting of the sportswear — were far from the “casual” sales where a similar trademark can be most confusing.

      . It should be noted that plaintiff’s counsel in this action was not involved in the initial registration.

      . “We want to ship a sample sportswear garment in a misses’, little girls’, and girls’, carrying a ticket with just a big “J” on it. Can you print a couple of dozen of dummy tickets as you have done in the past, incorporating just the big “J” and send maybe a dozen to Ailene and let her ship three or four garments and send the balance to me to send to the patent attorneys. This sample shipment should be made to Premier Textile in New York.”
      “Attached is the original of Premier Textile Company’s invoice no. 227173 in the amount of $3.71. This shipment was made to register the Big “J” design. The goods will be returned to our New York office.”
      “Joe: When these are received, would you please send them to me in the original package.”

      . Correspondence between the Patent Office and plaintiff’s attorneys suggest that the Patent Examiner was less than convinced by the samples:
      “The nature of the tags submitted as specimens and the fact that nothing but the letter “J” is shown thereon, raises the question as to whether or not they represent duplicates of those actually affixed to the goods as shipped in interstate trade and sold to the purchasing public (the ultimate consumer).”
      In response, plaintiff’s former counsel appears to have drawn a fine line even finer:
      “The illustrated mark also appears on the submitted labels which were in use at the time of filing the application, . . . ”

      . Montgomery Ward & Co. v. Sears, Roebuck & Co., 49 F.2d 842, 844, 18 CCPA 1386 (1931); New England Duplicating Machine v. Mendes, 190 F.2d 415, 416-417 (1st Cir. 1951) ; Maternally Yours v. Your Maternity Shop, 234 F.2d 538, 542 (2d Cir. 1956); Drop Dead Co. v. S. C. Johnson & Son, 326 F.2d 87, 93-94 (9th Cir. 1963), cert. denied, 377 U.S. 907, 84 S.Ct. 116.7, 12 L.Ed.2d 177 (1964); Fort Howard Paper Co. v. Kimberly-Clark Corp., 390 F.2d 1015, 1016-1017, 55 CCPA 947 (1968), cert. denied, 393 U.S. 831, 89 S.Ct. 99, 21 L.Ed.2d 101 (1968); Mr. Donut of America, Inc. v. Mr. Donut, Inc., 418 F.2d 838, 840-841 (9th Cir. 1969); L’il Red Barn, Inc. v. Red Barn Systems, Inc., 322 F.Supp. 98, 102-105 (N.D.Ind.1970); DeMert & Dougherty, Inc. v. Chesebrough-Pond’s, Inc., 348 F.Supp. 1194, 1195-1198 (N.D.Ill., 1972). See also, Tudor Square Sportswear, Inc. v. Pop-op Corp., 160 U.S.P.Q. 50, 54 n. 3 (T.T.A.B.1968) (noting in dicta that a token sale is “a common practice employed to secure a federal registration.”).

      . See, Phillips v. Hudnut, 49 App.D.C. 247, 263 F. 643, 644 (1920); Maternally Yours v. Your Maternity Shop, 234 F.2d 538, 542 (2d Cir. 1956); Fort Howard Paper Co. v. Kimberly-Clark Corp., 390 F.2d 1015, 1017, 55 CCPA 947 (1968), cert. denied, 393 U.S. 831, 89 S.Ct. 99, 21 L.Ed.2d 101 (1968); In Re Beatrice Foods Co., 429 F.2d 466, 473 (Cust. & Pat.App.1970); Community of Roquefort v. Santo, 443 F.2d 1196, 1199-1200, 58 CCPA 1303 (1971); B’il Red Barn, Inc. v. Red Barn Systems, Inc., 322 F.Supp. 98, 102-105 (N.D.Ind.1970); State of Florida v. Real Juices, Inc., 330 F.Supp. 428, 433 (M.D.Fla.1971); DeMert & Dougherty, Inc. v. Chesebrough-Pond’s, Inc., 348 F.Supp. 1194, 1196 (N.D.Ill., 1972); Black Panther Co., Inc. v. Godfrey L. Cabot, Inc., 121 U.S.P.Q. 533, 534 (T.T.A.B.1959). See also, La Societe Anonyme des Parfumes le Galion v. Jean Patou, Inc., 495 F.2d 1265, 1273-1274 (2d Cir. 1974).
      The leading commentators agree. See 3 R. Callmann, Unfair Competition, Trademarks and Monopolies 292-93 (3d ed. 1969); E. Vandenburgh, Trademark Law and Procedure 25-27 (2d ed. 1968); 1 J. T. McCarthy, Trademarks and Unfair Competition 725-27 (1973).

      . “For the purposes of this chapter a mark shall be deemed to be used in commerce (a) on goods when it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto and the goods are sold or transported in commerce and (b) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in this and a foreign country and the person rendering the services is engaged in commerce in connection therewith.”
      15 U.S.C. § 1127.

      . See Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 413, 36 S.Ct. 357, 60 L.Ed. 713 (1916); Olin Mathieson Chemical Corp. v. Western States C & M Co., 227 F.2d 728, 730 (10th Cir. 1955), cert. denied, 351 U.S. 937, 76 S.Ct. 833, 100 L.Ed. 1464 (1955); Tillamook County Cream Ass’n v. Tillamook Cheese & Dairy Ass’n, 345 F.2d 158, 160 (9th Cir. 1965), cert. denied, 382 U.S. 903, 86 S.Ct. 239, 15 L.Ed.2d 157 (1965); Mine Safety Appliances Co. v. Electric Storage Battery Co., 405 F.2d 901, 904 (Cust. & Pat. App.1969).

      . It is true that the Supreme Court has noted that “the word ‘or’ is often used as a careless substitute for the word ‘and’ . ” and has therefore rewritten statutes where necessary to avoid obvious contradiction and to effectuate congressional intent. See DeSylva v. Ballentine, 351 U.S. 570, 573-580, 76 S.Ct. 974, 976, 100 L.Ed. 1415 (1956).
      Here, however, we have neither such apparent contradiction nor any evidence suggesting that Congress did not intend to use the disjunctive precisely as it did. Rather we find that the few courts which have considered the issue have upheld the disjunctive interpretation. See, Simmonds Aerocessories v. Elastic Stop Nut Co., 158 F.Supp. 277, 278 (D.N.J.1958); Schwinn Bicycle Co. v. Murray Ohio Manufacturing Co., 339 F.Supp. 973, 984 (M.D.Tenn.1971), aff’d, 470 F.2d 975 (6th Cir. 1972); DeMert & Dougherty, Inc. v. Chesebrough-Pond’s, Inc., 348 F.Supp. 1194, 1196 (N.D.Ill.1972). See also, 2 J. T. McCarthy, Trademarks and Unfair Competition 414 (1973). It should be noted that Schwinn and DeMert nevertheless deny relief on the grounds that the trademark holder did not know his application to be false. Since we hold that plaintiff’s conduct here could not justify the award of attorneys’ fees in any event, it is unnecessary for us to pursue further this difficult question of scienter.

      . See 35 U.S.C. § 285 (patent actions); 17 U.S.C. § 116 (copyright actions); 386 U.S. 714, 721 n. 17, 87 S.Ct. 1404, 1408, 18 L.Ed. 2d 475 (1967).

      . There has been a certain vindication of the Court’s reading by the fact that since Fleischmann, Congress has continued to refuse to authorize the award of attorneys’ fees in infringement actions. See, S. 647, 92nd Cong., 1st Sess. § 5 (1971); S. 1362, 93rd Cong., 1st Sess. § 5 (1973).

      . The brief committee rejjort makes no mention of § 38 or the possibility of an action based on an improperly obtained registration. , See, S.Rep.No.1333 (79th Cong., 2d Sess.), 1946 U.S.Code Congressional Service pp. 1274-1278.
      Moreover, while the dissent in Fleischmann, could point to the fact that attorneys’ fees had been awarded in infringement actions prior to the Lanham Act, Aladdin Mfg. Co. v. Mantle Lamp Co., 116 F.2d 708, 717 (7th Cir. 1941), as suggesting that Congress did not intend to overrule the practice sub silentio, 386 U.S. 714, 722-723, 87 S.Ct. 1404, 18 L.Ed.2d 475 (Stewart, J., dissenting), there was no corresponding history of awards in false registration cases. The only case cited by the leading treatise on pre-Lanham Act law as awarding damages under § 25 of the 1905 Act, the predecessor to § 1120 — Walworth Co. v. Moore Drop Forging Co., 19 F.2d 496 (1st Cir. 1927) — makes no mention of attorneys’ fees. See, II. Nims, The Law of Unfair Competition 822-23 (4th ed. 1947).

      . Iu reaching this conclusion, we are not unmindful of the fact that since Fleisehmann, the Supreme Court has twice upheld the award of attorneys’ fees in actions based on federal statutes which did not specifically authorize such recovery. Mills v. Electric Auto-Lite Co., 396 U.S. 375, 389-397, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970) (§ 14 [a] of the 1934 Securities Act); Hall v. Cole, 412 U.S. 1, 4-15, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973) (§ 102 of the Labor-Management Reporting and Disclosure Act).
      However, both of these decisions distinguished Fleischmann on the grounds that the statutes at issue were less comprehensive than the Lanham Act. Moreover, both cases involved the “common fund” exception to the rule against attorneys’ fees in that the plaintiffs were also vindicating the rights of others. Here such is not the case.

      . Compare, Electrical Information Publications v. C-M Periodicals, 163 U.S.P.Q. 624 (N.D.Ill.1969) (awarding attorneys’ fees without mention of Fleischmann in a case involving serious fraud and clearly vexatious litigation).


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Gennaro J. ANGIULO, Defendant, Appellant.
    No. 74-1068.
    United States Court of Appeals, First Circuit.
    Argued May 8, 1974.
    Decided May 31, 1974.
    Joseph J. Balliro, Boston, Mass., with whom Henry D. Katz, Boston, Mass., was on brief, for appellant.
    Richard S. Stolker, Atty., Dept, of Justice, with whom James N. Gabriel, U.
    S. Atty., Gerald E. McDowell, Sp. Atty., Boston Strike Force, and Jerome M. Feit, Atty., Dept, of Justice, were on brief, for appellee.
    Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.
   PER CURIAM.

Prior to his first trial Angiulo moved for transfer of venue on the ground that prejudicial publicity had made it impossible for him to obtain a fair trial “in and about the District of Massachusetts”. His motion was denied. He was subsequently tried and convicted for assaulting a federal officer, in violation of 18 U.S.C. § 111. For reasons not material on this appeal, we vacated the judgment and ordered a retrial, 1 Cir., 485 F.2d 37 (1973). He then renewed his motion for “transfer of the trial of this indictment from the District of Massachusetts to some other less prejudicial district” saying in support thereof that he had been the victim of “prejudicial publicity ... in and about the New England States”.

Despite counsel’s request, made during the hearing on the motion, that Angiulo be transferred to some jurisdiction outside New England, the district court announced that it was ordering the case transferred for trial in Concord, New Hampshire. When the court so announced, counsel stated that if the transfer to New Hampshire was in response to the renewed motion, then “we would withdraw that motion”, since defendant would be more prejudiced trying the case in a small community than in the Boston metropolis. The court let the order stand. Following a trial in New Hampshire, appellant was again convicted.

Angiulo now contends that his Sixth Amendment right to trial in the state and district “wherein the crime shall have been committed” was abridged because the district court disregarded F.R.Crim.P. 21(a) by granting a transfer other than “upon” his motion, and because it did not truly find that appellant could not obtain a fair and impartial trial in Massachusetts. We affirm the judgment of the district court.

Rule 21(a) authorizes the court to transfer a criminal case to a district other than the district where the prosecution is pending, “whether or not such district is specified in the defendant’s motion” for transfer. Here, the operative words in the motion were for a transfer from Massachusetts to “some less prejudicial district”. The motion on its face did not preclude transfer within New England, and, under the Rule, Angiulo would have had no right to foreclose the court’s transfer options. Once appellant moved for transfer of venue, the decision about where to transfer was within the discretion of the trial court, United States v. Marcello, 280 F.Supp. 510, 520 (E.D.La.1968), aff’d, 423 F.2d 993 (5th Cir.), cert. denied, 398 U.S. 959, 90 S.Ct. 2172, 26 L.Ed.2d 543 (1970); 1 Wright and Miller, Federal Practice § 342 (1969 ed.); cf. United States v. Projansky, 465 F.2d 123 (2d Cir. 1972). Angiulo’s assertion, voiced at the hearing on his motion, that New Hampshire was not a district “less prejudicial” than Massachusetts need not have controlled the court’s determination. The evidence of possible prejudice within New England consisted largely of clippings from Boston-area newspapers. We cannot say that the trial court abused its discretion by concluding that the same degree of prejudice would not exist in New Hampshire.

We have little hesitancy in deciding, therefore, that the court had before it a transfer motion suitable under Rule 21(a), and that it had authority under the Rule to select New Hampshire notwithstanding counsel’s oral objection. The more difficult question is whether, notwithstanding the court’s compliance with Rule 21(a), Angiulo sufficiently waived his constitutional right not to be tried at “a place away from the scene of the charged events”. See Serio v. United States, 126 U.S.App.D.C. 297, 377 F.2d 936, 941 (1967) (Burger, J., concurring and dissenting). Angiulo properly reminds us that “Questions of venue in criminal cases . . . are not matters of formal legal procedure. They raise deep issues of public policy in the light of which legislation must be construed.” United States v. Johnson, 323 U.S. 273, 276, 65 S.Ct. 249, 251, 89 L.Ed. 236 (1944). Here we must take account both of his right, to a trial in the vicinage and his potentially conflicting right to trial before an unprejudiced jury. And to discourage forum shopping and unwarranted delay, we must not be so perfectionistic as to thwart unduly the resolution of such rights in the district court prior to trial.

We think Angiulo’s written motion was a waiver of his constitutional right to a trial in the vicinage. As stated ante, note 2, counsel’s oral requests prior to the court’s ruling cannot be said to have changed or conditioned the relief sought. Angiulo’s skilled and conscientious counsel had consistently taken the position, supported by an array of newspaper clippings, that media publicity precluded a fair trial in Massachusetts. Although presentation of the merits at the first trial lasted less than a day, selection of the Massachusetts jury had taken a full day. The district court was entitled to conclude that Angiulo, after deliberation and with competent advice, had determined that a trial in the District of Massachusetts was not in his interest. The case therefore bears little resemblance to those where confused or poorly counselled individuals have purported to surrender constitutional rights.

Nonetheless, there remains the question whether the district court should have allowed Angiulo’s request, made immediately after the court’s ruling, to withdraw the transfer motion. This is a close question, and we do not agree with the district court’s suggestion that it may have lacked power to allow withdrawal. We agree with the Fifth Circuit’s formulation in Marcello, supra at 1005: “A defendant ought to be allowed to withdraw a prior waiver of a Constitutional right when there is no justification otherwise. . . .” However, the issue before us is not whether we agree with the district court’s refusal to permit withdrawal but whether we believe its failure to do so was an abuse of discretion. We find adequate justification. First, we are unwilling to presume, as appellant would have us do, that the district court did not have serious and well-founded reservations about Angiulo’s ability to have a fair trial in Massachusetts. This being so, it was entitled to weigh appellant’s due process rights against withdrawal of the waiver. It could also deem it preferable to hold the trial in a district where there was less risk of reversible error from problems associated with jury prejudice. The court also was entitled to conclude that the asserted basis for withdrawal — defendant’s desire to be tried in a city rather than a smaller community— had nothing to do with the historic reasons associated with the constitutional protection against being “transported for trial”. Serio, supra at 941. Finally, for us to override the district court in these circumstances would be to hold that defendant was entitled to two bites of the apple: a right to seek transfer, and a right to withdraw if the announced transferee court was not to his liking. We do not believe that a reasonable balancing of all the interests involved, including the public’s interest in preventing Rule 21(a) from being utilized as a forum shopping device, necessitates so enlarging a defendant’s tactical options as a matter of absolute right. While suggestions in this direction have been made, see Note, Change of Venue in Criminal Cases: the Defendant’s Right to Specify the County of Transfer, 26 Stan.L.Rev. 131 (1973), we do not accept them. If specific circumstances in the transferee district had thereafter threatened defendant’s right to a fair and impartial trial, these might have been called to the transferee court’s attention. Cf. United States v. Holdsworth, 179 F.2d 933, 937 (1st Cir. 1950). Here there is no complaint concerning the course of subsequent events in New Hampshire. Having waived his right to be tried in Massachusetts, defendant was tried in New Hampshire before a fair and impartial jury. That is all he was entitled to expect.

Affirmed.

      . The order as entered was as follows: “. . . The motion for change of venue, to the extent that it requests a transfer from this district to a district outside the First Circuit, is denied. However, the motion is allowed to the extent that the case be, and it hereby is, transferred to the United States District Court for the District of New Hampshire . . . . ”

      . Counsel did state at the beginning of the hearing on the motion that his client did not want to be tried in any other New England jurisdiction. But whether this statement was meant to “qualify” or “condition” the motion or was intended merely to state a preference which the court could accept or ignore as it chose, is less than clear.

      . We do not read the record as indicating a contrary view.

      . Or, to mix metaphors,
      “A litigant cannot experiment with the judge presiding over the case. . . . We cannot permit a litigant to test the mind of a trial judge like a boy testing the temperature of the water in the pool with his toe, and if found to his liking, decides to take a plunge.”
      State ex rel. Shufeldt v. Armigo, 39 N.M. 502, 506, 50 P.2d 852, 855 (1935), quoted in In re United Shoe Machinery Corp., 276 F.2d 77, 79 (1st Cir. 1960).


author: CASTLE, Senior Circuit Judge.

text:
    In the Matter of The HARWALD COMPANY, an Illinois corporation, Bankrupt. Appeal of Clyde ENGLE et al.
    No. 73-1712.
    United States Court of Appeals, Seventh Circuit.
    Argued April 25, 1974.
    Decided May 16, 1974.
    William N. Weaver, Jr., and Stephen M. Merrick, Chicago, 111., for appellants.
    Norman H. Nachman and Allan G. Sweig, Louis W. Levit, Chicago, 111., for appellee.
    Before CASTLE, Senior Circuit Judge, SPRECHER, Circuit Judge, and SOLOMON, Senior District Judge.

       Senior District Judge Gus J. Solomon of the District of Oregon is sitting by designation.

   CASTLE, Senior Circuit Judge.

Appellants Clyde Engle, Roger Weston and Visual Sciences, Inc. appeal from an order of the district court dismissing their petition for review of an order of a bankruptcy referee confirming the sale of substantially all of the assets of the bankrupt Harwald Co. to Research Technology, Inc. (“RTI”). The appellants objected to the confirmation of the sale on the ground that the completed transaction would be unlawful in that it would permit RTI to acquire monopoly power in the market of high speed automatic equipment for testing and cleaning sixteen millimter film, in'violation of § 2 of the Sherman Act (15 U.S.C. § 2) and § 7 of the Clayton Act (15 U.S.C. § 18). The district court held that the appellants, as unsuccessful bidders for the assets of Harwald, lacked standing to seek review of the referee’s order confirming the bankruptcy sale, because they are not “person [s] aggrieved by an order of a referee” under § 39(c) of the Bankruptcy Act, 11 U.S.C. § 67 and because the appellants’ specific objection was an insufficient basis for denying confirmation of the sale. We affirm the dismissal.

The district court, in holding that the appellants lacked standing under the bankruptcy statute to petition for review of the referee’s order confirming the sale of Harwald’s assets because they were unsuccessful bidders, relied principally on In Re Realty Foundation, Inc., 75 F.2d 286 (2d Cir. 1935), which was cited with approval in Imperial Bowl of Miami, Inc. v. Roemelmeyer, 368 F.2d 323 (5th Cir. 1966). In the former case, an unsuccessful bidder sought review of the confirmation of a bankruptcy sale on the ground that the referee had altered the terms of the sale from the description provided in the notice of sale with the result that a lesser bid was accepted. The court held that an unsuccessful bidder not a creditor to whom notice had been sent lacked the necessary legal interest to challenge the sale. The theory of standing adopted by the Second Circuit was articulated by the Supreme Court in Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543 (1939), in which the Court denied standing to the plaintiffs because the right invaded was not “a legal right— one of property, one arising out of contract, one protected against tortious invasion, or one founded on a statute which confers a privilege.” Id. at 137-138. However, in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970), the Court recognized that the “ ‘legal interest’ test goes to the merits. The question of standing is different. It concerns . . . the question whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute. .” Id. at 153. Additionally, the plaintiff must establish that the challenged action has caused him injury in fact. Id. at 152.

Thus, to establish standing as a “person aggrieved” under § 39(c) of the Bankruptcy Act, it is necessary for the plaintiff to show that the challenged sale caused him injury in fact as well as that the interest which he seeks to protect through his petition for review is an interest which the Bankruptcy Act seeks to protect or regulate. Clearly, the primary objective of the Bankruptcy Act is to minimize the injury to creditors arising from the fact of bankruptcy. See, Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 55 S.Ct. 854, 79 L.Ed. 1593 (1935). To realize this objective, the Act provides, “Real and personal property shall, when practical, be sold subject to the approval of the court.” 11 U.S.C. § 110(f). Implicit in the realization of the primary purpose is the presumption that sale by public auction, where all interested parties can be brought together for open, competitive bidding, will result in the highest prices which could be obtained on behalf of the creditors for the bankrupt’s property. Cf., Shlensky v. H. R. Weissberg Corp., 410 F.2d 1182 (7th Cir. 1969). Courts therefore properly entertain suits challenging the equity of a bankruptcy sale transaction, on the assumption that sales tinged by fraud, mistake or unfairness would generally result in an accepted bid below that which might have been expected in a fair, free market situation. See, Collier on Bankruptcy (14th ed. 1971). Thus, when an unsuccessful bidder attacks a bankruptcy sale on equitable grounds related to the intrinsic structure of the sale, he brings himself within the zone of interests which the Bankruptcy Act seeks to protect and to regulate. See, Mason v. Ashback, 383 F.2d 779 (10th Cir. 1967); In Re Time Sales Finance Corp., 445 F.2d 385 (3rd Cir. 1971) (by implication).

However, the equitable power of the bankruptcy court may only be exercised within the limits of the jurisdiction established by the Bankruptcy Act. Knox v. Lines, 463 F.2d 561, 563 (9th Cir. 1972). The powers conferred on bankruptcy courts by the Bankruptcy Act do not make them courts of general jurisdiction to hear and determine controversies not properly part of bankruptcy proceedings. In Re Love B. Woods & Co., 222 F.Supp. 161 (S.D.N.Y.1963). The jurisdictional limit of the inquiry of the bankruptcy court was reached when the appellants acknowledged that the sale of Harwald’s assets was conducted in all respects in full and complete compliance with all requirements of the law. In Re Harwald Co., No. 73 B 954 (N.D.Ill.1973) at 3. A determination by the bankruptcy court of whether sale of a bankrupt’s assets to a prospective purchaser would, because of the purchaser’s special characteristics, violate antitrust laws could not, contrary to the appellants’ contention, properly be considered part of the bankruptcy proceedings. 11 U.S.C. § 11. There are sound reasons for this result. First, the creditors might be deprived of receiving the highest obtainable price for the sale of the bankrupt’s assets at a fully competitive public sale. Second, delay of confirmation of the sale pending a judicial determination of the qualifications of the prospective buyer with respect to antitrust law would not only deny the creditors the present use of proceeds from the sale but would also diminish the amount of proceeds through continuing expenses of the bankruptcy trustee. It is the prospective purchaser, not the creditors, who is best able to assess the legal implications of his special characteristics and who should properly bear the risk of any possible peril attaching to him because of a purchase at a valid bankruptcy sale. See, In Re Airlines Transport Carriers, 129 F.Supp. 679 (S.D.Cal.1955). Thus, while it is clear that a valid antitrust claim should be properly adjudicated, it is equally clear that a bankruptcy court is simply not the proper forum to consider the matter.

The judgment of the district court is affirmed.

Affirmed.


author: MOORE, Circuit Judge.

text:
    CHEMVET LABORATORIES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    No. 73-1372.
    United States Court of Appeals, Eighth Circuit.
    Submitted Nov. 14, 1973.
    Decided May 8, 1974.

      Lyle McClain, Kansas City, Mo., for petitioner.
    Martin Namrow, Asst. Gen. Counsel, NLRB, Washington, D. C., for respondent.
    Before GIBSON, MOORE and WEBSTER, Circuit Judges.

       LEONARD P. MOORE, Senior Circuit Judge of the United States Court of Appeals for the Second Circuit, sitting by designation.

   MOORE, Circuit Judge.

This is a petition for review and a cross-application for enforcement of an order of the National Labor Relations Board issued on February 8, 1973 and supplemented on June 14, 1973.

Because of the supplemental decision and order of the Board dated June 14, 1973, the petition for review filed June 7, 1973, the first amended petition for review filed July 10, 1973, the cross-application for enforcement dated July 16, 1973, the amended cross-application for enforcement filed July 27, 1973, and the answer to the amended cross-application filed August 10, 1973, particular attention must be given to the decretal portions of the Administrative Law Judge’s decision, the Board’s decision and supplemental decision.

Specifically, the Administrative Law Judge in substance ordered Chemvet to desist from (a) discouraging membership in Department Store, Package, Grocery, Paper House, Liquor and Meat Drivers, Helpers and Warehousemen Local Union 955 (the “Union”); (b) threatening plant closure to discourage Union support; (c) interfering with the employees’ rights to self-organization; and by way of affirmative action (a) to offer employee Connie Sue Ellis full reinstatement to her job with make-whole pay; and (b) to make whole employees Ruhl, Terrell, Downey and Ellis for loss of pay due to overtime work discrimination.

The Board’s order filed February 8, 1973, affirmed the Administrative Law Judge’s decision except that it modified it as to “overtime” in an important respect as follows:

While we find, in agreement with the Administrative Law Judge, that the evidence is sufficient to show a decline in available overtime offered to these employees and to establish a causal relationship between this and the employees’ union activities, we find no practicable way to measure how much overtime would have been available or which employees would have availed themselves of overtime opportunities, had they been offered. Employee Ruhl, for example, had made clear at the outset of the events with which we are here concerned that he was not going to be willing to perform as much overtime as he had in the past. Employee Terrell’s testimony leaves us in some doubt as to how much additional overtime he would have accepted. There is also evidence that new equipment lessened somewhat the need for overtime. These and other factors suggest that an affirmative make-whole order would lead only to an evidentiary morass in our compliance proceedings. We will therefore substitute for the affirmative make-whole order recommended by the Administrative Law Judge a specific injunctive prohibition against future discrimination in offering overtime opportunities to employees.

The Board then some four months later amended its decision by reinstating the Administrative Law Judge’s decision as to overtime back pay.

After considering the entire record, the decisions of the Administrative Law Judge and the Board, and the Board’s supplemental decision, we enforce the Board’s original decision of February 8, 1973, as supplemented by its decision of June 14, 1973, except as to reinstatement of Connie Sue Ellis and back pay for her.

Chemvet Laboratories, Inc. (Chemvet) is a company, located in Kansas City, Missouri, engaged in the manufacture and distribution of veterinary pharmaceuticals. Nick Yovetich and Michael Harmon are the principal shareholders of the corporation. At the time in question nine persons were employed at the two-story plant occupied by Chemvet: three were engaged in the production of liquid pharmaceuticals on the second floor of the Chemvet plant; two others produced powders, tablets and boluses on the first floor; and three others who also worked on the first floor were primarily engaged in the packaging, label-ling and bottle washing operations.

Organizational activity began on March 15, 1972, when Kenneth Ruhl, one of the first floor employees, contacted the Union and inquired whether it would be willing to represent the Chemvet employees. Ruhl discussed the possibility of union representation with the remaining first floor employees (with the exception of Charline Rodriguez) and, the next day, this group of five union adherents agreed that their best interests would be served by unionization. The following evening this group went to the union hall and signed union authorization cards. On Monday, March 20, the Union wrote the company claiming majority status and also filed a petition with the Board for a representation election. The next day the company received a notice from the Board that the petition had been filed, along with a Board notice to employees setting forth their rights under the Act. Thereafter, unionization became the topic of numerous discussions within the plant.

At the hearing before the Administrative Law Judge, several employees testified that a few days after the posting of the NLRB notice Mike Harmon entered the main first-floor workroom and shouted to the employees working there that “he was the boss and if he had to, he would shut it [the plant] down.” Harmon then walked into the bolus room, also on the first floor and, according to the testimony adduced at trial, confronted Ruhl, saying, “Ken, I want you to understand that I’m the boss and I always will be.” After a further exchange, Harmon reputedly declared that “if he had to he would close the place down.”

On March 29, shortly before the regular 4 p. m. quitting time, Rodriguez and Ellis, two employees responsible for product packaging and labelling ceased production and started to clean the label-ling machine. Nick Yovetich told the pair that it was not yet time to quit for the day and he ordered them to return to work. Rodriguez returned to work but Connie Sue Ellis did not. As Yovetich was leaving the room, Ellis, in making a statement to Rodriguez, loudly referred to Yovetich as a “son-of-a-bitch.” A minute later Yovetich returned and, when Ellis refused to return to work, he discharged her.

Minutes after the incident between Yovetich and Ellis, Harmon demanded that employees Ruhl and Terrell, union supporters, surrender the keys -to the plant which had long been entrusted to them in order to facilitate entrance to and exit from the plant when they worked overtime. Harmon also demanded keys from employees Dodig and Ballew, two upstairs employees and nonsupporters of the Union. However, after the lock to the plant was changed, new keys were given to these two employees. No similar offer was made to either Ruhl or Terrell.

During this general period, i. e., between March and April, 1972, employees in the powder, tablet and bolus production department, all of whom were union adherents, suffered a reduction in the amount of overtime work they normally performed.

Plant Closure

A threat to close the plant, when made in the context of the union organization of the employees, has long been recognized as one of the most potent instruments of employer interference with the right of employees to organize under the National Labor Relations Act. See N.L.R.B. v. Gissel Packing Co., 395 U.S. 575, 618-620, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969). Appellant does not take issue with this recognized principle, rather it claims that the evidence presented to the Administrative Law Judge was insufficient to support the conclusion that management had threatened the employees with plant closure or had in any way interfered with their Section 7 rights.

Harmon conceded that he had announced to the various first floor employees (almost all of whom supported union representation) that “he was the boss”; however, he denied remarking to anyone that he was considering the possibility of closing the plant. Furthermore, appellant claims that the “dominant theme” of Harmon’s exclamations was an assertion of authority, rather than any opposition to the organizational movement.

There is a threshold question of witness credibility. The recollections of the employee witnesses contrast sharply with Harmon’s testimony. However, “[i]t is settled law * * * that the question of credibility of witnesses is primarily one for determination by the trier of facts, and findings in this area are reversed- only in extraordinary circumstances.” N.L.R.B. v. Panzel Construction Co., 449 F.2d 148, 149 (8th Cir. 1971). This principle is simply a corollary of the general rule found in Section 10(e) of the Act which provides that: “The findings of the Board with respect to questions of fact if supported by substantial evidence on the record as a whole shall be conclusive.” 29 U.S.C. § 160(e) (1970). Because the employee testimony constitutes substantial evidence to support the Board’s finding that Harmon threatened to close the plant, we accept that finding.

A threat to close the plant is a violation of Section 8(a)(1) if it is “reasonably likely to restrain” employees in the exercise of their statutory rights. McGraw-Edison Co. v. N.L.R.B., 419 F.2d 67, 71 (8th Cir. 1969). Here, the threats to close the plant were made only a few days after the company learned of the union organization and while unionization was a principal daily topic of conversation among the employees. One of the threats was addressed to employee Ruhl who had led the drive for union representation. Substantial evidence supports the Board’s conclusion that the threat constituted a violation.

The Plant Keys

Appellant also contends that the conclusion that the plant keys were taken from employees Ruhl and Terrell for purposes of intimidation and other anti-union consideration is not supported by any substantial evidence. In fact, argues appellant, the primary reason Harmon took the keys of these two employees is because he had just been informed of a recent non-forcible entry made into the plant without management permission. Moreover, appellant points out that the withdrawal of the keys could not have been a prelude to any more substantial anti-union activities, including the possible reduction of overtime, because the keys were not really necessary to any functions, either regular or overtime, performed by the employees.

The crucial fact here is that although keys were taken from all four employees who possessed them, a new lock was installed and new keys were distributed to the two employees who had not shown any pro-union sentiment. Harmon claimed that the discrimination was justified because, while he was unsure of Terrell and Ruhl, he was convinced that the two other employees to whom he gave new keys were trustworthy. However, when he was pressed for his reasons, he could only respond in the most vague and cryptic manner.

The fact that the keys were unnecessary to the functions performed by Ruhl and Terrell is immaterial. The withdrawal could have been intended as a symbolic act by the company: one that was meant to show the union supporters that there could be no friendship or trust between them and management. At least some of the employees interpreted the company’s action as an attempt at retaliation for their organizational activity and as a harbinger of similar future measures.

The critical question is the company’s motive, and motive is “a question of fact to be determined by the Board from consideration of all the evidence.” N.L.R.B. v. Murray Ohio Manufacturing Co., 358 F.2d 948, 950 (6th Cir. 1966). Substantial evidence on the record as a whole supports the Board’s findings that the company violated Section 8(a)(1) of the Act by the withdrawal of the union adherents’ plant keys.

Overtime

The complaint against Chemvet charged that it had been guilty of discrimination in the allotment of overtime to employees Downey, Ellis, Ruhl and Terrell because of their organizational activity. The company readily admits that these four employees suffered a reduction in overtime, but it denies that the reduction was in any way related to the impending representation election. The company attributes the reduction to three independent factors: the desire of many of the union adherents to reduce their own overtime work, the breakdown, during March and April, 1972, of machinery used in bolus and powder production, and the installation of new machinery in that department at the end of April which obviated the need for the substantial amounts of overtime previously required. According to the company, the fact that nonsupporters of the Union received no similar reduction (and in some instances actually had their overtime assignments increased) was strictly coincidental and could be attributed to factors unrelated to organizational activity.

The Administrative Law Judge rejected each of the explanations offered by the company to explain the reduction in overtime. He observed that the testimony showed that contrary to the assertions made by management, most of those employees who had suffered decreased overtime had requested it and had been turned down by the company, even though permission to work overtime had hitherto been implicit. Indeed, after the company received the General Counsel’s amended complaint on May 18, 1972, overtime assignments rose sharply, rebutting the argument that the reduction might have been due to employee reluctance.

The Administrative Law Judge did not accept as a reason that the reduction was attributable to mechanical breakdown. While Yovetich testified that there was “a great deal more breakdown” in “March and April than any other period in the history of the company,” the company produced invoices only for March 1972. Yovetich stated that these were all the bills for machine repairs during the March-April period. Two of these six invoices covered repairs made before the inception of the union activity (and during the week of those mechanical malfunctions the five union supporters nevertheless worked a total of 72 hours’ overtime). Two of the remaining four bills involved two machines which Yovetich testified were only “down one full day and returned the next day.” Further, he conceded that at that time, “there was still overtime available,” and that, after the breakdowns, overtime would be required “[a] as a general rule” to catch up on production.

Finally, the argument that the introduction of the new machinery into bolus and powder production was likewise rejected as an explanation for the reduction in overtime. The reduction commenced with the inception of organizational activity on or around the week of March 20, 1972. The new machines were not operative until April 24 or 25, after overtime had already been reduced for a month and a half. Whether the earlier reduction and the reduction which occurred after the installation were the result of a determined discriminatory policy must await further factual development.

Once again the focal issue is the question of motive.

Illegal motive has been held supported by a combination of factors, such as “* * * general bias or hostility toward the union,” N.L.R.B. v. Superior Sales, Inc., 366 F.2d 229, 233 (8th Cir. 1966); variance from the employer’s “normal employment routine,” N.L.R.B. v. Melrose Processing Co., [351 F.2d 693, 698 (8th Cir. 1965)] and an implausible explanation by the employer for its action, N.L.R.B. v. Harry F. Berggren & Sons, Inc., 406 F.2d 239, 245-46 (8th Cir.), cert. denied, 396 U.S. 823, 90 S.Ct. 64, 24 L.Ed.2d 74 (1969).

McGraw-Edison Co. v. N.L.R.B., supra, at 75.

The Discharge of Ellis

Because Section 10(e) of the Act provides that no order of the Board shall require reinstatement of an employee who has been discharged for cause and, further, because aggravated conduct of an employee toward a superi- or constitutes cause for discharge, we reverse that portion of the Board’s order which reinstates employee Ellis and which “makes her whole” for discrimination in overtime assignment subsequent to her discharge on March 29, 1972.

The Administrative Law Judge found that at the time of her discharge employee Ellis was engaged in concerted activity, viz., she was registering a complaint with management over discriminatory working conditions. In addition, the Administrative Law Judge found that the discharge was not caused by Ellis’ insubordination but rather by a calculated desire on the part of Yovetich, whom she called a “son-of-a-bitch”, to weaken the Union’s position in the upcoming election. These findings cannot be supported by the record.

Ellis claims that she objected to the fact that she and employee Rodriguez, who was assisting her at the time, were being made to work late while the “upstairs employees,” none of whom supported unionization, were permitted to clean up early. The evidence indicates, however, that two of the three upstairs employees, Ballew and Leslie, worked substantial amounts of overtime and, instead of quitting early each day, generally stayed late. Indeed, they worked overtime on March 29, 1972, the day of Ellis’ discharge. Dodig, the other upstairs employee, generally left early. However, it was well known to the Chemvet employees that Dodig was on a different schedule than the rest of them, that each day she began work before they arrived and quit before they did. Thus it is difficult to justify Ellis’ complaint and it appears that contrary to her assertion she was not complaining of discriminatory working conditions at the time of her discharge; she was merely defying her employer.

The contention that Ellis was engaging in concerted activity by registering her complaint finds little support in the record. Employee Rodriguez did not join in the argument with Yovetich. Rather, Rodriguez went back to work immediately when ordered to do so. Additionally, employee Ruhl, a staunch union supporter, implored Ellis to cease her protest. Thus, Ellis was not speaking in any representative capacity when, prior to her discharge, she complained that she was being required to work late.

Not only did Ellis defy Yovetich when he told her to return to work, she loudly referred to him as a “son-of-a-bitch” in his presence. The Administrative Law Judge minimized the importance of these words. Indeed, he found that: “Profane and vulgar verbiage was not unusual in the plant, and it was used by both ‘men and women.’ ” However, the judge was unable to refer to any evidence which indicated that the Chemvet employees regularly or even occasionally referred to their superiors in profane terms in the presence of those superiors. Such an act is different in kind from the general use of profane language. When Ellis had once before addressed one of her fellow employees as a “bitch”, she had been reprimanded by management and had been made to apologize. Management took these matters seriously even before the commencement of organizational activity.

The Administrative Law Judge found that the profanity could not have had any impact upon Yovetich because he did not fire Ellis on the spot but rather discharged her a minute or two later when she began to upbraid him anew. Such a finding is patently unwarranted. The entire incident lasted only a few minutes. To break it down into separate components as the Administrative Law Judge has tried to do is an artificial gesture. Ellis was discharged because of her defiant, insubordinate and uncooperative attitude, an attitude which found spectacular release on the afternoon of March 29,1972.

Although employees cannot be discharged for rude or impertinent conduct in the course of presenting grievances, where there is aggravated conduct of an employee toward a superior the protection of Section 7 does not operate to suspend the employer’s right to discharge for cause especially when no concerted activity is involved. N.L.R.B. v. Red Top, Inc., 455 F.2d 721, 728 (8th Cir. 1972). “[T]he fact that an employee is a union member and an active movant in an organizational campaign will not shield him from release for good cause.” West Point Manufacturing Co. v. N.L.R.B., 330 F.2d 579, 586 (4th Cir. 1964), citing, N.L.R.B. v. United Brass Works, Inc., 287 F.2d 689, 693 (4th Cir. 1961). Direct defiance of an employer’s order is good cause for discharge.

If any semblance of plant discipline is to be maintained, an employee cannot ordinarily be selective in the matter of obeying a supervisor’s instructions. If instructions are flagrantly disobeyed, the employee is properly discharged.

N.L.R.B. v. Finesilver Manufacturing Co., 400 F.2d 644, 648-49 (5th Cir. 1968).

While, “a justifiable ground for dismissal of an employee is no defense to an unfair labor charge if such ground was a pretext and not the moving cause,” * * * the inference that the discharge was motivated by participation in activities protected by the Act must be based on evidence, direct or circumstantial, and not upon mere suspicion.

N.L.R.B. v. Red Top, Inc., supra, at 725.

The mere fact that the employer has been guilty of unfair labor practices during the same general time period that the discharge occurred does not supply the requisite evidence of unlawful motive. Standing alone it constitutes nothing more than a “suspicion”, and a finding of unlawful motive cannot be based on mere suspicion.

We therefore enforce the order of the NLRB except as it relates to Connie Sue Ellis and as to her we reverse so much of the order as compels her reinstatement and payment to her of any loss of pay as set forth in 2(a) and 2(c) of the Administrative Law Judge’s Order dated October 19, 1972, as adopted by the Board in its Order of February 8, 1973, and as modified by the Board in its Supplemental Decision of June 14, 1973.

With respect to overtime back pay, the Board has suggested that this issue would be “best left to the compliance stage for resolution,” citing Westinghouse Pacific Coast Brake Co., 89 NLRB 145 (1950). The Board itself was well aware of the difficulties of a fair and equitable “resolution” when it said, “we find no practicable way to measure how much overtime would have been available or which employees would have availed themselves of overtime opportunities, had they been offered.” The Administrative Law Judge had found that, “in 1971, before union organization was attempted, there were weeks in which Ruhl and Terrell worked little or no overtime * * The Board gave additional reasons demonstrating the speculative nature of any specific overtime back pay when it said that Ruhl had “made clear at the outset” that “he was not going to be willing to perform as much overtime as he had in the past”; that "Terrell’s testimony leaves us in some doubt as to how much additional overtime he would have accepted”; and that “new equipment lessened somewhat the need for overtime.”

Although these reasons would appear to militate in favor of enforcing the Boards original Order of February 8, 1973, their subsequent Order of June 14, 1973, showing a change of mind or heart is entitled to equal consideration.

Under these circumstances further facts are required. The employee should receive that which he would have received but for such discriminatory action, if any, as may have been taken against him because of union activity. He is not entitled to receive speculative or ephemeral overtime on what may be characterized as a “might have been” basis. Overtime as a constitutional right has not — as yet — been written into our judicial system. On the other hand, deprivation of reasonably available and routine overtime may be compensable. Fairness to all parties should be achieved by following the Board’s suggestion that these issues are “best left to the compliance stage for resolution.”

      . Overtime Assignments (hours per week)
      Employee Before Union Activity After
      Ruhl (pro-union) 22.75 2.78
      Terrell (pro-union) 9.88 1.76
      Downey (pro-union) 7.96
      Ellis (pro-union) 5.79
      Bordon (pro-union) 1.00 1.00
      Employee Before Union Activity After
      Ballew (non-union) 19.23 20.76
      Dodig (non-union) 2.23 2.01
      Leslie (non-union) 13.07 9.91
      Rodriguez (non-union) 1.00 4.84
      * Ellis, who was discharged on March 29,1972, received no overtime after March 17.


author: GIBSON, Circuit Judge. WEBSTER, Circuit Judge

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SAUNDERS LEASING SYSTEM, INC., Respondent.
    No. 73-1605.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 12, 1974.
    Decided May 14, 1974.

      Corinna Metcalf, National Labor Relations Board, Washington, D. C., for petitioner.
    Edward R. Young, Memphis, Tenn., for respondent.
    Before MEHAFFY, Chief Judge, and GIBSON and WEBSTER, Circuit Judges.
   GIBSON, Circuit Judge.

The National Labor Relations Board seeks enforcement of its order issued June 25, 1973, and reported at 204 NLRB No. 68, which directed the Respondent, Saunders Leasing System, Inc., to cease and desist from two unfair labor practices in violation of § 8(a)(1) of the National Labor Relations Act, and to post appropriate notices. The Board also ordered that a representation election held on January 21, 1972, which the United Cement, Lime & Gypsum International Union, AFL-CIO (the Union) lost by a vote of 11-9, be set aside and a new election held. We enforce the Board’s order concerning one unfair labor practice and deny enforcement of the other.

The Respondent has 78 branches in approximately 17 states and is engaged in leasing and renting trucks and trailers for intrastate and interstate use. The Respondent’s Foreman, Arkansas, branch (Company), the site of the unfair labor practice in this case, is located across the street from Arkansas Cement Corporation, which leases 98 tractors and 99 trailers from the Company and is the Foreman branch’s principal account. The production, maintenance, and office workers at Arkansas Cement Corporation are represented by the Union.

An employee of the cement company contacted Paul H. Balliet, International Representative of the Union, during the beginning of December, 1971, and informed him that certain employees of the Company wanted to organize. An organizational campaign' ensued, and a December' 22, 1971, Union letter to the Company requested recognition. On December 27th, the Union filed a representation petition with the Board, which scheduled a secret ballot election on Jan-21, 1972.

During a two-week period prior to the January 21st election, Vice-President Milton Hauser, who headed the Company’s industrial and labor relations’ division, met with employees on five different occasions to discuss the Union’s organizational attempt. Hauser read from a prepared statement at these informal meetings and answered questions from the employees. Hauser convened one of the five meetings approximately 24 hours prior to the January 21st election, and during this meeting one of the alleged unfair labor practices occurred. Clearly, the record shows that an employee, without any prompting from Company officials, asked Hauser a question concerning the continuation of benefits during negotiations with the Union, although no witness remembered the exact wording of that question. Hauser testified:

The question had to do with benefits, from the standpoint of, if a Union should come into the Foreman operation, “Would we keep our benefits, retain everything we have and go from there?” or something to that effect.

The following exchange occurred between Earvin Wright, a mechanic with the Company, and counsel for the Company:

The Witness [Wright]: Mr. Hauser said that benefits would be cut out if the Union goes in.
Q. (By Mr. McCray) [counsel for the Company]: Who asked that question concerning benefits?
A. I’m not sure.
Q. You stated that Mr. Shaver asked a question. What question did he ask?
A. He asked a question something about the benefits, but I’m not for sure what he said.
Q. Do you remember the exact words of Mr. Hauser’s response ?
A. No, but he did say that the union would — the benefits would be cut out.

Darrell Shaver, a mechanic, testified that Timmy Roden asked the question regarding benefits — something to the effect, “Would we retain everything we have?”. Timmy Roden testified that he did not ask the question regarding benefits during negotiations.

The administrative law judge found: “[0]ne employee asked in connection with the question as to how collective bargaining works. ‘Don’t you start in negotiations with what we have got already and go from there?’ (Testimony of employee Wright and Hauser).” Although the record is not entirely clear concerning the exact wording of the question, it is clear that an employee did ask a question regarding benefits pending collective bargaining proceedings. We think that the record does show that Hauser’s response was that the employees would lose their benefits during collective bargaining and that they would have “to start from scratch.”

The administrative law judge held that Hauser’s statements concerning withdrawal of benefits during collective bargaining constituted an unfair labor practice. The record presents a difficult and close question concerning the evaluation of the testimony. We think, on this issue, however, that there is substantial evidence on the record as a whole to support the factual findings and that no error of law appears.

The Board’s position concerning statements of “bargaining from scratch” is best stated in Wagner Industrial Products, 170 NLRB 1413 (1968). In Wagner, the Board stated:

As the Board and the Courts have recognized in other eases, in the course of organizational campaigns, statements are sometimes made of a kind that may or may not be coercive, depending on the context in which they are uttered. “Bargaining from scratch” is such a statement. In order to derive the true import of these remarks, it is necessary to view the context in which they are made.

Wagner Industrial Products, 170 NLRB at 1413 (footnote omitted).

In Wagner, the Company sent a letter to employees which allegedly contained a threat of economic reprisal. It read in part:

Employees voting in this kind of election sometimes mistakenly assume that a union victory is bound to mean higher wages and benefits. Nothing could be further from the truth. Under the law, an employer is not required even to continue in effect its existing benefits if a union wins. Bargaining starts from scratch. What wages and conditions will prevail thereafter depends on what the employer is willing to give. Our company most certainly will not agree, merely because there is a union, to raise our costs out of line with our competition. Our aim is to make the Winneconne plant a stable operation with good, steady employment, and this goal we would not jeopardize.

The Board held that “[t]here is no specific implication that Respondent intended to adopt a bargaining posture offering the employees less than they were receiving.” The Board also noted that there were no other alleged unfair labor practices and finally held that “in this context” the statements in the letter were not threats of economic reprisal.

In N.L.R.B. v. Louisiana Manufacturing Company, 374 F.2d 696, 701-703 (8th Cir. 1967), this court was faced with the question of whether similar statements could be construed as being threats of economic reprisal. We there held that “[t]he question to be answered is whether under the circumstances the employees could reasonably conclude that the employer was threatening them with economic reprisals.” N.L.R.B. v. Louisiana Manuafacturing Company, supra at 702.

The testimony here provides a close question of analysis. No one exactly remembered the words of the question itself. Hauser’s statement concerning bargaining from scratch was in response to a specific employee question, in contrast to a planned, unsolicited statement to employees. Besides one other instance of an alleged threat of job reprisal, the General Counsel does not argue on appeal that any accompanying unfair labor practices occurred. Also, Hauser’s response is not a clear threat to stop benefits, but is capable of varying interpretation.

In general, express threats to bargain from scratch and withdraw benefits during negotiations can carry in themselves “their own seeds of coercive threats.” Hendrix Manufacturing Company v. N.L.R.B., 321 F.2d 100, 105 (5th Cir. 1963). It would appear that an unequivocal statement fully supported by the record that benefits would be terminated during negotiations and that the employer would thereafter bargain from scratch would per se violate the Act — as that conduct, if carried to fruition, would amount to unilaterally changing existing working conditions. However, the record is far from explicitly clear in this case concerning the question by the employee and the response by Hauser. When the statement itself is ambiguous or where the record shows conflicting accounts of what was actually said, it is necessary to determine “whether under these circumstances the employees could reasonably conclude that the employer was threatening them with economic reprisals.” N.L.R.B. v. Louisiana Manufacturing Company, supra at 702; accord, N.L.R.B. v. Marsh Supermarkets, Inc., 327 F.2d 109, 111 (7th Cir. 1963). Those circumstances include, but are not limited to, the nature of the words of the statement itself, whether the statement was elicited by employees, whether accompanying unfair labor practices occurred before the election, and whether the record indicates an anti-union animus in general.

In this case, the record does not indicate that the words of the statement in themselves were explicit enough to say that there was a threat of economic reprisal per se. Further, no accompanying unfair labor practices occurred; nor do we find an anti-union animus by the Company. Nevertheless, six employees did testify that they thought they would lose benefits and negotiate from scratch. We do note that the record is not unambiguously clear that employees thought that benefits would be lost during negotiations. The employees stated that benefits would be lost if the Union “came in.” It is unclear to us whether this means that benefits would be lost at the time the Union “came in” to negotiate or that benefits could be lost due to bargaining from scratch after a collective bargaining agreement was reached. However, we conclude that the Board’s finding that the statement was a threat of economic reprisal in violation of § 8(a)(1) was “a reasonable one, which it was permissible for the Board to make [and] its conclusion will not be set aside on review, even though a different inference or conclusion may seem more plausible and reasonable to us.” Surprenant Manufacturing Company v. N.L.R.B., 341 F.2d 756, 760 (6th Cir. 1965), quoted in N.L.R.B. v. Louisiana Manufacturing Company, supra at 703. We accede to the Board’s finding on this close issue.

The Board also held that Marvin Sikes, Jr., the branch manager of the Foreman plant, made certain coercive remarks to Eddie Reed, a mechanic trainee, in violation of § 8(a)(1). On June 15, 1972, one of the Company’s attorneys met with Reed in preparation for the unfair labor practice hearing involved in this case. On June 17th, Sikes confronted Reed and told him to stop “hot rod-ding” the Company’s trucks. According to Sikes, Reed had been warned about “hot rodding” on several occasions, and Reed had left black streaks on the concrete on June 10th. Also according to Sikes, Sikes had received reports that Reed told a fellow employee, Paul Denny, that Reed “had really fixed the Company up” during the interview with the Company’s attorney. During this June 17th confrontation with Reed, Sikes, who admitted being angry at Reed for telling employees that Reed had “literally screwed the Company,” told Reed that he was “just lucky to have a job” with the Company and that Reed better “tell the truth” at the hearing because he (Sikes) would “be out there” and would know whether Reed “was telling the truth.” Reed said that Sikes told him that “you’d better watch what you say in the courtroom” and that he better not tell anyone about this conversation with Sikes. Reed neither was discharged, nor did he work any fewer hours.

The testimony of Sikes and Reed conflicts concerning the conversation between the two on June 17th. The Board upheld the administrative law judge’s finding that the Company’s counsel did give proper assurances that no reprisals would result from any statements given during the interview, but also held that Sikes’ conduct cancelled out the assurances given by the Company’s counsel. The administrative law judge held that Sikes’ remarks to Reed were threats to Reed that if unfavorable testimony to the Company was given by Reed, the Company would not be as tolerant of Reed’s hot rodding in the future. The administrative law judge also held that Sikes’ statement to Reed was coercive, in violation of § 8(a)(1) because it put Reed under fear of job reprisal for his testimony to be given at a Board hearing. We disagree with that legal conclusion.

First, Sikes did not tell Reed that he would be discharged if he gave unfavorable testimony against the Company at the Board’s hearing. Even according to Reed’s testimony, Sikes said to Reed that “I’m going to be in that courtroom and I’m going to hear everything you say and you’d better watch what you say.”

The General Counsel contends the statements by Sikes were coercive and in violation of § 8(a)(1) of the Act. We do not think that Sikes’ statements to Reed can be seen as a coercive threat. It is undisputed that Reed had “hotrodded” the Company’s trucks on several oceasions and Sikes, of course, could reprimand Reed for this behavior. It is also undisputed that Reed had boasted to other employees that he had “screwed” the Company during his interview with counsel for the Company. Sikes’ statements to Reed to tell the truth under the factual circumstances of this case only gave fair warning to Reed of his duty under oath at the hearing and did not constitute a coercive threat. We do not regard Sikes’ statements to Reed as either a threat of “possible discharge” or a “warning of possible adverse consequences if [Reed] failed to shade his testimony in favor of the Company at the forthcoming trial.” Dollar General Corporation, 189 NLRB 301, 307 (1971). Rather, Sikes’ statements were a fair warning to a recalcitrant employee that his duty at the hearing was to tell the truth.

We grant enforcement of the Board’s finding that the Company violated § 8(a)(1) by stating that bargaining would be from scratch if the Union came in and deny enforcement of the Board’s finding that Sikes’ statements to employee Reed were coercive in violation of § 8(a)(1).

WEBSTER, Circuit Judge

(concurring in part and dissenting in part).

Judge Gibson has correctly observed that “[t]he record presents a difficult and close question concerning the evaluation of the testimony”; that the testimony “provides a close question of analysis” ; and that, in an atmosphere free from accompanying unfair labor practices or anti-union animus, “the record is not unambiguously clear that employees thought that benefits would be lost during negotiations.” Under such circumstances, it is difficult for me to conclude that the “bargain from scratch” statement was a threat of economic reprisal in violation of § 8(a)(1). There is evidence, however, that six of the employees did interpret it as meaning that benefits would be lost during the period of negotiations. In light of this evidence, I cannot say that the conelusion of the Board was unreasonable, and I join with the majority on this close issue.

Applying the same test, however, I cannot find unreasonable the Board’s conclusion that the statements of Branch Manager Sikes to Eddie Reed as he prepared for the unfair labor practice hearing were coercive. The coupling of a reference to the “hot rodding” incident some six days earlier with Reed’s upcoming testimony and a warning to “watch what you say” could reasonably be deemed a coercive effort to obtain favorable testimony under an implied threat of job reprisal. It is possible that Sikes intended no connection between the two subject matters of his conversation with Reed, but I cannot say that the Board’s contrary conclusion was unreasonable. Surprenant Manufacturing Company v. N.L.R.B., 341 F.2d 756 (6th Cir. 1965). I would enforce the Board’s order in its entirety.

      . The setting aside of the January 21st election and the ordering of a new election is not a final order and, therefore, is not now before this court for review. The court lacks jurisdiction to directly review the Board’s decisions on certification proceedings. N.L.R.B. v. William J. Burns Int’l Detective Agency, 346 F.2d 897, 899 (8th Cir. 1965); N.L.R.B. v. Moore Dry Kiln Company, 320 F.2d 30, 32 n. 3 (5th Cir. 1963).

      . Hauser did not recall whether the words “to start from scratch” were employed; whereas, three employees testified that these exact words were said by Hauser. Three other employees testified that similar words were said. The administrative law judge held that Hauser left “the impression with the employees that all their existing benefits would be eliminated for purposes of bargaining and that what they ended up with would depend in large measure upon what the Union could induce the Respondent to restore.”

      . On June 24, 1973, the Board adopted the administrative law judge’s findings and conclusions, and its order is reported at 204 NLRB No. 68.

      . Wagner correctly interprets the legal test to be applied. Compare e. g., N.L.R.B. v. Louisiana Manufacturing Company, 374 F.2d 696, 702-703 (8th Cir. 1967) (see text); Surprenant Manufacturing Company v. N.L.R.B., 341 F.2d 756, 760 (6th Cir. 1965) (the court adopted the Board’s finding of a threat of economic reprisal since its decision was a reasonable and permissible one though such a statement may be at times either a “permissible forceful argument in support of management’s opposition to the advent of a union” or “an illegal threat to the employees in the event the union should win the election”); N.L.R.B. v. Marsh Supermarkets, Inc., 327 F.2d 109, 111 (7th Cir. 1963) (statements were threats of economic reprisal because “the Board could have reasonably inferred that the ‘listener-employees’ took the statements as threats of loss of benefits and of economic reprisal”); Hendrix Manufacturing Company v. N.L.R.B., 321 F.2d 100, 105 (5th Cir. 1963) (see text); TRW, Inc., 173 NLRB 1425, 1426 (1968) (statement to bargain from minimum wage was held to closely parallel an offer to bargain from scratch, but there was not a threat of economic reprisal since there was no background of threatening employer conduct); Nutrena Mills, 172 NLRB 183, 185-87 (1968) (statements were held not to be a threat of economic reprisal under their “actual setting and surrounding facts”); Howell Refining Company, 163 NLRB 18, 19, 23 (1967) (trial examiner found that, although the statements were isolated in impact, a remedial order was necessary; the Board reversed, holding that the total context did not justify a remedial order); Dal-Tex Optical Company, 137 NLRB 1782 (1962) (statements were held to be threats of economic reprisal in light of other numerous threats and unfair labor practices); Universal Producing Company, 123 NLRB 548, 549-50 (1959) (Board viewed the statement “in context” and held that they did not “constitute an unlawful threat to discontinue existing benefits prior to negotiations”).

      . The statements in Louisiana Manufacturing Company did not include “bargaining from scratch”, but were statements in part that if the union came in the employees would starve to death, that a loss of overtime ■would result, and that the Company might have to close. We think the standard of review and legal test in that case can equally be applied in this case regarding a “bargaining from scratch” statement.

      . The General Counsel lias not argued that Sikes’ conduct violated § 8(a)(4), although he cites N.L.R.B. v. Scrivener, 405 U.S. 117, 119-125, 92 S.Ct. 798, 803, 31 L.Ed.2d 79 (1972), to support his argument that a violation of § 8(a) (1) occurred. The Scrivener court expressly said that it was not deciding the issue of “whether the employer’s action is also a violation of § 8(a)(1),” N.L.R.B. v. Scrivener, supra at 125, but rather found a violation of § 8(a)(4).