author: SWYGERT, Chief Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Robert Loren WEAVER, Defendant-Appellant.
    No. 71-1598.
    United States Court of Appeals, Seventh Circuit.
    Argued Oct. 16, 1972.
    Decided March 2, 1973.

      Patrick J. Hughes, Jr., Chicago, Ill., for defendant-appellant.
    James R. Thompson, U. S. Atty., Theodore T. Scudder, William T. Huyck, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee.
    Before SWYGERT, Chief Judge, ENOCH, Senior Circuit Judge, and FAIRCHILD, Circuit Judge.
   SWYGERT, Chief Judge.

Robert Loren Weaver, defendant-appellant, was convicted on an indictment charging his willful refusal to report for induction into the Armed Services in violation of 50 App. U.S.C. § 462. On appeal, Weaver urges that his conviction be reversed because his local board failed to state reasons for its rejection of his claim of conscientious objection. We must also decide whether this issue is foreclosed by Weaver’s failure to exhaust administrative remedies.

The events leading to the instant conviction began on October 14, 1969, when Weaver was classified I-A by his local board. He responded by letter within thirty days of this action, requesting a personal appearance before the board and an appeal to the State Appeal Board in the event that his personal appearance failed to result in a change of his classification. In his letter, Weaver expressed a belief that his classification should properly have been as a conscientious objector.

On November 18, 1969 the board answered by a form letter which notified Weaver of a personal appearance before it on December 9, 1969. Weaver appeared as scheduled and reiterated his request for conscientious objector status. The board refused to hear evidence on this claim, however, since Weaver had not submitted to it a completed Selective Service System Form 150 for conscientious objection. It informed Weaver that a completed Form 150 was a necessary prerequisite to its consideration of a claim for conscientious objection and terminated the interview.

Weaver thereafter wrote the board, withdrawing his appeal and requesting a Form 150. The board complied, but Weaver found himself unable to complete the form, which was replete with references to “religious training and belief.” He returned the form in blank, together with a letter explaining this circumstance: “I find the enclosed SSS Form 150 totally inadequate to reflect the unorthodox nature of my conscientious objection.” The letter went on to detail the exact nature of these “unorthodox” beliefs. The board’s response, on February 20, 1970, was to send Weaver a Selective Service Form 110 reaffirming his classification as I-A. No reasons were given for rejection of his conscientious objector claim. Weaver filed no answer to this notice and subsequently refused to report for induction as ordered by his board.

I

It has been settled in this circuit that the failure of a local board to articulate in writing the bases for its denial of a conscientious objector claim is fatal to an indictment for refusal of induction where information in the Selective Service file of a registrant is sufficient to comprise a prima facie case for exemption and where the reviewing court cannot with assurance determine that the decision made by the board properly supported the rejection. United States v. Lemmens, 430 F.2d 619 (7th Cir. 1970). Weaver argues that Lemmens squarely controls this case; the Government counters by asserting that Weaver failed to make out a prima facie claim of conscientious objection. We reject the Government’s contention.

Whatever our opinion of Weaver’s claim set forth in the letter accompanying the blank Form 150, we are compelled to assume that the local board considered this sufficient to state a prima facie case of conscientious objection. The board responded to Weaver’s letter with a Form 110 and a notification of his right to appeal. Under the regulations in force at the time, this action signified conclusively that the board had reopened Weaver’s classification, 32 C.F. R. § 1625.12, a step precluded by regulation unless a prima facie case had been made out. 32 C.F.R. § 1625.4. The Government has so conceded, both to the United States Supreme Court, Joseph v. United States, 405 U.S. 1006, 92 S.Ct. 1274, 31 L.Ed.2d 473 (1972); Lenhard v. United States, 405 U.S. 1013, 92 S.Ct. 1296, 31 L.Ed.2d 477 (1972), and to this court. United States v. Dziemiela, No. 72-1465 (7th Cir., Sept. 28, 1972); United States v. Nelson, No. 71-1812 (7th Cir., July 12, 1972); United States v. Hulsey, 463 F.2d 1071, No. 18982 (7th Cir., June 5, 1972). Also see United States v. Hershey, 451 F.2d 1007 (3d Cir. 1971). In Hulsey we held that Joseph and Lenhard, read in conjunction with Lemmens, were sufficient authority to “dictate” reversal of a conviction under 50 App. U.S.C. § 462, despite our decision on an earlier consideration of the case that Hulsey had failed to present a prima facie case of conscientious objection. United States v. Hulsey, No. 18982, 463 F.2d 1071 (7th Cir., March 8, 1972).

For these reasons, we hold that the failure of Weaver’s local board to explain in writing its rejection of his conscientious objector claim after it had reopened his case entitles Weaver to a reversal of his conviction under Lemmens.

II

The defendant cannot, however, claim the benefit of this ruling if he failed inexcusably to exhaust administrative remedies within the Selective Service System, since established law precludes a registrant’s challenge to his classification unless and until administrative remedies have been exhausted. Estep v. United States, 327 U.S. 114, 66 S.Ct. 423, 90 L.Ed. 567 (1946); Falbo v. United States, 320 U.S. 549, 64 S.Ct. 346, 88 L.Ed. 305 (1944).

Generally speaking, the requirement of exhaustion is “an expression of executive and administrative autonomy.” L. Jaffe, Judicial Control of Administrative Action 425 (1965). An administrative agency, like a trial court, exists for the purpose of applying a statute in the first instance. The disruption of the administrative process by allowing parties an interlocutory appeal from intermediate stages of that process, and the concomitant restriction of the agency in its application of expertise, its exercise of discretion, and its finding of fact, constitute the vices to which the exhaustion doctrine is directed. Judicial economy is also served, since a reviewing court avoids ruling on issues which might become moot on further consideration of the case by the particular agency. However, other considerations are introduced where, as here, a criminal prosecution is involved:

[I]t is well to remember that use of the exhaustion doctrine in criminal cases can be exceedingly harsh. The defendant is often stripped of his only defense; he must go to jail without having any judicial review of an as-sertedly invalid order. This deprivation of judicial review occurs not when the affected person is affirmatively asking for assistance from the courts but when the government is attempting to impose criminal sanctions on him. McKart v. United States, 395 U.S. 185, 197, 89 S.Ct. 1657, 1664, 23 L.Ed.2d 194 (1968).

In this vein, the Supreme Court has limited the exhaustion doctrine to draft law prosecutions where “the interests underlying the exhaustion rule clearly outweigh the severe burden imposed upon the registrant if he is denied judicial review.” McKart v. United States, 395 U.S. 185, 197, 89 S.Ct. 1657, 1664, 23 L.Ed.2d 194 (1968); McGee v. United States, 402 U.S. 479, 485, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971). A “discrete analysis” of each case is required. United States v. Rabe, No. 71-1419, 466 F.2d 783 (7th Cir., Aug. 11, 1972).

In draft cases involving claims of conscientious objection, where the failure to exhaust remedies has deprived the Selective Service Administration of an opportunity to find facts and exercise its expertise on the question of sincerity, courts have not excused that failure where it was deliberate, McGee v. United States, 402 U.S. 479, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971); United States v. Brudney, 463 F.2d 376 (9th Cir. 1972); United States v. Holby, 345 F.Supp. 639 (S.D.N.Y., 1972), or where the claim was presented for the first time when induction was refused. United States v. Keys, 465 F.2d 736 (6th Cir., 1972). This case is far removed from either of those extremes. Weaver, by his letter of November 13 requesting an appeal, clearly evidenced an intention and a willingness to proceed along regularized channels of appeal within the Selective Service System. Moreover, had the board supplied Weaver with a Form 150 in response to that letter — a duty incumbent upon it if it viewed the form as sine qua non to a personal appearance on Weaver’s claim, see United States v. Sobczak, 264 F.Supp. 752 (N.D.Ga.1966) — Weaver would not now be charged with a failure to exhaust, since he would have obtained a hearing on the essence of what he stated in his post-appearance letter accompanying the blank Form 150. At worst, Weaver’s failure to exhaust was mildly negligent and hardly a fit basis upon which to preclude his defense under Lemmens. McGee v. United States, 402 U.S. 479, 487-488, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971); United States v. Peeler, No. 3858-Cr. (E.D.N.C., June 28, 1972); see United States v. Hunstiger, 343 F.Supp. 223 (D.Minn., 1972).

We buttress this conclusion by recognizing that the failure of the local board to state reasons for its decision reduced any appeal by Weaver to a meaningless formality. Mr. Justice Clark, sitting by designation in this circuit, discussed this question only recently in United States v. Rabe, No. 71-1419, 466 F.2d 783 (7th Cir., Aug. 11, 1972). His language there has equal bearing on this case:

The Local Board handling of the case was superficial at the best and ill-advised at the least. The imperious manner in which it entered a flat denial of Rabe’s claim without stating any grounds, reason or explanation deprived Rabe of any meaningful appeal. See United States v. Lemmens, 430 F.2d 619, 622-624 (7 Cir. 1970). As the Solicitor General recently stated in confessing error in Joseph v. United States, vacated and remanded 405 U.S. 1006, 92 S.Ct. 1274, 31 L.Ed.2d 473 (1972).
“The underlying rationale of these decisions, although variously formulated, is that some statements of reasons for a Board’s classification is necessary to ‘meaningful’ review, (Cf. Gonzales v. United States, 348 U.S. 407, 415, 75 S.Ct. 409, 99 L.Ed. 467) of the administrative determination both by the State Appeals Boards and by the courts.”
See also memorandum for the United States in Lenhard v. United States, vacated, 405 U.S. 1013, 92 S.Ct. 1296, 31 L.Ed.2d 477 (1972). It would be both ironic and frustrating if the Government was permitted to prevail in a case because the registrant did not appeal when the Government itself had rendered an appeal futile. . . . The importance of the Local Board giving its reasons or explanation is illustrated not only by the confession of the Solicitor General, supra, but also by Congressional Act, P.L. 92-129, 92d Cong., 1st Sess. (Sept. 28, 1971) and by the national rules and regulations of the Selective Service itself that were recently adopted. 32 C.F.R. 1623.4(c), 36 F.R. 23378 (Dec. 9, 1971). This emphasizes the fatal impact on the administrative process of this failure of the Local Board to furnish grounds for its decision rejecting Rabe’s claim of conscientious objection. This is the more fatal in this class of draft ease since the Board may be going off on a ground that the registrant might cure by additional evidence.

Accord, United States v. Godfrey, 346 F.Supp. 672 (D.Minn., 1972); United States v. Peeler, No. 3858-Cr. (E.D.N.C., June 28, 1972).

We conclude that Weaver must prevail on his defense under Lemmens, and accordingly reverse his conviction.

       The Government argues that Weaver’s letter of November 13, “on its face, makes no request for a Form 150.” Be that as it may, Weaver did state unequivocally: “I believe my classification should be I-O.” This was sufficient to necessitate a board response by the mailing of a Form 150.


source: Caselaw Access Project

author: WEICK, Circuit Judge.

license: Public Domain

text:
    James D. HODGSON, Secretary of Labor, Appellant, v. DISTRICT 6, UNITED MINE WORKERS OF AMERICA, et al., Appellees.
    No. 72-1198.
    United States Court of Appeals, Sixth Circuit.
    Argued Oct. 16, 1972.
    Decided Feb. 28, 1973.

      Robert S. Greenspan, Dept, of Justice, for appellant; L. Patrick Gray, III, Asst. Atty. Gen., William W. Milligan, U. S. Atty., Walter H. Fleischer, Atty., Dept, of Justice, Washington, D. C., on brief.
    Harry R. Paulino, Columbus, Ohio, for appellees; Edward L. Carey, Gen. Counsel, United Mine Workers of America, Washington, D. C., Paul A. Pachuta, Columbus, Ohio, on brief.
    Before PHILLIPS, Chief Judge, WEICK, Circuit Judge, and GUBOW, District Judge.

       The Honorable Lawrence Gubow, Judge, United States District Court for the Eastern District of Michigan, sitting by-designation.

   WEICK, Circuit Judge.

The Secretary of Labor [Secretary] has appealed from an order of the District Court granting summary judgment dismissing his complaint in an action to declare void an election conducted by District 6, United Mine Workers of America [union], in violation of the Labor-Management Reporting and Disclosure Act of 1959 [Act], 29 U.S.C. §§ 401-531.

The Secretary brought the suit following a complaint made to him by a union member that he (the union member) had been prevented from becoming a candidate for an elective office in the United Mine Workers Union. The Secretary alleged in his complaint filed in the District Court that the particular union rule which barred the candidacy of the union member was unreasonable, and thus in contravention of Section 401(e) of the Act. 29 U.S.C. § 481(e).

The District Court held that the Secretary was precluded from filing an action under Section 401(e) on the ground that the union member had not exhausted internal union remedies as required under Section 402(a) of the Act. The Court held, alternatively, that even if the union member had exhausted internal union remedies, the rule which precluded his candidacy was reasonable.

We reverse. We are of the opinion that the union member exhausted his internal union remedies, and that the union rule which barred his candidacy was unreasonable, in contravention of Section 401(e) of the Act.

On December 10, 1968, an election was conducted by District 6, United Mine Workers of America, for the office of International Executive Board Member. William Howard, whose complaint led to the institution of this- action, attempted to become a candidate for this elective office.

The nominating procedure to be followed by the union in elections for international offices, are prescribed by Arti-ele VIII of the Constitution of District 6, UMW.

On June 25, 1968 the Secretary-Treasurer of District 6 sent letters to all seventy-nine locals under the jurisdiction of District 6, informing the locals that there was an upcoming election for the office of International Board Member. The letters contained blank nominating certificates to be used by the locals if they wished to nominate a union member for candidacy in the election.

The letter of June 25, 1968 also stated:

“All nomination certificates must be sent so they will reach this office on or before August 10, 1968. Certificates of Nomination arriving at District Headquarters, 85 East Gay Street, Columbus, Ohio 43215, after that date cannot be counted.”

This statement conformed with the nomination rules prescribed in the Constitution of District 6 in that it provided approximately one month within which the locals were to send in their completed nominating certificates.

It is undisputed that William Howard was duly nominated for the position of International Executive Board Member by five local unions as required by Article VIII of the Constitution. Nomination certificates were timely sent by four of the local unions to Columbus, by the local recording secretaries of those unions. However, although Howard had received the nomination of Local 1417 by vote of its members on July 28, 1968, the recording secretary of this local did not mail the nominating certificate to District 6 in Columbus until August 13, 1968, and the certificate was not received until August 14, 1968. Because this fifth certificate was received after the August 10th deadline, it was voided by the District 6 officials.

The District contended that Howard had only four nominations, i. e., one short of the constitutionally required five nominations. Howard was not permitted to become a candidate for office.

The incumbent member of the International Board ran unopposed in the December 10, 1968 election and was reelected.

When Howard did not receive notice of his nomination from the District Secretary-Treasurer, on September 16, 1968, he mailed the following letter to the President of District 6, to W. A. Boyle, President of the International Union, to the International Executive Board Member from District 6, to the Secretary-Treasurer of District 6, and to the Division 4 Board Member of District 6:

“I am a member in good standing of Local 6271, District 6. I was disqualified as a nominee for the office of International Executive Board Member for not having the required endorsements of local unions. I received the nominations of 6 locals but only 4 locals were counted. The 2 locals whose nominations were not counted were not my fault or the fault of the members of these locals. I am protesting my disqualification as a nominee.
“I am also protesting and opposing the system of trusteeship where by our District President and Secretary-Treasurer are appointed.
“If this is not the correct way to protest my disqualification as a nominee, I request you to forward this appeal to the correct channel and that I be so advised.
Sincerely,
s/s William S. Howard
William S. Howard
Local 6271”

Thomas Williams, President of District 6, answered Howard’s letter on October 3, 1968, sending copies to the other Board members, and stating in part:

“I am advised that District No. 6 Secretary-Treasurer R. C. Owens received from Local Unions in District No. 6 by registered mail four nomination blanks nominating you for the office of International Executive Board Member not later than four months before the date of election (August 10, 1968).
“Section 4 of Article VIII states in part: ‘no person shall be notified or be a candidate who has not been nominated by five or more Local Unions’. Inasmuch as District No. 6 Secretary-Treasurer R. C. Owens had received by registered mail only four nominations for International Executive Board Member in your name by August 10, 1968, you could not be considered a candidate for this office under the above provisions of Section 4 of Article VIII of our District Constitution.
“However, if you could substantiate your claim through registered mail receipts from five or more Local Unions that you allege nominated you for the office, I am confident that reconsideration could be given you as a nominee for International Executive Board Member from District No. 6.”

It is obvious that Williams was not responding to Howard’s complaint that although he had been duly nominated for the office by the requisite number of local unions, as required by Article VIII, Section 4 of the District Constitution, he had been disqualified for something which was not his fault nor the fault of the members of the union whose vote was not counted.

Howard had done everything which the Constitution of the union required of him to become a candidate for the office. He had appeared before five local unions and had persuaded their members to nominate him. It was not Howard’s fault, nor the fault of the members of Local 1417, that the Recording Secretary of the local waited until after time for filing had expired before sending the nomination certificate to the District office in Columbus. The Constitution placed on the Recording Secretary, and not on Howard, the mandatory duty to forward to the District office the nomination certificate. It was solely on account of the dereliction of duty of the Recording Secretary that Howard’s nomination was not timely forwarded.

Williams told Howard in his letter only that he (Howard) would have to substantiate his claim through registered mail receipts proving that the nomination certificates were received by the District office by August 10, 1968, which was an impossibility, as Williams well knew.

On December 11, 1968, one day after the election was held, Howard sent to the union officials another letter which was identical with his letter of September 16th. Williams responded on December 12, 1968, simply referring Howard to Williams’ previous letter of October 3rd.

On January 7, 1969, Howard filed a complaint with the Secretary of Labor, alleging a violation of Section 401 of the Act in the conduct of the election. The Secretary investigated the complaint, found probable cause of a violation of the Act under Section 402(b) and after unsuccessful efforts to settle the dispute, instituted the present suit on April 3, 1969.

EXHAUSTION OF UNION REMEDIES

Section 402 of the Act prescribes the method of determination and enforcement of Section 401(e) voting rights. It provides:

“[A] member of a labor organization — (1) who has exhausted the remedies available under the constitution and bylaws of such organization and of any parent body . . . may file a complaint with the Secretary . . . .” 29 U.S.C. § 482(a).

The Secretary cannot make an investigation or file a civil suit in the federal courts unless there is a valid complaint by a union member, i. e., a complaint that is made after the member has exhausted his internal union remedies.

The issue of whether William Howard exhausted internal remedies in the United Mine Workers of America before he complained to the Secretary is bifurcated. The first portion of the issue is whether Howard complained through the proper union channels. The second portion of the issue is, assuming that Howard did complain through proper union channels, whether the complaints called into question the validity and not just the method of application, of the candidacy rule in question.

Under the union’s constitution it was necessary that Howard make his protest to the District Executive Board. He did not address his letter to the Executive Board per se; rather, he sent- his letter to individual officials in the International Union, who were also Board members. In fact, Howard’s letter went to W. A. Boyle, President of United Mine Workers of America, to the International Executive Board Member of District 6, to the Board’s Secretary-Treasurer, and to the Board member who represented Howard’s division in the union.

Clearly, a letter of protest which reached not only the President of the International Union, but also other members of the Executive Board, is certainly equivalent to an appeal to the Board as an entity. To hold otherwise would be to impose a technical burden which would trap practically every union member.

We turn now to the second aspect of the exhaustion rule: whether Howard’s protest letters called into question the validity of the candidacy rule.

In Hodgson v. Local 6799, United Steelworkers, AFL-CIO, 403 U.S. 333, 91 S.Ct. 1841, 29 L.Ed.2d 510 (1971), the Supreme Court noted:

“[T]he primary objective of the exhaustion requirement [of Sec. 402 of the Act] is to preserve the vitality of internal union mechanisms for resolving election disputes — mechanisms to decide complaints brought by members of the union themselves.” (403 U.S. at 340, 91 S.Ct. at 1846.)

In that case the member’s complaint to the union included several procedural matters, but did not include an objection to the validity of a meeting-attendance rule. That objection was included for the first time in the complaint filed by the member with the Secretary. The Secretary, in his suit against the union, challenged the validity of the meeting-attendance rule, which issue he conceded had never been presented by the complaining member to the union. It was the Secretary’s contention, which the Supreme Court rejected, two Justices dissenting, that if his investigation uncovered a violation of law on the part of the union, even though not objected to by the member, he was authorized under the Act to seek redress in respect thereto.

In the present case the Secretary makes no such contention. He contends that the member’s complaint in the present case, although couched in unskilled layman’s language, was sufficiently broad to include an objection to the validity of the constitution. In our case, unlike Steelworkers, Howard literally complied with all the provisions of the constitution. He was duly nominated for the office by five local unions. It was solely on account of the dereliction of the Recording Secretary of Local 1417 that Howard’s certificate of nomination was not timely forwarded to the District. If Howard can be disqualified because of the dereliction of duty on the part of the Recording Secretary, then Article VIII of the District Constitution is invalid.

In Hodgson v. Local 1299, United Steelworkers of America, 453 F.2d 565 (6th Cir. 1971), we followed the Supreme Court decision in Steelworkers, and held that the exhaustion of remedies requirement is not met when a union member protests the manner in which the rule was applied to him and not the validity of the rule itself. In Local 1299 a number of candidates for union office were declared ineligible to run because of a meeting-attendance rule which was interpreted to require attendance at twelve of the twenty-three meetings pre-ceeding the election. The candidates claimed that the union officials had misread the language of the union’s constitution and by-laws, and had not given those documents their “fullest meaning”. In court, the candidates testified in substance that their protests were directed at the election committee’s decision to exclude from consideration the first thirteen months of the three-year period preceding the election for purposes of applying the meeting-attendance rule.

In essence, we regarded these internal protests of the union members “as an express affirmation of the [meeting-attendance] rule” (emphasis added), 453 F.2d at 574. Therefore, since the reasonableness or validity of the candidacy rule was not called to the attention of the union, it could not be said that the union had an opportunity to consider the rule in the same context as was being presented by the Secretary, that the rule was unreasonable under Sec. 401(e) of the Act. Accordingly, we held that the candidates for union office had not effectively exhausted the internal union remedies.

In the instant case, however, we are presented with an entirely different fact pattern. Howard stated in his protest letters that he had been disqualified from being a candidate when in fact he had actually received the required nominations of five local unions, and it was “not my fault or the fault of the members of these locals”. The members of the Executive Committee of District 6 could have easily discerned, if they had any interest in looking into the matter, that Howard was really complaining about the validity of Article VIII of the constitution which vested in the Recording Secretary such absolute and arbitrary power and authority to vitiate his candidacy, when in fact he had fully complied with all of the rules.

It is no answer to say that the union could take action against a recalcitrant Recording Secretary, because that would be too late to help the candidate. It is doubtful whether any action would be taken if the Recording Secretary connived with the incumbent. It certainly cannot be said that Howard’s protest “expresses no dissatisfaction with the rule”, Local 1299, supra, at 575.

Moreover, even were we to agree that Howard’s letters were not too clear, there is “a heavy burden on the union to show that it could not in any way discern that a member was complaining of the violation in question”, (emphasis added), Hodgson v. Local 6799, United Steelworkers of America, 403 U.S. 333, 341, 91 S.Ct. 1841, 1846 (1971). In our opinion this heavy burden has not been met. Under this standard, any ambiguities must be resolved in favor of the complaining union member. Thus, even if the union officials themselves misunderstood (which we doubt) the substance of Howard’s complaint, or even if they in fact thought that Howard was complaining only of a ministerial failure to count his nominations as their reply letters indicate, the fact that Howard’s protests can be read fairly as attacking the validity of the rule in question, is sufficient to meet the exhaustion requirement. In other words, the exhaustion requirement is to be both liberally construed in favor of the complaining member, and objectively determined.

We therefore hold that Howard exhausted his union remedies, and that the Court had jurisdiction of the Secretary’s suit under Section 402 of the Act, challenging the reasonableness of the candidacy rule in question.

THE REASONABLENESS OF ARTICLE VIII, SEC. 3 OF THE UNION CONSTITUTION

Although the District Court held that it had no jurisdiction of the suit because the complaining member did not exhaust his union remedies, the Court addressed itself to the merits of the Secretary’s action and held that the rule in question was reasonable. We disagree.

Section 401(e) of the Act provides in part :

“(e) In any election required by this section which is to be held by secret ballot a reasonable opportunity shall be given for the nomination of candidates and every member in good standing shall be eligible to be a candidate and to hold office (subject to section 504 of this title and to reasonable qualifications uniformly imposed) tf

The question to be decided is whether a union rule which vests in a local Recording Secretary such arbitrary and exclusive authority, power and responsibility for timely sending in valid local nominations to the District office, provides a “reasonable opportunity” to be nominated for office.

The word “reasonable” does not carry an inherently precise definition. At best it is an elusive concept in both our language and our law. In order to give it substance the requirement of reasonableness must be assessed in the light of the purposes which the Congress sought to achieve and the evils which it sought to eliminate by the Act.

One of the prime objectives of the'Act was—

“. . . to protect the rights of rank — and—file members to participate fully in the operation of their union through processes of democratic self-government, and, through the election process, to keep the union leadership responsive to the membership.” (Wirtz v. Hotel, etc. Employees Union, Local 6, 391 U.S. 492, 497, 88 S.Ct. 1743, 20 L.Ed.2d 763 (1968))

Moreover, as described in the Senate Report on the Act,

“It needs no argument to demonstrate the importance of free and democratic union elections The government which gives unions power has an obligation to insure that the officials who wield it are responsive to the desires of the men and women whom they represent. The best assurance which can be given is a legal guaranty of free and periodic elections. The responsiveness of union officers to the will of the members depends upon the frequency of elections, and an honest count of the ballots. Guaranties of fairness will preserve the confidence of the public and the members in the integrity of union elections.” (Emphasis added). S.Rep.No.187, 86th Cong., 1st Sess., 6-7, 20 (1959); 1 Leg.Hist. 402-403, 416.

It was the opinion of the District Court that even though the policies of fairness and democracy underlay the Act, judicial intervention in union political affairs must be resorted to only in the most “extraordinary and egregious situations.” The Supreme Court has consistently cautioned against just such an attitude in the lower federal courts. Wirtz v. Hotel Employees, supra, at 496, 88 S.Ct. 1743; Wirtz v. Local 153, Glass Bottle Blowers Ass’n, AFL-CIO, 389 U.S. 463, 473, 88 S.Ct. 643, 19 L.Ed.2d 705 (1968). Congress, although committed to minimal intervention, was equally committed to ensuring that unions have democratic and fair election procedures.

Thus, we are not faced with the question of whether Article VIII, Section 3, is an extraordinary or egregious rule; rather, we are faced with the question of whether this rule results in a reasonable opportunity to become a candidate in light of the congressional policy that union election procedures be both democratic and fair.

William Howard met every requirement that he could in his attempt to become a candidate for the office. He attended five local union meetings and persuaded each local union to nominate him for the office; he received valid nominations (by vote) of each of the five local unions. Yet Howard was not permitted to become a candidate solely because the Recording Secretary of only one of the local unions did not send in his name as the nominee of that local until after the time for filing had expired, although the Recording Secretary had ample time to do so. Furthermore, as Howard expressed in his letter of protest to the union, it was not his fault nor the fault of the local union members. As a result, the incumbent union official ran for the office unopposed; The situation is similar to one where a candidate for public office, who timely files his Declaration of Candidacy with the Board of Elections, is disqualified because of some act or neglect on the part of a Board employee.

To say that the union rule gave Howard a reasonable opportunity to become a candidate for office, or to say that the rule comported with the congressional policy of having fair and democratic union elections, would be a travesty on the language of the Act and on the purposes behind it.

In addition, the rule not only unreasonably barred Howard from candidacy, but also it is unreasonable on its face. Because the transmission of nominations is entirely out of the control of local union members and of the candidate himself (the required transmission of nominations is under the exclusive control of a union official, the incumbent Recording Secretary), it presents a situation of potential abuse. This rule could be used by incumbent officers to thwart the candidacy of an insurgent union member, and such an abuse would be difficult, if not impossible, to prove.

Finally, in holding the rule to be unreasonable on its face, we take notice of the fact that our decision would require merely the most minimal restructuring of the union’s procedures so as to insure that no candidate shall be disqualified when he has complied with all of the rules.

Accordingly, we hold that that portion of Article VIII, Section 3, of the Union Constitution which provides that the local Recording Secretary shall forward nominations to the District by a specified time, does not provide a candidate with a reasonable opportunity to be nominated as required under Section 401(e) of the Act.

The judgment of the District Court is reversed and the cause is remanded to the District Court with instructions to enter judgment in favor of the Secretary.

      . Article VIII provides :
      “Nomination and Election of Officers
      “Section 3. The District Secretary-Treasurer shall prepare nomination blanks and send them by registered mail to the local Unions not later than five months before the date of election and the Local Recording Secretary shall fill in the names of the members nominated by the Local Union for the various offices and forward the same by registered mail to reach the District Secretary-Treasurer’s office not later than four months before the date of election.
      “Section 4. The District Secretary-Treasurer shall within ten days after the nominations are closed notify all persons of their nomination together with a list of Local Unions nominating each nominee and ask if they are candidates for the respective offices as indicated by said nominations and get their written consent to place their name on the ballot, but no person shall be notified or be a candidate who has not been nominated by five or more Local Unions.”

      . Howard thought that he had received the nomination of six local unions at the time that he sent this letter. However, it was agreed later by the parties that Howard had received only five nominations, which was all that was required.

      . Article III, Sec. 3 of the Constitution of the union, provides as follows :
      “Sec. 3. In all questions of dispute, appeals and grievances (unless restricted by joint agreement) the right of appeal of an individual member shall end with the District Executive Board, and the right of appeal of any branch of the Organization shall end with the International Executive Board. This shall not prevent individuals whose membership is at stake from appealing to the International Executive Board, which body’s decision shall be final and binding unless reversed by the International Convention. When an appeal is taken, the defendants must be furnished a copy of the appeal in ample time to prepare their case. In all cases the decision of the subordinate tribunal must be complied with before the appellant’s right of appeal shall be recognized. However, the appellant shall have the right of appeal, provided bond satisfactory to the court of appeal covering the amount of money involved is furnished.”

      . We note that the Third Circuit has held that a letter of protest which reached only the chairman of the appellate tribunal was equivalent to an appeal to the tribunal itself. Shultz v. Local 1291, I. L. A., 429 F.2d 592 (3d Cir. 1970).
      We also note that in this case Howard explicitly requested in his letter that the union officials see that the protest was processed through the proper union channels. Their failure to follow instructions cannot be used to frustrate Howard’s candidacy.

      . This explanation by the union is substantially undercut by the fact that Howard’s second letter of protest was sent after the election was held. It would have been of little value to Howard to have his nominations “counted” at that time.

      . If exhaustion were subjectively determined, union officials could make it very difficult to prove that they had knowledge that the validity of a rule was being attacked. The officials could consistently reply to letters of protest in language which would “show” that they thought that the member was not attacking the validity or reasonableness of the rule.

      . See n. 1 for text.

      . The union, in contending that Article VIII, Sec. 8, of the Union Constitution did not affect the outcome of the election, stated in its motion for summary judgment:
      “5. Even had complainant been nominated. and placed on the ballot, the outcome of the election would have been no different.”
      Such an argument is hardly justification for depriving Howard of the opportunity to run for the office. Further, this argument is pure speculation and conjecture, and is not consistent with the purposes of the Act. The District Court did not even mention this ground, as it is obviously frivolous.
      We note that there have been a number of intervening elections since the unlawful 1968-election, in question. However, when the Secretary proves a violation of Section 401(e) of the Act, he is not deprived of the right to a court-ordered new election under his supervision because the union has meanwhile conducted other unsupervised elections. Wirtz v. Local 153, Glass Bottle Blowers Ass’n, AFL-CIO, 389 U.S. 463, 88 S.Ct. 643, 19 L.Ed.2d 705 (1968). It makes no difference whether Howard now desires to become a candidate.


text:
    Helen RIDINGER et al., Plaintiffs-Appellants, and Clara D. Johnson et al., Plaintiffs-Appellants, v. GENERAL MOTORS CORPORATION, Defendant-Appellee.
    Nos. 71-1934, 71-1937.
    United States Court of Appeals, Sixth Circuit.
    Argued April 20, 1972.
    Decided Oct. 13, 1972.
    Dennis E. Murray, Sandusky, Ohio (Murray & Murray Co., Sandusky, Ohio, Thomas C. Waechter, Bieser, Greer & Landis, Dayton, Ohio, on the brief), for plaintiffs-appellants.
    Charles P. Pfarrer, Dayton, Ohio (Cowden, Pfarrer, Crew & Becker, Dayton, Ohio, Ross L. Malone, Detroit, Mich., on brief), for General Motors.
    Susan Deller Ross, EEOC, Washington, D. C. (Howard Besser, Dist. Atty., Cleveland, Ohio, on brief), amici curiae for Equal Employment Opportunity Commission.
    Ruth Weyand, Washington, D. C., and Sorrell Logethetis, Knee, Snyder & Parks, Dayton, Ohio (Winn Newman, Washington, D. C., and Richard Rice, Kettering, Ohio, on brief), for Union.
    Before PHILLIPS, Chief Judge, KENT, Circuit Judge, and Mc-ALLISTER, Senior Circuit Judge.
   ORDER

These appeals are from judgments entered in the trial court disposing of cases which were commenced as class actions under the provisions of Rule 23, Federal Rules of Civil Procedure, 28 U.S.C.A. The trial court, 325 F.Supp. 1089, failed to determine whether the actions could be maintained as class actions as required by Rule 23(c), and the judgments from which these appeals are taken do not “include and describe those whom the court finds to be members of the class.”

It is, therefore, ordered that the judg-. ments of the trial court are reversed and the cases remanded for further proceedings pursuant to Rule 23, Federal Rules of Civil Procedure, and for consideration in the light of this Court’s opinion in Manning v. International Union and General Motors Corp., 466 F.2d 812, decided September 11, 1972.


author: EDWARDS, Circuit Judge.

text:
    PARKER SWEEPER COMPANY, Plaintiff-Appellee, v. The E. T. RUGG COMPANY, Defendant-Appellant.
    No. 72-1664.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 14, 1972.
    Decided Feb. 27, 1973.
    Robert E. Stebens, Columbus, Ohio, on brief for appellant; Mahoney,' Miller & Stebens, Columbus, Ohio, of counsel.
    Stanley H. Foster and Charles H. Melville, Cincinnati, Ohio, for appellee; Melville, Strasser, Foster & Hoffman, Cincinnati, Ohio, of counsel.
    Before EDWARDS, CELEBREZZE and KENT, Circuit Judges.
   EDWARDS, Circuit Judge.

Appellant Rugg appeals from the District Court’s findings of validity of two Parker Sweeper patents, Patent No. 3,035,294 (hereafter ’294) and Design Patent No. 194,051 (hereafter ’051), and from a judgment granting damages for infringement and enjoining Rugg from further infringement.

The crucial issue in this appeal concerning the ’294 patent is whether or not Parker’s combination patent for a towable, dumpable lawn-leaf sweeper is invalid because the invention it claimed was obvious under the then existing state of the art to one skilled in the art. Although the issue is not without difficulty, we conclude that the combination patent ’294 is invalid for obviousness.

At the outset we note that if the equities between these two adverse parties were all that was at issue, the balance in this record would strongly favor appellee Parker Sweeper for all the reasons cited by the District Judge. Appellant Rugg appeared to the District Judge (and appears to us) deliberately to have copied Parker Sweeper’s commercially successful product. Appellant Rugg prevails not because of merit in its conduct, but because of the national policy of rewarding with patent monopoly only those advances which can properly be characterized as “inventions.” U.S.Const, art. I, § 8; 35 U.S.C. §§ 101, 102, 103 (1970); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964); Cuno Engineering Corp. v. Automatic Devices Corp., 314 U.S. 84, 62 S.Ct. 37, 86 L.Ed. 58 (1941); Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248, 13 L.Ed. 683 (1850).

The record in this case appears to us to present no important dispute of fact.

On the heels of the development of the small tractor and a lawn mower suitable for towing behind it, a need became apparent for a grass or leaf sweeper which could be similarly employed. Such sweepers were readily available in the art for adaptation to small tractors. But as the president of Parker Sweeper Company testified, they were difficult to dump, since most could be emptied only by turning them over or by lifting out some form of basket or bailing liner. Until Parker’s sweeper (patented under the numbers ’294 as to structure and ’051 as to design) was placed on the market, there was no sweeper which the tractor operator could operate and dump at a desired spot without dismounting. With the production and marketing of Parker’s ’294 sweeper beginning in 1960, its sales of sweepers skyrocketed from 200 per year to over 13,000 per year. Understandably, Parker was concerned when appellee Rugg Company in 1966 began to manufacture a very similar sweeper and to sell it to Sears, Roebuck under the latter’s Craftsman label. After warning Rugg of its claims of patent infringement, Parker began the instant litigation by a complaint alleging infringement by Rugg of both its patents and seeking injunctive relief and damages.

The case was tried fully and it appears to this court that only legal issues remain. With the exception of the last sentence of finding 17 (which we believe to be a conclusion of law), we accept the careful findings of fact of the District Judge. They certainly are not “clearly review them. Fed.R.Civ.P. 52; American Saint Gobain Corp. v. Armstrong Glass Co., 434 F.2d 1216, 1218 (6th Cir. erroneous” — the standard by which we 1970).

As we have indicated, we also agree with the District Judge that the Parker sweeper met the test of utility fully and had sufficient differences in its method of combination of previously known elements to pass the test of novelty.

Nor do we find any fault with the District Judge’s statement of the law applicable to a determination of “obviousness” :

A three-step test has been established by the Sixth Circuit in determining the question of what constitutes “obviousness.” Westwood Chemical, Inc. v. Owens-Corning Fiberglas Corp., 445 F.2d 911 [6th Cir. 1971]. The first step is a factual determination of the prior art; second, a factual determination of what, if any, improvement the patentee has made over the prior art; and third, a legal question of whether the improvement would have been obvious to one skilled in the art. Additionally, the Supreme Court in Graham v. John Deere Company, 383 U.S. 1, [86 S.Ct. 684, 15 L.Ed.2d 545] (1965), has indicated secondary considerations such as commercial success, long felt but unsolved needs, failures of others, etc., as relevant indicia of obviousness or non-obviousness. Such secondary considerations might also be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.

The rationale of the District Judge and of the appellees in dealing with the obviousness test is set forth as follows in the last sentence of finding 17:

The prior art as set forth in the above patents does not appear to be, both collectively and individually, the subject matter therein such as would make the patent in question obvious to a person having ordinary skill in the art.

As we have indicated above, this sentence appears to be the ultimate conclusion of law which the District Judge subsequently supported with this reasoning under the heading of Conclusions of Law:

The state of the prior art has been indicated by the parties through the introduction in evidence of nine patents. They fall naturally into two categories; those of modern origin concerned exclusively with a non-dumpable manually pushed sweeper, and those of the nineteenth century-addressed primarily to the unique problems of that era. The teachings of the prior art do include elements of the patent in question. It would be difficult indeed to imagine a mechanical device for the removal of debris and the deposit of such debris in a receptacle for later emptying that would not follow certain basic physical principles. The combination, however, of such established elements with a useful and novel result does create a patentable device, even though the elements of the combination are old and well known. .

The District Judge and appellants also rely strongly upon secondary considerations and the presumption of validity of a patent once issued:

The secondary considerations referred to in Deere reinforce the non-obviousness of plaintiff’s patent. The move to suburbia following World War II created the enormous and profitable home lawn and garden industry. The riding tractor made grass cutting chores substantially easier. There was needed only some device to remove the grass clippings after cutting during the summer and fallen leaves in the autumn. These tasks continued to be manual, time-consuming, and unpleasant. Defendant as a manufacturer of lawn mowers would have been at least cognizant of this problem. The fact is, however, that neither defendant nor anyone else solved this problem until plaintiff marketed its product and the depth of the felt need was immediately apparent. An increase in sales in excess of 6,000% is probably the best evidence available as to the commercial success of this invention.
The law is clear that a patent once issued is presumed valid, (35 U.S.C. § 282) and that a heavy burden of proof rests upon the party attempting to prove invalidity. Westwood Chemical, Inc. v. Owens-Corning, supra [445 F.2d 911 (6th Cir. 1971)].

Accepting, as we do, the findings of fact of the trial judge and the applicability of both the secondary considerations and the presumption just referred to, we are still unable to agree that the resulting product was “nonobvious” within the meaning of the constitutional and statutory scheme.

We believe this record and the District Judge’s findings require the conclusion that every element critical to this patent was anticipated in one or more of the nine patents as to which the parties stipulated. Although appellant’s claims describe the sweeper brush and the mechanism which rotates it, it is too clear for argument that these features are anticipated by all nine of the described patents and many other sweepers.

The only “novelty” arguably described in the claims pertains to the dumping mechanism of the ’294 sweeper. This is described in Claim 3:

(3) A lawn sweeper, comprising in combination, a cart including a frame having spaced, upright side sections, axle means at the front of the frame, wheels on said axle means, axle means at the rear of the frame, wheels on the second mentioned axle means; a machine head carried by the front of the frame between the side sections and including a rotatable work element; bearing means adjacent the top and rear of each section of the frame sections and disposed forwardly of the rear wheels, the axes of said bearing means being aligned and disposed transversely of the direction of movement of the cart on the wheels; an open front and open top debris receptable disposed between the frame sections and including axle means cooperating with the bearing means for pivotally supporting the debris receptacle, the axle means for the debris receptacle lying forwardly of the center of gravity of the receptacle in all positions to which the receptacle can be moved.

The ’294 sweeper is pictured below— the top picture with the receptable in dumping position and the bottom in sweeping position.

Reduced to plain English, what this dumping device amounts to is a basket with an open top and front mounted on a frame behind a sweeper brush mechanism which propels swept debris into the basket. The basket is suspended from an axle mounted on pivots on the top part of the frame so that the tractor operator may empty the loaded basket by pulling on a rope attached to the top of the rear side of the basket, thus causing the basket to tip or rotate forward on its axle, thereby dumping the debris through the open front of the basket. Upon release of the rope, the force of gravity returns the basket to its debris-receiving position.

Neither the basket, nor the frame, nor the axle, nor the pivot, nor the rope are claimed to be novel or patentable. The claim, of course, is that the combination of these elements as portrayed above is both ingenious and nonobvious, and that it met a felt need and achieved great commercial success.

We do not denigrate the importance of Parker’s device merely because it is involved in the unglamorous task of waste removal. Waste removal is one of the most important of man’s problems and its importance increases with the size of population and the complexity of our civilization. Waste removal is, however, also one of the most ancient of man’s problems and as the District Judge noted, “It would be difficult indeed to imagine a mechanical device for the removal of debris and the deposit of such debris in a receptacle for later emptying that would not follow certain basic physical principles.”

Indeed, a number of the patents in the prior art demonstrated important aspects of Parker’s combination.

The Anderson street sweeper (Pat. No. 457,693, District Court Exhibit A-4) shows gravity return of the receptable after dumping. Specification forming part of Letters Patent No. 457,693, p. 2, lines 37-42, Aug. 11, 1891, Appendix p. 34.

The receptacle in the Tilton street sweeper (Patent No. 517,709, District Court Exhibit A-6) returned of its own weight to sweeping position after dumping. Specification forming part of Letters Patent No. 517,709, p. 1, lines 45-63, April 8,1894, Appendix p. 38.

The receptacle employed in the Reynolds street sweeper (Patent No. 542,571, District Court Exhibit A-10) was “pivotably hung on pins secured in the sides of the frame.” In addition its receptacle was adapted to “swing downwardly at its front end . . . and upwardly at its rear end to discharge the contents of the [receptacle] in the rear of the brushes between the wheels of the sweeper.” Specification forming part of Letters Patent No. 542,571, p. 1, lines 54-64, July 9, 1893, Appendix p. 42.

In the Rogers street sweeper patent (Patent No. 548,659, District Court Exhibit A-ll), the receptacle is referred to as the “receiyer.” Its function is described thus:

The receiver 21 is adapted to be dumped at will, and for this purpose is mounted upon horizontal trunnions 22, supported on the ends of hangers 23, which project down from a crossbar 23a on the main frame of the machine. This receiver 21 being thus adapted to be inverted may be moved to bring the receiving opening on the bottom, in order to empty its contents, by drawing a chain 24, whose upper end is held at convenient reach, as at 25. By the shape of the receiver 21 it is held in normal position by reason of its rear projection 26 and makes a tight connection with the collector 20 and receiver 21 and at the same time affords a stop for the receiver in its return movement by curved edges 27, 28, against which the edges of the opening of receiver 21 abut. Specification forming part of Letters Patent No. 548,659, p. 1, lines 61-76, October 29,1895, Appendix p. 48.

The Gleason lawn mower patent (Patent No. 703,650, District Court Exhibit A-15) discloses a dumpable receptacle which operates on much the same basic principle as the Parker dumping mechanism. Its receptacle follows the rotary-mower which is towable. The dumping mechanism can be operated from the seat of a horse drawn mower. Dumping is accomplished, as it is with the Parker sweeper, by inverting the receptacle on its pivots. Specification forming part of Letters Patent No. 703,650, p. 2, lines 51-66, July 1,1902, Appendix p. 57.

More could be added to this demonstration that every important element and every important function of the Parker sweeper had been employed in some machine at some time for some purpose. We do not ignore the facts that 1) frequently the receptacles referred to above were differently shaped to accomplish different purposes, 2) street sweepers operate differently from lawn sweepers, 3) hand pushed sweepers operate differently from power towed sweepers, and 4) that no one of the prior art patents shows all of the features of the Parker sweeper in the same combination.

What we do hold is that the state of the art included all of these patents and that a skillful mechanic setting out to build a towable dumpable lawn sweeper , to be used in connection with a lawn mower tractor in the early 1960’s could accomplish his mission without adding any “invention” to the art.

Article I, § 8 of the Constitution provides in part: “Congress shall have Power ... To promote the Progress of Science and [the] useful Arts by securing for limited Times to . Inventors the exclusive Right to their respective . . . Discoveries.” In pursuance of this authority Congress has adopted a statute which describes “invention” as to which a patent monopoly may issue in terms of “novelty,” “utility,” and “nonobviousness.” 35 U.S.C. §§ 101, 102, 103 (1970).

We agree with the District Court that Parker’s lawn sweeper passed the first two tests of novelty and utility. It still must survive the test of Sec. 103 which provides: “A patent may not be obtained ... if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. . . . ” 35 U.S.C. § 103 (1970). As Mr. Justice Black put the matter in 1964: “To begin with, a genuine ‘invention’ or ‘discovery’ must be demonstrated ‘lest in the constant demand for new appliances the heavy hand of tribute be laid on each slight technological advance in an art.’ ” Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 230, 84 S.Ct. 784, 788, 11 L.Ed.2d 661 (1964), and cases cited therein. It is against these standards that we review the validity of the instant patent and find it wanting.

As a matter of law, we hold that the Parker sweeper patent ’294 is invalid because this record demonstrates a failure to meet the nonobviousness test of 35 U.S.C. § 103 (1970).

We likewise conclude that the Parker sweeper design patent ’051 is invalid.

The statute under which this patent was issued provides:

§ 171. Patents for designs
Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title.
The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided. July 19, 1952, c. 950, § 1, 66 Stat. 805. 35 U.S.C. § 171 (1970).

In the leading case dealing with design patents the United States Supreme Court set the standards for review of patentability of a design:

The acts of Congress which authorize the grant of patents for designs were plainly intended to give encouragement to the decorative arts . And the thing invented or. produced, for which a patent is given, is that which gives a peculiar or distinctive appearance to the manufacture, or article to which it may be applied, or to which it gives form. The law manifestly contemplates that giving certain new and original appearances to a manufactured article may enhance its salable value, may enlarge the demand for it, and may be a meritorious service to the public. It therefore proposes to secure for a limited time to the ingenious producer of those appearances the advantages flowing from them. . . . It is the appearance itself, therefore, no matter by what agency caused, that constitutes mainly, if not entirely, the contribution to the public which the law deems worthy of recompense.
We hold, therefore, that if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other. Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 524-525, 528, 20 L.Ed. 731 (1871).

The issue in Gorham, was Gorham’s claim that its design patent was infringed. But this court has applied the Gorham, “ordinary observer” standard to the issue of validity of a design patent.

A design patent must be possessed of novelty; the adaptation of old devices to new purposes, however convenient or useful they may be in their new role, is not invention. The degree of difference required to establish novelty occurs when the average observer takes the new design for a different, and not a modified already existing design. . . . The fact that a design may be distinguished from those found in the prior art does not import the required novelty and ornamentation; its overall aesthetic effect must represent a step which has required inventive genius beyond a prior art. Thabet Mfg. Co. v. Kool Vent Metal Awning Corp., 226 F.2d 207, 212 (6th Cir. 1955).

Appellants claim that Parker Sweeper’s ’051 patented design is extremely similar in appearance to two of Parker’s own sweepers which had long been on the market. We reproduce below four exhibits, the first being the Parker Sweeper ’051 design under .challenge and then three prior designs in the prior art;

We recognize, of course, that the ’051 design differed from the others in both size and framing. But tested by the Gorham standard as applied in Thabet to the eye of the ordinary observer, the designs must be regarded as substantially the same. Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 20 L.Ed. 731 (1871); Tappan Co. v. General Motors Corp., 380 F.2d 888 (6th Cir. 1967); Thabet Mfg. Co. v. Kool Vent Metal Awning Corp., 226 F.2d 207 (6th Cir. 1955).

The judgment of the District Court is reversed and the case is remanded for entry of an order dismissing the complaint on the ground that both patents at issue are invalid.


text:
    HIPPODROME OLDSMOBILE, INC., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 72-1375.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 7, 1972.
    Decided Feb. 27, 1973.
    Louis A. Bradbury, Atty., Tax Div., Dept, of Justice, Washington, D. C., for defendant-appellant; Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwaeks, Daniel B. Rosenbaum, Attys., Tax Div., Dept. of Justice, Washington, D. C., on brief; Charles H. Anderson, U. S. Atty., Nashville, Tenn., of counsel.
    W. W. Berry, Nashville, Tenn., for plaintiff-appellee; James H. Cheek, III, Bass,- Berry & Sims, Nashville, Tenn., on brief.
    Before EDWARDS and LIVELY, Circuit Judges, and McALLISTER, Senior Circuit Judge.
   EDWARDS, Circuit Judge.

This case presents the question as to whether under a 1962 amendment to the Internal Revenue Code a corporate taxpayer may deduct as ordinary and necessary business expenses the depreciation and expenses of a pleasure boat, when concededly the company customers entertained thereon were not subjected to any specific exposure to taxpayer’s products or suggestion that they buy them while being thus entertained.

The District Judge who heard the taxpayer’s suit for refund of taxes paid under protest found these facts:

(1) A number of automobile agencies in Nashville owned boats for the purpose of entertaining past and future customers, to obtain business. This practice was an accepted business procedure in this area.
(2) This was a method of competition for business between automobile agencies.
(3) The accepted method while utilizing these craft with guests thereon was the use of the “soft sell.” The representative of the automobile agency would not initiate business conversation but would wait for the guests to mention the product of the host. As a practical matter, there was an unspoken awareness of the reason for the entertainment.
(4) This business tactic was, from an economic standpoint, very successful. In fact, during the taxable years when the corporate taxayer spent the total sum for the three-year period of slightly more than $11,000, it made direct sales during the same three years to the persons so entertained of $180,-988.11, plus $91,232.11 in subsequent years. The amount of sales does not include sales to persons influenced by the guests.

He held that the use of the boat for taxpayer’s “soft sell” entertainment of customers was an “ordinary and necessary business expense” within the meaning of that language in 26 U.S.C. § 162 (1970), and that it also was deductible under the language of 26 U.S.C. § 274 (1970), Int.Rev.Code of 1954, D.C., 339 F.Supp. 826.

We reverse.

At the outset we accept the above-noted facts as found by the District Judge. We also recognize that expenses at issue on this appeal would probably have been treated as deductible prior to 1962. In that year, however, Congress gave searching attention to claimed abuses of the business expense deduction. The statute finally adopted contains this language:

(B) Facility. — With respect to a facility used in connection with an activity referred to in subparagraph (A), unless the taxpayer establishes that the facility was used primarily for the furtherance of the taxpayer’s trade or business and that the item was directly related to the active conduct of such trade or business,
26 U.S.C. § 274(a)(1)(B) (1970).

We see no need to plant our decision upon the regulations adopted under § 274(a)(1)(B), upon which the government strongly relies, or upon the government’s claims of failure of taxpayer properly to substantiate his claims under certain of those regulations.

The plain language of § 274 which we have quoted bars a tax deduction for the type of “soft sell” entertainment described by the District Judge. We hold as a matter of law that the deductions claimed by the taxpayer for the entertainment of customers shown in this record were not “directly related to . . . the active conduct of the taxpayer’s . . . business.”

The entertainment activities on the corporate taxpayer’s boat (a 45 foot Chris Craft, Corvair) were, of course, a wholly legitimate method of developing business good will. The District Judge found: “This business tactic was, from an economic standpoint, very successful.” Since the District Judge also found that “This practice was an accepted business procedure in this area. . . . [and] a method of competition . . between . . . agencies,” it may well be regarded by the taxpayer as a practice which is either desirable or necessary for it to continue as a mater of sound business judgment. Our question, however, is not the legitimacy of the business practice. In this appeal we deal only with the question of whether expenses for such general good will type of entertainment are subject to deduction for income tax purposes under the terms of the 1962 amendments.

If the words “directly” and “active” in the key statutory phrase quoted above did not of themselves serve to bar such general good will entertainment as this record discloses (and as indicated above, we think they do), then the legislative history of the debate on the 1962 amendment serves to indicate a clear Congressional intent that general good will entertainment could no longer be deducted as a business expense.

26 U.S.C. § 274(a)(1)(B) (1970) as finally adopted was the result of a controversy between the House and the Senate over how restrictive the legislation should be. In its March 18,1962, Report to the House on § 274, the Ways and Means Committee staked out its posi-' tion:

With respect to expenses for entertainment activities, the bill provides that a deduction will be allowed only to the extent that the taxpayer establishes that the expense was directly related to the active conduct of his trade or business. This means that the taxpayer must show a greater degree of proximate relation between the expenditure and his trade or business than is required under present law. Among other things he will have to show more than a general expectation of deriving some income at some indefinite future time from the making of the entertainment-type expenditure ; however, he will not .be required to show that income actually resulted from each and every expenditure for which a deduction is claimed.
If the expenditure is for entertainment which occurs under circumstances where there is little or no possibility of conducting business affairs or carrying on negotiations or discussions relating thereto, the expenditure will generally be considered not to have been directly related to the active conduct of business.
H.R.Rep.No.2508, 87th Cong., 2d Sess. 19 (1962).

The response of the Senate Finance Committee termed the House proposal too. harsh and proposed to amend it by allowing “entertainment expenses associated with the active conduct of a trade or business.”

Your committee’s bill to a considerable degree retains the basic structure of the House bill. However, the effect of the principal provision (the disallowing of a deduction for certain entertainment expenses) has been modified to permit the deduction of expenses for goodwill where a close association is established between the expense and the active conduct of a trade or business.
The report of the Committee on Ways and Means made it clear that the House bill was not designed to disallow completely deductions for entertainment, amusement or recreation expenses, but rather it was intended to eliminate abuses. Under the general rule, no deduction would be allowed for any such expenses except to the extent that such expenses are directly related to the active conduct of a trade or business. Despite the clear language of the House bill and the stated intent of the provision, considerable uncertainty and confusion as to the actual effect of the House draft has been created by the interpretation given this language in the House committee report. It in effect interprets the proposed statutory language to disallow a deduction for any expense for entertainment, amusement, or recreation unless the expense is described in one of a series of specific exceptions to the general rule. Where the expense is covered by an exception, the rules of existing law would continue to govern the deductibility of the expense.
To eliminate the harshness resulting from the House report, amendment of the language of the House bill is necessary. Despite amendment of the House bill your committee has made certain that entertainment expense abuses are eliminated. By your committee’s amendment an alternative rule is added to the House bill under which expenses for entertainment, amusement, or recreation (with respect to both activities and facilities) also will be deductible to the extent that such expenses are associated with the active conduct of a trade or business. This new language will permit deduction of expenses for entertainment, amusement, or recreation incurred for the creation or maintenance of business goodwill without regard to whether a particular exception applies. However, this new language will apply only if the taxpayer demonstrates a clear business purpose and shows a reasonable expectation of deriving some income or other benefit to his business as a result of the expenditure. If he meets this test, the expenditure will be considered to be associated with the active conduct of his trade or business; otherwise, the expense will be disallowed under your committee’s amendment.
S.Rep.No.1881, 87th Cong., 2d Sess. 26, 27 (1962). (Emphasis added.)

If the language employed above by the Senate Finance Committee did not serve to show that it intended to continue to allow deduction of expenses “for entertainment . . . for the creation or maintenance of business good will,” such as is involved in this case, one of the Committee’s examples certainly did:

For example, if the taxpayer acquires a fishing camp which he uses almost exclusively for entertaining business guests, deduction of the expenses of the camp will be disallowed only to the extent that it was used for personal or other nonbusiness purposes. On the other hand, if he uses it almost exclusively for personal purposes, but occasionally takes business guests to the camp no deduction is to be allowed.
S.Rep.No.1881, 87th Cong.2d Sess. 32 (1962).

The report of the Joint Conference Committee shows that the Senate won on one issue but lost on the issue here presented. The Conference Committee added the “associated with” language to § 274(a)(1)(A) dealing with entertainment “directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise).” But the Senate receded and accepted the House proposal as to § 274(a)(1)(B) applicable to general entertainment expenses or facilities (not directly associated with a business meeting or convention) such as we deal with in this appeal:

DISALLOWANCE OF CERTAIN ENTERTAINMENT, ETC., EXPENSES
Amendments Nos. 29, 30, and 31: The bill as passed by both the House and the Senate adds a new section 274 to the code (relating to disallowance of certain entertainment, etc., expenses). Section 274(a)(1) as passed by the House provided that no deduction otherwise allowable under chapter 1 of the code is to be allowed for any item — ■
(1) with respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation, unless the taxpayer establishes that the item was directly related to the active conduct of the taxpayer’s trade or business, or
(2) with respect to a facility used in connection with such an activity, unless the taxpayer establishes that the facility was used primarily for the furtherance of the taxpayer’s trade or business and that the item was directly related to the active conduct of such trade or business,

and such deduction is in no event to exceed the portion of such item directly related to the active conduct of the taxpayer’s trade or business.

Senate amendments Nos. 29, 30, and 31 inserted .the words “or associated with” after the words “directly related to” each place they appeared in the new section 274(a)(1) as passed by. the House.

Under the conference agreement the House recedes on Senate amendment No. 29 with an amendment providing that deductions otherwise allowable under chapter 1 of the code shall not be allowed for any item with respect to an entertainment type activity “unless the taxpayer establishes that the item was directly related to, or, in the ease of an item directly preceding or following a substantial and bona fide business discussion (including business meetings at a convention or otherwise), that such item was associated with,” the active conduct of the taxpayer’s trade or business. Under the conference agreement, the Senate recedes on amendment No. 30, and the House recedes on amendment No. 31 with an amendment conforming to the action on amendment No. 29.

The rule of the House bill as described in the report of the Committee on Ways and Means is more strict than the “or associated with” rule of the Senate amendment. The rule of the House bill would not allow deduction of expenditures for entertainment occurring under circumstances where there is little or no possibility of conducting business affairs or carrying on negotiations or discussions relating thereto, such as where the group of persons entertained is large or the distractions substantial.

It is the understanding of the conferees, both on the part of the House and the Senate, that the alternative Senate “or associated with” test as described in the report of the Finance Committee would apply to certain entertaining primarily to encourage goodwill where the evidence of business connection is clear, whether or not business is actually transacted or discussed during the entertainment. The conference agreement would permit a deduction for the cost of an entertainment item, even though the item is not directly related to the active conduct of the taxpayer’s trade or business. If the item is associated with it, so long as the entertainment activity directly precedes or follows a substantial and bona fide business discussion. The conditions under which an item is “associated with” the active conduct of a trade or' business are contained in the report of the Committee on Finance. The deductibility of other items of entertainment expense, as well as items with respect to facilities, would be governed by the rule of the House bill.

Section 274(a) as agreed to by the conferees will allow as a deduction the cost of entertaining connected with what are primarily business meetings. For example, if the taxpayer conducts substantial negotiations with a group of business associates and that evening entertains the group and their wives at a restaurant, theater, concert, or , sporting event, such entertainment expenses, if associated with the active conduct of the taxpayer’s business, will be deductible even though the purpose of the entertainment is merely to promote goodwill in such business. Moreover, if a group of business associates with whom the taxpayer is conducting business meetings comes from out of town to the taxpayer’s place of business to hold substantial business discussions, the entertainment of such business guests by the taxpayer the evening prior to the business discussions will be regarded as directly preceding the business discussions.

Similarly, if in between, or in the evenings after, business meetings at a convention, the taxpayer entertains his business associates or prospective customers attending such meetings (and their wives), such entertainment will be considered as directly preceding or following a business discussion.
Any entertainment which is a part of substantial and bona fide business discussions, where the conduct of business is the principal activity during the combined entertainment and business time spent together by the taxpayer and the person or persons entertained, will be deductible if the expense is associated with the active conduct of the taxpayer’s trade or business.
H.Conf.Rep.No.2508, 87th Cong., 2d Sess. 16 (1962).

The House Ways and Means Committee which prevailed on the § 274(a)(1) (B) issue, of course, previously made its purpose clear:

Your committee’s bill is designed to eliminate the abuses which have developed in this area. The bill provides new rules which, in general, would: (1) disallow a deduction with respect to entertainment activities, except to the extent that the expense is directly related to the active conduct of a trade or business; (2) disallow a deduction with respect to entertainment facilities, unless the facility is used primarily for the furtherance of the taxpayer’s trade or business and the expense is directly related to the active conduct of the trade or business;
* * * * * -X-
This means that the taxpayer must show a greater degree of proximate relation between the expenditure and his trade or business than is required under present law. Among other things he will have to show more than a general expectation of deriving some income at some indefinite future time from the making of the entertainment-type expenditure; however, he will not be required to show that income actually resulted from each and every expenditure for which a deduction is claimed.
If the expenditure is for entertainment which occurs under circumstances where there is little or no possibility of conducting business affairs or carrying on negotiations or discussions relating thereto, the expenditure will generally be considered not to have been directly related to the active conduct of business.
H.R.Rep.No.2508, 87th Cong., 2d Sess. 18, 19 (1962).

Additionally, subsequent to the adoption of § 274(a) (1) (B) the Treasury Department adopted regulations under 26 U.S.C. § 274(h) which serve to reinforce the views we have expressed above. See Regs. 26 C.F.R. § 1.274-2, and more particularly subdivisions 1.274-2(c) (3) (i), (ii) and (iii) (1972). Subdivision (iii) specifically provides:

The active conduct of trade or business is considered not to be the principal character or aspect of combined business and entertainment activity on . . . yachts and other pleasure boats unless the taxpayer clearly establishes to the contrary.
26 C.F.R. § 1.274-2(c)(3)(iii) (1972).

This regulation and its subdivisions have been upheld and applied in Fiorentino v. Commissioner, 29 T.C.M. 1445 (1970), aff’d in open court, 455 F.2d 1406 (2d Cir. 1971); Andress v. Commissioner, 51 T.C. 863 (1969), aff’d per curiam, 423 F.2d 679 (5th Cir. 1970). The District Judge did not discuss or make any finding concerning this subdivision. Under the view we take of this appeal, reliance on this regulation is not required. If it were, however, we would hold that under this record the taxpayer had failed clearly to establish the contrary of the presumption.

We note, of course, that appellee relies upon language contained in § 1.274-2(e) (3) (ii). But appellee fails to note that even if the activity which led to these claims for deduction did satisfy subdivision (ii) under the regulation, it also had to meet “all the requirements of subdivisions (i), (ii), (iii) and (iv).” 26 C.F.R. 2(a)(3) (1972). Our review of. those subdivisions convinces us that appellee’s entertainment activity passed the tests of none of them.

We shall, however, comment specifici-cally upon the language relied upon by appellee which we emphasize below:

“the taxpayer actively engaged in a business meeting, negotiation, discussion, or other bona fide business transaction, other than entertainment, for the purpose of obtaining such income or other specific trade or business benefit . . . ” 26 C.F.R. 1.274-2 (c) (3)(ii) (1972). (Emphasis added.)

In the context of this regulation we do not see how the language “bona fide business transaction, other than entertainment” can be said to fit a trip on a yacht or boat where past or prospective automobile customers are entertained where, as the District Judge found, “the representative of the automobile agency would not initiate business conversation but would wait for the guests to mention the product of the host.”

Under the language of § 274 (a)(1)(B) and its legislative intent as set out above, the corporate taxpayer which claims a deduction for entertainment not covered by § 274(a)(1)(A) must in meeting the statutory requirements show a definable business purpose for the occasion (other than creation of general good will) and unilateral control (absent unforeseen circumstances) over whether the business purpose is carried out.

The judgment of the District Court is vacated and the case is remanded for entry of an order dismissing the complaint.


author: TRASK, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Robert Bill HAYES, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Neil Eugene MEICKE, Defendant-Appellant.
    Nos. 72-3009, 72-3010.
    United States Court of Appeals, Ninth Circuit.
    March 5, 1973.

      Frederic F. Kay, Asst. Federal Public Defender (argued), Tom Karas, Federal Public Defender, Michael P. Callahan (argued), Tucson, Ariz., for defendants-appellants.
    William C. Smithermen, U. S. Atty. (argued), Sarah Ann Bailey, Asst. U. S. Atty., Tucson, Ariz., for plaintiff-appel-lee.
    Before: ELY and TRASK, Circuit Judges, and EAST, District Judge.

       Honorable William G. East, Senior United States District Judge, District of Oregon, sitting by designation.

   TRASK, Circuit Judge:

Appellants were convicted of possessing, with intent to distribute, approximately 18 pounds of marijuana in violation of 21 U.S.C. § 841(a)(1). They contend that the district court erred in denying their motion to suppress evidence, marijuana found inside their Volkswagen van. In addition, appellants attack the fine imposed upon them as an improper sentence under the Federal Youth Corrections Act. 18 U.S.C. §§ 5005-5026.

We conclude that the government agents had probable cause to search the van when they discovered it parked on the side of the highway. They had discovered marijuana seeds on the floor of the van at the initial border crossing. In addition, the van had disappeared from the main highway in a notorious drug smuggling area. Finally, appellants consented to open the van’s door for the agents who were able to get a plain view of a burlap bag containing what appeared to be brick-shaped objects as the door opened.

Appellants were committed to the custody of the Attorney General for treatment and supervision under the Federal Youth Corrections Act. 18 U.S.C. § 5010(b). The court also imposed a fine of $2,000 on appellant Hayes and $1,000 on appellant Meicke. Appellants contend that their fines are inconsistent with the sentences they received under the Federal Youth Corrections Act and are illegal. Appellants correctly assert that the Act does not provide for a fine when a youth offender is committed under the Act.

The government argues, however, that commitment under section 5010(b) of the Act is expressly in lieu of the penalty of imprisonment otherwise provided by law. Since the penalty for violation of 21 U.S.C. § 841(a)(1) is “. . . a term of imprisonment of not more than 5 years, a fine of not more than $15,000, or both,” the argument is that the Youth Corrections Act sentence is in lieu of only the imprisonment penalty leaving open the fine of “. . . not more than $15,000, or both.” On its face section 5010(b) does not necessarily foreclose other penalties such as fines under other applicable penalty provisions. Section 5010(b) provides:

“If the court shall find that a convicted person is a youth offender, and the offense is punishable by imprisonment under applicable provisions of law other than this subsection, the court may, in lieu of the penalty of imprisonment otherwise provided by law, sentence the youth offender to the custody of the Attorney General for treatment and supervision pursuant to this chapter until discharged by the Division as provided in section 5017(c) of this chapter

An early model for the Federal Youth Corrections Act was drafted in 1942 by the Judicial Conference of the Committee on Punishment for Crime. The sentencing provision provided that:

“[T]he court may, as a penalty for the offense and in lieu of the penalty otherwise provided by law, sentence the youth offender to the custody of the Authority for treatment and supervision until discharged by the Authority as provided in this Title.” Draft of an Act Recommended by the Committee to Provide a Correctional System for Adult and Youth Offenders Convicted in Courts of the United States, tit. Ill, § 1(a).

It is not clear why the equivalent provision under the Federal Youth Corrections Act, which was adopted in 1950, specified that sentencing under 5010(b) is in lieu of the penalty of imprisonment. There is no indication that Congress intended by such language to make fines permissible in conjunction with a sentence committing a youth offender for rehabilitative treatment.

The construction of the Act urged by the government is inconsistent with the rehabilitative policy and purpose of the Act. The Act seeks to

“substitute for retributive punishment methods of training and treatment designed to correct and prevent anti-social tendencies. It departs from the mere punitive idea of dealing with criminals and looks primarily to the objective idea of rehabilitation.” H. R.Rep.No.2979, 81st Cong., 2d Sess. 4 (1950), in 2 U.S.Code Cong.Serv. pp. 3983, 3985 (1950).

We have pointed out elsewhere that section 5010

“. . . gives a judge three choices at the time for sentencing a youth offender. He may place the latter on probation (§ 5010(a)), sentence him to the custody of the Attorney ■ General for treatment and supervision, (§§ 5010(b), (c)), or sentence him as an adult (§ 5010(d)).” Cherry v. United States, 299 F.2d 325, 326 (9th Cir. 1962).

There is certainly nothing to indicate that the judge may select any combination thereof. The Federal Youth Corrections Act is an alternative sentencing provision. At the discretion of the judge a youth offender deemed treatable under the Act can be sentenced to treatment rather than punishment under the applicable penalty provision provided by law. A combination of rehabilitative treatment and retributive punishment is not intended and is improper. See United States v. Waters, 141 U.S.App.D.C. 289, 437 F.2d 722, 726 (1970).

We conclude that a judge electing to commit a youth offender for treatment and supervision under the alternative sentencing provisions of the Federal Youth Corrections Act is foreclosed from imposing an additional punitive penalty under another provision.

The convictions are affirmed but the fines imposed are vacated.

      . See generally Robert McNamara, Jr., The Federal Youth Corrections Act: Past Concern in Need of Legislative Reappraisal, 11 Am.Crim.L.Rev. 229 (1972).