author: WILLIAM E. MILLER, Circuit Judge.

text:
    DETROIT LOCAL JOINT EXECUTIVE BOARD, HOTEL AND RESTAURANT EMPLOYES AND BARTENDERS INTERNATIONAL UNION, AFL-CIO, Plaintiff-Appellee, v. HOWARD JOHNSON COMPANY, INC., Defendant-Appellant.
    No. 72-2009.
    United States Court of Appeals, Sixth Circuit.
    Argued April 12, 1973.
    Decided July 12, 1973.

      James D. Tracy, Detroit, Mich., for defendant-appellant; Ronald J. Santo, Dykema, Gossett, Spencer, Goodnow & Trigg, Detroit, Mich., on brief.
    Donald F. Sugerman, Detroit, Mich., for plaintiff-appellee; Miller, Klimist, Cohen, Martens & Sugerman, Detroit, Mich., on brief.
    Before PHILLIPS, Chief Judge, and CELEBREZZE and MILLER, Circuit Judges.

      . While the unions named in the two agreements bear distinct names they are apparently identical in interest and governance and will be referred to herein and considered as one.

   WILLIAM E. MILLER, Circuit Judge.

The plaintiff, Detroit Local Executive Board, filed this action under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, seeking to require the defendant, Howard Johnson Company, Inc., to arbitrate grievances that arose during its take-over of a motel and restaurant formerly owned by P. L. Grissom & Son, Inc., and the Belleville Restaurant Company.

On Decembr 7, 1959, the defendant and P. L. Grissom & Son, Inc., entered into a license agreement providing for the operation of a “Howard Johnson Motor Lodge” in Belleville, Michigan. On August 18, 1960, the defendant entered into an operator’s agreement with Ben Bibb, P. L. Grissom, and the Belleville Restaurant Company for the operation of a “Howard Johnson’s Restaurant” adjacent to the motor lodge. On January 1, 1968, the Belleville Restaurant Company and the Hotel & Restaurant Employees & Bartenders International Union entered into a collective bargaining contract affecting the restaurant employees. On August 1, 1968, P. L. Grissom & Son, Inc., the operator of the motor lodge, entered into a collective bargaining agreement with the Hotel, Motel and Restaurant Employees Union, Local 705, concerning the motel employees. On June 16, 1972, P. L. Grissom & Son, Inc., Charles Grissom, and the Belleville Restaurant Company sold their interest in the motor lodge and the restaurant to the Howard Johnson Company, Inc. Pursuant to an oral agreement, the transfer date was set for July 24, 1972. On June 28, 1972, Howard Johnson notified Gris-soms that it would not recognize or assume any labor agreements entered into by these companies. Also Howard Johnson would not assume any obligations or liabilities of the companies resulting from any labor agreements or from unfair labor practices. On July 9, 1972, Grissoms gave notice to their employees that their employment would be terminated at midnight July 23, 1972. On July 13, 1972, registered mail notices were sent to the union notifying it of the termination of the business. Howard Johnson began interviewing prospective employees on July 10, 1972, and the first employees were hired on July 18, 1972. When Howard Johnson took over the operation of the motel and restaurant, it retained only nine of the restaurant’s employees and only one of the motel’s employees. At least 40 employees were permanently replaced.

On July 21, 1972, the plaintiff union instituted this action in state court and obtained a temporary injunction prohibiting Howard Johnson from locking out or terminating the employment of the 40 employees. The company did not honor the injunction, claiming that it did not receive adequate service and notice. A hearing was held at the state court level at which the injunction was dissolved, pending a further pretrial hearing. The defendant filed a petition for removal and the state court pretrial hearing as such was never held. A hearing was held in federal district court on August 7, 1972, at which time the parties orally agreed on a stipulation of facts. On August 22, 1972, the district court entered its memorandum, finding for the plaintiff. Notice of appeal was .duly filed and the district court granted a stay pending appeal.

The collective bargaining agreement in effect between the motor lodge and the. union contained the usual arbitration provisions. The grievance procedures were in four steps, the fourth step being submission of the grievance to an arbitrator. The arbitration provision provided:

Section 2. An arbitrator shall not have any right or authority to add to, subtract from or modify the terms and provisions of this Agreement. Further, the renewal, extension, modification or amendment of this Agreement shall not be subject matter of any grievance or arbitration procedure.

The agreement also provided:

“This Agreement shall be binding upon the successors, assigns, purchasers, lessees or transferees of the Employer whether such succession, assignment or transfer be effected voluntarily or by operation of law or by merger or consolidation with another company provided the establishment remains in the same line of business.”

Apparently neither agreement attempted to delineate specifically which types of disputes were arbitrable.

The district court examined in close detail the two leading cases of the Supreme Court applicable to this action, John Wiley & Sons v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964) and NLRB v. Burns International Security Services, Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). The district court concluded that Wiley was more in point than Burns and consequently that the defendant should be required to arbitrate. This, finding was premised on the conclusion that Howard Johnson was a successor employer, and therefore, under Wiley should be required to honor the arbitration clause of the Grissoms’ collective bargaining agreements with the union. The district court left to the arbitrator the decision as to which provisions of the agreements should be applicable to Howard Johnson.

The first question we must face is whether Howard Johnson is a successor employer. The Court in Wiley said:

We do not hold that in every case in which the ownership or corporate structure of an enterprise is changed the duty to arbitrate survives. As indicated above, there may be cases in which the lack of any substantial continuity of identity in the business enterprise before and after a change would make a duty to arbitrate something imposed from without, not reasonably to be found in the particular bargaining agreement and the acts of the parties involved. 376 U.S. at 551, 84 S.Ct. at 915.

In Burns the Court cited with approval a number of court decisions enforcing orders of the NLRB delineating a number of factors to consider in determining whether there is a “continuity of interest” so that the purchaser of a business is a successor. These factors include: the prior and subsequent structure of the business operation, NLRB v. Zayre Corp., 424 F.2d 1159, 1163 (5th Cir. 1970); S. S. Kresge Co. v. NLRB, 416 F.2d 1225 (6th Cir. 1969), the location of the operation, NLRB v. Zayre, supra; S. S. Kresge v. NLRB, supra; NLRB v. McFarland, 306 F.2d 219 (10th Cir. 1962), and the identity of the employees and the nature of the work, NLRB v. Zayre, supra, Tom-A-Hawk Transit, Inc. v. NLRB, 419 F.2d 1025 (7th Cir. 1969).

Howard Johnson argues that the controlling factor in all successorship cases is whether the new owner hired a majority of the old owner’s employees. For support it points to the Court’s language in Burns.

It has been consistently held that a mere change of employers or of ownership in the employing industry is not such an “unusual circumstance” as to affect the force of the Board’s certification within the normal operative period if a majority of employees after the change of oumership or management were employed by the preceding employer. 406 U.S. at 279, 92 S.Ct. at 1577 (emphasis added).

Also:

But where the bargaining unit remains unchanged and a majority of the employees hired by the new employer are represented by a recently certified bargaining agent there is little basis for faulting the Board’s implementation of the express mandates of § 8(a)(5) and § 9(a) by ordering the employer to bargain with the incumbent union. 406 U.S. at 281, 92 S.Ct. at 1579.

Moreover, Howard Johnson points to this court’s decisions in NLRB v. Interstate 65 Corp., 453 F.2d 269 (6th Cir. 1971) and NLRB v. Wayne Convalescent Center, 465 F.2d 1039 (6th Cir. 1972). Both of these decisions placed great reliance on the hiring of enough of the predecessor’s employees to constitute a majority of the successor’s work force in finding successorship status. On the other hand, the absence of the hiring of a majority of the predecessor’s employees may lead to the refusal to find successorship status. See NLRB v. John Stepp’s Friendly Ford, Inc., 338 F.2d 833 (9th Cir. 1964). Apparently the same considerations apply to actions under § 301 of the LMRA. In Wackenhut Corp. v. International Union, United Plant Guards, 332 F.2d 954 (9th Cir. 1964), the Ninth Circuit placed major reliance on the hiring of substantially all of the predecessor’s employees to find successorship status. The Court there also followed Wiley and required the successor employer to abide by the substantive terms of the collective bargaining agreements as determined by an arbitrator. In Printing Specialties & Paper Products Union v. Pride Papers Aaronson Bros. Paper Corp., 445 F.2d 361 (2nd Cir. 1971), the Second Circuit refused to find successorship in an action under § 301. The Court stated: “The fact that no [predecessor’s] employees worked at the new enterprise is most compelling evidence of lack of substantial continuity in the business enterprise.” 445 F.2d at 363-364. Only one case has been.brought to our attention finding successorship in a § 301 action where the successor did not hire a majority of the predecessor’s employees. In Monroe Sander Corp. v. Livingston, 377 F.2d 6 (2nd Cir. 1967), the Second Circuit held that where a parent company terminated the employees of a subsidiary in order to continue the same functions at a newly purchased operation, the parent could be required to arbitrate, as a successor, the termination of the subsidiary’s employees.

In the case before us, the district court held that although Howard Johnson did not hire a majority of Grissoms’ employees, it could nevertheless be required to arbitrate as a successor. The court found considerable continuity of interest between the new and old businesses. It pointed out that substantially all of the assets of Grissoms were purchased, that the location and identity of the businesses remained exactly the same, that there was only a one minute hiatus in the operation of the enterprises at the time of the transfer, and that many of the products and services were identical. Relying on these factors the district court viewed Howard Johnson as a successor. We agree with this conclusion.

In addition to the criteria relied upon by the district court, the franchising agreements between Grissoms and Howard Johnson included extensive reservations by Howard Johnson over the operation of the motel and the restaurant, evidencing the close control it possessed over the management and activities of both operations. Also the motel bargaining agreement itself contained a successor-ship clause.

Furthermore, we do not deem the refusal to hire a majority of Grissoms’ employees to preclude the finding of suc-cessorship, at least in this § 301 action. Howard Johnson’s argument here attempts to pull itself up by its own bootstraps. It argues that it need not arbitrate the refusal to hire Grissoms’ employees because it is not a successor. It is not a successor, because it did not hire a majority of Grissoms’ employees. Also to adopt the position urged by Howard Johnson would make the employees’ jobs completely contingent on the employer’s desire either to retain or to disregard the collective bargaining agreements. If Howard Johnson sought to retain the agreement negotiated by Grissoms, it would hire a majority of Grissoms’ employees. If, on the other hand, it wished to disregard the collective bargaining agreement, it would simply hire none or at best only a few of the former employees. The decision whether to hire the predecessor’s employees should turn upon other and more relevant considerations.

Since we determine that Howard Johnson is a successor employer, we must decide whether such status carries with it the obligation to arbitrate under the collective bargaining agreements. In Wiley the Supreme Court held that collective bargaining agreements under federal labor law must be interpreted differently than other contracts as construed under common law principles. Accordingly, the Court held that the arbitration provisions are binding on a successor employer even though it was not a party to the collective bargaining agreement. Following Wiley several circuits have held that a successor employer in § 301 actions could be bound by the substantive terms of the previously negotiated collective bargaining agreement if appropriate under the arbitrator’s award. See, e. g., Wackenhut Corp. v. International Union, United Plant Guards, supra; United States Gypsum Co. v. United Steelworkers of America, 384 F.2d 38 (5th Cir. 1967); Monroe Sander Corp. v. Livingston, supra.

Howard Johnson, however, argues that the Supreme Court’s decision in Burns that a successor employer does not violate § 8(a)(5) when it refuses to honor any of the substantive terms of the predecessor’s collective bargaining agreement, also precludes an arbitrator from requiring a successor to honor any of the terms of the previous agreement. We do not feel that Burns requires such a result.

In Wiley the Court stated:

that the rightful prerogative of owners independently to rearrange their businesses and even eliminate themselves as employers be balanced by some protection to the employees from a sudden change in the employment relationship. The transition from one corporate organization to another will in most cases be eased and industrial strife avoided if employees claims continue to be resolved by arbitration rather than by “the relative strength of the contending forces. Warrior & Gulf, supra, [363 U.S.] at 580 [80 S.Ct. at 1352, 4 L.Ed.2d 1409], 376 U.S. at 549, [84 S.Ct. at 914].”

Nothing in Burns in our opinion alters this reflection of national policy. It is true that in Burns the Court said:

A potential employer may be willing to take over a moribund business only if he can make changes in corporate structure, composition of the labor force, work location, task assignment, and nature of supervision. Saddling such an employer with the terms and conditions of employment contained in the old collective-bargaining contract may make these changes impossible and may discourage and inhibit the transfer of capital. On the other hand, a union may have made concessions to a small or failing employer that it would be unwilling to make to a large or economically successful firm. The congressional policy manifest in the Act is to enable the parties to negotiate for any protection either deems appropriate, but to allow the balance of bargaining advantage to be set by economic power realties. Strife is bound to occur if the concessions that must be honored do not correspond to the relative economic strength of the parties. 406 U.S. at 287-288, 92 S.Ct. at 1582.

Furthermore, the Court criticized the Board’s position that the successor is bound by all the terms of the collective bargaining agreement. It said:

The Board’s position would also raise new problems, for the successor employer would be circumscribed in exactly the same way as the predecessor under the collective-bargaining contract. It would seemingly follow that employees of the predecessor would be deemed employees of the successor, dischargeable only in accordance with provisions of the contract and subject to the grievance and arbitration provisions thereof. Burns would not have been free to replace Wackenhut’s guards with its own except as the contract permitted. Given the continuity of employment relationship, the pre-existing contract’s provisions with respect to wages, seniority rights, vacation privileges, pension and retirement fund benefits, job security provisions, work assignments and the like would devolve on the successor. 406 U.S. at 288-289, 92 S.Ct. at 1582 (footnotes omitted).

At first glance this language appears to cast doubts on the continued validity of Wiley. We do not feel, however, that the Court intended to eviscerate Wiley. The two cases are not irreconcilable. In Burns the Supreme Court distinguished Wiley on three grounds. First, the Court noted that Wiley arose in the context of a Sec. 301 action for arbitration, while Burns arose in the context of a Sec. 8(a)(5) proceeding where the National Labor Relations Board is “expressly limited by the provisions of Sec. 8(d).” 406 U.S. at 285, 92 S.Ct. at 1581. Second, the Court noted that Wiley was limited to an arbitration order while in Burns the Board found the company in violation of Sec. 8(a)(5) for refusing to bargain with the union in not honoring the substantive provisions of the collective bargaining agreement. Third, Wiley involved a merger occurring against the background of state law, while in Burns the two companies were competitors and had no prior dealings.

The first and second distinctions presented by the Court are convincing that Burns does not preclude arbitration in the situation before us. Traditionally, arbitrators have been accorded wide flexibility in interpreting collective bargaining agreements. In Wiley the Court’s limited holding was that the successor employer was under a duty to arbitrate grievances, the scope and extent of the duty being governed by the collective bargaining agreement. The Court avoided any expression of views as to the merits of the substantive matters of arbitration. Since Wiley arbitration awards have taken into account altered conditions created by a change of employers, although of course the arbitrator’s authority must come from the collective bargaining agreement itself. As stated by the Third Circuit in United Steelworkers of America v. Reliance Universal, Inc., 335 F.2d 891, 895 (3rd Cir. 1964):

In any event, we find implicit in the guarded language of the Wiley opinion, recognition and concern that new circumstances created by the acquisition of a business by a new owner may make it unreasonable or inequitable to require labor or management to adhere to particular terms of a collective bargaining agreement previously negotiated by a different party in different circumstances. Although the pre-existing labor contract indicates the structure of labor relations and the established practice of the shop at the beginning of the new proprietorship, an arbitrator of a subsequent complaint charging unwarranted departure from that scheme may properly consider any relevant new circumstances arising out of the change of ownership, as well as the provisions of and practices under the old contract, in achieving a just and equitable settlement of the grievance at hand. The requirements of the contract remain basic guides to the law of the shop, but the arbitrator may find that equities inherent in changed circumstances require an award in a particular controversy at variance with some term or terms of that contract.

The NLRB in its Burns decision had adopted an all-or-nothing approach. If the employer was a successor then it was required to honor all of the terms of the predecessor’s agreement. If not a successor, it did not have to honor any part of the predecessor’s agreement. Burns Int’l. Services, Inc., 182 NLRB 348 (1970). Apparently the Board felt that it was barred from taking a middle ground by requiring the successor to honor selective portions of the agreement by the Supreme Court’s ruling in H. K. Porter Co. v. NLRB, 397 U.S. 99, 90 S.Ct. 821, 25 L.Ed.2d 146 (1970). As noted by the Supreme Court in Burns the Board’s position would lead to rigidity in lator relations. This factor we feel is primarily the Supreme Court’s reason for rejection of the Board’s position. In arbitration proceedings as ordered below such rigidity is not present.

Also we feel that our holding is in accordance with the national policy of the settlement of labor disputes by arbitration rather than by a contest of strength between the parties. See, United Steel Workers of America v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). We do not feel that such a role was vitiated by Burns.

Finally, we must note that nothing in our opinion should be taken as an expression on the merits of the respective complaints before the arbitrator. As stated by the Fifth Circuit in International Ass’n of Machinists v. Hayes Corp., 296 F.2d 238, 244 (5th Cir. 1961):

We make doubly plain that this opinion in no way indicates what, if any, decision an arbitrator should or must make. We hold merely that he should determine the grievance. Whether the decision or the remedy prescribed is, or is not, supportable is for another day.

In accordance with the foregoing the judgment of the district court is affirmed.

      . Section 301 of the L.M.R.A., 29 U.S.C. § 185, provides for action in federal courts by either party to enforce the provisions of a collective bargaining agreement.

      . For convenience the prior owners of both the restaurant and the motor lodge will hereafter be referred to as the Grissoms.

      . The Grissoms apparently have expressed their willingness to settle or arbitrate any liability they might have under the collective bargaining agreements.

      . The collective bargaining agreement between the restaurant and the union contained a similar grievance procedure, but only in three steps.

      . The restaurant-union agreement although it contained an arbitration clause did not include either of the above-quoted provisions.

      . In Wiley the Court required the surviving corporation, after a merger, to arbitrate grievances under the arbitration provisions contained in the collective bargaining agreement negotiated by the union with the displaced corporation.
      In Burns the Court held that a successor although required to bargain with the union if it retained a majority of the pred-eeessor’s employee, need not honor the previously negotiated collective bargaining agreement.

      . This list of considerations is not intended to be exhaustive. Since each case must be considered on its own facts, other factors could be considered in appropriate circumstances.

      . This clause does not indicate an intention on the part of Howard Johnson to be bound by the collective bargaining agreement since it was not a party to the agreement, but it does indicate the intention of the union to have the collective bargaining agreement continue in effect after a change in ownership.

      . Howard Johnson also argues that since this was a purchase and sale of assets, it is not a successor as it did not by operations of the prior agreements. In Wiley, the transaction was a merger in which the transaction was a merger in which the surviving corporation is liable for the debts of the disappearing corporation. This distinction has been consistently rejected in § 301 actions. United States Gypsum Co. v. United Steelworkers of America, 384 F.2d 38 (5th Cir. 1967); United Steelworkers of America v. Reliance Universal Inc., 335 F.2d 891 (3rd Cir. 1964); Wackenhut Corp. v. International Union, United Plant Guards, 332 F.2d 954 (9th Cir. 1964).

      . Section 8(d), 29 U.S.C. Sec. 158(d), as interpreted by the Supreme Court in H. K. Porter v. NLRB, 397 U.S. 99, 90 S.Ct. 821, 25 L.Ed.2d 146 (1970) prohibits the NLRB from ordering a party to accede to a demand to incorporate a specific provision into a collective bargaining agreement.

      . Even before the Supreme Court’s ruling in Burns the National Labor Relations Board had retreated from this approach and found that “unusual circumstances” will present the imposition of the entire collective bargaining agreement where it would lead to inequitable results. Emerald Maintenance Inc., 188 NLRB No. 139 (1971).

      . The plaintiff suggests that tlie approach adopted in this case will make the employees’ and the employer’s rights contingent on the choice of forum. AVc do not disagree with this characterization, but feel that it follows from the fii'st ground on which Burns distinguished Wiley— that the NLRB is expressly limited by Sec. 8(d) of the Act while an arbitrator is under no such restriction.


source: Caselaw Access Project

license: Public Domain

text:
    Aaron Edson BLASKY, Administrator of the Estate of Dovie B. Blasky, Plaintiff-Appellee, v. WHEATLEY TRUCKING, INC., et al., Defendants-Appellants.
    No. 72-2065.
    United States Court of Appeals, Sixth Circuit.
    Argued April 5, 1973.
    Decided June 29, 1973.
    Leo J. Breslin, Trial Counsel, Cincinnati, Ohio, for defendants-appellants; Lindhorst & Dreidame, Cincinnati, Ohio, of counsel, for appellant, Wheatley Trucking, Inc.
    Walter C. Beall, Cincinnati, Ohio, for plaintiff-appellee.
    Before CELEBREZZE, MILLER and KENT, Circuit Judges.
   WILLIAM E. MILLER, Circuit Judge.

This diversity action was brought in the district court by the plaintiff as the administrator of the estate of Dovie B. Blasky, deceased. Mrs. Blasky died as a result of injuries received in a traffic accident involving the automobile in which she was a passenger and a tractor-trailer owned by the defendant, Wheatley Trucking, Inc. At trial the defendant admitted liability. The only issue before the jury was the determination of the amount of damages. The jury returned a verdict of $100,000 in favor of the plaintiff. Subsequently, the trial court overruled the defendant’s motion for a new trial which challenged the amount of the verdict.

Mrs. Blasky was 67 years old at the time of her death and was survived by her husband and nine children. She was in good health and apparently was extremely active. The decedent was not formally employed at the time of her death nor had she produced any income for many years. She lived with her husband and performed in an exemplary manner all the myriad tasks of a housewife. Although Mrs. Blasky’s children were all married and had separate residences, her attendance upon her children involved both family members moving into her home and her moving into theirs, often for extended periods of time. For example, one of Mrs. Blasky’s daughters, Mrs. Jo Ann Jackson, testified that she lived with her mother for about a year after she was married; and during the course of an illness, before and after the birth of her child, Mrs. Blasky stayed with her for three months. During this latter period, which ended shortly before the fatal accident, Mrs. Blasky generally assumed the household duties as well as cared for the new baby.

Besides the members of the Blasky family who testified, the plaintiff presented an expert witness, a statistician for. the Ohio Bureau of Employment Services, who testified to the range of wages of persons whose duties fall within the aggregate of those of a housewife. The average wage for such persons was approximately $2.50 per hour. The defendant’s sole witness, a representative from a private employment service, testified that the average cost of help to perform domestic duties was $50.00 per week, it was also stipulated at trial that the life expectancy of Mrs. Blasky was 14.6 years and that of Mr. Blasky was 9.2 years.

The defendant contends that the verdict was excessive, contrary to the weight of the evidence and rendered under the influence of passion and prejudice, and hence the district court erred in overruling the defendant’s motion for a new trial.

The standard of review in this case is whether the district court abused its discretion in denying a new trial. As this Court stated in Humble v. Mountain State Construction Company, 441 F.2d 816, 820 (6th Cir. 1971), a diversity action brought under the Kentucky Wrongful Death Act:

It is well settled that even in a case in which jurisdiction of the District Court is based on diversity of citizenship and in which the appropriate state law controls on all substantive questions, the granting or denial of a new trial on the ground of excessiveness of the verdict is within the discretion of the District Court. The District Court’s determination in this regard will not be disturbed except for an abuse of discretion. Mooney v. Henderson Portion Pack Co., 339 F.2d 64 (6th Cir. 1964); Montgomery Ward & Co. v. Morris, 273 F.2d 452 (6th Cir. 1960); Spero-Nelson v. Brown, 175 F.2d 86 (6th Cir. 1949).

While Ohio law may not be controlling on the issue of abuse of discretion by a federal trial judge in a diversity case, Ohio law does control the standard to be applied in determining damages under its Wrongful Death Statute.

The standard of damages under the Ohio Statute, Ohio Rev.Code Ann. § 2125.02 (Page, 1968), is stated as follows:

The jury may give such damages as it thinks proportioned to the pecuniary injury resulting from such death to the persons, respectively, for whose benefit the action was brought.

The Ohio courts have repeatedly and consistently held that the Ohio statute only allows recovery for pecuniary loss. As the Ohio Supreme Court stated in syllabus number 6 in Karr v. Sixt, 146 Ohio St. 527, 67 N.E.2d 331 (1946), a case decided under the predecessor statute to Ohio Rev.Code Ann. § 2125.02 (Page, 1968):

6. The term “pecuniary injury” as used in Section 10509-167, General Code, comprehends essentially injury measured by the prospective advantages of a pecuniary nature which have been cut off by the premature death of the person from whom they would have proceeded. The term does not embrace such elements as bereavement or mental pain and suffering of the beneficiaries or the loss of the society or comfort of the deceased.

See also Kennedy v. Byers, 107 Ohio St. 90, 140 N.E. 630 (1923). In Sutfin v. Burton, 91 Ohio App. 177, 193, 104 N.E.2d 53, 60 (1951) the court stated:

The general rule in respect to the measure of damages recoverable for wrongful death, may be gleaned from American Jurisprudence on the subject “Death,” Sec. 190 to 242, the gist of which is that in determining an amount of damages recoverable for wrongful death, it is proper to take into consideration such factors, varying in individual cases, as the victim’s life expectancy, character, health, habits, talents, prospects, prior earnings, probable future earnings, needs of and contributions to dependents and current returns on investments.

The Ohio cases have stated that “[e]xcept in a case involving the death of a breadwinner of a family, the amount of a verdict in every wrongful death action is conjectural.” Crider v. Columbus Plastic Products, Inc., 90 Ohio Law Abst. 605, 606, 190 N.E.2d 63, 64 (1956). See also Immel v. Richards, 154 Ohio St. 52, 93 N.E.2d 474 (1950); Karr v. Sixt, 146 Ohio St. 527, 67 N.E.2d 331 (1946).

The district court in denying the defendant’s motion for a new trial stated: “The arithmetic was there to support the argument that the verdict should be substantial.” We agree. The evidence of the life expectancy of the deceased and her spouse, of the deceased’s character, talents and health, and the testimony of plaintiff’s expert witness as to the range of values of services performed by the deceased for her husband and children, constituted in total effect ample support for the jury’s verdict. The jury, of course, was not bound by the average figure for the services performed by the deceased as the defendant contends. Further, upon a reading of the entire record there is nothing from which to infer that the verdict was the result of passion or prejudice. We conclude that the district court did not abuse its discretion in denying the defendant’s motion for a new trial.

The defendant also claims that the district court erred in failing to permit the defendant on cross examination to interrogate the plaintiff’s nonexpert witnesses as to the amount of pecuniary loss each suffered due to the decedent’s death. Under Rule 43 of the Federal Rules of Civil Procedure, a federal court is to apply the evidentiary rule, whether it is a state or federal one, which favors reception of the evidence. The Ohio rule was stated in Cincinnati Traction Co. v. Stephens, 75 Ohio St. 171, 79 N.E. 235 (1906):

Upon the trial of such [wrongful death] action it is error to permit the plaintiff, the parent of the deceased, to give his opinion as to the value of his child’s services to him and his family at the time of her death and thereafter, that being for the determination of the jury upon the facts given in evidence.

This principle would be equally applicable to the husband and children of the deceased on cross examination in the present case. Thus under the Ohio rule the district court was correct in its ruling on this issue.

No case establishing a federal rule on this exact point has been found. We believe that the Ohio principle is the correct one to be applied here. In any case, the district judge has wide discretion concerning evidentiary matters and in the present case the disallowance of the defendant’s question, in our view, was not prejudicial to the extent that reversal is required. See, e. g., Independent Nail and Packing Co. v. Mitchell, 343 F.2d 819 (1st Cir. 1965).

Affirmed.

      . We observe, however, that several states have permitted such questions., See VII Wigmore on Evidence, § 1944 (3rd ed. 1940).


author: WEICK, Circuit Judge.

text:
    Alfred W. MINISH and Margaret F. Minish, Plaintiffs-Appellants, v. J. Lassing HUEY et al., Defendants-Appellees.
    No. 72-1937.
    United States Court of Appeals, Sixth Circuit.
    Argued Feb. 5, 1973.
    Decided July 31, 1973.

      John G. Wright, Warsaw, Ky., for plaintiffs-appellants.
    Moss Noble, Asst. U. S. Atty., for defendants-appellees; Eugene E. Siler, Jr., U. S. Atty., on brief.
    Before WEICK, McCREE and KENT, Circuit Judges.

       The Honorable W. Wallace Kent died on May 28, 1973, subsequent to the oral argument of this appeal, and did not participate in the decision.

      . Since September, 1964, the regulations have actually provided for a division based upon a history-contribution method, that is, a method where the allotment to divided parcels is determined by the amount of tobacco that was grown on each parcel when they were combined. Tims, in 1968 when the Boulton tract was convoyed back to Mrs. Boulton, the cropland method was entirely inapplicable.

   WEICK, Circuit Judge.

Plaintiffs instituted action in the District Court under 7 U.S.C. § 1366 (1964) to review the determination made by the Market Quota Review Committee for Carroll County, Kentucky, that the plaintiffs’ tobacco acreage allotment derived from three separate farms should be reduced in the year 1970 and retroactively to the year 1964, inclusive. The District Court affirmed without opinion the decision of the Review Committee on both the facts and the law, and the plaintiffs appealed to this Court.

We affirm in part, reverse in part, and remand for further proceedings.

This case arose under the Agricultural Adjustment Act, Subparts B and C, Tobacco Marketing Quotas and Administrative Provisions. 7 U.S.C. §§ 1311 to 1315, 7 U.S.C. § 1361 et seq. (1964). It resulted from the attempts by Mr. and Mrs. Minish to increase their initial tobacco acreage allotment for their 117-acre Kentucky farm.

In 1938 Congress enacted legislation designed to restrict artificially the supply of tobacco on the nationwide market in order to prevent “the result that abnormally excessive supplies [of tobacco] are produced and dumped indiscriminately on the Nation-wide market.” 7 U. S.C. § 1311 (1964). The Secretary of Agriculture was empowered to assign tobacco acreage allotments to qualifying farms, i. e., qualifying farms were permitted to use a specified amount of their land to grow tobacco. The Act further provides:

“Transfer of farm marketing quotas. (d) Farm marketing quotas may be transferred only in such manner and subject to such conditions as the Secretary [of Agriculture] may prescribe by regulations.” 7 U.S.C. § 1313(d) (1964).

In 7 C.F.R. §§ 719.3 and 719.4, the Secretary has established inferentially two requirements relevant to the transfer of marketing quotas from one person to another: First, the transferee must become the owner of the land to which the allotment initially attached; and Second, the transferee must operate the total amount of owned land on which there is an allotment, as a single farming unit. In other words, a tobacco allotment cannot itself be sold by one farmer to another. There must also be a transfer of “ownership” of the land, and the combined farm must be operated as a unit. These determinations are made by a County Committee of local farmers.. 7 C.F.R. § 719.2(2).

If a County Committee determines at any time that there has been an improper acreage allotment given to a farmer, it may “reconstitute” the allotment; it may increase, decrease, or reassign allotments, as the ease may require. Such a reconstitution is effective only for the year in which that action was taken. 7 C.F.R. § 719.7(b)(1) provides:

“Allotment crops. The reconstitution shall be effective for an allotment crop for the current program year if such reconstitution is completed before such crop is planted . . . .”

However, there is an important exception to this section. 7 C.F.R. § 719.-7(b)(5) provides:

“Misrepres entation. N otwithstand-ing any other provision of this section, if the county committee determines that the farm was [initially] reconstituted because of a misrepresentation by a producer, the farm shall be properly reconstituted, and the effective date of such reconstitution for all purposes^ shall be retroactive to the date the farm was improperly reconstituted.”

The effective date of 7 C.F.R. § 719.-7(b) (5) was October 20, 1967.

Mr. and Mrs. Minish have for some time owned a 117-acre farm located along the Kenthcky River, in Carroll County, Kentucky. Early in 1964, the farm, which was identified in accordance with 7 C.F.R. § 719.2(k) by the serial number C-306, had an allotment or quota for growing Burley tobacco of 4.-21 acres. During that year the Minish-es commenced a series of three transactions designed to increase the amount of tobacco that they could grow.

On March 16, 1964 the Minishes entered into an arrangement with a Mrs. Bess Boulton, owner of a small farm which had a tobacco allotment of .61 acres, whereby Mrs. Boulton conveyed the title to the farm to the Minishes by deed. The deed recited that the consideration therefor was one dollar and other (unspecified) good and valuable consideration. The deed was duly recorded on March 17, 1964. Also on March 16, 1964, the Minishes leased back to Mrs. Boulton (for an undisclosed consideration) the entire farm for all purposes except agricultural (which farm had on the same day been deeded to the Minish-es).

The lease to Mrs. Boulton contained an option to repurchase the land at the expiration of the term of the lease, in six years. On the same day, March 16, 1964, Mrs. Boulton exercised her option to repurchase her farm by payment to the Minishes of one dollar and delivery to them of a copy of the local newspaper, as specified in the option.. The repurchase was to be effective at the expiration of the lease. The lease was notarized on March 16, 1964, and was duly recorded on March 17, 1964.

Having obtained the deed to the Boul-ton tract, Mr. Minish applied to the County Committee to have his original farm reconstituted on March 26, 1964. Action was taken by the County Committee and the Boulton farm (G-808) was combined with the Minish farm (C-306) for purposes of tobacco allotment. This combination increased the Minish allotment to a total of 4.82 acres (4.21 + .61 = 4.82 acres) for the year 1964.

On November 30, 1964, Mr. and Mrs. Minish entered into a similar arrangement with Edward and Clara Westrick, the owners of a 102-acre farm with a Burley tobacco allotment of 1.23 acres. A deed conveying the Westrick property was transferred to the Minishes for one dollar and other (unspecified) good and valuable consideration. The Minishes then executed to the Westrieks a lease for all purposes except agricultural, for a term of six years, with an option in the Westrieks to repurchase the tract at the end of the term, provided they give proper notice and provided they pay one dollar and deliver to Minishes a copy of the local newspaper. The Minishes immediately, i. e., on November 30, 1964, gave to the Westrieks a written waiver of the notice-provisions in the lease. The deed and the lease agreement were duly recorded.

Again, the Minishes went to the County Committee to have the farm reconstituted for purposes of their tobacco allotment. Action was taken by the Committee and the tobacco allotment to the Minishes was increased by 1.23 acres.

In 1966 the Minishes entered into a different type of arrangement to increase their tobacco acreage allotment. They leased from one, Othur Stewart, a small 2-acre farm which had a tobacco allotment of .47 acre. The Minishes did not record this lease, but they did exhibit it to the County Committee in requesting that the .47 acre allotment be reconstituted to their farm. The County Committee reconstituted the Minish farm with the .47 acre from Othur Stewart, in 1966 and thereafter, as the lease was renewed by the parties.

Thus, between 1964 and 1966 the Min-ishes increased substantially their Bur-ley tobacco allotment by means of these three transactions.

On August 12, 1968, pursuant to the option to purchase in the lease-back agreement, the Minishes conveyed farm G-808 back to Mrs. Boulton. Because they had grown no crops on the G-808 tract under the 1964 agreement, all of the tobacco having been grown on the original Minish tract (C-306), the Min-ishes persuaded the County Committee to reconstitute the tobacco allotment to the combined C-306 and G-808 farm solely to the “parent farm” (C-306, the Minish farm). The plaintiffs explain in their brief to this Court the basis for such action:

“The regulation now provides for a division of the tobacco base upon a history/contribution method. Yet, prior to that date the regulation provided for a division of the tobacco base on a cropland basis, and further that the identity as cropland was lost if a row-crop was not produced on the land within the five years immediately preceding the reconstitution. Hence, if a parcel with a base was obtained, by legal title, and then combined with another owned tract, and the acquired tract was not applied to row-crops for five crop-years, it lost its identity as cropland, and then legal title could be divested without the required division of the tobacco base, as combined.”

On May 23, 1969 the Carroll County Committee, in obedience to the written instructions of the State Executive Director of the State Agricultural Stabilization and Conservation Committee, reconstituted farm C-306 and divided the allotments as follows: farm C-306, A. W. Minish, owner and operator; farm G-808, Bess Boulton, owner and operator; and farm A-77, Othur Stewart, owner and operator.

After additional proceedings not relevant here, the County Committee informed the plaintiffs that not only was their allotment for 1970 reduced, but also that they had overproduced tobacco for the years 1964 to 1970. The Committee informed the plaintiffs that they were being assessed penalties for all overproduction.

The plaintiffs appealed this determination to the Review Committee. The Review Committee, after a hearing at which testimony and documentary evidence were presented, upheld the assessment by the County Committee of retroactive penalties. In so doing, the Review Committee specifically found the following:

1. “When the Carroll County ASC Committee approved Mr. Minish’s application, they acted solely on Mr. Minish’s statement that he had purchased Mrs. Boulton’s farm. They did not know that he had leased that farm to Mrs. Boulton or that she had option to repurchase it, or that he had received further consideration to exercise that option or that he had waived notice of its exercise.”
2. “When the Carroll ASC County Committee approved Mr. Minish’s application, they acted solely on his oral and written statement on his application that he had purchased the Wes-trick farm. The Committee was ignorant of the lease of that farm from Mr. and Mrs. Minish to Mr. and Mrs. Westrick.”
3. “The transactions between Mr. and Mrs. Minish with Mrs. Boulton and Mr. and Mrs. Edward Westrick, Jr., with respect to farms G-808 and A-77, had the legal effect of transferring the Burley tobacco acreage allotment for those farms to farm C-306, A. W. Minish, owner and operator, without transferring ownership of farms G-808 and A-77 to Mr. and Mrs. Minish.”
4. “Farms G-808, A-77 and C-914 were never operated as a single farming unit by Alfred W. Minish. The farm labor and machinery are not readily interchangeable during the period when normal farming operations are in progress. The crop pattern and land uses do not reflect a single farming unit.”

There are three significant issues presented in this appeal: First, were the plaintiffs the “owners” of the Boul-ton and Westrick farms within the meaning of the Act? Second, if the plaintiffs were not the owners of the Boulton and Westrick farms, did the plaintiffs misrepresent their legal status to the County Committee, which misrepresentation would justify the assessment of retroactive penalties for improper allotments on these two farms? Third, did the plaintiffs misrepresent either their legal status relative to the Stewart farm or the fact that they did not operate it as “a single farming unit” with the original (C-306) farm, which misrepresentation would justify the Committee’s assessment of retroactive penalties for overproduction of allotment on the Stewart farm?

OWNERSHIP OF THE BOULTON AND WESTRICK FARMS

As heretofore noted, ownership is an element used in the determination of tobacco allotments to any farmer. 7 C.F. R. §§ 719.3 and 719.4. The regulation defines “owner” as follows:

“Owner. Person who has legal ownership of farmland.” (7 C.F.R. § 719.2(p)).

It could be argued that the proper interpretation of the definition of owner is legal as opposed to equitable ownership; that under the expansive doctrine of legal ownership in Kentucky, the plaintiffs, by virtue of simple deeds to the Boulton and Westrick farms, were the “legal” owners of those farms; see Marinaro v. Deskins, 344 S.W.2d 817, 819 (Ky.1961); Chalk v. Chalk, 291 Ky. 702, 165 S.W.2d 534 (1942); Scroggins v. Nave, 133 Ky. 793, 119 S.W. 158, 159 (1909). Accordingly, it could be contended that in this case the plaintiffs technically come within the terms of the regulations because of their artful paperwork, and that the courts are constrained to give them the benefits which they sought.

The web of paperwork that the plaintiffs have spun for the courts is intricate; however, the escape is simple. The plaintiffs’ actions fall within the well-established doctrine that the courts may disregard sham legal contrivances.

In Particelli v. Commissioner of Internal Revenue, 212 F.2d 498, 500 (9th Cir. 1954), the Court stated:

“It is recognized that a taxpayer is free to employ any legal means in the conduct of his business affairs to avoid or minimize taxes, but the means employed must not be mere subterfuge or sham. Commissioner of Internal Revenue v. Tower, 1946, 327 U.S. 280, 66 S.Ct. 532. 90 L.Ed. 670; Nordling v. Commissioner of Internal Revenue, 9 Cir., 1948, 166 F.2d 703, certiorari denied 335 U.S. 817, 69 S.Ct. 38, 93 L.Ed. 372.”

Accord, Redwing Carriers, Inc. v. Tomlinson, 399 F.2d 652 (5th Cir. 1968).

The “sham” doctrine is applied also to corporations which attempt to achieve certain benefits by artful paper contrivances relative to themselves, their subsidiaries, or other corporations. See e. g., Thoni Trucking Co. v. Foster, 243 F.2d 570 (6th Cir. 1957); Cooper v. Vitraco, 320 F.Supp. 239 (D.Virgin Islands, 1970). The doctrine has been applied even to marriages by aliens attempting to enter the United States as nonquota immigrants. Rocha v. United States, 288 F.2d 545 (9th Cir. 1961).

We have no difficulty in applying the sham doctrine to the present case. Plaintiffs had deeds showing “ownership” of the Boulton and Westrick farms. Yet, with the lease-back agreements, the options to repurchase which were immediately exercised, and the notices of repurchase which were immediately waived, the plaintiffs’ ownership amounted to nothing more than the intended transfer of tobacco allotments. The substance of the transactions was sham ownership, which is no ownership at all. Furthermore, the Minishes never carried on any farming operations on the Boulton, Westrick or Stewart farms. They just used the allotments for these farms, growing the tobacco on their own farm.

MISREPRESENTATION: BOULTON AND WESTRICK FARMS

Because the plaintiffs were assessed excess quota penalties retroactively to 1964, it is necessary to determine whether substantial evidence on the record supports the implicit determination that plaintiffs misrepresented the nature of the Minish-Boulton and Minish-Westrick transactions in applying for reconstitution of the tobacco allotments. Jones v. Hughes, 400 F.2d 585, 590 (8th Cir. 1968).

Initially, it should be noted that in order to find misrepresentation, it is not necessary that an affirmative falsehood be shown. Misrepresentation in-eludes the intentional omission of a material fact.

In Dennis v. Thomson, 240 Ky. 727, 739, 43 S.W.2d 18, 23 (1931), the Court stated:

“A false impression may consist in a concealment of what is true as well as an assertion of what is false. Faris v. Lewis, 2 B.Mon. 375; Singleton’s Adm’r v. Kennedy & Co., 9 B.Mon. 222; Crescent Grocery Co. v. Vick, supra [194 Ky. 727, 240 S.W. 388]; Weikel v. Sterns, 142 Ky. 513, 134 S.W. 908, 34 L.R.A.(N.S.) 1035; Eversole v. Chandler, 217 Ky. 148, 289 S.W. 215. The suppression of truth is as vicious and disasterous as a false representation. The motive is the same in either case, and the result should be the same, since it is the intention that constitutes the fraud. Ruffner v. Ridley, 81 Ky. 165; Hays v. Meyers, 139 Ky. [440], 444, 107 S.W. 287, 32 Ky.Law Rep. 832, 17 L.R.A.(N.S.) 284, 139 Am.St.Rep. 493; Taylor v. Bradshaw, 6 T.B.Mon. 145, 17 Am.Dec. 132.”

In Strong v. Repide, 213 U.S. 419, 430, 29 S.Ct. 521, 524, 53 L.Ed. 853 (1909), the Court described this common law principle as follows:

“Thus, the deceit which avoids the contract need not be by means of misrepresentations in words. It exists where the party who obtains the consent does so by means of concealing or omitting to state material facts yy

See generally, 37 Am.Jur.2d 196, Fraud and Deceit, Sec. 144.

The Review Committee specifically found that Mr. Minish represented to the County Committee that he was the owner of the Boulton and Westriek farms, omitting to inform them of the underlying lease-back agreements, options to repurchase, etc. This omission was certainly material.

The only attack that the plaintiffs make upon this finding is an assertion that Mr. Minish “talked with” a Mrs. Millie Bond in the office of the County Committee, about the whole transaction, prior to the execution of the various documents. This assertion hardly warrants reversing the findings of the Review Committee.

First, Mrs. Millie Bond was not a member of the County Committee, nor was she authorized to bind it or waive its requirements. She was a “Program Assistant” in the County office. Second, the plaintiffs admit in their brief that Mrs. Bond testified that she did not remember talking with Mr. Minish about these particular transactions. The County Committee could make a credibility determination. Third, the actual members of the County Committee testified that they were unaware of the underlying transactions with Mrs. Boul-ton and the Westricks at the time of the reconstitutions.

Accordingly, the finding that the plaintiffs misrepresented facts to the County Committee, which misrepresentation justified the Committee’s imposition of retroactive reconstitution of the plaintiffs’ farm, is supported by substantial evidence, and we are required to uphold it.

However, the plaintiffs strenuously urge that even if they did misrepresent to the County Committee the nature of their “ownership” of the Boulton and Westriek farms, excess quota penalty assessments cannot be made retroactive prior to October 20, 1967, which was the effective date of the provision empowering retroactive reconstitutions. 7 C.F.R. § 719.7(b)(5). This argument is not persuasive.

Misrepresentation or fraud voids a transaction ab initio. Cf., Restatement, Contracts, § 475 (1932). No statutory authorization is required in order to retake that to which one was never entitled in the absence of the misrepresented fact. See Boesche v. Udall, 373 U.S. 472, 83 S.Ct. 1373, 10 L.Ed.2d 491 (1963), holding that the Secretary of the Interior could retroactively cancel oil leases for fraud, without specific statutory authorization.

In Neblett v. Macfarland, 92 U.S. 101, 103, 23 L.Ed. 471 (1875), the Court, in discussing the principle as it relates to the rescission of contracts, stated:

“The court proceeds on the principle, that, as the transaction ought never to have taken place, the parties are to be placed as far as possible in the situation in which they would have stood if there had never been any such transaction.” (Quoted in Pan American Petroleum & Transp. Co. v. United States, 273 U.S. 456, 505, 47 S.Ct. 416, 424, 71 L.Ed. 734 (1927)).

We hold that it was permissible to reconstitute the plaintiffs’ farm retroactively to 1964 because of the misrepresentation of Mr. Minish relative to the Boulton and Westrick transactions.

MISREPRESENTATION: THE STEWART FARM

The County Committee not only imposed retroactive penalties for overproduction relative to the Boulton and Westrick tracts, but it also imposed such penalties for overproduction relative to the Stewart tract. We vacate and set aside this latter assessment. We can find no basis in the record for a determination that Mr. Minish misrepresented either the nature of the legal transaction or the nature of the farming operation with respect to the Stewart tract.

The Review Committee did not find that Mr. Minish misrepresented the nature of the legal arrangement that he had with Mr. Stewart, which was a simple leasehold. To the contrary, the Committee stated in its findings that Mr. Minish presented the lease from Mr. Stewart when he requested reconstitution for that tract.

The Review Committee did find that Mr. Minish failed to operate the different farms “as a single farming unit” as required by 7 C.F.R. § 719.3(d)(5). There is absolutely no evidence in the record, however, indicating that the County Committee was unaware of the manner in which Mr. Minish was operating the farms. Furthermore, since the County Committee was composed of local farmers (7 C.F.R. § 719.2(2)), at least one of whom lived near Mr. Minish, it is more than likely that the Committee members were at all times aware that “[t]he farm labor and machinery are not readily interchangeable during the period when normal farming operations are in progress,” and that “[t]he crop pattern and land uses do not reflect a single farming unit,” as found by the Review Committee.

Finally, the regulations impose a specific duty on the County Committee to “satisfy itself that the operator will be in general control of the farming operations on the farm in the program year.” 7 C.F.R. § 719.4(e).

In sum, we find no support in the record for the retroactive assessment of penalties with respect to the Stewart farm because there was no misrepresentation by the plaintiffs of either their legal or functional relationship with that farm.

We therefore affirm the judgment of the District Court insofar as it relates to the Boulton and Westrick farms, and we reverse with respect to the Stewart farm, and remand to the District Court for a recomputation of the penalties by excluding therefrom any penalty assessed with respect to the Stewart farm.

      . The plaintiffs allege as error the participation of the State Executive Director in the County proceedings. They argue that he unfairly influenced the decision-making process at the lower level. However, in light of the fact that participation of the State Committee is specifically authorized under 7 C.F.R. § 719.13, and in recognition of its greater expertise, (the County and Review Committees are composed of locally elected farmers), we cannot accept this participation as error.

      . The Review Committee did not, in its findings of fact or conclusions of law, explicitly use the word “misrepresentation”; however, the finding of misrepresentation is implicit in the ultimate determination that excess quota penalties were to be assessed retroactively.
      Moreover, in a letter dated April 24, 1970, directed to Mr. Minish, the County Committee stated that the penalties were being assessed retroactively because of a “misrepresentation” to that Committee,

      . It is interesting to note that these “findings of fact” by the Review Committee merely parrot the language of 7 C.F.R. § 719.4(c), which defines a single farming unit as tracts of land where “ (1) The farm labor and machinery are or could be freely interchanged during the period when normal farming operations are in progress; (2) the cropping pattern or land uses will be such as to reflect a single farming unit . . . .”


author: CLARK, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Nolan Ray WILLIAMSON, Defendant-Appellant.
    No. 72-3633
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    July 13, 1973.

      Edward T. .M. Garland, Atlanta, Ga., for defendant-appellant.
    John W. Stokes, Jr., Atlanta, Ga., for plaintiff-appellee.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409.

   CLARK, Circuit Judge:

Nolan Ray Williamson was convicted of unlawful distribution of amphetamine capsules in violation of 21 U.S.C. § 841(a) and § 812, and of forcibly assaulting, resisting, impeding, intimidating or interfering with officers of the Bureau of Narcotics and Dangerous Drugs in violation of 18 U.S.C. § 111. We affirm the convictions on both counts.

Several days prior to the transaction from which the present charges arose, Agent Shumard of the Bureau of Narcotics and Dangerous Drugs contacted John Henry Glover, who, the agent had learned from a confidential source, was engaged in illicit distribution of amphetamines. After extended negotiations, Glover agreed to deliver 20,000 capsules in Atlanta to persons designated by Shu-mard. The time for delivery was delayed to accommodate Glover’s source. On the evening set for the transfer, Glover checked into a motel in northeast Atlanta, where his room was placed under surveillance by a detail of federal and state narcotics agents under the direction of a federal agent. Several hours later Williamson arrived at the motel, carried a suitcase and a cardboard box into Glover’s room and returned to his car in the motel parking lot where he sat with the motor running. Shortly thereafter Glover informed his contact that he was ready to make the transfer.

Two federal undercover agents went to Glover’s room, where Glover delivered 500 bottles of amphetamine capsules to them. The agents then placed Glover under arrest, and notified agents outside of this action by radio transmitter. On the receipt of this signal, the surveillance detail moved to surround Williamson’s automobile. Officer Davis, a state narcotics agent, displayed his identification and stated, “State officer, you’re under arrest.” Williamson then attempted to drive off. In the process, he struck Davis with his automobile and narrowly missed a ear containing two other agents. Williamson’s escape was blocked by another officer’s automobile and he was taken into custody.

On appeal Williamson asserts the following grounds for reversal of his conviction: (1) denial of his motion for severance of trial on the two counts of the indictment; (2) failure of proof of a violation of 18 U.S.C. § 111, and ineon-sistency of the verdicts on the two alleged violations of § 111; (3) admission of prejudicial testimony and tangible evidence; (4) failure to give an entrapment instruction; and (5) the overall unfairness of the trial proceedings.

(1) Severance. Since the two offenses charged arose from a single transaction, there was clearly no misjoinder under F.R.Crim.P. 8(a). Appellant contends, however, that the joinder of offenses resulted in sufficient prejudice to require severance under F. R.Crim.P. 14. First, he suggests that joinder increased the possibility of conviction by allowing evidence on each charge to bolster that on the other. There is a recognized danger that in any prosecution involving more than one offense the jury may cumulate evidence which is unpersuasive on each of the various counts if considered separately to find guilt in sum. See, e. g., Drew v. United States, 118 U.S.App.D.C. 11, 331 F.2d 85, 88-89 (1964); United States v. Lotsch, 102 F.2d 35, 36 (2d Cir.), cert. denied 307 U.S. 622, 59 S.Ct. 793, 83 L.Ed. 1500 (1939). However, in the present case separate trials would not have resulted in segregation of the evidence as to each offense. In a trial solely on the drug charge, the attempted exit from the parking lot and the resulting assault on the agent would have been admissible as evidence of flight. On the other hand, in a trial on the assault charge, the evidence of the drug transaction would have been admissible to prove motive and to prove that the officers were engaged in the performance of their official duties. Therefore, insofar as segregation of evidence is concerned, the failure to sever resulted in no prejudice to the Appellant. See, e. g., Robinson v. United States, 148 U.S.App.D.C. 58, 459 F.2d 847, 854-860 (1972). Furthermore, the Court gave clear instructions that the evidence on each count was to be considered separately in determining guilt. See United States v. Hatcher, 423 F.2d 1086, 1089-1090 (5th Cir., 1970). Thus Appellant’s argument for severance based on possible cumulation of evidence is without merit.

Williamson also contends that denial of severance complicated his defense strategy, since joinder made it impossible for him to testify in his own behalf on the assault charge without being subject to cross-examination about his participation in the drug transaction. In a leading case, Cross v. United States, 118 U.S.App.D.C. 324, 335 F.2d 987 (1964), the District of Columbia Circuit held that severance under Rule 14 was required where the accused wished to testify in his own defense on only one of two joined offenses which were clearly distinct in time, place, and evidence. Cross does not hold that severance is mandatory in any case where the defendant indicates he wishes to testify on some charges and to remain silent on others. Severance for this reason, as for any other, remains in the sound discretion of the trial court and no abuse of discretion may be found to exist unless the defendant can convincingly demonstrate that a genuine prejudice to his trial strategy outweighed considerations of judicial economy in proceeding with a single trial. Baker v. United States, 131 U.S.App.D.C. 7, 401 F.2d 958, 976-978 (1968).

At trial, Williamson elected to take the stand to explain that his decision to drive away from the scene arose from a fear that he was being robbed by what he believed to be a band of shabbily dressed hippies. Under cross-examination, he vigorously and consistently denied involvement or knowledge of the drug transaction. While the guilty verdict indicates the jury did not believe Williamson’s denial, there is no support in the record for his contention that his conviction on the drug charge was made more likely by the fact he took the stand to explain his actions which led to the assault on the officer. In the absence of any evidence of substantial prejudice, we find no error, much less any abuse of discretion, in the denial of severance of trial on the two counts.

(2) Conviction for violation of 18 U.S.C. % 111. It is undisputed that during his attempted flight Williamson struck state narcotics officer Davis with his automobile knocking Davis to the pavement. Since Davis was acting in cooperation with and under control of federal officers, in effecting an arrest for violation of the federal drug laws, assault against him was within the coverage of § 111. United States v. Heliczer, 373 F.2d 241, 249 (2nd Cir.), cert. denied 388 U.S. 917, 87 S.Ct. 2133, 18 L.Ed.2d 1359 (1967); United States v. Chunn, 347 F.2d 717, 721 (4th Cir. 1965). Williamson contends his conduct did not constitute a violation of § 111 since he had no actual knowledge of the federally protected status of the arresting officers. He points out that the strongest proof that he knew the person struck was an official was Agent Davis’ testimony that he identified himself as a “state officer” when he first approached Williamson’s automobile. Thus Williamson reasons that the jury had to find that he was initially unaware that Davis was acting in concert with federal authorities. However, as a series of recent decisions of this court have made clear, provided that the evidence is sufficient to establish the defendant’s unlawful intention to resist or impede law enforcement officials, knowledge of the official federal capacity of the person assaulted is unnecessary for conviction under § 111. United States v. Marcello, 423 F.2d 993, 1010 (5th Cir.), cert. denied, 398 U.S. 959, 90 S.Ct. 2172, 26 L.Ed.2d 543 (1970); United States v. Davis, 423 F.2d 974, 975, n. 1 (5th Cir.), cert. denied 400 U.S. 836, 91 S.Ct. 74, 27 L.Ed.2d 69 (1970); Burke v. United States, 400 F.2d 866 (5th Cir. 1968), cert. denied 395 U.S. 919, 89 S.Ct. 1771, 23 L.Ed.2d 237 (1969); Pipes v. United States, 399 F.2d 471 (5th Cir. 1968), cert. denied 394 U.S. 934, 89 S.Ct. 1207, 22 L.Ed.2d 464 (1969); Bennett v. United States, 285 F.2d 567, 570-571 (5th Cir. 1960), cert. denied 366 U.S. 911, 81 S.Ct. 1087, 6 L.Ed.2d 236 (1961).

Williamson additionally argues that the jury’s verdict of acquittal on the charge of assault with a deadly or dangerous weapon, 18 U.S.C. § 111 ¶ ii, precluded a conviction on the lesser included offense of assault, 18 U.S.C. § 111 ¶ i, since the acquittal on the former charge necessarily indicated that the jury had found his conduct justified. Cf. Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970). The indictment charged Williamson with assaulting federal officers both with an automobile and with a .41 magnum revolver. The jury was instructed that the revolver was as a matter of law a dangerous weapon and that the automobile may or may not have been a dangerous weapon depending upon the circumstances. The acquittal on the dangerous weapon charge and conviction on the lesser offense indicates that the jury found that Williamson did not commit an assault with the revolver and that, while he did assault an officer with his automobile, the vehicle was not at the time a dangerous weapon. Thus there was no inconsistency between the verdicts and no application of collateral es-toppel is required.

(3) Alleged testimonial and evidentiary errors. The government’s lead witness, Agent Shumard, testified to the content of a series of telephone conversations between himself and John Henry Glover during which the transfer of amphetamine capsules was negotiated. Since there was substantial independent evidence that Williamson was involved in the transaction as Glover’s source, the incriminating statements made by Glover during these conversations were admissible under the exception to the hearsay rule which permits proof of statements made in furtherance of a joint criminal venture. See, e. g., Dutton v. Evans, 400 U.S. 74, 81, 91 S.Ct. 210, 215-216, 27 L.Ed.2d 213 (1970); Logan v. United States, 144 U.S. 263, 308-309, 12 S.Ct. 617, 632, 36 L.Ed. 429 (1892); 4 Wigmore on Evidence § 1079 n. 1 (1972). Williamson contends, however, that Shumard’s testimony should not have been admitted because Shumard was not able to unequivocally identify Glover as the person to whom he had spoken over the telephone. This contention is wholly without merit in light of the strong circumstantial evidence that the person with whom Shumard spoke was in fact John Henry Glover and the corroborating admission by Glover, who was called as a defense witness, that he had spoken to the federal agent.

In relating the content of one conversation with Glover, Shumard repeated Glover’s request that the delivery be delayed because his source had to drive, rather than fly, to Atlanta. Glover explained that his source was “wanted by the law” and, because of his extraordinary physique (he weighed 400 pounds), would be readily identifiable by law enforcement officials if he attempted to travel by commercial airline. Williamson promptly requested a mistrial, or in the alternative that the “fugitive” remark be stricken, on the ground that he had been unduly prejudiced in the eyes of the jury by the testimony. Although the introduction of testimony which indirectly suggests that the defendant has committed other crimes is strongly disfavored, see Odom v. United States, 377 F.2d 853, 859-60 (5th Cir. 1967); McMillian v. United States, 363 F.2d 165 (5th Cir. 1966), Shumard’s testimony in the present case does not constitute grounds for reversal. Glover’s remark was admissible as a hearsay statement of an alleged co-participant since it was part of a request for a delay in delivery time, a delay which would facilitate the joint criminal enterprise. Williamson contends despite the general admissibility of the conversations that it was not necessary to repeat the highly inflammatory reference to the source’s fugitive status. Placed in context, however, the reference serves an important and valid narrative purpose. Glover’s statement to Shumard contains two clues concerning his source which, when taken with other evidence, pointed directly to Williamson. First, Glover said that his source weighed 400 pounds, an accurate description of the appellant, and, second, Glover explained that because of his source’s readily identifiable size and fugitive status, the source would have to travel by private automobile rather than to fly. This second statement also identified Williamson who arrived at the scene of the transaction in his own out-of-state vehicle. The reference to his source as a fugitive which, connects the two clues, gives Shumard’s testimony narrative veracity which would have been completely lacking if Shumard had been limited to reciting, in isolation, Glover’s description of his source’s size and his mode of transportation. When the testimony suggesting other criminal acts by the defendant is introduced for some valid purpose other than to show a probability that the defendant committed the crime on trial because he is a man of criminal character, it is the function of the court to balance the prejudice to the defendant against the narrative or probative value of the other offense evidence. See McCormick, Law of Evidence, § 157 at 327-33. In the present case we find that the trial court did not err in denying Williamson’s motion for a mistrial or in failing to strike the testimony or give immediate cautionary instructions — a procedure which could have served to magnify the importance of the remark.

Williamson complains of testimony concerning a single Dexamyl tablet found on his person at the time of his arrest and of the attempt of the government to introduce into evidence a butcher knife found in his automobile. Upon defendant’s objection, the jury was instructed to disregard the testimony concerning the Dexamyl tablet, which was apparently unrelated to the commercial transfer of amphetamines. Despite this exclusion, defense counsel subsequently brought up the Dexamyl capsule on two occasions in order to show that Williamson lawfully possessed the drug for medical purposes. In light of the court’s immediate instructions to disregard the officer’s testimony concerning finding the tablet, any prejudice which may have been suffered by the defendant by casting him in the light of a drug user was as a result of his own election to persist in explaining the lawfulness of his possession.

When the prosecutor sought to introduce the knife into evidence, the court refused to permit this action and properly instructed the jury to disregard it. Subsequently when the defendant took the stand, he was cross-examined about the knife. Assuming this cross-examination was improper in light of the court’s previous ruling that the knife was irrelevant and thus inadmissible, the defendant personally waived his counsel’s objection to this line of cross-examination and insisted on explaining why the knife was in his automobile. While the prosecution acted improperly in mentioning the inadmissible knife again in the jury’s presence, this action in light of the defendant’s response was harmless error.

(4) Entrapment. Williamson asserts that the court should have instructed the jury on the defense of entrapment. Williamson did not request nor object to the court’s failure to give an entrapment charge. F.R.Crim.P. 30; see Costello v. United States, 252 F.2d 750, 751 (5th Cir. 1958). Furthermore, even if the issue had been preserved for appeal Williamson was clearly not entitled to such an instruction. His defense that he was innocent of any knowledge or involvement in the drug transfer is utterly inconsistent with the theory that he was entrapped into supplying the 20,000 capsules. It is the settled law of this Circuit that a defendant can not deny he has committed the offense and rely on the inconsistent defense of entrapment. United States v. Pickle, 424 F.2d 528 (5th Cir. 1970); McCarty v. United States, 379 F.2d 285 (5th Cir.), cert. denied 389 U.S. 929, 88 S.Ct. 291, 19 L.Ed.2d 281 (1967); Marko v. United States, 314 F.2d 595 (5th Cir. 1963).

(5) Conclusion. We have reviewed defendant’s asserted trial errors singly and en masse and found them to be without merit.

Affirmed.

      . John Henry Glover was also charged in Count 1 with violation of 21 U.S.C. § 841(a) and § 812. Glover pled guilty and was not jointly tried with AVilliamson.

      . See 1 Wright & Miller, Federal Practice and Procedure § 222 (1969); 8 Moore, Federal Practice ¶ 14.03.

      . See Bradley v. United States, 140 U.S.App.D.C. 7, 433 F.2d 1113, 1122-1124 (1969); Blunt v. United States, 131 U.S.App.D.C. 306, 404 F.2d 1283, 1288-1289, cert. denied 394 U.S. 909, 89 S.Ct. 1021, 21 L.Ed.2d 221 (1968) United States v. Weber, 437 F.2d 327, 334-335 (3rd Cir. 1970), cert. denied 402 U.S. 932, 91 S.Ct. 1524, 28 L.Ed.2d 867 (1971); United States v. Lee, 428 F.2d 917, 921 (6th Cir. 1970), cert. denied 404 U.S. 1017, 92 S.Ct. 679, 30 L.Ed.2d 665 (1972); Wangrow v. United States, 399 F.2d 106, 112 (8th Cir.), cert. denied 393 U.S. 933, 89 S.Ct. 292, 21 L.Ed.2d 270 (1968); United States ex rel. Tarallo v. LaVallee, 433 F.2d 4, 6 (2d Cir. 1970) (state prosecution) ; see also United States v. Hatcher, supra, 423 F.2d at 3090.

      . Unlike the situation in Cross, the prosecution did not exploit cross-examination to introduce for purposes of impeachment any prejudicial evidence concerning the defendant’s reputation or past criminal record.

      . Cf. United States v. Young, 464 F.2d 160, 163 (5th Cir. 1972).

      . The revolver was found on the seat of Williamson’s car when he was taken into custody. There was conflicting-testimony whether he had held the revolver in his hand and pointed it at the officers during his attempt to escape from the motel parking lot.

      . In light of the defendant's extraordinary weight, it is likely that a reasonable juror would have found his explanation that he had the Dexamyl as a prescription drug for weight control totally credible.