author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Thomas Edward HILL and Ike Landrum, Defendants-Appellants.
    No. 73-3733.
    United States Court of Appeals, Fifth Circuit.
    June 14, 1974.
    Rehearing and Rehearing En Banc Denied July 23, 1974.

      Fred L. Banks, Jr., Jackson, Miss., for defendants-appellants.
    Robert Hauberg, U. S. Atty., James B. Tucker, Asst. U. S. Atty., Jackson, Miss., for plaintiff-appellee.
    Before MOORE, AINSWORTH and RONEY, Circuit Judges.

       Hon. Leonard P. Moore, Senior Circuit Judge of the Second Circuit, sitting by designation.

   PER CURIAM:

Defendants Landrum and Hill were convicted after a jury trial on an eleven-count indictment charging the fraudulent obtaining of funds of an agency which received United States Government financial assistance, all in violation of 42 U.S.C. § 2703 and 18 U.S.C. § 2. Landrum was a job developer for the Mississippi Delta Council for Farm Workers Opportunities, Inc., an agency which received financial assistance under a grant from the U. S. Office of Economic Opportunity. The Mississippi Delta Council had a contract with Cata-phote Corporation of Flowood, Mississippi, to train 20 unskilled persons. Hill was an assistant personnel manager for Cataphote.

Several errors are assigned by appellants, none of which is meritorious. Hill supplied the list of trainees to Landrum who screened them for his agency. Half of the list of applicants consisted of names of persons who were either not qualified or never applied and attendance records were falsified on a padded list. Checks were then issued, delivered by Landrum to Hill, who endorsed them, cashed them and shared the proceeds with Landrum. Eleven checks involved in the fraudulent scheme of defendants formed the basis of the indictment. Each check constituted a separate count in the indictment. Appellant contends that since the checks were delivered and cashed on only two occasions, six checks on one occasion and five checks on another, only two transactions were involved and thus the Government erroneously charged a separate transaction for each of the eleven checks. However, as the Government points out in its brief, in the present case the separate character of each transaction is shown by the fact that there was a false application for each particular trainee followed by a false two-week attendance record for that trainee, the preparation of a check and a signature sheet entry, a forged or falsely obtained endorsement on the check and on the signature sheet, and a retention and conversion of the check. Though the eleven counts involved a number of trainees, each count recited a transaction having to do with a single trainee. The Government concludes — and we agree — that there are eleven separate transactions relating to eleven different instances of obtaining money by fraud. Thus, the obtaining of each check by the fraudulent means described constituted a separate and distinct violation and thus each check constituted a separate offense. See Bins v. United States, 5 Cir., 1964, 331 F.2d 390, 393; Wilburn v. United States, 5 Cir., 1964, 326 F.2d 903, 904; cf. United States v. Katz, 5 Cir., 1972, 455 F.2d 496, 498, cert. denied, 408 U.S. 923, 92 S.Ct. 2491, 33 L.Ed.2d 334 (1972).

Appellant Landrum asserts that there was insufficient evidence to convict him on counts 7-11 which involved the last five checks. There is no merit to this contention since the evidence is clear that the checks and signature lists involved in these counts were prepared and turned over to Landrum for delivery to the company represented by Hill. We are satisfied that Landrum’s fraud caused the checks to be issued; that Landrum delivered them and received a share of the illegal proceeds.

The final contention that Hill’s motion for a severance should have been granted is without merit, this being a matter within the sound discretion of the trial judge. Opper v. United States, 348 U.S. 84, 75 S.Ct. 158, 99 L.Ed. 101 (1954); Kroll v. United States, 5 Cir., 1970, 433 F.2d 1282, 1286-1287, cert. denied, 402 U.S. 944, 91 S.Ct. 1618, 29 L.Ed.2d 112 (1971); Tillman v. United States, 5 Cir., 1969, 406 F.2d 930, 935. No abuse of discretion by the District Court or prejudice to defendants is apparent on this record. See United States v. Martinez, 5 Cir., 1973, 486 F.2d 15; United States v. Nakaladski, 5 Cir., 1973, 481 F.2d 289.

Affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Edward H. STEMPEL and Mary Margaret Stempel, his wife, Plaintiffs-Appellants, v. CHRYSLER CORPORATION, Defendant-Appellee.
    No. 73-3506.
    United States Court of Appeals, Fifth Circuit.
    June 14, 1974.
    Rehearing Denied July 19, 1974.
    W. Dexter Douglass, Stanley Bruce Powell, Tallahassee, Fla., for plaintiffs-appellants.
    Gene D. Brown, Tallahassee, Fla., Charles Cook Howell, III, Jacksonville, Fla., for defendant-appellee.
    Before MOORE , AINSWORTH and RONEY, Circuit Judges.

       Hon. Leonard P. Moore, Senior Circuit Judge of the Second Circuit, sitting by designation.

   PER CURIAM:

This is a products liability case against an automobile manufacturer for damages for personal injuries sustained by Mrs. Stempel “when her face was smashed on a padded dashboard designed and manufactured by Chrysler Corporation,” as a result of being involved in a vehicular collision. The District Court directed a verdict against plaintiffs-appellants after ruling that the two expert witnesses appellants attempted to have testify in the case were not competent to do so.

The first of these plaintiff witnesses, Frank M. Flanigan, is a registered professional engineer, so-called accident reconstruction expert, and Professor Emeritus from the University of. Florida. Since 1954 he has investigated and reported on approximately 1,800 accidents involving vehicles. He had been a frequent expert witness in Florida state and federal courts. He was offered, as an expert, to give an opinion on automobile design and construction, especially as to the dashboard of the Chrysler automobile involved here.

The second expert witness, Dr. Charles Wilson, is a plastic surgeon and Mrs. Stempel’s treating physician. He testified on voir dire that he had treated several hundred persons injured by violent contact with automobile dashboards and had examined the dashboard here. His medical opinion was sought to the effect that the dashboard’s design contributed to the severity of Mrs. Stempel’s injuries.

The District Court held that neither of the expert witnesses had any practical experience in the actual design of dashboards and thus denied them the right to testify and offer their opinions before the jury. Thus the District Court decisively undercut plaintiff’s case insofar as expert testimony would be of value therein, and consequently a directed verdict against plaintiffs was inevitable. In our view the trial judge’s holding was too strict and unrealistic under the circumstances. See Roth v. Bird, 5 Cir., 1956, 239 F.2d 257. The ruling should have been that the experts’ lack of actual experience in this context should go to the weight of their testimony rather than to its admissibility. See Eastern Air Lines, Inc. v. American Cy-anamid Company, 5 Cir., 1963, 321 F.2d 683.

The District Judge, therefore, abused his discretion in denying plaintiffs the right to adduce the testimony of Professor Flanigan and Dr. Wilson as experts at the trial of this case. We, therefore, reverse and remand for a new trial with direction that the two expert witnesses be permitted to testify before the jury.

Reversed and remanded.


text:
    Albert C. HORA, Petitioner-Appellant, v. STATE OF LOUISIANA, Respondent-Appellee.
    No. 73-1708.
    United States Court of Appeals, Fifth Circuit.
    June 12, 1974.

      Overton C: Thierry, New Orleans, La. (Court-appointed), for petitioner-appellant.
    William J. Guste, Jr., Atty. Gen., Baton Rouge, La., LeRoy A. Hartley, Sp. Counsel, Russell J. Schonekas, New Orle-ans, La., for respondent-appellee.
    Before BROWN, Chief Judge, and WISDOM and MORGAN, Circuit Judges.
   PER CURIAM:

In 1968, Appellant pleaded guilty in state court to two charges of attempted aggravated rape — one pursuant to a 1963 indictment, the other pursuant to a 1968 information and received concurrent 20 year sentences. On the basis of a hearing before and a report from a federal magistrate, the District Court denied Appellant’s § 2254 habeas corpus petition attacking the pleas on the grounds of coercion and ineffective assistance of counsel.

Essentially, Appellant alleges that on the advice of counsel, he pleaded guilty to both charges of attempted aggravated rape virtually within minutes after both client and counsel first discovered the very existence of the 1963 indictment for the capital crime. These uncontradicted allegations of both Appellant and appointed counsel (at the time of the pleas) raise more than a col-orable claim of ineffective assistance of counsel. See, e. g., Herring v. Estelle, 5 Cir., 1974, 491 F.2d 125; Windom v. Cook, 5 Cir., 1970, 423 F.2d 721; Callo-way v. Powell, 5 Cir., 1968, 393 F.2d 886.

We believe that we ought not undertake to consider this issue absent the assurance that we have before us the full facts as they can best be developed. Since the present record leaves us in a state of confusion and uncertainty, we vacate and remand to the District Court for a further inquiry into the circumstances surrounding the 1963 indictment, the 1968 guilty plea and the events which transpired during the intervening period.

While the state court records show that an indictment for aggravated rape was returned against Appellant on July 24, 1963, Appellant contends that he was unaware of the existence of this indictment until the day he entered his pleas of guilty in 1968. In the hearing before the federal magistrate, Appellant testified that in 1963 he was arrested for aggravated rape and taken to the police station and held for 72 hours after which he was released and told that no charges were pending against him.

The state appears to contend that it was unable to locate Appellant between 1963 and 1968 and regarded him as a fugitive from justice. The state records indeed show that a 1963 notice of arraignment was returned unserved with the notation that Appellant no longer resided at the address listed.

Appellant testified, however, that although he did move, he left a forwarding address and continued to live in the city of New Orleans under his own name. In addition, he continued to work at the P & J Oyster Company during the entire period from 1963 to 1968. He further testified that he did not leave the city during this time. Appellant offered to present a witness who would testify that he had known Appellant to have worked at the P & J Oyster House from 1961 to 1968. The state stipulated that the witness would so testify.

Appellant’s assertion of ineffective assistance of counsel is bolstered by appointed counsel’s testimony that in the absence of any information in his files pertaining to the 1963 charge, he could only presume that he was unaware of that charge until the very day the pleas were entered. He admitted that he would necessarily have had no time to investigate that charge. Finally he speculated that in view of the 1968 charge he no doubt advised Appellant to plead guilty to the recently discovered 1963 charge as a matter of expedience.

As is unfortunately so frequently the case, the District Court did not have before it either a complete certified docket sheet of the state proceedings in issue nor a transcript of the colloquy preceding the acceptance of this pre-Boykin plea.

We remand to the District Court with directions to hold a hearing to inquire into the circumstances surrounding and to enter specific findings of facts and conclusions of law regarding the return of the 1963 indictment and the arrest and release of Appellant pursuant to it and all other matters pertaining to the 1963 charge. Particularly the District Court should require the state to come forward and prove what efforts if any the state made to arraign Appellant on the 1963 charge between 1963 and 1968 or what other actions there were from which the habeas court could infer what knowledge the accused had of the 1963 charge prior to and at the time he made the 1968 plea. The Court should require the parties to exhaust within reasonable limits a full inquiry into the whereabouts of Appellant during this time. This evidentiary exploration should cover all aspects of when following Appellant’s arrest in 1968 did the state first inform Appellant that the 1963 indictment was pending.

We do not mean, however, to in any way circumscribe the scope of the District Court’s inquiry. Rather it should further develop the record on all facts and circumstances which would bear on Appellant’s allegations that he was denied effective assistance of counsel and that his pleas of guilty were involuntary and coerced.

Vacated and remanded.

      . Appellant has exhausted his state collateral remedies to no avail. He also raises a challenge to the racial composition of the Grand Jury and a search and seizure claim. These issues would not be cognizable under a § 2254 petition in the wake of an intelligent and voluntary plea of guilty. See, e. g., Tollett v. Henderson, 1972, 411 U.S. 258, 93 S.Ct. 1602, 36 L.Ed.2d 235. We decline to pass on these issues pending the determination of the constitutional validity of the guilty plea.

      . Appellant further testified that counsel who was appointed to represent him following his arrest on the charge of aggravated rape in 1968 spent no more than five minutes conferring with him prior to the day the pleas were entered.

      . Boykin v. Alabama, 1969, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274.

      . The state record consists of little more than a disjointed collection of minute entries and handwritten notations.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. STATE OF TEXAS et al., Defendants. Eddie Mitchell TASBY et al,, Intervenors, v. Honorable Dee Brown WALKER, Judge, etc., et al., Defendants, Robert V. Gillespie et al., Defendants-Appellants.
    No. 73-2599.
    United States Court of Appeals, Fifth Circuit.
    June 10, 1974.

      See also D.C., 356 F.Supp. 469.
    John L. Hill, Atty. Gen., Melvin Cor-ley, Asst. Atty. Gen., Austin, Tex., John Rich, Dept, of Justice, Civ. Rights Div., Washington, D. C., Brian K. Landsberg, Chief Ed. Section, Civ. Rights Div., Dept, of Justice, Washington, D. C., for plaintiff-appellee.
    Michael Lowenberg, Woodrow M. Bo-nesio, Arlen D. Bynum, David C. Mús-slewhite, Dallas, Tex., for defendants-appellants.
    Edward B. Cloutman, III, Dallas, Tex., for other interested parties.
    Edward W. Dunbar, Walter L. Irvin, Dallas, Tex., for Tasby, and others.
    Walter Wolfram, Amarillo, Tex., for Potter County, Texas, NAAGP.
    Mario Obledo, San Francisco, Cal., Ed Idar, Jr., Jim Heidelberg, George Kor-bel, San Antonio, Tex., for GI Forum-LULAC.
    Before WISDOM, COLEMAN and SIMPSON, Circuit Judges.
   PER CURIAM:

Prior school desegregation decisions demonstrate the propriety of awarding counsel fees when the evidence reveals obstinate noncompliance with the law or the use of the judicial process for purposes of harassment or delay in affording rights clearly owed. See the cases cited by the Supreme Court in its recent decision in Bradley v. School Board of City of Richmond (1974), - U.S. -, 94 S.Ct. 2006, 40 L.Ed.2d 476.

This is separate, apart from, and in addition to the counsel fee remedy specifically provided by Congress in § 718 of Title VII of the Emergency School Aid Act, 20 U.S.C. § 1617, enacted June 23, 1972, the prime issue in Bradley.

The present appellants are private individuals, seeking reversal as to counsel fees awarded against them. In the face of a final federal court school desegregation decree, they went into state court and there obtained an ex parte state court injunction which was palpably at odds with the outstanding decree. The appellees successfully sought an injunction against enforcement of the state court decree, from which no appeal was taken, and, in so doing, were awarded counsel fees.

In the context of the prerequisite ob-stinancy, it makes no difference that the appellants are private individuals. School desegregation litigation is of a kind different from “mere private cases between individuals”, Bradley v. Richmond School Board, supra.

It is obvious from the appellate record that the appellants were warned of the existence of the federal school desegregation decree and there could have been no lingering doubt that the place to seek any desired modification was in that forum, not by state court injunction. In other words, the appellants, with notice, left the “plainly illuminated path”, which means that the finding of the District Court that they acted in obstinate noncompliance with the law cannot be said to have been clearly erroneous.

For the reasons hereinabove stated, and without reaching or intimating any opinion as to other grounds upon which the District Court rested its decision, its judgment awarding counsel fees is

Affirmed.


author: ALDISERT, Circuit Judge.

text:
    Robert L. GRUCA v. UNITED STATES STEEL CORPORATION, Appellant in No. 73-1083 and United Steelworkers of America and United Steelworkers of America, Local No. 4889 (Defendants on Cross-Claim).
    Nos. 73-1803, 73-1804.
    United States Court of Appeals, Third Circuit.
    Argued March 12, 1974,
    Decided April 17, 1974.

      David C. Toomey, Duane, Morris & Heckscher, Philadelphia, Pa., for appellant.
    Robert E. Kopp, Karen K. Siegel, U. S. Dept, of Justice, Appellate Section, Civil Division, Washington, D. C. and A. E. Lawson, Pittsburgh, Pa., Irving Jaffee, Acting Asst. Atty. Gen., Robert E. J. Curran, U. S. Atty., Philadelphia, ' Pa., for appellees.
    Before ALDISERT, GIBBONS and ROSENN, Circuit Judges.
   OPINION OF THE COURT

ALDISERT, Circuit Judge.

The question raised by this appeal is whether a veteran’s claim for legal and equitable relief under the Military Selective Service Act of 1967, 50 App. U.S.C. § 459, is barred by laches or the Pennsylvania six year statute of limitations because the veteran failed to commence his action until at least nine years had elapsed from the date his cause of action accrued. The district court viewed the claim as equitable in nature and held that the doctrine of laches governed plaintiff’s demands for adjustment in job seniority dates and back pay. It concluded that plaintiff’s claim was not barred by laches, granted plaintiff’s motion for summary judgment, awarded damages in the amount of $4,937.66 and ordered the defendant to amend plaintiff’s job service dates. The employer has appealed. We reverse.

I.

The material facts are not in dispute. The United States Steel Corporation employed Gruca as a general laborer in its Open Hearth Department at its Fairless Works beginning September 30, 1958. This became Gruca’s Department Date for seniority purposes. Plaintiff worked continuously in that position until he left on December 8, 1960, to enter the military service. He was honorably discharged from the United States Army on December 14, 1962, returned to Pennsylvania and was reemployed by U.S. Steel on January 18, 1963. He was assigned his previous job classification of general laborer, and retained his original Department Date of September 30, 1958.

From the position of general laborer a U.S. Steel employee has the choice of following several promotional ladders. One of these ladders is Seniority Unit No. 8 — Cranes. To reach the rung of craneman a general laborer must first obtain Crane Extra Board Status. This is achieved by receiving special training in crane operation and passing a test. Once an employee obtains Crane Extra Board status he is assigned a Crane Extra Board Date, which is essentially a seniority date. Therefore, employees on Crane Extra Board climb to the position of Stockyard Crane Operator, if they bid for the opening, on the basis of the earliest Crane Extra Board Date and if the physical fitness factor is relatively equal.

While Gruca was on active duty, U.S. Steel had, from time to time, advertised openings for crane operators. Four employees responded, each having Open Hearth Department Dates later than plaintiff’s. They completed their training, passed the test and were assigned to the Crane Extra Board. Therefore, because of plaintiff’s absence from his civilian occupation due to military obligations, employees junior to him had the chance to, and did, hold positions superi- or to him.

Shortly after his reemployment, plaintiff learned of his plight and took the matter up with his union grievance committeeman. Specifically, he asked “whether something could be done about the men moving ahead of . [him] to Crane Extra Board.” The union representatives knew that it was company policy that “a returning veteran did not have a statutory right to any promotion for which he might have been entitled to apply had he been employed at the time that the promotion became available.” Therefore, plaintiff was told that he “was only guaranteed that he would get his old job back.” Because plaintiff thought “it would be useless to try to grieve this matter” and “it would do no good” he neither submitted a grievance nor complained to management.

However, Gruca remained undaunted in his career aspirations. He later signed up for training in crane operation, passed his test and was assigned a Crane Extra Board date of March 28, 1963. But, because Gruca’s board date was later than the other four employees, he was not awarded the position of Stockyard Craneman until March 8, 1969.

Plaintiff did nothing to pursue his veteran’s rights until, in April, 1969, he again requested the union to process a grievance on his old claim. This request came approximately seven months after Judge Sorg’s decision in Foremsky v. United States Steel Corporation, 297 F.Supp. 1094 (W.D.Pa.1968), which held that a returning veteran is entitled to enjoy the seniority status which he would have acquired by virtue of continued employment but for his absence in the military service if, as a matter of foresight, it was reasonably certain that advancement would have occurred, and if, as a matter of hindsight, it did in fact occur. The union denied his grievance request and advised him to seek assistance from the United States Department of Labor, which he did on April 18, 1969. Finally, on August 15, 1972, more than nine years after his being rehired, and three years after he applied to the Department of Labor, plaintiff commenced this action.

Defendant does not deny that Gruca was wrongfully denied his seniority status upon his return from the military. In fact, the defendant has applied the Foremsky rationale on a prospective basis. But, because of “extraordinary” practical problems, U.S. Steel “felt that it would be impossible to grant retroactive promotions to veterans reemployed prior to the judgment in Foremsky, who, like the plaintiff in this case, had not presented their claims promptly after reemployment or pursued them effectively thereafter.” Thus, we are presented with the question of whether there is a legal barrier to applying the Foremsky doctrine in this case.

II.

Mr. Justice Frankfurter’s stark observation in Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S.Ct. 582, 584, 90 L.Ed. 743 (1946), is particularly applicable to veterans’ claims under Section 459 of the Military Selective Service Act:

If Congress explicitly puts a limit upon the time for enforcing a right which it created, there is an end of the matter. The Congressional statute of limitation is definitive. * * * The rub comes when Congress is silent. Apart from penal enactments, Congress has usually left the limitation of time for commencing actions under national legislation to judicial implications.

Since Congress was silent concerning the limitations period for bringing veterans’ claims under § 459, we are relegated to fashioning the appropriate remedial details. Thus, we take as our threshold inquiry whether Pennsylvania’s six year statute of limitations applies as a bar to Gruca’s claim seeking legal and equitable relief.

Gruca argues that the statute of limitations does not bar the demand for either legal or equitable relief. He contends that we have held that claims for relief under the Act are equitable in nature, Carmalt v. General Motors Acceptance Corporation, 302 F.2d 589 (3d Cir. 1962); that a state statute of limitations is inapplicable in an equitable action arising under a federal statute except where the state limitations statute applies to equitable remedies in like cases, Russell v. Todd, 309 U.S. 280, 60 S.Ct. 527, 84 L.Ed. 754 (1940); and that “even though the Pennsylvania statute applies in law and in equity”, the “like case” requirement is not met. For its part, U.S. Steel would have us apply the statute of limitations even though the plaintiff cumulatively sought legal and equitable relief. Defendant argues that this is an issue of first impression in this court; that it was not decided in Carmalt-, and that Russell v. Todd squarely controls. We reject the parties’ “all or nothing” approach and hold that the Pennsylvania statute of limitations applies to plaintiff’s claim insofar as it seeks legal relief, and that the doctrine of laches governs the demand for equitable relief.

A.

In Carmalt we held that a veteran’s claim for reinstatement and back pay was barred by plaintiff’s laches because “there were seventeen years between his alleged claim for reemployment and the beginning of his lawsuit.” 302 F.2d at 590. Although we recognized the well-established rule that the analogy to the statute of limitations was helpful in determining the issue of laches, we did not address the question of the operation of the statute of limitations qua statute of limitations as a bar to plaintiff’s claim. Thus, while Carmalt provides the governing precepts for the question of lach-es, it does not foreclose the precise inquiry we are called upon to make here.

Mr. Justice Stone’s opinion in Russell v. Todd, supra, serves as the springboard for our analysis. There the Court was called upon to decide whether New York’s three year statute of limitations would apply to an action brought by the creditors of an insolvent bank against the bank’s shareholders under the Federal Farm Loan Act. The Court reasoned that the claim was brought “exclusively in equity to enforce rights cognizable only in equity”, that it was not exercised in aid or support of a legal, right, and that the state statute applied only to legal remedies. Specifically, the Court emphasized:

[W]here the equity jurisdiction is exclusive and is not exercised in aid or support of a legal right, state statutes of limitations barring actions at law are inapplicable, and in the absence of any state statute barring the equitable remedy in like eases, the federal court is remitted to and applies the doctrine of laches as controlling.

309 U.S. at 289, 60 S.Ct. at 532. Since plaintiffs’ claim met the necessary criteria, the Court held that the doctrine of laches, and not the statute of limitations, governed the action.

Unlike the claim in Russell v. Todd, plaintiff’s claim is not exclusively within the equity jurisdiction of the court. A veteran’s arsenal of remedies under § 459 is not limited solely to those which are equitable in nature. By its very terms § 459 provides the district court with power “to require [the] employer to comply with . [certain provisions of the section] and to compensate such person for any loss of wages or benefits . . . ” Thus, a veteran can seek legal or equitable relief, or both. Since plaintiff’s claim cannot be characterized as being exclusively in equity to enforce rights cognizable only in equity, the state statute of limitations controls plaintiff’s claim insofar as it seeks legal relief. See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962), Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959).

B.

But that does not end our inquiry, for we must also decide whether the limitations of actions statute governs plaintiff’s demand for equitable relief as well. In the absence of any statute of limitations made applicable to similar equitable claims, equity has provided its own rule of limitations through the use of the doctrine of laches. “Even though there is no state statute applicable to similar equitable demands, when the jurisdiction of the federal court is concurrent with that at law . . . equity will withhold its remedy if the legal right is barred by the local statute of limitations.” Russell v. Todd, supra, 309 U.S. at 289, 60 S.Ct. at 532.

U.S. Steel argues that since plaintiff’s legal and equitable remedies are predicated upon the same factual complex, they are “concurrent”. Alternatively, it mounts the argument that because Pennsylvania applies its statute of limitations to equitable actions seeking adjustments in seniority status, we must apply it here. First, although plaintiff’s demand for legal and equitable relief arises out of the same factual complex, it does not necessarily follow that the jurisdiction of equity is “concurrent” with that of law, as that word is used in Russell v. Todd. By seeking to rely on the facts giving rise to plaintiff’s claim rather than focusing on the nature of the relief sought, defendant’s argument misses the mark of the issue before us. Although equity jurisdiction is concurrent with that at law when a remedy is available in both legal and equitable forms, the Supreme Court has made it clear that “in the federal .courts equity has always acted only when legal remedies were inadequate . . . ” and “the expansion of adequate legal remedies provided by the Declaratory Judgment Act and the Federal Rules necessarily affects the scope of equity.” Beacon Theatres, Inc. v. Westover, supra, 359 U.S. at 509, 79 S.Ct. at 956. (Footnote omitted.) Here, plaintiff seeks to have his job seniority dates changed. An order to change the dates cannot be achieved by a- remedy at law. It requires a decree in equity. Thus, jurisdiction is not concurrent.

U.S. Steel also contends that the court in Madera v. Monongahela Ry. Co., 356 Pa. 460, 52 A.2d 329 (1947), specifically applied the six year statute to an action seeking seniority status adjustments, a “like case,” under the teaching of Russell v. Todd, supra. There plaintiff commenced an action for restoration of seniority rights and for an accounting. The defendant pleaded that “plaintiff’s claim was barred by laches.” The court adopted the opinion of the trial court as to that issue:

“Finally, we are of [the] opinion that the plaintiff’s claim is barred by laches. As seniority rights arise only out of contract, it is appropriate that the statute of limitations should be applied by way of analogy to actions at law . . . [Plaintiff’s] delay in instituting her action has been altogether unreasonable. . . . [T]he Company has employed and paid many others to fill positions to which seniority might have entitled her, and for the court to reinstate her now . would result in great pecuniary loss and damage to the Company that would have been avoided had she prosecuted her claim with diligence.”

52 A.2d at 332. The company’s argument discloses a confusion between application of the limitations statute qua statute with a consideration of it by way of analogy in the application of the doctrine of laches.

Insofar as predicting how the Pennsylvania courts would react is germane to our inquiry, see, e. g., Quinones v. United States, 492 F.2d 1269, at p. 1273 (3d Cir. 1974), we believe that Pennsylvania will continue to analogize its six year contract limitations statute in applying the doctrine of laches in those cases in which the equity side of their courts is invoked to obtain an adjustment in seniority dates. Thus, in the posture of this case, we too must be unerringly led to apply the laches doctrine to plaintiff’s claim for equitable relief.

III.

Laches conceptualizes the inequity which may inhere when a stale claim is permitted to be enforced. By its very nature the doctrine addresses itself to the sound discretion of the trial judge. Therefore, absent an abuse of discretion, we will not disturb the court’s determination. Burke v. Gateway Clipper, Inc., 441 F.2d 946, 949 (3d Cir. 1971). “If the district court has applied the correct criteria to the facts of the case, then, it is fair to say that we will ordinarily, defer to its exercise of discretion.” Katz v. Carte Blanche Corporation, 496 F.2d 747, at p. 756 (3d Cir., 1974) (In banc).

Laches consists of two elements, inexcusable delay in instituting suit and prejudice resulting to the defendant from such delay. Kane v. Union of Soviet Socialist Republics, 189 F.2d 303 (3d Cir. 1951) (In banc). In fixing the time limitation which will give rise to a rebut-table presumption of inexcusable delay and prejudice, this court has previously applied the analogy of the state statute of limitations. In so doing, however, we have consistently stressed that the state statute of limitations serves only as an analogy and not as a rule, because laches focuses on the excusability of the delay and the prejudice to the defendant, not the length of the delay per se. Burke v. Gateway Clipper, Inc., supra, 441 F.2d at 949; Carmalt v. G.M.A.C., supra, 302 F.2d at 590; Kane v. U.S.S.R., supra 189 F.2d at 305-306. The length of delay, while not mandating the outcome, does control burdens of proof. If a plaintiff sleeps on, his rights for a period of time greater than the applicable statute of limitations, then “the plaintiff [must] . . . come forward and prove that his delay was excusable and that it did not . . . prejudice the defendant.” Burke v. Gateway Clipper, supra, 441 F.2d at 949. Applying these well-established principles to this factual complex, we hold that the court abused its discretion in concluding that plaintiff’s claim was not barred by laches.

A.

Our starting point is an inquiry into the existence of inexcusable delay. Here, plaintiff was rehired by U.S. Steel on January 18, 1963. He offered no proof of any deception or promise, or any other valid reason for postponing the running of the statute of limitations or the period for delay. Thus, for purposes of application of the statute of limitations and laches, the time began to run upon reemployment, January 18, 1963. Instead of commencing an action in the district court, plaintiff did nothing. He waited in excess of six years before he even reasserted his claim to the Union in April, 1969. Not until August 15, 1972, was an action filed.8 Applying the Pennsylvania six year statute by analogy, a presumption of inexcusable delay and prejudice arose. Thus, it became plaintiff’s burden to come forward with evidence to rebut the presumption. The district court found Whitmore v. Norfolk & Western Ry. Co., 73 LRRM 2001 (N.D. Ohio 1969) to be persuasive and concluded that the delay was excusable because the violation was not flagrant and because the defendant “by its own actions, made a substantial contribution to the delay at issue.”

Clarity of the violation or uncertainty of the law are not factors which operate to excuse a party’s delay. It is the duty of a veteran to promptly pursue his rights in court. Carmalt v. G.M.A.C., supra, 302 F.2d at 591. The promptness which is demanded is not a naked assertion of a claim but the commencement of an action by the filing of a complaint. One cannot sit back, wait years for someone else to act as his stalking horse, and then ride the coattails of a favorable judicial decision irrespective of the delay involved. This is exactly what plaintiff has done here.

The court also abused its discretion when it concluded that the defendant substantially contributed to the delay. Plaintiff presented no evidence that he was misled by concealment, misrepresentation, unfulfilled promises or any other inequitable conduct on the part of U.S. Steel. In the words of the district court: “the defendant . formulated and adhered to a policy which was eventually determined by the courts to be erroneous.” By his uncon-tradicted affidavit, George G. Stout stated that the company’s legal policy was based upon a good faith understanding of the Act and cases interpreting it. Plaintiff was informed of the company’s policy in February, 1963. Plaintiff admits that he did not bring a claim because he felt that it would be “useless”. In no way can the defendant’s actions constitute a substantial contribution to plaintiff’s delay. We realize that Whit-more v. Norfolk & Western Ry. Co., supra, can be read as disagreeing with the conclusion we reach here. To the extent that it does, we decline to follow it.

B.

A determination of inexcusable delay does not end the matter. To invoke the laches doctrine, prejudice to the defendant because of the delay must also be shown. Because the plaintiff’s delay was in excess of the analogized statute of limitations, prejudice will be presumed. Burke v. Gateway Clipper, Inc., supra. Plaintiff offered no evidence to rebut this presumption. By contrast, defendant offered evidence that it had paid other employees wages to perform the work that plaintiff would have accomplished. By sleeping on his rights plaintiff permitted the defendant to unnecessarily spend money in excess of nine years. The district court rejected this factor as an element of prejudice, viewing it as being created by the defendant’s own doing. We disagree.

Pecuniary loss is a very real factor to be considered in determining whether prejudice to the defendant exists. More important is the domino effect precipitated by changing plaintiff’s job service dates. By his affidavit Mr. Stout stated that “retroactive promotions would have caused extraordinary personnel disruptions, and would have impaired efficiency in varying degrees, at all employing locations.” While this statement deals generally with the overall effect on the company, plaintiff has offered no proof that this “bumping” ef-feet would not prejudice the efficiency and operation of U.S. Steel in this case. Therefore, we conclude that the district court abused its discretion in concluding that plaintiff had rebutted the presumption of prejudice to the defendant.

We have carefully considered all the contentions raised by the parties. The judgment of the district court will be reversed and the complaint dismissed.

      . § 459. Separation from service (b) Reemployment rights

      In the case of any such person who, in order to perform such training and service, has left or leaves a position (other than a temporary position) in the employ of any employer and who (1) receives such certificate, and (2) makes application for reemployment within ninety days after he is relieved from such training and service or from hospitalization continuing after discharge for a period of not more than one year—
      (B) if such position was in the employ of a private employer, such person shall—
      (i) if still qualified to perform the duties of such position, be restored by such employer or his successor in interest to such position or to a position of like seniority, status, and pay; . . . unless the employer’s circumstances have so changed as to make it impossible or unreasonable to do so.

        (d) Jurisdiction of district court; United States attorney to act for claimant

      In case any private employer fails or refuses to comply with the provisions of subsection (b), ... [of this section], the district court of the United States for the district in which such private employer maintains a place of business shall have power, upon the filing of a motion, petition, or other appropriate pleading by the person entitled to the benefits of such provisions, specifically to require such employer to comply with such provisions and to compensate such person for any loss of wages or benefits suffered by reason of such employer’s unlawful action: Provided, That any such compensation shall be in addition to and shall not be deemed to diminish any of the benefits of such provisions. The court shall order speedy hearing in any such case and shall advance it on the calendar. Upon application to the United States attorney or comparable official for the district in which such private employer maintains a place of business, by any person claiming to be entitled to the benefits of such provisions, such United States attorney or official, if reasonably satisfied that the person so applying is entitled to such benefits, shall appear and act as attorney for such person in the amicable adjustment of the claim or in the filing of any motion, petition, or other appropriate pleading and the prosecution thereof specifically to require such employer to comply with such provisions: Provided, That no fees or court costs shall be taxed against any person who may apply for such benefits: Provided further, That only the employer shall be deemed a necessary party respondent to any such action.

      . § 31. Personal actions, when to be brought
      All actions of trespass quare clausum fre-git, all actions of detinue, trover and replev-in, for taking away goods and cattle, all actions upon account and upon the case (other than such accounts as concern the trade of merchandise between merchant and merchant, their factors or servants), all actions of debt grounded upon any lending, or contract without specialty, all actions of debt, for arrearages of rent, except the proprietaries’ quit-rents, and all actions of trespass, of assault, menace, battery, wounding and imprisonment, or any of them, which shall be sued or brought at any time after the five and twentieth day of April, which shall be in the year of our Lord one thousand seven hundred and thirteen, shall be commenced and suéd within the time and limitation hereafter expressed, and not after; that is to say, the said actions upon the case, other than for slander, and the said actions for account, and the said actions for trespass, debt, detinue and replevin, or goods or cattle, and the said actions of trespass quare clausum fregit within three years after the said five and twentieth day of April next, or within six years next after the cause of such actions or suit, and not after. And the said actions of trespass, of assault, menace, battery, wounding, imprisonment, or any of them, within one year next after the said five and twentieth day of April next, or within two years next after the cause of such actions or suit, and not after; and the said actions upon the case for words, within one year next after the words spoken, and not after.
      Act of March 27, 1713, 1 Sm.L. 76, § 1, 12 Pa.Stat.Anno. § 31.

      . The liability aspect was not seriously contested in the district court. It is not contested on appeal.

      . Sometime in February, 1963, approximately one month after his reemployment.

      . Defendant concedes here, as it did in the district court, that: “Had Mr. Gruca not entered the service, had he continued to be employed, had he been physically fit, had no one senior to him applied, and had he himself applied, he would have been entitled to take training in Crane Operation before these four men, by virtue of his earlier Department Date.” Appellant’s brief at 7.

      . Alternatively, we held that under the facts of that case a delay of approximately two and one half years was unreasonable. We emphasized that “claims under . . . [the Military Selective Service Act] must be brought promptly or be barred by laches.” 302 F.2d at 591 (Footnote omitted.).

      . The parties do not contend that the statute of any state other than Pennsylvania should be applied. Indeed, once it is concluded that the statute of limitations applies to the claim seeking legal relief “it is federal policy to adopt the local law of limitation.” Holm-berg v. Armbrecht, supra, 327 U.S. at 395, 66 S.Ct. at 584. (Emphasis supplied.)

      . We hasten to add th¿t reference to a comparable statute of limitations does not determine the minimum limits of the delay necessary to invoke the first element of the lach-es doctrine. In given circumstances, a shorter time period may be sufficient to give rise to inexcusable delay and prejudice to the defendant, see, Carmalt v. G.M.A.C., supra, and footnote 6, supra, in which case the burden would be on the defendant to prove each of the elements.

      . On April 18, 1969, plaintiff submitted his application for assistance to the Department of Labor. However, not until September 30, 1971, did plaintiff request the Department of Justice to intercede in his behalf by commencing an action in district court. Plaintiff argues that this delay is attributable to the government, not him, and therefore it is excusable. But the brute fact is that the record does not support the conclusion that the delay was attributable to the government. All the district court had before it were the above mentioned dates, not the reasons for the time lag. Therefore, even if we were prepared to hold that the delay of the governmént acting purely on behalf of the veteran was excusable, plaintiff, who had the burden to come forward and prove “ex-cusability” once the presumption arose, did not do so.

      . See, footnote 6, supra.

      . Stout is an attorney specializing in the field of Labor Law within the Law Department of the United States Steel Corporation. (Appendix at 88a).


author: LUMBARD, Circuit Judge:

text:
    In the Matter of the Arbitration between SANKO S.S. CO., LTD., Appellant, and COOK INDUSTRIES, INC., Appellee.
    No. 6, Docket 73-1355.
    United States Court of Appeals, Second Circuit.
    Argued Sept. 12, 1973.
    Decided Oct. 17, 1973.

      John P. Meade, New York City (Meade, Wasserman & Freeman, New York City, on the brief), for appellant.
    Francis J. O’Brien, New York City (Hill, Rivkins, McGowan & Carey and Frederick W. Meeker, New York City, on the brief), for appellee.
    Before LUMBARD, FRIENDLY and FEINBERG, Circuit Judges.
   LUMBARD, Circuit Judge:

Appellant, Sanko Steamship Co., Ltd., the unsuccessful party in an arbitration conducted under a New York Produce Exchange Arbitration Clause and pursuant to the rules of the Society of Maritime Arbitrators, seeks a rehearing of a charter dispute by an impartial panel of arbitrators. It claims that the presiding member of the three-man panel which originally arbitrated its dispute with Cook Industries failed to disclose his company’s previous associations with Francis O’Brien, Cook’s attorney at the arbitration hearing, and large-scale dealings between Cook and the presiding arbitrator’s ultimate employer, the Louis Dreyfus partnership. After an award by the panel dated June 19, 1972, finding that Sanko had breached the charter contract and that Cook was thus excused from performance, Sanko sought an order in the New York Supreme Court vacating the award. Cook did not respond, but instead moved on September 27, 1972 in the United States District Court for the Southern District of New York to have the award confirmed. Shortly thereafter Sanko moved to vacate in the same district court. By a memorandum decision dated December 8, 1972, Judge Brieant denied Sanko’s motion to vacate and granted Cook’s motion to confirm, without an evidentiary hearing. An order was entered accordingly on January 15,1973, from which Sanko appeals.

The dispute between Sanko and Cook has its origins in a charter contract entered into by the parties on February 26, 1971. This contract was a grain charter on a New York Produce Exchange form for one voyage from any port in the United States Gulf Coast range to Japan by ship to be supplied by Sanko, a Japanese company, to Cook, an American grain dealer. Under the terms of the charter, the vessel was to load sometime between August 1 and August 25, 1971. Sanko was required to give ten days notice of the vessel’s estimated time of readiness. Cook was then tó provide Sanko or its agent with a declaration of the port in the Gulf Coast, range where the vessel was to load “at least 96 hours prior [to] the vessel’s estimated time of readiness.” If the ship was not ready to load before noon on August 25, Cook was to have the option of canceling the charter.

On July 15 and August 6, Sanko gave Cook an estimated time of readiness of August 18 for one of' its ships, the “Mary S.” Sanko’s office in New York and its agent then sought an official declaration of the loading port from Cook, but without success. Finally, Cook telexed Sanko’s Tokyo office on August 23 declaring New Orleans the loading port. Although the Mary S was still discharging cargo in Houston at that time, she was able to reach New Orleans and tender her notice of readiness by 10:45 a. m. on August 26, only 76 hours after the loadport nomination by Cook. The vessel was nevertheless rejected because it had arrived after the cancellation date of August 25.

Sanko claimed a loss in excess of $200,000 due to this cancellation and sought arbitration under the terms of the contract. An arbitration panel was chosen, consisting of one member appointed by Sanko and one by Cook, with these two arbitrators then selecting John Besman, a founder of the Society of Maritime Arbitrators, as chairman of the panel. After hearing the evidence and reviewing the charter contract, the arbitration panel unanimously rejected' Sanko’s claim, concluding that although Cook had been late in making its load-port nomination, it was excused from performance because the Mary S could not have arrived in New Orleans under any circumstances before the cancellation date of August 25.

In seeking to have the arbitration panel’s award vacated, Sanko raised in the New York Supreme Court and then in the district court the issue of Bes-man’s failure to make full disclosure of his business connections with Cook Industries and its counsel, Francis O’Brien. At the commencement of the arbitration proceedings, Besman had stated that the company of which he was president, Sagus Marine Corporation, had had business dealings with Cook “of a spot nature.” But according to Sanko, he failed to reveal several other significant connections with Cook. Sanko claimed that inquiries it had made as a result of its dissatisfaction with the arbitration award had revealed that Sagus Marine is a subsidiary or affiliate of the Louis Dreyfus Partnership of France and that shortly after the arbitration award Besman had left for Europe to head a second Dreyfus subsidiary. Dreyfus, whose man Besman clearly was, is, like Cook, one of the few major world grain dealers. But although technically competitors, the two companies, according to Sanko, arrange “swaps” and “sales” from time to time running into the millions of dollars. Thus, Bes-man might have had some interest in reaching a decision favorable to Cook, if only to lay the groundwork for a return favor to Dreyfus from Cook in the future.

Sanko also claimed discovery of ties between Besman and Cook’s attorney, Francis O’Brien. It maintained that Sa-gus Marine had been represented by O’Brien for some time and, in fact, that it had followed him when he had shifted law firms in order to assure his continued representation as its counsel.

Although stating that he would accept Sanko’s version of contested facts and that no evidentiary hearing would therefore be necessary, Judge Brieant nevertheless discounted these instances of undisclosed interests. He failed to find any parent-subsidiary relationship between Dreyfus and Sagus Marine, although this had been strongly urged by Sanko. With regard to transactions between Cook and Dreyfus, he found an “occasional business relationship” which was “insubstantial,” a conclusion at variance with Sanko’s position, stated in its affidavit, that there were “continuing business dealings” between the companies. Concerning the relationship between Besman and Cook’s attorney, O’Brien, the court seemed to interpret the facts to show merely that O’Brien “formerly belonged to a law firm which formerly represented [Besman’s] employer in an unrelated matter.” In contrast, Sanko had pointed to a far more substantial and continuing relationship.

These discrepancies require that this case be remanded so that an evidentiary hearing may be held and the full extent and nature of the relationships at issue may be ascertained. After the facts of the relationship between Cook and Dreyfus or Besman and 0’Brien*are thoroughly aired, the district court will be in a better position to follow the dictates of Commonwealth Coatings v. Continental Cas. Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968).

Commonwealth Coatings involved an arbitration between a subcontractor and sureties on the prime contractor’s bond. In a procedure similar to that followed by Sanko and Cook, the subcontractor and the prime contractor each appointed an arbitrator and these two arbitrators then selected a third arbitrator. This third arbitrator had had “repeated” and “significant” business dealings with the prime contractor “involving fees of about $12,000 over a period of four or five years,” although there had been no contacts during the year preceding the arbitration. The business relationship that had existed was not revealed to the subcontractor and for this reason it sought to have the arbitration award in favor of the sureties set aside.

The Court held that the award must be vacated, declaring that arbitrators are required to disclose “any dealings that might create an impression of possible bias.” 393 U.S. at 149, 89 S.Ct. at 339. Comparing the arbitrator to a judge, the Court emphasized that while

[i]t is true that arbitrators cannbt sever all their ties with the business world ... we should, if anything, be even more scrupulous to safeguard the impartiality of arbitrators than judges, since the former have completely free rein to decide the law as well as the facts and are not subject to appellate review.

Mr. Justice White, with Mr. Justice Marshall’s concurrence, joined the opinion of the Court, but added some further comments. Although not endorsing the view that arbitrators should be held to as high standards as judges and therefore be required to disqualify themselves in all instances in which a judge would have been required to do so, Mr. Justice White did endorse the Court’s position that extensive disclosure must be made by each arbitrator prior to the arbitration:

[I]t is enough for present purposes to hold, as the Court does, that where the arbitrator has a substantial interest in a firm which has done more than trivial business with a party, that fact must be disclosed. 393 U.S. at 151-152, 89 S.Ct. at 340.

Accordingly, Justices White and Marshall also concluded that the arbitrator’s business dealings should have been disclosed.

To be sure, the broad disclosure called for in Commonwealth Coatings does not require that an arbitrator “provide the parties with his complete and unexpurgated business biography.” 393 U.S. at 151, 89 S.Ct. at 340; Reed & Martin, Inc. v. Westinghouse Elec. Corp., 439 F.2d 1268 (2d Cir. 1971). But where dealings “might create an impression of possible bias,” they must be disclosed. Indeed, it seems to us that the better practice is that arbitrators should disclose fully all their relationships with the parties, whether these ties be of a direct or indirect nature. Although some unnecessary disclosure may result,

if arbitrators err on the side of disclosure, ... it will not be difficult for courts to identify those undisclosed relationships which are too insubstantial to warrant vacating an award. Commonwealth Coatings v. Continental Cas. Co., 393 U.S. at 152, 89 S.Ct. at 341 (White, J., concurring).

Moreover, the role of the judiciary in determining an arbitrator’s impartiality after an award has been made will be significantly reduced, since the parties will have the opportunity at the outset of the arbitration to reject an arbitrator or accept him with full knowledge of his connections with the other party. The task of judging impartiality will thus wisely be “consigned to the parties, who are the architects of their own arbitration process, and are far better informed of the prevailing ethical standards and reputations within their business.” Commonwealth Coatings v. Continental Cas. Co., 393 U.S. at 151, 89 S.Ct. at 340.

The appellee contends, however, that two recent decisions of this court, Garfield & Co. v. Wiest, 432 F.2d 849 (2d Cir. 1970), cert. denied, 401 U.S. 940, 91 S.Ct. 939, 28 L.Ed.2d 220 (1971), and Cook Industries v. C. Itoh & Co., 449 F.2d 106 (2d Cir.), cert. denied, 405 U.S. 921, 92 S.Ct. 957, 30 L.Ed.2d 792 (1971), support its view that Commonwealth Coatings is inapplicable to the present case. We disagree. Garfield & Co. v. Wiest involved the failure of an arbitrator to disclose his dealings with one of the parties to an arbitration between two member firms of the New York Stock Exchange. The court concluded that Commonwealth Coatings did not apply because Garfield had waived any objections when it joined the Stock Exchange. At that time it had been required to agree to arbitration of disputes with another member firm by a panel comprised of other members of the Exchange. The court reasoned that the company should have known that any arbitrators coming from among the other Exchange members would very probably have had dealings in the ordinary course of business with the other party to the arbitration. A similar result was reached in Cook Industries v. C. Itoh & Co., supra. That case involved arbitration of a dispute over a contract to purchase com between Cook Industries, the same company as in the present case, and C. Itoh & Co., another grain dealer. After an award in favor of C. Itoh & Co., Cook sought to have it vacated on the ground that one of the arbitrators was an employee of a third corn trading firm, which had had substantial dealings with C. Itoh. The court rejected this claim, noting that there were only a limited number of corn traders, that they often dealt with each other, and being a trader itself, Cook must have known of these dealings.

Unlike the Garfield and Cook cases, the record in the present case, as it now stands, does not justify a holding that Sanko knew or should reasonably have known, of the undisclosed dealings. See Cook Industries v. C. Itoh & Co., supra at 108. Sanko and Cook were not members of a single closely-knit trading group. Moreover, Sanko had a very limited presence in the United States. Only two of its officers resided here. Furthermore, Sanko’s officers and its agents have denied in affidavits any knowledge of or discussions concerning contacts Besman might have had with Cook or its attorney. Although we com elude that there is no basis in the present record for the reliance placed by the appellee on our decisions in Garfield and Cook, the district court, on remand, should, of course, give full consideration to any further evidence which supports Cook’s argument that Sanko did, in fact, know or have reason to know of Bes-man’s undisclosed business relationships.

Reversed and remanded.

      . Vacation of the award was sought under 9 U.S.O. § 10, which provides that
      the United States court in and for the district wherein the award was madé may make an order vacating the award upon the application of any party to the arbitration—
      (a) Where the award was procured by corruption, fraud, or undue means.
      (b) Where there was evident partiality or corruption in the arbitrators, or either of them.

      . Section 11 of the Maritime Arbitration Rules of the Society of Maritime Arbitrators appears to endorse a similar standard of disclosure. The rule provides that
      At the time of receiving his notice'of appointment, a prospective Arbitrator is required to disclose any circumstance tending to raise a presumption of bias or which he believes might disqualify him as an impartial Arbitrator. Upon receipt of such information, the Secretary shall immediately disclose it to the parties, who, if willing to proceed under the circumstances disclosed, shall, in writing, so advise the Secretary. If either party declines to waive a presumptive disqualification, the vacancy thus created shall be filled in accordance with the applicable provisions of these Rules.
      Commenting on a very similar provision in the Rules of the American Arbitration Association, section 18, the Court in Commonwealth Coatings stated that
      This rule of arbitration . . . rest[s] on the premise that any tribunal permitted by law to try cases and controversies not only must be unbiased but also must avoid even the appearance of bias.

      . Whether ties are so indirect or remote that they could not reasonably create an impression of bias is a question that must be answered by reference to the facts of the particular case. If the relationship between Besman and Cook Industries through the Dreyfus partnership is as substantial as Sanko alleges on the basis of its present information, even though that relationship is not as direct as the dealings between the prime contractor and one of the arbitrators in Commonwealth Coatings and is of a different nature, the district court might still find that it could have raised doubts concerning Besman’s impartiality and should have been revealed.

      . In certain disputes this will not be possible since the particular rules governing the arbitration may leave the determination of the question of disqualification to the arbitration panel. In such cases, a refusal by the panel to compel an allegedly partial arbitrator to step down will generally be reviewable by a district court only after an award has been made. Catz Am. Co. v. Pearl Grange Fruit Exch., 292 F.Supp. 549, 551 (S.D.N.Y.1968); Petition of Dover S.S. Co., 143 F.Supp. 738, 742 (S.D.N.Y.1956); San Carlo Opera Co. v. Conley, 72 F.Supp. 825, 833 (S.D.N.Y.1946), aff’d, 163 F.2d 310 (2d Cir. 1947). But see Erving v. Virginia Squires Basketball Club, 468 F.2d 1064, 1067 (2d Cir. 1982). However, in most cases, the parties themselves will be able to compel the disqualification of arbitrators suspected of bias prior to the commencement of the proceedings. For example, under § 11 of the Maritime Arbitration Rules of the Society of Maritime Arbitrators, as under § 18 of the Rules of the American Arbitration Association, a party may have an arbitrator replaced simply by failing to waive a presumptive objection that arises if any circumstances are disclosed by the arbitrator prior to the hearing which tend to suggest bias.

      . The court emphasized, however, that its holding did not extend to dealings between the other party to the arbitration and the arbitrator which were not in the ordinary course of Exchange business an'd of which Garfield therefore could not have been presumed to be aware,


author: FRIENDLY, Circuit Judge:

text:
    La SOCIETE ANONYME des PARFUMS LE GALION, Plaintiff-Appellant, v. JEAN PATOU, INC. and Michael Stram-iello, Jr., Collector of Customs of the Port of New York, Defendant-Appellee.
    No. 530, Docket 72-2409.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 22, 1974.
    Decided April 9, 1974.

      Arthur A. March, New York City, for plaintiff-appellant.
    Before LUMBARD, FRIENDLY and TIMBERS, Circuit Judges.
    Alex Friedman, New York City (Martin J. Beran, David A. Weinstein, and Blum, Moscovitz, Friedman & Kaplan, New York City, of counsel), for defendant-appellee Jean Patou, Inc.
   FRIENDLY, Circuit Judge:

Plaintiff LeGalion, a French perfume manufacturer, has for years sold its perfume under the trademark “SNOB” in a number of foreign countries. The sales have been substantial, amounting in one recent five-year period to almost $2,000,000. LeGalion has been unable to sell SNOB in the United States, however, because in 1951 defendant Patou, an American perfume manufacturer, obtained a trademark registration for SNOB in this country. Pursuant to § 42 of the Lanham Act, 15 U.S.C. § 1124, Customs officials subsequently refused to permit LeGalion to import its SNOB perfume because of the conflict with defendant’s registered mark. In spite of the registration, Patou has never made a serious effort to merchandise SNOB; between 1950 and 1971, it sold only some 89 bottles of SNOB, and it engaged,,in no advertising or other sales efforts on behalf of the product. Pa-tou’s sales of SNOB between 1951 and 1969 generated a “gross profit” of only about $100, on retail sales of less than $600.

In 1956, LeGalion filed suit in the District Court for the Southern District of New York, seeking declaratory relief that would permit it to import its SNOB brand and give it trademark rights in the name. LeGalion claimed that Patou had never used the SNOB trademark sufficiently to sustain its claim of ownership. After Patou filed its answer, however, plaintiff took no further steps to prosecute the case, and it was dismissed by Judge Herlands in 1958.

After a hiatus of some seven years, LeGalion brought a second action in the United States Patent Office in 1965 seeking cancellation of Patou’s SNOB registration. Again LeGalion did nothing to bring the case to trial, and it was dismissed in 1967.

Continuing in its languorous course, plaintiff in 1966 filed another complaint in the District Court for the Southern District of New York, demanding essentially the same relief as the 1956 complaint. Specifically, LeGalion sought to force the Collector of Customs to permit the importation of its SNOB perfume and requested declaratory relief, damages, cancellation of Patou’s SNOB registration, and “such other and further relief as to this Court may seem just.” After more delay, the case finally came to trial in July, 1972. In a six-page memorandum decision, Judge Gagliardi held that although Patou’s sales of SNOB were minimal, they were sufficient to maintain its trademark rights, and thus to block the importation of LeGalion’s product. The court based its conclusion on three grounds. First, it found that the sales program was not a sham: each sale was profitable, and each was effected on order from a bona fide customer. On that basis the court distinguished Merry Hull & Co. v. Hi-Line Co., 243 F.Supp. 45 (S.D.N.Y. 1965), where the plaintiff’s practice of distributing its product only to relatives, friends, and employees was held not to constitute a bona fide commercial use of the trademark. Second, it held that Pa-tou’s minimal use of its SNOB trademark was sufficient “in the light of the customary practice of perfumers to ‘reserve’ a name and to carry on trademark maintenance programs,” 353 F.Supp. at 293. The court noted that the difficulty of finding new and attractive trade names for perfumes had caused manufacturers to hold a number of potential trade names in reserve until such time as the company might decide to begin large-scale distribution of the product under that name. Minimal bona fide use for the purpose of trademark protection, the court wrote, is all the law requires. Finally, the district court held that the pendency of legal proceedings since 1956 concerning the validity of Pa-tou’s SNOB mark constituted a valid defense to LeGalion’s claim that Patou’s use of the mark had been only token in nature. From the district court’s judgment for defendants, 353 F.Supp. 293 (S.D.N.Y.1972), plaintiff brought this appeal.

I.

At the outset we must consider the related problems of jurisdiction and mootness. In its complaint, LeGalion alleged jurisdiction under the Lanham Act and on the basis of diversity of citizenship. However, Patou’s registration for SNOB expired on January 2, 1971, and its counsel stipulated at trial that the registration had not been renewed. The demand for cancellation of the defendant’s 1951 registration is therefore moot. Since the Lanham Act section that bars importation of a product bearing a conflicting trademark applies only if the established mark is registered, the claim for injunctive relief would also appear moot. With those two major claims out of the case, plaintiff has shifted its ground somewhat: on appeal, it has requested that the court grant a declaratory judgment that Patou has no rights to the SNOB trademark. That request falls fairly within the scope of the catch-all paragraph in its complaint, but it does not arise under the Lanham Act if Patou’s only remaining trademark claim stems from common law rights. The last possible basis for federal question jurisdiction is plaintiff’s request for “an accounting of all damages caused by the defendant Jean Patou, Inc. in preventing the importation ... of plaintiff’s perfumes.” The Lanham Act contains no specific provision for recovery of damages in this context. However, § 38 of the Act, which provides a damages remedy for injuries suffered in consequence of a false or fraudulent registration, might be read to extend to plaintiff’s claim, cf. Landstrom v. Thorpe, 189 F.2d 46 (8 Cir.), cert. denied, 342 U.S. 819, 72 S.Ct. 37, 96 L.Ed. 620 (1951); D. M. & Antique Import Corp. v. Royal Saxe Corp., 311 F.Supp. 1261, 1272 (S.D.N.Y.1970). While it appears that the damages claim is at least sufficient to afford a ground for federal jurisdiction, it may not be necessary to reach that issue, since diversity of citizenship appears to provide a sufficient jurisdictional basis. It seems highly likely that plaintiff will be able to sustain its allegation that there is more than $10,000 in controversy; if this should be challenged, the district court on remand should determine this and make whatever other factual inquiries may be necessary to resolve any remaining doubts on the question of jurisdiction.

II.

Beyond the jurisdictional question, this case presents several difficult questions concerning trademark law and the principles of res judicata. The difficulties relating to trademark law stem from the tension between providing relative security to a business in maintaining its trademarks and preventing a business with only a nominal claim to a valuable trademark from barring its use by a party with a substantial financial stake in using the mark.

Under familiar trademark principles, the right to exclusive use of a trademark derives from its appropriation and subsequent use in the marketplace. The user who first appropriates the mark obtains an enforceable right to exclude others from using it, as long as the initial appropriation and use are accompanied by an intention to continue exploiting the mark commercially, Trade-Mark Cases, 100 U.S. 82, 94, 25 L.Ed. 550 (1879); United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141 (1918); Kohler Manufacturing Co. v. Beeshore, 59 F. 572, 576 (3 Cir. 1893); Worden v. Cannaliato, 52 App.D.C. 254, 285 F. 988, 990 (1924); American Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619 (5 Cir. 1963); Restatement (Second) of Torts § 719, comment b (tent.draft 1963). The Supreme Court wrote in the United Drug Co. case, 248 U.S. at 97, 39 S.Ct. at 50:

There is no such thing as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed. The law of trademarks is but a part of the broader law of unfair competition; the right to a particular mark grows out of its use, not its mere adoption; its function is simply to designate the goods as the product of a particular trader and to protect his good will against the sale of another’s product as his; and it is not the subject of property except in connection with an existing business.

Adoption and a single use of the mark may be sufficient to entitle the user to register the mark, see Maternally Yours, Inc. v. Your Maternity Shop, Inc., supra, 234 F.2d 538; Montgomery Ward & Co. v. Sears, Roebuck & Co., 49 F.2d 842, 18 CCPA 1386 (1931); Fort Howard Paper Co. v. Kimberly-Clark Corp., 390 F.2d 1015, 1017, 55 CCPA 947, cert. denied, 393 U.S. 831, 89 S.Ct. 99, 21 L.Ed.2d 101 (1968); Community of Roquefort v. Santo, 443 F.2d 1196, 58 CCPA 1303 (1971). But more is required to sustain the mark against a charge of nonusage. Xtra, Inc. v. Warren Petroleum Corp., 175 U.S.P.Q. 660 (Trademark Trial & App. Bd. 1972); Arnold, A Philosophy on the Protections Afforded by the Patent, Trademark, Copyright and Unfair Competition Law, 54 Trademark Rep. 413, 431 (1964); Kegan, Trademark “Use” —Fact or Fiction, 55 Trademark Rep. 175 (1965). To prove bona fide usage, the proponent of the trademark must demonstrate that his use of the mark has been deliberate and continuous, not sporadic, casual or transitory, 3 Call-mann, Unfair Competition, Trademarks & Monopolies § 76.2(d) (1969).

Plaintiff claims that the minimal use in this case was not sufficient to constitute the bona fide use of the trademark necessary to confer rights upon Patou, particularly since by obtaining its registration Patou succeeded in completely excluding LeGalion’s established product from the American market. Defendant in turn relies essentially on the three grounds adopted by the district court: that the 89 sales were all profitable, arms-length transactions; that the practice of reserving trademarks through trademark maintenance programs provided a legitimate excuse for Patou’s minimal use; and that the pendency of legal proceedings independently justified its failure to exploit the mark energetically.

None of these grounds is persuasive. While the district court termed the 89 sales in 20 years “bona-fide,” we cannot agree that such a meager trickle of business constituted the kind of bona fide use intended to afford a basis for trademark protection. The court found that the sales were profitable in that they produced a total “gross profit” of $100 over the twenty-year period. However, it is inconceivable that Patou could actually have experienced anything but a substantial per unit loss in bottling, labeling, handling, and shipping its SNOB perfume at the rate of one and two bottles per order. Simply maintaining accurate records of the sales of SNOB would easily have eaten up the $100 “gross profit” over the twenty-year period. Even if it should happen that by some touch of managerial or accounting wizardry Patou has managed to turn a net profit of a few dollars on its sales of SNOB, its use of the trademark would still not constitute good faith commercial exploitation. It is true, as defendant contends, that trademark rights have often been upheld in spite of modest sales programs, see, e. g., Kathreiner’s Malzgaffee Fabriken v. Pastor Kneipp Medicine Co., 82 F. 321 (7 Cir. 1897); Sheila’s Shine Products, Inc. v. Sheila Shine, Inc., 486 F.2d 114, 123 (5 Cir. 1973); In re Beatrice Foods Co., 166 U.S.P.Q. 431 (C.C.P.A.1970); E. I. duPont de Nemours v. Big Bear Stores, Inc., 161 U.S.P.Q. 50 (Trademark Bd. 1969); Adam Hat Stores, Inc. v. Lefco, 44 F.Supp. 442 (E.D.Pa.1942); aff’d, 134 F.2d 101 (3 Cir. 1943); California Spray-Chemical Corp. v. Ansbacher Sie-gle Corp., 55 U.S.P.Q. 298 (Comm’r of Patents 1942). In those cases, however, the trademark usage, although limited, was part of an ongoing program to exploit the mark commercially. In numerous other cases, where no present intent has been found to market the trademarked product, minimal sales have been held insufficient to establish trademark rights. See, e.g., LeBlume Import Co. v. Coty, 293 F. 344, 351 (2 Cir. 1923) (occasional sales so infrequent that “it cannot be said that the producer of the goods had obtained a market for them here which entitled his trade-mark to protection”); Philip Morris, Inc. v. Imperial Tobacco Co., 251 F.Supp. 362 (E.D.Va.1965), aff’d, 401 F.2d 179 (4 Cir. 1968), cert. denied, 393 U.S. 1094, 89 S.Ct. 875, 21 L.Ed.2d 784 (1969) (shipments sporadic, casual and nominal in character); D. M. & Antique Import Corp. v. Royal Saxe Corp., supra (use “transitory and minimal”); Vapon, Inc. v. Dreyfuss, 110 U.S.P.Q. 142 (Comm’r of Patents 1956) (sales “sporadic and inconsequential;” no real market for the product developed); United Plywoods Corp. v. Congoleum-Nairn, Inc., 121 U.S.P.Q. 102 (Trademark Trial & App.Bd. 1959) (no regular marketing of the product); Revell, Inc. v. Kadee Co., 162 U.S.P.Q. 176 (Trademark Trial & App.Bd. 1969) (minimal sales and no intent to use the mark commercially). It is clear to us that Patou has never put its product on the market in any meaningful way; indeed, it has given no indication that it has any current plans to do so.

The district court recognized, as Patou virtually concedes, that Patou’s real purpose in making its meagre sales of SNOB was to establish and maintain rights in the SNOB trademark. Patou representatives testified that the company maintained the program in order to preserve the option of someday producing SNOB in large volume. In fact, it seems much more likely that Patou regarded the program as a relatively painless way to keep a potential competitor at bay. The disincentives to develop its own perfume under the SNOB label were strong — it would not be able to expand into many foreign markets, and the likely confusion between it and its foreign competitor might work to its disadvantage. In any event, we disagree with the district court’s conclusion that because of the custom in the perfume industry of “reserving” trade names and “carrying on trademark maintenance programs,” Patou’s conduct was sufficient to establish rights to the SNOB mark. The token sales program engaged in here is by its very nature inconsistent with a present plan of commercial exploitation.

The relatively few courts that have treated the question have uniformly manifested reluctance to consider usage sufficient when it is obviously contrived solely for trademark maintenance purposes. In Phillips v. Hudnut, 49 App.D.C. 247, 263 F. 643, 644 (1920), the court held, in circumstances somewhat more extreme than those in this case, that a company must do more than simply distribute its product in an effort to lay the basis for registration; it must actually put the product on the market before trademark rights will attach. Similarly, in Mendes v. New England Duplicating Co., 94 F.Supp. 558, 560 (D.Mass.1950), aff’d, 190 F.2d 415 (1 Cir. 1951), the court noted that if a particular shipment was made merely in “token conformity with the statute in order to bolster his claim for the trademark registration,” the plaintiff could acquire no rights in the mark. Where plaintiffs had distributed several editions of a newsletter solely for the purpose of securing trademark rights in the name, a New York court wrote:

Plaintiffs acquired no rights from the publication of the newsletter. This was not a commercial user; it was purely pro forma, for the sole purpose of acquiring rights by aping the means by which such rights are acquired. Such pretense is not an acceptable substitute for bona fide use.

O’Connor & Gordon, Inc. v. Handicraft Publications, 206 Misc. 1087, 136 N.Y.S.2d 558, 560 (Sup.Ct.1954). See also Mister Donut of America, Inc. v. Mr. Donut, Inc., 153 U.S.P.Q. 773 (C.D.Cal. 1967), aff’d, 418 F.2d 838 (9 Cir. 1969); Hans Holterbosch, Inc. v. Rheingauer Schaumweinfabrik Schierstein, 110 U.S.P.Q. 543, 545 (Comm’r of Patents 1956); Academy of Motion Picture Arts and Sciences v. Academy Awards, Inc., 89 U.S.P.Q. 451, 460-61 (Patent Office Examiner-in-chief 1957) (“the purported use of the trademark on goods in trade can only be characterized as a mere pretense and subterfuge, carried out for the sole purpose of laying a basis for securing the trademark registration”).

The case of Clairol, Inc. v. Holland Hall Products, Inc., 165 U.S.P.Q. 214 (Trademark Trial & App.Bd.1970), recites the same principles in a factual setting somewhat similar to the one in this case. Clairol was engaged in a trademark maintenance program on behalf of its product, “Wipeout.” The Board found that Clairol’s token monthly shipments of its product to three retail druggists “can be categorized more or less as a defensive or negative approach serving merely to maintain rights therein without ever attempting to establish a trade in [the product]. Trademark rights are not created by sporadic, casual, and nominal shipments of goods bearing a mark. There must be a trade in the goods sold under the mark or at least an active and public attempt to establish such a trade. Absent these elements, no trademark can be created or exist .... Registrable rights manifestly cannot flow from these activities and the old adage ‘no trade — no trademark’ is applicable here.” Cf. Van Camp Sea Food Co. v. Universal Trading Co., 138 U.S.P.Q. 323, 324-25 (Trademark Trial & App.Bd. 1963); Sun-Maid Raisin Growers v. Sunaid Food Products, Inc., 254 F.Supp. 649 (S.D.Fla.1964). The twenty-year period of inaction by defendant persuades us that any use it made of the SNOB mark was purely defensive, and thus insufficient to obtain enforceable rights in the mark.

Finally, appellee seeks to defend its limited use on the ground that the pendency of legal proceedings, and the “continued threat of litigation” between its adoption of the mark and the present have discouraged it from attempting to exploit the mark more fully. While there are circumstances under which nonuse or limited use of the mark would be justified by legal challenges, they are clearly not present here. Le-Galion has been litigating in one forum or another for about half the twenty-three years since Patou adopted the SNOB mark, but in the remaining periods Patou’s behavior has been no more aggressive than while suits have been pending. Its argument that it has constantly feared LeGalion might rekindle the dispute plainly cuts too broadly. A party with a shaky claim cannot justify a course of minimal usage by arguing that its very conduct might someday draw litigation. Patou cites Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794 (9 Cir. 1970), in support of its claim that ongoing litigation over trademark rights can justify limited usage. In that case, however, the issue was one of abandonment. Moreover, it could have been disastrous for defendant in that case to have begun an extensive merchandising campaign while the ownership of its trademark was still in litigation. Here, by contrast, any additional sales activity, particularly during the period that no suits were pending, would actually have strengthened Patou’s hand. Without suggesting that the “lawsuit” justification may not be available in a more fitting case, we do not accept the district court’s conclusion that plaintiff’s desultory course of litigation had frozen defendant Patou into a state of artificial inactivity.

III.

If there were no more to this case than the district court’s finding that defendant owned the trademark rights to SNOB and thus had legitimately procured the bar against LeGalion’s product, we would simply reverse and remand for consideration of the proper remedies. However, the dismissal of plaintiff’s prior suit on essentially the same claims raises a serious res judicata problem.

Under F.R.Civ.P. 41(b), a dismissal for failure to prosecute an action “operates as an adjudication upon the merits,” unless the court specifies otherwise. In his 1958 order dismissing the first case brought by the plaintiff on this cause of action, Judge Herlands gave no indication that the dismissal should be without prejudice, and under normal circumstances we would have no alternative to holding that such a dismissal would have res judicata effect, see Costello v. United States, 365 U.S. 265, 286, 81 S.Ct. 534, 5 L.Ed.2d 551 (1961); A. B. Dick Co. v. Marr, 197 F.2d 498, 502 (2 Cir.), cert. denied, 344 U.S. 878, 73 S.Ct. 169, 97 L.Ed. 680 (1952); Nasser v. Isthmian Lines, 331 F.2d 124, 127-128 (2 Cir. 1964); Freedman v. American Export Isbrandtsen Lines, Inc., 451 F.2d 157 (3 Cir. 1971), cert. denied, 405 U.S. 992, 92 S.Ct. 1264, 31 L.Ed.2d 460 (1972). This would be so whether the suit were treated as being based on diversity of citizenship or federal question jurisdiction, Kern v. Hettinger, 303 F.2d 333, 340 (2 Cir. 1962); Penn v. Rinaldi, 323 F.2d 913 (2 Cir. 1963). Applying Rule 41(b) in this case presents several special problems, however. First, the district judge appeared at trial to be under the impression that Judge Herlands’ dismissal had been without prejudice. Counsel for plaintiff so asserted, and defense counsel did not contradict him. Since these facts suggest there may be evidence outside the face of the order plainly indicating that Judge Herlands intended the dismissal to be without prejudice, the district court should explore this question on remand.

A second problem is that plaintiff’s cause of action is based not on an isolated act by defendant, but rather, on a continuing course of conduct, or more precisely, nonconduct, starting before the first dismissal and continuing up to the present. Applying res judicata to claims involving continuing conduct over a long period of time presents difficulties at best. See Food Center, Inc. v. Food Fair Stores, Inc., 356 F.2d 775, 779-780 (1 Cir. 1966); Restatement (Second) of Judgments § 61.2(e). (Tent.Dr.No. 1, 1973). Here these difficulties are doubly vexing, first because the absence of an actual prior adjudication has deprived the court of the more precise tool of issue preclusion, and second because the central element in both cases was a request for declaratory relief. In effect, holding that the 1958 dismissal was with prejudice means that the 1955 request for a declaratory judgment must be treated as having been denied. There is understandably some reluctance to give broad effect to res judicata principles in that context, see Restatement (Second) of Judgments § 76, comments c, e; Vestal, Res Judicata/Preclusion, v-410-11 (1969); Developments in the Law — Res Judicata, 65 Harv.L.Rev. 818, 881-82 (1952). In this case, even though there was no actual finding in the first suit that Patou’s conduct was consistent with trademark ownership, a rigid application of res judicata would confer permanent protection on Patou’s trademark maintenance program. On the other hand, to immunize this class of cases altogether from the operation of res judicata would permit plaintiffs to bring any number of harassing suits, each of which could be dropped prior to judgment. Since the doctrine is intended to serve the aims of fairness and efficient judicial administration, it need not be applied mechanically where those ends would not be served. As we have noted on several occasions, res judicata principles, if applied inflexibly, can at times result in unwarranted hardship. International Railways of Central America v. United Fruit Co., 373 F.2d 408, 419 (2 Cir.), cert. denied, 387 U.S. 921, 87 S.Ct. 2031, 18 L.Ed.2d 975 (1967), quoting 1B Moore, Federal Practice |f0.410[2], at 1169 (2d ed. 1965); Desrosiers v. American Cyanamid Co., 377 F.2d 864, 871 (2 Cir. 1967). See also Spilker v. Hankin, 88 U.S.App.D.C. 206, 188 F.2d 35, 39 (1951); Cleary, Res Judicata Reexamined, 57 Yale L.J. 339, 349-50 (1948); IB Moore, Federal Practice jfjf 0.405 [11], [12]. This may be a case in which a rigid application of res judicata is not warranted, even though it falls within the technical reach of the doctrine. On remand, the district court should consider any changes in Patou’s conduct between the two suits, see Restatement (Second) of Judgments § 61, comment /, any actual prejudice that Patou might have suffered because of the delay in adjudication of the issue in this case, the effect, if any, of the expiration of Patou’s registration, and the public interest considerations weighing in favor of or against the application of res judicata.

If, after resolving the various factual questions relating to jurisdiction and res judicata, the court determines that Le-Galion can maintain this action, it should consider what relief should be ordered in light of plaintiff’s requests and the status of Patou’s new application for registration. We reverse and remand for further proceedings in accordance with this opinion.

      . Plaintiff stipulated to the dismissal of the action as to defendant Stramiello, Collector of Customs at the Port of New York, prior to trial. The U. S. Attorney agreed that if the court should determine that plaintiff was the rightful owner of the SNOB trademark, Stramiello would do nothing to prevent the importation of plaintiff’s perfumes.

      . This reads in relevant part:
      No article of imported merchandise which shall copy or simulate a trade-mark registered in accordance with the provisions of this chapter . . . shall be admitted to entry at any customhouse of the United States.
      A parallel provision in the Tariff Act of 1930,19 U.S.C. § 1526(a), provides:
      It shall be unlawful to import into the United States any merchandise of foreign manufacture if such merchandise, or the label, sign, print, package, wrapper, or receptacle, bears a trademark owned by a citizen of, or by a corporation or association created or organized within, the United States, and registered in the Patent Office . . . and if a copy of the certificate of registration of such trade-mark is filed with the Secretary of the Treasury ....

      . Defendant Patou urges that its sales were in fact somewhat greater — as much as 10 bottles per year! While this would make no significant difference, we accept the district court’s finding that Patou “produced and sold in the United States in a very limited amount a perfume called SNOB . . . with total sales from 1951 to 1969 of 72 bottles .... Seventeen bottles were sold to retail stores between 1969 and 1971.” 353 F.Supp. at 292.

      . Plaintiff has not pressed on appeal the claim in its complaint that it should be declared the owner of the SNOB trademark. It is well settled that foreign use is ineffectual to create trademark rights in the United States, Calimafde, Trademarks and Unfair Competition, § 4.10 (1970).

      . This court has long held that the Lanham Act does not provide jurisdiction or a substantive remedy for general common law unfair competition claims, American Automobile Ass’n, Inc. v. Spiegel, 205 F.2d 771 (2 Cir. 1953), cert. denied, 346 U.S. 887, 74 S. Ct. 138, 98 L.Ed. 391 (1953); Vanity Fair Hills, Inc. v. T. Eaton Co., Ltd., 234 F.2d 633 (2 Cir. 1956), cert. denied, 352 U.S. 871, 77 S.Ct. 96, 1 L.Ed.2d 76 (1956). The Eighth and Ninth Circuits have read § 44 of the Act, 15 U.S.C. § 1126, very broadly, interpreting it as providing a federal remedy, and through § 39, 15 U.S.C. § 1121, federal jurisdiction in any unfair competition suit, Stauffer v. Exley, 184 F.2d 962 (9 Cir. 1950); Pagliero v. Wallace China Co., 198 F.2d 339 (9 Cir. 1952); Iowa Farmers Union v. Farmers’ Educ. & Coop. Union, 247 F.2d 809 (8 Cir. 1957). The majority of the circuits have followed this circuit’s view, Allen v. Barr, 196 F.2d 159, 161 (6 Cir. 1952); L’Aiglon Apparel, Inc. v. Lana Lobell, Inc., 214 F.2d 649 (3 Cir. 1954); Royal Lace Paper Works, Inc. v. Pest-Guard Prods., Inc., 240 F.2d 814 (5 Cir. 1957); see Developments in the Law — Trade-Marks and Unfair Competition, 68 Harv.L.Bev. 814, 878-81 (1955).
      Where the Lanham Act is not the source of the right sued upon, state law applies. Artype, Inc. v. Zappulla, 228 F.2d 695 (2 Cir. 1956); Maternally Yours, Inc. v. Your Maternity Shop, Inc., 234 F.2d 538, 540-541 n. 1 (2 Cir. 1956). In this case, however, the choice of law presents no real problems, since trademark use is accepted as a general common law requirement, with no discernible modulations from jurisdiction to jurisdiction. Federal registration similarly does not alter the basic common law requirement of use. The Lanham Act does not create the trademark right; it only recognizes the right acquired through use, Radio Shack Corp. v. Radio Shack, Inc., 180 F.2d 200 (7 Cir. 1950); Vandenburgh, Trademark Law & Procedure § 2.10 (2d ed. 1968).

      . In its pretrial memorandum plaintiff attempted to bring its damages claim under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), on the ground that defendant had “falsely represented that it is possessed of the right to prevent the importation into the United States of the plaintiff’s perfumes.” That effort seems wide of the mark. Section 43(a) is intended to reach false advertising violations, not false registration claims. L’Aiglon Apparel, Inc. v. Lana Lobell, Inc., supra, 214 F.2d 649; Alum-A-Fold Shutter Corp. v. Folding Shutter Corp., 441 F.2d 556, 557 (5 Cir. 1971).

      . If, for some reason not now apparent, diversity of citizenship should prove unavailable as a jurisdictional basis, the district court would have to consider whether to exercise pendent jurisdiction over the common law claims on the basis of the damages claim.

      . Plaintiff stated in its pretrial memorandum that Patou had reapplied for the SNOB registration through its parent corporation. As of late 1972, according to plaintiff, the application was still pending. If the registration has since been granted, the district court should consider permitting LeGalion to amend its complaint to include a claim based on the new registration, in order to facilitate disposing of this ease as efficiently as possible.

      . Appellee’s related argument that it has not legally abandoned the SNOB trademark does not merit much attention. The issue of abandonment arises only if the defendant has previously acquired rights in the trademark. Essentially plaintiff’s challenge here is that Patou has never established any enforceable rights in the SNOB mark and thus has nothing to abandon.

      . The cases excusing limited use for legitimate business reasons provide no aid to ap-pellee. A trademark maintenance program obviously cannot in itself justify a minimal sales effort, or the requirement of good faith commercial use would be read out of trademark law altogether.

      . Determining what constitutes sufficient use for trademark ownership purposes is obviously a case-by-case task. Lest our opinion be taken as cutting more broadly than we intend, it is important to note expressly that the balance of the equities plays an important role in deciding whether defendant’s use is sufficient to warrant trademark protection, cf. Chandon Champagne Corp. v. San Marino Wine Corp., 335 F.2d 531, 534-535 (2 Cir. 1964). The fact that defendant’s conduct has barred a foreign competitor from marketing a well-established product in this country, without promoting any compensating public interest, requires close scrutiny of the propriety of defendant’s “use.”

      . Judge Herlands’ dismissal order made reference to a prior order setting out the conditions of the dismissal. If that earlier order provided that the dismissal would be without prejudice, then that effect should be given to the dismissal. In addition, the district court should not hold the dismissal to be an adjudication on the merits if the local rule under which Judge Herlands dismissed the action provided otherwise. United States v. Thomson, 114 F.Supp. 874 (S.D.N.Y.1953); Burns Mortgage Co. v. Stoudt, 2 F.R.D. 219 (E.D.Pa.1942); contra, King v. Mordowanec, 46 F.R.D. 474 (D.R.I.1969). While the current version of the local rule dealing with dismissals for want of prosecution is silent on the question, General Rule 23(a), Southern District of New York, several districts have provided that such dismissals should be without prejudice, see Note, Involuntary Dismissal for Disobedience or Delay: The Plaintiff’s Plight, 34 U.Chi.L.Rev. 922, 925 n. 26 (1967). Although Rule 41(b) was designed in part to avoid the need' to search the record in every case for evidence of the judge’s intention, see Weissinger v. United States, 423 F.2d 795, 798 (5 Cir. 1970) (en banc), it would be unduly harsh to hold that the dismissal here was with prejudice without giving the district court an opportunity to evaluate the very real possibility that Judge Herlands intended otherwise.