author: RONEY, Circuit Judge:

text:
    BANK of the SOUTHWEST, Plaintiff-Appellant, v. NATIONAL SURETY COMPANY, Defendant-Appellee.
    No. 72-1858.
    United States Court of Appeals, Fifth Circuit.
    April 6, 1973.

      Edwin L. Davis, Dallas, Tex., for plaintiff-appellant.
    James A. Knox, Charles J. McGuire, Dallas, Tex., for defendant-appellee.
    Before GEWIN, SIMPSON and RO-NEY, Circuit Judges.
   RONEY, Circuit Judge:

Plaintiff Bank seeks recovery under a Bankers Blanket Bond for losses sustained on three collateral loan transactions. The Court ruled as a matter of law that none of the collateral pledged for the loans was forged, counterfeit, or stolen within the Bond’s meaning and that the coverage for loss of money through false pretenses did not apply to these loan transactions. The Court granted the defendant bonding company summary judgment as to one loan and judgment notwithstanding a jury verdict as to the other two. We affirm.

The facts are undisputed. In November and December, 1969, Lou Levine represented himself as a wholesale automobile dealer and received from the Bank the following loans, with the alleged security and instruménts noted:

Amount of Loan Alleged Security Instrument Surrendered

$7,000 1970 Cadillac Tax Collector’s Receipt for Title Application (“white slip”)

$6,000 1969 Continental 1. License Receipt 2. Certificate of Title 3. Application for Corrected Texas Certificate of Title

$24,000 1,000 shares of Resalab, Inc. 1. Goodbody & Co. Confirmation Slip 2. Trust Receipt 3. Collateral Pledge 4. Assignment and Power of Attorney

Shortly after the loans were made, plaintiff discovered that these instruments did not give it any rights to the alleged security. Levine never delivered the stock to the Bank as agreed, but converted it to his own use. When the loans were not paid; the Bank suffered losses in the amount of $37,000.

Plaintiff had obtained from National Surety Corporation a standard Bankers Blanket Bond for indemnification against certain losses. National Surety, alleging that the Bank’s losses were not covered by the Bond, refused indemnification. Plaintiff argues that indemnification was required under Insuring Agreements B, C, and E. Coverage -B generally covers loss of property from bank premises through robbery, burglary, theft and false pretenses. Coverage C covers loss of property through robbery, larceny, theft, or otherwise while it is in transit in custody of any person acting as a messenger. Coverage E covers losses by any securities, documents or other written instruments counterfeited or forged as to signature or stolen.

Contrary to plaintiff’s contention that Agreement B provides indemnification for all of the losses because the money was obtained from the Bank on false pretenses, the District Court correctly held that such coverage was made inapplicable by the “loan exclusion clause.” This clause specifically excludes from indemnification under Coverage B any

(e) loss resulting from the complete or partial non-payment of, or default upon,
(1) any loan or transaction in the nature of, or amounting to, a loan made by or obtained from the Insured . . . whether procured in good faith or through trick, artifice, fraud or false pretenses unless such loss is covered under Insuring Agreements (A), (D), or (E).

Since the money was obtained from the Bank in the form of loans, Insuring Agreement B is inapplicable even if the loans were obtained under false pretenses. Maryland Casualty Co. v. State Bank & Trust Co., 425 F.2d 979 (5th Cir. 1970); East Gadsden Bank v. United States Fidelity & Guaranty Co., 415 F.2d 357 (5th Cir. 1969).

The contention that Insuring Agreement C covers the loss from the $24,000 loan against Resalab stock is without merit. The theory that Levine was acting as the Bank’s “messenger” within the meaning of Coverage C lacks any support in the facts. There is no evidence that the stock was in transit to the Bank when Levine converted it to his own use. In any event, had Levine delivered the stock, he would have been acting on his own behalf, not as a messenger within the meaning of this provision of the Bond.

The provision of Insuring Agreement E insuring against losses by written instruments “forged as to signatures” does not cover the “white slip” delivered to the Bank on the Cadillac loan. We have previously held that, to come within the forgery protection of Coverage E, it is essential that the document have a “non-genuine signature.” See American National Bank & Trust Co. of South Pasadena v. Fidelity & Casualty Co. of New York, 431 F.2d 920 (5th Cir. 1970). The “white slip” contained no actual or facsimile signature, and the typed name of an official served not as a signature, but as an identification of the Dallas Tax Assessor/Collector.

As to the claim that the instruments delivered to the Bank on the Continental and Cadillac loans were “counterfeit” or “stolen,” under Coverage E of the Bond, the District Court first submitted this issue to a jury. After the jury found on special interrogatories that such instruments were counterfeit and stolen, however, the Court entered a judgment for defendant notwithstanding the verdict. On the undisputed facts, we think the Court correctly determined that the instruments were neither counterfeit nor stolen within the meaning of Coverage E.

“Counterfeit” is specifically defined in the subject Bond:

The word “counterfeited” as used in this Insuring Agreement shall be deemed to mean only an imitation of a security document or other written instrument . . . which is intended to deceive and to be taken for an original.

The courts have often accepted this definition and held that there must be or must have been original instrument that the alleged counterfeit document attempts to imitate. Capitol Bank of Chicago v. Fidelity & Casualty Co. of N. Y., 414 F.2d 986 (7th Cir. 1969); Exchange Nat’l Bank of Olean v. Ins. Co. of North America, 341 F.2d 673 (2d Cir. 1965), cert. denied, 382 U.S. 816, 86 S.Ct. 37, 15 L.Ed.2d 63; State Bank of Poplar Bluff v. Maryland Cas. Co., 289 F.2d 544 (8th Cir. 1961).

To recover for a loss on any documents which are “stolen,” within the meaning of Coverage E of the Bond, the Bank must be in a situation where it could be required to give up the allegedly stolen document to the rightful owner. See Maryland Casualty, supra.

$7,000 Cadillac Loan. The alleged security for this loan was the 1970 Cadillac, and the instrument surrendered was a Tax Collector’s Receipt for Title Application No. V-460376 (“white slip”). It was stipulated that the genuine Application No. V-460376 had been issued not to Levine, but to Arturo Rodriguez, and described not a 1970 Cadillac, but a 1969 Mercury. Thus, the “white slip” held by plaintiff was not an imitation of an authentic original document and was not “counterfeit” within the coverage of Insuring Agreement E. Nor was there any evidence at trial that Levine stole the “white slip.” In any event, since it did not have to be returned to a true owner, this document was not “stolen” within the Agreement’s meaning.

$6,000 Continental Loan. The alleged security for this loan was the 1969 Lincoln Continental, and the instruments surrendered were a License Receipt No. RRP-971, a Certificate of Title No. 51492028, and a related Application for Corrected Texas Certificate of Title. Levine had previously sold this automobile and delivered his original title certificate to the purchaser. He then obtained the Title Certificate given to the Bank by falsely swearing to the Texas Highway Department that he had lost his original copy. Both the License Receipt and the Title Certificate were authentic, albeit the product of fraudulent misrepresentations to the State authorities. Thus, neither could have been “counterfeit.”

Neither can any loss suffered from the Continental loan be covered by application of Insuring Agreement E’s provisions for stolen documents. The procurement of the License Receipt and Title Certificate by fraud do not render them “stolen” since they do not have to be returned to a true owner. Such instances were specifically excluded from coverage in the Bond’s provisions for loans procured by “trick, artifice, fraud or false pretenses.” In Union Banking Co. v. United States Fidelity & Guaranty Co., 4 Ohio App.2d 397, 213 N.E.2d 191 (Ohio App.1965), a virtually identical scheme and identical standard Bond were considered, and the Ohio Court held that, as a matter of law, there was no coverage under Insuring Agreement E.

Affirmed.


source: Caselaw Access Project

author: McWILLIAMS, Circuit Judge.

license: Public Domain

text:
    COMMANDER LEASING CO., a partnership, et al., Plaintiffs-Appellants, v. TRANSAMERICA TITLE INSURANCE COMPANY, a California corporation, et al., Defendants-Appellees.
    No. 72-1171.
    United States Court of Appeals, Tenth Circuit.
    Argued Sept. 21, 1972.
    Decided April 6, 1973.

      Dale Tooley, Denver, Colo. (Hugh J. McClearn, Van Cise, Freeman, Tooley & McClearn, Denver, Colo., on the brief), for plaintiffs-appellants.
    Patrick M. Westfeldt, Denver, Colo. (Haradon Beatty, Denver, Colo., and Holland & Hart, Aspen, Colo., on the brief), for defendants U.S. Life Title Ins. Co. of Dallas and Lawyers Title Ins. Corp.
    Aldo G. Notarianni, Denver, Colo. (Stephen Susman, Denver, Colo., Fulbright, Crooker & Jaworski, Houston, Tex., on the brief), for defendant Stewart Title Ins. Co.
    Edward B. Towey, Denver, Colo. (James J. Zak, Denver, Colo., on the brief), for defendants Title Ins. Co. of Minnesota and Land Title Guarantee Co.
    William H. Orrick, San Francisco, Cal. (Orrick, Herrington, Rowley & Sutcliffe, San Francisco, Cal., Richard M. Davis, Robert H. Harry, Donald E. Phillipson, and Davis, Graham & Stubbs, Denver, Colo., on the brief), for defendant Transamerica Title Ins. Co.

      Charles H. Haines, Jr., Grant, Shafroth, Toll & McHendrie, Denver, Colo., and John T. Loughlin, John C. Christie, Jr., Bell, Boyd, Lloyd, Haddad & Burns, Chicago, Ill., for defendant Chicago Title Ins. Co.
    Christian J. Allison, Denver, Colo., for defendant Pioneer Nat. Title Ins. Co.
    Edward I. Haligman, Atler, Haligman & Atler, Denver, Colo., for defendant Denver Abstract Co., d/b/a Titles, Inc.
    Hugh A. Burns, Dawson, Nagel, Sherman & Howard, Denver, Colo., for defendants American Title Ins. Co., First American Title Ins. Co., St. Paul Title Ins. Corp., and Standard Title Ins. Co.
    Francis S. Mancini and Charles J. Hafertepen, Denver, Colo., for defendant Commercial Standard Ins. Co.
    Before LEWIS, Chief Judge, and JONES and McWILLIAMS, Circuit Judges.

       Of the Fifth Circuit, sitting by designation.

   McWILLIAMS, Circuit Judge.

The issues here to be resolved are whether the “business of title insurance” is the “business of insurance” within the meaning of that phrase as used in the McCarran-Ferguson Act and whether the State of Colorado “regulates” the business of title insurance to the end that by reason of the McCarran-Ferguson Act the Sherman and Clayton Acts are not applicable to certain title insurance companies doing business in Colorado. The McCarran-Ferguson Act will hereinafter be referred to as the McCarran Act.

The trial court in granting the defendant’s pre-trial motions to dismiss held that the business of title insurance was the “business of insurance” and that the State of Colorado did regulate the title insurance business to the end that under the McCarran Act a private antitrust action would not lie against certain title insurance companies doing business in Colorado. We agree with this holding.

The plaintiffs in this proceeding are Commander Leasing Co., a partnership, and Richard B. Eichenberger and Hilda J. Eichenberger, individually and on behalf of others similarly situated. Commander alleged that it had purchased title insurance from one of the defendants, namely, Transamerica, for six years. The Eiehenbergers alleged that they had purchased title insurance both from Transamerica and one of the other defendants, namely, Lawyers Title Insurance Corporation.

Two of the fourteen defendants, namely, Denver Abstract Co., doing business as Titles, Inc., and Land Title Guarantee Company, are Colorado corporations which serve as local agents for foreign title insurance companies and are otherwise engaged in what plaintiffs characterize as the “business of providing title proof and assurance.”

The remaining twelve defendants are title insurance companies formed under the laws of states other than Colorado but qualified to do business in Colorado and which, according to the plaintiffs, are engaged in the “business of providing title proof and assurance and abstracting.” We note that throughout their complaint the plaintiffs steer away from using the word “insurance” in describing the defendants’ activities and, no doubt for euphemistic reasons, seem to prefer to use the word “assurance.” This distinction is in our view of no great import.

Jurisdiction is based on 15 U.S.C. §§ 15 and 26, the plaintiffs seeking treble damages and injunctive relief. The action is sought to be maintained as a class action under Fed.R.Civ.P. 23(a), and in this regard it is alleged that “since July 9, 1965, thousands of persons have purchased title proof and assurance and abstracting from defendants in connection with real estate transactions within the State of Colorado * * *.”

By way of general allegations, the plaintiffs aver that prior to 1950 abstracts of title, certified to the date of each transaction by an abstract company, were utilized in connection with proof of title in real estate transactions in Colorado, but that since that time the use of abstracts of title has sharply declined and the “use of so-called title insurance as title proof and assurance” has sharply increased. In this same general connection it is alleged that • the abstract companies have now to a large extent been purchased or acquired by the title insurance companies, with certain of the defendants having thus acquired numerous abstract companies. It is then generally alleged that the defendants now have “a monopoly of title information and have conspired to fix uniform and excessive prices for abstracting and for so-called title insurance, to limit competition and to retire abstracts of title in favor of so-called title insurance.” The plaintiffs go on to allege that the “title proof and assurance” sold by defendants is not “insurance” and is not regulated by state law.

The complaint then sets up five claims for relief. We shall refer to each. Before doing so, we note that underlying the entire complaint is plaintiffs’ belief that in their purchase of title insurance from the defendants they have been charged a noncompetitive, monopolistic price. So, regardless of the fact that the complaint sets up five separate claims, and regardless of the further fact that the complaint asks for injunctive relief as well as treble damages, plaintiffs’ constant target is the allegedly noncompetitive and excessive charge made by the several defendants for their title insurance.

Plaintiffs’ first claim is directed against all defendants and in essence is a claim for price fixing based on § 1 of the Sherman Act, 15 U.S.C. § 1. A bit more specifically, plaintiffs allege in this claim that the defendants have conspired to fix, and have in fact fixed, arbitrary and noncompetitive charges for the issuance of their title insurance policies.

Plaintiffs’ second claim is also directed against all defendants and is based on § 2 of the Sherman Act, 15 U.S.C. § 2, charging that the defendants through their acquisitions of abstract companies and otherwise have conspired to obtain a monopoly in “title proof and assurance and abstracting within the State of Colorado” for the purpose of eventually terminating the use of abstracts of title in favor of title insurance. It is further alleged that as a direct result of defendants’ monopolistic activities plaintiffs and their class have been overcharged for title insurance.

Plaintiffs’ third claim is likewise directed against all defendants and is based on the Robinson-Patman Act, 15 U.S.C. § 13, for alleged price discrimination. In this regard, it is alleged that the defendants have sold their title insurance to plaintiffs at a so-called “regular rate,” which was substantially greater than the so-called “subdivider rate” charged others.

Plaintiffs’ fourth claim seeks relief from all defendants and is based on Colorado statutory law prohibiting illegal restraint of trade and unlawful conspiracy. CRS 55-4-1, 2 and 8. Again, plaintiffs allege that they have been overcharged as a result of defendants’ actions.

Plaintiffs’ fifth and final claim is against one defendant only, namely, Transamerica Title Insurance Company, and is based on Transamerica’s allegedly unlawful acquisition in Colorado of ab-tract companies and title insurance companies in violation of § 7 of the Clayton Act and § 2 of the Sherman Act, as well as in violation of CRS 55-4-1 et seq. Again, plaintiffs’ complaint is that as a result of Transamerica’s activities they, the plaintiffs, have been overcharged in their purchase of title insurance.

The defendants by either motions to dismiss or by answer raised the issue as to whether by virtue of the McCarran Act, 15 U.S.C. §§ 1011-1015, the federal antitrust laws are applicable to the business of title insurance in Colorado.

As indicated, the trial court, after full argument and briefing of the matter, granted the several motions to dismiss. In so doing, the trial court reasoned as follows: (1) Title insurance is “insurance” within the meaning of that word as used in the McCarran Act; (2) the State of Colorado has “not only” regulated the title insurance business, but has done so in “great detail”; (3) therefore, insofar as the plaintiffs’ claims are based on federal antitrust acts, which included plaintiffs’ first, second, third and fifth claims, such are “subject to the exclusion or are barred by the McCarran Act”; and (4) plaintiffs’ fourth claim based on an alleged violation of the Colorado antitrust and restraint of trade laws should be dismissed for lack of pendent jurisdiction.

The trial court in entering its judgment dismissing the action did so without prejudice to the right of the plaintiffs, or any of them, to file an amended complaint based on alleged violations of federal and state antitrust laws in connection with “abstracting service furnished separate and apart from the issuance of a title [insurance] policy * * (Emphasis added.) In this regard, the trial court viewed the complaint insofar as it related to abstracting services as one aimed at “abstracting service furnished in connection with the issuance of a title insurance policy” and opined that any abstracting service furnished by the defendants leading up to the issuance of a title insurance policy as not being a “separate business,” but a “condition precedent” to the issuance of- the title policy. This particular matter will be examined in more detail later. It is sufficient now to simply note that it was for this reason that the trial court’s judgment preserved the right to plaintiffs to file an amended complaint based on federal and state antitrust violations in connection with the furnishing of abstracting services not connected with the issuance of a title insurance policy, such activity in the trial court’s opinion not being covered by the McCarran Act. No such amended complaint was ever filed and the plaintiffs now appeal the dismissal of their action.

In this court, the plaintiffs present six points: (1) The defendants’ activities, and particularly their charge for processing and examining evidence of title, do not constitute the “business of insurance” and in any event such activities are not regulated by the State of Colorado; (2) any purported regulation by the State of Colorado is a sham and mere pretense, therefor the McCarran Act is inapplicable; (3) if not a sham and mere pretense, the purported regulation by the State of Colorado is not “effective” or “meaningful”; (4) in no event is plaintiffs’ fifth claim barred by the McCarran Act; (5) the McCarran Act is not available to two of the fourteen defendants, namely, the two domestic corporations serving as agents for foreign title insurance companies; and (6) the trial court should have entered final orders with respect to pending settlements. Before considering each of these matters, a bit of historical background may help.

In 1868 the Supreme Court in Paul v. Virginia, 75 U.S. 168, 19 L.Ed. 357 (1868), held that the issuance of a policy of insurance, even though the parties thereto were domiciled in different states, was not interstate commerce, but only a simple contract of indemnity against loss and subject to regulation by the state. In line with this pronouncement it was thereafter generally assumed that the Sherman Act and other federal antitrust laws were inapplicable to the insurance business. However, that assumption proved to be erroneous when the Supreme Court in United States v. South-Eastern Underwriters Association, 322 U.S. 533, 64 S.Ct. 1162, 88 L.Ed. 1440 (1944), held that a fire insurance company which conducted a substantial part of its business across state lines was engaged in interstate commerce and subject to the Sherman Act. The reaction of Congress to the South-Eastern decision was the prompt enactment of the McCarran Act, set forth above. The effect of this Act was to permit continued regulation by the several states of the business of insurance to the end that such business was exempt from the provisions of the Sherman and Clayton Acts, including the Clayton Act’s 1936 amendments, known as the Robinson-Patman Act,- to the extent that such business was regulated by state law.

It is first argued by plaintiffs that the trial court erred in holding that the “business of title insurance” was included within the meaning of the phrase “business of insurance” as the latter is used in the McCarran Act. In support of this phase of their argument, counsel zeroes in on the fact that when the defendants issue a policy of title insurance only a part of the fee charged therefor is a “premium” charge, with the balance of the fee constituting a so-called “service charge.” For illustrative purposes, it is said that the “regular rate” which all of the defendants charge for issuance of a title insurance policy in the amount of $5,000 is $75, with only $14 of that amount representing a so-called premium charge, and the balance thereof, namely, $61, being a service charge covering the expense incurred by the title insurance company in connection with “procuring and examining evidence of title” which precedes the issuance of any title insurance policy. Like the triai court, we are of the view that the business of title insurance cannot be thus fragmented in the manner sought by counsel.

In United States v. Home Title Insurance Company, 285 U.S. 191, 52 S.Ct. 319, 76 L.Ed. 695 (1932), the Supreme Court, in an admittedly different context, held that a title insurance company was an “insurance company.” In so holding the Court recognized that “preliminary” to the issuance of a title insurance policy the title insurance company prepared abstracts and conducted an examination of the title and that its fee for a title insurance policy was based on a scale dependent on the face amount of the policy and “included fees for examinations, searches, and other sources incident to the transaction.”

Similarly, in Real Estate Title Ins. Co. v. District of Columbia, 82 U.S.App.D.C. 170, 161 F.2d 887 (1947), it was held that a title insurance company was an insurance company and in so doing rejected the argument that a title insurance company was a mere title examiner. In thus holding, it was observed that the business of the title insurance company there under consideration consisted solely of issuing either “certificates of title” or “title policies” to real estate, plus “such further incidental transactions as relate to these main objectives.”

SEC v. National Securities, Inc., 393 U.S. 453, 89 S.Ct. 564, 21 L.Ed.2d 668 (1969), which will be referred to in more, detail later, has bearing on this particular phase of the controversy. In that case, the Supreme Court indicated that the fixing of insurance rates was a part and parcel of the “business” of insurance and the Court then went on to state that “other activities of insurance companies [which] relate so closely to their status as reliable insurers * * * must be placed in the same class.” Examination of evidence of title preparatory to issuance of a title insurance policy would certainly seem to fall easily into this latter category.

Our attention has not been directed to any case where the business of title insurance has been held to constitute the business of insurance within the meaning of that phrase as used in the McCarran Act. However, based on the foregoing authority, we agree that title insurance is insurance as that word is used in the McCarran Act, and our conclusion is in nowise altered by the fact that prior to the issuance of a title insurance policy the defendants make an examination of title and include in the rate ultimately charged the purchaser of such insurance a charge therefor.

The McCarran Act exempts the “business of insurance” from the antitrust provisions of the Sherman and Clayton Acts if such be regulated by the state wherein the alleged violations occurred. We must now turn to Colorado law to ascertain whether the defendants are regulated in that state.

In 1969, the Colorado Legislature enacted The Title Insurance Code of Colorado which now appears as a separate article in the chapter on insurance. CRS 72-26-1 et seq. By this enactment the State brought together in one place its regulation of both domestic title insurance companies and foreign title insurance companies doing business within the State. This particular article provides for what appears to us as a rather comprehensive set of regulations for title insurance companies and specifically provides that title insurance rates shall be regulated in the manner provided for regulation of casualty and surety insurance as provided for in CRS 72-12-1 et seq.

Prior to 1969, the provisions of CRS 31-12-1, et seq., regulated domestic title and guaranty companies with such companies being subject to regulation by the State Bank Commissioner. Prior to 1969, foreign title insurance companies were subject to the rate regulations contained in CRS 72-12-1 et seq.

Both domestic and foreign title insurance companies are and have been subject to the general regulatory powers vested in the State Insurance Commissioner by the provisions of CRS 72-1-1 et seq. The foregoing Colorado statutes directly regulate the business of title insurance.

To round out the picture, Colorado has enacted statutes relating to unfair methods of competition in the business of insurance which are found in CRS 72-14-1 et seq. Finally, the State of Colorado has an unfair practices act and an illegal restraint of trade act which are applicable to the business of title insurance. CRS 55-2-1 et seq. and CRS 55-4-1 et seq. Action under these particular statutes maybe instituted by the State for injunctive relief or by private parties who have been injured for damages. We do not deem it necessary to further elaborate in this regard. Suffice it to say, we agree fully with the trial court’s belief that the “State of Colorado not only has regulated the title insurance business but has done so in great detail.”

In their complaint, the plaintiffs have characterized the State of Colorado’s purported regulation of the title insurance business as a “mere sham and a pretense” and not affording “effective” and “meaningful” regulation. Such represents an effort to bring the plaintiffs within certain language in Federal Trade Commission v. National Casualty Co., 357 U.S. 560, 78 S.Ct. 1260, 2 L.Ed.2d 1540 (1958), which would indicate that the McCarran Act would not bar federal regulation when the state regulation was a “mere pretense.” However, plaintiffs’ conelusory allegation of “pretense and sham” does not stand up when the aforementioned Colorado regulatory statutes are examined.

In this general connection, language appearing in Prudential Insurance Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342 (1946), is appropos. In that case, the Supreme Court in discussing the McCarran Act comments as follows :

“Obviously Congress’ purpose was broadly to give support to the existing and future state systems for regulating and taxing the business of insurance. This was done in two ways. One was by removing obstructions which might be thought to flow from its own power, whether dormant or exercised, except as otherwise expressly provided in the Act itself or in future legislation. The other was by declaring expressly and affirmatively that continued state regulation and taxation of this business is in the public interest and that the business and all who engage in it ‘shall be subject to’ the laws of the several states in these respects.
“Moreover, in taking this action Congress must have had full knowledge of the nation-wide existence of state systems of regulation and taxation; of the fact that they differ greatly in the scope and character of the regulations imposed and of the taxes exacted ; and of the further fact that many, if not all, include features which, to some extent; have not been applied generally to other interstate business. Congress could not have been unacquainted with these facts and its purpose was evidently to throw the whole weight of its power behind the state systems, notwithstanding these variations.” (Emphasis added.)

Ohio AFL-CIO v. Insurance Rating Board, 451 F.2d 1178 (6th Cir. 1971), cert. denied, 409 U.S. 917, 93 S.Ct. 215, 34 L.Ed.2d 180 (1972), is also helpful in resolution of the present controversy. That ease involved a suit for injunctive relief and treble damages for violation of the Sherman Act based on the fixing of prices for automobile insurance premiums. The trial court dismissed the action for lack of jurisdiction over the subject matter under the McCarran Act. In upholding this action, the Sixth Circuit rejected the claim that the Ohio scheme of regulation was “deficient,” with the following comment:

“An ideal type of regulation may possibly envision the removal of the alleged deficiencies in the Ohio statutes referred to by the appellant. Yet the question before us is not whether the Ohio method of regulation compares favorably with the regulation of other states, or whether it is an ideal manner in which to regulate the business of insurance. We are confident that Congress in enacting the McCarran Act did not intend to impose a uniform standard of regulation upon all of the states. It is our view that the congressional intent was to leave to the judgment of each state the specifics of regulation which it should see fit to adopt. Suffice it to say at this point that we are confident that the comprehensive plan adopted by Ohio is fully adequate to meet the requirements of regulation contemplated by the McCarran Act.”

Application of the foregoing leads us to conclude that our present task is to determine only whether the State of Colorado has regulated the business of title insurance, and not to determine whether this regulation could be better and more effectively done.

Before considering plaintiffs’ next contention that under no circumstance can the McCarran Act bar their fifth claim, we would make further reference to SEC v. National Securities, Inc., supra. In that case, the SEC brought a 10(b) proceeding against an insurance company based on alleged misrepresentations made by the insurance company in connection with a proposed merger with another insurance company. The state there in question, namely, Arizona, had enacted certain statutes regulating the relationship between an insurance company and its shareholders. The trial court dismissed the proceeding on the basis of the McCarran Act and the Ninth Circuit affirmed. 387 F.2d 25 (9th Cir. 1967). In reversing, the Supreme Court had occasion to reexamine the McCarran Act and in so doing made the following pertinent comment:

“Given this history, the language of the [McCarran] statute takes on a different coloration. The statute did not purport to make the States supreme in regulating all the activities of insurance companies; its language refers not to the persons or companies who are subject to state regulation, but to laws ‘regulating the business of insurance.’ Insurance companies may do many things which are subject to paramount federal regulation; only when they are engaged in the ‘business of insurance’ does the statute apply. Certainly the fixing of rates is part of this business; that is what SouthEastern Underwriters was all about. The selling and advertising of policies * * * and the licensing of companies and their agents * * * are also within the scope of the statute. Congress was concerned with the type of state regulation that centers around the contract of insurance, the transaction which Paul v. Virginia held was not ‘commerce.’ The relationship between insurer and insured, the type of policy which could be issued, its reliability, interpretation, and enforcement — these were the core of the ‘business of insurance.’ Undoubtedly, other activities of insurance companies relate so closely to their status as reliable insurers that they too must be placed in the same class. But whatever the exact scope of the statutory term, it is clear where the focus was —it was on the relationship between the insurance company and the policyholder. Statutes aimed at protecting or regulating this relationship, directly or indirectly, are laws regulating the ‘business of insurance.’
“In this case, Arizona is concerning itself with a markedly different set of problems. It is attempting to regulate not the ‘insurance’ relationship, but the relationship between a stockholder and the company in which he owns stock. This is not insurance regulation, but securities regulation. It is true that the state statute applies only to insurance companies. But mere matters of form need not detain us. The crucial point is that here the State has focused its attention on stockholder protection; it is not attempting to secure the interests of those purchasing insurance policies. Such regulation is not within the scope of the McCarran-Ferguson Act.”

We do not read SEC v. National Securities, Inc., supra, as dictating a reversal of the judgment entered in the instant case, as has been suggested. In that case the holding was that the McCarran Act did not bar an action brought by the SEC under the Securities and Exchange Act against an insurance company which was seeking a merger with another insurance company and in its attempt to secure the merger was making misrepresentations and omissions of material facts in communications sent the shareholders in the company sought to be thus merged, notwithstanding the fact that the state there involved had state law regulating the relationship between insurance companies and their shareholders. In so holding, the Supreme Court noted that the contemplated merger of two insurance companies was not a part and parcel of the “business of insurance.” We are not here concerned with any merger problem and in our view it does not follow from SEC v. National Securities, Inc., supra, that the McCarran Act does not bar an action brought by a policyholder of title insurance against various title insurance companies based on an alleged overcharge for the policy thus purchased, the overcharge allegedly resulting from price fixing, price discrimination and monopolistic practices by the title insurance companies thus sued, assuming of course that the state in question regulates the business of title insurance. And, as indicated, we are of the view that the McCarran Act does bar such proceeding by a policyholder.

We shall next proceed to a consideration of plaintiffs’ contention that under no circumstance can the McCarran Act bar its fifth claim. As indicated, the fifth claim is directed against Transamerica only, and is grounded on Transamerica’s acquisition of stock and assets of abstract companies and other title insurance companies which was claimed to have been in violation of § 7 of the Clayton Act, 15 U.S.C. § 18, § 2 of the Sherman Act, 15 U.S.C. § 2, and CRS 55-4-1 et seq., and to have resulted in an overcharge to the plaintiffs for title insurance sold them by the defendants. So, the fifth claim, as is true with all of the claims, is tied directly into the charges made by the defendants for title insurance. And, as was stated in SEC v. National Securities, Inc., supra, “[c]ertainly the fixing of rates is part of this business [of insurance] * * *." Such being the case, we see no reason for handling the fifth claim any differently than the first three claims. - All claims stem from the rate charged for title insurance, the separate claims merely asserting that the overcharge resulted from either price fixing, or price discrimination or illegal and monopolistic practices, with the end result always being an alleged overcharge. So, regardless of the particular activity of the several defendants complained about in the separate claims, the entire complaint boils down to a charge that the plaintiffs paid a noncompetitive rate for title insurance purchased from the defendants. It is on this general basis that we believe the McCarran Act applies to all of the claims set forth in the complaint.

In sum, then, (1) in our view the business of title insurance is included in the phrase “business of insurance” and such is not altered by the fixed “service charge” included within the rate charged by defendants for their title insurance; (2) the charges made by these, defendants to plaintiffs and others for title insurance is a definite part of the business of insurance', (3) the State of Colorado has regulated the business of title insurance, both directly and indirectly; and (4) therefore the McCarran Act is a bar to the present proceeding which is grounded on an alleged overcharge by defendants for title insurance sold to the plaintiffs.

The plaintiffs also argue that the two Colorado corporations, namely, the Denver Abstract Company, doing business as Titles, Inc., and Land Title Guarantee Company, are not title insurance companies, as such, but only local agents for foreign title insurance companies, and that accordingly these two defendants should not in any event have been dismissed from the case. In this regard, the plaintiffs appear to contend that as to these two defendants their only complaint relates to abstracting services, and not the issuance of title insurance. As noted above, the trial court in its order of dismissal granted the plaintiffs the right to file an amended complaint grounded solely on antitrust violations in connection with abstracting services. This was not done. Hence, in the present posture of the case, we assume, as did the trial court, that the complaint against these two particular defendants is tied into the business of issuing title insurance. In applying the McCarran Act, we see no reason to distinguish between a principal and an agent. It would appear to us that an insurance agent, as well as an insurance company, is engaged in the “business of insurance.”

One phase of this controversy gives us some concern, but such relates to a matter that is not really before us. Certain of the defendants apparently entered into a settlement with the plaintiffs, with such settlements being given preliminary approval by the trial court. These settling defendants at the same time were actively pushing their respective motions to dismiss. Before the trial court made any final approval of these proposed settlement agreements, the motions to dismiss came on for hearing and, as indicated, were granted and a judgment of dismissal entered. In this court, the defendants who settled their cases ask us to affirm the dismissal order , but at the same time remand the matter to the trial court for its final approval of the settlement agreements. As indicated, we are of the firm view that the only matter before us at this time is the propriety of the trial court’s dismissal of the action based on the provisions of the McCarran Act.

Judgment affirmed.

      . “§ 1011. Declaration of policy

      “Congress declares that the continued regulation and taxation by the several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or, taxation of such business by the several States.”
      “§ 1012. Regulation by State law; Federal law relating specifically to insurance; applicability of certain Federal laws after June SO, 1948

      “(a) The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business.
      “(b) No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business' of insurance: Provided, That after June 30, 1948, the Act of July 2, 1890, as amended, known as the Sherman Act, and the Act of October 15, 1914, as amended, known as the Clayton Act, and the Act of September 26, 1914, known as the Federal Trade Commission Act, as amended, shall be applicable to the business of insurance to the extent that such business is not regulated by State law.”


author: AINSWORTH, Circuit Judge.

text:
    Oswald M. McCRORY and Rose Marie McCrory, Individually, etc., Plaintiffs-Appellants, v. Alce HALL, Defendant, Government Employees Insurance Company, Intervenor-Appellee.
    No. 72-3688
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    April 17, 1973.
    Vicent P. McCauley, Columbus, Ga., for plaintiffs-appellants.
    Howell Hollis, Columbus, Ga., for intervenor-appellee.
    John T. Laney III, William G. Scranton, Jr., Columbus, Ga., for Alce Hall.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

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

   AINSWORTH, Circuit Judge.

McCrory filed a claim with his insurer, Government Employees Insurance Company, to invoke the uninsured motorist provision in his policy after he was injured in an automobile accident with Hall which occurred on the Fort Benning Military Reservation in Georgia. Government Employees Insurance Company intervened in McCrory’s suit against Hall, as provided for by Georgia law, alleging that Hall was not an uninsured motorist at the time of the collision, and that, therefore, MeCrory’s uninsured motorist coverage was not activated. Government Employees .Insurance Company was granted summary judgment, from which McCrory appeals. The sole issue presented for review is whether the Georgia uninsured motorist statute requires that an automobile be insured by at least one liability policy in the face amount of no less than $10,000 to prevent its designation as an uninsured motor vehicle.

The question presented has not been interpreted before by the Georgia courts. We are asked to determine whether the Georgia uninsured motorist statute requires that a motorist involved in a collision in Georgia have an automobile liability policy in the face amount of at least $10,000, or whether it requires that we have an aggregate of $10,000 automobile liability insurance available, to preclude his being deemed an uninsured motorist. The question is precipitated by the fact that defendant Hall, a citizen of Louisiana, carried two automobile liability policies, issued in Louisiana, on his automobile, each in the face amount of $5,000. McCrory urges that the Georgia uninsured motorist statute requires a single policy for at least $10,000. Government Employees Insurance Company contends that the aggregate amount of $10,000 of automobile liability insurance satisfies the statute. Under McCrory’s interpretation, Hall’s automobile would be uninsured in the amount of $5,000 on each policy, and McCrory could recover a total of $10,000 from his own policy with Government Employees Insurance Company under the uninsured motorist provision. Under the insurance company’s interpretation, Hall’s automobile would not be an uninsured motor vehicle and McCrory’s uninsured motorist coverage would not be activated.

Two sections of the Georgia uninsured motorist statute are pertinent. The first, Ga.Code § 56-407.1 (a), sets forth the requirements for uninsured motorist coverage. The second, Ga.Code § 56-407.1(b), defines an uninsured motor vehicle. The pertinent statutory provisions are as follows:

§ 56-407.1 (a). No automobile liability policy or motor vehicle liability policy shall be issued or delivered in this State to the owner of such vehicle, or shall be issued or delivered by any insurer licensed in this State, upon any motor vehicle then principally garaged or principally used in this State, unless it contains an indorsement or provisions undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits exclusive of interests and costs which shall . . . be no less than (i) $10,000 because of bodily injury to or death of one person in any one accident, ....
. . . . . .
(b) As used in this section, the term “uninsured motor vehicle” means a motor vehicle . as to which there is (i) no bodily injury liability insurance and property damage liability insurance or as to which there is bodily injury liability insurance and property damage liability insurance with limits less than the amounts specified in subsection (a) of this section, ....

Sections (a) and (b) deal with two distinct classes of automobile owners or drivers. Section (a) prohibits issuance or delivery of an automobile liability policy in Georgia to the owner of a Georgia vehicle, or to one who principally uses the vehicle in Georgia, unless the policy contains uninsured motorist coverage for at least $10,000. This section establishes a state policy that Georgia drivers shall have available to them a minimum amount of automobile liability insurance compensation. Section (b), however, is directed to a different class of automobile owners or drivers: non-Georgia drivers, or those who have not complied or could not comply with section (a). By definition, an uninsured motorist has less than $10,000 liability insurance on his automobile. This section has within its purview out-of-state drivers who are beyond the reach of section (a). Thus while section (a) declares that “No automobile liability policy [emphasis added] . . . shall be issued or delivered in this State” unless it contains a minimum of $10,000 uninsured motorist coverage, section (b) defines an uninsured motor vehicle as one for which there is “no bodily injury liability insurance [emphasis added] and property damage liability insurance or as to which there is . insurance with limits less than the amounts specified in subsection (a) . . . .” We find nothing in the statute compelling the interpretation of “insurance,” as used in section (b), to mean “single policy of insurance.” The insurance must be within the amounts specified in subsection (a), not in the form specified by section (a). Section (a) is directed toward a class of insureds whose policies are subject to regulation by Georgia law. Section (b) speaks in terms of insureds outside the regulation of Georgia law. Thus section (b) insureds, or uninsureds, cannot be compelled to hold the type of policy Georgia requires for its own citizens.

A Georgia state court has interpreted the purpose of the uninsured motorist statute as follows:

... the purpose of the Uninsured Motorist statute is to place the insured in the same position as if the tortfeasor had the $10,000 minimum coverage. State Farm Mutual Auto. Ins. Co. v. Murphy, 226 Ga. 710, 714, 177 S.E.2d 257, 260 (1970).

We find that the purpose of the statute is to provide the Georgia insured accident victim with a guarantee of the availability of a minimum of $10,000 compensation. We do not find that under section (b) this minimum must be the face amount of a single policy, but, rather, under section (b), automobile liability policies may be aggregated to constitute the $10,000 minimum. Since Hall’s automobile liability policies aggregate to provide $10,000 coverage, Hall is not an uninsured motorist under the Georgia statute, and McCrory has no claim against Government Employees Insurance Company for uninsured motorist coverage.

Affirmed.

      . Ga.Code § 56-407.1 (d) provides that
      In eases where the owner or operator of any vehicle causing injury or damages be known, and either or both be named as defendants in any action for such injury or damages, a copy of such action and all pleadings thereto shall be served as prescribed by law upon the insurance company issuing the policy as though such insurance company were actually named as a party defendant. . . . [T] he insurance company issuing the policy shall have the right to file pleadings, and take other action allowable by law in the name of either.the known owner or operator or both or itself.

        See also State Farm Mutual Automobile Ins. Co. v. Brown, 114 Ga.App. 650, 152 S.E.2d 641 (1966), holding that intervention by the insurer who provided uninsured motorist coverage is procedurally proper.

      . Defendant Hall is not a party to this appeal.

      . It is plain on the face of § 56-407.1 (a) that policies issued or delivered pursuant to section (a) must provide uninsured motorist coverage for at least $10,000 in a single policy,


author: STALEY, Circuit Judge.

text:
    Leo ROSEN et al., Appellants, v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY. Leo ROSEN et al. v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY, Appellant. Morgan SWEENEY and Utility Co-Workers Association, Appellants, v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY. Morgan SWEENEY and Utility Co-Workers Association v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY, Appellant.
    Nos. 71-1893 to 71-1896.
    United States Court of Appeals, Third Circuit.
    Argued Sept. 26, 1972.
    Decided March 8, 1973.

      George Duggan, Parsonnet, Parsonnet & Duggan, Newark, N. J., for appellants in Nos. 71-1893 and 71-1895, and cross-appellees in Nos. 71-1894 and 71-1896.
    Luke A. Kiernan, Jr., Newark, N. J., for appellee in Nos. 71-1893 and 1895 and for cross-appellants in Nos. 71-1894 and 71-1896.
    John de J. Pemberton, Jr., Acting Gen. Counsel, Julia P. Cooper, Chief, Appellate Section, Lutz Alexander Prager, Atty., E. E. O. C., Washington, D. C., for amicus curiae.
    Before STALEY, VAN DUSEN and ROSENN, Circuit Judges.
   OPINION OF THE COURT

STALEY, Circuit Judge.

These are cross appeals from the judgment of the United States District Court for the District of New Jersey. That court found two versions of the Public Service Electric and Gas Company (“company”) pension plans, which discriminated between employees on the basis of sex, violative of Title VII, § 703(a)(1) of the Civil Rights Act of 1964 (“Act”), 42 U.S.C. § 2000e-2(a)(1).

Charges in the captioned cases were originally filed separately with the Equal Employment Opportunity Commission (“EEOC”). After the administrative remedies provided under the 1964 Act were exhausted, suits were brought in the district court. The eases were consolidated there after this court vacated a summary judgment in favor of the defendant and remanded the first of these actions.

The district court held both plans to be violative of the Act and ordered the company to cease and desist from discriminating between men and women as to retirement benefits. However, no award of compensatory damages was made. The plaintiffs have appealed from the denial of monetary relief; the company has cross appealed from the remainder of the judgment.

A pension plan was first instituted by the company in 1911. According to its terms a female was permitted to retire on full pension at age sixty if she had completed twenty years of service. A male, in order to receive full benefits, was required to have attained the age of sixty-five and to have served at least twenty-five years. Early retirement was available to a man at sixty only if he had served thirty years and then only at a reduced pension. Women were discriminated against in that their mandatory retirement age was sixty-five whereas their male counterparts could continue working until age seventy. The first plan was revised as the result of collective bargaining between the defendant and representatives of its employees.

The revised version which took effect on May 1, 1967, perpetuated the discriminatory features of the 1911 plan only to the extent that it favored women hired prior to its effective date. The controversial section provides:

“* * * in the case of a female employee who retires under the provisions of this Section 4, no reduction in the amount of the pension shall be made on account of service prior to May 1, 1967.”

Under this plan the mandatory retirement age for all is seventy.

STANDING

On appeal the standing of the plaintiffs to maintain this suit is questioned. Standing “concerns * * * the question whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question.” Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 830, 25 L.Ed.2d 184 (1970). The substantive issues must be considered to ascertain whether “there is a logical nexus between the status asserted and the claim sought to be adjudicated.” Flast v. Cohen, 392 U.S. 83, 102, 88 S.Ct. 1942, 1953, 20 L.Ed.2d 947 (1968). Standing for purposes of the Civil Rights Act of 1964 was intended by Congress to be defined as broadly as is permitted by Article III of the Constitution. Hackett v. McGuire Brothers Inc., 445 F.2d 442 (C.A.3 1971).

Rosen, the company contends, lost standing to contest the alleged discriminatory practices when he retired. We do not agree. He was an active employee when this action was commenced and does not lose standing merely by accepting his pension. Hackett, supra; see Jenkins v. United Gas Corp., 400 F. 2d 28 (C.A.5, 1968). As one who was subject to the discriminatory provisions of the pension plans under consideration he has standing. Sweeney, an active male employee, also has a sufficient personal stake in the outcome of this case to assure that concrete adverseness will occur. See Kalur v. Resor, 335 F.Supp. 1 (D.D.C.1971).

The company urges that the union has standing to represent neither the active employees nor the pensioners. Since both these classes are represented by other plaintiffs, we need not decide whose rights the union, as bargaining representative of the company’s employees, has standing to assert.- See Title VII of the Civil Rights Act, 8 Duq. L.Rev. 1(1969).

DISCRIMINATION

Section 703(a)(1) of the Civil Rights Act of 1964 states that it is an unlawful employment practice to discriminate on the basis of sex “against any individual with respect to his compensation, terms, conditions, or privileges of employment.” 42 U.S.C. § 2000e-2(a) (1); see Employment — Sex Discrimination, 12 A.L.R. Fed. 15 (1972). Whether retirement plans fall within the purview of the above language is the threshold question in this case. We answer it in the affirmative.

The EEOC which is charged with the responsibility of administering the Act has issued the following guideline.

“It shall be an unlawful employment practice for an employer to have a pension or retirement plan which establishes different optional or compulsory retirement ages based on sex, or which differentiates in benefits on the basis of sex.” 37 Fed.Reg. 6837 (1972).

Such an administrative interpretation is entitled to great deference. Griggs v. Duke Power Co., 401 U.S. 424, 433-434, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965). That the guideline was not promulgated until after this suit was initiated is of no moment. Rights which came into being when the Act was passed are not abrogated by administrative interpretation. Bartmess v. Drewrys U.S.A., Inc., 444 F.2d 1186 (C.A.7), cert. denied, 404 U.S. 939, 92 S.Ct. 274, 30 L.Ed.2d 252 (1971).

A reading of the statute convinces us that the commission’s interpretation furthers the legislative purpose of the Act and is consistent with the plain meaning of the language employed.

“Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.” Sprogis v. United Air Lines, Inc., 444 F.2d 1194, 1198 (C.A.7), cert. denied, 404 U.S. 991, 92 S.Ct. 536, 30 L.Ed.2d 543 (1971).

Persuasive, also, is the fact that the language in the Labor-Management Relations Act, 29 U.S.C. § 159(a), similar to that employed in § 703(a)(1) of the Civil Rights Act of 1964, has been held to include retirement benefits. Inland Steel Co. v. NLRB, 170 F.2d 247 (C.A.7 1948), cert. denied, 336 U.S. 960, 69 S.Ct. 887, 93 L.Ed. 1112 (1949).

We hold, therefore, that § 703(a)(1) of the Act prohibits discrimination with respect to retirement benefits on the basis of sex. Other courts are in agreement with us on this point. Bartmess, supra; Fillinger v. East Ohio Gas Co., (E.D.O.1971). Clearly the plans in question violate the Act. They differentiate between men and women solely on the basis of sex, and such discrimination is prohibited. Rosenfeld v. Southern Pacific Co., 444 F.2d 1219 (C.A.9, 1971); Lansdale v. Air Line Pilots Association International, 430 F.2d 1341 (C.A.5, 1970); Bowe v. Colgate-Palmolive Co., 416 F.2d 711 (C.A.7, 1969); but cf. Gruenwald v. Gardner, 390 F.2d 591 (C.A.2), cert. denied, 393 U.S. 982, 89 S.Ct. 456, 21 L.Ed.2d 445 (1968).

We find no merit in the company’s argument that the revised plan is valid because it resulted from collective bargaining.

"The rights assured by Title VII are not rights which can be bargained away — either by a union, by an employer, or by both acting in concert.” Robinson v. Lorillard Corp., 444 F.2d 791, 799 (C.A.4), cert. dismissed, 404 U.S. 1006, 92 S.Ct. 573, 30 L.Ed.2d 655 (1971); see United Mine Workers of America v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); United States v. St. Louis-San Francisco Ry. Co., 464 F.2d 301 (C.A.8, 1972), cert. denied 409 U.S. 1116, 93 S.Ct. 913, 34 L.Ed.2d 700 (1973).

Nor, as the company contends, does the revised plan’s provision for gradually phasing out the discrimination bring it into compliance with the Act. See 37 Fed.Reg. 6837 (1972); United States v. H. K. Porter Co., 296 F.Supp. 40 (N.D.Ala.1968).

The revised plan, according to the company, merely preserves pre-existing rights of females which cannot be diminished. This may be true. The apparent effect of § 15 of the pension plan and Article XVII of the collective bargaining agreement is to bar the company from reducing the benefits of females. However, the company is not precluded from raising men’s benefits to the level of women in order to achieve equality. Such adjustments have been recognized as a proper means of achieving that end. Hays v. Potlatch Forests, Inc., 465 F.2d 1081 (C.A.8, 1972).

REMEDY

On appeal the plaintiffs argue that compensatory damages should have been awarded to males who retired early under either of the discriminatory plans. With this we agree.

Section 706(g) provides that the court “may enjoin * * * and order such affirmative action as may be appropriate.” 42 U.S.C. § 2000e-5(g). “This grant of authority should be broadly read and applied so as to effectively terminate the practice and make its victims whole.” Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 721 (C.A.7, 1969). The relief is intended to restore those wronged to their rightful economic status absent the effects of the unlawful discrimination. Robinson v. Lorillard Corp., 444 F.2d 791 (C.A.4), cert. dismissed, 404 U.S. 1006, 92 S.Ct. 573, 30 L.Ed.2d 655 (1971). We are under a duty to render relief which will eliminate the “discriminatory effects of the past as well as bar like discrimination in the future.” Louisiana v. United States, 380 U.S. 145, 154, 85 S.Ct. 817, 822, 13 L.Ed.2d 709 (1965); see Smith v. Young Men’s Christian Association, 462 F.2d 634 (C.A.5, 1972).

Male employees did retire early under both versions of the pension plan. These men now receive reduced pensions whereas women who retired under identical circumstances receive full benefits. The effective date of Title VII of the Civil Rights Act of 1964 was July 2, 1965. Men who have retired since that date with annuities reduced below those which they would have received had they been women must be compensated for the losses they sustained and are sustaining due to the discriminatory reduction in the amount of pensions on account of service prior to May 1, 1967, the effective date of the revised retirement plan, and after the effective date of the Act. Further, since we are of the view that the pension rights of active women employees which accrue before May 1, 1967, cannot be diminished, we hold that the retirement credit of males similarly situated must be increased for the relevant period between July 2, 1965, and May 1, 1967. This must be done to cure the effects of discrimination since the effective date of the Act.

Other courts have invoked equitable powers under the Act to bring one group of employees up to the economic level of another. Victims of sex discrimination have been awarded three years’ wages which were lost due to early retirement. Fillinger v. East Ohio Gas Co., (N.D.O. 1971). Overtime benefits have been extended to male employees where state law required that women receive overtime pay. Hays v. Potlatch Forests, Inc., 465 F.2d 1081 (C.A.8, 1972); see Schaeffer v. San Diego Yellow Cabs, Inc., 462 F.2d 1002 (C.A.9, 1972). Further, the relief to be granted in the instant case is consistent with this court’s decisions under the Equal Pay Act which serves the' same fundamental purpose as the Civil Rights Act of 1964. See Hodgson v. Wheaton Glass Co., 446 F.2d 527 (C.A.3, 1971). In Hodgson we affirmed the judgment which awarded damages to effectuate the equalization of wage rates.

For the foregoing reasons this cause will be remanded to the district court for a determination of the damages consistent with this opinion.

      . Rosen v. Public Service Electric and Gas Co., 328 F.Supp. 454 (D.N.J.1971).

      . Section 2000e-2(a) provides in pertinent part:
      “It shall be an unlawful employment practice for an employer. — -(1) to fail or refuse to hire or discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin. * * * ”

      . The EEOC was permitted to file briefs as amicus curiae and to participate in oral argument.

      . Rosen v. Public Service Electric and Gas Co., 409 F.2d 775 (C.A.3 1969). The attack on the first pension plan was initiated by filing a charge of discrimination with the EEOC on November 15, 1965. On March 9, 1966, following unsuccessful conciliatory efforts by the commission, suit was entered in the first of the captioned cases.
      Subsequently, the complaint was amended to include in its scope the discriminatory feature of the modified pension plan. On appeal, this court remanded the first case with the suggestion that it be consolidated with a second suit filed on September 20, 1968, which raised the same issues as the amendment.

      . The court found that employees had retired under both plans.
      “ * * * The defendant’s records disclose that during the period in question, being November 15, 1965, to the present, the following number of employees retired early: 6 females, 48 males.” Rosen v. Public Service Electric and Gas Co., 328 F.Supp. 454, 467 (D.N.J.1971).

      . The 1911 plan in pertinent part provided as follows:
      “Section 3. Each male employee may at his option retire at age sixty-five or thereafter upon, completion of twenty-five years of service, and must retire at age seventy. Each female employee may at her option retire at age sixty or thereafter upon completion of twenty years of service, and must retire at age sixty-five.
      “Section 4. Each employee who retires under the provision of this Pension Plan relating to normal retirement for age shall be paid for life, in monthly installments, a pension computed at the annual rate of 1% of the average annual wage or salary of such employee for the five years of highest earnings within the last ten years of the employee’s service, multiplied by the number of years, and any fraction of a year, of the employee’s service.
      “Section 5. Each male employee may at his option retire at age sixty or thereafter but before attainment of age sixty-five upon completion of thirty years of service.
      “Section 6. Each male employee who retires under the provisions of this Pension Plan relating to early retirement shall be paid for life, in monthly installments, a pension computed at the annual rate of 1% of the average annual wage or salary of such employee for the five years of highest earnings within the last ten years of the employee’s service, multiplied by the number of years, and any fraction of a year, of the employee’s service, and reduced by one-half of 1% for each month that such employee is less than age sixty-five at the time of his retirement.”

      . The revised plan provides the following with regard to pension benefits :
      “Section 3. Normal Retirement for Age.
      “(1) Each employee may at his or her option retire at age sixty-five or thereafter, and must retire at age seventy.
      “(2) Each employee who retires under the provisions of this Section 3 shall be paid for life, in monthly installments, a pension computed at the annual rate of 1% of the average annual compensation of such employee for the five years of highest earnings within the last ten years of the employee’s service, multiplied by the number of years, and any fraction of a year, of the employee’s service.
      “Section 4. Early Retirement. .
      “(1) Each employee may at his or her option retire at age sixty or thereafter, but before attainment of age sixty-five upon completion of twenty years of service.
      “(2) Each employee who retires under the provisions of this Section 4 shall be paid for life, in monthly installments, a pension computed at the annual rate of 1% of the average annual compensation of such employee for the five years of highest earnings within the last ten years of the employee’s service, multiplied by the number of years, and any fraction of a year, of the employee’s service, and reduced by one-quarter of 1% for each month that such employee is less than age sixty-five at the time of retirement, and by an additional one-quarter of 1% for each month that such employee is less than age sixty-two at the time of retirement, except that in the case of a female employee who retires under the provisions of this Section 4, no reduction in the amount of the pension shall be made on account of service prior to May 1, 1967.”

      . Unions have the apparent right to assert their members’ rights in suits under the Civil Rights Act of 1964. See Rosen v. Public Service Electric and Gas Co., 409 F.2d 775, 780, n. 19 (C.A.3, 1969); Local 186 v. Minnesota Mining and Mfg. Co., 304 F.Supp. 1284 (N.D.Ind.1969). Retirement benefits of those employees who are not currently employed and have already retired are not a mandatory subject of collective bargaining under the NLRA. Allied Chemical & Alkali Workers of America, Local No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971). However, it does not naturally follow, as the company implies, that a union loses all interest in the fate of its members once they retire.

      . A Senate Report referring to § 706(g) stated that “The provisions of this subsection are intended to give the courts wide discretion exercising their equitable powers to fashion the most complete relief possible.” Cong.Rec. 3462, March 6, 1972.

      . “Between July 1, 1965 and May 1, 1967 there were early retirements on pension by some male employees, members of the plaintiff Union, as well as during the period from May 1, 1967 to the date of the Stipulation.” Rosen v. Public Service Electric and Gas Co., 328 F.Supp. 454 (D.N.J.1971).

      . Plaintiffs have not on appeal asserted all the potential claims of members of the class, such as the right of women employees who were involuntarily retired at age 65 to recover damages. In view of the policy underlying F.R.Civ.P. 23(a) (4) and 23(e), the district court on remand should consider directing notice to all class members in accordance with 23 (d) (2).


author: SIMPSON, Circuit Judge:

text:
    AETNA INSURANCE COMPANY, Plaintiff, v. Wallis HARTSHORN, d/b/a Hartshorn Enterprises, et al., Defendants-Appellees, Claims, Inc., Defendant-Appellant.
    No. 72-1193.
    United States Court of Appeals, Fifth Circuit.
    May 1, 1973.
    Sam Gross, San Antonio, Tex., Caplan & Barsky, Detroit, Mich., for defendant-appellant.
    Joel H. Klein, San Antonio, Tex., for Outlet Co.
    Sylvan Alter, San Antonio, Tex., for Atlas Rand, Ampex, Trans Am.
    Edward V. Dylla, San Antonio, Tex., for Greentree.
    Leslie J. Bretz, San Antonio, Tex., for Monarch and Modern Elec.
    Les Mendelsohn, San Antonio, Tex., for Mercury Rec.
    Marvin C. Beck, San Antonio, Tex., for Sherman Elec.
    Leo E. Eickhoff, Jr., Marlin L. Gilbert, San Antonio, Tex., for Bell.
    John J. Clayton, San Antonio, Tex., for Barco.
    Philip F. Benson, San Antonio, Tex., for Allied Rec.
    Joe Warren Jones, San Antonio, Tex., for Mikado and Central Dist.
    William S. Frank, Houston, Tex., for Santone Sales.
    Henry Valdespino, Asst. U.S. Atty., San Antonio, Tex., for Internal Revenue.
    Earle J. Cobb, Jr., San Antonio, Tex., for Hartshorn, Durflinger & J. Andrews Smith.
    Edward E. DeWees, Jr., San Antonio, Tex., for Adell Corp., Les Ferguson & AVCO Broadcasting & Texas Star Broadcasting.
    Richard C. Keene, San Antonio, Tex., for Aetna Ins. Co.
    Before TUTTLE, WISDOM and SIMPSON, Circuit Judges.
   SIMPSON, Circuit Judge:

Because a busy district judge considered and disposed of the merits of cases which were properly before him for the single function of ruling on a Motion to Consolidate several pending actions without first affording appellant Claims, Inc. (Claims) prior notice that such disposition might take place we are constrained to reverse and remand. The due process requirements of the Fifth Amendment of notice and opportunity to be heard were simply ignored in the rush to take final action.

On November 1, 1969, defendant-appellee Hartshorn, d/b/a Hartshorn Enterprises, a Texas corporation, suffered a fire loss which was insured under insurance policies issued by plaintiff Aetna Insurance Company for damage to property, and Aetna Fire Underwriters Insurance Company for loss of business due to fire (collectively hereinafter, Aetna). Hartshorn brought suit in Texas state court against Aetna to collect the $50,725.46 allegedly due under the fire damage policy. A number of Hartshorn’s creditors also instituted suits in state court and in federal court against Aetna to recover claimed portions of the insurance proceeds.

In view of the multiplicity of suits instituted and threatened against Aetna, Aetna paid a total of $52,601.05 due under both policies ($50,725.46 fire damage, $1,875.59 for business loss) into the Registry of the court below and filed an interpleader action under 28 U.S.C. Section 1335 to determine which claimants were entitled to receive the money. Aetna also sought a temporary restraining order pursuant to 28 U.S.C. Section 2361 enjoining creditors with claims against Hartshorn from perfecting any actions against Aetna pending determinations of entitlement to the proceeds. Among the twenty-one defendants named in Aetna’s complaint was defendant-appellant Claims, a Michigan corporation, whose claim against Hartshorn was for $5,072.55. This represented 10% of the fire damage loss, and was a fee claimed by Claims for investigating the claims against Hartshorn arising as a result of the fire.

Aetna filed its Motion to Consolidate all of the pending actions below on September 7, 1971, and a Motion in Opposition of Consolidation was filed the next day by Hartshorn Enterprises, Inc., one of the named defendants to the inter-pleader suit. The court thereupon sent notice to counsel for all parties, including Claims’ attorney, a Mr. Seymour Caplan of Detroit, Michigan, that a “hearing on pending motions” was to be conducted on October 7, 1971, before the presiding judge in San Antonio, Texas.

Upon receipt of the court’s notice, Mr. Caplan telephoned Mr. Earle Cobb, Jr., the San Antonio attorney who represented Hartshorn Enterprises, to inquire as to the nature of the pending motions referred to in the court’s notice. Mr. Cobb accurately indicated that the reference was to the Motion to Consolidate the actions then on file and the Motion in Opposition thereto. Upon being so informed, Mr. Caplan concluded that since he did not oppose consolidation of the pending claims, his presence at the hearing was unnecessary. He so stated his position to Mr. Cobb.

Starting October 7 and continuing until the following morning, a hearing was held in San Antonio pursuant to the court’s notice. Although not entirely clear the record indicates that the attorneys for all other parties were present, but Mr. Caplan, Claims’ attorney, was absent. His absence was explained to the court by Mr. Cobb or at least an explanation was attempted, to which the trial judge paid scant heed, (see Note 1, infra).

The proceedings on October 7 quickly passed the consolidation motion stage and turned informally into a general conference between court and the attorneys present as to settlement of all pending suits and claims. Counsel were directed to work up a schedule of settlement and a proposed judgment, as well as preparing necessary preliminary orders. Adjournment was taken to October 8 to permit preparation of papers. Final disposition resulted by agreement of all matters in controversy between those present and represented. The entire insurance proceeds before the court were divided by the final judgment between these parties, the claim of Claims, Inc. being expressly disallowed. The judgment found that Claims’ interest in the Registry funds was subordinate to the judgments, liens and assignments of the other creditors, ordered the clerk of the court to disburse the monies to these priority creditors, and adjudged that Aetna had fully satisfied its obligations to defendant-appellee Hartshorn under both insurance policies. The judgment directed that Claims take nothing.

Defendant-appellant Claims appeals alleging the district court erred in dismissing its claim against the funds with prejudice because it had no notice of final hearing or opportunity to be heard.

The Due Process clause of the Fifth Amendment shields the individual against arbitrary exercise of governmental power by its guarantee that fundamental principles of justice and fair play not be violated. Two such fundamental principles, or minimal requirements, are adequate notice and opportunity to be heard or to defend. One thing that is clear from this sketchy record is that Claims was never on notice that the merits of its claim would be decided on October 7. The notice of the hearing limited its scope to hearing of “pending- motions”. The Motion to Consolidate and the Motion in Opposition thereto were the only motions then pending before the court.

Certainly, by failing to attend the hearing or otherwise interpose an objection defendant-appellant Claims waived any objections it may have had as to those motions. F.R.Civ.P. 12(h). Indeed, such was its intention as expressed by its attorney to Mr. Cobb. It was not opposed to the Motion to Consolidate. We express no view whatever as to the merits. This reversal may produce nothing for Claims since it may well be proper in a hearing on the merits to deny Claims access to any portion of the insurance proceeds. But Claims is entitled to its day in court, which it has never had. This means it is entitled to try to prove up and to argue the merits of its claim, after notice and opportunity to be heard.

Because defendant-appellant Claims, Inc., was misinformed and misled by the court — albeit innocently — as to the nature and purpose of the October 7 and 8 hearing, and was not present to assert its alleged interest in the insurance proceeds, we reverse the final judgment entered by the district court and order that full hearing on the merits be held with adequate notice to all parties.

Reversed and remanded.

      . We reproduce from the Appendix a portion of the colloquy as to disposition of the claim of Claims, Inc., when court was reconvened on October 8.
      “MR. COBB : (HARTSHORN’S ATTORNEY) I don’t know whether the Court can help or not, I think perhaps the Court can. Mr. Keene has described the judgment which has been drawn up, we haven’t examined it yet, again, assuming I have understood it correctly, the defendant Hartshorn would have to object to the judgment on two grounds, first, that one of the creditors that was interpled and that is a party to this case has not been provided for; and second, as the matter has turned out, the second insurance company, the Eire Underwriters Insurance Company, is paying a mere eighteen hundred dollars for a settlement of the business interruption policy, and this is not acceptable in view of the fact that all the creditors are not provided for.
      THE COURT: Well, now, the only creditor that is outstanding is the one you mentioned ?

      MR. COBB: This is the only one in the suit. Now, my client is left with a number of creditors that have been suing him and harassing him, and it is my suggestion to these creditors that they forego the additional eighteen hundred dollars for the business interruption policy, accept their position of the amount that was entered into court, and then let us proceed on our business interruption policy.
      THE COURT: Now, wait a minute, about this one creditor that has been referred to, how much does his claim amount to?
      MR. COBB : $5,200.00, I believe.
      MR. KEENE: (AETNA’S ATTORNEY) The one creditor, Your Honor, is entitled Claims, Inc., which is a public adjuster which was retained by the Hartshorns to arrive at figures for the determination of the value of the losses, and their service all came up after the fire, and it is based not upon a sum certain but upon a percentage of any proceeds which may be recovered by the Hartshorns. And I would also point out to the Court that Mr. Cobb speaks about a mere $1,875.00 only being paid by the business interruption policy; by the terms of this judgment, the insurer also gives up any right to recover their costs and attorney’s fees, which they are entitled to under the federal inter-pleader statute, and that too amounts to a considerable amount.
      THE COURT: Well, you have to remember that here under the law I would have to allow a big fee to him, unless he waived it, I would have had to allow a fee for him, and you could imagine what that would be, if we had to go down and painfully go through all the creditors on this thing, and I want you to keep in mind that this is a settlement and everybody gives up something when they settle.
      MR. COBB: I am keeping that in mind, Your Honor, and—
      THE COURT: There could have been a big interpleader fee here, and I want it fixed so your client will probably have to end up still owing some people, because he probably did owe some people independently of this suit, he shouldn’t kick about what he owes, and he can’t expect — unless he really just hits an oil well, so to speak, in these two losses here — he can’t expect to liquidate everything that he really owed, so he has to give up something, I contemplated that you would end up still owing some people that might even sue him, but they wouldn’t be covered by the inventory suit that the main policy is about, and I think if you will keep that in mind, instead of a mere eighteen hundred, why you cam add five thousand, as of today, as an interpleader fee today, that would run it up to about seven thousand dollars, and then take it from there as to how much more it would have been.

      MR. COBB: Well, this is assuming a couple of things, though, that I don’t think are necessarily a fact. First, we deny that the insurance company; had the right to interplead these funds in the first place, this suit had been filed in the State Court—
      THE COURT: Well, yes, but by the time you got through with that, and you should be wrong, you just made money for the interpleader.
      MR. COBB: That is true, but they claim they are giving up attorney’s fees, well, we are giving up the balance of our claim on the inventory policy too, it is not all one way, but we are between the rock and the hard place on this point, because it is not equitable for my client to agree to a judgment which prefers. some creditors over the others, and particularly where a creditor is involved in this lawsuit.

      THE COURT: As I understand it, you were going to compile a list of the creditors?
      MR. COBB: That is right, and one was excluded.

      THE COURT: And I figured when the judgment was entered, that checks would be written to pay those people off so they could go home with the money, and I contemplated that you would end up owing some people, that is true, but under this settlement you got the matter settled.
      MR. COBB: There is no question about that.
      THE COURT: But I contemplated that both lawsuits be settled — well, not just one, but the three that are in front of me, that all lawsuits would be settled, and that you probably would end up owing a few general creditors. You will have to talk to your client and have him reconcile himself to the fact that he still had to pay some people some money.
      MR. COBB: If we include the other creditor that has intervened into this lawsuit, we may be able to work this thing out, but my client cannot agree to exclude a creditor that is involved in this lawsuit merely by reason of the fact that he is not here.

      THE COURT: Well, if he is not here he is in default in not being here, then, he has been notified to be here.

      MR. COBB : Well, I understood — well, I don’t know about that, that may be the case.

      THE COURT: If he is in default he is out of luck.

      MR. COBB: If the Court wants to enter the judgment over our objection on that basis.

      THE COURT: Well, I am going to— if he has been served and didn’t appear today, why, I will enter the judgment against him by default, or he can — or, if you had any better suggestion, I can enter it without' prejudice against proceeding against your client, but it is with prejudice against everybody else, because they are here, and if he toas notified to be here and he didn’t show to press his claim, why, that is just too bad, he just lost out, maybe your client can work out out a settlement with him.

      MR. COBB : With that understanding I’d like to examine the judgment.
      (Emphasis supplied)
      ■ Certainly, Claims was in default, as pointed out by the judge, but it could only be held to have foregone opposing the consolidation of the several suits. In no sense was Claims in default as to its claim against the Registry interpleader fund.

      . No supersedeas was sought as to the judgment appealed from. It may be difficult for the trial to provide a solvent source of payment of Claims’ claim, if it is upheld on the merits. Hartshorn’s liquidity is doubtful. But Aetna is solvent and was a party to the proceedings below. The trial court should award money recovery where it finds liability to exist upon reexamination of the positions taken by the parties. We assume that the judgment has been satisfied by full payout of the deposited funds.