author: BRUCE R. THOMPSON, District Judge.

text:
    UNITED STATES of America, Appellant, v. Richard P. HASKINS, Appellee.
    No. 72-2342.
    United States Court of Appeals, Ninth Circuit.
    Oct. 25, 1974.

      Jacques B. Gelin (argued), Appellate Section, U. S. Dept, of Justice, Washington, D. C., for appellant.
    Hale C. Tognoni (argued), Phoenix, Ariz., for appellee.
    Before HUFSTEDLER and WRIGHT, Circuit Judges, and THOMPSON, District Judge.

       Honorable Bruce li. Thompson, United States District Judge, District of Nevada, sitting by designation.

   OPINION

BRUCE R. THOMPSON, District Judge.

This is an action in ejectment brought by the United States to enforce its right to possession of an area in the Angeles National Forest near Los Angeles, California, described as Section 28, T. 3 N., R. 14 W., San Bernardino B & M.

The Complaint alleges that defendant, Richard P. Haskins, claims the right to possess the property by virtue of four invalidated mining claims denominated as Lone Jack, Lap Wing, Roger Williams and Lady Helen, and two invalidated millsites called Lap Wing Millsite and Lady Helen Millsite. The claims in question were located as lode mining claims and encompass approximately 85.-1 acres. The Complaint alleges that after appropriate administrative proceedings, the claims in question were declared null and void by final decision of the Interior Board of Land Appeals on July 30, 1971.

Defendant Haskins answered. He denied that his possessory interest in the property was based upon the four lode mining claims and two millsites. He admitted that the claims and millsites had been declared null and void by the Interior Board of Land Appeals. He denied that that decision was final and binding, stating that a reasonable time had not elapsed in which to obtain judicial review of the decision.

Defendant also filed a counterclaim in which he makes it clear that his present claim to the possession of the property must be determined on the basis of his assertion of valid placer mining claim locations of the same property which had been encompassed by the lode mining claim locations and millsites. He alleged that his patent application to obtain a patent to the Haskins Quarries Placer Mining Claim was filed on May 27, 1968, and that the processing of that application had been frustrated by the decision of the Bureau of Land Management that the then pending litigation before the Interior Board of Land Appeals, in effect, involved the same property.

The plaintiff moved for summary judgment. In opposition to the motion, defendant filed, among other things, an affidavit of E. Rowland Tragitt, a graduate of the Missouri School of Mines and Metallurgy in 1923 and a registered professional engineer in Missouri and Arizona. In addition to sixteen years of experience working for mining companies, Mr. Tragitt was employed by the Bureau of Land Management as a Field Examiner and later Supervising Engineer and Lands and Minerals Officer from 1939 until 1957. From 1957 until 1968, Mr. Tragitt was Chief Mining Engineer for Region 3 of the Forest Service, United States Department of Agriculture, Albuquerque, New Mexico. The affidavit states that in March of 1972, he made a thorough examination of the Haskins Quarries Placer Mining Claim and determined that there is a minimum of 900,000 tons of dolomite on the claims and that the use of dolomite in the Los Angeles area included the following: Flux in iron and steel foundries, filler in paints, asphalt and rubber, the manufacture of glass, paper, refractories, insulation and fertilizer, and as a supplement in animal feed. Mr. Tragitt also stated: “That in addition to the dolomite, there are a minimum of 100,000 tons of decorative stone marketable for use as roofing granules, terrazzo chips, and decorative stone in walls, rock gardens, fire places, and patios.”

The District Court heard the motion for summary judgment and filed a memorandum opinion denying the motion. The following quotation summarizes the basis for the decision:

“In moving for a summary judgment of dismissal of defendant’s counterclaim, the Government urges that since the land embraced within the lode claims was held to be without commercial value in the contest proceedings, the issue is res adjudicata in the patent application proceedings relating to the placer claim. But this is not necessarily so. There is after all a difference between a lode claim and a placer claim. The former relates to a vein of quartz or other rock in place, whereas a placer claim covers all forms of deposit except a vein of quartz or other rock in place, and what might be an insufficient showing of commercial value in support of a lode claim might well be sufficient to establish a valid placer mining claim. Both types of claims can, of course, be made upon the same property and can co-exist, even though in different ownership.”

The Court determined that the application for patent to the placer claims should be remanded to the Department of the Interior for administrative determination. The Court also certified the case as one appropriate for interlocutory appeal under 28 U.S.C. § 1292(b), and the appeal was accepted by this Court. The District Court stated the following as the controlling questions of law involved in its decision:

“1. Can the defendant pursue his application for patent of the Haskins’ Placer Mining Claim pursuant to Title 30 U.S.C. § 38 where his lode claims under which he had previously worked the property have been declared invalid for lack of discovery ?
“2. Does defendant’s possession of the property which antedates the effective date of the Watershed Withdrawal Act of 1928 by more than five years, entitle him to proceed with his patent application notwithstanding the fact that his notice of intention to hold as a placer mining claim was not filed until subsequent to the effective date of the Watershed Withdrawal Act?
“3. If the defendant is entitled to proceed with his patent application and since the Government has chosen this Court as a forum, does this Court have jurisdiction over the patent application proceeding to the extent that it may make an order declaring the defendant entitled to a patent, or should these proceedings be remanded to the Department of the Interior to process defendant’s application administratively ?”

The instant controversy has a long history. The Haskins family has occupied this land within Angeles National Forest since the turn of the century. Between 1894 and 1908, Haskins’ mother located lode mining claims for gold, silver, vanadium and uranium. In 1929, she filed a patent application for the lode claims known as Lone Jack, Lap Wing and for the Lap Wing Millsite. The Forest Service filed a protest. In the meantime, on May 29, 1928, Congress had enacted 45 Stat. 956 which withdrew these lands, among others, within Angeles National Forest from location and entry under the mining laws. The Withdrawal Act declared that it would not defeat or affect any lawful right which had already attached under the mining laws. Mrs. Haskins’ patent applications were processed between 1929 and 1936 and the final decision was that the applications were rejected. In the course of these proceedings, a Forest Service Minerals Examiner had rendered a report in which he observed that the Lady Helen Claim, lying west of the Lone Jack, was “unquestionably patentable.” It should be noted that in the administrative hearings in the 1930’s, testimony was received from Mrs. Haskins and Bartholomew J. Haskins, who were then living, and that the proceedings resulted in the rejection of patents for the Lone Jack and Lap Wing claims.

The Haskins remained in possession.

In about June of 1962, Richard P. Haskins filed a verified statement specifying the exact nature of his mining claims. He claimed the four lode mining claims known as Lone Jack, Lap Wing, Roger Williams and Lady Helen and the Lap Wing Millsite and Lady Helen Millsite. In 1964, the Government initiated contest proceedings against these claims. In the administrative hearings, Haskins testified that while his predecessors had originally been looking for gold and silver, he was now interested only in dolomite. The decision of the Examiner was to the effect that there is not now a valuable mineral deposit .on any of the four lode claims and that the two millsites are not being used for mining or milling processes. He declared the lode claims null and void for lack of a presently valuable mineral deposit and the millsites null and void for lack of use. This is the decision which became final on July 30, 1971 by virtue of the decision of the Interior Board of Land Appeals.

In the meantime, Haskins had filed an application for patent to the ground in question as the “Haskins Quarries Mining Claim” under 30 U.S.C. § 38 (based on adverse possession under state law), and under 30 U.S.C. § 161 authorizing entry on lands chiefly valuable for building stone under the provisions of the law in relation to placer mineral claims.

The record before the Court shows that limestone is calcium carbonate and dolomite is a combination of calcium carbonate and magnesium carbonate. A 1937 report of the California State Mineralogist shows that the Haskins dolomite deposit consists of a series of lenses of dolomite in the gneissoid granite from thirty to forty feet thick and from one hundred to two hundred feet in length. An analysis of one sample showed approximately 36% magnesium carbonate and 58% ■ calcium carbonate and of another approximately 12% magnesium carbonate and 87% calcium carbonate.

1. APPLICABILITY OF 30 U.S.C. § 38.

Section 38, Title 30, United States Code, provides as follows:

“Where such person or association, they and their grantors, have held and worked their claims for a period equal to the time prescribed by the statute of limitations for mining claims of the State or Territory where the same may be situated, evidence of such possession and working of the claims for such period shall be sufficient to establish a right to a patent thereto under this chapter * *

This savings clause. has been part of the general mining law since 1870 (16 Stat. 217). Its purpose is to obviate the necessity of proving formal compliance with requirements for locating a claim but not to dispense with proof of discovery. Cole v. Ralph, 252 U.S. 286, 40 S.Ct. 321, 64 L.Ed. 567 (1920).

We agree with the district court that the section is applicable to this case. The evidence unequivocally shows that Haskins and predecessors have been in possession of the ground and have worked the claims for over half a century and for much longer than five years prior to the enactment of the Watershed Withdrawal Act of May 29, 1928. Section 38 permits them to assert valid placer locations for the ground in question without proof of posting, recording notices of location and the like. Springer v. Southern Pac. Co., 67 Utah 590, 248 P. 819 (Utah 1926); Newport Mining Co. v. Bead Lake G. C. M. Co., 110 Wash. 120, 188 P. 27 (Wash.1920); Humphreys v. Idaho Gold Mines, etc. Co., 21 Idaho 126, 120 P. 823 (Ida.1912).

The Government criticizes these authorities because they involved a contest between private adverse claimants and contends that the statute does not apply against the United States, pointing to dicta in United States v. Consolidated Mines & Smelting Co., Inc., 455 F.2d 432 (9th Cir. 1971). We think, however, that the Supreme Court, in Cole v. Ralph, supra, has made it plain that the statute was intended to apply in claims for patent against the United States, saying:

“The only real divergence of opinion respecting the section has been as to whether it is available in an adverse suit, such as these are, or is addressed merely to the land department. Some of the courts have held it available only in proceedings in the department, McCowan v. Maclay, 16 Mont. 234, [40 Pac. 602] and others in greater number have held it available in adverse suits. Upton v. Santa Rita Mining Co., [14 N.M. 96, 89 Pac. 275] supra, and cases cited. The latter view has received the approval of this court. Reavis v. Fianza, [215 U.S. 16, 30 S.Ct. 1, 54 L.Ed. 72] supra; Belk v. Meagher, [104 U.S. 279, 26 L.Ed. 735] supra.”

Haskins having occupied and worked the ground for more than five years may assert placer locations without proof of recording and posting. He must, nevertheless, prove discovery of a valuable mineral because the statute has no application to a trespasser on public lands, title to which cannot be acquired by entry under the mining laws of the United States. Cole v. Ralph, supra; Chanslor-Canfield Midway Oil Co. v. United States, 266 F. 145 (9th Cir. 1920).

2. THE ISSUE REGARDING THE PRESENCE OF DOLOMITE OR DOLOMITE LIMESTONE IN LODE FORMATION IS RES JU-DICATA.

The validity of Haskins’ lode claims, encompassing the present placer claims, was tried in the Department of the Interior on the question of whether there was a discovery of valuable mineral on the property, namely, dolomite or dolomite limestone. The Department found “that there is not now a valuable mineral deposit on any of the four lode claims, and that the two millsites are not being used for mining or milling purposes.” This finding is final and binding.

It is true that a placer discovery will not sustain a lode location, nor a lode discovery a placer location. Cole v. Ralph, supra, 252 U.S. at 295, 40 S.Ct. 321. We have quoted, supra, the observations of the District Court on this subject.

The issue of lode versus placer locations presents many practical difficulties. A lode claim is located on a vein of quartz or rock in place (30 U.S.C. § 23). All other forms of mineral deposits are locatable as placer claims (30 U. S.C. § 35). By express statute, lands chiefly valuable for building stone may be claimed as placer deposits (30 U.S.C. § 161). In 1969, the Court of Appeals of Arizona wrote instructively about the differences between lode and placer locations, Bowen v. Sil-Flo Corporation, 9 Ariz.App. 268, 451 P.2d 626 (1969), and held perlite to be properly claimed as a lode deposit. The Court quoted from Iron Silver Mining Co. v. Cheesman, 116 U.S. 529, 6 S.Ct. 481, 29 L.Ed. 712 (1886): “We are of opinion therefore, that the term (lode) as used in the acts of congress is applicable to any zone or belt of mineralized rock lying within boundaries clearly separating it from neighboring rock.” The Interior Department has held that limestone deposited in lode formation is properly claimable as a lode claim and not as a placer claim. Big Pine Mining Corporation, 53 L.D. 410 (1931). That seems to be true of the dolomite and dolomite limestone deposits in the present case.

In any event, it is clear that the Haskins lode claims were not declared invalid by the Department because they should have been located as placers. If they had been, this case would be different. On the contrary, the Department accepted the lode locations and proceeded to investigate the quality of the deposit, ultimately holding the claim invalid for lack of discovery of a valuable mineral.

Haskins now attempts to claim at least some of the same mineral on the same ground as a placer deposit. It may be that some of the dolomite is not in lode formation. To the extent that it is deposited as a zone or belt of mineral-ized rock lying within boundaries separating it from neighboring rock, Has-kins cannot twice litigate the issue of the existence of this valuable mineral in the ground. He is precluded by the doctrine of res judicata. Consequently, whatever the merits of Haskins’ claimed placer locations, their validity cannot be supported by proof of the presence of dolomite or dolomite limestone in lode formation. Haskins cannot use the same material that he relied on as discovery of valuable mineral under his lode locations to support his present placer applications.

3. THE ISSUE WITH RESPECT TO BUILDING STONE.

Haskins also asserts the validity of his placer claims as building stone locations under 30 U.S.C. § 161. The affidavit of E. Rowland Tragitt avers the presence on the property, in addition to the dolomite, of 100,000 tons of decorative stone marketable for use as roofing granules, terrazzo chips and decorative stone for walls, rock gardens, fireplaces and patios. Our search of the record has disclosed no instance in which the validity of mining locations for this mineral on the ground in question has been decided, or even placed in issue. Further, it cannot be determined from the present record whether the placer location for building stone was thrown in as an afterthought and not in good faith. The difficulties inherent in proving up on a placer location for building stone are apparent to anyone familiar with the mining laws. Cf. United States v. Coleman, 390 U.S. 599, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968); McClarty v. Secretary of Interior, 408 F.2d 907 (9th Cir. 1969); Brubaker v. Morton, 500 F.2d 200 (9th Cir. 1974). Nevertheless, in the language of the District Court, the “claimant is entitled to try.”

4. IS THE JULY 30, 1971 DECISION OF THE INTERIOR BOARD OF LAND APPEALS FINAL?

We have noted that Haskins, in his answer, alleged that the Interior Department decision holding the lode claims invalid was not final because a reasonable time to seek review under the Administrative Procedures Act had not elapsed. Not so. The reasonable time elapsed when the answer was filed. The complaint for ejectment directly alleged the Interior Department decision as the basis for ejectment. If Haskins intended to assert the invalidity of that decision, that was the time to do it. A counterclaim for review and relief from the decision was a compulsory counterclaim under Rule 13(a), Federal Rules of Civil Procedure. Instead, Haskins elected to rely on a new claim of placer locations which had not previously been adjudicated.

5. THE ISSUE OF GOOD FAITH.

Our Court has affirmed that for a mining location to be valid, the entry must have been made in good faith for the purposes of mining valuable minerals. United States v. Nogueira, 403 F.2d 816 (9th Cir. 1968). The thorough opinion in the Nogueira ease establishes this requirement beyond dispute. Nogueira, like the instant case, was an action for ejectment brought by the United States in which the locator relied on a subsequent placer location after his lode claim had been held invalid. While not couched explicitly in terms of “good faith,” the Government here has consistently argued that Haskins cannot “circumvent” the final decision disqualifying the lode claims by now asserting valid placer claims. This amounts to the same thing. In Nogueira, the Court said:

“In this cáse there was ample evidence from which the trier of fact could have determined that the purported location in May 1961 was not for the purpose of exploring for and developing minerals; and ample evidence that the appellees entered upon and continued to occupy the premises for personal residence purposes and not for mining development at all.
“In spite of our refusal to pass on the government’s first contention, we think the district court had jurisdiction to pass on the good faith or lack of good faith in the filing of a mining claim without necessarily passing on its validity otherwise, under the mining statutes. We are led to this conclusion by the delays and confusion which would follow, if as soon as one mining claim were held invalid, another was filed. If in each instance the government would have to await the determination of the validity of the mining claim to be made by the Department of the Interior, the government could thus be forever kept out of possession of its property.” United States v. Nogueira, supra, at 824.

In this case, in view of the long history of mining activity on the property and the affidavit of E. Rowland Tragitt, the least that can be said is that there is a disputed issue of material fact which precludes summary judgment.

6. DISPOSITION BY REMAND TO THE DEPARTMENT OF THE INTERIOR.

The District Court referred the placer patent application to the Department of the Interior for administrative processing. Here, too, the Nogueira opinion is illuminating. While that Court declined to pass on the specific issue of the jurisdiction of the District Court on suit by the United States to determine the validity of a mining claim in the first instance on the question of discovery of a valuable mineral, our reading of the discussion in that opinion persuades us that reference of the question to the Department of the Interior is the proper course. Here the patent application for placer claims is presently pending in the Department and the question is presented by Haskins’ counterclaim, not the Government’s complaint. In Nogueira, the Court said:

“The express holding in Best, shown supra, does not support appellees’ contentions. We draw from the cases above including Best, the conclusion that while a proceeding on a claim is pending before the Department of the Interior, the courts will not entertain actions by private litigants seeking to restrain the Department, compel its decision or interfere with the administrative processes; that the authorities do not hold that the government has no right to enter the United States courts, set up particularly for the handling of government cases, and seek to vindicate its rights to title, its rights to possession or damages for waste or trespass upon land, the title of which is in the government.” United States v. Nogueira, supra, at 822-823.

When the issue is one of discovery of a valuable mineral, and not, as in No-gueira, of good faith or the non-mining use to which the property is being put, the expertise of the Department in the premises is appropriately invoked. Best v. Humboldt Placer Mining Co., 371 U.S. 334, 83 S.Ct. 379, 9 L.Ed.2d 350 (1963).

7. ANSWERS TO CONTROLLING QUESTIONS OF LAW CERTIFIED BY THE DISTRICT COURT.

(a) Haskins may pursue his application for patent of the Haskins’ Placer Mining Claim pursuant to 30 U.S.C. § 38, but may not base his claim of discovery of a valuable mineral upon the presence of dolomite or dolomite limestone in lode formation.

(b) The notice of intention to hold the placer claims recorded in 1968 does not preclude Haskins from asserting the validity of the claims based on actual possession and working of the claims for more than five years prior to the Watershed Withdrawal Act of 1928, proof of posting and recording notices of placer locations at or about the date of occupancy being obviated by 30 U.S.C. § 38.

(c) The placer patent application was properly referred to the Department of the Interior for administrative processing.

The order of the District Court is affirmed and the case is remanded for further proceedings consistent with this Opinion.


source: Caselaw Access Project

author: KILKENNY, Circuit Judge: WILLIAM P. GRAY, District Judge

license: Public Domain

text:
    Daniel Long FOX and Henry Cliff, for themselves and all others similarly situated, Appellants, v. Rogers MORTON, Secretary of the Interior, et al., Appellees.
    No. 73-2009.
    United States Court of Appeals, Ninth Circuit.
    Oct. 29, 1974.
    As Modified on Denial of Rehearing Dec. 5, 1974.
    Frank Altman, Montana Legal Services Assn., Havre, Mont., for appellants.
    Donald R. Marble, Chester, Mont., for amicus curiae, Fort Belknap Indian Community.

      Otis L. Paekwood, U. S. Atty., Billings, Mont., for appellees.
    Before KILKENNY and SNEED, Circuit Judges, and GRAY, District Judge.

       The Honorable William P. Gray, United States District Judge for the Central District of California, sitting by designation.

   OPINION

KILKENNY, Circuit Judge:

Appellants are American Indians residing on the Fort Belknap Indian Reservation in Montana. Prior to April 21, 1972, they were participants in the Tribal Work Experience Program (TWEP) operating under the Bureau of Indian Affairs Welfare program and ultimately under the supervision of officials in the Bureau of Indian Affairs and the Department of the Interior, appellees. Appellants’ tribal organization was party to a TWEP contract in which it was agreed that the participants would perform certain tasks under the program in return for monetary compensation. Funds for TWEP were granted pursuant to the Snyder Act, 25 U.S.C. § 13.

About March 21, 1972, appellants were informed by individual letters from the BIA office that their TWEP participation would terminate upon expiration of the contract. Appellants’ attorney requested that a hearing be granted prior to termination, which request appellees refused. Appellants thereupon filed a complaint asking for injunctive and declaratory relief on the matter of the hearing. The district court denied relief to the appellants, holding they were not entitled to a due process hearing under Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287, (1970), or otherwise. This appeal follows.

At the outset, we recognize that assistance programs established under the Snyder Act are for the special benefit of Indians and Indian communities and must be liberally construed in their favor. Ruiz v. Morton, 462 F.2d 818, 821 (CA9 1972) aff’d sub nom. Morton v. Ruiz, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974); Rockbridge v. Lincoln, 449 F.2d 567, 571 (CA9 1971). Ruiz stands for the principle that our government has an overriding duty of fairness when dealing with Indians, one founded upon a relationship of trust for the benefits of these “. . . dependent and sometimes exploited people.” Seminole Nation v. United States, 316 U.S. 286, 296, 62 S.Ct. 1049, 86 L.Ed. 1480 (1942). The Snyder Act was enacted with this principle in mind, and its programs must be administered accordingly. Neither the court below nor the parties mention this concept. Therefore, the district court’s conclusions must be reexamined under the Ruiz principle.

In literal terms, appellants were contractually employed under TWEP, but such formal employment should not be allowed to disguise the true nature of the program, which was to provide “general assistance” to the entitled Indians. The contract itself used that key term, and TWEP is undoubtedly part of the “general support,” “relief,” and “industrial assistance” provided under the Snyder Act. Mere form must not be permitted to dominate over substance in this area. Appellants were denied general assistance, not just jobs.

The district court declined to apply the rule of Goldberg v. Kelly, supra, because, it said, appellants could find alternative means of support under other BIA general assistance. Admittedly, Goldberg dealt with the “. . . very means by which to live . . . . ” 397 U.S. at 264, 90 S.Ct. at 1018. However, the Supreme Court spoke of other important considerations involved:

“From its founding the Nation’s basic commitment has been to foster the dignity and well-being of all persons within its borders. . . . Public assistance, then, is not mere charity, but a means to ‘promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.’ The same governmental interests that counsel the provision of welfare, counsel as well its uninterrupted provision to those eligible to receive it; pre-termination evidentiary hearings are indispensible to that end.” [Id. at 264, 265, 90 S.Ct. at 1019; emphasis added.]

The Court then went on to note that essentially a balancing process is involved, with the recipient’s interest in uninterrupted assistance and the accompanying advantages to the national welfare outweighing the government’s fiscal and administrative concerns in securing summary termination. We might also note that appellants possessed the additional interest in the dignity of work, which further tips the balance in their favor. Thus, the mere fact that recipients could obtain their sustenance elsewhere would not necessarily vitiate due process requirements. The elements of interruption, denial of gainful employment, and consequent disruption of their normal method of living would still be present.

Assuming', arguendo, that contract law is controlling here, the fact that the BIA itself describes TWEP as general assistance in the contract prevents the appellees from now denying the nature of the program. Courts have generally refused to apply the doctrine of estoppel or waiver to the government under a theory akin to sovereign immunity. However, there has lately been a broadening of the exceptions to include an estoppel against the United States where justice and fair play require it. Moser v. United States, 341 U.S. 41, 71 S.Ct. 553, 95 L.Ed. 729 (1951) ; United States v. Lazy FC Ranch, 481 F.2d 985 (CA9 1973).

We, therefore, hold appellees to their word. Having defined appellants’ participation as “general assistance,” they are now estopped to deny it.

Finally, the contention that control of TWEP rested with the Indian community is groundless. While local Indians helped administer the program, ultimate control resided in BIA and the Secretary of the Interior. This is confirmed by the fact that TWEP’s termination came by order of the BIA’s Social Services office at Fort Belknap.

We hold, therefore, that summary termination of TWEP deprived appellants of due process rights which could have been secured by a properly conducted ev-identiary hearing. At such hearing all factors could have been aired, including both appellants’ eligibility for the program and the government’s interest in terminating it.

Reversed and remanded.

WILLIAM P. GRAY, District Judge

(dissenting):

Although it may very well be that the Indians here concerned were shabbily treated, I am unable to agree that the particular relief sought, and now granted by the majority, is appropriate. The appellants were terminated from their employment under the TWEP project, not because of an administrative determination that they were ineligible, but because the funds allocated to the project had become exhausted. No one contends that the appellants had a constitutional right that the project be continued; so there is no occasion for a hearing in order that the reasons for the termination might be argued.

Judge Battin, in his “Memorandum Opinion And Order,” from which this appeal is taken, found that “the ending of TWEP in April did not effectively terminate the plaintiffs’ receipt of ordinary general assistance, for all they had to do to continue to receive checks in substantially the same amounts was to indicate their desire to do so.” There clearly was evidence to support such a finding; thus, there is no occasion for a hearing to establish the eligibility of the petitioners to continue as beneficiaries under the general relief program.

There is some indication that, due to lack of communication or through administrative inefficiency, some of the Indians affected by the termination of the TWEP program were not promptly picked up on the relief rolls. But such unfortunate occurrences hardly form the basis for a Goldberg mandated hearing.

I would affirm Judge Battin’s dismissal of the action for the reasons stated in his Memorandum Opinion.


author: CECIL, Senior Circuit Judge.

text:
    ARNOLD GRAPHICS INDUSTRIES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    No. 73-2189.
    United States Court of Appeals, Sixth Circuit.
    Nov. 5, 1974.
    Donald N. Jaffe, M. Alfred Roemisch, Cleveland, Ohio, for petitioner.
    Elliott Moore, Peter Nash Deputy Associate Gen. Counsel N. L. R. B., Washington, D. C., John Irving, Patrick Hardin, Paul Speilberg, Stephen D. Quinn, N. L. R. B., Pittsburgh, Pa., for respondent.
    Before PHILLIPS, Chief Judge, PECK, Circuit Judge, and CECIL, Senior Circuit Judge.
   CECIL, Senior Circuit Judge.

This case is before the Court on petition of Arnold Graphic Industries, Incorporated, to review an order issued against it by the National Labor Relations Board, respondent, on October 11, 1973. (Sec. 160(f) Title 29, U.S.C.) The order and decision of the Board is reported at 206 N.L.R.B. No. 43. The Board has filed a cross-application for enforcement of its order. Although the subject of this action is a plant in Franklin, Pennsylvania, this Court has jurisdiction over the proceeding for the reason that the Company’s headquarters and principal place of business are in North Canton, Ohio. .

The Company is engaged in printing and related lines and in addition to the Franklin, Pennsylvania plant, operates three other plants, located at Cleveland, Ohio, Gastonia, North Carolina and Hagerstown, Maryland. At the time of the inception of the difficulties, herein described, the Franklin plant employed about one hundred fifty persons, all of whom were members of and represented by three unions. These unions were: the International Brotherhood of Pulp, Sulphite and Paper Mill Workers, Local No. 262, Franklin Printing and Pressmen and Assistants Union, Local No. 90, and International Brotherhood of Bookbinders and Bindery Workers Union, Local No. 145, the charging Union in these proceedings. The Bookbinders Union, at this time had about twenty-five - members.

On February 29, 1972, the Regional Director of Region Six of the National Labor Relations Board filed a Complaint and Notice of Hearing on behalf of the Bookbinders Union against Arnold Graphic Industries, Inc., charging unfair labor practices in violation of Sections 8(a)(1), 8(a)(3) and 8(a)(5) of the National Labor Relations Act. The Union and the Company were represented by counsel and a trial was had before an Administrative Law Judge.

The alleged violations are: refusal to bargain in good faith with the Union; negotiating with the Union in bad faith with no intention of entering into a final bargaining agreement; unilaterally and without prior notice to the Union laid off all employees in the unit involved and purportedly discontinued the work of the employees in such unit; in September of 1971, withdrew recognition from the Union as exclusive bargaining representative of the employees in the unit involved; also in September 1971, unilaterally changed the working conditions of the employees in said unit; since October 1971 has refused to meet with the Union as the collective bargaining representative for' such employees; since September and October the petitioner has required the employees in the unit involved to become members of another Union; and that these employees have been required to pay dues and initiation fees in said Union.

It was stipulated that the last collective bargaining agreement between the parties expired on August 31, 1971. This was in accordance with an agreement by the three Unions of the Company for an extension from the expiration date from August 31, 1970. The three Unions were invited to a meeting on May 21, 1971 for the purpose of negotiating new contracts. The Bookbinders’ negotiating representative was unable to attend this meeting and so members of its Union sat in the meeting only as observers.

At the meeting the Company made an' offer to the three Unions which was the same as its new contract with the Union at the Hagerstown plant. It was explained to the three Unions that this proposal had been accepted by the Union at the Hagerstown plant. At the same time the Unions were told that the Franklin plant was unprofitable and that there was a question about what should be done with it. The Company offered its books for examination. The offers as made by the Company to the three Unions resulted in collective bargaining agreements between the Company and the two Unions other than the charging Union.

On June 1, 1971, a letter was written on behalf of the Bookbinders’ Union to Mr. Arnold, President of the Company, calling his attention to the expiration of its contract on August 31, 1971, and requesting- a bargaining meeting. Enclosed in the letter were proposed contract changes including an hourly rate of $4.50 per hour which was a 125 per cent increase over the old contract rate. On June 30, 1971, the Company accepted the termination as of August 31, 1971, unless a new contract was negotiated. A meeting was held on July 1, 1971, at the request of Arnold for the purpose of clarification of the Bookbinders’ demands. The Company regarded the Bookbinders’ demands as being unreasonably high. This meeting was attended by Mr. Gross, plant manager, and Mr. Gable for the Company. Mr. Cunic, bargaining representative for the Union, Gerald Detric, president of the Union and seven or eight others from the wages committee of the Union attended for the Union. Arnold was later told that the Bookbinders was serious in its demands.

The next meeting was held on August 6, 1971, with Arnold Gross, Gable and Roemiseh, Counsel for the Company, attending for the Company and Cunic, De-tric and the committee of employees in attendance for the Bookbinders. Arnold explained that the Union’s demands were much too high to permit the Company to meet its competition. The representatives of the Union then caucused and returned with reduced demands, about 60 per cent higher than the old contract. Arnold said that these demands were still too high and he explained to the Union representative that with a Union contract at Hagerstown in accordance with the terms offered to the Bookbinders, he could not send work to the Franklin plant. When the Union representatives said they were going to stand on their revised demands, Arnold told them he would take their proposals up with the Board of Directors. The Board of Directors met about one week later and at about the same time the government instituted the wage-price freeze of August 13, 1971.

No further communications were sent by either party until October 15, 1971. At this time Detric went to the plant to see Arnold, but he was in California. He claimed that he asked Gene Evans, the plant manager, to ask Arnold to set up a meeting and let him know of it. Arnold testified that Evans told him of Detric’s call but said nothing about a meeting. Neither party pursued the matter further.

On August 31, 1971, a letter was written on behalf of the Bookbinders saying that their employees would work past the expiration date of August 31st until the Wage-Price freeze end November 13, 1971. On September 22, 1971 Evans wrote to Detric, saying, that the Union contract had expired on August 31st and that the Company had phased out the operation which involved many of the Union members. He also stated that the Company would like to use some of the Bookbinders’ members in other occupations which would make them members, after thirty days, in the Pulp, Sulphite and Paper Mill Workers Union. He also stated that the Company considered the relationship with the Bookbinders’ Local terminated.

In November, 1971, the Union distributed substantially all of the money from its treasury to its members. Each member of the Union including those who were working received $225.

Upon the facts as herein above set forth, the Administrative Law Judge made findings as follows:

“I find, under the above facts, that there was good faith bargaining by the Respondent and that any allegation in the complaint to the contrary has not been sustained by a preponderance of the credited evidence. The facts show that Respondent did not put its offer on the table with a ‘take it or leave it’ attitude and a fixed determination not to bargain further. It did bargain further and it is clear that the Bookbinders made a final offer when it modified its demands on August 6, 1971. Respondent took this Offer to its Board of Directors thereby evidencing good faith in seriously studying the Bookbinders’ proposal. Of course the wage freeze became effective at this time and no one in the county (sp) knew for several days or weeks just how much wage increases would be permitted. I cannot find a failure on the part of Respondent to make the first move toward bargaining thereafter to be probative evidence of bad faith bargaining. There was a mutual responsibility.”

The General Council filed exceptions to the decision of the Administrative Law Judge and upon review the Board made the following conclusions of law in disagreement with the Administrative Law Judge.

1. The Company violated Section 8(a)(5) and (1) of the Act by withdrawing recognition from Local 145 (Bookbinders’ Union) as the exclusive bargaining representative of its employees in the appropriate unit on September 22, 1971.

2. The Company negotiated with Local 145 in bad faith with no intention of entering into any final and binding agreement, except on its own terms in violation of Section 8(a)(5) and (1) of the Act.

3. The Company violated Section 8 (a)(5) and (1) of the Act by recognizing the International Brotherhood of Pulp, Sulphite and Paper Mill Workers, Local 262, AFL-CIO, as the exclusive representative of employees in the appropriate unit represented by Local 145, who were recalled to work in August and September.

Upon our reading and study of the record we conclude that the findings of fact on which these legal conclusions of the Board are based are not supported by the evidence. Considering the record on these issues we conclude that the findings of the Administrative Judge are substantially supported by the evidence.

At the time of the meeting of August 6, 1971, the Company was moving the equipment used by the Bookbinders’ unit to the Hagerstown plant. At the same time members of the Union were being laid off. By September 13th all of the members of the Bookbinders’ unit had been laid off. There was no prior notice given to the employees or the Union concerning the removal of this equipment and there were no negotiations with the Union relative to the removal and the lay off of employees.

The Administrative Law Judge found that this unilateral action, the removal of the equipment used by the Bookbinders and the laying off of the members without first bargaining with the Union was a violation of Section 8(a)(5) and (1) of the Act. The Board agreed with this finding.

We will enforce the affirmative action required by the Board’s order relative to the unilateral action of the Company in removing equipment and laying off employees to the extent following :

“(c) Upon request bargain collectively with International Brotherhood of Bookbinders, Bindery Workers Union Local No. 145, AFL-CIO, about the effects of its decision to transfer equipment used by unit employees, including bargaining about the return of such equipment to its Franklin, Pennsylvania plant.
(d) Offer to all unit employees laid off at its Franklin plant during August and through September 13, 1971, immediate and full reinstatement to their former or substantially equivalent positions at Franklin, if the Respondent decides to resume operations there, and otherwise at Hagerstown without prejudice to their seniority or other rights and privileges, discharging if necessary any persons hired subsequent to the first layoff of a unit employee in August 1971; all in the manner set forth in the Remedy section of this Decision. If there are not a sufficient number of jobs for all the employees to be offered reinstatement, the Respondent shall place the names of those for whom jobs are not available on a preferential list in the order of their seniority, and, thereafter, offer them reinstatement before other persons are hired for such work.”

We do not enforce that portion of the order which requires the Company to make whole the employees of the unit laid off at Franklin during August through September 13, 1971, for any loss of earnings suffered by reason of the unilateral transfer of unit work to Hagerstown. This part of the order is not supported by substantial evidence.

On the contrary we are of the opinion that the reasoning of the Administrative Law Judge in footnote 2 of page 8 of the Tr. is supported by substantial evidence.

“2 A full restoration of the status quo ante of the parties is inappropriate in this case in view of: (a) Respondent’s history of harmonious labor relations with Bookbinders; (b) the absence of anti-union motivation in the unilateral actions; (c) the economic hardship to Respondent and to third party interests; and (d) Respondent’s willingness to recognize Bookbinders as stated by its counsel in closing argument. Jersey Farms Milk Service, Inc., supra.” (148 NLRB 1392)

Notice to each unit employee shall be mailed in accordance with that part of the order which we enforce.

The Regional Director for Region 6 shall be notified within twenty days from the date this decision becomes final, as to what steps the Company has taken to comply herewith.

The Board may reserve the right to amend or modify the order herein enforced if found necessary by reason of changed circumstances. The Board has been administratively advised that the International Brotherhood of Bookbinders, AFL-CIO, and the Lithographers and Photographers Union merged on September 4, 1972, to become the Graphics Art International Union, AFL-CIO, CLC.

Enforcement of the order of the Board is granted only to the extent set forth in this opinion. In all other respects enforcement is denied.


author: WIDENER, Circuit Judge: HIRAM H. WARD, District Judge CRAVEN, Circuit Judge

text:
    UNITED STATES of America, Appellee, v. Bonn BROWN, Appellant.
    No. 12872.
    United States Court of Appeals, Fourth Circuit.
    Argued March 5, 1974.
    Decided Nov. 12, 1974.

      Raymond W. Bergan, Washington, D.C., for appellant.
    John A. Field, III, U. S. Atty. (Robert B. King, Asst. U. S. Atty. on brief) for appellee.
    Before CRAVEN and WIDENER, Circuit Judges, and WARD, District Judge.
   WIDENER, Circuit Judge:

The defendant Brown was indicted in a one count indictment and subsequently convicted of conspiring to violate 18 U.S.C. § 1952. He was charged, along with Barron, Sawyers, Johnkoski, Gore and Schroath of conspiring to travel in interstate commerce and to use interstate facilities with the intent to carry on an unlawful activity, the activity being the giving and receiving of bribes under West Virginia law (W.Va. Code §§ 61-5-4 and 61-5-5). We vacate and remand for a new trial for reasons which follow.

The conviction was appealed to this court and affirmed in United States v. Sawyers, et al, 423 F.2d 1335 (4th Cir. 1970). Following the affirmance here, a petition for rehearing was filed which raised the following points; (1) the books of Southern Calvert Corporation were erroneously not required to bé produced and were excluded from evidence by the district court; (2) the Allen charge was erroneously given; and (3) the West Virginia bribery statutes involved in the case were unconstitutional. We denied the petition on grounds (1) and (2), but remanded on ground (3), although not previously raised in the appeal “ . . .to stay the order of conviction until the West Virginia Supreme Court has resolved the issue now pending before it of the constitutionality of Sections 4 and 5, Article 5, Chapter 61, of the West Virginia Code.”

Following remand, the West Virginia Supreme Court held the statutes involved to be constitutional, and also held that a person in Johnkoski’s position could not have been bribed under the West Virginia statutes mentioned in the indictment because not a ministerial officer within the meaning of the statutes.

The district court had treated Johnkoski, the Deputy State Highway Commissioner, as a ministerial officer of the State during the trial. And we hasten to add that, absent authoritative guidance from a State court, its ruling on this question seems quite correct. But the West Virginia Supreme Court has since found otherwise, and we are bound by its ruling on this matter of State law.

On appeal, the defendant now claims that, since Johnkoski was not a ministerial officer of the State, and since some of the acts for which he may have been convicted might have involved only himself and Johnkoski, who may not be guilty of accepting a bribe under West Virginia law, his conviction must be set aside. The United States argues that we should not take a narrow view of the State statute involved. It points out that the evidence against Brown is ample to convict, and that, in all events, Brown did not raise the point here pressed on his direct appeal and the ruling of the West Virginia Supreme Court was beyond the scope of the remand.

The indictment itself charges a violation of 18 U.S.C. § 1952 “in violation of Sections 4 and 5, Article 5, Chapter 61, of the Code of West Virginia.” Since the indictment charged the violation of specific code sections (we imply no criticism on this account), and the West Virginia Supreme Court has construed those sections, whether we read them broadly or narrowly is of no moment, for we are bound by the State construction. Our view of the statutes is thus circumscribed, and Johnkoski may not be considered a ministerial officer subject to accepting a bribe.

We agree with the government that the evidence is ample to sustain a conviction under many theories of the ease. But the case was submitted to the jury on the basis that if “one or more of such persons do any act to effect the object of the conspiracy,” he might be found guilty. While this is a correct charge, the difficulty is that the jury might well have believed that Brown and Johnkoski alone were involved in one of the many instances of bribery which the evidence tended to show and based its verdict against Brown on such belief. Since Johnkoski was not subject to accepting a bribe under §§ 4 and 5, of Article 5, Chapter 61, of the West Virginia Code, a conviction which might be based on the belief by the jury that he was a ministerial officer as defined by the Code sections may not stand. We repeat, the district judge had no way of anticipating the rulings of the West Virginia court in Carson and Gillespie.

It is true that the defendant did not raise the claim now made in his direct appeal. But we think in the rare instance when a court of last resort has decided a matter of law binding on us, which results in an entirely different outcome of the ease under consideration, that we should heed the decision. See Yeaton v. United States, 5 Cranch 281, 3 L.Ed. 101 (1809); United States v. Chambers, 291 U.S. 217, 223, 54 S.Ct. 434, 78 L.Ed. 763 (1934); Hamm v. Rock Hill, 379 U.S. 306, 313, 85 S.Ct. 384, 13 L.Ed.2d 300 (1964); Bell v. Maryland, 378 U.S. 226, 237, 84 S.Ct. 1814, 12 L.Ed.2d 822; United States v. The Schooner Peggy, 1 Cranch 103, 110, 2 L.Ed. 49 (1801).

Vacated and remanded for a new trial.

HIRAM H. WARD, District Judge

(concurring):

The panel does not disagree that under the West Virginia Supreme Court’s interpretation of Sections 4 and 5, Article 5, Chapter 61 of the West Virginia Code in Carson and Gillespie a person occupying Johnkoski’s position is not a bribable public official. The trial of this case, unfortunately, occurred prior to those decisions, and the able District Judge instructed the jury (as any trial judge would have done under the circumstances) to include Johnkoski as such an official. Irrespective of what we may think of the majority opinions in Carson and Gillespie, we do agree that these decisions are binding upon us.

The indictment here charged the defendant, and others, with conspiring to violate 18 U.S.C. § 1952 and is premised upon the giving and receiving of bribes in violation of the West Virginia statutes referred to above. Therefore, if the jury believed the testimony of the witness, James Render, which involved only his activities with the defendant and Johnkoski, it could have convicted the defendant on this evidence alone pursuant to the Court’s instructions, subsequently made erroneous by Carson and Gillespie because Johnkoski was included as a bribable official. On the other hand there is an abundance of evidence by one Isadore Lashinsky of his illegal activities involving both Sawyers (who was a bribable public official under the statute) and Johnkoski which would drop the net over this defendant because of his activities with Johnkoski. Lashinsky originally refused to testify, asserting his Fifth Amendment right against self-incrimination, but subsequently testified under a grant of immunity.

The question at this point then becomes which one, or both, of these witnesses did the jury believe. If the answer is Render alone, the conviction cannot stand under the District Court’s instructions. If the answer is Lashin-sky, or both Lashinsky and Render, the conviction should be affirmed. These are questions that cannot be answered from the cold record without engaging in speculation and conjecture for we know not what transpired within the jury room. Consequently, I believe it my duty to vote for reversal and to remand for a new trial, while at the same time agreeing with the dissent that such “ . . . does not really help the defendant except to postpone the inevitable day . . . .”

CRAVEN, Circuit Judge

(dissenting) :

This is not a bribery case. Whatever may be said of the decision of the Supreme Court of West Virginia indicating that a person in the position of John-koski could not have been bribed under the West Virginia statute, or put more accurately, could be “bribed” with impunity, I would assume that any public employee of West Virginia is capable of committing the offense of common law bribery, and that alone, it seems to me, is a sufficient rationale to sustain the judgment of conviction.

As to the theory of violating the statutory bribery laws of West Virginia, I agree with the district judge that the evidence is simply overwhelming that Sawyers received bribes, and it is undisputed that Sawyers qualified under the West Virginia bribery statute as a pubfic official. I also agree with the district judge that the jury could not have failed to believe that anyone who bribed John-koski also bribed his superior officer Sawyers and that cash bribes came to Sawyers through Johnkoski.

I would affirm for the reasons stated by the able and experienced district judge. If there was error in failing to more carefully separate the roles of Sawyers and Johnkoski the evidence of the former’s receipt of bribes is so overwhelming that I have no difficulty concluding that any such error was harmless beyond a reasonable doubt. To reverse and remand this case for a new trial invokes the equivalent of an automatic reversal rule incompatible with Rule 52(a) Fed.R.Cr.P., and does not really help the defendant except to postpone the inevitable day of an unimpeachable guilty verdict.

      . State ex rel. Carson v. Wood, 154 W.Va. 397, 175 S.E.2d 482 (1970); State ex rel. Gillespie v. Wood, 154 W.Va. 422, 175 S.E.2d 497 (1970).

      . State ex rel. Carson v. Wood, 154 W.Va. 397, 175 S.E.2d 482 (1970).

      . State ex rel. Gillespie v. Wood, 154. W.Va. 422, 175 S.E.2d 497 (1970).

      . Since the error, if any, is not of constitutional magnitude, it is not necessary to apply such an extreme test. If we believe, and I do, that it is highly probable that the error did not affect the verdict, i. e., that the jury woulcl almost surely have convicted anyway even if told to disregard bribes given to John-koski only, then the judgment should be affirmed. See Traynor, The Riddle of Harmless Error 34, 35 (1970).


author: ENGEL, Circuit Judge.

text:
    Carolyn Ann KING, by Gerald E. King, her next friend, et al., Plaintiffs-Appellants, v. LITTLE LEAGUE BASEBALL, INC., a Federal Corporation, and S. B. Stanton, Agent for Little League Baseball, Inc., Defendants-Appellees.
    No. 73-1940.
    United States Court of Appeals, Sixth Circuit.
    Oct. 30, 1974.

      John M. Barr, Freatman, Barr & An-hut, Ypsilanti, Mich., Ronald Wm. Eg-nor, Bronson & Egnor, Ypsilanti, Mich., for plaintiffs-appellants.
    John H. Norris, Frederick J. Amrose, Monaghan, Campbell, LoPrete & McDonald, Detroit, Mich., for defendants-appel-lees.
    Before McCREE, MILLER and EN-GEL, Circuit Judges.
   ENGEL, Circuit Judge.

This is a sex discrimination case arising out of the refusal of the defendant Little League Baseball, Inc., to permit the local league which is chartered in Ypsilanti, Michigan, to operate while allowing a girl to participate on one of its little league teams. Plaintiffs sought injunctive relief under 42 U.S.C. § 1983, to protect rights allegedly secured by the Fifth and Fourteenth Amendments, and declaratory judgment relief under 28 U.S.C. §§ 2201 and 2202. District Judge Ralph M. Freeman dismissed the action upon motion, Federal Rule of Civil Procedure 12(b)(6), holding that there was “not sufficient state involvement in defendant Little League’s enforcement of its ‘no girls’ rule to bring it under color of state law. Hence this court does not have jurisdiction over the subject matter in this case”. We affirm on somewhat more narrow grounds than those contained in the trial judge’s memorandum opinion. The essential facts, as recited by the trial judge, follow.

Plaintiff-Appellant Carolyn King is a twelve year old girl whose residence is in Ypsilanti, Michigan. Plaintiff-appellant Ypsilanti Community American Little League (American) is an unincorporated voluntary association, existing under Michigan law. American was chartered by the defendant corporation as a member of the Little League on March 30, 1973. Chartering of local leagues by defendant is done on an annual basis.

Defendant-Appellee Little League Baseball, Inc. (Little League) is a Federal Corporation, chartered under Public Law 88-378, July 16, 1964. Its principal offices are in Williamsport, Pennsylvania. It conducts the Little League program through the chartering of local leagues such as plaintiff American. Regulation IV(i) of defendant’s official Regulations concerns the eligibility of players and provides: “Girls are not eligible”.

There is no little league baseball team for girls in the Ypsilanti area. On or about April 1, 1973, plaintiff King appeared at the tryouts for American. She received permission to try out for a team in the American League and to play for a team if qualified on the basis of ability. At a meeting of the Board of American on that same date, plaintiff-appellant King was granted permission to join the “Orioles” team strictly on the basis of her ability after tryouts. She practiced with the team and was designated by her coach to start in the opening game.

On or about May 7, 1973, defendant-appellee Little League through defendant-appellee Stanton, Director of District IY, informed American’s officers that if plaintiff-appellant King were allowed to remain on a team roster, appeared in uniform with the team, or continued practicing with the Orioles team, the Charter granted by defendant would be revoked immediately. Such revocation would cause plaintiff American:

(1) to have its insurance with defendant cancelled;
(2) not be able to have its champion team play other chartered Little League teams, especially the champion of rival Ypsilanti National Little League;
(3) not to be able to have its All Stars play in the Little League District tournament, whose winner can compete for a chance to play in the Little League World Series;
(4) to have its uniforms, equipment, bank account, etc., taken away by defendant; and
(5) not to be able to use the Little League designation on its uniforms, stationery, fund drives, or other things.

The Board of Directors of plaintiff American held a special meeting on May 7, 1973. In light of the above-mentioned communication from defendant Little League, the Board decided to drop plaintiff King from the Orioles team in order not to jeopardize the baseball recreation program for about 220 boys.

At a special meeting on May 8, 1973, the Ypsilanti City Council directed the City Manager to withhold use of city parks and baseball diamonds from plaintiff American or any “organization that practices any form of discrimination”. On the same day the Board of Directors of American met and decided to retain plaintiff-appellant King on the Oriole team. The Charter of plaintiff American was then revoked by defendant for violation of the rule forbidding girls to play. Plaintiffs subsequently brought this suit, alleging that defendant’s regulation and the enforcement thereof violate the Equal Protection Clause of the Fourteenth Amendment.

The trial judge observed candidly, “That there is some state involvement in little league activities on the local level is undeniable”. He then proceeded to compare the extent of alleged state involvement in the ease at bar with that in Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961), Smith v. YMCA of Montgomery, 316 F.Supp. 899 (M.D.Ala. 1970), aff’d. 462 F.2d 634 (5th Cir. 1972), Statom v. Board of Commissioners, 233 Md. 57, 195 A.2d 41 (1963), and Grafton v. Brooklyn Law School, 478 F.2d 1137 (2nd Cir. 1973). While Judge Freeman based his conclusion ultimately upon the absence of “significant state involvement in the management or decision-making of the private organization or institution”, he found similarity as well with the facts in Statom, supra, wherein two Negro boys were afforded relief after being denied membership in a boys’ club on account of their race, and commented:

“If the present case concerned racial discrimination, defendant Little League, like the boys’ club in Statom might well be deemed to have acted under color of law. But the state action is found more readily when racial discrimination is in issue than when other rights are asserted.”

We do not adopt the quoted language from Judge Freeman’s opinion, but rely instead upon a more immediate basis for affirmance. The posture of the case at the time suit was commenced, as pleaded in the complaint, demonstrates that plaintiffs did not state a cause of action against the named defendants, for which relief can be granted under 42 U.S.C. § 1983.

While there had been a long history of local little league baseball under the auspices of the national organization, it appears undisputed both from the well-pleaded facts in the complaint as well as from the evidence before the court that whatever the situation had been in the past, it had radically changed before suit was commenced. By that time, (a) the City of Ypsilanti had cut off use of its facilities to anyone, including defendant, who discriminated in their use; (b) the defendant national corporation had can-celled its charter with the local group; (c) the local little league plaintiff had admitted plaintiff King to membership on its team; and (d) baseball without discrimination as to sex was being played by the local league on the public playing fields of Ypsilanti with plaintiff King participating.

It must be remembered that the only defendants are the National Little League organization and its Regional Director. If any state action is to be found in the case, it has to be in the actions of those defendants and their conduct must meet the requirements of governmental involvement, Burton v. Wilmington Parking Authority, supra. Contrary to the usual action under 42 U.S.C. § 1983, the municipal and state authority, therefore, is aligned here with the plaintiffs and not against them.

It is to be noted further that this case was not pleaded as a class action, but was solely directed to the local problem arising out of Carolyn Ann’s participation. While it is true that the defendant national organization was incorporated by act of Congress, it was not by reason thereof a public agency, any more than its corporate actions would have been deemed state action, had it been incorporated under state law. No claim of pendent jurisdiction because of any breach of contract was asserted. The relationship between the parties was non-contractual, and each had the right to discontinue it at will. If the use of municipal facilities for boys-only little league baseball was violative of Fourteenth Amendment rights, the remedy for it had already been effectively applied before suit was commenced by removal of all state involvement in the conduct complained of.,- Plaintiffs thus found themselves before suit where the plaintiffs in Statom v. Board of Commissioners, supra, hoped to find themselves after suit. In Statom the plaintiffs sought to enjoin the use by the club facilities until it admitted Negro boys to non-segregated participation in the club activities. This is precisely what the plaintiffs have already done in this case, and without the necessity of court intervention.

In Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972), plaintiff Irvis, while the guest of a member of the Moose Lodge, was refused service of an alcoholic beverage because of his race. In his suit, Irvis sought to have the lodge’s liquor license revoked so long as it continued its discriminatory practices. A majority of the Supreme Court held that the issuance of a club liquor license to an otherwise purely private club did not create sufficient involvement by the private club with the state to render the actions of the local club “state action” within the purview of the Equal Protection Clause. At the same time, it held invalid a state liquor regulation insofar as it was construed to compel a local lodge or members to comply with racially discriminatory provisions of its by-laws and constitutions. The court held that while plaintiff was entitled to such a decree, “he was entitled to no more”, Moose Lodge v. Irvis, supra, p. 179, 92 S.Ct. p. 1974. By the same token, if plaintiffs here were entitled to anything in their dispute with the defendant, it was at best the withdrawal of state action and participation in the activity complained of. This they had already accomplished before suit was started.

Since the complaint, therefore, did not state a claim upon which relief could be granted, it was properly subject to dismissal. We need not, therefore, reach the interesting questions of whether there is a rational basis for discrimination on account of sex in the baseball activities of children of this age, nor whether classifications based upon sex are inherently suspect. See Frontiero v. Richardson, 411 U.S. 677, 93 S.Ct. 1764, 36 L.Ed.2d 583 (1973); Kahn v. Shevin, 416 U.S. 351, 94 S.Ct. 1734, 40 L.Ed.2d 189 (decided April 24, 1974).

Affirmed.

      . Following oral arguments before this court there were published reports to the effect that defendant, national organization planned to drop its boys-only policy. This prompted the court, through the clerk, to inquire of the parties if the case might therefore be disposed of by voluntary or stipulated dismissal. While no such agreement was reached, the defendant did indicate in response to the court’s inquiry that it “bus eliminated and no longer enforces its former rule which rendered girls ineligible to participate. It has petitioned Congress for an amendment to its charter to declare that girls can play.” We do not consider this unilateral declaration, however, a sufficient basis for dismissal of the case for mootness, at least in the absence of agreement as to the facts on the part of appellants.


author: CHOY, Circuit Judge:

text:
    The NORTHERN CHEYENNE TRIBE, Plaintiff-Appellee, v. NORTHERN CHEYENNE DEFENDANT CLASS OF ALLOTTEES, HEIRS AND DEVISEES, Defendant-Appellant. The NORTHERN CHEYENNE TRIBE, Plaintiff-Appellee, v. Elva L. Littlechief WILLIAMSON and James Bowen, Defendants-Appellants. The NORTHERN CHEYENNE TRIBE, Plaintiff-Appellee, v. Myron L. LITTLEBIRD, Defendant-Appellant.
    Nos. 73-1545 to 73-1547.
    United States Court of Appeals, Ninth Circuit.
    Oct. 17, 1974.

      Lewis E. Brueggemann (argued). Billings, Mont., for appellants in 73-1545.
    Robert W. Holmstrom (argued), of Longan & Holmstrom, Billings, Mont., for appellees in all three cases.
    Steven L. Bunch, of Montana Legal Services Association, Helena, Mont, (argued),'for appellants in 73-1546.
    Otis L. Packwood, U. S. Atty. (argued), Billings, Mont., for appellants in 73-1547.
    Before WRIGHT and CHOY, Circuit Judges, and PALMIERI, District Judge.

       The Honorable Edmund L. Palmieri, Sr. United States District Judge for the Southern District of New York, sitting by designation.

      . Under the Act of July 24, 1947, the timber on the allotted land was declared to be the property of the allottees. 61 Stat. 418. In 1961, Act of September 22, 1961, 75 Stat. 586, the Act was amended so that at the expiration of the fifty year period the minerals “shall become the property of the respective allottees or their heirs or devisees, subject to any outstanding leases, regardless of any prior conveyance by such allottee, heirs, or devisees of the land overlying such minerals, oil, gas, or other natural deposits ...” Further, title to the minerals was to be “held by the United States in trust for the Indian owners, except that if upon the expiration of said fifty years the entire Indian interests in the minerals within any allotment or parcel thereof is granted by this Act to a person or persons who at that time hold an unrestricted title to the lands overlying such minerals, oil, gas, or other natural deposits, then the Secretary of the Interior shall by fee patent transfer to such person or persons the unrestricted fee simple title to such minerals, oil, gas, or other natural deposits, which title shall vest in such person or persons as of the date of the patent.”

   CHOY, Circuit Judge:

The Northern Cheyenne Tribe, at the direction of Congress, brought this action in the district court under a special grant of jurisdiction against appellants, individual owners, and class representatives of all allottees, their heirs and dev-isees, owning allotments of land within the tribal reservation. At stake are the rights to the mineral deposits contained in and beneath these lands. In 1968, Congress reserved these deposits in perpetuity for the benefit of the tribe, provided the tribe instituted this suit “to determine whether under the provisions of the Act of June 3, 1926 [44 Stat. 690], as amended, the allottees, their heirs or devisees, have received a vested property right in the minerals which is protected by the fifth amendment.” Act of July 24, 1968, 82 Stat. 424, 425. The district court held that no vested property rights were received and awarded judgment for the tribe, 349 F.Supp. 1302 (D.Mont. 1972). This appeal followed. We reverse.

The Act of June 3, 1926 as Amended

Pursuant to its then existing policy under the General Allotment Act of 1887, 24 Stat. 388, of ending the Indians’ communal land holdings and substituting therefore the private ownership of the reservation lands, Congress in 1926 ordered the allotment of specific tracts of land in the Northern Cheyenne reservation in Montana. In the first section of the Northern Cheyenne Allotment Act (the Act), Congress declared the reservation lands to be the property of Northern Cheyenne Indians, “subject to such control and management of said property as the Congress of the United States may direct.” 44 Stat. at 690. Section 2 authorized the Secretary of the Interior to prepare a complete roll of these Indians along with a list of lands suitable for agriculture and grazing. A tract not exceeding 160 acres of such land was then to be allotted in severalty to each of the duly enrolled Indians for whom the reservation was set apart, and a trust patent issued for this land. Classified as a homestead of the individual allottee, the land was to be held in trust for him by the United States, and was to remain inalienable and nontaxable for a period of twenty-five years from the issuance of the patent, or until the death of the allottee.

In the part of the Act which is most critical here, Congress reserved the land’s timber and mineral deposits for the benefit of the tribe for a period of years. Section 3 states:

“That the timber, coal or other minerals, including oil, gas, and other natural deposits, on said reservation are hereby reserved for the benefit of the tribe and may be leased with the consent of the Indian council under such rules and regulations as the Secretary of the Interior may prescribe: Provided, That at the expiration of fifty years from the date of the approval of this Act the coal or other minerals, including oil, gas, and other natural deposits, of said allotments shall become the property of the respective allottees or their heirs: Provided further, That the unallotted lands of said tribe of Indians shall be held in common, subject to the control and management thereof as Congress may deem expedient for the benefit of said Indians.” 44 Stat. at 691.

After several other changes in the Act, on July 24, 1968, Congress enacted P.L. 90-424, 82 Stat. 424, which amended Section 8 of the Act to read as follows:

“(a) The coal or other minerals, including oil, gas, and other natural deposits, on said reservation are hereby reserved in perpetuity for the benefit of the tribe and may be leased with the consent of the Indian council for mining purposes . . . under such rules, regulations, and conditions as the Secretary of the Interior may prescribe.
(b) The unallotted lands of said tribe of Indians shall be held in common, subject to the control and management thereof as Congress may deem expedient for the benefit of said Indians.”

Thus, as a result of the 1968 amendment, the mineral deposits which under the Act were to become the allottees’ property in 1976, were instead declared to be the property of the tribe in perpetuity. The question presented is whether the allottees received rights to the minerals through the Act which are constitutionally protected against impairment by the 1968 amendment. The answer to this question in turn depends upon the intent of Congress in 1926 when it reserved the minerals for fifty years, but provided that thereafter they would become the property of the allot-tees.

The district court held that Congress had reserved to itself sufficient powers (1) to preclude any vesting of rights in the allottees and (2) to preserve its right to extend in perpetuity the trust period of the mineral estate. The court reasoned that the allottees received no rights in the minerals when Congress reserved them for the tribe; that this reservation severed them from the allotted lands, creating two separate estates, one surface and one mineral, with only the surface estate passing to the allottees, while the minerals became part of the unallotted tribal lands. Since Congress, in section 3 of the Act, had explicitly reserved the power to manage and control such unallotted land, the court concluded that the reallocation of the minerals to the tribe was but a valid exercise of this power. In addition, the court found that Congress’s more broadly stated power in section 1, of management and control over the reservation lands, indicated that it intended to retain its plenary authority over the mineral rights. Finally, the court concluded that the language in section 3, referring to the minerals which “shall become the property of the individual allottees,” when compared with other language stating that the land “is hereby, declared to be the property” of the allottees, showed that Congress created only an inchoate or prospective right to the minerals, rather than a present vested one. 349 F.Supp. at 1308-1309.

We believe the district court erred when it considered the mineral deposits as unallotted tribal land subject to reap-propriation, when Congress, by its unconditional, noncontingent grant of these deposits to the allottees, evidenced an intent to create rights to the minerals in their favor. Under the Fifth Amendment, these rights, belonging to the individual allottees incident to their ownership of the allotted lands, could not be divested absent compliance with due process of law or payment of compensation.

Reserving Mineral Deposits

It had been Congress’s policy in several other allotment statutes, where the lands contained potentially valuable mineral resources, to allot the surface estate while reserving for the tribe for a period of years the minerals beneath these lands. E. g., Act of March 3, 1921, 41 Stat. 1355 (Fort Belnap Indians); Act of June 4, 1920, 41 Stat. 751 (Crow Indians) ; Act of June 28, 1906, 34 Stat. 539 (Osage Indians). In each of these prior acts, however, the future interest of the allottees at the expiration of the term fixed was clearly made contingent upon Congress not acting to the contrary. Thus, where Congress had retained the power to extend the period of the Osage Indians’ tribal ownership, it has been held that the allottees could not prevent this extension based on a claim that they had received vested rights to those minerals. Adams v. Osage Tribe of Indians, 59 F.2d 653 (10th Cir. 1932); see Taylor v. Tayrien, 51 F.2d 884 (10th Cir. 1931).

The 1926 Act on the other hand contains no language qualifying or conditioning the allottees’ remainder interest in the mineral deposits. The rather conspicuous omission of such language from a statute dealing with the same subject as the previous legislation, indicates that Congress intended to create rights in the Northern Cheyenne allottees different from those in the other allotment statutes.

Although we reach the opposite result here from that in Adams, supra, the rationales for both cases are entirely consistent. In construing the language of the Osage Allotment Act, 34 Stat. 539, as amended, the court in Adams followed the

“established rule that treaties and legislative acts that deal with Indians and their affairs are to be taken in accord with common understanding, not in their technical sense, but in the sense that an illiterate people would understand them.”

59 F.2d at 654. The court found that language “simple and plain, and its meaning clear to common understanding.” Id. at 655. The provision granting the minerals “unless otherwise provided for by Act of Congress” clearly reserves in Congress the power to alter, extend or otherwise modify the allottees’ interest.

There is no such clear expression of Congress’s retained power in this case. While it is technically correct that the reservation to the tribe severs the minerals from the allotted lands, making them part of the unallotted tribal property, and thereby confers upon Congress the power to change the beneficiaries of such tribal lands, the ultimate result of such analysis would be Congress’s achieving through the back door what it had never specifically claimed when it went through the front. Viewing the reservation for the tribe not in this technical sense but in the way the Indians would understand it, the minerals were never declared to be a part of the unallotted lands. In the plain words of the statute, the minerals were simply reserved, or set aside, for the benefit of the tribe for a fixed term of fifty years, thereafter to become the property of the allottees, with no conditions attached to their receipt of these minerals. It is this meaning of the statute that creates a right to the minerals in favor of the allottees. Under Adams it should be controlling. Where either of two interpretations of the language used by Congress is possible, one having a technical meaning and the other as naturally understood by the Indians, the natural meaning of the words must prevail, sincé statutes passed for the benefit of the Indians are to be liberally construed and all doubts are to be resolved in their favor. Squire v. Capoeman, 351 U.S. 1, 6-7, 76 S.Ct. 611, 100 L.Ed. 883 (1956); Carpenter v. Shaw, 280 U.S. 363, 367, 50 S.Ct. 121, 74 L.Ed. 478 (1930); Choate v. Trapp, 224 U.S. 665, 675, 32 S.Ct. 565, 56 L.Ed. 941 (1912); Stevens v. C. I. R., 452 F.2d 741, 744 (9th Cir. 1971); Arenas v. Preston, 181 F.2d 62, 66 (9th Cir. 1950).

The Allottees’ Rights in Allotted — Versus Unallotted — Lands

The power reserved by Congress in section 1 of the 1926 Act, over the reservation lands, cannot be the basis for any extinguishment of the allottees’ rights in their allotted lands. “Reservation land is divided into two classes: land allotted to individual Indians for the use and benefit of the allottee; and common tribal land used for the benefit of the entire community. . . .” C. I. R. v. Walker, 326 F.2d 261, 262 (9th Cir. 1964). There is a broad distinction between such tribal property held in common and the private property held by the individual allottee. Choate v. Trapp, supra 224 U.S. at 671, 32 S.Ct. 565. See United States v. Oklahoma Gas & Electric Co., 127 F.2d 349, 353-354 (10th Cir. 1942).

It is undoubted that as regards tribal property Congress maintains plenary authority to make such changes in the management and disposition thereof as it deems necessary in order to promote the welfare of the Indians. Morrison v. Work, 266 U.S. 481, 485, 45 S.Ct. 149, 69 L.Ed. 394 (1925); Gritts v. Fisher, 224 U.S. 640, 648, 32 S.Ct. 580, 56 L.Ed. 928 (1912); see United States v. Jim, 409 U.S. 80, 93 S.Ct. 261, 34 L.Ed.2d 282 (1972). And, so long as the land remains tribal in character the individual Indian has no vested right, as against the tribe, to any specific part of the tribal property. Gritts v. Fisher, supra; St. Marie v. United States, 108 F.2d 876 (9th Cir. 1940). See generally, F. Cohen, Handbook of Federal Indian Law 183 (1940).

Once the reservation land is allotted in severalty and a trust patent issued, however, though legal title is retained by the United States, the allottee acquires an equitable interest in the property, which except for the restriction on alienation, gives him the virtual fee in the land. United States v. Paine Lumber Co., 206 U.S. 467, 473, 27 S.Ct. 697, 51 L.Ed. 1139 (1907); Arenas v. Preston, supra, 181 F.2d at 64; United States v. Minnesota, 113 F.2d 770, 773 (8th Cir. 1940); Eastman v. United States, 28 F.Supp. 807, 808 (W.D.Wash. 1939). The Supreme Court considered the nature of the allottees’ interest in Choate v. Trapp, supra, where Congress had allotted lands to the Choctaw and Chickasaw Indians. The lands were declared to be non-taxable for a period of twenty-five years. Some ten years later, Congress enacted further legislation which permitted state taxation of these unrestricted lands. The Court held

“[T]he provision that the land should be non-taxable was a property right, which Congress undoubtedly had the power to grant. That right fully vested in the Indians and was binding upon Oklahoma. .
“. . . Under the provisions of the 5th Amendment there was no more power to deprive [the allottee] of the exemption than of any other right in the property. No statute would have been valid which reduced his fee to a life estate, or attempted to take from him 10 acres, or 50 acres, or the timber growing on the land.
After he accepted the patent the Indian could not be heard, either at law or in equity, to assert any claim to the common property. If he is bound, so is the tribe and the government when the patent was issued.” 224 U.S. at 673-674, 32 S.Ct. at 569.

Similarly, here, the Northern Cheyenne Indians received a vested right to the minerals incident to their allotments. Congress was without power subsequently to divest them of that right. That Congress realized it may have exceeded even its own plenary power to deal with tribal property (United States v. Jim, et al., supra) in enacting the amendment of July 28, 1968, here in issue (p. 269, supra) is evidenced by the unusual nature of the enactment itself. The 1968 amendment to the 1926 Allotment Act, attempting to reserve the mineral deposits to the tribe in perpetuity, is wholly provisional, and explicitly leaves the validity of the enactment entirely up to the court.

The judgment permitting such divestiture is reversed and remanded to the district court for further proceedings consistent with this opinion.

Reversed and remanded.

      . Tlie mineral deposits in the allotted lands of the Fort Belnap Indians were reserved for the tribe for fifty years, thereafter to become the property of the individual allottee or his heir, “but the right [was] reserved to Congress to extend the period within which such reserved tribal rights shall expire.” 41 Stat. at 1359. The reservation for the Crow Indian tribe similarly provided that “unless otherwise ordered by Congress” these mineral deposits “shall become the property of the individual allottee or his heirs . . . ” 41 Stat. at 753. And, in the case of the Osage Indians, the future mineral rights were awarded to the allottees “unless otherwise provided for by Act of Congress.” 34 Stat. at 542; see also Act of June 30, 1919, 41 Stat. 3, 17, where the mineral deposits were “reserved for the benefit of the Blackfeet Tribe of Indians until Congress shall otherwise direct. . . . ”

      . British-American Oil Producing Co. v. Board of Equalization, 299 U.S. 159, 164-165, 57 S.Ct. 132, 81 L.Ed. 95 (1936). In this case, the Court held that Congress may consent to state taxation levied on the production of oil under tribal lands. The statute involved was that reserving the mineral deposits on the Blackfeet Indian reservation (see note 2 supra), Act of June 30, 1919, 41 Stat. 3, 16, 17, for the tribe “until Congress shall otherwise direct.” Thus, the case concerned only tribal rights in the mineral deposits. To the extent that the Court determined that a mineral reservation severs this estate and makes it unallotted land, we believe that the facts here, which pertain to individual property rights, are distinguishable and we therefore are not bound by this language.

      . See United States v. Jim, 409 U.S. 80, 93 S.Ct. 261, 34 L.Ed 2d 282 (1972).

      . Nominally the dispute in this case is between the tribe on one side and the class of allottees, heirs and devisees on the other. But the actual controversy involves not these parties, but appellants, some of whom are Indians, claiming rights in the minerals beneath their lands, and Congress which by the 1968 Act seeks to extinguish these claimed rights. As the district court stated: “If the [appellants] lose what they claim they are entitled to under the Northern Cheyenne Allotment Act it will be because Congress has so directed. If they prevail, it will be because that direction was beyond Congress’s congressional power to impose.” 349 F.Supp. at 1307 n. 17.

      . The statute reads iu pertinent part: If the court determines that the allottees, their heirs or devisees, have received a vested interest in the minerals which is protected by the fifth amendment, or if the tribe does not commence an action as here authorized within two years from the date of this Act, the first section of this Act shall cease to have any force or effect, and the provisions of section 3 of the Act of June 3, 1926, as amended by the Acts of July 24, 1947, and September 22, 1961, shall thereupon be carried out as fully as if section 3 had not been amended by this Act. Act of July 24, 1968, 82 Stat. 424, 425.


author: LEVIN H. CAMPBELL, Circuit Judge.

text:
    In the Matter of Gerald A. MASCOLO, Bankrupt, Appellant.
    No. 74-1069.
    United States Court of Appeals, First Circuit.
    Heard May 8, 1974.
    Decided May 23, 1974.

      Frederick T. Golder, Boston, Mass., with whom Goldberg & Golder, Boston, Mass., was on brief, for appellant.
    Herbert D. Friedman, Boston, Mass., with whom Morris M. Goldings, and Mahoney, Atwood & Goldings, Boston, Mass., was on brief, for appellee.
    Before COFFIN, Chief Judge, and McENTEE and CAMPBELL, Circuit Judges.
   LEVIN H. CAMPBELL, Circuit Judge.

Mascolo appeals from an order of the district court affirming the referee’s revocation of his discharge in bankruptcy. Mascolo filed a voluntary petition on October 26, 1970, and was granted a discharge on January 26, 1971. Within one year thereafter creditor Rita Girl, Inc. applied to revoke the discharge asserting that it had been obtained by fraud and that the bankrupt had committed an offense punishable by imprisonment under 18 U.S.C. § 152. Rita Girl claimed that Mascolo knowingly and fraudulently swore that he had maintained no bank accounts within the two years immediately preceding his filing, but that in fact he had maintained an account with the First National Bank of Boston. The referee later permitted the creditor to amend the application to include accounts at two additional banks.

The referee, after a hearing, adjudged and decreed that “the discharge was obtained by the bankrupt, through fraud .” In his Findings of Fact, Conclusions of Law and Order, the referee found that Mascolo had maintained bank accounts at the First National Bank of Boston, the National Shawmut Bank, and the Capitol Bank and Trust within the relevant period. He also found:

“In the Statement of Affairs which accompanied the voluntary petition, and which the bankrupt signed stating that T, Gerard A. Mascolo, the person who subscribed to the foregoing statement of affairs, do hereby make solemn oath that the answers therein contained are true and complete as to the best of my knowledge, information, and belief,' as to question number 4. Bank Account and safe deposit boxes — a. What bank account have you maintained, alone or together with any other person, and in your own or any other name, within the two years immediately preceding the filing of the original petition herein? (Give the name and address of the bank or other depository, the name in which each box or other depository was kept, the name of every person who had the right of access thereto, a brief description of the contents thereof, and, if surrendered, when surrendered, or, if transferred, when transferred and the name and address of the transferee). [sic] the bankrupt answered ‘none’.”

Mascolo argues on appeal that the creditor did not sustain its burden of proof that fraud, rather than mere error, was involved. According to Mascolo, a false oath must contain all the elements involved in common law perjury — “intentional untruth in a matter material to an issue which is itself material.” Troeder v. Lorsch, 150 F. 710, 713 (1st Cir. 1906). But even under this standard, the creditor may prove his case by a fair preponderance of the evidence; despite the analogy to criminal perjury, he need not meet the higher criminal burden. And once it reasonably appears that the oath is false, the burden falls upon the bankrupt to come forward with evidence that he has not committed the offense charged. Shanberg v. Saltzman, 69 F.2d 262 (1st Cir. 1934). See also American National Bank v. Rainguet, 323 F.2d 881 (10th Cir. 1963). The trier of fact may rely upon reasonable inferences as well as direct evidence. Thus, the trier may infer fraudulent intent from an unexplained false statement. See In the Matter of Kaufhold, 256 F.2d 181 (3d Cir. 1958); 1A J. Moore & J. Mulder, Collier On Bankruptcy ¶ 14.25, at 1336 (King ed. 1974).

Asserting that fraud should not be inferred when there are extenuating circumstances, Mascolo claims in his brief that the omission of “the two bank accounts was through inadvertence of the bankrupt’s counsel”, and that when he learned he had written “none” on the statement “he was stunned”. Mascolo also states that the “bankrupt prepared the various schedules . . . with his attorney.” We agree that an explanation by a bankrupt that he had acted upon advice of counsel who in turn was fully aware of all the relevant facts generally rebuts an inference of fraud. See In re Topper, 229 F.2d 691 (3d Cir. 1956); Jones v. Gertz, 121 F.2d 782 (10th Cir. 1941); In re Stone, 52 F.2d 639 (D.N.H.1931). But we cannot find that Mascolo or his attorney ever offered such an explanation in proceedings before the referee. Mascolo himself, when asked whether he had maintained any bank accounts, answered that he had had both a cheeking and saving account in two banks. When shown a contrary written statement, he responded:

“I did answer the question. I did sign the paper. Okay. It should have been that there were two accounts. All right? That’s all I can say.”

Mascolo did not claim that he had forgotten about the accounts or had not realized that he was to include accounts closed at the time of filing. Cf. Shelby v. Texas Improvement Loan Co., 280 F.2d 349 (5th Cir. 1960); In re Applebaum, 11 F.2d 685 (2d Cir.), cert. denied, 273 U.S. 712, 47 S.Ct. 102, 71 L.Ed. 853 (1926); Bylin v. Bakken, 7 F.2d 614 (8th Cir. 1925). In the absence of extenuating circumstances the referee was entitled to infer that the statement was fraudulent. See Diorio v. Kreisler-Borg Construction Co., 407 F.2d 1330 (2d Cir. 1969); Aronofsky v. Bostian, 133 F.2d 290 (8th Cir. 1943).

The district court followed the well established rule that it would be bound by the referee’s findings of fact unless they are clearly erroneous. See In re American Packers Exchange, Inc., 449 F.2d 1313 (1st Cir. 1971); Schwartz v. J. R. Cianchette & Sons Corp., 362 F.2d 500 (1st Cir. 1966); Brown v. Freedman, 125 F.2d 151 (1st Cir. 1942). Whether or not fraud as an “ultimate fact” should be reviewed differently, as Mascolo suggests, this record and the referee’s subsidiary findings amply support the ultimate conclusion.

Mascolo also contends that since the omissions were immaterial the trustee improperly concluded that the actual facts did not warrant a discharge. The brief on appeal states that the most money the bankrupt had at one time in two of the omitted banks was $150 and $350 respectively and that the accounts were closed more than six months prior to the bankrupt’s filing his voluntary petition. Mascolo asserts that he listed all the' bank accounts on a statement filed in a corporate bankruptcy and that the bank accounts were examined by the trustee in bankruptcy. The record, on the other hand, reveals merely that while the Shawmut account was closed sometime in 1969, the Capitol account was no longer open at the time of filing. There is no indication how long before the filing the latter account was closed. The Shawmut, moreover, was not mentioned on the corporate statement of affairs. Although at one point Mascolo testified that the trustee examined all his records, he twice said that he was not sure if the records of one of his personal bank accounts had ever been examined.

It is true that omission of an irrelevant matter or of property having no value is not necessarily fatal. See In re Tabibian, 289 F.2d 793 (2d Cir. 1961); Willoughby v. Jamison, 103 F.2d 821 (8th Cir.), cert. denied, 308 U.S. 588, 60 S.Ct. 111, 84 L.Ed. 492 (1939). But Mascolo’s false statement does not fall into that narrow category. Matters are material if pertinent to the discovery of assets, including the history of a bankrupt’s financial transactions. See Metheany v. United States, 365 F.2d 90 (9th Cir. 1966). The possibility of preference or fraudulent transfer makes an omission material. Keeble v. Sul-meyer, 290 F.2d 127 (9th Cir. 1961). Therefore, knowing and fraudulent omission of a bank account, whether or not it is closed at the time of filing, warrants the denial of discharge. See Avallone v. Gross, 309 F.2d 60, 61 (2d Cir. 1962). Referring to the omission of stocks and salary received several years before a voluntary filing where there was no suggestion that either was on hand at the time the petition was filed, Judge Swan has written:

“It cannot be doubted that the creditors are entitled to inquire into what property has passed through the bankrupt’s hands during a period prior to his bankruptcy. ... we think that wide latitude must be accorded to such an examination, and that the materiality of the false oath will not depend upon whether in fact the falsehood has been detrimental to the creditors.”

In re Slocum, 22 F.2d 282, 285 (2d Cir. 1927). See Duggins v. Heffron, 128 F.2d 546 (9th Cir. 1942). The successful functioning of the bankruptcy act hinges both upon the bankrupt’s veracity and his willingness to make a full disclosure.

Mascolo’s other objections are likewise without merit. The referee did not abuse his discretion by allowing an amendment of the creditor’s application to conform to evidence adduced at the hearing. See In re Magen, 218 F. 692 (E.D.Pa.1914). It was allowed within the year after discharge. An amendment is not prejudicial per se. The referee correctly observed that if Mascolo had been surprised, he should have requested a continuance.

In light of the presumption in favor of the referee’s findings, In re American Packers Exchange, Inc., supra., we see no reason to disturb the further findings that Rita Girl, Inc. was not guilty of laches and that knowledge of the fraud came to the creditor after the discharge had been granted. The referee correctly denied the bankrupt’s motion to dismiss the creditor’s application.

In conclusion, we note that appellant’s brief is replete with statements of purported fact which the record either does not support or contradicts. Counsel’s conduct in this regard is so far below acceptable standards that we are obliged to warn against its repetition at this bar. See ABA Code of Professional Responsibility Canon No. 7 (EC 7-3; DR 7-102 (A)(5)).

Affirmed.

      . 11 U.S.C. § 33: “The court may revoke a discharge upon the apjilication of a creditor who has not been guilty of laches, filed at any time within one year after a discharge has been granted, if it shall appear (1) that the discharge was obtained through the fraud of the bankrupt, that the knowledge of the fraud has come to the applicant since . the discharge was granted, and that the facts did not warrant the discharge;....”

      . 18 U.S.C. § 152 provides in part that “[w]hoever knowingly and fraudulently makes a false oath or account in or in relation to any bankruptcy proceeding” may be imprisoned. The statute governing the granting of a discharge states: “The court shall grant the discharge unless satisfied that the bankrupt has (1) committed an offense punishable by imprisonment as provided under section 152 of Title 18”. 11 U.S.C. § 32(c)(1).

      . It is not necessary to decide whether reckless indifference to truth is equivalent to fraud in false oath cases. See Diorio v. Kreisler-Borg Construction Co., 407 F.2d 1330 (2d Cir. 1960).

      . However, even the advice o£ counsel is.not a defense when it is transparently plain that the property should be scheduled. 1A J. Moore & J. Mulder, Collier on Bankruptcy U 14.23, n. 10 (King ed. 1974).

      . See In re Pioch, 235 F.2d 903 (3d Cir. 1956). Contra, In re Tabibian, 289 F.2d 793 (2d Cir. 1961); cf. Union Bank v. Blum, 460 F.2d 197 (9th Cir. 1972).