text:
    UNITED STATES of America v. James Warren. THOMPSON, Appellant.
    No. 72-1390.
    United States Court of Appeals, District of Columbia Circuit.
    Argued April 2, 1973.
    Decided March 27, 1974.

      Henry Lincoln Johnson, Jr., Washington, D. C., for appellant.
    Frederick C. Moss, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., John A. Terry and E. Lawrence Barcella, Jr., Asst. U. S. Attys., were on the brief, for appellee.
    Before LEVENTHAL and MacKINNON, Circuit Judges, and WYZANSKI, Senior United States District Judge for the District of Massachusetts.

       Sitting by designation pursuant to 28 U. S.C. § 294(d).

   LEVENTHAL, Circuit Judge:

Appellant James Thompson was convicted of possession of heroin with intent to distribute in violation of 21 U.S. C. § 841(a)(1). We affirm. In this opinion we consider appellant’s contentions that evidence seized in violation of the Fourth Amendment was improperly admitted at trial and that the evidence of appellant’s constructive possession of narcotics was insufficient. In accordance with this court’s plan to reduce unnecessary publication, we consign to an unpublished memorandum filed this date our consideration and rejection of appellant’s contention that the trial judge should have recused himself.

I. STATEMENT OF FACTS

On May 11, 1971, police officers of the Metropolitan Police Morals Division, Narcotics Branch, obtained warrants to search apartments 711 and 904 in a building at 1111 Massachusetts Avenue, N.W., Washington, D. C. The affidavits submitted in support of the warrants recited information obtained from unidentified informants to the effect that appellant Thompson kept narcotics at apartments 711 and 904, and that he had sold narcotics in apartment 711. A separate warrant authorized the search of each apartment, and the seizure of “narcotics, paraphernalia, instrumentalities, records and other contraband unlawfully held.”

Officers Battle and Seymour and several other members of the Metropolitan Police Department proceeded to the Massachusetts Avenue address to execute the warrants. Battle, the officer designated to search apartment 711, knocked at the door, announced his identity, and after waiting briefly forced open the door, finding appellant Thompson and a female companion inside. During the ensuing search Officer Battle found no narcotics but seized a .38 caliber Smith & Wesson revolver, some .32 and .38 caliber ammunition, and the following documents: a lease for apartment 711 in appellant’s name; a furniture lease agreement for apartment 711 in appellant’s name; three rent receipts in appellant’s name; a furniture leasing account card in appellant’s name; a similar account card in the name of Barbara Beecham, apartment 904; three rent receipts also in the name of Barbara Bee-cham, apartment 904; a television maintenance agreement in appellant’s name for a portable color television, and a pamphlet explaining the characteristics of a Rossi .38 caliber revolver.

At about the same time, Officer Seymour went to apartment 904, which he found unoccupied, and proceeded to search. In a closet Officer Seymour found glassine bags of white powder, later determined to be heroin, as well as the following paraphernalia: empty glassine envelopes, nylon strainers, measuring spoons, surgical masks, and containers marked “dextrose” and “quinine.” From a desk drawer Officer Seymour removed a .38 caliber Rossi revolver, an owner’s manual for a Sears portable color television set, a lease for apartment 904, a furniture lease agreement, and a lease from the Allstate Furniture Leasing Corporation in the name of Barbara Beecham, listing as the address apartment 904. From a television in the apartment, Seymour removed a sticker bearing the model and serial numbers and affixed the sticker to the owner’s manual.

Officer Seymour then went to apartment 711, which Officer Battle was searching, and there obtained a set of keys Battle had found on a sofa. Officer Seymour took the keys to apartment 904 and discovered that two of them fit the front door lock.

The police officers departed with the foregoing materials in their possession, together with appellant Thompson, under arrest and in custody.

The District Court denied appellant’s pre-trial motion to suppress the materials seized from apartment 711. At the trial, appellant took the position that the Government’s evidence failed to establish his occupancy of or control over apartment 904.

II. MATERIAL SEIZED FROM APPELLANT’S APARTMENT WAS PROPERLY ADMITTED AS EVIDENCE

A. Sufficiency of the affidavits.

The affidavits submitted by the police officers established probable cause to issue the warrants. The affidavit submitted for the warrant for apartment 711 alleged that two informants had observed appellant making sales of heroin and that a third informant had not only observed sales in apartment 711 but also had purchased heroin there using police department funds.

The affidavit for the warrant for apartment 904 was similar but contained the additional allegations that two informants had observed appellant remove narcotics from apartment 904 and take them to apartment 711. The affidavit also set forth the inference of the affiant that appellant was using apartment 904 as a place for storage of narcotics and added that “the affiant has found it to be a common practice for large scale narcotics drug dealers to have a second premises for the purpose of cutting and storing large quantitys [sic] of drugs.”

Both affidavits satisfy the requirements, mandated by Aguilar v. Texas, 378 U.S. 108, 114, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1967) and Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584, 21 L. Ed.2d 637 (1969), for disclosure of both the circumstances from which the informer has inferred that narcotics are present in the place to be searched, and the circumstances which support the informer’s credibility.

B. Evidence seized in appellant’s apartment (#711).

The materials seized in apartment 711 were (1) the Smith & Wesson revolver and ammunition; (2) the keys which Officer Seymour subsequently tried in the lock of apartment 904; and (3) the documents itemized above. Appellant contends that seizure of the keys and the documents exceeded the scope of the warrant.

1. The character of the materials justifies seizure under valid procedures.

The keys and the documents constituted evidence of appellant’s constructive possession of the narcotics found in apartment 904. The leases, rent receipts, and the account card that were in appellant’s name tended to establish his residence at apartment 711. The rent receipts and the account card in the name of Barbara Beeeham, apartment 904, and the keys found to fit the lock of apartment 904, tended to show that the resident of apartment 711 also had access to and control over apartment 904. The pamphlet describing the Rossi .38 caliber revolver also contributed to the inference of control of apartment 904, since such a firearm was found in that apartment. The television maintenance agreement found in 711 was apparently intended to have a similar probative effect. The foregoing items were properly seized evidentiary material, provided valid procedures were followed. Warden v. Hayden, 387 U.S. 294, 87 S.Ct. 1642, 18 L.Ed.2d 782 (1967); F.R.Cr.P. 41(b).

2. Seizure of keys, leases, rent receipts, and account cards was authorized by the warrant.

The search warrant for apartment 711 authorized seizure of “narcotics, paraphernalia, instrumentalities, records, and other contraband unlawfully held.” The skeletal language of the warrant is fleshed out by the contents of the affidavits, which established probable cause for the belief that appellant was carrying on a narcotics business utilizing two apartments and that he stored narcotics in apartment 904.

Construing the terms of the warrant in context, we believe the keys were properly seized as “instrumentalities” of the criminal enterprise in which the police had probable cause to believe appellant was engaging. Similarly, the leases, rent receipts, and account cards are fairly embraced by the authorization to seize “records.” Appellant urges that the police were authorized to seize only records of narcotics transactions, but that construction of the warrant is too narrow. Although more careful drafting would have eliminated any ambiguity, we believe the warrant should be read more broadly, as authorizing the seizure of all records establishing and confirming the operation of the narcotics business and appellant’s control of the two locations at which it was alleged to be carried on.

We have previously construed the terms of a warrant by reference to the underlying circumstances disclosed in the accompanying affidavit. Moore v. United States, 149 U.S.App.D.C. 150, 461 F.2d 1236 (1972). That course is appropriate here, with a warrant whose terms are sparse even when measured against the requirement that only the “generic class” of items to be seized must be described. See James v. United States, 416 F.2d 467, 473 (5th Cir. 1969), cert. denied, 397 U.S. 907, 90 S. Ct. 902, 25 L.Ed.2d 87 (1970). Our construction of the term “records” in light of the circumstances averts any attempt to use the naked word as an authorization to seize documents of any kind, thus raising the specter of a “general warrant.” See Stanford v. Texas, 379 U.S. 476, 85 S.Ct. 506, 13 L.Ed.2d 431 (1965). Our construction limits the term to documents having a commercial character, and we therefore do not reach any assertion of a broader police authority to rummage, read, and remove, applicable to all private papers.

Appellant’s control over apartment 904 being shown by the foregoing tangible items' and other evidence, we see no basis for reversal, and the judgment is

Affirmed.

      . The Plan For Publication of Opinions for this court, 101 Daily Wash.L.Kep. 1977 (1973), provides for disposition of cases without published opinion where the decision involves “routine application of established principles of law to a particular set of facts.” Dispositions without published opinions may be accompanied by explanatory memoranda, which though unpublished are part of the public records of the court. In this case we follow a further provision of the Plan for publication of only portions of an opinion, with the remainder contained in a memorandum accompanying the judgment. See also, Joinder, Limiting Publication of Judicial Opinions, 56 Judicature 195 (1972).

      . The pamphlet and the Rossi revolver were introduced at trial, together with a .38 caliber Smith & Wesson revolver found ' in apartment 711. Appellant objected to the introduction of the firearms, claiming that they were irrelevant and prejudicial. The Government argues that the pamphlet, found in apartment 711, describing the .38 Rossi found in 904, further established appellant’s connection with 904, and that introduction of the Smith & Wesson revolver found in 711 was necessary to negate the inference that the pamphlet described a gun which appellant kept in 711. While the introduction of the firearms perhaps constituted prosecutor-ial overkill in view of the other evidence connecting appellant to apartment 904, we would not find error in the admission of this kind of evidence. Our ruling must, however, take into account that the guns became relevant only when linked to the pamphlet describing the Rossi .38, and that we have not decided the validity of the seizure of the pamphlet itself. We conclude, however, that the admission of the pamphlet and the guns to bolster the inference of appellant’s control over apartment 904 was, if erroneous, harmless error (infra n. 8).

      . The maintenance agreement issued by Sears, Roebuck & Co. described the product covered as a “color portable TV, model number 4188.” The owner’s manual from apartment 904 describes a Sears portable color television, and the sticker affixed to the manual bears the model number “528.-41880000” with the digits “41880” underscored. Appellant’s brief concedes (p. 28) that the police found a “service contract on a color television which was found in . . . apartment [904].” Under the circumstances we conclude that the maintenance agreement was seizable material, though as we note below, infra, n.8, it is unnecessary to decide whether the seizure itself was lawful.

      . In Moore we held that language of the warrant could be narrowed by reference to the affidavit provided that the affidavit accompanies the warrant and is incorporated by reference therein, and we further noted that the requirement of incorporation would be satisfied by the common practice of the United States Magistrates for the District of Columbia of requiring annexation of the affidavit to the warrant and delivery of both documents at the premises searched. 149 U.S.App.D.C. at 154 n.6, 461 F.2d at 1240 n.6. It is not clear from this record whether the affidavit for apartment 711 was deliv- , ered to appellant at the time of the search, and there is the additional fact that neither the warrant nor affidavit for apartment 904 was given to him. We adhere to our view that the requirements of Moore represent sound practice. In this case, in which the crucial events occurred well before Moore, both affidavits, submitted simultaneously to the magistrate, were made by a member of the search detail and carried to the scene of the search. The circumstances do not embody the dangers we sought to avoid by the requirements announced in Moore, and we conclude construction of the warrant in light of the affidavits is appropriate.

      . Compare, e.g., the warrants described in United States v. James, supra, and United States v. Honore, 450 F.2d 31 (9th Cir. 1971), cert. denied, 404 U.S. 1048, 92 S.Ct. 728, 30 L.Ed.2d 740 (1972).

      . See Marron v. United States, 275 U.S. 192, 48 S.Ct. 74, 72 L.Ed. 1016 (1927). See also United States v. Scharfman, 448 F.2d 1352 (2d Cir. 1971), cert. denied, 405 U.S. 919, 92 S.Ct. 944, 30 L.Ed.2d 789 (1972).

      . There was testimony by one Kathleen Ci-chonski that appellant had entertained her alone in apartment 904 on several occasions, and testimony that latent fingerprints taken from apartment 904 matched those of appellant. The foregoing testimony and the tangible evidence described above plainly suffice to support a jury’s inference that appellant constructively possessed the narcotics and paraphernalia found in apartment 904.

      . We need not decide whether the other objects seized from apartment 711 — the pamphlet describing the .38 caliber Rossi reolver and the television maintenance agreement— came within the scope of the warrant or whether their seizure is alternatively supportable under the doctrine that allows police to seize obviously incriminating objects in “plain view” encountered inadvertently in the course of a lawful intrusion. See Coolidge v. New Hampshire, 403 U.S. 443, 466-468, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971). While the police may have been aware when they departed from the building that the two objects were material evidence tending to connect appellant with apartment 904, the lack of clarity in the record would require a remand to make this determination. We see no need to undertake such an inquiry, since any error in the admission of these objects was harmless. Their impact was cumulative with that of the other physical evidence and testimony that ended to show appellant’s control over apartment 904. Admission of the pamphlet allowed the further introduction of the firearms. While there are overtones of prejudice from any evidentiary use of firearms, they do not rise to reversible error here.


source: Caselaw Access Project

author: LEVENTHAL, Circuit Judge:

license: Public Domain

text:
    Carlos MARCELLO, Appellant, v. The ATTORNEY GENERAL OF the UNITED STATES.
    No. 72-2169.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Dec. 12, 1973.
    Decided Feb. 14, 1974.
    Rehearing Denied Feb. 27, 1974.
    Jack Wasserman, Washington, D. C., with whom Benjámin M. Parker, Washington, D. C., was on the brief, for appellant.
    Paul C. Vincent, Atty., Office of Gen. Counsel, Immigration and Naturalization Service, with whom Harold H. Titus, Jr., U. S. Atty., was on the brief for appellee. George W. Masterson, Jr., Atty., Dept, of Justice, also entered an appearance for appellee.
    Before McGOWAN, TAMM and LEV-ENTHAL, Circuit Judges.
   LEVENTHAL, Circuit Judge:

This case is before the court on appeal from a ruling of the District Court granting summary judgment to the Government and dismissing on the merits a complaint which sought a declaratory judgment that the Attorney General had exceeded his discretionary authority by requesting the plaintiff to complete an application for an Italian passport. We remand with instructions to dismiss the complaint for lack of jurisdiction of the subject matter.

I.

An order of deportation of the plaintiff, entered by the Immigration and Naturalization Service (INS) in 1961 but not executed, has been challenged by the plaintiff in numerous administrative and judicial proceedings. In the last judicial action preceding the instant litigation, the Court of Appeals for the Fifth Circuit held, on October 5, 1971, that plaintiff’s challenge in that case was mooted by his ability to apply to INS for a suspension of deportation pursuant to 8 U.S.C. § 1254, plaintiff having then completed the ten-year period of residence in the United States required by 8 U.S.C. § 1254(a)(2). Marcello v. INS, 449 F.2d 349 (5th Cir. 1971).

On October 7, 1971, the plaintiff petitioned INS to réopen his deportation proceeding to allow him to apply for a suspension, and this request was granted on February 4, 1972. Previously, on January 21, 1972, District Director of INS Troy Adams, Jr., at New Orleans, wrote a letter to plaintiff which called attention to the statutory obligation of one under a final order of deportation to “make timely application in good faith for travel or other documents necessary to his departure,” 8 U.S.C. § 1252(e), and requested the plaintiff to appear at INS offices to execute an application for an Italian passport. The District Director acknowledged his awareness of plaintiff’s application to reopen the 1961 deportation proceedings; and stated that no effort would be made to deport the plaintiff if proceedings were in fact reopened to consider a suspension. The Director advised, however, that “in the light of the long delays that have already occurred in your case,” an application for travel documents should go forward so that the INS “will be in a position to execute the deportation order promptly, when it can legally do so.”

The plaintiff has declined to execute any passport application. He asserts that he could not truthfully make certain representations required in the application and contends that the District Director lacks authority to request plaintiff’s execution of the application in view of the pending application to reopen the 1961 proceedings. The District Director found these objections without merit and renewed the request. This litigation followed.

The District Court dismissed plaintiff’s complaint on the merits, holding that the request to execute the passport application was within the discretion conferred by 8 U.S.C. § 1103, which charges the Attorney General with the administration and enforcement of the immigration laws. The District Court held that 8 U.S.C. § 1252(e) was intended to permit the Attorney General to take reasonable steps to deport undesirable aliens, and that the letter of January 21, 1972, was a reasonable action implementing that function. Marcello v. Attorney General, 347 F.Supp. 898, 902 (D.D.C.1972).

II.

In our view, the District Court should have dismissed plaintiff’s complaint for lack of jurisdiction of the subject matter. The Immigration and Nationality Act does not provide for judicial review of a Government request that the alien apply for travel documents. The absence of such a provision stands in contrast to the scheme for judicial review of deportation orders set forth in 8 U.S.C. § 1105a.

The alien can assert the infirmity of the administrative request as his reason for failure to comply with it in presenting his defense in any prosecution brought pursuant to § 1252(e), which limits its penalties to anyone who willfully fails to make timely application in good faith. The enforcement pattern contemplated by this section provides reasonable protection for the plaintiff. The Government may not seek an indictment. The grand jury may not indict. If there is an indictment the alien may assert his objections to the request as a defense, raising reasonable doubt as to whether he did “willfully fail or refuse to make timely application in good faith for travel or other documents necessary to his departure.”

Insofar as the issues concerning the request to execute travel documents relate to the validity of the deportation process, as in the case before us, there is added basis to negative district court jurisdiction. Congress has provided for judicial review of “final orders of deportation” exclusively in the courts of appeals. 8 U.S.C. § 1105a(a). A “final order” has been construed to include the denial of an application for suspension of deportation, Foti v. INS, 375 U.S. 217, 84 S.Ct. 306, 11 L.Ed.2d 281 (1963), and denial of a motion to reopen deportation proceedings, Giova v. Rosenberg, 379 U. S. 18, 85 S.Ct. 156, 13 L.Ed.2d 90 (1968). In construing the judicial review provisions, the Supreme Court has viewed the Congressional purpose as one of expediting deportation by removing the opportunity for initial review in the district courts. Foti v. INS, supra, 375 U.S. at 226, 85 S.Ct. 156,13 L.Ed.2d 90.

In view of these features of the Immigration and Nationality Act, we conclude that the District Court lacks jurisdiction under the Administrative Procedure Act to review the administrative request for the purpose of considering a prayer that it be enjoined or declared invalid. We think it plain that Congress intended that the district courts would not be brought into the deportation process at this juncture, and we can not fairly impute to Congress an intent to restore, under the general provisions of the APA, the district court intervention precluded by the specific provisions on judicial review contained in the Immigration and Nationality Act.

Our conclusion that jurisdiction is lacking is reinforced by considerations of venue, although questions of jurisdiction and venue are distinct. Venue of a petition to review a deportation order lies in the circuit in which administrative proceedings were conducted or in the circuit which includes the plaintiff’s residence. 8 U.S.C. § 1105a. Thus review of the plaintiff’s deportation order would not be available in this circuit, a point we note because an alien’s claim to review administrative action taken pursuant to § 2512(e) may well present issues closely related to those which have been raised, or could be presented, in a challenge to a final order of deportation.

Jurisdiction under the APA, however, is ordinarily complemented by the broad venue provisions of the- Mandamus and Venue Act of 1962. Without ruling on these venue provisions directly, we are aware of actions in equity or under the APA, brought against an officer whose official residence is in the District of Columbia, on the ground that the crucial action was taken in this District and is national in scope and application. See Nestor v. Hershey, 138 U.S.App.D.C. 73, 425 F.2d 504 (1969). We are loath to permit the centralization of actions in this District, however, where dispersal is more appropriate and within the expressed or reasonably implied will of Congress. Smith v. Katzenbach, 122 U.S.App.D.C. 113, 351 F.2d 810 (1965).

Our ruling that the District Court lacks jurisdiction under the APA is in line with our recent decision in Floer-sheim v. Engman, supra, note 2, in which we held that the APA did not authorize intervention by the district court in the interpretation of an FTC order, the validity of which was reviewable in the court of appeals under the FTC Act.

The case is remanded to the District Court with instructions to dismiss the complaint for lack of jurisdiction.

So ordered.

      . 8 U.S.C. § 1252(e) provides, in pertinent part:
      “Penalty ior willful failure to depart; suspension of sentence
      Any alien against whom a final order of deportation is outstanding by reason of being a member of any of the classes described in paragraphs (4) to (7), (11), (12), (14) to (17), or (18) of section 1251(a) of this title, who shall willfully fail or refuse to depart from the United States within a period of six months from the date of the final order of deportation under administrative processes, or, if judicial review is had, then from the date of the final order of the court, ... or shall willfully fail or refuse to make timely application in good faith for travel or other documents necessary to his departure, ... or who shall willfully fail or refuse to present himself for deportation at the time and place required by the Attorney General pursuant to such order of deportation, shall upon conviction be guilty of a felony. . . . ”

      . The lack of subject matter jurisdiction is properly noticed by this court on its own motion. Floersheim v. Engman, 161 U.S. App.D.O. 30, 494 F.2d 949, 952, n. 1 (1973).

      . We note that the INS has expressed its willingness to allow plaintiff to complete the Italian passport application without making the representations to which he has objected.

      . 8 U.S.C. § 1105a(a) provides, in part:
      § 1105a. Judicial review of orders of deportation and exclusion — Exclusiveness of procedure
      (a) The procedure prescribed by, and all the provisions of sections 1031 to 1042 of Title 5, shall apply to, and shall be the sole and exclusive procedure for, the judicial review of all final orders of deportation heretofore or hereafter made against aliens within the United States pursuant to administrative proceedings under section 1252(b) of this title or comparable provisions of any prior Act, except that— ^ 5¡¡
      (2) the venue of any petition for review under this section shall be in the judicial circuit in which the administrative proceedings before a special inquiry officer were conducted in whole or in part, or in the judicial circuit wherein is the residence, as defined in this chapter, of the petitioner, but not in more than one circuit ; sf: ^
      5 U.S.C. § 1032, 64 Stat. 1129, incorporated by reference (and replaced in 1966 by 28 U. S.C. § 2342) provides for exclusive jurisdiction of the court of appeals.

      . The Fifth Circuit’s 1971 ruling plainly contemplates that any infirmity in the 1961 order then properly before the court would be included in the errors assignable in the event of denial of suspension of deportation.

      . The Act is' codified at 28 U.S.C. § 1361 et seq. 28 U.S.C. § 1391(e) provides for venue in any judicial district in whicli the defendant resides, in which the cause of action arose, in which real property involved in the action is located, or in which the plaintiff resides, if real property is not involved. On the interrelation of APA jurisdiction and the Mandamus and Venue Act, see Peoples v. Department of Agriculture, 138 U.S.App.D.C. 291, 294-295, 427 F.2d 561, 56A-565 (1970).


author: SIMPSON, Circuit Judge: COLEMAN, Circuit Judge

text:
    Meade A. CARPENTER, Jr., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 73-1420.
    United States Court of Appeals, Fifth Circuit.
    June 3, 1974.

      Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwaeks, Atty., Tax Div., U. S. Dept, of Justice, Washington, D. C., Frank D. McCown, U. S. Atty., Fort Worth, Tex., D. Wendell Barnett, Gordon S. Gilman, Tax Div., Dept, of Justice, Dallas, Tex., Ernest J. Brown, Atty., Tax Div., Dept, of Justice, Washington, D. C., for defendant-appellant.
    Michael L. Cook, Austin, Tex., for plaintiff-appellee.
    Before WISDOM, COLEMAN and SIMPSON, Circuit Judges.
   SIMPSON, Circuit Judge:

We review a judgment below for the taxpayer in an income tax refund suit. The taxes were paid after the Commissioner of Internal Revenue assessed a deficiency for the calendar year 1964. Carpenter v. United States, N.D.Tex. 1972, 348 F.Supp. 179. Upon our finding that the district court incorrectly determined taxpayer to have been a resident of a foreign country for the period in question, we reverse.

THE FACTS

Meade A. Carpenter, Jr., the appellee, is a retired petroleum engineer. He spent a major portion of the years from 1954 through 1964 working in the Middle East at various jobs related to the petroleum industry. Relevant to our inquiry here is taxpayer’s move to Saudi Arabia in 1958 when he assumed a position with the Saudi Arabian Ministry of Petroleum, under the leadership of Minister Abdullah H. Tariki. Taxpayer remained in this position until June 1962 when, he terminated his employment and departed for the United States with intermediate stops in Beirut, Lebanon, Switzerland, and Denmark. He was apparently motivated by dissatisfaction with the existing political situation in Saudi Arabia.

Prior to leaving Saudi Arabia, in April 1962, taxpayer and Minister Tari-ki entered into an oral agreement to form a partnership whose business was to be acting as petroleum consultants for the governments of the various petroleum producing countries in the Middle East and elsewhere. By the terms of this agreement, taxpayer was expected to spend at least six months in the United States before returning to the Middle East. Tariki enjoyed contacts with persons favorably placed with the governments of the oil producing nations. During Carpenter’s visit to the United States the plan was for Tariki to lay the groundwork for the commencement of the partnership operation, by soliciting business for the venture with his governmental contacts. It was agreed that the headquarters for the partnership would be Beirut, Lebanon. Regarding taxpayer’s anticipated date of departure for Lebanon, aside from providing for a six-month minimum stay in the United States, the agreement stated only that Tariki would contact the taxpayer “(o)nce the office had been established and we had enough work in the taxpayer’s field to come back . . . .” (App. p. 44). As it developed, Tariki contacted the taxpayer during a visit to the United States in late January or early February 1963, and taxpayer joined Tariki in Lebanon on April 15, 1963. At that time the partnership was activated.

Taxpayer terminated the agreement with Tariki in November 1963 because of political disagreements between them. Taxpayer returned to the United States on December 1, 1963. On January 4, 1964, he returned to the Middle East to Kuwait, where he worked in a petroleum consulting capacity until August 10, 1964. Taxpayer returned to the United States permanently on that date.

The partnership with Tariki was never financially successful, and generated no amounts which taxpayer could ex-elude from his 1963 income. However, taxpayer, who filed his income tax returns on a calendar year basis, did exclude from his 1964 income some $7400 representing earned income and allowances attributable to his employment in Kuwait that year. This exclusion was necessarily predicated upon the assumption that taxpayer had been a bona fide resident of a foreign country for an uninterrupted period including an entire taxable year. Internal Revenue Code of 1954, Sec. 911(a)(1), Title 26, U.S.C., Sec. 911(a)(1), Taxpayer was obviously not a foreign resident for the entire year 1964. Thus, the validity of the exclusion depended in the first instance on taxpayer’s ability to prove foreign residence for the entire year 1963. This was in turn dependent upon taxpayer’s establishment of continued foreign residence during his ten month stay in the United States — June 1962 to April 1963. A secondary question is whether that foreign residence, if so established, continued uninterrupted through August, 1964.

The Commissioner determined that taxpayer had not been a bona fide resident of a foreign country for the entire year 1963 and assessed a deficiency for the 1964 tax year. Taxpayer paid the deficiency and timely instituted a suit for refund in the district court below. It is from the district court judgment granting the refund that the Commissioner appeals.

The threshold issue is whether the taxpayer successfully maintained his status as foreign resident during the period of his ten month absence from the Middle East, June 1962 to April 1963. That issue is a legal, not a factual one, United States v. Winthrop, 5 Cir. 1969, 417 F.2d 905, 910, and cases there cited. The underlying facts are not in dispute. The conclusion to be drawn from the undisputed facts is thus a question of law. Winthrop, supra at p. 910.

THE STATUTORY PROVISIONS

Under Code Sec. 911(a)(1), supra, a taxpayer must be a bona fide resident of a foreign country for an uninterrupted period including an entire taxable year before being entitled to exclude from income for tax purposes amounts earned from sources outside the United States during the period of absence. The Regulations, Sec. 1.911-2(a) (2), provide that the test of bona fide residence in a foreign country is, to the extent feasible, to be the test of alien residence established in Sec. 871 of the Internal Revenue Code, Title 26, U.S.C. Sec. 871, and the Regulations thereunder. But the Regulations, Sec. 1.871-2 (b), defining residence, speak primarily to the situation of uninterrupted periods of presence by an alien in the United States. It is not challenged that taxpayer was a bona fide resident of Saudi Arabia until the time of his departure for the United States in June 1962. Regulations Sec. 1.911-2(a) (2) apply to the question of absence from a foreign country in which one has established residence, and provide in pertinent part:

Though the period of bona fide foreign residence must be continuous and uninterrupted, once bona fide residence in a foreign country or countries has been established, temporary visits to the United States or elsewhere on vacation or business trips will not necessarily deprive the citizen of his status as bona fide resident of a foreign county.

Still unanswered, however, is the question that arises where, as here, the taxpayer terminates his residence in one foreign country and returns to the United States with the intent to leave the United States again but to live in a different foreign country: What showing must a taxpayer make in order to maintain his foreign residence for tax purposes during the hiatus in his stays abroad ?

THE CASE LAW

Two reported cases are closely aligned with the taxpayer’s from a factual standpoint: Leonard Larsen, 1955, 23 T.C. 599, and Robert A. Henningsen, 1956, 26 T.C. 528, aff’d 4 Cir. 1957, 243 F.2d 954. In Larsen the question before the Tax Court was whether the taxpayer had been a bona fide resident of Saudi Arabia for the calendar year 1949. The taxpayer had originally departed the United States on May 10, 1948, to begin work for International Bechtel, Inc. at a location in Saudi Arabia. Taxpayer took his first vacation some 18 months after arriving in Saudi Arabia. He left that country for the United States on November 28, 1949, and vacationed with his wife and her family in Massachusetts from November 30 to January 14, 1950, when he returned to Saudi Arabia.

In order to receive vacation travel pay to and from the United States, taxpayer was required (apparently by company policy) to terminate his existing employment contract with Bechtel before departing Saudi Arabia. More than a month prior to his departure, however, taxpayer had discussed with his superiors his return to work for Bechtel after his vacation. As a result of this consultation, taxpayer’s superiors lodged a request with Bechtel’s main office in San Francisco that taxpayer be returned to Saudi Arabia upon the completion of his vacation. The request was granted, and taxpayer completed all necessary arrangements for his return before leaving for the United States. Although the opinion of the Tax Court is not specific to the point, we gather that these arrangements included some agreement as to the date when the taxpayer would return to his job in Saudi Arabia. In addition, the taxpayer left all of his personal belongings in Saudi Arabia during the period of his vacation, in the United States.

The Tax Court predicated its opinion that the taxpayer had been a bona fide resident of Saudi Arabia for the entire calendar year of 1949 on two grounds. First the court noted that the taxpayer had apparently determined to make a career of foreign employment, as evidenced by the fact that he had continued to be employed by Bechtel in foreign operations from 1948 through the time of the Tax Court proceedings in 1954. While we agree that a career pattern may constitute evidence to be considered in determining residence, it is certainly not dispositive of the question of residence during a given period of absence from foreign duty stations. The second ground relied upon by the Tax Court we find more worthy of note. The court stated:

Although petitioner’s first contract was technically terminated when he returned to the United States in November 1949, we are satisfied by the evidence that his visit to the United States at that time was merely a vacation, and that termination of the contract was simply a device for obtaining his transportation. It was in form but not in fact “terminal leave.” It was understood when he left Saudi Arabia in November 1949 that he would return, and indeed he left most of his belongings there upon that expectation. 23 T.C. at 604.

We find the emphasis on the conditions actually surrounding the taxpayer's visit to the United States in 1949-50 more relevant to the determination of residence during that period than any statements about his general career pattern during years after the tax year in question. We further find it significant that taxpayer’s stay in the United States was limited to approximately six weeks.

A different result was reached by the Tax Court in Robert A. Henningsen, 1956, 26 T.C. 528, aff’d, 4 Cir. 1957, 243 F.2d 954. The issue there was whether the taxpayer had been a bona fide resident of a foreign country for the entire calendar years 1946 and 1947. Taxpayer had left the United States to return to a position with a family-operated China Trade Act corporation in Shanghai, China. He had previously been employed by the company and resided in Shanghai from October 1929 until November 1941, when, pursuant to an agreement among the co-owners of the business because of the threat of hostilities in the Far East, he returned to the United States. The eventual outbreak of fighting prevented his return to Shanghai until February 1946.

In August 1947, some nineteen months after taxpayer’s return to his job, he and his brother decided to sell their interest in the company to a brother-in-law, and terminate their own employment with the company. The agreement was put into effect in late 1947. Taxpayer and his brother about this time acquired the Coca-Cola bottling franchise for Hong Kong. They formed a corporation under the China Trade Act and began bottling operations in Hong Kong in late 1947. Taxpayer and his brother agreed for the brother to manage the bottling company until the volume of business justified taxpayer’s assistance in management. Taxpayer left Shanghai in November 1947 and returned to the United States. Because this expected expansion did not eventuate the taxpayer never returned to Hong Kong to assist in the Coca-Cola business there. He continued to reside in the United States engaging in several business enterprises until the time of the Tax Court decision in 1956.

The taxpayer contended in the Tax Court alternatively (i) that he had continued to be a resident of China from October 1929 at least until the date of his return to the United States in 1947 or (ii) that he was a bona fide resident of China during 1947. Taxpayer’s argument in support of the first contention was that he had intended throughout the duration of fighting in the Far East to return as soon as conditions would permit. In support of his claim of residence for the entire year 1947, taxpayer relied upon his intention formed before he left Shanghai in November 1947: to return to Hong Kong to assist in the management of the Coca-Cola business there. The Tax Court rejected both contentions.

Taxpayer’s original departure from China in 1941 had been pursuant to an agreement among taxpayer, his brother, and brother-in-law that each would assume a tour of duty as sole manager in Shanghai until the political and military situation in the East stabilized. Taxpayer took the first tour, and was relieved by his bi’other in November 1941, at which time taxpayer departed for the United States. Regarding this departure and his subsequent stay in the United States, the Tax Court said:

Petitioner’s return to this country was made pursuant to his agreement with Harkson and Anker (His brother-in-law and brother). His obvious intent at that time was to remain in the United States and, temporarily at least, make it his residence until it again became time -for him to serve another tour of duty in China — apparently some 2 years thereafter. Furthermore, it appears to be a fair inference that even this definite intent to return to China, after such necessarily extended stay in the United States, was abandoned after the outbreak of the war between Japan and the United States and replaced by a “mere floating intention indefinite as to time,” to return to China if and when such war was brought to a successful conclusion by the United States and her allies. Thus, albeit petitioner’s return to China was rendered impossible by the circumstances of war, nevertheless, as was aptly observed in Robert W. Seeley, supra [14 T.C. 175], at p. 182, “did he not then, from the time it was determined that conditions would not permit his return, fully intend to be a resident of the United States until those conditions were removed ?” See also Marsman v. Commissioner [of Internal Revenue, 4 Cir.], 205 F.2d 335, modifying 18 T.C. 1. In our opinion, the facts here, as above outlined, admit of no answer to the quoted question other than in the affirmative.
26 T.C. at 535.

We think the Tax Court correctly emphasized the taxpayer’s primary intent in November 1941 “to remain in the United States and . . . make it his residence until it again became time for him to serve another tour of duty in China . . . ” as a factor to be considered in conjunction with the taxpayer’s secondary intent to return to China according to the agreement with his brother and brother-in-law. We agree also that when the war rendered it impossible for taxpayer to fix the date certain of his return to China the intent to return changed from a “definite intent” into “a ‘mere floating intention, indefinite as to time,’ to return to China if and when such war was brought to a successful conclusion . . . .’’To recapitulate, the combination of intent to remain in the United States, at least for the time being, coupled with the fact that the intent to return to China was indefinite as to time and contingent on circumstances beyond the power of the taxpayer to control were found by the Tax Court in Henningsen to be sufficient to overcome taxpayer’s claim of bona fide foreign residency throughout the duration of the war.

The second arm of the taxpayer’s argument in Henningsen was that he was a bona fide resident of China for the entire calendar year 1947, despite his departure for the United States in November of that year, because he intended to return to Hong Kong as soon as the Coca-Cola business grew to the extent that he was needed to assist in management of the business. In rejecting this contention, the Tax Court stated:

Albeit petitioner was a bona fide resident of China for a portion of 1947, the record does not disclose that he ever established a residence in Hong Kong. In fact, it appears that after his departure from China in 1947, he never was physically present in Hong Kong. He cites no authority and we know of none for the proposition that one may become a bona fide resident of a sovereignty different from that in which he has established such residence by a mere floating intention to do so in the indeterminate future.
26 T.C. at 536.

Significant here are Henningsen’s failure to establish physical residence in Hong Kong before leaving the Orient, and the indefinite future date of his proposed departure for Hong Kong, the latter again being dependent upon development of the Coca-Cola business in Hong Kong, a contingency beyond Hen-ningsen’s ability to control, which instead hinged upon his brother’s business enterprise. The fact of the taxpayer’s failure to move to Hong Kong was relevant only insofar as the length of his absence from his claimed residence there was a factor to be weighed in deciding the bona fides of that residence. The Tax Court determined that the taxpayer’s foreign earnings for the years 1946 and 1947 were not eligible for exclusion from his taxable income for those years.

In affirming, the Fourth Circuit relied extensively on the test of domestic residence under the analogue to current Code Sec. 871 and the Regulations thereunder, and stated the test of residence in the United States as follows:

(O)ne who comes to the United States for a purpose of such a nature that an extended stay may be necessary for its accomplishment, and to that end makes his home temporarily in the United States, becomes a resident, though it may be his intention at all times to return to his domicile abroad when the purpose for which he came has been consummated.
243 F.2d at 957.

OUR DECISION

For purposes of the instant case, we think this statement should be expanded by positing a twofold test to be used in determining whether one, who has established a bona fide foreign residence, maintains or relinquishes that residence during the course of a visit to the United States. We limit application of our proposal to individuals whose trip to the United States punctuates a move from one foreign country to another or from one job within a given foreign country to another job within that same country.

As a first step it should be determined whether reliable indicia are present that taxpayer’s return abroad is reasonably certain as to fact and as to time. Factors to be considered should include: (a) the extent of the taxpayer’s preparations, prior to his return to the United States, for assuming his new employment position or for moving to his new residence; and (b) whether the taxpayer has fixed a date certain for his departure for his new job or residence. The application of these factors may well depend on the question whether the taxpayer is self-employed or employed by another. Where a taxpayer is employed by another, the existence of a specific job assignment, which the taxpayer has accepted prior to his return to the United States and which calls for his return to duty in a foreign country within a specific period of time would be strong evidence of continuing bona fide foreign residence. This was basically the situation in Leonard Larsen, supra. In the case of a self-employed individual, maintenance of bona fide foreign residence would be indicated by: (i) proof of an agreement to begin a new business venture requiring the presence of the taxpayer in a foreign country on or before a date certain; (ii) proof that the taxpayer’s departure from the United States is reasonably within the taxpayer’s individual control and not contingent upon the efforts of another or the vicissitudes of war or other elements beyond the taxpayer’s control; (iii) the establishment of residence in a different foreign country prior to return to the United States. The absence of these elements was crucial, we believe, to the outcome of the Henningsen case, supra.

The second step of our test requires consideration of the duration of the taxpayer’s presence in the United States between stays abroad. Without attempting to fix a limit as to the length of the permissible stay in the United States, there is a point beyond which — even assuming the establishment of sufficient indicia of intent to depart the United States by a date certain — the sheer length of the stay in the United States would weigh heavily in favor of a finding of intent to reside in the United States overriding an intent to return to another country. This was a significant factor in Henningsen, supra, where the court implied that an intent to reside in the United States for a period of two years prior to the contemplated return abroad would outweigh the intent to return abroad in determining residency. Conversely, the brief duration of the taxpayer’s stay in the United States in Larsen, supra, weighed in favor of a finding of continued foreign residence.

Applying this two-step test— which we emphasize is no more than a distillation of the considerations underlying the previous decisions rendered by the Tax Court in Henningsen and Larsen almost twenty years ago — to the facts in the instant case, we conclude that the taxpayer failed to prove continued bona fide residence outside the United States for the period of his ten-month stay in this country from June 1962 to April 1963. In reaching this decision, we stress the following factors. First, despite the agreement with Tariki to enter into a petroleum consulting partnership there was no date certain set for taxpayer’s return to the Middle East. The only provision of the agreement relating specifically to a date of return was that taxpayer’s stay in the United States was to be six months at the minimum. Beyond that, the date on which taxpayer would join Tariki in Beirut was totally indefinite. In addition, the fixing of a date of ultimate return was largely removed from the taxpayer’s control. The agreement with Tariki provided that the taxpayer was to return when Tariki was able to generate business which would necessitate the taxpayer’s presence in Beirut. We are faced here with precisely the indefiniteness and contingency of plans which were fatal to the taxpayer’s claim in Henningsen, supra. Also in common with Mr. Henningsen is taxpayer’s failure to establish a physical residence in the location to which eventual departure was planned. In sum, taxpayer has failed totally to satisfy the criteria embodied in Larsen and Henningsen for continued maintenance of a bona fide foreign residency during his sojourn in the United States. We find it unnecessary to consider the question whether, assuming arguendo such maintenance of residency had been established, the ten-month duration of taxpayer’s stay in the United States was of such a length as to indicate an overriding intent to reside in the United States for the time being.

In formulating our test and in reaching our decision, we point out the opportunity for abuse inherent in taxpayer’s position. The taxpayer urges that we adopt an essentially subjective test of the intent to return to a foreign land and therefrom find continued residence outside the United States. Under such a test, the taxpayer in Henningsen would have been considered a resident of China for the entire period from November 1941 to 1950, at which time he alleged he abandoned his intent to participate actively in the Coca-Cola business in Hong Kong. During this eight-plus year period, Mr. Henningsen actually resided in Chima for some twenty months. See Leigh White, 1954, 22 T.C. 585. Nor is it possible to regulate the possibility of abuse by looking solely to the duration of the taxpayer’s stay in the United States. Such an approach would logically require the creation of a presumption of residence in the United States after passage of some specified period of time, a Draconian measure we are unwilling to adopt.

We are aware also that the test derived by us from our analysis of Henningsen and Larsen may on occasion be an obstacle to the exercise of sound economic or business judgment in certain circumstances. In the Henningsen case and in the instant case, sound business judgment manifestly dictated that the taxpayer delay reporting for work until there was in fact some work to perform. Similarly, sound economic judgment counselled against obtaining abroad a physical residence which would have to remain unoccupied while a dual residence was maintained in the United States for an indefinite period. But the problem, we think, is not that our decision hampers the exercise of sound economic and business judgment. It is simply that there exists a contingency in the taxpayer’s plans. To the extent that such a contingency finds expression in the indefiniteness of the proposed date of departure from the United States, and in the reluctance of the taxpayer to take up work or physical residence abroad, it represents as a corollary an intention to reside in the United States for an indefinite period and precludes a finding of bona fide foreign residency during that period.

Finally, we do not overlook the taxpayer’s argument that his claim of continued foreign residency during the entire year 1963 is consistent with instructions contained in the 1964 edition of U.S. Treasury Department Publication 54, “Tax Guide for U.S. Citizens Abroad,” which provides at page 7:

To preserve your status as a bona fide resident of a foreign country, you must have a clear intention of returning from such trips, without unreasonable delay, to your foreign residence or to a new bona fide residence in another foreign country.

We do not fault the Treasury Department for trying to provide guidelines for taxpayers confronted with the bewildering maze of our tax laws, and we sympathize with the taxpayer who in fact relies upon what he accepts as an authoritative interpretation of the laws and of the Treasury publications. But nonetheless it is for the Congress and the courts and not the Treasury to de-claré the law applicable to a given situation. As the Ninth Circuit has observed: “Nor can an interpretation by taxpayers of the language used in government pamphlets act as an estoppel against the government, nor change the meaning of taxing statutes; . . . ” Adler v. Commissioner of Internal Revenue, 9 Cir. 1964, 330 F.2d 91, 93. United States v. Heffner, 4 Cir. 1969, 420 F.2d 809, cited by the taxpayer, concerned operating regulations of the IRS and is not apposite.

CONCLUSION

We hold that the district court erred as a matter of law in finding taxpayer to have been a bona fide resident of a foreign country for the entire calendar year 1963. It follows that the court improperly granted taxpayer’s claim for refund of taxes paid on his income earned in Kuwait during 1964.

The judgment appealed from is reversed and the case is remanded with instructions to the district court to enter final judgment for the appellant United States.

Reversed and remanded with instructions.

COLEMAN, Circuit Judge

(concurring) :

After oral argument and conference on this appeal, I was inclined to affirm the judgment of the District Court. This initial view was grounded on the language contained in the 1964 edition of U.S. Treasury Department Publication 54, page 7, “Tax Guide for U.S. Citizens Abroad”, quoted in the opinion which Judge Simpson has authored for the Court. Without bothering to discuss the matter or to cite cases in the field, I have a strong feeling that in their dealings with the Government citizens ought to have a right to rely upon what the duly authorized agents of the Government tell them. Nevertheless, I agree entirely with the considerations advanced in Judge Simpson’s penetrating analysis of the problem.

I agree to reverse because the language in Publication 54 refers to “a clear intention of returning”. Such a clear intention is not reflected by this record. There was certainly an expectancy, but, as pointed out, the actual intention was contingent upon Mr. Tariki establishing the office in Beirut with enough work to justify a return, as' pointed out at page 177 of the opinion of the Court.

I concur in all respects.

      . Section 911(a)(1) provides in pertinent part:
      Earned Income from Sources without the United States.
      (a) General rule. — The following items shall not be included in gross income and shall be exempt from taxation under this subtitle:
      (1) Bona Fide Resident of Foreign Country. — In the case of an individual citizen of the United States, who establishes to the satisfaction of the Secretary or his delegate that he has been a bona fide resident of a foreign country or countries for an uninterrupted period which includes an entire taxable year, amounts received from sources without the United States (except amounts paid by the United States or any agency thereof) if such amounts constitute earned income . . . attributable to such period; * * *

      . The Government, in a letter submitted to the Court after tlie hearing of oral argument in this case, urges that Revenue Ruling 73-492, 1973-2 Cum.Bull.- [1973-46 I.R.B. p: 14] recently issued by the Commissioner, be considered by the Court in deciding the instant ease. While realizing the power of the Commissioner to apply his rulings retroactively, Dixon v. United States, 1965, 381 U.S. 68, 73-75, 85 S.Ct. 1301, 1304-1305, 14 L.Ed.2d 223, 227-229, we base our opinion on established case law and find recourse to Rev.Rul. 73-492 unnecessary.

      . This assumption as to Larsen is not crucial to our holding for reasons discussed more fully herein. See note 4-5 and accompanying text, infra.

      . In some circumstances it might perhaps be possible for the new job or residence assignment either to be uncertain at the time of the taxpayer’s return to the United States or to be flexible to a limited extent as to the date of his departure. We need not further address ourselves to the matter here.

      . In addition to asserting the existence of an oral agreement to form a partnership agreement with Tariki — whose existence we do not doubt — the only substantive evidence offered of taxpayer’s intent to return abroad was the fact that he remained unemployed during the term of his ten month stay in the United States. Considered in light of the fact that taxpayer received income from rentals and investments during the period of his stay, the fact of his unemployment is of no significance.


author: SIMPSON, Circuit Judge:

text:
    William F. RICKETT, III, a minor who sues by his next friend and father, William F. Rickett, II, Plaintiff-Appellant, v. Howard JONES, d/b/a Jones Bros. Roofing Co., et al., Defendants-Third Party Plaintiffs-Appellees, v. ROOFING, SHEET METAL, HEATING & AIR CONDITIONING CONTRACTORS ASSOCIATION OF ALABAMA SELF-INSURER’S FUND, Third Party Defendant. James T. WILSON, a minor who sues by his next friend and mother, Kathy Jo Toney, Plaintiff-Appellant, v. Howard JONES, d/b/a Jones Bros. Roofing Co., et al., Defendants-Third Party Plaintiffs-Appellees, v. ROOFING, SHEET METAL, HEATING & AIR CONDITIONING CONTRACTORS ASSOCIATION OF ALABAMA SELF-INSURER’S FUND, Third Party Defendant.
    No. 73-2705.
    United States Court of Appeals, Fifth Circuit.
    June 5, 1974.
    Rehearing Denied Aug. 6, 1974.

      Albert W. Copeland, Richard H. Gill, Montgomery, Ala., for plaintiff-appellant.
    Henry C. Chappell, Jr., Montgomery, Ala., for third-party plaintiff.
    Harry Cole, Montgomery, Ala., for third-party defendant.
    Before GODBOLD, SIMPSON and INGRAHAM, Circuit Judges.
   SIMPSON, Circuit Judge:

The appellants, Rickett and Wilson, Georgia residents, sued Howard Jones, d/b/a Jones Brothers Roofing Co. on diversity grounds in the Alabama federal court below. The suits were for damages for job-related personal injuries sustained in Georgia while the plaintiffs, both then under 16 years of age, were employed at a federal enclave job site where Jones was performing a contract with the United States Army. The cases were handled jointly below and are here on a consolidated appeal from summary judgments entered in favor of Jones. We reverse.

Two theories were advanced in the trial court for recovery. First, plaintiffs contended that an implied cause of action exists and should be recognized against their employer, who was in violation of the Child Labor Provisions of the Fair Labor Standards Act, Title 29, U.S.C. Sec. 212. In the next place, they claimed damages as third party beneficiaries to Jones’ contract with the U. S. Army, pursuant to which they were employed, for Jones’ alleged breach of contract for failure to secure Workmen’s Compensation insurance as required by the contract.

Jones filed a third party complaint against the Roofing, Sheet Metal, Heating and Air Conditioning Contractors Association of Alabama Self-Insurer’s Fund (RSMHACCA), of which he was a member in good standing at the time plaintiffs’ injuries occurred. The district court’s grant of judgment for Jones was based upon a finding that no private cause of action arises under the FLSA, and that the applicable Georgia Workmen’s Compensation statute bars common law, personal injury damage suits by employees against their employer. The insurer’s summary judgment motion directed to Jones’ third party complaint was held to be moot. Our reversal is grounded upon a determination that the district court misconstrued and misapplied Georgia law, and that appellants should not be narrowly limited to claims before the Georgia Workmen’s Compensation Board under the particular facts of this case. This result pre-termits decision as to the FLSA claim, but it puts in issue the potential liability of RSMHACCA requiring reversal of the order holding moot the motion to dismiss the third party complaint against that insurer.

Alabama resident Jones is the sole proprietor of Jones Brothers Roofing Co. He contracted with the United States Army to do re-roofing work on certain buildings on the Fort Benning, Georgia military reservation. Appellants Rickett and Wilson were Georgia residents hired by Jones as laborers pursuant. to the Fort Benning work contract. Both were then under 16 years of age so that they were hired in apparent violation of the child labor provisions of the FLSA, Title 29, U.S.C. Sec. 212. By his contract with the United States Army Jones was expressly required to procure and maintain Workmen’s Compensation insurance in the amounts fixed by Georgia law for the benefit of the laborers employed on the job. It is without dispute that he did not qualify with the Georgia Workmen’s Compensation Board. The appellants each filed claims with the Georgia Board after the accidents causing their injuries, but Jones has not submitted to that Board’s jurisdiction. Those claims are therefore of no benefit to the injured youths.

The lower court undertook to apply the Georgia law to these undisputed facts and determined that the contract of employment between appellants and the appellee was subject to the Georgia Workmen’s Compensation Act, and that appellants’ injuries were compensable thereunder. Under the terms of the statute, Sec. 114-103, Georgia Code Ann., it was the exclusive remedy for the injuries sustained, the court continued, and barred “any other common law actions, including a breach of contract action brought pursuant to injuries (citing Georgia cases)”. The Georgia Workmen’s Compensation Act, Georgia Code Ann. 201, provides, in pertinent part, that:

“Every employer and employee, except as herein stated, shall be presumed to have accepted the provisions of this Title, agreeing respectively to pay and accept compensation for personal injury or death by accident arising out of and in the course of the employment, and shall be bound thereby, unless notice to the contrary shall have been given in the manner herein provided, . . . ”

Finding that the parties “accepted” the provisions of the Workmen’s Compensation law as contemplated by Sec. 114-201, the district court construed Sec. 114-103 as a bar to the third party beneficiary claim.

We consider crucial to the disposition of this appeal a decision as to whether or not the lower court correctly analyzed the situation in determining that the parties “accepted” the provisions of the Workmen’s Compensation law under Sec. 114-201 so as to afford Jones the protection of Sec. 114-103 against the third party beneficiary contract claim despite Jones’ failure to qualify under the Compensation Act. The district court reasoned that since no notice of exemption was given by either party, the statutory presumption of acceptance under Sec. 114-201 came into play so as to limit the remedy. Counsel for appellee urged at oral argument that “acceptance” arises by operation of law so long as the prerequisites for coverage, to wit, an employment contract and work being done thereunder in Georgia, exist.

We are in disagreemnt with both rationales. First, it is a non sequitur to suggest that “acceptance” arises by operation of law when the statute dealing with the subject is expressly couched in terms of legal presumption. The error in the district court’s reasoning was that it treated the presumption as conclusive rather than rebuttable. Thus when appellants failed to show a notice of exemption from the statutes, which would have precluded any reference to the presumption whatsoever, it was concluded that “the parties must, therefore, be deemed to have accepted the obligations imposed by Sec. 101-201 of the Act and to be subject to the Act.” Thereupon summary judgment issued.

Summary judgment may be ordered only if “there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law” F.R.Civ.P. 56(c). The Georgia courts have held that the presumption created by See. 114-201 is not conclusive. Campbell v. Dixie Gravel Co., 1937, 55 Ga.App. 747, 191 S.E. 274. In Campbell the defendant had admitted in a pleading that he had not accepted the provisions of the Act, and that was held to have overcome the presumption. Not dissimilarly, appellee here admitted that he had not submitted to the jurisdiction of the Georgia State Board of Workmen’s Compensation, which may be tantamount to the admission in Campbell. We note further that both the presumption of acceptance and the exclusivity of remedy sections of the Georgia law refer to acceptance as. “agreeing respectively to accept and pay compensation on account of personal injury or death by accident.” The district court should consider whether or not that presumption may be rebutted by a showing that such agreement was lacking.

Our attention is drawn to a final point, not briefed by the parties, but arising during oral argument. The complaints below disclose that both plaintiffs were injured during the course of their employment while working on building # 2403 at Fort Benning, Rickett by being struck with a piece of sheet metal which fell on him, and Wilson by falling through the roof.’ Under Erie Railroad Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, and its progeny, the district court in this diversity action will apply the law of Georgia, the state in which the injuries occurred. Georgia law imposes upon a master the duty to furnish servants in his employ a reasonably safe place in which to work. Smith v. Ammons, 1972, 228 Ga. 855, 188 S.E.2d 866. Appellants have alleged facts sufficient to support a claim in tort as well as their contractual claim. Only the demand for relief is deficient. Therefore, should the district court ultimately determine that the provisions of the Georgia Workmen’s Compensation Law, including exclusivity of remedy, were not “accepted” by the parties, leave to amend should be granted appellants to permit assertion of the common law tort action by their complaint.

The judgment appealed from is Reversed for further proceedings consistent herewith.

Reversed.

      . Title 114, Georgia Code Annotated, Secs. 101-201.

      . We note that this precise issue was decided adversely to appellants’ contention by this Court in Breitweiser v. KMS Industries, 5 Cir. 1972, 467 F.2d 1391, cert. denied, 410 U.S. 969, 93 S.Ct. 1445, 35 L.Ed.2d 705.

      . Rickett was allegedly struck by a falling sheet of metal on July 17, 1970 while working on the roof to building # 2403. Wilson was allegedly injured in a fall from building # 2403 on July 21, 1970 when the roof gave way while he was working on it.

      . Sec. 114-201 was repealed by the Georgia legislature, Georgia Acts 1972, pp. 929, 931, but the effective date of the repeal, July 1, 1972, was subsequent to the filing of the complaint in this action. Section 114-103, discussed infra, was amended at the same time Sec. 114-201 was repealed.

      . Sec. 114-103, Georgia Code Ann. provides that:
      “The rights and remedies herein granted to an employee where he and his employer have accepted the provisions of this Title, agreeing respectively to accept and pay compensation on account of personal injury or death by accident, shall exclude all other rights and remedies of such employee, his personal representative, parents, dependents or next of kin, at common law or otherwise, on account of sucb injury, loss of service or death.”

      . See plaintiffs’ Request for Admission # 6 and Jones’ answer thereto:
      6. That defendant has not submitted to the jurisdiction of the Georgia State Board of Workman’s Compensation.
      6. Admitted, and Defendant did have such Workmen’s Compensation insurance n covering the work to be done pursuant to said contract, the same being its membership in the Third-Party Defendant’s self-insuring association. Subsequent to May 27; 1970, the date of the contract with the United States, and prior to July 15, 1970, Jones Brothers Roofing Company furnished to the Contracting Officer for the United States at Fort Benning, Georgia, written proof of its membership in Third-Party Defendant’s self-insuring association and the same was accepted by said Contracting Officer.

      . See Note 3, supra.


author: PER CURIAM:

text:
    Ollie CORNIST et al., Plaintiffs-Appellees, v. RICHLAND PARISH SCHOOL BOARD, et al., Defendants-Appellants. Elvert CHISLEY et al., Plaintiffs-Appellees, v. RICHLAND PARISH SCHOOL BOARD, Defendants-Appellants.
    Nos. 73-2619, 73-3529.
    United States Court of Appeals, Fifth Circuit.
    May 13, 1974.

      John F. Ward, Jr., Baton Rouge, La., Donald K. Carroll, Dist. Atty. Parish of Richland, Lowen B. Loften, William R. Coeneia, Sr., Asst. Dist. Attys., Rudolph McIntyre, Dist. Atty., Rayville, La., for defendants-appellants.
    Paul Henry Kidd, Robert P. McLeod, Stephen J. Katz, Monroe, La., Stanley A. Halpin, Jr., New Orleans, La., for plaintiffs-appellees.
    Before BELL, AINSWORTH and GODBOLD, Circuit Judges.
   PER CURIAM:

This is the third appearance of these cases in this court. The Richland Parish School Board dismissed plaintiff El-vert Chisley in July 1970 for alleged incompetence and plaintiff Ollie Cornist in April 1971 for alleged incompetence and wilful neglect of duty. Both plaintiffs are black teachers. Each was dismissed after a hearing conducted under provisions of the Louisiana Teacher Tenure Law. They sought relief in federal court, where the judge dismissed the cases for failure to exhaust the remedies of state court review provided by the state tenure law. On appeal we vacated the dismissal order in one case and remanded for hearing on the merits, Cornist v. Richland Parish School Board, 448 F.2d 594 (CA5, 1971), and in the other case reversed and remanded, Chisley v. Richland Parish School Board, 448 F.2d 1251 (CA5, 1971).

On remand, by judgment as amended of May 1, 1972, the District Court required the Board to immediately reinstate both teachers who, the evidence showed, had been dismissed prior to the Board’s establishing objective criteria as required by Singleton v. Jackson Municipal Separate School District, 419 F.2d 1211 (CA5, 1969, en banc). The Board appealed and on May 14, 1973, by an order entered in the consolidated cases, we denied a motion to dismiss the appeal as untimely and remanded to the District Court for it to consider a motion for new trial, the merits of which it had never reached. Cornist v. Richland Parish School Board, 479 F.2d 37 (CA5, 1973). On remand the District Judge denied the motion for new trial and by a separate opinion and order awarded to counsel for the two plaintiffs attorneys’ fees of $3,750 in each case, a total of $7,500.

The Board then filed another new motion for new trial attacking the award of attorneys’ fees. One of the grounds alleged was that the District Judge had lost jurisdiction because pending the first appeal he had entered an order in each of these eases and other school related cases which said:

On order from my doctor, because I suffer from high blood pressure, I hereby recuse myself in the below described ‘school-related cases.’ All counsel should be notified in said cases that they should apply to one of the other judges of this district, (i. e., Judges Hunter, Putnam, or Scott, in the order of their seniority), for future action upon any school related matters.

The District Judge denied the motion with the following order:

Defendant the Richland Parish School Board, et al’s motion for a new trial is hereby denied on the grounds that this Court’s earlier recusal order did not relate to matters which the Court had previously and explicitly taken under advisement; that defendants have not raised in their motion for a new trial any factual issues which would necessitate an eviden-tiary hearing; and that defendants’ contention that attorney’s fees are inappropriate in this case is entirely without merit for the reasons stated in this Court’s July 9,1973 order.

The Board again appeals. The District Judge did not lose jurisdiction over the merits or the attorney fee issue by reason of his recusal order. We need not decide whether a trial judge’s order re-cusing himself from a case deprives him of the power to act later with regard to that case. In this instance the District Judge construed his own order, as he was entitled to do, as not relating to the issues pending in this case.

The District Court did not err in holding that the two teachers were improperly dismissed and were entitled to reinstatement with back pay. When the hearings and dismissals occurred the Richland Parish system was in transition from dual to unitary status and was having to make reductions in force and transfers. Thus it was required to dismiss or demote teachers only by selection from among all teachers on the basis of objective and reasonable nondiscriminatory criteria. Singleton v. Jackson Municipal Separate School District, supra. The Board had not filed with the court, nor did it utilize, such criteria and in fact did not file criteria until March 2, 1972, long after these dismissals occurred.

In his findings made in the order awarding attorneys’ fees, which were more specific than the findings. in the order directing reinstatement and back pay, the District Judge held that there had been a pattern of racial discrimination against black educators in the Parish and that the dismissals of Cornist and Chisley were racially discriminatory.

The position of the Board is that the matter of whether these two teachers should be dismissed “can be comfortably left to the stringent requirements of the Louisiana Teacher Tenure Law and the courts of this state” rather than imposed upon federal tribunals, or stated more briefly, that the tenure hearings held under state law eliminated the necessity that the Board adopt and comply with Singleton standards. This is not the law. Smith v. Concordia Parish School Board, 493 F.2d 8 [CA5, 1974]; Thompson v. Madison County Board of Education, 476 F.2d 676 at 678-679 (CA5, 1973). McLaurin v. The Columbia Municipal Separate School District, 486 F.2d 1049 (CA5, 1973, en banc). The asserted grounds for dismissal are not within those described in Thompson as “repulsive to minimum standards of decency,” and, additionally, the District Judge found as fact, on ample evidence, that the discharges actually were racially motivated.

Prior to the first appeal, in his order dismissing the cases for failure to exhaust state remedies, the District Judge stated that it affirmatively appeared from the record that the dismissals were not brought about as a result of desegregation of the Parish schools but for other causes. The argument is made that this notation, made without evidentiary inquiry and as an incident of an order erroneously dismissing the cases and remitting the parties to state remedies, controlled the ultimate decision of the cases after this court, in one case vacated and in the other ease reversed the dismissal order and remanded both cases for hearing on the merits. The contention that this non-merits reference operates to circumvent Singleton and emasculate this court from power to order, and the District Court from power to conduct, an evidentiary hearing on the merits and enter findings, is frivolous.

We turn to the merits of the attorney fee issue. The District Court’s order carefully traced the convoluted history of the litigation and the efforts expended by counsel for plaintiffs. The evidence supports the findings of the District Judge that “defendants were in fact obdurately obstinate in their repeated attempts to dismiss these two plaintiffs.” Alternatively, the court found plaintiffs’ attorneys to be entitled to fees because they had acted as “private attorneys general” in securing the rights of plaintiff which benefited not only them but all the black teachers in the Parish as well as the school system as a whole by virtue of the system’s being brought into compliance with federal law and Congressional policy. McLaurin v. Columbia Municipal Sep. Schl. Dist., 478 F.2d 348 (CA5, 1973); Horton v. Lawrence County Bd. of Educ., 449 F.2d 793 (CA5, 1971); Lee v. Southern Home Sites, Corp., 444 F.2d 143 (CA5,1971).

The decision of the District Court is due to be and it is affirmed.

      . LRS 17:441-444.


text:
    Willie THOMPSON, Petitioner-Appellant, v. UNITED STATES of America and Mr. J. F. Koyle et al., Respondents-Appellees.
    No. 73-3154
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 5, 1974.
    Willie Thompson, pro se.
    William S. Sessions, U. S. Atty., San Antonio, Tex., Ralph E. Harris, Asst. U. S. Atty., El Paso, Tex., for respondents-appellees.
    Before COLEMAN, DYER and RO-NEY, Circuit Judges.

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

   PER CURIAM:

This appeal comes to us from the district court’s dismissal of a federal prisoner’s claim for damages under the Federal Tort Claims Act, 28 U.S.C., §§ 1346(b), 2671 et seq. Finding no error in the district court’s ruling, we affirm.

According to the complaint and exhibits filed below, on November 3, 1971 Willie Thompson, who was then an inmate of a United States penitentiary, sustained a work-related back injury while employed by the Federal Prison Industries. He was subsequently hospitalized, where he alleges his injury was aggravated as a result of negligence and malpractice on the part of one of the prison hospital’s employees. Thompson’s claim filed below sought $250,000 damages against the United States due to the wrongful conduct of its employee.

Under the circumstances of this case, the district court correctly dismissed the suit, since it lacked jurisdiction to adjudicate the appellant’s claim under the Federal Tort Claims Act. It is well established that the inmate accident compensation system as set forth in 18 U.S. C., § 4126 is the exclusive means of recovery for a prison-employee’s work-related injuries, United States v. Demko, 1966, 385 U.S. 149, 87 S.Ct. 382, 17 L.Ed.2d 258; Wooten v. United States, 5 Cir., 1971, 437 F.2d 79; United States v. Cole, 5 Cir., 1967, 376 F.2d 848. Despite the appellant’s allegation that the negligence of the hospital worker occasioned further injuries, for which he seeks damages, he is barred from litigating the matter under the Federal Tort Claims Act since the cause of his original injury was work-related and compensable under 18 U.S.C., § 4126, Jewell v. United States, N.D.Ga., 1967, 274 F. Supp. 381.

It should also be noted that the appellant’s claim under 28 U.S.C., § 2671 was filed almost immediately after the district court denied his action seeking compensation under 18 U.S.C., § 4126. This Court recently vacated that ruling and remanded the cause for further proceedings 'on the claim, Thompson v. United States, 5 Cir., 1974, 492 F.2d 1082 [1974]. Thus it is obvious that the appellant has this avenue of redress available to him.

The judgment of the district court dismissing the appellant’s action under the Federal Tort Claims Act is therefore

Affirmed.


author: LEWIS R. MORGAN, Circuit Judge:

text:
    A. DUDA & SONS COOPERATIVE ASSOCIATION, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 73-1246.
    United States Court of Appeals, Fifth Circuit.
    June 6, 1974.

      Scott P. Crampton, Asst. Atty. Gen., Helen E. Marmoll, Meyer Rothwacks Attys., Tax Div., Dept, of Justice, Lee H. Henkel, Jr., Acting Chief Counsel, I. R. S., Washington, D. C., John L. Briggs, U. S. Atty., Jacksonville, Fla., Kendell W. Wherry, Asst. U. S. Atty., Orlando, Fla., Leonard J. Henzke, Jr., Carleton D. Powell, Attys., Tax Div., Dept, of Justice, Washington, D. C., for defendant-appellant.
    George I. Meisel, Cleveland, Ohio, William Y. Akerman, Orlando, Fla., Robert H. Kennedy, Eric M. Oakley, Cleveland, Ohio, for plaintiff-appellee.
    Before RIVES, WISDOM and MORGAN, Circuit Judges.
   LEWIS R. MORGAN, Circuit Judge:

Plaintiff-appellee operated as a tax-exempt cooperative organization under 26 U.S.C. § 521 until 1965, when the Internal Revenue Service revoked its tax-exempt status. Appellee did not contest this action. Soon afterwards, the Service assessed a large deficiency against appellee, which paid the deficiency and now sues under 26 U.S.C. § 7422 for a refund. The district court, finding that the Service illegally revoked the exemption in 1965, entered judgment for the taxpayer. We reverse and remand for further proceedings in the district court.

I.

A. Duda & Sons Cooperative Association, plaintiff-appellee, was organized in 1946 by vegetable and citrus growers of the Slavia region of Florida. In 1948, the Internal Revenue Service ruled that the Association was an exempt cooperative as defined by § 101(12) of the Internal Revenue Code of 1939, the predecessor of § 521 of the Internal Revenue Code of 1954, 26 U.S.C. § 521.

The Association operated as an exempt organization from 1948 through 1965, at which time the Acting Director of the IRS office in Jacksonville sent a determination letter revoking the Association’s tax-exempt status for failure to comply with four technical requirements of the statutory exemption. The government argues that the investigation which led to this revocation also produced evidence which indicated that the Association was not “operating on a cooperative basis,” as required by § 521, but the revocation letter sent to the Association cited the failure to comply with the four enumerated requirements of the act as the only reasons for the revocation. The Association protested the inaccuracy of the factual conclusions relied on to support the revocation, but did not appeal the revocation, as it had the right to do under § 601.201(n) (6) of the Service’s Statement of Procedural Rules, 26 C.F.R. § 601.201(n) (6).

The Acting Director’s letter, dated December 29, 1965, revoked the 1948 ruling “as of September 1, 1956” and stated that the Association would be “required to file Federal Income Tax returns for fiscal year ending August 31, 1962 and subsequent years.”

The revocation of the Association’s tax-exempt status had no immediate effect on its tax liabilities, since even non-exempt cooperatives are entitled to large deductions unavailable to other types of corporations. Thus, when the Association filed the usual corporate income tax forms for 1962 and subsequent years, it claimed deductions under Sub-chapter T of Chapter 1 of the Code, 26 U.S.C. § 1381 et seq. on the ground that it was operating on a cooperative basis, and continued to pay no taxes.

On September 2, 1966, the IRS sent a 30-day letter to the Association asserting proposed deficiencies for the years 1962 through 1965. The IRS disallowed the deductions taken under Subchapter T and summarized its reasons for doing so as follows:

It is held that Association is not “operating on a cooperative basis” and its retained amounts are not “obligations” within the meaning of Section 1381(a)(2) and 1388(a)(2) of the I. R. Code and previous Revenue Rulings. Thus, Association is fully taxable on its net income. The patronage dividend deduction of 1382(b) is not available.

On November 28, 1966, the Association filed a protest of the report which led to the 30-day letter. On August 22, 1968, a notice of deficiency (90-day letter) was sent to the Association. The notice disallowed the Association’s deductions on the ground that during the years in issue, the taxpayer was not “operating on a cooperative basis.” In 1969, taxpayer paid the additional assessed taxes and filed claims for refund with the IRS. After the requisite six months had passed, 26 U.S.C. § 6532(a), taxpayer filed this suit for refund of the taxes

During a pre-trial conference on May 11, 1971, the government’s trial attorney conceded that the four technical reasons cited in the Service’s 1965 revocation letter were factually erroneous. Further discovery was conducted, but on September 13, 1972, the district court ruled that:

The 1965 revocation of the exempt status of plaintiff A. Duda & Sons Cooperative Association was invalid and the defendant cannot challenge Association’s status as “operating on a cooperative basis” in this action. The Court finds, therefore, that Association is entitled to a full refund of taxes and interest paid for the suit years.

Then, on October 18, 1972, although no formal summary judgment motions had been filed, and no documents or testimony had been admitted into evidence, the court entered judgment for the appellee. The government filed a notice of appeal on December 14,1972.

On July 10, 1973, upon a motion of the appellee to supplement the record on appeal, the district court set forth in an order that at the May 11, 1971, conference, counsel for the government admitted that the revocation of the exemption

. was based solely on the asserted non-compliance by plaintiff with the technical requirements of Section 521, and that plaintiff in fact met the said technical requirements of Section 521. Defendant’s counsel also admitted that the. attempted revocation had not been based, in whole or in part, on the contention that plaintiff was not. “operating on a cooperative basis” during fiscal years 1962 through 1965.

The court then stated in the order that, “It was because of these admissions that the Court determined [in its September 13 order] that “the 1965 revocation of the exampt [sic] status of plaintiff A. Duda & Sons Cooperative Association was invalid. . . . ”

II.

The first, and, because of our disposition of it, the only question which arises in this case is whether the district court properly considered the validity of the 1965 revocation in this suit for a refund. We hold that it did not. We do not hold that the district court’s holding was incorrect, but rather that it should not have been made in the first place.

After hearing counsel for the government concede that the factual bases for the 1965 revocation were erroneous, the court held that the revocation was invalid. We note preliminarily that (1) the concession might have been made simply for the purpose of this suit, and for that reason should not be applied to the now-closed administrative record in the revocation proceedings, and (2) the concession might have been made simply for the purposes of narrowing the issues to be tried, and should not be taken as an actual admission that the Service was incorrect in 1965. However, it is not necessary for us to decide either of these questions, for it is our holding that in the circumstances of this case, the validity vel non of the 1965 revocation is closed to further judicial review in the context of a refund suit under 26 U.S.C. § 7422. Cf., Callanan Road Improvement Co. v. United States, 345 U.S. 507, 512, 73 S.Ct. 803, 97 L.Ed. 1206 (1953).

In the context of this case, it matters little whether one speaks of res judicata or collateral estoppel. In this case, the parties are the same as those in the administrative proceeding in question — the government and the association — and the question being relitigated is the same — whether the Service’s 1965 revocation of the Association’s tax-exempt status was proper. Thus, the classic requirements of the doctrine of res judica-ta are fulfilled. But one may also speak in terms of the Association being es-topped from launching a collateral attack on the validity of the 1965 revocation. In either case, the principle at stake is the same — having had a full opportunity to make its case against the revocation of its exemption in 1965, the Association ought not to be allowed to relitigate the merits of that dispute in this suit. To do so would violate both the government’s interest in finality of dispute settlements, and its interest in requiring parties to follow established administrative routes of appeal.

Although it has traditionally been thought that decisions of administrative agencies are not entitled to any res judi-cata effect at all in courts of law, that doctrine has come under increasingly severe attack in recent years. See 2 Davis, Administrative Law §§ 18.01 et seq. As Professor Davis states, the question is no longer whether an administrative determination should be given res judi-cata effect, but rather how much effect it should be given. Davis, supra, § 18.-02. The Supreme Court has held that

When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose, [citations omitted] United States v. Utah Construction and Mining Company, 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966).

Likewise, this court has recognized that

The policy considerations which underlie res judicata — finality to litigation, prevention of needless litigation, avoidance of unnecessary burdens of time and expense — are as relevant to the administrative process as to the judicial. Painters District Council No. 38, Brotherhood of Painters, Decorators and Paperhangers of America v. Edgewood Contracting Company, 416 F.2d 1081 (1969).

To this list of factors to be considered, we add yet another: when the failure to give res judicata effect to a finding of an administrative agency would encourage litigants to bypass prescribed appeal procedures of an agency, that factor should weigh strongly in the decision.

Under the Utah Construction case, the first question was whether the action is “judicial.” In answering that question, Professor Wright notes that:

The best approach is to avoid the labels that have been attached to various functions for other purposes and to determine what is judicial or nonjudicial for purposes of res judicata by emphasizing factors which relate to res judicata. Wright, supra, § 18.08.

In this case, the revocation of appellee’s exemption must be considered a judicial act for the purpose of res judicata. The revocation was directed specifically at the appellee; it was not a general rule applicable to all organizations of a given class. Although, as appellee correctly argues, the revocation had no immediate effect on its tax liability, the revocation did have an immediate effect upon the status of the appel-lee. In addition, appellee was well informed of the progress of the Service’s reconsideration of its tax-exempt status. Finally, after appellee received the December 29 letter from the Acting Director, it could have availed itself of the entire array of IRS review procedures. It could have filed a formal protest of the decision “by submitting a statement of the facts, law, and arguments in support of its continued exemption.” 26 C. F.R. § 601.201(n) (11) (i) [in effect in 1965]. It could have had a conference in the district office. Id. It could have had the matter referred to the National Office. 26 C.F.R. § 601.201(n) (11) (iii).

But appellee chose to forego the opportunity to take advantage of any of those procedures. Instead, it sat on its rights and accepted the decision of the Service. In such a situation, the Service had the authority under its regulations to make the decision to revoke the exemption. It did so.

Appellee at no time has alleged that the procedure used by the Service was unfair. Neither does it contend that it did not have full notice of the effect of the revocation. In fact, in its brief and at oral argument, appellee admits that it knew fully what was happening in the revocation proceeding, and that it made a conscious decision not to appeal. It asserts that the reason for this decision was the expense involved in the appeal and the lack of any immediate impact on the taxes owed by it. But there is no allegation that the avenues of appeal were not open to it as much as to any other taxpayer, or that the Service took any action to deprive it of its right to appeal. The record, in fact, reveals the contrary.

Taxpayer does assert, however, that the reason that the four technical reasons, and not its alleged “failure to operate on a cooperative basis” were alleged in the revocation, was that the agent in charge of the investigation wanted to avoid bringing the question of “operating on a cooperative basis” before the National Office of the IRS, that office having ruled in 1948 that taxpayer was operating .on a cooperative basis. Thus, taxpayer argues, the failure to assert “non-cooperativeness” as a ground for license revocation and the assertion of it as a defense in this refund suit constitute an attempt to circumvent the normal appeal channels of the Service.

Not only is this argument speculative and hypothetical (although ingenious), acceptance of it would create the same harm that it purportedly seeks to avoid. For if the decision of the Service in the license revocation proceeding could be collaterally attacked in a suit for tax refund, the normal appellate processes of the Service could be circumvented. An aggrieved taxpayer could intentionally bypass the avenues of appeal provided by the Service and attack the ultimate assessment of taxes (which is all that really matters) in a suit for refund. This we cannot allow. Congress and the Internal Revenue Service have established very complete and comprehensive methods of review for cases such as this. In such a case, where no procedural unfairness, lack of notice or other extenuating circumstance is even alleged, much less demonstrated, it is not open to the taxpayer to launch a collateral attack on the exemption revocation in a tax refund suit.

We do not now decide that all administrative determinations are for all purposes res judicata in later court proceedings. We merely hold that when the Internal Revenue Service follows proper procedures in revoking the tax exemption of a taxpayer, and that taxpayer acquiesces in the decision by failing to proceed with any kind of administrative remedy, even though it had full notice of the proceedings and full opportunity to appeal the revocation of the exemption, that taxpayer is estopped to assert the invalidity of that revocation in a subsequent suit for refund of taxes paid.

It should also be noted that there is no evidence before this court tending to show that the procedure used by the Service was in any way oppressive or undertaken in bad faith. Had the taxpayer shown, for example, that it was being harrassed by repeated unsuccessful attempts by the Service to revoke its exemption, the situation might be different. There has been no such showing here. The view we take of this case is neither mechanical nor automatic. It is pragmatic, based on the circumstances of this ease, which demonstrate an unsatisfactorily explained refusal to follow standard administrative appeal procedures, followed by an attempted collateral attack on the decision not appealed from. In such a situation, the mere proof that the facts relied on in the earlier proceeding were in some ultimate sense “wrong” is not enough to disturb the finality of the administrative decision.

This decision does not dispose of the matter, of course. It will now be necessary for the district court to determine the merits of the taxpayer’s suit for a refund. It appears from the record that the major question in these proceedings will be whether during the years in question, the taxpayer was “operating on a cooperative basis.” This the court will have to determine for itself. It should be re-emphasized, however, that the district court is not to re-determine the validity of the exemption revocation. That proceeding has been concluded, and the exemption is gone. Absent some showing of fraud, deception, or concealment, taxpayer cannot regain the exemption it lost in the 1965 proceeding. It may, of course, apply for another exemption from the Service, which application would, we assume, be processed through the normal channels. But the exemption revoked in 1965 is now a bit of history. It cannot be resuscitated on the record made in the court below.

Reversed and remanded for further proceedings.

      . 26 U.S.C. § 521 provides in part:

        Exemption of farmers' cooperatives from tax

      (a) Exemption from tax. — A farmers’ cooperative organization described in subsection (b) (1) shall be exempt from taxation under this subtitle except as otherwise provided in part I of subchapter T (sec. 1381 and following). Notwithstanding part I of subchapter T (sec.-1381 and following), such an organization shall be considered an organization exempt from income taxes for purposes of any law which refers to organizations exempt from income taxes.
      >K $ * * *{i

      . The Acting Director’s letter stated:
      The examination of your books and records by Agent Frank Houghton of our Orlando office revealed (1) that since September 1, 1956, a substantial amount of your capital stock outstanding is held by producers who do not market their products or purchase equipment through the association; (2) your purchase of vegetables from non-members, to fill customers’ requirements for vegetables not normally handled by the association, are not on a cooperative basis; (3) you failed to credit the profit from the hardware store activities to non-member patrons; (4) the amounts retained by the cooperation are unreasonable, and the use for which this money is used, i. e. unsecured interest-free advances or loans to one member does not appear to justify the maintenance of such a reserve.